Loans (Tables)

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Schedule of Loans Receivable

Loans consist of the following:

	June 30, 2019										December 31, 2018
(dollars in thousands)	PCI		All other  loans**			Total			%of  Gross   Loans		PCI		All other  loans**			Total			%of  Gross   Loans
Commercial real estate	$	1,725	$	916,223		$	917,948		66.18	%	$	1,785	$	876,231		$	878,016		65.18	%
Residential first mortgages	451		156,219			156,670			11.29	%	466		156,243			156,709			11.63	%
Residential rentals	327		121,663			121,990			8.79	%	897		123,401			124,298			9.23	%
Construction and land development	—		35,662			35,662			2.57	%	—		29,705			29,705			2.21	%
Home equity and second mortgages	269		35,597			35,866			2.59	%	72		35,489			35,561			2.64	%
Commercial loans	—		67,617			67,617			4.87	%	—		71,680			71,680			5.32	%
Consumer loans	—		967			967			0.07	%	—		751			751			0.06	%
Commercial equipment	—		50,466			50,466			3.64	%	—		50,202			50,202			3.73	%
Gross loans	2,772		1,384,414			1,387,186			100.00	%	3,220		1,343,702			1,346,922			100.00	%
Net deferred costs	—		1,363			1,363			0.10	%	—		1,183			1,183			0.09	%
Total loans, net of deferred costs	$	2,772	$	1,385,777		$	1,388,549				$	3,220	$	1,344,885		$	1,348,105
Less: allowance for loan losses	—		(10,918		)	(10,918		)	(0.79	)%	—		(10,976		)	(10,976		)	(0.81	)%
Net loans	$	2,772	$	1,374,859		$	1,377,631				$	3,220	$	1,333,909		$	1,337,129

______________________________________

**   All other loans include acquired Non-PCI pools.

Non-accrual loans

Non-accrual and Aging Analysis of Current and Past Due Loans

Non-accrual loans as of June 30, 2019 and December 31, 2018 were as follows:

	June 30, 2019
(dollars in thousands)	Non-accrual Delinquent Loans		Number of Loans	Non-accrual Current Loans		Number of Loans	Total Non-accrual  Loans		Total  Number  of Loans
Commercial real estate	$	8,938	9	$	852	4	$	9,790	13
Residential first mortgages	146		1	846		3	992		4
Residential rentals	—		—	971		5	971		5
Home equity and second mortgages	416		5	—		—	416		5
Commercial loans	819		2	—		—	819		2
Commercial equipment	281		5	19		1	300		6
	$	10,600	22	$	2,688	13	$	13,288	35

	December 31, 2018
(dollars in thousands)	Non-accrual Delinquent Loans		Number of Loans	Non-accrual Current Loans		Number  of Loans	Total Non-accrual Loans		Total Number of Loans
Commercial real estate	$	8,474	11	$	6,158	6	$	14,632	17
Residential first mortgages	146		1	1,228		4	1,374		5
Residential rentals	260		2	703		3	963		5
Home equity and second mortgages	147		2	—		—	147		2
Commercial loans	866		2	—		—	866		2
Commercial equipment	1,259		5	41		2	1,300		7
	$	11,152	23	$	8,130	15	$	19,282	38

Past Due Financing Receivables

Past due and PCI loans as of June 30, 2019 and December 31, 2018 were as follows:

	June 30, 2019
(dollars in thousands)	31‑60 Days		61‑89 Days		90 or Greater Days		Total Past Due		PCI Loans		Current		Total Loan Receivables
Commercial real estate	$	309	$	1,058	$	8,938	$	10,305	$	1,725	$	905,918	$	917,948
Residential first mortgages	—		328		146		474		451		155,745		156,670
Residential rentals	—		321		—		321		327		121,342		121,990
Construction and land dev.	—		—		—		—		—		35,662		35,662
Home equity and second mtg.	24		106		310		440		269		35,157		35,866
Commercial loans	—		—		819		819		—		66,798		67,617
Consumer loans	1		—		—		1		—		966		967
Commercial equipment	30		10		246		286		—		50,180		50,466
Total	$	364	$	1,823	$	10,459	$	12,646	$	2,772	$	1,371,768	$	1,387,186

	December 31, 2018
(dollars in thousands)	31‑60  Days		61‑89  Days		90 or Greater  Days		Total  Past Due		PCI Loans		Current		Total Loan Receivables
Commercial real estate	$	—	$	677	$	8,474	$	9,151	$	1,785	$	867,080	$	878,016
Residential first mortgages	—		66		146		212		466		156,031		156,709
Residential rentals	13		53		247		313		897		123,088		124,298
Construction and land dev.	—		—		—		—		—		29,705		29,705
Home equity and second mtg.	266		—		147		413		72		35,076		35,561
Commercial loans	—		—		866		866		—		70,814		71,680
Consumer loans	1		4		—		5		—		746		751
Commercial equipment	25		29		1,230		1,284		—		48,918		50,202
Total	$	305	$	829	$	11,110	$	12,244	$	3,220	$	1,331,458	$	1,346,922

