Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Analysis of the 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,
	2019			2018			2019			2018
	(in thousands)
Allowance for loan losses, beginning of period	$	28,848		$	26,695		$	28,543		$	26,255
Loans charged off		(75	)		(72	)		(218	)		(159	)
Recoveries on loans previously charged-off		47			71			120			148
Net recoveries (charge-offs)		(28	)		(1	)		(98	)		(11	)
Provision charged to expense		250			450			625			900
Allowance for loan losses, end of period	$	29,070		$	27,144		$	29,070		$	27,144

Summary of Allowance for Loan Losses

Further information pertaining to the allowance for loan losses for the three months ending June 30, 2019 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, 2019	$	1,011	$	11,156		$	1,998		$	10,767	$	2,135	$	342		$	1,101	$	338		$	28,848
Charge-offs		—		(8	)		—			—		—		(67	)		—		—			(75	)
Recoveries		—		7			—			—		—		40			—		—			47
Provision		41		183			(166	)		81		75		65			19		(48	)		250
Ending balance at June 30, 2019	$	1,052	$	11,338		$	1,832		$	10,848	$	2,210	$	380		$	1,120	$	290		$	29,070
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	248		$	—		$	85	$	—	$	—		$	—	$	—		$	333
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,052	$	11,090		$	1,832		$	10,763	$	2,210	$	380		$	1,120	$	290		$	28,737
Loans:
Ending balance	$	13,751	$	764,492		$	95,682		$	758,242	$	346,585	$	22,609		$	311,210	$	—		$	2,312,571
Loans deemed to be impaired	$	—	$	548		$	—		$	3,365	$	—	$	—		$	—	$	—		$	3,913
Loans not deemed to be impaired	$	13,751	$	763,944		$	95,682		$	754,877	$	346,585	$	22,609		$	311,210	$	—		$	2,308,658

Further information pertaining to the allowance for loan losses for the six months ending June 30, 2019 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, 2018	$	1,092		$	10,998		$	1,838		$	10,663	$	2,190	$	365		$	1,111	$	286	$	28,543
Charge-offs		—			(51	)		—			—		—		(167	)		—		—		(218	)
Recoveries		—			25			—			—		—		95			—		—		120
Provision		(40	)		366			(6	)		185		20		87			9		4		625
Ending balance at June 30, 2019	$	1,052		$	11,338		$	1,832		$	10,848	$	2,210	$	380		$	1,120	$	290	$	29,070
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	248		$	—		$	85	$	—	$	—		$	—	$	—	$	333
Amount of allowance for loan losses for loans not deemed to be impaired	$	1,052		$	11,090		$	1,832		$	10,763	$	2,210	$	380		$	1,120	$	290	$	28,737
Loans:
Ending balance	$	13,751		$	764,492		$	95,682		$	758,242	$	346,585	$	22,609		$	311,210	$	—	$	2,312,571
Loans deemed to be impaired	$	—		$	548		$	—		$	3,365	$	—	$	—		$	—	$	—	$	3,913
Loans not deemed to be impaired	$	13,751		$	763,944		$	95,682		$	754,877	$	346,585	$	22,609		$	311,210	$	—	$	2,308,658

Further information pertaining to the allowance for loan losses for the three months ending June 30, 2018 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, 2018	$	1,438		$	9,664	$	1,720		$	9,787	$	2,459	$	321		$	1,067	$	239	$	26,695
Charge-offs		—			—		—			—		—		(72	)		—		—		(72	)
Recoveries		—			10		—			—		—		61			—		—		71
Provision		(805	)		710		(16	)		422		34		26			11		68		450
Ending balance at June 30, 2018	$	633		$	10,384	$	1,704		$	10,209	$	2,493	$	336		$	1,078	$	307	$	27,144
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	47	$	—		$	91	$	575	$	—		$	—	$	—	$	713
Amount of allowance for loan losses for loans not deemed to be impaired	$	633		$	10,337	$	1,704		$	10,118	$	1,918	$	336		$	1,078	$	307	$	26,431
Loans:
Ending balance	$	7,729		$	761,467	$	103,027		$	735,083	$	316,248	$	21,662		$	276,397	$	—	$	2,221,613
Loans deemed to be impaired	$	—		$	592	$	—		$	2,505	$	2,675	$	—		$	—	$	—	$	5,772
Loans not deemed to be impaired	$	7,729		$	760,875	$	103,027		$	732,578	$	313,573	$	21,662		$	276,397	$	—	$	2,215,841

Further information pertaining to the allowance for loan losses for the six months ending June 30, 2018 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, 2107	$	1,645		$	9,651		$	1,720		$	9,728	$	1,873	$	373		$	989	$	276	$	26,255
Charge-offs		—			(5	)		—			—		—		(154	)		—		—		(159	)
Recoveries		—			33			—			—		—		115			—		—		148
Provision		(1,012	)		705			(16	)		481		620		2			89		31		900
Ending balance at June 30, 2018	$	633		$	10,384		$	1,704		$	10,209	$	2,493	$	336		$	1,078	$	307	$	27,144
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	47		$	—		$	91	$	575	$	—		$	—	$	—	$	713
Amount of allowance for loan losses for loans not deemed to be impaired	$	633		$	10,337		$	1,704		$	10,118	$	1,918	$	336		$	1,078	$	307	$	26,431
Loans:
Ending balance	$	7,729		$	761,467		$	103,027		$	735,083	$	316,248	$	21,662		$	276,397	$	—	$	2,221,613
Loans deemed to be impaired	$	—		$	592		$	—		$	2,505	$	2,675	$	—		$	—	$	—	$	5,772
Loans not deemed to be impaired	$	7,729		$	760,875		$	103,027		$	732,578	$	313,573	$	21,662		$	276,397	$	—	$	2,215,841

