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Non-Performing Assets Including Troubled Debt Restructurings (TDR) | 6 Months Ended
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Jun. 30, 2020
Non-Performing Assets Including Troubled Debt Restructurings (TDR) |
Non-Performing Assets Including Troubled Debt Restructurings (TDR) | 10. Non-Performing Assets Including Troubled Debt Restructurings (TDR) The following table presents information concerning non-performing assets including TDR (in thousands, except percentages):
|  | June 30, |  | December 31, |
|  | 2020 |  | 2019 |
Non-accrual loans |  |  |  |  |  |  |
Commercial and industrial |  | $ | 21 |  | $ | — |
Commercial loans secured by non-owner occupied real estate |  |  | 8 |  |  | 8 |
Real estate-residential mortgage |  |  | 2,296 |  |  | 1,479 |
Total |  |  | 2,325 |  |  | 1,487 |
Other real estate owned |  |  |  |  |  |  |
Real estate-residential mortgage |  |  | — |  |  | 37 |
Total |  |  | — |  |  | 37 |
TDR’s not in non-accrual |  |  |  |  |  |  |
Commercial and industrial |  |  | 797 |  |  | 815 |
Total |  |  | 797 |  |  | 815 |
Total non-performing assets including TDR |  | $ | 3,122 |  | $ | 2,339 |
Total non-performing assets as a percent of loans, net of unearned income, and other real estate owned |  |  | 0.34 | % |  | 0.26 | %
The Company had $1,581,000 of loans at June 30, 2020 compared to no loans at December 31, 2019 past due 90 days or more which were accruing interest. The following table sets forth, for the periods indicated, (1) the gross interest income that would have been recorded if non-accrual loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination if held for part of the period, (2) the amount of interest income actually recorded on such loans, and (3) the net reduction in interest income attributable to such loans (in thousands).
|  | Three months |  | Six months
|  | ended |  | ended
|  | June 30, |  | June 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Interest income due in accordance |  |  |  |  |  |  |  |  |  |  |  |
with original terms |  | $ | 21 |  | $ | 14 |  | $ | 38 |  | $ | 29
Interest income recorded |  |  | — |  |  | — |  |  | — |  |  | —
Net reduction in interest income |  | $ | 21 |  | $ | 14 |  | $ | 38 |  | $ | 29
Consistent with accounting and regulatory guidance, the Bank recognizes a TDR when the Bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that would not normally be considered. Regardless of the form of concession granted, the Bank’s objective in offering a TDR is to increase the probability of repayment of the borrower’s loan. The Company had no loans modified as TDRs during the three-month period ending June 30, 2020. The following table details the loan modified as a TDR during the six-month period ended June 30, 2020 (dollars in thousands).
Loans in accrual status |  | # of Loans |  | Current Balance |  | Concession Granted
Commercial and industrial |  | 1 |  | $ | 750 |  | Subsequent modification of a TDR - extension of maturity date with a below market interest rate
The following table details the loan modified as a TDR during the three and six month periods ended June 30, 2019 (dollars in thousands).
Loans in accrual status |  | # of Loans |  | Current Balance |  | Concession Granted
Commercial and industrial |  | 1 |  | $ | 750 |  | Extension of maturity date with a below market interest rate
All TDRs are individually evaluated for impairment and a related allowance is recorded, as needed. The specific ALL reserve for loans modified as TDRs was $84,000 and $92,000 as of June 30, 2020 and December 31, 2019, respectively. The Company had no loans that were classified as TDRs or were subsequently modified during each 12-month period prior to the current reporting periods, which begin January 1, 2019 and 2018 (six month periods) and April 1, 2019 and 2018 (three month periods), respectively, and that subsequently defaulted during these reporting periods. The Company is unaware of any additional loans which are required to either be charged-off or added to the non-performing asset totals disclosed above. Loan Modifications Related to COVID-19 Under section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications. A financial institution can then suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes and reporting the loan as past due. Financial institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification made between March 1, 2020 and the earlier of either December 31, 2020 or the 60th day after the end of the COVID-19 national emergency. Similarly, the Financial Accounting Standards Board has confirmed that short-term modifications made on a good-faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs. In response to the COVID-19 pandemic, the Company has prudently executed loan modifications for existing loan customers. The following table presents information regarding loans which were subject to a loan modification related to COVID-19, as of June 30, 2020. Note that the percentage of outstanding loans presented below was calculated based on loan totals excluding PPP loans. Management believes that this method more accurately reflects the concentration of COVID-19 related modifications within the loan portfolio.
|  |  |  |  | % of |
|  | Balance |  | Outstanding Non-PPP |
|  | (in thousands) |  | Loans |
CRE/Commercial |  | $ | 190,276 |  | 30.4 | %
Home Equity/Consumer |  |  | 5,890 |  | 6.0 |
Residential Mortgage |  |  | 3,839 |  | 2.8 |
Total |  | $ | 200,005 |  | 23.2 |
The balance of loan modifications related to COVID-19 at June 30, 2020 represents a decrease of $11.2 million, or 5.3%, from the balance of loans modified for COVID-19 reported in the first quarter 2020 10-Q which totaled $211 million. Requested modifications primarily consist of the deferral of principal and/or interest payments for a period of three to six months and maturity date extensions. The following table presents the composition of the types of payment relief that have been granted.
|  | Number |  | Balance
|  | of Loans |  | (in thousands)
Type of Payment Relief |  |  |  |  |
Interest only payments |  | 83 |  | $ | 87,881
Complete payment deferrals |  | 296 |  |  | 103,378
Maturity date extensions |  | 4 |  |  | 8,746
Total |  | 383 |  | $ | 200,005
Management is carefully monitoring asset quality with a particular focus on customers that have requested payment deferrals during this difficult economic time. The Asset Quality Task Force is meeting monthly to review these particular relationships, receiving input from the business lenders regarding their ongoing discussions with the borrowers.

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- Definition Non-performing Assets Including Troubled Debt Restructurings (TDR). + References No definition available. + Details
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- Definition Non performing assets including trouble debt restructurings. + References No definition available. + Details
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