Loans and Credit Quality (Tables)

6 Months Ended

Jun. 30, 2018

The following table presents total portfolio loans by portfolio segment and class of financing receivable, based on the Company's asset quality rating ("AQR") criteria:



(In Thousands)	Commercial		Real estate construction one-to-four family		Real estate construction other		Real estate term owner occupied		Real estate term non-owner occupied		Real estate term other		Consumer secured by 1st deeds of trust		Consumer other		Total
June 30, 2018
AQR Pass		$293,585		$31,064		$58,369		$118,385		$311,312		$54,820		$20,364		$20,799		$908,698
AQR Special Mention	4,357		—		—		4,433		18,432		611		353		22		28,208
AQR Substandard	29,791		—		—		4,566		473		—		103		70		35,003
Subtotal		$327,733		$31,064		$58,369		$127,384		$330,217		$55,431		$20,820		$20,891		$971,909
Less: Unearned origination fees, net of origination costs																	(4,207		)
Total loans																		$967,702
December 31, 2017
AQR Pass		$277,371		$31,201		$80,093		$127,059		$307,780		$39,777		$21,846		$19,895		$905,022
AQR Special Mention	4,921		—		—		2,095		11,051		634		3		22		18,726
AQR Substandard	31,222		—		—		2,888		482		—		767		2		35,361
Subtotal		$313,514		$31,201		$80,093		$132,042		$319,313		$40,411		$22,616		$19,919		$959,109
Less: Unearned origination fees, net of origination costs																	(4,156		)
Total loans																		$954,953

Nonaccrual Loans by Segment

Nonaccrual loans at the periods indicated are presented below by segment:



(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due			Current			Total
June 30, 2018
Commercial		$—		$—		$1,769			$13,465			$15,234
Real estate term owner occupied	—		—		—			1,331			1,331
Consumer other	—		41		20			9			70
Total nonperforming loans	—		41		1,789			14,805			16,635
Government guarantees on nonaccrual loans	—		—		(73		)	(254		)	(327		)
Net nonaccrual loans		$—		$41		$1,716			$14,551			$16,308
December 31, 2017
Commercial		$810		$—		$2,652			$16,455			$19,917
Real estate term owner occupied	—		—		—			1,331			1,331
Consumer secured by 1st deeds of trust	—		—		378			—			378
Total nonperforming loans	810		—		3,030			17,786			21,626
Government guarantees on nonaccrual loans	—		—		(94		)	(373		)	(467		)
Net nonaccrual loans		$810		$—		$2,936			$17,413			$21,159

Past Due Loans and Nonaccrual Loans

Past due loans and nonaccrual loans at the periods indicated are presented below by segment:



(In Thousands)	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Total Past Due		Nonaccrual		Current		Total
June 30, 2018
Commercial		$973		$110		$—		$1,083		$15,234		$311,416		$327,733
Real estate construction one-to-four family	—		—		—		—		—		31,064		31,064
Real estate construction other	—		—		—		—		—		58,369		58,369
Real estate term owner occupied	—		—		—		—		1,331		126,053		127,384
Real estate term non-owner occupied	—		—		—		—		—		330,217		330,217
Real estate term other	584		27		—		611		—		54,820		55,431
Consumer secured by 1st deed of trust	—		152		—		152		—		20,668		20,820
Consumer other	9		—		—		9		70		20,812		20,891
Subtotal		$1,566		$289		$—		$1,855		$16,635		$953,419		$971,909
Less: Unearned origination fees, net of origination costs													(4,207		)
Total														$967,702
December 31, 2017
Commercial		$503		$—		$240		$743		$19,917		$292,854		$313,514
Real estate construction one-to-four family	—		—		—		—		—		31,201		31,201
Real estate construction other	90		—		—		90		—		80,003		80,093
Real estate term owner occupied	966		—		—		966		1,331		129,745		132,042
Real estate term non-owner occupied	—		—		—		—		—		319,313		319,313
Real estate term other	—		—		—		—		—		40,411		40,411
Consumer secured by 1st deed of trust	363		—		—		363		378		21,875		22,616
Consumer other	161		53		12		226		—		19,693		19,919
Subtotal		$2,083		$53		$252		$2,388		$21,626		$935,095		$959,109
Less: Unearned origination fees, net of origination costs													(4,156		)
Total														$954,953

Impaired Loans

The following tables summarize our average recorded investment and interest income recognized on impaired loans for the three and six month periods ended June 30, 2018 and 2017:



Three Months Ended June 30,	2018						2017
(In Thousands)	Average Recorded Investment		Interest Income Recognized			Average Recorded Investment			Interest Income Recognized
With no related allowance recorded
Commercial - AQR special mention		$2,223			$34			$—			$—
Commercial - AQR substandard	30,657			172			25,412			258
Real estate term owner occupied- AQR substandard	4,575			53			6,079			63
Real estate term non-owner occupied- AQR pass	378			6			371			18
Real estate term non-owner occupied- AQR substandard	475			8			688			9
Real estate term other - AQR pass	527			7			604			11
Real estate term other - AQR substandard	—			—			651			11
Consumer secured by 1st deeds of trust - AQR pass	141			4			—			—
Consumer secured by 1st deeds of trust - AQR special mention	—			—			141			3
Consumer secured by 1st deeds of trust - AQR substandard	103			1			287			5
Subtotal		$39,079			$285			$34,233			$378



With an allowance recorded
Commercial - AQR substandard	$378	$7	$2,611	$—
Subtotal	$378	$7	$2,611	$—



Total
Commercial - AQR special mention		$2,223		$34		$—		$—
Commercial - AQR substandard	31,035		179		28,023		258
Real estate term owner-occupied - AQR substandard	4,575		53		6,079		63
Real estate term non-owner occupied - AQR pass	378		6		371		18
Real estate term non-owner occupied - AQR substandard	475		8		688		9
Real estate term other - AQR pass	527		7		604		11
Real estate term other - AQR substandard	—		—		651		11
Consumer secured by 1st deeds of trust - AQR pass	141		4		—		—
Consumer secured by 1st deeds of trust - AQR special mention	—		—		141		3
Consumer secured by 1st deeds of trust - AQR substandard	103		1		287		5
Total Impaired Loans		$39,457		$292		$36,844		$378



Six Months Ended June 30,	2018						2017
(In Thousands)	Average Recorded Investment		Interest Income Recognized			Average Recorded Investment			Interest Income Recognized
With no related allowance recorded
Commercial - AQR special mention		$2,232			$65			$26			$1
Commercial - AQR substandard	24,637			257			21,500			333
Real estate term owner occupied- AQR pass	—			—			125			5
Real estate term owner occupied- AQR substandard	4,583			77			5,704			147
Real estate term non-owner occupied- AQR pass	339			11			378			32
Real estate term non-owner occupied- AQR special mention	44			2			—			—
Real estate term non-owner occupied- AQR substandard	477			15			692			29
Real estate term other - AQR pass	539			16			614			22
Real estate term other - AQR substandard	—			—			657			23
Consumer secured by 1st deeds of trust - AQR pass	139			7			—			—
Consumer secured by 1st deeds of trust - AQR special mention	—			—			142			7
Consumer secured by 1st deeds of trust - AQR substandard	175			6			371			7
Consumer other - AQR substandard	—			—			26			1
Subtotal		$33,165			$456			$30,235			$607



With an allowance recorded
Commercial - AQR substandard		$3,773		$7		$6,924		$—
Commercial - AQR doubtful	27		—		—		—
Consumer secured by 1st deeds of trust - AQR substandard	120		—		—		—
Subtotal		$3,920		$7		$6,924		$—



Total
Commercial - AQR special mention		$2,232		$65		$26		$1
Commercial - AQR substandard	28,410		264		28,424		333
Commercial - AQR doubtful	27		—		—		—
Real estate term owner-occupied - AQR pass	—		—		125		5
Real estate term owner-occupied - AQR substandard	4,583		77		5,704		147
Real estate term non-owner occupied - AQR pass	339		11		378		32
Real estate term non-owner occupied - AQR special mention	44		2		—		—
Real estate term non-owner occupied - AQR substandard	477		15		692		29
Real estate term other - AQR pass	539		16		614		22
Real estate term other - AQR substandard	—		—		657		23
Consumer secured by 1st deeds of trust - AQR pass	139		7		—		—
Consumer secured by 1st deeds of trust - AQR special mention	—		—		142		7
Consumer secured by 1st deeds of trust - AQR substandard	295		6		371		7
Consumer other - AQR substandard	—		—		26		1
Total Impaired Loans		$37,085		$463		$37,159		$607

The following table presents information about impaired loans by class as of the periods indicated:



(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
June 30, 2018
With no related allowance recorded
Commercial - AQR special mention		$2,212		$2,212		$—
Commercial - AQR substandard	29,376		31,412		—
Real estate term owner occupied- AQR substandard	4,566		4,566		—
Real estate term non-owner occupied- AQR pass	371		371		—
Real estate term non-owner occupied- AQR substandard	473		473		—
Real estate term other - AQR pass	514		514		—
Consumer secured by 1st deeds of trust - AQR pass	133		133		—
Consumer secured by 1st deeds of trust - AQR substandard	103		103		—
Subtotal		$37,748		$39,784		$—



With an allowance recorded
Commercial - AQR substandard	$373	$373	$73
Subtotal	$373	$373	$73



Total
Commercial - AQR special mention		$2,212		$2,212		$—
Commercial - AQR substandard	29,749		31,785		73
Real estate term owner-occupied - AQR substandard	4,566		4,566		—
Real estate term non-owner occupied - AQR pass	371		371		—
Real estate term non-owner occupied - AQR substandard	473		473		—
Real estate term other - AQR pass	514		514		—
Consumer secured by 1st deeds of trust - AQR pass	133		133		—
Consumer secured by 1st deeds of trust - AQR substandard	103		103		—
Total		$38,121		$40,157		$73



(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
December 31, 2017
With no related allowance recorded
Commercial - AQR special mention		$2,153		$2,153		$—
Commercial - AQR substandard	16,671		17,742		—
Real estate term owner occupied - AQR substandard	2,862		2,862		—
Real estate term non-owner occupied - AQR pass	303		303		—
Real estate term non-owner occupied - AQR special mention	89		89		—
Real estate term non-owner occupied - AQR substandard	482		482		—
Real estate term other - AQR pass	559		559		—
Consumer secured by 1st deeds of trust - AQR pass	136		136		—
Consumer secured by 1st deeds of trust - AQR substandard	724		809		—
Subtotal		$23,979		$25,135		$—



With an allowance recorded
Commercial - AQR substandard	$7,988	$7,988	$966
Subtotal	$7,988	$7,988	$966



Total
Commercial - AQR special mention		$2,153		$2,153		$—
Commercial - AQR substandard	24,659		25,730		966
Real estate term owner occupied - AQR substandard	2,862		2,862		—
Real estate term non-owner occupied - AQR pass	303		303		—
Real estate term non-owner occupied - AQR special mention	89		89		—
Real estate term non-owner occupied - AQR substandard	482		482		—
Real estate term other - AQR pass	559		559		—
Consumer secured by 1st deeds of trust - AQR pass	136		136		—
Consumer secured by 1st deeds of trust - AQR substandard	724		809		—
Total		$31,967		$33,123		$966

Restructured Loans

The following table presents the breakout between newly restructured loans that occurred during the six months ended June 30, 2018 and restructured loans that occurred prior to 2018 that are still included in portfolio loans:



	Accrual Status		Nonaccrual Status		Total Modifications
(In Thousands)	Accrual Status		Nonaccrual Status		Total Modifications
New Troubled Debt Restructurings
Commercial - AQR substandard		$1,179		$559		$1,738
Real estate term owner occupied- AQR substandard	363		1,331		1,694
Subtotal		$1,542		$1,890		$3,432
Existing Troubled Debt Restructurings		$7,554		$12,772		$20,326
Total		$9,096		$14,662		$23,758

Newly Restructured Loans by Concession

The following tables present newly restructured loans that occurred during the six months ended June 30, 2018 and 2017, by concession (terms modified):



		June 30, 2018
	Number of Contracts	Rate Modification		Term Modification		Payment Modification		Combination Modification		Total Modifications
(In Thousands)	Number of Contracts	Rate Modification		Term Modification		Payment Modification		Combination Modification		Total Modifications
Pre-Modification Outstanding Recorded Investment:
Commercial - AQR substandard	4		$—		$—		$2,704		$—		$2,704
Real estate term owner occupied- AQR substandard	2	—		—		1,694		—		1,694
Total	6		$—		$—		$4,398		$—		$4,398
Post-Modification Outstanding Recorded Investment:
Commercial - AQR substandard	4		$—		$—		$1,738		$—		$1,738
Real estate term owner occupied- AQR substandard	2	—		—		1,694		—		1,694
Total	6		$—		$—		$3,432		$—		$3,432



		June 30, 2017
	Number of Contracts	Rate Modification		Term Modification		Payment Modification		Combination Modification		Total Modifications
(In Thousands)	Number of Contracts	Rate Modification		Term Modification		Payment Modification		Combination Modification		Total Modifications
Pre-Modification Outstanding Recorded Investment:
Commercial - AQR substandard	2		$—		$10,665		$210		$—		$10,875
Total	2		$—		$10,665		$210		$—		$10,875
Post-Modification Outstanding Recorded Investment:
Commercial - AQR substandard	2		$—		$10,165		$210		$—		$10,375
Total	2		$—		$10,165		$210		$—		$10,375

Schedule of Trouble Debt Restructurings That Subsequently Defaulted

The following table presents TDRs that occurred during the twelve month period ending June 30, 2018 that subsequently defaulted during the six months ended June 30, 2018:



		June 30, 2018
	Number of Contracts	Recorded Investment
(In Thousands)	Number of Contracts	Recorded Investment
Troubled Debt Restructurings that Subsequently Defaulted:
Commercial - AQR substandard	2		$559
Total	2		$559