Allowance for Credit Losses [Text Block] | Note 5: Credit Quality Assessment Allowance for Credit Losses September 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: Nine months ended: Beginning balance $ 174 $ 272 $ 55 $ 160 $ 562 $ 2,366 $ 13 $ 3,602 Charge-offs - - - - - (640) (4) (644) Recoveries - 3 1 - 319 18 3 344 Provision for credit losses 302 77 (15) 119 (200) 727 5 1,015 Ending balance $ 476 $ 352 $ 41 $ 279 $ 681 $ 2,471 $ 17 $ 4,317 Three months ended: Beginning balance $ 504 $ 328 $ 40 $ 266 $ 605 $ 2,439 $ 17 $ 4,199 Charge-offs - - - - - (146) - (146) Recoveries - - 1 - 28 1 4 34 Provision for credit losses (28) 24 - 13 48 177 (4) 230 Ending balance $ 476 $ 352 $ 41 $ 279 $ 681 $ 2,471 $ 17 $ 4,317 September 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: Nine months ended: Beginning balance $ 122 $ 200 $ 34 $ 131 $ 541 $ 1,464 $ 14 $ 2,506 Charge-offs - - - - - (2,115) - (2,115) Recoveries - - - - 4 53 - 57 Provision for credit losses (13) 5 (11) 195 4 2,393 (3) 2,570 Ending balance $ 109 $ 205 $ 23 $ 326 $ 549 $ 1,795 $ 11 $ 3,018 Three months ended: Beginning balance $ 159 $ 196 $ 17 $ 138 $ 661 $ 1,871 $ 11 $ 3,053 Charge-offs - - - - - (2,115) - (2,115) Recoveries - - - - - 12 - 12 Provision for credit losses (50) 9 6 188 (112) 2,027 - 2,068 Ending balance $ 109 $ 205 $ 23 $ 326 $ 549 $ 1,795 $ 11 $ 3,018 The following table provides additional information on the allowance for credit losses by segment: September 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 $ 238 $ - $ 10 $ - $ - $ 222 $ - $ 470 collectively evaluated for impairment 232 210 31 279 651 2,179 17 3,599 Acquired Loans: individually evaluated for impairment - - - - 30 48 - 78 collectively evaluated for impairment 6 142 - - - 22 - 170 Loans: Legacy Loans: Ending balance $ 64,874 $ 86,143 $ 12,523 $ 109,351 $ 95,565 $ 124,539 $ 1,170 $ 494,165 individually evaluated for impairment 810 655 74 - 2,702 2,585 151 6,977 collectively evaluated for impairment 64,064 85,488 12,449 109,351 92,863 121,954 1,019 487,188 Acquired Loans: Ending balance 7,535 97,610 14,069 37,756 60,340 40,639 3,386 261,335 individually evaluated for impairment - 380 - 238 205 1,195 - 2,018 collectively evaluated for impairment 7,535 97,230 14,069 37,518 60,135 39,444 3,386 259,317 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. Credit risk profile by portfolio segment based upon internally assigned risk assignments are presented below: September 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 $ 64,064 $ 85,488 $ 12,449 $ 109,351 $ 92,716 $ 119,718 $ 1,019 $ 484,805 Special mention - - - - - 1,528 - 1,528 Substandard - 301 - 2,230 1,613 - 4,144 Doubtful 810 354 74 - 619 1,680 151 3,688 Total $ 64,874 $ 86,143 $ 12,523 $ 109,351 $ 95,565 $ 124,539 $ 1,170 $ 494,165 Acquired Loans: Not classified $ 7,535 $ 97,230 $ 14,069 $ 37,517 $ 59,613 $ 38,732 $ 3,386 $ 258,082 Special mention - - - - - - - - Substandard - - - - 522 712 - 1,234 Doubtful - 380 - 239 205 1,195 - 2,019 Total $ 7,535 $ 97,610 $ 14,069 $ 37,756 $ 60,340 $ 40,639 $ 3,386 $ 261,335 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 $ 17,611 $ 2,742 $ 123,202 Special mention - - - - - - - - Substandard - 546 - - - 729 - 1,275 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 ⋅ Substandard ⋅ Doubtful 