XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Loans and Allowance for Loan Losses
 9 Months Ended
Sep. 30, 2018
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract]  
Loans and Allowance for Loan Losses

Note 3.  Loans and Allowance for Loan Losses

 

The Company segregates its loan portfolio into several loan segments:  commercial and industrial, real estate, consumer and student loans.  Real estate loans are segregated into the following classes: construction and land, commercial real estate, residential real estate and home equity lines of credit.  The following tables present the total allowance for loan losses, the allowance by impairment methodology (individually evaluated for impairment or collectively evaluated for impairment), and total loans and loans by impairment methodology (individually evaluated for impairment or collectively evaluated for impairment).  

 

 

 

September 30, 2018

 

(In thousands)

 

Commercial and Industrial

 

 

Commercial Real Estate

 

 

Construction and Land

 

 

Consumer

 

 

Student

 

 

Residential

Real Estate

 

 

Home Equity Lines of Credit

 

 

Unallocated

 

 

Total

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance, December 31, 2017

 

$

518

 

 

$

1,609

 

 

$

879

 

 

$

105

 

 

$

72

 

 

$

1,174

 

 

$

387

 

 

$

350

 

 

$

5,094

 

Charge-offs

 

 

(99

)

 

 

-

 

 

 

(312

)

 

 

(9

)

 

 

(21

)

 

 

-

 

 

 

(80

)

 

 

-

 

 

 

(521

)

Recoveries

 

 

31

 

 

 

50

 

 

 

-

 

 

 

4

 

 

 

-

 

 

 

48

 

 

 

1

 

 

 

-

 

 

 

134

 

Provision

 

 

72

 

 

 

158

 

 

 

9

 

 

 

23

 

 

 

23

 

 

 

114

 

 

 

108

 

 

 

-

 

 

 

507

 

Ending balance,

September 30, 2018

 

$

522

 

 

$

1,817

 

 

$

576

 

 

$

123

 

 

$

74

 

 

$

1,336

 

 

$

416

 

 

$

350

 

 

$

5,214

 

Ending balances individually evaluated for impairment

 

$

185

 

 

$

282

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

73

 

 

$

-

 

 

$

540

 

Ending balances collectively evaluated for impairment

 

$

337

 

 

$

1,535

 

 

$

576

 

 

$

123

 

 

$

74

 

 

$

1,336

 

 

$

343

 

 

$

350

 

 

$

4,674

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

 

$

540

 

 

$

3,583

 

 

$

2,694

 

 

$

-

 

 

$

-

 

 

$

713

 

 

$

573

 

 

 

 

 

 

$

8,103

 

Collectively evaluated for impairment

 

 

27,812

 

 

 

180,949

 

 

 

61,584

 

 

 

5,144

 

 

 

9,448

 

 

 

198,436

 

 

 

41,540

 

 

 

 

 

 

 

524,913

 

Ending balance,

September 30, 2018

 

$

28,352

 

 

$

184,532

 

 

$

64,278

 

 

$

5,144

 

 

$

9,448

 

 

$

199,149

 

 

$

42,113

 

 

 

 

 

 

$

533,016

 

 

 

 

September 30, 2017

 

(In thousands)

 

Commercial and Industrial

 

 

Commercial Real Estate

 

 

Construction and Land

 

 

Consumer

 

 

Student

 

 

Residential

Real Estate

 

 

Home Equity Lines of Credit

 

 

Unallocated

 

 

Total

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance, December 31, 2016

 

$

561

 

 

$

1,569

 

 

$

661

 

 

$

21

 

 

$

76

 

 

$

943

 

 

$

307

 

 

$

387

 

 

$

4,525

 

Charge-offs

 

 

(15

)

 

 

(476

)

 

 

-

 

 

 

(97

)

 

 

(20

)

 

 

(51

)

 

 

-

 

 

 

-

 

 

 

(659

)

Recoveries

 

 

154

 

 

 

4

 

 

 

-

 

 

 

2

 

 

 

-

 

 

 

4

 

 

 

3

 

 

 

-

 

 

 

167

 

Provision (recovery)

 

 

(270

)

 

 

400

 

 

 

165

 

 

 

152

 

 

 

11

 

 

 

100

 

 

 

72

 

 

 

(235

)

 

 

395

 

Ending balance, September 30, 2017

 

$

430

 

 

$

1,497

 

 

$

826

 

 

$

78

 

 

$

67

 

 

$

996

 

 

$

382

 

 

$

152

 

 

$

4,428

 

 

 

 

December 31, 2017

 

(In thousands)

 

Commercial and Industrial

 

 

Commercial Real Estate

 

 

Construction and Land

 

 

Consumer

 

 

Student

 

 

Residential

Real Estate

 

 

Home Equity Lines of Credit

 

 

Unallocated

 

 

Total

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance, December 31, 2016

 

$

561

 

 

$

1,569

 

 

$

661

 

 

$

21

 

 

$

76

 

 

$

943

 

 

$

307

 

 

$

387

 

 

$

4,525

 

Charge-offs

 

 

(19

)

 

 

(476

)

 

 

-

 

 

 

(114

)

 

 

(31

)

 

 

(51

)

 

 

-

 

 

 

-

 

 

 

(691

)

Recoveries

 

 

154

 

 

 

575

 

 

 

-

 

 

 

2

 

 

 

-

 

 

 

6

 

 

 

3

 

 

 

-

 

 

 

740

 

Provision (recovery)

 

 

(178

)

 

 

(59

)

 

 

218

 

 

 

196

 

 

 

27

 

 

 

276

 

 

 

77

 

 

 

(37

)

 

 

520

 

Ending balance, December 31, 2017

 

$

518

 

 

$

1,609

 

 

$

879

 

 

$

105

 

 

$

72

 

 

$

1,174

 

 

$

387

 

 

$

350

 

 

$

5,094

 

Ending balances individually evaluated for impairment

 

$

247

 

 

$

257

 

 

$

357

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

51

 

 

$

-

 

 

$

912

 

Ending balances collectively evaluated for impairment

 

$

271

 

 

$

1,352

 

 

$

522

 

 

$

105

 

 

$

72

 

 

$

1,174

 

 

$

336

 

 

$

350

 

 

$

4,182

 

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

 

$

758

 

 

$

3,631

 

 

$

5,234

 

 

$

-

 

 

$

-

 

 

$

581

 

 

$

658

 

 

 

 

 

 

$

10,862

 

Collectively evaluated for impairment

 

 

23,655

 

 

 

173,196

 

 

 

48,928

 

 

 

5,068

 

 

 

10,677

 

 

 

186,523

 

 

 

43,890

 

 

 

 

 

 

 

491,937

 

Ending balance, December 31, 2017

 

$

24,413

 

 

$

176,827

 

 

$

54,162

 

 

$

5,068

 

 

$

10,677

 

 

$

187,104

 

 

$

44,548

 

 

 

 

 

 

$

502,799

 

 

The following tables present the recorded investment in loans, by portfolio segment, that have been classified according to the internal risk rating system.

 

 

September 30, 2018

 

(In thousands)

 

Commercial and Industrial

 

 

Commercial Real Estate

 

 

Construction and Land

 

 

Consumer

 

 

Student

 

 

Residential

Real Estate

 

 

Home Equity Lines of Credit

 

 

Total

 

Grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

26,431

 

 

$

175,942

 

 

$

60,318

 

 

$

5,141

 

 

$

9,448

 

 

$

191,992

 

 

$

38,816

 

 

$

508,088

 

Special mention

 

 

964

 

 

 

3,632

 

 

 

2,325

 

 

 

3

 

 

 

-

 

 

 

1,071

 

 

 

425

 

 

 

8,420

 

Substandard

 

 

957

 

 

 

4,958

 

 

 

1,635

 

 

 

-

 

 

 

-

 

 

 

6,086

 

 

 

2,872

 

 

 

16,508

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total

 

$

28,352

 

 

$

184,532

 

 

$

64,278

 

 

$

5,144

 

 

$

9,448

 

 

$

199,149

 

 

$

42,113

 

 

$

533,016

 

 

 

December 31, 2017

 

(In thousands)

Commercial and Industrial

 

 

Commercial Real Estate

 

 

Construction and Land

 

 

Consumer

 

 

Student

 

 

Residential

Real Estate

 

 

Home Equity Lines of Credit

 

 

Total

 

Grade:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

$

21,769

 

 

$

167,625

 

 

$

44,006

 

 

$

5,065

 

 

$

10,677

 

 

$

180,119

 

 

$

40,373

 

 

$

469,634

 

Special mention

 

1,152

 

 

 

4,243

 

 

 

143

 

 

 

3

 

 

 

-

 

 

 

763

 

 

 

813

 

 

 

7,117

 

Substandard

 

1,492

 

 

 

4,959

 

 

 

10,013

 

 

 

-

 

 

 

-

 

 

 

6,222

 

 

 

3,362

 

 

 

26,048

 

Doubtful

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Loss

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total

$

24,413

 

 

$

176,827

 

 

$

54,162

 

 

$

5,068

 

 

$

10,677

 

 

$

187,104

 

 

$

44,548

 

 

$

502,799

 

 

The following table presents the aging of the recorded investment in past due loans and nonaccrual loans, by portfolio segment.

