Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 4. LOANS Major classifications of loans held for investment are as follows: March 31, 2019 December 31, 2018 Legacy (1) Acquired Total Legacy (1) Acquired Total Commercial Real Estate Owner Occupied $ 300,801,706 $ 138,198,872 $ 439,000,578 $ 299,266,275 $ 140,892,706 $ 440,158,981 Investment 582,015,759 191,197,053 773,212,812 592,529,807 195,883,002 788,412,809 Hospitality 180,062,301 13,451,634 193,513,935 172,189,046 13,134,019 185,323,065 Land and A&D 82,358,822 22,791,313 105,150,135 71,908,761 21,760,867 93,669,628 Residential Real Estate First Lien-Investment 112,538,462 45,291,275 157,829,737 104,084,050 48,483,340 152,567,390 First Lien-Owner Occupied 108,852,047 136,182,761 245,034,808 108,696,078 140,221,589 248,917,667 Residential Land and A&D 44,332,786 15,842,288 60,175,074 42,639,161 16,828,434 59,467,595 HELOC and Jr. Liens 21,433,155 39,695,513 61,128,668 20,749,184 41,939,123 62,688,307 Commercial and Industrial 257,247,741 82,159,083 339,406,824 239,766,662 91,431,724 331,198,386 Consumer 15,270,415 31,814,054 47,084,469 16,289,147 34,919,111 51,208,258 Total loans 1,704,913,194 716,623,846 2,421,537,040 1,668,118,171 745,493,915 2,413,612,086 Allowance for loan losses (7,449,768 ) (358,374 ) (7,808,142 ) (7,004,839 ) (466,184 ) (7,471,023 ) Deferred loan costs, net 3,457,262 — 3,457,262 3,086,635 — 3,086,635 Net loans $ 1,700,920,688 $ 716,265,472 $ 2,417,186,160 $ 1,664,199,967 $ 745,027,731 $ 2,409,227,698 _______________________ ( 1 As a result of the acquisitions of Maryland Bankcorp, Inc. (“Maryland Bankcorp”), the parent company of Maryland Bank & Trust Company, N.A. (“MB&T”), in April 2011, May 2013, December 2015, July 2017, April 2018, two Credit Policies and Administration We have adopted a comprehensive lending policy, which includes stringent underwriting standards for all types of loans. We have designed our underwriting standards to promote a complete banking relationship rather than a transactional relationship. Our lending staff follows pricing guidelines established periodically by our management team. In an effort to manage risk, prior to funding the loan committee, consisting of four four In addition to the internal business processes employed in the credit administration area, Old Line Bank retains an outside independent firm to review the loan portfolio. This firm performs a detailed annual review and an interim update. We use the results of the firm’s report to validate our internal ratings and we review the commentary on specific loans and on our loan administration activities in order to improve our operations. Commercial Real Estate Loans We finance commercial real estate for our clients, for owner occupied and investment properties, hospitality and land acquisition and development. Commercial real estate loans totaled $1.51 March 31, 2019 December 31, 2018. may may one four not 80% 75%. Commercial real estate lending entails significant risks. Risks inherent in managing our commercial real estate portfolio relate to sudden or gradual drops in property values as well as changes in the economic climate that may At March 31, 2019, $193.5 Residential Real Estate Loans We offer a variety of consumer oriented residential real estate loans including home equity lines of credit, home improvement loans and first second $524.2 $523.6 March 31, 2019 December 31, 2018, not 85%. may not 43%, 640 not This segment of our portfolio also consists of funds advanced for construction of custom single family residences homes (where the home buyer is the borrower) and financing to builders for the construction of pre-sold homes and multi-family housing. These loans generally have short durations, meaning maturities typically of twelve twelve Construction lending also entails significant risk. These risks generally involve larger loan balances concentrated with single borrowers with funds advanced upon the security of the land or the project under