Loans | Loans The following table shows the composition of the Company's loan portfolio as of March 31, 2019 and 2018 and at December 31, 2018 : March 31, 2019 December 31, 2018 March 31, 2018 Commercial Real estate $ 357,760,000 28.3 % $ 353,243,000 28.5 % $ 339,306,000 28.6 % Construction 34,231,000 2.7 % 27,304,000 2.2 % 43,813,000 3.7 % Other 205,462,000 16.2 % 196,391,000 15.9 % 177,783,000 15.0 % Municipal 54,246,000 4.3 % 51,128,000 4.1 % 35,463,000 3.0 % Residential Term 474,241,000 37.5 % 469,145,000 37.9 % 439,984,000 37.0 % Construction 18,450,000 1.5 % 17,743,000 1.4 % 15,847,000 1.3 % Home equity line of credit 95,692,000 7.6 % 98,469,000 8.0 % 110,298,000 9.3 % Consumer 24,557,000 1.9 % 24,860,000 2.0 % 25,508,000 2.1 % Total $ 1,264,639,000 100.0 % $ 1,238,283,000 100.0 % $ 1,188,002,000 100.0 % Loan balances include net deferred loan costs of $6,878,000 as of March 31, 2019 , $6,615,000 as of December 31, 2018 , and $5,990,000 as of March 31, 2018 . Pursuant to collateral agreements, qualifying first mortgage loans and commercial real estate loans, which totaled $321,290,000 at March 31, 2019 , were used to collateralize borrowings from the FHLB. This compares to qualifying first mortgages loans which totaled $290,138,000 at December 31, 2018 , and $237,239,000 at March 31, 2018 . In addition, commercial, construction and home equity loans totaling $251,591,000 at March 31, 2019 , $237,152,000 at December 31, 2018 , and $255,020,000 at March 31, 2018 , were used to collateralize a standby line of credit at the Federal Reserve Bank of Boston that is currently unused. For all loan classes, loans over 30 days past due are considered delinquent. Information on the past-due status of loans by class of financing receivable as of March 31, 2019 , is presented in the following table: 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due All Past Due Current Total 90+ Days & Accruing Commercial Real estate $ 282,000 $ 825,000 $ 621,000 $ 1,728,000 $ 356,032,000 $ 357,760,000 $ — Construction 47,000 — 286,000 333,000 33,898,000 34,231,000 — Other 664,000 63,000 303,000 1,030,000 204,432,000 205,462,000 — Municipal — — — — 54,246,000 54,246,000 — Residential Term 2,659,000 1,153,000 1,434,000 5,246,000 468,995,000 474,241,000 — Construction — — — — 18,450,000 18,450,000 — Home equity line of credit 1,985,000 11,000 369,000 2,365,000 93,327,000 95,692,000 — Consumer 411,000 163,000 4,000 578,000 23,979,000 24,557,000 4,000 Total $ 6,048,000 $ 2,215,000 $ 3,017,000 $ 11,280,000 $ 1,253,359,000 $ 1,264,639,000 $ 4,000 Information on the past-due status of loans by class of financing receivable as of December 31, 2018 , is presented in the following table: 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due All Past Due Current Total 90+ Days & Accruing Commercial Real estate $ 1,274,000 $ — $ 777,000 $ 2,051,000 $ 351,192,000 $ 353,243,000 $ — Construction — 10,000 — 10,000 27,294,000 27,304,000 — Other 455,000 5,000 120,000 580,000 195,811,000 196,391,000 — Municipal — — — — 51,128,000 51,128,000 — Residential Term 1,097,000 3,518,000 2,023,000 6,638,000 462,507,000 469,145,000 339,000 Construction 76,000 — — 76,000 17,667,000 17,743,000 — Home equity line of credit 2,819,000 419,000 493,000 3,731,000 94,738,000 98,469,000 — Consumer 237,000 25,000 27,000 289,000 24,571,000 24,860,000 12,000 Total $ 5,958,000 $ 3,977,000 $ 3,440,000 $ 13,375,000 $ 1,224,908,000 $ 1,238,283,000 $ 351,000 Information on the past-due status of loans by class of financing receivable as of March 31, 2018 , is presented in the following table: 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due All Past Due Current Total 90+ Days & Accruing Commercial Real estate $ 963,000 $ 17,000 $ 202,000 $ 1,182,000 $ 338,124,000 $ 339,306,000 $ — Construction 347,000 — — 347,000 43,466,000 43,813,000 — Other 6,887,000 52,000 294,000 7,233,000 170,550,000 177,783,000 — Municipal — — — — 35,463,000 35,463,000 — Residential Term 3,175,000 345,000 1,880,000 5,400,000 434,584,000 439,984,000 — Construction — — — — 15,847,000 15,847,000 — Home equity line of credit 449,000 438,000 664,000 1,551,000 108,747,000 110,298,000 126,000 Consumer 119,000 8,000 27,000 154,000 25,354,000 25,508,000 11,000 