Loans | 3 Months Ended |
Mar. 31, 2015 |
Loans | |
Loans | |
(3)Loans |
|
The composition of loans by primary loan portfolio class follows: |
|
(in thousands) | | March 31, 2015 | | December 31, 2014 | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 594,980 | | $ | 588,200 | | | | | | | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 99,846 | | 95,733 | | | | | | | | | | | | | | | | |
Undeveloped land | | 19,995 | | 21,268 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Real estate mortgage: | | | | | | | | | | | | | | | | | | | | |
Commercial investment | | 486,371 | | 487,822 | | | | | | | | | | | | | | | | |
Owner occupied commercial | | 341,454 | | 340,982 | | | | | | | | | | | | | | | | |
1-4 family residential | | 191,004 | | 195,102 | | | | | | | | | | | | | | | | |
Home equity - first lien | | 45,288 | | 43,779 | | | | | | | | | | | | | | | | |
Home equity - junior lien | | 65,824 | | 66,268 | | | | | | | | | | | | | | | | |
Subtotal: Real estate mortgage | | 1,129,941 | | 1,133,953 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Consumer | | 29,248 | | 29,396 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 1,874,010 | | $ | 1,868,550 | | | | | | | | | | | | | | | | |
|
The following table presents the balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment evaluation method as of March 31, 2015 and December 31, 2014. |
|
| | Type of loan | | | | | | |
| | | | Construction | | | | | | | | | | | | |
| | | | and development | | | | | | | | | | | | |
| | Commercial | | excluding | | | | | | | | | | | | |
(in thousands) | | and | | undeveloped | | Undeveloped | | Real estate | | | | | | | | |
March 31, 2015 | | industrial | | land | | land | | mortgage | | Consumer | | Total | | | | |
| | | | | | | | | | | | | | | | |
Loans | | $ | 594,980 | | $ | 99,846 | | $ | 19,995 | | $ | 1,129,941 | | $ | 29,248 | | $ | 1,874,010 | | | | |
| | | | | | | | | | | | | | | | |
Loans collectively evaluated for impairment | | $ | 587,861 | | $ | 98,849 | | $ | 19,995 | | $ | 1,125,536 | | $ | 29,169 | | $ | 1,861,410 | | | | |
| | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 7,041 | | $ | 516 | | $ | — | | $ | 3,905 | | $ | 74 | | $ | 11,536 | | | | |
| | | | | | | | | | | | | | | | |
Loans acquired with deteriorated credit quality | | $ | 78 | | $ | 481 | | $ | — | | $ | 500 | | $ | 5 | | $ | 1,064 | | | | |
|
| | | | Construction | | | | | | | | | | | |
| | | | and development | | | | | | | | | | | |
| | Commercial | | excluding | | | | | | | | | | | |
| | and | | undeveloped | | Undeveloped | | Real estate | | | | | | | |
| | industrial | | land | | land | | mortgage | | Consumer | | Unallocated | | Total | |
| | | | | | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
At December 31, 2014 | | $ | 11,819 | | $ | 721 | | $ | 1,545 | | $ | 10,541 | | $ | 294 | | $ | — | | $ | 24,920 | |
Provision (credit) | | (24 | ) | 74 | | (398 | ) | 378 | | (30 | ) | — | | — | |
Charge-offs | | (12 | ) | — | | — | | (63 | ) | (139 | ) | — | | (214 | ) |
Recoveries | | 7 | | — | | — | | 15 | | 154 | | — | | 176 | |
At March 31, 2015 | | $ | 11,790 | | $ | 795 | | $ | 1,147 | | $ | 10,871 | | $ | 279 | | $ | — | | $ | 24,882 | |
| | | | | | | | | | | | | | | |
Allowance for loans collectively evaluated for impairment | | $ | 11,204 | | $ | 705 | | $ | 1,147 | | $ | 10,484 | | $ | 205 | | $ | — | | $ | 23,745 | |
| | | | | | | | | | | | | | | |
Allowance for loans individually evaluated for impairment | | $ | 586 | | $ | 90 | | $ | — | | $ | 387 | | $ | 74 | | $ | — | | $ | 1,137 | |
| | | | | | | | | | | | | | | |
Allowance for loans acquired with deteriorated credit quality | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
|
| | Type of loan | | | | | | |
| | | | Construction | | | | | | | | | | | | |
| | | | and development | | | | | | | | | | | | |
