6. LOANS AND ALLL

The ALLL is management's estimate of losses inherent in the loan portfolio. The provision for loan losses is the amount charged against earnings to establish an adequate ALLL. Loan losses and recoveries are charged to or credited to the ALLL, rather than reported as a direct expense or recovery. The loan portfolio is segmented into three parts for the ALLL calculation: impaired commercial loans and smaller balance homogenous loans in the process of foreclosure, TDRs (collectively referred to as "impaired loans"), and all other loans.

For all classes of commercial loans, a quarterly evaluation of specific individual borrowers is performed to identify impaired loans. The identification of specific borrowers for review is based on a review of non-accrual loans as well as those loans specifically identified by management as exhibiting above average levels of risk through the loan classification process. The ALLL attributed to impaired loans and TDRs considers all available evidence based on significant conditions or circumstances related to the specific credits. The specific allowance amounts are determined by a method prescribed by ASC 310. The loans identified as impaired and TDRs are accounted for in accordance with one of three valuations: (i) the present value of future cash flows discounted at the loan's effective interest rate; (ii) the loan's observable market price, or (iii) the fair value of the collateral, if the loan is collateral dependent, less estimated liquidation costs. Factors considered by management in determining impairment include payment status, collateral value, alternate use of special purpose real estate which could adversely impact resale, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The significance of payment delays and payment shortfalls are considered on a loan-by-loan basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Interest payments made on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest income may be accrued or recognized on a cash basis.

Most consumer loans are evaluated for impairment on a collective basis, because these loans are for smaller balances and are homogeneous. Any loans, including commercial loans, not specifically identified as impaired or TDRs, are collectively evaluated and segmented by loan type, applying two factors: the quantitative loss history by loan type for the previous five year periods at December 31, 2015, previously four year periods at December 31, 2014, compared to average loans outstanding for the same period (the "quantitative factor"), and a qualitative factor that is comprised of quantitatively-driven calculations based on historical data, and subjective factors (the "qualitative factors"). The change in methodology resulted in a $425 thousand increase in the ALLL at December 31, 2015. The quantitative portion of the ALLL is adjusted for qualitative factors to account for model imprecision and to incorporate the range of probable outcomes inherent in the estimates used for the allowance.

The quantitative factor by loan type is applied against the unimpaired loan balances and smaller-balance homogenous impaired loans not in the process of foreclosure for which there is no specific reserve to determine the quantitative reserve. The qualitative factors, including (i) policy underwriting, charge-off and collection, (ii) national and local economic conditions, (iii) nature and volume of the portfolio, (iv) experience, ability, and depth of lending team, (v) trends of past due, classified loans, and restructurings, (vi) quality of loan review and board oversight, (vii) existence, levels, and effect of loan concentrations and (viii) effects of external factors such as competition and regulatory oversight, are adjusted quarterly based on historical information for any quantifiable factors and qualitative judgments for subjective factors (those considered subjective are policy, underwriting, experience, ability and depth of lending team, quality of loan review and board oversight, and effects of external factors), and applied in total to each loan balance by loan type. The Company continues to enhance its modeling of the portfolio and underlying risk factors through quarterly analytical reviews with the goal of ensuring it captures all pertinent factors contributing to risk of loss inherent in the loan portfolio. Under ASC 310, the non-homogenous impaired loans, homogenous small balance real estate secured loans in process of foreclosure for which the value is less than the loan principal balance, and TDRs, are reviewed individually for impairment.

The process of assessing the adequacy of the ALLL is inherently subjective. Further, and particularly in terms of economic downturns, it is reasonably possible that future credit losses may exceed historical loss levels and may also exceed management's current estimates of incurred credit losses inherent within the loan portfolio. As such, there can be no assurance that future loan charge-offs will not exceed management's current estimate of what constitutes a reasonable allowance for loan losses.

The Company and the Bank are subject to periodic examination by their federal and state banking regulators, and may be required by their regulators to recognize additions to the allowance for loan losses based on their assessment of credit information available to them at the time of their examinations.

