Allowance for Loan Losses | Note 5 – Allowance for Loan Losses The following tables summarize the activity in the allowance for loan losses, and ending balance of loans, net of unearned fees for the periods indicated. Allowance for Loan Losses – Year Ended December 31, 2018 (in thousands) Beginning Charge-offs Recoveries Provision Ending Balance Mortgage loans on real estate: Residential 1-4 $ 2,317 $ (77 ) $ — $ 436 $ 2,676 Commercial 11,441 (15 ) 68 1,450 12,944 Total mortgage loans on real estate 13,758 (92 ) 68 1,886 15,620 Consumer: Home equity lines of credit 5,800 (277 ) 846 (327 ) 6,042 Home equity loans 1,841 (24 ) 297 (574 ) 1,540 Other 586 (783 ) 288 702 793 Total consumer loans 8,227 (1,084 ) 1,431 (199 ) 8,375 Commercial 6,512 (1,188 ) 541 225 6,090 Construction: Residential 1,184 — — 650 1,834 Commercial 642 — — 21 663 Total construction 1,826 — — 671 2,497 Total $ 30,323 $ (2,364 ) $ 2,040 $ 2,583 $ 32,582 Allowance for Loan Losses – As of December 31, 2018 (in thousands) Loans pooled Individually Loans acquired Total allowance Mortgage loans on real estate: Residential 1-4 $ 2,620 $ 56 $ — $ 2,676 Commercial 12,737 91 116 12,944 Total mortgage loans on real estate 15,357 147 116 15,620 Consumer: Home equity lines of credit 5,838 198 6 6,042 Home equity loans 1,486 54 — 1,540 Other 779 14 — 793 Total consumer loans 8,103 266 6 8,375 Commercial 4,309 1,781 — 6,090 Construction: Residential 1,834 — — 1,834 Commercial 663 — — 663 Total construction 2,497 — — 2,497 Total $ 30,266 $ 2,194 $ 122 $ 32,582 Loans, Net of Unearned fees – As of December 31, 2018 (in thousands) Loans pooled Individually Loans acquired Total loans, net Mortgage loans on real estate: Residential 1-4 $ 509,267 $ 4,321 $ 1,674 $ 515,262 Commercial 2,606,819 12,563 8,456 2,627,838 Total mortgage loans on real estate 3,116,086 16,884 10,130 3,143,100 Consumer: Home equity lines of credit 322,764 2,646 1,167 326,577 Home equity loans 33,142 3,103 439 36,684 Other 55,483 196 42 55,721 Total consumer loans 411,389 5,945 1,648 418,982 Commercial 268,885 5,218 2,445 276,548 Construction: Residential 121,296 — — 121,296 Commercial 62,088 — — 62,088 Total construction 183,384 — — 183,384 Total $ 3,979,744 $ 28,047 $ 14,223 $ 4,022,014 Allowance for Loan Losses – Year Ended December 31, 2017 (in thousands) Beginning Charge-offs Recoveries Provision Ending Balance Mortgage loans on real estate: Residential 1-4 $ 2,748 $ (60 ) $ — $ (371 ) $ 2,317 Commercial 11,517 (186 ) 397 (287 ) 11,441 Total mortgage loans on real estate 14,265 (246 ) 397 (658 ) 13,758 Consumer: Home equity lines of credit 7,044 (98 ) 698 (1,844 ) 5,800 Home equity loans 2,644 (332 ) 242 (713 ) 1,841 Other 622 (1,186 ) 375 775 586 Total consumer loans 10,310 (1,616 ) 1,315 (1,782 ) 8,227 Commercial 5,831 (1,444 ) 428 1,697 6,512 Construction: Residential 1,417 (1,104 ) — 871 1,184 Commercial 680 — 1 (39 ) 642 Total construction 2,097 (1,104 ) 1 832 1,826 Total $ 32,503 $ (4,410 ) $ 2,141 $ 89 $ 30,323 Allowance for Loan Losses – As of December 31, 2017 (in thousands) Loans Individually Loans acquired Total allowance Mortgage loans on real estate: Residential 1-4 $ 1,932 $ 230 $ 155 $ 2,317 Commercial 11,351 30 60 11,441 Total mortgage loans on real estate 13,283 260 215 13,758 Consumer: Home equity lines of credit 5,356 427 17 5,800 Home equity loans 1,734 107 — 1,841 Other 529 57 — 586 Total consumer loans 7,619 591 17 8,227 Commercial 4,624 1,848 40 6,512 Construction: Residential 1,184 — — 1,184 Commercial 642 — — 642 Total construction 1,826 — — 1,826 Total $ 27,352 $ 2,699 $ 272 $ 30,323 Loans, Net of Unearned fees – As of December 31, 2017 (in thousands) Loans pooled Individually Loans acquired Total