Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2019


(Dollars in thousands)	September 30, 2019		December 31, 2018
Construction	$	116,368	$	127,572
Residential real estate		442,324		429,560
Commercial real estate		558,741		523,427
Commercial		105,583		107,522
Consumer		12,019		7,274
Total loans		1,235,035		1,195,355
Allowance for credit losses		(10,438)		(10,343)
Total loans, net	$	1,224,597	$	1,185,012

Allowance for Credit Losses on Financing Receivables


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
September 30, 2019
Loans individually evaluated for impairment	$	43	$	6,712	$	13,639	$	436	$	—	$	20,830
Loans collectively evaluated for impairment		116,325		435,612		545,102		105,147		12,019		1,214,205
Total loans	$	116,368	$	442,324	$	558,741	$	105,583	$	12,019	$	1,235,035

Allowance for credit losses allocated to:
Loans individually evaluated for impairment	$	—	$	441	$	452	$	62	$	—	$	955
Loans collectively evaluated for impairment		1,541		2,240		3,396		1,954		352		9,483
Total allowance	$	1,541	$	2,681	$	3,848	$	2,016	$	352	$	10,438


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
December 31, 2018
Loans individually evaluated for impairment	$	2,893	$	8,553	$	13,532	$	340	$	—	$	25,318
Loans collectively evaluated for impairment		124,679		421,007		509,895		107,182		7,274		1,170,037
Total loans	$	127,572	$	429,560	$	523,427	$	107,522	$	7,274	$	1,195,355

Allowance for credit losses allocated to:
Loans individually evaluated for impairment	$	320	$	301	$	104	$	36	$	—	$	761
Loans collectively evaluated for impairment		2,342		2,052		2,973		1,913		302		9,582
Total allowance	$	2,662	$	2,353	$	3,077	$	1,949	$	302	$	10,343

Impaired Financing Receivables



			Recorded		Recorded				September 30, 2019
	Unpaid		investment		investment				Quarter-to-date		Average		Interest
	principal		with no		with an		Related		average recorded		recorded		recorded
(Dollars in thousands)	balance		allowance		allowance		allowance		investment		investment		investment
September 30, 2019
Impaired nonaccrual loans:
Construction	$	—		—		—		—		—		1,435		—
Residential real estate		2,366		489		1,570		256		2,642		2,904		—
Commercial real estate		10,834		8,901		1,262		430		10,221		9,717		—
Commercial		425		—		308		4		310		316		—
Consumer		—		—		—		—		—		—		—
Total	$	13,625	$	9,390	$	3,140	$	690	$	13,173	$	14,372	$	—

Impaired accruing TDRs:
Construction	$	43	$	43	$	—	$	—	$	44	$	47	$	9
Residential real estate		4,069		1,260		2,809		185		4,052		4,193		130
Commercial real estate		3,476		2,795		681		22		3,479		3,515		93
Commercial		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Total	$	7,588	$	4,098	$	3,490	$	207	$	7,575	$	7,755	$	232

Other Impaired accruing loans:
Construction	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential real estate		584		584		—		—		—		—		—
Commercial real estate		—		—		—		—		—		—		—
Commercial		128		—		128		58		—		—		—
Consumer		—		—		—		—		—		—		—
Total	$	712	$	584	$	128	$	58	$	—	$	—	$	—

Total impaired loans:
Construction	$	43	$	43	$	—	$	—	$	44	$	1,482	$	9
Residential real estate		6,435		1,749		4,379		441		6,694		7,097		130
Commercial real estate		14,310		11,696		1,943		452		13,700		13,232		93
Commercial		425		—		308		4		310		316		—
Consumer		—		—		—		—		—		—		—
Total	$	21,213	$	13,488	$	6,630	$	897	$	20,748	$	22,127	$	232



			Recorded		Recorded				September 30, 2018
	Unpaid		investment		investment				Quarter-to-date		Average		Interest
	principal		with no		with an		Related		average recorded		recorded		income
(Dollars in thousands)	balance		allowance		allowance		allowance		investment		investment		recognized
December 31, 2018
Impaired nonaccrual loans:
Construction	$	3,219	$	127	$	2,715	$	320	$	3,043	$	3,006	$	—
Residential real estate		4,281		2,605		1,494		118		1,710		1,573		—
Commercial real estate		10,029		9,307		67		67		1,742		1,438		—
Commercial		445		—		340		36		327		338		—
Consumer		—		—		—		—		—		—		—
Total	$	17,974	$	12,039	$	4,616	$	541	$	6,822	$	6,355	$	—

Impaired accruing TDRs:
Construction	$	51	$	51	$	—	$	—	$	145	$	1,138	$	13
Residential real estate		4,454		1,440		3,014		183		4,709		4,613		46
Commercial real estate		4,158		1,286		2,872		37		4,307		4,499		41
Commercial		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Total	$	8,663	$	2,777	$	5,886	$	220	$	9,161	$	10,250	$	100

Total impaired loans:
Construction	$	3,270	$	178	$	2,715	$	320	$	3,188	$	4,144	$	13
Residential real estate		8,735		4,045		4,508		301		6,419		6,186		46
Commercial real estate		14,187		10,593		2,939		104		6,049		5,937		41
Commercial		445		—		340		36		327		338		—
Consumer		—		—		—		—		—		—		—
Total	$	26,637	$	14,816	$	10,502	$	761	$	15,983	$	16,605	$	100

Troubled Debt Restructurings on Financing Receivables

The following tables provide a roll-forward for TDRs as of September 30, 2019 and September 30, 2018.


