Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2018

Loans and Allowance for Credit Losses [Abstract]

The following table provides information about the principal classes of the loan portfolio at March 31, 2018 and December 31, 2017.


(Dollars in thousands)	March 31, 2018		December 31, 2017
Construction	$	130,455	$	125,746
Residential real estate		401,359		399,190
Commercial real estate		477,805		464,887
Commercial		104,266		97,284
Consumer		6,052		6,407
Total loans		1,119,937		1,093,514
Allowance for credit losses		(9,918)		(9,781)
Total loans, net	$	1,110,019	$	1,083,733

Allowance for Credit Losses on Financing Receivables

The following tables include impairment information relating to loans and the allowance for credit losses as of March 31, 2018 and December 31, 2017.


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
March 31, 2018
Loans individually
evaluated for impairment	$	3,977	$	5,969	$	6,426	$	363	$	-	$	16,735
Loans collectively
evaluated for impairment		126,478		395,390		471,379		103,903		6,052		1,103,202
Total loans	$	130,455	$	401,359	$	477,805	$	104,266	$	6,052	$	1,119,937

Allowance for credit
losses allocated to:
Loans individually
evaluated for impairment	$	469	$	237	$	36	$	59	$	-	$	801
Loans collectively
evaluated for impairment		2,072		2,122		2,607		2,099		217		9,117
Total allowance	$	2,541	$	2,359	$	2,643	$	2,158	$	217	$	9,918


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
December 31, 2017
Loans individually
evaluated for impairment	$	6,975	$	6,018	$	4,967	$	337	$	-	$	18,297
Loans collectively
evaluated for impairment		118,771		393,172		459,920		96,947		6,407		1,075,217
Total loans	$	125,746	$	399,190	$	464,887	$	97,284	$	6,407	$	1,093,514

Allowance for credit
losses allocated to:
Loans individually
evaluated for impairment	$	500	$	239	$	33	$	33	$	-	$	805
Loans collectively
evaluated for impairment		1,960		2,045		2,561		2,208		202		8,976
Total allowance	$	2,460	$	2,284	$	2,594	$	2,241	$	202	$	9,781

Impaired Financing Receivables

The following tables provide information on impaired loans and any related allowance by loan class as of March 31, 2018 and December 31, 2017. The difference between the unpaid principal balance and the recorded investment is the amount of partial charge-offs that have been taken.


				Recorded		Recorded			March 31, 2018
	Unpaid			investment		investment			Average		Interest
	principal			with no		with an	Related		recorded		income
(Dollars in thousands)	balance			allowance		allowance	allowance		investment		recognized
March 31, 2018
Impaired nonaccrual loans:
Construction	$	3,092	$	181	$	2,806	$	428	$	2,989	$	-
Residential real estate		2,122		1,096		703		14		1,625		-
Commercial real estate		2,506		1,860		-		-		720		-
Commercial		455		-		363		59		345		-
Consumer		-		-		-		-		-		-
Total	$	8,175	$	3,137	$	3,872	$	501	$	5,679	$	-

Impaired accruing TDRs:
Construction	$	990	$	57	$	933	$	41	$	2,977	$	13
Residential real estate		4,170		1,805		2,365		223		4,292		46
Commercial real estate		4,566		3,839		727		36		4,650		41
Commercial		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	9,726	$	5,701	$	4,025	$	300	$	11,919	$	100

Total impaired loans:
Construction	$	4,082	$	238	$	3,739	$	469	$	5,966	$	13
Residential real estate		6,292		2,901		3,068		237		5,917		46
Commercial real estate		7,072		5,699		727		36		5,370		41
Commercial		455		-		363		59		345		-
Consumer		-		-		-		-		-		-
Total	$	17,901	$	8,838	$	7,897	$	801	$	17,598	$	100



				Recorded		Recorded			March 31, 2017
	Unpaid			investment		investment			Average		Interest
	principal			with no		with an	Related		recorded		income
(Dollars in thousands)	balance			allowance		allowance	allowance		investment		recognized
December 31, 2017
Impaired nonaccrual loans:
Construction	$	3,100	$	182	$	2,821	$	459	$	3,717	$	-
Residential real estate		1,620		1,482		-		-		4,010		-
Commercial real estate		795		149		-		-		721		-
Commercial		425		-		337		33		-		-
Consumer		-		-		-		-		99		-
Total	$	5,940	$	1,813	$	3,158	$	492	$	8,547	$	-

Impaired accruing TDRs:
Construction	$	3,972	$	3,038	$	934	$	41	$	4,182	$	30
Residential real estate		4,536		2,042		2,494		239		3,762		43
Commercial real estate		4,818		4,084		734		33		4,908		57
Commercial		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	13,326	$	9,164	$	4,162	$	313	$	12,852	$	130

Total impaired loans:
Construction	$	7,072	$	3,220	$	3,755	$	500	$	7,899	$	30
Residential real estate		6,156		3,524		2,494		239		7,772		43
Commercial real estate		5,613		4,233		734		33		5,629		57
Commercial		425		-		337		33		-		-
Consumer		-		-		-		-		99		-
Total	$	19,266	$	10,977	$	7,320	$	805	$	21,399	$	130

Troubled Debt Restructurings on Financing Receivables

The following tables provide a roll-forward for troubled debt restructurings as of March 31, 2018 and March 31, 2017.


