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LOANS (Tables)
 6 Months Ended
Jun. 30, 2017
LOANS [Abstract]  
Major Classifications of Loans
Major classifications of loans at June 30, 2017 and December 31, 2016 are summarized as follows:

  
2017
  
2016
 
Residential real estate
 
$
340,288
  
$
342,294
 
Multifamily real estate
  
78,352
   
74,165
 
Commercial real estate:
        
Owner occupied
  
133,846
   
129,370
 
Non owner occupied
  
227,700
   
220,836
 
Commercial and industrial
  
77,900
   
76,736
 
Consumer
  
29,747
   
30,916
 
All other
  
150,121
   
150,506
 
  
$
1,037,954
  
$
1,024,823
 
Activity in the Allowance for Loan Losses by Portfolio Segment
Activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2017 was as follows:

Loan Class
 
Balance Dec 31, 2016
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance June 30, 2017
 
                
Residential real estate
 
$
2,948
  
$
193
  
$
(199
)
 
$
31
  
$
2,973
 
Multifamily real estate
  
785
   
552
   
-
   
-
   
1,337
 
Commercial real estate:
                    
Owner occupied
  
1,543
   
(166
)
  
-
   
241
   
1,618
 
Non owner occupied
  
2,350
   
(12
)
  
(4
)
  
-
   
2,334
 
Commercial and industrial
  
1,140
   
9
   
(134
)
  
78
   
1,093
 
Consumer
  
347
   
138
   
(165
)
  
53
   
373
 
All other
  
1,723
   
428
   
(264
)
  
80
   
1,967
 
Total
 
$
10,836
  
$
1,142
  
$
(766
)
 
$
483
  
$
11,695
 

Activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2016 was as follows:

Loan Class
 
Balance Dec 31, 2015
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance June 30, 2016
 
                
Residential real estate
 
$
2,501
  
$
286
  
$
(56
)
 
$
16
  
$
2,747
 
Multifamily real estate
  
821
   
1
   
-
   
-
   
822
 
Commercial real estate:
                    
Owner occupied
  
1,509
   
(68
)
  
-
   
1
   
1,442
 
Non owner occupied
  
2,070
   
638
   
-
   
-
   
2,708
 
Commercial and industrial
  
1,033
   
40
   
-
   
38
   
1,111
 
Consumer
  
307
   
33
   
(90
)
  
56
   
306
 
All other
  
1,406
   
194
   
(126
)
  
194
   
1,668
 
Total
 
$
9,647
  
$
1,124
  
$
(272
)
 
$
305
  
$
10,804
 

Activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2017 was as follows:

Loan Class
 
Balance March 31, 2017
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance June 30, 2017
 
                
Residential real estate
 
$
2,977
  
$
64
  
$
(94
)
 
$
26
  
$
2,973
 
Multifamily real estate
  
770
   
567
   
-
   
-
   
1,337
 
Commercial real estate:
                    
Owner occupied
  
1,576
   
(198
)
  
-
   
240
   
1,618
 
Non owner occupied
  
2,422
   
(88
)
  
-
   
-
   
2,334
 
Commercial and industrial
  
1,129
   
43
   
(134
)
  
55
   
1,093
 
Consumer
  
370
   
22
   
(48
)
  
29
   
373
 
All other
  
1,650
   
366
   
(81
)
  
32
   
1,967
 
Total
 
$
10,894
  
$
776
  
$
(357
)
 
$
382
  
$
11,695
 

Activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2016 was as follows:

Loan Class
 
Balance March 31, 2016
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance June 30, 2016
 
                
Residential real estate
 
$
2,539
  
$
208
  
$
(7
)
 
$
7
  
$
2,747
 
Multifamily real estate
  
745
   
77
   
-
   
-
   
822
 
Commercial real estate:
                    
Owner occupied
  
1,531
   
(89
)
  
-
   
-
   
1,442
 
Non owner occupied
  
2,337
   
371
   
-
   
-
   
2,708
 
Commercial and industrial
  
933
   
176
   
-
   
2
   
1,111
 
Consumer
  
288
   
44
   
(46
)
  
20
   
306
 
All other
  
1,542
   
25
   
(66
)
  
167
   
1,668
 
Total
 
$
9,915
  
$
812
  
$
(119
)
 
$
196
  
$
10,804
 
Purchased Loans
The carrying amount of those loans is as follows at June 30, 2017 and December 31, 2016.

