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Note 5 - Loans and Allowance for Loan Losses | 12 Months Ended
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Dec. 31, 2015
Receivables [Abstract] |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
(5) |  | LOANS AND ALLOWANCE FOR LOAN LOSSES
Loans at December 31, 2015 and 2014 consisted of the following:
(In thousands) |  | 2015 |  | 2014
Real estate mortgage loans: |  |  |  |  |  |  |  |
Residential |  | $ | 147,933 |  |  | $ | 106,679 |
Land |  |  | 12,962 |  |  |  | 11,028 |
Residential construction |  |  | 16,391 |  |  |  | 10,347 |
Commercial real estate |  |  | 84,493 |  |  |  | 78,314 |
Commercial real estate construction |  |  | 1,090 |  |  |  | 1,422 |
Commercial business loans |  |  | 23,095 |  |  |  | 28,282 |
Consumer loans: |  |  |  |  |  |  |  |
Home equity and second mortgage loans |  |  | 38,476 |  |  |  | 37,513 |
Automobile loans |  |  | 28,828 |  |  |  | 25,274 |
Loans secured by savings accounts |  |  | 2,096 |  |  |  | 1,018 |
Unsecured loans |  |  | 4,350 |  |  |  | 3,316 |
Other consumer loans |  |  | 7,210 |  |  |  | 5,075 |
Gross loans |  |  | 366,924 |  |  |  | 308,268 |
Less undisbursed portion of loans in process |  |  | (4,926 | ) |  |  | (3,325 | )
Principal loan balance |  |  | 361,998 |  |  |  | 304,943 |
Deferred loan origination fees, net |  |  | 583 |  |  |  | 506 |
Allowance for loan losses |  |  | (3,415 | ) |  |  | (4,846 | )
Loans, net |  | $ | 359,166 |  |  | $ | 300,603 |
At December 31, 2015, the net unaccreted discount on loans acquired from Peoples, excluding PCI loans, was $590,000. At December 31, 2015, residential mortgage loans secured by residential properties without private mortgage insurance or government guarantee and with loan-to-value ratios exceeding 90% amounted to approximately $2.5 million. Mortgage loans serviced for the benefit of others amounted to $156,000 and $169,000 at December 31, 2015 and 2014, respectively. The Bank has entered into loan transactions with certain directors, officers and their affiliates (i.e., related parties). In the opinion of management, such indebtedness was incurred in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with unrelated persons. The following table represents the aggregate activity for related party loans during the year ended December 31, 2015. The beginning balance has been adjusted to reflect new directors and officers, as well as directors and officers that are no longer with the Company.
(In thousands) |  |
Beginning balance |  | $ | 8,609 |
New loans |  |  | 7,790 |
Payments |  |  | (8,224 | )
Ending balance |  | $ | 8,175 |
A director of the Company and the Bank is a shareholder of a farm implement dealership that contracts with the Bank to provide sales financing to the dealership’s customers. In the opinion of management, these transactions were made in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with unrelated parties. During the year ended December 31, 2015, the Bank purchased approximately $862,000 of loans to customers of the corporation and the aggregate outstanding balance of all loans purchased from the corporation was approximately $1.3 million and $1.2 million at December 31, 2015 and 2014, respectively. The following table provides the components of the Company’s recorded investment in loans at December 31, 2015 and 2014:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
|  | (In thousands)
December 31, 2015: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal loan balance |  | $ | 147,933 |  |  | $ | 12,962 |  |  | $ | 12,555 |  |  | $ | 84,493 |  |  | $ | 23,095 |  |  | $ | 38,476 |  |  | $ | 42,484 |  |  | $ | 361,998 |
Accrued interest receivable |  |  | 584 |  |  |  | 70 |  |  |  | 61 |  |  |  | 281 |  |  |  | 64 |  |  |  | 130 |  |  |  | 171 |  |  |  | 1,361 |
Net deferred loan origination fees and costs |  |  | 58 |  |  |  | 6 |  |  |  | 0 |  |  |  | (46 | ) |  |  | (6 | ) |  |  | 571 |  |  |  | 0 |  |  |  | 583 |
Recorded investment in loans |  | $ | 148,575 |  |  | $ | 13,038 |  |  | $ | 12,616 |  |  | $ | 84,728 |  |  | $ | 23,153 |  |  | $ | 39,177 |  |  | $ | 42,655 |  |  | $ | 363,942 |
December 31, 2014: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 |
