Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 7. Loans and the Allowance for Loan and Lease Losses Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan and lease losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Loan segments are defined as a group of loans and leases, which share similar initial measurement attributes, risk characteristics, and methods for monitoring and assessing credit risk. Management has determined that the Company has five segments of loans and leases: commercial (including lease financing), commercial real estate, commercial construction, residential real estate (including home equity) and consumer. Interest income on commercial, commercial real estate, commercial construction and residential loans are discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. A loan is moved to nonaccrual status in accordance with the Company’s policy, typically after 90 days of non-payment. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The policy of the Company is to generally grant commercial, residential and consumer loans to residents and businesses within its market area. The borrowers’ abilities to repay their obligations are dependent upon various factors including the borrowers’ income and net worth, cash flows generated by the borrowers’ underlying collateral, value of the underlying collateral, and priority of the lender’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the control of the Company. The Company is therefore subject to risk of loss. The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and that adequate provisions for loan and lease losses are provided for all known and inherent risks. Collateral and/or personal guarantees are required for a large majority of the Company’s loans. Allowance for Loan and Lease Losses The allowance for loan and lease losses is a valuation allowance for probable incurred credit losses. Losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan and lease loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans, for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”) and classified as impaired. As part of the evaluation of impaired loans, the Company individually reviews for impairment all non-homogeneous loans internally classified as substandard or below. Generally, smaller impaired non-homogeneous loans and impaired homogeneous loans are collectively evaluated for impairment. The Bank has defined its population of impaired loans to include all loans on nonaccrual status; all troubled debt restructuring loans; and all loans (above an established dollar threshold of $250,000) internally classified as “Special Mention” or below that require a specific reserve. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan and lease losses. The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience, the primary factor, is determined by loan class and is based on the actual loss history experienced by the Bank over an actual three year rolling calculation. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. This actual loss experience is supplemented with the exogenous factor adjustments based on the risks present for each loan category. These exogenous factors (nine total) include consideration of the following: concentrations of credit; delinquency & nonaccrual trends; economic & business conditions including evaluation of the national and regional economies and industries with significant loan concentrations; external factors including legal, regulatory or competitive pressures that may impact the loan portfolio; changes in the experience, ability, or size of the lending staff, management, or board of directors that may impact the loan portfolio; changes in underwriting standards, collection procedures, charge-off practices, or other changes in lending policies and procedures that may impact the loan portfolio; loss and recovery trends; changes in portfolio size and mix; and trends in problem loans. Purchased Credit-Impaired Loans The Company purchases groups of loans in conjunction with mergers, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan and lease losses. After acquisition, losses are recognized by an increase in the allowance for loan and lease losses. Such purchased credit impaired loans are accounted for individually. The Company estimates the amount and timing of expected cash flows for each loan and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference). Over the life of the loan, expected cash flows continue to be estimated. If the present value of expected cash flows is less than the carrying amount, a