Loans and Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2013 |
Loans And Allowance For Loan Losses [Abstract] | ' |
Loans And Allowance For Loan Losses | ' |
NOTE F – LOANS AND ALLOWANCE FOR LOAN LOSSES |
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The Company grants commercial and industrial, real estate, and installment loans to customers throughout its lending areas. Although the Company has a diversified loan portfolio, a substantial portion of the Company’s debtors’ abilities to honor their contracts is dependent upon the economic environment of the lending area. The major segments of loans (in thousands) as of September 30, 2013 and December 31, 2012 are summarized as follows. |
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| | | 30-Sep-13 | | | 31-Dec-12 | | | | | | | | | | | | | | | |
Commercial and Industrial | | $ | 218,504 | | $ | 267,080 | | | | | | | | | | | | | | | |
Construction | | | 171,683 | | | 206,391 | | | | | | | | | | | | | | | |
Real estate - commercial mortgage | | | 569,325 | | | 530,042 | | | | | | | | | | | | | | | |
Real estate - residential mortgage | | | 356,998 | | | 372,591 | | | | | | | | | | | | | | | |
Installment loans | | | 55,759 | | | 56,302 | | | | | | | | | | | | | | | |
Deferred loan fees and related costs | | | -1,541 | | | -131 | | | | | | | | | | | | | | | |
Total loans | | $ | 1,370,728 | | $ | 1,432,275 | | | | | | | | | | | | | | | |
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Allowance for Loan Losses |
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A rollforward of the activity (in thousands) within the allowance for loan losses by loan type and recorded investment in loans for the three and nine months ended September 30, 2013 and 2012 is as follows. |
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| | | Three Months Ended September 30, 2013 |
| | | | | | | | Real Estate - | | | | | | | | | |
| | Commercial and Industrial | | Construction | | Commercial Mortgage | | Residential Mortgage | | Installment | | Unallocated | | Total |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 3,430 | | $ | 11,223 | | $ | 8,100 | | $ | 8,670 | | $ | 701 | | $ | 6,110 | | $ | 38,234 |
Charge-offs | | | -920 | | | -218 | | | -14 | | | -1,244 | | | -47 | | | - | | | -2,443 |
Recoveries | | | 260 | | | 682 | | | 269 | | | 674 | | | 25 | | | - | | | 1,910 |
Provision | | | -91 | | | -575 | | | 2,409 | | | -625 | | | -67 | | | -1,051 | | | - |
Ending balance | | $ | 2,679 | | $ | 11,112 | | $ | 10,764 | | $ | 7,475 | | $ | 612 | | $ | 5,059 | | $ | 37,701 |
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| | Three Months Ended September 30, 2012 |
| | | | | | | | Real Estate - | | | | | | | | | |
| | Commercial and Industrial | | Construction | | Commercial Mortgage | | Residential Mortgage | | Installment | | Unallocated | | Total |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 11,450 | | $ | 16,494 | | $ | 14,457 | | $ | 10,924 | | $ | 850 | | $ | 8,732 | | $ | 62,907 |
Charge-offs | | | -4,040 | | | -2,310 | | | -4,304 | | | -2,467 | | | -160 | | | - | | | -13,281 |
Recoveries | | | 569 | | | 1,280 | | | 206 | | | 204 | | | 83 | | | - | | | 2,342 |
Provision | | | 981 | | | -591 | | | 2,140 | | | 1,810 | | | 295 | | | -2,159 | | | 2,476 |
Ending balance | | $ | 8,960 | | $ | 14,873 | | $ | 12,499 | | $ | 10,471 | | $ | 1,068 | | $ | 6,573 | | $ | 54,444 |
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| | | Nine Months Ended September 30, 2013 |
| | | | | | | | Real Estate - | | | | | | | | | |
| | Commercial and Industrial | | Construction | | Commercial Mortgage | | Residential Mortgage | | Installment | | Unallocated | | Total |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | |
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Beginning balance | | $ | 6,253 | | $ | 15,728 | | $ | 9,862 | | $ | 9,953 | | $ | 887 | | $ | 5,699 | | $ | 48,382 |
Charge-offs | | | -5,373 | | | -3,886 | | | -767 | | | -6,649 | | | -291 | | | - | | | -16,966 |
Recoveries | | | 1,349 | | | 1,415 | | | 676 | | | 1,687 | | | 158 | | | - | | | 5,285 |
Provision | | | 450 | | | -2,145 | | | 993 | | | 2,484 | | | -142 | | | -640 | | | 1,000 |
Ending balance | | $ | 2,679 | | $ | 11,112 | | $ | 10,764 | | $ | 7,475 | | $ | 612 | | $ | 5,059 | | $ | 37,701 |
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Ending balance: attributable to | | | | | | | | | | | | | | | | | | | | | |
loans individually evaluated | | | | | | | | | | | | | | | | | | | | | |
