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Note 4 - Loans and Allowance for Loan Losses | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
( 4 ) |  | LOANS AND ALLOWANCE FOR LOAN LOSSES
Loans at December 31, 2019 and 2018 consisted of the following: |  |  |  |
(In thousands) |  | 2019 |  | 2018
Real estate mortgage loans: |  |  |  |  |  |  |  |
Residential |  | $ | 131,959 |  |  | $ | 136,445 |
Land |  |  | 19,185 |  |  |  | 22,607 |
Residential construction |  |  | 35,554 |  |  |  | 31,459 |
Commercial real estate |  |  | 121,563 |  |  |  | 107,445 |
Commercial real estate construction |  |  | 20,086 |  |  |  | 20,591 |
Commercial business loans |  |  | 45,307 |  |  |  | 36,297 |
Consumer loans: |  |  |  |  |  |  |  |
Home equity and second mortgage loans |  |  | 54,677 |  |  |  | 51,731 |
Automobile loans |  |  | 46,443 |  |  |  | 42,124 |
Loans secured by deposits |  |  | 1,372 |  |  |  | 1,399 |
Unsecured loans |  |  | 3,653 |  |  |  | 3,638 |
Other consumer loans |  |  | 13,700 |  |  |  | 10,169 |
Gross loans |  |  | 493,499 |  |  |  | 463,905 |
Less undisbursed portion of loans in process |  |  | (23,081 | ) |  |  | (26,675 | )
Principal loan balance |  |  | 470,418 |  |  |  | 437,230 |
Deferred loan origination fees and costs, net |  |  | 1,137 |  |  |  | 1,095 |
Allowance for loan losses |  |  | (5,061 | ) |  |  | (4,065 | )
Loans, net |  | $ | 466,494 |  |  | $ | 434,260 |
At December 31, 2019 and 2018, the net unamortized premium on loans acquired from other financial institutions, excluding purchased credit impaired (“PCI”) loans, was $67,000 and $70,000, respectively. At December 31, 2019 and 2018, residential mortgage loans secured by residential properties without private mortgage insurance or government guarantee and with loan-to-value ratios exceeding 90% amounted to approximately $2.3 million and $2.7 million, respectively. At December 31, 2019, there were no mortgage loans serviced for the benefit of others as compared to $111,000 at December 31, 2018. The Bank has entered into loan transactions with certain directors, officers and their affiliates (i.e., related parties). In the opinion of management, such indebtedness was incurred in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with unrelated persons and does not involve more than normal risk of collectability or present other unfavorable features. The following table represents the aggregate activity for related party loans during the years ended December 31, 2019 and 2018. Adjustments are made to reflect new directors and officers added during the year, as well as directors and officers that left the Company during the year.
(In thousands) |  | 2019 |  | 2018
Beginning balance |  | $ | 7,867 |  |  | $ | 7,639 |
Adjustments due to officer and director changes |  |  | - |  |  |  | (205 | )
New loans |  |  | 5,271 |  |  |  | 1,971 |
Payments |  |  | (3,618 | ) |  |  | (1,538 | )
Ending balance |  | $ | 9,520 |  |  | $ | 7,867 |
Off-balance-sheet commitments (including commitments to make loans, unused lines of credit and letters of credit) to related parties at December 31, 2019 and 2018 were $7.5 million and $2.6 million, respectively. The following table provides the components of the Company’s recorded investment in loans at December 31, 2019 and 2018:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
|  | (In thousands)
December 31, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal loan balance |  | $ | 131,959 |  |  | $ | 19,185 |  |  | $ | 32,559 |  |  | $ | 121,563 |  |  | $ | 45,307 |  |  | $ | 54,677 |  |  | $ | 65,168 |  |  | $ | 470,418 |
Accrued interest receivable |  |  | 462 |  |  |  | 114 |  |  |  | 86 |  |  |  | 312 |  |  |  | 142 |  |  |  | 244 |  |  |  | 272 |  |  |  | 1,632 |
