Loans And Leases | 5. Loans and leases The classifications of loans and leases at June 30, 2017 and December 31, 201 6 are summarized as follows: (dollars in thousands) June 30, 2017 December 31, 2016 Commercial and industrial $ 120,693 $ 98,477 Commercial real estate: Non-owner occupied 108,147 93,364 Owner occupied 97,458 106,960 Construction 4,162 3,987 Consumer: Home equity installment 28,763 28,466 Home equity line of credit 54,257 51,609 Auto loans and leases 70,574 56,841 Other 6,208 13,301 Residential: Real estate 136,550 134,475 Construction 9,606 10,496 Total 636,418 597,976 Less: Allowance for loan losses (9,406) (9,364) Unearned lease revenue (574) (482) Loans and leases, net $ 626,438 $ 588,130 Net deferred loan costs of $1.9 million and $1.8 million have been included in the carrying values of loans at June 30, 2017 and December 31, 201 6 , respectively. Unearned lease revenue represents the difference between the lessor’s investment in the property and the gross investment in the lease. Unearned revenue is accrued over the life of the lease using the effective interest method. The Company services real estate loans for investors in the secondary mortgage market which are not included in the accompanying consolidated balance sheets. The approximate unpaid principal balance of mortgages serviced amounted to $291.0 million as of June 30, 2017 and $285.2 million as of December 31, 201 6 . Mortgage servicing rights amounted to $1.3 million both as of June 30, 2017 and December 31, 2016 , respectively. Management is responsible for conducting the Company’s credit risk evaluation process, which includes credit risk grading of individual commercial and industrial and commercial real estate loans. Commercial and industrial and commercial real estate loans are assigned credit risk grades based on the Company’s assessment of conditions that affect the borrower’s ability to meet its contractual obligations under the loan agreement. That process includes reviewing borrowers’ current financial information, historical payment experience, credit documentation, public information and other information specific to each individual borrower. Upon review, the commercial loan credit risk grade is revised or reaffirmed as the case may be. The credit risk grades may be changed at any time management feels an upgrade or downgrade may be warranted. The Company utilizes an external independent loan review firm that reviews and validates the credit risk program on at least an annual basis. Results of these reviews are presented to management and the board of directors. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures. Non-accrual loans The decision to place loans on non-accrual status is made on an individual basis after considering factors pertaining to each specific loan. Commercial and industrial (C&I) and commercial real estate (CRE) loans are placed on non-accrual status when management has determined that payment of all contractual principal and interest is in doubt or the loan is past due 90 days or more as to principal and interest, unless well-secured and in the process of collection. Consumer loans secured by real estate and residential mortgage loans are placed on non-accrual status at 120 days past due as to principal and interest and unsecured consumer loans are charged-off when the loan is 90 days or more past due as to principal and interest. The Company considers all non-accrual loans to be impaired loans. Non-accrual loans, segregated by class, at June 30, 2017 and December 31, 201 6, were as follows: (dollars in thousands) June 30, 2017 December 31, 2016 Commercial and industrial $ - $ 11 Commercial real estate: Non-owner occupied 1,182 1,407 Owner occupied 2,922 3,078 Construction 177 193 Consumer: Home equity installment 16 31 Home equity line of credit 805 737 Auto loans and leases - 25 Other 6 6 Residential: Real estate 1,421 1,882 Total $ 6,529 $ 7,370 Troubled Debt Restructuring A modification of a loan constitutes a troubled debt restructuring (TDR) when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company considers all TDRs to be impaired loans. The Company offers various types of concessions when modifying a loan, however, forgiveness of principal is rarely granted. C&I loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. CRE loans modified in a TDR can involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Commercial real estate construction loans modified in a TDR may also involve extending the interest-only payment period. Residential mortgage loans modified in a TDR are primarily comprised of loans where monthly payments are lowered to accommodate the borrowers’ financial needs for an extended period of time. After the lowered monthly payment period ends, the borrower would revert back to paying principal and interest pursuant to the original terms with the maturity date adjusted accordingly. Consumer loan modifications are typically not granted and therefore standard modification terms do not exist for loans of this type. Loans modified in a TDR may or may not be placed on non-accrual status. As of June 30, 2017, total TDRs amounted to $4.1 million, consisting of 15 loans ( 12 CRE loans, 1 C&I loan, 1 HELOC and 1 residential mortgage to 10 unrelated borrowers), of which three CRE loans, totaling $0.9 million, one HELOC, totaling $0.6 million, and one residential mortgage, totaling $0.9 million, were on non-accrual status. The June 30, 2 017 balance represented a $0.8 million increase over the December 31, 2016 balance, which amounted to $3.3 million consisting of 9 loans ( 6 CRE loans, 1 C&I loan, 1 HELOC and 1 residential mortgage to 6 unrelated borrowers), of which the HELOC, totaling $0.6 million, and the residential mortgage, totaling $0.9 million, were on non-accrual status. This increase in TDRs was attributed to the addition of the five accruing TDRs in the ca tegory of CRE , totaling $0.9 million in the first quarter of 2017 and the addition of one non-accrual TDR of $0.1 million in the second quarter of 2017 . Of the TDRs outstanding as of June 30, 2017 and December 31, 2016, when modified, the concessions granted consisted of temporary interest-only payments, extensions of maturity date, or a reduction in the rate of interest to a below-market rate for a contractual period of time. Other than the TDRs that were placed on non-accrual status, the TDRs were performing in accordance with their modified terms. The following presents by class, information related to loans modified in a TDR: Loans modified as TDRs for the six months ended: (dollars in thousands) June 30, 2017 June 30, 2016 Recorded Increase in Recorded Increase in Number investment allowance Number investment allowance of (as of (as of of (as of (as of contracts period end) period end) contracts period end) period end) Commercial real estate - non-owner occupied 1 $ 119 $ 3 - $ - $ - Commercial real estate - owner occupied 5 918 163 - - - Consumer home equity line of credit - - - 1 650 115 Total 6 $ 1,037 $ 166 1 $ 650 $ 115 Loans modified as TDRs for the three months ended: (dollars in thousands) June 30, 2017 June 30, 2016 Recorded Increase in Recorded Increase in Number investment allowance Number investment allowance of (as of (as of of (as of (as of contracts period end) period end) contracts period end) period end) Commercial real estate - owner occupied 1 $ 142 $ 7 - $ - $ - In the above tables , the period end balances are inclusive of all partial pay downs and charge-offs since the modification date . For all loans modified in a TDR, the pre-modification recorded investment was the same as the post-modification recorded investment. The following presents by class, loans modified as a TDR that subsequently defaulted (i.e. 90 days or more past due following a modification) during the periods indicated: Loans modified as a TDR within the previous twelve months that subsequently defaulted during the: (dollars in thousands) Six months ended June 30, 2017 Six months ended June 30, 2016 Number of Recorded Number of Recorded contracts investment contracts investment Commercial real estate - owner occupied 1 $ 142 2 $ 151 In the above table, the period end balances are inclusive of all partial pay downs and charge-offs since the modification date. Loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The allowance for loan losses (allowance) may be increased, adjustments may be made in the allocation of the allowance or partial charge-offs may be taken to further write-down the carrying value of the loan. An