Loans | 9 Months Ended |
Sep. 30, 2013 |
Receivables [Abstract] | ' |
Loans | ' |
NOTE 6: | Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following table sets forth information concerning the loan portfolio by collateral types as of the dates indicated. |
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| | Sept 30, 2013 | | | 31-Dec-12 | | | | | | | | | | | | | | | | | | | | | |
Loans not covered by FDIC loss share agreements | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 449,224 | | | $ | 428,554 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 529,172 | | | | 480,494 | | | | | | | | | | | | | | | | | | | | | |
Land, development and construction | | | 60,375 | | | | 55,474 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate | | | 1,038,771 | | | | 964,522 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 126,451 | | | | 124,225 | | | | | | | | | | | | | | | | | | | | | |
Consumer and other loans (note 1) | | | 1,259 | | | | 2,732 | | | | | | | | | | | | | | | | | | | | | |
Consumer and other loans | | | 49,065 | | | | 48,547 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans before unearned fees and deferred cost | | | 1,215,546 | | | | 1,140,026 | | | | | | | | | | | | | | | | | | | | | |
Net unearned fees and costs | | | 135 | | | | (458 | ) | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses for noncovered loans | | | (19,265 | ) | | | (24,033 | ) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loans not covered by FDIC loss share agreements | | | 1,196,416 | | | | 1,115,535 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans covered by FDIC loss share agreements | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 124,027 | | | | 142,480 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 109,285 | | | | 134,413 | | | | | | | | | | | | | | | | | | | | | |
Land, development and construction | | | 5,673 | | | | 13,259 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate | | | 238,985 | | | | 290,152 | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 3,906 | | | | 6,143 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 242,891 | | | | 296,295 | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses for covered loans | | | (2,056 | ) | | | (2,649 | ) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loans covered by FDIC loss share agreements | | | 240,835 | | | | 293,646 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans, net of allowance for loan losses | | $ | 1,437,251 | | | $ | 1,409,181 | | | | | | | | | | | | | | | | | | | | | |
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note 1: | Consumer loans acquired pursuant to three FDIC assisted transactions of failed financial institutions during the third quarter of 2010 and two in the first quarter of 2012. These loans are not covered by an FDIC loss share agreement. The loans are being accounted for pursuant to ASC Topic 310-30. | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The tables below set forth the activity in the allowance for loan losses for the periods presented. |
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| | Loans not | | | Loans | | | Total | | | | | | | | | | | | | | | | | |
covered by | covered by | | | | | | | | | | | | | | | | |
FDIC loss | FDIC loss | | | | | | | | | | | | | | | | |
share | share | | | | | | | | | | | | | | | | |
agreements | agreements | | | | | | | | | | | | | | | | |
Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 21,800 | | | $ | 2,020 | | | $ | 23,820 | | | | | | | | | | | | | | | | | |
Loans charged-off | | | (1,570 | ) | | | — | | | | (1,570 | ) | | | | | | | | | | | | | | | | |
Recoveries of loans previously charged-off | | | 344 | | | | — | | | | 344 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs | | | (1,226 | ) | | | — | | | | (1,226 | ) | | | | | | | | | | | | | | | | |
(Recovery) provision for loan losses | | | (1,309 | ) | | | 36 | | | | (1,273 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 19,265 | | | $ | 2,056 | | | $ | 21,321 | | | | | | | | | | | | | | | | | |
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Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 24,033 | | | $ | 2,649 | | | $ | 26,682 | | | | | | | | | | | | | | | | | |
Loans charged-off | | | (5,404 | ) | | | (515 | ) | | | (5,919 | ) | | | | | | | | | | | | | | | | |
Recoveries of loans previously charged-off | | | 817 | | | | — | | | | 817 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs | | | (4,587 | ) | | | (515 | ) | | | (5,102 | ) | | | | | | | | | | | | | | | | |
(Recovery) provision for loan losses | | | (181 | ) | | | (78 | ) | | | (259 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 19,265 | | | $ | 2,056 | | | $ | 21,321 | | | | | | | | | | | | | | | | | |
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Three months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 23,634 | | | $ | 1,549 | | | $ | 25,183 | | | | | | | | | | | | | | | | | |
Loans charged-off | | | (2,245 | ) | | | — | | | | (2,245 | ) | | | | | | | | | | | | | | | | |
Recoveries of loans previously charged-off | | | 978 | | | | — | | | | 978 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs | | | (1,267 | ) | | | — | | | | (1,267 | ) | | | | | | | | | | | | | | | | |