for impairment | | $ | 581 | | $ | 4,024 | | $ | 4,548 | | $ | 2,390 | | $ | 88 | | | | | $ | 11,631 |
Recorded investment: loans | | | | | | | | | | | | | | | | | | | | | |
individually evaluated for | | | | | | | | | | | | | | | | | | | | | |
impairment | | $ | 4,675 | | $ | 14,067 | | $ | 30,603 | | $ | 20,468 | | $ | 310 | | | | | | |
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Ending balance: attributable to | | | | | | | | | | | | | | | | | | | | | |
loans collectively evaluated | | | | | | | | | | | | | | | | | | | | | |
for impairment | | $ | 2,098 | | $ | 7,088 | | $ | 6,216 | | $ | 5,085 | | $ | 524 | | $ | 5,059 | | $ | 26,070 |
Recorded investment: loans | | | | | | | | | | | | | | | | | | | | | |
collectively evaluated for | | | | | | | | | | | | | | | | | | | | | |
impairment | | $ | 213,829 | | $ | 157,616 | | $ | 538,722 | | $ | 336,530 | | $ | 55,449 | | | | | | |
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| | Nine Months Ended September 30, 2012 |
| | | | | | | | Real Estate - | | | | | | | | | |
| | Commercial and Industrial | | Construction | | Commercial Mortgage | | Residential Mortgage | | Installment | | Unallocated | | Total |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | |
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Beginning balance | | $ | 13,605 | | $ | 24,826 | | $ | 17,101 | | $ | 12,060 | | $ | 2,067 | | $ | 5,288 | | $ | 74,947 |
Charge-offs | | | -15,505 | | | -9,498 | | | -7,810 | | | -7,692 | | | -428 | | | - | | | -40,933 |
Recoveries | | | 1,048 | | | 2,773 | | | 1,556 | | | 755 | | | 174 | | | - | | | 6,306 |
Provision | | | 9,812 | | | -3,228 | | | 1,652 | | | 5,348 | | | -745 | | | 1,285 | | | 14,124 |
Ending balance | | $ | 8,960 | | $ | 14,873 | | $ | 12,499 | | $ | 10,471 | | $ | 1,068 | | $ | 6,573 | | $ | 54,444 |
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Ending balance: attributable to | | | | | | | | | | | | | | | | | | | | | |
loans individually evaluated | | | | | | | | | | | | | | | | | | | | | |
for impairment | | $ | 4,609 | | $ | 4,628 | | $ | 5,812 | | $ | 4,503 | | $ | 228 | | | | | $ | 19,780 |
Recorded investment: loans | | | | | | | | | | | | | | | | | | | | | |
individually evaluated for | | | | | | | | | | | | | | | | | | | | | |
impairment | | $ | 28,277 | | $ | 38,679 | | $ | 57,082 | | $ | 39,295 | | $ | 554 | | | | | | |
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Ending balance: attributable to | | | | | | | | | | | | | | | | | | | | | |
loans collectively evaluated | | | | | | | | | | | | | | | | | | | | | |
for impairment | | $ | 4,351 | | $ | 10,245 | | $ | 6,687 | | $ | 5,968 | | $ | 840 | | $ | 6,573 | | $ | 34,664 |
Recorded investment: loans | | | | | | | | | | | | | | | | | | | | | |
collectively evaluated for | | | | | | | | | | | | | | | | | | | | | |
impairment | | $ | 218,848 | | $ | 194,515 | | $ | 475,802 | | $ | 340,263 | | $ | 23,748 | | | | | | |
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Impaired Loans |
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Total impaired loans were $70.1 million and $141.0 million at September 30, 2013 and December 31, 2012, respectively. Collateral dependent impaired loans, which are measured at the fair value of the underlying collateral less costs to sell, were $70.0 million and $134.5 million at September 30, 2013 and December 31, 2012, respectively. |
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Impaired loans for which no specific allowance is provided totaled $42.9 million and $84.8 million at September 30, 2013 and December 31, 2012, respectively. Loans written down to their estimated fair value of collateral less the costs to sell account for $16.4 million and $54.0 million of the impaired loans for which no allowance has been provided as of September 30, 2013 and December 31, 2012, respectively, and the weighted average age of appraisals for these loans is 0.44 years at September 30, 2013. The remaining impaired loans for which no allowance is provided are expected to be fully covered by the fair value of the collateral, and therefore, no additional loss is expected on these loans. |
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The following charts show recorded investment, unpaid balance, and related allowance of impaired loans (in thousands) by major segment and class as of September 30, 2013 and December 31, 2012. Certain amounts within the real estate – residential mortgage segment in the prior period have been reclassified between classes due to the improper description assigned to these loans. These reclassifications did not have a material impact on our allowance for loan losses in any period presented. |
