LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2013 |
Receivables [Abstract] | ' |
LOANS AND ALLOWANCE FOR LOAN LOSSES | ' |
|
NOTE 3 – LOANS AND ALLOWANCE FOR LOAN LOSSES |
|
Year-end loans disaggregated by class of loan within the loan portfolio segments were as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Percent | | | | | | | | | |
| | 31-Dec-13 | | | 31-Dec-12 | | | Increase | | | | | | | | | |
| | Balance | | | % | | | Balance | | | % | | | (Decrease) | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 286,373,000 | | | | 27.2 | % | | $ | 285,322,000 | | | | 27.4 | % | | | 0.4 | % | | | | | | | | |
Vacant land, land development, and residential construction | | | 36,741,000 | | | | 3.5 | | | | 48,099,000 | | | | 4.6 | | | | (23.6 | ) | | | | | | | | |
Real estate – owner occupied | | | 261,877,000 | | | | 24.9 | | | | 259,277,000 | | | | 24.9 | | | | 1 | | | | | | | | | |
Real estate – non-owner occupied | | | 364,066,000 | | | | 34.6 | | | | 324,886,000 | | | | 31.2 | | | | 12.1 | | | | | | | | | |
Real estate – multi-family and residential rental | | | 37,639,000 | | | | 3.5 | | | | 50,922,000 | | | | 4.9 | | | | (26.1 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 986,696,000 | | | | 93.7 | | | | 968,506,000 | | | | 93 | | | | 1.9 | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 35,080,000 | | | | 3.3 | | | | 38,917,000 | | | | 3.7 | | | | (9.9 | ) | | | | | | | | |
1-4 family mortgages | | | 31,467,000 | | | | 3 | | | | 33,766,000 | | | | 3.3 | | | | (6.8 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 66,547,000 | | | | 6.3 | | | | 72,683,000 | | | | 7 | | | | (8.4 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 1,053,243,000 | | | | 100 | % | | $ | 1,041,189,000 | | | | 100 | % | | | 1.2 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Concentrations within the loan portfolio were as follows at year-end: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | | | | | |
| | | | | Percentage of | | | | | | Percentage of | | | | | | | | | | | | | |
| | Balance | | | Loan Portfolio | | | Balance | | | Loan Portfolio | | | | | | | | | | | | | |
Commercial real estate loans to lessors of non-residential buildings | | $ | 299,446,000 | | | | 28.4 | % | | $ | 302,723,000 | | | | 29.1 | % | | | | | | | | | | | | |
|
Year-end nonperforming loans were as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | |
Loans past due 90 days or more still accruing interest | | $ | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | | 6,718,000 | | | | 18,970,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming loans | | $ | 6,718,000 | | | $ | 18,970,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The recorded principal balance of nonaccrual loans was as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, | | | December 31, | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 1,501,000 | | | $ | 1,677,000 | | | | | | | | | | | | | | | | | | | | | |
Vacant land, land development, and residential construction | | | 785,000 | | | | 2,194,000 | | | | | | | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 389,000 | | | | 2,087,000 | | | | | | | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 168,000 | | | | 9,010,000 | | | | | | | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 208,000 | | | | 2,021,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 3,051,000 | | | | 16,989,000 | | | | | | | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 788,000 | | | | 889,000 | | | | | | | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 2,879,000 | | | | 1,092,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 3,667,000 | | | | 1,981,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total nonaccrual loans | | $ | 6,718,000 | | | $ | 18,970,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
An age analysis of past due loans is as follows as of December 31, 2013: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Greater | | | | | | | | | | | | Recorded | |
| | 30 – 59 | | | 60 – 89 | | | Than 89 | | | | | | | | | | | | Balance > 89 | |
| | Days | | | Days | | | Days | | | Total | | | | | | Total | | | Days and | |
| | Past Due | | | Past Due | | | Past Due | | | Past Due | | | Current | | | Loans | | | Accruing | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 0 | | | $ | 0 | | | $ | 309,000 | | | $ | 309,000 | | | $ | 286,064,000 | | | $ | 286,373,000 | | | $ | 0 | |
Vacant land, land development, and residential construction | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 36,741,000 | | | | 36,741,000 | | | | 0 | |
Real estate – owner occupied | | | 65,000 | | | | 0 | | | | 50,000 | | | | 115,000 | | | | 261,762,000 | | | | 261,877,000 | | | | 0 | |
Real estate – non-owner occupied | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 364,066,000 | | | | 364,066,000 | | | | 0 | |
