Loans | 6 Months Ended |
Jun. 30, 2014 |
Loans | ' |
Loans | ' |
Note 5. Loans |
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The following table provides a summary of outstanding loan balances: |
|
| | June 30, | | | | December 31, | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | | | 2013 | | | | | | | | | | | | | | | | | | | | |
| | Non-PCI | | PCI | | Total Loans | | Non-PCI | | | | | | | | | | | | | | | | | | | | |
(dollar amounts in thousands) | | Loans | | Loans | | Receivable | | Loans | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Multi-family residential | | $ | 48,458 | | $ | - | | $ | 48,458 | | $ | 31,140 | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | 112,653 | | 563 | | 113,216 | | 88,904 | | | | | | | | | | | | | | | | | | | | |
Home equity lines of credit | | 39,032 | | 80 | | 39,112 | | 31,178 | | | | | | | | | | | | | | | | | | | | |
Commercial | | 560,559 | | 4,974 | | 565,533 | | 432,203 | | | | | | | | | | | | | | | | | | | | |
Farmland | | 84,369 | | 1,709 | | 86,078 | | 50,414 | | | | | | | | | | | | | | | | | | | | |
Land | | 26,670 | | 969 | | 27,639 | | 24,523 | | | | | | | | | | | | | | | | | | | | |
Construction | | 18,059 | | - | | 18,059 | | 13,699 | | | | | | | | | | | | | | | | | | | | |
Total real estate secured | | 889,800 | | 8,295 | | 898,095 | | 672,061 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 143,895 | | 2,509 | | 146,404 | | 119,121 | | | | | | | | | | | | | | | | | | | | |
Agriculture | | 41,142 | | 1,171 | | 42,313 | | 32,686 | | | | | | | | | | | | | | | | | | | | |
Other | | 704 | | - | | 704 | | 38 | | | | | | | | | | | | | | | | | | | | |
Total commercial | | 185,741 | | 3,680 | | 189,421 | | 151,845 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Installment loans to individuals | | 9,071 | | - | | 9,071 | | 3,246 | | | | | | | | | | | | | | | | | | | | |
Overdrafts | | 296 | | - | | 296 | | 332 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total gross loans | | 1,084,908 | | 11,975 | | 1,096,883 | | 827,484 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net deferred loan fees | | (1,350 | ) | | | (1,350 | ) | (1,281 | ) | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | | (16,635 | ) | | | (16,635 | ) | (17,859 | ) | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total net loans | | $ | 1,066,923 | | $ | 11,975 | | $ | 1,078,898 | | $ | 808,344 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans held for sale | | $ | 8,409 | | $ | - | | $ | 8,409 | | $ | 2,386 | | | | | | | | | | | | | | | | | | | | |
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Total net loans in the table above include $280.3 million of loans acquired through the MISN acquisition at fair value on the acquisition date. $267.5 million of these loans were acquired with no impairment while the remaining $12.8 million were determined to be purchased credit impaired (“PCI”) loans. Loans held for sale are primarily single-family residential mortgage loans under contract to be sold in the secondary market. In most cases, loans in this category are sold within thirty to sixty days. Under the terms of the mortgage purchase agreements, the purchaser has the right to require the Company to either repurchase the mortgage or reimburse losses incurred by the purchaser, which are determined to have been directly caused by borrower fraud or misrepresentation. Although the Company intends to vigorously challenge these and any future claims, the Company has a reserve of $0.4 million for these potential repurchases at June 30, 2014. The Company has incurred losses of $1.6 million related to the settlement of nine loans since the beginning of 2011, the majority of which were associated with a group of loans originated and sold in 2007 that were made to related borrowers subsequently found guilty of financial fraud. |
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Under a blanket lien to the Federal Home Loan Bank (“FHLB”), the Bank has pledged $825.8 million in loans to secure a credit facility totaling $425.8 million, of which $67.5 million is outstanding, $11.5 million is available as a line of credit and $346.8 million is available for potential future borrowings. The Bank also has a collateralized borrowing line with the Federal Reserve Bank secured by $12.3 million of loans as of June 30, 2014. |
