Loans Receivable and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2017

Loans Receivable and Allowance for Loan Losses [Abstract]

Summary of loans receivable

Loans receivable are summarized as follows:

	September 30, 2017			December 31, 2016
	(dollars in thousands)
Residential mortgage	$	292,068		$	260,603
Commercial		37,485			46,468
Commercial real estate		223,167			195,710
Construction, land acquisition, and development		84,164			90,102
Home equity/2nds		15,861			19,129
Consumer		1,118			1,210
Total loans receivable		653,863			613,222
Unearned loan fees		(2,899	)		(2,944	)
Net loans receivable	$	650,964		$	610,278

Changes in allowance for loan losses and recorded investment

The following tables present, by portfolio segment, the changes in the Allowance and the recorded investment in loans:

	Three Months Ended September 30, 2017
	Residential Mortgage			Commercial		Commercial Real Estate			ADC		Home Equity/ 2nds			Consumer			Total
	(dollars in thousands)
Beginning Balance	$	3,403		$	389	$	2,571		$	984	$	367		$	4		$	7,718
Charge-offs		-			-		-			-		-			-			-
Recoveries		156			-		40			-		22			-			218
Net recoveries		156			-		40			-		22			-			218
(Reversal of) provision for loan losses		(137	)		53		(44	)		158		(28	)		(2	)		-
Ending Balance	$	3,422		$	442	$	2,567		$	1,142	$	361		$	2		$	7,936

	Nine Months Ended September 30, 2017
	(dollars in thousands)
Beginning Balance	$	3,833		$	478		$	2,535		$	1,390		$	728		$	5		$	8,969
Charge-offs		(707	)		-			-			-			(98	)		-			(805	)
Recoveries		295			-			100			-			27			-			422
Net (charge-offs) recoveries		(412	)		-			100			-			(71	)		-			(383	)
Provision for (reversal of) loan losses		1			(36	)		(68	)		(248	)		(296	)		(3	)		(650	)
Ending Balance	$	3,422		$	442		$	2,567		$	1,142		$	361		$	2		$	7,936
Ending balance - individually evaluated for impairment	$	1,544		$	-		$	186		$	50		$	-		$	2		$	1,782
Ending balance - collectively evaluated for impairment		1,878			442			2,381			1,092			361			-			6,154
	$	3,422		$	442		$	2,567		$	1,142		$	361		$	2		$	7,936
Ending loan balance - individually evaluated for impairment	$	20,379		$	-		$	3,419		$	1,003		$	-		$	87		$	24,888
Ending loan balance - collectively evaluated for impairment		268,790			37,485			219,748			83,161			15,861			1,031			626,076
	$	289,169		$	37,485		$	223,167		$	84,164		$	15,861		$	1,118		$	650,964

	December 31, 2016
	Residential Mortgage		Commercial		Commercial Real Estate		ADC		Home Equity/ 2nds		Consumer		Total
	(dollars in thousands)
Ending Allowance balance - individually evaluated for impairment	$	1,703	$	15	$	196	$	53	$	402	$	4	$	2,373
Ending Allowance balance - collectively evaluated for impairment		2,130		463		2,339		1,337		326		1		6,596
	$	3,833	$	478	$	2,535	$	1,390	$	728	$	5	$	8,969
Ending loan balance - individually evaluated for impairment	$	20,403	$	148	$	5,656	$	858	$	3,137	$	96	$	30,298
Ending loan balance - collectively evaluated for impairment		237,256		46,320		190,054		89,244		15,992		1,114		579,980
	$	257,659	$	46,468	$	195,710	$	90,102	$	19,129	$	1,210	$	610,278

	Three Months Ended September 30, 2016
	Residential Mortgage			Commercial			Commercial Real Estate			ADC			Home Equity/ 2nds		Consumer			Total
	(dollars in thousands)
Beginning Balance	$	3,892		$	752		$	2,577		$	983		$	593	$	7		$	8,804
Charge-offs		-			-			-			(72	)		-		-			(72	)
Recoveries		137			10			4			-			2		50			203
Net recoveries (charge-offs)		137			10			4			(72	)		2		50			131
(Reversal of) provision for loan losses		(161	)		(63	)		(189	)		289			226		(52	)		50
Ending Balance	$	3,868		$	699		$	2,392		$	1,200		$	821	$	5		$	8,985

