Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2017

Loans and Allowance for Credit Losses [Abstract]

The following table provides information about the principal classes of the loan portfolio at September 30, 2017 and December 31, 2016.


(Dollars in thousands)	September 30, 2017		December 31, 2016
Construction	$	106,617	$	84,002
Residential real estate		387,722		325,768
Commercial real estate		454,626		382,681
Commercial		91,799		72,435
Consumer		6,483		6,639
Total loans		1,047,247		871,525
Allowance for credit losses		(9,295)		(8,726)
Total loans, net	$	1,037,952	$	862,799

Allowance for Credit Losses on Financing Receivables

The following tables include impairment information relating to loans and the allowance for credit losses as of September 30, 2017 and December 31, 2016.


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
September 30, 2017
Loans individually
evaluated for impairment	$	6,986	$	7,190	$	5,265	$	341	$	-	$	19,782
Loans collectively
evaluated for impairment		99,631		380,532		449,361		91,458		6,483		1,027,465
Total loans	$	106,617	$	387,722	$	454,626	$	91,799	$	6,483	$	1,047,247

Allowance for credit
losses allocated to:
Loans individually
evaluated for impairment	$	589	$	251	$	35	$	-	$	-	$	875
Loans collectively
evaluated for impairment		1,652		1,792		2,849		1,804		323		8,420
Total allowance	$	2,241	$	2,043	$	2,884	$	1,804	$	323	$	9,295


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
December 31, 2016
Loans individually
evaluated for impairment	$	8,007	$	7,778	$	6,088	$	-	$	99	$	21,972
Loans collectively
evaluated for impairment		75,995		317,990		376,593		72,435		6,540		849,553
Total loans	$	84,002	$	325,768	$	382,681	$	72,435	$	6,639	$	871,525

Allowance for credit
losses allocated to:
Loans individually
evaluated for impairment	$	1,639	$	317	$	185	$	-	$	-	$	2,141
Loans collectively
evaluated for impairment		1,148		1,636		2,425		1,145		231		6,585
Total allowance	$	2,787	$	1,953	$	2,610	$	1,145	$	231	$	8,726

Impaired Financing Receivables

The following tables provide information on impaired loans and any related allowance by loan class as of September 30, 2017 and December 31, 2016. The difference between the unpaid principal balance and the recorded investment is the amount of partial charge-offs that have been taken.


				Recorded		Recorded			Quarter-to-		Year-to-date
	Unpaid			investment		investment			date average		average		Interest
	principal			with no		with an	Related		recorded		recorded		income
(Dollars in thousands)	balance			allowance		allowance	allowance		investment		investment		recognized
September 30, 2017
Impaired nonaccrual loans:
Construction	$	3,035	$	125	$	2,828	$	548	$	2,890	$	3,253	$	-
Residential real estate		2,736		2,439		126		23		2,840		3,573		-
Commercial real estate		1,075		430		-		-		489		627		-
Commercial		425		341		-		-		344		153		-
Consumer		-		-		-		-		-		55		-
Total	$	7,271	$	3,335	$	2,954	$	571	$	6,563	$	7,661	$	-

Impaired accruing TDRs:
Construction	$	4,033	$	3,098	$	935	$	41	$	4,034	$	4,086	$	82
Residential real estate		4,625		2,190		2,435		228		3,691		3,620		117
Commercial real estate		4,835		4,094		741		35		4,841		4,872		145
Commercial		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total	$	13,493	$	9,382	$	4,111	$	304	$	12,566	$	12,578	$	344

Total impaired loans:
Construction	$	7,068	$	3,223	$	3,763	$	589	$	6,924	$	7,339	$	82
Residential real estate		7,361		4,629		2,561		251		6,531		7,193		117
Commercial real estate		5,910		4,524		741		35		5,330		5,499		145
Commercial		425		341		-		-		344		153		-
Consumer		-		-		-		-		-		55		-
Total	$	20,764	$	12,717	$	7,065	$	875	$	19,129	$	20,239	$	344


