Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 8 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, Plain City, Powell, 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 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): March 31, 2021 Impairment Evaluation Individually Collectively Total Loans Loans: Commercial real estate: Owner occupied $ 1,518 $ 102,861 $ 104,379 Non-owner occupied 4,857 299,766 304,623 Multifamily - 39,015 39,015 Residential real estate 1,237 226,815 228,052 Commercial and industrial 1,005 241,646 242,651 Home equity lines of credit 240 111,234 111,474 Construction and other - 64,960 64,960 Consumer installment - 9,046 9,046 Total $ 8,857 $ 1,095,343 $ 1,104,200 December 31, 2020 Impairment Evaluation Individually Collectively Total Loans Loans: Commercial real estate: Owner occupied $ 1,565 $ 101,556 $ 103,121 Non-owner occupied 4,123 305,301 309,424 Multifamily - 39,562 39,562 Residential real estate 1,319 232,676 233,995 Commercial and industrial 834 231,210 232,044 Home equity lines of credit 246 112,297 112,543 Construction and other - 63,573 63,573 Consumer installment - 9,823 9,823 Total $ 8,087 $ 1,095,998 $ 1,104,085 The commercial and industrial loan portfolio as of March 31, 2021 9 The amounts above include net deferred loan origination fees of $4.0 million and $4.4 million at March 31, 2021 December 31, 2020, March 31, 2021 March 31, 2021 Ending Allowance Balance by Impairment Evaluation: Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Allocation Loans: Commercial real estate: Owner occupied $ 10 $ 1,417 $ 1,427 Non-owner occupied 673 6,575 7,248 Multifamily - 488 488 Residential real estate 18 1,729 1,747 Commercial and industrial 305 1,135 1,440 Home equity lines of credit 20 1,310 1,330 Construction and other - 424 424 Consumer installment - 18 18 Total $ 1,026 $ 13,096 $ 14,122 December 31, 2020 Ending Allowance Balance by Impairment Evaluation: Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Allocation Loans: Commercial real estate: Owner occupied $ 10 $ 1,332 $ 1,342 Non-owner occupied 371 6,446 6,817 Multifamily - 461 461 Residential real estate 20 1,663 1,683 Commercial and industrial 48 1,305 1,353 Home equity lines of credit 41 1,364 1,405 Construction and other - 378 378 Consumer installment - 20 20 Total $ 490 $ 12,969 $ 13,459 The Company’s loan portfolio is segmented to a level that allows management to monitor risk and performance. The portfolio is segmented into Commercial Real Estate (“CRE”) which is further segmented into Owner Occupied (“CRE OO”), Non-owner Occupied (“CRE NOO”), and Multifamily Residential, Residential Real Estate (“RRE”), Commercial and Industrial (“C&I”), Home Equity Lines of Credit (“HELOC”), Construction and Other (“Construction”), and Consumer Installment Loans. The commercial real estate loan segments consist of loans made for the purpose of financing the activities of commercial real estate owners and operators. The residential real estate and HELOC loan segments consist of loans made for the purpose of financing the activities of residential homeowners. The C&I loan segment consists of loans made for the purpose of financing the activities of commercial customers. Although PPP loans are included with C&I loans, the nature of PPP loans differs considerably from the rest of the category. Loans funded through the PPP program are fully guaranteed by the U.S. government. This guarantee exists at the inception of the loans and throughout the lives of the loans and was not 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, 2021 Impaired Loans Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial real estate: Owner occupied $ 1,080 $ 1,113 $ - Non-owner occupied 1,383 1,383 - Residential real estate 861 885 - Commercial and industrial 44 549 - Home equity lines of credit 75 89 - Total $ 3,443 $ 4,019 $ - With an allowance recorded: Commercial real estate: Owner occupied $ 438 $ 438 $ 10 Non-owner occupied 3,474 3,748 673 Residential real estate 376 376 18 Commercial and industrial 961 967 305 Home equity lines of credit 165 165 20 Total $ 5,414 $ 5,694 $ 1,026 Total: Commercial real estate: Owner occupied $ 