Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 7 LOANS AND RELATED ALLOWANCE FOR LOAN AND LEASE LOSSES Major classifications of loans are summarized as follows (in thousands): June 30, December 31, 2017 2016 Commercial and industrial $ 97,160 $ 60,630 Real estate - construction 35,571 23,709 Real estate - mortgage: Residential 308,519 270,830 Commercial 406,670 249,490 Consumer installment 19,944 4,481 867,864 609,140 Less: Allowance for loan and lease losses 6,605 6,598 Net loans $ 861,259 $ 602,542 The amounts above include deferred loan origination costs of $1.9 $1.7 June 30, 2017 December 31, 2016, The Company’s primary business activity is with customers located within its local Northeastern Ohio trade area, eastern Geauga County, and contiguous counties to the north, east, and south. The Company also serves the central Ohio market with offices in Dublin, Sunbury and Westerville, Ohio. The Northeastern Ohio trade area includes the newly acquired Liberty locations in Beachwood, Twinsburg, and Solon, Ohio. Commercial, residential, consumer, and agricultural loans are granted. Although the Company has a diversified loan portfolio, loans outstanding to individuals and businesses are dependent upon the local economic conditions in the Company’s immediate trade area. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding unpaid principal balances net of the allowance for loan and lease losses. Interest income is recognized as income when earned on the accrual method. The accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions, the borrower’s financial condition is such that collection of interest is doubtful. Interest received on nonaccrual loans is recorded as income or applied against principal according to management’s judgment as to the collectability of such principal. Loan origination fees and certain direct loan origination costs are being deferred and the net amount amortized as an adjustment of the related loan’s yield. Management is amortizing these amounts over the contractual life of the related loans. The following tables summarize the primary segments of the loan portfolio and allowance for loan and lease losses (in thousands): Real Estate- Mortgage June 30, 2017 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Loans: Individually evaluated for impairment $ 3,084 $ 541 $ 3,170 $ 10,209 $ 4 $ 17,008 Collectively evaluated for impairment 94,076 35,030 305,349 396,461 19,940 850,856 Total loans $ 97,160 $ 35,571 $ 308,519 $ 406,670 $ 19,944 $ 867,864 Real estate- Mortgage December 31, 2016 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Loans: Individually evaluated for impairment $ 1,190 $ 913 $ 3,135 $ 7,187 $ 5 $ 12,430 Collectively evaluated for impairment 59,440 22,796 267,695 242,303 4,476 596,710 Total loans $ 60,630 $ 23,709 $ 270,830 $ 249,490 $ 4,481 $ 609,140 Real Estate- Mortgage June 30, 2017 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Allowance for loan and lease losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 335 $ - $ 190 $ 1,207 $ - $ 1,732 Collectively evaluated for impairment 278 202 1,577 2,805 11 4,873 Total ending allowance balance $ 613 $ 202 $ 1,767 $ 4,012 $ 11 $ 6,605 Real Estate- Mortgage December 31, 2016 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Allowance for loan and lease losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 90 $ - $ 251 $ 186 $ - $ 527 Collectively evaluated for impairment 358 172 2,567 2,949 25 6,071 Total ending allowance balance $ 448 $ 172 $ 2,818 $ 3,135 $ 25 $ 6,598 The Company’s loan portfolio is segmented to a level that allows management to monitor risk and performance. The portfolio is segmented into Commercial and Industrial (“C&I”), Real Estate Construction, Real Estate - Mortgage which is further segmented into Residential and Commercial real estate (“CRE”), and Consumer Installment Loans. The C&I loan segment consists of loans made for the purpose of financing the activities of commercial customers. The residential mortgage loan segment consists of loans made for the purpose of financing the activities of residential homeowners. The commercial mortgage loan segment consists of loans made for the purpose of financing the activities of commercial real estate owners and operators. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts. The increase in the allowance for loan loss for C&I, Real Estate Construction, and CRE loan portfolios were partially offset by a decreases in the allowance for the Residential and Consumer Installment loan portfolio. Management evaluates individual loans in all of the commercial segments for possible impairment based on guidance established by the Board of Directors. Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Company does not Once the determination has been made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is measured by comparing the recorded investment in the loan to the fair value of the loan using one not The following tables present impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not June 30, 2017 Impaired Loans Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial and industrial $ 1,539 $ 1,535 $ - Real estate - construction 541 507 - Real estate - mortgage: Residential 2,073 2,059 - Commercial 3,071 3,045 - Consumer installment - - - Total $ 7,224 $ 7,146 $ - With an allowance recorded: Commercial and industrial $ 1,545 $ 1,538 $ 335 Real estate - construction - - - Real estate - mortgage: Residential 1,097 1,093 190 Commercial 7,138 7,092 1,207 Consumer installment 4 4 - Total $ 9,784 $ 9,727 $ 1,732 Total: Commercial and industrial $ 3,084 $ 3,073 $ 335 Real estate - construction 541 507 - Real estate - mortgage: Residential 3,170 3,152 190 Commercial 10,209 10,137 1,207 Consumer installment 4 4 - Total $ 17,008 $ 16,873 $ 1,732 December 31, 2016 Impaired Loans Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial and industrial $ 319 $ 318 $ - Real estate - construction 913 909 - Real estate - mortgage: Residential 2,142 2,140 - Commercial 2,031 2,027 - Consumer installment - - - Total $ 5,405 $ 5,394 $ - With an allowance recorded: Commercial and industrial $ 871 $ 868 $ 90 Real estate - construction - - - Real estate - mortgage: Residential 993 991 251 Commercial 5,156 5,147 186 Consumer installment 5 5 - Total $ 7,025 $ 7,011 $ 527 Total: Commercial and industrial $ 1,190 $ 1,186 $ 90 Real estate - construction 913 909 - Real estate - mortgage: Residential 3,135 3,131 251 Commercial 7,187 7,174 186 Consumer installment 5 5 - Total $ 12,430 $ 12,405 $ 527 The tables above include troubled debt restructuring totaling $2.4 June 30, 2017 $6.7 December 31, 2016. The following tables present the average balance and interest income by class, recognized on impaired loans (in thousands): For the Three Months Ended June 30, 2017 For the Six Months Ended June 30, 2017 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Total: Commercial and industrial $ 2,228 $ 57 $ 1,889 $ 141 Real estate - construction 676 1 877 1 Real estate - mortgage: Residential 3,131 28 3,264 50 Commercial 8,643 95 8,223 183 Consumer installment 5 - 5 - $ 14,683 $ 181 $ 14,258 $ 375 For the Three Months Ended June 30, 2016 For the Six Months Ended June 30, 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Total: Commercial and industrial $ 1,110 $ 12 $ 1,343 $ 25 Real estate - construction 1,368 24 1,508 49 Real estate - mortgage: Residential 3,761 37 3,801 73 Commercial 8,565 125 7,775 248 Consumer installment 6 - 6 - $ 14,810 $ 198 $ 14,433 $ 395 Management uses a nine first five not not not 90 To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan-rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as bankruptcy, repossession, or death, occurs to raise awareness of a possible credit event. The Company’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis with the Chief Credit Officer ultimately responsible for accurate and timely risk ratings. The Credit Department performs an annual review of all commercial relationships with loan balances of $1,000,000 $250,000 $125,000. The primary risk of commercial and industrial loans is the current economic uncertainties. C&I loans are, by nature, secured by less substantial collateral than real estate-secured loans. The primary risk of real estate construction loans is potential delays and /or disputes during the completion process. The primary risk of residential real estate loans is current economic uncertainties along with the slow recovery in the housing market. The primary risk of commercial real estate loans is loss of income of the owner or occupier of the property and the inability of the market to sustain rent levels. Consumer installment loans historically have experienced higher delinquency rates. Consumer installments are typically secured by less substantial collateral than other types of credits. The following tables present the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk-rating system (in thousands): Special Total Pass Mention Substandard Doubtful Loans June 30, 2017 Commercial and industrial $ 90,595 $ 2,373 $ 4,192 $ - $ 97,160 Real estate - construction 35,548 - 23 - 35,571 Real estate - mortgage: Residential 302,243 908 5,368 - 308,519 Commercial 393,854 4,795 8,021 - 406,670 Consumer installment 19,710 - 234 - 19,944 Total $ 841,950 $ 8,076 $ 17,838 $ - $ 867,864 Special Total December 31, 2016 Pass Mention Substandard Doubtful Loans Commercial and industrial $ 58,539 $ 663 $ 1,428 $ - $ 60,630 Real estate - construction 23,541 144 24 - 23,709 Real estate - mortgage: Residential 264,481 428 5,921 - 270,830 Commercial 240,678 4,422 4,390 - 249,490 Consumer installment 4,467 - 14 - 4,481 Total $ 591,706 $ 5,657 $ 11,777 $ - $ 609,140 Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. Nonperforming assets include nonaccrual loans, troubled debt restructurings (TDRs), loans 90 The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans (in thousands): 30-59 Days 60-89 Days 90 Days+ Total Total Current Past Due Past Due Past Due Past Due Loans June 30, 2017 Commercial and industrial $ 96,613 $ 451 $ 59 $ 37 $ 547 $ 97,160 Real estate - construction 35,571 - - - - 35,571 Real estate - mortgage: Residential 305,929 1,229 438 923 2,590 308,519 Commercial 405,145 1,069 - 456 1,525 406,670 