Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 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 September 30,						Nine months ended September 30,
	2019			2018			2019			2018
	(in thousands)
Allowance for loan losses, beginning of period	$	29,070		$	27,144		$	28,543		$	26,255
Loans charged off		(118	)		(89	)		(336	)		(247	)
Recoveries on loans previously charged-off		70			1,490			190			1,637
Net recoveries (charge-offs)		(48	)		1,401			(146	)		1,390
Provision charged to expense		75			—			700			900
Allowance for loan losses, end of period	$	29,097		$	28,545		$	29,097		$	28,545

Summary of Allowance for Loan Losses

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2019 is as 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 June 30, 2019	$	1,052		$	11,338		$	1,832	$	10,848	$	2,210		$	380		$	1,120		$	290	$	29,070
Charge-offs		—			(57	)		—		—		—			(61	)		—			—		(118	)
Recoveries		—			23			—		—		—			47			—			—		70
Provision		(752	)		9			751		53		(24	)		(84	)		(33	)		155		75
Ending balance at September 30, 2019	$	300		$	11,313		$	2,583	$	10,901	$	2,186		$	282		$	1,087		$	445	$	29,097
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	2		$	—	$	86	$	—		$	—		$	—		$	—	$	88
Amount of allowance for loan losses for loans not deemed to be impaired	$	300		$	11,311		$	2,583	$	10,815	$	2,186		$	282		$	1,087		$	445	$	29,009
Loans:
Ending balance	$	7,824		$	783,950		$	121,802	$	765,385	$	364,317		$	21,748		$	310,635		$	—	$	2,375,661
Loans deemed to be impaired	$	—		$	203		$	—	$	2,373	$	—		$	—		$	—		$	—	$	2,576
Loans not deemed to be impaired	$	7,824		$	783,747		$	121,802	$	763,012	$	364,317		$	21,748		$	310,635		$	—	$	2,373,085

Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2019 is as 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		—			(108	)		—		—		—			(228	)		—			—		(336	)
Recoveries		—			49			—		—		—			141			—			—		190
Provision		(792	)		374			745		238		(4	)		4			(24	)		159		700
Ending balance at September 30, 2019	$	300		$	11,313		$	2,583	$	10,901	$	2,186		$	282		$	1,087		$	445	$	29,097
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	2		$	—	$	86	$	—		$	—		$	—		$	—	$	88
Amount of allowance for loan losses for loans not deemed to be impaired	$	300		$	11,311		$	2,583	$	10,815	$	2,186		$	282		$	1,087		$	445	$	29,009
Loans:
Ending balance	$	7,824		$	783,950		$	121,802	$	765,385	$	364,317		$	21,748		$	310,635		$	—	$	2,375,661
Loans deemed to be impaired	$	—		$	203		$	—	$	2,373	$	—		$	—		$	—		$	—	$	2,576
Loans not deemed to be impaired	$	7,824		$	783,747		$	121,802	$	763,012	$	364,317		$	21,748		$	310,635		$	—	$	2,373,085

Further information pertaining to the allowance for loan losses for the three months ending September 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 June 30, 2018	$	633		$	10,384		$	1,704	$	10,209	$	2,493		$	336		$	1,078		$	307		$	27,144
Charge-offs		—			(11	)		—		—		—			(78	)		—			—			(89	)
Recoveries		1,432			16			—		—		—			42			—			—			1,490
Provision		(1,155	)		895			84		415		(182	)		32			(28	)		(61	)		—
Ending balance at September 30, 2018	$	910		$	11,284		$	1,788	$	10,624	$	2,311		$	332		$	1,050		$	246		$	28,545
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	93		$	—	$	95	$	350		$	—		$	—		$	—		$	538
Amount of allowance for loan losses for loans not deemed to be impaired	$	910		$	11,191		$	1,788	$	10,529	$	1,961		$	332		$	1,050		$	246		$	28,007
Loans:
Ending balance	$	12,434		$	783,960		$	94,532	$	730,265	$	335,114		$	21,216		$	283,818		$	—		$	2,261,339
Loans deemed to be impaired	$	—		$	660		$	—	$	2,680	$	2,675		$	—		$	—		$	—		$	6,015
Loans not deemed to be impaired	$	12,434		$	783,300		$	94,532	$	727,585	$	332,439		$	21,216		$	283,818		$	—		$	2,255,324

