Quarterly report pursuant to Section 13 or 15(d)

Loans Receivable

v3.10.0.1
Loans Receivable
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
Note 5 - Loans Receivable
 
Loans receivable are summarized below:
 
(Dollars in thousands)
 
 
September 30, 2018
 
 
December 31, 2017
 
Loans secured by real estate:
 
 
 
 
 
 
 
 
Residential real estate
 
 
221,054
 
 
 
172,780
 
Home equity
 
 
43,175
 
 
 
36,718
 
Commercial real estate
 
 
243,304
 
 
 
211,090
 
Construction and land development
 
 
54,755
 
 
 
50,746
 
Farmland
 
 
242
 
 
 
-
 
Multifamily
 
 
45,752
 
 
 
43,369
 
Total loans secured by real estate
 
 
608,282
 
 
 
514,703
 
Consumer
 
 
5,633
 
 
 
460
 
Commercial business
 
 
102,820
 
 
 
77,122
 
Government
 
 
25,763
 
 
 
28,785
 
Subtotal
 
 
742,498
 
 
 
621,070
 
Less:
 
 
 
 
 
 
 
 
Net deferred loan origination fees
 
 
(188
)
 
 
(130
)
Undisbursed loan funds
 
 
(78
)
 
 
(729
)
Loans receivable
 
$
742,232
 
 
$
620,211
 
 
(Dollars in thousands)
 
Beginning Balance
 
 
Charge-offs
 
 
Recoveries
 
 
Provisions
 
 
Ending Balance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the three months ended September 30, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,523
 
 
$
(30
)
 
 
-
 
 
$
82
 
 
$
1,575
 
Home equity
 
 
183
 
 
 
-
 
 
 
-
 
 
 
10
 
 
 
193
 
Commercial real estate
 
 
3,170
 
 
 
-
 
 
 
22
 
 
 
48
 
 
 
3,240
 
Construction and land development
 
 
611
 
 
 
-
 
 
 
-
 
 
 
(32
)
 
 
579
 
Multifamily
 
 
607
 
 
 
-
 
 
 
-
 
 
 
(150
)
 
 
457
 
Farmland
 
 
4
 
 
 
-
 
 
 
-
 
 
 
(1
)
 
 
3
 
Consumer
 
 
36
 
 
 
(19
)
 
 
8
 
 
 
298
 
 
 
323
 
Commercial business
 
 
1,264
 
 
 
-
 
 
 
8
 
 
 
61
 
 
 
1,333
 
Government
 
 
50
 
 
 
-
 
 
 
-
 
 
 
(4
)
 
 
46
 
Total
 
$
7,448
 
 
$
(49
)
 
$
38
 
 
$
312
 
 
$
7,749
 
 
The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the three months ended September 30, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,561
 
 
$
(10
)
 
$
3
 
 
$
17
 
 
$
1,571
 
Home equity
 
 
76
 
 
 
(35
)
 
 
-
 
 
 
41
 
 
 
82
 
Commercial real estate
 
 
2,890
 
 
 
-
 
 
 
-
 
 
 
28
 
 
 
2,918
 
Construction and land development
 
 
600
 
 
 
-
 
 
 
-
 
 
 
(30
)
 
 
570
 
Multifamily
 
 
501
 
 
 
-
 
 
 
-
 
 
 
40
 
 
 
541
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Consumer
 
 
30
 
 
 
(29
)
 
 
7
 
 
 
22
 
 
 
30
 
Commercial business
 
 
1,357
 
 
 
(120
)
 
 
5
 
 
 
49
 
 
 
1,291
 
Government
 
 
58
 
 
 
-
 
 
 
-
 
 
 
(2
)
 
 
56
 
Total
 
$
7,073
 
 
$
(194
)
 
$
15
 
 
$
165
 
 
$
7,059
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the nine months ended September 30, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,568
 
 
$
(136
)
 
$
-
 
 
$
143
 
 
$
1,575
 
Home equity
 
 
166
 
 
 
(24
)
 
 
-
 
 
 
51
 
 
 
