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Loans and Related Allowance for Loan Losses | 3 Months Ended
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Mar. 31, 2021
Loans and Related Allowance for Loan Losses [Abstract] |
Loans and Related Allowance for Loan Losses | Note 6 – Loans and Related Allowance for Loan Losses The following table summarizes the primary segments of the loan portfolio at March 31, 2021 and December 31, 2020:
(in thousands) |  | Commercial ‎Real Estate |  | Acquisition ‎and ‎Development |  | Commercial ‎and ‎Industrial |  | Residential ‎Mortgage |  | Consumer |  | Total
March 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 7,846 |  | $ | 874 |  | $ | — |  | $ | 3,200 |  | $ | 23 |  | $ | 11,943
Collectively evaluated for impairment |  |  | 357,885 |  |  | 122,751 |  |  | 299,178 |  |  | 371,127 |  |  | 36,441 |  |  | 1,187,382
Total loans |  | $ | 365,731 |  | $ | 123,625 |  | $ | 299,178 |  | $ | 374,327 |  | $ | 36,464 |  | $ | 1,199,325
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 3,330 |  | $ | 842 |  | $ | — |  | $ | 3,185 |  | $ | 102 |  | $ | 7,459
Collectively evaluated for impairment |  |  | 365,846 |  |  | 116,119 |  |  | 266,745 |  |  | 375,985 |  |  | 35,658 |  |  | 1,160,353
Total loans |  | $ | 369,176 |  | $ | 116,961 |  | $ | 266,745 |  | $ | 379,170 |  | $ | 35,760 |  | $ | 1,167,812
The commercial and industrial portfolio in the table above includes $145.2 million and $114.0 million of PPP loans, at March 31, 2021 and December 31, 2020, respectively, which are 100% guaranteed by the SBA, and no allowance for loan loss (“ALL”) has been assigned to them. The following table presents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention and Substandard within the internal risk rating system at March 31, 2021 and December 31, 2020:
(in thousands) |  | Pass |  | Special ‎Mention |  | Substandard |  | Total
March 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Non owner-occupied |  | $ | 179,153 |  | $ | 5,489 |  | $ | 6,383 |  | $ | 191,025
All other CRE |  |  | 164,725 |  |  | 3,778 |  |  | 6,203 |  |  | 174,706
Acquisition and development |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential construction |  |  | 18,480 |  |  | — |  |  | — |  |  | 18,480
All other A&D |  |  | 104,721 |  |  | 16 |  |  | 408 |  |  | 105,145
Commercial and industrial |  |  | 278,581 |  |  | 8,639 |  |  | 11,958 |  |  | 299,178
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage - term |  |  | 306,749 |  |  | 147 |  |  | 5,826 |  |  | 312,722
Residential mortgage - home equity |  |  | 60,817 |  |  | — |  |  | 788 |  |  | 61,605
Consumer |  |  | 36,333 |  |  | — |  |  | 131 |  |  | 36,464
Total |  | $ | 1,149,559 |  | $ | 18,069 |  | $ | 31,697 |  | $ | 1,199,325
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Non owner-occupied |  | $ | 178,670 |  | $ | 5,526 |  | $ | 6,322 |  | $ | 190,518
All other CRE |  |  | 166,504 |  |  | 5,664 |  |  | 6,490 |  |  | 178,658
Acquisition and development |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential construction |  |  | 18,920 |  |  | — |  |  | — |  |  | 18,920
All other A&D |  |  | 97,648 |  |  | 17 |  |  | 376 |  |  | 98,041
Commercial and industrial |  |  | 245,185 |  |  | 8,867 |  |  | 12,693 |  |  | 266,745
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage - term |  |  | 309,177 |  |  | 283 |  |  | 6,117 |  |  | 315,577
Residential mortgage - home equity |  |  | 62,804 |  |  | — |  |  | 789 |  |  | 63,593
Consumer |  |  | 35,648 |  |  | 3 |  |  | 109 |  |  | 35,760
Total |  | $ | 1,114,556 |  | $ | 20,360 |  | $ | 32,896 |  | $ | 1,167,812
‎ The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans at March 31, 2021 and December 31, 2020:
(in thousands) |  | Current |  | 30-59 Days ‎Past Due |  | 60-89 Days ‎Past Due |  | 90 Days+ ‎Past Due |  | Total Past ‎Due and ‎Accruing |  | Non- ‎Accrual |  | Total Loans
March 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non owner-occupied |  | $ | 186,443 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 4,582 |  | $ | 191,025
All other CRE |  |  | 173,535 |  |  | 305 |  |  | — |  |  | — |  |  | 305 |  |  | 866 |  |  | 174,706