 

 

 

September 30, 2018

 

(In thousands)

 

30-59 Days

Past Due

 

 

60-89 Days

Past Due

 

 

Greater than

90 Days

Past Due

 

 

Total Past Due

 

 

Current

 

 

Total Loans

 

 

Greater than

90 Days

Past Due and Accruing

 

 

Nonaccruals

 

Commercial and industrial

 

$

101

 

 

$

-

 

 

$

81

 

 

$

182

 

 

$

28,170

 

 

$

28,352

 

 

$

-

 

 

$

146

 

Commercial real estate

 

 

-

 

 

 

-

 

 

 

1,341

 

 

 

1,341

 

 

 

183,191

 

 

 

184,532

 

 

 

-

 

 

 

1,341

 

Construction and land

 

 

242

 

 

 

-

 

 

 

198

 

 

 

440

 

 

 

63,838

 

 

 

64,278

 

 

 

198

 

 

 

-

 

Consumer

 

 

35

 

 

 

-

 

 

 

-

 

 

 

35

 

 

 

5,109

 

 

 

5,144

 

 

 

2

 

 

 

-

 

Student

 

 

332

 

 

 

477

 

 

 

1,400

 

 

 

2,209

 

 

 

7,239

 

 

 

9,448

 

 

 

1,400

 

 

 

-

 

Residential real estate

 

 

171

 

 

 

-

 

 

 

241

 

 

 

412

 

 

 

198,737

 

 

 

199,149

 

 

 

241

 

 

 

321

 

Home equity lines of credit

 

 

159

 

 

 

140

 

 

 

573

 

 

 

872

 

 

 

41,241

 

 

 

42,113

 

 

 

-

 

 

 

573

 

Total

 

$

1,040

 

 

$

617

 

 

$

3,834

 

 

$

5,491

 

 

$

527,525

 

 

$

533,016

 

 

$

1,841

 

 

$

2,381

 

 

 

 

December 31, 2017

 

(In thousands)

 

30-59 Days

Past Due

 

 

60-89 Days

Past Due

 

 

Greater than

90 Days

Past Due

 

 

Total Past Due

 

 

Current

 

 

Total Loans

 

 

Greater than

90 Days

Past Due and Accruing

 

 

Nonaccruals

 

Commercial and industrial

 

$

83

 

 

$

153

 

 

$

60

 

 

$

296

 

 

$

24,117

 

 

$

24,413

 

 

$

49

 

 

$

140

 

Commercial real estate

 

 

-

 

 

 

1,404

 

 

 

-

 

 

 

1,404

 

 

 

175,423

 

 

 

176,827

 

 

 

-

 

 

 

936

 

Construction and land

 

 

430

 

 

 

-

 

 

 

1,335

 

 

 

1,765

 

 

 

52,397

 

 

 

54,162

 

 

 

-

 

 

 

1,335

 

Consumer

 

 

5

 

 

 

22

 

 

 

-

 

 

 

27

 

 

 

5,041

 

 

 

5,068

 

 

 

-

 

 

 

-

 

Student

 

 

504

 

 

 

512

 

 

 

1,616

 

 

 

2,632

 

 

 

8,045

 

 

 

10,677

 

 

 

1,616

 

 

 

-

 

Residential real estate

 

 

637

 

 

 

153

 

 

 

-

 

 

 

790

 

 

 

186,314

 

 

 

187,104

 

 

 

-

 

 

 

181

 

Home equity lines of credit

 

 

337

 

 

 

346

 

 

 

588

 

 

 

1,271

 

 

 

43,277

 

 

 

44,548

 

 

 

-

 

 

 

588

 

Total

 

$

1,996

 

 

$

2,590

 

 

$

3,599

 

 

$

8,185

 

 

$

494,614

 

 

$

502,799

 

 

$

1,665

 

 

$

3,180

 

 

  

The following table presents information related to impaired loans, by portfolio segment.

 

 

 

September 30, 2018

 

(In thousands)

 

Recorded Investment

 

 

Unpaid Principal Balance

 

 

Related Allowance

 

 

Average Recorded Investment

 

 

Interest Income Recognized

 

With no specific allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

71

 

 

$

74

 

 

$

-

 

 

$

89

 

 

$

2

 

Commercial real estate

 

 

1,396

 

 

 

1,396

 

 

 

-

 

 

 

1,422

 

 

 

57

 

Construction and land

 

 

2,694

 

 

 

2,693

 

 

 

-

 

 

 

3,296

 

 

 

110

 

Student

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Residential real estate

 

 

713

 

 

 

730

 

 

 

-

 

 

 

723

 

 

 

14

 

Home equity lines of credit

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

469

 

 

$

501

 

 

$

185

 

 

$

591

 

 

$

16

 

Commercial real estate

 

 

2,187

 

 

 

2,201

 

 

 

282

 

 

 

2,369

 

 

 

30

 