Net deferred loan origination fees and costs |  |  | 118 |  |  |  | 15 |  |  |  | (1 | ) |  |  | (62 | ) |  |  | - |  |  |  | 1,067 |  |  |  | - |  |  |  | 1,137 |
Recorded investment in loans |  | $ | 132,539 |  |  | $ | 19,314 |  |  | $ | 32,644 |  |  | $ | 121,813 |  |  | $ | 45,449 |  |  | $ | 55,988 |  |  | $ | 65,440 |  |  | $ | 473,187 |
December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal loan balance |  | $ | 136,445 |  |  | $ | 22,607 |  |  | $ | 25,375 |  |  | $ | 107,445 |  |  | $ | 36,297 |  |  | $ | 51,731 |  |  | $ | 57,330 |  |  | $ | 437,230 |
Accrued interest receivable |  |  | 475 |  |  |  | 119 |  |  |  | 76 |  |  |  | 265 |  |  |  | 120 |  |  |  | 247 |  |  |  | 228 |  |  |  | 1,530 |
Net deferred loan origination fees and costs |  |  | 99 |  |  |  | 18 |  |  |  | (9 | ) |  |  | (38 | ) |  |  | - |  |  |  | 1,025 |  |  |  | - |  |  |  | 1,095 |
Recorded investment in loans |  | $ | 137,019 |  |  | $ | 22,744 |  |  | $ | 25,442 |  |  | $ | 107,672 |  |  | $ | 36,417 |  |  | $ | 53,003 |  |  | $ | 57,558 |  |  | $ | 439,855 |
An analysis of the allowance for loan losses and recorded investment in loans as of and for the year ended December 31, 2019 is as follows:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
|  | (In thousands)
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 693 |  |  | $ | 162 |  |  | $ | 224 |  |  | $ | 1,401 |  |  | $ | 459 |  |  | $ | 443 |  |  | $ | 683 |  |  | $ | 4,065 |
Provisions |  |  | 251 |  |  |  | - |  |  |  | 126 |  |  |  | 222 |  |  |  | 132 |  |  |  | 77 |  |  |  | 617 |  |  |  | 1,425 |
Charge-offs |  |  | (194 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (24 | ) |  |  | (548 | ) |  |  | (766 | )
Recoveries |  |  | 117 |  |  |  | 1 |  |  |  | - |  |  |  | - |  |  |  | 4 |  |  |  | 19 |  |  |  | 196 |  |  |  | 337 |
Ending balance |  | $ | 867 |  |  | $ | 163 |  |  | $ | 350 |  |  | $ | 1,623 |  |  | $ | 595 |  |  | $ | 515 |  |  | $ | 948 |  |  | $ | 5,061 |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 16 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 16 |
Collectively evaluated for impairment |  |  | 839 |  |  |  | 163 |  |  |  | 350 |  |  |  | 1,623 |  |  |  | 595 |  |  |  | 515 |  |  |  | 948 |  |  |  | 5,033 |
Acquired with deteriorated credit quality |  |  | 12 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 12 |
Ending balance |  | $ | 867 |  |  | $ | 163 |  |  | $ | 350 |  |  | $ | 1,623 |  |  | $ | 595 |  |  | $ | 515 |  |  | $ | 948 |  |  | $ | 5,061 |
Recorded Investment in Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,926 |  |  | $ | 115 |  |  | $ | - |  |  | $ | 353 |  |  | $ | 249 |  |  | $ | 56 |  |  | $ | 48 |  |  | $ | 2,747 |
Collectively evaluated for impairment |  |  | 130,328 |  |  |  | 19,199 |  |  |  | 32,644 |  |  |  | 121,421 |  |  |  | 45,200 |  |  |  | 55,932 |  |  |  | 65,392 |  |  |  | 470,116 |
Acquired with deteriorated credit quality |  |  | 285 |  |  |  | - |  |  |  | - |  |  |  | 39 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 324 |
Ending balance |  | $ | 132,539 |  |  | $ | 19,314 |  |  | $ | 32,644 |  |  | $ | 121,813 |  |  | $ | 45,449 |  |  | $ | 55,988 |  |  | $ | 65,440 |  |  | $ | 473,187 |
An analysis of the allowance for loan losses and recorded investment in loans as of and for the year ended December 31, 2018 is as follows:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 219 |  |  | $ | 133 |  |  | $ | 245 |  |  | $ | 1,622 |  |  | $ | 291 |  |  | $ | 710 |  |  | $ | 414 |  |  | $ | 3,634 |
Provisions |  |  | 723 |  |  |  | 29 |  |  |  | (21 | ) |  |  | (296 | ) |  |  | 218 |  |  |  | (278 | ) |  |  | 793 |  |  |  | 1,168 |
Charge-offs |  |  | (258 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (51 | ) |  |  | (21 | ) |  |  | (697 | ) |  |  | (1,027 | )
Recoveries |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | 75 |  |  |  | 1 |  |  |  | 32 |  |  |  | 173 |  |  |  | 290 |
