Loans and Related Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2017

The following table summarizes the primary segments of the loan portfolio at March 31, 2017 and December 31, 2016:



(in thousands)	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Residential Mortgage		Consumer		Total
March 31, 2017

Individually evaluated for impairment	$	14,054	$	2,420	$	290	$	4,090	$	0	$	20,854
Collectively evaluated for impairment	$	280,727	$	104,988	$	74,303	$	389,898	$	23,762	$	873,678
Total loans	$	294,781	$	107,408	$	74,593	$	393,988	$	23,762	$	894,532

December 31, 2016

Individually evaluated for impairment	$	17,210	$	2,525	$	290	$	3,975	$	0	$	24,000
Collectively evaluated for impairment	$	280,749	$	101,757	$	72,056	$	389,441	$	23,923	$	867,926
Total loans	$	297,959	$	104,282	$	72,346	$	393,416	$	23,923	$	891,926

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The following table presents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention and Substandard within the internal risk rating system at March 31, 2017 and December 31, 2016:


(in thousands)	Pass		Special Mention		Substandard		Total
March 31, 2017
Commercial real estate
Non owner-occupied	$	137,837	$	9,083	$	9,881	$	156,801
All other CRE		125,049		207		12,724		137,980
Acquisition and development
1-4 family residential construction		15,630		0		0		15,630
All other A&D		90,503		62		1,213		91,778
Commercial and industrial		73,029		43		1,521		74,593
Residential mortgage
Residential mortgage - term		312,279		0		7,481		319,760
Residential mortgage - home equity		72,849		0		1,379		74,228
Consumer		23,630		0		132		23,762
Total	$	850,806	$	9,395	$	34,331	$	894,532

December 31, 2016
Commercial real estate
Non owner-occupied	$	137,181	$	10,620	$	9,357	$	157,158
All other CRE		125,720		3,121		11,960		140,801
Acquisition and development
1-4 family residential construction		15,845		0		0		15,845
All other A&D		87,135		65		1,237		88,437
Commercial and industrial		70,613		593		1,140		72,346
Residential mortgage
Residential mortgage - term		308,734		113		7,618		316,465
Residential mortgage - home equity		75,710		0		1,241		76,951
Consumer		23,794		0		129		23,923
Total	$	844,732	$	14,512	$	32,682	$	891,926

Loan Portfolio Summarized by the Past Due Status

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans at March 31, 2017 and December 31, 2016:



(in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days+ Past Due		Total Past Due and Accruing		Non-Accrual		Total Loans
March 31, 2017
Commercial real estate
Non owner-occupied	$	150,968	$	229	$	126	$	0	$	355	$	5,478	$	156,801
All other CRE		134,089		0		273		0		273		3,618		137,980
Acquisition and development
1-4 family residential construction		15,630		0		0		0		0		0		15,630
All other A&D		91,626		102		0		0		102		50		91,778
Commercial and industrial		74,558		0		25		10		35		0		74,593
Residential mortgage
Residential mortgage - term		316,129		1,887		208		84		2,179		1,452		319,760
Residential mortgage - home equity		72,983		718		158		74		950		295		74,228
Consumer		23,584		127		23		28		178		0		23,762
Total	$	879,567	$	3,063	$	813	$	196	$	4,072	$	10,893	$	894,532

December 31, 2016
Commercial real estate
Non owner-occupied	$	150,595	$	182	$	0	$	0	$	182	$	6,381	$	157,158
All other CRE		134,931		40		0		0		40		5,830		140,801
Acquisition and development
1-4 family residential construction		15,845		0		0		0		0		0		15,845
All other A&D		88,353		0		39		0		39		45		88,437
Commercial and industrial		72,324		9		2		11		22		0		72,346
Residential mortgage
Residential mortgage - term		310,721		517		3,376		312		4,205		1,539		316,465
Residential mortgage - home equity		75,558		974		198		70		1,242		151		76,951
Consumer		23,662		186		48		27		261		0		23,923
Total	$	871,989	$	1,908	$	3,663	$	420	$	5,991	$	13,946	$	891,926

Primary Segments of the Allowance for Loan Loss

The following table summarizes the primary segments of the ALL at March 31, 2017 and December 31, 2016, segregated by the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment:


(in thousands)	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Residential Mortgage		Consumer			Unallocated	Total
March 31, 2017

Individually evaluated for impairment	$	1,795	$	38	$	0	$	117	$	0	$	0	$	1,950
Collectively evaluated for impairment	$	3,772	$	845	$	936	$	3,385	$	195	$	500	$	9,633
Total ALL	$	5,567	$	883	$	936	$	3,502	$	195	$	500	$	11,583

December 31, 2016

Individually evaluated for impairment	$	177	$	40	$	0	$	43	$	0	$	0	$	260
Collectively evaluated for impairment	$	3,736	$	831	$	858	$	3,545	$	188	$	500	$	9,658
Total ALL	$	3,913	$	871	$	858	$	3,588	$	188	$	500	$	9,918

Impaired Loans and Related Interest Income by Loan Portfolio Class

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary at March 31, 2017 and December 31, 2016:


		Impaired Loans with Specific Allowance				Impaired Loans with No Specific Allowance		Total Impaired Loans
(in thousands)		Recorded Investment		Related Allowances		Recorded Investment		Recorded Investment		Unpaid Principal Balance
March 31, 2017
Commercial real estate
Non owner-occupied	$	5,607	$	1,641	$	251	$	5,858	$	8,831
All other CRE		432		154		7,764		8,196		8,809
Acquisition and development
1-4 family residential construction		0		0		582		582		582
All other A&D		244		38		1,594		1,838		2,112
Commercial and industrial		0		0		290		290		2,504
Residential mortgage
Residential mortgage - term		445		50		3,349		3,794		4,124
Residential mortgage – home equity		144		67		152		296		331
Consumer		0		0		0		0		0
Total impaired loans	$	6,872	$	1,950	$	13,982	$	20,854	$	27,293

December 31, 2016
Commercial real estate
Non owner-occupied	$	131	$	23	$	6,635	$	6,766	$	9,372
All other CRE		432		154		10,012		10,444		11,057
Acquisition and development
1-4 family residential construction		0		0		582		582		628
All other A&D		245		40		1,698		1,943		2,213
Commercial and industrial		0		0		290		290		2,504
Residential mortgage
Residential mortgage - term		61		43		3,763		3,824		4,249
Residential mortgage – home equity		0		0		151		151		168
Consumer		0		0		0		0		0
Total impaired loans	$	869	$	260	$	23,131	$	24,000	$	30,191

Allowance for Loan Losses Summarized by Loan Portfolio Segments

The following tables present the activity in the ALL for the three-month periods ended March 31, 2017 and 2016:


(in thousands)	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Residential Mortgage		Consumer			Unallocated	Total
ALL balance at January 1, 2017	$	3,913	$	871	$	858	$	3,588	$	188	$	500	$	9,918
Charge-offs		(429)		(18)		(33)		(148)		(84)		0		(712)
Recoveries		5		11		1,455		220		77		0		1,768
Provision		2,078		19		(1,344)		(158)		14		0		609
ALL balance at March 31, 2017	$	5,567	$	883	$	936	$	3,502	$	195	$	500	$	11,583

ALL balance at January 1, 2016	$	2,580	$	4,129	$	722	$	3,785	$	206	$	500	$	11,922
Charge-offs		(211)		0		(53)		(90)		(84)		0		(438)
Recoveries		0		100		30		32		42		0		204
Provision		931		(482)		59		32		28		0		568
ALL balance at March 31, 2016	$	3,300	$	3,747	$	758	$	3,759	$	192	$	500	$	12,256

Average of Impaired Loans and Related Interest Income by Loan Portfolio Class

As indicated in the table above, provision expense for the first quarter of 2017 was primarily driven by a specific allocation placed on a large participation loan on a mall in Pennsylvania in the CRE portfolio, offset by a net recovery of $1.3 million in the C&I portfolio relating to a prior charge-off on a loan to an ethanol plant.

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


	Three months ended						Three months ended
	March 31, 2017						March 31, 2016
(in thousands)	Average investment		Interest income recognized on an accrual basis		Interest income recognized on a cash basis		Average investment		Interest income recognized on an accrual basis		Interest income recognized on a cash basis
Commercial real estate
Non owner-occupied	$	6,366	$	6	$	0	$	1,597	$	6	$	0
All other CRE		9,320		53		0		13,093		37		0
Acquisition and development
1-4 family residential construction		582		6		0		700		8		0
All other A&D		1,891		23		0		3,869		24		0
Commercial and industrial		290		3		0		1,071		9		0
Residential mortgage
Residential mortgage - term		4,018		33		0		4,519		39		4
Residential mortgage – home equity		224		0		0		298		0		0
Consumer		0		0		0		0		0		0
Total	$	22,691	$	124	$	0	$	25,147	$	123	$	4

Modification of Troubled Debt Restructuring by Class

The following tables present the volume and recorded investment at the time of modification of TDRs by class and type of modification that occurred during the periods indicated:


	Temporary Rate Modification			Extension of Maturity			Modification of Payment and Other Terms
(in thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Three months ended March 31, 2017
Commercial real estate
Non owner-occupied	0	$	0	0	$	0	0	$	0
All other CRE	0		0	0		0	0		0
Acquisition and development
1-4 family residential construction	0		0	0		0	0		0
All other A&D	0		0	1		244	0		0
Commercial and industrial	0		0	0		0	0		0
Residential mortgage
Residential mortgage – term	0		0	1		259	0		0
Residential mortgage – home equity	0		0	0		0	0		0
Consumer	0		0	0		0	0		0
Total	0	$	0	2	$	503	0	$	0


	Temporary Rate Modification			Extension of Maturity			Modification of Payment and Other Terms
(in thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Three months ended March 31, 2016
Commercial real estate
Non owner-occupied	0	$	0	0	$	0	0	$	0
All other CRE	0		0	1		203	0		0
Acquisition and development
1-4 family residential construction	0		0	0		0	0		0
All other A&D	0		0	0		0	0		0
Commercial and industrial	0		0	0		0	1		486
Residential mortgage
Residential mortgage – term	0		0	0		0	1		72
Residential mortgage – home equity	0		0	0		0	0		0
Consumer	0		0	0		0	0		0
Total	0	$	0	1	$	203	2	$	558