Loans (Tables)

6 Months Ended

Jun. 30, 2016

Loans and Leases Receivable Disclosure [Abstract]

The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of June 30, 2016 and December 31, 2015:



(In thousands)	June 30, 2016		December 31, 2015
SBA loans held for investment	$	40,006	$	39,393
SBA 504 loans	27,038		29,353
Commercial loans
Commercial other	51,981		49,332
Commercial real estate	396,480		391,071
Commercial real estate construction	33,252		25,115
Residential mortgage loans	268,774		264,523
Consumer loans
Home equity	44,518		45,042
Consumer other	39,749		32,015
Total loans held for investment	$	901,798	$	875,844
SBA loans held for sale	13,245		13,114
Total loans	$	915,043	$	888,958

Loan Portfolio by Class According to Credit Quality Indicators

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of June 30, 2016:



	June 30, 2016
	SBA, SBA 504 & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	36,748	$	1,435	$	1,823	$	40,006
SBA 504 loans	23,555		2,829		654		27,038
Commercial loans
Commercial other	48,721		1,731		1,529		51,981
Commercial real estate	380,332		15,659		489		396,480
Commercial real estate construction	32,225		721		306		33,252
Total commercial loans	461,278		18,111		2,324		481,713
Total SBA, SBA 504 and commercial loans	$	521,581	$	22,375	$	4,801	$	548,757

	Residential mortgage & Consumer loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	267,185	$	1,589	$	268,774
Consumer loans
Home equity			44,019		499		44,518
Consumer other			39,749		—		39,749
Total consumer loans			83,768		499		84,267
Total residential mortgage and consumer loans			$	350,953	$	2,088	$	353,041

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of December 31, 2015:



	December 31, 2015
	SBA, SBA 504 & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	35,032	$	2,647	$	1,714	$	39,393
SBA 504 loans	24,003		4,917		433		29,353
Commercial loans
Commercial other	45,870		2,373		1,089		49,332
Commercial real estate	369,510		18,978		2,583		391,071
Commercial real estate construction	24,061		1,054		—		25,115
Total commercial loans	439,441		22,405		3,672		465,518
Total SBA, SBA 504 and commercial loans	$	498,476	$	29,969	$	5,819	$	534,264

	Residential mortgage & Consumer loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	262,299	$	2,224	$	264,523
Consumer loans
Home equity			44,452		590		45,042
Consumer other			32,015		—		32,015
Total consumer loans			76,467		590		77,057
Total residential mortgage and consumer loans			$	338,766	$	2,814	$	341,580

Aging Analysis of Past Due and Nonaccrual Loans by Loan Class

The following tables set forth an aging analysis of past due and nonaccrual loans as of June 30, 2016 and December 31, 2015:



	June 30, 2016
(In thousands)	30-59 days past due		60-89 days past due		90+ days and still accruing		Nonaccrual (1)		Total past due		Current		Total loans
SBA loans held for investment	$	763	$	315	$	—	$	1,616	$	2,694	$	37,312	$	40,006
SBA 504 loans	—		—		—		513		513		26,525		27,038
Commercial loans
Commercial other	2		—		—		1,529		1,531		50,450		51,981
Commercial real estate	2,065		11		—		489		2,565		393,915		396,480
Commercial real estate construction	—		—		—		306		306		32,946		33,252
Residential mortgage loans	1,989		1,061		485		1,589		5,124		263,650		268,774
Consumer loans
Home equity	280		—		—		499		779		43,739		44,518
Consumer other	—		—		—		—		—		39,749		39,749
Total loans held for investment	$	5,099	$	1,387	$	485	$	6,541	$	13,512	$	888,286	$	901,798
SBA loans held for sale	—		—		—		—		—		13,245		13,245
Total loans	$	5,099	$	1,387	$	485	$	6,541	$	13,512	$	901,531	$	915,043


(1)	At June 30, 2016, nonaccrual loans included $161 thousand of TDRs and $134 thousand of loans guaranteed by the SBA. The remaining $772 thousand of TDRs are in accrual status because they are performing in accordance with their restructured terms.



	December 31, 2015
(In thousands)	30-59 days past due		60-89 days past due		90+ days and still accruing		Nonaccrual (1)		Total past due		Current		Total loans
SBA loans held for investment	$	1,153	$	456	$	—	$	1,764	$	3,373	$	36,020	$	39,393
SBA 504 loans	—		—		—		518		518		28,835		29,353
Commercial loans
Commercial other	157		—		—		10		167		49,165		49,332
Commercial real estate	444		283		—		2,154		2,881		388,190		391,071
Commercial real estate construction	356		—		—		—		356		24,759		25,115
Residential mortgage loans	2,307		1,078		—		2,224		5,609		258,914		264,523
Consumer loans
Home equity	130		3		—		590		723		44,319		45,042
Consumer other	1		—		—		—		1		32,014		32,015
Total loans held for investment	$	4,548	$	1,820	$	—	$	7,260	$	13,628	$	862,216	$	875,844
SBA loans held for sale	—		—		—		—		—		13,114		13,114
Total loans	$	4,548	$	1,820	$	—	$	7,260	$	13,628	$	875,330	$	888,958


(1)	At December 31, 2015, nonaccrual loans included $293 thousand of TDRs and $288 thousand of loans guaranteed by the SBA. The remaining $3.0 million of TDRs are in accrual status because they are performing in accordance with their restructured terms.

