Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2016

Allowance for Loan Losses and Recorded Investment in Financing Receivables

Changes in the allowance for loan losses for the years ended December 31, 2016, 2015 and 2014 were as follows:

Allowance for Loan Losses and Recorded Investment in Financing Receivables

	For the Year Ended December 31, 2016
	Commercial and Industrial			Commercial Real Estate			Land & Development			Home Equity⁽¹⁾			Residential Real Estate			Other⁽²⁾			Total
Allowance for loan losses:
Beginning balance	$	2,761		$	8,142		$	1,058		$	2,816		$	3,029		$	202		$	18,008
Charge-offs		(256	)		(425	)		—			(454	)		(1,025	)		(265	)		(2,425	)
Recoveries		252			170			714			351			37			118			1,642
Net charge-offs		(4	)		(255	)		714			(103	)		(988	)		(147	)		(783	)
Provision for loan losses		(604	)		(337	)		(1,168	)		(364	)		607			182			(1,682	)
Ending balance	$	2,153		$	7,550		$	604		$	2,349		$	2,648		$	237		$	15,541
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	2,153		$	7,550		$	604		$	2,349		$	2,648		$	237		$	15,541
Financing Receivables:
Ending balance	$	235,946		$	974,010		$	67,165		$	119,481		$	210,874		$	2,442		$	1,609,918
Ending balance: individually evaluated for impairment	$	—		$	860		$	—		$	72		$	2,084		$	85		$	3,101
Ending balance: collectively evaluated for impairment	$	235,946		$	973,150		$	67,165		$	119,409		$	208,790		$	2,357		$	1,606,817

(1)	Amount includes both home equity lines of credit and term loans

(2)	Includes the unallocated portion of the allowance for loan losses.

6. ALLOWANCE FOR LOAN LOSSES (Continued)

	For the Year Ended December 31, 2015
	Commercial and Industrial			Commercial Real Estate			Land & Development			Home Equity⁽¹⁾			Residential Real Estate			Other⁽²⁾			Total
Allowance for loan losses:
Beginning balance	$	5,134		$	9,615		$	958		$	3,256		$	3,515		$	768		$	23,246
Charge-offs		(375	)		(836	)		—			(2,735	)		(2,810	)		(757	)		(7,513	)
Recoveries		3,417			440			351			366			819			162			5,555
Net charge-offs		3,042			(396	)		351			(2,369	)		(1,991	)		(595	)		(1,958	)
Provision for loan losses		(5,416	)		(1,077	)		(251	)		1,929			1,505			30			(3,280	)
Ending balance	$	2,761		$	8,142		$	1,058		$	2,816		$	3,029		$	202		$	18,008
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	2,761		$	8,142		$	1,058		$	2,816		$	3,029		$	202		$	18,008
Financing Receivables:
Ending balance	$	230,681		$	853,892		$	68,070		$	142,784		$	249,975		$	3,107		$	1,548,509
Ending balance: individually evaluated for impairment	$	227		$	731		$	—		$	88		$	1,970		$	101		$	3,117
Ending balance: collectively evaluated for impairment	$	230,454		$	853,161		$	68,070		$	142,696		$	248,005		$	3,006		$	1,545,392

(1)	Amount includes both home equity lines of credit and term loans

(2)	Includes the unallocated portion of the allowance for loan losses.

	For the Year Ended December 31, 2014
	Commercial and Industrial			Commercial Real Estate			Land & Development			Home Equity⁽¹⁾			Residential Real Estate			Other⁽²⁾			Total
Allowance for loan losses:
Beginning balance	$	12,061		$	14,518		$	1,249		$	3,441		$	2,898		$	1,370		$	35,537
Charge-offs		(10,563	)		(9,205	)		(289	)		(4,568	)		(3,124	)		(3,331	)		(31,080	)
Recoveries		1,235			1,343			467			401			198			342			3,986
Net charge-offs		(9,328	)		(7,862	)		178			(4,167	)		(2,926	)		(2,989	)		(27,094	)
Provision for loan losses		2,401			2,959			(469	)		3,982			3,543			2,387			14,803
Ending balance	$	5,134		$	9,615		$	958		$	3,256		$	3,515		$	768		$	23,246
Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	5,134		$	9,615		$	958		$	3,256		$	3,513		$	768		$	23,246
Financing Receivables:
Ending balance	$	242,494		$	740,282		$	70,156		$	174,165		$	276,993		$	6,054		$	1,510,144
Ending balance: individually evaluated for impairment	$	149		$	3,297		$	138		$	1,751		$	4,759		$	135		$	10,229
Ending balance: collectively evaluated for impairment	$	242,345		$	736,985		$	70,018		$	172,414		$	272,234		$	5,919		$	1,499,915

(1)	Amount includes both home equity lines of credit and term loans

(2)	Includes the unallocated portion of the allowance for loan losses.

