Loans | 3 Months Ended |
Mar. 31, 2015 |
Loans [Abstract] | |
Loans | Note 6. Loans |
The following table presents the company’s composition of loans, net of capitalized origination costs and unearned income, in dollar amounts and as a percentage of total loans as of the dates stated: |
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| 31-Mar-15 | | 31-Dec-14 | | | | | |
| | Amount | | Percent of Total | | | Amount | | Percent of Total | | | | | |
Commercial and industrial | $ | 355,329 | | 46.9% | | $ | 359,243 | | 47.9% | | | | | |
Commercial real estate | | 282,528 | | 37.3% | | | 267,489 | | 35.6% | | | | | |
Residential real estate | | 40,180 | | 5.3% | | | 40,859 | | 5.4% | | | | | |
Consumer | | 11,342 | | 1.5% | | | 11,456 | | 1.5% | | | | | |
Guaranteed student loans | | 67,977 | | 9.0% | | | 71,780 | | 9.6% | | | | | |
Overdrafts | | 44 | | 0.0% | | | 46 | | 0.0% | | | | | |
Total loans | $ | 757,400 | | 100.0% | | $ | 750,873 | | 100.0% | | | | | |
Allowance for loan and lease losses | | -6,443 | | | | | -6,247 | | | | | | | |
Total loans, net of allowance | $ | 750,957 | | | | $ | 744,626 | | | | | | | |
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Loans, excluding guaranteed student loans, include unearned fees net of capitalized origination costs, of $366 thousand and $297 thousand, as of March 31, 2015 and December 31, 2014, respectively. As of March 31, 2015, $246.0 million of loans were pledged to the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank as collateral for borrowing capacity. |
As of March 31, 2015, the company had $68.0 million of guaranteed student loans including premium and acquisition costs of $1.8 million and $1.0 million, respectively, which are amortized into interest income on the effective interest method. The guaranteed student loans were originated under the Federal Family Education Loan Program (“FFELP”), authorized by the Higher Education Act of 1965, as amended. Pursuant to the FFELP, these loans are substantially guaranteed by a guarantee agency and reinsured by the U.S. Department of Education. The purchased loans were also part of the Federal Rehabilitated Loan Program (“FRLP”), under which borrowers under defaulted loans have the one-time opportunity to bring their loans current. These loans, which are then owned by an agency guarantor, are brought current and sold to approved lenders. The student loans carry an approximate 98% federal government guarantee as to the payment of principal and accrued interest. |
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The following tables present the company’s loans by regulatory risk ratings classification and by loan type as of the dates stated. As defined by the Federal Reserve and adopted by the company, “special mention” loans are defined as having potential weaknesses that deserve management’s close attention; “substandard” loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any; and “doubtful” loans have all the weaknesses inherent in substandard loans, with the added characteristic that the weaknesses make collection in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans not categorized as special mention, substandard or doubtful are classified as “pass.” The company’s risk ratings, which are assigned to loans, are embedded within these categories. |
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| 31-Mar-15 |
| Pass | | Special Mention | | Substandard | | Doubtful | | Total Loans |
Purchased credit-impaired loans: | | | | | | | | | | | | | | |
Commercial and industrial | $ | 437 | | $ | 149 | | $ | 496 | | $ | - | | $ | 1,082 |
Commercial real estate | | 3,061 | | | - | | | 2,424 | | | - | | | 5,485 |
Residential real estate | | 157 | | | - | | | 882 | | | - | | | 1,039 |
Consumer | | 148 | | | - | | | 63 | | | - | | | 211 |
Total purchased credit-impaired loans | | 3,803 | | | 149 | | | 3,865 | | | - | | | 7,817 |
Originated and other purchased loans: | | | | | | | | | | | | | | |
Commercial and industrial | | 345,257 | | | 5,389 | | | 3,601 | | | - | | | 354,247 |
Commercial real estate | | 268,001 | | | 4,812 | | | 4,230 | | | - | | | 277,043 |
Residential real estate | | 37,184 | | | 598 | | | 1,359 | | | - | | | 39,141 |
Consumer | | 10,943 | | | 42 | | | 146 | | | - | | | 11,131 |
Guaranteed student loans | | 67,977 | | | - | | | - | | | - | | | 67,977 |
Overdrafts | | 44 | | | - | | | - | | | - | | | 44 |
