Loans and Related Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2017

The following table summarizes the primary segments of the loan portfolio at September 30, 2017 and December 31, 2016:



(in thousands)	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Residential Mortgage		Consumer		Total
September 30, 2017

Individually evaluated for impairment	$	14,190	$	2,407	$	702	$	3,844	$	0	$	21,143
Collectively evaluated for impairment	$	261,416	$	111,104	$	71,899	$	400,433	$	23,910	$	868,762
Total loans	$	275,606	$	113,511	$	72,601	$	404,277	$	23,910	$	889,905

December 31, 2016

Individually evaluated for impairment	$	17,210	$	2,525	$	290	$	3,975	$	0	$	24,000
Collectively evaluated for impairment	$	280,749	$	101,757	$	72,056	$	389,441	$	23,923	$	867,926
Total loans	$	297,959	$	104,282	$	72,346	$	393,416	$	23,923	$	891,926

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The following table presents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention and Substandard within the internal risk rating system at September 30, 2017 and December 31, 2016:


(in thousands)	Pass		Special Mention		Substandard		Total
September 30, 2017
Commercial real estate
Non owner-occupied	$	133,045	$	0	$	9,234	$	142,279
All other CRE		119,194		3,743		10,390		133,327
Acquisition and development
1-4 family residential construction		15,889		0		0		15,889
All other A&D		96,512		57		1,053		97,622
Commercial and industrial		71,116		40		1,445		72,601
Residential mortgage
Residential mortgage - term		320,242		0		7,895		328,137
Residential mortgage - home equity		73,924		150		2,066		76,140
Consumer		23,848		5		57		23,910
Total	$	853,770	$	3,995	$	32,140	$	889,905

December 31, 2016
Commercial real estate
Non owner-occupied	$	137,181	$	10,620	$	9,357	$	157,158
All other CRE		125,720		3,121		11,960		140,801
Acquisition and development
1-4 family residential construction		15,845		0		0		15,845
All other A&D		87,135		65		1,237		88,437
Commercial and industrial		70,613		593		1,140		72,346
Residential mortgage
Residential mortgage - term		308,734		113		7,618		316,465
Residential mortgage - home equity		75,710		0		1,241		76,951
Consumer		23,794		0		129		23,923
Total	$	844,732	$	14,512	$	32,682	$	891,926

Loan Portfolio Summarized by the Past Due Status

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans at September 30, 2017 and December 31, 2016:



(in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days+ Past Due		Total Past Due and Accruing		Non-Accrual		Total Loans
September 30, 2017
Commercial real estate
Non owner-occupied	$	135,530	$	214	$	0	$	0	$	214	$	6,535	$	142,279
All other CRE		129,424		908		0		0		908		2,995		133,327
Acquisition and development
1-4 family residential construction		15,889		0		0		0		0		0		15,889
All other A&D		97,134		118		338		0		456		32		97,622
Commercial and industrial		72,157		25		0		7		32		412		72,601
Residential mortgage
Residential mortgage - term		323,436		288		2,039		961		3,288		1,413		328,137
Residential mortgage - home equity		74,626		933		325		0		1,258		256		76,140
Consumer		23,700		165		16		29		210		0		23,910
Total	$	871,896	$	2,651	$	2,718	$	997	$	6,366	$	11,643	$	889,905

December 31, 2016
Commercial real estate
Non owner-occupied	$	150,595	$	182	$	0	$	0	$	182	$	6,381	$	157,158
All other CRE		134,931		40		0		0		40		5,830		140,801
Acquisition and development
1-4 family residential construction		15,845		0		0		0		0		0		15,845
All other A&D		88,353		0		39		0		39		45		88,437
Commercial and industrial		72,324		9		2		11		22		0		72,346
Residential mortgage
Residential mortgage - term		310,721		517		3,376		312		4,205		1,539		316,465
Residential mortgage - home equity		75,558		974		198		70		1,242		151		76,951
Consumer		23,662		186		48		27		261		0		23,923
Total	$	871,989	$	1,908	$	3,663	$	420	$	5,991	$	13,946	$	891,926

Primary Segments of the Allowance for Loan Loss

The following table summarizes the primary segments of the ALL at September 30, 2017 and December 31, 2016, segregated by the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment:


(in thousands)	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Residential Mortgage		Consumer			Unallocated	Total
September 30, 2017

Individually evaluated for impairment	$	1,337	$	34	$	0	$	74	$	0	$	0	$	1,445
Collectively evaluated for impairment	$	3,200	$	1,150	$	804	$	3,460	$	196	$	500	$	9,310
Total ALL	$	4,537	$	1,184	$	804	$	3,534	$	196	$	500	$	10,755

