XML 30 R20.htm IDEA: XBRL DOCUMENT v3.20.2
LOANS (Tables)
 6 Months Ended
Jun. 30, 2020
LOANS [Abstract]  
Major Classifications of Loans
Major classifications of loans at June 30, 2020 and December 31, 2019 are summarized as follows:

  
2020
    
2019
  
Residential real estate
  
$
390,150
    
$
389,985
  
Multifamily real estate
    
37,376
      
36,684
  
Commercial real estate:
                
Owner occupied
    
164,121
      
164,218
  
Non-owner occupied
    
303,141
      
304,316
  
Commercial and industrial
    
85,073
      
105,079
  
SBA PPP
    
110,690
      
–
  
Consumer
    
25,416
      
29,007
  
Construction and land
    
115,053
      
136,138
  
All other
    
33,982
      
29,868
  
   
$
1,265,002
    
$
1,195,295
  
Activity in the Allowance for Loan Losses by Portfolio Segment
Activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2020 was as follows:

Loan Class
  
Balance
December 31, 2019
    
Provision (credit)
for loan losses
    
Loans
charged-off
    
Recoveries
    
Balance
June 30, 2020
  
                               
Residential real estate
  
$
1,711
    
$
288
    
$
(94
)
  
$
10
    
$
1,915
  
Multifamily real estate
    
1,954
      
161
      
–
      
–
      
2,115
  
Commercial real estate:
                                        
Owner occupied
    
2,441
      
590
      
(566
)
    
5
      
2,470
  
Non-owner occupied
    
3,184
      
1,200
      
(77
)
    
3
      
4,310
  
Commercial and industrial
    
1,767
      
(247
)
    
(5
)
    
39
      
1,554
  
Consumer
    
281
      
14
      
(99
)
    
34
      
230
  
Construction and land
    
1,724
      
(529
)
    
–
      
38
      
1,233
  
All other
    
480
      
113
      
(94
)
    
62
      
561
  
Total
  
$
13,542
    
$
1,590
    
$
(935
)
  
$
191
    
$
14,388
  

Activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2019 was as follows:

Loan Class
  
Balance
December 31, 2018
    
Provision (credit)
for loan losses
    
Loans
charged-off
    
Recoveries
    
Balance
June 30, 2019
  
                               
Residential real estate
  
$
1,808
    
$
104
    
$
(59
)
  
$
27
    
$
1,880
  
Multifamily real estate
    
1,649
      
65
      
–
      
2
      
1,716
  
Commercial real estate:
                                        
Owner occupied
    
2,120
      
200
      
(533
)
    
3
      
1,790
  
Non-owner occupied
    
3,058
      
277
      
(57
)
    
2
      
3,280
  
Commercial and industrial
    
1,897
      
178
      
(113
)
    
38
      
2,000
  
Consumer
    
351
      
129
      
(140
)
    
28
      
368
  
Construction and land
    
2,255
      
(102
)
    
(13
)
    
–
      
2,140
  
All other
    
600
      
39
      
(97
)
    
57
      
599
  
Total
  
$
13,738
    
$
890
    
$
(1,012
)
  
$
157
    
$
13,773
  


Activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2020 was as follows:

Loan Class
  
Balance
March 31, 2020
    
Provision (credit)
for loan losses
    
Loans
charged-off
    
Recoveries
    
Balance
June 30, 2020
  
                               
Residential real estate
  
$
1,838
    
$
72
    
$
(1
)
  
$
6
    
$
1,915
  
Multifamily real estate
    
2,104
      
11
      
–
      
–
      
2,115
  
Commercial real estate:
                                        
Owner occupied
    
2,220
      
248
      
–
      
2
      
2,470
  
Non-owner occupied
    
3,642
      
721
      
(53
)
    
–
      
4,310
  
Commercial and industrial
    
1,817
      
(269
)
    
(5
)
    
11
      
1,554
  
Consumer
    
241
      
12
      
(30
)
    
7
      
230
  
Construction and land
    
1,412
      
(180
)
    
–
      
1
      
1,233
  
All other
    
582
      
(25
)
    
(20
)
    
