Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 4: Loans and Allowance for Loan Losses A summary of the major categories of loans outstanding is shown in the following tables. At June 30, 2016 Commercial Commercial Construction Residential Consumer Total (In thousands) Originated loans $ 337,619 $ 502,493 $ 2,103 $ 102,292 $ 335,687 $ 1,280,194 Purchased covered loans : Gross purchased covered loans - - - 2,280 10,497 12,777 Purchased loan discount - - - - - - Purchased non-covered loans : Gross purchased non-covered loans 13,072 98,553 160 228 29,987 142,000 Purchased loan discount (819 ) (3,453 ) - (23 ) (1,116 ) (5,411 ) Total $ 349,872 $ 597,593 $ 2,263 $ 104,777 $ 375,055 $ 1,429,560 At December 31, 2015 Commercial Commercial Construction Residential Consumer Total (In thousands) Originated loans $ 368,117 $ 517,070 $ 2,978 $ 117,631 $ 346,043 $ 1,351,839 Purchased covered loans : Gross purchased covered loans - - - 2,385 11,828 14,213 Purchased loan discount - - - (133 ) (19 ) (152 ) Purchased non-covered loans : Gross purchased non-covered loans 15,620 124,650 973 231 32,454 173,928 Purchased loan discount (989 ) (4,264 ) - (23 ) (1,156 ) (6,432 ) Total $ 382,748 $ 637,456 $ 3,951 $ 120,091 $ 389,150 $ 1,533,396 Changes in the carrying amount of impaired purchased loans were as follows: For the For the Year Ended Impaired purchased loans (In thousands) Carrying amount at the beginning of the period $ 3,887 $ 4,672 Reductions during the period (2,646 ) (785 ) Carrying amount at the end of the period $ 1,241 $ 3,887 Changes in the accretable yield for purchased loans were as follows: For the For the Accretable yield: (In thousands) Balance at the beginning of the period $ 1,259 $ 2,261 Reclassification from nonaccretable difference 1,637 3,051 Accretion (2,338 ) (4,053 ) Balance at the end of the period $ 558 $ 1,259 Accretion $ (2,338 ) $ (4,053 ) Change in FDIC indemnification 942 698 (Increase) in interest income $ (1,396 ) $ (3,355 ) The following summarizes activity in the allowance for loan losses: Allowance for Loan Losses Commercial Commercial Construction Residential Consumer Purchased Purchased Unallocated Total (In thousands) Allowance for loan losses: Balance at beginning of period $ 9,847 $ 4,237 $ 130 $ 1,707 $ 6,683 $ 950 $ - $ 5,933 $ 29,487 Additions: Provision 782 (340 ) (3 ) (106 ) 271 121 66 (791 ) - Deductions: Chargeoffs (764 ) - - - (677 ) (38 ) - - (1,479 ) Recoveries 537 15 - - 339 11 - - 902 Net loan (losses) recoveries (227 ) 15 - - (338 ) (27 ) - - (577 ) Total allowance for loan losses $ 10,402 $ 3,912 $ 127 $ 1,601 $ 6,616 $ 1,044 $ 66 $ 5,142 $ 28,910 Allowance for Loan Losses Commercial Commercial Construction Residential Consumer Purchased Purchased Unallocated Total (In thousands) Allowance for loan losses: Balance at beginning of period $ 9,559 $ 4,224 $ 177 $ 1,801 $ 7,080 $ 967 $ - $ 5,963 $ 29,771 Additions: Provision 1,996 (342 ) (50 ) (200 ) 423 (1,072 ) 66 (821 ) - Deductions: Chargeoffs (1,935 ) - - - (1,682 ) (38 ) - - (3,655 ) Recoveries 782 30 - - 795 1,187 - - 2,794 Net loan (losses) recoveries (1,153 ) 30 - - (887 ) 1,149 - - (861 ) Total allowance for loan losses $ 10,402 $ 3,912 $ 127 $ 1,601 $ 6,616 $ 1,044 $ 66 $ 5,142 $ 28,910 Allowance for Loan Losses Commercial Commercial Construction Residential Consumer Purchased Purchased Unallocated Total (In thousands) Allowance for loan losses: Balance at beginning of period $ 5,470 $ 4,123 $ 730 $ 2,140 $ 7,031 $ 2,339 $ - $ 9,354 $ 31,187 Additions: Provision 1,704 758 (327 ) (82 ) 350 (921 ) - (1,482 ) - Deductions: Chargeoffs (401 ) - - - (576 ) (396 ) - - (1,373 ) Recoveries 334 15 - - 443 222 - - 1,014 Net loan (losses) recoveries (67 ) 15 - - (133 ) (174 ) - - (359 ) Total allowance for loan losses $ 7,107 $ 4,896 $ 403 $ 2,058 $ 7,248 $ 1,244 $ - $ 7,872 $ 30,828 Allowance for Loan Losses Commercial Commercial Construction Residential Consumer Purchased Purchased Unallocated Total (In thousands) Allowance for