Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 5 – Loans and allowance for loan losses Loans classified by type as of March 31, 2019 and December 31, 2018 are as follows (dollars in thousands): March 31, 2019 December 31, 2018 Amount % Amount % Construction and land development Residential $ 7,840 1.88 % $ 7,704 1.86 % Commercial 28,543 6.83 % 33,904 8.18 % 36,383 8.71 % 41,608 10.04 % Commercial real estate Owner occupied 101,926 24.39 % 98,153 23.68 % Non-owner occupied 97,672 23.38 % 95,034 22.93 % Multifamily 13,728 3.29 % 13,597 3.28 % Farmland 178 0.04 % 185 0.04 % 213,504 51.10 % 206,969 49.93 % Consumer real estate Home equity lines 20,004 4.79 % 20,675 4.99 % Secured by 1-4 family residential, First deed of trust 58,579 14.02 % 57,410 13.85 % Second deed of trust 9,717 2.32 % 9,556 2.31 % 88,300 21.13 % 87,641 21.15 % Commercial and industrial loans (except those secured by real estate) 40,241 9.63 % 36,639 8.84 % Guaranteed student loans 37,396 8.95 % 39,315 9.49 % Consumer and other 1,986 0.48 % 2,258 0.55 % Total loans 417,810 100.0 % 414,430 100.0 % Deferred fees and costs, net 737 713 Less: allowance for loan losses (3,027 ) (3,051 ) $ 415,520 $ 412,092 The Bank has a purchased portfolio of rehabilitated student loans guaranteed by the Department of Education (“DOE”). The guarantee covers approximately 98% of principal and accrued interest. The loans are serviced by a third-party servicer that specializes in handling the special needs of the DOE student loan programs. Loans pledged as collateral with the FHLB as part of their lending arrangement with the Company totaled $40,650,000 and $38,751,000 as of March 31, 2019 and December 31, 2018, respectively. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due as long as the remaining recorded investment in the loan is deemed fully collectible. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all principal and interest amounts contractually due are brought to current and future payments are reasonably assured. The following table provides information on nonaccrual loans segregated by type at the dates indicated (in thousands): March 31, December 31, 2019 2018 Construction and land development Commercial $ - $ 39 - 39 Commercial real estate Non-owner occupied 515 515 515 515 Consumer real estate Home equity lines 123 125 Secured by 1-4 family residential, First deed of trust 1,079 1,163 Second deed of trust 152 154 1,354 1,442 Commercial and industrial loans (except those secured by real estate) 236 255 Consumer and other 8 8 Total loans $ 2,113 $ 2,259 The Company assigns risk rating classifications to its loans. These risk ratings are divided into the following groups: Risk rated 1 to 4 loans are considered of sufficient quality to preclude an adverse rating. These assets generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral; Risk rated 5 loans are defined as having potential weaknesses that deserve management’s close attention; Risk rated 6 loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any; and Risk rated 7 loans have all the weaknesses inherent in substandard loans, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The following tables provide information on the risk rating of loans at the dates indicated (in thousands): Risk Rated Risk Rated Risk Rated Risk Rated Total 1-4 5 6 7 Loans March 31, 2019 Construction and land development Residential $ 7,093 $ - $ 747 $ - $ 7,840 Commercial 28,194 - 349 - 28,543 35,287 - 1,096 - 36,383 Commercial real estate Owner occupied 93,318 6,590 2,018 101,926 Non-owner occupied 97,157 - 515 - 97,672 Multifamily 13,569 159 - - 13,728 Farmland 79 99 - - 178 204,123 6,848 2,533 - 213,504 Consumer real estate Home equity lines 19,130 734 140 - 20,004 Secured by 1-4 family residential First deed of trust 55,265 1,849 1,465 - 58,579 Second deed of trust 7,874 1,634 209 - 9,717 82,269 4,217 1,814 - 88,300 Commercial and industrial loans (except those secured by real estate) 37,302 2,509 430 - 40,241 Guaranteed student loans 