Loans (Tables)

9 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Summary of Loans

Loans consist of the following:

(Dollars in thousands)	September 30, 2014		December 31, 2013
Commercial	$	126,843	$	117,478
Commercial real estate		141,417		129,828
Residential real estate		120,739		111,445
Construction & land development		12,855		13,444
Consumer		7,726		6,687
Total loans before deferred costs		409,580		378,882
Deferred loan costs		328		243
Total Loans	$	409,908	$	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 and nine month periods ended September 30, 2014 and 2013.

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development			Consumer			Unallocated			Total
Three months ended September 30, 2014
Beginning balance	$	1,322		$	2,087		$	1,158		$	51		$	43		$	402		$	5,063
Provision for possible loan losses		398			(240	)		(157	)		(11	)		45			88			123
Charge-offs		(5	)		(1	)		(1	)		—			(2	)					(9	)
Recoveries		2			1			5			—			3						11
Net charge-offs		(3	)		—			4			—			1						2
Ending balance	$	1,717		$	1,847		$	1,005		$	40		$	89		$	490		$	5,188
Nine months ended September 30, 2014
Beginning balance	$	1,219		$	1,872		$	1,205		$	178		$	91		$	520		$	5,085
Provision for possible loan losses		512			328			(206	)		(138	)		(8	)		(30	)		458
Charge-offs		(24	)		(354	)		(6	)		—			(5	)					(389	)
Recoveries		10			1			12			—			11						34
Net charge-offs		(14	)		(353	)		6			—			6						(355	)
Ending balance	$	1,717		$	1,847		$	1,005		$	40		$	89		$	490		$	5,188
Three months ended September 30, 2013
Beginning balance	$	1,316		$	1,815		$	1,174		$	162		$	144		$	334		$	4,945
Provision for possible loan losses		27			(5	)		95			18			(48	)		123			210
Charge-offs		(54	)		—			(28	)		—			(9	)					(91	)
Recoveries		5			—			3			—			5						13
Net charge-offs		(49	)		—			(25	)		—			(4	)					(78	)
Ending balance	$	1,294		$	1,810		$	1,244		$	180		$	92		$	457		$	5,077
Nine months ended September 30, 2013
Beginning balance	$	933		$	1,902		$	1,096		$	253		$	76		$	320		$	4,580
Provision for possible loan losses		455			(41	)		162			(73	)		(10	)		137			630
Charge-offs		(112	)		(51	)		(28	)		—			(11	)					(202	)
Recoveries		18			—			14			—			37						69
Net charge-offs		(94	)		(51	)		(14	)		—			26						(133	)
Ending balance	$	1,294		$	1,810		$	1,244		$	180		$	92		$	457		$	5,077

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 September 30, 2014 and December 31, 2013:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
September 30, 2014
Allowance for loan losses:
Individually evaluated for impairment	$	862	$	343	$	85	$	—	$	—	$	—	$	1,290
Collectively evaluated for impairment		855		1,504		920		40		89		490		3,898
Total ending allowance balance	$	1,717	$	1,847	$	1,005	$	40	$	89	$	490	$	5,188
Loans:
Loans individually evaluated for impairment	$	6,757	$	1,393	$	1,691	$	—	$	—			$	9,841
Loans collectively evaluated for impairment		120,086		140,024		119,048		12,855		7,726				399,739
Total ending loans balance	$	126,843	$	141,417	$	120,739	$	12,855	$	7,726			$	409,580
December 31, 2013
Allowance for loan losses:
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 September 30, 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
September 30, 2014
Commercial	$	6,855	$	4,617	$	2,154	$	6,771	$	862
Commercial real estate		1,528		220		1,172		1,392		343
Residential real estate		1,806		901		793		1,694		85
Total impaired loans	$	10,189	$	5,738	$	4,119	$	9,857	$	1,290
December 31, 2013
Commercial	$	5,595	$	7	$	5,580	$	5,587	$	241
Commercial real estate		3,540		563		2,658		3,221		331
Residential real estate		2,001		337		1,510		1,847		212
Total impaired loans	$	11,136	$	907	$	9,748	$	10,655	$	784

Schedule of Average Recorded Investment in Impaired Loans and Related Interest Income Recognized

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	Three months ended September 30,				Nine months ended September 30,
(Dollars in thousands)	2014		2013		2014		2013
Average recorded investment:
Commercial	$	7,148	$	3,777	$	6,780	$	3,917
Commercial real estate		2,811		3,518		3,328		3,730
Residential real estate		1,775		499		1,832		1,270
Construction & land development		—		—		—		28
Average recorded investment in impaired loans	$	12,324	$	7,794	$	11,940	$	8,945
Interest income recognized:
Commercial	$	53	$	41	$	156	$	126
Commercial real estate		6		40		76		125
Residential real estate		15		—		46		29
Construction & land development		—		—		—		2
Interest income recognized on a cash basis on impaired loans	$	74	$	81	$	278	$	282

Schedule of Aging of Past Due and Nonaccrual Loans

The following table presents the aging of past due loans and nonaccrual loans as of September 30, 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
September 30, 2014
Commercial	$	124,561	$	119	$	—	$	—	$	2,163	$	2,282	$	126,843
Commercial real estate		139,318		517		105		100		1,377		2,099		141,417
Residential real estate		119,003		357		348		67		964		1,736		120,739
Construction & land development		12,844		—		—		11		—		11		12,855
Consumer		7,592		131		3		—		—		134		7,726
Total Loans	$	403,318	$	1,124	$	456	$	178	$	4,504	$	6,262	$	409,580
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

The following table presents loans restructured during the nine month period ended September 30, 2014 and the three and nine month periods ended September 30, 2013. 

(Dollars in thousands)	Number of loans restructured		Pre- Modification Recorded Investment		Post- Modification Recorded Investment
For the Nine Months Ended September 30, 2014
Residential Real Estate		1	$	84	$	84
Total Restructured Loans		1	$	84	$	84
For the Three Months Ended September 30, 2013
Commercial		1	$	7	$	7
Residential Real Estate		2		188		188
Total Restructured Loans		3	$	195	$	195
For the Nine Months Ended September 30, 2013
Commercial		3	$	83	$	83
Residential Real Estate		2		188		188
Total Restructured Loans		5	$	271	$	271

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 September 30, 2014 and December 31, 2013:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
September 30, 2014
Commercial	$	113,425	$	4,545	$	7,770	$	—	$	1,103	$	126,843
Commercial real estate		131,925		5,256		3,730		—		506		141,417
Residential real estate		219		—		41		—		120,479		120,739
Construction & land development		8,895		1,976		—		—		1,984		12,855
Consumer		—		—		—		—		7,726		7,726
Total	$	254,464	$	11,777	$	11,541	$	—	$	131,798	$	409,580
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 September 30, 2014 and December 31, 2013.  

(Dollars in thousands)	Performing		Non-Performing		Total
September 30, 2014
Commercial	$	1,103	$	—	$	1,103
Commercial real estate		506		—		506
Residential real estate		119,489		990		120,479
Construction & land development		1,984		—		1,984
Consumer		7,726		—		7,726
Total	$	130,808	$	990	$	131,798
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