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| | | | | | | | | | | Three Months Ended | | Nine Months Ended |
| | 30-Sep-13 | | 30-Sep-13 | | 30-Sep-13 |
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized |
| | Investment | | Balance | | Allowance | | Investment | | Recognized | | Investment | | Recognized |
With no related | | | | | | | | | | | | | | | | | | | | | |
allowance recorded: | | | | | | | | | | | | | | | | | | | | | |
Commercial & Industrial | | $ | 3,148 | | $ | 5,130 | | $ | - | | $ | 5,360 | | $ | 1 | | $ | 5,475 | | $ | 6 |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential | | | | | | | | | | | | | | | | | | | | | |
construction | | | 417 | | | 417 | | | - | | | 420 | | | - | | | 420 | | | - |
Commercial construction | | | 7,623 | | | 11,056 | | | - | | | 10,248 | | | - | | | 10,304 | | | 1 |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 14,542 | | | 15,707 | | | - | | | 16,057 | | | 83 | | | 16,260 | | | 187 |
Non-owner occupied | | | 3,274 | | | 12,755 | | | - | | | 12,838 | | | 7 | | | 12,854 | | | 22 |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family | | | | | | | | | | | | | | | | | | | | | |
1st lien | | | 11,851 | | | 14,481 | | | - | | | 14,194 | | | 27 | | | 14,762 | | | 82 |
Junior lien | | | 1,912 | | | 3,495 | | | - | | | 3,689 | | | 1 | | | 3,698 | | | 4 |
Installment | | | 115 | | | 327 | | | - | | | 328 | | | - | | | 328 | | | - |
| | $ | 42,882 | | $ | 63,368 | | $ | - | | $ | 63,134 | | $ | 119 | | $ | 64,101 | | $ | 302 |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | |
Commercial & Industrial | | $ | 1,527 | | $ | 1,527 | | $ | 581 | | $ | 2,441 | | $ | - | | $ | 2,490 | | $ | 7 |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential | | | | | | | | | | | | | | | | | | | | | |
construction | | | - | | | - | | | - | | | - | | | - | | | - | | | - |
Commercial construction | | | 6,027 | | | 7,413 | | | 4,024 | | | 6,901 | | | 4 | | | 6,910 | | | 11 |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 8,549 | | | 8,619 | | | 1,907 | | | 8,601 | | | 58 | | | 8,641 | | | 168 |
Non-owner occupied | | | 4,238 | | | 4,260 | | | 2,641 | | | 4,278 | | | 9 | | | 5,783 | | | 28 |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family | | | | | | | | | | | | | | | | | | | | | |
1st lien | | | 5,071 | | | 5,071 | | | 1,314 | | | 5,084 | | | 45 | | | 5,100 | | | 94 |
Junior lien | | | 1,634 | | | 1,634 | | | 1,076 | | | 1,643 | | | 6 | | | 1,648 | | | 16 |
Installment | | | 195 | | | 195 | | | 88 | | | 195 | | | 1 | | | 168 | | | 4 |
| | $ | 27,241 | | $ | 28,719 | | $ | 11,631 | | $ | 29,143 | | $ | 123 | | $ | 30,740 | | $ | 328 |
Total: | | | | | | | | | | | | | | | | | | | | | |
Commercial & Industrial | | $ | 4,675 | | $ | 6,657 | | $ | 581 | | $ | 7,801 | | $ | 1 | | $ | 7,965 | | $ | 13 |
Construction | | | 14,067 | | | 18,886 | | | 4,024 | | | 17,569 | | | 4 | | | 17,634 | | | 12 |
Real estate - | | | | | | | | | | | | | | | | | | | | | |
Commercial mortgage | | | 30,603 | | | 41,341 | | | 4,548 | | | 41,774 | | | 157 | | | 43,538 | | | 405 |
Residential mortgage | | | 20,468 | | | 24,681 | | | 2,390 | | | 24,610 | | | 79 | | | 25,208 | | | 196 |
Installment | | | 310 | | | 522 | | | 88 | | | 523 | | | 1 | | | 496 | | | 4 |
Total | | $ | 70,123 | | $ | 92,087 | | $ | 11,631 | | $ | 92,277 | | $ | 242 | | $ | 94,841 | | $ | 630 |
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| | | | | | | | | | | Three Months Ended | | Nine Months Ended |
| | 31-Dec-12 | | 30-Sep-12 | | 30-Sep-12 |
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized |
| | Investment | | Balance | | Allowance | | Investment | | Recognized | | Investment | | Recognized |
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With no related | | | | | | | | | | | | | | | | | | | | | |
allowance recorded: | | | | | | | | | | | | | | | | | | | | | |
Commercial & Industrial | | $ | 20,388 | | $ | 28,576 | | $ | - | | $ | 12,656 | | | 1 | | $ | 18,166 | | $ | 29 |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential | | | | | | | | | | | | | | | | | | | | | |
construction | | | 2,328 | | | 2,925 | | | - | | | 2,461 | | | - | | | 2,586 | | | - |
Commercial construction | | | 17,739 | | | 42,591 | | | - | | | 20,226 | | | 117 | | | 23,543 | | | 119 |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 21,277 | | | 26,246 | | | - | | | 20,917 | | | 19 | | | 24,561 | | | 195 |
