Loans (Tables)

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Schedule of Loans Receivable

Loans consist of the following:

	December 31, 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	$	1,738	$	963,039		$	964,777		66.34	%	$	1,785	$	876,231		$	878,016		65.18	%
Residential first mortgages	—		167,710			167,710			11.53	%	466		156,243			156,709			11.63	%
Residential rentals	295		123,306			123,601			8.50	%	897		123,401			124,298			9.23	%
Construction and land development	—		34,133			34,133			2.35	%	—		29,705			29,705			2.21	%
Home equity and second mortgages	391		35,707			36,098			2.48	%	72		35,489			35,561			2.64	%
Commercial loans	—		63,102			63,102			4.34	%	—		71,680			71,680			5.32	%
Consumer loans	—		1,104			1,104			0.08	%	—		751			751			0.06	%
Commercial equipment	—		63,647			63,647			4.38	%	—		50,202			50,202			3.73	%
Gross loans	2,424		1,451,748			1,454,172			100.00	%	3,220		1,343,702			1,346,922			100.00	%
Net deferred costs (fees)	—		1,879			1,879			0.13	%	—		1,183			1,183			0.09	%
Total loans, net of deferred costs	$	2,424	$	1,453,627		$	1,456,051				$	3,220	$	1,344,885		$	1,348,105
Less: allowance for loan losses	—		(10,942		)	(10,942		)	-0.75	%	—		(10,976		)	(10,976		)	-0.81	%
Net loans	$	2,424	$	1,442,685		$	1,445,109				$	3,220	$	1,333,909		$	1,337,129

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

Non-accrual loans

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

(dollars in thousands)	December 31, 2019
	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	$	10,562	11	$	1,687	5	$	12,249	16
Residential first mortgages	—		—	830		3	830		3
Residential rentals	—		—	937		5	937		5
Construction and land development	—		—	—		—	—		—
Home equity and second mortgages	177		3	271		3	448		6
Commercial loans	1,807		2	1,320		1	3,127		3
Consumer loans	—		—	—		—	—		—
Commercial equipment	241		5	25		1	266		6
	$	12,787	21	$	5,070	18	$	17,857	39

(dollars in thousands)	December 31, 2018
	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
Construction and land development	—	—	—	—	—	—
Home equity and second mortgages	147	2	—	—	147	2
Commercial loans	866	2	—	—	866	2
Consumer loans	—	—	—	—	—	—
Commercial equipment	1,259	5	41	2	1,300	7
	11,152	23	8,130	15	19,282	38

Past Due Financing Receivables

An analysis of past due loans as of December 31, 2019 and 2018 was as follows:

(dollars in thousands)	December 31, 2019
	31-60 Days		61-89 Days		90 or Greater Days		Total Past Due		PCI Loans		Current		Total Loan Receivables
Commercial real estate	$	—	$	217	$	10,563	$	10,780	$	1,738	$	952,259	$	964,777
Residential first mortgages	—		—		—		—		—		167,710		167,710
Residential rentals	—		—		—		—		295		123,306		123,601
Construction and land dev.	—		—		—		—		—		34,133		34,133
Home equity and second mtg.	98		23		177		298		391		35,409		36,098
Commercial loans	—		—		1,807		1,807		—		61,295		63,102
Consumer loans	—		—		—		—		—		1,104		1,104
Commercial equipment	52		159		231		442		—		63,205		63,647
Total	$	150	$	399	$	12,778	$	13,327	$	2,424	$	1,438,421	$	1,454,172

(dollars in thousands)	December 31, 2018
	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, including TDRs, at December 31, 2019 and 2018 were as follows:

(dollars in thousands)	December 31, 2019
	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	$	20,914	$	15,919	$	4,788	$	20,707	$	417	$	21,035	$	813
Residential first mortgages	1,921		1,917		—		1,917		—		1,962		86
Residential rentals	941		937		—		937		—		967		56
Construction and land dev.	—		—		—		—		—		—		—
Home equity and second mtg.	524		510		—		510		—		519		23
Commercial loans	3,127		1,807		1,320		3,127		210		3,284		152
Consumer loans	—		—		—		—		—		—		—
Commercial equipment	808		585		203		788		201		826		35
Total	$	28,235	$	21,675	$	6,311	$	27,986	$	828	$	28,593	$	1,165

(dollars in thousands)	December 31, 2018
	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		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 December 31, 2019 and 2018 were as follows:

(dollars in thousands)	December 31, 2019					December 31, 2018
	Dollars			Number of Loans		Dollars			Number of Loans
Commercial real estate	$	1,420		3		$	5,612		7
Residential first mortgages	64			1		66			1
Residential rentals	—			—		216			1
Construction and land development	—			—		729			2
Commercial loans	—			—		53			1
Commercial equipment	565			4		29			1
Total TDRs	$	2,049		8		$	6,705		13
Less: TDRs included in non-accrual loans	(1,399		)	(3	)	(29		)	(1	)
Total performing accrual TDR loans	$	650		5		$	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 years ended December 31, 2019, 2018 and 2017, 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.

