Quarterly report pursuant to Section 13 or 15(d)

LOANS AND ALLOWANCE FOR LOAN LOSSES

v2.4.0.8
LOANS AND ALLOWANCE FOR LOAN LOSSES
6 Months Ended
Jun. 30, 2014
LOANS AND ALLOWANCE FOR LOAN LOSSES [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES

 

4.LOANS AND ALLOWANCE FOR LOAN LOSSES

 

Loans are stated at their face amount, net of unearned income, and consist of the following at June 30, 2014 and December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

2014

 

2013

Commercial:

 

 

 

 

 

Commercial Construction

$

295,503 

 

$

213,675 

Commercial Real Estate - Owner Occupied

 

870,742 

 

 

500,764 

Commercial Real Estate - Non-Owner Occupied

 

1,455,369 

 

 

755,905 

Raw Land and Lots

 

212,475 

 

 

187,529 

Single Family Investment Real Estate

 

397,186 

 

 

237,640 

Commercial and Industrial

 

390,682 

 

 

215,702 

Other Commercial

 

80,337 

 

 

52,490 

Consumer:

 

 

 

 

 

Mortgage

 

505,004 

 

 

237,414 

Consumer Construction

 

75,815 

 

 

48,984 

Indirect Auto

 

185,319 

 

 

174,843 

Indirect Marine

 

40,189 

 

 

38,633 

HELOCs

 

498,280 

 

 

281,579 

Credit Card

 

23,432 

 

 

23,211 

Other Consumer

 

202,736 

 

 

70,999 

       Total

$

5,233,069 

 

$

3,039,368 

 

 

 

 

 

 

 

The following table shows the aging of the Company’s loan portfolio, by class, at June 30, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-59 Days Past Due

 

60-89 Days Past Due

 

Greater Than 90 Days and still Accruing

 

PCI (net of credit mark)

 

Nonaccrual

 

Current

 

Total Loans

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

 -

 

$

 -

 

$

 -

 

$

5,446 

 

$

1,065 

 

$

288,992 

 

$

295,503 

Commercial Real Estate - Owner Occupied

 

1,684 

 

 

1,436 

 

 

161 

 

 

31,619 

 

 

682 

 

 

835,160 

 

 

870,742 

Commercial Real Estate - Non-Owner Occupied

 

1,379 

 

 

1,160 

 

 

45 

 

 

41,412 

 

 

169 

 

 

1,411,204 

 

 

1,455,369 

Raw Land and Lots

 

346 

 

 

43 

 

 

44 

 

 

9,453 

 

 

5,921 

 

 

196,668 

 

 

212,475 

Single Family Investment Real Estate

 

742 

 

 

343 

 

 

77 

 

 

19,661 

 

 

5,737 

 

 

370,626 

 

 

397,186 

Commercial and Industrial

 

661 

 

 

321 

 

 

322 

 

 

4,944 

 

 

3,794 

 

 

380,640 

 

 

390,682 

Other Commercial

 

706 

 

 

66 

 

 

 -

 

 

2,358 

 

 

121 

 

 

77,086 

 

 

80,337 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

13,837 

 

 

3,043 

 

 

3,861 

 

 

10,974 

 

 

4,360 

 

 

468,929 

 

 

505,004 

Consumer Construction

 

208 

 

 

 -

 

 

 -

 

 

533 

 

 

 -

 

 

75,074 

 

 

75,815 

Indirect Auto

 

1,526 

 

 

130 

 

 

312 

 

 

 -

 

 

 -

 

 

183,351 

 

 

185,319 

Indirect Marine

 

155 

 

 

 -

 

 

 -

 

 

 -

 

 

327 

 

 

39,707 

 

 

40,189 

HELOCs

 

4,293 

 

 

1,066 

 

 

1,026 

 

 

2,847 

 

 

557 

 

 

488,491 

 

 

498,280 

Credit Card

 

180 

 

 

55 

 

 

182 

 

 

 -

 

 

 -

 

 

23,015 

 

 

