Loans and Leases | 6 Months Ended |
Jun. 30, 2014 |
Text Block [Abstract] | ' |
Loans and Leases | ' |
Note 4. Loans and Leases |
Summary of Major Loan and Lease Categories |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in thousands) | | At June 30, 2014 | | | At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | $ | 447,993 | | | $ | 422,816 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate-commercial | | | 626,060 | | | | 600,353 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate-construction | | | 76,735 | | | | 90,493 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate-residential secured for business purpose | | | 35,284 | | | | 37,319 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate-residential secured for personal purpose | | | 162,352 | | | | 149,164 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate-home equity secured for personal purpose | | | 98,880 | | | | 95,345 | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans to individuals | | | 31,564 | | | | 40,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financings | | | 108,126 | | | | 105,994 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans and leases held for investment, net of deferred income | | $ | 1,586,994 | | | $ | 1,541,484 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unearned lease income, included in the above table | | $ | (13,742 | ) | | $ | (14,439 | ) | | | | | | | | | | | | | | | | | | | | | | | | |
Net deferred costs, included in the above table | | | 2,832 | | | | 2,744 | | | | | | | | | | | | | | | | | | | | | | | | | |
Overdraft deposits included in the above table | | | 68 | | | | 62 | | | | | | | | | | | | | | | | | | | | | | | | | |
Overdraft deposits are re-classified as loans and are included in the total loans and leases on the balance sheet. |
Age Analysis of Past Due Loans and Leases |
The following presents, by class of loans and leases, an aging of past due loans and leases, loans and leases which are current and the recorded investment in loans and leases 90 days or more past due which are accruing interest at June 30, 2014 and December 31, 2013: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in thousands) | | 30-59 | | | 60-89 | | | 90 Days | | | Total | | | Current | | | Total Loans | | | Recorded | | | | | |
Days | Days | or more | Past Due | and Leases | Investment 90 | | | | |
Past Due | Past Due | Past Due | | Held for | Days or more | | | | |
| | | | Investment | Past Due and | | | | |
| | | | | Accruing | | | | |
| | | | | Interest | | | | |
At June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | $ | 377 | | | $ | 391 | | | $ | 787 | | | $ | 1,555 | | | $ | 446,438 | | | $ | 447,993 | | | $ | — | | | | | |
Real estate—commercial real estate and construction: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 1,363 | | | | — | | | | 923 | | | | 2,286 | | | | 623,774 | | | | 626,060 | | | | — | | | | | |
Construction | | | — | | | | — | | | | 7,185 | | | | 7,185 | | | | 69,550 | | | | 76,735 | | | | — | | | | | |
Real estate—residential and home equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential secured for business purpose | | | 19 | | | | 59 | | | | 654 | | | | 732 | | | | 34,552 | | | | 35,284 | | | | — | | | | | |
Residential secured for personal purpose | | | 492 | | | | 44 | | | | 256 | | | | 792 | | | | 161,560 | | | | 162,352 | | | | — | | | | | |
Home equity secured for personal purpose | | | 101 | | | | 10 | | | | 104 | | | | 215 | | | | 98,665 | | | | 98,880 | | | | — | | | | | |
Loans to individuals | | | 414 | | | | 216 | | | | 216 | | | | 846 | | | | 30,718 | | | | 31,564 | | | | 216 | | | | | |
Lease financings | | | 1,275 | | | | 487 | | | | 624 | | | | 2,386 | | | | 105,740 | | | | 108,126 | | | | 308 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 4,041 | | | $ | 1,207 | | | $ | 10,749 | | | $ | 15,997 | | | $ | 1,570,997 | | | $ | 1,586,994 | | | $ | 524 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | $ | 386 | | | $ | 922 | | | $ | 2,904 | | | $ | 4,212 | | | $ | 418,604 | | | $ | 422,816 | | | $ | 12 | | | | | |
Real estate—commercial real estate and construction: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 148 | | | | 262 | | | | 4,932 | | | | 5,342 | | | | 595,011 | | | | 600,353 | | | | — | | | | | |
Construction | | | — | | | | — | | | | 8,742 | | | | 8,742 | | | | 81,751 | | | | 90,493 | | | | — | | | | | |
Real estate—residential and home equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential secured for business purpose | | | 87 | | | | 276 | | | | 161 | | | | 524 | | | | 36,795 | | | | 37,319 | | | | — | | | | | |
Residential secured for personal purpose | | | 1,370 | | | | — | | | | 617 | | | | 1,987 | | | | 147,177 | | | | 149,164 | | | | — | | | | | |
Home equity secured for personal purpose | | | 278 | | | | 97 | | | | 100 | | | | 475 | | | | 94,870 | | | | 95,345 | | | | 23 | | | | | |
Loans to individuals | | | 445 | | | | 193 | | | | 319 | | | | 957 | | | | 39,043 | | | | 40,000 | | | | 319 | | | | | |
Lease financings | | | 2,182 | | | | 455 | | | | 389 | | | | 3,026 | | | | 102,968 | | | | 105,994 | | | | 59 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 4,896 | | | $ | 2,205 | | | $ | 18,164 | | | $ | 25,265 | | | $ | 1,516,219 | | | $ | 1,541,484 | | | $ | 413 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Non-Performing Loans and Leases |
The following presents, by class of loans and leases, non-performing loans and leases at June 30, 2014 and December 31, 2013: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | At June 30, 2014 | | | At December 31, 2013 | |