24
      
561
  
Total
  
$
13,856
    
$
590
    
$
(109
)
  
$
51
    
$
14,388
  

Activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2019 was as follows:

Loan Class
  
Balance
March 31, 2019
    
Provision (credit)
for loan losses
    
Loans
charged-off
    
Recoveries
    
Balance
June 30, 2019
  
                               
Residential real estate
  
$
1,823
    
$
62
    
$
(27
)
  
$
22
    
$
1,880
  
Multifamily real estate
    
1,590
      
126
      
–
      
–
      
1,716
  
Commercial real estate:
                                        
Owner occupied
    
1,824
      
(36
)
    
–
      
2
      
1,790
  
Non-owner occupied
    
3,401
      
(123
)
    
–
      
2
      
3,280
  
Commercial and industrial
    
1,721
      
275
      
(3
)
    
7
      
2,000
  
Consumer
    
365
      
19
      
(33
)
    
17
      
368
  
Construction and land
    
2,149
      
(9
)
    
–
      
–
      
2,140
  
All other
    
606
      
16
      
(46
)
    
23
      
599
  
Total
  
$
13,479
    
$
330
    
$
(109
)
  
$
73
    
$
13,773
  
Purchased Impaired Loans
The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected.  The carrying amount of those loans is as follows at June 30, 2020 and December 31, 2019.
  
2020
    
2019
  
Residential real estate
  
$
2,384
    
$
2,565
  
Commercial real estate
                
Owner occupied
    
1,108
      
1,804
  
Non-owner occupied
    
2,482
      
2,628
  
Commercial and industrial
    
19
      
305
  
Consumer
    
17
      
22
  
Construction and land
    
416
      
483
  
All other
    
176
      
174
  
Total carrying amount
  
$
6,602
    
$
7,981
  
Contractual principal balance
  
$
9,880
    
$
11,681
  
                 
Carrying amount, net of allowance
  
$
6,602
    
$
7,981
  
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 June 30, 2020 and June 30, 2019.

  
2020
    
2019
  
Balance at January 1
  
$
619
    
$
642
  
New loans purchased
    
–
      
–
  
Accretion of income
    
(59
)
    
(94
)
Loans placed on non-accrual
    
–
      
–
  
Income recognized upon full repayment
    
(65
)
    
(73
)
Reclassifications to accretable difference
    
(190
)
    
–
  
Disposals
    
–
      
–
  
Balance at June 30
  
$
305
    
$
475
  
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 June 30, 2020 and December 31, 2019.  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.

June 30, 2020
  
Principal Owed
on Non-accrual
Loans
    
Recorded
Investment in
Non-accrual Loans
    
Loans Past Due
Over 90 Days,
still accruing
  
                   
Residential real estate
  
$
5,460
    
$
4,197
    
$
748
  
Multifamily real estate
    
4,088
      
3,708
      
–
  
Commercial real estate
                        
Owner occupied
    
2,160
      
1,734
      
9
  
Non-owner occupied
    
4,042
      
2,726
      
–
  
Commercial and industrial
    
1,341
      
787
      
74
  
Consumer
    
324
      
236
      
–
  
Construction and land
    
355
      
313
      
149
  
All other
    
75
      
60
      
–
  
Total
  
$
17,845
    
$
13,761
    
$
980
  

December 31, 2019
  
Principal Owed
on Non-accrual
Loans
    
Recorded
Investment in
Non-accrual Loans
    
Loans Past Due
Over 90 Days,
still accruing
  
                   
Residential real estate
  
$
5,801
    
$
4,618
    
$
1,425
  
Multifamily real estate
    
4,113
      
3,726
      
–
  
Commercial real estate
                        
Owner occupied
    
3,399
      
2,995
      
–
  
Non-owner occupied
    
3,120
      
1,852
      
340
  
Commercial and industrial
    
1,026
      
420
      
451
  
Consumer
    
364
      
313
      
9
  
Construction and land
    
470
      
440
      
3
  
All other
    
75
      
73
      
–
  
Total
  
$
18,368
    
$
14,437
    
$
2,228
  
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 June 30, 2020 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
  