Impaired Loans with Associated Allowance Amount

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of June 30, 2016:



	June 30, 2016
(In thousands)	Unpaid principal balance		Recorded investment		Specific reserves
With no related allowance:
SBA loans held for investment (1)	$	1,097	$	719	$	—
SBA 504 loans	513		513		—
Commercial loans
Commercial other	922		922		—
Commercial real estate	1,226		1,226		—
Commercial real estate construction	356		306		—
Total commercial loans	2,504		2,454		—
Total impaired loans with no related allowance	4,114		3,686		—

With an allowance:
SBA loans held for investment (1)	1,457		798		415
Commercial loans
Commercial other	620		607		274
Commercial real estate	—		—		—
Commercial real estate construction	—		—		—
Total commercial loans	620		607		274
Total impaired loans with a related allowance	2,077		1,405		689

Total individually evaluated impaired loans:
SBA loans held for investment (1)	2,554		1,517		415
SBA 504 loans	513		513		—
Commercial loans
Commercial other	1,542		1,529		274
Commercial real estate	1,226		1,226		—
Commercial real estate construction	356		306		—
Total commercial loans	3,124		3,061		274
Total individually evaluated impaired loans	$	6,191	$	5,091	$	689


(1)	Balances are reduced by amount guaranteed by the SBA of $134 thousand at June 30, 2016.

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of December 31, 2015:



	December 31, 2015
(In thousands)	Unpaid principal balance		Recorded investment		Specific reserves
With no related allowance:
SBA loans held for investment (1)	$	961	$	518	$	—
SBA 504 loans	2,226		2,226		—
Commercial loans
Commercial real estate	1,365		1,366		—
Total commercial loans	1,365		1,366		—
Total impaired loans with no related allowance	4,552		4,110		—

With an allowance:
SBA loans held for investment (1)	2,203		1,389		705
Commercial loans
Commercial other	33		10		10
Commercial real estate	1,664		1,664		127
Total commercial loans	1,697		1,674		137
Total impaired loans with a related allowance	3,900		3,063		842

Total individually evaluated impaired loans:
SBA loans held for investment (1)	3,164		1,907		705
SBA 504 loans	2,226		2,226		—
Commercial loans
Commercial other	33		10		10
Commercial real estate	3,029		3,030		127
Total commercial loans	3,062		3,040		137
Total individually evaluated impaired loans	$	8,452	$	7,173	$	842


(1)	Balances are reduced by amount guaranteed by the SBA of $288 thousand at December 31, 2015.

Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized

The following tables present the average recorded investments in impaired loans and the related amount of interest recognized during the time period in which the loans were impaired for the three and six months ended June 30, 2016 and 2015. The average balances are calculated based on the month-end balances of impaired loans. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method, and therefore no interest income is recognized. The interest income recognized on impaired loans noted below represents primarily accruing TDRs and nominal amounts of income recognized on a cash basis for well-collateralized impaired loans.



	For the three months ended June 30,
	2016				2015
(In thousands)	Average recorded investment		Interest income recognized on impaired loans		Average recorded investment		Interest income recognized on impaired loans
SBA loans held for investment (1)	$	1,640	$	1	$	1,873	$	2
SBA 504 loans	513		—		1,996		26
Commercial loans
Commercial other	929		14		1,073		38
Commercial real estate	1,273		19		4,521		9
Commercial real estate construction	339		—		—		—
Total	$	4,694	$	34	$	9,463	$	75


(1)	Balances are reduced by the average amount guaranteed by the SBA of $218 thousand and $269 thousand for the three months ended June 30, 2016 and 2015, respectively.



	For the six months ended June 30,
	2016				2015
(In thousands)	Average recorded investment		Interest income recognized on impaired loans		Average recorded investment		Interest income recognized on impaired loans
SBA loans held for investment (1)	$	1,822	$	3	$	1,935	$	39
SBA 504 loans	1,082		—		2,933		53
Commercial loans
Commercial other	496		38		1,095		56
Commercial real estate	1,662		31		4,778		71
Commercial real estate construction	288		—		—		—
Total	$	5,350	$	72	$	10,741	$	219


(1)	Balances are reduced by the average amount guaranteed by the SBA of $241 thousand and $534 thousand for the six months ended June 30, 2016 and 2015, respectively.