Total $ 11,940,000 $ 860,000 $ 3,067,000 $ 15,867,000 $ 1,172,135,000 $ 1,188,002,000 $ 137,000 For all classes, loans are placed on non-accrual status when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when principal and interest is 90 days or more past due unless the loan is both well secured and in the process of collection (in which case the loan may continue to accrue interest in spite of its past due status). A loan is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially responsible party. A loan is "in the process of collection" if collection of the loan is proceeding in due course either (1) through legal action, including judgment enforcement procedures, or, (2) in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in its restoration to a current status in the near future. Cash payments received on non-accrual loans, which are included in impaired loans, are applied to reduce the loan's principal balance until the remaining principal balance is deemed collectible, after which interest is recognized when collected. As a general rule, a loan may be restored to accrual status when payments are current for a substantial period of time, generally six months, and repayment of the remaining contractual amounts is expected, or when it otherwise becomes well secured and in the process of collection. Information on nonaccrual loans as of March 31, 2019 and 2018 and at December 31, 2018 is presented in the following table: March 31, 2019 December 31, 2018 March 31, 2018 Commercial Real estate $ 1,468,000 $ 1,226,000 $ 1,021,000 Construction 286,000 — — Other 7,067,000 8,664,000 8,895,000 Municipal — — — Residential Term 4,211,000 4,062,000 3,654,000 Construction — — — Home equity line of credit 702,000 760,000 697,000 Consumer 2,000 15,000 16,000 Total $ 13,736,000 $ 14,727,000 $ 14,283,000 Impaired loans include troubled debt restructured ("TDR") and loans placed on non-accrual. These loans are measured at the present value of expected future cash flows discounted at the loan's effective interest rate or at the fair value of the collateral if the loan is collateral dependent. If the measure of an impaired loan is lower than the recorded investment in the loan and estimated selling costs, a specific reserve is established for the difference, or, in certain situations, if the measure of an impaired loan is lower than the recorded investment in the loan and estimated selling costs, the difference is written off. A breakdown of impaired loans by class of financing receivable as of and for the period ended March 31, 2019 is presented in the following table: For the three months ended March 31, 2019 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Recognized Interest Income With No Related Allowance Commercial Real estate $ 8,391,000 $ 8,779,000 $ — $ 8,741,000 $ 90,000 Construction 1,007,000 1,007,000 — 817,000 12,000 Other 709,000 734,000 — 1,207,000 6,000 Municipal — — — — — Residential Term 8,926,000 10,345,000 — 9,007,000 68,000 Construction — — — — — Home equity line of credit 1,009,000 1,071,000 — 976,000 5,000 Consumer — — — — — $ 20,042,000 $ 21,936,000 $ — $ 20,748,000 $ 181,000 With an Allowance Recorded Commercial Real estate $ 1,566,000 $ 1,583,000 $ 233,000 $ 1,215,000 $ 26,000 Construction — — — — — Other 6,944,000 7,315,000 1,485,000 7,511,000 — Municipal — — — — — Residential Term 1,993,000 2,131,000 348,000 1,845,000 17,000 Construction — — — — — Home equity line of credit 21,000 25,000 7,000 29,000 — Consumer 2,000 2,000 2,000 1,000 — $ 10,526,000 $ 11,056,000 $ 2,075,000 $ 10,601,000 $ 43,000 Total Commercial Real estate $ 9,957,000 $ 10,362,000 $ 233,000 $ 9,956,000 $ 116,000 Construction 1,007,000 1,007,000 — 817,000 12,000 Other 7,653,000 8,049,000 1,485,000 8,718,000 6,000 Municipal — — — — — Residential Term 10,919,000 12,476,000 348,000 10,852,000 85,000 Construction — — — — — Home equity line of credit 1,030,000 1,096,000 7,000 1,005,000 5,000 Consumer 2,000 2,000 2,000 1,000 — $ 30,568,000 $ 32,992,000 $ 2,075,000 $ 31,349,000 $ 224,000 Substantially all interest income recognized on impaired loans for all classes of financing receivables was recognized on a cash basis as received. A breakdown of impaired loans by class of financing