CREDIT QUALITY ASSESSMENT

3 Months Ended

Mar. 31, 2019

Credit Quality Assessment [Abstract]

CREDIT QUALITY ASSESSMENT

Note 4– 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:

			Three Months Ended March 31,
(In thousands)			2019		2018
Balance at beginning of year			$	53,486	$	45,257
	Provision (credit) for loan losses			(128)		1,997
	Loan charge-offs			(356)		(477)
	Loan recoveries			87		154
		Net charge-offs		(269)		(323)
Balance at period end			$	53,089	$	46,931

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 Three Months Ended March 31, 2019
				Commercial Real Estate								Residential Real Estate
								Commercial
		Commercial		Commercial		Commercial		Owner				Residential		Residential
(Dollars in thousands)		Business		AD&C		Investor R/E		Occupied R/E		Consumer		Mortgage		Construction		Total
Balance at beginning of year		$	11,377	$	5,944	$	17,603	$	6,307	$	2,113	$	8,881	$	1,261	$	53,486
Provision (credit)			(422)		497		(329)		(139)		212		253		(200)		(128)
Charge-offs			(17)		-		-		-		(226)		(113)		-		(356)
Recoveries			10		-		7		-		44		24		2		87
	Net recoveries (charge-offs)		(7)		-		7		-		(182)		(89)		2		(269)
Balance at end of period		$	10,948	$	6,441	$	17,281	$	6,168	$	2,143	$	9,045	$	1,063	$	53,089
Total loans		$	769,660	$	688,939	$	1,962,879	$	1,216,713	$	505,443	$	1,249,968	$	176,388	$	6,569,990
Allowance for loans losses to total loans ratio			1.42%		0.93%		0.88%		0.51%		0.42%		0.72%		0.60%		0.81%
Balance of loans specifically evaluated for impairment		$	8,286	$	3,306	$	6,845	$	5,992		na.	$	1,711	$	-	$	26,140
Allowance for loans specifically evaluated for impairment		$	3,624	$	151	$	1,315	$	251		na.	$	-	$	-	$	5,341
Specific allowance to specific loans ratio			43.74%		-		19.21%		4.19%		na.		-		-		20.43%
Balance of loans collectively evaluated		$	754,019	$	685,633	$	1,945,061	$	1,210,721	$	504,219	$	1,248,247	$	176,388	$	6,524,288
Allowance for loans collectively evaluated		$	7,324	$	6,290	$	15,966	$	5,917	$	2,143	$	9,045	$	1,063	$	47,748
Collective allowance to collective loans ratio			0.97%		0.92%		0.82%		0.49%		0.43%		0.72%		0.60%		0.73%
Balance of loans acquired with deteriorated credit quality		$	7,355	$	-	$	10,973	$	-	$	1,224	$	10	$	-	$	19,562
Allowance for loans acquired with deteriorated credit quality		$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Allowance to loans acquired with deteriorated credit quality ratio			na.		na.		na.		na.		na.		na.		na.		na.

