Loan Quality and Allowance for Loan Losses | Note 6 . Loan Quality and Allowance for Loan Losses The following table presents, by c l ass , the activity in the Allowance for Loan Losses (ALL) for the periods ended: Residential Real Estate 1-4 Family First Junior Liens & Commercial (Dollars in thousands) Liens Lines of Credit Construction Real Estate Commercial Consumer Unallocated Total ALL at March 31, 2018 $ 1,043 $ 320 $ 260 $ 6,698 $ 2,073 $ 104 $ 1,491 $ 11,989 Charge-offs — — — — (8,736) (29) — (8,765) Recoveries — — — 16 108 5 — 129 Provision (21) (2) 22 314 8,788 27 1 9,129 ALL at June 30, 2018 $ 1,022 $ 318 $ 282 $ 7,028 $ 2,233 $ 107 $ 1,492 $ 12,482 ALL at December 31, 2017 $ 1,060 $ 330 $ 224 $ 6,526 $ 2,110 $ 105 $ 1,437 $ 11,792 Charge-offs — — — — (8,736) (55) — (8,791) Recoveries 1 — — 16 116 19 — 152 Provision (39) (12) 58 486 8,743 38 55 9,329 ALL at June 30, 2018 $ 1,022 $ 318 $ 282 $ 7,028 $ 2,233 $ 107 $ 1,492 $ 12,482 ALL at March 31, 2017 $ 1,100 $ 321 $ 274 $ 6,126 $ 1,984 $ 99 $ 1,374 $ 11,278 Charge-offs (5) — — (5) (2) (24) — (36) Recoveries — 1 — — 4 10 — 15 Provision (20) — 7 (69) 37 15 80 50 ALL at June 30, 2017 $ 1,075 $ 322 $ 281 $ 6,052 $ 2,023 $ 100 $ 1,454 $ 11,307 ALL at December 31, 2016 $ 1,105 $ 323 $ 224 $ 6,109 $ 1,893 $ 100 $ 1,321 $ 11,075 Charge-offs (13) — — (5) (2) (52) — (72) Recoveries 1 1 — — 106 26 — 134 Provision (18) (2) 57 (52) 26 26 133 170 ALL at June 30, 2017 $ 1,075 $ 322 $ 281 $ 6,052 $ 2,023 $ 100 $ 1,454 $ 11,307 T he following table presents, by c la ss , loans that were evaluated for the ALL under the specific reserve (individually) and those that were evaluated under the general reserve (collectively) and the amount of the ALL established in each class as of June 30, 2018 and December 31, 2017 : Residential Real Estate 1-4 Family First Junior Liens & Commercial (Dollars in thousands) Liens Lines of Credit Construction Real Estate Commercial Consumer Unallocated Total June 30, 2018 Loans evaluated for ALL: Individually $ 450 $ — $ 462 $ 10,754 $ 3,133 $ — $ — $ 14,799 Collectively 151,896 48,529 12,015 454,146 280,927 4,984 — 952,497 Total $ 152,346 $ 48,529 $ 12,477 $ 464,900 $ 284,060 $ 4,984 $ — $ 967,296 ALL established for loans evaluated: Individually $ — $ — $ — $ — $ 225 $ — $ — $ 225 Collectively 1,022 318 282 7,028 2,008 107 1,492 12,257 ALL at June 30, 2018 $ 1,022 $ 318 $ 282 $ 7,028 $ 2,233 $ 107 $ 1,492 $ 12,482 December 31, 2017 Loans evaluated for ALL: Individually $ 459 $ — $ 466 $ 10,981 $ — $ — $ — $ 11,906 Collectively 157,975 50,371 9,435 417,447 291,519 5,047 — 931,794 Total $ 158,434 $ 50,371 $ 9,901 $ 428,428 $ 291,519 $ 5,047 $ — $ 943,700 ALL established for loans evaluated: Individually $ — $ — $ — $ — $ — $ — $ — $ — Collectively 1,060 330 224 6,526 2,110 105 1,437 11,792 ALL at December 31, 2017 $ 1,060 $ 330 $ 224 $ 6,526 $ 2,110 $ 105 $ 1,437 $ 11,792 The following table shows additional information about those loans considered to be impaired at June 30, 2018 and December 31, 2017 : Impaired Loans With No Allowance With Allowance (Dollars in thousands) Unpaid Unpaid Recorded Principal Recorded Principal Related June 30, 2018 Investment Balance Investment Balance Allowance Residential Real Estate 1-4 Family First liens $ 828 $ 907 $ — $ — $ — Junior liens and lines of credit 23 23 — — — Total 851 930 — — — Residential real estate - construction 462 531 — — — Commercial real estate 10,904 11,416 — — — Commercial 2,406 9,843 825 825 225 Total $ 14,623 $ 22,720 $ 825 $ 825 $ 225 December 31, 2017 Residential Real Estate 1-4 Family First liens $ 869 $ 950 $ — $ — $ — Junior liens and lines of credit — — — — — Total 869 950 — — — Residential real estate - construction 466 531 — — — Commercial real estate 11,061 11,541 — — — Commercial 187 201 — — — Total $ 12,583 $ 13,223 $ — $ — $ — The following table shows the average of impaired loans and related interest income for the three and six months ended June 30, 2018 and 2017 : Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Average Interest Average Interest (Dollars in thousands) Recorded Income Recorded Income Investment Recognized Investment Recognized Residential