Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 4. Loans and Allowance for Loan Losses June 30, December 31, 2015 2014 Commercial real estate-mortgage: Owner-occupied $ 73,178 $ 68,581 All other 76,277 74,587 Consumer real estate-mortgage 76,707 76,907 Construction and land development 40,998 34,449 Commercial and industrial 40,433 37,863 Consumer and other 2,257 2,977 Total loans 309,850 295,364 Less: Allowance for loan losses (3,579) (3,495) Loans, net $ 306,271 $ 291,869 The following describe risk characteristics relevant to each of the portfolio segments: Real estate: As discussed below, Cornerstone offers various types of real estate loan products. All loans within this portfolio segment are particularly sensitive to the valuation of real estate: · Commercial real estate-mortgage loans include owner-occupied commercial real estate loans and other commercial real estate loans. Owner-occupied commercial real estate loans to operating businesses are long-term financing of land and buildings. Other commercial real estate loans are generally secured by income producing properties. · Consumer real estate-mortgage loans include loans secured by 1-4 family and multifamily residential properties. These loans are repaid by various means such as a borrower’s income, sale of the property, or rental income derived from the property. · Construction and land development loans include extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral. These loans are repaid through cash flow related to the operations, sale or refinance of the underlying property. This portfolio segment also includes owner-occupied construction loans for commercial businesses for the development of land or construction of a building. These loans are repaid by cash flow generated from the business operation. Real estate loans for income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers are repaid from rent income derived from the properties. Commercial and industrial: The commercial and industrial loans include those loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or expansion projects. Loans are repaid by business cash flows. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly cash flows from the customers’ business operations. Consumer and other: The consumer loan portfolio segment includes direct consumer installment loans, overdrafts and other revolving credit loans, and educational loans. Loans in this portfolio are sensitive to unemployment and other key consumer economic measures. Cornerstone follows the loan impairment accounting guidance in ASC Topic 310. A loan is considered impaired when, based on current information and events, it is probable that Cornerstone will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans and loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in interest rates, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collections. June 30, 2015 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Mortgage Mortgage Development Industrial and Other Total Performing loans $ 147,143 $ 75,217 $ 40,768 $ 39,452 $ 2,257 $ 304,837 Impaired loans 2,312 1,490 230 981 - 5,013 Total $ 149,455 $ 76,707 $ 40,998 $ 40,433 $ 2,257 $ 309,850 December 31, 2014 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Mortgage Mortgage Development Industrial and Other Total Performing loans $ 138,711 $ 74,828 $ 33,696 $ 36,314 $ 2,977 $ 286,526 Impaired loans 4,457 2,079 753 1,549 - 8,838 Total $ 143,168 $ 76,907 $ 34,449 $ 37,863 $ 2,977 $ 295,364 June 30, 2015 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Allowance related to: Mortgage Mortgage Development Industrial and Other Total Performing loans $ 1,699 $ 1,022 $ 216 $ 524 $ 67 $ 3,528 Impaired loans 47 - - 4 - 51 Total $ 1,746 $ 1,022 $ 216 $ 528 $ 67 $ 3,579 December 31, 2014 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Allowance related to: Mortgage Mortgage Development Industrial and Other Total Performing loans $ 1,191 $ 1,082 $ 130 $ 361 $ 35 $ 2,799 Impaired loans 404 15 - 277 - 696 Total $ 1,595 $ 1,097 $ 130 $ 638 $ 35 $ 3,495 June 30, 2015 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Mortgage Mortgage Development Industrial and Other Total Beginning balance $ 1,595 $ 1,097 $ 130 $ 638 $ 35 $ 3,495 Charged-off loans (132) (17) - (209) (14) (372) Recovery of charge-offs 42 27 85 22 18 194 Provision for (reallocation of) loan losses 241 (85) 1 77 28 262 Ending balance $ 1,746 $ 1,022 $ 216 $ 528 $ 67 $ 3,579 December 31, 2014 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Mortgage Mortgage Development Industrial and Other Total Beginning balance $ 1,549 $ 938 $ 319 $ 352 $ 45 $ 3,203 Charged-off loans (470) (896) (58) (108) (50) (1,582) Recovery of charge-offs 156 324 771 58 50 1,359 Provision for (reallocation of) loan losses 360 731 (902) 336 (10) 515 Ending balance $ 1,595 $ 1,097 $ 130 $ 638 $ 35 $ 3,495 Credit quality indicators: Federal regulations require the Bank to review and classify its assets on a regular basis. To fulfill this requirement, the Bank systematically reviews its loan portfolio to ensure the Bank’s large loan relationships are being maintained within its loan policy guidelines, remain properly underwritten and are properly classified by loan grade. This review process is performed by the Bank's management, internal and external loan review, internal auditors, and state and federal regulators. ⋅ All loans are assigned a loan grade at the time of origination by the relationship manager. Typically, a loan is assigned a loan grade of “pass” at origination. ⋅ Loan relationships greater than or equal to $500 thousand are reviewed by the Bank’s external loan review provider on an annual basis. ⋅ Additionally, the Bank’s external loan review provider samples other loan relationships between $100 thousand and $500 thousand with an emphasis on commercial and commercial real estate loans and insider loans. ⋅ The Bank’s internal loan review department samples approximately 33 percent of all other loan relationships less than $500 thousand on an annual basis for review. ⋅ If a loan is delinquent 60 days or more or a pattern of delinquency exists, the loan will be selected for review. ⋅ Generally, all loans on the Bank’s internal watchlist are reviewed annually by internal loan review or external loan review providers. If a loan is classified as a problem asset, it will be assigned one of the following loan grades: substandard, doubtful, and loss. “Substandard” assets must have one or more defined weaknesses and are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. “Doubtful” assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified “loss” is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. The regulations also provide for a “special mention” category, described as assets which do not currently expose an institution to a sufficient degree of risk to warrant classification but do possess credit deficiencies or potential weaknesses deserving close attention. When the Bank classifies an asset as substandard or doubtful, a specific allowance for loan losses may be established. June 30, 2015 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Mortgage Mortgage Development Industrial and Other Total Pass $ 145,041 $ 74,072 $ 39,967 $ 38,141 $ 2,257 $ 299,478 Special mention 2,347 1,089 525 957 - 4,918 Substandard 2,067 1,546 506 1,335 - 5,454 $ 149,455 $ 76,707 $ 40,998 $ 40,433 $ 2,257 $ 309,850 December 31, 2014 Commercial Consumer Construction Commercial Real Estate- Real Estate- and Land and Consumer Mortgage Mortgage Development Industrial and Other Total Pass $ 135,586 $ 72,753 $ 33,201 $ 32,684 $ 2,977 $ 277,201 Special mention 3,096 1,452 17 3,187 - 7,752 Substandard 4,486 2,702 1,231 1,992 - 10,411 $ 143,168 $ 76,907 $ 34,449 $ 37,863 $ 2,977 $ 295,364 After the Bank’s independent loan review department completes the loan grade assignment, a loan impairment analysis is performed on loans graded substandard or worse. For the quarter ended At June 30, 2015 June 30, 2015 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized Impaired loans without a valuation allowance: Commercial real estate mortgage $ 1,918 $ 1,970 $ - $ 2,248 $ 59 Consumer real estate mortgage 1,490 1,507 - 1,580 51 Construction and land development 230 243 - 405 6 Commercial and industrial 964 1,007 - 998 19 Total $ 4,602 $ 4,727 $ - $ 5,231 $ 135 Impaired loans with a valuation allowance: Commercial real estate mortgage $ 394 $ 431 $ 47 $ 949 $ 12 Consumer real estate mortgage 114 - Construction and land development - - - - - Commercial and industrial 17 17 4 253 1 Total $ 411 $ 448 $ 51 $ 1,316 $ 13 Total impaired loans $ 5,013 $ 5,175 $ 51 $ 6,547 $ 148 For the year ended At December 31, 2014 December 31, 2014 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized Impaired loans without a valuation allowance: Commercial real estate mortgage $ 2,428 $ 2,480 $ - $ 4,386 $ 127 Consumer real estate mortgage 1,738 1,742 - 1,880 114 Construction and land development 753 766 - 462 44 Commercial and industrial 1,033 1,085 - 1,186 41 Total $ 5,952 $ 6,073 $ - $ 7,914 $ 326 Impaired loans with a valuation allowance: Commercial real estate mortgage $ 2,029 $ 2,029 $ 404 $ 683 $ 98 Consumer real estate mortgage 341 476 15 676 24 Construction and land development - - - - - Commercial and industrial 516 516 277 401 52 Total $ 2,886 $ 3,021 $ 696 $ 1,760 $ 174 Total impaired loans $ 8,838 $ 9,094 $ 696 $ 9,674 $ 500 June 30, 2015 30-89 Days Past Due 90 Past Due and Days or More Total Current Total Accruing and Accruing Nonaccrual Past Due Loans Loans Commercial real estate-mortgage: Owner-occupied $ 377 $ - $ 444 $ 821 $ 72,357 $ 73,178 All other 392 - - 392 75,885 76,277 Consumer real estate-mortgage 510 - 436 946 75,761 76,707 Construction and land development 25 - - 25 40,973 40,998 Commercial and industrial 95 - 10 105 40,328 40,433 Consumer and other 23 - - 23 2,234 2,257 Total $ 1,422 $ - $ 890 $ 2,312 $ 307,538 $ 309,850 December 31, 2014 30-89 Days Past Due 90 Past Due and Days or More Total Current Total Accruing and Accruing Nonaccrual Past Due Loans Loans Commercial real estate-mortgage: Owner-occupied $ 664 $ - $ 496 $ 1,160 $ 67,421 $ 68,581 All other - - - - 74,587 74,587 Consumer real estate-mortgage 419 - 1,134 1,553 75,354 76,907 Construction and land development 521 - 40 561 33,888 34,449 Commercial and industrial 54 - 1,195 1,249 36,614 37,863 Consumer and other 8 - - 8 2,969 2,977 Total $ 1,666 $ - $ 2,865 $ 4,531 $ 290,833 $ 295,364 Impaired loans also include loans that the Bank has elected to formally restructure when, due to the weakening credit status of a borrower, the restructuring may facilitate a repayment plan that seeks to minimize the potential losses that the Bank may have to otherwise incur. At June 30, 2015 and December 31, 2014, the Bank has loans of approximately $ 2,778,000 5,753,000 There were no loans modified as troubled debt restructurings during the six month period ending June 30, 2015. There was one commercial real estate-mortgage loan with a pre-modification and post-modification outstanding recorded investment of $ 480,000 There were no loans that were modified as troubled debt restructurings during the past twelve months and for which there was a subsequent payment default. |