Loans and the Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2013 |
Receivables [Abstract] | |
Loans and the Allowance for Credit Losses | NOTE 4. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES |
The following table presents the recorded investment in loans by category, net of deferred loan fees and costs of $2.6 million and $2.5 million at September 30, 2013 and December 31, 2012, respectively: |
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(unaudited, in thousands) | | September 30, | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | $ | 217,036 | | | $ | 193,004 | | | | | | | | | | | | | | | | | | | | | | | | | |
Improved property | | | 1,650,746 | | | | 1,665,341 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total commercial real estate | | | 1,867,782 | | | | 1,858,345 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Commercial and industrial | | | 544,202 | | | | 478,025 | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 879,703 | | | | 793,702 | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity | | | 283,488 | | | | 277,226 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 261,363 | | | | 280,464 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total portfolio loans | | | 3,836,538 | | | | 3,687,762 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Loans held for sale | | | 6,601 | | | | 21,903 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total loans | | $ | 3,843,139 | | | $ | 3,709,665 | | | | | | | | | | | | | | | | | | | | | | | | | |
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The following tables summarize changes in the allowance for credit losses applicable to each category of the loan portfolio: |
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| | Allowance for Credit Losses By Category | |
For the Nine Months Ended September 30, 2013 and 2012 |
(unaudited, in thousands) | | Commercial | | | Commercial | | | Commercial | | | Residential | | | Home | | | Consumer | | | Deposit | | | Total | |
Real Estate - | Real Estate - | & Industrial | Real Estate | Equity | Overdraft |
Land and | Improved | | | | |
Construction | Property | | | | |
Balance at December 31, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | $ | 3,741 | | | $ | 23,614 | | | $ | 9,326 | | | $ | 7,182 | | | $ | 2,458 | | | $ | 5,557 | | | $ | 821 | | | $ | 52,699 | |
Allowance for loan commitments | | | 27 | | | | 25 | | | | 215 | | | | 6 | | | | 49 | | | | 19 | | | | — | | | | 341 | |
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Total beginning allowance for credit losses | | | 3,768 | | | | 23,639 | | | | 9,541 | | | | 7,188 | | | | 2,507 | | | | 5,576 | | | | 821 | | | | 53,040 | |
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Provision for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Provision for loan losses | | | 1,179 | | | | 3,066 | | | | (561 | ) | | | 459 | | | | (61 | ) | | | 1,457 | | | | 373 | | | | 5,912 | |
Provision for loan commitments | | | 57 | | | | (1 | ) | | | (64 | ) | | | — | | | | 37 | | | | 1 | | | | — | | | | 30 | |
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Total provision for credit losses | | | 1,236 | | | | 3,065 | | | | (625 | ) | | | 459 | | | | (24 | ) | | | 1,458 | | | | 373 | | | | 5,942 | |
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Charge-offs | | | (526 | ) | | | (5,651 | ) | | | (1,264 | ) | | | (2,092 | ) | | | (508 | ) | | | (3,018 | ) | | | (666 | ) | | | (13,725 | ) |
Recoveries | | | 125 | | | | 482 | | | | 407 | | | | 250 | | | | 108 | | | | 887 | | | | 197 | | | | 2,456 | |
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Net charge-offs | | | (401 | ) | | | (5,169 | ) | | | (857 | ) | | | (1,842 | ) | | | (400 | ) | | | (2,131 | ) | | | (469 | ) | | | (11,269 | ) |
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Balance at September 30, 2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | 4,519 | | | | 21,511 | | | | 7,908 | | | | 5,799 | | | | 1,997 | | | | 4,883 | | | | 725 | | | | 47,342 | |
Allowance for loan commitments | | | 84 | | | | 24 | | | | 151 | | | | 6 | | | | 86 | | | | 20 | | | | — | | | | 371 | |
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Total ending allowance for credit losses | | $ | 4,603 | | | $ | 21,535 | | | $ | 8,059 | | | $ | 5,805 | | | $ | 2,083 | | | $ | 4,903 | | | $ | 725 | | | $ | 47,713 | |
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Balance at December 31, 2011: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | $ | 4,842 | | | $ | 24,748 | | | $ | 11,414 | | | $ | 5,638 | | | $ | 1,962 | | | $ | 5,410 | | | $ | 796 | | | $ | 54,810 | |
Allowance for loan commitments | | | 74 | | | | 21 | | | | 323 | | | | 4 | | | | 33 | | | | 13 | | | | — | | | | 468 | |
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Total beginning allowance for credit losses | | | 4,916 | | | | 24,769 | | | | 11,737 | | | | 5,642 | | | | 1,995 | | | | 5,423 | | | | 796 | | | | 55,278 | |
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Provision for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Provision for loan losses | | | 2,089 | | | | 4,573 | | | | 2,619 | | | | 3,629 | | | | 1,192 | | | | 2,330 | | | | 222 | | | | 16,654 | |
