Note 3 - Loans/Leases Receivable

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Financing Receivables [Text Block]

NOTE 3 – LOANS/LEASES RECEIVABLE

The composition of the loan/lease portfolio as of March 31, 2016 and December 31, 2015 is presented as follows:

	As of March 31, 2016			As of December 31, 2015
C&I loans	$	682,056,782		$	648,159,892
CRE loans
Owner-occupied CRE		261,730,899			252,523,164
Commercial construction, land development, and other land		37,970,546			49,083,844
Other non owner-occupied CRE		466,457,920			422,761,757
		766,159,365			724,368,765
Direct financing leases *		172,774,048			173,655,605
Residential real estate loans **		173,096,209			170,432,530
Installment and other consumer loans		71,842,268			73,669,493
		1,865,928,672			1,790,286,285
Plus deferred loan/lease origination costs, net of fees		7,894,944			7,736,390
		1,873,823,616			1,798,022,675
Less allowance		(27,395,442	)		(26,140,906	)
	$	1,846,428,174		$	1,771,881,769
* Direct financing leases:
Net minimum lease payments to be received	$	194,005,721		$	195,476,230
Estimated unguaranteed residual values of leased assets		1,131,634			1,165,706
Unearned lease/residual income		(22,363,307	)		(22,986,331	)
		172,774,048			173,655,605
Plus deferred lease origination costs, net of fees		6,493,124			6,594,582
		179,267,172			180,250,187
Less allowance		(3,287,230	)		(3,395,088	)
	$	175,979,942		$	176,855,099

*Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum. The evaluation consists of discussions with reputable and current vendors, which is combined with management’s expertise and understanding of the current states of particular industries to determine informal valuations of the equipment. As necessary and where available, management will utilize valuations by independent appraisers. The large majority of leases with residual values contain a lease options rider, which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value. In these cases, the residual value is protected and the risk of loss is minimal. There were no losses related to residual values for the three months ended March 31, 2016 and 2015.

**Includes residential real estate loans held for sale totaling $765,385 and $565,850 as of March 31, 2016, and December 31, 2015, respectively.

The aging of the loan/lease portfolio by classes of loans/leases as of March 31, 2016 and December 31, 2015 is presented as follows:

	As of March 31, 2016
Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
C&I	$	674,901,078		$	1,038,410		$	469,292		$	-		$	5,648,002		$	682,056,782
CRE
Owner-Occupied CRE		260,963,128			109,210			-			-			658,561			261,730,899
Commercial Construction, Land Development, and Other Land		37,779,180			-			-			-			191,366			37,970,546
Other Non Owner-Occupied CRE		464,239,777			898,733			212,884			-			1,106,526			466,457,920
Direct Financing Leases		169,792,466			977,630			207,496			-			1,796,456			172,774,048
Residential Real Estate		168,865,064			3,133,246			-			46,256			1,051,643			173,096,209
Installment and Other Consumer		70,864,000			645,537			12,776			162			319,793			71,842,268
	$	1,847,404,693		$	6,802,766		$	902,448		$	46,418		$	10,772,347		$	1,865,928,672
As a percentage of total loan/lease portfolio		99.01	%		0.36	%		0.05	%		0.00	%		0.58	%		100.00	%

	As of December 31, 2015
Classes of Loans/Leases	Current			30-59 Days Past Due			60-89 Days Past Due			Accruing Past Due 90 Days or More			Nonaccrual Loans/Leases			Total
C&I	$	640,725,241		$	1,636,860		$	5,816		$	-		$	5,791,975		$	648,159,892
CRE
Owner-Occupied CRE		251,612,752			182,949			-			-			727,463			252,523,164
Commercial Construction, Land Development, and Other Land		48,890,040			-			-			-			193,804			49,083,844
Other Non Owner-Occupied CRE		420,819,874			614,732			219,383			-			1,107,768			422,761,757
Direct Financing Leases		170,021,289			1,490,818			439,314			2,843			1,701,341			173,655,605
Residential Real Estate		166,415,118			2,800,589			200,080			-			1,016,743			170,432,530
Installment and Other Consumer		73,134,197			412,052			14,127			-			109,117			73,669,493
	$	1,771,618,511		$	7,138,000		$	878,720		$	2,843		$	10,648,211		$	1,790,286,285
As a percentage of total loan/lease portfolio		98.96	%		0.40	%		0.05	%		0.00	%		0.59	%		100.00	%

