Loans and the Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2014 |
Receivables [Abstract] | ' |
Loans and the Allowance for Loan Losses | ' |
Loans and the Allowance for Loan Losses |
(In Thousands, Except Number of Loans) |
The following is a summary of loans as of the dates presented: |
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| September 30, | | December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 450,559 | | | $ | 468,963 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Lease financing | 5,564 | | | 53 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – construction | 197,066 | | | 161,436 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – 1-4 family mortgage | 1,221,579 | | | 1,208,233 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – commercial mortgage | 1,991,052 | | | 1,950,572 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Installment loans to individuals | 91,806 | | | 91,762 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Gross loans | 3,957,626 | | | 3,881,019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Unearned income | (187 | ) | | (1 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans, net of unearned income | 3,957,439 | | | 3,881,018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Allowance for loan losses | (44,569 | ) | | (47,665 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loans | $ | 3,912,870 | | | $ | 3,833,353 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Past Due and Nonaccrual Loans |
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, the recognition of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Consumer and other retail loans are typically charged-off no later than the time the loan is 120 days past due. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Loans may be placed on nonaccrual regardless of whether or not such loans are considered past due. All interest accrued for the current year, but not collected, for loans that are placed on nonaccrual or charged-off is reversed against interest income. The interest on these 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 following table provides an aging of past due and nonaccrual loans, segregated by class, as of the dates presented: |
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| Accruing Loans | | Nonaccruing Loans | | |
| 30-89 Days | | 90 Days | | Current | | Total | | 30-89 Days | | 90 Days | | Current | | Total | | Total |
Past Due | or More | Loans | Loans | Past Due | or More | Loans | Loans | Loans |
| Past Due | | | | Past Due | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 1,056 | | | $ | 599 | | | $ | 446,907 | | | $ | 448,562 | | | $ | 650 | | | $ | 953 | | | $ | 394 | | | $ | 1,997 | | | $ | 450,559 | |
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Lease financing | — | | | — | | | 5,564 | | | 5,564 | | | — | | | — | | | — | | | — | | | 5,564 | |
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Real estate – construction | 237 | | | 281 | | | 194,900 | | | 195,418 | | | — | | | 1,648 | | | — | | | 1,648 | | | 197,066 | |
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Real estate – 1-4 family mortgage | 6,739 | | | 5,248 | | | 1,193,594 | | | 1,205,581 | | | 208 | | | 6,197 | | | 9,593 | | | 15,998 | | | 1,221,579 | |
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Real estate – commercial mortgage | 7,966 | | | 11,381 | | | 1,937,174 | | | 1,956,521 | | | 2,641 | | | 20,803 | | | 11,087 | | | 34,531 | | | 1,991,052 | |
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Installment loans to individuals | 250 | | | 22 | | | 91,431 | | | 91,703 | | | — | | | 90 | | | 13 | | | 103 | | | 91,806 | |
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Unearned income | — | | | — | | | (187 | ) | | (187 | ) | | — | | | — | | | — | | | — | | | (187 | ) |
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Total | $ | 16,248 | | | $ | 17,531 | | | $ | 3,869,383 | | | $ | 3,903,162 | | | $ | 3,499 | | | $ | 29,691 | | | $ | 21,087 | | | $ | 54,277 | | | $ | 3,957,439 | |
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December 31, 2013 | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 2,067 | | | $ | 607 | | | $ | 463,521 | | | $ | 466,195 | | | $ | 138 | | | $ | 1,959 | | | $ | 671 | | | $ | 2,768 | | | $ | 468,963 | |
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Lease financing | — | | | — | | | 53 | | | 53 | | | — | | | — | | | — | | | — | | | 53 | |
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Real estate – construction | 664 | | | — | | | 159,124 | | | 159,788 | | | — | | | 1,648 | | | — | | | 1,648 | | | 161,436 | |
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Real estate – 1-4 family mortgage | 10,168 | | | 2,206 | | | 1,179,703 | | | 1,192,077 | | | 1,203 | | | 6,041 | | | 8,912 | | | 16,156 | | | 1,208,233 | |
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Real estate – commercial mortgage | 8,870 | | | 1,286 | | | 1,888,745 | | | 1,898,901 | | | 966 | | | 37,439 | | | 13,266 | | | 51,671 | | | 1,950,572 | |
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Installment loans to individuals | 706 | | | 88 | | | 90,880 | | | 91,674 | | | — | | | 80 | | | 8 | | | 88 | | | 91,762 | |
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Unearned income | — | | | — | | | (1 | ) | | (1 | ) | | — | | | — | | | — | | | — | | | (1 | ) |
