Loans Receivable and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2014

Loans Receivable and Allowance for Loan Losses [Abstract]

The following table sets forth the Company’s gross loans by major categories as of September 30, 2014, and December 31, 2013:

(dollars in thousands)	September 30, 2014			December 31, 2013

Commercial real estate	$	366,611		$	342,794
Construction and land development		38,236			23,977
Commercial and industrial		134,340			118,209
Owner occupied real estate		172,642			160,229
Consumer and other		38,365			31,981
Residential mortgage		2,314			2,359
Total loans receivable		752,508			679,549
Deferred costs (fees)		(475	)		(238	)
Allowance for loan losses		(12,216	)		(12,263	)
Net loans receivable	$	739,817		$	667,048

Impaired Loans By Loan Portfolio Class

The following table summarizes information with regard to impaired loans by loan portfolio class as of September 30, 2014 and December 31, 2013:

	September 30, 2014						December 31, 2013
(dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial real estate	$	6,528	$	6,533	$	-	$	6,850	$	6,971	$	-
Construction and land development		61		158		-		902		4,076		-
Commercial and industrial		3,487		6,635		-		2,043		2,882		-
Owner occupied real estate		827		827		-		542		862		-
Consumer and other		437		711		-		453		711		-
Total	$	11,340	$	14,864	$	-	$	10,790	$	15,502	$	-

With an allowance recorded
Commercial real estate	$	13,119	$	13,245	$	3,856	$	13,044	$	13,044	$	3,679
Construction and land development		516		3,741		211		716		3,867		237
Commercial and industrial		2,432		2,718		1,276		4,889		7,634		1,254
Owner occupied real estate		3,877		3,879		838		2,891		2,891		430
Consumer and other		-		-		-		203		210		10
Total	$	19,944	$	23,583	$	6,181	$	21,743	$	27,646	$	5,610

Total
Commercial real estate	$	19,647	$	19,778	$	3,856	$	19,894	$	20,015	$	3,679
Construction and land development		577		3,899		211		1,618		7,943		237
Commercial and industrial		5,919		9,353		1,276		6,932		10,516		1,254
Owner occupied real estate		4,704		4,706		838		3,433		3,753		430
Consumer and other		437		711		-		656		921		10
Total	$	31,284	$	38,447	$	6,181	$	32,533	$	43,148	$	5,610

Average Of Impaired Loans And Related Interest Income By Loan Portfolio Class

The following table presents additional information regarding the Company’s impaired loans for the three months ended September 30, 2014 and September 30, 2013:

	Three Months Ended September 30,
	2014				2013
(dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	6,578	$	88	$	12,063	$	178
Construction and land development		229		-		1,421		3
Commercial and industrial		3,290		10		3,034		7
Owner occupied real estate		806		2		465		4
Consumer and other		457		-		538		-
Total	$	11,360	$	100	$	17,521	$	192

With an allowance recorded:
Commercial real estate	$	13,150	$	(3	)	$	1,925	$	10
Construction and land development		551		-			545		-
Commercial and industrial		2,851		-			3,392		14
Owner occupied real estate		3,686		26			3,013		37
Consumer and other		17		-			163		-
Total	$	20,255	$	23		$	9,038	$	61

Total:
Commercial real estate	$	19,728	$	85	$	13,988	$	188
Construction and land development		780		-		1,966		3
Commercial and industrial		6,141		10		6,426		21
Owner occupied real estate		4,492		28		3,478		41
Consumer and other		474		-		701		-
Total	$	31,615	$	123	$	26,559	$	253

If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately $232,000 and $113,000 for the three months ended September 30, 2014 and 2013, respectively.

The following table presents additional information regarding the Company’s impaired loans for the nine months ended September 30, 2014 and September 30, 2013:

	Nine Months Ended September 30,
	2014				2013
(dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	6,682	$	300	$	15,865	$	599
Construction and land development		563		-		2,217		32
Commercial and industrial		2,896		11		2,968		18
Owner occupied real estate		762		4		299		4
Consumer and other		495		1		700		1
Total	$	11,398	$	316	$	22,049	$	654

With an allowance recorded:
Commercial real estate	$	13,216	$	5	$	4,565	$	71
Construction and land development		617		-		445		-
Commercial and industrial		3,691		-		3,628		42
Owner occupied real estate		3,304		96		3,201		110
Consumer and other		51		-		87		-
Total	$	20,879	$	101	$	11,926	$	223

