Quarterly report pursuant to Section 13 or 15(d)

LOANS (Tables)

v3.22.2
LOANS (Tables)
6 Months Ended
Jun. 30, 2022
LOANS [Abstract]  
Portfolio Loans

Portfolio loans were as follows (dollars in thousands):


   
June 30,
2022
   
December 31,
2021
 
Commercial and industrial:
           
Commercial and industrial, excluding PPP
 
$
407,788
   
$
378,318
 
PPP
   
2,791
     
41,939
 
Total commercial and industrial
   
410,579
     
420,257
 
Commercial real estate:
               
Residential developed
   
4,094
     
4,862
 
Unsecured to residential developers
   
     
5,000
 
Vacant and unimproved
   
35,912
     
36,240
 
Commercial development
   
112
     
171
 
Residential improved
   
102,885
     
100,077
 
Commercial improved
   
258,676
     
259,039
 
Manufacturing and industrial
   
117,424
     
110,712
 
Total commercial real estate
   
519,103
     
516,101
 
Consumer:
               
Residential mortgage
   
125,771
     
117,800
 
Unsecured
   
168
     
210
 
Home equity
   
52,671
     
51,269
 
Other secured
   
3,623
     
3,356
 
Total consumer
   
182,233
     
172,635
 
Total loans
   
1,111,915
     
1,108,993
 
Allowance for loan losses
   
(14,631
)
   
(15,889
)
   
$
1,097,284
   
$
1,093,104
 
Activity in Allowance for Loan Losses by Portfolio Segment
Activity in the allowance for loan losses by portfolio segment was as follows (dollars in thousands):


Three months ended June 30, 2022
 
Commercial
and
Industrial
   
Commercial
Real Estate
   
Consumer
   
Unallocated
   
Total
 
Beginning balance
 
$
5,329
   
$
7,071
   
$
2,153
   
$
63
   
$
14,616
 
Charge-offs
   
(38
)
   
     
(22
)
   
     
(60
)
Recoveries
   
5
     
38
     
32
     
     
75
 
Provision for loan losses
   
(40
)
   
(87
)
   
153
     
(26
)
   
 
Ending Balance
 
$
5,256
   
$
7,022
   
$
2,316
   
$
37
   
$
14,631
 


Three months ended June 30, 2021
 
Commercial
and
Industrial
   
Commercial
Real Estate
   
Consumer
   
Unallocated
   
Total
 
Beginning balance
 
$
5,801
   
$
8,898
   
$
2,718
   
$
35
   
$
17,452
 
Charge-offs
   
     
     
(30
)
   
     
(30
)
Recoveries
   
35
     
72
     
27
     
     
134
 
Provision for loan losses
   
(630
)
   
(230
)
   
141
     
(31
)
   
(750
)
Ending Balance
 
$
5,206
   
$
8,740
   
$
2,856
   
$
4
   
$
16,806
 


Six months ended June 30, 2022
 
Commercial
and
Industrial
   
Commercial
Real Estate
   
Consumer
   
Unallocated
   
Total
 
Beginning balance
 
$
5,176
   
$
8,051
   
$
2,633
   
$
29
   
$
15,889
 
Charge-offs
   
(38
)
   
     
(57
)
   
     
(95
)
Recoveries
   
10
     
271
     
56
     
     
337
 
Provision for loan losses
   
108
     
(1,300
)
   
(316
)
   
8
     
(1,500
)
Ending Balance
 
$
5,256
   
$
7,022
   
$
2,316
   
$
37
   
$
14,631
 


Six months ended June 30, 2021
 
Commercial
and
Industrial
   
Commercial
Real Estate
   
Consumer
   
Unallocated
   
Total
 
Beginning balance
 
$
6,632
   
$
7,999
   
$
2,758
   
$
19
   
$
17,408
 
Charge-offs
   
     
     
(80
)
   
     
(80
)
Recoveries
   
55
     
111
     
62
     
     
228
 
Provision for loan losses
   
(1,481
)
   
630
     
116
     
(15
)
   
(750
)
Ending Balance
 
$
5,206
   
$
8,740
   
$
2,856
   
$
4
   
$
16,806
 
Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment Based on Impairment Method
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method (dollars in thousands):


June 30, 2022
 
Commercial
and
Industrial
   
Commercial
Real Estate
   
Consumer
   
Unallocated
   
Total
 
Allowance for loan losses:
                             
Ending allowance attributable to loans:
                             
Individually reviewed for impairment
 
$
59
   
$
21
   
$
216
   
$
   
$
296
 
Collectively evaluated for impairment
   
5,197
     
7,001
     
2,100
     
37
     
14,335
 
Total ending allowance balance
 
$
5,256
   
$
7,022
   
$
2,316
   
$
37
   
$
14,631
 
Loans:
                                       