loan losses: Balance at beginning of period $ 5,460 $ 4,245 $ 644 $ 2,241 $ 7,717 $ 2,120 $ - $ 9,058 $ 31,485 Additions: Provision 1,594 621 (241 ) (183 ) 69 (674 ) - (1,186 ) - Deductions: Chargeoffs (461 ) - - - (1,571 ) (431 ) - - (2,463 ) Recoveries 514 30 - - 1,033 229 - - 1,806 Net loan recoveries (losses) 53 30 - - (538 ) (202 ) - - (657 ) Total allowance for loan losses $ 7,107 $ 4,896 $ 403 $ 2,058 $ 7,248 $ 1,244 $ - $ 7,872 $ 30,828 [The remainder of this page intentionally left blank] The allowance for loan losses and recorded investment in loans were evaluated for impairment as follows: Allowance for Loan Losses and Recorded Investment in Loans Evaluated for Impairment At June 30, 2016 Commercial Commercial Real Estate Construction Residential Real Estate Consumer Installment and Other Purchased Non-covered Loans Purchased Covered Loans Unallocated Total (In thousands) Allowance for loan losses: Individually evaluated for impairment $ 5,283 $ 316 $ - $ - $ - $ - $ - $ - $ 5,599 Collectively evaluated for impairment 5,119 3,596 127 1,601 6,616 1,044 66 5,142 23,311 Purchased loans with evidence of credit deterioration - - - - - - - - - Total $ 10,402 $ 3,912 $ 127 $ 1,601 $ 6,616 $ 1,044 $ 66 $ 5,142 $ 28,910 Carrying value of loans: Individually evaluated for impairment $ 14,035 $ 5,375 $ - $ - $ - $ 10,198 $ - $ - $ 29,608 Collectively evaluated for impairment 323,584 497,118 2,103 102,292 335,687 125,346 12,581 - 1,398,711 Purchased loans with evidence of credit deterioration - - - - - 1,045 196 - 1,241 Total $ 337,619 $ 502,493 $ 2,103 $ 102,292 $ 335,687 $ 136,589 $ 12,777 $ - $ 1,429,560 Allowance for Loan Losses and Recorded Investment in Loans Evaluated for Impairment At December 31, 2015 Commercial Commercial Real Estate Construction Residential Real Estate Consumer Installment and Other Purchased Non-covered Loans Purchased Covered Loans Unallocated Total (In thousands) Allowance for loan losses: Individually evaluated for impairment $ 4,942 $ 585 $ - $ - $ - $ - $ - $ - $ 5,527 Collectively evaluated for impairment 4,617 3,639 177 1,801 7,080 967 - 5,963 24,244 Purchased loans with evidence of credit deterioration - - - - - - - - - Total $ 9,559 $ 4,224 $ 177 $ 1,801 $ 7,080 $ 967 $ - $ 5,963 $ 29,771 Carrying value of loans: Individually evaluated for impairment $ 12,587 $ 5,541 $ - $ - $ - $ 11,777 $ - $ - $ 29,905 Collectively evaluated for impairment 355,530 511,529 2,978 117,631 346,043 152,038 13,855 - 1,499,604 Purchased loans with evidence of credit deterioration - - - - - 3,681 206 - 3,887 Total $ 368,117 $ 517,070 $ 2,978 $ 117,631 $ 346,043 $ 167,496 $ 14,061 $ - $ 1,533,396 The Bank’s customers are small businesses, professionals and consumers. Given the scale of these borrowers, corporate credit rating agencies do not evaluate the borrowers’ financial condition. The Bank maintains a Loan Review Department which reports directly to the Board of Directors. The Loan Review Department performs independent evaluations of loans and assigns credit risk grades to evaluated loans using grading standards employed by bank regulatory agencies. Loans judged to carry lower-risk attributes are assigned a “pass” grade, with a minimal likelihood of loss. Loans judged to carry higher-risk attributes are referred to as “classified loans,” and are further disaggregated, with increasing expectations for loss recognition, as “substandard,” “doubtful,” and “loss.” Loan Review Department evaluations occur every calendar quarter. If the Bank becomes aware of deterioration in a borrower’s performance or financial condition between Loan Review Department examinations, assigned risk grades are re-evaluated promptly. Credit risk grades assigned by the Loan Review Department are subject to review by the Bank’s regulatory authorities during regulatory examinations. The following summarizes the credit risk profile by internally assigned grade: Credit Risk Profile by Internally Assigned Grade At June 30, 2016 Commercial