Non-owner occupied | | | 7,639 | | | 17,426 | | | - | | | 9,073 | | | -66 | | | 7,056 | | | 119 |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family | | | | | | | | | | | | | | | | | | | | | |
1st lien | | | 10,818 | | | 13,746 | | | - | | | 11,084 | | | -51 | | | 15,260 | | | 23 |
Junior lien | | | 4,354 | | | 7,817 | | | - | | | 4,129 | | | 1 | | | 6,274 | | | 3 |
Installment | | | 220 | | | 469 | | | - | | | 223 | | | 1 | | | 201 | | | 4 |
| | $ | 84,763 | | $ | 139,796 | | $ | - | | $ | 80,769 | | $ | 22 | | $ | 97,647 | | $ | 492 |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | |
Commercial & Industrial | | $ | 3,097 | | $ | 3,103 | | $ | 2,005 | | $ | 14,824 | | | 34 | | $ | 10,633 | | $ | 36 |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential | | | | | | | | | | | | | | | | | | | | | |
construction | | | - | | | - | | | - | | | 3,649 | | | -94 | | | 391 | | | - |
Commercial construction | | | 14,697 | | | 16,418 | | | 5,318 | | | 21,397 | | | -64 | | | 14,278 | | | 178 |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 13,961 | | | 13,998 | | | 2,417 | | | 20,761 | | | 152 | | | 19,718 | | | 310 |
Non-owner occupied | | | 6,497 | | | 6,497 | | | 776 | | | 6,340 | | | 155 | | | 6,921 | | | 155 |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family | | | | | | | | | | | | | | | | | | | | | |
1st lien | | | 14,918 | | | 15,127 | | | 2,964 | | | 19,822 | | | 174 | | | 16,521 | | | 570 |
Junior lien | | | 2,838 | | | 2,854 | | | 1,148 | | | 4,216 | | | 6 | | | 2,056 | | | 18 |
Installment | | | 216 | | | 217 | | | 155 | | | 262 | | | 4 | | | 352 | | | 4 |
| | $ | 56,224 | | $ | 58,214 | | $ | 14,783 | | $ | 91,271 | | $ | 367 | | $ | 70,870 | | $ | 1,271 |
Total: | | | | | | | | | | | | | | | | | | | | | |
Commercial & Industrial | | $ | 23,485 | | $ | 31,679 | | $ | 2,005 | | $ | 27,480 | | $ | 35 | | $ | 28,799 | | $ | 65 |
Construction | | | 34,764 | | | 61,934 | | | 5,318 | | | 47,733 | | | -41 | | | 40,798 | | | 297 |
Real estate - | | | | | | | | | | | | | | | | | | | | | |
Commercial mortgage | | | 49,374 | | | 64,167 | | | 3,193 | | | 57,091 | | | 260 | | | 58,256 | | | 779 |
Residential mortgage | | | 32,928 | | | 39,544 | | | 4,112 | | | 39,251 | | | 130 | | | 40,111 | | | 614 |
Installment | | | 436 | | | 686 | | | 155 | | | 485 | | | 5 | | | 553 | | | 8 |
Total | | $ | 140,987 | | $ | 198,010 | | $ | 14,783 | | $ | 172,040 | | $ | 389 | | $ | 168,517 | | $ | 1,763 |
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Non-performing Assets |
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Non-performing assets consist of loans 90 days past due and still accruing interest, nonaccrual loans, and other real estate owned and repossessed assets. Total non-performing assets were $87.1 million or 4% of total assets at September 30, 2013 compared with $130.7 million or 6% of total assets at December 31, 2012. Non-performing assets (in thousands) as of September 30, 2013 and December 31, 2012 were as follows. |
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| | 30-Sep-13 | | 31-Dec-12 | | | | | | | | | | | | | | | |
Loans 90 days past due and still accruing interest | | $ | 320 | | $ | 1,024 | | | | | | | | | | | | | | | |
Nonaccrual loans, including nonaccrual impaired loans | | | 47,604 | | | 97,411 | | | | | | | | | | | | | | | |
Other real estate owned and repossessed assets | | | 39,196 | | | 32,215 | | | | | | | | | | | | | | | |
Non-performing assets | | $ | 87,120 | | $ | 130,650 | | | | | | | | | | | | | | | |
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Nonaccrual and Past Due Loans |
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A reconciliation of non-performing loans to impaired loans (in thousands) for the periods ended September 30, 2013 and December 31, 2012 is as follows. |
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| | 30-Sep-13 | | 31-Dec-12 | | | | | | | | | | | | | | | |
Loans 90 days past due and still accruing interest | | $ | 320 | | $ | 1,024 | | | | | | | | | | | | | | | |
Nonaccrual loans, including nonaccrual impaired loans | | | 47,604 | | | 97,411 | | | | | | | | | | | | | | | |
Total non-performing loans | | | 47,924 | | | 98,435 | | | | | | | | | | | | | | | |
TDRs on accrual | | | 17,775 | | | 16,945 | | | | | | | | | | | | | | | |
Impaired loans on accrual | | | 4,424 | | | 25,607 | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 70,123 | | $ | 140,987 | | | | | | | | | | | | | | | |
