Loans (Tables)

9 Months Ended

Sep. 30, 2019

Loans

Schedule of loans receivable

Loans receivable consist of the following:

	September 30,		December 31,
	2019		2018
Real Estate:	(In Thousands)
Secured by 1-4 family residential	$	330,369	$	322,686
Secured by multi-family residential		275,944		278,358
Secured by commercial real estate		1,154,975		1,126,452
Construction		308,061		265,772
		2,069,349		1,993,268
Other Loans:
Commercial		537,806		509,577
Home equity and improvement		123,871		128,152
Consumer finance		36,644		34,405
		698,321		672,134
Total loans		2,767,670		2,665,402
Deduct:
Undisbursed loan funds		(100,260)		(123,293)
Net deferred loan origination fees and costs		(2,110)		(2,070)
Allowance for loan loss		(30,250)		(28,331)
Totals	$	2,635,050	$	2,511,708

Schedule of allowance for loan loss activity

The following table discloses allowance for loan loss activity for the quarters ended September 30, 2019 and 2018 by portfolio segment (In Thousands):

			Multi-
	1-4 Family		Family								Home Equity
	Residential		Residential		Commercial						and		Consumer
Quarter Ended September 30, 2019	Real Estate		Real Estate		Real Estate		Construction		Commercial		Improvement		Finance		Total
Beginning Allowance	$	2,793	$	3,102	$	12,149	$	887	$	7,888	$	1,763	$	352	$	28,934
Charge-Offs		(74)		0		0		0		(25)		(12)		(80)		(191)
Recoveries		6		6		55		0		30		77		6		180
Provisions		213		51		832		216		(5)		(76)		96		1,327
Ending Allowance	$	2,938	$	3,159	$	13,036	$	1,103	$	7,888	$	1,752	$	374	$	30,250

			Multi-
	1-4 Family		Family								Home Equity
	Residential		Residential		Commercial						and		Consumer
Quarter Ended September 30, 2018	Real Estate		Real Estate		Real Estate		Construction		Commercial		Improvement		Finance		Total
Beginning Allowance	$	2,682	$	2,913	$	11,253	$	737	$	7,455	$	2,032	$	249	$	27,321
Charge-Offs		(136)		0		(1,048)		0		(528)		(36)		(25)		(1,773)
Recoveries		27		38		182		0		413		47		8		715
Provisions		251		61		1,281		(122)		(179)		28		56		1,376
Ending Allowance	$	2,824	$	3,012	$	11,668	$	615	$	7,161	$	2,071	$	288	$	27,639

The following table discloses allowance for loan loss activity for the year-to-date periods ended September 30, 2019 and 2018 by portfolio segment (In Thousands):

			Multi-
	1-4 Family		Family								Home Equity
	Residential		Residential		Commercial						and		Consumer
Year-to-date Period Ended September 30, 2019	Real Estate		Real Estate		Real Estate		Construction		Commercial		Improvement		Finance		Total
Beginning Allowance	$	2,881	$	3,101	$	12,041	$	682	$	7,281	$	2,026	$	319	$	28,331
Charge-Offs		(257)		0		(15)		0		(225)		(109)		(255)		(861)
Recoveries		176		42		408		0		136		161		36		959
Provisions		138		16		602		421		696		(326)		274		1,821
Ending Allowance	$	2,938	$	3,159	$	13,036	$	1,103	$	7,888	$	1,752	$	374	$	30,250

			Multi-
	1-4 Family		Family								Home Equity
	Residential		Residential		Commercial						and		Consumer
Year-to-date Period Ended September 30, 2018	Real Estate		Real Estate		Real Estate		Construction		Commercial		Improvement		Finance		Total
Beginning Allowance	$	2,532	$	2,702	$	10,354	$	647	$	7,965	$	2,255	$	228	$	26,683
Charge-Offs		(230)		0		(1,357)		0		(709)		(194)		(128)		(2,618)
Recoveries		85		40		392		0		2,200		132		21		2,870
Provisions		437		270		2,279		(32)		(2,295)		(122)		167		704
Ending Allowance	$	2,824	$	3,012	$	11,668	$	615	$	7,161	$	2,071	$	288	$	27,639

