Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 5 – LOANS RECEIVABLE Loans receivable consist of the following: September 30, December 31, 2015 2014 (in thousands) Commercial secured by real estate $ 591,324 $ 422,194 Commercial term loans 39,945 25,366 Construction 28,347 19,399 Other commercial 55,877 33,314 Residential mortgage 335,690 234,561 Home equity loans and lines of credit 72,163 44,312 Other consumer loans 1,054 769 Loans receivable, gross 1,124,400 779,915 Less: Allowance for loan losses 10,012 9,387 Deferred loan fees (950 ) 239 Loans receivable, net $ 1,115,338 $ 770,289 Purchase Credit Impaired Loans The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is as follows at September 30, 2015 and December 31, 2014. September 30, December 31, 2015 2014 (in thousands) Commercial secured by real estate $ 451 $ - Commercial term loans - - Construction - - Other commercial - - Residential mortgage - - Home equity loans and lines of credit - - Other consumer loans - - Total carrying amount $ 451 $ - For those purchased loans disclosed above, the Company did not increase the allowance for loan losses for the nine months ended September 30, 2015. There were no purchased impaired loans in the 2014 period. The table above excludes three loans that were purchase credit impaired at April 1, 2015 that subsequently paid off or were moved to other real estate owned. The accretable yield, or income expected to be collected, on the purchased impaired loans above is as follows at September 30, 2015: For the three months ended For the nine months ended September 30, 2015 September 30, 2015 Accretable yield, beginning balance $ 111 $ - Acquisition of impaired loans - 163 Accretion of income (16 ) (68 ) Reclassifications from non-accretable difference - - Disposals - - Accretable yield, end of period $ 95 $ 95 The following table summarizes activity related to the allowance for loan losses by category for the three months ended September 30, 2015: At or for the three months ended September 30, 2015 (in thousands) Commercial Secured by Real Estate Commercial Term Loans Construction Other Commercial (1) Residential Mortgage Home Equity & Lines of Credit Other Consumer Unallocated Total Balance at beginning of period $ 6,602 $ 536 $ 208 $ 1,006 $ 1,649 $ 300 $ 12 $ - $ 10,313 Charge-offs (224 ) - - - (600 ) - (15 ) - (839 ) Write-downs on loans transferred to HFS - - - - - - - - - Recoveries 27 - - 1 6 39 3 - 76 Provision for loan losses (90 ) 88 70 (90 ) 482 (10 ) 12 - 462 Balance at end of period $ 6,315 $ 624 $ 278 $ 917 $ 1,537 $ 329 $ 12 $ - $ 10,012 Impairment evaluation Allowance for loan losses Individually evaluated $ 156 $ - $ - $ - $ 55 $ - $ - $ - $ 211 Collectively evaluated 6,159 624 278 917 1,482 329 12 - 9,801 PCI loans - - - - - - - - - Total allowance for loan losses $ 6,315 $ 624 $ 278 $ 917 $ 1,537 $ 329 $ 12 $ - $ 10,012 Loans Individually evaluated $ 7,854 $ - $ - $ - $ 4,021 $ 425 $ - $ - $ 12,300 Collectively evaluated 583,019 39,945 28,347 55,877 331,669 71,738 1,054 - 1,111,649 PCI loans 451 - - - - - - - 451 Total loans $ 591,324 $ 39,945 $ 28,347 $ 55,877 $ 335,690 $ 72,163 $ 1,054 $ - $ 1,124,400 (1) includes commercial lines of credit On April 1, 2015, the Bank transferred $441,000, net of $728,000 in write-downs, from loans to loans held for sale. During the first quarter of 2014, the Bank transferred $5.3 million of classified commercial loans to loans held for sale. The loans were written-down $1.8 million to the value of the collateral supporting the loans, as the Bank was pursuing the sale of these assets. These assets were sold during the second quarter of 2014 and, as a result, the Bank recorded an additional $16,000 write-down on these assets in the second quarter of 2014. The following table summarizes activity related to the allowance for loan losses by category for the nine months ended September 30, 2015: At or for the nine months ended September 30, 2015 (in thousands) Commercial Secured by Real Estate Commercial Term Loans Construction Other