LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

12 Months Ended

Dec. 31, 2018

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

The following presents a summary of the Company’s loans as of the dates noted (in thousands):


	December 31,		December 31,
	2018		2017
Cash, Securities and Other	$	114,165	$	131,756
Construction and Development		31,897		24,914
1-4 Family Residential		350,852		282,014
Non-Owner Occupied CRE		173,741		176,987
Owner Occupied CRE		108,480		92,742
Commercial and Industrial		113,660		104,284
Total loans		892,795		812,697
Deferred costs, net		1,171		992
Allowance for loan losses		(7,451)		(7,287)
Loans, net	$	886,515	$	806,402

Summary of aging analysis of the recorded investments in loans past due

The following presents, by class, an aging analysis of the recorded investments (excluding accrued interest receivable, deferred loan fees and deferred costs which are not material) in loans past due as of December 31, 2018 and December 31, 2017 (in thousands):


	30-59		60-89		90 or		Total				Total
	Days		Days		More Days		Loans				Recorded
December 31, 2018	Past Due		Past Due		Past Due		Past Due		Current		Investment
Cash, Securities and Other	$	331	$	—	$	11,252	$	11,583	$	102,582	$	114,165
Construction and Development		—		—		—		—		31,897		31,897
1-4 Family Residential		—		—		1,217		1,217		349,635		350,852
Non-Owner Occupied CRE		567		—		—		567		173,174		173,741
Owner Occupied CRE		—		—		—		—		108,480		108,480
Commercial and Industrial		—		—		1,735		1,735		111,925		113,660
Total	$	898	$	—	$	14,204	$	15,102	$	877,693	$	892,795


	30-59		60-89		90 or		Total				Total
	Days		Days		More Days		Loans				Recorded
December 31, 2017	Past Due		Past Due		Past Due		Past Due		Current		Investment
Cash, Securities and Other	$	50	$	99	$	—	$	149	$	131,607	$	131,756
Construction and Development		—		—		—		—		24,914		24,914
1-4 Family Residential		1,250		—		2,388		3,638		278,376		282,014
Non-Owner Occupied CRE		750		—		—		750		176,237		176,987
Owner Occupied CRE		—		—		—		—		92,742		92,742
Commercial and Industrial		1,614		—		1,835		3,449		100,835		104,284
Total	$	3,664	$	99	$	4,223	$	7,986	$	804,711	$	812,697

Schedule of recorded investment in non accrual loans by class

The following presents the recorded investment in non‑accrual loans by class as of the dates noted (in thousands):


	December 31,		December 31,
	2018		2017
Non-accrual loans
Cash, Securities and Other	$	11,252	$	—
Construction and Development		—		—
1-4 Family Residential		—		1,171
Non-Owner Occupied CRE		—		—
Owner Occupied CRE		—		—
Commercial and Industrial		1,735		1,835
Total	$	12,987	$	3,006

Summary of the unpaid principal balance of loans classified as TDRs

The following presents a summary of the unpaid principal balance of loans classified as TDRs as of the dates noted (in thousands):


	December 31,		December 31,
	2018		2017
Cash, Securities, and Other	$	11,252	$	—
Commercial and Industrial		6,583		1,835
Total	$	17,835	$	1,835
Allowance for loan associated with TDR		(940)		(722)
Net recorded investment	$	16,895	$	1,113

Summary of recorded investment in impaired loans

The following presents the Company’s recorded investment in impaired loans as of the periods presented (in thousands):


			Recorded		Recorded		Allowance		Unpaid
	Total		Investment		Investment		for		Contractual		Average		Interest
	Recorded		With No		With		Loan		Principal		Recorded		Income
December 31, 2018	Investment		Allowance		Allowance		Losses		Balance		Investment		Recognized
Cash, Securities, and Other		11,252		11,252		—		—		11,252		4,506		—
Commercial and Industrial		6,583		4,848		1,735		940		6,583		5,820		34
Total	$	17,835	$	16,100	$	1,735	$	940	$	17,835	$	10,326	$	34


			Recorded		Recorded		Allowance		Unpaid
	Total		Investment		Investment		for		Contractual		Average		Interest
	Recorded		With No		With		Loan		Principal		Recorded		Income
December 31, 2017	Investment		Allowance		Allowance		Losses		Balance		Investment		Recognized
Commercial and Industrial	$	1,835	$	—	$	1,835	$	722	$	1,835	$	1,066	$	—
Total	$	1,835	$	—	$	1,835	$	722	$	1,835	$	1,066	$	—