Components of Impaired Loans Held-for-Investment

The following tables present the Company’s components of impaired loans, segregated by class of loans at December 31, 2016, 2015 and 2014. Commercial and consumer loans that were collectively evaluated for impairment are not included in the data that follows:

Impaired Loans As of December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Accrued Interest Income Recognized		Cash Interest Income Recognized
With no related allowance:
Commercial:
CRE owner occupied	$	343	$	514	$	—	$	377	$	—	$	—
CRE non owner occupied		517		520		—		523		—		—
Consumer:
Residential real estate		2,084		2,422		—		2,193		—		—
Home Equity Term Loans		72		86		—		74		—		—
Other		85		89		—		85		—		—
With an allowance recorded:
Commercial:
Commercial and industrial		—		—		—		—		—		—
CRE owner occupied		—		—		—		—		—		—
Consumer:
Other		—		—		—		—		—		—
Total commercial	$	860	$	1,034	$	—	$	900	$	—	$	—
Total consumer	$	2,241	$	2,597	$	—	$	2,352	$	—	$	—

6. ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired Loans As of December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Accrued Interest Income Recognized		Cash Interest Income Recognized
With no related allowance:
Commercial:
Commercial and industrial	$	227	$	721	$	—	$	231	$	0	$	—
CRE owner occupied		683		2,066		—		702		—		—
Consumer:
Residential real estate		1,970		2,100		—		1,999		—		—
Home Equity Term Loans		88		96		—		91		—		—
Other		101		101		—		101		—		—
With an allowance recorded:
Commercial:
Commercial and industrial		—		—		—		—		—		—
CRE owner occupied		—		—		—		—		—		—
Consumer:
Other		—		—		—		—		—		—
Total commercial	$	910	$	2,787	$	—	$	933	$	0	$	0
Total consumer	$	2,159	$	2,297	$	—	$	2,191	$	—	$	—

6. ALLOWANCE FOR LOAN LOSSES (Continued)

Impaired Loans As of December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Accrued Interest Income Recognized		Cash Interest Income Recognized
With no related allowance:
Commercial:
Commercial and industrial	$	147	$	149	$	—	$	161	$	19	$	—
Commercial and industrial, held-for-sale		28		50		—		52		—		—
CRE owner occupied		3,297		4,499		—		3,875		—		—
CRE owner occupied, held-for-sale		32		74		—		136		—		—
CRE non-owner occupied, held-for-sale		229		352		—		53		—		—
Land and development		140		223		—		181		—		—
Consumer:
Residential real estate		4,852		5,587		—		4,513		—		97
Residential real estate, held-for-sale		3,478		4,984		—		1,365		—		—
Home Equity Lines of Credit		405		456		—		420		—		—
Home Equity Lines of Credit, held-for-sale		619		903		—		1,282		—		—
Home Equity Term Loans		1,347		1,863		—		1,385		—		—
Home Equity Term Loans, held-for-sale		3,266		4,743		—		3,735		—		—
Other		150		348		—		138		—		—
With an allowance recorded:
Commercial:
Commercial and industrial		—		—		—		—		—		—
CRE owner occupied		—		—		—		—		—		—
Consumer:
Other		—		—		—		—		—		—
Total commercial	$	3,873	$	5,348	$	—	$	4,458	$	19	$	97
Total consumer	$	14,118	$	18,884	$	—	$	12,836	$	—	$	—

Summary of Company's TDR Agreements

There were eight TDR agreements entered into during the twelve months ended December 31, 2016. There were eight TDR agreements entered into during the twelve months ended December 31, 2015. There were no TDR agreements entered into during the twelve months ended December 31, 2014. The following table presents an analysis of the Company’s TDR agreements entered into during the twelve months ended December 31, 2016 and 2015:

Troubled Debt Restructurings for the Twelve Months Ended December 31, 2016
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and industrial		2	$	2,468	$	2,468
CRE owner occupied		1		22		22
Residential real estate		5		906		913

Troubled Debt Restructurings for the Twelve Months Ended December 31, 2015
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and industrial		1	$	11	$	11
CRE owner occupied		2		205		205
Residential real estate		5		739		670

Information Regarding Types of Concessions Granted on Loans

The following tables present information regarding the types of concessions granted on loans that were restructured during the twelve months ended December 31, 2016 and 2015:

Troubled Debt Restructurings for the Twelve Months Ended December 31, 2016
	Number of Contracts		Concession Granted
Commercial and industrial		2	Rate reduction and principal repayment terms.
CRE owner occupied		1	Principal repayment terms.
Residential real estate		2	Principal repayment terms.
Residential real estate		1	Forgiveness of debt
Residential real estate		2	Rate reduction and principal repayment terms.
Troubled Debt Restructurings for the Twelve Months Ended December 31, 2015
	Number of Contracts		Concession Granted
Commercial and industrial		1	Modified principal repayment terms.
CRE owner occupied		2	Modified principal repayment terms.
Residential real estate		5	Rate reduction, modified principal repayment terms and debt forgiveness.

Company's Distribution of Risk Ratings within Held-for-Investment Loan Portfolio

The following tables present the Company’s distribution of risk ratings loan portfolio, segregated by class, as of December 31, 2016, 2015 and 2014:

Credit Quality Indicators As of December 31, 2016
	Commercial								Consumer
	Commercial and industrial		CRE owner occupied		CRE non- owner occupied		Land and development		Home equity lines of credit		Home equity term loans		Residential real estate		Other		Total
Grade:
Pass	$	233,907	$	229,635	$	742,146	$	67,165	$	110,377	$	9,032	$	208,460	$	2,357	$	1,603,079
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		2,039		1,713		516		—		—		72		2,414		85		6,839
Doubtful		—		—		—		—		—		—		—		—		-
Total	$	235,946	$	231,348	$	742,662	$	67,165	$	110,377	$	9,104	$	210,874	$	2,442	$	1,609,918

Credit Quality Indicators As of December 31, 2015
	Commercial								Consumer
	Commercial and industrial		CRE owner occupied		CRE non- owner occupied		Land and development			Home equity lines of credit		Home equity term loans		Residential real estate		Other		Total
Grade:
Pass	$	227,220	$	223,695	$	625,700	$	68,070		$	130,401	$	12,294	$	247,002	$	3,007	$	1,537,389
Special Mention		2,926		2,273		—		—			—		—		—		—		5,199
Substandard		535		2,223		—		—			—		89		2,973		101		5,921
Doubtful		—		—		—		—			—		—		—		—		—
Total	$	230,681	$	228,191	$	625,700	$	68,070		$	130,401	$	12,383	$	249,975	$	3,108	$	1,548,509

6. ALLOWANCE FOR LOAN LOSSES (Continued)

Credit Quality Indicators As of December 31, 2014
	Commercial								Consumer
	Commercial and industrial		CRE owner occupied		CRE non- owner occupied		Land and development		Home equity lines of credit		Home equity term loans		Residential real estate		Other		Total
Grade:
Pass	$	235,985	$	267,018	$	451,921	$	70,018	$	155,084	$	16,819	$	272,044	$	5,902	$	1,474,791
Special Mention		6,304		6,669		—		—		—		—		—		—		12,973
Substandard		205		4,964		9,710		138		1,842		420		4,949		152		22,380
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	242,494	$	278,651	$	461,631	$	70,156	$	156,926	$	17,239	$	276,993	$	6,054	$	1,510,144

Company's Analysis of Past Due Held-for-Investment Loans

The following tables present the Company’s analysis of past due loans, segregated by class of loans, as of December 31, 2016, 2015 and 2014:

	Aging of Receivables
	As of December 31, 2016
	30-59 Days Past Due		60-89 Days Past Due		90 Days Past Due		Total Past Due		Current		Total Financing Receivables		Loans 90 Days Past Due and Accruing
Commercial:
Commercial and industrial	$	—	$	—	$	—	$	—	$	235,946	$	235,946	$	—
CRE owner occupied		—		—		269		269		231,079		231,348		—
CRE non-owner occupied		331		—		185		516		742,146		742,662		—
Land and development		—		—		—		—		67,165		67,165		—
Consumer:
Home equity lines of credit		367		—		—		367		110,010		110,377		—
Home equity term loans		121		—		—		121		8,983		9,104		—
Residential real estate		4,020		851		744		5,615		205,259		210,874		—
Other		59		7		85		151		2,291		2,442		—
Total	$	4,898	$	858	$	1,283	$	7,039	$	1,602,879	$	1,609,918	$	—
	Aging of Receivables
	As of December 31, 2015
	30-59 Days Past Due		60-89 Days Past Due		90 Days Past Due		Total Past Due		Current		Total Financing Receivables		Loans 90 Days Past Due and Accruing
Commercial:
Commercial and industrial	$	1	$	1	$	228	$	230	$	230,451	$	230,681	$	—
CRE owner occupied		736		35		622		1,393		226,798		228,191		—
CRE non-owner occupied		—		—		—		—		625,700		625,700		—
Land and development		—		—		—		—		68,070		68,070		—
Consumer:
Home equity lines of credit		136		31		—		167		130,234		130,401		—
Home equity term loans		14		—		—		14		12,369		12,383		—
Residential real estate		3,504		1,623		911		6,038		243,937		249,975		—
Other		15		3		101		119		2,989		3,108		—
Total	$	4,406	$	1,693	$	1,862	$	7,961	$	1,540,548	$	1,548,509	$	—
	Aging of Receivables
	As of December 31, 2014
	30-59 Days Past Due		60-89 Days Past Due		90 Days Past Due		Total Past Due		Current		Total Financing Receivables		Loans 90 Days Past Due and Accruing
Commercial:
Commercial and industrial	$	4,212	$	105	$	151	$	4,468	$	238,026	$	242,494	$	—
CRE owner occupied		1,685		23		1,321		3,029		275,622		278,651		—
CRE non-owner occupied		2,786		166		—		2,952		458,679		461,631		—
Land and development		—		—		140		140		70,016		70,156		—
Consumer:
Home equity lines of credit		2,001		903		796		3,700		153,226		156,926		—
Home equity term loans		254		188		147		589		16,650		17,239		—
Residential real estate		4,183		670		3,719		8,572		268,421		276,993		—
Other		45		12		136		193		5,861		6,054		—
Total	$	15,166	$	2,069	$	6,411	$	23,643	$	1,486,501	$	1,510,144	$	—