Acquisition and development |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential construction |  |  | 18,480 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,480
All other A&D |  |  | 104,732 |  |  | — |  |  | 5 |  |  | — |  |  | 5 |  |  | 408 |  |  | 105,145
Commercial and industrial |  |  | 299,131 |  |  | 47 |  |  | — |  |  | — |  |  | 47 |  |  | — |  |  | 299,178
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage - term |  |  | 310,248 |  |  | 938 |  |  | — |  |  | 2 |  |  | 940 |  |  | 1,534 |  |  | 312,722
Residential mortgage - home equity |  |  | 60,766 |  |  | 361 |  |  | — |  |  | — |  |  | 361 |  |  | 478 |  |  | 61,605
Consumer |  |  | 36,267 |  |  | 126 |  |  | 44 |  |  | 4 |  |  | 174 |  |  | 23 |  |  | 36,464
Total |  | $ | 1,189,602 |  | $ | 1,777 |  | $ | 49 |  | $ | 6 |  | $ | 1,832 |  | $ | 7,891 |  | $ | 1,199,325
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non owner-occupied |  | $ | 190,510 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 8 |  | $ | 190,518
All other CRE |  |  | 177,360 |  |  | 408 |  |  | — |  |  | — |  |  | 408 |  |  | 890 |  |  | 178,658
Acquisition and development |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential construction |  |  | 18,920 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,920
All other A&D |  |  | 97,660 |  |  | 5 |  |  | — |  |  | 10 |  |  | 15 |  |  | 366 |  |  | 98,041
Commercial and industrial |  |  | 266,708 |  |  | 37 |  |  | — |  |  | — |  |  | 37 |  |  | — |  |  | 266,745
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage - term |  |  | 312,500 |  |  | 63 |  |  | 670 |  |  | 710 |  |  | 1,443 |  |  | 1,634 |  |  | 315,577
Residential mortgage - home equity |  |  | 63,036 |  |  | 80 |  |  | 63 |  |  | — |  |  | 143 |  |  | 414 |  |  | 63,593
Consumer |  |  | 35,473 |  |  | 230 |  |  | 26 |  |  | 4 |  |  | 260 |  |  | 27 |  |  | 35,760
Total |  | $ | 1,162,167 |  | $ | 823 |  | $ | 759 |  | $ | 724 |  | $ | 2,306 |  | $ | 3,339 |  | $ | 1,167,812
The current status of commercial and industrial loans includes $145.2 million and $114.0 million of PPP loans, at March 31, 2021 and December 31, 2020, respectively. Non-accrual loans totaled $7.9 million at March 31, 2021 compared to $3.3 million at December 31, 2020. The increase in non-accrual balances at March 31, 2021 was due to the movement of two hospitality loans totaling approximately $4.0 million in the first quarter of 2021. These loans suffered reduced cash flows due to the impact of the pandemic, have received modifications and were classified as substandard at December 31, 2020. Non-accrual loans that have been subject to partial charge-offs totaled $0.4 million at March 31, 2021 and $0.2 million at December 31, 2020. Loans secured by 1-4 family residential real estate properties in the process of foreclosure were $0.4 million at March 31, 2021 and December 31, 2020. Foreclosure and repossession activities were temporarily suspended as a result of COVID-19. As a percentage of the loan portfolio, accruing loans past due 30 days or more decreased to 0.15%, including PPP loans, or 0.17% excluding PPP loans, compared to 0.67% at March 31, 2020. The following table summarizes the primary segments of the ALL at March 31, 2021 and December 31, 2020, segregated by the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment:
(in thousands) |  | Commercial ‎Real Estate |  | Acquisition ‎and ‎Development |  | Commercial ‎and ‎Industrial |  | Residential ‎Mortgage |  | Consumer |  | Unallocated |  | Total
March 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated ‎for impairment |  | $ | 33 |  | $ | 2 |  | $ | — |  | $ | 17 |  | $ | — |  | $ | — |  | $ | 52
Collectively evaluated ‎for impairment |  | $ | 5,371 |  | $ | 2,421 |  | $ | 2,831 |  | $ | 5,011 |  | $ | 368 |  | $ | 500 |  | $ | 16,502
Total ALL |  | $ | 5,404 |  | $ | 2,423 |  | $ | 2,831 |  | $ | 5,028 |  | $ | 368 |  | $ | 500 |  | $ | 16,554
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated ‎for impairment |  | $ | 4 |  | $ | 13 |  | $ | — |  | $ | 40 |  | $ | — |  | $ | — |  | $ | 57
