Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2018

Loans and Allowance for Credit Losses [Abstract]

The following table provides information about the principal classes of the loan portfolio at September 30, 2018 and December 31, 2017.


(Dollars in thousands)	September 30, 2018		December 31, 2017
Construction	$	126,313	$	125,746
Residential real estate		425,842		399,190
Commercial real estate		513,169		464,887
Commercial		108,823		97,284
Consumer		6,410		6,407
Total loans		1,180,557		1,093,514
Allowance for credit losses		(10,328)		(9,781)
Total loans, net	$	1,170,229	$	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 September 30, 2018 and December 31, 2017.


			Residential		Commercial
(Dollars in thousands)	Construction		real estate		real estate		Commercial		Consumer		Total
September 30, 2018
Loans individually
evaluated for impairment	$	3,104	$	6,931	$	5,936	$	324	$	-	$	16,295
Loans collectively
evaluated for impairment		123,209		418,911		507,233		108,499		6,410		1,164,262
Total loans	$	126,313	$	425,842	$	513,169	$	108,823	$	6,410	$	1,180,557

Allowance for credit
losses allocated to:
Loans individually
evaluated for impairment	$	375	$	194	$	32	$	20	$	-	$	621
Loans collectively
evaluated for impairment		2,409		1,947		2,905		2,190		256		9,707
Total allowance	$	2,784	$	2,141	$	2,937	$	2,210	$	256	$	10,328


			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 September 30, 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 and interest paid on nonaccrual loans that has been applied to principal.


									September 30, 2018
				Recorded		Recorded				Quarter-to-date	Year-to-date
	Unpaid			investment		investment			average		average
	principal			with no		with an	Related		recorded		recorded
(Dollars in thousands)	balance			allowance		allowance	allowance		investment		investment
September 30, 2018
Impaired nonaccrual loans:
Construction	$	3,409	$	284	$	2,748	$	356	$	3,043	$	3,006
Residential real estate		2,399		2,267		-		-		1,710		1,573
Commercial real estate		2,155		1,739		-		-		1,742		1,438
Commercial		425		-		324		20		327		338
Consumer		-		-		-		-		-		-
Total	$	8,388	$	4,290	$	3,072	$	376	$	6,822	$	6,355

Impaired accruing TDRs:
Construction	$	72	$	53	$	19	$	19	$	145	$	1,138
Residential real estate		4,664		1,635		3,029		194		4,709		4,613
Commercial real estate		4,197		3,485		712		32		4,307		4,499
Commercial		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	8,933	$	5,173	$	3,760	$	245	$	9,161	$	10,250

Total impaired loans:
Construction	$	3,481	$	337	$	2,767	$	375	$	3,188	$	4,144
Residential real estate		7,063		3,902		3,029		194		6,419		6,186
Commercial real estate		6,352		5,224		712		32		6,049		5,937
Commercial		425		-		324		20		327		338
Consumer		-		-		-		-		-		-
Total	$	17,321	$	9,463	$	6,832	$	621	$	15,983	$	16,605


									September 30, 2017
				Recorded		Recorded				Quarter-to-date	Year-to-date
	Unpaid			investment		investment			average		average
	principal			with no		with an	Related		recorded		recorded
(Dollars in thousands)	balance			allowance		allowance	allowance		investment		investment
December 31, 2017
Impaired nonaccrual loans:
Construction	$	3,100	$	182	$	2,821	$	459	$	2,890	$	3,253
Residential real estate		1,620		1,482		-		-		2,840		3,573
Commercial real estate		795		149		-		-		489		627
Commercial		425		-		337		33		344		153
Consumer		-		-		-		-		-		55
Total	$	5,940	$	1,813	$	3,158	$	492	$	6,563	$	7,661

Impaired accruing TDRs:
Construction	$	3,972	$	3,038	$	934	$	41	$	4,034	$	4,086
Residential real estate		4,536		2,042		2,494		239		3,691		3,620
Commercial real estate		4,818		4,084		734		33		4,841		4,872
Commercial		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	13,326	$	9,164	$	4,162	$	313	$	12,566	$	12,578

Total impaired loans:
Construction	$	7,072	$	3,220	$	3,755	$	500	$	6,924	$	7,339
Residential real estate		6,156		3,524		2,494		239		6,531		7,193
Commercial real estate		5,613		4,233		734		33		5,330		5,499
Commercial		425		-		337		33		344		153
Consumer		-		-		-		-		-		55
Total	$	19,266	$	10,977	$	7,320	$	805	$	19,129	$	20,239

Troubled Debt Restructurings on Financing Receivables

The following tables provide a roll-forward for troubled debt restructurings as of September 30, 2018 and September 30, 2017.


