Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 3. Loans and Allowance for Loan Losses The Company’s loan and allowance for loan loss policies are as follows: Loans are stated at unpaid principal balances, less net deferred loan fees and the allowance for loan losses. The Company originates real estate mortgage, commercial business and consumer loans. A substantial portion of the loan portfolio is represented by mortgage loans to customers in the Louisville, Kentucky metropolitan statistical area (MSA). The ability of the Company’s customers to honor their loan agreements is largely dependent upon the real estate and general economic conditions in this area. Loan origination and commitment fees, as well as certain direct costs of underwriting and closing loans, are deferred and amortized as a yield adjustment to interest income over the lives of the related loans using the interest method. Amortization of net deferred loan fees is discontinued when a loan is placed on nonaccrual status. The recognition of income on a loan is discontinued and previously accrued interest is reversed, when interest or principal payments become ninety 90 A loan is restored to accrual status when all principal and interest payments are brought current and the borrower has demonstrated the ability to make future payments of principal and interest as scheduled, which generally requires that the borrower demonstrate a period of performance of at least six For portfolio segments other than consumer loans, the Company’s practice is to charge-off any loan or portion of a loan when the loan is determined by management to be uncollectible due to the borrower’s failure to meet repayment terms, the borrower’s deteriorating or deteriorated financial condition, the depreciation of the underlying collateral, the loan’s classification as a loss by regulatory examiners, or for other reasons. A partial charge-off is recorded on a loan when the uncollectibility of a portion of the loan has been confirmed, such as when a loan is discharged in bankruptcy, the collateral is liquidated, a loan is restructured at a reduced principal balance, or other identifiable events that lead management to determine the full principal balance of the loan will not not September 30, 2017, six $173,000 Consumer loans not 90 45 The allowance for loan losses reflects management’s judgment of probable loan losses inherent in the loan portfolio at the balance sheet date. Additions to the allowance for loan losses are made by the provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The Company uses a disciplined process and methodology to evaluate the allowance for loan losses on at least a quarterly basis that is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may The allowance consists of specific and general components. The specific component relates to loans that are individually evaluated for impairment or loans otherwise classified as doubtful, substandard, or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and classified loans that are found, upon individual evaluation, to not twelve not Management also applies additional loss factor multiples to loans classified as watch, special mention and substandard that are not September 30, 2017 December 31, 2016. Management exercises significant judgment in evaluating the relevant historical loss experience and the qualitative factors. Management also monitors the differences between estimated and actual incurred loan losses for loans considered impaired in order to evaluate the effectiveness of the estimation process and make any changes in the methodology as necessary. Management utilizes the following portfolio segments in its analysis of the allowance for loan losses: residential real estate, land, construction, commercial real estate, commercial business, home equity and second 10 December 31, 2016. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not Values for collateral dependent loans are generally based on appraisals obtained from independent licensed real estate appraisers, with adjustments applied for estimated costs to sell the property, costs to complete unfinished or repair damaged property and other factors. New appraisals are generally obtained for all significant properties when a loan is identified as impaired, and a property is considered significant if the value of the property is estimated to exceed $200,000. not At September 30, 2017 December 31, 2016, $1.5 $793,000, Loans at September 30, 2017 December 31, 2016 (In thousands) September 30, December 31, Real estate mortgage loans: Residential $ 136,273 $ 137,842 Land 17,638 13,895 Residential construction 33,263 29,561 Commercial real estate 95,339 96,462 Commercial real estate contruction 7,044 8,921 Commercial business loans 28,525 24,056 Consumer loans: Home equity and second mortgage loans 48,951 42,908 Automobile loans 38,033 34,279 Loans secured by savings accounts 1,916 1,879 Unsecured loans 3,747 3,912 Other consumer loans 9,880 9,025 Gross loans 420,609 402,740 Less undisbursed portion of loans in process (17,333 ) (19,037 ) Principal loan balance 403,276 383,703 Deferred loan origination fees, net 1,023 837 Allowance for loan losses (3,537 ) (3,386 ) Loans, net $ 400,762 $ 381,154 The following table provides the components of the Company’s recorded investment in loans at September 30, 2017: Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Recorded Investment in Loans: Principal loan balance $ 136,273 $ 17,638 $ 22,974 $ 95,339 $ 28,525 $ 48,951 $ 53,576 $ 403,276 Accrued interest receivable 454 83 48 206 70 174 227 1,262 Net deferred loan origination fees and costs 86 16 (3 ) (33 ) 3 954 0 1,023 Recorded investment in loans $ 136,813 $ 17,737 $ 23,019 $ 95,512 $ 28,598 $ 50,079 $ 53,803 $ 405,561 Recorded Investment in Loans as Evaluated for Impairment: Individually evaluated for impairment $ 2,950 $ 0 $ 0 $ 297 $ 55 $ 256 $ 0 $ 3,558 Collectively evaluated for impairment 133,480 17,737 23,019 95,162 28,543 49,823 53,803 401,567 Acquired with deteriorated credit quality 383 0 0 53 0 0 0 436 Ending balance $ 136,813 $ 17,737 $ 23,019 $ 95,512 $ 28,598 $ 50,079 $ 53,803 $ 405,561 The following table provides the components of the Company’s recorded investment in loans at December 31, 2016: Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Recorded Investment in Loans: Principal loan balance $ 137,842 $ 13,895 $ 19,445 $ 96,462 $ 24,056 $ 42,908 $ 49,095 $ 383,703 Accrued interest receivable 455 42 44 249 67 141 226 1,224 Net deferred loan origination fees and costs 80 14 0 (42 ) 3 782 0 837 Recorded investment in loans $ 138,377 $ 13,951 $ 19,489 $ 96,669 $ 24,126 $ 43,831 $ 49,321 $ 385,764 Recorded Investment in Loans as Evaluated for Impairment: Individually evaluated for impairment $ 2,083 $ 0 $ 0 $ 1,217 $ 143 $ 244 $ 20 $ 3,707 Collectively evaluated for impairment 135,904 13,951 19,489 95,212 23,983 43,587 49,301 381,427 Acquired with deteriorated credit quality 390 0 0 240 0 0 0 630 Ending balance $ 138,377 $ 13,951 $ 19,489 $ 96,669 $ 24,126 $ 43,831 $ 49,321 $ 385,764 An analysis of the allowance for loan losses as of September 30, 2017 Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Ending allowance balance attributable to loans: Individually evaluated for impairment $ 24 $ 0 $ 0 $ 0 $ 0 $ 13 $ 0 $ 37 Collectively evaluated for impairment 176 126 261 1,591 235 727 380 3,496 Acquired with deteriorated credit quality 4 0 0 0 0 0 0 4 Ending balance $ 204 $ 126 $ 261 $ 1,591 $ 235 $ 740 $ 380 $ 3,537 An analysis of the allowance for loan losses as of December 31, 2016 Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Ending allowance balance attributable to loans: Individually evaluated for impairment $ 23 $ 0 $ 0 $ 0 $ 43 $ 13 $ 6 $ 85 Collectively evaluated for impairment 357 56 80 1,670 155 670 313 3,301 Acquired with deteriorated credit quality 0 0 0 0 0 0 0 0 Ending balance $ 380 $ 56 $ 80 $ 1,670 $ 198 $ 683 $ 319 $ 3,386 An analysis of the changes in the allowance for loan losses for the three nine September 30, 2017 Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Allowance for loan losses: Changes in Allowance for Loan Losses for the three-months ended September 30, 2017 Beginning balance $ 212 $ 124 $ 306 $ 1,583 $ 290 $ 680 $ 331 $ 3,526 Provisions for loan losses (9 ) 2 (45 ) (15 ) (8 ) 58 167 150 Charge-offs (2 ) 0 0 0 (47 ) 0 (157 ) (206 ) Recoveries 3 0 0 23 0 2 39 67 Ending balance $ 204 $ 126 $ 261 $ 1,591 $ 235 $ 740 $ 380 $ 3,537 Changes in Allowance for Loan Losses for the nine-months ended September 30, 2017 Beginning balance $ 380 $ 56 $ 80 $ 1,670 $ 198 $ 683 $ 319 $ 3,386 Provisions for loan losses (155 ) 70 181 (147 ) 123 59 486 617 Charge-offs (48 ) 0 0 (3 ) (90 ) (6 ) (547 ) (694 ) Recoveries 27 0 0 71 4 4 122 228 Ending balance $ 204 $ 126 $ 261 $ 1,591 $ 235 $ 740 $ 380 $ 3,537 An analysis of the changes in the allowance for loan losses for the three nine September 30, 2016 Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Allowance for loan losses: Changes in Allowance for Loan Losses for the three-months ended September 30, 2016 Beginning balance $ 408 $ 47 $ 42 $ 1,473 $ 162 $ 791 $ 266 $ 3,189 Provisions for loan losses (29 ) 2 21 100 (21 ) 31 96 200 Charge-offs (14 ) 0 0 0 0 0 (106 ) (120 ) Recoveries 17 0 0 3 0 4 27 51 Ending balance $ 382 $ 49 $ 63 $ 1,576 $ 141 $ 826 $ 283 $ 3,320 Changes in Allowance for Loan Losses for the nine-months ended September 30, 2016 Beginning balance $ 527 $ 157 $ 47 $ 1,541 $ 261 $ 626 $ 256 $ 3,415 Provisions for loan losses (70 ) (99 ) 16 96 (9 ) 223 268 425 Charge-offs (108 ) (9 ) 0 (82 ) (114 ) (36 ) (325 ) (674 ) Recoveries 33 0 0 21 3 13 84 154 Ending balance $ 382 $ 49 $ 63 $ 1,576 $ 141 $ 826 $ 283 $ 3,320 At September 30, 2017 December 31, 2016, not 0.33% 20% $2.3 $1.8 September 30, 2017 December 31, 2016, September 30, 2017 December 31, 2016. At September 30, 2017 December 31, 2016, 1.18 four 1.18 September 30, 2017 December 31, 2016. $544,000 $501,000 September 30, 2017 December 31, 2016, 10 December 31, 2016. no December 31, 2016 September 30, 2017. Management also adjusts the historical loss factors for loans classified as watch, special mention and substandard that are not $590,000 $559,000 September 30, 2017 December 31, 2016, December 31, 2016 September 30, 2017, The following table summarizes the Company’s impaired loans as of September 30, 2017 three nine September 30, 2017. not three nine September 30, 2017: Three Months Ended Nine Months Ended At September 30, 2017 September 30, 2017 September 30, 2017 Unpaid Average Interest Average Interest Recorded Principal Related Recorded Income Recorded Income Investment Balance Allowance Investment Recognized Investment Recognized (In thousands) Loans with no related allowance recorded: Residential $ 2,846 $ 3,060 $ 0 $ 2,736 $ 7 $ 2,373 $ 20 Land 0 0 0 0 0 0 0 Construction 0 0 0 0 0 0 0 Commercial real estate 297 438 0 366 5 758 13 Commercial business 55 64 0 63 0 69 0 Home equity/2nd mortgage 225 232 0 226 0 228 1 Other consumer 0 0 0 6 0 6 0 3,423 3,794 0 3,397 12 3,434 34 Loans with an allowance recorded: Residential 104 111 24 95 0 122 0 Land 0 0 0 0 0 0 0 Construction 0 0 0 0 0 0 0 Commercial real estate 0 0 0 0 0 0 0 Commercial business 0 0 0 25 0 42 0 Home equity/2nd mortgage 31 32 13 32 0 22 0 Other consumer 0 0 0 17 0 17 0 135 143 37 169 0 203 0 Total: Residential 