Allowance for Loan and Lease Losses | 9 Months Ended |
Sep. 30, 2013 |
Loans and Leases Receivable Disclosure [Abstract] | ' |
Allowance For Loan And Lease Losses | ' |
|
7. Allowance for Loan and Lease Losses |
|
Originated Loans and Leases |
|
Management reviews the appropriateness of the allowance for loan and lease losses (“allowance”) on a regular basis. Management considers the accounting policy relating to the allowance to be a critical accounting policy, given the inherent uncertainty in evaluating the levels of the allowance required to cover credit losses in the portfolio and the material effect that assumptions could have on the Company’s results of operations. The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan portfolio to assure that an appropriate allowance is maintained. The Company’s methodology is based upon guidance provided in SEC Staff Accounting Bulletin No. 102, Selected Loan Loss Allowance Methodology and Documentation Issues and ASC Topic 310, Receivables and ASC Topic 450, Contingencies. |
|
The Company’s methodology for determining and allocating the allowance for loan and lease losses focuses on ongoing reviews of larger individual loans and leases, historical net charge-offs, delinquencies in the loan and lease portfolio, the level of impaired and nonperforming loans, values of underlying loan and lease collateral, the overall risk characteristics of the portfolios, changes in character or size of the portfolios, geographic location, current economic conditions, changes in capabilities and experience of lending management and staff, and other relevant factors. The various factors used in the methodologies are reviewed on a regular basis. |
|
At least annually, management reviews all commercial and commercial real estate loans exceeding a certain threshold and assigns a risk rating. The Company uses an internal loan rating system of pass credits, special mention loans, substandard loans, doubtful loans, and loss loans (which are fully charged off). The definitions of “special mention”, “substandard”, “doubtful” and “loss” are consistent with banking regulatory definitions. Factors considered in assigning loan ratings include: the customer’s ability to repay based upon customer’s expected future cash flow, operating results, and financial condition; the underlying collateral, if any; and the economic environment and industry in which the customer operates. Special mention loans have potential weaknesses that if left uncorrected may result in deterioration of the repayment prospects and a downgrade to a more severe risk rating. A substandard loan credit has a well-defined weakness which makes payment default or principal exposure likely, but not yet certain. There is a possibility that the Company will sustain some loss if the deficiencies are not corrected. A doubtful loan has a high possibility of loss, but the extent of the loss is difficult to quantify because of certain important and reasonably specific pending factors. |
|
At least quarterly, management reviews all commercial and commercial real estate loans and leases and agriculturally related loans with an outstanding principal balance of over $500,000 that are internally risk rated special mention or worse, giving consideration to payment history, debt service payment capacity, collateral support, strength of guarantors, local market trends, industry trends, and other factors relevant to the particular borrowing relationship. Through this process, management identifies impaired loans. For loans and leases considered impaired, estimated exposure amounts are based upon collateral values or present value of expected future cash flows discounted at the original effective interest rate of each loan. For commercial loans, commercial mortgage loans, and agricultural loans not specifically reviewed, and for homogenous loan portfolios such as residential mortgage loans and consumer loans, estimated exposure amounts are assigned based upon historical net loss experience and current charge-off trends, past due status, and management’s judgment of the effects of current economic conditions on portfolio performance. In determining and assigning historical loss factors to the various homogeneous portfolios, the Company calculates average net losses over a period of time and compares this average to current levels and trends to ensure that the calculated average loss factors are reasonable. |