  
2017
  
2016
 
Residential real estate
 
$
1,537
  
$
1,619
 
Commercial real estate
        
Owner occupied
  
1,645
   
2,013
 
Non owner occupied
  
-
   
5,396
 
Commercial and industrial
  
216
   
232
 
All other
  
1,860
   
2,061
 
Total carrying amount
 
$
5,258
  
$
11,321
 
Contractual principal balance
 
$
7,234
  
$
14,784
 
         
Carrying amount, net of allowance
 
$
5,208
  
$
11,311
 
Purchase Loans Accretable Yield, or Income Expected to be Collected
The accretable yield, or income expected to be collected, on the purchased loans above is as follows at June 30, 2017 and June 30, 2016.

  
2017
  
2016
 
Balance at January 1
 
$
1,208
  
$
185
 
New loans purchased
  
-
   
1,115
 
Accretion of income
  
(403
)
  
(52
)
Reclassification to non-accretable
  
-
   
-
 
Disposals
  
-
   
-
 
Balance at June 30
 
$
805
  
$
1,248
 
Past Due and Non-performing Loans
The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2017 and December 31, 2016.  The recorded investment in non-accrual loans is less than the principal owed on non-accrual loans due to discounts applied to the carrying value of the loan at time of their acquisition and interest payments made by the borrower which have been used to reduce the recorded investment in the loan rather than recognized as interest income.

June 30, 2017
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
          
Residential  real estate
 
$
3,767
  
$
3,190
  
$
693
 
Multifamily real estate
  
11,102
   
11,095
   
332
 
Commercial real estate
            
Owner occupied
  
2,156
   
2,078
   
-
 
Non owner occupied
  
311
   
212
   
-
 
Commercial and industrial
  
1,833
   
830
   
1,134
 
Consumer
  
276
   
252
   
-
 
All other
  
2,913
   
2,791
   
-
 
Total
 
$
22,358
  
$
20,448
  
$
2,159
 

December 31, 2016
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
          
Residential  real estate
 
$
3,467
  
$
2,794
  
$
606
 
Multifamily real estate
  
11,157
   
11,106
   
334
 
Commercial real estate
            
Owner occupied
  
1,769
   
1,704
   
15
 
Non owner occupied
  
294
   
196
   
36
 
Commercial and industrial
  
2,537
   
1,209
   
1,008
 
Consumer
  
366
   
347
   
-
 
All other
  
8,408
   
8,391
   
-
 
Total
 
$
27,998
  
$
25,747
  
$
1,999
 
Aging of Recorded Investment in Past Due Loans by Loan Class
The following table presents the aging of the recorded investment in past due loans as of June 30, 2017 by class of loans:
 
Loan Class
 
Total Loans
  
30-89 Days Past Due
  
Greater than 90 days past due
  
Total Past Due
  
Loans Not Past Due
 
                
Residential real estate
 
$
340,288
  
$
4,920
  
$
2,061
  
$
6,981
  
$
333,307
 
Multifamily real estate
  
78,352
   
108
   
11,427
   
11,535
   
66,817
 
Commercial real estate:
                    
Owner occupied
  
133,846
   
364
   
2,015
   
2,379
   
131,467
 
Non owner occupied
  
227,700
   
154
   
124
   
278
   
227,422
 
Commercial and industrial
  
77,900
   
50
   
1,900
   
1,950
   
75,950
 
Consumer
  
29,747
   
295
   
93
   
388
   
29,359
 
All other
  
150,121
   
875
   
2,789
   
3,664
   
146,457
 
Total
 
$
1,037,954
  
$
6,766
  
$
20,409
  
$
27,175
  
$
1,010,779
 

The following table presents the aging of the recorded investment in past due loans as of December 31, 2016 by class of loans:
 