193
 
Commercial real estate
 
 
3,125
 
 
 
(119
)
 
 
24
 
 
 
210
 
 
 
3,240
 
Construction and land development
 
 
618
 
 
 
-
 
 
 
-
 
 
 
(39
)
 
 
579
 
Multifamily
 
 
622
 
 
 
-
 
 
 
-
 
 
 
(165
)
 
 
457
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
3
 
 
 
3
 
Consumer
 
 
31
 
 
 
(41
)
 
 
17
 
 
 
316
 
 
 
323
 
Commercial business
 
 
1,298
 
 
 
(529
)
 
 
125
 
 
 
439
 
 
 
1,333
 
Government
 
 
54
 
 
 
-
 
 
 
-
 
 
 
(8
)
 
 
46
 
Total
 
$
7,482
 
 
$
(849
)
 
$
166
 
 
$
950
 
 
$
7,749
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Bancorp's activity in the allowance for loan losses, by loan segment, is summarized below for the nine months ended September 30, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,111
 
 
$
(913
)
 
$
3
 
 
$
370
 
 
$
1,571
 
Home equity
 
 
299
 
 
 
(60
)
 
 
-
 
 
 
(157
)
 
 
82
 
Commercial real estate
 
 
3,113
 
 
 
-
 
 
 
-
 
 
 
(195
)
 
 
2,918
 
Construction and land development
 
 
617
 
 
 
-
 
 
 
-
 
 
 
(47
)
 
 
570
 
Multifamily
 
 
572
 
 
 
-
 
 
 
-
 
 
 
(31
)
 
 
541
 
Consumer
 
 
34
 
 
 
(59
)
 
 
11
 
 
 
44
 
 
 
30
 
Commercial business
 
 
896
 
 
 
(365
)
 
 
22
 
 
 
738
 
 
 
1,291
 
Government
 
 
56
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
56
 
Total
 
$
7,698
 
 
$
(1,397
)
 
$
36
 
 
$
722
 
 
$
7,059
 
 
The Bancorp's impairment analysis is summarized below:
 
 
 
Ending Balances
 
(Dollars in thousands)
 
Individually

evaluated for

impairment

reserves
 
 
Collectively

evaluated for
impairment
reserves
 
 
Loan receivables
 
 
Individually

evaluated for
impairment
 
 
Purchased credit

impaired

individually
evaluated for
impairment
 
 
Collectively

evaluated for

impairment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at September 30, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
20
 
 
$
1,555
 
 
$
220,862
 
 
$
536
 
 
$
1,095
 
 
$
219,231
 
Home equity
 
 
9
 
 
 
184
 
 
 
43,234
 
 
 
147
 
 
 
123
 
 
 
42,964
 
Commercial real estate
 
 
278
 
 
 
2,962
 
 
 
243,304
 
 
 
1,804
 
 
 
1,605
 
 
 
239,895
 
Construction and land development
 
 
-
 
 
 
579
 
 
 
54,755
 
 
 
-
 
 
 
-
 
 
 
54,755
 
Multifamily
 
 
-
 
 
 
457
 
 
 
45,752
 
 
 
-
 
 
 
-
 
 
 
45,752
 
Farmland
 
 
-
 
 
 
3
 
 
 
242
 
 
 
-
 
 
 
-
 
 
 
242
 
Consumer
 
 
-
 
 
 
323
 
 
 
5,633
 
 
 
-
 
 
 
-
 
 
 
5,633
 
Commercial business
 
 
69
 
 
 
1,264
 
 
 
102,687
 
 
 
473
 
 
 
1,436
 
 
 
100,778
 
Government
 
 
-
 
 
 
46
 
 
 
25,763
 
 
 
-
 
 
 
-
 
 
 
25,763
 
Total
 
$
376
 
 
$
7,373
 
 
$
742,232
 
 
$
2,960
 
 
$
4,259
 
 
$
735,013
 
 
The Bancorp's allowance for loan losses impairment evaluation and loan receivables are summarized below at December 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
21
 
