Quarterly report pursuant to Section 13 or 15(d)

Loans and Allowance for Loan Losses

v2.4.0.6
Loans and Allowance for Loan Losses
 3 Months Ended
Mar. 31, 2013
Loans and Allowance for Loan Losses [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES
3. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of unearned income, and consist of the following at March 31, 2013 and December 31, 2012 (dollars in thousands):

 

                 
    March 31,
2013		     December 31,
2012		  

Commercial:

                

Commercial Construction

   $ 202,225     $ 202,344  

Commercial Real Estate - Owner Occupied

     512,029       513,671  

Commercial Real Estate - Non-Owner Occupied

     705,036       682,760  

Raw Land and Lots

     202,114       205,726  

Single Family Investment Real Estate

     230,673       233,395  

Commercial and Industrial

     204,257       217,661  

Other Commercial

     53,865       47,551  

Consumer:

                

Mortgage

     222,949       220,567  

Consumer Construction

     39,306       33,969  

Indirect Auto

     163,491       157,518  

Indirect Marine

     39,118       36,586  

HELOCs

     283,070       288,092  

Credit Card

     21,204       21,968  

Other Consumer

     94,210       105,039  
   

 

 

    

 

 

  

Total

   $ 2,973,547     $ 2,966,847  
   

 

 

    

 

 

  

 

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

 

                                                         
    30-59 Days
Past Due		     60-89 Days
Past Due		     Greater Than
90 Days and
still Accruing		     Purchased
Impaired (net of
credit mark)		     Nonaccrual     Current     Total Loans  

Commercial:

                                                        

Commercial Construction

   $ 189     $ —       $ —       $ —       $ 4,547     $ 197,489     $ 202,225  

Commercial Real Estate - Owner Occupied

     1,518       309       304       221       2,184       507,493       512,029  

Commercial Real Estate - Non-Owner Occupied

     957       417       156       —         804       702,702       705,036  

Raw Land and Lots

     332       1,003       43       2,555       6,353       191,828       202,114  

Single Family Investment Real Estate

     323       25       561       302       2,117       227,345       230,673  

Commercial and Industrial

     464       90       600       —         2,261       200,842       204,257  

Other Commercial

     390       —         441       —         190       52,844       53,865  

Consumer:

                                                        

Mortgage

     6,275       1,610       1,362       —         1,533       212,169       222,949  

Consumer Construction

     —         —         —         —         239       39,067       39,306  

Indirect Auto

     1,320       237       273       17       —         161,644       163,491  

Indirect Marine

     65       —         114       —         158       38,781       39,118  

HELOCs

     774       367       1,371       821       2,173       277,564       283,070  

Credit Card

     181       153       227       —         —         20,643       21,204  

Other Consumer

     1,275       283       735       103       474       91,340       94,210  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 14,063     $ 4,494     $ 6,187     $ 4,019     $ 23,033     $ 2,921,751     $ 2,973,547  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2012 (dollars in thousands):

 

                                                         
    30-59 Days
Past Due		     60-89 Days
Past Due		     Greater Than
90 Days and
still Accruing		     Purchased
Impaired (net of
credit mark)		     Nonaccrual     Current     Total Loans  

Commercial:

                                                        

Commercial Construction

   $ —       $ —       $ —       $ —       $ 5,781     $ 196,563     $ 202,344  

Commercial Real Estate - Owner Occupied

     2,105       153       1,711       247       2,206       507,249       513,671  

Commercial Real Estate - Non-Owner Occupied

     866       63       207       —         812       680,812       682,760  

Raw Land and Lots

     277       —         75       2,942       8,760       193,672       205,726  

Single Family Investment Real Estate

     1,819       261       756       326       3,420       226,813       233,395  

Commercial and Industrial

     506       270       441       79       2,036       214,329       217,661  

Other Commercial

     70       182       1       —         193       47,105       47,551  

Consumer:

                                                        

