Loans and allowance for loan losses (Tables)

3 Months Ended

Mar. 31, 2019

Loans Outstanding by Major Lending Classification

Loans outstanding at March 31, 2019 and December 31, 2018, by major lending classification are as follows:



	March 31,			December 31,
	2019			2018
Commercial and industrial	$	888,345		$	867,083
Construction	539,065			556,051
Residential real estate:
1-to-4 family mortgage	552,239			555,815
Residential line of credit	187,415			190,480
Multi-family mortgage	71,532			75,457
Commercial real estate:
Owner occupied	499,123			493,524
Non-owner occupied	816,880			700,248
Consumer and other	232,192			228,853
Gross loans	3,786,791			3,667,511
Less: Allowance for loan losses	(29,814		)	(28,932		)
Net loans	$	3,756,977		$	3,638,579

Schedule of Changes Value of Accretable Yield of PCI Loans

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



	Three Months Ended March 31,
	2019			2018
Balance at the beginning of period	$	(16,587	)	$	(17,682	)
Principal reductions and other reclassifications from nonaccretable difference	220			(1,294		)
Accretion	2,183			2,201
Changes in expected cash flows	(630		)	(180		)
Balance at end of period	$	(14,814	)	$	(16,955	)

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 months ended March 31, 2019 and 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
Three Months Ended March 31, 2019
Beginning balance - December 31, 2018	$	5,348		$	9,729	$	3,428		$	811		$	566		$	3,132		$	4,149	$	1,769		$	28,932
Provision for loan losses	333			28		(65		)	(73		)	(27		)	(121		)	434		882			1,391
Recoveries of loans previously charged-off	12			1		13			25			—			87			—		224			362
Loans charged off	(179		)	—		(81		)	(32		)	—			—			—		(579		)	(871		)
Ending balance - March 31, 2019	$	5,514		$	9,758	$	3,295		$	731		$	539		$	3,098		$	4,583	$	2,296		$	29,814



	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 March 31, 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	202			479		(30		)	214			15		(567		)	(115		)	119			317
Recoveries of loans previously charged-off	135			252		15			27			—		23			51			206			709
Loans charged off	(220		)	—		(60		)	(20		)	—		—			—			(361		)	(661		)
Ending balance - March 31, 2018	$	4,578		$	7,866	$	3,122		$	1,165		$	449	$	3,014		$	2,753		$	1,459		$	24,406

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

The following tables 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 March 31, 2019 and December 31, 2018:



	March 31, 2019
	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	$	709	$	—	$	136	$	—	$	—	$	42	$	299	$	—	$	1,186
Collectively evaluated for impairment	4,697		9,711		3,027		731		539		3,039		4,068		1,551		27,363
Acquired with deteriorated credit quality	108		47		132		—		—		17		216		745		1,265
Ending balance - March 31, 2019	$	5,514	$	9,758	$	3,295	$	731	$	539	$	3,098	$	4,583	$	2,296	$	29,814



	December 31, 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	$	3	$	—	$	7	$	—	$	—	$	53	$	205	$	—	$	268
Collectively evaluated for impairment	5,247		9,677		3,205		811		566		3,066		3,628		1,583		27,783
Acquired with deteriorated credit quality	98		52		216		—		—		13		316		186		881
Ending balance - December 31, 2018	$	5,348	$	9,729	$	3,428	$	811	$	566	$	3,132	$	4,149	$	1,769	$	28,932

Amount of Loans by Loan Category Broken Between Loans Individually and Collectively Evaluated for Impairment

The following tables 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 March 31, 2019 and December 31, 2018:



	March 31, 2019
	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	$	4,045	$	1,220	$	874	$	605	$	—	$	2,054	$	6,699	$	71	$	15,568
Collectively evaluated for impairment	882,989		533,238		533,293		186,810		71,532		491,093		796,644		213,060		3,708,659
Acquired with deteriorated credit quality	1,311		4,607		18,072		—		—		5,976		13,537		19,061		62,564
Ending balance - March 31, 2019	$	888,345	$	539,065	$	552,239	$	187,415	$	71,532	$	499,123	$	816,880	$	232,192	$	3,786,791



	December 31, 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	$	1,847	$	1,221	$	987	$	245	$	—	$	2,608	$	6,735	$	73	$	13,716
Collectively evaluated for impairment	863,788		549,075		535,451		190,235		75,457		484,900		677,247		208,643		3,584,796
Acquired with deteriorated credit quality	1,448		5,755		19,377		—		—		6,016		16,266		20,137		68,999
Ending balance - December 31, 2018	$	867,083	$	556,051	$	555,815	$	190,480	$	75,457	$	493,524	$	700,248	$	228,853	$	3,667,511