receivable as of and for the year ended December 31, 2018 is presented in the following table: Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Recognized Interest Income With No Related Allowance Commercial Real estate $ 8,718,000 $ 9,161,000 $ — $ 5,536,000 $ 380,000 Construction 721,000 721,000 — 762,000 43,000 Other 1,468,000 1,555,000 — 2,037,000 32,000 Municipal — — — — — Residential Term 9,136,000 10,317,000 — 9,427,000 289,000 Construction — — — — — Home equity line of credit 972,000 1,035,000 — 1,001,000 20,000 Consumer 15,000 42,000 — 13,000 — $ 21,030,000 $ 22,831,000 $ — $ 18,776,000 $ 764,000 With an Allowance Recorded Commercial Real estate $ 1,042,000 $ 1,059,000 $ 260,000 $ 3,477,000 $ 42,000 Construction — — — — — Other 7,791,000 8,216,000 1,696,000 7,471,000 5,000 Municipal — — — — — Residential Term 1,768,000 1,998,000 335,000 1,982,000 53,000 Construction — — — — — Home equity line of credit 120,000 124,000 17,000 99,000 — Consumer — — — — — $ 10,721,000 $ 11,397,000 $ 2,308,000 $ 13,029,000 $ 100,000 Total Commercial Real estate $ 9,760,000 $ 10,220,000 $ 260,000 $ 9,013,000 $ 422,000 Construction 721,000 721,000 — 762,000 43,000 Other 9,259,000 9,771,000 1,696,000 9,508,000 37,000 Municipal — — — — — Residential Term 10,904,000 12,315,000 335,000 11,409,000 342,000 Construction — — — — — Home equity line of credit 1,092,000 1,159,000 17,000 1,100,000 20,000 Consumer 15,000 42,000 — 13,000 — $ 31,751,000 $ 34,228,000 $ 2,308,000 $ 31,805,000 $ 864,000 A breakdown of impaired loans by class of financing receivable as of and for the period ended March 31, 2018 is presented in the following table: For the three months ended March 31, 2018 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Recognized Interest Income With No Related Allowance Commercial Real estate $ 5,054,000 $ 5,269,000 $ — $ 4,163,000 $ 54,000 Construction 741,000 741,000 — 741,000 10,000 Other 2,281,000 2,360,000 — 2,302,000 6,000 Municipal — — — — — Residential Term 9,594,000 10,733,000 — 9,700,000 71,000 Construction — — — — — Home equity line of credit 917,000 1,008,000 — 1,090,000 5,000 Consumer 16,000 29,000 — 16,000 — $ 18,603,000 $ 20,140,000 $ — $ 18,012,000 $ 146,000 With an Allowance Recorded Commercial Real estate $ 3,897,000 $ 4,002,000 $ 254,000 $ 3,889,000 $ 39,000 Construction — — — — — Other 7,159,000 7,324,000 1,664,000 7,182,000 — Municipal — — — — — Residential Term 1,934,000 2,146,000 272,000 1,968,000 24,000 Construction — — — — — Home equity line of credit 122,000 125,000 16,000 70,000 — Consumer — — — — — $ 13,112,000 $ 13,597,000 $ 2,206,000 $ 13,109,000 $ 63,000 Total Commercial Real estate $ 8,951,000 $ 9,271,000 $ 254,000 $ 8,052,000 $ 93,000 Construction 741,000 741,000 — 741,000 10,000 Other 9,440,000 9,684,000 1,664,000 9,484,000 6,000 Municipal — — — — — Residential Term 11,528,000 12,879,000 272,000 11,668,000 95,000 Construction — — — — — Home equity line of credit 1,039,000 1,133,000 16,000 1,160,000 5,000 Consumer 16,000 29,000 — 16,000 — $ 31,715,000 $ 33,737,000 $ 2,206,000 $ 31,121,000 $ 209,000 Troubled Debt Restructured A "TDR" constitutes a restructuring of debt if the Company, for economic or legal reasons related to the borrower's financial difficulties, grants a concession to the borrower that it would not otherwise consider. To determine whether or not a loan should be classified as a TDR, Management evaluates a loan based upon the following criteria: • The borrower demonstrates financial difficulty; common indicators include past due status with bank obligations, substandard credit bureau reports, or an inability to refinance with another lender, and • The Company has granted a concession; common concession types include maturity date extension, interest rate adjustments to below market pricing, and deferment of payments. As of March 31, 2019 , the Company had 80 loans with a balance of $25,386,000 that have been classified as TDRs. This compares to 76 loans with a balance of $25,222,000 and 69 loans with a balance of $18,709,000 classified as TDRs as of December 31, 2018 and March 31, 2018 , respectively. The impairment carried as a specific reserve in the allowance for loan losses is calculated by present valuing the expected cash