Loan Class
 
Total Loans
  
30-89 Days Past Due
  
Greater than 90 days past due
  
Total Past Due
  
Loans Not Past Due
 
                
Residential real estate
 
$
342,294
  
$
6,113
  
$
1,596
  
$
7,709
  
$
334,585
 
Multifamily real estate
  
74,165
   
-
   
11,440
   
11,440
   
62,725
 
Commercial real estate:
                    
Owner occupied
  
129,370
   
1,746
   
1,474
   
3,220
   
126,150
 
Non owner occupied
  
220,836
   
1,803
   
159
   
1,962
   
218,874
 
Commercial and industrial
  
76,736
   
330
   
2,120
   
2,450
   
74,286
 
Consumer
  
30,916
   
403
   
223
   
626
   
30,290
 
All other
  
150,506
   
577
   
8,187
   
8,764
   
141,742
 
Total
 
$
1,024,823
  
$
10,972
  
$
25,199
  
$
36,171
  
$
988,652
 
Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment Based on Impairment Method
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2017:
 
  
Allowance for Loan Losses
  
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
  
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
 
                         
Residential real estate
 
$
-
  
$
2,973
  
$
-
  
$
2,973
  
$
326
  
$
338,425
  
$
1,537
  
$
340,288
 
Multifamily real estate
  
517
   
820
   
-
   
1,337
   
13,593
   
64,759
   
-
   
78,352
 
Commercial real estate:
                                
Owner occupied
  
324
   
1,294
   
-
   
1,618
   
4,095
   
128,106
   
1,645
   
133,846
 
Non-owner occupied
  
-
   
2,334
   
-
   
2,334
   
1,914
   
225,786
   
-
   
227,700
 
Commercial and industrial
  
107
   
936
   
50
   
1,093
   
1,253
   
76,431
   
216
   
77,900
 
Consumer
  
-
   
373
   
-
   
373
   
-
   
29,747
   
-
   
29,747
 
All other
  
205
   
1,762
   
-
   
1,967
   
7,189
   
141,072
   
1,860
   
150,121
 
Total
 
$
1,153
  
$
10,492
  
$
50
  
$
11,695
  
$
28,370
  
$
1,004,326
  
$
5,258
  
$
1,037,954
 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2016:
 
  
Allowance for Loan Losses
  
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
  
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
 
                         
Residential real estate
 
$
-
  
$
2,948
  
$
-
  
$
2,948
  
$
379
  
$
340,296
  
$
1,619
  
$
342,294
 
Multifamily real estate
  
-
   
785
   
-
   
785
   
13,641
   
60,524
   
-
   
74,165
 
Commercial real estate:
                                
Owner occupied
  
244
   
1,299
   
-
   
1,543
   
2,801
   
124,556
   
2,013
   
129,370
 
Non-owner occupied
  
-
   
2,350
   
-
   
2,350
   
2,373
   
213,067
   
5,396
   
220,836
 
Commercial and industrial
  
266
   
864
   
10
   
1,140
   
1,418
   
75,086
   
232
   
76,736
 
Consumer
  
-
   
347
   
-
   
347
   
-
   
30,916
   
-
   
30,916
 
All other
  
86
   
1,637
   
-
   
1,723
   
12,976
   
135,469
   
2,061
   
150,506
 
Total
 
$
596
  
$
10,230
  
$
10
  
$
10,836
  
$
33,588
  
$
979,914
  
$
11,321
  
$
1,024,823
 
Loans Individually Evaluated for Impairment by Class of Loans
The following table presents loans individually evaluated for impairment by class of loans as of    June 30, 2017.  The table includes $199,000 of loans acquired with deteriorated credit quality that the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

  
Unpaid Principal Balance
  
Recorded Investment
  
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
         
Residential real estate
 
$
367
  
$
326
  
$
-
 
Multifamily real estate
  
2,498
   
2,498
   
-
 
Commercial real estate
            
Owner occupied
  
3,129
   
3,079
   
-
 
Non owner occupied
  
2,006
   
1,914
   
-
 
Commercial and industrial
  
2,076
   
1,134
   
-
 
All other
  
3,191
   
3,071
   
-
 
   
13,267
   
12,022
   
-
 
With an allowance recorded:
            