loans, Mortgage loans on real estate: Residential 1-4 $ 378,743 $ 5,298 $ 1,385 $ 385,426 Commercial 1,892,422 13,911 8,563 1,914,896 Total mortgage loans on real estate 2,271,165 19,209 9,948 2,300,322 Consumer: Home equity lines of credit 283,502 2,688 2,498 288,688 Home equity loans 41,076 1,470 485 43,031 Other 24,853 257 45 25,155 Total consumer loans 349,431 4,415 3,028 356,874 Commercial 213,358 4,470 2,584 220,412 Construction: Residential 67,790 140 — 67,930 Commercial 69,627 — — 69,627 Total construction 137,417 140 — 137,557 Total $ 2,971,371 $ 28,234 $ 15,560 $ 3,015,165 Allowance for Loan Losses – Year Ended December 31, 2016 (in thousands) Beginning Charge-offs Recoveries Provision Ending Balance Mortgage loans on real estate: Residential 1-4 $ 2,896 $ (321 ) $ 880 $ (707 ) $ 2,748 Commercial 11,015 (827 ) 920 409 11,517 Total mortgage loans on real estate 13,911 (1,148 ) 1,800 (298 ) 14,265 Consumer: Home equity lines of credit 11,253 (585 ) 2,317 (5,941 ) 7,044 Home equity loans 3,177 (219 ) 590 (904 ) 2,644 Other 688 (823 ) 449 308 622 Total consumer loans 15,118 (1,627 ) 3,356 (6,537 ) 10,310 Commercial 5,271 (455 ) 404 611 5,831 Construction: Residential 899 — 54 464 1,417 Commercial 812 — 78 (210 ) 680 Total construction 1,711 — 132 254 2,097 Total $ 36,011 $ (3,230 ) $ 5,692 $ (5,970 ) $ 32,503 Allowance for Loan Losses – As of December 31, 2016 (in thousands) Loans Individually Loans acquired Total allowance Mortgage loans on real estate: Residential 1-4 $ 2,304 $ 258 $ 186 $ 2,748 Commercial 10,064 4 1,449 11,517 Total mortgage loans on real estate 12,368 262 1,635 14,265 Consumer: Home equity lines of credit 6,616 411 17 7,044 Home equity loans 2,365 215 64 2,644 Other 594 28 — 622 Total consumer loans 9,575 654 81 10,310 Commercial 3,765 1,130 936 5,831 Construction: Residential 1,372 — 45 1,417 Commercial 680 — — 680 Total construction 2,052 — 45 2,097 Total $ 27,760 $ 2,046 $ 2,697 $ 32,503 Loans, Net of Unearned fees – As of December 31, 2016 (in thousands) Loans pooled Individually Loans acquired Total Loans Mortgage loans on real estate: Residential 1-4 $ 362,780 $ 4,094 $ 1,469 $ 368,343 Commercial 1,657,238 15,081 12,802 1,685,121 Total mortgage loans on real estate 2,020,018 19,175 14,271 2,053,464 Consumer: Home equity lines of credit 282,159 3,196 4,360 289,715 Home equity loans 42,992 1,508 1,682 46,182 Other 30,547 154 65 30,766 Total consumer loans 355,698 4,858 6,107 366,663 Commercial 208,960 4,096 3,991 217,047 Construction: Residential 54,743 11 675 55,429 Commercial 66,990 — — 66,990 Total construction 121,733 11 675 122,419 Total $ 2,706,409 $ 28,140 $ 25,044 $ 2,759,593 As part of the on-going (iii) non-performing The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows: • Pass • Special Mention • Substandard • Doubtful • Loss The following tables present ending loan balances by loan category and risk grade for the periods indicated: Credit Quality Indicators Originated Loans – As of December 31, 2018 (in thousands) Pass Special Substandard Doubtful / Loss Total Originated Mortgage loans on real estate: Residential 1-4 $ 337,189 $ 1,724 $ 4,883 $ — $ 343,796 Commercial 1,861,627 33,483 15,871 — 1,910,981 Total mortgage loans on real estate 2,198,816 35,207 20,754 — 2,254,777 Consumer: Home equity lines of credit 279,491 2,309 2,653 — 284,453 Home equity loans 29,289 1,054 2,317 — 32,660 Other 33,606 341 73 — 34,020 Total consumer loans 342,386 3,704 5,043 — 351,133 Commercial 217,126 6,127 5,382 — 228,635 Construction: Residential 90,412 32 259 — 90,703 Commercial 55,863 345 — — 56,208 Total construction 146,275 377 259 — 146,911 Total loans $ 2,904,603 $ 45,415 $ 31,438 $ — $ 2,981,456 Credit Quality