As of December 31, 2015 and December 31, 2014, the ALLL was $3.4 million, which represented approximately 2.08% and 1.96% of loans outstanding, net of unearned income and deferred costs ("net loans outstanding"), on those respective dates. Loans decreased $10.2 million from December 31, 2014 to December 31, 2015, impaired loans decreased $3.8 million over the same period; however, the reserve allocated for impaired loans individually evaluated increased by $355 thousand over the same period. The large increase in reserve for impaired loans was primarily attributable to one borrower with two commercial real estate secured loans. As of December 31, 2015, the total loans collectively evaluated totaled $138.4 million compared to $144.8 million at December 31, 2014. The corresponding allowance for loans collectively reviewed for impairment totaled $2.8 million and $3.2 million at December 31, 2015 and December 31, 2014, respectively. Net charge-offs totaled $5 thousand and $103 thousand for the years ended December 31, 2015 and December 31, 2014, respectively.

Of the non-accruing loans totaling $5.0 million at December 31, 2015, 0.30% are secured by faith-based non-profit real estate, 99.70% are secured by real estate excluding faith-based non-profit. Management believes loans secured by real estate lessen the risk of loss. TDRs in compliance with the modified terms totaled $21.6 million or 88.57% at December 31, 2015. GAAP does not provide specific guidance on when a loan may be returned to accrual status. Federal banking regulators have provided guidance that interest on impaired loans, including TDRs, should only be recorded when there has been a sustained period of repayment performance, the loan is well secured, and collection under any revised term is assessed as probable. The Company evaluates impaired and TDR performance under the banking guidelines and returns loans to accruing after a sustained period of repayment performance.

Loans are generally placed on non-accrual status when the scheduled payments reach 90 days past due. Loans are charged-off, with Board of Director approval, when the Chief Credit Officer and his staff determine that all reasonable means of collection of the outstanding balances, except foreclosure, have been exhausted. The Company continues its collection efforts subsequent to charge-off, which historically has resulted in some recoveries each year.

The composition of the loan portfolio, net of deferred fees and costs, by loan classification as of December 31, 2015 and 2014:

(Dollars in thousands)	December 31, 2015			December 31, 2014

Commercial	$	7,540		$	7,253
Commercial real estate:
Construction		9,618			2,557
Owner occupied		18,941			18,013
Other		15,481			19,493
Faith-based non-profit:
Construction		4,800			6,156
Owner occupied		78,228			84,499
Other		2,427			4,707
Residential real estate:
First mortgage		16,467			18,995
Multifamily		2,701			3,001
Home equity		3,249			4,124
Construction		122			506
Consumer		1,035			1,232
Other loans		4,240			4,552
Loans, net of deferred fees		164,849			175,088
ALLL		(3,435	)		(3,440	)
Loans, net of ALLL	$	161,414		$	171,648

The Bank has a concentration of loans to faith-based non-profit organizations, in which the Bank has specialized lending experience. At December 31, 2015, the percentage of loans in this segment, which included construction, owner occupied real estate secured, and other loans, comprised 51.84% of the total loan portfolio. The reserve allocated for these loans is 35.78% of the total ALLL. Historically the Bank has experienced low levels of loan losses in this segment; however, repayment of these loans is generally dependent on voluntary contributions, some of which have been adversely affected by the economic downturn.

Management has identified its loan-related disclosure classifications in its financial reports to present portfolio segments. A portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its ALLL. The following tables present the reported investment in loans, net of deferred fees and costs, by portfolio segment and based on impairment method and related ALLL as of December 31, 2015 and December 31, 2014, respectively:

	December 31, 2015
					Faith
					Based
			Commercial		Non-		Residential				Other
(Dollars in thousands)	Commercial		Real Estate		Profit		Real Estate		Consumer		Loans		Unallocated		Total
ALLL:
Ending ALLL balance attributable to loans:
Individually evaluated for impairment	$	—	$	303	$	261	$	67	$	—	$	—	$	—	$	631
Collectively evaluated for impairment		329		536		968		343		21		229		378		2,804
Total ending ALLL balance	$	329	$	839	$	1,229	$	410	$	21	$	229	$	378	$	3,435

Loans:
Loans individually evaluated for impairment	$	—	$	7,517	$	16,325	$	2,579	$	—	$	—	$	—	$	26,421
Loans collectively evaluated for impairment		7,540		36,523		69,130		19,960		1,035		4,240		—		138,428
Total ending loans balance	$	7,540	$	44,040	$	85,455	$	22,539	$	1,035	$	4,240	$	—	$	164,849

