Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2015

Allowance for loan losses by class of financing receivable and allowance

A breakdown of the allowance for loan losses as of June 30, 2015, December 31, 2014, and June 30, 2014, by class of financing receivable and allowance element, is presented in the following tables:



As of June 30, 2015	Specific Reserves on Loans Evaluated Individually for Impairment		General Reserves on Loans Based on Historical Loss Experience		Reserves for Qualitative Factors		Unallocated Reserves		Total Reserves
Commercial
Real estate	$	225,000	$	1,017,000	$	1,701,000	$	—	$	2,943,000
Construction	275,000		161,000		269,000		—		705,000
Other	275,000		522,000		874,000		—		1,671,000
Municipal	—		—		16,000		—		16,000
Residential
Term	501,000		303,000		380,000		—		1,184,000
Construction	—		12,000		15,000		—		27,000
Home equity line of credit	31,000		584,000		303,000		—		918,000
Consumer	—		373,000		207,000		—		580,000
Unallocated	—		—		—		1,864,000		1,864,000
	$	1,307,000	$	2,972,000	$	3,765,000	$	1,864,000	$	9,908,000



As of December 31, 2014	Specific Reserves on Loans Evaluated Individually for Impairment		General Reserves on Loans Based on Historical Loss Experience		Reserves for Qualitative Factors		Unallocated Reserves		Total Reserves
Commercial
Real estate	$	346,000	$	1,444,000	$	1,742,000	$	—	$	3,532,000
Construction	413,000		186,000		224,000		—		823,000
Other	129,000		624,000		752,000		—		1,505,000
Municipal	—		—		15,000		—		15,000
Residential
Term	519,000		297,000		369,000		—		1,185,000
Construction	—		9,000		11,000		—		20,000
Home equity line of credit	396,000		376,000		288,000		—		1,060,000
Consumer	—		346,000		196,000		—		542,000
Unallocated	—		—		—		1,662,000		1,662,000
	$	1,803,000	$	3,282,000	$	3,597,000	$	1,662,000	$	10,344,000



As of June 30, 2014	Specific Reserves on Loans Evaluated Individually for Impairment		General Reserves on Loans Based on Historical Loss Experience		Reserves for Qualitative Factors		Unallocated Reserves		Total Reserves
Commercial
Real estate	$	1,150,000	$	1,246,000	$	1,840,000	$	—	$	4,236,000
Construction	487,000		86,000		127,000		—		700,000
Other	830,000		530,000		783,000		—		2,143,000
Municipal	—		—		16,000		—		16,000
Residential
Term	606,000		288,000		370,000		—		1,264,000
Construction	—		10,000		13,000		—		23,000
Home equity line of credit	73,000		389,000		291,000		—		753,000
Consumer	—		383,000		199,000		—		582,000
Unallocated	—		—		—		1,927,000		1,927,000
	$	3,146,000	$	2,932,000	$	3,639,000	$	1,927,000	$	11,644,000

Summary of Risk Ratings for Loans

The following table summarizes the risk ratings for the Company's commercial real estate, commercial construction, commercial other, and municipal loans as of June 30, 2015:



	Commercial Real Estate		Commercial Construction		Commercial Other		Municipal Loans		All Risk- Rated Loans
1 Strong	$	10,000	$	—	$	1,177,000	$	—	$	1,187,000
2 Above Average	14,233,000		59,000		8,854,000		21,284,000		44,430,000
3 Satisfactory	53,204,000		1,760,000		25,281,000		1,537,000		81,782,000
4 Average	117,345,000		33,579,000		68,015,000		—		218,939,000
5 Watch	35,279,000		3,359,000		19,723,000		—		58,361,000
6 OAEM	8,799,000		—		1,458,000		—		10,257,000
7 Substandard	20,544,000		747,000		3,664,000		—		24,955,000
8 Doubtful	—		—		77,000		—		77,000
Total	$	249,414,000	$	39,504,000	$	128,249,000	$	22,821,000	$	439,988,000

The following table summarizes the risk ratings for the Company's commercial real estate, commercial construction, commercial other, and municipal loans as of December 31, 2014:



	Commercial Real Estate		Commercial Construction		Commercial Other		Municipal Loans		All Risk- Rated Loans
1 Strong	$	12,000	$	—	$	330,000	$	—	$	342,000
2 Above Average	12,668,000		771,000		7,210,000		18,789,000		39,438,000
3 Satisfactory	50,275,000		1,983,000		24,232,000		1,635,000		78,125,000
4 Average	108,719,000		23,345,000		44,895,000		—		176,959,000
5 Watch	36,974,000		1,567,000		18,171,000		—		56,712,000
6 OAEM	9,846,000		2,519,000		1,970,000		—		14,335,000
7 Substandard	23,817,000		747,000		7,723,000		—		32,287,000
8 Doubtful	—		—		—		—		—
Total	$	242,311,000	$	30,932,000	$	104,531,000	$	20,424,000	$	398,198,000

