8. Troubled Debt Restructuring

6 Months Ended

Jun. 30, 2017

Troubled Debt Restructuring Abstract

8. Troubled Debt Restructuring

In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which are considered in the qualitative factors within the allowance. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance for loan loss methodology. Additionally, specific reserves may be established on restructured loans which are evaluated individually for impairment.

During the six months ended June 30, 2017, there was one loan modification that was considered to be troubled debt restructuring. This loan was modified during the three months ended June 30, 2017, there were no loan modifications that would be considered a troubled debt restructuring during the first quarter of 2017. Modifications may have included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof. 

	June 30, 2017
			Pre-Modification		Post-Modification
(dollars in thousands)			Outstanding		Outstanding
Troubled Debt Restructurings	Number of Contracts		Recorded Investment		Recorded Investment
Consumer		1	$	20	$	20
Total		1	$	20	$	20

 At June 30, 2017, there was one loan restructured in the previous 12 months in default or on nonaccrual status.  A restructured loan is considered in default when it becomes 90 days past due.

	June 30, 2017
			Pre-Modification		Post-Modification
(dollars in thousands)			Outstanding		Outstanding
Troubled Debt Restructurings	Number of Contracts		Recorded Investment		Recorded Investment
Real Estate		1	$	67	$	67
Total		1	$	67	$	67

During the six months ended June 30, 2016, there were six loan modifications that were considered to be troubled debt restructurings.

	Six Months ended June 30, 2016
			Pre-Modification		Post-Modification
(dollars in thousands)			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Commercial		1	$	27	$	27
Real Estate		2		143		143
Consumer		3		36		36
Total		6	$	206	$	206

During the quarter ended June 30, 2016, there were five loans modifications that were considered to be troubled debt restructurings.

	Three Months ended June 30, 2016
			Pre-Modification		Post-Modification
(dollars in thousands)			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Commercial		1	$	27	$	27
Real Estate		2		143		143
Consumer		2		19		19
Total		5	$	189	$	189

At June 30, 2016, six loans that had been restructured in the previous 12 months, were in default or were on nonaccrual status.  A restructured loan is considered in default when it becomes 90 days past due.

	June 30, 2016
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Real Estate		5	$	1,528	$	1,528
Consumer		1		16		16
Total		6	$	1,544	$	1,544