LOANS (Tables)

12 Months Ended

Dec. 31, 2019

LOANS

Schedule of the composition of the loan portfolio

The following is a summary of loans at December 31, 2019 and 2018:

	2019					2018
			Percent					Percent
	Amount		of total			Amount			of total
	(dollars in thousands)
Real estate loans:
1-to-4 family residential	$	151,697		14.73	%	$	159,597		16.19	%
Commercial real estate		459,115		44.58	%		457,611		46.41	%
Multi-family residential		69,124		6.71	%		63,459		6.44	%
Construction		221,878		21.55	%		170,404		17.28	%
Home equity lines of credit (“HELOC”)		44,514		4.32	%		49,713		5.04	%
Total real estate loans		946,328		91.89	%		900,784		91.36	%
Other loans:
Commercial and industrial		75,748		7.35	%		74,181		7.52	%
Loans to individuals		9,779		0.95	%		12,597		1.28	%
Overdrafts		234		0.02	%		217		0.02	%
Total other loans		85,761		8.32	%		86,995		8.82	%
Gross loans		1,032,089					987,779
Less deferred loan origination fees, net		(2,114)		(0.18)	%		(1,739)		(0.18)	%
Total loans		1,029,975		100.00	%		986,040		100.00	%
Allowance for loan losses		(8,324)					(8,669)
Total loans, net	$	1,021,651				$	977,371

Schedule of Purchased Credit Impaired, or PCI, the contractually required payments including principal and interest, cash flows expected to be collected

For PCI loans acquired from Legacy Select and Premara, the contractually required payments including principal and interest, cash flows expected to be collected and fair values as of the closing date of the merger and December 31, 2019 and 2018 were:

	December 31,		December 31,
	2019		2018
	(dollars in thousands)
Contractually required payments	$	20,598	$	24,823
Nonaccretable difference		1,694		1,962
Cash flows expected to be collected		18,904		22,861
Accretable yield		3,191		3,593
Fair value	$	15,713	$	19,268

Schedule of age analysis of past due loans, segregated by class of loans

The following tables present as of December 31, 2019 and 2018 an age analysis of past due loans, segregated by class of loans:

	December 31, 2019
	30-59		60-89		90+		Non-		Total
	Days		Days		Days		Accrual		Past		Total
	Past Due		Past Due		Accruing		Loans		Due		Current		Loans
	(dollars in thousands)
Total loans
Commercial and industrial	$	1,108	$	34	$	46	$	2,824	$	4,012	$	71,736	$	75,748
Construction		—		—		—		181		181		221,697		221,878
Multi-family residential		—		—		—		—		—		69,124		69,124
Commercial real estate		393		82		321		1,832		2,628		456,487		459,115
Loans to individuals & overdrafts		5		—		—		155		160		9,853		10,013
1‑to‑4 family residential		859		810		864		505		3,038		148,659		151,697
HELOC		168		—		—		444		612		43,902		44,514
Deferred loan (fees) cost, net		—		—		—		—		—		—		(2,114)
	$	2,533	$	926	$	1,231	$	5,941	$	10,631	$	1,021,458	$	1,029,975
Loans- PCI
Commercial and industrial	$	—	$	—	$	46	$	—	$	46	$	1,057	$	1,103
Construction		—		—		—		—		—		677		677
Multi-family residential		—		—		—		—		—		897		897
Commercial real estate		—		—		321		—		321		5,449		5,770
Loans to individuals & overdrafts		—		—		—		—		—		—		—
1‑to‑4 family residential		—		—		864		—		864		6,354		7,218
HELOC		—		—		—		—		—		48		48
	$	—	$	—	$	1,231	$	—	$	1,231	$	14,482	$	15,713
Loans- excluding PCI
Commercial and industrial	$	1,108	$	34	$	—	$	2,824	$	3,966	$	70,679	$	74,645
Construction		—		—		—		181		181		221,020		221,201
Multi-family residential		—		—		—		—		—		68,227		68,227
Commercial real estate		393		82		—		1,832		2,307		451,038		453,345
Loans to individuals & overdrafts		5		—		—		155		160		9,853		10,013
1‑to‑4 family residential		859		810		—		505		2,174		142,305		144,479
HELOC		168		—		—		444		612		43,854		44,466
Deferred loan (fees) cost, net		—		—		—		—		—		—		(2,114)
	$	2,533	$	926	$	—	$	5,941	$	9,400	$	1,006,976	$	1,014,262

