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Loans and Allowance for Loan Losses - (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Past due financing receivables

The following table shows outstanding loans by class and payment aging as of September 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
September 30, 2020
30-59 days past due			$	198		$	—		$	—		$	—		$	217		$	—		$	—		$	415
60-89 days past due			—			—			—			—			276			—			7			283
90 days or more past due			—			—			—			—			—			—			—			—
Total past due			198			—			—			—			493			—			7			698
Current			512,775			299,754			966,517			66,663			106,871			130,915			23,798			2,107,293
Total loans 1			$	512,973		$	299,754		$	966,517		$	66,663		$	107,364		$	130,915		$	23,805		$	2,107,991
Non-accrual loans 2			$	—		$	—		$	886		$	—		$	532		$	—		$	24		$	1,442
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 $(5.1) million (including $6.5 million in deferred SBA PPP loan fees, net of costs) and $983 thousand at September 30, 2020 and December 31, 2019, respectively. Amounts are also net of unaccreted purchase discounts on non-PCI loans of $878 thousand at September 30, 2020 and $983 thousand at December 31, 2019.

2 There were no loans past due more than ninety days accruing interest at September 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 September 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
September 30, 2020
Pass			$	484,305		$	251,741		$	946,166		$	66,663		$	105,824		$	130,915		$	23,665					$	2,009,279
Special Mention			28,544			41,010			17,359			—			800			—			—						87,713
Substandard			124			7,003			2,992			—			740			—			140						10,999
Total loans			$	512,973		$	299,754		$	966,517		$	66,663		$	107,364		$	130,915		$	23,805					$	2,107,991
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 September 30, 2020 and December 31, 2019.

(in thousands)
Recorded Investment in Troubled Debt Restructurings 1			September 30, 2020			December 31, 2019
Commercial and industrial			$	1,017		$	1,223
Commercial real estate, owner-occupied			7,003			6,998
Commercial real estate, investor-owned			3,309			1,770
Home equity			527			251
Other residential			—			452
Installment and other consumer			769			639
Total			$	12,625		$	11,333

1There was one acquired home equity TDR loan with a recorded investment of $276 thousand as of September 30, 2020. There were no acquired TDR loans as of December 31, 2019. TDR loans on non-accrual status totaled $300 thousand and $58 thousand at September 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 September 30, 2020:
Commercial real estate, investor-owned			1			$	1,553		$	1,553		$	1,553
TDRs during the three months ended September 30, 2019:
None			—			$	—		$	—		$	—
TDRs during the nine months ended September 30, 2020:
Commercial and industrial			1			$	170		$	162		$	125
Commercial real estate, investor-owned			1			1,553			1,553			1,553
Home equity			1			276			276			276
Installment and other consumer			3			211			211			209
			6			$	2,210		$	2,202		$	2,163
TDRs during the nine months ended September 30, 2019:
Commercial and industrial			1			$	298		$	298		$	173

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
September 30, 2020
Recorded investment in impaired loans:
With no specific allowance recorded			$	291		$	—		$	885		$	—		$	532		$	—		$	89		$	1,797
With a specific allowance recorded			726			7,003			3,310			—			251			—			680			11,970
Total recorded investment in impaired loans			$	1,017		$	7,003		$	4,195		$	—		$	783		$	—		$	769		$	13,767
Unpaid principal balance of impaired loans			$	1,012		$	6,993		$	4,187		$	—		$	801		$	—		$	767		$	13,760
Specific allowance			19			225			697			—			4			—			161			1,106
Average recorded investment in impaired loans during the quarter ended September 30, 2020			798			7,002			3,430			—			829			—			774			12,833
Interest income recognized on impaired loans during the quarter ended September 30, 20201			11			64			30			—			3			—			7			115
Average recorded investment in impaired loans during the nine months ended September 30, 2020			948			7,000			2,832			—			740			225			730			12,475
Interest income recognized on impaired loans during the nine months ended September 30, 20201			32			197			68			—			10			4			22			333
Average recorded investment in impaired loans during the quarter ended September 30, 2019			1,324			7,000			1,791			684			413			456			659			12,327
Interest income recognized on impaired loans during the quarter ended September 30, 20191			16			67			20			400			9			4			6			522
Average recorded investment in impaired loans during the nine months ended September 30, 2019			1,495			6,998			1,804			1,687			497			458			670			13,609
Interest income recognized on impaired loans during the nine months ended September 30, 20191			56			199			59			456			42			14			18			844

1 No interest income was recognized on a cash basis during the three and nine months ended September 30, 2020. Interest income recognized on a cash basis of $393 thousand and $416 thousand during the respective three and nine months ended September 30, 2019 was related to a principal payment applied to interest collected but unrecognized on a former non-accrual land development loan and the pay-off of three non-accrual 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
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 September 30, 2020
Beginning balance			$	2,609		$	2,910		$	10,403		$	836		$	1,044		$	1,266		$	426		$	1,374		$	20,868
Provision (reversal)			(79)			225			1,221			24			(6)			(6)			(20)			(109)			1,250
Charge-offs			(10)			—			—			—			—			—			—			—			(10)
Recoveries			5			—			—			—			—			—			—			—			5
Ending balance			$	2,525		$	3,135		$	11,624		$	860		$	1,038		$	1,260		$	406		$	1,265		$	22,113
Three months ended September 30, 2019
Beginning balance			$	2,368		$	2,321		$	7,721		$	619		$	907		$	849		$	323		$	727		$	15,835
Provision (reversal)			326			21			211			(117)			(28)			56			(28)			(41)			400
Charge-offs			—			—			—			—			—			—			—			—			—
Recoveries			5			—			—			—			—			—			—			—			5
Ending balance			$	2,699		$	2,342		$	7,932		$	502		$	879		$	905		$	295		$	686		$	16,240

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
Nine months ended September 30, 2020
Beginning balance			$	2,334		$	2,462		$	8,483		$	638		$	850		$	973		$	284		$	653		$	16,677
Provision (reversal)			208			673			3,141			219			188			287			122			612			5,450
Charge-offs			(30)			—			—			—			—			—			—			—			(30)
Recoveries			13			—			—			3			—			—			—			—			16
Ending balance			$	2,525		$	3,135		$	11,624		$	860		$	1,038		$	1,260		$	406		$	1,265		$	22,113
Nine months ended September 30, 2019
Beginning balance			$	2,436		$	2,407		$	7,703		$	756		$	915		$	800		$	310		$	494		$	15,821
Provision (reversal)			256			(65)			217			(254)			(36)			105			(15)			192			400
Charge-offs			(9)			—			—			—			—			—			—			—			(9)
Recoveries			16			—			12			—			—			—			—			—			28
Ending balance			$	2,699		$	2,342		$	7,932		$	502		$	879		$	905		$	295		$	686		$	16,240

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
September 30, 2020
Ending ALLL related to loans collectively evaluated for impairment			$	2,506		$	2,910		$	10,927		$	860		$	1,034		$	1,260		$	245		$	1,265		$	21,007
Ending ALLL related to loans individually evaluated for impairment			19			225			697			—			4			—			161			—			1,106
Ending balance			$	2,525		$	3,135		$	11,624		$	860		$	1,038		$	1,260		$	406		$	1,265		$	22,113
Recorded Investment:
Collectively evaluated for impairment			$	511,956		$	292,751		$	962,322		$	66,663		$	106,581		$	130,915		$	23,036		$	—		$	2,094,224
Individually evaluated for impairment			1,017			7,003			4,195			—			783			—			769			—			13,767
Total			$	512,973		$	299,754		$	966,517		$	66,663		$	107,364		$	130,915		$	23,805		$	—		$	2,107,991
Ratio of allowance for loan losses to total loans			0.49		%	1.05		%	1.20		%	1.29		%	0.97		%	0.96		%	1.71		%	NM			1.05		%
Allowance for loan losses to non-accrual loans			NM			NM			1,312		%	NM			195		%	NM			1,692		%	NM			1,533		%

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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Tabular disclosure of allowance for credit loss on financing receivable.

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Tabular disclosure of financing receivables by credit quality indicator. The credit quality indicator is a statistic about the credit quality of financing receivables. Examples include, but not limited to, consumer credit risk scores, credit-rating-agency ratings, an entity's internal credit risk grades, loan-to-value ratios, collateral, collection experience and other internal metrics.

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