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Allowance for Loan Losses
12 Months Ended
Dec. 31, 2017
Provision for Loan and Lease Losses [Abstract]  
Allowance for Loan Losses
Allowance for Loan Losses
The Company’s ALLL covers estimated credit losses on individually evaluated loans that are determined to be impaired as well as estimated probable incurred losses inherent in the remainder of the loan portfolio. The ALLL is prepared using the information provided by the Company’s credit review process together with data from peer institutions and economic information gathered from published sources.
The loan portfolio is segmented into groups of loans with similar risk characteristics. Each segment possesses varying degrees of risk based on, among other things, the type of loan, the type of collateral, and the sensitivity of the borrower or industry to changes in external factors such as economic conditions. An estimated loss rate calculated using the Company’s actual historical loss rates adjusted for current portfolio trends, economic conditions, and other relevant internal and external factors, is applied to each group’s aggregate loan balances.

The Company's base ALLL factors are determined by management using the Bank's annualized actual trailing charge-off data over a full credit cycle with the loss emergence period extending on average from 1 to 1.4 years. Adjustments to those base factors are made for relevant internal and external factors. Those factors may include:

Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment,
Changes in the nature and volume of the loan portfolio, including new types of lending,
Changes in volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans, and
The existence and effect of concentrations of credit, and changes in the level of such concentrations.

For loans risk graded as watch or worse, progressively higher potential loss factors are applied based on migration analysis of risk grading and net charge-offs.
The following tables summarize the allocation of the allowance as well as the activity in the allowance attributed to various segments in the loan portfolio as of and for the periods indicated:
 
 
Commercial
 and Industrial
 
Franchise
 
Commercial
 Owner Occupied
 
SBA
 
Agribusiness
 
Warehouse Facilities
 
Commercial
 Non-owner Occupied
 
Multi-family
 
One-to-four
Family
 
Construction
 
Farmland
 
Land
 
Consumer Loans
 
Total
 
(dollars in thousands)
Balance, December 31, 2016
$
6,362

 
$
3,845

 
$
1,193

 
$
1,039

 
$

 
$

 
$
1,715

 
$
2,927

 
$
365

 
$
3,632

 
$

 
$
198

 
$
20

 
$
21,296

Charge-offs
(1,344
)
 

 

 
(8
)
 

 

 

 

 
(10
)
 

 

 

 

 
(1,362
)
Recoveries
94

 

 
105

 
127

 

 

 

 

 
35

 

 

 

 
1

 
362

Provisions for (reduction in) loan losses
4,609

 
1,952

 
(531
)
 
1,732

 
1,291

 

 
(449
)
 
(2,320
)
 
413

 
937

 
137

 
795

 
74

 
8,640

Balance, December 31, 2017
$
9,721

 
$
5,797

 
$
767

 
$
2,890

 
$
1,291

 
$

 
$
1,266

 
$
607

 
$
803

 
$
4,569

 
$
137

 
$
993

 
$
95

 
$
28,936

Amount of allowance attributed to:
 

 
 
 
 

 
 

 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 

 
 

 
 

Specifically evaluated impaired loans
$

 
$

 
$
55

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$
55

General portfolio allocation
9,721

 
5,797

 
712

 
2,890

 
1,291

 

 
1,266

 
607

 
803

 
4,569

 
137

 
993

 
95

 
28,881

Loans individually evaluated for impairment
1,160

 

 
97

 
1,201

 

 

 

 

 
817

 

 

 
9

 

 
3,284

Specific reserves to total loans individually evaluated for impairment
%
 
%
 
56.70
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
1.67
%
Loans collectively evaluated for impairment
$
1,085,499

 
$
660,414

 
$
1,289,116

 
$
184,313

 
$
116,066

 
$

 
$
1,243,115

 
$
794,384

 
$
270,077

 
$
282,811

 
$
145,393

 
$
31,224

 
$
92,931

 
$
6,195,343

General reserves to total loans collectively evaluated for impairment
0.90
%
 
0.88
%
 
0.06
%
 
1.57
%
 
1.11
%
 
%
 
0.10
%
 
0.08
%
 
0.30
%
 
1.62
%
 
0.09
%
 
3.18
%
 
0.10
%
 
0.47
%
Total gross loans
$
1,086,659

 
$
660,414

 
$
1,289,213

 
$
185,514

 
$
116,066

 
$

 
$
1,243,115

 
$
794,384

 
$
270,894

 
$
282,811

 
$
145,393

 
$
31,233

 
$
92,931

 
$
6,198,627

Total allowance to gross loans
0.89
%
 
0.88
%
 
0.06
%
 
1.56
%
 
1.11
%
 
%
 
0.10
%
 
0.08
%
 
0.30
%
 
1.62
%
 
0.09
%
 
3.18
%
 
0.10
%
 
0.47
%
 
Commercial
 and Industrial
 
Franchise
 
Commercial
 Owner Occupied
 
SBA
 
Agribusiness
 
Warehouse Facilities
 
Commercial
 Non-owner Occupied
 
Multi-family
 
One-to-four
Family
 
Construction
 
Farmland
 
Land
 
Consumer Loans
 
Total
 
(dollars in thousands)
Balance, December 31, 2015
$
3,449

 
$
3,124

 
$
1,870

 
$
1,500

 
$

 
$
759

 
$
2,048

 
$
1,583

 
$
698

 
$
2,030

 
$

 
$
233

 
$
23

 
$
17,317

Charge-offs
(2,802
)
 
(980
)
 
(329
)
 
(980
)
 

 

 

 

 
(151
)
 

 

 

 

 
(5,242
)
Recoveries
177

 

 
25

 
193

 

 

 
21

 

 
25

 

 

 

 
4

 
445

Provisions for (reduction in) loan losses
5,538

 
1,701

 
(373
)
 
326

 

 
(759
)
 
(354
)
 
1,344

 
(207
)
 
1,602

 

 
(35
)
 
(7
)
 
8,776

Balance, December 31, 2016
$
6,362

 
$
3,845

 
$
1,193

 
$
1,039

 
$

 
$

 
$
1,715

 
$
2,927

 
$
365

 
$
3,632

 
$

 
$
198

 
$
20

 
$
21,296

Amount of allowance attributed to:
 

 
 
 
 

 
 

 
 
 
 

 
 

 
 

 
 

 
 

 
 
 
 

 
 

 
 

Specifically evaluated impaired loans
$
250

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$
250

General portfolio allocation
6,112

 
3,845

 
1,193

 
1,039

 

 

 
1,715

 
2,927

 
365

 
3,632

 

 
198

 
20

 
21,046

Loans individually evaluated for impairment
250

 

 
436

 
316

 

 

 

 

 
124

 

 

 
15

 

 
1,141

Specific reserves to total loans individually evaluated for impairment
100.00
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
21.91
%
Loans collectively evaluated for impairment
$
562,919

 
$
459,421

 
$
454,482

 
$
88,678

 
$

 
$

 
$
586,975

 
$
690,955

 
$
100,327

 
$
269,159

 
$

 
$
19,814

 
$
4,112

 
$
3,236,842

General reserves to total loans collectively evaluated for impairment
1.09
%
 
0.84
%
 
0.26
%
 
1.17
%
 
%
 
%
 
0.29
%
 
0.42
%
 
0.36
%
 
1.35
%
 
%
 
1.00
%
 
0.49
%
 
0.65
%
Total gross loans
$
563,169

 
$
459,421

 
$
454,918

 
$
88,994

 
$

 
$

 
$
586,975

 
$
690,955

 
$
100,451

 
$
269,159

 
$

 
$
19,829

 
$
4,112

 
$
3,237,983

Total allowance to gross loans
1.13
%
 
0.84
%
 
0.26
%
 
1.17
%
 
%
 
%
 
0.29
%
 
0.42
%
 
0.36
%
 
1.35
%
 
%
 
1.00
%
 
0.49
%
 
0.66
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 and Industrial
 
Franchise
 
Commercial
 Owner Occupied
 
SBA
 
Agribusiness
 
Warehouse Facilities
 
Commercial
 Non-owner Occupied
 
Multi-family
 
One-to-four
Family
 
Construction
 
Farmland
 
Land
 
Consumer Loans
 
Total
 
(dollars in thousands)
Balance, December 31, 2014
$
2,646

 
$
1,554

 
$
1,757

 
$
568

 
$

 
$
546

 
$
2,007

 
$
1,060

 
$
842

 
$
1,088

 
$

 
$
108

 
$
24

 
$
12,200

Charge-offs
(484
)
 
(764
)
 

 

 

 

 
(116
)
 

 
(16
)
 

 

 

 

 
(1,380
)
Recoveries
47

 

 

 
8

 

 

 
3

 

 
13

 

 

 

 
1

 
72

Provisions for (reduction in) loan losses
1,240

 
2,334

 
113

 
924

 

 
213

 
154

 
523

 
(141
)
 
942

 

 
125

 
(2
)
 
6,425

Balance, December 31, 2015
$
3,449

 
$
3,124

 
$
1,870

 
$
1,500

 
$

 
$
759

 
$
2,048

 
$
1,583

 
$
698

 
$
2,030

 
$

 
$
233

 
$
23

 
$
17,317

Amount of allowance attributed to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Specifically evaluated impaired loans
$

 
$
731

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$

 
$
731

General portfolio allocation
3,449

 
2,393

 
1,870

 
1,500

 

 
759

 
2,048

 
1,583

 
698

 
2,030

 

 
233

 
23

 
16,586

Loans individually evaluated for impairment
313

 
1,630

 
536

 

 

 

 
214

 

 
70

 

 

 
21

 

 
2,784

Specific reserves to total loans individually evaluated for impairment
%
 
44.85
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
%
 
26.26
%
Loans collectively evaluated for impairment
$
309,428

 
$
327,295

 
$
294,190

 
$
62,256

 
$

 
$
143,200

 
$
421,369

 
$
429,003

 
$
79,980

 
$
169,748

 
$

 
$
18,319

 
$
5,111

 
$
2,259,899

General reserves to total loans collectively evaluated for impairment
1.11
%
 
0.73
%
 
0.64
%
 
2.41
%
 
%
 
0.53
%
 
0.49
%
 
0.37
%
 
0.87
%
 
1.20
%
 
%
 
1.27
%
 
0.45
%
 
0.73
%
Total gross loans
$
309,741

 
$
328,925

 
$
294,726

 
$
53,691

 
$

 
$
143,200

 
$
421,583

 
$
429,003

 
$
80,050

 
$
169,748

 
$

 
$
18,340

 
$
5,111

 
$
2,254,118

Total allowance to gross loans
1.11
%
 
0.95
%
 
0.63
%
 
2.79
%
 
%
 
0.53
%
 
0.49
%
 
0.37
%
 
0.87
%
 
1.20
%
 
%
 
1.27
%
 
0.45
%
 
0.77
%