Individually reviewed for impairment
 
$
829
   
$
584
   
$
2,840
   
$
   
$
4,253
 
Collectively evaluated for impairment
   
409,750
     
518,519
     
179,393
     
     
1,107,662
 
Total ending loans balance
 
$
410,579
   
$
519,103
   
$
182,233
   
$
   
$
1,111,915
 


December 31, 2021
 
Commercial
and
Industrial
   
Commercial
Real Estate
   
Consumer
   
Unallocated
   
Total
 
Allowance for loan losses:
                             
Ending allowance attributable to loans:
                             
Individually reviewed for impairment
 
$
303
   
$
24
   
$
238
   
$
   
$
565
 
Collectively evaluated for impairment
   
4,873
     
8,027
     
2,395
     
29
     
15,324
 
Total ending allowance balance
 
$
5,176
   
$
8,051
   
$
2,633
   
$
29
   
$
15,889
 
Loans:
                                       
Individually reviewed for impairment
 
$
3,375
   
$
1,127
   
$
3,024
   
$
   
$
7,526
 
Collectively evaluated for impairment
   
416,882
     
514,974
     
169,611
     
     
1,101,467
 
Total ending loans balance
 
$
420,257
   
$
516,101
   
$
172,635
   
$
   
$
1,108,993
 
Loans Individually Evaluated for Impairment by Class of Loans
The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2022 (dollars in thousands):


June 30, 2022
 
Unpaid
Principal
Balance
   
Recorded
Investment
   
Allowance
Allocated
 
With no related allowance recorded:
                 
Commercial and industrial
 
$
460
   
$
460
   
$
 
Commercial real estate:
                       
Residential improved
   
38
     
38
     
 
Commercial improved
   
46
     
46
     
 
     
84
     
84
     
 
Consumer
   
     
     
 
Total with no related allowance recorded
 
$
544
   
$
544
   
$
 
                         
With an allowance recorded:
                       
Commercial and industrial
 
$
369
   
$
369
   
$
59
 
Commercial real estate:
                       
Commercial improved
   
314
     
314
     
10
 
Manufacturing and industrial
   
186
     
186
     
11
 
     
500
     
500
     
21
 
Consumer:
                       
Residential mortgage
   
2,519
     
2,519
     
192
 
Unsecured
   
32
     
32
     
2
 
Home equity
   
289
     
289
     
22
 
     
2,840
     
2,840
     
216
 
Total with an allowance recorded
 
$
3,709
   
$
3,709
   
$
296
 
Total
 
$
4,253
   
$
4,253
   
$
296
 


The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2021 (dollars in thousands):


December 31, 2021
 
Unpaid
Principal
Balance
   
Recorded
Investment
   
Allowance
Allocated
 
With no related allowance recorded:
                 
Commercial and industrial
 
$
669
   
$
669
   
$
 
Commercial real estate:
                       
Residential improved
   
41
     
41
     
 
Commercial improved
   
577
     
577
     
 
     
618
     
618
     
 
Consumer
   
     
     
 
Total with no related allowance recorded
 
$
1,287
   
$
1,287
   
$
 
                         
With an allowance recorded:
                       
Commercial and industrial
 
$
2,706
   
$
2,706
   
$
303
 
Commercial real estate:
                       
Commercial improved
   
318
     
318
     
14
 
Manufacturing and industrial
   
191
     
191
     
10
 
     
509
     
509
     
24
 
Consumer:
                       
Residential mortgage
   
2,726
     
2,726
     
214
 
Unsecured
   
64
     
64
     
5
 
Home equity
   
234
     
234
     
19
 
     
3,024
     
3,024
     
238
 
Total with an allowance recorded
 
$
6,239
   
$
6,239
   
$
565
 
Total
 
$
7,526
   
$
7,526
   
$
565
 
Average Balances of Impaired Loans and Interest Recognized on Impaired Loans
The following table presents information regarding average balances of impaired loans and interest recognized on impaired loans for the three and six month periods ended June 30, 2022 and 2021 (dollars in thousands):


   
Three
Months
Ended
June 30,
2022
   
Three
Months
Ended
June 30,
2021
   
Six
Months
Ended
June 30,
2022
   
Six
Months
Ended
June 30,
2021
 
Average of impaired loans during the period:
                       
Commercial and industrial
 
$
2,284
   
$
1,916
   
$
3,232
   
$
3,251
 
Commercial real estate:
                               
Residential developed
   
     
     
