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Allowance for loan losses and credit quality
 12 Months Ended
Dec. 31, 2016
Loans and Leases Receivable, Allowance [Abstract]  
Allowance for Credit Losses [Text Block]
Allowance for Loan Losses and Credit Quality

Changes in the ALL, by class of loans, were as follows for the years ended:
December 31, 2016
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Unallocated
Total
 
(Dollars in thousands)
Balance, December 31, 2015
$
1,419

$
514

$
2,792

$
209

$
28

$
38

$
201

$
5,201

Provision (credit) for loan
   losses
64

(135
)
(105
)
158

5

2

161

150

Recoveries of amounts
   charged off
36

12

—

8

3

—

—

59

 
1,519

391

2,687

375

36

40

362

5,410

Amounts charged off
(120
)
—

—

(33
)
(10
)
—

—

(163
)
Balance, December 31, 2016
$
1,399

$
391

$
2,687

$
342

$
26

$
40

$
362

$
5,247

December 31, 2015
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Unallocated
Total
 
(Dollars in thousands)
Balance, December 31, 2014
$
1,330

$
439

$
2,417

$
176

$
27

$
42

$
263

$
4,694

Provision (credit) for loan
   losses
136

47

375

46

12

(4
)
(62
)
550

Recoveries of amounts
   charged off
36

28

—

16

3

—

—

83

 
1,502

514

2,792

238

42

38

201

5,327

Amounts charged off
(83
)
—

—

(29
)
(14
)
—

—

(126
)
Balance, December 31, 2015
$
1,419

$
514

$
2,792

$
209

$
28

$
38

$
201

$
5,201


December 31, 2014
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Unallocated
Total
 
(Dollars in thousands)
Balance, December 31, 2013
$
1,251

$
390

$
2,644

$
163

$
23

$
35

$
141

$
4,647

Provision (credit) for loan
   losses
177

37

(93
)
59

36

7

122

345

Recoveries of amounts
   charged off
1

12

8

8

13

—

—

42

 
1,429

439

2,559

230

72

42

263

5,034

Amounts charged off
(99
)
—

(142
)
(54
)
(45
)
—

—

(340
)
Balance, December 31, 2014
$
1,330

$
439

$
2,417

$
176

$
27

$
42

$
263

$
4,694



The allocation of the ALL, summarized on the basis of the Company's impairment methodology by class of loan, as of the balance sheet dates were as follows:
December 31, 2016
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Unallocated
Total
 
(Dollars in thousands)
Individually evaluated
   for impairment
$
63

$
—

$
40

$
—

$
—

$
—

$
—

$
103

Collectively evaluated
   for impairment
1,336

391

2,647

342

26

40

362

5,144

Total allocated
$
1,399

$
391

$
2,687

$
342

$
26

$
40

$
362

$
5,247


December 31, 2015
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Unallocated
Total
 
(Dollars in thousands)
Individually evaluated
   for impairment
$
109

$
—

$
227

$
21

$
—

$
—

$
—

$
357

Collectively evaluated
   for impairment
1,310

514

2,565

188

28

38

201

4,844

Total allocated
$
1,419

$
514

$
2,792

$
209

$
28

$
38

$
201

$
5,201



Despite the allocation shown in the tables above, the ALL is general in nature and is available to absorb losses from any class of loan.

The recorded investment in loans, summarized on the basis of the Company's impairment methodology by class of loan, as of the balance sheet dates were as follows:
December 31, 2016
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Total
 
(Dollars in thousands)
Individually evaluated
   for impairment
$
1,448

$
88

$
3,328

$
432

$
—

$
—

$
5,296

Collectively evaluated
   for impairment
171,279

34,101

245,735

41,567

3,962

31,350

527,994

Total
$
172,727

$
34,189

$
249,063

$
41,999

$
3,962

$
31,350

$
533,290


December 31, 2015
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Total
 
(Dollars in thousands)
Individually evaluated
   for impairment
$
1,197

$
92

$
3,094

$
493

$
—

$
—

$
4,876

Collectively evaluated
   for impairment
164,199

42,797

227,348

20,904

3,963

36,419

495,630

Total
$
165,396

$
42,889

$
230,442

$
21,397

$
3,963

$
36,419

$
500,506



Risk and collateral ratings are assigned to loans and are subject to ongoing monitoring by lending and credit personnel with such ratings updated annually or more frequently if warranted. The following is an overview of the Company's loan rating system:

1-3 Rating - Pass

Risk-rating grades "1" through "3" comprise loans ranging from those with lower than average credit risk, defined as borrowers with high liquidity, excellent financial condition, strong management, favorable industry trends or loans secured by highly liquid assets, through those with marginal credit risk, defined as borrowers that, while creditworthy, exhibit some characteristics requiring special attention by the account officer.

4/M Rating - Satisfactory/Monitor

Borrowers exhibit potential credit weaknesses or downward trends warranting management's attention. While potentially weak, these borrowers are currently marginally acceptable; no loss of principal or interest is envisioned. When warranted, these credits may be monitored on the watch list.

5-7 Rating - Substandard

Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. The loan may be inadequately protected by the net worth and paying capacity of the obligor and/or the underlying collateral is inadequate.

