LOANS AND ALLOWANCE FOR LOAN LOSSES | 9 Months Ended |
Sep. 30, 2014 |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | ' |
LOANS AND ALLOWANCE FOR LOAN LOSSES | ' |
4 | LOANS AND ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The following table summarizes the composition of our loan portfolio as of September 30, 2014 and December 31, 2013: |
| | Covered | | | Non-covered | | | Total | | | Covered | | | Non-covered | | | Total | | | | | | | | | | | | | | | | | |
| | Loans (1) | | | Loans | | | Loans | | | Loans (1) | | | Loans | | | Loans | | | | | | | | | | | | | | | | | |
| | 30-Sep-14 | | | 31-Dec-13 | | | | | | | | | | | | | | | | | |
Loans secured by real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner-occupied | | $ | 1,363 | | | $ | 115,971 | | | $ | 117,334 | | | $ | 1,603 | | | $ | 106,225 | | | $ | 107,828 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner-occupied | | | 5,791 | | | | 182,138 | | | | 187,929 | | | | 5,829 | | | | 150,008 | | | | 155,837 | | | | | | | | | | | | | | | | | |
Secured by farmland | | | - | | | | 580 | | | | 580 | | | | 100 | | | | 508 | | | | 608 | | | | | | | | | | | | | | | | | |
Construction and land loans | | | - | | | | 53,302 | | | | 53,302 | | | | 1 | | | | 39,068 | | | | 39,069 | | | | | | | | | | | | | | | | | |
Residential 1-4 family | | | 15,358 | | | | 118,423 | | | | 133,781 | | | | 16,631 | | | | 66,482 | | | | 83,113 | | | | | | | | | | | | | | | | | |
Multi- family residential | | | 295 | | | | 22,481 | | | | 22,776 | | | | 585 | | | | 21,496 | | | | 22,081 | | | | | | | | | | | | | | | | | |
Home equity lines of credit | | | 24,341 | | | | 10,353 | | | | 34,694 | | | | 25,769 | | | | 6,431 | | | | 32,200 | | | | | | | | | | | | | | | | | |
Total real estate loans | | | 47,148 | | | | 503,248 | | | | 550,396 | | | | 50,518 | | | | 390,218 | | | | 440,736 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial loans | | | 755 | | | | 114,329 | | | | 115,084 | | | | 1,097 | | | | 104,284 | | | | 105,381 | | | | | | | | | | | | | | | | | |
Consumer loans | | | 78 | | | | 2,015 | | | | 2,093 | | | | 81 | | | | 1,308 | | | | 1,389 | | | | | | | | | | | | | | | | | |
Gross loans | | | 47,981 | | | | 619,592 | | | | 667,573 | | | | 51,696 | | | | 495,810 | | | | 547,506 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Less deferred fees on loans | | | 8 | | | | (1,747 | ) | | | (1,739 | ) | | | 5 | | | | (1,453 | ) | | | (1,448 | ) | | | | | | | | | | | | | | | | |
Loans, net of deferred fees | | $ | 47,989 | | | $ | 617,845 | | | $ | 665,834 | | | $ | 51,701 | | | $ | 494,357 | | | $ | 546,058 | | | | | | | | | | | | | | | | | |
(1) Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement. |
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Accounting policy related to the allowance for loan losses is considered a critical policy given the level of estimation, judgment, and uncertainty in the levels of the allowance required to account for the inherent probable losses in the loan portfolio and the material effect such estimation, judgment, and uncertainty can have on the consolidated financial results. |
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As part of the Greater Atlantic acquisition, the Bank and the FDIC entered into loss sharing agreements on approximately $143.4 million (contractual basis) of Greater Atlantic Bank’s assets. There are two agreements with the FDIC, one for single family loans which is a 10-year agreement expiring in December 2019, and one for non-single family (commercial) assets which is a 5-year agreement expiring in December 2014. The Bank will share in the losses on the loans and foreclosed loan collateral with the FDIC as specified in the loss sharing agreements; we refer to these assets collectively as “covered assets.” Loans that are not covered in the loss sharing agreement are referred to as “non-covered loans”. As of September 30, 2014, non-covered loans included $36.4 million of loans acquired in the HarVest acquisition and $60.9 million acquired in the PGFSB acquisition. |
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Accretable discount on the acquired covered loans, the PGFSB loans and the HarVest loans was $10.1 million and $8.9 million at September 30, 2014 and December 31, 2013 respectively. |
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Credit-impaired covered loans are those loans which presented evidence of credit deterioration at the date of acquisition and it is probable that Southern National would not collect all contractually required principal and interest payments. Generally, acquired loans that meet Southern National’s definition for nonaccrual status fell within the definition of credit-impaired covered loans. |
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Impaired loans for the covered and non-covered portfolios were as follows (in thousands): |
| | | | | | | | | | | | | |
30-Sep-14 | | Covered Loans | | | Non-covered Loans | | | Total Loans | | | | | |
| | | | | Unpaid | | | | | | | | | Unpaid | | | | | | | | | Unpaid | | | | | | | | |
| | Recorded | | | Principal | | | Related | | | Recorded | | | Principal | | | Related | | | Recorded | | | Principal | | | Related | | | | | |
| | Investment | | | Balance | | | Allowance | | | Investment (1) | | | Balance | | | Allowance | | | Investment | | | Balance | | | Allowance | | | | | |