23,432 

Other Consumer

 

2,424 

 

 

567 

 

 

840 

 

 

1,860 

 

 

366 

 

 

196,679 

 

 

202,736 

Total

$

28,141 

 

$

8,230 

 

$

6,870 

 

$

131,107 

 

$

23,099 

 

$

5,035,622 

 

$

5,233,069 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-59 Days Past Due

 

60-89 Days Past Due

 

Greater Than 90 Days and still Accruing

 

PCI (net of credit mark)

 

Nonaccrual

 

Current

 

Total Loans

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

 -

 

$

 -

 

$

 -

 

$

 -

 

$

1,596 

 

$

212,079 

 

$

213,675 

Commercial Real Estate - Owner Occupied

 

514 

 

 

 -

 

 

258 

 

 

 -

 

 

2,037 

 

 

497,955 

 

 

500,764 

Commercial Real Estate - Non-Owner Occupied

 

185 

 

 

42 

 

 

1,996 

 

 

 -

 

 

175 

 

 

753,507 

 

 

755,905 

Raw Land and Lots

 

922 

 

 

545 

 

 

 -

 

 

2,457 

 

 

2,560 

 

 

181,045 

 

 

187,529 

Single Family Investment Real Estate

 

1,783 

 

 

277 

 

 

563 

 

 

275 

 

 

1,689 

 

 

233,053 

 

 

237,640 

Commercial and Industrial

 

348 

 

 

152 

 

 

220 

 

 

 -

 

 

3,848 

 

 

211,134 

 

 

215,702 

Other Commercial

 

87 

 

 

 

 

50 

 

 

 -

 

 

126 

 

 

52,226 

 

 

52,490 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

6,779 

 

 

1,399 

 

 

1,141 

 

 

 -

 

 

2,446 

 

 

225,649 

 

 

237,414 

Consumer Construction

 

 -

 

 

 -

 

 

208 

 

 

 -

 

 

 -

 

 

48,776 

 

 

48,984 

Indirect Auto

 

2,237 

 

 

252 

 

 

349 

 

 

 

 

 -

 

 

171,998 

 

 

174,843 

Indirect Marine

 

459 

 

 

 -

 

 

 -

 

 

 -

 

 

288 

 

 

37,886 

 

 

38,633 

HELOCs

 

2,124 

 

 

422 

 

 

1,190 

 

 

787 

 

 

43 

 

 

277,013 

 

 

281,579 

Credit Card

 

105 

 

 

133 

 

 

281 

 

 

 -

 

 

 -

 

 

22,692 

 

 

23,211 

Other Consumer

 

888 

 

 

124 

 

 

490 

 

 

96 

 

 

227 

 

 

69,174 

 

 

70,999 

Total

$

16,431 

 

$

3,347 

 

$

6,746 

 

$

3,622 

 

$

15,035 

 

$

2,994,187 

 

$

3,039,368 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans totaled $23.1 million and $15.0 million at June 30, 2014 and December 31, 2013, respectively.  There were no nonaccrual loans excluded from impaired loan disclosure in 2014 or 2013.  Loans past due 90 days or more and accruing interest totaled $6.9 million and $6.7 million at June 30, 2014 and December 31, 2013, respectively.

 

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at June 30, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-89 Days Past Due

 

Greater than 90 Days

 

Current

 

Total

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

72 

 

$

692 

 

$

4,682 

 

$

5,446 

Commercial Real Estate - Owner Occupied

 

1,694 

 

 

984 

 

 

28,941 

 

 

31,619 

Commercial Real Estate - Non-Owner Occupied

 

4,079 

 

 

2,404 

 

 

34,929 

 

 

41,412 

Raw Land and Lots

 

478 

 

 

158 

 

 

8,817 

 

 

9,453 

Single Family Investment Real Estate

 

968 

 

 

1,537 

 

 

17,156 

 

 

19,661 

Commercial and Industrial

 

418 

 

 

373 

 

 

4,153 

 

 

4,944 

Other Commercial

 

