Loans | 9 Months Ended |
Sep. 30, 2014 |
Receivables [Abstract] | ' |
Loans | ' |
Loans |
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Major classifications of loans at September 30, 2014 and December 31, 2013 are as follows (in thousands): |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| September 30, 2014 | | December 31, 2013 | | | | | | | | | | | | | | | | |
Commercial and industrial | 34,997 | | | 29,337 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial, secured by real estate | 371,533 | | | 314,252 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Residential real estate | 248,113 | | | 215,587 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Consumer | 19,305 | | | 12,643 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Agricultural | 9,249 | | | 2,472 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Other loans, including deposit overdrafts | 2,651 | | | 91 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| 685,848 | | | 574,382 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Deferred net origination costs (fees) | 67 | | | (28 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| 685,915 | | | 574,354 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Less allowance for loan losses | 3,298 | | | 3,588 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Loans, net | 682,617 | | | 570,766 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
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All advances from the Federal Home Loan Bank of Cincinnati are secured by a blanket pledge of LCNB's 1-4 family first lien mortgage loans in the amount of approximately $207 million and $183 million at September 30, 2014 and December 31, 2013, respectively. Additionally, LCNB is required to hold minimum levels of FHLB stock, based on the outstanding borrowings. |
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Loans acquired from the mergers with First Capital and ENB are recorded at fair value with no carryover of the acquired entity's previously established allowance for loan losses. The excess of expected cash flows over the estimated fair value of acquired loans is recognized as interest income over the remaining contractual lives of the loans using the level yield method. |
Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows result in the recognition of additional interest income over the then-remaining contractual lives of the loans. |
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Impaired loans acquired are accounted for under FASB ASC 310-30. Factors considered in evaluating whether an acquired loan was impaired include delinquency status and history, updated borrower credit status, collateral information, and updated loan-to-value information. The difference between contractually required payments at the time of acquisition and the cash flows expected to be collected is referred to as the nonaccretable difference. The interest component of the cash flows expected to be collected is referred to as the accretable yield and is recognized as interest income over the remaining contractual life of the loan using the level yield method. Subsequent decreases in expected cash flows will require additions to the allowance for loan losses. Subsequent improvements in expected cash flows will result in a reclassification from the nonaccretable difference to the accretable yield. |
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The following table provides certain information at the acquisition date on loans acquired from ENB, not including loans considered to be impaired (in thousands): |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Contractually required principal at acquisition | $ | 102,483 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Less fair value adjustment | 1,347 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Fair value of acquired loans | $ | 101,136 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Contractual cash flows not expected to be collected | $ | 1,702 | | | | | | | | | | | | | | | | | | | |
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The following table provides details on acquired credit impaired loans obtained through the merger with ENB that are accounted for in accordance with FASB ASC 310-30 (in thousands): |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Contractually required principal at acquisition | $ | 23,414 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Contractual cash flows not expected to be collected (nonaccretable difference) | (6,088 | ) | | | | | | | | | | | | | | | | | | |