| | Commercial | | excluding | | | | | | | | | | | | |
(in thousands) | | and | | undeveloped | | Undeveloped | | Real estate | | | | | | | | |
December 31, 2014 | | industrial | | land | | land | | mortgage | | Consumer | | Total | | | | |
| | | | | | | | | | | | | | | | |
Loans | | $ | 588,200 | | $ | 95,733 | | $ | 21,268 | | $ | 1,133,953 | | $ | 29,396 | | $ | 1,868,550 | | | | |
| | | | | | | | | | | | | | | | |
Loans collectively evaluated for impairment | | $ | 580,889 | | $ | 94,603 | | $ | 21,268 | | $ | 1,129,766 | | $ | 29,311 | | $ | 1,855,837 | | | | |
| | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment | | $ | 7,239 | | $ | 516 | | $ | — | | $ | 3,720 | | $ | 76 | | $ | 11,551 | | | | |
| | | | | | | | | | | | | | | | |
Loans acquired with deteriorated credit quality | | $ | 72 | | $ | 614 | | $ | — | | $ | 467 | | $ | 9 | | $ | 1,162 | | | | |
|
| | | | Construction | | | | | | | | | | | |
| | | | and development | | | | | | | | | | | |
| | Commercial | | excluding | | | | | | | | | | | |
| | and | | undeveloped | | Undeveloped | | Real estate | | | | | | | |
| | industrial | | land | | land | | mortgage | | Consumer | | Unallocated | | Total | |
| | | | | | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
At December 31, 2013 | | $ | 7,644 | | $ | 2,555 | | $ | 5,376 | | $ | 12,604 | | $ | 343 | | $ | — | | $ | 28,522 | |
Provision (credit) | | 4,593 | | (1,584 | ) | (2,244 | ) | (1,190 | ) | 25 | | — | | (400 | ) |
Charge-offs | | (661 | ) | (250 | ) | (1,753 | ) | (993 | ) | (587 | ) | — | | (4,244 | ) |
Recoveries | | 243 | | — | | 166 | | 120 | | 513 | | — | | 1,042 | |
At December 31, 2014 | | $ | 11,819 | | $ | 721 | | $ | 1,545 | | $ | 10,541 | | $ | 294 | | $ | — | | $ | 24,920 | |
| | | | | | | | | | | | | | | |
Allowance for loans collectively evaluated for impairment | | $ | 10,790 | | $ | 706 | | $ | 1,545 | | $ | 10,285 | | $ | 218 | | $ | — | | $ | 23,544 | |
| | | | | | | | | | | | | | | |
Allowance for loans individually evaluated for impairment | | $ | 1,029 | | $ | 15 | | $ | — | | $ | 256 | | $ | 76 | | $ | — | | $ | 1,376 | |
| | | | | | | | | | | | | | | |
Allowance for loans acquired with deteriorated credit quality | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
|
The considerations by Bancorp in computing its allowance for loan losses are determined based on the various risk characteristics of each loan segment. Relevant risk characteristics are as follows: |
|
| · | | Commercial and industrial loans: Loans in this category are made to businesses. Generally these loans are secured by assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending will have an effect on the credit quality in this loan category. | | | | | | | | | | | | | | | | | | | |
|
| · | | Construction and development, excluding undeveloped land: Loans in this category primarily include owner-occupied and investment construction loans and commercial development projects Bancorp finances. In most cases, these loans require only interest to be paid during construction, and then convert to permanent financing requiring principal amortization. Repayment is derived from sale of the units including any pre-sold units. Credit risk is affected by construction delays, cost overruns, market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by us. | | | | | | | | | | | | | | | | | | | |
|
| · | | Undeveloped land: Loans in this category are secured by land initially acquired for development by the borrower, but for which no development has yet taken place. Credit risk is affected by market conditions and time to sell at an adequate price. Credit risk is also affected by market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by us. | | | | | | | | | | | | | | | | | | | |
|