|
Since the methodology is based upon historical experience and trends as well as management’s judgment, factors may arise that result in different estimates. Significant factors that could give rise to changes in these estimates may include, but are not limited to, changes in economic conditions in the local area, concentration of risk, changes in interest rates, and declines in local property values. While management’s evaluation of the allowance as of September 30, 2013, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance. |
|
Acquired Loans and Leases |
|
Acquired loans accounted for under ASC 310-30 |
|
For our acquired loans, our allowance for loan losses is estimated based upon our expected cash flows for these loans. To the extent that we experience a deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans. |
|
Acquired loans accounted for under ASC 310-20 |
|
We establish our allowance for loan losses through a provision for credit losses based upon an evaluation process that is similar to our evaluation process used for originated loans. This evaluation, which includes a review of loans on which full collectability may not be reasonably assured, considers, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan loss experience, carrying value of the loans, which includes the remaining net purchase discount or premium, and other factors that warrant recognition in determining our allowance for loan losses. |
|
The following tables detail activity in the allowance for loan and lease losses segregated by originated and acquired loan and lease portfolios and by portfolio segment for the three and nine months ended September 30, 2013 and 2012. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. |
| | | | | | | | | | | | | | | | | | |
Three months ended September 30, 2013 | |
(in thousands) | Commercial | | Commercial | | Residential | | | Consumer | | | Finance | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 6,955 | | | $ | 10,409 | | | $ | 5,273 | | | $ | 2,195 | | | $ | 21 | | | $ | 24,853 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | | | (55 | ) | | | (49 | ) | | | (116 | ) | | | (578 | ) | | | 0 | | | | (798 | ) |
Recoveries | | | 48 | | | | 21 | | | | 3 | | | | 96 | | | | 0 | | | | 168 | |
Provision | | | 790 | | | | 516 | | | | 149 | | | | 65 | | | | (21 | ) | | | 1,499 | |
Ending Balance | | $ | 7,738 | | | $ | 10,897 | | | $ | 5,309 | | | $ | 1,778 | | | $ | 0 | | | $ | 25,722 | |
|
Three months ended September 30, 2013 | |
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Covered | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Loans |
Acquired | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 64 | | | $ | 381 | | | $ | 126 | | | $ | 34 | | | $ | 0 | | | $ | 605 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | | | (1 | ) | | | 0 | | | | (467 | ) | | | 0 | | | | 0 | | | | (468 | ) |
Recoveries | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Provision | | | (12 | ) | | | 56 | | | | 504 | | | | 1 | | | | 0 | | | | 549 | |
Ending Balance | | $ | 51 | | | $ | 437 | | | $ | 163 | | | $ | 35 | | | $ | 0 | | | $ | 686 | |
|
Three months ended September 30, 2012 | |
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Finance | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 7,807 | | | $ | 12,967 | | | $ | 4,350 | | | $ | 1,720 | | | $ | 21 | | | $ | 26,865 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | | | (307 | ) | | | (644 | ) | | | (427 | ) | | | (169 | ) | | | 0 | | | | (1,547 | ) |
Recoveries | | | 86 | | | | 128 | | | | 1 | | | | 57 | | | | 0 | | | | 272 | |
Provision | | | 416 | | | | (467 | ) | | | 717 | | | | 396 | | | | (20 | ) | | | 1,042 | |
Ending Balance | | $ | 8,002 | | | $ | 11,984 | | | $ | 4,641 | | | $ | 2,004 | | | $ | 1 | | | $ | 26,632 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
There was no allowance for acquired loans and leases as of September 30, 2012. |
|
Nine months ended September 30, 2013 | |
(in thousands) | Commercial | | Commercial | | | Residential | | | Consumer | | | Finance | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | | | | | | | | | | | | | | | | | | |
Allowance for credit losses: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 7,533 | | | $ | 10,184 | | | $ | 4,981 | | | $ | 1,940 | | | $ | 5 | | | $ | 24,643 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | | | (487 | ) | | | (539 | ) | | | (455 | ) | | | (1,040 | ) | | | 0 | | | | (2,521 | ) |