37,396 - - - 37,396 Consumer and other 1,968 8 10 - 1,986 Total loans $ 398,345 $ 13,582 $ 5,883 $ - $ 417,810 December 31, 2018 Construction and land development Residential $ 6,957 $ - $ 747 $ - $ 7,704 Commercial 33,432 6 466 - 33,904 40,389 6 1,213 - 41,608 Commercial real estate Owner occupied 88,484 6,540 3,129 - 98,153 Non-owner occupied 94,519 - 515 - 95,034 Multifamily 13,436 161 - - 13,597 Farmland 81 104 - - 185 196,520 6,805 3,644 - 206,969 Consumer real estate Home equity lines 19,601 934 140 - 20,675 Secured by 1-4 family residential First deed of trust 53,994 1,612 1,804 - 57,410 Second deed of trust 9,167 175 214 - 9,556 82,762 2,721 2,158 - 87,641 Commercial and industrial loans (except those secured by real estate) 32,776 3,349 499 15 36,639 Guaranteed student loans 39,315 - - - 39,315 Consumer and other 2,239 8 11 - 2,258 Total loans $ 394,001 $ 12,889 $ 7,525 $ 15 $ 414,430 The following table presents the aging of the recorded investment in past due loans and leases as of the dates indicated (in thousands): Recorded Greater Investment > 30-59 Days 60-89 Days Than Total Past Total 90 Days and Past Due Past Due 90 Days Due Current Loans Accruing March 31, 2019 Construction and land development Residential $ - $ - $ - $ - $ 7,840 $ 7,840 $ - Commercial 117 - - 117 28,426 28,543 - 117 - - 117 36,266 36,383 - Commercial real estate Owner occupied 673 - - 673 101,253 101,926 - Non-owner occupied - - - - 97,672 97,672 - Multifamily - - - - 13,728 13,728 - Farmland - - - - 178 178 - 673 - - 673 212,831 213,504 - Consumer real estate Home equity lines 378 - - 378 19,626 20,004 - Secured by 1-4 family residential First deed of trust 274 - - 274 58,305 58,579 - Second deed of trust 118 - - 118 9,599 9,717 - 770 - - 770 87,530 88,300 - Commercial and industrial loans (except those secured by real estate) - 434 - 434 39,807 40,241 - Guaranteed student loans 1,274 1,007 4,164 6,445 30,951 37,396 4,164 Consumer and other 11 9 - 20 1,966 1,986 - Total loans $ 2,845 $ 1,450 $ 4,164 $ 8,459 $ 409,351 $ 417,810 $ 4,164 Recorded Greater Investment > 30-59 Days 60-89 Days Than Total Past Total 90 Days and Past Due Past Due 90 Days Due Current Loans Accruing December 31, 2018 Construction and land development Residential $ - $ - $ - $ - $ 7,704 $ 7,704 $ - Commercial 118 - - 118 33,786 33,904 - 118 - - 118 41,490 41,608 - Commercial real estate Owner occupied - - - - 98,153 98,153 - Non-owner occupied - - - - 95,034 95,034 - Multifamily - - - - 13,597 13,597 - Farmland - - - - 185 185 - - - - - 206,969 206,969 - Consumer real estate Home equity lines - 315 - 315 20,360 20,675 - Secured by 1-4 family residential First deed of trust 171 7 - 178 57,232 57,410 - Second deed of trust 162 - - 162 9,394 9,556 - 333 322 - 655 86,986 87,641 - Commercial and industrial loans (except those secured by real estate) 312 433 - 745 35,894 36,639 - Guaranteed student loans 1,946 971 5,573 8,490 30,825 39,315 5,573 Consumer and other 9 1 - 10 2,248 2,258 - Total loans $ 2,718 $ 1,727 $ 5,573 $ 10,018 $ 404,412 $ 414,430 $ 5,573 Loans greater than 90 days past due are student loans that are guaranteed by the DOE which covers approximately 98% of the principal and interest. Accordingly, these loans will not be placed on nonaccrual status and are not considered to be impaired. Loans are considered impaired when, based on current information and events it is probable the Company will be unable to collect all amounts when due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Loans evaluated individually for impairment include non-performing loans, such as loans on non-accrual, loans past due by 90 days or more, restructured loans and other loans selected by management. The evaluations are based upon discounted expected cash flows or collateral valuations. If the evaluation shows that a loan is individually impaired, then a specific reserve is established for the amount of impairment. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Impaired loans are set forth in the following table as of the dates indicated (in thousands): March 31, 2019 December 31, 2018 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance With no related allowance recorded Construction and land development Residential $ 323 $ 323 $ - $ 747 $ 747 $ - Commercial 356 454 - 360 458 - 679 777 - 1,107 1,205 - Commercial real estate Owner occupied 2,576 2,576 - 3,703 3,703 - Non-owner occupied 2,566 2,566 - 2,588 2,588 - 5,142 5,142 - 6,291 6,291 - Consumer real estate Home equity lines 123 123 - 684 684 - Secured by 1-4 family residential First deed of trust 2,958 2,958 - 3,057 3,057 - Second deed of trust 711 936 - 721 929 - 3,792 4,017 - 4,462 4,670 - Commercial and industrial loans (except those secured by real estate) 512 885 - 528 875 - Consumer and other - - - - - - 10,125 10,821 - 12,388 13,041 - With an allowance recorded Construction and land development Commercial - - - 106 106 8 - - - 106 106 8 Commercial real estate Owner occupied 1,450 1,450 25 1,459 1,459 25 1,450 1,450 25 1,459 1,459 25 Consumer real estate Home equity lines - - - - - - Secured by 1-4 family residential First deed of trust 197 197 19 200 200 20 Second deed of trust 159 159 3 161 161 4 356 356 22 361 361 24 Commercial and industrial loans (except those secured by real estate) - - - 8 8 8 Consumer and other 8 8 8 9 9 9 1,814 1,814 55 1,943 1,943 74 Total Construction and land development Residential 323 323 - 747 747 - Commercial 356 454 - 466 564 8 679 777 - 1,213 1,311 8 Commercial real estate Owner occupied 4,026 4,026 25 5,162 5,162 25 Non-owner occupied 2,566 2,566 - 2,588 2,588 - 6,592 6,592 25 7,750 7,750 25 Consumer real estate Home equity lines 123 123 - 684 684 - Secured by 1-4 family residential, First deed of trust 3,155 3,155 19 3,257 3,257 20 Second deed of trust 870 1,095 3 882 1,090 4 4,148 4,373 22 4,823 5,031 24 Commercial and industrial loans (except those secured by real estate) 512 885 - 536 883 8 Consumer and other 8 8 8 9 9 9 $ 11,939 $ 12,635 $ 55 $ 14,331 $ 14,984 $ 74 The following is a summary of average recorded investment in impaired loans with and without a valuation allowance and interest income recognized on those loans for the periods indicated (in thousands): For the Three Months Ended March 31, 2019 2018 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized With no related allowance recorded Construction and land development Residential $ 267 $ - $ 299 $ 6 Commercial 475 - - - 742 - 299 6 Commercial real estate Owner occupied 3,460 42 3,689 40 Non-owner occupied 2,597 23 2,294 26 6,057 65 5,983 66 Consumer real estate Home equity lines 550 - 524 - Secured by 1-4 family residential First deed of trust 2,972 42 3,635 31 Second deed of trust 704 13 570 11 4,226 55 4,729 42 Commercial and industrial loans (except those secured by real estate) 477 8 465 8 Consumer and other 1 - 3 - 11,503 128 11,479 122 With an allowance recorded Construction and land development Commercial 26 - 233 6 Commercial real estate Owner occupied 1,461 15 1,708 11 Non-Owner occupied - - - - 1,461 15 1,708 11 Consumer real estate Home equity lines - - 136 2 Secured by 1-4 family residential First deed of trust 262 3 764 7 Second deed of trust 162 2 127 - 424 5 1,027 9 Commercial and industrial loans (except those secured by real estate) 176 - 591 - Consumer and other 14 - 5 - 2,101 20 3,564 26 Total Construction and land development Residential $ 267 $ - $ - $ - Commercial 501 - 532 12 768 - 532 12 Commercial real estate Owner occupied 4,921 57 5,397 51 Non-owner occupied 2,597 23 2,294 26 7,518 80 7,691 77 Consumer real estate Home equity lines 550 - 660 - Secured by 1-4 family residential, First deed of trust 3,234 45 4,399 38 Second deed of trust 866 15 697 11 4,650 60 5,756 49 Commercial and industrial loans (except those secured by real estate) 653 8 1,056 8 Consumer and other 15 - 8 - $ 13,604 $ 148 $ 15,043 $ 146 Included in impaired loans are loans classified as TDRs. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession to the borrower for economic or legal reasons related to the borrower’s financial difficulties that it would not otherwise consider. For loans classified as impaired TDRs, the Company further evaluates the loans as performing or nonaccrual. To restore a nonaccrual loan that has been formally restructured in a TDR to accrual status, we perform a current, well documented credit analysis supporting a return to accrual status based on the borrower’s financial condition and prospects for repayment under the revised terms. Otherwise, the TDR must remain in nonaccrual status. The analysis considers the borrower’s sustained historical repayment performance for a reasonable period to the return-to-accrual date, but may take into account payments made for a reasonable period prior to the restructuring if the payments are consistent with the modified terms. A sustained period of repayment performance generally would be a minimum of six months and would involve payments in the form of cash or cash equivalents. An accruing loan that is modified in a TDR can remain in accrual status if, based on a current well-documented credit analysis, collection of principal and interest in accordance with the modified terms is reasonably assured, and the borrower has demonstrated sustained historical repayment performance for a reasonable period before modification. The following is a summary of performing and nonaccrual TDRs and the related specific valuation allowance by portfolio segment for the periods indicated (dollars in thousands). Specific Valuation Total Performing Nonaccrual Allowance March 31, 2019 Commercial real estate Owner occupied $ 4,026 $ 4,026 $ - $ 25 Non-owner occupied 2,566 2,051 515 - 6,592 6,077 515 25 Consumer real estate Secured by 1-4 family residential First deeds of trust 2,196 1,516 680 19 Second deeds of trust 783 718 65 3 2,979 2,234 745 22 Commercial and industrial loans (except those secured by real estate) 310 276 34 - $ 9,881 $ 8,587 $ 1,294 $ 47 Number of loans 42 33 9 6 Specific Valuation Total Performing Nonaccrual Allowance December 31, 2018 Construction and land development Commercial $ - $ - $ - $ - - - - - Commercial real estate Owner occupied 4,064 4,064 - 25 Non-owner occupied 2,072 2,072 - - 6,136 6,136 - 25 Consumer real estate Secured by 1-4 family residential First deeds of trust 2,284 1,525 759 20 Second deeds of trust 794 729 65 4 3,078 2,254 824 24 Commercial and industrial loans (except those secured by real estate) 317 282 35 - $ 9,531 $ 8,672 $ 859 $ 49 Number of loans 42 33 9 6 The following table provides information about TDRs identified during the indicated periods (dollars in thousands). March 31, 2019 March 31, 2018 Pre- Post- Pre- Post- Modification Modification Modification Modification Number of Recorded Recorded Number of Recorded Recorded Loans Balance Balance Loans Balance Balance Commercial real estate Non-owner occupied 1 $ 515 $ 515 - $ - $ - 1 $ 515 $ 515 - $ - $ - There were no defaults on TDRs that were modified as TDRs during the prior twelve month period. Activity in the allowance for loan losses is as follows for the periods indicated (in thousands): Provision for Beginning (Recovery of) Ending Balance Loan Losses Charge-offs Recoveries Balance Three Months Ended March 31, 2019 Construction and land development Residential $ 42 $ 3 $ - $ 1 $ 46 Commercial 220 (48 ) - 1 173 262 (45 ) - 2 219 Commercial real estate Owner occupied 673 37 - - 710 Non-owner occupied 673 19 - - 692 Multifamily 87 1 - - 88 Farmland 2 - - - 2 1,435 57 - - 1,492 Consumer real estate Home equity lines 244 (10 ) - 6 240 Secured by 1-4 family residential First deed of trust 385 8 - 2 395 Second deed of trust 51 2 - 4 57 680 - - 12 692 Commercial and industrial loans (except those secured by real estate) 308 48 (15 ) 11 352 Student loans 121 33 (33 ) - 121 Consumer and other 34 (3 ) (2 ) 1 30 Unallocated 211 (90 ) - - 121 $ 3,051 $ - $ (50 ) $ 26 $ 3,027 Provision for Beginning (Recovery of) Ending Balance Loan Losses Charge-offs Recoveries Balance