Loans Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Components of Loans Receivable, Net

Loans receivable, net at September 30, 2016 and December 31, 2015 consisted of the following (in thousands):

	September 30, 2016			December 31, 2015
Commercial:
Commercial and industrial	$	182,767		$	144,538
Commercial real estate – owner occupied		491,118			307,509
Commercial real estate – investor		1,014,611			510,725
Total commercial		1,688,496			962,772
Consumer:
Residential mortgage		1,061,029			791,249
Residential construction		46,813			50,757
Home equity loans and lines		251,304			192,368
Other consumer		1,270			792
Total consumer		1,360,416			1,035,166
		3,048,912			1,997,938
Purchased credit impaired (“PCI”) loans		5,836			461
Total Loans		3,054,748			1,998,339
Loans in process		(13,842	)		(14,206	)
Deferred origination costs, net		3,407			3,232
Allowance for loan losses		(15,617	)		(16,722	)
Total loans, net	$	3,028,696		$	1,970,703

Analysis of Allowance for Loan Losses

An analysis of the allowance for loan losses for the three and nine months ended September 30, 2016 and 2015 is as follows (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2016			2015			2016			2015
Balance at beginning of period	$	16,678		$	16,534		$	16,722		$	16,317
Provision charged to operations		888			300			2,113			975
Charge-offs		(2,116	)		(211	)		(3,511	)		(900	)
Recoveries		167			15			293			246
Balance at end of period	$	15,617		$	16,638		$	15,617		$	16,638

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Based on Impairment Method Excluding PCI Loans

The following table presents an analysis of the allowance for loan losses for the three and nine months ended September 30, 2016 and 2015 and the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2016 and December 31, 2015, excluding PCI loans (in thousands):

	Residential Real Estate			Commercial Real Estate – Owner Occupied			Commercial Real Estate – Investor			Consumer			Commercial and Industrial			Unallocated			Total
For the three months ended September 30, 2016
Allowance for loan losses:
Balance at beginning of period	$	6,006		$	2,711		$	4,713		$	1,107		$	1,209		$	932		$	16,678
Provision (benefit) charged to operations		(376	)		(168	)		104			(130	)		1,949			(491	)		888
Charge-offs		(167	)		—			—			(80	)		(1,869	)		—			(2,116	)
Recoveries		6			—			—			—			161			—			167
Balance at end of period	$	5,469		$	2,543		$	4,817		$	897		$	1,450		$	441		$	15,617
For the three months ended September 30, 2015
Allowance for loan losses:
Balance at beginning of period	$	3,610		$	3,716		$	5,513		$	952		$	1,686		$	1,057		$	16,534
Provision (benefit) charged to operations		1,602			(421	)		(471	)		73			(101	)		(382	)		300
Charge-offs		(51	)		—			—			(101	)		(59	)		—			(211	)
Recoveries		—			—			10			3			2			—			15
Balance at end of period	$	5,161		$	3,295		$	5,052		$	927		$	1,528		$	675		$	16,638
For the nine months ended September 30, 2016
Allowance for loan losses:
Balance at beginning of period	$	6,590		$	2,292		$	4,873		$	1,095		$	1,639		$	233		$	16,722
Provision (benefit) charged to operations		(867	)		1,261			(56	)		(98	)		1,665			208			2,113
Charge-offs		(319	)		(1,010	)		—			(146	)		(2,036	)		—			(3,511	)
Recoveries		65			—			—			46			182			—			293
Balance at end of period	$	5,469		$	2,543		$	4,817		$	897		$	1,450		$	441		$	15,617
For the nine months ended September 30, 2015
Allowance for loan losses:
Balance at beginning of period	$	4,291		$	3,627		$	5,308		$	1,146		$	863		$	1,082		$	16,317
Provision (benefit) charged to operations		920			(332	)		(172	)		249			717			(407	)		975
Charge-offs		(174	)		—			(103	)		(564	)		(59	)		—			(900	)
Recoveries		124			—			19			96			7			—			246
Balance at end of period	$	5,161		$	3,295		$	5,052		$	927		$	1,528		$	675		$	16,638
September 30, 2016
Allowance for loan losses:
Ending allowance balance attributed to loans:
Individually evaluated for impairment	$	30		$	—		$	239		$	—		$	—		$	—		$	269
Collectively evaluated for impairment		5,439			2,543			4,578			897			1,450			441			15,348
Total ending allowance balance	$	5,469		$	2,543		$	4,817		$	897		$	1,450		$	441		$	15,617
Loans:
Loans individually evaluated for impairment	$	13,753		$	17,116		$	1,180		$	2,589		$	269		$	—		$	34,907
Loans collectively evaluated for impairment		1,094,089			474,002			1,013,431			249,985			182,498			—			3,014,005
Total ending loan balance	$	1,107,842		$	491,118		$	1,014,611		$	252,574		$	182,767		$	—		$	3,048,912