Total originated and other purchased loans | | 729,406 | | | 10,841 | | | 9,336 | | | - | | | 749,583 |
Total loans | $ | 733,209 | | $ | 10,990 | | $ | 13,201 | | $ | - | | $ | 757,400 |
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| 31-Dec-14 |
| Pass | | Special Mention | | Substandard | | Doubtful | | Total Loans |
Purchased credit-impaired loans: | | | | | | | | | | | | | | |
Commercial and industrial | $ | 462 | | $ | 150 | | $ | 524 | | $ | - | | $ | 1,136 |
Commercial real estate | | 3,636 | | | - | | | 2,648 | | | - | | | 6,284 |
Residential real estate | | 126 | | | 10 | | | 908 | | | - | | | 1,044 |
Consumer | | 158 | | | - | | | 56 | | | - | | | 214 |
Total purchased credit-impaired loans | | 4,382 | | | 160 | | | 4,136 | | | - | | | 8,678 |
Originated and other purchased loans: | | | | | | | | | | | | | | |
Commercial and industrial | | 347,938 | | | 6,458 | | | 3,711 | | | - | | | 358,107 |
Commercial real estate | | 254,540 | | | 2,934 | | | 3,731 | | | - | | | 261,205 |
Residential real estate | | 37,818 | | | 765 | | | 1,232 | | | - | | | 39,815 |
Consumer | | 11,065 | | | 36 | | | 141 | | | - | | | 11,242 |
Guaranteed student loans | | 71,780 | | | - | | | - | | | - | | | 71,780 |
Overdrafts | | 46 | | | - | | | - | | | - | | | 46 |
Total originated and other purchased loans | | 723,187 | | | 10,193 | | | 8,815 | | | - | | | 742,195 |
Total loans | $ | 727,569 | | $ | 10,353 | | $ | 12,951 | | $ | - | | $ | 750,873 |
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Allowance for Loan and Lease Losses |
The allowance for loan and lease losses consists of (1) a component for collective loan impairment recognized and measured pursuant to FASB ASC Topic 450, “Contingencies,” and (2) a component for individual loan impairment recognized pursuant to FASB ASC Topic 310, “Receivables.” A loan is impaired when, based on current information and events, it is probable that all amounts due (principal and interest) according to the contractual terms of the loan agreement will not be collected. |
The allowance for loan and lease losses is determined based on a periodic evaluation of the loan portfolio. This evaluation is a combination of quantitative and qualitative analysis. Quantitative factors include loss history for similar types of loans that are originated by the company. In evaluating the loan portfolio, qualitative factors, such as general economic conditions, nationally and in the company’s target markets, are considered, as well as threats of outlier events, such as the unexpected deterioration of a significant borrower. These quantitative and qualitative factors and estimates may be subject to significant change. Increases to the allowance for loan and lease losses are made by charges to the provision for loan and lease losses, which is reflected in the consolidated statements of income. Loans or portions of loans deemed to be uncollectible are charged against the allowance for loan and lease losses at the time of determination, and recoveries of previously charged-off amounts are credited to the allowance for loan and lease losses. |
The company’s allowance for loan and lease losses related to guaranteed student loans is based on historical and expected default rates for these and similar types of loans applied to the portion of carrying value in these loans that is not subject to federal guarantee. |
The following table presents the allowance for loan and lease loss activity, by loan category, for the dates stated: |
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| 31-Mar-15 | | 31-Mar-14 | | | | | | | | | |
Balance at beginning of period | $ | 6,247 | | $ | 5,305 | | | | | | | | | |
Charge-offs: | | | | | | | | | | | | | | |
Commercial and industrial | | 2 | | | - | | | | | | | | | |
Commercial real estate | | - | | | - | | | | | | | | | |
Residential real estate | | - | | | 35 | | | | | | | | | |
Consumer | | - | | | - | | | | | | | | | |
Guaranteed student loans | | 321 | | | - | | | | | | | | | |
Overdrafts | | 4 | | | 1 | | | | | | | | | |
Total charge-offs | | 327 | | | 36 | | | | | | | | | |
Recoveries: | | | | | | | | | | | | | | |
Commercial and industrial | | - | | | 1 | | | | | | | | | |
Commercial real estate | | 1 | | | - | | | | | | | | | |
Residential real estate | | - | | | - | | | | | | | | | |
Consumer | | 1 | | | - | | | | | | | | | |
Guaranteed student loans | | - | | | - | | | | | | | | | |
Overdrafts | | 2 | | | - | | | | | | | | | |
