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Loans and allowance for loan losses
 3 Months Ended
Mar. 31, 2019
Receivables [Abstract]  
Loans and allowance for loan losses
3. Loans and allowance for loan losses

 

A summary of the Company’s loan portfolio is as follows:

 

    March 31,     December 31,  
    2019     2018  
    (unaudited)        
Commercial real estate loans:                
Construction   $ 9,131     $ 12,870  
Non-residential     206,736       197,499  
Multi-family     18,495       12,661  
Residential real estate loans     40,793       43,534  
Commercial loans:     83,655       83,203  
Consumer loans:                
Indirect automobile     316,866       297,144  
Home equity     19,132       19,269  
Other consumer     10,639       10,826  
                 
Total gross loans     705,447       677,006  
                 
Net deferred loan costs     8,618       8,042  
Allowance for loan losses     (7,183 )     (6,646 )
                 
Total net loans   $ 706,882     $ 678,402  

 

At March 31, 2019 and December 31, 2018, the unpaid principal balances of loans held for sale, included in the residential real estate category above, were $184 and $888, respectively.

  

The following tables present the classes of the loan portfolio summarized by the pass category and the criticized categories of special mention, substandard and doubtful within the internal risk system:

 

    March 31, 2019  
          Special                    
    Pass     Mention     Substandard     Doubtful     Total  
    (unaudited)  
Commercial real estate:                                        
Construction   $ 9,131     $ -     $ -     $ -     $ 9,131  
Non-residential     196,250       6,804       3,682       -       206,736  
Multifamily     18,102       -       393       -       18,495  
Residential     38,510       -       -       2,283       40,793  
Commercial and industrial     81,925       696       1,034       -       83,655  
Consumer:                                        
Indirect automobile     316,342       -       -       524       316,866  
Home equity     18,939       -       -       193       19,132  
Other consumer     10,635       -       -       4       10,639  
                                         
Total   $ 689,834     $ 7,500     $ 5,109     $ 3,004     $ 705,447  

 

    December 31, 2018  
          Special                    
    Pass     Mention     Substandard     Doubtful     Total  
                               
Commercial real estate:                                        
Construction   $ 12,870     $ -     $ -     $ -     $ 12,870  
Non-residential     186,020       6,840       4,639       -       197,499  
Multifamily     12,261       -       400       -       12,661  
Residential     41,249       -       -       2,285       43,534  
Commercial and industrial     81,111       965       1,124       3       83,203  
Consumer:                                        
Indirect automobile     296,692       -       -       452       297,144  
Home equity     19,071       -       -       198       19,269  
Other consumer     10,816       -       -       10       10,826  
                                         
Total   $ 660,090     $ 7,805     $ 6,163     $ 2,948     $ 677,006  

 

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The past due status of all classes of loans is determined based on contractual due dates for loan payments.

  

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans:

 

    March 31, 2019  
                      Greater Than              
          30-59 Days     60-89 Days     90 Days Past     Total Loans        
    Current     Past Due     Past Due     Due     Receivable     Non-accrual  
    (unaudited)  
Commercial real estate:                                                
Construction   $ 9,131     $ -     $ -     $ -     $ 9,131     $ -  
Non-residential     201,853       2,128       248       2,507       206,736       2,507  
Multifamily     18,124       72       299       -       18,495       -  
Residential     39,587       120       526       560       40,793       2,208  
Commercial and industrial     83,329       326       -       -       83,655       280  
Consumer:                                                
Indirect automobile     311,512       4,271       585       498       316,866       524  
Home equity     18,269       493       275       95       19,132       192  
Other consumer     10,397       236       2       4       10,639       4  
                                                 
Total   $ 692,202     $ 7,646     $ 1,935     $ 3,664     $ 705,447     $ 5,715  

 

    December 31, 2018  
                      Greater Than              
          30-59 Days     60-89 Days     90 Days Past     Total Loans        
    Current     Past Due     Past Due     Due     Receivable     Non-accrual  
Commercial real estate:                                                
Construction   $ 12,870     $ -     $ -     $ -     $ 12,870     $ -  
Non-residential     193,273       1,466       253       2,507       197,499       2,507  
Multifamily     12,487       174       -       -       12,661       -  
Residential     42,083       305       615       531       43,534       2,208  
Commercial and industrial     82,992       206       1       4       83,203       297  
Consumer:                                                
Indirect automobile     291,369       4,429       915       431       297,144       452  
Home equity     18,905       264       -       100       19,269       198  
Other consumer     10,601       186       29       10       10,826       10  
                                                 