Further information pertaining to the allowance for loan losses for the nine months ending September 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, 2017	$	1,645		$	9,651		$	1,720	$	9,728	$	1,873	$	373		$	989	$	276		$	26,255
Charge-offs		—			(16	)		—		—		—		(231	)		—		—			(247	)
Recoveries		1,432			49			—		—		—		156			—		—			1,637
Provision		(2,167	)		1,600			68		896		438		34			61		(30	)		900
Ending balance at September 30, 2018	$	910		$	11,284		$	1,788	$	10,624	$	2,311	$	332		$	1,050	$	246		$	28,545
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	93		$	—	$	95	$	350	$	—		$	—	$	—		$	538
Amount of allowance for loan losses for loans not deemed to be impaired	$	910		$	11,191		$	1,788	$	10,529	$	1,961	$	332		$	1,050	$	246		$	28,007
Loans:
Ending balance	$	12,434		$	783,960		$	94,532	$	730,265	$	335,114	$	21,216		$	283,818	$	—		$	2,261,339
Loans deemed to be impaired	$	—		$	660		$	—	$	2,680	$	2,675	$	—		$	—	$	—		$	6,015
Loans not deemed to be impaired	$	12,434		$	783,300		$	94,532	$	727,585	$	332,439	$	21,216		$	283,818	$	—		$	2,255,324

Loans by Risk Rating

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

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	7,824	$	779,722	$	121,802	$	738,459
4 (Monitor)		—		4,025		—		24,553
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		203		—		2,373
Total	$	7,824	$	783,950	$	121,802	$	765,385

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 September 30, 2019 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	497,124	$	54,495	$	40,759	$	592,378
A1 – A3		187,970		7,479		148,735		344,184
Baa1 – Baa3		—		51,133		122,288		173,421
Ba2		—		5,895		—		5,895
Total	$	685,094	$	119,002	$	311,782	$	1,115,878

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 September 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	$	—	$	—	$	—	$	—	$	7,824	$	7,824
Commercial and industrial		108		19		—		127		783,823		783,950
Municipal		—		—		—		—		121,802		121,802
Commercial real estate		155		167		—		322		765,063		765,385
Residential real estate		1,129		334		—		1,463		362,854		364,317
Consumer and overdrafts		15		—		—		15		21,733		21,748
Home equity		1,050		546		—		1,596		309,039		310,635
Total	$	2,457	$	1,066	$	—	$	3,523	$	2,372,138	$	2,375,661

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 September 30, 2019:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/19		Interest Income Recognized for 3 Months Ending 9/30/19		Average Carrying Value for 9 Months Ending 9/30/19		Interest Income Recognized for 9 Months Ending 9/30/19
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		87		306		—		89		2		87		6
Municipal		—		—		—		—		—		—		—
Commercial real estate		167		194		—		729		—		529		—
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	254	$	500	$	—	$	818	$	2	$	616	$	6
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		116		116		2		310		2		299		6
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,206		2,326		86		2,140		23		2,350		67
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	2,322	$	2,442	$	88	$	2,450	$	25	$	2,649	$	73
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		203		422		2		399		4		386		12
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,373		2,520		86		2,869		23		2,879		67
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	2,576	$	2,942	$	88	$	3,268	$	27	$	3,265	$	79

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

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/18		Interest Income Recognized for 3 Months Ending 9/30/18		Average Carrying Value for 9 Months Ending 9/30/18		Interest Income Recognized for 9 Months Ending 9/30/18
	(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		84		282		—		56		—		47		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		196		219		—		280		—		267		—
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	280	$	501	$	—	$	336	$	—	$	314	$	—
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		576		593		93		589		5		490		14
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,484		2,597		95		2,262		24		2,278		71
Residential real estate		2,675		2,675		350		2,675		—		3,136		80
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	5,735	$	5,865	$	538	$	5,526	$	29	$	5,904	$	165
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		660		875		93		645		5		537		14
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,680		2,816		95		2,542		24		2,545		71
Residential real estate		2,675		2,675		350		2,675		—		3,136		80
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	6,015	$	6,366	$	538	$	5,862	$	29	$	6,218	$	165