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Nonaccrual loans were $47.6 million at September 30, 2013 compared to $97.4 million at December 31, 2012. If income on nonaccrual loans had been recorded under original terms, $2.0 million and $5.7 million of additional interest income would have been recorded for the nine months ended September 30, 2013 and 2012, respectively. The following table provides a rollforward of nonaccrual loans (in thousands) for the nine months ended September 30, 2013. |
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| | | | | | | | Real Estate | | | | | | | | | |
| | Commercial & Industrial | | Construction | | Commercial Mortgage | | Residential Mortgage | | Installment | | Total | | | |
Balance at December 31, 2012 | | $ | 22,413 | | $ | 28,505 | | $ | 25,032 | | $ | 21,206 | | $ | 255 | | $ | 97,411 | | | |
Transfers in | | | 1,404 | | | 8,177 | | | 10,013 | | | 6,812 | | | 116 | | | 26,522 | | | |
Transfers to OREO | | | -8,405 | | | -3,111 | | | -3,366 | | | -5,807 | | | -3 | | | -20,692 | | | |
Charge-offs | | | -4,919 | | | -3,638 | | | -804 | | | -5,553 | | | -114 | | | -15,028 | | | |
Payments | | | -7,196 | | | -15,018 | | | -7,983 | | | -2,698 | | | -33 | | | -32,928 | | | |
Return to accrual | | | -8 | | | -1,632 | | | -5,357 | | | -670 | | | -14 | | | -7,681 | | | |
Loan type reclassification | | | 1,310 | | | 336 | | | -1,646 | | | - | | | - | | | - | | | |
Balance at September 30, 2013 | | $ | 4,599 | | $ | 13,619 | | $ | 15,889 | | $ | 13,290 | | $ | 207 | | $ | 47,604 | | | |
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Age Analysis of Past Due Loans |
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An age analysis of past due loans (in thousands) as of September 30, 2013 and December 31, 2012 is as follows. |
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| | 30-Sep-13 |
| | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days or More Past Due | | Total Past Due | | Current | | Total Loans | | 90 Days or More Past Due and Accruing |
Commercial & Industrial | | $ | 547 | | $ | 128 | | $ | 4,599 | | $ | 5,274 | | $ | 213,230 | | $ | 218,504 | | $ | - |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | - | | | - | | | 417 | | | 417 | | | 19,466 | | | 19,883 | | | - |
Commercial construction | | | 2,542 | | | - | | | 13,202 | | | 15,744 | | | 136,056 | | | 151,800 | | | - |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 230 | | | - | | | 9,362 | | | 9,592 | | | 266,911 | | | 276,503 | | | - |
Non-owner occupied | | | 44 | | | - | | | 6,527 | | | 6,571 | | | 286,251 | | | 292,822 | | | - |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 555 | | | - | | | 10,945 | | | 11,500 | | | 213,327 | | | 224,827 | | | 320 |
Secured by 1-4 family, junior lien | | | 455 | | | - | | | 2,665 | | | 3,120 | | | 129,051 | | | 132,171 | | | - |
Installment | | | 7 | | | - | | | 207 | | | 214 | | | 55,545 | | | 55,759 | | | - |
Deferred loan fees and related costs | | | - | | | - | | | - | | | - | | | -1,541 | | | -1,541 | | | - |
Total | | $ | 4,380 | | $ | 128 | | $ | 47,924 | | $ | 52,432 | | $ | 1,318,296 | | $ | 1,370,728 | | $ | 320 |
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| | | 31-Dec-12 |
| | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days or More Past Due | | Total Past Due | | Current | | Total Loans | | 90 Days or More Past Due and Accruing |
Commercial & Industrial | | $ | 402 | | $ | 141 | | $ | 23,436 | | $ | 23,979 | | $ | 243,101 | | $ | 267,080 | | $ | 1,024 |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | - | | | - | | | 2,328 | | | 2,328 | | | 15,181 | | | 17,509 | | | - |
Commercial construction | | | 973 | | | 780 | | | 26,177 | | | 27,930 | | | 160,952 | | | 188,882 | | | - |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 1,882 | | | 87 | | | 19,920 | | | 21,889 | | | 269,863 | | | 291,752 | | | - |
Non-owner occupied | | | 50 | | | - | | | 5,112 | | | 5,162 | | | 233,128 | | | 238,290 | | | - |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 3,098 | | | 3,394 | | | 15,918 | | | 22,410 | | | 202,641 | | | 225,051 | | | - |
Secured by 1-4 family, junior lien | | | 527 | | | 421 | | | 5,289 | | | 6,237 | | | 141,303 | | | 147,540 | | | - |
Installment | | | 3 | | | 11 | | | 255 | | | 269 | | | 56,033 | | | 56,302 | | | - |
Deferred loan fees and related costs | | | - | | | - | | | - | | | - | | | -131 | | | -131 | | | - |
Total | | $ | 6,935 | | $ | 4,834 | | $ | 98,435 | | $ | 110,204 | | $ | 1,322,071 | | $ | 1,432,275 | | $ | 1,024 |
