Note 4 - Allowance for Loan Losses, Nonperforming Assets and Impaired Loans

9 Months Ended

Sep. 30, 2015

Disclosure Text Block Supplement [Abstract]

Allowance for Credit Losses [Text Block]

Note 4:     Allowance for Loan Losses, Nonperforming Assets and Impaired Loans

The allowance for loan losses methodology incorporates individual evaluation of impaired loans and collective evaluation of groups of non-impaired loans. The Company performs ongoing analysis of the loan portfolio to determine credit quality and to identify impaired loans. Credit quality is rated based on the loan’s payment history, the borrower’s current financial situation and the value of the underlying collateral.

Impaired loans are those loans that have been modified in a troubled debt restructure (“TDR” or “restructure”) and larger, non-homogeneous loans that are in nonaccrual or exhibit payment history or financial status that indicate the probability that collection will not occur when due according to the loan’s original terms. Generally, impaired loans are given risk ratings that indicate higher risk, such as “classified” or “other assets especially mentioned.” Impaired loans are individually evaluated to determine appropriate reserves and are measured at the lower of the invested amount or the fair market value. Impaired loans that are not troubled debt restructures and for which fair value measurement indicates an impairment loss are designated nonaccrual. A restructured loan that maintains current status for at least six months may be in accrual status. Please refer to Note 1 of the Company’s 2014 Form 10-K, “Summary of Significant Accounting Policies” for additional information on evaluation of impaired loans and associated specific reserves, and policies regarding nonaccruals, past due status and charge-offs.

Troubled debt restructures impact the estimation of the appropriate level of the allowance for loan losses. If the restructuring included forgiveness of a portion of principal, the charge-off is included in the historical charge-off rates applied to the collective evaluation methodology. Further, restructured loans are individually evaluated for impairment and any amount of book value that exceeds fair value is accrued in the allowance for loan losses. TDRs that experience a payment default are examined to determine whether the default indicates collateral dependency or a decline in estimates of cash flow used in the fair value measurement. TDRs that are determined to be collateral-dependent, as well as all impaired loans that are determined to be collateral dependent, are charged down to fair value net of estimated costs to dispose. Deficiencies indicated by impairment measurements for TDRs that are not collateral dependent may be accrued in the allowance for loan losses or charged off if deemed uncollectible.

The Company evaluated characteristics in the loan portfolio and determined major segments and smaller classes within each segment. These characteristics include collateral type, repayment sources, and (if applicable) the borrower’s business model. The methodology for calculating reserves for collectively-evaluated loans is applied at the class level.

Portfolio Segments and Classes

The segments and classes used in determining the allowance for loan losses are as follows.

Real Estate Construction	Commercial Non Real Estate
Construction, residential	Commercial and Industrial
Construction, other
	Public Sector and IDA
Consumer Real Estate	Public sector and IDA
Equity lines
Residential closed-end first liens	Consumer Non Real Estate
Residential closed-end junior liens	Credit cards
Investor-owned residential real estate	Automobile
	Other consumer loans
Commercial Real Estate
Multifamily real estate
Commercial real estate, owner-occupied
Commercial real estate, other

Historical Loss Rates

The Company’s allowance methodology for collectively-evaluated loans applies historical loss rates by class to current class balances as part of the process of determining required reserves. Class loss rates are calculated as the net charge-offs for the class as a percentage of average class balance. The loss rate for the current quarter is averaged with that of prior periods to obtain the historical loss rate. Two loss rates for each class are calculated: total net charge-offs for the class as a percentage of average class loan balance (“class loss rate”), and total net charge-offs for the class as a percentage of average classified loans in the class (“classified loss rate”). Classified loans are those with risk ratings of “substandard” or higher. Net charge-offs in both calculations include charge-offs and recoveries of classified and non-classified loans as well as those associated with impaired loans. Class historical loss rates are applied to non-classified loan balances at the reporting date, and classified historical loss rates are applied to classified balances at the reporting date.

Risk Factors

In addition to historical loss rates, risk factors pertinent to credit risk for each class are analyzed to estimate reserves for collectively-evaluated loans. Factors include changes in national and local economic and business conditions, the nature and volume of classes within the portfolio, loan quality, loan officers’ experience, lending policies and the Company’s loan review system.