Total recoveries | | 4 | | | 1 | | | | | | | | | |
Net charge-offs | | 323 | | | 35 | | | | | | | | | |
Provision for loan and lease losses | | 565 | | | 227 | | | | | | | | | |
Amount for unfunded commitments | | - | | | -19 | | | | | | | | | |
Other (1) | | -46 | | | -64 | | | | | | | | | |
Balance at end of period | $ | 6,443 | | $ | 5,414 | | | | | | | | | |
_______________________ | | | | | | | | | | | | | | |
(1) Represents the recovery of a credit-impaired loan’s prior period allowance through accretion income. | | | | | | | | | |
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The company charges off the portion of its guaranteed student loans that are (1) not subject to federal government guarantee and (2) greater than 120 days past due and have a high probability of default. Probability of default is determined by recent loss migration analysis. Student loans greater than 120 days past due continue to accrue interest, with respect to the guaranteed portion, as interest receivable is guaranteed until a claim, if any, against the government guarantee is satisfied. |
The following tables present the allowance for loan and lease losses, with the amount independently and collectively evaluated for impairment, and loan balances, by loan type, as of the dates stated: |
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| 31-Mar-15 | | | | | | |
| | | | Individually Evaluated | | Collectively Evaluated | | | | | | |
| Total Amount | | for Impairment | | for Impairment | | | | | | |
Allowance for loan losses applicable to: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | $ | 35 | | $ | 35 | | $ | - | | | | | | |
Commercial real estate | | 160 | | | 160 | | | - | | | | | | |
Residential real estate | | 50 | | | 50 | | | - | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Total purchased credit-impaired loans | | 245 | | | 245 | | | - | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 2,001 | | | 326 | | | 1,675 | | | | | | |
Commercial real estate | | 3,988 | | | 123 | | | 3,865 | | | | | | |
Residential real estate | | 138 | | | 22 | | | 116 | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Guaranteed student loans | | 71 | | | - | | | 71 | | | | | | |
Total originated and other purchased loans | | 6,198 | | | 471 | | | 5,727 | | | | | | |
Total allowance for loan and lease losses | $ | 6,443 | | $ | 716 | | $ | 5,727 | | | | | | |
Loan balances applicable to: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | $ | 1,082 | | $ | 934 | | $ | 148 | | | | | | |
Commercial real estate | | 5,485 | | | 2,375 | | | 3,110 | | | | | | |
Residential real estate | | 1,039 | | | 552 | | | 487 | | | | | | |
Consumer | | 211 | | | - | | | 211 | | | | | | |
Total purchased credit-impaired loans | | 7,817 | | | 3,861 | | | 3,956 | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 354,247 | | | 2,229 | | | 352,018 | | | | | | |
Commercial real estate | | 277,043 | | | 3,394 | | | 273,649 | | | | | | |
Residential real estate | | 39,141 | | | 523 | | | 38,618 | | | | | | |
Consumer | | 11,175 | | | - | | | 11,175 | | | | | | |
Guaranteed student loans | | 67,977 | | | - | | | 67,977 | | | | | | |
Total originated and other purchased loans | | 749,583 | | | 6,146 | | | 743,437 | | | | | | |
Total loans | $ | 757,400 | | $ | 10,007 | | $ | 747,393 | | | | | | |
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| 31-Dec-14 | | | | | | |
| | | | Individually Evaluated | | Collectively Evaluated | | | | | | |
| Total Amount | | for Impairment | | for Impairment | | | | | | |
Allowance for loan losses applicable to: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | $ | 34 | | $ | 34 | | $ | - | | | | | | |
Commercial real estate | | 182 | | | 182 | | | - | | | | | | |
Residential real estate | | 36 | | | 36 | | | - | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Total purchased credit-impaired loans | | 252 | | | 252 | | | - | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 2,174 | | | 326 | | | 1,848 | | | | | | |
Commercial real estate | | 3,577 | | | 123 | | | 3,454 | | | | | | |
Residential real estate | | 139 | | | 22 | | | 117 | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Guaranteed student loans | | 105 | | | - | | | 105 | | | | | | |
Total originated and other purchased loans | | 5,995 | | | 471 | | | 5,524 | | | | | | |
Total allowance for loan and lease losses | $ | 6,247 | | $ | 723 | | $ | 5,524 | | | | | | |
