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): September 30, December 31, 2019 2018 Commercial and industrial $ 85,861 $ 83,857 Real estate - construction 57,564 56,731 Real estate - mortgage: Residential 347,739 336,487 Commercial 492,914 498,247 Consumer installment 15,204 16,787 999,282 992,109 Less: Allowance for loan and lease losses (7,001 ) (7,428 ) Net loans $ 992,281 $ 984,681 The amounts above include deferred loan origination costs of $1.4 $1.6 September 30, 2019 December 31, 2018. The Company’s primary business activity is with customers located within its local Northeastern Ohio trade area, eastern Geauga County, and contiguous counties. The Company also serves the central Ohio market with offices in Dublin, Sunbury, Westerville, and Powell, 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 accrual 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 September 30, 2019 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Loans: Individually evaluated for impairment $ 1,457 $ - $ 1,780 $ 11,261 $ 1 $ 14,499 Collectively evaluated for impairment 84,404 57,564 345,959 481,653 15,203 984,783 Total loans $ 85,861 $ 57,564 $ 347,739 $ 492,914 $ 15,204 $ 999,282 Real Estate - Mortgage December 31, 2018 Commercial and industrial Real estate- construction Residential Commercial Consumer installment Total Loans: Individually evaluated for impairment $ 2,570 $ - $ 1,970 $ 9,533 $ 2 $ 14,075 Collectively evaluated for impairment 81,287 56,731 334,517 488,714 16,785 978,034 Total loans $ 83,857 $ 56,731 $ 336,487 $ 498,247 $ 16,787 $ 992,109 Real Estate - Mortgage September 30, 2019 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 $ 3 $ - $ 33 $ 670 $ - $ 706 Collectively evaluated for impairment 386 99 1,640 4,046 124 6,295 Total ending allowance balance $ 389 $ 99 $ 1,673 $ 4,716 $ 124 $ 7,001 Real Estate - Mortgage December 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 $ 667 $ - $ 43 $ 643 $ 1 $ 1,354 Collectively evaluated for impairment 302 100 1,538 4,008 126 6,074 Total ending allowance balance $ 969 $ 100 $ 1,581 $ 4,651 $ 127 $ 7,428 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 the Residential and Commercial mortgage portfolios were partially offset by decreases in the allowance for the C&I, Real Estate Constructions, and Consumer Installment portfolios. 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 September 30, 2019 Impaired Loans Recorded Investment Unpaid Related Allowance With no related allowance recorded: Commercial and industrial $ 1,308 $ 2,059 $ - Real estate - mortgage: Residential 1,126 1,406 - Commercial 2,561 2,561 - Consumer installment 1 1 - Total $ 4,996 $ 6,027 $ - With an allowance recorded: Commercial and industrial $ 149 $ 149 $ 3 Real estate - mortgage: Residential 654 703 33 Commercial 8,700 8,710 670 Total $ 9,503 $ 9,562 $ 706 Total: Commercial and industrial $ 1,457 $ 2,208 $ 3 Real estate - mortgage: Residential 1,780 2,109 33 Commercial 11,261 11,271 670 Consumer installment 1 1 - Total $ 14,499 $ 15,589 $ 706 December 31, 2018 Impaired Loans Recorded Unpaid Principal Related Investment Balance Allowance With no related allowance recorded: Commercial and industrial $ 207 $ 413 $ - Real estate - mortgage: Residential 1,306 1,462 - Commercial 1,867 2,186 - Total $ 3,380 $ 4,061 $ - With an allowance recorded: Commercial and industrial $ 2,363 $ 3,013 $ 667 Real estate - mortgage: Residential 664 715 43 Commercial 7,666 7,676 643 Consumer installment 2 2 1 Total $ 10,695 $ 11,406 $ 1,354 Total: Commercial and industrial $ 2,570 $ 3,426 $ 667 Real estate - mortgage: Residential 1,970 2,177 43 Commercial 9,533 9,862 643 Consumer