Schedule of balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and 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 September 30, 2019 (In Thousands):

	1‑4 Family		Multi Family
	Residential		Residential		Commercial						Home Equity		Consumer
	Real Estate		Real Estate		Real Estate		Construction		Commercial		& Improvement		Finance		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	185	$	2	$	61	$	—	$	65	$	62	$	—	$	375
Collectively evaluated for impairment		2,753		3,157		12,975		1,103		7,823		1,690		374		29,875
Acquired with deteriorated credit quality		—		—		—		—		—		—		—		—
Total ending allowance balance	$	2,938	$	3,159	$	13,036	$	1,103	$	7,888	$	1,752	$	374	$	30,250
Loans:
Loans individually evaluated for impairment	$	7,337	$	173	$	21,544	$	—	$	7,543	$	857	$	16	$	37,470
Loans collectively evaluated for impairment		322,455		275,934		1,136,877		207,633		532,154		123,871		36,775		2,635,699
Loans acquired with deteriorated credit quality		998		292		627		—		14		—		—		1,931
Total ending loans balance	$	330,790	$	276,399	$	1,159,048	$	207,633	$	539,711	$	124,728	$	36,791	$	2,675,100

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 (In Thousands):

	1‑4 Family		Multi Family
	Residential		Residential		Commercial						Home Equity		Consumer
	Real Estate		Real Estate		Real Estate		Construction		Commercial		& Improvement		Finance		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	175	$	3	$	95	$	—	$	79	$	242	$	1	$	595
Collectively evaluated for impairment		2,706		3,098		11,946		682		7,202		1,784		318		27,736
Acquired with deteriorated credit quality		—		—		—		—		—		—		—		—
Total ending allowance balance	$	2,881	$	3,101	$	12,041	$	682	$	7,281	$	2,026	$	319	$	28,331
Loans:
Loans individually evaluated for impairment	$	6,774	$	1,347	$	26,334	$	—	$	10,477	$	963	$	45	$	45,940
Loans collectively evaluated for impairment		315,385		277,105		1,102,355		142,096		500,730		128,065		34,486		2,500,222
Loans acquired with deteriorated credit quality		1,012		296		846		—		177		—		—		2,331
Total ending loans balance	$	323,171	$	278,748	$	1,129,535	$	142,096	$	511,384	$	129,028	$	34,531	$	2,548,493

Schedule of presents the average balance, interest income recognized and cash basis income recognized on impaired loans

The following table presents the average balance, interest income recognized and cash basis income recognized on impaired loans by class of loans (In Thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019						2019
			Interest		Cash Basis				Interest		Cash Basis
	Average		Income		Income		Average		Income		Income
	Balance		Recognized		Recognized		Balance		Recognized		Recognized
Residential Owner Occupied	$	5,251	$	50	$	50	$	5,005	$	138	$	131
Residential Non Owner Occupied		2,113		28		27		2,078		106		106
Total Residential Real Estate		7,364		78		77		7,083		244		237
Construction		—		—		—		—		—		—
Multi-Family		175		5		5		604		32		32
CRE Owner Occupied		6,367		45		45		7,082		268		222
CRE Non Owner Occupied		1,898		19		19		1,943		70		63
Agriculture Land		12,981		168		114		13,206		544		405
Other CRE		479		13		11		810		66		61
Total Commercial Real Estate		21,725		245		189		23,041		948		751
Commercial Working Capital		6,224		55		55		7,302		281		217
Commercial Other		1,372		15		14		1,597		63		59
Total Commercial		7,596		70		69		8,899		344		276
Home Equity and  Improvement		868		6		6		893		26		24
Consumer Finance		17		—		—		26		1		1
Total Impaired Loans	$	37,745	$	404	$	346	$	40,545	$	1,595	$	1,321

