Loans and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2013 |
Loans and Allowance for Credit Losses [Abstract] | ' |
Loans and Allowance for Credit Losses | ' |
(3) Loans |
|
Loans held for investment are summarized by category as follows (in thousands): |
|
| 31-Dec | | | | | | | | | | | | | | |
| 2013 | 2012 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Commercial | $ | 5,020,565 | $ | 4,106,419 | | | | | | | | | | | | | | |
Mortgage finance | | 2,784,265 | | 3,175,272 | | | | | | | | | | | | | | |
Construction | | 1,262,905 | | 737,637 | | | | | | | | | | | | | | |
Real estate | | 2,146,228 | | 1,892,451 | | | | | | | | | | | | | | |
Consumer | | 15,350 | | 19,493 | | | | | | | | | | | | | | |
Equipment leases | | 93,160 | | 69,470 | | | | | | | | | | | | | | |
Gross loans held for investment | | 11,322,473 | | 10,000,742 | | | | | | | | | | | | | | |
Deferred income (net of direct origination costs) | | -51,899 | | -39,935 | | | | | | | | | | | | | | |
Allowance for loan losses | | -87,604 | | -74,337 | | | | | | | | | | | | | | |
Total | $ | 11,182,970 | $ | 9,886,470 | | | | | | | | | | | | | | |
Commercial Loans and Leases. Our commercial loan portfolio is comprised of lines of credit for working capital and term loans and leases to finance equipment and other business assets. Our energy production loans are generally collateralized with proven reserves based on appropriate valuation standards. Our commercial loans and leases are underwritten after carefully evaluating and understanding the borrower's ability to operate profitably. Our underwriting standards are designed to promote relationship banking rather than making loans on a transaction basis. Our lines of credit typically are limited to a percentage of the value of the assets securing the line. Lines of credit and term loans typically are reviewed annually and are supported by accounts receivable, inventory, equipment and other assets of our clients' businesses. |
|
Mortgage finance loans. Our mortgage finance loans consist of ownership interests purchased in single-family residential mortgages funded through our warehouse lending group. These loans are typically on our balance sheet for 10 to 20 days or less. We have agreements with mortgage lenders and purchase interests in individual loans they originate. All loans are underwritten consistent with established programs for permanent financing with financially sound investors. Substantially all loans are conforming loans. |
|
Construction Loans. Our construction loan portfolio consists primarily of single- and multi-family residential properties and commercial projects used in manufacturing, warehousing, service or retail businesses. Our construction loans generally have terms of one to three years. We typically make construction loans to developers, builders and contractors that have an established record of successful project completion and loan repayment and have a substantial investment in the borrowers' equity. However, construction loans are generally based upon estimates of costs and value associated with the completed project. Sources of repayment for these types of loans may be pre-committed permanent loans from other lenders, sales of developed property, or an interim loan commitment from us until permanent financing is obtained. The nature of these loans makes ultimate repayment extremely sensitive to overall economic conditions. Borrowers may not be able to correct conditions of default in loans, increasing risk of exposure to classification, non-performing status, reserve allocation and actual credit loss and foreclosure. These loans typically have floating rates and commitment fees. |
|
Real Estate Loans. A portion of our real estate loan portfolio is comprised of loans secured by properties other than market risk or investment-type real estate. Market risk loans are real estate loans where the primary source of repayment is expected to come from the sale or lease of the real property collateral. We generally provide temporary financing for commercial and residential property. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Our real estate loans generally have maximum terms of five to seven years, and we provide loans with both floating and fixed rates. We generally avoid long-term loans for commercial real estate held for investment. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. Appraised values may be highly variable due to market conditions and the impact of the inability of potential purchasers and lessees to obtain financing and lack of transactions at comparable values. |