Credit Quality Indicators by Portfolio Class

The following tables show credit quality indicators by portfolio class at March 31, 2019 and December 31, 2018:



March 31, 2019	Pass		Watch		Substandard		Total
Loans, excluding purchased credit impaired loans
Commercial and industrial	$	830,017	$	49,599	$	7,418	$	887,034
Construction	528,421		4,717		1,320		534,458
Residential real estate:
1-to-4 family mortgage	519,688		6,046		8,433		534,167
Residential line of credit	183,448		1,337		2,630		187,415
Multi-family mortgage	71,460		72		—		71,532
Commercial real estate:
Owner occupied	463,724		15,857		13,566		493,147
Non-owner occupied	785,933		10,301		7,109		803,343
Consumer and other	208,442		2,982		1,707		213,131
Total loans, excluding purchased credit impaired loans	$	3,591,133	$	90,911	$	42,183	$	3,724,227
Purchased credit impaired loans
Commercial and industrial	$	—	$	828	$	483	$	1,311
Construction	—		3,719		888		4,607
Residential real estate:
1-to-4 family mortgage	—		13,644		4,428		18,072
Residential line of credit	—		—		—		—
Multi-family mortgage	—		—		—		—
Commercial real estate:
Owner occupied	—		4,080		1,896		5,976
Non-owner occupied	—		5,608		7,929		13,537
Consumer and other	—		16,122		2,939		19,061
Total purchased credit impaired loans	$	—	$	44,001	$	18,563	$	62,564
Total loans	$	3,591,133	$	134,912	$	60,746	$	3,786,791



December 31, 2018	Pass		Watch		Substandard		Total
Loans, excluding purchased credit impaired loans
Commercial and industrial	$	804,447	$	52,624	$	8,564	$	865,635
Construction	543,953		5,012		1,331		550,296
Residential real estate:
1-to-4 family mortgage	519,541		8,697		8,200		536,438
Residential line of credit	186,753		1,039		2,688		190,480
Multi-family mortgage	75,381		76		—		75,457
Commercial real estate:
Owner occupied	456,694		16,765		14,049		487,508
Non-owner occupied	667,447		8,881		7,654		683,982
Consumer and other	204,279		2,763		1,674		208,716
Total loans, excluding purchased credit impaired loans	$	3,458,495	$	95,857	$	44,160	$	3,598,512
Purchased credit impaired loans
Commercial and industrial	$	—	$	964	$	484	$	1,448
Construction	—		3,229		2,526		5,755
Residential real estate:
1-to-4 family mortgage	—		14,681		4,696		19,377
Residential line of credit	—		—		—		—
Multi-family mortgage	—		—		—		—
Commercial real estate:
Owner occupied	—		4,110		1,906		6,016
Non-owner occupied	—		8,266		8,000		16,266
Consumer and other	—		15,422		4,715		20,137
Total purchased credit impaired loans	$	—	$	46,672	$	22,327	$	68,999
Total loans	$	3,458,495	$	142,529	$	66,487	$	3,667,511

Past Due Loans

The following tables provide 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 and loans current on payments accruing interest by category at March 31, 2019 and December 31, 2018:



March 31, 2019	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	$	2,998	$	37	$	342	$	883,657	$	1,311	$	888,345
Construction	1,014		—		275		533,169		4,607		539,065
Residential real estate:
1-to-4 family mortgage	1,470		648		3,107		528,942		18,072		552,239
Residential line of credit	730		487		973		185,225		—		187,415
Multi-family mortgage	—		—		—		71,532		—		71,532
Commercial real estate:
Owner occupied	162		117		1,671		491,197		5,976		499,123
Non-owner occupied	795		57		6,973		795,518		13,537		816,880
Consumer and other	1,875		539		380		210,337		19,061		232,192
Total	$	9,044	$	1,885	$	13,721	$	3,699,577	$	62,564	$	3,786,791



December 31, 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	$	999	$	65	$	438	$	864,133	$	1,448	$	867,083
Construction	109		—		283		549,904		5,755		556,051
Residential real estate:
1-to-4 family mortgage	4,919		737		2,704		528,078		19,377		555,815
Residential line of credit	726		957		804		187,993		—		190,480
Multi-family mortgage	—		—		—		75,457		—		75,457
Commercial real estate:
Owner occupied	407		197		2,423		484,481		6,016		493,524
Non-owner occupied	61		77		6,885		676,959		16,266		700,248
Consumer and other	1,987		1,008		148		205,573		20,137		228,853
Total	$	9,208	$	3,041	$	13,685	$	3,572,578	$	68,999	$	3,667,511