(Dollars in thousands) | | Nonaccrual | | | Accruing | | | Loans and | | | Total Non- | | | Nonaccrual | | | Accruing | | | Loans and | | | Total Non- | |
Loans and | Troubled | Leases | Performing | Loans and | Troubled | Leases | Performing |
Leases* | Debt | 90 Days | Loans and | Leases* | Debt | 90 Days | Loans and |
| Restructured | or more | Leases | | Restructured | or more | Leases |
| Loans and | Past Due | | | Loans and | Past Due | |
| Lease | and | | | Lease | and | |
| Modifications | Accruing | | | Modifications | Accruing | |
| | Interest | | | | Interest | |
Loans held for sale ** | | $ | 532 | | | $ | — | | | $ | — | | | $ | 532 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Loans and leases held for investment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | 3,182 | | | | 1,238 | | | | — | | | | 4,420 | | | | 4,253 | | | | 1,329 | | | | 12 | | | | 5,594 | |
Real estate—commercial real estate and construction: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 3,901 | | | | 2,623 | | | | — | | | | 6,524 | | | | 8,091 | | | | 4,271 | | | | — | | | | 12,362 | |
Construction | | | 7,996 | | | | 2,479 | | | | — | | | | 10,475 | | | | 9,159 | | | | 2,307 | | | | — | | | | 11,466 | |
Real estate—residential and home equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential secured for business purpose | | | 927 | | | | — | | | | — | | | | 927 | | | | 224 | | | | — | | | | — | | | | 224 | |
Residential secured for personal purpose | | | 783 | | | | — | | | | — | | | | 783 | | | | 1,101 | | | | — | | | | — | | | | 1,101 | |
Home equity secured for personal purpose | | | 104 | | | | — | | | | — | | | | 104 | | | | 77 | | | | — | | | | 23 | | | | 100 | |
Loans to individuals | | | 1 | | | | — | | | | 216 | | | | 217 | | | | — | | | | 36 | | | | 319 | | | | 355 | |
Lease financings | | | 316 | | | | — | | | | 308 | | | | 624 | | | | 330 | | | | — | | | | 59 | | | | 389 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 17,742 | | | $ | 6,340 | | | $ | 524 | | | $ | 24,606 | | | $ | 23,235 | | | $ | 7,943 | | | $ | 413 | | | $ | 31,591 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
* | Includes nonaccrual troubled debt restructured loans and lease modifications of $2.2 million and $1.6 million at June 30, 2014 and December 31, 2013, respectively. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
** | Includes real estate construction loan of $532 thousand at June 30, 2014. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Credit Quality Indicators |
The following tables present by class, the recorded investment in loans and leases held for investment by credit quality indicator at June 30, 2014 and December 31, 2013. |
The Corporation employs a ten (10) grade risk rating system related to the credit quality of commercial loans and residential real estate loans secured for a business purpose of which the first six categories are pass categories (credits not adversely rated). The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating. Loans with risk ratings of one through five are reviewed based on the relationship dollar amount with the borrower: loans with a relationship total of $2.5 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.5 million but greater than $500 thousand are reviewed annually based on the borrower’s fiscal year; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with risk ratings of six are also reviewed based on the relationship dollar amount with the borrower: loans with a relationship balance of $2.0 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.0 million but greater than $500 thousand are reviewed annually; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with risk ratings of seven are reviewed at least quarterly, and as often as monthly, at management’s discretion. Loans with risk ratings of eight through ten are reviewed monthly. |
|
1. | Cash Secured—No credit risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2. | Fully Secured—Negligible credit risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
3. | Strong—Minimal credit risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
4. | Satisfactory—Nominal credit risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
5. | Acceptable—Moderate credit risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
6. | Pre-Watch—Marginal, but stable credit risk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
7. | Special Mention—Potential weakness | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
8. | Substandard—Well-defined weakness | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
9. | Doubtful—Collection in-full improbable | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
10 | Loss—Considered uncollectible | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Commercial Credit Exposure Credit Risk by Internally Assigned Grades |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in thousands) | | Commercial, | | | Real Estate— | | | Real Estate— | | | Real Estate— | | | Total | | | | | | | | | | | | | |
Financial and | Commercial | Construction | Residential Secured | | | | | | | | | | | | |
Agricultural | | | for Business Purpose | | | | | | | | | | | | |
At June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grade: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
1. Cash secured/ 2. Fully secured | | $ | 4,533 | | | $ | 1,858 | | | $ | 3,489 | | | $ | — | | | $ | 9,880 | | | | | | | | | | | | | |