Construction and land

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Student

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Residential real estate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Home equity lines of credit

 

 

573

 

 

 

600

 

 

 

73

 

 

 

580

 

 

 

-

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

540

 

 

$

575

 

 

$

185

 

 

$

680

 

 

$

18

 

Commercial real estate

 

 

3,583

 

 

 

3,597

 

 

 

282

 

 

 

3,791

 

 

 

87

 

Construction and land

 

 

2,694

 

 

 

2,693

 

 

 

-

 

 

 

3,296

 

 

 

110

 

Student

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Residential real estate

 

 

713

 

 

 

730

 

 

 

-

 

 

 

723

 

 

 

14

 

Home equity lines of credit

 

 

573

 

 

 

600

 

 

 

73

 

 

 

580

 

 

 

-

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total

 

$

8,103

 

 

$

8,195

 

 

$

540

 

 

$

9,070

 

 

$

229

 

 

 

 

December 31, 2017

 

(In thousands)

 

Recorded Investment

 

 

Unpaid Principal Balance

 

 

Related Allowance

 

 

Average Recorded Investment

 

 

Interest Income Recognized

 

With no specific allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

Commercial real estate

 

 

2,383

 

 

 

2,383

 

 

 

-

 

 

 

2,429

 

 

 

124

 

Construction and land

 

 

1,829

 

 

 

1,881

 

 

 

-

 

 

 

2,041

 

 

 

56

 

Student

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Residential real estate

 

 

581

 

 

 

585

 

 

 

-

 

 

 

591

 

 

 

22

 

Home equity lines of credit

 

 

70

 

 

 

70

 

 

 

-

 

 

 

70

 

 

 

3

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

758

 

 

$

788

 

 

$

247

 

 

$

791

 

 

$

29

 

Commercial real estate

 

 

1,248

 

 

 

1,248

 

 

 

257

 

 

 

1,256

 

 

 

58

 

Construction and land

 

 

3,405

 

 

 

3,433

 

 

 

357

 

 

 

3,451

 

 

 

134

 

Student

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Residential real estate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Home equity lines of credit

 

 

588

 

 

 

600

 

 

 

51

 

 

 

594

 

 

 

5

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

758

 

 

$

788

 

 

$

247

 

 

$

791

 

 

$

29

 

Commercial real estate

 

 

3,631

 

 

 

3,631

 

 

 

257

 

 

 

3,685

 

 

 

182

 

Construction and land

 

 

5,234

 

 

 

5,314

 

 

 

357

 

 

 

5,492

 

 

 

190

 

Student

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Residential real estate

 

 

581

 

 

 

585

 

 

 

-

 

 

 

591

 

 

 

22

 

Home equity lines of credit

 

 

658

 

 

 

670

 

 

 

51

 

 

 

664

 

 

 

8

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total

 

$

10,862

 

 

$

10,988

 

 

$

912

 

 

$

11,223

 

 

$

431

 

 

U.S. GAAP requires that the impairment of loans that have been separately identified for evaluation be measured based on the present value of expected future cash flows or, alternatively, the observable market price of the loans or the fair value of the collateral. However, for those loans that are collateral dependent (that is, if repayment of those loans is expected to be provided solely by the underlying collateral) and for which management has determined foreclosure is probable, the measure of impairment is to be based on the net realizable value of the collateral.

A loan is considered impaired when it is probable that the Bank will be unable to collect all principal and interest amounts according to the contractual terms of the loan agreement. Factors involved in determining impairment include, but are not limited to, expected future cash flows, financial condition of the borrower, and the current economic conditions. A performing loan may be considered impaired if the factors above indicate a need for impairment. A loan on nonaccrual status may not be impaired if it is in the process of collection or if the shortfall in payment is insignificant. A delay of less than 30 days or a shortfall of less than 5% of the required principal and interest payments generally is considered insignificant and would not indicate an impairment situation, if in management’s judgment the loan will be paid in full. Loans that meet the regulatory definitions of doubtful or loss generally qualify as impaired loans under U.S. GAAP. As is the case for all loans, charge-offs for impaired loans occur when the loan or portion of the loan is determined to be uncollectible.

At September 30, 2018, there were six loans in the portfolio, totaling $3.5 million, that have been identified as a troubled debt restructures (“TDRs”), of which, five were current and performing in accordance with the modified terms.  At December 31, 2017, there were 10 loans in the portfolio, totaling $5.6 million, that have been identified as TDRs, of which six were current and performing in accordance with the modified terms.  There were no loan modifications that were classified as TDRs during the three and nine months ended September 30, 2018 and 2017.  There were no defaults on TDRs occurring within 12 months of modification during the three and nine months ended September 30, 2018 and 2017.

At September 30, 2018, the Company had no foreclosed residential real estate property in its possession or in the process of foreclosure.