Commercial Real Estate Construction Residential Real Estate Consumer Installment and Other Purchased Non-covered Loans Purchased Covered Loans (1) Total (In thousands) Grade: Pass $ 320,298 $ 483,433 $ 2,103 $ 99,248 $ 334,394 $ 120,779 $ 11,053 $ 1,371,308 Substandard 16,899 19,060 - 3,044 1,006 21,169 1,724 62,902 Doubtful 422 - - - 17 - - 439 Loss - - - - 270 52 - 322 Purchased loan discount - - - - - (5,411 ) - (5,411 ) Total $ 337,619 $ 502,493 $ 2,103 $ 102,292 $ 335,687 $ 136,589 $ 12,777 $ 1,429,560 (1) Credit Risk Profile by Internally Assigned Grade At December 31, 2015 Commercial Commercial Real Estate Construction Residential Real Estate Consumer Installment and Other Purchased Non-covered Loans Purchased Covered Loans (1) Total (In thousands) Grade: Pass $ 353,474 $ 496,744 $ 2,978 $ 114,525 $ 344,876 $ 149,100 $ 12,563 $ 1,474,260 Substandard 14,643 20,326 - 3,106 781 24,810 1,650 65,316 Doubtful - - - - 12 18 - 30 Loss - - - - 374 - - 374 Purchased loan discount - - - - - (6,432 ) (152 ) (6,584 ) Total $ 368,117 $ 517,070 $ 2,978 $ 117,631 $ 346,043 $ 167,496 $ 14,061 $ 1,533,396 (1) The following tables summarize loans by delinquency and nonaccrual status: Summary of Loans by Delinquency and Nonaccrual Status Current and Accruing 30-59 Days Past Due and Accruing 60-89 Days Past Due and Accruing Past Due 90 Days or More and Accruing Nonaccrual Total Loans (In thousands) Commercial $ 333,544 $ 941 $ 498 $ - $ 2,636 $ 337,619 Commercial real estate 495,851 903 208 - 5,531 502,493 Construction 2,103 - - - - 2,103 Residential real estate 99,990 1,683 315 - 304 102,292 Consumer installment and other 331,904 2,596 772 303 112 335,687 Total originated loans 1,263,392 6,123 1,793 303 8,583 1,280,194 Purchased non-covered loans 129,939 388 1,256 53 4,953 136,589 Purchased covered loans 12,727 21 - - 29 12,777 Total $ 1,406,058 $ 6,532 $ 3,049 $ 356 $ 13,565 $ 1,429,560 Summary of Loans by Delinquency and Nonaccrual Status Current and Accruing 30-59 Days Past Due and Accruing 60-89 Days Past Due and Accruing Past Due 90 Days or More and Accruing Nonaccrual Total Loans (In thousands) Commercial $ 365,450 $ 1,777 $ 122 $ - $ 768 $ 368,117 Commercial real estate 504,970 5,930 726 - 5,444 517,070 Construction 2,978 - - - - 2,978 Residential real estate 115,575 1,202 414 - 440 117,631 Consumer installment and other 341,566 3,263 919 295 - 346,043 Total originated loans 1,330,539 12,172 2,181 295 6,652 1,351,839 Purchased non-covered loans 158,554 589 7 - 8,346 167,496 Purchased covered loans 13,929 132 - - - 14,061 Total $ 1,503,022 $ 12,893 $ 2,188 $ 295 $ 14,998 $ 1,533,396 The following is a summary of the effect of nonaccrual loans on interest income: For the Three Months Ended For the Six Months Ended June 30, 2016 2015 2016 2015 (In thousands) Interest income that would have been recognized had the loans performed in accordance with their original terms $ 284 $ 342 $ 563 $ 654 Less: Interest income recognized on nonaccrual loans (271 ) (118 ) (533 ) (324 ) Total reduction of interest income $ 13 $ 224 $ 30 $ 330 There were no commitments to lend additional funds to borrowers whose loans were on nonaccrual status at June 30, 2016 and December 31, 2015. The following summarizes impaired loans: Impaired Loans Recorded Unpaid Principal Related (In thousands) Impaired loans with no related allowance recorded: Commercial $ 3,953 $ 4,042 $ - Commercial real estate 12,039 16,691 - Construction - - - Residential real estate 527 557 - Consumer installment and other 479 586 - Impaired loans with an allowance recorded: Commercial 10,501 12,009 5,283 Commercial real estate 4,510 5,527 316 Construction - - - Residential real estate - - - Consumer installment and other - - - Total: Commercial $ 14,454 $ 16,051 $ 5,283 Commercial real estate 16,549 22,218 316 Construction - - - Residential real estate 527 557 - Consumer installment and other 479 586 - Impaired Loans Recorded Unpaid Related (In thousands) Impaired loans with no