Allowance for Credit Losses [Text Block] | Note 4: Credit Quality Assessment Allowance for Credit Losses June 30, 2015 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance for credit losses: Six months ended: Beginning balance $ 174 $ 272 $ 55 $ 160 $ 562 $ 2,366 $ 13 $ 3,602 Charge-offs - - - - - (494) (4) (498) Recoveries - 3 - - 290 17 - 310 Provision for credit losses 330 53 (15) 106 (247) 550 8 785 Ending balance $ 504 $ 328 $ 40 $ 266 $ 605 $ 2,439 $ 17 $ 4,199 Three months ended: Beginning balance $ 164 $ 278 $ 55 $ 175 $ 625 $ 2,527 $ 15 $ 3,839 Charge-offs - - - - - (481) - (481) Recoveries - - - - 290 16 - 306 Provision for credit losses 340 50 (15) 91 (310) 377 2 535 Ending balance $ 504 $ 328 $ 40 $ 266 $ 605 $ 2,439 $ 17 $ 4,199 June 30, 2014 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance for credit losses: Six months ended: Beginning balance $ 122 $ 200 $ 34 $ 131 $ 541 $ 1,464 $ 14 $ 2,506 Charge-offs - - - - - - - - Recoveries - - - - 4 42 - 46 Provision for credit losses 37 (4) (17) 7 116 365 (3) 501 Ending balance $ 159 $ 196 $ 17 $ 138 $ 661 $ 1,871 $ 11 $ 3,053 Three months ended: Beginning balance $ 143 $ 187 $ 16 $ 137 $ 686 $ 1,518 $ 13 $ 2,700 Charge-offs - - - - - - - - Recoveries - - - - - 28 - 28 Provision for credit losses 16 9 1 1 (25) 325 (2) 325 Ending balance $ 159 $ 196 $ 17 $ 138 $ 661 $ 1,871 $ 11 $ 3,053 The following table provides additional information on the allowance for credit losses by segment: June 30, 2015 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance allocated to: Legacy Loans: individually evaluated for impairment 313 - 10 - - 310 - 633 collectively evaluated for impairment 185 328 30 237 551 2,046 17 3,394 Acquired Loans: individually evaluated for impairment - - - - - - - - collectively evaluated for impairment 6 - - 29 54 83 - 172 Loans: Legacy Loans: Ending balance 61,711 73,806 14,624 82,249 109,164 126,311 1,371 469,236 individually evaluated for impairment 1,144 459 74 - 2,684 2,803 - 7,164 collectively evaluated for impairment 60,567 73,347 14,550 82,249 106,480 123,508 1,371 462,072 Acquired Loans: Ending balance 5,030 17,359 7,659 33,821 31,086 15,872 2,639 113,466 individually evaluated for impairment - 343 60 - - 420 - 823 collectively evaluated for impairment 5,030 17,016 7,599 33,821 31,086 15,452 2,639 112,643 December 31, 2014 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance allocated to: Legacy Loans: individually evaluated for impairment 60 - - - - 483 - 543 collectively evaluated for impairment 108 271 25 142 502 1,745 13 2,806 Acquired Loans: individually evaluated for impairment - - 30 - - 55 - 85 collectively evaluated for impairment 6 1 - 18 60 83 - 168 Loans: Legacy Loans: Ending balance 56,490 58,904 11,006 85,824 100,589 113,176 1,485 427,474 individually evaluated for impairment 1,144 308 - - 2,700 2,073 - 6,225 collectively evaluated for impairment 55,346 58,596 11,006 85,824 97,889 111,103 1,485 421,249 Acquired Loans: Ending balance 6,260 19,525 7,539 37,519 33,021 18,745 2,834 125,443 individually evaluated for impairment - 411 57 - - 405 92 965 collectively evaluated for impairment 6,260 19,114 7,482 37,519 33,021 18,340 2,742 124,478 When potential losses are identified, a specific provision and/or charge-off may be taken, based on the then current likelihood of repayment, that is at least in the amount of the collateral deficiency, and any potential collection costs, as determined by the independent third party appraisal. All loans that are considered impaired are subject to the completion of an impairment analysis. This analysis highlights any potential collateral deficiencies. A specific amount of impairment is established based on the Company’s calculation of the probable loss inherent in the individual loan. The actual occurrence and severity of losses involving impaired credits can differ substantially from estimates. June 30, 2015 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Credit quality indicators: Legacy Loans: Not classified $ 60,567 $ 73,347 $ 14,550 $ 82,249 $ 106,480 $ 123,749 $ 1,371 $ 462,313 Special mention - - - - - - - - Substandard - 301 - 2,090 691 - 3,082 Doubtful 