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Allowance for Loan Losses
 3 Months Ended
Mar. 31, 2019
Receivables [Abstract]  
Allowance for Loan Losses

 

Note 5 Allowance for Loan Losses

 

The tables below detail the Company’s allowance for loan losses and recorded investment in loans as of and for the three months ended March 31, 2019 and 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  March 31, 2019

 

 

 

 

 

Non-owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

commercial

 

Residential

 

 

 

 

 

 

 

   

Commercial

    

real estate

    

real estate

    

Consumer

    

Total

Beginning balance

 

$

27,137

 

$

4,406

 

$

3,800

 

$

349

 

$

35,692

Originated and acquired beginning balance

 

 

26,946

 

 

4,406

 

 

3,760

 

 

349

 

 

35,461

Charge-offs

 

 

(12)

 

 

 —

 

 

(23)

 

 

(233)

 

 

(268)

Recoveries

 

 

27

 

 

11

 

 

13

 

 

46

 

 

97

Provision

 

 

933

 

 

497

 

 

(66)

 

 

186

 

 

1,550

Originated and acquired ending balance

 

 

27,894

 

 

4,914

 

 

3,684

 

 

348

 

 

36,840

ASC 310-30 beginning balance

 

 

191

 

 

 —

 

 

40

 

 

 —

 

 

231

Charge-offs

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Recoveries

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Recoupment

 

 

(10)

 

 

 —

 

 

(6)

 

 

 —

 

 

(16)

ASC 310-30 ending balance

 

 

181

 

 

 —

 

 

34

 

 

 —

 

 

215

Ending balance

 

$

28,075

 

$

4,914

 

$

3,718

 

$

348

 

$

37,055

Ending allowance balance attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated and acquired loans individually evaluated for impairment

 

$

1,471

 

$

39

 

$

36

 

$

 —

 

$

1,546

Originated and acquired loans collectively evaluated for impairment

 

 

26,423

 

 

4,875

 

 

3,648

 

 

348

 

 

35,294

ASC 310-30 loans

 

 

181

 

 

 —

 

 

34

 

 

 —

 

 

215

Total ending allowance balance

 

$

28,075

 

$

4,914

 

$

3,718

 

$

348

 

$

37,055

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated and acquired loans individually evaluated for impairment

 

$

18,786

 

$

2,430

 

$

4,583

 

$

6,944

 

$

32,743

Originated and acquired loans collectively evaluated for impairment

 

 

2,718,219

 

 

606,646

 

 

810,561

 

 

15,245

 

 

4,150,671

ASC 310-30 loans

 

 

19,139

 

 

36,878

 

 

7,508

 

 

 2

 

 

63,527

Total loans

 

$

2,756,144

 

$

645,954

 

$

822,652

 

$

22,191

 

$

4,246,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended  March 31, 2018

 

 

 

 

 

Non-owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

occupied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

commercial

 

Residential

 

 

 

 

 

 

 

   

Commercial

    

real estate

    

real estate

    

Consumer

    

Total

Beginning balance

 

$

21,385

 

$

5,609

 

$

3,965

 

$

305

 

$

31,264

Originated and acquired beginning balance

 

 

21,340

 

 

5,583

 

 

3,965

 

 

305

 

 

31,193

Charge-offs

 

 

(437)

 

 

 —

 

 

 —

 

 

(279)

 

 

(716)

Recoveries

 

 

42

 

 

 —

 

 

 2

 

 

53

 

 

97

Provision

 

 

540

 

 

(712)

 

 

(39)

 

 

211

 

 

 —

Originated and acquired ending balance

 

 

21,485

 

 

4,871

 

 

3,928

 

 

290

 

 

30,574

ASC 310-30 beginning balance

 

 

45

 

 

26

 

 

 —

 

 

 —

 

 

71

Charge-offs

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Recoveries

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Provision (recoupment)

 

 

48

 

 

(7)

 

 

 —

 

 

 —

 

 

41

ASC 310-30 ending balance

 

 

93

 

 

19

 

 

 —

 

 

 —

 

 

112

Ending balance

 

$

21,578

 

$

4,890

 

$

3,928

 

$

290

 

$

30,686

Ending allowance balance attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated and acquired loans individually evaluated for impairment

 

$

1,185

 

$

 2

 

$

31

 

$

 —

 

$

1,218

Originated and acquired loans collectively evaluated for impairment

 

 

20,300

 

 

4,868

 

 

3,897

 

 

290

 

 

29,355

ASC 310-30 loans

 

 

93

 

 

20

 

 

 —

 

 

 —

 

 

113

Total ending allowance balance

 

$

21,578

 

$

4,890

 

$

3,928

 

$

290

 

$

30,686

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated and acquired loans individually evaluated for impairment

 

$

24,175

 

$

1,901

 

$

8,558

 

$

38

 

$

34,672

Originated and acquired loans collectively evaluated for impairment

 

 

2,057,022

 

 

633,537

 

 

838,597

 

 

26,197

 

 

3,555,353

ASC 310-30 loans

 

 

24,702

 

 

75,277

 

 

12,000

 

 

330

 

 

112,309

Total loans

 

$

2,105,899

 

$

710,715

 

$

859,155

 

$

26,565

 

$

3,702,334

 

 

In evaluating the loan portfolio for an appropriate ALL level, non-impaired originated and acquired loans were grouped into segments based on broad characteristics such as primary use and underlying collateral. Within the segments, the portfolio was further disaggregated into classes of loans with similar attributes and risk characteristics for purposes of applying loss ratios and determining applicable subjective adjustments to the ALL. The application of subjective adjustments was based upon qualitative risk factors, including economic trends and conditions, industry conditions, asset quality, loss trends, lending management, portfolio growth and loan review/internal audit results.

 

Net charge-offs on originated and acquired loans during the three months ended March 31, 2019 were $0.2 million. Management’s evaluation of credit quality resulted in provision for originated and acquired loan losses of $1.6 million during the three months ended March 31, 2019. No provision was recorded for loan losses on originated and acquired loans during the three months ended March 31, 2018.

 

During the three months ended March 31, 2019 and 2018, the Company re-estimated the expected cash flows of the loan pools accounted for under ASC 310-30. The remeasurement during the three months ended March 31, 2019 resulted in a net recoupment of $16 thousand. The remeasurement during the three months ended March 31, 2018 resulted in a net provision of $41 thousand.