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Concentration of Credit Risk |
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The Company held loans that were collateralized by various forms of real estate totaling $898.1 million and $672.1 million at June 30, 2014 and December 31, 2013, respectively. Such loans are generally made to borrowers located in the counties of San Luis Obispo, Santa Barbara and Ventura. The Company attempts to reduce its concentration of credit risk by making loans which are diversified by product type. While management believes that the collateral presently securing this portfolio is adequate, there can be no assurances that deterioration in the California real estate market would not expose the Company to significantly greater credit risk. |
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Loans Serviced for Others |
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Loans serviced for others are not included in the accompanying balance sheets. The unpaid principal balance of loans serviced for others, exclusive of Small Business Administration (“SBA”) loans, was $56.4 million at June 30, 2014 and $22.6 million at December 31, 2013. |
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From time to time, the Company also originates SBA loans for sale for which it retains the servicing of the guaranteed portion of the loan sold. At June 30, 2014 and December 31, 2013, the unpaid principal balance of SBA loans serviced for others totaled $28.3 million and $6.6 million, respectively. The Company recognized $28 thousand and $357 thousand in gains from the sale of SBA loans in the first six months of 2014 and 2013, respectively. |
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Impaired Loans |
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The following tables provide a summary of the Company’s investment in impaired loans: |
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(dollar amounts in thousands) | | | | Unpaid | | | Impaired Loans | | | Specific | | | | | | | | | | | | | | | |
Non-PCI Loans | | Recorded | | Principal | | | With Specific | | Without Specific | | | Allowance for | | | | | | | | | | | | | | | |
June 30, 2014 | | Investment (1) | | Balance | | | Allowance | | Allowance | | | Impaired Loans | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | $ | 227 | | $ | 359 | | | $ | - | | $ | 227 | | | $ | - | | | | | | | | | | | | | | | |
Home equity lines of credit | | 100 | | 184 | | | - | | 100 | | | - | | | | | | | | | | | | | | | |
Commercial | | 2,525 | | 4,593 | | | - | | 2,525 | | | - | | | | | | | | | | | | | | | |
Farmland | | 295 | | 294 | | | - | | 295 | | | - | | | | | | | | | | | | | | | |
Land | | 7,807 | | 12,313 | | | 6,507 | | 1,301 | | | 2,331 | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 5,533 | | 6,661 | | | 1,833 | | 3,700 | | | 584 | | | | | | | | | | | | | | | |
Agriculture | | 726 | | 764 | | | - | | 726 | | | - | | | | | | | | | | | | | | | |
Other | | - | | - | | | - | | - | | | - | | | | | | | | | | | | | | | |
Installment loans to individuals | | 91 | | 179 | | | - | | 91 | | | - | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 17,304 | | $ | 25,347 | | | $ | 8,340 | | $ | 8,965 | | | $ | 2,915 | | | | | | | | | | | | | | | |
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(1) Recorded investment in loans includes the book value of loans as adjusted for net deferred costs and fees attributable to the impaired loans. |
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(dollar amounts in thousands) | | | | Unpaid | | | Impaired Loans | | | Specific | | | | | | | | | | | | | | | |
PCI Loans | | Recorded | | Principal | | | With Specific | | Without Specific | | | Allowance for | | | | | | | | | | | | | | | |
June 30, 2014 | | Investment (1) | | Balance | | | Allowance | | Allowance | | | Impaired Loans | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | $ | 565 | | $ | 891 | | | $ | - | | $ | 565 | | | $ | - | | | | | | | | | | | | | | | |
Home equity lines of credit | | 81 | | 98 | | | - | | 81 | | | - | | | | | | | | | | | | | | | |
Commercial | | 5,004 | | 6,606 | | | - | | 5,004 | | | - | | | | | | | | | | | | | | | |
Farmland | | 1,717 | | 2,075 | | | - | | 1,717 | | | - | | | | | | | | | | | | | | | |