Loan balances applicable to: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | $ | 1,136 | | $ | 989 | | $ | 147 | | | | | | |
Commercial real estate | | 6,284 | | | 3,112 | | | 3,172 | | | | | | |
Residential real estate | | 1,044 | | | 554 | | | 490 | | | | | | |
Consumer | | 214 | | | - | | | 214 | | | | | | |
Total purchased credit-impaired loans | | 8,678 | | | 4,655 | | | 4,023 | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 358,107 | | | 2,690 | | | 355,417 | | | | | | |
Commercial real estate | | 261,205 | | | 2,833 | | | 258,372 | | | | | | |
Residential real estate | | 39,815 | | | 384 | | | 39,431 | | | | | | |
Consumer | | 11,288 | | | - | | | 11,288 | | | | | | |
Guaranteed student loans | | 71,780 | | | - | | | 71,780 | | | | | | |
Total originated and other purchased loans | | 742,195 | | | 5,907 | | | 736,288 | | | | | | |
Total loans | $ | 750,873 | | $ | 10,562 | | $ | 740,311 | | | | | | |
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The following tables present the loans that were individually evaluated for impairment, by loan type, as of the dates stated. The tables present those loans with and without an allowance and various additional data, as of the dates stated: |
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| 31-Mar-15 | | | | | | |
| Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | $ | 308 | | $ | 1,411 | | $ | - | | | | | | |
Commercial real estate | | 513 | | | 738 | | | - | | | | | | |
Residential real estate | | 341 | | | 372 | | | - | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 1,065 | | | 1,087 | | | - | | | | | | |
Commercial real estate | | 3,204 | | | 3,778 | | | - | | | | | | |
Residential real estate | | 313 | | | 313 | | | - | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | | 626 | | | 621 | | | 35 | | | | | | |
Commercial real estate | | 1,862 | | | 1,980 | | | 160 | | | | | | |
Residential real estate | | 211 | | | 243 | | | 50 | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 1,164 | | | 1,164 | | | 326 | | | | | | |
Commercial real estate | | 190 | | | 197 | | | 123 | | | | | | |
Residential real estate | | 210 | | | 210 | | | 22 | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Total loans individually evaluated for impairment | $ | 10,007 | | $ | 12,114 | | $ | 716 | | | | | | |
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| 31-Dec-14 | | | | | | |
| Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | $ | 336 | | $ | 1,439 | | $ | - | | | | | | |
Commercial real estate | | 855 | | | 1,230 | | | - | | | | | | |
Residential real estate | | 181 | | | 216 | | | - | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 1,492 | | | 1,514 | | | - | | | | | | |
Commercial real estate | | 2,648 | | | 3,066 | | | - | | | | | | |
Residential real estate | | 173 | | | 173 | | | - | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | | 653 | | | 650 | | | 34 | | | | | | |
Commercial real estate | | 2,257 | | | 2,365 | | | 182 | | | | | | |
Residential real estate | | 373 | | | 405 | | | 36 | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 1,198 | | | 1,198 | | | 326 | | | | | | |
Commercial real estate | | 184 | | | 201 | | | 123 | | | | | | |
Residential real estate | | 212 | | | 212 | | | 22 | | | | | | |
Consumer | | - | | | - | | | - | | | | | | |
Total loans individually evaluated for impairment | $ | 10,562 | | $ | 12,669 | | $ | 723 | | | | | | |
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| For the Three Months Ended March 31, | | | |
| 2015 | | 2014 | | | |
| Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized | | | |
With no related allowance recorded: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | $ | 326 | | $ | - | | $ | 276 | | $ | - | | | |
Commercial real estate | | 517 | | | - | | | 1,569 | | | - | | | |
Residential real estate | | 343 | | | - | | | - | | | - | | | |
Consumer | | - | | | - | | | - | | | - | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 1,072 | | | - | | | 2,707 | | | 26 | | | |
Commercial real estate | | 3,213 | | | 23 | | | - | | | - | | | |
Residential real estate | | 313 | | | 2 | | | 311 | | | 2 | | | |
Consumer | | - | | | - | | | 8 | | | - | | | |
With an allowance recorded: | | | | | | | | | | | | | | |
Purchased credit-impaired loans | | | | | | | | | | | | | | |
Commercial and industrial | | 634 | | | 10 | | | 894 | | | 14 | | | |
Commercial real estate | | 1,862 | | | 31 | | | 2,696 | | | 38 | | | |
Residential real estate | | 211 | | | - | | | 139 | | | - | | | |
