Loan Quality (Tables)

9 Months Ended

Sep. 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 June 30, 2016	$	1,023	$	319	$	205	$	5,940	$	1,596	$	97	$	1,138	$	10,318
Charge-offs		-		-		-		(776)		-		(42)		-		(818)
Recoveries		1		-		-		5		7		22		-		35
Provision		(3)		1		8		876		132		21		115		1,150
ALL at September 30, 2016	$	1,021	$	320	$	213	$	6,045	$	1,735	$	98	$	1,253	$	10,685

ALL at December 31, 2015	$	989	$	308	$	194	$	5,649	$	1,519	$	102	$	1,325	$	10,086
Charge-offs		(49)		-		-		(2,730)		(66)		(126)		-		(2,971)
Recoveries		34		-		-		18		129		64		-		245
Provision		47		12		19		3,108		153		58		(72)		3,325
ALL at September 30, 2016	$	1,021	$	320	$	213	$	6,045	$	1,735	$	98	$	1,253	$	10,685

ALL at June 30, 2015	$	1,014	$	281	$	207	$	5,179	$	1,442	$	110	$	1,217	$	9,450
Charge-offs		-		-		-		-		(47)		(75)		-		(122)
Recoveries		1		-		18		-		102		24		-		145
Provision		(16)		18		(27)		389		32		45		(41)		400
ALL at September 30, 2015	$	999	$	299	$	198	$	5,568	$	1,529	$	104	$	1,176	$	9,873

ALL at December 31, 2014	$	994	$	271	$	214	$	4,978	$	1,515	$	127	$	1,012	$	9,111
Charge-offs		(43)		(21)		-		-		(263)		(155)		-		(482)
Recoveries		4		-		18		14		116		57		-		209
Provision		44		49		(34)		576		161		75		164		1,035
ALL at September 30, 2015	$	999	$	299	$	198	$	5,568	$	1,529	$	104	$	1,176	$	9,873

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 September 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

September 30, 2016
Loans evaluated for ALL:
Individually	$	632	$	52	$	545	$	13,815	$	-	$	-	$	-	$	15,044
Collectively		162,454		52,473		8,111		361,501		254,274		4,719		-		843,532
Total	$	163,086	$	52,525	$	8,656	$	375,316	$	254,274	$	4,719	$	-	$	858,576

ALL established for loans evaluated:
Individually	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively		1,021		320		213		6,045		1,735		98		1,253		10,685
ALL at September 30, 2016	$	1,021	$	320	$	213	$	6,045	$	1,735	$	98	$	1,253	$	10,685

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 September 30, 2016 and December 31, 2015:



	Impaired Loans
	With No Allowance				With Allowance
(Dollars in thousands)			Unpaid					Unpaid
	Recorded		Principal		Recorded		Principal		Related
September 30, 2016	Investment		Balance		Investment		Balance		Allowance
Residential Real Estate 1-4 Family
First liens	$	1,189	$	1,263	$	-	$	-	$	-
Junior liens and lines of credit		96		107		-		-		-
Total		1,285		1,370		-		-		-
Residential real estate - construction		545		597		-		-		-
Commercial real estate		13,815		14,372		-		-		-
Commercial		24		35		-		-		-
Total	$	15,669	$	16,374	$	-	$	-	$	-



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 nine months ended September 30, 2016 and 2015:


	Three Months Ended				Nine Months Ended
	September 30, 2016				September 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	$	1,196	$	10	$	1,262	$	30
Junior liens and lines of credit		96		-		90		-
Total		1,292		10		1,352		30
Residential real estate - construction		548		-		554		-
Commercial real estate		13,889		118		17,871		478
Commercial		25		-		34		-
Total	$	15,754	$	128	$	19,811	$	508


	Three Months Ended				Nine Months Ended
	September 30, 2015				September 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	$	1,600	$	9	$	2,474	$	26
Junior liens and lines of credit		181		2		157		4
Total		1,781		11		2,631		30
Residential real estate - construction		510		-		651		-
Commercial real estate		14,836		126		21,774		452
Commercial		380		-		1,181		-
Total	$	17,507	$	137	$	26,237	$	482

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
September 30, 2016
Residential Real Estate 1-4 Family
First liens	$	162,334	$	239	$	53	$	38	$	330	$	422	$	163,086
Junior liens and lines of credit		52,304		62		2		61		125		96		52,525
Total		214,638		301		55		99		455		518		215,611
Residential real estate - construction		8,111		-		-		-		-		545		8,656
Commercial real estate		369,833		200		559		568		1,327		4,156		375,316
Commercial		253,919		300		5		26		331		24		254,274
Consumer		4,699		10		10		-		20		-		4,719
Total	$	851,200	$	811	$	629	$	693	$	2,133	$	5,243	$	858,576



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

September 30, 2016
Residential Real Estate 1-4 Family
First liens	$	159,758	$	1,942	$	1,386	$	-	$	163,086
Junior liens and lines of credit		52,308		28		189		-		52,525
Total		212,066		1,970		1,575		-		215,611
Residential real estate - construction		7,833		-		823		-		8,656
Commercial real estate		360,788		359		14,169		-		375,316
Commercial		250,118		2,058		2,098		-		254,274
Consumer		4,719		-		-		-		4,719
Total	$	835,524	$	4,387	$	18,665	$	-	$	858,576



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
September 30, 2016
Residential real estate - construction	1	$	486	$	486	$	-	-	$	-
Residential real estate	5		879		728		151	-		-
Commercial real estate	11		12,211		10,930		1,281	1		1,281
Total	17	$	13,576	$	12,144	$	1,432	1	$	1,281


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 September 30, 2016:


	New During Period
	Number of		Pre-TDR		After-TDR		Recorded
Nine Months Ended September 30, 2016	Contracts		Modification		Modification		Investment	Concession
Commercial real estate	1	$	525	$	525	$	515	multiple
Residential real estate	1		238		238		238	maturity
Total	2	$	763	$	763	$	753