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 753 | | | $ | 817 | | | $ | - | | | $ | 10,875 | | | $ | 10,980 | | | $ | - | | | $ | 11,628 | | | $ | 11,797 | | | $ | - | | | | | |
Commercial real estate - non-owner occupied (2) | | | 1,879 | | | | 2,141 | | | | - | | | | - | | | | - | | | | - | | | | 1,879 | | | | 2,141 | | | | - | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | 9,269 | | | | 10,078 | | | | - | | | | 9,269 | | | | 10,078 | | | | - | | | | | |
Residential 1-4 family (4) | | | 1,206 | | | | 1,420 | | | | - | | | | 45 | | | | 47 | | | | - | | | | 1,251 | | | | 1,467 | | | | - | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,838 | | | $ | 4,378 | | | $ | - | | | $ | 20,189 | | | $ | 21,105 | | | $ | - | | | $ | 24,027 | | | $ | 25,483 | | | $ | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | - | | | $ | 91 | | | $ | 191 | | | $ | 91 | | | $ | 91 | | | $ | 191 | | | $ | 91 | | | | | |
Commercial real estate - non-owner occupied (2) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
Residential 1-4 family (4) | | | - | | | | - | | | | - | | | | 6,019 | | | | 6,168 | | | | 300 | | | | 6,019 | | | | 6,168 | | | | 300 | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | - | | | $ | - | | | $ | - | | | $ | 6,110 | | | $ | 6,359 | | | $ | 391 | | | $ | 6,110 | | | $ | 6,359 | | | $ | 391 | | | | | |
Grand total | | $ | 3,838 | | | $ | 4,378 | | | $ | - | | | $ | 26,299 | | | $ | 27,464 | | | $ | 391 | | | $ | 30,137 | | | $ | 31,842 | | | $ | 391 | | | | | |
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(1) Recorded investment is after cumulative prior charge offs of $931 thousand These loans also have aggregate SBA guarantees of $3.3 million. |
(2) Includes loans secured by farmland and multi-family residential loans. |
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses. |
(4) Includes home equity lines of credit. |
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31-Dec-13 | | Covered Loans | | | Non-covered Loans | | | Total Loans | | | | | |
| | | | | | Unpaid | | | | | | | | | | | Unpaid | | | | | | | | | | | Unpaid | | | | | | | | | |
| | Recorded | | | Principal | | | Related | | | Recorded | | | Principal | | | Related | | | Recorded | | | Principal | | | Related | | | | | |
| | Investment | | | Balance | | | Allowance | | | Investment (1) | | | Balance | | | Allowance | | | Investment | | | Balance | | | Allowance | | | | | |
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 745 | | | $ | 844 | | | $ | - | | | $ | 7,476 | | | $ | 7,476 | | | $ | - | | | $ | 8,221 | | | $ | 8,320 | | | $ | - | | | | | |
Commercial real estate - non-owner occupied (2) | | | 2,145 | | | | 2,486 | | | | - | | | | 359 | | | | 449 | | | | - | | | | 2,504 | | | | 2,935 | | | | - | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | 2,107 | | | | 2,307 | | | | - | | | | 2,107 | | | | 2,307 | | | | - | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | 3,155 | | | | 3,631 | | | | - | | | | 3,155 | | | | 3,631 | | | | - | | | | | |
Residential 1-4 family (4) | | | 1,220 | | | | 1,439 | | | | - | | | | 5,358 | | | | 5,358 | | | | - | | | | 6,578 | | | | 6,797 | | | | - | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 4,110 | | | $ | 4,769 | | | $ | - | | | $ | 18,455 | | | $ | 19,221 | | | $ | - | | | $ | 22,565 | | | $ | 23,990 | | | $ | - | | | | | |
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With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | - | | | $ | 400 | | | $ | 500 | | | $ | 192 | | | $ | 400 | | | $ | 500 | | | $ | 192 | | | | | |
Commercial real estate - non-owner occupied (2) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | 1,718 | | | | 2,518 | | | | 325 | | | | 1,718 | | | | 2,518 | | | | 325 | | | | | |
Residential 1-4 family (4) | | | - | | | | - | | | | - | | | | 2,637 | | | | 2,637 | | | | 200 | | | | 2,637 | | | | 2,637 | | | | 200 | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | - | | | $ | - | | | $ | - | | | $ | 4,755 | | | $ | 5,655 | | | $ | 717 | | | $ | 4,755 | | | $ | 5,655 | | | $ | 717 | | | | | |
Grand total | | $ | 4,110 | | | $ | 4,769 | | | $ | - | | | $ | 23,210 | | | $ | 24,876 | | | $ | 717 | | | $ | 27,320 | | | $ | 29,645 | | | $ | 717 | | | | | |
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(1) Recorded investment is after cumulative prior charge offs of $1.4 million. These loans also have aggregate SBA guarantees of $2.4 million. |
(2) Includes loans secured by farmland and multi-family residential loans. |
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses. |
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The following tables present the average recorded investment and interest income for impaired loans recognized by class of loans for the three and nine months ended September 30, 2014 and 2013 (in thousands): |
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Three months ended September 30, 2014 | | Covered Loans | | | Non-covered Loans | | | Total Loans | | | | | | | | | | | | | | | | | |
| | Average | | | Interest | | | Average | | | Interest | | | Average | | | Interest | | | | | | | | | | | | | | | | | |
| | Recorded | | | Income | | | Recorded | | | Income | | | Recorded | | | Income | | | | | | | | | | | | | | | | | |
| | Investment | | | Recognized | | | Investment | | | Recognized | | | Investment | | | Recognized | | | | | | | | | | | | | | | | | |