	December 31, 2014
					Faith
					Based
			Commercial		Non-		Residential				Other
(Dollars in thousands)	Commercial		Real Estate		Profit		Real Estate		Consumer		Loans		Unallocated		Total
ALLL:
Ending ALLL balance attributable to loans:
Individually evaluated for impairment	$	—	$	11	$	6	$	259	$	—	$	—	$	—	$	276
Collectively evaluated for impairment		353		568		1,228		426		28		265		296		3,164
Total ending ALLL balance	$	353	$	579	$	1,234	$	685	$	28	$	265	$	296	$	3,440

Loans:
Loans individually evaluated for impairment	$	—	$	9,012	$	16,807	$	4,450	$	—	$	—	$	—	$	30,269
Loans collectively evaluated for impairment		7,253		31,051		78,555		22,176		1,232		4,552		—		144,819
Total ending loans balance	$	7,253	$	40,063	$	95,362	$	26,626	$	1,232	$	4,552	$	—	$	175,088

	For the Year Ended December 31, 2015
						Faith-
						Based			Residential
				Commercial		Non-			Real						Other
(Dollars in thousands)	Commercial			Real Estate		Profit			Estate			Consumer			Loans			Unallocated		Total

ALLL:
Total ending ALLL balances as of December 31, 2014	$	353		$	579	$	1,234		$	685		$	28		$	265		$	296	$	3,440
For the year ended December 31, 2015
Charge-offs		(3	)		—		—			(7	)		(2	)		(18	)		—		(30	)
Recoveries		—			—		—			20			1			4			—		25
Provision for loan losses		(21	)		260		(5	)		(288	)		(6	)		(22	)		82		—
Total ending ALLL balances as of December 31, 2015	$	329		$	839	$	1,229		$	410		$	21		$	229		$	378	$	3,435

	For the Year Ended December 31, 2014
						Faith-
						Based			Residential
			Commercial			Non-			Real						Other
(Dollars in thousands)	Commercial		Real Estate			Profit			Estate			Consumer			Loans			Unallocated		Total

ALLL:
Total ending ALLL balances as of December 31, 2013	$	184	$	808		$	1,883		$	493		$	19		$	106		$	—	$	3,493
For the year ended December 31, 2014
Charge-offs		—		—			—			(78	)		(35	)		(21	)		—		(134	)
Recoveries		—		—			—			22			1			8			—		31
Provision for loan losses		169		(229	)		(649	)		248			43			172			296		50
Total ending ALLL balances as of December 31, 2014	$	353	$	579		$	1,234		$	685		$	28		$	265		$	296	$	3,440

The following tables show impaired loans with and without valuation allowances as of December 31, 2015 and 2014:

	December 31, 2015
							Interest
	Unpaid						Earned		Average
	Principal		Recorded		ALLL		For the		Recorded
(Dollars in thousands)	Balance		Investment		Allocated		Year		Investment

With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		—		—		—		—		137
Owner occupied		68		68		—		7		59
Other		2,813		2,815		—		85		3,685
Faith based non-profit:
Construction		—		—		—		—		—
Owner occupied		5,413		5,426		—		230		5,197
Other		—		—		—		—		—
Residential real estate:
First mortgage		1,926		1,898		—		24		2,211
Multifamily		—		—		—		—		—
Home equity		338		338		—		10		140
Construction		—		—		—		—		—
Consumer		—		—		—		—		1
Impaired loans with no allowance recorded	$	10,558	$	10,545	$	—	$	356	$	11,430

With an allowance recorded:
Commercial	$	—	$	—	$	—	$	—	$	1
Commercial real estate:
Construction		—		—		—		—		172
Owner occupied		4,637		4,677		303		190		4,712
Other		—		—		—		—		18
Faith based non-profit:
Construction		—		—		—		—		—
Owner occupied		10,912		10,983		261		567		11,583
Other		—		—		—		—		—
Residential real estate:
First mortgage		343		343		67		2		775
Multifamily		—		—		—		—		—
Home equity		—		—		—		—		39
Construction		—		—		—		—		—
Consumer		—		—		—		—		—
Impaired loans with allowance recorded	$	15,892	$	16,003	$	631	$	759	$	17,300
Total impaired loans	$	26,450	$	26,548	$	631	$	1,115	$	28,730