Total:
Commercial real estate	$	19,898	$	305	$	20,430	$	670
Construction and land development		1,180		-		2,662		32
Commercial and industrial		6,587		11		6,596		60
Owner occupied real estate		4,066		100		3,500		114
Consumer and other		546		1		787		1
Total	$	32,277	$	417	$	33,975	$	877

Activity In And Ending Balances Of The Allowance For Loan Losses By Loan Portfolio Class

The following tables provide the activity in and ending balances of the allowance for loan losses by loan portfolio class at and for the three and nine months ended September 30, 2014 and 2013:

(dollars in thousands)	Commercial Real Estate				Construction and Land Development				Commercial and Industrial				Owner Occupied Real Estate				Consumer and Other			Residential Mortgage			Unallocated				Total

Three months ended September 30, 2014
Allowance for loan losses:

Beginning balance:		$	6,776			$	1,024			$	2,791			$	1,129			$	220		$	13		$	110			$	12,063
Charge-offs			(176	)			(83	)			(152	)			-				-			-			-				(411	)
Recoveries			-				213				51				-				-			-			-				264
Provisions (credits)			98				(25	)			(165	)			436				6			-			(50	)			300

Ending balance		$	6,698			$	1,129			$	2,525			$	1,565			$	226		$	13		$	60			$	12,216

Three months ended September 30, 2013
Allowance for loan losses:

Beginning balance:		$	3,581			$	2,502			$	1,997			$	986			$	191		$	14		$	61			$	9,332
Charge-offs			(882	)			(5	)			-				(2	)			-			-			-				(889	)
Recoveries			-				-				10				-				1			-			-				11
Provisions (credits)			41				(473	)			(174	)			(17	)			20			-			853				250

Ending balance		$	2,740			$	2,024			$	1,833			$	967			$	212		$	14		$	914			$	8,704

(dollars in thousands)	Commercial Real Estate				Construction and Land Development				Commercial and Industrial				Owner Occupied Real Estate				Consumer and Other				Residential Mortgage				Unallocated				Total

Nine months ended September 30, 2014
Allowance for loan losses:

Beginning balance:		$	6,454			$	1,948			$	2,309			$	985			$	225			$	14			$	328			$	12,263
Charge-offs			(364	)			(103	)			(435	)			-				(10	)			-				-				(912	)
Recoveries			-				213				52				-				-				-				-				265
Provisions (credits)			608				(929	)			599				580				11				(1	)			(268	)			600

Ending balance		$	6,698			$	1,129			$	2,525			$	1,565			$	226			$	13			$	60			$	12,216

Nine months ended September 30, 2013
Allowance for loan losses:

Beginning Balance:		$	3,979			$	1,273			$	1,880			$	1,967			$	234			$	17			$	192			$	9,542
Charge-offs			(1,291	)			(60	)			(361	)			(321	)			(75	)			-				-				(2,108	)
Recoveries			54				-				15				-				26				-				-				95
Provisions (credits)			(2	)			811				299				(679	)			27				(3	)			722				1,175

Ending balance		$	2,740			$	2,024			$	1,833			$	967			$	212			$	14			$	914			$	8,704

The following tables provide a summary of the allowance for loan losses and balance of loans receivable by loan class and by impairment method as of September 30, 2014 and December 31, 2013:

(dollars in thousands)	Commercial Real Estate			Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Unallocated		Total

September 30, 2014
Allowance for loan losses:
Individually evaluated for impairment		$	3,856	$	211	$	1,276	$	838	$	-	$	-	$	-		$	6,181
Collectively evaluated for impairment			2,842		918		1,249		727		226		13		60			6,035
Total allowance for loan losses		$	6,698	$	1,129	$	2,525	$	1,565	$	226	$	13	$	60		$	12,216

Loans receivable:
Loans evaluated individually		$	19,647	$	577	$	5,919	$	4,704	$	437	$	-	$	-		$	31,284
Loans evaluated collectively			346,964		37,659		128,421		167,938		37,928		2,314		-			721,224
Total loans receivable		$	366,611	$	38,236	$	134,340	$	172,642	$	38,365	$	2,314	$	-		$	752,508

(dollars in thousands)	Commercial Real Estate		Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Unallocated		Total
December 31, 2013
Allowance for loan losses:
Individually evaluated for impairment	$	3,679	$	237	$	1,254	$	430	$	10	$	-	$	-	$	5,610
Collectively evaluated for impairment		2,775		1,711		1,055		555		215		14		328		6,653
Total allowance for loan losses	$	6,454	$	1,948	$	2,309	$	985	$	225	$	14	$	328	$	12,263

