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Loans Receivable | 6 Months Ended
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Jun. 30, 2014
Receivables [Abstract] |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 5 - Loans Receivable
|  | (Dollars in thousands) |
|  | June 30, 2014 |  | December 31, 2013 |
Loans secured by real estate: |  |  |  |  |  |  |
Residential, including home equity |  | $ | 190,446 |  | $ | 161,932 |
Commercial real estate, construction & land development, and other dwellings |  |  | 205,639 |  |  | 195,423 |
Commercial participations purchased |  |  | 2,335 |  |  | 1,273 |
Total loans secured by real estate |  |  | 398,420 |  |  | 358,628 |
Consumer loans |  |  | 436 |  |  | 237 |
Commercial business |  |  | 63,530 |  |  | 57,716 |
Government and other |  |  | 27,957 |  |  | 21,587 |
Subtotal |  |  | 490,343 |  |  | 438,168 |
Less: |  |  |  |  |  |  |
Net deferred loan origination fees |  |  | (210) |  |  | (252) |
Undisbursed loan funds |  |  | (173) |  |  | (95) |
Loan receivables |  | $ | 489,960 |  | $ | 437,821 |
|  |  |  |  |  |  |  | Commercial Real |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  | Estate, |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  | Construction & |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Residential Real |  |  |  |  | Land |  | Commercial |  |  |  |  |  |  |  |  |  |
|  | Estate, Including |  |  |  |  | Development, and |  | Participations |  | Commercial |  | Government |  |  |  |
(Dollars in thousands) |  | Home Equity |  | Consumer Loans |  | Other Dwellings |  | Purchased |  | Business Loans |  | Loans |  | Total |
The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the six months ended June 30, 2014: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 1,444 |  | $ | 12 |  | $ | 4,789 |  | $ | 31 |  | $ | 859 |  | $ | 54 |  | $ | 7,189 |
Charge-offs |  |  | (13) |  |  | (12) |  |  | (1,418) |  |  | - |  |  | - |  |  | - |  |  | (1,443) |
Recoveries |  |  | 2 |  |  | 1 |  |  | 12 |  |  | 2 |  |  | 3 |  |  | - |  |  | 20 |
Provisions |  |  | 15 |  |  | 28 |  |  | 342 |  |  | (8) |  |  | 7 |  |  | 26 |  |  | 410 |
Ending Balance |  | $ | 1,448 |  | $ | 29 |  | $ | 3,725 |  | $ | 25 |  | $ | 869 |  | $ | 80 |  | $ | 6,176 |
The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the six months ended June 30, 2013:
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 1,024 |  | $ | 19 |  | $ | 4,550 |  | $ | 1,608 |  | $ | 1,220 |  | $ | - |  | $ | 8,421 |
Charge-offs |  |  | (117) |  |  | (6) |  |  | (333) |  |  | - |  |  | (438) |  |  | - |  |  | (894) |
Recoveries |  |  | 1 |  |  | 3 |  |  | - |  |  | - |  |  | 3 |  |  | - |  |  | 7 |
Provisions |  |  | 542 |  |  | (1) |  |  | 122 |  |  | (757) |  |  | 297 |  |  | 27 |  |  | 230 |
Ending Balance |  | $ | 1,450 |  | $ | 15 |  | $ | 4,339 |  | $ | 851 |  | $ | 1,082 |  | $ | 27 |  | $ | 7,764 |
The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at June 30, 2014:
Ending balance: individually evaluated for impairment |  | $ | - |  | $ | - |  | $ | 367 |  | $ | - |  | $ | 39 |  | $ | - |  | $ | 406 |
Ending balance: collectively evaluated for impairment |  | $ | 1,448 |  | $ | 29 |  | $ | 3,358 |  | $ | 25 |  | $ | 830 |  | $ | 80 |  | $ | 5,770 |
LOAN RECEIVABLES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 190,208 |  | $ | 432 |  | $ | 205,498 |  | $ | 2,335 |  | $ | 63,530 |  | $ | 27,957 |  | $ | 489,960 |
Ending balance: individually evaluated for impairment |  | $ | 153 |  | $ | - |  | $ | 6,470 |  | $ | - |  | $ | 540 |  | $ | - |  | $ | 7,163 |
Ending balance: purchased credit impaired individually evaluated for impairment |  | $ | 647 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 647 |
Ending balance: collectively evaluated for impairment |  | $ | 189,408 |  | $ | 432 |  | $ | 199,028 |  | $ | 2,335 |  | $ | 62,990 |  | $ | 27,957 |  | $ | 482,150 |
The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at December 31, 2013:
Ending balance: individually evaluated for impairment |  | $ | 16 |  | $ | - |  | $ | 1,657 |  | $ | - |  | $ | 30 |  | $ | - |  | $ | 1,703 |
Ending balance: collectively evaluated for impairment |  | $ | 1,428 |  | $ | 12 |  | $ | 3,132 |  | $ | 31 |  | $ | 829 |  | $ | 54 |  | $ | 5,486 |