Provision for loan commitments | | | (11 | ) | | | 5 | | | | (65 | ) | | | — | | | | 12 | | | | 7 | | | | — | | | | (52 | ) |
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Total provision for credit losses | | | 2,078 | | | | 4,578 | | | | 2,554 | | | | 3,629 | | | | 1,204 | | | | 2,337 | | | | 222 | | | | 16,602 | |
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Charge-offs | | | (3,777 | ) | | | (5,749 | ) | | | (3,862 | ) | | | (3,296 | ) | | | (898 | ) | | | (2,732 | ) | | | (641 | ) | | | (20,955 | ) |
Recoveries | | | 591 | | | | 755 | | | | 288 | | | | 288 | | | | 17 | | | | 804 | | | | 224 | | | | 2,967 | |
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Net charge-offs | | | (3,186 | ) | | | (4,994 | ) | | | (3,574 | ) | | | (3,008 | ) | | | (881 | ) | | | (1,928 | ) | | | (417 | ) | | | (17,988 | ) |
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Balance at September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | | 3,745 | | | | 24,327 | | | | 10,459 | | | | 6,259 | | | | 2,273 | | | | 5,812 | | | | 601 | | | | 53,476 | |
Allowance for loan commitments | | | 63 | | | | 26 | | | | 258 | | | | 4 | | | | 45 | | | | 20 | | | | — | | | | 416 | |
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Total ending allowance for credit losses | | $ | 3,808 | | | $ | 24,353 | | | $ | 10,717 | | | $ | 6,263 | | | $ | 2,318 | | | $ | 5,832 | | | $ | 601 | | | $ | 53,892 | |
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The following tables present the allowance for credit losses and recorded investments in loans by category: |
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| | Allowance for Credit Losses and Recorded Investment in Loans | |
(unaudited, in thousands) | | Commercial | | | Commercial | | | Commercial | | | Residential | | | Home | | | Consumer | | | Overdraft | | | Total | |
Real Estate- | Real Estate- | and Industrial | Real Estate | Equity |
Land and | Improved | | | |
Construction | Property | | | |
September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loans individually evaluated for impairment | | $ | 849 | | | $ | 464 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,313 | |
Allowance for loans collectively evaluated for impairment | | | 3,670 | | | | 21,047 | | | | 7,908 | | | | 5,799 | | | | 1,997 | | | | 4,883 | | | | 725 | | | | 46,029 | |
Allowance for loan commitments | | | 84 | | | | 24 | | | | 151 | | | | 6 | | | | 86 | | | | 20 | | | | — | | | | 371 | |
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Total allowance for credit losses | | $ | 4,603 | | | $ | 21,535 | | | $ | 8,059 | | | $ | 5,805 | | | $ | 2,083 | | | $ | 4,903 | | | $ | 725 | | | $ | 47,713 | |
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Portfolio loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment (1) | | $ | 1,948 | | | $ | 2,801 | | | $ | 208 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,957 | |
Collectively evaluated for impairment | | | 215,088 | | | | 1,647,945 | | | | 543,994 | | | | 879,703 | | | | 283,488 | | | | 261,363 | | | | — | | | | 3,831,581 | |
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Total portfolio loans | | $ | 217,036 | | | $ | 1,650,746 | | | $ | 544,202 | | | $ | 879,703 | | | $ | 283,488 | | | $ | 261,363 | | | $ | — | | | $ | 3,836,538 | |
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December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loans individually evaluated for impairment | | $ | 832 | | | $ | 911 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,743 | |
Allowance for loans collectively evaluated for impairment | | | 2,909 | | | | 22,703 | | | | 9,326 | | | | 7,182 | | | | 2,458 | | | | 5,557 | | | | 821 | | | | 50,956 | |
Allowance for loan commitments | | | 27 | | | | 25 | | | | 215 | | | | 6 | | | | 49 | | | | 19 | | | | — | | | | 341 | |
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Total allowance for credit losses | | $ | 3,768 | | | $ | 23,639 | | | $ | 9,541 | | | $ | 7,188 | | | $ | 2,507 | | | $ | 5,576 | | | $ | 821 | | | $ | 53,040 | |
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Portfolio loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment (1) | | $ | 2,545 | | | $ | 6,987 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 9,532 | |
Collectively evaluated for impairment | | | 190,459 | | | | 1,658,354 | | | | 478,025 | | | | 793,702 | | | | 277,226 | | | | 280,464 | | | | — | | | | 3,678,230 | |
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Total portfolio loans | | $ | 193,004 | | | $ | 1,665,341 | | | $ | 478,025 | | | $ | 793,702 | | | $ | 277,226 | | | $ | 280,464 | | | $ | — | | | $ | 3,687,762 | |
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-1 | Commercial loans greater than $1 million that are reported as non-accrual or as a troubled debt restructuring (“TDR”) are individually evaluated for impairment. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
