Loans (Tables)

12 Months Ended

Dec. 31, 2016

The following is a summary of loans:



(Dollars in thousands)	December 31, 2016				December 31, 2015
	Amount		%		Amount		%
Commercial:
Mortgages (1)		$1,074,186	33	%		$931,953	31	%
Construction & development (2)	121,371		4		122,297		4
Commercial & industrial (3)	576,109		18		600,297		20
Total commercial	1,771,666		55		1,654,547		55
Residential real estate:
Mortgages	1,094,824		34		984,437		33
Homeowner construction	27,924		1		29,118		1
Total residential real estate	1,122,748		35		1,013,555		34
Consumer:
Home equity lines	264,200		8		255,565		8
Home equity loans	37,272		1		46,649		2
Other (4)	38,485		1		42,811		1
Total consumer	339,957		10		345,025		11
Total loans (5)		$3,234,371	100	%		$3,013,127	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 $3.0 million and $2.6 million, respectively, and net unamortized premiums on purchased loans of $783 thousand and $84 thousand, respectively, at December 31, 2016 and 2015.

Nonaccrual Loans

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



(Dollars in thousands)
December 31,	2016		2015
Commercial:
Mortgages		$7,811		$5,711
Construction & development	—		—
Commercial & industrial	1,337		3,018
Residential real estate:
Mortgages	11,736		10,666
Homeowner construction	—		—
Consumer:
Home equity lines	—		528
Home equity loans	1,058		1,124
Other	116		—
Total nonaccrual loans		$22,058		$21,047
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, 2016	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Mortgages		$901		$—		$7,807		$8,708		$1,065,478		$1,074,186
Construction & development	—		—		—		—		121,371		121,371
Commercial & industrial	409		—		745		1,154		574,955		576,109
Residential real estate:
Mortgages	5,381		652		6,193		12,226		1,082,598		1,094,824
Homeowner construction	—		—		—		—		27,924		27,924
Consumer:
Home equity lines	655		26		—		681		263,519		264,200
Home equity loans	776		76		658		1,510		35,762		37,272
Other	32		1		110		143		38,342		38,485
Total loans		$8,154		$755		$15,513		$24,422		$3,209,949		$3,234,371



(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

Impaired Loans

The following is a summary of impaired loans:



(Dollars in thousands)
	Recorded Investment (1)				Unpaid Principal				Related Allowance
December 31,	2016		2015		2016		2015		2016		2015
No Related Allowance Recorded:
Commercial:
Mortgages		$4,676		$4,292		$9,019		$5,101		$—		$—
Construction & development	—		—		—		—		—		—
Commercial & industrial	6,458		1,849		6,550		1,869		—		—
Residential real estate:
Mortgages	14,385		8,441		14,569		8,826		—		—
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	—		6		—		64		—		—
Home equity loans	1,137		530		1,177		539		—		—
Other	116		—		116		—		—		—
Subtotal	26,772		15,118		31,431		16,399		—		—
With Related Allowance Recorded:
Commercial:
Mortgages	5,104		10,873		6,087		10,855		448		1,633
Construction & development	—		—		—		—		—		—
Commercial & industrial	662		2,024		699		2,248		3		771
Residential real estate:
Mortgages	1,285		2,895		1,310		2,941		151		156
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	—		522		—		522		—		2
Home equity loans	—		679		—		783		—		21
Other	28		145		29		144		4		—
Subtotal	7,079		17,138		8,125		17,493		606		2,583
Total impaired loans		$33,851		$32,256		$39,556		$33,892		$606		$2,583
Total:
Commercial		$16,900		$19,038		$22,355		$20,073		$451		$2,404
Residential real estate	15,670		11,336		15,879		11,767		151		156
Consumer	1,281		1,882		1,322		2,052		4		23
Total impaired loans		$33,851		$32,256		$39,556		$33,892		$606		$2,583

(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,	2016		2015		2014		2016		2015		2014
Commercial:
Mortgages		$13,201		$14,847		$22,971		$239		$327		$658
Construction & development	—		—		—		—		—		—
Commercial & industrial	3,540		3,415		2,499		99		130		126
Residential real estate:
Mortgages	12,848		5,423		4,006		322		147		101
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	354		228		97		10		1		2
Home equity loans	1,233		487		100		38		11		4
Other	147		210		119		11		10		8
Totals		$31,323		$24,610		$29,792		$719		$626		$899

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,	2016	2015	2016		2015		2016		2015
Commercial:
Mortgages	1	1		$776		$1,190		$776		$1,190
Construction & development	—	—	—		—		—		—
Commercial & industrial	9	3	6,229		584		6,229		584
Residential real estate:
Mortgages	3	3	4,386		619		4,386		619
Homeowner construction	—	—	—		—		—		—
Consumer:
Home equity lines	—	—	—		—		—		—
Home equity loans	—	1	—		70		—		70
Other	—	1	—		35		—		35
Totals	13	9		$11,391		$2,498		$11,391		$2,498


(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,	2016		2015
Below-market interest rate concession		$—		$335
Payment deferral	1,111		903
Maturity / amortization concession	683		70
Interest only payments	4,326		—
Combination (1)	5,271		1,190
Total		$11,391		$2,498


(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,	2016		2015		2016		2015		2016		2015
Mortgages		$1,065,358		$914,774		$776		$3,035		$8,052		$14,144
Construction & development	121,371		122,297		—		—		—		—
Commercial & industrial	559,416		577,036		8,938		12,012		7,755		11,249
Total commercial loans		$1,746,145		$1,614,107		$9,714		$15,047		$15,807		$25,393

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,	2016		2015		2016		2015
Residential real estate:
Accruing mortgages		$1,083,088		$973,771		$—		$—
Nonaccrual mortgages	5,543		7,372		6,193		3,294
Homeowner construction	27,924		29,118		—		—
Total residential loans		$1,116,555		$1,010,261		$6,193		$3,294
Consumer:
Home equity lines		$264,200		$255,047		$—		$518
Home equity loans	36,614		46,427		658		222
Other	38,375		42,811		110		—
Total consumer loans		$339,189		$344,285		$768		$740

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, 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
Loan servicing rights capitalized	1,412			—			1,412
Amortization	(1,267		)	—			(1,267		)
Decrease in impairment reserve	—			1			1
Balance at December 31, 2016		$3,493			$—			$3,493

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:	2017		$1,137
	2018	767
	2019	517
	2020	349
	2021	235
	Thereafter	488
Total estimated amortization expense			$3,493

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,	2016		2015
Residential mortgages		$522,766		$458,629
Commercial loans	101,317		109,173
Total		$624,083		$567,802