Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 8 - LOANS AND RELATED ALLOWANCE FOR LOAN AND LEASE LOSSES Major classifications of loans are summarized as follows (in thousands): March 31, December 31, 2018 2017 Commercial and industrial $ 99,809 $ 101,346 Real estate - construction 48,687 47,017 Real estate - mortgage: Residential 316,856 318,157 Commercial 448,766 437,947 Consumer installment 18,256 18,746 932,374 923,213 Less: Allowance for loan and lease losses (7,551 ) (7,190 ) Net loans $ 924,823 $ 916,023 The amounts above include deferred loan origination costs of $1.5 March 31, 2018 December 31, 2017. 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. 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 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 deferred with the net amount amortized over the contractual life of the loan as an adjustment of the related loan’s yield. The following tables summarize the primary segments of the loan portfolio and allowance for loan and lease losses (in thousands): Real Estate- Mortgage March 31, 2018 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Loans: Individually evaluated for impairment $ 8,884 $ - $ 2,716 $ 6,617 $ 3 $ 18,220 Collectively evaluated for impairment 90,925 48,687 314,140 442,149 18,253 914,154 Total loans $ 99,809 $ 48,687 $ 316,856 $ 448,766 $ 18,256 $ 932,374 Real estate- Mortgage December 31, 2017 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Loans: Individually evaluated for impairment $ 3,627 $ 44 $ 2,824 $ 5,610 $ 4 $ 12,109 Collectively evaluated for impairment 97,719 46,973 315,333 432,337 18,742 911,104 Total loans $ 101,346 $ 47,017 $ 318,157 $ 437,947 $ 18,746 $ 923,213 Real Estate- Mortgage March 31, 2018 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 $ 997 $ - $ 124 $ 756 $ - $ 1,877 Collectively evaluated for impairment 259 92 1,658 3,567 98 5,674 Total ending allowance balance $ 1,256 $ 92 $ 1,782 $ 4,323 $ 98 $ 7,551 Real Estate- Mortgage December 31, 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 $ 694 $ - $ 140 $ 733 $ - $ 1,567 Collectively evaluated for impairment 305 313 1,620 3,303 82 5,623 Total ending allowance balance $ 999 $ 313 $ 1,760 $ 4,036 $ 82 $ 7,190 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 increases in the allowance for loan loss for C&I, Residential, CRE, and Consumer Installment loan portfolios were partially offset by a decrease in the allowance for the Real Estate Construction 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 March 31, 2018 Impaired Loans Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial and industrial $ 976 $ 1,173 $ - Real estate - mortgage: Residential 1,597 1,822 - Commercial 1,629 1,767 - Total $ 4,202 $ 4,762 $ - With an allowance recorded: Commercial and industrial $ 7,908 $ 8,611 $ 997 Real estate - mortgage: Residential 1,119 1,165 124 Commercial 4,988 5,169 756 Consumer installment 3 3 - Total $ 14,018 $ 14,948 $ 1,877 Total: Commercial and industrial $ 8,884 $ 9,784 $ 997 Real estate - mortgage: Residential 2,716 2,987 124 Commercial 6,617 6,936 756 Consumer installment 3 3 - Total $ 18,220 $ 19,710 $ 1,877 December 31, 2017 Impaired Loans Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial and industrial $ 450 $ 1,006 $ - Real estate - construction 44 44 - Real estate - mortgage: Residential 1,685 1,904 - Commercial 1,870 1,984 - Consumer installment 4 4 - Total $ 4,053 $ 4,942 $ - With an allowance recorded: Commercial and industrial $ 3,177 $ 3,888 $ 694 Real estate - mortgage: Residential 1,139 1,179 140 Commercial 3,740 3,913 733 Total $ 8,056 $ 8,980 $ 1,567 Total: Commercial and industrial $ 3,627 $ 4,894 $ 694 Real estate - construction 44 44 - Real estate - mortgage: Residential 2,824 3,083 140 Commercial 5,610 5,897 733 Consumer installment 4 4 - Total $ 12,109 $ 13,922 $ 1,567 The tables above include troubled debt restructuring totaling $9.1 March 31, 2018 $5.4 December 31, 2017. The following tables present the average balance and interest income by class, recognized on impaired loans (in thousands): For the Three Months Ended March 31, 2018 For the Three Months Ended March 31, 2017 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial and industrial $ 5,631 $ 187 $ 1,372 $ 84 Real estate - construction 283 - 810 - Real estate - mortgage: Residential 2,892 21 3,092 22 Commercial 6,719 136 7,077 88 Consumer installment 4 - 5 - Total $ 15,529 $ 344 $ 12,356 $ 194 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 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): March 31, 2018 Special Total Pass Mention Substandard Doubtful Loans Commercial and industrial $ 87,415 $ 8,955 $ 3,439 $ - $ 99,809 Real estate - construction 48,687 - - - 48,687 Real estate - mortgage: Residential 310,965 715 5,176 - 316,856 Commercial 434,991 8,206 5,569 - 448,766 Consumer installment 18,082 - 174 - 18,256 Total $ 900,140 $ 17,876 $ 14,358 $ - $ 932,374 December 31, 2017 Special Total Pass Mention Substandard Doubtful Loans Commercial and industrial $ 95,621 $ 1,942 $ 3,783 $ - $ 101,346 Real estate - construction 46,995 - 22 - 47,017 Real estate - mortgage: Residential 312,176 723 5,258 - 318,157 Commercial 424,225 9,164 4,558 - 437,947 Consumer installment 18,742 - 4 - 18,746 Total $ 897,759 $ 11,829 $ 13,625 $ - $ 923,213 The increase in the amount classified as special mention for commercial and industrial loans for the three March 31, 2018 $5.8 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, TDRs, loans 90 The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans (in thousands): March 31, 2018 30-59 Days 60-89 Days 90 Days+ Total Total Current Past Due Past Due Past Due Past Due Loans Commercial and industrial $ 99,201 $ 175 $ 366 $ 67 $ 608 $ 99,809 Real estate - construction 48,647 40 - - 40 48,687 Real estate - mortgage: Residential 313,459 1,943 538 916 3,397 316,856 Commercial 445,861 1,652 260 993 2,905 448,766 Consumer installment 18,243 11 2 - 13 18,256 Total $ 925,411 $ 3,821 $ 1,166 $ 1,976 $ 6,963 $ 932,374 December 31, 2017 30-59 Days 60-89 Days 90 Days+ Total Total Current Past Due Past Due Past Due Past Due Loans Commercial and industrial $ 99,633 $ 1,607 $ 29 $ 77 $ 1,713 $ 101,346 Real estate - construction 47,017 - - - - 47,017 Real estate - mortgage: Residential 314,866 1,977 227 1,087 3,291 318,157 Commercial 434,879 1,907 1 1,160 3,068 437,947 Consumer installment 18,736 10 - - 10 18,746 Total $ 915,131 $ 5,501 $ 257 $ 2,324 $ 8,082 $ 923,213 The following tables present the classes of the loan portfolio summarized by nonaccrual loans (in thousands): March 31, 2018 90+ Days Past Nonaccrual Due and Accruing Commercial and industrial $ 1,351 $ - Real estate - construction - - Real estate - mortgage: Residential 3,934 - Commercial 3,462 - Consumer installment - - Total $ 8,747 $ - December 31, 2017 90+ Days Past Nonaccrual Due and Accruing Commercial and industrial $ 1,120 $ - Real estate - construction - - Real estate - mortgage: Residential 4,002 - Commercial 3,311 - Consumer installment - - Total $ 8,433 $ - Interest income that would have been recorded had these loans not $369,000 three March 31, 2018 $437,000 December 31, 2017. 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, 2017 $ 999 $ 313 $ 1,760 $ 4,036 $ 82 $ 7,190 Charge-offs (9 ) - - - (4 ) (13 ) Recoveries 109 17 20 - 18 164 Provision 157 (238 ) 2 287 2 210 ALLL balance at March 31, 2018 $ 1,256 $ 92 $ 1,782 $ 4,323 $ 98 $ 7,551 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 (20 ) - (68 ) (19 ) (101 ) (208 ) Recoveries 78 17 7 - 63 165 Provision 110 (3 ) (234 ) 262 30 165 ALLL balance at March 31, 2017 $ 616 $ 186 $ 2,523 $ 3,378 $ 17 $ 6,720 The negative provision allocated to real estate construction loans in the amount of $238,000 three March 31, 2018 0.127% 0.775% The negative provision allocated to residential real estate loans in the amount of $234,000 three March 31, 2017 The following tables summarize troubled debt restructurings (in thousands): For the Three Months Ended March 31, 2018 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 $ 6,977 $ 6,977 Residential real estate 2 - 2 63 63 For the Three Months Ended March 31, 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 $ 50 $ 50 Residential real estate 2 - 2 36 36 There were no three March 31, 2018. $33,000 three March 31, 2017. |