Allowance for Credit Losses [Text Block] | Note 6: and Allowance for Loan Losses The following table sets forth the Company’s gross loans by major categories as of June 30, 2018 December 31, 2017: (dollars in thousands) June 3 0 , 2018 December 31, 2017 Commercial real estate $ 489,574 $ 433,304 Construction and land development 120,165 104,617 Commercial and industrial 188,254 173,343 Owner occupied real estate 335,871 309,838 Consumer and other 83,467 76,183 Residential mortgage 100,108 64,764 Total loans receivable 1,317,439 1,162,049 Deferred costs (fees) 139 229 Allowance for loan losses (7,566 ) (8,599 ) Net loans receivable $ 1,310,012 $ 1,153,679 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 June 30, 2018 2017: (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 8 Allowance for loan losses: Beginning balance: $ 1,903 $ 751 $ 1,261 $ 1,692 $ 460 $ 508 $ 75 $ 6,650 Charge-offs - - - - (14 ) - - (14 ) Recoveries 33 - 76 20 1 - - 130 Provisions (credits) 103 21 112 144 62 130 228 800 Ending balance $ 2,039 $ 772 $ 1,449 $ 1,856 $ 509 $ 638 $ 303 $ 7,566 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 The following tables provide the activity in and ending balances of the allowance for loan losses by loan portfolio class at and for the six June 30, 2018 2017: (dollars in thousands) Commercia l 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, 201 8 Allowance for loan losses: Beginning balance: $ 3,774 $ 725 $ 1,317 $ 1,737 $ 573 $ 392 $ 81 $ 8,599 Charge-offs (1,535 ) - (151 ) (465 ) (212 ) - - (2,363 ) Recoveries 33 - 76 20 1 - - 130 Provisions (credits) (233 ) 47 207 564 147 246 222 1,200 Ending balance $ 2,039 $ 772 $ 1,449 $ 1,856 $ 509 $ 638 $ 303 $ 7,566 Six months ended June 30, 201 7 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 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, 2018 December 31, 2017: (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, 2018 Allowance for loan losses: Individually evaluated for impairment $ - $ - $ 622 $ 201 $ 68 $ - $ - $ 891 Collectively evaluated for impairment 2,039 772 827 1,655 441 638 303 6,675 Total allowance for loan losses $ 2,039 $ 772 $ 1,449 $ 1,856 $ 509 $ 638 $ 303 $ 7,566 Loans receivable: Loans evaluated individually $ 13,811 $ - $ 6,783 $ 3,400 $ 790 $ - $ - $ 24,784 Loans evaluated collectively 475,763 120,165 181,471 332,471 82,677 100,108 - 1,292,655 Total loans receivable $ 489,574 $ 120,165 $ 188,254 $ 335,871 $ 83,467 $ 100,108 $ - $ 1,317,439 (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, 2017 Allowance for loan losses: Individually evaluated for impairment $ 1,964 $ - $ 374 $ 235 $ 217 $ - $ - $ 2,790 Collectively evaluated for impairment 1,810 725 943 1,502 356 392 81 5,809 Total allowance for loan losses $ 3,774 $ 725 $ 1,317 $ 1,737 $ 573 $ 392 $ 81 $ 8,599 Loans receivable: Loans evaluated individually $ 15,415 $ - $ 4,501 $ 3,798 $ 1,002 $ - $ - $ 24,716 Loans evaluated collectively 417,889 104,617 168,842 306,040 75,181 64,764 - 1,137,333 Total loans receivable $ 433,304 $ 104,617 $ 173,343 $ 309,838 $ 76,183 $ 64,764 $ - $ 1,162,049 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, 2018 December 31, 2017: June 30, 2018 December 31, 2017 (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 $ 13,811 $ 14,699 $ - $ 9,264 $ 9,268 $ - Construction and land development - - - - - - Commercial and industrial 4,818 8,618 - 2,756 6,674 - Owner occupied real estate 2,093 2,241 - 2,595 2,743 - Consumer and other 638 986 - 655 981 - Residential mortgage - - - - - - Total $ 21,360 $ 26,544 $ - $ 15,270 $ 19,666 $ - With an allowance recorded: Commercial real estate $ - $ - $ - $ 6,151 $ 6,165 $ 1,964 Construction and land development - - - - - - Commercial and industrial 1,965 2,107 622 1,745 1,752 374 Owner occupied real estate 1,307 1,314 201 1,203 1,206 235 Consumer and other 152 153 68 347 379 217 Residential mortgage - - - - - - Total $ 3,424 $ 3,574 $ 891 $ 9,446 $ 9,502 $ 2,790 Total: Commercial real estate $ 13,811 $ 14,699 $ - $ 15,415 $ 15,433 $ 1,964 Construction and land development - - - - - - Commercial and industrial 6,783 10,725 622 4,501 8,426 374 Owner occupied real estate 3,400 3,555 201 3,798 3,949 235 Consumer and other 790 1,139 68 1,002 1,360 217 Residential mortgage - - - - - - Total $ 24,784 $ 30,118 $ 891 $ 24,716 $ 29,168 $ 2,790 The following table presents additional information regarding the Company’s impaired loans for the three June 30, 2018 June 30, 2017: Three Months Ended June 30, 201 8 201 7 (dollars in thousands) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: Commercial real estate $ 13,828 $ 72 $ 8,794 $ 95 Construction and land development - - - - Commercial and industrial 5,162 28 2,139 10 Owner occupied real estate 2,338 14 1,812 17 Consumer and other 639 1 868 5 Residential mortgage - - 21 - Total $ 21,967 $ 115 $ 13,634 $ 127 With an allowance recorded: Commercial real estate $ - $ - $ 6,515 $ 4 Construction and land development - - - - Commercial and industrial 1,774 - 3,015 17 Owner occupied real estate 1,075 6 1,380 8 Consumer and other 152 - 407 2 Residential mortgage - - - - Total $ 3,001 $ 6 $ 11,317 $ 31 Total: Commercial real estate $ 13,828 $ 72 $ 15,309 $ 99 Construction and land development - - - - Commercial and industrial 6.936 28 5,154 27 Owner occupied real estate 3,413 20 3,192 25 Consumer and other 791 1 1,275 7 Residential mortgage - - 21 - Total $ 24,968 $ 121 $ 24,951 $ 158 The following table presents additional information regarding the Company’s impaired loans for the six June 30, 2018 June 30, 2017: Six Months Ended June 30, 201 8 201 7 (dollars in thousands) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: Commercial real estate $ 12,307 $ 144 $ 10,542 $ 165 Construction and land development - - - - Commercial and industrial 4,360 33 2,035 18 Owner occupied real estate 2,423 28 1,469 29 Consumer and other 644 2 810 8 Residential mortgage - - 43 1 Total $ 19,734 $ 207 $ 14,899 $ 221 With an allowance recorded: Commercial real estate $ 2,050 $ - $ 6,637 $ 9 Construction and land development - - - - Commercial and industrial 1,765 3 3,159 34 Owner occupied real estate 1,118 12 1,577 14 Consumer and other 217 1 468 6 Residential mortgage - - - - Total $ 5,150 $ 16 $ 11,841 $ 63 Total: Commercial real estate $ 14,357 $ 144 $ 17,179 $ 174 Construction and land development - - - - Commercial and industrial 6,125 36 5,194 52 Owner occupied real estate 3,541 40 3,046 43 Consumer and other 861 3 1,278 14 Residential mortgage - - 43 1 Total $ 24,884 $ 223 $ 26,740 $ 284 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, 2018 December 31, 2017: (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 8 Commercial real estate $ 815 $ 129 $ 7,426 $ 8,370 $ 481,204 $ 489,574 $ - Construction and land development - - - - 120,165 120,165 - Commercial and industrial - - 3,885 3,885 184,369 188,254 - Owner occupied real estate - - 2,004 