LOANS | 9 Months Ended |
Sep. 30, 2013 |
Receivables [Abstract] | ' |
LOANS | ' |
Loans consist of the following: |
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| 30-Sep-13 | | 31-Dec-12 | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | $ | 1,048,428 | | | $ | 839,908 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Commercial and industrial loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | 373,390 | | | 245,799 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Warehouse lines of credit | 17,356 | | | 32,726 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total commercial and industrial loans | 390,746 | | | 278,525 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer real estate | 444,380 | | | 513,256 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Other consumer loans | 50,115 | | | 59,080 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total consumer | 494,495 | | | 572,336 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Gross loans held for investment | 1,933,669 | | | 1,690,769 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Net of: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred fees and discounts, net | (644 | ) | | 486 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Allowance for loan losses | (18,869 | ) | | (18,051 | ) | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loans held for investment | $ | 1,914,156 | | | $ | 1,673,204 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Loans held for sale | $ | 640,028 | | | $ | 1,060,720 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Activity in the allowance for loan losses for the three and nine months ended September 30, 2013 and 2012, segregated by portfolio segment and evaluation for impairment, was as follows. At September 30, 2013 and 2012, $239 and $75, respectively, of the allowance for loan losses individually evaluated for impairment was allocated to purchase credit impaired ("PCI") loans. |
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For the three months ended September 30, 2013 | Commercial Real Estate | | Commercial and Industrial | | Consumer Real Estate | | Other Consumer | | Total | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance - July 1, 2013 | $ | 10,610 | | | $ | 4,739 | | | $ | 3,497 | | | $ | 431 | | | $ | 19,277 | | | | | | | | | | | | | | |
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Charge-offs | (34 | ) | | (221 | ) | | — | | | (101 | ) | | (356 | ) | | | | | | | | | | | | | |
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Recoveries | — | | | 17 | | | 18 | | | 71 | | | 106 | | | | | | | | | | | | | | |
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Provision expense (benefit) | (30 | ) | | (72 | ) | | (8 | ) | | (48 | ) | | (158 | ) | | | | | | | | | | | | | |
Ending balance - September 30, 2013 | $ | 10,546 | | | $ | 4,463 | | | $ | 3,507 | | | $ | 353 | | | $ | 18,869 | | | | | | | | | | | | | | |
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For the nine months ended September 30, 2013 | Commercial Real Estate | | Commercial and Industrial | | Consumer Real Estate | | Other Consumer | | Total | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance - January 1, 2013 | $ | 11,304 | | | $ | 2,574 | | | $ | 3,555 | | | $ | 618 | | | $ | 18,051 | | | | | | | | | | | | | | |
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Charge-offs | (837 | ) | | (555 | ) | | (355 | ) | | (479 | ) | | (2,226 | ) | | | | | | | | | | | | | |
Recoveries | — | | | 115 | | | 30 | | | 316 | | | 461 | | | | | | | | | | | | | | |
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Provision expense (benefit) | 79 | | | 2,329 | | | 277 | | | (102 | ) | | 2,583 | | | | | | | | | | | | | | |
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Ending balance - September 30, 2013 | $ | 10,546 | | | $ | 4,463 | | | $ | 3,507 | | | $ | 353 | | | $ | 18,869 | | | | | | | | | | | | | | |
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Allowance ending balance: | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 1,030 | | | $ | 1,877 | | | $ | 289 | | | $ | 1 | | | $ | 3,197 | | | | | | | | | | | | | | |
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Collectively evaluated for impairment | 9,516 | | | 2,586 | | | 3,218 | | | 352 | | | 15,672 | | | | | | | | | | | | | | |
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Loans: | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | 7,770 | | | 5,979 | | | 4,404 | | | 521 | | | 18,674 | | | | | | | | | | | | | | |
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Collectively evaluated for impairment | 1,034,793 | | | 384,088 | | | 438,825 | | | 49,418 | | | 1,907,124 | | | | | | | | | | | | | | |
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PCI loans | 5,865 | | | 679 | | | 1,151 | | | 176 | | | 7,871 | | | | | | | | | | | | | | |
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Ending balance | $ | 1,048,428 | | | $ | 390,746 | | | $ | 444,380 | | | $ | 50,115 | | | $ | 1,933,669 | | | | | | | | | | | | | | |
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For the three months ended September 30, 2012 | Commercial Real Estate | | Commercial and Industrial | | Consumer Real Estate | | Other Consumer | | Total | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance - July 1, 2012 | $ | 11,918 | | | $ | 2,367 | | | $ | 4,262 | | | $ | 682 | | | $ | 19,229 | | | | | | | | | | | | | | |
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Charge-offs | (2 | ) | | (16 | ) | | (105 | ) | | (289 | ) | | (412 | ) | | | | | | | | | | | | | |
Recoveries | — | | | 47 | | | 11 | | | 146 | | | 204 | | | | | | | | | | | | | | |
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Provision expense (benefit) | 520 | | | 636 | | | (438 | ) | | 96 | | | 814 | | | | | | | | | | | | | | |
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Ending balance - September 30, 2012 | $ | 12,436 | | | $ | 3,034 | | | $ | 3,730 | | | $ | 635 | | | $ | 19,835 | | | | | | | | | | | | | | |
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For the nine months ended September 30, 2012 | Commercial Real Estate | | Commercial and Industrial | | Consumer Real Estate | | Other Consumer | | Total | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance - January 1, 2012 | $ | 10,621 | | | $ | 2,090 | | | $ | 4,070 | | | $ | 706 | | | $ | 17,487 | | | | | | | | | | | | | | |
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Charge-offs | (2 | ) | | (253 | ) | | (315 | ) | | (696 | ) | | (1,266 | ) | | | | | | | | | | | | | |
Recoveries | — | | | 82 | | | 24 | | | 352 | | | 458 | | | | | | | | | | | | | | |
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Provision expense (benefit) | 1,817 | | | 1,115 | | | (49 | ) | | 273 | | | 3,156 | | | | | | | | | | | | | | |
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Ending balance - September 30, 2012 | $ | 12,436 | | | $ | 3,034 | | | $ | 3,730 | | | $ | 635 | | | $ | 19,835 | | | | | | | | | | | | | | |
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Allowance ending balance: | | | | | | | | | | | | | | | | | | | | | | |
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Individually evaluated for impairment | $ | 2,663 | | | $ | 222 | | | $ | 1,148 | | | $ | 16 | | | $ | 4,049 | | | | | | | | | | | | | | |
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Collectively evaluated for impairment | 9,773 | | | 2,812 | | | 2,582 | | | 619 | | | 15,786 | | | | | | | | | | | | | | |
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Loans: | | | | | | | | | | | | | | | | | | | | | | |
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Individually evaluated for impairment | 19,659 | | | 4,810 | | | 7,449 | | | 339 | | | 32,257 | | | | | | | | | | | | | | |
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Collectively evaluated for impairment | 765,482 | | | 244,520 | | | 533,387 | | | 61,979 | | | 1,605,368 | | | | | | | | | | | | | | |
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PCI loans | 9,478 | | | 2,997 | | | 1,267 | | | 272 | | | 14,014 | | | | | | | | | | | | | | |
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Ending balance | $ | 794,619 | | | $ | 252,327 | | | $ | 542,103 | | | $ | 62,590 | | | $ | 1,651,639 | | | | | | | | | | | | | | |
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The allowance for loan losses and related provision expense are susceptible to change if the credit quality of our loan portfolio changes, which is evidenced by many factors, including but not limited to charge-offs and non-performing loan trends. Generally, consumer real estate lending has a lower credit risk profile compared to other consumer lending (such as automobile or personal line of credit loans). Commercial real estate and commercial and industrial lending, however, can have higher risk profiles than consumer and one- to four- family residential real estate loans due to these loans being larger in amount and non-homogeneous in structure and term. Changes in economic conditions, the mix and size of the loan portfolio, and individual borrower conditions can dramatically impact our level of allowance for loan losses in relatively short periods of time. |
The allowance for loan losses is maintained to cover losses that are estimated in accordance with U.S. generally accepted accounting principles. It is our estimate of credit losses inherent in our loan portfolio at each balance sheet date. Our methodology for analyzing the allowance for loan losses consists of general and specific components. For the general component, we stratify the loan portfolio into homogeneous groups of loans that possess similar loss potential characteristics and apply a loss ratio to these groups of loans to estimate the credit losses in the loan portfolio. We use both historical loss ratios and qualitative loss factors assigned to major loan collateral types to establish general component loss allocations. Qualitative loss factors are based on management's judgment of company, market, industry or business specific data and external economic indicators, which may not yet be reflected in the historical loss ratios, and that could impact the Company's specific loan portfolios. The Allowance for Loan Loss Committee sets and adjusts qualitative loss factors by regularly reviewing changes in underlying loan composition and the seasonality of specific portfolios. The Allowance for Loan Loss Committee also considers credit quality and trends relating to delinquency, non-performing and/or classified loans and bankruptcy within the Company's loan portfolio when evaluating qualitative loss factors. Additionally, the Allowance for Loan Loss Committee adjusts qualitative factors to account for the potential impact of external economic factors, including the unemployment rate, housing price, vacancy rates and inventory levels specific to our primary market area. |
Management evaluates current information and events regarding a borrower's ability to repay its obligations and considers a loan to be impaired when the ultimate collectability of amounts due, according to the contractual terms of the loan agreement, is in doubt. If an impaired loan is collateral-dependent, the fair value of the collateral, less the estimated cost to sell, is used to determine the amount of impairment. If an impaired loan is not collateral-dependent, the impairment amount is determined using the negative difference, if any, between the estimated discounted cash flows and the loan amount due. For impaired loans, the amount of the impairment can be adjusted, based on current data, until such time as the actual basis is established by acquisition of the collateral or until the basis is collected. Impairment losses are reflected in the allowance for loan losses through a charge to the provision for loan losses. Subsequent recoveries are credited to the allowance for loan losses. Cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreement. Cash receipts on impaired loans for which the accrual of interest has been discontinued are applied first to principal. |
For the specific component, the allowance for loan losses on individually analyzed impaired loans includes loans where management has concerns about the borrower's ability to repay. All troubled debt restructurings are considered to be impaired. Loss estimates include the negative difference, if any, between the current fair value of the collateral, or the estimated discounted cash flows, and the loan amount due. |
Impaired loans at September 30, 2013, and December 31, 2012, were as follows 1: |
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September 30, 2013 | | Unpaid | | Recorded | | Recorded | | Total Recorded Investment | | Related | | | | | | | | | | | | |
Contractual Principal | Investment With No Allowance | Investment With Allowance | Allowance | | | | | | | | | | | | |
Balance | | | | | | | | | | | | | | | |
Commercial real estate | | $ | 8,408 | | | $ | 3,738 | | | $ | 4,032 | | | $ | 7,770 | | | $ | 943 | | | | | | | | | | | | | |
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Commercial and industrial | | 7,509 | | | 556 | | | 5,423 | | | 5,979 | | | 1,787 | | | | | | | | | | | | | |
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Consumer: | | | | | | | | | | | | | | | | | | | | | | |
Consumer real estate | | 4,594 | | | 3,454 | | | 950 | | | 4,404 | | | 228 | | | | | | | | | | | | | |
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Other consumer | | 539 | | | 521 | | | — | | | 521 | | | — | | | | | | | | | | | | | |
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Total | | $ | 21,050 | | | $ | 8,269 | | | $ | 10,405 | | | $ | 18,674 | | | $ | 2,958 | | | | | | | | | | | | | |
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December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | $ | 17,768 | | | $ | 4,383 | | | $ | 12,609 | | | $ | 16,992 | | | $ | 2,756 | | | | | | | | | | | | | |
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Commercial and industrial | | 7,632 | | | 3,284 | | | 2,325 | | | 5,609 | | | 630 | | | | | | | | | | | | | |
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Consumer: | | | | | | | | | | | | | | | | | | | | | | |
Consumer real estate | | 8,672 | | | 5,291 | | | 3,198 | | | 8,489 | | | 960 | | | | | | | | | | | | | |
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Other consumer | | 338 | | | 28 | | | 301 | | | 329 | | | 23 | | | | | | | | | | | | | |
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Total | | $ | 34,410 | | | $ | 12,986 | | | $ | 18,433 | | | $ | 31,419 | | | $ | 4,369 | | | | | | | | | | | | | |
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1 Loans reported do not include PCI loans. |
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Income on impaired loans at September 30, 2013 and 2012 was as follows1: |
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September 30, 2013 | Current Quarter Average | | Year-to-Date Average | | Current Quarter Interest | | Year-to-Date Interest | | | | | | | | | | | | | | | | | |
Recorded | Recorded | Income | Income | | | | | | | | | | | | | | | | | |
Investment | Investment | Recognized | Recognized | | | | | | | | | | | | | | | | | |
Commercial real estate | $ | 8,317 | | | $ | 12,609 | | | $ | — | | | $ | 124 | | | | | | | | | | | | | | | | | | |
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Commercial and industrial | 6,023 | | | 6,252 | | | 3 | | | 9 | | | | | | | | | | | | | | | | | | |
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Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Consumer real estate | 5,694 | | | 7,609 | | | 12 | | | 45 | | | | | | | | | | | | | | | | | | |
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Other consumer | 519 | | | 444 | | | — | | | — | | | | | | | | | | | | | | | | | | |
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Total | $ | 20,553 | | | $ | 26,914 | | | $ | 15 | | | $ | 178 | | | | | | | | | | | | | | | | | | |
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September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | $ | 19,623 | | | $ | 19,242 | | | $ | 42 | | | $ | 137 | | | | | | | | | | | | | | | | | | |
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Commercial and industrial | 3,051 | | | 1,320 | | | 4 | | | 5 | | | | | | | | | | | | | | | | | | |
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Consumer: | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer real estate | 6,826 | | | 6,480 | | | 10 | | | 41 | | | | | | | | | | | | | | | | | | |
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Other consumer | 303 | | | 197 | | | — | | | — | | | | | | | | | | | | | | | | | | |
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Total | $ | 29,803 | | | $ | 27,239 | | | $ | 56 | | | $ | 183 | | | | | | | | | | | | | | | | | | |
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1 Loans reported do not include PCI loans. |
Past due status is based on the contractual terms of the loan. A loan is moved to nonaccrual status in accordance with the Company's policy, typically after 90 days of non-payment. Loans that are past due 30 days or greater are considered delinquent. Interest income on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Other consumer loans (non-mortgage) are typically charged off no later than 120 days past due. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. |
All interest accrued, but not received, for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cost recovery or cash-basis method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Loans past due over 90 days that were still accruing interest totaled $270 at September 30, 2013 and $593 at December 31, 2012, which consisted entirely of PCI loans. At September 30, 2013 and December 31, 2012, no PCI loans were considered non-performing loans. Purchased performing loans that were non-performing as of September 30, 2013 and December 31, 2012 totaled $5,116 and $5,364, respectively. Those loans included $2,368 and $3,159 at September 30, 2013 and December 31, 2012, respectively, of commercial lines of credit that did not qualify for PCI accounting due to their revolving nature. Non-performing (nonaccrual) loans were as follows: |
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| 30-Sep-13 | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | $ | 7,770 | | | $ | 13,609 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Commercial and industrial | 5,788 | | | 5,401 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer real estate | 8,237 | | | 7,931 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Other consumer | 512 | | | 262 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 22,307 | | | $ | 27,203 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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A modified loan is considered a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made by the Company that would not otherwise be considered for a borrower or collateral with similar credit risk characteristics. Modifications to loan terms may include a modification of the contractual interest rate to a below-market rate (even if the modified rate is higher than the original rate), forgiveness of accrued interest, forgiveness of a portion of principal, an extended repayment period or a deed in lieu of foreclosure or other transfer of assets other than cash to fully or partially satisfy a debt. The Company's policy is to place all TDRs on nonaccrual for a minimum period of six months. Loans qualify for return to accrual status once they have demonstrated performance with the restructured terms of the loan agreement for a minimum of six months and the collection of principal and interest under the revised terms is deemed probable. All TDRs are considered to be impaired loans. |
The outstanding balances of troubled debt restructurings ("TDRs") are shown below: |
