Note 5 - Loans and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2014 |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 5 – LOANS AND ALLOWANCE FOR LOAN LOSSES |
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The Company’s loan portfolio was comprised of the following at December 31: |
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| | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | PCI loans | | | All other loans | | | Total | | | PCI loans | | | All other loans | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 5,552 | | | $ | 168,234 | | | $ | 173,786 | | | $ | 5,737 | | | $ | 116,663 | | | $ | 122,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate (CRE) - owner-occupied | | | 30,554 | | | | 303,228 | | | | 333,782 | | | | 35,760 | | | | 231,821 | | | | 267,581 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 43,866 | | | | 426,781 | | | | 470,647 | | | | 56,996 | | | | 325,191 | | | | 382,187 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - 1-4 family construction | | | 514 | | | | 28,887 | | | | 29,401 | | | | - | | | | 19,959 | | | | 19,959 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 13,660 | | | | 41,783 | | | | 55,443 | | | | 22,699 | | | | 42,890 | | | | 65,589 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - CRE | | | 112 | | | | 71,478 | | | | 71,590 | | | | 121 | | | | 56,638 | | | | 56,759 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 1,187 | | | | 3,858 | | | | 5,045 | | | | 137 | | | | 3,712 | | | | 3,849 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 95,445 | | | | 1,044,249 | | | | 1,139,694 | | | | 121,450 | | | | 796,874 | | | | 918,324 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 28,730 | | | | 176,420 | | | | 205,150 | | | | 32,826 | | | | 140,550 | | | | 173,376 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines of credit (HELOC) | | | 1,734 | | | | 153,563 | | | | 155,297 | | | | 1,402 | | | | 142,352 | | | | 143,754 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 6,574 | | | | 49,308 | | | | 55,882 | | | | 6,920 | | | | 33,901 | | | | 40,821 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 758 | | | | 21,828 | | | | 22,586 | | | | 1,189 | | | | 17,606 | | | | 18,795 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 37,796 | | | | 401,119 | | | | 438,915 | | | | 42,337 | | | | 334,409 | | | | 376,746 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | | 133,241 | | | | 1,445,368 | | | | 1,578,609 | | | | 163,787 | | | | 1,131,283 | | | | 1,295,070 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred fees | | | - | | | | 2,084 | | | | 2,084 | | | | - | | | | 738 | | | | 738 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans, net of deferred fees | | $ | 133,241 | | | $ | 1,447,452 | | | $ | 1,580,693 | | | $ | 163,787 | | | $ | 1,132,021 | | | $ | 1,295,808 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Included in the loan totals at December 31, 2014 and 2013 is $42.3 million and $71.1 million, respectively, of covered loans pursuant to the FDIC loss share agreements. Of these amounts, at December 31, 2014 and 2013, $39.8 million and $68.0 million, respectively, is included in PCI loans and $2.5 million and $3.2 million, respectively, is included in all other loans. |
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At December 31, 2014 and 2013, the Company had sold participations in loans aggregating $6.5 million and $3.3 million, respectively, to other financial institutions on a nonrecourse basis. Collections on loan participations and remittances to participating institutions conform to customary banking practices. |
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The Bank accepts residential mortgage loan applications and funds loans of qualified borrowers. Funded loans are sold with limited recourse to investors under the terms of pre-existing commitments. The Bank executes all of its loan sales agreements under best efforts contracts with investors. From time to time, the Company may choose to hold certain mortgage loans on balance sheet. In addition, as part of the Provident Community merger, the Company serviced $3.7 million residential mortgage loans for the benefit of others as of December 31, 2014. The Company did not service residential mortgage loans for the benefit of others as of December 31, 2013. |
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Loans sold with limited recourse are 1-4 family residential mortgages originated by the Bank and sold to various other financial institutions. Various recourse agreements exist, ranging from thirty days to twelve months. The Company’s exposure to credit loss in the event of nonperformance by the other party to the loan is represented by the contractual notional amount of the loan. Since none of the loans have ever been returned to the Company, the amount of total loans sold with limited recourse does not necessarily represent future cash requirements. Total loans sold with limited recourse in 2014 and 2013 was $58.8 million and $110.1 million, respectively. |
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The outstanding principal balance and the carrying amount of acquired loans that were recorded at fair value at the acquisition date that are included in the consolidated balance sheet at December 31, 2014 and 2013 were as follows: |
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| | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | PCI loans | | | Purchased Performing loans | | | Total | | | PCI loans | | | Purchased Performing loans | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Outstanding principal balance | | $ | 165,686 | | | $ | 367,768 | | | $ | 533,454 | | | $ | 197,040 | | | $ | 408,970 | | | $ | 606,010 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carrying amount: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 5,552 | | | | 11,032 | | | | 16,584 | | | | 5,737 | | | | 18,377 | | | | 24,114 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 30,554 | | | | 101,071 | | | | 131,625 | | | | 35,760 | | | | 103,834 | | | | 139,594 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 43,866 | | | | 62,493 | | | | 106,359 | | | | 56,996 | | | | 69,368 | | | | 126,364 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - 1-4 family construction | | | 514 | | | | - | | | | 514 | | | | - | | | | 97 | | | | 97 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 13,660 | | | | 8,052 | | | | 21,712 | | | | 22,699 | | | | 13,509 | | | | 36,208 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - CRE | | | 112 | | | | - | | | | 112 | | | | 121 | | | | 3,218 | | | | 3,339 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 1,187 | | | | 734 | | | | 1,921 | | | | 137 | | | | 1,889 | | | | 2,026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 28,730 | | | | 91,291 | | | | 120,021 | | | | 32,826 | | | | 98,104 | | | | 130,930 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 1,734 | | | | 83,573 | | | | 85,307 | | | | 1,402 | | | | 86,512 | | | | 87,914 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 6,574 | | | | 3,928 | | | | 10,502 | | | | 6,920 | | | | 7,155 | | | | 14,075 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 758 | | | | 2,615 | | | | 3,373 | | | | 1,189 | | | | 2,377 | | | | 3,566 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 133,241 | | | $ | 364,789 | | | $ | 498,030 | | | $ | 163,787 | | | $ | 404,440 | | | $ | 568,227 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Concentrations of Credit - Loans are primarily made within the Company’s operating footprint of North Carolina, South Carolina, Georgia and Virginia. Real estate loans can be affected by the condition of the local real estate market. Commercial and industrial loans can be affected by the local economic conditions. The commercial loan portfolio has concentrations in business loans secured by real estate including construction loans and real estate development loans. Primary concentrations in the consumer loan portfolio include home equity lines of credit and residential mortgages. At December 31, 2014 and December 31, 2013, the Company had no loans outstanding with non-United States entities. |
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Allowance for Loan Losses -The following table presents, by portfolio segment, the activity in the allowance for loan losses for the years ended December 31, 2014, 2013 and 2012. |
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| | Commercial and industrial | | | CRE - owner-occupied | | | CRE - investor income producing | | | AC&D | | | AC&D-1-4 family construction | | | AC&D- lots, land, & development | | | AC&D- CRE | | | Other commercial | | | Residential mortgage | | | HELOC | | | Residential construction | | | Other loans to individuals | | | Total | |
For the year ended December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses, excluding PCI: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of year | | $ | 1,491 | | | $ | 399 | | | $ | 1,797 | | | $ | - | | | $ | 839 | | | $ | 1,751 | | | $ | 299 | | | $ | 25 | | | $ | 358 | | | $ | 1,050 | | | $ | 390 | | | $ | 72 | | | $ | 8,471 | |
Provision for loan losses | | | (254 | ) | | | 252 | | | | 123 | | | | | | | | (464 | ) | | | (2,871 | ) | | | 96 | | | | 6 | | | | 48 | | | | 1,384 | | | | 296 | | | | 29 | | | | (1,355 | ) |