LOAN RECEIVABLES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 161,664 |  | $ | 232 |  | $ | 195,349 |  | $ | 1,273 |  | $ | 57,716 |  | $ | 21,587 |  | $ | 437,821 |
Ending balance: individually evaluated for impairment |  | $ | 887 |  | $ | - |  | $ | 8,446 |  | $ | - |  | $ | 534 |  | $ | - |  | $ | 9,867 |
Ending balance: collectively evaluated for impairment |  | $ | 160,777 |  | $ | 232 |  | $ | 186,903 |  | $ | 1,273 |  | $ | 57,182 |  | $ | 21,587 |  | $ | 427,954 |
The Bancorp's credit quality indicators, are summarized below at June 30, 2014 and December 31, 2013:
|  |  |  | (Dollars in thousands) |
|  |  |  | Corporate Credit Exposure - Credit Risk Portfolio By Creditworthiness Category |
|  |  |  | Commercial Real Estate, Construction |  |  |  |  |  |  |  |  |  |  |  |  |  | Government |
|  |  |  | & Land Development, and Other Dwellings |  | Commercial Participations Purchased |  | Commercial Business Loans |  | Loans |
|  | Loan Grades |  | 2014 |  | 2013 |  | 2014 |  | 2013 |  | 2014 |  | 2013 |  | 2014 |  | 2013 |
2 |  | Moderate risk |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 4,285 |  | $ | 4,279 |  | $ | - |  | $ | - |
3 |  | Acceptable risk |  |  | 164,266 |  |  | 150,303 |  |  | 2,109 |  |  | 1,013 |  |  | 46,127 |  |  | 41,474 |  |  | 27,957 |  |  | 21,587 |
4 |  | Pass/monitor |  |  | 31,201 |  |  | 33,153 |  |  | 122 |  |  | 260 |  |  | 11,305 |  |  | 11,173 |  |  | - |  |  | - |
5 |  | Special mention (watch) |  |  | 3,567 |  |  | 3,348 |  |  | - |  |  | - |  |  | 1,273 |  |  | 88 |  |  | - |  |  | - |
6 |  | Substandard |  |  | 6,464 |  |  | 8,545 |  |  | 104 |  |  | - |  |  | 540 |  |  | 702 |  |  | - |  |  | - |
7 |  | Doubtful |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
|  | Total |  | $ | 205,498 |  | $ | 195,349 |  | $ | 2,335 |  | $ | 1,273 |  | $ | 63,530 |  | $ | 57,716 |  | $ | 27,957 |  | $ | 21,587 |
|  | (Dollars in thousands) |
|  | Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity |
|  | Residential Real Estate, |  |  |  |  |  |  |
|  | Including Home Equity |  | Consumer Loans |
|  | 2014 |  | 2013 |  | 2014 |  | 2013 |
Performing |  | $ | 187,268 |  | $ | 158,963 |  | $ | 432 |  | $ | 232 |
Non-performing |  |  | 2,940 |  |  | 2,701 |  |  | - |  |  | - |
Total |  | $ | 190,208 |  | $ | 161,664 |  | $ | 432 |  | $ | 232 |
The Bancorp has established a standard loan grading system to assist management, lenders and review personnel in their analysis and supervision of the loan portfolio. The use and application of theses grades by the Bancorp is uniform and conforms to regulatory definitions. The loan grading system is as follows: 2 – Moderate risk Borrower consistently internally generates sufficient cash flow to fund debt service, working assets, and some capital expenditures. Risk of default considered low. 3 – Acceptable risk Borrower generates sufficient cash flow to fund debt service, but most working asset and all capital expansion needs are provided from external sources. Profitability ratios and key balance sheet ratios are usually close to peers but one or more ratios (e.g. leverage) may be higher than peer. Earnings may be trending down over the last three years. Borrower may be able to obtain similar financing from other banks with comparable or less favorable terms. Risk of default is acceptable but requires collateral protection. 4 – Pass/monitor The borrower has significant weaknesses resulting from performance trends or management concerns. The financial condition of the company has taken a negative turn and may be temporarily strained. Cash flow may be weak but cash reserves remain adequate to meet debt service. Management weaknesses are evident. Borrowers in this category will warrant more than the normal level of supervision and more frequent reporting. 5 – Special mention (watch) Special mention credits are considered bankable assets with no apparent loss of principal or interest envisioned but requiring a high level of management attention. Assets in this category are currently protected but are potentially weak. These borrowers are subject to economic, industry, or management factors having an adverse impact upon their prospects for orderly service of debt. The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted. These assets constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of Substandard. 