XML 29 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
Loans Receivable And Credit Quality
 6 Months Ended
Jun. 30, 2017
Loans Receivable And Credit Quality [Abstract]  
Loans Receivable And Credit Quality

Note 11 – Loans Receivable and Credit Quality



The following table presents the composition of loans receivable at June 30, 2017 and December 31, 2016, respectively:





 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



June 30, 2017

 

December 31, 2016



 

 

Percentage of

 

 

 

Percentage of



Balance

 

total Loans

 

Balance

 

total Loans



 

 

 

 

 

 

 

 

 



 

(Dollars in Thousands)



 

 

 

 

 

 

 

 

 

Commercial real estate

$

 328,145 

 

 39.58% 

 

$

 321,730 

 

 40.27% 

Commercial construction

 

 38,597 

 

 4.66% 

 

 

 28,606 

 

 3.58% 

Commercial

 

 39,326 

 

 4.74% 

 

 

 39,045 

 

 4.89% 

Residential real estate

 

 422,056 

 

 50.91% 

 

 

 408,872 

 

 51.17% 

Consumer

 

 944 

 

 0.11% 

 

 

 718 

 

 0.09% 

Total loans

 

 829,068 

 

 100.00% 

 

 

 798,971 

 

 100.00% 

Unearned origination fees

 

 255 

 

 

 

 

 144 

 

 

Allowance for loan losses

 

 (6,761)

 

 

 

 

 (6,517)

 

 



$

 822,562 

 

 

 

$

 792,598 

 

 





The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weaknesses), substandard (well defined weaknesses) and doubtful (full collection unlikely) within the Company's internal risk rating system as of June 30, 2017 and December 31, 2016, respectively:





 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Pass

 

Special Mention

 

Substandard

 

Doubtful

 

Total



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 June 30, 2017

 

(In Thousands)

Commercial real estate

$

 322,564 

 

$

 -

 

$

 5,581 

 

$

 -

 

$

 328,145 

Commercial construction

 

 38,282 

 

 

 -

 

 

 315 

 

 

 -

 

 

 38,597 

Commercial

 

 39,326 

 

 

 -

 

 

 -

 

 

 -

 

 

 39,326 

Residential real estate

 

 421,076 

 

 

 -

 

 

 980 

 

 

 -

 

 

 422,056 

Consumer

 

 944 

 

 

 -

 

 

 -

 

 

 -

 

 

 944 

             Total

$

 822,192 

 

$

 -

 

$

 6,876 

 

$

 -

 

$

 829,068 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

$

 315,579 

 

$

 20 

 

$

 6,131 

 

$

 -

 

$

 321,730 

Commercial construction

 

 28,291 

 

 

 -

 

 

 315 

 

 

 -

 

 

 28,606 

Commercial

 

 38,916 

 

 

 29 

 

 

 100 

 

 

 -

 

 

 39,045 

Residential real estate

 

 407,787 

 

 

 -

 

 

 1,085 

 

 

 -

 

 

 408,872 

Consumer

 

 718 

 

 

 -

 

 

 -

 

 

 -

 

 

 718 

             Total

$

 791,291 

 

$

 49 

 

$

 7,631 

 

$

 -

 

$

 798,971 





The following table summarizes information in regards to impaired loans by loan portfolio class as of June 30, 2017 and December 31, 2016, respectively:



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

Quarter to Date

 

Year to Date

 



 

Recorded Investment

 

Unpaid Principal Balance

 

Related Allowance

 

Average Recorded Investment

 

Interest Income Recognized

 

Average Recorded Investment

 

Interest Income Recognized

 

 June 30, 2017

 

 

(In Thousands)

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Commercial real estate

 

$

 5,581 

 

$

 5,600 

 

 

 

 

$

 6,655 

 

$

 51 

 

$

 7,156 

 

$

 112 

 

   Commercial construction

 

 

 315 

 

 

 315 

 

 

 

 

 

 315 

 

 

 2 

 

 

 315 

 

 

 5 

 

   Commercial

 

 

 -

 

 

 -

 

 

 

 

 

 50 

 

 

 -

 

 

 67 

 

 

 -

 

   Residential real estate

 

 

 980 

 

 

 1,179 

 

 

 

 

 

 1,204 

 

 

 (2)

 

 

 1,308 

 

 

 3 

 

   Consumer

 

 

 -

 

 

 -

 

 

 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Commercial real estate

 

$

 1,992 

 

$

 2,256 

 

$

 28 

 

$

 996 

 

$

 10 

 

$

 664 

 

$

 10 

 

   Commercial construction

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

   Commercial

 

 

 247 

 

 

 247 

 

 

 41 

 

 

 248 

 

 

 3 

 

