8. Troubled Debt Restructuring

3 Months Ended

Mar. 31, 2016

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Asset Types

8. Troubled Debt Restructuring

In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which figure into the environmental factors associated with the allowance. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance calculation. Additionally, specific reserves may be established on restructured loans evaluated individually.

During the three months ended March 31, 2016, there was one loan modification that were considered to be troubled debt restructurings.  Modifications may have included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.

	March 31, 2016
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Consumer		1		17		17
Total		1	$	17	$	17

During the quarter ended March 31, 2016, there were no loans restructured in the previous 12 months, were in default or were on nonaccrual status.  A restructured loan is considered in default when it becomes 90 days past due.

During the three months ended March 31, 2015, there were three loan modifications that were considered to be troubled debt restructurings.

	March 31, 2015
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Consumer		3		45		45
Total		3	$	45	$	45

During the quarter ended March 31, 2015, two real estate loans (outstanding recorded investment of $1,040,000) that had been restructured in the previous 12 months, were in default or were on nonaccrual status.  A restructured loan is considered in default when it becomes 90 days past due.