Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2014

Loans

The following table provides the components of the Company’s recorded investment in loans at June 30, 2014:

	Residential Real Estate		Land		Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	105,377	$	9,938	$	8,993	$	78,547		$	28,354		$	36,833	$	34,609	$	302,651
Accrued interest receivable		347		45		22		202			77			129		136		958
Net deferred loan origination fees and costs		59		2		0		(30	)		(9	)		390		0		412
Recorded investment in loans	$	105,783	$	9,985	$	9,015	$	78,719		$	28,422		$	37,352	$	34,745	$	304,021
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,446	$	113	$	0	$	2,671		$	1,864		$	96	$	0	$	6,190
Collectively evaluated for impairment		104,337		9,872		9,015		76,048			26,558			37,256		34,745		297,831
Acquired with deteriorated credit quality		0		0		0		0			0			0		0		0
Ending balance	$	105,783	$	9,985	$	9,015	$	78,719		$	28,422		$	37,352	$	34,745	$	304,021

The following table provides the components of the Company’s recorded investment in loans at December 31, 2013:

	Residential Real Estate		Land		Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	107,029	$	10,309	$	8,996	$	76,496		$	21,956		$	34,815	$	33,486	$	293,087
Accrued interest receivable		427		49		22		202			56			126		168		1,050
Net deferred loan origination fees and costs		52		2		0		(32	)		(9	)		328		0		341
Recorded investment in loans	$	107,508	$	10,360	$	9,018	$	76,666		$	22,003		$	35,269	$	33,654	$	294,478
Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	2,040	$	120	$	0	$	2,586		$	1,898		$	276	$	0	$	6,920
Collectively evaluated for impairment		105,468		10,240		9,018		74,080			20,105			34,993		33,654		287,558
Acquired with deteriorated credit quality		0		0		0		0			0			0		0		0
Ending balance	$	107,508	$	10,360	$	9,018	$	76,666		$	22,003		$	35,269	$	33,654	$	294,478

Allowance for Loan Losses

An analysis of the allowance for loan losses as of June 30, 2014 is as follows:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	61	$	0	$	0	$	107	$	1,226	$	0	$	0	$	1,394
Collectively evaluated for impairment		782		153		78		1,173		218		932		336		3,672
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	843	$	153	$	78	$	1,280	$	1,444	$	932	$	336	$	5,066

An analysis of the allowance for loan losses as of December 31, 2013 is as follows:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	112	$	0	$	0	$	145	$	1,259	$	13	$	0	$	1,529
Collectively evaluated for impairment		699		152		63		1,139		187		864		289		3,393
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0
Ending balance	$	811	$	152	$	63	$	1,284	$	1,446	$	877	$	289	$	4,922

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2014 is as follows:

	Residential Real Estate			Land		Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2014
Beginning balance	$	838		$	144	$	70	$	1,276		$	1,450		$	902		$	331		$	5,011
Provisions for loan losses		24			9		8		4			(10	)		41			14			90
Charge-offs		(21	)		0		0		0			0			(36	)		(36	)		(93	)
Recoveries		2			0		0		0			4			25			27			58
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066
Changes in Allowance for Loan Losses for the six-months ended June 30, 2014
Beginning balance	$	811		$	152	$	63	$	1,284		$	1,446		$	877		$	289		$	4,922
Provisions for loan losses		113			1		15		(4	)		(7	)		(70	)		67			115
Charge-offs		(84	)		0		0		0			0			(54	)		(88	)		(226	)
Recoveries		3			0		0		0			5			179			68			255
Ending balance	$	843		$	153	$	78	$	1,280		$	1,444		$	932		$	336		$	5,066

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2013 is as follows:

	Residential Real Estate			Land			Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2013
Beginning balance	$	940		$	69		$	50	$	1,291		$	1,226		$	886		$	330		$	4,792
Provisions for loan losses		24			6			10		89			33			9			54			225
Charge-offs		(99	)		(2	)		0		(89	)		0			(21	)		(65	)		(276	)
Recoveries		40			0			0		0			1			20			33			94
Ending balance	$	905		$	73		$	60	$	1,291		$	1,260		$	894		$	352		$	4,835
Changes in Allowance for Loan Losses for the six-months ended June 30, 2013
Beginning balance	$	922		$	71		$	0	$	1,310		$	1,223		$	919		$	291		$	4,736
Provisions for loan losses		236			4			60		56			(13	)		(24	)		156			475
Charge-offs		(297	)		(2	)		0		(89	)		0			(35	)		(171	)		(594	)
Recoveries		44			0			0		14			50			34			76			218
Ending balance	$	905		$	73		$	60	$	1,291		$	1,260		$	894		$	352		$	4,835

Impaired Loans

The following table summarizes the Company’s impaired loans as of June 30, 2014 and for the three months and six months ended June 30, 2014:

	At June 30, 2014						Three Months Ended June 30, 2014						Six Months Ended June 30, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method		Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,184	$	1,462	$	0	$	1,345	$	8	$	9	$	1,427	$	18	$	21
Land		113		129		0		119		0		0		119		0		0
Construction		0		0		0		130		0		0		87		0		0
Commercial real estate		1,760		1,781		0		1,525		17		19		1,562		34		36
Commercial business		188		209		0		94		0		0		126		0		0
Home Equity/2nd mortgage		96		110		0		169		0		0		197		1		1
Other consumer		0		0		0		0		0		0		0		0		0
		3,341		3,691		0		3,382		25		28		3,518		53		58
Loans with an allowance recorded:
Residential		262		302		61		436		0		0		440		0		0
Land		0		0		0		3		0		0		2		0		0
Construction		0		0		0		0		0		0		0		0		0
Commercial real estate		911		1,031		107		1,123		0		0		1,065		0		0
Commercial business		1,676		1,909		1,226		1,726		0		0		1,720		0		0
Home Equity/2nd mortgage		0		0		0		16		0		0		18		0		0
Other consumer		0		0		0		0		0		0		0		0		0
		2,849		3,242		1,394		3,304		0		0		3,245		0		0
Total:
Residential		1,446		1,764		61		1,781		8		9		1,867		18		21
Land		113		129		0		122		0		0		121		0		0
Construction		0		0		0		130		0		0		87		0		0
Commercial real estate		2,671		2,812		107		2,648		17		19		2,627		34		36
Commercial business		1,864		2,118		1,226		1,820		0		0		1,846		0		0
Home Equity/2nd mortgage		96		110		0		185		0		0		215		1		1
Other consumer		0		0		0		0		0		0		0		0		0
	$	6,190	$	6,933	$	1,394	$	6,686	$	25	$	28	$	6,763	$	53	$	58

The following table summarizes the Company’s impaired loans for the three months and six months ended June 30, 2013:

	Three Months Ended June 30, 2013						Six Months Ended June 30, 2013
	Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method		Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method
Loans with no related allowance recorded:
Residential	$	1,273	$	2	$	0	$	1,324	$	5	$	1
Land		126		0		0		125		0		0
Construction		232		0		0		289		0		0
Commercial real estate		106		0		0		582		0		0
Commercial business		0		4		3		0		4		3
Home Equity/2nd mortgage		251		1		1		167		2		1
Other consumer		0		0		0		0		0		0
		1,988		7		4		2,487		11		5
Loans with an allowance recorded:
Residential		625		0		0		731		0		0
Land		3		0		0		2		0		0
Construction		0		0		0		0		0		0
Commercial real estate		1,161		0		0		1,208		0		0
Commercial business		1,776		0		0		1,776		0		0
Home Equity/2nd mortgage		49		0		0		57		1		0
Other consumer		0		0		0		0		0		0
		3,614		0		0		3,774		1		0
Total:
Residential		1,898		2		0		2,055		5		1
Land		129		0		0		127		0		0
Construction		232		0		0		289		0		0
Commercial real estate		1,267		0		0		1,790		0		0
Commercial business		1,776		4		3		1,776		4		3
Home Equity/2nd mortgage		300		1		1		224		3		1
Other consumer		0		0		0		0		0		0
	$	5,602	$	7	$	4	$	6,261	$	12	$	5

The following table summarizes the Company’s impaired loans as of December 31, 2013:

	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,591	$	1,869	$	0
Land		120		131		0
Construction		0		0		0
Commercial real estate		1,637		1,643		0
Commercial business		189		209		0
Home equity/2nd mortgage		254		268		0
Other consumer		0		0		0
		3,791		4,120		0
Loans with an allowance recorded:
Residential		449		487		112
Land		0		0		0
Construction		0		0		0
Commercial real estate		949		1,048		145
Commercial business		1,709		1,909		1,259
Home equity/2nd mortgage		22		22		13
Other consumer		0		0		0
		3,129		3,466		1,529
Total:
Residential		2,040		2,356		112
Land		120		131		0
Construction		0		0		0
Commercial real estate		2,586		2,691		145
Commercial business		1,898		2,118		1,259
Home equity/2nd mortgage		276		290		13
Other consumer		0		0		0
	$	6,920	$	7,586	$	1,529

Recorded Investment in Nonperforming Loans

The following table presents the recorded investment in nonperforming loans at June 30, 2014 and December 31, 2013:

	June 30, 2014						December 31, 2013
	Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans		Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans
	(In thousands)
Residential	$	945	$	68	$	1,013	$	1,533	$	180	$	1,713
Land		113		0		113		120		0		120
Construction		0		0		0		0		0		0
Commercial real estate		1,395		0		1,395		1,456		0		1,456
Commercial business		1,864		0		1,864		1,898		0		1,898
Home equity/2nd mortgage		73		0		73		252		39		291
Other consumer		0		2		2		0		8		8
Total	$	4,390	$	70	$	4,460	$	5,259	$	227	$	5,486

Recorded Investment in Loans by Risk Category

The following table presents the recorded investment in loans by risk category as of the date indicated:

	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
June 30, 2014
Pass	$	103,761	$	6,816	$	9,015	$	72,009	$	23,643	$	36,812	$	34,691	$	286,747
Special Mention		183		0		0		4,633		2,915		98		37		7,866
Substandard		894		3,056		0		682		0		369		17		5,018
Doubtful		945		113		0		1,395		1,864		73		0		4,390
Loss		0		0		0		0		0		0		0		0
Ending balance	$	105,783	$	9,985	$	9,015	$	78,719	$	28,422	$	37,352	$	34,745	$	304,021
December 31, 2013
Pass	$	103,594	$	7,096	$	9,018	$	71,893	$	19,328	$	34,693	$	33,627	$	279,249
Special Mention		756		0		0		2,627		458		198		27		4,066
Substandard		1,625		3,144		0		690		319		126		0		5,904
Doubtful		1,533		120		0		1,456		1,898		252		0		5,259
Loss		0		0		0		0		0		0		0		0
Ending balance	$	107,508	$	10,360	$	9,018	$	76,666	$	22,003	$	35,269	$	33,654	$	294,478

Troubled Debt Restructurings by Accrual Status

The following table summarizes the Company’s troubled debt restructurings (TDRs) by accrual status as of June 30, 2014 and December 31, 2013:

	June 30, 2014								December 31, 2013
	Accruing		Nonaccrual		Total		Related Allowance for Loan Losses		Accruing		Nonaccrual		Total		Related Allowance for Loan Losses
	(In thousands)
Troubled debt restructurings:
Residential real estate	$	501	$	171	$	672	$	8	$	508	$	226	$	734	$	45
Commercial real estate		1,276		361		1,637		0		1,130		0		1,130		0
Commercial business		0		1,676		1,676		1,226		0		1,709		1,709		1,259
Home equity and 2nd mortgage		23		0		23		0		24		0		24		0
Total	$	1,800	$	2,208	$	4,008	$	1,234	$	1,662	$	1,935	$	3,597	$	1,304

Information in Regard to Troubled Debt Restructurings that Occurred During Period

The following table summarizes information in regard to TDRs that were restructured during the six months ended June 30, 2014. There were no TDRs that were restructured during the three months ended June 30, 2014:

	Six months ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance
	(Dollars in thousands)
Troubled debt restructurings:
Commercial real estate		3	$	542	$	542
Total		3	$	542	$	542

The following table summarizes information in regard to TDRs that were restructured during the three and six months ended June 30, 2013:

	Three months ended June 30, 2013						Six months ended June 30, 2013
	Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance		Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance
	(Dollars in thousands)						(Dollars in thousands)
Troubled debt restructurings:
Residential real estate		1	$	160	$	160		1	$	160	$	160
Total		1	$	160	$	160		1	$	160	$	160

Loans

Loans

Loans at June 30, 2014 and December 31, 2013 consisted of the following:

	June 30,			December 31,
(In thousands)	2014			2013
Real estate mortgage loans:
Residential	$	105,377		$	107,029
Land		9,938			10,309
Residential construction		13,274			14,423
Commercial real estate		78,547			76,496
Commercial real estate construction		1,078			1,715
Commercial business loans		28,354			21,956
Consumer loans:
Home equity and second mortgage loans		36,833			34,815
Automobile loans		24,948			23,983
Loans secured by savings accounts		994			1,138
Unsecured loans		3,706			3,541
Other consumer loans		4,961			4,824
Gross loans		308,010			300,229
Less undisbursed portion of loans in process		(5,359	)		(7,142	)
Principal loan balance		302,651			293,087
Deferred loan origination fees, net		412			341
Allowance for loan losses		(5,066	)		(4,922	)
Loans, net	$	297,997		$	288,506

Financing Receivable Recorded Investment Current Past Due

Loans

The following table presents the aging of the recorded investment in loans at June 30, 2014:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	3,064	$	181	$	296	$	3,541	$	102,242	$	105,783
Land		159		0		0		159		9,826		9,985
Construction		0		0		0		0		9,015		9,015
Commercial real estate		0		46		0		46		78,673		78,719
Commercial business		0		0		189		189		28,233		28,422
Home equity/2nd mortgage		248		107		34		389		36,963		37,352
Other consumer		248		22		2		272		34,473		34,745
Total	$	3,719	$	356	$	521	$	4,596	$	299,425	$	304,021

The following table presents the aging of the recorded investment in loans at December 31, 2013:

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	3,160	$	830	$	701	$	4,691	$	102,817	$	107,508
Land		162		109		12		283		10,077		10,360
Construction		0		0		0		0		9,018		9,018
Commercial real estate		231		500		49		780		75,886		76,666
Commercial business		0		0		189		189		21,814		22,003
Home equity/2nd mortgage		411		24		132		567		34,702		35,269
Other consumer		296		34		8		338		33,316		33,654
Total	$	4,260	$	1,497	$	1,091	$	6,848	$	287,630	$	294,478