Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2014

	(Dollars in Thousands)
	June 30, 2014			December 31, 2013

Commercial	$	45,712		$	45,254
Commercial real estate:
Construction	15,668			15,052
Other	167,271			154,975
Residential real estate	77,267			74,040
Consumer:
Auto	2,088			2,544
Other	3,449			3,203
Total loans	311,455			295,068
Less allowance for loan losses	(4,953		)	(4,653		)
Net loans	$	306,502		$	290,415

Schedule of activity in the allowance for loan losses

The following table sets forth an analysis of our allowance for loan losses for the three months ending June 30, 2014 and 2013.

	(Dollars In Thousands)
	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated		Total
June 30, 2014 Allowance for loan losses:
Beginning balance	$	937		$	3,013	$	699		$	71		$	107	$	4,827
Provision for loan losses	(77		)	165		15			5			42		150
Loans charged-off	—			—		(71		)	(10		)	—		(81		)
Recoveries	42			11		3			1			—		57
Total ending allowance balance	$	902		$	3,189	$	646		$	67		$	149	$	4,953

	(Dollars In Thousands)
	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated		Total
June 30, 2013 Allowance for loan losses:
Beginning balance	$	3,282		$	2,584	$	507		$	81		$	196	$	6,650
Provision for loan losses	(714		)	656		30			(3		)	81		50
Loans charged-off	(653		)	—		(19		)	(6		)	—		(678		)
Recoveries	7			31		3			1			—		42
Total ending allowance balance	$	1,922		$	3,271	$	521		$	73		$	277	$	6,064

The following table sets forth an analysis of our allowance for loan losses for the six months ending June 30, 2014 and 2013.

	(Dollars In Thousands)
	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated			Total
June 30, 2014 Allowance for loan losses:
Beginning balance	$	1,420		$	2,079	$	703		$	86		$	365		$	4,653
Provision for loan losses	(577		)	1,052		24			(8		)	(216		)	275
Loans charged-off	—			—		(90		)	(13		)	—			(103		)
Recoveries	59			58		9			2			—			128
Total ending allowance balance	$	902		$	3,189	$	646		$	67		$	149		$	4,953

	(Dollars In Thousands)
	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Unallocated		Total
June 30, 2013 Allowance for loan losses:
Beginning balance	$	2,156		$	2,635		$	589		$	90		$	251	$	5,721
Provision for loan losses	746			590			(60		)	(2		)	26		1,300
Loans charged-off	(987		)	(14		)	(19		)	(17		)	—		(1,037		)
Recoveries	7			60			11			2			—		80
Total ending allowance balance	$	1,922		$	3,271		$	521		$	73		$	277	$	6,064

Schedule of balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method

	(Dollars In Thousands)
	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Unallocated		Total
June 30, 2014 Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	147	$	389	$	60	$	17	$	—	$	613
Collectively evaluated	755		2,800		586		50		149		4,340
Total ending allowance balance	$	902	$	3,189	$	646	$	67	$	149	$	4,953
Loans:
Individually evaluated for impairment	$	2,617	$	1,561	$	1,261	$	30	$	—	$	5,469
Collectively evaluated	43,095		181,378		76,006		5,507		—		305,986
Total ending loans balance	$	45,712	$	182,939	$	77,267	$	5,537	$	—	$	311,455

	(Dollars In Thousands)
	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Unallocated		Total
December 31, 2013 Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	676	$	369	$	307	$	35	$	—	$	1,387
Collectively evaluated	744		1,710		396		51		365		3,266
Total ending allowance balance	$	1,420	$	2,079	$	703	$	86	$	365	$	4,653
Loans:
Individually evaluated for impairment	$	3,085	$	2,021	$	1,383	$	36	$	—	$	6,525
Collectively evaluated	42,169		168,006		72,657		5,711		—		288,543
Total ending loans balance	$	45,254	$	170,027	$	74,040	$	5,747	$	—	$	295,068

Schedule of impaired loans by class of loans

	(Dollars in Thousands) June 30, 2014						(Dollars in Thousands) December 31, 2013
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial	$	783	$	783	$	—	$	1,880	$	1,880	$	—
Commercial real estate:
Construction	—		—		—		—		—		—
Other	111		111		—		843		843		—
Residential real estate	1,037		1,037		—		337		337		—
Consumer:
Auto	—		—		—		1		1		—
Other	—		—		—		—		—		—
Subtotal	1,931		1,931		—		3,061		3,061		—
With an allowance recorded:
Commercial	1,834		1,834		147		1,205		1,205		676
Commercial real estate:
Construction	—		—		—		—		—		—
Other	1,450		1,450		389		1,178		1,178		369
Residential real estate	224		224		60		1,046		1,046		307
Consumer:
Auto	17		17		17		21		21		21
Other	13		13		—		14		14		14
Subtotal	3,538		3,538		613		3,464		3,464		1,387
Total	$	5,469	$	5,469	$	613	$	6,525	$	6,525	$	1,387

