| Loans |
Loans Loans, excluding loans held for sale, at September 30, 2016 and December 31, 2015, were comprised of the following (dollars in thousands): | | | | | | | | | | September 30,
2016 | | December 31, 2015 | Commercial | $ | 204,184 |
| | $ | 177,481 |
| Commercial real estate: | |
| | |
| Construction and land development | 91,688 |
| | 72,968 |
| Commercial real estate | 454,797 |
| | 430,186 |
| Residential real estate: | |
| | |
| Residential | 218,632 |
| | 220,434 |
| Home equity | 108,617 |
| | 98,449 |
| Consumer | 5,283 |
| | 6,007 |
| Total loans | $ | 1,083,201 |
| | $ | 1,005,525 |
|
Acquired Loans The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheets at September 30, 2016 and December 31, 2015 are as follows (dollars in thousands): | | | | | | | | | | September 30,
2016 | | December 31, 2015 | Outstanding principal balance | $ | 112,205 |
| | $ | 145,380 |
| Carrying amount | 103,911 |
| | 135,254 |
|
The outstanding principal balance and related carrying amount of acquired impaired loans, for which the Company applies FASB Accounting Standards Codification ("ASC") 310-30 to account for interest earned, as of the indicated dates are as follows (dollars in thousands): | | | | | | | | | | September 30,
2016 | | December 31, 2015 | Outstanding principal balance | $ | 35,697 |
| | $ | 40,951 |
| Carrying amount | 29,739 |
| | 33,878 |
|
The following table presents changes in the accretable yield on acquired impaired loans, for which the Company applies FASB ASC 310-30, at September 30, 2016 and December 31, 2015 (dollars in thousands): | | | | | | | | | | September 30, 2016 | | December 31, 2015 | Balance at January 1 | $ | 7,299 |
| | $ | 1,440 |
| Additions from merger with MainStreet | — |
| | 7,140 |
| Accretion | (1,079 | ) | | (211 | ) | Other changes, net | 201 |
| | (1,070 | ) | | $ | 6,421 |
| | $ | 7,299 |
|
Past Due Loans The following table shows an analysis by portfolio segment of the Company's past due loans at September 30, 2016 (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30- 59 Days
Past Due | | 60-89 Days
Past Due | | 90 Days +
Past Due
and Still
Accruing | | Non-
Accrual
Loans | | Total
Past
Due | | Current | | Total
Loans | Commercial | $ | 13 |
| | $ | — |
| | $ | — |
| | $ | 67 |
| | $ | 80 |
| | $ | 204,104 |
| | $ | 204,184 |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| | |
| | |
| Construction and land development | 15 |
| | — |
| | — |
| | 66 |
| | 81 |
| | 91,607 |
| | 91,688 |
| Commercial real estate | 129 |
| | 114 |
| | — |
| | 905 |
| | 1,148 |
| | 453,649 |
| | 454,797 |
| Residential: | |
| | |
| | |
| | |
| | |
| | |
| | |
| Residential | 517 |
| | 73 |
| | — |
| | 2,073 |
| | 2,663 |
| | 215,969 |
| | 218,632 |
| Home equity | 95 |
| | 34 |
| | — |
| | 726 |
| | 855 |
| | 107,762 |
| | 108,617 |
| Consumer | 2 |
| | 18 |
| | — |
| | 9 |
| | 29 |
| | 5,254 |
| | 5,283 |
| Total | $ | 771 |
| | $ | 239 |
| | $ | — |
| | $ | 3,846 |
| | $ | 4,856 |
| | $ | 1,078,345 |
| | $ | 1,083,201 |
|
The following table shows an analysis by portfolio segment of the Company's past due loans at December 31, 2015 (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30- 59 Days
Past Due | | 60-89 Days
Past Due | | 90 Days +
Past Due
and Still
Accruing | | Non-
Accrual
Loans | | Total
Past
Due | | Current | | Total
Loans | Commercial | $ | 137 |
| | $ | — |
| | $ | — |
| | $ | 90 |
| | $ | 227 |
| | $ | 177,254 |
| | $ | 177,481 |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| | |
| | |
| Construction and land development | — |
| | — |
| | — |
| | 258 |
| | 258 |
| | 72,710 |
| | 72,968 |
| Commercial real estate | 135 |
| | 182 |
| | — |
| | 2,497 |
| | 2,814 |
| | 427,372 |
| | 430,186 |