Collectively evaluated ‎for impairment |  | $ | 5,539 |  | $ | 2,326 |  | $ | 2,584 |  | $ | 5,110 |  | $ | 370 |  | $ | 500 |  | $ | 16,429
Total ALL |  | $ | 5,543 |  | $ | 2,339 |  | $ | 2,584 |  | $ | 5,150 |  | $ | 370 |  | $ | 500 |  | $ | 16,486
The evaluation of the need and amount of a specific allocation of the ALL and whether a loan can be removed from impairment status is made on a quarterly basis. ‎ The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at March 31, 2021 and December 31, 2020:
|  | Impaired Loans with ‎Specific Allowance |  | Impaired ‎Loans with ‎No Specific ‎Allowance |  | Total Impaired Loans
(in thousands) |  | Recorded ‎Investment |  | Related ‎Allowances |  | Recorded ‎Investment |  | Recorded ‎Investment (1) |  | Unpaid ‎Principal ‎Balance
March 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non owner-occupied |  | $ | 1,867 |  | $ | 33 |  | $ | 2,826 |  | $ | 4,693 |  | $ | 4,693
All other CRE |  |  | — |  |  | — |  |  | 3,153 |  |  | 3,153 |  |  | 3,153
Acquisition and development |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential construction |  |  | — |  |  | — |  |  | 259 |  |  | 259 |  |  | 259
All other A&D |  |  | 207 |  |  | 2 |  |  | 408 |  |  | 615 |  |  | 1,825
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,214
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage – term |  |  | 491 |  |  | 17 |  |  | 2,231 |  |  | 2,722 |  |  | 2,904
Residential mortgage – home equity |  |  | — |  |  | — |  |  | 478 |  |  | 478 |  |  | 510
Consumer |  |  | — |  |  | — |  |  | 23 |  |  | 23 |  |  | 48
Total impaired loans |  | $ | 2,565 |  | $ | 52 |  | $ | 9,378 |  | $ | 11,943 |  | $ | 15,606
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non owner-occupied |  | $ | 111 |  | $ | 4 |  | $ | 8 |  | $ | 119 |  | $ | 119
All other CRE |  |  | — |  |  | — |  |  | 3,211 |  |  | 3,211 |  |  | 3,211
Acquisition and development |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential construction |  |  | — |  |  | — |  |  | 266 |  |  | 266 |  |  | 266
All other A&D |  |  | 276 |  |  | 13 |  |  | 300 |  |  | 576 |  |  | 1,724
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,214
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage – term |  |  | 936 |  |  | 34 |  |  | 1,910 |  |  | 2,846 |  |  | 3,031
Residential mortgage – home equity |  |  | 76 |  |  | 6 |  |  | 339 |  |  | 415 |  |  | 447
Consumer |  |  | — |  |  | — |  |  | 26 |  |  | 26 |  |  | 51
Total impaired loans |  | $ | 1,399 |  | $ | 57 |  | $ | 6,060 |  | $ | 7,459 |  | $ | 11,063
(1)Recorded investment consists of unpaid principal balance, net of charge-offs, interest payments received applied to principal and unamortized deferred loan origination fees and cost. ‎ The following tables present the activity in the ALL for the three month periods ended March 31, 2021 and 2020:
(in thousands) |  | Commercial ‎Real Estate |  | Acquisition ‎and ‎Development |  | Commercial ‎and ‎Industrial |  | Residential ‎Mortgage |  | Consumer |  | Unallocated |  | Total
ALL balance at January 1, 2021 |  | $ | 5,543 |  | $ | 2,339 |  | $ | 2,584 |  | $ | 5,150 |  | $ | 370 |  | $ | 500 |  | $ | 16,486
Charge-offs |  |  | — |  |  | (81) |  |  | — |  |  | (82) |  |  | (80) |  |  | — |  |  | (243)
Recoveries |  |  | — |  |  | 101 |  |  | 36 |  |  | 17 |  |  | 47 |  |  | — |  |  | 201
Provision |  |  | (139) |  |  | 64 |  |  | 211 |  |  | (57) |  |  | 31 |  |  | — |  |  | 110
ALL balance at March 31, 2021 |  | $ | 5,404 |  | $ | 2,423 |  | $ | 2,831 |  | $ | 5,028 |  | $ | 368 |  | $ | 500 |  | $ | 16,554
ALL balance at January 1, 2020 |  | $ | 2,882 |  | $ | 3,674 |  | $ | 1,341 |  | $ | 3,828 |  | $ | 312 |  | $ | 500 |  | $ | 12,537
Charge-offs |  |  | — |  |  | (15) |  |  | (101) |  |  | (98) |  |  | (132) |  |  | — |  |  | (346)
Recoveries |  |  | 66 |  |  | 14 |  |  | 15 |  |  | 26 |  |  | 46 |  |  | — |  |  | 167
Provision |  |  | 868 |  |  | 390 |  |  | 427 |  |  | 830 |  |  | 139 |  |  | — |  |  | 2,654
ALL balance at March 31, 2020 |  | $ | 3,816 |  | $ | 4,063 |  | $ | 1,682 |  | $ | 4,586 |  | $ | 365 |  | $ | 500 |  | $ | 15,012