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 possible credit deterioration. September 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 $ 64,036 $ 85,747 $ 12,400 $ 109,351 $ 94,946 $ 121,705 $ 999 $ 489,184 Accruing loans past due: 31-59 days past due - - 49 - - 80 - 129 60-89 days past due - 42 - - - 85 - 127 Greater than 90 days past due 28 - - - - 989 20 1,037 Total past due 28 42 49 - - 1,154 20 1,293 Non-accrual loans 810 354 74 - 619 1,680 151 3,688 Total loans $ 64,874 $ 86,143 $ 12,523 $ 109,351 $ 95,565 $ 124,539 $ 1,170 $ 494,165 Acquired Loans: Accruing loans current $ 7,535 $ 97,220 $ 13,996 $ 37,008 $ 59,523 $ 35,456 $ 3,376 $ 254,114 Accruing loans past due: 31-59 days past due - - 73 274 - 85 5 437 60-89 days past due - - - - 612 - - 612 Greater than 90 days past due - - - 236 - 3,903 5 4,144 Total past due - - 73 510 612 3,988 10 5,193 Non-accrual loans - 390 - 238 205 1,195 - 2,028 Total loans $ 7,535 $ 97,610 $ 14,069 $ 37,756 $ 60,340 $ 40,639 $ 3,386 $ 261,335 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 $10.9 million or 1.44% of total loans outstanding at September 30, 2015, which represents an increase from $5.2 million or 0.94% at December 31, 2014. The impaired loans at September 30, 2015 and December 31, 2014 are as follows: September 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 $ 810 $ 655 $ 74 $ - $ 2,702 $ 2,585 $ 151 $ 6,977 With an allowance recorded 810 - 74 - - 250 - 1,134 With no related allowance recorded - 655 - - 2,702 2,335 151 5,843 Related allowance 238 - 10 - - 222 - 470 Unpaid principal 810 655 74 - 2,702 2,585 151 6,977 Nine months ended Average balance of impaired loans 810 603 74 - 3,409 3,020 151 8,067 Interest income recognized - 19 - - 78 82 - 179 Three months ended Average balance of impaired loans 810 679 74 - 2,880 2,947 151 7,541 Interest income recognized - 7 - - 18 20 - 45 Acquired Loans: Recorded investment $ - $ 380 $ - $ 238 $ 205 $ 1,195 $ - $ 2,018 With an allowance recorded - - - - 82 48 - 130 With no related allowance recorded - 380 - 238 123 1,147 - 1,888 Related allowance - - - - 30 48 - 78 Unpaid principal - 473 - 414 389 3,101 - 4,377 Nine months ended Average balance of impaired loans - 473 - 414 389 3,101 - 4,377 Interest income recognized - 5 - 4 - 3 - 12 Three months ended Average balance of impaired loans - 483 - 421 480 3,103 - 4,487 Interest income recognized - 4 - 4 - - - 8 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 $ 5.7 4.0 115 Management routinely evaluates other real estate owned (“OREO”) based upon periodic appraisals. For the nine months ended September 30, 2015 the Bank recorded a valuation allowance of $ 736 20 September 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 2,083 2,677 1 $ 594 2 $ 2,384 $ 2,978 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 September 30, 2015 Not Performing Performing to Modified to Modified Total (in thousands) Terms Terms TDRs Legacy Loans: Residential real estate (RE) - first lien Forbearance $ - $ 301 $ 301 Commercial RE - non-owner occupied Rate modification 594 2,083 2,677 Total trouble debt restructure loans $ 594 $ 2,384 $ 2,978 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 nine months of 2015. 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 nine months ended September 30, 2015. |