Note 5 - Loans and Allowance for Loan Losses

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

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

Note 5 - Loans Receivable and the Allowance for Loan Losses

Major classes of loans are as follows:

December 31,	2014		2013
Commercial:
Commercial and industrial	$	118,845	$	111,339
Construction		23,471		15,929
Secured by commercial real estate		203,534		190,602
Secured by residential real estate		53,077		47,672
State and political subdivisions		44,104		33,773
Loans to depository institutions		-		1,250
Indirect lease financing		7,685		8,364
Retail:
1-4 family residential mortgages		37,147		29,730
Home equity loans and lines		63,213		59,977
Consumer		4,175		3,116
Total loans		555,251		501,752
Net unearned costs (fees)		31		(36	)
Loans receivable	$	555,282	$	501,716

Loans secured by commercial real estate include all loans collateralized at least in part by commercial real estate. These loans may not be for the expressed purpose of conducting commercial real estate transactions.

Overdrafts are reclassified as loans and are included in consumer loans above and total loans on the balance sheet. At December 31, 2014 and 2013, overdrafts were $142,000 and $138,000, respectively.

QNB generally lends in its trade area which is comprised of Quakertown and the surrounding communities. To a large extent, QNB makes loans collateralized at least in part by real estate. Its lending activities could be affected by changes in the general economy, the regional economy, or real estate values. Other than disclosed in the table above, at December 31, 2014, there were no concentrations of loans exceeding 10% of total loans.

The Company engages in a variety of lending activities, including commercial, residential real estate and consumer transactions. The Company focuses its lending activities on individuals, professionals and small to medium sized businesses. Risks associated with lending activities include economic conditions and changes in interest rates, which can adversely impact both the ability of borrowers to repay their loans and the value of the associated collateral.

Commercial and industrial loans, commercial real estate loans, construction loans and residential real estate loans with a business purpose are generally perceived as having more risk of default than residential real estate loans with a personal purpose and consumer loans. These types of loans involve larger loan balances to a single borrower or groups of related borrowers and are more susceptible to a risk of loss during a downturn in the business cycle. These loans may involve greater risk because the availability of funds to repay these loans depends on the successful operation of the borrower’s business. The assets financed are used within the business for its ongoing operation. Repayment of these kinds of loans generally comes from the cash flow of the business or the ongoing conversions of assets, such as accounts receivable and inventory, to cash. Typical collateral for commercial and industrial loans includes the borrower’s accounts receivable, inventory and machinery and equipment. Commercial real estate and residential real estate loans secured for a business purpose are originated primarily within the eastern Pennsylvania market area at conservative loan-to-value ratios and often backed by the individual guarantees of the borrowers or owners. Repayment of this kind of loan is dependent upon either the ongoing cash flow of the borrowing entity or the resale of or lease of the subject property. Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful development of their properties, as well as the factors affecting residential real estate borrowers.

Loans to state and political subdivisions are tax-exempt or taxable loans to municipalities, school districts and housing and industrial development authorities. These loans can be general obligations of the municipality or school district repaid through their taxing authority, revenue obligations repaid through the income generated by the operations of the authority, such as a water or sewer authority, or loans issued to a housing and industrial development agency, for which a private corporation is responsible for payments on the loans.

Loans to depository institutions consist of a loan to a commercial bank in Lehigh County, Pennsylvania. This loan is secured by shares of common stock of the borrowing institution.

Indirect lease financing receivables represent loans to small businesses that are collateralized by equipment. These loans tend to have higher risk characteristics but generally provide higher rates of return. These loans are originated by a third party and purchased by QNB based on criteria specified by QNB. The criteria include minimum credit scores of the borrower, term of the lease, type and age of equipment financed and geographic area. The geographic area primarily represents states contiguous to Pennsylvania. QNB is not the lessor and does not service these loans.