WesBanco maintains an internal loan grading system to reflect the credit quality of commercial loans. Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at the inception of each loan and adjusted thereafter at any time to reflect changes in the risk profile throughout the life of each loan. The primary factors used to determine the risk grade are the reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. This includes an analysis of cash flow available to repay debt, profitability, liquidity, leverage, and overall financial trends. Other factors include management, industry or property type risks, an assessment of secondary sources of repayment such as collateral or guarantees, other terms and conditions of the loan that may increase or reduce its risk, and economic conditions and other external factors that may influence repayment capacity and financial condition. |
Commercial real estate — land and construction consists of loans to finance investments in vacant land, land development, construction of residential housing, and construction of commercial buildings. Commercial real estate — improved property consists of loans for the purchase or refinance of all types of improved owner-occupied and investment properties. Factors that are considered in assigning the risk grade vary depending on the type of property financed. The risk grade assigned to construction and development loans is based on the overall viability of the project, the experience and financial capacity of the developer or builder to successfully complete the project, project specific and market absorption rates and comparable property values, and the amount of pre-sales for residential housing construction or pre-leases for commercial investment property. The risk grade assigned to commercial investment property loans is based primarily on the adequacy of net rental income generated by the property to service the debt, the type, quality, industry and mix of tenants, and the terms of leases, but also considers the overall financial capacity of the investors and their experience in owning and managing investment property. The risk grade assigned to owner-occupied commercial real estate and commercial and industrial loans is based primarily on historical and projected earnings, the adequacy of operating cash flow to service all of the business’ debt, and the capital resources, liquidity and leverage of the business, but also considers the industry in which the business operates, the business’ specific competitive advantages or disadvantages, the quality and experience of management, and external influences on the business such as economic conditions. Other factors that are considered for commercial and industrial loans include the type, quality and marketability of non-real estate collateral and whether the structure of the loan increases or reduces its risk. The type, age, condition, location and any environmental risks associated with a property are also considered for all types of commercial real estate. The overall financial condition and repayment capacity of any guarantors is also evaluated to determine the extent to which they mitigate other risks of the loan. The following descriptions of risk grades apply to commercial real estate and commercial and industrial loans: |
Excellent or minimal risk loans are fully secured by liquid or readily marketable collateral and therefore have virtually no risk of loss. Good or desirable risk loans are extended in the normal course of business to creditworthy borrowers that exhibit a history of positive financial results that are at least comparable to the average for their industry or type of real estate. These loans are expected to perform satisfactorily during most economic cycles and there are no significant external factors that are expected to adversely affect these borrowers more than others in the same industry. Any minor unfavorable characteristics of these loans are outweighed or mitigated by strong positive factors including but not limited to adequate secondary sources of repayment or guarantees. |
Fair or acceptable risk loans have a somewhat higher credit risk profile due to specific weaknesses or uncertainties that could adversely impact repayment capacity. Loans in this category generally warrant additional attention or monitoring, or a more rigid loan structure. These loans represent the maximum level of risk accepted in the normal course of lending. Specific issues that may warrant this grade include financial results that are less favorable than the average for the borrower’s industry or type of real estate, cyclical financial results, loans based on projections that have a reasonable probability of being achieved, start-up businesses, construction projects, and other external factors that indicate a higher level of credit risk. Loans that are underwritten primarily on the basis of the repayment capacity or financial condition of guarantors may also be assigned this grade. |