2,004 333,867 335,871 - Consumer and other 12 - 791 803 82,664 83,467 - Residential mortgage - - - - 100,108 100,108 - Total $ 827 $ 129 $ 14,106 $ 15,062 $ 1,302,377 $ 1,317,439 $ - (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 7 Commercial real estate $ - $ - $ 8,963 $ 8,963 $ 424,341 $ 433,304 $ - Construction and land development - - - - 104,617 104,617 - Commercial and industrial 969 - 2,895 3,864 169,479 173,343 - Owner occupied real estate - - 2,136 2,136 307,702 309,838 - Consumer and other 144 - 851 995 75,188 76,183 - Residential mortgage - - - - 64,764 64,764 - Total $ 1,113 $ - $ 14,845 $ 15,958 $ 1,146,091 $ 1,162,049 $ - 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, 2018 December 31, 2017: (dollars in thousands) Pass Special Mention Substandard Doubtful Total At June 3 0 , 2018: Commercial real estate $ 481.204 $ 944 $ 7,426 $ - $ 489,574 Construction and land development 120,165 - - - 120,165 Commercial and industrial 181,452 19 6,503 280 188,254 Owner occupied real estate 331,121 1,350 3,400 - 335,871 Consumer and other 82,677 - 790 - 83,467 Residential mortgage 99,983 125 - - 100,108 Total $ 1,296,602 $ 2,438 $ 18,119 $ 280 $ 1,317,439 (dollars in thousands) Pass Special Mention Substandard Doubtful Total At December 31, 2017: Commercial real estate $ 423,382 $ 959 $ 8,963 $ - $ 433,304 Construction and land development 104,617 - - - 104,617 Commercial and industrial 168,702 140 4,221 280 173,343 Owner occupied real estate 306,040 - 3,798 - 309,838 Consumer and other 75,181 - 1,002 - 76,183 Residential mortgage 64,637 127 - - 64,764 Total $ 1,142,559 $ 1,226 $ 17,984 $ 280 $ 1,162,049 The following table shows non-accrual loans by class as of June 30, 2018 December 31, 2017: (dollars in thousands) June 3 0 , 2018 December 31, 2017 Commercial real estate $ 7,426 $ 8,963 Construction and land development - - Commercial and industrial 3,885 2,895 Owner occupied real estate 2,004 2,136 Consumer and other 791 851 Residential mortgage - - Total $ 14,106 $ 14,845 If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately $184,000 $363,000 three six June 30, 2018, $210,000 $486,000 three six June 30, 2017, 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 information with regard to outstanding troubled debt restructurings at June 30, 2018 December 31, 2017: (dollars in thousands) Number of Loans Accrual Status Non- Accrual Status Total TDRs June 3 0 , 2018 Commercial real estate 1 $ 6,384 $ - $ 6,384 Construction and land development - - - - Commercial and industrial 3 - 1,524 1,524 Owner occupied real estate 1 - 242 242 Consumer and other - - - - Residential mortgage - - - - Total 5 $ 6,384 $ 1,766 $ 8,150 December 31, 2017 Commercial real estate 1 $ 6,452 $ - $ 6,452 Construction and land development - - - - Commercial and industrial 3 1,175 349 1,524 Owner occupied real estate 1 242 - 242 Consumer and other - - - - Residential mortgage - - - - Total 5 $ 7,869 $ 349 $ 8,218 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 There were no three six June 30, 2018 The Company modified one twelve December 31, 2017. $975,000 five The Company modified one twelve December 31, 2017. $245,000, The Company modified one $6.5 twelve December 31, 2017 second 2015 $421,000. six third 2017. 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 June 30, 2018 December 31, 2017. three six June 30, 2018. There were no June 30, 2018 December 31, 2017. $42,000 June 30, 2018 December 31, 2017. |