Expected cash flows at acquisition | 17,326 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Interest component of expected cash flows (accretable discount) | (2,163 | ) | | | | | | | | | | | | | | | | | | |
Fair value of acquired impaired loans | $ | 15,163 | | | | | | | | | | | | | | | | | | | |
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Non-accrual, past-due, and accruing restructured loans as of September 30, 2014 and December 31, 2013 are as follows (in thousands): |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| 30-Sep-14 | | 31-Dec-13 | | | | | | | | | | | | | | | | |
Non-accrual loans: | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | — | | | 144 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial, secured by real estate | 4,476 | | | 1,418 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Agricultural | 68 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Residential real estate | 1,720 | | | 1,399 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total non-accrual loans | 6,264 | | | 2,961 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Past-due 90 days or more and still accruing | 111 | | | 250 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total non-accrual and past-due 90 days or more and still accruing | 6,375 | | | 3,211 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Accruing restructured loans | 14,462 | | | 15,151 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Total | 20,837 | | | 18,362 | | | | | | | | | | | | | | | | | |
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The allowance for loan losses for the three and nine months ended September 30, 2014 and 2013 are as follows (in thousands): |
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| | | | | | | | | | | | | | | | | | | | | |
| Commercial | | Commercial, Secured by | | Residential | | Consumer | | Agricultural | | Other | | Total |
& Industrial | Real Estate | Real Estate |
Three Months Ended September 30, 2014 |
Allowance for loan losses: | | | | | | | | | | | | | |
Balance, beginning of period | $ | 331 | | | 2,068 | | | 916 | | | 69 | | | 8 | | | 2 | | | 3,394 | |
|
Provision charged to expenses | 75 | | | 97 | | | 201 | | | 5 | | | 3 | | | 20 | | | 401 | |
|
Losses charged off | (261 | ) | | (112 | ) | | (106 | ) | | (24 | ) | | — | | | (32 | ) | | (535 | ) |
|
Recoveries | 1 | | | — | | | 1 | | | 25 | | | — | | | 11 | | | 38 | |
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Balance, end of period | $ | 146 | | | 2,053 | | | 1,012 | | | 75 | | | 11 | | | 1 | | | 3,298 | |
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| | | | | | | | | | | | | |
Nine Months Ended September 30, 2014 |
Allowance for loan losses: | | | | | | | | | | | | | |
Balance, beginning of year | $ | 175 | | | 2,520 | | | 826 | | | 66 | | | — | | | 1 | | | 3,588 | |
|
Provision charged to expenses | 221 | | | 16 | | | 440 | | | 19 | | | 11 | | | 30 | | | 737 | |
|
Losses charged off | (261 | ) | | (483 | ) | | (281 | ) | | (85 | ) | | — | | | (65 | ) | | (1,175 | ) |
|
Recoveries | 11 | | | — | | | 27 | | | 75 | | | — | | | 35 | | | 148 | |
|
Balance, end of period | $ | 146 | | | 2,053 | | | 1,012 | | | 75 | | | 11 | | | 1 | | | 3,298 | |
|
| | | | | | | | | | | | | |
Three Months Ended September 30, 2013 |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | |
|
Balance, beginning of period | $ | 169 | | | 2,373 | | | 804 | | | 78 | | | — | | | 2 | | | 3,426 | |
|
Provision charged to expenses | (9 | ) | | 7 | | | 150 | | | 20 | | | — | | | 10 | | | 178 | |
|
Losses charged off | (1 | ) | | — | | | (169 | ) | | (63 | ) | | — | | | (23 | ) | | (256 | ) |
|
Recoveries | 4 | | | 15 | | | 8 | | | 37 | | | — | | | 11 | | | 75 | |
|
Balance, end of period | $ | 163 | | | 2,395 | | | 793 | | | 72 | | | — | | | — | | | 3,423 | |
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| | | | | | | | | | | | | |
Nine Months Ended September 30, 2013 |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | |
|
Balance, beginning of year | $ | 320 | | | 2,296 | | | 712 | | | 108 | | | — | | | 1 | | | 3,437 | |
|
Provision charged to expenses | (41 | ) | | 107 | | | 268 | | | 14 | | | — | | | 21 | | | 369 | |
|
Losses charged off | (120 | ) | | (34 | ) | | (208 | ) | | (148 | ) | | — | | | (56 | ) | | (566 | ) |
|
Recoveries | 4 | | | 26 | | | 21 | | | 98 | | | — | | | 34 | | | 183 | |
|
Balance, end of period | $ | 163 | | | 2,395 | | | 793 | | | 72 | | | — | | | — | | | 3,423 | |
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A breakdown of the allowance for loan losses and the loan portfolio by loan segment at September 30, 2014 and December 31, 2013 are as follows (in thousands): |