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Criticized or marginal loans are currently protected but have weaknesses, which, if not corrected, may inadequately protect WesBanco Bank, Inc. (the “Bank”) at some future date. These loans represent an unwarranted credit risk and would generally not be extended in the normal course of lending. Specific issues which may warrant this grade include declining financial results, increased reliance on secondary sources of repayment or guarantor support and adverse external influences that may negatively impact the business or property. |
Substandard and doubtful loans are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current repayment capacity and equity of the borrower or collateral pledged, if any. Substandard loans have one or more well-defined weaknesses that jeopardize their repayment or collection in full. These loans may or may not be reported as non-accrual. Doubtful loans have all the weaknesses inherent to a substandard loan with the added characteristic that full repayment is highly questionable or improbable on the basis of currently existing facts, conditions and collateral values. However, recognition of loss may be deferred if there are reasonably specific pending factors that will reduce the risk if they occur. |
The following tables summarize commercial loans by their assigned risk grade: |
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| | Commerical Loans by Internally Assigned Risk Grade | | | | | | | | | | | | | | | | | |
(unaudited, in thousands) | | Commercial | | | Commercial | | | Commercial | | | Total | | | | | | | | | | | | | | | | | |
Real Estate- | Real Estate- | & Industrial | Commercial | | | | | | | | | | | | | | | | |
Land and | Improved | | Loans | | | | | | | | | | | | | | | | |
Construction | Property | | | | | | | | | | | | | | | | | | |
As of September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Excellent - minimal risk | | $ | — | | | $ | 684 | | | $ | 73,706 | | | $ | 74,390 | | | | | | | | | | | | | | | | | |
Good - desirable risk | | | 32,271 | | | | 716,005 | | | | 184,614 | | | | 932,890 | | | | | | | | | | | | | | | | | |
Fair - acceptable risk | | | 172,558 | | | | 827,814 | | | | 263,033 | | | | 1,263,405 | | | | | | | | | | | | | | | | | |
Criticized - marginal | | | 6,859 | | | | 55,445 | | | | 14,138 | | | | 76,442 | | | | | | | | | | | | | | | | | |
Classified - substandard | | | 5,348 | | | | 50,798 | | | | 8,711 | | | | 64,857 | | | | | | | | | | | | | | | | | |
Classified - doubtful | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | |
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Total | | $ | 217,036 | | | $ | 1,650,746 | | | $ | 544,202 | | | $ | 2,411,984 | | | | | | | | | | | | | | | | | |
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As of December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Excellent - minimal risk | | $ | — | | | $ | 789 | | | $ | 64,255 | | | $ | 65,044 | | | | | | | | | | | | | | | | | |
Good - desirable risk | | | 38,292 | | | | 701,447 | | | | 152,853 | | | | 892,592 | | | | | | | | | | | | | | | | | |
Fair - acceptable risk | | | 136,643 | | | | 826,790 | | | | 242,564 | | | | 1,205,997 | | | | | | | | | | | | | | | | | |
Criticized - marginal | | | 10,573 | | | | 66,906 | | | | 9,298 | | | | 86,777 | | | | | | | | | | | | | | | | | |
Classified - substandard | | | 7,496 | | | | 69,409 | | | | 9,055 | | | | 85,960 | | | | | | | | | | | | | | | | | |
Classified - doubtful | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | |
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Total | | $ | 193,004 | | | $ | 1,665,341 | | | $ | 478,025 | | | $ | 2,336,370 | | | | | | | | | | | | | | | | | |
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Residential real estate, home equity and consumer loans are not assigned internal risk grades other than as required by regulatory guidelines that are based primarily on the age of past due loans. WesBanco primarily evaluates the credit quality of residential real estate, home equity and consumer loans based on repayment performance and historical loss rates. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard in accordance with regulatory guidelines were $14.6 million at September 30, 2013 and $17.9 million at December 31, 2012, of which $2.2 and $4.9 million were accruing, for each period, respectively. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard are not included in the tables above. |
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The following tables summarize the age analysis of all categories of loans: |
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| | Age Analysis of Loans | | | | | |
(unaudited, in thousands) | | Current | | | 30-59 | | | 60-89 | | | 90 Days | | | Total | | | Total Loans | | | 90 Days | | | | | |
Days | Days | or More | Past Due | or More | | | | |
Past Due | Past Due | Past Due | | Past Due and | | | | |
| | | | Accruing (1) | | | | |
As of September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | $ | 213,429 | | | $ | 38 | | | $ | — | | | $ | 3,569 | | | $ | 3,607 | | | $ | 217,036 | | | $ | 248 | | | | | |
Improved property | | | 1,633,805 | | | | 2,211 | | | | 2,850 | | | | 11,880 | | | | 16,941 | | | | 1,650,746 | | | | 541 | | | | | |