Land | | 972 | | 1,120 | | | - | | 972 | | | - | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 2,515 | | 3,068 | | | - | | 2,515 | | | - | | | | | | | | | | | | | | | |
Agriculture | | 1,178 | | 1,257 | | | - | | 1,178 | | | - | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 12,032 | | $ | 15,115 | | | $ | - | | $ | 12,032 | | | $ | - | | | | | | | | | | | | | | | |
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(1) Recorded investment in loans includes the book value of loans as adjusted for accrued interest receivable attributable to the impaired loans. |
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(dollar amounts in thousands) | | | | Unpaid | | | Impaired Loans | | | Specific | | | | | | | | | | | | | | | |
| | Recorded | | Principal | | | With Specific | | Without Specific | | | Allowance for | | | | | | | | | | | | | | | |
December 31, 2013 (2) | | Investment (1) | | Balance | | | Allowance | | Allowance | | | Impaired Loans | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | $ | 944 | | $ | 1,102 | | | $ | - | | $ | 944 | | | $ | - | | | | | | | | | | | | | | | |
Commercial | | 901 | | 1,646 | | | - | | 901 | | | - | | | | | | | | | | | | | | | |
Land | | 7,927 | | 12,106 | | | 6,706 | | 1,221 | | | 2,532 | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 5,337 | | 5,843 | | | 3,480 | | 1,857 | | | 623 | | | | | | | | | | | | | | | |
Agriculture | | 789 | | 824 | | | - | | 789 | | | - | | | | | | | | | | | | | | | |
Installment loans to individuals | | 118 | | 190 | | | - | | 118 | | | - | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 16,016 | | $ | 21,711 | | | $ | 10,186 | | $ | 5,830 | | | $ | 3,155 | | | | | | | | | | | | | | | |
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(1) Recorded investment in loans includes the book value of loans as adjusted for net deferred costs and fees attributable to the impaired loans. |
(2) The Company had no PCI loans as of December 31, 2013. |
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The average recorded investment in, and the interest income recognized on, impaired loans are shown on the following tables: |
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| | For the Three Months Ended June 30, | | | | For the Six Months Ended June 30, | | | | | | |
| | 2014 | | 2013 | | | | 2014 | | 2013 | | | | | | |
| | Average | | Interest | | Average | | Interest | | | | Average | | Interest | | Average | | Interest | | | | | | |
Non-PCI Loans | | Recorded | | Income | | Recorded | | Income | | | | Recorded | | Income | | Recorded | | Income | | | | | | |
(dollar amounts in thousands) | | Investment | | Recognized | | Investment | | Recognized | | | | Investment | | Recognized | | Investment | | Recognized | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | $ | 413 | | $ | 2 | | $ | 860 | | $ | - | | | | $ | 587 | | $ | 10 | | $ | 850 | | $ | - | | | | | | |
Home equity lines of credit | | 50 | | - | | 57 | | - | | | | 50 | | - | | 57 | | - | | | | | | |
Commercial | | 1,631 | | 6 | | 501 | | - | | | | 1,711 | | 12 | | 645 | | - | | | | | | |
Farmland | | 147 | | 4 | | - | | - | | | | 147 | | 9 | | 359 | | - | | | | | | |
Land | | 7,798 | | 36 | | 7,802 | | - | | | | 7,864 | | 72 | | 7,702 | | - | | | | | | |
Construction | | - | | - | | - | | - | | | | - | | - | | 460 | | - | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 5,386 | | 62 | | 4,391 | | 3 | | | | 5,416 | | 109 | | 4,373 | | 3 | | | | | | |
Agriculture | | 876 | | - | | 1,074 | | - | | | | 757 | | - | | 1,018 | | - | | | | | | |
Installment loans to individuals | | 92 | | 1 | | 65 | | - | | | | 104 | | 2 | | 138 | | - | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 16,393 | | $ | 111 | | $ | 14,750 | | $ | 3 | | | | $ | 16,636 | | $ | 214 | | $ | 15,602 | | $ | 3 | | | | | | |
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| | For the Three Months Ended June 30, | | | | For the Six Months Ended June 30, | | | | | | |
| | 2014 | | 2013 | | | | 2014 | | 2013 | | | | | | |
| | Average | | Interest | | Average | | Interest | | | | Average | | Interest | | Average | | Interest | | | | | | |
PCI Loans | | Recorded | | Income | | Recorded | | Income | | | | Recorded | | Income | | Recorded | | Income | | | | | | |