Indicators PNCI Loans – As of December 31, 2018 (in thousands) Pass Special Substandard Doubtful / Loss Total PNCI Mortgage loans on real estate: Residential 1-4 $ 167,908 $ 1,086 $ 798 $ — $ 169,792 Commercial 701,868 3,085 3,448 — 708,401 Total mortgage loans on real estate 869,776 4,171 4,246 — 878,193 Consumer: Home equity lines of credit 38,780 1,124 1,053 — 40,957 Home equity loans 3,413 74 98 — 3,585 Other 21,481 173 5 — 21,659 Total consumer loans 63,674 1,371 1,156 — 66,201 Commercial 45,027 321 120 — 45,468 Construction: Residential 30,593 — — — 30,593 Commercial 5,880 — — — 5,880 Total construction 36,473 — — — 36,473 Total loans $ 1,014,950 $ 5,863 $ 5,522 $ — $ 1,026,335 Credit Quality Indicators Originated Loans – As of December 31, 2017 (in thousands) Pass Special Substandard Doubtful / Loss Total Originated Mortgage loans on real estate: Residential 1-4 $ 315,120 $ 2,234 $ 3,168 $ — $ 320,522 Commercial 1,649,333 18,434 22,743 — 1,690,510 Total mortgage loans on real estate 1,964,453 20,668 25,911 — 2,011,032 Consumer: Home equity lines of credit 265,345 2,558 2,039 — 269,942 Home equity loans 37,428 800 1,620 — 39,848 Other 22,432 272 155 — 22,859 Total consumer loans 325,205 3,630 3,814 — 332,649 Commercial 195,208 9,492 4,737 — 209,437 Construction: Residential 67,813 — 107 — 67,920 Commercial 64,492 4,872 — — 69,364 Total construction 132,305 4,872 107 — 137,284 Total loans $ 2,617,171 $ 38,662 $ 34,569 $ — $ 2,690,402 Credit Quality Indicators PNCI Loans – As of December 31, 2017 (in thousands) Pass Special Substandard Doubtful / Loss Total PNCI Mortgage loans on real estate: Residential 1-4 $ 61,411 $ 218 $ 1,890 $ — $ 63,519 Commercial 203,751 11,513 559 — 215,823 Total mortgage loans on real estate 265,162 11,731 2,449 — 279,342 Consumer: Home equity lines of credit 14,866 450 932 — 16,248 Home equity loans 2,433 188 77 — 2,698 Other 2,207 38 6 — 2,251 Total consumer loans 19,506 676 1,015 — 21,197 Commercial 8,390 1 — — 8,391 Construction: Residential 10 — — — 10 Commercial 263 — — — 263 Total construction 273 — — — 273 Total $ 293,331 $ 12,408 $ 3,464 $ — $ 309,203 Consumer loans, whether unsecured or secured by real estate, automobiles, or other personal property, are susceptible to three primary risks; non-payment non-payment Problem consumer loans are generally identified by payment history of the borrower (delinquency). The Bank manages its consumer loan portfolios by monitoring delinquency and contacting borrowers to encourage repayment, suggest modifications if appropriate, and, when continued scheduled payments become unrealistic, initiate repossession or foreclosure through appropriate channels. Collateral values may be determined by appraisals obtained through Bank approved, licensed appraisers, qualified independent third parties, public value information (blue book values for autos), sales invoices, or other appropriate means. Appropriate valuations are obtained at initiation of the credit and periodically (every 3-12 Commercial real estate loans generally fall into two categories, owner-occupied and non-owner non-owner Construction loans, whether owner occupied or non-owner Problem C&I loans are generally identified by periodic review of financial information which may include financial statements, tax returns, rent rolls and payment history of the borrower (delinquency). Based on this information the Bank may decide to take any of several courses of action including demand for repayment, additional collateral or guarantors, and, when repayment becomes unlikely through borrower’s income and cash flow, repossession or foreclosure of the underlying collateral. Collateral values may be determined by appraisals