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Loans and Asset Quality Information (Tables)
3 Months Ended
Mar. 31, 2017
Loans and Asset Quality Information [Abstract]  
Summary of contractually required payments for Carolina Bank expected at acquisition date

($ in thousands)

 

  Carolina Bank Acquisition
on March 3, 2017
 
Contractually required payments  $27,108 
Nonaccretable difference   (4,237)
Cash flows expected to be collected at acquisition   22,871 
Accretable yield   (3,617)
Fair value of PCI loans at acquisition date  $19,254 
Summary of contractually required payments for Carolina Bank not expected at acquisition date

($ in thousands)

 

  Carolina Bank Acquisition
on March 3, 2017
 
Contractually required payments  $569,980 
Fair value of acquired loans at acquisition date   478,122 
Contractual cash flows not expected to be collected   3,650 
Summary of the major categories of total loans outstanding
($ in thousands)  March 31, 2017   December 31, 2016   March 31, 2016 
   Amount   Percentage   Amount   Percentage   Amount   Percentage 
All  loans (non-covered and covered):                              
                               
Commercial, financial, and agricultural  $363,219    11%   $261,813    9%   $228,867    9% 
Real estate – construction, land development & other land loans   424,539    13%    354,667    13%    302,052    12% 
Real estate – mortgage – residential (1-4 family) first mortgages   792,791    24%    750,679    28%    757,696    30% 
Real estate – mortgage – home equity loans / lines of credit   317,336    10%    239,105    9%    235,380    9% 
Real estate – mortgage – commercial and other   1,335,924    40%    1,049,460    39%    966,937    38% 
Installment loans to individuals   56,250    2%    55,037    2%    47,163    2% 
    Subtotal   3,290,059    100%    2,710,761    100%    2,538,095    100% 
Unamortized net deferred loan costs (fees)   (704)        (49)        1,258      
    Total loans  $3,289,355        $2,710,712        $2,539,353      
Summary of the major categories of non-covered and covered loans outstanding
($ in thousands)  March 31, 2016 
   Non-covered   Covered   Total 
             
Commercial, financial, and agricultural  $228,124    743   $228,867 
Real estate – construction, land development & other land loans   298,410    3,642    302,052 
Real estate – mortgage – residential (1-4 family) first mortgages   684,085    73,611    757,696 
Real estate – mortgage – home equity loans / lines of credit   225,245    10,135    235,380 
Real estate – mortgage – commercial and other   955,550    11,387    966,937 
Installment loans to individuals   47,158    5    47,163 
    Subtotal   2,438,572    99,523    2,538,095 
Unamortized net deferred loan costs   1,258        1,258 
    Total  $2,439,830    99,523   $2,539,353 
Schedule of the carrying amount of the covered loans

 

 

($ in thousands)

  Purchased
Credit
Impaired
Loans –
Carrying
Value
   Purchased
Credit
Impaired
Loans –
Unpaid
Principal
Balance
   Non-impaired
Purchased
Loans –
Carrying
Value
   Non-impaired
Purchased
Loans -
Unpaid
Principal
Balance
   Total
Covered
Loans –
Carrying
Value
   Total
Covered
Loans –
Unpaid
Principal
Balance
 
Covered loans:                              
Commercial, financial, and agricultural  $        743    748    743    748 
Real estate – construction, land development & other land loans   207    332    3,435    3,384    3,642    3,716 
Real estate – mortgage – residential (1-4 family) first mortgages   80    564    73,531    85,962    73,611    86,526 
Real estate – mortgage – home equity loans / lines of credit   7    14    10,128    11,516    10,135    11,530 
Real estate – mortgage – commercial and other   873    1,973    10,514    11,105    11,387    13,078 
Installment loans to individuals           5    35    5    35 
     Total  $1,167    2,883    98,356    112,750    99,523    115,633 
Schedule of activity in covered purchased nonimpaired loans

 

($ in thousands)

 

    
Carrying amount of nonimpaired covered loans at December 31, 2015  $101,252 
Principal repayments   (7,997)
Transfers to foreclosed real estate   (1,036)
Net loan recoveries   1,784 
Accretion of loan discount   1,908 
Transfer to non-covered loans due to expiration of loss-share agreement, April 1, 2016   (17,530)
Transfer to non-covered loans due to termination of loss-share agreements, September 22, 2016   (78,381)
Carrying amount of nonimpaired covered loans at December 31, 2016  $ 

 

Schedule of activity in purchased credit impaired loans

 

 

($ in thousands)

 

 

 

Purchased Credit Impaired Loans

  Accretable
Yield
   Carrying
Amount
 
Balance at December 31, 2015  $    1,970 
Change due to payments received       (1,386)
Change due to loan charge-off       (70)
Balance at December 31, 2016  $    514 
Additions due to acquisition of Carolina Bank   3,617    19,254 
Accretion   (85)   85 
Change due to payments received       (126)
Transfer to foreclosed real estate       (69)
Other       7 
Balance at March 31, 2017  $3,532    19,665 
Summary of nonperforming assets

 

ASSET QUALITY DATA ($ in thousands)

  March 31,
2017
   December 31,
2016
   March 31, 2016 
             
Nonperforming assets               
Nonaccrual loans  $25,684    27,468    41,411 
Restructured loans - accruing   21,559    22,138    30,514 
Accruing loans > 90 days past due            
     Total nonperforming loans   47,243    49,606    71,925 
Foreclosed real estate   12,789    9,532    10,336 
Total nonperforming assets  $60,032    59,138    82,261 
                
Total covered nonperforming assets included above (1)  $        10,698 
Purchased credit impaired loans not included above (2)  $19,167         

 

(1) All FDIC loss share agreements were terminated effective September 22, 2016 and, accordingly, assets previously covered under those agreements become non-covered on that date.

(2) In the March 3, 2017 acquisition of Carolina Bank Holdings, Inc., the Company acquired $19.3 million in purchased credit impaired loans in accordance with ASC 310-30 accounting guidance. These loans are excluded from nonperforming loans, including $1.7 million in purchased credit impaired loans at March 31, 2017 that are contractually past due 90 days or more.

Schedule of nonaccrual loans

($ in thousands)

 

  March 31,
2017
   December 31,
2016
 
Commercial, financial, and agricultural  $1,368    1,842 
Real estate – construction, land development & other land loans   1,607    2,945 
Real estate – mortgage – residential (1-4 family) first mortgages   15,833    16,017 
Real estate – mortgage – home equity loans / lines of credit   2,238    2,355 
Real estate – mortgage – commercial and other   4,577    4,208 
Installment loans to individuals   61    101 
  Total  $25,684    27,468 
           
Schedule of analysis of the payment status of loans

The following table presents an analysis of the payment status of the Company’s loans as of March 31, 2017.

 

($ in thousands)  Accruing
30-59
Days Past
Due
   Accruing
60-89 Days
Past Due
   Accruing
90 Days or
More Past
Due
   Nonaccrual
Loans
   Accruing
Current
   Total Loans
Receivable
 
                         
Commercial, financial, and agricultural  $519    416        1,368    360,633    362,936 
Real estate – construction, land development & other land loans   1,309    166        1,607    421,003    424,085 
Real estate – mortgage – residential (1-4 family) first mortgages   11,794    591        15,833    760,896    789,114 
Real estate – mortgage – home equity loans / lines of credit   586    243        2,238    313,526    316,593 
Real estate – mortgage – commercial and other   3,123    78        4,577    1,313,638    1,321,416 
Installment loans to individuals   192    144        61    55,853    56,250 
Purchased credit impaired   323    62    1,744        17,536    19,665 
  Total  $17,846    1,700    1,744    25,684    3,243,085    3,290,059 
Unamortized net deferred loan fees                            (704)
           Total loans                           $3,289,355 

 

The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2016.

 

($ in thousands)  Accruing
30-59
Days Past
Due
   Accruing
60-89
Days Past
Due
   Accruing
90 Days or
More Past
Due
   Nonaccrual
Loans
   Accruing
Current
   Total Loans
Receivable
 
                         
Commercial, financial, and agricultural  $92            1,842    259,879    261,813 
Real estate – construction, land development & other land loans   473    168        2,945    351,081    354,667 
Real estate – mortgage – residential (1-4 family) first mortgages   4,487    443        16,017    729,732    750,679 
Real estate – mortgage – home equity loans / lines of credit   1,751    178        2,355    234,821    239,105 
Real estate – mortgage – commercial and other   1,482    449        4,208    1,042,807    1,048,946 
Installment loans to individuals   186    193        101    54,557    55,037 
Purchased credit impaired                   514    514 
  Total  $8,471    1,431        27,468    2,673,391    2,710,761 
Unamortized net deferred loan fees                            (49)
           Total loans                           $2,710,712 

 

Schedule of activity in the allowance for loan losses for non-covered and covered loans

The following table presents the activity in the allowance for loan losses for all loans for the three months ended March 31, 2017.

 

 

($ in thousands)

  Commercial,
Financial,
and
Agricultural
   Real Estate

Construction,
Land
Development,
& Other
Land Loans
   Real Estate

Residential
(1-4 Family)
First
Mortgages
   Real Estate
– Mortgage
– Home
Equity
Lines of
Credit
   Real Estate
– Mortgage

Commercial
and Other
   Installment
Loans to
Individuals
   Unallo-
cated
   Total 
                     
As of and for the three months ended March 31, 2017                    
Beginning balance  $3,829    2,691    7,704    2,420    5,098    1,145    894    23,781 
Charge-offs   (390)   (177)   (894)   (231)   (326)   (187)       (2,205)
Recoveries   298    490    196    65    143    55        1,247 
Provisions   55    (240)   370    (116)   1,064    54    (464)   723 
Ending balance  $3,792    2,764    7,376    2,138    5,979    1,067    430    23,546 
                                         
Ending balances as of March 31, 2017:  Allowance for loan losses            
Individually evaluated for impairment  $205    180    1,351    8    310            2,054 
Collectively evaluated for impairment  $3,587    2,584    6,025    2,130    5,669    1,067    430    21,492 
Purchased credit impaired  $                             
                                         
Loans receivable as of March 31, 2017:                     
Ending balance – total  $363,219    424,539    792,791    317,336    1,335,924    56,250        3,290,059 
Unamortized net deferred loan fees                                      (704)
Total loans                                     $3,289,355 
                                         
Ending balances as of March 31, 2017: Loans                     
Individually evaluated for impairment  $504    3,445    18,047    223    9,074    2        31,295 
Collectively evaluated for impairment  $362,433    420,640    771,067    316,370    1,312,341    56,248        3,239,099 
Purchased credit impaired  $282    454    3,677    743    14,509            19,665 

  

The following table presents the activity in the allowance for loan losses for the year ended December 31, 2016. There were no covered loans at December 31, 2016 and all reserves associated with previously covered loans have been transferred to the non-covered allowance.

 

 

($ in thousands)

  Commercial,
Financial,
and
Agricultural
   Real Estate

Construction,
Land
Development,
& Other
Land Loans
   Real Estate

Residential
(1-4 Family)
First
Mortgages
   Real Estate
– Mortgage
– Home
Equity
Lines of
Credit
   Real Estate
– Mortgage

Commercial
and Other
   Installment
Loans to
Individuals
   Unallo-
cated
   Covered   Total 
                         
As of and for the year ended December 31, 2016
Beginning balance  $4,742    3,754    7,832    2,893    5,816    1,051    696    1,799    28,583 
Charge-offs   (2,271)   (1,101)   (3,815)   (969)   (1,005)   (1,008)   (1)    (244)   (10,414)
Recoveries   805    1,422    1,060    250    836    354        1,958    6,685 
Transfer from covered status   56    65    839    293    127        1    (1,381)    
Removed due to branch loan sale   (263)   (39)   (347)   (110)   (228)   (63)          (1,050)
Provisions   760    (1,410)   2,135    63    (448)   811    198    (2,132)   (23)
Ending balance  $3,829    2,691    7,704    2,420    5,098    1,145    894        23,781 
                                              
Ending balances as of December 31, 2016:  Allowance for loan losses
Individually evaluated for impairment  $7    184    1,339    5    105                1,640 
Collectively evaluated for impairment  $3,822    2,507    6,365    2,415    4,993    1,145    894        22,141 
Purchased credit impaired  $                                 
                                              
Loans receivable as of December 31, 2016:
Ending balance – total  $261,813    354,667    750,679    239,105    1,049,460    55,037            2,710,761 
Unamortized net deferred loan fees                                           (49)
Total loans                                          $2,710,712 
                                              
Ending balances as of December 31, 2016: Loans
Individually evaluated for impairment  $644    4,001    20,807    280    6,494                32,226 
Collectively evaluated for impairment  $261,169    350,666    729,872    238,825    1,042,452    55,037            2,678,021 
Purchased credit impaired  $                514                514 

 

The following table presents the activity in the allowance for loan losses for all loans for the three months ended March 31, 2016.

 

 

($ in thousands)

  Commercial,
Financial,
and
Agricultural
   Real Estate

Construction,
Land
Development,
& Other
Land Loans
   Real Estate

Residential
(1-4 Family)
First
Mortgages
   Real Estate
– Mortgage
– Home
Equity
Lines of
Credit
   Real Estate
– Mortgage

Commercial
and Other
   Installment
Loans to
Individuals
   Unallo-
cated
   Covered   Total 
                         
As of and for the three month ended March 31, 2016
Beginning balance  $4,742    3,754    7,832    2,893    5,816    1,051    696    1,799    28,583 
Charge-offs   (677)   (340)   (1,951)   (449)   (166)   (280)       (241)   (4,104)
Recoveries   86    90    233    55    130    113        1,204    1,911 
Provisions   528    (159)   1,260    (232)   160    318    (254)   (1,363)   258 
Ending balance  $4,679    3,345    7,374    2,267    5,940    1,202    442    1,399    26,648 
                                              
Ending balances as of March 31, 2016:  Allowance for loan losses
Individually evaluated for impairment  $43    214    1,280    111    559    75        438    2,720 
Collectively evaluated for impairment  $4,636    3,131    6,094    2,156    5,381    1,127    442    961    23,928 
Purchased credit impaired  $                                 
                                              
Loans receivable as of March 31, 2016:
Ending balance – total  $228,124    298,410    684,085    225,245    955,550    47,158        99,523    2,538,095 
Unamortized net deferred loan costs                                           1,258 
Total loans                                          $2,539,353 
                                              
Ending balances as of March 31, 2016: Loans
Individually evaluated for impairment  $818    4,735    20,925    538    14,334    104        5,105    46,559 
Collectively evaluated for impairment  $227,306    293,675    663,160    224,707    940,652    47,054        93,250    2,489,804 
Purchased credit impaired  $                564            1,168    1,732 
                                              

 

Schedule of impaired loans individually evaluated

The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of March 31, 2017.

 

 

($ in thousands)

  Recorded
Investment
   Unpaid
Principal
Balance
   Related
Allowance
   Average
Recorded
Investment
 
Impaired loans with no related allowance recorded:                    
                     
Commercial, financial, and agricultural  $230    281        412 
Real estate – mortgage – construction, land development & other land loans   2,716    3,903        2,969 
Real estate – mortgage – residential (1-4 family) first mortgages   6,954    7,676        8,495 
Real estate – mortgage –home equity loans / lines of credit   59    83        86 
Real estate – mortgage –commercial and other   3,589    3,845        4,093 
Installment loans to individuals   2    2        1 
Total impaired loans with no allowance  $13,550    15,790        16,056 
                     
                     
Impaired loans with an allowance recorded:                    
                     
Commercial, financial, and agricultural  $274    288    205    163 
Real estate – mortgage – construction, land development & other land loans   729    777    180    754 
Real estate – mortgage – residential (1-4 family) first mortgages   11,093    11,401    1,351    10,933 
Real estate – mortgage –home equity loans / lines of credit   164    164    8    165 
Real estate – mortgage –commercial and other   5,485    5,496    310    3,690 
Installment loans to individuals                
Total impaired loans with allowance  $17,745    18,126    2,054    15,705 

 

The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of December 31, 2016.

 

 

($ in thousands)

  Recorded
Investment
   Unpaid
Principal
Balance
   Related
Allowance
   Average
Recorded
Investment
 
Impaired loans with no related allowance recorded:                    
                     
Commercial, financial, and agricultural  $593    706        816 
Real estate – mortgage – construction, land development & other land loans   3,221    4,558        3,641 
Real estate – mortgage – residential (1-4 family) first mortgages   10,035    12,220        11,008 
Real estate – mortgage –home equity loans / lines of credit   114    146        139 
Real estate – mortgage –commercial and other   5,112    5,722        8,713 
Installment loans to individuals       2        1 
Total impaired loans with no allowance  $19,075    23,354        24,318 
                     
                     
Impaired loans with an allowance recorded:                    
                     
Commercial, financial, and agricultural  $51    51    7    202 
Real estate – mortgage – construction, land development & other land loans   780    798    184    844 
Real estate – mortgage – residential (1-4 family) first mortgages   10,772    11,007    1,339    13,314 
Real estate – mortgage –home equity loans / lines of credit   166    166    5    324 
Real estate – mortgage –commercial and other   1,896    1,929    105    4,912 
Installment loans to individuals               49 
Total impaired loans with allowance  $13,665    13,951    1,640    19,645 

 

Schedule of recorded investment in loans by credit quality indicators

The following table presents the Company’s recorded investment in loans by credit quality indicators as of March 31, 2017.

 

($ in thousands)    
   Pass   Special
Mention Loans
   Classified
Accruing Loans
   Classified
Nonaccrual
Loans
   Total 
                     
Commercial, financial, and agricultural  $350,286    9,366    1,917    1,368    362,937 
Real estate – construction, land development & other land loans   407,155    7,759    7,564    1,607    424,085 
Real estate – mortgage – residential (1-4 family) first mortgages   721,622    15,978    35,681    15,833    789,114 
Real estate – mortgage – home equity loans / lines of credit   304,093    1,413    8,849    2,238    316,593 
Real estate – mortgage – commercial and other   1,281,368    23,748    11,722    4,577    1,321,415 
Installment loans to individuals   55,727    253    209    61    56,250 
Purchased credit impaired   7,337    8,159    4,169        19,665 
  Total  $3,127,588    66,676    70,111    25,684    3,290,059 
Unamortized net deferred loan fees                       (704)
            Total loans                       3,289,355 

 

The following table presents the Company’s recorded investment in loans by credit quality indicators as of December 31, 2016.

 

($ in thousands)    
   Pass   Special
Mention Loans
   Classified
Accruing Loans
   Classified
Nonaccrual
Loans
   Total 
                     
Commercial, financial, and agricultural  $247,451    10,560    1,960    1,842    261,813 
Real estate – construction, land development & other land loans   335,068    8,762    7,892    2,945    354,667 
Real estate – mortgage – residential (1-4 family) first mortgages   678,878    16,998    38,786    16,017    750,679 
Real estate – mortgage – home equity loans / lines of credit   226,159    1,436    9,155    2,355    239,105 
Real estate – mortgage – commercial and other   1,005,687    26,032    13,019    4,208    1,048,946 
Installment loans to individuals   54,421    256    259    101    55,037 
Purchased credit impaired       514            514 
  Total  $2,547,664    64,558    71,071    27,468    2,710,761 
Unamortized net deferred loan fees                       (49)
            Total loans                       2,710,712 

 

Schedule of information related to loans modified in a troubled debt restructuring
($ in thousands)  For three months ended
March 31, 2017
   For the three months ended
March 31, 2016
 
   Number of
Contracts
   Pre-
Modification
Restructured
Balances
   Post-
Modification
Restructured
Balances
   Number of
Contracts
   Pre-
Modification
Restructured
Balances
   Post-
Modification
Restructured
Balances
 
TDRs – Accruing                              
Commercial, financial, and agricultural      $   $       $   $ 
Real estate – construction, land development & other land loans                        
Real estate – mortgage – residential (1-4 family) first mortgages                        
Real estate – mortgage – home equity loans / lines of credit                        
Real estate – mortgage – commercial and other   2    2,550    2,525             
Installment loans to individuals                        
                               
TDRs – Nonaccrual                              
Commercial, financial, and agricultural                        
Real estate – construction, land development & other land loans                        
Real estate – mortgage – residential (1-4 family) first mortgages                        
Real estate – mortgage – home equity loans / lines of credit                        
Real estate – mortgage – commercial and other                        
Installment loans to individuals                        
                               
Total TDRs arising during period   2   $2,550   $2,525       $   $ 
                               
Total covered TDRs arising during period included above      $   $       $   $ 
Schedule of accruing restructured loans that defaulted in the period
($ in thousands)  For the three months ended
March 31, 2017
   For the three months ended
March 31, 2016
 
   Number of
Contracts
   Recorded
Investment
   Number of
Contracts
   Recorded
Investment
 
                 
Accruing TDRs that subsequently defaulted                    
Commercial, financial, and agricultural      $    1   $44 
Real estate – mortgage – residential (1-4 family first mortgages)   1    626         
Real estate – mortgage – commercial and other           1    21 
                      
Total accruing TDRs that subsequently defaulted   1   $626    2   $65 
Total covered accruing TDRs that subsequently defaulted included above      $    1   $44