Consumer | | - | | | - | | | - | | | - | | | |
Originated and other purchased loans | | | | | | | | | | | | | | |
Commercial and industrial | | 1,181 | | | - | | | 864 | | | - | | | |
Commercial real estate | | 192 | | | - | | | - | | | - | | | |
Residential real estate | | 211 | | | - | | | 1,208 | | | - | | | |
Consumer | | - | | | - | | | - | | | - | | | |
Total loans individually evaluated for impairment | $ | 10,075 | | $ | 66 | | $ | 10,672 | | $ | 80 | | | |
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Acquired loans pursuant to a business combination are initially recorded at estimated fair value as of the date of acquisition; therefore, any related allowance for loan and lease losses is not carried over or established at acquisition. The difference between contractually required amounts receivable and the acquisition date fair value of loans that are not deemed credit-impaired at acquisition is accreted (recognized) into income over the life of the loan either on a straight-line basis or based on the underlying principal payments on the loan. Any deterioration in credit quality subsequent to acquisition for these loans is reflected in the allowance for loan and lease losses. |
Loans acquired with evidence of credit deterioration since origination and for which it is probable at the date of acquisition that all contractually required principal and interest payments will not be collected are accounted for under FASB ASC Topic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC 310-30”). A portion of the loans acquired in the VBB Acquisition and the CVB Acquisition were deemed by management to be credit-impaired loans qualifying for accounting under ASC 310-30. |
The remaining fair value adjustment on the VBB and CVB purchased credit-impaired loans, as of March 31, 2015, was $1.6 million and $619 thousand, respectively. The carrying value of the VBB and CVB purchased credit-impaired loans, as of March 31, 2015, was approximately $5.5 million and $2.3 million, respectively, which is net of any impairment charges recorded subsequent to acquisition. |
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For purchased credit-impaired loans, the excess of cash flows expected to be collected over the estimated fair value is referred to as the accretable yield and accreted into interest income over the remaining life of the loan, using the effective yield method. The difference between contractually required payments due and the cash flows expected to be collected, on an undiscounted basis, is referred to as the nonaccretable difference. |
In applying ASC 310-30 to acquired loans, the company must periodically estimate the amount and timing of cash flows expected to be collected. The estimation of the amount and timing of expected cash flows to be collected requires significant judgment, including default rates, the amount and timing of prepayments and the liquidation value and timing of underlying collateral, in addition to other factors. Decreases in expected cash flows attributable to credit will generally result in an impairment charge to earnings such that the initial accretable yield remains unchanged. Increases in expected cash flows will result in an increase in the accretable yield, which is a reclassification from the nonaccretable difference. The increased accretable yield is recognized in income over the remaining period of expected cash flows from the loan. Impairments and reversals of impairments are recorded in the provision for loan and lease losses in the consolidated statements of income and as a component of the allowance for loan and lease losses in the consolidated balance sheets. |
The following table presents accretion activity related to acquired loans as of the dates stated: |
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| 31-Mar-15 | | 31-Mar-14 | | | | | | | | | |
Balance at beginning of period | $ | 5,580 | | $ | 4,441 | | | | | | | | | |
Accretion (1) | | -483 | | | -139 | | | | | | | | | |
Other (2) | | 46 | | | 64 | | | | | | | | | |
Balance at end of period | $ | 5,143 | | $ | 4,366 | | | | | | | | | |
_______________________ | | | | | | | | | | | | | | |
(1) Accretion amounts are reported in interest income. | | | | | | | | | |
(2) Represents the recovery of a credit-impaired loan’s prior period allowance through accretion income. | | | | | | | | | |