	Residential Real Estate		Commercial Real Estate – Owner Occupied		Commercial Real Estate – Investor		Consumer		Commercial and Industrial		Unallocated		Total
December 31, 2015
Allowance for loan losses:
Ending allowance balance attributed to loans:
Individually evaluated for impairment	$	31	$	544	$	287	$	43	$	434	$	—	$	1,339
Collectively evaluated for impairment		6,559		1,748		4,586		1,052		1,205		233		15,383
Total ending allowance balance	$	6,590	$	2,292	$	4,873	$	1,095	$	1,639	$	233	$	16,722
Loans:
Loans individually evaluated for impairment	$	13,165	$	18,964	$	2,686	$	2,307	$	1,250	$	—	$	38,372
Loans collectively evaluated for impairment		828,841		288,545		508,039		190,853		143,288		—		1,959,566
Total ending loan balance	$	842,006	$	307,509	$	510,725	$	193,160	$	144,538	$	—	$	1,997,938

Summary of Impaired Loans Excluding PCI Loans

A summary of impaired loans at September 30, 2016, and December 31, 2015, is as follows, excluding PCI loans (in thousands):

	September 30,		December 31,
	2016		2015
Impaired loans with no allocated allowance for loan losses	$	33,905	$	35,177
Impaired loans with allocated allowance for loan losses		1,002		3,195
	$	34,907	$	38,372
Amount of the allowance for loan losses allocated	$	269	$	1,339

Summary of Loans Individually Evaluated for Impairment by Loan Portfolio Segment Excluding PCI Loans

The summary of loans individually evaluated for impairment by loan portfolio segment as of September 30, 2016, and December 31, 2015 and for the three and nine months ended September 30, 2016 and 2015, is as follows, excluding PCI loans (in thousands):

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
As of September 30, 2016
With no related allowance recorded:
Residential real estate	$	14,155	$	13,647	$	—
Commercial real estate – owner occupied		17,119		17,116		—
Commercial real estate – investor		309		284
Consumer		3,132		2,589		—
Commercial and industrial		269		269		—
	$	34,984	$	33,905	$	—
With an allowance recorded:
Residential real estate	$	107	$	106	$	30
Commercial real estate – owner occupied		—		—		—
Commercial real estate – investor		896		896		239
Consumer		—		—		—
Commercial and industrial		—		—		—
	$	1,003	$	1,002	$	269
As of December 31, 2015
With no related allowance recorded:
Residential real estate	$	13,431	$	13,056	$	—
Commercial real estate – owner occupied		18,742		18,688		—
Commercial real estate – investor		498		466
Consumer		2,577		2,264		—
Commercial and industrial		703		703		—
	$	35,951	$	35,177	$	—
With an allowance recorded:
Residential real estate	$	109	$	109	$	31
Commercial real estate – owner occupied		276		276		544
Commercial real estate – investor		2,171		2,220		287
Consumer		81		43		43
Commercial and industrial		547		547		434
	$	3,184	$	3,195	$	1,339