 
$
1,547
 
 
$
172,141
 
 
$
462
 
 
$
690
 
 
$
170,989
 
Home equity
 
 
-
 
 
 
166
 
 
 
36,769
 
 
 
-
 
 
 
-
 
 
 
36,769
 
Commercial real estate
 
 
144
 
 
 
2,981
 
 
 
211,090
 
 
 
512
 
 
 
-
 
 
 
210,578
 
Construction and land development
 
 
-
 
 
 
618
 
 
 
50,746
 
 
 
134
 
 
 
-
 
 
 
50,612
 
Multifamily
 
 
-
 
 
 
622
 
 
 
43,368
 
 
 
-
 
 
 
-
 
 
 
43,368
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Consumer
 
 
-
 
 
 
31
 
 
 
461
 
 
 
-
 
 
 
-
 
 
 
461
 
Commercial business
 
 
539
 
 
 
759
 
 
 
76,851
 
 
 
724
 
 
 
-
 
 
 
76,127
 
Government
 
 
-
 
 
 
54
 
 
 
28,785
 
 
 
-
 
 
 
-
 
 
 
28,785
 
Total
 
$
704
 
 
$
6,778
 
 
$
620,211
 
 
$
1,832
 
 
$
690
 
 
$
617,689
 
 
The Bancorp's credit quality indicators are summarized below at September 30, 2018 and December 31, 2017:
 
 
 
Credit Exposure - Credit Risk Portfolio By Creditworthiness Category
 
 
 
September 30, 2018
 
(Dollars in thousands)
 
2
 
 
3
 
 
4
 
 
5
 
 
6
 
 
7
 
 
8
 
 
 
 
Loan Segment
 
Moderate
 
 
Above average

acceptable
 
 
Acceptable
 
 
Marginally

acceptable
 
 
Pass/monitor
 
 
Special

mention
 
 
Substandard
 
 
Total
 
Residential real estate
 
$
143
 
 
$
55,619
 
 
$
99,366
 
 
$
8,920
 
 
$
47,779
 
 
$
4,685
 
 
$
4,350
 
 
$
220,862
 
Home equity
 
 
108
 
 
 
4,552
 
 
 
37,472
 
 
 
-
 
 
 
126
 
 
 
544
 
 
 
432
 
 
 
43,234
 
Commercial real estate
 
 
-
 
 
 
6,133
 
 
 
80,598
 
 
 
102,712
 
 
 
46,018
 
 
 
5,972
 
 
 
1,871
 
 
 
243,304
 
Construction and land development
 
 
-
 
 
 
330
 
 
 
22,127
 
 
 
22,895
 
 
 
9,403
 
 
 
-
 
 
 
-
 
 
 
54,755
 
Multifamily
 
 
-
 
 
 
574
 
 
 
19,575
 
 
 
23,686
 
 
 
1,763
 
 
 
154
 
 
 
-
 
 
 
45,752
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
242
 
 
 
-
 
 
 
-
 
 
 
242
 
Commercial business
 
 
9,872
 
 
 
22,398
 
 
 
22,229
 
 
 
31,540
 
 
 
12,724
 
 
 
3,144
 
 
 
780
 
 
 
102,687
 
Consumer
 
 
794
 
 
 
3,007
 
 
 
678
 
 
 
221
 
 
 
913
 
 
 
20
 
 
 
-
 
 
 
5,633
 
Government
 
 
-
 
 
 
2,111
 
 
 
18,707
 
 
 
4,945
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
25,763
 
Total
 
$
10,917
 
 
$
94,724
 
 
$
300,752
 
 
$
194,919
 
 
$
118,968
 
 
$
14,519
 
 
$
7,433
 
 
$
742,232
 
 
 
 
December 31, 2017
 
 
 
2
 
 
3
 
 
4
 
 
5
 
 
6
 
 
7
 
 
8
 
 
 