|
As of December 31, 2013, a substantial majority of the principal amount of the loans held for investment in our portfolio was to businesses and individuals in Texas. This geographic concentration subjects the loan portfolio to the general economic conditions within this area. The risks created by this concentration have been considered by management in the determination of the adequacy of the allowance for loan losses. Management believes the allowance for loan losses is appropriate to cover estimated losses on loans at each balance sheet date. |
|
At December 31, 2013, we had a blanket floating lien based on certain real estate loans used as collateral for FHLB borrowings. |
|
The reserve for loan losses is comprised of specific reserves for impaired loans and an estimate of losses inherent in the portfolio at the balance sheet date, but not yet identified with specified loans. We regularly evaluate our reserve for loan losses to maintain an appropriate level to absorb estimated loan losses inherent in the loan portfolio. Factors contributing to the determination of reserves include the credit worthiness of the borrower, changes in the value of pledged collateral, and general economic conditions. All loan commitments rated substandard or worse and greater than $500,000 are specifically reviewed for loss potential. For loans deemed to be impaired, a specific allocation is assigned based on the losses expected to be realized from those loans. For purposes of determining the general reserve, the portfolio is segregated by product types to recognize differing risk profiles among categories, and then further segregated by credit grades. Credit grades are assigned to all loans. Each credit grade is assigned a risk factor, or reserve allocation percentage. These risk factors are multiplied by the outstanding principal balance and risk-weighted by product type to calculate the required reserve. A similar process is employed to calculate a reserve assigned to off-balance sheet commitments, specifically unfunded loan commitments and letters of credit, and any needed reserve is recorded in other liabilities. Even though portions of the allowance may be allocated to specific loans, the entire allowance is available for any credit that, in management's judgment, should be charged off. |
|
We have several pass credit grades that are assigned to loans based on varying levels of risk, ranging from credits that are secured by cash or marketable securities, to watch credits which have all the characteristics of an acceptable credit risk but warrant more than the normal level of monitoring. Within our criticized/classified credit grades are special mention, substandard, and doubtful. Special mention loans are those that are currently protected by sound worth and paying capacity of the borrower, but that are potentially weak and constitute an additional credit risk. The loan has the potential to deteriorate to a substandard grade due to the existence of financial or administrative deficiencies. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Some substandard loans are inappropriately protected by sound worth and paying capacity of the borrower and of the collateral pledged and may be considered impaired. Substandard loans can be accruing or can be on nonaccrual depending on the circumstances of the individual loans. Loans classified as doubtful have all the weaknesses inherent in substandard loans with the added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable. The possibility of loss is extremely high. All doubtful loans are on nonaccrual. |
|
