Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2017

Summary of Major Loan and Lease Categories



	At March 31, 2017
(Dollars in thousands)	Originated			Acquired		Total
Commercial, financial and agricultural	$	750,342		$	90,629	$	840,971
Real estate-commercial	1,013,978			389,690		1,403,668
Real estate-construction	170,178			11,409		181,587
Real estate-residential secured for business purpose	180,830			111,402		292,232
Real estate-residential secured for personal purpose	220,543			74,889		295,432
Real estate-home equity secured for personal purpose	154,363			12,736		167,099
Loans to individuals	27,915			148		28,063
Lease financings	132,864			—		132,864
Total loans and leases held for investment, net of deferred income	$	2,651,013		$	690,903	$	3,341,916
Unearned lease income, included in the above table	$	(15,524	)	$	—	$	(15,524	)
Net deferred costs, included in the above table	4,418			—		4,418
Overdraft deposits included in the above table	73			—		73



	At December 31, 2016
(Dollars in thousands)	Originated			Acquired		Total
Commercial, financial and agricultural	$	663,221		$	160,045	$	823,266
Real estate-commercial	909,581			465,368		1,374,949
Real estate-construction	142,891			31,953		174,844
Real estate-residential secured for business purpose	151,931			142,137		294,068
Real estate-residential secured for personal purpose	210,377			80,431		290,808
Real estate-home equity secured for personal purpose	147,982			14,857		162,839
Loans to individuals	30,110			263		30,373
Lease financings	134,739			—		134,739
Total loans and leases held for investment, net of deferred income	$	2,390,832		$	895,054	$	3,285,886
Unearned lease income, included in the above table	$	(15,970	)	$	—	$	(15,970	)
Net deferred costs, included in the above table	4,503			—		4,503
Overdraft deposits included in the above table	84			—		84

Schedule of Impaired Loans

The outstanding principal balance and carrying amount for acquired credit impaired loans at March 31, 2017 and December 31, 2016 were as follows:



(Dollars in thousands)	At March 31, 2017		At December 31, 2016
Outstanding principal balance	$	8,007	$	8,993
Carrying amount	6,616		7,352
Allowance for loan losses	—		—

The following table presents the changes in accretable yield on acquired credit impaired loans:



	Three Months Ended March 31,
(Dollars in thousands)	2017			2016
Beginning of period	$	50		$	144
Reclassification from nonaccretable discount	107			46
Accretable discount amortized to interest income	(116		)	(74		)
Disposals	(4		)	—
End of period	$	37		$	116

The following presents, by class of loans, the recorded investment and unpaid principal balance of impaired loans, the amounts of the impaired loans for which there is not a reserve for credit losses and the amounts for which there is a reserve for credit losses at March 31, 2017 and December 31, 2016. The impaired loans exclude acquired credit impaired loans.



	At March 31, 2017						At December 31, 2016
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Reserve		Recorded Investment		Unpaid Principal Balance		Related Reserve
Impaired loans with no related reserve recorded:
Commercial, financial and agricultural	$	9,437	$	10,960			$	10,911	$	12,561
Real estate—commercial real estate	21,062		21,906				24,469		25,342
Real estate—residential secured for business purpose	3,937		4,338				5,704		6,253
Real estate—residential secured for personal purpose	556		596				560		594
Real estate—home equity secured for personal purpose	441		445				525		528
Total impaired loans with no related reserve recorded	$	35,433	$	38,245			$	42,169	$	45,278
Impaired loans with a reserve recorded:
Commercial, financial and agricultural	$	87	$	211	$	8	$	166	$	166	$	19
Real estate—commercial real estate	596		596		26		597		597		25
Real estate—residential secured for business purpose	1,241		1,519		364		983		1,105		191
Real estate—home equity secured for personal purpose	57		57		1		—		—		—
Total impaired loans with a reserve recorded	$	1,981	$	2,383	$	399	$	1,746	$	1,868	$	235



	At March 31, 2017						At December 31, 2016
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Reserve		Recorded Investment		Unpaid Principal Balance		Related Reserve
Total impaired loans:
Commercial, financial and agricultural	$	9,524	$	11,171	$	8	$	11,077	$	12,727	$	19
Real estate—commercial real estate	21,658		22,502		26		25,066		25,939		25
Real estate—residential secured for business purpose	5,178		5,857		364		6,687		7,358		191
Real estate—residential secured for personal purpose	556		596		—		560		594		—
Real estate—home equity secured for personal purpose	498		502		1		525		528		—
Total impaired loans	$	37,414	$	40,628	$	399	$	43,915	$	47,146	$	235

Schedule of Age Analysis of Past Due Loans and Leases

The following presents, by class of loans and leases, an aging of past due loans and leases, loans and leases which are current and the recorded investment in loans and leases 90 days or more past due which are accruing interest at March 31, 2017 and December 31, 2016:



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or more Past Due		Total Past Due		Current		Acquired Credit Impaired		Total Loans and Leases Held for Investment		Recorded Investment 90 Days or more Past Due and Accruing Interest
At March 31, 2017
Commercial, financial and agricultural	$	1,466	$	—	$	1,548	$	3,014	$	837,397	$	560	$	840,971	$	—
Real estate—commercial real estate and construction:
Commercial real estate	4,606		47		1,466		6,119		1,392,288		5,261		1,403,668		—
Construction	—		365		—		365		181,222		—		181,587		—
Real estate—residential and home equity:
Residential secured for business purpose	1,700		1,227		1,328		4,255		287,395		582		292,232		—
Residential secured for personal purpose	2,125		—		767		2,892		292,327		213		295,432		508
Home equity secured for personal purpose	471		343		459		1,273		165,826		—		167,099		109
Loans to individuals	266		38		142		446		27,617		—		28,063		142
Lease financings	5,948		822		5,721		12,491		120,373		—		132,864		160
Total	$	16,582	$	2,842	$	11,431	$	30,855	$	3,304,445	$	6,616	$	3,341,916	$	919
At December 31, 2016
Commercial, financial and agricultural	$	1,536	$	256	$	1,335	$	3,127	$	819,550	$	589	$	823,266	$	—
Real estate—commercial real estate and construction:
Commercial real estate	1,482		1,560		2,591		5,633		1,363,606		5,710		1,374,949		—
Construction	202		—		—		202		174,642		—		174,844		—
Real estate—residential and home equity:
Residential secured for business purpose	1,390		428		1,539		3,357		289,927		784		294,068		—
Residential secured for personal purpose	3,243		905		879		5,027		285,512		269		290,808		481
Home equity secured for personal purpose	717		142		521		1,380		161,459		—		162,839		171
Loans to individuals	324		95		142		561		29,812		—		30,373		142
Lease financings	1,731		1,418		729		3,878		130,861		—		134,739		193
Total	$	10,625	$	4,804	$	7,736	$	23,165	$	3,255,369	$	7,352	$	3,285,886	$	987

Schedule of Nonperforming Loans and Leases

The following presents, by class of loans and leases, non-performing loans and leases at March 31, 2017 and December 31, 2016:



	At March 31, 2017								At December 31, 2016
(Dollars in thousands)	Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Loans and Leases 90 Days or more Past Due and Accruing Interest		Total Non- Performing Loans and Leases		Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Loans and Leases 90 Days or more Past Due and Accruing Interest		Total Non- Performing Loans and Leases
Commercial, financial and agricultural	$	5,305	$	954	$	—	$	6,259	$	5,746	$	967	$	—	$	6,713
Real estate—commercial real estate and construction:
Commercial real estate	4,133		1,506		—		5,639		5,651		1,519		—		7,170
Real estate—residential and home equity:
Residential secured for business purpose	3,845		316		—		4,161		4,898		766		—		5,664
Residential secured for personal purpose	514		42		508		1,064		560		—		481		1,041
Home equity secured for personal purpose	498		—		109		607		525		—		171		696
Loans to individuals	—		—		142		142		—		—		142		142
Lease financings	5,561		—		160		5,721		536		—		193		729
Total	$	19,856	$	2,818	$	919	$	23,593	$	17,916	$	3,252	$	987	$	22,155

* Includes nonaccrual troubled debt restructured loans and lease modifications of $1.7 million and $1.8 million at March 31, 2017 and December 31, 2016, respectively.

Summary of Credit Quality Indicators

The following table presents classifications for originated loans:



(Dollars in thousands)	Real Estate— Residential Secured for Personal Purpose		Real Estate— Home Equity Secured for Personal Purpose		Loans to Individuals		Lease Financing		Total
At March 31, 2017
Performing	$	220,036	$	153,756	$	27,773	$	127,143	$	528,708
Nonperforming	507		607		142		5,721		6,977
Total	$	220,543	$	154,363	$	27,915	$	132,864	$	535,685
At December 31, 2016
Performing	$	210,208	$	147,286	$	29,968	$	134,010	$	521,472
Nonperforming	169		696		142		729		1,736
Total	$	210,377	$	147,982	$	30,110	$	134,739	$	523,208

The following table presents classifications for acquired loans:



(Dollars in thousands)	Real Estate— Residential Secured for Personal Purpose		Real Estate— Home Equity Secured for Personal Purpose		Loans to Individuals		Lease Financing		Total
At March 31, 2017
Performing	$	74,332	$	12,736	$	148	$	—	$	87,216
Nonperforming	557		—		—		—		557
Total	$	74,889	$	12,736	$	148	$	—	$	87,773
At December 31, 2016
Performing	$	79,559	$	14,857	$	263	$	—	$	94,679
Nonperforming	872		—		—		—		872
Total	$	80,431	$	14,857	$	263	$	—	$	95,551

The following tables present by class, the recorded investment in loans and leases held for investment by credit quality indicator at March 31, 2017 and December 31, 2016.