obtained through Bank approved, licensed appraisers, qualified independent third parties, public value information (blue book values for autos), sales invoices, or other appropriate means. Appropriate valuations are obtained at initiation of the credit and periodically (every 3-12 Once a loan becomes delinquent and repayment becomes questionable, a Bank collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Bank will estimate its probable loss, using a recent valuation as appropriate to the underlying collateral less estimated costs of sale, and charge the loan down to the estimated net realizable amount. Depending on the length of time until ultimate collection, the Bank may revalue the underlying collateral and take additional charge-offs as warranted. Revaluations may occur as often as every 3-12 The following tables show the ending balance of current and past due originated and PNCI loans by loan category as of the date indicated: Analysis of Originated Past Due Loans - As of December 31, 2018 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total > 90 Days and Mortgage loans on real estate: Residential 1-4 $ 1,675 $ 132 $ 478 $ 2,285 $ 341,511 $ 343,796 $ — Commercial 431 1,200 296 1,927 1,909,054 1,910,981 — Total mortgage loans on real estate 2,106 1,332 774 4,212 2,250,565 2,254,777 — Consumer: Home equity lines of credit 908 47 609 1,564 282,889 284,453 — Home equity loans 1,043 24 214 1,281 31,379 32,660 — Other 298 17 — 315 33,705 34,020 — Total consumer loans 2,249 88 823 3,160 347,973 351,133 — Commercial 1,053 579 1,247 2,879 225,756 228,635 — Construction: Residential 209 — — 209 90,494 90,703 — Commercial — — — — 56,208 56,208 — Total construction 209 — — 209 146,702 146,911 — Total originated loans $ 5,617 $ 1,999 $ 2,844 $ 10,460 $ 2,970,996 $ 2,981,456 $ — Analysis of PNCI Past Due Loans - As of December 31, 2018 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total > 90 Days and Mortgage loans on real estate: Residential 1-4 $ 1,009 $ 133 $ 156 $ 1,298 $ 168,494 $ 169,792 $ — Commercial 1,646 1,136 1,082 3,864 704,537 708,401 Total mortgage loans on real estate 2,655 1,269 1,238 5,162 873,031 878,193 — Consumer: Home equity lines of credit 304 35 237 576 40,381 40,957 Home equity loans 74 — — 74 3,511 3,585 — Other 160 — — 160 21,499 21,659 — Total consumer loans 538 35 237 810 65,391 66,201 — Commercial 678 145 113 936 44,532 45,468 — Construction: Residential — — — — 30,593 30,593 — Commercial — — — — 5,880 5,880 — Total construction — — — — 36,473 36,473 — Total PNCI loans $ 3,871 $ 1,449 $ 1,588 $ 6,908 $ 1,019,427 $ 1,026,335 $ — Analysis of Originated Past Due Loans - As of December 31, 2017 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total > 90 Days and Mortgage loans on real estate: Residential 1-4 $ 1,740 $ 510 $ 243 $ 2,493 $ 318,029 $ 320,522 $ — Commercial 158 987 — 1,145 1,689,365 1,690,510 — Total mortgage loans on real estate 1,898 1,497 243 3,638 2,007,394 2,011,032 — Consumer: Home equity lines of credit 528 48 372 948 268,994 269,942 — Home equity loans 511 107 373 991 38,857 39,848 — Other 56 36 3 95 22,764 22,859 — Total consumer loans 1,095 191 748 2,034 330,615 332,649 — Commercial 956 738 1,527 3,221 206,216 209,437 — Construction: Residential 34 — — 34 67,886 67,920 — Commercial — — — — 69,364 69,364 — Total construction 34 — — 34 137,250 137,284 — Total loans $ 3,983 $ 2,426 $ 2,518 $ 8,927 $ 2,681,475 $ 2,690,402 $ — Analysis of PNCI Past Due Loans - As of December 31, 2017 (in thousands) 30-59 60-89 > 90 days Total Past Current Total > 90 Days and Mortgage loans on real estate: Residential 1-4 $ 1,495 $ 90 $ 109 $ 1,694 $ 61,825 $ 63,519 $ 81 Commercial 70 — — 70 215,753 215,823 — Total