Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2016

Loans Receivable, Net [Abstract]

Schedule of Aging Analysis of Accruing and Nonaccruing Loans

The following table presents an aging analysis of accruing and nonaccruing loans as of June 30, 2016:

(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	$	80	$	49	$	—	$	480	$	609	$	140,986	$	141,595
Real estate - construction	540		—		—		72		612		106,337		106,949
Real estate - mortgage:
1-4 family residential	433		671		—		7,471		8,575		635,841		644,416
Commercial	63		—		—		5,969		6,032		431,936		437,968
Consumer	1,311		342		—		678		2,331		119,213		121,544
Total	2,427		1,062		—		14,670		18,159		1,434,313		1,452,472
PI loans
Commercial and agricultural	47		—		1,721		—		1,768		2,839		4,607
Real estate - construction	—		—		1,309		—		1,309		5,726		7,035
Real estate - mortgage:
1-4 family residential	78		40		1,133		—		1,251		11,154		12,405
Commercial	—		22		8,122		—		8,144		39,584		47,728
Consumer	2		5		3		—		10		813		823
Total	127		67		12,288		—		12,482		60,116		72,598
Total Loans	$	2,554	$	1,129	$	12,288	$	14,670	$	30,641	$	1,494,429	$	1,525,070

The following table presents an aging analysis of accruing and nonaccruing loans as of December 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	$	—	$	1	$	—	$	1,053	$	1,054	$	146,257	$	147,311
Real estate - construction	761		140		—		110		1,011		98,247		99,258
Real estate - mortgage:
1-4 family residential	2,710		574		817		9,106		13,207		660,430		673,637
Commercial	661		34		—		7,209		7,904		421,220		429,124
Consumer	1,227		250		1		538		2,016		104,885		106,901
Total	5,359		999		818		18,016		25,192		1,431,039		1,456,231
PI loans
Commercial and agricultural	102		—		1,618		—		1,720		3,275		4,995
Real estate - construction	—		—		1,455		—		1,455		6,289		7,744
Real estate - mortgage:
1-4 family residential	602		15		1,127		—		1,744		12,173		13,917
Commercial	517		123		8,819		—		9,459		50,530		59,989
Consumer	8		—		6		—		14		905		919
Total	1,229		138		13,025		—		14,392		73,172		87,564
Total Loans	$	6,588	$	1,137	$	13,843	$	18,016	$	39,584	$	1,504,211	$	1,543,795

Schedule of Loans Held for Investment

The following table presents loans held for investment balances by risk grade as of June 30, 2016:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful
	(Ratings 1-5)		(Rating 6)		(Rating 7)		(Rating 8)		Total
Commercial and agricultural	$	138,177	$	5,657	$	2,368	$	—	$	146,202
Real estate - construction	108,486		1,784		3,714		—		113,984
Real estate - mortgage:
1-4 family residential	643,150		2,222		11,449		—		656,821
Commercial	453,787		10,768		21,141		—		485,696
Consumer	121,214		5		696		452		122,367
Total	$	1,464,814	$	20,436	$	39,368	$	452	$	1,525,070

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

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful
	(Ratings 1-5)		(Rating 6)		(Rating 7)		(Rating 8)		Total
Commercial and agricultural	$	148,844	$	672	$	2,790	$	—	$	152,306
Real estate - construction	100,252		2,122		4,628		—		107,002
Real estate - mortgage:
1-4 family residential	669,695		3,508		14,351		—		687,554
Commercial	450,587		12,765		25,761		—		489,113
Consumer	107,008		4		553		255		107,820
Total	$	1,476,386	$	19,071	$	48,083	$	255	$	1,543,795

Schedule of Impaired Loans Receivables

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

	June 30, 2016				December 31, 2015
(dollars in thousands)	Recorded Investment		Associated Reserves		Recorded Investment		Associated Reserves
Impaired loans, not individually reviewed for impairment	$	4,543	$	—	$	4,903	$	—
Impaired loans, individually reviewed, with no impairment	18,383		—		22,411		—
Impaired loans, individually reviewed, with impairment	3,731		328		3,817		399
Total impaired loans, excluding purchased impaired *	$	26,657	328		$	31,131	399
Purchased impaired loans with subsequent deterioration	$	69,587	2,754		$	84,329	2,754
Purchased impaired loans with no subsequent deterioration	3,011		—		3,235		—
Total Reserves			$	3,082			$	3,153
Average impaired loans calculated using a simple average	28,894				35,290

* Included at June 30, 2016 and December 31, 2015 were $12.0 million and $13.1 million, respectively, in restructured and performing loans.