The following table summarizes the risk ratings for the Company's commercial real estate, commercial construction, commercial other, and municipal loans as of June 30, 2014:



	Commercial Real Estate		Commercial Construction		Commercial Other		Municipal Loans		All Risk- Rated Loans
1 Strong	$	14,000	$	—	$	269,000	$	—	$	283,000
2 Above Average	10,936,000		741,000		7,820,000		16,003,000		35,500,000
3 Satisfactory	46,379,000		1,003,000		20,856,000		1,890,000		70,128,000
4 Average	106,209,000		11,106,000		48,042,000		—		165,357,000
5 Watch	37,995,000		789,000		14,145,000		—		52,929,000
6 OAEM	18,527,000		2,668,000		2,724,000		—		23,919,000
7 Substandard	25,600,000		777,000		10,378,000		—		36,755,000
8 Doubtful	—		—		—		—		—
Total	$	245,660,000	$	17,084,000	$	104,234,000	$	17,893,000	$	384,871,000

Allowance for Loan Losses Transactions

The following table presents allowance for loan losses activity by class for the six months and quarter ended June 30, 2015, and allowance for loan loss balances by class and related loan balances by class as of June 30, 2015:



	Commercial								Municipal		Residential				Home Equity Line of Credit			Consumer		Unallocated		Total
	Real Estate			Construction			Other				Term		Construction
For the six months ended June 30, 2015
Beginning balance	$	3,532,000		$	823,000		$	1,505,000	$	15,000	$	1,185,000	$	20,000	$	1,060,000		$	542,000	$	1,662,000	$	10,344,000
Charge offs	122,000			9,000			486,000		—		149,000		—		508,000			205,000		—		1,479,000
Recoveries	—			—			15,000		—		33,000		—		30,000			65,000		—		143,000
Provision (credit)	(467,000		)	(109,000		)	637,000		1,000		115,000		7,000		336,000			178,000		202,000		900,000
Ending balance	$	2,943,000		$	705,000		$	1,671,000	$	16,000	$	1,184,000	$	27,000	$	918,000		$	580,000	$	1,864,000	$	9,908,000
For the three months ended June 30, 2015
Beginning balance	$	3,117,000		$	807,000		$	1,714,000	$	16,000	$	1,108,000	$	23,000	$	1,044,000		$	526,000	$	1,841,000	$	10,196,000
Charge offs	—			9,000			484,000		—		66,000		—		61,000			143,000		—		763,000
Recoveries	—			—			11,000		—		27,000		—		8,000			29,000		—		75,000
Provision (credit)	(174,000		)	(93,000		)	430,000		—		115,000		4,000		(73,000		)	168,000		23,000		400,000
Ending balance	$	2,943,000		$	705,000		$	1,671,000	$	16,000	$	1,184,000	$	27,000	$	918,000		$	580,000	$	1,864,000	$	9,908,000
Allowance for loan losses as of June 30, 2015
Ending balance specifically evaluated for impairment	$	225,000		$	275,000		$	275,000	$	—	$	501,000	$	—	$	31,000		$	—	$	—	$	1,307,000
Ending balance collectively evaluated for impairment	$	2,718,000		$	430,000		$	1,396,000	$	16,000	$	683,000	$	27,000	$	887,000		$	580,000	$	1,864,000	$	8,601,000
Related loan balances as of June 30, 2015
Ending balance	$	249,414,000		$	39,504,000		$	128,249,000	$	22,821,000	$	378,090,000	$	14,215,000	$	108,788,000		$	22,028,000	$	—	$	963,109,000
Ending balance specifically evaluated for impairment	$	12,566,000		$	989,000		$	2,106,000	$	—	$	15,420,000	$	—	$	1,572,000		$	95,000	$	—	$	32,748,000
Ending balance collectively evaluated for impairment	$	236,848,000		$	38,515,000		$	126,143,000	$	22,821,000	$	362,670,000	$	14,215,000	$	107,216,000		$	21,933,000	$	—	$	930,361,000

The following table presents allowance for loan losses activity by class for the year-ended December 31, 2014 and allowance for loan loss balances by class and related loan balances by class as of December 31, 2014:



	Commercial								Municipal		Residential					Home Equity Line of Credit		Consumer		Unallocated			Total
	Real Estate			Construction		Other					Term		Construction
For the year ended December 31, 2014
Beginning balance	$	4,602,000		$	575,000	$	2,276,000		$	15,000	$	1,099,000	$	21,000		$	675,000	$	573,000	$	1,678,000		$	11,514,000
Charge offs	1,205,000			—		989,000			—		699,000		—			153,000		449,000		—			3,495,000
Recoveries	144,000			—		758,000			—		36,000		25,000			16,000		196,000		—			1,175,000
Provision (credit)	(9,000		)	248,000		(540,000		)	—		749,000		(26,000		)	522,000		222,000		(16,000		)	1,150,000
Ending balance	$	3,532,000		$	823,000	$	1,505,000		$	15,000	$	1,185,000	$	20,000		$	1,060,000	$	542,000	$	1,662,000		$	10,344,000
Allowance for loan losses as of December 31, 2014
Ending balance specifically evaluated for impairment	$	346,000		$	413,000	$	129,000		$	—	$	519,000	$	—		$	396,000	$	—	$	—		$	1,803,000
Ending balance collectively evaluated for impairment	$	3,186,000		$	410,000	$	1,376,000		$	15,000	$	666,000	$	20,000		$	664,000	$	542,000	$	1,662,000		$	8,541,000
Related loan balances as of December 31, 2014
Ending balance	$	242,311,000		$	30,932,000	$	104,531,000		$	20,424,000	$	384,032,000	$	12,160,000		$	103,521,000	$	19,653,000	$	—		$	917,564,000
Ending balance specifically evaluated for impairment	$	13,304,000		$	1,380,000	$	2,942,000		$	—	$	16,123,000	$	—		$	2,087,000	$	26,000	$	—		$	35,862,000
Ending balance collectively evaluated for impairment	$	229,007,000		$	29,552,000	$	101,589,000		$	20,424,000	$	367,909,000	$	12,160,000		$	101,434,000	$	19,627,000	$	—		$	881,702,000

The following table presents allowance for loan losses activity by class for the six months and quarter ended June 30, 2014, and allowance for loan loss balances by class and related loan balances by class as of June 30, 2014:



	Commercial								Municipal		Residential				Home Equity Line of Credit		Consumer		Unallocated		Total
	Real Estate			Construction		Other					Term		Construction
For the six months ended June 30, 2014
Beginning balance	$	4,602,000		$	575,000	$	2,276,000		$	15,000	$	1,099,000	$	21,000	$	675,000	$	573,000	$	1,678,000	$	11,514,000
Charge offs	315,000			—		175,000			—		338,000		—		153,000		219,000		—		1,200,000
Recoveries	2,000			—		705,000			—		8,000		—		2,000		113,000		—		830,000
Provision (credit)	(53,000		)	125,000		(663,000		)	1,000		495,000		2,000		229,000		115,000		249,000		500,000
Ending balance	$	4,236,000		$	700,000	$	2,143,000		$	16,000	$	1,264,000	$	23,000	$	753,000	$	582,000	$	1,927,000	$	11,644,000
For the three months ended June 30, 2014
Beginning balance	$	4,500,000		$	590,000	$	2,241,000		$	15,000	$	1,232,000	$	22,000	$	708,000	$	517,000	$	1,830,000	$	11,655,000
Charge offs	295,000			—		1,000			—		219,000		—		141,000		149,000		—		805,000
Recoveries	1,000			—		641,000			—		4,000		—		1,000		47,000		—		694,000
Provision (credit)	30,000			110,000		(738,000		)	1,000		247,000		1,000		185,000		167,000		97,000		100,000
Ending balance	$	4,236,000		$	700,000	$	2,143,000		$	16,000	$	1,264,000	$	23,000	$	753,000	$	582,000	$	1,927,000	$	11,644,000
Allowance for loan losses as of June 30, 2014
Ending balance specifically evaluated for impairment	$	1,150,000		$	487,000	$	830,000		$	—	$	606,000	$	—	$	73,000	$	—	$	—	$	3,146,000
Ending balance collectively evaluated for impairment	$	3,086,000		$	213,000	$	1,313,000		$	16,000	$	658,000	$	23,000	$	680,000	$	582,000	$	1,927,000	$	8,498,000
Related loan balances as of June 30, 2014
Ending balance	$	245,660,000		$	17,084,000	$	104,234,000		$	17,893,000	$	379,027,000	$	13,253,000	$	97,821,000	$	16,892,000	$	—	$	891,864,000
Ending balance specifically evaluated for impairment	$	14,803,000		$	1,492,000	$	4,325,000		$	—	$	16,102,000	$	—	$	1,533,000	$	—	$	—	$	38,255,000
Ending balance collectively evaluated for impairment	$	230,857,000		$	15,592,000	$	99,909,000		$	17,893,000	$	362,925,000	$	13,253,000	$	96,288,000	$	16,892,000	$	—	$	853,609,000