Loans (Tables)

9 Months Ended

Sep. 30, 2018

Loans and Leases Receivable Disclosure [Abstract]

The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of September 30, 2018 and December 31, 2017:



(In thousands)	September 30, 2018		December 31, 2017
SBA loans held for investment	$	41,051	$	43,999
Commercial loans
SBA 504 loans	29,530		21,871
Commercial other	102,555		82,825
Commercial real estate	516,634		469,696
Commercial real estate construction	48,356		54,473
Residential mortgage loans	413,652		365,145
Consumer loans
Home equity	59,703		55,817
Consumer other	58,794		54,038
Total loans held for investment	$	1,270,275	$	1,147,864
SBA loans held for sale	13,029		22,810
Total loans	$	1,283,304	$	1,170,674

Loan Portfolio by Class According to Credit Quality Indicators

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of September 30, 2018:



	September 30, 2018
	SBA, SBA 504 & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	39,092	$	863	$	1,096	$	41,051
Commercial loans
SBA 504 loans	28,458		—		1,072		29,530
Commercial other	101,909		187		459		102,555
Commercial real estate	511,297		2,076		3,261		516,634
Commercial real estate construction	48,356		—		—		48,356
Total commercial loans	690,020		2,263		4,792		697,075
Total SBA, SBA 504 and commercial loans	$	729,112	$	3,126	$	5,888	$	738,126

	Residential mortgage & Consumer loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	410,116	$	3,536	$	413,652
Consumer loans
Home equity			59,575		128		59,703
Consumer other			58,794		—		58,794
Total consumer loans			118,369		128		118,497
Total residential mortgage and consumer loans			$	528,485	$	3,664	$	532,149

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of December 31, 2017:



	December 31, 2017
	SBA, SBA 504 & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	42,415	$	373	$	1,211	$	43,999
Commercial loans
SBA 504 loans	20,751		1,024		96		21,871
Commercial other	82,201		599		25		82,825
Commercial real estate	464,589		3,047		2,060		469,696
Commercial real estate construction	54,473		—		—		54,473
Total commercial loans	622,014		4,670		2,181		628,865
Total SBA, SBA 504 and commercial loans	$	664,429	$	5,043	$	3,392	$	672,864

	Residential mortgage & Consumer loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	363,476	$	1,669	$	365,145
Consumer loans
Home equity			55,192		625		55,817
Consumer other			54,038		—		54,038
Total consumer loans			109,230		625		109,855
Total residential mortgage and consumer loans			$	472,706	$	2,294	$	475,000

Aging Analysis of Past Due and Nonaccrual Loans by Loan Class

The following tables set forth an aging analysis of past due and nonaccrual loans as of September 30, 2018 and December 31, 2017:



	September 30, 2018
(In thousands)	30-59 days past due		60-89 days past due		90+ days and still accruing		Nonaccrual (1)		Total past due		Current		Total loans
SBA loans held for investment	$	—	$	—	$	—	$	1,297	$	1,297	$	39,754	$	41,051
Commercial loans
SBA 504 loans	—		—		—		—		—		29,530		29,530
Commercial other	36		—		—		15		51		102,504		102,555
Commercial real estate	2,212		—		—		1,219		3,431		513,203		516,634
Commercial real estate construction	—		—		—		—		—		48,356		48,356
Residential mortgage loans	4,234		950		546		3,536		9,266		404,386		413,652
Consumer loans
Home equity	62		195		—		128		385		59,318		59,703
Consumer other	—		—		—		—		—		58,794		58,794
Total loans held for investment	$	6,544	$	1,145	$	546	$	6,195	$	14,430	$	1,255,845	$	1,270,275
SBA loans held for sale	—		—		—		—		—		13,029		13,029
Total loans	$	6,544	$	1,145	$	546	$	6,195	$	14,430	$	1,268,874	$	1,283,304


(1)	At September 30, 2018, nonaccrual loans included $104 thousand of loans guaranteed by the SBA.