		For the Year Ended December 31, 2018
				Commercial Real Estate								Residential Real Estate
								Commercial
		Commercial		Commercial		Commercial		Owner				Residential		Residential
(Dollars in thousands)		Business		AD&C		Investor R/E		Occupied R/E		Consumer		Mortgage		Construction		Total
Balance at beginning of year		$	8,711	$	3,501	$	14,970	$	7,178	$	2,383	$	7,268	$	1,246	$	45,257
Provision (credit)			2,857		2,381		2,677		(871)		203		1,776		-		9,023
Charge-offs			(449)		-		(131)		-		(611)		(225)		-		(1,416)
Recoveries			258		62		87		-		138		62		15		622
	Net recoveries (charge-offs)		(191)		62		(44)		-		(473)		(163)		15		(794)
Balance at end of period		$	11,377	$	5,944	$	17,603	$	6,307	$	2,113	$	8,881	$	1,261	$	53,486
Total loans		$	796,264	$	681,201	$	1,958,395	$	1,202,903	$	517,839	$	1,228,247	$	186,785	$	6,571,634
Allowance for loan losses to total loans ratio			1.43%		0.87%		0.90%		0.52%		0.41%		0.72%		0.68%		0.81%
Balance of loans specifically evaluated for impairment		$	7,586	$	3,306	$	5,355	$	4,234		na.	$	1,729	$	-	$	22,210
Allowance for loans specifically evaluated for impairment		$	3,594	$	-	$	1,207	$	123		na.	$	-	$	-	$	4,924
Specific allowance to specific loans ratio			47.38%		-		22.54%		2.91%		na.		-		-		22.17%
Balance of loans collectively evaluated		$	780,523	$	677,895	$	1,938,712	$	1,196,487	$	516,567	$	1,226,508	$	186,785	$	6,523,477
Allowance for loans collectively evaluated		$	7,783	$	5,944	$	16,396	$	6,184	$	2,113	$	8,881	$	1,261	$	48,562
Collective allowance to collective loans ratio			1.00%		0.88%		0.85%		0.52%		0.41%		0.72%		0.68%		0.74%
Balance of loans acquired with deteriorated credit quality		$	8,155	$	-	$	14,328	$	2,182	$	1,272	$	10	$	-	$	25,947
Allowance for loans acquired with deteriorated credit quality		$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Allowance to loan acquired with deteriorated credit quality ratio			na.		na.		na.		na.		na.		na.		na.		na.

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

(In thousands)		March 31, 2019		December 31, 2018
Impaired loans with a specific allowance		$	17,848	$	12,876
Impaired loans without a specific allowance			8,292		9,334
	Total impaired loans	$	26,140	$	22,210
Allowance for loan losses related to impaired loans		$	5,341	$	4,924
Allowance for loan losses related to loans collectively evaluated			47,748		48,562
	Total allowance for loan losses	$	53,089	$	53,486
Average impaired loans for the period		$	24,175	$	20,211
Contractual interest income due on impaired loans during the period		$	646	$	2,513
Interest income on impaired loans recognized on a cash basis		$	110	$	506
Interest income on impaired loans recognized on an accrual basis		$	42	$	138

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:

			March 31, 2019
					Commercial Real Estate								Total Recorded
									Commercial		All		Investment in
					Commercial		Commercial		Owner		Other		Impaired
(In thousands)			Commercial		AD&C		Investor R/E		Occupied R/E		Loans		Loans
Impaired loans with a specific allowance
		Non-accruing	$	4,706	$	1,261	$	5,117	$	2,950	$	-	$	14,034
		Restructured accruing		105		-		-		-		-		105
		Restructured non-accruing		2,151		-		789		769		-		3,709
	Balance		$	6,962	$	1,261	$	5,906	$	3,719	$	-	$	17,848
	Allowance		$	3,624	$	151	$	1,315	$	251	$	-	$	5,341
Impaired loans without a specific allowance
		Non-accruing	$	214	$	1,910	$	165	$	840	$	-	$	3,129
		Restructured accruing		168		-		774		-		1,432		2,374
		Restructured non-accruing		942		135		-		1,433		279		2,789
	Balance		$	1,324	$	2,045	$	939	$	2,273	$	1,711	$	8,292
Total impaired loans
		Non-accruing	$	4,920	$	3,171	$	5,282	$	3,790	$	-	$	17,163
		Restructured accruing		273		-		774		-		1,432		2,479
		Restructured non-accruing		3,093		135		789		2,202		279		6,498
	Balance		$	8,286	$	3,306	$	6,845	$	5,992	$	1,711	$	26,140
Unpaid principal balance in total impaired loans			$	11,421	$	4,419	$	11,397	$	8,434	$	3,066	$	38,737

