Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | (5) The composition of loans by primary loan portfolio class follows: December 31, (in thousands) 2016 2015 Commercial and industrial $ 736,841 $ 644,398 Construction and development, excluding undeveloped land 192,348 134,482 Undeveloped land 21,496 21,185 Real estate mortgage: Commercial investment 538,886 436,989 Owner occupied commercial 408,292 420,666 1-4 family residential 249,498 226,575 Home equity - first lien 55,325 50,115 Home equity - junior lien 67,519 63,066 Subtotal: Real estate mortgage 1,319,520 1,197,411 Consumer 35,170 35,531 Total loans $ 2,305,375 $ 2,033,007 Fees and costs of originating loans are deferred at origination and amortized over the life of the loan. Loan balances reported herein include deferred loan origination fees, net of deferred loan costs. At December 31, 2016 2015, ($459) ($520) December 31, 2016, 2015, Bancorp’s credit exposure is diversified with secured and unsecured loans to individuals and businesses. No specific industry concentration exceeds ten Bancorp occasionally enters into loan participation agreements with other banks in the ordinary course of business to diversify credit risk. For certain sold participation loans, Bancorp has retained effective control of the loans, typically by restricting the participating institutions from pledging or selling their share of the loan without permission from Bancorp. US GAAP requires the participated portion of these loans to be recorded as secured borrowings. The participated portions of these loans are included in the commercial and industrial loan (C&I) totals above, and a corresponding liability is reflected in other liabilities. At December 31, 2016 2015, $15.8 $7.2 Loans to directors and their associates, including loans to companies for which directors are principal owners and executive officers are presented in the following table. (in thousands) Year ended December 31, Loans to directors and executive officers 201 6 201 5 Balance as of January 1 $ 866 $ 11,790 New loans - - Repayment of term loans (340 ) (560 ) Changes in balances of revolving lines of credit 443 562 Adjustment for Board member resignation - (10,926 ) Balance as of December 31 $ 969 $ 866 None 2016 2015. The following tables present balances in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment evaluation method as of December 31, 2016, 2015 2014. (in thousands) Type of loan Construction and development Commercial excluding and undeveloped Undeveloped Real estate December 31, 2016 industrial land land mortgage Consumer Total Loans $ 736,841 $ 192,348 $ 21,496 $ 1,319,520 $ 35,170 $ 2,305,375 Loans individually evaluated for impairment $ 2,682 $ 538 $ 474 $ 2,516 $ 59 $ 6,269 Loans collectively evaluated for impairment $ 734,139 $ 191,810 $ 21,022 $ 1,316,400 $ 35,111 $ 2,298,482 Loans acquired with deteriorated credit quality $ 20 $ - $ - $ 604 $ - $ 624 Construction and development Commercial excluding and undeveloped Undeveloped Real estate industrial land land mortgage Consumer Total Allowance for loan losses At December 31, 2015 $ 8,645 $ 1,760 $ 814 $ 10,875 $ 347 $ 22,441 Provision (credit) 2,775 275 (130 ) (68 ) 148 3,000 Charge-offs (1,216 ) (133 ) - (576 ) (568 ) (2,493 ) Recoveries 279 21 - 342 417 1,059 At December 31, 2016 $ 10,483 $ 1,923 $ 684 $ 10,573 $ 344 $ 24,007 Allowance for loans individually evaluated for impairment $ 1,207 $ - $ 1 $ - $ 59 $ 1,267 Allowance for loans collectively evaluated for impairment $ 9,276 $ 1,923 $ 683 $ 10,573 $ 285 $ 22,740 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, 2015 industrial land land mortgage Consumer Total Loans $ 644,398 $ 134,482 $ 21,185 $ 1,197,411 $ 35,531 $ 2,033,007 Loans individually evaluated for impairment $ 4,635 $ - $ - $ 