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Total | $ | 22,475 | | | $ | 4,187 | | | $ | 3,782,025 | | | $ | 3,808,687 | | | $ | 2,307 | | | $ | 47,167 | | | $ | 22,857 | | | $ | 72,331 | | | $ | 3,881,018 | |
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Restructured loans that are not performing in accordance with their restructured terms that are either contractually 90 days past due or placed on nonaccrual status are reported as nonperforming loans. Restructured loans contractually 90 days past due or more totaled $0 at December 31, 2013. This balance increased to $1,872 in restructured loans contractually 90 days past due or more at September 30, 2014. The outstanding balance of restructured loans on nonaccrual status was $12,709 and $10,078 at September 30, 2014 and December 31, 2013, respectively. |
Impaired Loans |
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impairment is measured on a loan-by-loan basis for commercial, consumer and construction loans above a minimum dollar amount threshold by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are evaluated collectively for impairment. When the ultimate collectability of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal. Once the recorded balance has been reduced to zero, future cash receipts are applied to interest income, to the extent any interest has been foregone, and then they are recorded as recoveries of any amounts previously charged-off. For impaired loans, a specific reserve is established to adjust the carrying value of the loan to its estimated net realizable value. |
Impaired loans recognized in conformity with Financial Accounting Standards Board Accounting Standards Codification Topic ("ASC") 310, “Receivables” (“ASC 310”), segregated by class, were as follows as of the dates presented: |
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| Unpaid | | Recorded | | Recorded | | Total | | Related | | | | | | | | | | | | | | | | |
Contractual | Investment | Investment | Recorded | Allowance | | | | | | | | | | | | | | | | |
Principal | With | With No | Investment | | | | | | | | | | | | | | | | | |
Balance | Allowance | Allowance | | | | | | | | | | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 5,513 | | | $ | 349 | | | $ | 2,383 | | | $ | 2,732 | | | $ | 229 | | | | | | | | | | | | | | | | | |
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Real estate – construction | 2,723 | | | — | | | 1,768 | | | 1,768 | | | 48 | | | | | | | | | | | | | | | | | |
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Real estate – 1-4 family mortgage | 31,657 | | | 15,576 | | | 8,440 | | | 24,016 | | | 2,316 | | | | | | | | | | | | | | | | | |
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Real estate – commercial mortgage | 105,441 | | | 30,921 | | | 32,373 | | | 63,294 | | | 10,681 | | | | | | | | | | | | | | | | | |
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Installment loans to individuals | 433 | | | 50 | | | 56 | | | 106 | | | — | | | | | | | | | | | | | | | | | |
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Total | $ | 145,767 | | | $ | 46,896 | | | $ | 45,020 | | | $ | 91,916 | | | $ | 13,274 | | | | | | | | | | | | | | | | | |
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December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 6,575 | | | $ | 743 | | | $ | 2,043 | | | $ | 2,786 | | | $ | 260 | | | | | | | | | | | | | | | | | |
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Real estate – construction | 2,447 | | | — | | | 1,648 | | | 1,648 | | | — | | | | | | | | | | | | | | | | | |
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Real estate – 1-4 family mortgage | 42,868 | | | 25,374 | | | 8,542 | | | 33,916 | | | 7,353 | | | | | | | | | | | | | | | | | |
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Real estate – commercial mortgage | 108,963 | | | 30,624 | | | 38,517 | | | 69,141 | | | 7,036 | | | | | | | | | | | | | | | | | |
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Installment loans to individuals | 620 | | | 183 | | | 77 | | | 260 | | | 1 | | | | | | | | | | | | | | | | | |
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Totals | $ | 161,473 | | | $ | 56,924 | | | $ | 50,827 | | | $ | 107,751 | | | $ | 14,650 | | | | | | | | | | | | | | | | | |
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The following table presents the average recorded investment and interest income recognized on impaired loans for the periods presented: |
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| Three Months Ended | | Three Months Ended | | | | | | | | | | | | | | | | | | | | |
| 30-Sep-14 | | 30-Sep-13 | | | | | | | | | | | | | | | | | | | | |
| Average | | Interest | | Average | | Interest | | | | | | | | | | | | | | | | | | | | |
Recorded | Income | Recorded | Income | | | | | | | | | | | | | | | | | | | | |
Investment | Recognized | Investment | Recognized(1) | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 4,167 | | | $ | 160 | | | $ | 5,183 | | | $ | 4 | | | | | | | | | | | | | | | | | | | | | |
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Real estate – construction | 1,997 | | | 96 | | | 1,650 | | | — | | | | | | | | | | | | | | | | | | | | | |