construction. An appraisal of the property estimates the value of the project “as is and as if” completed. An appraisal of the property estimates the value of the project prior to completion of construction. Thus, initial funds are advanced based on the current value of the property with the remaining construction funds advanced under a budget sufficient to successfully complete the project within the “as completed” loan to value. To further mitigate the risks, we generally limit loan amounts to 80% first We generally only offer real estate construction financing only to experienced builders, commercial entities or individuals who have demonstrated the ability to obtain a permanent loan “take-out” (conversion to a permanent mortgage upon completion of the project). We also perform a complete analysis of the borrower and the project under construction. This analysis includes a review of the cost to construct, the borrower’s ability to obtain a permanent “take-out” the cash flow available to support the debt payments and construction costs in excess of loan proceeds, and the value of the collateral. During construction, we advance funds on these loans on a percentage of completion basis. We inspect each project as needed prior to advancing funds during the term of the construction loan. We may We also offer fixed rate home improvement loans. Our home equity and home improvement loan portfolio gives us a diverse client base. Although most of these loans are in our market area, the diversity of the individual loans in the portfolio reduces our potential risk. Usually, we secure our home equity loans and lines of credit with a security interest in the borrower’s primary or secondary residence. Under our loan approval policy, all residential real estate loans approved must comply with federal regulations. Generally, we will make residential mortgage loans in amounts up to the limits established by Fannie Mae and Freddie Mac for secondary market resale purposes. Currently this amount for single-family residential loans varies from $484,350 $726,525 $726,525. 620 Commercial and Industrial Lending Our commercial and industrial lending consists of lines of credit, revolving credit facilities, accounts receivable financing, term loans, equipment loans, Small Business Administration loans, standby letters of credit and unsecured loans. We originate commercial loans for any business purpose including the financing of leasehold improvements and equipment, the carrying of accounts receivable, general working capital, and acquisition activities. We have a diverse client base and we do not Commercial business loans have a higher degree of risk than residential mortgage loans because the availability of funds for repayment generally depends on the success of the business. They may $250,000, Consumer Installment Lending We offer various types of secured and unsecured consumer loans. We make consumer loans for personal, family or household purposes as a convenience to our customer base. Consumer loans, however, are not not 40% Our consumer loan portfolio includes indirect loans, which consists primarily of auto and RV loans. These loans are financed through dealers and the dealers receive a percentage of the finance charge, which varies depending on the terms of each loan. We use the same underwriting standards in originating these indirect loans as we do for consumer loans generally. Consumer loans may may not may not may Concentrations of Credit Most of our lending activity occurs within the state of Maryland within the suburban Washington, D.C. and Baltimore market areas in Baltimore City and Anne Arundel, Baltimore, Calvert, Carroll, Charles, Frederick, Harford, Howard, Montgomery, Prince George’s and St. Mary’s Counties. The majority of our loan portfolio consists of commercial real estate loans and residential real estate loans. Non-Accrual and Past Due Loans We consider loans past due if the borrower has not 90 no not not not The