Loans (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consist of the following:


(dollars in thousands)	December 31, 2013	December 31, 2012

Commercial real estate	$ 476,648	$ 419,667
Residential first mortgages	159,147	177,663
Construction and land development	32,001	31,819
Home equity and second mortgages	21,692	21,982
Commercial loans	94,176	88,158
Consumer loans	838	995
Commercial equipment	23,738	16,268
	808,240	756,552
Less:
Deferred loan fees	972	664
Allowance for loan loss	8,138	8,247
	9,110	8,911

	$ 799,130	$ 747,641

Allowance for Credit Losses on Financing Receivables



(dollars in thousands)	Commercial Real Estate	Residential First Mortgage	Construction and Land Development	Home Equity and Second Mtg.	Commercial Loans	Consumer Loans	Commercial Equipment	Total

At and For the Year Ended December 31, 2013
Allowance for loan losses:
Balance at January 1,	$ 4,092	$ 1,083	$ 533	$ 280	$ 1,948	$ 19	$ 292	$ 8,247
Charge-offs	(140)	(348)	(36)	(111)	(480)	(12)	(35)	(1,162)
Recoveries	-	11	1	17	23	3	58	113
Provisions	(427)	655	86	63	425	-	138	940
Balance at December 31,	$ 3,525	$ 1,401	$ 584	$ 249	$ 1,916	$ 10	$ 453	$ 8,138
Ending balance: individually evaluated for impairment	$ 372	$ 171	$ 55	$ -	$ 304	$ -	$ 83	$ 985
Ending balance: collectively evaluated for impairment	$ 3,153	$ 1,230	$ 529	$ 249	$ 1,612	$ 10	$ 370	$ 7,153
Loan receivables:
Ending balance	$ 476,648	$ 159,147	$ 32,001	$ 21,692	$ 94,176	$ 838	$ 23,738	$ 808,240
Ending balance: individually evaluated for impairment	$ 18,173	$ 3,401	$ 5,666	$ 207	$ 10,218	$ 24	$ 317	$ 38,006
Ending balance: collectively evaluated for impairment	$ 458,475	$ 155,746	$ 26,335	$ 21,485	$ 83,958	$ 814	$ 23,421	$ 770,234



(dollars in thousands)	Commercial Real Estate	Residential First Mortgage	Construction and Land Development	Home Equity and Second Mtg.	Commercial Loans	Consumer Loans	Commercial Equipment	Total

At and For the Year Ended December 31, 2012
Allowance for loan losses:
Balance at January 1,	$ 2,526	$ 539	$ 354	$ 144	$ 3,850	$ 19	$ 223	$ 7,655
Charge-offs	(486)	(11)	(141)	(211)	(1,004)	(5)	(169)	(2,027)
Recoveries	-	38	-	-	51	1	-	90
Provisions	2,052	517	320	347	(949)	4	238	2,529
Balance at December 31,	$ 4,092	$ 1,083	$ 533	$ 280	$ 1,948	$ 19	$ 292	$ 8,247
Ending balance: individually evaluated for impairment	$ 786	$ 404	$ -	$ -	$ 354	$ -	$ 4	$ 1,548
Ending balance: collectively evaluated for impairment	$ 3,306	$ 679	$ 533	$ 280	$ 1,594	$ 19	$ 288	$ 6,699
Loan receivables:
Ending balance	$ 419,667	$ 177,663	$ 31,819	$ 21,982	$ 88,158	$ 995	$ 16,268	$ 756,552
Ending balance: individually evaluated for impairment	$ 21,619	$ 3,368	$ 4,878	$ 291	$ 8,778	$ 52	$ 4	$ 38,990
Ending balance: collectively evaluated for impairment	$ 398,048	$ 174,295	$ 26,941	$ 21,691	$ 79,380	$ 943	$ 16,264	$ 717,562

Schedule of Financing Receivables, Non Accrual Status

Non-accrual loans as of December 31, 2013 and December 31, 2012 were as follows:



	December 31, 2013
(dollars in thousands)	90 or Greater Days Delinquent	Number of Loans	Non-accrual Only Loans	Number of Loans	Total Non-accrual Loans	Total Number of Loans