Schedule of Loans Held for Investment on Nonaccrual Status

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

(dollars in thousands)
	June 30, 2016		December 31, 2015
Loans held for investment:
Commercial and agricultural	$	480	$	1,053
Real estate - construction	72		110
Real estate - mortgage:
1-4 family residential	7,471		9,106
Commercial	5,969		7,209
Consumer	678		538
Total nonaccrual loans	14,670		18,016
Loans more than 90 days delinquent, still on accrual	—		817
Total nonperforming loans	$	14,670	$	18,833

Schedule of 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 June 30, 2016:

			Unpaid
(dollars in thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
Individually reviewed impaired loans with no related allowance recorded:
Commercial and agricultural	$	379	$	479	$	—
Real estate - construction	535		690		—
Real estate - mortgage:
1-4 family residential	5,837		7,606		—
Commercial	11,632		16,491		—
Consumer	—		—		—
Total	18,383		25,266		—
Individually reviewed impaired loans with an allowance recorded:
Commercial and agricultural	—		—		—
Real estate - construction	—		—		—
Real estate - mortgage:
1-4 family residential	3,385		4,220		285
Commercial	346		353		43
Consumer	—		—		—
Total	3,731		4,573		328
Total individually reviewed impaired loans:
Commercial and agricultural	379		479		—
Real estate - construction	535		690		—
Real estate - mortgage:
1-4 family residential	9,222		11,826		285
Commercial	11,978		16,844		43
Consumer	—		—		—
Total	$	22,114	$	29,839	$	328
PI loans with subsequent credit deterioration:
Commercial and agricultural	$	4,607	$	3,475	$	378
Real estate - construction	6,779		7,480		634
Real estate - mortgage:
1-4 family residential	9,650		9,683		325
Commercial	47,728		47,383		1,375
Consumer	823		525		42
Total	$	69,587	$	68,546	$	2,754

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, 2015:

			Unpaid
(dollars in thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
Individually reviewed impaired loans with no related allowance recorded:
Commercial and agricultural	$	399	$	479	$	—
Real estate - construction	775		939		—
Real estate - mortgage:
1-4 family residential	7,418		9,406		—
Commercial	13,820		19,116		—
Consumer	—		—		—
Total	22,412		29,940		—
Individually reviewed impaired loans with an allowance recorded:
Commercial and agricultural	—		—		—
Real estate - construction	—		—		—
Real estate - mortgage:
1-4 family residential	3,817		4,691		399
Commercial	—		—		—
Consumer	—		—		—
Total	3,817		4,691		399
Total individually reviewed impaired loans:
Commercial and agricultural	399		479		—
Real estate - construction	775		939		—
Real estate - mortgage:
1-4 family residential	11,235		14,097		399
Commercial	13,820		19,116		—
Consumer	—		—		—
Total	$	26,229	$	34,631	$	399
PI loans with subsequent credit deterioration:
Commercial and agricultural	$	4,995	$	3,908	$	311
Real estate - construction	7,323		8,121		579
Real estate - mortgage:
1-4 family residential	11,103		11,327		384
Commercial	59,989		60,582		1,356
Consumer	919		598		124
Total	$	84,329	$	84,536	$	2,754

Schedule of Individually Reviewed Impaired Loans

Average recorded investment and interest income recognized on impaired loans, segregated by portfolio segment, is shown in the following table as of June 30, 2016 and June 30, 2015:

	For Three Months Ended				For Three Months Ended
	June 30, 2016				June 30, 2015
	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	$	384	$	—	$	435	$	—
Real estate - construction	541		7		1,126		8
Real estate - mortgage:
1-4 family residential	5,960		21		7,099		24
Commercial	11,779		46		15,770		57
Consumer	—		—		—		—
Total	18,664		74		24,430		89
Individually reviewed impaired loans with an allowance recorded:
Commercial and agricultural	—		—		—		—
Real estate - construction	—		—		—		—
Real estate - mortgage:
1-4 family residential	3,394		11		4,646		14
Commercial	347		4		—		—
Consumer	—		—		—		—
Total	3,741		15		4,646		14
Total individually reviewed impaired loans:
Commercial and agricultural	384		—		435		—
Real estate - construction	541		7		1,126		8
Real estate - mortgage:
1-4 family residential	9,354		32		11,745		38
Commercial	12,126		50		15,770		57
Consumer	—		—		—		—
Total	$	22,405	$	89	$	29,076	$	103

