Loans | 9 Months Ended |
Sep. 30, 2013 |
Loans | ' |
Loans | ' |
|
5) Loans |
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Loans were as follows: |
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| | | | | | | | | | | | | | | | | | | |
| | September 30, | | December 31, | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | |
| | (Dollars in thousands) | | | | | | | | | | | | | |
Loans held-for-investment: | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 410,933 | | $ | 375,469 | | | | | | | | | | | | | |
Real estate: | | | | | | | | | | | | | | | | | | | |
Commercial and residential | | | 387,777 | | | 354,934 | | | | | | | | | | | | | |
Land and construction | | | 30,780 | | | 22,352 | | | | | | | | | | | | | |
Home equity | | | 50,100 | | | 43,865 | | | | | | | | | | | | | |
Consumer | | | 13,712 | | | 15,714 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Loans | | | 893,302 | | | 812,334 | | | | | | | | | | | | | |
Deferred loan origination fees, net | | | (250 | ) | | (21 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Loans, net of deferred fees | | | 893,052 | | | 812,313 | | | | | | | | | | | | | |
Allowance for loan losses | | | (19,342 | ) | | (19,027 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Loans, net | | $ | 873,710 | | $ | 793,286 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
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Changes in the allowance for loan losses were as follows for the periods indicated: |
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| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2013 | | | | | | | |
| | Commercial | | Real Estate | | Consumer | | Total | | | | | | | |
| | (Dollars in thousands) | | | | | | | |
Balance, beginning of period | | $ | 12,811 | | $ | 6,388 | | $ | 143 | | $ | 19,342 | | | | | | | |
Charge-offs | | | (254 | ) | | (40 | ) | | — | | | (294 | ) | | | | | | |
Recoveries | | | 820 | | | 7 | | | 1 | | | 828 | | | | | | | |
| | | | | | | | | | | | | | | |
Net (charge-offs)/recoveries | | | 566 | | | (33 | ) | | 1 | | | 534 | | | | | | | |
Provision (credit) for loan losses | | | (10 | ) | | (461 | ) | | (63 | ) | | (534 | ) | | | | | | |
| | | | | | | | | | | | | | | |
Balance, end of period | | $ | 13,367 | | $ | 5,894 | | $ | 81 | | $ | 19,342 | | | | | | | |
| | | | | | | | | | | | | | | |
|
|
|
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| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2012 | | | | | | | |
| | Commercial | | Real Estate | | Consumer | | Total | | | | | | | |
| | (Dollars in thousands) | | | | | | | |
Balance, beginning of period | | $ | 13,378 | | $ | 6,539 | | $ | 106 | | $ | 20,023 | | | | | | | |
Charge-offs | | | (916 | ) | | (1,334 | ) | | — | | | (2,250 | ) | | | | | | |
Recoveries | | | 149 | | | 2 | | | — | | | 151 | | | | | | | |
| | | | | | | | | | | | | | | |
Net (charge-offs)/recoveries | | | (767 | ) | | (1,332 | ) | | — | | | (2,099 | ) | | | | | | |
Provision (credit) for loan losses | | | 661 | | | 525 | | | 14 | | | 1,200 | | | | | | | |
| | | | | | | | | | | | | | | |
Balance, end of period | | $ | 13,272 | | $ | 5,732 | | $ | 120 | | $ | 19,124 | | | | | | | |
| | | | | | | | | | | | | | | |
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|
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| | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2013 | | | | | | | |
| | Commercial | | Real Estate | | Consumer | | Total | | | | | | | |
| | (Dollars in thousands) | | | | | | | |
Balance, beginning of period | | $ | 12,866 | | $ | 6,034 | | $ | 127 | | $ | 19,027 | | | | | | | |
Charge-offs | | | (1,213 | ) | | (96 | ) | | — | | | (1,309 | ) | | | | | | |
Recoveries | | | 2,158 | | | 269 | | | 1 | | | 2,428 | | | | | | | |
| | | | | | | | | | | | | | | |
Net (charge-offs)/recoveries | | | 945 | | | 173 | | | 1 | | | 1,119 | | | | | | | |
Provision (credit) for loan losses | | | (444 | ) | | (313 | ) | | (47 | ) | | (804 | ) | | | | | | |
| | | | | | | | | | | | | | | |
Balance, end of period | | $ | 13,367 | | $ | 5,894 | | $ | 81 | | $ | 19,342 | | | | | | | |
| | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2012 | | | | | | | |
