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LOANS (Tables)
 9 Months Ended
Sep. 30, 2017
LOANS [Abstract]  
Major Classifications of Loans
Major classifications of loans at September 30, 2017 and December 31, 2016 are summarized as follows:

  
2017
  
2016
 
Residential real estate
 
$
337,502
  
$
342,294
 
Multifamily real estate
  
70,698
   
74,165
 
Commercial real estate:
        
Owner occupied
  
134,773
   
129,370
 
Non owner occupied
  
237,655
   
220,836
 
Commercial and industrial
  
82,332
   
76,736
 
Consumer
  
29,675
   
30,916
 
All other
  
162,689
   
150,506
 
  
$
1,055,324
  
$
1,024,823
 
Activity in the Allowance for Loan Losses by Portfolio Segment
Activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2017 was as follows:

Loan Class
 
Balance Dec 31, 2016
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance Sept 30, 2017
 
                
Residential real estate
 
$
2,948
  
$
363
  
$
(362
)
 
$
52
  
$
3,001
 
Multifamily real estate
  
785
   
475
   
-
   
-
   
1,260
 
Commercial real estate:
                    
Owner occupied
  
1,543
   
(161
)
  
(7
)
  
242
   
1,617
 
Non owner occupied
  
2,350
   
265
   
(8
)
  
-
   
2,607
 
Commercial and industrial
  
1,140
   
3
   
(138
)
  
95
   
1,100
 
Consumer
  
347
   
148
   
(214
)
  
86
   
367
 
All other
  
1,723
   
940
   
(373
)
  
117
   
2,407
 
Total
 
$
10,836
  
$
2,033
  
$
(1,102
)
 
$
592
  
$
12,359
 

Activity in the allowance for loan losses by portfolio segment for the nine months ending September 30, 2016 was as follows:

Loan Class
 
Balance Dec 31, 2015
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance Sept 30, 2016
 
                
Residential real estate
 
$
2,501
  
$
377
  
$
(107
)
 
$
19
  
$
2,790
 
Multifamily real estate
  
821
   
92
   
-
   
-
   
913
 
Commercial real estate:
                    
Owner occupied
  
1,509
   
(140
)
  
-
   
2
   
1,371
 
Non owner occupied
  
2,070
   
645
   
-
   
-
   
2,715
 
Commercial and industrial
  
1,033
   
83
   
(29
)
  
42
   
1,129
 
Consumer
  
307
   
172
   
(232
)
  
71
   
318
 
All other
  
1,406
   
207
   
(207
)
  
221
   
1,627
 
Total
 
$
9,647
  
$
1,436
  
$
(575
)
 
$
355
  
$
10,863
 


Activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2017 was as follows:

Loan Class
 
Balance June 30, 2017
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance Sept 30, 2017
 
                
Residential real estate
 
$
2,973
  
$
170
  
$
(163
)
 
$
21
  
$
3,001
 
Multifamily real estate
  
1,337
   
(77
)
  
-
   
-
   
1,260
 
Commercial real estate:
                    
Owner occupied
  
1,618
   
5
   
(7
)
  
1
   
1,617
 
Non owner occupied
  
2,334
   
276
   
(3
)
  
-
   
2,607
 
Commercial and industrial
  
1,093
   
(6
)
  
(4
)
  
17
   
1,100
 
Consumer
  
373
   
10
   
(49
)
  
33
   
367
 
All other
  
1,967
   
513
   
(110
)
  
37
   
2,407
 
Total
 
$
11,695
  
$
891
  
$
(336
)
 
$
109
  
$
12,359
 

Activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2016 was as follows:

Loan Class
 
Balance June 30, 2016
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance Sept 30, 2016
 
                
Residential real estate
 
$
2,747
  
$
91
  
$
(51
)
 
$
3
  
$
2,790
 
Multifamily real estate
  
822
   
91
   
-
   
-
   
913
 
Commercial real estate:
                    
Owner occupied
  
1,442
   
(72
)
  
-
   
1
   
1,371
 
Non owner occupied
  
2,708
   
7
   
-
   
-
   
2,715
 
Commercial and industrial
  
1,111
   
43
   
(29
)
  
4
   
1,129
 
Consumer
  
306
   
139
   
(142
)
  
15
   
318
 
All other
  
1,668
   
13
   
(81
)
  
27
   
1,627
 
Total
 
$
10,804
  
$
312
  
$
(303
)
 
$
50
  
$
10,863
 
Purchased Loans
The carrying amount of those loans is as follows at September 30, 2017 and December 31, 2016.