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Credit Quality |
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The following tables provide information (in thousands) on September 30, 2013 and December 31, 2012 about the credit quality of the loan portfolio using the Company’s internal rating system as an indicator. |
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| | 30-Sep-13 | | | | | | |
| | Pass | | Special Mention | | Substandard | | Nonaccrual Loans | | Total | | | | | | |
Commercial & Industrial | | $ | 196,275 | | $ | 12,965 | | $ | 4,665 | | $ | 4,599 | | $ | 218,504 | | | | | | |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | 18,165 | | | 57 | | | 1,244 | | | 417 | | | 19,883 | | | | | | |
Commercial construction | | | 86,123 | | | 43,880 | | | 8,595 | | | 13,202 | | | 151,800 | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 214,454 | | | 45,117 | | | 7,570 | | | 9,362 | | | 276,503 | | | | | | |
Non-owner occupied | | | 246,752 | | | 28,856 | | | 10,687 | | | 6,527 | | | 292,822 | | | | | | |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 168,493 | | | 31,371 | | | 14,338 | | | 10,625 | | | 224,827 | | | | | | |
Secured by 1-4 family, junior lien | | | 120,904 | | | 6,810 | | | 1,792 | | | 2,665 | | | 132,171 | | | | | | |
Installment | | | 51,465 | | | 3,743 | | | 344 | | | 207 | | | 55,759 | | | | | | |
Deferred loan fees and related costs | | | -1,541 | | | - | | | - | | | - | | | -1,541 | | | | | | |
Total | | $ | 1,101,090 | | $ | 172,799 | | $ | 49,235 | | $ | 47,604 | | $ | 1,370,728 | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-12 | | | | | | |
| | Pass | | Special Mention | | Substandard | | Nonaccrual Loans | | Total | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Commercial & Industrial | | $ | 228,441 | | $ | 8,560 | | $ | 7,667 | | $ | 22,412 | | $ | 267,080 | | | | | | |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | 12,613 | | | 1,294 | | | 1,274 | | | 2,328 | | | 17,509 | | | | | | |
Commercial construction | | | 98,084 | | | 25,513 | | | 39,108 | | | 26,177 | | | 188,882 | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 212,589 | | | 39,003 | | | 20,240 | | | 19,920 | | | 291,752 | | | | | | |
Non-owner occupied | | | 181,728 | | | 39,622 | | | 11,828 | | | 5,112 | | | 238,290 | | | | | | |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 167,068 | | | 22,433 | | | 19,632 | | | 15,918 | | | 225,051 | | | | | | |
Secured by 1-4 family, junior lien | | | 132,248 | | | 5,656 | | | 4,347 | | | 5,289 | | | 147,540 | | | | | | |
Installment | | | 49,975 | | | 1,202 | | | 4,870 | | | 255 | | | 56,302 | | | | | | |
Deferred loan fees and related costs | | | -131 | | | - | | | - | | | - | | | -131 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,082,615 | | $ | 143,283 | | $ | 108,966 | | $ | 97,411 | | $ | 1,432,275 | | | | | | |
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Modifications |
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Loans meeting the criteria to be classified as Troubled Debt Restructurings (“TDRs”) are included in impaired loans. As of September 30, 2013 and December 31, 2012, loans classified as TDRs were $31.2 million and $34.7 million, respectively. The following table shows the loans (in thousands) classified by management as TDRs at September 30, 2013 and December 31, 2012. |
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| | | 30-Sep-13 | | 31-Dec-12 | | | | | | | | | |
Troubled Debt Restructurings | | Number of Contracts | | Recorded Investment | | Number of Contracts | | Recorded Investment | | | | | | | | | |
Commercial & Industrial | | | 2 | | $ | 884 | | | 6 | | $ | 982 | | | | | | | | | |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | - | | | - | | | 1 | | | 1,582 | | | | | | | | | |
Commercial construction | | | 12 | | | 5,588 | | | 16 | | | 8,711 | | | | | | | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 13 | | | 15,219 | | | 12 | | | 11,118 | | | | | | | | | |
Non-owner occupied | | | 2 | | | 1,388 | | | 4 | | | 7,001 | | | | | | | | | |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 28 | | | 7,822 | | | 24 | | | 5,093 | | | | | | | | | |
Secured by 1-4 family, junior lien | | | 5 | | | 340 | | | 1 | | | 181 | | | | | | | | | |
Installment | | | 1 | | | 4 | | | - | | | - | | | | | | | | | |
Total | | | 63 | | $ | 31,245 | | | 64 | | $ | 34,668 | | | | | | | | | |