The ALL is based on estimates, and actual losses may vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any given date. The following table presents the average recorded investment in impaired loans by class and related interest income recognized for the periods indicated:
|  | Three months ended |  | Three months ended
|  | March 31, 2021 |  | March 31, 2020
(in thousands) |  | Average ‎investment |  | Interest income ‎recognized on ‎an accrual basis |  | Interest income ‎recognized on ‎a cash basis |  | Average ‎investment |  | Interest income ‎recognized on ‎an accrual basis |  | Interest income ‎recognized on ‎a cash basis
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non owner-occupied |  | $ | 2,406 |  | $ | 3 |  | $ | — |  | $ | 141 |  | $ | 2 |  | $ | —
All other CRE |  |  | 3,182 |  |  | 35 |  |  | — |  |  | 3,124 |  |  | 37 |  |  | —
Acquisition and development |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential construction |  |  | 263 |  |  | 3 |  |  | — |  |  | 288 |  |  | 3 |  |  | —
All other A&D |  |  | 596 |  |  | 3 |  |  | — |  |  | 8,328 |  |  | 3 |  |  | 1
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | 15 |  |  | — |  |  | —
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage – term |  |  | 2,784 |  |  | 20 |  |  | 5 |  |  | 2,497 |  |  | 22 |  |  | —
Residential mortgage – home equity |  |  | 446 |  |  | — |  |  | — |  |  | 828 |  |  | — |  |  | —
Consumer |  |  | 25 |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | —
Total |  | $ | 9,702 |  | $ | 64 |  | $ | 5 |  | $ | 15,225 |  | $ | 67 |  | $ | 1
The Bank modifies loan terms in the normal course of business. Among other reasons, modifications might be made in an effort to retain the loan relationship, to remain competitive in the current interest rate environment and/or to re-amortize or extend the loan’s term to better match the loan’s payment stream with the borrower’s cash flow. A modified loan is considered to be a TDR when the Bank has determined that the borrower is troubled (i.e., experiencing financial difficulties). The Bank evaluates the probability that the borrower will be in payment default on any of its debt obligations in the foreseeable future without modification. To make this determination, the Bank performs a global financial review of the borrower and loan guarantors to assess their current ability to meet their financial obligations. Section 4013 of the CARES Act allows financial institutions to suspend application of certain current TDRs accounting guidance under ASC 310-40 for loan modifications related to the COVID-19 pandemic made between March 1, 2020 and the earlier of January 1, 2022 or 60 days after the end of the COVID-19 national emergency, provided certain criteria are met. This relief can be applied to loan modifications for borrowers that defer or delay the payment of principal or interest, or change the interest rate on the loan and that were not more than 30 days past due as of December 31, 2019. In April 2020, federal and state banking regulators issued the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus to provide further interpretation of when a borrower is experiencing financial difficulty, specifically indicating that if the modification is either short-term (i.e., up to nine months) or mandated by a federal or state government in response to the COVID-19 pandemic, the borrower is not experiencing financial difficulty under ASC 310-40. The Corporation continues to prudently work with borrowers negatively impacted by the COVID-19 pandemic while managing credit risks and recognizing appropriate allowance for credit losses on its loan portfolio. See Note 3 to the financial statements included elsewhere in this report for additional information. There were 14 loans totaling $3.9 million and 14 loans totaling $4.0 million that were classified as TDRs at March 31, 2021 and December 31, 2020, respectively. During the three month periods ended March 31, 2021 and 2020, there were no new TDRs and no modifications on existing TDRs, no r were there any payment defaults under existing TDRs. The Bank had no significant commitments to lend additional funds to TDR borrowers.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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