	1/1/2018												3/31/2018
	TDR		New		Disbursements		Charge		Reclassifications/				TDR		Related
(Dollars in thousands)	Balance		TDRs		(Payments)		offs		Transfer In/(Out)		Payoffs		Balance		Allowance
For three months ended
March 31, 2018
Accruing TDRs
Construction	$	3,972	$	-	$	(3)	$	(379)	$	-	$	(2,600)	$	990	$	41
Residential real estate		4,536		-		(25)		-		(154)		(187)		4,170		223
Commercial real estate		4,818		-		(33)		-		-		(219)		4,566		36
Commercial		-		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-		-
Total	$	13,326	$	-	$	(61)	$	(379)	$	(154)	$	(3,006)	$	9,726	$	300

Nonaccrual TDRs
Construction	$	2,878	$	-	$	(16)	$	-	$	-	$	-	$	2,862	$	428
Residential real estate		-		-		-		-		154		-		154		-
Commercial real estate		83		-		-		-		-		-		83		-
Commercial		337		-		(4)		-		-		-		333		29
Consumer		-		-		-		-		-		-		-		-
Total	$	3,298	$	-	$	(20)	$	-	$	154	$	-	$	3,432	$	457

Total	$	16,624	$	-	$	(81)	$	(379)	$	-	$	(3,006)	$	13,158	$	757


	1/1/2017												3/31/2017
	TDR		New		Disbursements		Charge		Reclassifications/				TDR		Related
(Dollars in thousands)	Balance		TDRs		(Payments)		offs		Transfer In/(Out)		Payoffs		Balance		Allowance
For three months ended
March 31, 2017
Accruing TDRs
Construction	$	4,189	$	-	$	(10)	$	-	$	-	$	-	$	4,179	$	17
Residential real estate		3,875		-		(82)		(89)		-		-		3,704		148
Commercial real estate		4,936		-		(37)		-		-		-		4,899		84
Commercial		-		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-		-
Total	$	13,000	$	-	$	(129)	$	(89)	$	-	$	-	$	12,782	$	249

Nonaccrual TDRs
Construction	$	3,818	$	-	$	(190)	$	-	$	-	$	-	$	3,628	$	666
Residential real estate		1,603		-		(22)		-		-		-		1,581		134
Commercial real estate		83		-		-		-		-		-		83		-
Commercial		-		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-		-
Total	$	5,504	$	-	$	(212)	$	-	$	-	$	-	$	5,292	$	800

Total	$	18,504	$	-	$	(341)	$	(89)	$	-	$	-	$	18,074	$	1,049

The following tables provide information on loans that were modified and considered TDRs during the three months ended March 31, 2018 and March 31, 2017.


		Premodification		Postmodification
		outstanding		outstanding
	Number of	recorded		recorded		Related
(Dollars in thousands)	contracts	investment		investment		allowance
TDRs:
For three months ended
March 31, 2018
Construction	-	$	-	$	-	$	-
Residential real estate	-		-		-		-
Commercial real estate	-		-		-		-
Commercial	-		-		-		-
Consumer	-		-		-		-
Total	-	$	-	$	-	$	-

For three months ended
March 31, 2017
Construction	-	$	-	$	-	$	-
Residential real estate	-		-		-		-
Commercial real estate	1		760		755		-
Commercial	-		-		-		-
Consumer	-		-		-		-
Total	1	$	760	$	755	$	-

During the three months ended March 31, 2018, there were no new TDR’s or previously recorded TDR’s which were modified.

The following tables provide information on TDRs that defaulted within twelve months of restructuring during the three months ended March 31, 2018 and March 31, 2017. Generally, a loan is considered in default when principal or interest is past due 90 days or more, the loan is placed on nonaccrual, 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 three months ended
March 31, 2018
Construction	1	$	379	$	-
Residential real estate	1		154		-
Commercial real estate	-		-		-
Commercial	-		-		-
Consumer	-		-		-
Total	2	$	533	$	-

For three months ended
March 31, 2017
Construction	-	$	-	$	-
Residential real estate	1		89		-
Commercial real estate	-		-		-
Commercial	-		-		-
Consumer	-		-		-
Total	1	$	89	$	-

Financing Receivable Credit Quality Indicators

The following tables provide information on loan risk ratings as of March 31, 2018 and December 31, 2017.