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 756 | | | $ | 13 | | | $ | 10,903 | | | $ | 175 | | | $ | 11,659 | | | $ | 188 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 1,884 | | | | 67 | | | | - | | | | - | | | | 1,884 | | | | 67 | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | 8,563 | | | | 95 | | | | 8,563 | | | | 95 | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 1,208 | | | | 10 | | | | 15 | | | | - | | | | 1,223 | | | | 10 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,848 | | | $ | 90 | | | $ | 19,481 | | | $ | 270 | | | $ | 23,329 | | | $ | 360 | | | | | | | | | | | | | | | | | |
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With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | 95 | | | $ | 3 | | | $ | 95 | | | $ | 3 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | - | | | | - | | | | 5,811 | | | | 79 | | | | 5,811 | | | | 79 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | - | | | $ | - | | | $ | 5,906 | | | $ | 82 | | | $ | 5,906 | | | $ | 82 | | | | | | | | | | | | | | | | | |
Grand total | | $ | 3,848 | | | $ | 90 | | | $ | 25,387 | | | $ | 352 | | | $ | 29,235 | | | $ | 442 | | | | | | | | | | | | | | | | | |
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(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
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Three months ended September 30, 2013 | | Covered Loans | | | Non-covered Loans | | | Total Loans | | | | | | | | | | | | | | | | | |
| | Average | | | Interest | | | Average | | | Interest | | | Average | | | Interest | | | | | | | | | | | | | | | | | |
| | Recorded | | | Income | | | Recorded | | | Income | | | Recorded | | | Income | | | | | | | | | | | | | | | | | |
| | Investment | | | Recognized | | | Investment | | | Recognized | | | Investment | | | Recognized | | | | | | | | | | | | | | | | | |
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 135 | | | $ | 5 | | | $ | 7,564 | | | $ | 132 | | | $ | 7,699 | | | $ | 137 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 1,448 | | | | 30 | | | | 365 | | | | 9 | | | | 1,813 | | | | 39 | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | 2,241 | | | | - | | | | 2,241 | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | 44 | | | | 1 | | | | 2,408 | | | | 26 | | | | 2,452 | | | | 27 | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 1,504 | | | | 19 | | | | 2,917 | | | | 35 | | | | 4,421 | | | | 54 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,131 | | | $ | 55 | | | $ | 15,495 | | | $ | 202 | | | $ | 18,626 | | | $ | 257 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | 119 | | | $ | 4 | | | $ | 119 | | | $ | 4 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | - | | | | - | | | | 967 | | | | 17 | | | | 967 | | | | 17 | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | 1,831 | | | | - | | | | 1,831 | | | | - | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | - | | | | - | | | | 5,325 | | | | 85 | | | | 5,325 | | | | 85 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | - | | | $ | - | | | $ | 8,242 | | | $ | 106 | | | $ | 8,242 | | | $ | 106 | | | | | | | | | | | | | | | | | |
Grand total | | $ | 3,131 | | | $ | 55 | | | $ | 23,737 | | | $ | 308 | | | $ | 26,868 | | | $ | 363 | | | | | | | | | | | | | | | | | |
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(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
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Nine months ended September 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Covered Loans | | | Non-covered Loans | | | Total Loans | | | | | | | | | | | | | | | | | |
| | Average | | | Interest | | | Average | | | Interest | | | Average | | | Interest | | | | | | | | | | | | | | | | | |
| | Recorded | | | Income | | | Recorded | | | Income | | | Recorded | | | Income | | | | | | | | | | | | | | | | | |
| | Investment | | | Recognized | | | Investment | | | Recognized | | | Investment | | | Recognized | | | | | | | | | | | | | | | | | |
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 746 | | | $ | 40 | | | $ | 7,942 | | | $ | 372 | | | $ | 8,688 | | | $ | 412 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 1,889 | | | | 91 | | | | - | | | | - | | | | 1,889 | | | | 91 | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | 5,195 | | | | 137 | | | | 5,195 | | | | 137 | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 1,212 | | | | 31 | | | | 5 | | | | - | | | | 1,217 | | | | 31 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,847 | | | $ | 162 | | | $ | 13,142 | | | $ | 509 | | | $ | 16,989 | | | $ | 671 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | 106 | | | $ | 11 | | | $ | 106 | | | $ | 11 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | - | | | | - | | | | 5,598 | | | | 236 | | | | 5,598 | | | | 236 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | - | | | $ | - | | | $ | 5,704 | | | $ | 247 | | | $ | 5,704 | | | $ | 247 | | | | | | | | | | | | | | | | | |
Grand total | | $ | 3,847 | | | $ | 162 | | | $ | 18,846 | | | $ | 756 | | | $ | 22,693 | | | $ | 918 | | | | | | | | | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Covered Loans | | | Non-covered Loans | | | Total Loans | | | | | | | | | | | | | | | | | |
| | Average | | | Interest | | | Average | | | Interest | | | Average | | | Interest | | | | | | | | | | | | | | | | | |
| | Recorded | | | Income | | | Recorded | | | Income | | | Recorded | | | Income | | | | | | | | | | | | | | | | | |