 

 258 

 

 

 5 

 

   Residential real estate

 

 

 1,219 

 

 

 1,219 

 

 

 244 

 

 

 1,010 

 

 

 8 

 

 

 943 

 

 

 9 

 

   Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Commercial real estate

 

$

 7,573 

 

$

 7,856 

 

$

 28 

 

$

 7,651 

 

$

 61 

 

$

 7,820 

 

$

 122 

 

   Commercial construction

 

 

 315 

 

 

 315 

 

 

 -

 

 

 315 

 

 

 2 

 

 

 315 

 

 

 5 

 

   Commercial

 

 

 247 

 

 

 247 

 

 

 41 

 

 

 298 

 

 

 3 

 

 

 325 

 

 

 5 

 

   Residential real estate

 

 

 2,199 

 

 

 2,398 

 

 

 244 

 

 

 2,214 

 

 

 6 

 

 

 2,251 

 

 

 12 

 

   Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 



 

$

 10,334 

 

$

 10,816 

 

$

 313 

 

$

 10,478 

 

$

 72 

 

$

 10,711 

 

$

 144 

 

 December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Commercial real estate

 

$

 8,159 

 

$

 8,463 

 

 

 

 

 

 

 

 

 

 

$

 5,924 

 

$

 255 

 

   Commercial construction

 

 

 315 

 

 

 315 

 

 

 

 

 

 

 

 

 

 

 

 565 

 

 

 19 

 

   Commercial

 

 

 100 

 

 

 160 

 

 

 

 

 

 

 

 

 

 

 

 50 

 

 

 2 

 

   Residential real estate

 

 

 1,516 

 

 

 1,723 

 

 

 

 

 

 

 

 

 

 

 

 1,050 

 

 

 23 

 

   Consumer

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 -

 

 

 -

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Commercial real estate

 

$

 -

 

$

 -

 

$

 -

 

 

 

 

 

 

 

$

 -

 

$

 -

 

   Commercial construction

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 -

 

   Commercial

 

 

 279 

 

 

 279 

 

 

 64 

 

 

 

 

 

 

 

 

 263 

 

 

 12 

 

   Residential real estate

 

 

 811 

 

 

 811 

 

 

 232 

 

 

 

 

 

 

 

 

 914 

 

 

 5 

 

   Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 -

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Commercial real estate

 

$

 8,159 

 

$

 8,463 

 

$

 -

 

 

 

 

 

 

 

$

 5,924 

 

$

 255 

 

   Commercial construction

 

 

 315 

 

 

 315 

 

 

 -

 

 

 

 

 

 

 

 

 565 

 

 

 19 

 

   Commercial

 

 

 379 

 

 

 439 

 

 

 64 

 

 

 

 

 

 

 

 

 313 

 

 

 14 

 

   Residential real estate

 

 

 2,327 

 

 

 2,534 

 

 

 232 

 

 

 

 

 

 

 

 

 1,964 

 

 

 28 

 

   Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 -

 



 

$

 11,180 

 

$

 11,751 

 

$

 296 

 

 

 

 

 

 

 

$

 8,766 

 

$

 316 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 







The following table presents non-accrual loans by classes of the loan portfolio:





 

 

 

 

 

 



 

 

 

 

 

 



June 30, 2017

 

December 31, 2016

 



 

 

 

 

 

 



(In Thousands)

 

   Commercial real estate

$

 108 

 

$

 180 

 

   Commercial construction

 

 -

 

 

 -

 

   Commercial

 

 -

 

 

 100 

 

   Residential real estate

 

 830 

 

 

 874 

 

   Consumer

 

 -

 

 

 -

 

       Total

$

 938 

 

$

 1,154 

 





The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due.  The following table presents the classes of the loan portfolio summarized by the past due status as of June 30, 2017 and December 31, 2016, respectively:





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

Greater

 

 

 

 

 

 

 

 

 

 

Loan



 

 

 

 

than

 

 

 

 

 

 

 

Receivables >



30-59 Days

 

60-89 Days

 

90 Days

 

Total

 

 

 

Total Loan

 

90 Days and



Past Due

 

Past Due

 

Past Due

 

Past Due

 

Current

 

Receivables

 

Accruing



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 June 30, 2017

(In Thousands)

Commercial real estate

$

 3,926 

 

$

 275 

 

$

 108 

 

$

 4,309 

 

$

 323,836 

 

$

 328,145 

 

$

 -

Commercial construction

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 38,597 

 

 

 38,597 

 

 

 -

Commercial

 

 768 

 

 

 30 

 

 

 -

 

 

 798 

 

 

 38,528 

 

 

 39,326 

 

 

 -

Residential real estate

 

 1,097 

 

 