Recoveries | | | 1,490 | | | | 457 | | | | 32 | | | | 296 | | | | 0 | | | | 2,275 | |
Provision | | | (798 | ) | | | 795 | | | | 751 | | | | 582 | | | | (5 | ) | | | 1,325 | |
Ending Balance | | $ | 7,738 | | | $ | 10,897 | | | $ | 5,309 | | | $ | 1,778 | | | $ | 0 | | | $ | 25,722 | |
|
Nine months ended September 30, 2013 | |
(in thousands) | Commercial | | Commercial | | | Residential | | | Consumer | | | Covered | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Loans |
Acquired | | | | | | | | | | | | | | | | | | |
Allowance for credit losses: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | | | (2,930 | ) | | | (32 | ) | | | (577 | ) | | | (25 | ) | | | 0 | | | | (3,564 | ) |
Recoveries | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Provision | | | 2,981 | | | | 469 | | | | 740 | | | | 60 | | | | 0 | | | | 4,250 | |
Ending Balance | | $ | 51 | | | $ | 437 | | | $ | 163 | | | $ | 35 | | | $ | 0 | | | $ | 686 | |
|
Nine months ended September 30, 2012 | |
(in thousands) | Commercial | | Commercial | | Residential | | | Consumer | | | Finance | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | | | | | | | | | | | | | | | | | | |
Allowance for credit losses: | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 8,936 | | | $ | 12,662 | | | $ | 4,247 | | | $ | 1,709 | | | $ | 39 | | | $ | 27,593 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | | | (888 | ) | | | (2,332 | ) | | | (931 | ) | | | (580 | ) | | | 0 | | | | (4,731 | ) |
Recoveries | | | 151 | | | | 166 | | | | 29 | | | | 246 | | | | 0 | | | | 592 | |
Provision | | | (197 | ) | | | 1,488 | | | | 1,296 | | | | 629 | | | | (38 | ) | | | 3,178 | |
Ending Balance | | $ | 8,002 | | | $ | 11,984 | | | $ | 4,641 | | | $ | 2,004 | | | $ | 1 | | | $ | 26,632 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
There was no allowance for acquired loans and leases as of September 30, 2012. |
|
At September 30, 2013 and December 31, 2012, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows: |
| | | | | | | | | | | | | | | | | | |
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Finance | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | | | | | | | | | | | | | | | | | | |
30-Sep-13 | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 664 | | | $ | 185 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 849 | |
Collectively evaluated for impairment | | | 7,074 | | | | 10,712 | | | | 5,309 | | | | 1,778 | | | | 0 | | | | 24,873 | |
Ending balance | | $ | 7,738 | | | $ | 10,897 | | | $ | 5,309 | | | $ | 1,778 | | | $ | 0 | | | $ | 25,722 | |
|
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Covered | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Loans |
Acquired | | | | | | | | | | | | | | | | | | |
30-Sep-13 | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 0 | | | $ | 127 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 127 | |
Collectively evaluated for impairment | | | 51 | | | | 310 | | | | 163 | | | | 35 | | | | 0 | | | | 559 | |
Ending balance | | $ | 51 | | | $ | 437 | | | $ | 163 | | | $ | 35 | | | $ | 0 | | | $ | 686 | |
|
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Finance | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | | | | | | | | | | | | | | | | | | |
31-Dec-12 | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Collectively evaluated for impairment | | | 7,533 | | | | 10,184 | | | | 4,981 | | | | 1,940 | | | | 5 | | | | 24,643 | |
Ending balance | | $ | 7,533 | | | $ | 10,184 | | | $ | 4,981 | | | $ | 1,940 | | | $ | 5 | | | $ | 24,643 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
There was no allowance for acquired loans and leases as of December 31, 2012. |
|
The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology as of September 30, 2013 and December 31, 2012 was as follows: |
| | | | | | | | | | | | | | | | | | |
| |
(in thousands) | Commercial | | Commercial | | Residential | | | Consumer | | | Finance | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | | | | | | | | | | | | | | | | | | |
30-Sep-13 | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 5,723 | | | $ | 18,767 | | | $ | 1,047 | | | $ | 0 | | | $ | 0 | | | $ | 25,537 | |
Collectively evaluated for impairment | | | 584,196 | | | | 933,781 | | | | 818,839 | | | | 55,484 | | | | 5,102 | | | | 2,397,402 | |
Total | | $ | 589,919 | | | $ | 952,548 | | | $ | 819,886 | | | $ | 55,484 | | | $ | 5,102 | | | $ | 2,422,939 | |
