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CREDIT QUALITY ASSESSMENT
 6 Months Ended
Jun. 30, 2018
Credit Quality Assessment [Abstract]  
CREDIT QUALITY ASSESSMENT

Note 5– CREDIT QUALITY ASSESSMENT

Allowance for Loan Losses

Summary information on the allowance for loan loss activity for the period indicated is provided in the following table:

Six Months Ended June 30,
(In thousands)20182017
Balance at beginning of year$45,257$44,067
Provision for loan losses3,7301,516
Loan charge-offs(818)(824)
Loan recoveries324320
Net charge-offs(494)(504)
Balance at period end$48,493$45,079

The following tables provide information on the activity in the allowance for loan losses by the respective loan portfolio segment for the period indicated:

For the Six Months Ended June 30, 2018
Commercial Real EstateResidential Real Estate
Commercial
CommercialCommercialCommercialOwnerResidentialResidential
(Dollars in thousands)BusinessAD&CInvestor R/EOccupied R/EConsumerMortgageConstructionTotal
Balance at beginning of year$8,711$3,501$14,970$7,178$2,383$7,268$1,246$45,257
Provision (credit) 1,0336882,000(740)327(144)5663,730
Charge-offs (378)---(414)(26)-(818)
Recoveries 1296216-713511324
Net recoveries (charge-offs)(249)6216-(343)911(494)
Balance at end of period$9,495$4,251$16,986$6,438$2,367$7,133$1,823$48,493
Total loans$702,939$609,266$1,923,827$1,184,421$525,574$1,106,674$197,372$6,250,073
Allowance for loans losses to total loans ratio1.35%0.70%0.88%0.54%0.45%0.64%0.92%0.78%
Balance of loans specifically evaluated for impairment $7,668$136$5,878$3,440$N/A$1,775$-$18,897
Allowance for loans specifically evaluated for impairment $3,123$-$1,255$125$N/A$-$-$4,503
Specific allowance to specific loans ratio40.73%-21.35%3.63%N/A--23.83%
Balance of loans collectively evaluated$688,133$609,130$1,900,464$1,178,689$524,231$1,104,887$197,372$6,202,906
Allowance for loans collectively evaluated$6,372$4,251$15,731$6,313$2,367$7,133$1,823$43,990
Collective allowance to collective loans ratio0.93%0.70%0.83%0.54%0.45%0.65%0.92%0.71%
Balance of loans acquired with deteriorated credit quality$7,138$-$17,485$2,292$1,343$12$-$28,270
Allowance for loans acquired with deteriorated credit quality$-$-$-$-$-$-$-$-
Allowance to loans acquired with deteriorated credit quality ratio--------

For the Year Ended December 31,2017
Commercial Real EstateResidential Real Estate
Commercial
CommercialCommercialCommercialOwnerResidentialResidential
(Dollars in thousands)BusinessAD&CInvestor R/EOccupied R/EConsumerMortgageConstructionTotal
Balance at beginning of year$7,539$4,652$12,939$7,885$2,828$7,261$963$44,067
Provision (credit) 2,616(1,254)1,930(459)(57)(56)2572,977
Charge-offs (1,538)--(248)(693)(87)-(2,566)
Recoveries 94103101-30515026779
Net recoveries (charge-offs)(1,444)103101(248)(388)6326(1,787)
Balance at end of period$8,711$3,501$14,970$7,178$2,383$7,268$1,246$45,257
Total loans $497,948$292,443$1,112,710$857,196$455,829$921,435$176,687$4,314,248
Allowance for loan losses to total loans ratio1.75%1.20%1.35%0.84%0.52%0.79%0.71%1.05%
Balance of loans specifically evaluated for impairment $8,105$136$5,575$4,078$N/A$2,915$-$20,809
Allowance for loans specifically evaluated for impairment $3,220$-$663$131$N/A$-$-$4,014
Specific allowance to specific loans ratio39.73%-11.89%3.21%N/A--19.29%
Balance of loans collectively evaluated$489,843$292,307$1,107,135$853,118$455,829$918,520$176,687$4,293,439
Allowance for loans collectively evaluated$5,491$3,501$14,307$7,047$2,383$7,268$1,246$41,243
Collective allowance to collective loans ratio1.12%1.20%1.29%0.83%0.52%0.79%0.71%0.96%

