Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2017

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,
	2017			2016			2017			2016
	(in thousands)
Allowance for loan losses, beginning of period	$	24,827		$	23,544		$	24,406		$	23,075
Adjustment		—			(84	)		—			(84	)
Loans charged off		(100	)		(111	)		(197	)		(180	)
Recoveries on loans previously charged-off		72			164			190			252
Net (charge-offs) / recoveries		(28	)		53			(7	)		72
Provision charged to expense		490			350			890			800
Allowance for loan losses, end of period	$	25,289		$	23,863		$	25,289		$	23,863

Summary of Allowance for Loan Losses

Further information pertaining to the allowance for loan losses for the three months ending June 30, 2017 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, 2017	$	873	$	7,369		$	1,899		$	11,216		$	1,671	$	452		$	1,050	$	297		$	24,827
Charge-offs		—		(29	)		—			—			—		(71	)		—		—			(100	)
Recoveries		—		34			—			—			—		38			—		—			72
Provision		264		189			(40	)		(188	)		447		(224	)		96		(54	)		490
Ending balance at June 30, 2017	$	1,137	$	7,563		$	1,859		$	11,028		$	2,118	$	195		$	1,146	$	243		$	25,289
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	11		$	—		$	120		$	69	$	—		$	—	$	—		$	200
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,137	$	7,552		$	1,859		$	10,908		$	2,049	$	195		$	1,146	$	243		$	25,089
Loans:
Ending balance	$	14,159	$	650,542		$	127,259		$	736,603		$	264,744	$	11,218		$	229,274	$	—		$	2,033,799
Loans deemed to be impaired	$	—	$	365		$	—		$	2,603		$	4,343	$	—		$	—	$	—		$	7,311
Loans not deemed to be impaired	$	14,159	$	650,177		$	127,259		$	734,000		$	260,401	$	11,218		$	229,274	$	—		$	2,026,488

Further information pertaining to the allowance for loan losses for the six months ending June 30, 2017 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, 2016	$	1,012	$	6,972		$	1,612	$	11,135		$	1,698	$	582		$	1,102	$	293		$	24,406
Charge-offs		—		(29	)		—		—			—		(168	)		—		—			(197	)
Recoveries		—		54			—		—			2		134			—		—			190
Provision		125		566			247		(107	)		418		(353	)		44		(50	)		890
Ending balance at June 30, 2017	$	1,137	$	7,563		$	1,859	$	11,028		$	2,118	$	195		$	1,146	$	243		$	25,289
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	11		$	—	$	120		$	69	$	—		$	—	$	—		$	200
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,137	$	7,552		$	1,859	$	10,908		$	2,049	$	195		$	1,146	$	243		$	25,089
Loans:
Ending balance	$	14,159	$	650,542		$	127,259	$	736,603		$	264,744	$	11,218		$	229,274	$	—		$	2,033,799
Loans deemed to be impaired	$	—	$	365		$	—	$	2,603		$	4,343	$	—		$	—	$	—		$	7,311
Loans not deemed to be impaired	$	14,159	$	650,177		$	127,259	$	734,000		$	260,401	$	11,218		$	229,274	$	—		$	2,026,488

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

Loans by Risk Rating

The following table presents the Company’s loans by risk rating at June 30, 2017.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	14,159	$	650,177	$	127,259	$	704,531
4 (Monitor)		—		—		—		29,469
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		365		—		2,603
Total	$	14,159	$	650,542	$	127,259	$	736,603

The following table presents the Company’s loans by risk rating at December 31, 2016.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	14,834	$	612,114	$	135,418	$	661,271
4 (Monitor)		—		—		—		31,753
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		94		389		—		3,149
Total	$	14,928	$	612,503	$	135,418	$	696,173

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, 2017 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	341,777	$	66,484	$	45,615	$	453,876
A1 – A3		218,222		8,225		128,927		355,374
Baa1 – Baa3		—		46,970		125,775		172,745
Ba2		—		2,730		—		2,730
Total	$	559,999	$	124,409	$	300,317	$	984,725

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2016.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	334,674	$	66,245	$	6,596	$	407,515
A1 – A3		188,777		33,365		129,423		351,565
Baa1 – Baa3		—		26,970		127,366		154,336
Ba2		—		3,610		—		3,610
Total	$	523,451	$	130,190	$	263,385	$	917,026

Aging of Past Due Loan Losses

Further information pertaining to the allowance for loan losses at June 30, 2017 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	$	—	$	—	$	—	$	—	$	14,159	$	14,159
Commercial and industrial		404		49		—		453		650,089		650,542
Municipal		—		—		—		—		127,259		127,259
Commercial real estate		455		230		—		685		735,918		736,603
Residential real estate		984		735		—		1,719		263,025		264,744
Consumer and overdrafts		6		1		—		7		11,211		11,218
Home equity		1,357		107		—		1,464		227,810		229,274
Total	$	3,206	$	1,122	$	—	$	4,328	$	2,029,471	$	2,033,799

Further information pertaining to the allowance for loan losses at December 31, 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	$	—	$	94	$	—	$	94	$	14,834	$	14,928
Commercial and industrial		37		65		—		102		612,401		612,503
Municipal		—		—		—		—		135,418		135,418
Commercial real estate		597		150		—		747		695,426		696,173
Residential real estate		245		656		—		901		240,456		241,357
Consumer and overdrafts		—		11		—		11		11,686		11,697
Home equity		735		108		—		843		211,014		211,857
Total	$	1,614	$	1,084	$	—	$	2,698	$	1,921,235	$	1,923,933

Information Pertaining to Impaired Loans

The following is information pertaining to impaired loans for June 30, 2017:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 6/30/17		Interest Income Recognized for 3 Months Ending 6/30/17		Average Carrying Value for 6 Months Ending 6/30/17		Interest Income Recognized for 6 Months Ending 6/30/17
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		49		248		—		43		—		43		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		—		—		—		294		—		421		—
Residential real estate		79		169		—		81		2		84		3
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	128	$	417	$	—	$	418	$	2	$	548	$	3
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	69	$	—	$	80	$	—
Commercial and industrial		316		331		11		326		4		332		8
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,603		2,728		120		2,546		24		2,548		48
Residential real estate		4,264		4,265		69		1,145		24		701		25
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,183	$	7,324	$	200	$	4,086	$	52	$	3,661	$	81
Total:
Construction and land development	$	—	$	—	$	—	$	69	$	—	$	80	$	—
Commercial and industrial		365		579		11		369		4		375		8
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,603		2,728		120		2,840		24		2,969		48
Residential real estate		4,343		4,434		69		1,226		26		785		28
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	7,311	$	7,741	$	200	$	4,504	$	54	$	4,209	$	84

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