					Special
(Dollars in thousands)	Pass/Performing		Pass/Watch		Mention		Substandard		Doubtful		Total
March 31, 2018
Construction	$	95,124	$	32,090	$	-	$	3,241	$	-	$	130,455
Residential real estate		358,433		34,517		4,106		4,303		-		401,359
Commercial real estate		358,804		106,099		4,855		8,047		-		477,805
Commercial		76,772		26,764		303		427		-		104,266
Consumer		5,180		872		-		-		-		6,052
Total	$	894,313	$	200,342	$	9,264	$	16,018	$	-	$	1,119,937


					Special
(Dollars in thousands)	Pass/Performing		Pass/Watch		Mention		Substandard		Doubtful		Total
December 31, 2017
Construction	$	88,836	$	30,674	$	-	$	6,236	$	-	$	125,746
Residential real estate		355,575		34,973		4,456		4,186		-		399,190
Commercial real estate		342,051		109,041		7,420		6,375		-		464,887
Commercial		72,440		24,102		308		434		-		97,284
Consumer		5,260		1,147		-		-		-		6,407
Total	$	864,162	$	199,937	$	12,184	$	17,231	$	-	$	1,093,514

Past Due Financing Receivables

The following tables provide information on the aging of the loan portfolio as of March 31, 2018 and December 31, 2017.


		Accruing
				30-59 days			60-89 days			Greater than			Total
(Dollars in thousands)	Current			past due			past due			90 days			past due			Nonaccrual			Total
March 31, 2018
Construction	$	127,220		$	229		$	19		$	-		$	248		$	2,987		$	130,455
Residential real estate		396,981			1,310			1,208			61			2,579			1,799			401,359
Commercial real estate		473,594			827			1,524			-			2,351			1,860			477,805
Commercial		103,433			120			350			-			470			363			104,266
Consumer		6,047			3			2			-			5			-			6,052
Total	$	1,107,275		$	2,489		$	3,103		$	61		$	5,653		$	7,009		$	1,119,937
Percent of total loans		98.9	%		0.2	%		0.3	%		-	%		0.5	%		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, 2017
Construction	$	122,475		$	268		$	-		$	-		$	268		$	3,003		$	125,746
Residential real estate		394,653			1,589			1,045			421			3,055			1,482			399,190
Commercial real estate		460,998			1,061			2,461			218			3,740			149			464,887
Commercial		96,774			173			-			-			173			337			97,284
Consumer		6,395			6			6			-			12			-			6,407
Total	$	1,081,295		$	3,097		$	3,512		$	639		$	7,248		$	4,971		$	1,093,514
Percent of total loans		98.8	%		0.3	%		0.3	%		0.1	%		0.7	%		0.5	%		100.0	%

Consolidated Allowance for Credit Losses on Financing Receivables

The following tables provide a summary of the activity in the allowance for credit losses allocated by loan class for March 31, 2018 and March 31, 2017. Allocation of a portion of the allowance to one loan class does not preclude its availability to absorb losses in other loan classes.


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Unallocated		Total
For three months ended
March 31, 2018
Allowance for credit losses:
Beginning Balance	$	2,460	$	2,284	$	2,594	$	2,241	$	202	$	-	$	9,781

Charge-offs		(379)		(138)		-		-		(10)		-		(527)
Recoveries		9		13		10		143		-		-		175
Net charge-offs		(370)		(125)		10		143		(10)		-		(352)

Provision		451		200		39		(226)		25		-		489
Ending Balance	$	2,541	$	2,359	$	2,643	$	2,158	$	217	$	-	$	9,918


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Unallocated		Total
For three months ended
March 31, 2017
Allowance for credit losses:
Beginning Balance	$	2,787	$	1,953	$	2,610	$	1,145	$	231	$	-	$	8,726

Charge-offs		(29)		(223)		-		(65)		-		-		(317)
Recoveries		7		11		11		58		4		-		91
Net charge-offs		(22)		(212)		11		(7)		4		-		(226)

Provision		(475)		390		291		200		21		-		427
Ending Balance	$	2,290	$	2,131	$	2,912	$	1,338	$	256	$	-	$	8,927

Foreclosure Proceedings

Consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure totaled $654 thousand and $530 thousand as of March 31, 2018 and December 31, 2017, respectively. There were no residential properties included in the balance of other real estate owned at March 31, 2018 or December 31, 2017.

All TDRs were in compliance with their modified terms and there are no further commitments associated with these loans as of March 31, 2018 and December 31, 2017.