mortgage loans on real estate 1,565 90 109 1,764 277,578 279,342 81 Consumer: Home equity lines of credit 298 228 330 856 15,392 16,248 200 Home equity loans 30 — — 30 2,668 2,698 — Other 6 26 — 32 2,219 2,251 — Total consumer loans 334 254 330 918 20,279 21,197 200 Commercial — — — — 8,391 8,391 — Construction: Residential — — — — 10 10 — Commercial — — — — 263 263 — Total construction — — — — 273 273 — Total loans $ 1,899 $ 344 $ 439 $ 2,682 $ 306,521 $ 309,203 $ 281 The following table shows the ending balance of nonaccrual loans by loan category as of the date indicated: Non Accrual Loans As of December 31, 2018 As of December 31, 2017 (in thousands) Originated PNCI Total Originated PNCI Total Mortgage loans on real estate: Residential 1-4 $ 3,244 $ 334 $ 3,578 $ 1,725 $ 1,012 $ 2,737 Commercial 9,263 1,468 10,731 8,144 — 8,144 Total mortgage loans on real estate 12,507 1,802 14,309 9,869 1,012 10,881 Consumer: Home equity lines of credit 1,429 885 2,314 811 402 1,213 Home equity loans 1,722 47 1,769 1,106 44 1,150 Other 3 4 7 7 5 12 Total consumer loans 3,154 936 4,090 1,924 451 2,375 Commercial 3,755 120 3,875 3,669 — 3,669 Construction: Residential — — — — — — Commercial — — — — — — Total construction — — — — — — Total non accrual loans $ 19,416 $ 2,858 $ 22,274 $ 15,462 $ 1,463 $ 16,925 Interest income on originated nonaccrual loans that would have been recognized during the years ended December 31, 2018, 2017, and 2016, if all such loans had been current in accordance with their original terms, totaled $1,584,000, $1,067,000, and $783,000, respectively. Interest income actually recognized on these originated loans during the years ended December 31, 2018, 2017, and 2016 was $486,000, $530,000, and $377,000, respectively. Interest income on PNCI nonaccrual loans that would have been recognized during the years ended December 31, 2018, 2017, and 2016, if all such loans had been current in accordance with their original terms, totaled $1,122,000, $73,000, and $178,000, respectively. Interest income actually recognized on these PNCI loans during the years ended December 31, 2018, 2017, and 2016 was $989,000, $18,000, and $11,000, respectively. Impaired originated loans are those where management has concluded that it is probable that the borrower will be unable to pay all amounts due under the contractual terms. The following tables show the recorded investment (financial statement balance), unpaid principal balance, average recorded investment, and interest income recognized for impaired Originated and PNCI loans, segregated by those with no related allowance recorded and those with an allowance recorded for the periods indicated. Impaired Originated Loans - As of, or for the Twelve Months Ended, December 31, 2018 (in thousands) Unpaid Recorded Recorded Total recorded Related Average Interest income Mortgage loans on real estate: Residential 1-4 $ 4,594 $ 3,663 $ 308 $ 3,971 $ 56 $ 3,517 $ 90 Commercial 13,081 10,676 1,765 12,441 42 13,115 137 Total mortgage loans on real estate 17,675 14,339 2,073 16,412 98 16,632 227 Consumer: Home equity lines of credit 1,900 1,749 111 1,860 71 1,885 43 Home equity loans 2,374 1,892 65 1,957 2 1,520 23 Other 3 — 3 3 3 17 2 Total consumer loans 4,277 3,641 179 3,820 76 3,422 68 Commercial 5,433 2,924 2,287 5,211 1,774 4,654 91 Construction: Residential — — — — — 5 — Commercial — — — — — — — Total construction — — — — — 5 — Total $ 27,385 $ 20,904 $ 4,539 $ 25,443 $ 1,948 $ 24,713 $ 386 Impaired PNCI Loans - As of, or for the Twelve Months Ended, December 31, 2018 (in thousands) Unpaid Recorded Recorded Total recorded Related Average Interest income Mortgage loans on real estate: Residential 1-4 $ 375 $ 