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Loans and the Allowance for Loan Losses (Tables)
 12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
The composition of net loans is summarized as follows:

 
 
Year Ended December 31,
(Dollars In Thousands)
 
2017
 
Percentage of Total
 
2016
 
Percentage of Total
Commercial real estate - owner occupied
 
$
467,082

 
23.60
%
 
$
250,440

 
23.87
%
Commercial real estate - non-owner occupied
 
436,083

 
22.04

 
184,688

 
17.59

Residential real estate
 
489,669

 
24.74

 
204,413

 
19.47

Commercial
 
463,652

 
23.43

 
311,486

 
29.67

Real estate construction
 
97,481

 
4.93

 
91,822

 
8.75

Consumer
 
24,942

 
1.26

 
6,849

 
0.65

Total loans
 
$
1,978,909

 
100.00
%
 
$
1,049,698

 
100.00
%
Less allowance for loan losses
 
15,805

 
 

 
16,008

 
 

Net loans
 
$
1,963,104

 
 

 
$
1,033,690

 
 
Servicing Asset at Amortized Cost
The following table present the changes in the accretable yield for purchased credit impaired loans for the year ended December 31, 2017:

(In Thousands)
 
2017
Accretable yield, beginning of period
 
$
—

   Additions
 
557

   Accretion
 
(313
)
   Reclassification from (to) nonaccretable difference
 
—

   Other changes, net
 
—

Accretable yield, end of period
 
$
244
Schedule of Financing Receivable Allowance for Credit Losses
The following provides detailed information about the changes in the allowance for loan losses for the years ended December 31, 2017, 2016 and 2015 as well as the recorded investment in loans at December 31, 2017 and 2016. 

 
 
Allowance for Loan Losses
Twelve months ended December 31, 2017
 
Commercial real
estate - owner
occupied
 
Commercial real
estate - non-owner
occupied
 
Residential
real estate
 
Commercial
 
Real estate
construction
 
Consumer
 
Total
 
 
(In Thousands)
Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
2,943

 
$
2,145

 
$
2,510

 
$
7,053

 
$
1,277

 
$
80

 
$
16,008

Charge-offs
 
—

 
—

 
—

 
(7,457
)
 
—

 
(27
)
 
(7,484
)
Recoveries
 
17

 
—

 
131

 
209

 
—

 
5

 
362

Provisions
 
1,320

 
959

 
(460
)
 
5,645

 
(571
)
 
26

 
6,919

Ending Balance
 
$
4,280

 
$
3,104

 
$
2,181

 
$
5,450

 
$
706

 
$
84

 
$
15,805


Twelve months ended December 31, 2016
 
Commercial real
estate - owner
occupied
 
Commercial real
estate - non-owner
occupied
 
Residential
real estate
 
Commercial
 
Real estate
construction
 
Consumer
 
Total
 
 
(In Thousands)
Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
3,042

 
$
1,862

 
$
2,862

 
$
4,612

 
$
1,056

 
$
129

 
$
13,563

Charge-offs
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Recoveries
 
—

 
—

 
40

 
285

 
—

 
—

 
325

Provisions
 
(99
)
 
283

 
(392
)
 
2,156

 
221

 
(49
)
 
2,120

Ending Balance
 
$
2,943

 
$
2,145

 
$
2,510

 
$
7,053

 
$
1,277

 
$
80

 
$
16,008


Twelve months ended December 31, 2015
 
Commercial real
estate - owner
occupied
 
Commercial real
estate - non-owner
occupied
 
Residential
real estate
 
Commercial
 
Real estate
construction
 
Consumer
 
Total
 
 
(In Thousands)
Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning Balance
 
$
3,229

 
$
1,894

 
$
3,308

 
$
4,284

 
$
596

 
$
88

 
$
13,399

Charge-offs
 
—

 
—

 
—

 
(186
)
 
—

 
—

 
(186
)
Recoveries
 
—

 
—

 
61

 
102

 
37

 
—

 
200

Provisions
 
(187
)
 
(32
)
 
(507
)
 
412

 
423

 
41

 
150

Ending Balance
 
$
3,042

 
$
1,862

 
$
2,862

 
$
4,612

 
$
1,056

 
$
129

 
$
13,563


Loans acquired in a transfer, including in business combinations, where there is evidence of credit deterioration since origination and it is probable at the date of acquisition that the Corporation will not collect all contractually required principal and interest payments, are accounted for as purchased credit impaired loans. Purchased credit impaired loans are initially recorded at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, the historical allowance for loan losses related to these loans is not carried over.

