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LOANS (Tables)
 6 Months Ended
Jun. 30, 2019
LOANS [Abstract]  
Major Classifications of Loans
Major classifications of loans at June 30, 2019 and December 31, 2018 are summarized as follows:

  
2019
  
2018
 
Residential real estate
 
$
381,525
  
$
381,027
 
Multifamily real estate
  
39,298
   
54,016
 
Commercial real estate:
        
Owner occupied
  
134,423
   
138,209
 
Non-owner occupied
  
296,780
   
282,608
 
Commercial and industrial
  
104,437
   
103,624
 
Consumer
  
25,848
   
27,688
 
Construction and land
  
132,814
   
128,926
 
All other
  
33,128
   
33,203
 
  
$
1,148,253
  
$
1,149,301
 
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, 2019 was as follows:

Loan Class
 
Balance
Dec 31, 2018
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance
June 30, 2019
 
                
Residential real estate
 
$
1,808
  
$
104
  
$
(59
)
 
$
27
  
$
1,880
 
Multifamily real estate
  
1,649
   
65
   
-
   
2
   
1,716
 
Commercial real estate:
                    
Owner occupied
  
2,120
   
200
   
(533
)
  
3
   
1,790
 
Non-owner occupied
  
3,058
   
277
   
(57
)
  
2
   
3,280
 
Commercial and industrial
  
1,897
   
178
   
(113
)
  
38
   
2,000
 
Consumer
  
351
   
129
   
(140
)
  
28
   
368
 
Construction and land
  
2,255
   
(102
)
  
(13
)
  
-
   
2,140
 
All other
  
600
   
39
   
(97
)
  
57
   
599
 
Total
 
$
13,738
  
$
890
  
$
(1,012
)
 
$
157
  
$
13,773
 

Activity in the allowance for loan losses by portfolio segment for the six months ended June 30, 2018 was as follows:

Loan Class
 
Balance
Dec 31, 2017
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance
June 30, 2018
 
                
Residential real estate
 
$
2,986
  
$
(609
)
 
$
(148
)
 
$
25
  
$
2,254
 
Multifamily real estate
  
978
   
(410
)
  
(11
)
  
-
   
557
 
Commercial real estate:
                    
Owner occupied
  
1,653
   
266
   
(3
)
  
1
   
1,917
 
Non-owner occupied
  
2,313
   
140
   
(16
)
  
-
   
2,437
 
Commercial and industrial
  
1,101
   
976
   
(504
)
  
26
   
1,599
 
Consumer
  
328
   
51
   
(63
)
  
38
   
354
 
Construction and land
  
2,408
   
864
   
(19
)
  
-
   
3,253
 
All other
  
337
   
337
   
(130
)
  
67
   
611
 
Total
 
$
12,104
  
$
1,615
  
$
(894
)
 
$
157
  
$
12,982
 

Activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2019 was as follows:

Loan Class
 
Balance
March 31, 2019
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance
June 30, 2019
 
                
Residential real estate
 
$
1,823
  
$
62
  
$
(27
)
 
$
22
  
$
1,880
 
Multifamily real estate
  
1,590
   
126
   
-
   
-
   
1,716
 
Commercial real estate:
                    
Owner occupied
  
1,824
   
(36
)
  
-
   
2
   
1,790
 
Non-owner occupied
  
3,401
   
(123
)
  
-
   
2
   
3,280
 
Commercial and industrial
  
1,721
   
275
   
(3
)
  
7
   
2,000
 
Consumer
  
365
   
19
   
(33
)
  
17
   
368
 
Construction and land
  
2,149
   
(9
)
  
-
   
-
   
2,140
 
All other
  
606
   
16
   
(46
)
  
23
   
599
 
Total
 
$
13,479
  
$
330
  
$
(109
)
 
$
73
  
$
13,773
 

Activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2018 was as follows:

Loan Class
 
Balance
March 31, 2018
  
Provision (credit) for loan losses
  
Loans charged-off
  
Recoveries
  
Balance
June 30, 2018
 
                
Residential real estate
 
$
2,262
  
$
82
  
$
(99
)
 
$
9
  
$
2,254
 
Multifamily real estate
  
647
   
(90
)
  
-
   
-
   
557
 
Commercial real estate:
                    
Owner occupied
  
1,816
   
102
   
(1
)
  
-
   
1,917
 
Non-owner occupied
  
2,187
   
250
   
-
   
-
   
2,437
 
Commercial and industrial
  
1,651
   
163
   
(237
)
  
22
   
1,599
 
Consumer
  
369
   
2
   
(30
)
  
13
   
354
 
Construction and land
  
3,302
   
(49
)
  
-
   
-
   
3,253
 
All other
  
606
   
40
   
(63
)
  
28
   
611
 
Total
 
$
12,840
  
$
500
  
$
(430
)
 
$
72
  
$
12,982
 
Purchased Impaired Loans
The carrying amount of those loans is as follows at June 30, 2019 and December 31, 2018.