	1/1/2019												9/30/2019
	TDR		New		Disbursements		Charge-		Reclassifications/				TDR		Related
(Dollars in thousands)	Balance		TDRs		(Payments)		offs		Transfer In/(Out)		Payoffs		Balance		Allowance
For nine months ended
September 30, 2019
Accruing TDRs
Construction	$	51	$	—	$	(8)	$	—	$	—	$	—	$	43	$	—
Residential real estate		4,454		41		(73)		—		—		(353)		4,069		185
Commercial real estate		4,158		—		(682)		—		—		—		3,476		22
Commercial		—		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—		—
Total	$	8,663	$	41	$	(763)	$	—	$	—	$	(353)	$	7,588	$	207

Nonaccrual TDRs
Construction	$	2,798	$	—	$	(1,379)	$	(3)	$	—	$	—	$	1,416	$	133
Residential real estate		—		—		—		—		—		—		—		—
Commercial real estate		—		—		—		—		—		—		—		—
Commercial		320		—		(12)		—		—		—		308		4
Consumer		—		—		—		—		—		—		—		—
Total	$	3,118	$	—	$	(1,391)	$	(3)	$	—	$	—	$	1,724	$	137

Total	$	11,781	$	41	$	(2,154)	$	(3)	$	—	$	(353)	$	9,312	$	344


	1/1/2018												9/30/2018
	TDR		New		Disbursements		Charge-		Reclassifications/				TDR		Related
(Dollars in thousands)	Balance		TDRs		(Payments)		offs		Transfer In/(Out)		Payoffs		Balance		Allowance
For nine months ended
September 30, 2018
Accruing TDRs
Construction	$	3,972	$	—	$	(225)	$	(379)	$	(696)	$	(2,600)	$	72	$	19
Residential real estate		4,536		—		(63)		—		542		(351)		4,664		194
Commercial real estate		4,818		—		(402)		—		—		(219)		4,197		32
Commercial		—		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—		—
Total	$	13,326	$	—	$	(690)	$	(379)	$	(154)	$	(3,170)	$	8,933	$	245

Nonaccrual TDRs
Construction	$	2,878	$	—	$	(73)	$	—	$	83	$	—	$	2,888	$	356
Residential real estate		—		—		—		(80)		80		—		—		—
Commercial real estate		83		—		—		—		(83)		—		—		—
Commercial		337		—		(13)		—		—		—		324		20
Consumer		—		—		—		—		—		—		—		—
Total	$	3,298	$	—	$	(86)	$	(80)	$	80	$	—	$	3,212	$	376

Total	$	16,624	$	—	$	(776)	$	(459)	$	(74)	$	(3,170)	$	12,145	$	621

The following tables provide information on loans that were modified and considered TDRs during the nine months ended September 30, 2019 and September 30, 2018.


		Premodification		Postmodification
		outstanding		outstanding
	Number of	recorded		recorded		Related
(Dollars in thousands)	contracts	investment		investment		allowance
TDRs:
For nine months ended
September 30, 2019
Construction	—	$	—	$	—	$	—
Residential real estate	1		75		41		—
Commercial real estate	—		—		—		—
Commercial	—		—		—		—
Consumer	—		—		—		—
Total	1	$	75	$	41	$	—

For nine months ended
September 30, 2018
Construction	—	$	—	$	—	$	—
Residential real estate	—		—		—		—
Commercial real estate	—		—		—		—
Commercial	—		—		—		—
Consumer	—		—		—		—
Total	—	$	—	$	—	$	—

Troubled Debt Restructurings That Defaulted On Financing Receivables


	Number of	Recorded		Related
(Dollars in thousands)	contracts	investment		allowance
TDRs that subsequently defaulted:
For nine months ended
September 30, 2019
Construction	—	$	—	$	—
Residential real estate	—		—		—
Commercial real estate	—		—		—
Commercial	—		—		—
Consumer	—		—		—
Total	—	$	—	$	—

For nine months ended
September 30, 2018
Construction	1	$	379	$	—
Residential real estate	1		154		—
Commercial real estate	—		—		—
Commercial	—		—		—
Consumer	—		—		—
Total	2	$	533	$	—