3. Strong | | | 7,574 | | | | 9,135 | | | | 3,954 | | | | — | | | | 20,663 | | | | | | | | | | | | | |
4. Satisfactory | | | 28,620 | | | | 16,610 | | | | 8,689 | | | | 247 | | | | 54,166 | | | | | | | | | | | | | |
5. Acceptable | | | 276,339 | | | | 417,051 | | | | 44,643 | | | | 24,955 | | | | 762,988 | | | | | | | | | | | | | |
6. Pre-watch | | | 66,948 | | | | 115,956 | | | | 4,307 | | | | 4,675 | | | | 191,886 | | | | | | | | | | | | | |
7. Special Mention | | | 13,439 | | | | 12,660 | | | | 2,053 | | | | 1,740 | | | | 29,892 | | | | | | | | | | | | | |
8. Substandard | | | 50,540 | | | | 52,790 | | | | 9,600 | | | | 3,667 | | | | 116,597 | | | | | | | | | | | | | |
9. Doubtful | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | |
10.Loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 447,993 | | | $ | 626,060 | | | $ | 76,735 | | | $ | 35,284 | | | $ | 1,186,072 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grade: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
1. Cash secured/ 2. Fully secured | | $ | 4,763 | | | $ | 2,014 | | | $ | 1,682 | | | $ | — | | | $ | 8,459 | | | | | | | | | | | | | |
3. Strong | | | 6,051 | | | | 8,515 | | | | 4,300 | | | | — | | | | 18,866 | | | | | | | | | | | | | |
4. Satisfactory | | | 34,650 | | | | 17,758 | | | | 1,500 | | | | 261 | | | | 54,169 | | | | | | | | | | | | | |
5. Acceptable | | | 251,203 | | | | 384,061 | | | | 54,464 | | | | 26,694 | | | | 716,422 | | | | | | | | | | | | | |
6. Pre-watch | | | 84,201 | | | | 113,181 | | | | 16,084 | | | | 5,884 | | | | 219,350 | | | | | | | | | | | | | |
7. Special Mention | | | 10,095 | | | | 19,445 | | | | — | | | | 1,841 | | | | 31,381 | | | | | | | | | | | | | |
8. Substandard | | | 31,508 | | | | 55,331 | | | | 12,463 | | | | 2,639 | | | | 101,941 | | | | | | | | | | | | | |
9. Doubtful | | | 345 | | | | 48 | | | | — | | | | — | | | | 393 | | | | | | | | | | | | | |
10.Loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 422,816 | | | $ | 600,353 | | | $ | 90,493 | | | $ | 37,319 | | | $ | 1,150,981 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Credit Exposure—Real Estate—Residential Secured for Personal Purpose, Real Estate—Home Equity Secured for Personal Purpose, Loans to individuals, Lease Financing Credit Risk Profile by Payment Activity |
The Corporation monitors the credit risk profile by payment activity for the following classifications of loans and leases: residential real estate loans secured for a personal purpose, home equity loans secured for a personal purpose, loans to individuals and lease financings. Nonperforming loans and leases are loans past due 90 days or more, loans and leases on nonaccrual of interest and troubled debt restructured loans and lease modifications. Performing loans and leases are reviewed only if the loan becomes 60 days or more past due. Nonperforming loans and leases are reviewed monthly. Performing loans and leases have a nominal to moderate risk of loss. Nonperforming loans and leases are loans or leases with a well-defined weakness and where collection in-full is improbable. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in thousands) | | Real Estate— | | | Real Estate— | | | Loans to | | | Lease | | | Total | | | | | | | | | | | | | |
Residential | Home Equity | Individuals | Financing | | | | | | | | | | | | |
Secured for | Secured for | | | | | | | | | | | | | | |
Personal Purpose | Personal Purpose | | | | | | | | | | | | | | |
At June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 161,569 | | | $ | 98,776 | | | $ | 31,347 | | | $ | 107,502 | | | $ | 399,194 | | | | | | | | | | | | | |
Nonperforming | | | 783 | | | | 104 | | | | 217 | | | | 624 | | | | 1,728 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 162,352 | | | $ | 98,880 | | | $ | 31,564 | | | $ | 108,126 | | | $ | 400,922 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 148,063 | | | $ | 95,245 | | | $ | 39,645 | | | $ | 105,605 | | | $ | 388,558 | | | | | | | | | | | | | |
Nonperforming | | | 1,101 | | | | 100 | | | | 355 | | | | 389 | | | | 1,945 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 149,164 | | | $ | 95,345 | | | $ | 40,000 | | | $ | 105,994 | | | $ | 390,503 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Risks associated with lending activities include, among other things, the impact of changes in interest rates and economic conditions, which may adversely impact the ability of borrowers to repay outstanding loans, and impact the value of the associated collateral. |
Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans with a business purpose are generally perceived as having more risk of default than residential real estate loans with a personal purpose and consumer loans. These types of loans involve larger loan balances to a single borrower or groups of related borrowers. Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful development of their properties and factors affecting residential real estate borrowers. |
|
Commercial, financial and agricultural business loans are typically based on the borrowers’ ability to repay the loans from the cash flow of their businesses. These loans may involve greater risk because the availability of funds to repay each loan depends substantially on the success of the business itself. In addition, the collateral securing the loans often depreciates over time, is difficult to appraise and liquidate and fluctuates in value based on the success of the business. |