									September 30, 2016
				Recorded		Recorded			Quarter-to-		Year-to-date
	Unpaid			investment		investment			date average		average		Interest
	principal			with no		with an	Related		recorded		recorded		income
(Dollars in thousands)	balance			allowance		allowance	allowance		investment		investment		recognized
December 31, 2016
Impaired nonaccrual loans:
Construction	$	7,247	$	-	$	3,818	$	1,621	$	5,361	$	6,022	$	-
Residential real estate		4,013		1,957		1,946		166		4,012		3,406		-
Commercial real estate		1,801		959		193		117		2,177		2,265		-
Commercial		-		-		-		-		108		143		-
Consumer		99		99		-		-		99		109		-
Total	$	13,160	$	3,015	$	5,957	$	1,904	$	11,757	$	11,945	$	-

Impaired accruing TDRs:
Construction	$	4,189	$	3,479	$	710	$	18	$	4,213	$	4,166	$	74
Residential real estate		3,875		2,829		1,046		151		4,100		4,900		149
Commercial real estate		4,936		1,573		3,363		68		4,982		5,137		127
Commercial		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-
Total	$	13,000	$	7,881	$	5,119	$	237	$	13,295	$	14,203	$	350

Total impaired loans:
Construction	$	11,436	$	3,479	$	4,528	$	1,639	$	9,574	$	10,188	$	74
Residential real estate		7,888		4,786		2,992		317		8,112		8,306		149
Commercial real estate		6,737		2,532		3,556		185		7,159		7,402		127
Commercial		-		-		-		-		108		143		-
Consumer		99		99		-		-		99		109		-
Total	$	26,160	$	10,896	$	11,076	$	2,141	$	25,052	$	26,148	$	350

Troubled Debt Restructurings on Financing Receivables

The following tables provide a roll-forward for troubled debt restructurings as of September 30, 2017 and September 30, 2016.


	1/1/2017												9/30/2017
	TDR		New		Disbursements		Charge		Reclassifications/				TDR		Related
(Dollars in thousands)	Balance		TDRs		(Payments)		offs		Transfer In/(Out)		Payoffs		Balance		Allowance
For nine months ended
September 30, 2017
Accruing TDRs
Construction	$	4,189	$	-	$	(22)	$	-	$	-	$	(134)	$	4,033	$	41
Residential real estate		3,875		-		(120)		(89)		1,411		(452)		4,625		228
Commercial real estate		4,936		-		(101)		-		-		-		4,835		35
Commercial		-		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-		-
Total	$	13,000	$	-	$	(243)	$	(89)	$	1,411	$	(586)	$	13,493	$	304

Nonaccrual TDRs
Construction	$	3,818	$	-	$	(882)	$	-	$	(108)	$	-	$	2,828	$	548
Residential real estate		1,603		-		(66)		-		(1,411)		-		126		23
Commercial real estate		83		-		-		-		-		-		83		-
Commercial		-		345		(4)		-		-		-		341		-
Consumer		-		-		-		-		-		-		-		-
Total	$	5,504	$	345	$	(952)	$	-	$	(1,519)	$	-	$	3,378	$	571

Total	$	18,504	$	345	$	(1,195)	$	(89)	$	(108)	$	(586)	$	16,871	$	875


	1/1/2016												9/30/2016
	TDR		New		Disbursements		Charge		Reclassifications/				TDR		Related
(Dollars in thousands)	Balance		TDRs		(Payments)		offs		Transfer In/(Out)		Payoffs		Balance		Allowance
For nine months ended
September 30, 2016
Accruing TDRs
Construction	$	4,069	$	-	$	130	$	-	$	-	$	-	$	4,199	$	21
Residential real estate		5,686		565		(375)		-		(1,595)		(179)		4,102		154
Commercial real estate		5,740		495		(689)		(117)		(458)		-		4,971		89
Commercial		-		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-		-
Total	$	15,495	$	1,060	$	(934)	$	(117)	$	(2,053)	$	(179)	$	13,272	$	264