Real Estate 1-4 Family First liens $ 831 $ 11 $ 818 $ 22 Junior liens and lines of credit 1,045 4 995 10 Total 1,876 15 1,813 32 Residential real estate - construction 463 — 465 — Commercial real estate 10,008 100 10,072 199 Commercial 11,835 — 5,927 — Total $ 24,182 $ 115 $ 18,277 $ 231 Three Months Ended Six Months Ended June 30, 2017 June 30, 2017 Average Interest Average Interest (Dollars in thousands) Recorded Income Recorded Income Investment Recognized Investment Recognized Residential Real Estate 1-4 Family First liens $ 1,168 $ 10 $ 1,039 $ 20 Junior liens and lines of credit 115 — 100 — Total 1,283 10 1,139 20 Residential real estate - construction 476 — 478 — Commercial real estate 12,043 102 12,104 218 Commercial 122 — 73 — Total $ 13,924 $ 112 $ 13,794 $ 238 The following table presents the aging of payments of the loan portfolio : (Dollars in thousands) Loans Past Due and Still Accruing Total Current 30-59 Days 60-89 Days 90 Days+ Total Non-Accrual Loans June 30, 2018 Residential Real Estate 1-4 Family First liens $ 151,803 $ 264 $ 141 $ 31 $ 436 $ 107 $ 152,346 Junior liens and lines of credit 48,351 148 7 23 178 — 48,529 Total 200,154 412 148 54 614 107 200,875 Residential real estate - construction 11,173 842 — — 842 462 12,477 Commercial real estate 460,742 2,264 — — 2,264 1,894 464,900 Commercial 280,600 79 150 — 229 3,231 284,060 Consumer 4,915 62 2 5 69 — 4,984 Total $ 957,584 $ 3,659 $ 300 $ 59 $ 4,018 $ 5,694 $ 967,296 December 31, 2017 Residential Real Estate 1-4 Family First liens $ 157,247 $ 485 $ 534 $ — $ 1,019 $ 168 $ 158,434 Junior liens and lines of credit 50,202 139 30 — 169 — 50,371 Total 207,449 624 564 — 1,188 168 208,805 Residential real estate - construction 9,435 — — — — 466 9,901 Commercial real estate 425,806 421 347 — 768 1,854 428,428 Commercial 291,221 111 — — 111 187 291,519 Consumer 5,017 23 7 — 30 — 5,047 Total $ 938,928 $ 1,179 $ 918 $ — $ 2,097 $ 2,675 $ 943,700 The following table reports the internal credit rating for the loan portfolio. Consumer purpose loans are assigned a rating of either pass or substandard based on the performance status of the loans. Substandard consumer loans are comprised of loans 90 days or more past due and still accruing , and nonaccrual loans. Commercial purpose loans may be assigned any rating in accordance with the Bank’s internal risk rating system. Pass Special Mention Substandard Doubtful (Dollars in thousands) (1-5) (6) (7) (8) Total June 30, 2018 Residential Real Estate 1-4 Family First liens $ 151,677 $ — $ 669 $ — $ 152,346 Junior liens and lines of credit 48,506 — 23 — 48,529 Total 200,183 — 692 — 200,875 Residential real estate - construction 11,742 — 735 — 12,477 Commercial real estate 454,286 2,104 8,510 — 464,900 Commercial 280,059 — 4,001 — 284,060 Consumer 4,979 — 5 — 4,984 Total $ 951,249 $ 2,104 $ 13,943 $ — $ 967,296 December 31, 2017 Residential Real Estate 1-4 Family First liens $ 157,395 $ — $ 1,039 $ — $ 158,434 Junior liens and lines of credit 50,371 — — — 50,371 Total 207,766 — 1,039 — 208,805 Residential real estate - construction 8,893 — 1,008 — 9,901 Commercial real estate 419,277 680 8,471 — 428,428 Commercial 289,916 — 1,603 — 291,519 Consumer 5,047 — — — 5,047 Total $ 930,899 $ 680 $ 12,121 $ — $ 943,700 The following table presents information on the Bank’s Troubled Debt Restructuring (TDR) loans: Troubled Debt Restructurings Within the Last 12 Months That Have Defaulted (Dollars in thousands) Troubled Debt Restructurings On Modified Terms Number of Recorded Number of Recorded Contracts Investment Performing* Nonperforming* Contracts Investment June 30, 2018 Residential real estate - construction 1 $ 462 $ — $ 462 — $ — Residential real estate 5 726 690 36 — — Commercial real estate 11 10,754 9,010 1,744 — — Total 17 $ 11,942 $ 9,700 $ 2,242 — $ — December 31, 2017 Residential real estate - construction 1 $ 466 $ 466 $ — — $ — Residential real estate 5 737 701 36 — — Commercial real estate 11 10,983 10,388 595 — — Total 17 $ 12,186 $ 11,555 $ 631 — $ — * The performing status is determined by the loan’s compliance with the modified terms . There were no new TDR loans during 201 8 and 2017 . |