 
Loan Segment
 
Moderate
 
 
Above average

acceptable
 
 
Acceptable
 
 
Marginally

acceptable
 
 
Pass/monitor
 
 
Special

mention
 
 
Substandard
 
 
Total
 
Residential real estate
 
$
887
 
 
$
12,317
 
 
$
92,241
 
 
$
8,759
 
 
$
50,075
 
 
$
4,130
 
 
$
3,732
 
 
$
172,141
 
Home equity
 
 
-
 
 
 
1,065
 
 
 
34,871
 
 
 
-
 
 
 
250
 
 
 
233
 
 
 
350
 
 
 
36,769
 
Commercial real estate
 
 
-
 
 
 
2,372
 
 
 
79,847
 
 
 
81,547
 
 
 
40,054
 
 
 
6,758
 
 
 
512
 
 
 
211,090
 
Construction and land development
 
 
-
 
 
 
-
 
 
 
20,719
 
 
 
19,583
 
 
 
10,310
 
 
 
-
 
 
 
134
 
 
 
50,746
 
Multifamily
 
 
-
 
 
 
-
 
 
 
20,159
 
 
 
20,965
 
 
 
2,076
 
 
 
168
 
 
 
-
 
 
 
43,368
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial business
 
 
7,169
 
 
 
17,202
 
 
 
16,784
 
 
 
21,087
 
 
 
13,041
 
 
 
394
 
 
 
1,174
 
 
 
76,851
 
Consumer
 
 
-
 
 
 
131
 
 
 
330
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
461
 
Government
 
 
-
 
 
 
2,318
 
 
 
20,202
 
 
 
6,265
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
28,785
 
Total
 
$
8,056
 
 
$
35,405
 
 
$
285,153
 
 
$
158,206
 
 
$
115,806
 
 
$
11,683
 
 
$
5,902
 
 
$
620,211
 
 
The Bancorp has established a standard loan grading system to assist management, lenders and review personnel in their analysis and supervision of the loan portfolio. The use and application of these grades by the Bancorp is uniform and conforms to regulatory definitions. The loan grading system is as follows:
 
1 – Minimal Risk
 
Borrower demonstrates exceptional credit fundamentals, including stable and predictable profit margins, strong liquidity and a conservative balance sheet with superior asset quality. Excellent cash flow coverage of existing and projected debt service. Historic and projected performance indicates borrower is able to meet obligations under almost any economic circumstances.
 
2 – Moderate risk
 
Borrower consistently internally generates sufficient cash flow to fund debt service, working assets, and some capital expenditures. Risk of default considered low.
 
3 – Above average acceptable risk
 
Borrower generates sufficient cash flow to fund debt service and some working assets and/or capital expansion needs. Profitability and key balance sheet ratios are at or slightly above peers. Current trends are positive or stable. Earnings may be level or trending down slightly or be erratic; however, positive strengths are offsetting. Risk of default is reasonable but may warrant collateral protection.
 
4 – Acceptable risk
 
Borrower generates sufficient cash flow to fund debt service, but most working asset and all capital expansion needs are provided from external sources. Profitability ratios and key balance sheet ratios are usually close to peers but one or more ratios (e.g. leverage) may be higher than peer. Earnings may be trending down over the last three years. Borrower may be able to obtain similar financing from other banks with comparable or less favorable terms. Risk of default is acceptable but requires collateral protection.
 
5 – Marginally acceptable risk
 
Borrower may exhibit excessive growth, declining earnings, strained cash flow, increasing leverage and/or weakening market position that indicate above average risk. Limited additional debt capacity, modest coverage, and average or below average asset quality, margins and market share. Interim losses and/or adverse trends may occur, but not to the level that would affect the Bank’s position. The potential for default is higher than normal but considered marginally acceptable based on prospects for improving financial performance and the strength of the collateral.
 
6 – Pass/monitor
 
The borrower has significant weaknesses resulting from performance trends or management concerns. The financial condition of the company has taken a negative turn and may be temporarily strained. Cash flow may be weak but cash reserves remain adequate to meet debt service. Management weaknesses are evident. Borrowers in this category will warrant more than the normal level of supervision and more frequent reporting.
 
7 – Special mention (watch)
 
Special mention credits are considered bankable assets with no apparent loss of principal or interest envisioned but requiring a high level of management attention. Assets in this category are currently protected but are potentially weak. These borrowers are subject to economic, industry, or management factors having an adverse impact upon their prospects for orderly service of debt. The perceived risk in continued lending is considered to have increased beyond the level where such loans would normally be granted. These assets constitute an undue and unwarranted credit risk, but not to the point of justifying a classification of Substandard.
 
8 – Substandard
 
This classification consists of loans which are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. Financial statements normally reveal some or all of the following: poor trends, lack of earnings and cash flow, excessive debt, lack of liquidity, and the absence of creditor protection. Loans are still considered collectible, but due to increased risks and defined weaknesses of the credit, some loss could be incurred in collection if the deficiencies are not corrected.
 
Performing loans are loans that are paying as agreed and are approximately less than ninety days past due on payments of interest and principal.
 
During the first nine months of 2018, three commercial business loans totaling $355 thousand, three commercial real estate loans totaling $935 thousand, two residential real estate loans totaling $114 thousand and five home equity loans totaling $149 thousand were modified as a troubled debt restructuring. No troubled debt restructurings have subsequently defaulted during the periods presented. All of the loans classified as troubled debt restructurings are also considered impaired. The valuation basis for the Bancorp’s troubled debt restructurings is based on the present value of cash flows, unless consistent cash flows are not present, then the fair value of the collateral securing the loan is the basis for valuation.
 
The Bancorp's individually evaluated impaired loans are summarized below:
 
 
 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
As of September 30, 2018
 
 
September 30, 2018
 
(Dollars in thousands)
 
Recorded

Investment
 
 
Unpaid Principal
Balance
 
 
Related Allowance
 
 
Average Recorded

Investment
 
 
Interest Income

Recognized
 
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,518
 
 
$
3,922
 
 
$
-
 
 
$
1,208
 
 
$
61
 
Home equity
 
 
212
 
 
 
219
 
 
 
-
 
 
 
87
 
 
 
1
 
Commercial real estate
 
 
2,772
 
 
 
3,471
 
 
 
-
 
 
 
1,114
 
 
 
46
 
Construction and land development
 
 
-
 
 
 
-
 
 
 
-
 
 
 
67
 
 
 
-
 
Multifamily
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial business
 
 
1,831
 
 
 
2,091
 
 
 
-
 
 
 
651
 
 
 
20
 
Consumer
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Government
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
 
113
 
 
 
113
 
 
 
20
 
 
 
114
 
 
 
4
 
Home equity
 
 
58
 
 
 
58
 
 
 
9
 
 
 
29
 
 
 
-
 
Commercial real estate
 
 
637
 
 
 
637
 
 
 
278
 
 
 
280
 
 
 
3
 
Construction and land development
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Multifamily
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial business
 
 
78
 
 
 
78
 
 
 
69
 
 
 
159
 
 
 
1
 
Consumer
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Government
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,631
 
 
$
4,035
 
 
$
20
 
 
$
1,322
 
 
$
65
 
Home equity
 
$
270
 
 
$
277
 
 
$
9
 
 
$
116
 
 
$
1
 
Commercial real estate
 
$
3,409
 
 
$
4,108
 
 
$
278
 
 
$
1,394
 
 
$
49
 
Construction & land development
 
$
-
 
 
$
-
 
 
$
-
 
 
$
67
 
 
$
-
 
Multifamily
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
Farmland
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
Commercial business
 
$
1,909
 
 
$
2,169
 
 
$
69
 
 
$
810
 
 
$
21
 
Consumer
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
Government
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
For the nine months ended
 
 
 
As of December 31, 2017
 
 
September 30, 2017
 
(Dollars in thousands)
 
Recorded

Investment
 
 
Unpaid Principal
Balance
 
 
Related Allowance
 
 
Average Recorded

Investment
 
 
Interest Income

Recognized
 
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,072
 
 
$
3,351
 
 
$
-
 
 
$
1,302
 
 
$
48
 
Home equity
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial real estate
 
 
253
 
 
 
