Loans and Allowance for Credit Losses | 3 Months Ended | 9 Months Ended |
Mar. 31, 2014 | Sep. 30, 2013 |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ' | ' |
Loans and Allowance for Credit Losses | ' | ' |
Loans | (4) LOANS AND ALLOWANCE FOR LOAN LOSSES |
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Loans Held for Investment | At March 31, 2014 and December 31, 2013, loans were as follows (in thousands): |
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Loans held for investment (which include equipment leases accounted for as financing leases) are stated at the amount of unpaid principal reduced by deferred income (net of costs). Interest on loans is recognized using the simple-interest method on the daily balances of the principal amounts outstanding. Loan origination fees, net of direct loan origination costs, and commitment fees, are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable. | | | March 31, | | December 31, |
| | | 2014 | | 2013 |
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. Reserves on impaired loans are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or the fair value of the underlying collateral. Impaired loans, or portions thereof, are charged off when deemed uncollectible. | | | | | |
| Commercial | $ | 5,205,515 | $ | 5,020,565 |
The accrual of interest on loans is discontinued 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 book balance of the asset is deemed to be collectible. If collectibility is questionable, then cash payments are applied to principal. 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. | Mortgage finance | | 2,688,044 | | 2,784,265 |
| Construction | | 1,437,609 | | 1,262,905 |
Loans held for investment includes legal ownership interests in mortgage loans that we purchase through our mortgage warehouse lending division. The ownership interests are purchased from unaffiliated mortgage originators who are seeking additional funding through sale of the undivided ownership interests to facilitate their ability to originate loans. The mortgage originator has no obligation to offer and we have no obligation to purchase these interests. The originator closes mortgage loans consistent with underwriting standards established by approved investors, and, at the time of the sale to the investor, our ownership interest and that of the originator are delivered by us to the investor selected by the originator and approved by us. We typically purchase up to a 99% ownership interest in each mortgage with the originator owning the remaining percentage. These mortgage ownership interests are held by us for an interim period, usually less than 30 days and more typically 10-20 days. Because of conditions in agreements with originators designed to reduce transaction risks, under Accounting Standards Codification 860, Transfers and Servicing of Financial Assets (“ASC 860”), the ownership interests do not qualify as participating interests. Under ASC 860, the ownership interests are deemed to be loans to the originators and payments we receive from investors are deemed to be payments made by or on behalf of the originator to repay the loan deemed made to the originator. Because we have an actual, legal ownership interest in the underlying residential mortgage loan, these interests are not extensions of credit to the originators that are secured by the mortgage loans as collateral. | Real estate | | 2,229,349 | | 2,146,228 |
| Consumer | | 14,815 | | 15,350 |
Due to market conditions or events of default by the investor or the originator, we could be required to purchase the remaining interests in the mortgage loans and hold them beyond the expected 10-20 days. Mortgage loans acquired under these conditions could require future allocations of the allowance for loan losses or be subject to charge off in the event the loans become impaired. Mortgage loan interests purchased and disposed of as expected receive no allocation of the allowance for loan losses due to the minimal loss experience with these assets. | Leases | | 95,262 | | 93,160 |
31-Mar-14 | | | | | | | | | | | | | | | | | Gross loans held for investment | | 11,670,594 | | 11,322,473 |
| | | Commercial | | Mortgage Finance | | Construction | | Real Estate | | Consumer | | Leases | | Total | | | Deferred income (net of direct origination costs) | | -54,517 | | -51,899 |
Grade: | | | | | | | | | | | | | | | | | Allowance for loan losses | | -90,234 | | -87,604 |
| Pass | $ | 5,086,156 | $ | 2,688,044 | $ | 1,437,383 | $ | 2,184,419 | $ | 14,747 | $ | 92,054 | $ | 11,502,803 | | | Total | $ | 11,525,843 | $ | 11,182,970 |