|
| |
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Covered | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Loans |
Acquired | | | | | | | | | | | | | | | | | | |
30-Sep-13 | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 1,323 | | | $ | 3,441 | | | $ | 85 | | | $ | 0 | | | $ | 0 | | | $ | 4,849 | |
Loans acquired with deteriorated credit quality | | | 3,010 | | | | 14,783 | | | | 13,016 | | | | 0 | | | | 27,363 | | | | 58,172 | |
Collectively evaluated for impairment | | | 122,015 | | | | 417,899 | | | | 94,345 | | | | 1,337 | | | | 0 | | | | 635,596 | |
Total | | $ | 126,348 | | | $ | 436,123 | | | $ | 107,446 | | | $ | 1,337 | | | $ | 27,363 | | | $ | 698,617 | |
|
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Finance | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Leases |
Originated | | | | | | | | | | | | | | | | | | |
31-Dec-12 | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 2,771 | | | | 21,478 | | | $ | 483 | | | $ | 0 | | | $ | 0 | | | $ | 24,732 | |
Collectively evaluated for impairment | | | 521,882 | | | | 790,709 | | | | 733,098 | | | | 58,930 | | | | 4,618 | | | | 2,109,237 | |
Total | | $ | 524,653 | | | $ | 812,187 | | | $ | 733,581 | | | $ | 58,930 | | | $ | 4,618 | | | $ | 2,133,969 | |
|
(in thousands) | | Commercial | | | Commercial | | | Residential | | | Consumer | | | Covered | | | Total | |
and Industrial | Real Estate | Real Estate | and Other | Loans |
Acquired | | | | | | | | | | | | | | | | | | |
31-Dec-12 | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 519 | | | | 1,816 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 2,335 | |
Loans acquired with deteriorated credit quality | | | 7,144 | | | | 24,032 | | | | 17,650 | | | | 0 | | | | 36,251 | | | | 85,077 | |
Collectively evaluated for impairment | | | 159,764 | | | | 465,832 | | | | 105,625 | | | | 1,522 | | | | 1,349 | | | | 734,092 | |
Total | | $ | 167,427 | | | $ | 491,680 | | | $ | 123,275 | | | $ | 1,522 | | | $ | 37,600 | | | $ | 821,504 | |
|
A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans consist of our non-homogenous nonaccrual loans, and all loans restructured in a troubled debt restructuring (TDR). Specific reserves on individually identified impaired loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that are collateral dependent, impairment is measured based on the fair value of the collateral less estimated selling costs, and such impaired amounts are generally charged off. The majority of impaired loans are collateral dependent impaired loans that have limited exposure or require limited specific reserves because of the amount of collateral support with respect to these loans, and previous charge-offs. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured. In these cases, interest is recognized on a cash basis. |
|
Impaired loans are set forth in the tables below as of September 30, 2013 and December 31, 2012. |
|
| 9/30/13 | | | 12/31/12 | |
(in thousands) | Recorded | | | Unpaid | | | Related | | | Recorded Investment | | | Unpaid | | | Related | |
Investment | Principal | Allowance | Principal | Allowance |
| Balance | | Balance | |
Originated loans and leases with no related allowance | |
| | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | $ | 4,185 | | | $ | 6,165 | | | $ | 0 | | | $ | 2,771 | | | $ | 2,891 | | | $ | 0 | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 6,110 | | | | 11,720 | | | | 0 | | | | 6,763 | | | | 12,373 | | | | 0 | |
Commercial real estate other | | | 12,297 | | | | 12,993 | | | | 0 | | | | 14,715 | | | | 16,940 | | | | 0 | |
Residential real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other | | | 1,047 | | | | 1,154 | | | | 0 | | | | 483 | | | | 483 | | | | 0 | |
Subtotal | | $ | 23,639 | | | $ | 32,032 | | | $ | 0 | | | $ | 24,732 | | | $ | 32,687 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Originated loans and leases with related allowance | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | | 1,538 | | | | 1,538 | | | | 664 | | | | 0 | | | | 0 | | | | 0 | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other | | | 360 | | | | 360 | | | | 185 | | | | 0 | | | | 0 | | | | 0 | |
Subtotal | | $ | 1,898 | | | $ | 1,898 | | | $ | 849 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Total | | $ | 25,537 | | | $ | 33,930 | | | $ | 849 | | | $ | 24,732 | | | $ | 32,687 | | | $ | 0 | |
|
| | 9/30/13 | | | 12/31/12 | |
