XML 40 R30.htm IDEA: XBRL DOCUMENT v3.20.2
Loans and allowance for credit losses (Tables)
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Loans Outstanding by Major Lending Classification
Loans outstanding at June 30, 2020 and December 31, 2019, by class of financing receivable are as follows:
 June 30,December 31,
 20202019
Commercial and industrial(1)
$1,289,646  $1,034,036  
Construction553,619  551,101  
Residential real estate:
1-to-4 family mortgage741,936  710,454  
Residential line of credit236,974  221,530  
Multi-family mortgage115,149  69,429  
Commercial real estate:
Owner occupied683,245  630,270  
Non-owner occupied923,192  920,744  
Consumer and other283,262  272,078  
Gross loans4,827,023  4,409,642  
Less: Allowance for credit losses(113,129) (31,139) 
Net loans$4,713,894  $4,378,503  
(1)Includes $314,678 of loans originated as part of the PPP at June 30, 2020, established by the CARES Act, in response to the COVID-19 pandemic. The PPP is administered by the SBA; loans originated as part of the PPP may be forgiven by the SBA under a set of defined rules. An allowance for credit losses of $51 at June 30, 2020, has been allocated for these loans. PPP loans are federally guaranteed as part of the CARES Act, provided PPP loan recipients receive loan forgiveness under the SBA regulations. As such, there is minimal credit risk associated with these loans.
Allowance for Loan Losses by Portfolio Segment and Related Investment in Loans Net of Unearned Interest
The following provides the changes in the allowance for credit losses by class of financing receivable for the three and six months ended June 30, 2020 and 2019:

 Commercial and industrialConstruction1-to-4 family residential mortgageResidential line of creditMulti-family residential mortgageCommercial real estate owner occupiedCommercial real estate non-owner occupiedConsumer and otherTotal
Three Months Ended June 30, 2020
Beginning balance -
March 31, 2020		$10,881  $22,842  $13,006  $6,213  $2,328  $9,047  $18,005  $6,819  $89,141  
Provision for credit losses(2,663) 12,624  (446) 595  2,171  (1,630) 12,984  404  24,039  
Recoveries of loans
previously charged-off		807  151  26  24  —  3  —  103  1,114  
Loans charged off(147) (18) (123) (21) —  —  (545) (311) (1,165) 
Ending balance -
June 30, 2020		$8,878  $35,599  $12,463  $6,811  $4,499  $7,420  $30,444  $7,015  $113,129  
Six Months Ended June 30, 2020
Beginning balance -
December 31, 2019		$4,805  $10,194  $3,112  $752  $544  $4,109  $4,621  $3,002  $31,139  
Impact of adopting ASC
326 on non-purchased
credit deteriorated loans		5,300  1,533  7,920  3,461  340  1,879  6,822  3,633  30,888  
Impact of adopting ASC
326 on purchased credit
deteriorated loans		82  150  421  (3) —  162  184  (438) 558  
Provision for credit losses(834) 23,578  1,218  2,580  3,615  1,408  18,919  1,519  52,003  
Recoveries of loans
previously charged-off		895  151  50  39  —  17  —  296  1,448  
Loans charged off(1,381) (18) (365) (21) —  (209) (545) (1,037) (3,576) 
Initial allowance on loans
purchased with
deteriorated credit quality		11  11  107  3  —  54  443  40  669  
Ending balance -
June 30, 2020		$8,878  $35,599  $12,463  $6,811  $4,499  $7,420  $30,444  $7,015  $113,129  
 
 Commercial
and industrial		Construction1-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 June 30, 2019
Beginning balance -
March 31, 2019		$5,514  $9,758  $3,295  $731  $539  $3,098  $4,583  $2,296  $29,814  
Provision for loan losses(550) (109) (30) 106  78  409  (105) 1,082  881  
Recoveries of loans
previously charged-off		38  6  24  21  —  5  —  119  213  
Loans charged off(79) —  (1) (103) —  —  —  (587) (770) 
Ending balance -
June 30, 2019		$4,923  $9,655  $3,288  $755  $617  $3,512  $4,478  $2,910  $30,138  
Six Months Ended June 30, 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(217) (81) (95) 33  51  288  329  1,964  2,272  