The following table presents the average balance, interest income recognized and cash basis income recognized on impaired loans by class of loans (In Thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018						2018
			Interest		Cash Basis				Interest		Cash Basis
	Average		Income		Income		Average		Income		Income
	Balance		Recognized		Recognized		Balance		Recognized		Recognized
Residential Owner Occupied	$	4,848	$	41	$	41	$	4,695	$	113	$	110
Residential Non Owner Occupied		2,371		31		31		2,424		105		102
Total Residential Real Estate		7,219		72		72		7,119		218		212
Construction		—		—		—		—		—		—
Multi-Family		1,582		22		22		1,744		71		70
CRE Owner Occupied		10,058		57		49		10,545		179		156
CRE Non Owner Occupied		2,321		19		18		2,815		76		75
Agriculture Land		14,115		150		96		13,370		400		248
Other CRE		1,223		25		25		1,346		75		67
Total Commercial Real Estate		27,717		251		188		28,076		730		546
Commercial Working Capital		10,181		91		84		8,059		196		180
Commercial Other		3,282		34		31		3,809		88		83
Total Commercial		13,463		125		115		11,868		284		263
Home Equity and  Improvement		1,091		9		9		1,195		29		29
Consumer Finance		33		1		1		35		3		3
Total Impaired Loans	$	51,105	$	480	$	407	$	50,037	$	1,334	$	1,123

Schedule of loans individually evaluated for impairment by class of loans

The following table presents loans individually evaluated for impairment by class of loans (In Thousands):

	September 30, 2019						December 31, 2018
					Allowance						Allowance
	Unpaid				for Loan		Unpaid				for Loan
	Principal		Recorded		Losses		Principal		Recorded		Losses
	Balance*		Investment		Allocated		Balance*		Investment		Allocated
With no allowance recorded:
Residential Owner Occupied	$	385	$	386	$	—	$	901	$	775	$	—
Residential Non Owner Occupied		997		1,001		—		950		955		—
Total 1‑4 Family Residential Real Estate		1,382		1,387		—		1,851		1,730		—
Multi-Family Residential Real Estate		131		134		—		1,296		1,302		—
CRE Owner Occupied		5,847		4,684		—		7,464		6,202		—
CRE Non Owner Occupied		1,713		1,547		—		1,824		1,659		—
Agriculture Land		12,473		12,632		—		14,915		14,994		—
Other CRE		175		183		—		464		462		—
Total Commercial Real Estate		20,208		19,046		—		24,667		23,317		—
Construction		—		—		—		—		—		—
Commercial Working Capital		5,627		5,641		—		7,569		7,498		—
Commercial Other		1,090		1,095		—		2,095		2,100		—
Total Commercial		6,717		6,736		—		9,664		9,598		—
Home Equity and Home Improvement		—		—		—		—		—		—
Consumer Finance		—		—		—		—		—		—
Total loans with no allowance recorded	$	28,438	$	27,303	$	—	$	37,478	$	35,947	$	—
With an allowance recorded:
Residential Owner Occupied	$	5,070	$	4,910	$	165	$	3,926	$	3,884	$	148
Residential Non Owner Occupied		1,036		1,040		20		1,152		1,160		27
Total 1‑4 Family Residential Real Estate		6,106		5,950		185		5,078		5,044		175
Multi-Family Residential Real Estate		39		39		2		44		44		3
CRE Owner Occupied		2,011		1,592		28		2,419		1,935		38
CRE Non Owner Occupied		327		330		14		350		353		16
Agriculture Land		277		290		4		37		38		2
Other CRE		504		286		15		1,107		691		39
Total Commercial Real Estate		3,119		2,498		61		3,913		3,017		95
Construction		—		—		—		—		—		—
Commercial Working Capital		565		568		42		525		528		55
Commercial Other		243		239		23		560		352		24
Total Commercial		808		807		65		1,085		880		79
Home Equity and Home Improvement		904		857		62		1,013		963		242
Consumer Finance		16		16		—		45		45		1
Total loans with an allowance recorded	$	10,992	$	10,167	$	375	$	11,178	$	9,993	$	595

