Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2017

The following is a rollforward of the Bank’s allowance for loan losses for the years ended December 31:

(dollars in thousands)	Beginning Balance		Provision for Loan Losses			Charge-offs			Recoveries		Ending Balance
2017:
Real estate loans:
Residential properties	$	6,669	$	3,046		$	—		$	—	$	9,715
Commercial properties		2,983		1,416			—			—		4,399
Land and construction		233		162			—			—		395
Commercial and industrial loans		5,227		(1,841	)		—			238		3,624
Consumer loans		288		(21	)		—			—		267
Total	$	15,400	$	2,762		$	—		$	238	$	18,400
2016:
Real estate loans:
Residential properties	$	6,799	$	(130	)	$	—		$	—	$	6,669
Commercial properties		1,813		1,051			(50	)		169		2,983
Land and construction		103		130			—			—		233
Commercial and industrial loans		1,649		3,578			—			—		5,227
Consumer loans		236		52			—			—		288
Total	$	10,600	$	4,681		$	(50	)	$	169	$	15,400
2015:
Real estate loans:
Residential properties	$	6,546	$	253		$	—		$	—	$	6,799
Commercial properties		1,499		624			(310	)		—		1,813
Land and construction		67		36			—			—		103
Commercial and industrial loans		1,897		1,665			(1,913	)		—		1,649
Consumer loans		141		95			—			—		236
Total	$	10,150	$	2,673		$	(2,223	)	$	—	$	10,600

Balance in Allowance for Loan Losses and Recorded Investment in Loans by Impairment

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by impairment method as of December 31:

(dollars in thousands)	Allowance for Loan Losses									Unaccreted Credit Component Other Loans
	Evaluated for Impairment					Purchased Impaired		Total
	Individually		Collectively			Purchased Impaired		Total
2017:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	9,715		$	—	$	9,715	$	248
Commercial properties		—		4,399			—		4,399		1,449
Land		—		395			—		395		4
Commercial and industrial loans		909		2,715			—		3,624		1,204
Consumer loans		—		267			—		267		100
Total	$	909	$	17,491		$	—	$	18,400	$	3,005
Loans:
Real estate loans:
Residential properties	$	—	$	2,581,245		$	—	$	2,581,245	$	26,605
Commercial properties		4,037		691,632			1,079		696,748		168,057
Land		—		(837	)		837		37,160		167
Commercial and industrial loans		9,399		299,539			1,841		310,779		62,849
Consumer loans		—		29,330			—		29,330		2,899
Total	$	13,436	$	3,600,909		$	3,757	$	3,655,262	$	260,577
2016:
Allowance for loan losses:
Real estate loans:
Residential properties	$	—	$	6,669		$	—	$	6,669	$	128
Commercial properties		—		2,983			—		2,983		136
Land		—		233			—		233		2
Commercial and industrial loans		—		5,227			—		5,227		147
Consumer loans		—		288			—		288		19
Total	$	—	$	15,400		$	—	$	15,400	$	432
Loans:
Real estate loans:
Residential properties	$	6,093	$	1,774,796		$	—	$	1,780,889	$	12,373
Commercial properties		2,148		474,634			177		476,959		24,796
Land		—		24,100			—		24,100		437
Commercial and industrial loans		753		233,992			3,196		237,941		20,165
Consumer loans		—		32,127			—		32,127		1,266
Total	$	8,994	$	2,539,649		$	3,373	$	2,552,016	$	59,037

Risk Category of Loans by Class of Loans

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows as of December 31:

(dollars in thousands)	Pass		Special Mention		Substandard		Impaired		Total
2017:
Real estate loans:
Residential properties	$	2,578,773	$	192	$	2,280	$	—	$	2,581,245
Commercial properties		680,449		6,326		5,936		4,037		696,748
Land		36,321		—		839		—		37,160
Commercial and industrial loans		298,408		865		2,107		9,399		310,779
Consumer loans		29,330		—		—		—		29,330
Total	$	3,623,281	$	7,383	$	11,162	$	13,436	$	3,655,262
2016:
Real estate loans:
Residential properties	$	1,773,296	$	1,500	$	—	$	6,093	$	1,780,889
Commercial properties		470,484		1,913		2,414		2,148		476,959
Land		24,100		—		—		—		24,100
Commercial and industrial loans		219,676		3,625		13,887		753		237,941
Consumer loans		32,127		—		—		—		32,127
Total	$	2,519,683	$	7,038	$	16,301	$	8,994	$	2,552,016

Individual Evaluation of Impaired Loans and Related Allowance

Impaired loans evaluated individually and any related allowance is as follows as of December 31:

	With No Allowance Recorded				With an Allowance Recorded
(dollars in thousands)	Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance
2017:
Real estate loans:
Residential properties	$	—	$	—	$	—	$	—	$	—
Commercial properties		4,037		4,037		—		—		—
Commercial and industrial loans		250		250		9,149		9,149		909
Consumer loans		—		—		—		—		—
Total	$	4,287	$	4,287	$	9,149	$	9,149	$	909
2016:
Real estate loans:
Residential properties	$	6,093	$	6,093	$	—	$	—	$	—
Commercial properties		2,148		2,148		—		—		—
Commercial and industrial loans		753		753		—		—		—
Consumer loans		—		—		—		—		—
Total	$	8,994	$	8,994	$	—	$	—	$	—

Weighted Average Annualized Balance of Recorded Investment and Interest Income on Impaired Loans

The weighted average annualized average balance of the recorded investment for impaired loans, beginning from when the loan became impaired, and any interest income recorded on impaired loans after they became impaired is as follows for the years ending December 31:

	2017				2016				2015
(dollars in thousands)	Average Recorded Investment		Interest Income after Impairment		Average Recorded Investment		Interest Income after Impairment		Average Recorded Investment		Interest Income after Impairment
Real estate loans:
Residential properties	$	1,323	$	20	$	1,970	$	14	$	27	$	2
Commercial properties		2,403		50		2,252		17		6,487		281
Commercial and industrial loans		5,503		5		1,673		20		7,850		394
Consumer loans		—		—		4		—		105		—
Total	$	9,229	$	75	$	5,899	$	51	$	14,469	$	677