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IMPAIRED LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 9 Months Ended
Sep. 30, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]  
Troubled Debt Restructurings on Financing Receivables
The following table presents loans that were modified during the nine months ended September 30, 2017:
 
 
 
 
 
Pre-
 
Post-
 
 
 
 
 
 
 
Modification
 
Modification
 
 
 
 
 
Number
 
Outstanding
 
Outstanding
 
Valuation
 
 
 
of
 
Recorded
 
Recorded
 
Allowance
 
(Dollars in thousands)
 
Contracts
 
Investment
 
Investment
 
Recorded
 
Construction and land development
 
 
1
 
$
52
 
$
46
 
$
6
 
Residential real estate
 
 
1
 
 
15
 
 
15
 
 
0
 
 
 
 
2
 
$
67
 
$
61
 
$
6
 
 
The following table presents loans that were modified during the nine months ended September 30, 2016:
 
 
 
 
 
Pre-
 
Post-
 
 
 
 
 
 
 
Modification
 
Modification
 
 
 
 
 
Number
 
Outstanding
 
Outstanding
 
Valuation
 
 
 
of
 
Recorded
 
Recorded
 
Allowance
 
(Dollars in thousands)
 
Contracts
 
Investment
 
Investment
 
Recorded
 
Residential real estate
 
 
6
 
$
1,660
 
$
1,489
 
$
171
 
 
 
 
6
 
$
1,660
 
$
1,489
 
$
171
 
Impaired Financing Receivables
As of September 30, 2017 and December 31, 2016, the Company’s recorded investment in impaired loans (excluding PCI loans), the unpaid principal balance, and the related valuation allowance were as follows:
 
 
 
September 30, 2017
 
 
 
 
 
 
Unpaid
 
 
Related
 
 
 
Recorded
 
 
Principal
 
 
Valuation
 
(Dollars in thousands)
 
Investment
 
 
Balance
 
 
Allowance
 
Impaired Loans with No Related Allowance Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
$
397
 
 
$
702
 
 
$
0
 
Commercial real estate
 
 
3,431
 
 
 
4,811
 
 
 
0
 
Residential real estate
 
 
10,598
 
 
 
15,283
 
 
 
0
 
Commercial and financial
 
 
29
 
 
 
39
 
 
 
0
 
Consumer
 
 
117
 
 
 
191
 
 
 
0
 
Impaired Loans with an Allowance Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
 
289
 
 
 
355
 
 
 
91
 
Commercial real estate
 
 
4,931
 
 
 
4,939
 
 
 
222
 
Residential real estate
 
 
8,773
 
 
 
8,970
 
 
 
1,188
 
Commercial and financial
 
 
1,127
 
 
 
501
 
 
 
521
 
Consumer
 
 
290
 
 
 
292
 
 
 
48
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
 
686
 
 
 
1,057
 
 
 
91
 
Commercial real estate
 
 
8,362
 
 
 
9,750
 
 
 
222
 
Residential real estate
 
 
19,371
 
 
 
24,253
 
 
 
1,188
 
Commercial and financial
 
 
1,156
 
 
 
540
 
 
 
521
 
Consumer
 
 
407
 
 
 
483
 
 
 
48
 
 
 
$
29,982
 
 
$
36,083
 
 
$
2,070
 
 
 
 
December 31, 2016
 
 
 
 
 
 
Unpaid
 
 
Related
 
 
 
Recorded
 
 
Principal
 
 
Valuation
 
(Dollars in thousands)
 
Investment
 
 
Balance
 
 
Allowance
 
Impaired Loans with No Related Allowance Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
$
226
 
 
$
321
 
 
$
0
 
Commercial real estate
 
 
3,267
 
 
 
4,813
 
 
 
0
 
Residential real estate
 
 
9,706
 
 
 
14,136
 
 
 
0
 
Commercial and financial
 
 
199
 
 
 
206
 
 
 
0
 
Consumer
 
 
0
 
 
 
0
 
 
 
0
 
Impaired Loans with an Allowance Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
 
51
 
 
 
51
 
 
 
0
 
Commercial real estate
 
 
6,937
 
 
 
6,949
 
 
 
395
 
Residential real estate
 
 
12,332
 
 
 
12,681
 
 
 
2,059
 
Commercial and financial
 
 
0
 
 
 
0
 
 
 
0
 
Consumer
 
 
0
 
 
 
0
 
 
 
0
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
Construction and land development
 
 
277
 
 
 
372
 
 
 
0
 
Commercial real estate
 
 
10,204
 
 
 
11,762
 
 
 
395
 
Residential real estate
 
 
22,038
 
 
 
26,817
 
 
 
2,059
 
Commercial and financial
 
 
199
 
 
 
206
 
 
 
0
 
Consumer
 
 
0
 
 
 
0
 
 
 
0
 
 
 
$
32,718
 
 
$
39,157
 
 
$
2,454
 
 
For the three months ended September 30, 2017 and 2016, the Company’s average recorded investments in impaired loans (excluding PCI loans) and related interest income were as follows:
 
 
 
Three Months Ended
 
 
Three Months Ended
 
 
 
September 30, 2017
 
 
September 30, 2016
 
 
 
Average
 
 
Interest
 
 
Average
 
 
Interest
 
 
 
Recorded
 
 
Income
 
 
Recorded
 
 
Income
 
(Dollars in thousands)
 
Investment
 
 
Recognized
 
 
Investment
 
 
Recognized
 
Impaired Loans with No Related Allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction & land development
 
$
517
 
 
$
13
 
 
$
208
 
 
$
3
 
Commercial real estate
 
 
3,004
 
 
 
75
 
 
 
1,437
 
 
 
31
 
Residential real estate
 
 
10,266
 
 
 
150
 
 
 
9,346
 
 
 
138
 
Commercial and financial
 
 
244
 
 
 
1
 
 
 
16
 
 
 
0
 
Consumer
 
 
124
 
 
 
3
 
 
 
157
 
 
 
3
 
Impaired Loans with an Allowance Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction & land development
 
 
333
 
 
 
2
 
 
 
609
 
 
 
7
 
Commercial real estate
 
 
4,953
 
 
 
56
 
 
 
6,565
 
 
 
64
 
Residential real estate
 
 
9,831
 
 
 
63
 
 
 
12,038
 
 
 
102
 
Commercial and financial
 
 
646
 
 
 
2
 
 
 
0
 
 
 
0
 
Consumer
 
 
333
 
 
 
3
 
 
 
383
 
 
 
4
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction & land development
 
 
850
 
 
 
15
 
 
 
817
 
 
 
10
 
Commercial real estate
 
 
7,957
 
 
 
131
 
 
 
8,002
 
 
 
95
 
Residential real estate
 
 
20,097
 
 
 
213
 
 
 
21,384
 
 
 
240
 
Commercial and financial
 
 
890
 
 
 
3
 
 
 
16
 
 
 
0
 
Consumer
 
 
457
 
 
 
6
 
 
 
540
 
 
 
7
 
 
 
$
30,251
 
 
$
368
 
 
$
30,759
 
 
$
352
 
 
For the nine months ended September 30, 2017 and 2016, the Company’s average recorded investments in impaired loans and related interest income were as follows:
 
 
 
Nine Months Ended
 
 
Nine Months Ended
 
 
 
September 30, 2017
 
 
September 30, 2016
 
 
 
Average
 
 
Interest
 
 
Average
 
 
Interest
 
 
 
Recorded
 
 
Income
 
 
Recorded
 
 
Income
 
(Dollars in thousands)
 
Investment
 
 
Recognized
 
 
Investment
 
 
Recognized
 
Impaired Loans with No Related Allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction & land development
 
$
460
 
 
$
35
 
 
$
188
 
 
$
11
 
Commercial real estate
 
 
2,833
 
 
 
154
 
 
 
1,854
 
 
 
97
 
Residential real estate
 
 
9,933
 
 
 
447
 
 
 
9,444
 
 
 
406
 
Commercial and financial
 
 
183
 
 
 
3
 
 
 
16
 
 
 
0
 
Consumer
 
 
111
 
 
 
10
 
 
 
193
 
 
 
10
 
Impaired Loans with an Allowance Recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction & land development
 
 
242
 
 
 
8
 
 
 
671
 
 
 
20
 
Commercial real estate
 
 
5,789
 
 
 
163
 
 
 
6,835
 
 
 
193
 
Residential real estate
 
 
11,029
 
 
 
260
 
 
 
12,098
 
 
 
322
 
Commercial and financial
 
 
378
 
 
 
14
 
 
 
0
 
 
 
0
 
Consumer
 
 
247
 
 
 
12
 
 
 
363
 
 
 
14
 
Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Construction & land development
 
 
702
 
 
 
43
 
 
 
859
 
 
 
31
 
Commercial real estate
 
 
8,622
 
 
 
317
 
 
 
8,689
 
 
 
290
 
Residential real estate
 
 
20,962
 
 
 
707
 
 
 
21,542
 
 
 
728
 
Commercial and financial
 
 
561
 
 
 
17
 
 
 
16
 
 
 
0
 
Consumer
 
 
358
 
 
 
22
 
 
 
556
 
 
 
24
 
 
 
$
31,205
 
 
$
1,106
 
 
$
31,662
 
 
$
1,073
 
Allowance for Credit Losses on Financing Receivables
Activity in the allowance for loan losses (excluding PCI loans) for the three month and nine month periods ended September 30, 2017 and 2016 is summarized as follows:
 
 
 
Allowance for Loan Losses for the Three Months Ended September 30, 2017
 
 
 
 
 
 
Provision
 
 
 
 
 
 
 
TDR
 
 
 
 
 
 
Beginning
 
for Loan
 
Charge-
 
 
 
 
Valuation
 
Ending
 
(Dollars in thousands)
 
Balance
 
Losses
 
Offs
 
Recoveries
 
Adjustments
 
Balance
 
Construction & land development
 
$
1,574
 
$
(690)
 
$
0
 
$
728
 
$
0
 
$
1,612
 
Commercial real estate
 
 
9,923
 
 
62
 
 
(239)
 
 
175
 
 
(15)
 
 
9,906
 
Residential real estate
 
 
7,423
 
 
116
 
 
(296)
 
 
39
 
 
(148)
 
 
7,134
 
Commercial and financial
 
 
5,460
 
 
834
 
 
(333)
 
 
28
 
 
0
 
 
5,989
 
Consumer
 
 
1,620
 
 
358
 
 
(442)
 
 
61
 
 
(6)
 
 
1,591
 
 
 
$
26,000
 
$
680
 
$
(1,310)
 
$
1,031
 
$
(169)
 
$
26,232
 
 
 
 
Allowance for Loan Losses for the Nine Months Ended September 30, 2017
 
 
 
 
 
 
Provision
 
 
 
 
 
 
 
TDR
 
 
 
 
 
 
Beginning
 
for Loan
 
Charge-
 
 
 
 
Valuation
 
Ending
 
(Dollars in thousands)
 
Balance
 
Losses
 
Offs
 
Recoveries
 
Adjustments
 
Balance
 
Construction & land development
 
$
1,219
 
$
(496)
 
$
0
 
$
891
 
$
(2)
 
$
1,612
 
Commercial real estate
 
 
9,273
 
 
410
 
 
(341)
 
 
613
 
 
(49)
 
 
9,906
 
Residential real estate
 
 
7,483
 
 
90
 
 
(482)
 
 
266
 
 
(223)
 
 
7,134
 
Commercial and financial
 
 
3,636
 
 
3,036
 
 
(837)
 
 
154
 
 
0
 
 
5,989
 
Consumer
 
 
1,789
 
 
345
 
 
(756)
 
 
221
 
 
(8)
 
 
1,591
 
 
 
$
23,400
 
$
3,385
 
$
(2,416)
 
$
2,145
 
$
(282)
 
$
26,232
 
 
 
 
Allowance for Loan Losses for the Three Months Ended September 30, 2016
 
 
 
 
 
 
Provision
 
 
 
 
 
 
 
TDR
 
 
 
 
 
 
Beginning
 
for Loan
 
Charge-
 
 
 
 
Valuation
 
Ending
 
(Dollars in thousands)
 
Balance
 
Losses
 
Offs
 
Recoveries
 
Adjustments
 
Balance
 
Construction & land development
 
$
1,160
 
$
50
 
$
0
 
$
25
 
$
(2)
 
$
1,233
 
Commercial real estate
 
 
7,192
 
 
1,505
 
 
(78)
 
 
169
 
 
(55)
 
 
8,733
 
Residential real estate
 
 
8,299
 
 
(637)
 
 
0
 
 
272
 
 
(25)
 
 
7,909
 
Commercial and financial
 
 
2,591
 
 
(633)
 
 
(200)
 
 
1,278
 
 
0
 
 
3,036
 
Consumer
 
 
1,483
 
 
265
 
 
(18)
 
 
44
 
 
(1)
 
 
1,773
 
 
 
$
20,725
 
$
550
 
$
(296)
 
$
1,788
 
$
(83)
 
$
22,684
 
 
 
 
Allowance for Loan Losses for the Nine Months Ended September 30, 2016
 
 
 
 
 
 
Provision
 
 
 
 
 
 
 
TDR
 
 
 
 
 
 
Beginning
 
for Loan
 
Charge-
 
 
 
 
Valuation
 
Ending
 
(Dollars in thousands)
 
Balance
 
Losses
 
Offs
 
Recoveries
 
Adjustments
 
Balance
 
Construction & land development
 
$
1,151
 
$
(125)
 
$
0
 
$
214
 
$
(7)
 
$
1,233
 
Commercial real estate
 
 
6,756
 
 
2,025
 
 
(209)
 
 
271
 
 
(110)
 
 
8,733
 
Residential real estate
 
 
8,057
 
 
(626)
 
 
(135)
 
 
669
 
 
(56)
 
 
7,909
 
Commercial and financial
 
 
2,042
 
 
(524)
 
 
(255)
 
 
1,773
 
 
0
 
 
3,036
 
Consumer
 
 
1,122
 
 
661
 
 
(98)
 
 
91
 
 
(3)
 
 
1,773
 
 
 
$
19,128
 
$
1,411
 
$
(697)
 
$
3,018
 
$
(176)
 
$
22,684
 
 
Loan Portfolio And Related Allowance
The allowance for loan losses is composed of specific allowances for certain impaired loans and general allowances grouped into loan pools based on similar characteristics. The Company’s loan portfolio (excluding PCI loans) and related allowance at September 30, 2017 and December 31, 2016 is shown in the following tables:
 
 
 
At September 30, 2017
 
 
 
Individually Evaluated for
 
 
Collectively Evaluated for
 
 
 
 
 
 
 
 
 
Impairment
 
 
Impairment
 
 
Total
 
 
 
Recorded
 
 
Associated
 
 
Recorded
 
 
Associated
 
 
Recorded
 
 
Associated
 
(Dollars in thousands)
 
Investment
 
 
Allowance
 
 
Investment
 
 
Allowance
 
 
Investment
 
 
Allowance
 
Construction & land development
 
$
686
 
 
$
91
 
 
$
244,349
 
 
$
1,521
 
 
$
245,035
 
 
$
1,612
 
Commercial real estate
 
 
8,362
 
 
 
222
 
 
 
1,460,755
 
 
 
9,684
 
 
 
1,469,117
 
 
 
9,906
 
Residential real estate
 
 
19,371
 
 
 
1,188
 
 
 
921,270
 
 
 
5,946
 
 
 
940,641
 
 
 
7,134
 
Commercial and financial
 
 
1,156
 
 
 
521
 
 
 
533,477
 
 
 
5,468
 
 
 
534,633
 
 
 
5,989
 
Consumer
 
 
407
 
 
 
48
 
 
 
184,715
 
 
 
1,543
 
 
 
185,122
 
 
 
1,591
 
 
 
$
29,982
 
 
$
2,070
 
 
$
3,344,566
 
 
$
24,162
 
 
$
3,374,548
 
 
$
26,232
 
 
 
 
At December 31, 2016
 
 
 
Individually Evaluated for
 
 
Collectively Evaluated for
 
 
 
 
 
 
 
 
 
Impairment
 
 
Impairment
 
 
Total
 
 
 
Recorded
 
 
Associated
 
 
Recorded
 
 
Associated
 
 
Recorded
 
 
Associated
 
(Dollars in thousands)
 
Investment
 
 
Allowance
 
 
Investment
 
 
Allowance
 
 
Investment
 
 
Allowance
 
Construction & land development
 
$
277
 
 
$
0
 
 
$
159,839
 
 
$
1,219
 
 
$
160,116
 
 
$
1,219
 
Commercial real estate
 
 
10,204
 
 
 
395
 
 
 
1,335,832
 
 
 
8,878
 
 
 
1,346,036
 
 
 
9,273
 
Residential real estate
 
 
22,038
 
 
 
2,059
 
 
 
814,250
 
 
 
5,424
 
 
 
836,288
 
 
 
7,483
 
Commercial and financial
 
 
199
 
 
 
0
 
 
 
369,449
 
 
 
3,636
 
 
 
369,648
 
 
 
3,636
 
Consumer
 
 
0
 
 
 
0
 
 
 
154,452
 
 
 
1,789
 
 
 
154,452
 
 
 
1,789
 
 
 
$
32,718
 
 
$
2,454
 
 
$
2,833,822
 
 
$
20,946
 
 
$
2,866,540
 
 
$
23,400
 
PCI Loans [Member]  
Financing Receivable, Allowance for Credit Losses [Line Items]  
Loan Portfolio And Related Allowance
The table below summarizes PCI loans that were individually evaluated for impairment based on expected cash flows at September 30, 2017 and December 31, 2016:
 
 
 
PCI Loans Individually Evaluated for Impairment
 
 
 
September 30, 2017
 
December 31, 2016
 
 
 
Recorded
 
Associated
 
Recorded
 
Associated
 
(Dollars in thousands)
 
Investment
 
Allowance
 
Investment
 
Allowance
 
Construction & land development
 
$
116
 
$
0
 
$
114
 
$
0
 
Commercial real estate
 
 
8,975
 
 
0
 
 
11,257
 
 
0
 
Residential real estate
 
 
528
 
 
0
 
 
684
 
 
0
 
Commercial and financial
 
 
824
 
 
0
 
 
941
 
 
0
 
Consumer
 
 
0
 
 
0
 
 
0
 
 
0
 
 
 
$
10,443
 
$
0
 
$
12,996
 
$
0