The analysis of certain factors results in standard allocations to all segments and classes. These factors include loan officers’ average years of experience, the risk from changes in lending policies, and the risk from changes in loan review. Factors analyzed for each class, with resultant allocations based upon the level of risk assessed for each class, include levels of past due loans, nonaccrual loans, current class balance as a percentage of total loans, and the percentage of high risk loans (defined to be junior lien mortgages, high loan-to-value loans, and interest only loans) within the class. Additionally, factors specific to each segment are analyzed and result in allocations to the segment.

Real estate construction loans are subject to general risks from changing commercial building and housing market trends and economic conditions that may impact demand for completed properties and the costs of completion. These risks are measured by market-area unemployment rates, bankruptcy rates, housing and commercial building market trends, and interest rates.

The credit quality of consumer real estate is subject to risks associated with the borrower’s repayment ability and collateral value, measured generally by analyzing local unemployment and bankruptcy trends, local housing market trends, and interest rates.

The commercial real estate segment includes loans secured by multifamily residential real estate, commercial real estate occupied by the owner/borrower, and commercial real estate leased to non-owners. Loans in the commercial real estate segment are impacted by economic risks from changing commercial real estate markets, rental markets for multi-family housing and commercial buildings, business bankruptcy rates, local unemployment and interest rate trends that would impact the businesses housed by the commercial real estate.

Commercial non real estate loans are secured by collateral other than real estate, or are unsecured. Credit risk for commercial non real estate loans is subject to economic conditions, generally monitored by local business bankruptcy trends, and interest rates. Public sector and IDA loans are extended to municipalities and related entities. Credit risk is based upon the entity’s ability to repay and interest rate trends.

Consumer non real estate includes credit cards, automobile and other consumer loans. Credit cards and certain other consumer loans are unsecured, while collateral is obtained for automobile loans and other consumer loans. Credit risk stems primarily from the borrower’s ability to repay, measured by average unemployment, average personal bankruptcy rates and interest rates.

Factor allocations applied to each class are increased for loans rated special mention and classified. The Company allocates additional reserves for “high risk” loans. High risk loans include junior liens, interest only and high loan to value loans.

A detailed analysis showing the allowance roll-forward by portfolio segment and related loan balance by segment follows.

	Activity in the Allowance for Loan Losses for the Nine Months Ended September 30, 2015
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate			Commercial Non Real Estate			Public Sector and IDA		Consumer Non Real Estate			Unallocated		Total
Balance, December 31, 2014	$	612		$	1,662			3,537		$	1,475		$	327	$	602		$	48	$	8,263
Charge-offs		---			(201	)		(155	)		(453	)		---		(193	)		---		(1,002	)
Recoveries		---			1			36			1			---		84			---		122
Provision for loan losses		(77	)		332			420			(153	)		170		21			21		734
Balance, September 30, 2015	$	535		$	1,794		$	3,838		$	870		$	497	$	514		$	69	$	8,117

	Activity in the Allowance for Loan Losses for the Nine Months Ended September 30, 2014
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate			Commercial Non Real Estate			Public Sector and IDA		Consumer Non Real Estate			Unallocated			Total
Balance, December 31, 2013	$	863		$	1,697		$	3,685		$	989		$	132	$	576		$	285		$	8,227
Charge-offs		(2	)		(97	)		(1,115	)		(79	)		---		(275	)		---			(1,568	)
Recoveries		---			---			33			132			---		47			---			212
Provision for loan losses		(277	)		78			1,072			22			148		261			(144	)		1,160
Balance, September 30, 2014	$	584		$	1,678		$	3,675		$	1,064		$	280	$	609		$	141		$	8,031

	Activity in the Allowance for Loan Losses for the Year Ended December 31, 2014
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate			Commercial Non Real Estate			Public Sector and IDA		Consumer Non Real Estate			Unallocated			Total
Balance, December 31, 2013	$	863		$	1,697		$	3,685		$	989		$	132	$	576		$	285		$	8,227
Charge-offs		(2	)		(222	)		(1,201	)		(89	)		---		(346	)		---			(1,860	)
Recoveries		---			---			50			132			---		73			---			255
Provision for loan losses		(249	)		187			1,003			443			195		299			(237	)		1,641
Balance, December 31, 2014	$	612		$	1,662		$	3,537		$	1,475		$	327	$	602		$	48		$	8,263

