Total deposits increased slightly from $612,043,000 as of December 31, 2018 to
$617,184,000 on June 30, 2019, an increase of 0.84%. The increase resulted in large part from increases in NOW, money market, and savings accounts, and was partially offset by a decreases in
non-interest-bearing
demand deposits and time deposits. Noninterest bearing demand deposits decreased slightly from $91,356,000 on December 31, 2018 to $88,897,000 on June 30, 2019. Time deposits
decreased slightly from $189,389,000 on December 31, 2018 to $185,903,000 on June 30, 2019. This decrease in time deposits was primarily due to managements decision to use surplus cash to pay back a $10,044,000 brokered certificate
of deposit.
Total loans, excluding loans held for sale, increased to $556,698,000 on June 30, 2019 from $534,597,000 on
December 31, 2018. Loans, excluding loans held for sale and net of deferred fees and costs and the allowance for loan losses, increased to $551,974,000 on June 30, 2019 from $530,016,000 on December 31, 2018, an increase of 4.14%. The
following summarizes the position of the Banks loan portfolio as of the dates indicated by dollar amount and percentages (dollar amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
|
December 31, 2018
|
|
|
|
Amount
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
Commercial
|
|
$
|
106,178
|
|
|
|
19.07
|
%
|
|
$
|
92,877
|
|
|
|
17.37
|
%
|
Commercial Real Estate
|
|
|
298,163
|
|
|
|
53.56
|
%
|
|
|
289,171
|
|
|
|
54.10
|
%
|
Consumer
|
|
|
83,314
|
|
|
|
14.97
|
%
|
|
|
86,191
|
|
|
|
16.12
|
%
|
Residential
|
|
|
69,043
|
|
|
|
12.40
|
%
|
|
|
66,358
|
|
|
|
12.41
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans
|
|
$
|
556,698
|
|
|
|
100.00
|
%
|
|
$
|
534,597
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets, which consist of
non-accrual
loans, loans
past due 90 days or more and still accruing, and other real estate owned (OREO) increased to $5,898,000 on June 30, 2019 from $5,369,000 on December 31, 2018. OREO decreased to $2,413,000 on June 30, 2019 from $2,430,000
on December 31, 2018. This slight decrease was due in large part to a downward adjustment of the carrying value of certain OREO resulting from a change in appraised value and the Banks ability to sell OREO properties during the six months
ended June 30, 2019 and was offset in part by new foreclosures during the period.
Non-performing
loans increased from $2,939,000 at December 31, 2018 to $3,485,000 at June 30, 2019. As discussed
in more detail below under Results of OperationsAllowance for Loan Losses, management has provided for the anticipated losses on these loans in the allowance for loan losses. Loan payments received on
non-accrual
loans are first applied to principal. When a loan is placed on
non-accrual
status there are several negative implications. First, all interest accrued but
unpaid at the time of the classification is reversed and deducted from the interest income totals for the Bank. Second, accruals of interest are discontinued until it becomes certain that both principal and interest can be repaid. Third, there may
be actual losses that necessitate additional provisions for loan losses charged against earnings.
OREO represents real property acquired
by the Bank for debts previously contracted, including through foreclosure or deeds in lieu of foreclosure. On December 31, 2018, the Bank was carrying ten OREO properties on its books at a value of $2,430,000. During the six months ended
June 30, 2019, the Bank acquired 4 additional OREO properties and disposed of 4 OREO properties, and as of June 30, 2019 the Bank is carrying 10 OREO properties at a value of $2,413,000. The OREO properties are available for sale and are
being actively marketed.
The Bank had loans in the amount of $418,000 at June 30, 2019 classified as performing Troubled Debt
Restructurings (TDRs) as compared to $424,000 at December 31, 2018. None of these TDRs were included in
non-accrual
loans. These loans have had their original terms modified to facilitate
payment by the borrower. The loans have been classified as TDRs primarily due to a change to interest only payments and the maturity of these modified loans is primarily less than one year.
38