Allowance for Credit Losses [Text Block] | Note 6 : Loans Receivable and Allowance for Loan Losses The following table sets forth the Company’s gross loans by major categories as of June 30, 2017 December 31, 2016: (dollars in thousands) June 30, 2017 December 31, 2016 Commercial real estate $ 412,695 $ 378,519 Construction and land development 83,571 61,453 Commercial and industrial 176,949 174,744 Owner occupied real estate 285,479 276,986 Consumer and other 68,946 63,660 Residential mortgage 39,286 9,682 Total loans receivable 1,066,926 965,044 Deferred costs (fees) (416 ) (72 ) Allowance for loan losses (9,454 ) (9,155 ) Net loans receivable $ 1,057,056 $ 955,817 The Company disaggregates its loan portfolio into groups of loans with similar risk characteristics for purposes of estimating the allowance for loan losses. The Company’s loan groups include commercial real estate, construction and land development, commercial and industrial, owner occupied real estate, consumer, and residential mortgages. The loan groups are also considered classes for purposes of monitoring and assessing credit quality based on certain risk characteristics. The following tables provide the activity in and ending balances of the allowance for loan losses by loan portfolio class at and for the three six June 30, 2017 2016: (dollars in thousands) Commercial Real Estate Construction and Land Development Commercial and Industrial Owner Occupied Real Estate Consumer and Other Residential Mortgage Unallocated Total Three months ended June 30, 201 7 Allowance for loan losses: Beginning balance: $ 2,962 $ 546 $ 2,770 $ 1,627 $ 575 $ 130 $ 571 $ 9,181 Charge-offs - - (152 ) (100 ) (6 ) - - (258 ) Recoveries - - 30 - 1 - - 31 Provisions (credits) 209 34 (152 ) 71 (26 ) 108 256 500 Ending balance $ 3,171 $ 580 $ 2,496 $ 1,598 $ 544 $ 238 $ 827 $ 9,454 Three months ended June 30, 2016 Allowance for loan losses: Beginning balance: $ 2,045 $ 414 $ 2,942 $ 2,091 $ 312 $ 11 $ 1,214 $ 9,029 Charge-offs - - - (926 ) - - - (926 ) Recoveries 6 - 2 - - - - 8 Provisions (credits) 1,242 (49 ) 192 201 12 - (948 ) 650 Ending balance $ 3,293 $ 365 $ 3,136 $ 1,366 $ 324 $ 11 $ 266 $ 8,761 (dollars in thousands) Commercial Real Estate Construction and Land Development Commercial and Industrial Owner Occupied Real Estate Consumer and Other Residential Mortgage Unallocated Total Six months ended June 30, 2017 Allowance for loan losses: Beginning balance: $ 3,254 $ 557 $ 2,884 $ 1,382 $ 588 $ 58 $ 432 $ 9,155 Charge-offs - - (152 ) (108 ) (8 ) - - (268 ) Recoveries 7 - 59 - 1 - - 67 Provisions (credits) (90 ) 23 (295 ) 324 (37 ) 180 395 500 Ending balance $ 3,171 $ 580 $ 2,496 $ 1,598 $ 544 $ 238 $ 827 $ 9,454 Six months ended June 30, 201 6 Allowance for loan losses: Beginning balance: $ 2,393 $ 338 $ 2,932 $ 2,030 $ 295 $ 14 $ 701 $ 8,703 Charge-offs - - (18 ) (954 ) - - - (972 ) Recoveries 6 - 74 - - - - 80 Provisions (credits) 894 27 148 290 29 (3 ) (435 ) 950 Ending balance $ 3,293 $ 365 $ 3,136 $ 1,366 $ 324 $ 11 $ 266 $ 8,761 The following tables provide a summary of the allowance for loan losses and balance of loans receivable by loan class and by impairment method as of June 30, 2017 December 31, 2016: (dollars in thousands) Commercial Real Estate Construction and Land Development Commercial and Industrial Owner Occupied Real Estate Consumer and Other Residential Mortgage Unallocated Total June 30, 201 7 Allowance for loan losses: Individually evaluated for impairment $ 1,453 $ - $ 1,552 $ 212 $ 221 $ - $ - $ 3,438 Collectively evaluated for impairment 1,718 580 944 1,386 323 238 827 6,016 Total allowance for loan losses $ 3,171 $ 580 $ 2,496 $ 1,598 $ 544 $ 238 $ 827 $ 9,454 Loans receivable: Loans evaluated individually $ 13,436 $ - $ 5,117 $ 3,336 $ 1,272 $ - $ - $ 23,161 Loans evaluated collectively 399,259 83,571 171,832 282,143 67,674 39,286 - 1,043,765 Total loans receivable $ 412,695 $ 83,571 $ 176,949 $ 285,479 $ 68,946 $ 39,286 $ - $ 1,066,926 (dollars in thousands) Commercial Real Estate Construction and Land Development Commercial and Industrial Owner Occupied Real Estate Consumer and Other Residential Mortgage Unallocated Total December 31, 201 6 Allowance for loan losses: Individually evaluated for impairment $ 1,277 $ - $ 1,624 $ 274 $ 293 $ - $ - $ 3,468 