Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 4. Outstanding loan balances consisted of the following at March 31, 2019, December 31, 2018. (Amounts in thousands) March 31, December 31, Loan Portfolio 2019 2018 Commercial $ 149,575 $ 135,543 Commercial real estate: Real estate - construction and land development 30,335 22,563 Real estate - commercial non-owner occupied 469,048 433,708 Real estate - commercial owner occupied 209,099 204,622 Residential real estate: Real estate - residential - Individual Tax Identification Number (“ITIN”) 36,145 37,446 Real estate - residential - 1-4 family mortgage 68,092 34,366 Real estate - residential - equity lines 26,162 26,958 Consumer and other 46,150 51,045 Gross loans 1,034,606 946,251 Deferred fees and costs 1,992 1,927 Loans, net of deferred fees and costs 1,036,598 948,178 Allowance for loan and lease losses (12,242 ) (12,292 ) Net loans $ 1,024,356 $ 935,886 Certain loans are pledged as collateral for lines of credit with the Federal Home Loan Bank of San Francisco and the Federal Reserve Bank. Pledged loans totaled $480.0 $490.2 March 31, 2019 December 31, 2018, When we purchase loans, they are typically purchased at a discount to enhance yield and compensate for credit risk. Gross loan balances in the table above include net purchase discounts of $2.2 $2.5 March 31, 2019, December 31, 2018. Gross loan balances in the table above include a fair value discount of $2.2 first 2019. $48 three March 31, 2019. Past Due Loans Past due loans (gross), segregated by loan portfolio were as follows, as of March 31, 2019, December 31, 2018. (Amounts in thousands) 30-59 60-89 90 or Greater Recorded Investment > Past Due Loans at Days Past Days Past Days Past Total Past 90 Days and March 31, 2019 Due Due Due Due Current Total Accruing Commercial $ 190 $ 47 $ — $ 237 $ 149,338 $ 149,575 $ — Commercial real estate: Real estate - construction and land development — — — — 30,335 30,335 — Real estate - commercial non-owner occupied — — 10,878 10,878 458,170 469,048 — Real estate - commercial owner occupied — — — — 209,099 209,099 — Residential real estate: Real estate - residential - ITIN 465 191 170 826 35,319 36,145 — Real estate - residential - 1-4 family mortgage — — — — 68,092 68,092 — Real estate - residential - equity lines 78 — — 78 26,084 26,162 — Consumer and other 152 102 — 254 45,896 46,150 — Total $ 885 $ 340 $ 11,048 $ 12,273 $ 1,022,333 $ 1,034,606 $ — (Amounts in thousands) 30-59 60-89 90 or Greater Recorded Investment > Past Due Loans at Days Past Days Past Days Past Total Past 90 Days and December 31, 2018 Due Due Due Due Current Total Accruing Commercial $ — $ — $ — $ — $ 135,543 $ 135,543 $ — Commercial real estate: Real estate - construction and land development — — — — 22,563 22,563 — Real estate - commercial non-owner occupied 10,878 — 548 11,426 422,282 433,708 — Real estate - commercial owner occupied 688 — — 688 203,934 204,622 — Residential real estate: Real estate - residential - ITIN 184 279 259 722 36,724 37,446 — Real estate - residential - 1-4 family mortgage — — 185 185 34,181 34,366 — Real estate - residential - equity lines 90 — — 90 26,868 26,958 — Consumer and other 534 263 — 797 50,248 51,045 — Total $ 12,374 $ 542 $ 992 $ 13,908 $ 932,343 $ 946,251 $ — Nonaccrual Loans Nonaccrual loans, segregated by loan portfolio, were as follows as of March 31, 2019 December 31, 2018. (Amounts in thousands) March 31, December 31, Nonaccrual Loans 2019 2018 Commercial $ 1,018 $ 959 Commercial real estate: Real estate - commercial non-owner occupied 10,878 548 Residential real estate: Real estate - residential - ITIN 2,392 2,388 Real estate - residential - 1-4 family mortgage 182 185 Real estate - residential - equity lines 42 43 Consumer and other 23 23 Total $ 14,535 $ 4,146 Had nonaccrual loans performed in accordance with their contractual terms, we would have recognized additional interest income, net of tax, of approximately $158 $43 three March 31, 2019 2018, Impaired Loans A loan is considered impaired when, based on current information and events, we determine it is probable that we will not March 31, 2019, December 31, 2018. As of March 31, 2019 Unpaid (Amounts in thousands) Recorded Principal Related Impaired Loans Investment Balance Allowance With no related allowance recorded: Commercial $ 47 $ 65 $ — Commercial real estate: Real estate - commercial non-owner occupied 10,878 10,878 — Residential real estate: Real estate - residential - ITIN 5,962 7,534 — Real estate - residential - 1-4 family mortgage 182 221 — Real estate - residential - equity lines 42 48 — Total with no related allowance recorded $ 17,111 $ 18,746 $ — With an allowance recorded: Commercial $ 2,158 $ 2,299 $ 923 Commercial real estate: Real estate - commercial non-owner occupied 793 793 169 Residential real estate: Real estate - residential - ITIN 772 810 88 Real estate - residential - equity lines 358 358 179 Consumer and other 23 23 7 Total with an allowance recorded $ 4,104 $ 4,283 $ 1,366 By loan portfolio: Commercial $ 2,205 $ 2,364 $ 923 Commercial real estate 11,671 11,671 169 Residential real estate 7,316 8,971 267 Consumer and other 23 23 7 Total impaired loans $ 21,215 $ 23,029 $ 1,366 As of December 31, 2018 (Amounts in thousands) Recorded Principal Related Impaired Loans Investment Balance Allowance With no related allowance recorded: Commercial $ 51 $ 69 $ — Commercial real estate: Real estate - commercial non-owner occupied 548 548 — Residential real estate: Real estate - residential - ITIN 6,138 7,676 — Real estate - residential - 1-4 family mortgage 185 223 — Real estate - residential - equity lines 43 48 — Total with no related allowance recorded $ 6,965 $ 8,564 $ — With an allowance recorded: Commercial $ 2,132 $ 2,256 $ 748 Commercial real estate: Real estate - commercial non-owner occupied 795 795 209 Residential real estate: Real estate - residential - ITIN 734 772 91 Real estate - residential - equity lines 363 363 182 Consumer and other 23 23 7 Total with an allowance recorded $ 4,047 $ 4,209 $ 1,237 By loan portfolio: Commercial $ 2,183 $ 2,325 $ 748 Commercial real estate 1,343 1,343 209 Residential real estate 7,463 9,082 273 Consumer and other 23 23 7 Total impaired loans $ 11,012 $ 12,773 $ 1,237 The following table summarizes average recorded investment and interest income recognized on impaired loans by loan portfolio for the three March 31, 2019 2018. Three Months Ended Three Months Ended March 31, 2019 March 31, 2018 Average Interest Average Interest (Amounts in thousands) Recorded Income Recorded Income Average Recorded Investment and Interest Income Investment Recognized Investment Recognized Commercial $ 2,021 $ 17 $ 2,589 $ 21 Commercial real estate: Real estate - commercial non-owner occupied 8,412 11 802 11 Residential real estate: Real estate - residential - ITIN 6,874 42 7,425 41 Real estate - residential - 1-4 family mortgage 184 — 326 — Real estate - residential - equity lines 401 5 422 5 Consumer and other 23 — 35 — Total $ 17,915 $ 75 $ 11,599 $ 78 The impaired loans on which these interest income amounts were recognized are primarily accruing troubled debt restructured loans. Loans are reported as troubled debt restructurings when we grant a concession(s) to a borrower experiencing financial difficulties that we would not not Troubled Debt Restructurings At March 31, 2019 December 31, 2018, $6.7 $6.9 For a restructured loan to be on accrual status, the loan’s collateral coverage must generally be greater than or equal to 100% one $41 $313 March 31, 2019 December 31, 2018, As of March 31, 2019, $9.4 $9.6 December 31, 2018. March 31, 2019, 105 104 0.91% March 31, 2019, 1.01% December 31, 2018. not three March 31, 2019 2018. no twelve three March 31, 2019. Performing and Nonperforming Loans We define a performing loan as a loan where any installment of principal or interest is not 90 may 90 not March 31, 2019 December 31, 2018. (Amounts in thousands) March 31, 2019 Performing and Nonperforming Loans Performing Nonperforming Total Commercial $ 148,557 $ 1,018 $ 149,575 Commercial real estate: Real estate - construction and land development 30,335 — 30,335 Real estate - commercial non-owner occupied 458,170 10,878 469,048 Real estate - commercial owner occupied 209,099 — 209,099 Residential real estate: Real estate - residential - ITIN 33,753 2,392 36,145 Real estate - residential - 1-4 family mortgage 67,910 182 68,092 Real estate - residential - equity lines 26,120 42 26,162 Consumer and other 46,127 23 46,150 Total $ 1,020,071 $ 14,535 $ 1,034,606 (Amounts in thousands) December 31, 2018 Performing and Nonperforming Loans Performing