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Loans and Allowance for Loan Losses | 6 Months Ended
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Jun. 30, 2017
Receivables [Abstract] |
Loans and allowance for loan losses | Note (4)—Loans and allowance for loan losses: Loans outstanding at June 30, 2017 and December 31, 2016, by major lending classification are as follows:
|  | June 30, |  |  | December 31, |
|  | 2017 |  |  | 2016 |
Commercial and industrial |  | $ | 423,704 |  |  | $ | 386,233 |
Construction |  |  | 282,727 |  |  |  | 245,905 |
Residential real estate: |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 307,152 |  |  |  | 294,924 |
Residential line of credit |  |  | 177,783 |  |  |  | 177,190 |
Multi-family mortgage |  |  | 52,810 |  |  |  | 44,977 |
Commercial real estate: |  |  |  |  |  |  |  |
Owner occupied |  |  | 371,462 |  |  |  | 357,346 |
Non-owner occupied |  |  | 273,285 |  |  |  | 267,902 |
Consumer and other |  |  | 82,051 |  |  |  | 74,307 |
Gross loans |  |  | 1,970,974 |  |  |  | 1,848,784 |
Less: Allowance for loan losses |  |  | (23,247 | ) |  |  | (21,747 | )
Net loans |  | $ | 1,947,727 |  |  | $ | 1,827,037 |
As of June 30, 2017 and December 31, 2016, $390,143 and $565,717, respectively, of 1-to-4 family mortgage loans, loans held for sale and multi-family mortgage loans were pledged to the Federal Home Loan Bank of Cincinnati securing advances against the Bank’s line. As of June 30, 2017 and December 31, 2016, $1,295,281 and $1,072,118, respectively, of commercial and industrial , construction, residential real estate, commercial real estate, and consumer and other loans were pledged to the Federal Reserve Bank under the Borrower-in-Custody program. The following provides the allowance for loan losses by portfolio segment and the related investment in loans net of unearned interest for the three and six months ended June 30, 2017 and 2016 (in thousands):
|  | 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 June 30, 2017 |
Beginning balance - March 31, 2017 |  | $ | 5,402 |  |  | $ | 5,598 |  |  | $ | 2,896 |  |  | $ | 1,514 |  |  | $ | 508 |  |  | $ | 3,387 |  |  | $ | 2,660 |  |  | $ | 933 |  |  | $ | 22,898 |
Provision for loan losses |  |  | (1,342 | ) |  |  | (48 | ) |  |  | 99 |  |  |  | (29 | ) |  |  | 5 |  |  |  | 585 |  |  |  | (210 | ) |  |  | 75 |  |  |  | (865 | )
Recoveries of loans previously charged-off |  |  | 1,511 |  |  |  | 29 |  |  |  | 14 |  |  |  | 155 |  |  |  | — |  |  |  | 11 |  |  |  | 2 |  |  |  | 283 |  |  |  | 2,005 |
Loans charged off |  |  | (131 | ) |  |  | — |  |  |  | (35 | ) |  |  | (195 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (430 | ) |  |  | (791 | )
Ending balance - June 30, 2017 |  | $ | 5,440 |  |  | $ | 5,579 |  |  | $ | 2,974 |  |  | $ | 1,445 |  |  | $ | 513 |  |  | $ | 3,983 |  |  | $ | 2,452 |  |  | $ | 861 |  |  | $ | 23,247 |
Six Months Ended June 30, 2017 |
Beginning balance - December 31, 2016 |  | $ | 5,309 |  |  | $ | 4,940 |  |  | $ | 3,197 |  |  | $ | 1,613 |  |  | $ | 504 |  |  | $ | 3,302 |  |  | $ | 2,019 |  |  | $ | 863 |  |  | $ | 21,747 |
Provision for loan losses |  |  | (1,163 | ) |  |  | 587 |  |  |  | (140 | ) |  |  | (184 | ) |  |  | 9 |  |  |  | 666 |  |  |  | (1,208 | ) |  |  | 311 |  |  |  | (1,122 | )
Recoveries of loans previously charged-off |  |  | 1,594 |  |  |  | 58 |  |  |  | 40 |  |  |  | 211 |  |  |  | — |  |  |  | 15 |  |  |  | 1,641 |  |  |  | 296 |  |  |  | 3,855 |
Loans charged off |  |  | (300 | ) |  |  | (6 | ) |  |  | (123 | ) |  |  | (195 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (609 | ) |  |  | (1,233 | )
Ending balance - June 30, 2017 |  | $ | 5,440 |  |  | $ | 5,579 |  |  | $ | 2,974 |  |  | $ | 1,445 |  |  | $ | 513 |  |  | $ | 3,983 |  |  | $ | 2,452 |  |  | $ | 861 |  |  | $ | 23,247 |
|  | 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 June 30, 2016 |
Beginning balance - March 31, 2016 |  | $ | 5,242 |  |  | $ | 4,518 |  |  | $ | 4,280 |  |  | $ | 2,075 |  |  | $ | 590 |  |  | $ | 4,013 |  |  | $ | 2,739 |  |  | $ | 974 |  |  | $ | 24,431 |
Provision for loan losses |  |  | 416 |  |  |  | (207 | ) |  |  | (661 | ) |  |  | (126 | ) |  |  | (137 | ) |  |  | (161 | ) |  |  | (106 | ) |  |  | 193 |  |  |  | (789 | )
Recoveries of loans previously charged-off |  |  | 462 |  |  |  | 64 |  |  |  | 45 |  |  |  | 70 |  |  |  | — |  |  |  | 5 |  |  |  | 1 |  |  |  | 99 |  |  |  | 746 |
Loans charged off |  |  | (196 | ) |  |  | (2 | ) |  |  | (53 | ) |  |  | (75 | ) |  |  | — |  |  |  | (93 | ) |  |  | — |  |  |  | (235 | ) |  |  | (654 | )
Ending balance - June 30, 2016 |  | $ | 5,924 |  |  | $ | 4,373 |  |  | $ | 3,611 |  |  | $ | 1,944 |  |  | $ | 453 |  |  | $ | 3,764 |  |  | $ | 2,634 |  |  | $ | 1,031 |  |  | $ | 23,734 |
Six Months Ended June 30, 2016 |  |  |  |  |
Beginning balance - December 31, 2015 |  | $ | 5,135 |  |  | $ | 5,143 |  |  | $ | 4,176 |  |  | $ | 2,201 |  |  | $ | 311 |  |  | $ | 3,682 |  |  | $ | 2,622 |  |  | $ | 1,190 |  |  | $ | 24,460 |
Provision for loan losses |  |  | 515 |  |  |  | (873 | ) |  |  | (619 | ) |  |  | (289 | ) |  |  | 142 |  |  |  | 164 |  |  |  | 7 |  |  |  | 155 |  |  |  | (798 | )
Recoveries of loans previously charged-off |  |  | 472 |  |  |  | 105 |  |  |  | 107 |  |  |  | 107 |  |  |  | — |  |  |  | 11 |  |  |  | 5 |  |  |  | 171 |  |  |  | 978 |
Loans charged off |  |  | (198 | ) |  |  | (2 | ) |  |  | (53 | ) |  |  | (75 | ) |  |  | — |  |  |  | (93 | ) |  |  | — |  |  |  | (485 | ) |  |  | (906 | )
Ending balance - June 30, 2016 |  | $ | 5,924 |  |  | $ | 4,373 |  |  | $ | 3,611 |  |  | $ | 1,944 |  |  | $ | 453 |  |  | $ | 3,764 |  |  | $ | 2,634 |  |  | $ | 1,031 |  |  | $ | 23,734 |
The following table provides the allocation of the allowance for loan losses by loan category broken out between loans individually evaluated for impairment and loans collectively evaluated for impairment as of June 30, 2017 and December 31, 2016:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | June 30, 2017 |
|  | 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 |  | $ | 38 |  |  | $ | — |  |  | $ | 17 |  |  | $ | — |  |  | $ | — |  |  | $ | 85 |  |  | $ | 62 |  |  | $ | — |  |  | $ | 202 |
Collectively evaluated for impairment |  |  | 5,402 |  |  |  | 5,579 |  |  |  | 2,957 |  |  |  | 1,445 |  |  |  | 513 |  |  |  | 3,898 |  |  |  | 2,390 |  |  |  | 861 |  |  |  | 23,045 |
Acquired with deteriorated credit quality |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Ending balance - June 30, 2017 |  | $ | 5,440 |  |  | $ | 5,579 |  |  | $ | 2,974 |  |  | $ | 1,445 |  |  | $ | 513 |  |  | $ | 3,983 |  |  | $ | 2,452 |  |  | $ | 861 |  |  | $ | 23,247 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, 2016 |
|  | 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 |  | $ | 135 |  |  | $ | — |  |  | $ | 23 |  |  | $ | — |  |  | $ | — |  |  | $ | 113 |  |  | $ | 242 |  |  | $ | — |  |  | $ | 513 |
Collectively evaluated for impairment |  |  | 5,174 |  |  |  | 4,940 |  |  |  | 3,174 |  |  |  | 1,613 |  |  |  | 504 |  |  |  | 3,189 |  |  |  | 1,777 |  |  |  | 863 |  |  |  | 21,234 |
Acquired with deteriorated credit quality |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Ending balance - December 31, 2016 |  | $ | 5,309 |  |  | $ | 4,940 |  |  | $ | 3,197 |  |  | $ | 1,613 |  |  | $ | 504 |  |  | $ | 3,302 |  |  | $ | 2,019 |  |  | $ | 863 |  |  | $ | 21,747 |
The following table provides the amount of loans by loan category broken between loans individually evaluated for impairment and loans collectively evaluated for impairment as of June 30, 2017 and December 31, 2016:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | June 30, 2017 |
|  | 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 |  | $ | 1,222 |  |  | $ | 299 |  |  | $ | 2,191 |  |  | $ | — |  |  | $ | 1,001 |  |  | $ | 2,374 |  |  | $ | 2,103 |  |  | $ | 24 |  |  | $ | 9,214 |
Collectively evaluated for impairment |  |  | 422,242 |  |  |  | 278,077 |  |  |  | 302,961 |  |  |  | 177,783 |  |  |  | 51,785 |  |  |  | 365,087 |  |  |  | 266,068 |  |  |  | 82,024 |  |  |  | 1,946,027 |
Acquired with deteriorated credit quality |  |  | 240 |  |  |  | 4,351 |  |  |  | 2,000 |  |  |  | — |  |  |  | 24 |  |  |  | 4,001 |  |  |  | 5,114 |  |  |  | 3 |  |  |  | 15,733 |
Ending balance - June 30, 2017 |  | $ | 423,704 |  |  | $ | 282,727 |  |  | $ | 307,152 |  |  | $ | 177,783 |  |  | $ | 52,810 |  |  | $ | 371,462 |  |  | $ | 273,285 |  |  | $ | 82,051 |  |  | $ | 1,970,974 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, 2016 |
|  | 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 |  | $ | 1,476 |  |  | $ | 2,686 |  |  | $ | 2,471 |  |  | $ | 311 |  |  | $ | 1,027 |  |  | $ | 2,752 |  |  | $ | 2,201 |  |  | $ | 27 |  |  | $ | 12,951 |
Collectively evaluated for impairment |  |  | 384,279 |  |  |  | 238,900 |  |  |  | 290,346 |  |  |  | 176,879 |  |  |  | 43,922 |  |  |  | 350,812 |  |  |  | 260,361 |  |  |  | 74,276 |  |  |  | 1,819,775 |
Acquired with deteriorated credit quality |  |  | 478 |  |  |  | 4,319 |  |  |  | 2,107 |  |  |  | — |  |  |  | 28 |  |  |  | 3,782 |  |  |  | 5,340 |  |  |  | 4 |  |  |  | 16,058 |
Ending balance - December 31, 2016 |  | $ | 386,233 |  |  | $ | 245,905 |  |  | $ | 294,924 |  |  | $ | 177,190 |  |  | $ | 44,977 |  |  | $ | 357,346 |  |  | $ | 267,902 |  |  | $ | 74,307 |  |  | $ | 1,848,784 |
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. The Company’s risk rating definitions include: Watch. Loans rated as watch includes loans in which management believes conditions have occurred, or may occur, which could result in the loan being downgraded to a worse rated category. Also included in watch are loans rated as special mention, which have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans rated as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so rated have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Also included in this category are purchased credit impaired loans and loans considered doubtful, which have all the weaknesses previously described and management believes those weaknesses may make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans not meeting the criteria above are considered to be pass rated loans. The following table shows credit quality indicators by portfolio class at June 30, 2017 and December 31, 2016:
June 30, 2017 |  | Pass |  |  | Watch |  |  | Substandard |  |  | Total |
Commercial and industrial |  | $ | 382,189 |  |  | $ | 39,404 |  |  | $ | 2,111 |  |  | $ | 423,704 |
Construction |  |  | 275,094 |  |  |  | 2,701 |  |  |  | 4,932 |  |  |  | 282,727 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 291,280 |  |  |  | 5,135 |  |  |  | 10,737 |  |  |  | 307,152 |
Residential line of credit |  |  | 174,178 |  |  |  | 1,424 |  |  |  | 2,181 |  |  |  | 177,783 |
Multi-family mortgage |  |  | 51,642 |  |  |  | 143 |  |  |  | 1,025 |  |  |  | 52,810 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 353,275 |  |  |  | 9,293 |  |  |  | 8,894 |  |  |  | 371,462 |
Non-owner occupied |  |  | 259,588 |  |  |  | 6,216 |  |  |  | 7,481 |  |  |  | 273,285 |
Consumer and other |  |  | 81,107 |  |  |  | 447 |  |  |  | 497 |  |  |  | 82,051 |
Total |  | $ | 1,868,353 |  |  | $ | 64,763 |  |  | $ | 37,858 |  |  | $ | 1,970,974 |
December 31, 2016 |  | Pass |  |  | Watch |  |  | Substandard |  |  | Total |
Commercial and industrial |  | $ | 351,046 |  |  | $ | 31,074 |  |  | $ | 4,113 |  |  | $ | 386,233 |
Construction |  |  | 236,588 |  |  |  | 4,612 |  |  |  | 4,705 |  |  |  | 245,905 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 277,948 |  |  |  | 6,945 |  |  |  | 10,031 |  |  |  | 294,924 |
Residential line of credit |  |  | 173,011 |  |  |  | 1,875 |  |  |  | 2,304 |  |  |  | 177,190 |
Multi-family mortgage |  |  | 43,770 |  |  |  | 152 |  |  |  | 1,055 |  |  |  | 44,977 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 338,698 |  |  |  | 10,459 |  |  |  | 8,189 |  |  |  | 357,346 |
Non-owner occupied |  |  | 249,877 |  |  |  | 10,273 |  |  |  | 7,752 |  |  |  | 267,902 |
Consumer and other |  |  | 73,454 |  |  |  | 417 |  |  |  | 436 |  |  |  | 74,307 |
Total |  | $ | 1,744,392 |  |  | $ | 65,807 |  |  | $ | 38,585 |  |  | $ | 1,848,784 |
Loans acquired in business combinations that exhibited at the date of acquisition evidence of deterioration of credit quality since origination such that it was probable that all contractually required payments would not be collected are considered to be purchased credit impaired and were as follows at June 30, 2017 and December 31, 2016:
|  | June 30, 2017 |  |  | December 31, 2016 |
Commercial and industrial |  | $ | 240 |  |  | $ | 478 |
Construction |  |  | 4,351 |  |  |  | 4,319 |
Residential real estate: |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 2,000 |  |  |  | 2,107 |
Residential line of credit |  |  | — |  |  |  | — |
Multi-family mortgage |  |  | 24 |  |  |  | 28 |
Commercial real estate: |  |  |  |  |  |  |  |
Owner occupied |  |  | 4,001 |  |  |  | 3,782 |
Non-owner occupied |  |  | 5,114 |  |  |  | 5,340 |
Consumer and other |  |  | 3 |  |  |  | 4 |
Total |  | $ | 15,733 |  |  | $ | 16,058 |
The following table presents the current carrying value of loans determined to be impaired at the time of acquisition at June 30, 2017 and December 31, 2016:
|  | June 30, 2017 |  |  | December 31, 2016 |
Contractually-required principal and interest |  | $ | 21,042 |  |  | $ | 22,961 |
Nonaccretable difference |  |  | (3,464 | ) |  |  | (4,459 | )
Cash flows expected to be collected |  |  | 17,578 |  |  |  | 18,502 |
Accretable yield |  |  | (1,845 | ) |  |  | (2,444 | )
Carrying value |  | $ | 15,733 |  |  | $ | 16,058 |
Changes in accretable yield and nonaccretable difference of purchased loans were as follows:
|  | Accretable yield |  |  | Nonaccretable Difference |  |  |  |  |
|  | Purchased Credit Impaired |  |  | Purchased Non-impaired |  |  | Purchased Credit Impaired |  |  | Purchased Non-impaired |  |  | Total |
Balance at March 31, 2017 |  | $ | (2,142 | ) |  | $ | (1,103 | ) |  | $ | (3,756 | ) |  | $ | — |  |  | $ | (7,001 | )
Principal reductions/ pay-offs |  |  | (292 | ) |  |  | — |  |  |  | 292 |  |  |  | — |  |  |  | — |
Charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Recoveries |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Accretion |  |  | 589 |  |  |  | 259 |  |  |  | — |  |  |  | — |  |  |  | 848 |
Balance at June 30, 2017 |  | $ | (1,845 | ) |  | $ | (844 | ) |  | $ | (3,464 | ) |  | $ | — |  |  | $ | (6,153 | )
Balance at March 31, 2016 |  | $ | (1,460 | ) |  | $ | (1,729 | ) |  | $ | (7,698 | ) |  | $ | — |  |  | $ | (10,887 | )
Principal reductions/ pay-offs |  |  | (1,227 | ) |  |  | — |  |  |  | 1,227 |  |  |  | — |  |  |  | — |
Charge-offs |  |  | — |  |  |  | — |  |  |  | 32 |  |  |  | — |  |  |  | 32 |
Sale of credit card portfolio |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Accretion |  |  | 1,439 |  |  |  | 116 |  |  |  | — |  |  |  | — |  |  |  | 1,555 |
Balance at June 30, 2016 |  | $ | (1,248 | ) |  | $ | (1,613 | ) |  | $ | (6,439 | ) |  | $ | — |  |  | $ | (9,300 | )
|  | Accretable yield |  |  | Nonaccretable Difference |  |  |  |  |
|  | Purchased Credit Impaired |  |  | Purchased Non-impaired |  |  | Purchased Credit Impaired |  |  | Purchased Non-impaired |  |  | Total |
Balance at December 31, 2016 |  | $ | (2,444 | ) |  | $ | (1,240 | ) |  | $ | (4,459 | ) |  | $ | — |  |  | $ | (8,143 | )
Principal reductions/ pay-offs |  |  | (990 | ) |  |  | — |  |  |  | 990 |  |  |  | — |  |  |  | — |
Charge-offs |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | — |  |  |  | 5 |
Recoveries |  |  | (23 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (23 | )
Accretion |  |  | 1,612 |  |  |  | 396 |  |  |  | — |  |  |  | — |  |  |  | 2,008 |
Balance at June 30, 2017 |  | $ | (1,845 | ) |  | $ | (844 | ) |  | $ | (3,464 | ) |  | $ | — |  |  | $ | (6,153 | )
Balance at December 31, 2015 |  | $ | (1,637 | ) |  | $ | (2,147 | ) |  | $ | (8,369 | ) |  | $ | (70 | ) |  | $ | (12,223 | )
Principal reductions/ pay-offs |  |  | (1,458 | ) |  |  | — |  |  |  | 1,458 |  |  |  | — |  |  |  | — |
Charge-offs |  |  | — |  |  |  | — |  |  |  | 472 |  |  |  | — |  |  |  | 472 |
Sale of credit card portfolio |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 70 |  |  |  | 70 |
Accretion |  |  | 1,847 |  |  |  | 534 |  |  |  | — |  |  |  | — |  |  |  | 2,381 |
Balance at June 30, 2016 |  | $ | (1,248 | ) |  | $ | (1,613 | ) |  | $ | (6,439 | ) |  | $ | — |  |  | $ | (9,300 | )
Nonperforming loans include loans that are no longer accruing interest (non-accrual loans) and loans past due ninety or more days and still accruing interest. Nonperforming loans and impaired loans are defined differently. Some loans may be included in both categories, whereas other loans may only be included in one category. Loans acquired with deteriorated credit quality amounting to $15,733 and $16,058, respectively, at June 30, 2017 and December 31, 2016 have been excluded from the tables below in accordance with ASC-310-10-50, Receivables- Overall- Disclosure. The following table provides 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 June 30, 2017 and December 31, 2016:
June 30, 2017 |  | 30-89 days past due |  |  | 90 days or more and accruing interest |  |  | Non-accrual loans |  |  | Loans current on payments and accruing interest |  |  | Total |
Commercial and industrial |  | $ | 388 |  |  | $ | 29 |  |  | $ | 1,089 |  |  | $ | 421,958 |  |  | $ | 423,464 |
Construction |  |  | 82 |  |  |  | 194 |  |  |  | 244 |  |  |  | 277,856 |  |  |  | 278,376 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 2,435 |  |  |  | 720 |  |  |  | 2,261 |  |  |  | 299,736 |  |  |  | 305,152 |
Residential line of credit |  |  | 777 |  |  |  | 515 |  |  |  | 541 |  |  |  | 175,950 |  |  |  | 177,783 |
Multi-family mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 52,786 |  |  |  | 52,786 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 739 |  |  |  | 10 |  |  |  | 1,874 |  |  |  | 364,838 |  |  |  | 367,461 |
Non-owner occupied |  |  | — |  |  |  | — |  |  |  | 2,293 |  |  |  | 265,878 |  |  |  | 268,171 |
Consumer and other |  |  | 343 |  |  |  | 151 |  |  |  | 25 |  |  |  | 81,529 |  |  |  | 82,048 |
Total |  | $ | 4,764 |  |  | $ | 1,619 |  |  | $ | 8,327 |  |  | $ | 1,940,531 |  |  | $ | 1,955,241 |
December 31, 2016 |  | 30-89 days past due |  |  | 90 days or more and accruing interest |  |  | Non-accrual loans |  |  | Loans current on payments and accruing interest |  |  | Total |
Commercial and industrial |  | $ | 262 |  |  | $ | 127 |  |  | $ | 1,297 |  |  | $ | 384,069 |  |  | $ | 385,755 |
Construction |  |  | 441 |  |  |  | 17 |  |  |  | 254 |  |  |  | 240,874 |  |  |  | 241,586 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 3,130 |  |  |  | 697 |  |  |  | 2,289 |  |  |  | 286,701 |  |  |  | 292,817 |
Residential line of credit |  |  | 1,139 |  |  |  | 433 |  |  |  | 601 |  |  |  | 175,017 |  |  |  | 177,190 |
Multi-family mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 44,949 |  |  |  | 44,949 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 186 |  |  |  | — |  |  |  | 2,007 |  |  |  | 351,371 |  |  |  | 353,564 |
Non-owner occupied |  |  | 158 |  |  |  | — |  |  |  | 2,251 |  |  |  | 260,153 |  |  |  | 262,562 |
Consumer and other |  |  | 433 |  |  |  | 55 |  |  |  | 30 |  |  |  | 73,785 |  |  |  | 74,303 |
Total |  | $ | 5,749 |  |  | $ | 1,329 |  |  | $ | 8,729 |  |  | $ | 1,816,919 |  |  | $ | 1,832,726 |
Impaired loans recognized in conformity with ASC 310 at June 30, 2017 and December 31, 2016, segregated by class, were as follows:
June 30, 2017 |  | Recorded investment |  |  | Unpaid principal |  |  | Related allowance |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 730 |  |  | $ | 445 |  |  | $ | 38 |
Construction |  |  | — |  |  |  | — |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 96 |  |  |  | 362 |  |  |  | 17 |
Residential line of credit |  |  | — |  |  |  | — |  |  |  | — |
Multi-family mortgage |  |  | — |  |  |  | — |  |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 609 |  |  |  | 648 |  |  |  | 85 |
Non-owner occupied |  |  | 507 |  |  |  | 1,036 |  |  |  | 62 |
Consumer and other |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 1,942 |  |  | $ | 2,491 |  |  | $ | 202 |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 492 |  |  | $ | 631 |  |  | $ | — |
Construction |  |  | 299 |  |  |  | 315 |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 2,095 |  |  |  | 2,097 |  |  |  | — |
Residential line of credit |  |  | — |  |  |  | — |  |  |  | — |
Multi-family mortgage |  |  | 1,001 |  |  |  | 1,000 |  |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 1,765 |  |  |  | 2,222 |  |  |  | — |
Non-owner occupied |  |  | 1,596 |  |  |  | 2,333 |  |  |  | — |
Consumer and other |  |  | 24 |  |  |  | 24 |  |  |  | — |
Total |  | $ | 7,272 |  |  | $ | 8,622 |  |  | $ | — |
Total impaired loans |  | $ | 9,214 |  |  | $ | 11,113 |  |  | $ | 202 |
December 31, 2016 |  | Recorded investment |  |  | Unpaid principal |  |  | Related allowance |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 854 |  |  | $ | 854 |  |  | $ | 135 |
Construction |  |  | — |  |  |  | — |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 103 |  |  |  | 369 |  |  |  | 23 |
Residential line of credit |  |  | — |  |  |  | — |  |  |  | — |
Multi-family mortgage |  |  | — |  |  |  | — |  |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 635 |  |  |  | 654 |  |  |  | 113 |
Non-owner occupied |  |  | 1,151 |  |  |  | 1,678 |  |  |  | 242 |
Consumer and other |  |  | 1 |  |  |  | 1 |  |  |  | — |
Total |  | $ | 2,744 |  |  | $ | 3,556 |  |  | $ | 513 |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 622 |  |  | $ | 746 |  |  | $ | — |
Construction |  |  | 2,686 |  |  |  | 2,694 |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 2,368 |  |  |  | 2,370 |  |  |  | — |
Residential line of credit |  |  | 311 |  |  |  | 321 |  |  |  | — |
Multi-family mortgage |  |  | 1,027 |  |  |  | 1,027 |  |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 2,117 |  |  |  | 3,205 |  |  |  | — |
Non-owner occupied |  |  | 1,050 |  |  |  | 1,781 |  |  |  | — |
Consumer and other |  |  | 26 |  |  |  | 26 |  |  |  | — |
Total |  | $ | 10,207 |  |  | $ | 12,170 |  |  | $ | — |
Total impaired loans |  | $ | 12,951 |  |  | $ | 15,726 |  |  | $ | 513 |
Average recorded investment and interest income on a cash basis recognized during the three and six months ended June 30, 2017 and 2016 on impaired loans, segregated by class, were as follows:
|  | Three Months Ended |  |  | Six Months Ended |
June 30, 2017 |  | Average recorded investment |  |  | Interest income recognized (cash basis) |  |  | Average recorded investment |  |  | Interest income recognized (cash basis) |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 729 |  |  | $ | 5 |  |  | $ | 792 |  |  | $ | 10 |
Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 98 |  |  |  | — |  |  |  | 100 |  |  |  | — |
Residential line of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Multi-family mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 616 |  |  |  | 8 |  |  |  | 622 |  |  |  | 20 |
Non-owner occupied |  |  | 514 |  |  |  | 2 |  |  |  | 829 |  |  |  | 2 |
Consumer and other |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |
Total |  | $ | 1,956 |  |  | $ | 15 |  |  | $ | 2,343 |  |  | $ | 32 |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 519 |  |  | $ | 7 |  |  | $ | 557 |  |  | $ | 16 |
Construction |  |  | 302 |  |  |  | 4 |  |  |  | 1,493 |  |  |  | 9 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 2,106 |  |  |  | 15 |  |  |  | 2,232 |  |  |  | 32 |
Residential line of credit |  |  | — |  |  |  | — |  |  |  | 156 |  |  |  | — |
Multi-family mortgage |  |  | 1,008 |  |  |  | 12 |  |  |  | 1,014 |  |  |  | 23 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 1,801 |  |  |  | 23 |  |  |  | 1,941 |  |  |  | 61 |
Non-owner occupied |  |  | 1,602 |  |  |  | 5 |  |  |  | 1,323 |  |  |  | 5 |
Consumer and other |  |  | 25 |  |  |  | — |  |  |  | 25 |  |  |  | 1 |
Total |  | $ | 7,361 |  |  | $ | 66 |  |  | $ | 8,740 |  |  | $ | 147 |
Total impaired loans |  | $ | 9,317 |  |  | $ | 81 |  |  | $ | 11,083 |  |  | $ | 179 |
June 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 848 |  |  | $ | 6 |  |  | $ | 1,051 |  |  | $ | 11 |
Construction |  |  | — |  |  |  | — |  |  |  | 154 |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 481 |  |  |  | 10 |  |  |  | 2,130 |  |  |  | 26 |
Residential line of credit |  |  | 160 |  |  |  | 2 |  |  |  | 160 |  |  |  | 2 |
Multi-family mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 431 |  |  |  | 1 |  |  |  | 1,271 |  |  |  | 1 |
Non-owner occupied |  |  | 1,652 |  |  |  | 2 |  |  |  | 2,878 |  |  |  | 8 |
Consumer and other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 3,571 |  |  | $ | 21 |  |  | $ | 7,644 |  |  | $ | 48 |
With no related allowance recorded |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 578 |  |  | $ | — |  |  | $ | 488 |  |  | $ | 4 |
Construction |  |  | 1,549 |  |  |  | 31 |  |  |  | 2,676 |  |  |  | 62 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  | 2,661 |  |  |  | 38 |  |  |  | 1,746 |  |  |  | 96 |
Residential line of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Multi-family mortgage |  |  | 1,030 |  |  |  | 11 |  |  |  | 1,060 |  |  |  | 12 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 1,799 |  |  |  | 7 |  |  |  | 943 |  |  |  | 43 |
Non-owner occupied |  |  | 1,389 |  |  |  | — |  |  |  | 1,110 |  |  |  | 1 |
Consumer and other |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 9,018 |  |  | $ | 87 |  |  | $ | 8,023 |  |  | $ | 218 |
Total impaired loans |  | $ | 12,589 |  |  | $ | 108 |  |  | $ | 15,667 |  |  | $ | 266 |
As of June 30, 2017 and December 31, 2016, the Company has a recorded investment in troubled debt restructurings of $8,488 and $8,802, respectively. The modifications included extensions of the maturity date and/or a stated rate of interest to one lower than the current market rate. The Company has allocated $189 and $402 of specific reserves for those loans at June 30, 2017 and December 31, 2016, respectively, and has committed to lend additional amounts totaling up to $1 and $1, respectively to these customers. Of these loans, $4,295 and $4,265 were classified as non-accrual loans as of June 30, 2017 and December 31, 2016. The following table presents the financial effect of TDRs recorded during the periods indicated:
Three Months Ended June 30, 2016 |  | Number of loans |  | Pre-modification outstanding recorded investment |  |  | Post-modification outstanding recorded investment |  |  | Charge offs and specific reserves |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 2 |  | $ | 14 |  |  | $ | 14 |  |  | $ | — |
Total |  | 2 |  | $ | 14 |  |  | $ | 14 |  |  | $ | — |
Six Months Ended June 30, 2017 |  | Number of loans |  | Pre-modification outstanding recorded investment |  |  | Post-modification outstanding recorded investment |  |  | Charge offs and specific reserves |
Commercial and industrial |  | 1 |  | $ | 5 |  |  | $ | 5 |  |  | $ | — |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 1 |  |  | 377 |  |  |  | 377 |  |  |  | — |
Non-owner occupied |  | 2 |  |  | 711 |  |  |  | 711 |  |  |  | — |
Total |  | 4 |  | $ | 1,093 |  |  | $ | 1,093 |  |  | $ | — |
Six Months Ended June 30, 2016 |  | 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 |  | 4 |  | $ | 722 |  |  | $ | 722 |  |  | $ | 39 |
Total |  | 4 |  | $ | 722 |  |  | $ | 722 |  |  | $ | 39 |
There were no TDR’s recorded during the three months ended June 30, 2017. Additionally, there were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the six months ended June 30, 2017 or 2016. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. The terms of certain other loans were modified during the six months ended June 30, 2017 and 2016 that did not meet the definition of a troubled debt restructuring. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the company’s internal underwriting policy.

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- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 55 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=32702940&loc=SL6953791-111525 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66008989&loc=d3e4975-111524 + Details
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- References No definition available. + Details
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