334 $ — $ 334 $ — $ 529 $ 5 Commercial 3,110 1,468 — 1,468 — 1,713 183 Total mortgage loans on real estate 3,485 1,802 — 1,802 — 2,242 188 Consumer: Home equity lines of credit 1,027 587 367 954 127 1,120 18 Home equity loans 252 47 197 244 101 155 — Other 106 21 85 106 11 114 — Total consumer loans 1,385 655 649 1,304 239 1,389 18 Commercial 120 113 7 120 7 60 1 Construction: Residential — — — — — — — Commercial — — — — — — — Total construction — — — — — — — Total $ 4,990 $ 2,570 $ 656 $ 3,226 $ 246 $ 3,691 $ 207 Impaired Originated Loans - As of, or for the Twelve Months Ended, December 31, 2017 (in thousands) Unpaid Recorded Recorded Total recorded Related Average Interest income Mortgage loans on real estate: Residential 1-4 $ 4,023 $ 2,058 $ 1,881 $ 3,939 $ 230 $ 3,501 $ 143 Commercial 14,186 13,101 810 13,911 30 13,851 645 Total mortgage loans on real estate 18,209 15,159 2,691 17,850 260 17,352 788 Consumer: Home equity lines of credit 1,581 1,093 401 1,494 111 1,702 47 Home equity loans 1,627 1,107 198 1,305 10 1,193 24 Other 55 4 3 7 3 20 — Total consumer loans 3,263 2,204 602 2,806 124 2,915 71 Commercial 4,566 575 3,895 4,470 1,848 4,283 184 Construction: Residential 140 140 — 140 — 76 9 Commercial — — — — — — — Total construction 140 140 — 140 — 76 9 Total $ 26,178 $ 18,078 $ 7,188 $ 25,266 $ 2,232 $ 24,626 $ 1,052 Impaired PNCI Loans - As of, or for the Twelve Months Ended, December 31, 2017 (in thousands) Unpaid Recorded Recorded Total recorded Related Average Interest income Mortgage loans on real estate: Residential 1-4 $ 1,404 $ 1,359 $ — $ 1,359 $ — $ 1,041 $ 24 Commercial — — — — — 979 — Total mortgage loans on real estate 1,404 1,359 — 1,359 — 2,020 24 Consumer: Home equity lines of credit 1,216 591 603 1,194 316 1,240 48 Home equity loans 178 44 121 165 97 117 6 Other 250 — 250 250 54 186 11 Total consumer loans 1,644 635 974 1,609 467 1,543 65 Commercial — — — — — — — Construction: Residential — — — — — — — Commercial — — — — — — — Total construction — — — — — — — Total $ 3,048 $ 1,994 $ 974 $ 2,968 $ 467 $ 3,563 $ 89 Impaired Originated Loans - As of, or for the Twelve Months Ended, December 31, 2016 (in thousands) Unpaid Recorded Recorded Total recorded Related Average Interest income Mortgage loans on real estate: Residential 1-4 $ 3,381 $ 1,820 $ 1,551 $ 3,371 $ 180 $ 4,632 $ 157 Commercial 13,503 12,898 357 13,255 4 20,891 592 Total mortgage loans on real estate 16,884 14,718 1,908 16,626 184 25,523 749 Consumer: Home equity lines of credit 2,001 1,480 430 1,910 110 3,297 49 Home equity loans 1,730 715 594 1,309 107 1,465 37 Other 48 15 19 34 13 26 3 Total consumer loans 3,779 2,210 1,043 3,253 230 4,788 89 Commercial 4,311 762 3,334 4,096 1,130 3,383 125 Construction: Residential 16 11 — 11 — 7 — Commercial — — — — — — — Total construction 16 11 — 11 — 7 — Total $ 24,990 $ 17,701 $ 6,285 $ 23,986 $ 1,544 $ 33,701 $ 963 Impaired PNCI Loans - As of, or for the Twelve Months Ended, December 31, 2016 (in thousands) Unpaid Recorded Recorded Total recorded Related Average Interest income Mortgage loans on real estate: Residential 1-4 $ 745 $ 463 $ 259 $ 722 $ 79 $ 799 $ 17 Commercial 2,031 1,826 — 1,826 — 2,853 — Total mortgage loans on real estate 2,776 2,289 259 2,548 79 3,652 17 Consumer: Home equity lines of credit 1,297 735 551 1,286 300 1,173 36 Home equity loans 206 67 132 199 108 154 8 Other 122 3 118 121 15 194 5 Total consumer loans 1,625 805 801 1,606 423 1,521 49 Commercial — — — — — 1 — Construction: Residential — — — — — — — Commercial — — — — — 245 — Total construction — — — — — 245 — Total $ 4,401 $ 3,094 $ 1,060 $ 4,154 $ 502 $ 5,419 $ 66 Originated loans classified as TDRs and impaired were $10,253,000, $12,517,000 