	Allowance for Loan Losses as of September 30, 2015
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non Real Estate		Public Sector and IDA		Consumer Non Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	25	$	119	$	---	$	---	$	---	$	---	$	144
Collectively evaluated for impairment		535		1,769		3,719		870		497		514		69		7,973
Total	$	535	$	1,794	$	3,838	$	870	$	497	$	514	$	69	$	8,117

	Allowance for Loan Losses as of December 31, 2014
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non Real Estate		Public Sector and IDA		Consumer Non Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	14	$	258	$	10	$	---	$	---	$	---	$	282
Collectively evaluated for impairment		612		1,648		3,279		1,465		327		602		48		7,981
Total	$	612	$	1,662	$	3,537	$	1,475	$	327	$	602	$	48	$	8,263

	Loans as of September 30, 2015
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non Real Estate		Public Sector and IDA		Consumer Non Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	973	$	13,042	$	997	$	---	$	---	$	---	$	15,012
Collectively evaluated for impairment		44,886		144,017		301,966		38,258		52,330		30,140		---		611,597
Total loans	$	44,886	$	144,990	$	315,008	$	39,255	$	52,330	$	30,140	$	---	$	626,609

	Loans as of December 31, 2014
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non Real Estate		Public Sector and IDA		Consumer Non Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	819	$	13,624	$	678	$	---	$	---	$	---	$	15,121
Collectively evaluated for impairment		45,562		146,220		297,138		32,735		41,361		28,182		---		591,198
Total	$	45,562	$	147,039	$	310,762	$	33,413	$	41,361	$	28,182	$	---	$	606,319

A summary of ratios for the allowance for loan losses follows.

	As of the Nine Months Ended September 30,						For the Year Ended December 31,
	2015			2014			2014
Ratio of allowance for loan losses to the end of period loans, net of unearned income and deferred fees		1.30	%		1.35	%		1.36	%
Ratio of net charge-offs to average loans, net of unearned income and deferred fees(1)		0.19	%		0.31	%		0.27	%

⁽¹⁾ Net charge-offs are on an annualized basis.

A summary of nonperforming assets follows.

	September 30,						December 31,
	2015			2014			2014
Nonperforming assets:
Nonaccrual loans	$	3,207		$	5,366		$	3,999
Restructured loans in nonaccrual		5,781			2,360			5,288
Total nonperforming loans		8,988			7,726			9,287
Other real estate owned, net		4,194			5,145			4,744
Total nonperforming assets	$	13,182		$	12,871		$	14,031
Ratio of nonperforming assets to loans, net of unearned income and deferred fees, plus other real estate owned		2.09	%		2.14	%		2.30	%
Ratio of allowance for loan losses to nonperforming loans(1)		90.31	%		103.95	%		88.97	%

⁽¹⁾     The Company defines nonperforming loans as nonaccrual loans. Loans 90 days or more past due and still accruing and accruing restructured loans are excluded.

A summary of loans past due 90 days or more and impaired loans follows.

	September 30,						December 31,
	2015			2014			2014
Loans past due 90 days or more and still accruing	$	47		$	485		$	207
Ratio of loans past due 90 days or more and still accruing to loans, net of unearned income and deferred fees		0.01	%		0.08	%		0.03	%
Accruing restructured loans	$	6,080		$	5,947		$	6,040
Impaired loans:
Impaired loans with no valuation allowance	$	12,548		$	9,223		$	7,615
Impaired loans with a valuation allowance		2,464			5,964			7,506
Total impaired loans	$	15,012		$	15,187		$	15,121
Valuation allowance		(144	)		(296	)		(282	)
Impaired loans, net of allowance	$	14,868		$	14,891		$	14,839
Average recorded investment in impaired loans(1)	$	15,902		$	15,974		$	16,311
Interest income recognized on impaired loans, after designation as impaired	$	267		$	384		$	473
Amount of income recognized on a cash basis	$	---		$	---		$	---

⁽¹⁾      Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

Nonaccrual loans that meet the Company’s balance threshold of $250 and all TDRs are designated as impaired. No interest income was recognized on nonaccrual loans for the nine months ended September 30, 2015 or September 30, 2014 or for the year ended December 31, 2014.