1,518 $ 1,551 $ 10 Non-owner occupied 4,857 5,131 673 Residential real estate 1,237 1,261 18 Commercial and industrial 1,005 1,516 305 Home equity lines of credit 240 254 20 Total $ 8,857 $ 9,713 $ 1,026 December 31, 2020 Impaired Loans Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial real estate: Owner occupied $ 1,118 $ 1,142 $ - Non-owner occupied 801 801 - Residential real estate 941 1,013 - Commercial and industrial 561 1,056 - Home equity lines of credit 80 92 - Total $ 3,501 $ 4,104 $ - With an allowance recorded: Commercial real estate: Owner occupied $ 447 $ 447 $ 10 Non-owner occupied 3,322 3,596 371 Residential real estate 378 378 20 Commercial and industrial 273 276 48 Home equity lines of credit 166 166 41 Total $ 4,586 $ 4,863 $ 490 Total: Commercial real estate: Owner occupied $ 1,565 $ 1,589 $ 10 Non-owner occupied 4,123 4,397 371 Residential real estate 1,319 1,391 20 Commercial and industrial 834 1,332 48 Home equity lines of credit 246 258 41 Total $ 8,087 $ 8,967 $ 490 The tables above include troubled debt restructuring totaling $2.8 million and $2.9 million as of March 31, 2021 December 31, 2020, March 31, 2021 December 31, 2020, 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, 2021 For the Three Months Ended March 31, 2020 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial real estate: Owner occupied $ 1,542 $ 16 $ 3,453 $ 33 Non-owner occupied 4,490 44 7,064 49 Residential real estate 1,278 11 1,215 11 Commercial and industrial 920 7 897 10 Home equity lines of credit 243 2 349 2 Consumer installment - - 1 - Total $ 8,473 $ 80 $ 12,979 $ 105 Management uses a nine first five not not not 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 quality 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 or greater. Confirmation of the appropriate risk grade is included in the review on an ongoing basis. The Company engages an external consultant to conduct loan reviews on a semiannual basis. Generally, the external consultant reviews commercial relationships greater than $250,000 and criticized relationships greater than $150,000. Detailed reviews, including plans for resolution, are performed on criticized loans on at least a quarterly basis. Loans in the Special Mention and Substandard categories that are collectively evaluated for impairment are given separate consideration in the determination of the allowance. 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 March 31, 2021 Pass Mention Substandard Doubtful Loans Commercial real estate: Owner occupied $ 92,129 $ 6,548 $ 5,702 $ - $ 104,379 Non-owner occupied 254,299 959 49,365 - 304,623 Multifamily 39,015 - - - 39,015 Residential real estate 225,004 260 2,788 - 228,052 Commercial and industrial 237,857 1,873 2,921 - 242,651 Home equity lines of credit 110,157 - 1,317 - 111,474 Construction and other 52,968 6,501 5,491 - 64,960 Consumer installment 9,041 - 5 - 9,046 Total $ 1,020,470 $ 16,141 $ 67,589 $ - $ 1,104,200 Special Total December 31, 2020 Pass Mention Substandard Doubtful Loans Commercial real estate: Owner occupied $ 93,939 $ 7,084 $ 2,098 $ - $ 103,121 Non-owner occupied 258,974 983 49,467 - 309,424 Multifamily 39,562 - - - 39,562 Residential real estate 230,944 265 2,786 - 233,995 Commercial and industrial 227,765 1,800 2,479 - 232,044 Home equity lines of credit 111,208 - 1,335 - 112,543 Construction and other 58,082 - 5,491 - 63,573 Consumer installment 9,816 - 7 - 9,823 Total $ 1,030,290 $ 10,132 $ 63,663 $ - $ 1,104,085 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 March 31, 2021 Current Past Due Past Due Past Due Past Due Loans Commercial real estate: Owner occupied $ 104,379 $ - $ - $ - $ - $ 104,379 Non-owner occupied 302,271 - 798 1,554 2,352 304,623 Multifamily 39,015 - - - - 39,015 Residential real estate 226,110 1,403 89 450 1,942 228,052 Commercial and industrial 242,347 179 27 98 304 242,651 Home equity lines of credit 111,375 49 - 50 99 111,474 Construction and other 64,960 - - - - 64,960 Consumer installment 8,794 26 10 216 252 9,046 Total $ 1,099,251 $ 1,657 $ 924 $ 2,368 $ 4,949 $ 1,104,200 30-59 Days 60-89 Days 90 Days+ Total Total December 31, 2020 Current Past Due Past Due Past