Loan Quality (Tables)

6 Months Ended

Jun. 30, 2016

Allowance For Loan Losses, By Loan Segment

The following table presents, by class, the activity in the Allowance for Loan Losses (ALL) for the periods ended:




	Residential Real Estate 1-4 Family
			Junior Liens &				Commercial
(Dollars in thousands)	First Liens		Lines of Credit		Construction		Real Estate		Commercial		Consumer		Unallocated		Total

ALL at March 31, 2016	$	997	$	316	$	199	$	6,181	$	1,510	$	99	$	1,040	$	10,342
Charge-offs		(46)		-		-		(1,951)		(3)		(42)		-		(2,042)
Recoveries		1		-		-		14		106		22		-		143
Provision		71		3		6		1,696		(17)		18		98		1,875
ALL at June 30, 2016	$	1,023	$	319	$	205	$	5,940	$	1,596	$	97	$	1,138	$	10,318

ALL at December 31, 2015	$	989	$	308	$	194	$	5,649	$	1,519	$	102	$	1,325	$	10,086
Charge-offs		(49)		-		-		(1,954)		(66)		(84)		-		(2,153)
Recoveries		33		-		-		14		121		42		-		210
Provision		50		11		11		2,231		22		37		(187)		2,175
ALL at June 30, 2016	$	1,023	$	319	$	205	$	5,940	$	1,596	$	97	$	1,138	$	10,318

ALL at March 31, 2015	$	1,016	$	268	$	249	$	5,137	$	1,353	$	116	$	1,071	$	9,210
Charge-offs		(43)		-		(21)		-		(17)		(26)		-		(107)
Recoveries		1		-		-		14		8		14		-		37
Provision		40		13		(22)		28		96		8		147		310
ALL at June 30, 2015	$	1,014	$	281	$	206	$	5,179	$	1,440	$	112	$	1,218	$	9,450

ALL at December 31, 2014	$	994	$	271	$	214	$	4,978	$	1,515	$	127	$	1,012	$	9,111
Charge-offs		(43)		-		(21)		-		(218)		(78)		-		(360)
Recoveries		3		-		-		14		14		33		-		64
Provision		60		10		13		187		129		30		206		635
ALL at June 30, 2015	$	1,014	$	281	$	206	$	5,179	$	1,440	$	112	$	1,218	$	9,450

The following table presents, by class, loans that were evaluated for the ALL under the specific reserve (individually) and those that were evaluated under the general reserve (collectively) and the amount of the ALL established in each class as of June 30, 2016 and December 31, 2015:




	Residential Real Estate 1-4 Family
			Junior Liens &				Commercial
(Dollars in thousands)	First Liens		Lines of Credit		Construction		Real Estate		Commercial		Consumer		Unallocated		Total

June 30, 2016
Loans evaluated for ALL:
Individually	$	396	$	52	$	491	$	17,082	$	-	$	-	$	-	$	18,021
Collectively		163,141		51,962		7,829		354,704		226,307		4,692		-		808,635
Total	$	163,537	$	52,014	$	8,320	$	371,786	$	226,307	$	4,692	$	-	$	826,656

ALL established for loans evaluated:
Individually	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively		1,023		319		205		5,940		1,596		97		1,138		10,318
ALL at June 30, 2016	$	1,023	$	319	$	205	$	5,940	$	1,596	$	97	$	1,138	$	10,318

December 31, 2015
Loans evaluated for ALL:
Individually	$	930	$	51	$	502	$	14,309	$	230	$	-	$	-	$	16,022
Collectively		160,548		50,862		7,386		326,386		215,712		5,100		-		765,994
Total	$	161,478	$	50,913	$	7,888	$	340,695	$	215,942	$	5,100	$	-	$	782,016

ALL established for loans evaluated:
Individually	$	-	$	-	$	-	$	-	$	9	$	-	$	-	$	9
Collectively		989		308		194		5,649		1,510		102		1,325		10,077
ALL at December 31, 2015	$	989	$	308	$	194	$	5,649	$	1,519	$	102	$	1,325	$	10,086

Impaired Financing Receivables

The following table shows additional information about those loans considered to be impaired at June 30, 2016 and December 31, 2015:



	Impaired Loans
	With No Allowance				With Allowance
(Dollars in thousands)			Unpaid					Unpaid
	Recorded		Principal		Recorded		Principal		Related
June 30, 2016	Investment		Balance		Investment		Balance		Allowance
Residential Real Estate 1-4 Family
First liens	$	921	$	996	$	-	$	-	$	-
Junior liens and lines of credit		63		75		-		-		-
Total		984		1,071		-		-		-
Residential real estate - construction		491		540		-		-		-
Commercial real estate		17,357		19,910		-		-		-
Commercial		25		37		-		-		-
Total	$	18,857	$	21,558	$	-	$	-	$	-



December 31, 2015
Residential Real Estate 1-4 Family
First liens	$	1,523	$	1,725	$	-	$	-	$	-
Junior liens and lines of credit		105		133		-		-		-
Total		1,628		1,858		-		-		-
Residential real estate - construction		502		546		-		-		-
Commercial real estate		14,431		15,007				-		-
Commercial		267		330		9		10		9
Total	$	16,828	$	17,741	$	9	$	10	$	9