 -

 

 

 830 

 

 

 1,927 

 

 

 420,129 

 

 

 422,056 

 

 

 -

Consumer

 

 4 

 

 

 -

 

 

 -

 

 

 4 

 

 

 940 

 

 

 944 

 

 

 -

             Total

$

 5,795 

 

$

 305 

 

$

 938 

 

$

 7,038 

 

$

 822,030 

 

$

 829,068 

 

$

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

$

 123 

 

$

 -

 

$

 180 

 

$

 303 

 

$

 321,427 

 

$

 321,730 

 

$

 -

Commercial construction

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 28,606 

 

 

 28,606 

 

 

 -

Commercial

 

 196 

 

 

 -

 

 

 100 

 

 

 296 

 

 

 38,749 

 

 

 39,045 

 

 

 -

Residential real estate

 

 595 

 

 

 155 

 

 

 929 

 

 

 1,679 

 

 

 407,193 

 

 

 408,872 

 

 

 55 

Consumer

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 718 

 

 

 718 

 

 

 -

             Total

$

 914 

 

$

 155 

 

$

 1,209 

 

$

 2,278 

 

$

 796,693 

 

$

 798,971 

 

$

 55 





The following tables detail the activity in the allowance for loan losses for the three and six months ended June 30, 2017 and 2016:



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Commercial Real Estate

 

Commercial Construction

 

Commercial

 

Residential Real Estate

 

Consumer

 

Unallocated

 

Total



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Allowance for loan losses

(In Thousands)



Three Months Ending June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Beginning Balance - March 31, 2017

$

 2,353 

 

$

 670 

 

$

 363 

 

$

 2,968 

 

$

 16 

 

$

 249 

 

$

 6,619 



  Charge-offs

 

 -

 

 

 -

 

 

 (93)

 

 

 -

 

 

 -

 

 

 -

 

 

 (93)



  Recoveries

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -



  Provisions

 

 (199)

 

 

 (197)

 

 

 223 

 

 

 402 

 

 

 11 

 

 

 (5)

 

 

 235 



Ending Balance - June 30, 2017

$

 2,154 

 

$

 473 

 

$

 493 

 

$

 3,370 

 

$

 27 

 

$

 244 

 

$

 6,761 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Six Months Ending June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Beginning Balance - December 31, 2016

$

 2,349 

 

$

 516 

 

$

 423 

 

$

 2,937 

 

$

 15 

 

$

 277 

 

$

 6,517 



  Charge-offs

 

 -

 

 

 -

 

 

 (122)

 

 

 (62)

 

 

 -

 

 

 -

 

 

 (184)



  Recoveries

 

 13 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 13 



  Provisions

 

 (208)

 

 

 (43)

 

 

 192 

 

 

 495 

 

 

 12 

 

 

 (33)

 

 

 415 



Ending Balance - June 30, 2017

$

 2,154 

 

$

 473 

 

$

 493 

 

$

 3,370 

 

$

 27 

 

$

 244 

 

$

 6,761 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ending June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Beginning Balance - March 31, 2016

$

 2,157 

 

$

 371 

 

$

 396 

 

$

 2,581 

 

$

 30 

 

$

 674 

 

$

 6,209 



  Charge-offs

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -



  Recoveries

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -



  Provisions

 

 21 

 

 

 56 

 

 

 22 

 

 

 206 

 

 

 -

 

 

 (235)

 

 

 70 



Ending Balance - June 30, 2016

$

 2,178 

 

$

 427 

 

$

 418 

 

$

 2,787 

 

$

 30 

 

$

 439 

 

$

 6,279 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Six Months Ending June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Beginning Balance - December 31, 2015

$

 2,132 

 

$

 294 

 

$

 402 

 

$

 2,529 

 

$

 29 

 

$

 682 

 

$

 6,068 



  Charge-offs

 

 (35)

 

 

 -

 

 

 -

 

 

 (9)

 

 

 -

 

 

 -

 

 

 (44)



  Recoveries

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -



  Provisions

 

 81 

 

 

 133 

 

 

 16 

 

 

 267 

 

 

 1 

 

 

 (243)

 

 

 255 



Ending Balance - June 30, 2016

$

 2,178 

 

$

 427 

 

$

 418 

 

$

 2,787 

 

$

 30 

 

$

 439 

 

$

 6,279 





The following tables represent the allocation for loan losses and the related loan portfolio disaggregated based on impairment methodology at June 30, 2017 and December 31, 2016:





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Commercial Real Estate

 

Commercial Construction

 

Commercial

 

Residential Real Estate

 

Consumer

 

Unallocated

 

Total



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



(In Thousands)

 June 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance

$

 2,154 

 

$

 473 

 

