Loans and Allowance for Loan Losses [Text Block] | Loans and Allowance for Loan Losses Loans consisted of the following segments as of June 30, 2016 and December 31, 2015 . June 30, 2016 December 31, 2015 Commercial $ 380,267 $ 349,051 Real estate: Construction, land and land development 223,541 174,602 1-4 family residential first mortgages 49,206 51,370 Home equity 19,727 21,749 Commercial 699,830 644,176 Consumer and other loans 9,487 6,801 1,382,058 1,247,749 Net unamortized fees and costs (1,217 ) (1,061 ) $ 1,380,841 $ 1,246,688 Real estate loans of approximately $630,000 and $590,000 were pledged as security for Federal Home Loan Bank (FHLB) advances as of June 30, 2016 and December 31, 2015 , respectively. Loans are stated at the principal amounts outstanding, net of unamortized loan fees and costs, with interest income recognized on the interest method based upon those outstanding loan balances. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. Loans are reported by the portfolio segments identified above and are analyzed by management on this basis. All loan policies identified below apply to all segments of the loan portfolio. Delinquencies are determined based on the payment terms of the individual loan agreements. The accrual of interest on past due and other impaired loans is generally discontinued at 90 days past due or when, in the opinion of management, the borrower may be unable to make all payments pursuant to contractual terms. Unless considered collectible, all interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income, if accrued in the current year, or charged to the allowance for loan losses, if accrued in the prior year. Generally, all payments received while a loan is on nonaccrual status are applied to the principal balance of the loan. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. A loan is classified as a troubled debt restructured (TDR) loan when the Company separately concludes that a borrower is experiencing financial difficulties and a concession is granted that would not otherwise be considered. Concessions may include a restructuring of the loan terms to alleviate the burden of the borrower's cash requirements, such as an extension of the payment terms beyond the original maturity date or a change in the interest rate charged. TDR loans with extended payment terms are accounted for as impaired until performance is established. A change to the interest rate would change the classification of a loan to a TDR loan if the restructured loan yields a rate that is below a market rate for that of a new loan with comparable risk. TDR loans with below-market rates are considered impaired until fully collected. TDR loans may also be reported as nonaccrual or past due 90 days if they are not performing per the restructured terms. Based upon its ongoing assessment of credit quality within the loan portfolio, the Company maintains a Watch List, which includes loans classified as Doubtful, Substandard and Watch according to the Company's classification criteria. These loans involve the anticipated potential for payment defaults or collateral inadequacies. A loan on the Watch List is considered impaired when management believes it is probable the Company will be unable to collect all contractual principal and interest payments due in accordance with the terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, at the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. The amount of impairment, if any, and any subsequent changes are included in the allowance for loan losses. The table below presents the TDR loans by segment as of June 30, 2016 and December 31, 2015 . June 30, 2016 December 31, 2015 Troubled debt restructured loans (1) : Commercial $ 96 $ 102 Real estate: Construction, land and land development — 60 1-4 family residential first mortgages 20 86 Home equity — — Commercial 389 445 Consumer and other loans — — Total troubled debt restructured loans $ 505 $ 693 (1) Included in this table were two TDR loans as of June 30, 2016 and three TDR loans as of December 31, 2015 , with balances of $485 and $613 , respectively, categorized as nonaccrual. There were no loan modifications considered to be TDR that occurred during the three and six months ended June 30, 2016 . There was one loan modification considered to be TDR that occurred during the three months ended June 30, 2015 with a pre- and post-modification recorded investment of $20 . There were two loan modifications considered to be TDR that occurred during the six months ended June 30, 2015 with a pre- and post-modification recorded investment of $130 . The recorded investment in TDR loans that have been modified within the twelve months preceding June 30, 2016 and June 30, 2015 , and that have subsequently had a payment default, totaled $20 and $110 , respectively. A TDR loan is considered to have a payment default when it is past due 30 days or more. The following table summarizes the recorded investment in impaired loans by segment, broken down