Loans (Tables)

12 Months Ended

Dec. 31, 2015

The following is a summary of loans:



(Dollars in thousands)	December 31, 2015				December 31, 2014
	Amount		%		Amount		%
Commercial:
Mortgages (1)		$931,953	31	%		$843,978	30	%
Construction & development (2)	122,297		4		79,592		3
Commercial & industrial (3)	600,297		20		611,918		21
Total commercial	1,654,547		55		1,535,488		54
Residential real estate:
Mortgages	984,437		33		948,731		33
Homeowner construction	29,118		1		36,684		1
Total residential real estate	1,013,555		34		985,415		34
Consumer:
Home equity lines	255,565		8		242,480		8
Home equity loans	46,649		2		46,967		2
Other (4)	42,811		1		48,926		2
Total consumer	345,025		11		338,373		12
Total loans (5)		$3,013,127	100	%		$2,859,276	100	%


(1)	Loans primarily secured by income producing property.


(2)	Loans for construction of commercial properties, loans to developers for construction of residential properties and loans for land development.


(3)	Loans to businesses and individuals, a substantial portion of which are fully or partially collateralized by real estate.


(4)	Loans to individuals secured by general aviation aircraft and other personal installment loans.


(5)	Includes net unamortized loan origination costs of $2.6 million and $2.1 million, respectively, and net unamortized premiums on purchased loans of $84 thousand and $94 thousand, respectively, at December 31, 2015 and 2014.

Nonaccrual Loans

The following is a summary of nonaccrual loans, segregated by class of loans:



(Dollars in thousands)
December 31,	2015		2014
Commercial:
Mortgages		$5,711		$5,315
Construction & development	—		—
Commercial & industrial	3,018		1,969
Residential real estate:
Mortgages	10,666		7,124
Homeowner construction	—		—
Consumer:
Home equity lines	528		1,217
Home equity loans	1,124		317
Other	—		3
Total nonaccrual loans		$21,047		$15,945
Accruing loans 90 days or more past due		$—		$—

Past Due Loans

The following tables present an aging analysis of past due loans, segregated by class of loans:



(Dollars in thousands)	Days Past Due
December 31, 2015	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Mortgages		$51		$—		$4,504		$4,555		$927,398		$931,953
Construction & development	—		—		—		—		122,297		122,297
Commercial & industrial	405		9		48		462		599,835		600,297
Residential real estate:
Mortgages	3,028		2,964		3,294		9,286		975,151		984,437
Homeowner construction	—		—		—		—		29,118		29,118
Consumer:
Home equity lines	883		373		518		1,774		253,791		255,565
Home equity loans	748		490		222		1,460		45,189		46,649
Other	22		—		—		22		42,789		42,811
Total loans		$5,137		$3,836		$8,586		$17,559		$2,995,568		$3,013,127



(Dollars in thousands)	Days Past Due
December 31, 2014	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Mortgages		$—		$—		$5,315		$5,315		$838,663		$843,978
Construction & development	—		—		—		—		79,592		79,592
Commercial & industrial	2,136		1,202		181		3,519		608,399		611,918
Residential real estate:
Mortgages	2,943		821		3,284		7,048		941,683		948,731
Homeowner construction	—		—		—		—		36,684		36,684
Consumer:
Home equity lines	570		100		841		1,511		240,969		242,480
Home equity loans	349		240		56		645		46,322		46,967
Other	35		5		—		40		48,886		48,926
Total loans		$6,033		$2,368		$9,677		$18,078		$2,841,198		$2,859,276

Impaired Loans

The following is a summary of impaired loans:



(Dollars in thousands)
	Recorded Investment (1)				Unpaid Principal				Related Allowance
December 31,	2015		2014		2015		2014		2015		2014
No Related Allowance Recorded:
Commercial:
Mortgages		$4,292		$432		$5,101		$432		$—		$—
Construction & development	—		—		—		—		—		—
Commercial & industrial	1,849		1,047		1,869		1,076		—		—
Residential real estate:
Mortgages	8,441		1,477		8,826		1,768		—		—
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	6		—		64		—		—		—
Home equity loans	530		—		539		—		—		—
Other	—		—		—		—		—		—
Subtotal	15,118		2,956		16,399		3,276		—		—
With Related Allowance Recorded:
Commercial:
Mortgages	10,873		14,585		10,855		14,564		1,633		927
Construction & development	—		—		—		—		—		—
Commercial & industrial	2,024		1,878		2,248		2,437		771		177
Residential real estate:
Mortgages	2,895		2,226		2,941		2,338		156		326
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	522		250		522		250		2		141
Home equity loans	679		45		783		62		21		12
Other	145		112		144		114		—		—
Subtotal	17,138		19,096		17,493		19,765		2,583		1,583
Total impaired loans		$32,256		$22,052		$33,892		$23,041		$2,583		$1,583
Total:
Commercial		$19,038		$17,942		$20,073		$18,509		$2,404		$1,104
Residential real estate	11,336		3,703		11,767		4,106		156		326
Consumer	1,882		407		2,052		426		23		153
Total impaired loans		$32,256		$22,052		$33,892		$23,041		$2,583		$1,583

(1)

The recorded investment in impaired loans consists of unpaid principal balance, net of charge-offs, interest payments received applied to principal and unamortized deferred loan origination fees and costs. For impaired accruing loans (troubled debt restructurings for which management has concluded that the collectability of the loan is not in doubt), the recorded investment also includes accrued interest.

The following table presents the average recorded investment balance of impaired loans and interest income recognized on impaired loans segregated by loan class:



(Dollars in thousands)
	Average Recorded Investment						Interest Income Recognized
Years ended December 31,	2015		2014		2013		2015		2014		2013
Commercial:
Mortgages		$14,847		$22,971		$27,496		$327		$658		$630
Construction & development	—		—		—		—		—		—
Commercial & industrial	3,415		2,499		6,029		130		126		190
Residential real estate:
Mortgages	5,423		4,006		4,024		147		101		125
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	228		97		200		1		2		7
Home equity loans	487		100		72		11		4		6
Other	210		119		146		10		8		9
Totals		$24,610		$29,792		$37,967		$626		$899		$967

Troubled Debt Restructurings

The following table presents loans modified as a troubled debt restructuring:



(Dollars in thousands)			Outstanding Recorded Investment (1)
	# of Loans		Pre-Modifications				Post-Modifications
Years ended December 31,	2015	2014	2015		2014		2015		2014
Commercial:
Mortgages	1	—		$1,190		$—		$1,190		$—
Construction & development	—	—	—		—		—		—
Commercial & industrial	3	12	584		1,191		584		1,191
Residential real estate:
Mortgages	3	4	619		992		619		992
Homeowner construction	—	—	—		—		—		—
Consumer:
Home equity lines	—	—	—		—		—		—
Home equity loans	1	—	70		—		70		—
Other	1	—	35		—		35		—
Totals	9	16		$2,498		$2,183		$2,498		$2,183


(1)	The recorded investment in troubled debt restructurings consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring. For accruing troubled debt restructured loans, the recorded investment also includes accrued interest.

Troubled Debt Restructurings, Type of Modification

The following table provides information on how loans were modified as a troubled debt restructuring:



(Dollars in thousands)
Years ended December 31,	2015		2014
Below-market interest rate concession		$335		$77
Payment deferral	903		791
Maturity / amortization concession	70		964
Combination (1)	1,190		351
Total		$2,498		$2,183


(1)	Loans included in this classification were modified with a combination of any two of the concessions listed in this table.

Credit Quality Indicators - Commercial

The following table presents the commercial loan portfolio, segregated by category of credit quality indicator:



(Dollars in thousands)
	Pass				Special Mention				Classified
December 31,	2015		2014		2015		2014		2015		2014
Mortgages		$914,774		$819,857		$3,035		$18,372		$14,144		$5,749
Construction & development	122,297		79,592		—		—		—		—
Commercial & industrial	577,036		592,206		12,012		16,311		11,249		3,401
Total commercial loans		$1,614,107		$1,491,655		$15,047		$34,683		$25,393		$9,150

Credit Quality Indicators - Residential & Consumer

The following table presents the residential and consumer loan portfolios, segregated by category of credit quality indicator:



(Dollars in thousands)	Current and Under 90 Days Past Due				Over 90 Days Past Due
December 31,	2015		2014		2015		2014
Residential real estate:
Accruing mortgages		$973,771		$941,607		$—		$—
Nonaccrual mortgages	7,372		3,840		3,294		3,284
Homeowner construction	29,118		36,684		—		—
Total residential loans		$1,010,261		$982,131		$3,294		$3,284
Consumer:
Home equity lines		$255,047		$241,639		$518		$841
Home equity loans	46,427		46,911		222		56
Other	42,811		48,926		—		—
Total consumer loans		$344,285		$337,476		$740		$897

Analysis of Loan Servicing Rights

The following table presents an analysis of loan servicing rights:



(Dollars in thousands)	Loan Servicing Rights			Valuation Allowance			Total
Balance at December 31, 2012		$1,275			($165	)		$1,110
Loan servicing rights capitalized	1,897			—			1,897
Amortization	(405		)	—			(405		)
Decrease in impairment reserve	—			96			96
Balance at December 31, 2013	2,767			(69		)	2,698
Loan servicing rights capitalized	869			—			869
Amortization	(647		)	—			(647		)
Decrease in impairment reserve	—			67			67
Balance at December 31, 2014	2,989			(2		)	2,987
Loan servicing rights capitalized	1,406			—			1,406
Amortization	(1,047		)	—			(1,047		)
Decrease in impairment reserve	—			1			1
Balance at December 31, 2015		$3,348			($1	)		$3,347

Amortization Expense Related to Loan Servicing Assets

The following table presents estimated aggregate amortization expense related to loan servicing assets:



(Dollars in thousands)
Years ending December 31:	2016		$1,008
	2017	701
	2018	491
	2019	343
	2020	241
	Thereafter	564
Total estimated amortization expense			$3,348

Loans Serviced for Others, by Type of Loan

The following table presents the balance of loans serviced for others, by type of loan:



(Dollars in thousands)
December 31,	2015		2014
Residential mortgages		$458,629		$378,798
Commercial loans	109,173		90,484
Total		$567,802		$469,282