table below presents an age analysis of the loans held for investment portfolio at March 31, 2019 December 31, 2018. Age Analysis of Past Due Loans Age Analysis of Past Due Loans March 31, 2019 December 31, 2018 Legacy Acquired Total Legacy Acquired Total Current $ 1,695,749,348 $ 706,863,709 $ 2,402,613,057 $ 1,659,191,112 $ 729,738,007 $ 2,388,929,119 Accruing past due loans: 30 - 89 days past due Commercial Real Estate: Owner Occupied 3,958,783 — 3,958,783 3,990,558 — 3,990,558 Investment 66,753 1,908,182 1,974,935 1,729,404 3,849,944 5,579,348 Land and A&D 1,015,998 — 1,015,998 — — — Residential Real Estate: First Lien-Investment 178,881 589,787 768,668 179,701 896,227 1,075,928 First Lien-Owner Occupied 113,936 1,735,989 1,849,925 94,178 3,062,084 3,156,262 Land and A&D 464,649 338,036 802,685 883,460 413,191 1,296,651 HELOC and Jr. Liens 137,746 574,487 712,233 119,924 790,989 910,913 Commercial and Industrial 408,106 106,718 514,824 670,318 1,444,347 2,114,665 Consumer 109,122 664,188 773,310 320,071 1,338,813 1,658,884 Total 30 - 89 days past due 6,453,974 5,917,387 12,371,361 7,987,614 11,795,595 19,783,209 90 or more days past due Commercial Real Estate: Owner Occupied 1,050,000 1,050,000 — — — Investment — — — — 139,247 139,247 Residential Real Estate: First Lien-Owner Occupied — 150,588 150,588 — 103,365 103,365 Commercial and Industrial 75,137 — 75,137 — — — Consumer — — — — 54 54 Total 90 or more days past due 1,125,137 150,588 1,275,725 — 242,666 242,666 Total accruing past due loans 7,579,111 6,067,975 13,647,086 7,987,614 12,038,261 20,025,875 Recorded Investment Non-accruing loans: Commercial Real Estate: Owner Occupied — 246,165 246,165 — 182,261 182,261 Investment 576,671 51,595 628,266 — 51,070 51,070 Land and A&D — 45,000 45,000 — 45,000 45,000 Residential Real Estate: First Lien-Investment 192,501 303,891 496,392 192,501 292,758 485,259 First Lien-Owner Occupied 257,059 1,991,129 2,248,188 262,194 2,027,974 2,290,168 Land and A&D 284,179 200,209 484,388 277,704 201,737 479,441 HELOC and Jr. Liens — 653,634 653,634 — 690,732 690,732 Commercial and Industrial 250,247 45,294 295,541 191,388 45,269 236,657 Consumer 24,078 155,245 179,323 15,658 180,846 196,504 Non-accruing past due loans: 1,584,735 3,692,162 5,276,897 939,445 3,717,647 4,657,092 Total Loans $ 1,704,913,194 $ 716,623,846 $ 2,421,537,040 $ 1,668,118,171 $ 745,493,915 $ 2,413,612,086 We consider all nonperforming loans and troubled debt restructurings (“TDRs”) to be impaired. We do not March 31, 2019 December 31, 2018. Impaired Loans March 31, 2019 Unpaid Average Interest Legacy With no related allowance recorded: Commercial Real Estate: Owner Occupied $ 1,726,708 $ 1,726,708 $ — $ 1,735,411 $ 13,300 Investment 1,673,721 1,673,721 — 1,681,508 21,024 Residential Real Estate: First Lien-Owner Occupied 257,059 257,059 — 279,950 2,129 Commercial and Industrial 351,344 351,344 — 357,469 2,483 Consumer 12,081 12,081 12,081 — With an allowance recorded: Residential Real Estate: First Lien-Investment 192,501 192,501 39,420 192,501 — Land and A&D 284,179 284,179 25,000 282,613 — Commercial and Industrial 241,972 241,972 76,307 242,610 — Consumer 11,997 11,997 1,328 12,785 446 Total legacy impaired 4,751,562 4,751,562 142,055 4,796,928 39,382 Acquired(1) With no related allowance recorded: Commercial Real Estate: Owner Occupied 267,231 267,231 — 267,012 — Land and A&D Residential Real Estate: First Lien-Owner Occupied 2,362,303 2,234,524 — 2,422,433 20,169 First Lien-Investment Land and A&D 56,939 56,939 — 61,289 1,061 HELOC and Jr. Lien 477,025 477,025 — 501,237 6,491 Commercial and Industrial 66,661 66,661 — 67,063 844 Consumer 74,762 74,762 — 89,750 1,289 With an allowance recorded: Commercial Real Estate: Investment 72,408 72,408 14,340 163,876 — Land and A&D 328,851 45,000 45,000 328,851 — Residential Real Estate: First Lien-Owner Occupied 175,873 175,873 5,620 175,873 — First Lien-Investment 309,170 309,170 85,653 315,785 — Land and A&D 154,297 