Impaired Loans, Including TDRs

Impaired Loans and Troubled Debt Restructures (“TDRs”)

Impaired loans, including TDRs, at June 30, 2019 and 2018 and at December 31, 2018 were as follows:

	June 30, 2019
(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Quarter Average Recorded Investment		Quarter Interest Income Recognized		YTD Average Recorded Investment		YTD Interest Income Recognized
Commercial real estate	$	20,933	$	18,512	$	2,406	$	20,918	$	289	$	20,975	$	214	$	21,075	$	410
Residential first mortgages	2,124		2,123		—		2,123		—		2,129		20		2,139		41
Residential rentals	971		971		—		971		—		978		17		985		30
Construction and land dev.	—		—		—		—		—		—		—		—		—
Home equity and second mtg.	482		471		—		471		—		476		5		461		9
Commercial loans	2,638		1,807		819		2,626		700		2,629		27		2,649		54
Commercial equipment	367		131		218		349		192		357		2		369		4
Total	$	27,515	$	24,015	$	3,443	$	27,458	$	1,181	$	27,544	$	285	$	27,678	$	548

	June 30, 2018
(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Quarter Average Recorded Investment		Quarter Interest Income Recognized		YTD Average Recorded Investment		YTD Interest Income Recognized
Commercial real estate	$	26,804	$	24,923	$	1,569	$	26,492	$	182	$	26,609	$	214	$	26,695	$	469
Residential first mortgages	2,473		2,434		—		2,434		—		2,480		26		2,490		53
Residential rentals	1,430		1,396		—		1,396		—		1,440		18		1,450		35
Construction and land dev.	729		—		729		729		210		729		10		729		20
Home equity and second mtg.	303		213		86		299		7		304		3		306		7
Commercial loans	2,792		1,892		900		2,792		458		2,793		32		2,793		52
Consumer loans	2		1		1		2		1		2		—		2		—
Commercial equipment	1,645		1,021		622		1,643		508		1,661		13		1,692		29
Total	$	36,178	$	31,880	$	3,907	$	35,787	$	1,366	$	36,018	$	316	$	36,157	$	665

	December 31, 2018
(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		YTD Average Recorded Investment		YTD Interest Income Recognized
Commercial real estate	$	27,835	$	24,515	$	3,025	$	27,540	$	326	$	27,833	$	1,275
Residential first mortgages	2,527		2,527		—		2,527		—		2,573		126
Residential rentals	1,745		1,745		—		1,745		—		1,792		85
Construction and land dev.	729		729		—		729		—		729		45
Home equity and second mtg.	294		288		—		288		—		291		13
Commercial loans	2,762		1,888		863		2,751		700		2,804		118
Consumer loans	1		—		1				1		1		—
Commercial equipment	1,315		1,121		178		1,299		153		1,354		31
Total	$	37,208	$	32,813	$	4,067	$	36,880	$	1,180	$	37,377	$	1,693

TDRs, Included in Impaired Loans Schedule

TDRs included in the impaired loan schedules above, as of June 30, 2019 and December 31, 2018 were as follows:

	June 30, 2019					December 31, 2018
(dollars in thousands)	Dollars			Number of Loans		Dollars			Number of Loans
Commercial real estate	$	2,082		4		$	5,612		7
Residential first mortgages	65			1		66			1
Residential rentals	—			—		216			1
Construction and land development	—			—		729			2
Commercial loans	—			—		53			1
Commercial equipment	101			3		29			1
Total TDRs	$	2,248		8		$	6,705		13
Less: TDRs included in non-accrual loans	(52		)	(2	)	(29		)	(1	)
Total accrual TDR loans	$	2,196		6		$	6,676		12

Allowance for Credit Losses on Financing Receivables

The following tables detail activity in the allowance for loan losses at and for the three and six months ended June 30, 2019 and 2018, respectively. An allocation of the allowance to one category of loans does not prevent the Company from using that allowance to absorb losses in a different category.