Year Ended	December 31, 2019
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance
Commercial real estate	$	6,882	$	(148	)	$	15	$	649		$	7,398
Residential first mortgages	755		—			—		(291		)	464
Residential rentals	498		(53		)	46		(94		)	397
Construction and land development	310		(329		)	—		292			273
Home equity and second mortgages	133		(28		)	6		38			149
Commercial loans	1,482		(1,127		)	40		691			1,086
Consumer loans	6		(5		)	2		7			10
Commercial equipment	910		(685		)	102		838			1,165
	$	10,976	$	(2,375	)	$	211	$	2,130		$	10,942
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.

Year Ended	December 31, 2018
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance
Commercial real estate	$	6,451	$	(268	)	$	10	$	689		$	6,882
Residential first mortgages	1,144		(115		)	—		(274		)	755
Residential rentals	512		(84		)	—		70			498
Construction and land development	462		—			—		(152		)	310
Home equity and second mortgages	162		(7		)	18		(40		)	133
Commercial loans	1,013		(94		)	189		374			1,482
Consumer loans	7		(2		)	—		1			6
Commercial equipment	764		(647		)	56		737			910
	$	10,515	$	(1,217	)	$	273	$	1,405		$	10,976

Year Ended	December 31, 2017
(dollars in thousands)	Beginning Balance		Charge-offs			Recoveries		Provisions			Ending Balance
Commercial real estate	$	5,212	$	(217	)	$	63	$	1,393		$	6,451
Residential first mortgages	1,406		—			—		(262		)	1,144
Residential rentals	362		(42		)	—		192			512
Construction and land development	941		(26		)	—		(453		)	462
Home equity and second mortgages	138		(14		)	1		37			162
Commercial loans	794		(13		)	1		231			1,013
Consumer loans	3		(2		)	—		6			7
Commercial equipment	1,004		(168		)	62		(134		)	764
	$	9,860	$	(482	)	$	127	$	1,010		$	10,515

Loan receivable and allowance balances disaggregated on basis of Company's impairment methodology

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

	December 31, 2019								December 31, 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
Loan Receivables:
Commercial real estate	$	20,707	$	942,332	$	1,738	$	964,777	$	27,540	$	848,691	$	1,785	$	878,016
Residential first mortgages	1,917		165,793		—		167,710		2,527		153,716		466		156,709
Residential rentals	937		122,369		295		123,601		1,745		121,656		897		124,298
Construction and land development	—		34,133		—		34,133		729		28,976		—		29,705
Home equity and second mortgages	510		35,197		391		36,098		288		35,201		72		35,561
Commercial loans	3,127		59,975		—		63,102		2,751		68,929		—		71,680
Consumer loans	—		1,104		—		1,104		1		750		—		751
Commercial equipment	788		62,859		—		63,647		1,299		48,903		—		50,202
	$	27,986	$	1,423,762	$	2,424	$	1,454,172	$	36,880	$	1,306,822	$	3,220	$	1,346,922
Allowance for loan losses:
Commercial real estate	$	417	$	6,981	$	—	$	7,398	$	326	$	6,556	$	—	$	6,882
Residential first mortgages	—		464		—		464		—		755		—		755
Residential rentals	—		397		—		397		—		498		—		498
Construction and land development	—		273		—		273		—		310		—		310
Home equity and second mortgages	—		149		—		149		—		133		—		133
Commercial loans	210		876		—		1,086		700		782		—		1,482
Consumer loans	—		10		—		10		1		5		—		6
Commercial equipment	201		964		—		1,165		153		757		—		910
	$	828	$	10,114	$	—	$	10,942	$	1,180	$	9,796	$	—	$	10,976

Credit Quality Indicators

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

Credit Risk Profile by Internally Assigned Grade

(dollars in thousands)	Commercial Real Estate				Construction and Land Dev.				Residential Rentals
	12/31/2019		12/31/2018		12/31/2019		12/31/2018		12/31/2019		12/31/2018
Unrated	$	102,695	$	112,280	$	2,075	$	2,172	$	38,139	$	37,478
Pass	840,403		741,037		32,058		26,805		84,811		85,551
Special mention	—		—		—		—		—		—
Substandard	21,679		24,699		—		728		651		1,269
Doubtful	—		—		—		—		—		—
Loss	—		—		—		—		—		—
Total	$	964,777	$	878,016	$	34,133	$	29,705	$	123,601	$	124,298

