Loans Receivable and Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2013 |
Receivables [Abstract] | ' |
Loans Receivable and Allowance for Loan Losses | ' |
NOTE 7 — LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES |
Loans receivable excludes loans held for sale, largely mortgage warehouse loans, of $917,939 and $1,439,889 as of September 30, 2013 and December 31, 2012, respectively. |
The composition of net loans receivable was as follows: |
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| | September 30, | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | $ | 22,192 | | | $ | 27,792 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 29,623 | | | | 44,901 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 6,826 | | | | 11,153 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 19,233 | | | | 19,952 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Manufactured housing | | | 3,381 | | | | 3,728 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans receivable covered under FDIC loss sharing agreements (1) | | | 81,255 | | | | 107,526 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 34,674 | | | | 28,897 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 1,490,930 | | | | 835,488 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 213,794 | | | | 75,118 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage warehouse | | | 1,006 | | | | 9,565 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Manufactured housing | | | 142,677 | | | | 154,703 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 133,503 | | | | 109,430 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 1,889 | | | | 2,061 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans receivable not covered under FDIC loss sharing agreements | | | 2,018,473 | | | | 1,215,262 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans receivable (2) | | | 2,099,728 | | | | 1,322,788 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred (fees) costs, net | | | 59 | | | | 1,679 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | (26,800 | ) | | | (25,837 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Loans receivable, net | | $ | 2,072,987 | | | $ | 1,298,630 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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-1 | Loans that were acquired in two FDIC-assisted transactions and are covered under loss sharing agreements with the FDIC are referred to as “covered” loans throughout these financial statements. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-2 | Customers Bank takes advantage of Federal Home Loan Bank (“FHLB”) programs for overnight and term borrowings. Under the terms of a blanket collateral agreement, advances from the FHLB are collateralized by qualifying first-mortgage loans. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Non-Covered Nonaccrual Loans and Loans Past Due |
The following tables summarize non-covered loans, by class: |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | | | | | | | |
| | 30-89 Days | | | Greater | | | Total Past | | | Non- | | | Current (2) | | | PCI | | | Total | | | | | | | | | |
Past Due (1) | Than | Due (1) | Accrual | Loans (5) | Loans (4) | | | | | | | | |
| 90 Days (1) | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | |
Commercial and industrial | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 221 | | | $ | 211,404 | | | $ | 2,169 | | | $ | 213,794 | | | | | | | | | |
Commercial real estate | | | 0 | | | | 0 | | | | 0 | | | | 10,625 | | | | 1,442,061 | | | | 38,244 | | | | 1,490,930 | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 2,050 | | | | 31,683 | | | | 941 | | | | 34,674 | | | | | | | | | |
Residential real estate | | | 400 | | | | 0 | | | | 400 | | | | 945 | | | | 121,550 | | | | 10,608 | | | | 133,503 | | | | | | | | | |
Consumer | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 1,469 | | | | 420 | | | | 1,889 | | | | | | | | | |
Mortgage warehouse | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 1,006 | | | | 0 | | | | 1,006 | | | | | | | | | |
Manufactured housing (3) | | | 6,311 | | | | 3,095 | | | | 9,406 | | | | 1,101 | | | | 126,981 | | | | 5,189 | | | | 142,677 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 6,711 | | | $ | 3,095 | | | $ | 9,806 | | | $ | 14,942 | | | $ | 1,936,154 | | | $ | 57,571 | | | $ | 2,018,473 | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2012 | | | | | | | | | |
| | 30-89 Days | | | Greater | | | Total Past | | | Non- | | | Current (2) | | | PCI | | | Total | | | | | | | | | |
Past Due (1) | Than | Due (1) | Accrual | Loans (5) | Loans (4) | | | | | | | | |
| 90 Days (1) | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | |
Commercial and industrial | | $ | 38 | | | $ | 0 | | | $ | 38 | | | $ | 288 | | | $ | 72,715 | | | $ | 2,077 | | | $ | 75,118 | | | | | | | | | |