Commercial (1) Residential Mortgage Home Equity & Lines of Credit Other Consumer Unallocated Total Balance at beginning of year $ 5,671 $ 597 $ 138 $ 782 $ 1,550 $ 288 $ 11 $ 350 $ 9,387 Charge-offs (570 ) - - - (743 ) (111 ) (39 ) - (1,463 ) Write-downs on loans transferred to HFS (728 ) - - - - - - - (728 ) Recoveries 64 - - 8 5 47 17 - 141 Provision for loan losses 1,878 27 140 127 725 105 23 (350 ) 2,675 Balance at end of period $ 6,315 $ 624 $ 278 $ 917 $ 1,537 $ 329 $ 12 $ - $ 10,012 Impairment evaluation Allowance for loan losses Individually evaluated $ 156 $ - $ - $ - $ 55 $ - $ - $ - $ 211 Collectively evaluated 6,159 624 278 917 1,482 329 12 - 9,801 PCI loans - - - - - - - - - Total allowance for loan losses $ 6,315 $ 624 $ 278 $ 917 $ 1,537 $ 329 $ 12 $ - $ 10,012 Loans Individually evaluated $ 7,854 $ - $ - $ - $ 4,021 $ 425 $ - $ - $ 12,300 Collectively evaluated 583,019 39,945 28,347 55,877 331,669 71,738 1,054 - 1,111,649 PCI loans 451 - - - - - - - 451 Total loans $ 591,324 $ 39,945 $ 28,347 $ 55,877 $ 335,690 $ 72,163 $ 1,054 $ - $ 1,124,400 (1) includes commercial lines of credit The following table summarizes activity related to the allowance for loan losses by category for the year ended December 31, 2014: At or for the Year ended December 31, 2014 (in thousands) Commercial Secured by Real Estate Commercial Term Loans Construction Other Commercial (1) Residential Mortgage Home Equity & Lines of Credit Other Consumer Unallocated Total Balance at beginning of period $ 6,554 $ 420 $ 227 $ 600 $ 865 $ 160 $ 4 $ 500 $ 9,330 Charge-offs (1,276 ) - - - (107 ) (100 ) (63 ) - (1,546 ) Write-downs on loans transferred to HFS - (825 ) - (965 ) - - - - (1,790 ) Recoveries 299 - - - 50 3 27 - 379 Provision for loan losses 94 1,002 (89 ) 1,147 742 225 43 (150 ) 3,014 Balance at end of period $ 5,671 $ 597 $ 138 $ 782 $ 1,550 $ 288 $ 11 $ 350 $ 9,387 Impairment evaluation Allowance for loan losses Individually evaluated $ 271 $ - $ - $ - $ 26 $ - $ - $ - $ 297 Collectively evaluated 5,400 597 138 782 1,524 288 11 350 9,090 Total allowance for loan losses $ 5,671 $ 597 $ 138 $ 782 $ 1,550 $ 288 $ 11 $ 350 $ 9,387 Loans Individually evaluated $ 10,447 $ - $ - $ 303 $ 2,301 $ 400 $ - $ - $ 13,451 Collectively evaluated 411,747 25,366 19,399 33,011 232,260 43,912 769 - 766,464 Total loans $ 422,194 $ 25,366 $ 19,399 $ 33,314 $ 234,561 $ 44,312 $ 769 $ - $ 779,915 (1) includes commercial lines of credit The following table summarizes activity related to the allowance for loan losses by category for the three months ended September 30, 2014: At or for the three months ended September 30, 2014 (in thousands) Commercial Secured by Real Estate Commercial Term Loans Construction Other Commercial (1) Residential Mortgage Home Equity & Lines of Credit Other Consumer Unallocated Total Balance at beginning of period $ 6,958 $ 343 $ 118 $ 683 $ 996 $ 174 $ 8 $ 450 $ 9,730 Charge-offs (85 ) - - - - (5 ) (13 ) - (103 ) Write-downs on loans transferred to HFS - - - - - - - - - Recoveries 14 - - - - - 5 - 19 Provision for loan losses (180 ) 23 5 60 184 48 13 — 153 Balance at end of period $ 6,707 $ 366 $ 123 $ 743 $ 1,180 $ 217 $ 13 $ 450 $ 9,799 Impairment evaluation Allowance for loan losses Individually evaluated $ 169 $ - $ - $ - $ 27 $ - $ - $ - $ 196 Collectively evaluated 6,538 366 123 743 1,153 217 13 450 9,603 Total allowance for loan losses $ 6,707 $ 366 $ 123 $ 743 $ 1,180 $ 217 $ 13 $ 450 $ 9,799 Loans Individually evaluated $ 9,903 $ - $ - $ 303 $ 2,085 $ 547 $ - $ - $ 12,838 Collectively evaluated 417,184 19,346 18,614 39,196 230,911 43,550 911 - 769,712 Total loans $ 427,087 $ 19,346 $ 18,614 $ 39,499 $ 232,996 $ 44,097 $ 911 $ - $ 782,550 (1) includes commercial lines of credit The following table summarizes activity related to the allowance for loan losses by category for the nine months ended September 30, 2014: At or for the nine months ended September 30, 2014 (in thousands) Commercial Secured by Real Estate Commercial Term Loans Construction Other Commercial (1) Residential