Real estate – multi-family and residential rental | | | 0 | | | | 0 | | | | 64,000 | | | | 64,000 | | | | 37,575,000 | | | | 37,639,000 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 65,000 | | | | 0 | | | | 423,000 | | | | 488,000 | | | | 986,208,000 | | | | 986,696,000 | | | | 0 | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 14,000 | | | | 0 | | | | 0 | | | | 14,000 | | | | 35,066,000 | | | | 35,080,000 | | | | 0 | |
1- 4 family mortgages | | | 21,000 | | | | 44,000 | | | | 375,000 | | | | 440,000 | | | | 31,027,000 | | | | 31,467,000 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 35,000 | | | | 44,000 | | | | 375,000 | | | | 454,000 | | | | 66,093,000 | | | | 66,547,000 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total past due loans | | $ | 100,000 | | | $ | 44,000 | | | $ | 798,000 | | | $ | 942,000 | | | $ | 1,052,301,000 | | | $ | 1,053,243,000 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
An age analysis of past due loans is as follows as of December 31, 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Greater | | | | | | | | | | | | Recorded | |
| | 30 – 59 | | | 60 – 89 | | | Than 89 | | | | | | | | | | | | Balance > 89 | |
| | Days | | | Days | | | Days | | | Total | | | | | | Total | | | Days and | |
| | Past Due | | | Past Due | | | Past Due | | | Past Due | | | Current | | | Loans | | | Accruing | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 80,000 | | | $ | 0 | | | $ | 871,000 | | | $ | 951,000 | | | $ | 284,371,000 | | | $ | 285,322,000 | | | $ | 0 | |
Vacant land, land development, and residential construction | | | 289,000 | | | | 0 | | | | 614,000 | | | | 903,000 | | | | 47,196,000 | | | | 48,099,000 | | | | 0 | |
Real estate – owner occupied | | | 199,000 | | | | 0 | | | | 1,337,000 | | | | 1,536,000 | | | | 257,741,000 | | | | 259,277,000 | | | | 0 | |
Real estate – non-owner occupied | | | 303,000 | | | | 0 | | | | 1,123,000 | | | | 1,426,000 | | | | 323,460,000 | | | | 324,886,000 | | | | 0 | |
Real estate – multi-family and residential rental | | | 0 | | | | 0 | | | | 613,000 | | | | 613,000 | | | | 50,309,000 | | | | 50,922,000 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 871,000 | | | | 0 | | | | 4,558,000 | | | | 5,429,000 | | | | 963,077,000 | | | | 968,506,000 | | | | 0 | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 1,000 | | | | 0 | | | | 13,000 | | | | 14,000 | | | | 38,903,000 | | | | 38,917,000 | | | | 0 | |
1- 4 family mortgages | | | 47,000 | | | | 190,000 | | | | 437,000 | | | | 674,000 | | | | 33,092,000 | | | | 33,766,000 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 48,000 | | | | 190,000 | | | | 450,000 | | | | 688,000 | | | | 71,995,000 | | | | 72,683,000 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total past due loans | | $ | 919,000 | | | $ | 190,000 | | | $ | 5,008,000 | | | $ | 6,117,000 | | | $ | 1,035,072,000 | | | $ | 1,041,189,000 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Impaired loans with no related allowance recorded were as follows as of December 31, 2013: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Year-To-Date | | | | | | | | | | | | | | | |
| | Unpaid | | | | | | | | Average | | | | | | | | | | | | | | | |
| | Contractual | | | Recorded | | | | | Recorded | | | | | | | | | | | | | | | |
| | Principal | | | Principal | | | Related | | Principal | | | | | | | | | | | | | | | |
| | Balance | | | Balance | | | Allowance | | Balance | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 2,229,000 | | | $ | 511,000 | | | | | $ | 1,205,000 | | | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 475,000 | | | | 362,000 | | | | | | 991,000 | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 1,270,000 | | | | 785,000 | | | | | | 1,084,000 | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 895,000 | | | | 733,000 | | | | | | 4,049,000 | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 41,000 | | | | 1,000 | | | | | | 390,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 4,910,000 | | | | 2,392,000 | | | | | | 7,719,000 | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 507,000 | | | | 461,000 | | | | | | 471,000 | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 1,272,000 | | | | 647,000 | | | | | | 727,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 1,779,000 | | | | 1,108,000 | | | | | | 1,198,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total with no related allowance recorded | | $ | 6,689,000 | | | $ | 3,500,000 | | | | | $ | 8,917,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Impaired loans with an allowance recorded and total impaired loans were as follows as of December 31, 2013: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Year-To-Date | | | | | | | | | | | | | |
| | Unpaid | | | | | | | | | Average | | | | | | | | | | | | | |
| | Contractual | | | Recorded | | | | | | Recorded | | | | | | | | | | | | | |
| | Principal | | | Principal | | | Related | | | Principal | | | | | | | | | | | | | |
| | Balance | | | Balance | | | Allowance | | | Balance | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 1,517,000 | | | $ | 1,440,000 | | | $ | 792,000 | | | $ | 1,880,000 | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 4,436,000 | | | | 4,139,000 | | | | 844,000 | | | | 3,354,000 | | | | | | | | | | | | | |
Real estate – owner occupied | | | 1,513,000 | | | | 1,513,000 | | | | 528,000 | | | | 2,550,000 | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 21,088,000 | | | | 21,072,000 | | | | 7,969,000 | | | | 28,388,000 | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 3,219,000 | | | | 2,684,000 | | | | 1,127,000 | | | | 2,915,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 31,773,000 | | | | 30,848,000 | | | | 11,260,000 | | | | 39,087,000 | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 320,000 | | | | 289,000 | | | | 96,000 | | | | 329,000 | | | | | | | | | | | | | |
1-4 family mortgages | | | 2,274,000 | | | | 2,231,000 | | | | 1,030,000 | | | | 1,628,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 2,594,000 | | | | 2,520,000 | | | | 1,126,000 | | | | 1,957,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total with an allowance recorded | | $ | 34,367,000 | | | $ | 33,368,000 | | | $ | 12,386,000 | | | $ | 41,044,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 36,683,000 | | | $ | 33,240,000 | | | $ | 11,260,000 | | | $ | 46,806,000 | | | | | | | | | | | | | |
Retail | | | 4,373,000 | | | | 3,628,000 | | | | 1,126,000 | | | | 3,155,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 41,056,000 | | | $ | 36,868,000 | | | $ | 12,386,000 | | | $ | 49,961,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Impaired loans with no related allowance recorded were as follows as of December 31, 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Year-To-Date | | | | | | | | | | | | | | | |
| | Unpaid | | | | | | | | Average | | | | | | | | | | | | | | | |
| | Contractual | | | Recorded | | | | | Recorded | | | | | | | | | | | | | | | |
| | Principal | | | Principal | | | Related | | Principal | | | | | | | | | | | | | | | |
| | Balance | | | Balance | | | Allowance | | Balance | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 1,926,000 | | | $ | 1,617,000 | | | | | $ | 3,140,000 | | | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 2,356,000 | | | | 1,401,000 | | | | | | 1,848,000 | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 2,368,000 | | | | 1,557,000 | | | | | | 3,139,000 | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 9,984,000 | | | | 5,492,000 | | | | | | 6,578,000 | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 1,188,000 | | | | 413,000 | | | | | | 756,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 17,822,000 | | | | 10,480,000 | | | | | | 15,461,000 | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 580,000 | | | | 483,000 | | | | | | 579,000 | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 1,636,000 | | | | 789,000 | | | | | | 730,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 2,216,000 | | | | 1,272,000 | | | | | | 1,309,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total with no related allowance recorded | | $ | 20,038,000 | | | $ | 11,752,000 | | | | | $ | 16,770,000 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Impaired loans with an allowance recorded and total impaired loans were as follows as of December 31, 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Year-To-Date | | | | | | | | | | | | | |
| | Unpaid | | | | | | | | | Average | | | | | | | | | | | | | |
| | Contractual | | | Recorded | | | | | | Recorded | | | | | | | | | | | | | |
| | Principal | | | Principal | | | Related | | | Principal | | | | | | | | | | | | | |
| | Balance | | | Balance | | | Allowance | | | Balance | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 3,221,000 | | | $ | 1,926,000 | | | $ | 924,000 | | | $ | 3,110,000 | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 2,333,000 | | | | 2,219,000 | | | | 1,367,000 | | | | 3,267,000 | | | | | | | | | | | | | |
Real estate – owner occupied | | | 4,307,000 | | | | 3,626,000 | | | | 1,388,000 | | | | 4,913,000 | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 33,818,000 | | | | 32,964,000 | | | | 11,773,000 | | | | 25,061,000 | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 4,471,000 | | | | 3,923,000 | | | | 1,408,000 | | | | 7,429,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 48,150,000 | | | | 44,658,000 | | | | 16,860,000 | | | | 43,780,000 | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 423,000 | | | | 394,000 | | | | 204,000 | | | | 286,000 | | | | | | | | | | | | | |
1-4 family mortgages | | | 555,000 | | | | 475,000 | | | | 125,000 | | | | 482,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 978,000 | | | | 869,000 | | | | 329,000 | | | | 768,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total with an allowance recorded | | $ | 49,128,000 | | | $ | 45,527,000 | | | $ | 17,189,000 | | | $ | 44,548,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 65,972,000 | | | $ | 55,138,000 | | | $ | 16,860,000 | | | $ | 59,241,000 | | | | | | | | | | | | | |
Retail | | | 3,194,000 | | | | 2,141,000 | | | | 329,000 | | | | 2,077,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 69,166,000 | | | $ | 57,279,000 | | | $ | 17,189,000 | | | $ | 61,318,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Impaired loans for which no allocation of the allowance for loan losses has been made generally reflect situations whereby the loans have been charged-down to estimated collateral value. Interest income recognized on accruing troubled debt restructurings totaled $2.5 million, $2.0 million and $0.2 million during 2013, 2012 and 2011, respectively. Interest income recognized on nonaccrual loans totaled $1.9 million during 2013, reflecting the collection of interest at the time of principal pay-off. No such collections of interest income were recorded during 2012 or 2011. Lost interest income on nonaccrual loans totaled $0.4 million during 2013, $0.8 million during 2012, and $1.4 million during 2011. |
|
Credit Quality Indicators. We utilize a comprehensive grading system for our commercial loans. All commercial loans are graded on a ten grade rating system. The rating system utilizes standardized grade paradigms that analyze several critical factors such as cash flow, operating performance, financial condition, collateral, industry condition and management. All commercial loans are graded at inception and reviewed and, if appropriate, re-graded at various intervals thereafter. The risk assessment for retail loans is primarily based on the type of collateral and payment activity. |
|
Loans by credit quality indicators were as follows as of December 31, 2013: |
|
Commercial credit exposure – credit risk profiled by internal credit risk grades: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Commercial | | | | | | | | | Commercial | | | | | | | | | |
| | | | | Vacant Land, | | | Commercial | | | Commercial | | | Real Estate - | | | | | | | | | |
| | Commercial | | | Land Development, | | | Real Estate - | | | Real Estate - | | | Multi-Family | | | | | | | | | |
| | and | | | and Residential | | | Owner | | | Non-Owner | | | and Residential | | | | | | | | | |
| | Industrial | | | Construction | | | Occupied | | | Occupied | | | Rental | | | | | | | | | |
Internal credit risk grade groupings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grades 1 – 4 | | $ | 208,151,000 | | | $ | 6,973,000 | | | $ | 156,230,000 | | | $ | 219,325,000 | | | $ | 15,465,000 | | | | | | | | | |
Grades 5 – 7 | | | 76,237,000 | | | | 25,535,000 | | | | 103,066,000 | | | | 122,717,000 | | | | 19,469,000 | | | | | | | | | |
Grades 8 – 9 | | | 1,985,000 | | | | 4,233,000 | | | | 2,581,000 | | | | 22,024,000 | | | | 2,705,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | $ | 286,373,000 | | | $ | 36,741,000 | | | $ | 261,877,000 | | | $ | 364,066,000 | | | $ | 37,639,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Retail credit exposure – credit risk profiled by collateral type: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Retail | | | Retail | | | | | | | | | | | | | | | | | | | | | |
| | Home Equity | | | 1-4 Family | | | | | | | | | | | | | | | | | | | | | |
| | and Other | | | Mortgages | | | | | | | | | | | | | | | | | | | | | |
Total retail | | $ | 35,080,000 | | | $ | 31,467,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Loans by credit quality indicators were as follows as of December 31, 2012: |
|
Commercial credit exposure – credit risk profiled by internal credit risk grades: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Commercial | | | | | | | | | Commercial | | | | | | | | | |
| | | | | Vacant Land, | | | Commercial | | | Commercial | | | Real Estate - | | | | | | | | | |
| | Commercial | | | Land Development, | | | Real Estate - | | | Real Estate - | | | Multi-Family | | | | | | | | | |
| | and | | | and Residential | | | Owner | | | Non-Owner | | | and Residential | | | | | | | | | |
| | Industrial | | | Construction | | | Occupied | | | Occupied | | | Rental | | | | | | | | | |
Internal credit risk grade groupings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Grades 1 – 4 | | $ | 180,314,000 | | | $ | 6,526,000 | | | $ | 150,467,000 | | | $ | 154,127,000 | | | $ | 24,015,000 | | | | | | | | | |
Grades 5 – 7 | | | 101,832,000 | | | | 37,697,000 | | | | 102,988,000 | | | | 128,041,000 | | | | 22,082,000 | | | | | | | | | |
Grades 8 – 9 | | | 3,176,000 | | | | 3,876,000 | | | | 5,822,000 | | | | 42,718,000 | | | | 4,825,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | $ | 285,322,000 | | | $ | 48,099,000 | | | $ | 259,277,000 | | | $ | 324,886,000 | | | $ | 50,922,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Retail credit exposure – credit risk profiled by collateral type: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Retail | | | Retail | | | | | | | | | | | | | | | | | | | | | |
| | Home Equity | | | 1-4 Family | | | | | | | | | | | | | | | | | | | | | |
| | and Other | | | Mortgages | | | | | | | | | | | | | | | | | | | | | |
Total retail | | $ | 38,917,000 | | | $ | 33,766,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
All commercial loans are graded using the following number system: |
|
|
| Grade 1. | Excellent credit rating that contain very little, if any, risk of loss. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 2. | Strong sources of repayment and have low repayment risk. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 3. | Good sources of repayment and have limited repayment risk. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 4. | Adequate sources of repayment and acceptable repayment risk; however, characteristics are present that render the credit more vulnerable to a negative event. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 5. | Marginally acceptable sources of repayment and exhibit defined weaknesses and negative characteristics. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 6. | Well defined weaknesses which may include negative current cash flow, high leverage, or operating losses. Generally, if the credit does not stabilize or if further deterioration is observed in the near term, the loan will likely be downgraded and placed on the Watch List (i.e., list of lending relationships that receive increased scrutiny and review by the Board of Directors and senior management). | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 7. | Defined weaknesses or negative trends that merit close monitoring through Watch List status. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 8. | Inadequately protected by current sound net worth, paying capacity of the obligor, or pledged collateral, resulting in a distinct possibility of loss requiring close monitoring through Watch List status. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 9. | Vital weaknesses exist where collection of principal is highly questionable. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| Grade 10. | Considered uncollectable and of such little value that their continuance as an asset is not warranted. | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The primary risk elements with respect to commercial loans are the financial condition of the borrower, the sufficiency of collateral, and timeliness of scheduled payments. We have a policy of requesting and reviewing periodic financial statements from commercial loan customers and employ a disciplined and formalized review of the existence of collateral and its value. The primary risk element with respect to each residential real estate loan and consumer loan is the timeliness of scheduled payments. We have a reporting system that monitors past due loans and have adopted policies to pursue creditor’s rights in order to preserve our collateral position. |
|
The allowance for loan losses and recorded investments in loans for the year-ended December 31, 2013 are as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Retail | | | | | | | | | | | | | | | | | | | |
| | Loans | | | Loans | | | Unallocated | | | Total | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 26,043,000 | | | $ | 2,645,000 | | | $ | (11,000 | ) | | $ | 28,677,000 | | | | | | | | | | | | | |
Provision for loan losses | | | (6,730,000 | ) | | | (489,000 | ) | | | 19,000 | | | | (7,200,000 | ) | | | | | | | | | | | | |
Charge-offs | | | (5,120,000 | ) | | | (170,000 | ) | | | 0 | | | | (5,290,000 | ) | | | | | | | | | | | | |
Recoveries | | | 6,262,000 | | | | 372,000 | | | | 0 | | | | 6,634,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 20,455,000 | | | $ | 2,358,000 | | | $ | 8,000 | | | $ | 22,821,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 11,260,000 | | | $ | 1,126,000 | | | $ | 0 | | | $ | 12,386,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: collectively evaluated for impairment | | $ | 9,195,000 | | | $ | 1,232,000 | | | $ | 8,000 | | | $ | 10,435,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 986,696,000 | | | $ | 66,547,000 | | | | | | | $ | 1,053,243,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 33,240,000 | | | $ | 3,628,000 | | | | | | | $ | 36,868,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: collectively evaluated for impairment | | $ | 953,456,000 | | | $ | 62,919,000 | | | | | | | $ | 1,016,375,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
The allowance for loan losses and recorded investments in loans for the year-ended December 31, 2012 are as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Retail | | | Unallocated | | | Total | | | | | | | | | | | | | |
Loans | Loans | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 33,431,000 | | | $ | 3,019,000 | | | $ | 82,000 | | | $ | 36,532,000 | | | | | | | | | | | | | |
Provision for loan losses | | | (2,800,000 | ) | | | (207,000 | ) | | | (93,000 | ) | | | (3,100,000 | ) | | | | | | | | | | | | |
Charge-offs | | | (12,075,000 | ) | | | (569,000 | ) | | | 0 | | | | (12,644,000 | ) | | | | | | | | | | | | |
Recoveries | | | 7,487,000 | | | | 402,000 | | | | 0 | | | | 7,889,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 26,043,000 | | | $ | 2,645,000 | | | $ | (11,000 | ) | | $ | 28,677,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 16,860,000 | | | $ | 329,000 | | | $ | 0 | | | $ | 17,189,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: collectively evaluated for impairment | | $ | 9,183,000 | | | $ | 2,316,000 | | | $ | (11,000 | ) | | $ | 11,488,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 968,506,000 | | | $ | 72,683,000 | | | | | | | $ | 1,041,189,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 55,138,000 | | | $ | 2,141,000 | | | | | | | $ | 57,279,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: collectively evaluated for impairment | | $ | 913,368,000 | | | $ | 70,542,000 | | | | | | | $ | 983,910,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
The allowance for loan losses and recorded investments in loans for the year-ended December 31, 2011 are as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Retail | | | Unallocated | | | Total | | | | | | | | | | | | | |
Loans | Loans | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 42,359,000 | | | $ | 2,972,000 | | | $ | 37,000 | | | $ | 45,368,000 | | | | | | | | | | | | | |
Provision for loan losses | | | 4,125,000 | | | | 2,730,000 | | | | 45,000 | | | | 6,900,000 | | | | | | | | | | | | | |
Charge-offs | | | (16,978,000 | ) | | | (2,919,000 | ) | | | 0 | | | | (19,897,000 | ) | | | | | | | | | | | | |
Recoveries | | | 3,925,000 | | | | 236,000 | | | | 0 | | | | 4,161,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 33,431,000 | | | $ | 3,019,000 | | | $ | 82,000 | | | $ | 36,532,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 18,645,000 | | | $ | 351,000 | | | $ | 0 | | | $ | 18,996,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: collectively evaluated for impairment | | $ | 14,786,000 | | | $ | 2,668,000 | | | $ | 82,000 | | | $ | 17,536,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | 996,905,000 | | | $ | 75,517,000 | | | | | | | $ | 1,072,422,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: individually evaluated for impairment | | $ | 68,893,000 | | | $ | 2,085,000 | | | | | | | $ | 70,978,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance: collectively evaluated for impairment | | $ | 928,012,000 | | | $ | 73,432,000 | | | | | | | $ | 1,001,444,000 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
Loans modified as troubled debt restructurings during 2013 were as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Pre- | | | Post- | | | | | | | | | | | | | | | | | |
Contracts | Modification | Modification | | | | | | | | | | | | | | | | |
| Recorded | Recorded | | | | | | | | | | | | | | | | |
| Principal | Principal | | | | | | | | | | | | | | | | |
| Balance | Balance | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 3 | | | $ | 741,000 | | | $ | 741,000 | | | | | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 2 | | | | 3,610,000 | | | | 3,610,000 | | | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 2 | | | | 715,000 | | | | 715,000 | | | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 1 | | | | 45,000 | | | | 45,000 | | | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 1 | | | | 241,000 | | | | 241,000 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 9 | | | | 5,352,000 | | | | 5,352,000 | | | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 1 | | | | 1,879,000 | | | | 1,879,000 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 1 | | | | 1,879,000 | | | | 1,879,000 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 10 | | | $ | 7,231,000 | | | $ | 7,231,000 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due during the twelve months ended December 31, 2013 (amounts as of period end): |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Recorded | | | | | | | | | | | | | | | | | | | | | |
Contracts | Principal | | | | | | | | | | | | | | | | | | | | |
| Balance | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 1 | | | | 65,000 | | | | | | | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 1 | | | | 65,000 | | | | | | | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1 | | | $ | 65,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
Loans modified as troubled debt restructurings during 2012 were as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Pre- | | | Post- | | | | | | | | | | | | | | | | | |
