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Loans Receivable and Allowance for Loan Losses (Tables)
 12 Months Ended
Dec. 31, 2017
Loans Receivable and Allowance for Loan Losses [Abstract]  
Summary of loans receivable
Loans receivable are summarized as follows at December 31:
 
  
2017
  
2016
 
  
(dollars in thousands) 
 
Residential mortgage
 
$
287,656
  
$
260,603
 
Commercial
  
37,356
   
46,468
 
Commercial real estate
  
236,302
   
195,710
 
Construction, land acquisition, and development
  
93,060
   
90,102
 
Home equity/2nds
  
15,703
   
19,129
 
Consumer
  
1,084
   
1,210
 
Total loans receivable
  
671,161
   
613,222
 
Unearned loan fees
  
(3,010
)
  
(2,944
)
Net loans receivable
 
$
668,151
  
$
610,278
 
Changes in allowance for loan losses and recorded investment
The following tables present, by portfolio segment, the changes in the Allowance and the recorded investment in loans as of and for the years ended December 31:
 
 
 
2017
 
 
 
 
Residental
Mortgage
  
Commercial
  
Commercial
Real Estate
  
ADC
  
Home
Equity/
2nds
    
Consumer
   
Total
 
 
(dollars in thousands)
 
Beginning Balance
 
$
3,833
  
$
478
  
$
2,535
  
$
1,390
  
$
728
  
$
5
  
$
8,969
 
Charge-offs
  
(726
)
  
-
   
-
   
-
   
(98
)
  
(2
)
  
(826
)
Recoveries
  
375
   
-
   
157
   
-
   
30
   
-
   
562
 
Net (charge-offs) recoveries
  
(351
)
  
-
   
157
   
-
   
(68
)
  
(2
)
  
(264
)
(Reversal of) provision for loan losses
  
(383
)
  
49
   
113
   
(154
)
  
(274
)
  
(1
)
  
(650
)
Ending Balance
 
$
3,099
  
$
527
  
$
2,805
  
$
1,236
  
$
386
  
$
2
  
$
8,055
 
                            
Ending balance - individually evaluated for impairment
 
$
1,181
  
$
-
  
$
182
  
$
48
  
$
-
  
$
2
  
$
1,413
 
Ending balance - collectively evaluated for impairment
  
1,918
   
527
   
2,623
   
1,188
   
386
   
-
   
6,642
 
 
 
$
3,099
  
$
527
  
$
2,805
  
$
1,236
  
$
386
  
$
2
  
$
8,055
 
                            
Ending loan balance - individually evaluated for impairment
 
$
18,219
  
$
-
  
$
2,917
  
$
991
  
$
-
  
$
84
  
$
22,211
 
Ending loan balance - collectively evaluated for impairment
  
266,427
   
37,356
   
233,385
   
92,069
   
15,703
   
1,000
   
645,940
 
 
 
$
284,646
  
$
37,356
  
$
236,302
  
$
93,060
  
$
15,703
  
$
1,084
  
$
668,151
 
 
  
2016
 
 
Residental
Mortgage
  
Commercial
  
Commercial
Real Estate
  
ADC
  
Home
Equity/
2nds
  
Consumer
  
Total
 
   
(dollars in thousands)
 
Beginning Balance
 
$
4,188
  
$
291
  
$
2,792
  
$
956
  
$
528
  
$
3
  
$
8,758
 
Charge-offs
  
(151
)
  
(17
)
  
(178
)
  
(72
)
  
(50
)
  
-
   
(468
)
Recoveries
  
324
   
54
   
23
   
157
   
421
   
50
   
1,029
 
Net recoveries (charge-offs)
  
173
   
37
   
(155
)
  
85
   
371
   
50
   
561
 
(Reversal of) provision for loan losses
  
(528
)
  
150
   
(102
)
  
349
   
(171
)
  
(48
)
  
(350
)
Ending Balance
 
$
3,833
  
$
478
  
$
2,535
  
$
1,390
  
$
728
  
$
5
  
$
8,969
 
                             
Ending balance - individually evaluated for impairment
 
$
1,703
  
$
15
  
$
196
  
$
53
  
$
402
  
$
4
  
$
2,373
 
Ending balance - collectively evaluated for impairment
  
2,130
   
463
   
2,339
   
1,337
   
326
   
1
   
6,596
 
   
$
3,833
  
$
478
  
$
2,535
  
$
1,390
  
$
728
  
$
5
  
$
8,969
 
                            
Ending loan balance - individually evaluated for impairment
 
$
20,403
  
$
148
  
$
5,656
  
$
858
  
$
3,137
  
$
96
  
$
30,298
 
Ending loan balance - collectively evaluated for impairment
  
237,256
   
46,320
   
190,054
   
89,244
   
15,992
   
1,114
   
579,980
 
   
$
257,659
  
$
46,468
  
$
195,710
  
$
90,102
  
$
19,129
  
$
1,210
  
$
610,278
 
Credit quality breakdown of loan portfolio by class
The following tables present the credit quality breakdown of our loan portfolio by class as of December 31:

  
2017
 
  
Pass
  
Special
Mention
  
Substandard
  
Total
 
  
(dollars in thousands)
 
Residential mortgage
 
$
277,867
  
$
1,563
  
$
5,216
  
$
284,646
 
Commercial
  
37,312
   
44
   
-
   
37,356
 
Commercial real estate
  
228,746
   
4,615
   
2,941
   
236,302
 
ADC
  
91,868
   
-
   
1,192
   
93,060
 
Home equity/2nds
  
14,384
   
465
   
854
   
15,703
 
Consumer
  
1,084
   
-
   
-
   
1,084
 
  
$
651,261
  
$
6,687
  
$
10,203
  
$
668,151
 

  
2016
 
  
Pass
  
Special
Mention
  
Substandard
  
Total
 
  
(dollars in thousands) 
 
Residential mortgage
 
$
248,819
  
$
4,316
  
$
4,524
  
$
257,659
 
Commercial
  
46,011
   
204
   
253
   
46,468
 
Commercial real estate
  
184,820
   
7,420
   
3,470
   
195,710
 
ADC
  
89,324
   
-
   
778
   
90,102
 
Home equity/2nds
  
16,056
   
472
   
2,601
   
19,129
 
Consumer
  
1,210
   
-
   
-
   
1,210
 
  
$
586,240
  
$
12,412
  
$
11,626
  
$
610,278
 
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of December 31:
 
 
2017
 
 
30-59
Days
Past Due
  
60-89
Days
Past Due
  
90+
Days
Past Due
  
Total
Past Due
  
Current
  
Total
  
Non-
Accrual
 
 
 
(dollars in thousands)
 
Residential mortgage
 
$
1,006
  
$
-
  
$
-
  
$
1,006
  
$
283,640
  
$
284,646
  
$
3,891
 
Commercial
  
-
   
-
   
-
   
-
   
37,356
   
37,356
   
78
 
Commercial real estate
  
948
   
-
   
-
   
948
   
235,354
   
236,302
   
159
 
ADC
  
-
   
-
   
-
   
-
   
93,060
   
93,060
   
314
 
Home equity/2nds
  
-
   
-
   
-
   
-
   
15,703
   
15,703
   
1,268
 
Consumer
  
-
   
-
   
-
   
-
   
1,084
   
1,084
   
-
 
 
 
$
1,954
  
$
-
  
$
-
  
$
1,954
  
$
666,197
  
$
668,151
  
$
5,710
 
 
  
2016 
 
  
30-59
Days
Past Due
60-89
Days
Past Due
    
90+
Days
Past Due
 
Total
Past Due
  
Current
    
Total
 
Non-
Accrual
  
(dollars in thousands)
 
Residential mortgage
 
$
1,472
  
$
2,074
  
$
964
  
$
4,510
  
$
253,149
  
$
257,659
  
$
3,580
 
Commercial
  
-
   
-
   
-
   
-
   
46,468
   
46,468
   
151
 
Commercial real estate
  
-
   
171
   
515
   
686
   
195,024
   
195,710
   
2,938
 
ADC
  
106
   
-
   
6
   
112
   
89,990
   
90,102
   
269
 
Home equity/2nds
  
34
   
-
   
2,174
   
2,208
   
16,921
   
19,129
   
2,914
 
Consumer
  
4
   
-
   
-
   
4
   
1,206
   
1,210
   
-
 
  
$
1,616
  
$
2,245
  
$
3,659
  
$
7,520
  
$
602,758
  
$
610,278
  
$
9,852
 
Summary of impaired loans
The following tables summarize impaired loans as of and for the years ended December 31:
 
  
2017
  
2016
 
  
Unpaid
Principal
Balance
  
Recorded
Investment
  
Related
Allowance
  
Unpaid
Principal
Balance
  
Recorded
Investment
  
Related
Allowance
 
With no related Allowance:
 
(dollars in thousands)
 
Residential mortgage
 
$
12,929
  
$
11,572
  
$
-
  
$
9,854
  
$
9,338
  
$
-
 
Commercial
  
-
   
-
   
-
   
-
   
-
   
-
 
Commercial real estate
  
1,562
   
1,507
   
-
   
3,900
   
3,698
   
-
 
ADC
  
636
   
636
   
-
   
441
   
441
   
-
 
Home equity/2nds
  
-
   
-
   
-
   
2,139
   
1,529
   
-
 
Consumer
  
-
   
-
   
-
   
-
   
-
   
-
 
With a related Allowance:
                        