  
2017
  
2016
 
Residential real estate
 
$
1,515
  
$
1,619
 
Commercial real estate
        
Owner occupied
  
1,564
   
2,013
 
Non owner occupied
  
-
   
5,396
 
Commercial and industrial
  
214
   
232
 
All other
  
1,828
   
2,061
 
Total carrying amount
 
$
5,121
  
$
11,321
 
Contractual principal balance
 
$
7,116
  
$
14,784
 
         
Carrying amount, net of allowance
 
$
5,071
  
$
11,311
 
Purchase Loans Accretable Yield, or Income Expected to be Collected
The accretable yield, or income expected to be collected, on the purchased loans above is as follows at September 30, 2017 and September 30, 2016.

  
2017
  
2016
 
Balance at January 1
 
$
1,208
  
$
185
 
New loans purchased
  
-
   
1,151
 
Accretion of income
  
(398
)
  
(64
)
Reclassification to non-accretable
  
-
   
-
 
Disposals
  
-
   
-
 
Balance at September 30
 
$
810
  
$
1,272
 
Past Due and Non-performing Loans
The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2017 and December 31, 2016.  The recorded investment in non-accrual loans is less than the principal owed on non-accrual loans due to discounts applied to the carrying value of the loan at time of their acquisition and interest payments made by the borrower which have been used to reduce the recorded investment in the loan rather than recognized as interest income.

September 30, 2017
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
          
Residential  real estate
 
$
3,248
  
$
2,846
  
$
585
 
Multifamily real estate
  
11,101
   
11,095
   
334
 
Commercial real estate
            
Owner occupied
  
2,052
   
1,974
   
63
 
Non owner occupied
  
310
   
209
   
86
 
Commercial and industrial
  
2,062
   
1,054
   
648
 
Consumer
  
331
   
304
   
-
 
All other
  
6,984
   
6,863
   
-
 
Total
 
$
26,088
  
$
24,345
  
$
1,716
 
             

December 31, 2016
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
          
Residential  real estate
 
$
3,467
  
$
2,794
  
$
606
 
Multifamily real estate
  
11,157
   
11,106
   
334
 
Commercial real estate
            
Owner occupied
  
1,769
   
1,704
   
15
 
Non owner occupied
  
294
   
196
   
36
 
Commercial and industrial
  
2,537
   
1,209
   
1,008
 
Consumer
  
366
   
347
   
-
 
All other
  
8,408
   
8,391
   
-
 
Total
 
$
27,998
  
$
25,747
  
$
1,999
 
Aging of Recorded Investment in Past Due Loans by Loan Class
The following table presents the aging of the recorded investment in past due loans as of September 30, 2017 by class of loans:
 
Loan Class
 
Total Loans
  
30-89 Days Past Due
  
Greater than 90 days past due
  
Total Past Due
  
Loans Not Past Due
 
                
Residential real estate
 
$
337,502
  
$
6,460
  
$
1,717
  
$
8,177
  
$
329,325
 
Multifamily real estate
  
70,698
   
-
   
11,429
   
11,429
   
59,269
 
Commercial real estate:
                    
Owner occupied
  
134,773
   
172
   
1,979
   
2,151
   
132,622
 
Non owner occupied
  
237,655
   
374
   
227
   
601
   
237,054
 
Commercial and industrial
  
82,332
   
179
   
1,628
   
1,807
   
80,525
 
Consumer
  
29,675
   
365
   
121
   
486
   
29,189
 
All other
  
162,689
   
1,370
   
6,861
   
8,231
   
154,458
 
Total
 
$
1,055,324
  
$
8,920
  
$
23,962
  
$
32,882
  
$
1,022,442
 

The following table presents the aging of the recorded investment in past due loans as of December 31, 2016 by class of loans:
 