loss is recorded. If the present value of expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. Composition of Loan Portfolio The following table sets forth the composition of the Company’s loan portfolio, including net deferred loan fees, at September 30, 2015 and December 31, 2014: September 30, December 31, 2014 (in thousands) Commercial $ 569,605 $ 499,816 Commercial real estate 1,873,714 1,634,510 Commercial construction 283,623 167,359 Residential real estate 225,158 234,967 Consumer 3,569 2,879 Gross loans 2,955,669 2,539,531 Net deferred loan fees (2,288 ) (890 ) Total loans receivable $ 2,953,381 $ 2,538,641 At September 30, 2015 and December 31, 2014, loan balances of approximately $1.6 billion and $1.0 billion, respectively, were pledged to secure borrowings from the Federal Home Loan Bank of New York. Purchased Credit-Impaired Loans The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is as follows at September 30, 2015 and December 31, 2014. September 30, December 31, 2014 (in thousands) Commercial $ 7,046 $ 7,199 Commercial real estate 1,799 1,816 Residential real estate 323 806 Total carrying amount $ 9,168 $ 9,821 For those purchased loans disclosed above, the Company did not increase the allowance for loan and lease losses for the nine months ended September 30, 2015. The accretable yield, or income expected to be collected, on the purchased loans disclosed above for the three and nine months ended September 30, 2015 is as follows (in thousands): Three Months Three Months Nine Months Beginning balance $ 5,013 $ 4,678 $ 4,805 New loans purchased — — — Accretion of income (76 ) (53 ) (180 ) Reclassifications from nonaccretable difference — — — Disposals — — — Ending balance $ 4,937 $ 4,625 $ 4,625 The following table presents information about the recorded investment in loan receivables on nonaccrual status by segment at September 30, 2015 and December 31, 2014: Loans Receivable on Nonaccrual Status September 30, December 31, 2014 (in thousands) Commercial $ 5,051 $ 616 Commercial real estate 3,467 8,197 Commercial construction 1,479 — Residential real estate 2,891 2,796 Total loans receivable on nonaccrual status $ 12,888 $ 11,609 Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified impaired loans. The Company continuously monitors the credit quality of its loans receivable. In addition to its internal staff, the Company utilizes the services of a third party loan review firm to rate the credit quality of its loans receivable. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified “Pass” are deemed to possess average to superior credit quality, requiring no more than normal attention. Assets classified as “Special Mention” have generally acceptable credit quality yet possess higher risk characteristics/circumstances than satisfactory assets. Such conditions include strained liquidity, slow pay, stale financial statements, or other conditions that require more stringent attention from the lending staff. These conditions, if not corrected, may weaken the loan quality or inadequately protect the Company’s credit position at some future date. Assets are classified “Substandard” if the asset has a well-defined weakness that requires management’s attention to a greater degree than for loans classified special mention. Such weakness, if left uncorrected, could possibly result in the compromised ability of the loan to perform to contractual requirements. An asset is classified as “Doubtful” if it is inadequately protected by the net worth and/or paying capacity of the obligor or of the collateral, if any, that secures the obligation. Assets classified as doubtful include assets for which there is a “distinct possibility” that a degree of loss will occur if the inadequacies are not corrected. The following table presents information, excluding net deferred loan fees, about the Company’s loan credit quality at September 30, 2015 and December 31, 2014: September 30, 2015 Pass Special Mention Substandard Doubtful Total (in thousands) Commercial $ 476,142 $ 80,516 $ 12,696 $ 251 $ 569,605 Commercial real estate 1,827,412 25,189 21,113 — 1,873,714 Commercial construction 282,144 — 1,479 — 283,623 Residential real estate 222,370 — 2,788 — 225,158 Consumer 3,482 — 87 — 3,569 Total loans $ 2,811,550 $ 105,705 $ 38,163 $ 251 $ 2,955,669 December 31, 2014 Pass Special Mention Substandard Doubtful Total (in thousands) Commercial $ 481,638 $ 3,686 $ 14,203 $ 289 $ 499,816 Commercial real estate 1,596,606 14,140 23,764 — 1,634,510 Commercial construction 165,880 1,479 — — 167,359 Residential real estate 230,772 — 4,195 — 234,967 Consumer 2,778 — 101 — 2,879 Total loans $ 2,477,674 $ 19,305 $ 42,263 $ 289 $ 2,539,531 The following table provides an analysis of the impaired loans, by loan segment, at September 30, 2015 and December 31, 2014: September 30, 2015 Recorded Unpaid Related No related allowance recorded (in thousands) Commercial $ 690 735 Commercial real estate 4,830 5,233 Commercial construction 1,479 1,479 Residential real estate 3,164 3,518 Consumer 95 87 Total $ 10,258 11,052 With an allowance recorded Commercial $ 79,724 $ 79,494 $ 3,001 Total Commercial $ 80,414 $ 80,229 $ 3,001 Commercial real estate 4,830 5,233 — Commercial construction 1,479 1,479 — Residential real estate 3,164 3,518 — Consumer 95 87 — Total $ 89,982 $ 90,546 $ 3,001 December 31, 2014 Recorded Unpaid Related No related allowance recorded (in thousands) Commercial $ 481 $ 527 Commercial real estate 5,890 6,587 Residential real estate 3,072 3,407 Consumer 109 101 Total $ 9,552 $ 10,622 With an allowance recorded Commercial $ 387 $ 390 $ 111 Commercial real estate 3,520 3,520 151 Total $ 3,907 $ 3,910 $ 262 Total Commercial $ 868 $ 917 $ 111 Commercial real estate 9,410 10,107 151 Residential real estate 3,072 3,407 — Consumer 109 101 — Total $ 13,459 $ 14,532 $ 262 The following table provides an analysis related to the average recorded investment and interest income recognized on impaired loans by segment as of and for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Average Interest Average Interest Average Interest Average Interest Impaired loans with no related allowance recorded: Commercial $ 712 $ — $ 897 $ — $ 707 $ — $ 778 $ 30 Commercial real estate 4,869 15 5,046 31 4,905 46 5,313 74 Commercial construction 1,479 — — — 1,479 — — 31 Residential real estate 3,221 7 1,975 — 3,251 12 2,044 5 Consumer 100 1 106 2 102 4 106 — Total $ 10,381 23 $ 8,024 33 $ 10,444 $ 62 $ 8,241 $ 140 Impaired loans with an allowance recorded: Commercial $ 79,732 $ 722 $ — $ — $ 45,747 $ 1,206 $ — $ — Commercial real estate — — 3,600 37 — — 3,600 122 Total $ 79,732 $ 722 $ 3,600 $ 37 $ 45,747 $ 1,206 $ 3,600 $ 122 Total impaired loans: Commercial $ 80,444 $ 712 $ 897 $ — $ 46,454 $ 1,206 $ 778 $ 30 Commercial real estate 4,869 15 8,646 68 4,905 46 8,913 196 Commercial construction 1,479 — — — 1,479 — — — Residential mortgage 3,221 7 1,975 — 3,251 12 2,044 31 Consumer 100 1 106 2 102 4 106 5 Total $ 90,113 $ 745 $ 11,624 $ 70 56,191 $ 1,268 $ 11,841 $ 262 Included in impaired loans at September 30, 2015, December 31, 2014 and September 30, 2014 are loans that are deemed troubled debt restructurings. The recorded investment in loans include accrued interest receivable and other capitalized costs such as real estate taxes paid on behalf of the borrower and loan origination fees, net, when applicable. Cash basis interest and interest income recognized on accrual basis approximate each other. The following table provides an analysis of the aging of the recorded investment of loans, excluding net deferred loan fees that are past due at September 30, 2015 and December 31, 2014 by segment: Aging Analysis September 30, 2015 30-59 Days Past Due 60-89 Days Past Due 90 Days or Total Past Due Current Total Loans Receivable Loans Receivable 90 Days or Greater Accruing (in thousands) Commercial $ — $ 9,726 $ 5,020 $ 14,746 $ 554,859 $ 569,605 $ — Commercial real estate 782 1,365 3,232 5,379 1,868,335 1,873,714 — Commercial construction — — 1,479 1,479 282,144 283,623 — Residential real estate 922 1,308 3,244 5,474 219,684 225,158 268 Consumer — — — — 3,569 3,569 Total $ 1,704 $ 12,399 $ 12,975 $ 27,078 $ 2,928,591 $ 2,955,669 $ 268 Aging Analysis December 31, 2014 30-59 Days 60-89 Days 90 Days or Total Past Current Total Loans Loans (in thousands) Commercial $ 6,060 $ — $ 662 $ 6,722 $ 493,094 $ 499,816 $ 45 Commercial real estate 4,937 638 5,961 11,535 1,622,975 1,634,510 609 Commercial construction — — — — 167,359 167,359 — Residential real estate 1,821 210 3,200 5,231 229,736 234,967 557 Consumer 30 1 — 31 2,848 2,879 — Total $ 12,848 $ 849 $ 9,823 $ 23,520 $ 2,516,011 $ 2,539,531 $ 1,211 The following table details, at the period presented, the amount of loans receivable that are evaluated individually, and collectively, for impairment (excluding net deferred loan fees), acquired, and the related portion of the allowance for loan and lease losses that are allocated to each loan portfolio segment: September 30, 2015 Commercial Commercial real estate Commercial construction Residential real estate Consumer Unallocated Total (in thousands) Allowance for loan and