Allowance for Loan Losses

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Allowance for Loan Losses

Note 6 – Allowance for Loan Losses

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the prior one to five years. Management believes using the highest of the one, two or five-year historical loss experience is an appropriate methodology in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed. The actual allowance for loan loss activity is provided below.

	Three Months Ended
	March 31
	2019			2018
	(Unaudited)			(Unaudited)
Balance at beginning of the period	$	17,820		$	16,394
Loans charged-off:
Commercial
Owner occupied real estate		1			13
Non-owner occupied real estate		64			—
Residential spec homes		—			—
Development & spec land		—			—
Commercial and industrial		12			—
Total commercial		77			13
Real estate
Residential mortgage		—			12
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		—			12
Consumer
Direct installment		28			55
Indirect installment		540			505
Home equity		16			131
Total consumer		584			691
Total loans charged-off		661			716
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		—			12
Non-owner occupied real estate		6			5
Residential spec homes		2			2
Development & spec land		—			—
Commercial and industrial		8			32
Total commercial		16			51
Real estate
Residential mortgage		27			6
Residential construction		—			—
Mortgage warehouse		—			—
Total real estate		27			6
Consumer
Direct installment		11			11
Indirect installment		201			139
Home equity		43			22
Total consumer		255			172
Total loan recoveries		298			229
Net loans charged-off		363			487
Provision charged to operating expense
Commercial		1,122			(1,291	)
Real estate		(107	)		(252	)
Consumer		(651	)		2,110
Total provision charged to operating expense		364			567
Balance at the end of the period	$	17,821		$	16,474

Certain loans are individually evaluated for impairment, and the Company’s general practice is to proactively charge down impaired loans to the fair value of the underlying collateral, which is the appraised value less estimated selling costs.

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down or specific allocation of 1- 4 family first and junior lien mortgages to the net realizable value less costs to sell when the value is known but no later than when a loan is 180 days past due. Pursuant to such guidelines, the Company also charges-off unsecured open-end loans when the loan is contractually 90 days past due, and charges down to the net realizable value other secured loans when they are contractually 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection in full will occur regardless of delinquency status, are not charged off.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment analysis:

	March 31, 2019
	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	915	$	—	$	—	$	—	$	915
Collectively evaluated for impairment		10,641		1,588		1,014		3,663		16,906
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	11,556	$	1,588	$	1,014	$	3,663	$	17,821
Loans:
Individually evaluated for impairment	$	6,233	$	—	$	—	$	—	$	6,233
Collectively evaluated for impairment		2,087,011		821,767		71,944		637,206		3,617,928
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	2,093,244	$	821,767	$	71,944	$	637,206	$	3,624,161

	December 31, 2018
	Commercial		Real Estate		Mortgage Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,035	$	—	$	—	$	—	$	1,035
Collectively evaluated for impairment		9,460		1,676		1,006		4,643		16,785
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending allowance balance	$	10,495	$	1,676	$	1,006	$	4,643	$	17,820
Loans:
Individually evaluated for impairment	$	6,708	$	—	$	—	$	—	$	6,708
Collectively evaluated for impairment		1,718,661		670,166		74,120		547,116		3,010,063
Loans acquired with deteriorated credit quality		—		—		—		—		—
Total ending loans balance	$	1,725,369	$	670,166	$	74,120	$	547,116	$	3,016,771