Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 5 - Loans Receivable (Dollars in thousands) March 31, 2018 December 31, 2017 Loans secured by real estate: Residential real estate $ 174,053 $ 172,780 Home equity 36,606 36,718 Commercial real estate 208,482 211,090 Construction and land development 53,775 50,746 Farmland 248 - Multifamily 44,612 43,369 Total loans secured by real estate 517,776 514,703 Consumer 489 460 Commercial business 76,546 77,122 Government 30,176 28,785 Subtotal 624,987 621,070 Less: Net deferred loan origination fees (124) (130) Undisbursed loan funds (201) (729) Loans receivable $ 624,662 $ 620,211 (Dollars in thousands) Beginning Balance Charge-offs Recoveries Provisions Ending Balance The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the three months ended March 31, 2018: Allowance for loan losses: Residential real estate $ 1,568 $ (68) - $ (7) $ 1,493 Home equity 166 (19) - 12 159 Commercial real estate 3,125 (119) - (10) 2,996 Construction and land development 618 - - 43 661 Multifamily 622 - - (7) 615 Farmland - - - 4 4 Consumer 31 (8) 4 8 35 Commercial business 1,298 (526) 10 295 1,077 Government 54 - - 3 57 Total $ 7,482 $ (740) $ 14 $ 341 $ 7,097 The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the three months ended March 31, 2017: Allowance for loan losses: Residential real estate $ 2,111 $ (858) $ - $ 42 $ 1,295 Home equity 299 - - 7 306 Commercial real estate 3,113 - - 85 3,198 Construction and land development 617 - - (24) 593 Multifamily 572 - - (11) 561 Farmland - - - - - Consumer 34 (5) 2 (3) 28 Commercial business 896 (245) 8 136 795 Government 56 - - 2 58 Total $ 7,698 $ (1,108) $ 10 $ 234 $ 6,834 The Bancorp's impairment analysis is summarized below: Ending Balances (Dollars in thousands) Individually Collectively Loan receivables Individually Purchased credit Collectively The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at March 31, 2018: Residential real estate $ 31 $ 1,462 $ 173,866 $ 561 $ 712 $ 172,593 Home equity - 159 36,658 69 - 36,589 Commercial real estate 18 2,978 208,482 363 - 208,119 Construction and land development - 661 53,775 134 - 53,641 Multifamily - 615 44,612 - - 44,612 Farmland - 4 248 - - 248 Commercial business 10 1,067 76,354 193 - 76,161 Consumer - 35 491 - - 491 Government - 57 30,176 - - 30,176 Total $ 59 $ 7,038 $ 624,662 $ 1,320 $ 712 $ 622,630 The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at December 31, 2017: Residential real estate $ 21 $ 1,547 $ 172,141 $ 462 $ 690 $ 170,989 Home equity - 166 36,769 - - 36,769 Commercial real estate 144 2,981 211,090 512 - 210,578 Construction and land development - 618 50,746 134 - 50,612 Multifamily. - 622 43,368 - - 43,368 Farmland - - - - - - Commercial business 539 759 76,851 724 - 76,127 Consumer - 31 461 - - 461 Government - 54 28,785 - - 28,785 Total $ 704 $ 6,778 $ 620,211 $ 1,832 $ 690 $ 617,689 Credit Exposure - Credit Risk Portfolio By Creditworthiness Category March 31, 2018 (Dollars in thousands) 2 3 4 5 6 7 8 Loan Segment Moderate Above average Acceptable Marginally Pass/monitor Special Substandard Total Residential real estate $ 614 $ 14,951 $ 92,844 $ 8,649 $ 48,937 $ 4,186 $ 3,685 $ 173,866 Home equity 67 906 34,929 - 173 271 312 36,658 Commercial real estate - 2,127 76,593 81,047 42,746 5,606 363 208,482 Construction and land development - - 23,208 21,159 9,274 - 134 53,775 Multifamily - - 19,887 22,882 1,610 233 - 44,612 Farmland - - 248 - - - - 248 Commercial business 7,986 17,545 14,153 22,060 12,275 2,142 193 76,354 Consumer 118 3 361 - - - 9 491 Government - 2,220 21,976 5,980 - - - 30,176 Total $ 8,785 $ 37,752 $ 284,199 $ 161,777 $ 115,015 $ 12,438 $ 4,696 $ 624,662 December 31, 2017 2 3 4 5 6 7 8 Loan Segment Moderate Above average Acceptable Marginally Pass/monitor Special Substandard Total Residential real estate $ 887 $ 12,317 $ 92,241 $ 8,759 $ 50,075 $ 4,130 $ 3,732 $ 172,141 Home equity - 1,065 34,871 - 250 233 350 36,769 Commercial real estate - 2,372 79,847 81,547 40,054 6,758 512 211,090 Construction