Loans, Allowance for Loan Losses, and Credit Quality Indicators | NOTE 3 - LOANS, ALLOWANCE FOR LOAN LOSSES, AND CREDIT QUALITY INDICATORS Loans are stated at the amount of unpaid principal net of loan premiums or discounts for purchased loans, net of deferred loan origination fees, discounts associated with retained portions of loans sold, and an allowance for loan losses. Interest on loans is calculated using the simple-interest method on daily balances of the principal amount outstanding. Loan origination fees, net of origination costs and discounts, are amortized over the lives of the loans as adjustments to yield. Major classifications of period-end loans are as follows: June 30, % of Gross December 31, % of Gross June 30, % of Gross 2015 Loans 2014 Loans 2014 Loans Real estate loans Multi-family residential $ 68,289 5.23 % $ 51,586 4.93 % $ 50,867 4.93 % Residential 1-4 family 57,112 4.37 % 47,222 4.51 % 46,287 4.49 % Owner-occupied commercial 346,065 26.50 % 259,805 24.84 % 255,562 24.78 % Nonowner-occupied commercial 275,077 21.06 % 201,558 19.27 % 182,141 17.66 % Total permanent real estate loans 746,543 57.16 % 560,171 53.55 % 534,857 51.86 % Construction loans Multi-family residential 6,590 0.50 % 8,472 0.81 % 19,539 1.89 % Residential 1-4 family 30,145 2.31 % 28,109 2.69 % 33,951 3.29 % Commercial real estate 31,659 2.42 % 18,595 1.78 % 28,019 2.72 % Commercial bare land and acquisition & development 15,870 1.22 % 12,159 1.16 % 11,096 1.08 % Residential bare land and acquisition & development 7,074 0.54 % 6,632 0.63 % 6,240 0.61 % Total construction real estate loans 91,338 6.99 % 73,967 7.07 % 98,845 9.59 % Total real estate loans 837,881 64.15 % 634,138 60.62 % 633,702 61.45 % Commercial loans 459,458 35.18 % 406,568 38.87 % 392,810 38.10 % Consumer loans 3,783 0.29 % 3,862 0.37 % 3,410 0.33 % Other loans 5,025 0.38 % 1,443 0.14 % 1,207 0.12 % Gross loans 1,306,147 100.00 % 1,046,011 100.00 % 1,031,129 100.00 % Deferred loan origination fees (1,215 ) (990 ) (1,108 ) 1,304,932 1,045,021 1,030,021 Allowance for loan losses (16,013 ) (15,637 ) (15,675 ) Total loans, net of allowance for loan losses and net deferred fees $ 1,288,919 $ 1,029,384 $ 1,014,346 At June 30, 2015, outstanding loans to dental professionals totaled $321,055 and represented 24.58% of total outstanding loans, compared to dental professional loans of $306,391 or 29.29% of total outstanding loans at December 31, 2014, and $302,822 or 29.37% of total outstanding loans at June 30, 2014. See Note 4 for additional information on the dental loan portfolio. There are no other industry concentrations in excess of 10% of the total loan portfolio. However, as of June 30, 2015, 64.15% of the Company’s loan portfolio was collateralized by real estate and is, therefore, susceptible to changes in real estate market conditions. Allowance for Loan Losses A summary of activity in the allowance for loan losses for the three and six months ended June 30, 2015, and 2014 is as follows: Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Balance, beginning of period $ 15,724 $ 15,394 $ 15,637 $ 15,917 Provision charged to income 550 — 550 — Loans charged against allowance (454 ) (30 ) (527 ) (631 ) Recoveries credited to allowance 193 311 353 389 Balance, end of period $ 16,013 $ 15,675 $ 16,013 $ 15,675 The allowance for loan losses is established as an amount that management considers adequate to absorb possible losses on existing loans within the portfolio. The allowance consists of general, specific, and unallocated components. The general component is based upon all loans collectively evaluated for impairment. The specific component is based upon all loans individually evaluated for impairment. The unallocated component represents credit losses inherent in the loan portfolio that may not have been contemplated in the general risk factors or the specific allowance analysis. Loans are charged against the allowance when management believes the collection of principal or interest is unlikely. The Company performs regular credit reviews of the loan portfolio to determine the credit quality and adherence to underwriting standards. When loans are originated, they are assigned a risk rating that is reassessed periodically during the term of the loan