434 

 

 

772 

 

 

1,152 

 

 

2,358 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

3,475 

 

 

4,061 

 

 

3,438 

 

 

10,974 

Consumer Construction

 

 -

 

 

533 

 

 

 -

 

 

533 

HELOCs

 

285 

 

 

767 

 

 

1,795 

 

 

2,847 

Other Consumer

 

68 

 

 

304 

 

 

1,488 

 

 

1,860 

Total

$

11,971 

 

$

12,585 

 

$

106,551 

 

$

131,107 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-89 Days Past Due

 

Greater than 90 Days

 

Current

 

Total

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Raw Land and Lots

$

 -

 

$

 -

 

$

2,457 

 

$

2,457 

Single Family Investment Real Estate

 

 -

 

 

 -

 

 

275 

 

 

275 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

Indirect Auto

 

 -

 

 

 -

 

 

 

 

HELOCs

 

 -

 

 

31 

 

 

756 

 

 

787 

Other Consumer

 

40 

 

 

 -

 

 

56 

 

 

96 

Total

$

40 

 

$

31 

 

$

3,551 

 

$

3,622 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually.  The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by class at June 30, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recorded Investment

 

Unpaid Principal Balance

 

Related Allowance

 

YTD Average Investment

 

Interest Income Recognized

Loans without a specific allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

5,777 

 

$

5,893 

 

$

 -

 

$

6,106 

 

$

117 

Commercial Real Estate - Owner Occupied

 

3,844 

 

 

3,867 

 

 

 -

 

 

3,877 

 

 

99 

Commercial Real Estate - Non-Owner Occupied

 

21,230 

 

 

21,325 

 

 

 -

 

 

21,586 

 

 

483 

Raw Land and Lots

 

48,231 

 

 

50,969 

 

 

 -

 

 

59,498 

 

 

1,307 

Single Family Investment Real Estate

 

3,198 

 

 

3,614 

 

 

 -

 

 

3,634 

 

 

74 

Commercial and Industrial

 

3,817 

 

 

6,843 

 

 

 -

 

 

6,923 

 

 

17 

Other Commercial

 

711 

 

 

796 

 

 

 -

 

 

808 

 

 

20 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

4,213 

 

 

4,293 

 

 

 -

 

 

4,305 

 

 

13 

Indirect Auto

 

 -

 

 

13 

 

 

 -

 

 

15 

 

 

 -

HELOCs

 

1,287 

 

 

1,928 

 

 

 -

 

 

1,898 

 

 

Other Consumer

 

101 

 

 

224 

 

 

 -

 

 

222 

 

 

 -

Total impaired loans without a specific allowance

$

92,409 

 

$

99,765 

 

$

 -

 

$

108,872 

 

$

2,134 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans with a specific allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

679 

 

$

679 

 

$

91 

 

$

677 

 

$

Commercial Real Estate - Owner Occupied

 

3,240 

 

 

3,691 

 

 

281 

 

 

3,723 

 

 

74 

Commercial Real Estate - Non-Owner Occupied

 

336 

 

 

336 

 

 

33 

 

 

343 

 

 

12 

Raw Land and Lots

 

5,209 

 

 

5,252 

 

 

290 

 

 

5,304 

 

 

60 

Single Family Investment Real Estate

 

7,830 

 

 

8,076 

 

 

1,023 

 

 

8,115 

 

 

86 

Commercial and Industrial

 

2,798 

 

 

3,077 

 

 

393 

 

 

3,186 

 

 

48 

Other Commercial

 

66 

 

 

81 

 

 

 

 

83 

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

2,444 

 

 

2,470 

 

 

199 

 

 

2,485 

 

 

30 

Indirect Marine

 

526 

 

 

730 

 

 

88 

 

 

733 

 

 

HELOCs

 

100 

 

 

100 

 

 

10 

 

 

100 

 

 

 -

Other Consumer

 

276 

 

 

276 

 

 

102 

 

 

279 

 

 

Total impaired loans with a specific allowance

$

23,504 

 