1,144 158 74 - 594 1,871 - 3,841 Total $ 61,711 $ 73,806 $ 14,624 $ 82,249 $ 109,164 $ 126,311 $ 1,371 $ 469,236 Acquired Loans: Not classified $ 5,030 $ 16,499 $ 7,600 $ 33,821 $ 31,086 $ 15,452 $ 2,639 $ 112,127 Special mention - - - - - - - - Substandard - 517 - - - - - 517 Doubtful - 343 59 - - 420 - 822 Total $ 5,030 $ 17,359 $ 7,659 $ 33,821 $ 31,086 $ 15,872 $ 2,639 $ 113,466 December 31, 2014 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Credit quality indicators: Legacy Loans: Not classified $ 55,346 $ 58,439 $ 10,932 $ 85,580 $ 97,889 $ 111,312 $ 1,485 $ 420,983 Special mention - - - - - - - - Substandard 1,144 465 74 244 2,700 1,864 - 6,491 Doubtful - - - - - - - - Total $ 56,490 $ 58,904 $ 11,006 $ 85,824 $ 100,589 $ 113,176 $ 1,485 $ 427,474 Acquired Loans: Not classified $ 6,260 $ 18,567 $ 7,482 $ 37,519 $ 33,021 $ 18,340 $ 2,742 $ 123,931 Special mention - - - - - - - - Substandard - 546 - - - - - 546 Doubtful - 412 57 - - 405 92 966 Total $ 6,260 $ 19,525 $ 7,539 $ 37,519 $ 33,021 $ 18,745 $ 2,834 $ 125,443 · Special Mention - A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. · Substandard - Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. · Doubtful - Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. Loans classified Special Mention, Substandard, Doubtful or Loss are reviewed at least quarterly to determine their appropriate classification. All commercial loan relationships are reviewed annually. Non-classified residential mortgage loans and consumer loans are not evaluated unless a specific event occurs to raise the awareness of a possible credit deterioration. An aged analysis of past due loans are as follows: June 30, 2015 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Analysis of past due loans: Legacy Loans: Accruing loans current $ 60,531 $ 73,648 $ 14,550 $ 82,249 $ 108,570 $ 122,693 $ 1,345 $ 463,586 Accruing loans past due: 31-59 days past due - - - - - 100 - 100 60-89 days past due - - - - - 956 1 957 Greater than 90 days past due 36 - - - - 691 25 752 Total past due $ 36 $ - $ - $ - $ - $ 1,747 $ 26 $ 1,809 Non-accrual loans 1,144 158 74 - 594 1,871 - 3,841 Total loans $ 61,711 $ 73,806 $ 14,624 $ 82,249 $ 109,164 $ 126,311 $ 1,371 $ 469,236 Acquired Loans: Accruing loans current $ 5,030 $ 16,983 $ 7,599 $ 33,586 $ 30,549 $ 15,309 $ 2,483 $ 111,539 Accruing loans past due: 31-59 days past due - 33 - - - - - 33 60-89 days past due - - - - - - - - Greater than 90 days past due - - - 235 537 193 156 1,121 Total past due $ - $ 33 $ - $ 235 $ 537 $ 193 $ 156 $ 1,154 Non-accrual loans - 343 60 - - 370 - 773 Total loans $ 5,030 $ 17,359 $ 7,659 $ 33,821 $ 31,086 $ 15,872 $ 2,639 $ 113,466 December 31, 2014 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Analysis of past due loans: Legacy Loans: Accruing loans current $ 55,346 $ 58,122 $ 10,932 $ 85,824 $ 100,439 $ 108,451 $ 1,480 $ 420,594 Accruing loans past due: 31-59 days past due - - - - - - 5 5 60-89 days past due - 316 74 - - 2,816 - 3,206 Greater than 90 days past due - 158 - - 150 244 - 552 Total past due $ - $ 474 $ 74 $ - $ 150 $ 3,060 $ 5 $ 3,763 Non-accrual loans 1,144 308 - - - 1,665 - 3,117 Total loans $ 56,490 $ 58,904 $ 11,006 $ 85,824 $ 100,589 $ 113,176 $ 1,485 $ 427,474 Acquired Loans: Accruing loans current $ 5,982 $ 18,867 $ 7,430 $ 37,519 $ 33,021 $ 17,990 $ 2,742 $ 123,551 Accruing loans past due: 31-59 days past due - 247 52 - - 54 - 353 60-89 days past due - - - - - 24 - 24 Greater than 90 days past due 278 - - - - 327 - 605 Total past due $ 278 $ 247 $ 52 $ - $ - $ 405 $ - $ 982 Non-accrual loans - 411 57 - - 350 92 910 Total loans $ 6,260 $ 19,525 $ 7,539 $ 37,519 $ 33,021 $ 18,745 $ 2,834 $ 125,443 Total loans either in non-accrual status or in excess of ninety days delinquent totaled $ 6.5 1.11 5.2 0.94 The impaired loans at June 30, 2015 and December 31, 2014 are as follows: June 30, 2015 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) & land first lien junior lien occupied occupied and leases loans Total Impaired loans: Legacy Loans: Recorded investment $ 1,144 $ 459 $ 74 $ - $ 2,684 $ 2,803 $ - $ 7,164 With an allowance recorded 1,144 - 74 - - 425 - 1,643 With no