Risk of loss on a construction loan depends largely upon whether our initial estimate of the property’s value at completion of construction equals or exceeds the cost of the property construction (including interest). During the construction phase, a number of factors can result in delays and cost overruns. If estimates of value are inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan or by seizure of collateral. Included in real estate-construction is track development financing. Risk factors related to track development financing include the demand for residential housing and the real estate valuation market. When projects move slower than anticipated, the properties may have significantly lower values than when the original underwriting was completed, resulting in lower collateral values to support the loan. Extended time frames also cause the interest carrying cost for a project to be higher than the builder projected, negatively impacting the builder’s profit and cash flow and, therefore, their ability to make principal and interest payments. |
Commercial real estate loans and residential real estate loans with a business purpose secured by owner-occupied properties are dependent upon the successful operation of the borrower’s business. If the operating company suffers difficulties in terms of sales volume and/or profitability, the borrower’s ability to repay the loan may be impaired. Loans secured by properties where repayment is dependent upon payment of rent by third party tenants or the sale of the property may be impacted by loss of tenants, lower lease rates needed to attract new tenants or the inability to sell a completed project in a timely fashion and at a profit. |
Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans secured for a business purpose are more susceptible to a risk of loss during a downturn in the business cycle. The Corporation has strict underwriting, review, and monitoring procedures in place, however, these procedures cannot eliminate all of the risks related to these loans. |
The Corporation focuses on both assessing the borrower’s capacity and willingness to repay and on obtaining sufficient collateral. Commercial, financial and agricultural loans are generally secured by the borrower’s assets and by personal guarantees. Commercial real estate and residential real estate loans secured for a business purpose are originated primarily within the Southeastern Pennsylvania market area at conservative loan-to-value ratios and often with a guarantee of the borrowers. Management closely monitors the composition and quality of the total commercial loan portfolio to ensure that any credit concentrations by borrower or industry are closely monitored. |
The Corporation originates fixed-rate and adjustable-rate real estate-residential mortgage loans that are secured by the underlying 1- to 4-family residential properties for personal purposes. Credit risk exposure in this area of lending is minimized by the evaluation of the credit worthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to underwriting policies that emphasize conservative loan-to-value ratios of generally no more than 80%. Residential mortgage loans granted in excess of the 80% loan-to-value ratio criterion are generally insured by private mortgage insurance. |
In the real estate-home equity loan portfolio secured for a personal purpose, credit exposure is minimized by the evaluation of the creditworthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to the Corporation’s underwriting policies. Combined loan-to-value ratios are generally limited to 80%, but increased to 85% for the Corporation’s strongest profile borrower. Other credit considerations and compensating factors may warrant higher combined loan-to-value ratios. |
Credit risk for direct consumer loans is controlled by strict adherence to conservative underwriting standards that consider debt-to-income levels and the creditworthiness of the borrower and, if secured, collateral values. These loans are included within the portfolio of loans to individuals. |
|
The primary risks that are involved with lease financing receivables are credit underwriting and borrower industry concentrations. The Corporation has strict underwriting, review, and monitoring procedures in place to mitigate this risk. Risk also lies in the residual value of the underlying equipment. Residual values are subject to judgments as to the value of the underlying equipment that can be affected by changes in economic and market conditions and the financial viability of the residual guarantors and insurers. To the extent not guaranteed or assumed by a third party, or otherwise insured against, the Corporation bears the risk of ownership of the leased assets. This includes the risk that the actual value of the leased assets at the end of the lease term will be less than the residual value. The Corporation greatly reduces this risk primarily by using $1.00 buyout leases, in which the entire cost of the leased equipment is included in the contractual payments, leaving no residual payment at the end of the lease terms. |
Reserve for Loan and Lease Losses and Recorded Investment in Loans and Leases |
The following presents, by portfolio segment, a summary of the activity in the reserve for loan and lease losses, the balance in the reserve for loan and lease losses disaggregated on the basis of impairment method and the recorded investment in loans and leases disaggregated on the basis of impairment method for the three and six months ended June 30, 2014 and 2013: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in thousands) | | Commercial, | | | Real Estate— | | | Real Estate— | | | Real Estate— | | | Loans to | | | Lease | | | Unallocated | | | Total | |
