Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ( 5 LOANS AND ALLOWANCE FOR LOAN LOSSES Loans at December 31, 2017 2016 (In thousands) 2017 2016 Real estate mortgage loans: Residential $ 136,399 $ 137,842 Land 18,198 13,895 Residential construction 28,854 29,561 Commercial real estate 100,133 96,462 Commercial real estate construction 17,161 8,921 Commercial business loans 34,114 24,056 Consumer loans: Home equity and second mortgage loans 49,802 42,908 Automobile loans 38,361 34,279 Loans secured by deposits 1,751 1,879 Unsecured loans 3,744 3,912 Other consumer loans 8,714 9,025 Gross loans 437,231 402,740 Less undisbursed portion of loans in process (25,020 ) (19,037 ) Principal loan balance 412,211 383,703 Deferred loan origination fees and costs, net 1,041 837 Allowance for loan losses (3,634 ) (3,386 ) Loans, net $ 409,618 $ 381,154 At December 31, 2017 2016, $87,000 $137,000, At December 31, 2017 2016, 90% $3.2 $3.7 Mortgage loans serviced for the benefit of others amounted to $117,000 $126,000 December 31, 2017 2016, The Bank has entered into loan transactions with certain directors, officers and their affiliates (i.e., related parties). In the opinion of management, such indebtedness was incurred in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with unrelated persons and does not The following table represents the aggregate activity for related party loans during the years ended December 31, 2017 2016. (In thousands) 2017 2016 Beginning balance $ 7,844 $ 8,175 Adjustments due to officer and director changes (93 ) (900 ) New loans 1,303 2,897 Payments (1,415 ) (2,328 ) Ending balance $ 7,639 $ 7,844 Off-balance-sheet commitments (including commitments to make loans, unused lines of credit and letters of credit) to related parties at December 31, 2017 2016 $2.8 $2.4 The following table provides the components of the Company’s recorded investment in loans at December 31, 2017 2016: Residential Land Construction Commercial Real Estate Commercial Business Home Other Consumer Total (In thousands) December 31, 2017: Principal loan balance $ 136,399 $ 18,198 $ 20,995 $ 100,133 $ 34,114 $ 49,802 $ 52,570 $ 412,211 Accrued interest receivable 474 94 49 249 87 189 223 1,365 Net deferred loan origination fees and costs 87 17 (10 ) (42 ) 2 987 - 1,041 Recorded investment in loans $ 136,960 $ 18,309 $ 21,034 $ 100,340 $ 34,203 $ 50,978 $ 52,793 $ 414,617 December 31, 2016: 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 - (42 ) 3 782 - 837 Recorded investment in loans $ 138,377 $ 13,951 $ 19,489 $ 96,669 $ 24,126 $ 43,831 $ 49,321 $ 385,764 An analysis of the allowance for loan losses and recorded investment in loans as of and for the year ended December 31, 2017 Residential Real Estate Land Construction Commercial Commercial Home Other Total (In thousands) Allowance for Loan Losses: Beginning balance $ 380 $ 56 $ 80 $ 1,670 $ 198 $ 683 $ 319 $ 3,386 Provisions (120 ) 77 165 (124 ) 226 28 663 915 Charge-offs (74 ) - - (3 ) (140 ) (6 ) (713 ) (936 ) Recoveries 33 - - 79 7 5 145 269 Ending balance $ 219 $ 133 $ 245 $ 1,622 $ 291 $ 710 $ 414 $ 3,634 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 35 $ - $ - $ - $ 4 $ 13 $ - $ 52 Collectively evaluated for impairment 182 133 245 1,622 287 697 414 3,580 Acquired with deteriorated credit quality 2 - - - - - - 2 Ending balance $ 219 $ 133 $ 245 $ 1,622 $ 291 $ 710 $ 414 $ 3,634 Recorded Investment in Loans: Individually evaluated for impairment $ 2,907 $ - $ - $ 401 $ 42 $ 73 $ - $ 3,423 Collectively evaluated for impairment 133,703 18,309 21,034 99,891 34,161 50,905 52,793 410,796 Acquired with deteriorated