allowance for impaired loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the loan’s observable market price. If the loan is collateral dependent, the estimated fair value of the collateral is used to establish the allowance. As of June 30, 2017 and 2016, respectively, the allowance for impaired loans that have been modified in a TDR was $0.9 million and $0.4 million, respectively. Past due loans Loans are considered past due when the contractual principal and/or interest is not received by the due date. An aging analysis of past due loans, segregated by class of loans, as of the period indicated is as follows (dollars in thousands): Recorded Past due investment past 30 - 59 Days 60 - 89 Days 90 days Total Total due ≥ 90 days June 30, 2017 past due past due or more (1) past due Current loans (3) and accruing Commercial and industrial $ 155 $ - $ - $ 155 $ 120,538 $ 120,693 $ - Commercial real estate: Non-owner occupied 52 - 1,182 1,234 106,913 108,147 - Owner occupied 175 95 2,922 3,192 94,266 97,458 - Construction - - 177 177 3,985 4,162 - Consumer: Home equity installment 36 72 16 124 28,639 28,763 - Home equity line of credit 109 - 805 914 53,343 54,257 - Auto loans and leases 225 56 25 306 69,694 70,000 (2) 25 Other 111 27 8 146 6,062 6,208 2 Residential: Real estate - 75 1,639 1,714 134,836 136,550 218 Construction - - - - 9,606 9,606 - Total $ 863 $ 325 $ 6,774 $ 7,962 $ 627,882 $ 635,844 $ 245 (1) Includes $ 6.5 million of non -accrual loans. (2) Net of unearned lease revenue of $0. 6 million. (3 ) Includes net deferred loan costs of $1.9 million. Recorded Past due investment past 30 - 59 Days 60 - 89 Days 90 days Total Total due ≥ 90 days December 31, 2016 past due past due or more (1) past due Current loans (3) and accruing Commercial and industrial $ 208 $ - $ 11 $ 219 $ 98,258 $ 98,477 $ - Commercial real estate: Non-owner occupied 180 - 1,407 1,587 91,777 93,364 - Owner occupied 13 776 3,078 3,867 103,093 106,960 - Construction - - 193 193 3,794 3,987 - Consumer: Home equity installment 213 25 31 269 28,197 28,466 - Home equity line of credit - - 737 737 50,872 51,609 - Auto loans and leases 293 59 44 396 55,963 56,359 (2) 19 Other 37 2 6 45 13,256 13,301 - Residential: Real estate 14 421 1,882 2,317 132,158 134,475 - Construction - - - - 10,496 10,496 - Total $ 958 $ 1,283 $ 7,389 $ 9,630 $ 587,864 $ 597,494 $ 19 (1) Includes $7.4 million of non-accrual loans. (2) Net of unearned lease revenue of $0.5 million . (3) Includes net deferred loan costs of $1.8 million . Impaired loans A loan is considered impaired when, based on current information and events; it is probable that the Company will be unable to collect the scheduled payments in accordance with the contractual terms of the loan. Factors considered in determining impairment include payment status, collateral value and the probability of collecting payments when due. The significance of payment delays and/or shortfalls is determined on a case-by-case basis. All circumstances surrounding the loan are taken into account. Such factors include the length of the delinquency, the underlying reasons and the borrower’s prior payment record. Impairment is measured on these loans on a loan-by-loan basis. Impaired loans include non-accrual loans, TDRs and other loans deemed to be impaired based on the aforementioned factors. At June 30, 2017, impaired loans consisted of accruing TDRs of $1.7 million, $6.5 million in non-accrual loans and $1.6 million in accruing impaired loans. At December 31, 2016, impaired loans consisted of accruing TDRs of $1.8 million, $7.4 million in non-accrual loans and $2.2 million in accruing loans. As of June 30, 2017, the non-accrual loans included five TDRs to four unrelated borrowers totaling $2.4 million compared with two TDRs totaling $1.5 million as of December 31, 2016. Impaired loans, segregated by class, as of the period indicated are detailed below: Recorded Recorded Unpaid investment investment Total principal with with no recorded Related (dollars in thousands) balance allowance allowance investment allowance June 30, 2017 Commercial and industrial $ 218 $ 193 $ 25 $ 218 $ 182 Commercial real estate: Non-owner occupied 3,090 2,519 373 2,892 985 Owner occupied 4,607 4,176 159 4,335 685 Construction 400 - 177 