Provision for loan losses | | | 1,652 | | | | 773 | | | | 2,425 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 24,019 | | | $ | 2,322 | | | $ | 26,341 | | | | | | | | | | | | | | | | | |
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Nine months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 27,585 | | | $ | 359 | | | $ | 27,944 | | | | | | | | | | | | | | | | | |
Loans charged-off | | | (10,393 | ) | | | — | | | | (10,393 | ) | | | | | | | | | | | | | | | | |
Recoveries of loans previously charged-off | | | 1,739 | | | | — | | | | 1,739 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs | | | (8,654 | ) | | | — | | | | (8,654 | ) | | | | | | | | | | | | | | | | |
Provision for loan losses | | | 5,088 | | | | 1,963 | | | | 7,051 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 24,019 | | | $ | 2,322 | | | $ | 26,341 | | | | | | | | | | | | | | | | | |
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The following tables present the activity in the allowance for loan losses for loans not covered by FDIC loss share agreements by portfolio segment for the periods presented. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate Loans | | | | | | | | | | | | | | |
| | Residential | | | Commercial | | | Land, | | | Comm. & | | | Consumer | | | Total | | | | | |
develop., | industrial | & other | | | | |
constr. | | | | | | |
| | | | | | | | | | |
Loans not covered by FDIC loss share agreements: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | 9,791 | | | $ | 6,026 | | | $ | 4,071 | | | $ | 1,064 | | | $ | 848 | | | $ | 21,800 | | | | | |
Charge-offs | | | (1,147 | ) | | | (53 | ) | | | (127 | ) | | | (53 | ) | | | (190 | ) | | | (1,570 | ) | | | | |
Recoveries | | | 163 | | | | 42 | | | | 41 | | | | 22 | | | | 76 | | | | 344 | | | | | |
Provision for loan losses | | | 844 | | | | (1,431 | ) | | | (644 | ) | | | (146 | ) | | | 68 | | | | (1,309 | ) | | | | |
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Balance at end of period | | $ | 9,651 | | | $ | 4,584 | | | $ | 3,341 | | | $ | 887 | | | $ | 802 | | | $ | 19,265 | | | | | |
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Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | 6,831 | | | $ | 8,272 | | | $ | 6,211 | | | $ | 1,745 | | | $ | 974 | | | $ | 24,033 | | | | | |
Charge-offs | | | (3,328 | ) | | | (1,127 | ) | | | (310 | ) | | | (112 | ) | | | (527 | ) | | | (5,404 | ) | | | | |
Recoveries | | | 396 | | | | 82 | | | | 161 | | | | 43 | | | | 135 | | | | 817 | | | | | |
Provision for loan losses | | | 5,752 | | | | (2,643 | ) | | | (2,721 | ) | | | (789 | ) | | | 220 | | | | (181 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 9,651 | | | $ | 4,584 | | | $ | 3,341 | | | $ | 887 | | | $ | 802 | | | $ | 19,265 | | | | | |
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Three months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | 4,860 | | | $ | 8,091 | | | $ | 7,868 | | | $ | 1,638 | | | $ | 1,177 | | | $ | 23,634 | | | | | |
Charge-offs | | | (1,456 | ) | | | (179 | ) | | | (385 | ) | | | (10 | ) | | | (215 | ) | | | (2,245 | ) | | | | |
Recoveries | | | 182 | | | | 411 | | | | 338 | | | | 4 | | | | 43 | | | | 978 | | | | | |
Provision for loan losses | | | 1,896 | | | | 263 | | | | (719 | ) | | | 54 | | | | 158 | | | | 1,652 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 5,482 | | | $ | 8,586 | | | $ | 7,102 | | | $ | 1,686 | | | $ | 1,163 | | | $ | 24,019 | | | | | |
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Nine months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | 6,700 | | | $ | 8,825 | | | $ | 9,098 | | | $ | 1,984 | | | $ | 978 | | | $ | 27,585 | | | | | |
Charge-offs | | | (3,233 | ) | | | (1,758 | ) | | | (4,593 | ) | | | (71 | ) | | | (738 | ) | | | (10,393 | ) | | | | |
Recoveries | | | 334 | | | | 834 | | | | 423 | | | | 15 | | | | 133 | | | | 1,739 | | | | | |
Provision for loan losses | | | 1,681 | | | | 685 | | | | 2,174 | | | | (242 | ) | | | 790 | | | | 5,088 | | | | | |
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Balance at end of period | | $ | 5,482 | | | $ | 8,586 | | | $ | 7,102 | | | $ | 1,686 | | | $ | 1,163 | | | $ | 24,019 | | | | | |
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The following tables present the activity in the allowance for loan losses for loans covered by FDIC loss share agreements by portfolio segment for the periods presented. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate Loans | | | | | | | | | | | | | | | |
| | Residential | | | Commercial | | | Land, | | | Comm. & | | | Total | | | | | | | | | |
develop., | industrial | | | | | | | | |
constr. | | | | | | | | | |
| | | | | | | | | | | | | |
Loans covered by FDIC loss share agreements: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | — | | | $ | 1,577 | | | $ | 130 | | | $ | 313 | | | $ | 2,020 | | | | | | | | | |
Charge-offs | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Recoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Provision for loan losses | | | — | | | | (190 | ) | | | (8 | ) | | | 234 | | | | 36 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | — | | | $ | 1,387 | | | $ | 122 | | | $ | 547 | | | $ | 2,056 | | | | | | | | | |
