XML 32 R13.htm IDEA: XBRL DOCUMENT v3.6.0.2
Loans and Allowance
12 Months Ended
Dec. 31, 2016
Loans and Allowance [Abstract]  
Loans and Allowance

Note 5: Loans and Allowance

Classes of loans at December 31, 2016 and 2015 include:    



 

 

 

 

 



 

 

 

 

 



December 31,



2016

 

2015

Real estate

 

 

 

 

 

Commercial

$

302,577 

 

$

236,895 

Commercial construction and development

 

22,453 

 

 

15,744 

Consumer closed end first mortgage

 

478,848 

 

 

491,451 

Consumer open end and junior liens

 

71,222 

 

 

70,990 



 

875,100 

 

 

815,080 

Other loans

 

 

 

 

 

Consumer loans

 

 

 

 

 

Auto

 

18,939 

 

 

15,480 

Boat/RVs

 

141,602 

 

 

123,621 

Other

 

5,892 

 

 

6,171 

Commercial and industrial

 

131,103 

 

 

123,043 



 

297,536 

 

 

268,315 

Total loans

 

1,172,636 

 

 

1,083,395 

Undisbursed loans in process

 

(8,691)

 

 

(7,432)

Unamortized deferred loan costs, net

 

5,557 

 

 

4,882 

Allowance for loan losses

 

(12,382)

 

 

(12,641)

Net loans

$

1,157,120 

 

$

1,068,204 



Year-end non-accrual loans, segregated by class of loans, were as follows:



 

 

 

 

 



 

 

 

 

 



December 31,



2016

 

2015

Real estate

 

 

 

 

 

Commercial

$

912 

 

$

2,356 

Commercial construction and development

 

 -

 

 

 -

Consumer closed end first mortgage

 

3,626 

 

 

3,592 

Consumer open end and junior liens

 

335 

 

 

783 

Consumer loans

 

 

 

 

 

Auto

 

 

 

 -

Boat/RVs

 

224 

 

 

81 

Other

 

24 

 

 

67 

Commercial and industrial

 

18 

 

 

25 



$

5,144 

 

$

6,904 



Nonaccrual Loans and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.  Loans are placed on non-accrual status when, in managements’ opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions, but never later than 90 days past due.  When interest accrual is discontinued, all unpaid accrued interest is reversed.  Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. 

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income.  The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured and generally only after six months of satisfactory performance.

An age analysis of the Company’s past due loans, segregated by class of loans, as of December 31, 2016 and 2015 are as follows:





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



December 31, 2016



 

30-59 Days Past Due

 

 

60-89 Days Past Due

 

 

90 Days or More Past Due

 

 

Total Past Due

 

 

Current

 

 

Total Loans Receivable

 

 

Total Loans 90 Days and Accruing

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

854 

 

$

142 

 

$

785 

 

$

1,781 

 

$

300,796 

 

$

302,577 

 

$

 

Commercial construction and development

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

22,453 

 

 

22,453 

 

 

 

Consumer closed end first mortgage

 

6,789 

 

 

1,554 

 

 

3,675 

 

 

12,018 

 

 

466,830 

 

 

478,848 

 

 

237 

Consumer open end and junior liens

 

512 

 

 

166 

 

 

304 

 

 

982 

 

 

70,240 

 

 

71,222 

 

 

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Auto

 

103 

 

 

25 

 

 

 

 

133 

 

 

18,806 

 

 

18,939 

 

 

 

Boat/RVs

 

1,376 

 

 

305 

 

 

213 

 

 

1,894 

 

 

139,708 

 

 

141,602 

 

 

 

Other

 

89 

 

 

26 

 

 

13 

 

 

128 

 

 

5,764 

 

 

5,892 

 

 

 

Commercial and industrial

 

497 

 

 

32 

 

 

 

 

537 

 

 

130,566 

 

 

131,103 

 

 

 



$

10,220 

 

$

2,250 

 

$

5,003 

 

$

17,473 

 

$

1,155,163 

 

$

1,172,636 

 

$

237 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



December 31, 2015



 

30-59 Days Past Due

 

 

