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 (ALLL). 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 the 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 ALLL (in thousands): March 31, 2022 Impairment Evaluation Individually Collectively Total Loans Loans: Commercial real estate: Owner occupied $ 716 $ 112,874 $ 113,590 Non-owner occupied 5,213 288,532 293,745 Multifamily - 29,385 29,385 Residential real estate 996 243,751 244,747 Commercial and industrial 630 131,053 131,683 Home equity lines of credit 249 106,051 106,300 Construction and other - 50,152 50,152 Consumer installment - 8,118 8,118 Total $ 7,804 $ 969,916 $ 977,720 December 31, 2021 Impairment Evaluation Individually Collectively Total Loans Loans: Commercial real estate: Owner occupied $ 731 $ 110,739 $ 111,470 Non-owner occupied 5,297 278,321 283,618 Multifamily - 31,189 31,189 Residential real estate 1,104 238,985 240,089 Commercial and industrial 587 148,225 148,812 Home equity lines of credit 250 104,105 104,355 Construction and other - 54,148 54,148 Consumer installment - 8,010 8,010 Total $ 7,969 $ 973,722 $ 981,691 The amounts above include net deferred loan origination fees of $2.8 million and $3.6 million on March 31, 2022, December 31, 2021, March 31, 2022, December 31, 2021, March 31, 2022 Ending Allowance Balance by Impairment Evaluation: Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Allocation Loans: Commercial real estate: Owner occupied $ 10 $ 1,755 $ 1,765 Non-owner occupied 623 7,049 7,672 Multifamily - 419 419 Residential real estate 14 1,787 1,801 Commercial and industrial 56 848 904 Home equity lines of credit 14 1,341 1,355 Construction and other - 558 558 Consumer installment - 18 18 Total $ 717 $ 13,775 $ 14,492 December 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 $ 1,826 $ 1,836 Non-owner occupied 655 6,776 7,431 Multifamily - 454 454 Residential real estate 17 1,723 1,740 Commercial and industrial 42 840 882 Home equity lines of credit 16 1,436 1,452 Construction and other - 533 533 Consumer installment - 14 14 Total $ 740 $ 13,602 $ 14,342 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 to finance the activities of commercial real estate owners and operators. The residential real estate and HELOC loan segments consist of loans made to finance the activities of residential homeowners. The C&I loan segment consists of loans made to finance 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 the commercial segments for possible impairment based on guidelines established by the Board of Directors. Loans are considered to be impaired when, based on current information and events, the Company will probably 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 concerning the principal and interest owed. The Company does not Once the determination has been made that a loan is impaired, the decision 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, 2022 Impaired Loans Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial real estate: Non-owner occupied $ 1,374 $ 1,546 $ - Residential real estate 713 771 - Commercial and industrial 421 508 - Home equity lines of credit 42 42 - Total $ 2,550 $ 2,867 $ - With an allowance recorded: Commercial real estate: Owner occupied $ 716 $ 716 $ 10 Non-owner occupied 3,839 4,377 623 Residential real estate 283 283 14 Commercial and industrial 209 224 56 Home equity lines of credit 207 207 14 Total $ 5,254 $ 5,807 $ 717 Total: Commercial real estate: Owner occupied $ 716 $ 716 $ 10 Non-owner occupied 5,213 5,923 623 Residential real estate 996 1,054 14 Commercial and industrial 630 732 56 Home equity lines of credit 249 249 14 Total $ 7,804 $ 8,674 $ 717 December 31, 2021 Impaired Loans Unpaid Recorded Principal Related Investment Balance Allowance With no related allowance recorded: Commercial real estate: Non-owner occupied $ 1,547 $ 1,802 $ - Residential real estate 820 874 - Commercial and industrial 370 538 - Home equity lines of credit 7 7 - Total $ 2,744 $ 3,221 $ - With an allowance recorded: Commercial real estate: Owner occupied $ 731 $ 731 $ 10 Non-owner occupied 3,750 4,277 655 Residential real estate 284 284 17 Commercial and industrial 217 230 42 Home equity lines of credit 243 243 16 Total $ 5,225 $ 5,765 $ 740 Total: Commercial real estate: Owner occupied $ 731 $ 731 $ 10 Non-owner occupied 5,297 6,079 655 Residential real estate 1,104 1,158 17 Commercial and industrial 587 768 42 Home equity lines of credit 250 250 16 Total $ 7,969 $ 8,986 $ 740 The tables above include troubled debt restructuring totaling $2.4 million and $2.6 million as of March 31, 2022, December 31, 2021, March 31, 2022, December 31, 2021, 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, 2022 For the Three Months Ended March 31, 2021 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Commercial real estate: Owner occupied $ 724 $ 11 $ 1,542 $ 16 Non-owner occupied 5,255 58 4,490 44 Residential real estate 1,050 12 1,278 11 Commercial and industrial 609 14 920 7 Home equity lines of credit 250 3 243 2 Total $ 7,888 $ 98 $ 8,473 $ 80 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 $750,000 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. Detailed reviews, including resolutions plans, are performed on loans classified as Substandard every quarter. Loans in the Special Mention and Substandard categories that are collectively evaluated for impairment