Loan Quality And Allowance For Loan Losses

3 Months Ended

Mar. 31, 2020

Loan Quality And Allowance For Loan Losses [Abstract]

Loan Quality And Allowance For Loan Losses

Note 6. Loan Quality and Allowance for Loan Losses

The following table presents, by class, the activity in the Allowance for Loan Losses (ALL) for the periods shown:


	Residential Real Estate 1-4 Family
	First		Junior Liens &				Commercial
(Dollars in thousands)	Liens		Lines of Credit		Construction		Real Estate		Commercial		Consumer		Unallocated		Total


ALL at December 31, 2019	$	416	$	119	$	184	$	6,022	$	3,815	$	84	$	1,326	$	11,966
Charge-offs		—		—		—		—		(220)		(30)		—		(250)
Recoveries		3		—		—		—		5		6		—		14
Provision		144		59		82		1,582		886		38		209		3,000
ALL at March 31, 2020	$	563	$	178	$	266	$	7,604	$	4,486	$	98	$	1,535	$	14,730

ALL at December 31, 2018	$	491	$	133	$	108	$	5,698	$	4,511	$	70	$	1,404	$	12,415
Charge-offs		(33)		(1)		(3)		(63)		(61)		(26)		—		(187)
Recoveries		1		—		—		1		42		10		—		54
Provision		28		—		47		270		70		18		(34)		399
ALL at March 31, 2019	$	487	$	132	$	152	$	5,906	$	4,562	$	72	$	1,370	$	12,681

The following table presents, by class, loans that were evaluated for the ALL under the specific reserve (individually) and those that were evaluated under the general reserve (collectively) and the amount of the ALL established in each class as of March 31, 2020 and December 31, 2019:



	Residential Real Estate 1-4 Family
	First		Junior Liens &				Commercial
(Dollars in thousands)	Liens		Lines of Credit		Construction		Real Estate		Commercial		Consumer		Unallocated		Total

March 31, 2020
Loans evaluated for ALL:
Individually	$	653	$	—	$	521	$	10,795	$	—	$	—	$	—	$	11,969
Collectively		142,653		50,666		14,961		483,348		226,128		6,661		—		924,417
Total	$	143,306	$	50,666	$	15,482	$	494,143	$	226,128	$	6,661	$	—	$	936,386

ALL established for ‎ loans evaluated:
Individually	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively		563		178		266		7,604		4,486		98		1,535		14,730
ALL at March 31, 2020	$	563	$	178	$	266	$	7,604	$	4,486	$	98	$	1,535	$	14,730

December 31, 2019
Loans evaluated for ALL:
Individually	$	659	$	—	$	523	$	10,994	$	—	$	—	$	—	$	12,176
Collectively		142,287		47,597		12,800		483,268		230,007		6,440		—		922,399
Total	$	142,946	$	47,597	$	13,323	$	494,262	$	230,007	$	6,440	$	—	$	934,575

ALL established for ‎ loans evaluated:
Individually	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively		416		119		184		6,022		3,815		84		1,326		11,966
ALL at December 31, 2019	$	416	$	119	$	184	$	6,022	$	3,815	$	84	$	1,326	$	11,966

‎

The following table shows additional information about those loans considered to be impaired at March 31, 2020 and December 31, 2019:


	Impaired Loans
	With No Allowance				With Allowance
(Dollars in thousands)			Unpaid				Unpaid
	Recorded		Principal		Recorded		Principal		Related
March 31, 2020	Investment		Balance		Investment		Balance		Allowance
Residential Real Estate 1-4 Family
First liens	$	653	$	653	$	—	$	—	$	—
Junior liens and lines of credit		—		—		—		—		—
Total		653		653		—		—		—
Residential real estate - construction		521		729		—		—		—
Commercial real estate		10,795		11,909		—		—		—
Commercial		—		—		—		—		—
Total	$	11,969	$	13,291	$	—	$	—	$	—


December 31, 2019
Residential Real Estate 1-4 Family
First liens	$	659	$	659	$	—	$	—	$	—
Junior liens and lines of credit		—		—		—		—		—
Total		659		659		—		—		—
Residential real estate - construction		523		729		—		—		—
Commercial real estate		10,994		12,096		—		—		—
Commercial		—		—		—		—		—
Total	$	12,176	$	13,484	$	—	$	—	$	—

The following table shows the average of impaired loans and related interest income for the three months ended March 31, 2020 and 2019:


	Three Months Ended
	March 31, 2020
	Average		Interest
(Dollars in thousands)	Recorded		Income
	Investment		Recognized
Residential Real Estate 1-4 Family
First liens	$	656	$	10
Junior liens and lines of credit		—		—
Total		656		10
Residential real estate - construction		521		—
Commercial real estate		10,899		94
Commercial		—		—
Total	$	12,076	$	104