60-89 Days Past Due

 

 

90 Days or More Past Due

 

 

Total Past Due

 

 

Current

 

 

Total Loans Receivable

 

 

Total Loans 90 Days and Accruing

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

922 

 

$

20 

 

$

2,212 

 

$

3,154 

 

$

233,741 

 

$

236,895 

 

$

 -

Commercial construction and development

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

15,744 

 

 

15,744 

 

 

 -

Consumer closed end first mortgage

 

7,272 

 

 

1,328 

 

 

3,091 

 

 

11,691 

 

 

479,760 

 

 

491,451 

 

 

267 

Consumer open end and junior liens

 

296 

 

 

187 

 

 

765 

 

 

1,248 

 

 

69,742 

 

 

70,990 

 

 

 -

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Auto

 

89 

 

 

 -

 

 

 -

 

 

89 

 

 

15,391 

 

 

15,480 

 

 

 -

Boat/RVs

 

1,135 

 

 

102 

 

 

71 

 

 

1,308 

 

 

122,313 

 

 

123,621 

 

 

 -

Other

 

89 

 

 

14 

 

 

62 

 

 

165 

 

 

6,006 

 

 

6,171 

 

 

 -

Commercial and industrial

 

192 

 

 

383 

 

 

 

 

580 

 

 

122,463 

 

 

123,043 

 

 

 -



$

9,995 

 

$

2,034 

 

$

6,206 

 

$

18,235 

 

$

1,065,160 

 

$

1,083,395 

 

$

267 



Impaired Loans

Loans are considered impaired in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties.  These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.

Interest on impaired loans is recorded based on the performance of the loan.  All interest received on impaired loans that are on nonaccrual is accounted for on the cash-basis method until qualifying for return to accrual.  Interest is accrued per the contract for impaired loans that are performing.

The following tables present impaired loans for the years ended December 31, 2016, 2015 and 2014:



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



December 31, 2016



Recorded Balance

 

Unpaid Principal Balance

 

Specific Allowance

 

Average Investment in Impaired Loans

 

Interest Income Recognized

Loans without a specific valuation allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

665 

 

$

665 

 

$

 -

 

$

2,207 

 

$

68 

Commercial construction and development

 

822 

 

 

822 

 

 

 -

 

 

874 

 

 

40 

Consumer closed end first mortgage

 

1,869 

 

 

1,869 

 

 

 -

 

 

1,328 

 

 

 -

Consumer open end and junior liens

 

 -

 

 

 -

 

 

 -

 

 

193 

 

 

 -

Commercial and industrial

 

187 

 

 

187 

 

 

 -

 

 

204 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans with a specific valuation allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

214 

 

 

214 

 

 

100 

 

 

416 

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

879 

 

$

879 

 

$

100 

 

$

2,623 

 

$

68 

Commercial construction and development

$

822 

 

$

822 

 

$

 -

 

$

874 

 

$

40 

Consumer closed end first mortgage

$

1,869 

 

$

1,869 

 

$

 -

 

$

1,328 

 

$

 -

Consumer open end and junior liens

$

 -

 

$

 -

 

$

 -

 

$

193 

 

$

 -

Commercial and industrial

$

187 

 

$

187 

 

$

 -

 

$

204 

 

$



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

3,757 

 

$

3,757 

 

$

100 

 

$

5,222 

 

$

109 







 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



December 31, 2015



Recorded Balance

 

Unpaid Principal Balance

 

Specific Allowance

 

Average Investment in Impaired Loans

 

Interest Income Recognized

Loans without a specific valuation allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

3,608 

 

$

3,608 

 

$

 -

 

$

4,115 

 

$

172 

Commercial construction and development

 

595 

 

 

595 

 

 

 -

 

 

735 

 

 

31 

Consumer closed end first mortgage

 

1,126 

 

 

1,126 

 

 

 -

 

 

1,131 

 

 

 -

Consumer open end and junior liens

 

481 

 

 

481 

 

 

 -

 

 

381 

 

 

 -

Commercial and industrial

 

214 

 

 

214 

 

 

 -

 

 

423 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans with a specific valuation allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

