Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Loans Outstanding by Major Lending Classification

Loans outstanding at September 30, 2018 and December 31, 2017, by major lending classification are as follows:

	September 30,			December 31,
	2018			2017
Commercial and industrial	$	840,439		$	715,075
Construction		491,171			448,326
Residential real estate:
1-to-4 family mortgage		553,720			480,989
Residential line of credit		214,741			194,986
Multi-family mortgage		86,264			62,374
Commercial real estate:
Owner occupied		504,149			495,872
Non-owner occupied		628,336			551,588
Consumer and other		219,711			217,701
Gross loans		3,538,531			3,166,911
Less: Allowance for loan losses		(27,608	)		(24,041	)
Net loans	$	3,510,923		$	3,142,870

Changes in Accretable Yield on Purchase Credit Impaired Loans

The following table presents changes in the value of the accretable yield for PCI loans for the periods indicated.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Balance at beginning of period	$	(20,169	)	$	(1,845	)	$	(17,682	)	$	(2,444	)
Additions through the acquisition of the Clayton    Banks		—			(18,457	)		—			(18,457	)
Principal reductions/ pay-offs		(84	)		(690	)		(3,536	)		(1,680	)
Recoveries		—			—						(23	)
Accretion		2,103			1,646			6,943			3,258
Other changes		6			—			(3,869	)		—
Balance at end of period	$	(18,144	)	$	(19,346	)	$	(18,144	)	$	(19,346	)

Allowance for Loan Losses by Portfolio Segment and Related Investment in Loans Net of Unearned Interest

The following provides the allowance for loan losses by portfolio segment and the related investment in loans net of unearned interest for the three and nine months ended September 30, 2018 and 2017:

	Commercial and industrial			Construction			1-to-4 family residential mortgage			Residential line of credit			Multi- family residential mortgage		Commercial real estate owner occupied			Commercial real estate non-owner occupied		Consumer and other			Total
Three Months Ended September 30, 2018
Beginning balance -    June 30, 2018	$	4,747		$	9,023		$	3,378		$	795		$	391	$	3,290		$	3,272	$	1,451		$	26,347
Provision for loan losses		847			(754	)		47			25			292		236			639		486			1,818
Recoveries of loans    previously charged-off		104			13			99			31			—		10			—		103			360
Loans charged off		(333	)		(14	)		(4	)		(13	)		—		(55	)		—		(498	)		(917	)
Ending balance -    September 30, 2018	$	5,365		$	8,268		$	3,520		$	838		$	683	$	3,481		$	3,911	$	1,542		$	27,608
Nine Months Ended September 30, 2018
Beginning balance -    December 31, 2017	$	4,461		$	7,135		$	3,197		$	944		$	434	$	3,558		$	2,817	$	1,495		$	24,041
Provision for loan losses		1,088			35			235			(175	)		249		(163	)		1,043		886			3,198
Recoveries of loans    previously charged-off		374			1,127			157			102			—		141			51		416			2,368
Loans charged off		(558	)		(29	)		(69	)		(33	)		—		(55	)		—		(1,255	)		(1,999	)
Ending balance -    September 30, 2018	$	5,365		$	8,268		$	3,520		$	838		$	683	$	3,481		$	3,911	$	1,542		$	27,608

	Commercial and industrial			Construction			1-to-4 family residential mortgage			Residential line of credit			Multi- family residential mortgage		Commercial real estate owner occupied			Commercial real estate non-owner occupied			Consumer and other			Total
Three Months Ended September 30, 2017
Beginning balance -    June 30, 2017	$	5,440		$	5,579		$	2,974		$	1,445		$	513	$	3,983		$	2,452		$	861		$	23,247
Provision for loan losses		315			(476	)		(269	)		(565	)		10		65			24			112			(784	)
Recoveries of loans    previously charged-off		200			1,022			86			157			—		24			1			104			1,594
Loans charged off		(221	)		—			(32	)		(9	)		—		(64	)		—			(249	)		(575	)
Ending balance -    September 30, 2017	$	5,734		$	6,125		$	2,759		$	1,028		$	523	$	4,008		$	2,477		$	828		$	23,482
Nine Months Ended September 30, 2017
Beginning balance - December 31, 2016	$	5,309		$	4,940		$	3,197		$	1,613		$	504	$	3,302		$	2,019		$	863		$	21,747
Provision for loan losses		(848	)		111			(409	)		(749	)		19		731			(1,184	)		423			(1,906	)
Recoveries of loans    previously charged-off		1,794			1,080			126			368			—		39			1,642			400			5,449
Loans charged off		(521	)		(6	)		(155	)		(204	)		—		(64	)		—			(858	)		(1,808	)
Ending balance -    September 30, 2017	$	5,734		$	6,125		$	2,759		$	1,028		$	523	$	4,008		$	2,477		$	828		$	23,482

