Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2017

Changes in the allowance for loan losses for the years ended December 31, 2017, 2016 and 2015 are presented below:

Commercial	2017			2016			2015
	(dollars in thousands)
Balance, beginning of year	$	1,404		$	1,310		$	1,716
Provision (recovery) charged to operations		(72	)		175			(527	)
Charge-offs		(31	)		(146	)		(89	)
Recoveries		100			65			210
Net (charge-offs)		69			(81	)		121
Other		—			—			—
Balance, end of year	$	1,401		$	1,404		$	1,310

Non-Commercial	2017			2016			2015
	(dollars in thousands)
Balance, beginning of year	$	1,303		$	1,574		$	2,022
Provision (recovery) charged to operations		(164	)		(263	)		(93	)
Charge-offs		(177	)		(244	)		(500	)
Recoveries		95			236			145
Net (charge-offs)		(82	)		(8	)		(355	)
Other		—			—			—
Balance, end of year	$	1,057		$	1,303		$	1,574

Total	2017			2016			2015
	(dollars in thousands)
Balance, beginning of year	$	2,707		$	2,884		$	3,738
Provision (recovery) charged to operations		(236	)		(88	)		(620	)
Charge-offs		(208	)		(390	)		(589	)
Recoveries		195			301			355
Net (charge-offs)		(13	)		(89	)		(234	)
Other		—			—			—
Balance, end of year	$	2,458		$	2,707		$	2,884

Schedule of Loans and Reserve Balances by Loan Segment Both Individually and Collectively Evaluated for Impairment

The following table shows period-end loans and reserve balances by loan segment both individually and collectively evaluated for impairment at December 31, 2017 and 2016:

December 31, 2017	Individually Evaluated				Collectively Evaluated				Total
	Reserve		Loans		Reserve		Loans		Reserve		Loans
	(dollars in thousands)
Commercial	$	22	$	1,788	$	1,379	$	208,022	$	1,401	$	209,810
Non-Commercial		172		3,781		885		143,280		1,057		147,061
Total	$	194	$	5,569	$	2,264	$	351,302	$	2,458	$	356,871

December 31, 2016	Individually Evaluated				Collectively Evaluated				Total
	Reserve		Loans		Reserve		Loans		Reserve		Loans
	(dollars in thousands)
Commercial	$	16	$	1,993	$	1,388	$	190,229	$	1,404	$	192,222
Non-Commercial		123		4,096		1,180		145,511		1,303		149,607
Total	$	139	$	6,089	$	2,568	$	335,740	$	2,707	$	341,829

Past Due Information of Loan Portfolio by Class

Past due loan information is used by management when assessing the adequacy of the allowance for loan loss. The following tables summarize the past due information of the loan portfolio by class:

December 31, 2017	Loans 30-89 Days Past Due		Loans 90 Days or More Past due and Non - Accrual		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or More Days Past Due
	(dollars in thousands)
Commercial	$	—	$	34	$	34	$	54,878	$	54,912	$	—
Real estate - commercial		—		377		377		114,335		114,712		—
Other real estate construction		—		51		51		40,135		40,186		—
Real estate construction		—		—		—		5,024		5,024		—
Real estate - residential		579		540		1,119		76,800		77,919		—
Home equity		108		23		131		50,375		50,506		—
Consumer loan		83		—		83		10,691		10,774		—
Other loans		—		—		—		2,838		2,838		—
Total	$	770	$	1,025	$	1,795	$	355,076	$	356,871	$	—

December 31, 2016	Loans 30-89 Days Past Due		Loans 90 Days or More Past due and Non - Accrual		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or More Days Past Due
	(dollars in thousands)
Commercial	$	—	$	—	$	—	$	55,752	$	55,752	$	—
Real estate - commercial		—		392		392		109,360		109,752		—
Other real estate construction		106		190		296		26,422		26,718		—
Real estate construction		—		—		—		5,625		5,625		—
Real estate - residential		510		846		1,356		80,413		81,769		—
Home equity		66		22		88		50,727		50,815		—
Consumer loan		36		—		36		9,675		9,711		—
Other loans		—		—		—		1,687		1,687		—
Total	$	718	$	1,450	$	2,168	$	339,661	$	341,829	$	—

Composition of Nonaccrual Loans by Class

The composition of nonaccrual loans by class as of December 31, 2017 and 2016 is as follows:

	2017		2016
	(dollars in thousands)
Commercial	$	34	$	—
Real estate - commercial		377		392
Other real estate construction		51		190
Real estate 1 – 4 family construction		—		—
Real estate – residential		540		846
Home equity		23		22
Consumer loans		—		—
Other loans		—		—
	$	1,025	$	1,450

Summary of Risk Grades of Portfolio by Class

The tables below summarize risk grades of the loan portfolio by class as of December 31, 2017 and 2016:

December 31, 2017	Pass		Watch		Sub- standard		Doubtful		Total
	(dollars in thousands)
Commercial	$	53,649	$	1,215	$	48	$	—	$	54,912
Real estate - commercial		109,224		3,321		2,167		—		114,712
Other real estate construction		38,082		1,713		391		—		40,186
Real estate 1 - 4 family construction		5,024		—		—		—		5,024
Real estate - residential		69,645		7,119		1,155		—		77,919
Home equity		49,743		740		23		—		50,506
Consumer loans		10,709		64		1		—		10,774
Other loans		2,838		—		—		—		2,838
Total	$	338,914	$	14,172	$	3,785	$	—	$	356,871

December 31, 2016	Pass		Watch		Sub- standard		Doubtful		Total
	(dollars in thousands)
Commercial	$	54,906	$	827	$	19	$	—	$	55,752
Real estate - commercial		105,366		1,937		2,449		—		109,752
Other real estate construction		24,312		1,876		530		—		26,718
Real estate 1 - 4 family construction		5,625		—		—		—		5,625
Real estate - residential		71,105		8,551		2,113		—		81,769
Home equity		49,818		973		24		—		50,815
Consumer loans		9,545		163		3		—		9,711
Other loans		1,687		—		—		—		1,687
Total	$	322,364	$	14,327	$	5,138	$	—	$	341,829

Summary of Performing and Nonperforming Loans by Class

The following tables show the breakdown between performing and nonperforming loans by class as of December 31, 2017 and 2016:

December 31, 2017	Performing		Non- Performing		Total
	(dollars in thousands)
Commercial	$	54,878	$	34	$	54,912
Real estate - commercial		114,335		377		114,712
Other real estate construction		40,135		51		40,186
Real estate 1 – 4 family construction		5,024		—		5,024
Real estate – residential		77,379		540		77,919
Home equity		50,483		23		50,506
Consumer loans		10,774		—		10,774
Other loans		2,838		—		2,838
Total	$	355,846	$	1,025	$	356,871

December 31, 2016	Performing		Non- Performing		Total
	(dollars in thousands)
Commercial	$	55,752	$	—	$	55,752
Real estate - commercial		109,360		392		109,752
Other real estate construction		26,528		190		26,718
Real estate 1 – 4 family construction		5,625		—		5,625
Real estate – residential		80,923		846		81,769
Home equity		50,793		22		50,815
Consumer loans		9,711		—		9,711
Other loans		1,687		—		1,687
Total	$	340,379	$	1,450	$	341,829

Summary of Loans Deemed Impaired and Specific Reserves Allocated by Class

The tables below summarize the loans deemed impaired and the amount of specific reserves allocated by class as of December 31, 2017 and 2016:

	As of December 31, 2017								Year Ended December 31, 2017
			Recorded		Recorded
	Unpaid		Investment		Investment				Average
	Principal		With No		With		Related		Recorded		Interest
	Balance		Allowance		Allowance		Allowance		Investment		Income
	(dollars in thousands)
Commercial	$	44	$	10	$	34	$	10	$	25	$	2
Real estate - commercial		1,593		1,305		288		9		1,650		72
Other real estate construction		689		101		50		3		208		5
Real estate 1 -4 family construction		—		—		—		—		3		—
Real estate - residential		3,701		1,319		2,382		171		3,762		179
Home equity		35		22		13		1		66		1
Consumer loans		45		45		—		—		53		4
Other loans		—		—		—		—		—		—
Total	$	6,107	$	2,802	$	2,767	$	194	$	5,767	$	263

									Year Ended
	As of December 31, 2016								December 31, 2016
			Recorded		Recorded
	Unpaid		Investment		Investment				Average
	Principal		With No		With		Related		Recorded		Interest
	Balance		Allowance		Allowance		Allowance		Investment		Income
	(dollars in thousands)
Commercial	$	29	$	13	$	16	$	2	$	31	$	8
Real estate - commercial		1,671		1,552		119		9		887		64
Other real estate construction		831		190		103		5		296		6
Real estate 1 -4 family construction		6		—		6		—		9		1
Real estate - residential		3,994		2,072		1,922		123		4,434		201
Home equity		35		35		—		—		49		1
Consumer loans		61		61		—		—		71		6
Other loans		—		—		—		—		—		—
Total	$	6,627	$	3,923	$	2,166	$	139	$	5,777	$	287

									Year Ended
	As of December 31, 2015								December 31, 2015
			Recorded		Recorded
	Unpaid		Investment		Investment				Average
	Principal		With No		With		Related		Recorded		Interest
	Balance		Allowance		Allowance		Allowance		Investment		Income
	(dollars in thousands)
Commercial	$	97	$	80	$	17	$	2	$	81	$	4
Real estate - commercial		620		498		122		9		1,121		42
Other real estate construction		840		195		107		7		281		3
Real estate 1 -4 family construction		13		—		13		—		16		1
Real estate - residential		4,343		1,507		2,836		163		4,798		200
Home equity		28		28		—		—		50		1
Consumer loans		75		75		—		—		37		2
Other loans		—		—		—		—		—		—
Total	$	6,016	$	2,383	$	3,095	$	181	$	6,384	$	253