| Special mention | | 33,212 | | - | | 123 | | 7,334 | | - | | 203 | | 40,872 | | | Commercial Loans and Leases. Our commercial loan and lease 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 transactional 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. |
| Substandard-accruing | | 59,313 | | - | | 103 | | 21,267 | | 60 | | 2,963 | | 83,706 | | | |
| Non-accrual | | 26,834 | | - | | - | | 16,329 | | 8 | | 42 | | 43,213 | | | 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. |
Total loans held for | | | | | | | | | | | | | | | | | |
| investment | $ | 5,205,515 | $ | 2,688,044 | $ | 1,437,609 | $ | 2,229,349 | $ | 14,815 | $ | 95,262 | $ | 11,670,594 | | | 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 equity investment in the borrowers. 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 for unused balances. |
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31-Dec-13 | | | | | | | | | | | | | | | | | 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. |
| | | Commercial | | Mortgage Finance | | Construction | | Real Estate | | Consumer | | Leases | | Total | | | |
Grade: | | | | | | | | | | | | | | | | | As of March 31, 2014, 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 appropriateness of the allowance for loan losses. Management believes the allowance for loan losses is appropriate to cover probable losses inherent in the loan portfolio at each balance sheet date. |
| 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 | | | At March 31, 2014 and December 31, 2013, we had a blanket floating lien based on certain real estate loans used as collateral for Federal Home Loan Bank (“FHLB”) borrowings. |
| Substandard-accruing | | 74,593 | | - | | 103 | | 21,770 | | 45 | | 3,742 | | 100,253 | | | |
| Non-accrual | | 12,896 | | - | | 705 | | 18,670 | | 54 | | 50 | | 32,375 | | | 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. |
Total loans held for | | | | | | | | | | | | | | | | | |
| investment | $ | 5,020,565 | $ | 2,784,265 | $ | 1,262,905 | $ | 2,146,228 | $ | 15,350 | $ | 93,160 | $ | 11,322,473 | | | 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 non-accrual 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 following table details activity in the reserve for loan losses by portfolio segment for the three months ended March 31, 2014 and March 31, 2013. Allocation of a portion of the reserve to one category of loans does not preclude its availability to absorb losses in other categories. | |
31-Mar-14 | | | | | | | | | | | | | | | | | 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. |
(in thousands) | | Commercial | | Mortgage Finance | | Construction | | Real Estate | | Consumer | | Leases | | Unallocated | | Total | |
| | | | | | | | | | | | | | | | | | 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. |
Beginning balance | $ | 39,868 | $ | - | $ | 14,553 | $ | 24,210 | $ | 149 | $ | 3,105 | $ | 5,719 | $ | 87,604 | |
Provision for loan | | | | | | | | | | | | | | | | | The following tables summarize the credit risk profile of our loan portfolio by internally assigned grades and non-accrual status as of March 31, 2014 and December 31, 2013 (in thousands): |
| losses | | 6,245 | | - | | 583 | | -495 | | 56 | | -575 | | -1,104 | | 4,710 | |
Charge-offs | | 2,336 | | - | | - | | - | | 61 | | 50 | | - | | 2,447 | |
Recoveries | | 210 | | - | | - | | 8 | | 25 | | 124 | | - | | 367 | |
Net charge-offs | | | | | | | | | | | | | | | | | |
| (recoveries) | | 2,126 | | - | | - | | -8 | | 36 | | -74 | | - | | 2,080 | |
Ending balance | $ | 43,987 | $ | - | $ | 15,136 | $ | 23,723 | $ | 169 | $ | 2,604 | $ | 4,615 | $ | 90,234 | |
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Period end amount allocated to: | | | | | | | | | | | | | | | | | |
| Loans individually | | | | | | | | | | | | | | | | | |
| evaluated for | | | | | | | | | | | | | | | | | |
| impairment | $ | 6,029 | $ | - | $ | - | $ | 993 | $ | 1 | $ | 6 | $ | - | $ | 7,029 | |
| Loans collectively | | | | | | | | | | | | | | | | | |
| evaluated for | | | | | | | | | | | | | | | | | |
| impairment | | 37,958 | | - | | 15,136 | | 22,730 | | 168 | | 2,598 | | 4,615 | | 83,205 | |
Ending balance | $ | 43,987 | $ | - | $ | 15,136 | $ | 23,723 | $ | 169 | $ | 2,604 | $ | 4,615 | $ | 90,234 | |
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31-Mar-13 | | | | | | | | | | | | | | | | | |
(in thousands) | | Commercial | | Mortgage Finance | | Construction | | Real Estate | | Consumer | | Leases | | Unallocated | | Total | |
