Loans (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consist of the following:


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

Commercial real estate	$ 545,663	$ 476,648
Residential first mortgages	155,234	159,147
Construction and land development	33,986	32,001
Home equity and second mortgages	21,330	21,692
Commercial loans	63,681	94,176
Consumer loans	661	838
Commercial equipment	25,836	23,738
	846,391	808,240
Less:
Deferred loan fees	1,138	972
Allowance for loan loss	8,273	8,138
	9,411	9,110

	$ 836,980	$ 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 September 30, 2014
Allowance for loan losses:
Balance at July 1,	$ 3,977	$ 1,090	$ 573	$ 283	$ 1,735	$ 4	$ 388	$ 8,050
Charge-offs	-	-	-	-	(175)	(3)	-	(178)
Recoveries	1	1	-	10	1	1	2	16
Provisions	586	(12)	72	(1)	(226)	1	(35)	385
Balance at September 30,	$ 4,564	$ 1,079	$ 645	$ 292	$ 1,335	$ 3	$ 355	$ 8,273

At and For the Nine Months Ended September 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)	-	-	(930)	(3)	-	(1,076)
Recoveries	9	1	-	10	4	11	25	60
Provisions	1,079	(229)	61	33	345	(15)	(123)	1,151
Balance at September 30,	$ 4,564	$ 1,079	$ 645	$ 292	$ 1,335	$ 3	$ 355	$ 8,273
Ending balance: individually evaluated for impairment	$ 372	$ 75	$ 81	$ 59	$ 95	$ -	$ 89	$ 771
Ending balance: collectively evaluated for impairment	$ 4,192	$ 1,004	$ 564	$ 233	$ 1,240	$ 3	$ 266	$ 7,502
Loan receivables:
Ending balance	$ 545,663	$ 155,234	$ 33,986	$ 21,330	$ 63,681	$ 661	$ 25,836	$ 846,391
Ending balance: individually evaluated for impairment	$ 22,918	$ 3,130	$ 7,631	$ 548	$ 7,318	$ -	$ 523	$ 42,068
Ending balance: collectively evaluated for impairment	$ 522,745	$ 152,104	$ 26,355	$ 20,782	$ 56,363	$ 661	$ 25,313	$ 804,323



(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 September 30, 2013
Allowance for loan losses:
Balance at July 1,	$ 3,358	$ 1,961	$ 601	$ 364	$ 1,519	$ 14	$ 217	$ 8,034
Charge-offs	(140)	(80)	-	-	(29)	(1)	-	(250)
Recoveries	-	-	-	-	-	-	10	10
Provisions	311	(178)	(132)	(46)	273	2	55	285
Balance at September 30,	$ 3,529	$ 1,703	$ 469	$ 318	$ 1,763	$ 15	$ 282	$ 8,079
At and For the Nine Months Ended September 30, 2013
Allowance for loan losses:
Balance at January 1,	$ 4,092	$ 1,083	$ 533	$ 280	$ 1,948	$ 19	$ 292	$ 8,247
Charge-offs	(140)	(139)	(36)	(111)	(434)	(10)	(22)	(892)
Recoveries	-	11	-	-	12	2	59	84
Provisions	(423)	748	(28)	149	237	4	(47)	640
Balance at September 30,	$ 3,529	$ 1,703	$ 469	$ 318	$ 1,763	$ 15	$ 282	$ 8,079
Ending balance: individually evaluated for impairment	$ 559	$ 171	$ -	$ -	$ 292	$ -	$ 23	$ 1,045
Ending balance: collectively evaluated for impairment	$ 2,970	$ 1,532	$ 469	$ 318	$ 1,471	$ 15	$ 259	$ 7,034
Loan receivables:
Ending balance	$ 445,662	$ 161,862	$ 31,114	$ 21,712	$ 86,504	$ 902	$ 21,085	$ 768,841
Ending balance: individually evaluated for impairment	$ 19,857	$ 3,883	$ 5,350	$ 58	$ 11,055	$ 32	$ 317	$ 40,552
Ending balance: collectively evaluated for impairment	$ 425,805	$ 157,979	$ 25,764	$ 21,654	$ 75,449	$ 870	$ 20,768	$ 728,289

Schedule of Financing Receivables, Non-Accrual Status

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



	September 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	$ 4,580	16	$ -	-	$ 4,580	16
Residential first mortgages	607	2	-	-	607	2
Construction and land development	3,634	2	-	-	3,634	2
Home equity and second mortgages	279	6	-	-	279	6
Commercial loans	1,587	6	-	-	1,587	6
Consumer loans	-	-	-	-	-	-
Commercial equipment	220	4	-	-	220	4
	$ 10,907	36	$ -	-	$ 10,907	36



