Allowance for Credit Losses [Text Block] | Note 5: Credit Quality Assessment Allowance for Credit Losses The following table provides information on the activity in the allowance for credit losses by the respective loan portfolio segment for the three month periods ended March 31, 2019 and March 31, 2018: March 31, 2019 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance for credit losses: Beginning balance $ 741 $ 1,170 $ 292 $ 735 $ 4,057 $ 2,644 $ 234 $ 9,873 Charge-offs (220 ) (124 ) (250 ) - (2,026 ) (227 ) (7 ) (2,854 ) Recoveries - - 5 - 2 2 1 10 Provision for credit losses 699 326 343 82 1,155 (876 ) (4 ) 1,725 Ending balance $ 1,220 $ 1,372 $ 390 $ 817 $ 3,188 $ 1,543 $ 224 $ 8,754 March 31, 2018 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance for credit losses: Beginning balance $ 735 $ 668 $ 177 $ 617 $ 1,410 $ 2,529 $ 23 $ 6,159 Charge-offs (202 ) (99 ) (89 ) (1 ) (534 ) (269 ) (4 ) (1,198 ) Recoveries - - - - 2 61 4 67 Provision for credit losses 30 167 98 82 592 151 - 1,120 Ending balance $ 563 $ 736 $ 186 $ 698 $ 1,470 $ 2,472 $ 23 $ 6,148 The following table provides additional information on the allowance for credit losses at March 31, 2019 and December 31, 2018: March 31, 2019 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance allocated to: individually evaluated for impairment $ - $ - $ - $ - $ - $ - $ - $ - collectively evaluated for impairment $ 1,220 $ 1,372 $ 390 $ 817 $ 3,188 $ 1,543 $ 224 $ 8,754 Loans: Ending balance $ 128,508 $ 402,164 $ 84,551 $ 221,283 $ 433,023 $ 325,493 $ 52,156 $ 1,647,178 individually evaluated for impairment $ 1,241 $ 13,298 $ 1,099 $ 45 $ 2,621 $ 2,486 $ 172 $ 20,962 collectively evaluated for impairment $ 127,267 $ 388,866 $ 83,452 $ 221,238 $ 430,402 $ 323,007 $ 51,984 $ 1,626,216 December 31, 2018 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Allowance allocated to: individually evaluated for impairment $ - $ - $ - $ - $ 2,195 $ 200 $ - $ 2,395 collectively evaluated for impairment $ 741 $ 1,170 $ 292 $ 735 $ 1,862 $ 2,444 $ 234 7,478 Loans: Ending balance $ 123,671 $ 383,044 $ 89,645 $ 234,102 $ 427,747 $ 336,876 $ 54,666 $ 1,649,751 individually evaluated for impairment $ 1,449 $ 13,259 $ 1,137 $ 1,268 $ 5,018 $ 2,455 $ 174 24,760 collectively evaluated for impairment $ 122,222 $ 369,785 $ 88,508 $ 232,834 $ 422,729 $ 334,421 $ 54,492 $ 1,624,991 First Mariner acquired loans were evaluated for impairment subsequent to the merger. No allowance was required on these loans due to the assigned credit marks on these loans. When potential losses are identified, a specific provision and/or charge-off may be taken, based on the then current likelihood of repayment, that is at least in the amount of the collateral deficiency, and any potential collection costs, as determined by the independent third party appraisal. All loans that are considered impaired are subject to the completion of an impairment analysis. This analysis highlights any potential collateral deficiencies. A specific amount of impairment is established based on the Bank’s calculation of the probable loss inherent in the individual loan. The actual occurrence and severity of losses involving impaired credits can differ substantially from estimates. Credit risk profile by portfolio segment based upon internally assigned risk assignments are presented below: March 31, 2019 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Credit quality indicators: Not classified $ 127,392 $ 389,844 $ 83,452 $ 220,692 $ 430,322 $ 323,033 $ 51,984 $ 1,626,719 Special mention - - - - - - - - Substandard 1,116 12,320 1,099 591 2,701 2,460 172 20,459 Doubtful - - - - - - - - Total $ 128,508 $ 402,164 $ 84,551 $ 221,283 $ 433,023 $ 325,493 $ 52,156 $ 1,647,178 December 