| · | | Real estate mortgage: Loans in this category are made to and secured by owner-occupied residential real estate, owner-occupied real estate used for business purposes, and income-producing investment properties. Repayment is dependent on the credit quality of the individual borrower. The underlying properties are generally located in Bancorp’s primary market area. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan category. The cash flows of the income producing investment properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on credit quality. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending will have an adverse effect on credit quality. | | | | | | | | | | | | | | | | | | | |
|
| · | | Consumer: Loans in this category may be either secured or unsecured and repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have a significant effect on the credit quality in this loan category. | | | | | | | | | | | | | | | | | | | |
|
Bancorp has loans that were acquired in a prior acquisition, for which there was, at acquisition, evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is included in the balance sheet amounts of loans at March 31, 2015 and December 31, 2014. Changes in the interest component of the fair value adjustment for acquired impaired loans are shown in the following table: |
|
(in thousands) | | Accretable | | Non- | | | | | | | | | | | | | | | | |
discount | accretable | | | | | | | | | | | | | | | |
| discount | | | | | | | | | | | | | | | |
Balance at December 31, 2013 | | $ | 137 | | $ | 369 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Accretion | | (75 | ) | (103 | ) | | | | | | | | | | | | | | | |
Reclassifications from (to) non-accretable difference | | — | | — | | | | | | | | | | | | | | | | |
Disposals | | — | | — | | | | | | | | | | | | | | | | |
Balance at December 31, 2014 | | 62 | | 266 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Accretion | | (14 | ) | — | | | | | | | | | | | | | | | | |
Reclassifications from (to) non-accretable difference | | — | | — | | | | | | | | | | | | | | | | |
Disposals | | — | | — | | | | | | | | | | | | | | | | |
Balance at March 31, 2015 | | $ | 48 | | $ | 266 | | | | | | | | | | | | | | | | |
|
The following tables present loans individually evaluated for impairment as of March 31, 2015 and December 31, 2014. |
|
| | | | Unpaid | | | | Average | | | | | | | | | | |
(in thousands) | | Recorded | | principal | | Related | | recorded | | | | | | | | | | |
March 31, 2015 | | investment | | balance | | allowance | | investment | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Loans with no related allowance recorded | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 749 | | $ | 1,857 | | $ | — | | $ | 823 | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 26 | | 151 | | — | | 26 | | | | | | | | | | |
Undeveloped land | | — | | — | | — | | — | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | | | | |
Commercial investment | | 112 | | 1,704 | | — | | 113 | | | | | | | | | | |
Owner occupied commercial | | 1,330 | | 1,398 | | — | | 1,557 | | | | | | | | | | |
1-4 family residential | | 721 | | 721 | | — | | 796 | | | | | | | | | | |
Home equity - first lien | | — | | — | | — | | — | | | | | | | | | | |
Home equity - junior lien | | 109 | | 109 | | — | | 73 | | | | | | | | | | |
Subtotal: Real estate mortgage | | 2,272 | | 3,932 | | — | | 2,539 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Consumer | | — | | — | | — | | — | | | | | | | | | | |
Subtotal | | $ | 3,047 | | $ | 5,940 | | $ | — | | $ | 3,388 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Loans with an allowance recorded | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 6,292 | | $ | 7,861 | | $ | 586 | | $ | 6,318 | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 490 | | 490 | | 90 | | 490 | | | | | | | | | | |
Undeveloped land | | — | | — | | — | | — | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | | | | |
Commercial investment | | 122 | | 122 | | — | | 122 | | | | | | | | | | |
Owner occupied commercial | | 1,432 | | 1,811 | | 243 | | 1,074 | | | | | | | | | | |
1-4 family residential | | 79 | | 79 | | 144 | | 79 | | | | | | | | | | |
Home equity - first lien | | — | | — | | — | | — | | | | | | | | | | |
Home equity - junior lien | | — | | — | | — | | — | | | | | | | | | | |
Subtotal: Real estate mortgage | | 1,633 | | 2,012 | | 387 | | 1,275 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Consumer | | 74 | | 74 | | 74 | | 75 | | | | | | | | | | |
Subtotal | | $ | 8,489 | | $ | 10,437 | | $ | 1,137 | | $ | 8,158 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 7,041 | | $ | 9,718 | | $ | 586 | | $ | 7,141 | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 516 | | 641 | | 90 | | 516 | | | | | | | | | | |
Undeveloped land | | — | | — | | — | | — | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Real estate mortgage | | — | | — | | — | | — | | | | | | | | | | |
Commercial investment | | 234 | | 1,826 | | — | | 235 | | | | | | | | | | |
Owner occupied commercial | | 2,762 | | 3,209 | | 243 | | 2,631 | | | | | | | | | | |
1-4 family residential | | 800 | | 800 | | 144 | | 875 | | | | | | | | | | |
Home equity - first lien | | — | | — | | — | | — | | | | | | | | | | |
Home equity - junior lien | | 109 | | 109 | | — | | 73 | | | | | | | | | | |
Subtotal: Real estate mortgage | | 3,905 | | 5,944 | | 387 | | 3,814 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Consumer | | 74 | | 74 | | 74 | | 75 | | | | | | | | | | |
Total | | $ | 11,536 | | $ | 16,377 | | $ | 1,137 | | $ | 11,546 | | | | | | | | | | |
|
| | | | Unpaid | | | | Average | | | | | | | | | | |
(in thousands) | | Recorded | | principal | | Related | | recorded | | | | | | | | | | |
December 31, 2014 | | investment | | balance | | allowance | | investment | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Loans with no related allowance recorded | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 896 | | $ | 3,596 | | $ | — | | $ | 996 | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 26 | | 151 | | — | | 26 | | | | | | | | | | |
Undeveloped land | | — | | — | | — | | 5,608 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | | | | |
Commercial investment | | 113 | | 113 | | — | | 198 | | | | | | | | | | |
Owner occupied commercial | | 1,784 | | 2,221 | | — | | 1,939 | | | | | | | | | | |
1-4 family residential | | 870 | | 870 | | — | | 782 | | | | | | | | | | |
Home equity - first lien | | — | | — | | — | | 11 | | | | | | | | | | |
Home equity - junior lien | | 36 | | 36 | | — | | 69 | | | | | | | | | | |
Subtotal: Real estate mortgage | | 2,803 | | 3,240 | | — | | 2,999 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Consumer | | — | | — | | — | | — | | | | | | | | | | |
Subtotal | | $ | 3,725 | | $ | 6,987 | | $ | — | | $ | 9,629 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Loans with an allowance recorded | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 6,343 | | $ | 7,914 | | $ | 1,029 | | $ | 6,797 | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 490 | | 490 | | 15 | | 196 | | | | | | | | | | |
Undeveloped land | | — | | — | | — | | — | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | | | | |
Commercial investment | | 122 | | 122 | | — | | 640 | | | | | | | | | | |
Owner occupied commercial | | 716 | | 716 | | 112 | | 704 | | | | | | | | | | |
1-4 family residential | | 79 | | 79 | | 144 | | 651 | | | | | | | | | | |
Home equity - first lien | | — | | — | | — | | — | | | | | | | | | | |
Home equity - junior lien | | — | | — | | — | | — | | | | | | | | | | |