154,297 86,296 161,153 — HELOC and Jr. Lien 187,136 187,136 53,711 187,136 — Commercial and Industrial 48,750 48,750 48,750 48,750 — Consumer 108,569 108,569 19,004 120,781 2,630 Total acquired impaired 4,689,975 4,278,345 358,374 4,910,989 32,484 Total impaired $ 9,441,537 $ 9,029,907 $ 500,429 $ 9,707,917 $ 71,866 _______________________ ( 1 U.S. GAAP requires that we record acquired loans at fair value at acquisition, which includes a discount for loans with credit impairment. These purchased credit impaired loans are not not Impaired Loans December 31, 2018 Unpaid Average Interest Legacy With no related allowance recorded: Commercial Real Estate: Owner Occupied $ 1,737,394 $ 1,737,394 $ — $ 1,766,117 $ 74,203 Investment 1,688,661 1,688,661 — 1,716,183 88,410 Residential Real Estate: First Lien-Owner Occupied 262,194 262,194 — 285,514 11,412 Land and A&D 277,704 277,704 — 277,704 — Consumer 1,495 1,495 — 10,707 1,130 With an allowance recorded: Residential Real Estate: First Lien-Owner Occupied First Lien-Investment 192,501 192,501 39,420 192,501 — Commercial and Industrial 148,349 148,349 13,149 152,898 3,926 Consumer 14,163 14,163 1,416 27,217 1,129 Total legacy impaired 4,808,509 4,808,509 53,985 4,938,812 198,805 Acquired(1) With no related allowance recorded: Commercial Real Estate: Owner Occupied 283,083 232,635 — 542,654 3,281 Residential Real Estate: First Lien-Owner Occupied 2,127,854 2,011,286 — 2,159,327 38,636 Land and A&D 58,659 58,659 — 62,178 2,896 Consumer 22,139 22,139 — 26,027 364 With an allowance recorded: Commercial Real Estate: Owner Occupied Investment 72,408 72,408 14,340 163,876 2,750 First Lien-Owner Occupied 459,033 459,033 98,008 482,422 7,695 First Lien-Investment 298,187 298,187 62,701 310,862 7,871 Land and A&D 154,297 154,297 99,517 159,819 — HELOC and Jr. Lien 533,565 533,565 78,814 534,204 12,254 Commercial and Industrial 48,750 48,750 48,750 48,750 237 Consumer 188,102 188,102 19,053 231,978 11,619 Total acquired impaired 4,810,584 4,359,717 466,183 5,289,532 96,107 Total impaired $ 9,619,093 $ 9,168,226 $ 520,168 $ 10,228,344 $ 294,912 _______________________ ( 1 U.S. GAAP requires that we record acquired loans at fair value at acquisition, which includes a discount for loans with credit impairment. These purchased credit impaired loans are not not We consider a loan a TDR when we conclude that both of the following conditions exist: the restructuring constitutes a concession and the debtor is experiencing financial difficulties. Restructured loans at March 31, 2019 seven $2.3 seven $2.4 December 31, 2018. We had no three March 31, 2019 2018. no three March 31, 2019 2018. Acquired impaired loans The following table documents changes in the accretable (premium) discount on acquired impaired loans during the three March 31, 2019 2018, March 31, 2019 March 31, 2018 Balance at beginning of period $ 124,090 $ 115,066 Accretion of fair value discounts (407,618 ) (27,770 ) Reclassification (to)/from non-accretable discount 375,326 23,195 Balance at end of period $ 91,798 $ 110,491 Contractually At March 31, 2019 $ 10,994,414 $ 9,627,828 At December 31, 2018 11,146,165 9,396,862 At March 31, 2018 8,421,446 6,799,657 At December 31, 2017 8,277,731 6,617,774 Credit Quality Indicators We review the adequacy of the allowance for loan losses at least quarterly. We base the evaluation of the adequacy of the allowance for loan losses upon loan categories. We categorize loans as residential real estate loans, commercial real estate loans, commercial loans and consumer loans. We further divide commercial real estate loans by owner occupied, investment, hospitality and land acquisition and development. We also divide residential real estate by owner occupied, investment, land acquisition and development and junior liens. All categories are divided by risk rating and loss factors and weighed by risk rating to determine estimated loss amounts. We evaluate delinquent loans and loans for which management has knowledge about possible credit problems of the borrower or knowledge of problems with collateral separately and assign loss amounts based upon the evaluation. We determine loss ratios for all loans based upon a review of the three We charge off loans that management has identified as losses. We consider suggestions from our external loan review firm and bank examiners when determining which loans to charge off. We automatically charge off consumer loan accounts based on regulatory requirements. We partially charge off real estate loans that are collateral dependent based on the value of the collateral. If a loan that was previously rated a pass performing loan, from our acquisitions, deteriorates subsequent to the acquisition, the subject loan will be assessed for risk and, if necessary, evaluated for impairment. If the risk assessment rating is adversely changed and the loan is determined to not no no The following tables outline the class of loans by risk rating at March 31, 2019 December 31, 2018: Account Balance March 31, 2019 Legacy Acquired Total Risk Rating Pass(1 - 5) Commercial Real Estate: Owner Occupied $ 294,532,310 $ 135,256,420 $ 429,788,730 Investment 579,274,406 189,422,802 768,697,208 Hospitality 180,062,301 13,451,634 193,513,935 Land and A&D 82,358,822 22,550,396 104,909,218 Residential Real Estate: First Lien-Investment 111,733,083 42,161,186 153,894,269 First Lien-Owner Occupied 108,534,276 130,794,217 239,328,493 Land and A&D 41,975,994 15,541,118 57,517,112 HELOC and Jr. Liens 21,433,155 38,992,054 60,425,209 Commercial 255,249,209 80,452,219 335,701,428 Consumer 15,246,337 31,603,019 46,849,356 1,690,399,893 700,225,065 2,390,624,958 Special Mention(6) Commercial Real Estate: Owner Occupied 416,239 1,289,117 1,705,356 Investment 1,067,632 941,188 2,008,820 Land and A&D — 195,917 195,917 Residential Real Estate: First Lien-Investment 286,659 1,700,354 1,987,013 First Lien-Owner Occupied 60,712 1,506,258 1,566,970 Land and A&D 2,072,613 100,961 2,173,574 Commercial 322,215 1,584,961 1,907,176 Consumer — 24,815 24,815 4,226,070 7,343,571 11,569,641 Substandard(7) Commercial Real Estate: Owner Occupied 5,853,157 1,653,335 7,506,492 Investment 1,673,721 833,063 2,506,784 Land and A&D — 45,000 45,000 Residential Real Estate: First Lien-Investment 518,720 1,429,735 1,948,455 First Lien-Owner Occupied 257,059 3,882,286 4,139,345 Land and A&D 284,179 200,209 484,388 HELOC and Jr. Liens — 703,459 703,459 Commercial 1,676,317 121,903 1,798,220 Consumer 24,078 186,220 210,298 10,287,231 9,055,210 19,342,441 Doubtful(8) — — — Loss(9) — — — Total $ 1,704,913,194 $ 716,623,846 $ 2,421,537,040 Account Balance December 31, 2018 Legacy Acquired Total Risk Rating Pass(1 - 5) Commercial Real Estate: Owner Occupied $ 293,682,007 $ 137,978,800 $ 431,660,807 Investment 589,763,511 194,092,985 783,856,496 Hospitality 172,189,046 13,134,019 185,323,065 Land and A&D 71,908,761 21,514,420 93,423,181 Residential Real Estate: First Lien-Investment 103,270,617 45,431,446 148,702,063 First Lien-Owner Occupied 108,371,748 134,959,907 243,331,655 Land and A&D 40,268,376 16,524,667 56,793,043 HELOC and Jr. Liens 20,749,184 41,196,500 61,945,684 Commercial 237,713,832 89,049,308 326,763,140 Consumer 16,273,489 34,674,679 50,948,168 1,654,190,571 728,556,731 2,382,747,302 Special Mention(6) Commercial Real Estate: Owner Occupied 420,347 1,303,849 1,724,196 Investment 1,077,635 557,687 1,635,322 Land and A&D — 201,447 201,447 Residential Real Estate: First Lien-Investment 289,618 1,709,025 1,998,643 First Lien-Owner Occupied 62,136 1,522,737 1,584,873 Land and A&D 2,093,081 102,030 2,195,111 Commercial 174,729 174,429 349,158 Consumer — 30,848 30,848 4,117,546 5,602,052 9,719,598 Substandard(7) Commercial Real Estate: Owner Occupied 5,163,921 1,610,057 6,773,978 Investment 1,688,661 1,232,330 2,920,991 Land and A&D — 45,000 45,000 Residential Real Estate: First Lien-Investment 523,815 1,342,869 1,866,684 First Lien-Owner Occupied 262,194 3,738,945 4,001,139 Land and A&D 277,704 201,737 479,441 HELOC and Jr. Liens — 742,623 742,623 Commercial 1,878,101 2,207,987 4,086,088 Consumer 15,658 213,584 229,242 9,810,054 11,335,132 21,145,186 Doubtful(8) — — — Loss(9) — — — Total $ 1,668,118,171 $ 745,493,915 $ 2,413,612,086 The following table details activity in the allowance for loan losses by portfolio segment for the three March 31, 2019 2018. one not Commercial Commercial Residential Beginning balance $ 1,562,740 $ 4,728,694 $ 1,081,394 $ 98,195 $ 7,471,023 Provision for loan losses 232,962 128,045 (4,002 ) 57,170 414,175 Recoveries 10,753 417 3,119 27,552 41,841 Total 1,806,455 4,857,156 1,080,511 182,917 7,927,039 Loans charged off (4,108 ) — (1,028 ) (113,761 ) (118,897 ) Ending Balance $ 1,802,347 $ 4,857,156 $ 1,079,483 $ 69,156 $ 7,808,142 Amount allocated to: Legacy Loans: Individually evaluated for impairment $ 76,307 $ — $ 64,420 $ 1,328 $ 142,055 Other loans not individually evaluated 1,677,290 4,797,816 783,783 48,824 7,307,713 Acquired Loans: Individually evaluated for impairment 48,750 59,340 231,280 19,004 358,374 Ending balance $ 1,802,347 $ 4,857,156 $ 1,079,483 $ 69,156 $ 7,808,142 Commercial Commercial Residential Beginning balance $ 1,262,030 $ 3,783,735 $ 844,355 $ 30,466 $ 5,920,586 Provision for loan losses (50,372 ) 527,631 (148,161 ) 65,798 394,896 Recoveries 300 139 32 3,645 4,116 Total 1,211,958 4,311,505 696,226 99,909 6,319,598 Loans charged off — — — (62,079 ) (62,079 ) Ending Balance $ 1,211,958 $ 4,311,505 $ 696,226 $ 37,830 $ 6,257,519 Amount allocated to: Legacy Loans: Individually evaluated for impairment $ 95,431 $ 69,903 $ 76,496 $ — $ 241,830 Other loans not individually evaluated 1,092,011 4,161,530 542,266 37,830 5,833,637 Acquired Loans: Individually evaluated for impairment 24,516 80,072 77,464 — 182,052 Ending balance $ 1,211,958 $ 4,311,505 $ 696,226 $ 37,830 $ 6,257,519 Our recorded investment in loans at March 31, 2019 2018 Commercial Commercial Residential Legacy loans: Individually evaluated for impairment with specific reserve $ 241,972 $ — $ 476,680 $ 11,997 $ 730,649 Individually evaluated for impairment without specific reserve 351,344 3,400,429 257,059 12,081 4,020,913 Other loans not individually evaluated 256,654,426 1,141,838,159 286,422,712 15,246,338 1,700,161,633 Acquired loans: Individually evaluated for impairment with specific reserve subsequent to acquisition (ASC 310-20 at acquisition) 48,750 117,408 826,476 108,569 1,101,203 Individually evaluated for impairment without specific reserve (ASC 310-20 at acquisition) 66,661 267,231 2,768,488 74,762 3,177,142 Individually evaluated for impairment without specific reserve (ASC 310-30 at acquisition) 201,052 4,551,734 4,875,042 — 9,627,828 Collectively evaluated for impairment without reserve (ASC 310-20 at acquisition) 81,842,619 360,702,499 228,541,830 31,630,722 702,717,672 Ending balance $ 339,406,823 $ 1,510,877,460 $ 524,168,286 $ 47,084,471 $ 2,421,537,040 Commercial Commercial Residential Legacy loans: Individually evaluated for impairment with specific reserve $ 95,431 $ 587,663 $ 243,842 $ — $ 926,936 Individually evaluated for impairment without specific reserve 377,936 2,925,991 224,092 — 3,528,019 Other loans not individually evaluated 167,628,232 1,036,158,293 211,726,177 14,407,498 1,429,920,200 Acquired loans: Individually evaluated for impairment with specific reserve subsequent to acquisition (ASC 310-20 at acquisition) 71,049 154,297 250,194 — 475,540 Individually evaluated for impairment without specific reserve (ASC 310-20 at acquisition) — 299,445 1,265,545 — 1,564,990 Individually evaluated for impairment without specific reserve (ASC 310-30 at acquisition) — 3,434,002 3,351,654 14,000 6,799,656 Collectively evaluated for impairment without reserve (ASC 310-20 at acquisition) 31,537,974 142,896,022 98,575,266 44,235,502 317,244,764 Ending balance $ 199,710,622 $ 1,186,455,713 $ 315,636,770 $ 58,657,000 $ 1,760,460,105 |