(dollar amounts in thousands) | | Investment | | Recognized | | Investment | | Recognized | | | | Investment | | Recognized | | Investment | | Recognized | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | $ | 595 | | $ | 15 | | $ | - | | $ | - | | | | $ | 596 | | $ | 16 | | $ | - | | $ | - | | | | | | |
Home equity lines of credit | | 81 | | 2 | | - | | - | | | | 81 | | 2 | | - | | - | | | | | | |
Commercial | | 5,249 | | 127 | | - | | - | | | | 5,288 | | 196 | | - | | - | | | | | | |
Farmland | | 1,718 | | 44 | | - | | - | | | | 1,725 | | 45 | | - | | - | | | | | | |
Land | | 979 | | 26 | | - | | - | | | | 983 | | 26 | | - | | - | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 2,532 | | 32 | | - | | - | | | | 2,586 | | 78 | | - | | - | | | | | | |
Agriculture | | 1,224 | | 28 | | - | | - | | | | 1,227 | | 28 | | - | | - | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 12,378 | | $ | 274 | | $ | - | | $ | - | | | | $ | 12,486 | | $ | 391 | | $ | - | | $ | - | | | | | | |
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The Company did not record income from the receipt of cash payments related to non-accruing loans during the three-month or six-month periods ended June 30, 2014 and 2013. If interest on non-accruing loans had been recognized at the original interest rates stipulated in the respective loan agreements, interest income would have increased $0.2 million for both the three months ended June 30, 2014 and 2013, and $0.3 million and $0.4 million for the six months ended June 30, 2014 and 2013, respectively. Interest income recognized on impaired loans in the table above, if any, represents interest the Company recognized on accruing troubled debt restructurings (“TDRs”). Because the loans currently identified as impaired have unique risk characteristics, the Company determined the related valuation allowances for such loans on a loan-by-loan basis. |
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At June 30, 2014 and December 31, 2013, $14.1 million and $12.9 million, respectively, in loans were classified as TDRs. Of those balances, $6.7 million and $5.8 million were accruing as of June 30, 2014 and December 31, 2013, respectively and the remaining balance of TDRs consists of non-accruing loans. In a majority of these loans, the Company has granted concessions regarding interest rates, payment structure and/or maturity. During the three-month and six-month periods ended June 30, 2014 and 2013, the terms of certain loans were modified as troubled debt restructurings. These term modifications included a combination of a partial charge-off of principal along with extensions of the maturity date at the loan’s original interest rate, which was lower than the current market rate for new debt with similar risk. The maturity date extensions granted were for periods ranging from 6 months to 10 years. Forgone interest related to concessions granted on TDRs totaled $47 thousand and $43 thousand for the three months ended June 30, 2014 and 2013, respectively, and $96 thousand and $88 thousand for the six months ended June 30, 2014 and 2013, respectively. As of June 30, 2014, the Company was not committed to lend any additional funds to borrowers whose obligations to the Company were restructured. |
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The following tables present loan modifications by class which resulted in TDRs: |
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| For the Three Months Ended | | For the Six Months Ended | | | | | | | | | | | | | | | |
June 30, 2014 | June 30, 2014 | | | | | | | | | | | | | | | |
| | | | Pre-Modification | | Post-Modification | | | | Pre-Modification | | Post-Modification | | | | | | | | | | | | | | | | |
| | Number of | | Outstanding Recorded | | Outstanding Recorded | | Number of | | Outstanding Recorded | | Outstanding Recorded | | | | | | | | | | | | | | | | |
(dollar amounts in thousands) | | TDRs | | Investment | | Investment | | TDRs | | Investment | | Investment | | | | | | | | | | | | | | | | |
Troubled Debt Restructurings | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-PCI Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | - | | $ | - | | $ | - | | 1 | | $ | 166 | | $ | 166 | | | | | | | | | | | | | | | | |
Land | | 1 | | 116 | | 116 | | 2 | | 276 | | 276 | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 6 | | 307 | | 307 | | 10 | | 1,227 | | 1,227 | | | | | | | | | | | | | | | | |
Agriculture | | - | | - | | - | | 1 | | 662 | | 662 | | | | | | | | | | | | | | | | |
Installment loans to individuals | | - | | - | | - | | 1 | | 73 | | 73 | | | | | | | | | | | | | | | | |
PCI Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | 1 | | 617 | | 617 | | 1 | | 617 | | 617 | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 2 | | 172 | | 172 | | 2 | | 172 | | 172 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | 10 | | $ | 1,212 | | $ | 1,212 | | 18 | | $ | 3,193 | | $ | 3,193 | | | | | | | | | | | | | | | | |
|
|
| | For the Three Months Ended | | For the Six Months Ended | | | | | | | | | | | | | | | | |
June 30, 2013 | June 30, 2013 | | | | | | | | | | | | | | | |
| | | | Pre-Modification | | Post-Modification | | | | Pre-Modification | | Post-Modification | | | | | | | | | | | | | | | | |
| | Number of | | Outstanding Recorded | | Outstanding Recorded | | Number of | | Outstanding Recorded | | Outstanding Recorded | | | | | | | | | | | | | | | | |
(dollar amounts in thousands) | | TDRs | | Investment | | Investment | | TDRs | | Investment | | Investment | | | | | | | | | | | | | | | | |
Troubled Debt Restructurings | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-PCI Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | - | | $ | - | | $ | - | | 3 | | $ | 91 | | $ | 91 | | | | | | | | | | | | | | | | |
Agriculture | | 1 | | 18 | | 18 | | 1 | | 18 | | 18 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | 1 | | $ | 18 | | $ | 18 | | 4 | | $ | 109 | | $ | 109 | | | | | | | | | | | | | | | | |
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Shown in the following tables are loans that were modified as troubled debt restructurings within the twelve months prior to the balance sheet date indicated for which there was a payment default during the periods presented. |
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| | For the Three Months Ended | | For the Six Months Ended | | | | | | | | | | | | | | | | | | | | | | |
June 30, 2014 | June 30, 2014 | | | | | | | | | | | | | | | | | | | | | |
(dollar amounts in thousands) | | Number of | | Recorded | | Number of | | Recorded | | | | | | | | | | | | | | | | | | | | | | |
TDRs | Investment | TDRs | Investment | | | | | | | | | | | | | | | | | | | | | |
Troubled Debt Restructurings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
That Subsequently Defaulted | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 1 | | $ | 30 | | 1 | | $ | 30 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | 1 | | $ | 30 | | 1 | | $ | 30 | | | | | | | | | | | | | | | | | | | | | | |
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| | For the Three Months Ended | | For the Six Months Ended | | | | | | | | | | | | | | | | | | | | | | |
June 30, 2013 | June 30, 2013 | | | | | | | | | | | | | | | | | | | | | |
(dollar amounts in thousands) | | Number of | | Recorded | | Number of | | Recorded | | | | | | | | | | | | | | | | | | | | | | |
TDRs | Investment | TDRs | Investment | | | | | | | | | | | | | | | | | | | | | |
Troubled Debt Restructurings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
That Subsequently Defaulted | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | 1 | | $ | 97 | | 1 | | $ | 97 | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 2 | | 794 | | 3 | | 843 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals | | 3 | | $ | 891 | | 4 | | $ | 940 | | | | | | | | | | | | | | | | | | | | | | |
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The Bank actively works with the borrowers to resolve their delinquencies. |
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Credit Quality |
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The following tables stratify the loan portfolio by the Company’s internal risk grading system as well as certain other information concerning the credit quality of the non-PCI loan portfolio: |
|
(dollar amounts in thousands) | | | | Credit Risk Grades | | Days Past Due | | | | | |
| | Total Gross | | | | Special | | | | | | | | | | | 90+ and Still | | Non- | | Accruing | |
June 30, 2014 | | Loans | | Pass | | Mention | | Substandard | | Doubtful | | | 30-59 | | 60-89 | | Accruing | | Accruing | | TDR | |