Ending balance |  | $ | 693 |  |  | $ | 162 |  |  | $ | 224 |  |  | $ | 1,401 |  |  | $ | 459 |  |  | $ | 443 |  |  | $ | 683 |  |  | $ | 4,065 |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 3 |  |  | $ | - |  |  | $ | - |  |  | $ | 44 |  |  | $ | 1 |  |  | $ | - |  |  | $ | - |  |  | $ | 48 |
Collectively evaluated for impairment |  |  | 690 |  |  |  | 162 |  |  |  | 224 |  |  |  | 1,357 |  |  |  | 458 |  |  |  | 443 |  |  |  | 683 |  |  |  | 4,017 |
Acquired with deteriorated credit quality |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Ending balance |  | $ | 693 |  |  | $ | 162 |  |  | $ | 224 |  |  | $ | 1,401 |  |  | $ | 459 |  |  | $ | 443 |  |  | $ | 683 |  |  | $ | 4,065 |
Recorded Investment in Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 2,184 |  |  | $ | 152 |  |  | $ | 521 |  |  | $ | 466 |  |  | $ | 427 |  |  | $ | 35 |  |  | $ | - |  |  | $ | 3,785 |
Collectively evaluated for impairment |  |  | 134,553 |  |  |  | 22,592 |  |  |  | 24,921 |  |  |  | 107,158 |  |  |  | 35,990 |  |  |  | 52,968 |  |  |  | 57,558 |  |  |  | 435,740 |
Acquired with deteriorated credit quality |  |  | 282 |  |  |  | - |  |  |  | - |  |  |  | 48 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 330 |
Ending balance |  | $ | 137,019 |  |  | $ | 22,744 |  |  | $ | 25,442 |  |  | $ | 107,672 |  |  | $ | 36,417 |  |  | $ | 53,003 |  |  | $ | 57,558 |  |  | $ | 439,855 |
An analysis of the allowance for loan losses for the year ended December 31, 2017 is as follows:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 380 |  |  | $ | 56 |  |  | $ | 80 |  |  | $ | 1,670 |  |  | $ | 198 |  |  | $ | 683 |  |  | $ | 319 |  |  | $ | 3,386 |
Provisions |  |  | (120 | ) |  |  | 77 |  |  |  | 165 |  |  |  | (124 | ) |  |  | 226 |  |  |  | 28 |  |  |  | 663 |  |  |  | 915 |
Charge-offs |  |  | (74 | ) |  |  | - |  |  |  | - |  |  |  | (3 | ) |  |  | (140 | ) |  |  | (6 | ) |  |  | (713 | ) |  |  | (936 | )
Recoveries |  |  | 33 |  |  |  | - |  |  |  | - |  |  |  | 79 |  |  |  | 7 |  |  |  | 5 |  |  |  | 145 |  |  |  | 269 |
Ending balance |  | $ | 219 |  |  | $ | 133 |  |  | $ | 245 |  |  | $ | 1,622 |  |  | $ | 291 |  |  | $ | 710 |  |  | $ | 414 |  |  | $ | 3,634 |
At December 31, 2019 and 2018, management applied qualitative factor adjustments to various portfolio segments as they determined that the historical loss experience was not indicative of the level of risk in the remaining balance of those portfolio segments. As part of their analysis of qualitative factors, management considers changes in underwriting standards, economic conditions, past due loan trends, collateral valuations, loan concentrations and other internal and external factors. Had these qualitative factor adjustments not been considered, the allowance for loan losses based on historical loss factors would have been $3.8 million and $3.1 million lower at December 31, 2019 and 2018, respectively. These changes were made to reflect management’s estimates of inherent losses in these portfolio segments at December 31, 2019 and 2018. Management also adjusts the historical loss factors for loans classified as watch, special mention and substandard that are not individually evaluated for impairment. The adjustments consider the increased likelihood of loss on classified loans based on the Company’s separate historical experience for classified loans. The effect of the adjustments for classified loans was to increase the estimated allowance for loan losses by $386,000 and $333,000 at December 31, 2019 and 2018, respectively. The following table summarizes the Company’s impaired loans as of and for the year ended December 31, 2019. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the year ended December 31, 2019.