Mortgage Home Equity & Lines of Credit Other Consumer Unallocated Total Balance at beginning of year $ 6,554 $ 420 $ 227 $ 600 $ 865 $ 160 $ 4 $ 500 $ 9,330 Charge-offs (360 ) - - - (11 ) (92 ) (57 ) - (520 ) Write-downs on loans transferred to HFS - (825 ) - (965 ) - - - - (1,790 ) Recoveries 276 - - - - 1 22 - 299 Provision for loan losses 237 771 (104 ) 1,108 326 148 44 (50 ) 2,480 Balance at end of period $ 6,707 $ 366 $ 123 $ 743 $ 1,180 $ 217 $ 13 $ 450 $ 9,799 Impairment evaluation Allowance for loan losses Individually evaluated $ 169 $ - $ - $ - $ 27 $ - $ - $ - $ 196 Collectively evaluated 6,538 366 123 743 1,153 217 13 450 9,603 Total allowance for loan losses $ 6,707 $ 366 $ 123 $ 743 $ 1,180 $ 217 $ 13 $ 450 $ 9,799 Loans Individually evaluated $ 9,903 $ - $ - $ 303 $ 2,085 $ 547 $ - $ - $ 12,838 Collectively evaluated 417,184 19,346 18,614 39,196 230,911 43,550 911 - 769,712 Total loans $ 427,087 $ 19,346 $ 18,614 $ 39,499 $ 232,996 $ 44,097 $ 911 $ - $ 782,550 (1) includes commercial lines of credit Impaired loans at September 30, 2015 and December 31, 2014 were as follows: September 30, December 31, 2015 2014 (in thousands) Non-accrual loans (1) $ 8,827 $ 7,857 Loans delinquent greater than 90 days and still accruing 168 401 Troubled debt restructured loans 3,021 4,855 Loans less than 90 days and still accruing 284 338 PCI loans (2) 451 - Total impaired loans $ 12,751 $ 13,451 (1) Non-accrual loans in the table above include TDRs totaling $1.2 million at September 30, 2015 and $819,000 at December 31, 2014. (2) All PCI loans are non-accrual. For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 (in thousands) (in thousands) Average recorded investment of impaired loans $ 12,745 $ 11,794 $ 9,848 $ 11,121 Interest income recognized during impairment $ 58 $ 86 $ 152 $ 244 Cash basis interest income recognized $ - $ - $ - $ - At September 30, 2015, non-performing loans had a principal balance of $9.4 million compared to $8.3 million at December 31, 2014. Loan balances past due 90 days or more and still accruing interest, but which management expects will eventually be paid in full, amounted to approximately $168,000 at September 30, 2015 and $401,000 at December 31, 2014. Impaired loans include loans whose contractual terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. In accordance with applicable accounting guidance (FASB ASC 310-40), these modified loans are considered TDRs. See Note 2 Notes to Consolidated Financial Statements The following table provides a summary of TDRs by performing status: September 30, 2015 December 31, 2014 Troubled Debt Restructurings Non-accruing Accruing Total Non-accruing Accruing Total (in thousands) (in thousands) Commercial secured by real estate $ 319 $ 2,559 $ 2,878 $ 733 $ 3,471 $ 4,204 Residential mortgage 844 462 1,306 86 1,384 1,470 Total TDRs $ 1,163 $ 3,021 $ 4,184 $ 819 $ 4,855 $ 5,674 The following table presents new TDRs for the three and nine months ended September 30, 2015 and 2014: For the three months ended September 30, 2015 For the three months ended September 30, 2014 Troubled Debt Restructurings Number of Contracts Pre-Modification Recorded Investment Post-Modification Recorded Investment Number of Contracts Pre-Modification Recorded Investment Post-Modification Recorded Investment (dollars in thousands) Commercial secured by real estate - $ - $ - 3 $ 1,199 $ 1,197 Residential mortgage - - - 2 287 287 Total TDRs - $ - $ - 5 $ 1,486 $ 1,484 For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 Troubled Debt Restructurings Number of Contracts Pre-Modification Recorded Investment Post-Modification Recorded Investment Number of Contracts Pre-Modification Recorded Investment Post-Modification Recorded Investment (dollars in thousands) Commercial secured by real estate 2 $ 2,490 $ 2,490 4 $ 3,377 $ 3,367 Residential mortgage 1 76 76 4 1,066 1,066 Total TDRs 3 $ 2,566 $ 2,566 8 $ 4,443 $ 4,433 The following tables present, by class of loans, information regarding the types of concessions granted on accruing and