Loan Class
 
Total Loans
  
30-89 Days Past Due
  
Greater than 90 days past due
  
Total Past Due
  
Loans Not Past Due
 
                
Residential real estate
 
$
342,294
  
$
6,113
  
$
1,596
  
$
7,709
  
$
334,585
 
Multifamily real estate
  
74,165
   
-
   
11,440
   
11,440
   
62,725
 
Commercial real estate:
                    
Owner occupied
  
129,370
   
1,746
   
1,474
   
3,220
   
126,150
 
Non owner occupied
  
220,836
   
1,803
   
159
   
1,962
   
218,874
 
Commercial and industrial
  
76,736
   
330
   
2,120
   
2,450
   
74,286
 
Consumer
  
30,916
   
403
   
223
   
626
   
30,290
 
All other
  
150,506
   
577
   
8,187
   
8,764
   
141,742
 
Total
 
$
1,024,823
  
$
10,972
  
$
25,199
  
$
36,171
  
$
988,652
 
Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment Based on Impairment Method
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2017:
 
  
Allowance for Loan Losses
  
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
  
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
 
                         
Residential real estate
 
$
-
  
$
3,001
  
$
-
  
$
3,001
  
$
320
  
$
335,667
  
$
1,515
  
$
337,502
 
Multifamily real estate
  
517
   
743
   
-
   
1,260
   
13,588
   
57,110
   
-
   
70,698
 
Commercial real estate:
                                
Owner occupied
  
301
   
1,316
   
-
   
1,617
   
3,725
   
129,484
   
1,564
   
134,773
 
Non-owner occupied
  
88
   
2,519
   
-
   
2,607
   
5,583
   
232,072
   
-
   
237,655
 
Commercial and industrial
  
105
   
945
   
50
   
1,100
   
1,129
   
80,989
   
214
   
82,332
 
Consumer
  
19
   
348
   
-
   
367
   
19
   
29,656
   
-
   
29,675
 
All other
  
518
   
1,889
   
-
   
2,407
   
7,177
   
153,684
   
1,828
   
162,689
 
Total
 
$
1,548
  
$
10,761
  
$
50
  
$
12,359
  
$
31,541
  
$
1,018,662
  
$
5,121
  
$
1,055,324
 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2016:
 
  
Allowance for Loan Losses
  
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
  
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
 
                         
Residential real estate
 
$
-
  
$
2,948
  
$
-
  
$
2,948
  
$
379
  
$
340,296
  
$
1,619
  
$
342,294
 
Multifamily real estate
  
-
   
785
   
-
   
785
   
13,641
   
60,524
   
-
   
74,165
 
Commercial real estate:
                                
Owner occupied
  
244
   
1,299
   
-
   
1,543
   
2,801
   
124,556
   
2,013
   
129,370
 
Non-owner occupied
  
-
   
2,350
   
-
   
2,350
   
2,373
   
213,067
   
5,396
   
220,836
 
Commercial and industrial
  
266
   
864
   
10
   
1,140
   
1,418
   
75,086
   
232
   
76,736
 
Consumer
  
-
   
347
   
-
   
347
   
-
   
30,916
   
-
   
30,916
 
All other
  
86
   
1,637
   
-
   
1,723
   
12,976
   
135,469
   
2,061
   
150,506
 
Total
 
$
596
  
$
10,230
  
$
10
  
$
10,836
  
$
33,588
  
$
979,914
  
$
11,321
  
$
1,024,823
 
Loans Individually Evaluated for Impairment by Class of Loans
The following table presents loans individually evaluated for impairment by class of loans as of    September 30, 2017.  The table includes $199,000 of loans acquired with deteriorated credit quality that the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

  
Unpaid Principal Balance
  
Recorded Investment
  
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
         
Residential real estate
 
$
360
  
$
320
  
$
-
 
Multifamily real estate
  
2,492
   
2,492
   
-
 
Commercial real estate
            
Owner occupied
  
2,916
   
2,855
   
-
 
Non owner occupied
  
3,604
   
3,512
   
-
 
Commercial and industrial
  
1,767
   
1,012
   
-
 
All other
  
3,186
   
3,066
   
-
 
   
14,325
   
13,257
   
-
 
With an allowance recorded:
            