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Real estate – 1-4 family mortgage | 26,378 | | | 808 | | | 32,274 | | | 158 | | | | | | | | | | | | | | | | | | | | | |
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Real estate – commercial mortgage | 74,648 | | | 3,110 | | | 75,312 | | | 379 | | | | | | | | | | | | | | | | | | | | | |
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Installment loans to individuals | 141 | | | 13 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 107,331 | | | $ | 4,187 | | | $ | 114,419 | | | $ | 541 | | | | | | | | | | | | | | | | | | | | | |
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-1 | Includes interest income recognized using the cash-basis method of income recognition of $0. No interest income was recognized using the cash-basis method of income recognition during the three months ended September 30, 2014. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Nine Months Ended | | Nine Months Ended | | | | | | | | | | | | | | | | | | | | |
| 30-Sep-14 | | 30-Sep-13 | | | | | | | | | | | | | | | | | | | | |
| Average | | Interest | | Average | | Interest | | | | | | | | | | | | | | | | | | | | |
Recorded | Income | Recorded | Income | | | | | | | | | | | | | | | | | | | | |
Investment | Recognized | Investment | Recognized(1) | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 4,399 | | | $ | 165 | | | $ | 5,123 | | | $ | 4 | | | | | | | | | | | | | | | | | | | | | |
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Real estate – construction | 2,023 | | | 98 | | | 1,650 | | | — | | | | | | | | | | | | | | | | | | | | | |
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Real estate – 1-4 family mortgage | 27,122 | | | 843 | | | 33,181 | | | 449 | | | | | | | | | | | | | | | | | | | | | |
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Real estate – commercial mortgage | 80,402 | | | 3,174 | | | 75,997 | | | 845 | | | | | | | | | | | | | | | | | | | | | |
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Installment loans to individuals | 147 | | | 13 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | |
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Total | $ | 114,093 | | | $ | 4,293 | | | $ | 115,951 | | | $ | 1,298 | | | | | | | | | | | | | | | | | | | | | |
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-1 | Includes interest income recognized using the cash-basis method of income recognition of $0. No interest income was recognized using the cash-basis method of income recognition during the nine months ended September 30, 2014. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Restructured Loans |
Restructured loans are those for which concessions have been granted to the borrower due to a deterioration of the borrower’s financial condition and which are performing in accordance with the new terms. Such concessions may include reduction in interest rates or deferral of interest or principal payments. In evaluating whether to restructure a loan, management analyzes the long-term financial condition of the borrower, including guarantor and collateral support, to determine whether the proposed concessions will increase the likelihood of repayment of principal and interest. |
The following table presents restructured loans segregated by class as of the dates presented: |
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| Number of | | Pre- | | Post- | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | Modification | Modification | | | | | | | | | | | | | | | | | | | | | | | | | |
| Outstanding | Outstanding | | | | | | | | | | | | | | | | | | | | | | | | | |
| Recorded | Recorded | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment | Investment | | | | | | | | | | | | | | | | | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | — | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – construction | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – 1-4 family mortgage | 32 | | | 6,739 | | | 5,165 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – commercial mortgage | 16 | | | 11,686 | | | 10,439 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Installment loans to individuals | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total | 48 | | | $ | 18,425 | | | $ | 15,604 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | 1 | | | $ | 20 | | | $ | 19 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – construction | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – 1-4 family mortgage | 23 | | | 19,371 | | | 10,354 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Real estate – commercial mortgage | 16 | | | 12,785 | | | 10,934 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Installment loans to individuals | 1 | | | 182 | | | 171 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Total | 41 | | | $ | 32,358 | | | $ | 21,478 | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Changes in the Company’s restructured loans are set forth in the table below: |