Non-PCI Loans | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | |
Multi-family residential | | $ | 48,458 | | $ | 47,251 | | $ | - | | $ | 1,207 | | $ | - | | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Residential 1 to 4 family | | 112,653 | | 111,646 | | 309 | | 698 | | - | | | - | | - | | - | | 101 | | 132 | |
Home equity lines of credit | | 39,032 | | 38,682 | | - | | 350 | | - | | | - | | - | | - | | 100 | | - | |
Commercial | | 560,559 | | 531,191 | | 15,516 | | 13,852 | | - | | | - | | - | | - | | 2,109 | | 380 | |
Farmland | | 84,369 | | 81,193 | | 2,690 | | 486 | | - | | | - | | - | | - | | - | | 294 | |
Land | | 26,670 | | 18,288 | | 730 | | 7,652 | | - | | | - | | - | | - | | 5,903 | | 1,893 | |
Construction | | 18,059 | | 18,059 | | - | | - | | - | | | - | | - | | - | | - | | - | |
Commercial | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 143,895 | | 132,241 | | 4,165 | | 7,309 | | 180 | | | - | | - | | - | | 1,649 | | 3,736 | |
Agriculture | | 41,142 | | 39,736 | | 682 | | 724 | | - | | | - | | - | | - | | 724 | | - | |
Other | | 704 | | 704 | | - | | - | | - | | | - | | - | | - | | - | | - | |
Installment loans to individuals | | 9,071 | | 8,988 | | - | | 83 | | - | | | 1 | | - | | - | | 19 | | 71 | |
Overdrafts | | 296 | | 296 | | - | | - | | - | | | - | | - | | - | | - | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 1,084,908 | | $ | 1,028,275 | | $ | 24,092 | | $ | 32,361 | | $ | 180 | | | $ | 1 | | $ | - | | $ | - | | $ | 10,605 | | $ | 6,506 | |
|
(dollar amounts in thousands) | | | | Credit Risk Grades | | Days Past Due | | | | | |
| | Total Gross | | | | Special | | | | | | | | | | | 90+ and Still | | Non- | | Accruing | |
December 31, 2013 | | Loans | | Pass | | Mention | | Substandard | | Doubtful | | | 30-59 | | 60-89 | | Accruing | | Accruing | | TDR | |
Non-PCI Loans | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | |
Multi-family residential | | $ | 31,140 | | $ | 30,560 | | $ | - | | $ | 580 | | $ | - | | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Residential 1 to 4 family | | 88,904 | | 87,350 | | 490 | | 1,064 | | - | | | - | | - | | - | | 449 | | 499 | |
Home equity lines of credit | | 31,178 | | 31,021 | | - | | 157 | | - | | | - | | - | | - | | - | | - | |
Commercial | | 432,203 | | 414,058 | | 3,574 | | 14,571 | | - | | | - | | - | | - | | 672 | | 225 | |
Farmland | | 50,414 | | 47,988 | | 975 | | 1,451 | | - | | | - | | - | | - | | - | | - | |
Land | | 24,523 | | 15,244 | | 862 | | 8,417 | | - | | | - | | - | | - | | 5,910 | | 2,010 | |
Construction | | 13,699 | | 13,699 | | - | | - | | - | | | - | | - | | - | | - | | - | |
Commercial | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 119,121 | | 105,991 | | 5,276 | | 7,854 | | - | | | 100 | | - | | - | | 2,180 | | 3,119 | |
Agriculture | | 32,686 | | 31,279 | | 196 | | 1,211 | | - | | | - | | - | | - | | 789 | | - | |
Other | | 38 | | 38 | | - | | - | | - | | | - | | - | | - | | - | | - | |
Installment loans to individuals | | 3,246 | | 3,050 | | 10 | | 186 | | - | | | - | | 2 | | - | | 117 | | - | |
Overdrafts | | 332 | | 332 | | - | | - | | - | | | - | | - | | - | | - | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 827,484 | | $ | 780,610 | | $ | 11,383 | | $ | 35,491 | | $ | - | | | $ | 100 | | $ | 2 | | $ | - | | $ | 10,117 | | $ | 5,853 | |
|
(dollar amounts in thousands) | | | | Credit Risk Grades | | Days Past Due | | | | | |
| | Total Gross | | | | Special | | | | | | | | | | | 90+ and Still | | Non- | | Accruing | |
June 30, 2014 | | Loans | | Pass | | Mention | | Substandard | | Doubtful | | | 30-59 | | 60-89 | | Accruing | | Accruing | | TDR | |
PCI Loans | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | $ | 563 | | $ | - | | $ | - | | $ | 563 | | $ | - | | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Home equity lines of credit | | 80 | | - | | - | | 80 | | - | | | - | | - | | - | | - | | - | |
Commercial | | 4,974 | | 129 | | - | | 4,845 | | - | | | 553 | | - | | - | | - | | 224 | |
Farmland | | 1,709 | | - | | - | | 1,709 | | - | | | - | | - | | - | | - | | - | |
Land | | 969 | | 403 | | - | | 566 | | - | | | - | | - | | - | | - | | - | |
Construction | | - | | - | | - | | - | | - | | | - | | - | | - | | - | | - | |