| | Investment | | | Recognized | | | Investment | | | Recognized | | | Investment | | | Recognized | | | | | | | | | | | | | | | | | |
With no related allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 136 | | | $ | 14 | | | $ | 6,144 | | | $ | 308 | | | $ | 6,280 | | | $ | 322 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 1,464 | | | | 92 | | | | 373 | | | | 28 | | | | 1,837 | | | | 120 | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | 903 | | | | - | | | | 903 | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | 44 | | | | 4 | | | | 1,718 | | | | 47 | | | | 1,762 | | | | 51 | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 1,464 | | | | 53 | | | | 2,892 | | | | 101 | | | | 4,356 | | | | 154 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,108 | | | $ | 163 | | | $ | 12,030 | | | $ | 484 | | | $ | 15,138 | | | $ | 647 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
With an allowance recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | 125 | | | $ | 13 | | | $ | 125 | | | $ | 13 | | | | | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | - | | | | - | | | | 972 | | | | 50 | | | | 972 | | | | 50 | | | | | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | 1,951 | | | | - | | | | 1,951 | | | | - | | | | | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | - | | | | - | | | | 5,434 | | | | 253 | | | | 5,434 | | | | 253 | | | | | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | - | | | $ | - | | | $ | 8,482 | | | $ | 316 | | | $ | 8,482 | | | $ | 316 | | | | | | | | | | | | | | | | | |
Grand total | | $ | 3,108 | | | $ | 163 | | | $ | 20,512 | | | $ | 800 | | | $ | 23,620 | | | $ | 963 | | | | | | | | | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
|
The following tables present the aging of the recorded investment in past due loans by class of loans as of September 30, 2014 and December 31, 2013 (in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
30-Sep-14 | | 30 - 59 | | | 60 - 89 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Days | | | Days | | | 90 Days | | | Total | | | Nonaccrual | | | Loans Not | | | Total | | | | | | | | | | | | | |
| | Past Due | | | Past Due | | | or More | | | Past Due | | | Loans | | | Past Due | | | Loans | | | | | | | | | | | | | |
Covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 1,363 | | | $ | 1,363 | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 342 | | | | - | | | | - | | | | 342 | | | | - | | | | 5,744 | | | | 6,086 | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | 755 | | | | 755 | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 83 | | | | 42 | | | | - | | | | 125 | | | | 819 | | | | 38,755 | | | | 39,699 | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | 78 | | | | 78 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 425 | | | $ | 42 | | | $ | - | | | $ | 467 | | | $ | 819 | | | $ | 46,695 | | | $ | 47,981 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 978 | | | $ | 2,106 | | | $ | - | | | $ | 3,084 | | | $ | 67 | | | $ | 112,820 | | | $ | 115,971 | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 205,199 | | | | 205,199 | | | | | | | | | | | | | |
Construction and land development | | | - | | | | 717 | | | | - | | | | 717 | | | | - | | | | 52,585 | | | | 53,302 | | | | | | | | | | | | | |
Commercial loans | | | 463 | | | | 36 | | | | - | | | | 499 | | | | 3,195 | | | | 110,635 | | | | 114,329 | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 668 | | | | - | | | | - | | | | 668 | | | | 886 | | | | 127,222 | | | | 128,776 | | | | | | | | | | | | | |
Other consumer loans | | | 20 | | | | - | | | | - | | | | 20 | | | | - | | | | 1,995 | | | | 2,015 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 2,129 | | | $ | 2,859 | | | $ | - | | | $ | 4,988 | | | $ | 4,148 | | | $ | 610,456 | | | $ | 619,592 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 978 | | | $ | 2,106 | | | $ | - | | | $ | 3,084 | | | $ | 67 | | | $ | 114,183 | | | $ | 117,334 | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 342 | | | | - | | | | - | | | | 342 | | | | - | | | | 210,943 | | | | 211,285 | | | | | | | | | | | | | |
Construction and land development | | | - | | | | 717 | | | | - | | | | 717 | | | | - | | | | 52,585 | | | | 53,302 | | | | | | | | | | | | | |
Commercial loans | | | 463 | | | | 36 | | | | - | | | | 499 | | | | 3,195 | | | | 111,390 | | | | 115,084 | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 751 | | | | 42 | | | | - | | | | 793 | | | | 1,705 | | | | 165,977 | | | | 168,475 | | | | | | | | | | | | | |
Other consumer loans | | | 20 | | | | - | | | | - | | | | 20 | | | | - | | | | 2,073 | | | | 2,093 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 2,554 | | | $ | 2,901 | | | $ | - | | | $ | 5,455 | | | $ | 4,967 | | | $ | 657,151 | | | $ | 667,573 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
31-Dec-13 | | 30 - 59 | | | 60 - 89 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Days | | | Days | | | 90 Days | | | Total | | | Nonaccrual | | | Loans Not | | | Total | | | | | | | | | | | | | |
| | Past Due | | | Past Due | | | or More | | | Past Due | | | Loans | | | Past Due | | | Loans | | | | | | | | | | | | | |
Covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 1,603 | | | $ | 1,603 | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 503 | | | | - | | | | - | | | | 503 | | | | 245 | | | | 5,766 | | | | 6,514 | | | | | | | | | | | | | |
Construction and land development | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1 | | | | 1 | | | | | | | | | | | | | |
Commercial loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,097 | | | | 1,097 | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 41 | | | | - | | | | - | | | | 41 | | | | 1,377 | | | | 40,982 | | | | 42,400 | | | | | | | | | | | | | |
Other consumer loans | | | - | | | | - | | | | - | | | | - | | | | - | | | | 81 | | | | 81 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 544 | | | $ | - | | | $ | - | | | $ | 544 | | | $ | 1,622 | | | $ | 49,530 | | | $ | 51,696 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-covered loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 708 | | | $ | 283 | | | $ | - | | | $ | 991 | | | $ | - | | | $ | 105,234 | | | $ | 106,225 | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 359 | | | | - | | | | - | | | | 359 | | | | - | | | | 171,653 | | | | 172,012 | | | | | | | | | | | | | |
Construction and land development | | | 8 | | | | 3 | | | | - | | | | 11 | | | | 2,107 | | | | 36,950 | | | | 39,068 | | | | | | | | | | | | | |
Commercial loans | | | 522 | | | | 968 | | | | - | | | | 1,490 | | | | 3,070 | | | | 99,724 | | | | 104,284 | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 957 | | | | 98 | | | | - | | | | 1,055 | | | | 2,637 | | | | 69,221 | | | | 72,913 | | | | | | | | | | | | | |
Other consumer loans | | | 14 | | | | - | | | | - | | | | 14 | | | | - | | | | 1,294 | | | | 1,308 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 2,568 | | | $ | 1,352 | | | $ | - | | | $ | 3,920 | | | $ | 7,814 | | | $ | 484,076 | | | $ | 495,810 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - owner occupied | | $ | 708 | | | $ | 283 | | | $ | - | | | $ | 991 | | | $ | - | | | $ | 106,837 | | | $ | 107,828 | | | | | | | | | | | | | |
Commercial real estate - non-owner occupied (1) | | | 862 | | | | - | | | | - | | | | 862 | | | | 245 | | | | 177,419 | | | | 178,526 | | | | | | | | | | | | | |
Construction and land development | | | 8 | | | | 3 | | | | - | | | | 11 | | | | 2,107 | | | | 36,951 | | | | 39,069 | | | | | | | | | | | | | |
Commercial loans | | | 522 | | | | 968 | | | | - | | | | 1,490 | | | | 3,070 | | | | 100,821 | | | | 105,381 | | | | | | | | | | | | | |
Residential 1-4 family (2) | | | 998 | | | | 98 | | | | - | | | | 1,096 | | | | 4,014 | | | | 110,203 | | | | 115,313 | | | | | | | | | | | | | |
Other consumer loans | | | 14 | | | | - | | | | - | | | | 14 | | | | - | | | | 1,375 | | | | 1,389 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,112 | | | $ | 1,352 | | | $ | - | | | $ | 4,464 | | | $ | 9,436 | | | $ | 533,606 | | | $ | 547,506 | | | | | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
|
Non-covered nonaccrual loans include SBA guaranteed amounts totaling $3.3 million and $1.9 million at September 30, 2014 and December 31, 2013, respectively. |
|
Activity in the allowance for non-covered loan and lease losses for the three and nine months ended September 30, 2014 and 2013 is summarized below (in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate | | | Real Estate | | | Construction | | | | | | | | | Other | | | | | | | | | | | | | | | |
Non-covered loans: | | Owner | | | Non-owner | | | and Land | | | Commercial | | | 1-4 Family | | | Consumer | | | | | | | | | | | | | | | |
Three months ended September 30, 2014 | | Occupied | | | Occupied (1) | | | Development | | | Loans | | | Residential (2) | | | Loans | | | Unallocated | | | Total | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 596 | | | $ | 933 | | | $ | 1,400 | | | $ | 2,926 | | | $ | 785 | | | $ | 59 | | | $ | 616 | | | $ | 7,315 | | | | | | | | | |
Charge offs | | | (2 | ) | | | - | | | | - | | | | (1,057 | ) | | | (149 | ) | | | - | | | | - | | | | (1,209 | ) | | | | | | | | |
Recoveries | | | 2 | | | | 5 | | | | 4 | | | | 9 | | | | 2 | | | | - | | | | - | | | | 22 | | | | | | | | | |
Provision | | | 21 | | | | 16 | | | | 78 | | | | 592 | | | | 441 | | | | (6 | ) | | | (168 | ) | | | 975 | | | | | | | | | |
Ending balance | | $ | 617 | | | $ | 954 | | | $ | 1,482 | | | $ | 2,470 | | | $ | 1,079 | | | $ | 53 | | | $ | 448 | | | $ | 7,103 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 732 | | | $ | 1,090 | | | $ | 1,026 | | | $ | 2,742 | | | $ | 1,407 | | | $ | 55 | | | $ | 178 | | | $ | 7,230 | | | | | | | | | |
Charge offs | | | - | | | | - | | | | (350 | ) | | | (806 | ) | | | - | | | | (2 | ) | | | - | | | | (1,158 | ) | | | | | | | | |
Recoveries | | | 4 | | | | 87 | | | | 1 | | | | 23 | | | | 4 | | | | 1 | | | | - | | | | 120 | | | | | | | | | |
Provision | | | (33 | ) | | | (198 | ) | | | 484 | | | | 552 | | | | 49 | | | | - | | | | 346 | | | | 1,200 | | | | | | | | | |
Ending balance | | $ | 703 | | | $ | 979 | | | $ | 1,161 | | | $ | 2,511 | | | $ | 1,460 | | | $ | 54 | | | $ | 524 | | | $ | 7,392 | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate | | | Real Estate | | | Construction | | | | | | | | | | | Other | | | | | | | | | | | | | | | | | |
Non-covered loans: | | Owner | | | Non-owner | | | and Land | | | Commercial | | | 1-4 Family | | | Consumer | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2014 | | Occupied | | | Occupied (1) | | | Development | | | Loans | | | Residential | | | Loans | | | Unallocated | | | Total | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 814 | | | $ | 985 | | | $ | 1,068 | | | $ | 2,797 | | | $ | 1,302 | | | $ | 54 | | | $ | 19 | | | $ | 7,039 | | | | | | | | | |
Charge offs | | | (73 | ) | | | - | | | | - | | | | (1,905 | ) | | | (449 | ) | | | - | | | | - | | | | (2,427 | ) | | | | | | | | |
Recoveries | | | 10 | | | | 17 | | | | 4 | | | | 101 | | | | 4 | | | | 5 | | | | - | | | | 141 | | | | | | | | | |
Provision | | | (134 | ) | | | (48 | ) | | | 410 | | | | 1,477 | | | | 222 | | | | (6 | ) | | | 429 | | | | 2,350 | | | | | | | | | |
Ending balance | | $ | 617 | | | $ | 954 | | | $ | 1,482 | | | $ | 2,470 | | | $ | 1,079 | | | $ | 53 | | | $ | 448 | | | $ | 7,103 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 932 | | | $ | 1,474 | | | $ | 970 | | | $ | 2,110 | | | $ | 1,163 | | | $ | 33 | | | $ | 285 | | | $ | 6,967 | | | | | | | | | |
Charge offs | | | - | | | | (199 | ) | | | (650 | ) | | | (1,471 | ) | | | (518 | ) | | | (143 | ) | | | - | | | | (2,981 | ) | | | | | | | | |
Recoveries | | | 12 | | | | 138 | | | | 7 | | | | 97 | | | | 126 | | | | 2 | | | | - | | | | 382 | | | | | | | | | |
Provision | | | (241 | ) | | | (434 | ) | | | 834 | | | | 1,775 | | | | 689 | | | | 162 | | | | 239 | | | | 3,024 | | | | | | | | | |
Ending balance | | $ | 703 | | | $ | 979 | | | $ | 1,161 | | | $ | 2,511 | | | $ | 1,460 | | | $ | 54 | | | $ | 524 | | | $ | 7,392 | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
|
Activity in the allowance for covered loan and lease losses by class of loan for the three and nine months ended September 30, 2014 and 2013 is summarized below (in thousands). |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate | | | Real Estate | | | Construction | | | | | | | | | Other | | | | | | | | | | | | | | | |
Covered loans: | | Owner | | | Non-owner | | | and Land | | | Commercial | | | 1-4 Family | | | Consumer | | | | | | | | | | | | | | | |
Three months ended September 30, 2014 | | Occupied | | | Occupied (1) | | | Development | | | Loans | | | Residential (3) | | | Loans | | | Unallocated | | | Total | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 17 | | | $ | 4 | | | $ | - | | | $ | 21 | | | | | | | | | |
Charge offs | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Recoveries | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Adjustments (2) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Provision | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Ending balance | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 17 | | | $ | 4 | | | $ | - | | | $ | 21 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | - | | | $ | 45 | | | $ | - | | | $ | - | | | $ | - | | | $ | 21 | | | $ | - | | | $ | 66 | | | | | | | | | |
Charge offs | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Recoveries | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Adjustments (2) | | | - | | | | - | | | | - | | | | - | | | | - | | | | (12 | ) | | | - | | | | (12 | ) | | | | | | | | |
Provision | | | - | | | | - | | | | - | | | | - | | | | - | | | | (3 | ) | | | - | | | | (3 | ) | | | | | | | | |
Ending balance | | $ | - | | | $ | 45 | | | $ | - | | | $ | - | | | $ | - | | | $ | 6 | | | $ | - | | | $ | 51 | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Represents the portion of increased expected losses which is covered by the loss sharing agreement with the FDIC. |
(3) Includes home equity lines of credit. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate | | | Real Estate | | | Construction | | | | | | | | | | | Other | | | | | | | | | | | | | | | | | |
Covered loans: | | Owner | | | Non-owner | | | and Land | | | Commercial | | | 1-4 Family | | | Consumer | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2014 | | Occupied | | | Occupied (1) | | | Development | | | Loans | | | Residential (3) | | | Loans | | | Unallocated | | | Total | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | - | | | $ | 45 | | | $ | - | | | $ | - | | | $ | - | | | $ | 6 | | | $ | - | | | $ | 51 | | | | | | | | | |
Charge offs | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Recoveries | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Adjustments (2) | | | - | | | | (36 | ) | | | - | | | | - | | | | 14 | | | | (2 | ) | | | - | | | | (24 | ) | | | | | | | | |
Provision | | | - | | | | (9 | ) | | | - | | | | - | | | | 3 | | | | - | | | | - | | | | (6 | ) | | | | | | | | |
Ending balance | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 17 | | | $ | 4 | | | $ | - | | | $ | 21 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | - | | | $ | 45 | | | $ | - | | | $ | 43 | | | $ | - | | | $ | 11 | | | $ | - | | | $ | 99 | | | | | | | | | |
Charge offs | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Recoveries | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Adjustments (2) | | | - | | | | - | | | | - | | | | (35 | ) | | | - | | | | (4 | ) | | | - | | | | (39 | ) | | | | | | | | |
Provision | | | - | | | | - | | | | - | | | | (8 | ) | | | - | | | | (1 | ) | | | - | | | | (9 | ) | | | | | | | | |
Ending balance | | $ | - | | | $ | 45 | | | $ | - | | | $ | - | | | $ | - | | | $ | 6 | | | $ | - | | | $ | 51 | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Represents the portion of increased expected losses which is covered by the loss sharing agreement with the FDIC. |
(3) Includes home equity lines of credit. |
|
The following tables present the balance in the allowance for loan losses and the recorded investment in non-covered loans by portfolio segment and based on impairment method as of September 30, 2014 and December 31, 2013 (in thousands): |
|
| | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate | | | Real Estate | | | Construction | | | | | | | | | Other | | | | | | | | | | | | | | | |
| | Owner | | | Non-owner | | | and Land | | | Commercial | | | 1-4 Family | | | Consumer | | | | | | | | | | | | | | | |
Non-covered loans: | | Occupied | | | Occupied (1) | | | Development | | | Loans | | | Residential (2) | | | Loans | | | Unallocated | | | Total | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 91 | | | $ | - | | | $ | - | | | $ | - | | | $ | 300 | | | $ | - | | | $ | - | | | $ | 391 | | | | | | | | | |
Collectively evaluated for impairment | | | 526 | | | | 954 | | | | 1,482 | | | | 2,470 | | | | 779 | | | | 53 | | | | 448 | | | | 6,712 | | | | | | | | | |
Total ending allowance | | $ | 617 | | | $ | 954 | | | $ | 1,482 | | | $ | 2,470 | | | $ | 1,079 | | | $ | 53 | | | $ | 448 | | | $ | 7,103 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 10,966 | | | $ | - | | | $ | - | | | $ | 9,269 | | | $ | 6,064 | | | $ | - | | | $ | - | | | $ | 26,299 | | | | | | | | | |
Collectively evaluated for impairment | | | 105,005 | | | | 205,199 | | | | 53,302 | | | | 105,060 | | | | 122,712 | | | | 2,015 | | | | - | | | | 593,293 | | | | | | | | | |
Total ending loan balances | | $ | 115,971 | | | $ | 205,199 | | | $ | 53,302 | | | $ | 114,329 | | | $ | 128,776 | | | $ | 2,015 | | | $ | - | | | $ | 619,592 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
31-Dec-13 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 192 | | | $ | - | | | $ | - | | | $ | 325 | | | $ | 200 | | | $ | - | | | $ | - | | | $ | 717 | | | | | | | | | |
Collectively evaluated for impairment | | | 622 | | | | 985 | | | | 1,068 | | | | 2,472 | | | | 1,102 | | | | 54 | | | | 19 | | | | 6,322 | | | | | | | | | |
Total ending allowance | | $ | 814 | | | $ | 985 | | | $ | 1,068 | | | $ | 2,797 | | | $ | 1,302 | | | $ | 54 | | | $ | 19 | | | $ | 7,039 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 7,876 | | | $ | 359 | | | $ | 2,107 | | | $ | 4,873 | | | $ | 7,995 | | | $ | - | | | $ | - | | | $ | 23,210 | | | | | | | | | |
Collectively evaluated for impairment | | | 98,349 | | | | 171,653 | | | | 36,961 | | | | 99,411 | | | | 64,918 | | | | 1,308 | | | | - | | | | 472,600 | | | | | | | | | |
Total ending loan balances | | $ | 106,225 | | | $ | 172,012 | | | $ | 39,068 | | | $ | 104,284 | | | $ | 72,913 | | | $ | 1,308 | | | $ | - | | | $ | 495,810 | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
|
The following tables present the balance in the allowance for covered loan losses and the recorded investment in covered loans by portfolio segment and based on impairment method as of September 30, 2014 and December 31, 2013 (in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Real Estate | | | Real Estate | | | Construction | | | | | | | | | Other | | | | | | | | | | | | | | | |
| | Owner | | | Non-owner | | | and Land | | | Commercial | | | 1-4 Family | | | Consumer | | | | | | | | | | | | | | | |
Covered loans: | | Occupied | | | Occupied (1) | | | Development | | | Loans | | | Residential (2) | | | Loans | | | Unallocated | | | Total | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | | | | | | | |
Collectively evaluated for impairment | | | - | | | | - | | | | - | | | | - | | | | 17 | | | | 4 | | | | - | | | | 21 | | | | | | | | | |
Total ending allowance | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 17 | | | $ | 4 | | | $ | - | | | $ | 21 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 753 | | | $ | 1,879 | | | $ | - | | | $ | - | | | $ | 1,206 | | | $ | - | | | $ | - | | | $ | 3,838 | | | | | | | | | |
Collectively evaluated for impairment | | | 610 | | | | 4,207 | | | | - | | | | 755 | | | | 38,493 | | | | 78 | | | | - | | | | 44,143 | | | | | | | | | |
Total ending loan balances | | $ | 1,363 | | | $ | 6,086 | | | $ | - | | | $ | 755 | | | $ | 39,699 | | | $ | 78 | | | $ | - | | | $ | 47,981 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
31-Dec-13 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | | | | | | | |
Collectively evaluated for impairment | | | - | | | | 45 | | | | - | | | | - | | | | - | | | | 6 | | | | - | | | | 51 | | | | | | | | | |
Total ending allowance | | $ | - | | | $ | 45 | | | $ | - | | | $ | - | | | $ | - | | | $ | 6 | | | $ | - | | | $ | 51 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 745 | | | $ | 2,145 | | | $ | - | | | $ | - | | | $ | 1,220 | | | $ | - | | | $ | - | | | $ | 4,110 | | | | | | | | | |
Collectively evaluated for impairment | | | 858 | | | | 4,369 | | | | 1 | | | | 1,097 | | | | 41,180 | | | | 81 | | | | - | | | | 47,586 | | | | | | | | | |
Total ending loan balances | | $ | 1,603 | | | $ | 6,514 | | | $ | 1 | | | $ | 1,097 | | | $ | 42,400 | | | $ | 81 | | | $ | - | | | $ | 51,696 | | | | | | | | | |
|
(1) Includes loans secured by farmland and multi-family residential loans. |
(2) Includes home equity lines of credit. |
|
Troubled Debt Restructurings |
|
