Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2021

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,
	2021			2020			2021			2020
	(in thousands)						(in thousands)
Allowance for loan losses, beginning of period	$	34,949		$	32,516		$	35,486		$	29,585
Loans charged off		(38	)		(41	)		(134	)		(120	)
Recoveries on loans previously charged-off		53			19			162			254
Net recoveries (charge-offs)		15			(22	)		28			134
(Credit) provision charged to expense		(200	)		900			(750	)		3,675
Allowance for loan losses, end of period	$	34,764		$	33,394		$	34,764		$	33,394

Summary of Allowance for Loan Losses

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2021 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, 2021	$	220		$	16,502	$	2,817		$	11,708		$	2,029		$	204		$	957		$	512		$	34,949
Charge-offs		—			—		—			—			—			(38	)		—			—			(38	)
Recoveries		—			30		—			—			—			23			—			—			53
Provision		(3	)		1,134		(11	)		(1,137	)		(67	)		10			(58	)		(68	)		(200	)
Ending balance at September 30, 2021	$	217		$	17,666	$	2,806		$	10,571		$	1,962		$	199		$	899		$	444		$	34,764
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	10	$	—		$	71		$	—		$	—		$	—		$	—		$	81
Amount of allowance for loan losses for loans not deemed to be impaired	$	217		$	17,656	$	2,806		$	10,500		$	1,962		$	199		$	899		$	444		$	34,683
Loans:
Ending balance	$	6,358		$	1,321,907	$	138,945		$	729,384		$	466,109		$	19,549		$	243,225		$	—		$	2,925,477
Loans deemed to be impaired	$	—		$	77	$	—		$	2,239		$	—		$	—		$	—		$	—		$	2,316
Loans not deemed to be impaired	$	6,358		$	1,321,830	$	138,945		$	727,145		$	466,109		$	19,549		$	243,225		$	—		$	2,923,161

Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2021 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, 2020	$	429		$	16,713	$	2,804	$	11,751		$	2,111		$	241		$	1,208		$	229	$	35,486
Charge-offs		—			—		—		—			—			(134	)		—			—		(134	)
Recoveries		—			35		—		—			—			127			—			—		162
Provision		(212	)		918		2		(1,180	)		(149	)		(35	)		(309	)		215		(750	)
Ending balance at September 30, 2021	$	217		$	17,666	$	2,806	$	10,571		$	1,962		$	199		$	899		$	444	$	34,764
Amount of allowance for loan losses for loans deemed to be impaired	$	—		$	10	$	—	$	71		$	—		$	—		$	—		$	—	$	81
Amount of allowance for loan losses for loans not deemed to be impaired	$	217		$	17,656	$	2,806	$	10,500		$	1,962		$	199		$	899		$	444	$	34,683
Loans:
Ending balance	$	6,358		$	1,321,907	$	138,945	$	729,384		$	466,109		$	19,549		$	243,225		$	—	$	2,925,477
Loans deemed to be impaired	$	—		$	77	$	—	$	2,239		$	—		$	—		$	—		$	—	$	2,316
Loans not deemed to be impaired	$	6,358		$	1,321,830	$	138,945	$	727,145		$	466,109		$	19,549		$	243,225		$	—	$	2,923,161

Further information pertaining to the allowance for loan losses for the three months ending September 30, 2020 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, 2020	$	289	$	13,121		$	2,868		$	11,303		$	3,094		$	289		$	1,465		$	87	$	32,516
Charge-offs		—		(20	)		—			—			—			(21	)		—			—		(41	)
Recoveries		—		12			—			—			—			7			—			—		19
Provision		76		2,731			(300	)		(522	)		(958	)		35			(200	)		38		900
Ending balance at September 30, 2020	$	365	$	15,844		$	2,568		$	10,781		$	2,136		$	310		$	1,265		$	125	$	33,394
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	12		$	—		$	75		$	—		$	—		$	—		$	—	$	87
Amount of allowance for loan losses for loans not deemed to be impaired	$	365	$	15,832		$	2,568		$	10,706		$	2,136		$	310		$	1,265		$	125	$	33,307
Loans:
Ending balance	$	9,116	$	1,315,407		$	130,047		$	784,895		$	443,703		$	19,866		$	287,099		$	—	$	2,990,133
Loans deemed to be impaired	$	—	$	160		$	—		$	2,675		$	236		$	—		$	—		$	—	$	3,071
Loans not deemed to be impaired	$	9,116	$	1,315,247		$	130,047		$	782,220		$	443,467		$	19,866		$	287,099		$	—	$	2,987,062

Further information pertaining to the allowance for loan losses for the nine months ending September 30, 2020 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, 2019	$	331	$	11,596		$	2,566	$	11,464		$	2,194		$	312		$	1,065	$	57	$	29,585
Charge-offs		—		(31	)		—		—			—			(89	)		—		—		(120	)
Recoveries		—		182			—		—			—			67			5		—		254
Provision		34		4,097			2		(683	)		(58	)		20			195		68		3,675
Ending balance at September 30, 2020	$	365	$	15,844		$	2,568	$	10,781		$	2,136		$	310		$	1,265	$	125	$	33,394
Amount of allowance for loan losses for loans deemed to be impaired	$	—	$	12		$	—	$	75		$	—		$	—		$	—	$	—	$	87
Amount of allowance for loan losses for loans not deemed to be impaired	$	365	$	15,832		$	2,568	$	10,706		$	2,136		$	310		$	1,265	$	125	$	33,307
Loans:
Ending balance	$	9,116	$	1,315,407		$	130,047	$	784,895		$	443,703		$	19,866		$	287,099	$	—	$	2,990,133
Loans deemed to be impaired	$	—	$	160		$	—	$	2,675		$	236		$	—		$	—	$	—	$	3,071
Loans not deemed to be impaired	$	9,116	$	1,315,247		$	130,047	$	782,220		$	443,467		$	19,866		$	287,099	$	—	$	2,987,062

Loans by Risk Rating

The following table presents the Company’s loans by risk rating at September 30, 2021.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	6,358	$	1,317,908	$	138,945	$	704,205
4 (Monitor)		—		3,922		—		22,940
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		77		—		2,239
Total	$	6,358	$	1,321,907	$	138,945	$	729,384

The following table presents the Company’s loans by risk rating at December 31, 2020.