$

24,768 

 

$

2,516 

 

$

25,028 

 

$

331 

Total impaired loans

$

115,913 

 

$

124,533 

 

$

2,516 

 

$

133,900 

 

$

2,465 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the Company’s impaired loans, by class, at December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recorded Investment

 

Unpaid Principal Balance

 

Related Allowance

 

YTD Average Investment

 

Interest Income Recognized

Loans without a specific allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

10,520 

 

$

10,523 

 

$

 -

 

$

9,073 

 

$

282 

Commercial Real Estate - Owner Occupied

 

4,281 

 

 

4,648 

 

 

 -

 

 

4,845 

 

 

206 

Commercial Real Estate - Non-Owner Occupied

 

15,012 

 

 

15,100 

 

 

 -

 

 

15,288 

 

 

572 

Raw Land and Lots

 

52,259 

 

 

52,551 

 

 

 -

 

 

61,606 

 

 

2,024 

Single Family Investment Real Estate

 

5,520 

 

 

6,021 

 

 

 -

 

 

6,396 

 

 

261 

Commercial and Industrial

 

4,035 

 

 

6,835 

 

 

 -

 

 

7,083 

 

 

195 

Other Commercial

 

55 

 

 

134 

 

 

 -

 

 

134 

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

1,361 

 

 

1,361 

 

 

 -

 

 

1,374 

 

 

60 

Indirect Auto

 

11 

 

 

19 

 

 

 -

 

 

26 

 

 

 -

Indirect Marine

 

495 

 

 

874 

 

 

 -

 

 

887 

 

 

42 

HELOCs

 

1,604 

 

 

1,755 

 

 

 -

 

 

1,921 

 

 

11 

Other Consumer

 

162 

 

 

211 

 

 

 -

 

 

214 

 

 

 -

Total impaired loans without a specific allowance

$

95,315 

 

$

100,032 

 

$

 -

 

$

108,847 

 

$

3,653 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans with a specific allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

357 

 

$

692 

 

$

135 

 

$

1,136 

 

$

Commercial Real Estate - Owner Occupied

 

3,797 

 

 

3,937 

 

 

284 

 

 

4,000 

 

 

181 

Commercial Real Estate - Non-Owner Occupied

 

549 

 

 

597 

 

 

76 

 

 

616 

 

 

40 

Raw Land and Lots

 

1,875 

 

 

1,905 

 

 

83 

 

 

1,985 

 

 

101 

Single Family Investment Real Estate

 

3,389 

 

 

3,676 

 

 

335 

 

 

3,894 

 

 

114 

Commercial and Industrial

 

2,722 

 

 

3,086 

 

 

204 

 

 

3,214 

 

 

84 

Other Commercial

 

255 

 

 

269 

 

 

35 

 

 

254 

 

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

4,041 

 

 

4,147 

 

 

660 

 

 

4,183 

 

 

123 

Other Consumer

 

321 

 

 

343 

 

 

151 

 

 

350 

 

 

10 

Total impaired loans with a specific allowance

$

17,306 

 

$

18,652 

 

$

1,963 

 

$

19,632 

 

$

668 

Total impaired loans

$

112,621 

 

$

118,684 

 

$

1,963 

 

$

128,479 

 

$

4,321 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties.  TDRs totaled $34.2 million and  $41.8 million as of June 30, 2014 and December 31, 2013, respectively.  All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology.  For the quarter ended June 30, 2014, the recorded investment in restructured loans prior to modifications was not materially impacted by the modification. 