related allowance recorded: Commercial $ 2,917 $ 2,979 $ - Commercial real estate 16,309 21,168 - Construction 271 271 - Residential real estate 666 697 - Consumer installment and other 350 456 - Impaired loans with an allowance recorded: Commercial 10,170 10,170 4,942 Commercial real estate 4,660 5,109 585 Construction - - - Residential real estate - - - Consumer installment and other - - - Total: Commercial $ 13,087 $ 13,149 $ 4,942 Commercial real estate 20,969 26,277 585 Construction 271 271 - Residential real estate 666 697 - Consumer installment and other 350 456 - Impaired loans include troubled debt restructured loans. Impaired loans at June 30, 2016, included $17,962 thousand of restructured loans, $10,255 thousand of which were on nonaccrual status. Impaired loans at December 31, 2015, included $15,712 thousand of restructured loans, $7,464 thousand of which were on nonaccrual status. Impaired Loans For the Three Months Ended June 30, For the Six Months Ended June 30, 2016 2015 2016 2015 Average Investment Recognized Average Investment Recognized Income Average Recognized Average Recognized (In thousands) Commercial $ 14,094 $ 135 $ 12,564 $ 147 $ 13,752 $ 268 $ 12,395 $ 293 Commercial real estate 18,639 202 19,715 147 19,744 361 19,017 404 Construction 136 - - - 203 - 459 - Residential real estate 740 5 693 8 775 9 776 14 Consumer installment and other 412 6 797 7 379 12 1,026 13 Total $ 34,021 $ 348 $ 33,769 $ 309 $ 34,853 $ 650 $ 33,673 $ 724 The following table provides information on troubled debt restructurings: Troubled Debt Restructurings Number of Pre-Modification Carrying Value Period-End Period-End Allowance ($ in thousands) Commercial 8 $ 2,817 $ 2,171 $ 174 Commercial real estate 11 17,587 15,568 316 Residential real estate 1 241 223 - Total 20 $ 20,645 $ 17,962 $ 490 Troubled Debt Restructurings Number of Pre-Modification Period-End Period-End ($ in thousands) Commercial 6 $ 3,138 $ 2,802 $ 194 Commercial real estate 10 12,927 12,684 - Residential real estate 1 242 226 - Total 17 $ 16,307 $ 15,712 $ 194 During the three and six months ended June 30, 2016, the Company modified one loan with a carrying value of $242 thousand and four loans with a total carrying value of $4,843 thousand, respectively, that were considered troubled debt restructurings. The concessions granted in the four restructurings completed in the first six months of 2016 consisted of three modifications of payment terms to extend the maturity date to allow for deferred principal repayment and under-market terms and one court order requiring under-market terms. During the three and six months ended June 30, 2015, the Company modified one loan with a carrying value of $100 thousand and six loans with an aggregate carrying value of $1,830 thousand, respectively, that were considered troubled debt restructurings. The concessions granted in the six restructurings completed in the first six months of 2015 consisted of modification of payment terms to extend the maturity date to allow for deferred principal repayment and under-market terms. During the three and six months ended June 30, 2016 and 2015, no troubled debt restructured loans defaulted. A troubled debt restructuring is considered to be in default when payments are ninety days or more past due. There were no loans restricted due to collateral requirements at June 30, 2016 and December 31, 2015. There were no loans held for sale at June 30, 2016 and December 31, 2015. At June 30, 2016 and December 31, 2015, the Company held total other real estate owned (OREO) of $4,162 thousand net of reserve of $2,534 thousand and $9,264 thousand net of reserve of $1,986 thousand, respectively, of which $-0- thousand was foreclosed residential real estate properties. The amount of consumer mortgage loans outstanding secured by residential real estate properties for which formal foreclosure proceedings were in process was $29 thousand at June 30, 2016 and $-0- thousand at December 31, 2015. |