Accounting for purchased credit impaired loans involves estimating fair value, at acquisition, using the principal and interest cash flows expected to be collected discounted at the prevailing market rate of interest. The excess of cash flows expected to be collected over the estimated fair value at the acquisition date is referred to as the accretable yield and is recognized in interest income using an effective yield method over the remaining life of the loans. The difference between contractually required payments and the cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the nonaccretable difference and is not recorded. Any decreases in cash flows expected to be collected (other than due to decreases in interest rate indices and changes in prepayment and assumptions) will be charged to the provision for loan losses, resulting in an increase to the allowance for loan losses.

The following table present the changes in the accretable yield for purchased credit impaired loans for the year ended December 31, 2017:

(In Thousands)
 
2017
Accretable yield, beginning of period
 
$
—

   Additions
 
557

   Accretion
 
(313
)
   Reclassification from (to) nonaccretable difference
 
—

   Other changes, net
 
—

Accretable yield, end of period
 
$
244



 
 
Recorded Investment in Loans
December 31, 2017
 
Commercial real
estate - owner
occupied
 
Commercial real
estate - non-owner
occupied
 
Residential
real estate
 
Commercial
 
Real estate
construction
 
Consumer
 
Total
 
 
(In Thousands)
Allowance
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance:
 
$
4,280

 
$
3,104

 
$
2,181

 
$
5,450

 
$
706

 
$
84

 
$
15,805

Ending balance: individually evaluated for impairment
 
$
—

 
$
—

 
$
—

 
$
234

 
$
186

 
$
—

 
$
420

Ending balance: collectively evaluated for impairment
 
$
4,280

 
$
3,104

 
$
2,181

 
$
5,216

 
$
520

 
$
84

 
$
15,385

Ending balance: loans acquired with deteriorated credit quality
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance:
 
$
467,082

 
$
436,083

 
$
489,669

 
$
463,652

 
$
97,481

 
$
24,942

 
$
1,978,909

Ending balance: individually evaluated for impairment
 
$
1,393

 
$
—

 
$
166

 
$
3,107

 
$
865

 
$
182

 
$
5,713

Ending balance: collectively evaluated for impairment
 
$
464,030

 
$
435,109

 
$
487,390

 
$
460,369

 
$
96,616

 
$
24,713

 
$
1,968,227

Ending balance: loans acquired with deteriorated credit quality
 
$
1,659

 
$
974

 
$
2,113

 
$
176

 
$
—

 
$
47

 
$
4,969


December 31, 2016
 
Commercial real
estate - owner
occupied
 
Commercial real
estate - non-owner
occupied
 
Residential
real estate
 
Commercial
 
Real estate
construction
 
Consumer
 
Total
 
 
(In Thousands)
Allowance
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance:
 
$
2,943

 
$
2,145

 
$
2,510

 
$
7,053

 
$
1,277

 
$
80

 
$
16,008

Ending balance: individually evaluated for impairment
 
$
—

 
$
—

 
$
—

 
$
2,805

 
$
221

 
$
—

 
$
3,026

Ending balance: collectively evaluated for impairment
 
$
2,943

 
$
2,145

 
$
2,510

 
$
4,248

 
$
1,056

 
$
80

 
$
12,982

Ending balance: loans acquired with deteriorated credit quality
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Ending balance:
 
$
250,440

 
$
184,688

 
$
204,413

 
$
311,486

 
$
91,822

 
$
6,849

 
$
1,049,698

Ending balance: individually evaluated for impairment
 
$
335

 
$
—

 
$
606

 
$
6,182

 
$
940

 
$
—

 
$
8,063

Ending balance: collectively evaluated for impairment
 
$
250,105

 
$
184,688

 
$
203,807

 
$
305,304

 
$
90,882

 
$
6,849

 
$
1,041,635

Ending balance: loans acquired with deteriorated credit quality
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—
Schedule of Financing Receivable Recorded Investment Credit Quality Indicator
The profile of the loan portfolio, as indicated by risk rating, as of December 31, 2017 and 2016 is shown below.

 
 
December 31, 2017
Credit Risk Profile by Risk Rating
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Loss
 
Unearned
Income
 
Total Loans
 
 
(In Thousands)
Commercial real estate - owner occupied
 
$
465,464

 
$
1,639

 
$
758

 
$
—

 
$
—

 
$
(779
)
 
$
467,082

Commercial real estate - non-owner occupied
 
437,087

 
—

 
—

 
—

 
—

 
(1,004
)
 
436,083

Residential real estate
 
487,800

 
189

 
1,835

 
—

 
—

 
(155
)
 
489,669

Commercial
 
461,091

 
1,615

 
1,750

 
—

 
—

 
(804
)
 