 

The following table provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in nonaccrual status, which are considered to be nonperforming, as of June 30, 2014 and December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2014

 

December 31, 2013

 

No. of Loans

 

Recorded Investment

 

Outstanding Commitment

 

No. of Loans

 

Recorded Investment

 

Outstanding Commitment

Performing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

 

$

1,357 

 

$

686 

 

 

$

684 

 

$

 -

Commercial Real Estate - Owner Occupied

 

 

1,467 

 

 

 -

 

 

 

2,278 

 

 

 -

Commercial Real Estate - Non-Owner Occupied

 

 

3,125 

 

 

112 

 

 

 

3,771 

 

 

 -

Raw Land and Lots

13 

 

 

20,026 

 

 

5,721 

 

15 

 

 

20,741 

 

 

 -

Single Family Investment Real Estate

 

 

1,902 

 

 

 -

 

13 

 

 

3,497 

 

 

 -

Commercial and Industrial

 

 

751 

 

 

 -

 

 

 

1,125 

 

 

 -

Other Commercial

 

 

221 

 

 

 -

 

 -

 

 

 -

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

1,609 

 

 

 -

 

10 

 

 

2,318 

 

 

 -

Other Consumer

 

 

103 

 

 

 -

 

 

 

106 

 

 

 -

Total performing

50 

 

$

30,561 

 

$

6,519 

 

59 

 

$

34,520 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

 

$

518 

 

$

 -

 

 

$

947 

 

$

 -

Commercial Real Estate - Owner Occupied

 

 

161 

 

 

 -

 

 

 

283 

 

 

 -

Raw Land and Lots

 

 

937 

 

 

 -

 

 

 

3,973 

 

 

 -

Single Family Investment Real Estate

 -

 

 

 -

 

 

 -

 

 

 

50 

 

 

 -

Commercial and Industrial

 

 

1,085 

 

 

 -

 

 

 

1,195 

 

 

 -

Other Commercial

 

 

66 

 

 

 -

 

 -

 

 

 -

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 

 

783 

 

 

 -

 

 

 

794 

 

 

 -

Other Consumer

 

 

60 

 

 

 -

 

 

 

62 

 

 

 -

Total nonperforming

17 

 

$

3,610 

 

$

 -

 

20 

 

$

7,304 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total performing and nonperforming

67 

 

$

34,171 

 

$

6,519 

 

79 

 

$

41,824 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company considers a default of a restructured loan to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs.  During the three and six months ended June  30,  2014, the Company identified one loan, totaling approximately $24,000, that went into default that had been restructured in the twelve-month period prior to the time of default.  This loan was a mortgage loan which had a term modification at a market rate.  During the three and six months ended June 30, 2013, the Company identified one loan, totaling approximately $43,000, that went into default that had been restructured in the twelve-month period prior to the time of default.  This loan was a raw land and lot loan which was modified to an interest only loan with a market rate of interest.

 

The following table shows, by class and modification type, TDRs that occurred during the three and six months ended June 30, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30, 2014

 

June 30, 2014

 

No. of Loans

 

Recorded investment at period end

 

No. of Loans

 

Recorded investment at period end

Term modification, at a market rate

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Single Family Investment Real Estate

 -

 

$

 -

 

 

$

111 

Commercial and Industrial

 

 

35 

 

 

 

35 

Other Commercial

 -

 

 

 -

 

 

 

287 

Total loan term extended at a market rate

 

$

35 

 

 

$

433 

 

 

 

 

 

 

 

 

 

 

Total

 

$

35 

 

 

$

433 

 

 

 

 

 

 

 

 

 

 

 

The following table shows, by class and modification type, TDRs that occurred during the three and six months ended June 30, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30, 2013

 

June 30, 2013

 

No. of Loans

 

Recorded investment at period end

 

No. of Loans

 

Recorded investment at period end

Modified to interest only, at a market rate

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Raw Land and Lots

 

$

43 

 

 

$

43 

Single Family Investment Real Estate

 -

 

 

 -

 

 

 

210 

Consumer:

 

 

 

 

 

 

 

 

 

Mortgage

 -

 

 

 -

 

 

 

603 

       Total interest only at market rate of interest

 

$

43 

 

 

$

856 

 

 

 

 

 

 

 

 

 

 

Term modification, at a market rate

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Commercial Construction

 

$

704 

 

 

$

704 

Commercial Real Estate - Owner Occupied

 

 

933 

 

 

 