are given separate consideration in determining 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, 2022 Pass Mention Substandard Doubtful Loans Commercial real estate: Owner occupied $ 106,422 $ 2,373 $ 4,795 $ - $ 113,590 Non-owner occupied 241,133 2,978 49,634 - 293,745 Multifamily 29,385 - - - 29,385 Residential real estate 242,397 - 2,350 - 244,747 Commercial and industrial 124,823 3,556 3,304 - 131,683 Home equity lines of credit 105,182 - 1,118 - 106,300 Construction and other 39,823 339 9,990 - 50,152 Consumer installment 8,114 - 4 - 8,118 Total $ 897,279 $ 9,246 $ 71,195 $ - $ 977,720 Special Total December 31, 2021 Pass Mention Substandard Doubtful Loans Commercial real estate: Owner occupied $ 104,217 $ 2,400 $ 4,853 $ - $ 111,470 Non-owner occupied 230,672 3,038 49,908 - 283,618 Multifamily 31,189 - - - 31,189 Residential real estate 237,132 - 2,957 - 240,089 Commercial and industrial 143,911 2,748 2,153 - 148,812 Home equity lines of credit 103,296 - 1,059 - 104,355 Construction and other 53,807 341 - - 54,148 Consumer installment 8,005 - 5 - 8,010 Total $ 912,229 $ 8,527 $ 60,935 $ - $ 981,691 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, 2022 Current Past Due Past Due Past Due Past Due Loans Commercial real estate: Owner occupied $ 113,458 $ - $ 132 $ - $ 132 $ 113,590 Non-owner occupied 293,276 96 - 373 469 293,745 Multifamily 29,385 - - - - 29,385 Residential real estate 243,784 636 3 324 963 244,747 Commercial and industrial 131,002 568 33 80 681 131,683 Home equity lines of credit 106,082 150 - 68 218 106,300 Construction and other 50,152 - - - - 50,152 Consumer installment 8,081 33 4 - 37 8,118 Total $ 975,220 $ 1,483 $ 172 $ 845 $ 2,500 $ 977,720 30-59 Days 60-89 Days 90 Days+ Total Total December 31, 2021 Current Past Due Past Due Past Due Past Due Loans Commercial real estate: Owner occupied $ 111,257 $ 81 $ 132 $ - $ 213 $ 111,470 Non-owner occupied 282,365 880 - 373 1,253 283,618 Multifamily 31,189 - - - - 31,189 Residential real estate 238,483 1,187 - 419 1,606 240,089 Commercial and industrial 148,437 112 - 263 375 148,812 Home equity lines of credit 104,316 - 39 - 39 104,355 Construction and other 54,148 - - - - 54,148 Consumer installment 7,799 16 19 176 211 8,010 Total $ 977,994 $ 2,276 $ 190 $ 1,231 $ 3,697 $ 981,691 The following tables present the recorded investment in nonaccrual loans and loans past due over 89 March 31, 2022 Nonaccrual 90+ Days Past Due and Accruing Commercial real estate: Owner occupied $ 78 $ - Non-owner occupied 2,388 - Residential real estate 1,539 - Commercial and industrial 313 - Home equity lines of credit 220 - Consumer installment 190 - Total $ 4,728 $ - December 31, 2021 Nonaccrual 90+ Days Past Due and Accruing Commercial real estate: Owner occupied $ 81 $ - Non-owner occupied 2,442 - Residential real estate 1,577 - Commercial and industrial 456 - Home equity lines of credit 121 - Consumer installment 182 - Total $ 4,859 $ - Interest income that would have been recorded had these loans not three March 31, 2022, March 31, 2021, An 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 deemed 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 several additional qualitative factors that 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 are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources. These qualitative factors include 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; the value of underlying collateral; and concentrations of credit from a loan type, industry, and geographic standpoint. Management reviews the loan portfolio quarterly using a defined, consistently applied process 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, 2022 Allowance for Loan and Lease Losses Balance Balance December 31, 2021 Charge-offs Recoveries Provision March 31, 2022 Loans: Commercial real estate: Owner occupied $ 1,836 $ - $ 1 $ (72 ) $ 1,765 Non-owner occupied 7,431 - - 241 7,672 Multifamily 454 - - (35 ) 419 Residential real estate 1,740 - 27 34 1,801 Commercial and industrial 882 (30 ) 149 (97 ) 904 Home equity lines of credit 1,452 (25 ) - (72 ) 1,355 Construction and other 533 - - 25 558 Consumer installment 14 (6 ) 34 (24 ) 18 Total $ 14,342 $ (61 ) $ 211 $ - $ 14,492 For the three months ended March 31, 2021 Allowance for Loan and Lease Losses Balance Balance December 31, 2019 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 The provision fluctuations during the three March 31, 2022 ● Non-owner occupied commercial real estate portfolios are due to increased loan volume. ● Commercial and industrial loans are due to a decrease in outstanding balances as PPP loans receive forgiveness. The provision fluctuations during the three March 31, 2021 ● Owner occupied commercial real estate portfolios are due to an increase in substandard rate credits related to the hospitality industry. ● commercial and industrial loans due to the allocation required for the PPP loans. ● home equity lines of credit are due to a decrease in outstanding balances. 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. The following tables summarize troubled debt restructurings that did not For the Three Months Ended March 31, 2022 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 $ 25 $ 25 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 There were no subsequent defaults of troubled debt restructurings for the three March 31, 2022, March 31, 2021. |