Nonperforming Total Commercial $ 134,584 $ 959 $ 135,543 Commercial real estate: Real estate - construction and land development 22,563 — 22,563 Real estate - commercial non-owner occupied 433,160 548 433,708 Real estate - commercial owner occupied 204,622 — 204,622 Residential real estate: Real estate - residential - ITIN 35,058 2,388 37,446 Real estate - residential - 1-4 family mortgage 34,181 185 34,366 Real estate - residential - equity lines 26,915 43 26,958 Consumer and other 51,022 23 51,045 Total $ 942,105 $ 4,146 $ 946,251 Credit Quality Ratings Management assigns a credit quality rating (risk grade) to each loan. The foundation or primary factor in determining the appropriate credit quality rating is the degree of a debtor’s willingness and ability to perform as agreed. In conjunction with evaluating the performing versus nonperforming nature of our loan portfolio, management evaluates the following credit risk and other relevant factors in determining the appropriate credit quality indicator (rating) for each loan portfolio: Pass Grade: no may ● Strong Cash Flows – borrower’s cash flows must meet or exceed our minimum debt service coverage ratio. ● Collateral Margin – generally, the borrower must have pledged an acceptable collateral class with an adequate collateral margin. ● Qualitative Factors – in addition to meeting our minimum cash flow and collateral requirements, a number of other qualitative factors are also factored into assigning a Pass Grade including the borrower’s level of leverage (debt to equity), prospects, history and experience in their industry, credit history, and any other relevant factors including a borrower’s character. Those borrowers who qualify for unsecured loans must fully demonstrate above average cash flows and strong secondary sources of repayment to mitigate the lack of unpledged collateral. Watch Grade: may one not ● The primary source of repayment may ● The primary source of repayment is adequate, but the secondary source of repayment is insufficient ● In-depth financial analysis would compare to the lower quartile in two ● Volatile or deteriorating collateral ● Management decisions may ● Delinquencies in bank credits or other financial/trade creditors ● Frequent overdrafts ● Significant change in management/ownership Special Mention Grade: may not not not ● Inadequate or incomplete loan documentation or perfection of collateral, or any other deviation from prudent lending practices ● Credit is structured in a manner in which the timing of the repayment source does not ● Current economic or market conditions exist which may ● Adverse trends in the borrower's operations or continued deterioration in the borrower’s financial condition that has not ● The borrower is less than cooperative or unable to produce current and adequate financial information Substandard Grade: not not may may not The following represents, but is not not ● Sustained or substantial deteriorating financial trends, ● Unresolved management problems, ● Collateral is insufficient to repay debt; collateral is not ● Improper perfection of lien position, which is not ● Unanticipated and severe decline in market values, ● High reliance on secondary source of repayment, ● Legal proceedings, such as bankruptcy or a divorce, which has substantially decreased the borrower’s capacity to repay the debt, ● Fraud committed by the borrower, ● IRS liens that take precedence, ● Forfeiture statutes for assets involved in criminal activities, ● Protracted repayment terms outside of policy that are for longer than the same type of credit in our portfolio, ● Any other relevant quantitative or qualitative factor that negatively affects the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Doubtful Grade: one may may may not ● Proposed merger(s), ● Acquisition or liquidation procedures, ● Capital injection, ● Perfecting liens on additional collateral, ● Refinancing plans. Generally, a Doubtful Grade does not six six The following tables summarize loans by internal risk grades and by loan class as of March 31, 2019 December 31, 2018. As of March 31, 2019 Special (Amounts in thousands) Pass Watch Mention Substandard Doubtful Total Commercial $ 136,434 $ 10,297 $ 541 $ 2,303 $ — $ 149,575 Commercial real estate: Real estate - construction and land development 30,312 23 — — — 