|  | Unpaid |  | Average |  | Interest |  |  |  |
|  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
|  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
|  | (In thousands)
Loans with no related allowance recorded: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 1,737 |  |  | $ | 1,986 |  |  | $ | - |  |  | $ | 1,973 |  |  | $ | 17 |
Land |  |  | 115 |  |  |  | 117 |  |  |  | - |  |  |  | 147 |  |  |  | - |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 209 |  |  |  | - |
Commercial real estate |  |  | 353 |  |  |  | 352 |  |  |  | 1 |  |  |  | 446 |  |  |  | 33 |
Commercial business |  |  | 249 |  |  |  | 257 |  |  |  | - |  |  |  | 330 |  |  |  | 11 |
Home equity and second mortgage |  |  | 56 |  |  |  | 56 |  |  |  | - |  |  |  | 29 |  |  |  | 1 |
Other consumer |  |  | 48 |  |  |  | 50 |  |  |  | - |  |  |  | 20 |  |  |  | - |
|  | $ | 2,558 |  |  | $ | 2,818 |  |  | $ | - |  |  | $ | 3,154 |  |  | $ | 62 |
Loans with an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 189 |  |  | $ | 211 |  |  | $ | 16 |  |  | $ | 87 |  |  | $ | - |
Land |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Commercial real estate |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 81 |  |  |  | - |
Commercial business |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 58 |  |  |  | - |
Home equity and second mortgage |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 13 |  |  |  | - |
Other consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
|  | $ | 189 |  |  | $ | 211 |  |  | $ | 16 |  |  | $ | 239 |  |  | $ | - |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 1,926 |  |  | $ | 2,197 |  |  | $ | 16 |  |  | $ | 2,060 |  |  | $ | 17 |
Land |  |  | 115 |  |  |  | 117 |  |  |  | - |  |  |  | 147 |  |  |  | - |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 209 |  |  |  | - |
Commercial real estate |  |  | 353 |  |  |  | 352 |  |  |  | - |  |  |  | 527 |  |  |  | 33 |
Commercial business |  |  | 249 |  |  |  | 257 |  |  |  | - |  |  |  | 388 |  |  |  | 11 |
Home equity and second mortgage |  |  | 56 |  |  |  | 56 |  |  |  | - |  |  |  | 42 |  |  |  | 1 |
Other consumer |  |  | 48 |  |  |  | 50 |  |  |  | - |  |  |  | 20 |  |  |  | - |
|  | $ | 2,747 |  |  | $ | 3,029 |  |  | $ | 16 |  |  | $ | 3,393 |  |  | $ | 62 |
The following table summarizes the Company’s impaired loans as of and for the year ended December 31, 2018. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the year ended December 31, 2018.
