LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES | 9 Months Ended |
Sep. 30, 2013 |
LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES | ' |
NOTE 5 – LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES |
|
As of September 30, 2013 and December 31, 2012 the Company had the following balances in its loan and lease portfolio: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Non-Traditional | | | Traditional | | | Total NTM and | | | Purchased Credit | | | Total Loans and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgages (NTM) | Loans | Traditional Loans | Impaired | Leases Receivable | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ($ in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
September 30, 2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | — | | | $ | 247,323 | | | $ | 247,323 | | | $ | 3,600 | | | $ | 250,923 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | — | | | | 464,211 | | | | 464,211 | | | | 18,987 | | | | 483,198 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | 129,351 | | | | 129,351 | | | | 831 | | | | 130,182 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | — | | | | 23,923 | | | | 23,923 | | | | 3,801 | | | | 27,724 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | 22,827 | | | | 22,827 | | | | — | | | | 22,827 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | 21,325 | | | | 21,325 | | | | — | | | | 21,325 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 209,324 | | | | 859,097 | | | | 1,068,421 | | | | 321,078 | | | | 1,389,499 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans (HELOC)—First Liens | | | 158,517 | | | | — | | | | 158,517 | | | | — | | | | 158,517 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans (HELOC)—Second Liens | | | 6,309 | | | | — | | | | 6,309 | | | | — | | | | 6,309 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other HELOC’s, home equity loans, and other consumer installment credit | | | 113 | | | | 102,694 | | | | 102,807 | | | | 831 | | | | 103,638 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Gross Loans | | | 374,263 | | | | 1,870,751 | | | | 2,245,014 | | | | 349,128 | | | | 2,594,142 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Percentage to total gross loans | | | 14.4 | % | | | 72.1 | % | | | 86.5 | % | | | 13.5 | % | | | 100 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net deferred loan costs | | | | | | | | | | | | | | | | | | $ | 842 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unamortized purchase premium | | | | | | | | | | | | | | | | | | | 1,204 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | | | | | | | | | | (19,130 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans and leases receivable, net | | | | | | | | | | | | | | | | | | $ | 2,577,058 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | — | | | $ | 73,585 | | | $ | 73,585 | | | $ | 6,808 | | | $ | 80,393 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | — | | | | 318,051 | | | | 318,051 | | | | 21,837 | | | | 339,888 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | 112,829 | | | | 112,829 | | | | 845 | | | | 113,674 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | — | | | | 30,512 | | | | 30,512 | | | | 5,608 | | | | 36,120 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | 6,648 | | | | 6,648 | | | | — | | | | 6,648 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | 11,203 | | | | 11,203 | | | | — | | | | 11,203 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 162,127 | | | | 211,527 | | | | 373,654 | | | | 65,066 | | | | 438,720 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans (HELOC)—First Liens | | | 198,351 | | | | — | | | | 198,351 | | | | — | | | | 198,351 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans (HELOC)—Second Liens | | | 7,653 | | | | — | | | | 7,653 | | | | — | | | | 7,653 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other HELOC’s, home equity loans, and other consumer installment credit | | | 113 | | | | 13,740 | | | | 13,853 | | | | 56 | | | | 13,909 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Gross Loans | | $ | 368,244 | | | $ | 778,095 | | | $ | 1,146,339 | | | $ | 100,220 | | | $ | 1,246,559 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Percentage to total gross loans | | | 29.5 | % | | | 62.5 | % | | | 92 | % | | | 8 | % | | | 100 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net deferred loan costs | | | | | | | | | | | | | | | | | | $ | 447 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unamortized purchase premium | | | | | | | | | | | | | | | | | | | 1,465 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | | | | | | | | | | (14,448 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans and leases receivable, net | | | | | | | | | | | | | | | | | | $ | 1,234,023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Non Traditional Mortgage Loans |
|
The Company’s non-traditional mortgage (“NTM”) portfolio is comprised of three interest only products: the Green Account Loans (Green Loans), the hybrid interest only fixed or adjustable rate mortgage (Interest Only) and a small number of loans with the potential for negative amortization. As of September 30, 2013 and December 31, 2012, the non-traditional mortgage loans totaled $374.3 million or 14.4 percent of the total gross loan portfolio and $368.2 million or 29.5 percent of the total gross loan portfolio, respectively. Despite the decrease in percentage to total gross loan portfolio, total NTM loans increased $6.0 million or 1.6 percent. The following table represents the composition of the NTM portfolio at the dates indicated: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Count | | | Amount | | | Percent | | | Count | | | Amount | | | Percent | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ($ in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
Green | | | 203 | | | $ | 164,826 | | | | 44 | % | | | 239 | | | $ | 206,004 | | | | 56 | % | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-only | | | 292 | | | | 192,363 | | | | 51.4 | | | | 191 | | | | 142,978 | | | | 38.8 | | | | | | | | | | | | | | | | | | | | | | | | | |
Negative amortization | | | 38 | | | | 17,074 | | | | 4.6 | | | | 40 | | | | 19,262 | | | | 5.2 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total NTM loans | | | 533 | | | $ | 374,263 | | | | 100 | % | | | 470 | | | $ | 368,244 | | | | 100 | % | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total gross loan portfolio | | | | | | $ | 2,594,142 | | | | | | | | | | | $ | 1,246,559 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
% of NTM to total gross loan portfolio | | | | | | | 14.4 | % | | | | | | | | | | | 29.5 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Green Loans |
|
Green Loans are single family residence first and second mortgage lines of credit with a linked checking account that allows all types of deposits and withdrawals to be performed. The loans are generally interest only with a 15 year balloon payment due at maturity. At September 30, 2013, Green Loans totaled $164.8 million, a decrease of $41.2 million or 20.0 percent from $206.0 million at December 31, 2012, primarily due to reductions in principal balance and payoffs of $9.2 million and $39.7 million, respectively, partially offset by advances of $7.7 million. As of September 30, 2013 and December 31, 2012, $4.5 million and $5.7 million, respectively, of the Company’s Green Loans were non-performing. As a result of their unique payment feature, Green Loans possess higher credit risk due to the potential of negative amortization; however, management believes the risk is mitigated through the Company’s loan terms and underwriting standards, including its policies on loan-to-value ratios. The Company discontinued origination of the Green Loan products in 2011. |