The reserve allocation percentages assigned to each credit grade have been developed based primarily on an analysis of our historical loss rates. The allocations are adjusted for certain qualitative factors for such things as general economic conditions, changes in credit policies and lending standards. Historical loss rates are adjusted to account for current environmental conditions which we believe are likely to cause loss rates to be higher or lower than past experience. Each quarter we produce an adjustment range for environmental factors unique to us and our market. Changes in the trend and severity of problem loans can cause the estimation of losses to differ from past experience. In addition, the reserve considers the results of reviews performed by independent third party reviewers as reflected in their confirmations of assigned credit grades within the portfolio. The portion of the allowance that is not derived by the allowance allocation percentages compensates for the uncertainty and complexity in estimating loan and lease losses including factors and conditions that may not be fully reflected in the determination and application of the allowance allocation percentages. We evaluate many factors and conditions in determining the unallocated portion of the allowance, including the economic and business conditions affecting key lending areas, credit quality trends and general growth in the portfolio. The allowance is considered appropriate, given management's assessment of potential losses within the portfolio as of the evaluation date, the significant growth in the loan and lease portfolio, current economic conditions in the Company's market areas and other factors. |
|
The methodology used in the periodic review of reserve adequacy, which is performed at least quarterly, is designed to be dynamic and responsive to changes in portfolio credit quality. The changes are reflected in the general reserve and in specific reserves as the collectability of larger classified loans is evaluated with new information. As our portfolio has matured, historical loss ratios have been closely monitored, and our reserve adequacy relies primarily on our loss history. Currently, the review of reserve adequacy is performed by executive management and presented to our board of directors for their review, consideration and ratification on a quarterly basis. |
|
The following tables summarize the credit risk profile of our loan portfolio by internally assigned grades and nonaccrual status as of December 31, 2013 and 2012 (in thousands): |
|
31-Dec-13 | | | Mortgage | | | | | | | | | | | | | |
| | Commercial | Finance | Construction | Real Estate | Consumer | Leases | Total | | | |
Grade: | | | | | | | | | | | | | | | | | |
| Pass | $ | 4,908,944 | $ | 2,784,265 | $ | 1,261,995 | $ | 2,099,450 | $ | 15,251 | $ | 89,317 | $ | 11,159,222 | | | |
| Special mention | | 24,132 | | - | | 102 | | 6,338 | | - | | 51 | | 30,623 | | | |
| Substandard-accruing | | 74,593 | | - | | 103 | | 21,770 | | 45 | | 3,742 | | 100,253 | | | |
| Non-accrual | | 12,896 | | - | | 705 | | 18,670 | | 54 | | 50 | | 32,375 | | | |
Total loans held for investment | $ | 5,020,565 | $ | 2,784,265 | $ | 1,262,905 | $ | 2,146,228 | $ | 15,350 | $ | 93,160 | $ | 11,322,473 | | | |
| | | | | | | | | | | | | | | | | | |
31-Dec-12 | | | Mortgage | | | | | | | | | | | | | |
| | Commercial | Finance | Construction | Real Estate | Consumer | Leases | Total | | | |
Grade: | | | | | | | | | | | | | | | | | |
| Pass | $ | 4,013,538 | $ | 3,175,272 | $ | 703,673 | $ | 1,816,027 | $ | 19,436 | $ | 68,327 | $ | 9,796,273 | | | |
| Special mention | | 33,137 | | - | | 11,957 | | 12,461 | | - | | 919 | | 58,474 | | | |
| Substandard-accruing | | 44,371 | | - | | 4,790 | | 40,897 | | - | | 104 | | 90,162 | | | |
| Non-accrual | | 15,373 | | - | | 17,217 | | 23,066 | | 57 | | 120 | | 55,833 | | | |
Total loans held for investment | $ | 4,106,419 | $ | 3,175,272 | $ | 737,637 | $ | 1,892,451 | $ | 19,493 | $ | 69,470 | $ | 10,000,742 | | | |
The following table details activity in the reserve for loan losses by portfolio segment for the years ended December 31, 2013 and 2012. Allocation of a portion of the reserve to one category of loans does not preclude its availability to absorb losses in other categories. |
31-Dec-13 | | | Mortgage | | | | | | | | | | | | |
(in thousands) | Commercial | Finance | Construction | Real Estate | Consumer | Leases | Unallocated | Total |
| | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 21,547 | $ | - | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 |
Provision for loan losses | | 23,693 | | - | | 2,456 | | -6,809 | | -105 | | 325 | | -1,395 | | 18,165 |