6 – Substandard This classification consists of loans which are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. Financial statements normally reveal some or all of the following: poor trends, lack of earnings and cash flow, excessive debt, lack of liquidity, and the absence of creditor protection. Loans are still considered collectible, but due to increased risks and defined weaknesses of the credit, some loss could be incurred in collection if the deficiencies are not corrected. 7 – Doubtful This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonably specific pending factors which may strengthen the credit can be exactly determined. These factors may include proposed acquisitions, liquidation procedures, capital injection and receipt of additional collateral, mergers or refinancing plans. Performing loans are loans that are paying as agreed and are less than ninety days past due on payments of interest and principal. No loans were modified in a troubled debt restructuring, nor have any previous troubled debt restructurings subsequently defaulted, during the six months ended June 30, 2014. Four residential real estate loans with a pre-modification outstanding recorded investment of $549 thousand and a post-modification outstanding recorded investment of $533 thousand qualified as troubled debt restructurings during the first six months of 2013.
|  |  |  |  |  |  |  |  |  |  | For the six months ended |
|  | As of June 30, 2014 |  | June 30, 2014 |
|  |  |  |  | Unpaid |  |  |  |  | Average |  | Interest |
(Dollars in thousands) |  | Recorded |  | Principal |  | Related |  | Recorded |  | Income |
|  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  | $ | 800 |  | $ | 812 |  | $ | - |  | $ | 160 |  | $ | 9 |
Commercial real estate, construction & land development, and other dwellings |  |  | 1,683 |  |  | 2,919 |  |  | - |  |  | 956 |  |  | 38 |
Commercial participations purchased |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
Commercial business loans |  |  | 228 |  |  | 228 |  |  | - |  |  | 256 |  |  | 1 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  |  | - |  |  | - |  |  | - |  |  | 519 |  |  | - |
Commercial real estate, construction & land development, and other dwellings |  |  | 4,787 |  |  | 4,787 |  |  | 367 |  |  | 6,795 |  |  | 46 |
Commercial participations purchased |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
Commercial business loans |  |  | 312 |  |  | 580 |  |  | 39 |  |  | 278 |  |  | 1 |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  | $ | 800 |  | $ | 812 |  | $ | - |  | $ | 679 |  | $ | 9 |
Commercial real estate, construction & land development, and other dwellings |  | $ | 6,470 |  | $ | 7,706 |  | $ | 367 |  | $ | 7,751 |  | $ | 84 |
Commercial participations purchased |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |
Commercial business loans |  | $ | 540 |  | $ | 808 |  | $ | 39 |  | $ | 534 |  | $ | 2 |
|  |  |  |  |  |  |  |  |  |  | For the six months ended |
|  | As of December 31, 2013 |  | June 30, 2013 |
|  |  |  |  | Unpaid |  |  |  |  | Average |  | Interest |
(Dollars in thousands) |  | Recorded |  | Principal |  | Related |  | Recorded |  | Income |
|  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |
Commercial real estate, construction & land development, and other dwellings |  |  | 617 |  |  | 617 |  |  | - |  |  | 791 |  |  | 15 |
Commercial participations purchased |  |  | - |  |  | - |  |  | - |  |  | 5,507 |  |  | 29 |
Commercial business loans |  |  | 228 |  |  | 228 |  |  | - |  |  | 1,037 |  |  | 4 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  |  | 887 |  |  | 899 |  |  | 16 |  |  | 831 |  |  | 12 |
Commercial real estate, construction & land development, and other dwellings |  |  | 7,829 |  |  | 7,829 |  |  | 1,657 |  |  | 10,004 |  |  | 142 |
Commercial participations purchased |  |  | - |  |  | - |  |  | - |  |  | 189 |  |  | - |
Commercial business loans |  |  | 306 |  |  | 574 |  |  | 30 |  |  | 652 |  |  | 4 |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  | $ | 887 |  | $ | 899 |  | $ | 16 |  | $ | 831 |  | $ | 12 |