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| Number of | | Recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | Investment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals at January 1, 2014 | 41 | | | $ | 21,478 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Additional loans with concessions | 17 | | | 2,622 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Reductions due to: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reclassified as nonperforming | (3 | ) | | (1,895 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Paid in full | (7 | ) | | (6,008 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Charge-offs | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Transfer to other real estate owned | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Principal paydowns | — | | | (593 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Lapse of concession period | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Totals at September 30, 2014 | 48 | | | $ | 15,604 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The allocated allowance for loan losses attributable to restructured loans was $1,805 and $2,984 at September 30, 2014 and December 31, 2013, respectively. The Company had $0 and $93 in remaining availability under commitments to lend additional funds on these restructured loans at September 30, 2014 and December 31, 2013, respectively. |
Credit Quality |
For loans originated for commercial purposes, internal risk-rating grades are assigned by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the portfolio balances of these loans. Loan grades range between 1 and 9, with 1 being loans with the least credit risk. Loans that migrate toward the “Pass” grade (those with a risk rating between 1 and 4) or within the “Pass” grade generally have a lower risk of loss and therefore a lower risk factor. The “Watch” grade (those with a risk rating of 5) is utilized on a temporary basis for “Pass” grade loans where a significant adverse risk-modifying action is anticipated in the near term. Loans that migrate toward the “Substandard” grade (those with a risk rating between 6 and 9) generally have a higher risk of loss and therefore a higher risk factor applied to those related loan balances. The following table presents the Company’s loan portfolio by risk-rating grades as of the dates presented: |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pass | | Watch | | Substandard | | Total | | | | | | | | | | | | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 314,774 | | | $ | 5,156 | | | $ | 1,383 | | | $ | 321,313 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – construction | 131,329 | | | 1,173 | | | — | | | 132,502 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – 1-4 family mortgage | 125,625 | | | 10,020 | | | 8,226 | | | 143,871 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – commercial mortgage | 1,402,321 | | | 30,728 | | | 42,649 | | | 1,475,698 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Installment loans to individuals | 2,537 | | | — | | | — | | | 2,537 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total | $ | 1,976,586 | | | $ | 47,077 | | | $ | 52,258 | | | $ | 2,075,921 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 328,959 | | | $ | 10,588 | | | $ | 4,266 | | | $ | 343,813 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – construction | 114,428 | | | 588 | | | — | | | 115,016 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – 1-4 family mortgage | 126,916 | | | 13,864 | | | 23,370 | | | 164,150 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – commercial mortgage | 1,338,340 | | | 32,892 | | | 35,121 | | | 1,406,353 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Installment loans to individuals | 19 | | | — | | | — | | | 19 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total | $ | 1,908,662 | | | $ | 57,932 | | | $ | 62,757 | | | $ | 2,029,351 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
For portfolio balances of consumer, consumer mortgage and certain other loans originated for other than commercial purposes, allowance factors are determined based on historical loss ratios by portfolio for the preceding eight quarters and may be adjusted by other qualitative criteria. The following table presents the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented: |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performing | | Non- | | Total | | | | | | | | | | | | | | | | | | | | | | | | |
Performing | | | | | | | | | | | | | | | | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 103,391 | | | $ | 159 | | | $ | 103,550 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | 5,377 | | | — | | | 5,377 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Real estate – construction | 62,635 | | | 161 | | | 62,796 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Real estate – 1-4 family mortgage | 987,332 | | | 3,512 | | | 990,844 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Real estate – commercial mortgage | 258,092 | | | 938 | | | 259,030 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Installment loans to individuals | 84,798 | | | 68 | | | 84,866 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 1,501,625 | | | $ | 4,838 | | | $ | 1,506,463 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | 89,490 | | | $ | 176 | | | $ | 89,666 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Lease financing | 53 | | | — | | | 53 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Real estate – construction | 43,535 | | | — | | | 43,535 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Real estate – 1-4 family mortgage | 938,994 | | | 2,527 | | | 941,521 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Real estate – commercial mortgage | 242,363 | | | 666 | | | 243,029 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Installment loans to individuals | 84,855 | | | 79 | | | 84,934 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total | $ | 1,399,290 | | | $ | 3,448 | | | $ | 1,402,738 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