Subtotal: Real estate mortgage | | 917 | | 917 | | 256 | | 1,995 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Consumer | | 76 | | 76 | | 76 | | 80 | | | | | | | | | | |
Subtotal | | $ | 7,826 | | $ | 9,397 | | $ | 1,376 | | $ | 9,068 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 7,239 | | $ | 11,510 | | $ | 1,029 | | $ | 7,793 | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 516 | | 641 | | 15 | | 222 | | | | | | | | | | |
Undeveloped land | | — | | — | | — | | 5,608 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Real estate mortgage | | — | | — | | — | | — | | | | | | | | | | |
Commercial investment | | 235 | | 235 | | — | | 838 | | | | | | | | | | |
Owner occupied commercial | | 2,500 | | 2,937 | | 112 | | 2,643 | | | | | | | | | | |
1-4 family residential | | 949 | | 949 | | 144 | | 1,433 | | | | | | | | | | |
Home equity - first lien | | — | | — | | — | | 11 | | | | | | | | | | |
Home equity - junior lien | | 36 | | 36 | | — | | 69 | | | | | | | | | | |
Subtotal: Real estate mortgage | | 3,720 | | 4,157 | | 256 | | 4,994 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Consumer | | 76 | | 76 | | 76 | | 80 | | | | | | | | | | |
Total | | $ | 11,551 | | $ | 16,384 | | $ | 1,376 | | $ | 18,697 | | | | | | | | | | |
|
Differences between recorded investment amounts and unpaid principal balance amounts less related allowance are due to partial charge-offs which have occurred over the life of loans and fair value adjustments recorded for loans acquired. |
|
Impaired loans include non-accrual loans and loans accounted for as troubled debt restructurings (TDR), which continue to accrue interest. Non-performing loans include the balance of impaired loans plus any loans over 90 days past due and still accruing interest. Loans past due more than 90 days or more and still accruing interest amounted to $1 thousand at March 31, 2015 and $329 thousand at December 31, 2014. |
|
The following table presents the recorded investment in non-accrual loans as of March 31, 2015 and December 31, 2014. |
|
(in thousands) | | March 31, 2015 | | December 31, 2014 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 1,276 | | $ | 1,381 | | | | | | | | | | | | | | | | |
Construction and development, excluding undeveloped land | | 516 | | 516 | | | | | | | | | | | | | | | | |
Undeveloped land | | — | | — | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | | | | | | |
Commercial investment | | 234 | | 235 | | | | | | | | | | | | | | | | |
Owner occupied commercial | | 2,344 | | 2,081 | | | | | | | | | | | | | | | | |
1-4 family residential | | 800 | | 950 | | | | | | | | | | | | | | | | |
Home equity - first lien | | — | | — | | | | | | | | | | | | | | | | |
Home equity - junior lien | | 109 | | 36 | | | | | | | | | | | | | | | | |
Subtotal: Real estate mortgage | | 3,487 | | 3,302 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Consumer | | — | | — | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total | | $ | 5,279 | | $ | 5,199 | | | | | | | | | | | | | | | | |
|
At March 31, 2015 and December 31, 2014, Bancorp had accruing loans classified as TDR of $6.3 million and $6.4 million, respectively. Bancorp did not modify and classify any loans as TDR during the three months ended March 31, 2015 or March 31, 2014. |
|
Bancorp had no loans accounted for as TDR that were restructured and experienced a payment default within the previous 12 months as of March 31, 2015. The following table presents the recorded investment in loans accounted for as TDR that were restructured and experienced a payment default within the previous 12 months as of March 31, 2014. |
|
(dollars in thousands) | | Number of | | Recorded | | | | | | | | | | | | | | | | | |
March 31, 2014 | | Contracts | | Investment | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Commercial & industrial | | 1 | | $ | 790 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total | | 1 | | $ | 790 | | | | | | | | | | | | | | | | | |