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Of total TDRs, $18.4 million was accruing and $12.8 million was nonaccruing at September 30, 2013 and $16.9 million was accruing and $17.7 million was nonaccruing at December 31, 2012. Loans that are on nonaccrual status at the time of the restructuring generally remain on nonaccrual status for approximately six months before management considers whether such loans may return to accrual status. TDRs in nonaccrual status are returned to accrual status after a period of performance under which the borrower demonstrates the ability and willingness to repay the loan in accordance with the modified terms. There were no nonaccrual TDRs that were returned to accrual status during the nine months ended September 30, 2013 and $546 thousand were returned to accrual status during the year ended December 31, 2012. The following table shows a rollforward of accruing and nonaccruing TDRs (in thousands) for the nine months ended September 30, 2013. |
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| | Accruing | | Non Accruing | | Total | | | | | | | | | | | | |
Balance at December 31, 2012 | | $ | 16,945 | | $ | 17,723 | | $ | 34,668 | | | | | | | | | | | | |
Charge-offs | | | - | | | -490 | | | -490 | | | | | | | | | | | | |
Payments | | | -250 | | | -9,089 | | | -9,339 | | | | | | | | | | | | |
New TDR designation | | | 7,722 | | | 3,760 | | | 11,482 | | | | | | | | | | | | |
Release TDR designation | | | -5,076 | | | - | | | -5,076 | | | | | | | | | | | | |
Transfer | | | -884 | | | 884 | | | - | | | | | | | | | | | | |
Balance at September 30, 2013 | | $ | 18,457 | | $ | 12,788 | | $ | 31,245 | | | | | | | | | | | | |
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The allowance for loan losses allocated to TDRs was $4.6 million and $1.7 million at September 30, 2013 and December 31, 2012. The total of TDRs charged off were $490 thousand during the nine months ended September 30, 2013 and $4.0 million during the year ended December 31, 2012. |
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At a minimum, TDRs are reported as such during the calendar year in which the restructuring or modification takes place. In subsequent years, TDRs may be removed from this disclosure classification if the loan did not involve a below market rate concession and the loan is not deemed to be impaired based on the terms specified in the restructuring agreement. The Company had one loan totaling $5.1 million that was removed from TDR status during the first nine months of 2013. |
The following tables show a summary of the primary reason and pre- and post-modification outstanding recorded investment (in thousands, except number of contracts) for loan modifications that were classified as TDRs during the three and nine month periods ended September 30, 2013 and 2012. These tables include modifications made to existing TDRs as well as new modifications that are considered TDRs for the periods presented. TDRs made with a below market rate that also include a modification of loan structure are included under rate change. |
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| | For the Three Months Ended September 30, 2013 | | | |
| | Rate | | Structure | | | |
Troubled Debt Restructurings | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | | |
Commercial & Industrial | | | - | | $ | - | | $ | - | | | - | | $ | - | | $ | - | | | |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Commercial construction | | | - | | | - | | | - | | | 3 | | | 3,241 | | | 3,241 | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | - | | | - | | | - | | | 4 | | | 472 | | | 472 | | | |
Secured by 1-4 family, junior lien | | | - | | | - | | | - | | | 2 | | | 108 | | | 108 | | | |
Installment | | | - | | | - | | | - | | | 1 | | | 4 | | | 4 | | | |
Total | | | - | | $ | - | | $ | - | | | 10 | | $ | 3,825 | | $ | 3,825 | | | |
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| | For the Three Months Ended September 30, 2012 | | | |
| | Rate | | Structure | | | |
Troubled Debt Restructurings | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | | |
Commercial & Industrial | | | 2 | | $ | 897 | | $ | 897 | | | - | | $ | - | | $ | - | | | |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Commercial construction | | | 1 | | | 334 | | | 186 | | | - | | | - | | | - | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 1 | | | 551 | | | 551 | | | - | | | - | | | - | | | |
Non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 1 | | | 400 | | | 316 | | | - | | | - | | | - | | | |
