ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY OF FINANCING RECEIVABLES (Tables)

3 Months Ended

Mar. 31, 2019

Changes in the Allowance for Loan Losses

The following table presents changes in the allowance for loan losses disaggregated by the class of loans receivable for the three months ended March 31, 2019 and 2018: ໿

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(Dollars in thousands)	Commercial and Industrial			Construction			Commercial Real Estate			Residential Real Estate			Consumer and Other			Unallocated			Total
Three Months Ended:
March 31, 2019
Beginning balance	$	603		$	663		$	5,575		$	1,371		$	23		$	540		$	8,775
Charge-offs	(45		)	—			(5		)	(93		)	(25		)	—			(168		)
Recoveries	1			—			1			7			3			—			12
Provision	88			(304		)	733			64			18			(28		)	571
Ending balance	$	647		$	359		$	6,304		$	1,349		$	19		$	512		$	9,190

March 31, 2018
Beginning balance	$	208		$	336		$	5,185		$	1,032		$	26		$	548		$	7,335
Charge-offs	(11		)	—			—			(12		)	(11		)	—			(34		)
Recoveries	1			—			1			10			7			—			19
Provision	191			9			615			(58		)	9			(258		)	508
Ending balance	$	389		$	345		$	5,801		$	972		$	31		$	290		$	7,828

Allowances of Loan Losses and Loans Receivable by Class Disaggregated

The following table presents the balance of the allowance of loan losses and loans receivable by class at March 31, 2019 and December 31, 2018 disaggregated on the basis of our impairment methodology.

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	Allowance for Loan Losses						Loans Receivable
(Dollars in thousands)	Balance		Balance Loans Individually Evaluated for Impairment		Balance Related to Loans Collectively Evaluated for Impairment		Balance		Individually Evaluated for Impairment (a)		Collectively Evaluated for Impairment
March 31, 2019
Commercial and industrial	$	647	$	104	$	543	$	93,567	$	456	$	93,111
Construction	359		—		359		120,340		—		120,340
Commercial real estate	6,304		445		5,859		929,091		16,666		912,425
Residential real estate	1,349		199		1,150		369,100		4,551		364,549
Consumer and other loans	19		—		19		2,654		—		2,654
Unallocated	512		—		—		—		—		—
Total	$	9,190	$	748	$	7,930	$	1,514,752	$	21,673	$	1,493,079



December 31, 2018
Commercial and industrial	$	603	$	152	$	451	$	81,709	$	372	$	81,337
Construction	663		—		663		142,321		—		142,321
Commercial real estate	5,575		274		5,301		878,449		15,760		862,689
Residential real estate	1,371		89		1,282		370,955		4,572		366,383
Consumer and other loans	23		—		23		2,393		—		2,393
Unallocated	540		—		—		—		—		—
Total	$	8,775	$	515	$	7,720	$	1,475,827	$	20,704	$	1,455,123

(a) loans individually evaluated for impairment exclude PCI loans.

An Age Analysis of Loans Receivable

An age analysis of loans receivable, which were past due as of March 31, 2019 and December 31, 2018, is as follows:

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(Dollars in thousands)	30-59 Days Past Due		60-89 days Past Due		Greater Than 90 Days (a)		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing
March 31, 2019
Commercial and industrial	$	—	$	—	$	323	$	323	$	93,244	$	93,567	$	—
Construction	—		—		—		—		120,340		120,340		—
Commercial real estate	2,643		1,131		16,238		20,012		909,079		929,091		—
Residential real estate	743		269		4,077		5,089		364,011		369,100		—
Consumer and other	55		1		—		56		2,598		2,654		—
Total	$	3,441	$	1,401	$	20,638	$	25,480	$	1,489,272	$	1,514,752	$	—



December 31, 2018
Commercial and industrial	$	491	$	—	$	372	$	863	$	80,846	$	81,709	$	—
Construction	—		582		—		582		141,739		142,321		—
Commercial real estate	2,282		—		15,760		18,042		860,407		878,449		—
Residential real estate	393		35		4,572		5,000		365,955		370,955		—
Consumer and other	4		1		—		5		2,388		2,393		—
Total	$	3,170	$	618	$	20,704	$	24,492	$	1,451,335	$	1,475,827	$	—

(a) includes loans greater than 90 days past due and still accruing and non-accrual loans, excluding PCI loans.

