Allowance for Credit Losses [Text Block] | Note 5: Credit Quality Assessment Allowance for Credit Losses June 30, 2016 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 $ 265 $ 300 $ 47 $ 309 $ 728 $ 3,094 $ 126 $ 4,869 Charge-offs - - - - - (66) (11) (77) Recoveries - - - - 3 26 23 52 Provision for credit losses 183 65 23 269 110 229 21 900 Ending balance $ 448 $ 365 $ 70 $ 578 $ 841 $ 3,283 $ 159 $ 5,744 Three months ended: Beginning balance $ 362 $ 349 $ 56 $ 543 $ 838 $ 3,043 $ 65 $ 5,256 Charge-offs - - - - - (59) - (59) Recoveries - - - - 1 17 14 32 Provision for credit losses 86 16 14 35 2 282 80 515 Ending balance $ 448 $ 365 $ 70 $ 578 $ 841 $ 3,283 $ 159 $ 5,744 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 The following table provides additional information on the allowance for credit losses at June 30, 2016 and December 31, 2015: June 30, 2016 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 $ - $ - $ - $ - $ - $ 1,157 $ - $ 1,157 collectively evaluated for impairment 427 340 55 317 717 1,773 49 3,678 Acquired Loans: individually evaluated for impairment - - - 191 - 253 72 516 collectively evaluated for impairment 21 25 15 70 124 100 38 393 Loans: Legacy Loans: Ending balance $ 68,022 $ 107,484 $ 20,350 $ 95,678 $ 140,158 $ 128,520 $ 3,014 $ 563,226 individually evaluated for impairment - 298 - - 2,667 11,259 - 14,224 collectively evaluated for impairment 68,022 107,186 20,350 95,678 137,491 117,261 3,014 549,002 Acquired Loans: Ending balance 6,130 90,250 11,476 34,453 56,882 32,447 2,282 233,920 individually evaluated for impairment - 316 - 347 610 2,411 140 3,824 collectively evaluated for impairment 6,130 89,934 11,476 34,106 56,272 30,036 2,142 230,096 December 31, 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: Legacy Loans: individually evaluated for impairment $ - $ - $ - $ - $ - $ 1,160 $ - $ 1,160 collectively evaluated for impairment 257 289 40 262 621 1,799 30 3,298 Acquired Loans: individually evaluated for impairment - - - - - 48 75 123 collectively evaluated for impairment 8 11 7 47 107 87 21 288 Loans: Legacy Loans: Ending balance $ 63,085 $ 89,649 $ 15,098 $ 94,393 $ 122,304 $ 124,981 $ 1,302 $ 510,811 individually evaluated for impairment - 631 63 - 2,838 5,086 - 8,618 collectively evaluated for impairment 63,085 89,018 15,035 94,393 119,466 119,895 1,302 502,193 Acquired Loans: Ending balance 6,300 93,339 12,379 36,722 59,057 38,443 2,951 249,191 individually evaluated for impairment - 363 - 232 151 1,728 150 2,624 collectively evaluated for impairment 6,300 92,976 12,379 36,490 58,906 36,715 2,801 246,567 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, 2016 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 $ 68,022 $ 107,186 $ 20,350 $ 95,678 $ 136,467 $ 125,902 $ 3,014 $ 556,619 Special mention - - - - 585 - - 585 Substandard - 298 - - 2,512 3 - 2,813 Doubtful - - - - 594 2,615 - 3,209 Total $ 68,022 $ 107,484 $ 20,350 $ 95,678 $ 140,158 $ 128,520 $ 3,014 $ 563,226 Acquired Loans: Not classified $ 6,130 $ 89,138 $ 11,476 $ 34,106 $ 55,097 $ 30,037 $ 2,142 $ 228,126 Special mention - - - - - - - - Substandard - 795 - - 1,175 689 - 2,659 Doubtful - 317 - 347 610 1,721 140 3,135 Total $ 6,130 $ 90,250 $ 11,476 $ 34,453 $ 56,882 $ 32,447 $ 2,282 $ 233,920 December 31, 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 $ 63,085 $ 89,081 $ 15,035 $ 94,393 $ 119,637 $ 121,288 $ 1,302 $ 503,820 Special mention - - - - - 614 - 614 Substandard - 410 - 2,073 7 - 2,490 Doubtful - 158 63 - 594 3,072 - 3,887 