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Note 4 - Loans and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4. Loans and Allowance for Loan Losses

The Company’s loan and allowance for loan loss policies are as follows:

Loans are stated at unpaid principal balances, less net deferred loan fees and the allowance for loan losses. The Company grants real estate mortgage, commercial business and consumer loans. A substantial portion of the loan portfolio is represented by mortgage loans to customers in southern Indiana. The ability of the Company’s customers to honor their loan agreements is dependent upon the real estate and general economic conditions in this area.

Loan origination and commitment fees, as well as certain direct costs of underwriting and closing loans, are deferred and amortized as a yield adjustment to interest income over the lives of the related loans using the interest method. Amortization of net deferred loan fees is discontinued when a loan is placed on nonaccrual status.

The recognition of income on a loan is discontinued and previously accrued interest is reversed, when interest or principal payments become ninety (90) days past due unless, in the opinion of management, the outstanding interest remains collectible. Past due status is determined based on contractual terms. Generally, by applying the cash receipts method, interest income is subsequently recognized only as received until the loan is returned to accrual status. The cash receipts method is used when the likelihood of further loss on the loan is remote. Otherwise, the Company applies the cost recovery method and applies all payments as a reduction of the unpaid principal balance until the loan qualifies for return to accrual status. Interest income on impaired loans is recognized using the cost recovery method, unless the likelihood of further loss on the loan is remote.

A loan is restored to accrual status when all principal and interest payments are brought current and the borrower has demonstrated the ability to make future payments of principal and interest as scheduled, which generally requires that the borrower demonstrate a period of performance of at least six consecutive months.

For portfolio segments other than consumer loans, the Company’s practice is to charge-off any loan or portion of a loan when the loan is determined by management to be uncollectible due to the borrower’s failure to meet repayment terms, the borrower’s deteriorating or deteriorated financial condition, the depreciation of the underlying collateral, the loan’s classification as a loss by regulatory examiners, or for other reasons. A partial charge-off is recorded on a loan when the uncollectibility of a portion of the loan has been confirmed, such as when a loan is discharged in bankruptcy, the collateral is liquidated, a loan is restructured at a reduced principal balance, or other identifiable events that lead management to determine the full principal balance of the loan will not be repaid. A specific reserve is recognized as a component of the allowance for estimated losses on loans individually evaluated for impairment. Partial charge-offs on nonperforming and impaired loans are included in the Company’s historical loss experience used to estimate the general component of the allowance for loan losses as discussed below. Specific reserves are not considered charge-offs in management’s analysis of the allowance for loan losses because they are estimates and the outcome of the loan relationship is undetermined. At June 30, 2015, the Company had 11 loans on which partial charge-offs of $464,000 had been recorded.

Consumer loans not secured by real estate are typically charged off at 90 days past due, or earlier if deemed uncollectible, unless the loans are in the process of collection. Overdrafts are charged off after 45 days past due. Charge-offs are typically recorded on loans secured by real estate when the property is foreclosed upon.

The allowance for loan losses reflects management’s judgment of probable loan losses inherent in the loan portfolio at the balance sheet date. Additions to the allowance for loan losses are made by the provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The Company uses a disciplined process and methodology to evaluate the allowance for loan losses on at least a quarterly basis that is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of specific and general components. The specific component relates to loans that are individually evaluated for impairment or loans otherwise classified as doubtful, substandard, or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

The general component covers non-classified loans and classified loans that are found, upon individual evaluation, to not be impaired. Such loans are pooled by segment and losses are modeled using annualized historical loss experience adjusted for qualitative factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the most recent twelve calendar quarters unless the historical loss experience is not considered indicative of the level of risk in the remaining balance of a particular portfolio segment, in which case an adjustment is determined by management. The Company’s historical loss experience is then adjusted by an overall loss factor weighting adjustment based on a qualitative analysis prepared by management and reviewed on a quarterly basis. The overall loss factor considers changes in underwriting standards, economic conditions, changes and trends in past due and classified loans and other internal and external factors.