177 - Consumer: Home equity installment 49 - 16 16 - Home equity line of credit 845 728 77 805 307 Auto loans and leases - - - - - Other 8 - 6 6 - Residential: Real estate 1,439 1,232 189 1,421 214 Construction - - - - - Total $ 10,656 $ 8,848 $ 1,022 $ 9,870 $ 2,373 Recorded Recorded Unpaid investment investment Total principal with with no recorded Related (dollars in thousands) balance allowance allowance investment allowance December 31, 2016 Commercial and industrial $ 235 $ 206 $ 29 $ 235 $ 193 Commercial real estate: Non-owner occupied 3,346 2,611 405 3,016 993 Owner occupied 5,363 4,351 876 5,227 1,389 Construction 416 - 193 193 - Consumer: Home equity installment 64 - 31 31 - Home equity line of credit 778 650 87 737 167 Auto 25 25 - 25 3 Other 6 6 - 6 1 Residential: Real estate 1,949 1,466 416 1,882 315 Construction - - - - - Total $ 12,182 $ 9,315 $ 2,037 $ 11,352 $ 3,061 The following table presents the average recorded investments in impaired loans and related amount of interest income recognized during the periods indicated below. The average balances are calculated based on the quarter-end balances of impaired loans. Payments received from non-accruing impaired loans are first applied against the outstanding principal balance, then to the recovery of any charged-off amounts. Any excess is treated as a recovery of interest income. Payments received from accruing impaired loans are applied to principal and interest, as contractually agreed upon. For the six months ended June 30, 2017 June 30, 2016 Cash basis Cash basis Average Interest interest Average Interest interest recorded income income recorded income income (dollars in thousands) investment recognized recognized investment recognized recognized Commercial and industrial $ 237 $ 4 $ - $ 567 $ 9 $ - Commercial real estate: Non-owner occupied 3,316 63 - 4,901 46 - Owner occupied 4,819 71 - 3,192 78 - Construction 192 - - 225 - - Consumer: Home equity installment 30 - - 163 3 - Home equity line of credit 816 - - 706 17 - Auto 25 4 - 33 - - Other 5 1 - 6 - - Residential: Real estate 1,282 23 - 696 2 - Construction - - - - - - Total $ 10,722 $ 166 $ - $ 10,489 $ 155 $ - For the three months ended June 30, 2017 June 30, 2016 Cash basis Cash basis Average Interest interest Average Interest interest recorded income income recorded income income (dollars in thousands) investment recognized recognized investment recognized recognized Commercial and industrial $ 221 $ 4 $ - $ 562 $ 3 $ - Commercial real estate: Non-owner occupied 2,984 28 - 5,818 22 - Owner occupied 4,829 41 - 3,776 40 - Construction 179 - - 212 - - Consumer: Home equity installment 8 - - 81 1 - Home equity line of credit 801 - - 1,036 6 - Auto 21 4 - 22 - - Other 3 - - 6 - - Residential: Real estate 1,493 15 - 724 - - Construction - - - - - - Total $ 10,539 $ 92 $ - $ 12,237 $ 72 $ - Credit Quality Indicators Commercial and industrial and commercial real estate The Company utilizes a loan grading system and assigns a credit risk grade to its loans in the C&I and CRE portfolios. The grading system provides a means to measure portfolio quality and aids in the monitoring of the credit quality of the overall loan portfolio. The credit risk grades are arrived at using a risk rating matrix to assign a grade to each of the loans in the C&I and CRE portfolios. The following is a description of each risk rating category the Company uses to classify each of its C&I and CRE loans: Pass Loans in this category have an acceptable level of risk and are graded in a range of one to five. Secured loans generally have good collateral coverage. Current financial statements reflect acceptable balance sheet ratios, sales and earnings trends. Management is considered to be competent, and a reasonable succession plan is evident. Payment experience on the loans has been good with minor or no delinquency experience. Loans with a grade of one are of the highest quality in the range. Those graded five are of marginally acceptable quality. Special Mention Loans in this category are graded a six and may be protected but are potentially weak. They constitute a credit risk to the Company, but have not yet reached the point of adverse classification. Some of the following conditions may exist: little or no collateral