installment 2 2 1 Total $ 14,075 $ 15,467 $ 1,354 The tables above include troubled debt restructuring totaling $3.6 September 30, 2019 $4.4 December 31, 2018. $40,000 $459,000 September 30, 2019 December 31, 2018, The following tables present the average balance and interest income by class, recognized on impaired loans (in thousands): For the Three Months Ended September 30, 2019 For the Nine Months Ended September 30, 2019 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial and industrial $ 1,786 $ 20 $ 1,992 $ 44 Real estate - construction - - 810 - Real estate - mortgage: Residential 1,782 14 1,847 38 Commercial 11,344 95 10,317 286 Consumer installment 2 - 2 - Total $ 14,914 $ 129 $ 14,968 $ 368 For the Three Months Ended September 30, 2018 For the Nine Months Ended September 30, 2018 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial and industrial $ 2,984 $ 32 $ 4,620 $ 100 Real estate - construction - - 11 - Real estate - mortgage: Residential 2,574 18 2,672 49 Commercial 6,132 50 6,123 151 Consumer installment 3 - 3 - Total $ 11,693 $ 100 $ 13,429 $ 300 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 payment delinquency, 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. The Credit Department performs an annual review of all commercial relationships with loan balances of $500,000 $250,000 $150,000. The primary risk of commercial and industrial loans is related to deterioration in the cash flow of the business that may 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 September 30, 2019 Pass Mention Substandard Doubtful Loans Commercial and industrial $ 78,163 $ 4,585 $ 3,113 $ - $ 85,861 Real estate - construction 57,564 - - - 57,564 Real estate - mortgage: Residential 342,571 989 4,179 - 347,739 Commercial 474,166 7,043 11,705 - 492,914 Consumer installment 15,195 - 9 - 15,204 Total $ 967,659 $ 12,617 $ 19,006 $ - $ 999,282 Special Total December 31, 2018 Pass Mention Substandard Doubtful Loans Commercial and industrial $ 77,002 $ 4,572 $ 2,283 $ - $ 83,857 Real estate - construction 55,397 1,334 - - 56,731 Real estate - mortgage: Residential 332,475 553 3,459 - 336,487 Commercial 483,516 6,617 8,114 - 498,247 Consumer installment 16,776 - 11 - 16,787 Total $ 965,166 $ 13,076 $ 13,867 $ - $ 992,109 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 are nonaccrual loans including nonaccrual troubled debt restructurings (“TDR”), loans 90 The following tables present the aging of the recorded investment in past-due loans by class of loans (in thousands): 30-59 Days 60-89 Days 90 Days+ Total Total September 30, 2019 Current Past Due Past Due Past Due Past Due Loans Commercial and industrial $ 84,689 $ 623 $ 190 $ 359 $ 1,172 $ 85,861 Real estate - construction 57,564 - - - - 57,564 Real estate - mortgage: Residential 343,400 1,813 358 2,168 4,339 347,739 Commercial 486,821 1,796 8 4,289 6,093 492,914 Consumer installment 15,179 14 11 - 25 15,204 Total $ 987,653 $ 4,246 $ 567 $ 6,816 $ 11,629 $ 999,282 30-59 Days 60-89 Days 90 Days+ Total Total December 31, 2018 Current Past Due Past Due Past Due Past Due Loans Commercial and industrial $ 82,770 $ 288 $ 213 $ 586 $ 1,087 $ 83,857 Real estate - construction 56,731 - - - - 56,731 Real estate - mortgage: Residential 331,379 2,612 1,083 1,413 5,108 336,487 Commercial 496,597 664 - 986 1,650 498,247 Consumer installment 16,768 19 - - 19 16,787 Total $ 984,245 $ 3,583 $ 1,296 $ 2,985 $ 7,864 $ 992,109 The following tables present the recorded investment in nonaccrual loans and loans past due over 89 September 30, 2019 Nonaccrual 90+ Days Past Due and Accruing Commercial and industrial $ 868 $ - Real estate - construction - - Real estate - mortgage: Residential 4,732 - Commercial 4,450 - Consumer installment 3 - Total $ 10,053 $ - December 31, 2018 Nonaccrual 90+ Days Past Due and Accruing Commercial and industrial $ 996 $ 91 Real estate - construction - - Real estate - mortgage: Residential 2,731 754 Commercial 2,864 100 Consumer installment 4 - Total $ 6,595 $ 945 Interest income that would have been recorded had these loans not $295,000 nine September 30, 2019 $456,000 December 31, 2018. 