The Company originates fixed-rate and adjustable-rate real estate-residential mortgage loans for personal purposes that are secured by first liens on the underlying 1-4 family residential properties. Credit risk exposure in this area of lending is minimized by the evaluation of the credit worthiness of the borrower, including debt-to-income ratios, credit scores and adherence to underwriting policies that emphasize conservative loan-to-value ratios of generally no more than 80%. Residential mortgage loans granted in excess of the 80% loan-to-value ratio criterion are generally insured by private mortgage insurance.

The real estate-home equity portfolio consists of fixed-rate home equity loans and variable-rate home equity lines of credit. Risks associated with loans secured by residential properties are generally lower than commercial loans and include general economic risks, such as the strength of the job market, employment stability and the strength of the housing market. Since most loans are secured by a primary or secondary residence, the borrower’s continued employment is the greatest risk to repayment.

The Company offers a variety of loans to individuals for personal and household purposes. Consumer loans are generally considered to have greater risk than first or second mortgages on real estate because they may be unsecured, or, if they are secured, the value of the collateral may be difficult to assess and is more likely to decrease in value than real estate. Credit risk in this portfolio is controlled by conservative underwriting standards that consider debt-to-income levels and the creditworthiness of the borrower and, if secured, collateral values.

The Company employs an eight (8) grade risk rating system related to the credit quality of commercial loans, loans to depository institutions, loans to state and political subdivisions and indirect lease financing of which the first four categories are pass categories (credits not adversely rated). The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating.

1 - Excellent - no apparent risk

2 - Good - minimal risk

3 - Acceptable - average risk

4 - Watch List - greater than average risk

5 - Special Mention - potential weaknesses

6 - Substandard - well defined weaknesses

7 - Doubtful - full collection unlikely

8 - Loss - considered uncollectible

The Company maintains a loan review system, which allows for a periodic review of our loan portfolio and the early identification of potential problem loans. Each loan officer assigns a rating to commercial loans, loans to depository institutions, loans to state and political subdivisions and indirect lease financing at the time the loan is originated. Loans with risk ratings of one through three are reviewed annually based on the borrower’s fiscal year. Loans with risk ratings of four are reviewed every six to twelve months based on the dollar amount of the relationship with the borrower. Loans with risk ratings of five through eight are reviewed at least quarterly, and as often as monthly, at management’s discretion. The Company also utilizes an outside loan review firm to review the portfolio on a semi-annual basis to provide the Board of Directors and senior management an independent review of the Bank’s loan portfolio on an ongoing basis. These reviews are designed to recognize deteriorating credits in their earliest stages in an effort to reduce and control risk in the lending function as well as identifying potential shifts in the quality of the loan portfolio. The examinations by the outside loan review firm include the review of lending activities with respect to underwriting and processing new loans, monitoring the risk of existing loans and to provide timely follow-up and corrective action for loans showing signs of deterioration in quality. In addition, the outside firm reviews the methodology for the allowance for loan losses to determine compliance to policy and regulatory guidance.

The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of December 31, 2014 and 2013:

December 31, 2014	Pass		Special mention		Substandard		Doubtful		Total
Commercial:
Commercial and industrial	$	111,560	$	42	$	7,243	$	-	$	118,845
Construction		22,981		128		362		-		23,471
Secured by commercial real estate		178,339		2,418		22,777		-		203,534
Secured by residential real estate		50,172		408		2,497		-		53,077
State and political subdivisions		42,771		-		1,333		-		44,104
Loans to depository institutions		-		-		-		-		-
Indirect lease financing		7,543		-		142		-		7,685
	$	413,366	$	2,996	$	34,354	$	-	$	450,716

December 31, 2013	Pass		Special mention		Substandard		Doubtful		Total
Commercial:
Commercial and industrial	$	100,943	$	59	$	10,337	$	-	$	111,339
Construction		13,751		827		1,351		-		15,929
Secured by commercial real estate		163,349		4,199		23,054		-		190,602
Secured by residential real estate		43,854		187		3,631		-		47,672
State and political subdivisions		33,488		-		285		-		33,773
Loans to depository institutions		1,250		-		-		-		1,250
Indirect lease financing		8,199		-		165		-		8,364
	$	364,834	$	5,272	$	38,823	$	-	$	408,929

For retail loans, the Company evaluates credit quality based on the performance of the individual credits. The following tables present the recorded investment in the retail classes of the loan portfolio based on payment activity as of December 31, 2014 and 2013:

December 31, 2014	Performing		Non-performing		Total
Retail:
1-4 family residential mortgages	$	36,922	$	225	$	37,147
Home equity loans and lines		63,109		104		63,213
Consumer		4,174		1		4,175
	$	104,205	$	330	$	104,535

December 31, 2013	Performing		Non-performing		Total
Retail:
1-4 family residential mortgages	$	29,329	$	401	$	29,730
Home equity loans and lines		59,712		265		59,977
Consumer		3,099		17		3,116
	$	92,140	$	683	$	92,823

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio (excluding deferred fees and costs) summarized by the past due status, regardless of whether the loan is on non-accrual status, as of December 31, 2014 and 2013:

December 31, 2014	30-59 days past due		60-89 days past due		90 days or more past due		Total past due loans		Current		Total loans receivable
Commercial:
Commercial and industrial		-		-		-		-	$	118,845	$	118,845
Construction	$	466		-		-	$	466		23,005		23,471
Secured by commercial real estate		28	$	332	$	3,747		4,107		199,427		203,534
Secured by residential real estate		600		574		-		1,174		51,903		53,077
State and political subdivisions		-		-		-		-		44,104		44,104
Loans to depository institutions		-		-		-		-		-		-
Indirect lease financing		291		-		-		291		7,394		7,685
Retail:
1-4 family residential mortgages		526		-		-		526		36,621		37,147
Home equity loans and lines		66		49		-		115		63,098		63,213
Consumer		16		8		-		24		4,151		4,175
	$	1,993	$	963	$	3,747	$	6,703	$	548,548	$	555,251

December 31, 2013	30-59 days past due		60-89 days past due		90 days or more past due		Total past due loans		Current		Total loans receivable
Commercial:
Commercial and industrial	$	112		-	$	17	$	129	$	111,210	$	111,339
Construction		-		-		-		-		15,929		15,929
Secured by commercial real estate		1,126	$	361		255		1,742		188,860		190,602
Secured by residential real estate		1,242		98		105		1,445		46,227		47,672
State and political subdivisions		65		65		-		130		33,643		33,773
Loans to depository institutions		-		-		-		-		1,250		1,250
Indirect lease financing		311		152		-		463		7,901		8,364
Retail:
1-4 family residential mortgages		752		5		270		1,027		28,703		29,730
Home equity loans and lines		295		2		106		403		59,574		59,977
Consumer		25		5		17		47		3,069		3,116
	$	3,928	$	688	$	770	$	5,386	$	496,366	$	501,752

The following tables disclose the recorded investment in loans receivable that are either on non-accrual status or past due 90 days or more and still accruing interest as of December 31, 2014 and 2013:

December 31, 2014	90 days or more past due (still accruing)		Non-accrual
Commercial:
Commercial and industrial	$	-	$	2,171
Construction		-		337
Secured by commercial real estate		-		6,465
Secured by residential real estate		-		1,467
State and political subdivisions		-		-
Loans to depository institutions		-		-
Indirect lease financing		-		-
Retail:
1-4 family residential mortgages		-		225
Home equity loans and lines		-		104
Consumer		-		1
	$	-	$	10,770

December 31, 2013	90 days or more past due (still accruing)		Non-accrual
Commercial:
Commercial and industrial		-	$	3,956
Construction		-		1,319
Secured by commercial real estate		-		4,630
Secured by residential real estate		-		2,829
State and political subdivisions		-		-
Loans to depository institutions		-		-
Indirect lease financing		-		37
Retail:
1-4 family residential mortgages		-		401
Home equity loans and lines		-		265
Consumer	$	1		16
	$	1	$	13,453

Activity in the allowance for loan losses for the years ended December 31, 2014 and 2013 are as follows:

Year ended December 31, 2014	Balance, beginning of year		Provision for (credit to) loan losses			Charge-offs			Recoveries		Balance, end of year
Commercial:
Commercial and industrial	$	2,044	$	(202	)	$	(17	)	$	67	$	1,892
Construction		439		(142	)		-			-		297
Secured by commercial real estate		2,898		(131	)		(70	)		3		2,700
Secured by residential real estate		1,632		1,019			(1,069	)		48		1,630
State and political subdivisions		186		35			-			-		221
Loans to depository institutions		4		(4	)		-			-		-
Indirect lease financing		103		15			(39	)		14		93
Retail:
1-4 family residential mortgages		303		103			(95	)		1		312
Home equity loans and lines		583		(84	)		(156	)		110		453
Consumer		64		142			(167	)		46		85
Unallocated		669		(351	)	N/A			N/A			318
	$	8,925	$	400		$	(1,613	)	$	289	$	8,001

Year ended December 31, 2013	Balance, beginning of year		Provision for (credit to) loan losses			Charge-offs			Recoveries		Balance, end of year
Commercial:
Commercial and industrial	$	2,505	$	(421	)	$	(68	)	$	28	$	2,044
Construction		209		230			-			-		439
Secured by commercial real estate		3,795		(259	)		(639	)		1		2,898
Secured by residential real estate		1,230		743			(401	)		60		1,632
State and political subdivisions		260		(75	)		-			1		186
Loans to depository institutions		15		(11	)		-			-		4
Indirect lease financing		168		(93	)		(2	)		30		103
Retail:
1-4 family residential mortgages		324		(21	)		-			-		303
Home equity loans and lines		582		207			(234	)		28		583
Consumer		27		88			(77	)		26		64
Unallocated		657		12		N/A			N/A			669
	$	9,772	$	400		$	(1,421	)	$	174	$	8,925

As previously discussed, the Company maintains a loan review system, which includes a continuous review of the loan portfolio by internal and external parties to aid in the early identification of potential impaired loans. 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 for commercial loans, loans to state and political subdivisions and indirect lease financing loans by using either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential mortgage loans for impairment disclosures, unless such loans are part of a larger relationship that is impaired, or are classified as a troubled debt restructuring.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of the majority of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral.

For commercial loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

For commercial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

From time to time, QNB may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers that may be experiencing financial difficulties. A loan is considered to be a troubled debt restructuring (“TDR”) loan when the Company grants a concession to the borrower because of the borrower’s financial condition that it would not otherwise consider. Such concessions include the reduction of interest rates, forgiveness of principal or interest, or other modifications of interest rates to less than the current market rate for new obligations with similar risk. Loans classified as TDRs are considered non-performing and are also designated as impaired.

The concessions made for TDRs involve lowering the monthly payments on loans through periods of interest only payments, a reduction in interest rate below a market rate or an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these three methods. The restructurings rarely result in the forgiveness of principal or accrued interest. If the borrower has demonstrated performance under the previous terms and our underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible. TDR loans that are in compliance with their modified terms and that yield a market rate may be removed from the TDR status after a period of performance.

Performing TDRs (not reported as non-accrual or past due 90 days or more and still accruing) totaled $1,897,000 and $1,960,000 as of December 31, 2014 and 2013, respectively. Non-performing TDRs totaled $3,690,000 and $6,601,000 as of December 31, 2014 and 2013, respectively. All TDRs are included in impaired loans.

The following table illustrates the specific reserve for loan losses allocated to loans modified as TDRs. These specific reserves are included in the allowance for loan losses for loans individually evaluated for impairment. There were charge-offs resulting from loans modified as TDRs of $909,000 and $551,000 during the years ended December 31, 2014 and 2013, respectively.

December 31,	2014				2013
	Recorded investment (balance)		Related allowance		Recorded investment (balance)		Related allowance
TDRs with no specific allowance recorded	$	4,588		-	$	5,647		-
TDRs with an allowance recorded		999	$	813		2,914	$	1,395
	$	5,587	$	813	$	8,561	$	1,395

The TDR concession made during the year ended December 31, 2014 involved an extension of a maturity date. As of December 31, 2014 and 2013, QNB had commitments of $1,729,000 and $1,603,000, respectively, to lend additional funds to customers with loans whose terms have been modified in troubled debt restructurings.

The following table presents loans, by loan class, modified as TDRs during the years ended December 31, 2014 and 2013. The pre-modification outstanding recorded investment disclosed represents the carrying amounts immediately prior to the modification of the loan.

Year ended December 31,	2014						2013
	Number of contracts		Pre- modification outstanding recorded investment		Post- modification outstanding recorded investment		Number of contracts		Pre- modification outstanding recorded investment		Post- modification outstanding recorded investment
Commercial:
Commercial and industrial		-		-		-		1	$	757	$	757
Construction		-		-		-		2		1,319		1,319
Secured by commercial real estate		-		-		-		1		1,822		1,805
Secured by residential real estate		-		-		-		12		690		676
Retail:
Home equity loans and lines		1	$	25	$	25		-		-		-
		1	$	25	$	25		16	$	4,588	$	4,557

The following table presents loans modified as TDRs, included above, within the previous 12 months from December 31, 2014 and 2013, for which there was a payment default, past due 60 days or more, during the respective year end:

Year ended December 31,	2014				2013
TDRs Subsequently Defaulted	Number of contracts		Recorded investment		Number of contracts		Recorded investment
Commercial:
Secured by residential real estate		-	$	-		6	$	361
		-	$	-		6	$	361

The following tables present the balance in the allowance of loan losses disaggregated on the basis of the Company’s impairment method by class of loans receivable along with the balance of loans receivable by class, excluding unearned fees and costs, disaggregated on the basis of the Company’s impairment methodology:

	Allowance for Loan Losses						Loans Receivable
December 31, 2014	Balance		Balance related to loans individually evaluated for impairment		Balance related to loans collectively evaluated for impairment		Balance		Balance individually evaluated for impairment		Balance collectively evaluated for impairment
Commercial:
Commercial and industrial	$	1,892	$	1,095	$	797	$	118,845	$	7,115	$	111,730
Construction		297		-		297		23,471		362		23,109
Secured by commercial real estate		2,700		-		2,700		203,534		11,546		191,988
Secured by residential real estate		1,630		91		1,539		53,077		1,567		51,510
State and political subdivisions		221		-		221		44,104		-		44,104
Loans to depository institutions		-		-		-		-		-		-
Indirect lease financing		93		-		93		7,685		16		7,669
Retail:
1-4 family residential mortgages		312		4		308		37,147		341		36,806
Home equity loans and lines		453		4		449		63,213		129		63,084
Consumer		85		-		85		4,175		1		4,174
Unallocated		318	N/A		N/A		N/A		N/A		N/A
	$	8,001	$	1,194	$	6,489	$	555,251	$	21,077	$	534,174

	Allowance for Loan Losses						Loans Receivable
December 31, 2013	Balance		Balance related to loans individually evaluated for impairment		Balance related to loans collectively evaluated for impairment		Balance		Balance individually evaluated for impairment		Balance collectively evaluated for impairment
Commercial:
Commercial and industrial	$	2,044	$	1,106	$	938	$	111,339	$	10,304	$	101,035
Construction		439		121		318		15,929		1,351		14,578
Secured by commercial real estate		2,898		9		2,889		190,602		12,288		178,314
Secured by residential real estate		1,632		639		993		47,672		2,833		44,839
State and political subdivisions		186		-		186		33,773		-		33,773
Loans to depository institutions		4		-		4		1,250		-		1,250
Indirect lease financing		103		3		100		8,364		37		8,327
Retail:
1-4 family residential mortgages		303		63		240		29,730		522		29,208
Home equity loans and lines		583		70		513		59,977		266		59,711
Consumer		64		11		53		3,116		16		3,100
Unallocated		669	N/A		N/A		N/A		N/A		N/A
	$	8,925	$	2,022	$	6,234	$	501,752	$	27,617	$	474,135

The following tables summarize additional information in regards to impaired loans by loan portfolio class as of December 31, 2014 and 2013: 

December 31, 2014	Recorded investment (after charge-offs)		Unpaid principal balance		Related allowance		Average recorded investment		Interest income recognized
With no specific allowance recorded:
Commercial:
Commercial and industrial	$	5,894	$	6,056	$	-
Construction		362		444		-
Secured by commercial real estate		11,546		12,198		-
Secured by residential real estate		903		1,427		-
State and political subdivisions		-		-		-
Loans to depository institutions		-		-		-
Indirect lease financing		16		16		-
Retail:
1-4 family residential mortgages		225		250		-
Home equity loans and lines		72		93		-
Consumer		1		1		-
	$	19,019	$	20,485	$	-
With an allowance recorded:
Commercial:
Commercial and industrial	$	1,221	$	1,419	$	1,095
Construction		-		-		-
Secured by commercial real estate		-		-		-
Secured by residential real estate		664		748		91
State and political subdivisions		-		-		-
Loans to depository institutions		-		-		-
Indirect lease financing		-		-		-
Retail:
1-4 family residential mortgages		116		116		4
Home equity loans and lines		57		76		4
Consumer		-		-		-
	$	2,058	$	2,359	$	1,194
Total:
Commercial:
Commercial and industrial	$	7,115	$	7,475	$	1,095	$	9,305	$	331
Construction		362		444		-		1,050		2
Secured by commercial real estate		11,546		12,198		-		12,304		344
Secured by residential real estate		1,567		2,175		91		2,452		-
State and political subdivisions		-		-		-		-		-
Loans to depository institutions		-		-		-		-		-
Indirect lease financing		16		16		-		26		1
Retail:
1-4 family residential mortgages		341		366		4		460		5
Home equity loans and lines		129		169		4		169		-
Consumer		1		1		-		2		-
	$	21,077	$	22,844	$	1,194	$	25,768	$	683

December 31, 2013	Recorded investment (after charge-offs)		Unpaid principal balance		Related allowance		Average recorded investment		Interest income recognized
With no specific allowance recorded:
Commercial:
Commercial and industrial	$	8,222	$	8,417	$	-
Construction		916		1,140		-
Secured by commercial real estate		12,251		12,568		-
Secured by residential real estate		728		839		-
State and political subdivisions		-		-		-
Loans to depository institutions		-		-		-
Indirect lease financing		13		16		-
Retail:
1-4 family residential mortgages		250		274		-
Home equity loans and lines		135		150		-
Consumer		-		-		-
	$	22,515	$	23,404	$	-
With an allowance recorded:
Commercial:
Commercial and industrial	$	2,082	$	2,350	$	1,106
Construction		435		493		121
Secured by commercial real estate		37		37		9
Secured by residential real estate		2,105		2,248		639
State and political subdivisions		-		-		-
Loans to depository institutions		-		-		-
Indirect lease financing		24		27		3
Retail:
1-4 family residential mortgages		272		284		63
Home equity loans and lines		131		154		70
Consumer		16		16		11
	$	5,102	$	5,609	$	2,022
Total:
Commercial:
Commercial and industrial	$	10,304	$	10,767	$	1,106	$	6,732	$	34
Construction		1,351		1,633		121		3,179		46
Secured by commercial real estate		12,288		12,605		9		13,765		399
Secured by residential real estate		2,833		3,087		639		3,090		23
State and political subdivisions		-		-		-		1,636		53
Loans to depository institutions		-		-		-		-		-
Indirect lease financing		37		43		3		63		-
Retail:
1-4 family residential mortgages		522		558		63		495		5
Home equity loans and lines		266		304		70		293		-
Consumer		16		16		11		1		-
	$	27,617	$	29,013	$	2,022	$	29,254	$	560