Loans receivable:
Loans evaluated individually	$	19,894	$	1,618	$	6,932	$	3,433	$	656	$	-	$	-	$	32,533
Loans evaluated collectively		322,900		22,359		111,277		156,796		31,325		2,359		-		647,016
Total loans receivable	$	342,794	$	23,977	$	118,209	$	160,229	$	31,981	$	2,359	$	-	$	679,549

Past Due Financing Receivables

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of September 30, 2014 and December 31, 2013:

(dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			Greater than 90 Days			Total Past Due			Current			Total Loans Receivable			Loans Receivable > 90 Days and Accruing
At September 30, 2014
Commercial real estate		$	15,714		$	-		$	14,674		$	30,388		$	336,223		$	366,611		$	131
Construction and land development			-			-			577			577			37,659			38,236			-
Commercial and industrial			1,371			-			5,028			6,399			127,941			134,340			-
Owner occupied real estate			605			-			2,459			3,064			169,578			172,642			-
Consumer and other			31			-			437			468			37,897			38,365			-
Residential mortgage			-			-			-			-			2,314			2,314			-
Total		$	17,721		$	-		$	23,175		$	40,896		$	711,612		$	752,508		$	131

(dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			Greater than 90 Days			Total Past Due			Current			Total Loans Receivable			Loans Receivable > 90 Days and Accruing
At December 31, 2013
Commercial real estate		$	19,707		$	5,635		$	1,104		$	26,446		$	316,348		$	342,794		$	-
Construction and land development			-			-			1,618			1,618			22,359			23,977			-
Commercial and industrial			951			71			6,837			7,859			110,350			118,209			-
Owner occupied real estate			808			1,281			205			2,294			157,935			160,229			-
Consumer and other			38			-			656			694			31,287			31,981			-
Residential mortgage			-			-			-			-			2,359			2,359			-
Total		$	21,504		$	6,987		$	10,420		$	38,911		$	640,638		$	679,549		$	-

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 rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of September 30, 2014 and December 31, 2013:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At September 30, 2014:
Commercial real estate	$	328,556	$	17,870	$	20,185	$	-	$	366,611
Construction and land development		37,659		-		577		-		38,236
Commercial and industrial		127,572		720		6,048		-		134,340
Owner occupied real estate		166,376		1,562		4,704		-		172,642
Consumer and other		37,595		75		695		-		38,365
Residential mortgage		2,314		-		-		-		2,314
Total	$	700,072	$	20,227	$	32,209	$	-	$	752,508

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At December 31, 2013:
Commercial real estate	$	305,974	$	16,372	$	20,448	$	-	$	342,794
Construction and land development		22,359		-		1,618		-		23,977
Commercial and industrial		110,629		611		6,969		-		118,209
Owner occupied real estate		155,648		1,485		3,096		-		160,229
Consumer and other		30,993		75		913		-		31,981
Residential mortgage		2,359		-		-		-		2,359
Total	$	627,962	$	18,543	$	33,044	$	-	$	679,549

Nonaccrual Loans By Classes Of The Loan Portfolio

The following table shows non-accrual loans by class as of September 30, 2014 and December 31, 2013:

(dollars in thousands)	September 30, 2014		December 31, 2013
Commercial real estate	$	14,543	$	1,104
Construction and land development		577		1,618
Commercial and industrial		5,028		6,837
Owner occupied real estate		2,459		205
Consumer and other		437		656
Residential mortgage		-		-
Total	$	23,044	$	10,420

Summary of Troubled Debt Restructurings

The following table summarizes the balance of outstanding TDRs at September 30, 2014 and December 31, 2013:

(dollars in thousands)	Number of Loans		Accrual Status		Non- Accrual Status		Total TDRs
September 30, 2014
Commercial real estate		-	$	-	$	-	$	-
Construction and land development		-		-		-		-
Commercial and industrial		1		-		2,173		2,173
Owner occupied real estate		1		1,866		-		1,866
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		2	$	1,866	$	2,173	$	4,039

December 31, 2013
Commercial real estate		1	$	103	$	-	$	103
Construction and land development		-		-		-		-
Commercial and industrial		1		-		2,188		2,188
Owner occupied real estate		1		1,894		-		1,894
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		3	$	1,997	$	2,188	$	4,185