The following table shows the average of impaired loans and related interest income for the three and six months ended June 30, 2016 and 2015:


	Three Months Ended				Six Months Ended
	June 30, 2016				June 30, 2016
	Average		Interest		Average		Interest
(Dollars in thousands)	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Residential Real Estate 1-4 Family
First liens	$	926	$	6	$	998	$	12
Junior liens and lines of credit		63		-		67		-
Total		989		6		1,065		12
Residential real estate - construction		494		-		498		-
Commercial real estate		19,345		117		19,555		239
Commercial		34		-		39		-
Total	$	20,862	$	123	$	21,157	$	251


	Three Months Ended				Six Months Ended
	June 30, 2015				June 30, 2015
	Average		Interest		Average		Interest
(Dollars in thousands)	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Residential Real Estate 1-4 Family
First liens	$	1,618	$	9	$	1,723	$	16
Junior liens and lines of credit		117		-		131		-
Total		1,735		9		1,854		16
Residential real estate - construction		516		-		723		-
Commercial real estate		21,756		174		21,971		327
Commercial		361		-		1,012		-
Total	$	24,368	$	183	$	25,560	$	343

Aging Of Payments Of The Loan Portfolio



(Dollars in thousands)			Loans Past Due and Still Accruing										Total
	Current		30-59 Days		60-89 Days		90 Days+		Total		Non-Accrual		Loans
June 30, 2016
Residential Real Estate 1-4 Family
First liens	$	162,601	$	102	$	393	$	14	$	509	$	427	$	163,537
Junior liens and lines of credit		51,764		154		-		33		187		63		52,014
Total		214,365		256		393		47		696		490		215,551
Residential real estate - construction		7,652		117		-		60		177		491		8,320
Commercial real estate		362,157		2,415		96		306		2,817		6,812		371,786
Commercial		225,802		381		53		46		480		25		226,307
Consumer		4,674		18		-		-		18		-		4,692
Total	$	814,650	$	3,187	$	542	$	459	$	4,188	$	7,818	$	826,656



December 31, 2015
Residential Real Estate 1-4 Family
First liens	$	159,998	$	44	$	416	$	214	$	674	$	806	$	161,478
Junior liens and lines of credit		50,541		217		50		-		267		105		50,913
Total		210,539		261		466		214		941		911		212,391
Residential real estate - construction		7,209		177		-		-		177		502		7,888
Commercial real estate		330,953		5,713		196		152		6,061		3,681		340,695
Commercial		215,449		210		5		2		217		276		215,942
Consumer		5,041		55		4		-		59		-		5,100
Total	$	769,191	$	6,416	$	671	$	368	$	7,455	$	5,370	$	782,016

Internal Credit Rating For The Loan Portfolio



	Pass		Special Mention		Substandard		Doubtful
(Dollars in thousands)	(1-5)		(6)		(7)		(8)		Total

June 30, 2016
Residential Real Estate 1-4 Family
First liens	$	160,151	$	2,003	$	1,383	$	-	$	163,537
Junior liens and lines of credit		51,796		28		190		-		52,014
Total		211,947		2,031		1,573		-		215,551
Residential real estate - construction		7,488		-		832		-		8,320
Commercial real estate		352,191		1,758		17,837		-		371,786
Commercial		223,082		1,161		2,064		-		226,307
Consumer		4,692		-		-		-		4,692
Total	$	799,400	$	4,950	$	22,306	$	-	$	826,656



December 31, 2015
Residential Real Estate 1-4 Family
First liens	$	157,514	$	2,122	$	1,842	$	-	$	161,478
Junior liens and lines of credit		50,685		28		200		-		50,913
Total		208,199		2,150		2,042		-		212,391
Residential real estate - construction		7,386		-		502		-		7,888
Commercial real estate		319,985		6,175		14,535		-		340,695
Commercial		213,492		1,978		472		-		215,942
Consumer		5,100		-		-		-		5,100
Total	$	754,162	$	10,303	$	17,551	$	-	$	782,016

Troubled Debt Restructuring Loans


								Troubled Debt Restructurings
								That Have Defaulted on
								Modified Terms in the
(Dollars in thousands)	Troubled Debt Restructurings							Last Twelve Months
	Number of	Recorded						Number of	Recorded
	Contracts	Investment		Performing*		Nonperforming*		Contracts	Investment
June 30, 2016
Residential real estate - construction	1	$	491	$	491	$	-	-	$	-
Residential real estate	4		645		494		151	-		-
Commercial real estate	11		12,351		12,351		-	-		-
Total	16	$	13,487	$	13,336	$	151	-	$	-


December 31, 2015
Residential real estate - construction	1	$	502	$	502	$	-	-	$	-
Residential real estate	4		654		503		151	-		-
Commercial real estate	10		12,125		12,125		-	-		-
Total	15	$	13,281	$	13,130	$	151	-	$	-

*The performing status is determined by the loan’s compliance with the modified terms.

The following table reports new TDR loans during 2016, concession granted and the recorded investment as of June 30, 2016:

New During Period

Number of

Pre-TDR

After-TDR

Recorded

Six Months Ended June 30, 2016

Contracts

Modification

Investment

Concession

Commercial real estate

525

515

multiple