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): June 30, December 31, 2018 2017 Commercial and industrial $ 101,975 $ 101,346 Real estate - construction 45,647 47,017 Real estate - mortgage: Residential 320,858 318,157 Commercial 457,050 437,947 Consumer installment 18,144 18,746 943,674 923,213 Less: Allowance for loan and lease losses (7,502 ) (7,190 ) Net loans $ 936,172 $ 916,023 The amounts above include deferred loan origination costs of $1.5 June 30, 2018 December 31, 2017. The Company’s primary business activity is with customers located within its local Northeastern Ohio trade area, Geauga County, and contiguous counties. 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 payments received on nonaccrual loans are applied against the unpaid principal balance until nonaccrual status is restored. 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 June 30, 2018 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Loans: Individually evaluated for impairment $ 2,923 $ - $ 2,652 $ 6,209 $ 3 $ 11,787 Collectively evaluated for impairment 99,052 45,647 318,206 450,841 18,141 931,887 Total loans $ 101,975 $ 45,647 $ 320,858 $ 457,050 $ 18,144 $ 943,674 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 June 30, 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 $ 879 $ - $ 82 $ 607 $ 1 $ 1,569 Collectively evaluated for impairment 301 89 1,661 3,754 128 5,933 Total ending allowance balance $ 1,180 $ 89 $ 1,743 $ 4,361 $ 129 $ 7,502 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 June 30, 2018 Impaired Loans Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial and industrial $ 339 $ 538 $ - Real estate - mortgage: Residential 1,812 2,085 - Commercial 2,002 2,164 - Total $ 4,153 $ 4,787 $ - With an allowance recorded: Commercial and industrial $ 2,584 $ 3,278 $ 879 Real estate - mortgage: Residential 840 962 82 Commercial 4,207 4,319 607 Consumer installment 3 3 1 Total $ 7,634 $ 8,562 $ 1,569 Total: Commercial and industrial $ 2,923 $ 3,816 $ 879 Real estate - mortgage: Residential 2,652 3,047 82 Commercial 6,209 6,483 607 Consumer installment 3 3 1 Total $ 11,787 $ 13,349 $ 1,569 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 restructurings totaling $3.1 June 30, 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 June 30, 2018 For the Six Months Ended June 30, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial and industrial $ 4,277 $ 23 $ 3,644 $ 47 Real estate - construction 142 - 283 - Real estate - mortgage: Residential 2,772 13 2,871 27 Commercial 6,464 51 6,583 102 Consumer installment 4 - 4 - Total $ 13,659 $ 87 $ 13,385 $ 176 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 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 - Total $ 14,683 $ 181 $ 14,258 $ 375 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 $500,000 $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): Special Total June 30, 2018 Pass Mention Substandard Doubtful Loans Commercial and industrial $ 95,486 $ 3,095 $ 3,394 $ - $ 101,975 Real estate - construction 44,289 1,358 - - 45,647 Real estate - mortgage: Residential 315,277 706 4,875 - 320,858 Commercial 446,026 5,859 5,165 - 457,050 Consumer installment 17,969 - 175 - 18,144 Total $ 919,047 $ 11,018 $ 13,609 $ - $ 943,674 Special Total December 31, 2017 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 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): 30-59 Days 60-89 Days 90 Days+ Total Total June 30, 2018 Current Past Due Past Due Past Due Past Due Loans Commercial and industrial $ 101,459 $ 50 $ 45 $ 421 $ 516 $ 101,975 Real estate - construction 45,647 - - - - 45,647 Real estate - mortgage: Residential 316,239 2,620 853 1,146 4,619 320,858 Commercial 456,006 67 - 977 1,044 457,050 Consumer installment 18,124 14 6 - 20 18,144 Total $ 937,475 $ 2,751 $ 904 $ 2,544 $ 6,199 $ 943,674 30-59 Days 60-89 Days 90 Days+ Total Total December 31, 2017 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): 90+ Days Past June 30, 2018 Nonaccrual Due and Accruing Commercial and industrial $ 1,411 $ 15 Real estate - construction - - Real estate - mortgage: Residential 3,843 - Commercial 3,102 - Consumer installment 1 - Total $ 8,357 $ 15 90+ Days Past December 31, 2017 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 $654,000 six June 30, 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 and the activity within those segments (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 ) - (74 ) (111 ) (135 ) (329 ) Recoveries 140 17 29 - 35 221 Provision 50 (241 ) 28 436 147 420 ALLL balance at June 30, 2018 $ 1,180 $ 89 $ 1,743 $ 4,361 $ 129 $ 7,502 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 March 31, 2018 $ 1,256 $ 92 $ 1,782 $ 4,323 $ 98 $ 7,551 Charge-offs - - (74 ) (111 ) (130 ) (315 ) Recoveries 29 - 10 - 17 56 Provision (105 ) (3 ) 25 149 144 210 ALLL balance at June 30, 2018 $ 1,180 $ 89 $ 1,743 $ 4,361 $ 129 $ 7,502 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 The negative provision allocated to real estate construction loans in the amount of $241,000 six June 30, 2018 0.127% 0.775% first 2018. The ALLL balance for real estate-commercial mortgage loans as of June 30, 2018 8.7% June 30, 2017, The negative provision allocated to residential real estate loans in the amount of $991,000 six June 30, 2017 The following tables summarize troubled debt restructurings (in thousands): For the Three Months Ended June 30, 2018 Number of Contracts Pre-Modification Post-Modification Troubled Debt Restructurings Term Modification Other Total Outstanding Recorded Investment Outstanding Recorded Investment Residential real estate 1 - 1 $ 113 $ 113 For the Six Months Ended June 30, 2018 Number of Contracts Pre-Modification Post-Modification Troubled Debt Restructurings Term Modification Other Total Outstanding Recorded Investment Outstanding Recorded Investment Residential real estate 2 - 2 160 160 For the Three Months Ended June 30, 2017 Number of Contracts Pre-Modification Post-Modification Troubled Debt Restructurings Term Modification Other Total Outstanding Recorded Investment Outstanding Recorded 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 Troubled Debt Restructurings Term Modification Other Total Outstanding Recorded Investment Outstanding Recorded Investment Commercial and industrial 1 1 2 $ 954 $ 955 Residential real estate 2 - 2 10 10 The following table summarizes TDR modifications within the previous 12 three six June 30, 2018 June 30, 2017, For the Six Months Ended June 30, 2018 Troubled Debt Restructurings Number of Recorded subsequently defaulted Contracts Investment Residential real estate 2 $ 215 One $33,000, six June 30, 2017. no three June 30, 2018 June 30, 2017. |