The following table provides summary information regarding impaired loans at the dates indicated and for the periods then ended:

(In thousands)June 30, 2018December 31, 2017
Impaired loans with a specific allowance$11,829$11,693
Impaired loans without a specific allowance7,0689,116
Total impaired loans $18,897$20,809
Allowance for loan losses related to impaired loans $4,503$4,014
Allowance for loan losses related to loans collectively evaluated43,99041,243
Total allowance for loan losses $48,493$45,257
Average impaired loans for the period$20,166$23,179
Contractual interest income due on impaired loans during the period$1,298$2,314
Interest income on impaired loans recognized on a cash basis$302$754
Interest income on impaired loans recognized on an accrual basis$64$169

The following tables present the recorded investment with respect to impaired loans, the associated allowance by the applicable portfolio segment and the principal balance of the impaired loans prior to amounts charged-off at the dates indicated:

June 30, 2018
Commercial Real EstateTotal Recorded
CommercialAllInvestment in
CommercialCommercialOwnerOtherImpaired
(In thousands)CommercialAD&CInvestor R/EOccupied R/ELoansLoans
Impaired loans with a specific allowance
Non-accruing$3,493$-$5,157$-$-$8,650
Restructured accruing342----342
Restructured non-accruing2,059--778-2,837
Balance$5,894$-$5,157$778$-$11,829
Allowance$3,123$-$1,255$125$-$4,503
Impaired loans without a specific allowance
Non-accruing$307$-$721$1,101$-$2,129
Restructured accruing443---8781,321
Restructured non-accruing1,024136-1,5618973,618
Balance$1,774$136$721$2,662$1,775$7,068
Total impaired loans
Non-accruing$3,800$-$5,878$1,101$-$10,779
Restructured accruing785---8781,663
Restructured non-accruing3,083136-2,3398976,455
Balance$7,668$136$5,878$3,440$1,775$18,897
Unpaid principal balance in total impaired loans$10,755$1,248$10,476$5,774$2,646$30,899

June 30, 2018
Commercial Real EstateTotal Recorded
CommercialAllInvestment in
CommercialCommercialOwnerOtherImpaired
(In thousands)CommercialAD&CInvestor R/EOccupied R/ELoansLoans
Average impaired loans for the period$7,906$136$5,755$3,842$2,527$20,166
Contractual interest income due on impaired loans during the period$531$184$317$189$77
Interest income on impaired loans recognized on a cash basis$100$-$13$83$106
Interest income on impaired loans recognized on an accrual basis$38$-$-$-$26

December 31, 2017
Commercial Real EstateTotal Recorded
CommercialAllInvestment in
CommercialCommercialOwnerOtherImpaired
(In thousands)CommercialAD&CInvestor R/EOccupied R/ELoansLoans
Impaired loans with a specific allowance
Non-accruing$4,516$-$5,157$-$-$9,673
Restructured accruing1,129----1,129
Restructured non-accruing108--783-891
Balance$5,753$-$5,157$783$-$11,693
Allowance$3,220$-$663$131$-$4,014
Impaired loans without a specific allowance
Non-accruing$391$-$418$1,318$-$2,127
Restructured accruing273--4968901,659
Restructured non-accruing1,688136-1,4812,0255,330
Balance$2,352$136$418$3,295$2,915$9,116
Total impaired loans
Non-accruing$4,907$-$5,575$1,318$-$11,800
Restructured accruing1,402--4968902,788
Restructured non-accruing1,796136-2,2642,0256,221
Balance$8,105$136$5,575$4,078$2,915$20,809
Unpaid principal balance in total impaired loans$11,263$1,248$10,166$6,331$3,681$32,689