Year Ended December 31, 2018 Construction and land development Residential $ 32 $ 9 $ - $ 1 $ 42 Commercial 165 49 - 6 220 197 58 - 7 262 Commercial real estate Owner occupied 624 49 - - 673 Non-owner occupied 500 (45 ) - 218 673 Multifamily 60 27 - - 87 Farmland 3 (1 ) - - 2 1,187 30 - 218 1,435 Consumer real estate Home equity lines 268 39 (64 ) 1 244 Secured by 1-4 family residential First deed of trust 502 (97 ) (41 ) 21 385 Second deed of trust 47 6 (45 ) 43 51 817 (52 ) (150 ) 65 680 Commercial and industrial loans (except those secured by real estate) 556 (50 ) (375 ) 177 308 Student loans 108 118 (105 ) - 121 Consumer and other 27 32 (34 ) 9 34 Unallocated 347 (136 ) - - 211 $ 3,239 $ - $ (664 ) $ 476 $ 3,051 Provision for Beginning (Recovery of) Ending Balance Loan Losses Charge-offs Recoveries Balance Three Months Ended March 31, 2018 Construction and land development Residential $ 32 $ (6 ) $ - $ - $ 26 Commercial 165 23 - 1 189 197 17 - 1 215 Commercial real estate Owner occupied 624 38 - - 662 Non-owner occupied 500 (181 ) - 218 537 Multifamily 60 - - - 60 Farmland 3 (1 ) - - 2 1,187 (144 ) - 218 1,261 Consumer real estate Home equity lines 268 9 - - 277 Secured by 1-4 family residential First deed of trust 502 57 (34 ) 2 527 Second deed of trust 47 47 (45 ) 5 54 817 113 (79 ) 7 858 Commercial and industrial loans (except those secured by real estate) 556 44 - 4 604 Student loans 108 31 (32 ) - 107 Consumer and other 27 15 (21 ) 6 27 Unallocated 347 (76 ) - - 271 $ 3,239 $ - $ (132 ) $ 236 $ 3,343 The allowance for loan losses at each of the periods presented includes an amount that could not be identified to individual types of loans referred to as the unallocated portion of the allowance. We recognize the inherent imprecision in estimates of losses due to various uncertainties and the variability related to the factors used in calculation of the allowance. The allowance for loan losses included an unallocated portion of approximately $121,000, $211,000, and $271,000 at March 31, 2019, December 31, 2018, and March 31, 2018, respectively. Loans were evaluated for impairment as follows for the periods indicated (in thousands): Recorded Investment in Loans Allowance Loans Ending Ending Balance Individually Collectively Balance Individually Collectively Three Months Ended March 31, 2019 Construction and land development Residential $ 46 $ - $ 46 $ 7,840 $ 323 $ 7,517 Commercial 173 - 173 28,543 356 28,187 219 - 219 36,383 679 35,704 Commercial real estate Owner occupied 710 25 685 101,926 4,026 97,900 Non-owner occupied 692 - 692 97,672 2,566 95,106 Multifamily 88 - 88 13,728 - 13,728 Farmland 2 - 2 178 - 178 1,492 25 1,467 213,504 6,592 206,912 Consumer real estate Home equity lines 240 - 240 20,004 123 19,881 Secured by 1-4 family residential First deed of trust 395 19 376 58,579 3,155 55,424 Second deed of trust 57 3 54 9,717 870 8,847 692 22 670 88,300 4,148 84,152 Commercial and industrial loans (except those secured by real estate) 352 - 352 40,241 512 39,729 Student loans 121 - 121 37,396 - 37,396 Consumer and other 151 8 143 1,986 8 1,978 $ 3,027 $ 55 $ 2,972 $ 417,810 $ 11,939 $ 405,871 Year Ended December 31, 2018 Construction and land development Residential $ 42 $ - $ 42 $ 7,704 $ 747 $ 6,957 Commercial 220 8 212 33,904 466 33,438 262 8 254 41,608 1,213 40,395 Commercial real estate Owner occupied 673 25 648 98,153 5,162 92,991 Non-owner occupied 673 - 673 95,034 2,588 92,446 Multifamily 87 - 87 13,597 - 13,597 Farmland 2 - 2 185 - 185 1,435 25 1,410 206,969 7,750 199,219 Consumer real estate Home equity lines 244 - 244 20,675 684 19,991 Secured by 1-4 family residential First deed of trust 385 20 365 57,410 3,257 54,153 Second deed of trust 51 4 47 9,556 882 8,674 680 24 656 87,641 4,823 82,818 Commercial and industrial loans (except those secured by real estate) 308 8 300 36,639 536 36,103 Student loans 121 - 121 39,315 - 39,315 Consumer and other 245 9 236 2,258 9 2,249 $ 3,051 $ 74 $ 2,977 $ 414,430 $ 14,331 $ 400,099 |