Information on impaired loans for the three months ending June 30, 2014 and 2013 is as follows:

	(Dollars in Thousands) June 30, 2014						(Dollars in Thousands) June 30, 2013
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
Commercial	$	2,710	37		26		$	6,287	99		52
Commercial real estate:
Construction	—		—		—		—		—		—
Other	1,547		20		15		7,607		120		13
Residential real estate	1,305		16		11		682		13		8
Consumer:
Auto	18		—		—		27		—		—
Other	13		—		—		4		—		—
Total	$	5,593	$	73	$	52	$	14,607	$	232	$	73

Information on impaired loans for the six months ending June 30, 2014 and 2013 is as follows:

	(Dollars in Thousands) June 30, 2014						(Dollars in Thousands) June 30, 2013
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
Commercial	$	2,851	68		53		$	5,851	161		94
Commercial real estate:
Construction	—		—		—		—		—		—
Other	1,791		40		29		7,128		208		44
Residential real estate	1,322		31		20		528		16		9
Consumer:
Auto	19		1		—		28		1		—
Other	14		—		—		3		—		—
Total	$	5,997	$	140	$	102	$	13,538	$	386	$	147

Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans

	(Dollars in Thousands) As of June 30, 2014				(Dollars in Thousands) As of December 31, 2013
	Loans Past Due Over 90 Days and Still Accruing		Nonaccrual		Loans Past Due Over 90 Days and Still Accruing		Nonaccrual

Commercial	$	—	$	816	$	—	$	153
Commercial real estate:
Construction	—		—		—		—
Other	—		535		—		362
Residential real estate	42		473		—		643
Consumer:
Auto	—		17		—		22
Other	—		—		—		—
Total	$	42	$	1,841	$	—	$	1,180

Schedule of aging of the recorded investment in past due loans by class of loans

	(Dollars In Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Loans Not Past Due		Total
June 30, 2014
Commercial	$	181	$	—	$	688	$	869	$	44,843	$	45,712
Commercial real estate:
Construction	—		—		—		—		15,668		15,668
Other	—		45		440		485		166,786		167,271
Residential real estate	68		23		513		604		76,663		77,267
Consumer:
Auto	—		—		—		—		2,088		2,088
Other	—		—		—		—		3,449		3,449
Total	$	249	$	68	$	1,641	$	1,958	$	309,497	$	311,455

	(Dollars In Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Loans Not Past Due		Total
December 31, 2013
Commercial	$	53	$	—	$	—	$	53	$	45,201	$	45,254
Commercial real estate:
Construction	—		—		—		—		15,052		15,052
Other	321		—		303		624		154,351		154,975
Residential real estate	98		66		574		738		73,302		74,040
Consumer:
Auto	6		1		—		7		2,537		2,544
Other	—		—		—		—		3,203		3,203
Total	$	478	$	67	$	877	$	1,422	$	293,646	$	295,068

Schedule of loans by class modified as troubled debt restructurings

The following table presents loans by class modified as troubled debt restructurings outstanding as of June 30, 2014:

		(Dollars in thousands)
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial	6	$	3,326	$	3,326
Commercial real estate:
Other	3	1,109		1,109
Residential real estate	4	757		759
Consumer	1	16		15
Total	14	$	5,208	$	5,209

The following table presents loans by class modified as troubled debt restructurings outstanding as of December 31, 2013:

		(Dollars in thousands)
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial	10	$	2,716	$	2,716
Commercial real estate:
Other	1	604		604
Residential real estate	3	841		854
Consumer other	1	16		15
Total	15	$	4,177	$	4,189

The following table presents loans by class modified as troubled debt restructurings that occurred during the quarter ending June 30, 2014:

		(Dollars in thousands)
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial real estate	1	$	924	$	924
Total	1	$	924	$	924

The following table presents loans by class modified as troubled debt restructurings that occurred during the quarter ending June 30, 2013:

		(Dollars in thousands)
	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings:
Commercial	4	$	795	$	1,195
Total	4	$	795	$	1,195

Schedule of risk category of loans by class of loans based on the most recent analyses performed

	Pass		Special Mention		Substandard		Doubtful		Total
June 30, 2014
Commercial	$	41,754	$	69	$	3,889	$	—	$	45,712
Commercial real estate:
Construction	15,668		—		—		—		15,668
Other	159,994		—		7,277		—		167,271
Residential real estate	76,259		161		847		—		77,267
Consumer
Auto	2,088		—		—		—		2,088
Other	3,442		—		7		—		3,449
Total	$	299,205	$	230	$	12,020	$	—	$	311,455

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2013
Commercial	$	41,968	$	77	$	3,209	$	—	$	45,254
Commercial real estate:
Construction	15,052		—		—		—		15,052
Other	147,429		—		7,546		—		154,975
Residential real estate	72,264		164		1,612		—		74,040
Consumer:
Auto	2,543		—		1		—		2,544
Other	3,203		—		—		—		3,203
Total	$	282,459	$	241	$	12,368	$	—	$	295,068