The Corporation employs a ten (10) grade risk rating system related to the credit quality of commercial loans and residential real estate loans secured for a business purpose of which the first six categories are pass categories (credits not adversely rated). The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating.


1.	Cash Secured—No credit risk


2.	Fully Secured—Negligible credit risk


3.	Strong—Minimal credit risk


4.	Satisfactory—Nominal credit risk


5.	Acceptable—Moderate credit risk


6.	Pre-Watch—Marginal, but stable credit risk


7.	Special Mention—Potential weakness


8.	Substandard—Well-defined weakness


9.	Doubtful—Collection in-full improbable


10.	Loss—Considered uncollectible

Commercial Credit Exposure Credit Risk by Internally Assigned Grades

The following table presents classifications for originated loans:



(Dollars in thousands)	Commercial, Financial and Agricultural		Real Estate— Commercial		Real Estate— Construction		Real Estate— Residential Secured for Business Purpose		Total
At March 31, 2017
Grade:
1. Cash secured/ 2. Fully secured	$	1,579	$	—	$	16,754	$	—	$	18,333
3. Strong	11,641		2,001		—		—		13,642
4. Satisfactory	16,479		39,513		—		361		56,353
5. Acceptable	552,555		767,428		116,973		156,111		1,593,067
6. Pre-watch	135,055		145,103		35,726		15,955		331,839
7. Special Mention	6,454		22,757		360		2,172		31,743
8. Substandard	26,579		37,176		365		6,231		70,351
9. Doubtful	—		—		—		—		—
10.Loss	—		—		—		—		—
Total	$	750,342	$	1,013,978	$	170,178	$	180,830	$	2,115,328
At December 31, 2016
Grade:
1. Cash secured/ 2. Fully secured	$	272	$	—	$	13,714	$	162	$	14,148
3. Strong	14,980		2,045		—		—		17,025
4. Satisfactory	35,529		38,861		—		367		74,757
5. Acceptable	465,675		676,212		110,650		133,716		1,386,253
6. Pre-watch	113,499		128,646		18,213		12,025		272,383
7. Special Mention	8,820		22,439		314		1,199		32,772
8. Substandard	24,446		41,378		—		4,462		70,286
9. Doubtful	—		—		—		—		—
10.Loss	—		—		—		—		—
Total	$	663,221	$	909,581	$	142,891	$	151,931	$	1,867,624

The following table presents classifications for acquired loans:



(Dollars in thousands)	Commercial, Financial and Agricultural		Real Estate— Commercial		Real Estate— Construction		Real Estate— Residential Secured for Business Purpose		Total
At March 31, 2017
Grade:
1. Cash secured/ 2. Fully secured	$	—	$	—	$	—	$	—	$	—
3. Strong	—		—		—		—		—
4. Satisfactory	4,385		825		—		—		5,210
5. Acceptable	66,009		242,512		3,616		90,179		402,316
6. Pre-watch	13,129		128,832		7,793		15,701		165,455
7. Special Mention	1,774		6,715		—		2,229		10,718
8. Substandard	5,332		10,806		—		3,293		19,431
9. Doubtful	—		—		—		—		—
10.Loss	—		—		—		—		—
Total	$	90,629	$	389,690	$	11,409	$	111,402	$	603,130
December 31, 2016
Grade:
1. Cash secured/ 2. Fully secured	$	583	$	—	$	—	$	—	$	583
3. Strong	—		—		—		—		—
4. Satisfactory	4,399		1,018		—		—		5,417
5. Acceptable	113,512		282,199		20,565		117,322		533,598
6. Pre-watch	31,697		163,623		11,388		14,405		221,113
7. Special Mention	73		7,705		—		6,245		14,023
8. Substandard	9,781		10,823		—		4,165		24,769
9. Doubtful	—		—		—		—		—
10.Loss	—		—		—		—		—
Total	$	160,045	$	465,368	$	31,953	$	142,137	$	799,503

Summary of Activity in the Reserve for Loan and Lease Losses

eserve for Loan and Lease Losses and Recorded Investment in Loans and Leases

The following presents, by portfolio segment, a summary of the activity in the reserve for loan and lease losses, the balance in the reserve for loan and lease losses disaggregated on the basis of impairment method and the recorded investment in loans and leases disaggregated on the basis of impairment method for the three months ended March 31, 2017 and 2016:



(Dollars in thousands)	Commercial, Financial and Agricultural			Real Estate— Commercial and Construction			Real Estate— Residential Secured for Business Purpose			Real Estate— Residential and Home Equity Secured for Personal Purpose			Loans to Individuals			Lease Financings			Unallocated			Total
Three Months Ended March 31, 2017
Reserve for loan and lease losses:
Beginning balance	$	7,037		$	7,505		$	774		$	993		$	364		$	788		$	38		$	17,499
Charge-offs	(178		)	—			(42		)	(94		)	(126		)	(257		)	N/A			(697		)
Recoveries	187			3			10			17			35			29			N/A			281
Provision (recovery of provision)	844			116			603			82			62			769			(34		)	2,442
Provision for acquired credit impaired loans	—			—			—			3			—			—			—			3
Ending balance	$	7,890		$	7,624		$	1,345		$	1,001		$	335		$	1,329		$	4		$	19,528
Three Months Ended March 31, 2016
Reserve for loan and lease losses:
Beginning balance	$	6,418		$	6,572		$	763		$	1,575		$	346		$	1,042		$	912		$	17,628
Charge-offs	(1,481		)	(26		)	(238		)	(46		)	(76		)	(205		)	N/A			(2,072		)
Recoveries	450			7			19			17			33			44			N/A			570
Provision (recovery of provision)	243			(82		)	203			(233		)	53			41			102			327
Recovery of provision for acquired credit impaired loans	—			—			—			(1		)	—			—			—			(1		)
Ending balance	$	5,630		$	6,471		$	747		$	1,312		$	356		$	922		$	1,014		$	16,452

N/A – Not applicable

Summary of Average Recorded Investment in Impaired Loans and Leases and Analysis of Interest on Impaired Loans

The following presents by class of loans, the average recorded investment in impaired loans and an analysis of interest on impaired loans. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Therefore, interest income on accruing impaired loans is recognized using the accrual method.



	Three Months Ended March 31, 2017						Three Months Ended March 31, 2016
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms		Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms
Commercial, financial and agricultural	$	11,418	$	43	$	85	$	13,569	$	68	$	95
Real estate—commercial real estate	23,949		233		73		29,212		305		70
Real estate—residential secured for business purpose	4,268		16		44		4,273		27		47
Real estate—residential secured for personal purpose	552		—		8		568		2		4
Real estate—home equity secured for personal purpose	525		—		5		177		—		2
Total	$	40,712	$	292	$	215	$	47,799	$	402	$	218


*	Includes interest income recognized on a cash basis for nonaccrual loans of $1 thousand and $7 thousand for the three months ended March 31, 2017 and 2016, respectively and interest income recognized on the accrual method for accruing impaired loans of $291 thousand and $395 thousand for the three months ended March 31, 2017 and 2016, respectively.

Schedule of Troubled Debt Restructured Loans

The Corporation held no foreclosed consumer residential real estate property at March 31, 2017 and December 31, 2016.

The following presents, by class of loans, information regarding consumer mortgages collateralized by residential real estate property that are in the process of foreclosure at March 31, 2017 and December 31, 2016:



(Dollars in thousands)	At March 31, 2017		At December 31, 2016
Real estate-home equity secured for personal purpose	$	180	$	180
Total	$	180	$	180

The following presents, by class of loans, information regarding accruing and nonaccrual loans that were restructured:



	Three Months Ended March 31, 2017							Three Months Ended March 31, 2016
(Dollars in thousands)	Number of Loans	Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Reserve		Number of Loans	Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Reserve
Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural	—	$	—	$	—	$	—	1	$	1,545	$	1,545	$	—
Total	—	$	—	$	—	$	—	1	$	1,545	$	1,545	$	—
Nonaccrual Troubled Debt Restructured Loans:
Total	—	$	—	$	—	$	—	—	$	—	$	—	$	—

Summary of Concessions Granted on Restructured Loans

The following presents, by class of loans, information regarding the types of concessions granted on accruing and nonaccrual loans that were restructured during the three months ended March 31, 2017 and 2016.



	Amortization Period Extension			Total Concessions Granted
(Dollars in thousands)	No. of Loans	Amount		No. of Loans	Amount
Three Months Ended March 31, 2017
Accruing Troubled Debt Restructured Loans:
Total	—	$	—	—	$	—
Nonaccrual Troubled Debt Restructured Loans:
Total	—	$	—	—	$	—
Three Months Ended March 31, 2016
Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural	1	$	1,545	1	$	1,545
Total	1	$	1,545	1	$	1,545
Nonaccrual Troubled Debt Restructured Loans:
Total	—	$	—	—	$	—

Schedule of Accruing and Nonaccruing Troubled Debt Restructured Loans

The following presents, by class of loans, information regarding accruing and nonaccrual troubled debt restructured loans, for which there were payment defaults within twelve months of the restructuring date:



	Three Months Ended March 31,
	2017			2016
(Dollars in thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural	—	$	—	1	$	50
Total	—	$	—	1	$	50
Nonaccrual Troubled Debt Restructured Loans:
Total	—	$	—	—	$	—