|
Loans accounted for as TDR include modifications from original terms such as those due to bankruptcy proceedings, certain modifications of amortization periods or extended suspension of principal payments due to customer financial difficulties. Loans accounted for as TDR, which have not defaulted, are individually evaluated for impairment and, at March 31, 2015, had a total allowance allocation of $612 thousand, compared to $703 thousand at December 31, 2014. |
|
At March 31, 2015, Bancorp did not have any outstanding commitments to lend additional funds to borrowers whose loans have been modified as TDR, compared to $458 thousand at December 31, 2014. |
|
The following table presents the aging of the recorded investment in loans as of March 31, 2015 and December 31, 2014. |
|
| | | | | | | | | | | | | | Recorded | |
| | | | | | 90 or more | | | | | | | | investment | |
| | | | | | days past | | | | | | | | > 90 days | |
(in thousands) | | 30-59 days | | 60-89 days | | due (includes) | | Total | | | | Total | | and | |
March 31, 2015 | | past due | | past due | | non-accrual) | | past due | | Current | | loans | | accruing | |
| | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 175 | | $ | 22 | | $ | 1,277 | | $ | 1,474 | | $ | 593,506 | | $ | 594,980 | | $ | 1 | |
Construction and development, excluding undeveloped land | | — | | 232 | | 516 | | 748 | | 99,098 | | 99,846 | | — | |
Undeveloped land | | — | | — | | — | | — | | 19,995 | | 19,995 | | — | |
| | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | |
Commercial investment | | 1,343 | | 111 | | 234 | | 1,688 | | 484,683 | | 486,371 | | — | |
Owner occupied commercial | | 374 | | 692 | | 2,344 | | 3,410 | | 338,044 | | 341,454 | | — | |
1-4 family residential | | 1,786 | | 727 | | 800 | | 3,313 | | 187,691 | | 191,004 | | — | |
Home equity - first lien | | 100 | | — | | — | | 100 | | 45,188 | | 45,288 | | — | |
Home equity - junior lien | | 104 | | 107 | | 109 | | 320 | | 65,504 | | 65,824 | | — | |
Subtotal: Real estate mortgage | | 3,707 | | 1,637 | | 3,487 | | 8,831 | | 1,121,110 | | 1,129,941 | | — | |
| | | | | | | | | | | | | | | |
Consumer | | 34 | | 22 | | — | | 56 | | 29,192 | | 29,248 | | — | |
| | | | | | | | | | | | | | | |
Total | | $ | 3,916 | | $ | 1,913 | | $ | 5,280 | | $ | 11,109 | | $ | 1,862,901 | | $ | 1,874,010 | | $ | 1 | |
| | | | | | | | | | | | | | | |
December 31, 2014 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 3,860 | | $ | 3 | | $ | 1,382 | | $ | 5,245 | | $ | 582,955 | | $ | 588,200 | | $ | 1 | |
Construction and development, excluding undeveloped land | | 69 | | — | | 757 | | 826 | | 94,907 | | 95,733 | | 241 | |
Undeveloped land | | — | | — | | — | | — | | 21,268 | | 21,268 | | — | |
| | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | |
Commercial investment | | 993 | | 249 | | 235 | | 1,477 | | 486,345 | | 487,822 | | — | |
Owner occupied commercial | | 1,272 | | 920 | | 2,081 | | 4,273 | | 336,709 | | 340,982 | | — | |
1-4 family residential | | 1,801 | | 285 | | 1,023 | | 3,109 | | 191,993 | | 195,102 | | 73 | |
Home equity - first lien | | — | | — | | 14 | | 14 | | 43,765 | | 43,779 | | 14 | |
Home equity - junior lien | | 470 | | 78 | | 36 | | 584 | | 65,684 | | 66,268 | | | |
Subtotal: Real estate mortgage | | 4,536 | | 1,532 | | 3,389 | | 9,457 | | 1,124,496 | | 1,133,953 | | 87 | |
| | | | | | | | | | | | | | | |
Consumer | | 43 | | 18 | | — | | 61 | | 29,335 | | 29,396 | | — | |
| | | | | | | | | | | | | | | |
Total | | $ | 8,508 | | $ | 1,553 | | $ | 5,528 | | $ | 15,589 | | $ | 1,852,961 | | $ | 1,868,550 | | $ | 329 | |