Allocation of Allowance for Loan Losses by Loan Category Broken Out Between Loans Individually and Collectively Evaluated for Impairment

The following table provides the allocation of the allowance for loan losses by loan category broken out between loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of September 30, 2018 and December 31, 2017:

													September 30, 2018
	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi- family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Amount of allowance allocated to:
Individually evaluated for    impairment	$	350	$	—	$	8	$	—	$	—	$	58	$	—	$	—	$	416
Collectively evaluated for    impairment		5,002		8,196		3,401		838		683		3,410		3,544		1,507		26,581
Acquired with deteriorated    credit quality		13		72		111		—		—		13		367		35		611
Ending balance -    September 30, 2018	$	5,365	$	8,268	$	3,520	$	838	$	683	$	3,481	$	3,911	$	1,542	$	27,608

													December 31, 2017
	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi- family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Amount of allowance allocated to:
Individually evaluated for    impairment	$	20	$	—	$	18	$	—	$	—	$	120	$	33	$	—	$	191
Collectively evaluated for    impairment		4,441		7,135		3,179		944		434		3,438		2,784		1,495		23,850
Acquired with deteriorated    credit quality		—		—		—		—		—		—		—		—		—
Ending balance -    December 31, 2017	$	4,461	$	7,135	$	3,197	$	944	$	434	$	3,558	$	2,817	$	1,495	$	24,041

Amount of Loans by Loan Category Broken Between Loans Individually and Collectively Evaluated for Impairment and Acquired with Deteriorated Credit Quality

The following table provides the amount of loans by loan category broken between loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of September 30, 2018 and December 31, 2017:

													September 30, 2018
	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi- family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Loans, net of unearned income
Individually evaluated for    impairment	$	3,623	$	1,276	$	1,493	$	253	$	187	$	2,035	$	1,049	$	80	$	9,996
Collectively evaluated for    impairment		835,213		483,072		532,138		214,488		86,077		494,631		610,724		198,541		3,454,884
Acquired with deteriorated    credit quality		1,603		6,823		20,089		—		—		7,483		16,563		21,090		73,651
Ending balance -    September 30, 2018	$	840,439	$	491,171	$	553,720	$	214,741	$	86,264	$	504,149	$	628,336	$	219,711	$	3,538,531

													December 31, 2017
	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi- family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Loans, net of unearned income
Individually evaluated    for impairment	$	1,579	$	1,289	$	1,262	$	—	$	978	$	2,520	$	1,720	$	25	$	9,373
Collectively evaluated    for impairment		711,352		439,309		456,229		194,986		61,376		481,390		531,704		192,357		3,068,703
Acquired with deteriorated    credit quality		2,144		7,728		23,498		—		20		11,962		18,164		25,319		88,835
Ending balance -    December 31, 2017	$	715,075	$	448,326	$	480,989	$	194,986	$	62,374	$	495,872	$	551,588	$	217,701	$	3,166,911

Credit Quality Indicators by Portfolio Class

The following table shows credit quality indicators by portfolio class at September 30, 2018 and December 31, 2017:

September 30, 2018	Pass		Watch		Substandard		Total
Loans, excluding purchased credit impaired loans
Commercial and industrial	$	781,698	$	50,230	$	6,908	$	838,836
Construction		479,035		3,926		1,387		484,348
Residential real estate:
1-to-4 family mortgage		517,598		9,119		6,914		533,631
Residential line of credit		211,114		1,328		2,299		214,741
Multi-family mortgage		86,000		78		186		86,264
Commercial real estate:
Owner occupied		465,223		17,022		14,421		496,666
Non-owner occupied		593,771		16,720		1,282		611,773
Consumer and other		191,140		2,978		4,503		198,621
Total loans, excluding purchased credit impaired    loans	$	3,325,579	$	101,401	$	37,900	$	3,464,880
Purchased credit impaired loans
Commercial and industrial	$	—	$	1,068	$	535	$	1,603
Construction		—		3,276		3,547		6,823
Residential real estate:
1-to-4 family mortgage		—		15,666		4,423		20,089
Residential line of credit		—		—		—		—
Multi-family mortgage		—		—		—		—
Commercial real estate:
Owner occupied		—		4,311		3,172		7,483
Non-owner occupied		—		8,433		8,130		16,563
Consumer and other		—		18,451		2,639		21,090
Total purchased credit impaired loans	$	—	$	51,205	$	22,446	$	73,651
Total loans	$	3,325,579	$	152,606	$	60,346	$	3,538,531

