Loans (Tables)

6 Months Ended

Jun. 30, 2015

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consist of the following:


(dollars in thousands)	June 30, 2015	December 31, 2014

Commercial real estate	$ 601,270	$ 561,080
Residential first mortgages	143,662	152,837
Construction and land development	39,159	36,370
Home equity and second mortgages	21,068	21,452
Commercial loans	63,480	73,625
Consumer loans	396	613
Commercial equipment	26,804	26,152
	895,839	872,129
Less:
Deferred loan fees	1,168	1,239
Allowance for loan losses	8,757	8,481
	9,925	9,720

	$ 885,914	$ 862,409

Schedule of Financing Receivables, Non-Accrual Status

Non-accrual loans as of June 30, 2015 and December 31, 2014 were as follows:


	June 30, 2015		December 31, 2014
(dollars in thousands)	Total Non-accrual Loans	Total Number of Loans	Total Non-accrual Loans	Total Number of Loans

Commercial real estate	$ 6,119	13	$ 3,824	11
Residential first mortgages	1,158	5	533	2
Construction and land development	3,554	2	3,634	2
Home equity and second mortgages	366	5	399	6
Commercial loans	1,472	7	1,587	6
Commercial equipment	387	5	286	4
	$ 13,056	37	$ 10,263	31

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, 2015

Allowance for loan losses:
Balance at April 1,	$ 4,348	$ 904	$ 1,099	$ 208	$ 1,740	$ 2	$ 320	$ 8,621
Charge-offs	-	(30)	-	-	(215)	-	(54)	(299)
Recoveries	4	-	32	-	6	-	1	43
Provisions	(493)	11	74	(2)	(165)	-	967	392
Balance at June 30,	$ 3,859	$ 885	$ 1,205	$ 206	$ 1,366	$ 2	$ 1,234	$ 8,757

At and For the Six Months Ended June 30, 2015

Allowance for loan losses:
Balance at January 1,	$ 4,076	$ 1,092	$ 1,071	$ 173	$ 1,677	$ 3	$ 389	$ 8,481
Charge-offs	(46)	(30)	-	-	(215)	-	(54)	(345)
Recoveries	7	1	32	-	7	-	4	51
Provisions	(178)	(178)	102	33	(103)	(1)	895	570
Balance at June 30,	$ 3,859	$ 885	$ 1,205	$ 206	$ 1,366	$ 2	$ 1,234	$ 8,757
Ending balance: individually evaluated for impairment	$ 150	$ 75	$ -	$ -	$ 227	$ -	$ 1,021	$ 1,473
Ending balance: collectively evaluated for impairment	$ 3,709	$ 810	$ 1,205	$ 206	$ 1,139	$ 2	$ 213	$ 7,284
Loan receivables:
Ending balance	$ 601,270	$ 143,662	$ 39,159	$ 21,068	$ 63,480	$ 396	$ 26,804	$ 895,839
Ending balance: individually evaluated for impairment	$ 27,980	$ 3,996	$ 4,329	$ 429	$ 5,080	$ -	$ 1,389	$ 43,203
Ending balance: collectively evaluated for impairment	$ 573,290	$ 139,666	$ 34,830	$ 20,639	$ 58,400	$ 396	$ 25,415	$ 852,636



(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, 2014
Allowance for loan losses:
Balance at January 1,	$ 3,525	$ 1,401	$ 584	$ 249	$ 1,916	$ 10	$ 453	$ 8,138
Charge-offs	(350)	(94)	(992)	(59)	(1,134)	(3)	(10)	(2,642)
Recoveries	11	186	84	10	5	11	25	332
Provisions	890	(401)	1,395	(27)	890	(15)	(79)	2,653
Balance at December 31,	$ 4,076	$ 1,092	$ 1,071	$ 173	$ 1,677	$ 3	$ 389	$ 8,481
Ending balance: individually evaluated for impairment	$ 97	$ 76	$ -	$ -	$ 155	$ -	$ 123	$ 451
Ending balance: collectively evaluated for impairment	$ 3,979	$ 1,016	$ 1,071	$ 173	$ 1,522	$ 3	$ 266	$ 8,030
Loan receivables:
Ending balance	$ 561,080	$ 152,837	$ 36,370	$ 21,452	$ 73,625	$ 613	$ 26,152	$ 872,129
Ending balance: individually evaluated for impairment	$ 31,529	$ 3,407	$ 6,102	$ 649	$ 7,436	$ -	$ 586	$ 49,709
Ending balance: collectively evaluated for impairment	$ 529,551	$ 149,430	$ 30,268	$ 20,803	$ 66,189	$ 613	$ 25,566	$ 822,420


(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

Past Due Financing Receivables

An analysis of past due loans as of June 30, 2015 and December 31, 2014 was as follows:


	June 30, 2015
(dollars in thousands)	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables
Commercial real estate	$ 593,802	$ -	$ 1,349	$ 6,119	$ 7,468	$ 601,270
Residential first mortgages	141,971	132	401	1,158	1,691	143,662
Construction and land dev.	35,605	-	-	3,554	3,554	39,159
Home equity and second mtg.	20,456	72	174	366	612	21,068
Commercial loans	62,008	-	-	1,472	1,472	63,480
Consumer loans	396	-	-	-	-	396
Commercial equipment	26,400	17	-	387	404	26,804
Total	$ 880,638	$ 221	$ 1,924	$ 13,056	$ 15,201	$ 895,839


