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 shown : 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 June 30, 2018 $ 1,022 $ 318 $ 282 $ 7,028 $ 2,233 $ 107 $ 1,492 $ 12,482 Charge-offs — — — — (208) (23) — (231) Recoveries — — — 1 19 5 — 25 Provision (16) (4) (4) 242 122 12 (102) 250 ALL at September 30, 2018 $ 1,006 $ 314 $ 278 $ 7,271 $ 2,166 $ 101 $ 1,390 $ 12,526 ALL at December 31, 2017 $ 1,060 $ 330 $ 224 $ 6,526 $ 2,110 $ 105 $ 1,437 $ 11,792 Charge-offs — — — — (8,944) (78) — (9,022) Recoveries 1 — — 17 135 24 — 177 Provision (55) (16) 54 728 8,865 50 (47) 9,579 ALL at September 30, 2018 $ 1,006 $ 314 $ 278 $ 7,271 $ 2,166 $ 101 $ 1,390 $ 12,526 ALL at June 30, 2017 $ 1,075 $ 322 $ 281 $ 6,052 $ 2,023 $ 100 $ 1,454 $ 11,307 Charge-offs — — — (9) (6) (31) — (46) Recoveries 1 5 — 17 5 4 — 32 Provision (15) (3) (42) 198 (19) 19 112 250 ALL at September 30, 2017 $ 1,061 $ 324 $ 239 $ 6,258 $ 2,003 $ 92 $ 1,566 $ 11,543 ALL at December 31, 2016 $ 1,105 $ 323 $ 224 $ 6,109 $ 1,893 $ 100 $ 1,321 $ 11,075 Charge-offs (13) — — (14) (8) (83) — (118) Recoveries 2 6 — 17 111 30 — 166 Provision (33) (5) 15 146 7 45 245 420 ALL at September 30, 2017 $ 1,061 $ 324 $ 239 $ 6,258 $ 2,003 $ 92 $ 1,566 $ 11,543 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 September 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 September 30, 2018 Loans evaluated for ALL: Individually $ 408 $ — $ 460 $ 10,574 $ 3,106 $ — $ — $ 14,548 Collectively 149,763 48,084 11,829 465,264 276,729 4,766 — 956,435 Total $ 150,171 $ 48,084 $ 12,289 $ 475,838 $ 279,835 $ 4,766 $ — $ 970,983 ALL established for loans evaluated: Individually $ — $ — $ — $ — $ 181 $ — $ — $ 181 Collectively 1,006 314 278 7,271 1,985 101 1,390 12,345 ALL at September 30, 2018 $ 1,006 $ 314 $ 278 $ 7,271 $ 2,166 $ 101 $ 1,390 $ 12,526 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 September 30, 2018 and December 31, 2017 : Impaired Loans With No Allowance With Allowance (Dollars in thousands) Unpaid Unpaid Recorded Principal Recorded Principal Related September 30, 2018 Investment Balance Investment Balance Allowance Residential Real Estate 1-4 Family First liens $ 754 $ 870 $ — $ — $ — Junior liens and lines of credit 66 66 — — — Total 820 936 — — — Residential real estate - construction 460 531 — — — Commercial real estate 10,715 11,248 — — — Commercial 3,082 10,653 181 181 181 Total $ 15,077 $ 23,368 $ 181 $ 181 $ 181 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 nine months ended September 30, 2018 and 2017 : Three Months Ended Nine Months Ended September 30, 2018 September 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 $ 1,091 $ 10 $ 899 $ 31 Junior liens and lines of credit 268 2 750 2 Total 1,359 12 1,649 33 Residential real estate - construction 461 — 463 — Commercial real estate 10,789 107 10,314 316 Commercial 3,465 — 5,284 — Total $ 16,074 $ 119 $ 17,710 $ 349 Three Months Ended Nine Months Ended September 30, 2017 September 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 $ 1,157 $ 10 $ 1,152 $ 32 Junior liens and lines of credit 54 — 85 — Total 1,211 10 1,237 32 Residential real estate - construction 471 — 475 — Commercial real estate 11,218 109 12,216 328 Commercial 292 — 263 — Total $ 13,192 $ 119 $ 14,191 $ 360 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 September 30, 2018 Residential Real Estate 1-4 Family First liens $ 149,366 $ 503 $ 231 $ — $ 734 $ 71 $ 150,171 Junior liens and lines of credit 47,907 40 71 43 154 23 48,084 Total 197,273 543 302 43 888 94 198,255 Residential real estate - construction 11,359 70 400 — 470 460 12,289 Commercial real estate 468,202 2,224 3,606 — 5,830 1,806 475,838 Commercial 276,180 328 64 — 392 3,263 279,835 Consumer 4,726 39 1 — 40 — 4,766 Total $ 957,740 $ 3,204 $ 4,373 $ 43 $ 7,620 $ 5,623 $ 970,983 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 September 30, 2018 Residential Real Estate 1-4 Family First liens $ 149,741 $ — $ 430 $ — $ 150,171 Junior liens and lines of credit 48,018 — 66 — 48,084 Total 197,759 — 496 — 198,255 Residential real estate - construction 11,556 — 733 — 12,289 Commercial real estate 466,800 665 8,373 — 475,838 Commercial 275,249 — 4,586 — 279,835 Consumer 4,766 — — — 4,766 Total $ 956,130 $ 665 $ 14,188 $ — $ 970,983 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 September 30, 2018 Residential real estate - construction 1 $ 460 $ — $ 460 — $ — Residential real estate 4 683 683 — — — Commercial real estate 11 10,574 8,909 1,665 — — Total 16 $ 11,717 $ 9,592 $ 2,125 — $ — 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 . |