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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 12 Months Ended
Dec. 31, 2016
Receivables [Abstract]  
Summary of Loan Portfolio, Excluding Residential Loans Held for Sale
The loan portfolio, excluding residential loans held for sale, broken out by classes at December 31 was as follows:
 
(Dollars in thousands)
2016
 
2015
Commercial real estate:
 
 
 
Owner-occupied
$
112,295

 
$
103,578

Non-owner occupied
206,358

 
145,401

Multi-family
47,681

 
35,109

Non-owner occupied residential
62,533

 
54,175

Acquisition and development:
 
 
 
1-4 family residential construction
4,663

 
9,364

Commercial and land development
26,085

 
41,339

Commercial and industrial
88,465

 
73,625

Municipal
53,741

 
57,511

Residential mortgage:
 
 
 
First lien
139,851

 
126,022

Home equity – term
14,248

 
17,337

Home equity – lines of credit
120,353

 
110,731

Installment and other loans
7,118

 
7,521

 
$
883,391

 
$
781,713
Summary of Ratings Based On Internal Risk Rating System
The following summarizes the Company’s ratings based on its internal risk rating system at December 31, 2016 and 2015:
 
(Dollars in thousands)
Pass
 
Special
Mention
 
Non-Impaired
Substandard
 
Impaired -
Substandard
 
Doubtful
 
Total
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
$
103,652

 
$
5,422

 
$
2,151

 
$
1,070

 
$
0

 
$
112,295

Non-owner occupied
190,726

 
4,791

 
10,105

 
736

 
0

 
206,358

Multi-family
42,473

 
4,222

 
787

 
199

 
0

 
47,681

Non-owner occupied residential
59,982

 
949

 
1,150

 
452

 
0

 
62,533

Acquisition and development:
 
 
 
 
 
 
 
 
 
 
 
1-4 family residential construction
4,560

 
103

 
0

 
0

 
0

 
4,663

Commercial and land development
25,435

 
10

 
639

 
1

 
0

 
26,085

Commercial and industrial
87,588

 
251

 
32

 
594

 
0

 
88,465

Municipal
53,741

 
0

 
0

 
0

 
0

 
53,741

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
First lien
135,558

 
0

 
0

 
4,293

 
0

 
139,851

Home equity – term
14,155

 
0

 
0

 
93

 
0

 
14,248

Home equity – lines of credit
119,681

 
82

 
61

 
529

 
0

 
120,353

Installment and other loans
7,112

 
0

 
0

 
6

 
0

 
7,118

 
$
844,663

 
$
15,830

 
$
14,925

 
$
7,973

 
$
0

 
$
883,391

December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
$
96,715

 
$
1,124

 
$
3,630

 
$
2,109

 
$
0

 
$
103,578

Non-owner occupied
125,043

 
12,394

 
108

 
7,856

 
0

 
145,401

Multi-family
31,957

 
1,779

 
1,140

 
233

 
0

 
35,109

Non-owner occupied residential
50,601

 
1,305

 
1,374

 
895

 
0

 
54,175

Acquisition and development:
 
 
 
 
 
 
 
 
 
 
 
1-4 family residential construction
9,364

 
0

 
0

 
0

 
0

 
9,364

Commercial and land development
40,181

 
219

 
934

 
5

 
0

 
41,339

Commercial and industrial
70,967

 
1,380

 
544

 
734

 
0

 
73,625

Municipal
57,511

 
0

 
0

 
0

 
0

 
57,511

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
First lien
121,214

 
0

 
0

 
4,808

 
0

 
126,022

Home equity – term
17,234

 
0

 
0

 
103

 
0

 
17,337

Home equity – lines of credit
109,731

 
230

 
180

 
590

 
0

 
110,731

Installment and other loans
7,504

 
0

 
0

 
17

 
0

 
7,521

 
$
738,022

 
$
18,431

 
$
7,910

 
$
17,350

 
$
0

 
$
781,713
Summary of Impaired Loans by Class
The following table summarizes impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at December 31, 2016 and 2015. The recorded investment in loans excludes accrued interest receivable due to insignificance. Allowances established generally pertain to those loans in which loan forbearance agreements were in the process of being negotiated or updated appraisals were pending, and the partial charge-off will be recorded when final information is received.
 
 
Impaired Loans with a Specific Allowance
 
Impaired Loans with No Specific Allowance
(Dollars in thousands)
Recorded
Investment
(Book Balance)
 
Unpaid
Principal Balance
(Legal Balance)
 
Related
Allowance
 
Recorded
Investment
(Book Balance)
 
Unpaid
Principal Balance
(Legal Balance)
December 31, 2016
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
Owner-occupied
$
0

 
$
0

 
$
0

 
$
1,070

 
$
2,236

Non-owner occupied
0

 
0

 
0

 
736

 
1,323

Multi-family
0

 
0

 
0

 
199

 
368

Non-owner occupied residential
0

 
0

 
0

 
452

 
706

Acquisition and development:
 
 
 
 
 
 
 
 
 
Commercial and land development
0

 
0

 
0

 
1

 
16

Commercial and industrial
0

 
0

 
0

 
594

 
715

Residential mortgage:
 
 
 
 
 
 
 
 
 
First lien
643

 
643

 
43

 
3,650

 
4,399

Home equity—term
0

 
0

 
0

 
93

 
103

Home equity—lines of credit
0

 
0

 
0

 
529

 
659

Installment and other loans
0

 
0

 
0

 
6

 
34

 
$
643

 
$
643

 
$
43

 
$
7,330

 
$
10,559

December 31, 2015
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
Owner-occupied
$
0

 
$
0

 
$
0

 
$
2,109

 
$
3,344

Non-owner occupied
0

 
0

 
0

 
7,856

 
8,600

Multi-family
0

 
0

 
0

 
233

 
385

Non-owner occupied residential
0

 
0

 
0

 
895

 
1,211

Acquisition and development:
 
 
 
 
 
 
 
 
 
Commercial and land development
0

 
0

 
0

 
5

 
19

Commercial and industrial
0

 
0

 
0

 
734

 
780

Residential mortgage:
 
 
 
 
 
 
 
 
 
First lien
1,952

 
1,984

 
271

 
2,856

 
3,369

Home equity—term
0

 
0

 
0

 
103

 
110

Home equity—lines of credit
22

 
23

 
10

 
568

 
688

Installment and other loans
8

 
9

 
8

 
9

 
35

 
$
1,982

 
$
2,016

 
$
289

 
$
15,368

 
$
18,541
Summary of Average Recorded Investment in Impaired Loans and Related Interest Income
The following table summarizes the average recorded investment in impaired loans and related interest income recognized on loans deemed impaired for the years ended December 31, 2016, 2015 and 2014:
 
 
2016
 
2015
 
2014
(Dollars in thousands)
Average
Impaired
Balance
 
Interest
Income
Recognized
 
Average
Impaired
Balance
 
Interest
Income
Recognized
 
Average
Impaired
Balance
 
Interest
Income
Recognized
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
$
1,758

 
$
0

 
$
2,613

 
$
0

 
$
3,740

 
$
20

Non-owner occupied
6,831

 
0

 
3,470

 
0

 
6,711

 
143

Multi-family
216

 
0

 
402

 
0

 
274

 
2

Non-owner occupied residential
645

 
0

 
1,020

 
0

 
2,095

 
13

Acquisition and development:
 
 
 
 
 
 
 
 
 
 
 
Commercial and land development
3

 
0

 
266

 
137

 
1,250

 
34

Commercial and industrial
575

 
0

 
1,208

 
0

 
1,700

 
5

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
First lien
4,525

 
33

 
4,644

 
37

 
4,226

 
53

Home equity – term
98

 
0

 
130

 
0

 
85

 
0

Home equity – lines of credit
455

 
0

 
571

 
0

 
111

 
3

Installment and other loans
12

 
0

 
22

 
0

 
9

 
1

 
$
15,118

 
$
33

 
$
14,346

 
$
174

 
$
20,201

 
$
274
Schedule of Impaired Loans That Are TDRs
The following table presents impaired loans that are TDRs, with the recorded investment at December 31, 2016 and December 31, 2015.
 
 
2016
 
2015
(Dollars in thousands)
Number of
Contracts
 
Recorded
Investment
 
Number of
Contracts
 
Recorded
Investment
Accruing:
 
 
 
 
 
 
 
Residential mortgage:
 
 
 
 
 
 
 
First lien
8

 
$
896

 
8

 
$
793

Home equity - lines of credit
1

 
34

 
0

 
0

 
9

 
930

 
8

 
793

Nonaccruing:
 
 
 
 
 
 
 
Residential mortgage:
 
 
 
 
 
 
 
First lien
12

 
1,035

 
12

 
1,153

Installment and other loans
1

 
6

 
1

 
10

 
13

 
1,041

 
13

 
1,163

 
22

 
$
1,971

 
21

 
$
1,956
Schedule of Restructured Loans Modified as TDRs
The following table presents restructured loans, included in nonaccrual status, that were modified as TDRs within the previous 12 months and for which there was a payment default subsequent to the modification for the years ended December 31, 2016, 2015, and 2014.
 
 
2016
 
2015
 
2014
(Dollars in thousands)
Number of
Contracts
 
Recorded
Investment
 
Number of
Contracts
 
Recorded
Investment
 
Number of
Contracts
 
Recorded
Investment
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Non-owner occupied
0

 
$
0

 
0

 
$
0

 
1

 
$
3,495

Acquisition and development:
 
 
 
 
 
 
 
 
 
 
 
Commercial and land development
0

 
0

 
0

 
0

 
1

 
544

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
First lien
0

 
0

 
0

 
0

 
2

 
177

 
0

 
$
0

 
0

 
$
0

 
4

 
$
4,216
Schedule of Number of Loans Modified
The following table presents the number of loans modified, and their pre-modification and post-modification investment balances for the years ended December 31, 2016, 2015, and 2014:
 
(Dollars in thousands)
Number of
Contracts
 
Pre-
Modification
Investment
Balance
 
Post-
Modification
Investment
Balance
December 31, 2016
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
Non-owner occupied
1

 
$
6,095

 
$
6,095

Residential mortgage:
 
 
 
 
 
First lien
2

 
265

 
265

Home equity - lines of credit
1

 
34

 
34

 
4

 
$
6,394

 
$
6,394

December 31, 2015
 
 
 
 
 
Residential mortgage:
 
 
 
 
 
First lien
1

 
$
59

 
$
59

 
1

 
$
59

 
$
59

December 31, 2014
 
 
 
 
 
Residential mortgage:
 
 
 
 
 
First lien
19

 
$
1,876

 
$
1,810

Installment and other loans
1

 
36

 
14

 
20

 
$
1,912

 
$
1,824
Schedule of Classes of Loan Portfolio Summarized by Aging Categories
The following table presents the classes of loan portfolio summarized by aging categories of performing loans and nonaccrual loans at December 31, 2016 and 2015:
 
 
 
 
Days Past Due
 
 
 
 
 
 
Current
 
30-59
 
60-89
 
90+
(still accruing)
 
Total
Past Due
 
Non-
Accrual
 
Total
Loans
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
$
111,225

 
$
0

 
$
0

 
$
0

 
$
0

 
$
1,070

 
$
112,295

Non-owner occupied
205,622

 
0

 
0

 
0

 
0

 
736

 
206,358

Multi-family
47,482

 
0

 
0

 
0

 
0

 
199

 
47,681

Non-owner occupied residential
62,081

 
0

 
0

 
0

 
0

 
452

 
62,533

Acquisition and development:
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 family residential construction
4,548

 
115

 
0

 
0

 
115

 
0

 
4,663

Commercial and land development
26,084

 
0

 
0

 
0

 
0

 
1

 
26,085

Commercial and industrial
87,871

 
0

 
0

 
0

 
0

 
594

 
88,465

Municipal
53,741

 
0

 
0

 
0

 
0

 
0

 
53,741

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
First lien
135,499

 
628

 
328

 
0

 
956

 
3,396

 
139,851

Home equity – term
14,155

 
0

 
0

 
0

 
0

 
93

 
14,248

Home equity – lines of credit
119,733

 
125

 
0

 
0

 
125

 
495

 
120,353

Installment and other loans
7,090

 
20

 
2

 
0

 
22

 
6

 
7,118

 
$
875,131

 
$
888

 
$
330

 
$
0

 
$
1,218

 
$
7,042

 
$
883,391

December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner-occupied
$
101,395

 
$
74

 
$
0

 
$
0

 
$
74

 
$
2,109

 
$
103,578

Non-owner occupied
137,545

 
0

 
0

 
0

 
0

 
7,856

 
145,401

Multi-family
34,876

 
0

 
0

 
0

 
0

 
233

 
35,109

Non-owner occupied residential
53,280

 
0

 
0

 
0

 
0

 
895

 
54,175

Acquisition and development:
 
 
 
 
 
 
 
 
 
 
 
 
 
1-4 family residential construction
9,364

 
0

 
0

 
0

 
0

 
0

 
9,364

Commercial and land development
41,236

 
0

 
98

 
0

 
98

 
5

 
41,339

Commercial and industrial
72,846

 
24

 
21

 
0

 
45

 
734

 
73,625

Municipal
57,511

 
0

 
0

 
0

 
0

 
0

 
57,511

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
First lien
120,119

 
1,844

 
44

 
0

 
1,888

 
4,015

 
126,022

Home equity – term
17,200

 
34

 
0

 
0

 
34

 
103

 
17,337

Home equity – lines of credit
109,740

 
286

 
91

 
24

 
401

 
590

 
110,731

Installment and other loans
7,488

 
16

 
0

 
0

 
16

 
17

 
7,521

 
$
762,600

 
$
2,278

 
$
254

 
$
24

 
$
2,556

 
$
16,557

 
$
781,713
Schedule of Activity in Allowance for Loan Losses
Activity in the allowance for loan losses for the years ended December 31, 2016, 2015 and 2014 was as follows:
 
 
Commercial
 
Consumer
 
 
 
 
(Dollars in thousands)
Commercial
Real Estate
 
Acquisition
and
Development
 
Commercial
and
Industrial
 
Municipal
 
Total
 
Residential
Mortgage
 
Installment
and Other
 
Total
 
Unallocated
 
Total
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
7,883

 
$
850

 
$
1,012

 
$
58

 
$
9,803

 
$
2,870

 
$
121

 
$
2,991

 
$
774

 
$
13,568

Provision for loan losses
107

 
(270
)
 
129

 
(4
)
 
(38
)
 
532

 
116

 
648

 
(360
)
 
250

Charge-offs
(872
)
 
0

 
(79
)
 
0

 
(951
)
 
(577
)
 
(194
)
 
(771
)
 
0

 
(1,722
)
Recoveries
412

 
0

 
12

 
0

 
424

 
154

 
101

 
255

 
0

 
679

Balance, end of year
$
7,530

 
$
580

 
$
1,074

 
$
54

 
$
9,238

 
$
2,979

 
$
144

 
$
3,123

 
$
414

 
$
12,775

December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
9,462

 
$
697

 
$
806

 
$
183

 
$
11,148

 
$
2,262

 
$
119

 
$
2,381

 
$
1,218

 
$
14,747

Provision for loan losses
(1,020
)
 
(440
)
 
249

 
(125
)
 
(1,336
)
 
1,122

 
55

 
1,177

 
(444
)
 
(603
)
Charge-offs
(711
)
 
(22
)
 
(115
)
 
0

 
(848
)
 
(592
)
 
(62
)
 
(654
)
 
0

 
(1,502
)
Recoveries
152

 
615

 
72

 
0

 
839

 
78

 
9

 
87

 
0

 
926

Balance, end of year
$
7,883

 
$
850

 
$
1,012

 
$
58

 
$
9,803

 
$
2,870

 
$
121

 
$
2,991

 
$
774

 
$
13,568

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of year
$
13,215

 
$
670

 
$
864

 
$
244

 
$
14,993

 
$
3,780

 
$
124

 
$
3,904

 
$
2,068

 
$
20,965

Provision for loan losses
(1,674
)
 
92

 
(554
)
 
(61
)
 
(2,197
)
 
(960
)
 
107

 
(853
)
 
(850
)
 
(3,900
)
Charge-offs
(2,637
)
 
(70
)
 
(270
)
 
0

 
(2,977
)
 
(587
)
 
(177
)
 
(764
)
 
0

 
(3,741
)
Recoveries
558

 
5

 
766

 
0

 
1,329

 
29

 
65

 
94

 
0

 
1,423

Balance, end of year
$
9,462

 
$
697

 
$
806

 
$
183

 
$
11,148

 
$
2,262

 
$
119

 
$
2,381

 
$
1,218

 
$
14,747
Summary of Ending Loan Balance Individually Evaluated for Impairment
The following table summarizes the ending loan balance individually evaluated for impairment based upon loan segment, as well as the related allowance for loan loss allocation for each at December 31, 2016 and 2015:
 
 
Commercial
 
Consumer
 
 
 
 
(Dollars in thousands)
Commercial
Real Estate
 
Acquisition
and
Development
 
Commercial
and
Industrial
 
Municipal
 
Total
 
Residential
Mortgage
 
Installment
and Other
 
Total
 
Unallocated
 
Total
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans allocated by:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
2,457

 
$
1

 
$
594

 
$
0

 
$
3,052

 
$
4,915

 
$
6

 
$
4,921

 
$
0

 
$
7,973

Collectively evaluated for impairment
426,410

 
30,747

 
87,871

 
53,741

 
598,769

 
269,537

 
7,112

 
276,649

 
0

 
875,418

 
$
428,867

 
$
30,748

 
$
88,465

 
$
53,741

 
$
601,821

 
$
274,452

 
$
7,118

 
$
281,570

 
$
0

 
$
883,391

Allowance for loan losses allocated by:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
0

 
$
0

 
$
0

 
$
0

 
$
43

 
$
0

 
$
43

 
$
0

 
$
43

Collectively evaluated for impairment
7,530

 
580

 
1,074

 
54

 
9,238

 
2,936

 
144

 
3,080

 
414

 
12,732

 
$
7,530

 
$
580

 
$
1,074

 
$
54

 
$
9,238

 
$
2,979

 
$
144

 
$
3,123

 
$
414

 
$
12,775

December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans allocated by:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
11,093

 
$
5

 
$
734

 
$
0

 
$
11,832

 
$
5,501

 
$
17

 
$
5,518

 
$
0

 
$
17,350

Collectively evaluated for impairment
327,170

 
50,698

 
72,891

 
57,511

 
508,270

 
248,589

 
7,504

 
256,093

 
0

 
764,363

 
$
338,263

 
$
50,703

 
$
73,625

 
$
57,511

 
$
520,102

 
$
254,090

 
$
7,521

 
$
261,611

 
$
0

 
$
781,713

Allowance for loan losses allocated by:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
0

 
$
0

 
$
0

 
$
0

 
$
281

 
$
8

 
$
289

 
$
0

 
$
289

Collectively evaluated for impairment
7,883

 
850

 
1,012

 
58

 
9,803

 
2,589

 
113

 
2,702

 
774

 
13,279

 
$
7,883

 
$
850

 
$
1,012

 
$
58

 
$
9,803

 
$
2,870

 
$
121

 
$
2,991

 
$
774

 
$
13,568