4,050 $ 68 $ 8,753 Loans collectively evaluated for impairment $ 639,760 $ 134,160 $ 21,185 $ 1,192,864 $ 35,463 $ 2,023,432 Loans acquired with deteriorated credit quality $ 3 $ 322 $ - $ 497 $ - $ 822 Construction and development Commercial excluding and undeveloped Undeveloped Real estate industrial land land mortgage Consumer Total Allowance for loan losses At December 31, 2014 $ 11,819 $ 721 $ 1,545 $ 10,541 $ 294 $ 24,920 Provision (credit) 793 1,065 (2,131 ) 872 151 750 Charge-offs (4,065 ) (26 ) - (693 ) (597 ) (5,381 ) Recoveries 98 - 1,400 155 499 2,152 At December 31, 2015 $ 8,645 $ 1,760 $ 814 $ 10,875 $ 347 $ 22,441 Allowance for loans individually evaluated for impairment $ 268 $ - $ - $ 208 $ 68 $ 544 Allowance for loans collectively evaluated for impairment $ 8,377 $ 1,760 $ 814 $ 10,667 $ 279 $ 21,897 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 individually evaluated for impairment $ 7,239 $ 516 $ - $ 3,720 $ 76 $ 11,551 Loans collectively evaluated for impairment $ 564,443 $ 94,603 $ 21,268 $ 1,146,212 $ 29,311 $ 1,855,837 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 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 individually evaluated for impairment $ 1,029 $ 15 $ - $ 256 $ 76 $ 1,376 Allowance for loans collectively evaluated for impairment $ 10,790 $ 706 $ 1,545 $ 10,285 $ 218 $ 23,544 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 cash flows of the business. A decline in the strength of the business or a weakened economy and resultant decreased consumer and/or business spending may ● 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 ● Undeveloped land: Loans in this category are secured by land acquired for development by the borrower, but for which no development has yet taken place. Credit risk is primarily dependent upon financial strength of the borrower, but can also be affected by market conditions and time to sell lots at an adequate price. Credit risk is also affected by availability of permanent financing, including to the end user, 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. For owner-occupied residential and owner-occupied commercial real estate, repayment is dependent on financial strength of the borrower. For income-producing investment properties, repayment is dependent on financial strength of both the tenants may ● Consumer: Loans in this category may Bancorp has loans that were acquired in a 2013 December 31, 2016 2015. December 31, 2015 2016 (in thousands) Accretable discount Non- accretable discount Balance at December 31, 2014 $ 62 $ 266 Accretion (59 ) (77 ) Reclassifications from (to) non-accretable difference - - Disposals - - Balance at December 31, 2015 3 189 Accretion (3 ) (41 ) Reclassifications from (to) non-accretable difference - - Disposals - - Balance at December 31, 2016 $ 0 $ 148 Accretion in the non-accretable discount column represents accretion recorded upon payoff of loans. The following tables present loans individually evaluated for impairment as of December 31, 2016 2015. (in thousands) Unpaid Average Recorded principal Related recorded December 31, 2016 investment balance allowance investment Loans with no related allowance recorded: Commercial and industrial $ 322 $ 465 $ - $ 1,947 Construction and development, excluding undeveloped land 538 708 - 108 Undeveloped land 233 265 - 76 Real estate mortgage Commercial investment 107 107 - 193 Owner occupied commercial 1,042 1,479 - 1,356 1-4 family residential 984 985 - 980 Home equity - first lien - - - 3 Home equity - junior lien 383 383 - 315 Subtotal: Real estate mortgage 2,516 2,954 - 2,847 Consumer - - - 18 Subtotal $ 3,609 $ 4,392 $ - $ 4,996 Loans with an allowance recorded: Commercial and industrial $ 2,360 $ 2,835 $ 1,207 $ 1,619 Construction and development, excluding