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Loans and Allowance for Lease and Loan Losses | 12 Months Ended
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Dec. 31, 2019
Receivables [Abstract] |
Loans and Allowance for Lease and Loan Losses | 3. Loans and Allowance for Lease and Loan Losses A summary of the Company’s loan portfolio is as follows:
|  | At December 31,
|  | 2019 |  | 2018
Commercial real estate loans: |  |  |  |  |  |
Construction |  | $ | 20,354 |  | $ | 12,870
Non-residential |  |  | 228,157 |  |  | 197,499
Multi-family |  |  | 20,129 |  |  | 12,661
Residential real estate loans |  |  | 43,726 |  |  | 43,534
Commercial and industrial loans |  |  | 90,554 |  |  | 83,203
Consumer loans: |  |  |  |  |  |
Indirect automobile |  |  | 360,569 |  |  | 297,144
Home equity |  |  | 16,276 |  |  | 19,269
Other consumer |  |  | 9,752 |  |  | 10,826
Total gross loans |  |  | 789,517 |  |  | 677,006
Net deferred loan costs |  |  | 9,908 |  |  | 8,042
Allowance for loan losses |  |  | (5,954) |  |  | (6,646)
Total net loans |  | $ | 793,471 |  | $ | 678,402
At December 31, 2019 and 2018, the unpaid principal balances of loans held for sale, included in the residential real estate category above, were $2,684 and $888, respectively. The following tables present the classes of the loan portfolio summarized by the pass category and the criticized categories of special mention and substandard within the internal risk system:
|  | December 31, 2019
|  | Pass |  | Special Mention |  | Substandard |  | Total
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | 20,354 |  | $ | — |  | $ | — |  | $ | 20,354
Non-residential |  |  | 219,485 |  |  | 4,285 |  |  | 4,387 |  |  | 228,157
Multifamily |  |  | 19,744 |  |  | — |  |  | 385 |  |  | 20,129
Residential real estate |  |  | 41,385 |  |  | — |  |  | 2,341 |  |  | 43,726
Commercial and industrial |  |  | 88,874 |  |  | 597 |  |  | 1,083 |  |  | 90,554
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 359,616 |  |  | — |  |  | 953 |  |  | 360,569
Home equity |  |  | 15,861 |  |  | — |  |  | 415 |  |  | 16,276
Other consumer |  |  | 9,741 |  |  | — |  |  | 11 |  |  | 9,752
Total |  | $ | 775,060 |  | $ | 4,882 |  | $ | 9,575 |  | $ | 789,517
|  | December 31, 2018
|  | Pass |  | Special Mention |  | Substandard |  | Total
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | 12,870 |  | $ | — |  | $ | — |  | $ | 12,870
Non-residential |  |  | 186,020 |  |  | 6,840 |  |  | 4,639 |  |  | 197,499
Multifamily |  |  | 12,261 |  |  | — |  |  | 400 |  |  | 12,661
Residential real estate |  |  | 41,249 |  |  | — |  |  | 2,285 |  |  | 43,534
Commercial and industrial |  |  | 81,111 |  |  | 965 |  |  | 1,127 |  |  | 83,203
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 296,692 |  |  | — |  |  | 452 |  |  | 297,144
Home equity |  |  | 19,071 |  |  | — |  |  | 198 |  |  | 19,269
Other consumer |  |  | 10,816 |  |  | — |  |  | 10 |  |  | 10,826
Total |  | $ | 660,090 |  | $ | 7,805 |  | $ | 9,111 |  | $ | 677,006
Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The past due status of all classes of loans is determined based on contractual due dates for loan payments. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans:
|  | December 31, 2019
|  |  |  |  |  |  |  | Greater Than |  |  |  |
|  |  |  | 30-59 Days |  | 60-89 Days |  | 90 Days Past |  | Total Loans |  |
|  | Current |  | Past Due |  | Past Due |  | Due |  | Receivable |  | Non-accrual
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | 20,354 |  | $ | — |  | $ | — |  | $ | — |  | $ | 20,354 |  | $ | —
Non-residential |  |  | 222,953 |  |  | 409 |  |  | 884 |  |  | 3,911 |  |  | 228,157 |  |  | 3,911