463,652

Real estate construction
 
92,522

 
5,349

 
—

 
—

 
—

 
(390
)
 
97,481

Consumer
 
24,928

 
—

 
10

 
—

 
—

 
4

 
24,942

Total
 
$
1,968,892

 
$
8,792

 
$
4,353

 
$
—

 
$
—

 
$
(3,128
)
 
$
1,978,909


 
 
December 31, 2016
Credit Risk Profile by Risk Rating
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Loss
 
Unearned
Income
 
Total Loans
 
 
(In Thousands)
Commercial real estate - owner occupied
 
$
247,001

 
$
1,213

 
$
2,807

 
$
—

 
$
—

 
$
(581
)
 
$
250,440

Commercial real estate - non-owner occupied
 
185,020

 
300

 
—

 
—

 
—

 
(632
)
 
184,688

Residential real estate
 
202,762

 
932

 
878

 
—

 
—

 
(159
)
 
204,413

Commercial
 
287,978

 
4,544

 
19,561

 
—

 
—

 
(597
)
 
311,486

Real estate construction
 
91,296

 
—

 
940

 
—

 
—

 
(414
)
 
91,822

Consumer
 
6,848

 
—

 
—

 
—

 
—

 
1

 
6,849

Total
 
$
1,020,905

 
$
6,989

 
$
24,186

 
$
—

 
$
—

 
$
(2,382
)
 
$
1,049,698
Financing Receivable Credit Quality Indicators
The risk profile based upon payment activity is shown below.

 
 
December 31, 2017
Credit Risk Profile Based on Payment Activity
 
Performing
 
Non-Performing
 
Total Loans
 
 
(In Thousands)
Commercial real estate - owner occupied
 
$
466,016

 
$
1,066

 
$
467,082

Commercial real estate - non-owner occupied
 
436,083

 
—

 
436,083

Residential real estate
 
489,669

 
—

 
489,669

Commercial
 
461,139

 
2,513

 
463,652

Real estate construction
 
96,616

 
865

 
97,481

Consumer
 
24,760

 
182

 
24,942

Total
 
$
1,974,283

 
$
4,626

 
$
1,978,909


 
 
December 31, 2016
Credit Risk Profile Based on Payment Activity
 
Performing
 
Non-Performing
 
Total Loans
 
 
(In Thousands)
Commercial real estate - owner occupied
 
$
250,440

 
$
—

 
$
250,440

Commercial real estate - non-owner occupied
 
184,688

 
—

 
184,688

Residential real estate
 
203,982

 
431

 
204,413

Commercial
 
305,935

 
5,551

 
311,486

Real estate construction
 
90,882

 
940

 
91,822

Consumer
 
6,849

 
—

 
6,849

Total
 
$
1,042,776

 
$
6,922

 
$
1,049,698
Past Due Financing Receivables
The delinquency status of the loans in the portfolio is shown below as of December 31, 2017 and 2016. Loans that were on non-accrual status are not included in any past due amounts.

 
 
Age Analysis of Past Due Loans
December 31, 2017
 
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater than
 90 Days
 
Total Past
Due
 
Non-accrual
Loans
 
Current
Loans
 
Total
Loans
 
 
(In Thousands)
Commercial real estate - owner occupied
 
$
—

 
$
—

 
$
—

 
$
—

 
$
1,066

 
$
466,016

 
$
467,082

Commercial real estate - non-owner occupied
 
—

 
—

 
—

 
—

 
—

 
436,083

 
436,083

Residential real estate
 
655

 
140

 
213

 
1,008

 
—

 
488,661

 
489,669

Commercial
 
138

 
19

 
—

 
157

 
2,513

 
460,982

 
463,652

Real estate construction
 
—

 
—

 
—

 
—

 
865

 
96,616

 
97,481

Consumer
 
81

 
2

 
—

 
83

 
182

 
24,677

 
24,942

Total
 
$
874

 
$
161

 
$
213

 
$
1,248

 
$
4,626

 
$
1,973,035

 
$
1,978,909


 
 
12/31/2016
 
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater than
90 Days
 
Total Past
Due
 
Non-accrual
Loans
 
Current
Loans
 
Total
Loans
 
 
(In Thousands)
Commercial real estate - owner occupied
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
250,440

 
$
250,440

Commercial real estate - non-owner occupied
 
—

 
—

 
—

 
—

 
—

 
184,688

 
184,688

Residential real estate
 
—

 
97

 
—

 
97

 
431

 
203,885

 
204,413

Commercial
 
438

 
—

 
—

 
438

 
5,551

 
305,497

 
311,486

Real estate construction
 
—

 
—

 
—

 
—

 
940

 
90,882

 
91,822

Consumer
 
—

 
—

 
—

 
—

 
—

 
6,849

 
6,849

Total
 
$
438

 
$
97

 
$
—

 
$
535

 
$
6,922

 
$
1,042,241

 
$
1,049,698
Schedule Of Financing Receivable Troubled Debt Restructurings
The table below shows the results of management’s analysis of impaired loans as of December 31, 2017 and 2016.

