Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Summary of Changes in Allowance for Loan Losses

The following table summarizes the changes in the Company’s allowance for loan losses for the periods indicated.

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
	(in thousands)
Allowance for loan losses, beginning of period	$	23,544		$	22,529		$	23,075		$	22,318
Loans charged off		(111	)		(403	)		(180	)		(484	)
Recoveries on loans previously charged-off		164			119			252			211
Net recoveries (charge-offs)		53			(284	)		72			(273	)
Provision charged to expense		350			—			800			200
Reclassification to other liabilities*		(84	)		—			(84	)		—
Allowance for loan losses, end of period	$	23,863		$	22,245		$	23,863		$	22,245

* The reclassification relates to allowance for loan losses allocations on unused commitments that have been reclassified to other liabilities.

Summary of Allowance for Loan Losses

The following table summarizes the changes in the Company’s allowance for loan losses for the periods indicated.

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
	(in thousands)
Allowance for loan losses, beginning of period	$	23,544		$	22,529		$	23,075		$	22,318
Loans charged off		(111	)		(403	)		(180	)		(484	)
Recoveries on loans previously charged-off		164			119			252			211
Net recoveries (charge-offs)		53			(284	)		72			(273	)
Provision charged to expense		350			—			800			200
Reclassification to other liabilities*		(84	)		—			(84	)		—
Allowance for loan losses, end of period	$	23,863		$	22,245		$	23,863		$	22,245

* The reclassification relates to allowance for loan losses allocations on unused commitments that have been reclassified to other liabilities.

Further information pertaining to the allowance for loan losses for the three months ending June 30, 2016 follows:

	Construction and Land Development			Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated		Total
	(in thousands)
Allowance for loan losses:
Balance at March 31, 2016	$	1,973		$	6,693		$	990	$	10,533		$	1,249		$	693		$	1,185		$	228	$	23,544
Charge-offs		—			—			—		—			—			(111	)		—			—		(111	)
Recoveries		—			56			—		—			2			106			—			—		164
Provision		264			(878	)		811		128			53			(77	)		9			40		350
Reclassification to other liabilities		(3	)		(29	)		—		(11	)		(2	)		(3	)		(36	)		—		(84	)
Ending balance at June 30, 2016	$	2,234		$	5,842		$	1,801	$	10,650		$	1,302		$	608		$	1,158		$	268	$	23,863
Amount of allowance for loan losses for loans deemed to be impaired	$	6		$	10		$	—	$	151		$	7		$	—		$	—		$	—	$	174
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,228		$	5,832		$	1,801	$	10,499		$	1,295		$	608		$	1,158		$	268	$	23,689
Loans:
Ending balance	$	31,178		$	493,033		$	134,386	$	728,658		$	219,494		$	11,339		$	183,816		$	—	$	1,801,904
Loans deemed to be impaired	$	96		$	410		$	—	$	3,736		$	215		$	—		$	—		$	—	$	4,457
Loans not deemed to be impaired	$	31,082		$	492,623		$	134,386	$	724,922		$	219,279		$	11,339		$	183,816		$	—	$	1,797,447

Further information pertaining to the allowance for loan losses for the six months ending June 30, 2016 follows:

		Construction and Land Development			Commercial and Industrial			Municipal		Commercial Real Estate			Residential Real Estate			Consumer			Home Equity			Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2015	$	2,041		$	5,899		$	994	$	10,589		$	1,320		$	644		$	1,077		$	511		$	23,075
Charge-offs		—			—			—		—			—			(180	)		—			—			(180	)
Recoveries		—			91			—		—			3			158			—			—			252
Provision		196			(119	)		807		72			(19	)		(11	)		117			(243	)		800
Reclassification to other liabilities		(3	)		(29	)		—		(11	)		(2	)		(3	)		(36	)		—			(84	)
Ending balance at June 30, 2016	$	2,234		$	5,842		$	1,801	$	10,650		$	1,302		$	608		$	1,158		$	268		$	23,863
Amount of allowance for loan losses for loans deemed to be impaired	$	6		$	10		$	—	$	151		$	7		$	—		$	—		$	—		$	174
Amount of allowance for loan losses for loans not deemed to be impaired	$	2,228		$	5,832		$	1,801	$	10,499		$	1,295		$	608		$	1,158		$	268		$	23,689
Loans:
Ending balance	$	31,178		$	493,033		$	134,386	$	728,658		$	219,494		$	11,339		$	183,816		$	—		$	1,801,904
Loans deemed to be impaired	$	96		$	410		$	—	$	3,736		$	215		$	—		$	—		$	—		$	4,457
Loans not deemed to be impaired	$	31,082		$	492,623		$	134,386	$	724,922		$	219,279		$	11,339		$	183,816		$	—		$	1,797,447