Charge-offs | | 6,575 | | - | | - | | 144 | | 45 | | 2 | | - | | 6,766 |
Recoveries | | 1,203 | | - | | - | | 270 | | 73 | | 322 | | - | | 1,868 |
Net charge-offs (recoveries) | | 5,372 | | - | | - | | -126 | | -28 | | -320 | | - | | 4,898 |
Ending balance | $ | 39,868 | $ | - | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 |
| | | | | | | | | | | | | | | | | | |
Period end amount allocated to: | | | | | | | | | | | | | | | | |
| Loans individually evaluated | | | | | | | | | | | | | | | | |
| | for impairment | $ | 2,015 | $ | - | $ | - | $ | 1,143 | $ | 8 | $ | 8 | $ | - | $ | 3,174 |
| Loans collectively evaluated | | | | | | | | | | | | | | | | |
| | for impairment | | 37,853 | | - | | 14,553 | | 23,067 | | 141 | | 3,097 | | 5,719 | | 84,430 |
Ending balance | $ | 39,868 | $ | - | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 |
| | | | | | | | | | | | | | | | | | |
31-Dec-12 | | | Mortgage | | | | | | | | | | | | |
(in thousands) | Commercial | Finance | Construction | Real Estate | Consumer | Leases | Unallocated | Total |
| | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 17,337 | $ | - | $ | 7,845 | $ | 33,721 | $ | 223 | $ | 2,356 | $ | 8,813 | $ | 70,295 |
Provision for loan losses | | 10,086 | | - | | 4,242 | | -2,741 | | 19 | | 200 | | -1,699 | | 10,107 |
Charge-offs | | 6,708 | | - | | - | | 899 | | 49 | | 204 | | - | | 7,860 |
Recoveries | | 832 | | - | | 10 | | 812 | | 33 | | 108 | | - | | 1,795 |
Net charge-offs (recoveries) | | 5,876 | | - | | -10 | | 87 | | 16 | | 96 | | - | | 6,065 |
Ending balance | $ | 21,547 | $ | - | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 |
| | | | | | | | | | | | | | | | | | |
Period end amount allocated to: | | | | | | | | | | | | | | | | |
| Loans individually evaluated | | | | | | | | | | | | | | | | |
| | for impairment | $ | 2,983 | $ | - | $ | 14 | $ | 899 | $ | 16 | $ | 18 | $ | - | $ | 3,930 |
| Loans collectively evaluated | | | | | | | | | | | | | | | | |
| | for impairment | | 18,564 | | - | | 12,083 | | 29,994 | | 210 | | 2,442 | | 7,114 | | 70,407 |
Ending balance | $ | 21,547 | $ | - | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 |
Our recorded investment in loans as of December 31, 2013 and 2012 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of our impairment methodology was as follows (in thousands): |
| | | | | Mortgage | | | | | | | | | | | | | |
31-Dec-13 | | Commercial | | Finance | | Construction | | Real Estate | | Consumer | | Lease | | Total | | | |
| | | | | | | | | | | | | | | | | | |
Loans individually evaluated | | | | | | | | | | | | | | | | | |
| for impairment | $ | 15,140 | $ | - | $ | 705 | $ | 24,027 | $ | 54 | $ | 50 | $ | 39,976 | | | |
Loans collectively evaluated | | | | | | | | | | | | | | | | | |
| for impairment | | 5,005,425 | | 2,784,265 | | 1,262,200 | | 2,122,201 | | 15,296 | | 93,110 | | 11,282,497 | | | |
Total | $ | 5,020,565 | $ | 2,784,265 | $ | 1,262,905 | $ | 2,146,228 | $ | 15,350 | $ | 93,160 | $ | 11,322,473 | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | Mortgage | | | | | | | | | | | | | |
31-Dec-12 | | Commercial | | Finance | | Construction | | Real Estate | | Consumer | | Lease | | Total | | | |
| | | | | | | | | | | | | | | | | | |
Loans individually evaluated | | | | | | | | | | | | | | | | | |
| for impairment | $ | 15,373 | $ | - | $ | 18,179 | $ | 32,512 | $ | 57 | $ | 120 | $ | 66,241 | | | |
Loans collectively evaluated | | | | | | | | | | | | | | | | | |
| for impairment | | 4,091,046 | | 3,175,272 | | 719,458 | | 1,859,939 | | 19,436 | | 69,350 | | 9,934,501 | | | |
Total | $ | 4,106,419 | $ | 3,175,272 | $ | 737,637 | $ | 1,892,451 | $ | 19,493 | $ | 69,470 | $ | 10,000,742 | | | |
We have traditionally maintained an unallocated reserve component to allow for uncertainty in economic and other conditions affecting the quality of the loan portfolio. The unallocated portion of our loan loss reserve has decreased since December 31, 2012. We believe the level of unallocated reserves at December 31, 2013 is warranted due to the continued uncertain economic environment which has produced more frequent losses, including those resulting from fraud by borrowers. Our methodology used to calculate the allowance considers historical losses, however, the historical loss rates for specific product types or credit risk grades may not fully incorporate the effects of continued weakness in the economy. |