* Presented gross of charge-offs

Schedule of current balance of the aggregate amounts of non-performing assets, comprised of non-performing loans and real estate owned

The following table presents the current balance of the aggregate amounts of non-performing assets, comprised of non-performing loans and real estate owned on the dates indicated:

	September 30,		December 31,
	2019		2018
	(In Thousands)
Non-accrual loans	$	14,677	$	19,016
Loans over 90 days past due and still accruing		—		—
Total non-performing loans		14,677		19,016
Real estate and other assets held for sale		—		1,205
Total non-performing assets	$	14,677	$	20,221
Troubled debt restructuring, still accruing	$	10,334	$	11,573

Schedule of aging of the recorded investment in past due and non- accrual loans

The following table presents the aging of the recorded investment in past due and non- accrual loans as of September 30, 2019, by class of loans (In Thousands):

											Total
									Total		Non-
	Current		30‑59 days		60‑89 days		90+ days		Past Due		Accrual
Residential Owner Occupied	$	201,689	$	1,645	$	447	$	1,281	$	3,373	$	2,769
Residential Non Owner Occupied		125,670		26		13		19		58		221
Total 1‑4 Family Residential Real Estate		327,359		1,671		460		1,300		3,431		2,990
Multi-Family Residential Real Estate		276,399		—		—		—		—		—
CRE Owner Occupied		412,720		8,099		2		1,354		9,455		3,183
CRE Non Owner Occupied		560,436		—		—		561		561		610
Agriculture Land		121,945		—		—		1,641		1,641		4,370
Other Commercial Real Estate		52,285		5		—		—		5		24
Total Commercial Real Estate		1,147,386		8,104		2		3,556		11,662		8,187
Construction		207,633		—		—		—		—		—
Commercial Working Capital		238,132		273		—		2,502		2,775		2,502
Commercial Other		298,310		253		—		241		494		466
Total Commercial		536,442		526		—		2,743		3,269		2,968
Home Equity/Home Improvement		123,343		1,244		79		62		1,385		487
Consumer Finance		36,558		208		25		—		233		—
Total Loans	$	2,655,120	$	11,753	$	566	$	7,661	$	19,980	$	14,632

The following table presents the aging of the recorded investment in past due and non-accrual loans as of December 31, 2018, by class of loans (In Thousands):

											Total
									Total		Non
	Current		30‑59 days		60‑89 days		90+ days		Past Due		Accrual
Residential Owner Occupied	$	199,664	$	887	$	821	$	1,402	$	3,110	$	3,266
Residential Non Owner Occupied		119,988		64		180		165		409		363
Total 1‑4 Family Residential Real Estate		319,652		951		1,001		1,567		3,519		3,629
Multi-Family Residential Real Estate		278,748		—		—		—		—		102
CRE Owner Occupied		416,879		52		300		138		490		4,377
CRE Non Owner Occupied		534,823		6		119		—		125		620
Agriculture Land		129,040		66		—		2,869		2,935		5,253
Other Commercial Real Estate		45,232		11		—		—		11		—
Total Commercial Real Estate		1,125,974		135		419		3,007		3,561		10,250
Construction		142,096		—		—		—		—		—
Commercial Working Capital		217,832		268		—		3,838		4,106		4,021
Commercial Other		289,125		32		54		235		321		480
Total Commercial		506,957		300		54		4,073		4,427		4,501
Home Equity and Home Improvement		127,346		1,446		146		90		1,682		394
Consumer Finance		34,224		134		77		96		307		126
Total Loans	$	2,534,997	$	2,966	$	1,697	$	8,833	$	13,496	$	19,002