Financing Receivable Credit Quality Indicators


					Special
(Dollars in thousands)	Pass/Performing		Pass/Watch		Mention		Substandard		Doubtful		Total
September 30, 2019
Construction	$	100,669	$	13,560	$	2,139	$	—	$	—	$	116,368
Residential real estate		405,154		28,927		5,408		2,835		—		442,324
Commercial real estate		427,825		110,846		4,999		15,071		—		558,741
Commercial		85,507		19,725		10		341		—		105,583
Consumer		11,619		397		—		3		—		12,019
Total	$	1,030,774	$	173,455	$	12,556	$	18,250	$	—	$	1,235,035


					Special
(Dollars in thousands)	Pass/Performing		Pass/Watch		Mention		Substandard		Doubtful		Total
December 31, 2018
Construction	$	93,977	$	30,735	$	—	$	2,860	$	—	$	127,572
Residential real estate		386,553		33,739		3,769		5,499		—		429,560
Commercial real estate		389,219		113,873		4,515		15,820		—		523,427
Commercial		90,777		15,727		642		376		—		107,522
Consumer		6,805		466		—		3		—		7,274
Total	$	967,331	$	194,540	$	8,926	$	24,558	$	—	$	1,195,355

Past Due Financing Receivables


	Accruing
				30‑59 days			60‑89 days			Greater than			Total
(Dollars in thousands)	Current			past due			past due			90 days			past due			Nonaccrual			Total
September 30, 2019
Construction	$	116,111		$	—		$	257		$	—		$	257		$	—		$	116,368
Residential real estate		433,458			5,195			1,028			584			6,807			2,059			442,324
Commercial real estate		546,492			1,894			192			—			2,086			10,163			558,741
Commercial		104,809			337			1			128			466			308			105,583
Consumer		11,985			18			16			—			34			—			12,019
Total	$	1,212,855		$	7,444		$	1,494		$	712		$	9,650		$	12,530		$	1,235,035
Percent of total loans		98.2	%		0.6	%		0.1	%		0.1	%		0.8	%		1.0	%		100.0	%


	Accruing
				30‑59 days			60‑89 days			Greater than			Total
(Dollars in thousands)	Current			past due			past due			90 days			past due			Nonaccrual			Total
December 31, 2018
Construction	$	124,535		$	195		$	—		$	—		$	195		$	2,842		$	127,572
Residential real estate		423,732			1,384			206			139			1,729			4,099			429,560
Commercial real estate		512,252			253			1,548			—			1,801			9,374			523,427
Commercial		107,089			83			10			—			93			340			107,522
Consumer		7,238			30			6			—			36			—			7,274
Total	$	1,174,846		$	1,945		$	1,770		$	139		$	3,854		$	16,655		$	1,195,355
Percent of total loans		98.3	%		0.2	%		0.1	%		—	%		0.3	%		1.4	%		100.0	%

Consolidated Allowance for Credit Losses on Financing Receivables


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
For three months ended
September 30, 2019
Allowance for credit losses:
Beginning Balance	$	2,443	$	2,155	$	3,367	$	2,057	$	283	$	10,305

Charge-offs		—		(86)		—		(98)		—		(184)
Recoveries		1		12		7		96		1		117
Net charge-offs		1		(74)		7		(2)		1		(67)

Provision		(903)		600		474		(39)		68		200
Ending Balance	$	1,541	$	2,681	$	3,848	$	2,016	$	352	$	10,438


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
For three months ended
September 30, 2018
Allowance for credit losses:
Beginning Balance	$	2,593	$	2,150	$	2,845	$	2,210	$	323	$	10,121

Charge-offs		—		(109)		—		(137)		—		(246)
Recoveries		3		5		5		122		11		146
Net charge-offs		3		(104)		5		(15)		11		(100)

Provision		188		95		87		15		(78)		307
Ending Balance	$	2,784	$	2,141	$	2,937	$	2,210	$	256	$	10,328


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
For nine months ended
September 30, 2019
Allowance for credit losses:
Beginning Balance	$	2,662	$	2,353	$	3,077	$	1,949	$	302	$	10,343

Charge-offs		(3)		(509)		—		(260)		(29)		(801)
Recoveries		8		23		114		248		3		396
Net charge-offs		5		(486)		114		(12)		(26)		(405)

Provision		(1,126)		814		657		79		76		500
Ending Balance	$	1,541	$	2,681	$	3,848	$	2,016	$	352	$	10,438


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
For nine months ended
September 30, 2018
Allowance for credit losses:
Beginning Balance	$	2,460	$	2,284	$	2,594	$	2,241	$	202	$	9,781

Charge-offs		(379)		(288)		—		(263)		(24)		(954)
Recoveries		18		91		23		144		11		287
Net charge-offs		(361)		(197)		23		(119)		(13)		(667)

Provision		685		54		320		88		67		1,214
Ending Balance	$	2,784	$	2,141	$	2,937	$	2,210	$	256	$	10,328