Non-Accrual and Past Due Loans

	December 31, 2018
	30-59		60-89		90+		Non-		Total
	Days		Days		Days		Accrual		Past				Total
	Past Due		Past Due		Accruing		Loans		Due		Current		Loans
	(dollars in thousands)
Total loans
Commercial and industrial	$	27	$	203	$	1,665	$	4,170	$	6,065	$	68,116	$	74,181
Construction		—		—		69		587		656		169,748		170,404
Multi-family residential		—		—		—		—		—		63,459		63,459
Commercial real estate		103		483		—		1,074		1,660		455,951		457,611
Loans to individuals & overdrafts		1		24		—		—		25		12,789		12,814
1‑to‑4 family residential		502		505		1,433		386		2,826		156,771		159,597
HELOC		—		43		—		1,040		1,083		48,630		49,713
Deferred loan (fees) cost, net		—		—		—		—		—		—		(1,739)
	$	633	$	1,258	$	3,167	$	7,257	$	12,315	$	975,464	$	986,040
Loans- PCI
Commercial and industrial	$	—	$	—	$	1,665	$	—	$	1,665	$	99	$	1,764
Construction		—		—		69		—		69		682		751
Multi-family residential		—		—		—		—		—		937		937
Commercial real estate		—		—		—		—		—		7,579		7,579
Loans to individuals & overdrafts		—		—		—		—		—		—		—
1‑to‑4 family residential		—		—		1,433		—		1,433		6,755		8,188
HELOC		—		—		—		—		—		49		49
	$	—	$	—	$	3,167	$	—	$	3,167	$	16,101	$	19,268
Loans- excluding PCI
Commercial and industrial	$	27	$	203	$	—	$	4,170	$	4,400	$	68,017	$	72,417
Construction		—		—		—		587		587		169,066		169,653
Multi-family residential		—		—		—		—		—		62,522		62,522
Commercial real estate		103		483		—		1,074		1,660		448,372		450,032
Loans to individuals & overdrafts		1		24		—		—		25		12,789		12,814
1‑to‑4 family residential		502		505		—		386		1,393		150,016		151,409
HELOC		—		43		—		1,040		1,083		48,581		49,664
Deferred loan (fees) cost, net		—		—		—		—		—		—		(1,739)
	$	633	$	1,258	$	—	$	7,257	$	9,148	$	959,363	$	966,772

Schedule of information on loans that were considered to be impaired

The following tables present information on loans, excluding PCI loans and loans evaluated collectively as a homogenous group, that were considered to be impaired as of December 31, 2019 and December 31, 2018:

							December 31, 2019
			Contractual				Year to Date
			Unpaid		Related		Average		Interest Income
	Recorded		Principal		Allowance		Recorded		Recognized on
	Investment		Balance		for Loan Losses		Investment		Impaired Loans
	(dollars in thousands)
2019:
With no related allowance recorded:
Commercial and industrial	$	2,796	$	4,051	$	—	$	4,186	$	122
Construction		440		537		—		500		26
Commercial real estate		5,585		6,750		—		5,632		272
Loans to individuals & overdrafts		284		293		—		193		12
Multi-family residential		197		197		—		206		13
HELOC		543		678		—		793		36
1‑to‑4 family residential		395		1,816		—		1,204		86
Subtotal:		10,240		14,322		—		12,714		567
With an allowance recorded:
Commercial and industrial		731		1,056		403		572		41
Construction		—		—		—		13		—
Commercial real estate		—		—		—		—		—
Loans to individuals & overdrafts		—		—		—		—		—
Multi-family Residential		—		—		—		—		—
HELOC		160		222		—		212		10
1‑to‑4 family residential		81		94		10		563		7
Subtotal:		972		1,372		413		1,360		58
Totals:
Commercial		9,749		12,591		403		11,109		474
Consumer		284		293		-		193		12
Residential		1,179		2,810		10		2,772		139
Grand Total:	$	11,212	$	15,694	$	413	$	14,074	$	625