The following tables summarize the loan ratings applied to the Company's loans by class as of the balance sheet dates:
December 31, 2016
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Total
 
(Dollars in thousands)
Pass
$
158,140

$
29,248

$
182,247

$
38,219

$
3,928

$
31,350

$
443,132

Satisfactory/Monitor
10,641

4,830

62,193

3,109

34

—

80,807

Substandard
3,946

111

4,623

671

—

—

9,351

Total
$
172,727

$
34,189

$
249,063

$
41,999

$
3,962

$
31,350

$
533,290


December 31, 2015
Residential Real Estate
Construction Real Estate
Commercial Real Estate
Commercial
Consumer
Municipal
Total
 
(Dollars in thousands)
Pass
$
150,535

$
37,750

$
175,438

$
18,347

$
3,902

$
36,419

$
422,391

Satisfactory/Monitor
11,329

4,968

49,745

2,384

61

—

68,487

Substandard
3,532

171

5,259

666

—

—

9,628

Total
$
165,396

$
42,889

$
230,442

$
21,397

$
3,963

$
36,419

$
500,506



The following tables provide information with respect to impaired loans by class of loan as of and for the years ended December 31, 2016, 2015 and 2014:
 
December 31, 2016
For The Year Ended December 31, 2016
 
Recorded Investment
(1)
Principal Balance
(1)
Related Allowance
Average Recorded Investment
Interest Income Recognized
 
(Dollars in thousands)
Residential real estate
$
308

$
317

$
63

 
 
Commercial real estate
488

520

40

 
 
With an allowance recorded
796

837

103

 
 
 
 
 
 
 
 
Residential real estate
1,140

1,561

—

 
 
Construction real estate
88

88

—

 
 
Commercial real estate
2,840

2,910

—

 
 
Commercial
432

432

—

 
 
With no allowance recorded
4,500

4,991

—

 
 
 
 
 
 
 
 
Residential real estate
1,448

1,878

63

$
1,303

$
50

Construction real estate
88

88

—

90

4

Commercial real estate
3,328

3,430

40

3,113

107

Commercial
432

432

—

462

33

Total
$
5,296

$
5,828

$
103

$
4,968

$
194



 
December 31, 2015
For The Year Ended December 31, 2015
 
Recorded Investment
(1)
Principal Balance
(1)
Related Allowance
Average Recorded Investment
Interest Income Recognized
 
(Dollars in thousands)
Residential real estate
$
659

$
668

$
109

 
 
Commercial real estate
2,142

2,161

227

 
 
Commercial
493

493

21

 
 
With an allowance recorded
3,294

3,322

357

 
 
 
 
 
 
 
 
Residential real estate
538

697

—

 
 
Construction real estate
92

92

—

 
 
Commercial real estate
952

1,015

—

 
 
With no allowance recorded
1,582

1,804

—

 
 
 
 
 
 
 
 
Residential real estate
1,197

1,365

109

$
942

$
34

Construction real estate
92

92

—

162

19

Commercial real estate
3,094

3,176

227

3,523

219

Commercial
493

493

21

123

—

Total
$
4,876

$
5,126

$
357

$
4,750

$
272



 
December 31, 2014
For The Year Ended December 31, 2014
 
Recorded Investment
(1)
Principal Balance
(1)
Related Allowance
Average Recorded Investment
Interest Income Recognized
 
(Dollars in thousands)
Residential real estate
$
537

$
546

$
73

 
 
Commercial real estate
2,127

2,136

70

 
 
With an allowance recorded
2,664

2,682

143

 
 
 
 
 
 
 
 
Residential real estate
413

602

—

 
 
Construction real estate
275

298

—

 
 
Commercial real estate
1,205

1,256

—

 
 
Commercial
123

172

—

 
 
With no allowance recorded
2,016

2,328

—

 
 
 
 
 
 
 
 
Residential real estate
950

1,148

73

$
805

$
26

Construction real estate
275

298

—

314

14

Commercial real estate
3,332

3,392

70

3,883

195

Commercial
123

172

—

106

7

Total
$
4,680

$
5,010

$
143

$
5,108

$
242

____________________
(1)
Does not reflect government guaranties on impaired loans as of as of December 31, 2016, 2015 and 2014 totaling $637 thousand, $606 thousand and $244 thousand, respectively.

The following is a summary of TDR loans by class of loan as of the balance sheet dates:
 
December 31, 2016
December 31, 2015
 
Number of Loans
Principal Balance
Number of Loans
Principal Balance
 
(Dollars in thousands)
Residential real estate
20

$
1,448

11

$
1,197

Construction real estate
1

88

1

92

Commercial real estate
10

1,452

5

950

Commercial
2

431

2

493

Total
33

$
3,419

19

$
2,732


The TDR loans above represent loan modifications in which a concession was provided to the borrower, including due date extensions, maturity date extensions, interest rate reductions or the forgiveness of accrued interest. Troubled loans that are restructured and meet established thresholds are classified as impaired and a specific reserve amount is allocated to the ALL on the basis of the fair value of the collateral for collateral dependent loans, an observable market price, or the present value of anticipated future cash flows.

The following table provides new TDR activity by class of loan for the years ended December 31, 2016 and 2015:
 
New TDRs During the
New TDRs During the
 
Year Ended December 31, 2016
Year Ended December 31, 2015
 
Number of Contracts
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Number of Contracts
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
 
(Dollars in thousands)
Residential real estate
9

$
349

$
371

6

$
590

$
597

Commercial real estate
6

803

807

2

281

281

Commercial
—

—

—

2

493

493



At December 31, 2016 and 2015, there were no TDR loans modified within the previous twelve months that had subsequently defaulted during the years then ended. TDR loans are considered defaulted at 90 days past due.

At December 31, 2016 and 2015, the Company was not committed to lend any additional funds to borrowers whose loans were nonperforming, impaired or restructured.