  
2019
  
2018
 
Residential real estate
 
$
2,355
  
$
2,665
 
Commercial real estate
        
Owner occupied
  
1,754
   
2,040
 
Non-owner occupied
  
3,062
   
3,434
 
Commercial and industrial
  
350
   
1,720
 
Construction and land
  
587
   
1,212
 
All other
  
231
   
225
 
Total carrying amount
 
$
8,339
  
$
11,296
 
Contractual principal balance
 
$
11,922
  
$
15,436
 
         
Carrying amount, net of allowance
 
$
8,339
  
$
11,296
 
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, 2019 and June 30, 2018.

  
2019
  
2018
 
Balance at January 1
 
$
642
  
$
754
 
New loans purchased
  
-
   
-
 
Accretion of income
  
(94
)
  
(80
)
Loans placed on non-accrual
  
-
   
(41
)
Income recognized upon full repayment
  
(73
)
  
(38
)
Reclassifications from non-accretable difference
  
-
   
-
 
Disposals
  
-
   
-
 
Balance at June 30
 
$
475
  
$
595
 
Past Due and Non-performing Loans
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, 2019
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
          
Residential real estate
 
$
4,248
  
$
3,190
  
$
1,066
 
Multifamily real estate
  
4,112
   
3,810
   
-
 
Commercial real estate
            
Owner occupied
  
4,124
   
3,864
   
72
 
Non-owner occupied
  
5,891
   
4,705
   
88
 
Commercial and industrial
  
1,131
   
500
   
7
 
Consumer
  
212
   
172
   
-
 
Construction and land
  
539
   
525
   
13
 
All other
  
75
   
73
   
38
 
Total
 
$
20,332
  
$
16,839
  
$
1,284
 

December 31, 2018
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
          
Residential real estate
 
$
4,966
  
$
3,708
  
$
954
 
Multifamily real estate
  
4,127
   
3,905
   
-
 
Commercial real estate
            
Owner occupied
  
3,692
   
3,436
   
56
 
Non-owner occupied
  
5,761
   
4,592
   
76
 
Commercial and industrial
  
1,303
   
625
   
-
 
Consumer
  
292
   
253
   
-
 
Construction and land
  
857
   
856
   
-
 
All other
  
75
   
73
   
-
 
Total
 
$
21,073
  
$
17,448
  
$
1,086
 
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, 2019 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
 
$
381,525
  
$
8,441
  
$
1,894
  
$
10,335
  
$
371,190
 
Multifamily real estate
  
39,298
   
4,171
   
89
   
4,260
   
35,038
 
Commercial real estate:
                    
Owner occupied
  
134,423
   
1,220
   
2,855
   
4,075
   
130,348
 
Non-owner occupied
  
296,780
   
788
   
3,455
   
4,243
   
292,537
 
Commercial and industrial
  
104,437
   
557
   
335
   
892
   
103,545
 
Consumer
  
25,848
   
250
   
45
   
295
   
25,553
 
Construction and land
  
132,814
   
350
   
55
   
405
   
132,409
 
All other
  
33,128
   
60
   
111
   
171
   
32,957
 
Total
 
$
1,148,253
  
$
15,837
  
$
8,839
  
$
24,676
  
$
1,123,577
 

The following table presents the aging of the recorded investment in past due loans as of December 31, 2018 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
 
$
381,027
  
$
7,078
  
$
2,594
  
$
9,672
  
$
371,355
 
Multifamily real estate
  
54,016
   
-
   
110
   
110
   
53,906
 
Commercial real estate:
                    
Owner occupied
  
138,209
   
124
   
2,601
   
2,725
   
135,484
 
Non-owner occupied
  
282,608
   
172
   
3,301
   
3,473
   
279,135
 
Commercial and industrial
  
103,624
   
2,235
   
262
   
2,497
   
101,127
 
Consumer
  
27,688
   
247
   
112
   
359
   
27,329
 
Construction and land
  
128,926
   
388
   
810
   
1,198
   
127,728
 
All other
  
33,203
   
546
   
73
   
619
   
32,584
 
Total
 
$
1,149,301
  
$
10,790
  
$
9,863
  
$
20,653
  
$
1,128,648
 
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, 2019:

  
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
 
$
19
  
$
1,861
  
$
-
  
$
1,880
  
$
113
  
$
379,057
  
$
2,355
  
$
381,525
 
Multifamily real estate
  
1,483
   
233
   
-
   
1,716
   
3,810
   
35,488
   
-
   
39,298
 
Commercial real estate:
                                
Owner occupied
  
113
   
1,677
   
-
   
1,790
   
3,223
   
129,446
   
1,754
   
134,423
 
Non-owner occupied
  
233
   
3,047
   
-
   
3,280
   
10,047
   
283,671
   
3,062
   
296,780
 
Commercial and industrial
  
447
   
1,553
   
-
   
2,000
   
684
   
103,403
   
350
   
104,437
 
Consumer
  
-
   
368
   
-
   
368
   
-
   
25,848
   
-
   
25,848
 
Construction and land
  
99
   
2,041
       
2,140
   
513
   
131,714
   
587
   
132,814
 
All other
  
-
   
599
   
-
   
599
   
-
   
32,897
   
231
   
33,128
 
Total
 
$
2,394
  
$
11,379
  
$
-
  
$
13,773
  
$
18,390
  
$
1,121,524
  
$
8,339
  
$
1,148,253
 

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, 2018:

  
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
 
$
-
  
$
1,808
  
$
-
  
$
1,808
  
$
298
  
$
378,064
  
$
2,665
  
$
381,027
 
Multifamily real estate
  
1,281
   
368
   
-
   
1,649
   
3,905
   
50,111
   
-
   
54,016
 
Commercial real estate:
                                
Owner occupied
  
692
   
1,428
   
-
   
2,120
   
2,820
   
133,349
   
2,040
   
138,209
 
Non-owner occupied
  
267
   
2,791
   
-
   
3,058
   
10,111
   
269,063
   
3,434
   
282,608
 
Commercial and industrial
  
414
   
1,483
   
-
   
1,897
   
558
   
101,346
   
1,720
   
103,624
 
Consumer
  
-
   
351
   
-
   
351
   
-
   
27,688
   
-
   
27,688
 
Construction and land
  
142
   
2,113
   
-
   
2,255
   
1,351
   
126,363
   
1,212
   
128,926
 
All other
  
-
   
600
   
-
   
600
   
-
   
32,978
   
225
   
33,203
 
Total
 
$
2,796
  
$
10,942
  
$
-
  
$
13,738
  
$
19,043
  
$
1,118,962
  
$
11,296
  
$
1,149,301
 
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, 2019.  The table includes $1,346,000 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
 
$
438
  
$
228
  
$
-
 
Multifamily real estate
  
97
   
89
   
-
 
Commercial real estate
            
Owner occupied
  
2,652
   
2,419
   
-
 
Non-owner occupied
  
8,536
   
7,808
   
-
 
Commercial and industrial
  
552
   
43
   
-
 
Construction and Land
  
35
   
35
   
-
 
   
12,310
   
10,622
   
-
 
With an allowance recorded:
            
Residential real estate
  
47
   
47
   
19
 
Multifamily real estate
  
4,016
   
3,721
   
1,483
 
Commercial real estate
            
Owner occupied
  
1,553
   
1,525
   
113
 
Non-owner occupied
  
2,793
   
2,701
   
233
 
Commercial and industrial
  
650
   
641
   
447
 
Construction and land
  
491
   
479
   
99
 
   
9,550
   
9,114
   
2,394
 
Total
 
$
21,860
  
$
19,736
  
$
2,394
 

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2018.  The table includes $1,160,000 of loans acquired with deteriorated credit quality for which 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
 
$
426
  
$
298
  
$
-
 
Multifamily real estate
  
110
   
110
   
-
 
Commercial real estate
            
Owner occupied
  
1,305
   
1,092
   
-
 
Non-owner occupied
  
8,458
   
7,740
   
-
 
Commercial and industrial
  
531
   
-
   
-
 
Construction and land
  
786
   
786
   
-
 
   
11,616
   
10,026
   
-
 
With an allowance recorded:
            
Multifamily real estate
 
$
4,016
  
$
3,795
  
$
1,281
 
Commercial real estate
            
Owner occupied
  
2,523
   
2,478
   
692
 
Non-owner occupied
  
2,852
   
2,781
   
267
 
Commercial and industrial
  
562
   
558
   
414
 
Construction and land
  
565
   
565
   
142
 
   
10,518
   
10,177
   
2,796
 
Total
 
$
22,134
  
$
20,203
  
$
2,796
 
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, 2019 and June 30, 2018.  The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Six months ended June 30, 2019
  
Six months ended June 30, 2018
 
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
 
$
267
  
$
-
  
$
-
  
$
302
  
$
-
  
$
-
 
Multifamily real estate
  
3,855
   
-
   
-
   
2,287
   
11
   
11
 
Commercial real estate:
                        
