LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2019

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

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


	March 31,		December 31,
	2019		2018
Cash, Securities and Other	$	130,641	$	114,165
Construction and Development		37,128		31,897
1-4 Family Residential		360,607		350,852
Non-Owner Occupied CRE		172,014		173,741
Owner Occupied CRE		108,873		108,480
Commercial and Industrial		120,602		113,660
Total loans		929,865		892,795
Deferred costs, net		1,325		1,171
Allowance for loan losses		(7,645)		(7,451)
Loans, net	$	923,545	$	886,515

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 March 31, 2019 and December 31, 2018 (in thousands):


	30-59		60-89		90 or		Total				Total
	Days		Days		More Days		Loans				Recorded
March 31, 2019	Past Due		Past Due		Past Due		Past Due		Current		Investment
Cash, Securities and Other	$	92	$	—	$	—	$	92	$	130,549	$	130,641
Construction and Development		—		—		—		—		37,128		37,128
1-4 Family Residential		—		—		1,213		1,213		359,394		360,607
Non-Owner Occupied CRE		—		—		—		—		172,014		172,014
Owner Occupied CRE		—		—		—		—		108,873		108,873
Commercial and Industrial		—		—		—		—		120,602		120,602
Total	$	92	$	—	$	1,213	$	1,305	$	928,560	$	929,865


	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

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):


	March 31,		December 31,
	2019		2018
Non-accrual loans
Cash, Securities and Other	$	10,977	$	11,252
Construction and Development		—		—
1-4 Family Residential		—		—
Non-Owner Occupied CRE		—		—
Owner Occupied CRE		—		—
Commercial and Industrial		1,435		1,735
Total	$	12,412	$	12,987

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):


	March 31,		December 31,
	2019		2018
Cash, Securities, and Other	$	10,977	$	11,252
Commercial and Industrial		6,523		6,583
Total	$	17,500	$	17,835
Allowance for loan associated with TDR		(940)		(940)
Net recorded investment	$	16,560	$	16,895

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
March 31, 2019	Investment		Allowance		Allowance		Losses		Balance		Investment		Recognized
Cash, Securities, and Other		10,977		10,977		—		—		10,977		11,114		—
Commercial and Industrial		6,523		5,088		1,435		940		6,523		6,553		120
Total	$	17,500	$	16,065	$	1,435	$	940	$	17,500	$	17,667	$	120


			Recorded		Recorded		Allowance		Unpaid
	Total		Investment		Investment		for		Contractual		Average		Interest
	Recorded		With No		With		Loan		Principal		Recorded		Income
March 31, 2018	Investment		Allowance		Allowance		Losses		Balance		Investment		Recognized
Commercial and Industrial	$	1,835	$	—	$	1,835	$	722	$	1,835	$	1,835	$	—
Total	$	1,835	$	—	$	1,835	$	722	$	1,835	$	1,835	$	—


			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

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 three months ended March 31, 2019
Beginning balance	$	764	$	232	$	2,552	$	1,264	$	789	$	1,850	$	7,451
Provision for (recovery of) credit losses		113		34		36		(29)		(9)		49		194
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—
Ending balance	$	877	$	266	$	2,588	$	1,235	$	780	$	1,899	$	7,645

Allowance for loan losses at March 31, 2019 allocated to loans evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	940	$	940
Collectively		877		266		2,588		1,235		780		959		6,705
Ending balance	$	877	$	266	$	2,588	$	1,235	$	780	$	1,899	$	7,645

Loans at March 31, 2019, evaluated for impairment:
Individually	$	10,977	$	—	$	—	$	—	$	—	$	6,523	$	17,500
Collectively		119,664		37,128		360,607		172,014		108,873		114,079		912,365
Ending balance	$	130,641	$	37,128	$	360,607	$	172,014	$	108,873	$	120,602	$	929,865


	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 three months ended March 31, 2018
Beginning balance	$	1,066	$	202	$	2,283	$	1,433	$	751	$	1,552	$	7,287
Provision for (recovery of) credit losses		(97)		26		51		(120)		(27)		(20)		(187)
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—
Ending balance	$	969	$	228	$	2,334	$	1,313	$	724	$	1,532	$	7,100

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

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 March 31, 2019 and December 31, 2018 (in thousands):


			Special
March 31, 2019	Pass		Mention		Substandard			Total
Cash, Securities and Other	$	119,664	$	—	$	10,977	$	130,641
Construction and Development		37,128		—		—		37,128
1-4 Family Residential		359,394		—		1,213		360,607
Non-Owner Occupied CRE		162,294		9,260		460		172,014
Owner Occupied CRE		108,873		—		—		108,873
Commercial and Industrial		108,082		—		12,520		120,602
Total	$	895,435	$	9,260	$	25,170	$	929,865


			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