Schedule of activity in the Company’s allowance for loan losses by portfolio class

Allocation of a portion of the allowance for loan losses to one category of loans does not preclude its availability to absorb losses in other categories. The following presents the activity in the Company’s allowance for loan losses by portfolio class for the periods presented (in thousands):


	Cash,		Construction		1-4		Non-Owner		Owner		Commercial
	Securities		and		Family		Occupied		Occupied		and
	and Other		Development		Residential		CRE		CRE		Industrial		Total
Changes in allowance for loan losses for the year ended December 31, 2018
Beginning balance	$	1,066	$	202	$	2,283	$	1,433	$	751	$	1,552	$	7,287
Provision for (recovery of) credit losses		(286)		30		269		(169)		38		298		180
Charge-offs		(16)		—		—		—		—		—		(16)
Recoveries		—		—		—		—		—		—		—
Ending balance	$	764	$	232	$	2,552	$	1,264	$	789	$	1,850	$	7,451

Allowance for loan losses at December 31, 2018 allocated to loans evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	940	$	940
Collectively		764		232		2,552		1,264		789		910		6,511
Ending balance	$	764	$	232	$	2,552	$	1,264	$	789	$	1,850	$	7,451

Loans at December 31, 2018, evaluated for impairment:
Individually	$	11,252	$	—	$	—	$	—	$	—	$	6,583	$	17,835
Collectively		102,913		31,897		350,852		173,741		108,480		107,077		874,960
Ending balance	$	114,165	$	31,897	$	350,852	$	173,741	$	108,480	$	113,660	$	892,795


	Cash,		Construction		1-4		Non-Owner		Owner		Commercial
	Securities		and		Family		Occupied		Occupied		and
	and Other		Development		Residential		CRE		CRE		Industrial		Total
Changes in allowance for loan losses for the year ended December 31, 2017
Beginning balance	$	846	$	301	$	1,833	$	1,153	$	476	$	1,869	$	6,478
Provision for (recovery of) credit losses		210		(99)		439		280		275		(317)		788
Charge-offs		—		—		—		—		—		—		—
Recoveries		10		—		11		—		—		—		21
Ending balance	$	1,066	$	202	$	2,283	$	1,433	$	751	$	1,552	$	7,287

Allowance for loan losses at December 31, 2017 allocated to loans evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	722	$	722
Collectively		1,066		202		2,283		1,433		751		830		6,565
Ending balance	$	1,066	$	202	$	2,283	$	1,433	$	751	$	1,552	$	7,287

Loans at December 31, 2017, evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	1,835	$	1,835
Collectively		131,756		24,914		282,014		176,987		92,742		102,449		810,862
Ending balance	$	131,756	$	24,914	$	282,014	$	176,987	$	92,742	$	104,284	$	812,697

Summary of recorded investment in the Company’s loans by class and by credit quality indicator

Loans not meeting any of the three criteria above are considered to be pass‑rated loans. The following presents, by class and by credit quality indicator, the recorded investment in the Company’s loans as of December 31, 2018 and December 31, 2017 (in thousands):


			Special
December 31, 2018	Pass		Mention		Substandard			Total
Cash, Securities and Other	$	102,913	$	—	$	11,252	$	114,165
Construction and Development		31,897		—		—		31,897
1-4 Family Residential		349,635		—		1,217		350,852
Non-Owner Occupied CRE		165,164		8,117		460		173,741
Owner Occupied CRE		108,480		—		—		108,480
Commercial and Industrial		100,929		—		12,731		113,660
Total	$	859,018	$	8,117	$	25,660	$	892,795


			Special
December 31, 2017	Pass		Mention		Substandard			Total
Cash, Securities and Other	$	131,756	$	—	$	—	$	131,756
Construction and Development		23,756		1,158		—		24,914
1-4 Family Residential		279,424		—		2,590		282,014
Non-Owner Occupied CRE		174,794		—		2,193		176,987
Owner Occupied CRE		92,742		—		—		92,742
Commercial and Industrial		93,624		114		10,546		104,284
Total	$	796,096	$	1,272	$	15,329	$	812,697