Generally we place loans on non-accrual when there is a clear indication that the borrower's cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. When a loan is placed on non-accrual status, all previously accrued and unpaid interest is reversed. Interest income is subsequently recognized on a cash basis as long as the remaining unpaid principal amount of the loan is deemed to be fully collectible. If collectability is questionable, then cash payments are applied to principal. We recognized $2.4 million in interest income on non-accrual loans during 2013 compared to $2.6 million in 2012 and $2.2 million in 2011. Additional interest income that would have been recorded if the loans had been current during the years ended December 31, 2013, 2012 and 2011 totaled $2.5 million, $2.4 million and $5.9 million, respectively. As of December 31, 2013, none of our non-accrual loans were earning on a cash basis. A loan is placed back on accrual status when both principal and interest are current and it is probable that we will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement. The table below summarizes our non-accrual loans by type and purpose as of December 31, 2013 (in thousands): |
Commercial | | | | | | | | | | | | | | | | | |
| Business loans | $ | 12,896 | | | | | | | | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | |
| Market risk | | 705 | | | | | | | | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | |
| Market risk | | 15,607 | | | | | | | | | | | | | | | |
| Commercial | | 508 | | | | | | | | | | | | | | | |
| Secured by 1-4 family | | 2,555 | | | | | | | | | | | | | | | |
Consumer | | 54 | | | | | | | | | | | | | | | |
Leases | | 50 | | | | | | | | | | | | | | | |
Total non-accrual loans | $ | 32,375 | | | | | | | | | | | | | | | |
As of December 31, 2013, non-accrual loans included in the table above included $17.8 million related to loans that met the criteria for restructured. |
|
A loan held for investment is considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due (both principal and interest) according to the terms of the loan agreement. In accordance with FASB ASC 310 Receivables, we have included accruing restructured loans in our impaired loan totals. The following tables detail our impaired loans, by portfolio class as of December 31, 2013 and 2012 (in thousands) |
31-Dec-13 | | | | | | | | | | | | | | | | | | |
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 2,005 | $ | 2,005 | $ | - | $ | 4,265 | $ | - | | | | | | | | |
Energy loans | | 1,614 | | 3,443 | | - | | 969 | | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | 705 | | 705 | | - | | 3,111 | | 114 | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 13,524 | | 13,524 | | - | | 9,796 | | - | | | | | | | | |
Commercial | | 508 | | 508 | | - | | 5,458 | | - | | | | | | | | |
Secured by 1-4 family | | 1,320 | | 1,320 | | - | | 2,464 | | - | | | | | | | | |
Consumer | | - | | - | | - | | - | | - | | | | | | | | |
Equipment leases | | - | | - | | - | | - | | - | | | | | | | | |
Total impaired loans with no allowance recorded | $ | 19,676 | $ | 21,505 | $ | - | $ | 26,063 | $ | 114 | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 11,060 | $ | 12,425 | $ | 1,946 | $ | 14,240 | $ | - | | | | | | | | |
Energy loans | | 460 | | 460 | | 69 | | 913 | | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | - | | - | | - | | 160 | | - | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 6,289 | | 6,289 | | 822 | | 7,912 | | - | | | | | | | | |
Commercial | | - | | - | | - | | 477 | | - | | | | | | | | |
Secured by 1-4 family | | 2,387 | | 2,387 | | 321 | | 914 | | - | | | | | | | | |
Consumer | | 54 | | 54 | | 8 | | 43 | | - | | | | | | | | |
Equipment leases | | 50 | | 50 | | 8 | | 72 | | - | | | | | | | | |
Total impaired loans with an allowance recorded | $ | 20,300 | $ | 21,665 | $ | 3,174 | $ | 24,731 | $ | - | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Combined: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 13,065 | $ | 14,430 | $ | 1,946 | $ | 18,505 | $ | - | | | | | | | | |
Energy loans | | 2,074 | | 3,903 | | 69 | | 1,882 | | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | 705 | | 705 | | - | | 3,271 | | 114 | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 19,813 | | 19,813 | | 822 | | 17,708 | | - | | | | | | | | |
Commercial | | 508 | | 508 | | - | | 5,935 | | - | | | | | | | | |
Secured by 1-4 family | | 3,707 | | 3,707 | | 321 | | 3,378 | | - | | | | | | | | |
Consumer | | 54 | | 54 | | 8 | | 43 | | - | | | | | | | | |
Equipment leases | | 50 | | 50 | | 8 | | 72 | | - | | | | | | | | |
Total impaired loans | $ | 39,976 | $ | 43,170 | $ | 3,174 | $ | 50,794 | $ | 114 | | | | | | | | |
31-Dec-12 | | | | | | | | | | | | | | | | | | |
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 2,938 | $ | 2,938 | $ | - | $ | 1,409 | $ | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | 17,217 | | 17,217 | | - | | 18,571 | | 677 | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 9,061 | | 9,061 | | - | | 7,944 | | - | | | | | | | | |
Commercial | | 6,604 | | 6,604 | | - | | 6,451 | | - | | | | | | | | |
Secured by 1-4 family | | 2,632 | | 2,632 | | - | | 1,827 | | - | | | | | | | | |
Consumer | | - | | - | | - | | - | | - | | | | | | | | |
Equipment leases | | - | | - | | - | | - | | - | | | | | | | | |
Total impaired loans with no allowance recorded | $ | 38,452 | $ | 38,452 | $ | - | $ | 36,202 | $ | 677 | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 12,435 | $ | 18,391 | $ | 2,983 | $ | 15,484 | $ | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | 962 | | 962 | | 14 | | 321 | | - | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 11,439 | | 11,439 | | 535 | | 11,811 | | - | | | | | | | | |
Commercial | | 2,013 | | 2,013 | | 89 | | 671 | | - | | | | | | | | |
Secured by 1-4 family | | 763 | | 763 | | 275 | | 1,632 | | - | | | | | | | | |
Consumer | | 57 | | 57 | | 16 | | 59 | | - | | | | | | | | |
Equipment leases | | 120 | | 120 | | 18 | | 182 | | - | | | | | | | | |
Total impaired loans with an allowance recorded | $ | 27,789 | $ | 33,745 | $ | 3,930 | $ | 30,160 | $ | - | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Combined: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 15,373 | $ | 21,329 | $ | 2,983 | $ | 16,893 | $ | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | 18,179 | | 18,179 | | 14 | | 18,892 | | 677 | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 20,500 | | 20,500 | | 535 | | 19,755 | | - | | | | | | | | |
Commercial | | 8,617 | | 8,617 | | 89 | | 7,122 | | - | | | | | | | | |
Secured by 1-4 family | | 3,395 | | 3,395 | | 275 | | 3,459 | | - | | | | | | | | |
Consumer | | 57 | | 57 | | 16 | | 59 | | - | | | | | | | | |
Equipment leases | | 120 | | 120 | | 18 | | 182 | | - | | | | | | | | |
Total impaired loans | $ | 66,241 | $ | 72,197 | $ | 3,930 | $ | 66,362 | $ | 677 | | | | | | | | |
Average impaired loans outstanding during the years ended December 31, 2013, 2012 and 2011 totaled $40.0 million, $66.4 million and $71.0 million respectively. |
|
The table below provides an age analysis of our past due loans that are still accruing as of December 31, 2013 (in thousands): |
|
| | 30-59 Days Past Due | 60-89 Days Past Due | Greater Than 90 Days | Total Past Due | Current | Total(1) | | | | | |
Commercial | | | | | | | | | | | | | | | | | |
| Business loans | $ | 29,946 | $ | 7,683 | $ | 7,528 | $ | 45,157 | $ | 4,027,409 | $ | 4,072,566 | | | | | |
| Energy | | 5,239 | | 1,092 | | - | | 6,331 | | 928,772 | | 935,103 | | | | | |
Mortgage finance loans | | - | | - | | - | | - | | 2,784,265 | | 2,784,265 | | | | | |
Construction | | | | | | | | | | | | | | | | | |
| Market risk | | 1 | | - | | 103 | | 104 | | 1,245,388 | | 1,245,492 | | | | | |
| Secured by 1-4 family | | - | | - | | - | | - | | 16,708 | | 16,708 | | | | | |
Real estate | | | | | | | | | | | | | | | | | |
| Market risk | | 6,013 | | 3,100 | | - | | 9,113 | | 1,623,706 | | 1,632,819 | | | | | |
| Commercial | | 15,024 | | - | | - | | 15,024 | | 387,856 | | 402,880 | | | | | |
| Secured by 1-4 family | | 2,607 | | 266 | | 1,694 | | 4,567 | | 87,292 | | 91,859 | | | | | |
Consumer | | 37 | | 177 | | - | | 214 | | 15,082 | | 15,296 | | | | | |
Equipment leases | | 189 | | - | | - | | 189 | | 92,921 | | 93,110 | | | | | |
Total loans held for investment | $ | 59,056 | $ | 12,318 | $ | 9,325 | $ | 80,699 | $ | 11,209,399 | $ | 11,290,098 | | | | | |
(1) Loans past due 90 days and still accruing includes premium finance loans of $3.8 million. These loans are generally secured by obligations of insurance carriers to refund premiums on cancelled insurance policies. The refund of premiums from the insurance carriers can take 180 days or longer from the cancellation date. |
|
Restructured loans are loans on which, due to the borrower's financial difficulties, we have granted a concession that we would not otherwise consider for borrowers of similar credit quality. This may include a transfer of real estate or other assets from the borrower, a modification of loan terms, or a combination of the two. Modifications of terms that could potentially qualify as a restructuring include reduction of contractual interest rate, extension of the maturity date at a contractual interest rate lower than the current rate for new debt with similar risk, or a reduction of the face amount of debt, or either forgiveness of either principal or accrued interest. As of December 31, 2013, we have $1.9 million in loans considered restructured that are not on nonaccrual. These loans do not have unfunded commitments at December 31, 2013. Of the nonaccrual loans at December 31, 2013, $17.8 million met the criteria for restructured. A loan continues to qualify as restructured until a consistent payment history or change in borrower's financial condition has been evidenced, generally no less than twelve months. Assuming that the restructuring agreement specifies an interest rate at the time of the restructuring that is greater than or equal to the rate that we are willing to accept for a new extension of credit with comparable risk, then the loan no longer has to be considered a restructuring if it is in compliance with modified terms in calendar years after the year of the restructure. |
|
The following tables summarize, as of December 31, 2013 and 2012, loans that have been restructured during 2013 and 2012 (in thousands): |
31-Dec-13 | | | | | | | | | | | | | | | | | | |
| Number of Contracts | | Pre-Restructuring Outstanding Recorded Investment | | Post-Restructuring Outstanding Recorded Investment | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Commercial business loans | | 3 | | $ | 10,823 | | $ | 8,921 | | | | | | | | | | |
Real estate market risk | | 1 | | | 892 | | | 874 | | | | | | | | | | |
Total new restructured loans in 2012 | | 4 | | $ | 11,715 | | $ | 9,795 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
31-Dec-12 | | | | | | | | | | | | | | | | | | |
| Number of Contracts | | Pre-Restructuring Outstanding Recorded Investment | | Post-Restructuring Outstanding Recorded Investment | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Commercial business loans | | 3 | | $ | 7,140 | | $ | 7,103 | | | | | | | | | | |
Real estate market risk | | 2 | | | 1,726 | | | 1,147 | | | | | | | | | | |
Real estate - 1-4 family | | 1 | | | 1,424 | | | 1,393 | | | | | | | | | | |
Total new restructured loans in 2012 | | 6 | | $ | 10,290 | | $ | 9,643 | | | | | | | | | | |
The restructured loans generally include terms to temporarily place loan on interest only, extend the payment terms or reduce the interest rate. We have not forgiven any principal on the above loans. The $1.9 million decrease in the post-restructuring recorded investment compared to the pre-restructuring recorded investment is due to $1.4 million in charge-offs and $554,000 in paydowns. At December 31, 2013, $8.1 million of the above loans restructured in 2013 are on non-accrual. The restructuring of the loans did not have a significant impact on our allowance for loan losses at December 31, 2013 or 2012. |
|
The following table provides information on how loans were modified as a restructured loan during the year ended December 31, 2013 and 2012 (in thousands): |
| December 31, | | | | | | | | | | | | | | |
| 2013 | 2012 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Extended maturity | $ | 874 | $ | 1,913 | | | | | | | | | | | | | | |
Adjusted payment schedule | | - | | 1,393 | | | | | | | | | | | | | | |
Combination of maturity extension and payment schedule adjustment | | 8,921 | | 6,337 | | | | | | | | | | | | | | |
Total | $ | 9,795 | $ | 9,643 | | | | | | | | | | | | | | |
As of December 31, 2013, none of the loans that were restructured within the last 12 months have subsequently defaulted |