Loan Quality | Note 6 . Loan Quality The following table presents, by c l ass , the activity in the Allowance for Loan Losses (ALL) for the periods ended: Residential Real Estate 1-4 Family Junior Liens & Commercial (Dollars in thousands) First Liens Lines of Credit Construction Real Estate Commercial Consumer Unallocated Total ALL at June 30, 2016 $ 1,023 $ 319 $ 205 $ 5,940 $ 1,596 $ 97 $ 1,138 $ 10,318 Charge-offs - - - (776) - (42) - (818) Recoveries 1 - - 5 7 22 - 35 Provision (3) 1 8 876 132 21 115 1,150 ALL at September 30, 2016 $ 1,021 $ 320 $ 213 $ 6,045 $ 1,735 $ 98 $ 1,253 $ 10,685 ALL at December 31, 2015 $ 989 $ 308 $ 194 $ 5,649 $ 1,519 $ 102 $ 1,325 $ 10,086 Charge-offs (49) - - (2,730) (66) (126) - (2,971) Recoveries 34 - - 18 129 64 - 245 Provision 47 12 19 3,108 153 58 (72) 3,325 ALL at September 30, 2016 $ 1,021 $ 320 $ 213 $ 6,045 $ 1,735 $ 98 $ 1,253 $ 10,685 ALL at June 30, 2015 $ 1,014 $ 281 $ 207 $ 5,179 $ 1,442 $ 110 $ 1,217 $ 9,450 Charge-offs - - - - (47) (75) - (122) Recoveries 1 - 18 - 102 24 - 145 Provision (16) 18 (27) 389 32 45 (41) 400 ALL at September 30, 2015 $ 999 $ 299 $ 198 $ 5,568 $ 1,529 $ 104 $ 1,176 $ 9,873 ALL at December 31, 2014 $ 994 $ 271 $ 214 $ 4,978 $ 1,515 $ 127 $ 1,012 $ 9,111 Charge-offs (43) (21) - - (263) (155) - (482) Recoveries 4 - 18 14 116 57 - 209 Provision 44 49 (34) 576 161 75 164 1,035 ALL at September 30, 2015 $ 999 $ 299 $ 198 $ 5,568 $ 1,529 $ 104 $ 1,176 $ 9,873 T he following table presents, by c la ss , loans that were evaluated for the ALL under the specific reserve (individually) and those that were evaluated under the general reserve (collectively) and the amount of the ALL established in each class as of September 30, 2016 and December 31, 201 5 : Residential Real Estate 1-4 Family Junior Liens & Commercial (Dollars in thousands) First Liens Lines of Credit Construction Real Estate Commercial Consumer Unallocated Total September 30, 2016 Loans evaluated for ALL: Individually $ 632 $ 52 $ 545 $ 13,815 $ - $ - $ - $ 15,044 Collectively 162,454 52,473 8,111 361,501 254,274 4,719 - 843,532 Total $ 163,086 $ 52,525 $ 8,656 $ 375,316 $ 254,274 $ 4,719 $ - $ 858,576 ALL established for loans evaluated: Individually $ - $ - $ - $ - $ - $ - $ - $ - Collectively 1,021 320 213 6,045 1,735 98 1,253 10,685 ALL at September 30, 2016 $ 1,021 $ 320 $ 213 $ 6,045 $ 1,735 $ 98 $ 1,253 $ 10,685 December 31, 2015 Loans evaluated for ALL: Individually $ 930 $ 51 $ 502 $ 14,309 $ 230 $ - $ - $ 16,022 Collectively 160,548 50,862 7,386 326,386 215,712 5,100 - 765,994 Total $ 161,478 $ 50,913 $ 7,888 $ 340,695 $ 215,942 $ 5,100 $ - $ 782,016 ALL established for loans evaluated: Individually $ - $ - $ - $ - $ 9 $ - $ - $ 9 Collectively 989 308 194 5,649 1,510 102 1,325 10,077 ALL at December 31, 2015 $ 989 $ 308 $ 194 $ 5,649 $ 1,519 $ 102 $ 1,325 $ 10,086 The following table shows additional information about those loans considered to be impaired at September 30, 2016 and December 31, 201 5 : Impaired Loans With No Allowance With Allowance (Dollars in thousands) Unpaid Unpaid Recorded Principal Recorded Principal Related September 30, 2016 Investment Balance Investment Balance Allowance Residential Real Estate 1-4 Family First liens $ 1,189 $ 1,263 $ - $ - $ - Junior liens and lines of credit 96 107 - - - Total 1,285 1,370 - - - Residential real estate - construction 545 597 - - - Commercial real estate 13,815 14,372 - - - Commercial 24 35 - - - Total $ 15,669 $ 16,374 $ - $ - $ - December 31, 2015 Residential Real Estate 1-4 Family First liens $ 1,523 $ 1,725 $ - $ - $ - Junior liens and lines of credit 105 133 - - - Total 1,628 1,858 - - - Residential real estate - construction 502 546 - - - Commercial real estate 14,431 15,007 - - Commercial 267 330 9 10 9 Total $ 16,828 $ 17,741 $ 9 $ 10 $ 9 The following table shows the average of impaired loans and related interest income for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 Average Interest Average Interest (Dollars in thousands) Recorded Income Recorded Income Investment Recognized Investment Recognized Residential Real Estate 1-4 Family First liens $ 1,196 $ 10 $ 1,262 $ 30 Junior liens and lines of credit 96 - 90 - Total 1,292 10 1,352 30 Residential real estate - construction 548 - 554 - Commercial real estate 13,889 118 17,871 478 Commercial 25 - 34 - Total $ 15,754 $ 128 $ 