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Total commercial real estate | | | 1,847,234 | | | | 2,249 | | | | 2,850 | | | | 15,449 | | | | 20,548 | | | | 1,867,782 | | | | 789 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 539,917 | | | | 435 | | | | 1,801 | | | | 2,049 | | | | 4,285 | | | | 544,202 | | | | 68 | | | | | |
Residential real estate | | | 864,580 | | | | 1,799 | | | | 3,606 | | | | 9,718 | | | | 15,123 | | | | 879,703 | | | | 1,601 | | | | | |
Home equity | | | 279,803 | | | | 1,579 | | | | 491 | | | | 1,615 | | | | 3,685 | | | | 283,488 | | | | 307 | | | | | |
Consumer | | | 257,565 | | | | 2,870 | | | | 436 | | | | 492 | | | | 3,798 | | | | 261,363 | | | | 278 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total portfolio loans | | | 3,789,099 | | | | 8,932 | | | | 9,184 | | | | 29,323 | | | | 47,439 | | | | 3,836,538 | | | | 3,043 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans held for sale | | | 6,601 | | | | — | | | | — | | | | — | | | | — | | | | 6,601 | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 3,795,700 | | | $ | 8,932 | | | $ | 9,184 | | | $ | 29,323 | | | $ | 47,439 | | | $ | 3,843,139 | | | $ | 3,043 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Non-performing loans included above are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-accrual loans | | $ | 10,493 | | | $ | 1,175 | | | $ | 655 | | | $ | 25,837 | | | $ | 27,667 | | | $ | 38,160 | | | | | | | | | |
TDRs accruing interest (1) | | | 14,362 | | | | 85 | | | | 590 | | | | 443 | | | | 1,118 | | | | 15,480 | | | | | | | | | |
| | | | | | | | | | | |
As of December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | $ | 189,072 | | | $ | 1,470 | | | $ | — | | | $ | 2,462 | | | $ | 3,932 | | | $ | 193,004 | | | $ | — | | | | | |
Improved property | | | 1,643,833 | | | | 5,722 | | | | 2,224 | | | | 13,562 | | | | 21,508 | | | | 1,665,341 | | | | 338 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial real estate | | | 1,832,905 | | | | 7,192 | | | | 2,224 | | | | 16,024 | | | | 25,440 | | | | 1,858,345 | | | | 338 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 475,186 | | | | 283 | | | | 412 | | | | 2,144 | | | | 2,839 | | | | 478,025 | | | | 98 | | | | | |
Residential real estate | | | 774,006 | | | | 4,231 | | | | 4,833 | | | | 10,632 | | | | 19,696 | | | | 793,702 | | | | 3,199 | | | | | |
Home equity | | | 274,235 | | | | 1,352 | | | | 197 | | | | 1,442 | | | | 2,991 | | | | 277,226 | | | | 722 | | | | | |
Consumer | | | 273,329 | | | | 4,655 | | | | 1,123 | | | | 1,357 | | | | 7,135 | | | | 280,464 | | | | 937 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total portfolio loans | | | 3,629,661 | | | | 17,713 | | | | 8,789 | | | | 31,599 | | | | 58,101 | | | | 3,687,762 | | | | 5,294 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans held for sale | | | 21,903 | | | | — | | | | — | | | | — | | | | — | | | | 21,903 | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 3,651,564 | | | $ | 17,713 | | | $ | 8,789 | | | $ | 31,599 | | | $ | 58,101 | | | $ | 3,709,665 | | | $ | 5,294 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Non-performing loans included above are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-accrual loans | | $ | 11,724 | | | $ | 591 | | | $ | 1,747 | | | $ | 25,310 | | | $ | 27,648 | | | $ | 39,372 | | | | | | | | | |
TDRs accruing interest (1) | | | 21,665 | | | | 794 | | | | 827 | | | | 995 | | | | 2,616 | | | | 24,281 | | | | | | | | | |
|
-1 | Loans 90 days or more past due and accruing interest exclude TDRs 90 days or more past due and accruing interest. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loans — A loan is considered impaired, based on current information and events, if it is probable that WesBanco will be unable to collect the payments of principal and interest when due according to the contractual terms of the loan agreement. Impaired loans generally included all non-accrual loans and TDRs. |
Loans are generally placed on non-accrual status when they become past due 90 days or more unless they are both well-secured and in the process of collection. Loans may also be placed on non-accrual when full collection of principal is in doubt even if payments on such loans remain current, or may remain on non-accrual if they are 90 days or more past due but subsequently brought current and maintained current for at least six consecutive months. |
Loans are categorized as TDRs when the Bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. |
|
The following tables summarize impaired loans: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Impaired Loans | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | |
(unaudited, in thousands) | | Unpaid | | | Recorded | | | Related | | | Unpaid | | | Recorded | | | Related | | | | | | | | | |
Principal | Investment | Allowance | Principal | Investment | Allowance | | | | | | | | |
Balance (1) | | | Balance (1) | | | | | | | | | | |