Commercial real estate | | | 1,437 | | | | 0 | | | | 1,437 | | | | 17,770 | | | | 770,508 | | | | 45,773 | | | | 835,488 | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 2,423 | | | | 25,022 | | | | 1,452 | | | | 28,897 | | | | | | | | | |
Residential real estate | | | 381 | | | | 0 | | | | 381 | | | | 1,669 | | | | 95,396 | | | | 11,984 | | | | 109,430 | | | | | | | | | |
Consumer | | | 0 | | | | 0 | | | | 0 | | | | 56 | | | | 1,486 | | | | 519 | | | | 2,061 | | | | | | | | | |
Mortgage warehouse | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 9,565 | | | | 0 | | | | 9,565 | | | | | | | | | |
Manufactured housing (3) | | | 9,234 | | | | 1,966 | | | | 11,200 | | | | 141 | | | | 135,924 | | | | 7,438 | | | | 154,703 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 11,090 | | | $ | 1,966 | | | $ | 13,056 | | | $ | 22,347 | | | $ | 1,110,616 | | | $ | 69,243 | | | $ | 1,215,262 | | | | | | | | | |
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-1 | Loan balances do not include non-accrual loans. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-2 | Loans where payments are due within 29 days of the scheduled payment date. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-3 | Purchased manufactured housing loans, purchased in 2010, are subject to cash reserves held at the Bank that are used to fund the past-due payments when the loan becomes 90-days or more delinquent. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-4 | Loans exclude deferred costs and fees. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-5 | Purchased-credit-impaired loans that were aggregated into pools are accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past due status of the pools, or that of the individual loans within the pools, is not meaningful. Because we recognize interest income on each pool of loans, they are all considered to be performing. PCI loans that are not in pools accrete interest when the timing and amount of their expected cash flows are reasonably estimable, and being reported as performing loans. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Covered Nonaccrual Loans and Loans Past Due |
The following tables summarize covered loans, by class: |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | | | | | | | |
| | 30-89 Days | | | Greater Than | | | Total Past | | | Non- | | | Current | | | PCI | | | Total | | | | | | | | | |
Past Due (1) | 90 Days | Due (1) | Accrual | (2)(3) | Loans (5) | Loans (4) | | | | | | | | |
| Past Due (1) | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | |
Commercial and industrial | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 4,394 | | | $ | 2,432 | | | $ | 6,826 | | | | | | | | | |
Commercial real estate | | | 0 | | | | 0 | | | | 0 | | | | 1,821 | | | | 17,413 | | | | 10,389 | | | | 29,623 | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 3,382 | | | | 5,920 | | | | 12,890 | | | | 22,192 | | | | | | | | | |
Residential real estate | | | 0 | | | | 0 | | | | 0 | | | | 564 | | | | 14,328 | | | | 4,341 | | | | 19,233 | | | | | | | | | |
Manufactured housing | | | 86 | | | | 0 | | | | 86 | | | | 21 | | | | 3,138 | | | | 136 | | | | 3,381 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 86 | | | $ | 0 | | | $ | 86 | | | $ | 5,788 | | | $ | 45,193 | | | $ | 30,188 | | | $ | 81,255 | | | | | | | | | |
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| | December 31, 2012 | | | | | | | | | |
| | 30-89 Days | | | Greater Than | | | Total Past | | | Non- | | | Current | | | PCI | | | Total | | | | | | | | | |
Past Due (1) | 90 Days | Due (1) | Accrual | (2)(3) | Loans (5) | Loans (4) | | | | | | | | |
| Past Due (1) | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | |
Commercial and industrial | | $ | 220 | | | $ | 0 | | | $ | 220 | | | $ | 100 | | | $ | 8,404 | | | $ | 2,429 | | | $ | 11,153 | | | | | | | | | |
Commercial real estate | | | 0 | | | | 0 | | | | 0 | | | | 3,712 | | | | 20,859 | | | | 20,330 | | | | 44,901 | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 5,244 | | | | 6,472 | | | | 16,076 | | | | 27,792 | | | | | | | | | |
Residential real estate | | | 0 | | | | 0 | | | | 0 | | | | 1,358 | | | | 14,226 | | | | 4,368 | | | | 19,952 | | | | | | | | | |
Manufactured housing | | | 48 | | | | 0 | | | | 48 | | | | 90 | | | | 3,527 | | | | 63 | | | | 3,728 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 268 | | | $ | 0 | | | $ | 268 | | | $ | 10,504 | | | $ | 53,488 | | | $ | 43,266 | | | $ | 107,526 | | | | | | | | | |