|
Interest Only Loans |
|
Interest only loans are primarily single family residence first mortgage loans with payment features that allow interest only payment in initial periods before converting to fully amortizing payments. As of September 30, 2013, our interest only loans increased by $49.4 million or 34.5 percent to $192.4 million from $143.0 million at December 31, 2012, primarily due to purchases of $55.7 million and originations of $174.0 million, partially offset by sales of $64.0 million, payoffs and principal reductions of $87.8 million, and reclassification of $28.4 million from NTM interest only to traditional loans due to the expiration of the initial interest only period and conversion to a fully amortizing basis. As of September 30, 2013 and December 31, 2012, $297 thousand and $6.2 million, respectively, of the Company’s interest only loans were non-performing. |
|
Loans with the Potential for Negative Amortization |
|
Negative amortization loans decreased by $2.2 million or 11.4 percent to $17.1 million as of September 30, 2013 from $19.3 million as of December 31, 2012. The Company discontinued origination of negative amortization loans in 2007. As of September 30, 2013 and December 31, 2012, $158 thousand and none, respectively, of the Company’s loans that had the potential for negative amortization were non-performing. These loans pose a potentially higher credit risk because of the lack of principal amortization and potential for negative amortization; however, management believes the risk is mitigated through the Company’s loan terms and underwriting standards, including its policies on loan-to-value ratios. |
|
Risk Management of Non-Traditional Mortgages |
|
The Company has assessed that the most significant performance indicators for non-traditional mortgages (NTMs) are loan-to-value (LTV) and FICO scores. Accordingly, the Company manages credit risk in the NTM portfolio through semi-annual review of the loan portfolio that includes refreshing FICO scores on the Green Loans and home equity lines of credit, typically in November and April or as needed in conjunction with portfolio management, and ordering third party automated valuation models. The loan review is designed to provide a method of identifying borrowers who may be experiencing financial difficulty before they actually fail to make a loan payment. Upon receipt of the updated FICO scores, an exception report is run to identify loans with a decrease in FICO of 10 percent or more and a resulting FICO of 620 or less. The loans are then further analyzed to determine if the risk rating should be downgraded which will increase the reserves the Company will establish for potential losses. A report of the semi-annual loan review is published and regularly monitored. |
|
As these loans are revolving lines of credit, the Company, based on the loan agreement and loan covenants of the particular loan, as well as applicable rules and regulations, could suspend the borrowing privileges or reduce the credit limit at any time the Company reasonably believes that the borrower will be unable to fulfill their repayment obligations under the agreement or certain other conditions are met. In many cases, the decrease in FICO is the first red flag that the borrower may have difficulty in making their future payment obligations. |
|
As a result, the Company proactively manages the portfolio by performing detailed analysis on its portfolio with emphasis on the non-traditional mortgage portfolio. The Company’s Internal Asset Review Committee (IARC) conducts monthly meetings to review the loans classified as special mention, substandard, or doubtful and determines whether suspension or reduction in credit limit is warranted. If the line has been suspended and the borrower would like to have their credit privileges reinstated, they would need to provide updated financials showing their ability to meet their payment obligations. |
|
On the interest only loans, the Company projects future payment changes to determine if there will be an increase in payment of 3.50 percent or greater and then monitors the loans for possible delinquency. The individual loans are monitored for possible downgrading of risk rating, and trends within the portfolio are identified that could affect other interest only loans scheduled for payment changes in the near future. |
|
Non Traditional Mortgage Performance Indicators |
|
The tables below represent the Company’s non-traditional one-to-four SFR mortgage Green Loans first lien portfolio at September 30, 2013 by FICO scores that were obtained during the second quarter of 2013, comparing to the FICO scores that were obtained during the fourth quarter of 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | Changes in count and amounts | | | | | | | | | | | | | |
| | Count | | | Amount | | | Percent | | | Count | | | Amount | | | Percent | | | Count change | | | Amount change | | | Percent change | | | | | | | | | | | | | |
| | ($ in thousands) | | | | | | | | | | | | | |
800+ | | | 13 | | | $ | 3,925 | | | | 2.5 | % | | | 8 | | | $ | 6,991 | | | | 4.4 | % | | | 5 | | | $ | (3,066 | ) | | | (1.9 | )% | | | | | | | | | | | | |
700-799 | | | 96 | | | | 87,340 | | | | 55.1 | | | | 102 | | | | 81,021 | | | | 51.1 | | | | (6 | ) | | | 6,319 | | | | 4 | | | | | | | | | | | | | |
600-699 | | | 45 | | | | 38,198 | | | | 24.1 | | | | 44 | | | | 43,226 | | | | 27.3 | | | | 1 | | | | (5,028 | ) | | | (3.2 | ) | | | | | | | | | | | | |
<600 | | | 14 | | | | 13,952 | | | | 8.8 | | | | 14 | | | | 12,177 | | | | 7.7 | | | | — | | | | 1,775 | | | | 1.1 | | | | | | | | | | | | | |
No FICO | | | 10 | | | | 15,102 | | | | 9.5 | | | | 10 | | | | 15,102 | | | | 9.5 | | | | — | | | | — | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | | 178 | | | $ | 158,517 | | | | 100 | % | | | 178 | | | $ | 158,517 | | | | 100 | % | | | — | | | $ | — | | | | — | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The 700-799 FICO score category increased by 4.0 percent to 55.1 percent of total non-traditional one-to-four SFR mortgage Green Loans first lien at September 30, 2013 from 51.1 percent at December 31, 2012 from FICO scores obtained during the fourth quarter of 2012. |
|
Loan to Value |
|
The table below represents the Company’s one-to-four SFR non-traditional mortgage first lien portfolio by LTV as of the dates indicated: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Green | | | I/O | | | Neg Am | | | Total | |
| | Count | | | Amount | | | Percentage | | | Count | | | Amount | | | Percentage | | | Count | | | Amount | | | Percentage | | | Count | | | Amount | | | Percentage | |
| | ($ in thousands) | |
September 30, 2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LTV’s (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
< 61 | | | 60 | | | $ | 56,734 | | | | 35.7 | % | | | 71 | | | $ | 66,070 | | | | 34.4 | % | | | 13 | | | $ | 5,114 | | | | 30 | % | | | 144 | | | $ | 127,918 | | | | 34.8 | % |
61-80 | | | 55 | | | | 55,295 | | | | 34.9 | | | | 85 | | | | 72,620 | | | | 37.8 | | | | 7 | | | | 4,613 | | | | 27 | | | | 147 | | | | 132,528 | | | | 36 | |