The following tables present the age analysis of loans past due as of the dates stated: |
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| 31-Mar-15 |
| | | 30-89 days | | 90+ days | | Total | | Total |
| Current | | Past Due | | Past Due | | Past Due | | Loans |
Purchased credit-impaired loans: | | | | | | | | | | | | | | |
Commercial and industrial | $ | 586 | | $ | 250 | | $ | 246 | | $ | 496 | | $ | 1,082 |
Commercial real estate | | 5,135 | | | 171 | | | 179 | | | 350 | | | 5,485 |
Residential real estate | | 666 | | | 187 | | | 186 | | | 373 | | | 1,039 |
Consumer | | 201 | | | - | | | 10 | | | 10 | | | 211 |
Total purchased credit-impaired loans | | 6,588 | | | 608 | | | 621 | | | 1,229 | | | 7,817 |
Originated and other purchased loans: | | | | | | | | | | | | | | |
Commercial and industrial | | 353,515 | | | 24 | | | 708 | | | 732 | | | 354,247 |
Commercial real estate | | 272,262 | | | 2,961 | | | 1,820 | | | 4,781 | | | 277,043 |
Residential real estate | | 37,728 | | | 1,068 | | | 345 | | | 1,413 | | | 39,141 |
Consumer | | 10,578 | | | 525 | | | 72 | | | 597 | | | 11,175 |
Guaranteed student loans | | 45,349 | | | 6,740 | | | 15,888 | | | 22,628 | | | 67,977 |
Total originated and other purchased loans | | 719,432 | | | 11,318 | | | 18,833 | | | 30,151 | | | 749,583 |
Total loans | $ | 726,020 | | $ | 11,926 | | $ | 19,454 | | $ | 31,380 | | $ | 757,400 |
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| 31-Dec-14 |
| | | 30-89 days | | 90+ days | | Total | | Total |
| Current | | Past Due | | Past Due | | Past Due | | Loans |
Purchased credit-impaired loans: | | | | | | | | | | | | | | |
Commercial and industrial | $ | 696 | | $ | 222 | | $ | 218 | | $ | 440 | | $ | 1,136 |
Commercial real estate | | 5,567 | | | 629 | | | 88 | | | 717 | | | 6,284 |
Residential real estate | | 668 | | | 230 | | | 146 | | | 376 | | | 1,044 |
Consumer | | 203 | | | - | | | 11 | | | 11 | | | 214 |
Total purchased credit-impaired loans | | 7,134 | | | 1,081 | | | 463 | | | 1,544 | | | 8,678 |
Originated and other purchased loans: | | | | | | | | | | | | | | |
Commercial and industrial | | 356,511 | | | 873 | | | 723 | | | 1,596 | | | 358,107 |
Commercial real estate | | 258,975 | | | 1,490 | | | 740 | | | 2,230 | | | 261,205 |
Residential real estate | | 38,891 | | | 702 | | | 222 | | | 924 | | | 39,815 |
Consumer | | 11,140 | | | 113 | | | 35 | | | 148 | | | 11,288 |
Guaranteed student loans | | 46,821 | | | 12,025 | | | 12,934 | | | 24,959 | | | 71,780 |
Total originated and other purchased loans | | 712,338 | | | 15,203 | | | 14,654 | | | 29,857 | | | 742,195 |
Total loans | $ | 719,472 | | $ | 16,284 | | $ | 15,117 | | $ | 31,401 | | $ | 750,873 |
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Guaranteed student loans comprised $6.7 million of the total amounts that were past due 30-89 days and $15.9 million of the total amounts that were past due 90 days or greater as of March 31, 2015. These loans are nearly 98% guaranteed as to principal and interest. Pursuant to the guaranty, the company may make a claim for payment on a loan after a period of 270 days during which no payment has been made on the loan. |
The following table presents nonaccrual loans and other real estate owned (“OREO”) as of the dates stated. A loan is considered nonaccrual if it is 90 days or greater past due as to interest and principal or when collectability is in doubt, unless the estimated net realized value of collateral is sufficient to assure collection of principal balance and accrued interest. As of March 31, 2015, there were no loans, other than guaranteed student loans, past due 90 days or greater for which interest was accruing. Accrued interest on the guaranteed portion of student loans is subject to the guaranty and is payable under the claim, if any, to the time the claim is satisfied. |
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| 31-Mar-15 | | 31-Dec-14 | | | | | | | | | |
Purchased credit-impaired loans: | | | | | | | | | | | | | | |
Commercial and industrial | $ | 436 | | $ | 463 | | | | | | | | | |
Commercial real estate | | 2,071 | | | 2,105 | | | | | | | | | |
Residential real estate | | 951 | | | 962 | | | | | | | | | |
Consumer | | 8 | | | 8 | | | | | | | | | |
Total purchased credit-impaired loans | | 3,466 | | | 3,538 | | | | | | | | | |
Originated and other purchased loans: | | | | | | | | | | | | | | |
Commercial and industrial | | 2,351 | | | 2,311 | | | | | | | | | |