(dollars in thousands)	Commercial Loans				Commercial Equipment				Total Commercial Portfolios
	12/31/2019		12/31/2018		12/31/2019		12/31/2018		12/31/2019		12/31/2018
Unrated	$	16,754	$	19,157	$	26,045	$	15,373	$	185,708	$	186,460
Pass	43,221		49,828		37,399		33,685		1,037,892		936,906
Special mention	—		—		—		—		—		—
Substandard	3,127		2,695		203		1,144		25,660		30,535
Doubtful	—		—		—		—		—		—
Loss	—		—		—		—		—		—
Total	$	63,102	$	71,680	$	63,647	$	50,202	$	1,249,260	$	1,153,901

(dollars in thousands)	Non-Commercial Portfolios **				Total All Portfolios
	12/31/2019		12/31/2018		12/31/2019		12/31/2018
Unrated	$	164,991	$	146,889	$	350,699	$	333,349
Pass	38,718		44,441		1,076,610		981,347
Special mention	—		—		—		—
Substandard	1,203		1,691		26,863		32,226
Doubtful	—		—		—		—
Loss	—		—		—		—
Total	$	204,912	$	193,021	$	1,454,172	$	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 (Non-Commercial Portfolios)

(dollars in thousands)	Residential First Mortgages				Home Equity and Second Mtg.				Consumer Loans
	12/31/2019		12/31/2018		12/31/2019		12/31/2018		12/31/2019		12/31/2018
Performing	$	167,710	$	156,563	$	35,921	$	35,414	$	1,104	$	751
Nonperforming	—		146		177		147		—		—
Total	$	167,710	$	156,709	$	36,098	$	35,561	$	1,104	$	751

Accounting for Certain Loans and Debt Securities Acquired In Transfer Table

In conjunction with the acquisition of County First, the PCI loan portfolio was accounted for at fair value as follows:

(dollars in thousands)	January 1, 2018
Contractual principal and interest at acquisition	$	6,126
Nonaccretable difference	(1,093		)
Expected cash flows at acquisition	5,033
Accretable yield	(516		)
Basis in PCI loans at acquisition - estimated fair value	$	4,517

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 year ended December 31, 2019 follows:

	Years Ended December 31,
(dollars in thousands)	2019			2018
Accretable yield, beginning of period	$	733		$	—
Additions	—			516
Accretion	(354		)	(230		)
Reclassification from (to) nonaccretable difference	330			134
Other changes, net	(32		)	313
Accretable yield, end of period	$	677		$	733

Summary Of Acquired And Non Acquired Loans Table

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

BY ACQUIRED AND NON-ACQUIRED	December 31, 2019		%		December 31, 2018		%
Acquired loans - performing	$	74,654	5.13	%	$	103,667	7.70	%
Acquired loans - purchase credit impaired ("PCI")	2,424		0.17	%	3,220		0.24	%
Total acquired loans	77,078		5.30	%	106,887		7.94	%
Non-acquired loans**	1,377,094		94.70	%	1,240,035		92.06	%
Gross loans	1,454,172		100.00	%	1,346,922		100.00	%
Net deferred costs (fees)	1,879		0.13	%	1,183		0.09	%
Total loans, net of deferred costs	$	1,456,051			$	1,348,105

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

Related Party Loans

Activity in loans outstanding to executive officers and directors are summarized as follows:

(dollars in thousands)	At and For the Years Ended December 31,
	2019			2018			2017
Balance, beginning of period	$	24,852		$	26,476		$	26,464
Loans and additions	1,845			46			3,699
Change in Directors' status	(10,452		)	575			—
Repayments	(7,575		)	(2,245		)	(3,687		)
Balance, end of period	$	8,670		$	24,852		$	26,476

In addition, the Bank had outstanding loans of $5.4 million, $9.2 million and $10.4 million, respectively, for the years ended December 31, 2019, 2018 and 2017 to charitable and community organizations in which the Bank's executive officers and directors volunteer.

Loan Participations

The Bank sells portions of commercial, commercial real estate and commercial construction loans to other lenders. The Bank's sold participated loans with other lenders at December 31, 2019 and 2018 were $14.9 million and $24.6 million, respectively. The Bank may also buy loans, portions of loans, or participation certificates from other lenders to limit overall exposure. The Bank only purchases loans or portions of loans after reviewing loan documents, underwriting support, and completing other procedures, as necessary.

The Bank's purchased participation loans from other lenders at December 31, 2019 and 2018 were $3.4 million and $11.9 million, respectively. Purchased participation loans are subject to the same regulatory and internal policy requirements as other loans in the Bank's portfolio.