	December 31, 2014
(dollars in thousands)	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables
Commercial real estate	$ 556,584	$ -	$ 672	$ 3,824	$ 4,496	$ 561,080
Residential first mortgages	151,375	133	796	533	1,462	152,837
Construction and land dev.	32,736	-	-	3,634	3,634	36,370
Home equity and second mtg.	20,939	90	24	399	513	21,452
Commercial loans	71,952	86	-	1,587	1,673	73,625
Consumer loans	612	1	-	-	1	613
Commercial equipment	25,848	17	1	286	304	26,152
Total	$ 860,046	$ 327	$ 1,493	$ 10,263	$ 12,083	$ 872,129

Schedule of Financing Receivable Recorded Investment Credit Quality Indicator

Credit quality indicators as of June 30, 2015 and December 31, 2014 were as follows:


Credit Risk Profile by Internally Assigned Grade

	Commercial Real Estate		Construction and Land Dev.
(dollars in thousands)	6/30/2015	12/31/2014	6/30/2015	12/31/2014

Unrated	$ 69,819	$ 74,955	$ 6,607	$ 3,108
Pass	502,595	451,256	28,223	27,160
Special mention	3,078	4,383	-	-
Substandard	25,778	30,486	4,329	6,102
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 601,270	$ 561,080	$ 39,159	$ 36,370

	Commercial Loans		Commercial Equipment
(dollars in thousands)	6/30/2015	12/31/2014	6/30/2015	12/31/2014

Unrated	$ 10,349	$ 12,296	$ 8,765	$ 7,173
Pass	48,414	53,844	16,840	18,517
Special mention	49	49	-	-
Substandard	4,668	7,436	1,199	462
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 63,480	$ 73,625	$ 26,804	$ 26,152


Credit Risk Profile Based on Payment Activity

	Residential First Mortgages		Home Equity and Second Mtg.		Consumer Loans
(dollars in thousands)	6/30/2015	12/31/2014	6/30/2015	12/31/2014	6/30/2015	12/31/2014

Performing	$ 142,504	$ 152,304	$ 20,702	$ 21,053	$ 396	$ 613
Nonperforming	1,158	533	366	399	-	-
Total	$ 143,662	$ 152,837	$ 21,068	$ 21,452	$ 396	$ 613

Summary of Total Classified Loans

(dollars in thousands)		6/30/2015	12/31/2014
By Internally Assigned Grade		$ 35,974	$ 44,486
By Payment Activity		1,465	2,249
Total Classified		$ 37,439	$ 46,735

Impaired Financing Receivables

Impaired Loans and Troubled Debt Restructures (“TDRs”)

Impaired loans, including TDRs, at June 30, 2015 and 2014 and at December 31, 2014 were as follows:



	June 30, 2015
(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	$ 28,010	$ 25,424	$ 2,556	$ 27,980	$ 150	$ 28,090	$ 232	$ 28,155	$ 488
Residential first mortgages	3,996	3,491	505	3,996	75	4,006	34	4,016	74
Construction and land dev.	4,329	4,329	-	4,329	-	4,382	4	4,285	7
Home equity and second mtg.	488	429	-	429	-	434	2	437	6
Commercial loans	5,184	4,499	581	5,080	227	5,041	44	5,034	96
Commercial equipment	1,462	292	1,097	1,389	1,021	1,401	12	1,407	26
Total	$ 43,469	$ 38,464	$ 4,739	$ 43,203	$ 1,473	$ 43,354	$ 328	$ 43,334	$ 697


	December 31, 2014
(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	$ 31,812	$ 28,907	$ 2,622	$ 31,529	$ 97	$ 31,672	$ 1,258
Residential first mortgages	3,407	2,526	881	3,407	76	3,426	155
Construction and land dev.	6,402	6,102	-	6,102	-	6,474	133
Home equity and second mtg.	708	649	-	649	-	630	19
Commercial loans	7,587	7,030	406	7,436	155	7,196	252
Consumer loans	-	-	-	-	-	-	-
Commercial equipment	605	373	213	586	123	623	23
Total	$ 50,521	$ 45,587	$ 4,122	$ 49,709	$ 451	$ 50,021	$ 1,840


	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

Troubled Debt Restructurings on Financing Receivables

TDRs, included in the impaired loan schedules above, as of June 30, 2015 and December 31, 2014 were as follows:


	June 30, 2015		December 31, 2014
(dollars in thousands)	Dollars	Number of Loans	Dollars	Number of Loans

Commercial real estate	$ 12,237	12	$ 10,438	9
Residential first mortgages	895	3	906	3
Construction and land development	4,329	4	4,376	4
Commercial loans	1,084	7	2,262	6
Commercial equipment	140	2	154	2
Total TDRs	$ 18,685	28	$ 18,136	24
Less: TDRs included in non-accrual loans	(4,777)	(5)	(4,887)	(5)
Total accrual TDR loans	$ 13,908	23	$ 13,249	19