$
390,150
    
$
3,971
    
$
2,802
    
$
6,773
    
$
383,377
  
Multifamily real estate
    
37,376
      
–
      
3,708
      
3,708
      
33,668
  
Commercial real estate:
                                        
Owner occupied
    
164,121
      
26
      
505
      
531
      
163,590
  
Non-owner occupied
    
303,141
      
–
      
1,591
      
1,591
      
301,550
  
Commercial and industrial
    
85,073
      
703
      
723
      
1,426
      
83,647
  
SBA PPP
    
110,690
      
–
      
–
      
–
      
110,690
  
Consumer
    
25,416
      
96
      
112
      
208
      
25,208
  
Construction and land
    
115,053
      
4
      
152
      
156
      
114,897
  
All other
    
33,982
      
–
      
60
      
60
      
33,922
  
Total
  
$
1,265,002
    
$
4,800
    
$
9,653
    
$
14,453
    
$
1,250,549
  

The following table presents the aging of the recorded investment in past due loans as of December 31, 2019 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
  
$
389,985
    
$
9,479
    
$
3,192
    
$
12,671
    
$
377,314
  
Multifamily real estate
    
36,684
      
–
      
3,726
      
3,726
      
32,958
  
Commercial real estate:
                                        
Owner occupied
    
164,218
      
337
      
1,199
      
1,536
      
162,682
  
Non-owner occupied
    
304,316
      
838
      
1,017
      
1,855
      
302,461
  
Commercial and industrial
    
105,079
      
245
      
708
      
953
      
104,126
  
Consumer
    
29,007
      
309
      
230
      
539
      
28,468
  
Construction and land
    
136,138
      
3,856
      
4
      
3,860
      
132,278
  
All other
    
29,868
      
–
      
73
      
73
      
29,795
  
Total
  
$
1,195,295
    
$
15,064
    
$
10,149
    
$
25,213
    
$
1,170,082
  
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 June 30, 2020:
  
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
  
$
–
    
$
1,915
    
$
–
    
$
1,915
    
$
60
    
$
387,706
    
$
2,384
    
$
390,150
  
Multifamily real estate
    
1,865
      
250
      
–
      
2,115
      
3,708
      
33,668
      
–
      
37,376
  
Commercial real estate:
                                                                
Owner occupied
    
–
      
2,470
      
–
      
2,470
      
1,440
      
161,573
      
1,108
      
164,121
  
Non-owner occupied
    
448
      
3,862
      
–
      
4,310
      
4,022
      
296,637
      
2,482
      
303,141
  
Commercial and industrial
    
446
      
1,108
      
–
      
1,554
      
763
      
84,291
      
19
      
85,073
  
SBA PPP
    
–
      
–
      
–
      
–
      
–
      
110,690
      
–
      
110,690
  
Consumer
    
–
      
230
      
–
      
230
      
–
      
25,399
      
17
      
25,416
  
Construction and land
    
–
      
1,233
      
–
      
1,233
      
303
      
114,334
      
416
      
115,053
  
All other
    
–
      
561
      
–
      
561
      
–
      
33,806
      
176
      
33,982
  
Total
  
$
2,759
    
$
11,629
    
$
–
    
$
14,388
    
$
10,296
    
$
1,248,104
    
$
6,602
    
$
1,265,002
  

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, 2019:
  
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
  
$
–
    
$
1,711
    
$
–
    
$
1,711
    
$
63
    
$
387,357
    
$
2,565
    
$
389,985
  
Multifamily real estate
    
1,737
      
217
      
–
      
1,954
      
3,726
      
32,958
      
–
      
36,684
  
Commercial real estate:
                                                                