by loans with no related allowance for loan losses and loans with a related allowance and the amount of that allowance as of June 30, 2016 and December 31, 2015 . June 30, 2016 December 31, 2015 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial $ — $ — $ — $ — $ — $ — Real Estate: Construction, land and land development — — — 60 663 — 1-4 family residential first mortgages 142 142 — 352 360 — Home equity — — — — — — Commercial 388 388 — 482 482 — Consumer and other loans — — — — — — 530 530 — 894 1,505 — With an allowance recorded: Commercial 132 132 132 142 142 142 Real Estate: Construction, land and land development — — — — — — 1-4 family residential first mortgages — — — — — — Home equity 259 259 259 270 270 270 Commercial 146 146 146 155 155 155 Consumer and other loans — — — — — — 537 537 537 567 567 567 Total: Commercial 132 132 132 142 142 142 Real Estate: Construction, land and land development — — — 60 663 — 1-4 family residential first mortgages 142 142 — 352 360 — Home equity 259 259 259 270 270 270 Commercial 534 534 146 637 637 155 Consumer and other loans — — — — — — $ 1,067 $ 1,067 $ 537 $ 1,461 $ 2,072 $ 567 The balance of impaired loans at June 30, 2016 and December 31, 2015 was composed of 8 and 13 different borrowers, respectively. The Company has no commitments to advance additional funds on any of the impaired loans. The following table summarizes the average recorded investment and interest income recognized on impaired loans by segment for the three and six months ended June 30, 2016 and 2015 . Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: Commercial $ — $ — $ 164 $ — $ — $ — $ 164 $ — Real estate: Construction, land and land development — — 354 4 16 — 360 7 1-4 family residential first mortgages 255 — 307 — 295 1 284 — Home equity — — — — — — — — Commercial 402 — 1,229 — 422 — 937 — Consumer and other loans — — 4 — — — 2 — 657 — 2,058 4 733 1 1,747 7 With an allowance recorded: Commercial 135 — 245 — 138 — 265 2 Real estate: Construction, land and land development — — — — — — 353 6 1-4 family residential first mortgages — — — — — — — — Home equity 261 — 222 — 264 — 224 — Commercial 148 — 165 — 150 — 168 — Consumer and other loans — — — — — — — — 544 — 632 — 552 — 1,010 8 Total: Commercial 135 — 409 — 138 — 429 2 Real estate: Construction, land and land development — — 354 4 16 — 713 13 1-4 family residential first mortgages 255 — 307 — 295 1 284 — Home equity 261 — 222 — 264 — 224 — Commercial 550 — 1,394 — 572 — 1,105 — Consumer and other loans — — 4 — — — 2 — $ 1,201 $ — $ 2,690 $ 4 $ 1,285 $ 1 $ 2,757 $ 15 The following tables provide an analysis of the payment status of the recorded investment in loans as of June 30, 2016 and December 31, 2015 . June 30, 2016 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Nonaccrual Loans Total Loans Commercial $ 12 $ — $ — $ 12 $ 380,123 $ 132 $ 380,267 Real estate: Construction, land and land development — — — — 223,541 — 223,541 1-4 family residential first mortgages — — — — 49,084 122 49,206 Home equity — — — — 19,468 259 19,727 Commercial — — — — 699,296 534 699,830 Consumer and other — — — — 9,487 — 9,487 Total $ 12 $ — $ — $ 12 $ 1,380,999 $ 1,047 $ 1,382,058 December 31, 2015 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Nonaccrual Loans Total Loans Commercial $ 1 $ 38 $ — $ 39 $ 348,870 $ 142 $ 349,051 Real estate: Construction, land and land development — — — — 174,602 — 174,602 1-4 family residential first mortgages 317 — — 317 50,721 332 51,370 Home equity — — — — 21,479 270 21,749 Commercial — — — — 643,539 637 644,176 Consumer and other — — — — 6,801 — 6,801 Total $ 318 $ 38 $ — $ 356 $ 1,246,012 $ 1,381 $ 1,247,749 The following tables present the recorded investment in loans by credit quality indicator and loan segment as of June 30, 2016 and December 31, 2015 . June 30, 2016 Pass Watch Substandard Doubtful Total Commercial $ 375,440 $ 3,528 $ 1,299 $ — $ 380,267 Real estate: Construction, land and land development 222,503 — 1,038 — 223,541 1-4 family residential first mortgages 48,275 789 142 — 49,206 Home equity 19,377 82 268 — 19,727 Commercial 678,136 21,025 669 — 699,830 Consumer and other 9,474 — 13 — 9,487 Total $ 1,353,205 $ 25,424 $ 3,429 $ — $ 1,382,058 December 31, 2015 Pass Watch Substandard Doubtful Total Commercial $ 344,650 $ 2,936 $ 1,465 $ — $ 349,051 Real estate: Construction, land and land development 173,373 — 1,229 — 174,602 1-4 family residential first mortgages 50,375 517 478 — 51,370 Home equity 21,401 68 280 — 21,749 Commercial 619,608 22,977 1,591 — 644,176 Consumer and other 6,786 — 15 — 6,801 Total $ 1,216,193 $ 26,498 $ 5,058 $ — $ 1,247,749 All loans are subject to the assessment of a credit quality indicator. Risk ratings are assigned for each loan at the time of approval, and they change as circumstances dictate during the term of the loan. The Company utilizes a 9-point risk rating scale as shown below, with ratings 1 - 5 included in the Pass column, rating 6 included in the Watch column, ratings 7 - 8 included