Recoveries of loans
previously charged-off		50  7  37  46  —  92  —  343  575  
Loans charged off(258) —  (82) (135) —  —  —  (1,166) (1,641) 
Ending balance -
June 30, 2019		$4,923  $9,655  $3,288  $755  $617  $3,512  $4,478  $2,910  $30,138  
Allocation of Allowance for Loan Losses by Loan Category Broken Out Between Loans Individually and Collectively Evaluated for Impairment
The following table provides the amount of the allowance for credit losses by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019:
 December 31, 2019
 Commercial
and 
industrial		Construction1-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		$241  $—  $8  $9  $—  $238  $399  $—  $895  
Collectively evaluated for
impairment		4,457  10,192  2,940  743  544  3,853  3,909  1,933  28,571  
Acquired with deteriorated
credit quality		107  2  164  —  —  18  313  1,069  1,673  
Ending balance -
December 31, 2019		$4,805  $10,194  $3,112  $752  $544  $4,109  $4,621  $3,002  $31,139  
Amount of Loans by Loan Category Broken Between Loans Individually and Collectively Evaluated for Impairment
The following table provides the amount of loans by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019:
 
 December 31, 2019
 Commercial
and 
industrial		Construction1-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		$9,026  $2,061  $1,347  $579  $—  $2,993  $7,755  $49  $23,810  
Collectively evaluated
for impairment		1,023,326  546,156  689,769  220,878  69,429  621,386  902,792  254,944  4,328,680  
Acquired with deteriorated
credit quality		1,684  2,884  19,338  73  —  5,891  10,197  17,085  57,152  
Ending balance -
December 31, 2019		$1,034,036  $551,101  $710,454  $221,530  $69,429  $630,270  $920,744  $272,078  $4,409,642  
Financing Receivable, Amortized Costs Basis By Origination Year
The following table presents the credit quality of our loan portfolio by year of origination as of June 30, 2020. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the table below.
June 30, 2020
Term Loans
Amortized Cost Basis by Origination Year
20202019201820172016PriorRevolving Loans Amortized Cost BasisTotal
Commercial and industrial
Pass$338,964  $168,783  $69,250  $41,722  $32,820  $31,449  $481,897  $1,164,885  
Watch2,791  10,761  33,603  3,928  5,772  4,414  39,740  101,009  
Substandard250  2,535  4,584  3,251  1,414  3,696  7,806  23,536  
Doubtful16  —  —  —  —  —  200  216  
Total342,021  182,079  107,437  48,901  40,006  39,559  529,643  1,289,646  
Construction
Pass62,335  170,746  74,183  32,656  32,790  71,149  90,620  534,479  
Watch58  10  229  10,126  740  2,807  —  13,970  
Substandard—  1,170  409  11  —  3,205  208  5,003  
Doubtful—  167  —  —  —  —  —  167  
Total62,393  172,093  74,821  42,793  33,530  77,161  90,828  553,619  
Residential real estate:
1-to-4 family mortgage
Pass99,613  172,190  137,308  89,665  62,505  142,668  —  703,949  
Watch913  603  608  2,139  3,537  12,938  —  20,738  
Substandard353  1,222  1,891  3,674  1,640  7,664  —  16,444  
Doubtful—  —  56  —  325  424  —  805  
Total100,879  174,015  139,863  95,478  68,007  163,694  —  741,936  
Residential line of credit
Pass56  —  —  —  284  3,297  230,334  233,971  
Watch—  —  —  —  —  —  788  788  
Substandard—  —  —  —  —  77  1,692  1,769  
Doubtful—  —  —  —  —  —  446  446  
Total56  —  —  —  284  3,374  233,260  236,974  
Multi-family mortgage
Pass20,796  14,346  6,758  42,196  2,965  28,030  —  115,091  
Watch—  —  —  —  —  58  —  58  
Substandard—  —  —  —  —  —  —  —  
Doubtful—  —  —  —  —  —  —  —  
Total20,796  14,346  6,758  42,196  2,965  28,088  —  115,149  
20202019201820172016PriorRevolving Loans Amortized Cost BasisTotal
Commercial real estate:
Owner occupied
Pass49,663  129,755  84,301  69,678  62,755  161,851  48,023  606,026  
Watch997  7,758  1,530  24,105  5,634  14,847  7,716  62,587  
Substandard—  1,804  314  3,959  58  6,846  1,651  14,632  
Doubtful—  —  —  —  —  —  —  —  
Total50,660  139,317  86,145  97,742  68,447  183,544  57,390  683,245  
Non-owner occupied
Pass34,657  139,867  202,792  132,792  164,798  175,966  24,834  875,706  
Watch1,496  2,193  10,707  4,973  3,769  5,090  94  28,322  
Substandard—  —  273  —  383  18,425  83  19,164  
Doubtful—  —  —  —  —  —  —  —  
Total36,153  142,060  213,772  137,765  168,950  199,481  25,011  923,192  
Consumer and other loans
Pass43,369  60,546  45,556  29,342  43,123  31,011  8,110  261,057  
Watch74  487  1,291  1,515  3,450  8,567  587  15,971  
Substandard18  95  596  691  733  2,066  413  4,612  
Doubtful—  253  344  524  56  445  —  1,622  
Total43,461  61,381  47,787  32,072  47,362  42,089  9,110  283,262  
Total Loans
Pass649,453  856,233  620,148  438,051  402,040  645,421  883,818  4,495,164  
Watch6,329  21,812  47,968  46,786  22,902  48,721  48,925  243,443  
Substandard621  6,826  8,067  11,586  4,228  41,979  11,853  85,160  
Doubtful16  420  400  524  381  869  646  3,256  
Total$656,419  $885,291  $676,583  $496,947  $429,551  $736,990  $945,242  $4,827,023  
Credit Quality Indicators by Portfolio Class
The following table shows credit quality indicators by class of financing receivable at December 31, 2019.
December 31, 2019PassWatchSubstandardTotal
Loans, excluding purchased credit impaired loans    
Commercial and industrial$946,247  $66,910  $19,195  $1,032,352  
Construction541,201  4,790  2,226  548,217  
Residential real estate:
1-to-4 family mortgage666,177  11,380  13,559  691,116  
Residential line of credit218,086  1,343  2,028  221,457  
Multi-family mortgage69,366  63  —  69,429  
Commercial real estate:
Owner occupied576,737  30,379  17,263  624,379  
Non-owner occupied876,670  24,342  9,535  910,547  
Consumer and other248,632  3,304  3,057  254,993  
Total loans, excluding purchased credit impaired loans$4,143,116  $142,511  $66,863  $4,352,490  
Purchased credit impaired loans    
Commercial and industrial$—  $1,224  $460  $1,684  
Construction—  2,681  203  2,884  
Residential real estate:
1-to-4 family mortgage—  15,091  4,247  19,338  
Residential line of credit—  —  73  73  
Multi-family mortgage—  —  —  —  
Commercial real estate:  
Owner occupied—  4,535  1,356  5,891  
Non-owner occupied—  6,617  3,580  10,197  
Consumer and other—  13,521  3,564  17,085  
Total purchased credit impaired loans—  43,669  13,483  57,152  
Total loans$4,143,116  $186,180  $80,346  $4,409,642  
Past Due Loans
The following table represents an analysis of the aging by class of financing receivable as of June 30, 2020:
June 30, 202030-89 days
past due		90 days or
 more and
accruing
interest		Non-accrual
loans		Loans current
on payments
and accruing
interest		Total
Commercial and industrial$1,057  $111  $2,308  $1,286,170  $1,289,646  
Construction769  465  1,482  550,903  553,619  
Residential real estate:
1-to-4 family mortgage5,658  4,712  5,392  726,174  741,936  
Residential line of credit398  277  704  235,595  236,974  
Multi-family mortgage58  —  —  115,091  115,149  
Commercial real estate:
Owner occupied43  —  2,644  680,558  683,245  
Non-owner occupied169  226  13,113  909,684  923,192  
Consumer and other3,172  621  2,770  276,699  283,262  
Total$11,324  $6,412  $28,413  $4,780,874  $4,827,023  

The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance and interest income, by class of financing receivable as of and for the three and six months ended June 30, 2020:
June 30, 2020
u End of period amortized cost
Beginning of
period non-accrual
amortized cost		Non-accrual
with no
related
allowance		Non-accrual
with
related
allowance		Related
allowance
Commercial and industrial$5,586  $1,098  $1,210  $350  
Construction1,254  1,218  264  47  
Residential real estate:
1-to-4 family mortgage4,585  1,789  3,603  68  
Residential line of credit489  151  553  12  
Commercial real estate:
Owner occupied2,285  1,723  921  78  
Non-owner occupied9,460  2,762  10,351  1,625  
Consumer and other1,623  —  2,770  134  
Total$25,282  $8,741  $19,672  $2,314  
Interest Income
June 30, 2020Three Months EndedSix Months Ended
Commercial and industrial$17  $169  
Construction6  33  
Residential real estate:
1-to-4 family mortgage6  13  
Residential line of credit—  1  
Commercial real estate:
Owner occupied43  64  
Non-owner occupied109  128  
Consumer and other24  24  
Total$205  $432  
The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented.

The following table provides the period-end amounts of loans that are past due, loans not accruing interest and loans current on payments accruing interest by category at December 31, 2019:
 
December 31, 201930-89
days
past due		90 days or more
and
accruing
interest		Non-accrual
loans		Purchased
Credit
Impaired
loans		Loans current
on payments
and accruing
interest		Total
Commercial and industrial$1,918  $291  $5,587  $1,684  $1,024,556  $1,034,036  
Construction1,021  42  1,087  2,884  546,067  551,101  
Residential real estate:
1-to-4 family mortgage10,738  3,965  3,332  19,338  673,081  710,454  
Residential line of credit658  412  416  73  219,971  221,530  
Multi-family mortgage63  —  —  —  69,366  69,429  
Commercial real estate:
Owner occupied1,375  —  1,793  5,891  621,211  630,270  
Non-owner occupied327  —  7,880  10,197  902,340  920,744  
Consumer and other2,377  833  967  17,085  250,816  272,078  
Total$18,477  $5,543  $21,062  $57,152  $4,307,408  $4,409,642  
Impaired Loans Recognized
Impaired loans recognized in conformity with ASC 310 at December 31, 2019 segregated by class, were as follows:
December 31, 2019Recorded
investment		Unpaid
principal		Related
allowance
With a related allowance recorded:
Commercial and industrial$6,080  $8,350  $241  
Residential real estate:
1-to-4 family mortgage264  324  8  
Residential line of credit320  320  9  
Commercial real estate:
Owner occupied756  1,140  238  
Non-owner occupied6,706  6,747  399  
Consumer and other—  —  —  
Total$14,126  $16,881  $895  
With no related allowance recorded:
Commercial and industrial$2,946  $3,074  $—  
Construction2,061  2,499  —  
Residential real estate:
1-to-4 family mortgage1,083  1,449  —  
Residential line of credit259  280  —  
Commercial real estate:
Owner occupied2,237  2,627  —  
Non-owner occupied1,049  1,781  —  
Consumer and other49  49  —  
Total$9,684  $11,759  $—  
Total impaired loans$23,810  $28,640  $895  
Average recorded investment and interest income on a cash basis recognized during the three and six months ended June 30, 2019 on impaired loans, segregated by class, were as follows:
Three Months EndedSix Months Ended
June 30, 2019Average recorded
investment		Interest income
recognized
(cash basis)		Average recorded
investment		Interest income
recognized
(cash basis)
With a related allowance recorded:
Commercial and industrial$3,161  $67  $1,877  $105  
Residential real estate:
1-to-4 family mortgage336  9  206  11  
Commercial real estate:
Owner occupied187  4  373  6  
Non-owner occupied5,570  34  5,588  34  
Consumer and other250  19  250  19  
Total$9,504  $133  $8,294  $175  
With no related allowance recorded:
Commercial and industrial$819  $11  $1,004  $25  
Construction1,218  4  1,219  52  
Residential real estate:
1-to-4 family mortgage528  18  715  26  
Residential line of credit607  —  427  2  
Commercial real estate:
Owner occupied1,830  34  1,922  62  
Non-owner occupied1,049  —  1,049  —  
Consumer and other70  1  71  3  
Total$6,121  $68  $6,407  $170  
Total impaired loans$15,625  $201  $14,701  $345  
Schedule of Changes Value of Accretable Yield of PCI Loans The following table presents changes in the value of the accretable yield for PCI loans for the periods indicated.
Three Months Ended
June 30,		Six Months Ended
June 30,
 20192019
Balance at the beginning of period$(14,814) $(16,587) 
Additions through business combinations(1,167) (1,167) 
Principal reductions and other reclassifications from nonaccretable difference30  250  
Accretion1,705  3,888  
Changes in expected cash flows(616) (1,246) 
Balance at end of period$(14,862) $(14,862) 
Financial Effect of TDRs
The following tables present the financial effect of TDRs recorded during the periods indicated. There were no new TDRs added during the three months ended June 30, 2019.

Three Months Ended June 30, 2020Number of loansPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentCharge offs and specific reserves
Commercial and industrial1$1,153  $1,153  $—  
Commercial real estate:
Owner occupied1788  788  —  
Residential real estate:
1-to-4 family mortgage113  13  —  
Total3$1,954  $1,954  $—  
Six Months Ended June 30, 2020Number of loansPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentCharge offs and specific reserves
Commercial and industrial1  $1,153  $1,153  $—  
Commercial real estate:
Owner occupied1  788  788  —  
Residential real estate:
1-to-4 family mortgage2  77  77  —  
Total4  $2,018  $2,018  $—  
Six Months Ended June 30, 2019Number of loansPre-modification outstanding recorded investmentPost-modification outstanding recorded investmentCharge offs and specific reserves
Commercial and industrial2$3,188  $3,188  $—  
Total2$3,188  $3,188  $—  
Allowance for Credit Losses, Individually Assessed Allowance
For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following table presents the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable.
June 30, 2020
Type of Collateral
Real EstateFinancial Assets and EquipmentIndividually assessed allowance for credit loss
Commercial and industrial$—  $3,062  $543  
Construction1,232  —  —  
Residential real estate:
1-to-4 family mortgage100  —  —  
Residential line of credit471  —  9  
Multi-family mortgage—  —  —  
Commercial real estate:
Owner occupied1,461  —  35  
Non-owner occupied8,500  —  1,563  
Consumer and other—  336  35  
Total$11,764  $3,398  $2,185  
Financing Receivable, Deferral Program The following table outlines the Company's recorded investment and percentage of loans held for investment by class of financing receivable for Company executed deferrals in connection with COVID-19 relief. These deferrals typically ranged from sixty to ninety days per deferral and were not considered TDRs under the interagency regulatory guidance or the CARES Act issued in March 2020.
June 30, 2020
% of Loans
Commercial and industrial$164,804  12.8 %
Construction82,514  14.9 %
Residential real estate:
1-to-4 family mortgage83,590  11.3 %
Residential line of credit14,200  6.0 %
Multi-family mortgage45,321  39.4 %
Commercial real estate:
Owner occupied190,044  27.8 %
Non-owner occupied321,707  34.8 %
Consumer and other16,078  5.7 %
Total$918,258  19.0 %