Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | (3) Loans Composition of loans, net of deferred fees and costs, by primary loan portfolio class follows: (in thousands) September 30, 2015 December 31, 2014 Commercial and industrial $ 610,877 $ 571,754 Construction and development, excluding undeveloped land 109,870 95,733 Undeveloped land 18,950 21,268 Real estate mortgage: Commercial investment 491,171 487,822 Owner occupied commercial 357,628 340,982 1-4 family residential 222,643 211,548 Home equity - first lien 49,937 43,779 Home equity - junior lien 62,223 66,268 Subtotal: Real estate mortgage 1,183,602 1,150,399 Consumer 31,126 29,396 Total loans $ 1,954,425 $ 1,868,550 The following table presents the balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment evaluation method as of September 30, 2015 and December 31, 2014. (in thousands) Type of loan Construction and development Commercial excluding and undeveloped Undeveloped Real estate September 30, 2015 industrial land land mortgage Consumer Total Loans $ 610,877 $ 109,870 $ 18,950 $ 1,183,602 $ 31,126 $ 1,954,425 Loans collectively evaluated for impairment $ 604,021 $ 109,523 $ 18,950 $ 1,179,342 $ 31,041 $ 1,942,877 Loans individually evaluated for impairment $ 6,778 $ 26 $ - $ 3,764 $ 85 $ 10,653 Loans acquired with deteriorated credit quality $ 78 $ 321 $ - $ 496 $ - $ 895 Construction and development Commercial excluding and undeveloped Undeveloped Real estate industrial land land mortgage Consumer Unallocated Total Allowance for loan losses At December 31, 2014 $ 11,819 $ 721 $ 1,545 $ 10,541 $ 294 $ - $ 24,920 Provision (credit) (214 ) 599 (1,327 ) 844 98 - - Charge-offs (3,346 ) - - (688 ) (447 ) - (4,481 ) Recoveries 47 - 650 118 360 - 1,175 At September 30, 2015 $ 8,306 $ 1,320 $ 868 $ 10,815 $ 305 $ - $ 21,614 Allowance for loans collectively evaluated for impairment $ 7,089 $ 1,320 $ 868 $ 10,499 $ 235 $ - $ 20,011 Allowance for loans individually evaluated for impairment $ 1,217 $ - $ - $ 316 $ 70 $ - $ 1,603 Allowance for loans acquired with deteriorated credit quality $ - $ - $ - $ - $ - $ - $ - (in thousands) Type of loan Construction and development Commercial excluding and undeveloped Undeveloped Real estate December 31, 2014 industrial land land mortgage Consumer Total Loans $ 571,754 $ 95,733 $ 21,268 $ 1,150,399 $ 29,396 $ 1,868,550 Loans collectively evaluated for impairment $ 564,443 $ 94,603 $ 21,268 $ 1,146,212 $ 29,311 $ 1,855,837 Loans individually evaluated for impairment $ 7,239 $ 516 $ - $ 3,720 $ 76 $ 11,551 Loans acquired with deteriorated credit quality $ 72 $ 614 $ - $ 467 $ 9 $ 1,162 Construction and development Commercial excluding and undeveloped Undeveloped Real estate industrial land land mortgage Consumer Unallocated Total Allowance for loan losses At December 31, 2013 $ 7,644 $ 2,555 $ 5,376 $ 12,604 $ 343 $ - $ 28,522 Provision (credit) 4,593 (1,584 ) (2,244 ) (1,190 ) 25 - (400 ) Charge-offs (661 ) (250 ) (1,753 ) (993 ) (587 ) - (4,244 ) Recoveries 243 - 166 120 513 - 1,042 At December 31, 2014 $ 11,819 $ 721 $ 1,545 $ 10,541 $ 294 $ - $ 24,920 Allowance for loans collectively evaluated for impairment $ 10,790 $ 706 $ 1,545 $ 10,285 $ 218 $ - $ 23,544 Allowance for loans individually evaluated for impairment $ 1,029 $ 15 $ - $ 256 $ 76 $ - $ 1,376 Allowance for loans acquired with deteriorated credit quality $ - $ - $ - $ - $ - $ - $ - The considerations by Bancorp in computing its allowance for loan losses are determined based on the various risk characteristics of each loan segment. Relevant risk characteristics are as follows: ● Commercial and industrial loans: Loans in this category are made to businesses. Generally these loans are secured by assets of the business and repayment is expected from the cash flows of the business. A weakened economy and resultant decreased consumer and/or business spending will have an effect on the credit quality in this loan category. ● Construction and development, excluding undeveloped land: Loans in this category primarily include owner-occupied and investment construction loans and commercial development projects. In most cases, construction loans require only interest to be paid during construction. Upon completion or stabilization, the construction loan may convert to permanent financing in the real estate mortgage segment, requiring principal amortization. Repayment of development loans is derived from sale of lots or units including any pre-sold units. Credit risk is affected by construction delays, cost overruns, market conditions and availability of permanent financing, to the extent such permanent financing is not being provided by Bancorp. ● Undeveloped land: Loans in this category are secured by land initially acquired for development by the borrower, but for which no development has yet taken place. Credit risk is affected by market conditions and time to sell lots at an adequate price. Credit risk is also affected by availability of permanent financing, to the extent such permanent financing is not being provided by Bancorp. ● Real estate mortgage: Loans in this category are made to and secured by owner-occupied residential real estate, owner-occupied real estate used for business purposes, and income-producing investment properties. Repayment is dependent on credit quality of the individual borrower. Underlying properties are generally located in Bancorp’s primary market area. Cash flows of income producing investment properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on credit quality. Overall health of the economy, including unemployment rates and real estate prices, has an effect on credit quality in this loan category. ● Consumer: Loans in this category may be either secured or unsecured and repayment is dependent on credit quality of the individual borrower and, if applicable, sale of collateral securing the loan. Therefore, overall health of the economy, including unemployment rates and stock prices, will have a significant effect on credit quality in this loan category. Bancorp has loans that were acquired in a 2013 acquisition, for which there was, at acquisition, evidence of deterioration of credit quality since origination and for which it was probable that all contractually required payments would not be collected. The carrying amount of those loans is included in the balance sheet amounts of loans at September 30, 2015 and December 31, 2014. Changes in the fair value adjustment for acquired impaired loans are shown in the following table: (in thousands) Accretable discount Non-accretable discount Balance at December 31, 2013 $ 137 $ 369 Accretion (75 ) (103 ) Reclassifications from (to) non-accretable discount - - Disposals - - Balance at December 31, 2014 62 266 Accretion (53 ) (74 ) Reclassifications from (to) non-accretable discount - - Disposals - - Balance at September 30, 2015 $ 9 $ 192 The following table presents loans individually evaluated for impairment as of September 30, 2015 and December 31, 2014. (in thousands) Unpaid Average Recorded principal Related recorded September 30, 2015 investment balance allowance investment Loans with no related allowance recorded Commercial and industrial $ 1,545 $ 4,245 $ - $ 988 Construction and development, excluding undeveloped land 26 151 - 26 Undeveloped land - - - - Real estate mortgage Commercial investment 285 542 - 154 Owner occupied commercial 1,603 2,040 - 1,591 1-4 family residential 316 316 - 600 Home equity - first lien 91 91 - 43 Home equity - junior lien 37 37 - 64 Subtotal: Real estate mortgage 2,332 3,026 - 2,452 Consumer 15 15 - 4 Subtotal $ 3,918 $ 7,437 $ - $ 3,470 Loans with an allowance recorded Commercial and industrial $ 5,233 $ 6,804 $ 1,217 $ 5,387 Construction and development, excluding undeveloped land - - - 368 Undeveloped land - - - - Real estate mortgage Commercial investment - - - 92 Owner occupied commercial 1,432 1,432 316 1,328 1-4 family residential - - - 188 Home equity - first lien - - - - Home equity - junior lien - - - - Subtotal: Real estate mortgage 1,432 1,432 316 1,608 Consumer 70 70 70 73 Subtotal $ 6,735 $ 8,306 $ 1,603 $ 7,436 Total Commercial and industrial $ 6,778 $ 11,049 $ 1,217 $ 6,375 Construction and development, excluding undeveloped land 26 151 - 394 Undeveloped land - - - - Real estate mortgage - - - - Commercial investment 285 542 - 246 Owner occupied commercial 3,035 3,472 316 2,919 1-4 family residential 316 316 - 788 Home equity - first lien 91 91 - 43 Home equity - junior lien 37 37 - 64 Subtotal: Real estate mortgage 3,764 4,458 316 4,060 Consumer 85 85 70 77 Total $ 10,653 $ 15,743 $ 1,603 $ 10,906 (in thousands) Unpaid Average Recorded principal Related recorded December 31, 2014 investment balance allowance investment Loans with no related allowance recorded Commercial and industrial $ 896 $ 3,596 $ - $ 996 Construction and development, excluding undeveloped land 26 151 - 26 Undeveloped land - - - 5,608 Real estate mortgage Commercial investment 113 113 - 198 Owner occupied commercial 1,784 2,221 - 1,939 1-4 family residential 870 870 - 782 Home equity - first lien - - - 11 Home equity - junior lien 36 36 - 69 Subtotal: Real estate mortgage 2,803 3,240 - 2,999 Consumer - - - - Subtotal $ 3,725 $ 6,987 $ - $ 9,629 Loans with an allowance recorded Commercial and industrial $ 6,343 $ 7,914 $ 1,029 $ 6,797 Construction and development, excluding undeveloped land 490 490 15 196 Undeveloped land - - - - Real estate mortgage Commercial investment 122 122 - 640 Owner occupied commercial 716 716 112 704 1-4 family residential 79 79 144 651 Home equity - first lien - - - - Home equity - junior lien - - - - Subtotal: Real estate mortgage 917 917 256 1,995 Consumer 76 76 76 80 Subtotal $ 7,826 $ 9,397 $ 1,376 $ 9,068 Total Commercial and industrial $ 7,239 $ 11,510 $ 1,029 $ 7,793 Construction and development, excluding undeveloped land 516 641 15 222 Undeveloped land - - - 5,608 Real estate mortgage - - - - Commercial investment 235 235 - 838 Owner occupied commercial 2,500 2,937 112 2,643 1-4 family residential 949 949 144 1,433 Home equity - first lien - - - 11 Home equity - junior lien 36 36 - 69 Subtotal: Real estate mortgage 3,720 4,157 256 4,994 Consumer 76 76 76 80 Total $ 11,551 $ 16,384 $ 1,376 $ 18,697 Differences between recorded investment amounts and unpaid principal balance amounts less related allowance are due to partial charge-offs which have occurred over the life of loans. Impaired loans include non-accrual loans and accruing loans accounted for as troubled debt restructurings (TDR), which continue to accrue interest. Non-performing loans include the balance of impaired loans plus any loans over 90 days past due and still accruing interest. Loans past due more than 90 days and still accruing interest amounted to $544 thousand and $329 thousand at September 30, 2015 and December 31, 2014, respectively. The following table presents the recorded investment in non-accrual loans as of September 30, 2015 and December 31, 2014. (in thousands) September 30, 2015 December 31, 2014 Commercial and industrial $ 5,769 $ 1,381 Construction and development, excluding undeveloped land 26 516 Undeveloped land - - Real estate mortgage Commercial investment 285 235 Owner occupied commercial 3,035 2,081 1-4 family residential 316 950 Home equity - first lien 91 - Home equity - junior lien 37 36 Subtotal: Real estate mortgage 3,764 3,302 Consumer 15 - Total $ 9,574 $ 5,199 Bancorp had no loans accounted for as TDR that were restructured and subsequently experienced a payment default within the previous 12 months as of September 30, 2015 or 2014. Loans accounted for as TDR include modifications from original terms such as those due to bankruptcy proceedings, certain modifications of amortization periods or extended suspension of principal payments due to customer financial difficulties. Loans accounted for as TDR, which have not defaulted, are individually evaluated for impairment and, at September 30, 2015, had a total allowance allocation of $188 thousand, compared to $703 thousand at December 31, 2014. At September 30, 2015, Bancorp did not have any outstanding commitments to lend additional funds to borrowers whose loans have been modified as TDR, compared to $458 thousand at December 31, 2014. The following table presents the aging of the recorded investment in loans as of September 30, 2015 and December 31, 2014. Recorded (in thousands) 90 or more investment days past > 90 days 30-59 days 60-89 days due (includes) Total Total and September 30, 2015 past due past due non-accrual) past due Current loans accruing Commercial and industrial $ 26 $ 25 $ 5,769 $ 5,820 $ 605,057 $ 610,877 $ - Construction and development, excluding undeveloped land - - 26 26 109,844 109,870 - Undeveloped land - - - - 18,950 18,950 - Real estate mortgage Commercial investment 427 - 285 712 490,459 491,171 - Owner occupied commercial 268 114 3,035 3,417 354,211 357,628 - 1-4 family residential 814 734 860 2,408 220,235 222,643 544 Home equity - first lien 17 72 91 180 49,757 49,937 - Home equity - junior lien 62 126 37 225 61,998 62,223 - Subtotal: Real estate mortgage 1,588 1,046 4,308 6,942 1,176,660 1,183,602 544 Consumer 36 - 15 51 31,075 31,126 - Total $ 1,650 $ 1,071 $ 10,118 $ 12,839 $ 1,941,586 $ 1,954,425 $ 544 December 31, 2014 Commercial and industrial $ 3,860 $ 3 $ 1,382 $ 5,245 $ 566,509 $ 571,754 $ 1 Construction and development, excluding undeveloped land 69 - 757 826 94,907 95,733 241 Undeveloped land - - - - 21,268 21,268 - Real estate mortgage Commercial investment 993 249 235 1,477 486,345 487,822 - Owner occupied commercial 1,272 920 2,081 4,273 336,709 340,982 - 1-4 family residential 1,801 285 1,023 3,109 208,439 211,548 73 Home equity - first lien - - 14 14 43,765 43,779 14 Home equity - junior lien 470 78 36 584 65,684 66,268 Subtotal: Real estate mortgage 4,536 1,532 3,389 9,457 1,140,942 1,150,399 87 Consumer 43 18 - 61 29,335 29,396 - Total $ 8,508 $ 1,553 $ 5,528 $ 15,589 $ 1,852,961 $ 1,868,550 $ 329 Consistent with regulatory guidance, Bancorp categorizes loans into credit risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information and current economic trends. Pass-rated loans include all risk-rated loans other than those classified as special mention, substandard, substandard non-performing and doubtful, which are defined below: ● Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp’s credit position at some future date. ● Substandard: Loans classified as substandard are inadequately protected by the paying capacity of the obligor or of collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize repayment of the debt. They are characterized by the distinct possibility that Bancorp will sustain some loss if the deficiencies are not corrected. ● Substandard non-performing: Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status or have been accounted for as troubled debt restructurings. ● Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. As of September 30, 2015 and December 31, 2014, the internally assigned risk grades of loans by category were as follows: (in thousands) Special Substandard Total September 30, 2015 Pass mention Substandard non-performing Doubtful loans Commercial and industrial $ 591,923 $ 9,946 $ 2,230 $ 6,778 $ - $ 610,877 Construction and development, excluding undeveloped land 106,558 2,945 341 26 - 109,870 Undeveloped land 18,273 520 157 - - 18,950 Real estate mortgage Commercial investment 484,638 5,755 493 285 - 491,171 Owner occupied commercial 340,032 12,038 2,523 3,035 - 357,628 1-4 family residential 220,287 1,496 - 860 - 222,643 Home equity - first lien 49,846 - - 91 - 49,937 Home equity - junior lien 61,968 97 121 37 - 62,223 Subtotal: Real estate mortgage 1,156,771 19,386 3,137 4,308 - 1,183,602 Consumer 31,041 - - 85 - 31,126 Total $ 1,904,566 $ 32,797 $ 5,865 $ 11,197 $ - $ 1,954,425 December 31, 2014 Commercial and industrial $ 546,582 $ 6,215 $ 11,717 $ 7,240 $ - $ 571,754 Construction and development, excluding undeveloped land 88,389 4,867 1,720 757 - 95,733 Undeveloped land 20,578 530 160 - - 21,268 Real estate mortgage Commercial investment 482,415 4,991 181 235 - 487,822 Owner occupied commercial 328,385 6,942 3,156 2,499 - 340,982 1-4 family residential 209,396 1,129 - 1,023 - 211,548 Home equity - first lien 43,765 - - 14 - 43,779 Home equity - junior lien 66,182 50 - 36 - 66,268 Subtotal: Real estate mortgage 1,130,143 13,112 3,337 3,807 - 1,150,399 Consumer 29,244 76 - 76 - 29,396 Total $ 1,814,936 $ 24,800 $ 16,934 $ 11,880 $ - $ 1,868,550 |