An analysis of the allowance for loan losses and recorded investment in loans as of and for the year ended December 31, 2015 is as follows:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
|  | (In thousands)
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 609 |  |  | $ | 201 |  |  | $ | 60 |  |  | $ | 1,501 |  |  | $ | 1,480 |  |  | $ | 720 |  |  | $ | 275 |  |  | $ | 4,846 |
Provisions |  |  | 35 |  |  |  | (44 | ) |  |  | (13 | ) |  |  | 6 |  |  |  | (23 | ) |  |  | (49 | ) |  |  | 138 |  |  |  | 50 |
Charge-offs |  |  | (128 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (1,205 | ) |  |  | (78 | ) |  |  | (268 | ) |  |  | (1,679 | )
Recoveries |  |  | 11 |  |  |  | 0 |  |  |  | 0 |  |  |  | 34 |  |  |  | 9 |  |  |  | 33 |  |  |  | 111 |  |  |  | 198 |
Ending balance |  | $ | 527 |  |  | $ | 157 |  |  | $ | 47 |  |  | $ | 1,541 |  |  | $ | 261 |  |  | $ | 626 |  |  | $ | 256 |  |  | $ | 3,415 |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 6 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 49 |  |  | $ | 100 |  |  | $ | 11 |  |  | $ | 0 |  |  | $ | 166 |
Collectively evaluated for impairment |  |  | 521 |  |  |  | 157 |  |  |  | 47 |  |  |  | 1,492 |  |  |  | 161 |  |  |  | 615 |  |  |  | 256 |  |  |  | 3,249 |
Acquired with deteriorated credit quality |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Ending balance |  | $ | 527 |  |  | $ | 157 |  |  | $ | 47 |  |  | $ | 1,541 |  |  | $ | 261 |  |  | $ | 626 |  |  | $ | 256 |  |  | $ | 3,415 |
Recorded Investment in Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,996 |  |  | $ | 24 |  |  | $ | 0 |  |  | $ | 3,623 |  |  | $ | 167 |  |  | $ | 136 |  |  | $ | 0 |  |  | $ | 5,946 |
Collectively evaluated for impairment |  |  | 145,695 |  |  |  | 13,014 |  |  |  | 12,616 |  |  |  | 80,639 |  |  |  | 22,986 |  |  |  | 39,041 |  |  |  | 42,655 |  |  |  | 356,646 |
Acquired with deteriorated credit quality |  |  | 884 |  |  |  | 0 |  |  |  | 0 |  |  |  | 466 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,350 |
Ending balance |  | $ | 148,575 |  |  | $ | 13,038 |  |  | $ | 12,616 |  |  | $ | 84,728 |  |  | $ | 23,153 |  |  | $ | 39,177 |  |  | $ | 42,655 |  |  | $ | 363,942 |
An analysis of the allowance for loan losses and recorded investment in loans as of and for the year ended December 31, 2014 is as follows:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
|  | (In thousands)
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 811 |  |  | $ | 152 |  |  | $ | 63 |  |  | $ | 1,284 |  |  | $ | 1,446 |  |  | $ | 877 |  |  | $ | 289 |  |  | $ | 4,922 |
Provisions |  |  | (69 | ) |  |  | 49 |  |  |  | (3 | ) |  |  | 211 |  |  |  | 23 |  |  |  | (195 | ) |  |  | 174 |  |  |  | 190 |
Charge-offs |  |  | (140 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (6 | ) |  |  | (154 | ) |  |  | (320 | ) |  |  | (620 | )
Recoveries |  |  | 7 |  |  |  | 0 |  |  |  | 0 |  |  |  | 6 |  |  |  | 17 |  |  |  | 192 |  |  |  | 132 |  |  |  | 354 |
Ending balance |  | $ | 609 |  |  | $ | 201 |  |  | $ | 60 |  |  | $ | 1,501 |  |  | $ | 1,480 |  |  | $ | 720 |  |  | $ | 275 |  |  | $ | 4,846 |
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 |
Ending balance |  | $ | 609 |  |  | $ | 201 |  |  | $ | 60 |  |  | $ | 1,501 |  |  | $ | 1,480 |  |  | $ | 720 |  |  | $ | 275 |  |  | $ | 4,846 |
Recorded Investment in Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 |
Ending balance |  | $ | 107,096 |  |  | $ | 11,080 |  |  | $ | 8,463 |  |  | $ | 78,480 |  |  | $ | 28,406 |  |  | $ | 38,125 |  |  | $ | 34,835 |  |  | $ | 306,485 |
At December 31, 2015 and 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, respectively. These changes were made to reflect management’s estimates of inherent losses in these portfolio segments at December 31, 2015 and 2014. At December 31, 2015 and 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 – Management reviews the findings of periodic internal audit loan reviews, independent outsourced loan reviews and loan reviews performed by the banking regulators to evaluate the risk associated with changes in underwriting standards. At December 31, 2015 and 2014, management assessed the risk associated with this component as neutral, requiring no adjustment to the historical loss factors.
| · | Economic Conditions – Management analyzes trends in housing and unemployment data in the Louisville, Kentucky metropolitan area, the Company’s primary market area, to evaluate the risk associated with economic conditions. Due to a decrease in new home construction and an increase in unemployment in the Company’s primary market area, management assigned a risk factor of 1.20 for this component at December 31, 2015 and 2014.
| · | Past Due Loans – Management analyzes trends in past due loans for the Company to evaluate the risk associated with delinquent loans. In general, past due loan ratios have remained at elevated levels compared to historical amounts since 2007, and management assigned a risk factor of 1.20 for this component at December 31, 2015 and 2014.
| · | Other Internal and External Factors – This component includes management’s consideration of other qualitative factors such as loan portfolio composition. The Company has focused on the origination of commercial business and real estate loans in an effort to convert the Company’s balance sheet from that of a traditional thrift institution to a commercial bank. In addition, the Company has increased its investment in mortgage loans in which it does not hold a first lien position. Commercial loans and second mortgage loans generally entail greater credit risk than residential mortgage loans secured by a first lien. As a result of changes in the loan portfolio composition and other factors, management has maintained the elevated risk factor of 1.30 for this component at December 31, 2015 and 2014.
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 December 31, 2015 and 2014. The effect of the overall qualitative factor was to increase the estimated allowance for loan losses by $457,000 and $520,000 at December 31, 2015 and 2014, respectively. 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 $410,000 and $664,000 at December 31, 2015 and 2014, respectively. The following table summarizes the Company’s impaired loans as of and for the year ended December 31, 2015. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the year ended December 31, 2015.
|  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance |  | Average Recorded Investment |  | Interest Income Recognized
|  | (In thousands)
Loans with no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 1,938 |  |  | $ | 2,330 |  |  | $ | 0 |  |  | $ | 1,356 |  |  | $ | 19 |
Land |  |  | 24 |  |  |  | 27 |  |  |  | 0 |  |  |  | 20 |  |  |  | 0 |
Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial real estate |  |  | 3,389 |  |  |  | 3,706 |  |  |  | 0 |  |  |  | 2,092 |  |  |  | 76 |
Commercial business |  |  | 67 |  |  |  | 67 |  |  |  | 0 |  |  |  | 19 |  |  |  | 0 |
Home equity and second mortgage |  |  | 56 |  |  |  | 65 |  |  |  | 0 |  |  |  | 64 |  |  |  | 2 |
Other consumer |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 5,474 |  |  | $ | 6,195 |  |  | $ | 0 |  |  | $ | 3,551 |  |  | $ | 97 |
Loans with an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 58 |  |  | $ | 62 |  |  | $ | 6 |  |  | $ | 190 |  |  | $ | 0 |
Land |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial real estate |  |  | 234 |  |  |  | 260 |  |  |  | 49 |  |  |  | 78 |  |  |  | 0 |
Commercial business |  |  | 100 |  |  |  | 100 |  |  |  | 100 |  |  |  | 355 |  |  |  | 0 |
Home equity and second mortgage |  |  | 80 |  |  |  | 81 |  |  |  | 11 |  |  |  | 80 |  |  |  | 0 |
Other consumer |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 472 |  |  | $ | 503 |  |  | $ | 166 |  |  | $ | 703 |  |  | $ | 0 |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 1,996 |  |  | $ | 2,392 |  |  | $ | 6 |  |  | $ | 1,546 |  |  | $ | 19 |
Land 24 |  |  | 27 |  |  |  | 0 |  |  |  | 20 |  |  |  | 0 |  |  |  |  |
Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial real estate |  |  | 3,623 |  |  |  | 3,966 |  |  |  | 49 |  |  |  | 2,170 |  |  |  | 76 |
Commercial business |  |  | 167 |  |  |  | 167 |  |  |  | 100 |  |  |  | 374 |  |  |  | 0 |
Home equity and second mortgage |  |  | 136 |  |  |  | 146 |  |  |  | 11 |  |  |  | 144 |  |  |  | 2 |
Other consumer |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 5,946 |  |  | $ | 6,698 |  |  | $ | 166 |  |  | $ | 4,254 |  |  | $ | 97 |
The following table summarizes the Company’s impaired loans as of and for the year ended December 31, 2014. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the year ended December 31, 2014.
|  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance |  | Average Recorded Investment |  | Interest Income Recognized
|  | (In thousands)
Loans with no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 1,141 |  |  | $ | 1,446 |  |  | $ | 0 |  |  | $ | 1,293 |  |  | $ | 26 |
Land |  |  | 16 |  |  |  | 18 |  |  |  | 0 |  |  |  | 96 |  |  |  | 0 |
Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 52 |  |  |  | 0 |
Commercial real estate |  |  | 1,777 |  |  |  | 1,808 |  |  |  | 0 |  |  |  | 1,626 |  |  |  | 70 |
Commercial business |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 113 |  |  |  | 0 |
Home equity and second mortgage |  |  | 71 |  |  |  | 87 |  |  |  | 0 |  |  |  | 147 |  |  |  | 2 |
Other consumer |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 3,005 |  |  | $ | 3,359 |  |  | $ | 0 |  |  | $ | 3,327 |  |  | $ | 98 |
Loans with an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 270 |  |  | $ | 304 |  |  | $ | 47 |  |  | $ | 369 |  |  | $ | 0 |
Land |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1 |  |  |  | 0 |
Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial real estate |  |  | 42 |  |  |  | 65 |  |  |  | 11 |  |  |  | 656 |  |  |  | 0 |
Commercial business |  |  | 1,642 |  |  |  | 1,909 |  |  |  | 1,293 |  |  |  | 1,696 |  |  |  | 0 |
Home equity and second mortgage |  |  | 80 |  |  |  | 98 |  |  |  | 0 |  |  |  | 46 |  |  |  | 0 |
Other consumer |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 2,034 |  |  | $ | 2,376 |  |  | $ | 1,351 |  |  | $ | 2,768 |  |  | $ | 0 |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 1,411 |  |  | $ | 1,750 |  |  | $ | 47 |  |  | $ | 1,662 |  |  | $ | 26 |
Land 16 |  |  | 18 |  |  |  | 0 |  |  |  | 97 |  |  |  | 0 |  |  |  |  |
Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 52 |  |  |  | 0 |
Commercial real estate |  |  | 1,819 |  |  |  | 1,873 |  |  |  | 11 |  |  |  | 2,282 |  |  |  | 70 |
Commercial business |  |  | 1,642 |  |  |  | 1,909 |  |  |  | 1,293 |  |  |  | 1,809 |  |  |  | 0 |
Home equity and second mortgage |  |  | 151 |  |  |  | 185 |  |  |  | 0 |  |  |  | 193 |  |  |  | 2 |
Other consumer |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 5,039 |  |  | $ | 5,735 |  |  | $ | 1,351 |  |  | $ | 6,095 |  |  | $ | 98 |
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 December 31, 2015 and 2014:
|  | December 31, 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 real estate |  | $ | 1,648 |  |  | $ | 271 |  |  | $ | 1,919 |  |  | $ | 919 |  |  | $ | 68 |  |  | $ | 987 |
Land |  |  | 24 |  |  |  | 75 |  |  |  | 99 |  |  |  | 16 |  |  |  | 0 |  |  |  | 16 |
Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial real estate |  |  | 2,267 |  |  |  | 0 |  |  |  | 2,267 |  |  |  | 433 |  |  |  | 0 |  |  |  | 433 |
Commercial business |  |  | 167 |  |  |  | 0 |  |  |  | 167 |  |  |  | 1,642 |  |  |  | 0 |  |  |  | 1,642 |
Home equity and second mortgage |  |  | 116 |  |  |  | 0 |  |  |  | 116 |  |  |  | 129 |  |  |  | 14 |  |  |  | 143 |
Other consumer |  |  | 0 |  |  |  | 9 |  |  |  | 9 |  |  |  | 0 |  |  |  | 3 |  |  |  | 3 |
Total |  | $ | 4,222 |  |  | $ | 355 |  |  | $ | 4,577 |  |  | $ | 3,139 |  |  | $ | 85 |  |  | $ | 3,224 |
The following table presents the aging of the recorded investment in loans at December 31, 2015:
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Over 90 Days Past Due |  | Total Past Due |  | Current |  | Purchased Credit Impaired Loans |  | Total Loans
|  |  |  | (In thousands)
Residential real estate |  | $ | 3,078 |  |  | $ | 786 |  |  | $ | 1,256 |  |  | $ | 5,120 |  |  | $ | 142,571 |  |  | $ | 884 |  |  | $ | 148,575 |
Land |  |  | 55 |  |  |  | 26 |  |  |  | 99 |  |  |  | 180 |  |  |  | 12,858 |  |  |  | 0 |  |  |  | 13,038 |
Construction |  |  | 71 |  |  |  | 0 |  |  |  | 0 |  |  |  | 71 |  |  |  | 12,545 |  |  |  | 0 |  |  |  | 12,616 |
Commercial real estate |  |  | 435 |  |  |  | 773 |  |  |  | 396 |  |  |  | 1,604 |  |  |  | 82,658 |  |  |  | 466 |  |  |  | 84,728 |
Commercial business |  |  | 0 |  |  |  | 100 |  |  |  | 67 |  |  |  | 167 |  |  |  | 22,986 |  |  |  | 0 |  |  |  | 23,153 |
Home equity and second mortgage |  |  | 365 |  |  |  | 6 |  |  |  | 80 |  |  |  | 451 |  |  |  | 38,726 |  |  |  | 0 |  |  |  | 39,177 |
Other consumer |  |  | 464 |  |  |  | 13 |  |  |  | 9 |  |  |  | 486 |  |  |  | 42,169 |  |  |  | 0 |  |  |  | 42,655 |
Total |  | $ | 4,468 |  |  | $ | 1,704 |  |  | $ | 1,907 |  |  | $ | 8,079 |  |  | $ | 354,513 |  |  | $ | 1,350 |  |  | $ | 363,942 |
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 |  | Over 90 Days Past Due |  | Total Past Due |  | Current |  | Total Loans
|  | (In thousands)
Residential real estate |  | $ | 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 and second 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 Company’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 Company 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 Company’s books as an asset is not warranted. Loans not meeting the criteria above that are analyzed individually as part of the above 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 and Second Mortgage |  | Other Consumer |  | Total
|  | (In thousands)
December 31, 2015: |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 140,438 |  |  | $ | 10,077 |  |  | $ | 12,286 |  |  | $ | 76,389 |  |  | $ | 22,365 |  |  | $ | 38,956 |  |  | $ | 42,553 |  |  | $ | 343,064 |
Special mention |  |  | 3,657 |  |  |  | 125 |  |  |  | 330 |  |  |  | 4,446 |  |  |  | 471 |  |  |  | 0 |  |  |  | 53 |  |  |  | 9,082 |
Substandard |  |  | 1,948 |  |  |  | 2,812 |  |  |  | 0 |  |  |  | 1,195 |  |  |  | 150 |  |  |  | 105 |  |  |  | 49 |  |  |  | 6,259 |
Doubtful |  |  | 2,532 |  |  |  | 24 |  |  |  | 0 |  |  |  | 2,698 |  |  |  | 167 |  |  |  | 116 |  |  |  | 0 |  |  |  | 5,537 |
Loss |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total |  | $ | 148,575 |  |  | $ | 13,038 |  |  | $ | 12,616 |  |  | $ | 84,728 |  |  | $ | 23,153 |  |  | $ | 39,177 |  |  | $ | 42,655 |  |  | $ | 363,942 |
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 |
Troubled Debt Restructurings The following table summarizes the Company’s TDRs by accrual status as of December 31, 2015 and 2014:
|  | December 31, 2015 |  | December 31, 2014
|  | Accruing |  | Nonaccrual |  | Total |  | Related Allowance for Loan Losses |  | Accruing |  | Nonaccrual |  | Total |  | Related Allowance for Loan Losses
|  | (In thousands)
Residential real estate |  | $ | 342 |  |  | $ | 315 |  |  | $ | 657 |  |  | $ | 0 |  |  | $ | 492 |  |  | $ | 166 |  |  | $ | 658 |  |  | $ | 6 |
Commercial real estate |  |  | 1,348 |  |  |  | 294 |  |  |  | 1,642 |  |  |  | 0 |  |  |  | 1,386 |  |  |  | 338 |  |  |  | 1,724 |  |  |  | 0 |
Commercial business |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,642 |  |  |  | 1,642 |  |  |  | 1,292 |
Home equity and second mortgage |  |  | 20 |  |  |  | 0 |  |  |  | 20 |  |  |  | 0 |  |  |  | 22 |  |  |  | 0 |  |  |  | 22 |  |  |  | 0 |
Total |  | $ | 1,710 |  |  | $ | 609 |  |  | $ | 2,319 |  |  | $ | 0 |  |  | $ | 1,900 |  |  | $ | 2,146 |  |  | $ | 4,046 |  |  | $ | 1,298 |
At December 31, 2015 and 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 year ended December 31, 2015. The following table summarizes information in regard to TDRs that were restructured during the year ended December 31, 2014:
|  | Number of Contracts |  | Pre-Modification Outstanding Balance |  | Post-Modification Outstanding Balance
|  | (In thousands)
Commercial real estate |  |  | 5 |  |  | $ | 641 |  |  | $ | 641 |
Total |  |  | 5 |  |  | $ | 641 |  |  | $ | 641 |
For the TDRs listed above, the terms of modification included temporary interest-only payment periods and a temporary decrease in the borrowers’ monthly payments. There were no principal charge-offs recorded as a result of TDRs during 2014 and there was no specific allowance for loan losses related to TDRs modified during 2014 at December 31, 2014. The Company had payment defaults (defined as the loan becoming more than 90 days past due, being moved to nonaccrual status, or the collateral being foreclosed upon) on two TDRs to the same borrower totaling $187,000 during the year ended December 31, 2015. There were no such defaults during the year ended December 31, 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. The Company did not recognize any provisions for loan losses or net charge-offs as a result of defaulted TDRs for the years ended December 31, 2015 and 2014. Purchased Credit Impaired (“PCI”) Loans Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan and lease losses. Such loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as credit score, loan type and date of origination. In determining the estimated fair value of purchased loans or pools, management considers a number of factors including the remaining life, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, and net present value of cash flows expected to be received, among others. Purchased loans are accounted for in accordance with guidance for certain loans acquired in a transfer (ASC 310-30), when the loans have evidence of credit deterioration since origination and it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments. The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. The difference between the expected cash flows and the fair value at acquisition is recorded as interest income over the remaining life of the loan or pool of loans and is referred to as the accretable yield. Subsequent decreases to the expected cash flows will generally result in a provision for loan and lease losses. Subsequent increases in expected cash flows will result in a reversal of the provision for loan losses to the extent of prior charges and then an adjustment to accretable yield, which is recognized as future interest income. The following table presents the carrying amount of PCI loans accounted for under ASC 310-30 at December 31, 2015:
(In thousands) |  |
Residential real estate |  | $ | 884 |
Commercial real estate |  |  | 466 |
|  | $ | 1,350 |
There was no allowance for loan losses related to PCI loans at December 31, 2015 or 2014. In addition, there were no losses recognized or reductions of the allowance for loan losses on PCI loans for the years ended December 31, 2015 and 2014. Accretable yield, or income expected to be collected, is as follows for the year ended December 31, 2015:
(In thousands) |  |
Balance at January 1 |  | $ | - |
New loans purchased |  |  | 331 |
Accretion to income |  |  | (12 | )
Disposals of loans |  |  | - |
Reclassification (to) from nonaccretable difference |  |  | - |
Balance at December 31 |  | $ | 319 |

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