undeveloped land - - - 182 Undeveloped land 241 241 1 149 Real estate mortgage Commercial investment - - - - Owner occupied commercial - - - 554 1-4 family residential - - - - Home equity - first lien - - - - Home equity - junior lien - - - - Subtotal: Real estate mortgage - - - 554 Consumer 59 59 59 63 Subtotal $ 2,660 $ 3,135 $ 1,267 $ 2,567 Total: Commercial and industrial $ 2,682 $ 3,300 $ 1,207 $ 3,566 Construction and development, excluding undeveloped land 538 708 - 290 Undeveloped land 474 506 1 225 Real estate mortgage - - - - Commercial investment 107 107 - 193 Owner occupied commercial 1,042 1,479 - 1,910 1-4 family residential 984 985 - 980 Home equity - first lien - - - 3 Home equity - junior lien 383 383 - 315 Subtotal: Real estate mortgage 2,516 2,954 - 3,401 Consumer 59 59 59 81 Total $ 6,269 $ 7,527 $ 1,267 $ 7,563 (in thousands) Unpaid Average Recorded principal Related recorded December 31, 2015 investment balance allowance investment Loans with no related allowance recorded: Commercial and industrial $ 3,119 $ 3,859 $ - $ 1,414 Construction and development, excluding undeveloped land - 151 - 21 Undeveloped land - - - - Real estate mortgage Commercial investment 278 278 - 178 Owner occupied commercial 1,743 2,713 - 1,622 1-4 family residential 906 906 - 661 Home equity - first lien 13 13 - 37 Home equity - junior lien 92 92 - 69 Subtotal: Real estate mortgage 3,032 4,002 - 2,567 Consumer - - - 3 Subtotal $ 6,151 $ 8,012 $ - $ 4,005 Loans with an allowance recorded: Commercial and industrial $ 1,516 $ 3,087 $ 268 $ 4,612 Construction and development, excluding undeveloped land - - - 368 Undeveloped land - - - - Real estate mortgage Commercial investment - - - 92 Owner occupied commercial 1,018 1,018 208 1,266 1-4 family residential - - - 188 Home equity - first lien - - - - Home equity - junior lien - - - - Subtotal: Real estate mortgage 1,018 1,018 208 1,546 Consumer 68 68 68 72 Subtotal $ 2,602 $ 4,173 $ 544 $ 6,598 Total: Commercial and industrial $ 4,635 $ 6,946 $ 268 $ 6,026 Construction and development, excluding undeveloped land - 151 - 389 Undeveloped land - - - - Real estate mortgage - - - - Commercial investment 278 278 - 270 Owner occupied commercial 2,761 3,731 208 2,888 1-4 family residential 906 906 - 849 Home equity - first lien 13 13 - 37 Home equity - junior lien 92 92 - 69 Subtotal: Real estate mortgage 4,050 5,020 208 4,113 Consumer 68 68 68 75 Total $ 8,753 $ 12,185 $ 544 $ 10,603 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 and fair value adjustments recorded for loans acquired. Interest paid on impaired or non-accrual loans that was used to reduce principal was $307 $521 $284 2016, 2015, 2014, $149 $465 $376 2016, 2015 2014, Impaired loans include non-accrual loans and loans accounted for as troubled debt restructurings (TDRs), which continue to accrue interest. Non-performing loans include the balance of impaired loans plus any loans over 90 90 $438 $176 December 31, 2016 2015, The following table presents the recorded investment in non-accrual loans as of December 31, 2016 2015. December 31, (in thousands) 2016 2015 Commercial and industrial $ 1,767 $ 3,643 Construction and development, excluding undeveloped land 538 - Undeveloped land 474 - Real estate mortgage Commercial investment 107 278 Owner occupied commercial 1,042 2,761 1-4 family residential 984 906 Home equity - first lien - 13 Home equity - junior lien 383 92 Subtotal: Real estate mortgage 2,516 4,050 Consumer - - Total $ 5,295 $ 7,693 In the course of working with borrowers, Bancorp may $974 $1.1 December 31, 2016 2015, two one not December 31, 2016, 2015 2014. Loans accounted for as TDRs are individually evaluated for impairment. At December 31, 2016 $207 $177 December 31, 2015. At December 31, 2016 2015, no