Multifamily real estate
 $
11,102
  $
11,095
  $
517
 
Commercial real estate
            
Owner occupied
  
888
   
870
   
301
 
Non owner occupied
  
2,072
   
2,072
   
88
 
Commercial and industrial
  
468
   
316
   
155
 
Consumer
  
19
   
19
   
19
 
All other
  
4,116
   
4,111
   
518
 
   
18,665
   
18,483
   
1,598
 
Total
 
$
32,990
  
$
31,740
  
$
1,598
 
 
The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2016.  The table includes $208,000 of loans acquired with deteriorated credit quality that the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

  
Unpaid Principal Balance
  
Recorded Investment
  
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
         
Residential  real estate
 
$
743
  
$
379
  
$
-
 
Multifamily real estate
  
13,692
   
13,641
   
-
 
Commercial real estate
            
Owner occupied
  
1,803
   
1,766
   
-
 
Non owner occupied
  
2,465
   
2,373
   
-
 
Commercial and industrial
  
2,429
   
1,338
   
-
 
All other
  
9,868
   
9,853
   
-
 
   
31,000
   
29,350
   
-
 
With an allowance recorded:
            
Commercial real estate
            
Owner occupied
 
$
1,055
  
$
1,035
  
$
244
 
Commercial and industrial
  
431
   
288
   
276
 
All other
  
3,124
   
3,123
   
86
 
   
4,610
   
4,446
   
606
 
Total
 
$
35,610
  
$
33,796
  
$
606
 
Average Balance of Loans Individually Evaluated for Impairment and Interest Income Recognized
The following table presents the average balance of loans individually evaluated for impairment and interest income recognized on these loans for the nine months ended September 30, 2017 and September 30, 2016.   The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Nine months ended Sept 30, 2017
  
Nine months ended Sept 30, 2016
 
Loan Class
 
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
  
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
 
                         
Residential real estate
 
$
339
  
$
1
  
$
1
  
$
612
  
$
16
  
$
14
 
Multifamily real estate
  
13,605
   
196
   
181
   
1,580
   
121
   
121
 
Commercial real estate:
                        
Owner occupied
  
3,340
   
49
   
49
   
1,144
   
3
   
3
 
Non-owner occupied
  
2,955
   
124
   
124
   
5,066
   
275
   
273
 
Commercial and industrial
  
1,474
   
114
   
114
   
1,155
   
26
   
26
 
Consumer
  
5
   
-
   
-
   
-
   
-
   
-
 
All other
  
8,641
   
342
   
341
   
3,011
   
40
   
6
 
Total
 
$
30,359
  
$
826
  
$
810
  
$
12,568
  
$
481
  
$
443
 

The following table presents the average balance of loans individually evaluated for impairment and interest income recognized on these loans for the three months ended September 30, 2017 and September 30, 2016  The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Three months ended Sept 30, 2017
  
Three months ended Sept 30, 2016
 
Loan Class
 
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
  
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
 
                   
Residential real estate
 
$
323
  
$
-
  
$
-
  
$
667
  
$
5
  
$
5
 
Multifamily real estate
  
13,590
   
66
   
60
   
2,594
   
63
   
63
 
Commercial real estate:
                        
Owner occupied
  
3,910
   
27
   
27
   
1,847
   
3
   
3
 
Non-owner occupied
  
3,749
   
63
   
63
   
4,240
   
175
   
175
 
Commercial and industrial
  
1,390
   
13
   
13
   
1,809
   
10
   
10
 
Consumer
  
9
   
-
   
-
   
-
   
-
   
-
 
All other
  
7,183
   
53
   
53
   
5,243
   
33
   
-
 
Total
 
$
30,154
  
$
222
  
$
216
  
$
16,400
  
$
289
  
$
256
 
Troubled Debt Restructurings
The following table presents TDR's as of September 30, 2017 and December 31, 2016:

September 30, 2017
 
TDR's on Non-accrual
  
Other TDR's
  
Total TDR's
 
          
Residential  real estate
 
$
317
  
$
110
  
$
427
 
Multifamily  real estate
  
-
   
2,159
   
2,159
 
Commercial real estate
            
    Owner occupied
  
602
   
1,766
   
2,368
 
Non owner occupied
  
-
   
3,875
   
3,875
 
Commercial and industrial
  
57
   
508
   
565
 
Consumer
  
-
   
-
   
-
 
All other
  
4,783
   
297
   
5,080
 
Total
 
$
5,759
  
$
8,715
  
$
14,474
 
             