	December 31, 2014
							Interest
	Unpaid						Earned		Average
	Principal		Recorded		ALLL		For the		Recorded
(Dollars in thousands)	Balance		Investment		Allocated		Year		Investment

With no related allowance recorded:
Commercial	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		77		78		—		6		186
Owner occupied		42		42		—		16		2,818
Other		3,855		3,872		—		100		3,017
Faith based non-profit:
Construction		—		—		—		—		—
Owner occupied		9,744		9,764		—		558		9,937
Other		—		—		—		—		40
Residential real estate:
First mortgage		2,894		2,881		—		172		2,717
Multifamily		—		—		—		—		—
Home equity		20		20		—		2		70
Construction		—		—		—		—		—
Consumer		—		—		—		—		8
Impaired loans with no allowance recorded	$	16,632	$	16,657	$	—	$	854	$	18,793

With an allowance recorded:
Commercial	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Construction		278		279		1		23		176
Owner occupied		4,760		4,800		10		200		1,164
Other		—		—		—		—		1,714
Faith based non-profit:
Construction		—		—		—		—		—
Owner occupied		7,063		7,361		6		327		6,801
Other		—		—		—		—		—
Residential real estate:
First mortgage		1,426		1,427		242		76		644
Multifamily		—		—		—		—		—
Home equity		145		145		17		6		112
Construction		—		—		—		—		—
Consumer		—		—		—		—		—
Impaired loans with allowance recorded	$	13,672	$	14,012	$	276	$	632	$	10,611
Total impaired loans	$	30,304	$	30,669	$	276	$	1,486	$	29,404

The recorded investment in loan balance is net of deferred fees and costs, and partial charge-offs, where applicable.

The Bank modifies certain loans and provides a concession such as a reduced rate, extended terms, or reduction of principal and/or interest, in a TDR where the borrowers are experiencing financial difficulties. These concessions typically result from loss mitigation recommendations developed by the Bank's problem loan team. Concessions could include reductions in below market interest rates, payment extensions, forbearance or other actions. TDRs are generally classified as nonperforming at the time of restructuring and may only be returned to performing status after considering the borrower's sustained repayment performance for a reasonable period, generally six months.

When loans are modified as TDRs, the Bank evaluates each loan for any possible impairment based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, except when the repayment source is expected to be the liquidation of underlying collateral, in which cases the Bank uses the fair value of the collateral, less selling costs, instead of discounted cash flows. If the Bank determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance allocation or a charge-off to the allowance.

The Bank completed three TDR modifications within the year ended December 31, 2015. All of the TDRs were secured by first mortgage residential real estate. Of the three loans restructured during the year ended December 31, 2015, one loan totaling $66 thousand was not in compliance with the restructured terms. There were no new TDR modifications during 2014. Based upon financial analysis and the fair value of collateral, the Bank allocated $0.6 million and $0.9 million of specific reserves for TDRs at December 31, 2015 and 2014, respectively.

The following table presents details of TDR loans that were restructured during the year ended December 31, 2015:

	TDR Modifications
	For the Year Ended December 31, 2015
			Pre-modification Outstanding		Post-modification Outstanding
(Dollars in thousands)	Number of loans		Recorded Investment		Recorded Investment

Below market interest rates:
Residential real estate:
First mortgage		2	$	129	$	125

Extended payment terms:
Residential real estate:
First mortgage		1		129		127
Total		3	$	258	$	252

The following table presents loans modified as TDRs with a payment default occurring within 12 months of the restructure date, during the years ended December 31, 2015 and 2014:

	During the Years Ended
	December 31, 2015				December 31, 2014
	Default				Default
	Number of		Recorded		Number of		Recorded
(Dollars in thousands)	Loans		Investment		Loans		Investment

Below market interest rate and extended payment terms		—	$	—		—	$	—
Below market interest rate		1		66		—		—
Extended payment terms		—		—		—		—
Total		1	$	66		—	$	—

The following tables present the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2015 and 2014:

					90 Days
					or More
					Past Due
December 31, 2105					Still
(Dollars in thousands)	Non-accrual		Number		Accruing		Number