| | Commercial | | Real Estate | | Consumer | | Total | | | | | | | |
| | (Dollars in thousands) | | | | | | | |
Balance, beginning of period | | $ | 13,215 | | $ | 7,338 | | $ | 147 | | $ | 20,700 | | | | | | | |
Charge-offs | | | (3,106 | ) | | (1,480 | ) | | — | | | (4,586 | ) | | | | | | |
Recoveries | | | 670 | | | 225 | | | — | | | 895 | | | | | | | |
| | | | | | | | | | | | | | | |
Net (charge-offs)/recoveries | | | (2,436 | ) | | (1,255 | ) | | — | | | (3,691 | ) | | | | | | |
Provision (credit) for loan losses | | | 2,493 | | | (351 | ) | | (27 | ) | | 2,115 | | | | | | | |
| | | | | | | | | | | | | | | |
Balance, end of period | | $ | 13,272 | | $ | 5,732 | | $ | 120 | | $ | 19,124 | | | | | | | |
| | | | | | | | | | | | | | | |
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The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on the impairment method at the following period-ends: |
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| | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | | | | | |
| | Commercial | | Real Estate | | Consumer | | Total | | | | | | | |
| | (Dollars in thousands) | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 2,426 | | $ | 827 | | $ | 25 | | $ | 3,278 | | | | | | | |
Collectively evaluated for impairment | | | 10,941 | | | 5,067 | | | 56 | | | 16,064 | | | | | | | |
| | | | | | | | | | | | | | | |
Total allowance balance | | $ | 13,367 | | $ | 5,894 | | $ | 81 | | $ | 19,342 | | | | | | | |
| | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 5,736 | | $ | 9,259 | | $ | 132 | | $ | 15,127 | | | | | | | |
Collectively evaluated for impairment | | | 405,197 | | | 459,398 | | | 13,580 | | | 878,175 | | | | | | | |
| | | | | | | | | | | | | | | |
Total loan balance | | $ | 410,933 | | $ | 468,657 | | $ | 13,712 | | $ | 893,302 | | | | | | | |
| | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | |
| | December 31, 2012 | | | | | | | |
| | Commercial | | Real Estate | | Consumer | | Total | | | | | | | |
| | (Dollars in thousands) | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 1,963 | | $ | 760 | | $ | 17 | | $ | 2,740 | | | | | | | |
Collectively evaluated for impairment | | | 10,903 | | | 5,274 | | | 110 | | | 16,287 | | | | | | | |
| | | | | | | | | | | | | | | |
Total allowance balance | | $ | 12,866 | | $ | 6,034 | | $ | 127 | | $ | 19,027 | | | | | | | |
| | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 10,161 | | $ | 9,336 | | $ | 147 | | $ | 19,644 | | | | | | | |
Collectively evaluated for impairment | | | 365,308 | | | 411,815 | | | 15,567 | | | 792,690 | | | | | | | |
| | | | | | | | | | | | | | | |
Total loan balance | | $ | 375,469 | | $ | 421,151 | | $ | 15,714 | | $ | 812,334 | | | | | | | |
| | | | | | | | | | | | | | | |
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The following table presents loans held-for-investment individually evaluated for impairment by class of loans as of September 30, 2013 and December 31, 2012. The recorded investment included in the following table represents loan principal net of any partial charge-offs recognized on the loans. The unpaid principal balance represents the recorded balance prior to any partial charge-offs. |
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| | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | December 31, 2012 | |
| | Unpaid | | Recorded | | Allowance | | Unpaid | | Recorded | | Allowance | |
Principal | Investment | for Loan | Principal | Investment | for Loan |
Balance | | Losses | Balance | | Losses |
| | Allocated | | | Allocated |
| | (Dollars in thousands) | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | |
Commercial | | $ | 682 | | $ | 598 | | $ | — | | $ | 7,829 | | $ | 6,978 | | $ | — | |
Real estate: | | | | | | | | | | | | | | | | | | | |
Commercial and residential | | | 3,452 | | | 3,452 | | | — | | | 2,755 | | | 2,741 | | | — | |
Land and construction | | | 1,794 | | | 1,794 | | | — | | | 2,310 | | | 2,223 | | | — | |
Home Equity | | | 2,059 | | | 2,059 | | | — | | | 2,141 | | | 2,141 | | | — | |
| | | | | | | | | | | | | |