253
 
 
 
-
 
 
 
361
 
 
 
4
 
Construction and land development
 
 
134
 
 
 
134
 
 
 
-
 
 
 
134
 
 
 
-
 
Multifamily
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial business
 
 
184
 
 
 
184
 
 
 
-
 
 
 
201
 
 
 
3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
 
80
 
 
 
270
 
 
 
21
 
 
 
300
 
 
 
1
 
Home equity
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial real estate
 
 
259
 
 
 
259
 
 
 
144
 
 
 
139
 
 
 
-
 
Construction & land development
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Multifamily
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial business
 
 
540
 
 
 
540
 
 
 
539
 
 
 
481
 
 
 
4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,152
 
 
$
3,621
 
 
$
21
 
 
$
1,602
 
 
$
49
 
Home equity
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
 
$
-
 
Commercial real estate
 
$
512
 
 
$
512
 
 
$
144
 
 
$
500
 
 
$
4
 
Construction & land development
 
$
134
 
 
$
134
 
 
$
-
 
 
$
134
 
 
$
-
 
Commercial business
 
$
724
 
 
$
724
 
 
$
539
 
 
$
682
 
 
$
7
 
 
As a result of acquisition activity, the Bancorp acquired loans for which there was evidence of credit quality deterioration since origination and it was determined that it was probable that the Bancorp would be unable to collect all contractually required principal and interest payments. At September 30, 2018, total purchased credit impaired loans with unpaid principal balances totaled $7.6 million with a recorded investment of $4.3 million. At December 31, 2017, purchased credit impaired loans with unpaid principal balances totaled $2.6 million with a recorded investment of $690 thousand.
 
The Bancorp's age analysis of past due loans is summarized below:
 
(Dollars in thousands)
 
30-59 Days Past

Due
 
 
60-89 Days Past

Due
 
 
Greater Than 90

Days Past Due
 
 
Total Past Due
 
 
Current
 
 
Total Loans
 
 
Recorded

Investments

Greater than 90

Days Past Due

and Accruing
 
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,329
 
 
$
1,518
 
 
$
3,942
 
 
$
7,789
 
 
$
213,073
 
 
$
220,862
 
 
$
885
 
Home equity
 
 
225
 
 
 
183
 
 
 
164
 
 
 
572
 
 
 
42,662
 
 
 
43,234
 
 
 
50
 
Commercial real estate
 
 
-
 
 
 
352
 
 
 
680
 
 
 
1,032
 
 
 
242,272
 
 
 
243,304
 
 
 
-
 
Construction and land development
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
54,755
 
 
 
54,755
 
 
 
-
 
Multifamily
 
 
-
 
 
 
154
 
 
 
-
 
 
 
154
 
 
 
45,598
 
 
 
45,752
 
 
 
-
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
242
 
 
 
242
 
 
 
-
 
Commercial business
 
 
1,397
 
 
 
184
 
 
 
207
 
 
 
1,788
 
 
 
100,899
 
 
 
102,687
 
 
 
-
 
Consumer
 
 
52
 
 
 
20
 
 
 
-
 
 
 
72
 
 
 
5,561
 
 
 
5,633
 
 
 
-
 
Government
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
25,763
 
 
 
25,763
 
 
 
-
 
Total
 
$
4,003
 
 
$
2,411
 
 
$
4,993
 
 
$
11,407
 
 
$
730,825
 
 
$
742,232
 
 
$
935
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
4,921
 
 
$
1,751
 
 
$
3,092
 
 
$
9,764
 
 
$
162,377
 
 
$
172,141
 
 
$
225
 
Home equity
 
 
295
 
 
 
18
 
 
 
234
 
 
 
547
 
 
 
36,222
 
 
 
36,769
 
 
 
2
 
Commercial real estate
 
 
951
 
 
 
96
 
 
 
332
 
 
 
1,379
 
 
 
209,711
 
 
 
211,090
 
 
 
-
 
Construction and land development
 
 
-
 
 
 