Charge-offs | | | (161 | ) | | | (193 | ) | | | (292 | ) | | | - | | | | (15 | ) | | | (16 | ) | | | - | | | | - | | | | (161 | ) | | | (852 | ) | | | (201 | ) | | | (50 | ) | | | (1,941 | ) |
Recoveries | | | 487 | | | | 263 | | | | 123 | | | | - | | | | 98 | | | | 1,727 | | | | - | | | | 1 | | | | 198 | | | | 69 | | | | 57 | | | | 64 | | | | 3,087 | |
Net (charge-offs) recoveries | | | 326 | | | | 70 | | | | (169 | ) | | | - | | | | 83 | | | | 1,711 | | | | - | | | | 1 | | | | 37 | | | | (783 | ) | | | (144 | ) | | | 14 | | | | 1,146 | |
Ending balance | | $ | 1,563 | | | $ | 721 | | | $ | 1,751 | | | $ | - | | | $ | 458 | | | $ | 591 | | | $ | 395 | | | $ | 32 | | | $ | 443 | | | $ | 1,651 | | | $ | 542 | | | $ | 115 | | | $ | 8,262 | |
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PCI Impairment Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of year | | $ | - | | | $ | - | | | $ | 360 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 360 | |
PCI impairment charge-offs | | | - | | | | - | | | | (6 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1 | ) | | | (144 | ) | | | - | | | | - | | | | (151 | ) |
PCI impairment recoveries | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
Net PCI impairment charge-offs | | | - | | | | - | | | | (6 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1 | ) | | | (144 | ) | | | - | | | | - | | | | (151 | ) |
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Reversal of PCI impairment | | | - | | | | - | | | | (354 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1 | | | | 144 | | | | - | | | | - | | | | (209 | ) |
Benefit attributable to FDIC loss share agreements | | | - | | | | - | | | | 278 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 278 | |
Total provision for loan losses charged to operations | | | - | | | | - | | | | (76 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1 | | | | 144 | | | | - | | | | - | | | | 69 | |
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Provision for loan losses recorded through FDIC loss share receivable | | | - | | | | - | | | | (278 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (278 | ) |
Ending balance | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
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Total Allowance for Loan Losses | | $ | 1,563 | | | $ | 721 | | | $ | 1,751 | | | $ | - | | | $ | 458 | | | $ | 591 | | | $ | 395 | | | $ | 32 | | | $ | 443 | | | $ | 1,651 | | | $ | 542 | | | $ | 115 | | | $ | 8,262 | |
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For the year ended December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses, excluding PCI: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of year | | $ | 849 | | | $ | 496 | | | $ | 1,102 | | | $ | 4,157 | | | $ | - | | | $ | - | | | $ | - | | | $ | 8 | | | $ | 454 | | | $ | 1,463 | | | $ | 1,046 | | | $ | 49 | | | $ | 9,624 | |
Provision for loan losses | | | 1,693 | | | | (52 | ) | | | 933 | | | | (4,157 | ) | | | 705 | | | | 1,031 | | | | 299 | | | | 16 | | | | 319 | | | | 359 | | | | (673 | ) | | | 31 | | | | 504 | |
Charge-offs | | | (1,238 | ) | | | (52 | ) | | | (718 | ) | | | - | | | | (87 | ) | | | (6 | ) | | | - | | | | - | | | | (831 | ) | | | (838 | ) | | | (44 | ) | | | (64 | ) | | | (3,878 | ) |
Recoveries | | | 187 | | | | 7 | | | | 480 | | | | - | | | | 221 | | | | 726 | | | | - | | | | 1 | | | | 416 | | | | 66 | | | | 61 | | | | 56 | | | | 2,221 | |
Net (charge-offs) recoveries | | | (1,051 | ) | | | (45 | ) | | | (238 | ) | | | - | | | | 134 | | | | 720 | | | | - | | | | 1 | | | | (415 | ) | | | (772 | ) | | | 17 | | | | (8 | ) | | | (1,657 | ) |
Ending balance | | $ | 1,491 | | | $ | 399 | | | $ | 1,797 | | | $ | - | | | $ | 839 | | | $ | 1,751 | | | $ | 299 | | | $ | 25 | | | $ | 358 | | | $ | 1,050 | | | $ | 390 | | | $ | 72 | | | $ | 8,471 | |
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PCI Impairment Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of year | | $ | 225 | | | $ | - | | | $ | - | | | $ | 542 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 200 | | | $ | - | | | $ | - | | | $ | - | | | $ | 967 | |
PCI impairment charge-offs | | | (216 | ) | | | - | | | | (16 | ) | | | (177 | ) | | | - | | | | - | | | | - | | | | (386 | ) | | | (311 | ) | | | - | | | | (233 | ) | | | (36 | ) | | | (1,375 | ) |
PCI impairment recoveries | | | - | | | | - | | | | - | | | | 25 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 25 | |
Net PCI impairment charge-offs | | | (216 | ) | | | - | | | | (16 | ) | | | (152 | ) | | | - | | | | - | | | | - | | | | (386 | ) | | | (311 | ) | | | - | | | | (233 | ) | | | (36 | ) | | | (1,350 | ) |
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PCI provision for loan losses | | | (9 | ) | | | - | | | | 376 | | | | (390 | ) | | | - | | | | - | | | | - | | | | 386 | | | | 111 | | | | - | | | | 233 | | | | 36 | | | | 743 | |
Benefit attributable to FDIC loss share agreements | | | (104 | ) | | | - | | | | (205 | ) | | | (192 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (501 | ) |
Total provision for loan losses charged to operations | | | (113 | ) | | | - | | | | 171 | | | | (582 | ) | | | - | | | | - | | | | - | | | | 386 | | | | 111 | | | | - | | | | 233 | | | | 36 | | | | 242 | |
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Provision for loan losses recorded through FDIC loss share receivable | | | 104 | | | | - | | | | 205 | | | | 192 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 501 | |
Ending balance | | $ | - | | | $ | - | | | $ | 360 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 360 | |
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Total Allowance for Loan Losses | | $ | 1,491 | | | $ | 399 | | | $ | 2,157 | | | $ | - | | | $ | 839 | | | $ | 1,751 | | | $ | 299 | | | $ | 25 | | | $ | 358 | | | $ | 1,050 | | | $ | 390 | | | $ | 72 | | | $ | 8,831 | |
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| | Commercial and industrial | | | CRE - owner-occupied | | | CRE - investor income producing | | | AC&D | | | AC&D-1-4 family construction | | | AC&D- lots, land, & development | | | AC&D- CRE | | | Other commercial | | | Residential mortgage | | | HELOC | | | Residential construction | | | Other loans to individuals | | | Total | |
For the year ended December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of year | | $ | 703 | | | $ | 740 | | | $ | 2,106 | | | $ | 3,883 | | | $ | - | | | $ | - | | | $ | - | | | $ | 17 | | | $ | 309 | | | $ | 1,898 | | | $ | 455 | | | $ | 43 | | | $ | 10,154 | |
Provision for loan losses | | | 632 | | | | (40 | ) | | | 71 | | | | (676 | ) | | | - | | | | - | | | | - | | | | 85 | | | | 262 | | | | (62 | ) | | | 795 | | | | (11 | ) | | | 1,056 | |
PCI provision for loan losses | | | 225 | | | | - | | | | - | | | | 542 | | | | - | | | | - | | | | - | | | | - | | | | 200 | | | | - | | | | - | | | | - | | | | 967 | |
Charge-offs | | | (565 | ) | | | (204 | ) | | | (1,132 | ) | | | (652 | ) | | | - | | | | - | | | | - | | | | (94 | ) | | | (129 | ) | | | (406 | ) | | | (328 | ) | | | (12 | ) | | | (3,522 | ) |
Recoveries | | | 79 | | | | - | | | | 57 | | | | 1,602 | | | | - | | | | - | | | | - | | | | - | | | | 12 | | | | 33 | | | | 124 | | | | 29 | | | | 1,936 | |
Net (charge-offs) recoveries | | | (486 | ) | | | (204 | ) | | | (1,075 | ) | | | 950 | | | | - | | | | - | | | | - | | | | (94 | ) | | | (117 | ) | | | (373 | ) | | | (204 | ) | | | 17 | | | | (1,586 | ) |
Ending balance | | $ | 1,074 | | | $ | 496 | | | $ | 1,102 | | | $ | 4,699 | | | $ | - | | | $ | - | | | $ | - | | | $ | 8 | | | $ | 654 | | | $ | 1,463 | | | $ | 1,046 | | | $ | 49 | | | $ | 10,591 | |
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The following table presents, by portfolio segment, the balance in the allowance for loan losses disaggregated on the basis of the Company’s impairment measurement method and the related recorded investment in loans at December 31, 2014 and 2013. |
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| | Commercial and industrial | | | CRE - owner-occupied | | | CRE - investor income producing | | | AC&D | | | AC&D-1-4 family construction | | | AC&D- lots, land, & development | | | AC&D- CRE | | | Other commercial | | | Residential mortgage | | | HELOC | | | Residential construction | | | Other loans to individuals | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 44 | | | $ | 18 | | | $ | 57 | | | $ | - | | | $ | - | | | $ | 11 | | | $ | - | | | $ | 19 | | | $ | 138 | | | $ | 382 | | | $ | 4 | | | $ | 12 | | | $ | 685 | |
Collectively evaluated for impairment | | | 1,519 | | | | 703 | | | | 1,694 | | | | - | | | | 458 | | | | 580 | | | | 395 | | | | 13 | | | | 305 | | | | 1,269 | | | | 538 | | | | 103 | | | | 7,577 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 1,563 | | | | 721 | | | | 1,751 | | | | - | | | | 458 | | | | 591 | | | | 395 | | | | 32 | | | | 443 | | | | 1,651 | | | | 542 | | | | 115 | | | | 8,262 | |
Purchased credit-impaired | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,563 | | | $ | 721 | | | $ | 1,751 | | | $ | - | | | $ | 458 | | | $ | 591 | | | $ | 395 | | | $ | 32 | | | $ | 443 | | | $ | 1,651 | | | $ | 542 | | | $ | 115 | | | $ | 8,262 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recorded Investment in Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 376 | | | $ | 2,889 | | | $ | 1,271 | | | $ | - | | | $ | - | | | $ | 1,073 | | | $ | - | | | $ | 143 | | | $ | 2,525 | | | $ | 2,481 | | | $ | 369 | | | $ | 90 | | | $ | 11,217 | |