19,811 $ 508 Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Average Interest Average Interest (Dollars in thousands) Recorded Income Recorded Income Investment Recognized Investment Recognized Residential Real Estate 1-4 Family First liens $ 1,600 $ 9 $ 2,474 $ 26 Junior liens and lines of credit 181 2 157 4 Total 1,781 11 2,631 30 Residential real estate - construction 510 - 651 - Commercial real estate 14,836 126 21,774 452 Commercial 380 - 1,181 - Total $ 17,507 $ 137 $ 26,237 $ 482 The following table presents the aging of payments of the loan portfolio : (Dollars in thousands) Loans Past Due and Still Accruing Total Current 30-59 Days 60-89 Days 90 Days+ Total Non-Accrual Loans September 30, 2016 Residential Real Estate 1-4 Family First liens $ 162,334 $ 239 $ 53 $ 38 $ 330 $ 422 $ 163,086 Junior liens and lines of credit 52,304 62 2 61 125 96 52,525 Total 214,638 301 55 99 455 518 215,611 Residential real estate - construction 8,111 - - - - 545 8,656 Commercial real estate 369,833 200 559 568 1,327 4,156 375,316 Commercial 253,919 300 5 26 331 24 254,274 Consumer 4,699 10 10 - 20 - 4,719 Total $ 851,200 $ 811 $ 629 $ 693 $ 2,133 $ 5,243 $ 858,576 December 31, 2015 Residential Real Estate 1-4 Family First liens $ 159,998 $ 44 $ 416 $ 214 $ 674 $ 806 $ 161,478 Junior liens and lines of credit 50,541 217 50 - 267 105 50,913 Total 210,539 261 466 214 941 911 212,391 Residential real estate - construction 7,209 177 - - 177 502 7,888 Commercial real estate 330,953 5,713 196 152 6,061 3,681 340,695 Commercial 215,449 210 5 2 217 276 215,942 Consumer 5,041 55 4 - 59 - 5,100 Total $ 769,191 $ 6,416 $ 671 $ 368 $ 7,455 $ 5,370 $ 782,016 The following table reports the internal credit rating for the loan portfolio. Consumer purpose loans (mortgage, home equity and installment) are assigned a rating of either pass or substandard. Substandard consumer loans are comprised of loans 90 days or more past due and still accruing , and nonaccrual loans. Commercial purpose loans may be assigned any rating in accordance with the Bank’s internal risk rating system. Pass Special Mention Substandard Doubtful (Dollars in thousands) (1-5) (6) (7) (8) Total September 30, 2016 Residential Real Estate 1-4 Family First liens $ 159,758 $ 1,942 $ 1,386 $ - $ 163,086 Junior liens and lines of credit 52,308 28 189 - 52,525 Total 212,066 1,970 1,575 - 215,611 Residential real estate - construction 7,833 - 823 - 8,656 Commercial real estate 360,788 359 14,169 - 375,316 Commercial 250,118 2,058 2,098 - 254,274 Consumer 4,719 - - - 4,719 Total $ 835,524 $ 4,387 $ 18,665 $ - $ 858,576 December 31, 2015 Residential Real Estate 1-4 Family First liens $ 157,514 $ 2,122 $ 1,842 $ - $ 161,478 Junior liens and lines of credit 50,685 28 200 - 50,913 Total 208,199 2,150 2,042 - 212,391 Residential real estate - construction 7,386 - 502 - 7,888 Commercial real estate 319,985 6,175 14,535 - 340,695 Commercial 213,492 1,978 472 - 215,942 Consumer 5,100 - - - 5,100 Total $ 754,162 $ 10,303 $ 17,551 $ - $ 782,016 The following table presents information on the Bank’s Troubled Debt Restructuring (TDR) loans: Troubled Debt Restructurings That Have Defaulted on Modified Terms in the (Dollars in thousands) Troubled Debt Restructurings Last Twelve Months Number of Recorded Number of Recorded Contracts Investment Performing* Nonperforming* Contracts Investment September 30, 2016 Residential real estate - construction 1 $ 486 $ 486 $ - - $ - Residential real estate 5 879 728 151 - - Commercial real estate 11 12,211 10,930 1,281 1 1,281 Total 17 $ 13,576 $ 12,144 $ 1,432 1 $ 1,281 December 31, 2015 Residential real estate - construction 1 $ 502 $ 502 $ - - $ - Residential real estate 4 654 503 151 - - Commercial real estate 10 12,125 12,125 - - - Total 15 $ 13,281 $ 13,130 $ 151 - $ - * The performing status is determined by the loan’s compliance with the modified terms . The following table reports new TDR loans during 2016, concession granted and the recorded investment as of September 3 0 , 2016 : New During Period Number of Pre-TDR After-TDR Recorded Nine Months Ended September 30, 2016 Contracts Modification Modification Investment Concession Commercial real estate 1 $ 525 $ 525 $ 515 multiple Residential real estate 1 238 238 238 maturity Total 2 $ 763 $ 763 $ 753 There were no new TDR loans made in the first nine months of 201 5 . |