The following table presents the aging of the recorded investment in loans as of December 31, 2016 2015. Recorded (in thousands) 90 or more investment days past > 90 days 30-59 days 60-89 days due (includes) Total Total and December 31, 2016 Current past due past due non-accrual) past due loans accruing Commercial and industrial $ 734,682 $ 84 $ 290 $ 1,785 $ 2,159 $ 736,841 $ 18 Construction and development, excluding undeveloped land 191,810 - - 538 538 192,348 - Undeveloped land 21,022 - - 474 474 21,496 - Real estate mortgage Commercial investment 537,998 631 64 193 888 538,886 86 Owner occupied commercial 406,726 342 - 1,224 1,566 408,292 182 1-4 family residential 246,730 1,174 576 1,018 2,768 249,498 34 Home equity - first lien 55,027 231 21 46 298 55,325 46 Home equity - junior lien 66,911 99 126 383 608 67,519 72 Subtotal: Real estate mortgage 1,313,392 2,477 787 2,864 6,128 1,319,520 420 Consumer 34,965 28 105 72 205 35,170 - Total $ 2,295,871 $ 2,589 $ 1,182 $ 5,733 $ 9,504 $ 2,305,375 $ 438 December 31, 2015 Commercial and industrial $ 640,190 $ 238 $ 327 $ 3,643 $ 4,208 $ 644,398 $ - Construction and development, excluding undeveloped land 134,482 - - - - 134,482 - Undeveloped land 21,185 - - - - 21,185 - Real estate mortgage Commercial investment 436,281 290 140 278 708 436,989 - Owner occupied commercial 417,905 - - 2,761 2,761 420,666 - 1-4 family residential 224,252 1,147 94 1,082 2,323 226,575 176 Home equity - first lien 50,016 35 51 13 99 50,115 - Home equity - junior lien 62,516 285 173 92 550 63,066 - Subtotal: Real estate mortgage 1,190,970 1,757 458 4,226 6,441 1,197,411 176 Consumer 35,180 343 8 - 351 35,531 - Total $ 2,022,007 $ 2,338 $ 793 $ 7,869 $ 11,000 $ 2,033,007 $ 176 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 other assets especially mentioned, substandard, and doubtful, which are defined below: ● Other assets especially mentioned (“OAEM”): Loans classified as OAEM have a potential weakness that deserves management's close attention. These potential weaknesses may ● 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 well-defined weaknesses that may ● Substandard non-performing: Loans classified as substandard non-performing have deteriorated beyond 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 weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. As of December 31, 2016 2015, (in thousands) Substandard Total December 31, 2016 Pass OAEM Substandard non-performing Doubtful loans Commercial and industrial $ 714,025 $ 14,266 $ 5,850 $ 2,700 $ - $ 736,841 Construction and development, excluding undeveloped land 191,455 - 355 538 - 192,348 Undeveloped land 21,022 - - 474 - 21,496 Real estate mortgage Commercial investment 538,688 - 5 193 - 538,886 Owner occupied commercial 396,997 7,960 2,111 1,224 - 408,292 1-4 family residential 247,888 - 592 1,018 - 249,498 Home equity - first lien 55,279 - - 46 - 55,325 Home equity - junior lien 66,710 - 426 383 - 67,519 Subtotal: Real estate mortgage 1,305,562 7,960 3,134 2,864 - 1,319,520 Consumer 35,039 - - 131 - 35,170 Total $ 2,267,103 $ 22,226 $ 9,339 $ 6,707 $ - $ 2,305,375 December 31, 2015 Commercial and industrial $ 612,853 $ 19,672 $ 7,238 $ 4,635 $ - $ 644,398 Construction and development, excluding undeveloped land 133,342 773 367 - - 134,482 Undeveloped land 20,513 517 155 - - 21,185 Real estate mortgage Commercial investment 434,528 2,183 - 278 - 436,989 Owner occupied commercial 397,357 17,135 3,413 2,761 - 420,666 1-4 family residential 224,645 848 - 1,082 - 226,575 Home equity - first lien 50,102 - - 13 - 50,115 Home equity - junior lien 62,924 50 - 92 - 63,066 Subtotal: Real estate mortgage 1,169,556 20,216 3,413 4,226 - 1,197,411 Consumer 35,463 - - 68 - 35,531 Total $ 1,971,727 $ 41,178 $ 11,173 $ 8,929 $ - $ 2,033,007 |