933 

Commercial Real Estate - Non-Owner Occupied

 

 

753 

 

 

 

753 

Raw Land and Lots

 

 

386 

 

 

 

386 

Single Family Investment Real Estate

 

 

1,326 

 

 

 

1,953 

Commercial and Industrial

 

 

1,125 

 

 

 

1,180 

Consumer:

 

 

 

 

 

 

 

 

 

Mortgage

 

 

525 

 

 

 

690 

Total loan term extended at a market rate

17 

 

$

5,752 

 

20 

 

$

6,599 

 

 

 

 

 

 

 

 

 

 

Term modification, below market rate

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Commercial Real Estate - Owner Occupied

 -

 

$

 -

 

 

$

206 

Commercial and Industrial

 -

 

 

 -

 

 

 

Consumer:

 

 

 

 

 

 

 

 

 

Mortgage

 

 

155 

 

 

 

155 

Total loan term extended at a below market rate

 

$

155 

 

 

$

370 

Total

19 

 

$

5,950 

 

26 

 

$

7,825 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the six months ended June 30, 2014.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

Consumer

 

Unallocated

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of the year

 

$

19,856 

 

$

10,227 

 

$

52 

 

$

30,135 

    Recoveries credited to allowance

 

 

1,599 

 

 

572 

 

 

 -

 

 

2,171 

    Loans charged off

 

 

(1,068)

 

 

(1,359)

 

 

 -

 

 

(2,427)

    Provision charged to operations

 

 

294 

 

 

1,296 

 

 

(90)

 

 

1,500 

Balance, end of period

 

$

20,681 

 

$

10,736 

 

$

(38)

 

$

31,379 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance, ALL:

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$

2,117 

 

$

399 

 

$

 -

 

$

2,516 

Loans collectively evaluated for impairment

 

 

18,564 

 

 

10,337 

 

 

(38)

 

 

28,863 

Loans acquired with deteriorated credit quality

 

 

 -

 

 

 -

 

 

 -

 

 

 -

    Total

 

$

20,681 

 

$

10,736 

 

$

(38)

 

$

31,379 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance, Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$

104,620 

 

$

8,047 

 

$

 -

 

$

112,667 

Loans collectively evaluated for impairment

 

 

3,482,781 

 

 

1,506,514 

 

 

 -

 

 

4,989,295 

Loans acquired with deteriorated credit quality

 

 

114,893 

 

 

16,214 

 

 

 -

 

 

131,107 

    Total

 

$

3,702,294 

 

$

1,530,775 

 

$

 -

 

$

5,233,069 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the year ended December 31, 2013.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

Consumer

 

Unallocated

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of the year

 

$

24,821 

 

$

10,107 

 

$

(12)

 

$

34,916 

    Recoveries credited to allowance

 

 

1,496 

 

 

1,285 

 

 

 -

 

 

2,781 

    Loans charged off

 

 

(8,534)

 

 

(5,084)

 

 

 -

 

 

(13,618)

    Provision charged to operations

 

 

2,073 

 

 

3,919 

 

 

64 

 

 

6,056 

Balance, end of period

 

$

19,856 

 

$

10,227 

 

$

52 

 

$

30,135 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance, ALL:

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$

1,152 

 

$

811 

 

$

 -

 

$

1,963 

Loans collectively evaluated for impairment

 

 

18,704 

 

 

9,416 

 

 

52 

 

 

28,172 

Loans acquired with deteriorated credit quality

 

 

 -

 

 

 -

 

 

 -

 

 

 -

    Total

 

$

19,856 

 

$

10,227 

 

$

52 

 

$

30,135 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance, Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$

101,894 

 

$

7,105 

 

$

 -

 

$

108,999 

Loans collectively evaluated for impairment

 

 

2,059,079 

 

 

867,668 

 

 

 -

 

 

2,926,747 

Loans acquired with deteriorated credit quality

 

 

2,732 

 

 

890 

 

 

 -

 

 

3,622 

    Total

 

$

2,163,705 

 

