Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 5 – LOANS RECEIVABLE Loans receivable consist of the following: March 31, December 31, 2016 2015 (in thousands) Commercial secured by real estate $ 646,346 $ 637,869 Commercial term loans 38,185 40,836 Construction 57,094 43,105 Other commercial 52,900 55,095 Residential mortgage 314,835 325,087 Home equity loans and lines of credit 71,363 71,320 Other consumer loans 981 984 Loans receivable, gross 1,181,704 1,174,296 Less: Allowance for loan losses 9,960 9,989 Deferred loan fees (284 ) (737 ) Loans receivable, net $ 1,172,028 $ 1,165,044 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 was $57,000 and $417,000 at March 31, 2016 and December 31, 2015, respectively, and is included in commercial loans secured by real estate. For those purchased loans disclosed above, the Company did not increase the allowance for loan losses for the quarter ended March 31, 2016 or for the year ended December 31, 2015. The following table summarizes activity related to the allowance for loan losses by category for the three months ended March 31, 2016: At or for the three months ended March 31, 2016 (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 $ 5,982 $ 730 $ 396 $ 1,062 $ 1,473 $ 327 $ 19 $ - $ 9,989 Charge-offs (1 ) (727 ) - (469 ) (11 ) (7 ) (112 ) - (1,327 ) Write-downs on loans transferred to HFS - - - - - - - - - Recoveries 16 - - - 53 6 7 - 82 Provision for loan losses (238 ) 760 128 551 (130 ) 3 142 - 1,216 Balance at end of year $ 5,759 $ 763 $ 524 $ 1,144 $ 1,385 $ 329 $ 56 $ - $ 9,960 Impairment evaluation Allowance for loan losses Individually evaluated $ 151 $ - $ - $ - $ 24 $ - $ - $ - $ 175 Collectively evaluated 5,608 763 524 1,144 1,361 329 56 - 9,785 PCI loans - - - - - - - - - Total allowance for loan losses $ 5,759 $ 763 $ 524 $ 1,144 $ 1,385 $ 329 $ 56 $ - $ 9,960 Loans Individually evaluated $ 6,530 $ - $ - $ - $ 3,527 $ 523 $ 2 $ - $ 10,582 Collectively evaluated 639,759 38,185 57,094 52,900 311,308 70,840 979 - 1,171,065 PCI loans 57 - - - - - - - 57 Total loans $ 646,346 $ 38,185 $ 57,094 $ 52,900 $ 314,835 $ 71,363 $ 981 $ - $ 1,181,704 (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, 2015: At or for the Year ended December 31, 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 (645 ) - - - (867 ) (111 ) (61 ) - (1,684 ) Write-downs on loans transferred to HFS (728 ) - - - - - - - (728 ) Recoveries 254 - - 7 10 49 19 - 339 Provision for loan losses 1,430 133 258 273 780 101 50 (350 ) 2,675 Balance at end of year $ 5,982 $ 730 $ 396 $ 1,062 $ 1,473 $ 327 $ 19 $ - $ 9,989 Impairment evaluation Allowance for loan losses Individually evaluated $ 158 $ - $ - $ - $ 54 $ - $ - $ - $ 212 Collectively evaluated 5,824 730 396 1,062 1,419 327 19 - 9,777 PCI loans - - - - - - - - - Total allowance for loan losses $ 5,982 $ 730 $ 396 $ 1,062 $ 1,473 $ 327 $ 19 $ - $ 9,989 Loans Individually evaluated $ 5,201 $ - $ - $ - $ 3,734 $ 459 $ - $ - $ 9,394 Collectively evaluated 632,251 40,836 43,105 55,095 321,353 70,861 984 - 1,164,485 PCI loans 417 - - - - - - - 417 Total loans $ 637,869 $ 40,836 $ 43,105 $ 55,095 $ 325,087 $ 71,320 $ 984 $ - $ 1,174,296 (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 March 31, 2015: At or for the three months ended March 31, 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 (170 ) - - - (54 ) (22 ) (7 ) - (253 ) Recoveries 19 - - - - 3 8 - 30 Provision for loan losses 299 (195 ) 9 (181 ) 53 20 (5 ) - - Balance at end of year $ 5,819 $ 402 $ 147 $ 601 $ 1,549 $ 289 $ 7 $ 350 $ 9,164 Impairment evaluation Allowance for loan losses Individually evaluated $ 304 $ - $ - $ - $ 85 $ 7 $ - $ - $ 396 Collectively evaluated 5,515 402 147 601 1,464 282 7 350 8,768 Total allowance for loan losses $ 5,819 $ 402 $ 147 $ 601 $ 1,549 $ 289 $ 7 $ 350 $ 9,164 Loans Individually evaluated $ 10,297 $ - $ - $ 303 $ 2,988 $ 299 $ - $ - $ 13,887 Collectively evaluated 420,848 24,354 17,620 30,365 229,541 44,330 525 - 767,583 Total loans $ 431,145 $ 24,354 $ 17,620 $ 30,668 $ 232,529 $ 44,629 $ 525 $ - $ 781,470 (1) includes commercial lines of credit Impaired loans at March 31, 2016 and December 31, 2015 were