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| | | | | | | | | | | | | | | | | | | | | |
| Commercial | | Commercial, Secured by | | Residential | | Consumer | | Agricultural | | Other | | Total |
& Industrial | Real Estate | Real Estate |
30-Sep-14 | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 12 | | | 430 | | | 283 | | | — | | | — | | | — | | | 725 | |
|
Collectively evaluated for impairment | 134 | | | 1,535 | | | 729 | | | 75 | | | 11 | | | 1 | | | 2,485 | |
|
Acquired credit impaired loans | — | | | 88 | | | — | | | — | | | — | | | — | | | 88 | |
|
Balance, end of period | $ | 146 | | | 2,053 | | | 1,012 | | | 75 | | | 11 | | | 1 | | | 3,298 | |
|
| | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 408 | | | 13,316 | | | 2,042 | | | 18 | | | — | | | — | | | 15,784 | |
|
Collectively evaluated for impairment | 32,858 | | | 344,134 | | | 242,897 | | | 19,265 | | | 9,132 | | | 2,103 | | | 650,389 | |
|
Acquired credit impaired loans | 1,698 | | | 13,729 | | | 3,549 | | | 101 | | | 117 | | | 548 | | | 19,742 | |
|
Balance, end of period | $ | 34,964 | | | 371,179 | | | 248,488 | | | 19,384 | | | 9,249 | | | 2,651 | | | 685,915 | |
|
| | | | | | | | | | | | | |
31-Dec-13 | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 2 | | | 760 | | | 270 | | | — | | | — | | | — | | | 1,032 | |
|
Collectively evaluated for impairment | 173 | | | 1,760 | | | 556 | | | 66 | | | — | | | 1 | | | 2,556 | |
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Acquired credit impaired loans | — | | | — | | | — | | | — | | | — | | | — | | | — | |
|
Balance, end of period | $ | 175 | | | 2,520 | | | 826 | | | 66 | | | — | | | 1 | | | 3,588 | |
|
| | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 165 | | | 14,522 | | | 2,132 | | | 27 | | | — | | | — | | | 16,846 | |
|
Collectively evaluated for impairment | 28,809 | | | 295,028 | | | 212,378 | | | 12,703 | | | 2,472 | | | 91 | | | 551,481 | |
|
Acquired credit impaired loans | 332 | | | 4,363 | | | 1,332 | | | — | | | — | | | — | | | 6,027 | |
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Balance, end of period | $ | 29,306 | | | 313,913 | | | 215,842 | | | 12,730 | | | 2,472 | | | 91 | | | 574,354 | |
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The risk characteristics of LCNB's material loan portfolio segments are as follows: |
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Commercial and Industrial Loans. LCNB’s commercial and industrial loan portfolio consists of loans for various purposes, including loans to fund working capital requirements (such as inventory and receivables financing) and purchases of machinery and equipment. LCNB offers a variety of commercial and industrial loan arrangements, including term loans, balloon loans, and lines of credit. Most commercial and industrial loans have a variable rate, with adjustments occurring monthly, annually, every three years, or every five years. Adjustments are generally based on a publicly available index rate plus a margin. The margin varies based on the terms and collateral securing the loan. Commercial and industrial loans are offered to businesses and professionals for short and medium terms on both a collateralized and uncollateralized basis. Commercial and industrial loans typically are underwritten on the basis of the borrower’s ability to make repayment from the cash flow of the business. Collateral, when obtained, may include liens on furniture, fixtures, equipment, inventory, receivables, or other assets. As a result, such loans involve complexities, variables, and risks that require thorough underwriting and more robust servicing than other types of loans. |
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Commercial, Secured by Real Estate Loans. Commercial real estate loans include loans secured by a variety of commercial, retail, and office buildings, religious facilities, multifamily (more than two-family) residential properties, construction and land development loans, and other land loans. Commercial real estate loan products generally amortize over five to twenty-five years and are payable in monthly principal and interest installments. Some have balloon payments due within one to ten years after the origination date. Many have adjustable interest rates with adjustment periods ranging from one to ten years, some of which are subject to established “floor” interest rates. |