With no related specific allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | $ | 3,312 | | | $ | 3,212 | | | $ | — | | | $ | 9,278 | | | $ | 5,577 | | | $ | — | | | | | | | | | |
Improved property | | | 22,643 | | | | 20,572 | | | | — | | | | 27,515 | | | | 24,455 | | | | — | | | | | | | | | |
Commercial and industrial | | | 4,145 | | | | 3,569 | | | | — | | | | 4,546 | | | | 4,019 | | | | — | | | | | | | | | |
Residential real estate | | | 22,000 | | | | 20,294 | | | | — | | | | 22,146 | | | | 20,269 | | | | — | | | | | | | | | |
Home equity | | | 2,764 | | | | 2,527 | | | | — | | | | 2,437 | | | | 2,207 | | | | — | | | | | | | | | |
Consumer | | | 1,553 | | | | 1,318 | | | | — | | | | 1,757 | | | | 1,517 | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans without a specific allowance | | | 56,417 | | | | 51,492 | | | | — | | | | 67,679 | | | | 58,044 | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
With a specific allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | | 1,463 | | | | 1,463 | | | | 849 | | | | 1,627 | | | | 1,627 | | | | 832 | | | | | | | | | |
Improved property | | | 685 | | | | 685 | | | | 464 | | | | 4,098 | | | | 3,982 | | | | 911 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with a specific allowance | | | 2,148 | | | | 2,148 | | | | 1,313 | | | | 5,725 | | | | 5,609 | | | | 1,743 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 58,565 | | | $ | 53,640 | | | $ | 1,313 | | | $ | 73,404 | | | $ | 63,653 | | | $ | 1,743 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) | The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Impaired Loans | |
| | For the Three Months Ended | | | For the Nine Months Ended | |
| | September 30, 2013 | | | September 30, 2012 | | | September 30, 2013 | | | September 30, 2012 | |
(unaudited, in thousands) | | Average | | | Interest | | | Average | | | Interest | | | Average | | | Interest | | | Average | | | Interest | |
Recorded | Income | Recorded | Income | Recorded | Income | Recorded | Income |
Investment | Recognized | Investment | Recognized | Investment | Recognized | Investment | Recognized |
With no related specific allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | $ | 4,181 | | | $ | — | | | $ | 7,865 | | | $ | 21 | | | $ | 5,049 | | | $ | 89 | | | $ | 9,923 | | | $ | 193 | |
Improved Property | | | 22,777 | | | | 92 | | | | 25,636 | | | | 160 | | | | 23,471 | | | | 408 | | | | 29,503 | | | | 442 | |
Commercial and industrial | | | 3,643 | | | | 26 | | | | 5,683 | | | | 37 | | | | 3,884 | | | | 87 | | | | 7,005 | | | | 96 | |
Residential real estate | | | 19,487 | | | | 217 | | | | 13,022 | | | | 64 | | | | 19,872 | | | | 582 | | | | 14,588 | | | | 198 | |
Home equity | | | 2,278 | | | | 20 | | | | 1,008 | | | | 4 | | | | 2,201 | | | | 50 | | | | 1,104 | | | | 6 | |
Consumer | | | 1,361 | | | | 28 | | | | 169 | | | | — | | | | 1,425 | | | | 77 | | | | 221 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans without a specific allowance | | | 53,727 | | | | 383 | | | | 53,383 | | | | 286 | | | | 55,902 | | | | 1,293 | | | | 62,344 | | | | 936 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
With a specific allowance recorded: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | | 1,500 | | | | 6 | | | | 2,211 | | | | 40 | | | | 1,543 | | | | 28 | | | | 3,204 | | | | 40 | |
Improved Property | | | 2,765 | | | | — | | | | 8,040 | | | | 45 | | | | 3,251 | | | | — | | | | 8,239 | | | | 225 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans with a specific allowance | | | 4,265 | | | | 6 | | | | 10,251 | | | | 85 | | | | 4,794 | | | | 28 | | | | 11,443 | | | | 265 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total impaired loans | | $ | 57,992 | | | $ | 389 | | | $ | 63,634 | | | $ | 371 | | | $ | 60,696 | | | $ | 1,321 | | | $ | 73,787 | | | $ | 1,201 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
The following tables present the recorded investment in non-accrual loans and TDRs: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Non-accrual Loans (1) | | | | | | | | | | | | | | | | | | | | | | | | | |
(unaudited, in thousands) | | September 30, | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | $ | 4,675 | | | $ | 4,668 | | | | | | | | | | | | | | | | | | | | | | | | | |
Improved property | | | 18,105 | | | | 18,239 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial real estate | | | 22,780 | | | | 22,907 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 3,014 | | | | 3,387 | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate | | | 10,085 | | | | 11,247 | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity | | | 1,636 | | | | 1,184 | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer | | | 645 | | | | 647 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 38,160 | | | $ | 39,372 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) | Total non-accrual loans include certain loans that are also restructured. Such loans are also set forth in the following table as non-accrual TDRs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | TDRs | | | | | | | | | |
| | September 30, 2013 | | | December 31, 2012 | | | | | | | | | |