December 31, 2016
 
TDR's on Non-accrual
  
Other TDR's
  
Total TDR's
 
          
Residential  real estate
 
$
129
  
$
464
  
$
593
 
Multifamily  real estate
  
-
   
2,201
   
2,201
 
Commercial real estate
            
Owner occupied
  
-
   
856
   
856
 
Commercial and industrial
  
62
   
352
   
414
 
All other
  
751
   
4,395
   
5,146
 
Total
 
$
942
  
$
8,268
  
$
9,210
 
Troubled Debt Restructuring During the Period
The following tables present TDR's that occurred during the nine months ended September 30, 2017 and September 30, 2016, and three months ended September 30, 2017 and September 30, 2016.

  
Nine months ended Sept 30, 2017
  
Nine months ended Sept 30, 2016
 
Loan Class
 
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
  
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
 
                   
Residential  real estate
  
-
  
$
-
  
$
-
   
8
  
$
483
  
$
483
 
Commercial real estate
                        
Owner occupied
  
2
   
1,525
   
1,525
   
3
   
865
   
865
 
Non owner occupied
  
2
   
3,875
   
3,875
   
1
   
100
   
100
 
Commercial and industrial
  
1
   
191
   
191
   
1
   
20
   
20
 
All other
  
-
   
-
   
-
   
1
   
4,106
   
4,106
 
Total
  
5
  
$
5,591
  
$
5,591
   
14
  
$
5,574
  
$
5,574
 

  
Three months ended Sept 30, 2017
  
Three months ended Sept 30, 2016
 
Loan Class
 
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
  
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
 
                   
Residential  real estate
  
-
  
$
-
  
$
-
   
6
  
$
184
  
$
184
 
Commercial real estate
                        
Owner occupied
  
-
   
-
   
-
   
1
   
255
   
255
 
Non owner occupied
  
2
   
3,875
   
3,875
   
-
   
-
   
-
 
All other
  
-
   
-
   
-
   
1
   
4,106
   
4,106
 
Total
  
2
  
$
3,875
  
$
3,875
   
8
  
$
4,545
  
$
4,545
 
Risk Category of Loans by Class of Loans
As of September 30, 2017 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loan Class
 
Pass
  
Special Mention
  
Substandard
  
Doubtful
  
Total Loans
 
                
Residential real estate
 
$
324,121
  
$
3,502
  
$
9,878
  
$
1
  
$
337,502
 
Multifamily real estate
  
52,472
   
3,590
   
12,024
   
2,612
   
70,698
 
Commercial real estate:
                    
Owner occupied
  
122,983
   
4,305
   
7,485
   
-
   
134,773
 
Non-owner occupied
  
220,173
   
11,243
   
6,239
   
-
   
237,655
 
Commercial and industrial
  
71,850
   
7,400
   
3,082
   
-
   
82,332
 
Consumer
  
29,145
   
136
   
375
   
19
   
29,675
 
All other
  
148,216
   
5,479
   
8,994
   
-
   
162,689
 
Total
 
$
968,960
  
$
35,655
  
$
48,077
  
$
2,632
  
$
1,055,324
 

As of December 31, 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loan Class
 
Pass
  
Special Mention
  
Substandard
  
Doubtful
  
Total Loans
 
                
Residential real estate
 
$
328,905
  
$
4,880
  
$
8,507
  
$
2
  
$
342,294
 
Multifamily real estate
  
59,375
   
78
   
14,712
   
-
   
74,165
 
Commercial real estate:
                    
Owner occupied
  
118,134
   
6,720
   
4,516
   
-
   
129,370
 
Non-owner occupied
  
213,641
   
4,391
   
2,804
   
-
   
220,836
 
Commercial and industrial
  
72,094
   
2,337
   
2,275
   
30
   
76,736
 
Consumer
  
30,369
   
242
   
305
   
-
   
30,916
 
All other
  
134,945
   
1,958
   
13,603
   
-
   
150,506
 
Total
 
$
957,463
  
$
20,606
  
$
46,722
  
$
32
  
$
1,024,823