through the credit review process and on an ongoing basis by management. The Company’s internal risk rating methodology assigns risk ratings ranging from one to ten, where a higher rating represents higher risk. The ten-point risk rating categories are a primary factor in determining an appropriate amount for the allowance for loan losses. Estimated credit losses reflect consideration of all significant factors that affect the collectability of the loan portfolio. The historical loss rate for each group of loans with similar risk characteristics is determined based on the Company’s own loss experience in that group. Historical loss experience and recent trends in losses provide a reasonable starting point for analysis, however they do not by themselves form a sufficient basis to determine the appropriate level for the allowance for loan losses. Qualitative or environmental factors that are likely to cause estimated credit losses to differ from historical losses are also considered, including but not limited to: • Changes in international, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments, • Changes in the nature and volume of the portfolio and in the terms of loans, • Changes in the experience, ability, and depth of lending management and other relevant staff, • Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans, • Changes in the quality of the institution’s loan review system, • Changes in the value of underlying collateral for collateral-dependent loans, • The existence and effect of any concentrations of credit, and changes in the level of such concentrations, • The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio, • Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses, and • Changes in the current and future US political environment, including debt ceiling negotiations, government shutdown and healthcare reform, that may affect national, regional and local economic conditions, taxation, or disruption of national or global financial markets. The adequacy of the allowance for loan losses and the reserve for unfunded commitments is determined using a systematic methodology and is monitored regularly based on management’s evaluation of numerous factors. For each portfolio segment, these factors include: • The quality of the current loan portfolio, • The trend in the migration of the loan portfolio’s risk ratings, • The velocity of migration of losses and potential losses, • Current economic conditions, • Loan concentrations, • Loan growth rates, • Past-due and nonperforming trends, • Evaluation of specific loss estimates for all significant problem loans, • Recovery experience, and • Peer comparison loss rates. A summary of the activity in the allowance for loan losses by major loan classification follows: For the three months ended June 30, 2015 Commercial Real Estate Construction Consumer Unallocated Total Beginning balance $ 5,550 $ 7,537 $ 1,062 $ 52 $ 1,523 $ 15,724 Charge-offs (454 ) — — — — (454 ) Recoveries 183 3 3 4 — 193 Provision (reclassification) 622 124 46 (4 ) (238 ) 550 Ending balance $ 5,901 $ 7,664 $ 1,111 $ 52 $ 1,285 $ 16,013 For the six months ended June 30, 2015 Commercial Real Estate Construction Consumer Unallocated Total Beginning balance $ 5,733 $ 7,494 $ 1,077 $ 54 $ 1,279 $ 15,637 Charge-offs (485 ) (42 ) — — — (527 ) Recoveries 287 48 8 10 — 353 Provision (reclassification) 366 164 26 (12 ) 6 550 Ending balance $ 5,901 $ 7,664 $ 1,111 $ 52 $ 1,285 $ 16,013 At June 30, 2015, the allowance for loan losses on dental loans was $4,080 compared to $4,141 at December 31, 2014 and $4,136 at June 30, 2014. See Note 4 for additional information on the dental loan portfolio. Balances as of June 30, 2015 Commercial Real Estate Construction Consumer Unallocated Total Ending allowance: collectively evaluated for impairment $ 5,847 $ 7,610 $ 1,002 $ 52 $ 1,285 $ 15,796 Ending allowance: individually evaluated for impairment 54 54 109 — — 217 Total ending allowance $ 5,901 $ 7,664 $ 1,111 $ 52 $ 1,285 $ 16,013 Ending loan balance: collectively evaluated for impairment $ 462,287 $ 740,753 $ 90,991 $ 3,783 $ — $ 1,297,814 Ending loan balance: individually evaluated for impairment 2,196 5,790 347 — — 8,333 Total ending loan balance $ 464,483 $ 746,543 $ 91,338 $ 3,783 $ — $ 