(unaudited, in thousands) | | Accruing | | | Non-Accrual | | | Total | | | Accruing | | | Non-accrual | | | Total | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | $ | — | | | $ | 4,056 | | | $ | 4,056 | | | $ | 2,537 | | | $ | 2,935 | | | $ | 5,472 | | | | | | | | | |
Improved property | | | 3,152 | | | | 4,550 | | | | 7,702 | | | | 10,198 | | | | 6,452 | | | | 16,650 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial real estate | | | 3,152 | | | | 8,606 | | | | 11,758 | | | | 12,735 | | | | 9,387 | | | | 22,122 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 555 | | | | 418 | | | | 973 | | | | 632 | | | | 728 | | | | 1,360 | | | | | | | | | |
Residential real estate | | | 10,209 | | | | 3,190 | | | | 13,399 | | | | 9,022 | | | | 4,077 | | | | 13,099 | | | | | | | | | |
Home equity | | | 891 | | | | 384 | | | | 1,275 | | | | 1,022 | | | | 519 | | | | 1,541 | | | | | | | | | |
Consumer | | | 673 | | | | 322 | | | | 995 | | | | 870 | | | | 290 | | | | 1,160 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 15,480 | | | $ | 12,920 | | | $ | 28,400 | | | $ | 24,281 | | | $ | 15,001 | | | $ | 39,282 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TDRs decreased from December 31, 2012 primarily due to principal reductions and loan sales. The increase in the number of TDR modifications and the number of defaults over the prior year resulted from the implementation of a regulatory requirement in December 2012, to include as TDRs mortgage, home equity and consumer loans discharged in bankruptcy. |
As of September 30, 2013, there was one TDR greater than $1.0 million, which was non-accrual, representing $1.5 million or 5.3% of total TDRs, with specific reserves of $0.8 million. The concessions granted in the majority of loans reported as accruing and non-accrual TDRs are extensions of the maturity date or the amortization period, reductions in the interest rate below the prevailing market rate for loans with comparable characteristics, and/or permitting interest-only payments for longer than three months. |
The following tables present details related to loans identified as TDRs during the three and nine months ended September 30, 2013 and 2012, respectively: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | New TDRs (1) | | | | | | | | | |
| | For the Three Months Ended | | | | | | | | | |
| | 30-Sep-13 | | | 30-Sep-12 | | | | | | | | | |
(unaudited, dollars in thousands) | | Number of | | | Pre- | | | Post- | | | Number of | | | Pre- | | | Post- | | | | | | | | | |
Modifications | Modification | Modification | Modifications | Modification | Modification | | | | | | | | |
| Outstanding | Outstanding | | Outstanding | Outstanding | | | | | | | | |
| Recorded | Recorded | | Recorded | Recorded | | | | | | | | |
| Investment | Investment | | Investment | Investment | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | | 1 | | | $ | 66 | | | $ | 65 | | | | — | | | $ | — | | | $ | — | | | | | | | | | |
Improved Property | | | 1 | | | | 49 | | | | 49 | | | | 1 | | | | 1,073 | | | | 917 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial real estate | | | 2 | | | | 115 | | | | 114 | | | | 1 | | | | 1,073 | | | | 917 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 1 | | | | 14 | | | | 14 | | | | — | | | | — | | | | — | | | | | | | | | |
Residential real estate | | | 8 | | | | 307 | | | | 280 | | | | 1 | | | | 323 | | | | 323 | | | | | | | | | |
Home equity | | | 2 | | | | 75 | | | | 52 | | | | — | | | | — | | | | — | | | | | | | | | |
Consumer | | | 9 | | | | 98 | | | | 92 | | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 22 | | | $ | 609 | | | $ | 552 | | | | 2 | | | $ | 1,396 | | | $ | 1,240 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) | Excludes loans that were either paid off or charged-off by period end. The pre-modification balance represents the balance outstanding at the beginning of the period. The post-modification balance represents the outstanding balance at period end. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | New TDRs (1) | | | | | | | | | |
| | For the Nine Months Ended | | | | | | | | | |
| | 30-Sep-13 | | | 30-Sep-12 | | | | | | | | | |
(unaudited, dollars in thousands) | | Number of | | | Pre- | | | Post- | | | Number of | | | Pre- | | | Post- | | | | | | | | | |
Modifications | Modification | Modification | Modifications | Modification | Modification | | | | | | | | |
| Outstanding | Outstanding | | Outstanding | Outstanding | | | | | | | | |
| Recorded | Recorded | | Recorded | Recorded | | | | | | | | |
| Investment | Investment | | Investment | Investment | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | | 2 | | | $ | 366 | | | $ | 359 | | | | 1 | | | $ | 516 | | | $ | 516 | | | | | | | | | |
Improved Property | | | 6 | | | | 568 | | | | 395 | | | | 9 | | | | 2,741 | | | | 2,162 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial real estate | | | 8 | | | | 934 | | | | 754 | | | | 10 | | | | 3,257 | | | | 2,678 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 7 | | | | 164 | | | | 161 | | | | 2 | | | | 40 | | | | 37 | | | | | | | | | |