     
22
 
Residential improved
   
39
     
33
     
39
     
60
 
Commercial improved
   
362
     
2,170
     
453
     
2,190
 
Manufacturing and industrial
   
187
     
197
     
188
     
198
 
Consumer
   
2,793
     
3,619
     
2,824
     
3,780
 
Interest income recognized during impairment:
                               
Commercial and industrial
   
26
     
9
     
165
     
143
 
Commercial real estate
   
18
     
35
     
28
     
66
 
Consumer
   
55
     
31
     
81
     
69
 
Cash-basis interest income recognized
                               
Commercial and industrial
   
27
     
8
     
158
     
134
 
Commercial real estate
   
21
     
35
     
34
     
66
 
Consumer
   
56
     
32
     
82
     
68
 
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans
Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.  The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2022 and December 31, 2021:


June 30, 2022
 
Nonaccrual
   
Over 90
days
Accruing
 
Commercial and industrial
 
$
   
$
 
Commercial real estate:
               
Residential improved
   
5
     
 
     
5
     
 
Consumer:
               
Residential mortgage
   
85
     
 
     
85
     
 
Total
 
$
90
   
$
 


December 31, 2021
 
Nonaccrual
   
Over 90 days
Accruing
 
Commercial and industrial
 
$
   
$
 
Commercial real estate:
               
Residential improved
   
5
     
 
     
5
     
 
Consumer:
               
Residential mortgage
   
86
     
 
     
86
     
 
Total
 
$
91
   
$
 
Aging of Recorded Investment in Past Due Loans by Class of Loans
The following table presents the aging of the recorded investment in past due loans as of June 30, 2022 and December 31, 2021 by class of loans (dollars in thousands):


June 30, 2022
 
30-90
Days
   
Greater Than
90 Days
   
Total
Past Due
   
Loans Not
Past Due
   
Total
 
Commercial and industrial
 
$
   
$
   
$
   
$
410,579
   
$
410,579
 
Commercial real estate:
                                       
Residential developed
   
     
     
     
4,094
     
4,094
 
Unsecured to residential developers
   
     
     
     
     
 
Vacant and unimproved
   
     
     
     
35,912
     
35,912
 
Commercial development
   
     
     
     
112
     
112
 
Residential improved
   
     
5
     
5
     
102,880
     
102,885
 
Commercial improved
   
     
     
     
258,676
     
258,676
 
Manufacturing and industrial
   
     
     
     
117,424
     
117,424
 
     
     
5
     
5
     
519,098
     
519,103
 
Consumer:
                                       
Residential mortgage
   
75
     
84
     
159
     
125,612
     
125,771
 
Unsecured
   
     
     
     
168
     
168
 
Home equity
   
33
     
     
33
     
52,638
     
52,671
 
Other secured
   
     
     
     
3,623
     
3,623
 
     
108
     
84
     
192
     
182,041
     
182,233
 
Total
 
$
108
   
$
89
   
$
197
   
$
1,111,718
   
$
1,111,915
 


December 31, 2021
 
30-90
Days
   
Greater Than
90 Days
   
Total
Past Due
   
Loans Not
Past Due
   
Total
 
Commercial and industrial
 
$
39
   
$
1
   
$
40
   
$
420,217
   
$
420,257
 
Commercial real estate:
                                       
Residential developed
   
     
     
     
4,862
     
4,862
 
Unsecured to residential developers
                      5,000       5,000  
Vacant and unimproved
   
     
     
     
36,240
     
36,240
 
Commercial development
   
     
     
     
171
     
171
 
Residential improved
   
     
5
     
5
     
100,072
     
100,077
 
Commercial improved
   
     
     
     
259,039
     
259,039
 
Manufacturing and industrial
   
     
     
     
110,712
     
110,712
 
     
     
5
     
5
     
516,096
     
516,101
 
Consumer:
                                       
Residential mortgage
   
     
84
     
84
     
117,716
     
117,800
 
Unsecured
   
     
     
     
210
     
210
 
Home equity
   
     
     
     
51,269
     
51,269
 
Other secured
   
     
     
     
3,356
     
3,356
 
     
     
84
     
84
     
172,551
     
172,635
 
Total
 
$
39
   
$
90
   
$
129
   
$
1,108,864
   
$
1,108,993
 
Troubled Debt Restructurings

The following table presents information regarding troubled debt restructurings as of June 30, 2022 and December 31, 2021 (dollars in thousands):