81-100 | | | 36 | | | | 28,639 | | | | 18.1 | | | | 57 | | | | 27,526 | | | | 14.3 | | | | 12 | | | | 5,735 | | | | 33.6 | | | | 105 | | | | 61,900 | | | | 16.8 | |
> 100 | | | 27 | | | | 17,849 | | | | 11.3 | | | | 78 | | | | 26,034 | | | | 13.5 | | | | 6 | | | | 1,612 | | | | 9.4 | | | | 111 | | | | 45,495 | | | | 12.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | | 178 | | | | 158,517 | | | | 100 | % | | | 291 | | | | 192,250 | | | | 100 | % | | | 38 | | | | 17,074 | | | | 100 | % | | | 507 | | | | 367,841 | | | | 100 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LTV’s (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
< 61 | | | 51 | | | $ | 59,546 | | | | 30 | % | | | 60 | | | $ | 47,295 | | | | 33.1 | % | | | 11 | | | $ | 2,442 | | | | 12.6 | % | | | 122 | | | $ | 109,283 | | | | 30.3 | % |
61-80 | | | 63 | | | | 51,934 | | | | 26.2 | | | | 72 | | | | 59,025 | | | | 41.3 | | | | 4 | | | | 1,225 | | | | 6.4 | | | | 139 | | | | 112,184 | | | | 31.1 | |
81-100 | | | 61 | | | | 62,518 | | | | 31.5 | | | | 27 | | | | 17,578 | | | | 12.3 | | | | 11 | | | | 8,120 | | | | 42.2 | | | | 99 | | | | 88,216 | | | | 24.5 | |
> 100 | | | 37 | | | | 24,353 | | | | 12.3 | | | | 31 | | | | 18,967 | | | | 13.3 | | | | 14 | | | | 7,475 | | | | 38.8 | | | | 82 | | | | 50,795 | | | | 14.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | | 212 | | | $ | 198,351 | | | | 100 | % | | | 190 | | | $ | 142,865 | | | | 100 | % | | | 40 | | | $ | 19,262 | | | | 100 | % | | | 442 | | | $ | 360,478 | | | | 100 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
-1 | LTV represents estimated current loan to value ratio, determined by dividing current unpaid principal balance by latest estimated property value received per the Company’s policy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
At September 30, 2013, the increase in interest only loans primarily related to purchases of 153 loans with a carrying value of $55.7 million and originations of $174.0 million, partially offset by sales, payoffs, principal reductions, and conversions to traditional loans of $180.1 million. |
|
Allowance for Loan and Lease Losses |
|
The Company has an established credit risk management process that includes regular management review of the loan and lease portfolio to identify problem loans and leases. During the ordinary course of business, management becomes aware of borrowers and lessees that may not be able to meet the contractual requirements of the loan and lease agreements. Such loans and leases are subject to increased monitoring. Consideration is given to placing the loan or lease on non-accrual status, assessing the need for additional allowance for loan and lease losses, and partial or full charge-off. The Company maintains the allowance for loan and lease losses at a level that is considered adequate to cover the estimated and known inherent risks in the loan portfolio and off-balance sheet unfunded credit commitments. The allowance for loan and lease losses includes allowances for loan, lease, and off-balance sheet unfunded credit commitment losses. |
|
The credit risk monitoring system is designed to identify impaired and potential problem loans, and to permit periodic evaluation of impairment and the adequacy level of the allowance for credit losses in a timely manner. In addition, the Board of Directors of the Bank has adopted a credit policy that includes a credit review and control system which it believes should be effective in ensuring that the Company maintains an adequate allowance for credit losses. The Board of Directors provides oversight and guidance for management’s allowance evaluation process, including quarterly valuations, and consideration of management’s determination of whether the allowance is adequate to absorb losses in the loan and lease portfolio. The determination of the amount of the allowance for loan and lease losses and the provision for loan and lease losses is based on management’s current judgment about the credit quality of the loan and lease portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for loan and lease losses. The nature of the process by which the Company determines the appropriate allowance for loan and lease losses requires the exercise of considerable judgment. Additions to the allowance for loan and lease losses are made by charges to the provision for loan and lease losses. Identified credit exposures that are determined to be uncollectible are charged against the allowance for loan and lease losses. Recoveries of previously charged off amounts, if any, are credited to the allowance for loan and lease losses. |
|
|
|
The following is a summary of activity in the allowance for loan and lease losses and ending balances of loans evaluated for impairment for the three and nine months ended September 30, 2013 and 2012, respectively: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | | Nine months ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
September 30, | September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 16,979 | | | $ | 11,448 | | | $ | 14,448 | | | $ | 12,780 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans and leases charged off | | | (211 | ) | | | (226 | ) | | | (2,145 | ) | | | (2,547 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recoveries of loans and leases previously charged off | | | 253 | | | | 126 | | | | 632 | | | | 145 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Provision for loan and lease losses | | | 2,109 | | | | 1,031 | | | | 6,195 | | | | 2,001 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 19,130 | | | $ | 12,379 | | | $ | 19,130 | | | $ | 12,379 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents the activity and balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and is based on the impairment method as of and for the three and nine months ended September 30, 2013: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Multi- | | | SBA | | | Construction | | | Lease | | | Real Estate | | | HELOC’s, | | | Unallocated | | | TOTAL | | | | | | | | | |
and | Real Estate | Family | Financing | 1-4 family | Home Equity | | | | | | | | |
Industrial | Mortgage | | | First | Loans, and | | | | | | | | |
| | | | Mortgage | Other | | | | | | | | |
| | | | | Consumer | | | | | | | | |
| | | | | Credit | | | | | | | | |
| | (In thousands) | | | | | | | | | |
Allowance for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of June 30, 2013 | | $ | 816 | | | $ | 4,508 | | | $ | 1,449 | | | $ | 179 | | | $ | 503 | | | $ | 244 | | | $ | 8,751 | | | $ | 225 | | | $ | 304 | | | $ | 16,979 | | | | | | | | | |
Charge-offs | | | — | | | | (12 | ) | | | — | | | | (199 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | (211 | ) | | | | | | | | |
Recoveries | | | — | | | | 153 | | | | — | | | | 97 | | | | — | | | | 2 | | | | 1 | | | | — | | | | — | | | | 253 | | | | | | | | | |
Provision | | | 636 | | | | 1,047 | | | | 266 | | | | 373 | | | | (194 | ) | | | 66 | | | | 12 | | | | 102 | | | | (199 | ) | | | 2,109 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2013 | | $ | 1,452 | | | $ | 5,696 | | | $ | 1,715 | | | $ | 450 | | | | 309 | | | $ | 312 | | | $ | 8,764 | | | $ | 327 | | | $ | 105 | | | $ | 19,130 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2012 | | $ | 263 | | | $ | 3,178 | | | $ | 1,478 | | | $ | 118 | | | $ | 21 | | | $ | 261 | | | $ | 8,855 | | | $ | 274 | | | $ | — | | | $ | 14,448 | | | | | | | | | |
Charge-offs | | | — | | | | (372 | ) | | | (553 | ) | | | (592 | ) | | | — | | | | (23 | ) | | | (591 | ) | | | (14 | ) | | | — | | | | (2,145 | ) | | | | | | | | |