lease losses Individually evaluated for impairment $ 3,001 $ — $ — $ — $ — $ — $ 3,001 Collectively evaluated for impairment 4,122 10,274 2,646 1,012 4 474 18,532 Acquired with deteriorated credit quality — — — — — — — Total $ 7,123 $ 10,274 $ 2,646 $ 1,012 $ 4 $ 474 $ 21,533 Loans receivable Individually evaluated for impairment $ 80,414 $ 4,830 $ 1,479 $ 3,164 $ 95 $ — $ 89,982 Collectively evaluated for impairment 482,145 1,867,085 282,144 221,671 3,474 — 2,856,519 Acquired with deteriorated credit quality 7,046 1,799 — 323 — — 9,168 Total $ 569,605 $ 1,873,714 $ 283,623 $ 225,158 $ 3,569 $ — $ 2,955,669 The table above includes approximately $0.9 billion of acquired loans for the period ended September 30, 2015 reported as collectively evaluated for impairment. The following table, at the period presented, details the amount of loans that are evaluated individually, and collectively, for impairment (excluding net deferred loan fees), acquired, and the related portion of the allowance for loan and lease losses that are allocated to each loan portfolio segment: December 31, 2014 Commercial Commercial real estate Commercial construction Residential real estate Consumer Unallocated Total (in thousands) Allowance for loan and lease losses Individually evaluated for impairment $ 111 $ 151 $ — $ — $ — $ — $ 262 Collectively evaluated for impairment 2,972 7,648 1,239 1,113 7 919 13,898 Acquired with deteriorated credit quality — — — — — — — Total $ 3,083 $ 7,799 $ 1,239 $ 1,113 $ 7 $ 919 $ 14,160 Loans receivable Individually evaluated for impairment $ 868 $ 9,410 $ — $ 3,072 $ 109 $ — $ 13,459 Collectively evaluated for impairment 491,749 1,623,384 167,359 231,809 2,770 — 2,516,251 Acquired with deteriorated credit quality 7,199 1,816 — 806 — — 9,821 Total $ 499,816 $ 1,634,510 $ 167,359 $ 234,967 $ 2,879 $ — $ 2,539,531 The table above includes approximately $1.2 billion of acquired loans for the period ended December 31, 2014 reported as collectively evaluated for impairment. The Company’s allowance for loan and lease losses is analyzed quarterly. Many factors are considered, including growth in the portfolio, delinquencies, nonaccrual loan levels, and other factors inherent in the extension of credit. There have been no material changes to the allowance for loan and lease losses methodology as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. A summary of the activity in the allowance for loan and lease losses is as follows: Three Months Ended September 30, 2015 Commercial Commercial real estate Commercial construction Residential real estate Consumer Unallocated Total (in thousands) Balance at June 30, 2015 $ 4,633 $ 9,195 $ 1,945 $ 1,161 $ 7 $ 535 $ 17,480 Charge-offs — (124 ) — — — — (124 ) Recoveries 2 — — — — — 2 Provision 2,488 1,203 701 (149 ) (3 ) (61 ) 4,175 Balance at September 30, 2015 $ 7,123 $ 10,274 $ 2,646 $ 1,012 $ 4 $ 474 $ 21,533 Three Months Ended September 30, 2014 Commercial Commercial real estate Commercial construction Residential real estate Consumer Unallocated Total (in thousands) Balance at June 30, 2014 $ 2,412 $ 5,741 $ 504 $ 1,011 $ 63 $ 1,364 $ 10,825 Charge-offs — — — — (18 ) — (18 ) Recoveries — — — — 11 — 11 Provision 336 1,281 20 41 (51 ) (327 ) 1,300 Balance at September 30, 2014 $ 2,478 $ 7,022 $ 524 $ 1,052 $ 5 $ 1,037 $ 12,118 Nine Months Ended September 30, 2015 Commercial Commercial real estate Commercial construction Residential real estate Consumer Unallocated Total (in thousands) Balance at December 31, 2014 $ 3,083 $ 7,799 $ 1,239 $ 1,113 $ 7 $ 919 $ 14,160 Charge-offs (100 ) (406 ) — — (13 ) — (519 ) Recoveries 12 327 — 2 1 — 342 Provision 4,128 2,554 1,407 (103 ) 9 (445 ) 7,550 Balance at September 30, 2015 $ 7,123 $ 10,274 $ 2,646 $ 1,012 $ 4 $ 474 $ 21,533 Nine Months Ended September 30, 2014 Commercial Commercial real estate Commercial construction Residential real estate Consumer Unallocated Total (in thousands) Balance at December 31, 2013 $ 1,698 $ 5,746 $ 362 $ 990 $ 146 $ 1,391 $ 10,333 Charge-offs (333 ) — — (108 ) (7 ) — (448 ) Recoveries — — — 11 13 — 24 Provision 1,113 1,276 162 159 (147 ) (354 ) 2,209 Balance at September 30, 2014 $ 2,478 $ 7,022 $ 524 $ 1,052 $ 5 $ 1,037 $ 12,118 Trouble Debt Restructurings At September 30, 2015, there were 0 commitments to lend additional funds to borrowers whose loans were on nonaccrual status or were contractually past due in excess of 90 days and still accruing interest, or whose terms have been modified in troubled debt restructurings. The policy of the Company generally is to grant commercial, mortgage and consumer loans to residents and businesses within its market area. The borrowers’ abilities to repay their obligations are dependent upon various factors, including the borrowers’ income and net worth, cash flows generated by the borrowers’ underlying collateral, value of the underlying collateral, and priority of the lender’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the control of the Company. The Company is therefore subject to risk of loss. The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and that adequate provisions for loan and lease losses are provided for all known and inherent risks. Collateral and/or personal guarantees are required for virtually all loans. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. Loans modified in a troubled debt restructuring totaled a recorded investment of $77.1 million at September 30, 2015, of which $1.1 million were on nonaccrual status. The remaining loans modified were current and have complied with the terms of their restructure agreement. At December 31, 2014, loans modified in a troubled debt restructuring totaled $2.8 million, of which $1.0 million were on nonaccrual status. The remaining loans modified were current at the time of the restructuring and have complied with the terms of their restructure agreement. The Company has allocated $2.0 million in specific allocations with respect to loans whose loan terms had been modified in troubled debt restructurings as of September 30, 2015. There were no specific allocations with respect to troubled debt restructurings as of September 30, 2014. The TDRs presented as of September 30, 2015 increased the allowance for loan and lease losses by $2.0 million for the three and nine months ended September 30, 2015. The TDRs presented as of September 30, 2014 did not increase the allowance for loan and lease losses for the three and nine months ended September 30, 2014. The $2.0 million in specific allocations associated with taxi medallion lending referred to above was calculated based on the present value of estimated cash flows, including contractual debt interest service through maturity and principal repayments based on the fair value of the collateral, and excludes any consideration for the personal guarantees of borrowers, which provides an additional source of repayment but cannot be relied upon. The valuation per corporate medallion used for the calculation at September 30, 2015 was $814,000. A specific allocation was required at September 30, 2015 due to a decline in the valuation of taxi medallions from June 30, 2015, when there was no specific allocation required. The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ended September 30, 2015 (dollars in thousands): Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Loans Investment Investment Troubled debt restructurings: Commercial 47 $ 75,363 $ 75,363 Commercial real estate — — — Commercial construction — — — Residential real estate — — — Consumer — — — Total 47 $ 75,363 $ 75,363 The increase in TDRs was due to loans secured by New York City taxi medallions that were modified during the second quarter of 2015. The modifications consisted of a deferral of principal amortization from approximately 25-30 year amortization to interest-only. There was no extension of the loans’ contractual maturity dates, there was no forgiveness of principle, and the interest rates on these loans were increased from approximately 3%-3.25% to 3.75%. These loans were accruing prior to modification and remained in accrual status post-modification. There were 0 charge-offs in connection with a loan modification at the time of modification during the nine months ended September 30, 2015. There were 0 troubled debt restructurings for which there was a payment default within twelve months following the modification during the nine months ended September 30, 2015. The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ended September 30, 2014 (dollars in thousands): Pre-Modification Post-Modification Outstanding Outstanding Number of Recorded Recorded Loans Investment Investment Troubled debt restructurings: Commercial 1 $ 672 $ 315 Commercial real estate — — — Commercial construction — — — Residential real estate 1 53 51 Consumer — — — Total 2 $ 725 $ 366 The Company had a $333,000 charge-off in connection with a loan modification at the time of modification during the nine months ended September 30, 2014. There were 0 troubled debt restructurings for which there was a payment default within twelve months following the modification during the nine months ended September 30, 2014. |