related allowance recorded - 459 - - 2,684 2,378 - 5,521 Related allowance 313 - 10 - - 310 - 633 Unpaid principal 1,144 459 74 - 2,684 2,803 - 7,164 Six months ended June 30, 2015 Average balance of impaired loans 1,144 484 74 - 3,597 3,251 - 8,550 Interest income recognized - 12 - - 60 62 - 134 Three months ended June 30, 2015 Average balance of impaired loans 1,144 484 74 - 2,691 3,159 - 7,552 Interest income recognized - 6 - - 27 43 - 76 Acquired Loans: Recorded investment $ - $ 343 $ 60 $ - $ - $ 420 $ - $ 823 With an allowance recorded - - - - - - - - With no related allowance recorded - 343 60 - - 420 - 823 Related allowance - - - - - - - - Unpaid principal - 407 82 - 330 584 - 1,403 Six months ended June 30, 2015 Average balance of impaired loans - 417 82 - 330 663 - 1,492 Interest income recognized - 1 - - - 3 - 4 Three months ended June 30, 2015 Average balance of impaired loans - 410 82 - 330 642 - 1,464 Interest income recognized - - - - - 1 - 1 December 31, 2014 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) & land first lien junior lien occupied occupied and leases loans Total Impaired loans: Legacy Loans: Recorded investment $ 1,144 $ 308 $ - $ - $ 2,700 $ 2,073 $ - $ 6,225 With an allowance recorded 334 - - - - 690 - 1,024 With no related allowance recorded 810 308 - - 2,700 1,383 - 5,201 Related allowance 60 - - - - 483 - 543 Unpaid principal 1,144 308 - - 2,700 2,127 - 6,279 Average balance of impaired loans 1,108 329 - - 2,713 2,558 - 6,708 Interest income recognized 37 18 - - 166 167 - 388 Acquired Loans: Recorded investment $ - $ 411 $ 57 $ - $ - $ 405 $ 92 $ 965 With an allowance recorded - - 57 - - 55 - 112 With no related allowance recorded - 411 - - - 350 92 853 Related allowance - - 30 - - 55 - 85 Unpaid principal - 565 83 - 530 825 327 2,330 Average balance of impaired loans - 568 83 - 560 829 379 2,419 Interest income recognized - - - - - - - - Included in the total impaired loans above were non-accrual loans of $ 4.6 4.0 s $ 48 Management routinely evaluates other real estate owned (“OREO”) based upon periodic appraisals. For the six months ended June 30, 2015 and 2014 there were no additional valuation allowances recorded as the current appraised value less estimated cost to sell, was sufficient to cover the recorded OREO amount. For the six months ended June 30, 2015 and 2014 there were no new loans transferred from loans to OREO. For the first half of 2015 and 2014, the Company did not sell any properties held as OREO. The trouble debt restructured loans (“TDRs”) at June 30, 2015 and December 31, 2014 are as follows: June 30, 2015 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Legacy Loans: Residential real estate - first lien - $ - 1 $ 301 $ 301 Commercial - non-owner occupied 1 594 1 2,090 2,684 1 $ 594 2 $ 2,391 $ 2,985 December 31, 2014 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Legacy Loans: Residential real estate - first lien 1 $ 308 - $ - $ 308 Commercial loans 6 723 1 226 949 7 $ 1,031 1 $ 226 $ 1,257 A summary of TDR modifications outstanding and performing under modified terms are as follows: June 30, 2015 Not Performing Performing to Modified to Modified Total (in thousands) Terms Terms TDRs Legacy Loans: Residential real estate - first lien Forbearance $ - $ 301 $ 301 Commercial - non-owner occupied Rate modification 2,090 2,090 Commercial loans Rate modification 594 - 594 Total trouble debt restructure loans $ 594 $ 2,391 $ 2,985 December 31, 2014 Not Performing Performing to Modified to Modified Total (in thousands) Terms Terms TDRs Legacy Loans: Residential real estate - first lien Forbearance $ 308 $ - $ 308 Commercial loans Forbearance 723 - 723 Extension or other modification - 226 226 Total trouble debt restructure loans $ 1,031 $ 226 $ 1,257 There was one commercial real estate loan restructured in the first six months of 2014. Performing TDRs were in compliance with their modified terms and there are no further commitments associated with these credits. One performing commercial TDR has been in compliance with its modified term for over 12 consecutive months and was removed from a TDR status during the six months ended June 30, 2015. |