Total   $ 664,580     $ 7,030     $ 1,813     $ 3,583     $ 677,006     $ 5,672  

  

The following tables summarize information in regards to impaired loans by loan portfolio class:

 

    March 31, 2019  
    Recorded 
Investment		     Unpaid 
Principal 
Balance		     Related 
Allowance		     Average 
Recorded 
Investment		  
With no related allowance recorded:   (unaudited)  
Commercial real estate:                                
Construction   $ -     $ -     $ -     $ -  
Non-residential     2,507       2,601       -       2,507  
Multifamily     -       -       -       -  
Residential     2,208       2,515       -       2,246  
Commercial and industrial     280       409       -       289  
Consumer:                                
Indirect automobile     337       392       -       305  
Home equity     192       208       -       195  
Other consumer     4       4       -       7  
                                 
Total   $ 5,528     $ 6,129     $ -     $ 5,549  
                                 
With an allowance recorded:                                
Commercial real estate:                                
Construction   $ -     $ -     $ -     $ -  
Non-residential     -       -       -       -  
Multifamily     -       -       -       -  
Residential     -       -       -       -  
Commercial and industrial     -       -       -       -  
Consumer:                                
Indirect automobile     187       208       65       183  
Home equity     -       -       -       -  
Other consumer     -       -       -       -  
                                 
Total   $ 187     $ 208     $ 65     $ 183  
                                 
Total:                                
Commercial real estate:                                
Construction   $ -     $ -     $ -     $ -  
Non-residential     2,507       2,601       -       2,507  
Multifamily     -       -       -       -  
Residential     2,208       2,515       -       2,246  
Commercial and industrial     280       409       -       289  
Consumer:                                
Indirect automobile     524       600       65       488  
Home equity     192       208       -       195  
Other consumer     4       4       -       7  
                                 
Total   $ 5,715     $ 6,337     $ 65     $ 5,732  

  

    December 31, 2018  
    Recorded
Investment		     Unpaid 
Principal 
Balance		     Related 
Allowance		     Average 
Recorded 
Investment		  
With no related allowance recorded:                                
Commercial real estate:                                
Construction   $ -     $ -     $ -     $ 563  
Non-residential     2,507       2,601       -       3,023  
Multifamily     -       -       -       -  
Residential     2,208       2,523       -       2,196  
Commercial and industrial     297       421       -       758  
Consumer:                                
Indirect automobile     274       320       -       242  
Home equity     198       211       -       158  
Other consumer     10       10       -       5  
                                 
Total   $ 5,494     $ 6,086     $ -     $ 6,945  
                                 
With an allowance recorded:                                
Commercial real estate:                                
Construction   $ -     $ -     $ -     $ -  
Non-residential     -       -       -       451  
Multifamily     -       -       -       -  
Residential     -       -       -       -  
Commercial and industrial     -       -       -       9  
Consumer:                                
Indirect automobile     178       191       50       205  
Home equity     -       -       -       -  
Other consumer     -       -       -       2  
                                 
Total   $ 178     $ 191     $ 50     $ 667  
                                 
Total:                                
Commercial real estate:                                
Construction   $ -     $ -     $ -     $ 563  
Non-residential     2,507       2,601       -       3,474  
Multifamily     -       -       -       -  
Residential     2,208       2,523       -       2,196  
Commercial and industrial     297       421       -       767  
Consumer:                          
Indirect automobile     452       511       50       447  
Home equity     198       211       -       158  
Other consumer     10       10       -       7  
                                 
Total   $ 5,672     $ 6,277     $ 50     $ 7,612  

  

A loan is considered impaired when based on current information and events it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans and loans modified as troubled debt restructurings. Loan modifications, which resulted in these loans being considered TDRs, are primarily in the form of rate concessions and extensions of maturity dates. The Company does not generally recognize interest income on a loan in an impaired status. At March 31, 2019 and December 31, 2018, three loans totaling $1,745 and the same three loans totaling $1,774, respectively, included in impaired loans, were identified as TDRs. There were no new TDRs in the first quarter of 2019. In 2018, the Company restructured two loans, a residential mortgage and home equity loan, into a single residential mortgage, with a carrying value of $117, which included both rate and term modifications. At March 31, 2019 and December 31, 2018, all TDR loans were performing in accordance with their restructured terms. During the year ended December 31, 2018, one loan for $19 had defaulted in its modified terms and was charged off. At March 31, 2019 and December 31, 2018, the Company had no commitments to advance additional funds to borrowers under TDR loans.

 

The Company services certain loans that it has sold without recourse to third parties. The aggregate balances of loans serviced for others were $257,439 and $255,892 as of March 31, 2019 and December 31, 2018, respectively.