Commercial real estate	$ 4,235	10	$ 3,695	2	$ 7,930	12
Residential first mortgages	1,683	6	562	3	2,245	9
Construction and land development	2,968	1	-	-	2,968	1
Home equity and second mortgages	115	3	-	-	115	3
Commercial loans	1,935	6	-	-	1,935	6
Consumer loans	-	-	24	1	24	1
Commercial equipment	234	2	-	-	234	2
	$ 11,170	28	$ 4,281	6	$ 15,451	34



	December 31, 2012
(dollars in thousands)	90 or Greater Days Delinquent	Number of Loans	Non-accrual Only Loans	Number of Loans	Total Non-accrual Loans	Total Number of Loans

Commercial real estate	$ 1,529	7	$ 3,802	2	$ 5,331	9
Residential first mortgages	3,169	10	570	3	3,739	13
Home equity and second mortgages	71	2	-	-	71	2
Commercial loans	3,732	11	-	-	3,732	11
Consumer loans	-	-	52	1	52	1
Commercial equipment	216	4	-	-	216	4
	$ 8,717	34	$ 4,424	6	$ 13,141	40

Past Due Financing Receivables

An analysis of past due loans as of December 31, 2013 and 2012 was as follows:


	December 31, 2013
(dollars in thousands)	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables	Loans > 90 Days and Accruing
Commercial real estate	$ 469,182	$ 58	$ 3,173	$ 4,235	$ 7,466	$ 476,648	$ -
Residential first mortgages	157,043	8	413	1,683	2,104	159,147	-
Construction and land dev.	28,525	-	508	2,968	3,476	32,001	-
Home equity and second mtg.	21,183	121	273	115	509	21,692	-
Commercial loans	88,812	3,111	318	1,935	5,364	94,176	-
Consumer loans	830	8	-	-	8	838	-
Commercial equipment	23,435	26	43	234	303	23,738	-
Total	$ 789,010	$ 3,332	$ 4,728	$ 11,170	$ 19,230	$ 808,240	$ -


	December 31, 2012
(dollars in thousands)	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables	Loans > 90 Days and Accruing
Commercial real estate	$ 416,720	$ -	$ 1,418	$ 1,529	$ 2,947	$ 419,667	$ -
Residential first mortgages	173,594	97	803	3,169	4,069	177,663	-
Construction and land dev.	31,819	-	-	-	-	31,819	-
Home equity and second mtg.	21,499	351	61	71	483	21,982	-
Commercial loans	84,385	-	41	3,732	3,773	88,158	-
Consumer loans	983	9	3	-	12	995	-
Commercial equipment	15,660	372	20	216	608	16,268	-
Total	$ 744,660	$ 829	$ 2,346	$ 8,717	$ 11,892	$ 756,552	$ -

Schedule of Financing Receivable Recorded Investment Credit Quality Indicator

Credit quality indicators as of December 31, 2013 and 2012 were as follows:



Credit Risk Profile by Internally Assigned Grade

	Commercial Real Estate		Construction and Land Dev.
(dollars in thousands)	12/31/2013	12/31/2012	12/31/2013	12/31/2012

Unrated	$ 66,481	$ 59,930	$ 5,782	$ 4,330
Pass	380,124	329,883	17,628	19,753
Special mention	7,084	4,881	-	-
Substandard	22,959	24,973	8,591	7,736
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 476,648	$ 419,667	$ 32,001	$ 31,819

	Commercial Loans		Commercial Equipment
(dollars in thousands)	12/31/2013	12/31/2012	12/31/2013	12/31/2012

Unrated	$ 12,873	$ 11,628	$ 6,137	$ 5,083
Pass	67,354	64,437	17,516	11,181
Special mention	402	-	2	-
Substandard	13,547	12,093	83	4
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 94,176	$ 88,158	$ 23,738	$ 16,268

Credit Risk Profile Based on Payment Activity

	Residential First Mortgages		Home Equity and Second Mtg.		Consumer Loans
(dollars in thousands)	12/31/2013	12/31/2012	12/31/2013	12/31/2012	12/31/2013	12/31/2012

Performing	$ 157,464	$ 174,494	$ 21,577	$ 21,911	$ 838	$ 995
Nonperforming	1,683	3,169	115	71	-	-
Total	$ 159,147	$ 177,663	$ 21,692	$ 21,982	$ 838	$ 995

Summary of Total Classified Loans

(dollars in thousands)		12/31/2013	12/31/2012
By Internally Assigned Grade		$ 45,181	$ 44,807
By Payment Activity		2,464	3,869
Total Classified		$ 47,645	$ 48,676