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Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | — | | | $ | 2,335 | | | $ | — | | | $ | 314 | | | $ | 2,649 | | | | | | | | | |
Charge-offs | | | — | | | | (515 | ) | | | — | | | | — | | | | (515 | ) | | | | | | | | |
Recoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Provision for loan losses | | | — | | | | (433 | ) | | | 122 | | | | 233 | | | | (78 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | — | | | $ | 1,387 | | | $ | 122 | | | $ | 547 | | | $ | 2,056 | | | | | | | | | |
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Three months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | 82 | | | $ | 1,455 | | | $ | — | | | $ | 12 | | | $ | 1,549 | | | | | | | | | |
Charge-offs | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Recoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Provision for loan losses | | | — | | | | 780 | | | | — | | | | (7 | ) | | | 773 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 82 | | | $ | 2,235 | | | $ | — | | | $ | 5 | | | $ | 2,322 | | | | | | | | | |
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Nine months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of the period | | $ | 82 | | | $ | 223 | | | $ | 40 | | | $ | 14 | | | $ | 359 | | | | | | | | | |
Charge-offs | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Recoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
Provision for loan losses | | | — | | | | 2,012 | | | | (40 | ) | | | (9 | ) | | | 1,963 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 82 | | | $ | 2,235 | | | $ | — | | | $ | 5 | | | $ | 2,322 | | | | | | | | | |
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The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2013 and December 31, 2012. Accrued interest receivable and unearned loan fees and costs are not included in the recorded investment because they are not material. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate Loans | | | | | | | | | | | | | | |
As of September 30, 2013 | | Residential | | | Commercial | | | Land, | | | Comm. & | | | Consumer | | | Total | | | | | |
develop., | industrial | & other | | | | |
constr. | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 429 | | | $ | 263 | | | $ | 57 | | | $ | 8 | | | $ | 27 | | | $ | 784 | | | | | |
Collectively evaluated for impairment | | | 9,222 | | | | 4,321 | | | | 3,284 | | | | 879 | | | | 775 | | | | 18,481 | | | | | |
Acquired with deteriorated credit quality | | | — | | | | 1,387 | | | | 122 | | | | 547 | | | | — | | | | 2,056 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 9,651 | | | $ | 5,971 | | | $ | 3,463 | | | $ | 1,434 | | | $ | 802 | | | $ | 21,321 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 9,054 | | | $ | 27,246 | | | $ | 1,391 | | | $ | 1,831 | | | $ | 358 | | | $ | 39,880 | | | | | |
Loans collectively evaluated for impairment | | | 440,170 | | | | 501,926 | | | | 58,984 | | | | 124,620 | | | | 48,707 | | | | 1,174,407 | | | | | |
Loans acquired with deteriorated credit quality | | | 124,027 | | | | 109,285 | | | | 5,673 | | | | 3,906 | | | | 1,259 | | | | 244,150 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loan balances | | $ | 573,251 | | | $ | 638,457 | | | $ | 66,048 | | | $ | 130,357 | | | $ | 50,324 | | | $ | 1,458,437 | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate Loans | | | | | | | | | | | | | | |
As of December 31, 2012 | | Residential | | | Commercial | | | Land, | | | Comm. & | | | Consumer | | | Total | | | | | |
develop., | industrial | & other | | | | |
constr. | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 610 | | | $ | 277 | | | $ | 107 | | | $ | 1 | | | $ | 27 | | | $ | 1,022 | | | | | |
Collectively evaluated for impairment | | | 6,221 | | | | 7,995 | | | | 6,104 | | | | 1,744 | | | | 947 | | | | 23,011 | | | | | |
Acquired with deteriorated credit quality | | | — | | | | 2,335 | | | | — | | | | 314 | | | | — | | | | 2,649 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 6,831 | | | $ | 10,607 | | | $ | 6,211 | | | $ | 2,059 | | | $ | 974 | | | $ | 26,682 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 9,936 | | | $ | 32,860 | | | $ | 1,520 | | | $ | 3,470 | | | $ | 393 | | | $ | 48,179 | | | | | |
Loans collectively evaluated for impairment | | | 418,618 | | | | 447,634 | | | | 53,954 | | | | 120,755 | | | | 48,154 | | | | 1,089,115 | | | | | |
Loans acquired with deteriorated credit quality | | | 142,480 | | | | 134,413 | | | | 13,259 | | | | 6,143 | | | | 2,732 | | | | 299,027 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loan balance | | $ | 571,034 | | | $ | 614,907 | | | $ | 68,733 | | | $ | 130,368 | | | $ | 51,279 | | | $ | 1,436,321 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The table below summarizes impaired loan data for the periods presented. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Sept 30, | | | Dec 31, | | | | | | | | | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | | | | | | | | | |
Impaired loans with a specific valuation allowance | | $ | 7,992 | | | $ | 10,744 | | | | | | | | | | | | | | | | | | | | | |
Impaired loans without a specific valuation allowance | | | 31,888 | | | | 37,435 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 39,880 | | | $ | 48,179 | | | | | | | | | | | | | | | | | | | | | |