Impaired Loans Recognized

Impaired loans recognized in conformity with ASC 310 at March 31, 2019 and December 31, 2018, segregated by class,

were as follows:



March 31, 2019	Recorded investment		Unpaid principal		Related allowance
With a related allowance recorded:
Commercial and industrial	$	3,186	$	3,186	$	709
Construction	—		—		—
Residential real estate:
1-to-4 family mortgage	405		405		136
Residential line of credit	—		—		—
Multi-family mortgage	—		—		—
Commercial real estate:
Owner occupied	189		218		42
Non-owner occupied	5,650		5,650		299
Consumer and other	—		—		—
Total	$	9,430	$	9,459	$	1,186
With no related allowance recorded
Commercial and industrial	$	859	$	1,022	$	—
Construction	1,220		1,264		—
Residential real estate:
1-to-4 family mortgage	469		779		—
Residential line of credit	605		613		—
Multi-family mortgage	—		—		—
Commercial real estate:
Owner occupied	1,865		2,619		—
Non-owner occupied	1,049		1,781		—
Consumer and other	71		71		—
Total	$	6,138	$	8,149	$	—
Total impaired loans	$	15,568	$	17,608	$	1,186



December 31, 2018	Recorded investment		Unpaid principal		Related allowance
With a related allowance recorded:
Commercial and industrial	$	618	$	732	$	3
Construction	—		—		—
Residential real estate:
1-to-4 family mortgage	145		145		7
Residential line of credit	—		—		—
Multi-family mortgage	—		—		—
Commercial real estate:
Owner occupied	560		641		53
Non-owner occupied	5,686		5,686		205
Consumer and other	—		—		—
Total	$	7,009	$	7,204	$	268
With no related allowance recorded:
Commercial and industrial	$	1,229	$	1,281	$	—
Construction	1,221		1,262		—
Residential real estate:
1-to-4 family mortgage	842		1,151		—
Residential line of credit	245		249		—
Multi-family mortgage	—		—		—
Commercial real estate:
Owner occupied	2,048		2,780		—
Non-owner occupied	1,049		1,781		—
Consumer and other	73		73		—
Total	$	6,707	$	8,577	$	—
Total impaired loans	$	13,716	$	15,781	$	268

Average recorded investment and interest income on a cash basis recognized during the three months ended March 31, 2019 and 2018 on impaired loans, segregated by class, were as follows:



Three months ended March 31, 2019	Average recorded investment		Interest income recognized (cash basis)
With a related allowance recorded:
Commercial and industrial	$	1,902	$	38
Construction	—		—
Residential real estate:
1-to-4 family mortgage	275		2
Residential line of credit	—		—
Multi-family mortgage	—		—
Commercial real estate:
Owner occupied	375		2
Non-owner occupied	5,668		—
Consumer and other	—		—
Total	$	8,220	$	42
With no related allowance recorded:
Commercial and industrial	$	1,044	$	14
Construction	1,221		48
Residential real estate:
1-to-4 family mortgage	656		8
Residential line of credit	425		2
Multi-family mortgage	—		—
Commercial real estate:
Owner occupied	1,957		28
Non-owner occupied	1,049		—
Consumer and other	72		2
Total	$	6,424	$	102
Total impaired loans	$	14,644	$	144
Three months ended March 31, 2018
With a related allowance recorded:
Commercial and industrial	$	53	$	1
Construction	—		—
Residential real estate:
1-to-4 family mortgage	193		2
Residential line of credit	—		—
Multi-family mortgage	—		—
Commercial real estate:
Owner occupied	715		6
Non-owner occupied	143		2
Consumer and other	—		—
Total	$	1,104	$	11
With no related allowance recorded:
Commercial and industrial	$	1,430	$	16
Construction	1,287		30
Residential real estate:
1-to-4 family mortgage	1,185		13
Residential line of credit	—		—
Multi-family mortgage	971		12
Commercial real estate:
Owner occupied	1,621		32
Non-owner occupied	1,574		7
Consumer and other	27		—
Total	$	8,095	$	110
Total impaired loans	$	9,199	$	121

Financial Effect of TDRs

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



Three Months Ended March 31, 2019	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	2	$	3,188	$	3,188	$	—
Total	2	$	3,188	$	3,188	$	—



Three Months Ended March 31, 2018	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Residential real estate:
1-4 family mortgage	1	$	249	$	249	—
Consumer and other	1	5		5		—
Total	2	$	254	$	254	$	—