Collectively evaluated for impairment | | | 167,858 | | | | 300,339 | | | | 425,510 | | | | - | | | | 28,887 | | | | 40,710 | | | | 71,478 | | | | 3,715 | | | | 173,895 | | | | 151,082 | | | | 48,939 | | | | 21,738 | | | | 1,434,151 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 168,234 | | | | 303,228 | | | | 426,781 | | | | - | | | | 28,887 | | | | 41,783 | | | | 71,478 | | | | 3,858 | | | | 176,420 | | | | 153,563 | | | | 49,308 | | | | 21,828 | | | | 1,445,368 | |
Purchased credit-impaired | | | 5,552 | | | | 30,554 | | | | 43,866 | | | | - | | | | 514 | | | | 13,660 | | | | 112 | | | | 1,187 | | | | 28,730 | | | | 1,734 | | | | 6,574 | | | | 758 | | | | 133,241 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 173,786 | | | $ | 333,782 | | | $ | 470,647 | | | $ | - | | | $ | 29,401 | | | $ | 55,443 | | | $ | 71,590 | | | $ | 5,045 | | | $ | 205,150 | | | $ | 155,297 | | | $ | 55,882 | | | $ | 22,586 | | | $ | 1,578,609 | |
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| | Commercial and industrial | | | CRE - owner-occupied | | | CRE - investor income producing | | | AC&D | | | AC&D-1-4 family construction | | | AC&D- lots, land, & development | | | AC&D- CRE | | | Other commercial | | | Residential mortgage | | | HELOC | | | Residential construction | | | Other loans to individuals | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for Loan Losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 14 | | | $ | 14 | | | $ | 527 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 18 | | | $ | 167 | | | $ | 137 | | | $ | 7 | | | $ | - | | | $ | 884 | |
Collectively evaluated for impairment | | | 1,477 | | | | 385 | | | | 1,270 | | | | - | | | | 839 | | | | 1,751 | | | | 299 | | | | 7 | | | | 191 | | | | 913 | | | | 383 | | | | 72 | | | | 7,587 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 1,491 | | | | 399 | | | | 1,797 | | | | - | | | | 839 | | | | 1,751 | | | | 299 | | | | 25 | | | | 358 | | | | 1,050 | | | | 390 | | | | 72 | | | | 8,471 | |
Purchased credit-impaired | | | - | | | | - | | | | 360 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 360 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,491 | | | $ | 399 | | | $ | 2,157 | | | $ | - | | | $ | 839 | | | $ | 1,751 | | | $ | 299 | | | $ | 25 | | | $ | 358 | | | $ | 1,050 | | | $ | 390 | | | $ | 72 | | | $ | 8,831 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Recorded Investment in Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | 265 | | | $ | 1,902 | | | $ | 3,216 | | | $ | - | | | $ | - | | | $ | 1,888 | | | $ | - | | | $ | 262 | | | $ | 4,513 | | | $ | 3,014 | | | $ | 66 | | | $ | 60 | | | $ | 15,186 | |
Collectively evaluated for impairment | | | 116,398 | | | | 229,919 | | | | 321,975 | | | | - | | | | 19,959 | | | | 41,002 | | | | 56,638 | | | | 3,450 | | | | 136,037 | | | | 139,338 | | | | 33,835 | | | | 17,546 | | | | 1,116,097 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 116,663 | | | | 231,821 | | | | 325,191 | | | | - | | | | 19,959 | | | | 42,890 | | | | 56,638 | | | | 3,712 | | | | 140,550 | | | | 142,352 | | | | 33,901 | | | | 17,606 | | | | 1,131,283 | |
Purchased credit-impaired | | | 5,737 | | | | 35,760 | | | | 56,996 | | | | - | | | | - | | | | 22,699 | | | | 121 | | | | 137 | | | | 32,826 | | | | 1,402 | | | | 6,920 | | | | 1,189 | | | | 163,787 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 122,400 | | | $ | 267,581 | | | $ | 382,187 | | | $ | - | | | $ | 19,959 | | | $ | 65,589 | | | $ | 56,759 | | | $ | 3,849 | | | $ | 173,376 | | | $ | 143,754 | | | $ | 40,821 | | | $ | 18,795 | | | $ | 1,295,070 | |
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The Company’s loan loss allowance methodology includes four components, as described below: |
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1) Specific Reserve Component. Specific reserves represent the current impairment estimate on specific loans, for which it is probable that the Company will be unable to collect all amounts due according to contractual terms based on current information and events. Impairment measurement reflects only a deterioration of credit quality and not changes in market rates that may cause a change in the fair value of the impaired loan. The amount of impairment may be measured in one of three ways, including (i) calculating the present value of expected future cash flows, discounted at the loan’s interest rate implicit in the original document and deducting estimated selling costs, if any; (ii) observing quoted market prices for identical or similar instruments traded in active markets, or employing model-based valuation techniques for which all significant assumptions are observable in the market; and (iii) determining the fair value of collateral, which is utilized for both collateral-dependent loans and for loans when foreclosure is probable. |
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Impaired loans with a balance less than or equal to $150 thousand are viewed in two groups: those which have experienced charge-offs and those recorded at legal balance. Those loans which have experienced charge-offs have no additional reserve applied unless specifically calculated at a point in time when the loan balance exceeded $150 thousand. Those loans recorded at their legal balance are reserved for based on a pooled probability of default and loss given default calculation. |
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2) Quantitative Reserve Component. Quantitative reserves represent the current loss contingency estimate on pools of loans, which is an estimate of the amount for which it is probable that the Company will be unable to collect all amounts due on homogeneous groups of loans according to contractual terms should one or more events occur, excluding those loans specifically identified above. |
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The historical loss experience of the Company is collected quarterly by evaluating internal loss data. The estimated historical loss rates are grouped by loan product type. The Company utilizes average historical losses to represent management’s estimate of losses inherent in a particular portfolio. The historical look back period is estimated by loan type, and the Company applies the appropriate historical loss period which best reflects the inherent loss in the applicable portfolio considering prevailing market conditions. |
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In the past, the Company has recorded a minimum reserve as part of the quantitative component. A minimum reserve is utilized when the Company has insufficient internal loss history or when internal loss history falls below the minimum reserve percentage. Minimums are determined by analyzing Federal Reserve Bank charge-off data for all insured federal- and state-chartered commercial banks. During 2014, the Company determined that it would use the calculated average historical loss rates and adjust to the minimum reserve amounts in its qualitative component. This change represented a reclassification between components of the allowance and had no impact on the calculation in total. |
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During 2013, the Company segregated the AC&D portfolio into three collateral types: (i) 1-4 family construction, (ii) lots, land and development and (iii) CRE construction. These enhancements strengthen the granularity of the allowance methodology and are reflective of the distinctions in credit quality indicators for the three collateral types as well as the Company’s present origination activities. |
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The following look back periods were utilized by management in determining the quantitative reserve component at December 31, 2014 and 2013: |
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| | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Look back periods (in calendar quarters) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 15 | | | | 15 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 15 | | | | Minimum | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 15 | | | | 15 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - 1-4 family construction | | | 15 | | | | 15 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 15 | | | | 15 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - CRE | | | 15 | | | | Minimum | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 15 | | | | Minimum | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 15 | | | | 12 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 15 | | | | 12 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 15 | | | | 12 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 15 | | | | Minimum | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The changes in the look back periods noted above were made to provide a better estimate of the loss inherent in the portfolio for each loan category and to reflect the availability of loss history. The Company also performs a quantitative calculation on the acquired purchased performing loan portfolio. There is no allowance for loan losses established at the acquisition date for purchased performing loans. The historical loss experience discussed above is applied to the acquired purchased performing loan portfolio and the result is compared to the remaining fair value mark on this portfolio. A provision for loan losses is recorded for any further deterioration in these loans subsequent to the acquisition. At December 31, 2014, this analysis indicated a need for a $117 thousand provision for loan losses for the acquired purchased performing portfolio. There was no additional provision for loan losses for the acquired purchased performing portfolio as of December 31, 2013. The remaining mark on the acquired purchased performing loan portfolio was $3.0 million and $4.5 million at December 31, 2014 and 2013, respectively. |