non-accruing loans that were restructured during the nine months ended September 30, 2015 and during the year ended December 31, 2014: For the nine months ended September 30, 2015 (dollars in thousands) Reductions in Interest Rate and Maturity Date Reductions in Interest Rate and Principal Amount Maturity Date Extension Maturity Date Extension and Interest Rate Reduction Deferral of Principal Amount Due and Shortened Maturity Date Total Concessions Granted No. of Loans Amount No. of Loans Amount No. of Loans Amount No. of Loans Amount No. of Loans Amount No. of Loans Amount Accruing TDRs: Commercial secured by real estate - $ - - $ - - $ - 2 $ 2,490 - $ - 2 $ 2,490 Residential mortgage - - - - 1 76 - - - - 1 76 Total accruing TDRs - $ - - $ - 1 $ 76 2 $ 2,490 - $ - 3 $ 2,566 Non-accruing TDRs: Commercial secured by real estate - $ - - $ - - $ - - $ - - $ - - $ - Residential mortgage - - - - - - - - - - - - Total non-accruing TDRs - $ - - $ - - $ - - $ - - $ - - $ - Total TDRs: Commercial secured by real estate - $ - - $ - - $ - 2 $ 2,490 - $ - 2 $ 2,490 Residential mortgage - - - - 1 76 - - - - 1 76 Total TDRs - $ - - $ - 1 $ 76 2 $ 2,490 - $ - 3 $ 2,566 Year ended December 31, 2014 (dollars in thousands) Reductions in Interest Rate and Maturity Date Reductions in Interest Rate and Principal Amount Maturity Date Extension Maturity Date Extension and Interest Rate Reduction Deferral of Principal Amount Due and Shortened Maturity Date Total Concessions Granted Loans Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans Amount Accruing TDRs: Commercial secured by real estate 3 $ 1,197 - $ - 1 $ 45 1 $ 2,170 - $ - 5 $ 3,412 Residential mortgage - - - - 2 779 - - 1 200 3 979 Total accruing TDRs 3 $ 1,197 - $ - 3 $ 824 1 $ 2,170 1 $ 200 8 $ 4,391 Non-accruing TDRs: Commercial secured by real estate - $ - - $ - - $ - - $ - - $ - - $ - Residential mortgage - - - - - - - - 1 87 1 87 Total non-accruing TDRs - $ - - $ - - $ - - $ - 1 $ 87 1 $ 87 Total TDRs: Commercial secured by real estate 3 $ 1,197 - $ - 1 $ 45 1 $ 2,170 - $ - 5 $ 3,412 Residential mortgage - - - - 2 779 - - 2 287 4 1,066 Total TDRs 3 $ 1,197 - $ - 3 $ 824 1 $ 2,170 2 $ 287 9 $ 4,478 The following table presents TDRs that defaulted within the nine months ended September 30, 2015 and 2014, where the loan had been modified within twelve months: For the nine months ended September 30, 2015 For the nine months ended September 30, 2014 Troubled Debt Restructurings That Subsequently Defaulted Number of Contracts Recorded Investment Number of Contracts Recorded Investment (dollars in thousands) Commercial secured by real estate 1 $ 40 - $ - Residential mortgage 2 273 - - Total 3 $ 313 - $ - A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. Some loan modifications classified as TDRs may not ultimately result in the full collection of principal and interest, as modified, and may result in potential incremental losses. These potential incremental losses have been factored into our overall allowance for loan losses estimate. The level of any re-defaults will likely be affected by future economic conditions. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is repaid in full, reclassified to loans held for sale, foreclosed, sold or it meets the criteria to be removed from TDR status. Included in the allowance for loan losses at September 30, 2015 and December 31, 2014 was an impairment reserve for TDRs in the amount of $181,000 and $192,000, respectively. At September 30, 2015, there are no commitments to extend additional funds to loans that are TDRs. The following table presents impaired loans at September 30, 2015: September 30, 2015 (1) Recorded Investment (2) Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized (in thousands) Impaired loans with a related allowance Commercial secured by real estate $ 2,559 $ 2,559 $ 156 $ 2,380 $ 111 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 481 568 55 321 6 Home equity loans and lines of credit - - - - - Other consumer loans - - - - - PCI - - - - - Impaired loans with a related