credit quality 350 - - 48 - - - 398 Ending balance $ 136,960 $ 18,309 $ 21,034 $ 100,340 $ 34,203 $ 50,978 $ 52,793 $ 414,617 An analysis of the allowance for loan losses and recorded investment in loans as of and for the year ended December 31, 2016 Residential Real Estate Land Construction Commercial Real Estate Commercial Business Home Other Consumer Total (In thousands) Allowance for Loan Losses: Beginning balance $ 527 $ 157 $ 47 $ 1,541 $ 261 $ 626 $ 256 $ 3,415 Provisions (87 ) (92 ) 33 157 187 79 368 645 Charge-offs (118 ) (9 ) - (82 ) (264 ) (36 ) (409 ) (918 ) Recoveries 58 - - 54 14 14 104 244 Ending balance $ 380 $ 56 $ 80 $ 1,670 $ 198 $ 683 $ 319 $ 3,386 Ending allowance balance attributable to loans: Individually evaluated for impairment $ 23 $ - $ - $ - $ 43 $ 13 $ 6 $ 85 Collectively evaluated for impairment 357 56 80 1,670 155 670 313 3,301 Acquired with deteriorated credit quality - - - - - - - - Ending balance $ 380 $ 56 $ 80 $ 1,670 $ 198 $ 683 $ 319 $ 3,386 Recorded Investment in Loans: Individually evaluated for impairment $ 2,083 $ - $ - $ 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 - - 240 - - - 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 for the year ended December 31, 2015 Residential Real Estate Land Construction Commercial Real Estate Commercial Business Home Other Consumer Total (In thousands) Allowance for Loan Losses: Beginning balance $ 609 $ 201 $ 60 $ 1,501 $ 1,480 $ 720 $ 275 $ 4,846 Provisions 35 (44 ) (13 ) 6 (23 ) (49 ) 138 50 Charge-offs (128 ) - - - (1,205 ) (78 ) (268 ) (1,679 ) Recoveries 11 - - 34 9 33 111 198 Ending balance $ 527 $ 157 $ 47 $ 1,541 $ 261 $ 626 $ 256 $ 3,415 At December 31, 2017 2016, not 0.33% 20% $2.1 $1.8 December 31, 2017 2016. At December 31, 2017 2016, 1.18 • Underwriting Standards – Management reviews the findings of periodic internal audit loan reviews, independent outsourced loan reviews and loan reviews performed by the banking regulators to evaluate the risk associated with changes in underwriting standards. At December 31, 2017 2016, no • Economic Conditions – Management analyzes trends in housing and unemployment data in the Louisville, Kentucky metropolitan area, the Company’s primary market area, to evaluate the risk associated with economic conditions. Due to a decrease in new home construction and an increase in unemployment in the Company’s primary market area, management assigned a risk factor of 1.20 December 31, 2017 2016. • Past Due Loans – Management analyzes trends in past due loans for the Company to evaluate the risk associated with delinquent loans. In general, past due loan ratios have remained at elevated levels compared to historical amounts since 2007, 1.20 December 31, 2017 2016. • Other Internal and External Factors – This component includes management’s consideration of other qualitative factors such as loan portfolio composition. The Company has focused on the origination of commercial business and real estate loans in an effort to convert the Company’s balance sheet from that of a traditional thrift institution to a commercial bank. In addition, the Company has increased its investment in mortgage loans in which it does not first second first 1.30 December 31, 2017 2016. Each of the four 1.18 December 31, 2017 2016. $536,000 $501,000 December 31, 2017 2016, Management also adjusts the historical loss factors for loans classified as watch, special mention and substandard that are not $506,000 $559,000 December 31, 2017 2016, The following table summarizes the Company’s impaired loans as of and for the year ended December 31, 2017. not December 31, 2017. Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized (In thousands) Loans with no related allowance recorded: Residential real estate $ 2,695 $ 2,948 $ - $ 2,437 $ 28 Land - - - - 2 Construction - - - - - Commercial real estate 401 535 - 686 16 Commercial business 12 12 - 57 1 Home equity and second mortgage 60 68 - 194 1 Other consumer - - - 4 - $ 3,168 $ 3,563 $ - $ 3,378 $ 48 Loans with an allowance recorded: Residential real estate $ 212 $ 218 $ 35 $ 140 $ - Land - - - - - Construction - - - - - Commercial real estate - - - - - Commercial business 30 30 4 40 - Home equity and second mortgage 13 13 13 20 - Other consumer - - - 14 - $ 255 $ 261 $ 52 $ 214 $ - Total: Residential real estate $ 2,907 $ 3,166 $ 35 $ 2,577 $ 28 Land - - - - 2 Construction - - - - - Commercial real estate 401 535 - 686 16 Commercial business 42 42 4 97 1 Home equity and second mortgage 73 81 13 214 1 Other consumer - - - 18 - $ 3,423 $ 3,824 $ 52 $ 3,592 $ 48 The following table summarizes the Company’s impaired loans as of and for the year ended December 31, 2016. not December 31, 2016. Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized (In thousands) Loans with no related allowance recorded: Residential real estate $ 1,871 $ 2,223 $ - $ 1,904 $ 26 Land - - - 5 - Construction - - - - 3 Commercial real estate 1,217 1,540 - 2,959 60 Commercial business 75 81 - 66 - Home equity and second mortgage 231 237 - 88 2 Other consumer - - - 4 1 $ 3,394 $ 4,081 $ - $ 5,026 $ 92 Loans with an allowance recorded: Residential real estate $ 212 $ 217 $ 23 $ 148 $ - Land - - - - - Construction - - - - - Commercial real estate - - - 99 - Commercial business 68 68 43 54 - Home equity and second mortgage 13 14 13 27 - Other consumer 20 20 6 22 - $ 313 $ 319 $ 85 $ 350 $ - Total: Residential real estate $ 2,083 $ 2,440 $ 23 $ 2,052 $ 26 Land - - - 5 - Construction - - - - 3 Commercial real estate 1,217 1,540 - 3,058 60 Commercial business 143 149 43 120 - Home equity and second mortgage 244 251 13 115 2 Other consumer 20 20 6 26 1 $ 3,707 $ 4,400 $ 85 $ 5,376 $ 92 The following table summarizes the Company’s impaired loans for the year ended December 31, 2015. not December 31, 2015. Average Interest Recorded Income Investment Recognized (In thousands) Loans with no related allowance recorded: Residential real estate $ 1,356 $ 19 Land 20 - Construction - - Commercial real estate 2,092 76 Commercial business 19 - Home equity and second mortgage 64 2 Other consumer - - $ 3,551 $ 97 Loans with an allowance recorded: Residential real estate $ 190 $ - Land - - Construction - - Commercial real estate 78 - Commercial business 355 - Home equity and second mortgage 80 - Other consumer - - $ 703 $ - Total: Residential real estate $ 1,546 $ 19 Land 20 - Construction - - Commercial real estate 2,170 76 Commercial business 374 - Home equity and second mortgage 144 2 Other consumer - - $ 4,254 $ 97 Nonperforming loans consists of nonaccrual loans and loans over 90 December 31, 2017 2016: December 31, 2017 December 31, 2016 Nonaccrual Loans 90+ Days Total Nonperforming Loans Nonaccrual Loans 90+ Days Total Nonperforming Loans (In thousands) Residential real estate $ 2,298 $ 109 $ 2,407 $ 1,634 $ 55 $ 1,689 Land - 95 95 - - - Construction - - - - - - Commercial real estate 139 - 139 924 - 924 Commercial business 42 59 101 142 - 142 Home equity and second mortgage 57 - 57 226 - 226 Other consumer - 28 28 20 23 43 Total $ 2,536 $ 291 $ 2,827 $ 2,946 $ 78 $ 3,024 The following table presents the aging of the recorded investment in loans at December 31, 2017: 30-59 Days 60-89 Days Over Total Current Purchased Credit Impaired Loans