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3) Qualitative Reserve Component. Qualitative reserves represent an estimate of the amount for which it is probable that environmental or other relevant factors will cause the aforementioned loss contingency estimate to differ from the Company’s historical loss experience or other assumptions. These factors include portfolio trends, portfolio concentrations, economic and market conditions, changes in lending practices and other factors. In 2014, the Company introduced two new factors: changes in loan review systems and geographic considerations. Management believes these refinements simplify application of the qualitative component of the allowance methodology. Each of the factors, except other factors, can range from 0.00% (not applicable) to 0.15% (very high). Other factors are reviewed on a situational basis and are adjusted in 5 basis point increments, up or down, with a maximum of 0.50%. Details of the seven environmental factors for inclusion in the allowance methodology are as follows: |
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| i. | Portfolio trends, which may relate to such factors as type or level of loan origination activity, changes in asset quality (i.e., past due, special mention, non-performing) and/or changes in collateral values; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| ii. | Portfolio concentrations, which may relate to individual borrowers and/or guarantors, geographic regions, industry sectors, loan types and/or other factors; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| iii. | Economic and market trends, which may relate to trends and/or levels of gross domestic production, unemployment, bankruptcies, foreclosures, housing starts, housing prices, equity prices, competitor activities and/or other factors; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| iv. | Changes in lending practices, which may relate to changes in credit policies, procedures, systems or staff; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| v. | Changes in loan review system, which may introduce variation in loan grading, collateral adequacy and valuation and impairment classification; | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| vi. | Geographical considerations, which may relate to economic and/or environmental issues unique to a geographical area including but not limited to elimination of a major employer, natural disaster, or long-term states of emergency; and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| vii. | Other factors, which is intended to capture the incremental adjustment, by loan type, to internally calculated minimum reserves (as discussed above) as well as environmental factors not specifically identified above. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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In addition, qualitative reserves on purchased performing loans are based on the Company’s judgment around the timing difference expected to occur between accretion of the fair market value credit adjustment and realization of actual loans losses. |
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4) Reserve on PCI Loans. In determining the acquisition date fair value of PCI loans, and in subsequent accounting, the Company generally aggregates purchased loans into pools of loans with common risk characteristics. Expected cash flows at the acquisition date in excess of the fair value of loans are recorded as interest income over the life of the loans using a level yield method if the timing and amount of the future cash flows of the pool is reasonably estimable. Subsequent to the acquisition date, significant increases in cash flows over those expected at the acquisition date are recognized as interest income prospectively. Decreases in expected cash flows after the acquisition date are recognized by recording an allowance for loan losses. In pools where impairment has already been recognized, an increase in cash flows will result in a reversal of prior impairment. Management analyzes these acquired loan pools using various assessments of risk to determine and calculate an expected loss. The expected loss is derived using an estimate of a loss given default based upon the collateral type and/or specific review by loan officers of loans generally greater than $1.0 million, and the probability of default that was determined based upon management’s review of the loan portfolio. Trends are reviewed in terms of traditional credit metrics such as accrual status, past due status, and weighted average risk grade of the loans within each of the accounting pools. In addition, the relationship between the change in the unpaid principal balance and change in the fair value mark is assessed to correlate the directional consistency of the expected loss for each pool. |
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This analysis resulted in net recovery of impairment for the year ended December 31, 2014 of $209 thousand. Additionally, approximately $(278) thousand was attributable to covered loans under FDIC loss share agreements. These covered loan impairments were a function of an increase in expected losses and as a result, the FDIC indemnification asset was increased. See Note 6 – FDIC Loss Share Agreements for further discussion. These impairments are in a single covered PCI loan pool and are in the CRE – investor income producing loan segment. |
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The allowance for loan losses is increased by provisions charged to operations and reduced by loans charged off, net of recoveries. The decrease in the allowance for loan losses from December 31, 2013 to December 31, 2014 was a function of the following: |
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| -1 | a decrease of $3.5 million in the quantitative component of the allowance due to a decrease in historical loss rates applied to the portfolio as significant charge-offs from 2010 are replaced with low loss or recovery periods in 2014. In addition, changes in look-back periods in the residential construction loan type, which better reflect the inherent loss in the portfolio, and the reclassification of the minimum reserve amounts to the qualitative component contributed to the decrease. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| -2 | An increase of $3.4 million in the qualitative component of the allowance primarily due to the reclassification of minimum reserve amounts noted in item (1) above as well as management’s decision to increase certain factors based on rapid loan growth, entrance into new markets, and caution surrounding the economic recovery. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| -3 | A decrease of $360 thousand in the reserve on PCI loans due to the reversal of previously recognized impairments. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| -4 | A decrease of $199 thousand in specific reserves which change periodically as loans move through or out of the impairment process. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The Company evaluates and estimates off-balance sheet credit exposure at the same time it estimates credit losses for loans by a similar process. These estimated credit losses are not recorded as part of the allowance for loan losses, but are recorded to a separate liability account by a charge to income, if material. Loan commitments, unused lines of credit and standby letters of credit make up the off-balance sheet items reviewed for potential credit losses. At both December 31, 2014 and 2013, $125 thousand was recorded as an other liability for off-balance sheet credit exposure. |
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Credit Quality Indicators -The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company's primary credit quality indicator is an internal credit risk rating system that categorizes loans into pass, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes that comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes that comprise the consumer portfolio segment. |
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The following are the definitions of the Company's credit quality indicators: |
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| Pass: | | Loans in classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. PCI loans that were recorded at estimated fair value on the acquisition date are generally assigned a “pass” loan grade because their net financial statement value is based on the present value of expected cash flows. Management believes there is a low likelihood of loss related to those loans that are considered pass. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Special Mention: | Loans in classes that comprise the commercial and consumer portfolio segments that have potential weaknesses that deserve management's close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. Management believes there is a moderate likelihood of some loss related to those loans that are considered special mention. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Classified: | Loans in the classes that comprise the commercial and consumer portfolio segments that are inadequately protected by the sound worth and paying capacity of the borrower or of the collateral pledged, if any. Management believes that there is a distinct possibility that the Company will sustain some loss if the deficiencies related to classified loans are not corrected in a timely manner. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The Company's credit quality indicators are periodically updated on a case-by-case basis. The following tables present the recorded investment in the Company's loans as of December 31, 2014 and 2013, by loan class and by credit quality indicator. |
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| | As of December 31, 2014 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | | | | | CRE-Investor | | | AC&D- | | | AC&D- lots, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | and | | | CRE-Owner | | | Income | | | 1-4 family | | | land, & | | | | | | | Other | | | Total | | | | | | | | | | | | | | | | | | | | | |
| | Industrial | | | Occupied | | | Producing | | | construction | | | development | | | AC&D- CRE | | | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | |
Pass | | $ | 172,638 | | | $ | 328,712 | | | $ | 461,955 | | | $ | 29,401 | | | $ | 52,568 | | | $ | 71,590 | | | $ | 4,902 | | | $ | 1,121,766 | | | | | | | | | | | | | | | | | | | | | |
Special mention | | | 493 | | | | 1,925 | | | | 6,934 | | | | - | | | | 1,335 | | | | - | | | | - | | | | 10,687 | | | | | | | | | | | | | | | | | | | | | |
Classified | | | 655 | | | | 3,145 | | | | 1,758 | | | | - | | | | 1,540 | | | | - | | | | 143 | | | | 7,241 | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 173,786 | | | $ | 333,782 | | | $ | 470,647 | | | $ | 29,401 | | | $ | 55,443 | | | $ | 71,590 | | | $ | 5,045 | | | $ | 1,139,694 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - | | | | | | | | | | | | | | | | | | | | | |
|
| | Residential | | | | | | | Residential | | | Other Loans to | | | | | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | | | |
| | Mortgage | | | HELOC | | | Construction | | | Individuals | | | | | | | | | | | | | | | Consumer | | | | | | | | | | | | | | | | | | | | | |
Pass | | $ | 202,214 | | | $ | 147,893 | | | $ | 55,290 | | | $ | 22,445 | | | | | | | | | | | | | | | $ | 427,842 | | | | | | | | | | | | | | | | | | | | | |
Special mention | | | 1,802 | | | | 6,122 | | | | 227 | | | | 99 | | | | | | | | | | | | | | | | 8,250 | | | | | | | | | | | | | | | | | | | | | |
Classified | | | 1,134 | | | | 1,282 | | | | 365 | | | | 42 | | | | | | | | | | | | | | | | 2,823 | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 205,150 | | | $ | 155,297 | | | $ | 55,882 | | | $ | 22,586 | | | | | | | | | | | | | | | $ | 438,915 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 1,578,609 | | | | | | | | | | | | | | | | | | | | | |
|
| | As of December 31, 2013 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Commercial | | | | | | | CRE-Investor | | | AC&D- | | | AC&D- lots, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | and | | | CRE-Owner | | | Income | | | 1-4 family | | | land, & | | | | | | | Other | | | Total | | | | | | | | | | | | | | | | | | | | | |
| | Industrial | | | Occupied | | | Producing | | | construction | | | development | | | AC&D- CRE | | | Commercial | | | Commercial | | | | | | | | | | | | | | | | | | | | | |
Pass | | $ | 120,037 | | | $ | 260,472 | | | $ | 373,464 | | | $ | 19,959 | | | $ | 60,332 | | | $ | 56,759 | | | $ | 3,587 | | | $ | 894,610 | | | | | | | | | | | | | | | | | | | | | |
Special mention | | | 1,692 | | | | 6,126 | | | | 3,628 | | | | - | | | | 2,802 | | | | - | | | | 150 | | | | 14,398 | | | | | | | | | | | | | | | | | | | | | |
Classified | | | 671 | | | | 983 | | | | 5,095 | | | | - | | | | 2,455 | | | | - | | | | 112 | | | | 9,316 | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 122,400 | | | $ | 267,581 | | | $ | 382,187 | | | $ | 19,959 | | | $ | 65,589 | | | $ | 56,759 | | | $ | 3,849 | | | $ | 918,324 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - | | | | | | | | | | | | | | | | | | | | | |
|
| | Residential | | | | | | | Residential | | | Other Loans to | | | | | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | | | |
| | Mortgage | | | HELOC | | | Construction | | | Individuals | | | | | | | | | | | | | | | Consumer | | | | | | | | | | | | | | | | | | | | | |
Pass | | $ | 169,519 | | | $ | 137,626 | | | $ | 39,824 | | | $ | 18,301 | | | | | | | | | | | | | | | $ | 365,270 | | | | | | | | | | | | | | | | | | | | | |
Special mention | | | 1,864 | | | | 2,893 | | | | 766 | | | | 488 | | | | | | | | | | | | | | | | 6,011 | | | | | | | | | | | | | | | | | | | | | |
Classified | | | 1,993 | | | | 3,235 | | | | 231 | | | | 6 | | | | | | | | | | | | | | | | 5,465 | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 173,376 | | | $ | 143,754 | | | $ | 40,821 | | | $ | 18,795 | | | | | | | | | | | | | | | $ | 376,746 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 1,295,070 | | | | | | | | | | | | | | | | | | | | | |
|
Aging Analysis of Accruing and Non-Accruing Loans - The Company considers a loan to be past due or delinquent when the terms of the contractual obligation are not met by the borrower. PCI loans are included as a single category in the table below as management believes, regardless of their age, there is a lower likelihood of aggregate loss related to these loan pools. Additionally, PCI loans are discounted to allow for the accretion of income on a level yield basis over the life of the loan based on expected cash flows. Regardless of accruing status, the associated discount on these loan pools results in income recognition. The following presents, by class, an aging analysis of the Company’s accruing and non-accruing loans as of December 31, 2014 and 2013. |
|
| | 30-59 | | | 60-89 | | | Past Due | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Days | | | Days | | | 90 Days | | | PCI | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Past Due | | | Past Due | | | or More | | | Loans | | | Current | | | Total Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 123 | | | $ | 18 | | | $ | 73 | | | $ | 5,552 | | | $ | 168,020 | | | $ | 173,786 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | - | | | | - | | | | 1,616 | | | | 30,554 | | | | 301,612 | | | | 333,782 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | - | | | | - | | | | 571 | | | | 43,866 | | | | 426,210 | | | | 470,647 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - 1-4 family construction | | | - | | | | - | | | | - | | | | 514 | | | | 28,887 | | | | 29,401 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | - | | | | - | | | | - | | | | 13,660 | | | | 41,783 | | | | 55,443 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - CRE | | | - | | | | - | | | | - | | | | 112 | | | | 71,478 | | | | 71,590 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 40 | | | | 143 | | | | - | | | | 1,187 | | | | 3,675 | | | | 5,045 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 163 | | | | 161 | | | | 2,260 | | | | 95,445 | | | | 1,041,665 | | | | 1,139,694 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 57 | | | | 68 | | | | 1,058 | | | | 28,730 | | | | 175,237 | | | | 205,150 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 343 | | | | 60 | | | | 228 | | | | 1,734 | | | | 152,932 | | | | 155,297 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 157 | | | | - | | | | 341 | | | | 6,574 | | | | 48,810 | | | | 55,882 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 29 | | | | 1 | | | | 41 | | | | 758 | | | | 21,757 | | | | 22,586 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 586 | | | | 129 | | | | 1,668 | | | | 37,796 | | | | 398,736 | | | | 438,915 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 749 | | | $ | 290 | | | $ | 3,928 | | | $ | 133,241 | | | $ | 1,440,401 | | | $ | 1,578,609 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 96 | | | $ | 52 | | | $ | 149 | | | $ | 5,737 | | | $ | 116,366 | | | $ | 122,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 418 | | | | - | | | | 209 | | | | 35,760 | | | | 231,194 | | | | 267,581 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 655 | | | | - | | | | 3,161 | | | | 56,996 | | | | 321,375 | | | | 382,187 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - 1-4 family construction | | | - | | | | - | | | | - | | | | - | | | | 19,959 | | | | 19,959 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 48 | | | | - | | | | 292 | | | | 22,699 | | | | 42,550 | | | | 65,589 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - CRE | | | - | | | | - | | | | - | | | | 121 | | | | 56,638 | | | | 56,759 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | - | | | | 112 | | | | - | | | | 137 | | | | 3,600 | | | | 3,849 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 1,217 | | | | 164 | | | | 3,811 | | | | 121,450 | | | | 791,682 | | | | 918,324 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | - | | | | 32 | | | | 1,340 | | | | 32,826 | | | | 139,178 | | | | 173,376 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 248 | | | | 160 | | | | 698 | | | | 1,402 | | | | 141,246 | | | | 143,754 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 25 | | | | - | | | | 66 | | | | 6,920 | | | | 33,810 | | | | 40,821 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 14 | | | | 11 | | | | - | | | | 1,189 | | | | 17,581 | | | | 18,795 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 287 | | | | 203 | | | | 2,104 | | | | 42,337 | | | | 331,815 | | | | 376,746 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 1,504 | | | $ | 367 | | | $ | 5,915 | | | $ | 163,787 | | | $ | 1,123,497 | | | $ | 1,295,070 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Impaired Loans - All classes of loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impaired loans may include all classes of nonaccrual loans and loans modified in a TDR. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the rate implicit in the original loan agreement or at the fair value of collateral if repayment is expected solely from the collateral. Additionally, a portion of the Company’s qualitative factors accounts for potential impairment on loans generally less than $150 thousand. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. |
|
During the year ended December 31, 2014, the Company’s quarterly cash flow analyses on PCI loan pools indicated net recovery of impairment of $209 thousand. These impairments are in a single covered PCI loan pool and are in the CRE – investor income producing loan segment. During the year ended December 31, 2013, the Company’s quarterly cash flow analyses indicated net recovery of impairment of $607 thousand. These impairments are in a single covered PCI loan pool and are in the CRE – investor income producing loan segment. These amounts are not included in the tables below. |
|
| | 31-Dec-14 | | | 31-Dec-13 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Unpaid | | | Related | | | | | | | Unpaid | | | Related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Recorded | | | Principal | | | Allowance For | | | Recorded | | | Principal | | | Allowance For | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Investment | | | Balance | | | Loan Losses | | | Investment | | | Balance | | | Loan Losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loans with No Related Allowance Recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 47 | | | $ | 126 | | | $ | - | | | $ | 183 | | | $ | 473 | | | $ | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | - | | | | - | | | | - | | | | 1,815 | | | | 1,955 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | - | | | | - | | | | - | | | | 30 | | | | 47 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | - | | | | - | | | | - | | | | 1,888 | | | | 4,475 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | - | | | | - | | | | - | | | | 150 | | | | 167 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 47 | | | | 126 | | | | - | | | | 4,066 | | | | 7,117 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 322 | | | | 420 | | | | - | | | | 3,080 | | | | 3,926 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 363 | | | | 499 | | | | - | | | | 2,478 | | | | 2,855 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 322 | | | | 376 | | | | - | | | | 26 | | | | 39 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | - | | | | - | | | | - | | | | 58 | | | | 62 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 1,007 | | | | 1,295 | | | | - | | | | 5,642 | | | | 6,882 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with no related allowance recorded | | $ | 1,054 | | | $ | 1,421 | | | $ | - | | | $ | 9,708 | | | $ | 13,999 | | | $ | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loans with an Allowance Recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 329 | | | $ | 348 | | | $ | 44 | | | $ | 82 | | | $ | 90 | | | $ | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 2,889 | | | | 2,982 | | | | 18 | | | | 87 | | | | 88 | | | | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 1,271 | | | | 1,357 | | | | 57 | | | | 3,186 | | | | 3,673 | | | | 527 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 1,073 | | | | 1,187 | | | | 11 | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 143 | | | | 159 | | | | 19 | | | | 112 | | | | 112 | | | | 18 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 5,705 | | | | 6,033 | | | | 149 | | | | 3,467 | | | | 3,963 | | | | 573 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 2,203 | | | | 2,241 | | | | 138 | | | | 1,433 | | | | 1,485 | | | | 167 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 2,118 | | | | 2,534 | | | | 382 | | | | 536 | | | | 587 | | | | 137 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 47 | | | | 72 | | | | 4 | | | | 40 | | | | 42 | | | | 7 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 90 | | | | 90 | | | | 12 | | | | 2 | | | | 4 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 4,458 | | | | 4,937 | | | | 536 | | | | 2,011 | | | | 2,118 | | | | 311 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with an allowance recorded | | $ | 10,163 | | | $ | 10,970 | | | $ | 685 | | | $ | 5,478 | | | $ | 6,081 | | | $ | 884 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 376 | | | $ | 474 | | | $ | 44 | | | $ | 265 | | | $ | 563 | | | $ | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 2,889 | | | | 2,982 | | | | 18 | | | | 1,902 | | | | 2,043 | | | | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 1,271 | | | | 1,357 | | | | 57 | | | | 3,216 | | | | 3,720 | | | | 527 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 1,073 | | | | 1,187 | | | | 11 | | | | 1,888 | | | | 4,475 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 143 | | | | 159 | | | | 19 | | | | 262 | | | | 279 | | | | 18 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 5,752 | | | | 6,159 | | | | 149 | | | | 7,533 | | | | 11,080 | | | | 573 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 2,525 | | | | 2,661 | | | | 138 | | | | 4,513 | | | | 5,411 | | | | 167 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 2,481 | | | | 3,033 | | | | 382 | | | | 3,014 | | | | 3,442 | | | | 137 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 369 | | | | 448 | | | | 4 | | | | 66 | | | | 81 | | | | 7 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 90 | | | | 90 | | | | 12 | | | | 60 | | | | 66 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 5,465 | | | | 6,232 | | | | 536 | | | | 7,653 | | | | 9,000 | | | | 311 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 11,217 | | | $ | 12,391 | | | $ | 685 | | | $ | 15,186 | | | $ | 20,080 | | | $ | 884 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The average recorded investment and interest income recognized on impaired loans, by class, for the years ended December 31, 2014 and 2013 is shown in the table below. |
|
| | 31-Dec-14 | | | 31-Dec-13 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Average | | | Interest | | | Average | | | Interest | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Recorded | | | Income | | | Recorded | | | Income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Investment | | | Recognized | | | Investment | | | Recognized | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loans with No Related | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance Recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 382 | | | $ | 19 | | | $ | 276 | | | $ | 5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 2,090 | | | | 54 | | | | 2,108 | | | | 106 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 620 | | | | 24 | | | | 980 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 1,034 | | | | 98 | | | | 2,978 | | | | 202 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 60 | | | | 4 | | | | 158 | | | | 9 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 4,186 | | | | 199 | | | | 6,500 | | | | 322 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 1,689 | | | | 31 | | | | 2,688 | | | | 57 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 1,390 | | | | 19 | | | | 1,513 | | | | 20 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 80 | | | | - | | | | 20 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 23 | | | | 1 | | | | 64 | | | | 4 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 3,182 | | | | 51 | | | | 4,285 | | | | 81 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with no related allowance recorded | | $ | 7,368 | | | $ | 250 | | | $ | 10,785 | | | $ | 403 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loans with an Allowance Recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 224 | | | $ | - | | | $ | 487 | | | $ | 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 695 | | | | 20 | | | | 47 | | | | 12 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 1,052 | | | | 9 | | | | 2,829 | | | | 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - 1-4 family construction | | | 19 | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 243 | | | | 16 | | | | 50 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 176 | | | | 8 | | | | 22 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 2,409 | | | | 53 | | | | 3,435 | | | | 16 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 1,825 | | | | 42 | | | | 1,282 | | | | 33 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 1,597 | | | | 29 | | | | 920 | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 267 | | | | 1 | | | | 24 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 42 | | | | 4 | | | | 1 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 3,731 | | | | 76 | | | | 2,227 | | | | 34 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with an allowance recorded | | $ | 6,140 | | | $ | 129 | | | $ | 5,662 | | | $ | 50 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 606 | | | $ | 19 | | | $ | 763 | | | $ | 7 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 2,785 | | | | 74 | | | | 2,155 | | | | 118 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 1,672 | | | | 33 | | | | 3,809 | | | | 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - 1-4 family construction | | | 19 | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 1,277 | | | | 114 | | | | 3,028 | | | | 202 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 236 | | | | 12 | | | | 180 | | | | 9 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 6,595 | | | | 252 | | | | 9,935 | | | | 338 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 3,514 | | | | 73 | | | | 3,970 | | | | 90 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 2,987 | | | | 48 | | | | 2,433 | | | | 21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 347 | | | | 1 | | | | 44 | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 65 | | | | 5 | | | | 65 | | | | 4 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 6,913 | | | | 127 | | | | 6,512 | | | | 115 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 13,508 | | | $ | 379 | | | $ | 16,447 | | | $ | 453 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
During the year ended December 31, 2014, the Company recognized $379 thousand of interest income with respect to impaired loans, specifically accruing TDRs, within the period the loans were impaired. During the year ended December 31, 2013, the Company recognized $453 thousand of interest income with respect to impaired loans, specifically accruing TDRs, within the period the loans were impaired. During the year ended December 31, 2012, the Company recognized $150 thousand of interest income with respect to impaired loans, specifically accruing TDRs, within the period the loans were impaired. |
|
Nonaccrual and Past Due Loans - It is the general policy of the Company to place a loan on nonaccrual status when there is probable loss or when there is reasonable doubt that all principal will be collected, or when it is over 90 days past due. At December 31, 2014 and 2013, there were $30 thousand and $17 thousand, respectively, in loans past due 90 days or more and accruing interest. These loans are secured and considered fully collectible at December 31, 2014 and 2013. The recorded investment in nonaccrual loans at December 31, 2014 and 2013 follows: |
|
| | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 329 | | | $ | 200 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - owner-occupied | | | 1,616 | | | | 209 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | 680 | | | | 3,192 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | 7 | | | | 292 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | - | | | | 112 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans | | | 2,632 | | | | 4,005 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 1,549 | | | | 2,007 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 1,022 | | | | 2,348 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 341 | | | | 66 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other loans to individuals | | | 41 | | | | 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total consumer loans | | | 2,953 | | | | 4,423 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total nonaccrual loans | | $ | 5,585 | | | $ | 8,428 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest income included in the results of operations for 2014, 2013 and 2012, with respect to loans that subsequently went to nonaccrual, totaled $158 thousand, $310 thousand and $157 thousand, respectively. If interest on these loans had been accrued in accordance with their original terms, interest income would have increased by $1.1 million, $3.0 million and $540 thousand for the years ended December 31, 2014, 2013 and 2012, respectively. |
|
Purchased Credit-Impaired Loans – PCI loans had an unpaid principal balance of $165.7 million and a carrying value of $133.2 million at December 31, 2014. PCI loans had an unpaid principal balance of $197.0 million and a carrying value of $163.8 million at December 31, 2013. PCI loans represented 5.6% and 8.4% of total assets at December 31, 2014 and 2013, respectively. Determining the fair value of the PCI loans required the Company to estimate cash flows expected to result from those loans and to discount those cash flows at appropriate rates of interest and taking into account prepayment assumptions. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans and is called the accretable yield. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and is called the nonaccretable difference. In accordance with GAAP, there was no carry-over of previously established allowance for loan losses from acquired companies. |
|
In conjunction with the Provident Community acquisition, the PCI loan portfolio was accounted for at fair value as follows: |
|
| | 1-May-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contractual principal and interest at acquisition | | $ | 46,177 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccretable difference | | | (10,153 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Expected cash flows at acquisition | | | 36,024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretable yield | | | (5,589 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basis in PCI loans at acquisition - estimated fair value | | $ | 30,435 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
In conjunction with the Citizens South acquisition, the PCI loan portfolio was accounted for at fair value as follows: |
|
| | 1-Oct-12 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contractual principal and interest at acquisition | | $ | 294,283 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccretable difference | | | (47,941 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Expected cash flows at acquisition | | | 246,342 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretable yield | | | (37,724 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basis in PCI loans at acquisition - estimated fair value | | $ | 208,618 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
A summary of changes in the accretable yield for PCI loans for the years ended December 31, 2014, 2013 and 2012 follows. |
|
Accretable yield table | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretable yield, beginning of year | | $ | 39,249 | | | $ | 42,734 | | | $ | 14,264 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Addition from the Citizens South acquisition | | | - | | | | - | | | | 37,724 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Addition from the Provident Community acquisition | | | 5,589 | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income | | | (15,766 | ) | | | (14,903 | ) | | | (7,462 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reclassification of nonaccretable difference due to improvement in expected cash flows | | | 9,886 | | | | 12,143 | | | | 479 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other changes, net | | | 1,582 | | | | (725 | ) | | | (2,271 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretable yield, end of year | | $ | 40,540 | | | $ | 39,249 | | | $ | 42,734 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Troubled Debt Restructuring - In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a TDR. Management strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. All loan modifications are made on a case-by-case basis. |
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The Company allocated $373 thousand and $565 thousand, respectively, of specific reserves to customers whose loan terms have been modified in a TDR as of December 31, 2014 and December 31, 2013. As of December 31, 2014, the Company had 18 TDR loans totaling $4.1 million, of which $841 thousand are nonaccrual loans. As of December 31, 2013, the Company had 11 TDR loans totaling $8.2 million, of which $4.4 million are nonaccrual loans. |
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The following table presents a breakdown of the types of concessions made by loan class during the twelve-month period ended December 31, 2014 and 2013: |
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| | Year ended | | | Year ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