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-1 | Loans balances do not include nonaccrual loans. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-2 | Loans receivable that were not identified upon acquisition as a loan with credit deterioration. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-3 | Loans where payments are due within 29 days of the scheduled payment date. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-4 | Loans exclude deferred costs and fees. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-5 | Purchased-credit-impaired loans that were aggregated into pools are accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past due status of the pools, or that of the individual loans within the pools, is not meaningful. Because we recognize interest income on each pool of loans, they are all considered to be performing. PCI loans that are not in pools accrete interest when the timing and amount of their expected cash flows are reasonably estimable, and being reported as performing loans. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Impaired Loans — Covered and Non-Covered |
The following table presents a summary of impaired loans: |
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| | September 30, 2013 | | | For the Nine Months Ended | | | | | | | | | | | | | | | | | |
September 30, 2013 | | | | | | | | | | | | | | | | |
| | Recorded | | | Unpaid | | | Related | | | Average | | | Interest | | | | | | | | | | | | | | | | | |
Investment | Principal | Allowance | Recorded | Income | | | | | | | | | | | | | | | | |
Net of | Balance | | Investment | Recognized | | | | | | | | | | | | | | | | |
Charge Offs | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 16,829 | | | $ | 16,891 | | | | | | | $ | 6,697 | | | $ | 362 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 16,223 | | | | 17,075 | | | | | | | | 23,271 | | | | 548 | | | | | | | | | | | | | | | | | |
Construction | | | 2,830 | | | | 4,100 | | | | | | | | 6,545 | | | | 14 | | | | | | | | | | | | | | | | | |
Consumer | | | 21 | | | | 21 | | | | | | | | 133 | | | | 0 | | | | | | | | | | | | | | | | | |
Residential real estate | | | 2,827 | | | | 2,827 | | | | | | | | 2,791 | | | | 36 | | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 3,333 | | | | 4,603 | | | $ | 961 | | | | 1,192 | | | | 157 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 6,687 | | | | 7,637 | | | | 2,233 | | | | 7,919 | | | | 169 | | | | | | | | | | | | | | | | | |
Construction | | | 1,148 | | | | 1,148 | | | | 368 | | | | 5,544 | | | | 46 | | | | | | | | | | | | | | | | | |
Consumer | | | 54 | | | | 54 | | | | 1 | | | | 46 | | | | 4 | | | | | | | | | | | | | | | | | |
Residential real estate | | | 378 | | | | 378 | | | | 187 | | | | 953 | | | | 2 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 50,330 | | | $ | 54,734 | | | $ | 3,750 | | | $ | 55,091 | | | $ | 1,338 | | | | | | | | | | | | | | | | | |
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| | December 31, 2012 | | | For the Nine Months Ended | | | | | | | | | | | | | | | | | |
September 30, 2012 | | | | | | | | | | | | | | | | |
| | Recorded | | | Unpaid | | | Related | | | Average | | | Interest | | | | | | | | | | | | | | | | | |
Investment | Principal | Allowance | Recorded | Income | | | | | | | | | | | | | | | | |
Net of | Balance | | Investment | Recognized | | | | | | | | | | | | | | | | |
Charge Offs | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | |
With no related allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 3,844 | | | $ | 3,844 | | | | | | | $ | 5,191 | | | $ | 160 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 26,626 | | | | 27,477 | | | | | | | | 22,205 | | | | 748 | | | | | | | | | | | | | | | | | |
Construction | | | 6,588 | | | | 6,618 | | | | | | | | 7,627 | | | | 19 | | | | | | | | | | | | | | | | | |
Consumer | | | 101 | | | | 101 | | | | | | | | 105 | | | | 3 | | | | | | | | | | | | | | | | | |
Residential real estate | | | 3,188 | | | | 3,188 | | | | | | | | 2,382 | | | | 55 | | | | | | | | | | | | | | | | | |
With an allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 374 | | | | 374 | | | $ | 295 | | | | 748 | | | | 9 | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 8,708 | | | | 10,022 | | | | 2,505 | | | | 9,071 | | | | 205 | | | | | | | | | | | | | | | | | |
Construction | | | 5,116 | | | | 6,022 | | | | 1,541 | | | | 6,903 | | | | 154 | | | | | | | | | | | | | | | | | |
Consumer | | | 100 | | | | 100 | | | | 14 | | | | 29 | | | | 4 | | | | | | | | | | | | | | | | | |
Residential real estate | | | 1,331 | | | | 1,331 | | | | 270 | | | | 967 | | | | 13 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 55,976 | | | $ | 59,077 | | | $ | 4,625 | | | $ | 55,228 | | | $ | 1,370 | | | | | | | | | | | | | | | | | |
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Troubled Debt Restructurings |