Commercial | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 2,509 | | 50 | | - | | 2,349 | | 110 | | | - | | - | | - | | 806 | | - | |
Agriculture | | 1,171 | | - | | - | | 1,171 | | - | | | - | | - | | - | | - | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Totals | | $ | 11,975 | | $ | 582 | | $ | - | | $ | 11,283 | | $ | 110 | | | $ | 553 | | $ | - | | $ | - | | $ | 806 | | $ | 224 | |
|
Purchased Credit Impaired Loans |
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As part of the merger described in Note 2. Business Combination, the Company acquired on February 28, 2014, a portfolio of loans, some of which have shown evidence of credit deterioration since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount and unpaid principal balance of those loans are as follows: |
|
| | | June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(dollar amounts in thousands) | | | Unpaid Principal | | Carrying | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance | Amount | | | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | | $ | 891 | | $ | 563 | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines of credit | | | 98 | | 80 | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | 6,954 | | 4,974 | | | | | | | | | | | | | | | | | | | | | | | | | |
Farmland | | | 2,075 | | 1,709 | | | | | | | | | | | | | | | | | | | | | | | | | |
Land | | | 1,120 | | 969 | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate secured | | | 11,138 | | 8,295 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | | 3,202 | | 2,509 | | | | | | | | | | | | | | | | | | | | | | | | | |
Agriculture | | | 1,257 | | 1,171 | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | | 4,459 | | 3,680 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total net loans | | | $ | 15,597 | | $ | 11,975 | | | | | | | | | | | | | | | | | | | | | | | | | |
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Accretable yield, or income expected to be collected, is as follows: |
|
| | Six Months Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at January 1, 2014 | | $ | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
New loans purchased | | 4,673 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretion of income | | (404 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reclassifications from nonaccretable difference | | 284 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance at June 30, 2014 | | $ | 4,553 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Discount accretion on PCI loans included $287 thousand and $404 thousand, respectively, for the second quarter and six months ended June 30, 2014. |
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No ALLL was recorded on purchased credit impaired loans as of June 30, 2014. Purchased credit impaired loans acquired during the six months ended June 30, 2014 for which it was probable at acquisition that not all contractually required payments would be collected are as follows: |
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| | February 28, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Contractually required payments receivable of loans purchased during the period: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real Estate Secured | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential 1 to 4 family | | $ | 1,234 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home equity lines of credit | | 113 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | 9,186 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Farmland | | 2,858 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Land | | 1,296 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total real estate secured | | 14,687 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial and industrial | | 3,615 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Agriculture | | 1,525 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial | | 5,140 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total payments receivable | | $ | 19,827 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows expected to be collected at acquisition | | $ | 17,507 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fair value of purchase impaired loans at acquisition | | $ | 12,834 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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