1,306,147 Balances as of December 31, 2014 Commercial Real Estate Construction Consumer Unallocated Total Ending allowance: collectively evaluated for impairment $ 5,662 $ 7,438 $ 959 $ 54 $ 1,279 $ 15,392 Ending allowance: individually evaluated for impairment 71 56 118 — — 245 Total ending allowance $ 5,733 $ 7,494 $ 1,077 $ 54 $ 1,279 $ 15,637 Ending loan balance: collectively evaluated for impairment $ 405,414 $ 555,146 $ 73,610 $ 3,862 $ — $ 1,038,032 Ending loan balance: individually evaluated for impairment 2,597 5,025 357 — — 7,979 Total ending loan balance $ 408,011 $ 560,171 $ 73,967 $ 3,862 $ — $ 1,046,011 Balances as of June 30, 2014 Commercial Real Estate Construction Consumer Unallocated Total Ending allowance: collectively evaluated for impairment $ 5,580 $ 7,423 $ 1,219 $ 59 $ 1,251 $ 15,532 Ending allowance: individually evaluated for impairment 16 6 121 — — 143 Total ending allowance $ 5,596 $ 7,429 $ 1,340 $ 59 $ 1,251 $ 15,675 Ending loan balance: collectively evaluated for impairment $ 389,823 $ 528,734 $ 98,480 $ 3,410 $ — $ 1,020,447 Ending loan balance: individually evaluated for impairment 4,194 6,123 365 — — 10,682 Total ending loan balance $ 394,017 $ 534,857 $ 98,845 $ 3,410 $ — $ 1,031,129 Management believes that the allowance for loan losses was adequate as of June 30, 2015. However, future loan losses may exceed the levels provided for in the allowance for loan losses and could possibly result in additional charges to the provision for loan losses. Credit Quality Indicators The Company uses the following loan grades, which are also often used by regulators when assessing the credit quality of a loan portfolio. Pass Special Mention Substandard Doubtful Management strives to consistently apply these definitions when allocating its loans by loan grade. The loan portfolio is continuously monitored for changes in credit quality and management takes appropriate action to update the loan risk ratings accordingly. Management has not changed the Company’s policy towards its use of credit quality indicators during the periods reported. The following tables present the Company’s loan portfolio information by loan type and credit grade at June 30, 2015, December 31, 2014, and June 30, 2014: Credit Quality Indicators As of June 30, 2015 Loan Grade Pass Special Mention Substandard Doubtful Totals Real estate loans Multi-family residential $ 66,793 $ — $ 1,496 $ — $ 68,289 Residential 1-4 family 49,551 — 7,561 — 57,112 Owner-occupied commercial 334,002 — 12,063 — 346,065 Nonowner-occupied commercial 270,739 — 4,338 — 275,077 Total real estate loans 721,085 — 25,458 — 746,543 Construction Multi-family residential 6,590 — — — 6,590 Residential 1-4 family 30,073 — 72 — 30,145 Commercial real estate 30,512 — 1,147 — 31,659 Commercial bare land and acquisition & development 15,586 — 284 — 15,870 Residential bare land and acquisition & development 6,592 — 482 — 7,074 Total construction loans 89,353 — 1,985 — 91,338 Commercial and other 450,918 — 13,565 — 464,483 Consumer 3,782 — 1 — 3,783 Totals $ 1,265,138 $ — $ 41,009 $ — $ 1,306,147 Credit Quality Indicators As of December 31, 2014 Loan Grade Pass Special Mention Substandard Doubtful Totals Real estate loans Multi-family residential $ 50,074 $ — $ 1,512 $ — $ 51,586 Residential 1-4 family 39,527 — 7,695 — 47,222 Owner-occupied commercial 254,166 — 5,639 — 259,805 Nonowner-occupied commercial 197,940 — 3,618 — 201,558 Total real estate loans 541,707 — 18,464 — 560,171 Construction Multi-family residential 8,472 — — — 8,472 Residential 1-4 family 28,109 — — — 28,109 Commercial real estate 17,645 — 950 — 18,595 Commercial bare land and acquisition & development 11,917 — 242 — 12,159 Residential bare land and acquisition & development 5,954 — 678 — 6,632 Total construction loans 72,097 — 1,870 — 73,967 Commercial and other 395,918 — 12,093 — 408,011 Consumer 3,854 — 8 — 3,862 Totals $ 1,013,576 $ — $ 32,435 $ — $ 1,046,011 Credit Quality Indicators As of June 30, 2014 Loan Grade Pass Special Mention Substandard Doubtful Totals Real estate loans Multi-family residential $ 49,341 $ — $ 1,526 $ — $ 50,867 Residential 1-4 family 38,453 — 7,834 — 46,287 Owner-occupied commercial 244,255 4,219 7,088 — 255,562 Nonowner-occupied commercial 178,168 — 3,973 — 182,141 Total real estate loans 510,217 4,219 20,421 — 534,857 Construction Multi-family residential 19,539 — — — 19,539 Residential 1-4 family 33,951 — — — 33,951 Commercial real estate 28,019 — — — 28,019 Commercial bare land and acquisition & development 10,866 — 230 — 11,096 Residential bare land and acquisition & development 5,487 — 753 — 6,240 Total construction loans 97,862 — 983 — 98,845 Commercial and other 380,601 — 13,416 — 394,017 Consumer 3,398 — 12 — 3,410 Totals $ 992,078 $ 4,219 $ 34,832 $ — $ 1,031,129 At June 30, 2015, December 31, 2014, and June 30, 2014, the Company had $1,077, $562 and $417, respectively, in unfunded commitments on its classified loans, which is included in the calculation of our classified asset ratio. Past Due and Nonaccrual Loans The Company uses the terms “past due” and “delinquent” interchangeably. Amortizing loans are considered past due or delinquent based upon the number of contractually required payments not made. Delinquency status for all contractually matured loans, commercial and commercial real estate loans with non-monthly amortization, and all other extensions of credit is determined based upon the number of calendar months past due. The following tables present an aging analysis of past due and nonaccrual loans at June 30, 2015, December 31, 2014, and June 30, 2014: Age Analysis of Loans Receivable As of June 30, 2015 30-59 Days Past Due Still Accruing 60-89 Days Past Due Still Accruing Greater Than 90 days Past Due Still Accruing Nonaccrual Total Past Due and Nonaccrual Total Current Total Loans Receivable Real estate loans Multi-family residential $ — $ — $ — $ — $ — $ 68,289 $ 68,289 Residential 1-4 family 173 — — 688 861 56,251 57,112 Owner-occupied commercial 1,278 338 — 1,117 2,733 343,332 346,065 Nonowner-occupied commercial — — — 878 878 274,199 275,077 Total real estate loans 1,451 338 — 2,683 4,472 742,071 746,543 Construction Multi-family residential — — — — — 6,590 6,590 Residential 1-4 family — — — — — 30,145 30,145 Commercial real estate — — — — — 31,659 31,659 Commercial bare land and acquisition & development — — — — — 15,870 15,870 Residential bare land and acquisition & development — — — — — 7,074 7,074 Total construction loans — — — — — 91,338 91,338 Commercial and other 686 — — 955 1,641 462,842 464,483 Consumer 6 — — — 6 3,777 3,783 Total $ 2,143 $ 338 $ — $ 3,638 $ 6,119 $ 1,300,028 $ 1,306,147 Age Analysis of Loans Receivable As of December 31, 2014 30-59 Days Past Due Still Accruing 60-89 Days Past Due Still Accruing Greater Than 90 days Still Accruing Nonaccrual Total Past Due and Nonaccrual Total Current Total Loans Receivable Real estate loans Multi-family residential $ — — $ — $ — $ — $ 51,586 $ 51,586 Residential 1-4 family 568 — — 321 889 46,333 47,222 Owner-occupied commercial — — — 599 599 259,206 259,805 Nonowner-occupied commercial 605 — — 906 1,511 200,047 201,558 Total real estate loans 1,173 — — 1,826 2,999 557,172 560,171 Construction Multi-family residential — — — — — 8,472 8,472 Residential 1-4 family — — — — — 28,109 28,109 Commercial real estate — — — — — 18,595 18,595 Commercial bare land and acquisition & development — — — — — 12,159 12,159 Residential bare land and acquisition & development — — — — — 6,632 6,632 Total construction loans — — — — — 73,967 73,967 Commercial and other 327 — — 869 1,196 406,815 408,011 Consumer 4 1 — — 5 3,857 3,862 Total $ 1,504 $ 1 $ — $ 2,695 $ 4,200 $ 1,041,811 $ 1,046,011 Age Analysis of Loans Receivable As of June 30, 2014 30-59 Days Past Due Still Accruing 60-89 Days Past Due Still Accruing Greater Than 90 days Past Due Still Accruing Nonaccrual Total Past Due and Nonaccrual Total Current Total Loans Receivable Real estate loans Multi-family residential $ — $ — $ — $ — $ — $ 50,867 $ 50,867 Residential 1-4 family — — — 473 473 45,814 46,287 Owner-occupied commercial — — — 1,703 1,703 253,859 255,562 Nonowner-occupied commercial 38 520 — 708 1,266 180,875 182,141 Total real estate loans 38 520 — 2,884 3,442 531,415 534,857 Construction Multi-family residential — — — — — 19,539 19,539 Residential 1-4 family — — — — — 33,951 33,951 Commercial real estate — — — — — 28,019 28,019 Commercial bare land and acquisition & development — — — — — 11,096 11,096 Residential bare land