At September 30, 2013, there were $6.9 million in loans reported as troubled debt restructurings (“TDR”), and at September 30, 2012, there were $8.2 million in loans reported as troubled debt restructurings. All TDRs are reported as impaired loans in the calendar year of their restructuring. In subsequent years, a TDR may cease being reported as impaired if the loan was modified at a market rate and has performed according to the modified terms for at least nine months. A loan that has been modified at a below-market rate will be returned to performing status if it satisfies the six-month performance requirement; however, it will remain classified as impaired. |
Modification of purchased-credit-impaired loans that are accounted for within loan pools in accordance with the accounting standards for purchased-credit-impaired loans do not result in the removal of these loans from the pool even if modifications would otherwise be considered a TDR. Accordingly, as each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, modifications of loans within such pools are not TDRs. |
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The following is an analysis of loans modified in a troubled debt restructuring by type of concession for the three and nine months ended September 30, 2013 and 2012. There were no modifications that involved forgiveness of debt. |
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| | TDRs in | | | TDRs in | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | |
Compliance | Compliance | | | | | | | | | | | | | | | | | | | | | | | | |
with Their | with Their | | | | | | | | | | | | | | | | | | | | | | | | |
Modified | Modified | | | | | | | | | | | | | | | | | | | | | | | | |
Terms and | Terms and | | | | | | | | | | | | | | | | | | | | | | | | |
Accruing | Not | | | | | | | | | | | | | | | | | | | | | | | | |
Interest | Accruing | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended under forbearance | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multiple extensions resulting from financial difficulty | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-rate reductions | | | 0 | | | | 12 | | | | 12 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 0 | | | $ | 12 | | | $ | 12 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended under forbearance | | $ | 0 | | | $ | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multiple extensions resulting from financial difficulty | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-rate reductions | | | 93 | | | | 1,179 | | | | 1,272 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 93 | | | $ | 1,179 | | | $ | 1,272 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended under forbearance | | $ | 0 | | | $ | 471 | | | $ | 471 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multiple extensions resulting from financial difficulty | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-rate reductions | | | 0 | | | | 61 | | | | 61 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 0 | | | $ | 532 | | | $ | 532 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended under forbearance | | $ | 0 | | | $ | 471 | | | $ | 471 | | | | | | | | | | | | | | | | | | | | | | | | | |
Multiple extensions resulting from financial difficulty | | | 47 | | | | 0 | | | | 47 | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-rate reductions | | | 268 | | | | 61 | | | | 329 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 315 | | | $ | 532 | | | $ | 847 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following table provides, by class, the number of loans modified in troubled debt restructurings and the recorded investments and unpaid principal balances during the three and nine months ended September 30, 2013 and 2012. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | TDRs in Compliance with Their | | | TDRs in | | | | | | | | | | | | | | | | | | | | | |
Modified Terms and Accruing | Compliance | | | | | | | | | | | | | | | | | | | | |
Interest | with Their | | | | | | | | | | | | | | | | | | | | |
| Modified | | | | | | | | | | | | | | | | | | | | |
| Terms and Not | | | | | | | | | | | | | | | | | | | | |
| Accruing Interest | | | | | | | | | | | | | | | | | | | | |
| | Number | | | Recorded | | | Number | | | Recorded | | | | | | | | | | | | | | | | | | | | | |
of Loans | Investment | of Loans | Investment | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | |
Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 0 | | | $ | 0 | | | | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Manufactured housing | | | 0 | | | | 0 | | | | 1 | | | | 12 | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 0 | | | $ | 0 | | | | 1 | | | $ | 12 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 0 | | | $ | 0 | | | | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Manufactured housing | | | 2 | | | | 60 | | | | 11 | | | | 1,179 | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 1 | | | | 33 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 3 | | | $ | 93 | | | | 11 | | | $ | 1,179 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 0 | | | $ | 0 | | | | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Manufactured housing | | | 0 | | | | 0 | | | | 1 | | | | 61 | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 0 | | | | 0 | | | | 2 | | | | 141 | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 0 | | | | 0 | | | | 1 | | | | 330 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 0 | | | $ | 0 | | | | 4 | | | $ | 532 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 0 | | | $ | 0 | | | | 0 | | | $ | 0 | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Construction | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
Manufactured housing | | | 6 | | | | 315 | | | | 1 | | | | 61 | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 0 | | | | 0 | | | | 2 | | | | 141 | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 0 | | | | 0 | | | | 1 | | | | 330 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 6 | | | $ | 315 | | | | 4 | | | $ | 532 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At September 30, 2013 and 2012, there were no commitments to lend additional funds to debtors whose terms have been modified in troubled debt restructuring. |
All loans modified in troubled debt restructurings are evaluated for impairment. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for credit losses. There was $0 in specific reserves resulting from the addition of TDR modifications for both the three and nine months ended September 30, 2013 and 2012. There were no TDRs that defaulted in the three and nine month periods ended September 30, 2013 and 2012. |
Credit Quality Indicators |
Credit quality indicators for commercial and industrial, commercial real estate, residential real estate, and construction loans are based on an internal risk-rating system and are assigned at the loan origination and reviewed on a periodic or on an “as needed” basis. Consumer, mortgage warehouse, and manufactured housing loans are evaluated on the basis of the payment activity of the loan. |
|
To facilitate the monitoring of credit quality within the commercial and industrial, commercial real estate, construction portfolio, and residential real estate classes, and for purposes of analyzing historical loss rates used in the determination of the allowance for loan losses for the respective portfolio class, the Bank utilizes the following categories of risk ratings: pass/satisfactory, special mention, substandard, doubtful, and loss. The risk rating categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter. Pass/satisfactory ratings, which are assigned to those borrowers that do not have identified potential or well defined weaknesses and for which there is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter. While assigning risk ratings involves judgment and estimates, the risk rating process is intended to permit management to identify riskier credits in a timely manner and allocate the appropriate resources to managing the loans. |
The Bank assigns a special mention rating to loans that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the loan and the Bank’s credit position. |
The Bank assigns a substandard rating to loans that are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. Substandard loans have well defined weaknesses or weaknesses that could jeopardize the orderly repayment of the debt. Loans in this category also are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies noted are not addressed and corrected. |
The Bank assigns a doubtful rating to loans that have all the attributes of a substandard rating 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. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans. |
When it is determined that these loans are uncollectible they are charged off in the period in which they are determined to be uncollectible. Loans, or portions of loans, classified as loss indicate that the Bank does not expect to collect the amounts classified as a loss. |
Risk ratings are not established for home equity loans, consumer loans, and installment loans, mainly because these portfolios consist of a larger number of homogenous loans with smaller balances. Instead, these portfolios are evaluated for risk mainly based on aggregate payment history, through the monitoring of delinquency levels and trends and are classified as performing and nonperforming. |
The following presents the credit quality tables as of September 30, 2013 and December 31, 2012 for the non-covered loan portfolio: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Construction | | | Residential | | | | | | | | | | | | | | | | | | | | | |
and | Real Estate | Real Estate | | | | | | | | | | | | | | | | | | | | |
