Allowance for Credit Losses [Text Block] | Note 4: Credit Quality Assessment Allowance for Credit Losses June 30, 2017 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 $ 511 $ 454 $ 89 $ 327 $ 1,120 $ 3,800 $ 127 $ 6,428 Charge-offs - (132) (31) - - (1,366) (108) (1,637) Recoveries - - 1 - 3 28 22 54 Provision for credit losses 51 221 52 74 53 28 61 540 Ending balance $ 562 $ 543 $ 111 $ 401 $ 1,176 $ 2,490 $ 102 $ 5,385 Three months ended: Beginning balance $ 534 $ 504 $ 99 $ 395 $ 1,098 $ 2,661 $ 69 $ 5,360 Charge-offs - (82) (8) - - (254) - (344) Recoveries - - 1 - 2 16 10 29 Provision for credit losses 28 121 19 6 76 67 23 340 Ending balance $ 562 $ 543 $ 111 $ 401 $ 1,176 $ 2,490 $ 102 $ 5,385 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 The following table provides additional information on the allowance for credit losses at June 30, 2017 and December 31, 2016: June 30, 2017 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: individually evaluated for impairment $ - $ 6 $ - $ - $ - $ 538 $ - $ 544 collectively evaluated for impairment 562 537 111 401 1,176 1,952 102 4,841 Loans: Ending balance $ 82,966 $ 196,392 $ 38,873 $ 154,584 $ 219,263 $ 183,537 $ 4,522 $ 880,137 individually evaluated for impairment 125 1,795 196 508 3,660 3,118 - 9,402 collectively evaluated for impairment 82,841 194,597 38,677 154,076 215,603 180,419 4,522 870,735 December 31, 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: individually evaluated for impairment $ - $ 7 $ - $ - $ - $ 2,076 $ 72 $ 2,155 collectively evaluated for impairment 511 447 89 327 1,120 1,724 55 4,273 Loans: Ending balance $ 72,973 $ 195,032 $ 35,009 $ 134,213 $ 216,781 $ 162,715 $ 4,801 $ 821,524 individually evaluated for impairment 125 785 37 509 3,148 5,142 167 9,913 collectively evaluated for impairment 72,848 194,247 34,972 133,704 213,633 157,573 4,634 811,611 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 Bank’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, 2017 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: Not classified $ 82,966 $ 194,605 $ 38,677 $ 154,076 $ 215,513 $ 179,517 $ 4,522 $ 869,876 Special mention - - - - - - - - Substandard - 1,549 196 508 3,750 2,804 - 8,807 Doubtful - 238 - - - 1,216 - 1,454 Total $ 82,966 $ 196,392 $ 38,873 $ 154,584 $ 219,263 $ 183,537 $ 4,522 $ 880,137 December 31, 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: Not classified $ 72,973 $ 193,748 $ 34,972 $ 133,704 $ 212,765 $ 157,567 $ 4,634 $ 810,363 Special mention - - - - - 524 - 524 Substandard - 793 - - 2,941 - - 3,734 Doubtful - 491 37 509 1,075 4,624 167 6,903 Total $ 72,973 $ 195,032 $ 35,009 $ 134,213 $ 216,781 $ 162,715 $ 4,801 $ 821,524 ⋅ 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. June 30, 2017 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: Accruing loans current $ 82,966 $ 194,181 $ 38,509 $ 154,076 $ 215,603 $ 179,658 $ 4,521 $ 869,514 Accruing loans past due: 31-59 days past due - 240 168 - - 223 - 631 60-89 days past due - 390 - - - 789 1 1,180 Greater than 90 days past due - 77 - - - - - 77 Total past due - 707 168 - - 1,012 1 1,888 Non-accrual loans - 1,504 196 508 3,660 2,867 - 8,735 Total loans $ 82,966 $ 196,392 $ 38,873 $ 154,584 $ 219,263 $ 183,537 $ 4,522 $ 880,137 December 31, 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: Accruing loans current $ 72,775 $ 191,216 $ 34,634 $ 133,638 $ 212,537 $ 157,464 $ 4,631 $ 806,895 Accruing loans past due: 31-59 days past due - 2,653 334 66 466 593 1 4,113 60-89 days past due 197 374 4 - - 34 1 610 Greater than 90 days past due 1 298 - - 2,703 - 1 3,003 Total past due 198 3,325 338 66 3,169 627 3 7,726 Non-accrual loans - 491 37 509 1,075 4,624 167 6,903 Total loans $ 72,973 $ 195,032 $ 35,009 $ 134,213 $ 216,781 $ 162,715 $ 4,801 $ 821,524 Total loans either in non-accrual status or in excess of 90 days delinquent and still accruing totaled $ 8.8 1.0 9.9 1.2 June 30, 2017 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: Recorded investment $ 125 $ 1,795 $ 196 $ 508 $ 3,660 $ 3,118 $ - $ 9,402 With an allowance recorded - 210 - - - 1,582 - 1,792 With no related allowance recorded 125 1,585 196 508 3,660 1,536 - 7,610 Related allowance - 6 - - - 538 - 544 Unpaid principal 125 1,835 196 509 3,677 4,729 - 11,071 Six months ended: Average balance of impaired loans 125 1,870 196 519 3,681 5,335 - 11,726 Interest income recognized 3 15 3 - 39 55 - 115 Three months ended: Average balance of impaired loans 125 1,866 196 519 3,679 5,881 - 12,266 Interest income recognized 2 8 - - 1 25 - 36 December 31, 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: Recorded investment $ 125 $ 785 $ 37 $ 509 $ 3,148 $ 5,142 $ 167 $ 9,913 With an allowance recorded - 214 - - - 3,477 140 3,831 With no related allowance recorded 125 571 37 509 3,148 1,665 27 6,082 Related allowance - 7 - - - 2,076 72 2,155 Unpaid principal 125 1,323 38 509 3,286 5,694 174 11,149 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: Six months ended: Average balance of impaired loans $ - $ 696 $ - $ 637 $ 3,596 $ 12,063 $ 148 $ 17,140 Interest income recognized - 20 - - 8 177 1 206 Three months ended: Average balance of impaired loans $ - $ 695 $ - $ 634 $ 3,592 $ 11,927 $ 147 $ 16,995 Interest income recognized - 16 - - 8 99 1 124 Included in the total impaired loans above were non-accrual loans of $8.7 million and $6.9 million at June 30, 2017 and December 31, 2016, respectively. Interest income that would have been recorded if non-accrual loans had been current and in accordance with their original terms was $258 thousand and $252 thousand for the first six months of 2017 and 2016, respectively. June 30, 2017 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 Acquired Impaired Loans: Substandard Contractual payment receivable $ - $ - $ - $ - $ 459 $ 996 $ - $ 1,455 Non-Accretable adjustment - - - - - 434 - 434 Cash flow expected - - - - 459 562 - 1,021 Accretable yield - - - - 17 7 - 24 Loan receivable $ - $ - $ - $ - $ 442 $ 555 $ - $ 997 Doubtful Contractual payment receivable $ - $ - $ - $ - $ - $ 38 $ - $ 38 Non-Accretable adjustment - - - - - 38 - 38 Cash flow expected - - - - - - - - Accretable yield - - - - - - - - Loan receivable $ - $ - $ - $ - $ - $ - $ - $ - December 31, 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 Acquired Impaired Loans: Substandard Contractual payment receivable $ - $ - $ - $ - $ 466 $ - $ - $ 466 Non-Accretable adjustment - - - - - - - - Cash flow expected - - - - 466 - - 466 Accretable yield - - - - 18 - - 18 Loan receivable $ - $ - $ - $ - $ 448 $ - $ - $ 448 Doubtful Contractual payment receivable $ - $ - $ - $ - $ 619 $ 1,777 $ - $ 2,396 Non-Accretable adjustment - - - - 125 486 - 611 Cash flow expected - - - - 494 1,291 - 1,785 Accretable yield - - - - 13 65 - 78 Loan receivable $ - $ - $ - $ - $ 481 $ 1,226 $ - $ 1,707 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, 2017 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Construction and land - $ - 1 $ 125 $ 125 Residential real estate - first lien 1 210 1 291 501 Commercial - non-owner occupied 2 2,667 - - 2,667 Commercial loans and leases 1 514 1 156 670 4 $ 3,391 3 $ 572 $ 3,963 December 31, 2016 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Construction and land - $ - 1 $ 125 $ 125 Residential real estate - first lien 1 214 1 294 508 Commercial - non-owner occupied 1 594 1 2,073 2,667 Commercial loans and leases 1 913 1 183 1,096 Consumer 1 140 - - 140 4 $ 1,861 4 $ 2,675 $ 4,536 June 30, 2017 Not Performing Performing Related to Modified to Modified Total (in thousands) Allowance Terms Terms TDRs Construction and land Extension or other modification $ - $ - $ 125 $ 125 Residential real estate - first lien Extension or other modification 6 210 291 501 Commercial RE - non-owner occupied Rate modification - 2,667 - 2,667 Commercial loans Forbearance - 514 156 670 Total troubled debt restructure loans $ 6 $ 3,391 $ 572 $ 3,963 December 31, 2016 Not Performing Performing Related to Modified to Modified Total (in thousands) Allowance Terms Terms TDRs Construction and land Extension or other modification $ - $ - $ 125 $ 125 Residential real estate - first lien Extension or other modification 7 214 294 508 Commercial RE - non-owner occupied Rate modification - 594 2,073 2,667 Commercial loans Extension or other modification 913 913 183 1,096 Consumer Extension or other modification 72 140 - 140 Total troubled debt restructure loans $ 992 $ 1,861 $ 2,675 $ 4,536 There were no new loans restructured during the six months ended June 30, 2017, however, there were four loans totaling $ 1.4 · One commercial loan in the amount of $ 183 · One land development loan in the amount of $ 125 · One residential first lien mortgage in the amount of $ 214 · A $ 913 As a part of the modification of the land development loan restructured during 2016, the Bank agreed to forgive $ 215 340 125 Performing TDRs were in compliance with their modified terms and there are no further commitments associated with these loans. During the six months ended June 30, 2017 there were no TDRs that subsequently defaulted within twelve months of their modification dates. There was one consumer loan restructured in 2015 in the amount of $ 150 96 83 19 458 |