676 

 

 

676 

 

 

100 

 

 

793 

 

 

20 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

4,284 

 

$

4,284 

 

$

100 

 

$

4,908 

 

$

192 

Commercial construction and development

$

595 

 

$

595 

 

$

 -

 

$

735 

 

$

31 

Consumer closed end first mortgage

$

1,126 

 

$

1,126 

 

$

 -

 

$

1,131 

 

$

 -

Consumer open end and junior liens

$

481 

 

$

481 

 

$

 -

 

$

381 

 

$

 -

Commercial and industrial

$

214 

 

$

214 

 

$

 -

 

$

423 

 

$



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

6,700 

 

$

6,700 

 

$

100 

 

$

7,578 

 

$

225 



As of December 31, 2014, there were no impaired loans with a valuation allowance. 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



December 31, 2014



Recorded Balance

 

Unpaid Principal Balance

 

Specific Allowance

 

Average Investment in Impaired Loans

 

Interest Income Recognized

Loans without a specific valuation allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

4,933 

 

$

4,933 

 

$

 -

 

$

3,776 

 

$

161 

Commercial construction and development

 

931 

 

 

1,860 

 

 

 -

 

 

1,323 

 

 

30 

Consumer closed end first mortgage

 

1,138 

 

 

1,138 

 

 

 -

 

 

1,142 

 

 

Consumer open end and junior liens

 

 -

 

 

 -

 

 

 

 

 

100 

 

 

Commercial and industrial

 

758 

 

 

789 

 

 

 -

 

 

923 

 

 

12 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

7,760 

 

$

8,720 

 

$

 -

 

$

7,264 

 

$

214 



The following information presents the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of December 31, 2016 and 2015.

Commercial Loan Grades

Definition of Loan Grades.  Loan grades are numbered 1 through 8.  Grades 1-4 are "pass" credits, grade 5 [Special Mention] loans are "criticized" assets, and grades 6 [Substandard], 7 [Doubtful] and 8 [Loss] are "classified" assets.  The use and application of these grades by the Bank conform to the Bank's policy and regulatory definitions.

Pass.  Pass credits are loans in grades prime through fair.  These are at least considered to be credits with acceptable risks and would be granted in the normal course of lending operations. 

Special Mention.  Special mention credits have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credits or in the Bank’s credit position at some future date.  If weaknesses cannot be identified, classifying as special mention is not appropriate.  Special mention credits are not adversely classified and do not expose the Bank to sufficient risk to warrant an adverse classification.  No apparent loss of principal or interest is expected. 

Substandard.  Substandard credits are inadequately protected by the current sound worth and paying capacity of the obligor or by 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.  Credits so classified must have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the Bank will sustain some loss of the deficiencies are not corrected.

Doubtful.  A doubtful extension of credit has all the weaknesses inherent in a substandard asset with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.  The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.  Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.  Doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded Substandard.   



Retail Loan Grades

Pass.  Pass credits are loans that are currently performing as agreed and are not troubled debt restructurings. 

Special Mention.  Special mention credits have potential weaknesses that deserve management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credits or in the Bank’s credit position at some future date.  If weaknesses cannot be identified, classifying as special mention is not appropriate.  Special mention credits are not adversely classified and do not expose the Bank to sufficient risk to warrant an adverse classification.  No apparent loss of principal or interest is expected. 

Substandard.  Substandard credits are loans that have reason to be considered to have a weakness and placed on non-accrual.  This would include all retail loans over 90 days and troubled debt restructurings.