$

875,663 

 

$

 -

 

$

3,039,368 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the allowance for loan loss activity, balances for allowance for credit losses, and loans based on impairment methodology by portfolio segment for the six months ended June 30, 2013.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

Consumer

 

Unallocated

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of the year

 

$

24,821 

 

$

10,107 

 

$

(12)

 

$

34,916 

    Recoveries credited to allowance

 

 

944 

 

 

611 

 

 

 -

 

 

1,555 

    Loans charged off

 

 

(2,970)

 

 

(2,218)

 

 

 -

 

 

(5,188)

    Provision charged to operations

 

 

1,713 

 

 

1,303 

 

 

34 

 

 

3,050 

Balance, end of period

 

$

24,508 

 

$

9,803 

 

$

22 

 

$

34,333 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance, ALL:

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$

6,075 

 

$

1,502 

 

$

 -

 

$

7,577 

Loans collectively evaluated for impairment

 

 

18,426 

 

 

8,301 

 

 

22 

 

 

26,749 

Loans acquired with deteriorated credit quality

 

 

 

 

 -

 

 

 -

 

 

    Total

 

$

24,508 

 

$

9,803 

 

$

22 

 

$

34,333 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance, Loans:

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$

120,659 

 

$

9,140 

 

$

 -

 

$

129,799 

Loans collectively evaluated for impairment

 

 

2,007,816 

 

 

859,267 

 

 

 -

 

 

2,867,083 

Loans acquired with deteriorated credit quality

 

 

3,039 

 

 

934 

 

 

 -

 

 

3,973 

    Total

 

$

2,131,514 

 

$

869,341 

 

$

 -

 

$

3,000,855 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company uses the past due status and trends as the primary credit quality indicator for the consumer loan portfolio segment while a risk rating system is utilized for commercial loans.  Commercial loans are graded on a scale of 1 through 9.  A general description of the characteristics of the risk grades follows: 

 

·

Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;

·

Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;

·

Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;

·

Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan;

·

Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay;

·

Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position;

·

Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected;

·

Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; and

·

Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

 

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of June 30, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-3

 

4

 

5

 

6

 

7

 

8

 

Total

Commercial Construction

$

17,940 

 

$

243,431 

 

$

11,967 

 

$

13,592 

 

$

3,127 

 

$

 -

 

$

290,057 

Commercial Real Estate - Owner Occupied

 

166,893 

 

 

633,295 

 

 

13,738 

 

 

19,447 

 

 

5,750 

 

 

 -

 

 

839,123 

Commercial Real Estate - Non-Owner Occupied

 

283,010 

 

 

1,058,033 

 

 

30,891 

 

 

21,288 

 

 

20,735 

 

 

 -

 

 

1,413,957 

Raw Land and Lots

 

11,191 

 

 

116,476 

 

 

21,565 

 

 

6,394 

 

 

47,396 

 

 

 -

 

 

203,022 

Single Family Investment Real Estate

 

49,224 

 

 

299,884 

 

 

9,794 

 

 

8,671 

 

 

9,952 

 

 

 -

 

 

377,525 

Commercial and Industrial

 

126,221 

 

 

239,941 

 

 

7,368 

 

 

5,960 

 

 

6,248 

 

 

 -

 

 

385,738 

Other Commercial

 

31,599 

 

 

36,203 

 

 

6,845 

 

 

2,556 

 

 

776 

 

 

 -

 

 

77,979 

Total

$

686,078 

 

$

2,627,263 

 

$

102,168 

 

$

77,908 

 

$

93,984 

 

$

 -

 

$

3,587,401 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-3

 

4

 

5

 

6

 

7

 

8

 

Total

Commercial Construction

$

24,399 

 

$

148,251 

 

$

20,370 

 

$

13,772 

 

$

6,883 

 

$

 -

 

$

213,675 

Commercial Real Estate - Owner Occupied

 

149,632 

 

 

324,394 

 

 

10,017 

 

 

10,926 

 

 

5,795 

 

 

 -

 

 