Amount of allowance for loan losses allocated to impaired loans | | $ | 784 | | | $ | 1,022 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Performing TDRs | | $ | 11,604 | | | $ | 8,841 | | | | | | | | | | | | | | | | | | | | | |
Non performing TDRs, included in NPLs | | | 4,207 | | | | 5,819 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total TDRs (TDRs are required to be included in impaired loans) | | $ | 15,811 | | | $ | 14,660 | | | | | | | | | | | | | | | | | | | | | |
Impaired loans that are not TDRs | | | 24,069 | | | | 33,519 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 39,880 | | | $ | 48,179 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
In this current real estate environment it has become more common to restructure or modify the terms of certain loans under certain conditions (i.e. troubled debt restructure or “TDRs”). In those circumstances it may be beneficial to restructure the terms of a loan and work with the borrower for the benefit of both parties, versus forcing the property into foreclosure and having to dispose of it in an unfavorable real estate market. When we have modified the terms of a loan, we usually either reduce the monthly payment and/or interest rate for generally twelve to twenty-four months. We have not forgiven any material principal amounts on any loan modifications to date. We have approximately $15,811 of TDRs. Of this amount $11,604 are performing pursuant to their modified terms, and $4,207 are not performing and have been placed on non accrual status and included in our non performing loans (“NPLs”). |
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TDRs as of September 30, 2013 and December 31, 2012 quantified by loan type classified separately as accrual (performing loans) and non-accrual (non performing loans) are presented in the tables below. |
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As of September 30, 2013 | | Accruing | | | Non Accrual | | | Total | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 6,936 | | | $ | 1,546 | | | $ | 8,482 | | | | | | | | | | | | | | | | | |
Commercial | | | 3,538 | | | | 2,496 | | | | 6,034 | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 429 | | | | — | | | | 429 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 10,903 | | | | 4,042 | | | | 14,945 | | | | | | | | | | | | | | | | | |
Commercial | | | 469 | | | | 40 | | | | 509 | | | | | | | | | | | | | | | | | |
Consumer and other | | | 232 | | | | 125 | | | | 357 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total TDRs | | $ | 11,604 | | | $ | 4,207 | | | $ | 15,811 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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As of December 31, 2012 | | Accruing | | | Non-Accrual | | | Total | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 6,446 | | | $ | 1,778 | | | $ | 8,224 | | | | | | | | | | | | | | | | | |
Commercial | | | 1,589 | | | | 3,701 | | | | 5,290 | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 202 | | | | 231 | | | | 433 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 8,237 | | | | 5,710 | | | | 13,947 | | | | | | | | | | | | | | | | | |
Commercial | | | 315 | | | | 5 | | | | 320 | | | | | | | | | | | | | | | | | |
Consumer and other | | | 289 | | | | 104 | | | | 393 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total TDRs | | $ | 8,841 | | | $ | 5,819 | | | $ | 14,660 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Our policy is to return non accrual TDR loans to accrual status when all the principal and interest amounts contractually due, pursuant to its modified terms, are brought current and future payments are reasonably assured. Our policy also considers the payment history of the borrower, but is not dependent upon a specific number of payments. The Company recorded a provision for loan loss expense of $426 and $748 and partial charge offs of $219 and $445 on the TDR loans described above during the three and nine month period ending September 30, 2013. |
Loans are modified to minimize loan losses when we believe the modification will improve the borrower’s financial condition and ability to repay the loan. We typically do not forgive principal. We generally either reduce interest rates or decrease monthly payments for a temporary period of time and those reductions of cash flows are capitalized into the loan balance. We may also extend maturities, convert balloon loans to longer term amortizing loans, or vice versa, or change interest rates between variable and fixed rate. Each borrower and situation is unique and we try to accommodate the borrower and minimize the Company’s potential losses. Approximately 73% of our TDRs are current pursuant to their modified terms, and about $4,207, or approximately 27% of our total TDRs are not performing pursuant to their modified terms. There does not appear to be any significant difference in success rates with one type of concession versus another. |