Further information pertaining to the allowance for loan losses for the three months ending June 30, 2015 follows:

		Construction and Land Development			Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity		Unallocated			Total
	(in thousands)
Allowance for loan losses:
Balance at March 31, 2015	$	1,884		$	4,645		$	1,373		$	11,127		$	799		$	714		$	614	$	1,373		$	22,529
Charge-offs		—			(52	)		—			(298	)		—			(53	)		—		—			(403	)
Recoveries		—			56			—			2			2			59			—		—			119
Provision		(151	)		(221	)		(373	)		892			(79	)		(11	)		36		(93	)		—
Ending balance at June 30, 2015	$	1,733		$	4,428		$	1,000		$	11,723		$	722		$	709		$	650	$	1,280		$	22,245
Amount of allowance for loan losses for loans deemed to be impaired	$	12		$	43		$	—		$	108		$	41		$	—		$	91	$	—		$	295
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,721		$	4,385		$	1,000		$	11,615		$	681		$	709		$	559	$	1,280		$	21,950
Loans:
Ending balance	$	26,521		$	291,142		$	87,241		$	713,770		$	248,103		$	10,646		$	167,271	$	—		$	1,544,694
Loans deemed to be impaired	$	101		$	595		$	—		$	1,705		$	941		$	—		$	91	$	—		$	3,433
Loans not deemed to be impaired	$	26,420		$	290,547		$	87,241		$	712,065		$	247,162		$	10,646		$	167,180	$	—		$	1,541,261

Further information pertaining to the allowance for loan losses for the six months ending June 30, 2015 follows:

		Construction and Land Development		Commercial and Industrial			Municipal			Commercial Real Estate			Residential Real Estate			Consumer			Home Equity		Unallocated		Total
	(in thousands)
Allowance for loan losses:
Balance at December 31, 2104	$	1,592	$	4,758		$	1,488		$	11,199		$	775		$	810		$	599	$	1,097	$	22,318
Charge-offs		—		(52	)		—			(298	)		—			(134	)		—		—		(484	)
Recoveries		—		71			—			4			4			132			—		—		211
Provision		141		(349	)		(488	)		818			(57	)		(99	)		51		183		200
Ending balance at June 30, 2015	$	1,733	$	4,428		$	1,000		$	11,723		$	722		$	709		$	650	$	1,280	$	22,245
Amount of allowance for loan losses for loans deemed to be impaired	$	12	$	43		$	—		$	108		$	41		$	—		$	91	$	—	$	295
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,721	$	4,385		$	1,000		$	11,615		$	681		$	709		$	559	$	1,280	$	21,950
Loans:
Ending balance	$	26,521	$	291,142		$	87,241		$	713,770		$	248,103		$	10,646		$	167,271	$	—	$	1,544,694
Loans deemed to be impaired	$	101	$	595		$	—		$	1,705		$	941		$	—		$	91	$	—	$	3,433
Loans not deemed to be impaired	$	26,420	$	290,547		$	87,241		$	712,065		$	247,162		$	10,646		$	167,180	$	—	$	1,541,261

Loans by Risk Rating

The following table presents the Company’s loans by risk rating at June 30, 2016.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	24,048	$	492,623	$	134,386	$	724,735
4 (Monitor)		7,034		—		—		187
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		96		410		—		3,736
Total	$	31,178	$	493,033	$	134,386	$	728,658

The following table presents the Company’s loans by risk rating at December 31, 2015.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	20,281	$	451,774	$	85,685	$	718,911
4 (Monitor)		7,042		18		—		917
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		98		443		—		1,678
Total	$	27,421	$	452,235	$	85,685	$	721,506

Loans by Credit Ratings Issued by National Organizations

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at June 30, 2016.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	282,048	$	68,806	$	7,074	$	357,928
A1 – A3		140,324		7,400		130,152		277,876
Baa1 – Baa3		—		53,520		166,105		219,625
Ba2		—		3,610		—		3,610
Total	$	422,372	$	133,336	$	303,331	$	859,039

