LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

12 Months Ended

Dec. 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):


	December 31,		December 31,
	2019		2018
Cash, Securities and Other	$	146,701	$	114,165
Construction and Development		28,120		31,897
1-4 Family Residential		400,134		350,852
Non-Owner Occupied CRE		165,179		173,741
Owner Occupied CRE		127,968		108,480
Commercial and Industrial		128,457		113,660
Total loans		996,559		892,795
Deferred costs, net		1,448		1,171
Allowance for loan losses		(7,875)		(7,451)
Loans, net	$	990,132	$	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 December 31, 2019 and December 31, 2018 (in thousands):


	30-59		60-89		90 or		Total				Total
	Days		Days		More Days		Loans				Recorded
December 31, 2019	Past Due		Past Due		Past Due		Past Due		Current		Investment
Cash, Securities and Other	$	525	$	—	$	—	$	525	$	146,176	$	146,701
Construction and Development		—		—		—		—		28,120		28,120
1-4 Family Residential		5,688		—		—		5,688		394,446		400,134
Non-Owner Occupied CRE		—		—		—		—		165,179		165,179
Owner Occupied CRE		—		—		—		—		127,968		127,968
Commercial and Industrial		—		3,110		907		4,017		124,440		128,457
Total	$	6,213	$	3,110	$	907	$	10,230	$	986,329	$	996,559


	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):


	December 31,		December 31,
	2019		2018
Cash, Securities and Other	$	2,803	$	11,252
Construction and Development		—		—
1-4 Family Residential		—		—
Non-Owner Occupied CRE		—		—
Owner Occupied CRE		—		—
Commercial and Industrial		4,412		1,735
Total	$	7,215	$	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):


	December 31,		December 31,
	2019		2018
Accruing
Commercial and Industrial	$	5,055	$	4,848
Non-accrual
Cash, Securities, and Other		2,803		11,252
Commercial and Industrial		4,412		1,735

Allowance for loan associated with TDR		(833)		(940)
Net recorded investment	$	11,437	$	16,895

Summary of impaired loans by portfolio and related valuation allowance

impaired loans.

The following table presents impaired loans by portfolio and related valuation allowance as of the periods presented (in thousands):


	December 31, 2019						December 31, 2018
			Unpaid		Allowance				Unpaid		Allowance
	Total		Contractual		for		Total		Contractual		for
	Recorded		Principal		Loan		Recorded		Principal		Loan
	Investment		Balance		Losses		Investment		Balance		Losses
Impaired loans with a valuation allowance:
Commercial and Industrial	$	4,412	$	4,412	$	833	$	1,735	$	1,735	$	940
Total	$	4,412	$	4,412	$	833	$	1,735	$	1,735	$	940

Impaired loans with no related valuation allowance:
Cash, Securities, and Other	$	2,803	$	2,803	$	—	$	11,252	$	11,252	$	—
Commercial and Industrial		5,055		5,055		—		4,848		4,848		—
Total	$	7,858	$	7,858	$	—	$	16,100	$	16,100	$	—

Total impaired loans:
Cash, Securities, and Other	$	2,803	$	2,803	$	—	$	11,252	$	11,252	$	—
Commercial and Industrial		9,467		9,467		833		6,583		6,583		940
Total	$	12,270	$	12,270	$	833	$	17,835	$	17,835	$	940

The average balance of impaired loans and interest income recognized on impaired loans during the years ended December 31, 2019 and 2018 are included in the table below (in thousands):


	Year Ended December 31,
	2019				2018
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans with a valuation allowance:
Commercial and Industrial	$	1,686	$	—	$	922	$	—

Impaired loans with no related valuation allowance:
Cash, Securities, and Other	$	6,217	$	—	$	4,506	$	—
Commercial and Industrial		4,499		427		970		34
Total	$	10,716	$	427	$	5,476	$	34

Total impaired loans:
Cash, Securities, and Other	$	6,217	$	—	$	4,506	$	—
Commercial and Industrial		6,185		427		1,892		34
Total	$	12,402	$	427	$	6,398	$	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 year ended December 31, 2019
Beginning balance	$	764	$	232	$	2,552	$	1,264	$	789	$	1,850	$	7,451
Provision for (recovery of) loan losses		532		(32)		298		(88)		122		(170)		662
Charge-offs		(248)		—		—		—		—		—		(248)
Recoveries		10		—		—		—		—		—		10
Ending balance	$	1,058	$	200	$	2,850	$	1,176	$	911	$	1,680	$	7,875

Allowance for loan losses at December 31, 2019 allocated to loans evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	833	$	833
Collectively		1,058		200		2,850		1,176		911		847		7,042
Ending balance	$	1,058	$	200	$	2,850	$	1,176	$	911	$	1,680	$	7,875

Loans at December 31, 2019, evaluated for impairment:
Individually	$	2,803	$	—	$	—	$	—	$	—	$	9,467	$	12,270
Collectively		143,898		28,120		400,134		165,179		127,968		118,990		984,289
Ending balance	$	146,701	$	28,120	$	400,134	$	165,179	$	127,968	$	128,457	$	996,559


	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) loan 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

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


			Special
December 31, 2019	Pass		Mention		Substandard			Total
Cash, Securities and Other	$	143,898	$	—	$	2,803	$	146,701
Construction and Development		28,120		—		—		28,120
1-4 Family Residential		395,224		—		4,910		400,134
Non-Owner Occupied CRE		164,021		1,158		—		165,179
Owner Occupied CRE		127,968		—		—		127,968
Commercial and Industrial		114,241		—		14,216		128,457
Total	$	973,472	$	1,158	$	21,929	$	996,559


			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