Three Months Ended	June 30, 2019
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance
Commercial real estate	$	6,742	$	(4	)	$	13	$	258		$	7,009
Residential first mortgages	722		—			—		(13		)	709
Residential rentals	462		—			—		(4		)	458
Construction and land development	148		(329		)	—		427			246
Home equity and second mortgages	132		—			2		(3		)	131
Commercial loans	1,406		—			5		(9		)	1,402
Consumer loans	8		—			1		—			9
Commercial equipment	1,226		—			9		(281		)	954
	$	10,846	$	(333	)	$	30	$	375		$	10,918
Purchase Credit Impaired**	$	—	$	—		$	—	$	—		$	—
Six Months Ended	June 30, 2019
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance
Commercial real estate	$	6,882	$	(4	)	$	15	$	116		$	7,009
Residential first mortgages	755		—			—		(46		)	709
Residential rentals	498		(53		)	46		(33		)	458
Construction and land development	310		(329		)	—		265			246
Home equity and second mortgages	133		—			4		(6		)	131
Commercial loans	1,482		—			10		(90		)	1,402
Consumer loans	6		(4		)	2		5			9
Commercial equipment	910		(685		)	65		664			954
	$	10,976	$	(1,075	)	$	142	$	875		$	10,918
Purchase Credit Impaired**	$	—	$	—		$	—	$	—		$	—

Three Months Ended	June 30, 2018
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance
Commercial real estate	$	6,664	$	—		$	4	$	(105	)	$	6,563
Residential first mortgages	937		(76		)	—		(124		)	737
Residential rentals	459		—			—		10			469
Construction and land development	482		—			—		16			498
Home equity and second mortgages	118		—			5		(19		)	104
Commercial loans	1,045		(88		)	—		246			1,203
Consumer loans	7		—			—		—			7
Commercial equipment	759		—			9		376			1,144
	$	10,471	$	(164	)	$	18	$	400		$	10,725
Purchase Credit Impaired**	$	—	$	—		$	—	$	—		$	—
Six Months Ended	June 30, 2018
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance
Commercial real estate	$	6,451	$	(236	)	$	6	$	342		$	6,563
Residential first mortgages	1,144		(113		)	—		(294		)	737
Residential rentals	512		—			—		(43		)	469
Construction and land development	462		—			—		36			498
Home equity and second mortgages	162		(7		)	14		(65		)	104
Commercial loans	1,013		(88		)	—		278			1,203
Consumer loans	7		(1		)	—		1			7
Commercial equipment	764		(299		)	34		645			1,144
	$	10,515	$	(744	)	$	54	$	900		$	10,725
Purchase Credit Impaired**	$	—	$	—		$	—	$	—		$	—

** There is no allowance for loan loss on the PCI portfolios. A more detailed rollforward schedule will be presented if an allowance is required.

The following tables detail loan receivable and allowance balances disaggregated on the basis of the Company’s impairment methodology at June 30, 2019 and 2018 and December 31, 2018.

	June 30, 2019								December 31, 2018								June 30, 2018
(dollars in thousands)	Ending balance: individually  evaluated for impairment		Ending balance: collectively  evaluated for impairment		Purchase Credit Impaired		Total		Ending balance: individually  evaluated for impairment		Ending balance: collectively  evaluated for impairment		Purchase Credit Impaired		Total		Ending balance: individually  evaluated for impairment		Ending balance: collectively  evaluated for impairment		Purchase Credit Impaired		Total
Loan Receivables:
Commercial real estate	$	20,918	$	895,305	$	1,725	$	917,948	$	27,540	$	848,691	$	1,785	$	878,016	$	26,492	$	800,450	$	1,503	$	828,445
Residential first mortgages	2,123		154,096		451		156,670		2,527		153,716		466		156,709		2,434		160,186		470		163,090
Residential rentals	971		120,692		327		121,990		1,745		121,656		897		124,298		1,396		124,799		1,274		127,469
Construction and land development	—		35,662		—		35,662		729		28,976		—		29,705		729		27,646		272		28,647
Home equity and second mortgages	471		35,126		269		35,866		288		35,201		72		35,561		299		36,408		319		37,026
Commercial loans	2,626		64,991		—		67,617		2,751		68,929		—		71,680		2,792		54,727		—		57,519
Consumer loans	—		967		—		967		1		750		—		751		2		799		—		801
Commercial equipment	349		50,117		—		50,466		1,299		48,903		—		50,202		1,643		45,775		—		47,418
	$	27,458	$	1,356,956	$	2,772	$	1,387,186	$	36,880	$	1,306,822	$	3,220	$	1,346,922	$	35,787	$	1,250,790	$	3,838	$	1,290,415
Allowance for loan losses:
Commercial real estate	$	289	$	6,720	$	—	$	7,009	$	326	$	6,556	$	—	$	6,882	$	182	$	6,381	$	—	$	6,563
Residential first mortgages	—		709		—		709		—		755		—		755		—		737		—		737
Residential rentals	—		458		—		458		—		498		—		498		—		469		—		469
Construction and land development	—		246		—		246		—		310		—		310		210		288		—		498
Home equity and second mortgages	—		131		—		131		—		133		—		133		7		97		—		104
Commercial loans	700		702		—		1,402		700		782		—		1,482		458		745		—		1,203
Consumer loans	—		9		—		9		1		5		—		6		1		6		—		7
Commercial equipment	192		762		—		954		153		757		—		910		508		636		—		1,144
	$	1,181	$	9,737	$	—	$	10,918	$	1,180	$	9,796	$	—	$	10,976	$	1,366	$	9,359	$	—	$	10,725