Nonaccrual TDRs
Construction	$	4,960	$	2,570	$	(2,012)	$	(263)	$	-	$	-	$	5,255	$	810
Residential real estate		445		-		(294)		-		1,595		-		1,746		25
Commercial real estate		-		-		-		(258)		458		-		200		112
Commercial		-		-		-		-		-		-		-		-
Consumer		23		-		(23)		-		-		-		-		-
Total	$	5,428	$	2,570	$	(2,329)	$	(521)	$	2,053	$	-	$	7,201	$	947

Total	$	20,923	$	3,630	$	(3,263)	$	(638)	$	-	$	(179)	$	20,473	$	1,211

The following tables provide information on loans that were modified and considered TDRs during the nine months ended September 30, 2017 and September 30, 2016.


		Premodification		Postmodification
		outstanding		outstanding
	Number of	recorded		recorded		Related
(Dollars in thousands)	contracts	investment		investment		allowance
TDRs:
For nine months ended
September 30, 2017
Construction	-	$	-	$	-	$	-
Residential real estate	-		-		-		-
Commercial real estate	1		760		755		-
Commercial	1		462		345		-
Consumer	-		-		-		-
Total	2	$	1,222	$	1,100	$	-

For nine months ended
September 30, 2016
Construction	-	$	-	$	-	$	-
Residential real estate	3		667		699		-
Commercial real estate	1		495		495		-
Commercial	-		-		-		-
Consumer	-		-		-		-
Total	4	$	1,162	$	1,194	$	-

During the nine months ended September 30, 2017, there was one new TDR and one previously recorded TDR which was modified. The new TDR consisted of a reduction in principal, whereas, the previously recorded TDR consisted of a change in maturity date.

The following tables provide information on TDRs that defaulted within twelve months of restructuring during the nine months ended September 30, 2017 and September 30, 2016. Generally, a loan is considered in default when principal or interest is past due 90 days or more, the loan is charged off, or there is a transfer to OREO or repossessed assets.


	Number of	Recorded		Related
(Dollars in thousands)	contracts	investment		allowance
TDRs that subsequently defaulted:
For nine months ended
September 30, 2017
Construction	-	$	-	$	-
Residential real estate	1		89		-
Commercial real estate	-		-		-
Commercial	-		-		-
Consumer	-		-		-
Total	1	$	89	$	-

For nine months ended
September 30, 2016
Construction	1	$	263	$	-
Residential real estate	-		-		-
Commercial real estate	2		375		-
Commercial	-		-		-
Consumer	-		-		-
Total	3	$	638	$	-

Financing Receivable Credit Quality Indicators

The following tables provide information on loan risk ratings as of September 30, 2017 and December 31, 2016.


			Special
(Dollars in thousands)	Pass/Performing		Mention		Substandard		Doubtful		Total
September 30, 2017
Construction	$	97,304	$	3,127	$	6,186	$	-	$	106,617
Residential real estate		376,600		5,509		5,613		-		387,722
Commercial real estate		438,694		6,780		9,152		-		454,626
Commercial		90,680		660		459		-		91,799
Consumer		6,483		-		-		-		6,483
Total	$	1,009,761	$	16,076	$	21,410	$	-	$	1,047,247


			Special
(Dollars in thousands)	Pass/Performing		Mention		Substandard		Doubtful		Total
December 31, 2016
Construction	$	72,641	$	4,195	$	7,166	$	-	$	84,002
Residential real estate		312,242		6,646		6,880		-		325,768
Commercial real estate		363,461		10,939		8,281		-		382,681
Commercial		71,313		857		265		-		72,435
Consumer		6,540		-		99		-		6,639
Total	$	826,197	$	22,637	$	22,691	$	-	$	871,525

Past Due Financing Receivables

The following tables provide information on the aging of the loan portfolio as of September 30, 2017 and December 31, 2016.


		Accruing
				30-59 days			60-89 days			Greater than			Total
(Dollars in thousands)	Current			past due			past due			90 days			past due			Nonaccrual			Total
September 30, 2017
Construction	$	103,606		$	58		$	-		$	-		$	58		$	2,953		$	106,617
Residential real estate		383,913			572			667			5			1,244			2,565			387,722
Commercial real estate		451,789			2,407			-			-			2,407			430			454,626
Commercial		91,225			202			31			-			233			341			91,799
Consumer		6,478			-			5			-			5			-			6,483
Total	$	1,037,011		$	3,239		$	703		$	5		$	3,947		$	6,289		$	1,047,247
Percent of total loans		99.0	%		0.3	%		0.1	%		-	%		0.4	%		0.6	%		100.0	%


		Accruing
				30-59 days			60-89 days			Greater than			Total
(Dollars in thousands)	Current			past due			past due			90 days			past due			Nonaccrual			Total
December 31, 2016
Construction	$	80,079		$	-		$	105		$	-		$	105		$	3,818		$	84,002
Residential real estate		317,992			1,778			2,095			-			3,873			3,903			325,768
Commercial real estate		375,552			3,219			2,758			-			5,977			1,152			382,681
Commercial		72,272			19			134			10			163			-			72,435
Consumer		6,515			13			2			10			25			99			6,639
Total	$	852,410		$	5,029		$	5,094		$	20		$	10,143		$	8,972		$	871,525
Percent of total loans		97.8	%		0.6	%		0.6	%		-	%		1.2	%		1.0	%		100.0	%

Consolidated Allowance for Credit Losses on Financing Receivables


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Unallocated		Total
For three months ended
September 30, 2017
Allowance for credit losses:
Beginning Balance	$	2,349	$	2,096	$	2,802	$	1,652	$	233	$	-	$	9,132

Charge-offs		-		(70)		(100)		(99)		(18)		-		(287)
Recoveries		11		11		8		67		8		-		105
Net charge-offs		11		(59)		(92)		(32)		(10)		-		(182)

Provision		(119)		6		174		184		100		-		345
Ending Balance	$	2,241	$	2,043	$	2,884	$	1,804	$	323	$	-	$	9,295


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Unallocated		Total
For three months ended
September 30, 2016
Allowance for credit losses:
Beginning Balance	$	1,744	$	2,035	$	2,871	$	677	$	206	$	825	$	8,358

Charge-offs		(9)		(407)		-		(139)		(13)		-		(568)
Recoveries		8		121		10		79		1		-		219
Net charge-offs		(1)		(286)		10		(60)		(12)		-		(349)

Provision		275		331		306		300		(40)		(567)		605
Ending Balance	$	2,018	$	2,080	$	3,187	$	917	$	154	$	258	$	8,614



			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Unallocated		Total
For nine months ended
September 30, 2017
Allowance for credit losses:
Beginning Balance	$	2,787	$	1,953	$	2,610	$	1,145	$	231	$	-	$	8,726

Charge-offs		(54)		(393)		(100)		(870)		(33)		-		(1,450)
Recoveries		27		32		27		167		20		-		273
Net charge-offs		(27)		(361)		(73)		(703)		(13)		-		(1,177)

Provision		(519)		451		347		1,362		105		-		1,746
Ending Balance	$	2,241	$	2,043	$	2,884	$	1,804	$	323	$	-	$	9,295



			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Unallocated		Total
For nine months ended
September 30, 2016
Allowance for credit losses:
Beginning Balance	$	1,646	$	2,181	$	2,999	$	558	$	156	$	776	$	8,316

Charge-offs		(263)		(525)		(503)		(264)		(23)		-		(1,578)
Recoveries		24		188		20		201		13		-		446
Net charge-offs		(239)		(337)		(483)		(63)		(10)		-		(1,132)

Provision		611		236		671		422		8		(518)		1,430
Ending Balance	$	2,018	$	2,080	$	3,187	$	917	$	154	$	258	$	8,614