Total $ 63,085 $ 89,649 $ 15,098 $ 94,393 $ 122,304 $ 124,981 $ 1,302 $ 510,811 Acquired Loans: Not classified $ 6,300 $ 92,975 $ 12,379 $ 36,484 $ 58,393 $ 36,731 $ 2,801 $ 246,063 Special mention - - - - - - - - Substandard - - - - 519 - - 519 Doubtful - 364 - 238 145 1,712 150 2,609 Total $ 6,300 $ 93,339 $ 12,379 $ 36,722 $ 59,057 $ 38,443 $ 2,951 $ 249,191 · 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 possible credit deterioration. June 30, 2016 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 $ 68,018 $ 107,484 $ 20,350 $ 95,678 $ 139,126 $ 125,305 $ 3,014 $ 558,975 Accruing loans past due: 31-59 days past due - - - - - - - - 60-89 days past due - - - - - 600 - 600 Greater than 90 days past due 4 - - - 438 - - 442 Total past due 4 - - - 438 600 - 1,042 Non-accrual loans - - - - 594 2,615 - 3,209 Total loans $ 68,022 $ 107,484 $ 20,350 $ 95,678 $ 140,158 $ 128,520 $ 3,014 $ 563,226 Acquired Loans: Accruing loans current $ 5,370 $ 89,511 $ 11,416 $ 33,660 $ 56,272 $ 30,726 $ 2,134 $ 229,089 Accruing loans past due: 31-59 days past due - - 26 - - - 2 28 60-89 days past due 760 157 5 - - - 6 928 Greater than 90 days past due - 265 29 446 - - - 740 Total past due 760 422 60 446 - - 8 1,696 Non-accrual loans - 317 - 347 610 1,721 140 3,135 Total loans $ 6,130 $ 90,250 $ 11,476 $ 34,453 $ 56,882 $ 32,447 $ 2,282 $ 233,920 December 31, 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 $ 63,070 $ 89,319 $ 15,034 $ 94,141 $ 121,094 $ 120,025 $ 1,301 $ 503,983 Accruing loans past due: 31-59 days past due - - 1 252 - 24 1 278 60-89 days past due - - - - - 725 - 725 Greater than 90 days past due 15 - - - 445 - - 460 Total past due 15 - 1 252 445 749 1 1,463 Non-accrual loans - 330 63 - 765 4,207 - 5,365 Total loans $ 63,085 $ 89,649 $ 15,098 $ 94,393 $ 122,304 $ 124,981 $ 1,302 $ 510,811 Acquired Loans: Accruing loans current $ 5,924 $ 91,936 $ 12,290 $ 35,574 $ 58,369 $ 36,568 $ 2,765 $ 243,426 Accruing loans past due: 31-59 days past due 67 89 59 73 337 - 11 636 60-89 days past due 309 10 - 607 200 - 23 1,149 Greater than 90 days past due - 941 30 236 - 147 2 1,356 Total past due 376 1,040 89 916 537 147 36 3,141 Non-accrual loans - 363 - 232 151 1,728 150 2,624 Total loans $ 6,300 $ 93,339 $ 12,379 $ 36,722 $ 59,057 $ 38,443 $ 2,951 $ 249,191 Total loans either in non-accrual status or in excess of ninety days delinquent totaled $ 7.5 9.4 9.8 1.3 June 30, 2016 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 $ - $ 298 $ - $ - $ 2,667 $ 3,437 $ - $ 6,402 With an allowance recorded - - - - - 1,555 - 1,555 With no related allowance recorded - 298 - - 2,667 1,882 - 4,847 Related allowance - - - - - 1,157 - 1,157 Unpaid principal - 298 - - 2,667 3,437 - 6,402 Six months ended June 30, 2016 Average balance of impaired loans - 324 - - 2,667 4,140 - 7,131 Interest income recognized - 10 - - - 89 - 99 Three months ended June 30, 2016 Average balance of impaired loans - 323 - - 2,667 4,036 - 7,026 Interest income recognized - 10 - - - 55 - 65 Acquired Loans: Recorded investment $ - $ 316 $ - $ 347 $ 610 $ 2,411 $ 140 $ 3,824 With an allowance recorded - - - 191 - 984 140 1,315 With no related allowance recorded - 316 - 156 610 1,427 - 2,509 Related allowance - - - 191 - 253 72 516 Unpaid principal - 329 - 494 773 3,047 146 4,789 Six months ended June 30, 2016 Average balance of impaired loans - 372 - 637 929 7,923 148 10,009 Interest income recognized - 10 - - 8 88 1 107 Three months ended June 30, 2016 Average balance of impaired loans - 372 - 634 