Multifamily real estate
 
$
11,102
  
$
11,095
  
$
517
 
Commercial real estate
            
Owner occupied
  
1,04411,102
   
1,0161,016
   
324323
 
Commercial and industrial
  
469
   
318
   
157
 
All other
  
4,123
   
4,118
   
205
 
   
16,738
   
16,547
   
1,203
 
Total
 
$
30,005
  
$
28,569
  
$
1,203
 

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2016.  The table includes $208,000 of loans acquired with deteriorated credit quality that the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

  
Unpaid Principal Balance
  
Recorded Investment
  
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
         
Residential  real estate
 
$
743
  
$
379
  
$
-
 
Multifamily real estate
  
13,692
   
13,641
   
-
 
Commercial real estate
            
Owner occupied
  
1,803
   
1,766
   
-
 
Non owner occupied
  
2,465
   
2,373
   
-
 
Commercial and industrial
  
2,429
   
1,338
   
-
 
All other
  
9,868
   
9,853
   
-
 
   
31,000
   
29,350
   
-
 
With an allowance recorded:
            
Commercial real estate
            
Owner occupied
 
$
1,055
  
$
1,035
  
$
244
 
Commercial and industrial
  
431
   
288
   
276
 
All other
  
3,124
   
3,123
   
86
 
   
4,610
   
4,446
   
606
 
Total
 
$
35,610
  
$
33,796
  
$
606
 
Average Balance of Loans Individually Evaluated for Impairment and Interest Income Recognized
The following table presents the average balance of loans individually evaluated for impairment and interest income recognized on these loans for the six months ended June 30, 2017 and June 30, 2016.   The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Six months ended June 30, 2017
  
Six months ended June 30, 2016
 
Loan Class
 
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
  
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
 
Residential real estate
 
$
345
  
$
1
  
$
1
  
$
638
  
$
11
  
$
9
 
Multifamily real estate
  
13,611
   
130
   
121
   
1,241
   
58
   
58
 
Commercial real estate:
                        
Owner occupied
  
3,211
   
22
   
22
   
678
   
-
   
-
 
Non-owner occupied
  
2,079
   
61
   
61
   
5,706
   
100
   
97
 
Commercial and industrial
  
1,523
   
101
   
101
   
969
   
16
   
16
 
All other
  
9,129
   
289
   
286
   
802
   
7
   
6
 
Total
 
$
29,898
  
$
604
  
$
592
  
$
10,034
  
$
192
  
$
186
 

The following table presents the average balance of loans individually evaluated for impairment and interest income recognized on these loans for the three months ended June 30, 2017 and June 30, 2016.  The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Three months ended June 30, 2017
  
Three months ended June 30, 2016
 
Loan Class
 
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
  
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
 
                   
Residential real estate
 
$
328
  
$
-
  
$
-
  
$
669
  
$
5
  
$
5
 
Multifamily real estate
  
13,596
   
65
   
59
   
1,824
   
45
   
45
 
Commercial real estate:
                        
Owner occupied
  
3,417
   
16
   
16
   
795
   
-
   
-
 
Non-owner occupied
  
1,932
   
29
   
29
   
5,308
   
51
   
51
 
Commercial and industrial
  
1,471
   
27
   
27
   
1,141
   
13
   
12
 
All other
  
7,205
   
57
   
55
   
850
   
7
   
6
 
Total
 
$
27,949
  
$
194
  
$
186
  
$
10,587
  
$
121
  
$
119
 
Troubled Debt Restructurings
The following table presents TDR’s as of June 30, 2017 and December 31, 2016:

June 30, 2017
 
TDR’s on Non-accrual
  
Other TDR’s
  
Total TDR’s
 
          
Residential  real estate
 
$
324
  
$
133
  
$
457
 
Multifamily  real estate
  
-
   
2,166
   
2,166
 
Commercial real estate
            
Owner occupied
  
601
   
1,771
   
2,372
 
Commercial and industrial
  
59
   
520
   
579
 
All other
  
751
   
4,340
   
5,091
 
Total
 
$
1,735
  
$
8,930
  
$
10,665
 

December 31, 2016
 
TDR’s on Non-accrual
  
Other TDR’s
  
Total TDR’s
 
          
Residential  real estate
 
$
129
  
$
464
  
$
593
 
Multifamily  real estate
  
-
   
2,201
   
2,201
 
Commercial real estate
            
Owner occupied
  
-
   
856
   
856
 
Commercial and industrial
  
62
   
352
   
414
 
All other
  
751
   
4,395
   
5,146
 
Total
 
$
942
  
$
8,268
  
$
9,210
 
Troubled Debt Restructuring During the Period
The following table presents TDR’s that occurred during the three and six months ended June 30, 2017.

  
Three months ended June 30, 2017
  
Six months ended June 30, 2017
 
Loan Class
 
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
  
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
 
                   
Commercial real estate
                  
Owner occupied
  
2
  
$
1,525
  
$
1,525
   
2
  
$
1,525
  
$
1,525
 
Commercial & industrial
  
1
   
191
   
191
   
1
   
191
   
191
 
Total
  
3
  
$
1,716
  
$
1,716
   
3
  
$
1,716
  
$
1,716
 

The following table presents TDR’s that occurred during the three and six months ended June 30, 2016.

  
Three months ended June 30, 2016
  
Six months ended June 30, 2016
 
Loan Class
 
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
  
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
 
                   
Residential  real estate
  
-
  
$
-
  
$
-
   
2
  
$
299
  
$
299
 
Commercial real estate
                        
Owner occupied
  
-
   
-
   
-
   
2
   
610
   
610
 
Non-owner occupied
  
-
   
-
   
-
   
1
   
100
   
100
 
Commercial & industrial
  
-
   
-
   
-
   
1
   
20
   
20
 
Total
  
-
  
$
-
  
$
-
   
6
  
$
1,029
  
$
1,029
 
Risk Category of Loans by Class of Loans
As of June 30, 2017 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loan Class
 
Pass
  
Special Mention
  
Substandard
  
Doubtful
  
Total Loans
 
                
Residential real estate
 
$
327,595
  
$
3,114
  
$
9,578
  
$
1
  
$
340,288
 
Multifamily real estate
  
63,630
   
75
   
12,035
   
2,612
   
78,352
 
Commercial real estate:
                    
Owner occupied
  
121,638
   
6,826
   
5,382
   
-
   
133,846
 
Non-owner occupied
  
219,011
   
6,408
   
2,281
   
-
   
227,700
 
Commercial and industrial
  
72,032
   
3,779
   
2,089
   
-
   
77,900
 
Consumer
  
29,343
   
155
   
249
   
-
   
29,747
 
All other
  
140,829
   
1,728
   
7,564
   
-
   
150,121
 
Total
 
$
974,078
  
$
22,085
  
$
39,178
  
$
2,613
  
$
1,037,954
 

As of December 31, 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loan Class
 
Pass
  
Special Mention
  
Substandard
  
Doubtful
  
Total Loans
 
                
Residential real estate
 
$
328,905
  
$
4,880
  
$
8,507
  
$
2
  
$
342,294
 
Multifamily real estate
  
59,375
   
78
   
14,712
   
-
   
74,165
 
Commercial real estate:
                    
Owner occupied
  
118,134
   
6,720
   
4,516
   
-
   
129,370
 
Non-owner occupied
  
213,641
   
4,391
   
2,804
   
-
   
220,836
 
Commercial and industrial
  
72,094
   
2,337
   
2,275
   
30
   
76,736
 
Consumer
  
30,369
   
242
   
305
   
-
   
30,916
 
All other
  
134,945
   
1,958
   
13,603
   
-
   
150,506
 
Total
 
$
957,463
  
$
20,606
  
$
46,722
  
$
32
  
$
1,024,823