|  | Unpaid |  | Average |  | Interest |  |  |  |
|  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
|  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
|  | (In thousands)
Loans with no related allowance recorded: |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 2,170 |  |  | $ | 2,409 |  |  | $ | - |  |  | $ | 2,335 |  |  | $ | 23 |
Land |  |  | 152 |  |  |  | 153 |  |  |  | - |  |  |  | 135 |  |  |  | - |
Construction |  |  | 521 |  |  |  | 521 |  |  |  | - |  |  |  | 104 |  |  |  | - |
Commercial real estate |  |  | 255 |  |  |  | 260 |  |  |  | - |  |  |  | 325 |  |  |  | 16 |
Commercial business |  |  | 400 |  |  |  | 451 |  |  |  | - |  |  |  | 237 |  |  |  | 14 |
Home equity and second mortgage |  |  | 35 |  |  |  | 44 |  |  |  | - |  |  |  | 57 |  |  |  | 1 |
Other consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | 1 |
|  | $ | 3,533 |  |  | $ | 3,838 |  |  | $ | - |  |  | $ | 3,198 |  |  | $ | 55 |
Loans with an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 14 |  |  | $ | 15 |  |  | $ | 3 |  |  | $ | 203 |  |  | $ | - |
Land |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Commercial real estate |  |  | 211 |  |  |  | 213 |  |  |  | 44 |  |  |  | 42 |  |  |  | - |
Commercial business |  |  | 27 |  |  |  | 30 |  |  |  | 1 |  |  |  | 38 |  |  |  | - |
Home equity and second mortgage |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |
Other consumer |  |  | - |  |  |  | - |  |  |  | -- |  |  |  | - |  |  |  |  |
|  | $ | 252 |  |  | $ | 258 |  |  | $ | 48 |  |  | $ | 288 |  |  | $ | - |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 2,184 |  |  | $ | 2,424 |  |  | $ | 3 |  |  | $ | 2,538 |  |  | $ | 23 |
Land |  |  | 152 |  |  |  | 153 |  |  |  | - |  |  |  | 135 |  |  |  | - |
Construction |  |  | 521 |  |  |  | 521 |  |  |  | - |  |  |  | 104 |  |  |  | - |
Commercial real estate |  |  | 466 |  |  |  | 473 |  |  |  | 44 |  |  |  | 367 |  |  |  | 16 |
Commercial business |  |  | 427 |  |  |  | 481 |  |  |  | 1 |  |  |  | 275 |  |  |  | 14 |
Home equity and second mortgage |  |  | 35 |  |  |  | 44 |  |  |  | - |  |  |  | 62 |  |  |  | 1 |
Other consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | 1 |
|  | $ | 3,785 |  |  | $ | 4,096 |  |  | $ | 48 |  |  | $ | 3,486 |  |  | $ | 55 |
The following table summarizes the Company’s impaired loans for the year ended December 31, 2017. The Company did not recognize any interest income on impaired loans using the cash receipts method of accounting for the year ended December 31, 2017.
|  | Average |  | Interest
|  | Recorded |  | Income
|  | Investment |  | Recognized
|  | (In thousands)
Loans with no related allowance recorded: |  |  |  |
Residential real estate |  | $ | 2,437 |  |  | $ | 28 |
Land |  |  | - |  |  |  | 2 |
Construction |  |  | - |  |  |  | - |
Commercial real estate |  |  | 686 |  |  |  | 16 |
Commercial business |  |  | 57 |  |  |  | 1 |
Home equity and second mortgage |  |  | 194 |  |  |  | 1 |
Other consumer |  |  | 4 |  |  |  | - |
|  | $ | 3,378 |  |  | $ | 48 |
Loans with an allowance recorded: |  |  |  |  |  |  |  |
Residential real estate |  | $ | 140 |  |  | $ | - |
Land |  |  | - |  |  |  | - |
Construction |  |  | - |  |  |  | - |
Commercial real estate |  |  | - |  |  |  | - |
Commercial business |  |  | 40 |  |  |  | - |
Home equity and second mortgage |  |  | 20 |  |  |  | - |
Other consumer |  |  | 14 |  |  |  | - |
|  | $ | 214 |  |  | $ | - |
Total: |  |  |  |  |  |  |  |
Residential real estate |  | $ | 2,577 |  |  | $ | 28 |
Land |  |  | - |  |  |  | 2 |
Construction |  |  | - |  |  |  | - |
Commercial real estate |  |  | 686 |  |  |  | 16 |
Commercial business |  |  | 97 |  |  |  | 1 |
Home equity and second mortgage |  |  | 214 |  |  |  | 1 |
Other consumer |  |  | 18 |  |  |  | - |
|  | $ | 3,592 |  |  | $ | 48 |
Nonperforming loans consists of nonaccrual loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming loans at December 31, 2019 and 2018:
|  | December 31, 2019 |  | December 31, 2018
|  | Nonaccrual Loans |  | Loans 90+ Days Past Due Still Accruing |  | Total Nonperforming Loans |  | Nonaccrual Loans |  | Loans 90+ Days Past Due Still Accruing |  | Total Nonperforming Loans