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| 30-Sep-13 | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual TDRs(1) | $ | 10,996 | | | $ | 13,760 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Performing TDRs (2) | 985 | | | 4,216 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 11,981 | | | $ | 17,976 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Specific reserves on TDRs | $ | 1,231 | | | $ | 2,643 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Outstanding commitments to lend additional funds to borrowers with TDR loans | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
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1 Nonaccrual TDR loans are included in the nonaccrual loan totals. |
2 Performing TDR loans are loans that have been performing under the restructured terms for at least six months and the Company is accruing interest on these loans. |
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The following tables provide the recorded balances of loans modified as a TDR during the three and nine months ended September 30, 2013 and 2012. |
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| | Three Months Ended September 30, 2013 | | Nine Months Ended September 30, 2013 |
| | Principal Deferrals | | Combination of Rate Reduction and Principal Deferral | | Other | | Total | | Principal Deferrals | | Combination of Rate Reduction and Principal Deferral | | Other | | Total |
Commercial real estate | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 61 | | | $ | — | | | $ | — | | | $ | 61 | |
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Commercial and industrial | | 159 | | | 45 | | | 3 | | | 207 | | | 166 | | | 74 | | | 3 | | | 243 | |
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Consumer real estate | | — | | | 116 | | | 250 | | | 366 | | | — | | | 234 | | | 506 | | | 740 | |
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Other consumer | | 108 | | | 98 | | | — | | | 206 | | | 222 | | | 171 | | | 2 | | | 395 | |
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Total | | $ | 267 | | | $ | 259 | | | $ | 253 | | | $ | 779 | | | $ | 449 | | | $ | 479 | | | $ | 511 | | | $ | 1,439 | |
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| | Three Months Ended September 30, 2012 | | Nine months ended September 30, 2012 |
| | Principal Deferrals | | Combination of Rate Reduction and Principal Deferral | | Other | | Total | | Principal Deferrals | | Combination of Rate Reduction and Principal Deferral | | Other | | Total |
Commercial and industrial | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 26 | | | $ | — | | | $ | 49 | | | $ | 75 | |
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Consumer real estate | | — | | | 261 | | | 800 | | | 1,061 | | | 218 | | | 633 | | | 1,049 | | | 1,900 | |
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Other consumer | | 30 | | | 4 | | | — | | | 34 | | | 30 | | | 4 | | | — | | | 34 | |
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Total | | $ | 30 | | | $ | 265 | | | $ | 800 | | | $ | 1,095 | | | $ | 274 | | | $ | 637 | | | $ | 1,098 | | | $ | 2,009 | |
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TDRs modified within the last twelve months which experienced a subsequent default during the three and nine months ended September 30, 2013 were $225 and $579 in consumer real estate loans. For the three and nine months ended September 30, 2012, there were $1,026 in consumer real estate loans modified within the last twelve months that experienced a subsequent payment default. A payment default is defined as a loan that was 90 days or more past due. |
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Below is an analysis of the age of recorded investment in loans that were past due at September 30, 2013 and December 31, 2012. |
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September 30, 2013 | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days and Greater Past Due | | Total Loans Past Due | | Current Loans 1 | | Total Loans | | | | | | | | | |
Commercial real estate | $ | 1,945 | | | $ | — | | | $ | 57 | | | $ | 2,002 | | | $ | 1,046,426 | | | $ | 1,048,428 | | | | | | | | | | |
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Commercial and industrial | 3,822 | | | 86 | | | 3,551 | | | 7,459 | | | 383,287 | | | 390,746 | | | | | | | | | | |
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Consumer loans: | | | | | | | | | | | | | | | | | | | | |
Consumer real estate | 447 | | | 3,379 | | | 3,463 | | | 7,289 | | | 437,091 | | | 444,380 | | | | | | | | | | |
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Other consumer | 252 | | | 61 | | | 30 | | | 343 | | | 49,772 | | | 50,115 | | | | | | | | | | |
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Total | $ | 6,466 | | | $ | 3,526 | | | $ | 7,101 | | | $ | 17,093 | | | $ | 1,916,576 | | | $ | 1,933,669 | | | | | | | | | | |
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December 31, 2012 | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days and Greater Past Due | | Total Loans Past Due | | Current Loans 1 | | Total Loans | | | | | | | | | |