Total with no related allowance recorded | | | 7,987 | | | 7,903 | | | — | | | 15,035 | | | 14,083 | | | — | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | |
Commercial | | | 5,207 | | | 5,138 | | | 2,426 | | | 3,678 | | | 3,182 | | | 1,963 | |
Real estate: | | | | | | | | | | | | | | | | | | | |
Commercial and residential | | | 1,543 | | | 1,543 | | | 463 | | | 3,183 | | | 1,937 | | | 465 | |
Land and construction | | | 55 | | | 55 | | | 8 | | | — | | | — | | | — | |
Home Equity | | | 356 | | | 356 | | | 356 | | | 295 | | | 295 | | | 295 | |
Consumer | | | 132 | | | 132 | | | 25 | | | 147 | | | 147 | | | 17 | |
| | | | | | | | | | | | | |
Total with an allowance recorded | | | 7,293 | | | 7,224 | | | 3,278 | | | 7,303 | | | 5,561 | | | 2,740 | |
| | | | | | | | | | | | | |
Total | | $ | 15,280 | | $ | 15,127 | | $ | 3,278 | | $ | 22,338 | | $ | 19,644 | | $ | 2,740 | |
| | | | | | | | | | | | | |
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The following tables present interest recognized and cash-basis interest earned on impaired loans for the periods indicated: |
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| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2013 | |
| | | | Real Estate | | | | | |
| | Commercial | | Commercial and | | Land and | | Home | | Consumer | | Total | |
Residential | Construction | Equity |
| | (Dollars in thousands) | |
Average of impaired loans during the period | | $ | 5,539 | | $ | 5,032 | | $ | 1,989 | | $ | 2,393 | | $ | 133 | | $ | 15,086 | |
Interest income during impairment | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Cash-basis interest earned | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
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| | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2012 | |
| | | | Real Estate | | | | | |
| | Commercial | | Commercial and | | Land and | | Home | | Consumer | | Total | |
Residential | Construction | Equity |
| | (Dollars in thousands) | |
Average of impaired loans during the period | | $ | 11,138 | | $ | 3,329 | | $ | 2,228 | | $ | 546 | | $ | 156 | | $ | 17,397 | |
Interest income during impairment | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Cash-basis interest earned | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
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| | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2013 | |
| | | | Real Estate | | | | | |
| | Commercial | | Commercial and | | Land and | | Home | | Consumer | | Total | |
Residential | Construction | Equity |
| | (Dollars in thousands) | |
Average of impaired loans during the period | | $ | 7,342 | | $ | 5,061 | | $ | 2,095 | | $ | 2,414 | | $ | 138 | | $ | 17,050 | |
Interest income during impairment | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Cash-basis interest earned | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
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| | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2012 | |
| | | | Real Estate | | | | | |
| | Commercial | | Commercial and | | Land and | | Home | | Consumer | | Total | |
Residential | Construction | Equity |
| | (Dollars in thousands) | |
Average of impaired loans during the period | | $ | 11,294 | | $ | 3,051 | | $ | 2,615 | | $ | 281 | | $ | 83 | | $ | 17,324 | |
Interest income during impairment | | $ | — | | $ | 1 | | $ | 14 | | $ | — | | $ | — | | $ | 15 | |
Cash-basis interest earned | | $ | — | | $ | 1 | | $ | 14 | | $ | — | | $ | — | | $ | 15 | |
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Nonperforming loans include both smaller dollar balance homogenous loans that are collectively evaluated for impairment and individually classified loans. Nonperforming loans were as follows at period-end: |
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| | | | | | | | | | | | | | | | | | | |
| | September 30, | | | | | | | | | | | | |
| | December 31, | | | | | | | | | | |
| | 2013 | | 2012 | 2012 | | | | | | | | | | |
| | (Dollars in thousands) | | | | | | | | | | |
Nonaccrual loans—held-for-investment | | $ | 14,615 | | $ | 17,396 | | $ | 17,335 | | | | | | | | | | |
Restructured and loans over 90 days past due and still accruing | | | 502 | | | 1,722 | | | 859 | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total nonperforming loans | | $ | 15,117 | | $ | 19,118 | | $ | 18,194 | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Other restructured loans | | $ | 10 | | $ | 704 | | $ | 1,450 | | | | | | | | | | |
Impaired loans, excluding loans held-for-sale | | $ | 15,127 | | $ | 19,822 | | $ | 19,644 | | | | | | | | | | |
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The following table presents the nonperforming loans by class as of September 30, 2013 and December 31, 2012: |
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| | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | December 31, 2012 | |
| | Nonaccrual | | Restructured and | | Total | | Nonaccrual | | Restructured and | | Total | |
Loans Over | Loans Over |
90 Days | 90 Days |
Past Due and | Past Due and |
Still Accruing | Still Accruing |
| | (Dollars in thousands) | |
Commercial | | $ | 5,224 | | $ | 502 | | $ | 5,726 | | $ | 7,852 | | $ | 859 | | $ | 8,711 | |
Real estate: | | | | | | | | | | | | | | | | | | | |
Commercial and residential | | | 4,995 | | | — | | | 4,995 | | | 4,676 | | | — | | | 4,676 | |
Land and construction | | | 1,849 | | | — | | | 1,849 | | | 2,223 | | | — | | | 2,223 | |
Home equity | | | 2,415 | | | — | | | 2,415 | | | 2,437 | | | — | | | 2,437 | |
Consumer | | | 132 | | | — | | | 132 | | | 147 | | | — | | | 147 | |
| | | | | | | | | | | | | |
Total | | $ | 14,615 | | $ | 502 | | $ | 15,117 | | $ | 17,335 | | $ | 859 | | $ | 18,194 | |
| | | | | | | | | | | | | |
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The following table presents the aging of past due loans as of September 30, 2013 by class of loans: |
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| | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | |
| | 30 - 59 | | 60 - 89 | | 90 Days or | | Total | | Loans Not | | Total | |
Days | Days | Greater | Past Due | Past Due |
Past Due | Past Due | Past Due | | |
| | (Dollars in thousands) | |
Commercial | | $ | 1,098 | | $ | 716 | | $ | 2,690 | | $ | 4,504 | | $ | 406,429 | | $ | 410,933 | |
Real estate: | | | | | | | | | | | | | | | | | | | |
Commercial and residential | | | 134 | | | — | | | 1,548 | | | 1,682 | | | 386,095 | | | 387,777 | |
Land and construction | | | — | | | — | | | 55 | | | 55 | | | 30,725 | | | 30,780 | |
Home equity | | | — | | | — | | | 447 | | | 447 | | | 49,653 | | | 50,100 | |
Consumer | | | — | | | | | | 97 | | | 97 | | | 13,615 | | | 13,712 | |
| | | | | | | | | | | | | |
Total | | $ | 1,232 | | $ | 716 | | $ | 4,837 | | $ | 6,785 | | $ | 886,517 | | $ | 893,302 | |
| | | | | | | | | | | | | |
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The following table presents the aging of past due loans as of December 31, 2012 by class of loans: |
|
| | | | | | | | | | | | | | | | | | | |
| | December 31, 2012 | |
| | 30 - 59 | | 60 - 89 | | 90 Days or | | Total | | Loans Not | | Total | |
Days | Days | Greater | Past Due | Past Due |
Past Due | Past Due | Past Due | | |
| | (Dollars in thousands) | |
Commercial | | $ | 1,699 | | $ | 355 | | $ | 5,120 | | $ | 7,174 | | $ | 368,295 | | $ | 375,469 | |
Real estate: | | | | | | | | | | | | | | | | | | | |
Commercial and residential | | | 1,603 | | | — | | | 3,290 | | | 4,893 | | | 350,041 | | | 354,934 | |
Land and construction | | | — | | | — | | | 78 | | | 78 | | | 22,274 | | | 22,352 | |
Home equity | | | 742 | | | — | | | 2,045 | | | 2,787 | | | 41,078 | | | 43,865 | |
Consumer | | | — | | | — | | | — | | | — | | | 15,714 | | | 15,714 | |
| | | | | | | | | | | | | |
Total | | $ | 4,044 | | $ | 355 | | $ | 10,533 | | $ | 14,932 | | $ | 797,402 | | $ | 812,334 | |
| | | | | | | | | | | | | |
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Past due loans 30 days or greater totaled $6,785,000 and $14,932,000 at September 30, 2013 and December 31, 2012, respectively, of which $5,603,000 and $12,020,000 were on nonaccrual. At September 30, 2013, there were also $9,012,000 loans less than 30 days past due included in nonaccrual loans held-for-investment. At December 31, 2012, there were also $5,315,000 loans less than 30 days past due included in nonaccrual loans held-for-investment. Management's classification of a loan as "nonaccrual" is an indication that there is reasonable doubt as to the full recovery of principal or interest on the loan. At that point, the Company stops accruing interest income, and reverses any uncollected interest that had been accrued as income. The Company begins recognizing interest income only as cash interest payments are received and it has been determined the collection of all outstanding principal is not in doubt. The loans may or may not be collateralized, and collection efforts are pursued. |
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Credit Quality Indicators |
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Concentrations of credit risk arise when a number of customers are engaged in similar business activities, or activities in the same geographic region, or have similar features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Company's loan portfolio is concentrated in commercial (primarily manufacturing, wholesale, and service) and real estate lending, with the balance in consumer loans. While no specific industry concentration is considered significant, the Company's lending operations are located in the Company's market areas that are dependent on the technology and real estate industries and their supporting companies. Thus, the Company's borrowers could be adversely impacted by a continued downturn in these sectors of the economy which could reduce the demand for loans and adversely impact the borrowers' ability to repay their loans. |
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The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loans terms. Classified loans are those loans that are assigned a substandard, substandard-nonaccrual, or doubtful risk rating using the following definitions: |
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Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. |
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Substandard-Nonaccrual. Loans classified as substandard-nonaccrual are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. In addition, the Company no longer accrues interest on the loan because of the underlying weaknesses. |
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Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. |
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Loss. Loans classified as loss are considered uncollectable or of so little value that their continuance as assets is not warranted. This classification does not necessarily mean that a loan has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery would occur. Loans classified as loss are immediately charged off against the allowance for loan losses. Therefore, there is no balance to report at September 30, 2013 or December 31, 2012. |
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The following table provides a summary of the loan portfolio by loan type and credit quality classification at September 30, 2013 and December 31, 2012: |
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| | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | December 31, 2012 | |
| | Nonclassified | | Classified | | Total | | Nonclassified | | Classified | | Total | |
| | (Dollars in thousands) | |
Commercial | | $ | 396,102 | | $ | 14,831 | | $ | 410,933 | | $ | 355,440 | | $ | 20,029 | | $ | 375,469 | |
Real estate: | | | | | | | | | | | | | | | | | | | |
Commercial and residential | | | 380,470 | | | 7,307 | | | 387,777 | | | 345,045 | | | 9,889 | | | 354,934 | |
Land and construction | | | 28,931 | | | 1,849 | | | 30,780 | | | 18,858 | | | 3,494 | | | 22,352 | |
Home equity | | | 47,364 | | | 2,736 | | | 50,100 | | | 41,187 | | | 2,678 | | | 43,865 | |
Consumer | | | 13,354 | | | 358 | | | 13,712 | | | 15,321 | | | 393 | | | 15,714 | |
| | | | | | | | | | | | | |
Total | | $ | 866,221 | | $ | 27,081 | | $ | 893,302 | | $ | 775,851 | | $ | 36,483 | | $ | 812,334 | |
| | | | | | | | | | | | | |
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Classified loans in the table above are gross of Small Business Administration ("SBA") guarantees. |