	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 September 30, 2014 and December 31, 2013 was as follows:


	September 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	$ 536,652	$ -	$ 4,431	$ 4,580	$ 9,011	$ 545,663
Residential first mortgages	154,199	-	428	607	1,035	155,234
Construction and land dev.	30,352	-	-	3,634	3,634	33,986
Home equity and second mtg.	20,344	323	384	279	986	21,330
Commercial loans	62,009	85	-	1,587	1,672	63,681
Consumer loans	661	-	-	-	-	661
Commercial equipment	25,597	19	-	220	239	25,836
Total	$ 829,814	$ 427	$ 5,243	$ 10,907	$ 16,577	$ 846,391


	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 September 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)	9/30/2014	12/31/2013	9/30/2014	12/31/2013

Unrated	$ 71,910	$ 66,481	$ 2,787	$ 5,782
Pass	439,212	380,124	22,549	17,628
Special mention	9,080	7,084	-	-
Substandard	25,461	22,959	8,650	8,591
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 545,663	$ 476,648	$ 33,986	$ 32,001

	Commercial Loans		Commercial Equipment
(dollars in thousands)	9/30/2014	12/31/2013	9/30/2014	12/31/2013

Unrated	$ 12,969	$ 12,873	$ 6,878	$ 6,137
Pass	43,309	67,354	18,543	17,516
Special mention	49	402	-	2
Substandard	7,354	13,547	415	83
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 63,681	$ 94,176	$ 25,836	$ 23,738


Credit Risk Profile Based on Payment Activity

	Residential First Mortgages		Home Equity and Second Mtg.		Consumer Loans
(dollars in thousands)	9/30/2014	12/31/2013	9/30/2014	12/31/2013	9/30/2014	12/31/2013

Performing	$ 154,627	$ 157,464	$ 21,051	$ 21,577	$ 661	$ 838
Nonperforming	607	1,683	279	115	-	-
Total	$ 155,234	$ 159,147	$ 21,330	$ 21,692	$ 661	$ 838

Summary of Total Classified Loans

(dollars in thousands)		9/30/2014	12/31/2013
By Internally Assigned Grade		$ 41,880	$ 45,181
By Payment Activity		2,344	2,464
Total Classified		$ 44,224	$ 47,645

Impaired Financing Receivables

Impaired Loans and Troubled Debt Restructures (“TDRs”)

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



	September 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	$ 22,946	$ 18,350	$ 4,568	$ 22,918	$ 372	$ 22,979	$ 327	$ 23,002	719
Residential first mortgages	3,130	2,614	516	3,130	75	3,069	40	3,130	108
Construction and land dev.	7,631	3,377	4,254	7,631	81	7,427	41	7,591	123
Home equity and second mtg.	548	475	73	548	59	556	5	485	8
Commercial loans	7,318	6,912	406	7,318	95	7,238	61	7,282	188
Consumer loans	-	-	-	-	-	-	-	-	-
Commercial equipment	542	357	166	523	89	526	7	536	16
Total	$ 42,115	$ 32,085	$ 9,983	$ 42,068	$ 771	$ 41,795	$ 481	$ 42,026	1,162


	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


	September 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	$ 20,026	$ 15,886	$ 3,971	$ 19,857	$ 559	$ 20,011	$ 208	$ 20,161	$ 631
Residential first mortgages	3,883	3,182	701	3,883	171	3,911	30	3,920	97
Construction and land dev.	5,350	5,350	-	5,350	-	5,363	77	5,312	224
Home equity and second mtg.	58	58	-	58	-	120	1	217	6
Commercial loans	11,055	10,334	721	11,055	292	11,028	67	10,968	292
Consumer loans	32	32	-	32	-	36	1	43	3
Commercial equipment	336	294	23	317	23	336	1	351	8
Total	$ 40,740	$ 35,136	$ 5,416	$ 40,552	$ 1,045	$ 40,805	$ 385	$ 40,972	$ 1,261

Troubled Debt Restructurings on Financing Receivables

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


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

Commercial real estate	$ 2,095	3	$ 3,141	8
Residential first mortgages	912	3	1,485	4
Construction and land development	3,634	2	-	-
Commercial loans	227	2	-	-
Commercial equipment	155	2	67	1
Total TDRs	$ 7,023	12	$ 4,693	13
Less: TDRs included in non-accrual loans	(3,861)	(4)	-	-
Total accrual TDR loans	$ 3,162	8	$ 4,693	13