and land development - - 20,719 19,583 10,310 - 134 50,746 Multifamily - - 20,159 20,965 2,076 168 - 43,368 Farmland - - - - - - - - Commercial business 7,169 17,202 16,784 21,087 13,041 394 1,174 76,851 Consumer - 131 330 - - - - 461 Government - 2,318 20,202 6,265 - - - 28,785 Total $ 8,056 $ 35,405 $ 285,153 $ 158,206 $ 115,806 $ 11,683 $ 5,902 $ 620,211 The Bancorp has established a standard loan grading system to assist management, lenders and review personnel in their analysis and supervision of the loan portfolio. The use and application of these grades by the Bancorp is uniform and conforms to regulatory definitions. The loan grading system is as follows: 1 Minimal Risk Borrower demonstrates exceptional credit fundamentals, including stable and predictable profit margins, strong liquidity and a conservative balance sheet with superior asset quality. Excellent cash flow coverage of existing and projected debt service. Historic and projected performance indicates borrower is able to meet obligations under almost any economic circumstances. 2 Moderate risk Borrower consistently internally generates sufficient cash flow to fund debt service, working assets, and some capital expenditures. Risk of default considered low. 3 Above average acceptable risk Borrower generates sufficient cash flow to fund debt service and some working assets and/or capital expansion needs. Profitability and key balance sheet ratios are at or slightly above peers. Current trends are positive or stable. Earnings may be level or trending down slightly or be erratic; however, positive strengths are offsetting. Risk of default is reasonable but may warrant collateral protection. 4 Acceptable risk Borrower generates sufficient cash flow to fund debt service, but most working asset and all capital expansion needs are provided from external sources. Profitability ratios and key balance sheet ratios are usually close to peers but one or more ratios (e.g. leverage) may be higher than peer. Earnings may be trending down over the last three years. Borrower may be able to obtain similar financing from other banks with comparable or less favorable terms. Risk of default is acceptable but requires collateral protection. 5 Marginally acceptable risk Borrower may exhibit excessive growth, declining earnings, strained cash flow, increasing leverage and/or weakening market position that indicate above average risk. Limited additional debt capacity, modest coverage, and average or below average asset quality, margins and market share. Interim losses and/or adverse trends may occur, but not to the level that would affect the Bank’s position. The potential for default is higher than normal but considered marginally acceptable based on prospects for improving financial performance and the strength of the collateral. 6 Pass/monitor The borrower has significant weaknesses resulting from performance trends or management concerns. The financial condition of the company has taken a negative turn and may be temporarily strained. Cash flow may be weak but cash reserves remain adequate to meet debt service. Management weaknesses are evident. Borrowers in this category will warrant more than the normal level of supervision and more frequent reporting. 7 Special mention (watch) Special mention credits are considered bankable assets with no apparent loss of principal or interest envisioned but requiring a high level of management attention. Assets in this category are currently protected but are potentially weak. These borrowers are subject to economic, industry, or management factors having an adverse impact upon their prospects for orderly service of debt. The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted. These assets constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of Substandard. 