Credit Quality Indicators

Credit quality indicators as of June 30, 2019 and December 31, 2018 were as follows:

Credit Risk Profile by Internally Assigned Grade

	Commercial Real Estate				Construction and Land Dev.				Residential Rentals
(dollars in thousands)	6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018
Unrated	$	106,552	$	112,280	$	2,017	$	2,172	$	38,698	$	37,478
Pass	790,002		741,037		33,645		26,805		82,614		85,551
Special mention	—		—		—		—		—		—
Substandard	21,394		24,699		—		728		678		1,269
Doubtful	—		—		—		—		—		—
Loss	—		—		—		—		—		—
Total	$	917,948	$	878,016	$	35,662	$	29,705	$	121,990	$	124,298

	Commercial Loans				Commercial Equipment				Total Commercial Portfolios
(dollars in thousands)	6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018
Unrated	$	18,539	$	19,157	$	18,230	$	15,373	$	184,036	$	186,460
Pass	46,452		49,828		32,018		33,685		984,731		936,906
Special mention	—		—		—		—		—		—
Substandard	2,626		2,695		218		1,144		24,916		30,535
Doubtful	—		—		—		—		—		—
Loss	—		—		—		—		—		—
Total	$	67,617	$	71,680	$	50,466	$	50,202	$	1,193,683	$	1,153,901

	Non-Commercial Portfolios **				Total All Portfolios
(dollars in thousands)	6/30/2019		12/31/2018		6/30/2019		12/31/2018
Unrated	$	150,159	$	146,889	$	334,195	$	333,349
Pass	42,114		44,441		1,026,845		981,347
Special mention	—		—		—		—
Substandard	1,230		1,691		26,146		32,226
Doubtful	—		—		—		—
Loss	—		—		—		—
Total	$	193,503	$	193,021	$	1,387,186	$	1,346,922

** Non-commercial portfolios are generally evaluated based on payment activity but may be risk graded if part of a larger commercial relationship or are credit impaired (e.g. non-accrual loans, TDRs).

Credit Risk Profile Based on Payment Activity

	Residential First Mortgages				Home Equity and Second Mtg.				Consumer Loans
(dollars in thousands)	6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018
Performing	$	156,524	$	156,563	$	35,556	$	35,414	$	967	$	751
Nonperforming	146		146		310		147		—		—
Total	$	156,670	$	156,709	$	35,866	$	35,561	$	967	$	751

Certain Loans Acquired In Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Table

A summary of changes in the accretable yield for PCI loans for the three and six months ended June 30, 2019 and 2018 and the year ended December 31, 2018 follows:

	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended
(dollars in thousands)	2019			2018			2019			2018			December 31, 2018
Accretable yield, beginning of period	$	680		$	459		$	734		$	—		$	—
Additions	—			—			—			517			517
Accretion	(68		)	(58		)	(122		)	(116		)	(230		)
Reclassification from (to) nonaccretable difference	156			—			156			—			134
Other changes, net	11			—			11			—			313
Accretable yield, end of period	$	779		$	401		$	779		$	401		$	734

Summary Of Acquired And Non Acquired Loans Table

The following is a summary of acquired and non-acquired loans as of June 30, 2019 and December 31, 2018:

BY ACQUIRED AND NON-ACQUIRED	June 30, 2019		%		December 31, 2018		%
Acquired loans - performing	$	88,353	6.37	%	$	103,667	7.70	%
Acquired loans - purchase credit impaired ("PCI")	2,772		0.20	%	3,220		0.24	%
Total acquired loans	91,125		6.57	%	106,887		7.94	%
Non-acquired loans**	1,296,061		93.43	%	1,240,035		92.06	%
Gross loans	1,387,186				1,346,922
Net deferred costs (fees)	1,363		0.10	%	1,183		0.09	%
Total loans, net of deferred costs	$	1,388,549			$	1,348,105

______________________________

** Non-acquired loans include loans transferred from acquired pools following release of acquisition accounting FMV adjustments.