Schedule of present loans by class modified as TDRs that occurred

The following tables present loans by class modified as TDRs that occurred during the three and nine month periods ending September 30, 2019, and September 30, 2018:

	Loans Modified as a TDR for the Three			Loans Modified as a TDR for the Nine
	Months Ended September 30, 2019			Months Ended September 30, 2019
	($ in thousands)			($ in thousands)
	Number of	Recorded Investment		Number of	Recorded Investment
Troubled Debt Restructurings	Loans	(as of period end)		Loans	(as of period end)
1‑4 Family Owner Occupied	3	$	218	10	$	1,118
1‑4 Family Non Owner Occupied	0		—	0		—
Multi Family	0		—	0		—
CRE Owner Occupied	0		—	0		—
CRE Non Owner Occupied	0		—	0		—
Agriculture Land	0		—	0		—
Other CRE	0		—	0		—
Commercial Working Capital	1		101	2		101
Commercial Other	1		140	2		152
Home Equity and Improvement	0		—	2		26
Consumer Finance	0		—	—		—
Total	5	$	459	16	$	1,397

The loans described above increased the allowance for loan and lease losses (“ALLL”) by $11,000 in the three month period ending September 30, 2019, and increased the ALLL by $32,000 in the nine month period ending September 30, 2019.

	Loans Modified as a TDR for the Three			Loans Modified as a TDR for the Nine
	Months Ended September 30, 2018			Months Ended September 30, 2018
	($ in thousands)			($ in thousands)
	Number of	Recorded Investment		Number of	Recorded Investment
Troubled Debt Restructurings	Loans	(as of period end)		Loans	(as of period end)
1‑4 Family Owner Occupied	2	$	149	14	$	770
1‑4 Family Non Owner Occupied	1		29	3		170
Multi Family	0		—	0		—
CRE Owner Occupied	4		335	11		1,849
CRE Non Owner Occupied	0		—	1		44
Agriculture Land	0		—	0		—
Other CRE	0		—	0		—
Commercial Working Capital	0		—	5		2,823
Commercial Other	1		66	1		66
Home Equity and Improvement	5		123	7		123
Consumer Finance	4		10	4		10
Total	17	$	712	46	$	5,855

Schedule of present loans by class modified as TDRs for which there was a payment default within twelve months

The following tables present loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the three and nine month periods ended September 30, 2019, and September 30, 2018:

	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
	($ in thousands)			($ in thousands)
	Number of	Recorded Investment		Number of	Recorded Investment
Troubled Debt Restructurings That Subsequently Defaulted	Loans	(as of period end)		Loans	(as of period end)
1‑4 Family Owner Occupied	0	$	—	1	$	76
1‑4 Family Non Owner Occupied	0		—	0		—
CRE Owner Occupied	0		—	0		—
CRE Non Owner Occupied	0		—	0		—
Agriculture Land	0		—	0		—
Other CRE	0		—	0		—
Commercial Working Capital or Other	0		—	3		2,248
Commercial Other	0		—	0		—
Home Equity and Improvement	0		—	1		61
Consumer Finance	0		—	0		—
Total	0	$	0	1	$	2,385

The TDRs that subsequently defaulted described above had no effect on the ALLL for the three month period ended September 30, 2019 and increased the ALLL by $4,000 for the nine month period ended September 30, 2019.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed on the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification.