Loans Acquired with Deteriorated Credit Quality |
Loans acquired in business combinations that exhibited, at the date of acquisition, evidence of deterioration of the credit quality since origination, such that it was probable that all contractually required payments would not be collected, were as follows as of the dates presented: |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Impaired | | Other | | Not | | Total | | | | | | | | | | | | | | | | | | | | |
Covered | Covered | Covered | | | | | | | | | | | | | | | | | | | | |
Loans | Loans | Loans | | | | | | | | | | | | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | — | | | $ | 7,699 | | | $ | 17,997 | | | $ | 25,696 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Lease financing | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – construction | — | | | 1,648 | | | 120 | | | 1,768 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – 1-4 family mortgage | 1,254 | | | 45,100 | | | 40,510 | | | 86,864 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – commercial mortgage | 11,986 | | | 87,594 | | | 156,744 | | | 256,324 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Installment loans to individuals | — | | | 38 | | | 4,365 | | | 4,403 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total | $ | 13,240 | | | $ | 142,079 | | | $ | 219,736 | | | $ | 375,055 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial, financial, agricultural | $ | — | | | $ | 9,546 | | | $ | 25,938 | | | $ | 35,484 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Lease financing | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – construction | — | | | 1,648 | | | 1,237 | | | 2,885 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – 1-4 family mortgage | 835 | | | 53,631 | | | 48,096 | | | 102,562 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Real estate – commercial mortgage | 23,684 | | | 92,302 | | | 185,204 | | | 301,190 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Installment loans to individuals | — | | | 28 | | | 6,781 | | | 6,809 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total | $ | 24,519 | | | $ | 157,155 | | | $ | 267,256 | | | $ | 448,930 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
The references in the table above and elsewhere in these Notes to "covered loans" and "not covered loans" (as well as to "covered OREO" and "not covered OREO") refer to loans (or OREO, as applicable) covered and not covered, respectively, by loss-share agreements with the FDIC. See Note E, "FDIC Loss-Share Indemnification Asset," below for more information. |
|
The following table presents the fair value of loans determined to be impaired at the time of acquisition and determined not to be impaired at the time of acquisition at September 30, 2014: |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Impaired | | Other | | Not | | Total | | | | | | | | | | | | | | | | | | | | |
Covered | Covered | Covered | | | | | | | | | | | | | | | | | | | | |
Loans | Loans | Loans | | | | | | | | | | | | | | | | | | | | |
Contractually-required principal and interest | $ | 52,678 | | | $ | 176,021 | | | $ | 256,592 | | | $ | 485,291 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Nonaccretable difference(1) | (39,437 | ) | | (30,500 | ) | | (32,676 | ) | | (102,613 | ) | | | | | | | | | | | | | | | | | | | | |
Cash flows expected to be collected | 13,241 | | | 145,521 | | | 223,916 | | | 382,678 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Accretable yield(2) | (1 | ) | | (3,442 | ) | | (4,180 | ) | | (7,623 | ) | | | | | | | | | | | | | | | | | | | | |
Fair value | $ | 13,240 | | | $ | 142,079 | | | $ | 219,736 | | | $ | 375,055 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | Represents contractual principal and interest cash flows of $93,738 and $8,875, respectively, not expected to be collected. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-2 | Represents contractual interest payments of $5,182 expected to be collected and purchase discount of $3,336. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Changes in the accretable yield of loans acquired with deteriorated credit quality were as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Impaired | | Other | | Not | | Total | | | | | | | | | | | | | | | | | | | | |
Covered | Covered | Covered | | | | | | | | | | | | | | | | | | | | |
Loans | Loans | Loans | | | | | | | | | | | | | | | | | | | | |
Balance at January 1, 2014 | $ | (13 | ) | | $ | (6,705 | ) | | $ | (3,010 | ) | | $ | (9,728 | ) | | | | | | | | | | | | | | | | | | | | |
Reclasses from nonaccretable difference | (63 | ) | | (2,511 | ) | | (10,899 | ) | | (13,473 | ) | | | | | | | | | | | | | | | | | | | | |
Accretion | 75 | | | 5,774 | | | 9,729 | | | 15,578 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Balance at September 30, 2014 | $ | (1 | ) | | $ | (3,442 | ) | | $ | (4,180 | ) | | $ | (7,623 | ) | | | | | | | | | | | | | | | | | | | | |