	Three Months Ended
	March 31, 2019
	Average		Interest
(Dollars in thousands)	Recorded		Income
	Investment		Recognized
Residential Real Estate 1-4 Family
First liens	$	893	$	11
Junior liens and lines of credit		44		—
Total		937		11
Residential real estate - construction		653		—
Commercial real estate		13,494		102
Commercial		129		—
Total	$	15,213	$	113

‎

The following table presents the aging of payments of the loan portfolio:



(Dollars in thousands)			Loans Past Due and Still Accruing										Total
	Current		30-59 Days		60-89 Days		90 Days+		Total		Non-Accrual		Loans
March 31, 2020
Residential Real Estate 1-4 Family
First liens	$	142,621	$	588	$	55	$	1	$	644	$	41	$	143,306
Junior liens and lines of credit		50,581		40		—		31		71		14		50,666
Total		193,202		628		55		32		715		55		193,972
Residential real estate - construction		14,961		—		—		—		—		521		15,482
Commercial real estate		490,468		110		643		—		753		2,922		494,143
Commercial		225,310		288		355		—		643		175		226,128
Consumer		6,625		30		6		—		36		—		6,661
Total	$	930,566	$	1,056	$	1,059	$	32	$	2,147	$	3,673	$	936,386



December 31, 2019
Residential Real Estate 1-4 Family
First liens	$	141,843	$	646	$	358	$	31	$	1,035	$	68	$	142,946
Junior liens and lines of credit		47,420		70		30		46		146		31		47,597
Total		189,263		716		388		77		1,181		99		190,543
Residential real estate - construction		12,800		—		—		—		—		523		13,323
Commercial real estate		490,114		813		326		—		1,139		3,009		494,262
Commercial		229,659		31		120		—		151		197		230,007
Consumer		6,397		25		18		—		43		—		6,440
Total	$	928,233	$	1,585	$	852	$	77	$	2,514	$	3,828	$	934,575

The following table reports the risk rating for those loans in the portfolio that are assigned an individual risk rating. Consumer purpose loans are assigned a rating of either pass or substandard based on the performance status of the loans. Substandard consumer loans are comprised of loans 90 days or more past due and still accruing, and nonaccrual loans. Commercial purpose loans may be assigned any rating in accordance with the Bank’s internal risk rating system.



	Pass		OAEM		Substandard		Doubtful
(Dollars in thousands)	(1-5)		(6)		(7)		(8)		Total

March 31, 2020
Residential Real Estate 1-4 Family
First liens	$	143,264	$	—	$	42	$	—	$	143,306
Junior liens and lines of credit		50,621		—		45		—		50,666
Total		193,885		—		87		—		193,972
Residential real estate - construction		14,961		—		521		—		15,482
Commercial real estate		484,031		5,951		4,161		—		494,143
Commercial		225,737		—		391		—		226,128
Consumer		6,661		—		—		—		6,661
Total	$	925,275	$	5,951	$	5,160	$	—	$	936,386



December 31, 2019
Residential Real Estate 1-4 Family
First liens	$	142,847	$	—	$	99	$	—	$	142,946
Junior liens and lines of credit		47,520		—		77		—		47,597
Total		190,367		—		176		—		190,543
Residential real estate - construction		12,800		—		523		—		13,323
Commercial real estate		483,878		5,875		4,509		—		494,262
Commercial		229,465		4		538		—		230,007
Consumer		6,440		—		—		—		6,440
Total	$	922,950	$	5,879	$	5,746	$	—	$	934,575

The following table presents information on the Bank’s Troubled Debt Restructuring (TDR) loans as of:


								Troubled Debt Restructurings
								Within the Last 12 Months
								That Have Defaulted
(Dollars in thousands)	Troubled Debt Restructurings							On Modified Terms
	Number of	Recorded						Number of	Recorded
	Contracts	Investment		Performing*		Nonperforming*		Contracts	Investment
March 31, 2020
Residential real estate - construction	1		443	$	443	$	—	—	$	—
Residential real estate	4		652		652		—	—		—
Commercial real estate	11		9,220		8,244		976	—		—
Total	16	$	10,315	$	9,339	$	976	—	$	—


December 31, 2019
Residential real estate - construction	1	$	444	$	444	$	—	—	$	—
Residential real estate	4		659		659		—	—		—
Commercial real estate	11		9,343		9,343		—	—		—
Total	16	$	10,446	$	10,446	$	—	—	$	—

*The performing status is determined by the loan’s compliance with the modified terms.

There were no new TDR loans during 2020 or 2019. Loans that have been modified on a good-faith basis in response to COVID-19 to borrowers who were classified as current prior to any relief are not TDRs as outlined in the March 22, 2020 Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Such short-term modifications (e.g., six months) may include payment deferrals, fee waivers, extension of payment terms or other delays in payment that are insignificant. As of March 31, 2020, the Bank has granted approximately $30 million loan deferrals or modifications (approximately 3% of gross loans).