Consumer installment 19,927 9 8 - 17 19,944 Total $ 863,185 $ 2,758 $ 505 $ 1,416 $ 4,679 $ 867,864 30-59 Days 60-89 Days 90 Days+ Total Total Current Past Due Past Due Past Due Past Due Loans December 31, 2016 Commercial and industrial $ 60,407 $ 17 $ 2 $ 204 $ 223 $ 60,630 Real estate - construction 23,709 - - - - 23,709 Real estate - mortgage: Residential 268,041 1,909 207 673 2,789 270,830 Commercial 249,081 92 - 317 409 249,490 Consumer installment 4,465 - 10 6 16 4,481 Total $ 605,703 $ 2,018 $ 219 $ 1,200 $ 3,437 $ 609,140 The following tables present the classes of the loan portfolio summarized by nonaccrual loans (in thousands): June 30, 2017 90+ Days Past Nonaccrual Due and Accruing Commercial and industrial $ 1,222 $ - Real estate - construction - - Real estate - mortgage: Residential 3,839 199 Commercial 5,152 - Total $ 10,213 $ 199 December 31, 2016 90+ Days Past Nonaccrual Due and Accruing Commercial and industrial $ 454 $ - Real estate - construction - - Real estate - mortgage: Residential 4,034 - Commercial 1,409 - Consumer installment 6 - Total $ 5,903 $ - Interest income that would have been recorded had these loans not $278,400 six June 30, 2017 $309,000 December 31, 2016. An allowance for loan and lease losses (“ALLL”) is maintained to absorb losses from the loan portfolio. The ALLL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of nonperforming loans. The Company’s methodology for determining the ALLL is based on the requirements of ASC Section 310 10 35 450 20 two may Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are modified by other qualitative factors. The classes described above, which are based on the purpose code assigned to each loan, provide the starting point for the ALLL analysis. Management tracks the historical net charge-off activity at the purpose code level. The historical charge-off factor was calculated using the last twelve Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience. The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources are: national and local economic trends and conditions; levels of and trends in delinquency rates and nonaccrual loans; trends in volumes and terms of loans; effects of changes in lending policies; experience, ability, and depth of lending staff; value of underlying collateral; and concentrations of credit from a loan type, industry and/or geographic standpoint. Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALLL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALLL. The following tables summarize the primary segments of the loan portfolio (in thousands): Commercial and industrial Real estate- construction Real estate- residential mortgage Real estate- commercial mortgage Consumer installment Total ALLL balance at December 31, 2016 $ 448 $ 172 $ 2,818 $ 3,135 $ 25 $ 6,598 Charge-offs (435 ) - (74 ) (19 ) (154 ) (682 ) Recoveries 144 22 14 - 174 354 Provision 456 8 (991 ) 896 (34 ) 335 ALLL balance at June 30, 2017 $ 613 $ 202 $ 1,767 $ 4,012 $ 11 $ 6,605 Commercial and industrial Real estate- construction Real estate- residential mortgage Real estate- commercial mortgage Consumer installment Total ALLL balance at December 31, 2015 $ 867 $ 276 $ 3,139 $ 2,078 $ 25 $ 6,385 Charge-offs (123 ) - (244 ) (70 ) (15 ) (452 ) Recoveries 47 - 31 140 5 223 Provision (307 ) (117 ) (138 ) 761 11 210 ALLL balance at June 30, 2016 $ 484 $ 159 $ 2,788 $ 2,909 $ 26 $ 6,366 Commercial and industrial Real estate- construction Real estate- residential mortgage Real estate- commercial mortgage Consumer installment Total ALLL balance at March 31, 2017 $ 616 $ 186 $ 2,523 $ 3,378 $ 17 $ 6,720 Charge-offs (415 ) - (7 ) - (52 ) (474 ) Recoveries 65 6 7 - 111 189 Provision 347 10 (756 ) 634 (65 ) 170 ALLL balance at June 30, 2017 $ 613 $ 202 $ 1,767 $ 4,012 $ 11 $ 6,605 Commercial and industrial Real estate- construction Real estate- residential mortgage Real estate- commercial mortgage Consumer i nstallment Total ALLL balance at March 31, 2016 $ 583 $ 247 $ 2,716 $ 2,783 $ 28 $ 6,357 Charge-offs (3 ) - (202 ) (70 ) - (275 ) Recoveries 9 - 28 140 2 179 Provision (105 ) (88 ) 246 56 (4 ) 105 ALLL balance at June 30, 2016 $ 484 $ 159 $ 2,788 $ 2,909 $ 26 $ 6,366 The following tables summarize troubled debt restructurings (in thousands): For the Three Months Ended June 30, 2017 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Commercial and industrial - 1 1 $ 904 $ 905 Residential real estate 1 - 1 7 7 For the Six Months Ended June 30, 2017 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Commercial and industrial 1 1 2 $ 954 $ 955 Residential real estate 2 - 2 10 10 For the Three Months Ended June 30, 2016 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Commercial and industrial 1 - 1 $ 3 $ 3 Residential real estate 1 - 1 58 58 Commercial real estate 1 - 1 311 311 For the Six Months Ended June 30, 2016 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Commercial and industrial 2 - 2 $ 169 $ 169 Residential real estate 1 - 1 58 58 Commercial real estate 1 - 1 311 311 One $33,000, three March 31, 2017. June 30, 2017. no three six June 30, 2017. One $ 270,000 three six June 30, 2016. |