December 31, 2017
Commercial Real EstateTotal Recorded
CommercialAllInvestment in
CommercialCommercialOwnerOtherImpaired
(In thousands)CommercialAD&CInvestor R/EOccupied R/ELoansLoans
Average impaired loans for the period$7,903$137$6,835$5,336$2,968$23,179
Contractual interest income due on impaired loans during the period$828$333$669$400$84
Interest income on impaired loans recognized on a cash basis$204$-$24$394$132
Interest income on impaired loans recognized on an accrual basis$111$-$-$26$32

Credit Quality

The following tables provide information on the credit quality of the loan portfolio by segment at the dates indicated:

June 30, 2018
Commercial Real EstateResidential Real Estate
Commercial
CommercialCommercialOwnerResidentialResidential
(In thousands)CommercialAD&CInvestor R/EOccupied R/EConsumerMortgageConstructionTotal
Non-performing loans and assets:
Non-accrual loans (1)$6,883$136$5,878$3,440$4,298$6,251$168$27,054
Loans 90 days past due6--112---118
Restructured loans785----878-1,663
Total non-performing loans7,6741365,8783,5524,2987,12916828,835
Other real estate owned 39365497--1,460-2,361
Total non-performing assets$7,713$501$6,375$3,552$4,298$8,589$168$31,196
(1) Includes $1.4 million of consumer loans acquired from WashingtonFirst considered performing at the Acquisition Date.

December 31, 2017
Commercial Real EstateResidential Real Estate
Commercial
CommercialCommercialOwnerResidentialResidential
(In thousands)CommercialAD&CInvestor R/EOccupied R/EConsumerMortgageConstructionTotal
Non-performing loans and assets:
Non-accrual loans$6,703$136$5,575$3,582$2,967$7,196$177$26,336
Loans 90 days past due-----225-225
Restructured loans1,402--496-890-2,788
Total non-performing loans8,1051365,5754,0782,9678,31117729,349
Other real estate owned 39365-400-1,449-2,253
Total non-performing assets$8,144$501$5,575$4,478$2,967$9,760$177$31,602

June 30, 2018
Commercial Real EstateResidential Real Estate
Commercial
CommercialCommercialOwnerResidentialResidential
(In thousands)CommercialAD&CInvestor R/EOccupied R/EConsumerMortgageConstructionTotal
Past due loans
31-60 days $744$28$2,995$144$3,492$9,532$-$16,935
61-90 days3,5322797707711,0604,893-11,305
> 90 days6--112---118
Total past due4,2823073,7651,0274,55214,425-28,358
Non-accrual loans (1)6,8831365,8783,4404,2986,25116827,054
Loans acquired with deteriorated credit quality7,138-17,4852,2921,34312-28,270
Current loans 684,636608,8231,896,6991,177,662515,3811,085,986197,2046,166,391
Total loans$702,939$609,266$1,923,827$1,184,421$525,574$1,106,674$197,372$6,250,073
(1) Includes $1.4 million of consumer loans acquired from WashingtonFirst considered performing at the Acquisition Date.

December 31, 2017
Commercial Real EstateResidential Real Estate
Commercial
CommercialCommercialOwnerResidentialResidential
(In thousands)CommercialAD&CInvestor R/EOccupied R/EConsumerMortgageConstructionTotal
Past due loans
31-60 days $587$-$775$414$2,107$6,100$-$9,983
61-90 days----1063,103-3,209
> 90 days-----225-225
Total past due587-7754142,2139,428-13,417
Non-accrual loans6,7031365,5753,5822,9677,19617726,336
Current loans 490,658292,3071,106,360853,200450,649904,811176,5104,274,495
Total loans$497,948$292,443$1,112,710$857,196$455,829$921,435$176,687$4,314,248

The following tables provide information by credit risk rating indicators for each segment of the commercial loan portfolio at the dates indicated:

June 30, 2018
Commercial Real Estate
Commercial
CommercialCommercialOwner
(In thousands)CommercialAD&CInvestor R/EOccupied R/ETotal
Pass$679,208$608,808$1,896,995$1,171,576$4,356,587
Special Mention3,5743223,4695,29612,661
Substandard20,15713623,3637,54951,205
Doubtful -----
Total$702,939$609,266$1,923,827$1,184,421$4,420,453

December 31, 2017
Commercial Real Estate
Commercial
CommercialCommercialOwner
(In thousands)CommercialAD&CInvestor R/EOccupied R/ETotal
Pass$482,924$292,307$1,103,480$845,102$2,723,813
Special Mention2,443-3,5175,50511,465
Substandard12,5811365,7136,58925,019
Doubtful -----
Total$497,948$292,443$1,112,710$857,196$2,760,297

Homogeneous loan pools do not have individual loans subjected to internal risk ratings therefore, the credit indicator applied to these pools is based on their delinquency status. The following tables provide information by credit risk rating indicators for those remaining segments of the loan portfolio at the dates indicated:

June 30, 2018
Residential Real Estate
ResidentialResidential
(In thousands)ConsumerMortgageConstructionTotal
Performing$521,276$1,099,545$197,204$1,818,025
Non-performing:
90 days past due ----
Non-accruing (1)4,2986,25116810,717
Restructured loans-878-878
Total $525,574$1,106,674$197,372$1,829,620
(1) Includes $1.4 million of consumer loans acquired from WashingtonFirst considered performing at the Acquisition Date.

December 31, 2017
Residential Real Estate
ResidentialResidential
(In thousands)ConsumerMortgageConstructionTotal
Performing$452,862$913,124$176,510$1,542,496
Non-performing:
90 days past due -225-225
Non-accruing 2,9677,19617710,340
Restructured loans-890-890
Total $455,829$921,435$176,687$1,553,951

During the six months ended June 30, 2018, the Company restructured $1.6 million in loans that were designated as troubled debt restructurings. No modifications resulted in the reduction of the principal in the associated loan balances. Restructured loans are subject to periodic credit reviews to determine the necessity and adequacy of a specific loan loss allowance based on the collectability of the recorded investment in the restructured loan. Loans restructured during the six months ended June 30, 2018 had specific reserves of $0.6 million. For the year ended December 31, 2017, the Company restructured $2.1 million in loans. Modifications consisted principally of interest rate concessions and no modifications resulted in the reduction of the recorded investment in the associated loan balances. Loans restructured during 2017 had specific reserves of $0.2 million at December 31, 2017. The commitments to lend additional funds on loans that have been restructured at June 30, 2018 and December 31, 2017 were not significant.

The following table provides the amounts of the restructured loans at the date of restructuring for specific segments of the loan portfolio during the period indicated:

For the Six Months Ended June 30, 2018
Commercial Real Estate
CommercialAll
CommercialCommercialOwnerOther
(In thousands)CommercialAD&CInvestor R/EOccupied R/ELoansTotal
Troubled debt restructurings
Restructured accruing$-$-$-$-$-$-
Restructured non-accruing1,464--158-1,622
Balance$1,464$-$-$158$-$1,622
Specific allowance$637$-$-$-$-$637
Restructured and subsequently defaulted$-$-$-$-$-$-

For the Year Ended December 31, 2017
Commercial Real Estate
CommercialAll
CommercialCommercialOwnerOther
(In thousands)CommercialAD&CInvestor R/EOccupied R/ELoansTotal
Troubled debt restructurings
Restructured accruing$492$-$-$-$-$492
Restructured non-accruing1,019--540-1,559
Balance$1,511$-$-$540$-$2,051
Specific allowance$247$-$-$-$-$247
Restructured and subsequently defaulted$-$-$-$-$-$-

Other Real Estate Owned

Other real estate owned totaled $2.4 million and $2.3 million at June 30, 2018 and December 31, 2017, respectively. There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as of June 30, 2018.