Loans by Risk Rating

The following table presents the Company’s loans by risk rating at June 30, 2019.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,751	$	759,919	$	95,682	$	730,131
4 (Monitor)		—		4,025		—		24,746
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		548		—		3,365
Total	$	13,751	$	764,492	$	95,682	$	758,242

The following table presents the Company’s loans by risk rating at December 31, 2018.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	13,628	$	757,089	$	97,290	$	723,170
4 (Monitor)		—		4,135		—		24,542
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		401		—		2,650
Total	$	13,628	$	761,625	$	97,290	$	750,362

Loans by Credit Rating

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at June 30, 2019 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	482,138	$	53,532	$	41,016	$	576,686
A1 – A3		188,195		7,480		150,687		346,362
Baa1 – Baa3		—		26,970		120,048		147,018
Ba2		—		5,900		—		5,900
Total	$	670,333	$	93,882	$	311,751	$	1,075,966

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2018.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	491,247	$	54,105	$	42,790	$	588,142
A1 – A3		172,472		7,605		151,381		331,458
Baa1 – Baa3		—		26,970		118,197		145,167
Ba2		—		6,810		—		6,810
Total	$	663,719	$	95,490	$	312,368	$	1,071,577

Aging of Past Due Loan Losses

Further information pertaining to the allowance for loan losses at June 30, 2019 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	$	—	$	—	$	—	$	—	$	13,751	$	13,751
Commercial and industrial		173		258		—		431		764,061		764,492
Municipal		—		—		—		—		95,682		95,682
Commercial real estate		158		1,140		—		1,298		756,944		758,242
Residential real estate		1,906		518		—		2,424		344,161		346,585
Consumer and overdrafts		7		2		—		9		22,600		22,609
Home equity		1,239		981		—		2,220		308,990		311,210
Total	$	3,483	$	2,899	$	—	$	6,382	$	2,306,189	$	2,312,571

Further information pertaining to the allowance for loan losses at December 31, 2018 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	$	—	$	—	$	—	$	—	$	13,628	$	13,628
Commercial and industrial		187		115		—		302		761,323		761,625
Municipal		—		—		—		—		97,290		97,290
Commercial real estate		774		190		—		964		749,398		750,362
Residential real estate		2,554		569		—		3,123		345,127		348,250
Consumer and overdrafts		24		14		—		38		22,045		22,083
Home equity		1,108		425		—		1,533		290,807		292,340
Total	$	4,647	$	1,313	$	—	$	5,960	$	2,279,618	$	2,285,578

Information Pertaining to Impaired Loans

The following is information pertaining to impaired loans for June 30, 2019:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 6/30/19		Interest Income Recognized for 3 Months Ending 6/30/19		Average Carrying Value for 6 Months Ending 6/30/19		Interest Income Recognized for 6 Months Ending 6/30/19
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		78		283		—		83		1		84		2
Municipal		—		—		—		—		—		—		—
Commercial real estate		1,441		1,585		—		812		5		545		11
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	1,519	$	1,868	$	—	$	895	$	6	$	629	$	13
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		470		470		248		349		3		317		6
Municipal		—		—		—		—		—		—		—
Commercial real estate		1,924		1,924		85		2,213		17		2,409		34
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	2,394	$	2,394	$	333	$	2,562	$	20	$	2,726	$	40
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		548		753		248		432		4		401		8
Municipal		—		—		—		—		—		—		—
Commercial real estate		3,365		3,509		85		3,025		22		2,954		45
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	3,913	$	4,262	$	333	$	3,457	$	26	$	3,355	$	53

The following is information pertaining to impaired loans for June 30, 2018:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 6/30/18		Interest Income Recognized for 3 Months Ending 6/30/18		Average Carrying Value for 6 Months Ending 6/30/18		Interest Income Recognized for 6 Months Ending 6/30/18
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		162		366		—		170		—		170		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		524		658		—		528		—		534		—
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	686	$	1,024	$	—	$	698	$	—	$	704	$	—
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		430		430		47		431		7		433		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		1,981		1,981		91		1,985		40		1,992		63
Residential real estate		2,675		2,675		575		2,675		10		2,675		16
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	5,086	$	5,086	$	713	$	5,091	$	57	$	5,100	$	91
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		592		796		47		601		7		603		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,505		2,639		91		2,513		40		2,526		63
Residential real estate		2,675		2,675		575		2,675		10		2,675		16
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	5,772	$	6,110	$	713	$	5,789	$	57	$	5,804	$	91