30,335 Real estate - commercial non-owner occupied 445,151 10,729 — 13,168 — 469,048 Real estate - commercial owner occupied 194,043 4,706 — 10,350 — 209,099 Residential real estate: Real estate - residential - ITIN 30,674 — — 5,471 — 36,145 Real estate - residential - 1-4 family mortgage 66,350 1,083 477 182 — 68,092 Real estate - residential - equity lines 25,865 106 — 191 — 26,162 Consumer and other 46,122 — — 28 — 46,150 Total $ 974,951 $ 26,944 $ 1,018 $ 31,693 $ — $ 1,034,606 As of December 31, 2018 Special (Amounts in thousands) Pass Watch Mention Substandard Doubtful Total Commercial $ 118,643 $ 15,247 $ — $ 1,653 $ — $ 135,543 Commercial real estate: Real estate - construction and land development 22,539 24 — — — 22,563 Real estate - commercial non-owner occupied 409,157 21,698 — 2,853 — 433,708 Real estate - commercial owner occupied 179,154 14,075 — 11,393 — 204,622 Residential real estate: Real estate - residential - ITIN 31,805 — — 5,641 — 37,446 Real estate - residential - 1-4 family mortgage 33,388 793 — 185 — 34,366 Real estate - residential - equity lines 25,336 1,313 — 309 — 26,958 Consumer and other 51,016 — — 29 — 51,045 Total $ 871,038 $ 53,150 $ — $ 22,063 $ — $ 946,251 The recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure was $213 March 31, 2019. Allowance for Loan and Lease Losses The following tables summarize the ALLL by portfolio for the three March 31, 2019 2018. For the Three Months Ended March 31, 2019 (Amounts in thousands) Commercial Residential ALLL by Loan Portfolio Commercial Real Estate Real Estate Consumer Unallocated Total Beginning balance $ 2,205 $ 7,116 $ 1,173 $ 1,356 $ 442 $ 12,292 Charge-offs — — (68 ) (280 ) — (348 ) Recoveries 153 — 82 63 — 298 Provision 121 (160 ) 24 (83 ) 98 — Ending balance $ 2,479 $ 6,956 $ 1,211 $ 1,056 $ 540 $ 12,242 For the Three Months Ended March 31, 2018 (Amounts in thousands) Commercial Residential ALLL by Loan Portfolio Commercial Real Estate Real Estate Consumer Unallocated Total Beginning balance $ 2,397 $ 6,514 $ 1,169 $ 1,435 $ 410 $ 11,925 Charge-offs — — (114 ) (276 ) — (390 ) Recoveries 453 — 246 61 — 760 Provision (552 ) 384 (152 ) 253 67 — Ending balance $ 2,298 $ 6,898 $ 1,149 $ 1,473 $ 477 $ 12,295 The following tables summarize the ALLL and the recorded investment in loans and leases as of March 31, 2019 December 31, 2018. As of March 31, 2019 Commercial Residential (Amounts in thousands) Commercial Real Estate Real Estate Consumer Unallocated Total ALLL: Individually evaluated for impairment $ 923 $ 169 $ 267 $ 7 $ — $ 1,366 Collectively evaluated for impairment 1,556 6,787 944 1,049 540 10,876 Total $ 2,479 $ 6,956 $ 1,211 $ 1,056 $ 540 $ 12,242 Gross loans: Individually evaluated for impairment $ 2,205 $ 11,671 $ 7,316 $ 23 $ — $ 21,215 Collectively evaluated for impairment 147,370 696,811 123,083 46,127 — 1,013,391 Total gross loans $ 149,575 $ 708,482 $ 130,399 $ 46,150 $ — $ 1,034,606 As of December 31, 2018 Commercial Residential (Amounts in thousands) Commercial Real Estate Real Estate Consumer Unallocated Total ALLL: Individually evaluated for impairment $ 748 $ 209 $ 273 $ 7 $ — $ 1,237 Collectively evaluated for impairment 1,457 6,907 900 1,349 442 11,055 Total $ 2,205 $ 7,116 $ 1,173 $ 1,356 $ 442 $ 12,292 Gross loans: Individually evaluated for impairment $ 2,183 $ 1,343 $ 7,463 $ 23 $ — $ 11,012 Collectively evaluated for impairment 133,360 659,550 91,307 51,022 — 935,239 Total gross loans $ 135,543 $ 660,893 $ 98,770 $ 51,045 $ — $ 946,251 The ALLL totaled $12.2 1.18% March 31, 2019 $12.3 1.30% December 31, 2018. March 31, 2019 December 31, 2018, $220.7 $235.8 Other Liabilities Consolidated Balance Sheets March 31, 2019 December 31, 2018 $595 $695 The ALLL is based upon estimates of future loan and lease losses and is maintained at a level considered adequate to provide for probable losses inherent in the outstanding loan portfolio. Our ALLL methodology incorporates management’s current judgments, and reflects management’s estimate of future loan and lease losses and risks inherent in the loan portfolio in accordance with ASC Topic 450 Contingencies 310 Receivables The allowance is increased by provisions charged to expense and adjusted for charge-offs or recoveries. In periodic evaluations of the adequacy of the allowance may Management monitors delinquent