Financial | Commercial | Residential | Residential | Individuals | Financings |
and | and | Secured for | and Home | | |
Agricultural | Construction | Business | Equity | | |
| | Purpose | Secured for | | |
| | | Personal | | |
| | | Purpose | | |
Three Months Ended June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reserve for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 9,547 | | | $ | 9,247 | | | $ | 1,056 | | | $ | 1,221 | | | $ | 598 | | | $ | 1,295 | | | $ | 1,603 | | | $ | 24,567 | |
Charge-offs | | | (250 | ) | | | (1,251 | ) | | | (98 | ) | | | (10 | ) | | | (267 | ) | | | (143 | ) | | | N/A | | | | (2,019 | ) |
Recoveries | | | 63 | | | | — | | | | 45 | | | | 26 | | | | 81 | | | | 80 | | | | N/A | | | | 295 | |
Provision (recovery of provision) | | | 354 | | | | 1,267 | | | | 22 | | | | 11 | | | | (7 | ) | | | (131 | ) | | | (265 | ) | | | 1,251 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 9,714 | | | $ | 9,263 | | | $ | 1,025 | | | $ | 1,248 | | | $ | 405 | | | $ | 1,101 | | | $ | 1,338 | | | $ | 24,094 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended June 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reserve for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 11,883 | | | $ | 8,032 | | | $ | 570 | | | $ | 792 | | | $ | 628 | | | $ | 1,358 | | | $ | 1,959 | | | $ | 25,222 | |
Charge-offs | | | (90 | ) | | | (3,691 | ) | | | (24 | ) | | | (23 | ) | | | (224 | ) | | | (267 | ) | | | N/A | | | | (4,319 | ) |
Recoveries | | | 39 | | | | 42 | | | | — | | | | 1 | | | | 78 | | | | 209 | | | | N/A | | | | 369 | |
(Recovery of provision) provision | | | (437 | ) | | | 4,279 | | | | 40 | | | | 314 | | | | 211 | | | | (88 | ) | | | (873 | ) | | | 3,446 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 11,395 | | | $ | 8,662 | | | $ | 586 | | | $ | 1,084 | | | $ | 693 | | | $ | 1,212 | | | $ | 1,086 | | | $ | 24,718 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Six Months Ended June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reserve for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 9,789 | | | $ | 8,780 | | | $ | 1,062 | | | $ | 1,284 | | | $ | 694 | | | $ | 1,285 | | | $ | 1,600 | | | $ | 24,494 | |
Charge-offs | | | (1,689 | ) | | | (1,308 | ) | | | (114 | ) | | | (90 | ) | | | (490 | ) | | | (290 | ) | | | N/A | | | | (3,981 | ) |
Recoveries | | | 109 | | | | 370 | | | | 48 | | | | 27 | | | | 159 | | | | 142 | | | | N/A | | | | 855 | |
Provision (recovery of provision) | | | 1,505 | | | | 1,421 | | | | 29 | | | | 27 | | | | 42 | | | | (36 | ) | | | (262 | ) | | | 2,726 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 9,714 | | | $ | 9,263 | | | $ | 1,025 | | | $ | 1,248 | | | $ | 405 | | | $ | 1,101 | | | $ | 1,338 | | | $ | 24,094 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Six Months Ended June 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reserve for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 11,594 | | | $ | 7,507 | | | $ | 639 | | | $ | 980 | | | $ | 679 | | | $ | 1,326 | | | $ | 2,021 | | | $ | 24,746 | |
Charge-offs | | | (1,161 | ) | | | (4,073 | ) | | | (74 | ) | | | (27 | ) | | | (404 | ) | | | (426 | ) | | | N/A | | | | (6,165 | ) |
Recoveries | | | 87 | | | | 48 | | | | 8 | | | | 3 | | | | 112 | | | | 359 | | | | N/A | | | | 617 | |
Provision (recovery of provision) | | | 875 | | | | 5,180 | | | | 13 | | | | 128 | | | | 306 | | | | (47 | ) | | | (935 | ) | | | 5,520 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 11,395 | | | $ | 8,662 | | | $ | 586 | | | $ | 1,084 | | | $ | 693 | | | $ | 1,212 | | | $ | 1,086 | | | $ | 24,718 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N/A – Not applicable |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in thousands) | | Commercial, | | | Real Estate— | | | Real Estate— | | | Real Estate— | | | Loans to | | | Lease | | | Unallocated | | | Total | |
Financial | Commercial | Residential | Residential | Individuals | Financings |
and | and | Secured for | and Home | | |
Agricultural | Construction | Business | Equity | | |
| | Purpose | Secured for | | |
| | | Personal | | |
| | | Purpose | | |
At June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reserve for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 680 | | | $ | 8 | | | $ | 456 | | | $ | — | | | $ | — | | | $ | — | | | $ | N/A | | | $ | 1,144 | |
Ending balance: collectively evaluated for impairment | | | 9,034 | | | | 9,255 | | | | 569 | | | | 1,248 | | | | 405 | | | | 1,101 | | | | 1,338 | | | | 22,950 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending balance | | $ | 9,714 | | | $ | 9,263 | | | $ | 1,025 | | | $ | 1,248 | | | $ | 405 | | | $ | 1,101 | | | $ | 1,338 | | | $ | 24,094 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans and leases held for investment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 14,800 | | | $ | 34,259 | | | $ | 2,477 | | | $ | 887 | | | $ | 1 | | | $ | — | | | | | | | $ | 52,424 | |
Ending balance: collectively evaluated for impairment | | | 433,193 | | | | 668,536 | | | | 32,807 | | | | 260,345 | | | | 31,563 | | | | 108,126 | | | | | | | | 1,534,570 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending balance | | $ | 447,993 | | | $ | 702,795 | | | $ | 35,284 | | | $ | 261,232 | | | $ | 31,564 | | | $ | 108,126 | | | | | | | $ | 1,586,994 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At June 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Reserve for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 230 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | N/A | | | $ | 230 | |
