Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | (3) Loans The following table presents the composition of loans segregated by class of loans, as of June 30, 2015 and December 31, 2014. June 30, 2015 December 31, 2014 Commercial and Agricultural Commercial $ 52,506 $ 50,960 Agricultural 24,019 16,689 Real Estate Commercial Constuction 46,699 51,259 Residential Construction 11,327 11,221 Commercial 341,167 332,231 Residential 202,805 203,753 Farmland 54,135 49,951 Consumer and Other Consumer 21,371 22,820 Other 6,049 7,210 Total Loans $ 760,078 $ 746,094 Commercial and industrial loans are extended to a diverse group of businesses within the Company’s market area. These loans are often underwritten based on the borrower’s ability to service the debt from income from the business. Real estate construction loans often require loan funds to be advanced prior to completion of the project. Due to uncertainties inherent in estimating construction costs, changes in interest rates and other economic conditions, these loans often pose a higher risk than other types of loans. Consumer loans are originated at the bank level. These loans are generally smaller loan amounts spread across many individual borrowers to help minimize risk. Credit Quality Indicators The Company uses a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 8. A description of the general characteristics of the grades is as follows: ● Grades 1 and 2 – Borrowers with these assigned grades range in risk from virtual absence of risk to minimal risk. Such loans may be secured by Company-issued and controlled certificates of deposit or properly margined equity securities or bonds. Other loans comprising these grades are made to companies that have been in existence for a long period of time with many years of consecutive profits and strong equity, good liquidity, excellent debt service ability and unblemished past performance, or to exceptionally strong individuals with collateral of unquestioned value that fully secures the loans. Loans in this category fall into the “pass” classification. ● Grades 3 and 4 – Loans assigned these “pass” risk grades are made to borrowers with acceptable credit quality and risk. The risk ranges from loans with no significant weaknesses in repayment capacity and collateral protection to acceptable loans with one or more risk factors considered to be more than average. ● Grade 5 – This grade includes “special mention” loans on management’s watch list and is intended to be used on a temporary basis for pass grade loans where risk-modifying action is intended in the short-term. ● Grade 6 – This grade includes “substandard” loans in accordance with regulatory guidelines. This category includes borrowers with well-defined weaknesses that jeopardize the payment of the debt in accordance with the agreed terms. Loans considered to be impaired are assigned this grade, and these loans often have assigned loss allocations as part of the allowance for loan and lease losses. Generally, loans on which interest accrual has been stopped would be included in this grade. ● Grades 7 and 8 – These grades correspond to regulatory classification definitions of “doubtful” and “loss,” respectively. In practice, any loan with these grades would be for a very short period of time, and generally the Company has no loans with these assigned grades. Management manages the Company’s problem loans in such a way that uncollectible loans or uncollectible portions of loans are charged off immediately with any residual, collectible amounts assigned a risk grade of 6. The following table presents the loan portfolio by credit quality indicator (risk grade) as of June 30, 2015 and December 31, 2014. Those loans with a risk grade of 1, 2, 3 or 4 have been combined in the pass column for presentation purposes. June 30, 2015 Pass Special Mention Substandard Total Loans Commercial and Agricultural Commercial $ 49,301 $ 1,400 $ 1,805 $ 52,506 Agricultural 23,831 27 161 24,019 Real Estate Commercial Construction 40,923 1,476 4,300 46,699 Residential Construction 11,327 - - 11,327 Commercial 321,278 9,713 10,176 341,167 Residential 180,884 12,726 9,195 202,805 Farmland 52,192 380 1,563 54,135 Consumer and Other Consumer 20,749 204 418 21,371 Other 6,047 1 1 6,049 Total Loans $ 706,532 $ 25,927 $ 27,619 $ 760,078 December 31, 2014 Pass Special Mention Substandard Total Loans Commercial and Agricultural Commercial $ 46,230 $ 2,905 $ 1,825 $ 50,960 Agricultural 16,504 27 158 16,689 Real Estate Commercial Construction 45,063 1,741 4,455 51,259 Residential Construction 11,221 - - 11,221 Commercial 309,828 11,220 11,183 332,231 Residential 180,550 10,582 12,621 203,753 Farmland 47,548 415 1,988 49,951 Consumer and Other Consumer 22,115 249 456 22,820 Other 7,013 - 197 7,210 Total Loans $ 686,072 $ 27,139 $ 32,883 $ 746,094 A loan’s risk grade is assigned at the inception of the loan and is based on the financial strength of the borrower and the type of collateral. Loan risk grades are subject to reassessment at various times throughout the year as part of the Company’s ongoing loan review process. Loans with an assigned risk grade of 6 or below and an outstanding balance of $250,000 or more are reassessed on a quarterly basis. During this reassessment process individual reserves may be identified and placed against certain loans which are not considered impaired. In assessing the overall economic condition of the markets in which it operates, the Company monitors the unemployment rates for its major service areas. The unemployment rates are reviewed on a quarterly basis as part of the allowance for loan loss determination. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provision. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. The following table represents an age analysis of past due loans and nonaccrual loans, segregated by class of loans, as of June 30, 2015 and December 31, 2014: June 30, 2015 Accruing Loans 90 Days 30-89 Days or More Total Accruing Nonaccrual Past Due Past Due Loans Past Due Loans Current Loans Total Loans Commercial and Agricultural Commercial $ 423 $ - $ 423 $ 739 $ 51,344 $ 52,506 Agricultural 99 - 99 162 23,758 24,019 Real Estate Commercial Construction 84 - 84 3,152 43,463 46,699 Residential Construction 255 - 255 - 11,072 11,327 Commercial 1,379 - 1,379 4,905 334,883 341,167 Residential 4,098 - 4,098 3,516 195,191 202,805 Farmland 468 - 468 1,442 52,225 54,135 Consumer and Other Consumer 416 8 424 204 20,743 21,371 Other - - - - 6,049 6,049 Total Loans $ 7,222 $ 8 $ 7,230 $ 14,120 $ 738,728 $ 760,078 December 31, 2014 Accruing Loans 90 Days 30-89 Days or More Total Accruing Nonaccrual Past Due Past Due Loans Past Due Loans Current Loans Total Loans Commercial and Agricultural Commercial $ 872 $ - $ 872 $ 405 $ 49,683 $ 50,960 Agricultural - - - 45 16,644 16,689 Real Estate Commercial Construction 142 - 142 3,251 47,866 51,259 Residential Construction - - - - 11,221 11,221 Commercial 2,309 - 2,309 5,325 324,597 332,231 Residential 5,783 - 5,783 7,462 190,508 203,753 Farmland 282 - 282 1,449 48,220 49,951 Consumer and Other Consumer 313 7 320 202 22,298 22,820 Other - - - 195 7,015 7,210 Total Loans $ 9,701 $ 7 $ 9,708 $ 18,334 $ 718,052 $ 746,094 The following table details impaired loan data as of June 30, 2015: June 30, 2015 Unpaid Contractual Average Interest Interest Principal Impaired Related Recorded Income Income Balance Balance Allowance Investment Recognized Collected With No Related Commercial $ 710 $ 648 $ - $ 555 $ (11 ) $ 16 Agricultural 179 161 - 159 (10 ) 10 Commercial Construction 9,613 3,408 - 3,418 13 14 Residential Construction - - - - - - Commercial Real Estate 15,149 15,149 - 16,093 281 261 Residential Real Estate 5,612 4,691 - 4,943 115 105 Farmland 1,444 1,442 - 1,430 3 4 Consumer 244 204 - 198 (4 ) 8 Other - - - 97 - - 32,951 25,703 - 26,893 387 418 With An Allowance Recorded Commercial 92 92 92 93 - - Agricultural - - - - - - Commercial Construction 80 80 18 107 - - Residential Construction - - - - - - Commercial Real Estate 6,639 5,992 278 5,728 56 47 Residential Real Estate 1,093 1,093 320 1,098 9 8 Farmland 392 392 59 393 11 11 Consumer - - - - - - Other - - - - - - 8,296 7,649 767 7,419 76 66 Total Commercial 802 740 92 648 (11 ) 16 Agricultural 179 161 - 159 (10 ) 10 Commercial Construction 9,693 3,488 18 3,525 13 14 Residential Construction - - - - - - Commercial Real Estate 21,788 21,141 278 21,821 337 308 Residential Real Estate 6,705 5,784 320 6,041 124 113 Farmland 1,836 1,834 59 1,823 14 15 Consumer 244 204 - 198 (4 ) 8 Other - - - 97 - - $ 41,247 $ 33,352 $ 767 $ 34,312 $ 463 $ 484 The following table details impaired loan data as of December 31, 2014: December 31, 2014 Unpaid Contractual Average Interest Interest Principal Impaired Related Recorded Income Income Balance Balance Allowance Investment Recognized Collected With No Related Commercial $ 310 $ 308 $ - $ 679 $ 9 $ 18 Agricultural 50 45 - 51 (6 ) 3 Commercial Construction 9,573 3,464 - 3,376 13 13 Commercial Real Estate 17,130 16,228 - 18,350 462 474 Residential Real Estate 9,137 7,600 - 5,691 312 306 Farmland 1,451 1,449 - 949 (8 ) 18 Consumer 202 202 - 212 14 16 Other 207 195 - 197 6 11 38,060 29,491 - 29,505 802 859 With An Allowance Recorded Commercial 97 97 97 420 - - Agricultural - - - - - - Commercial Construction 207 136 54 1,529 - - Commercial Real Estate 6,135 6,135 457 6,415 61 51 Residential Real Estate 2,073 2,065 414 1,829 84 87 Farmland 396 396 29 529 13 12 Consumer - - - - - - Other - - - - - - 8,908 8,829 1,051 10,722 158 150 Total Commercial 407 405 97 1,099 9 18 Agricultural 50 45 - 51 (6 ) 3 Commercial Construction 9,780 3,600 54 4,905 13 13 Commercial Real Estate 23,265 22,363 457 24,765 523 525 Residential Real Estate 11,210 9,665 414 7,520 396 393 Farmland 1,847 1,845 29 1,478 5 30 Consumer 202 202 - 212 14 16 Other 207 195 - 197 6 11 $ 46,968 $ 38,320 $ 1,051 $ 40,227 $ 960 $ 1,009 The following table details impaired loan data as of June 30, 2014: June 30, 2014 Unpaid Contractual Average Interest Interest Principal Impaired Related Recorded Income Income Balance Balance Allowance Investment Recognized Collected With No Related Commercial $ 1,728 $ 1,415 $ - $ 1,007 $ 5 $ 13 Agricultural 70 64 - 57 (7 ) 3 Commercial Construction 5,894 2,586 - 3,470 2 2 Residential Construction - - - - - - Commercial Real Estate 21,215 19,831 - 20,258 264 283 Residential Real Estate 7,021 5,568 - 5,605 108 100 Farmland 1,016 1,015 - 681 4 7 Consumer 227 221 - 236 7 10 Other 191 191 - 197 4 5 37,362 30,891 - 31,511 387 423 With An Allowance Recorded Commercial 101 102 102 741 - - Agricultural - - - - - - Commercial Construction 4,171 2,369 1,082 2,920 - - Residential Construction - - - - - - Commercial Real Estate 7,485 7,485 772 6,797 138 140 Residential Real Estate 956 948 310 951 23 26 Farmland - - - 662 - - Consumer - - - - - - Other - - - - - - 12,713 10,904 2,266 12,071 161 166 Total Commercial 1,829 1,517 102 1,748 5 13 Agricultural 70 64 - 57 (7 ) 3 Commercial Construction 10,065 4,955 1,082 6,390 2 2 Residential Construction - - - - - - Commercial Real Estate 28,700 27,316 772 27,055 402 423 Residential Real Estate 7,977 6,516 310 6,556 131 126 Farmland 1,016 1,015 - 1,343 4 7 Consumer 227 221 - 236 7 10 Other 191 191 - 197 4 5 $ 50,075 $ 41,795 $ 2,266 $ 43,582 $ 548 $ 589 Troubled Debt Restructurings (TDRs) are troubled loans on which the original terms of the loan have been modified in favor of the borrower due to deterioration in the borrower’s financial condition. Each potential loan modification is reviewed individually and the terms of the loan are modified to meet the borrower’s specific circumstances at a point in time. Not all loan modifications are TDRs. Loan modifications are reviewed and approved by the Company’s senior lending staff, who then determine whether the loan meets the criteria for a TDR. Generally, the types of concessions granted to borrowers that are evaluated in determining whether a loan is classified as a TDR include: ● Interest rate reductions – Occur when the stated interest rate is reduced to a nonmarket rate or a rate the borrower would not be able to obtain elsewhere under similar circumstances. ● Amortization or maturity date changes – Result when the amortization period of the loan is extended beyond what is considered a normal amortization period for loans of similar type with similar collateral. ● Principal reductions – These are often the result of commercial real estate loan workouts where two new notes are created. The primary note is underwritten based upon our normal underwriting standards and is structured so that the projected cash flows are sufficient to repay the contractual principal and interest of the newly restructured note. The terms of the secondary note vary by situation and often involve that note being charged-off, or the principal and interest payments being deferred until after the primary note has been repaid. In situations where a portion of the note is charged-off during modification there is often no specific reserve allocated to those loans. This is due to the fact that the amount of the charge-off usually represents the excess of the original loan balance over the collateral value and the Company has determined there is no additional exposure on those loans. As discussed in Note 1, Summary of Significant Accounting Policies, once a loan is identified as a TDR, it is accounted for as an impaired loan. The Company had no unfunded commitments to lend to a customer that has a troubled debt restructured loan as of June 30, 2015. The following tables present the number of loan contracts restructured during the three month and six month period ended June 30, 2015 and 2014. It shows the pre- and post-modification recorded investment as well as the number of contracts and the recorded investment for those TDRs modified during the previous twelve months which subsequently defaulted during the period. Loans modified in a troubled debt restructuring are considered to be in default once the loan becomes 90 days past due. Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Troubled Debt Restructurings # of Contracts Pre-Modification Post-Modification # of Contracts Pre-Modification Post-Modification Residential Real Estate - $ - $ - 1 $ 881 $ 897 Total Loans - $ - $ - 1 $ 881 $ 897 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Troubled Debt Restructurings # of Contracts Pre-Modification Post-Modification # of Contracts Pre-Modification Post-Modification Commercial Real Estate - $ - $ - 2 $ 1,771 $ 1,775 Residential Real Estate 1 49 49 1 49 49 Farmland 1 401 401 1 401 401 Total Loans 2 $ 450 $ 450 4 $ 2,221 $ 2,225 The company did not have any TDRs that subsequently defaulted for the three months and six months ended June 30, 2015. |