Loans (Tables)

9 Months Ended

Sep. 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 September 30, 2016 and December 31, 2015:



(In thousands)	September 30, 2016		December 31, 2015
SBA loans held for investment	$	41,795	$	39,393
SBA 504 loans	26,067		29,353
Commercial loans
Commercial other	52,927		49,332
Commercial real estate	407,686		391,071
Commercial real estate construction	35,395		25,115
Residential mortgage loans	282,317		264,523
Consumer loans
Home equity	45,495		45,042
Consumer other	42,539		32,015
Total loans held for investment	$	934,221	$	875,844
SBA loans held for sale	15,611		13,114
Total loans	$	949,832	$	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 September 30, 2016:



	September 30, 2016
	SBA, SBA 504 & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	38,560	$	1,640	$	1,595	$	41,795
SBA 504 loans	22,625		2,797		645		26,067
Commercial loans
Commercial other	50,724		1,617		586		52,927
Commercial real estate	394,051		13,609		451		407,686
Commercial real estate construction	34,339		750		306		35,395
Total commercial loans	479,114		15,976		1,343		496,008
Total SBA, SBA 504 and commercial loans	$	540,299	$	20,413	$	3,583	$	563,870

	Residential mortgage & Consumer loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	279,719	$	2,598	$	282,317
Consumer loans
Home equity			45,006		489		45,495
Consumer other			42,539		—		42,539
Total consumer loans			87,545		489		88,034
Total residential mortgage and consumer loans			$	367,264	$	3,087	$	370,351

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 September 30, 2016 and December 31, 2015:



	September 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	$	445	$	8	$	—	$	1,967	$	2,420	$	39,375	$	41,795
SBA 504 loans	—		—		—		513		513		25,554		26,067
Commercial loans
Commercial other	—		—		—		611		611		52,316		52,927
Commercial real estate	1,708		—		—		43		1,751		405,935		407,686
Commercial real estate construction	—		—		—		306		306		35,089		35,395
Residential mortgage loans	2,491		948		—		2,598		6,037		276,280		282,317
Consumer loans
Home equity	—		324		—		489		813		44,682		45,495
Consumer other	—		—		—		—		—		42,539		42,539
Total loans held for investment	$	4,644	$	1,280	$	—	$	6,527	$	12,451	$	921,770	$	934,221
SBA loans held for sale	—		—		—		—		—		15,611		15,611
Total loans	$	4,644	$	1,280	$	—	$	6,527	$	12,451	$	937,381	$	949,832


(1)	At September 30, 2016, nonaccrual loans included $154 thousand of TDRs and $624 thousand of loans guaranteed by the SBA. The remaining $666 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 September 30, 2016:



	September 30, 2016
(In thousands)	Unpaid principal balance		Recorded investment		Specific reserves
With no related allowance:
SBA loans held for investment (1)	$	926	$	609	$	—
SBA 504 loans	513		513		—
Commercial loans
Commercial other	24		25		—
Commercial real estate	710		709		—
Commercial real estate construction	356		306		—
Total commercial loans	1,090		1,040		—
Total impaired loans with no related allowance	2,529		2,162		—

With an allowance:
SBA loans held for investment (1)	1,393		734		351
Commercial loans
Commercial other	599		586		253
Commercial real estate	—		—		—
Commercial real estate construction	—		—		—
Total commercial loans	599		586		253
Total impaired loans with a related allowance	1,992		1,320		604

Total individually evaluated impaired loans:
SBA loans held for investment (1)	2,319		1,343		351
SBA 504 loans	513		513		—
Commercial loans
Commercial other	623		611		253
Commercial real estate	710		709		—
Commercial real estate construction	356		306		—
Total commercial loans	1,689		1,626		253
Total individually evaluated impaired loans	$	4,521	$	3,482	$	604


(1)	Balances are reduced by amount guaranteed by the SBA of $624 thousand at September 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 nine months ended September 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 September 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)	$	1,341	$	2	$	1,773	$	30
SBA 504 loans	513		—		2,010		27
Commercial loans
Commercial other	1,217		—		987		35
Commercial real estate	731		21		5,732		37
Commercial real estate construction	306		—		—		—
Total	$	4,108	$	23	$	10,502	$	129


(1)	Balances are reduced by the average amount guaranteed by the SBA of $257 thousand and $306 thousand for the three months ended September 30, 2016 and 2015, respectively.



	For the nine months ended September 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)	$	1,662	$	3	$	1,881	$	69
SBA 504 loans	893		—		2,625		79
Commercial loans
Commercial other	736		38		1,059		92
Commercial real estate	1,352		52		5,096		108
Commercial real estate construction	294		—		—		—
Total	$	4,937	$	93	$	10,661	$	349


(1)	Balances are reduced by the average amount guaranteed by the SBA of $246 thousand and $458 thousand for the nine months ended September 30, 2016 and 2015, respectively.