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



December 31, 2016



 

Commercial

 

Consumer

 

 

 



 

Pass

 

Special Mention

 

Substandard

 

Doubtful

 

Pass

 

Special Mention

 

Substandard

 

Total

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

295,548 

 

$

3,705 

 

$

3,297 

 

$

27 

 

 

 

 

 

 

 

 

 

 

$

302,577 

Commercial construction and development

 

 

21,782 

 

 

254 

 

 

417 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

22,453 

Consumer closed end first mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

$

473,329 

 

$

 -

 

$

5,519 

 

 

478,848 

Consumer open end and junior liens

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70,769 

 

 

 -

 

 

453 

 

 

71,222 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Auto

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,931 

 

 

 -

 

 

 

 

18,939 

Boat/RVs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

141,294 

 

 

 -

 

 

308 

 

 

141,602 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,859 

 

 

 -

 

 

33 

 

 

5,892 

Commercial and industrial

 

 

128,436 

 

 

2,513 

 

 

154 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

131,103 



 

$

445,766 

 

$

6,472 

 

$

3,868 

 

$

27 

 

$

710,182 

 

$

 -

 

$

6,321 

 

$

1,172,636 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



December 31, 2015



 

Commercial

 

Consumer

 

 

 



 

Pass

 

Special Mention

 

Substandard

 

Doubtful

 

Pass

 

Special Mention

 

Substandard

 

Total

Real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

226,439 

 

$

4,137 

 

$

6,319 

 

$

 -

 

 

 

 

 

 

 

 

 

 

$

236,895 

Commercial construction and development

 

 

13,986 

 

 

1,309 

 

 

449 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

15,744 

Consumer closed end first mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

$

484,658 

 

$

 -

 

$

6,793 

 

 

491,451 

Consumer open end and junior liens

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70,086 

 

 

 -

 

 

904 

 

 

70,990 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Auto

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,480 

 

 

 -

 

 

 -

 

 

15,480 

Boat/RVs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

123,490 

 

 

 -

 

 

131 

 

 

123,621 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,097 

 

 

 -

 

 

74 

 

 

6,171 

Commercial and industrial

 

 

119,540 

 

 

3,300 

 

 

203 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

123,043 



 

$

359,965 

 

$

8,746 

 

$

6,971 

 

$

 -

 

$

699,811 

 

$

 -

 

$

7,902 

 

$

1,083,395 



Allowance for Loan Losses

The risk characteristics of each loan portfolio segment are as follows:

Commercial Loans

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan.  Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type and geographic location.  Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. As a general rule, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.

Commercial construction loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analyses of absorption and lease rates and financial analyses of the developers and property owners.  Construction loans are generally based on estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project.  Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

Commercial business loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Residential and Consumer

With respect to residential loans that are secured by one-to-four family residences and are primarily owner occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance (PMI) if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in one-to-four family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

The following tables detail activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2016, 2015 and 2014.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses on other segments.



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2016



Commercial

 

Mortgage

 

Consumer

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

7,090 

 

$

2,683 

 

$

2,868 

 

$

12,641 

Provision charged (credited) to expense

 

457 

 

 

15 

 

 

378 

 

 

850 

Losses charged off

 

(274)

 

 

(420)

 

 

(788)

 

 

(1,482)

Recoveries

 

85 

 

 

25 

 

 

263 

 

 

373 

Balance, end of period

$

7,358 

 

$

2,303 

 

$

2,721 

 

$

12,382 







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2015



Commercial

 

Mortgage

 

Consumer

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

$

7,085 

 

$

3,471 

 

$

2,612 

 

$

13,168 

Provision charged to expense

 

(389)

 

 

(179)

 

 

693 

 

 

125 

Losses charged off

 

(104)

 

 

(643)

 

 

(640)

 

 

(1,387)

Recoveries

 

498 

 

 

34 

 

 

203 

 

 

735 

Balance, end of period

$

7,090 

 

$

2,683 

 

$

2,868 

 

$

12,641 







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2014



Commercial

 

Mortgage

 

Consumer

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

8,148 

 

$

3,124 

 

$

2,140 

 

$

13,412 

Provision charged (credited) to expense

 

(1,273)

 

 

888 

 

 

1,235 

 

 

850 

Losses charged off

 

(289)

 

 

(572)

 

 

(1,021)

 

 

(1,882)

Recoveries

 

499 

 

 

31 

 

 

258 

 

 

788 

Balance, end of period

$

7,085 

 

$

3,471 

 

$

2,612 

 

$

13,168 







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2016



Commercial

 

Mortgage

 

Consumer

 

Total

Allowance balances

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

$

100 

 

$

 -

 

$

 -

 