Multifamily |  |  | 19,744 |  |  | — |  |  | — |  |  | 385 |  |  | 20,129 |  |  | 385
Residential real estate |  |  | 42,403 |  |  | 427 |  |  | 116 |  |  | 780 |  |  | 43,726 |  |  | 2,341
Commercial and industrial |  |  | 89,401 |  |  | 288 |  |  | 198 |  |  | 667 |  |  | 90,554 |  |  | 905
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 351,840 |  |  | 6,494 |  |  | 1,294 |  |  | 941 |  |  | 360,569 |  |  | 953
Home equity |  |  | 15,726 |  |  | 142 |  |  | 91 |  |  | 317 |  |  | 16,276 |  |  | 415
Other consumer |  |  | 9,492 |  |  | 201 |  |  | 48 |  |  | 11 |  |  | 9,752 |  |  | 11
Total |  | $ | 771,913 |  | $ | 7,961 |  | $ | 2,631 |  | $ | 7,012 |  | $ | 789,517 |  | $ | 8,921
|  | December 31, 2018
|  |  |  |  |  |  |  | Greater Than |  |  |  |
|  |  |  | 30-59 Days |  | 60-89 Days |  | 90 Days Past |  | Total Loans |  |
|  | Current |  | Past Due |  | Past Due |  | Due |  | Receivable |  | Non-accrual
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | 12,870 |  | $ | — |  | $ | — |  | $ | — |  | $ | 12,870 |  | $ | —
Non-residential |  |  | 193,273 |  |  | 1,466 |  |  | 253 |  |  | 2,507 |  |  | 197,499 |  |  | 2,507
Multifamily |  |  | 12,487 |  |  | 174 |  |  | — |  |  | — |  |  | 12,661 |  |  | —
Residential real estate |  |  | 42,083 |  |  | 305 |  |  | 615 |  |  | 531 |  |  | 43,534 |  |  | 2,208
Commercial and industrial |  |  | 82,992 |  |  | 206 |  |  | 1 |  |  | 4 |  |  | 83,203 |  |  | 297
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 291,369 |  |  | 4,429 |  |  | 915 |  |  | 431 |  |  | 297,144 |  |  | 452
Home equity |  |  | 18,905 |  |  | 264 |  |  | — |  |  | 100 |  |  | 19,269 |  |  | 198
Other consumer |  |  | 10,601 |  |  | 186 |  |  | 29 |  |  | 10 |  |  | 10,826 |  |  | 10
Total |  | $ | 664,580 |  | $ | 7,030 |  | $ | 1,813 |  | $ | 3,583 |  | $ | 677,006 |  | $ | 5,672
There were no loans greater than 90 days past due and still accruing as of December 31, 2019 or 2018. The following tables summarize information in regards to impaired loans by loan portfolio class:
|  | December 31, 2019
|  | Recorded |  | Unpaid Principal |  | Related |  | Average Recorded
|  | Investment |  | Balance |  | Allowance |  | Investment
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Non-residential |  | $ | 3,911 |  | $ | 5,733 |  | $ | — |  | $ | 3,209
Multifamily |  |  | 385 |  |  | 409 |  |  | — |  |  | 192
Residential real estate |  |  | 2,341 |  |  | 2,850 |  |  | — |  |  | 2,313
Commercial and industrial |  |  | 905 |  |  | 1,109 |  |  | — |  |  | 601
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 607 |  |  | 740 |  |  | — |  |  | 441
Home equity |  |  | 415 |  |  | 467 |  |  | — |  |  | 307
Other consumer |  |  | 11 |  |  | 11 |  |  | — |  |  | 10
Total |  | $ | 8,575 |  | $ | 11,319 |  | $ | — |  | $ | 7,073
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  | $ | 346 |  | $ | 376 |  | $ | 107 |  | $ | 262
Total |  | $ | 346 |  | $ | 376 |  | $ | 107 |  | $ | 262
Total: |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Non-residential |  | $ | 3,911 |  | $ | 5,733 |  | $ | — |  | $ | 3,209
Multifamily |  |  | 385 |  |  | 409 |  |  | — |  |  | 192
Residential real estate |  |  | 2,341 |  |  | 2,850 |  |  | — |  |  | 2,313
Commercial and industrial |  |  | 905 |  |  | 1,109 |  |  | — |  |  | 601
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 953 |  |  | 1,116 |  |  | 107 |  |  | 703
Home equity |  |  | 415 |  |  | 467 |  |  | — |  |  | 307
Other consumer |  |  | 11 |  |  | 11 |  |  | — |  |  | 10
Total |  | $ | 8,921 |  | $ | 11,695 |  | $ | 107 |  | $ | 7,335
|  | December 31, 2018
|  | Recorded |  | Unpaid Principal |  | Related |  | Average Recorded