in the Substandard column and rating 9 included in the Doubtful column. All loans classified as impaired that are included in the specific evaluation of the allowance for loan losses are included in the Substandard column along with all other loans with ratings of 7 - 8. Risk rating 1: The loan is secured by cash equivalent collateral. Risk rating 2: The loan is secured by properly margined marketable securities, bonds or cash surrender value of life insurance. Risk rating 3: The borrower is in strong financial condition and has strong debt service capacity. The loan is performing as agreed, and the financial characteristics and trends of the borrower exceed industry statistics. Risk rating 4: The borrower is in satisfactory financial condition and has satisfactory debt service capacity. The loan is performing as agreed, and the financial characteristics and trends of the borrower fall in line with industry statistics. Risk rating 5: The borrower's financial condition is less than satisfactory. The loan is still generally paying as agreed, but strained cash flows may cause some slowness in payments. The collateral values adequately preclude loss on the loan. Financial characteristics and trends lag industry statistics. There may be noncompliance with loan covenants. Risk rating 6: The borrower's financial condition is deficient. Payment delinquencies may be more common. Collateral values still protect from loss, but margins are narrow. The loan may be reliant on secondary sources of repayment, including liquidation of collateral and guarantor support. Risk rating 7: The loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Well-defined weaknesses exist that jeopardize the liquidation of the debt. The Company is inadequately protected by the valuation or paying capacity of the collateral pledged. If deficiencies are not corrected, there is a distinct possibility that a loss will be sustained. Risk rating 8: All the characteristics of rating 7 exist with the added condition that the loan is past due more than 90 days or there is reason to believe the Company will not receive its principal and interest according to the terms of the loan agreement. Risk rating 9: All the weaknesses inherent in risk ratings 7 and 8 exist with the added condition that collection or liquidation, on the basis of currently known facts, conditions and values, is highly questionable and improbable. A loan reaching this category would most likely be charged off. Credit quality indicators for all loans and the Company's risk rating process are dynamic and updated on a continuous basis. Risk ratings are updated as circumstances that could affect the repayment of an individual loan are brought to management's attention through an established monitoring process. Individual lenders initiate changes as appropriate for ratings 1 through 5, and changes for ratings 6 through 9 are initiated via communications with management. The likelihood of loss increases as the risk rating increases and is generally preceded by a loan appearing on the Watch List, which consists of all loans with a risk rating of 6 or worse. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all segments of criticized loans. In addition to the Company's internal credit monitoring practices and procedures, an outsourced independent credit review function is in place to further assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. In all portfolio segments, the primary risks are that a borrower's income stream diminishes to the point that the borrower is not able to make scheduled principal and interest payments and any collateral securing the loan declines in value. The risk of declining collateral values is present for most types of loans. Commercial loans consist primarily of loans to businesses for various purposes, including revolving lines to finance current operations, inventory and accounts receivable, and capital expenditure loans to finance equipment and other fixed assets. These loans generally have short maturities, have either adjustable or fixed interest rates, and are either unsecured or secured by inventory, accounts receivable and/or fixed assets. For commercial loans, the primary source of repayment is from the operation of the business. Real estate loans include various types of loans for which the Company holds real property as collateral, and consist of loans on commercial properties and single and multifamily residences. Real estate loans are typically structured to mature or reprice every five years with payments based on amortization periods up to 30 years. The majority of construction loans are to contractors and developers for construction of commercial buildings or residential real estate. These loans typically have maturities of up to 24 months. The Company's loan policy includes minimum appraisal and other credit guidelines. Consumer loans include loans extended to individuals for household, family and other personal expenditures not secured by real estate. The majority of the Company's