Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note L - Loans and allowance for loan losses Construction & Commercial Home equity Residential Commercial Consumer development real estate lines real estate & industrial & other Unallocated Total (in thousands) Allowance for loan losses: 2016 Beginning of year balance $ 1,005 $ 2,546 $ 441 $ 507 $ 1,309 $ 20 $ 44 $ 5,872 Provision for loan losses (367) 549 80 (26) (277) 9 32 - Charge-offs - (588) (37) (39) - (2) - (666) Recoveries 87 150 3 45 124 3 - 412 Balance at June 30 $ 725 $ 2,657 $ 487 $ 487 $ 1,156 $ 30 $ 76 $ 5,618 2015 Beginning of year balance $ 1,495 $ 2,144 $ 766 $ 483 $ 1,413 $ 28 $ 191 $ 6,520 Provision for loan losses (490) 1,691 (332) 48 327 (12) (147) 1,085 Charge-offs - (2,990) (104) (130) (914) (7) - (4,145) Recoveries - 1,701 111 106 483 11 - 2,412 Balance at December 31 $ 1,005 $ 2,546 $ 441 $ 507 $ 1,309 $ 20 $ 44 $ 5,872 Balances at June 30, 2016 Allowance for loan losses: Balance at June 30 $ 725 $ 2,657 $ 487 $ 487 $ 1,156 $ 30 $ 76 $ 5,618 Ending balance individually evaluated for impairment $ 10 $ 796 $ 86 $ 238 $ 9 $ - $ - $ 1,139 Ending balance collectively evaluated for impairment $ 715 $ 1,861 $ 401 $ 249 $ 1,147 $ 30 $ 76 $ 4,479 Loans Outstanding: Balance at June 30 $ 66,343 $ 216,859 $ 80,332 $ 54,398 $ 55,252 $ 3,599 $ - $ 476,783 Ending balance individually evaluated for impairment $ 415 $ 10,468 $ 436 $ 4,426 $ 332 $ - $ - $ 16,077 Ending balance collectively evaluated for impairment $ 65,928 $ 206,391 $ 79,896 $ 49,972 $ 54,920 $ 3,599 $ - $ 460,706 Balances at December 31, 2015 Allowance for loan losses: Balance at December 31 $ 1,005 $ 2,546 $ 441 $ 507 $ 1,309 $ 20 $ 44 $ 5,872 Ending balance individually evaluated for impairment $ 12 $ 480 $ 51 $ 272 $ 18 $ - $ - $ 833 Ending balance collectively evaluated for impairment $ 993 $ 2,066 $ 390 $ 235 $ 1,291 $ 20 $ 44 $ 5,039 Loans Outstanding: Balance at December 31 $ 62,289 $ 213,987 $ 78,952 $ 52,363 $ 55,641 $ 2,572 $ - $ 465,804 Ending balance individually evaluated for impairment $ 175 $ 9,044 $ 390 $ 4,423 $ 362 $ - $ - $ 14,394 Ending balance collectively evaluated for impairment $ 62,114 $ 204,943 $ 78,562 $ 47,940 $ 55,279 $ 2,572 $ - $ 451,410 A loan is past due when the borrower has not made a payment by the contractual due date. The following table presents the carrying value of loans that are past due thirty days or more. Loans which are ninety days or more past due are generally on non-accrual status, at which time all accrued interest is removed from interest income. Loans Past Number of Days Past Due Due 90 Days 90 Days Total Total or More 30-59 Days 60-89 Days or More Past Due Current Loans & Accruing (in thousands) At June 30, 2016 Real Estate Loans: Construction & development $ - $ - $ 415 $ 415 $ 65,928 $ 66,343 $ - Commercial real estate - - 3,366 3,366 213,493 216,859 - Home equity lines 94 204 311 609 79,723 80,332 - Residential real estate 74 92 1,009 1,175 53,223 54,398 - Total real estate 168 296 5,101 5,565 412,367 417,932 - Commercial & industrial - - - - 55,252 55,252 - Consumer & other 18 - - 18 3,581 3,599 - Total loans $ 186 $ 296 $ 5,101 $ 5,583 $ 471,200 $ 476,783 $ - At December 31, 2015 Real Estate Loans: Construction & development $ 22 $ - $ 175 $ 197 $ 62,092 $ 62,289 $ - Commercial real estate - - 1,735 1,735 212,252 213,987 - Home equity lines 125 - 265 390 78,562 78,952 - Residential real estate 528 180 935 1,643 50,720 52,363 - Total real estate 675 180 3,110 3,965 403,626 407,591 - Commercial & industrial - - - - 55,641 55,641 - Consumer & other - - - - 2,572 2,572 - Total loans $ 675 $ 180 $ 3,110 $ 3,965 $ 461,839 $ 465,804 $ - Loans are determined to be impaired when, based on current information and events, it is probable that all amounts will not be collected when due according to the contractual terms of the original loan agreement. At June 30, 2016 and December 31, 2015, the total recorded investment in impaired loans amounted to approximately $ 16,077,000 14,394,000 5,101,000 3,110,000 Impaired Loans At end of period For Period Ended Unpaid Related Average Interest Recorded Principal Loan Loss Recorded Income Investment Balance Allowance Investment Recognized (in thousands) June 30, 2016 With no related allowance recorded Real Estate Loans: Construction & development $ - $ - $ - $ - $ - Commercial real estate 3,207 3,999 - 5,187 53 Home equity lines 187 360 - 361 8 Residential real estate 2,588 2,828 - 2,862 62 Total real estate 5,982 7,187 - 8,410 123 Commercial & industrial - - - - - Consumer & other - - - - - Total loans 5,982 7,187 - 8,410 123 With an allowance recorded Real Estate Loans: Construction & development 415 418 10 235 3 Commercial real estate 7,261 7,784 796 7,845 186 Home equity lines 249 249 86 250 2 Residential real estate 1,838 1,944 238 1,963 45 Total real estate 9,763 10,395 1,130 10,293 236 Commercial & industrial 332 332 9 353 9 Consumer & other - - - - - Total loans 10,095 10,727 1,139 10,646 245 Total impaired loans $ 16,077 $ 17,914 $ 1,139 $ 19,056 $ 368 December 31, 2015 With no related allowance recorded Real Estate Loans: Construction & development $ - $ - $ - $ - $ - Commercial real estate 2,819 3,380 - 7,484 193 Home equity lines 193 360 - 362 16 Residential real estate 2,565 2,689 - 2,754 149 Total real estate 5,577 6,429 - 10,600 358 Commercial & industrial - - - - - Consumer & other - - - - - Total loans 5,577 6,429 - 10,600 358 With an allowance recorded Real Estate Loans: Construction & development 175 175 12 97 1 Commercial real estate 6,225 6,453 480 6,569 358 Home equity lines 197 265 51 265 11 Residential real estate 1,858 1,955 272 2,057 100 Total real estate 8,455 8,848 815 8,988 470 Commercial & industrial 362 362 18 383 20 Consumer & other - - - - - Total loans 8,817 9,210 833 9,371 490 Total impaired loans $ 14,394 $ 15,639 $ 833 $ 19,971 $ 848 Loans that are past due 90 days or more or where there is serious doubt as to collectability are placed on non-accrual status. Non-accrual loans are not returned to accrual status unless principal and interest are current and borrowers have demonstrated the ability to make contractual payments. Accrued interest is reversed through a charge to income when loans are placed on non-accrual status, and future payments on non-accrual loans are generally applied to principal. June 30, December 31, 2016 2015 (in thousands) Real Estate Loans: Construction & development $ 415 $ 175 Commercial real estate 3,366 1,735 Home equity lines 311 265 Residential real estate 1,009 935 Total real estate 5,101 3,110 Commercial & industrial - - Consumer & other - - Total loans $ 5,101 $ 3,110 Loans are graded according to an internal loan rating classification system when originated. Loan grades are periodically re-evaluated during servicing, internal loan reviews, and external loan reviews. The general categories of the internal loan rating classification are: ⋅ Pass - Acceptable loans ⋅ Special Mention - Loans with potential identified weaknesses in administration or servicing. ⋅ Classified - Adversely classified loans with identified weaknesses, and potential or identified losses of principal and/or interest due. At June 30, 2016 Pass Special Mention Classified Total (in thousands) Real Estate Loans: Construction & development $ 65,928 $ - $ 415 $ 66,343 Commercial real estate 204,047 9,284 3,528 216,859 Home equity lines 79,184 