							December 31, 2018
			Contractual				Year to Date
			Unpaid		Related		Average		Interest Income
	Recorded		Principal		Allowance		Recorded		Recognized on
	Investment		Balance		for Loan Losses		Investment		Impaired Loans
	(dollars in thousands)
2018:
With no related allowance recorded:
Commercial and industrial	$	4,210	$	4,495	$	—	$	2,899	$	229
Construction		561		647		—		473		16
Commercial real estate		4,744		6,903		—		5,053		372
Loans to individuals & overdrafts		101		109		—		51		9
Multi-family residential		215		215		—		225		15
HELOC		1,040		1,204		—		884		50
1‑to‑4 family residential		572		732		—		1,169		79
Subtotal:		11,443		14,305		—		10,754		770
With an allowance recorded:
Commercial and industrial		127		325		51		234		13
Construction		27		27		14		13		—
Commercial real estate		—		—		—		—		—
Loans to individuals & overdrafts		—		—		—		—		—
Multi-family Residential		—		—		—		—		—
HELOC		—		—		—		—		—
1‑to‑4 family residential		137		555		22		374		23
Subtotal:		291		907		87		621		36
Totals:
Commercial		10,007		12,612		65		8,897		645
Consumer		101		109		—		51		9
Residential		1,626		2,491		22		2,427		152
Grand Total:	$	11,734	$	15,212	$	87	$	11,375	$	806

Schedule of loans that were modified as troubled debt restructurings ("TDRs") with a breakdown of the types of concessions made by loan class

The following tables present loans that were modified as troubled debt restructurings (“TDRs”) within the previous twelve months with a breakdown of the types of concessions made by loan class during the twelve months ended December 31, 2019 and 2018:

	Twelve Months Ended December 31, 2019
		Pre-Modification		Post-Modification
	Number	Outstanding		Outstanding
	of	Recorded		Recorded
	loans	Investments		Investments
	(dollars in thousands)
Extended payment terms:
Commercial and industrial	6	$	2,535	$	2,380
Commercial real estate	1		752		687
Construction	1		260		259
1‑to‑4 family residential	3		232		208
Total	11	$	3,779	$	3,534

	Twelve Months Ended December 31, 2018
		Pre-Modification		Post-Modification
	Number	Outstanding		Outstanding
	of	Recorded		Recorded
	loans	Investments		Investments
	(dollars in thousands)
Extended payment terms:
Commercial and industrial	6	$	1,579	$	1,517
Commercial real estate	3		1,283		895
1‑to‑4 family residential	1		409		389
Total	10	$	3,271	$	2,801

The following tables present loans that were modified as TDRs within the previous twelve months for which there was a payment default together with a breakdown of the types of concessions made by loan class during the twelve months ended December 31, 2019 and 2018:

	Twelve months ended
	December 31, 2019
	Number	Recorded
	of loans	investment
	(dollars in thousands)
Extended payment terms:
Commercial and industrial	2	$	1,566
Total	2	$	1,566

	Twelve months ended
	December 31, 2018
	Number	Recorded
	of loans	investment
	(dollars in thousands)
Extended payment terms:
Commercial and industrial	4	$	1,036
Commercial real estate	1		334
Total	5	$	1,370

Schedule of information on risk ratings of the commercial and consumer loan portfolios, segregated by loan class

The following tables present information on risk ratings of the commercial and consumer loan portfolios, segregated by loan class as of December 31, 2019 and 2018:

Total Loans:

December 31, 2019
Commercial
Credit
Exposure By	Commercial				Commercial
Internally	and				real		Multi-family
Assigned Grade	industrial		Construction		estate		residential
	(dollars in thousands)
Superior	$	4,014	$	—	$	337	$	—
Very good		349		110		1,245		—
Good		5,976		8,674		62,643		4,839
Acceptable		19,197		16,249		255,751		41,113
Acceptable with care		40,579		196,228		133,190		23,172
Special mention		242		436		1,490		—
Substandard		5,391		181		4,459		—
Doubtful		—		—		—		—
Loss		—		—		—		—
	$	75,748	$	221,878	$	459,115	$	69,124

Consumer Credit
Exposure By
Internally	1‑to‑4 family
Assigned Grade	residential		HELOC
Pass	$	147,958	$	43,585
Special mention		1,246		76
Substandard		2,493		853
	$	151,697	$	44,514

Consumer Credit
Exposure Based	Loans to
On Payment	individuals &
Activity	overdrafts
Pass	$	9,727
Special mention		286
	$	10,013

Total Loans:

December 31, 2018
Commercial
Credit
Exposure By	Commercial			Commercial
Internally	and		real				Multi-family
Assigned Grade	industrial		Construction		estate		residential
	(dollars in thousands)
Superior	$	1,662	$	—	$	21	$	—
Very good		2,266		246		1,120		—
Good		5,773		12,106		47,959		5,116
Acceptable		22,332		30,897		263,017		37,832
Acceptable with care		34,626		125,788		139,484		20,296
Special mention		879		711		1,789		—
Substandard		6,643		656		4,221		215
Doubtful		—		—		—		—
Loss		—		—		—		—
	$	74,181	$	170,404	$	457,611	$	63,459

Consumer Credit
Exposure By
Internally		1‑to‑4 family
Assigned Grade	residential		HELOC
Pass	$	155,117	$	48,143
Special mention		900		88
Substandard		3,580		1,482
	$	159,597	$	49,713

Consumer Credit
Exposure Based	Loans to
On Payment		individuals &
Activity	overdrafts
Pass	$	10,891
Special mention		1,923
	$	12,814

Schedule of changes to the amount of the accretable yield on PCI loans

The following table documents changes to the amount of the PCI accretable yield as of December 31, 2019 and 2018:

	2019		2018
	(dollars in thousands)
Accretable yield, beginning of period	$	3,593	$	3,307
Additions		—		—
Accretion		(904)		(1,541)
Reclassification from nonaccretable difference		360		576
Other changes, net		142		1,251
Accretable yield, end of period	$	3,191	$	3,593

Schedule of allowance for loan losses by loan class

The following tables present a roll forward of the Company’s allowance for loan losses by loan segment for the twelve-month periods ended December 31, 2019, 2018 and 2017, respectively (in thousands):

2019

	Commercial						1 to 4				Loans to		Multi-
	and				Commercial		family				individuals &		family
Allowance for loan losses	industrial		Construction		real estate		residential		HELOC		overdrafts		residential		Total
Loans – excluding PCI
Balance, beginning of period 01/01/2019	$	762	$	1,385	$	3,024	$	1,663	$	555	$	206	$	471	$	8,066
Provision for loan losses		1,143		328		(371)		(259)		(169)		152		(52)		772
Loans charged-off		(790)		—		(10)		—		(150)		(206)		—		(1,156)
Recoveries		12		18		194		33		93		23		—		373
Balance, end of period 12/31/2019	$	1,127	$	1,731	$	2,837	$	1,437	$	329	$	175	$	419	$	8,055
PCI Loans
Balance, beginning of period 01/01/2019	$	214	$	—	$	385	$	4	$	—	$	—	$	—	$	603
Provision for loan losses		(36)		6		(371)		52		—		—		15		(334)
Loans charged-off		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—		—
Balance, end of period 12/31/2019	$	178	$	6	$	14	$	56	$	—	$	—	$	15	$	269
Total Loans
Balance, beginning of period 01/01/2019	$	976	$	1,385	$	3,409	$	1,667	$	555	$	206	$	471	$	8,669
Provision for loan losses		1,107		334		(742)		(207)		(169)		152		(37)		438
Loans charged-off		(790)		—		(10)		—		(150)		(206)		—		(1,156)
Recoveries		12		18		194		33		93		23		—		373
Balance, end of period 12/31/2019	$	1,305	$	1,737	$	2,851	$	1,493	$	329	$	175	$	434	$	8,324
Ending Balance: individually evaluated for impairment	$	403	$	—	$	—	$	10	$	—	$	—	$	—	$	413
Ending Balance: collectively evaluated for impairment	$	902	$	1,737	$	2,851	$	1,483	$	329	$	175	$	434	$	7,911
Loans:
Ending Balance: collectively evaluated for impairment non PCI loans	$	71,118	$	220,761	$	447,760	$	144,003	$	43,763	$	9,729	$	68,030	$	1,005,164
Ending Balance: collectively evaluated for impairment PCI loans	$	1,103	$	677	$	5,770	$	7,218	$	48	$	—	$	897	$	15,713
Ending Balance: individually evaluated for impairment	$	3,527	$	440	$	5,585	$	476	$	703	$	284	$	197	$	11,212
Ending Balance	$	75,748	$	221,878	$	459,115	$	151,697	$	44,514	$	10,013	$	69,124	$	1,032,089

2018

	Commercial						1 to 4				Loans to		Multi-
	and				Commercial		family				individuals &		family
Allowance for loan losses	industrial		Construction		real estate		residential		HELOC		overdrafts		residential		Total
Loans – excluding PCI
Balance, beginning of period 01/01/2018	$	742	$	1,955	$	3,304	$	1,058	$	549	$	305	$	791	$	8,704
Provision for loan losses		(23)		(576)		(326)		585		31		1		(320)		(628)
Loans charged-off		(196)		—		(2)		(12)		(68)		(191)		—		(469)
Recoveries		239		6		48		32		43		91		—		459
Balance, end of period 12/31/2018	$	762	$	1,385	$	3,024	$	1,663	$	555	$	206	$	471	$	8,066
PCI Loans
Balance, beginning of period 01/01/2018	$	65	$	—	$	66	$	—	$	—	$	—	$	—	$	131
Provision for loan losses		149		—		319		4		—		—		—		472
Loans charged-off		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—		—
Balance, end of period 12/31/2018	$	214	$	—	$	385	$	4	$	—	$	—	$	—	$	603
Total Loans
Balance, beginning of period 01/01/2018	$	807	$	1,955	$	3,370	$	1,058	$	549	$	305	$	791	$	8,835
Provision for loan losses		126		(576)		(7)		589		31		1		(320)		(156)
Loans charged-off		(196)		—		(2)		(12)		(68)		(191)		—		(469)
Recoveries		239		6		48		32		43		91		—		459
Balance, end of period 12/31/2018	$	976	$	1,385	$	3,409	$	1,667	$	555	$	206	$	471	$	8,669
Ending Balance: individually evaluated for impairment	$	51	$	14	$	—	$	22	$	—	$	—	$	—	$	87
Ending Balance: collectively evaluated for impairment	$	925	$	1,371	$	3,409	$	1,645	$	555	$	206	$	471	$	8,582
Loans:
Ending Balance: collectively evaluated for impairment non PCI loans	$	68,891	$	169,065	$	444,354	$	150,700	$	48,747	$	12,713	$	62,307	$	956,777
Ending Balance: collectively evaluated for impairment PCI loans	$	1,764	$	751	$	7,579	$	8,188	$	49	$	—	$	937	$	19,268
Ending Balance: individually evaluated for impairment	$	3,526	$	588	$	5,678	$	709	$	917	$	101	$	215	$	11,734
Ending Balance	$	74,181	$	170,404	$	457,611	$	159,597	$	49,713	$	12,814	$	63,459	$	987,779

2017

	Commercial						1 to 4				Loans to		Multi-
	and				Commercial		family				individuals &		family
Allowance for loan losses	industrial		Construction		real estate		residential		HELOC		overdrafts		residential		Total
Loans – excluding PCI
Balance, beginning of period 01/01/2017	$	1,211	$	1,301	$	3,448	$	846	$	611	$	317	$	628	$	8,362
Provision for loan losses		(607)		642		754		188		92		55		161		1,285
Loans charged-off		(73)		(17)		(914)		(22)		(179)		(101)		—		(1,306)
Recoveries		211		29		16		46		25		34		2		363
Balance, end of period 12/31/2017	$	742	$	1,955	$	3,304	$	1,058	$	549	$	305	$	791	$	8,704
PCI Loans
Balance, beginning of period 01/01/2017	$	37	$	—	$	—	$	—	$	12	$	—	$	—	$	49
Provision for loan losses		28		—		66		—		(12)		—		—		82
Loans charged-off		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—		—
Balance, end of period 12/31/2017	$	65	$	—	$	66	$	—	$	—	$	—	$	—	$	131
Total Loans
Balance, beginning of period 01/01/2017	$	1,248	$	1,301	$	3,448	$	846	$	623	$	317	$	628	$	8,411
Provision for loan losses		(579)		642		820		188		80		55		161		1,367
Loans charged-off		(73)		(17)		(914)		(22)		(179)		(101)		—		(1,306)
Recoveries		211		29		16		46		25		34		2		363
Balance, end of period 12/31/2017	$	807	$	1,955	$	3,370	$	1,058	$	549	$	305	$	791	$	8,835
Ending Balance: individually evaluated for impairment	$	50	$	—	$	—	$	11	$	—	$	—	$	—	$	61
Ending Balance: collectively evaluated for impairment	$	757	$	1,955	$	3,370	$	1,047	$	549	$	305	$	791	$	8,774
Loans:
Ending Balance: collectively evaluated for impairment non PCI loans	$	102,148	$	176,479	$	389,617	$	146,504	$	51,958	$	10,176	$	75,777	$	952,659
Ending Balance: collectively evaluated for impairment PCI loans	$	2,933	$	1,069	$	9,056	$	9,119	$	46	$	67	$	971	$	23,261
Ending Balance: individually evaluated for impairment	$	1,083	$	385	$	4,427	$	1,278	$	602	$	1	$	235	$	8,011
Ending Balance	$	106,164	$	177,933	$	403,100	$	156,901	$	52,606	$	10,244	$	76,983	$	983,931