	Nine Months Ended September 30, 2016
	(dollars in thousands)
Beginning Balance	$	4,188		$	291		$	2,792		$	956		$	528		$	3		$	8,758
Charge-offs		(151	)		(17	)		(178	)		(72	)		(28	)		-			(446	)
Recoveries		322			43			4			100			4			50			523
Net recoveries (charge-offs)		171			26			(174	)		28			(24	)		50			77
(Reversal of) provision for loan losses		(491	)		382			(226	)		216			317			(48	)		150
Ending Balance	$	3,868		$	699		$	2,392		$	1,200		$	821		$	5		$	8,985
Ending balance - individually evaluated for impairment	$	1,583		$	15		$	200		$	55		$	402		$	4		$	2,259
Ending balance - collectively evaluated for impairment		2,285			684			2,192			1,145			419			1			6,726
	$	3,868		$	699		$	2,392		$	1,200		$	821		$	5		$	8,985
Ending loan balance -  individually evaluated for impairment	$	22,521		$	495		$	5,696		$	1,446		$	3,519		$	100		$	33,777
Ending loan balance - collectively evaluated for impairment		246,375			41,864			193,219			79,894			16,220			1,109			578,681
	$	268,896		$	42,359		$	198,915		$	81,340		$	19,739		$	1,209		$	612,458

Credit quality breakdown of loan portfolio by class

The following tables present the credit quality breakdown of our loan portfolio by class:

	September 30, 2017
	Pass		Special Mention		Substandard		Total
	(dollars in thousands)
Residential mortgage	$	281,954	$	1,397	$	5,818	$	289,169
Commercial		37,299		50		136		37,485
Commercial real estate		216,373		4,668		2,126		223,167
ADC		82,958		-		1,206		84,164
Home equity/2nds		14,531		471		859		15,861
Consumer		1,118		-		-		1,118
	$	634,233	$	6,586	$	10,145	$	650,964

	December 31, 2016
	Pass		Special Mention		Substandard		Total
	(dollars in thousands)
Residential mortgage	$	248,819	$	4,316	$	4,524	$	257,659
Commercial		46,011		204		253		46,468
Commercial real estate		184,820		7,420		3,470		195,710
ADC		89,324		-		778		90,102
Home equity/2nds		16,056		472		2,601		19,129
Consumer		1,210		-		-		1,210
	$	586,240	$	12,412	$	11,626	$	610,278

Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans:

	September 30, 2017
	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total		Non- Accrual
	(dollars in thousands)
Residential mortgage	$	1,173	$	1,216	$	2,364	$	4,753	$	284,416	$	289,169	$	4,531
Commercial		-		-		-		-		37,485		37,485		84
Commercial real estate		-		478		-		478		222,689		223,167		160
ADC		-		-		239		239		83,925		84,164		318
Home equity/2nds		-		-		458		458		15,403		15,861		1,284
Consumer		-		-		-		-		1,118		1,118		-
	$	1,173	$	1,694	$	3,061	$	5,928	$	645,036	$	650,964	$	6,377

	December 31, 2016
	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total		Non- Accrual
	(dollars in thousands)
Residential mortgage	$	1,472	$	2,074	$	964	$	4,510	$	253,149	$	257,659	$	3,580
Commercial		-		-		-		-		46,468		46,468		151
Commercial real estate		-		171		515		686		195,024		195,710		2,938
ADC		106		-		6		112		89,990		90,102		269
Home equity/2nds		34		-		2,174		2,208		16,921		19,129		2,914
Consumer		4		-		-		4		1,206		1,210		-
	$	1,616	$	2,245	$	3,659	$	7,520	$	602,758	$	610,278	$	9,852

Summary of Impaired loans

The following tables summarize impaired loans:

	September 30, 2017						December 31, 2016
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Unpaid Principal Balance		Recorded Investment		Related Allowance
With no related Allowance:	(dollars in thousands)
Residential mortgage	$	12,856	$	11,306	$	-	$	9,854	$	9,338	$	-
Commercial		-		-		-		-		-		-
Commercial real estate		1,576		1,527		-		3,900		3,698		-
ADC		636		636		-		441		441		-
Home equity/2nds		-		-		-		2,139		1,529		-
Consumer		-		-		-		-		-		-
With a related Allowance:
Residential mortgage		9,306		9,073		1,544		11,176		11,065		1,703
Commercial		-		-		-		148		148		15
Commercial real estate		1,892		1,892		186		1,958		1,958		196
ADC		402		367		50		417		417		53
Home equity/2nds		-		-		-		1,608		1,608		402
Consumer		87		87		2		96		96		4
Totals:
Residential mortgage		22,162		20,379		1,544		21,030		20,403		1,703
Commercial		-		-		-		148		148		15
Commercial real estate		3,468		3,419		186		5,858		5,656		196
ADC		1,038		1,003		50		858		858		53
Home equity/2nds		-		-		-		3,747		3,137		402
Consumer		87		87		2		96		96		4

	Three Months Ended September 30,								Nine Months Ended September 30,
	2017				2016				2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related Allowance:	(dollars in thousands)
Residential mortgage	$	10,423	$	138	$	12,734	$	132	$	9,696	$	353	$	13,774	$	417
Commercial		-		-		274		2		-		-		150		3
Commercial real estate		1,531		22		3,730		57		2,652		69		4,655		134
ADC		637		9		1,031		9		487		21		1,431		36
Home equity/2nds		918		15		1,911		18		679		40		1,991		59
Consumer		-		-		-		-		-		-		23		-
With a related Allowance:
Residential mortgage		8,910		116		9,831		106		9,231		286		10,684		356
Commercial		-		-		149		2		37		-		182		7
Commercial real estate		1,896		23		1,977		25		1,919		73		2,040		77
ADC		369		6		426		6		385		16		513		20
Home equity/2nds		180		-		1,078		6		715		-		370		7
Consumer		88		1		102		1		91		2		73		2
Totals:
Residential mortgage		19,333		254		22,565		238		18,927		639		24,458		773
Commercial		-		-		423		4		37		-		332		10
Commercial real estate		3,427		45		5,707		82		4,571		142		6,695		211
ADC		1,006		15		1,457		15		872		37		1,944		56
Home equity/2nds		1,098		15		2,989		24		1,394		40		2,361		66
Consumer		88		1		102		1		91		2		96		2

Loans modified as TDRs

The following table presents loans that were modified during the nine months ended September 30:

	2017						2016
	Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification		Number of Modifications		Recorded Investment Prior to Modification		Recorded Investment After Modification
	(dollars in thousands)
Residential Mortgage								3	$	624	$	624
		-	$	-	$	-		3	$	624	$	624

Interest on our portfolio of TDRs was accounted for under the following methods:

	September 30, 2017
	Number of Modifications		Accrual Status		Number of Modifications		Nonaccrual Status		Total Number of Modifications		Total Balance of Modifications
	(dollars in thousands)
Residential mortgage		43	$	13,086		4	$	2,285		47	$	15,371
Commercial real estate		3		1,875		1		84		4		1,959
ADC		1		138		1		6		2		144
Home equity/2nds		1		230		-		-		1		230
Consumer		4		87		-		-		4		87
		52	$	15,416		6	$	2,375		58	$	17,791

	December 31, 2016
	Number of Modifications		Accrual Status		Number of Modifications		Nonaccrual Status		Total Number of Modifications		Total Balance of Modifications
	(dollars in thousands)
Residential mortgage		48	$	15,886		4	$	2,137		52	$	18,023
Commercial real estate		3		1,914		2		249		5		2,163
ADC		2		170		1		6		3		176
Consumer		5		96		-		-		5		96
		58	$	18,066		7	$	2,392		65	$	20,458

Contract amounts for off-balance sheet instruments

The following table shows the contract amounts for our off-balance sheet instruments:

	September 30, 2017		December 31, 2016
	(dollars in thousands)
Standby letters of credit	$	3,854	$	4,022
Home equity lines of credit		12,425		7,736
Unadvanced construction commitments		72,045		15,728
Mortgage loan commitments		-		574
Lines of credit		13,092		34,125
Loans sold and serviced with limited repurchase provisions		19,979		70,773