Quarterly report pursuant to Section 13 or 15(d)

LOANS AND ALLOWANCE FOR LOAN LOSSES

v3.2.0.727
LOANS AND ALLOWANCE FOR LOAN LOSSES
 6 Months Ended
Jun. 30, 2015
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 deferred fees and costs, and consist of the following at June 30, 2015 and December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

2015

 

2014

Commercial:

 

 

 

 

 

Commercial Construction

$
378,204 

 

$
341,280 

Commercial Real Estate - Owner Occupied

 
874,582 

 

 
875,443 

Commercial Real Estate - Non-Owner Occupied

 
1,569,306 

 

 
1,509,159 

Raw Land and Lots

 
201,630 

 

 
211,225 

Single Family Investment Real Estate

 
435,068 

 

 
412,494 

Commercial and Industrial

 
450,682 

 

 
393,776 

Other Commercial

 
90,556 

 

 
81,106 

Consumer:

 

 

 

 

 

Mortgage

 
470,707 

 

 
478,151 

Consumer Construction

 
65,105 

 

 
74,168 

Indirect Auto

 
208,195 

 

 
199,411 

Indirect Marine

 
42,306 

 

 
43,190 

HELOCs

 
488,891 

 

 
500,579 

Credit Card

 
26,349 

 

 
24,225 

Other Consumer

 
208,804 

 

 
201,789 

       Total

$
5,510,385 

 

$
5,345,996 

 

 

 

 

 

 

 

The following table shows the aging of the Company’s loan portfolio, by class, at June 30, 2015 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-59 Days Past Due

 

60-89 Days Past Due

 

Greater Than 90 Days and still Accruing

 

PCI

 

Nonaccrual

 

Current

 

Total Loans

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

 -

 

$

 -

 

$
126 

 

$
2,921 

 

$
1,907 

 

$
373,250 

 

$
378,204 

Commercial Real Estate - Owner Occupied

 
169 

 

 
341 

 

 
705 

 

 
29,838 

 

 
3,625 

 

 
839,904 

 

 
874,582 

Commercial Real Estate - Non-Owner Occupied

 
3,336 

 

 
1,199 

 

 
798 

 

 
20,016 

 

 
200 

 

 
1,543,757 

 

 
1,569,306 

Raw Land and Lots

 
135 

 

 
207 

 

 
128 

 

 
5,103 

 

 
403 

 

 
195,654 

 

 
201,630 

Single Family Investment Real Estate

 
487 

 

 
232 

 

 
515 

 

 
15,504 

 

 
782 

 

 
417,548 

 

 
435,068 

Commercial and Industrial

 
1,727 

 

 
285 

 

 
509 

 

 
3,025 

 

 
1,074 

 

 
444,062 

 

 
450,682 

Other Commercial

 
566 

 

 
10 

 

 

 -

 

 
1,112 

 

 
65 

 

 
88,803 

 

 
90,556 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
1,760 

 

 
3,872 

 

 
4,329 

 

 
6,605 

 

 
1,054 

 

 
453,087 

 

 
470,707 

Consumer Construction

 

 -

 

 

 -

 

 
819 

 

 
508 

 

 

 -

 

 
63,778 

 

 
65,105 

Indirect Auto

 
1,631 

 

 
229 

 

 
215 

 

 

 -

 

 

 -

 

 
206,120 

 

 
208,195 

Indirect Marine

 
374 

 

 

 -

 

 

 -

 

 

 -

 

 
48 

 

 
41,884 

 

 
42,306 

HELOCs

 
2,516 

 

 
387 

 

 
1,289 

 

 
1,840 

 

 
161 

 

 
482,698 

 

 
488,891 

Credit Card

 
161 

 

 
70 

 

 
180 

 

 

 -

 

 

 -

 

 
25,938 

 

 
26,349 

Other Consumer

 
2,285 

 

 
612 

 

 
1,290 

 

 
1,369 

 

 
202 

 

 
203,046 

 

 
208,804 

Total

$
15,147 

 

$
7,444 

 

$
10,903 

 

$
87,841 

 

$
9,521 

 

$
5,379,529 

 

$
5,510,385 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-59 Days Past Due

 

60-89 Days Past Due

 

Greater Than 90 Days and still Accruing

 