coverage; lack of current financial information; delinquency problems; highly leveraged; available financial information reflects poor balance sheet ratios and profit and loss statements reflect uncertain trends; and document exceptions. Cash flow may not be sufficient to support total debt service requirements. Substandard Loans in this category are graded a seven and have a well-defined weakness which may jeopardize the ultimate collectability of the debt. The collateral pledged may be lacking in quality or quantity. Financial statements may indicate insufficient cash flow to service the debt; and/or do not reflect a sound net worth. The payment history indicates chronic delinquency problems. Management is considered to be weak. There is a distinct possibility that the Company may sustain a loss. All loans on non-accrual are rated substandard. Other loans that are included in the substandard category can be accruing, as well as loans that are current or past due. Loans 90 days or more past due, unless otherwise fully supported, are classified substandard. Also, borrowers that are bankrupt or have loans categorized as TDRs can be graded substandard. Doubtful Loans in this category are graded an eight and have a better than 50% possibility of the Company sustaining a loss, but the loss cannot be determined because of specific reasonable factors which may strengthen credit in the near-term. Many of the weaknesses present in a substandard loan exist. Liquidation of collateral, if any, is likely. Any loan graded lower than an eight is considered to be uncollectible and charged-off. Consumer and residential The consumer and residential loan segments are regarded as homogeneous loan pools and as such are not risk rated. For these portfolios, the Company utilizes payment activity, history and recency of payment in assessing performance. Non-performing loans are considered to be loans past due 90 days or more and accruing and non-accrual loans. All loans not classified as non-performing are considered performing. The following table presents loans including $1.9 million and $1.8 million of deferred costs, segregated by class, categorized into the appropriate credit quality indicator category as of June 30, 2017 and December 31, 2016 , respectively: Commercial credit exposure Credit risk profile by creditworthiness category June 30, 2017 (dollars in thousands) Pass Special mention Substandard Doubtful Total Commercial and industrial $ 119,403 $ 559 $ 731 $ - $ 120,693 Commercial real estate - non-owner occupied 99,954 818 7,375 - 108,147 Commercial real estate - owner occupied 89,551 2,382 5,525 - 97,458 Commercial real estate - construction 3,985 - 177 - 4,162 Total commercial $ 312,893 $ 3,759 $ 13,808 $ - $ 330,460 Consumer & Mortgage lending credit exposure Credit risk profile based on payment activity June 30, 2017 (dollars in thousands) Performing Non-performing Total Consumer Home equity installment $ 28,747 $ 16 $ 28,763 Home equity line of credit 53,452 805 54,257 Auto loans and leases (1) 69,975 25 70,000 Other 6,200 8 6,208 Total consumer $ 158,374 $ 854 $ 159,228 Residential Real estate $ 134,911 $ 1,639 $ 136,550 Construction 9,606 - 9,606 Total residential $ 144,517 $ 1,639 $ 146,156 Total consumer & residential $ 302,891 $ 2,493 $ 305,384 (1) Net of unearned lease revenue of $0. 6 million. Commercial credit exposure Credit risk profile by creditworthiness category December 31, 2016 (dollars in thousands) Pass Special mention Substandard Doubtful Total Commercial and industrial $ 97,308 $ 479 $ 690 $ - $ 98,477 Commercial real estate - non-owner occupied 83,962 1,811 7,591 - 93,364 Commercial real estate - owner occupied 99,981 1,075 5,904 - 106,960 Commercial real estate - construction 3,794 - 193 - 3,987 Total commercial $ 285,045 $ 3,365 $ 14,378 $ - $ 302,788 Consumer & Mortgage lending credit exposure Credit risk profile based on payment activity December 31, 2016 (dollars in thousands) Performing Non-performing Total Consumer Home equity installment $ 28,435 $ 31 $ 28,466 Home equity line of credit 50,872 737 51,609 Auto loans and leases (2) 56,315 44 56,359 Other 13,295 6 13,301 Total consumer $ 148,917 $ 818 $ 149,735 Residential Real estate $ 132,593 $ 1,882 $ 134,475 Construction 10,496 - 10,496 