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 

 

 
1 

 

 
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 

 

 
7 

 

 

 -

 

 
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

 

 -

 

 

 -

 

 
7 

 

 
7 

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 

 

 
4 

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 

 

$
8 

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 

 

 
6 

 

 
83 

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
2,444 

 

 
2,470 

 

 
199 

 

 
2,485 

 

 
30 

Indirect Marine

 
526 

 

 
730 

 

 
88 

 

 
733 

 

 
8 

HELOCs

 
100 

 

 
100 

 

 
10 

 

 
100 

 

 

 -

Other Consumer

 
276 

 

 
276 

 

 
102 

 

 
279 

 

 
5 

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 

 

$
9 

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 

 

 
6 

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
2 

 

$
1,357 

 

$
686 

 
1 

 

$
684 

 

$

 -

Commercial Real Estate - Owner Occupied
4 

 

 
1,467 

 

 

 -

 
4 

 

 
2,278 

 

 

 -

Commercial Real Estate - Non-Owner Occupied
4 

 

 
3,125 

 

 
112 

 
6 

 

 
3,771 

 

 

 -

Raw Land and Lots
13 

 

 
20,026 

 

 
5,721 

 
15 

 

 
20,741 

 

 

 -

Single Family Investment Real Estate
8 

 

 
1,902 

 

 

 -

 
13 

 

 
3,497 

 

 

 -

Commercial and Industrial
7 

 

 
751 

 

 

 -

 
7 

 

 
1,125 

 

 

 -

Other Commercial
1 

 

 
221 

 

 

 -

 

 -

 

 

 -

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage
8 

 

 
1,609 

 

 

 -

 
10 

 

 
2,318 

 

 

 -

Other Consumer
3 

 

 
103 

 

 

 -

 
3 

 

 
106 

 

 

 -

Total performing
50 

 

$
30,561 

 

$
6,519 

 
59 

 

$
34,520 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction
2 

 

$
518 

 

$

 -

 
3 

 

$
947 

 

$

 -

Commercial Real Estate - Owner Occupied
2 

 

 
161 

 

 

 -

 
3 

 

 
283 

 

 

 -

Raw Land and Lots
1 

 

 
937 

 

 

 -

 
2 

 

 
3,973 

 

 

 -

Single Family Investment Real Estate

 -

 

 

 -

 

 

 -

 
1 

 

 
50 

 

 

 -

Commercial and Industrial
8 

 

 
1,085 

 

 

 -

 
8 

 

 
1,195 

 

 

 -

Other Commercial
1 

 

 
66 

 

 

 -

 

 -

 

 

 -

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage
2 

 

 
783 

 

 

 -

 
2 

 

 
794 

 

 

 -

Other Consumer
1 

 

 
60 

 

 

 -

 
1 

 

 
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

 -

 

$

 -

 
1 

 

$
111 

Commercial and Industrial
1 

 

 
35 

 
1 

 

 
35 

Other Commercial

 -

 

 

 -

 
2 

 

 
287 

Total loan term extended at a market rate
1 

 

$
35 

 
4 

 

$
433 

 

 

 

 

 

 

 

 

 

 

Total
1 

 

$
35 

 
4 

 

$
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
1 

 

$
43 

 
1 

 

$
43 

Single Family Investment Real Estate

 -

 

 

 -

 
1 

 

 
210 

Consumer:

 

 

 

 

 

 

 

 

 

Mortgage

 -

 

 

 -

 
1 

 

 
603 

       Total interest only at market rate of interest
1 

 

$
43 

 
3 

 

$
856 

 

 

 

 

 

 

 

 

 

 

Term modification, at a market rate

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Commercial Construction
2 

 

$
704 

 
2 

 

$
704 

Commercial Real Estate - Owner Occupied
1 

 

 
933 

 
1 

 

 
933 

Commercial Real Estate - Non-Owner Occupied
1 

 

 
753 

 
1 

 

 
753 

Raw Land and Lots
3 

 

 
386 

 
3 

 

 
386 

Single Family Investment Real Estate
5 

 

 
1,326 

 
6 

 

 
1,953 

Commercial and Industrial
4 

 

 
1,125 

 
5 

 

 
1,180 

Consumer:

 

 

 

 

 

 

 

 

 

Mortgage
1 

 

 
525 

 
2 

 

 
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

 -

 

$

 -

 
1 

 

$
206 

Commercial and Industrial

 -

 

 

 -

 
1 

 

 
9 

Consumer:

 

 

 

 

 

 

 

 

 

Mortgage
1 

 

 
155 

 
1 

 

 
155 

Total loan term extended at a below market rate
1 

 

$
155 

 
3 

 

$
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

 

 
7 

 

 

 -

 

 

 -

 

 
7 

    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.