December 31, 2016

Individually evaluated for impairment	$	177	$	40	$	0	$	43	$	0	$	0	$	260
Collectively evaluated for impairment	$	3,736	$	831	$	858	$	3,545	$	188	$	500	$	9,658
Total ALL	$	3,913	$	871	$	858	$	3,588	$	188	$	500	$	9,918

Impaired Loans and Related Interest Income by Loan Portfolio Class

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary at September 30, 2017 and December 31, 2016:


		Impaired Loans with Specific Allowance				Impaired Loans with No Specific Allowance		Total Impaired Loans
(in thousands)		Recorded Investment		Related Allowances		Recorded Investment		Recorded Investment		Unpaid Principal Balance
September 30, 2017
Commercial real estate
Non owner-occupied	$	3,262	$	1,337	$	3,648	$	6,910	$	12,063
All other CRE		0		0		7,280		7,280		7,893
Acquisition and development
1-4 family residential construction		0		0		582		582		582
All other A&D		297		42		1,528		1,825		2,105
Commercial and industrial		0		0		702		702		2,916
Residential mortgage
Residential mortgage - term		532		64		3,057		3,589		3,902
Residential mortgage – home equity		65		2		190		255		256
Consumer		0		0		0		0		0
Total impaired loans	$	4,156	$	1,445	$	16,987	$	21,143	$	29,717

December 31, 2016
Commercial real estate
Non owner-occupied	$	131	$	23	$	6,635	$	6,766	$	9,372
All other CRE		432		154		10,012		10,444		11,057
Acquisition and development
1-4 family residential construction		0		0		582		582		628
All other A&D		245		40		1,698		1,943		2,213
Commercial and industrial		0		0		290		290		2,504
Residential mortgage
Residential mortgage - term		61		43		3,763		3,824		4,249
Residential mortgage – home equity		0		0		151		151		168
Consumer		0		0		0		0		0
Total impaired loans	$	869	$	260	$	23,131	$	24,000	$	30,191

Allowance for Loan Losses Summarized by Loan Portfolio Segments

The following tables present the activity in the ALL for the nine- and three-month periods ended September 30, 2017 and 2016:


(in thousands)	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Residential Mortgage		Consumer			Unallocated	Total
ALL balance at January 1, 2017	$	3,913	$	871	$	858	$	3,588	$	188	$	500	$	9,918
Charge-offs		(2,798)		(79)		(37)		(252)		(254)		0		(3,420)
Recoveries		68		230		1,666		299		185		0		2,448
Provision		3,354		162		(1,683)		(101)		77		0		1,809
ALL balance at September 30, 2017	$	4,537	$	1,184	$	804	$	3,534	$	196	$	500	$	10,755

ALL balance at January 1, 2016	$	2,580	$	4,129	$	722	$	3,785	$	206	$	500	$	11,922
Charge-offs		(2,632)		(78)		(518)		(516)		(237)		0		(3,981)
Recoveries		85		1,278		45		373		114		0		1,895
Provision		5,491		(4,063)		641		23		116		0		2,208
ALL balance at September 30, 2016	$	5,524	$	1,266	$	890	$	3,665	$	199	$	500	$	12,044


(in thousands)	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Residential Mortgage		Consumer			Unallocated	Total
ALL balance at July 1, 2017	$	3,649	$	1,200	$	836	$	3,545	$	192	$	500	$	9,922
Charge-offs		(53)		(61)		(4)		(16)		(111)		0		(245)
Recoveries		5		42		15		46		69		0		177
Provision		936		3		(43)		(41)		46		0		901
ALL balance at September 30, 2017	$	4,537	$	1,184	$	804	$	3,534	$	196	$	500	$	10,755

ALL balance at July 1, 2016	$	4,405	$	3,118	$	737	$	3,723	$	195	$	500	$	12,678
Charge-offs		(623)		0		(259)		(300)		(97)		0		(1,279)
Recoveries		(8)		(4)		7		319		37		0		351
Provision		1,750		(1,848)		405		(77)		64		0		294
ALL balance at September 30, 2016	$	5,524	$	1,266	$	890	$	3,665	$	199	$	500	$	12,044

Average of Impaired Loans and Related Interest Income by Loan Portfolio Class

The following table presents the average recorded investment in impaired loans by class and related interest income recognized for the periods indicated:


	Nine months ended						Nine months ended
	September 30, 2017						September 30, 2016
(in thousands)	Average investment		Interest income recognized on an accrual basis		Interest income recognized on a cash basis		Average investment		Interest income recognized on an accrual basis		Interest income recognized on a cash basis
Commercial real estate
Non owner-occupied	$	6,255	$	18	$	0	$	5,903	$	125	$	0
All other CRE		8,314		157		0		12,142		135		8
Acquisition and development
1-4 family residential construction		582		18		0		641		21		0
All other A&D		1,851		68		0		2,933		72		0
Commercial and industrial		393		9		0		1,095		32		0
Residential mortgage
Residential mortgage - term		3,836		98		8		4,718		121		4
Residential mortgage – home equity		236		0		0		302		0		0
Consumer		0		0		0		0		0		0
Total	$	21,467	$	368	$	8	$	27,734	$	506	$	12