Total (In thousands) Residential real estate $ 2,612 $ 338 $ 1,255 $ 4,205 $ 132,405 $ 350 $ 136,960 Land 186 - 95 281 18,028 - 18,309 Construction - - - - 21,034 - 21,034 Commercial real estate 379 - 139 518 99,774 48 100,340 Commercial business 46 49 102 197 34,006 - 34,203 Home equity and second mortgage 468 27 13 508 50,470 - 50,978 Other consumer 420 37 28 485 52,308 - 52,793 Total $ 4,111 $ 451 $ 1,632 $ 6,194 $ 408,025 $ 398 $ 414,617 The following table presents the aging of the recorded investment in loans at December 31, 2016: 30-59 Days 60-89 Days Over Total Current Purchased Credit Impaired Loans Total (In thousands) Residential real estate $ 2,444 $ 707 $ 1,021 $ 4,172 $ 133,815 $ 390 $ 138,377 Land - 52 - 52 13,899 - 13,951 Construction - - - - 19,489 - 19,489 Commercial real estate - - 27 27 96,402 240 96,669 Commercial business 155 - 83 238 23,888 - 24,126 Home equity and second mortgage 352 - 13 365 43,466 - 43,831 Other consumer 319 66 43 428 48,893 - 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 Land Construction Commercial Real Estate Commercial Business Home Other Consumer Total (In thousands) December 31, 2017: Pass $ 133,618 $ 18,003 $ 20,173 $ 97,219 $ 33,245 $ 50,919 $ 52,629 $ 405,806 Special mention 348 157 861 1,362 734 - 161 3,623 Substandard 684 149 - 1,620 182 2 3 2,640 Doubtful 2,310 - - 139 42 57 - 2,548 Loss - - - - - - - - Total $ 136,960 $ 18,309 $ 21,034 $ 100,340 $ 34,203 $ 50,978 $ 52,793 $ 414,617 December 31, 2016 Pass $ 135,328 $ 13,795 $ 19,489 $ 87,782 $ 23,246 $ 43,601 $ 49,256 $ 372,497 Special mention 403 86 - 1,892 661 - 45 3,087 Substandard 721 70 - 5,991 77 4 - 6,863 Doubtful 1,925 - - 1,004 142 226 20 3,317 Loss - - - - - - - - Total $ 138,377 $ 13,951 $ 19,489 $ 96,669 $ 24,126 $ 43,831 $ 49,321 $ 385,764 Troubled Debt Restructurings The following table summarizes the Company’s TDRs by accrual status as of December 31, 2017 2016: December 31, 2017 December 31, 2016 Accruing Nonaccrual Total Related Accruing Nonaccrual Total Related (In thousands) Residential real estate $ 487 $ 106 $ 593 $ - $ 433 $ 229 $ 662 $ - Commercial real estate 356 - 356 - 291 168 459 - Home equity and second mortgage 15 - 15 - 18 - 18 - Total $ 858 $ 106 $ 964 $ - $ 742 $ 397 $ 1,139 $ - At December 31, 2017 2016, no The Company restructured one December 31, 2017, $65,000 no December 31, 2016 2015. 2017, no December 31, 2017, 2016 2015. The Company had payment defaults (defined as the loan becoming more than 90 12 two $187,000 December 31, 2015. no December 31, 2017 2016. may may not December 31, 2017, 2016 2015. Purchased Credit Impaired (“PCI”) Loans Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date with no 310 30 not The following table presents the carrying amount of PCI loans accounted for under FASB ASC 310 30 December 31, 2017 2016: (In thousands) 2017 2016 Residential real estate $ 350 $ 390 Commercial real estate 48 240 Carrying amount 398 630 Allowance for loan losses 2 - $ 396 $ 630 The outstanding balance of PCI loans accounted for under FASB ASC 310 30, $625,000 $754,000 December 31, 2017 2016, The allowance for loan losses related to PCI loans was $2,000 December 31, 2017. no December 31, 2016. $2,000 December 31, 2017. no December 31, 2016 2015. Accretable yield, or income expected to be collected, is as follows for the years ended December 31, 2017, 2016 2015: (In thousands) 2017 2016 2015 Beginning balance $ 252 $ 319 $ - New loans acquired - - 331 Accretion to income (55 ) (75 ) (12 ) Disposals of loans (21 ) (93 ) - Reclassification (to) from nonaccretable difference 294 101 - Ending balance $ 470 $ 252 $ 319 |