 
 
Impaired Loans
 
 
December 31, 2017
 
December 31, 2016
 
 
Recorded
investment
 
Unpaid principal
balance
 
Related
allowance
 
Recorded
investment
 
Unpaid principal
balance
 
Related
allowance
 
 
(In Thousands)
With no specific related allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
Commercial real estate - owner occupied
 
$
1,066

 
$
1,092

 
$
—

 
$
—

 
$
—

 
$
—

Commercial real estate - non-owner occupied
 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
—

 
—

 
—

 
431

 
431

 
—

Commercial
 
747

 
1,080

 
—

 
2,748

 
3,771

 
—

Real estate construction
 
—

 
—

 
—

 
—

 
—

 
—

Consumer
 
145

 
155

 
—

 
—

 
—

 
—

With a specific related allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate - owner occupied
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Commercial real estate - non-owner occupied
 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
—

 
—

 
—

 
—

 
—

 
—

Commercial
 
1,766

 
1,817

 
234

 
2,803

 
1,400

 
2,805

Real estate construction
 
865

 
952

 
186

 
940

 
994

 
221

Consumer
 
37

 
38

 
—

 
—

 
—

 
—

Total:
 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate - owner occupied
 
$
1,066

 
$
1,092

 
$
—

 
$
—

 
$
—

 
$
—

Commercial real estate - non-owner occupied
 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
—

 
—

 
—

 
431

 
431

 
—

Commercial
 
2,513

 
2,897

 
234

 
5,551

 
5,171

 
2,805

Real estate construction
 
865

 
952

 
186

 
940

 
994

 
221

Consumer
 
182

 
193

 
—

 
—

 
—

 
—

 
 
$
4,626

 
$
5,134

 
$
420

 
$
6,922

 
$
6,596

 
$
3,026
Impaired Financing Receivables
The table below shows the average recorded investment in impaired loans for the years ended December 31, 2017, 2016 and 2015.

 
 
Twelve Months Ended
 
 
December 31, 2017
 
December 31, 2016
 
December 31, 2015
 
 
Average Recorded
Investment
 
Average Recorded
Investment
 
Average Recorded
Investment
 
 
(In Thousands)
Commercial real estate - owner occupied
 
$
1,075

 
$
59

 
$
—

Commercial real estate - non-owner occupied
 
—

 
2,099

 
5,572

Residential real estate
 
—

 
120

 
163

Commercial
 
3,395

 
4,885

 
917

Real estate construction
 
923

 
1,009

 
1,086

Consumer
 
179

 
—

 
—

 
 
$
5,572

 
$
8,172

 
$
7,738

The following table presents the acquired impaired loans receivable at the Acquisition Date (dollars in thousands):

Contractual principal and interest at acquisition
 
$
7,835

Nonaccretable difference
 
(3,427
)
Expected cash flows at acquisition
 
4,408

Accretable yield
 
(186
)
     Fair value of purchased impaired loans
 
$
4,222
Schedule of Debtor Troubled Debt Restructuring, Current Period
The table below shows the results of management’s analysis of troubled debt restructurings as of December 31, 2017 and 2016. 

 
 
Troubled Debt Restructurings
 
 
December 31, 2017
 
December 31, 2016
 
 
Number of
loans
 
Outstanding
balance
 
Recorded
investment
 
Number of
loans
 
Outstanding
balance
 
Recorded
investment
 
 
(Dollars in Thousands)
Performing
 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate - owner occupied
 
—

 
$
—

 
$
—

 
—

 
$
—

 
$
—

Commercial real estate - non-owner occupied
 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
1

 
208

 
166

 
1

 
217

 
175

Commercial
 
2

 
921

 
921

 
2

 
967

 
967

Real estate construction
 
—

 
—

 
—

 
—

 
—

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Performing
 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate - owner occupied
 
—

 
$
—

 
$
—

 
—

 
$
—

 
$
—

Commercial real estate - non-owner occupied
 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
—

 
—

 
—

 
—

 
—

 
—

Commercial
 
2

 
956

 
956

 
2

 
2,000

 
2,000

Real estate construction
 
—

 
—

 
—

 
1

 
994

 
940

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
5

 
$
2,085

 
$
2,043

 
6

 
$
4,178

 
$
4,082