|  | Investment |  | Balance |  | Allowance |  | Investment
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | — |  | $ | — |  | $ | — |  | $ | 563
Non-residential |  |  | 2,507 |  |  | 2,601 |  |  | — |  |  | 3,023
Residential real estate |  |  | 2,285 |  |  | 2,841 |  |  | — |  |  | 2,235
Commercial and industrial |  |  | 297 |  |  | 421 |  |  | — |  |  | 758
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 274 |  |  | 320 |  |  | — |  |  | 242
Home equity |  |  | 198 |  |  | 211 |  |  | — |  |  | 158
Other consumer |  |  | 10 |  |  | 10 |  |  | — |  |  | 5
Total |  | $ | 5,571 |  | $ | 6,404 |  | $ | — |  | $ | 6,984
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Non-residential |  | $ | — |  | $ | — |  | $ | — |  | $ | 451
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | 9
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 178 |  |  | 191 |  |  | 50 |  |  | 205
Other consumer |  |  | — |  |  | — |  |  | — |  |  | 2
Total |  | $ | 178 |  | $ | 191 |  | $ | 50 |  | $ | 667
Total: |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Construction |  | $ | — |  | $ | — |  | $ | — |  | $ | 563
Non-residential |  |  | 2,507 |  |  | 2,601 |  |  | — |  |  | 3,474
Residential real estate |  |  | 2,285 |  |  | 2,841 |  |  | — |  |  | 2,235
Commercial and industrial |  |  | 297 |  |  | 421 |  |  | — |  |  | 767
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Indirect automobile |  |  | 452 |  |  | 511 |  |  | 50 |  |  | 447
Home equity |  |  | 198 |  |  | 211 |  |  | — |  |  | 158
Other consumer |  |  | 10 |  |  | 10 |  |  | — |  |  | 7
Total |  | $ | 5,749 |  | $ | 6,595 |  | $ | 50 |  | $ | 7,651
A loan is considered impaired when based on current information and events it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans and loans modified as TDRs. Loan modifications, which resulted in these loans being considered TDRs, are primarily in the form of rate concessions and extensions of maturity dates. The Company does not generally recognize interest income on a loan in an impaired status. At December 31, 2019 and 2018, three loans totaling $1,659 and three loans totaling $1,774, respectively, which were included in impaired loans, were identified as TDRs. In 2018, the Company restructured two loans, a residential mortgage and home equity loan, into a single residential mortgage, with a carrying value of $117, which included both rate and term modifications. In 2019, there were no new TDRs. Interest income on impaired loans was immaterial during each of the periods presented. At December 31, 2019 and 2018, all loans were performing in accordance with their restructured terms. During the year ended December 31, 2018, one loan for $19 had defaulted in its modified terms and was charged off. At December 31, 2019 and 2018, the Company had no commitments to advance additional funds to borrowers under TDR loans. The Company has transferred a portion of its originated commercial real estate loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Company’s accompanying statements of financial condition. The Company and participating lenders share ratably in any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments to participating lenders and disburses required escrow funds to relevant parties. At December 31, 2019 and 2018, the Company was servicing loans for participants aggregating $4.6 million and $6.2 million, respectively. The Company services certain loans that it has sold without recourse to third parties. The aggregate balances of loans serviced for others were $270,730 and $255,892 as of December 31, 2019 and 2018, respectively. The balance of capitalized servicing rights, included in other assets at December 31, 2019 and 2018, were $2,226 and $2,278, respectively. Fair value exceeds carrying value. No impairment charges related to servicing rights were recognized during the years ended December 31, 2019 or 2018. The following tables summarize the segments of the loan portfolio and the allowance for lease and loan losses, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment and the activity in the allowance for lease and loan losses for the periods then ended:
|  | Commercial |  | Residential |  | Commercial |  |  |  |  |  |
|  | Real Estate |  | Real Estate |  | and Industrial |  | Indirect |  | Consumer |  | Totals
|  | Year ended December 31, 2019
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 1,080 |  | $ | 320 |  | $ | 1,542 |  | $ | 2,915 |  | $ | 789 |  | $ | 6,646
Provision for loan losses |  |  | 2,679 |  |  | (302) |  |  | (645) |  |  | 1,332 |  |  | (604) |  |  | 2,460
Loans charged-off |  |  | (1,750) |  |  | — |  |  | (312) |  |  | (2,083) |  |  | (132) |  |  | (4,277)
Recoveries |  |  | — |  |  | 81 |  |  | 18 |  |  | 953 |  |  | 73 |  |  | 1,125
Ending balance |  | $ | 2,009 |  | $ | 99 |  | $ | 603 |  | $ | 3,117 |  | $ | 126 |  | $ | 5,954
Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans deemed impaired |  | $ | — |  | $ | — |  | $ | — |  | $ | 107 |  | $ | — |  | $ | 107
Loans not deemed impaired |  | $ | 2,009 |  | $ | 99 |  | $ | 603 |  | $ | 3,010 |  | $ | 126 |  | $ | 5,847
Loan receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 268,640 |  | $ | 43,726 |  | $ | 90,554 |  | $ | 360,569 |  | $ | 26,028 |  | $ | 789,517
Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans deemed impaired |  | $ | 4,296 |  | $ | 2,341 |  | $ | 905 |  | $ | 953 |  | $ | 426 |  | $ | 8,921
Loans not deemed impaired |  | $ | 264,344 |  | $ | 41,385 |  | $ | 89,649 |  | $ | 359,616 |  | $ | 25,602 |  | $ | 780,596
|  | Commercial |  | Residential |  | Commercial |  |  |  |  |  |
|  | Real Estate |  | Real Estate |  | and Industrial |  | Indirect |  | Consumer |  | Totals
|  | Year ended December 31, 2018
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 1,305 |  | $ | 455 |  | $ | 879 |  | $ | 2,150 |  | $ | 668 |  | $ | 5,457
Provision for loan losses |  |  | (45) |  |  | (140) |  |  | 578 |  |  | 1,539 |  |  | 168 |  |  | 2,100
Loans charged-off |  |  | (303) |  |  | — |  |  | (37) |  |  | (1,607) |  |  | (66) |  |  | (2,013)
Recoveries |  |  | 123 |  |  | 5 |  |  | 122 |  |  | 833 |  |  | 19 |  |  | 1,102
Ending balance |  | $ | 1,080 |  | $ | 320 |  | $ | 1,542 |  | $ | 2,915 |  | $ | 789 |  | $ | 6,646
Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans deemed impaired |  | $ | — |  | $ | — |  | $ | — |  | $ | 50 |  | $ | — |  | $ | 50
Loans not deemed impaired |  | $ | 1,080 |  | $ | 320 |  | $ | 1,542 |  | $ | 2,865 |  | $ | 789 |  | $ | 6,596
Loan receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 223,030 |  | $ | 43,534 |  | $ | 83,203 |  | $ | 297,144 |  | $ | 30,095 |  | $ | 677,006
Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans deemed impaired |  | $ | 2,507 |  | $ | 2,285 |  | $ | 297 |  | $ | 452 |  | $ | 208 |  | $ | 5,749
Loans not deemed impaired |  | $ | 220,523 |  | $ | 41,249 |  | $ | 82,906 |  | $ | 296,692 |  | $ | 29,887 |  | $ | 671,257
In the normal course of business, the Company grants loans to officers, directors and other related parties. Balances and activity of such loans during the years presented were not material.

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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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