A modification is classified as a troubled debt restructuring (“TDR”) if both of the following exist: (1) the borrower is experiencing financial difficulty and (2) the Bank has granted a concession to the borrower that it would not otherwise consider. The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future. Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures. Concessions may include the reduction of an interest rate at a rate lower than current market rate for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when determining whether a modification is a TDR. |
|
Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, TDRs are typically modified through reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity. |
|
During the three and nine months ending September 30, 2014, there were no loans modified in troubled debt restructurings. No TDRs defaulted during the three and nine months ending September 30, 2014, which had been modified in the previous 12 months. |
|
Credit Quality Indicators |
|
Through its system of internal controls Southern National evaluates and segments loan portfolio credit quality on a quarterly basis using regulatory definitions for Special Mention, Substandard and Doubtful. Special Mention loans are considered to be criticized. Substandard and Doubtful loans are considered to be classified. Southern National had no loans classified Doubtful at September 30, 2014 or December 31, 2013. |
|
Special Mention loans are loans that have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position. |
|
Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. |
|
Doubtful loans 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. |
|
As of September 30, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
30-Sep-14 | | Covered Loans | | | Non-covered Loans | | | Total Loans | |
| | Classified/ | | | | | | | | | Special | | | | | | | | | | | | Classified/ | | | | | | | |
| | Criticized (1) | | | Pass | | | Total | | | Mention | | | Substandard (3) | | | Pass | | | Total | | | Criticized | | | Pass | | | Total | |
Commercial real estate - owner occupied | | $ | 753 | | | $ | 610 | | | $ | 1,363 | | | $ | 784 | | | $ | 10,966 | | | $ | 104,221 | | | $ | 115,971 | | | $ | 12,503 | | | $ | 104,831 | | | $ | 117,334 | |
Commercial real estate - non-owner occupied (2) | | | 1,879 | | | | 4,207 | | | | 6,086 | | | | - | | | | - | | | | 205,199 | | | | 205,199 | | | | 1,879 | | | | 209,406 | | | | 211,285 | |
Construction and land development | | | - | | | | - | | | | - | | | | 614 | | | | - | | | | 52,688 | | | | 53,302 | | | | 614 | | | | 52,688 | | | | 53,302 | |
Commercial loans | | | - | | | | 755 | | | | 755 | | | | 30 | | | | 9,269 | | | | 105,030 | | | | 114,329 | | | | 9,299 | | | | 105,785 | | | | 115,084 | |
Residential 1-4 family (4) | | | 1,206 | | | | 38,493 | | | | 39,699 | | | | 165 | | | | 6,064 | | | | 122,547 | | | | 128,776 | | | | 7,435 | | | | 161,040 | | | | 168,475 | |
Other consumer loans | | | - | | | | 78 | | | | 78 | | | | - | | | | - | | | | 2,015 | | | | 2,015 | | | | - | | | | 2,093 | | | | 2,093 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,838 | | | $ | 44,143 | | | $ | 47,981 | | | $ | 1,593 | | | $ | 26,299 | | | $ | 591,700 | | | $ | 619,592 | | | $ | 31,730 | | | $ | 635,843 | | | $ | 667,573 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
31-Dec-13 | | Covered Loans | | | Non-covered Loans | | | Total Loans | |
| | Classified/ | | | | | | | | | Special | | | | | | | | | | | | Classified/ | | | | | | | |
| | Criticized (1) | | | Pass | | | Total | | | Mention | | | Substandard (3) | | | Pass | | | Total | | | Criticized | | | Pass | | | Total | |
Commercial real estate - owner occupied | | $ | 745 | | | $ | 858 | | | $ | 1,603 | | | $ | 802 | | | $ | 7,876 | | | $ | 97,547 | | | $ | 106,225 | | | $ | 9,423 | | | $ | 98,405 | | | $ | 107,828 | |
Commercial real estate - non-owner occupied (2) | | | 2,145 | | | | 4,369 | | | | 6,514 | | | | - | | | | 359 | | | | 171,653 | | | | 172,012 | | | | 2,504 | | | | 176,022 | | | | 178,526 | |
Construction and land development | | | - | | | | 1 | | | | 1 | | | | 618 | | | | 2,107 | | | | 36,343 | | | | 39,068 | | | | 2,725 | | | | 36,344 | | | | 39,069 | |
Commercial loans | | | - | | | | 1,097 | | | | 1,097 | | | | 31 | | | | 4,873 | | | | 99,380 | | | | 104,284 | | | | 4,904 | | | | 100,477 | | | | 105,381 | |
Residential 1-4 family (4) | | | 1,220 | | | | 41,180 | | | | 42,400 | | | | 176 | | | | 7,995 | | | | 64,742 | | | | 72,913 | | | | 9,391 | | | | 105,922 | | | | 115,313 | |
Other consumer loans | | | - | | | | 81 | | | | 81 | | | | - | | | | - | | | | 1,308 | | | | 1,308 | | | | - | | | | 1,389 | | | | 1,389 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 4,110 | | | $ | 47,586 | | | $ | 51,696 | | | $ | 1,627 | | | $ | 23,210 | | | $ | 470,973 | | | $ | 495,810 | | | $ | 28,947 | | | $ | 518,559 | | | $ | 547,506 | |
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(1) Credit quality is enhanced by a loss sharing agreement with the FDIC in the covered portfolio. The same credit quality indicators used in the non-covered portfolio are combined. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(2) Includes loans secured by farmland and multi-family residential loans. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(3) Includes SBA guarantees of $3.3 million and $2.4 million as of September 30, 2014 and December 31, 2013, respectively. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(4) Includes home equity lines of credit. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |