LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2020

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,
	2020		2019
Cash, Securities and Other	$	147,157	$	146,701
Construction and Development		25,461		28,120
1-4 Family Residential		412,306		400,134
Non-Owner Occupied CRE		192,350		165,179
Owner Occupied CRE		121,138		127,968
Commercial and Industrial		144,066		128,457
Total loans		1,042,478		996,559
Deferred costs, net		1,473		1,448
Allowance for loan losses		(8,242)		(7,875)
Loans, net	$	1,035,709	$	990,132

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, 2020 and December 31, 2019 (in thousands):


	30-59		60-89		90 or		Total				Total
	Days		Days		More Days		Loans				Recorded
March 31, 2020	Past Due		Past Due		Past Due		Past Due		Current		Investment
Cash, Securities and Other	$	—	$	31	$	1,493	$	1,524	$	145,633	$	147,157
Construction and Development		—		—		—		—		25,461		25,461
1-4 Family Residential		3,162		202		—		3,364		408,942		412,306
Non-Owner Occupied CRE		—		—		—		—		192,350		192,350
Owner Occupied CRE		—		—		—		—		121,138		121,138
Commercial and Industrial		984		—		4,138		5,122		138,944		144,066
Total	$	4,146	$	233	$	5,631	$	10,010	$	1,032,468	$	1,042,478


	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

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,
	2020		2019
Cash, Securities and Other	$	1,493	$	2,803
Construction and Development		—		—
1-4 Family Residential		—		—
Non-Owner Occupied CRE		—		—
Owner Occupied CRE		—		—
Commercial and Industrial		4,138		4,412
Total	$	5,631	$	7,215

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 by loan type and delinquency status as of the dates noted (in thousands):


	March 31,		December 31,
	2020		2019
Accruing
Commercial and Industrial	$	4,820	$	5,055
Non-accrual
Cash, Securities, and Other		1,493		2,803
Commercial and Industrial		4,138		4,412

Allowance for loan associated with TDR		(683)		(833)
Net recorded investment	$	9,768	$	11,437

Summary of impaired loans by portfolio and related valuation allowance

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


	March 31, 2020						December 31, 2019
			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	$	4,138	$	4,138	$	683	$	4,412	$	4,412	$	833
Total	$	4,138	$	4,138	$	683	$	4,412	$	4,412	$	833

Impaired loans with no related valuation allowance:
Cash, Securities, and Other	$	1,493	$	1,493	$	—	$	2,803	$	2,803	$	—
Commercial and Industrial		4,820		4,820		—		5,055		5,055		—
Total	$	6,313	$	6,313	$	—	$	7,858	$	7,858	$	—

Total impaired loans:
Cash, Securities, and Other	$	1,493	$	1,493	$	—	$	2,803	$	2,803	$	—
Commercial and Industrial		8,958		8,958		683		9,467		9,467		833
Total	$	10,451	$	10,451	$	683	$	12,270	$	12,270	$	833

The recorded investment in loans in the previous tables excludes accrued interest and deferred loan fees and costs which are not material. Interest income, if any, was recognized on the cash basis on non-accrual loans.

The average balance of impaired loans and interest income recognized on impaired loans during the three months ended March 31, 2020 and 2019 are included in the table below (in thousands):


	The three months ended March 31, 2020
	2020				2019
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans with a valuation allowance:
Commercial and Industrial	$	4,275	$	—	$	1,585	$	—
Total	$	4,275	$	—	$	1,585	$	—

Impaired loans with no related valuation allowance:
Cash, Securities, and Other	$	2,148	$	—	$	11,114	$	—
Commercial and Industrial		4,937		81		4,968		120
Total	$	7,085	$	81	$	16,082	$	120

Total impaired loans:
Cash, Securities, and Other	$	2,148	$	—	$	11,114	$	—
Commercial and Industrial		9,212		81		6,553		120
Total	$	11,360	$	81	$	17,667	$	120

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

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, 2020
Beginning balance	$	1,058	$	200	$	2,850	$	1,176	$	911	$	1,680	$	7,875
Provision for (recovery of) loan losses		34		(14)		158		227		(27)		(11)		367
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—
Ending balance	$	1,092	$	186	$	3,008	$	1,403	$	884	$	1,669	$	8,242

Allowance for loan losses at March 31, 2020 allocated to loans evaluated for impairment:
Individually	$	—	$	—	$	—	$	—	$	—	$	683	$	683
Collectively		1,092		186		3,008		1,403		884		986		7,559
Ending balance	$	1,092	$	186	$	3,008	$	1,403	$	884	$	1,669	$	8,242

Loans at March 31, 2020, evaluated for impairment:
Individually	$	1,493	$	—	$	—	$	—	$	—	$	8,958	$	10,451
Collectively		145,664		25,461		412,306		192,350		121,138		135,108		1,032,027
Ending balance	$	147,157	$	25,461	$	412,306	$	192,350	$	121,138	$	144,066	$	1,042,478


	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) loan 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 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

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


			Special
March 31, 2020	Pass		Mention		Substandard			Total
Cash, Securities and Other	$	145,444	$	—	$	1,713	$	147,157
Construction and Development		25,461		—		—		25,461
1-4 Family Residential		406,450		—		5,856		412,306
Non-Owner Occupied CRE		191,205		1,145		—		192,350
Owner Occupied CRE		121,138		—		—		121,138
Commercial and Industrial		130,377		—		13,689		144,066
Total	$	1,020,075	$	1,145	$	21,258	$	1,042,478


			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