	Construction and Land Development		Commercial and Industrial		Municipal		Commercial Real Estate
	(in thousands)
Grade:
1-3 (Pass)	$	10,909	$	1,309,861	$	137,607	$	761,101
4 (Monitor)		—		3,945		—		23,795
5 (Substandard)		—		—		—		—
6 (Doubtful)		—		—		—		—
Impaired		—		439		—		4,940
Total	$	10,909	$	1,314,245	$	137,607	$	789,836

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, 2021 and are included within the total loan portfolio.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	755,120	$	76,412	$	35,915	$	867,447
A1 – A3		259,913		6,980		70,359		337,252
Baa1 – Baa3		50,000		51,133		144,023		245,156
Ba2		—		4,420		—		4,420
Total	$	1,065,033	$	138,945	$	250,297	$	1,454,275

Credit ratings issued by national organizations were utilized as credit quality indicators as presented in the following table at December 31, 2020.

	Commercial and Industrial		Municipal		Commercial Real Estate		Total
	(in thousands)
Credit Rating:
Aaa – Aa3	$	710,955	$	74,291	$	38,035	$	823,281
A1 – A3		183,123		7,103		145,583		335,809
Baa1 – Baa3		50,000		51,133		140,905		242,038
Ba2		—		5,080		—		5,080
Total	$	944,078	$	137,607	$	324,523	$	1,406,208

Aging of Past Due Loan Losses

Further information pertaining to the allowance for loan losses at September 30, 2021 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	$	—	$	—	$	—	$	—	$	6,358	$	6,358
Commercial and industrial		—		19		—		19		1,321,888		1,321,907
Municipal		—		—		—		—		138,945		138,945
Commercial real estate		1,798		240		—		2,038		727,346		729,384
Residential real estate		773		743		—		1,516		464,593		466,109
Consumer and overdrafts		1		1		—		2		19,547		19,549
Home equity		1,257		315		—		1,572		241,653		243,225
Total	$	3,829	$	1,318	$	—	$	5,147	$	2,920,330	$	2,925,477

Further information pertaining to the allowance for loan losses at December 31, 2020 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	$	—	$	—	$	—	$	—	$	10,909	$	10,909
Commercial and industrial		56		297		90		443		1,313,802		1,314,245
Municipal		—		—		—		—		137,607		137,607
Commercial real estate		—		2,881		—		2,881		786,955		789,836
Residential real estate		390		527		—		917		447,519		448,436
Consumer and overdrafts		21		1		—		22		20,417		20,439
Home equity		1,001		290		—		1,291		273,066		274,357
Total	$	1,468	$	3,996	$	90	$	5,554	$	2,990,275	$	2,995,829

Information Pertaining to Impaired Loans

The following is information pertaining to impaired loans for September 30, 2021:

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/2021		Interest Income Recognized for 3 Months Ending 9/30/2021		Average Carrying Value for 9 Months Ending 9/30/2021		Interest Income Recognized for 9 Months Ending 9/30/2021
		(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		41		—		19		—
Municipal		—		—		—		—		—		—		—
Commercial real estate		239		276		—		245		—		256		—
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	239	$	276	$	—	$	286	$	—	$	275	$	—
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		77		97		10		105		1		262		3
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,000		2,132		71		2,009		21		2,551		62
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	2,077	$	2,229	$	81	$	2,114	$	22	$	2,813	$	65
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		77		97		10		146		1		281		3
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,239		2,408		71		2,254		21		2,807		62
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	2,316	$	2,505	$	81	$	2,400	$	22	$	3,088	$	65

The following is information pertaining to impaired loans for September 30, 2020: 

	Carrying Value		Unpaid Principal Balance		Required Reserve		Average Carrying Value for 3 Months Ending 9/30/2020		Interest Income Recognized for 3 Months Ending 9/30/2020		Average Carrying Value for 9 Months Ending 9/30/2020		Interest Income Recognized for 9 Months Ending 9/30/2020
		(in thousands)
With no required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		67		88		—		73		—		288		2
Municipal		—		—		—		—		—		—		—
Commercial real estate		592		624		—		601		—		365		—
Residential real estate		236		236		—		236		—		118		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	895	$	948	$	—	$	910	$	—	$	771	$	2
With required reserve recorded:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		93		93		12		100		1		95		3
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,083		2,209		75		2,094		21		2,140		65
Residential real estate		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	2,176	$	2,302	$	87	$	2,194	$	22	$	2,235	$	68
Total:
Construction and land development	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial		160		181		12		173		1		383		5
Municipal		—		—		—		—		—		—		—
Commercial real estate		2,675		2,833		75		2,695		21		2,505		65
Residential real estate		236		236		—		236		—		118		—
Consumer		—		—		—		—		—		—		—
Home equity		—		—		—		—		—		—		—
Total	$	3,071	$	3,250	$	87	$	3,104	$	22	$	3,006	$	70