and acquisition & development — — — — — 6,240 6,240 Total construction loans — — — — — 98,845 98,845 Commercial and other — 247 — 2,047 2,294 391,723 394,017 Consumer 9 — — — 9 3,401 3,410 Total $ 47 $ 767 $ — $ 4,931 $ 5,745 $ 1,025,384 $ 1,031,129 Impaired Loans Regular credit reviews of the portfolio are performed to identify loans that are considered potentially impaired. A loan is considered impaired when, based on current information and events, the Company is unlikely to collect all principal and interest due according to the terms of the loan agreement. When the amount of the impairment represents a confirmed loss, it is charged off against the allowance for loan losses. Impaired loans are often reported net of government guarantees to the extent that the guarantees are expected to be collected. Impaired loans generally include all loans classified as nonaccrual and troubled debt restructurings. Impaired loans are included in the specific calculation of allowance for loan losses. Accrual of interest is discontinued on impaired loans when management believes that, after considering economic and business conditions and collection efforts, the borrower’s financial condition is such that collection of principal or interest is doubtful. Accrued but uncollected interest is generally reversed when loans are placed on nonaccrual status. Interest income is subsequently recognized only to the extent cash payments are received satisfying all delinquent principal and interest amounts, and the prospects for future payments in accordance with the loan agreement appear relatively certain. In accordance with GAAP, payments received on nonaccrual loans are applied to the principal balance and no interest income is recognized. Interest income may be recognized on impaired loans that are not on nonaccrual status. The following tables display an analysis of the Company’s impaired loans at June 30, 2015, December 31, 2014, and June 30, 2014: Impaired Loan Analysis As of June 30, 2015 Recorded Recorded Recorded Unpaid Average Related Real estate Multi-family residential $ — $ — $ — $ — $ — $ — Residential 1-4 family 878 312 1,190 1,702 1,155 8 Owner-occupied commercial 2,144 — 2,144 2,430 1,983 — Nonowner-occupied commercial 2,410 46 2,456 2,552 2,469 46 Total real estate loans 5,432 358 5,790 6,684 5,607 54 Construction Multi-family residential — — — — — — Residential 1-4 family — — — — 28 — Commercial real estate — — — — — — Commercial bare land and acquisition & development — — — — — — Residential bare land and acquisition & development — 347 347 347 351 109 Total construction loans — 347 347 347 379 109 Commercial and other 1,176 1,020 2,196 2,559 2,456 54 Consumer — — — — — — Total impaired loans $ 6,608 $ 1,725 $ 8,333 $ 9,590 $ 8,442 $ 217 Impaired Loan Analysis As of December 31, 2014 Recorded Recorded Recorded Unpaid Average Related Real estate Multi-family residential $ — $ — $ — $ — $ — $ — Residential 1-4 family 564 313 877 1,181 1,123 2 Owner-occupied commercial 1,645 — 1,645 1,878 2,372 — Nonowner-occupied commercial 2,449 54 2,503 2,523 1,927 54 Total real estate loans 4,658 367 5,025 5,582 5,422 56 Construction Multi-family residential — — — — — — Residential 1-4 family — — — — — — Commercial real estate — — — — — — Commercial bare land and acquisition & development — — — — — — Residential bare land and acquisition & development — 357 357 357 365 118 Total construction loans — 357 357 357 365 118 Commercial and other 2,025 572 2,597 2,946 3,924 71 Consumer — — — — — — Total impaired loans $ 6,683 $ 1,296 $ 7,979 $ 8,885 $ 9,711 $ 245 Impaired Loan Analysis As of June 30, 2014 Recorded Recorded Recorded Unpaid Average Related Real estate Multi-family residential $ — $ — $ — $ — $ — $ — Residential 1-4 family 730 316 1,046 1,373 1,254 4 Owner-occupied commercial 2,601 166 2,767 3,001 2,769 2 Nonowner-occupied commercial 2,310 — 2,310 2,317 1,078 — Total real estate loans 5,641 482 6,123 6,691 5,101 6 Construction Multi-family residential — — — — — — Residential 1-4 family — — — — — — Commercial real estate — — — — — — Commercial bare land and acquisition & development — — — — — — Residential bare land and acquisition & development — 365 365 365 372 121 Total construction loans — 365 365 365 372 121 