Ending balance: collectively evaluated for impairment | | | 11,165 | | | | 8,662 | | | | 586 | | | | 1,084 | | | | 693 | | | | 1,212 | | | | 1,086 | | | | 24,488 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending balance | | $ | 11,395 | | | $ | 8,662 | | | $ | 586 | | | $ | 1,084 | | | $ | 693 | | | $ | 1,212 | | | $ | 1,086 | | | $ | 24,718 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans and leases held for investment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 3,146 | | | $ | 34,471 | | | $ | 169 | | | $ | 730 | | | $ | 38 | | | $ | — | | | | | | | $ | 38,554 | |
Ending balance: collectively evaluated for impairment | | | 436,761 | | | | 629,956 | | | | 32,160 | | | | 227,381 | | | | 43,560 | | | | 91,621 | | | | | | | | 1,461,439 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending balance | | $ | 439,907 | | | $ | 664,427 | | | $ | 32,329 | | | $ | 228,111 | | | $ | 43,598 | | | $ | 91,621 | | | | | | | $ | 1,499,993 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
N/A – Not applicable |
Impaired Loans |
The following presents, by class of loans, the recorded investment and unpaid principal balance of impaired loans, the amounts of the impaired loans for which there is not an allowance for credit losses and the amounts for which there is an allowance for credit losses at June 30, 2014 and December 31, 2013: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | At June 30, 2014 | | | At December 31, 2013 | | | | | | | | | |
(Dollars in thousands) | | Recorded | | | Unpaid | | | Related | | | Recorded | | | Unpaid | | | Related | | | | | | | | | |
Investment | Principal | Allowance | Investment | Principal | Allowance | | | | | | | | |
| Balance | | | Balance | | | | | | | | | |
Impaired loans with no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans held for sale | | $ | 532 | | | $ | 2,987 | | | | | | | $ | — | | | $ | — | | | | | | | | | | | | | |
Loans held for investment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | 13,121 | | | | 13,865 | | | | | | | | 10,890 | | | | 11,749 | | | | | | | | | | | | | |
Real estate—commercial real estate | | | 21,522 | | | | 23,587 | | | | | | | | 28,883 | | | | 35,700 | | | | | | | | | | | | | |
Real estate—construction | | | 11,292 | | | | 11,639 | | | | | | | | 12,357 | | | | 14,540 | | | | | | | | | | | | | |
Real estate—residential secured for business purpose | | | 901 | | | | 914 | | | | | | | | 224 | | | | 235 | | | | | | | | | | | | | |
Real estate—residential secured for personal purpose | | | 783 | | | | 803 | | | | | | | | 131 | | | | 131 | | | | | | | | | | | | | |
Real estate—home equity secured for personal purpose | | | 104 | | | | 104 | | | | | | | | 77 | | | | 77 | | | | | | | | | | | | | |
Loans to individuals | | | 1 | | | | 1 | | | | | | | | 36 | | | | 54 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with no allowance recorded | | $ | 48,256 | | | $ | 53,900 | | | | | | | $ | 52,598 | | | $ | 62,486 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans with an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | $ | 1,679 | | | $ | 1,679 | | | $ | 680 | | | $ | 3,215 | | | $ | 3,272 | | | $ | 2,398 | | | | | | | | | |
Real estate—commercial real estate | | | 1,445 | | | | 1,445 | | | | 8 | | | | — | | | | — | | | | — | | | | | | | | | |
Real estate—residential secured for business purpose | | | 1,576 | | | | 1,576 | | | | 456 | | | | 1,550 | | | | 1,550 | | | | 501 | | | | | | | | | |
Real estate—residential secured for personal purpose | | | — | | | | — | | | | — | | | | 970 | | | | 976 | | | | 64 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with an allowance recorded | | $ | 4,700 | | | $ | 4,700 | | | $ | 1,144 | | | $ | 5,735 | | | $ | 5,798 | | | $ | 2,963 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | At June 30, 2014 | | | At December 31, 2013 | | | | | | | | | |
(Dollars in thousands) | | Recorded | | | Unpaid | | | Related | | | Recorded | | | Unpaid | | | Related | | | | | | | | | |
Investment | Principal | Allowance | Investment | Principal | Allowance | | | | | | | | |
| Balance | | | Balance | | | | | | | | | |
Total impaired loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans held for sale | | $ | 532 | | | $ | 2,987 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | | | | | |
Loans held for investment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | 14,800 | | | | 15,544 | | | | 680 | | | | 14,105 | | | | 15,021 | | | | 2,398 | | | | | | | | | |
Real estate—commercial real estate | | | 22,967 | | | | 25,032 | | | | 8 | | | | 28,883 | | | | 35,700 | | | | — | | | | | | | | | |
Real estate—construction | | | 11,292 | | | | 11,639 | | | | — | | | | 12,357 | | | | 14,540 | | | | — | | | | | | | | | |
Real estate—residential secured for business purpose | | | 2,477 | | | | 2,490 | | | | 456 | | | | 1,774 | | | | 1,785 | | | | 501 | | | | | | | | | |
Real estate—residential secured for personal purpose | | | 783 | | | | 803 | | | | — | | | | 1,101 | | | | 1,107 | | | | 64 | | | | | | | | | |
Real estate—home equity secured for personal purpose | | | 104 | | | | 104 | | | | — | | | | 77 | | | | 77 | | | | — | | | | | | | | | |