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Beginning balance | $ | 21,547 | $ | - | $ | 12,097 | $ | 30,893 | $ | 226 | $ | 2,460 | $ | 7,114 | $ | 74,337 | |
Provision for loan | | | | | | | | | | | | | | | | | |
| losses | | 3,567 | | - | | -3,614 | | 4,183 | | -24 | | -474 | | -1,759 | | 1,879 | |
Charge-offs | | 1,648 | | - | | - | | 105 | | 19 | | - | | - | | 1,772 | |
Recoveries | | 397 | | - | | - | | 8 | | 30 | | 121 | | - | | 556 | |
Net charge-offs | | | | | | | | | | | | | | | | | |
| (recoveries) | | 1,251 | | - | | - | | 97 | | -11 | | -121 | | - | | 1,216 | |
Ending balance | $ | 23,863 | $ | - | $ | 8,483 | $ | 34,979 | $ | 213 | $ | 2,107 | $ | 5,355 | $ | 75,000 | |
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Period end amount allocated to: | | | | | | | | | | | | | | | | | |
| Loans individually | | | | | | | | | | | | | | | | | |
| evaluated for | | | | | | | | | | | | | | | | | |
| impairment | $ | 5,069 | $ | - | $ | - | $ | 812 | $ | 15 | $ | 10 | $ | - | $ | 5,906 | |
| Loans collectively | | | | | | | | | | | | | | | | | |
| evaluated for | | | | | | | | | | | | | | | | | |
| impairment | | 18,794 | | - | | 8,483 | | 34,167 | | 198 | | 2,097 | | 5,355 | | 69,094 | |
Ending balance | $ | 23,863 | $ | - | $ | 8,483 | $ | 34,979 | $ | 213 | $ | 2,107 | $ | 5,355 | $ | 75,000 | |
Our recorded investment in loans as of March 31, 2014, December 31, 2013 and March 31, 2013 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): | |
31-Mar-14 | | | | | | | | | | | | | | | | | |
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Leases | Total | | | |
| | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | $ | 29,023 | $ | - | $ | - | $ | 21,112 | $ | 8 | $ | 42 | $ | 50,185 | | | |
Loans collectively evaluated for impairment | | 5,176,492 | | 2,688,044 | | 1,437,609 | | 2,208,237 | | 14,807 | | 95,220 | | 11,620,409 | | | |
Total | $ | 5,205,515 | $ | 2,688,044 | $ | 1,437,609 | $ | 2,229,349 | $ | 14,815 | $ | 95,262 | $ | 11,670,594 | | | |
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31-Dec-13 | | | | | | | | | | | | | | | | | |
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Leases | Total | | | |
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Loans individually evaluated for impairment | $ | 15,139 | $ | - | $ | 705 | $ | 24,028 | $ | 54 | $ | 50 | $ | 39,976 | | | |
Loans collectively evaluated for impairment | | 5,005,426 | | 2,784,265 | | 1,262,200 | | 2,122,200 | | 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 | | | |
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31-Mar-13 | | | | | | | | | | | | | | | | | |
| Commercial | Mortgage Finance | Construction | Real Estate | Consumer | Leases | Total | | | |
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Loans individually evaluated for impairment | $ | 23,353 | $ | - | $ | 729 | $ | 30,991 | $ | 37 | $ | 69 | $ | 55,179 | | | |
Loans collectively evaluated for impairment | | 4,132,330 | | 2,577,830 | | 760,235 | | 1,928,817 | | 17,427 | | 66,534 | | 9,483,173 | | | |
Total | $ | 4,155,683 | $ | 2,577,830 | $ | 760,964 | $ | 1,959,808 | $ | 17,464 | $ | 66,603 | $ | 9,538,352 | | | |
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, 2013 generally consistent with improving portfolio credit metrics. We believe the level of unallocated reserves at March 31, 2014 is warranted due to the continued uncertain economic environment which has produced losses, including those resulting from fraud by borrowers, that are not necessarily correlated with historical loss trends or general economic conditions. 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. | |
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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. As of March 31, 2014, 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 March 31, 2014 and December 31, 2013 (in thousands): | |
| March 31, | December 31, | | | | | | | | | | | | | | |
| 2014 | 2013 | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 26,834 | $ | 12,896 | | | | | | | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | - | | 705 | | | | | | | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 9,624 | | 15,607 | | | | | | | | | | | | | | |
Commercial | | 4,184 | | 508 | | | | | | | | | | | | | | |
Secured by 1-4 family | | 2,521 | | 2,555 | | | | | | | | | | | | | | |
Consumer | | 8 | | 54 | | | | | | | | | | | | | | |
Leases | | 42 | | 50 | | | | | | | | | | | | | | |
Total non-accrual loans | $ | 43,213 | $ | 32,375 | | | | | | | | | | | | | | |