Contracts | Modification | Modification | | | | | | | | | | | | | | | | |
| Recorded | Recorded | | | | | | | | | | | | | | | | |
| Principal | Principal | | | | | | | | | | | | | | | | |
| Balance | Balance | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 8 | | | $ | 1,357,000 | | | $ | 1,353,000 | | | | | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 6 | | | | 1,745,000 | | | | 1,744,000 | | | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 15 | | | | 28,987,000 | | | | 28,987,000 | | | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 29 | | | | 32,089,000 | | | | 32,084,000 | | | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 29 | | | $ | 32,089,000 | | | $ | 32,084,000 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following loans, modified as troubled debt restructurings within the previous twelve months, became over 30 days past due during the twelve months ended December 31, 2012 (amounts as of period end): |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Recorded | | | | | | | | | | | | | | | | | | | | | |
Contracts | Principal | | | | | | | | | | | | | | | | | | | | |
| Balance | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Vacant land, land development and residential construction | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
Activity for loans categorized as troubled debt restructurings during 2013 is as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Commercial | | | Commercial | | | Commercial | | | | | | | | | |
and | Vacant Land, | Real Estate - | Real Estate - | Real Estate - | | | | | | | | |
Industrial | Land Development, | Owner | Non-Owner | Multi-Family | | | | | | | | |
| and Residential | Occupied | Occupied | and Residential | | | | | | | | |
| Construction | | | Rental | | | | | | | | |
Commercial Loan Portfolio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 2,720,000 | | | $ | 3,071,000 | | | $ | 4,116,000 | | | $ | 37,671,000 | | | $ | 3,027,000 | | | | | | | | | |
Charge-Offs | | | (35,000 | ) | | | (725,000 | ) | | | (70,000 | ) | | | (2,537,000 | ) | | | (15,000 | ) | | | | | | | | |
Payments | | | (2,781,000 | ) | | | (1,596,000 | ) | | | (2,151,000 | ) | | | (13,795,000 | ) | | | (735,000 | ) | | | | | | | | |
Transfers to ORE | | | (74,000 | ) | | | 0 | | | | (363,000 | ) | | | (1,153,000 | ) | | | 0 | | | | | | | | | |
Net Additions/Deletions | | | 1,826,000 | | | | 3,751,000 | | | | 284,000 | | | | 2,125,000 | | | | 343,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Balance | | $ | 1,656,000 | | | $ | 4,501,000 | | | $ | 1,816,000 | | | $ | 22,311,000 | | | $ | 2,620,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Retail | | | Retail | | | | | | | | | | | | | | | | | | | | | |
Home Equity | 1-4 Family | | | | | | | | | | | | | | | | | | | | |
and Other | Mortgages | | | | | | | | | | | | | | | | | | | | |
Retail Loan Portfolio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 0 | | | $ | 155,000 | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Payments | | | 0 | | | | (46,000 | ) | | | | | | | | | | | | | | | | | | | | |
Transfers to ORE | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Net Additions/Deletions | | | 0 | | | | 1,878,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Balance | | $ | 0 | | | $ | 1,987,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
Activity for loans categorized as troubled debt restructurings during 2012 is as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Commercial | | | Commercial | | | Commercial | | | | | | | | | |
and | Vacant Land, | Real Estate - | Real Estate - | Real Estate - | | | | | | | | |
Industrial | Land Development, | Owner | Non-Owner | Multi-Family | | | | | | | | |
| and Residential | Occupied | Occupied | and Residential | | | | | | | | |
| Construction | | | Rental | | | | | | | | |
Commercial Loan Portfolio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 4,553,000 | | | $ | 5,100,000 | | | $ | 6,183,000 | | | $ | 12,036,000 | | | $ | 12,626,000 | | | | | | | | | |
Charge-Offs | | | (540,000 | ) | | | (63,000 | ) | | | (426,000 | ) | | | (720,000 | ) | | | (2,180,000 | ) | | | | | | | | |
Payments | | | (2,584,000 | ) | | | (2,013,000 | ) | | | (3,443,000 | ) | | | (2,482,000 | ) | | | (7,422,000 | ) | | | | | | | | |
Transfers to ORE | | | (96,000 | ) | | | 0 | | | | (65,000 | ) | | | (1,045,000 | ) | | | (186,000 | ) | | | | | | | | |
Net Additions/Deletions | | | 1,387,000 | | | | 47,000 | | | | 1,867,000 | | | | 29,882,000 | | | | 189,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Balance | | $ | 2,720,000 | | | $ | 3,071,000 | | | $ | 4,116,000 | | | $ | 37,671,000 | | | $ | 3,027,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Retail Home | | | Retail | | | | | | | | | | | | | | | | | | | | | |
Equity and | 1-4 Family | | | | | | | | | | | | | | | | | | | | |
Other | Mortgages | | | | | | | | | | | | | | | | | | | | |
Retail Loan Portfolio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 0 | | | $ | 164,000 | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Payments | | | 0 | | | | (9,000 | ) | | | | | | | | | | | | | | | | | | | | |
Transfers to ORE | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Net Additions/Deletions | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Balance | | $ | 0 | | | $ | 155,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
Activity for loans categorized as troubled debt restructurings during 2011 is as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Commercial | | | Commercial | | | Commercial | | | | | | | | | |
and | Vacant Land, | Real Estate - | Real Estate - | Real Estate - | | | | | | | | |
Industrial | Land Development, | Owner | Non-Owner | Multi-Family | | | | | | | | |
| and Residential | Occupied | Occupied | and Residential | | | | | | | | |
| Construction | | | Rental | | | | | | | | |
Commercial Loan Portfolio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 850,000 | | | $ | 10,696,000 | | | $ | 2,589,000 | | | $ | 9,330,000 | | | $ | 7,848,000 | | | | | | | | | |
Charge-Offs | | | (850,000 | ) | | | (2,429,000 | ) | | | 0 | | | | (1,195,000 | ) | | | (21,000 | ) | | | | | | | | |
Payments | | | 0 | | | | (3,137,000 | ) | | | (2,477,000 | ) | | | (3,614,000 | ) | | | (92,000 | ) | | | | | | | | |
Transfers to ORE | | | 0 | | | | (5,130,000 | ) | | | 0 | | | | 0 | | | | 0 | | | | | | | | | |
Net Additions/Deletions | | | 4,553,000 | | | | 5,100,000 | | | | 6,071,000 | | | | 7,515,000 | | | | 4,891,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Balance | | $ | 4,553,000 | | | $ | 5,100,000 | | | $ | 6,183,000 | | | $ | 12,036,000 | | | $ | 12,626,000 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Retail | | | Retail | | | | | | | | | | | | | | | | | | | | | |
Home Equity | 1-4 Family | | | | | | | | | | | | | | | | | | | | |
and Other | Mortgages | | | | | | | | | | | | | | | | | | | | |
Retail Loan Portfolio: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance | | $ | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Charge-Offs | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Payments | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Transfers to ORE | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Net Additions/Deletions | | | 0 | | | | 164,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending Balance | | $ | 0 | | | $ | 164,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
The allowance related to loans categorized as troubled debt restructurings was as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, | | | December 31, | | | | | | | | | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 187,000 | | | $ | 772,000 | | | | | | | | | | | | | | | | | | | | | |
Vacant land, land development, and residential construction | | | 798,000 | | | | 713,000 | | | | | | | | | | | | | | | | | | | | | |
Real estate – owner occupied | | | 528,000 | | | | 1,116,000 | | | | | | | | | | | | | | | | | | | | | |
Real estate – non-owner occupied | | | 7,828,000 | | | | 9,751,000 | | | | | | | | | | | | | | | | | | | | | |
Real estate – multi-family and residential rental | | | 1,010,000 | | | | 745,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 10,351,000 | | | | 13,097,000 | | | | | | | | | | | | | | | | | | | | | |
Retail: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity and other | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
1-4 family mortgages | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total retail | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total related allowance | | $ | 10,351,000 | | | $ | 13,097,000 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
In general, our policy dictates that a renewal or modification of an 8- or 9-rated commercial loan meets the criteria of a troubled debt restructuring, although we review and consider all renewed and modified loans as part of our troubled debt restructuring assessment procedures. Loan relationships rated 8 contain significant financial weaknesses, resulting in a distinct possibility of loss, while relationships rated 9 reflect vital financial weaknesses, resulting in a highly questionable ability on our part to collect principal; we believe borrowers warranting such ratings would have difficulty obtaining financing from other market participants. Thus, due to the lack of comparable market rates for loans with similar risk characteristics, we believe 8- or 9-rated loans renewed or modified were done so at below market rates. Loans that are identified as troubled debt restructurings are considered impaired and are individually evaluated for impairment when assessing these credits in our allowance for loan losses calculation. |