Recoveries | | | — | | | | 173 | | | | 88 | | | | 264 | | | | — | | | | 8 | | | | 92 | | | | 7 | | | | — | | | | 632 | | | | | | | | | |
Provision | | | 1,189 | | | | 2,717 | | | | 702 | | | | 660 | | | | 288 | | | | 66 | | | | 408 | | | | 60 | | | | 105 | | | | 6,195 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2013 | | $ | 1,452 | | | $ | 5,696 | | | $ | 1,715 | | | $ | 450 | | | | 309 | | | $ | 312 | | | $ | 8,764 | | | $ | 327 | | | $ | 105 | | | $ | 19,130 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 2 | | | $ | 276 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,089 | | | $ | 32 | | | $ | — | | | $ | 1,399 | | | | | | | | | |
Collectively evaluated for impairment | | | 1,450 | | | | 5,420 | | | | 1,715 | | | | 450 | | | | 309 | | | | 312 | | | | 7,363 | | | | 295 | | | | 105 | | | | 17,419 | | | | | | | | | |
Acquired with deteriorated credit quality | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 312 | | | | — | | | | — | | | | 312 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 1,452 | | | $ | 5,696 | | | $ | 1,715 | | | $ | 450 | | | | 309 | | | $ | 312 | | | $ | 8,764 | | | $ | 327 | | | $ | 105 | | | $ | 19,130 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 70 | | | $ | 5,896 | | | $ | — | | | $ | 11 | | | $ | — | | | $ | — | | | $ | 13,202 | | | $ | 1,055 | | | $ | — | | | $ | 20,234 | | | | | | | | | |
Collectively evaluated for impairment | | | 247,079 | | | | 457,377 | | | | 130,449 | | | | 23,857 | | | | 22,838 | | | | 21,340 | | | | 1,215,788 | | | | 108,098 | | | | — | | | | 2,226,826 | | | | | | | | | |
Acquired with deteriorated credit quality | | | 3,600 | | | | 18,987 | | | | 831 | | | | 3,801 | | | | — | | | | — | | | | 321,078 | | | | 831 | | | | — | | | | 349,128 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loan balances | | $ | 250,749 | | | $ | 482,260 | | | $ | 131,280 | | | $ | 27,669 | | | | 22,838 | | | $ | 21,340 | | | $ | 1,550,068 | | | $ | 109,984 | | | $ | — | | | $ | 2,596,188 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents the activity and balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and is based on the impairment method as of and for the three and nine months ended September 30, 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Multi- | | | SBA | | | Construction | | | Lease | | | Real Estate | | | HELOC’s, | | | Unallocated | | | TOTAL | | | | | | | | | |
and | Real Estate | Family | Financing | 1-4 family | Home Equity | | | | | | | | |
Industrial | Mortgage | | | First | Loans, and | | | | | | | | |
| | | | Mortgage | Other | | | | | | | | |
| | | | | Consumer | | | | | | | | |
| | | | | Credit | | | | | | | | |
| | (In thousands) | | | | | | | | | |
Allowance for loan and lease losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of June 30, 2012 | | $ | 128 | | | $ | 3,313 | | | $ | 1,292 | | | $ | — | | | $ | — | | | $ | — | | | $ | 6,528 | | | $ | 187 | | | $ | — | | | $ | 11,448 | | | | | | | | | |
Charge-offs | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (226 | ) | | | — | | | | — | | | | (226 | ) | | | | | | | | |
Recoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 126 | | | | — | | | | — | | | | 126 | | | | | | | | | |
Provision | | | 185 | | | | 460 | | | | 181 | | | | 82 | | | | — | | | | 67 | | | | 4 | | | | 52 | | | | — | | | | 1,031 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2012 | | $ | 313 | | | $ | 3,773 | | | $ | 1,473 | | | $ | 82 | | | $ | — | | | $ | 67 | | | $ | 6,432 | | | $ | 239 | | | $ | — | | | $ | 12,379 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2011 | | $ | 128 | | | $ | 2,234 | | | $ | 1,541 | | | $ | — | | | $ | — | | | $ | — | | | $ | 8,635 | | | $ | 242 | | | $ | — | | | $ | 12,780 | | | | | | | | | |
Charge-offs | | | — | | | | (236 | ) | | | — | | | | — | | | | — | | | | — | | | | (2,304 | ) | | | (7 | ) | | | — | | | | (2,547 | ) | | | | | | | | |
Recoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 143 | | | | 2 | | | | — | | | | 145 | | | | | | | | | |
Provision | | | 185 | | | | 1,775 | | | | (68 | ) | | | 82 | | | | — | | | | 67 | | | | (42 | ) | | | 2 | | | | — | | | | 2,001 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2012 | | $ | 313 | | | $ | 3,773 | | | $ | 1,473 | | | $ | 82 | | | $ | — | | | $ | 67 | | | $ | 6,432 | | | $ | 239 | | | $ | — | | | $ | 12,379 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | — | | | $ | 478 | | | $ | 613 | | | $ | — | | | $ | — | | | $ | — | | | $ | 458 | | | $ | — | | | $ | — | | | $ | 1,549 | | | | | | | | | |
Collectively evaluated for impairment | | | 313 | | | | 3,295 | | | | 860 | | | | 82 | | | | — | | | | 67 | | | | 5,974 | | | | 239 | | | | — | | | | 10,830 | | | | | | | | | |
Acquired with deteriorated credit quality | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending allowance balance | | $ | 313 | | | $ | 3,773 | | | $ | 1,473 | | | $ | 82 | | | $ | — | | | $ | 67 | | | $ | 6,432 | | | $ | 239 | | | $ | — | | | $ | 12,379 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | — | | | $ | 3,372 | | | $ | 5,455 | | | $ | — | | | $ | — | | | $ | — | | | $ | 13,960 | | | $ | 3 | | | $ | — | | | $ | 22,790 | | | | | | | | | |
Collectively evaluated for impairment | | | 74,376 | | | | 276,350 | | | | 99,847 | | | | 43,916 | | | | 4,712 | | | | 5,031 | | | | 562,084 | | | | 21,740 | | | | — | | | | 1,088,056 | | | | | | | | | |
Acquired with deteriorated credit quality | | | 7,290 | | | | 23,156 | | | | 852 | | | | 6,817 | | | | — | | | | — | | | | 66,354 | | | | 59 | | | | — | | | | 104,528 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total ending loan balances | | $ | 81,666 | | | $ | 302,878 | | | $ | 106,154 | | | $ | 50,733 | | | $ | 4,712 | | | $ | 5,031 | | | $ | 642,398 | | | $ | 21,802 | | | $ | — | | | $ | 1,215,374 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
The following table presents loans and leases individually evaluated for impairment by class of loans and leases as of September 30, 2013 and December 31, 2012. The recorded investment represents customer balances net of any partial charge-offs recognized on the loans and leases and net of any deferred fees and costs. |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Unpaid | | | Recorded | | | Allowance | | | Unpaid | | | Recorded | | | Allowance | | | | | | | | | | | | | | | | | | | | | | | | | |
Principal | Investment | for Loan | Principal | Investment | for Loan | | | | | | | | | | | | | | | | | | | | | | | | |
Balance | | Losses | Balance | | Losses | | | | | | | | | | | | | | | | | | | | | | | | |
| | Allocated | | | Allocated | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | — | | | $ | — | | | $ | — | | | $ | 2,168 | | | $ | 1,879 | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 1,888 | | | | 1,815 | | | | — | | | | 5,748 | | | | 3,988 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | — | | | | — | | | | — | | | | 457 | | | | 30 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | — | | | | — | | | | — | | | | 8,681 | | | | 8,156 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | — | | | | — | | | | — | | | | 3 | | | | 3 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 95 | | | | 70 | | | | 2 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 5,309 | | | | 4,081 | | | | 276 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | 5,441 | | | | 5,442 | | | | 590 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 12 | | | | 11 | | | | — | | | | 439 | | | | 408 | | | | 53 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 13,684 | | | | 13,202 | | | | 1,089 | | | | 13,567 | | | | 13,622 | | | | 597 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 1,050 | | | | 1,055 | | | | 32 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 22,038 | | | $ | 20,234 | | | $ | 1,399 | | | $ | 36,504 | | | $ | 33,528 | | | $ | 1,240 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