	March 31, 2019
			Commercial Real Estate								Total Recorded
							Commercial		All		Investment in
			Commercial		Commercial		Owner		Other		Impaired
(In thousands)	Commercial		AD&C		Investor R/E		Occupied R/E		Loans		Loans
Average impaired loans for the period	$	7,936	$	3,306	$	6,100	$	5,113	$	1,720	$	24,175
Contractual interest income due on impaired loans during the period	$	127	$	184	$	179	$	122	$	34
Interest income on impaired loans recognized on a cash basis	$	49	$	-	$	4	$	52	$	5
Interest income on impaired loans recognized on an accrual basis	$	13	$	-	$	10	$	-	$	19

			December 31, 2018
					Commercial Real Estate								Total Recorded
									Commercial		All		Investment in
					Commercial		Commercial		Owner		Other		Impaired
(In thousands)			Commercial		AD&C		Investor R/E		Occupied R/E		Loans		Loans
Impaired loans with a specific allowance
		Non-accruing	$	4,126	$	-	$	5,117	$	767	$	-	$	10,010
		Restructured accruing		328		-		-		-		-		328
		Restructured non-accruing		1,766		-		-		772		-		2,538
	Balance		$	6,220	$	-	$	5,117	$	1,539	$	-	$	12,876
	Allowance		$	3,594	$	-	$	1,207	$	123	$	-	$	4,924
Impaired loans without a specific allowance
		Non-accruing	$	220	$	3,170	$	238	$	1,216	$	-	$	4,844
		Restructured accruing		172		-		-		-		1,442		1,614
		Restructured non-accruing		974		136		-		1,479		287		2,876
	Balance		$	1,366	$	3,306	$	238	$	2,695	$	1,729	$	9,334
Total impaired loans
		Non-accruing	$	4,346	$	3,170	$	5,355	$	1,983	$	-	$	14,854
		Restructured accruing		500		-		-		-		1,442		1,942
		Restructured non-accruing		2,740		136		-		2,251		287		5,414
	Balance		$	7,586	$	3,306	$	5,355	$	4,234	$	1,729	$	22,210
Unpaid principal balance in total impaired loans			$	11,056	$	4,419	$	9,909	$	6,656	$	3,081	$	35,121

	December 31, 2018
			Commercial Real Estate								Total Recorded
							Commercial		All		Investment in
			Commercial		Commercial		Owner		Other		Impaired
(In thousands)	Commercial		AD&C		Investor R/E		Occupied R/E		Loans		Loans
Average impaired loans for the period	$	7,685	$	770	$	5,696	$	3,823	$	2,237	$	20,211
Contractual interest income due on impaired loans during the period	$	858	$	495	$	610	$	407	$	143
Interest income on impaired loans recognized on a cash basis	$	215	$	-	$	20	$	175	$	96
Interest income on impaired loans recognized on an accrual basis	$	63	$	-	$	-	$	-	$	75

Credit Quality

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

		March 31, 2019
				Commercial Real Estate								Residential Real Estate
								Commercial
				Commercial		Commercial		Owner				Residential		Residential
(In thousands)		Commercial		AD&C		Investor R/E		Occupied R/E		Consumer		Mortgage		Construction		Total
Non-performing loans and assets:
	Non-accrual loans (1)	$	8,013	$	3,306	$	6,071	$	5,992	$	4,081	$	9,704	$	156	$	37,323
	Loans 90 days past due		-		-		-		90		-		221		-		311
	Restructured loans		273		-		774		-		-		1,432		-		2,479
Total non-performing loans			8,286		3,306		6,845		6,082		4,081		11,357		156		40,113
	Other real estate owned		39		315		409		-		-		647		-		1,410
Total non-performing assets		$	8,325	$	3,621	$	7,254	$	6,082	$	4,081	$	12,004	$	156	$	41,523
(1) Includes $5.4 million of loans acquired from WashingtonFirst considered performing at the Acquisition Date, the majority of which are collateralized by real estate properties.

		December 31, 2018
				Commercial Real Estate								Residential Real Estate
								Commercial
				Commercial		Commercial		Owner				Residential		Residential
(In thousands)		Commercial		AD&C		Investor R/E		Occupied R/E		Consumer		Mortgage		Construction		Total
Non-performing loans and assets:
	Non-accrual loans (1)	$	7,086	$	3,306	$	5,355	$	4,234	$	4,107	$	9,336	$	159	$	33,583
	Loans 90 days past due		49		-		-		-		219		221		-		489
	Restructured loans		500		-		-		-		-		1,442		-		1,942
Total non-performing loans			7,635		3,306		5,355		4,234		4,326		10,999		159		36,014
	Other real estate owned		39		315		409		-		-		821		-		1,584
Total non-performing assets		$	7,674	$	3,621	$	5,764	$	4,234	$	4,326	$	11,820	$	159	$	37,598
(1) Includes $4.8 million of loans acquired from WashingtonFirst considered performing at the Acquisition Date, the majority of which are collateralized by real estate properties.

			March 31, 2019
					Commercial Real Estate								Residential Real Estate
									Commercial
					Commercial		Commercial		Owner				Residential		Residential
(In thousands)			Commercial		AD&C		Investor R/E		Occupied R/E		Consumer		Mortgage		Construction		Total
Past due loans
	31-60 days		$	1,417	$	277	$	3,669	$	1,506	$	1,863	$	12,508	$	1,219	$	22,459
	61-90 days			2,682		-		1,815		-		1,572		2,612		477		9,158
	> 90 days			-		-		-		90		-		221		-		311
		Total past due		4,099		277		5,484		1,596		3,435		15,341		1,696		31,928
	Non-accrual loans (1)			8,013		3,306		6,071		5,992		4,081		9,704		156		37,323
	Loans acquired with deteriorated credit quality			7,355		-		10,973		-		1,224		10		-		19,562
	Current loans			750,193		685,356		1,940,351		1,209,125		496,703		1,224,913		174,536		6,481,177
		Total loans	$	769,660	$	688,939	$	1,962,879	$	1,216,713	$	505,443	$	1,249,968	$	176,388	$	6,569,990
	(1) Includes $5.4 million of loans acquired from WashingtonFirst considered performing at the Acquisition Date, the majority of which are collateralized by real estate properties.

			December 31, 2018
					Commercial Real Estate								Residential Real Estate
									Commercial
					Commercial		Commercial		Owner				Residential		Residential
(In thousands)			Commercial		AD&C		Investor R/E		Occupied R/E		Consumer		Mortgage		Construction		Total
Past due loans
	31-60 days		$	2,737	$	474	$	3,041	$	433	$	3,871	$	8,181	$	3,226	$	21,963
	61-90 days			-		-		789		-		1,477		2,517		-		4,783
	> 90 days			49		-		-		-		219		221		-		489
		Total past due		2,786		474		3,830		433		5,567		10,919		3,226		27,235
	Non-accrual loans (1)			7,086		3,306		5,355		4,234		4,107		9,336		159		33,583
	Loans acquired with deteriorated credit quality			8,155		-		14,328		2,182		1,272		10		-		25,947
	Current loans			778,237		677,421		1,934,882		1,196,054		506,893		1,207,982		183,400		6,484,869
		Total loans	$	796,264	$	681,201	$	1,958,395	$	1,202,903	$	517,839	$	1,228,247	$	186,785	$	6,571,634
(1) Includes $4.8 million of loans acquired from WashingtonFirst considered performing at the Acquisition Date, majority of which are collateralized by real estate properties.

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

		March 31, 2019
				Commercial Real Estate
								Commercial
				Commercial		Commercial		Owner
(In thousands)		Commercial		AD&C		Investor R/E		Occupied R/E		Total
	Pass	$	747,335	$	685,313	$	1,942,814	$	1,204,269	$	4,579,731
	Special Mention (1)		2,162		320		1,980		2,140		6,602
	Substandard (2)		20,163		3,306		18,085		10,304		51,858
	Doubtful		-		-		-		-		-
Total		$	769,660	$	688,939	$	1,962,879	$	1,216,713	$	4,638,191
(1) Includes $2.0 million of loans acquired from WashingtonFirst and considered performing at the Acquisition Date.
(2) Includes $17.9 million of purchased credit impaired loans acquired from WashingtonFirst and $9.2 million of loans acquired from WashingtonFirst and considered performing at the Acquisition Date.

		December 31, 2018
				Commercial Real Estate
								Commercial
				Commercial		Commercial		Owner
(In thousands)		Commercial		AD&C		Investor R/E		Occupied R/E		Total
	Pass	$	773,958	$	677,574	$	1,934,886	$	1,189,903	$	4,576,321
	Special Mention (1)		1,942		321		3,826		2,738		8,827
	Substandard (2)		20,364		3,306		19,683		10,262		53,615
	Doubtful		-		-		-		-		-
Total		$	796,264	$	681,201	$	1,958,395	$	1,202,903	$	4,638,763
(1) Includes $4.2 million of loans acquired from WashingtonFirst and considered performing at the Acquisition Date.
(2) Includes $24.3 million of purchased credit impaired loans acquired from WashingtonFirst and $7.2 million of loans acquired from WashingtonFirst and considered performing at the Acquisition Date.

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:

			March 31, 2019
					Residential Real Estate
					Residential		Residential
(In thousands)			Consumer		Mortgage		Construction		Total
	Performing		$	501,362	$	1,238,611	$	176,232	$	1,916,205
	Non-performing:
		90 days past due		-		221		-		221
		Non-accruing (1)		4,081		9,704		156		13,941
		Restructured loans		-		1,432		-		1,432
Total			$	505,443	$	1,249,968	$	176,388	$	1,931,799
	(1) Includes $1.1 million of consumer loans acquired from WashingtonFirst considered performing at the Acquisition Date.

			December 31, 2018
					Residential Real Estate
					Residential		Residential
(In thousands)			Consumer		Mortgage		Construction		Total
	Performing		$	513,513	$	1,217,248	$	186,626	$	1,917,387
	Non-performing:
		90 days past due		219		221		-		440
		Non-accruing (1)		4,107		9,336		159		13,602
		Restructured loans		-		1,442		-		1,442
Total			$	517,839	$	1,228,247	$	186,785	$	1,932,871
	(1) Includes $1.3 million of consumer loans acquired from WashingtonFirst considered performing at the Acquisition Date.

During the three months ended March 31, 2019, the Company restructured $1.8 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 three months ended March 31, 2019had specific reserves of $0.3 million. For the year ended December 31, 2018, the Company restructured $1.6 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 2018 had specific reservesof $0.6 million at December 31, 2018. The commitments to lend additional funds on loans that have been restructured at March 31, 2019 and December 31, 2018 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 Three Months Ended March 31, 2019
				Commercial Real Estate
								Commercial		All
				Commercial		Commercial		Owner		Other
(In thousands)		Commercial		AD&C		Investor R/E		Occupied R/E		Loans		Total
Troubled debt restructurings
	Restructured accruing	$	-	$	-	$	775	$	-	$	-	$	775
	Restructured non-accruing		261		-		789		-		-		1,050
Balance		$	261	$	-	$	1,564	$	-	$	-	$	1,825
Specific allowance		$	184	$	-	$	108	$	-	$	-	$	292
Restructured and subsequently defaulted		$	-	$	-	$	-	$	-	$	-	$	-

		For the Year Ended December 31, 2018
				Commercial Real Estate
								Commercial		All
				Commercial		Commercial		Owner		Other
(In thousands)		Commercial		AD&C		Investor R/E		Occupied R/E		Loans		Total
Troubled debt restructurings
	Restructured accruing	$	-	$	-	$	-	$	-	$	-	$	-
	Restructured non-accruing		1,464		-		-		158		-		1,622
Balance		$	1,464	$	-	$	-	$	158	$	-	$	1,622
Specific allowance		$	563	$	-	$	-	$	-	$	-	$	563
Restructured and subsequently defaulted		$	-	$	-	$	-	$	-	$	-	$	-

Other Real Estate Owned

Other real estate owned totaled $1.4 million and $1.6 million at March 31, 2019 and December 31, 2018, respectively. There were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as of March 31, 2019.