	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
	($ in thousands)			($ in thousands)
	Number of	Recorded Investment		Number of	Recorded Investment
Troubled Debt Restructurings That Subsequently Defaulted	Loans	(as of period end)		Loans	(as of period end)
1‑4 Family Owner Occupied	0	$	—	0	$	—
1‑4 Family Non Owner Occupied	0		—	0		—
CRE Owner Occupied	0		—	0		—
CRE Non Owner Occupied	0		—	0		—
Agriculture Land	0		—	0		—
Other CRE	0		—	0		—
Commercial Working Capital or Other	3		2,644	3	$	2,644
Commercial Other	1		30	2		226
Home Equity and Improvement	1		61	1		61
Consumer Finance	0		—	0		—
Total	5	$	2,735	6	$	2,931

Schedule of risk category of loans by class of loans

As of September 30, 2019, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (In Thousands):

Class	Pass		Special Mention		Substandard		Doubtful		Not Graded		Total
1‑4 Family Owner Occupied	$	9,189	$	—	$	3,076	$	—	$	192,797	$	205,062
1‑4 Family Non Owner Occupied		116,969		430		2,696		—		5,633		125,728
Total 1‑4 Family Real Estate		126,158		430		5,772		—		198,430		330,790
Multi-Family Residential Real Estate		275,565		—		729		—		105		276,399
CRE Owner Occupied		400,499		15,733		5,871		—		72		422,175
CRE Non Owner Occupied		554,742		3,814		2,441		—		—		560,997
Agriculture Land		106,318		3,529		13,739		—		—		123,586
Other CRE		49,745		849		549		—		1,147		52,290
Total Commercial Real Estate		1,111,304		23,925		22,600		—		1,219		1,159,048
Construction		182,359		16,662		—		—		23,612		207,633
Commercial Working Capital		227,053		7,875		5,979		—		—		240,907
Commercial Other		289,121		7,688		1,995		—		—		298,804
Total Commercial		516,174		15,563		7,974		—		—		539,711
Home Equity and Home Improvement		—		—		367		—		124,361		124,728
Consumer Finance		—		—		57		—		36,734		36,791
Total Loans	$	2,211,560	$	41,580	$	37,499	$	—	$	384,461	$	2,675,100

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 (In Thousands):

Class	Pass		Special Mention		Substandard		Doubtful		Not Graded		Total
Residential Owner Occupied	$	9,419	$	91	$	3,130	$	—	$	190,134	$	202,774
Residential Non Owner Occupied		109,885		700		3,087		—		6,725		120,397
Total 1‑4 Family Real Estate		119,304		791		6,217		—		196,859		323,171
Multi-Family Residential Real Estate		276,594		—		2,047		—		107		278,748
CRE Owner Occupied		402,008		5,724		9,547		—		89		417,368
CRE Non Owner Occupied		529,842		2,807		2,297		—		—		534,946
Agriculture Land		111,595		4,023		16,358		—		—		131,976
Other CRE		42,189		730		1,244		—		1,082		45,245
Total Commercial Real Estate		1,085,634		13,284		29,446		—		1,171		1,129,535
Construction		122,775		219		—		—		19,102		142,096
Commercial Working Capital		205,903		6,546		9,489		—		—		221,938
Commercial Other		279,234		7,011		3,201		—		—		289,446
Total Commercial		485,137		13,557		12,690		—		—		511,384
Home Equity and Home Improvement		—		—		434		—		128,594		129,028
Consumer Finance		—		—		206		—		34,325		34,531
Total Loans	$	2,089,444	$	27,851	$	51,040	$	—	$	380,158	$	2,548,493

Schedule of outstanding balance of loans

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding balance of those loans is as follows (In Thousands):

	September 30, 2019		December 31, 2018
1‑4 Family Residential Real Estate	$	1,019	$	1,045
Multi-Family Residential Real Estate		293		300
Commercial Real Estate Loans		727		899
Commercial		65		227
Consumer		—		—
Total Outstanding Balance	$	2,104	$	2,471
Recorded Investment, net of allowance of $0	$	1,917	$	2,331

Schedule of accretable yield, or income expected to be collected

Accretable yield, or income expected to be collected, is as follows:

	2019		2018
Balance at January 1	$	468	$	804
New Loans Purchased		—		—
Accretion of Income		(26)		(115)
Reclassification from Non-accretable		—		—
Charge-off of Accretable Yield		—		(197)
Balance at September 30	$	442	$	492