	For Six Months Ended				For Six Months Ended
	June 30, 2016				June 30, 2015
	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	$	390	$	—	$	457	$	—
Real estate - construction	652		21		1,201		9
Real estate - mortgage:
1-4 family residential	6,338		48		7,512		27
Commercial	12,303		139		14,425		65
Consumer	—		—		—		—
Total	19,683		208		23,595		101
Individually reviewed impaired loans with an allowance recorded:
Commercial and agricultural	—		—		—		—
Real estate - construction	—		—		—		—
Real estate - mortgage:
1-4 family residential	3,841		31		4,195		17
Commercial	298		4		1,915		26
Consumer	—		—		—		—
Total	4,139		35		6,110		43
Total individually reviewed impaired loans:
Commercial and agricultural	390		—		457		—
Real estate - construction	652		21		1,201		9
Real estate - mortgage:
1-4 family residential	10,179		79		11,707		44
Commercial	12,601		143		16,340		91
Consumer	—		—		—		—
Total	$	23,822	$	243	$	29,705	$	144

Summary of Balances of Granite Purchased Loans

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

	At June 30, 2016
(dollars in thousands)	Purchased Impaired		Purchased Contractual		Total Purchased Loans		Unpaid Principal Balance
Commercial and agricultural	$	4,607	$	114	$	4,721	$	3,589
Real estate - construction	7,035		—		7,035		7,763
Real estate - mortgage:
1-4 family residential	12,405		16,755		29,160		29,609
Commercial	47,728		—		47,728		47,383
Consumer	823		—		823		525
Total	$	72,598	$	16,869	$	89,467	$	88,869

	At December 31, 2015
(dollars in thousands)	Purchased Impaired		Purchased Contractual		Total Purchased Loans		Unpaid Principal Balance
Commercial and agricultural	$	4,995	$	238	$	5,233	$	4,149
Real estate - construction	7,744		—		7,744		8,579
Real estate - mortgage:
1-4 family residential	13,917		17,915		31,832		32,558
Commercial	59,989		—		59,989		60,582
Consumer	919		—		919		598
Total	$	87,564	$	18,153	$	105,717	$	106,466

Summary of Purchased Loans Accounted for Under the Expected Cash Flow Method

This table does not include PC loans, including Granite PC loans or purchased residential mortgage loan pools.

	For Three Months Ended						For Three Months Ended
	June 30, 2016						June 30, 2015
	Purchased Impaired						Purchased Impaired
(dollars in thousands)	Carrying Amount			Future Accretion			Carrying Amount			Future Accretion
Balance, beginning of period	$	84,627		$	14,215		$	109,262		$	20,925
Addition from Bank of Granite Corp merger	—			—			—			—
Accretion	1,319			(1,319		)	1,841			(1,841		)
Increase (Decrease) in future accretion	—			(1		)	—			1,716
Reclassification of loans and adjustments	—			—			—			—
Payments received	(12,650		)	—			(8,522		)	—
Foreclosed and transferred to OREO	(698		)	—			(466		)	—
Subtotal before allowance	72,598			12,895			102,115			20,800
Allowance for loan losses	(2,754		)	—			(3,181		)	—
Net carrying amount, end of period	$	69,844		$	12,895		$	98,934		$	20,800

	For Six Months Ended						For Six Months Ended
	June 30, 2016						June 30, 2015
	Purchased Impaired						Purchased Impaired
(dollars in thousands)	Carrying Amount			Future Accretion			Carrying Amount			Future Accretion
Balance, beginning of period	$	87,564		$	15,623		$	122,842		$	24,898
Accretion	2,725			(2,725		)	3,889			(3,889		)
Increase (Decrease) in future accretion	—			(3		)	—			(209		)
Payments received	(16,993		)	—			(23,376		)	—
Foreclosed and transferred to OREO	(698		)	—			(1,240		)	—
Subtotal before allowance	72,598			12,895			102,115			20,800
Allowance for credit losses	(2,754		)	—			(3,181		)	—
Net carrying amount, end of period	$	69,844		$	12,895		$	98,934		$	20,800

Summary of Allowance for Loan Losses

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

	For Three Months Ended						For Six Months Ended
(dollars in thousands)	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Balance, beginning of period	$	14,240		$	19,008		$	15,195		$	20,345
Recovery of losses charged to continuing operations	507			(788		)	(28		)	(1,926		)
Net charge-offs:
Charge-offs	(2,041		)	(1,567		)	(3,135		)	(2,562		)
Recoveries	999			1,336			1,673			2,132
Net charge-offs	(1,042		)	(231		)	(1,462		)	(430		)
Balance, end of period	$	13,705		$	17,989		$	13,705		$	17,989
Annualized net charge-offs during the period to average loans held for investment	0.27		%	0.07		%	0.19		%	0.06		%
Annualized net charge-offs during the period to ALL	30.58		%	5.15		%	21.45		%	4.82		%
Allowance for loan losses to loans held for investment	0.90		%	1.24		%	0.90		%	1.24		%