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Commercial real estate loans are underwritten based on the ability of the property, in the case of income producing property, or the borrower’s business to generate sufficient cash flow to amortize the debt. Secondary emphasis is placed upon global debt service, collateral value, financial strength of any guarantors, and other factors. Commercial real estate loans are generally originated with a 75 percent maximum loan to appraised value ratio. |
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Residential Real Estate Loans. Residential real estate loans include loans secured by first or second mortgage liens on one to two-family residential property. Home equity lines of credit and mortgage loans secured by owner-occupied agricultural property are included in this category. First and second mortgage loans are generally amortized over five to thirty years with monthly principal and interest payments. Home equity lines of credit generally have a five year draw period with interest only payments followed by a repayment period with monthly payments based on the amount outstanding. LCNB offers both fixed and adjustable rate mortgage loans. Adjustable rate loans are available with adjustment periods ranging between one to ten years and adjust according to an established index plus a margin, subject to certain floor and ceiling rates. Home equity lines of credit have a variable rate based on the Wall Street Journal prime rate plus a margin. |
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LCNB does not originate reverse mortgage loans or residential real estate loans generally considered to be “subprime.” |
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Residential real estate loans are underwritten primarily based on the borrower’s ability to repay, prior credit history, and the value of the collateral. LCNB requires private mortgage insurance for first mortgage loans that have a loan to appraised value ratio of greater than 80%. |
Consumer Loans. LCNB’s portfolio of consumer loans generally includes secured and unsecured loans to individuals for household, family and other personal expenditures. Secured loans include loans to fund the purchase of automobiles, recreational vehicles, boats, and similar acquisitions. Consumer loans made by LCNB generally have fixed rates and terms ranging up to 72 months, depending upon the nature of the collateral, size of the loan, and other relevant factors. |
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Consumer loans generally have higher interest rates, but pose additional risks of collectability and loss when compared to certain other types of loans. Collateral, if present, is generally subject to damage, wear, and depreciation. The borrower’s ability to repay is of primary importance in the underwriting of consumer loans. |
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Agricultural Loans. LCNB’s portfolio of agricultural loans includes loans for financing agricultural production or for financing the purchase of equipment used in the production of agricultural products. LCNB’s agricultural loans are generally secured by farm machinery, livestock, crops, vehicles, or other agri-related collateral. |
LCNB uses a risk-rating system to quantify loan quality. A loan is assigned to a risk category based on relevant information about the ability of the borrower to service the debt including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The categories used are: |
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| | | | | | | | | | | | | | | | | | | | | |
• | Pass – loans categorized in this category are higher quality loans that do not fit any of the other categories described below. | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
• | Other Assets Especially Mentioned (OAEM) - loans in this category are currently protected but are potentially weak. These loans constitute a risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an undue risk in light of the circumstances surrounding a specific asset. | | | | | | | | | | | | | | | | | | | | |
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• | Substandard – loans in this category are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that LCNB will sustain some loss if the deficiencies are not corrected. | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
• | Doubtful – loans classified in this category have all the weaknesses inherent in loans classified 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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A breakdown of the loan portfolio by credit quality indicators at September 30, 2014 and December 31, 2013 is as follows (in thousands): |
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| | | | | | | | | | | | | | | | | | | | | |
| Pass | | OAEM | | Substandard | | Doubtful | | Total | | | | | | |
September 30, 2014 | | | | | | | | | | | | | | | |
Commercial & industrial | $ | 33,821 | | | — | | | 1,143 | | | — | | | 34,964 | | | | | | | |
| | | | | |
Commercial, secured by real estate | 342,558 | | | 5,256 | | | 23,365 | | | — | | | 371,179 | | | | | | | |
| | | | | |
Residential real estate | 239,646 | | | 937 | | | 7,905 | | | — | | | 248,488 | | | | | | | |
| | | | | |
Consumer | 19,222 | | | — | | | 162 | | | — | | | 19,384 | | | | | | | |
| | | | | |
Agricultural | 9,132 | | | — | | | 117 | | | — | | | 9,249 | | | | | | | |
| | | | | |
Other | 2,103 | | | — | | | 548 | | | — | | | 2,651 | | | | | | | |
| | | | | |
Total | $ | 646,482 | | | 6,193 | | | 33,240 | | | — | | | 685,915 | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Commercial & industrial | $ | 27,563 | | | 44 | | | 1,699 | | | — | | | 29,306 | | | | | | | |
| | | | | |
Commercial, secured by real estate | 295,189 | | | 3,967 | | | 14,757 | | | — | | | 313,913 | | | | | | | |
| | | | | |
Residential real estate | 208,881 | | | 1,136 | | | 5,825 | | | — | | | 215,842 | | | | | | | |
| | | | | |
Consumer | 12,681 | | | — | | | 49 | | | — | | | 12,730 | | | | | | | |
| | | | | |
Agricultural | 2,472 | | | — | | | — | | | — | | | 2,472 | | | | | | | |
| | | | | |
Other | 91 | | | — | | | — | | | — | | | 91 | | | | | | | |
| | | | | |
Total | $ | 546,877 | | | 5,147 | | | 22,330 | | | — | | | 574,354 | | | | | | | |
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A loan portfolio aging analysis at September 30, 2014 and December 31, 2013 is as follows (in thousands): |
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| | | | | | | | | | | | | | | | | | | | | |
| 30-59 Days | | 60-89 Days | | Greater Than | | Total | | Current | | Total Loans | | Total Loans Greater Than |
Past Due | Past Due | 90 Days | Past Due | Receivable | 90 Days and |
| | Past Due | | | Accruing |
September 30, 2014 | | | | | | | | | | | | | |
Commercial & industrial | $ | 22 | | | — | | | — | | | 22 | | | 34,942 | | | 34,964 | | | — | |
|
Commercial, secured by real estate | 738 | | | 573 | | | 3,126 | | | 4,437 | | | 366,742 | | | 371,179 | | | 70 | |
|
Residential real estate | 1,727 | | | 629 | | | 1,322 | | | 3,678 | | | 244,810 | | | 248,488 | | | — | |
|
Consumer | 102 | | | 12 | | | 41 | | | 155 | | | 19,229 | | | 19,384 | | | 41 | |
|
Agricultural | — | | | — | | | — | | | — | | | 9,249 | | | 9,249 | | | — | |
|
Other | 68 | | | — | | | — | | | 68 | | | 2,583 | | | 2,651 | | | — | |
|
Total | $ | 2,657 | | | 1,214 | | | 4,489 | | | 8,360 | | | 677,555 | | | 685,915 | | | 111 | |
|
| | | | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | | | | |
|
Commercial & industrial | $ | 277 | | | — | | | 144 | | | 421 | | | 28,885 | | | 29,306 | | | — | |
|
Commercial, secured by real estate | 951 | | | 582 | | | 1,174 | | | 2,707 | | | 311,206 | | | 313,913 | | | — | |
|
Residential real estate | 1,131 | | | 299 | | | 1,604 | | | 3,034 | | | 212,808 | | | 215,842 | | | 236 | |
|
Consumer | 38 | | | 35 | | | 13 | | | 86 | | | 12,644 | | | 12,730 | | | 14 | |
|
Agricultural | — | | | — | | | — | | | — | | | 2,472 | | | 2,472 | | | — | |
|
Other | 91 | | | — | | | — | | | 91 | | | — | | | 91 | | | — | |
|
Total | $ | 2,488 | | | 916 | | | 2,935 | | | 6,339 | | | 568,015 | | | 574,354 | | | 250 | |
|
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Impaired loans, including acquired credit impaired loans, at September 30, 2014 and December 31, 2013 are as follows (in thousands): |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | | | | | | | | | | | |
September 30, 2014 | | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | |
Commercial & industrial | $ | 1,716 | | | 2,942 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial, secured by real estate | 22,808 | | | 28,315 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Residential real estate | 4,114 | | | 5,726 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer | 101 | | | 168 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Agricultural | 117 | | | 634 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Other | 548 | | | 774 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total | $ | 29,404 | | | 38,559 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial & industrial | $ | 390 | | | 395 | | | 11 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial, secured by real estate | 4,237 | | | 4,691 | | | 518 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Residential real estate | 1,427 | | | 1,592 | | | 283 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer | 18 | | | 18 | | | 1 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total | $ | 6,072 | | | 6,696 | | | 813 | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Total: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial & industrial | $ | 2,106 | | | 3,337 | | | 11 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial, secured by real estate | 27,045 | | | 33,006 | | | 518 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Residential real estate | 5,541 | | | 7,318 | | | 283 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer | 119 | | | 186 | | | 1 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Agricultural | 117 | | | 634 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Other | 548 | | | 774 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total | $ | 35,476 | | | 45,255 | | | 813 | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial & industrial | $ | 332 | | | 531 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial, secured by real estate | 10,883 | | | 12,317 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Residential real estate | 2,096 | | | 2,967 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer | — | | | — | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total | $ | 13,311 | | | 15,815 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial & industrial | $ | 165 | | | 270 | | | 2 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial, secured by real estate | 7,725 | | | 7,725 | | | 760 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Residential real estate | 1,645 | | | 1,663 | | | 270 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer | 27 | | | 27 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total | $ | 9,562 | | | 9,685 | | | 1,032 | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Total: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial & industrial | $ | 497 | | | 801 | | | 2 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Commercial, secured by real estate | 18,608 | | | 20,042 | | | 760 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Residential real estate | 3,741 | | | 4,630 | | | 270 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Consumer | 27 | | | 27 | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Total | $ | 22,873 | | | 25,500 | | | 1,032 | | | | | | | | | | | | | |
| | | | | | | | | | | |
The following presents information related to the average recorded investment and interest income recognized on impaired loans, including acquired credit impaired loans, for the three and nine months ended September 30, 2014 and 2013 (in thousands): |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| 2014 | | 2013 | | | | | | | | | |
| Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized | | | | | | | | | |
Three Months Ended September 30, | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | |
Commercial & industrial | $ | 2,053 | | | 38 | | | 349 | | | 6 | | | | | | | | | | |
| | | | | | | | |
Commercial, secured by real estate | 22,768 | | | 310 | | | 7,733 | | | 280 | | | | | | | | | | |
| | | | | | | | |
Residential real estate | 4,328 | | | 98 | | | 2,158 | | | 49 | | | | | | | | | | |
| | | | | | | | |
Consumer | 158 | | | 2 | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Agricultural | 116 | | | 7 | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Other | 543 | | | 10 | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Total | $ | 29,966 | | | 465 | | | 10,240 | | | 335 | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | |
Commercial & industrial | $ | 393 | | | 6 | | | 166 | | | — | | | | | | | | | | |
| | | | | | | | |
Commercial, secured by real estate | 4,298 | | | 46 | | | 11,249 | | | 95 | | | | | | | | | | |
| | | | | | | | |
Residential real estate | 1,341 | | | 9 | | | 1,226 | | | 6 | | | | | | | | | | |
| | | | | | | | |
Consumer | 18 | | | — | | | 34 | | | 1 | | | | | | | | | | |
| | | | | | | | |
Agricultural | — | | | — | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Other | — | | | — | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Total | $ | 6,050 | | | 61 | | | 12,675 | | | 102 | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | | |
Total: | | | | | | | | | | | | | | | | |
Commercial & industrial | $ | 2,446 | | | 44 | | | 515 | | | 6 | | | | | | | | | | |
| | | | | | | | |
Commercial, secured by real estate | 27,066 | | | 356 | | | 18,982 | | | 375 | | | | | | | | | | |
| | | | | | | | |
Residential real estate | 5,669 | | | 107 | | | 3,384 | | | 55 | | | | | | | | | | |
| | | | | | | | |
Consumer | 176 | | | 2 | | | 34 | | | 1 | | | | | | | | | | |
| | | | | | | | |
Agricultural | 116 | | | 7 | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Other | 543 | | | 10 | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Total | $ | 36,016 | | | 526 | | | 22,915 | | | 437 | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | | |
Nine Months Ended September 30, | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | |
Commercial & industrial | $ | 2,085 | | | 76 | | | 793 | | | 30 | | | | | | | | | | |
| | | | | | | | |
Commercial, secured by real estate | 23,549 | | | 698 | | | 8,126 | | | 519 | | | | | | | | | | |
| | | | | | | | |
Residential real estate | 4,620 | | | 179 | | | 2,261 | | | 133 | | | | | | | | | | |
| | | | | | | | |
Consumer | 196 | | | 8 | | | 1 | | | — | | | | | | | | | | |
| | | | | | | | |
Agricultural | 126 | | | 9 | | | 16 | | | 7 | | | | | | | | | | |
| | | | | | | | |
Other | 560 | | | 17 | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Total | $ | 31,136 | | | 987 | | | 11,197 | | | 689 | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Commercial & industrial | $ | 274 | | | 17 | | | 193 | | | 1 | | | | | | | | | | |
| | | | | | | | |
Commercial, secured by real estate | 4,209 | | | 97 | | | 10,920 | | | 278 | | | | | | | | | | |
| | | | | | | | |
Residential real estate | 1,176 | | | 39 | | | 1,201 | | | 23 | | | | | | | | | | |
| | | | | | | | |
Consumer | 18 | | | 1 | | | 21 | | | 2 | | | | | | | | | | |
| | | | | | | | |
Agricultural | — | | | — | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Other | — | | | — | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Total | $ | 5,677 | | | 154 | | | 12,335 | | | 304 | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | | |
Total: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Commercial & industrial | $ | 2,359 | | | 93 | | | 986 | | | 31 | | | | | | | | | | |
| | | | | | | | |
Commercial, secured by real estate | 27,758 | | | 795 | | | 19,046 | | | 797 | | | | | | | | | | |
| | | | | | | | |
Residential real estate | 5,796 | | | 218 | | | 3,462 | | | 156 | | | | | | | | | | |
| | | | | | | | |
Consumer | 214 | | | 9 | | | 22 | | | 2 | | | | | | | | | | |
| | | | | | | | |
Agricultural | 126 | | | 9 | | | 16 | | | 7 | | | | | | | | | | |
| | | | | | | | |
Other | 560 | | | 17 | | | — | | | — | | | | | | | | | | |
| | | | | | | | |
Total | $ | 36,813 | | | 1,141 | | | 23,532 | | | 993 | | | | | | | | | | |
| | | | | | | | |
Loan modifications that were classified as troubled debt restructurings during the three and nine months ended September 30, 2014 and 2013 are as follows (dollars in thousands): |
| | |
| | | | | | | | | | | | | | | | | | | | | |
| 2014 | | 2013 | | |
| Number | | Pre-Modification Recorded Balance | | Post-Modification Recorded Balance | | Number | | Pre-Modification Recorded Balance | | Post-Modification Recorded Balance | | |
of Loans | of Loans | | |
Three Months Ended September 30, | | | | | | | | | | | | | |
Commercial & industrial | — | | | $ | — | | | — | | | — | | | $ | — | | | — | | | |
| |
Commercial, secured by real estate | 1 | | | 79 | | | 79 | | | 1 | | | 702 | | | 702 | | | |
| |
Residential real estate | 1 | | | 5 | | | 5 | | | — | | | — | | | — | | | |
| |
Consumer | — | | | — | | | — | | | — | | | — | | | — | | | |
| |
Total | 2 | | | $ | 84 | | | 84 | | | 1 | | | $ | 702 | | | 702 | | | |
| |
| | | | | | | | | | | | | |
Nine Months Ended September 30, | | | | | | | | | | | | | | | |
| |
Commercial & industrial | 7 | | | $ | 638 | | | 638 | | | 1 | | | $ | 22 | | | 22 | | | |
| |
Commercial, secured by real estate | 2 | | | 897 | | | 897 | | | 1 | | | 702 | | | 702 | | | |
| |
Residential real estate | 2 | | | 83 | | | 83 | | | 2 | | | 335 | | | 335 | | | |
| |
Consumer | 1 | | | 2 | | | 2 | | | 2 | | | 27 | | | 27 | | | |
| |
Total | 12 | | | $ | 1,620 | | | 1,620 | | | 6 | | | $ | 1,086 | | | 1,086 | | | |
| |
|
Each restructured loan is separately negotiated with the borrower and includes terms and conditions that reflect the borrower's ability to pay the debt as modified. Modifications may include interest only payments for a period of time, temporary or permanent reduction of the loan's interest rate, capitalization of delinquent interest, or extensions of the maturity date. |
|
LCNB is not committed to lend additional funds to borrowers whose loan terms were modified in a troubled debt restructuring. |
|
A restructured automobile loan with a balance of $13,000 was charged off during the first quarter 2013, which was within twelve months of the loan's modification date. There were no other troubled debt restructurings that subsequently defaulted within twelve months of the restructuring date for the nine months ended September 30, 2014 and 2013. |