Note 4 - Loans Receivable

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

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

4. Loans Receivable

The following table sets forth the Company’s gross loans by major categories as of December 31, 2014 and 2013:

(dollars in thousands)	December 31, 2014			December 31, 2013
Commercial real estate	$	379,259		$	342,794
Construction and land development		29,861			23,977
Commercial and industrial		145,113			118,209
Owner occupied real estate		188,025			160,229
Consumer and other		39,713			31,981
Residential mortgage		408			2,359
Total loans receivable		782,379			679,549
Deferred costs (fees)		(439	)		(238	)
Allowance for loan losses		(11,536	)		(12,263	)
Net loans receivable	$	770,404		$	667,048

A loan is considered impaired, in accordance with ASC 310 Receivables, when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Impaired loans include nonperforming commercial loans, but also include internally classified accruing loans. 

The following table summarizes information with regard to impaired loans by loan portfolio class as of December 31, 2014 and 2013:

	December 31, 2014						December 31, 2013
(dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial real estate	$	11,964	$	11,969	$	-	$	6,850	$	6,971	$	-
Construction and land development		61		158		-		902		4,076		-
Commercial and industrial		3,764		7,275		-		2,043		2,882		-
Owner occupied real estate		524		528		-		542		862		-
Consumer and other		429		708		-		453		711		-
Total	$	16,742	$	20,638	$	-	$	10,790	$	15,502	$	-

With an allowance recorded:
Commercial real estate	$	13,118	$	13,245	$	3,858	$	13,044	$	13,044	$	3,679
Construction and land development		316		3,741		217		716		3,867		237
Commercial and industrial		1,457		2,057		211		4,889		7,634		1,254
Owner occupied real estate		4,011		4,162		844		2,891		2,891		430
Consumer and other		-		-		-		203		210		10
Total	$	18,902	$	23,205	$	5,130	$	21,743	$	27,646	$	5,610

Total:
Commercial real estate	$	25,082	$	25,214	$	3,858	$	19,894	$	20,015	$	3,679
Construction and land development		377		3,899		217		1,618		7,943		237
Commercial and industrial		5,221		9,332		211		6,932		10,516		1,254
Owner occupied real estate		4,535		4,690		844		3,433		3,753		430
Consumer and other		429		708		-		656		921		10
Total	$	35,644	$	43,843	$	5,130	$	32,533	$	43,148	$	5,610

The following table presents additional information regarding the Company’s impaired loans for the years ended December 31, 2014 and 2013:

	Years Ended December 31,
	2014						2013
(dollars in thousands)	Average Recorded Investment			Interest Income Recognized			Average Recorded Investment			Interest Income Recognized
With no related allowance recorded:
Commercial real estate		$	7,739		$	450		$	14,062		$	731
Construction and land development			462			-			1,954			35
Commercial and industrial			3,070			22			2,783			19
Owner occupied real estate			714			8			347			9
Consumer and other			482			4			651			6
Total		$	12,467		$	484		$	19,797		$	800

With an allowance recorded:
Commercial real estate	$	13,197	$	5	$	6,261	$	195
Construction and land development		557		-		499		-
Commercial and industrial		3,244		-		3,881		40
Owner occupied real estate		3,446		125		3,139		146
Consumer and other		40		-		110		-
Total	$	20,484	$	130	$	13,890	$	381

Total:
Commercial real estate	$	20,936	$	455	$	20,323	$	926
Construction and land development		1,019		-		2,453		35
Commercial and industrial		6,314		22		6,664		59
Owner occupied real estate		4,160		133		3,486		155
Consumer and other		522		4		761		6
Total	$	32,951	$	614	$	33,687	$	1,181

The total average recorded investment on the Company’s impaired loans for the years ended December 31, 2014, 2013, and 2012 were $33.0 million, $33.7 million, and $40.8 million, respectively,  and the related interest income recognized for those dates was $614,000, $1.2 million, and $1.6 million, respectively.  If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately $980,000, $488,000, and $699,000 for the years ended December 31, 2014, 2013, and 2012, respectively.

Included in loans are loans due from directors and other related parties of $8.8 million, $8.8 million, and $9.1 million at December 31, 2014, 2013, and 2012, respectively.  All loans made to directors have substantially the same terms and interest rates as other bank borrowers.  The Board of Directors approves loans to individual directors to confirm that collateral requirements, terms and rates are comparable to other borrowers and are in compliance with underwriting policies.  The following presents the activity in amount due from directors and other related parties for the years ended December 31, 2014, 2013 and 2012.

(dollars in thousands)	December 31, 2014			December 31, 2013			December 31, 2012
Balance at beginning of year	$	8,762		$	9,128		$	16,941
Additions		500			51			259
Repayments		(509	)		(417	)		(8,072	)
Balance at end of year	$	8,753		$	8,762		$	9,128