   
June 30, 2022
   
December 31, 2021
 
   
Number of
Loans
   
Outstanding
Recorded
Balance
   
Number of
Loans
   
Outstanding
Recorded
Balance
 
Commercial and industrial
   
3
   
$
830
     
4
   
$
3,375
 
Commercial real estate
   
5
     
584
     
6
     
1,127
 
Consumer
   
37
     
2,840
     
44
     
3,024
 
     
45
   
$
4,254
     
54
   
$
7,526
 


The following table presents information related to accruing TDRs as of June 30, 2022 and December 31, 2021. The table presents the amount of accruing troubled debt restructurings that were on nonaccrual status prior to the restructuring, accruing at the time of restructuring and those that were upgraded to accruing status after receiving six consecutive monthly payments in accordance with the restructured terms as of each period reported (dollars in thousands):


   
June 30,
2022
   
December 31,
2021
 
Accruing TDR - nonaccrual at restructuring
 
$
   
$
 
Accruing TDR - accruing at restructuring
   
3,789
     
4,552
 
Accruing TDR - upgraded to accruing after six consecutive payments
   
460
     
2,968
 
   
$
4,249
   
$
7,520
 
Risk Grade Category of Loans by Class of Loans
As of June 30, 2022 and December 31, 2021, the risk grade category of commercial loans by class of loans were as follows (dollars in thousands):


June 30, 2022
    1
      2
      3
      4
      5
      6
      7
      8
   
Total
 
Commercial and industrial
 
$
17,825
   
$
11,677
   
$
145,802
   
$
230,669
   
$
4,412
   
$
194
   
$
   
$
   
$
410,579
 
                                                                         
Commercial real estate:
                                                                       
Residential developed
   
     
     
     
4,094
     
     
     
     
     
4,094
 
Unsecured to residential developers
   
     
     
     
     
     
     
     
     
 
Vacant and unimproved
   
     
1,708
     
15,804
     
18,400
     
     
     
     
     
35,912
 
Commercial development
   
     
     
112
     
     
     
     
     
     
112
 
Residential improved
   
     
     
22,706
     
80,141
     
33
     
     
5
     
     
102,885
 
Commercial improved
   
     
18,166
     
68,671
     
164,785
     
6,740
     
314
     
     
     
258,676
 
Manufacturing & industrial
   
     
3,361
     
36,259
     
74,523
     
3,281
     
     
     
     
117,424
 
   
$
17,825
   
$
34,912
   
$
289,354
   
$
572,612
   
$
14,466
   
$
508
   
$
5
   
$
   
$
929,682
 


December 31, 2021
    1
      2
      3       4
      5
      6
      7
      8
   
Total
 
Commercial and industrial
 
$
56,979
   
$
19,300
   
$
110,877
   
$
227,087
   
$
2,700
   
$
3,314
   
$
   
$
   
$
420,257
 
                                                                         
Commercial real estate:
                                                                       
Residential developed
   
     
     
     
4,862
     
     
     
     
     
4,862
 
Unsecured to residential developers                       5,000                               5,000  
Vacant and unimproved
   
     
1,763
     
13,492
     
20,985
     
     
     
     
     
36,240
 
Commercial development
   
     
     
171
     
     
     
     
     
     
171
 
Residential improved
   
     
     
24,450
     
75,503
     
119
     
     
5
     
     
100,077
 
Commercial improved
   
     
15,115
     
71,211
     
165,268
     
7,127
     
318
     
     
     
259,039
 
Manufacturing & industrial
   
     
     
41,757
     
65,601
     
3,354
     
     
     
     
110,712
 
   
$
56,979
   
$
36,178
   
$
261,958
   
$
564,306
   
$
13,300
   
$
3,632
   
$
5
   
$
   
$
936,358
 
Commercial Loans Classified as Substandard or Worse

Commercial loans rated a 6 or worse per the Company’s internal risk rating system are considered substandard, doubtful or loss. Commercial loans classified as substandard or worse were as follows at period-end (dollars in thousands):


   
June 30,
2022
   
December 31,
2021
 
Not classified as impaired
 
$
108
   
$
233
 
Classified as impaired
   
405
     
3,404
 
Total commercial loans classified substandard or worse
 
$
513
   
$
3,637
 
Recorded Investment in Consumer Loans Based on Payment Activity

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in consumer loans based on payment activity (dollars in thousands):


June 30, 2022
 
Residential
Mortgage
   
Consumer
Unsecured
   
Home
Equity
   
Consumer
Other
 
Performing
 
$
125,686
   
$
168
   
$
52,671
   
$
3,623
 
Nonperforming
   
85
     
     
     
 
Total
 
$
125,771
   
$
168
   
$
52,671
   
$
3,623
 

NOTE 3 –  LOANS (Continued)

December 31, 2021
 
Residential
Mortgage
   
Consumer
Unsecured
   
Home
Equity
   
Consumer
Other
 
Performing
 
$
117,716
   
$
210
   
$
51,269
   
$
3,356
 
Nonperforming
   
84
     
     
     
 
Total
 
$