Client can't login for Time Machine backup

I'm running Mac OS Server on my iMac with the Time Machine service configured. It was working just fine as a backup destination for my laptop for over a year. A few days ago the disk hosting the backups failed and I had to replace it and add replace the old entry in the Time Machine service in Mac OS X Server with the new disk.

Backing up to that disk from the iMac works fine. However I cannot add this remote disk as a backup location in Time Machine prefs on the MacBook Pro. When I try to add this as a backup location I am presented with the below dialog. If I enter my user ID and password it just silently closes and returns me back to the "Add backup disk" dialog. My user ID is an admin on both the iMac and MBP. I am able to log in to Mac OS X Server to access shared files using the ID and password. The error seems to be specific to Time Machine.

I also have an Airport Extreme with a disk attached. The laptop is still able to backup to that disk.

I've rebooted all machines. I also turned off the Time Machine service, removed the destination, then re-added it and re-enabled the service and it made no difference. Not sure how to track this down and haven't yet found a Google search to point me in the right direction. Any help appreciated!

Both machines are running 10.12.1 and are on the same network connected via Ethernet.