$

 493 

 

$

 3,370 

 

$

 27 

 

$

 244 

 

$

 6,761 

Ending balance: individually evaluated for impairment

$

 28 

 

$

 -

 

$

 41 

 

$

 244 

 

$

 -

 

$

 -

 

$

 313 

Ending balance: collectively evaluated for impairment

$

 2,126 

 

$

 473 

 

$

 452 

 

$

 3,126 

 

$

 27 

 

$

 244 

 

$

 6,448 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

$

 328,145 

 

$

 38,597 

 

$

 39,326 

 

$

 422,056 

 

$

 944 

 

 

 

 

$

 829,068 

Ending balance: individually evaluated  for impairment

$

 7,573 

 

$

 315 

 

$

 247 

 

$

 2,199 

 

$

 -

 

 

 

 

$

 10,334 

Ending balance: collectively evaluated for impairment

$

 320,572 

 

$

 38,282 

 

$

 39,079 

 

$

 419,857 

 

$

 944 

 

 

 

 

$

 818,734 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance

$

 2,349 

 

$

 516 

 

$

 423 

 

$

 2,937 

 

$

 15 

 

$

 277 

 

$

 6,517 

Ending balance: individually evaluated for impairment

$

 -

 

$

 -

 

$

 64 

 

$

 232 

 

$

 -

 

$

 -

 

$

 296 

Ending balance: collectively evaluated for impairment

$

 2,349 

 

$

 516 

 

$

 359 

 

$

 2,705 

 

$

 15 

 

$

 277 

 

$

 6,221 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

$

 321,730 

 

$

 28,606 

 

$

 39,045 

 

$

 408,872 

 

$

 718 

 

 

 

 

$

 798,971 

Ending balance: individually evaluated  for impairment

$

 8,159 

 

$

 315 

 

$

 379 

 

$

 2,327 

 

$

 -

 

 

 

 

$

 11,180 

Ending balance: collectively evaluated for impairment

$

 313,571 

 

$

 28,291 

 

$

 38,666 

 

$

 406,545 

 

$

 718 

 

 

 

 

$

 787,791 



Beginning with the allowance for loan losses calculation of April 30, 2017, management updated its qualitative factors.  Also, the historical loss factors for each pool, which includes, but is not limited to, an average of the Company’s historical net charge-off ratio for five prior years and year to date, has been reduced to four prior years and year to date as of the April 30, 2017 calculation. The updates were based on management’s best judgement using relevant information available at the time of the evaluation and are supported through documentation in a narrative accompanying the allowance for loan loss calculation.



Troubled Debt Restructurings



The Company may grant a concession or modification for economic or legal reasons related to a borrower’s financial condition that it would not otherwise consider, resulting in a modified loan which is then identified as troubled debt restructuring (“TDR”).  The Company may modify loans through rate reductions, extensions to maturity, interest only payments, or payment modifications to better coincide the timing of payments due under the modified terms with the expected timing of cash flows from the borrowers’ operations.  Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral.  TDRs are considered impaired loans for purposes of calculating the Company’s allowance for loan losses.



The Company identifies loans for potential restructure primarily through direct communication with the borrower and the evaluation of the borrower’s financial statements, revenue projections, tax returns, and credit reports.  Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future.



The following table presents TDR’s outstanding:



 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



Accrual Loans

 

Non-Accrual Loans

 

Total Modifications



 

 

 

 

 

 

 

 

 June 30, 2017

(In Thousands)

Commercial real estate

$

 3,042 

 

$

 -

 

$

 3,042 

Commercial construction

 

 260 

 

 

 -

 

 

 260 

Commercial

 

 247 

 

 

 -

 

 

 247 

Residential real estate

 

 1,219 

 

 

 -

 

 

 1,219 

Consumer

 

 -

 

 

 -

 

 

 -



$

 4,768 

 

$

 -

 

$

 4,768 



 

 

 

 

 

 

 

 

December 31, 2016

 

Commercial real estate

$

 3,078 

 

$

 -

 

$

 3,078 

Commercial construction

 

 260 

 

 

 -

 

 

 260 

Commercial

 

 250 

 

 

 -

 

 

 250 

Residential real estate

 

 1,243 

 

 

 -

 

 

 1,243 

Consumer

 

 -

 

 

 -

 

 

 -



$

 4,831 

 

$

 -

 

$

 4,831 





As of June 30, 2017,  no available commitments were outstanding on TDRs.



There were no newly restructured loans that occurred during the three and six months ended June 30, 2017 and 2016. 



There were no loans that were modified and classified as a TDR within the prior twelve months that experienced a payment default (loans ninety days or more past due) during the three and six months ended June 30, 2017 and 2016.