PCI

 

Nonaccrual

 

Current

 

Total Loans

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$
815 

 

$

 -

 

$

 -

 

$
3,782 

 

$
968 

 

$
335,715 

 

$
341,280 

Commercial Real Estate - Owner Occupied

 
621 

 

 
1,542 

 

 
1,683 

 

 
31,167 

 

 
1,060 

 

 
839,370 

 

 
875,443 

Commercial Real Estate - Non-Owner Occupied

 
3,984 

 

 
237 

 

 
91 

 

 
28,869 

 

 
5,902 

 

 
1,470,076 

 

 
1,509,159 

Raw Land and Lots

 
145 

 

 
44 

 

 
194 

 

 
7,427 

 

 
2,359 

 

 
201,056 

 

 
211,225 

Single Family Investment Real Estate

 
2,825 

 

 
338 

 

 
734 

 

 
16,879 

 

 
2,070 

 

 
389,648 

 

 
412,494 

Commercial and Industrial

 
1,250 

 

 
529 

 

 
549 

 

 
3,855 

 

 
3,286 

 

 
384,307 

 

 
393,776 

Other Commercial

 
42 

 

 
2 

 

 

 -

 

 
2,256 

 

 
74 

 

 
78,732 

 

 
81,106 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
12,851 

 

 
4,300 

 

 
4,095 

 

 
7,394 

 

 
2,485 

 

 
447,026 

 

 
478,151 

Consumer Construction

 
120 

 

 

 -

 

 
844 

 

 
516 

 

 

 -

 

 
72,688 

 

 
74,168 

Indirect Auto

 
1,593 

 

 
263 

 

 
317 

 

 

 -

 

 

 -

 

 
197,238 

 

 
199,411 

Indirect Marine

 
150 

 

 

 -

 

 

 -

 

 

 -

 

 
201 

 

 
42,839 

 

 
43,190 

HELOCs

 
3,082 

 

 
955 

 

 
820 

 

 
2,000 

 

 
258 

 

 
493,464 

 

 
500,579 

Credit Card

 
232 

 

 
108 

 

 
219 

 

 

 -

 

 

 -

 

 
23,666 

 

 
24,225 

Other Consumer

 
1,587 

 

 
412 

 

 
501 

 

 
1,643 

 

 
592 

 

 
197,054 

 

 
201,789 

Total

$
29,297 

 

$
8,730 

 

$
10,047 

 

$
105,788 

 

$
19,255 

 

$
5,172,879 

 

$
5,345,996 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at June 30, 2015 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-89 Days Past Due

 

Greater than 90 Days

 

Current

 

Total

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

 -

 

$
609 

 

$
2,312 

 

$
2,921 

Commercial Real Estate - Owner Occupied

 
1,029 

 

 
1,484 

 

 
27,325 

 

 
29,838 

Commercial Real Estate - Non-Owner Occupied

 
1,775 

 

 
321 

 

 
17,920 

 

 
20,016 

Raw Land and Lots

 
376 

 

 
105 

 

 
4,622 

 

 
5,103 

Single Family Investment Real Estate

 
425 

 

 
686 

 

 
14,393 

 

 
15,504 

Commercial and Industrial

 
226 

 

 
68 

 

 
2,731 

 

 
3,025 

Other Commercial

 
120 

 

 
184 

 

 
808 

 

 
1,112 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
916 

 

 
2,557 

 

 
3,132 

 

 
6,605 

Consumer Construction

 

 -

 

 
508 

 

 

 -

 

 
508 

HELOCs

 
210 

 

 
501 

 

 
1,129 

 

 
1,840 

Other Consumer

 
48 

 

 
152 

 

 
1,169 

 

 
1,369 

Total

$
5,125 

 

$
7,175 

 

$
75,541 

 

$
87,841 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the PCI commercial and consumer loan portfolios, by class and their delinquency status, at December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-89 Days Past Due

 

Greater than 90 Days

 

Current

 

Total

Commercial:

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$

 -

 

$
652 

 

$
3,130 

 

$
3,782 

Commercial Real Estate - Owner Occupied

 
1,138 

 

 
843 

 

 
29,186 

 

 
31,167 

Commercial Real Estate - Non-Owner Occupied

 
523 

 

 
1,255 

 