Commercial and other 3,672 522 4,194 9,333 4,926 16 Consumer — — — — — — Total impaired loans $ 9,313 $ 1,369 $ 10,682 $ 16,389 $ 10,399 $ 143 The impaired balances reported above are not adjusted for government guarantees of $1,539, $1,123, and $1,151 at June 30, 2015, December 31, 2014, and June 30, 2014, respectively. The recorded investment in impaired loans, net of government guarantees, totaled $6,794, $6,856 and $9,531 at June 30, 2015, December 31, 2014, and June 30, 2014, respectively. Troubled Debt Restructurings In the normal course of business, the Company may modify the terms of certain loans, attempting to protect as much of its investment as possible. Management evaluates the circumstances surrounding each modification to determine whether it is a troubled debt restructuring (“TDR”). TDRs exist when 1) the restructuring constitutes a concession, and 2) the debtor is experiencing financial difficulties. The following table displays the Company’s TDRs by class at June 30, 2015, December 31, 2014, and June 30, 2014: June 30, 2015 Troubled Debt Restructurings as of June 30, 2014 Number of Post-Modification Outstanding Recorded Number of Contracts Post-Modification Number of Contracts Post-Modification Real estate Multifamily residential — $ — — $ — — $ — Residential 1-4 family 6 701 7 768 7 795 Owner-occupied commercial 2 1,027 2 1,046 5 1,988 Non owner-occupied commercial 7 2,408 7 2,503 3 2,309 Total real estate loans 15 4,136 16 4,317 15 5,092 Construction Multifamily residential — — — — — — Residential 1-4 family — — — — — — Commercial real estate — — — — — — Commercial bare land and acquisition & development — — — — — — Residential bare land and acquisition & development — — — — — — Total construction loans — — — — — — Commercial and other 11 1,941 12 2,259 11 2,553 Consumer — — — — — — Total 26 $ 6,077 28 $ 6,576 26 $ 7,645 The recorded investment in TDRs on nonaccrual status totaled $1,730, $1,649, and $2,260 at June 30, 2015, December 31, 2014, and June 30, 2014, respectively. The Company’s policy is that loans placed on nonaccrual will typically remain on nonaccrual status until all principal and interest payments are brought current and the prospect for future payment in accordance with the loan agreement appears relatively certain. The Company’s policy generally refers to six months of payment performance as sufficient to warrant a return to accrual status. For the six months ended June 30, 2015, the Company identified no TDRs that were newly considered impaired for which impairment was previously measured under the Company’s general loan loss allowance methodology. The types of modifications offered can generally be described in the following categories: Rate Modification - Term Modification - Interest-only Modification - Combination Modification - There were no newly restructured loans identified in the six months ended June 30, 2015. Below is a table of the newly restructured loans identified in the six months ended June 30, 2014. Troubled Debt Restructurings Identified During the Six Months ended June 30, 2014 Rate Modification Term Modification Interest-only Modification Combination Modification Real estate Multi-family residential $ — $ — $ — $ — Residential 1-4 family — — — — Owner-occupied commercial — — — — Nonowner-occupied commercial — 1,601 — — Total real estate loans — 1,601 — — Construction Multi-family residential — — — — Residential 1-4 family — — — — Commercial real estate — — — — Commercial bare land and acquisition & development — — — — Residential bare land and acquisition & development — — — — Total construction loans — — — — Commercial and other — 280 574 — Consumer — — — — Total $ — $ 1,881 $ 574 $ — Subsequent to a loan being classified as a TDR, a borrower may become unwilling or unable to abide by the terms of the modified agreement. In such cases of default, the Company takes appropriate action to recover principal and interest payments including the use of foreclosure proceedings. There were no TDRs that subsequently defaulted within the first twelve months of restructure during the periods ended June 30, 2015 and 2014. At June 30, 2015, December 31, 2014, and June 30, 2014, the Company had no commitments to lend additional funds on loans restructured as TDRs. |