A detailed analysis of investment in impaired loans, associated reserves and interest income recognized, segregated by loan class follows.     

	Impaired Loans as of September 30, 2015
	Principal Balance		(A) Total Recorded Investment(1)		Recorded Investment(1) in (A) for Which There is No Related Allowance		Recorded Investment(1) in (A) for Which There is a Related Allowance		Related Allowance
Consumer Real Estate(2)
Residential closed-end first liens	$	718	$	675	$	306	$	369	$	14
Residential closed-end junior liens		223		223		---		223		7
Investor-owned residential real estate		75		75		---		75		4
Commercial Real Estate(2)
Multifamily real estate		2,900		2,665		868		1,797		119
Commercial real estate, owner-occupied		4,555		4,489		4,489		---		---
Commercial real estate, other		6,013		5,888		5,888		---		---
Commercial Non Real Estate(2)
Commercial and Industrial		1,005		997		997		---		---
Total	$	15,489	$	15,012	$	12,548	$	2,464	$	144

⁽¹⁾     Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

⁽²⁾     Only classes with impaired loans are shown.

	Impaired Loans as of December 31, 2014
	Principal Balance		(A) Total Recorded Investment(1)		Recorded Investment(1) in (A) for Which There is No Related Allowance		Recorded Investment(1) in (A) for Which There is a Related Allowance		Related Allowance
Consumer Real Estate(2)
Residential closed-end first liens	$	530	$	503	$	311	$	192	$	2
Residential closed-end junior liens		239		239		---		239		8
Investor-owned residential real estate		77		77		---		77		4
Commercial Real Estate(2)
Multifamily real estate		2,911		2,735		868		1,866		170
Commercial real estate, owner occupied		4,919		4,821		3,314		1,508		74
Commercial real estate, other		6,080		6,068		3,072		2,996		14
Commercial Non Real Estate(2)
Commercial and Industrial		678		678		50		628		10
Total	$	15,434	$	15,121	$	7,615	$	7,506	$	282

⁽¹⁾     Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.     

⁽²⁾     Only classes with impaired loans are shown.

The following tables show the average recorded investment and interest income recognized for impaired loans.

	For the Nine Months Ended September 30, 2015
	Average Recorded Investment(1)		Interest Income Recognized
Consumer Real Estate(2)
Residential closed-end first liens	$	685	$	33
Residential closed-end junior liens		231		11
Investor-owned residential real estate		76		4
Commercial Real Estate(2)
Multifamily real estate		2,670		---
Commercial real estate, owner occupied		5,302		86
Commercial real estate, other		5,924		128
Commercial Non Real Estate(2)
Commercial and Industrial		1,014		5
Total	$	15,902	$	267

⁽¹⁾     Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

⁽²⁾     Only classes with impaired loans are shown.

	For the Nine Months Ended September 30, 2014
	Average Recorded Investment(1)		Interest Income Recognized
Consumer Real Estate(2)
Residential closed-end first liens	$	385	$	19
Residential closed-end junior liens		251		12
Investor-owned residential real estate		78		4
Commercial Real Estate(2)
Multifamily real estate		2,807		---
Commercial real estate, owner occupied		5,606		153
Commercial real estate, other		6,134		164
Commercial Non Real Estate(2)
Commercial and Industrial		713		32
Consumer Non Real Estate(2)
Automobile		---		---
Total	$	15,974	$	384

⁽¹⁾     Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

⁽²⁾     Only classes with impaired loans are shown.

	For the Year Ended December 31, 2014
	Average Recorded Investment(1)		Interest Income Recognized
Consumer Real Estate(2)
Residential closed-end first liens		555		31
Residential closed-end junior liens		249		16
Investor-owned residential real estate		77		5
Commercial Real Estate(2)
Multifamily real estate		2,773		---
Commercial real estate, owner occupied		5,836		203
Commercial real estate, other		6,114		175
Commercial Non Real Estate(2)
Commercial and Industrial		707		43
Total	$	16,311	$	473

(1)    Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

(2)   Only classes with impaired loans are shown.

The Company reviews nonaccrual loans on an individual loan basis to determine whether future payments are reasonably assured. To satisfy this criteria, the Company’s evaluation must determine that the underlying cause of the original delinquency or weakness that indicated nonaccrual status has been resolved, such as receipt of new guarantees, increased cash flows that cover the debt service or other resolution. Nonaccrual loans that demonstrate reasonable assurance of future payments and that have made at least six consecutive payments in accordance with repayment terms and timeframes may be returned to accrual status.

A restructured loan for which impairment measurement does not indicate a loss and that maintains current status for at least six months may be returned to accrual status.

An analysis of past due and nonaccrual loans follows.

September 30, 2015
	30 – 89 Days Past Due		90 or More Days Past Due		90 or More Days Past Due and Still Accruing		Nonaccruals (Including Impaired Nonaccruals)
Real Estate Construction(1)
Construction, other	$	27	$	---	$	---	$	---
Consumer Real Estate(1)
Equity lines		63		---		---		---
Residential closed-end first liens		1,305		46		46		3
Residential closed-end junior liens		64		---		---
Investor-owned residential real estate		---		---		---		12
Commercial Real Estate(1)
Multifamily real estate		547		2,665		---		2,665
Commercial real estate, owner-occupied		269		1,519		---		2,542
Commercial real estate, other		59		---		---		2,883
Commercial Non Real Estate(1)
Commercial and Industrial		71		883		---		883
Consumer Non Real Estate(1)
Credit cards		9		1		1		---
Automobile		175		---		---		---
Other consumer loans		63		---		---		---
Total	$	2,652	$	5,114	$	47	$	8,988

December 31, 2014
	30 – 89 Days Past Due		90 or More Days Past Due		90 or More Days Past Due and Still Accruing		Nonaccruals (Including Impaired Nonaccruals)
Real Estate Construction(1)
Construction, other		28		---		---		---
Consumer Real Estate(1)
Equity Lines		25		---		---		---
Residential closed-end first liens		719		185		80		105
Residential closed-end junior liens		74		1		1		---
Investor-owned residential real estate		336		45		---		59
Commercial Real Estate(1)
Multifamily real estate		850		868		---		2,735
Commercial real estate, owner occupied		---		1,066		102		2,573
Commercial real estate, other		---		70		---		3,066
Commercial Non Real Estate(1)
Commercial and Industrial		153		43		---		749
Consumer Non Real Estate(1)
Credit cards		3		4		4		---
Automobile		205		20		20		---
Other consumer loans		54		---		---		---
Total	$	2,447	$	2,302	$	207	$	9,287

⁽¹⁾     Only classes with past-due or nonaccrual loans are shown.

The estimate of credit risk for non-impaired loans is obtained by applying allocations for internal and external factors. The allocations are increased for loans that exhibit greater credit quality risk.

Credit quality indicators, which the Company terms risk grades, are assigned through the Company’s credit review function for larger loans and selective review of loans that fall below credit review thresholds. Loans that do not indicate heightened risk are graded as “pass.” Loans that appear to have elevated credit risk because of frequent or persistent past due status, which is less than 75 days, or that show weakness in the borrower’s financial condition are risk graded “special mention.” Loans with frequent or persistent delinquency exceeding 75 days or that have a higher level of weakness in the borrower’s financial condition are graded “classified.” Classified loans have regulatory risk ratings of “substandard” and “doubtful.” Allocations are increased by 50% and by 100% for loans with grades of “special mention” and “classified,” respectively.

Determination of risk grades was completed for the portfolio as of September 30, 2015 and December 31, 2014.

The following displays collectively-evaluated loans by credit quality indicator.

September 30, 2015

	Pass		Special Mention		Classified (Excluding Impaired)
Real Estate Construction
Construction, 1-4 family residential	$	10,532	$	3,768	$	---
Construction, other		30,586		---		---
Consumer Real Estate
Equity lines		15,715		17		78
Closed-end first liens		78,380		464		830
Closed-end junior liens		4,653		55		63
Investor-owned residential real estate		42,283		611		868
Commercial Real Estate
Multifamily residential real estate		75,085		1,345		1,815
Commercial real estate owner-occupied		124,459		1,278		1,316
Commercial real estate, other		95,149		1,519		---
Commercial Non Real Estate
Commercial and Industrial		37,217		357		684
Public Sector and IDA
States and political subdivisions		52,330		---		---
Consumer Non Real Estate
Credit cards		5,981		---		---
Automobile		12,134		123		39
Other consumer		11,819		31		13
Total	$	596,323	$	9,568	$	5,706

The following displays collectively-evaluated loans by credit quality indicator.