Total residential $ 143,089 $ 1,882 $ 144,971 Total consumer & residential $ 292,006 $ 2,700 $ 294,706 (2) Net of unearned lease revenue of $0.5 million. Allowance for loan losses Management continually evaluates the credit quality of the Company’s loan portfolio and performs a formal review of the adequacy of the allowance on a quarterly basis. The allowance reflects management’s best estimate of the amount of credit losses in the loan portfolio. Management’s judgment is based on the evaluation of individual loans, past experience, the assessment of current economic conditions and other relevant factors including the amounts and timing of cash flows expected to be received on impaired loans. Those estimates may be susceptible to significant change. Loan losses are charged directly against the allowance when loans are deemed to be uncollectible. Recoveries from previously charged-off loans are added to the allowance when received . Management applies two primary components during the loan review process to determine proper allowance levels. The two components are a specific loan loss allocation for loans that are deemed impaired and a general loan loss allocation for those loans not specifically allocated. The methodology to analyze the adequacy of the allowance for loan losses is as follows: § identification of specific impaired loans by loan category; § identification of specific loans that are not impaired, but have an identified potential for loss; § calculation of specific allowances where required for the impaired loans based on collateral and other objective and quantifiable evidence; § determination of loans with similar credit characteristics within each class of the loan portfolio segment and eliminating the impaired loans; § application of historical loss percentages (t railing twelve-quarter average) to pools to determine the allowance allocation; § application of qualitative factor adjustment percentages to historical losses for trends or changes in the loan portfolio. § Qualitative factor adjustments include: o levels of and trends in delinquencies and non-accrual loans; o levels of and trends in charge-offs and recoveries; o trends in volume and terms of loans; o changes in risk selection and underwriting standards; o changes in lending policies, procedures and practices; o experience, ability and depth of lending management; o national and local economic trends and conditions; and o changes in credit concentrations. Allocation of the allowance for different categories of loans is based on the methodology as explained above. A key element of the methodology to determine the allowance is the Company’s credit risk evaluation process, which includes credit risk grading of individual C&I and CRE loans. C&I and CRE loans are assigned credit risk grades based on the Company’s assessment of conditions that affect the borrower’s ability to meet its contractual obligations under the loan agreement. That process includes reviewing borrowers’ current financial information, historical payment experience, credit documentation, public information and other information specific to each individual borrower. Upon review, the commercial loan credit risk grade is revised or reaffirmed as the case may be. The credit risk grades may be changed at any time management feels an upgrade or downgrade may be warranted. The credit risk grades for the C&I and CRE loan portfolios are taken into account in the reserve methodology and loss factors are applied based upon the credit risk grades. The loss factors applied are based upon the Company’s historical experience as well as what we believe to be best practices and common industry standards. Historical experience reveals there is a direct correlation between the credit risk grades and loan charge-offs. The changes in allocations in the C&I and CRE loan portfolio from period to period are based upon the credit risk grading system and from periodic reviews of the loan portfolio. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies. Each quarter, management performs an assessment of the allowance. The Company’s Special Assets Committee meets monthly and the applicable lenders discuss each relationship under review and reach a consensus on the appropriate estimated loss amount, if applicable, based on current accounting guidance. The Special Assets Committee’s focus is on ensuring the pertinent facts are considered regarding not only loans considered for specific reserves, but also the collectability of loans that may be past due in payment. The assessment process also includes the review of all loans on a non-accruing basis as well as a review of certain loans to which the lenders or the Company’s Credit Administration function have assigned a criticized or classified risk rating. The Company’s policy is to charge-off unsecured consumer loans when they become 90 days or more past due as to principal and interest. In the other portfolio segments, amounts are charged-off at the point in time when the Company deems the balance, or a portion thereof, to be uncollectible. Information related to the change in the allowance and the Company’s recorded investment in loans by portfolio segment as of the period indicated is as follows: As of and for the six months ended June 30, 2017 Commercial & Commercial Residential (dollars in thousands) industrial real estate Consumer real estate Unallocated Total Allowance for Loan Losses: Beginning balance $ 1,075 $ 4,706 $ 1,834 $ 1,622 $ 127 $ 9,364 Charge-offs (30) (368) (160) (38) - (596) Recoveries 3 41 44 - - 88 Provision 335 131 221 (73) (64) 550 Ending balance $ 1,383 $ 4,510 $ 1,939 $ 1,511 $ 63 $ 9,406 Ending balance: individually evaluated for impairment $ 182 $ 1,670 $ 307 $ 214 $ - $ 2,373 Ending balance: collectively evaluated for impairment $ 1,201 $ 2,840 $ 1,632 $ 1,297 $ 63 $ 7,033 Loans Receivables: Ending balance (2) $ 120,693 $ 209,767 $ 159,228 (1) $ 146,156 $ - $ 635,844 Ending balance: individually evaluated for impairment $ 218 $ 7,404 $ 827 $ 1,421 $ - $ 9,870 Ending balance: collectively evaluated for impairment $ 120,475 $ 202,363 $ 158,401 $ 144,735 $ - $ 625,974 ( 1) Net of unearned lease revenue of $0. 6 million. (2) Includes $1.9 million of net deferred loan costs. As of and for the three months ended June 30, 2017 Commercial & Commercial Residential (dollars in thousands) industrial real estate Consumer real estate Unallocated Total Allowance for Loan Losses: Beginning balance $ 1,263 $ 4,922 $ 1,731 $ 1,519 $ 113 $ 9,548 Charge-offs (30) (301) (84) - - (415) Recoveries 1 31 16 - - 48 Provision 149 (142) 276 (8) (50) 225 Ending balance $ 1,383 $ 4,510 $ 1,939 $ 1,511 $ 63 $ 9,406 As of and for the year ended December 31, 2016 Commercial & Commercial Residential (dollars in thousands) industrial real estate Consumer real estate Unallocated Total Allowance for Loan Losses: Beginning balance $ 1,336 $ 5,014 $ 1,533 $ 1,407 $ 237 $ 9,527 Charge-offs (224) (592) (504) (60) - (1,380) Recoveries 55 37 100 - - 192 Provision (92) 247 705 275 (110) 1,025 Ending balance $ 1,075 $ 4,706 $ 1,834 $ 1,622 $ 127 $ 9,364 Ending balance: individually evaluated for impairment $ 193 $ 2,382 $ 171 $ 315 $ - $ 3,061 Ending balance: collectively evaluated for impairment $ 882 $ 2,324 $ 1,663 $ 1,307 $ 127 $ 6,303 Loans Receivables: Ending balance (2) $ 98,477 $ 204,311 $ 149,735 (1) $ 144,971 $ - $ 597,494 Ending balance: individually evaluated for impairment $ 235 $ 8,436 $ 799 $ 1,882 $ - $ 11,352 Ending balance: collectively evaluated for impairment $ 98,242 $ 195,875 $ 148,936 $ 143,089 $ - $ 586,142 (1) Net of unearned lease revenue of $0. 5 million. (2) Includes $1.8 million of net deferred loan costs. As of and for the six months ended June 30, 2016 Commercial & Commercial Residential (dollars in thousands) industrial real estate Consumer real estate Unallocated Total Allowance for Loan Losses: Beginning balance $ 1,336 $ 5,014 $ 1,533 $ 1,407 $ 237 $ 9,527 Charge-offs (169) (343) (265) (60) - (837) Recoveries 21 33 38 - - 92 Provision 43 176 386 18 (198) 425 Ending balance $ 1,231 $ 4,880 $ 1,692 $ 1,365 $ 39 $ 9,207 As of and for the three months ended June 30, 2016 Commercial & Commercial Residential (dollars in thousands) industrial real estate Consumer real estate Unallocated Total Allowance for Loan Losses: Beginning balance $ 1,640 $ 4,583 $ 1,678 $ 1,379 $ 104 $ 9,384 Charge-offs (155) (258) (90) - - (503) Recoveries 12 29 10 - - 51 Provision (266) 526 94 (14) (65) 275 Ending balance $ 1,231 $ 4,880 $ 1,692 $ 1,365 $ 39 $ 9,207 |