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The following table presents loans by class modified and for which there was a payment default within twelve months following the modification during the period ending September 30, 2013 and December 31, 2012. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Period ending | | | Year ending | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | |
| | Number | | | Recorded | | | Number | | | Recorded | | | | | | | | | | | | | |
| | of loans | | | investment | | | of loans | | | investment | | | | | | | | | | | | | |
Residential | | | 3 | | | $ | 562 | | | | 10 | | | $ | 758 | | | | | | | | | | | | | |
Commercial real estate | | | 5 | | | | 1,662 | | | | 4 | | | | 2,567 | | | | | | | | | | | | | |
Land, development, construction | | | — | | | | — | | | | 4 | | | | 156 | | | | | | | | | | | | | |
Commercial and Industrial | | | 1 | | | | 25 | | | | — | | | | — | | | | | | | | | | | | | |
Consumer and other | | | 1 | | | | 18 | | | | 1 | | | | 45 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 10 | | | $ | 2,267 | | | | 19 | | | $ | 3,526 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Company recorded a provision for loan loss expense of $172 and $332 and partial charge offs of $59 and $176 on TDR loans that subsequently defaulted as described above during the three and nine month period ending September 30, 2013, respectively. |
The following tables present loans individually evaluated for impairment by class of loans as of September 30, 2013 and December 31, 2012. The recorded investment is less than the unpaid principal balance due to partial charge-offs. |
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As of September 30, 2013 | | Unpaid | | | Recorded | | | Allowance for | | | | | | | | | | | | | | | | | |
principal | investment | loan losses | | | | | | | | | | | | | | | | |
balance | | allocated | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 5,539 | | | $ | 5,448 | | | $ | — | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 25,749 | | | | 23,892 | | | | — | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 1,760 | | | | 911 | | | | — | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 1,728 | | | | 1,631 | | | | — | | | | | | | | | | | | | | | | | |
Consumer, other | | | 6 | | | | 6 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 3,910 | | | | 3,606 | | | | 429 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 3,533 | | | | 3,354 | | | | 263 | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 494 | | | | 480 | | | | 57 | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 245 | | | | 200 | | | | 8 | | | | | | | | | | | | | | | | | |
Consumer, other | | | 364 | | | | 352 | | | | 27 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 43,328 | | | $ | 39,880 | | | $ | 784 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of December 31, 2012 | | Unpaid | | | Recorded | | | Allowance for | | | | | | | | | | | | | | | | | |
principal | investment | loan losses | | | | | | | | | | | | | | | | |
balance | | allocated | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 1,712 | | | $ | 1,712 | | | $ | — | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 33,789 | | | | 31,171 | | | | — | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 2,042 | | | | 1,087 | | | | — | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 3,556 | | | | 3,465 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 8,624 | | | | 8,224 | | | | 610 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 1,742 | | | | 1,689 | | | | 277 | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 664 | | | | 433 | | | | 107 | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 5 | | | | 5 | | | | 1 | | | | | | | | | | | | | | | | | |
Consumer, other | | | 395 | | | | 393 | | | | 27 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total | | $ | 52,529 | | | $ | 48,179 | | | $ | 1,022 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three month period ending September, 30, 2013 | | Average of | | | Interest | | | Cash basis | | | | | | | | | | | | | | | | | |
impaired | income | interest | | | | | | | | | | | | | | | | |
loans | recognized | income | | | | | | | | | | | | | | | | |
| during | recognized | | | | | | | | | | | | | | | | |
| impairment | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 8,829 | | | $ | 78 | | | $ | — | | | | | | | | | | | | | | | | | |
Commercial | | | 26,960 | | | | 295 | | | | — | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 1,436 | | | | 2 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 37,225 | | | | 375 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 1,710 | | | | 12 | | | | — | | | | | | | | | | | | | | | | | |
Consumer and other loans | | | 351 | | | | 3 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 39,286 | | | $ | 390 | | | $ | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine month period ending September 30, 2013 | | Average of | | | Interest | | | Cash basis | | | | | | | | | | | | | | | | | |
impaired | income | interest | | | | | | | | | | | | | | | | |
loans | recognized | income | | | | | | | | | | | | | | | | |
| during | recognized | | | | | | | | | | | | | | | | |
| impairment | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 9,014 | | | $ | 222 | | | $ | — | | | | | | | | | | | | | | | | | |