	December 31, 2017
(In thousands)	30-59 days past due		60-89 days past due		90+ days and still accruing		Nonaccrual (1)		Total past due		Current		Total loans
SBA loans held for investment	$	240	$	313	$	—	$	632	$	1,185	$	42,814	$	43,999
Commercial loans
SBA 504 loans	—		—		—		—		—		21,871		21,871
Commercial other	23		—		60		25		108		82,717		82,825
Commercial real estate	558		1,073		—		43		1,674		468,022		469,696
Commercial real estate construction	—		—		—		—		—		54,473		54,473
Residential mortgage loans	1,830		958		—		1,669		4,457		360,688		365,145
Consumer loans
Home equity	51		205		—		625		881		54,936		55,817
Consumer other	3		—		—		—		3		54,035		54,038
Total loans held for investment	$	2,705	$	2,549	$	60	$	2,994	$	8,308	$	1,139,556	$	1,147,864
SBA loans held for sale	—		—		—		—		—		22,810		22,810
Total loans	$	2,705	$	2,549	$	60	$	2,994	$	8,308	$	1,162,366	$	1,170,674


(1)	At December 31, 2017, nonaccrual loans included $27 thousand of loans guaranteed by the SBA.

Impaired Loans with Associated Allowance Amount

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of September 30, 2018:



	September 30, 2018
(In thousands)	Unpaid principal balance		Recorded investment		Specific reserves
With no related allowance:
SBA loans held for investment (1)	$	364	$	358	$	—
Commercial loans
Commercial real estate	1,219		1,219		—
Total commercial loans	1,219		1,219		—
Total impaired loans with no related allowance	1,583		1,577		—

With an allowance:
SBA loans held for investment (1)	973		835		325
Commercial loans
Commercial other	15		15		15
Commercial real estate	755		755		107
Total commercial loans	770		770		122
Total impaired loans with a related allowance	1,743		1,605		447

Total individually evaluated impaired loans:
SBA loans held for investment (1)	1,337		1,193		325
Commercial loans
Commercial other	15		15		15
Commercial real estate	1,974		1,974		107
Total commercial loans	1,989		1,989		122
Total individually evaluated impaired loans	$	3,326	$	3,182	$	447


(1)	Balances are reduced by amount guaranteed by the SBA of $104 thousand at September 30, 2018.

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of December 31, 2017:



	December 31, 2017
(In thousands)	Unpaid principal balance		Recorded investment		Specific reserves
With no related allowance:
SBA loans held for investment (1)	$	135	$	52	$	—
Commercial loans
Commercial other	25		25		—
Commercial real estate	43		43		—
Total commercial loans	68		68		—
Total impaired loans with no related allowance	203		120		—

With an allowance:
SBA loans held for investment (1)	748		553		194
Commercial loans
Commercial real estate	786		786		138
Total commercial loans	786		786		138
Total impaired loans with a related allowance	1,534		1,339		332

Total individually evaluated impaired loans:
SBA loans held for investment (1)	883		605		194
Commercial loans
Commercial other	25		25		—
Commercial real estate	829		829		138
Total commercial loans	854		854		138
Total individually evaluated impaired loans	$	1,737	$	1,459	$	332


(1)	Balances are reduced by amount guaranteed by the SBA of $27 thousand at December 31, 2017.

Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized

The following tables present the average recorded investments in impaired loans and the related amount of interest recognized during the time period in which the loans were impaired for the three and nine months ended September 30, 2018 and 2017. The average balances are calculated based on the month-end balances of impaired loans. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method, and therefore no interest income is recognized. The interest income recognized on impaired loans noted below represents primarily nominal amounts of income recognized on a cash basis for well-collateralized impaired loans.



	For the three months ended September 30,
	2018				2017
(In thousands)	Average recorded investment		Interest income recognized on impaired loans		Average recorded investment		Interest income recognized on impaired loans
SBA loans held for investment (1)	$	1,275	$	—	$	369	$	29
Commercial loans
Commercial other	11		—		25		—
Commercial real estate	2,524		55		271		—
Total	$	3,810	$	55	$	665	$	29


(1)	Balances are reduced by the average amount guaranteed by the SBA of $120 thousand and $446 thousand for the three months ended September 30, 2018 and 2017, respectively.



	For the nine months ended September 30,
	2018					2017
(In thousands)	Average recorded investment		Interest income recognized on impaired loans			Average recorded investment		Interest income recognized on impaired loans
SBA loans held for investment (1)	$	1,003	$	(2	)	$	785	$	45
Commercial loans
SBA 504 loans	—		—			110		—
Commercial other	10		—			25		—
Commercial real estate	2,190		80			775		22
Total	$	3,203	$	78		$	1,695	$	67


(1)	Balances are reduced by the average amount guaranteed by the SBA of $82 thousand and $249 thousand for the nine months ended September 30, 2018 and 2017, respectively.