-
 
 
 
133
 
 
 
133
 
 
 
50,613
 
 
 
50,746
 
 
 
-
 
Multifamily
 
 
319
 
 
 
-
 
 
 
-
 
 
 
319
 
 
 
43,049
 
 
 
43,368
 
 
 
-
 
Farmland
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Commercial business
 
 
285
 
 
 
162
 
 
 
539
 
 
 
986
 
 
 
75,865
 
 
 
76,851
 
 
 
-
 
Consumer
 
 
1
 
 
 
-
 
 
 
-
 
 
 
1
 
 
 
460
 
 
 
461
 
 
 
-
 
Government
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
28,785
 
 
 
28,785
 
 
 
-
 
Total
 
$
6,772
 
 
$
2,027
 
 
$
4,330
 
 
$
13,129
 
 
$
607,082
 
 
$
620,211
 
 
$
227
 
 
The Bancorp's loans on nonaccrual status are summarized below:
 
(Dollars in thousands) 
 
 
September 30,

2018
 
 
December 31,

2017
 
Residential real estate
 
$
3,861
 
 
$
3,509
 
Home equity
 
 
328
 
 
 
350
 
Commercial real estate
 
 
768
 
 
 
332
 
Construction and land development
 
 
-
 
 
 
133
 
Multifamily
 
 
-
 
 
 
-
 
Farmland
 
 
-
 
 
 
-
 
Commercial business
 
 
514
 
 
 
672
 
Consumer
 
 
-
 
 
 
-
 
Government
 
 
-
 
 
 
-
 
Total
 
$
5,471
 
 
$
4,996
 
 
For the acquisitions of First Federal Savings & Loan (“First Federal”), Liberty Savings Bank (“Liberty Savings”), and First Personal Bank (“First Personal”), as part of the fair value of loans receivable, a net fair value discount was established for loans as summarized below:
 
(dollars in thousands)
 
First Federal
 
 
Liberty Savings
 
 
First Personal
 
 
 
Net fair value

discount
 
 
Accretable period

in months
 
 
Net fair value

discount
 
 
Accretable period

in months
 
 
Net fair value

discount
 
 
Accretable period

 in months
 
Residential real estate
 
$
1,100
 
 
 
55
 
 
$
1,200
 
 
 
44
 
 
$
948
 
 
 
56
 
Home equity
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
51
 
 
 
50
 
Commercial real estate
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
208
 
 
 
56
 
Construction and land development
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
1
 
 
 
30
 
Multifamily
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
11
 
 
 
48
 
Consumer
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
146
 
 
 
50
 
Commercial business
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
348
 
 
 
24
 
Purchased credit impaired loans
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
424
 
 
 
32
 
Total
 
$
1,100
 
 
 
 
 
 
$
1,200
 
 
 
 
 
 
$
2,137
 
 
 
 
 
 
Accretable yield, or income collected for the nine months ended September 30, is as follows:
 
(dollars in thousands)
 
First Federal
 
 
Liberty Savings
 
 
First Personal
 
 
Total
 
2017
 
$
112
 
 
$
239
 
 
$
-
 
 
$
351
 
2018
 
 
105
 
 
 
200
 
 
 
114
 
 
 
            419
 
 
Accretable yield, or income expected to be collected is as follows:
 
(dollars in thousands)
 
First Federal
 
 
Liberty Savings
 
 
First Personal
 
 
Total
 
Remainder 2018
 
$
33
 
 
$
65
 
 
$
157
 
 
$
255
 
2019
 
 
22
 
 
 
43
 
 
 
627
 
 
 
692
 
2020
 
 
-
 
 
 
-
 
 
 
554
 
 
 
554
 
2021
 
 
-
 
 
 
-
 
 
 
335
 
 
 
335
 
2022
 
 
-
 
 
 
-
 
 
 
283
 
 
 
283
 
2023
 
 
-
 
 
 
-
 
 
 
67
 
 
 
67
 
Total
 
$
55
 
 
$
108
 
 
$
2,023
 
 
$
            2,186