(in thousands) | | Recorded | | | Unpaid | | | Related | | | Recorded | | | Unpaid | | | Related | |
Investment | Principal | Allowance | Investment | Principal | Allowance |
| Balance | | | Balance | |
| | | | | | | | | | | | | | | | | | |
Acquired loans and leases with no related allowance |
|
Commercial and industrial | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | $ | 1,323 | | | $ | 4,174 | | | $ | 0 | | | $ | 519 | | | $ | 519 | | | $ | 0 | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other | | | 2,748 | | | | 2,748 | | | | 0 | | | | 1,816 | | | | 1,861 | | | | 0 | |
Residential real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other | | | 85 | | | | 85 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
Subtotal | | $ | 4,156 | | | $ | 7,007 | | | $ | 0 | | | $ | 2,335 | | | $ | 2,380 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Acquired loans and leases with related allowance | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other | | | 693 | | | | 693 | | | | 127 | | | | 0 | | | | 0 | | | | 0 | |
Subtotal | | $ | 693 | | | $ | 693 | | | $ | 127 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
Total | | $ | 4,849 | | | $ | 7,700 | | | $ | 127 | | | $ | 2,335 | | | $ | 2,380 | | | $ | 0 | |
|
The average recorded investment and interest income recognized on impaired originated loans for the three months ended September 30, 2013 and 2012 was as follows: | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Three Months Ended | | | | | | | | | |
| | 9/30/13 | | | 9/30/12 | | | | | | | | | |
(in thousands) | | Average | | | Interest Income Recognized | | | Average | | | Interest Income Recognized | | | | | | | | | |
Recorded Investment | Recorded Investment | | | | | | | | |
Originated loans and leases with no related allowance | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | | 4,040 | | | | 0 | | | | 2,339 | | | | 0 | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 6,184 | | | | 0 | | | | 10,953 | | | | 0 | | | | | | | | | |
Commercial real estate other | | | 13,918 | | | | 0 | | | | 12,447 | | | | 0 | | | | | | | | | |
Residential real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other | | | 1,047 | | | | 0 | | | | 486 | | | | 0 | | | | | | | | | |
Subtotal | | $ | 25,189 | | | $ | 0 | | | $ | 26,225 | | | $ | 0 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Originated loans and leases with related allowance | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | | 1,544 | | | | 0 | | | | 4,091 | | | | 0 | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other | | | 360 | | | | 0 | | | | 654 | | | | 6 | | | | | | | | | |
Subtotal | | $ | 1,904 | | | $ | 0 | | | $ | 4,745 | | | $ | 6 | | | | | | | | | |
Total | | $ | 27,093 | | | $ | 0 | | | $ | 30,970 | | | $ | 6 | | | | | | | | | |
|
The average recorded investment and interest income recognized on impaired acquired loans for the three months ended September 30, 2013 was as follows: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | | | | | | | | | | | |
| | 9/30/13 | | | | | | | | | | | | | | | | | |
(in thousands) | | Average | | | Interest Income Recognized | | | | | | | | | | | | | | | | | |
Recorded Investment | | | | | | | | | | | | | | | | |
Acquired loans and leases with no related allowance | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | | 1,327 | | | | 0 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other | | | 2,764 | | | | 0 | | | | | | | | | | | | | | | | | |
Residential real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other | | | 85 | | | | 0 | | | | | | | | | | | | | | | | | |
Subtotal | | $ | 4,176 | | | $ | 0 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Acquired loans and leases with related allowance | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other | | | 701 | | | | 0 | | | | | | | | | | | | | | | | | |
Subtotal | | $ | 701 | | | $ | 0 | | | | | | | | | | | | | | | | | |
Total | | $ | 4,877 | | | $ | 0 | | | | | | | | | | | | | | | | | |
|
| | Nine Months Ended | | | Nine Months Ended | | | | | | | | | |
| | 9/30/13 | | | 9/30/12 | | | | | | | | | |
(in thousands) | | Average Recorded Investment | | | Interest Income Recognized | | | Average Recorded Investment | | | Interest Income Recognized | | | | | | | | | |
Originated loans and leases with no related allowance | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | | 4,057 | | | | 0 | | | | 2,347 | | | | 4 | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 6,374 | | | | 0 | | | | 9,732 | | | | 0 | | | | | | | | | |
Commercial real estate other | | | 12,892 | | | | 0 | | | | 12,940 | | | | 0 | | | | | | | | | |
Residential real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other | | | 1,047 | | | | 0 | | | | 461 | | | | 0 | | | | | | | | | |
Subtotal | | $ | 24,370 | | | $ | 0 | | | $ | 25,480 | | | $ | 4 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Originated loans and leases with related allowance | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | | 1,560 | | | | 0 | | | | 4,116 | | | | 0 | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 869 | | | | 0 | | | | | | | | | |
Commercial real estate other | | | 319 | | | | 0 | | | | 696 | | | | 24 | | | | | | | | | |
Subtotal | | $ | 1,879 | | | $ | 0 | | | $ | 5,681 | | | $ | 24 | | | | | | | | | |
Total | | $ | 26,249 | | | $ | 0 | | | $ | 31,161 | | | $ | 28 | | | | | | | | | |
|
| | Nine Months Ended | | | | | | | | | | | | | | | | | |
| | 9/30/13 | | | | | | | | | | | | | | | | | |
(in thousands) | | Average | | | Interest | | | | | | | | | | | | | | | | | |
Recorded Investment | Income | | | | | | | | | | | | | | | | |
| Recognized | | | | | | | | | | | | | | | | |
Acquired loans and leases with no related allowance | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other | | | 2,783 | | | | 5 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other | | | 2,785 | | | | 31 | | | | | | | | | | | | | | | | | |
Residential real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other | | | 85 | | | | 0 | | | | | | | | | | | | | | | | | |
Subtotal | | $ | 5,653 | | | $ | 36 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Acquired loans and leases with related allowance | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other | | | 718 | | | | 4 | | | | | | | | | | | | | | | | | |
Subtotal | | $ | 718 | | | $ | 4 | | | | | | | | | | | | | | | | | |
Total | | $ | 6,371 | | | $ | 40 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Average balances were not calculated on the acquired loan and lease portfolio during the third quarter of 2012. | | | | | | | | | | | | | | | | | |
|
Loans are considered modified in a TDR when, due to a borrower’s financial difficulties, the Company makes a concession(s) to the borrower that it would not otherwise consider. These modifications may include, among others, an extension for the term of the loan, and granting a period when interest-only payments can be made with the principal payments made over the remaining term of the loan or at maturity. |
|
The following tables present information on loans modified in troubled debt restructuring during the periods indicated. |
|
September 30, 2013 | | Three months ended | | | | | |
| | | | | | | | | | | Defaulted TDRs4 | | | | | |
(in thousands) | | Number of | | | Pre- | | | Post- | | | Number of | | | Post- | | | | | |
| | Modification Outstanding Recorded Investment | Loans | Modification Outstanding Recorded Investment | | | | |
Loans | Modification Outstanding Recorded Investment | | | | | | | |
Commercial and Industrial | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other1 | | | 4 | | | $ | 1,275 | | | $ | 1,275 | | | | 0 | | | $ | 0 | | | | | |
Commercial real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other2 | | | 6 | | | | 1,530 | | | | 1,530 | | | | 0 | | | | 0 | | | | | |
Residential real estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other3 | | | 1 | | | | 195 | | | | 195 | | | | 0 | | | | 0 | | | | | |
Total | | | 11 | | | $ | 3,000 | | | $ | 3,000 | | | | 0 | | | $ | 0 | | | | | |
1 Represents the following concessions: extension of term and reduction of rate (3 loans: $1.2 million) and extended term (l loan: $87,000) | | | | | |
2 Represents the following concessions: extension of term and reduction of rate | | | | | |
3 Represents the following concessions: extension of term and reduction of rate | | | | | |
4 TDRs that defaulted during the last three months that were restructured in the prior twelve months. | | | | | |
|
September 30, 2012 | | Three months ended | | | | | |
| | | | | | | | | | | Defaulted TDRs2 | | | | | |
(in thousands) | | Number of | | | Pre- | | | Post- | | | Number of | | | Post- | | | | | |
| | | | | | | | |
Loans | Modification Outstanding Recorded Investment | Modification Outstanding Recorded Investment | Loans | Modification Outstanding Recorded Investment | | | | |