Commercial	$	—		—	$	—		—
Commercial real estate:
Construction		—		—		—		—
Owner occupied		—		—		—		—
Other		2,513		2		—		—
Faith-based non-profit:
Construction		—		—		—		—
Owner occupied		15		1		356		3
Other		—		—		—		—
Residential real estate:
First mortgage		2,154		36		—		—
Multifamily		—		—		—		—
Home equity		338		5		—		—
Construction		—		—		—		—
Consumer		—		—		—		—
Other loans		—		—		—		—
Total	$	5,020		44	$	356		3

					90 Days
					or More
					Past Due
December 31, 2014					Still
(Dollars in thousands)	Non-accrual		Number		Accruing		Number

Commercial	$	—		—	$	—		—
Commercial real estate:
Construction		—		—		—		—
Owner occupied		42		1		—		—
Other		2,860		3		771		1
Faith-based non-profit:
Construction		—		—		—		—
Owner occupied		133		2		541		2
Other		—		—		15		1
Residential real estate:
First mortgage		2,720		33		1,696		8
Multifamily		—		—		—		—
Home equity		165		7		—		—
Construction		—		—		—		—
Consumer		—		—		—		1
Other loans		—		—		—		—
Total	$	5,920		46	$	3,023		13

Non-accrual loans and loans past due over 90 days still on accrual include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified impaired loans. Loans from which principal or interest is in default for 90 days or more are classified as a non-accrual unless they are well secured and in process of collection. Loans past due over 90 days still accruing were matured loans that were well secured and in process of collection. Borrowers have continued to make payments on these loans while administrative and legal due processes are proceeding which will enable the Bank to extend or modify maturity dates.

Unrecognized income on non-accrual loans as of December 31, 2015 and December 31, 2014 was $0.1 million and $0.3 million, respectively, representing a decrease of $0.2 million in the most recent year.

The following tables present loans not past due, and the aging of past due loans as of December 31, 2015 and 2014 by class of loans:

					90 Days
December 31, 2015	30-59 Days		60-89 Days		Or More		Total Past
(Dollars in thousands)	Past Due		Past Due		Past Due		Due		Current		Total

Commercial	$	—	$	—	$	—	$	—	$	7,540	$	7,540
Commercial real estate:
Construction		40		—		—		40		9,578		9,618
Owner occupied		397		—		—		397		18,544		18,941
Other		—		71		—		71		15,410		15,481
Faith-based non-profit:
Construction		—		—		—		—		4,800		4,800
Owner occupied		237		—		355		592		77,636		78,228
Other		—		—		—		—		2,427		2,427
Residential real estate:
First mortgage		688		161		1,377		2,226		14,241		16,467
Multifamily		17		—		—		17		2,684		2,701
Home equity		129		—		206		335		2,914		3,249
Construction		122		—		—		122		—		122
Consumer		—		—		—		—		1,035		1,035
Other loans		3		—		—		3		4,237		4,240
Total	$	1,633	$	232	$	1,938	$	3,803	$	161,046	$	164,849

					90 Days
December 31, 2014	30-59 Days		60-89 Days		Or More		Total Past
(Dollars in thousands)	Past Due		Past Due		Past Due		Due		Current		Total

Commercial	$	3	$	—	$	—	$	3	$	7,250	$	7,253
Commercial real estate:
Construction		—		—		—		—		2,557		2,557
Owner occupied		69		321		42		432		17,581		18,013
Other		25		1,188		3,602		4,815		14,678		19,493
Faith-based non-profit:
Construction		—		—		—		—		6,156		6,156
Owner occupied		1,923		435		674		3,032		81,467		84,499
Other		—		—		15		15		4,692		4,707
Residential real estate:
First mortgage		745		103		3,322		4,170		14,825		18,995
Multifamily		—		—		—		—		3,001		3,001
Home equity		47		—		23		70		4,054		4,124
Construction		—		—		—		—		506		506
Consumer		11		—		—		11		1,221		1,232
Other loans		—		8		—		8		4,544		4,552
Total	$	2,823	$	2,055	$	7,678	$	12,556	$	162,532	$	175,088

Non-accrual loans decreased $0.9 million as of December 31, 2015 compared to December 31, 2014, while total loans past due decreased by $8.8 million over the same period. Not reflected in the table above are non-accrual loans past due less than 30 days. As shown in the following tables at December 31, 2015 and 2014, respectively, the Company had $3.1 million and $0.7 million in non-accrual loans that were less than 30 days past due.