$

100 

Collectively evaluated for impairment

 

7,258 

 

 

2,303 

 

 

2,721 

 

 

12,282 

Total allowance for loan losses

$

7,358 

 

$

2,303 

 

$

2,721 

 

$

12,382 

Loan balances

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

$

1,888 

 

$

1,869 

 

$

 -

 

$

3,757 

Collectively evaluated for impairment

 

454,245 

 

 

476,979 

 

 

237,655 

 

 

1,168,879 

Gross loans

$

456,133 

 

$

478,848 

 

$

237,655 

 

$

1,172,636 







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2015



Commercial

 

Mortgage

 

Consumer

 

Total

Allowance balances

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

$

100 

 

$

 -

 

$

 -

 

$

100 

Collectively evaluated for impairment

 

6,990 

 

 

2,683 

 

 

2,868 

 

 

12,541 

Total allowance for loan losses

$

7,090 

 

$

2,683 

 

$

2,868 

 

$

12,641 

Loan balances

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

$

5,093 

 

$

1,126 

 

$

481 

 

$

6,700 

Collectively evaluated for impairment

 

370,589 

 

 

490,325 

 

 

215,781 

 

 

1,076,695 

Gross loans

$

375,682 

 

$

491,451 

 

$

216,262 

 

$

1,083,395 







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2014



Commercial

 

Mortgage

 

Consumer

 

Total

Allowance balances

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

$

 -

 

$

 -

 

$

 -

 

$

 -

Collectively evaluated for impairment

 

7,085 

 

 

3,471 

 

 

2,612 

 

 

13,168 

Total allowance for loan losses

$

7,085 

 

$

3,471 

 

$

2,612 

 

$

13,168 

Loan balances

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

$

6,622 

 

$

1,138 

 

$

 -

 

$

7,760 

Collectively evaluated for impairment

 

312,973 

 

 

515,925 

 

 

185,730 

 

 

1,014,628 

Gross loans

$

319,595 

 

$

517,063 

 

$

185,730 

 

$

1,022,388 





Troubled Debt Restructurings

Certain categories of impaired loans include loans that have been modified in a troubled debt restructuring that involves granting economic concessions to borrowers who have experienced financial difficulties.  These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions.  Modifications of terms for our loans and their inclusion as troubled debt restructurings are based on individual facts and circumstances.  

When we modify loans in a troubled debt restructuring, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or we use the current fair value of the collateral, less selling costs for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through a specific reserve or a charge-off to the allowance.

Loans retain their accrual status at the time of their modification.  As a result, if a loan is on nonaccrual at the time it is modified, it stays as nonaccrual until a period of satisfactory performance, generally six months, is obtained.  If a loan is on accrual at the time of the modification, the loan is evaluated to determine the collection of principal and interest is reasonably assured and generally stays on accrual.

At December 31, 2016 and 2015, the Company had a number of loans that were modified in troubled debt restructurings and impaired.  The modification of terms of such loans included one or a combination of the following:  an extension of maturity, a reduction of the stated interest rate or a permanent reduction of the recorded investment in the loan.  

The following tables describe troubled debts restructured during the years ended December 31, 2016, 2015 and 2014.



 

 

 

 

 

 

 



 

 

 

 

 

 

 



December 31, 2016



No. of Loans

 

Pre-Modification Outstanding Recorded Balance

 

Post-Modification Outstanding Recorded Balance

Real estate

 

 

 

 

 

 

 

Commercial

 

$

406 

 

$

406 

Commercial construction and development

 

 

83 

 

 

83 

Consumer closed end first mortgage

14 

 

 

881 

 

 

911 

Consumer open end and junior liens

 

 

39 

 

 

39 

Consumer loans

 

 

 

 

 

 

 

Auto

 

 

 

 

Boat/RV

 

 

56 

 

 

56 

Other

 

 

 

 







 

 

 

 

 

 

 



 

 

 

 

 

 

 



December 31, 2015



No. of Loans

 

Pre-Modification Outstanding Recorded Balance

 

Post-Modification Outstanding Recorded Balance

Real estate

 

 

 

 

 

 

 

