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 grants 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 June 30, 2018, five $97,000 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 June 30, 2018 December 31, 2017. 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, 2017. 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 June 30, 2018 December 31, 2017, $906,000 $588,000, Loans at June 30, 2018 December 31, 2017 (In thousands) June 30, December 31, Real estate mortgage loans: Residential $ 135,602 $ 136,399 Land 21,334 18,198 Residential construction 30,495 28,854 Commercial real estate 104,767 100,133 Commercial real estate contruction 12,387 17,161 Commercial business loans 33,743 34,114 Consumer loans: Home equity and second mortgage loans 51,283 49,802 Automobile loans 40,435 38,361 Loans secured by savings accounts 1,404 1,751 Unsecured loans 3,708 3,744 Other consumer loans 8,018 8,714 Gross loans 443,176 437,231 Less undisbursed portion of loans in process (21,013 ) (25,020 ) Principal loan balance 422,163 412,211 Deferred loan origination fees, net 1,064 1,041 Allowance for loan losses (3,867 ) (3,634 ) Loans, net $ 419,360 $ 409,618 The following table provides the components of the Company’s recorded investment in loans at June 30, 2018: Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Recorded Investment in Loans: Principal loan balance $ 135,602 $ 21,334 $ 21,869 $ 104,767 $ 33,743 $ 51,283 $ 53,565 $ 422,163 Accrued interest receivable 482 94 56 250 117 206 217 1,422 Net deferred loan origination fees and costs 92 15 (8 ) (41 ) 1 1,005 - 1,064 Recorded investment in loans $ 136,176 $ 21,443 $ 21,917 $ 104,976 $ 33,861 $ 52,494 $ 53,782 $ 424,649 Recorded Investment in Loans as Evaluated for Impairment: Individually evaluated for impairment $ 2,383 $ 333 $ - $ 259 $ 245 $ 76 $ 8 $ 3,304 Collectively evaluated for impairment 133,441 21,110 21,917 104,667 33,616 52,418 53,774 420,943 Acquired with deteriorated credit quality 352 - - 50 - - - 402 Ending balance $ 136,176 $ 21,443 $ 21,917 $ 104,976 $ 33,861 $ 52,494 $ 53,782 $ 424,649 The following table provides the components of the Company’s recorded investment in loans at December 31, 2017: Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Recorded Investment in Loans: 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 Recorded Investment in Loans as Evaluated for Impairment: 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 as of June 30, 2018 Residential Commercial Commercial Home Equity & Other (In thousands) Ending allowance balance attributable to loans: Individually evaluated for impairment $ 160 $ - $ - $ - $ 2 $ - $ - $ 162 Collectively evaluated for impairment 528 148 216 1,306 415 607 485 3,705 Acquired with deteriorated credit quality - - - - - - - - Ending balance $ 688 $ 148 $ 216 $ 1,306 $ 417 $ 607 $ 485 $ 3,867 An analysis of the allowance for loan losses as of December 31, 2017 Residential Commercial Commercial Home Equity & Other (In thousands) 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 An analysis of the changes in the allowance for loan losses for the three six June 30, 2018 Residential Commercial Commercial Home Equity & Other (In thousands) Allowance for loan losses: Changes in Allowance for Loan Losses for the three-months ended June 30, 2018 Beginning balance $ 301 $ 156 $ 291 $ 1,520 $ 276 $ 680 $ 407 $ 3,631 Provisions for loan losses 398 (8 ) (75 ) (237 ) 141 (75 ) 172 316 Charge-offs (15 ) 0 0 0 0 (13 ) (138 ) (166 ) Recoveries 4 0 0 23 0 15 44 86 Ending balance $ 688 $ 148 $ 216 $ 1,306 $ 417 $ 607 $ 485 $ 3,867 Changes in Allowance for Loan Losses for the six-months ended June 30, 2018 Beginning balance $ 219 $ 133 $ 245 $ 1,622 $ 291 $ 710 $ 414 $ 3,634 Provisions for loan losses 538 15 (29 ) (348 ) 126 (109 ) 320 513 Charge-offs (75 ) 0 0 0 (1 ) (12 ) (334 ) (422 ) Recoveries 6 0 0 32 1 18 85 142 Ending balance $ 688 $ 148 $ 216 $ 1,306 $ 417 $ 607 $ 485 $ 3,867 An analysis of the changes in the allowance for loan losses for the three six June 30, 2017 Residential Commercial Commercial Home Equity & Other (In thousands) Allowance for loan losses: Changes in Allowance for Loan Losses for the three-months ended June 30, 2017 Beginning balance $ 271 $ 109 $ 223 $ 1,585 $ 244 $ 698 $ 288 $ 3,418 Provisions for loan losses (61 ) 15 83 (4 ) 46 (13 ) 190 256 Charge-offs (6 ) 0 0 (2 ) 0 (6 ) (186 ) (200 ) Recoveries 8 0 0 4 0 1 39 52 Ending balance $ 212 $ 124 $ 306 $ 1,583 $ 290 $ 680 $ 331 $ 3,526 Changes in Allowance for Loan Losses for the six-months ended June 30, 2017 Beginning balance $ 380 $ 56 $ 80 $ 1,670 $ 198 $ 683 $ 319 $ 3,386 Provisions for loan losses (146 ) 68 226 (132 ) 131 1 319 467 Charge-offs (46 ) 0 0 (3 ) (43 ) (6 ) (390 ) (488 ) Recoveries 24 0 0 48 4 2 83 161 Ending balance $ 212 $ 124 $ 306 $ 1,583 $ 290 $ 680 $ 331 $ 3,526 At June 30, 2018 December 31, 2017, not not $2.7 $2.6 June 30, 2018 December 31, 2017, June 30, 2018 December 31, 2017. Management also adjusts the historical loss factors for loans classified as watch, special mention and substandard that are not not $489,000 $506,000 June 30, 2018 December 31, 2017, not December 31, 2017 June 30, 2018. Additional discussion of the Bank’s allowance for loan loss methodology can be found in the Company’s Annual Report on Form 10 December 31, 2017. The following table summarizes the Company’s impaired loans as of June 30, 2018 three six June 30, 2018. not three six June 30, 2018: At June 30, 2018 Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Unpaid Average Interest Average Interest (In thousands) Loans with no related allowance recorded: Residential $ 2,128 $ 2,357 $ 0 $ 2,327 $ 5 $ 2,449 $ 13 Land 333 339 0 214 0 142 0 Construction 0 0 0 0 0 0 0 Commercial real estate 259 257 0 312 5 342 10 Commercial business 217 219 0 254 4 173 7 Home equity/2nd mortgage 76 85 0 77 0 71 1 Other consumer 8 0 0 8 1 5 1 3,021 3,257 0 3,192 15 3,182 32 Loans with an allowance recorded: Residential 255 274 160 267 0 248 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 28 30 2 28 0 29 0 Home equity/2nd mortgage 0 0 0 7 0 9 0 Other consumer 0 0 0 0 0 0 0 283 304 162 302 0 286 0 Total: Residential 2,383 2,631 160 2,594 5 2,697 13 Land 333 339 0 214 0 142 0 Construction 0 0 0 0 0 0 0 Commercial real estate 259 257 0 312 5 342 10 Commercial business 245 249 2 282 4 202 7 Home equity/2nd mortgage 76 85 0 84 0 80 1 Other consumer 8 0 0 8 1 5 1 $ 3,304 $ 3,561 $ 162 $ 3,494 $ 15 $ 3,468 $ 32 The following table summarizes the Company’s impaired loans for the three six June 30, 2017. not three six June 30, 2017: Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Average Interest Average Interest Loans with no related allowance recorded: Residential $ 2,387 $ 6 $ 2,215 $ 14 Land 0 0 0 0 Construction 0 0 0 0 Commercial real estate 759 6 911 8 Commercial business 72 0 73 0 Home equity/2nd mortgage 228 0 229 1 Other consumer 11 0 7 0 3,457 12 3,435 23 Loans with an allowance recorded: Residential 87 0 128 0 Land 0 0 0 0 Construction 0 0 0 0 Commercial real estate 0 0 0 0 Commercial business 50 0 56 0 Home equity/2nd mortgage 23 0 19 0 Other consumer 25 0 23 0 185 0 226 0 Total: Residential 2,474 6 2,343 14 Land 0 0 0 0 Construction 0 0 0 0 Commercial real estate 759 6 911 8 Commercial business 122 0 129 0 Home equity/2nd mortgage 251 0 248 1 Other consumer 36 0 30 0 $ 3,642 $ 12 $ 3,661 $ 23 The following table summarizes the Company’s impaired loans as of December 31, 2017: Unpaid (In thousands) Loans with no related allowance recorded: Residential $ 2,695 $ 2,948 $ - Land - - - Construction - - - Commercial real estate 401 535 - Commercial business 12 12 - Home equity/2nd mortgage 60 68 - Other consumer - - - 3,168 3,563 - Loans with an allowance recorded: Residential 212 218 35 Land - - - Construction - - - Commercial real estate - - - Commercial business 30 30 4 Home equity/2nd mortgage 13 13 13 Other consumer - - - 255 261 52 Total: Residential 2,907 3,166 35 Land - - - Construction - - - Commercial real estate 401 535 - Commercial business 42 42 4 Home equity/2nd mortgage 73 81 13 Other consumer - - - $ 3,423 $ 3,824 $ 52 Nonperforming loans consists of nonaccrual loans and loans over 90 June 30, 2018 December 31, 2017: June 30, 2018 December 31, 2017 Loans 90+ Days Total Loans 90+ Days Total (In thousands) Residential $ 1,845 $ - $ 1,845 $ 2,298 $ 109 $ 2,407 Land 333 - 333 - 95 95 Construction - - - - - - Commercial real estate - - - 139 - 139 Commercial business 76 67 143 42 59 101 Home equity/2nd mortgage 62 - 62 57 - 57 Other consumer - 30 30 - 28 28 Total $ 2,316 $ 97 $ 2,413 $ 2,536 $ 291 $ 2,827 The following table presents the aging of the recorded investment in loans at June 30, 2018: 90 Days or More Purchased (In thousands) Residential $ 2,468 $ 554 $ 1,099 $ 4,121 $ 131,703 $ 352 $ 136,176 Land 103 - 95 198 21,245 - 21,443 Construction - - - - 21,917 - 21,917 Commercial real estate 728 - - 728 104,198 50 104,976 Commercial business 201 - 67 268 33,593 - 33,861 Home equity/2nd mortgage 125 1 - 126 52,368 - 52,494 Other consumer 297 54 30 381 53,401 - 53,782 Total $ 3,922 $ 609 $ 1,291 $ 5,822 $ 418,425 $ 402 $ 424,649 The following table presents the aging of the recorded investment in loans at December 31, 2017: Purchased (In thousands) Residential $ 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/2nd 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 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 (In thousands) June 30, 2018 Pass $ 133,138 $ 21,061 $ 21,644 $ 101,232 $ 32,647 $ 52,431 $ 53,638 $ 415,791 Special Mention 379 - 273 1,944 899 - 142 3,637 Substandard 798 49 - 1,800 239 1 2 2,889 Doubtful 1,861 333 - - 76 62 - 2,332 Loss - - - - - - - - Total $ 136,176 $ 21,443 $ 21,917 $ 104,976 $ 33,861 $ 52,494 $ 53,782 $ 424,649 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 The following table summarizes the Company’s troubled debt restructurings (TDRs) by accrual status as of June 30, 2018 December 31, 2017: June 30, 2018 December 31, 2017 Related Allowance Related Allowance (In thousands) Troubled debt restructurings: Residential real estate $ 468 $ 106 $ 574 $ - $ 487 $ 106 $ 593 $ - Commercial real estate 352 - 352 - 356 - 356 - Commercial business 169 - 169 - - - - - Home equity and 2nd mortgage 14 - 14 - 15 - 15 - Total $ 1,003 $ 106 $ 1,109 $ - $ 858 $ 106 $ 964 $ - At June 30, 2018 December 31, 2017, no The following table summarizes information in regard to TDRs that were restructured during the six June 30, 2018: Six months ended June 30, 2018 Pre-Modifcation Post-Modifcation (Dollars in thousands) Troubled debt restructurings: Commercial business 1 $ 179 $ 179 Total 1 $ 179 $ 179 For the TDR listed above, the terms of modification included the deferral of contractual principal payments. There were no three June 30, 2018 three six June 30, 2017. There were no no three six June 30, 2018 2017. There were no 12 90 three six June 30, 2018 2017. 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 June 30, 2018 December 31, 2017: (In thousands) June 30, December 31 , Residential real estate $ 352 $ 350 Commercial real estate 50 48 Carrying amount 402 398 Allowance for loan losses 0 2 Carrying amount, net of allowance $ 402 $ 396 The outstanding balance of PCI loans accounted for under ASC 310 30, $610,000 $625,000 June 30, 2018 December 31, 2017, There was no June 30, 2018. $2,000 December 31, 2017. $2,000 six June 30, 2018. no three June 30, 2018 three six June 30, 2017. Accretable yield, or income expected to be collected, is as follows for the three six June 30, 2018 2017: Three Months Ended Six Months Ended 6/30/2018 6/30/2017 6/30/2018 6/30/2017 Balance at beginning of period $ 459 $ 244 $ 470 $ 252 New loans purchased - - - - Accretion to income (15 ) (14 ) (29 ) (28 ) Disposals and other adjustments - (17 ) - (17 ) Reclassification (to) from nonaccretable difference (1 ) 10 2 16 Balance at end of period $ 443 $ 223 $ 443 $ 223 |