Owner occupied
    
653
      
1,788
      
–
      
2,441
      
2,685
      
159,729
      
1,804
      
164,218
  
Non-owner occupied
    
271
      
2,913
      
–
      
3,184
      
3,830
      
297,858
      
2,628
      
304,316
  
Commercial and industrial
    
390
      
1,377
      
–
      
1,767
      
678
      
104,096
      
305
      
105,079
  
Consumer
    
–
      
281
      
–
      
281
      
–
      
28,985
      
22
      
29,007
  
Construction and land
    
51
      
1,673
      
–
      
1,724
      
431
      
135,224
      
483
      
136,138
  
All other
    
–
      
480
      
–
      
480
      
–
      
29,694
      
174
      
29,868
  
Total
  
$
3,102
    
$
10,440
    
$
–
    
$
13,542
    
$
11,413
    
$
1,175,901
    
$
7,981
    
$
1,195,295
  
Loans Individually Evaluated for Impairment by Class of Loans
The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2020.  The table includes $701,000 of loans acquired with deteriorated credit quality for which 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
  
$
184
    
$
60
    
$
-
  
Commercial real estate
                        
Owner occupied
    
2,166
      
1,759
      
-
  
Non-owner occupied
    
1,661
      
805
      
-
  
Commercial and industrial
    
509
      
–
      
-
  
Construction and land
    
344
      
303
      
-
  
     
4,864
      
2,927
      
-
  
With an allowance recorded:
                        
Multifamily real estate
    
4,088
      
3,708
      
1,865
  
Commercial real estate
                        
Non-owner occupied
    
3,748
      
3,599
      
448
  
Commercial and industrial
    
781
      
763
      
446
  
     
8,617
      
8,070
      
2,759
  
Total
  
$
13,481
    
$
10,997
    
$
2,759
  


The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2019.  The table includes $758,000 of loans acquired with deteriorated credit quality for which 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
  
$
188
    
$
63
    
$
-
  
Multifamily real estate
    
96
      
89
      
-
  
Commercial real estate
                        
Owner occupied
    
2,201
      
1,842
      
-
  
Non-owner occupied
    
2,512
      
1,732
      
-
  
Commercial and industrial
    
509
      
–
      
-
  
     
5,506
      
3,726
      
-
  
With an allowance recorded:
                        
Multifamily real estate
  
$
4,017
    
$
3,637
    
$
1,737
  
Commercial real estate
                        
Owner occupied
    
1,189
      
1,162
      
653
  
Non-owner occupied
    
2,654
      
2,537
      
271
  
Commercial and industrial
    
689
      
678
      
390
  
Construction and land
    
460
      
431
      
51
  
     
9,009
      
8,445
      
3,102
  
Total
  
$
14,515
    
$
12,171
    
$
3,102
  
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 six months ended June 30, 2020 and June 30, 2019.  The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Six Months Ended June 30, 2020
    
Six Months Ended June 30, 2019
  
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
  
$
62
    
$
–
    
$
–
    
$
267
    
$
–
    
$
–
  
Multifamily real estate
    
3,744
      
–
      
–
      
3,855
      
–
      
–
  
Commercial real estate:
                                                
Owner occupied
    
2,191
      
6
      
4
      
3,898
      
6
      
6
  
Non-owner occupied
    
4,376
      
72
      
36
      
10,556
      
186
      
186
  
Commercial and industrial
    
738
      
2
      
2
      
562
      
2
      
2
  
Construction and land
    
353
      
–
      
–
      
1,065
      
121
      
121
  
Total
  
$
11,464
    
$
80
    
$
42
    
$
20,203
    
$
315
    
$
315
  

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 June 30, 2020 and June 30, 2019.  The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Three months ended June 30, 2020
    
Three months ended June 30, 2019
  
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
  
$
61
    
$
–
    
$
–
    
$
253
    
$
–
    
$
–
  
Multifamily real estate
    
3,753
      
–
      
–
      
3,830
      
–
      
–
  
Commercial real estate:
                                                
Owner occupied
    
1,785
      
3
      
1
      
4,062
      
3
      
3
  
Non-owner occupied
    
4,429
      
36
      
–
      
10,573
      
92
      
92
  
Commercial and industrial
    
768
      
1
      
1
      
562
      
1
      
1
  
Construction and land
    
314
      
–
      
–
      
922
      
113
      
113
  
Total
  
$
11,110
    
$
40
    
$
2
    
$
20,202
    
$
209
    
$
209
  
Troubled Debt Restructurings
The following table presents TDR’s as of June 30, 2020 and December 31, 2019:

June 30, 2020
  
TDR’s on
Non-accrual
    
Other
TDR’s
    
Total
TDR’s
  
                   
Residential real estate
  
$
25
    
$
151
    
$
176
  
Multifamily real estate
    
3,708
      
–
      
3,708
  
Commercial real estate
                        
Owner occupied
    
–
      
201
      
201
  
Non-owner occupied
    
856
      
1,781
      
2,637
  
Commercial and industrial
    
191
      
–
      
191
  
Total
  
$
4,780
    
$
2,133
    
$
6,913
  

December 31, 2019
  
TDR’s on
Non-accrual
    
Other
TDR’s
    
Total
TDR’s
  
                   
Residential real estate
  
$
32
    
$
157
    
$
189
  
Multifamily real estate
    
3,636
      
–
      
3,636
  
Commercial real estate
                        
Owner occupied
    
1,162
      
207
      
1,369
  
Non-owner occupied
    
–
      
2,656
      
2,656
  
Commercial and industrial
    
191
      
–
      
191
  
Total
  
$
5,021
    
$
3,020
    
$
8,041
  
Loans Modified under CARES Act
The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law at the end of March 2020.  Provisions of the CARES Act permit certain loan payment modifications by banks that would normally be considered TDR’s to be exempt from the TDR rules.  Management has exercised these provisions of the CARES Act on the following loans outstanding as of June 30, 2020 to some degree on an individually requested basis.

June 30, 2020
  
Modified to
Interest Only
Payment
    
Modified to Defer
Principal and
Interest Payment
    
Total
  
                   
Residential real estate
  
$
9,756
    
$
6,444
    
$
16,200
  
Multifamily real estate
    
2,526
      
5,280
      
7,806
  
Commercial real estate
                        
Owner occupied
    
16,880
      
23,856
      
40,736
  
Non-owner occupied
    
56,735
      
79,410
      
136,145
  
Commercial and industrial
    
3,510
      
6,634
      
10,144
  
Consumer
    
218
      
313
      
531
  
Construction and land
    
21,979
      
6,817
      
28,796
  
All other
    
10
      
334
      
344
  
Total
  
$
111,614
    
$
129,088
    
$
240,702
  
Risk Category of Loans by Class of Loans
As of June 30, 2020, 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
  
$
376,261
    
$
2,992
    
$
10,897
    
$
–
    
$
390,150
  
Multifamily real estate
    
29,216
      
4,452
      
3,708
      
–
      
37,376
  
Commercial real estate:
                                        
Owner occupied
    
155,443
      
4,284
      
4,394
      
–
      
164,121
  
Non-owner occupied
    
288,198
      
9,597
      
5,346
      
–
      
303,141
  
Commercial and industrial
    
80,192
      
3,498
      
1,383
      
–
      
85,073
  
SBA PPP
    
110,690
      
–
      
–
      
–
      
110,690
  
Consumer
    
25,107
      
2
      
307
      
–
      
25,416
  
Construction and land
    
110,807
      
3,676
      
570
      
–
      
115,053
  
All other
    
33,922
      
–
      
60
      
–
      
33,982
  
Total
  
$
1,209,836
    
$
28,501
    
$
26,665
    
$
–
    
$
1,265,002
  

As of December 31, 2019, 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
  
$
374,835
    
$
3,477
    
$
11,673
    
$
-
    
$
389,985
  
Multifamily real estate
    
28,103
      
4,855
      
3,726
      
-
      
36,684
  
Commercial real estate:
                                        
Owner occupied
    
152,695
      
5,123
      
6,400
      
-
      
164,218
  
Non-owner occupied
    
290,096
      
8,617
      
5,603
      
-
      
304,316
  
Commercial and industrial
    
101,085
      
2,693
      
1,301
      
-
      
105,079
  
Consumer
    
28,618
      
5
      
384
      
-
      
29,007
  
Construction and land
    
123,473
      
11,868
      
797
      
-
      
136,138
  
All other
    
29,698
      
97
      
73
      
-
      
29,868
  
Total
  
$
1,128,603
    
$
36,735
    
$
29,957
    
$
-
    
$
1,195,295