Loans Which the Accrual of Interest has been Discontinued

Loans for which the accrual of interest has been discontinued, excluding PCI loans, at March 31, 2019 and December 31, 2018 were:

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(Dollars in thousands)	March 31, 2019		December 31, 2018
Commercial and industrial	$	323	$	372
Commercial real estate	16,238		15,760
Residential real estate	4,077		4,572
Total	$	20,638	$	20,704

Credit Risk Profile by Creditworthiness

The following tables illustrate our corporate credit risk profile by creditworthiness category as of March 31, 2019 and December 31, 2018: ໿

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(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2019
Commercial and industrial	$	92,910	$	21	$	636	$	—	$	93,567
Construction	118,666		1,224		450		—		120,340
Commercial real estate	905,959		5,855		17,277		—		929,091
	$	1,117,535	$	7,100	$	18,363	$	—	$	1,142,998



December 31, 2018
Commercial and industrial	$	80,977	$	32	$	700	$	—	$	81,709
Construction	141,871		—		450		—		142,321
Commercial real estate	855,180		3,908		19,361		—		878,449
	$	1,078,028	$	3,940	$	20,511	$	—	$	1,102,479



(Dollars in thousands)	Residential Real Estate		Consumer and other
March 31, 2019
Performing	$	365,023	$	2,654
Non-Performing	4,077		—
Total	$	369,100	$	2,654

December 31, 2018
Performing	$	366,383	$	2,393
Non-Performing	4,572		—
Total	$	370,955	$	2,393

Impaired Loans

The following table reflects information about our impaired loans, excluding PCI loans, by class as of March 31, 2019 and December 31, 2018:



	March 31, 2019						December 31, 2018
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance

With no related allowance recorded:
Commercial and industrial	$	77	$	180	$	—	$	—	$	10	$	—
Commercial real estate	15,734		16,283		—		13,745		13,745		—
Residential real estate	3,812		4,087		—		2,790		2,790		—



With an allowance recorded:
Commercial and industrial	379	424	104	372	572	152
Commercial real estate	932	1,145	445	2,015	2,437	274
Residential real estate	739	805	199	1,782	2,329	89



Total:
Commercial and industrial	456		604		104		372		582		152
Commercial real estate	16,666		17,428		445		15,760		16,182		274
Residential real estate	4,551		4,892		199		4,572		5,119		89
	$	21,673	$	22,924	$	748	$	20,704	$	21,883	$	515

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The following table presents the average recorded investment and income recognized for our impaired loans, excluding PCI loans, for the three months ended March 31, 2019 and 2018:



	For the Three Months Ended March 31, 2019				For the Three Months Ended March 31, 2018
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	79	$	—	$	10	$	—
Construction	—		—		53		—
Commercial real estate	15,469		124		3,871		12
Residential real estate	3,800		18		2,453		11
Total impaired loans without a related allowance	19,348		142		6,387		23

With an allowance recorded:
Commercial and industrial	335		5		—		—
Commercial real estate	936		5		930		—
Residential real estate	772		—		110		—
Total impaired loans with an allowance	2,043		10		1,040		—
Total impaired loans	$	21,391	$	152	$	7,427	$	23

Troubled Debt Restructured on Recorded Investment

The following table presents the recorded investment in troubled debt restructured loans, based on payment performance status:



(Dollars in thousands)	Commercial Real Estate		Commercial & Industrial		Residential Real Estate		Total
March 31, 2019
Performing	$	428	$	133	$	474	$	1,035
Non-performing	1,520		—		557		2,077
Total	$	1,948	$	133	$	1,031	$	3,112

December 31, 2018
Performing	$	431	$	—	$	475	$	906
Non-performing	1,531		—		517		2,048
Total	$	1,962	$	—	$	992	$	2,954

Troubled Debt Restructurings in Current Year



(Dollars in thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
March 31, 2019
Commercial & industrial	1	$	135	$	133
Residential real estate	1	48		47