Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2015

Loans Receivable, Net [Abstract]

Past Due Loans

The following table presents an aging analysis of accruing and nonaccruing loans as of March 31, 2015:

(dollars in thousands)	Accruing
	30-59 days past due		60-89 days past due		More than 90 days past due		Nonaccrual		Total past due and nonaccrual		Current and accruing		Total Loans
PC and Originated Loans
Commercial and agricultural	$	357	$	—	$	—	$	515	$	872	$	107,920	$	108,792
Real estate - construction	—		211		—		1,022		1,233		72,837		74,070
Real estate - mortgage:
1-4 family residential	1,491		26		—		8,856		10,373		649,407		659,780
Commercial	—		—		—		9,410		9,410		352,209		361,619
Consumer	680		116		—		452		1,248		81,140		82,388
Total	2,528		353		—		20,255		23,136		1,263,513		1,286,649
PI loans
Commercial and agricultural	14		—		2,178		—		2,192		4,649		6,841
Real estate - construction	—		—		1,618		—		1,618		7,037		8,655
Real estate - mortgage:
1-4 family residential	481		—		1,966		—		2,447		13,882		16,329
Commercial	404		—		13,055		—		13,459		63,030		76,489
Consumer	2		—		9		—		11		937		948
Total	901		—		18,826		—		19,727		89,535		109,262
Total Loans	$	3,429	$	353	$	18,826	$	20,255	$	42,863	$	1,353,048	$	1,395,911

The following table presents an aging analysis of accruing and nonaccruing loans as of December 31, 2014:

(dollars in thousands)	Accruing
	30-59 days past due		60-89 days past due		More than 90 days past due		Nonaccrual		Total past due and nonaccrual		Current and accruing		Total Loans
PC and Originated Loans
Commercial and agricultural	$	—	$	—	$	—	$	608	$	608	$	105,269	$	105,877
Real estate - construction	100		—		—		2,307		2,407		66,723		69,130
Real estate - mortgage:
1-4 family residential	2,719		147		—		8,637		11,503		638,364		649,867
Commercial	105		141		—		13,381		13,627		325,356		338,983
Consumer	744		225		5		355		1,329		69,760		71,089
Total	3,668		513		5		25,288		29,474		1,205,472		1,234,946
PI loans
Commercial and agricultural	—		—		2,232		—		2,232		5,303		7,535
Real estate - construction	—		—		3,737		—		3,737		5,460		9,197
Real estate - mortgage:
1-4 family residential	579		15		2,209		—		2,803		14,934		17,737
Commercial	287		119		12,964		—		13,370		73,975		87,345
Consumer	2		—		10		—		12		1,016		1,028
Total	868		134		21,152		—		22,154		100,688		122,842
Total Loans	$	4,536	$	647	$	21,157	$	25,288	$	51,628	$	1,306,160	$	1,357,788

Loan Credit Quality Indicators

The following table presents loans held for investment balances by risk grade as of March 31, 2015:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful
	(Ratings 1-5)		(Rating 6)		(Rating 7)		(Rating 8)		Total
Commercial and agricultural	$	106,767	$	6,093	$	2,773	$	—	$	115,633
Real estate - construction	75,226		2,205		5,294		—		82,725
Real estate - mortgage:
1-4 family residential	655,673		5,199		15,237		—		676,109
Commercial	385,425		21,357		30,960		363		438,105
Consumer	82,537		10		474		318		83,339
Total	$	1,305,628	$	34,864	$	54,738	$	681	$	1,395,911

The following table presents loans held for investment balances by risk grade as of December 31, 2014:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful
	(Ratings 1-5)		(Rating 6)		(Rating 7)		(Rating 8)		Total
Commercial and agricultural	$	104,165	$	6,318	$	2,930	$	—	$	113,413
Real estate - construction	68,995		2,411		6,921		—		78,327
Real estate - mortgage:
1-4 family residential	646,897		5,363		15,342		—		667,602
Commercial	363,267		25,715		36,984		362		426,328
Consumer	71,350		11		376		381		72,118
Total	$	1,254,674	$	39,818	$	62,553	$	743	$	1,357,788

Schedule of Impaired Loans Receivables

The following table summarizes information relative to impaired loans for the dates indicated:

	March 31, 2015				December 31, 2014
(dollars in thousands)	Recorded Investment		Associated Reserves		Recorded Investment		Associated Reserves
Impaired loans, not individually reviewed for impairment	$	4,603	$	—	$	4,967	$	—
Impaired loans, individually reviewed, with no impairment	22,134		—		26,631		—
Impaired loans, individually reviewed, with impairment	7,550		364		7,851		418
Total impaired loans, excluding purchased impaired *	$	34,287	$	364	$	39,449	$	418
Purchased impaired loans with subsequent deterioration	$	105,662	3,194		$	118,701	3,237
Purchased impaired loans with no subsequent deterioration	$	3,600	—		$	4,141	—
Total Reserves			$	3,558			$	3,655
Average impaired loans calculated using a simple average	$	36,868			$	43,446

* Included at March 31, 2015 and December 31, 2014 were $14.0 million and $14.1 million, respectively, in restructured and performing loans.

Schedule of Loans, Non Accrual Status

The following table presents loans held for investment on nonaccrual status by loan class for the dates indicated:

(dollars in thousands)
	March 31, 2015		December 31, 2014
Loans held for investment:
Commercial and agricultural	$	515	$	608
Real estate - construction	1,022		2,307
Real estate - mortgage:
1-4 family residential	8,856		8,637
Commercial	9,410		13,381
Consumer	452		355
Total nonaccrual loans	20,255		25,288
Loans more than 90 days delinquent, still on accrual	—		5
Total nonperforming loans	$	20,255	$	25,293

Impaired Loans

The following table presents individually reviewed impaired loans and purchased impaired loans with subsequent credit deterioration, segregated by portfolio segment, and the corresponding allowance for loan losses as of March 31, 2015:

			Unpaid
(dollars in thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
Individually reviewed impaired loans with no related allowance recorded:
Commercial and agricultural	$	444	$	493	$	—
Real estate - construction	1,262		1,582		—
Real estate - mortgage:
1-4 family residential	7,852		9,761		—
Commercial	12,576		18,092		—
Consumer	—		—		—
Total	22,134		29,928		—
Individually reviewed impaired loans with an allowance recorded:
Commercial and agricultural	—		—		—
Real estate - construction	—		—		—
Real estate - mortgage:
1-4 family residential	3,738		4,305		353
Commercial	3,812		3,984		11
Consumer	—		—		—
Total	7,550		8,289		364
Total individually reviewed impaired loans:
Commercial and agricultural	444		493		—
Real estate - construction	1,262		1,582		—
Real estate - mortgage:
1-4 family residential	11,590		14,066		353
Commercial	16,388		22,076		11
Consumer	—		—		—
Total	$	29,684	$	38,217	$	364
PI loans with subsequent credit deterioration:
Commercial and agricultural	$	6,841	$	5,521	$	239
Real estate - construction	8,112		9,234		783
Real estate - mortgage:
1-4 family residential	13,272		14,078		240
Commercial	76,489		78,403		1,744
Consumer	948		621		188
Total	$	105,662	$	107,857	$	3,194

The following table presents individually reviewed impaired loans, and purchased impaired loans with subsequent credit deterioration, segregated by portfolio segment, and the corresponding allowance for loan losses as of December 31, 2014:

			Unpaid
(dollars in thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
Individually reviewed impaired loans with no related allowance recorded:
Commercial and agricultural	$	—	$	—	$	—
Real estate - construction	2,344		2,898		—
Real estate - mortgage:
1-4 family residential	8,115		10,238		—
Commercial	16,172		22,060		—
Consumer	—		—		—
Total	26,631		35,196		—
Individually reviewed impaired loans with an allowance recorded:
Commercial and agricultural	498		498		58
Real estate - construction	—		—		—
Real estate - mortgage:
1-4 family residential	3,294		3,676		331
Commercial	4,059		4,228		29
Consumer	—		—		—
Total	7,851		8,402		418
Total individually reviewed impaired loans:
Commercial and agricultural	498		498		58
Real estate - construction	2,344		2,898		—
Real estate - mortgage:
1-4 family residential	11,409		13,914		331
Commercial	20,231		26,288		29
Consumer	—		—		—
Total	$	34,482	$	43,598	$	418
PI loans with subsequent credit deterioration:
Commercial and agricultural	$	7,535	$	6,149	$	257
Real estate - construction	8,619		9,855		507
Real estate - mortgage:
1-4 family residential	14,174		15,278		199
Commercial	87,345		90,830		2,085
Consumer	1,028		667		189
Total	$	118,701	$	122,779	$	3,237

Impaired Loans, Average Recorded Investment and Interest Income

The following summary presents individually reviewed impaired loans. Average recorded investment and interest income recognized on impaired loans, segregated by portfolio segment, is shown in the following tables as of March 31, 2015 and March 31, 2014:

	For Three Months Ended				For Three Months Ended
	March 31, 2015				March 31, 2014
	Average		Interest		Average		Interest
(dollars in thousands)	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Individually reviewed impaired loans with no related allowance recorded:
Commercial and agricultural	$	478	$	—	$	242	$	—
Real estate - construction	1,276		11		2,688		10
Real estate - mortgage:
1-4 family residential	7,925		31		9,050		28
Commercial	13,081		73		21,503		89
Consumer	—		—		—		—
Total	22,760		115		33,483		127
Individually reviewed impaired loans with an allowance recorded:
Commercial and agricultural	—		—		—		—
Real estate - construction	—		—		650		2
Real estate - mortgage:
1-4 family residential	3,744		19		3,829		19
Commercial	3,830		52		3,552		30
Consumer	—		—		—		—
Total	7,574		71		8,031		51
Total individually reviewed impaired loans:
Commercial and agricultural	478		—		242		—
Real estate - construction	1,276		11		3,338		12
Real estate - mortgage:
1-4 family residential	11,669		50		12,879		47
Commercial	16,911		125		25,055		119
Consumer	—		—		—		—
Total	$	30,334	$	186	$	41,514	$	178

Schedule of Loans Receivable, Acquired Loans

The following table presents the balance of all Granite Purchased Loans:

	At March 31, 2015
(dollars in thousands)	Purchased Impaired		Purchased Contractual		Total Purchased Loans		Unpaid Principal Balance
Commercial and agricultural	$	6,841	$	1,187	$	8,028	$	6,727
Real estate - construction	8,655		—		8,655		9,815
Real estate - mortgage:
1-4 family residential	16,329		21,250		37,579		39,223
Commercial	76,489		—		76,489		78,403
Consumer	948		—		948		629
Total	$	109,262	$	22,437	$	131,699	$	134,797

	At December 31, 2014
(dollars in thousands)	Purchased Impaired		Purchased Contractual		Total Purchased Loans		Unpaid Principal Balance
Commercial and agricultural	$	7,535	$	4,288	$	11,823	$	10,508
Real estate - construction	9,197		—		9,197		10,463
Real estate - mortgage:
1-4 family residential	17,737		21,660		39,397		41,295
Commercial	87,345		—		87,345		90,830
Consumer	1,028		—		1,028		678
Total	$	122,842	$	25,948	$	148,790	$	153,774

Deteriorated Loans Acquired, Accretable Yield Movement Schedule

The tables below include only those Granite Purchased Loans accounted for under the expected cash flow method (PI loans) for the periods indicated. These tables do not include PC loans, including Granite PC loans or purchased residential mortgage loan pools.

	For Three Months Ended						For Three Months Ended
	March 31, 2015						March 31, 2014
	Purchased Impaired						Purchased Impaired
(dollars in thousands)	Carrying Amount			Future Accretion			Carrying Amount			Future Accretion
Balance, beginning of period	$	122,842		$	24,898		$	161,651		$	29,987
Accretion	2,048			(2,048		)	2,665			(2,665		)
Increase (Decrease) in future accretion	—			(1,925		)	—			1,005
Reclassification of loans and adjustments	—			—			(4,180		)	—
Payments received	(14,854		)	—			(11,081		)	—
Foreclosed and transferred to OREO	(774		)	—			(22		)	—
Subtotal before allowance	109,262			20,925			149,033			28,327
Allowance for loan losses	(3,194		)	—			(5,237		)	—
Net carrying amount, end of period	$	106,068		$	20,925		$	143,796		$	28,327

Allowance for Loan Losses

An analysis of the changes in the ALL is as follows:

	For Three Months Ended
(dollars in thousands)	March 31, 2015			March 31, 2014
Balance, beginning of period	$	20,345		$	26,785
Recovery of losses charged to continuing operations	(1,137		)	(684		)
Net charge-offs:
Charge-offs	(994		)	(1,977		)
Recoveries	794			1,915
Net charge-offs	(200		)	(62		)
Balance, end of period	$	19,008		$	26,039
Annualized net charge-offs during the period to average loans held for investment	0.06		%	0.02		%
Annualized net charge-offs during the period to ALL	4.27		%	0.97		%
Allowance for loan losses to loans held for investment	1.36		%	2.13		%

Allowance for Loan Losses by Portfolio Segment

The following table presents ALL activity by portfolio segment for the three months ended March 31, 2015:

							Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural			Real Estate - Construction			1-4 Family Residential			Commercial			Consumer			Total
ALL:
Beginning balance January 1, 2015	$	3,915		$	3,163		$	5,847		$	4,179		$	3,241		$	20,345
Charge-offs	(49		)	(81		)	(125		)	(7		)	(732		)	(994		)
Recoveries	221			196			138			58			181			794
Provision (recovery of provision)	(689		)	(158		)	(237		)	(1,078		)	1,025			(1,137		)
Ending balance March 31, 2015	$	3,398		$	3,120		$	5,623		$	3,152		$	3,715		$	19,008

The following table presents ALL activity by portfolio segment for the three months ended March 31, 2014:

							Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural			Real Estate - Construction			1-4 Family Residential			Commercial			Consumer			Total
ALL:
Beginning balance January 1, 2014	$	2,931		$	5,233		$	8,869		$	7,195		$	2,557		$	26,785
Charge-offs	(389		)	(533		)	(484		)	(66		)	(505		)	(1,977		)
Recoveries	392			964			235			66			258			1,915
Provision (recovery of provision)	507			(356		)	(697		)	(229		)	91			(684		)
Ending balance March 31, 2014	$	3,441		$	5,308		$	7,923		$	6,966		$	2,401		$	26,039

Allowance for Loan Losses, Impairment Methodology

The following table details the recorded investment in loans related to each segment in the allowance for loan losses by portfolio segment and disaggregated on the basis of impairment evaluation methodology at March 31, 2015:

					Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural		Real Estate - Construction		1-4 Family Residential		Commercial		Consumer		Total
ALL:
Individually reviewed for impairment	$	—	$	—	$	353	$	11	$	—	$	364
Collectively reviewed for impairment	3,159		2,337		5,030		1,397		3,527		15,450
PI loans reviewed for credit impairment	239		783		240		1,744		188		3,194
PI loans with no credit deterioration	—		—		—		—		—		—
Total ALL	$	3,398	$	3,120	$	5,623	$	3,152	$	3,715	$	19,008
Loans held for investment
Individually reviewed for impairment	$	444	$	1,262	$	11,596	$	16,387	$	—	$	29,689
Collectively reviewed for impairment	108,348		72,808		648,184		345,229		82,391		1,256,960
PI loans with subsequent credit deterioration	6,841		8,112		13,272		76,489		948		105,662
PI loans with no credit deterioration	—		543		3,057		—		—		3,600
Total loans	$	115,633	$	82,725	$	676,109	$	438,105	$	83,339	$	1,395,911

The following table details the recorded investment in loans related to each segment in the allowance for loan losses by portfolio segment and disaggregated on the basis of impairment evaluation methodology at December 31, 2014:

					Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural		Real Estate - Construction		1-4 Family Residential		Commercial		Consumer		Total
ALL:
Individually reviewed for impairment	$	58	$	—	$	331	$	29	$	—	$	418
Collectively reviewed for impairment	3,600		2,656		5,317		2,065		3,052		16,690
PI loans reviewed for credit impairment	257		507		199		2,085		189		3,237
PI loans with no credit deterioration	—		—		—		—		—		—
Total ALL	$	3,915	$	3,163	$	5,847	$	4,179	$	3,241	$	20,345
Loans held for investment
Individually reviewed for impairment	$	498	$	2,344	$	11,409	$	20,231	$	—	$	34,482
Collectively reviewed for impairment	105,380		66,786		638,456		318,752		71,090		1,200,464
PI loans with subsequent credit deterioration	7,535		8,619		14,174		87,345		1,028		118,701
PI loans with no credit deterioration	—		578		3,563		—		—		4,141
Total loans	$	113,413	$	78,327	$	667,602	$	426,328	$	72,118	$	1,357,788

Troubled Debt Restructurings on Loans

The following tables present a breakdown of troubled debt restructurings that were restructured during the three months ended March 31, 2015 and March 31, 2014, respectively, segregated by portfolio segment:

	For Three Months Ended March 31, 2015					For Three Months Ended March 31, 2014
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		Outstanding		Outstanding			Outstanding		Outstanding
(dollars in thousands)	Number	Recorded		Recorded		Number	Recorded		Recorded
	of Loans	Investment		Investment		of Loans	Investment		Investment
Commercial and agricultural	—	$	—	$	—	1	$	11	$	11
Real estate - construction	—	—		—		—	—		—
Real estate - mortgage:
1-4 family residential	—	—		—		5	735		732
Commercial	—	—		—		—	—		—
Consumer	—	—		—		—	—		—
Total	—	$	—	$	—	6	$	746	$	743