Collectively evaluated for impairment 1,977 557 1,260 1,108 295 58 432 5,687 Total allowance for loan losses $ 3,254 $ 557 $ 2,884 $ 1,382 $ 588 $ 58 $ 432 $ 9,155 Loans receivable: Loans evaluated individually $ 19,245 $ - $ 5,180 $ 2,325 $ 1,290 $ 130 $ - $ 28,170 Loans evaluated collectively 359,274 61,453 169,564 274,661 62,370 9,552 - 936,874 Total loans receivable $ 378,519 $ 61,453 $ 174,744 $ 276,986 $ 63,660 $ 9,682 $ - $ 965,044 A loan is considered impaired, when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans, but also include internally classified accruing loans. The following table summarizes information with regard to impaired loans by loan portfolio class as of June 30, 2017 December 31, 2016: June 3 0 , 201 7 December 31, 201 6 (dollars in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial real estate $ 7,044 $ 7,046 $ - $ 12,347 $ 12,348 $ - Construction and land development - - - - - - Commercial and industrial 2,244 3,408 - 1,955 3,111 - Owner occupied real estate 2,154 2,299 - 621 733 - Consumer and other 926 1,233 - 687 976 - Residential mortgage - - - 130 130 - Total $ 12,368 $ 13,986 $ - $ 15,740 $ 17,298 $ - With an allowance recorded: Commercial real estate $ 6,392 $ 6,406 $ 1,453 $ 6,898 $ 6,912 $ 1,277 Construction and land development - - - - - - Commercial and industrial 2,873 5,540 1,552 3,225 5,892 1,624 Owner occupied real estate 1,182 1,182 212 1,704 1,704 274 Consumer and other 346 374 221 603 627 293 Residential mortgage - - - - - - Total $ 10,793 $ 13,502 $ 3,438 $ 12,430 $ 15,135 $ 3,468 Total: Commercial real estate $ 13,436 $ 13,452 $ 1,453 $ 19,245 $ 19,260 $ 1,277 Construction and land development - - - - - - Commercial and industrial 5,117 8,948 1,552 5,180 9,003 1,624 Owner occupied real estate 3,336 3,481 212 2,325 2,437 274 Consumer and other 1,272 1,607 221 1,290 1,603 293 Residential mortgage - - - 130 130 - Total $ 23,161 $ 27,488 $ 3,438 $ 28,170 $ 32,433 $ 3,468 The following table presents additional information regarding the Company’s impaired loans for the three June 30, 2017 June 30, 2016: Three Months Ended June 30, 201 7 201 6 (dollars in thousands) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: Commercial real estate $ 8,794 $ 95 $ 12,085 $ 67 Construction and land development - - 77 - Commercial and industrial 2,139 10 1,782 11 Owner occupied real estate 1,812 17 793 2 Consumer and other 868 5 847 3 Residential mortgage 21 - - - Total $ 13,634 $ 127 $ 15,584 $ 83 With an allowance recorded: Commercial real estate $ 6,515 $ 4 $ 4,966 $ 16 Construction and land development - - 2 - Commercial and industrial 3,015 17 3,450 19 Owner occupied real estate 1,380 8 1,808 8 Consumer and other 407 2 265 3 Residential mortgage - - - - Total $ 11,317 $ 31 $ 10,491 $ 46 Total: Commercial real estate $ 15,309 $ 99 $ 17,051 $ 83 Construction and land development - - 79 - Commercial and industrial 5,154 27 5,232 30 Owner occupied real estate 3,192 25 2,601 10 Consumer and other 1,275 7 1,112 6 Residential mortgage 21 - - - Total $ 24,951 $ 158 $ 26,075 $ 129 The following table presents additional information regarding the Company’s impaired loans for the six June 30, 2017 June 30, 2016: Six Months Ended June 30, 201 7 201 6 (dollars in thousands) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: Commercial real estate $ 10,542 $ 165 $ 11,837 $ 132 Construction and land development - - 97 - Commercial and industrial 2,035 18 1,890 21 Owner occupied real estate 1,469 29 638 3 Consumer and other 810 8 838 6 Residential mortgage 43 1 - - Total $ 14,899 $ 221 $ 15,300 $ 162 With an allowance recorded: Commercial real estate $ 6,637 $ 9 $ 2,737 $ 24 Construction and land development - - 1 - Commercial and industrial 3,159 34 3,280 38 Owner occupied real estate 1,577 14 2,319 14 Consumer and other 468 6 239 5 Residential mortgage - - - - Total $ 11,841 $ 63 $ 8,576 $ 81 Total: Commercial real estate $ 17,179 $ 174 $ 14,574 $ 156 Construction and land development - - 98 - Commercial and industrial 5,194 52 5,170 59 Owner occupied real estate 3,046 43 2,957 17 Consumer and other 1,278 14 1,077 11 Residential mortgage 43 1 - - Total $ 26,740 $ 284 $ 23,876 $ 243 The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of June 30, 2017 December 31, 2016: (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loans Receivable Loans Receivable > 90 Days and Accruing At June 30 , 201 7 Commercial real estate $ - $ 863 $ 12,961 $ 13,824 $ 398,871 $ 412,695 $ - Construction and land development - - - - 83,571 83,571 - Commercial and industrial - - 3,309 3,309 173,640 176,949 - Owner occupied real estate - - 1,678 1,678 283,801 285,479 219 Consumer and other 113 - 865 978 67,968 68,946 74 Residential mortgage - - - - 39,286 39,286 - Total $ 113 $ 863 $ 18,813 $ 19,789 $ 1,047,137 $ 1,066,926 $ 293 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current Total Loans Receivable Loans Receivable > 90 Days and Accruing At December 31, 201 6 Commercial real estate $ - $ 9 $ 13,089 $ 13,098 $ 365,421 $ 378,519 $ - Construction and land development - - - - 61,453 61,453 - Commercial and industrial 568 - 3,151 3,719 171,025 174,744 - Owner occupied real estate 468 - 1,718 2,186 274,800 276,986 172 Consumer and other 24 22 808 854 62,806 63,660 - Residential mortgage - - 130 130 9,552 9,682 130 Total $ 1,060 $ 31 $ 18,896 $ 19,987 $ 945,057 $ 965,044 $ 302 The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of June 30, 2017 December 31, 2016: (dollars in thousands) Pass Special Mention Substandard Doubtful Total At June 30, 2 017 : Commercial real estate $ 398,400 $ 859 $ 13,436 $ - $ 412,695 Construction and land development 83,571 - - - 83,571 Commercial and industrial 171,252 580 3,688 1,429 176,949 Owner occupied real estate 282,143 - 3,336 - 285,479 Consumer and other 67,674 - 1,272 - 68,946 Residential mortgage 39,158 128 - - 39,286 Total $ 1,042,198 $ 1,567 $ 21,732 $ 1,429 $ 1,066,926 (dollars in thousands) Pass Special Mention Substandard Doubtful Total At December 31, 2016 : Commercial real estate $ 364,066 $ 877 $ 13,576 $ - $ 378,519 Construction and land development 61,453 - - - 61,453 Commercial and industrial 168,958 606 3,751 1,429 174,744 Owner occupied real estate 274,150 511 2,325 - 276,986 Consumer and other 62,370 - 1,290 - 63,660 Residential mortgage 9,552 - 130 - 9,682 Total $ 940,549 $ 1,994 $ 21,072 $ 1,429 $ 965,044 The following table shows non-accrual loans by class as of June 30, 2017 December 31, 2016: (dollars in thousands) June 30, 201 7 December 31, 201 6 Commercial real estate $ 12,961 $ 13,089 Construction and land development - - Commercial and industrial 3,309 3,151 Owner occupied real estate 1,459 1,546 Consumer and other 791 808 Residential mortgage - - Total $ 18,520 $ 18,594 If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately $210,000 $486,000 three six June 30, 2017, $313,000 $513,000 three six June 30, 2016, Troubled Debt Restructurings A modification to the contractual terms of a loan which results in a concession to a borrower that is experiencing financial difficulty is classified as a troubled debt restructuring (“TDR”). The concessions made in a TDR are those that would not may The following table summarizes the balance of outstanding TDRs June 30, 2017 December 31, 2016: (dollars in thousands) Number of Loans Accrual Status Non- Accrual Status Total TDRs June 30, 201 7 Commercial real estate 1 $ - $ 6,518 $ 6,518 Construction and land development - - - - Commercial and industrial 2 1,191 349 1,540 Owner occupied real estate 1 245 - 245 Consumer and other - - - - Residential mortgage - - - - Total 4 $ 1,436 $ 6,867 $ 8,303 December 31, 201 6 Commercial real estate 1 $ 5,669 $ - $ 5,669 Construction and land development - - - - Commercial and industrial 2 228 349 577 Owner occupied real estate - - - - Consumer and other - - - - Residential mortgage - - - - Total 3 $ 5,897 $ 349 $ 6,246 All TDRs are considered impaired and are therefore individually evaluated for impairment in the calculation of the allowance for loan losses. Some TDRs may not The Company modified one three six June 30, 2017. $975,000 five The Company modified one three six June 30, 2017. $245,000, The Company modified one $6.5 six June 30, 2017 second 2015 $421,000 There were no three six June 30, 2016 There were no June 30, 2017 December 31, 2016. $42,000 $126,000 June 30, 2017 December 31, 2016. After a loan is determined to be a TDR, the Company continues to track its performance under the most recent restructured terms. There were no three six June 30, 2017. no December 31, 2016. |