31, 2018 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Credit quality indicators: Not classified $ 122,270 $ 370,766 $ 88,507 $ 228,408 $ 422,591 $ 334,152 $ 54,492 $ 1,621,186 Special mention 78 - - 3,877 - - - 3,955 Substandard 1,323 12,278 1,138 1,817 5,156 2,724 174 24,610 Doubtful - - - - - - - - Total $ 123,671 $ 383,044 $ 89,645 $ 234,102 $ 427,747 $ 336,876 $ 54,666 $ 1,649,751 Special Mention - A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Substandard - Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Doubtful - Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. Loans classified Special Mention, Substandard, Doubtful or Loss are reviewed at least quarterly to determine their appropriate classification. Non-classified residential mortgage loans and consumer loans are not evaluated unless a specific event occurs to raise the awareness of possible credit deterioration. An aged analysis of past due loans are as follows: March 31, 2019 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Analysis of past due loans: Accruing loans current $ 126,998 $ 381,720 $ 82,248 $ 221,238 $ 429,809 $ 322,907 $ 51,968 $ 1,616,888 Accruing loans past due: 30-59 days past due - 7,767 754 - 593 126 6 9,246 60-89 days past due 394 357 450 - - - 10 1,211 Greater than 90 days past due - - - - - - - - Total past due 394 8,124 1,204 - 593 126 16 10,457 Non-accrual loans 1 1,116 12,320 1,099 45 2,621 2,460 172 19,833 Total loans $ 128,508 $ 402,164 $ 84,551 $ 221,283 $ 433,023 $ 325,493 $ 52,156 $ 1,647,178 December 31, 2018 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) and land first lien junior lien occupied occupied and leases loans Total Analysis of past due loans: Accruing loans current $ 121,831 $ 361,521 $ 86,884 $ 232,834 $ 422,297 $ 334,058 $ 54,483 $ 1,613,908 Accruing loans past due: 30-59 days past due - 6,433 937 - 432 94 9 7,905 60-89 days past due 166 2,241 687 - - 307 - 3,401 Greater than 90 days past due 351 570 - - - - - 921 Total past due 517 9,244 1,624 - 432 401 9 12,227 Non-accrual loans 1 1,323 12,278 1,137 1,268 5,018 2,417 174 23,615 Total loans $ 123,671 $ 383,044 $ 89,645 $ 234,102 $ 427,747 $ 336,876 $ 54,666 $ 1,649,751 (1) Included are purchased credit impaired loans where the Company amortizes the accretable discount into interest income, however these loans do not accrue interest based on the terms of the loan. Total loans either in non-accrual status or in excess of 90 days delinquent totaled $ 19.8 1.2 24.5 1.5 The impaired loans at March 31, 2019 and December 31, 2018 are as follows: March 31, 2019 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) & land first lien junior lien occupied occupied and leases loans Total Impaired loans: Recorded investment 1 $ 1,241 $ 13,298 $ 1,099 $ 45 $ 2,621 $ 2,486 $ 172 $ 20,962 With an allowance recorded - - - - - - - - With no related allowance recorded 1,241 13,298 1,099 45 2,621 2,486 172 20,962 Related allowance - - - - - - - - Unpaid principal 1,859 14,728 1,420 300 4,376 4,919 184 27,786 Average balance of impaired loans 1,992 15,974 1,623 300 4,502 5,440 192 30,023 Interest income recognized 1 66 6 - 7 7 1 88 December 31, 2018 Commercial Commercial Commercial Construction Residential Residential owner non-owner loans Consumer (in thousands) & land first lien junior lien occupied occupied and leases loans Total Impaired loans: Recorded investment 1 $ 1,449 $ 13,259 $ 1,137 $ 1,268 $ 5,018 $ 2,455 $ 174 $ 24,760 With an allowance recorded - - - - 2,816 200 - 3,016 With no related allowance recorded 560 5,184 100 45 2,202 2,255 - 10,346 Related allowance - - - - 2,195 200 - 2,395 Unpaid principal 1,873 14,425 1,456 1,569 5,295 4,868 185 29,671 Average balance of impaired loans 1,873 15,446 1,448 1,569 5,340 5,556 185 31,417 Interest income recognized - 474 51 16 5 125 5 676 (1) Included are purchased credit impaired loans where the Company amortizes the accretable discount into interest income, however these loans do not accrue interest based on the terms of the loan. Included in the total impaired loans above were non-accrual loans of $ 19.8 23.6 388 358 2019 and 2018, respectively. Loans may have their terms restructured (e.g., interest rates, loan maturity date, payment and amortization period, etc.) in circumstances that provide payment relief to a borrower experiencing financial difficulty. Such restructured loans are considered impaired loans that may either be in accruing status or non-accruing status. Non-accruing restructured loans may return to accruing status provided there is a sufficient period of payment performance in accordance with the restructure terms. Loans may be removed from the restructured category in the year subsequent to the restructuring if they have performed based on all of the restructured loan terms. The troubled debt restructured loans (“TDRs”) at March 31, 2019 and December 31, 2018 are as follows: March 31, 2019 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Construction and land - $ - 1 $ 125 $ 125 Residential real estate - first lien 2 287 2 978 1,265 Commercial - non-owner occupied 1 800 - - 800 Commercial loans and leases 1 514 - - 514 4 $ 1,601 3 $ 1,103 $ 2,704 December 31, 2018 Number Non-Accrual Number Accrual Total (dollars in thousands) of Loans Status of Loans Status TDRs Construction and land - $ - 1 $ 125 $ 125 Residential real estate - first lien 2 291 2 982 1,273 Commercial - non-owner occupied 2 2,815 - - 2,815 Commercial loans and leases 1 514 - - 514 5 $ 3,620 3 $ 1,107 $ 4,727 A summary of TDR modifications outstanding and performing under modified terms is as follows: March 31, 2019 Not Performing Performing Related to Modified to Modified Total (in thousands) Allowance Terms Terms TDRs Construction and land Extension or other modification $ - $ - $ 125 $ 125 Residential real estate - first lien Extension or other modification - 287 978 1,265 Commercial RE - non-owner occupied Rate modification - 800 - 800 Commercial loans Forbearance - 514 - 514 Total troubled debt restructured loans $ - $ 1,601 $ 1,103 $ 2,704 December 31, 2018 Not Performing Performing Related to Modified to Modified Total (in thousands) Allowance Terms Terms TDRs Construction and land Extension or other modification $ - $ - $ 125 $ 125 Residential real estate - first lien Extension or other modification - 291 982 1,273 Commercial RE - non-owner occupied Rate modification 2,195 2,815 - 2,815 Commercial loans Forbearance - 514 - 514 Total troubled debt restructured loans $ 2,195 $ 3,620 $ 1,107 $ 4,727 There were no new loans restructured during the three months ended March 31, 2019 and March 31, 2018. Performing TDRs were in compliance with their modified terms and there are no further commitments associated with these loans. During the three months ended March 31, 2019 and 2018 there were no TDRs that subsequently defaulted within twelve months of their modification dates. Management routinely evaluates other real estate owned (“OREO”) based upon periodic appraisals. For the three months ended March 31, 2019 and 2018 there were no additional valuation allowances recorded the current appraised value, less estimated cost to sell, was sufficient to cover the recorded OREO amount. For the three months ended March 31, 2019 and 2018 there were no new loans transferred from loans to OREO. The Company did not sell any properties held as OREO during the three months 2019 or 2018. At March 31, 2019 there were six loans secured by residential first liens totaling $ 4.4 |