LOANS (Tables)

9 Months Ended

Sep. 30, 2018

The portfolios of loans receivable at September 30, 2018 and December 31, 2017, consist of the following:



	September 30, 2018		December 31, 2017
	Amount		Amount
	(amounts in thousands)
Commercial and Industrial	$	37,689	$	38,972
Construction	134,436		95,625
Real Estate Mortgage:
Commercial – Owner Occupied	130,491		126,250
Commercial – Non-owner Occupied	291,700		270,472
Residential – 1 to 4 Family	518,561		416,317
Residential – Multifamily	52,038		47,832
Consumer	14,934		16,249
Total Loans	$	1,179,849	$	1,011,717

Age Analysis of Past Due Loans by Class

An age analysis of past due loans by class at September 30, 2018 and December 31, 2017 as follows:



September 30, 2018	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and Not Accruing		Total Past Due		Current		Total Loans		Loans > 90 Days and Accruing
	(amounts in thousands)
Commercial and Industrial	$	—	$	128	$	14	$	142	$	37,547	$	37,689	$	—
Construction	—		—		1,365		1,365		133,071		134,436		—
Real Estate Mortgage:
Commercial – Owner Occupied	—		—		—		—		130,491		130,491		—
Commercial – Non-owner Occupied	—		—		290		290		291,410		291,700		—
Residential – 1 to 4 Family			928		1,417		2,345		516,216		518,561		—
Residential – Multifamily	—		—		—		—		52,038		52,038		—
Consumer	134		—		—		134		14,800		14,934		—
Total Loans	$	134	$	1,056	$	3,086	$	4,276	$	1,175,573	$	1,179,849	$	—



December 31, 2017	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and Not Accruing		Total Past Due		Current		Total Loans		Loans > 90 Days and Accruing
	(amounts in thousands)
Commercial and Industrial	$	—	$	—	$	17	$	17	$	38,955	$	38,972	$	—
Construction	—		—		1,392		1,392		94,233		95,625		—
Real Estate Mortgage:
Commercial – Owner Occupied	—		—		155		155		126,095		126,250		—
Commercial – Non-owner Occupied	—		—		597		597		269,875		270,472		—
Residential – 1 to 4 Family	—		352		2,292		2,644		413,673		416,317		—
Residential – Multifamily	—		—		—		—		47,832		47,832		—
Consumer	92		—		81		173		16,076		16,249		—
Total Loans	$	92	$	352	$	4,534	$	4,978	$	1,006,739	$	1,011,717	$	—

Analysis of Allowance for Loan Losses

The following tables present the information regarding the allowance for loan and lease losses and associated loan data:



						Real Estate Mortgage
	Commercial and Industrial		Construction			Commercial Owner Occupied			Commercial Non-owner Occupied			Residential 1 to 4 Family		Residential Multifamily		Consumer			Total
Allowance for loan losses	(amounts in thousands)
Three months ended Sept.30, 2018
June 30, 2018	$	539	$	1,998		$	1,961		$	5,260		$	6,666	$	619	$	230		17,273
Charge-offs	—		—			—			—			—		—		(1		)	(1		)
Recoveries	10		—			12			6			18		—		—			46
Provisions	298		30			(12		)	(314		)	575		32		(9		)	600
Ending Balance at Sept. 30, 2018	$	847	$	2,028		$	1,961		$	4,952		$	7,259	$	651	$	220		$	17,918

Allowance for loan losses
Nine months ended Sept. 30, 2018
December 31, 2017	$	684	$	2,068		$	2,017		$	4,630		$	6,277	$	627	$	230		16,533
Charge-offs	—		(27		)	—			(49		)	—		—		(19		)	(95		)
Recoveries	40		—			153			61			26		—		—			280
Provisions	123		(13		)	(209		)	310			956		24		9			1,200
Ending Balance at Sept. 30, 2018	$	847	$	2,028		$	1,961		$	4,952		$	7,259	$	651	$	220		$	17,918