|
Allowance for Loan Losses |
The allowance for loan losses is maintained at a level believed adequate by management based on its ongoing analysis of the loan portfolio to absorb probable credit losses inherent in the entire loan portfolio, including collective impairment as recognized under ASC 450, “Contingencies”. Collective impairment is calculated based on loans grouped by grade. Another component of the allowance is losses on loans assessed as impaired under ASC 310. The balance of these loans and their related allowance is included in management’s estimation and analysis of the allowance for loan losses. Management and the internal loan review staff evaluate the adequacy of the allowance for loan losses quarterly. The allowance for loan losses is evaluated based on a continuing assessment of problem loans, the types of loans, historical loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories and other factors, including its risk rating system, regulatory guidance and economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance for loan losses is established through a provision for loan losses charged to earnings resulting from measurements of inherent credit risk in the loan portfolio and estimates of probable losses or impairments of individual loans. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. |
|
The following table provides a roll forward of the allowance for loan losses and a breakdown of the ending balance of the allowance based on the Company’s impairment methodology for the periods presented: |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | Real Estate - | | Real Estate - | | Real Estate - | | Installment | | Total | | | | | | | | | | | | |
Construction | 1-4 Family | Commercial | and Other(1) | | | | | | | | | | | | |
| Mortgage | Mortgage | | | | | | | | | | | | | |
Three Months Ended September 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 3,264 | | | $ | 1,267 | | | $ | 11,797 | | | $ | 29,771 | | | $ | 1,205 | | | $ | 47,304 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Charge-offs | (1,206 | ) | | — | | | (1,271 | ) | | (3,513 | ) | | (112 | ) | | (6,102 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries | 103 | | | 6 | | | 751 | | | 267 | | | 23 | | | 1,150 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net (charge-offs) recoveries | (1,103 | ) | | 6 | | | (520 | ) | | (3,246 | ) | | (89 | ) | | (4,952 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses | 1,007 | | | 109 | | | (491 | ) | | 4,043 | | | 107 | | | 4,775 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Benefit attributable to FDIC loss-share agreements | (19 | ) | | — | | | (189 | ) | | (3,169 | ) | | — | | | (3,377 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries payable to FDIC | 22 | | | — | | | 16 | | | 781 | | | — | | | 819 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses charged to operations | 1,010 | | | 109 | | | (664 | ) | | 1,655 | | | 107 | | | 2,217 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 3,171 | | | $ | 1,382 | | | $ | 10,613 | | | $ | 28,180 | | | $ | 1,223 | | | $ | 44,569 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Nine Months Ended September 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 3,090 | | | $ | 1,091 | | | $ | 18,629 | | | $ | 23,688 | | | $ | 1,167 | | | $ | 47,665 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Charge-offs | (1,325 | ) | | — | | | (4,143 | ) | | (4,056 | ) | | (404 | ) | | (9,928 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries | 215 | | | 14 | | | 1,108 | | | 325 | | | 53 | | | 1,715 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net (charge-offs) recoveries | (1,110 | ) | | 14 | | | (3,035 | ) | | (3,731 | ) | | (351 | ) | | (8,213 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses | 1,095 | | | 276 | | | (5,182 | ) | | 12,045 | | | 407 | | | 8,641 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Benefit attributable to FDIC loss-share agreements | (87 | ) | | — | | | (324 | ) | | (4,640 | ) | | — | | | (5,051 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries payable to FDIC | 183 | | | 1 | | | 525 | | | 818 | | | — | | | 1,527 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses charged to operations | 1,191 | | | 277 | | | (4,981 | ) | | 8,223 | | | 407 | | | 5,117 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 3,171 | | | $ | 1,382 | | | $ | 10,613 | | | $ | 28,180 | | | $ | 1,223 | | | $ | 44,569 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Period-End Amount Allocated to: | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | — | | | $ | — | | | $ | 1,260 | | | $ | 6,820 | | | $ | — | | | $ | 8,080 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Collectively evaluated for impairment | 3,171 | | | 1,382 | | | 9,353 | | | 21,360 | | | 1,223 | | | 36,489 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Acquired with deteriorated credit quality | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 3,171 | | | $ | 1,382 | | | $ | 10,613 | | | $ | 28,180 | | | $ | 1,223 | | | $ | 44,569 | | | | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | Real Estate - | | Real Estate - | | Real Estate - | | Installment | | Total | | | | | | | | | | | | |
Construction | 1-4 Family | Commercial | and Other(1) | | | | | | | | | | | | |