Loans to individuals | | | 1 | | | | 1 | | | | — | | | | 36 | | | | 54 | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 52,956 | | | $ | 58,600 | | | $ | 1,144 | | | $ | 58,333 | | | $ | 68,284 | | | $ | 2,963 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans includes nonaccrual loans and leases, accruing troubled debt restructured loans and lease modifications and other accruing impaired loans for which it is probable that not all principal and interest payments due will be collectible in accordance with the contractual terms. These loans are individually measured to determine the amount of potential impairment. The loans are reviewed for impairment based on the fair value of the collateral for collateral dependent loans and for certain loans based on discounted cash flows using the loans’ initial effective interest rates. Impaired loans included other accruing impaired loans of $29.2 million and $27.5 million at June 30, 2014 and December 31, 2013, respectively. Specific reserves on other accruing impaired loans were $674 thousand and $1.6 million at June 30, 2014 and December 31, 2013, respectively. |
The following presents by class of loans, the average recorded investment in impaired loans and an analysis of interest on impaired loans. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Therefore, interest income on accruing impaired loans is recognized using the accrual method. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2014 | | | Three Months Ended June 30, 2013 | | | | | | | | | |
(Dollars in thousands) | | Average | | | Interest | | | Additional | | | Average | | | Interest | | | Additional | | | | | | | | | |
Recorded | Income | Interest Income | Recorded | Income | Interest Income | | | | | | | | |
Investment | Recognized* | That Would | Investment | Recognized* | That Would | | | | | | | | |
| | Have Been | | | Have Been | | | | | | | | |
| | Recognized | | | Recognized | | | | | | | | |
| | Under Original | | | Under Original | | | | | | | | |
| | Terms | | | Terms | | | | | | | | |
Loans held for investment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | $ | 13,296 | | | $ | 124 | | | $ | 51 | | | $ | 2,469 | | | $ | 8 | | | $ | 23 | | | | | | | | | |
Real estate—commercial real estate | | | 23,666 | | | | 253 | | | | 72 | | | | 21,434 | | | | 147 | | | | 191 | | | | | | | | | |
Real estate—construction | | | 12,357 | | | | 41 | | | | 123 | | | | 15,675 | | | | 28 | | | | 185 | | | | | | | | | |
Real estate—residential secured for business purpose | | | 2,574 | | | | 17 | | | | 15 | | | | 169 | | | | — | | | | 2 | | | | | | | | | |
Real estate—residential secured for personal purpose | | | 762 | | | | — | | | | 18 | | | | 751 | | | | — | | | | 12 | | | | | | | | | |
Real estate—home equity secured for personal purpose | | | 90 | | | | — | | | | 1 | | | | 6 | | | | — | | | | — | | | | | | | | | |
Loans to individuals | | | 2 | | | | — | | | | — | | | | 38 | | | | 1 | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 52,747 | | | $ | 435 | | | $ | 280 | | | $ | 40,542 | | | $ | 184 | | | $ | 413 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
* | There was no interest income recognized on a cash basis for nonaccrual loans for the three months ended June 30, 2014 and 2013; includes interest income recognized on the accrual method for accruing impaired loans of $435 thousand and $184 thousand for the three months ended June 30, 2014 and 2013, respectively. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2014 | | | Six Months Ended June 30, 2013 | | | | | | | | | |
(Dollars in thousands) | | Average | | | Interest | | | Additional | | | Average | | | Interest | | | Additional | | | | | | | | | |
Recorded | Income | Interest Income | Recorded | Income | Interest Income | | | | | | | | |
Investment | Recognized* | That Would | Investment | Recognized* | That Would | | | | | | | | |
| | Have Been | | | Have Been | | | | | | | | |
| | Recognized | | | Recognized | | | | | | | | |
| | Under Original | | | Under Original | | | | | | | | |
| | Terms | | | Terms | | | | | | | | |
Loans held for investment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | $ | 13,794 | | | $ | 251 | | | $ | 116 | | | $ | 2,731 | | | $ | 16 | | | $ | 62 | | | | | | | | | |
Real estate—commercial real estate | | | 24,884 | | | | 535 | | | | 166 | | | | 22,732 | | | | 302 | | | | 416 | | | | | | | | | |
Real estate—construction | | | 12,412 | | | | 83 | | | | 247 | | | | 15,758 | | | | 56 | | | | 369 | | | | | | | | | |
Real estate—residential secured for business purpose | | | 2,272 | | | | 33 | | | | 35 | | | | 178 | | | | — | | | | 5 | | | | | | | | | |
Real estate—residential secured for personal purpose | | | 888 | | | | — | | | | 32 | | | | 773 | | | | — | | | | 24 | | | | | | | | | |
Real estate—home equity secured for personal purpose | | | 84 | | | | — | | | | 2 | | | | 3 | | | | — | | | | — | | | | | | | | | |
Loans to individuals | | | 6 | | | | — | | | | — | | | | 42 | | | | 2 | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 54,340 | | | $ | 902 | | | $ | 598 | | | $ | 42,217 | | | $ | 376 | | | $ | 876 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
* | Includes interest income recognized on a cash basis for nonaccrual loans of $23 thousand and $6 thousand for the six months ended June 30, 2014 and 2013, respectively and interest income recognized on the accrual method for accruing impaired loans of $879 thousand and $370 thousand for the six months ended June 30, 2014 and 2013, respectively. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Troubled Debt Restructured Loans |
The following presents, by class of loans, information regarding accruing and nonaccrual loans that were restructured: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2014 | | | Three Months Ended June 30, 2013 | |
(Dollars in thousands) | | Number | | | Pre- | | | Post- | | | Related | | | Number | | | Pre- | | | Post- | | | Related | |
of | Restructuring | Restructuring | Allowance | of | Restructuring | Restructuring | Allowance |
Loans | Outstanding | Outstanding | | Loans | Outstanding | Outstanding | |
| Recorded | Recorded | | | Recorded | Recorded | |
| Investment | Investment | | | Investment | Investment | |
Accruing Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | — | | | $ | — | | | $ | — | | | $ | — | | | | 1 | | | $ | 1,000 | | | $ | 1,000 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | $ | — | | | $ | — | | | | 1 | | | $ | 1,000 | | | $ | 1,000 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | $ | — | | | $ | — | | | | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended June 30, 2014 | | | Six Months Ended June 30, 2013 | |
(Dollars in thousands) | | Number | | | Pre- | | | Post- | | | Related | | | Number | | | Pre- | | | Post- | | | Related | |
of | Restructuring | Restructuring | Allowance | of | Restructuring | Restructuring | Allowance |
Loans | Outstanding | Outstanding | | Loans | Outstanding | Outstanding | |
| Recorded | Recorded | | | Recorded | Recorded | |
| Investment | Investment | | | Investment | Investment | |
Accruing Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | — | | | $ | — | | | $ | — | | | $ | — | | | | 1 | | | $ | 1,000 | | | $ | 1,000 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | $ | — | | | $ | — | | | | 1 | | | $ | 1,000 | | | $ | 1,000 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate—commercial real estate | | | 1 | | | $ | 50 | | | $ | 50 | | | $ | — | | | | — | | | $ | — | | | $ | — | | | $ | — | |
Real estate—residential secured for business purpose | | | 2 | | | | 688 | | | | 688 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 3 | | | $ | 738 | | | $ | 738 | | | $ | — | | | | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Corporation grants concessions primarily related to extensions of interest-only payment periods and an occasional payment modification. These modifications typically are for a short-term basis up to one year. Our goal when restructuring a credit is to afford the customer a reasonable period of time to provide cash flow relief to customers experiencing cash flow difficulties. Accruing troubled debt restructured loans are primarily comprised of loans on which interest is being accrued under the restructured terms, and the loans are current or less than ninety days past due. |
|
The following presents, by class of loans, information regarding the types of concessions granted on accruing and nonaccrual loans that were restructured during the three and six months ended June 30, 2014 and 2013. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Interest Only Term | | | Interest Rate | | | Maturity Date | | | Total Concessions | |
Extension | Reduction | Extension | Granted |
(Dollars in thousands) | | No. of | | | Amount | | | No. of | | | Amount | | | No. of | | | Amount | | | No. of | | | Amount | |
Loans | Loans | Loans | Loans |
Three Months Ended June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Accruing Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended June 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Accruing Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | 1 | | | $ | 1,000 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 1 | | | $ | 1,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1 | | | $ | 1,000 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 1 | | | $ | 1,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Six Months Ended June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Accruing Troubled Debt Restructured Loans: | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate—commercial real estate | | | — | | | $ | — | | | | 1 | | | $ | 50 | | | | — | | | $ | — | | | | 1 | | | $ | 50 | |
Real estate—residential secured for business purpose | | | — | | | | — | | | | 1 | | | | 55 | | | | 1 | | | | 633 | | | | 2 | | | | 688 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | 2 | | | $ | 105 | | | | 1 | | | $ | 633 | | | | 3 | | | $ | 738 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Six Months Ended June 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Accruing Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | 1 | | | $ | 1,000 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 1 | | | $ | 1,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1 | | | $ | 1,000 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 1 | | | $ | 1,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following presents, by class of loans, information regarding accruing and nonaccrual troubled debt restructured loans, for which there were payment defaults within twelve months of the restructuring date: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | 2014 | | | 2013 | | | 2014 | | | 2013 | |
(Dollars in thousands) | | Number | | | Recorded | | | Number | | | Recorded | | | Number | | | Recorded | | | Number | | | Recorded | |
of Loans | Investment | of Loans | Investment | of Loans | Investment | of Loans | Investment |
Accruing Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial and agricultural | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | 3 | | | $ | 230 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | 3 | | | $ | 230 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual Troubled Debt Restructured Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | | | | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|