Commercial real estate, construction & land development, and other dwellings |  | $ | 8,446 |  | $ | 8,446 |  | $ | 1,657 |  | $ | 10,795 |  | $ | 157 |
Commercial participations purchased |  | $ | - |  | $ | - |  | $ | - |  | $ | 5,696 |  | $ | 29 |
Commercial business loans |  | $ | 534 |  | $ | 802 |  | $ | 30 |  | $ | 1,689 |  | $ | 8 |
As part of the acquisition of First Federal, the Bancorp acquired loans for which there was evidence of credit quality deterioration since origination and it was determined that it was probable that the Bancorp would be unable to collect all contractually required principal and interest payments. At June 30, 2014, purchased credit impaired loans with unpaid principal balances totaled $1.8 million with a recorded investment of $647,000. The Bancorp’s age analysis of past due loans is summarized below:
|  | (Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Recorded |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Investments |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Greater than |
|  | 30-59 Days Past |  | 60-89 Days Past |  | Greater Than 90 |  |  |  |  |  |  |  |  |  |  | 90 Days and |
|  | Due |  | Due |  | Days Past Due |  | Total Past Due |  | Current |  | Total Loans |  | Accruing |
June 30, 2014 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  | $ | 4,046 |  | $ | 1,326 |  | $ | 2,422 |  | $ | 7,794 |  | $ | 182,414 |  | $ | 190,208 |  | $ | 64 |
Consumer loans |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 432 |  |  | 432 |  |  | - |
Commercial real estate, construction & land development, and other dwellings |  |  | 1,428 |  |  | 147 |  |  | 1,218 |  |  | 2,793 |  |  | 202,705 |  |  | 205,498 |  |  | 529 |
Commercial participations purchased |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 2,335 |  |  | 2,335 |  |  | - |
Commercial business loans |  |  | 268 |  |  | 30 |  |  | 443 |  |  | 741 |  |  | 62,789 |  |  | 63,530 |  |  | - |
Government loans |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 27,957 |  |  | 27,957 |  |  | - |
Total |  | $ | 5,742 |  | $ | 1,503 |  | $ | 4,083 |  | $ | 11,328 |  | $ | 478,632 |  | $ | 489,960 |  | $ | 592 |
December 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate, including home equity |  | $ | 3,721 |  | $ | 1,090 |  | $ | 1,502 |  | $ | 6,313 |  | $ | 155,351 |  | $ | 161,664 |  | $ | 174 |
Consumer loans |  |  | 1 |  |  | - |  |  | - |  |  | 1 |  |  | 231 |  |  | 232 |  |  | - |
Commercial real estate, construction & land development, and other dwellings |  |  | 1,083 |  |  | 2,626 |  |  | 768 |  |  | 4,477 |  |  | 190,872 |  |  | 195,349 |  |  | - |
Commercial participations purchased |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,273 |  |  | 1,273 |  |  | - |
Commercial business loans |  |  | 1,032 |  |  | 25 |  |  | 447 |  |  | 1,504 |  |  | 56,212 |  |  | 57,716 |  |  | - |
Government loans |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 21,587 |  |  | 21,587 |  |  | - |
Total |  | $ | 5,837 |  | $ | 3,741 |  | $ | 2,717 |  | $ | 12,295 |  | $ | 425,526 |  | $ | 437,821 |  | $ | 174 |
The Bancorp's loans on nonaccrual status are summarized below:
|  | (Dollars in thousands) |
|  | June 30, |  | December 31, |
|  | 2014 |  | 2013 |
Residential real estate, including home equity |  | $ | 2,940 |  | $ | 2,526 |
Consumer loans |  |  | - |  |  | - |
Commercial real estate, construction & land development, and other dwellings |  |  | 1,253 |  |  | 807 |
Commercial participations purchased |  |  | - |  |  | - |
Commercial business loans |  |  | 443 |  |  | 447 |
Government loans |  |  | - |  |  | - |
Total |  | $ | 4,636 |  | $ | 3,780 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.3,4) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 3, 4 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35738203&loc=d3e5074-111524 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35738203&loc=d3e5066-111524 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 7 -Article 9 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph k -Article 4 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=35738203&loc=d3e5162-111524 + Details
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