December 31, 2014

	Pass		Special Mention (Excluding Impaired)		Classified (Excluding Impaired)
Real Estate Construction
Construction, 1-4 family residential	$	14,222	$	---	$	2,265
Construction, other		29,047		---		28
Consumer Real Estate
Equity lines		15,861		59		60
Closed-end first liens		78,806		1,566		1,412
Closed-end junior liens		4,258		21		95
Investor-owned residential real estate		42,781		688		614
Commercial Real Estate
Multifamily residential real estate		73,611		1,397		850
Commercial real estate owner-occupied		125,643		202		2,855
Commercial real estate, other		90,821		1,177		582
Commercial Non Real Estate
Commercial and Industrial		31,247		97		1,390
Public Sector and IDA
States and political subdivisions		41,361		---		---
Consumer Non Real Estate
Credit cards		5,705		---		---
Automobile		11,505		93		128
Other consumer		10,745		---		6
Total	$	575,613	$	5,300	$	10,285

Sales, Purchases and Reclassification of Loans

The Company finances mortgages under “best efforts” contracts with mortgage purchasers. The mortgages are designated as held for sale upon initiation. There have been no reclassifications from portfolio loans to held for sale. There have been no loans held for sale transferred to portfolio loans. Occasionally, the Company purchases or sells participations in loans. All participation loans purchased met the Company’s normal underwriting standards at the time the participation was entered. Participation loans are included in the appropriate portfolio balances to which the allowance methodology is applied.

Troubled Debt Restructurings

The Company modifies loans in troubled debt restructurings. Total troubled debt restructurings amounted to $11,861 at September 30, 2015, $11,328 at December 31, 2014, and $8,307 at September 30, 2014. The following tables present restructurings by class that occurred during the nine month periods ended September 30, 2015 and September 30, 2014. The Company did not modify any loans in troubled debt restructures during the three-month periods ended September 30, 2015 or September 30, 2014.

Note: Only classes with restructured loans are presented.

	Restructurings That Occurred During the Nine Months Ended September 30, 2015
	Number of Contracts		Pre-Modification Outstanding Principal Balance		Post-Modification Outstanding Principal Balance
Commercial Real Estate
Commercial real estate, owner occupied		1	$	994	$	907
Total		1	$	994	$	907

During the nine-month period ended September 30, 2015, the Company restructured 1 loan to provide payment relief. The restructuring provided payment relief by reducing principal, capitalizing interest and re-amortizing payments. The restructured loan is in nonaccrual status. The fair value measurement of the restructured loan as of September 30, 2015 resulted in no specific allocations to the allowance for loan losses.

	Restructurings That Occurred During the Nine Months Ended September 30, 2014
	Number of Contracts		Pre-Modification Outstanding Principal Balance		Post-Modification Outstanding Principal Balance
Commercial Real Estate
Multifamily real estate		1	$	2,484	$	2,484
Commercial real estate, owner occupied		1		184		209
Total		2	$	2,668	$	2,693

During the nine-month period ended September 30, 2014, the Company restructured two loans. One multifamily real estate loan was restructured to provide payment relief. The Company reduced the loan’s interest rate and re-amortized payments. One commercial real estate, owner occupied loan was restructured pursuant to bankruptcy court orders. The restructuring provided payment relief by capitalizing interest, reducing the interest rate and re-amortizing payments. The fair value measurements of the restructured loans as of September 30, 2014 resulted in specific allocations to the allowance for loan losses totaling $249.

The Company analyzed its TDR portfolio for loans that defaulted during the three and nine month periods ended September 30, 2015 and September 30, 2014, and that were modified within 12 months prior to default. The Company defines default as one or more payments that occur more than 90 days past the due date, charge-offs, or foreclosure after the date of restructuring. There were no restructured loans that defaulted and were modified within 12 months prior to default for the three or nine month periods ended September 30, 2015 and 2014.