8 Substandard This classification consists of loans which are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. Financial statements normally reveal some or all of the following: poor trends, lack of earnings and cash flow, excessive debt, lack of liquidity, and the absence of creditor protection. Loans are still considered collectible, but due to increased risks and defined weaknesses of the credit, some loss could be incurred in collection if the deficiencies are not corrected. Performing loans are loans that are paying as agreed and are approximately less than ninety days past due on payments of interest and principal. During the first quarter of 2018, two residential real estate loans totaling $ 115 69 For the three months ended As of March 31, 2018 March 31, 2018 (Dollars in thousands) Recorded Unpaid Principal Related Allowance Average Recorded Interest Income With no related allowance recorded: Residential real estate $ 1,141 $ 2,871 $ - $ 1,103 $ 6 Home equity 69 69 - 35 Commercial real estate 250 250 - 252 - Construction and land development 134 134 - 134 - Commercial business 183 183 - 184 1 With an allowance recorded: Residential real estate 132 132 31 106 5 Home equity - - - - - Commercial real estate 113 113 18 186 4 Construction and land development - - - - - Commercial business 10 10 10 275 - Total: Residential real estate $ 1,273 $ 3,003 $ 31 $ 1,209 $ 11 Home equity $ 69 $ 69 $ - $ 35 $ - Commercial real estate $ 363 $ 364 $ 18 $ 438 $ 4 Construction & land development $ 134 $ 134 $ - $ 134 $ - Commercial business $ 193 $ 193 $ 10 $ 459 $ 1 For the three months ended As of December 31, 2017 March 31, 2017 (Dollars in thousands) Recorded Unpaid Principal Related Allowance Average Recorded Interest Income With no related allowance recorded: Residential real estate $ 1,072 $ 3,351 $ - $ 1,350 $ 11 Home equity - - - - - Commercial real estate 253 253 - 363 1 Construction and land development 134 134 - 134 - Commercial business 184 184 - 209 1 With an allowance recorded: Residential real estate 80 270 21 533 - Home equity - - - - - Commercial real estate 259 259 144 79 - Construction & land development - - - - - Commercial business 540 540 539 327 - Total: Residential real estate $ 1,152 $ 3,621 $ 21 $ 1,883 $ 11 Home equity $ - $ - $ - $ - $ - Commercial real estate $ 512 $ 512 $ 144 $ 442 $ 1 Construction & land development $ 134 $ 134 $ - $ 134 $ - Commercial business $ 724 $ 724 $ 539 $ 536 $ 1 As a result of acquisition activity, the Bancorp acquired loans for which there was evidence of credit quality deterioration since origination and it was determined that it was probable that the Bancorp would be unable to collect all contractually required principal and interest payments. At March 31, 2018, total purchased credit impaired loans with unpaid principal balances totaled $ 2.4 712 2.6 690 (Dollars in thousands) 30-59 Days Past 60-89 Days Past Greater Than 90 Total Past Due Current Total Loans Recorded March 31, 2018 Residential real estate $ 2,858 $ 1,222 $ 2,789 $ 6,869 $ 166,997 $ 173,866 $ 46 Home equity 361 - 218 579 36,079 36,658 5 Commercial real estate 1,367 - 183 1,550 206,932 208,482 - Construction and land development - - 134 134 53,641 53,775 - Multifamily - 165 - 165 44,447 44,612 - Farmland - - - - 248 248 - Commercial business 228 275 142 645 75,709 76,354 - Consumer 9 - - 9 482 491 - Government - - - - 30,176 30,176 - Total $ 4,823 $ 1,662 $ 3,466 $ 9,951 $ 614,711 $ 624,662 $ 51 December 31, 2017 Residential real estate $ 4,921 $ 1,751 $ 3,092 $ 9,764 $ 162,377 $ 172,141 $ 225 Home equity 295 18 234 547 36,222 36,769 2 Commercial real estate 951 96 332 1,379 209,711 211,090 - Construction and land development - - 133 133 50,613 50,746 - Multifamily 319 - - 319 43,049 43,368 - Farmland - - - - - - - Commercial business 285 162 539 986 75,865 76,851 - Consumer 1 - - 1 460 461 - Government - - - - 28,785 28,785 - Total $ 6,772 $ 2,027 $ 4,330 $ 13,129 $ 607,082 $ 620,211 $ 227 (Dollars in thousands) March 31, December 31, Residential real estate $ 3,221 $ 3,509 Home equity 307 350 Commercial real estate 183 332 Construction and land development 134 133 Multifamily - - Farmland - - Commercial business 142 672 Consumer 9 - Government - - Total $ 3,996 $ 4,996 |