	1/1/2018												9/30/2018
	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, 2018
Accruing TDRs
Construction	$	3,972	$	-	$	(225)	$	(379)	$	(696)	$	(2,600)	$	72	$	19
Residential real estate		4,536		-		(63)		-		542		(351)		4,664		194
Commercial real estate		4,818		-		(402)		-		-		(219)		4,197		32
Commercial		-		-		-		-		-		-		-		-
Consumer		-		-		-		-		-		-		-		-
Total	$	13,326	$	-	$	(690)	$	(379)	$	(154)	$	(3,170)	$	8,933	$	245

Nonaccrual TDRs
Construction	$	2,878	$	-	$	(73)	$	-	$	83	$	-	$	2,888	$	356
Residential real estate		-		-		-		(80)		80		-		-		-
Commercial real estate		83		-		-		-		(83)		-		-		-
Commercial		337		-		(13)		-		-		-		324		20
Consumer		-		-		-		-		-		-		-		-
Total	$	3,298	$	-	$	(86)	$	(80)	$	80	$	-	$	3,212	$	376

Total	$	16,624	$	-	$	(776)	$	(459)	$	(74)	$	(3,170)	$	12,145	$	621


	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

The following tables provide information on loans that were modified and considered TDRs during the nine months ended September 30, 2018 and September 30, 2017.


		Premodification		Postmodification
		outstanding		outstanding
	Number of	recorded		recorded		Related
(Dollars in thousands)	contracts	investment		investment		allowance
TDRs:
For nine months ended
September 30, 2018
Construction	-	$	-	$	-	$	-
Residential real estate	-		-		-		-
Commercial real estate	-		-		-		-
Commercial	-		-		-		-
Consumer	-		-		-		-
Total	-	$	-	$	-	$	-

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	$	-

During the nine months ended September 30, 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 nine months ended September 30, 2018 and September 30, 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 nine months ended
September 30, 2018
Construction	1	$	379	$	-
Residential real estate	1		154		-
Commercial real estate	-		-		-
Commercial	-		-		-
Consumer	-		-		-
Total	2	$	533	$	-

For nine months ended
September 30, 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 September 30, 2018 and December 31, 2017.


					Special
(Dollars in thousands)	Pass/Performing		Pass/Watch		Mention		Substandard		Doubtful		Total
September 30, 2018
Construction	$	92,937	$	30,307	$	-	$	3,069	$	-	$	126,313
Residential real estate		382,280		35,793		3,433		4,336		-		425,842
Commercial real estate		384,759		115,459		5,604		7,347		-		513,169
Commercial		83,245		24,569		645		364		-		108,823
Consumer		5,898		509		-		3		-		6,410
Total	$	949,119	$	206,637	$	9,682	$	15,119	$	-	$	1,180,557


					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 September 30, 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
September 30, 2018
Construction	$	123,262		$	19		$	-		$	-		$	19		$	3,032		$	126,313
Residential real estate		421,384			1,707			484			-			2,191			2,267			425,842
Commercial real estate		508,781			723			1,926			-			2,649			1,739			513,169
Commercial		107,632			519			348			-			867			324			108,823
Consumer		6,399			4			4			3			11			-			6,410
Total	$	1,167,458		$	2,972		$	2,762		$	3		$	5,737		$	7,362		$	1,180,557
Percent of total loans		98.9	%		0.3	%		0.2	%		-	%		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 the three and nine months ended September 30, 2018 and September 30, 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
September 30, 2018
Allowance for credit losses:
Beginning Balance	$	2,593	$	2,150	$	2,845	$	2,210	$	323	$	-	$	10,121

Charge-offs		-		(109)		-		(137)		-		-		(246)
Recoveries		3		5		5		122		11		-		146
Net charge-offs		3		(104)		5		(15)		11		-		(100)

Provision		188		95		87		15		(78)		-		307
Ending Balance	$	2,784	$	2,141	$	2,937	$	2,210	$	256	$	-	$	10,328


			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 nine months ended
September 30, 2018
Allowance for credit losses:
Beginning Balance	$	2,460	$	2,284	$	2,594	$	2,241	$	202	$	-	$	9,781

Charge-offs		(379)		(288)		-		(263)		(24)		-		(954)
Recoveries		18		91		23		144		11		-		287
Net charge-offs		(361)		(197)		23		(119)		(13)		-		(667)

Provision		685		54		320		88		67		-		1,214
Ending Balance	$	2,784	$	2,141	$	2,937	$	2,210	$	256	$	-	$	10,328



			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