Commercial

 

$

2,399 

 

$

2,406 

Commercial construction and development

 

 

155 

 

 

155 

Consumer closed end first mortgage

 

 

287 

 

 

287 

Consumer open end and junior liens

 

 

51 

 

 

51 

Consumer loans

 

 

 

 

 

 

 

Auto

 

 

25 

 

 

25 

Commercial and industrial

 

 

88 

 

 

83 









 

 

 

 

 

 

 



 

 

 

 

 

 

 



December 31, 2014



No. of Loans

 

Pre-Modification Outstanding Recorded Balance

 

Post-Modification Outstanding Recorded Balance

Real estate

 

 

 

 

 

 

 

Commercial

 

$

1,229 

 

$

1,248 

Consumer closed end first mortgage

12 

 

 

1,493 

 

 

1,139 

Consumer open end and junior liens

 

 

58 

 

 

59 

Commercial and industrial

 

 

193 

 

 

223 



The impact on the allowance for loan losses was insignificant as a result of these modifications. 



Newly restructured loans by type for the years ended December 31, 2016, 2015 and 2014 are as follows:



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2016



 

Interest Only

 

 

Term

 

 

Combination

 

 

Total Modification

Real Estate

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

 -

 

$

406 

 

$

 -

 

$

406 

Commercial construction and development

 

 -

 

 

83 

 

 

 -

 

 

83 

Consumer closed end first mortgage

 

 -

 

 

47 

 

 

864 

 

 

911 

Consumer open end junior lien

 

 -

 

 

 -

 

 

39 

 

 

39 

Consumer Loans

 

 

 

 

 

 

 

 

 

 

 

Auto

 

 -

 

 

 -

 

 

 

 

Boat/RV

 

 -

 

 

48 

 

 

 

 

56 

Other

 

 -

 

 

 

 

 -

 

 







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2015



 

Interest Only

 

 

Term

 

 

Combination

 

 

Total Modification

Real Estate

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

 -

 

$

2,406 

 

$

 -

 

$

2,406 

Commercial construction and development

 

 -

 

 

 -

 

 

155 

 

 

155 

Consumer closed end first mortgage

 

 -

 

 

11 

 

 

276 

 

 

287 

Consumer open end junior lien

 

 -

 

 

51 

 

 

 -

 

 

51 

Consumer Loans

 

 

 

 

 

 

 

 

 

 

 

Auto

 

 -

 

 

25 

 

 

 -

 

 

25 

Commercial and industrial

 

 -

 

 

83 

 

 

 -

 

 

83 







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



December 31, 2014



 

Interest Only

 

 

Term

 

 

Combination

 

 

Total Modification

Real Estate

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

 -

 

$

701 

 

$

547 

 

$

1,248 

Consumer closed end first mortgage

 

101 

 

 

 -

 

 

1,038 

 

 

1,139 

Consumer open end junior lien

 

 -

 

 

28 

 

 

31 

 

 

59 

Consumer Loans

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 -

 

 

223 

 

 

 -

 

 

223 

Defaults of any loans modified as troubled debt restructurings made in the years ended December 31, 2016, 2015 and 2014, respectively, are listed in the table below.  Defaults are defined as any loans that become 90 days past due.    





 

 

 

 



 

 

 

 



December 31, 2016



No. of Loans

 

Post-Modification Outstanding Recorded Balance

Real Estate

 

 

 

 

Consumer closed end first mortgage

 

$

179 

Consumer Loans

 

 

 

 

Boat/RV

 

 





 

 

 

 



 

 

 

 



December 31, 2015



No. of Loans

 

Post-Modification Outstanding Recorded Balance

Real Estate

 

 

 

 

Commercial

 

$

820 







 

 

 

 



 

 

 

 



December 31, 2014



No. of Loans

 

Post-Modification Outstanding Recorded Balance

Real Estate

 

 

 

 

Consumer closed end first mortgage

 

$

663 

Consumer open end and junior liens

 

 

23 



At December 31, 2016, the Company held residential real estate held for sale as a result of foreclosure totaling $552,000 and real estate in the process of foreclosure of $1.9 million.