Industrial | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | |
Pass/Satisfactory | | $ | 200,651 | | | $ | 1,460,484 | | | $ | 32,499 | | | $ | 130,504 | | | | | | | | | | | | | | | | | | | | | |
Special Mention | | | 12,861 | | | | 16,200 | | | | 88 | | | | 1,380 | | | | | | | | | | | | | | | | | | | | | |
Substandard | | | 282 | | | | 14,246 | | | | 2,087 | | | | 1,619 | | | | | | | | | | | | | | | | | | | | | |
Doubtful | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 213,794 | | | $ | 1,490,930 | | | $ | 34,674 | | | $ | 133,503 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Consumer | | | Mortgage | | | Manufactured | | | | | | | | | | | | | | | | | | | | | | | | | |
Warehouse | Housing | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 1,889 | | | $ | 1,006 | | | $ | 141,576 | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming (1) | | | 0 | | | | 0 | | | | 1,101 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,889 | | | $ | 1,006 | | | $ | 142,677 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
-1 | Includes loans that are on nonaccrual status at September 30, 2013. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Construction | | | Residential | | | | | | | | | | | | | | | | | | | | | |
and | Real Estate | Real Estate | | | | | | | | | | | | | | | | | | | | |
Industrial | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | |
Pass/Satisfactory | | $ | 70,955 | | | $ | 794,187 | | | $ | 26,020 | | | $ | 105,490 | | | | | | | | | | | | | | | | | | | | | |
Special Mention | | | 3,836 | | | | 18,737 | | | | 454 | | | | 1,017 | | | | | | | | | | | | | | | | | | | | | |
Substandard | | | 327 | | | | 21,801 | | | | 1,971 | | | | 2,919 | | | | | | | | | | | | | | | | | | | | | |
Doubtful | | | 0 | | | | 763 | | | | 452 | | | | 4 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 75,118 | | | $ | 835,488 | | | $ | 28,897 | | | $ | 109,430 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Consumer | | | Mortgage | | | Manufactured | | | | | | | | | | | | | | | | | | | | | | | | | |
Warehouse | Housing | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 2,005 | | | $ | 9,565 | | | $ | 154,562 | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming (1) | | | 56 | | | | 0 | | | | 141 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 2,061 | | | $ | 9,565 | | | $ | 154,703 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
-1 | Includes loans that are on nonaccrual status at December 31, 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following presents the credit quality tables as of September 30, 2013 and December 31, 2012 for the covered loan portfolio: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Construction | | | Residential | | | | | | | | | | | | | | | | | | | | | |
and | Real Estate | Real Estate | | | | | | | | | | | | | | | | | | | | |
Industrial | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | |
Pass/Satisfactory | | $ | 4,730 | | | $ | 17,920 | | | $ | 1,972 | | | $ | 14,245 | | | | | | | | | | | | | | | | | | | | | |
Special Mention | | | 119 | | | | 3,020 | | | | 3,949 | | | | 455 | | | | | | | | | | | | | | | | | | | | | |
Substandard | | | 1,977 | | | | 8,683 | | | | 16,271 | | | | 4,533 | | | | | | | | | | | | | | | | | | | | | |
Doubtful | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 6,826 | | | $ | 29,623 | | | $ | 22,192 | | | $ | 19,233 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Manufactured | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Housing | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 3,274 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming (1) | | | 107 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,381 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
-1 | Includes loans that are on nonaccrual status at September 30, 2013. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | Commercial | | | Construction | | | Residential | | | | | | | | | | | | | | | | | | | | | |
and | Real Estate | Real Estate | | | | | | | | | | | | | | | | | | | | |
Industrial | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | |
Pass/Satisfactory | | $ | 8,888 | | | $ | 26,195 | | | $ | 2,434 | | | $ | 14,021 | | | | | | | | | | | | | | | | | | | | | |
Special Mention | | | 51 | | | | 225 | | | | 4,038 | | | | 455 | | | | | | | | | | | | | | | | | | | | | |
Substandard | | | 2,214 | | | | 18,481 | | | | 21,320 | | | | 5,476 | | | | | | | | | | | | | | | | | | | | | |
Doubtful | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 11,153 | | | $ | 44,901 | | | $ | 27,792 | | | $ | 19,952 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Manufactured | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Housing | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | | $ | 3,638 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming (1) | | | 90 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 3,728 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