Commercial real estate | | 1,321 | | | 930 | | | | | | | | | |
Residential real estate | | 641 | | | 594 | | | | | | | | | |
Consumer | | 4 | | | 4 | | | | | | | | | |
Total originated and other purchased loans | | 4,317 | | | 3,839 | | | | | | | | | |
Total nonaccrual loans | $ | 7,783 | | $ | 7,377 | | | | | | | | | |
Other real estate owned | | 1,145 | | | 1,140 | | | | | | | | | |
Total nonperforming assets | $ | 8,928 | | $ | 8,517 | | | | | | | | | |
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In accordance with Accounting Standards Update (“ASU”) No. 2011-02, “Receivables: A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring,” the company assesses all restructurings for potential identification as troubled debt restructurings (“TDR”). A modification of a loan’s terms constitutes a TDR, if the creditor grants a concession to the borrower for economic or legal reasons related to the borrower’s financial difficulties that it would not otherwise consider. Modifications of terms for loans that are included as TDRs may involve either an increase or reduction of the interest rate, extension of the term of the loan, or deferral of principal payments, regardless of the period of the modification. |
For loans classified as TDRs, the company further evaluates the loans as performing or nonperforming. If at the time of restructure the loan is on accrual status, it will be classified as performing and will continue to be classified as performing as long as the borrower continues making payments in accordance with the restructured terms. A modified loan will be classified as nonaccrual, if the loan becomes 90 days delinquent, or when collectability is in doubt. TDRs originally considered nonaccrual will be classified as nonperforming, but may be classified as performing TDRs, if subsequent to restructure the loan experiences payment performance according to the restructured terms for a consecutive six-month period and other required conditions are met. |
The following table presents performing and nonperforming loans identified as TDRs, by loan type, as of the dates stated: |
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| 31-Mar-15 | | 31-Dec-14 | | | | | | | | | |
Performing TDRs: | | | | | | | | | | | | | | |
Commercial and industrial | $ | 2,276 | | $ | 2,735 | | | | | | | | | |
Commercial real estate | | 2,407 | | | 1,913 | | | | | | | | | |
Residential real estate | | 223 | | | 87 | | | | | | | | | |
Consumer | | - | | | - | | | | | | | | | |
Total performing TDRs | $ | 4,906 | | $ | 4,735 | | | | | | | | | |
Nonperforming TDRs: | | | | | | | | | | | | | | |
Commercial and industrial | $ | - | | $ | - | | | | | | | | | |
Commercial real estate | | - | | | 33 | | | | | | | | | |
Residential real estate | | 125 | | | 265 | | | | | | | | | |
Consumer | | - | | | - | | | | | | | | | |
Total nonperforming TDRs | $ | 125 | | $ | 298 | | | | | | | | | |
Total TDRs | $ | 5,031 | | $ | 5,033 | | | | | | | | | |
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The following tables present loans classified as TDRs, including the type of modification, number of loans and loan type, as of the dates stated: |
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| 31-Mar-15 | | | | |
| Number of Loans Modified | | Rate Modification | | Term Extension and/or Other Concessions | | Total | | | | |
Commercial and industrial | 7 | | $ | 1,123 | | $ | 1,153 | | $ | 2,276 | | | | |
Commercial real estate | 6 | | | - | | | 2,407 | | | 2,407 | | | | |
Residential real estate | 3 | | | 223 | | | 125 | | | 348 | | | | |
Consumer | - | | | - | | | - | | | - | | | | |
Total TDRs | 16 | | $ | 1,346 | | $ | 3,685 | | $ | 5,031 | | | | |
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| 31-Dec-14 | | | | |
| Number of Loans Modified | | Rate Modification | | Term Extension and/or Other Concessions | | Total | | | | |
Commercial and industrial | 8 | | $ | 1,149 | | $ | 1,586 | | $ | 2,735 | | | | |
Commercial real estate | 5 | | | - | | | 1,946 | | | 1,946 | | | | |
Residential real estate | 3 | | | 87 | | | 265 | | | 352 | | | | |
Consumer | - | | | - | | | - | | | - | | | | |
Total TDRs | 16 | | $ | 1,236 | | $ | 3,797 | | $ | 5,033 | | | | |
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During the three months ended March 31, 2015, the company identified two loans as TDRs, totaling $615 thousand, which are included in the tables above. |
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