	Three months ended September 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	13,451	$	171	$	12,580	$	141
Commercial real estate – owner occupied		17,198		119		17,472		84
Commercial real estate – investor		281		3		428		—
Consumer		2,340		44		2,266		28
Commercial and industrial		269		—		734		3
	$	33,539	$	337	$	33,480	$	256
With an allowance recorded:
Residential real estate	$	107	$	1	$	260	$	2
Commercial real estate – owner occupied		—		—		9,995		—
Commercial real estate – investor		896		—		640		—
Consumer		—		—		85		—
Commercial and industrial		—		—		547		—
	$	1,003	$	1	$	11,527	$	2

	Nine months ended September 30,
	2016				2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	13,326	$	437	$	12,634	$	434
Commercial real estate – owner occupied		17,333		406		14,230		269
Commercial real estate – investor		303		9		451		—
Consumer		2,220		105		2,222		87
Commercial and industrial		270		—		717		9
	$	33,452	$	957	$	30,254	$	799
With an allowance recorded:
Residential real estate	$	108	$	3	$	261	$	8
Commercial real estate – owner occupied		—		—		9,512		11
Commercial real estate – investor		755		—		641		—
Consumer		—		—		28		1
Commercial and industrial		—		—		304		2
	$	863	$	3	$	10,746	$	22

Recorded Investment in Non-Accrual Loans by Loan Portfolio Segment Excluding PCI Loans

The following table presents the recorded investment in non-accrual loans by loan portfolio segment as of September 30, 2016 and December 31, 2015, excluding PCI loans (in thousands):

	September 30, 2016		December 31, 2015
Residential real estate	$	7,017	$	5,779
Commercial real estate – owner occupied		5,213		7,684
Commercial real estate – investor		1,675		3,112
Consumer		1,450		1,576
Commercial and industrial		1,152		123
	$	16,507	$	18,274

Aging of Recorded Investment in Past Due Loans Excluding PCI Loans

The following table presents the aging of the recorded investment in past due loans as of September 30, 2016 and December 31, 2015 by loan portfolio segment, excluding PCI loans (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Total
September 30, 2016
Residential real estate	$	4,880	$	2,054	$	5,543	$	12,477	$	1,095,365	$	1,107,842
Commercial real estate – owner occupied		—		60		5,213		5,273		485,845		491,118
Commercial real estate – investor		—		—		1,675		1,675		1,012,936		1,014,611
Consumer		985		267		1,443		2,695		249,879		252,574
Commercial and industrial		96		1,203		1,152		2,451		180,316		182,767
	$	5,961	$	3,584	$	15,026	$	24,571	$	3,024,341	$	3,048,912
December 31, 2015
Residential real estate	$	4,075	$	2,716	$	3,168	$	9,959	$	832,047	$	842,006
Commercial real estate – owner occupied		80		—		7,684		7,764		299,745		307,509
Commercial real estate – investor		217		1,208		2,649		4,074		506,651		510,725
Consumer		1,661		115		1,248		3,024		190,136		193,160
Commercial and industrial		8		—		360		368		144,170		144,538
	$	6,041	$	4,039	$	15,109	$	25,189	$	1,972,749	$	1,997,938

Risk Category of Loans by Loan Portfolio Segment Excluding PCI Loans

As of September 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of loans by loan portfolio segment follows, excluding PCI loans (in thousands). The increase in substandard and special mention loans is primarily a result of the re-grading of the Cape loan portfolio using the Bank’s risk rating scale. The classification downgrades are consistent with the Company’s due diligence findings prior to the acquisition and reflective of the credit mark at the time of acquisition.