allowance $ 3,040 $ 3,127 $ 211 $ 2,701 $ 117 Impaired loans with no related allowance Commercial secured by real estate $ 5,295 $ 6,486 $ - $ 4,145 $ 17 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 3,540 4,058 - 2,478 17 Home equity loans and lines of credit 425 464 - 300 1 Other consumer loans - - - - - PCI 451 2,116 - 224 - Impaired loans with no related allowance $ 9,711 $ 13,124 $ - $ 7,147 $ 35 Total impaired loans Commercial secured by real estate $ 7,854 $ 9,045 $ 156 $ 6,525 $ 128 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 4,021 4,626 55 2,799 23 Home equity loans and lines of credit 425 464 - 300 1 Other consumer loans - - - - - PCI 451 2,116 - 224 - Total impaired loans $ 12,751 $ 16,251 $ 211 $ 9,848 $ 152 (1) excludes HFS non-accruing loans of $428,000. (2) the difference between the recorded investment and unpaid principal balance primarily results from partial charge-offs. The following table presents impaired loans at December 31, 2014: December 31, 2014 (1) Recorded Investment (2) Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized (in thousands) Impaired loans with a related allowance Commercial secured by real estate $ 4,432 $ 4,938 $ 271 $ 3,679 $ 160 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 193 193 26 198 7 Home equity loans and lines of credit - - - - - Other consumer loans - - - - - Impaired loans with a related allowance $ 4,625 $ 5,131 $ 297 $ 3,877 $ 167 Impaired loans with no related allowance Commercial secured by real estate $ 6,015 $ 7,781 $ - $ 4,682 $ 64 Commercial term loans - - - - - Construction - - - - - Other commercial 303 376 - 303 - Residential mortgage 2,108 2,233 - 1,644 86 Home equity loans and lines of credit 400 507 - 354 4 Other consumer loans - - - - - Impaired loans with no related allowance $ 8,826 $ 10,897 $ - $ 6,983 $ 154 Total impaired loans Commercial secured by real estate $ 10,447 $ 12,719 $ 271 $ 8,361 $ 224 Commercial term loans - - - - - Construction - - - - - Other commercial 303 376 - 303 - Residential mortgage 2,301 2,426 26 1,842 93 Home equity loans and lines of credit 400 507 - 354 4 Other consumer loans - - - - - Total impaired loans $ 13,451 $ 16,028 $ 297 $ 10,860 $ 321 (1) the difference between the recorded investment and unpaid principal balance primarily results from partial charge-offs. The following table presents loans by past due status at September 30, 2015: September 30, 2015 30-59 Days Delinquent 60-89 Days Delinquent 90 Days or More Delinquent and Accruing Total Delinquent and Accruing Non- accrual (1) PCI Loans (2) Current Total Loans (in thousands) Commercial secured by real estate $ 743 $ - $ - $ 743 $ 5,012 $ 451 $ 585,118 $ 591,324 Commercial term loans - - - - - - 39,945 39,945 Construction - - - - - - 28,347 28,347 Other commercial - - - - - - 55,877 55,877 Residential mortgage 1,534 262 147 1,943 3,411 - 330,336 335,690 Home equity loans and lines of credit 400 26 21 447 404 - 71,312 72,163 Other consumer loans - 17 - 17 - - 1,037 1,054 Total $ 2,677 $ 305 $ 168 $ 3,150 $ 8,827 $ 451 $ 1,111,972 $ 1,124,400 (1) excludes HFS non-accruing loans of $428,000. (2) All PCI loans are non-accrual The following table presents loans by past due status at December 31, 2014: December 31, 2014 30-59 Days Delinquent 60-89 Days Delinquent 90 Days or More Delinquent and Accruing Total Delinquent and Accruing Non- accrual PCI Loans Current Total Loans (in thousands) Commercial secured by real estate $ 769 $ 402 $ - $ 1,171 $ 6,638 $ - $ 414,385 $ 422,194 Commercial term loans - - - - - - 25,366 25,366 Construction - - - - - - 19,399 19,399 Other commercial - - - - 303 - 33,011 33,314 Residential mortgage 2,047 253 171 2,471 745 - 231,345 234,561 Home equity loans and lines of credit 244 182 230 656 171 - 43,485 44,312 Other consumer loans - - - - - - 769 769 Total $ 3,060 $ 837 $ 401 $ 4,298 $ 7,857 $ - $ 767,760 $ 779,915 The Company categorizes loans, when the loan is initially underwritten, into risk categories based on relevant information about the ability of borrowers to