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In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company's underwriting policy. |
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The recorded investment of troubled debt restructurings at September 30, 2013 was $2,045,000, which included $1,534,000 of nonaccrual loans and $511,000 of accruing loans. The book balance of troubled debt restructurings at December 31, 2012 was $4,107,000, which included $1,798,000 of nonaccrual loans and $2,309,000 of accruing loans. Approximately $722,000 and $1,152,000 in specific reserves were established with respect to these loans as of September 30, 2013 and December 31, 2012, respectively. As of September 30, 2013 and December 31, 2012, the Company had no additional amounts committed on any loan classified as a troubled debt restructuring. |
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There were no new loans modified as troubled debt restructurings during the three month period ended September 30, 2013. The following table presents loans by class modified as troubled debt restructurings during the three month period ended September 30, 2012: |
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| | | | | | | | | | | | | | | | | | | |
| | During the Three Months Ended | | | | | | | | | | |
September 30, 2012 | | | | | | | | | |
Troubled Debt Restructurings: | | Number | | Pre-modification | | Post-modification | | | | | | | | | | |
of | Outstanding | Outstanding | | | | | | | | | |
Contracts | Recorded | Recorded | | | | | | | | | |
| Investment | Investment | | | | | | | | | |
| | (Dollars in thousands) | | | | | | | | | | |
Consumer | | | 2 | | $ | 91 | | $ | 91 | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total | | | 2 | | $ | 91 | | $ | 91 | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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The troubled debt restructurings described above increased the allowance for loan losses by $21,000 through the allocation of specific reserves, and resulted in no net charge-offs during the three month period ended September 30, 2012. |
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There were no new loans modified as troubled debt restructurings during the nine month period ended September 30, 2013. The following table presents loans by class modified as troubled debt restructurings during the nine month period ended September 30, 2012: |
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| | | | | | | | | | | | | | | | | | | |
| | During the Nine Months Ended | | | | | | | | | | |
September 30, 2012 | | | | | | | | | |
Troubled Debt Restructurings: | | Number | | Pre-modification | | Post-modification | | | | | | | | | | |
of | Outstanding | Outstanding | | | | | | | | | |
Contracts | Recorded | Recorded | | | | | | | | | |
| Investment | Investment | | | | | | | | | |
| | (Dollars in thousands) | | | | | | | | | | |
Commercial | | | 3 | | $ | 163 | | $ | 163 | | | | | | | | | | |
Consumer | | | 1 | | | 111 | | | 111 | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total | | | 4 | | $ | 274 | | $ | 274 | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
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The troubled debt restructurings described above increased the allowance for loan losses by $59,000 through the allocation of specific reserves, and resulted in no net charge-offs during the nine month period ended September 30, 2012. |
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A loan is considered to be in payment default when it is 30 days contractually past due under the modified terms. There were no defaults on troubled debt restructurings, within twelve months following the modification, during the three and nine month periods ended September 30, 2013 and 2012. |
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A loan that is a troubled debt restructuring on nonaccrual status may return to accruing status after a period of at least six months of consecutive payments in accordance with the modified terms. |
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