Loans (Tables)

6 Months Ended

Jun. 30, 2014

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consist of the following:


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

Commercial real estate	$ 531,919	$ 476,648
Residential first mortgages	156,833	159,147
Construction and land development	32,086	32,001
Home equity and second mortgages	21,225	21,692
Commercial loans	77,583	94,176
Consumer loans	736	838
Commercial equipment	25,876	23,738
	846,258	808,240
Less:
Deferred loan fees	1,081	972
Allowance for loan loss	8,050	8,138
	9,131	9,110

	$ 837,127	$ 799,130

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 Three Months Ended June 30, 2014
Allowance for loan losses:
Balance at April 1,	$ 3,610	$ 1,272	$ 561	$ 340	$ 2,115	$ 6	$ 293	$ 8,197
Charge-offs	(28)	-	-	-	(720)	-	-	(748)
Recoveries	2	-	-	-	2	10	24	38
Provisions	393	(182)	12	(57)	338	(12)	71	563
Balance at June 30,	$ 3,977	$ 1,090	$ 573	$ 283	$ 1,735	$ 4	$ 388	$ 8,050

At and For the Six Months Ended June 30, 2014
Allowance for loan losses:
Balance at January 1,	$ 3,525	$ 1,401	$ 584	$ 249	$ 1,916	$ 10	$ 453	$ 8,138
Charge-offs	(49)	(94)	-	-	(755)	-	-	(898)
Recoveries	7	-	-	-	3	10	24	44
Provisions	494	(217)	(11)	34	571	(16)	(89)	766
Balance at June 30,	$ 3,977	$ 1,090	$ 573	$ 283	$ 1,735	$ 4	$ 388	$ 8,050
Ending balance: individually evaluated for impairment	$ 311	$ 75	$ 81	$ 33	$ 269	$ -	$ 90	$ 859
Ending balance: collectively evaluated for impairment	$ 3,666	$ 1,015	$ 492	$ 250	$ 1,466	$ 4	$ 298	$ 7,191
Loan receivables:
Ending balance	$ 531,919	$ 156,833	$ 32,086	$ 21,225	$ 77,583	$ 736	$ 25,876	$ 846,258
Ending balance: individually evaluated for impairment	$ 17,471	$ 3,078	$ 6,049	$ 403	$ 5,380	$ 5	$ 380	$ 32,766
Ending balance: collectively evaluated for impairment	$ 514,448	$ 153,755	$ 26,037	$ 20,822	$ 72,203	$ 731	$ 25,496	$ 813,492



(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 Three Months Ended June 30, 2013
Allowance for loan losses:
Balance at April 1,	$ 3,540	$ 1,985	$ 497	$ 318	$ 1,824	$ 17	$ 169	$ 8,350
Charge-offs	-	-	-	(111)	(406)	-	(21)	(538)
Recoveries	-	10	-	-	11	1	-	22
Provisions	(182)	(34)	104	157	90	(4)	69	200
Balance at June 30,	$ 3,358	$ 1,961	$ 601	$ 364	$ 1,519	$ 14	$ 217	$ 8,034
At and For the Six Months Ended June 30, 2013
Allowance for loan losses:
Balance at January 1,	$ 4,092	$ 1,083	$ 533	$ 280	$ 1,948	$ 19	$ 292	$ 8,247
Charge-offs	-	(59)	(36)	(111)	(406)	(9)	(21)	(642)
Recoveries	-	11	-	-	12	2	49	74
Provisions	(734)	926	104	195	(35)	2	(103)	355
Balance at June 30,	$ 3,358	$ 1,961	$ 601	$ 364	$ 1,519	$ 14	$ 217	$ 8,034
Ending balance: individually evaluated for impairment	$ 614	$ 407	$ 170	$ -	$ 40	$ -	$ 3	$ 1,234
Ending balance: collectively evaluated for impairment	$ 2,744	$ 1,554	$ 431	$ 364	$ 1,479	$ 14	$ 214	$ 6,800
Loan receivables:
Ending balance	$ 434,616	$ 165,434	$ 29,120	$ 21,769	$ 84,993	$ 937	$ 17,347	$ 754,216
Ending balance: individually evaluated for impairment	$ 20,474	$ 5,236	$ 5,705	$ 214	$ 11,388	$ 41	$ 155	$ 43,213
Ending balance: collectively evaluated for impairment	$ 414,142	$ 160,198	$ 23,415	$ 21,555	$ 73,605	$ 896	$ 17,192	$ 711,003

Schedule of Financing Receivables, Non-Accrual Status

Non-accrual loans as of June 30, 2014 and December 31, 2013 were as follows:



	June 30, 2014
(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	$ 5,113	11	$ -	-	$ 5,113	11
Residential first mortgages	540	2	-	-	540	2
Construction and land development	3,811	2	-	-	3,811	2
Home equity and second mortgages	166	2	-	-	166	2
Commercial loans	2,035	8	-	-	2,035	8
Consumer loans	-	-	-	-	-	-
Commercial equipment	221	4	-	-	221	4
	$ 11,886	29	$ -	-	$ 11,886	29



	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

Past Due Financing Receivables

An analysis of past due loans as of June 30, 2014 and December 31, 2013 was as follows:


	June 30, 2014
(dollars in thousands)	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables
Commercial real estate	$ 522,327	$ -	$ 4,479	$ 5,113	$ 9,592	$ 531,919
Residential first mortgages	155,674	6	613	540	1,159	156,833
Construction and land dev.	28,275	-	-	3,811	3,811	32,086
Home equity and second mtg.	20,418	360	281	166	807	21,225
Commercial loans	75,548	-	-	2,035	2,035	77,583
Consumer loans	733	-	3	-	3	736
Commercial equipment	25,505	111	39	221	371	25,876
Total	$ 828,480	$ 477	$ 5,415	$ 11,886	$ 17,778	$ 846,258