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 1,544 |  |  | $ | 13 |  |  | $ | 1,557 |  |  | $ | 1,769 |  |  | $ | - |  |  | $ | 1,769 |
Land |  |  | 115 |  |  |  | - |  |  |  | 115 |  |  |  | 152 |  |  |  | - |  |  |  | 152 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 521 |  |  |  | - |  |  |  | 521 |
Commercial real estate |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 371 |  |  |  | - |  |  |  | 371 |
Commercial business |  |  | 58 |  |  |  | - |  |  |  | 58 |  |  |  | 207 |  |  |  | - |  |  |  | 207 |
Home equity and second mortgage |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35 |  |  |  | - |  |  |  | 35 |
Other consumer |  |  | 48 |  |  |  | - |  |  |  | 48 |  |  |  | - |  |  |  | 2 |  |  |  | 2 |
Total |  | $ | 1,765 |  |  | $ | 13 |  |  | $ | 1,778 |  |  | $ | 3,055 |  |  | $ | 2 |  |  | $ | 3,057 |
The following table presents the aging of the recorded investment in loans at December 31, 2019:
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Over 90 Days Past Due |  | Total Past Due |  | Current |  | Purchased Credit Impaired Loans |  | Total Loans
|  |  |  | (In thousands)
Residential real estate |  | $ | 2,572 |  |  | $ | 824 |  |  | $ | 1,010 |  |  | $ | 4,406 |  |  | $ | 127,848 |  |  | $ | 285 |  |  | $ | 132,539 |
Land |  |  | 185 |  |  |  | 101 |  |  |  | 80 |  |  |  | 366 |  |  |  | 18,948 |  |  |  | - |  |  |  | 19,314 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 32,644 |  |  |  | - |  |  |  | 32,644 |
Commercial real estate |  |  | - |  |  |  | 146 |  |  |  | - |  |  |  | 146 |  |  |  | 121,628 |  |  |  | 39 |  |  |  | 121,813 |
Commercial business |  |  | 61 |  |  |  | - |  |  |  | 58 |  |  |  | 119 |  |  |  | 45,330 |  |  |  | - |  |  |  | 45,449 |
Home equity and second mortgage |  |  | 395 |  |  |  | 256 |  |  |  | - |  |  |  | 651 |  |  |  | 55,337 |  |  |  | - |  |  |  | 55,988 |
Other consumer |  |  | 504 |  |  |  | 66 |  |  |  | - |  |  |  | 570 |  |  |  | 64,870 |  |  |  | - |  |  |  | 65,440 |
Total |  | $ | 3,717 |  |  | $ | 1,393 |  |  | $ | 1,148 |  |  | $ | 6,258 |  |  | $ | 466,605 |  |  | $ | 324 |  |  | $ | 473,187 |
The following table presents the aging of the recorded investment in loans at December 31, 2018:
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Over 90 Days Past Due |  | Total Past Due |  | Current |  | Purchased Credit Impaired Loans |  | Total Loans
|  |  |  | (In thousands)
Residential real estate |  | $ | 2,617 |  |  | $ | 926 |  |  | $ | 1,189 |  |  | $ | 4,732 |  |  | $ | 132,005 |  |  | $ | 282 |  |  | $ | 137,019 |
Land |  |  | 247 |  |  |  | 39 |  |  |  | 152 |  |  |  | 438 |  |  |  | 22,306 |  |  |  | - |  |  |  | 22,744 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 25,442 |  |  |  | - |  |  |  | 25,442 |
Commercial real estate |  |  | 450 |  |  |  | - |  |  |  | - |  |  |  | 450 |  |  |  | 107,174 |  |  |  | 48 |  |  |  | 107,672 |
Commercial business |  |  | 377 |  |  |  | - |  |  |  | 145 |  |  |  | 522 |  |  |  | 35,895 |  |  |  | - |  |  |  | 36,417 |
Home equity and second mortgage |  |  | 191 |  |  |  | - |  |  |  | 35 |  |  |  | 226 |  |  |  | 52,777 |  |  |  | - |  |  |  | 53,003 |
Other consumer |  |  | 491 |  |  |  | 50 |  |  |  | 2 |  |  |  | 543 |  |  |  | 57,015 |  |  |  | - |  |  |  | 57,558 |
Total |  | $ | 4,373 |  |  | $ | 1,015 |  |  | $ | 1,523 |  |  | $ | 6,911 |  |  | $ | 432,614 |  |  | $ | 330 |  |  | $ | 439,855 |
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, public information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company classifies loans based on credit risk at least quarterly. The Company uses the following regulatory definitions for risk ratings: Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful/Nonaccrual: Loans classified as doubtful/nonaccrual have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loss: Loans classified as loss are considered uncollectible and of such little value that their continuance on the Company’s books as an asset is not warranted. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. The following table presents the recorded investment in loans by risk category as of the date indicated:
|  | Residential Real Estate |  | Land |  | Construction |  | Commercial Real Estate |  | Commercial Business |  | Home Equity and Second Mortgage |  | Other Consumer |  | Total
(In thousands)
December 31, 2019: |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 129,613 |  |  | $ | 18,805 |  |  | $ | 32,394 |  |  | $ | 119,469 |  |  | $ | 44,879 |  |  | $ | 55,569 |  |  | $ | 65,320 |  |  | $ | 466,049 |
Special mention |  |  | 46 |  |  |  | 327 |  |  |  | 250 |  |  |  | 1,136 |  |  |  | 378 |  |  |  | - |  |  |  | 72 |  |  |  | 2,209 |
Substandard |  |  | 1,336 |  |  |  | 67 |  |  |  | - |  |  |  | 1,208 |  |  |  | 134 |  |  |  | 419 |  |  |  | - |  |  |  | 3,164 |
Doubtful/Nonaccrual |  |  | 1,544 |  |  |  | 115 |  |  |  | - |  |  |  | - |  |  |  | 58 |  |  |  | - |  |  |  | 48 |  |  |  | 1,765 |
Loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 132,539 |  |  | $ | 19,314 |  |  | $ | 32,644 |  |  | $ | 121,813 |  |  | $ | 45,449 |  |  | $ | 55,988 |  |  | $ | 65,440 |  |  | $ | 473,187 |
December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 133,878 |  |  | $ | 22,458 |  |  | $ | 24,921 |  |  | $ | 104,843 |  |  | $ | 35,162 |  |  | $ | 52,859 |  |  | $ | 57,529 |  |  | $ | 431,650 |
Special mention |  |  | 133 |  |  |  | 65 |  |  |  | - |  |  |  | 1,520 |  |  |  | 763 |  |  |  | - |  |  |  | 29 |  |  |  | 2,510 |
Substandard |  |  | 1,168 |  |  |  | 69 |  |  |  | - |  |  |  | 938 |  |  |  | 285 |  |  |  | 109 |  |  |  | - |  |  |  | 2,569 |
Doubtful/Nonaccrual |  |  | 1,840 |  |  |  | 152 |  |  |  | 521 |  |  |  | 371 |  |  |  | 207 |  |  |  | 35 |  |  |  | - |  |  |  | 3,126 |
Loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 137,019 |  |  | $ | 22,744 |  |  | $ | 25,442 |  |  | $ | 107,672 |  |  | $ | 36,417 |  |  | $ | 53,003 |  |  | $ | 57,558 |  |  | $ | 439,855 |
Troubled Debt Restructurings The following table summarizes the Company’s TDRs by accrual status as of December 31, 2019 and 2018:
|  | December 31, 2019 |  | December 31, 2018
|  | Accruing |  | Nonaccrual |  | Total |  | Related Allowance for Loan Losses |  | Accruing |  | Nonaccrual |  | Total |  | Related Allowance for Loan Losses
|  | (In thousands)
Residential real estate |  | $ | 367 |  |  | $ | 66 |  |  | $ | 433 |  |  | $ | - |  |  | $ | 295 |  |  | $ | 302 |  |  | $ | 597 |  |  | $ | - |
Commercial real estate |  |  | 553 |  |  |  | - |  |  |  | 553 |  |  |  | - |  |  |  | 190 |  |  |  | 371 |  |  |  | 561 |  |  |  | 44 |
Commercial business |  |  | 191 |  |  |  | - |  |  |  | 191 |  |  |  | - |  |  |  | 218 |  |  |  | - |  |  |  | 218 |  |  |  | - |
Home equity and second mortgage |  |  | 55 |  |  |  | - |  |  |  | 55 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total |  | $ | 1,166 |  |  | $ | 66 |  |  | $ | 1,232 |  |  | $ | - |  |  | $ | 703 |  |  | $ | 673 |  |  | $ | 1,376 |  |  | $ | 44 |
At December 31, 2019 and 2018, there were no commitments to lend additional funds to debtors whose loan terms have been modified in a TDR. The Company restructured two residential real estate loans, one commercial real estate loan and one home equity loan during the year ended December 31, 2019, with pre-modification and post-modification balances of $225,000, $154,000 and $56,000, respectively. The Company restructured two commercial business loans, one commercial real estate loan and one residential real estate loan during the year ended December 31, 2018, with pre-modification and post-modification balances of $234,000, $94,000 and $241,000, respectively. The Company restructured one residential real estate loan in a TDR during the year ended December 31, 2017, with a pre-modification and post-modification outstanding balance of $65,000. For the TDRs restructured during 2019, 2018 and 2017, the terms of modification included the deferral of contractual principal payments and the renewal/extension of matured loans where the debtor was unable to access funds elsewhere at a market interest