 
27,091 

 

 
28,869 

Raw Land and Lots

 
522 

 

 

 -

 

 
6,905 

 

 
7,427 

Single Family Investment Real Estate

 
1,327 

 

 
1,311 

 

 
14,241 

 

 
16,879 

Commercial and Industrial

 
144 

 

 
538 

 

 
3,173 

 

 
3,855 

Other Commercial

 
107 

 

 
1,133 

 

 
1,016 

 

 
2,256 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
1,975 

 

 
2,866 

 

 
2,553 

 

 
7,394 

Consumer Construction

 

 -

 

 
516 

 

 

 -

 

 
516 

HELOCs

 
356 

 

 
728 

 

 
916 

 

 
2,000 

Other Consumer

 
89 

 

 
171 

 

 
1,383 

 

 
1,643 

Total

$
6,181 

 

$
10,013 

 

$
89,594 

 

$
105,788 

 

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, 2015 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recorded Investment

 

Unpaid Principal Balance

 

Related Allowance

 

YTD Average Investment

 

Interest Income Recognized

Loans without a specific allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$
6,506 

 

$
6,783 

 

$

 -

 

$
5,897 

 

$
135 

Commercial Real Estate - Owner Occupied

 
12,917 

 

 
13,182 

 

 

 -

 

 
12,664 

 

 
258 

Commercial Real Estate - Non-Owner Occupied

 
12,566 

 

 
12,882 

 

 

 -

 

 
12,880 

 

 
317 

Raw Land and Lots

 
39,679 

 

 
39,887 

 

 

 -

 

 
40,698 

 

 
1,179 

Single Family Investment Real Estate

 
2,805 

 

 
3,214 

 

 

 -

 

 
3,001 

 

 
54 

Commercial and Industrial

 
3,361 

 

 
4,070 

 

 

 -

 

 
3,533 

 

 
67 

Other Commercial

 
923 

 

 
928 

 

 

 -

 

 
954 

 

 
28 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
1,568 

 

 
1,582 

 

 

 -

 

 
1,580 

 

 
29 

Indirect Auto

 

 -

 

 
4 

 

 

 -

 

 
1 

 

 

 -

HELOCs

 
779 

 

 
911 

 

 

 -

 

 
856 

 

 
10 

Other Consumer

 
82 

 

 
204 

 

 

 -

 

 
149 

 

 

 -

Total impaired loans without a specific allowance

$
81,186 

 

$
83,647 

 

$

 -

 

$
82,213 

 

$
2,077 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans with a specific allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$
370 

 

$
370 

 

$
10 

 

$
485 

 

$
10 

Commercial Real Estate - Owner Occupied

 
5,162 

 

 
5,177 

 

 
656 

 

 
5,343 

 

 
83 

Commercial Real Estate - Non-Owner Occupied

 
937 

 

 
937 

 

 
81 

 

 
932 

 

 
27 

Raw Land and Lots

 
717 

 

 
717 

 

 
19 

 

 
760 

 

 
17 

Single Family Investment Real Estate

 
2,742 

 

 
2,766 

 

 
182 

 

 
2,859 

 

 
68 

Commercial and Industrial

 
2,228 

 

 
2,279 

 

 
474 

 

 
2,308 

 

 
50 

Other Commercial

 
469 

 

 
490 

 

 
41 

 

 
507 

 

 
11 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
1,395 

 

 
1,448 

 

 
29 

 

 
1,425 

 

 
6 

Consumer Construction

 
376 

 

 
376 

 

 
33 

 

 
378 

 

 
9 

Indirect Marine

 
48 

 

 
149 

 

 
1 

 

 
54 

 

 

 -

Other Consumer

 
226 

 

 
345 

 

 
84 

 

 
276 

 

 
1 

Total impaired loans with a specific allowance

$
14,670 

 

$
15,054 

 

$
1,610 

 

$
15,327 

 

$
282 

Total impaired loans

$
95,856 

 

$
98,701 

 

$
1,610 

 

$
97,540 

 

$
2,359 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the Company’s impaired loans, by class, at December 31, 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

$
5,281 

 

$
5,367 

 

$

 -

 

$
5,755 

 

$
165 

Commercial Real Estate - Owner Occupied

 
15,722 

 

 
16,430 

 

 

 -

 

 
16,774 

 

 
737 

Commercial Real Estate - Non-Owner Occupied

 
22,917 

 

 
22,917 

 

 

 -

 

 
23,209 

 

 
1,116 

Raw Land and Lots

 
44,790 

 

 
47,662 

 

 

 -

 

 
47,988 

 

 
2,124 

Single Family Investment Real Estate

 
4,197 

 

 
4,881 

 

 

 -

 

 
6,534 

 

 
170 

Commercial and Industrial

 
4,453 

 

 
7,933 

 

 

 -

 

 
5,070 

 

 
121 

Other Commercial

 
1,536 

 

 
1,538 

 

 

 -

 

 
1,624 

 

 
90 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
1,571 

 

 
1,582 

 

 

 -

 

 
1,583 

 

 
58 

Indirect Auto

 

 -

 

 
6 

 

 

 -

 

 
4 

 

 

 -

Indirect Marine

 
201 

 

 
505 

 

 

 -

 

 
281 

 

 

 -

HELOCs

 
559 

 

 
699 

 

 

 -

 

 
573 

 

 
8 

Other Consumer

 
89 

 

 
208 

 

 

 -

 

 
107 

 

 

 -

Total impaired loans without a specific allowance

$
101,316 

 

$
109,728 

 

$

 -

 

$
109,502 

 

$
4,589 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans with a specific allowance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction

$
570 

 

$
570 

 

$
51 

 

$
506 

 

$
13 

Commercial Real Estate - Owner Occupied

 
5,951 

 

 
5,999 

 

 
355 

 

 
5,946 

 

 
280 

Commercial Real Estate - Non-Owner Occupied

 
10,575 

 

 
10,572 

 

 
2,017 

 

 
10,823 

 

 
474 

Raw Land and Lots

 
1,343 

 

 
1,373 

 

 
98 

 

 
1,472 

 

 
59 

Single Family Investment Real Estate

 
4,125 

 

 
4,144 

 

 
562 

 

 
4,293 

 

 
159 

Commercial and Industrial

 
2,938 

 

 
3,009 

 

 
582 

 

 
3,125 

 

 
138 

Other Commercial

 
359 

 

 
378 

 

 
32 

 

 
442 

 

 
29 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage

 
3,323 

 

 
3,375 

 

 
481 

 

 
3,381 

 

 
60 

Consumer Construction

 
375 

 

 
375 

 

 
34 

 

 
373 

 

 
19 

Indirect Marine

 
192 

 

 
192 

 

 
5 

 

 
199 

 

 
15 

HELOCs

 
434 

 

 
434 

 

 
4 

 

 
436 

 

 
17 

Other Consumer

 
679 

 

 
706 

 

 
310 

 

 
686 

 

 
19 

Total impaired loans with a specific allowance

$
30,864 

 

$
31,127 

 

$
4,531 

 

$
31,682 

 

$
1,282 

Total impaired loans

$
132,180 

 

$
140,855 

 

$
4,531 

 

$
141,184 

 

$
5,871 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 $22.1 million and $26.8 million as of June 30, 2015 and December 31, 2014, respectively.  All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables.  For the quarter ended June 30, 2015, 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 on nonaccrual status, which are considered to be nonperforming, as of June 30, 2015 and December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2015

 

December 31, 2014

 

No. of Loans

 

Recorded Investment

 

Outstanding Commitment

 

No. of Loans

 

Recorded Investment

 

Outstanding Commitment

Performing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction
1 

 

$
296 

 

$

 -

 
1 

 

$
707 

 

$

 -

Commercial Real Estate - Owner Occupied
5 

 

 
1,659 

 

 

 -

 
3 

 

 
682 

 

 

 -

Commercial Real Estate - Non-Owner Occupied
3 

 

 
2,448 

 

 

 -

 
3 

 

 
3,362 

 

 

 -

Raw Land and Lots
5 

 

 
13,995 

 

 

 -

 
9 

 

 
14,777 

 

 

 -

Single Family Investment Real Estate
2 

 

 
446 

 

 

 -

 
6 

 

 
1,046 

 

 

 -

Commercial and Industrial
2 

 

 
50 

 

 

 -

 
9 

 

 
722 

 

 

 -

Other Commercial
2 

 

 
213 

 

 

 -

 
1 

 

 
191 

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage
6 

 

 
740 

 

 

 -

 
7 

 

 
1,244 

 

 

 -

Other Consumer
1 

 

 
33 

 

 

 -

 
3 

 

 
98 

 

 

 -

Total performing
27 

 

$
19,880 

 

$

 -

 
42 

 

$
22,829 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Construction
1 

 

$
260 

 

$

 -

 
1 

 

$
253 

 

$

 -

Commercial Real Estate - Owner Occupied
1 

 

 
142 

 

 

 -

 
2 

 

 
153 

 

 

 -

Commercial Real Estate - Non-Owner Occupied
1 

 

 
200 

 

 

 -

 
1 

 

 
539 

 

 

 -

Raw Land and Lots
1 

 

 
34 

 

 

 -

 
2 

 

 
1,053 

 

 

 -

Single Family Investment Real Estate
2 

 

 
237 

 

 

 -

 
1 

 

 
433 

 

 

 -

Commercial and Industrial
4 

 

 
513 

 

 

 -

 
5 

 

 
616 

 

 

 -

Other Commercial
1 

 

 
65 

 

 

 -

 
1 

 

 
74 

 

 

 -

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage
2 

 

 
756 

 

 

 -

 
2 

 

 
770 

 

 

 -

Other Consumer
1 

 

 
37 

 

 

 -

 
1 

 

 
57 

 

 

 -

Total nonperforming
14 

 

$
2,244 

 

$

 -

 
16 

 

$
3,948 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total performing and nonperforming
41 

 

$
22,124 

 

$

 -

 
58 

 

$
26,777 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2015, the Company did not identify any restructured loans that went into default that had been restructured in the twelve-month period prior to default.  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.

The following table shows, by class and modification type, TDRs that occurred during the three and six months ended June 30, 2015 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30, 2015

 

June 30, 2015

 

No. of Loans

 

Recorded Investment at Period End

 

No. of Loans

 

Recorded Investment at Period End

Term modification, at a market rate

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Commercial Real Estate - Owner Occupied
1 

 

$
120 

 
1 

 

$
120 

Commercial and Industrial

 -

 

 

 -

 
1 

 

 
18 

Total loan term extended at a market rate
1 

 

$
120 

 
2 

 

$
138 

 

 

 

 

 

 

 

 

 

 

Term modification, below market rate

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Commercial Real Estate - Owner Occupied
1 

 

$
873 

 
1 

 

$
873 

Total loan term extended at a below market rate
1 

 

$
873 

 
1 

 

$
873 

 

 

 

 

 

 

 

 

 

 

Total
2 

 

$
993 

 
3 

 

$
1,011 

 

 

 

 

 

 

 

 

 

 

 

 

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 the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by portfolio segment for the six months ended and as of June 30, 2015.  The table below includes the provision for loan losses.  In addition, a $200,000 provision was recognized during the current quarter for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets.  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

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

Balance, beginning of the year

 

$
22,352 

 

$
10,032 

 

$
32,384 

    Recoveries credited to allowance

 

 
897 

 

 
799 

 

 
1,696 

    Loans charged off

 

 
(5,248)

 

 
(1,787)

 

 
(7,035)

    Provision charged to operations

 

 
5,532 

 

 
(233)

 

 
5,299 

Balance, end of period

 

$
23,533 

 

$
8,811 

 

$
32,344 

 

 

 

 

 

 

 

 

 

 

Ending Balance, ALL:

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$
1,463 

 

$
147 

 

$
1,610 

Loans collectively evaluated for impairment

 

 
22,070 

 

 
8,664 

 

 
30,734 

Loans acquired with deteriorated credit quality

 

 

 -

 

 

 -

 

 

 -

    Total

 

$
23,533 

 

$
8,811 

 

$
32,344 

 

 

 

 

 

 

 

 

 

 

Ending Balance, Loans:

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$
90,917 

 

$
4,298 

 

$
95,215 

Loans collectively evaluated for impairment

 

 
3,831,592 

 

 
1,495,737 

 

 
5,327,329 

Loans acquired with deteriorated credit quality

 

 
77,519 

 

 
10,322 

 

 
87,841 

    Total

 