Impaired Financing Receivables

Impaired Loans and Troubled Debt Restructures (“TDRs”)

Impaired loans, including TDRs, at December 31, 2013 and 2012 were as follows:


	December 31, 2013
(dollars in thousands)	Unpaid Contractual Principal Balance	Recorded Investment With No Allowance	Recorded Investment With Allowance	Total Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized

Commercial real estate	$ 18,342	$ 14,274	$ 3,899	$ 18,173	$ 372	$ 18,473	$ 770
Residential first mortgages	3,401	2,695	706	3,401	171	3,392	125
Construction and land dev.	5,666	1,489	4,177	5,666	55	5,386	252
Home equity and second mtg.	207	207	-	207	-	297	12
Commercial loans	10,218	9,297	921	10,218	304	10,600	432
Consumer loans	24	24	-	24	-	39	3
Commercial equipment	335	234	83	317	83	367	13
Total	$ 38,193	$ 28,220	$ 9,786	$ 38,006	$ 985	$ 38,554	$ 1,607


	December 31, 2012
(dollars in thousands)	Unpaid Contractual Principal Balance	Recorded Investment With No Allowance	Recorded Investment With Allowance	Total Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized

Commercial real estate	$ 21,619	$ 18,804	$ 2,815	$ 21,619	$ 786	$ 22,502	$ 1,120
Residential first mortgages	3,368	2,362	1,006	3,368	404	3,389	158
Construction and land dev.	4,878	4,878	-	4,878	-	4,793	276
Home equity and second mtg.	291	291	-	291	-	221	7
Commercial loans	8,779	8,330	448	8,778	354	9,153	284
Consumer loans	52	52	-	52	-	64	5
Commercial equipment	4	-	4	4	4	5	-
Total	$ 38,991	$ 34,717	$ 4,273	$ 38,990	$ 1,548	$ 40,127	$ 1,850

Troubled Debt Restructurings on Financing Receivables

TDRs, included in the impaired loan schedules above, as of December 31, 2013 and 2012 were as follows:


	December 31, 2013		December 31, 2012
(dollars in thousands)	Dollars	Number of Loans	Dollars	Number of Loans

Commercial real estate	$ 3,141	8	$ 3,097	7
Residential first mortgages	1,485	4	1,418	3
Commercial equipment	67	1	-	-
	$ 4,693	13	$ 4,515	10

Schedule of Loans Contractual Terms to Maturity

The following table sets forth certain information at December 31, 2013 regarding the dollar amount of loans maturing in the Bank’s portfolio based on their contractual terms to maturity. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less.


	Due within one	Due after one year	Due more than
(dollars in thousands)	year after	through five years from	five years from
Description of Asset	December 31, 2013	December 31, 2013	December 31, 2013
Real Estate Loans
Commercial	$ 52,548	$ 146,237	$ 277,863
Residential first mortgage	27,529	58,872	72,746
Construction and land development	21,181	10,820	-
Home equity and second mortgage	2,162	7,087	12,443
Commercial loans	94,176	-	-
Consumer loans	367	419	52
Commercial equipment	12,534	8,424	2,780
Total loans	$ 210,497	$ 231,859	$ 365,884

Schedule of Loans Due After One Year

The following table sets forth the dollar amount of all loans due after one year from December 31, 2013, which have predetermined interest rates and have floating or adjustable interest rates.


(dollars in thousands)		Floating or
Description of Asset	Fixed Rates	Adjustable Rates	Total
Real Estate Loans
Commercial	$ 100,570	$ 323,530	$ 424,100
Residential first mortgage	109,999	21,619	131,618
Construction and land development	-	10,820	10,820
Home equity and second mortgage	2,311	17,219	19,530
Commercial loans	-	-	-
Consumer loans	169	302	471
Commercial equipment	9,423	1,781	11,204
	$ 222,472	$ 375,271	$ 597,743

Related Party Loans

Activity in loans outstanding to executive officers and directors for the years ended December 31, 2013 and 2012 are summarized as follows:


	At and For the Years Ended December 31,
(dollars in thousands)	2013	2012

Balance, beginning of period	$ 6,987	$ 6,475
Loans and additions	536	842
Change in Directors' status	10,077	-
Repayments	(999)	(330)
Balance, end of period	$ 16,601	$ 6,987