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 call 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 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, 2018 $ 969 $ 100 $ 1,581 $ 4,651 $ 127 $ 7,428 Charge-offs (393 ) - (517 ) (31 ) (110 ) (1,051 ) Recoveries 55 57 72 3 7 194 Provision (242 ) (58 ) 537 93 100 430 ALLL balance at September 30, 2019 $ 389 $ 99 $ 1,673 $ 4,716 $ 124 $ 7,001 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 (284 ) - (119 ) (111 ) (138 ) (652 ) Recoveries 167 46 76 - 37 326 Provision 274 (258 ) (12 ) 483 143 630 ALLL balance at September 30, 2018 $ 1,156 $ 101 $ 1,705 $ 4,408 $ 124 $ 7,494 Commercial and industrial Real estate- construction Real estate- residential mortgage Real estate- commercial mortgage Consumer installment Total ALLL balance at June 30, 2019 $ 539 $ 90 $ 1,681 $ 4,875 $ 119 $ 7,304 Charge-offs (38 ) - (378 ) - (22 ) (438 ) Recoveries 16 11 26 1 1 55 Provision (128 ) (2 ) 344 (160 ) 26 80 ALLL balance at September 30, 2019 $ 389 $ 99 $ 1,673 $ 4,716 $ 124 $ 7,001 Commercial and industrial Real estate- construction Real estate- residential mortgage Real estate- commercial mortgage Consumer installment Total ALLL balance at June 30, 2018 $ 1,180 $ 89 $ 1,743 $ 4,361 $ 129 $ 7,502 Charge-offs (275 ) - (45 ) - (3 ) (323 ) Recoveries 28 28 47 - 2 105 Provision 223 (16 ) (40 ) 47 (4 ) 210 ALLL balance at September 30, 2018 $ 1,156 $ 101 $ 1,705 $ 4,408 $ 124 $ 7,494 The provision fluctuations during the nine September 30, 2019 ● commercial and industrial loans are due to the charge-off of a large relationship of $336,000 $358,000 first ● residential portfolio are due to charge-offs and portfolio growth ● commercial real estate loans are due to the reclassification of a large construction loan, with a first $661,000, The provision fluctuations during the three September 30, 2019 ● commercial and industrial loans and commercial real estate loans are due to decreases in volume within these portfolios during the quarter. ● residential portfolio are due to a strong growth in this portfolio during the quarter The following tables summarize troubled debt restructurings (in thousands): For the Three Months Ended September 30, 2019 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Residential real estate - 1 1 $ 38 $ 38 For the Nine Months Ended September 30, 2019 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Residential real estate - 2 2 $ 123 $ 178 For the Three Months Ended September 30, 2018 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Residential real estate 1 - 1 $ 86 $ 86 For the Nine Months Ended September 30, 2018 Number of Contracts Pre-Modification Post-Modification Term Outstanding Recorded Outstanding Recorded Troubled Debt Restructurings Modification Other Total Investment Investment Residential real estate 2 2 4 $ 261 $ 261 The following table summarizes TDR modifications within the previous 12 nine September 30, 2018 ( For the Nine Months Ended September 30, 2018 Troubled Debt Restructurings subsequently defaulted Number of Contracts Recorded Investment Residential real estate 1 $ 20 There were no three September 30, 2019 September 30, 2018, nine September 30, 2019. |