The following table provides information on impaired loans and leases, disaggregated by class, for the three and nine months ended September 30, 2013 and 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | | Nine months ended | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Average | | | Interest | | | Cash Basis | | | Average | | | Interest | | | Cash Basis | | | | | | | | | | | | | | | | | | | | | | | | | |
Recorded | Income | Interest | Recorded | Income | Interest | | | | | | | | | | | | | | | | | | | | | | | | |
Investment | Recognized | Recognized | Investment | Recognized | Recognized | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
September 30, 2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 137 | | | $ | 8 | | | $ | 8 | | | $ | 69 | | | $ | 8 | | | $ | 8 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 6,021 | | | | 71 | | | | 79 | | | | 3,391 | | | | 94 | | | | 102 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | 1,106 | | | | 16 | | | | 18 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 11 | | | | 1 | | | | 1 | | | | 12 | | | | 1 | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 13,218 | | | | 73 | | | | 76 | | | | 12,265 | | | | 165 | | | | 169 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 1,051 | | | | — | | | | — | | | | 843 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 20,438 | | | $ | 153 | | | $ | 164 | | | $ | 17,686 | | | $ | 284 | | | $ | 298 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 1,909 | | | $ | 47 | | | $ | — | | | $ | 1,909 | | | $ | 47 | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 5,026 | | | | 55 | | | | 41 | | | | 4,828 | | | | 112 | | | | 98 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | 5,460 | | | | 82 | | | | 81 | | | | 5,471 | | | | 240 | | | | 221 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 963 | | | | 135 | | | | 135 | | | | 963 | | | | 135 | | | | 135 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 14,050 | | | | 142 | | | | 70 | | | | 14,059 | | | | 470 | | | | 250 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 2 | | | | — | | | | — | | | | 4 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 27,410 | | | $ | 461 | | | $ | 327 | | | $ | 27,234 | | | $ | 1,004 | | | $ | 704 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents information for impaired loans and leases for the three and nine months ended September 30, 2013 and 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | | Nine months ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
September 30, | September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average of individually impaired loans during the period | | $ | 20,438 | | | $ | 27,410 | | | $ | 17,686 | | | $ | 27,234 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income recognized during impairment | | | 153 | | | | 461 | | | | 284 | | | | 1,004 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash-basis interest income recognized | | | 164 | | | | 327 | | | | 298 | | | | 704 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
Nonaccrual loans and leases and loans past due 90 days still on accrual were as follows as of the dates indicated: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Traditional Loans | | | NTM Loans | | | Total | | | Traditional Loans | | | NTM Loans | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans past due over 90 days or more still on accrual | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Company maintains specific allowance allocations for these loans of $1,309 in 2013 and $1,517 in 2012 | | | 10,432 | | | | 4,976 | | | | 15,408 | | | | 11,166 | | | | 11,827 | | | | 22,993 | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Nonaccrual loans and leases consisted of the following as of the dates indicated: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Traditional Loans | | | NTM Loans | | | Total | | | Traditional Loans | | | NTM Loans | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 79 | | | $ | — | | | $ | 79 | | | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 6,114 | | | | — | | | | 6,114 | | | | 2,906 | | | | — | | | | 2,906 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-Family | | | — | | | | — | | | | — | | | | 5,442 | | | | — | | | | 5,442 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 85 | | | | — | | | | 85 | | | | 141 | | | | — | | | | 141 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 4,154 | | | | 455 | | | | 4,609 | | | | 2,676 | | | | 6,169 | | | | 8,845 | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loan (HELOC)—First Liens | | | — | | | | 3,886 | | | | 3,886 | | | | — | | | | 5,658 | | | | 5,658 | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loan (HELOC)—Second Liens | | | — | | | | 635 | | | | 635 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | — | | | | — | | | | — | | | | 1 | | | | — | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 10,432 | | | $ | 4,976 | | | $ | 15,408 | | | $ | 11,166 | | | $ | 11,827 | | | $ | 22,993 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Past Due Loans and Leases |
|
The following tables present the aging of the recorded investment in past due loans and leases as of September 30, 2013, excluding accrued interest receivable which is not considered to be material by class of loans and leases: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | | | | | | | | | | | | | | | | | | | |
| | 30 - 59 Days | | | 60 - 89 Days | | | Greater than | | | Total | | | Current | | | Total | | | Considered | | | | | | | | | | | | | | | | | | | | | |
Past Due | Past Due | 89 Days | Past Due | Gross | Current That | | | | | | | | | | | | | | | | | | | | |
| | Past Due | | Financing | Have been | | | | | | | | | | | | | | | | | | | | |
| | | | Receivables | Modified in | | | | | | | | | | | | | | | | | | | | |
| | | | | Previous Year | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | |
NTM and Traditional Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 10 | | | $ | — | | | $ | — | | | $ | 10 | | | $ | 247,139 | | | $ | 247,149 | | | $ | — | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 1,815 | | | | 248 | | | | 123 | | | | 2,186 | | | | 461,087 | | | | 463,273 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | 130,449 | | | | 130,449 | | | | — | | | | | | | | | | | | | | | | | | | | | |