Schedule of Allowance for Loan Losses by Portfolio Segment

The following table presents ALL activity by portfolio segment for the three months ended June 30, 2016:

							Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural			Real Estate - Construction			1-4 Family Residential			Commercial			Consumer			Total
ALL:
Beginning balance April 1, 2016	$	2,044		$	1,296		$	4,375		$	2,543		$	3,982		$	14,240
Charge-offs	61			(9		)	(610		)	(195		)	(1,288		)	(2,041		)
Recoveries	(32		)	174			247			385			225			999
Provision (recovery of provision)	(1,006		)	725			54			(725		)	1,459			507
Ending balance June 30, 2016	$	1,067		$	2,186		$	4,066		$	2,008		$	4,378		$	13,705

The following table presents ALL activity by portfolio segment for the three months ended June 30, 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	$	3,398		$	3,120		$	5,623		$	3,152		$	3,715		$	19,008
Charge-offs	(257		)	(4		)	(251		)	(261		)	(794		)	(1,567		)
Recoveries	428			179			171			328			230			1,336
Provision (recovery of provision)	(857		)	(1,088		)	(26		)	87			1,096			(788		)
Ending balance June 30, 2015	$	2,712		$	2,207		$	5,517		$	3,306		$	4,247		$	17,989

Schedule of Recorded Investment by Portfolio Segment

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 June 30, 2016:

					Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural		Real Estate - Construction		1-4 Family Residential		Commercial		Consumer		Total
ALL:
Individually reviewed for impairment	$	—	$	—	$	285	$	43	$	—	$	328
Collectively reviewed for impairment	756		1,607		3,397		609		4,254		10,623
PI loans reviewed for credit impairment	311		579		384		1,356		124		2,754
PI loans with no credit deterioration	—		—		—		—		—		—
Total ALL	$	1,067	$	2,186	$	4,066	$	2,008	$	4,378	$	13,705
Loans held for investment:
Individually reviewed for impairment	$	379	$	535	$	9,222	$	11,978	$	—	$	22,114
Collectively reviewed for impairment	141,216		106,414		635,194		425,990		121,544		1,430,358
PI loans with subsequent credit deterioration	4,607		6,779		9,650		47,728		823		69,587
PI loans with no credit deterioration	—		256		2,755		—		—		3,011
Total loans	$	146,202	$	113,984	$	656,821	$	485,696	$	122,367	$	1,525,070

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, 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	$	—	$	—	$	399	$	—	$	—	$	399
Collectively reviewed for impairment	2,091		1,190		4,358		972		3,431		12,042
PI loans reviewed for credit impairment	311		579		384		1,356		124		2,754
PI loans with no credit deterioration	—		—		—		—		—		—
Total ALL	$	2,402	$	1,769	$	5,141	$	2,328	$	3,555	$	15,195
Loans held for investment:
Individually reviewed for impairment	$	399	$	775	$	11,235	$	13,820	$	—	$	26,229
Collectively reviewed for impairment	146,912		98,483		662,402		415,304		106,901		1,430,002
PI loans with subsequent credit deterioration	4,995		7,323		11,103		59,989		919		84,329
PI loans with no credit deterioration	—		421		2,814		—		—		3,235
Total loans	$	152,306	$	107,002	$	687,554	$	489,113	$	107,820	$	1,543,795

Summary of Troubled Debt Restructurings

The following tables present a breakdown of troubled debt restructurings that were restructured during the three and six months ended June 30, 2016 and June 30, 2015, respectively, segregated by portfolio segment:

	For Three Months Ended June 30, 2016					For Three Months Ended June 30, 2015
		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	—	$	—	$	—	—	$	—	$	—
Real estate - construction	—	—		—		1	370		370
Real estate - mortgage:
1-4 family residential	1	47		47		1	446		446
Commercial	1	100		100		—	—		—
Consumer	—	—		—		—	—		—
Total	2	$	147	$	147	2	$	816	$	816

	For Six Months Ended June 30, 2016					For Six Months Ended June 30, 2015
		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	—	$	—	$	—	—	$	—	$	—
Real estate - construction	2	307		332		1	370		370
Real estate - mortgage:
1-4 family residential	1	47		47		1	446		446
Commercial	1	100		100		—	—		—
Consumer	—	—		—		—	—		—
Total	4	$	454	$	479	2	$	816	$	816