rate for debt with similar risk characteristics. There were no principal charge-offs recorded as a result of TDRs during the years ended December 31, 2019, 2018 and 2017. The Company had no payment defaults (defined as the loan becoming more than 90 days past due, being moved to nonaccrual status, or the collateral being foreclosed upon) for TDRs modified within the previous 12 months during the years ended December 31, 2019, 2018 and 2017. In the event that a TDR subsequently defaults, the Company evaluates the restructuring for possible impairment. As a result, the related allowance for loan losses may be increased or charge-offs may be taken to reduce the carrying amount of the loan. The Company did not recognize any provisions for loan losses or net charge-offs as a result of defaulted TDRs for the years ended December 31, 2019, 2018 and 2017. Purchased Credit Impaired (“PCI”) Loans Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan and lease losses. Such loans are accounted for individually or aggregated into pools of loans based on common risk characteristics such as credit score, loan type and date of origination. In determining the estimated fair value of purchased loans or pools, management considers a number of factors including the remaining life, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, and net present value of cash flows expected to be received, among others. Purchased loans are accounted for in accordance with guidance for certain loans acquired in a transfer (FASB ASC 310 - 30 ), when the loans have evidence of credit deterioration since origination and it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments. The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. The difference between the expected cash flows and the fair value at acquisition is recorded as interest income over the remaining life of the loan or pool of loans and is referred to as the accretable yield. Subsequent decreases to the expected cash flows will generally result in a provision for loan and lease losses. Subsequent increases in expected cash flows will result in a reversal of the provision for loan losses to the extent of prior charges and then an adjustment to accretable yield, which is recognized as future interest income. The following table presents the carrying amount of PCI loans accounted for under FASB ASC 310 - 30 at December 31, 2019 and 2018:
(In thousands) |  | 2019 |  | 2018
Residential real estate |  | $ | 285 |  |  | $ | 282 |
Commercial real estate |  |  | 39 |  |  |  | 48 |
Carrying amount |  |  | 324 |  |  |  | 330 |
Allowance for loan losses |  |  | 12 |  |  |  | - |
|  | $ | 312 |  |  | $ | 330 |
The outstanding balance of PCI loans accounted for under FASB ASC 310 - 30, including contractual principal, interest, fees and penalties was $466,000 and $519,000 at December 31, 2019 and 2018, respectively. The allowance for loan losses related to PCI loans was $12,000 at December 31, 2019. There was no allowance for loan losses related to PCI loans at December 31, 2018. Provisions for loan losses related to PCI loans were $12,000 for the year ended December 31, 2019. There was a $2,000 reduction of the allowance for loan losses related PCI loans for the year ended December 31, 2018. Provisions for loan losses related to PCI loans were $2,000 for the year ended December 31, 2017. Accretable yield, or income expected to be collected, is as follows for the years ended December 31, 2019, 2018 and 2017:
(In thousands) |  | 2019 |  | 2018 |  | 2017
Beginning balance |  | $ | 423 |  |  | $ | 470 |  |  | $ | 252 |
New loans acquired |  |  | - |  |  |  | - |  |  |  | - |
Accretion to income |  |  | (46 | ) |  |  | (54 | ) |  |  | (55 | )
Disposals and other adjustments |  |  | - |  |  |  | (32 | ) |  |  | (21 | )
Reclassification from nonaccretable difference |  |  | 26 |  |  |  | 42 |  |  |  | 294 |
Ending balance |  | $ | 403 |  |  | $ | 423 |  |  | $ | 470 |

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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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