SBA | | | — | | | | — | | | | — | | | | — | | | | 23,868 | | | | 23,868 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | 22,838 | | | | 22,838 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | 21,340 | | | | 21,340 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 20,541 | | | | 8,343 | | | | 13,342 | | | | 42,226 | | | | 1,186,764 | | | | 1,228,990 | | | | — | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 7 | | | | — | | | | 635 | | | | 642 | | | | 108,511 | | | | 109,153 | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 22,373 | | | $ | 8,591 | | | $ | 14,100 | | | $ | 45,064 | | | $ | 2,201,996 | | | $ | 2,247,060 | | | $ | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PCI loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 3,600 | | | $ | 3,600 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | — | | | | — | | | | 1,278 | | | | 1,278 | | | | 17,709 | | | | 18,987 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | 831 | | | | 831 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 98 | | | | — | | | | 98 | | | | 196 | | | | 3,605 | | | | 3,801 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 18,682 | | | | 6,758 | | | | 7,736 | | | | 33,176 | | | | 287,902 | | | | 321,078 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | — | | | | — | | | | 56 | | | | 56 | | | | 775 | | | | 831 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 18,780 | | | $ | 6,758 | | | $ | 9,168 | | | $ | 34,706 | | | $ | 314,422 | | | $ | 349,128 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 41,153 | | | $ | 15,349 | | | $ | 23,268 | | | $ | 79,770 | | | $ | 2,516,418 | | | $ | 2,596,188 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans | | $ | — | | | $ | 1,105 | | | $ | 3,096 | | | $ | 4,201 | | | $ | 160,625 | | | $ | 164,826 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Only | | | 1,529 | | | | 211 | | | | 735 | | | | 2,475 | | | | 189,888 | | | | 192,363 | | | | | | | | | | | | | | | | | | | | | | | | | |
Negative Amortization | | | — | | | | — | | | | 158 | | | | 158 | | | | 16,916 | | | | 17,074 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,529 | | | $ | 1,316 | | | $ | 3,989 | | | $ | 6,834 | | | $ | 367,429 | | | $ | 374,263 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
The following tables presents the aging of the recorded investment in past due loans and leases as of December 31, 2012, excluding accrued interest receivable which is not considered to be material by class of loans and leases: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | |
| | 30 - 59 Days | | | 60 - 89 Days | | | Greater than | | | Total | | | Current | | | Total | | | Considered | | | | | | | | | | | | | | | | | | | | | |
Past | Past | 89 Days | Past Due | Gross | Current That | | | | | | | | | | | | | | | | | | | | |
Due | Due | Past Due | | Financing | Have been | | | | | | | | | | | | | | | | | | | | |
| | | | Receivables | Modified in | | | | | | | | | | | | | | | | | | | | |
| | | | | Previous Year | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | |
NTM and Traditional Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 248 | | | $ | 7 | | | $ | — | | | $ | 255 | | | $ | 73,324 | | | $ | 73,579 | | | $ | 2,297 | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 257 | | | | 518 | | | | 375 | | | | 1,150 | | | | 315,913 | | | | 317,063 | | | | 2,318 | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | 114,237 | | | | 114,237 | | | | — | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 26 | | | | 110 | | | | — | | | | 136 | | | | 30,332 | | | | 30,468 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | 6,623 | | | | 6,623 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | 118 | | | | — | | | | — | | | | 118 | | | | 11,085 | | | | 11,203 | | | | — | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 3,356 | | | | 4,441 | | | | 8,747 | | | | 16,544 | | | | 557,057 | | | | 573,601 | | | | — | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 27 | | | | — | | | | 1 | | | | 28 | | | | 21,449 | | | | 21,477 | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 4,032 | | | $ | 5,076 | | | $ | 9,123 | | | $ | 18,231 | | | $ | 1,130,020 | | | $ | 1,148,251 | | | $ | 4,615 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PCI loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | — | | | $ | — | | | $ | 178 | | | $ | 178 | | | $ | 6,630 | | | $ | 6,808 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 1,080 | | | | 377 | | | | 445 | | | | 1,902 | | | | 19,935 | | | | 21,837 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | — | | | | — | | | | 845 | | | | 845 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 317 | | | | 63 | | | | 687 | | | | 1,067 | | | | 4,541 | | | | 5,608 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 1,008 | | | | 1,082 | | | | 2,080 | | | | 4,170 | | | | 60,896 | | | | 65,066 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | — | | | | — | | | | — | | | | — | | | | 56 | | | | 56 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 2,405 | | | $ | 1,522 | | | $ | 3,390 | | | $ | 7,317 | | | $ | 92,903 | | | $ | 100,220 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 6,437 | | | $ | 6,598 | | | $ | 12,513 | | | $ | 25,548 | | | $ | 1,222,923 | | | $ | 1,248,471 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans | | $ | 1,411 | | | $ | 2,495 | | | $ | 5,658 | | | $ | 9,564 | | | $ | 196,440 | | | $ | 206,004 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Only | | | 794 | | | | 58 | | | | 908 | | | | 1,760 | | | | 141,218 | | | | 142,978 | | | | | | | | | | | | | | | | | | | | | | | | | |
Negative Amortization | | | — | | | | 421 | | | | — | | | | 421 | | | | 18,841 | | | | 19,262 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 2,205 | | | $ | 2,974 | | | $ | 6,566 | | | $ | 11,745 | | | $ | 356,499 | | | $ | 368,244 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Troubled Debt Restructurings: |
|
Troubled Debt Restructurings (TDRs) of loans are defined by ASC 310-40, “Troubled Debt Restructurings by Creditors” and ASC 470-60, “Troubled Debt Restructurings by Debtors” and evaluated for impairment in accordance with ASC 310-10-35. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of a loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. |
|
|
|
For the three months ended September 30, 2013 and 2012, there were no and two modifications, respectively, through extension of maturity. |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Pre-Modification | | | Post-Modification | | | Number of | | | Pre-Modification | | | Post-Modification | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | Outstanding | Outstanding | Loans | Outstanding | Outstanding | | | | | | | | | | | | | | | | | | | | | | | | |
| Recorded | Recorded | | Recorded | Recorded | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment | Investment | | Investment | Investment | | | | | | | | | | | | | | | | | | | | | | | | |
| | | ($ in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM and Traditional loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 0 | | | $ | — | | | $ | — | | | | 1 | | | $ | 290 | | | $ | 290 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 0 | | | | — | | | | — | | | | 1 | | | | 2 | | | | 2 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 0 | | | $ | — | | | $ | — | | | | 2 | | | $ | 292 | | | $ | 292 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
For the nine months ended September 30, 2013 and 2012, there were two modifications of purchased credit impaired (PCI) loans and two modifications of traditional loans, respectively, through extension of maturity. |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended September 30, | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Pre-Modification | | | Post-Modification | | | Number of | | | Pre-Modification | | | Post-Modification | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | Outstanding | Outstanding | Loans | Outstanding | Outstanding | | | | | | | | | | | | | | | | | | | | | | | | |
| Recorded | Recorded | | Recorded | Recorded | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment | Investment | | Investment | Investment | | | | | | | | | | | | | | | | | | | | | | | | |
