Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Recent Accounting Pronouncements

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Note 9 - Recent Accounting Pronouncements
6 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Accounting Changes and Error Corrections [Text Block]
NOTE
9
- RECENT ACCOUNTING PRONOUNCEMENTS
 
In
May 2014,
the FASB issued ASU
No.
2014
-
09,
Revenue From Contracts With Customers
(Topic
606
). These amendments affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic
605,
Revenue Recognition, and most industry-specific guidance, and creates a Topic
606,
Revenue from Contracts with Customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The ASU allows for either full retrospective or modified retrospective adoption. In
August 2015,
the FASB issued ASU
2015
-
14,
Revenue From Contracts With Customers (Topic
606
): Deferral of the Effective Date.
This ASU defers the effective date of ASU
2014
-
09,
Revenue From Contracts With Customers (Topic
606
)
, by
one
year. The new guidance is effective for interim and annual reporting periods beginning after
December 15, 2017.
The Company’s revenue has been more significantly weighted towards net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new standard, and noninterest income has
not
been as significant. The Company has begun to scope its general ledger revenue items and assess its contracts with customers to identify its performance obligations and will continue to evaluate the impact of adoption on its noninterest income and on its disclosures.
 
In
January 2016,
the FASB issued ASU
2016
-
01,
Financial Instruments Overall (Topic
825
): Recognition and Measurement of Financial Assets and Financial Liabilities
. The amendments in ASU
2016
-
1:
(a) require equity investments (except for those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplify the impairment assessment of equity securities without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminate the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (d) require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (e) require an entity to present separately in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (f) require separate presentation of financial assets and financial liabilities by measurement category and form of financial assets on the balance sheet or the notes to the financial statements; and (g) clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. The amendments in this ASU are effective for public companies for fiscal years beginning after
December 15, 2017,
including interim periods within those fiscal years. The Company is evaluating the provisions of this ASU to determine the potential impact the new standard will have on the Company’s consolidated financial statements.
 
In
February 2016,
the FASB issued ASU
2016
-
02,
 
Leases (Topic
842
)
. The FASB issued this ASU to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under current U.S. GAAP and disclosing key information about leasing arrangements. The amendments in this ASU are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after
December 15, 2018.
Early application of this ASU is permitted for all entities. The Company leases many of its banking offices under lease agreements it classifies as operating leases. The Company is currently evaluating the impact that the new guidance will have on its consolidated financial statements. Management currently anticipates recognizing a right-of-use asset and a lease liability associated with its long-term operating leases.
 
In
June 2016,
the FASB issued ASU
2016
-
13,
Financial Instruments-Credit Losses (Topic
326
): Measurement of Credit Losses on Financial Instruments
, which is essentially the final rule on use of the so-called CECL model, or current expected credit losses. Among other things, the amendments in this ASU require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For SEC filers, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2019,
with later effective dates for non-SEC registrant public companies and other organizations. Early adoption will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2018.
The Company is currently evaluating the impact of the amendments in this ASU on its consolidated financial statements, and is collecting data that will be needed to produce historical inputs into any models created as a result of adopting this ASU.
 
In
March 2017,
the FASB issued ASU
2017
-
08,
Receivables – Nonrefundable Fees and Other Costs (Subtopic
310
-
20
), Premium Amortization on Purchased Callable Debt Securities.
The amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do
not
require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments in this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2018.
Early adoption is permitted. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The amendments in this ASU will
not
impact the Company’s financial statements as it has always amortized premiums to the
first
call date.
 
In
May 2017,
the FASB issued ASU
No.
2017
-
09,
Compensation - Stock Compensation (Topic
718
)
,
Scope of Modification Accounting
. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic
718.
The guidance is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2017.
Early adoption is permitted, including adoption in an interim period. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of the amendments in the ASU on the its consolidated financial statements.