Commercial | | | 28,134 | | | | 840 | | | | — | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 1,423 | | | | 10 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 38,571 | | | | 1,072 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 1,984 | | | | 28 | | | | — | | | | | | | | | | | | | | | | | |
Consumer and other loans | | | 369 | | | | 8 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 40,924 | | | $ | 1,108 | | | $ | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three month period ending September, 30, 2012 | | Average of | | | Interest | | | Cash basis | | | | | | | | | | | | | | | | | |
impaired | income | interest | | | | | | | | | | | | | | | | |
loans | recognized | income | | | | | | | | | | | | | | | | |
| during | recognized | | | | | | | | | | | | | | | | |
| impairment | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 10,289 | | | $ | 78 | | | $ | — | | | | | | | | | | | | | | | | | |
Commercial | | | 29,900 | | | | 285 | | | | — | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 2,531 | | | | 4 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 42,720 | | | | 367 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 3,306 | | | | 34 | | | | — | | | | | | | | | | | | | | | | | |
Consumer and other loans | | | 427 | | | | 3 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 46,453 | | | $ | 404 | | | $ | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine month period ending September 30, 2012 | | Average of | | | Interest | | | Cash basis | | | | | | | | | | | | | | | | | |
impaired | income | interest | | | | | | | | | | | | | | | | |
loans | recognized | income | | | | | | | | | | | | | | | | |
| during | recognized | | | | | | | | | | | | | | | | |
| impairment | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | $ | 10,131 | | | $ | 215 | | | $ | — | | | | | | | | | | | | | | | | | |
Commercial | | | 29,756 | | | | 946 | | | | — | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 4,599 | | | | 19 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 44,486 | | | | 1,180 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 4,432 | | | | 80 | | | | — | | | | | | | | | | | | | | | | | |
Consumer and other loans | | | 455 | | | | 13 | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 49,373 | | | $ | 1,273 | | | $ | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming loans were as follows: | | Sept 30, 2013 | | | Dec 31, 2012 | | | | | | | | | | | | | | | | | | | | | |
Non accrual loans | | $ | 21,104 | | | $ | 25,448 | | | | | | | | | | | | | | | | | | | | | |
Loans past due over 90 days and still accruing interest | | | 35 | | | | 293 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total non performing loans | | $ | 21,139 | | | $ | 25,741 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans as of September 30, 2013 and December 31, 2012, excluding loans acquired from the FDIC with evidence of credit deterioration and covered by FDIC loss share agreements: |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of September 30, 2013 | | Nonaccrual | | | Loans past due | | | | | | | | | | | | | | | | | | | | | |
over 90 days | | | | | | | | | | | | | | | | | | | | |
still accruing | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 10,882 | | | $ | — | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 7,263 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 1,247 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 1,290 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Consumer, other | | | 422 | | | | 35 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 21,104 | | | $ | 35 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of December 31, 2012 | | Nonaccrual | | | Loans past due | | | | | | | | | | | | | | | | | | | | | |
over 90 days | | | | | | | | | | | | | | | | | | | | |
still accruing | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | $ | 9,993 | | | $ | — | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 11,459 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Land, development, construction | | | 2,032 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 1,650 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Consumer, other | | | 314 | | | | 293 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 25,448 | | | $ | 293 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following table presents the aging of the recorded investment in past due loans as of September 30, 2013 and December 31, 2012, excluding loans acquired from the FDIC with evidence of credit deterioration and covered by FDIC loss share agreements: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Accruing Loans | | | | |
As of September 30, 2013 | | Total | | | 30 - 59 | | | 60 - 89 | | | Greater | | | Total Past | | | Loans Not | | | Nonaccrual | |
days past | days past | than 90 | Due | Past Due | Loans |
due | due | days past | | | |
| | due | | | |
Residential real estate | | $ | 449,224 | | | $ | 3,136 | | | $ | 1,623 | | | $ | — | | | $ | 4,759 | | | $ | 433,583 | | | $ | 10,882 | |
Commercial real estate | | | 529,172 | | | | 2,642 | | | | 342 | | | | — | | | | 2,984 | | | | 518,925 | | | | 7,263 | |
Land/dev/construction | | | 60,375 | | | | 109 | | | | 618 | | | | — | | | | 727 | | | | 58,401 | | | | 1,247 | |