-1 | Includes loans that are on nonaccrual status at December 31, 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Allowance for loan losses |
The changes in the allowance for loan losses for the three and nine months ended September 30, 2013 and 2012 and the loans and allowance for loan losses by loan segment based on impairment evaluation method are as follows. Please read in conjunction with disclosures in the Bancorp’s 2012 Annual Report on Form 10-K. |
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| | Commercial | | | Commercial | | | Construction | | | Residential | | | Manufactured | | | Consumer | | | Mortgage | | | Residual | | | Total | |
and | Real Estate | Real Estate | Housing (1) | Warehouse | Reserve |
Industrial | | | | | |
| | (dollars in thousands) | |
Three months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Beginning Balance, July 1, 2013 | | $ | 2,485 | | | $ | 16,685 | | | $ | 4,317 | | | $ | 3,552 | | | $ | 678 | | | $ | 106 | | | $ | 56 | | | $ | 263 | | | $ | 28,142 | |
Charge-offs | | | 1,311 | | | | 851 | | | | 0 | | | | 116 | | | | 0 | | | | 16 | | | | 0 | | | | 0 | | | | 2,294 | |
Recoveries | | | 16 | | | | 186 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 202 | |
Provision for loan losses | | | 2,029 | | | | (349 | ) | | | (1,163 | ) | | | (216 | ) | | | 1 | | | | 13 | | | | (14 | ) | | | 449 | | | | 750 | |
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Ending Balance, September 30, 2013 | | $ | 3,219 | | | $ | 15,671 | | | $ | 3,154 | | | $ | 3,220 | | | $ | 679 | | | $ | 103 | | | $ | 42 | | | $ | 712 | | | $ | 26,800 | |
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Nine months ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Beginning Balance, January 1, 2013 | | $ | 1,477 | | | $ | 15,439 | | | $ | 3,991 | | | $ | 3,233 | | | $ | 750 | | | $ | 154 | | | $ | 71 | | | $ | 722 | | | $ | 25,837 | |
Charge-offs | | | 1,407 | | | | 2,742 | | | | 1,470 | | | | 315 | | | | 0 | | | | 16 | | | | 0 | | | | 0 | | | | 5,950 | |
Recoveries | | | 181 | | | | 246 | | | | 0 | | | | 7 | | | | 0 | | | | 9 | | | | 0 | | | | 0 | | | | 443 | |
Provision for loan losses | | | 2,968 | | | | 2,728 | | | | 633 | | | | 295 | | | | (71 | ) | | | (44 | ) | | | (29 | ) | | | (10 | ) | | | 6,470 | |
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Ending Balance, September 30, 2013 | | $ | 3,219 | | | $ | 15,671 | | | $ | 3,154 | | | $ | 3,220 | | | $ | 679 | | | $ | 103 | | | $ | 42 | | | $ | 712 | | | $ | 26,800 | |
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At September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 20,162 | | | $ | 22,910 | | | $ | 3,978 | | | $ | 3,205 | | | $ | 0 | | | $ | 75 | | | $ | 0 | | | $ | 0 | | | $ | 50,330 | |
Collectively evaluated for impairment | | | 195,857 | | | | 1,449,009 | | | | 39,058 | | | | 134,582 | | | | 140,869 | | | | 1,258 | | | | 1,006 | | | | 0 | | | | 1,961,639 | |
Loans acquired with credit deterioration | | | 4,601 | | | | 48,634 | | | | 13,830 | | | | 14,949 | | | | 5,189 | | | | 556 | | | | 0 | | | | 0 | | | | 87,759 | |
Market discounts/premiums/valuation adjustments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 59 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 2,099,787 | |
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Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 961 | | | $ | 2,233 | | | $ | 368 | | | $ | 187 | | | $ | 0 | | | $ | 1 | | | $ | 0 | | | $ | 0 | | | $ | 3,750 | |
Collectively evaluated for impairment | | | 1,991 | | | | 8,315 | | | | 241 | | | | 1,115 | | | | 80 | | | | 40 | | | | 42 | | | | 712 | | | | 12,536 | |
Loans acquired with credit deterioration | | | 267 | | | | 5,123 | | | | 2,545 | | | | 1,918 | | | | 599 | | | | 62 | | | | 0 | | | | 0 | | | | 10,514 | |
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| | $ | 3,219 | | | $ | 15,671 | | | $ | 3,154 | | | $ | 3,220 | | | $ | 679 | | | $ | 103 | | | $ | 42 | | | $ | 712 | | | $ | 26,800 | |
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Three months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Beginning Balance, July 1, 2012 | | $ | 1,503 | | | $ | 8,266 | | | $ | 4,352 | | | $ | 1,080 | | | $ | 40 | | | $ | 75 | | | $ | 802 | | | $ | 0 | | | $ | 16,118 | |
Charge-offs | | | 266 | | | | 283 | | | | 475 | | | | 365 | | | | 0 | | | | 27 | | | | 0 | | | | 0 | | | | 1,416 | |
Recoveries | | | 98 | | | | 33 | | | | 3 | | | | 0 | | | | 0 | | | | 22 | | | | 0 | | | | 0 | | | | 156 | |
Provision for loan losses | | | 387 | | | | 5,923 | | | | 1,139 | | | | 2,262 | | | | 858 | | | | 279 | | | | (732 | ) | | | 0 | | | | 10,116 | |