Owner occupied
  
3,898
   
6
   
6
   
3,208
   
51
   
51
 
Non-owner occupied
  
10,556
   
186
   
186
   
9,535
   
241
   
241
 
Commercial and industrial
  
478
   
2
   
2
   
1,145
   
16
   
16
 
Construction and land
  
1,065
   
121
   
121
   
4,703
   
3
   
3
 
All other
  
-
   
-
   
-
   
288
   
4
   
4
 
Total
 
$
20,119
  
$
315
  
$
315
  
$
21,468
  
$
326
  
$
326
 

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, 2019 and June 30, 2018.  The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

  
Three months ended June 30, 2019
  
Three months ended June 30, 2018
 
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
 
$
253
  
$
-
  
$
-
  
$
299
  
$
-
  
$
-
 
Multifamily real estate
  
3,830
   
-
   
-
   
2,199
   
1
   
1
 
Commercial real estate:
                        
Owner occupied
  
4,062
   
3
   
3
   
3,154
   
26
   
26
 
Non-owner occupied
  
10,573
   
92
   
92
   
8,514
   
105
   
105
 
Commercial and industrial
  
437
   
1
   
1
   
966
   
8
   
8
 
Construction and land
  
922
   
113
   
113
   
4,218
   
3
   
3
 
All other
  
-
   
-
   
-
   
286
   
-
   
-
 
Total
 
$
20,077
  
$
209
  
$
209
  
$
19,636
  
$
143
  
$
143
 
Troubled Debt Restructurings
The following table presents TDR’s as of June 30, 2019 and December 31, 2018:

June 30, 2019
 
TDR’s on
Non-accrual
  
Other TDR’s
  
Total TDR’s
 
          
Residential real estate
 
$
43
  
$
165
  
$
208
 
Multifamily real estate
  
3,721
   
-
   
3,721
 
Commercial real estate
            
Owner occupied
  
1,526
   
214
   
1,740
 
Non-owner occupied
  
-
   
5,893
   
5,893
 
Commercial and industrial
  
191
   
-
   
191
 
Total
 
$
5,481
  
$
6,272
  
$
11,753
 

December 31, 2018
 
TDR’s on
Non-accrual
  
Other TDR’s
  
Total TDR’s
 
          
Residential real estate
 
$
347
  
$
97
  
$
444
 
Multifamily real estate
  
3,795
   
-
   
3,795
 
Commercial real estate
            
Owner occupied
  
1,647
   
222
   
1,869
 
Non-owner occupied
  
-
   
5,964
   
5,964
 
Commercial and industrial
  
191
   
-
   
191
 
Total
 
$
5,980
  
$
6,283
  
$
12,263
 
Risk Category of Loans by Class of Loans
As of June 30, 2019, 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
 
$
369,315
  
$
2,745
  
$
9,256
  
$
209
  
$
381,525
 
Multifamily real estate
  
33,698
   
1,790
   
3,810
   
-
   
39,298
 
Commercial real estate:
                    
Owner occupied
  
122,600
   
4,746
   
7,077
   
-
   
134,423
 
Non-owner occupied
  
280,181
   
3,821
   
12,778
   
-
   
296,780
 
Commercial and industrial
  
100,151
   
2,989
   
1,004
   
293
   
104,437
 
Consumer
  
25,588
   
-
   
260
   
-
   
25,848
 
Construction and land
  
119,870
   
11,893
   
1,016
   
35
   
132,814
 
All other
  
32,807
   
248
   
73
   
-
   
33,128
 
Total
 
$
1,084,210
  
$
28,232
  
$
35,274
  
$
537
  
$
1,148,253
 

As of December 31, 2018, 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
 
$
369,808
  
$
1,376
  
$
9,681
  
$
162
  
$
381,027
 
Multifamily real estate
  
45,187
   
4,924
   
3,905
   
-
   
54,016
 
Commercial real estate:
                    
Owner occupied
  
126,422
   
4,840
   
6,947
   
-
   
138,209
 
Non-owner occupied
  
262,149
   
7,647
   
12,812
   
-
   
282,608
 
Commercial and industrial
  
96,066
   
5,280
   
2,278
   
-
   
103,624
 
Consumer
  
27,344
   
31
   
313
   
-
   
27,688
 
Construction and land
  
107,196
   
19,728
   
2,002
       
128,926
 
All other
  
32,749
   
381
   
73
   
-
   
33,203
 
Total
 
$
1,066,921
  
$
44,207
  
$
38,011
  
$
162
  
$
1,149,301