| | | ($ in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM and Traditional loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 0 | | | $ | — | | | $ | — | | | | 1 | | | $ | 290 | | | $ | 290 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 0 | | | | — | | | | — | | | | 1 | | | | 2 | | | | 2 | | | | | | | | | | | | | | | | | | | | | | | | | |
PCI loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 2 | | | | 435 | | | | 417 | | | | 0 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 2 | | | $ | 435 | | | $ | 417 | | | | 2 | | | $ | 292 | | | $ | 292 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table presents loans and leases by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification for the three and nine months ended September 30, 2013 and 2012, respectively: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | | Nine months ended September 30, | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | | | | | | | | | | | | | | | | |
| | Number of | | | Recorded | | | Number of | | | Recorded | | | Number of | | | Recorded | | | Number of | | | Recorded | | | | | | | | | | | | | | | | | |
Loans | Investment | Loans | Investment | Loans | Investment | Loans | Investment | | | | | | | | | | | | | | | | |
| | ($ in thousands) | | | | | | | | | | | | | | | | | |
TDRs that subsequently defaulted: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 0 | | | $ | — | | | | 1 | | | $ | 487 | | | | 0 | | | $ | — | | | | 1 | | | $ | 487 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 0 | | | $ | — | | | | 1 | | | $ | 487 | | | | 0 | | | $ | — | | | | 1 | | | $ | 487 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
Troubled debt restructured loans and leases consist of the following as of the dates indicated: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | NTM and | | | PCI loans | | | NTM and | | | PCI loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Traditional | Traditional | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | — | | | $ | 83 | | | $ | — | | | $ | 1,236 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 200 | | | | 3,522 | | | | 530 | | | | 1,355 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | — | | | | — | | | | 3,090 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 11 | | | | 707 | | | | — | | | | 423 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 7,101 | | | | — | | | | 12,047 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 1,396 | | | | 331 | | | | 1 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 8,708 | | | $ | 4,643 | | | $ | 15,668 | | | $ | 3,014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Troubled debt restructured loans, excluding purchased credit impaired loans, were $8.7 million and $15.7 million at September 30, 2013 and December 31, 2012, respectively. The Company did not have any commitments to lend to customers with outstanding loans or leases that are classified as troubled debt restructurings as of September 30, 2013 and December 31, 2012. |
|
Credit Quality Indicators: |
|
The Company categorizes loans and leases 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 performs historical loss analysis that is combined with a comprehensive loan or lease to value analysis to analyze the associated risks in the current loan and lease portfolio. The Company analyzes loans and leases individually by classifying the loans and leases as to credit risk. This analysis includes all loans and leases delinquent over 60 days and non-homogenous loans and leases such as commercial and commercial real estate loans and leases. Classification of problem single family residential loans is performed on a monthly basis while analysis of non-homogenous loans and leases is performed on a quarterly basis. The Company uses the following definitions for risk ratings: |
|
Special Mention. Loans and leases 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 lease or of the Company’s credit position at some future date. |
|
Substandard. Loans and leases 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 and leases 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/Loss. Loans and leases 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. |
|
Not-Rated. When accrual of income on a pool of PCI loans with common risk characteristics is appropriate in accordance with ASC 310-30, individual loans in those pools are not risk-rated. The credit criteria are FICO scores, loan-to-value, delinquency, and actual cash flows versus expected cash flows of the loan pools. |
|
Loans and leases not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans and leases. |
|
|
|
The following table displays the Company’s risk categories for loans and leases as of September 30, 2013: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pass | | | Special | | | Substandard | | | Doubtful | | | Not-Rated | | | TOTAL | | | | | | | | | | | | | | | | | | | | | | | | | |
Mention | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM and Traditional Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 243,960 | | | $ | 24 | | | $ | 3,165 | | | $ | — | | | $ | — | | | $ | 247,149 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 448,271 | | | | 2,475 | | | | 12,527 | | | | — | | | | — | | | | 463,273 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | 130,449 | | | | — | | | | — | | | | — | | | | — | | | | 130,449 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 23,805 | | | | — | | | | 63 | | | | — | | | | — | | | | 23,868 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 22,838 | | | | — | | | | — | | | | — | | | | — | | | | 22,838 | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | 21,340 | | | | — | | | | — | | | | — | | | | — | | | | 21,340 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 906,104 | | | | 28,960 | | | | 29,689 | | | | — | | | | 264,237 | | | | 1,228,990 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 106,459 | | | | 243 | | | | 2,451 | | | | — | | | | — | | | | 109,153 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,903,226 | | | $ | 31,702 | | | $ | 47,895 | | | $ | — | | | $ | 264,237 | | | $ | 2,247,060 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PCI loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 3,074 | | | $ | — | | | $ | 526 | | | $ | — | | | $ | — | | | $ | 3,600 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 16,216 | | | | — | | | | 2,771 | | | | — | | | | — | | | | 18,987 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | 831 | | | | — | | | | — | | | | — | | | | — | | | | 831 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 2,848 | | | | — | | | | 953 | | | | — | | | | — | | | | 3,801 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | — | | | | — | | | | 145 | | | | — | | | | 320,933 | | | | 321,078 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 831 | | | | — | | | | — | | | | — | | | | — | | | | 831 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 23,800 | | | $ | — | | | $ | 4,395 | | | $ | — | | | $ | 320,933 | | | $ | 349,128 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,927,026 | | | $ | 31,702 | | | $ | 52,290 | | | $ | — | | | $ | 585,170 | | | $ | 2,596,188 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans | | $ | 143,500 | | | $ | 15,766 | | | $ | 5,560 | | | $ | — | | | $ | — | | | $ | 164,826 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Only | | | 176,940 | | | | 1,271 | | | | 1,113 | | | | — | | | | 13,039 | | | | 192,363 | | | | | | | | | | | | | | | | | | | | | | | | | |