| | | | | | | | | | | | | | | | | | | |
Originated loans and leases | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other1 | | | 2 | | | $ | 4,224 | | | $ | 4,224 | | | | 0 | | | $ | 0 | | | | | |
Residential Real Estate | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgages1 | | | 1 | | | | 146 | | | | 146 | | | | 0 | | | | 0 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 3 | | | $ | 4,370 | | | $ | 4,370 | | | | 0 | | | $ | 0 | | | | | |
1 Represents the following concessions: extension of term and reduction in rate | | | | | |
2 TDRs that defaulted during the last three months that were restructured in the prior twelve months. | | | | |
|
September 30, 2013 | | Nine months ended | | | | | |
| | | | | | | | | | | Defaulted TDRs4 | | | | | |
(in thousands) | | Number of | | | Pre- | | | Post- | | | Number of | | | Post- | | | | | |
| | | | | | | | |
Loans | Modification Outstanding Recorded Investment | Modification Outstanding Recorded Investment | Loans | Modification Outstanding Recorded Investment | | | | |
Commercial and Industrial | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other1 | | | 6 | | | $ | 1,414 | | | $ | 1,414 | | | | 0 | | | $ | 0 | | | | | |
Commercial Real Estate | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate other2 | | | 9 | | | $ | 1,901 | | | $ | 1,901 | | | | 0 | | | $ | 0 | | | | | |
Residential Real Estate | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate other3 | | | 1 | | | | 195 | | | | 195 | | | | | | | | | | | | | |
Total | | | 16 | | | $ | 3,510 | | | $ | 3,510 | | | | 0 | | | $ | 0 | | | | | |
1 Represents the following concessions: extension of term and reduction in rate (5 loans: $1.3 million) and extended term (1 loan: $87,000) | | | | | |
2 Represents the following concessions: extension of term and reduction of rate(8 loans: $1.8 million) and extension of term (1 loan: $129,000) | | | | | |
3 Represents the following concessions: extension of term and reduction of rate | | | | | |
4 TDRs that defaulted during the last nine months that were restructured in the prior twelve months. | | | | | |
|
September 30, 2012 | | Nine months ended | | | | | |
| | | | | | | | | | | Defaulted TDRs2 | | | | | |
(in thousands) | | Number of | | | Pre- | | | Post- | | | Number of | | | Post- | | | | | |
| | | | | | | | |
Loans | Modification Outstanding Recorded Investment | Modification Outstanding Recorded Investment | Loans | Modification Outstanding Recorded Investment | | | | |
Originated loans and leases | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | | | | | | | | | | | | | | | | | |
Commercial and industrial other1 | | | 2 | | | $ | 4,224 | | | $ | 4,224 | | | | 1 | 2 | | $ | 51 | | | | | |
Residential Real Estate | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgages1 | | | 2 | | | | 208 | | | | 208 | | | | 0 | | | | 0 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 4 | | | $ | 4,432 | | | $ | 4,432 | | | | 1 | | | $ | 51 | | | | | |
1 Represents the following concessions: extension of term and reduction in rate | | | | | |
2 TDRs that defaulted during the last six months that were restructured in the prior twelve months. | | | | | |
|
The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of September 30, 2013 and December 31, 2012. | |
| |
30-Sep-13 | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Commercial | | | Commercial | | | Commercial | | | Total | |
| | | | | |
| and Industrial | and Industrial | Real Estate | Real Estate | Real Estate |
| | | | | |
(in thousands) | Other | Agriculture | Other | Agriculture | Construction |
Originated Loans and Leases | | | | | | | | | | | | | | | | | | |
Internal risk grade: | | | | | | | | | | | | | | | | | | |
Pass | | $ | 497,491 | | | $ | 57,231 | | | $ | 830,444 | | | $ | 48,153 | | | $ | 29,169 | | | $ | 1,462,488 | |
Special Mention | | | 22,987 | | | | 123 | | | | 13,150 | | | | 125 | | | | 6,590 | | | | 42,975 | |
Substandard | | | 10,400 | | | | 1,687 | | | | 18,429 | | | | 379 | | | | 6,109 | | | | 37,004 | |
Total | | $ | 530,878 | | | $ | 59,041 | | | $ | 862,023 | | | $ | 48,657 | | | $ | 41,868 | | | $ | 1,542,467 | |
|
30-Sep-13 | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Commercial | | | Commercial | | | Commercial | | | Total | |
| | | | | |
| and Industrial | and Industrial | Real Estate | Real Estate | Real Estate |
| | | | | |
(in thousands) | Other | Agriculture | Other | Agriculture | Construction |
Acquired Loans and Leases | | | | | | | | | | | | | | | | | | |
Internal risk grade: | | | | | | | | | | | | | | | | | | |
Pass | | $ | 103,661 | | | $ | 0 | | | $ | 359,718 | | | $ | 1,161 | | | $ | 31,559 | | | $ | 496,099 | |
Special Mention | | | 11,987 | | | | 0 | | | | 8,145 | | | | 2,023 | | | | 1,784 | | | | 23,939 | |
Substandard | | | 10,700 | | | | 0 | | | | 26,696 | | | | 344 | | | | 4,693 | | | | 42,433 | |
Total | | $ | 126,348 | | | $ | 0 | | | $ | 394,559 | | | $ | 3,528 | | | $ | 38,036 | | | $ | 562,471 | |
|
31-Dec-12 | | | | | | | | | | | | | | | | | | |
| Commercial | | Commercial | | Commercial | | Commercial | | Commercial | | Total | |
| | | | | |
| and Industrial | and Industrial | Real Estate | Real Estate | Real Estate |
| | | | | |
(in thousands) | Other | Agriculture | Other | Agriculture | Construction |
Originated Loans and Leases | |
Internal risk grade: | |
Pass | | $ | 410,255 | | | $ | 75,456 | | | $ | 677,261 | | | $ | 46,317 | | | $ | 26,126 | | | $ | 1,235,415 | |
Special Mention | | | 25,308 | | | | 2,055 | | | | 19,782 | | | | 692 | | | | 8,505 | | | | 56,342 | |
Substandard | | | 11,313 | | | | 266 | | | | 25,230 | | | | 1,300 | | | | 6,974 | | | | 45,083 | |
Total | | $ | 446,876 | | | $ | 77,777 | | | $ | 722,273 | | | $ | 48,309 | | | $ | 41,605 | | | $ | 1,336,840 | |
|
31-Dec-12 | | | | | | | | | | | | | | | | | | |
| Commercial | | Commercial | | Commercial | | Commercial | | Commercial | | Total | |
| | | | | |
| and Industrial | and Industrial | Real Estate | Real Estate | Real Estate |
| | | | | |
(in thousands) | Other | Agriculture | Other | Agriculture | Construction |
Acquired Loans and Leases | |
Internal risk grade: | |
Pass | | $ | 139,719 | | | $ | 0 | | | $ | 415,397 | | | $ | 813 | | | $ | 27,590 | | | $ | 583,519 | |
Special Mention | | | 7,717 | | | | 0 | | | | 10,112 | | | | 2,136 | | | | 5,416 | | | | 25,381 | |
Substandard | | | 14,991 | | | | 0 | | | | 19,850 | | | | 298 | | | | 10,068 | | | | 45,207 | |
Total | | $ | 162,427 | | | $ | 0 | | | $ | 445,359 | | | $ | 3,247 | | | $ | 43,074 | | | $ | 654,107 | |
|
The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of September 30, 2013 and December 31, 2012. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing. | | | | | |
| | | | | |
30-Sep-13 | | | | | | | | | | | | | | | | | | | |
(in thousands) | Residential | | Residential Mortgages | | Consumer | | Consumer | | Total | | | | | |
| | | | | | |
Home Equity | Indirect | Other | | | | |
Originated Loans and Leases | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 164,865 | | | $ | 644,442 | | | $ | 22,346 | | | $ | 32,962 | | | $ | 864,615 | | | | | |
Nonperforming | | | 1,935 | | | | 8,644 | | | | 142 | | | | 34 | | | | 10,755 | | | | | |
Total | | $ | 166,800 | | | $ | 653,086 | | | $ | 22,488 | | | $ | 32,996 | | | $ | 875,370 | | | | | |
|
30-Sep-13 | | | | | | | | | | | | | | | | | | | |
(in thousands) | Residential | | Residential Mortgages | | Consumer | | Consumer | | Total | | | | | |
| | | | | | |
Home Equity | Indirect | Other | | | | |
Acquired Loans and Leases | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 69,816 | | | $ | 35,481 | | | $ | 7 | | | $ | 1,330 | | | $ | 106,634 | | | | | |
Nonperforming | | | 499 | | | | 1,650 | | | | 0 | | | | 0 | | | | 2,149 | | | | | |
Total | | $ | 70,315 | | | $ | 37,131 | | | $ | 7 | | | $ | 1,330 | | | $ | 108,783 | | | | | |
| | | | | |
31-Dec-12 | | | | | |
(in thousands) | Residential | | Residential Mortgages | | Consumer | | Consumer | | Total | | | | | |
| | | | | | |
Home Equity | Indirect | Other | | | | |
Originated Loans and Leases | | | | | |
Performing | | $ | 157,959 | | | $ | 566,542 | | | $ | 26,402 | | | $ | 32,235 | | | $ | 783,138 | | | | | |
Nonperforming | | | 1,761 | | | | 7,319 | | | | 277 | | | | 16 | | | | 9,373 | | | | | |
Total | | $ | 159,720 | | | $ | 573,861 | | | $ | 26,679 | | | $ | 32,251 | | | $ | 792,511 | | | | | |
|
31-Dec-12 | | | | | |
(in thousands) | Residential | | Residential Mortgages | | Consumer | | Consumer | | Total | | | | | |
| | | | | | |
Home Equity | Indirect | Other | | | | |
Acquired Loans and Leases | | | | | |
Performing | | $ | 80,204 | | | $ | 40,810 | | | $ | 24 | | | $ | 1,498 | | | $ | 122,536 | | | | | |
Nonperforming | | | 1,453 | | | | 808 | | | | 0 | | | | 0 | | | | 2,261 | | | | | |
Total | | $ | 81,657 | | | $ | 41,618 | | | $ | 24 | | | $ | 1,498 | | | $ | 124,797 | | | | | |