	December 31, 2013
(dollars in thousands)	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables
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

Schedule of Financing Receivable Recorded Investment Credit Quality Indicator

Credit quality indicators as of June 30, 2014 and December 31, 2013 were as follows:


Credit Risk Profile by Internally Assigned Grade

	Commercial Real Estate		Construction and Land Dev.
(dollars in thousands)	6/30/2014	12/31/2013	6/30/2014	12/31/2013

Unrated	$ 69,610	$ 66,481	$ 4,482	$ 5,782
Pass	430,956	380,124	18,785	17,628
Special mention	6,772	7,084	-	-
Substandard	24,581	22,959	8,819	8,591
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 531,919	$ 476,648	$ 32,086	$ 32,001

	Commercial Loans		Commercial Equipment
(dollars in thousands)	6/30/2014	12/31/2013	6/30/2014	12/31/2013

Unrated	$ 13,467	$ 12,873	$ 7,014	$ 6,137
Pass	56,638	67,354	18,694	17,516
Special mention	-	402	-	2
Substandard	7,304	13,547	168	83
Doubtful	174	-	-	-
Loss	-	-	-	-
Total	$ 77,583	$ 94,176	$ 25,876	$ 23,738


Credit Risk Profile Based on Payment Activity

	Residential First Mortgages		Home Equity and Second Mtg.		Consumer Loans
(dollars in thousands)	6/30/2014	12/31/2013	6/30/2014	12/31/2013	6/30/2014	12/31/2013

Performing	$ 156,293	$ 157,464	$ 21,059	$ 21,577	$ 736	$ 838
Nonperforming	540	1,683	166	115	-	-
Total	$ 156,833	$ 159,147	$ 21,225	$ 21,692	$ 736	$ 838

Summary of Total Classified Loans

(dollars in thousands)		6/30/2014	12/31/2013
By Internally Assigned Grade		$ 41,046	$ 45,181
By Payment Activity		2,495	2,464
Total Classified		$ 43,541	$ 47,645

Impaired Financing Receivables

Impaired Loans and Troubled Debt Restructures (“TDRs”)

Impaired loans, including TDRs, at June 30, 2014 and 2013 and at December 31, 2013 were as follows:


	June 30, 2014
(dollars in thousands)	Unpaid Contractual Principal Balance	Recorded Investment With No Allowance	Recorded Investment With Allowance	Total Recorded Investment	Related Allowance	Three Month Average Recorded Investment	Three Month Interest Income Recognized	Year to Date Average Recorded Investment	Year to Date Interest Income Recognized

Commercial real estate	$ 17,500	$ 13,143	$ 4,328	$ 17,471	$ 311	$ 17,473	$ 172	$ 17,446	$ 332
Residential first mortgages	3,078	2,559	519	3,078	75	3,103	35	3,113	70
Construction and land dev.	6,049	1,799	4,250	6,049	81	6,015	28	5,916	56
Home equity and second mtg.	403	330	73	403	33	378	2	335	2
Commercial loans	5,380	4,800	580	5,380	269	5,585	46	5,672	93
Consumer loans	5	5	-	5	-	8	-	12	1
Commercial equipment	399	212	168	380	90	381	4	392	8
Total	$ 32,814	$ 22,848	$ 9,918	$ 32,766	$ 859	$ 32,943	$ 287	$ 32,886	$ 562


	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


	June 30, 2013
(dollars in thousands)	Unpaid Contractual Principal Balance	Recorded Investment With No Allowance	Recorded Investment With Allowance	Total Recorded Investment	Related Allowance	Three Month Average Recorded Investment	Three Month Interest Income Recognized	Year to Date Average Recorded Investment	Year to Date Interest Income Recognized

Commercial real estate	$ 20,474	$ 16,090	$ 4,384	$ 20,474	$ 614	$ 20,560	$ 236	$ 20,625	$ 435
Residential first mortgages	5,236	4,328	908	5,236	407	5,278	46	5,283	94
Construction and land dev.	5,705	4,497	1,208	5,705	170	5,574	71	5,295	147
Home equity and second mtg.	214	214	-	214	-	233	2	265	5
Commercial loans	11,388	11,231	157	11,388	40	11,379	149	11,321	227
Consumer loans	41	41	-	41	-	44	1	47	2
Commercial equipment	174	152	3	155	3	174	-	174	-
Total	$ 43,232	$ 36,553	$ 6,660	$ 43,213	$ 1,234	$ 43,242	$ 505	$ 43,010	$ 910

Troubled Debt Restructurings on Financing Receivables

TDRs, included in the impaired loan schedules above, as of June 30, 2014 and December 31, 2013 were as follows:


	June 30, 2014		December 31, 2013
(dollars in thousands)	Dollars	Number of Loans	Dollars	Number of Loans

Commercial real estate	$ 2,101	3	$ 3,141	8
Residential first mortgages	916	3	1,485	4
Construction and land development	3,811	2	-	-
Home equity and second mortgage	-	-	-	-
Commercial loans	227	2	-	-
Consumer loans	-	-	-	-
Commercial equipment	157	2	67	1
Total TDRs	$ 7,212	12	$ 4,693	13
Less: TDRs included in non-accrual loans	(4,037)	(4)	-	-
Total accrual TDR loans	$ 3,175	8	$ 4,693	13