Mortgage

     5,610       2,244       3,017       —         747       208,949       220,567  

Consumer Construction

     157       —         —         —         235       33,577       33,969  

Indirect Auto

     2,504       276       329       21       —         154,388       157,518  

Indirect Marine

     67       —          114       —         158       36,247       36,586  

HELOCs

     3,063       640       1,239       845       1,325       280,980       288,092  

Credit Card

     269       101       397       —         —         21,201       21,968  

Other Consumer

     1,525       487       556       105       533       101,833       105,039  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 18,838     $ 4,677     $ 8,843     $ 4,565     $ 26,206     $ 2,903,718     $ 2,966,847  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Nonaccrual loans totaled $23.0 million, $26.2 million, and $42.4 million at March 31, 2013, December 31, 2012, and March 31, 2012, respectively. There were no nonaccrual loans excluded from impaired loan disclosure in 2013 or 2012. Loans past due 90 days or more and accruing interest totaled $6.2 million, $8.8 million, and $12.3 million at March 31, 2013, December 31,2012, and March 31, 2012, respectively.

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

 

                                 
    30-89 Days
Past Due		     Greater than
90 Days		     Current     Total  

Commercial:

                                

Commercial Real Estate - Owner Occupied

   $ —       $ 173     $ 48     $ 221  

Raw Land and Lots

     —         —         2,555       2,555  

Single Family Investment Real Estate

     —         12       290       302  

Consumer:

                                

Indirect Auto

     —         2       15       17  

HELOCs

     15       32       774       821  

Other Consumer

     —         —         103       103  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 15     $ 219     $ 3,785     $ 4,019  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

The following table shows purchased impaired commercial and consumer loan portfolios, by class and their delinquency status at December 31, 2012 (dollars in thousands):

 

                                 
    30-89 Days
Past Due		     Greater than
90 Days 		    Current     Total  

Commercial:

                                

Commercial Real Estate - Owner Occupied

   $  —       $ 193     $ 54     $ 247  

Raw Land and Lots

     —         81       2,861       2,942  

Single Family Investment Real Estate

     —         14       312       326  

Commercial and Industrial

     —         79       —         79  

Consumer:

                                

Indirect Auto

     3       2       16       21  

HELOCs

     —         51       794       845  

Other Consumer

     —         —         105       105  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 3     $ 420     $ 4,142     $ 4,565  
   

 

 

    

 

 

    

 

 

    

 

 

  

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. At March 31, 2013, the Company had $145.7 million in loans considered to be impaired of which $11.8 million were collectively evaluated for impairment and $133.9 million were individually evaluated for impairment. The following table shows the Company’s impaired loans individually evaluated for impairment, by class, at March 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

   $ 18,766     $ 18,768     $ —       $ 18,444     $ 245  

Commercial Real Estate - Owner Occupied

     10,117       10,214       —         10,258       134  

Commercial Real Estate - Non-Owner Occupied

     11,384       11,466       —         12,938       162  

Raw Land and Lots

     34,101       34,168       —         34,480       310  

Single Family Investment Real Estate

     3,394       3,772       —         3,786       37  

Commercial and Industrial

     1,970       2,095       —         2,096       23  

Consumer:

                                        

Mortgage

     1,229       1,229       —         1,229       10  

Indirect Marine

     158       283       —         283       —    

HELOCs

     1,080       1,179       —         1,690       —    

Other Consumer

     12       13       —         13       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans without a specific allowance

   $ 82,211     $ 83,187     $ —       $ 85,217     $ 921  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Loans with a specific allowance

                                        

Commercial:

                                        

Commercial Construction

   $ 8,264     $ 8,747     $ 460     $ 8,861     $ 55  

Commercial Real Estate - Owner Occupied

     2,674       2,827       808       2,833       7  

Commercial Real Estate - Non-Owner Occupied

     13,617       13,659       634       13,682       182  

Raw Land and Lots

     11,294       12,413       1,217       12,416       81  

Single Family Investment Real Estate

     3,059       3,436       249       3,441       12  

Commercial and Industrial

     8,541       8,622       1,049       8,679       87  

Other Commercial

     134       134       28       134       —    

Consumer:

                                        

Mortgage

     958       959       39       960       —    

Consumer Construction

     239       270       66       259       —    

HELOCs

     2,408       2,469       965       2,675       3  

Other Consumer

     462       496       197       496       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with a specific allowance

   $ 51,650     $ 54,032     $ 5,712     $ 54,436     $ 427  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans individually evaluated for impairment

   $ 133,861     $ 137,219     $ 5,712     $ 139,653     $ 1,348  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

At December 31, 2012, the Company had $155.4 million in loans considered to be impaired of which $13.0 million were collectively evaluated for impairment and $142.4 million were individually evaluated for impairment. The following table shows the Company’s impaired loans individually evaluated for impairment, by class, at December 31, 2012 (dollars in thousands):

 

                                         
    Recorded
Investment		     Unpaid
Principal
Balance		     Related
Allowance		     YTD
Average
Investment		     Interest
Income
Recognized		  

Loans without a specific allowance

                                        

Commercial:

                                        

Commercial Construction

   $ 28,212     $ 28,695     $ —       $ 28,925     $ 1,237  

Commercial Real Estate - Owner Occupied

     13,356       13,449       —         14,362       773  

Commercial Real Estate - Non-Owner Occupied

     13,997       14,076       —         15,153       768  

Raw Land and Lots

     40,421       40,485       —         43,162       1,537  

Single Family Investment Real Estate

     5,348       6,046       —         6,887       242  

Commercial and Industrial

     1,582       1,610       —         1,926       105  

Consumer:

                                        

Mortgage

     857       857       —         892       43  

Indirect Auto

     4       4       —         8       —    

Indirect Marine

     158       283       —         283       3  

HELOCs

     1,330       1,429       —         1,481       5  

Other Consumer

     125       127       —         129       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans without a specific allowance

   $ 105,390     $ 107,061     $ —       $ 113,208     $ 4,713  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Loans with a specific allowance

                                        

Commercial:

                                        

Commercial Construction

   $ 3,786     $ 3,834     $ 596     $ 4,614     $ 157  

Commercial Real Estate - Owner Occupied

     2,699       2,838       698       2,878       30  

Commercial Real Estate - Non-Owner Occupied

     13,791       13,828       691       13,896       761  

Raw Land and Lots

     9,711       9,919       2,411       10,656       145  

Single Family Investment Real Estate

     1,740       1,826       499       1,953       47  

Commercial and Industrial

     2,413       2,573       603       2,584       31  

Other Commercial

     134       134       28       134       —    

Consumer:

                                        

Mortgage

     545       549       154       550       —    

Consumer Construction

     235       262       106       230       —    

HELOCs

     1,563       1,630       942       1,840       25  

Other Consumer

     408       438       193       438       2  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with a specific allowance

   $ 37,025     $ 37,831     $ 6,921     $ 39,773     $ 1,198  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans individually evaluated for impairment

   $ 142,415     $ 144,892     $ 6,921     $ 152,981     $ 5,911  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The Company considers troubled debt restructurings (“TDRs”) to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession to the borrower for economic or legal reasons related to the borrower’s financial difficulties that it would not otherwise consider. Included in the impaired loan disclosures above are $54.7 million and $63.5 million of loans considered to be troubled debt restructurings as of March 31, 2013 and December 31, 2012, respectively. All loans that are considered to be TDRs are specifically evaluated for impairment in accordance with the Company’s allowance for loan loss methodology.

 

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 March 31, 2013 and December 31, 2012 (dollars in thousands):

 

                                                 
    March 31, 2013     December 31, 2012  
    No. of
Loans		     Recorded
Investment		     Outstanding
Commitment		     No. of
Loans		     Recorded
Investment		     Outstanding
Commitment		  

Performing

                                                

Commercial:

                                                

Commercial Construction

     3     $ 1,494     $  —         5     $ 4,549     $ 73  

Commercial Real Estate - Owner Occupied

     10       5,207       —         11       6,009       —    

Commercial Real Estate - Non-Owner Occupied

     10       7,837       11       10       13,103       —    

Raw Land and Lots

     13       22,560       —         13       22,886       —    

Single Family Investment Real Estate

     8       1,760       —         6       928       —    

Commercial and Industrial

     4       887       —         5       1,041       —    

Other Commercial

     1       236       —         1       236       —    

Consumer:

                                                

Mortgage

     13       2,401       —         12       2,256       —    

Other Consumer

     3       262       —         4       460       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total performing

     65     $ 42,644     $ 11       67     $ 51,468     $ 73  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
             

Nonperforming

                                                

Commercial:

                                                

Commercial Construction

     3     $ 3,471     $  —         4     $ 4,260     $  —    

Commercial Real Estate - Owner Occupied

     4       1,270       —         3       1,079       —    

Commercial Real Estate - Non-Owner Occupied

     2       510       —         2       514       —    

Raw Land and Lots

     2       4,013       —         2       4,032       —    

Single Family Investment Real Estate

     2       427       —         2       427       —    

Commercial and Industrial

     9       1,288       —         7       1,251       —    

Consumer:

                                                

Mortgage

     2       809       —         1       202       —    

Indirect Marine

     1       158       —         1       158       —    

Other Consumer

     1       66       —         1       68       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total nonperforming

     26     $ 12,012     $  —         23     $ 11,991     $  —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                                                 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total performing and nonperforming

     91     $ 54,656     $ 11       90     $ 63,459     $ 73  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The Company considers a default of a restructured loan to occur when subsequent to the restructure, the borrower is 90 days past due or results in foreclosure and repossession of the applicable collateral.

During the three months ended March 31, 2013, the Company did not identify any restructured loans that went into default that had been restructured in the twelve-month period prior to the time of default. The Company identified one restructured loan, totaling approximately $453,000, that went into default in the first quarter of 2012 that had been restructured during the previous twelve months; this loan was a commercial real estate (owner occupied) loan for which the term had been extended at a market rate.

 

The following table shows, by class and modification type, TDRs that occurred during the three month periods ended March 31, 2013 and 2012 (dollars in thousands):

 

                                 
    Three months ended
March 31, 2013		     Three months ended
March 31, 2012		  
    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

     —       $ —         3     $ 329  

Single Family Investment Real Estate

     1       210       2       180  

Consumer:

                                

Mortgage

     1       608       1       202  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total interest only at market rate of interest

     2     $ 818       6     $ 711  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Term modification, at a market rate

                                

Commercial:

                                

Commercial Real Estate - Owner Occupied

     —       $ —         2     $ 1,701  

Raw Land and Lots

     —         —         1       604  

Single Family Investment Real Estate

     1       630       —         —    

Commercial and Industrial

     1       56       1       104  

Consumer:

                                

Mortgage

     1       166       1       273  

Other Consumer

     —         —         1       206  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total loan term extended at a market rate

     3     $ 852       6     $ 2,888  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Term modification, below market rate

                                

Commercial:

                                

Commercial Real Estate - Owner Occupied

     1     $ 206       1     $ 10  

Commercial and Industrial

     1       10       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total loan term extended at a below market rate

     2     $ 216       1     $ 10  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

     7     $ 1,886       13     $ 3,609  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

The following table shows the allowance for loan loss activity, by portfolio segment, balances for allowance for credit losses, and loans based on impairment methodology for the three months ended March 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

     575       259       —         834  

Loans charged off

     (2,583 )      (802 )      —         (3,385 ) 

Provision charged to operations

     1,869       135       46       2,050  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance, end of period

   $ 24,682     $ 9,699     $ 34     $ 34,415  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: individually evaluated for impairment

     4,428       1,267       —         5,695  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: collectively evaluated for impairment

     20,237       8,432       34       28,703  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: loans acquired with deteriorated credit quality

     17       —         —         17  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total

   $ 24,682     $ 9,699     $ 34     $ 34,415  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Loans:

                                

Ending balance: individually evaluated for impairment

   $ 124,237     $ 5,605     $ —       $ 129,842  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: collectively evaluated for impairment

     1,982,884       856,802       —         2,839,686  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: loans acquired with deteriorated credit quality

     3,078       941       —         4,019  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total

   $ 2,110,199     $ 863,348     $  —       $ 2,973,547  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

The following table shows the allowance for loan loss activity, portfolio segment types, balances for allowance for loan losses, and loans based on impairment methodology for the year ended December 31, 2012. 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

   $ 27,891     $ 11,498     $ 81     $ 39,470  

Recoveries credited to allowance

     589       1,122       —         1,711  

Loans charged off

     (12,852 )      (5,613 )      —         (18,465 ) 

Provision charged to operations

     9,193       3,100       (93 )      12,200  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance, end of year

   $ 24,821     $ 10,107     $ (12 )    $ 34,916  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: individually evaluated for impairment

     5,404       1,395       —         6,799  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: collectively evaluated for impairment

     19,295       8,712       (12 )      27,995  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: loans acquired with deteriorated credit quality

     122       —         —         122  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total

   $ 24,821     $ 10,107     $ (12 )    $ 34,916  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Loans:

                                

Ending balance: individually evaluated for impairment

     133,596       4,254       —         137,850  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: collectively evaluated for impairment

     1,965,918       858,514       —         2,824,432  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: loans acquired with deteriorated credit quality

     3,594       971       —         4,565  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total

   $ 2,103,108     $ 863,739     $  —       $ 2,966,847  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

The following table shows the allowance for loan loss activity, portfolio segment types, balances for allowance for loan losses, and loans based on impairment methodology for the three months ended March 31, 2012. 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

   $ 27,891     $ 11,498     $ 81     $ 39,470  

Recoveries credited to allowance

     66       275       —         341  

Loans charged off

     (1,399 )      (1,708 )      —         (3,107 ) 

Provision charged to operations

     3,086       479       (65 )      3,500  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance, end of period

   $ 29,644     $ 10,544     $ 16     $ 40,204  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: individually evaluated for impairment

     10,070       1,057       —         11,127  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: collectively evaluated for impairment

     19,413       9,487       16       28,916  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: loans acquired with deteriorated credit quality

     161       —         —         161  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total

   $ 29,644     $ 10,544     $ 16     $ 40,204  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Loans:

                                

Ending balance: individually evaluated for impairment

     215,948       6,701       —         222,649  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: collectively evaluated for impairment

     1,763,200       847,769       —         2,610,969  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Ending balance: loans acquired with deteriorated credit quality

     7,071       1,069       —         8,140  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total

   $ 1,986,219     $ 855,539     $  —       $ 2,841,758  
   

 

 

    

 

 

    

 

 

    

 

 

  

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 purchased impaired loans, in the commercial portfolios by class with their related risk rating as of March 31, 2013. The risk rating information has been updated through March 31, 2013 (dollars in thousands):

 

                                                         
    1-3     4     5     6     7     8     Total  

Commercial Construction

   $ 9,629     $ 116,422     $ 14,529     $ 38,408     $ 23,237     $ —       $ 202,225  

Commercial Real Estate - Owner Occupied

     145,030       328,232       12,425       16,735       9,386       —         511,808  

Commercial Real Estate - Non-Owner Occupied

     188,303       416,735       51,904       30,431       17,663       —         705,036  

Raw Land and Lots

     3,847       112,707       9,685       34,977       38,157       186       199,559  

Single Family Investment Real Estate

     40,424       158,361       11,492       13,215       6,879       —         230,371  

Commercial and Industrial

     57,487       118,163       9,144       7,816       11,647       —         204,257  

Other Commercial

     18,935       20,905       10,204       2,923       842       56       53,865  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 463,655     $ 1,271,525     $ 119,383     $ 144,505     $ 107,811     $ 242     $ 2,107,121  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The following table shows all loans, excluding purchased impaired loans, in the commercial portfolios by class with their related risk rating as of December 31, 2012. The risk rating information has been updated through December 31, 2012 (dollars in thousands):

 

                                                         
    1-3     4     5     6     7     8     Total  

Commercial Construction

   $ 5,504     $ 117,769     $ 14,637     $ 33,815     $ 30,619     $ —       $ 202,344  

Commercial Real Estate - Owner Occupied

     145,977       321,486       15,197       19,051       11,713       —         513,424  

Commercial Real Estate - Non-Owner Occupied

     161,343       417,412       48,840       34,646       20,519       —         682,760  

Raw Land and Lots

     3,943       114,053       13,260       29,194       42,148       186       202,784  

Single Family Investment Real Estate

     43,705       156,636       12,111       13,150       7,467       —         233,069  

Commercial and Industrial

     68,308       120,442       10,584       12,064       6,045       139       217,582  

Other Commercial

     14,189       18,260       10,710       3,489       844       59       47,551  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 442,969     $ 1,266,058     $ 125,339     $ 145,409     $ 119,355     $ 384     $ 2,099,514  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The following table shows only purchased impaired loans in the commercial portfolios by class with their related risk rating as of March 31, 2013. The credit quality indicator information has been updated through March 31, 2013 (dollars in thousands):

 

                                         
    5     6     7     8     Total  

Commercial Real Estate - Owner Occupied

   $ —       $ —       $ 221     $ —       $ 221  

Raw Land and Lots

     —         —         2,555       —         2,555  

Single Family Investment Real Estate

     290       —         12       —         302  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 290     $ —       $ 2,788     $ —       $ 3,078  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The following table shows only purchased impaired loans in the commercial portfolios by class with their related risk rating as of December 31, 2012. The credit quality indicator information has been updated through December 31, 2012 (dollars in thousands):

 

                                         
    5     6     7     8     Total  

Commercial Real Estate - Owner Occupied

   $ —       $ —       $ 247     $ —       $ 247  

Raw Land and Lots

     —         —         2,942       —         2,942  

Single Family Investment Real Estate

     312       —         14       —         326  

Commercial and Industrial

     —         —         79       —         79  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 312     $ —       $ 3,282     $ —       $ 3,594  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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 contractually required payments, cash flows expected to be collected, and fair value as of the date of acquisition were $1,080,780, $1,072,726, and $1,052,358, respectively (dollars in thousands).

 

The following shows changes in the Company’s acquired loan portfolio and accretable yield for the following periods (dollars in thousands):

 

                                                                 
    For the Three Months Ended     For the Three Months Ended  
    March 31, 2013     March 31, 2012  
    Purchased Impaired     Purchased Nonimpaired     Purchased Impaired     Purchased Nonimpaired  
    Accretable
Yield		     Carrying
Amount of
Loans		     Accretable
Yield		     Carrying
Amount of
Loans		     Accretable
Yield		     Carrying
Amount  of
Loans 		    Accretable
Yield		     Carrying
Amount of
Loans		  

Balance at beginning of period

   $ 3,147     $ 4,565     $ 5,350     $ 473,283     $ 5,140     $ 9,897     $ 9,010     $ 663,510  

Accretion

     —         —         (579 )      —         (18 )      —         (1,256 )      —    

Charge-offs

     (11 )      (96 )      —         (380 )      (3 )      (3 )      —         (541 ) 

Transfers to OREO

     —         (201 )      —         (207 )      —         (1,713 )      —         (2,766 ) 

Payments received, net

     —         (249 )      —         (27,818 )      —         (41 )      —         (88,665 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at end of period

   $ 3,136     $ 4,019     $ 4,771     $ 444,878     $ 5,119     $ 8,140     $ 7,754     $ 571,538