service their debt. The assessment considers numerous factors including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. Annually, this analysis includes loans with an outstanding balance greater than $250,000 and non-homogeneous loans, such as commercial and commercial real estate loans. The Company uses the following definitions for risk ratings: Risk Rating 1-5—Acceptable credit quality ranging from High Pass (cash or near cash as collateral) to Management Attention/Pass (acceptable risk) with some deficiency in one or more of the following areas: management experience, debt service coverage levels, balance sheet leverage, earnings trends, the industry of the borrower and annual receipt of current borrower financial information. Risk Rating 6— Special Mention reflects loans that management believes warrant special consideration and may be loans that are delinquent or current in their payments. These loans have potential weakness which increases their risk to the bank and have shown some signs of weakness but have fallen short of being a Substandard loan. Management believes that the Substandard category is best considered in four discrete classes: RR 7; RR 8; RR 9; and RR 10. Risk Rating 7—The class is mostly populated by customers that have a history of repayment (less than 2 delinquencies in the past year) but exhibit a well-defined weakness. Risk Rating 8—These are loans that share many of the characteristics of the RR 7 loans as they relate to cash flow and/or collateral, but have the further negative of chronic delinquencies. These loans have not yet declined in quality to require a FASB ASC Topic No. 310 Receivables analysis, but nonetheless this class has a greater likelihood of migration to a more negative risk rating. Risk Rating 9—These loans are impaired loans, are current and accruing, and in some cases are TDRs. They have had a FASB ASC Topic No. 310 Receivables analysis completed. Risk Rating 10—These loans have undergone a FASB ASC Topic No. 310 Receivables analysis. For those that have a FASB ASC Topic No. 310 Receivables analysis, no general reserve is allowed. More often than not, those loans in this class with specific reserves have had the reserve placed by Management pending information to complete a FASB ASC Topic No. 310 Receivables analysis. Upon completion of the FASB ASC Topic No. 310 Receivables analysis reserves are adjusted or charged-off. For homogeneous loan pools, such as residential mortgages, home equity lines of credit and term loans, and other consumer loans, the Company uses payment status to identify the credit risk in these loan portfolios. Payment status is reviewed on a daily basis by the Bank’s collection area and on a monthly basis with respect to determining the adequacy of the allowance for loan losses. The payment status of these homogeneous pools at September 30, 2015 and December 31, 2014 is included in the aging of the recorded investment of past due loans table. In addition, the total non-performing portion of these homogeneous loan pools at September 30, 2015 and December 31, 2014 is presented in the recorded investment in nonaccrual loans. The following tables present commercial loans by credit quality indicator: Risk Ratings September 30, 2015 Grades 1-5 Grade 6 Grade 7 Grade 8 Grade 9 Grade 10 PCI Loans Total (in thousands) Commercial secured by real estate $ 575,965 $ 5,859 $ 1,115 $ 1,765 $ 449 $ 5,720 $ 451 $ 591,324 Commercial term loans 39,008 937 - - - - - 39,945 Construction 28,347 - - - - - - 28,347 Other commercial 54,022 1,855 - - - - - 55,877 $ 697,342 $ 8,651 $ 1,115 $ 1,765 $ 449 $ 5,720 $ 451 $ 715,493 Risk Ratings December 31, 2014 Grades 1-5 Grade 6 Grade 7 Grade 8 Grade 9 Grade 10 PCI Loans Total (in thousands) Commercial secured by real estate $ 406,006 $ 5,021 $ 2,142 $ 1,055 $ 1,332 $ 6,638 $ - $ 422,194 Commercial term loans 25,211 155 - - - - - 25,366 Construction 19,399 - - - - - - 19,399 Other commercial 31,972 1,039 - - - 303 - 33,314 $ 482,588 $ 6,215 $ 2,142 $ 1,055 $ 1,332 $ 6,941 $ - $ 500,273 |