Residential mortgage
  
6,761
   
6,647
   
1,181
   
11,176
   
11,065
   
1,703
 
Commercial
  
-
   
-
   
-
   
148
   
148
   
15
 
Commercial real estate
  
1,410
   
1,410
   
182
   
1,958
   
1,958
   
196
 
ADC
  
392
   
355
   
48
   
417
   
417
   
53
 
Home equity/2nds
  
-
   
-
   
-
   
1,608
   
1,608
   
402
 
Consumer
  
84
   
84
   
2
   
96
   
96
   
4
 
Totals:
                        
Residential mortgage
  
19,690
   
18,219
   
1,181
   
21,030
   
20,403
   
1,703
 
Commercial
  
-
   
-
   
-
   
148
   
148
   
15
 
Commercial real estate
  
2,972
   
2,917
   
182
   
5,858
   
5,656
   
196
 
ADC
  
1,028
   
991
   
48
   
858
   
858
   
53
 
Home equity/2nds
  
-
   
-
   
-
   
3,747
   
3,137
   
402
 
Consumer
  
84
   
84
   
2
   
96
   
96
   
4
 

  
2017
  
2016
  
  
Average
Recorded
Investment
  
Interest
Income
Recognized
  
Average
Recorded
Investment
  
Interest
Income
Recognized
 
With no related Allowance:
 
(dollars in thousands) 
 
Residential mortgage
 
$
10,072
  
$
504
  
$
12,747
  
$
521
 
Commercial
  
-
   
44
   
145
   
2
 
Commercial real estate
  
2,423
   
70
   
4,021
   
187
 
ADC
  
516
   
29
   
1,234
   
36
 
Home equity/2nds
  
543
   
46
   
1,889
   
75
 
Consumer
  
-
   
-
   
17
   
-
 
With a related Allowance:
                
Residential mortgage
  
8,714
   
294
   
10,785
   
463
 
Commercial
  
30
   
-
   
174
   
8
 
Commercial real estate
  
1,817
   
73
   
2,020
   
100
 
ADC
  
379
   
22
   
489
   
26
 
Home equity/2nds
  
572
   
1
   
679
   
7
 
Consumer
  
90
   
2
   
79
   
2
 
Totals:
                
Residential mortgage
  
18,786
   
798
   
23,532
   
984
 
Commercial
  
30
   
44
   
319
   
10
 
Commercial real estate
  
4,240
   
143
   
6,041
   
287
 
ADC
  
895
   
51
   
1,723
   
62
 
Home equity/2nds
  
1,115
   
47
   
2,568
   
82
 
Consumer
  
90
   
2
   
96
   
2
 
Loans modified as TDRs
The following table presents loans that were modified during the years ended December 31:

  
2017
  
2016
 
  
Number of
Modifications
  
Recorded
Investment
Prior to
Modification
  
Recorded
Investment
After
Modification
  
Number of
Modifications
  
Recorded
Investment
Prior to
Modification
  
Recorded
Investment
After
Modification
 
 
(dollars in thousands)
 
Residential Mortgage
 
$
-
  
$
-
  
$
-
   
3
  
$
624
  
$
624
 
  
$
-
  
$
-
  
$
-
   
3
  
$
624
  
$
624
 
Methods used to account for interest on TDRs
Interest on our portfolio of TDRs was accounted for under the following methods as of December 31:

  
2017
 
  
Number of
Modifications
  
Accrual
Status
  
Number of
Modifications
  
Nonaccrual
Status
  
Total
Number of
Modifications
  
Total
Balance of
Modifications
 
  (dollars in thousands)  
Residential mortgage
  
41
  
$
11,404
   
2
  
$
736
   
43
  
$
12,140
 
Commercial real estate
  
3
   
1,862
   
1
   
78
   
4
   
1,940
 
ADC
  
1
   
137
   
1
   
6
   
2
   
143
 
Home equity/2nds
  
1
   
227
   
-
   
-
   
1
   
227
 
Consumer
  
4
   
84
   
-
   
-
   
4
   
84
 
   
50
  
$
13,714
   
4
  
$
820
   
54
  
$
14,534
 
 
  
2016
 
  
Number of
Modifications
  
Accrual
Status
  
Number of
Modifications
  
Nonaccrual
Status
  
Total
Number of
Modifications
  
Total
Balance of
Modifications
 
 
(dollars in thousands)
Residential mortgage
  
47
  
$
15,648
   
4
  
$
2,137
   
51
  
$
17,785
 
Commercial real estate
  
3
   
1,914
   
2
   
249
   
5
   
2,163
 
ADC
  
2
   
170
   
1
   
6
   
3
   
176
 
Home equity/2nds
  
1
   
238
   
-
   
-
   
1
   
238
 
Consumer
  
5
   
96
   
-
   
-
   
5
   
96
 
   
58
  
$
18,066
   
7
  
$
2,392
   
65
  
$
20,458