and $12,371,000 at December 31, 2018, 2017 and 2016, respectively. PNCI loans classified as TDRs and impaired were $615,000, $1,352,000 and $1,324,000 at December 31, 2018, 2017 and 2016, respectively. The Company had no significant obligations to lend additional funds on Originated or PNCI TDRs as of December 31, 2018, 2017, or 2016. The following tables show certain information regarding Troubled Debt Restructurings that occurred during the periods indicated: TDR Information for the Year Ended December 31, 2018 (dollars in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Mortgage loans on real estate: Residential 1-4 1 $ 156 $ 156 $ — — $ — $ — Commercial 7 1,782 1,779 491 1 169 — Total mortgage loans on real estate 8 1,938 1,935 491 1 169 — Consumer: Home equity lines of credit 1 133 138 — 2 248 — Home equity loans 2 599 599 (35 ) — — — Other — — — — — — — Total consumer loans 3 732 737 (35 ) 2 248 — Commercial 6 1,098 1,083 325 3 148 — Construction: Residential — — — — — — — Commercial — — — — — — — Total construction — — — — — — — Total 17 $ 3,768 $ 3,755 $ 781 6 $ 565 $ — TDR Information for the Year Ended December 31, 2017 (dollars in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Mortgage loans on real estate: Residential 1-4 1 $ 939 $ 939 $ 169 2 $ 223 $ — Commercial 8 3,721 3,695 (111 ) 1 219 — Total mortgage loans on real estate 9 4,660 4,634 58 3 442 — Consumer: Home equity lines of credit 3 187 187 27 1 127 (5 ) Home equity loans 1 252 252 — 1 55 — Other 1 14 14 11 — — — Total consumer loans 5 453 453 38 2 182 (5 ) Commercial 11 1,854 1,747 37 — — — Construction: Residential 1 144 144 — — — — Commercial — — — — — — — Total construction 1 144 144 — — — — Total 26 $ 7,111 $ 6,978 $ 133 5 $ 624 $ (5 ) TDR Information for the Year Ended December 31, 2016 (dollars in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Mortgage loans on real estate: Residential 1-4 3 $ 650 $ 656 $ 50 2 $ 101 $ — Commercial 5 423 461 46 — — — Total mortgage loans on real estate 8 1,073 1,117 96 2 101 — Consumer: Home equity lines of credit 9 707 709 205 1 229 — Home equity loans 1 105 105 — — — — Other 2 27 27 2 — — — Total consumer loans 12 839 841 207 1 229 — Commercial 4 77 77 23 — Construction: Residential — — — — — — — Commercial — — — — — — — Total construction — — — — — — — Total 24 $ 1,989 $ 2,035 $ 326 3 $ 330 $ — Modifications classified as TDRs can include one or a combination of the following: rate modifications, term extensions, interest only modifications, either temporary or long-term, payment modifications, and collateral substitutions/additions. For all new TDRs, an impairment analysis is conducted. If the loan is determined to be collateral dependent, any additional amount of impairment will be calculated based on the difference between estimated collectible value and the current carrying balance of the loan. This difference could result in an increased provision and is typically charged off. If the asset is determined not to be collateral dependent, the impairment is measured on the net present value difference between the expected cash flows of the restructured loan and the cash flows which would have been received under the original terms. The effect of this could result in a requirement for additional provision to the reserve. The effect of these required provisions for the period are indicated above. Typically if a TDR defaults during the period, the loan is then considered collateral dependent and, if it was not already considered collateral dependent, an appropriate provision will be reserved or charge will be taken. The additional provisions required resulting from default of previously modified TDR’s are noted above. |