Loans (Tables)

3 Months Ended

Mar. 31, 2014

Loans consist of the following:


(Dollars in thousands)	March 31, 2014		December 31, 2013
Commercial	$	132,140	$	117,478
Commercial real estate		142,229		129,828
Residential real estate		114,916		111,445
Construction & land development		11,365		13,444
Consumer		6,841		6,687

Total loans before deferred costs		407,491		378,882
Deferred loan costs		279		243

Total Loans	$	407,770	$	379,125

Schedule of Allowances for Loan Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the three month periods ended March 31, 2014 and 2013.


(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development			Consumer			Unallocated			Total
Three months ended March 31, 2014
Beginning balance	$	1,219		$	1,872		$	1,205		$	178		$	91		$	520		$	5,085
Provision for possible loan losses		(72	)		517			(151	)		(33	)		(12	)		(64	)		185
Charge-offs		(8	)		(197	)		(4	)		—			(8	)					(217	)
Recoveries		2			—			4			—			6						12

Net charge-offs		(6	)		(197	)		—			—			(2	)					(205	)

Ending balance	$	1,141		$	2,192		$	1,054		$	145		$	77		$	456		$	5,065


Three months ended March 31, 2013
Beginning balance	$	933		$	1,902		$	1,096		$	253		$	76		$	320		$	4,580
Provision for possible loan losses		242			(78	)		177			(119	)		(12	)		—			210
Charge-offs		(6	)		—			—			—			(10	)					(16	)
Recoveries		7			—			9			—			14						30

Net charge-offs		1			—			9			—			4						14

Ending balance	$	1,176		$	1,824		$	1,282		$	134		$	68		$	320		$	4,804

Allowances for Loan Losses and Ending Balances by Portfolio Segment and Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio segment and based on the impairment method as of March 31, 2014 and December 31, 2013:


(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction & Land Development		Consumer		Unallocated		Total
March 31, 2014
Allowance for loan losses:
Ending allowance balances attributable to loans:
Individually evaluated for impairment	$	225	$	443	$	209	$	—	$	—	$	—	$	877
Collectively evaluated for impairment		916		1,749		845		145		77		456		4,188

Total ending allowance balance	$	1,141	$	2,192	$	1,054	$	145	$	77	$	456	$	5,065


Loans:
Loans individually evaluated for impairment	$	6,543	$	3,731	$	1,900	$	—	$	—			$	12,174
Loans collectively evaluated for impairment		125,597		138,498		113,016		11,365		6,841				395,317

Total ending loans balance	$	132,140	$	142,229	$	114,916	$	11,365	$	6,841			$	407,491


December 31, 2013
Allowance for loan losses:
Ending allowance balances attributable to loans:
Individually evaluated for impairment	$	241	$	331	$	212	$	—	$	—	$	—	$	784
Collectively evaluated for impairment		978		1,541		993		178		91		520		4,301

Total ending allowance balance	$	1,219	$	1,872	$	1,205	$	178	$	91	$	520	$	5,085


Loans:
Loans individually evaluated for impairment	$	5,576	$	3,220	$	1,844	$	—	$	—			$	10,640
Loans collectively evaluated for impairment		111,902		126,608		109,601		13,444		6,687				368,242

Total ending loans balance	$	117,478	$	129,828	$	111,445	$	13,444	$	6,687			$	378,882

Schedule of Impairment by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2014 and December 31, 2013:


(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
March 31, 2014
Commercial	$	6,584	$	65	$	6,493	$	6,558	$	225	$	6,156	$	246
Commercial real estate		4,258		367		3,364		3,731		443		3,697		142
Residential real estate		2,067		713		1,175		1,888		209		1,477		47
Construction & land development		—		—		—		—		—		—		—

Total impaired loans	$	12,909	$	1,145	$	11,032	$	12,177	$	877	$	11,330	$	435


December 31, 2013
Commercial	$	5,595	$	7	$	5,580	$	5,587	$	241	$	4,185	$	182
Commercial real estate		3,540		563		2,658		3,221		331		3,650		163
Residential real estate		2,001		337		1,510		1,847		212		1,315		41
Construction & land development		—		—		—		—		—		21		2

Total impaired loans	$	11,136	$	907	$	9,748	$	10,655	$	784	$	9,171	$	388

Schedule of Aging of Past Due and Nonaccrual Loans

The following table presents the aging of past due loans and nonaccrual loans as of March 31, 2014 and December 31, 2013 by class of loans:


(Dollars in thousands)	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
March 31, 2014
Commercial	$	129,874	$	35	$	4	$	1	$	2,226	$	2,266	$	132,140
Commercial real estate		140,123		470		—		—		1,636		2,106		142,229
Residential real estate		113,351		426		63		36		1,040		1,565		114,916
Construction & land development		11,015		—		—		350		—		350		11,365
Consumer		6,720		67		52		2		—		121		6,841

Total Loans	$	401,083	$	998	$	119	$	389	$	4,902	$	6,408	$	407,491


December 31, 2013
Commercial	$	117,342	$	15	$	37	$	—	$	84	$	136	$	117,478
Commercial real estate		128,462		111		107		40		1,108		1,366		129,828
Residential real estate		109,274		616		467		46		1,042		2,171		111,445
Construction & land development		12,494		—		—		950		—		950		13,444
Consumer		6,524		123		40		—		—		163		6,687

Total Loans	$	374,096	$	865	$	651	$	1,036	$	2,234	$	4,786	$	378,882

Summary of Troubled Debt Restructurings

Loan modifications that are considered TDR’s completed during the three month period ended March 31, 2014 were as follows:


(Dollars in thousands)	Number of loans restructured		Pre- Modification Recorded Investment		Post- Modification Recorded Investment
For the Three Months Ended March 31, 2014
Residential Real Estate		1	$	84	$	84

Total Restructured Loans		1	$	84	$	84

Summary of Loans by Credit Quality Indicator

Based on the most recent analysis performed, the risk category of loans by class is as follows as of March 31, 2014 and December 31, 2013:


(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
March 31, 2014
Commercial	$	111,528	$	14,422	$	5,250	$	—	$	940	$	132,140
Commercial real estate		127,895		9,186		3,785		—		1,363		142,229
Residential real estate		233		—		45		—		114,638		114,916
Construction & land development		7,566		1,072		1,884		—		843		11,365
Consumer		—		—		—		—		6,841		6,841

Total	$	247,222	$	24,680	$	10,964	$	—	$	124,625	$	407,491

December 31, 2013
Commercial	$	101,195	$	10,352	$	5,066	$	—	$	865	$	117,478
Commercial real estate		115,265		9,076		4,041		—		1,446		129,828
Residential real estate		237		—		47		—		111,161		111,445
Construction & land development		9,470		587		1,884		—		1,503		13,444
Consumer		—		—		—		—		6,687		6,687

Total	$	226,167	$	20,015	$	11,038	$	—	$	121,662	$	378,882

Schedule of Loans Not Rated by Class of Loans

The following table presents loans that are not rated by class of loans as of March 31, 2014 and December 31, 2013.


(Dollars in thousands)	Performing		Non-Performing		Total
March 31, 2014
Commercial	$	939	$	1	$	940
Commercial real estate		1,363		—		1,363
Residential real estate		113,607		1,031		114,638
Construction & land development		843		—		843
Consumer		6,839		2		6,841

Total	$	123,591	$	1,034	$	124,625

December 31, 2013
Commercial	$	865	$	—	$	865
Commercial real estate		1,446		—		1,446
Residential real estate		110,119		1,042		111,161
Construction & land development		1,503		—		1,503
Consumer		6,687		—		6,687

Total	$	120,620	$	1,042	$	121,662