NPLs by classes of loans/leases as of March 31, 2016 and December 31, 2015 are presented as follows:

	As of March 31, 2016
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases *		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	-	$	5,648,002	$	172,093	$	5,820,095		48.60	%
CRE
Owner-Occupied CRE		-		658,561		-		658,561		5.50	%
Commercial Construction, Land Development, and Other Land		-		191,366		-		191,366		1.60	%
Other Non Owner-Occupied CRE		-		1,106,526		-		1,106,526		9.24	%
Direct Financing Leases		-		1,796,456		456,592		2,253,048		18.81	%
Residential Real Estate		46,256		1,051,643		398,337		1,496,236		12.49	%
Installment and Other Consumer		162		319,793		129,808		449,763		3.76	%
	$	46,418	$	10,772,347	$	1,156,830	$	11,975,595		100.00	%

*Nonaccrual loans/leases included $1,576,057 of TDRs, including $1,217,243 in C&I loans, $191,366 in CRE loans, $37,750 in direct financing leases, $115,671 in residential real estate loans, and $14,027 in installment loans.

	As of December 31, 2015
Classes of Loans/Leases	Accruing Past Due 90 Days or More		Nonaccrual Loans/Leases **		Accruing TDRs		Total NPLs		Percentage of Total NPLs
C&I	$	-	$	5,791,975	$	173,087	$	5,965,062		50.96	%
CRE
Owner-Occupied CRE		-		727,463		-	$	727,463		6.22	%
Commercial Construction, Land Development, and Other Land		-		193,804		-	$	193,804		1.66	%
Other Non Owner-Occupied CRE		-		1,107,768		-	$	1,107,768		9.46	%
Direct Financing Leases		2,843		1,701,341		-	$	1,704,184		14.56	%
Residential Real Estate		-		1,016,743		402,044	$	1,418,787		12.12	%
Installment and Other Consumer		-		109,117		478,625	$	587,742		5.02	%
	$	2,843	$	10,648,211	$	1,053,756	$	11,704,810		100.00	%

**Nonaccrual loans/leases included $1,533,657 of TDRs, including $1,164,423 in C&I loans, $193,804 in CRE loans, $42,098 in direct financing leases, $119,305 in residential real estate loans, and $14,027 in installment loans.

Changes in the allowance by portfolio segment for the three months ended March 31, 2016 and 2015, respectively, are presented as follows:

	Three Months Ended March 31, 2016
	C&I			CRE		Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Balance, beginning	$	10,484,080		$	9,375,117	$	3,395,088		$	1,790,150		$	1,096,471		$	26,140,906
Provisions charged to expense		739,831			715,450		478,245			62,656			76,803			2,072,985
Loans/leases charged off		(243,566	)		-		(600,938	)		(16,184	)		(7,596	)		(868,284	)
Recoveries on loans/leases previously charged off		11,634			-		14,836			-			23,365			49,835
Balance, ending	$	10,991,979		$	10,090,567	$	3,287,231		$	1,836,622		$	1,189,043		$	27,395,442

	Three Months Ended March 31, 2015
	C&I			CRE			Direct Financing Leases			Residential Real Estate		Installment and Other Consumer			Total
Balance, beginning	$	8,833,832		$	8,353,386		$	3,359,400		$	1,525,952	$	1,001,795		$	23,074,365
Provisions charged to expense		388,641			835,894			403,452			71,802		10,667			1,710,456
Loans/leases charged off		(200,301	)		(351,076	)		(547,492	)		-		(8,794	)		(1,107,663	)
Recoveries on loans/leases previously charged off		154,992			-			12,098			-		39,025			206,115
Balance, ending	$	9,177,164		$	8,838,204		$	3,227,458		$	1,597,754	$	1,042,693		$	23,883,273

The allowance by impairment evaluation and by portfolio segment as of March 31, 2016 and December 31, 2015 is presented as follows:

	As of March 31, 2016
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	2,168,454		$	82,296		$	483,193		$	199,498		$	246,413		$	3,179,854
Allowance for nonimpaired loans/leases		8,823,525			10,008,271			2,804,038			1,637,124			942,630			24,215,588
	$	10,991,979		$	10,090,567		$	3,287,231		$	1,836,622		$	1,189,043		$	27,395,442
Impaired loans/leases	$	5,178,446		$	1,946,451		$	2,253,046		$	1,496,236		$	449,600		$	11,323,779
Nonimpaired loans/leases		676,878,336			764,212,914			170,521,002			171,599,973			71,392,668			1,854,604,893
	$	682,056,782		$	766,159,365		$	172,774,048		$	173,096,209		$	71,842,268		$	1,865,928,672
Allowance as a percentage of impaired loans/leases		41.87	%		4.23	%		21.45	%		13.33	%		54.81	%		28.08	%
Allowance as a percentage of nonimpaired loans/leases		1.30	%		1.31	%		1.64	%		0.95	%		1.32	%		1.31	%
Total allowance as a percentage of total loans/leases		1.61	%		1.32	%		1.90	%		1.06	%		1.66	%		1.46	%

	As of December 31, 2015
	C&I			CRE			Direct Financing Leases			Residential Real Estate			Installment and Other Consumer			Total
Allowance for impaired loans/leases	$	2,592,270		$	76,934		$	306,193		$	185,801		$	143,089		$	3,304,287
Allowance for nonimpaired loans/leases		7,891,810			9,298,183			3,088,895			1,604,349			953,382			22,836,619
	$	10,484,080		$	9,375,117		$	3,395,088		$	1,790,150		$	1,096,471		$	26,140,906
Impaired loans/leases	$	5,286,482		$	2,029,035		$	1,701,341		$	1,418,787		$	587,742		$	11,023,387
Nonimpaired loans/leases		642,873,410			722,339,730			171,954,264			169,013,743			73,081,751			1,779,262,898
	$	648,159,892		$	724,368,765		$	173,655,605		$	170,432,530		$	73,669,493		$	1,790,286,285
Allowance as a percentage of impaired loans/leases		49.04	%		3.79	%		18.00	%		13.10	%		24.35	%		29.98	%
Allowance as a percentage of nonimpaired loans/leases		1.23	%		1.29	%		1.80	%		0.95	%		1.30	%		1.28	%
Total allowance as a percentage of total loans/leases		1.62	%		1.29	%		1.96	%		1.05	%		1.49	%		1.45	%

Information for impaired loans/leases is presented in the tables below. The recorded investment represents customer balances net of any partial charge-offs recognized on the loan/lease. The unpaid principal balance represents the recorded balance outstanding on the loan/lease prior to any partial charge-offs.

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the three months ended March 31, 2016 are presented as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	286,508	$	477,450	$	-	$	347,369	$	1,824	$	1,824
CRE
Owner-Occupied CRE		242,887		336,661		-		244,824		-		-
Commercial Construction, Land Development, and Other Land		-		-		-		-		-		-
Other Non Owner-Occupied CRE		1,512,198		1,512,198		-		1,545,334		-		-
Direct Financing Leases		1,314,779		1,314,779		-		1,176,588		11,603		11,603
Residential Real Estate		585,186		624,387		-		585,981		1,038		1,038
Installment and Other Consumer		47,480		47,480		-		212,392		-		-
	$	3,989,038	$	4,312,955	$	-	$	4,112,488	$	14,465	$	14,465
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	4,891,938	$	4,895,777	$	2,168,454	$	4,885,096	$	-	$	-
CRE
Owner-Occupied CRE		-		-		-		-		-		-
Commercial Construction, Land Development, and Other Land		191,366		203,366		82,296		192,585		-		-
Other Non Owner-Occupied CRE		-		-		-		-		-		-
Direct Financing Leases		938,267		938,267		483,193		800,606		-		-
Residential Real Estate		911,050		946,628		199,498		871,531		1,958		1,958
Installment and Other Consumer		402,120		402,120		246,413		306,279		1,500		1,500
	$	7,334,741	$	7,386,158	$	3,179,854	$	7,056,097	$	3,458	$	3,458
Total Impaired Loans/Leases:
C&I	$	5,178,446	$	5,373,227	$	2,168,454	$	5,232,465	$	1,824	$	1,824
CRE
Owner-Occupied CRE		242,887		336,661		-		244,824		-		-
Commercial Construction, Land Development, and Other Land		191,366		203,366		82,296		192,585		-		-
Other Non Owner-Occupied CRE		1,512,198		1,512,198		-		1,545,334		-		-
Direct Financing Leases		2,253,046		2,253,046		483,193		1,977,194		11,603		11,603
Residential Real Estate		1,496,236		1,571,015		199,498		1,457,512		2,996		2,996
Installment and Other Consumer		449,600		449,600		246,413		518,671		1,500		1,500
	$	11,323,779	$	11,699,113	$	3,179,854	$	11,168,585	$	17,923	$	17,923

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates.

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the three months ended March 31, 2015 are presented as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Income Recognized for Cash Payments Received
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	331,612	$	425,636	$	-	$	1,352,320	$	1,849	$	1,849
CRE
Owner-Occupied CRE		173,131		269,354		-		189,621		-		-
Commercial Construction, Land Development, and Other Land		171,186		511,204		-		171,186		-		-
Other Non Owner-Occupied CRE		290,577		1,528,456		-		1,102,174		-		-
Direct Financing Leases		665,735		665,735		-		1,009,487		4,109		4,109
Residential Real Estate		981,608		1,017,186		-		1,089,298		483		483
Installment and Other Consumer		726,050		726,050		-		698,685		-		-
	$	3,339,899	$	5,143,621	$	-	$	5,612,771	$	6,441	$	6,441
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	4,969,554	$	4,973,392	$	2,513,023	$	4,938,115	$	-	$	-
CRE
Owner-Occupied CRE		454,980		454,980		15,154		468,590		-		-
Commercial Construction, Land Development, and Other Land		197,225		209,225		46,570		197,526		-		-
Other Non Owner-Occupied CRE		4,208,602		4,655,235		767,113		4,335,446		-		-
Direct Financing Leases		457,463		457,463		283,485		380,548		-		-
Residential Real Estate		864,957		864,957		180,160		728,349		2,830		2,830
Installment and Other Consumer		611,096		611,096		267,430		552,663		2,260		2,260
	$	11,763,877	$	12,226,348	$	4,072,935	$	11,601,237	$	5,090	$	5,090
Total Impaired Loans/Leases:
C&I	$	5,301,166	$	5,399,028	$	2,513,023	$	6,290,435	$	1,849	$	1,849
CRE
Owner-Occupied CRE		628,111		724,334		15,154		658,211		-		-
Commercial Construction, Land Development, and Other Land		368,411		720,429		46,570		368,712		-		-
Other Non Owner-Occupied CRE		4,499,179		6,183,691		767,113		5,437,620		-		-
Direct Financing Leases		1,123,198		1,123,198		283,485		1,390,035		4,109		4,109
Residential Real Estate		1,846,565		1,882,143		180,160		1,817,647		3,313		3,313
Installment and Other Consumer		1,337,146		1,337,146		267,430		1,251,348		2,260		2,260
	$	15,103,776	$	17,369,969	$	4,072,935	$	17,214,008	$	11,531	$	11,531

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates. 

Loans/leases, by classes of financing receivable, considered to be impaired as of December 31, 2015 are presented as follows:

Classes of Loans/Leases	Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	234,636	$	346,072	$	-
CRE
Owner-Occupied CRE		256,761		350,535		-
Commercial Construction, Land Development, and Other Land		-		228,818		-
Other Non Owner-Occupied CRE		1,578,470		1,578,470		-
Direct Financing Leases		871,884		871,884		-
Residential Real Estate		613,486		649,064		-
Installment and Other Consumer		377,304		377,304		-
	$	3,932,541	$	4,402,147	$	-
Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	5,051,846	$	5,055,685	$	2,592,270
CRE
Owner-Occupied CRE		-		-		-
Commercial Construction, Land Development, and Other Land		193,804		205,804		76,934
Other Non Owner-Occupied CRE		-		-		-
Direct Financing Leases		829,457		829,457		306,193
Residential Real Estate		805,301		805,301		185,801
Installment and Other Consumer		210,438		210,438		143,089
	$	7,090,846	$	7,106,685	$	3,304,287
Total Impaired Loans/Leases:
C&I	$	5,286,482	$	5,401,757	$	2,592,270
CRE
Owner-Occupied CRE		256,761		350,535		-
Commercial Construction, Land Development, and Other Land		193,804		434,622		76,934
Other Non Owner-Occupied CRE		1,578,470		1,578,470		-
Direct Financing Leases		1,701,341		1,701,341		306,193
Residential Real Estate		1,418,787		1,454,365		185,801
Installment and Other Consumer		587,742		587,742		143,089
	$	11,023,387	$	11,508,832	$	3,304,287

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates. 

For C&I and CRE loans, the Company’s credit quality indicator consists of internally assigned risk ratings. Each commercial loan is assigned a risk rating upon origination. The risk rating is reviewed every 15 months, at a minimum, and on an as-needed basis depending on the specific circumstances of the loan.

For direct financing leases, residential real estate loans, and installment and other consumer loans, the Company’s credit quality indicator is performance determined by delinquency status. Delinquency status is updated daily by the Company’s loan system.

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of March 31, 2016 and December 31, 2015:

	As of March 31, 2016
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	647,678,612	$	250,031,858	$	35,892,683	$	448,275,195	$	1,381,878,348		95.42	%
Special Mention (Rating 6)		12,346,445		3,376,191		1,780,000		10,562,085		28,064,721		1.94	%
Substandard (Rating 7)		22,031,725		8,322,850		297,863		7,620,640		38,273,078		2.64	%
Doubtful (Rating 8)		-		-		-		-		-		-
	$	682,056,782	$	261,730,899	$	37,970,546	$	466,457,920	$	1,448,216,147		100.00	%

	As of March 31, 2016
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	170,521,000	$	171,599,973	$	71,392,505	$	413,513,478		98.99	%
Nonperforming		2,253,048		1,496,236		449,763		4,199,047		1.01	%
	$	172,774,048	$	173,096,209	$	71,842,268	$	417,712,525		100.00	%

	As of December 31, 2015
			CRE
					Non Owner-Occupied
Internally Assigned Risk Rating	C&I		Owner-Occupied CRE		Commercial Construction, Land Development, and Other Land		Other CRE		Total		As a % of Total
Pass (Ratings 1 through 5)	$	616,200,797	$	238,119,608	$	46,929,876	$	406,027,442	$	1,307,277,723		95.24	%
Special Mention (Rating 6)		18,031,845		8,630,658		1,780,000		8,846,286		37,288,789		2.72	%
Substandard (Rating 7)		13,927,250		5,772,898		373,968		7,888,029		27,962,145		2.04	%
Doubtful (Rating 8)		-		-		-		-		-		-
	$	648,159,892	$	252,523,164	$	49,083,844	$	422,761,757	$	1,372,528,657		100.00	%

	As of December 31, 2015
Delinquency Status *	Direct Financing Leases		Residential Real Estate		Installment and Other Consumer		Total		As a % of Total
Performing	$	171,951,421	$	169,013,743	$	73,081,751	$	414,046,915		99.11	%
Nonperforming		1,704,184		1,418,787		587,742		3,710,713		0.89	%
	$	173,655,605	$	170,432,530	$	73,669,493	$	417,757,628		100.00	%

*Performing = loans/leases accruing and less than 90 days past due. Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to 90 days past due, and accruing TDRs.

As of March 31, 2016 and December 31, 2015, TDRs totaled $2,732,887 and $2,587,413, respectively.

For each class of financing receivable, the following presents the number and recorded investment of TDRs, by type of concession, that were restructured during the three months ended March 31, 2016. There were no TDRs that were restructured during the three months ended March 31, 2015. The difference between the pre-modification recorded investment and the post-modification recorded investment would be any partial charge-offs at the time of the restructuring.

	For the three months ended March 31, 2016
Classes of Loans/Leases	Number of Loans / Leases		Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Specific Allowance
CONCESSION - Extension of Maturity
Direct Financing Leases		4	$	410,653	$	410,653	$	-
		4	$	410,653	$	410,653	$	-
CONCESSION - Significant Payment Delay
Direct Financing Leases		1	$	45,939	$	45,939	$	-
		1	$	45,939	$	45,939	$	-
TOTAL		5	$	456,592	$	456,592	$	-

Of the TDRs reported above, none were on nonaccrual as of March 31, 2016.

For the three months ended March 31, 2016 and 2015, none of the Company’s TDRs had redefaulted within 12 months subsequent to restructure where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status.