as follows: March 31, December 31, 2016 2015 (in thousands) Non-accrual loans (1) $ 7,215 $ 6,131 Loans delinquent greater than 90 days and still accruing 313 169 Troubled debt restructured loans 2,808 2,829 Loans less than 90 days and still accruing 246 265 PCI loans (2) 57 417 Total impaired loans $ 10,639 $ 9,811 (1) Non-accrual loans in the table above include TDRs totaling $1.0 million at March 31, 2016 and $1.1 million at December 31, 2015. For the three months ended March 31, 2016 2015 (in thousands) Average recorded investment of impaired loans $ 9,536 $ 13,362 Interest income recognized during impairment $ 46 $ 69 Cash basis interest income recognized $ - $ - At March 31, 2016, non-performing loans had a principal balance of $7.6 million compared to $6.7 million at December 31, 2015. 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 $313,000 at March 31, 2016 and $169,000 at December 31, 2015. 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: March 31, 2016 December 31, 2015 Troubled Debt Restructurings Non-accruing Accruing Total Non-accruing Accruing Total (in thousands) (in thousands) Commercial secured by real estate $ 294 $ 2,529 $ 2,823 $ 306 $ 2,545 $ 2,851 Residential mortgage 728 279 1,007 750 284 1,034 Total TDRs $ 1,022 $ 2,808 $ 3,830 $ 1,056 $ 2,829 $ 3,885 The following table presents new TDRs for the three months ended March 31, 2016 and 2015: For the three months ended March 31, 2016 For the three months ended March 31, 2015 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 Residential mortgage - - - - - - Total TDRs - $ - $ - 2 $ 2,490 $ 2,490 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 three months ended March 31, 2016 and during the year ended December 31, 2015: For the three months ended March 31, 2016 (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 - $ - - $ - - $ - - $ - - $ - - $ - Residential mortgage - - - - - - - - - - - - Total accruing TDRs - $ - - $ - - $ - - $ - - $ - - $ - Non-accruing TDRs: Commercial secured by real estate - $ - - $ - - $ - - $ - - $ - - $ - Residential mortgage - - - - - - - - - - - - Total non-accruing TDRs - $ - - $ - - $ - - $ - - $ - - $ - Total TDRs: Commercial secured by real estate - $ - - $ - - $ - - $ - - $ - - $ - Residential mortgage - - - - - - - - - - - - Total TDRs - $ - - $ - - $ - - $ - - $ - - $ - Year ended December 31, 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 The following table presents TDRs that defaulted within the quarters ended March 31, 2016 and 2015, where the loan had been modified within twelve months: For the three months ended March 31, 2016 For the three months ended March 31, 2015 Troubled Debt Restructurings That Subsequently Defaulted Number of Contracts Recorded Investment Number of Contracts Recorded Investment (dollars in thousands) Commercial secured by real estate - $ - - $ - Residential mortgage - - 1 197 Total - $ - 1 $ 197 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 March 31, 2016 and December 31, 2015 was an impairment reserve for TDRs in the amount of $175,000 and $182,000, respectively. At March 31, 2016, there are no commitments to extend additional funds to loans that are TDRs. The following table presents impaired loans at March 31, 2016: March 31, 2016 Recorded Investment (1) Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized (in thousands) Impaired loans with a related allowance Commercial secured by real estate $ 2,530 $ 2,530 $ 151 $ 2,535 $ 33 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 178 178 24 179 2 Home equity loans and lines of credit - - - - - Other consumer loans - - - - - PCI - - - - - Impaired loans with a related allowance $ 2,708 $ 2,708 $ 175 $ 2,714 $ 35 Impaired loans with no related allowance Commercial secured by real estate $ 4,000 $ 4,584 $ - $ 2,967 $ 5 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 3,349 3,972 - 3,282 4 Home equity loans and lines of credit 523 557 - 514 2 Other consumer loans 2 2 - 1 - PCI 57 130 - 58 - Impaired loans with no related allowance $ 7,931 $ 9,245 $ - $ 6,822 $ 11 Total impaired loans Commercial secured by real estate $ 6,530 $ 7,114 $ 151 $ 5,502 $ 38 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 3,527 4,150 24 3,461 6 Home equity loans and lines of credit 523 557 - 514 2 Other consumer loans 2 2 - 1 - PCI 57 130 - 58 - Total impaired loans $ 10,639 $ 11,953 $ 175 $ 9,536 $ 46 (1) 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, 2015: December 31, 2015 Recorded Investment (1) Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized (in thousands) Impaired loans with a related allowance Commercial secured by real estate $ 2,544 $ 2,544 $ 158 $ 2,423 $ 145 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 478 565 54 361 7 Home equity loans and lines of credit - - - - - Other consumer loans - - - - - PCI - - - - - Impaired loans with a related allowance $ 3,022 $ 3,109 $ 212 $ 2,784 $ 152 Impaired loans with no related allowance Commercial secured by real estate $ 2,657 $ 3,351 $ - $ 1,498 $ 22 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 3,256 3,861 - 2,353 13 Home equity loans and lines of credit 459 507 - 290 1 Other consumer loans - - - - - PCI 417 2,098 - 275 - Impaired loans with no related allowance $ 6,789 $ 9,817 $ - $ 4,416 $ 36 Total impaired loans Commercial secured by real estate $ 5,201 $ 5,895 $ 158 $ 3,921 $ 167 Commercial term loans - - - - - Construction - - - - - Other commercial - - - - - Residential mortgage 3,734 4,426 54 2,714 20 Home equity loans and lines of credit 459 507 - 290 1 Other consumer loans - - - - - PCI 417 2,098 - 275 - Total impaired loans $ 9,811 $ 12,926 $ 212 $ 7,200 $ 188 (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 March 31, 2016: March 31, 2016 30-59 Days Delinquent 60-89 Days Delinquent 90 Days or More Delinquent and Accruing Total Delinquent and Accruing Non-accrual PCI Loans (1) Current Total Loans (in thousands) Commercial secured by real estate $ 643 $ - $ - $ 643 $ 3,755 $ 57 $ 641,891 $ 646,346 Commercial term loans - - - - - - 38,185 38,185 Construction - - - - - - 57,094 57,094 Other commercial - - - - - - 52,900 52,900 Residential mortgage 1,524 392 137 2,053 3,112 - 309,670 314,835 Home equity loans and lines of credit 638 318 176 1,132 346 - 69,885 71,363 Other consumer loans 3 6 - 9 2 - 970 981 Total $ 2,808 $ 716 $ 313 $ 3,837 $ 7,215 $ 57 $ 1,170,595 $ 1,181,704 (1) all PCI loans are non-accrual The following table presents loans by past due status at December 31, 2015: December 31, 2015 30-59 Days Delinquent 60-89 Days Delinquent 90 Days or More Delinquent and Accruing Total Delinquent and Accruing Non-accrual PCI Loans (1) Current Total Loans (in thousands) Commercial secured by real estate $ 200 $ - $ - $ 200 $ 2,392 $ 417 $ 634,860 $ 637,869 Commercial term loans - - - - - 40,836 40,836 Construction - - - - - - 43,105 43,105 Other commercial - - - - - - 55,095 55,095 Residential mortgage 2,221 932 101 3,254 3,348 - 318,485 325,087 Home equity loans and lines of credit 381 150 68 599 391 - 70,330 71,320 Other consumer loans 90 4 - 94 - - 890 984 Total $ 2,892 $ 1,086 $ 169 $ 4,147 $ 6,131 $ 417 $ 1,163,601 $ 1,174,296 (1) all PCI loans are non-accrual 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 March 31, 2016 and December 31, 2015 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 March 31, 2016 and December 31, 2015 is presented in the recorded investment in nonaccrual loans. The following tables present commercial loans by credit quality indicator: Risk Ratings March 31, 2016 Grades 1-5 Grade 6 Grade 7 Grade 8 Grade 9 Grade 10 PCI Loans Total (in thousands) Commercial secured by real estate $ 633,938 $ 6,399 $ 1,097 $ 654 $ 446 $ 3,755 $ 57 $ 646,346 Commercial term loans 38,185 - - - - - - 38,185 Construction 57,094 - - - - - - 57,094 Other commercial 49,900 3,000 - - - - - 52,900 $ 779,117 $ 9,399 $ 1,097 $ 654 $ 446 $ 3,755 $ 57 $ 794,525 Risk Ratings December 31, 2015 Grades 1-5 Grade 6 Grade 7 Grade 8 Grade 9 Grade 10 PCI Loans Total (in thousands) Commercial secured by real estate $ 624,755 $ 7,398 $ 1,106 $ 657 $ 448 $ 3,088 $ 417 $ 637,869 Commercial term loans 40,004 - 832 - - - - 40,836 Construction 43,105 - - - - - - 43,105 Other commercial 53,251 - 1,844 - - - - 55,095 $ 761,115 $ 7,398 $ 3,782 $ 657 $ 448 $ 3,088 $ 417 $ 776,905 |