925 7,891 147 9,969 Interest income recognized - 6 - - 8 44 1 59 December 31, 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 $ - $ 631 $ 63 $ - $ 2,838 $ 5,086 $ - $ 8,618 With an allowance recorded - - - - - 1,160 - 1,160 With no related allowance recorded - 631 63 - 2,838 3,926 - 7,458 Related allowance - - - - - 1,160 - 1,160 Unpaid principal - 631 63 - 2,838 5,086 - 8,618 Average balance of impaired loans - 622 74 - 3,417 7,198 - 11,311 Interest income recognized - 29 - - 119 284 - 432 Acquired Loans: Recorded investment $ - $ 363 $ - $ 232 $ 151 $ 1,728 $ 150 $ 2,624 With an allowance recorded - - - - - 48 75 123 With no related allowance recorded - 363 - 232 151 1,680 75 2,501 Related allowance - - - - - 48 75 123 Unpaid principal - 426 - 402 302 2,742 150 4,022 Average balance of impaired loans - 444 - 197 63 901 106 1,711 Interest income recognized - 8 - 8 - 3 6 25 Included in the total impaired loans above were non-accrual loans of $ 6.3 8.0 252 Management routinely evaluates other real estate owned (“OREO”) based upon periodic appraisals. For the six months ended June 30, 2016 there was an additional allowance of $ 83 Loans may have their terms restructured (e.g., interest rates, loan maturity date, payment and amortization period, etc.) in circumstances that provide payment relief to a borrower experiencing financial difficulty. Such restructured loans are considered trouble debt restructured loans (“TDRs”) that may either be impaired loans that may either be in accruing status or non-accruing status. Non-accruing restructured loans may return to accruing status provided there is a sufficient period of payment performance in accordance with the restructure terms. Loans may be removed from the restructured category in the year subsequent to the restructuring if: a) the restructuring agreement specifies an interest rate equal to or greater than the rate that the creditor was willing to accept at the time of restructuring for a new loan with comparable risk; and b) the loan is not impaired based on the terms specified by the restructuring agreement. June 30, 2016 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Residential real estate - first lien - $ - 1 $ 298 $ 298 Commercial - non-owner occupied 1 594 1 2,073 2,667 Commercial loans and leases 2 290 1 2 292 Consumer 1 140 - - 140 4 $ 1,024 3 $ 2,373 $ 3,397 December 31, 2015 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Residential real estate - first lien - $ - 1 $ 301 $ 301 Commercial - non-owner occupied 1 594 1 2,073 2,667 Commercial loans and leases - - 1 7 7 Consumer 1 150 - - 150 2 $ 744 3 $ 2,381 $ 3,125 June 30, 2016 Not Performing Performing to Modified to Modified Total (in thousands) Terms Terms TDRs Residential real estate (RE) - first lien Forbearance $ - $ 298 $ 298 Commercial RE - non-owner occupied Rate modification 594 2,073 2,667 Commercial loans Forbearance 290 - 290 Extension or other modification - 2 2 Consumer Extension or other modification 140 - 140 Total trouble debt restructure loans $ 1,024 $ 2,373 $ 3,397 December 31, 2015 Not Performing Performing to Modified to Modified Total (in thousands) Terms Terms TDRs Residential real estate (RE) - first lien Forbearance $ - $ 301 $ 301 Commercial RE - non-owner occupied Rate modification 594 2,073 2,667 Commercial loans Extension or other modification - 7 7 Consumer Extension or other modification 150 - 150 Total trouble debt restructure loans $ 744 $ 2,381 $ 3,125 There were two new commercial loans totaling $ 290 |