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Consistent with regulatory guidance, Bancorp categorizes loans into credit risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. Pass-rated loans included all risk-rated loans other than those classified as special mention, substandard, and doubtful, which are defined below: |
|
| · | | Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp’s credit position at some future date. | | | | | | | | | | | | | | | | | | | |
|
| · | | Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize repayment of the debt. They are characterized by the distinct possibility that Bancorp will sustain some loss if the deficiencies are not corrected. | | | | | | | | | | | | | | | | | | | |
|
| · | | Substandard non-performing: Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status or have been accounted for as troubled debt restructurings. | | | | | | | | | | | | | | | | | | | |
|
| · | | Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. | | | | | | | | | | | | | | | | | | | |
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As of March 31, 2015 and December 31, 2014, the internally assigned risk grades of loans by category were as follows: |
|
(in thousands) | | | | Special | | | | Substandard | | | | Total | | | | |
March 31, 2015 | | Pass | | Mention | | Substandard | | non-performing | | Doubtful | | loans | | | | |
| | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 574,010 | | $ | 5,258 | | $ | 8,670 | | $ | 7,042 | | $ | — | | $ | 594,980 | | | | |
Construction and development, excluding undeveloped land | | 92,587 | | 4,798 | | 1,945 | | 516 | | — | | 99,846 | | | | |
Undeveloped land | | 19,309 | | 527 | | 159 | | — | | — | | 19,995 | | | | |
| | | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | | |
Commercial investment | | 481,205 | | 4,753 | | 179 | | 234 | | — | | 486,371 | | | | |
Owner occupied commercial | | 326,208 | | 8,550 | | 3,934 | | 2,762 | | — | | 341,454 | | | | |
1-4 family residential | | 188,536 | | 1,668 | | — | | 800 | | — | | 191,004 | | | | |
Home equity - first lien | | 45,288 | | — | | — | | — | | — | | 45,288 | | | | |
Home equity - junior lien | | 65,614 | | 101 | | — | | 109 | | — | | 65,824 | | | | |
Subtotal: Real estate mortgage | | 1,106,851 | | 15,072 | | 4,113 | | 3,905 | | — | | 1,129,941 | | | | |
| | | | | | | | | | | | | | | | |
Consumer | | 29,100 | | 74 | | — | | 74 | | — | | 29,248 | | | | |
| | | | | | | | | | | | | | | | |
Total | | $ | 1,821,857 | | $ | 25,729 | | $ | 14,887 | | $ | 11,537 | | $ | — | | $ | 1,874,010 | | | | |
| | | | | | | | | | | | | | | | |
December 31, 2014 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Commercial and industrial | | $ | 563,028 | | $ | 6,215 | | $ | 11,717 | | $ | 7,240 | | $ | — | | $ | 588,200 | | | | |
Construction and development, excluding undeveloped land | | 88,389 | | 4,867 | | 1,720 | | 757 | | — | | 95,733 | | | | |
Undeveloped land | | 20,578 | | 530 | | 160 | | — | | — | | 21,268 | | | | |
| | | | | | | | | | | | | | | | |
Real estate mortgage | | | | | | | | | | | | | | | | |
Commercial investment | | 482,415 | | 4,991 | | 181 | | 235 | | — | | 487,822 | | | | |
Owner occupied commercial | | 328,385 | | 6,942 | | 3,156 | | 2,499 | | — | | 340,982 | | | | |
1-4 family residential | | 192,950 | | 1,129 | | — | | 1,023 | | — | | 195,102 | | | | |
Home equity - first lien | | 43,765 | | — | | — | | 14 | | — | | 43,779 | | | | |
Home equity - junior lien | | 66,182 | | 50 | | — | | 36 | | — | | 66,268 | | | | |
Subtotal: Real estate mortgage | | 1,113,697 | | 13,112 | | 3,337 | | 3,807 | | — | | 1,133,953 | | | | |
| | | | | | | | | | | | | | | | |
Consumer | | 29,244 | | 76 | | — | | 76 | | — | | 29,396 | | | | |
| | | | | | | | | | | | | | | | |
Total | | $ | 1,814,936 | | $ | 24,800 | | $ | 16,934 | | $ | 11,880 | | $ | — | | $ | 1,868,550 | | | | |
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