Allowance for loan losses
Individually evaluated for impairment	$	14	$	71		$	49		$	194		$	14	$	—	$	—		$	342
Collectively evaluated for impairment	833		1,957			1,912			4,758			7,245		651		220			17,576
Balance at Sept. 30, 2018	$	847	$	2,028		$	1,961		$	4,952		$	7,259	$	651	$	220		$	17,918

Loans
Individually evaluated for impairment	$	14	$	5,690		$	3,320		$	11,716		$	2,294	$	—	$	—		$	23,034
Collectively evaluated for impairment	37,675		128,746			127,171			279,984			516,267		52,038		14,934			1,156,815
Balance at Sept. 30, 2018	$	37,689	$	134,436		$	130,491		$	291,700		$	518,561	$	52,038	$	14,934		$	1,179,849



							Real Estate Mortgage
	Commercial and Industrial			Construction			Commercial Owner Occupied			Commercial Non-owner Occupied			Residential 1 to 4 Family			Residential Multifamily			Consumer			Total
Allowance for loan losses	(amounts in thousands)
Three months ended Sept. 30, 2017
June 30, 2017	$	1,202		$	2,258		$	1,835		$	4,915		$	5,422		$	699		$	228		16,559
Charge-offs	—			(687		)	—			(621		)	—			(50		)	—			(1,358		)
Recoveries	3			—			25			102			10			—			—			140
Provisions	(549		)	454			(33		)	225			386			18			(1		)	500
Ending Balance at Sept. 30, 2017	$	656		$	2,025		$	1,827		$	4,621		$	5,818		$	667		$	227		$	15,841

Allowance for loan losses
Nine months ended Sept. 30, 2017
December 31, 2016	$	1,188		$	2,764		$	2,082		$	3,889		$4,916			$	505		$	236		$	15,580
Charge-offs	(134		)	(687		)	(430		)	(622		)	(118		)	(50		)	—			(2,041		)
Recoveries	45			—			94			148			15			—			—			302
Provisions	(443		)	(52		)	81			1,206			1,005			212			(9		)	2,000
Ending Balance at Sept. 30, 2017	$	656		$	2,025		$	1,827		$	4,621		$	5,818		$	667		$	227		$	15,841

Allowance for loan losses
Individually evaluated for impairment	$	—		$	124		$	55		$	208		$	15		$	—		$	—		$	402
Collectively evaluated for impairment	656			1,901			1,772			4,413			5,803			667			227			15,439
Balance at Sept. 30, 2017	$	656		$	2,025		$	1,827		$	4,621		$	5,818		$	667		$	227		$	15,841

Loans
Individually evaluated for impairment	$	18		$	6,146		$	3,881		$	12,523		$	4,339		$	—		$	17		$	26,924
Collectively evaluated for impairment	28,028			81,679			110,265			262,791			377,128			50,532			15,999			926,422
Balance at Sept. 30, 2017	$	28,046		$	87,825		$	114,146		$	275,314		$	381,467		$	50,532		$	16,016		$	953,346

Impaired Loans

The following tables provide further detail on impaired loans and the associated ALLL at September 30, 2018 and December 31, 2017:



September 30, 2018	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(amounts in thousands)
With no related allowance recorded:
Commercial and Industrial	$	—	$	—	$	—
Construction	—		—		—
Real Estate Mortgage:
Commercial – Owner Occupied	—		—		—
Commercial – Non-owner Occupied	290		290		—
Residential – 1 to 4 Family	1,417		1,417		—
Residential – Multifamily	—		—		—
Consumer	—		—		—
	1,707		1,707		—
With an allowance recorded:
Commercial and Industrial	14		19		14
Construction	5,690		10,180		71
Real Estate Mortgage:
Commercial – Owner Occupied	3,320		3,350		49
Commercial – Non-owner Occupied	11,426		11,426		194
Residential – 1 to 4 Family	877		877		14
Residential – Multifamily	—		—		—
Consumer	—		—		—
	21,327		25,852		342
Total:
Commercial and Industrial	14		19		14
Construction	5,690		10,180		71
Real Estate Mortgage:
Commercial – Owner Occupied	3,320		3,350		49
Commercial – Non-owner Occupied	11,716		11,716		194
Residential – 1 to 4 Family	2,294		2,294		14
Residential – Multifamily	—		—		—
Consumer	—		—		—
	$	23,034	$	27,559	$	342



December 31, 2017	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(amounts in thousands)
With no related allowance recorded:
Commercial and Industrial	$	17	$	21	$	—
Construction	1,365		5,856		—
Real Estate Mortgage:
Commercial – Owner Occupied	155		155		—
Commercial – Non-owner Occupied	277		277		—
Residential – 1 to 4 Family	2,292		2,354		—
Residential – Multifamily	—		—		—
Consumer	81		81		—
	4,187		8,744		—
With an allowance recorded:
Commercial and Industrial	—		—		—
Construction	4,587		4,684		135
Real Estate Mortgage:
Commercial – Owner Occupied	3,635		3,665		58
Commercial – Non-owner Occupied	12,124		13,941		250
Residential – 1 to 4 Family	919		919		15
Residential – Multifamily	—		—		—
Consumer	—		—		—
	21,265		23,209		458
Total:
Commercial and Industrial	17		21		—
Construction	5,952		10,540		135
Real Estate Mortgage:
Commercial – Owner Occupied	3,790		3,820		58
Commercial – Non-owner Occupied	12,401		14,218		250
Residential – 1 to 4 Family	3,211		3,273		15
Residential – Multifamily	—		—		—
Consumer	81		81		—
	$	25,452	$	31,953	$	458

The following table presents by loan portfolio class, the average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2018 and 2017:



	Three Months Ended September 30,
	2018				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(amounts in thousands)
Commercial and Industrial	$	15	$	—	$	22	$	—
Construction	5,735		48		10,760		51
Real Estate Mortgage:
Commercial – Owner Occupied	3,465		41		3,955		49
Commercial – Non-owner Occupied	11,773		155		14,392		153
Residential – 1 to 4 Family	2,302		10		4,410		20
Residential – Multifamily	—		—		—		—
Consumer	—		—		17		—
Total	$	23,290	$	254	$	33,556	$	273



	Nine Months Ended September 30,
	2018				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(amounts in thousands)
Commercial and Industrial	$	16	$	1	$	23	$	1
Construction	5,830		145		8,863		152
Real Estate Mortgage:
Commercial – Owner Occupied	3,605		137		4,018		146
Commercial – Non-owner Occupied	11,988		451		13,733		463
Residential – 1 to 4 Family	2,751		37		4,420		63
Residential – Multifamily	—		—		—		—
Consumer	20		—		18		1
Total	$	24,210	$	771	$	31,075	$	826

Analysis of Credit Risk Profile by Internally Assigned Grades

An analysis of the credit risk profile by internally assigned grades as of September 30, 2018 and December 31, 2017 is as follows:



At September 30, 2018	Pass		OAEM		Substandard		Doubtful		Total
	(amounts in thousands)
Commercial and Industrial	$	37,610	$	79	$	—	$	—	$	37,689
Construction	121,078		5,447		7,911		—		134,436
Real Estate Mortgage:
Commercial – Owner Occupied	128,162		2,329		—		—		130,491
Commercial – Non-owner Occupied	291,275		—		425		—		291,700
Residential – 1 to 4 Family	516,255		764		1,542		—		518,561
Residential – Multifamily	52,038		—		—		—		52,038
Consumer	14,934		—		—		—		14,934
Total	$	1,161,352	$	8,619	$	9,878	$	—	$	1,179,849



At December 31, 2017	Pass		OAEM		Substandard		Doubtful		Total
	(amounts in thousands)
Commercial and Industrial	$	38,875	$	97	$	—	$	—	$	38,972
Construction	82,351		5,056		8,218		—		95,625
Real Estate Mortgage:
Commercial – Owner Occupied	123,491		2,604		155		—		126,250
Commercial – Non-owner Occupied	269,736		—		736		—		270,472
Residential – 1 to 4 Family	413,327		560		2,430		—		416,317
Residential – Multifamily	47,832		—		—		—		47,832
Consumer	16,168		—		81		—		16,249
Total	$	991,780	$	8,317	$	11,620	$	—	$	1,011,717