	Three months ended						Three months ended
	September 30, 2017						September 30, 2016
(in thousands)	Average investment		Interest income recognized on an accrual basis		Interest income recognized on a cash basis		Average investment		Interest income recognized on an accrual basis		Interest income recognized on a cash basis
Commercial real estate
Non owner-occupied	$	6,144	$	6	$	0	$	10,210	$	78	$	0
All other CRE		7,308		52		0		11,191		55		4
Acquisition and development
1-4 family residential construction		582		6		0		582		6		0
All other A&D		1,812		23		0		1,997		24		0
Commercial and industrial		496		3		0		1,119		13		0
Residential mortgage
Residential mortgage - term		3,654		32		1		4,916		43		0
Residential mortgage – home equity		249		0		0		307		0		0
Consumer		0		0		0		0		0		0
Total	$	20,245	$	122	$	1	$	30,322	$	219	$	4

Modification of Troubled Debt Restructuring by Class

The following tables present the volume and recorded investment at the time of modification of TDRs by class and type of modification that occurred during the periods indicated:


	Temporary Rate Modification			Extension of Maturity			Modification of Payment and Other Terms
(in thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Nine months ended September 30, 2017
Commercial real estate
Non owner-occupied	0	$	0	0	$	0	0	$	0
All other CRE	0		0	0		0	0		0
Acquisition and development
1-4 family residential construction	0		0	0		0	0		0
All other A&D	0		0	1		244	0		0
Commercial and industrial	0		0	0		0	0		0
Residential mortgage
Residential mortgage – term	0		0	1		259	1		439
Residential mortgage – home equity	0		0	0		0	0		0
Consumer	0		0	0		0	0		0
Total	0	$	0	2	$	503	1	$	439


	Temporary Rate Modification			Extension of Maturity			Modification of Payment and Other Terms
(in thousands)	Number of Contracts	Recorded Investment		Number of Contracts		Recorded Investment	Number of Contracts	Recorded Investment
Three months ended September 30, 2017
Commercial real estate
Non owner-occupied	0	$	0	0	$	0	0	$	0
All other CRE	0		0	0		0	0		0
Acquisition and development
1-4 family residential construction	0		0	0		0	0		0
All other A&D	0		0	0		0	0		0
Commercial and industrial	0		0	0		0	0		0
Residential mortgage
Residential mortgage – term	0		0	0		0	1		439
Residential mortgage – home equity	0		0	0		0	0		0
Consumer	0		0	0		0	0		0
Total	0	$	0	0	$	0	1	$	439

During the nine months ended September 30, 2017, there were no new TDRs, but three existing TDRs that had reached their original modification maturity dates were re-modified. These re-modifications did not impact the ALL. During the nine months ended September 30, 2017, there were no payment defaults.

During the three months ended September 30, 2017, there were no new TDRs, but one existing TDR that had reached its original modification maturity date was re-modified. During the three months ended September 30, 2017, there were no payment defaults.


	Temporary Rate Modification			Extension of Maturity			Modification of Payment and Other Terms
(in thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Nine months ended September 30, 2016
Commercial real estate
Non owner-occupied	0	$	0	0	$	0	0	$	0
All other CRE	0		0	1		203	0		0
Acquisition and development
1-4 family residential construction	0		0	1		582	0		0
All other A&D	0		0	1		1,664	0		0
Commercial and industrial	0		0	1		482	1		486
Residential mortgage
Residential mortgage – term	1		54	1		61	1		72
Residential mortgage – home equity	0		0	0		0	0		0
Consumer	0		0	0		0	0		0
Total	1	$	54	5	$	2,992	2	$	558


	Temporary Rate						Modification of Payment
	Modification			Extension of Maturity			and Other Terms
	Number of	Recorded		Number of	Recorded		Number of	Recorded
(in thousands)	Contracts	Investment		Contracts	Investment		Contracts	Investment
Three Months Ended September 30, 2016
Commercial real estate
Non owner-occupied	0	$	0	0	$	0	0	$	0
All other CRE	0		0	0		0	0		0
Acquisition and development
1-4 family residential construction	0		0	1		582	0		0
All other A&D	0		0	1		1,664	0		0
Commercial and industrial	0		0	1		482	0		0
Residential mortgage
Residential mortgage – term	0		0	1		61	0		0
Residential mortgage – home equity	0		0	0		0	0		0
Consumer	0		0	0		0	0		0
Total	0	$	0	4	$	2,789	0	$	0