31-Dec-14 | 31-Dec-13 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of loans | | | Pre-Modification Outstanding Recorded Investment | | | Post-Modification Outstanding Recorded Investment | | | Number of loans | | | Pre-Modification Outstanding Recorded Investment | | | Post-Modification Outstanding Recorded Investment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Below market interest rate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D- lots, land & development | | | 1 | | | $ | 184 | | | $ | 184 | | | | - | | | $ | - | | | $ | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | - | | | | - | | | | - | | | | 1 | | | | 43 | | | | 43 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1 | | | | 184 | | | | 184 | | | | 1 | | | | 43 | | | | 43 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended payment terms: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 1 | | | $ | 10 | | | $ | 10 | | | | - | | | $ | - | | | $ | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AC&D - lots, land, & development | | | - | | | | - | | | | - | | | | 1 | | | | 962 | | | | 962 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other commercial | | | 1 | | | | 143 | | | | 143 | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential mortgage | | | 1 | | | | 657 | | | | 657 | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
HELOC | | | 1 | | | | 174 | | | | 174 | | | | 1 | | | | 1,250 | | | | 1,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 4 | | | | 984 | | | | 984 | | | | 2 | | | | 2,212 | | | | 2,212 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 5 | | | $ | 1,168 | | | $ | 1,168 | | | | 3 | | | $ | 2,255 | | | $ | 2,255 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Commercial TDRs - Commercial TDRs (including commercial and industrial, commercial real estate, AC&D and other commercial loans) often result from a workout where an existing commercial loan is restructured and a concession is given. These workouts may involve lengthening the amortization period of the amortized principal beyond market terms, or reducing the interest rate below market terms for the original remaining life of the loan. In the case of extended amortization, this concession reduces the minimum monthly payment and increases the balloon payment at the end of the term of the loan. Other concessions can potentially involve forgiveness of principal, collateral concessions, or reduction of accrued interest. The impact of the TDR on the allowance for loan losses is based on the changes in borrower payment performance rather than just the TDR classification. All TDRs are designated as impaired loans. TDRs, like other impaired loans, are measured based on discounted cash flows, comparing the modified loan to pre-modified terms or, if the loan is deemed to be collateral dependent, collateral value less anticipated selling costs. TDRs having a book balance of less than $150,000, along with other impaired loans of similar size, are measured in a pooled approach utilizing loss given default and probability of default parameters. TDRs may remain in accruing status if the borrower remains less than 90 days past due per the restructured loan terms and no loss is expected. A borrower may be considered for removal from TDR status if it is no longer experiencing financial difficulties and can qualify for new loan terms which do not represent a concession, subject to the normal underwriting standards and processes for similar extensions of credit. As of December 31, 2014, the Company has one commercial TDR with a reduced interest rate and two commercial TDRs where an extension of maturities was granted. All commercial TDRs are paying according to the terms of the modification as of December 31, 2014. |
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Consumer TDRs - Consumer TDRs (including residential mortgage, HELOC, residential construction and other consumer loans) often result from a workout where an existing loan is modified and a concession is given. These workouts typically lengthen the amortization period of the amortized principal beyond market terms or reduce the interest rate below market terms. The impact of the TDR on the allowance for loan losses is based on the changes in borrower payment performance rather than the TDR classification. TDRs like other impaired loans are measured based on discounted cash flows or collateral value, less anticipated selling costs, of the modified loan using pre-modified interest rates. As of December 31, 2014, the Company has two consumer TDRs where an extension of maturities was granted. All consumer TDRs are paying according to the terms of the modification as of December 31, 2014. |
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The following table presents loans modified as TDRs within the twelve months ended December 31, 2014 and 2013, and for which there was a payment default during the twelve months ended December 31, 2014 and 2013: |
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| | Twelve months ended | | | Twelve months ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
31-Dec-14 | 31-Dec-13 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Recorded | | | Number of | | | Recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
loans | Investment | loans | Investment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Below market interest rate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CRE - investor income producing | | | - | | | $ | - | | | | 1 | | | $ | 3,610 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | - | | | | - | | | | 1 | | | | 3,610 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended payment terms: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential construction | | | 1 | | | $ | 173 | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 1 | | | | 173 | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 1 | | | $ | 173 | | | | 1 | | | $ | 3,610 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The Company does not deem a TDR to be successful until it has been re-established as an accruing loan. The following table presents the successes and failures of the types of modifications indicated within the 12 months ended December 31, 2014 and 2013: |
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| | Twelve Months Ended December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Paid in full | | | Paying as restructured | | | Foreclosure/Default | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Recorded | | | Number of | | | Recorded | | | Number of | | | Recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
loans | Investment | loans | Investment | loans | Investment | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Below market interest rate | | | - | | | $ | - | | | | 1 | | | $ | 222 | | | | - | | | $ | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended payment terms | | | - | | | | - | | | | 3 | | | | 970 | | | | 2 | | | | 338 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | - | | | $ | - | | | | 4 | | | $ | 1,192 | | | | 2 | | | $ | 338 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | Twelve Months Ended December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Paid in full | | | Paying as restructured | | | Foreclosure/Default | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Recorded | | | Number of | | | Recorded | | | Number of | | | Recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
loans | Investment | loans | Investment | loans | Investment | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Below market interest rate | | | 2 | | | $ | 164 | | | | 4 | | | $ | 2,108 | | | | 1 | | | $ | 3,116 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Extended payment terms | | | 2 | | | | 438 | | | | 6 | | | | 2,993 | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 4 | | | $ | 602 | | | | 10 | | | $ | 5,101 | | | | 1 | | | $ | 3,116 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Related Party Loans – From time to time, the Company engages in loan transactions with its directors, executive officers and their related interests (collectively referred to as “related parties”). Such loans are made in the ordinary course of business and on substantially the same terms and collateral as those for comparable transactions prevailing at the time and do not involve more than the normal risk of collectability or present other unfavorable features. A summary of activity in loans to related parties is as follows: |
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Loans to Directors, Executive Officers and Their Related Interests |
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| | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, beginning of year | | $ | 17,247 | | | $ | 4,184 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Disbursements | | | 2,369 | | | | 16,037 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Repayments | | | (5,576 | ) | | | (2,974 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance, end of year | | $ | 14,040 | | | $ | 17,247 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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At December 31, 2014, the Company had pre-approved but unused lines of credit totaling $3.2 million to related parties. |