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 September 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 September 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 September 30, 2018 December 31, 2017, $634,000 $588,000, Loans at September 30, 2018 December 31, 2017 (In thousands) September 30, December 31, Real estate mortgage loans: Residential $ 138,299 $ 136,399 Land 22,270 18,198 Residential construction 30,228 28,854 Commercial real estate 106,298 100,133 Commercial real estate contruction 16,022 17,161 Commercial business loans 33,773 34,114 Consumer loans: Home equity and second mortgage loans 52,139 49,802 Automobile loans 42,154 38,361 Loans secured by savings accounts 1,390 1,751 Unsecured loans 3,610 3,744 Other consumer loans 10,155 8,714 Gross loans 456,338 437,231 Less undisbursed portion of loans in process (24,812 ) (25,020 ) Principal loan balance 431,526 412,211 Deferred loan origination fees, net 1,076 1,041 Allowance for loan losses (4,179 ) (3,634 ) Loans, net $ 428,423 $ 409,618 The following table provides the components of the Company’s recorded investment in loans at September 30, 2018: Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Recorded Investment in Loans: Principal loan balance $ 138,299 $ 22,270 $ 21,438 $ 106,298 $ 33,773 $ 52,139 $ 57,309 $ 431,526 Accrued interest receivable 497 126 48 251 113 228 235 1,498 Net deferred loan origination fees and costs 94 14 (6 ) (41 ) 1 1,014 - 1,076 Recorded investment in loans $ 138,890 $ 22,410 $ 21,480 $ 106,508 $ 33,887 $ 53,381 $ 57,544 $ 434,100 Recorded Investment in Loans as Evaluated for Impairment: Individually evaluated for impairment $ 2,413 $ 96 $ - $ 347 $ 343 $ 35 $ 8 $ 3,242 Collectively evaluated for impairment 136,195 22,314 21,480 106,113 33,544 53,346 57,536 430,528 Acquired with deteriorated credit quality 282 - - 48 - - - 330 Ending balance $ 138,890 $ 22,410 $ 21,480 $ 106,508 $ 33,887 $ 53,381 $ 57,544 $ 434,100 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 September 30, 2018 Residential Land Construction Commercial Commercial Home Equity & Other Total (In thousands) Ending allowance balance attributable to loans: Individually evaluated for impairment $ 160 $ - $ - $ - $ 53 $ - $ - $ 213 Collectively evaluated for impairment 595 161 217 1,317 417 691 568 3,966 Acquired with deteriorated credit quality - - - - - - - - Ending balance $ 755 $ 161 $ 217 $ 1,317 $ 470 $ 691 $ 568 $ 4,179 An analysis of the allowance for loan losses as of December 31, 2017 Residential Land Construction Commercial Commercial Home Equity & Other Total (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 nine September 30, 2018 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, 2018 Beginning balance $ 688 $ 148 $ 216 $ 1,306 $ 417 $ 607 $ 485 $ 3,867 Provisions for loan losses 71 13 1 8 55 89 218 455 Charge-offs (5 ) 0 0 0 (2 ) (8 ) (180 ) (195 ) Recoveries 1 0 0 3 0 3 45 52 Ending balance $ 755 $ 161 $ 217 $ 1,317 $ 470 $ 691 $ 568 $ 4,179 Changes in Allowance for Loan Losses for the nine-months ended September 30, 2018 Beginning balance $ 219 $ 133 $ 245 $ 1,622 $ 291 $ 710 $ 414 $ 3,634 Provisions for loan losses 608 28 (28 ) (340 ) 181 (19 ) 538 968 Charge-offs (79 ) 0 0 0 (3 ) (21 ) (514 ) (617 ) Recoveries 7 0 0 35 1 21 130 194 Ending balance $ 755 $ 161 $ 217 $ 1,317 $ 470 $ 691 $ 568 $ 4,179 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 At September 30, 2018 December 31, 2017, not not $2.4 $2.6 September 30, 2018 December 31, 2017, September 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 $479,000 $506,000 September 30, 2018 December 31, 2017, not December 31, 2017 September 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 September 30, 2018 three nine September 30, 2018. not three nine September 30, 2018: At September 30, 2018 Three Months Ended Nine Months Ended Recorded Unpaid Related Average Interest Average Interest (In thousands) Loans with no related allowance recorded: Residential $ 2,159 $ 2,365 $ 0 $ 2,144 $ 7 $ 2,377 $ 19 Land 96 97 0 215 0 131 0 Construction 0 0 0 0 0 0 0 Commercial real estate 347 349 0 303 4 343 14 Commercial business 264 266 0 241 3 196 11 Home equity/2nd mortgage 35 43 0 56 0 62 1 Other consumer 8 8 0 8 0 6 1 2,909 3,128 0 2,967 14 3,115 46 Loans with an allowance recorded: Residential 254 274 160 255 0 250 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 79 82 53 54 0 41 0 Home equity/2nd mortgage 0 0 0 0 0 7 0 Other consumer 0 0 0 0 0 0 0 333 356 213 309 0 298 0 Total: Residential 2,413 2,639 160 2,399 7 2,627 19 Land 96 97 0 215 0 131 0 Construction 0 0 0 0 0 0 0 Commercial real estate 347 349 0 303 4 343 14 Commercial business 343 348 53 295 3 237 11 Home equity/2nd mortgage 35 43 0 56 0 69 1 Other consumer 8 8 0 8 0 6 1 $ 3,242 $ 3,484 $ 213 $ 3,276 $ 14 $ 3,413 $ 46 The following table summarizes the Company’s impaired loans for the three nine September 30, 2017. not three nine September 30, 2017: Three Months Ended Nine Months Ended Average Interest Average Interest Loans with no related allowance recorded: Residential $ 2,736 $ 7 $ 2,373 $ 20 Land 0 0 0 0 Construction 0 0 0 0 Commercial real estate 366 5 758 13 Commercial business 63 0 69 0 Home equity/2nd mortgage 226 0 228 1 Other consumer 6 0 6 0 3,397 12 3,434 34 Loans with an allowance recorded: Residential 95 0 122 0 Land 0 0 0 0 Construction 0 0 0 0 Commercial real estate 0 0 0 0 Commercial business 25 0 42 0 Home equity/2nd mortgage 32 0 22 0 Other consumer 17 0 17 0 169 0 203 0 Total: Residential 2,831 7 2,495 20 Land 0 0 0 0 Construction 0 0 0 0 Commercial real estate 366 5 758 13 Commercial business 88 0 111 0 Home equity/2nd mortgage 258 0 250 1 Other consumer 23 0 23 0 $ 3,566 $ 12 $ 3,637 $ 34 The following table summarizes the Company’s impaired loans as of December 31, 2017: Recorded Unpaid Related (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 September 30, 2018 December 31, 2017: September 30, 2018 December 31, 2017 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 $ 1,995 $ 217 $ 2,212 $ 2,298 $ 109 $ 2,407 Land 96 - 96 - 95 95 Construction - - - - - - Commercial real estate 165 - 165 139 - 139 Commercial business 121 - 121 42 59 101 Home equity/2nd mortgage 35 - 35 57 - 57 Other consumer - 8 8 - 28 28 Total $ 2,412 $ 225 $ 2,637 $ 2,536 $ 291 $ 2,827 The following table presents the aging of the recorded investment in loans at September 30, 2018: 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 $ 1,879 $ 902 $ 1,390 $ 4,171 $ 134,437 $ 282 $ 138,890 Land 241 39 96 376 22,034 - 22,410 Construction - - - - 21,480 - 21,480 Commercial real estate 621 - - 621 105,839 48 106,508 Commercial business 622 - - 622 33,265 - 33,887 Home equity/2nd mortgage 208 - 35 243 53,138 - 53,381 Other consumer 183 59 8 250 57,294 - 57,544 Total $ 3,754 $ 1,000 $ 1,529 $ 6,283 $ 427,487 $ 330 $ 434,100 The following table presents the aging of the recorded investment in loans at December 31, 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 $ 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 Real Estate Land Construction Real Estate Business 2nd Mtg Consumer Total (In thousands) September 30, 2018 Pass $ 135,821 $ 22,199 $ 20,963 $ 103,714 $ 32,754 $ 53,295 $ 57,544 $ 426,290 Special Mention 136 66 517 1,665 722 - - 3,106 Substandard 869 49 - 964 290 51 - 2,223 Doubtful 2,064 96 - 165 121 35 - 2,481 Loss - - - - - - - - Total $ 138,890 $ 22,410 $ 21,480 $ 106,508 $ 33,887 $ 53,381 $ 57,544 $ 434,100 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 September 30, 2018 December 31, 2017: September 30, 2018 December 31, 2017 Related Allowance Related Allowance Accruing Nonaccrual Total for Loan Losses Accruing Nonaccrual Total for Loan Losses (In thousands) Troubled debt restructurings: Residential real estate $ 350 $ 306 $ 656 $ 52 $ 487 $ 106 $ 593 $ - Commercial real estate 278 165 443 - 356 - 356 - Commercial business 220 - 220 - - - - - Home equity and 2nd mortgage - - - - 15 - 15 - Total $ 848 $ 471 $ 1,319 $ 52 $ 858 $ 106 $ 964 $ - At September 30, 2018 December 31, 2017, no The following table summarizes information in regard to TDRs that were restructured during the three nine September 30, 2018: Three months ended September 30, 2018 Nine months ended September 30, 2018 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: Commercial business 1 $ 55 $ 55 2 $ 234 $ 234 Commercial real estate 1 94 94 1 94 94 Residential real estate 1 241 241 1 241 241 Total 3 $ 390 $ 390 4 $ 569 $ 569 For the TDRs listed above, the terms of modification included the deferral of contractual principal payments. 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 no three nine September 30, 2018 2017. There were no 12 90 three nine September 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 September 30, 2018 December 31, 2017: September 30, December 31, (In thousands) 2018 2017 Residential real estate $ 282 $ 350 Commercial real estate 48 48 Carrying amount 330 398 Allowance for loan losses 0 2 Carrying amount, net of allowance $ 330 $ 396 The outstanding balance of PCI loans accounted for under ASC 310 30, $530,000 $625,000 September 30, 2018 December 31, 2017, There was no September 30, 2018. $2,000 December 31, 2017. $2,000 nine September 30, 2018. no three September 30, 2018. $4,000 three nine September 30, 2017. Accretable yield, or income expected to be collected, is as follows for the three nine September 30, 2018 2017: Three Months Ended Nine Months Ended 9/30/2018 9/30/2017 9/30/2018 9/30/2017 Balance at beginning of period $ 443 $ 223 $ 470 $ 252 New loans purchased - - - - Accretion to income (13 ) (12 ) (42 ) (40 ) Disposals and other adjustments - (1 ) - (18 ) Reclassification (to) from nonaccretable difference 2 271 4 287 Balance at end of period $ 432 $ 481 $ 432 $ 481 |