297 851 80,332 Residential real estate 50,892 1,237 2,269 54,398 Total real estate 400,051 10,818 7,063 417,932 Commercial & industrial 55,230 22 - 55,252 Consumer & other 3,599 - - 3,599 Total loans $ 458,880 $ 10,840 $ 7,063 $ 476,783 At December 31, 2015 Pass Special Mention Classified Total (in thousands) Real Estate Loans: Construction & development $ 62,110 $ - $ 179 $ 62,289 Commercial real estate 202,252 9,270 2,465 213,987 Home equity lines 78,014 128 810 78,952 Residential real estate 48,251 1,635 2,477 52,363 Total real estate 390,627 11,033 5,931 407,591 Commercial & industrial 54,691 950 - 55,641 Consumer & other 2,572 - - 2,572 Total loans $ 447,890 $ 11,983 $ 5,931 $ 465,804 During 2016 and 2015, the Company restructured certain loans to improve the likelihood that the loans would be repaid in full under the modified terms in accordance with reasonable repayment schedules. Management evaluates each of these loans in accordance with generally accepted accounting principles to determine whether they should be reported as troubled debt restructurings. The Company offers a variety of modifications to borrowers. The modification categories offered can generally be described in the following categories: ⋅ Rate Modification A modification in which the interest rate is changed. ⋅ Term Modification A modification in which the maturity date, timing of payments, or frequency of payments is changed. ⋅ Interest Only Modification A modification in which the loan is converted to interest only payments for a period of time. ⋅ Payment Modification A modification in which the dollar amount of the payment is changed, other than an interest only modification described above. ⋅ Combination Modification Any other type of modification, including the use of multiple categories above. As of June 30, 2016 there were no available commitments for troubled debt restructurings outstanding. Troubled Debt Restructurings June 30, 2016 Non-Accrual Total Accrual Status Status Modifications # Amount # Amount # Amount ($ in thousands) Real Estate Loans: Construction & development 0 $ - 1 $ 415 1 $ 415 Commercial real estate 12 6,941 3 2,208 15 9,149 Home equity lines 0 - 0 - 0 - Residential real estate 11 2,213 1 162 12 2,375 Total real estate 23 9,154 5 2,785 28 11,939 Commercial & industrial 1 332 0 - 1 332 Consumer & other 0 - 0 - 0 - Total loans 24 $ 9,486 5 $ 2,785 29 $ 12,271 December 31, 2015 Non-Accrual Total Accrual Status Status Modifications # Amount # Amount # Amount ($ in thousands) Real Estate Loans: Construction & development 0 $ - 1 $ 175 1 $ 175 Commercial real estate 12 7,073 1 338 13 7,411 Home equity lines 0 - 0 - 0 - Residential real estate 11 2,252 2 388 13 2,640 Total real estate 23 9,325 4 901 27 10,226 Commercial & industrial 1 362 0 - 1 362 Consumer & other 0 - 0 - 0 - Total loans 24 $ 9,687 4 $ 901 28 $ 10,588 The Bank’s policy is that loans placed on non-accrual status will typically remain on non-accrual status until all principal and interest payments are brought current and the prospect for future payment in accordance with the loan agreement appears relatively certain. The Bank’s policy generally refers to six months of payment performance as sufficient to warrant a return to accrual status. Troubled debt restructurings are classified as impaired loans when modified, and fair value calculations are performed to determine the specific reserves required in the allowance for loan losses related to these loans. Troubled debt restructurings can be removed from such status and returned to non-impaired status in years subsequent to restructure if the interest rate charged at restructure was greater than or equal to the rate charged for a new extension of credit with comparable risk and if the loan is performing and there is no available information to indicate that performance will not continue. New Troubled Debt Restructurings Three Months Ended June 30, 2016 Rate Term Payment Combination Total Modifications Modifications Modifications Modifications Modifications # Amount # Amount # Amount # Amount # Amount ($ in thousands) Pre-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - Total real estate 0 - 0 - 0 - 0 - 0 - Consumer & other 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - Post-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - Total real estate 0 - 0 - 0 - 0 - 0 - Consumer & other 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - Three Months Ended June 30, 2015 Pre-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 1 $ - 1 $ - Total real estate 0 - 0 - 0 - 1 - 1 - Consumer & other 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 0 $ - 0 $ - 1 $ - 1 $ - Post-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 1 $ 293 1 $ 293 Total real estate 0 - 0 - 0 - 1 293 1 293 Consumer & other 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 0 $ - 0 $ - 1 $ 293 1 $ 293 New Troubled Debt Restructurings Six Months Ended June 30, 2016 Rate Term Payment Combination Total Modifications Modifications Modifications Modifications Modifications # Amount # Amount # Amount # Amount # Amount ($ in thousands) Pre-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 1 $ - 1 $ - Commercial real estate 0 - 2 2,488 0 - 0 - 2 2,488 Total real estate 0 - 2 2,488 0 - 1 - 3 2,488 Commercial & industrial 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 2 $ 2,488 0 $ - 1 $ - 3 $ 2,488 Post-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 1 $ 415 1 $ 415 Commercial real estate 0 - 2 1,900 0 - 0 - 2 1,900 Total real estate 0 - 2 1,900 0 - 1 415 3 2,315 Commercial & industrial 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 2 $ 1,900 0 $ - 1 $ 415 3 $ 2,315 Six Months Ended June 30, 2015 ($ in thousands) Pre-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 1 $ - 1 $ - Total real estate 0 - 0 - 0 - 1 - 1 - Commercial & industrial 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 0 $ - 0 $ - 1 $ - 1 $ - Post-Modification Outstanding Recorded Investment: Real Estate Loans: Construction & development 0 $ - 0 $ - 0 $ - 1 $ 293 1 $ 293 Total real estate 0 - 0 - 0 - 1 293 1 293 Commercial & industrial 0 - 0 - 0 - 0 - 0 - Total loans 0 $ - 0 $ - 0 $ - 1 $ 293 1 $ 293 TDRs with a payment default occurring within 12 months of restructure During the three months ended June 30, 2016 June 30, 2015 # Amount # Amount ($ in thousands) Real Estate Loans: Commercial real estate 2 $ 1,900 0 $ - Residential real estate 0 - 0 - Total real estate 2 1,900 0 - Commercial & industrial 0 - 0 - Total loans 2 $ 1,900 0 $ - Troubled debt restructuring defaults can result in a higher allowance for loan losses and a corresponding higher provision for loan losses because defaults generally negatively impact the timing of and expected collections from these impaired loans. Impaired loans, which include troubled debt restructurings, are evaluated for specific additions to the allowance for loan losses by subtracting the recorded investment in these impaired loans from their fair values. Fair value is generally determined by the present value of future cash flows, collateral value, or liquidation value. Defaults generally reduce the present value of the future cash flows and can negatively impact the collateral values if declining real estate values are impacting the sale of collateral. Loans secured by one to four family residential properties with unpaid principal balances of $ 579,000 |