consumer lending is for vehicles, consolidation of personal debts and household improvements. The repayment source for consumer loans, including 1-4 family residential and home equity loans, is typically wages. The allowance for loan losses is established through a provision for loan losses charged to expense. The allowance is an amount that management believes will be adequate to absorb probable losses on existing loans based on an evaluation of the collectability of loans and prior loss experience. This evaluation also takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, the review of specific problem loans, and the current economic conditions that may affect the borrower's ability to pay. Loans are charged-off against the allowance for loan losses when management believes that collectability of the principal is unlikely. While management uses the best information available to make its evaluations, future adjustments to the allowance may be necessary if there are significant changes in economic conditions or the other factors relied upon. The allowance for loan losses consists of specific and general components. The specific component relates to loans that meet the definition of impaired. The general component covers the remaining loans and is based on historical loss experience adjusted for qualitative factors such as delinquency trends, loan growth, economic elements and local market conditions. These same policies are applied to all segments of loans. In addition, regulatory agencies, as an integral part of their examination processes, periodically review the Company's allowance for loan losses, and may require the Company to make additions to the allowance based on their judgment about information available to them at the time of their examinations. The following tables detail the changes in the allowance for loan losses by segment for the three and six months ended June 30, 2016 and 2015 . Three Months Ended June 30, 2016 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 4,143 $ 2,662 $ 396 $ 519 $ 7,484 $ 76 $ 15,280 Charge-offs — — (93 ) — — — (93 ) Recoveries 99 12 10 17 3 1 142 Provision (1) 199 130 80 (53 ) 119 25 500 Ending balance $ 4,441 $ 2,804 $ 393 $ 483 $ 7,606 $ 102 $ 15,829 Three Months Ended June 30, 2015 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 4,498 $ 1,744 $ 433 $ 505 $ 6,669 $ 29 $ 13,878 Charge-offs (18 ) — (15 ) — — — (33 ) Recoveries 303 — 1 10 3 2 319 Provision (1) (47 ) (44 ) 26 (41 ) 310 (4 ) 200 Ending balance $ 4,736 $ 1,700 $ 445 $ 474 $ 6,982 $ 27 $ 14,364 Six Months Ended June 30, 2016 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 4,369 $ 2,338 $ 508 $ 481 $ 7,254 $ 17 $ 14,967 Charge-offs — — (93 ) — — — (93 ) Recoveries 141 56 21 24 6 7 255 Provision (1) (69 ) 410 (43 ) (22 ) 346 78 700 Ending balance $ 4,441 $ 2,804 $ 393 $ 483 $ 7,606 $ 102 $ 15,829 Six Months Ended June 30, 2015 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Beginning balance $ 4,415 $ 2,151 $ 466 $ 534 $ 6,013 $ 28 $ 13,607 Charge-offs (56 ) — (15 ) — — — (71 ) Recoveries 327 250 2 35 6 8 628 Provision (1) 50 (701 ) (8 ) (95 ) 963 (9 ) 200 Ending balance $ 4,736 $ 1,700 $ 445 $ 474 $ 6,982 $ 27 $ 14,364 (1) The negative provisions for the various segments are either related to the decline in each of those portfolio segments during the time periods disclosed and/or improvement in the credit quality factors related to those portfolio segments. The following tables present a breakdown of the allowance for loan losses disaggregated on the basis of impairment analysis method by segment as of June 30, 2016 and December 31, 2015 . June 30, 2016 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for impairment $ 132 $ — $ — $ 259 $ 146 $ — $ 537 Collectively evaluated for impairment 4,309 2,804 393 224 7,460 102 15,292 Total $ 4,441 $ 2,804 $ 393 $ 483 $ 7,606 $ 102 $ 15,829 December 31, 2015 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for impairment $ 142 $ — $ — $ 270 $ 155 $ — $ 567 Collectively evaluated for impairment 4,227 2,338 508 211 7,099 17 14,400 Total $ 4,369 $ 2,338 $ 508 $ 481 $ 7,254 $ 17 $ 14,967 The following tables present the recorded investment in loans, exclusive of unamortized fees and costs, disaggregated on the basis of impairment analysis method by segment as of June 30, 2016 and December 31, 2015 . June 30, 2016 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for impairment $ 132 $ — $ 142 $ 259 $ 534 $ — $ 1,067 Collectively evaluated for impairment 380,135 223,541 49,064 19,468 699,296 9,487 1,380,991 Total $ 380,267 $ 223,541 $ 49,206 $ 19,727 $ 699,830 $ 9,487 $ 1,382,058 December 31, 2015 Real Estate Commercial Construction and Land 1-4 Family Residential Home Equity Commercial Consumer and Other Total Ending balance: Individually evaluated for impairment $ 142 $ 60 $ 352 $ 270 $ 637 $ — $ 1,461 Collectively evaluated for impairment 348,909 174,542 51,018 21,479 643,539 6,801 1,246,288 Total $ 349,051 $ 174,602 $ 51,370 $ 21,749 $ 644,176 $ 6,801 $ 1,247,749 |