As of March 31, 2014, non-accrual loans included in the table above included $16.3 million related to loans that met the criteria for restructured compared to $17.8 million at December 31, 2013. | |
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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 ASC 310 Receivables, we have also included all restructured loans in our impaired loan totals. The following tables detail our impaired loans, by portfolio class as of March 31, 2014 and December 31, 2013 (in thousands) | |
31-Mar-14 | | | | | | | | | | | | | | | | | | |
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 6,412 | $ | 8,661 | $ | - | $ | 3,475 | $ | - | | | | | | | | |
Energy | | - | | - | | - | | 1,076 | | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | - | | - | | - | | 470 | | - | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | |
Market risk | | 8,159 | | 8,159 | | - | | 11,736 | | - | | | | | | | | |
Commercial | | 2,509 | | 2,509 | | - | | 1,175 | | - | | | | | | | | |
Secured by 1-4 family | | 1,320 | | 1,320 | | - | | 1,320 | | - | | | | | | | | |
Consumer | | - | | - | | - | | - | | - | | | | | | | | |
Leases | | - | | - | | - | | - | | - | | | | | | | | |
Total impaired loans with no allowance | | | | | | | | | | | | | | | | | | |
recorded | $ | 18,400 | $ | 20,649 | $ | - | $ | 19,252 | $ | - | | | | | | | | |
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With an allowance recorded: | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | |
Business loans | $ | 21,235 | $ | 21,235 | $ | 5,331 | $ | 14,451 | $ | - | | | | | | | | |
Energy | | 1,376 | | 4,306 | | 698 | | 765 | | - | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | |
Market risk | | - | | - | | - | | - | | - | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | | |
Market risk | | 5,103 | | 5,103 | | 284 | | 5,894 | | - | | | | | | | | | | | | |
Commercial | | 1,675 | | 1,675 | | 395 | | 558 | | - | | | | | | | | | | | | |
Secured by 1-4 family | | 2,346 | | 2,346 | | 314 | | 2,373 | | - | | | | | | | | | | | | |
Consumer | | 8 | | 8 | | 1 | | 39 | | - | | | | | | | | | | | | |
Leases | | 42 | | 42 | | 6 | | 47 | | - | | | | | | | | | | | | |
Total impaired loans with an allowance | | | | | | | | | | | | | | | | | | | | | | |
recorded | $ | 31,785 | $ | 34,715 | $ | 7,029 | $ | 24,127 | $ | - | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Combined: | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | |
Business loans | $ | 27,647 | $ | 29,896 | $ | 5,331 | $ | 17,926 | $ | - | | | | | | | | | | | | |
Energy | | 1,376 | | 4,306 | | 698 | | 1,841 | | - | | | | | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | | | | | |
Market risk | | - | | - | | - | | 470 | | - | | | | | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | | |
Market risk | | 13,262 | | 13,262 | | 284 | | 17,630 | | - | | | | | | | | | | | | |
Commercial | | 4,184 | | 4,184 | | 395 | | 1,733 | | - | | | | | | | | | | | | |
Secured by 1-4 family | | 3,666 | | 3,666 | | 314 | | 3,693 | | - | | | | | | | | | | | | |
Consumer | | 8 | | 8 | | 1 | | 39 | | - | | | | | | | | | | | | |
Leases | | 42 | | 42 | | 6 | | 47 | | - | | | | | | | | | | | | |
Total impaired loans | $ | 50,185 | $ | 55,364 | $ | 7,029 | $ | 43,379 | $ | - | | | | | | | | | | | | |
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 | | 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 | | - | | - | | - | | - | | - | | | | | | | | | | | | |
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 | | 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 | | - | | | | | | | | | | | | |
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 | | 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 | | - | | | | | | | | | | | | |
Leases | | 50 | | 50 | | 8 | | 72 | | - | | | | | | | | | | | | |
Total impaired loans | $ | 39,976 | $ | 43,170 | $ | 3,174 | $ | 50,794 | $ | 114 | | | | | | | | | | | | |
Average impaired loans outstanding during the three months ended March 31, 2014 and 2013 totaled $43.4 million and $62.6 million, respectively. | | | | | |
| | | | | |
The table below provides an age analysis of our past due loans that are still accruing as of March 31, 2014 (in thousands): | | | | | |
| | | | | |
| | | | | Greater | | | | | | | | | | | | | | | | |
| | | | | Than 90 | | | | | | | | | | | | | | | | |
| 30-59 Days | 60-89 Days | Days and | Total Past | | | | | | | | | | | | | | |
| Past Due | Past Due | Accruing(1) | Due | Current | Total | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | |
Business loans | $ | 16,724 | $ | 3,676 | $ | 7,869 | $ | 28,269 | $ | 4,183,988 | $ | 4,212,257 | | | | | | | | | | |