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Ending Balance, September 30, 2012 | | $ | 1,722 | | | $ | 13,939 | | | $ | 5,019 | | | $ | 2,977 | | | $ | 898 | | | $ | 349 | | | $ | 70 | | | $ | 0 | | | $ | 24,974 | |
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Nine months ended September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Beginning Balance, January 1, 2012 | | $ | 1,441 | | | $ | 7,029 | | | $ | 4,656 | | | $ | 844 | | | $ | 18 | | | $ | 61 | | | $ | 929 | | | $ | 54 | | | $ | 15,032 | |
Charge-offs | | | 300 | | | | 1,426 | | | | 2,666 | | | | 565 | | | | 0 | | | | 37 | | | | 0 | | | | 0 | | | | 4,994 | |
Recoveries | | | 164 | | | | 83 | | | | 3 | | | | 5 | | | | 0 | | | | 27 | | | | 0 | | | | 0 | | | | 282 | |
Provision for loan losses | | | 417 | | | | 8,253 | | | | 3,026 | | | | 2,693 | | | | 880 | | | | 298 | | | | (859 | ) | | | (54 | ) | | | 14,654 | |
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Ending Balance, September 30, 2012 | | $ | 1,722 | | | $ | 13,939 | | | $ | 5,019 | | | $ | 2,977 | | | $ | 898 | | | $ | 349 | | | $ | 70 | | | $ | 0 | | | $ | 24,974 | |
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At September 30, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 4,558 | | | $ | 37,250 | | | $ | 13,169 | | | $ | 4,540 | | | $ | 0 | | | $ | 273 | | | $ | 0 | | | $ | 0 | | | $ | 59,790 | |
Collectively evaluated for impairment | | | 79,448 | | | | 543,772 | | | | 11,056 | | | | 100,751 | | | | 150,876 | | | | 11,356 | | | | 9,321 | | | | 0 | | | | 906,580 | |
Loans acquired with credit deterioration | | | 5,774 | | | | 70,915 | | | | 18,904 | | | | 15,819 | | | | 13,113 | | | | 2,125 | | | | 0 | | | | 0 | | | | 126,650 | |
Market discounts/premiums/valuation adjustments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (5,921 | ) |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 1,087,099 | |
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Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 349 | | | $ | 2,787 | | | $ | 2,450 | | | $ | 250 | | | $ | 0 | | | $ | 3 | | | $ | 0 | | | $ | 0 | | | $ | 5,839 | |
Collectively evaluated for impairment | | | 877 | | | | 5,379 | | | | 262 | | | | 878 | | | | 757 | | | | 93 | | | | 70 | | | | 0 | | | | 8,316 | |
Loans acquired with credit deterioration | | | 496 | | | | 5,773 | | | | 2,307 | | | | 1,849 | | | | 141 | | | | 253 | | | | 0 | | | | 0 | | | | 10,819 | |
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| | $ | 1,722 | | | $ | 13,939 | | | $ | 5,019 | | | $ | 2,977 | | | $ | 898 | | | $ | 349 | | | $ | 70 | | | $ | 0 | | | $ | 24,974 | |
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-1 | The non-covered manufactured housing portfolio was purchased in August 2010. A portion of the purchase price may be used to reimburse the Bank under the specified terms in the Purchase Agreement for defaults of the underlying borrower and other specified items. At September 30, 2013 and 2012, funds available for reimbursement, if necessary, were $2.9 million and $4.1 million, respectively. Quarterly, these funds are evaluated to determine if they would be sufficient to absorb probable losses within the manufactured housing portfolio. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The changes in accretable yield related to purchased-credit-impaired loans for the three and nine months ended September 30, 2013 and 2012 were as follows: |
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For the Three Months Ended September 30, | | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretable yield balance, beginning of period | | $ | 27,649 | | | $ | 43,230 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretion to interest income | | | (1,362 | ) | | | (7,384 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reclassification from nonaccretable difference and disposals, net | | | (754 | ) | | | (147 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Accretable yield balance, end of period | | $ | 25,533 | | | $ | 35,699 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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For the Nine Months Ended September 30, | | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretable yield balance, beginning of period | | $ | 32,174 | | | $ | 45,358 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretion to interest income | | | (5,034 | ) | | | (9,443 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reclassification from nonaccretable difference and disposals, net | | | (1,607 | ) | | | (216 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Accretable yield balance, end of period | | $ | 25,533 | | | $ | 35,699 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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