Loans | LOANS Loans are summarized as follows: Dollars in thousands March 31, December 31, March 31, Commercial $ 134,808 $ 119,088 $ 101,742 Commercial real estate Owner-occupied 217,733 203,047 202,680 Non-owner occupied 401,795 381,921 353,351 Construction and development Land and land development 68,079 72,042 66,483 Construction 16,511 16,584 7,997 Residential real estate Non-jumbo 266,140 265,641 221,368 Jumbo 60,780 65,628 50,057 Home equity 75,299 74,596 74,097 Mortgage warehouse lines 30,217 85,966 — Consumer 24,440 25,534 19,095 Other 8,831 9,489 11,235 Total loans, net of unearned fees 1,304,633 1,319,536 1,108,105 Less allowance for loan losses 11,718 11,674 11,315 Loans, net $ 1,292,915 $ 1,307,862 $ 1,096,790 The outstanding balance and the recorded investment of acquired loans included in the consolidated balance sheet at March 31, 2017 are as follows: Acquired Loans Dollars in thousands Purchased Credit Impaired Purchased Performing Total Outstanding balance $ 2,456 $ 49,173 $ 51,629 Recorded investment Commercial $ — $ 3,095 $ 3,095 Commercial real estate Owner-occupied — 3,054 3,054 Non-owner occupied — 1,118 1,118 Construction and development Land and land development — 3,608 3,608 Residential real estate Non-jumbo 998 31,037 32,035 Jumbo 1,014 3,247 4,261 Consumer — 3,708 3,708 Total recorded investment $ 2,012 $ 48,867 $ 50,879 The following table presents a summary of the change in the accretable yield of the PCI loan portfolio for the period from January 1, 2017 to March 31, 2017: Dollars in thousands Accretable yield, January 1, 2017 $ 290 Accretion (31 ) Reclassification of nonaccretable difference due to improvement in expected cash flows — Other changes, net (14 ) Accretable yield, March 31, 2017 $ 245 The following table presents the contractual aging of the recorded investment in past due loans by class as of March 31, 2017 and 2016 and December 31, 2016 . At March 31, 2017 Past Due > 90 days and Accruing Dollars in thousands 30-59 days 60-89 days > 90 days Total Current Commercial $ 5 $ 157 $ 55 $ 217 $ 134,591 $ — Commercial real estate Owner-occupied 162 2,298 577 3,037 214,696 — Non-owner occupied 298 — — 298 401,497 — Construction and development Land and land development 252 38 3,741 4,031 64,048 — Construction — — — — 16,511 — Residential mortgage Non-jumbo 2,554 926 3,140 6,620 259,520 — Jumbo — — — — 60,780 — Home equity 108 — 379 487 74,812 — Mortgage warehouse lines — — — — 30,217 — Consumer 158 14 161 333 24,107 68 Other — — — — 8,831 — Total $ 3,537 $ 3,433 $ 8,053 $ 15,023 $ 1,289,610 $ 68 At December 31, 2016 Past Due > 90 days and Accruing Dollars in thousands 30-59 days 60-89 days > 90 days Total Current Commercial $ 90 $ 86 $ 165 $ 341 $ 118,747 $ — Commercial real estate Owner-occupied 93 — 509 602 202,445 — Non-owner occupied 340 — 65 405 381,516 — Construction and development Land and land development 423 129 3,852 4,404 67,638 — Construction — — — — 16,584 — Residential mortgage Non-jumbo 4,297 1,889 3,287 9,473 256,168 — Jumbo — — — — 65,628 — Home equity — 302 57 359 74,237 — Mortgage warehouse lines — — — — 85,966 — Consumer 308 84 150 542 24,992 — Other — — — — 9,489 — Total $ 5,551 $ 2,490 $ 8,085 $ 16,126 $ 1,303,410 $ — At March 31, 2016 Past Due > 90 days and Accruing Dollars in thousands 30-59 days 60-89 days > 90 days Total Current Commercial $ 39 $ 468 $ 179 $ 686 $ 101,056 $ — Commercial real estate Owner-occupied 272 497 822 1,591 201,089 — Non-owner occupied 153 — 749 902 352,449 — Construction and development Land and land development 178 41 4,739 4,958 61,525 — Construction — — — — 7,997 — Residential mortgage Non-jumbo 2,555 832 1,906 5,293 216,075 — Jumbo — — — — 50,057 — Home equity — 453 71 524 73,573 — Consumer 70 21 117 208 18,887 — Other — — — — 11,235 — Total $ 3,267 $ 2,312 $ 8,583 $ 14,162 $ 1,093,943 $ — Nonaccrual loans: The following table presents the nonaccrual loans included in the net balance of loans at March 31, 2017 , December 31, 2016 and March 31, 2016 . March 31, December 31, Dollars in thousands 2017 2016 2016 Commercial $ 226 $ 430 $ 298 Commercial real estate Owner-occupied 577 822 509 Non-owner occupied 4,157 5,318 4,336 Construction and development Land & land development 3,936 5,467 4,465 Construction — — — Residential mortgage Non-jumbo 5,343 3,023 4,621 Jumbo — — — Home equity 542 225 194 Mortgage warehouse lines — — — Consumer 94 121 151 Total $ 14,875 $ 15,406 $ 14,574 Impaired loans: Impaired loans include the following: ▪ Loans which we risk-rate (consisting of loan relationships having aggregate balances in excess of $ 2.5 million , or loans exceeding $ 500,000 and exhibiting credit weakness) through our normal loan review procedures and which, based on current information and events, it is probable that we will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement. Risk-rated loans with insignificant delays or insignificant short falls in the amount of payments expected to be collected are not considered to be impaired. ▪ Loans that have been modified in a troubled debt restructuring. Both commercial and consumer loans are deemed impaired upon being contractually modified in a troubled debt restructuring. Troubled debt restructurings typically result from our loss mitigation activities and occur when we grant a concession to a borrower who is experiencing financial difficulty in order to minimize our economic loss and to avoid foreclosure or repossession of collateral. Once restructured, a loan is generally considered impaired until its maturity, regardless of whether the borrower performs under the modified terms. Although such a loan may be returned to accrual status if the criteria set forth in our accounting policy are met, the loan would continue to be evaluated for an asset-specific allowance for loan losses and we would continue to report the loan in the impaired loan table below. The following tables present loans individually evaluated for impairment at March 31, 2017 , December 31, 2016 and March 31, 2016 . March 31, 2017 Dollars in thousands Recorded Investment Unpaid Principal Balance Related Allowance Average Impaired Balance Interest Income Recognized while impaired Without a related allowance Commercial $ 275 $ 275 $ — $ 275 $ 9 Commercial real estate Owner-occupied 806 806 — 806 44 Non-owner occupied 9,678 9,679 — 9,679 271 Construction and development Land & land development 4,884 4,885 — 4,885 81 Construction — — — — — Residential real estate Non-jumbo 4,173 4,183 — 4,049 157 Jumbo 3,626 3,625 — 3,625 172 Home equity 524 523 — 523 24 Mortgage warehouse lines — — — — — Consumer 39 39 — 39 4 Total without a related allowance $ 24,005 $ 24,015 $ — $ 23,881 $ 762 With a related allowance Commercial $ — $ — $ — $ — $ — Commercial real estate Owner-occupied 6,847 6,847 375 6,847 268 Non-owner occupied 1,300 1,300 200 1,300 42 Construction and development Land & land development 2,065 2,066 589 2,066 79 Construction — — — — — Residential real estate Non-jumbo 2,298 2,300 337 2,041 96 Jumbo 852 852 25 852 43 Home equity — — — — — Mortgage warehouse lines — — — — — Consumer — — — — — Total with a related allowance $ 13,362 $ 13,365 $ 1,526 $ 13,106 $ 528 Total Commercial $ 25,855 $ 25,858 $ 1,164 $ 25,858 $ 794 Residential real estate 11,473 11,483 362 11,090 492 Consumer 39 39 — 39 4 Total $ 37,367 $ 37,380 $ 1,526 $ 36,987 $ 1,290 December 31, 2016 Dollars in thousands Recorded Investment Unpaid Principal Balance Related Allowance Average Impaired Balance Interest Income Recognized while impaired Without a related allowance Commercial $ 285 $ 285 $ — $ 247 $ 10 Commercial real estate Owner-occupied 520 520 — 534 31 Non-owner occupied 10,203 10,205 — 10,675 294 Construction and development Land & land development 5,227 5,227 — 5,270 80 Construction — — — — — Residential real estate Non-jumbo 4,055 4,065 — 3,910 193 Jumbo 3,640 3,639 — 3,693 175 Home equity 524 523 — 523 22 Mortgage warehouse lines — — — — — Consumer 44 44 — 50 5 Total without a related allowance $ 24,498 $ 24,508 $ — $ 24,902 $ 810 With a related allowance Commercial $ — $ — $ — $ — $ — Commercial real estate Owner-occupied 6,864 6,864 347 6,879 269 Non-owner occupied 1,311 1,311 197 1,327 43 Construction and development Land & land development 2,066 2,066 585 2,074 80 Construction — — — — — Residential real estate Non-jumbo 2,055 2,057 251 1,851 78 Jumbo 853 853 24 862 44 Home equity — — — — — Mortgage warehouse lines — — — — — Consumer — — — — — Total with a related allowance $ 13,149 $ 13,151 $ 1,404 $ 12,993 $ 514 Total Commercial $ 26,476 $ 26,478 $ 1,129 $ 27,006 $ 807 Residential real estate 11,127 11,137 275 10,839 512 Consumer 44 44 — 50 5 Total $ 37,647 $ 37,659 $ 1,404 $ 37,895 $ 1,324 March 31, 2016 Dollars in thousands Recorded Investment Unpaid Principal Balance Related Allowance Average Impaired Balance Interest Income Recognized while impaired Without a related allowance Commercial $ 200 $ 200 $ — $ 200 $ 9 Commercial real estate Owner-occupied 5,446 5,446 — 5,446 211 Non-owner occupied 11,352 11,353 — 11,353 299 Construction and development Land & land development 7,451 7,452 — 7,452 163 Construction — — — — — Residential real estate Non-jumbo 4,060 4,071 — 3,824 169 Jumbo 3,740 3,739 — 3,739 178 Home equity 710 709 — 709 32 Consumer 62 62 — 62 5 Total without a related allowance $ 33,021 $ 33,032 $ — $ 32,785 $ 1,066 With a related allowance Commercial $ — $ — $ — $ — $ — Commercial real estate Owner-occupied 2,929 2,929 89 2,929 112 Non-owner occupied 1,841 1,841 151 1,841 71 Construction and development Land & land development 1,152 1,152 139 1,152 — Construction — — — — — Residential real estate Non-jumbo 2,337 2,337 187 2,337 112 Jumbo 867 868 31 868 43 Home equity — — — — — Consumer — — — — — Total with a related allowance $ 9,126 $ 9,127 $ 597 $ 9,127 $ 338 Total Commercial $ 30,371 $ 30,373 $ 379 $ 30,373 $ 865 Residential real estate 11,714 11,724 218 11,477 534 Consumer 62 62 — 62 5 Total $ 42,147 $ 42,159 $ 597 $ 41,912 $ 1,404 Included in impaired loans are TDRs of $28.9 million , of which $28.2 million were current with respect to restructured contractual payments at March 31, 2017 , and $28.6 million , of which $28.1 million were current with respect to restructured contractual payments at December 31, 2016 . There were no commitments to lend additional funds under these restructurings at either balance sheet date. The following table presents by class the TDRs that were restructured during the three months ended March 31, 2017 and March 31, 2016 . Generally, the modifications were extensions of term, modifying the payment terms from principal and interest to interest only for an extended period, or reduction in interest rate. All TDRs are evaluated individually for allowance for loan loss purposes. For the Three Months Ended For the Three Months Ended Dollars in thousands Number of Modifications Pre-modification Recorded Investment Post-modification Recorded Investment Number of Modifications Pre-modification Recorded Investment Post-modification Recorded Investment Commercial — $ — $ — — $ — $ — Commercial real estate Owner-occupied — — — — — — Non-owner occupied — — — — — — Construction and development Land & land development — — — — — — Construction — — — — — — Residential real estate Non-jumbo 4 880 880 1 250 250 Jumbo — — — — — — Home equity — — — — — — Mortgage warehouse lines — — — — — — Consumer — — — — — — Total 4 $ 880 $ 880 1 $ 250 $ 250 The following table presents defaults during the stated period of TDRs that were restructured during the past twelve months. For purposes of these tables, a default is considered as either the loan was past due 30 days or more at any time during the period, or the loan was fully or partially charged off during the period. For the Three Months Ended Dollars in thousands Number of Defaults Recorded Investment at Default Date Commercial — $ — Commercial real estate Owner-occupied — — Non-owner occupied — — Construction and development Land & land development — — Construction — — Residential real estate Non-jumbo 1 319 Jumbo — — Home equity — — Mortgage warehouse lines — — Consumer — — Total 1 $ 319 The following table details the activity regarding TDRs by loan type for the three months and three months ended March 31, 2017 , and the related allowance on TDRs. For the Three Months Ended March 31, 2017 Construction & Land Development Commercial Real Estate Residential Real Estate Dollars in thousands Land & Land Develop- ment Construc- tion Commer- cial Owner Occupied Non- Owner Occupied Non- jumbo Jumbo Home Equity Mortgage Warehouse Lines Con- sumer Other Total Troubled debt restructurings Balance January 1, 2017 $ 3,866 $ — $ 183 $ 7,383 $ 6,714 $ 5,417 $ 4,493 $ 523 $ — $ 44 $ — $ 28,623 Additions — — — — — 880 — — — — — 880 Charge-offs — — — — (65 ) — — — — — — (65 ) Net (paydowns) advances (352 ) — (5 ) (28 ) (58 ) (83 ) (15 ) — — (4 ) — (545 ) Transfer into foreclosed properties — — — — — — — — — — — — Refinance out of TDR status — — — — — — — — — — — — Balance, March 31, 2017 $ 3,514 $ — $ 178 $ 7,355 $ 6,591 $ 6,214 $ 4,478 $ 523 $ — $ 40 $ — $ 28,893 Allowance related to troubled debt restructurings $ 526 $ — $ — $ 375 $ 200 $ 337 $ 25 $ — $ — $ — $ — $ 1,463 The following table presents the recorded investment in construction and development, commercial, and commercial real estate loans which are generally evaluated based upon our internal risk ratings. Loan Risk Profile by Internal Risk Rating Construction and Development Commercial Real Estate Land and Land Development Construction Commercial Owner Occupied Non-Owner Occupied Mortgage Warehouse Lines Dollars in thousands 3/31/2017 12/31/2016 3/31/2017 12/31/2016 3/31/2017 12/31/2016 3/31/2017 12/31/2016 3/31/2017 12/31/2016 3/31/2017 12/31/2016 Pass $ 60,870 $ 64,144 $ 16,511 $ 16,584 $ 133,106 $ 117,214 $ 212,724 $ 201,113 $ 396,073 $ 375,181 $ 30,217 $ 85,966 OLEM (Special Mention) 2,002 2,097 — — 1,341 1,471 3,152 567 1,199 1,381 — — Substandard 5,207 5,801 — — 361 403 1,857 1,367 4,523 5,359 — — Doubtful — — — — — — — — — — — — Loss — — — — — — — — — — — — Total $ 68,079 $ 72,042 $ 16,511 $ 16,584 $ 134,808 $ 119,088 $ 217,733 $ 203,047 $ 401,795 $ 381,921 $ 30,217 $ 85,966 The following table presents the recorded investment in consumer, residential real estate, and home equity loans, which are generally evaluated based on the aging status of the loans, which was previously presented, and payment activity. Performing Nonperforming Dollars in thousands 3/31/2017 12/31/2016 3/31/2016 3/31/2017 12/31/2016 3/31/2016 Residential real estate Non-jumbo $ 260,690 $ 261,020 $ 218,345 $ 5,450 $ 4,621 $ 3,023 Jumbo 60,780 65,628 50,057 — — — Home Equity 74,757 74,402 73,872 542 194 225 Consumer 24,262 25,368 18,960 178 166 135 Other 8,831 9,489 11,235 — — — Total $ 429,320 $ 435,907 $ 372,469 $ 6,170 $ 4,981 $ 3,383 Loan commitments: ASC Topic 815, Derivatives and Hedging, requires that commitments to make mortgage loans should be accounted for as derivatives if the loans are to be held for sale, because the commitment represents a written option and accordingly is recorded at the fair value of the option liability. |