500,764 

Commercial Real Estate - Non-Owner Occupied

 

224,702 

 

 

453,279 

 

 

21,953 

 

 

46,084 

 

 

9,887 

 

 

 -

 

 

755,905 

Raw Land and Lots

 

8,648 

 

 

98,927 

 

 

14,132 

 

 

16,439 

 

 

46,926 

 

 

 -

 

 

185,072 

Single Family Investment Real Estate

 

38,327 

 

 

168,564 

 

 

12,302 

 

 

11,522 

 

 

6,650 

 

 

 -

 

 

237,365 

Commercial and Industrial

 

68,748 

 

 

123,585 

 

 

8,254 

 

 

8,752 

 

 

3,822 

 

 

2,541 

 

 

215,702 

Other Commercial

 

18,593 

 

 

23,160 

 

 

8,529 

 

 

1,897 

 

 

311 

 

 

 -

 

 

52,490 

Total

$

533,049 

 

$

1,340,160 

 

$

95,557 

 

$

109,392 

 

$

80,274 

 

$

2,541 

 

$

2,160,973 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of June 30, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

5

 

6

 

7

 

8

 

Total

Commercial Construction

$

 -

 

$

 -

 

$

3,927 

 

$

1,052 

 

$

467 

 

$

5,446 

Commercial Real Estate - Owner Occupied

 

538 

 

 

3,507 

 

 

9,459 

 

 

18,115 

 

 

 -

 

 

31,619 

Commercial Real Estate - Non-Owner Occupied

 

695 

 

 

1,125 

 

 

15,236 

 

 

24,356 

 

 

 -

 

 

41,412 

Raw Land and Lots

 

1,435 

 

 

2,156 

 

 

2,092 

 

 

3,770 

 

 

 -

 

 

9,453 

Single Family Investment Real Estate

 

1,671 

 

 

1,277 

 

 

7,121 

 

 

9,592 

 

 

 -

 

 

19,661 

Commercial and Industrial

 

495 

 

 

 -

 

 

1,296 

 

 

3,051 

 

 

102 

 

 

4,944 

Other Commercial

 

 -

 

 

 -

 

 

368 

 

 

1,990 

 

 

 -

 

 

2,358 

Total

$

4,834 

 

$

8,065 

 

$

39,499 

 

$

61,926 

 

$

569 

 

$

114,893 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of December 31, 2013 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

5

 

6

 

7

 

8

 

Total

Raw Land and Lots

$

 -

 

$

653 

 

$

 -

 

$

1,804 

 

$

 -

 

$

2,457 

Single Family Investment Real Estate

 

275 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

275 

Total

$

275 

 

$

653 

 

$

 -

 

$

1,804 

 

$

 -

 

$

2,732 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase.  The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows. 

 

The following shows changes in the Company’s PCI loan portfolio and accretable yield for loans accounted for under ASC 310-30 for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

For the Six Months Ended

 

June 30, 2014

 

June 30, 2013

 

Accretable Yield

 

Carrying Amount of Loans

 

Accretable Yield

 

Carrying Amount of Loans

Balance at beginning of period

$

2,980 

 

$

3,622 

 

$

3,147 

 

$

4,565 

Additions

 

34,653 

 

 

145,454 

 

 

 -

 

 

 -

Accretion

 

(3,677)

 

 

 -

 

 

 -

 

 

 -

Charge-offs

 

 -

 

 

 -

 

 

(54)

 

 

(96)

Transfers to OREO

 

 -

 

 

(294)

 

 

 -

 

 

(201)

Payments received, net

 

 -

 

 

(17,675)

 

 

 -

 

 

(295)

Other, net

 

(1,365)

 

 

 -

 

 

 -

 

 

 -

Balance at end of period

$

32,591 

 

$

131,107 

 

$

3,093 

 

$

3,973 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans in the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, totaled $2.2 billion at June 30, 2014 and $377.8 million at December 31, 2013; the remaining discount on these loans totaled $25.7 million and $3.3 million, respectively.