Secured by 1-4 family, junior lien | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Installment | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Total | | | 5 | | $ | 2,182 | | $ | 1,950 | | | - | | $ | - | | $ | - | | | |
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| | For the Nine Months Ended September 30, 2013 | | | |
| | Rate | | Structure | | | |
Troubled Debt Restructurings | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | | |
Commercial & Industrial | | | - | | $ | - | | $ | - | | | - | | $ | - | | $ | - | | | |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Commercial construction | | | - | | | - | | | - | | | 3 | | | 3,241 | | | 3,241 | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | - | | | - | | | - | | | 2 | | | 4,721 | | | 4,721 | | | |
Non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 1 | | | 2,010 | | | 2,004 | | | 5 | | | 1,347 | | | 1,347 | | | |
Secured by 1-4 family, junior lien | | | - | | | - | | | - | | | 4 | | | 159 | | | 159 | | | |
Installment | | | - | | | - | | | - | | | 1 | | | 4 | | | 4 | | | |
Total | | | 1 | | $ | 2,010 | | $ | 2,004 | | | 15 | | $ | 9,472 | | $ | 9,472 | | | |
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Included in the above table are five loans totaling $5.6 million that met the criteria to be classified as a TDR during first quarter 2013 and were not previously disclosed in this table. |
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| | For the Nine Months Ended September 30, 2012 | | | |
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| | Rate | | Structure | | | |
Troubled Debt Restructurings | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment | | | |
Commercial & Industrial | | | 2 | | $ | 897 | | $ | 897 | | | - | | $ | - | | $ | - | | | |
Construction | | | | | | | | | | | | | | | | | | | | | |
1-4 family residential construction | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Commercial construction | | | 2 | | | 724 | | | 576 | | | 5 | | | 1,350 | | | 1,350 | | | |
Real estate | | | | | | | | | | | | | | | | | | | | | |
Commercial Mortgage | | | | | | | | | | | | | | | | | | | | | |
Owner occupied | | | 2 | | | 7,142 | | | 5,784 | | | - | | | - | | | - | | | |
Non-owner occupied | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Residential Mortgage | | | | | | | | | | | | | | | | | | | | | |
Secured by 1-4 family, 1st lien | | | 1 | | | 400 | | | 316 | | | 2 | | | 868 | | | 868 | | | |
Secured by 1-4 family, junior lien | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Installment | | | - | | | - | | | - | | | - | | | - | | | - | | | |
Total | | | 7 | | $ | 9,163 | | $ | 7,573 | | | 7 | | $ | 2,218 | | $ | 2,218 | | | |
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For the three and nine months ended September 30, 2013 and 2012, the Company had no loans modified as TDRs within the previous twelve months and for which there was a payment default and subsequent movement of the TDR to nonaccrual status during the period. |
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Loans that are considered TDRs are considered specifically impaired and the primary consideration for measurement of impairment is the present value of the expected cash flows. However, given the prevalence of real estate secured loans in the Company’s portfolio of troubled assets, the majority of the Company’s TDR loans are ultimately considered collateral-dependent. Impairments are, therefore, calculated based upon the fair value of the underlying collateral and observable market prices for the sale of the respective notes are not considered as a basis for impairment for any of the Company’s loans. To determine fair value, the Company utilizes a proprietary database of its own historical property appraisals in conjunction with external data and applies a relevant discount derived from analysis of appraisals of similar property type, vintage, and geographic location. |
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The Company does not participate in any government or company sponsored TDR programs and holds no corresponding assets. Rather, loans are individually modified in situations where the Company believes it will minimize the probability of losses to the Company. Additionally, the Company had no commitments to lend additional funds to debtors owing receivables whose terms have been modified in TDRs at September 30, 2013 and December 31, 2012. |
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