	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2016
Commercial real estate – owner occupied	$	449,297	$	14,404	$	27,417	$	—	$	491,118
Commercial real estate – investor		992,247		7,756		14,608		—		1,014,611
Commercial and industrial		179,900		2,203		664		—		182,767
		1,621,444		24,363		42,689	$	—	$	1,688,496
December 31, 2015
Commercial real estate – owner occupied	$	288,701	$	1,803	$	17,005	$	—	$	307,509
Commercial real estate – investor		494,664		10,267		5,794		—		510,725
Commercial and industrial		142,387		787		1,364		—		144,538
	$	925,752	$	12,857	$	24,163	$	—	$	962,772

Recorded Investment in Residential and Consumer Loans Based on Payment Activity Excluding PCI Loans

The following table presents the recorded investment in residential and consumer loans based on payment activity as of September 30, 2016 and December 31, 2015, excluding PCI loans (in thousands):

	Residential Real Estate
	Residential		Consumer
September 30, 2016
Performing	$	1,100,825	$	251,124
Non-performing		7,017		1,450
	$	1,107,842	$	252,574
December 31, 2015
Performing	$	836,227	$	191,584
Non-performing		5,779		1,576
	$	842,006	$	193,160

Troubled Debt Restructurings

The following table presents information about troubled debt restructurings which occurred during the three and nine months ended September 30, 2016 and 2015, and troubled debt restructurings modified within the previous year and which defaulted during the three and nine months ended September 30, 2016 and 2015, (dollars in thousands):

	Number of Loans		Pre-modification Recorded Investment		Post-modification Recorded Investment
Three months ended September 30, 2016
Troubled Debt Restructurings:
Residential real estate		1	$	455	$	455
Consumer		1		602		602

	Number of Loans		Recorded Investment
Troubled Debt Restructurings
Which Subsequently Defaulted:		None		None

	Number of Loans		Pre-modification Recorded Investment		Post-modification Recorded Investment
Nine months ended September 30, 2016
Troubled Debt Restructurings:
Residential real estate		3	$	674	$	673
Commercial real estate – investor		1		256		270
Consumer		3		665		665

	Number of Loans		Recorded Investment
Troubled Debt Restructurings
Which Subsequently Defaulted:		None		None

	Number of Loans		Pre-modification Recorded Investment		Post-modification Recorded Investment
Three months ended September 30, 2015
Troubled Debt Restructurings:
Commercial real estate – owner occupied		1	$	63	$	63
Consumer		1		207		170

	Number of Loans		Recorded Investment
Troubled Debt Restructurings
Which Subsequently Defaulted:		None		None

	Number of Loans		Pre-modification Recorded Investment		Post-modification Recorded Investment
Nine months ended September 30, 2015
Troubled Debt Restructurings:
Residential real estate		4	$	509	$	472
Commercial real estate – investor		4		6,095		5,944
Consumer		9		599		547

	Number of Loans		Recorded Investment
Troubled Debt Restructurings
Which Subsequently Defaulted:		None		None

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

The following table presents information regarding the estimates of the contractually required payments, the cash flows expected to be collected and the estimated fair value of the PCI loans acquired from Cape at May 2, 2016 and Colonial American at July 31, 2015 (in thousands):

	Cape May 2, 2016			Colonial American July 31, 2015
Contractually required principal and interest	$	21,345		$	3,263
Contractual cash flows not expected to be collected (non-accretable discount)		(12,387	)		(1,854	)
Expected cash flows to be collected at acquisition		8,958			1,409
Interest component of expected cash flows (accretable yield)		(576	)		(109	)
Fair value of acquired loans	$	8,382		$	1,300

The following table summarizes the changes in accretable yield for PCI loans during the three and nine months ended September 30, 2016 (in thousands):

	Three months ended September 30, 2016			Nine months ended September 30, 2016
Beginning balance	$	503		$	75
Acquisition		—			576
Accretion		(196	)		(344	)
Reclassification from non-accretable difference		—			—
Ending balance	$	307		$	307