December 31, 2017	Pass		Watch		Substandard		Total
Loans, excluding purchased credit impaired loans
Commercial and industrial	$	657,595	$	50,946	$	4,390	$	712,931
Construction		431,242		7,388		1,968		440,598
Residential real estate:
1-to-4 family mortgage		440,202		9,522		7,767		457,491
Residential line of credit		192,427		1,184		1,375		194,986
Multi-family mortgage		61,234		142		978		62,354
Commercial real estate:
Owner occupied		451,140		28,308		4,462		483,910
Non-owner occupied		517,253		14,199		1,972		533,424
Consumer and other		189,081		2,712		589		192,382
Total loans, excluding purchased credit impaired    loans	$	2,940,174	$	114,401	$	23,501	$	3,078,076
Purchased credit impaired loans
Commercial and industrial	$	—	$	1,499	$	645	$	2,144
Construction		—		3,324		4,404		7,728
Residential real estate:
1-to-4 family mortgage		—		20,284		3,214		23,498
Residential line of credit		—		—		—		—
Multi-family mortgage		—		—		20		20
Commercial real estate:
Owner occupied		—		4,631		7,331		11,962
Non-owner occupied		—		7,359		10,805		18,164
Consumer and other		—		19,751		5,568		25,319
Total purchased credit impaired loans	$	—	$	56,848	$	31,987	$	88,835
Total loans	$	2,940,174	$	171,249	$	55,488	$	3,166,911

Past Due Loans

Nonperforming loans include loans that are no longer accruing interest (non-accrual loans) and loans past due ninety or more days and still accruing interest. Nonperforming loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category.

The following table provides the period-end amounts of loans that are past due thirty to eighty-nine days, past due ninety or more days and still accruing interest, loans not accruing interest, loans current on payments accruing interest and purchased credit impaired loans by category at September 30, 2018 and December 31, 2017:

September 30, 2018	30-89 days past due		90 days or more and accruing interest		Non-accrual loans		Loans current on payments and accruing interest		Purchased Credit Impaired loans		Total
Commercial and industrial	$	2,491	$	120	$	2,158	$	834,067	$	1,603	$	840,439
Construction		337		17		270		483,724		6,823		491,171
Residential real estate:
1-to-4 family mortgage		4,170		875		1,633		526,953		20,089		553,720
Residential line of credit		635		492		831		212,783		—		214,741
Multi-family mortgage		—		—		—		86,264		—		86,264
Commercial real estate:
Owner occupied		1,943		111		2,203		492,409		7,483		504,149
Non-owner occupied		636		—		1,206		609,931		16,563		628,336
Consumer and other		2,099		749		54		195,719		21,090		219,711
Total	$	12,311	$	2,364	$	8,355	$	3,441,850	$	73,651	$	3,538,531

December 31, 2017	30-89 days past due		90 days or more and accruing interest		Non-accrual loans		Loans current on payments and accruing interest		Purchased Credit Impaired loans		Total
Commercial and industrial	$	5,859	$	90	$	533	$	706,449	$	2,144	$	715,075
Construction		1,412		241		300		438,645		7,728		448,326
Residential real estate:
1-to-4 family mortgage		4,678		956		2,548		449,309		23,498		480,989
Residential line of credit		527		134		699		193,626		—		194,986
Multi-family mortgage		—		—		—		62,354		20		62,374
Commercial real estate:
Owner occupied		521		358		2,582		480,449		11,962		495,872
Non-owner occupied		121		—		1,371		531,932		18,164		551,588
Consumer and other		1,945		217		68		190,152		25,319		217,701
Total	$	15,063	$	1,996	$	8,101	$	3,052,916	$	88,835	$	3,166,911

Impaired Loans Recognized, Segregated by Class

Impaired loans recognized in conformity with ASC 310-20 at September 30, 2018 and December 31, 2017, segregated by class, were as follows:

September 30, 2018	Recorded investment		Unpaid principal		Related allowance
With a related allowance recorded:
Commercial and industrial	$	1,691	$	1,691	$	350
Residential real estate:
1-to-4 family mortgage		184		485		8
Commercial real estate:
Owner occupied		567		639		58
Total	$	2,442	$	2,815	$	416
With no related allowance recorded
Commercial and industrial	$	1,932	$	2,106	$	—
Construction		1,276		1,313		—
Residential real estate:
1-to-4 family mortgage		1,309		1,315		—
Residential line of credit		253		253		—
Multi-family mortgage		187		186		—
Commercial real estate:
Owner occupied		1,468		2,161		—
Non-owner occupied		1,049		1,781		—
Consumer and other		80		80		—
Total	$	7,554	$	9,195	$	—
Total impaired loans	$	9,996	$	12,010	$	416

December 31, 2017	Recorded investment		Unpaid principal		Related allowance
With a related allowance recorded:
Commercial and industrial	$	53	$	53	$	20
Residential real estate:
1-to-4 family mortgage		194		495		18
Commercial real estate:
Owner occupied		844		1,123		120
Non-owner occupied		144		150		33
Total	$	1,235	$	1,821	$	191
With no related allowance recorded:
Commercial and industrial	$	1,526	$	1,570	$	—
Construction		1,289		1,313		—
Residential real estate:
1-to-4 family mortgage		1,068		1,072		—
Multi-family mortgage		978		978		—
Commercial real estate:
Owner occupied		1,676		2,168		—
Non-owner occupied		1,576		2,325		—
Consumer and other		25		25		—
Total	$	8,138	$	9,451	$	—
Total impaired loans	$	9,373	$	11,272	$	191

Average recorded investment and interest income on a cash basis recognized during the three and nine months ended September 30, 2018 and 2017 on impaired loans, segregated by class, were as follows:

	Three Months Ended				Nine Months Ended
September 30, 2018	Average recorded investment		Interest income recognized (cash basis)		Average recorded investment		Interest income recognized (cash basis)
With a related allowance recorded:
Commercial and industrial	$	922	$	81	$	872	$	84
Residential real estate:
1-to-4 family mortgage		186		2		189		7
Commercial real estate:
Owner occupied		661		7		706		34
Non-owner occupied		—		—		72		2
Total	$	1,769	$	90	$	1,839	$	127
With no related allowance recorded:
Commercial and industrial	$	1,983	$	21	$	1,729	$	80
Construction		1,279		35		1,283		70
Residential real estate:
1-to-4 family mortgage		1,313		15		1,189		60
Residential line of credit		127		8		127		8
Multi-family mortgage		569		2		583		26
Commercial real estate:
Owner occupied		1,490		27		1,572		87
Non-owner occupied		1,049		—		1,313		7
Consumer and other		54		1		53		2
Total	$	7,864	$	109	$	7,849	$	340
Total impaired loans	$	9,633	$	199	$	9,688	$	467
September 30, 2017
With a related allowance recorded:
Commercial and industrial	$	392	$	2	$	454	$	2
Residential real estate:
1-to-4 family mortgage		148		7		151		7
Commercial real estate:
Owner occupied		843		39		856		39
Non-owner occupied		328		3		650		3
Consumer and other		11		1		12		1
Total	$	1,722	$	52	$	2,123	$	52
With no related allowance recorded:
Commercial and industrial	$	633	$	34	$	698	$	34
Construction		797		41		1,991		41
Residential real estate:
1-to-4 family mortgage		1,584		51		1,721		51
Residential line of credit		—		—		156		—
Multi-family mortgage		995		34		1,008		34
Commercial real estate:
Owner occupied		1,737		92		1,913		92
Non-owner occupied		1,590		12		1,317		12
Consumer and other		13		—		14		—
Total	$	7,349	$	264	$	8,818	$	264
Total impaired loans	$	9,071	$	316	$	10,941	$	316

Financial Effect of TDRs

The following tables present the financial effect of TDRs recorded during the periods indicated:

Three Months Ended September 30, 2018	Number of loans		Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial real estate:
Owner occupied		1	$	143	$	143	$	—
Consumer and other		4		55		55		—
Total		5	$	198	$	198	$	—

Nine Months Ended September 30, 2018	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	2	$	887	$	887	$	—
Residential real estate:
1-to-4 family mortgage	1		249		249		—
Commercial real estate:
Owner occupied	1		143		143		—
Consumer and other	5		61		61		—
Total	9	$	1,340	$	1,340	$	—

Nine Months Ended September 30, 2017	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	1	$	5	$	5	$	—
Residential real estate:
1-4 family mortgage	1		143		143		8
Commercial real estate:
Owner occupied	1		377		377		—
Non-owner occupied	2		711		711		—
Total	5	$	1,236	$	1,236	$	8