Residential real estate | | | 24 | | | | 2,180 | | | | 2,094 | | | | 7 | | | | 883 | | | | 896 | | | | | | | | | |
Home equity | | | 3 | | | | 91 | | | | 64 | | | | — | | | | — | | | | — | | | | | | | | | |
Consumer | | | 13 | | | | 143 | | | | 120 | | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 55 | | | $ | 3,512 | | | $ | 3,193 | | | | 19 | | | $ | 4,180 | | | $ | 3,611 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) | Excludes loans that were either paid off or charged-off by period end. The pre-modification balance represents the balance outstanding at the beginning of the period. The post-modification balance represents the outstanding balance at period end. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following tables summarize TDRs which defaulted (defined as past due 90 days or more) during the three and nine months ended September 30, 2013 and 2012 that were restructured within the last twelve months prior to September 30, 2013 and 2012: |
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| | Defaulted TDRs (1) | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | September 30, 2012 | | | | | | | | | | | | | | | | | |
(unaudited, dollars in thousands) | | Number of | | | Recorded | | | Number of | | | Recorded | | | | | | | | | | | | | | | | | |
Defaults | Investment | Defaults | Investment | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | | — | | | $ | — | | | | — | | | $ | — | | | | | | | | | | | | | | | | | |
Improved property | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | |
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Total commercial real estate | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | |
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Commercial and industrial | | | — | | | | — | | | | 1 | | | | 45 | | | | | | | | | | | | | | | | | |
Residential real estate | | | 8 | | | | 451 | | | | — | | | | — | | | | | | | | | | | | | | | | | |
Home equity | | | 1 | | | | 20 | | | | — | | | | — | | | | | | | | | | | | | | | | | |
Consumer | | | 3 | | | | 37 | | | | — | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 12 | | | $ | 508 | | | | 1 | | | $ | 45 | | | | | | | | | | | | | | | | | |
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(1) | Excludes loans that were either charged-off or cured by period end. The recorded investment is as of September 30, 2013 and 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | Defaulted TDRs (1) | | | | | | | | | | | | | | | | | |
| | For the Nine Months Ended | | | | | | | | | | | | | | | | | |
| | September 30, 2013 | | | September 30, 2012 | | | | | | | | | | | | | | | | | |
(unaudited, dollars in thousands) | | Number of | | | Recorded | | | Number of | | | Recorded | | | | | | | | | | | | | | | | | |
Defaults | Investment | Defaults | Investment | | | | | | | | | | | | | | | | |
Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land and construction | | | — | | | $ | — | | | | — | | | $ | — | | | | | | | | | | | | | | | | | |
Improved property | | | 1 | | | | 45 | | | | 8 | | | | 2,018 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial real estate | | | 1 | | | | 45 | | | | 8 | | | | 2,018 | | | | | | | | | | | | | | | | | |
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Commercial and industrial | | | 2 | | | | 293 | | | | 2 | | | | 211 | | | | | | | | | | | | | | | | | |
Residential real estate | | | 24 | | | | 1,624 | | | | — | | | | — | | | | | | | | | | | | | | | | | |
Home equity | | | 5 | | | | 107 | | | | — | | | | — | | | | | | | | | | | | | | | | | |
Consumer | | | 3 | | | | 37 | | | | — | | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | | 35 | | | $ | 2,106 | | | | 10 | | | $ | 2,229 | | | | | | | | | | | | | | | | | |
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(1) | Excludes loans that were either charged-off or cured by period end. The recorded investment is as of September 30, 2013 and 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TDRs that defaulted during the nine month period and that were restructured within the last twelve months represented 7.4% of the total TDR balance at September 30, 2013. These loans are placed on non-accrual status unless they are both well-secured and in the process of collection. At September 30, 2013, only two loans in the tables above were accruing interest. |
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The following table summarizes other real estate owned and repossessed assets included in other assets: |
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(unaudited, in thousands) | | September 30, | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | |
2013 | 2012 | | | | | | | | | | | | | | | | | | | | | | | | |
Other real estate owned | | $ | 4,871 | | | $ | 5,741 | | | | | | | | | | | | | | | | | | | | | | | | | |
Repossessed assets | | | 313 | | | | 247 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total other real estate owned and repossessed assets | | $ | 5,184 | | | $ | 5,988 | | | | | | | | | | | | | | | | | | | | | | | | | |
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