 

The balance of capitalized servicing rights, included in other assets at March 31, 2019 and December 31, 2018, were $2,246 and $2,278, respectively. Fair value exceeds carrying value. No impairment charges related to servicing rights were recognized during the period ended March 31, 2019 and the year ended December 31, 2018.

  

The following tables summarize the segments of the loan portfolio and the allowance for loan losses, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment and the activity in the allowance for loan losses for the periods then ended:

 

    Commercial 
Real Estate		     Residential     Commercial and 
Industrial		     Indirect     Consumer     Totals  
    Three months ended March 31, 2019  
Allowance for loan losses:     (unaudited)  
Beginning balance   $ 1,080     $ 320     $ 1,542     $ 2,915     $ 789     $ 6,646  
Provision (credit) for loan losses     79       (35 )     37       703       (4 )     780  
Loans charged-off     -       -       (5 )     (495 )     (6 )     (506 )
Recoveries     -       1       1       257       4       263  
Ending balance   $ 1,159     $ 286     $ 1,575     $ 3,380     $ 783     $ 7,183  
Ending balance:                                                
Individually evaluated for impairment   $ -     $ -     $ -     $ 65     $ -     $ 65  
Collectively evaluated for impairment   $ 1,159     $ 286     $ 1,575     $ 3,315     $ 783     $ 7,118  
Loan receivables:                                                
Ending balance   $ 234,362     $ 40,793     $ 83,655     $ 316,866     $ 29,771     $ 705,447  
Ending balance:                                                
                                                 
Individually evaluated for impairment   $ 2,507     $ 2,283     $ 280     $ 524     $ 196     $ 5,790  
Collectively evaluated for impairment   $ 231,855     $ 38,510     $ 83,375     $ 316,342     $ 29,575     $ 699,657  

 

    Commercial 
Real Estate		     Residential     Commercial and 
Industrial		     Indirect     Consumer     Totals  
    Three months ended March 31, 2018  
Allowance for loan losses:     (unaudited)  
Beginning balance   $ 1,305     $ 455     $ 879     $ 2,150     $ 668     $ 5,457  
Provision (credit) for loan losses     (105 )     6       (13 )     570       67       525  
Loans charged-off     (303 )     -       (19 )     (373 )     (8 )     (703 )
Recoveries     -       1       103       230       7       341  
Ending balance   $ 897     $ 462     $ 950     $ 2,577     $ 734     $ 5,620  
Ending balance:                                                
Individually evaluated for impairment   $ -     $ -     $ -     $ 75     $ -     $ 75  
Collectively evaluated for impairment   $ 897     $ 462     $ 950     $ 2,502     $ 734     $ 5,545  
Loan receivables:                                                
Ending balance   $ 215,899     $ 41,482     $ 68,328     $ 223,653     $ 29,895     $ 579,257  
Ending balance:                                                
                                                 
Individually evaluated for impairment   $ 6,354     $ 2,357     $ 1,154     $ 448     $ 398     $ 10,711  
Collectively evaluated for impairment   $ 209,545     $ 39,125     $ 67,174     $ 223,205     $ 29,497     $ 568,546  

  

    Commercial 
Real Estate		     Residential     Commercial and 
Industrial		     Indirect     Consumer     Totals  
    December 31, 2018  
Allowance for loan losses:                                                
Beginning balance   $ 1,305     $ 455     $ 879     $ 2,150     $ 668     $ 5,457  
Provision (credit) for loan losses     (45 )     (140 )     578       1,539       168       2,100  
Loans charged-off     (303 )     -       (37 )     (1,607 )     (66 )     (2,013 )
Recoveries     123       5       122       833       19       1,102  
Ending balance   $ 1,080     $ 320     $ 1,542     $ 2,915     $ 789     $ 6,646  
Ending balance:                                                
Individually evaluated for impairment   $ -     $ -     $ -     $ 50     $ -     $ 50  
Collectively evaluated for impairment   $ 1,080     $ 320     $ 1,542     $ 2,865     $ 789     $ 6,596  
Loan receivables:                                                
Ending balance   $ 223,030     $ 43,534     $ 83,203     $ 297,144     $ 30,095     $ 677,006  
Ending balance:                                                
Individually evaluated for impairment   $ 2,507     $ 2,285     $ 297     $ 452     $ 208     $ 5,749  
Collectively evaluated for impairment   $ 220,523     $ 41,249     $ 82,906     $ 296,692     $ 29,887     $ 671,257  

 

In the normal course of business, the Company grants loans to officers, directors and other related parties. Balances and activity of such loans during the periods presented were not material.