Commercial real estate | $ | 2,243 | | | $ | 1,182 | | | $ | 1,128 | | | $ | 4,553 | | | $ | 835,355 | | | $ | 839,908 | | | | | | | | | | |
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Commercial and industrial | 2,066 | | | 530 | | | 2,867 | | | 5,463 | | | 273,062 | | | 278,525 | | | | | | | | | | |
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Consumer loans: | | | | | | | | | | | | | | | | | | | | |
Consumer real estate | 8,145 | | | 1,974 | | | 4,469 | | | 14,588 | | | 498,668 | | | 513,256 | | | | | | | | | | |
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Other consumer | 563 | | | 151 | | | 49 | | | 763 | | | 58,317 | | | 59,080 | | | | | | | | | | |
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Total | $ | 13,017 | | | $ | 3,837 | | | $ | 8,513 | | | $ | 25,367 | | | $ | 1,665,402 | | | $ | 1,690,769 | | | | | | | | | | |
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1 Includes acquired PCI loans with a total carrying value of $7,531 and $11,206 at September 30, 2013 and December 31, 2012, respectively. |
For loans collateralized by real property and commercial and industrial loans, credit exposure is monitored by internally assigned grades used for classification of loans and other assets. A loan is considered “special mention” if it is currently performing and does not meet the criteria for impairment, but where some concern exists and additional monitoring is warranted. A loan is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. “Substandard” loans include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected, and the loan may or may not meet the criteria for impairment. Loans classified as “doubtful” have all of the weaknesses of those classified as “substandard”, with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” All other loans that do not fall into the above mentioned categories are considered “pass” loans. Updates to internally assigned grades are made monthly and/or upon significant developments. |
For consumer loans, credit exposure is monitored by payment history of the loans. Non-performing consumer loans are on nonaccrual and are generally greater than 90 days past due. |
The recorded investment in loans by credit quality indicators at September 30, 2013 and December 31, 2012, was as follows. |
Real Estate and Commercial and Industrial Credit Exposure |
Credit Risk Profile by Internally Assigned Grade |
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September 30, 2013 | Commercial Real Estate | | Commercial and Industrial | | Consumer Real Estate | | | | | | | | | | | | | | | | | | | | | |
Grade: 1 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pass | $ | 1,010,196 | | | $ | 372,942 | | | $ | 427,359 | | | | | | | | | | | | | | | | | | | | | | |
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Special Mention | 17,003 | | | 2,153 | | | 3,740 | | | | | | | | | | | | | | | | | | | | | | |
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Substandard | 20,369 | | | 15,651 | | | 8,727 | | | | | | | | | | | | | | | | | | | | | | |
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Doubtful | 860 | | | — | | | 4,554 | | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 1,048,428 | | | $ | 390,746 | | | $ | 444,380 | | | | | | | | | | | | | | | | | | | | | | |
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December 31, 2012 | Commercial Real Estate | | Commercial and Industrial | | Consumer Real Estate | | | | | | | | | | | | | | | | | | | | | |
Grade: 1 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pass | $ | 793,507 | | | $ | 264,528 | | | $ | 497,747 | | | | | | | | | | | | | | | | | | | | | | |
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Special Mention | 17,504 | | | 645 | | | 2,617 | | | | | | | | | | | | | | | | | | | | | | |
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Substandard | 27,669 | | | 13,227 | | | 8,942 | | | | | | | | | | | | | | | | | | | | | | |
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Doubtful | 1,228 | | | 125 | | | 3,950 | | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 839,908 | | | $ | 278,525 | | | $ | 513,256 | | | | | | | | | | | | | | | | | | | | | | |
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1 PCI loans are included in the substandard or doubtful categories. These categories are consistent with "substandard" categories as defined by regulatory authorities. |
Consumer Other Credit Exposure |
Credit Risk Profile Based on Payment Activity |
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| September 30, 2013 | | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | $ | 49,603 | | | $ | 58,818 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Non-performing | 512 | | | 262 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 50,115 | | | $ | 59,080 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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