Management also applies additional loss factor multiples to loans classified as watch, special mention and substandard that are not individually evaluated for impairment. The loss factor multiples for classified loans are based on management’s assessment of historical trends regarding losses experienced on classified loans in prior periods. See below for additional discussion of the overall loss factor and loss factor multiples for classified loans as of June 30, 2015 and December 31, 2014, as well as a discussion of changes in management’s allowance for loan losses methodology from 2014 to 2015.

Management exercises significant judgment in evaluating the relevant historical loss experience and the qualitative factors. Management also monitors the differences between estimated and actual incurred loan losses for loans considered impaired in order to evaluate the effectiveness of the estimation process and make any changes in the methodology as necessary.

Management utilizes the following portfolio segments in its analysis of the allowance for loan losses: residential real estate, land, construction, commercial real estate, commercial business, home equity and second mortgage, and other consumer loans. Additional discussion of the portfolio segments and the risks associated with each segment can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Values for collateral dependent loans are generally based on appraisals obtained from independent licensed real estate appraisers, with adjustments applied for estimated costs to sell the property, costs to complete unfinished or repair damaged property and other factors. New appraisals are generally obtained for all significant properties when a loan is identified as impaired, and a property is considered significant if the value of the property is estimated to exceed $200,000. Subsequent appraisals are obtained as needed or if management believes there has been a significant change in the market value of the property. In instances where it is not deemed necessary to obtain a new appraisal, management bases its impairment and allowance for loan loss analysis on the original appraisal with adjustments for current conditions based on management’s assessment of market factors and management’s inspection of the property.

At June 30, 2015, the recorded investments in loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $436,000.

Loans at June 30, 2015 and December 31, 2014 consisted of the following:

(In thousands)		June 30, 2015				December 31, 2014

Real estate mortgage loans:
Residential		$	107,136			$	106,679
Land			10,526				11,028
Residential construction			13,691				10,347
Commercial real estate			75,521				78,314
Commercial real estate contruction			474				1,422
Commercial business loans			24,983				28,282
Consumer loans:
Home equity and second mortgage loans			37,844				37,513
Automobile loans			27,194				25,274
Loans secured by savings accounts			920				1,018
Unsecured loans			3,445				3,316
Other consumer loans			6,007				5,075
Gross loans			307,741				308,268
Less undisbursed portion of loans in process			(5,824	)			(3,325	)

Principal loan balance			301,917				304,943

Deferred loan origination fees, net			548				506
Allowance for loan losses			(3,600	)			(4,846	)

Loans, net		$	298,865			$	300,603

The following table provides the components of the Company’s recorded investment in loans at June 30, 2015:

		Residential Real Estate				Land				Construction				Commercial Real Estate				Commercial Business				Home Equity & 2nd Mtg				Other Consumer				Total
		(In thousands)
Recorded Investment in Loans:
Principal loan balance		$	107,136			$	10,526			$	8,341			$	75,521			$	24,983			$	37,844			$	37,566			$	301,917

Accrued interest receivable			339				38				21				168				131				124				146				967

Net deferred loan origination
fees and costs			63				4				0				(37	)			(7	)			525				0				548

Recorded investment in loans		$	107,538			$	10,568			$	8,362			$	75,652			$	25,107			$	38,493			$	37,712			$	303,432


Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment		$	1,419			$	20			$	0			$	1,800			$	0			$	143			$	0			$	3,382
Collectively evaluated for impairment			106,119				10,548				8,362				73,852				25,107				38,350				37,712				300,050
Acquired with deteriorated credit quality			0				0				0				0				0				0				0				0

Ending balance		$	107,538			$	10,568			$	8,362			$	75,652			$	25,107			$	38,493			$	37,712			$	303,432

The following table provides the components of the Company’s recorded investment in loans at December 31, 2014:

		Residential Real Estate				Land				Construction				Commercial Real Estate				Commercial Business				Home Equity & 2nd Mtg				Other Consumer				Total
		(In thousands)
Recorded Investment in Loans:
Principal loan balance		$	106,679			$	11,028			$	8,444			$	78,314			$	28,282			$	37,513			$	34,683			$	304,943

Accrued interest receivable			368				48				20				186				131				131				152				1,036

Net deferred loan origination
fees and costs			49				4				(1	)			(20	)			(7	)			481				0				506

Recorded investment in loans		$	107,096			$	11,080			$	8,463			$	78,480			$	28,406			$	38,125			$	34,835			$	306,485


Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment		$	1,411			$	16			$	0			$	1,819			$	1,642			$	151			$	0			$	5,039
Collectively evaluated for impairment			105,685				11,064				8,463				76,661				26,764				37,974				34,835				301,446
Acquired with deteriorated credit quality			0				0				0				0				0				0				0				0

Ending balance		$	107,096			$	11,080			$	8,463			$	78,480			$	28,406			$	38,125			$	34,835			$	306,485

An analysis of the allowance for loan losses as of June 30, 2015 is as follows:

		Residential Real Estate				Land				Construction				Commercial Real Estate				Commercial Business				Home Equity & 2nd Mtg				Other Consumer				Total
		(In thousands)
Ending allowance balance attributable to loans:

Individually evaluated for impairment		$	75			$	0			$	0			$	8			$	0			$	10			$	0			$	93
Collectively evaluated for impairment			559				173				51				1,661				161				638				264				3,507
Acquired with deteriorated credit quality			0				0				0				0				0				0				0				0

Ending balance		$	634			$	173			$	51			$	1,669			$	161			$	648			$	264			$	3,600

An analysis of the allowance for loan losses as of December 31, 2014 is as follows:

		Residential Real Estate				Land				Construction				Commercial Real Estate				Commercial Business				Home Equity & 2nd Mtg				Other Consumer				Total
		(In thousands)
Ending allowance balance attributable to loans:

Individually evaluated for impairment		$	47			$	0			$	0			$	11			$	1,293			$	0			$	0			$	1,351
Collectively evaluated for impairment			562				201				60				1,490				187				720				275				3,495
Acquired with deteriorated credit quality			0				0				0				0				0				0				0				0

Ending balance		$	609			$	201			$	60			$	1,501			$	1,480			$	720			$	275			$	4,846

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2015 is as follows:

		Residential Real Estate				Land				Construction				Commercial Real Estate				Commercial Business				Home Equity & 2nd Mtg				Other Consumer				Total
		(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2015
Beginning balance		$	672			$	197			$	65			$	1,462			$	239			$	716			$	283			$	3,634
Provisions for loan losses			(39	)			(24	)			(14	)			204				(58	)			(38	)			19				50
Charge-offs			0				0				0				0				(22	)			(31	)			(72	)			(125	)
Recoveries			1				0				0				3				2				1				34				41

Ending balance		$	634			$	173			$	51			$	1,669			$	161			$	648			$	264			$	3,600


Changes in Allowance for Loan Losses for the six-months ended June 30, 2015
Beginning balance		$	609			$	201			$	60			$	1,501			$	1,480			$	720			$	275			$	4,846
Provisions for loan losses			42				(28	)			(9	)			156				(117	)			(45	)			51				50
Charge-offs			(20	)			0				0				0				(1,205	)			(33	)			(124	)			(1,382	)
Recoveries			3				0				0				12				3				6				62				86

Ending balance		$	634			$	173			$	51			$	1,669			$	161			$	648			$	264			$	3,600

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2014 is as follows:

		Residential Real Estate				Land				Construction				Commercial Real Estate				Commercial Business				Home Equity & 2nd Mtg				Other Consumer				Total
		(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2014
Beginning balance		$	838			$	144			$	70			$	1,276			$	1,450			$	902			$	331			$	5,011
Provisions for loan losses			24				9				8				4				(10	)			41				14				90
Charge-offs			(21	)			0				0				0				0				(36	)			(36	)			(93	)
Recoveries			2				0				0				0				4				25				27				58

Ending balance		$	843			$	153			$	78			$	1,280			$	1,444			$	932			$	336			$	5,066


Changes in Allowance for Loan Losses for the six-months ended June 30, 2014
Beginning balance		$	811			$	152			$	63			$	1,284			$	1,446			$	877			$	289			$	4,922
Provisions for loan losses			113				1				15				(4	)			(7	)			(70	)			67				115
Charge-offs			(84	)			0				0				0				0				(54	)			(88	)			(226	)
Recoveries			3				0				0				0				5				179				68				255

Ending balance		$	843			$	153			$	78			$	1,280			$	1,444			$	932			$	336			$	5,066

At June 30, 2015 and December 31, 2014, management applied specific qualitative factor adjustments to the residential real estate, construction, commercial real estate, commercial business, vacant land, and home equity and second mortgage portfolio segments as they determined that the historical loss experience was not indicative of the level of risk in the remaining balance of those portfolio segments. These adjustments increased the loss factors by 0.25% to 20% for certain loan groups, and increased the estimated allowance for loan losses related to those portfolio segments by approximately $1.4 million and $1.6 million at June 30, 2015 and December 31, 2014, respectively. These changes were made to reflect management’s estimates of inherent losses in these portfolio segments at June 30, 2015 and December 31, 2014.

At June 30, 2015 and December 31, 2014, for each loan portfolio segment, management applied an overall qualitative factor of 1.18 to the Company’s historical loss factors. The overall qualitative factor is derived from management’s analysis of changes and trends in the following qualitative factors: underwriting standards, economic conditions, past due loans and other internal and external factors. Each of the four factors above was assigned an equal weight to arrive at an average for the overall qualitative factor of 1.18 at June 30, 2015 and December 31, 2014, respectively. The effect of the overall qualitative factor was to increase the estimated allowance for loan losses by $527,000 and $520,000 at June 30, 2015 and December 31, 2014, respectively. Additional discussion of the overall qualitative factor can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. There were no changes in management’s assessment of the overall qualitative factor components from December 31, 2014 to June 30, 2015.

Management also adjusts the historical loss factors for loans classified as watch, special mention and substandard that are not individually evaluated for impairment. The adjustments consider the increased likelihood of loss on classified loans based on the Company’s separate historical experience for classified loans. The effect of the adjustments for classified loans was to increase the estimated allowance for loan losses by $532,000 and $664,000 at June 30, 2015 and December 31, 2014, respectively.

The following table summarizes the Company’s impaired loans as of June 30, 2015 and for the three months and six months ended June 30, 2015. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three or six month periods ended June 30, 2015:

		At June 30, 2015												Three Months Ended June 30, 2015								Six Months Ended June 30, 2015
		Recorded Investment				Unpaid Principal Balance				Related Allowance				Average Recorded Investment				Interest Income Recognized				Average Recorded Investment				Interest Income Recognized
		(In thousands)
Loans with no related allowance recorded:
Residential		$	1,122			$	1,444			$	-			$	1,235			$	5			$	1,204			$	10
Land			20				22				-				20				0				18				0
Construction			0				0				-				0				0				0				0
Commercial real estate			1,762				1,801				-				1,773				19				1,774				38
Commercial business			0				0				-				13				0				9				0
Home equity/2nd mortgage			63				81				-				65				0				67				1
Other consumer			0				0				-				0				0				0				0

			2,967				3,348				-				3,106				24				3,072				49

Loans with an allowance recorded:
Residential			297				335				75				254				0				259				0
Land			0				0				0				0				0				0				0
Construction			0				0				0				0				0				0				0
Commercial real estate			38				63				8				39				0				40				0
Commercial business			0				0				0				18				0				559				0
Home equity/2nd mortgage			80				81				10				80				0				80				0
Other consumer			0				0				0				0				0				0				0

			415				479				93				391				0				938				0

Total:
Residential			1,419				1,779				75				1,489				5				1,463				10
Land			20				22				0				20				0				18				0
Construction			0				0				0				0				0				0				0
Commercial real estate			1,800				1,864				8				1,812				19				1,814				38
Commercial business			0				0				0				31				0				568				0
Home equity/2nd mortgage			143				162				10				145				0				147				1
Other consumer			0				0				0				0				0				0				0

		$	3,382			$	3,827			$	93			$	3,497			$	24			$	4,010			$	49

The following table summarizes the Company’s impaired loans for the three months and six months ended June 30, 2014. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the three or six month periods ended June 30, 2014:

		Three Months Ended June 30, 2014								Six Months Ended June 30, 2014
		Average Recorded Investment				Interest Income Recognized				Average Recorded Investment				Interest Income Recognized

Loans with no related allowance recorded:
Residential		$	1,345			$	8			$	1,427			$	18
Land			119				0				119				0
Construction			130				0				87				0
Commercial real estate			1,525				17				1,562				34
Commercial business			94				0				126				0
Home equity/2nd mortgage			169				0				197				1
Other consumer			0				0				0				0

			3,382				25				3,518				53

Loans with an allowance recorded:
Residential			436				0				440				0
Land			3				0				2				0
Construction			0				0				0				0
Commercial real estate			1,123				0				1,065				0
Commercial business			1,726				0				1,720				0
Home equity/2nd mortgage			16				0				18				0
Other consumer			0				0				0				0

			3,304				0				3,245				0

Total:
Residential			1,781				8				1,867				18
Land			122				0				121				0
Construction			130				0				87				0
Commercial real estate			2,648				17				2,627				34
Commercial business			1,820				0				1,846				0
Home equity/2nd mortgage			185				0				215				1
Other consumer			0				0				0				0

		$	6,686			$	25			$	6,763			$	53

The following table summarizes the Company’s impaired loans as of December 31, 2014:

		Recorded Investment				Unpaid Principal Balance				Related Allowance
		(In thousands)
Loans with no related allowance recorded:
Residential		$	1,141			$	1,446			$	-
Land			16				18				-
Construction			0				0				-
Commercial real estate			1,777				1,808				-
Commercial business			0				0				-
Home equity/2nd mortgage			71				87				-
Other consumer			0				0				-

			3,005				3,359				-

Loans with an allowance recorded:
Residential			270				304				47
Land			0				0				0
Construction			0				0				0
Commercial real estate			42				65				11
Commercial business			1,642				1,909				1,293
Home equity/2nd mortgage			80				98				0
Other consumer			0				0				0

			2,034				2,376				1,351

Total:
Residential			1,411				1,750				47
Land			16				18				0
Construction			0				0				0
Commercial real estate			1,819				1,873				11
Commercial business			1,642				1,909				1,293
Home equity/2nd mortgage			151				185				0
Other consumer			0				0				0

		$	5,039			$	5,735			$	1,351

Nonperforming loans consists of nonaccrual loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming loans at June 30, 2015 and December 31, 2014:

		June 30, 2015												December 31, 2014
		Nonaccrual Loans				Loans 90+ Days Past Due Still Accruing				Total Nonperforming Loans				Nonaccrual Loans				Loans 90+ Days Past Due Still Accruing				Total Nonperforming Loans
		(In thousands)

Residential		$	1,069			$	14			$	1,083			$	919			$	68			$	987
Land			20				0				20				16				0				16
Construction			0				0				0				0				0				0
Commercial real estate			434				21				455				433				0				433
Commercial business			0				0				0				1,642				0				1,642
Home equity/2nd mortgage			122				0				122				129				14				143
Other consumer			0				19				19				0				3				3

Total		$	1,645			$	54			$	1,699			$	3,139			$	85			$	3,224

The following table presents the aging of the recorded investment in loans at June 30, 2015:

		30-59 Days Past Due				60-89 Days Past Due				90 Days or More Past Due				Total Past Due				Current				Total Loans
		(In thousands)

Residential		$	2,556			$	519			$	587			$	3,662			$	103,876			$	107,538
Land			0				8				20				28				10,540				10,568
Construction			0				0				0				0				8,362				8,362
Commercial real estate			0				192				77				269				75,383				75,652
Commercial business			0				0				0				0				25,107				25,107
Home equity/2nd mortgage			124				92				3				219				38,274				38,493
Other consumer			200				25				19				244				37,468				37,712

Total		$	2,880			$	836			$	706			$	4,422			$	299,010			$	303,432

The following table presents the aging of the recorded investment in loans at December 31, 2014:

		30-59 Days Past Due				60-89 Days Past Due				90 Days or More Past Due				Total Past Due				Current				Total Loans
		(In thousands)

Residential		$	3,070			$	551			$	308			$	3,929			$	103,167			$	107,096
Land			24				124				0				148				10,932				11,080
Construction			0				0				0				0				8,463				8,463
Commercial real estate			54				133				42				229				78,251				78,480
Commercial business			0				0				0				0				28,406				28,406
Home equity/2nd mortgage			153				23				97				273				37,852				38,125
Other consumer			263				26				3				292				34,543				34,835

Total		$	3,564			$	857			$	450			$	4,871			$	301,614			$	306,485

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, 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.

Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the institution’s books as an asset is not warranted.

Loans not meeting the criteria above that are analyzed individually as part of the described process are considered to be pass rated loans.

The following table presents the recorded investment in loans by risk category as of the date indicated:

		Residential Real Estate				Land				Construction				Commercial Real Estate				Commercial Business				Home Equity & 2nd Mtg				Other Consumer				Total
		(In thousands)
June 30, 2015
Pass		$	105,401			$	7,661			$	8,362			$	72,937			$	24,264			$	38,229			$	37,639			$	294,493
Special Mention			100				92				0				1,649				514				1				57				2,413
Substandard			968				2,795				0				632				329				141				16				4,881
Doubtful			1,069				20				0				434				0				122				0				1,645
Loss			0				0				0				0				0				0				0				0

Total		$	107,538			$	10,568			$	8,362			$	75,652			$	25,107			$	38,493			$	37,712			$	303,432

December 31, 2014
Pass		$	104,780			$	7,969			$	7,722			$	73,204			$	26,137			$	37,860			$	34,770			$	292,442
Special Mention			105				94				741				2,648				298				2				49				3,937
Substandard			1,292				3,001				0				2,195				329				134				16				6,967
Doubtful			919				16				0				433				1,642				129				0				3,139
Loss			0				0				0				0				0				0				0				0

Total		$	107,096			$	11,080			$	8,463			$	78,480			$	28,406			$	38,125			$	34,835			$	306,485

The following table summarizes the Company’s troubled debt restructurings (TDRs) by accrual status as of June 30, 2015 and December 31, 2014:

		June 30, 2015																December 31, 2014
		Accruing				Nonaccrual				Total				Related Allowance for Loan Losses				Accruing				Nonaccrual				Total				Related Allowance for Loan Losses
		(In thousands)
Troubled debt restructurings:
Residential real estate		$	349			$	310			$	659			$	3			$	492			$	166			$	658			$	6
Commercial real estate			1,367				331				1,698				0				1,386				338				1,724				0
Commercial business			0				0				0				0				0				1,642				1,642				1,292
Home equity and 2nd mortgage			21				0				21				0				22				0				22				0

Total		$	1,737			$	641			$	2,378			$	3			$	1,900			$	2,146			$	4,046			$	1,298

At June 30, 2015 and December 31, 2014, there were no commitments to lend additional funds to debtors whose loan terms have been modified in a TDR.

There were no TDRs that were restructured during the three or six months ended June 30, 2015.

The following table summarizes information in regard to TDRs that were restructured during the six months ended June 30, 2014. There were no TDRs that were restructured during the three months ended June 30, 2014:

		Six months ended June 30, 2014
		Number of Contracts				Pre-Modification Outstanding Balance				Post-Modification Outstanding Balance
		(Dollars in thousands)

Troubled debt restructurings:
Commercial real estate			3			$	542			$	542

Total			3			$	542			$	542

For the TDRs listed above, the terms of modification included a temporary decrease in the borrowers’ monthly payments. There were no principal charge-offs recorded as a result of TDRs during the three months and six months ended June 30, 2014, and there was no specific allowance for loan losses related to TDRs modified during the three months and six months ended June 30, 2014.

There were no TDRs modified within the previous 12 months for which there was a subsequent payment default (defined as the loan becoming more than 90 days past due, being moved to nonaccrual status, or the collateral being foreclosed upon) during the three months and six months ended June 30, 2015 and 2014. In the event that a TDR subsequently defaults, the Company evaluates the restructuring for possible impairment. As a result, the related allowance for loan losses may be increased or charge-offs may be taken to reduce the carrying amount of the loan.