Troubled Debt Restructurings

All loans deemed a troubled debt restructuring, or “TDR”, are considered impaired, and are evaluated for collateral and cash-flow sufficiency. A loan is considered a TDR when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that the Company would not otherwise consider. All of the following factors are indicators that the Company has granted a concession (one or multiple items may be present):


•	The borrower receives a reduction of the stated interest rate to a rate less than the institution is willing to accept at the time of the restructure for a new loan with comparable risk.


•	The borrower receives an extension of the maturity date or dates at a stated interest rate lower than the current market interest rate for new debt with similar risk characteristics.


•	The borrower receives a reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement.


•	The borrower receives a deferral of required payments (principal and/or interest).


•	The borrower receives a reduction of the accrued interest.

There were twenty-two (22) troubled debt restructured loans totaling $5.1 million at June 30, 2017. At December 31, 2016, there were twenty-six (26) troubled debt restructured loans totaling $7.3 million. Three loans, totaling $700 thousand, were in nonaccrual status at June 30, 2017. Six loans, totaling $1.6 million, were in nonaccrual status at December 31, 2016. There were no outstanding commitments to lend additional amounts to troubled debt restructured borrowers at June 30, 2017 or December 31, 2016.

During the three and six months ended June 30, 2017, the Company restructured no loans by granting concessions to borrowers experiencing financial difficulties. During the three months ended June 30, 2016, the Company restructured no loans by granting concessions to borrowers experiencing financial difficulties.

The following table and narrative set forth information on the Company’s troubled debt restructurings by class of financing receivable occurring during the six months ended June 30, 2016:



		Six Months Ended
		June 30, 2016
		(in thousands)
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial Real Estate:
Non-owner Occupied	1	$	736	$	736
Residential:
Single family	1	96		96
Total	2	$	832	$	832

During the six months ended June 30, 2016, the Company restructured two loans by granting concessions to borrowers experiencing financial difficulties. One residential loan and one commercial real estate loan was modified by extending the amortization period and reducing the interest rate.

Loans by class of financing receivable modified as TDRs within the previous 12 months and for which there was a payment default during the stated period were:



	Three Months Ended
	June 30, 2017
	(in thousands)
	Number of Contracts	Recorded Investment
Residential:
Single family	1	$	236
Total	1	$	236

	Three Months Ended
	June 30, 2016
	(in thousands)
	Number of Contracts	Recorded Investment
Total	—	$	—


	Six Months Ended
	June 30, 2017
	(dollars in thousands)
	Number of Contracts	Recorded Investment
Residential:
Single family	1	$	236
Total	1	$	236

	Six Months Ended
	June 30, 2016
	(dollars in thousands)
	Number of Contracts	Recorded Investment
Residential:
Single family	1	$	107
Total	1	$	107

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.