Due Past Due Loans Commercial real estate: Owner occupied $ 102,587 $ 418 $ - $ 116 $ 534 $ 103,121 Non-owner occupied 305,613 1,844 1,373 594 3,811 309,424 Multifamily 39,562 - - - - 39,562 Residential real estate 230,996 2,364 95 540 2,999 233,995 Commercial and industrial 231,534 260 219 31 510 232,044 Home equity lines of credit 112,325 120 - 98 218 112,543 Construction and other 63,529 44 - - 44 63,573 Consumer installment 9,424 71 108 220 399 9,823 Total $ 1,095,570 $ 5,121 $ 1,795 $ 1,599 $ 8,515 $ 1,104,085 The following tables present the recorded investment in nonaccrual loans and loans past due over 89 90+ Days Past Due March 31, 2021 Nonaccrual and Accruing Commercial real estate: Owner occupied $ 498 $ - Non-owner occupied 4,699 - Residential real estate 2,494 - Commercial and industrial 644 - Home equity lines of credit 404 - Consumer installment 219 - Total $ 8,958 $ - 90+ Days Past Due December 31, 2020 Nonaccrual and Accruing Commercial real estate: Owner occupied $ 458 $ - Non-owner occupied 3,758 - Residential real estate 2,487 - Commercial and industrial 509 - Home equity lines of credit 422 - Consumer installment 224 - Total $ 7,858 $ - Interest income that would have been recorded had these loans not three March 31, 2021 December 31, 2020. 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 ALLL within the primary segments of the loan portfolio and the activity within those segments (in thousands): For the three months ended March 31, 2021 Allowance for Loan and Lease Losses Balance Balance December 31, 2020 Charge-offs Recoveries Provision March 31, 2021 Loans: Commercial real estate: Owner occupied $ 1,342 $ - $ 1 $ 84 $ 1,427 Non-owner occupied 6,817 - - 431 7,248 Multifamily 461 - - 27 488 Residential real estate 1,683 (27 ) 2 89 1,747 Commercial and industrial 1,353 - 19 68 1,440 Home equity lines of credit 1,405 - 8 (83 ) 1,330 Construction and other 378 - 6 40 424 Consumer installment 20 (74 ) 28 44 18 Total $ 13,459 $ (101 ) $ 64 $ 700 $ 14,122 For the three months ended March 31, 2020 Allowance for Loan and Lease Losses Balance Balance December 31, 2019 Charge-offs Recoveries Provision March 31, 2020 Loans: Commercial real estate: Owner occupied $ 801 $ - $ 3 $ 295 $ 1,099 Non-owner occupied 3,382 - 74 908 4,364 Multifamily 340 - - 46 386 Residential real estate 726 (46 ) 29 455 1,164 Commercial and industrial 456 (61 ) 109 212 716 Home equity lines of credit 932 (13 ) 3 318 1,240 Construction and other 103 - 17 134 254 Consumer installment 28 (388 ) 9 372 21 Total $ 6,768 $ (508 ) $ 244 $ 2,740 $ 9,244 The provision fluctuations during the three March 31, 2021 ● commercial real estate portfolios are due to an increase in substandard rate credits related to the hospitality industry. ● commercial and industrial loans are due to growth in loan volume along with an allocation for the PPP loans in the amount of $126.9 ● home equity lines of credit are due to a decrease in outstanding balances. ● construction loans are due to increased loan volume. The provision fluctuations during the three March 31, 2020 one TDR describes loans on which the bank has granted concessions for reasons related to the customer’s financial difficulties. Such concessions may one ● reduction in the interest rate to below-market rates ● extension of repayment requirements beyond normal terms ● reduction of the principal amount owed ● reduction of accrued interest due ● acceptance of other assets in full or partial payment of a debt In each case, the concession is made due to deterioration in the borrower’s financial condition, and the new terms are less stringent than those required on a new loan with similar risk. See Note 9 19 Additionally, on April 7, 2020, 19 not 19, 30 19 not 9 The following tables summarize troubled debt restructurings that did not For the Three Months Ended March 31, 2021 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 $ 20 $ 20 For the Three Months Ended March 31, 2020 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 $ 42 $ 42 Commercial and industrial 1 - 1 95 95 There were no subsequent defaults of troubled debt restructurings for the three March 31, 2021 March 31, 2020. |