| Residential: | |
| | |
| | |
| | |
| | |
| | |
| | |
| Residential | 913 |
| | 398 |
| | — |
| | 1,731 |
| | 3,042 |
| | 217,392 |
| | 220,434 |
| Home equity | 140 |
| | 12 |
| | — |
| | 620 |
| | 772 |
| | 97,677 |
| | 98,449 |
| Consumer | 53 |
| | 1 |
| | — |
| | 9 |
| | 63 |
| | 5,944 |
| | 6,007 |
| Total | $ | 1,378 |
| | $ | 593 |
| | $ | — |
| | $ | 5,205 |
| | $ | 7,176 |
| | $ | 998,349 |
| | $ | 1,005,525 |
|
Impaired Loans The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at September 30, 2016 (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | Recorded
Investment | | Unpaid
Principal
Balance | | Related
Allowance | | Average
Recorded
Investment | | Interest
Income
Recognized | With no related allowance recorded: | | | | | | | | | | Commercial | $ | 25 |
| | $ | 25 |
| | $ | — |
| | $ | 9 |
| | $ | 1 |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| Construction and land development | 238 |
| | 238 |
| | — |
| | 238 |
| | 13 |
| Commercial real estate | 1,837 |
| | 1,838 |
| | — |
| | 1,282 |
| | 76 |
| Residential: | |
| | |
| | |
| | |
| | |
| Residential | 395 |
| | 405 |
| | — |
| | 198 |
| | 20 |
| Home equity | 409 |
| | 602 |
| | — |
| | 189 |
| | 16 |
| Consumer | 10 |
| | 10 |
| | — |
| | 11 |
| | 1 |
| | $ | 2,914 |
| | $ | 3,118 |
| | $ | — |
| | $ | 1,927 |
| | $ | 127 |
| With a related allowance recorded: | |
| | |
| | |
| | |
| | |
| Commercial * | 67 |
| | 67 |
| | — |
| | 93 |
| | 1 |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| Construction and land development* | 65 |
| | 66 |
| | — |
| | 324 |
| | 10 |
| Commercial real estate* | 146 |
| | 145 |
| | — |
| | 346 |
| | 7 |
| Residential | |
| | |
| | |
| | |
| | |
| Residential | 1,563 |
| | 1,565 |
| | 21 |
| | 1,582 |
| | 16 |
| Home equity | 316 |
| | 317 |
| | 1 |
| | 335 |
| | 2 |
| Consumer* | 9 |
| | 9 |
| | — |
| | 13 |
| | — |
| | $ | 2,166 |
| | $ | 2,169 |
| | $ | 22 |
| | $ | 2,693 |
| | $ | 36 |
| Total: | |
| | |
| | |
| | |
| | |
| Commercial | $ | 92 |
| | $ | 92 |
| | $ | — |
| | $ | 102 |
| | $ | 2 |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| Construction and land development | 303 |
| | 304 |
| | — |
| | 562 |
| | 23 |
| Commercial real estate | 1,983 |
| | 1,983 |
| | — |
| | 1,628 |
| | 83 |
| Residential: | |
| | |
| | |
| | |
| | |
| Residential | 1,958 |
| | 1,970 |
| | 21 |
| | 1,780 |
| | 36 |
| Home equity | 725 |
| | 919 |
| | 1 |
| | 524 |
| | 18 |
| Consumer | 19 |
| | 19 |
| | — |
| | 24 |
| | 1 |
| | $ | 5,080 |
| | $ | 5,287 |
| | $ | 22 |
| | $ | 4,620 |
| | $ | 163 |
|
*Allowance is reported as zero in the table due to presentation in thousands and rounding. The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at December 31, 2015 (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | Recorded
Investment | | Unpaid
Principal
Balance | | Related
Allowance | | Average
Recorded
Investment | | Interest
Income
Recognized | With no related allowance recorded: | | | | | | | | | | Commercial | $ | 4 |
| | $ | 4 |
| | $ | — |
| | $ | 47 |
| | $ | — |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| Construction and land development | 205 |
| | 205 |
| | — |
| | 220 |
| | — |
| Commercial real estate | 1,202 |
| | 1,206 |
| | — |
| | 1,504 |
| | 1 |
| Residential: | |
| | |
| | |
| | |
| | |
| Residential | 127 |
| | 124 |
| | — |
| | 126 |
| | — |
| Home equity | 173 |
| | 173 |
| | — |
| | 305 |
| | — |
| Consumer | 13 |
| | 13 |
| | — |
| | 14 |
| | — |
| | $ | 1,724 |
| | $ | 1,725 |
| | $ | — |
| | $ | 2,216 |
| | $ | 1 |
| With a related allowance recorded: | |
| | |
| | |
| | |
| | |
| Commercial* | $ | 91 |
| | $ | 91 |
| | $ | — |
| | $ | 99 |
| | $ | — |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| Construction and land development | 448 |
| | 449 |
| | 6 |
| | 563 |
| | 26 |
| Commercial real estate | 390 |
| | 391 |
| | 3 |
| | 353 |
| | 17 |
| Residential: | |
| | |
| | |
| | |
| | |
| Residential* | 1,649 |
| | 1,690 |
| | — |
| | 1,034 |
| | 22 |
| Home equity | 397 |
| | 396 |
| | 25 |
| | 327 |
| | — |
| Consumer | 8 |
| | 9 |
| | 1 |
| | 11 |
| | — |
| | $ | 2,983 |
| | $ | 3,026 |
| | $ | 35 |
| | $ | 2,387 |
| | $ | 65 |
| Total: | |
| | |
| | |
| | |
| | |
| Commercial | $ | 95 |
| | $ | 95 |
| | $ | — |
| | $ | 146 |
| | $ | — |
| Commercial real estate: | |
| | |
| | |
| | |
| | |
| Construction and land development | 653 |
| | 654 |
| | 6 |
| | 783 |
| | 26 |
| Commercial real estate | 1,592 |
| | 1,597 |
| | 3 |
| | 1,857 |
| | 18 |
| Residential: | |
| | |
| | |
| | |
| | |
| Residential | 1,776 |
| | 1,814 |
| | — |
| | 1,160 |
| | 22 |
| Home equity | 570 |
| | 569 |
| | 25 |
| | 632 |
| | — |
| Consumer | 21 |
| | 22 |
| | 1 |
| | 25 |
| | — |
| | $ | 4,707 |
| | $ | 4,751 |
| | $ | 35 |
| | $ | 4,603 |
| | $ | 66 |
|
*Allowance is reported as zero in the table due to presentation in thousands and rounding.
The following tables show the detail of loans modified as troubled debt restructurings ("TDRs") during the three and nine months ended September 30, 2016 included in the impaired loan balances (dollars in thousands): | | | | | | | | | | | | | | | Loans Modified as a TDR for the | | | Three Months Ended September 30, 2016 | Loan Type | | Number of Contracts | | Pre-Modification
Outstanding Recorded
Investment | | Post-Modification
Outstanding Recorded
Investment | Commercial | | — |
| | $ | — |
| | $ | — |
| Commercial real estate | | — |
| | — |
| | — |
| Construction and land development | | — |
| | — |
| | — |
| Home Equity | | — |
| | — |
| | — |
| Residential real estate | | 1 |
| | 56 |
| | 47 |
| Consumer | | — |
| | — |
| | — |
| Total | | 1 |
| | $ | 56 |
| | $ | 47 |
|
| | | | | | | | | | | | | | | Loans Modified as a TDR for the | | | Nine Months Ended September 30, 2016 | Loan Type | | Number of Contracts | | Pre-Modification
Outstanding Recorded
Investment | | Post-Modification
Outstanding Recorded
Investment | Commercial | | 1 |
| | $ | 24 |
| | $ | 24 |
| Commercial real estate | | 2 |
| | 1,005 |
| | 1,003 |
| Construction and land development | | — |
| | — |
| | — |
| Home Equity | | — |
| | — |
| | — |
| Residential real estate | | 2 |
| | 58 |
| | 48 |
| Consumer | | — |
| | — |
| | — |
| Total | | 5 |
| | $ | 1,087 |
| | $ | 1,075 |
|
The following tables show the detail of loans modified as TDRs during the three and nine months ended September 30, 2015 included in the impaired loan balances (dollars in thousands): | | | | | | | | | | | | | | | Loans Modified as a TDR for the | | | Three Months Ended September 30, 2015 | Loan Type | | Number of Contracts | | Pre-Modification
Outstanding Recorded
Investment | | Post-Modification
Outstanding Recorded
Investment | Commercial | | 2 |
| | $ | 52 |
| | $ | 31 |
| Commercial real estate | | — |
| | — |
| | — |
| Construction and land development | | — |
| | — |
| | — |
| Home Equity | | 1 |
| | 106 |
| | 106 |
| Residential real estate | | 1 |
| | 382 |
| | 294 |
| Consumer | | — |
| | — |
| | — |
| Total | | 4 |
| | $ | 540 |
| | $ | 431 |
|
| | | | | | | | | | | | | | | Loans Modified as a TDR for the | | | Nine Months Ended September 30, 2015 | Loan Type | | Number of Contracts | | Pre-Modification
Outstanding Recorded
Investment | | Post-Modification
Outstanding Recorded
Investment | Commercial | | 2 |
| | $ | 52 |
| | $ | 31 |
| Commercial real estate | | 3 |
| | 256 |
| | 249 |
| Construction and land development | | — |
| | — |
| | — |
| Home Equity | | 1 |
| | 106 |
| | 106 |
| Residential real estate | | 5 |
| | 776 |
| | 680 |
| Consumer | | — |
| | — |
| | — |
| Total | | 11 |
| | $ | 1,190 |
| | $ | 1,066 |
|
During the three and nine months ended September 30, 2016 and 2015, the Company had no loans that subsequently defaulted within twelve months of modification. The Company defines defaults as one or more payments that occur more than 90 days past the due date, charge-off or foreclosure subsequent to modification. Residential Real Estate in Process of Foreclosure The Company had $1,424,000 in residential real estate loans in the process of foreclosure at September 30, 2016 and $470,000 and $643,000 in residential OREO at September 30, 2016 and December 31, 2015, respectively. Risk Grades The following table shows the Company's loan portfolio broken down by internal risk grading as of September 30, 2016 (dollars in thousands): Commercial and Consumer Credit Exposure Credit Risk Profile by Internally Assigned Grade | | | | | | | | | | | | | | | | | | | | | | Commercial | | Construction and Land Development | | Commercial
Real Estate
Other | | Residential | | Home
Equity | Pass | $ | 203,353 |
| | $ | 88,992 |
| | $ | 443,317 |
| | $ | 202,043 |
| | $ | 106,106 |
| Special Mention | 688 |
| | 792 |
| | 6,755 |
| | 11,637 |
| | 1,373 |
| Substandard | 143 |
| | 1,904 |
| | 4,725 |
| | 4,952 |
| | 1,138 |
| Doubtful | — |
| | — |
| | — |
| | — |
| | — |
| Total | $ | 204,184 |
| | $ | 91,688 |
| | $ | 454,797 |
| | $ | 218,632 |
| | $ | 108,617 |
|
Consumer Credit Exposure Credit Risk Profile Based on Payment Activity | | | | | | Consumer | | | Performing | $ | 5,249 |
| Nonperforming | 34 |
| Total | $ | 5,283 |
|
The following table shows the Company's loan portfolio broken down by internal risk grading as of December 31, 2015 (dollars in thousands): Commercial and Consumer Credit Exposure Credit Risk Profile by Internally Assigned Grade | | | | | | | | | | | | | | | | | | | | | | Commercial | | Construction and Land Development | | Commercial
Real Estate
Other | | Residential | | Home
Equity | Pass | $ | 175,963 |
| | $ | 68,853 |
| | $ | 418,719 |
| | $ | 200,008 |
| | $ | 96,142 |
| Special Mention | 1,364 |
| | 1,210 |
| | 5,860 |
| | 14,638 |
| | 1,314 |
| Substandard | 154 |
| | 2,905 |
| | 5,607 |
| | 5,788 |
| | 993 |
| Doubtful | — |
| | — |
| | — |
| | — |
| | — |
| Total | $ | 177,481 |
| | $ | 72,968 |
| | $ | 430,186 |
| | $ | 220,434 |
| | $ | 98,449 |
|
Consumer Credit Exposure Credit Risk Profile Based on Payment Activity | | | | | | Consumer | | | Performing | $ | 5,999 |
| Nonperforming | 8 |
| Total | $ | 6,007 |
|
Loans classified in the Pass category typically are fundamentally sound and risk factors are reasonable and acceptable. Loans classified in the Special Mention category typically have been criticized internally, by loan review or the loan officer, or by external regulators under the current credit policy regarding risk grades. Loans classified in the Substandard category typically have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are typically characterized by the possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loans classified in the Doubtful category typically have all the weaknesses inherent in loans classified as substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. However, these loans are not yet rated as loss because certain events may occur that may salvage the debt. Consumer loans are classified as performing or nonperforming. A loan is nonperforming when payments of interest and principal are past due 90 days or more, or payments are less than 90 days past due, but there are other good reasons to doubt that payment will be made in full. |