| Mortgage | Mortgage | | | | | | | | | | | | | |
Three Months Ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 3,478 | | | $ | 863 | | | $ | 19,432 | | | $ | 22,239 | | | $ | 1,022 | | | $ | 47,034 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Charge-offs | (887 | ) | | — | | | (1,251 | ) | | (1,107 | ) | | (81 | ) | | (3,326 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries | 54 | | | 7 | | | 120 | | | 38 | | | 23 | | | 242 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net (charge-offs) recoveries | (833 | ) | | 7 | | | (1,131 | ) | | (1,069 | ) | | (58 | ) | | (3,084 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses | 364 | | | 44 | | | 370 | | | 1,976 | | | 14 | | | 2,768 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Benefit attributable to FDIC loss-share agreements | (67 | ) | | — | | | (326 | ) | | (129 | ) | | — | | | (522 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries payable to FDIC | 5 | | | — | | | 45 | | | 4 | | | — | | | 54 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses charged to operations | 302 | | | 44 | | | 89 | | | 1,851 | | | 14 | | | 2,300 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 2,947 | | | $ | 914 | | | $ | 18,390 | | | $ | 23,021 | | | $ | 978 | | | $ | 46,250 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Nine Months Ended September 30, 2013 | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 3,307 | | | $ | 711 | | | $ | 18,347 | | | $ | 21,416 | | | $ | 566 | | | $ | 44,347 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Charge-offs | (1,167 | ) | | — | | | (2,517 | ) | | (4,226 | ) | | (434 | ) | | (8,344 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries | 301 | | | 70 | | | 591 | | | 885 | | | 50 | | | 1,897 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Net (charge-offs) recoveries | (866 | ) | | 70 | | | (1,926 | ) | | (3,341 | ) | | (384 | ) | | (6,447 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses | 874 | | | 132 | | | 2,088 | | | 5,762 | | | 796 | | | 9,652 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Benefit attributable to FDIC loss-share agreements | (397 | ) | | — | | | (956 | ) | | (840 | ) | | — | | | (2,193 | ) | | | | | | | | | | | | |
| | | | | | | | | | | |
Recoveries payable to FDIC | 29 | | | 1 | | | 837 | | | 24 | | | — | | | 891 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Provision for loan losses charged to operations | 506 | | | 133 | | | 1,969 | | | 4,946 | | | 796 | | | 8,350 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 2,947 | | | $ | 914 | | | $ | 18,390 | | | $ | 23,021 | | | $ | 978 | | | $ | 46,250 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Period-End Amount Allocated to: | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 260 | | | $ | — | | | $ | 7,569 | | | $ | 7,079 | | | $ | — | | | $ | 14,908 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Collectively evaluated for impairment | 2,687 | | | 914 | | | 10,821 | | | 15,942 | | | 978 | | | 31,342 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Acquired with deteriorated credit quality | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 2,947 | | | $ | 914 | | | $ | 18,390 | | | $ | 23,021 | | | $ | 978 | | | $ | 46,250 | | | | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | Includes lease financing receivables. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following table provides the recorded investment in loans, net of unearned income, based on the Company’s impairment methodology as of the dates presented: |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | Real Estate - | | Real Estate - | | Real Estate - | | Installment | | Total | | | | | | | | | | | | |
Construction | 1-4 Family | Commercial | and Other(1) | | | | | | | | | | | | |
| Mortgage | Mortgage | | | | | | | | | | | | | |
30-Sep-14 | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 349 | | | $ | — | | | $ | 15,576 | | | $ | 30,921 | | | $ | 50 | | | $ | 46,896 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Collectively evaluated for impairment | 424,514 | | | 195,298 | | | 1,119,139 | | | 1,703,807 | | | 92,730 | | | 3,535,488 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Acquired with deteriorated credit quality | 25,696 | | | 1,768 | | | 86,864 | | | 256,324 | | | 4,403 | | | 375,055 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 450,559 | | | $ | 197,066 | | | $ | 1,221,579 | | | $ | 1,991,052 | | | $ | 97,183 | | | $ | 3,957,439 | | | | | | | | | | | | | |
| | | | | | | | | | | |
December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | $ | 743 | | | $ | — | | | $ | 25,374 | | | $ | 30,624 | | | $ | 183 | | | $ | 56,924 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Collectively evaluated for impairment | 432,736 | | | 158,551 | | | 1,080,297 | | | 1,618,758 | | | 84,822 | | | 3,375,164 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Acquired with deteriorated credit quality | 35,484 | | | 2,885 | | | 102,562 | | | 301,190 | | | 6,809 | | | 448,930 | | | | | | | | | | | | | |
| | | | | | | | | | | |
Ending balance | $ | 468,963 | | | $ | 161,436 | | | $ | 1,208,233 | | | $ | 1,950,572 | | | $ | 91,814 | | | $ | 3,881,018 | | | | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
-1 | Includes lease financing receivables. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |