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Loans and Allowance for Loan Losses - (Tables)

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Past Due Financing Receivables

The following table shows outstanding loans by class and payment aging as of June 30, 2020 and December 31, 2019.

Loan Aging Analysis by Class
(in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor-owned			Construction			Home equity			Other residential			Installment and other consumer			Total
June 30, 2020
30-59 days past due			$	—		$	—		$	—		$	—		$	169		$	—		$	—		$	169
60-89 days past due			10			—			—			—			—			—			2			12
90 days or more past due			—			—			—			—			69			—			—			69
Total past due			10			—			—			—			238			—			2			250
Current			525,107			296,163			946,389			66,368			112,673			136,859			26,392			2,109,951
Total loans 1			$	525,117		$	296,163		$	946,389		$	66,368		$	112,911		$	136,859		$	26,394		$	2,110,201
Non-accrual loans 2			$	—		$	—		$	907		$	—		$	625		$	—		$	55		$	1,587
December 31, 2019
30-59 days past due			$	1		$	—		$	1,001		$	—		$	279		$	—		$	7		$	1,288
60-89 days past due			—			—			—			—			98			—			95			193
90 days or more past due			—			—			—			—			167			—			—			167
Total past due			1			—			1,001			—			544			—			102			1,648
Current			246,686			308,824			945,316			61,095			115,480			136,657			27,580			1,841,638
Total loans 1			$	246,687		$	308,824		$	946,317		$	61,095		$	116,024		$	136,657		$	27,682		$	1,843,286
Non-accrual loans 2			$	—		$	—		$	—		$	—		$	168		$	—		$	58		$	226

¹ Amounts include net deferred loan origination (fees) costs of $(6.8) million (including $8.1 million in deferred SBA PPP loan fees, net of costs) and $983 thousand at June 30, 2020 and December 31, 2019, respectively. Amounts are also net of unaccreted purchase discounts on non-PCI loans of $925 thousand at June 30, 2020 and $983 thousand at December 31, 2019.

² There were no accruing loans past due more than ninety days at June 30, 2020 or December 31, 2019.

Financing Receivable Credit Quality Indicators

The following table represents an analysis of the carrying amount in loans, net of deferred fees and costs and purchase premiums or discounts, by internally assigned risk grades, at June 30, 2020 and December 31, 2019.

Credit Risk Profile by Internally Assigned Risk Grade
(in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor-owned			Construction			Home equity			Other residential			Installment and other consumer						Total
June 30, 2020
Pass			$	491,861		$	252,321		$	939,323		$	66,368		$	111,266		$	136,859		$	26,249					$	2,024,247
Special Mention			33,042			34,470			4,047			—			850			—			—						72,409
Substandard			214			9,372			3,019			—			795			—			145						13,545
Total loans			$	525,117		$	296,163		$	946,389		$	66,368		$	112,911		$	136,859		$	26,394					$	2,110,201
December 31, 2019
Pass			$	209,213		$	264,766		$	945,757		$	61,095		$	114,935		$	136,657		$	27,538					$	1,759,961
Special Mention			37,065			35,016			560			—			750			—			—						73,391
Substandard			409			9,042			—			—			339			—			144						9,934
Total loans			$	246,687		$	308,824		$	946,317		$	61,095		$	116,024		$	136,657		$	27,682					$	1,843,286

Troubled Debt Restructurings on Financing Receivables

The following table summarizes the carrying amount of TDR loans by loan class as of June 30, 2020 and December 31, 2019.

(in thousands)
Recorded Investment in Troubled Debt Restructurings 1			June 30, 2020			December 31, 2019
Commercial and industrial			$	578		$	1,223
Commercial real estate, owner-occupied			7,002			6,998
Commercial real estate, investor-owned			1,757			1,770
Home equity			527			251
Other residential			—			452
Installment and other consumer			780			639
Total			$	10,644		$	11,333

¹There was one acquired home equity TDR loan with a recorded investment of $276 thousand as of June 30, 2020. There were no acquired TDR loans as of December 31, 2019. TDR loans on non-accrual status totaled $331 thousand and $58 thousand at June 30, 2020 and December 31, 2019, respectively.

The following table presents information for loans modified in a TDR during the presented periods, including the number of modified contracts, the recorded investment in the loans prior to modification, and the recorded investment in the loans at period end after being restructured. The table excludes fully charged-off TDR loans and loans modified in a TDR and subsequently paid-off during the years presented, if applicable.

(dollars in thousands)			Number of Contracts Modified			Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment at Period End
TDRs during the three months ended June 30, 2020:
Home equity			1			$	276		$	276		$	276
Installment and other consumer			1			108			108			108
			2			$	384		$	384		$	384
TDRs during the three months ended June 30, 2019:
Commercial and industrial			1			$	298		$	298		$	298
TDRs during the six months ended June 30, 2020:
Commercial and industrial			1			$	170		$	162		$	144
Home equity			1			276			276			276
Installment and other consumer			3			211			211			210
			5			$	657		$	649		$	630
TDRs during the six months ended June 30, 2019:
Commercial and industrial			1			$	298		$	298		$	298

Impaired Financing Receivables

The following tables summarize information by class on impaired loans and their related allowances. Total impaired loans include non-accrual loans and accruing TDR loans.

(in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor-owned			Construction			Home equity			Other residential			Installment and other consumer			Total
June 30, 2020
Recorded investment in impaired loans:
With no specific allowance recorded			$	309		$	—		$	906		$	—		$	625		$	—		$	92		$	1,932
With a specific allowance recorded			269			7,002			1,758			—			251			—			688			9,968
Total recorded investment in impaired loans			$	578		$	7,002		$	2,664		$	—		$	876		$	—		$	780		$	11,900
Unpaid principal balance of impaired loans			$	569		$	6,993		$	2,655		$	—		$	893		$	—		$	778		$	11,888
Specific allowance			10			192			64			—			4			—			164			434
Average recorded investment in impaired loans during the quarter ended June 30, 2020			777			6,999			2,681			—			880			225			755			12,317
Interest income recognized on impaired loans during the quarter ended June 30, 20201			7			67			19			—			3			—			7			103
Average recorded investment in impaired loans during the six months ended June 30, 2020			926			6,999			2,377			—			726			300			717			12,045
Interest income recognized on impaired loans during the six months ended June 30, 20201			21			133			39			—			7			4			14			218
Average recorded investment in impaired loans during the quarter ended June 30, 2019			1,498			7,000			1,804			1,590			503			458			670			13,523
Interest income recognized on impaired loans during the quarter ended June 30, 20191			19			66			20			13			29			5			6			158
Average recorded investment in impaired loans during the six months ended June 30, 2019			1,607			6,998			1,809			1,956			523			460			675			14,028
Interest income recognized on impaired loans during the six months ended June 30, 20191			41			132			39			56			33			9			13			323

¹ No interest income was recognized on a cash basis during the three and six months ended June 30, 2020. Interest income recognized on a cash basis during the three and six months ended June 30, 2019 totaled $24 thousand related to the pay-off of a non-accrual home equity loan.

(in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor-owned			Construction			Home equity			Other residential			Installment and other consumer			Total
December 31, 2019
Recorded investment in impaired loans:
With no specific allowance recorded			$	349		$	—		$	—		$	—		$	167		$	452		$	98		$	1,066
With a specific allowance recorded			874			6,998			1,770			—			251			—			541			10,434
Total recorded investment in impaired loans			$	1,223		$	6,998		$	1,770		$	—		$	418		$	452		$	639		$	11,500
Unpaid principal balance of impaired loans			$	1,209		$	6,992		$	1,764		$	—		$	417		$	451		$	638		$	11,471
Specific allowance			$	103		$	195		$	41		$	—		$	5		$	—		$	53		$	397

Allowance for Credit Losses on Financing Receivables

The following tables disclose activity in the allowance for loan losses ("ALLL") and the recorded investment in loans by class, as well as the related ALLL disaggregated by impairment evaluation method.

Allowance for Loan Losses Rollforward for the Period
(in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor-owned			Construction			Home equity			Other residential			Installment and other consumer			Unallocated			Total
Three months ended June 30, 2020
Beginning balance			$	2,784		$	2,797		$	9,225		$	727		$	982		$	1,098		$	363		$	908		$	18,884
Provision (reversal)			(159)			113			1,178			109			62			168			63			466			2,000
Charge-offs			(20)			—			—			—			—			—			—			—			(20)
Recoveries			4			—			—			—			—			—			—			—			4
Ending balance			$	2,609		$	2,910		$	10,403		$	836		$	1,044		$	1,266		$	426		$	1,374		$	20,868
Three months ended June 30, 2019
Beginning balance			$	2,612		$	2,358		$	7,766		$	704		$	923		$	800		$	340		$	314		$	15,817
Provision (reversal)			(250)			(37)			(57)			(85)			(16)			49			(17)			413			—
Charge-offs			—			—			—			—			—			—			—			—			—
Recoveries			6			—			12			—			—			—			—			—			18
Ending balance			$	2,368		$	2,321		$	7,721		$	619		$	907		$	849		$	323		$	727		$	15,835

Allowance for Loan Losses Rollforward for the Period
(in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor			Construction			Home equity			Other residential			Installment and other consumer			Unallocated			Total
Six months ended June 30, 2020
Beginning balance			$	2,334		$	2,462		$	8,483		$	638		$	850		$	973		$	284		$	653		$	16,677
Provision (reversal)			287			448			1,920			195			194			293			142			721			4,200
Charge-offs			(20)			—			—			—			—			—			—			—			(20)
Recoveries			8			—			—			3			—			—			—			—			11
Ending balance			$	2,609		$	2,910		$	10,403		$	836		$	1,044		$	1,266		$	426		$	1,374		$	20,868
Six months ended June 30, 2019
Beginning balance			$	2,436		$	2,407		$	7,703		$	756		$	915		$	800		$	310		$	494		$	15,821
Provision (reversal)			(70)			(86)			6			(137)			(8)			49			13			233			—
Charge-offs			(9)			—			—			—			—			—			—			—			(9)
Recoveries			11			—			12			—			—			—			—			—			23
Ending balance			$	2,368		$	2,321		$	7,721		$	619		$	907		$	849		$	323		$	727		$	15,835

Allowance for Loan Losses and Recorded Investment in Loans
(dollars in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor-owned			Construction			Home equity			Other residential			Installment and other consumer			Unallocated			Total
June 30, 2020
Ending ALLL related to loans collectively evaluated for impairment			$	2,599		$	2,718		$	10,339		$	836		$	1,040		$	1,266		$	262		$	1,374		$	20,434
Ending ALLL related to loans individually evaluated for impairment			10			192			64			—			4			—			164			—			434
Ending balance			$	2,609		$	2,910		$	10,403		$	836		$	1,044		$	1,266		$	426		$	1,374		$	20,868
Recorded Investment:
Collectively evaluated for impairment			$	524,539		$	289,161		$	943,725		$	66,368		$	112,035		$	136,859		$	25,614		$	—		$	2,098,301
Individually evaluated for impairment			578			7,002			2,664			—			876			—			780			—			11,900
Total			$	525,117		$	296,163		$	946,389		$	66,368		$	112,911		$	136,859		$	26,394		$	—		$	2,110,201
Ratio of allowance for loan losses to total loans			0.50		%	0.98		%	1.10		%	1.26		%	0.92		%	0.93		%	1.61		%	NM			0.99		%
Allowance for loan losses to non-accrual loans			NM			NM			1,147		%	NM			167		%	NM			775		%	NM			1,315		%

NM - Not Meaningful

Allowance for Loan Losses and Recorded Investment in Loans
(dollars in thousands)			Commercial and industrial			Commercial real estate, owner-occupied			Commercial real estate, investor-owned			Construction			Home equity			Other residential			Installment and other consumer			Unallocated			Total
December 31, 2019
Ending ALLL related to loans collectively evaluated for impairment			$	2,231		$	2,267		$	8,442		$	638		$	845		$	973		$	231		$	653		$	16,280
Ending ALLL related to loans individually evaluated for impairment			103			195			41			—			5			—			53			—			397
Ending balance			$	2,334		$	2,462		$	8,483		$	638		$	850		$	973		$	284		$	653		$	16,677
Recorded Investment:
Collectively evaluated for impairment			$	245,464		$	301,826		$	944,547		$	61,095		$	115,606		$	136,205		$	27,043		$	—		$	1,831,786
Individually evaluated for impairment			1,223			6,998			1,770			—			418			452			639			—			11,500
Total			$	246,687		$	308,824		$	946,317		$	61,095		$	116,024		$	136,657		$	27,682		$	—		$	1,843,286
Ratio of allowance for loan losses to total loans			0.95		%	0.80		%	0.90		%	1.04		%	0.73		%	0.71		%	1.03		%	NM			0.90		%
Allowance for loan losses to non-accrual loans			NM			NM			NM			NM			506		%	NM			490		%	NM			7,379		%

NM - Not Meaningful

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