2,950 3,171 24 2,831 7 2,495 20 Land 0 0 0 0 0 0 0 Construction 0 0 0 0 0 0 0 Commercial real estate 297 438 0 366 5 758 13 Commercial business 55 64 0 88 0 111 0 Home equity/2nd mortgage 256 264 13 258 0 250 1 Other consumer 0 0 0 23 0 23 0 $ 3,558 $ 3,937 $ 37 $ 3,566 $ 12 $ 3,637 $ 34 The following table summarizes the Company’s impaired loans for the three nine September 30, 2016. not three nine September 30, 2016: Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized Loans with no related allowance recorded: Residential $ 1,903 $ 6 $ 1,912 $ 20 Land 0 0 6 0 Construction 0 3 0 3 Commercial real estate 3,396 18 3,394 55 Commercial business 62 0 64 0 Home equity/2nd mortgage 52 0 53 1 Other consumer 7 0 5 0 5,420 27 5,434 79 Loans with an allowance recorded: Residential 157 0 132 0 Land 0 0 0 0 Construction 0 0 0 0 Commercial real estate 87 0 124 0 Commercial business 33 0 50 0 Home equity/2nd mortgage 13 0 30 0 Other consumer 29 0 22 0 319 0 358 0 Total: Residential 2,060 6 2,044 20 Land 0 0 6 0 Construction 0 3 0 3 Commercial real estate 3,483 18 3,518 55 Commercial business 95 0 114 0 Home equity/2nd mortgage 65 0 83 1 Other consumer 36 0 27 0 $ 5,739 $ 27 $ 5,792 $ 79 The following table summarizes the Company’s impaired loans as of December 31, 2016: Unpaid Recorded Principal Related Investment Balance Allowance (In thousands) Loans with no related allowance recorded: Residential $ 1,871 $ 2,223 $ 0 Land 0 0 0 Construction 0 0 0 Commercial real estate 1,217 1,540 0 Commercial business 75 81 0 Home equity/2nd mortgage 231 237 0 Other consumer 0 0 0 3,394 4,081 0 Loans with an allowance recorded: Residential 212 217 23 Land 0 0 0 Construction 0 0 0 Commercial real estate 0 0 0 Commercial business 68 68 43 Home equity/2nd mortgage 13 14 13 Other consumer 20 20 6 313 319 85 Total: Residential 2,083 2,440 23 Land 0 0 0 Construction 0 0 0 Commercial real estate 1,217 1,540 0 Commercial business 143 149 43 Home equity/2nd mortgage 244 251 13 Other consumer 20 20 6 $ 3,707 $ 4,400 $ 85 Nonperforming loans consists of nonaccrual loans and loans over 90 September 30, 2017 December 31, 2016: September 30, 2017 December 31, 2016 Loans 90+ Days Total Loans 90+ Days Total Nonaccrual Past Due Nonperforming Nonaccrual Past Due Nonperforming Loans Still Accruing Loans Loans Still Accruing Loans (In thousands) Residential $ 2,338 $ 13 $ 2,351 $ 1,634 $ 55 $ 1,689 Land 0 0 0 0 0 0 Construction 0 0 0 0 0 0 Commercial real estate 33 0 33 924 0 924 Commercial business 55 0 55 142 0 142 Home equity/2nd mortgage 239 0 239 226 0 226 Other consumer 0 0 0 20 23 43 Total $ 2,665 $ 13 $ 2,678 $ 2,946 $ 78 $ 3,024 The following table presents the aging of the recorded investment in loans at September 30, 2017: Purchased 30-59 Days 60-89 Days 90 Days or More Total Credit Total Past Due Past Due Past Due Past Due Current Impaired Loans Loans (In thousands) Residential $ 1,635 $ 905 $ 1,449 $ 3,989 $ 132,441 $ 383 $ 136,813 Land 147 5 0 152 17,585 0 17,737 Construction 0 0 0 0 23,019 0 23,019 Commercial real estate 0 0 33 33 95,426 53 95,512 Commercial business 651 65 0 716 27,882 0 28,598 Home equity/2nd mortgage 78 40 179 297 49,782 0 50,079 Other consumer 272 44 0 316 53,487 0 53,803 Total $ 2,783 $ 1,059 $ 1,661 $ 5,503 $ 399,622 $ 436 $ 405,561 The following table presents the aging of the recorded investment in loans at December 31, 2016: Purchased 30-59 Days 60-89 Days 90 Days or More Total Credit Total Past Due Past Due Past Due Past Due Current Impaired Loans Loans (In thousands) Residential $ 2,444 $ 707 $ 1,021 $ 4,172 $ 133,815 $ 390 $ 138,377 Land 0 52 0 52 13,899 0 13,951 Construction 0 0 0 0 19,489 0 19,489 Commercial real estate 0 0 27 27 96,402 240 96,669 Commercial business 155 0 83 238 23,888 0 24,126 Home equity/2nd mortgage 352 0 13 365 43,466 0 43,831 Other consumer 319 66 43 428 48,893 0 49,321 Total $ 3,270 $ 825 $ 1,187 $ 5,282 $ 379,852 $ 630 $ 385,764 The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings: Special Mention: may Substandard: not Doubtful: Loss: not Loans not The following table presents the recorded investment in loans by risk category as of the date indicated: Residential Commercial Commercial Home Equity & Other Real Estate Land Construction Real Estate Business 2nd Mtg Consumer Total (In thousands) September 30, 2017 Pass $ 133,323 $ 17,528 $ 22,952 $ 89,685 $ 27,620 $ 49,838 $ 53,670 $ 394,616 Special Mention 385 85 67 2,749 781 0 133 4,200 Substandard 721 124 0 3,045 142 2 0 4,034 Doubtful 2,384 0 0 33 55 239 0 2,711 Loss 0 0 0 0 0 0 0 0 Total $ 136,813 $ 17,737 $ 23,019 $ 95,512 $ 28,598 $ 50,079 $ 53,803 $ 405,561 December 31, 2016 Pass $ 135,328 $ 13,795 $ 19,489 $ 87,782 $ 23,246 $ 43,601 $ 49,256 $ 372,497 Special Mention 403 86 0 1,892 661 0 45 3,087 Substandard 721 70 0 5,991 77 4 0 6,863 Doubtful 1,925 0 0 1,004 142 226 20 3,317 Loss 0 0 0 0 0 0 0 0 Total $ 138,377 $ 13,951 $ 19,489 $ 96,669 $ 24,126 $ 43,831 $ 49,321 $ 385,764 The following table summarizes the Company’s troubled debt restructurings (TDRs) by accrual status as of September 30, 2017 December 31, 2016: September 30, 2017 December 31, 2016 Related Allowance Related Allowance Accruing Nonaccrual Total for Loan Losses Accruing Nonaccrual Total for Loan Losses (In thousands) Troubled debt restructurings: Residential real estate $ 490 $ 102 $ 592 $ 0 $ 433 $ 229 $ 662 $ 0 Commercial real estate 358 0 358 0 291 168 459 0 Home equity and 2nd mortgage 16 0 16 0 18 0 18 0 Total $ 864 $ 102 $ 966 $ 0 $ 742 $ 397 $ 1,139 $ 0 At September 30, 2017 December 31, 2016, no The following table summarizes information in regard to TDRs that were restructured during the three nine September 30, 2017: Three months ended September 30, 2017 Nine months ended September 30, 2017 Pre-Modifcation Post-Modifcation Pre-Modifcation Post-Modifcation Number of Outstanding Outstanding Number of Outstanding Outstanding Contracts Balance Balance Contracts Balance Balance (Dollars in thousands) Troubled debt restructurings: Residential real estate 1 $ 65 $ 65 1 $ 65 $ 65 Total 1 $ 65 $ 65 1 $ 65 $ 65 For the TDR listed above, the terms of modification included the deferral of contractual principal payments. There were no three nine September 30, 2016. There were no no three nine September 30, 2017 2016. There were no 12 90 three nine September 30, 2017 2016. may may Purchased Credit Impaired (PCI) Loans Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date with no not 310 30. The following table presents the carrying amount of PCI loans accounted for under ASC 310 30 September 30, 2017 December 31, 2016: September 30, December 31, (In thousands) 2017 2016 Residential real estate $ 383 $ 390 Commercial real estate 53 240 Carrying amount 436 630 Allowance for loan losses 4 0 Carrying amount, net of allowance $ 432 $ 630 The outstanding balance of PCI loans accounted for under ASC 310 30, $699,000 $754,000 September 30, 2017 December 31, 2016, The allowance for loan losses related to PCI loans was $4,000 September 30, 2017. no December 31, 2016. $4,000 three nine September 30, 2017. no nine September 30, 2016. $6,000 three September 30, 2016. Accretable yield, or income expected to be collected, is as follows for the three nine September 30, 2017 2016: Three Months Ended Nine Months Ended 9/30/2017 9/30/2016 9/30/2017 9/30/2016 Balance at beginning of period $ 223 $ 165 $ 252 $ 319 New loans purchased - - - - Accretion to income (12 ) (17 ) (40 ) (61 ) Disposals and other adjustments (1 ) (19 ) (18 ) (93 ) Reclassification from nonaccretable difference 271 42 287 6 Balance at end of period $ 481 $ 171 $ 481 $ 171 |