loans continuously and identifies problem loans to be evaluated individually for impairment testing. For loans that are determined impaired, a formal impairment measurement is performed at least quarterly on a loan-by-loan basis. Our method for assessing the appropriateness of the allowance includes specific allowances for identified problem loans, an allowance factor for categories of credits and allowances for changing environmental factors (e.g., portfolio trends, concentration of credit, growth, economic factors). Allowances for identified problem loans are based on specific analysis of individual credits. Loss estimation factors for loan categories are based on analysis of local economic factors applicable to each loan category. Allowances for changing environmental factors are management’s best estimate of the probable impact these changes have had on the loan portfolio as a whole. We believe that the ALLL was adequate as of March 31, 2019. no not may As of March 31, 2019, 82% may may may Impaired loans are individually evaluated for impairment. If the measurement of each impaired loans’ value is less than the recorded investment in the loan, we recognize this impairment and adjust the carrying value of the loan to fair value through the ALLL. For collateral dependent loans, this can be accomplished by charging off the impaired portion of the loan based on the underlying value of the collateral. For non-collateral dependent loans, we establish a specific component within the ALLL based on the present value of the future cash flows. If we determine the sources of repayment will not The unallocated portion of the ALLL provides for coverage of credit losses inherent in the loan portfolio but not March 31, 2019 December 31, 2018, 4% While the ALLL composition is an indication of specific amounts or loan categories in which future charge-offs may may We have lending policies and procedures in place with the objective of optimizing loan income within an accepted risk tolerance level. We review and approve these policies and procedures annually. Monitoring and reporting systems supplement the review process with regular frequency as related to loan production, loan quality, concentrations of credit, potential problem loans, loan delinquencies, and nonperforming loans.The following is a brief summary, by loan type, of management’s evaluation of the general risk characteristics and underwriting standards: Commercial Loans may may Most commercial loans are generally secured by the assets being financed and other business assets such as accounts receivable or inventory. Management may may may Commercial Real Estate (“CRE”) Loans The properties securing the CRE portfolio are diverse in terms of type and primary source of repayment. This diversity helps reduce our exposure to adverse economic events that affect any single industry. We monitor and evaluate CRE loans based on occupancy status (investor versus owner occupied), collateral, geography, and risk grade criteria. Generally, CRE loans are made to developers and builders that are secured by non-owner occupied properties require the borrower to have had an existing relationship with the Company and a proven record of success. Construction loans are underwritten utilizing feasibility studies, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of cost and value associated with the complete project (as-is value). These estimates may may Residential Real Estate Loans not We originate some single family residence construction loans. The loan amounts are no $1 12 may Consumer Loans – third not 80%, one We maintain an independent loan review program that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to the Board of Directors, Loan Committee and Audit Committee. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as our policies and procedures. Management’s continuing evaluation of all known relevant quantitative and qualitative internal and external risk factors provides the foundation for the three 1 450, 450” 2 450 3 310, 310” three may not not no not may Our loan portfolio is evaluated by general loan class including commercial, commercial real estate (which includes construction and other real estate), residential real estate (which includes 1 4 450, General valuation allowances, as prescribed by ASC 450, |