flows on the loan at the original interest rate, or, for collateral-dependent loans, using the fair value of the collateral less costs to sell. The following table shows TDRs by class and the specific reserve as of March 31, 2019 : Number of Loans Balance Specific Reserves Commercial Real estate 17 $ 8,583,000 $ 107,000 Construction 1 721,000 — Other 10 7,257,000 1,275,000 Municipal — — — Residential Term 49 8,331,000 225,000 Construction — — — Home equity line of credit 3 494,000 — Consumer — — — 80 $ 25,386,000 $ 1,607,000 The following table shows TDRs by class and the specific reserve as of December 31, 2018 : Number of Loans Balance Specific Reserves Commercial Real estate 17 $ 8,631,000 $ 132,000 Construction 1 721,000 — Other 10 7,298,000 1,276,000 Municipal — — — Residential Term 45 8,074,000 160,000 Construction — — — Home equity line of credit 3 498,000 — Consumer — — — 76 $ 25,222,000 $ 1,568,000 The following table shows TDRs by class and the specific reserve as of March 31, 2018 : Number of Loans Balance Specific Reserves Commercial Real estate 15 $ 8,030,000 $ 132,000 Construction 1 741,000 — Other 4 546,000 — Municipal — — — Residential Term 46 8,883,000 271,000 Construction — — — Home equity line of credit 3 509,000 — Consumer — — — 69 $ 18,709,000 $ 403,000 As of March 31, 2019 , 10 of the loans classified as TDRs with a total balance of $1,129,000 were more than 30 days past due. Of these loans, three had been placed on TDR status in the previous 12 months. The following table shows these TDRs by class and the associated specific reserves included in the allowance for loan losses as of March 31, 2019 : Number of Loans Balance Specific Reserves Commercial Real estate — $ — $ — Construction — — — Other 4 261,000 134,000 Municipal — — — Residential Term 5 701,000 36,000 Construction — — — Home equity line of credit 1 167,000 — Consumer — — — 10 $ 1,129,000 $ 170,000 As of March 31, 2018 , seven of the loans classified as TDRs with a total balance of $810,000 were more than 30 days past due. Of these loans, none had been placed on TDR status in the previous 12 months. The following table shows these TDRs by class and the associated specific reserves included in the allowance for loan losses as of March 31, 2018 : Number of Loans Balance Specific Reserves Commercial Real estate — $ — $ — Construction — — — Other — — — Municipal — — — Residential Term 6 643,000 45,000 Construction — — — Home equity line of credit 1 167,000 — Consumer — — — 7 $ 810,000 $ 45,000 For the three months ended March 31, 2019 , five loans were placed on TDR status. The following table shows these TDRs by class and the associated specific reserves included in the allowance for loan losses as of March 31, 2019 : Number of Loans Pre-Modification Post-Modification Outstanding Specific Reserves Commercial Real estate — $ — $ — $ — Construction — — — — Other — — — — Municipal — — — — Residential Term 5 573,000 554,000 74,000 Construction — — — — Home equity line of credit — — — — Consumer — — — — 5 $ 573,000 $ 554,000 $ 74,000 For the three months ended March 31, 2018 , seven loans were placed on TDR status. The following table shows these TDRs by class and associated specific reserves included in the allowance for loan losses as of March 31, 2018 . Number of Loans Pre-Modification Post-Modification Outstanding Specific Reserves Commercial Real estate 7 $ 1,056,000 $ 1,056,000 $ 36,000 Construction — — — — Other — — — — Municipal — — — — Residential Term — — — — Construction — — — — Home equity line of credit — — — — Consumer — — — — 7 $ 1,056,000 $ 1,056,000 $ 36,000 As of March 31, 2019 , Management is aware of seven loans classified as TDRs that are involved in bankruptcy with an outstanding balance of $929,000 . There were also 20 loans with an outstanding balance of $8,555,000 that were classified as TDRs and on non-accrual status, of which three loans with an outstanding balance of $398,000 were in the process of foreclosure. Residential Mortgage Loans in Process of Foreclosure As of March 31, 2019 , there were 10 mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $ 1,101,000 . This compares to 13 mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $1,388,000 as of March 31, 2018 |