Negative Amortization | | | 16,507 | | | | 409 | | | | 158 | | | | — | | | | — | | | | 17,074 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 336,947 | | | $ | 17,446 | | | $ | 6,831 | | | $ | — | | | $ | 13,039 | | | $ | 374,263 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The recent loan pool purchased in the NTM and traditional loans during the third quarter of 2013 has not been risk rated as of September 30, 2013. All loans in this pool were current or less than 60 days past due as of September 30, 2013. The loan pool will be evaluated and risked rated consistent with the other single family residential loans in the fourth quarter of 2013. PCI loan pools are not risk rated. |
|
|
|
The following tables displays the Company’s risk categories for loans and leases as of December 31, 2012: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pass | | | Special | | | Substandard | | | Doubtful | | | Not-Rated | | | TOTAL | | | | | | | | | | | | | | | | | | | | | | | | | |
Mention | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM and Traditional Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 73,579 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 73,579 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 310,976 | | | | 1,618 | | | | 4,469 | | | | — | | | | — | | | | 317,063 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | 109,059 | | | | — | | | | 5,178 | | | | — | | | | — | | | | 114,237 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 30,296 | | | | 18 | | | | 154 | | | | — | | | | — | | | | 30,468 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 6,623 | | | | — | | | | — | | | | — | | | | — | | | | 6,623 | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | 11,203 | | | | — | | | | — | | | | — | | | | — | | | | 11,203 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 543,928 | | | | 11,222 | | | | 18,451 | | | | — | | | | — | | | | 573,601 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 21,071 | | | | 193 | | | | 213 | | | | — | | | | — | | | | 21,477 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,106,735 | | | $ | 13,051 | | | $ | 28,465 | | | $ | — | | | $ | — | | | $ | 1,148,251 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
PCI loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | — | | | $ | 189 | | | $ | 6,619 | | | $ | — | | | $ | — | | | $ | 6,808 | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 15,108 | | | | 1,080 | | | | 5,649 | | | | — | | | | — | | | | 21,837 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | 845 | | | | — | | | | — | | | | — | | | | — | | | | 845 | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 1,148 | | | | 1,085 | | | | 3,375 | | | | — | | | | — | | | | 5,608 | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | — | | | | — | | | | 137 | | | | — | | | | 64,929 | | | | 65,066 | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | — | | | | — | | | | 56 | | | | — | | | | — | | | | 56 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 17,101 | | | $ | 2,354 | | | $ | 15,836 | | | $ | — | | | $ | 64,929 | | | $ | 100,220 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,123,836 | | | $ | 15,405 | | | $ | 44,301 | | | $ | — | | | $ | 64,929 | | | $ | 1,248,471 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NTM Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Green Loans | | $ | 192,188 | | | $ | 7,119 | | | $ | 6,697 | | | $ | — | | | $ | — | | | $ | 206,004 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-Only | | | 135,679 | | | | 230 | | | | 7,069 | | | | — | | | | — | | | | 142,978 | | | | | | | | | | | | | | | | | | | | | | | | | |
Negative Amortization | | | 18,841 | | | | 421 | | | | — | | | | — | | | | — | | | | 19,262 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 346,708 | | | $ | 7,770 | | | $ | 13,766 | | | $ | — | | | $ | — | | | $ | 368,244 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
PCI loan pools are not risk rated. |
|
|
|
Purchased Credit Impaired Loans and Leases |
|
For the nine months ended September 30, 2013 and year ended December 31, 2012, the Company purchased loans and leases for which there was, at acquisition, evidence of deterioration of credit quality subsequent to origination and it was probable, at acquisition, that all contractually required payments would not be collected. The outstanding balance and carrying amount of those loans and leases, which are sometimes collectively referred to as “PCI loans” at September 30, 2013 and December 31, 2012 is as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Outstanding | | | Carrying | | | Outstanding | | | Carrying | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance | Amount | Balance | Amount | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 5,119 | | | $ | 3,600 | | | $ | 11,350 | | | $ | 6,808 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | 25,405 | | | | 18,987 | | | | 22,698 | | | | 21,837 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family | | | 1,188 | | | | 831 | | | | 1,208 | | | | 845 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA | | | 5,096 | | | | 3,801 | | | | 7,967 | | | | 5,608 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate 1-4 family first mortgage | | | 421,446 | | | | 321,078 | | | | 108,428 | | | | 65,066 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC’s, home equity loans, and other consumer installment credit | | | 954 | | | | 831 | | | | 110 | | | | 56 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Outstanding balance | | $ | 459,208 | | | $ | 349,128 | | | $ | 151,761 | | | $ | 100,220 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Accretable yield, or income expected to be collected for the three and nine months ended September 30, 2013 and 2012 is as follows: |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended September 30, | | | Nine months ended September 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at beginning of period | | $ | 98,239 | | | $ | 6,608 | | | $ | 32,207 | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
New loans or leases purchased | | | 59,798 | | | | 28,852 | | | | 155,416 | | | | 35,892 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretion of income | | | (4,684 | ) | | | (318 | ) | | | (12,195 | ) | | | (750 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reclassifications from (to) nonaccretable difference | | | 154 | | | | — | | | | (5,034 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Disposals | | | (5,881 | ) | | | — | | | | (22,768 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at end of period | | $ | 147,626 | | | $ | 35,142 | | | $ | 147,626 | | | $ | 35,142 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
During the nine months ended September 30, 2013, the Company completed five seasoned SFR mortgage loan pool acquisitions with unpaid principal balances and fair values of $1.02 billion and $846.6 million (excluding accrued interest paid and acquisition costs at settlement), respectively, at the respective acquisition dates. The Company determined that certain of these loans displayed evidence of credit quality deterioration since origination and it was probable, at acquisition that all contractually required payments would not be collected (2013 PCI Loans). During the three months ended September 30, 2013, the Company sold a portion of 2013 PCI loans with unpaid principal balances and carrying values of $11.1 million and $6.6 million, respectively. The total unpaid principal balances and carrying values of the 2013 PCI Loans as of September 30, 2013 were $333.7 million and $267.2 million, respectively. |