Energy | | - | | - | | - | | - | | 966,424 | | 966,424 | | | | | | | | | | |
Mortgage finance loans | | - | | - | | - | | - | | 2,688,044 | | 2,688,044 | | | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | | | | | |
Market risk | | 3,462 | | - | | - | | 3,462 | | 1,417,795 | | 1,421,257 | | | | | | | | | | |
Secured by 1-4 family | | - | | - | | - | | - | | 16,352 | | 16,352 | | | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | | |
Market risk | | 9,411 | | 1,595 | | - | | 11,006 | | 1,694,172 | | 1,705,178 | | | | | | | | | | |
Commercial | | 13,908 | | 501 | | - | | 14,409 | | 403,167 | | 417,576 | | | | | | | | | | |
Secured by 1-4 family | | 2,954 | | 68 | | - | | 3,022 | | 87,244 | | 90,266 | | | | | | | | | | |
Consumer | | 10 | | - | | - | | 10 | | 14,797 | | 14,807 | | | | | | | | | | |
Leases | | 685 | | - | | - | | 685 | | 94,535 | | 95,220 | | | | | | | | | | |
Total loans held for investment | $ | 47,154 | $ | 5,840 | $ | 7,869 | $ | 60,863 | $ | 11,566,518 | $ | 11,627,381 | | | | | | | | | | |
(1) Loans past due 90 days and still accruing includes premium finance loans of $4.7 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 forgiveness of either principal or accrued interest. As of March 31, 2014 and December 31, 2013, we had $2.8 million and $1.9 million, respectively, in loans considered restructured that are not on non-accrual. These loans do not have unfunded commitments at March 31, 2014 or December 31, 2013. During the first quarter of 2014, a $930,000 restructured loan moved from non-accrual status to accrual status. Of the non-accrual loans at March 31, 2014 and December 31, 2013, $16.3 million and $17.8 million, respectively, met the criteria for restructured. These loans had no unfunded commitments at their respective balance sheet dates. 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, for the three months ended March 31, 2014 and 2013, loans that were restructured during 2014 and 2013 (in thousands): | | | | | |
31-Mar-14 | | | | Pre-Restructuring | | Post-Restructuring | | | | | | | | | | | | | | | | |
| | Number of | | Outstanding Recorded | | Outstanding Recorded | | | | | | | | | | | | | | | | |
| | Contracts | | Investment | | Investment | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Real estate - commercial | | 1 | | 1,441 | | 1,441 | | | | | | | | | | | | | | | | |
Total new restructured loans in 2014 | | 1 | $ | 1,441 | $ | 1,441 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
31-Mar-13 | | | | Pre-Restructuring | | Post-Restructuring | | | | | | | | | | | | | | | | |
| | Number of | | Outstanding Recorded | | Outstanding Recorded | | | | | | | | | | | | | | | | |
| | Restructured Loans | | Investment | | Investment | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Commercial business loans | | 1 | $ | 1,945 | $ | 1,945 | | | | | | | | | | | | | | | | |
Total new restructured loans in 2013 | | 1 | $ | 1,945 | $ | 1,945 | | | | | | | | | | | | | | | | |
The restructured loans generally include terms to temporarily place loans on interest only, extend the payment terms or reduce the interest rate. We did not forgive any principal on the above loans. The restructuring of the loans did not have a significant impact on our allowance for loan losses at March 31, 2014 or 2013. | | | | | |
| | | | | |
The following table provides information on how restructured loans were modified during the three months ended March 31, 2014 and 2013 (in thousands): | | | | | |
| Three months ended March 31, | | | | | | | | | | | | | | | | | | |
| 2014 | 2013 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Extended maturity | $ | 1,441 | $ | - | | | | | | | | | | | | | | | | | | |
Combination of maturity extension and payment schedule adjustment | | - | | 1,945 | | | | | | | | | | | | | | | | | | |
Total | $ | 1,441 | $ | 1,945 | | | | | | | | | | | | | | | | | | |
As of March 31, 2014, we did not have any loans that were restructured within the last 12 months that subsequently defaulted. The following table summarizes, as of March 31, 2013, loans that were restructured within the last 12 months that subsequently defaulted (in thousands): | | | | | |
| | Number of | | Recorded | | | | | | | | | | | | | | | | | | |
| | Restructured Loans | | Investment | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Commercial - secured by real estate | | 1 | $ | 814 | | | | | | | | | | | | | | | | | | |
Real estate - market risk | | 1 | | 2,453 | | | | | | | | | | | | | | | | | | |
Total | | 2 | $ | 3,267 | | | | | | | | | | | | | | | | | | |