Commercial | | | 126,451 | | | | 264 | | | | 69 | | | | — | | | | 333 | | | | 124,828 | | | | 1,290 | |
Consumer | | | 50,324 | | | | 209 | | | | 149 | | | | 35 | | | | 393 | | | | 49,509 | | | | 422 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 1,215,546 | | | $ | 6,360 | | | $ | 2,801 | | | $ | 35 | | | $ | 9,196 | | | $ | 1,185,246 | | | $ | 21,104 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Accruing Loans | | | | |
As of December 31, 2012 | | Total | | | 30 - 59 | | | 60 - 89 | | | Greater | | | Total Past | | | Loans Not | | | Nonaccrual | |
days past | days past | than 90 | Due | Past Due | Loans |
due | due | days past | | | |
| | due | | | |
Residential real estate | | $ | 428,554 | | | $ | 1,632 | | | $ | 677 | | | $ | — | | | $ | 2,309 | | | $ | 416,252 | | | $ | 9,993 | |
Commercial real estate | | | 480,494 | | | | 1,663 | | | | 1,147 | | | | — | | | | 2,810 | | | | 466,225 | | | | 11,459 | |
Land/dev/construction | | | 55,474 | | | | 115 | | | | 624 | | | | — | | | | 739 | | | | 52,703 | | | | 2,032 | |
Commercial | | | 124,225 | | | | 203 | | | | 416 | | | | — | | | | 619 | | | | 121,956 | | | | 1,650 | |
Consumer | | | 51,279 | | | | 456 | | | | 489 | | | | 293 | | | | 1,238 | | | | 49,727 | | | | 314 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 1,140,026 | | | $ | 4,069 | | | $ | 3,353 | | | $ | 293 | | | $ | 7,715 | | | | 1,106,863 | | | $ | 25,448 | |
|
Credit Quality Indicators: |
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with an outstanding balance greater than $500 that are non-homogeneous loans, such as commercial, commercial real estate, land, land development and construction loans. This analysis is performed on at least an annual basis. The Company uses the following definitions for risk ratings: |
Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. |
Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. |
Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. |
|
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $500 or are included in groups of homogeneous loans. As of September 30, 2013 and December 31, 2012, and based on the most recent analysis performed, the risk category of loans by class of loans, excluding loans with evidence of deterioration of credit quality purchased from the FDIC and covered by FDIC loss share agreements, is as follows: |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of September 30, 2013 | | | | | | | | | | | | | |
Loan Category | | Pass | | | Special | | | Substandard | | | Doubtful | | | | | | | | | | | | | |
Mention | | | | | | | | | | | | |
Residential real estate | | $ | 420,235 | | | $ | 6,511 | | | $ | 22,478 | | | $ | — | | | | | | | | | | | | | |
Commercial real estate | | | 435,312 | | | | 59,217 | | | | 34,643 | | | | — | | | | | | | | | | | | | |
Land/dev/construction | | | 46,689 | | | | 10,765 | | | | 2,921 | | | | — | | | | | | | | | | | | | |
Commercial | | | 117,529 | | | | 4,825 | | | | 4,097 | | | | — | | | | | | | | | | | | | |
Consumer | | | 48,970 | | | | 554 | | | | 800 | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 1,068,735 | | | $ | 81,872 | | | $ | 64,939 | | | $ | — | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of December 31, 2012 | | | | | | | | | | | | | |
Loan Category | | Pass | | | Special | | | Substandard | | | Doubtful | | | | | | | | | | | | | |
Mention | | | | | | | | | | | | |
Residential real estate | | $ | 400,244 | | | $ | 4,797 | | | $ | 23,513 | | | $ | — | | | | | | | | | | | | | |
Commercial real estate | | | 394,238 | | | | 44,933 | | | | 41,323 | | | | — | | | | | | | | | | | | | |
Land/dev/construction | | | 39,650 | | | | 11,994 | | | | 3,830 | | | | — | | | | | | | | | | | | | |
Commercial | | | 114,067 | | | | 3,978 | | | | 6,180 | | | | — | | | | | | | | | | | | | |
Consumer | | | 49,894 | | | | 613 | | | | 772 | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 998,093 | | | $ | 66,315 | | | $ | 75,618 | | | $ | — | | | | | | | | | | | | | |
The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in residential and consumer loans, excluding loans covered by FDIC loss share agreements, based on payment activity as of September 30, 2013: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Residential | | | Consumer | | | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 438,342 | | | $ | 49,867 | | | | | | | | | | | | | | | | | | | | | |
Nonperforming | | | 10,882 | | | | 457 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 449,224 | | | $ | 50,324 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Credit Impaired Loans: |
Income recognized on loans we purchased from the FDIC is recognized pursuant to ASC Topic 310-30. A portion of the fair value discount has been ascribed as an accretable yield that is accreted into interest income over the estimated remaining life of the loans. The remaining non-accretable difference represents cash flows not expected to be collected. |
|
The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value of the loans as of September 30, 2013 and December 31, 2012. Contractually required principal and interest payments have been adjusted for estimated prepayments. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Sept 30, 2013 | | | Dec 31, 2012 | | | | | | | | | | | | | | | | | | | | | |