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2015.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	234,733	$	63,865	$	7,547	$	306,145
A1 – A3		140,419		7,400		130,872		278,691
Baa1 – Baa3		—		8,890		167,489		176,379
Ba2		—		4,480		—		4,480
Total	$	375,152	$	84,635	$	305,908	$	765,695

Aging of Past Due Loan Losses

Further information pertaining to the allowance for loan losses at June 30, 2016 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	96	$	—	$	96	$	31,082	$	31,178
Commercial and industrial		470		52		—		522		492,511		493,033
Municipal		—		—		—		—		134,386		134,386
Commercial real estate		1,080		162		—		1,242		727,416		728,658
Residential real estate		736		844		—		1,580		217,914		219,494
Consumer and overdrafts		1		3		—		4		11,335		11,339
Home equity		359		329		—		688		183,128		183,816
Total	$	2,646	$	1,486	$	—	$	4,132	$	1,797,772	$	1,801,904

Further information pertaining to the allowance for loan losses at December 31, 2015 follows:

	Accruing 30-89 Days Past Due		Non Accrual		Accruing Greater than 90 Days		Total Past Due		Current Loans		Total
	(in thousands)
Construction and land development	$	—	$	99	$	—	$	99	$	27,322	$	27,421
Commercial and industrial		—		60		—		60		452,175		452,235
Municipal		—		—		—		—		85,685		85,685
Commercial real estate		1,462		174		—		1,636		719,870		721,506
Residential real estate		596		1,559		—		2,155		253,191		255,346
Consumer and overdrafts		6		—		—		6		11,317		11,323
Home equity		628		444		—		1,072		176,948		178,020
Total	$	2,692	$	2,336	$	—	$	5,028	$	1,726,508	$	1,731,536

Information Pertaining to Impaired Loans

The following is information pertaining to impaired loans for June 30, 2016:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 6/30/16		Interest Income Recognized for 3 Months Ending 6/30/16		Average Carrying Value for 6 Months Ending 6/30/16		Interest Income Recognized for 6 Months Ending 6/30/16
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		52		239		—		54		—		56		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		596		596		—		329		16		188		22
Residential real estate		103		190		—		106		2		108		4
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	751	$	1,025	$	—	$	489	$	18	$	352	$	26
With required reserve recorded:
Construction and land development	$	96	$	108	$	6	$	97	$	—	$	97	$	—
Commercial and industrial		358		373		10		370		5		374		9
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,140		3,239		151		2,030		20		1,878		33
Residential real estate		112		112		7		283		1		505		3
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		22		—		51		—
Total	$	3,706	$	3,832	$	174	$	2,802	$	26	$	2,905	$	45
Total:
Construction and land development	$	96	$	108	$	6	$	97	$	—	$	97	$	—
Commercial and industrial		410		612		10		424		5		430		9
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,736		3,835		151		2,359		36		2,066		55
Residential real estate		215		302		7		389		3		613		7
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		22		—		51		—
Total	$	4,457	$	4,857	$	174	$	3,291	$	44	$	3,257	$	71

The following is information pertaining to impaired loans for June 30, 2015:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 6/30/15		Interest Income Recognized for 3 Months Ending 6/30/15		Average Carrying Value for 6 Months Ending 6/30/15		Interest Income Recognized for 6 Months Ending 6/30/15
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		32		32		—		47		—		40		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		—		—		—		196		—		280		—
Residential real estate		126		210		—		129		2		131		4
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	158	$	242	$	—	$	372	$	2	$	451	$	4
With required reserve recorded:
Construction and land development	$	101	$	108	$	12	$	102	$	—	$	102	$	—
Commercial and industrial		563		765		43		644		5		722		11
Municipal		—		—		—		—		—		—		—
Commercial real estate		1,705		1,801		108		2,809		17		3,286		33
Residential real estate		815		815		41		817		1		820		7
Consumer		—		—		—		—		—		—		—
Home equity		91		91		91		91		—		92		—
Total	$	3,275	$	3,580	$	295	$	4,463	$	23	$	5,022	$	51
Total:
Construction and land development	$	101	$	108	$	12	$	102	$	—	$	102	$	—
Commercial and industrial		595		797		43		691		5		762		11
Municipal		—		—		—		—		—		—		—
Commercial real estate		1,705		1,801		108		3,005		17		3,566		33
Residential real estate		941		1,025		41		946		3		951		11
Consumer		—		—		—		—		—		—		—
Home equity		91		91		91		91		—		92		—
Total	$	3,433	$	3,822	$	295	$	4,835	$	25	$	5,473	$	55