The following table displays all non-accrual loans and loans 90 or more days past due and still on accrual for the period ended December 31, 2015.

(Dollars in thousands)	Amount		Number

Loans past due over 90 days still on accrual	$	356		3
Non-accrual loans past due
Less than 30 days	$	3,082		11
30-59 days		195		3
60-89 days		161		3
90+ days		1,582		27
Non-accrual loans	$	5,020		44

The following table displays all non-accrual loans and loans 90 or more days past due and still on accrual for the period ended December 31, 2014.

(Dollars in thousands)	Amount		Number

Loans past due over 90 days still on accrual	$	3,023		46
Non-accrual loans past due
Less than 30 days	$	721		11
30-59 days		485		6
60-89 days		59		1
90+ days		4,655		28
Non-accrual loans	$	5,920		46

The Company experienced $5 thousand in net loan charge-offs for the year ended December 31, 2015 compared to $0.1 million in net charge-offs for the year ended December 31, 2014. Net charge-offs totaled 0.00% and 0.06% of average loans outstanding for the years ended December 31, 2015 and 2014, respectively.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans for reserves according to the loan's classification as to credit risk. This analysis includes homogenous loans, such as commercial, commercial real estate and faith based non–profit entities, and mortgage loans in process of foreclosure for which the loan to value does not support repayment in full. This analysis is performed on at least a quarterly basis. The Company uses the following definitions for risk ratings:

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Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date. These loans exhibit a moderate likelihood of some loss related to those loans and leases that are considered special mention.

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Substandard. Loans classified as substandard are inadequately protected by the current sound financial repayment capacity and service coverage of the debtor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that may jeopardize the liquidation of or repayment according to the original terms of the debt. In addition to commercial and faith-based non-profit loans with identified weaknesses, substandard loans include loans within the mortgage and consumer portfolio segments that are past due 90 days or more as to principal or interest if the loan to value does not support full repayment. Substandard loans are evaluated for impairment on an individual loan basis unless the substandard loan is a smaller balance homogenous loan that is not a TDR and is not in the process of foreclosure. These loan exhibits a distinct possibility that the company will sustain some loss if the deficiencies related to the loans is not corrected in a timely manner.

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Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added character that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

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Pass. Loans are classified as pass in all classes within the commercial, faith-based non-profit, mortgage, consumer, and other portfolio segments that are not identified as special mention, substandard, or doubtful, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. These loans exhibit a low likelihood of loss related to loans that are considered pass.

As of December 31, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans was as follows:

December 31, 2015
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total

Commercial	$	1,869	$	—	$	5,671	$	—	$	7,540
Commercial real estate:
Construction		9,618		—		—		—		9,618
Owner occupied		18,601		272		68		—		18,941
Other		11,720		394		3,367		—		15,481
Faith-based non-profit:
Construction		4,800		—		—		—		4,800
Owner occupied		61,836		7,243		9,149		—		78,228
Other		2,427		—		—		—		2,427
Residential real estate:
First mortgage		13,733		256		2,478		—		16,467
Multifamily		2,613		30		58		—		2,701
Home equity		3,070		—		179		—		3,249
Construction		122		—		—		—		122
Consumer		1,020		10		5		—		1,035
Other loans		4,240		—		—		—		4,240
Total	$	135,669	$	8,205	$	20,975	$	—	$	164,849

As of December 31, 2014, the risk category of loans by class of loans was as follows:

December 31, 2014
(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total

Commercial	$	1,279	$	3,159	$	2,815	$	—	$	7,253
Commercial real estate:
Construction		2,202		—		355		—		2,557
Owner occupied		17,596		306		111		—		18,013
Other		14,263		457		4,773		—		19,493
Faith-based non-profit:
Construction		6,156		—		—		—		6,156
Owner occupied		68,963		6,160		9,376		—		84,499
Other		4,707		—		—		—		4,707
Residential real estate:
First mortgage		14,328		88		4,579		—		18,995
Multifamily		2,910		31		60		—		3,001
Home equity		3,910		—		214		—		4,124
Construction		506		—		—		—		506
Consumer		1,213		14		5		—		1,232
Other loans		4,552		—		—		—		4,552
Total	$	142,585	$	10,215	$	22,288	$	—	$	175,088