Contractually required principal and interest | | $ | 416,565 | | | $ | 534,989 | | | | | | | | | | | | | | | | | | | | | |
Non-accretable difference | | | (71,810 | ) | | | (142,855 | ) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows expected to be collected | | | 344,755 | | | | 392,134 | | | | | | | | | | | | | | | | | | | | | |
Accretable yield | | | (100,605 | ) | | | (93,107 | ) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carrying value of acquired loans | | $ | 244,150 | | | $ | 299,027 | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | (2,056 | ) | | | (2,649 | ) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carrying value less allowance for loan losses | | $ | 242,094 | | | $ | 296,378 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
We adjusted our estimates of future expected losses, cash flows and renewal assumptions during the current quarter. These adjustments resulted in an increase in expected cash flows and accretable yield, and a decrease in the non-accretable difference. We reclassified approximately $10,894 and $30,811 from non-accretable difference to accretable yield during the three and nine month period ending September 30, 2013, respectively, to reflect our adjusted estimates of future expected cash flows. The table below summarizes the changes in total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and carrying value of the loans during the three and nine month period ending September 30, 2013 and 2012. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Activity during the three month period ending September 30, 2013 | | June 30, | | | income | | | all other | | | Sept 30, | | | | | | | | | | | | | |
2013 | accretion | adjustments | 2013 | | | | | | | | | | | | |
Contractually required principal and interest | | $ | 449,146 | | | | | | | $ | (32,581 | ) | | $ | 416,565 | | | | | | | | | | | | | |
Non-accretable difference | | | (90,060 | ) | | | | | | | 18,250 | | | | (71,810 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows expected to be collected | | | 359,086 | | | | | | | | (14,331 | ) | | | 344,755 | | | | | | | | | | | | | |
Accretable yield | | | (99,407 | ) | | | 8,988 | | | | (10,186 | ) | | | (100,605 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carry value of acquired loans | | $ | 259,679 | | | $ | 8,988 | | | $ | (24,517 | ) | | $ | 244,150 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Activity during the nine month period ending September 30, 2013 | | Dec 31, | | | income | | | all other | | | Sept 30, | | | | | | | | | | | | | |
2012 | accretion | adjustments | 2013 | | | | | | | | | | | | |
Contractually required principal and interest | | $ | 534,989 | | | | | | | $ | (118,424 | ) | | $ | 416,565 | | | | | | | | | | | | | |
Non-accretable difference | | | (142,855 | ) | | | | | | | 71,045 | | | | (71,810 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows expected to be collected | | | 392,134 | | | | | | | | (47,379 | ) | | | 344,755 | | | | | | | | | | | | | |
Accretable yield | | | (93,107 | ) | | | 24,835 | | | | (32,333 | ) | | | (100,605 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carry value of acquired loans | | $ | 299,027 | | | $ | 24,835 | | | $ | (79,712 | ) | | $ | 244,150 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Activity during the three month period ending September 30, 2012 | | June 30, | | | Effect of | | | income | | | all other | | | Sept 30, | | | | | | | | | |
2012 | acquisitions | accretion | adjustments | 2012 | | | | | | | | |
Contractually required principal and interest | | $ | 594,439 | | | | | | | | | | | $ | (17,945 | ) | | $ | 576,494 | | | | | | | | | |
Non-accretable difference | | | (164,756 | ) | | | | | | | | | | | 5,415 | | | | (159,341 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows expected to be collected | | | 429,683 | | | | | | | | | | | | (12,530 | ) | | | 417,153 | | | | | | | | | |
Accretable yield | | | (100,286 | ) | | | | | | | 6,208 | | | | (11,334 | ) | | | (105,412 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carry value of acquired loans | | $ | 329,397 | | | $ | — | | | $ | 6,208 | | | $ | (23,864 | ) | | $ | 311,741 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Activity during the nine month period ending September 30, 2012 | | Dec 31, | | | Effect of | | | income | | | all other | | | Sept 30, | | | | | | | | | |
2011 | acquisitions | accretion | adjustments | 2012 | | | | | | | | |
Contractually required principal and interest | | $ | 291,531 | | | $ | 363,130 | | | | | | | $ | (78,167 | ) | | $ | 576,494 | | | | | | | | | |
Non-accretable difference | | | (51,536 | ) | | | (125,630 | ) | | | | | | | 17,825 | | | | (159,341 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows expected to be collected | | | 239,995 | | | | 237,500 | | | | | | | | (60,342 | ) | | | 417,153 | | | | | | | | | |
Accretable yield | | | (74,552 | ) | | | (32,975 | ) | | | 17,955 | | | | (15,840 | ) | | | (105,412 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carry value of acquired loans | | $ | 165,443 | | | $ | 204,525 | | | $ | 17,955 | | | $ | (76,182 | ) | | $ | 311,741 | | | | | | | | | |