$
4,000,028 

 

$
1,510,357 

 

$
5,510,385 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by portfolio segment for the six months ended and as of 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

 

Total

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

Balance, beginning of the year

 

$
19,908 

 

$
10,227 

 

$
30,135 

    Recoveries credited to allowance

 

 
1,599 

 

 
572 

 

 
2,171 

    Loans charged off

 

 
(1,068)

 

 
(1,359)

 

 
(2,427)

    Provision charged to operations

 

 
204 

 

 
1,296 

 

 
1,500 

Balance, end of period

 

$
20,643 

 

$
10,736 

 

$
31,379 

 

 

 

 

 

 

 

 

 

 

Ending Balance, ALL:

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$
2,117 

 

$
399 

 

$
2,516 

Loans collectively evaluated for impairment

 

 
18,526 

 

 
10,337 

 

 
28,863 

Loans acquired with deteriorated credit quality

 

 

 -

 

 

 -

 

 

 -

    Total

 

$
20,643 

 

$
10,736 

 

$
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 Company uses the past due status and delinquency 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 the recorded investment in all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of June 30, 2015 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-3

 

4

 

5

 

6

 

7

 

8

 

Total

Commercial Construction

$
34,756 

 

$
310,970 

 

$
17,583 

 

$
9,343 

 

$
2,631 

 

$

 -

 

$
375,283 

Commercial Real Estate - Owner Occupied

 
183,155 

 

 
629,284 

 

 
14,460 

 

 
6,471 

 

 
9,792 

 

 
1,582 

 

 
844,744 

Commercial Real Estate - Non-Owner Occupied

 
407,562 

 

 
1,081,215 

 

 
22,487 

 

 
24,523 

 

 
13,503 

 

 

 -

 

 
1,549,290 

Raw Land and Lots

 
11,696 

 

 
132,386 

 

 
9,814 

 

 
16,359 

 

 
26,272 

 

 

 -

 

 
196,527 

Single Family Investment Real Estate

 
66,052 

 

 
333,533 

 

 
8,794 

 

 
6,190 

 

 
4,995 

 

 

 -

 

 
419,564 

Commercial and Industrial

 
195,917 

 

 
231,994 

 

 
10,823 

 

 
4,319 

 

 
4,604 

 

 

 -

 

 
447,657 

Other Commercial

 
45,749 

 

 
38,475 

 

 
2,917 

 

 
911 

 

 
1,392 

 

 

 -

 

 
89,444 

Total

$
944,887 

 

$
2,757,857 

 

$
86,878 

 

$
68,116 

 

$
63,189 

 

$
1,582 

 

$
3,922,509 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the recorded investment in all loans, excluding PCI loans, in the commercial portfolios by class with their related risk rating current as of December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-3

 

4

 

5

 

6

 

7

 

8

 

Total

Commercial Construction

$
22,512 

 

$
289,064 

 

$
11,932 

 

$
10,906 

 

$
3,084 

 

$

 -

 

$
337,498 

Commercial Real Estate - Owner Occupied

 
185,789 

 

 
620,587 

 

 
15,003 

 

 
7,688 

 

 
15,209 

 

 

 -

 

 
844,276 

Commercial Real Estate - Non-Owner Occupied

 
356,263 

 

 
1,041,515 

 

 
22,358 

 

 
28,388 

 

 
31,766 

 

 

 -

 

 
1,480,290 

Raw Land and Lots

 
11,162 

 

 
128,281 

 

 
16,803 

 

 
4,783 

 

 
42,769 

 

 

 -

 

 
203,798 

Single Family Investment Real Estate

 
59,638 

 

 
311,900 

 

 
9,750 

 

 
6,680 

 

 
7,647 

 

 

 -

 

 
395,615 

Commercial and Industrial

 
138,973 

 

 
230,084 

 

 
9,392 

 

 
4,383 

 

 
7,089 

 

 

 -

 

 
389,921 

Other Commercial

 
31,571 

 

 
40,913 

 

 
3,818 

 

 
844 

 

 
1,704 

 

 

 -

 

 
78,850 

Total

$
805,908 

 

$
2,662,344 

 

$
89,056 

 

$
63,672 

 

$
109,268 

 

$

 -

 

$
3,730,248 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the recorded investment in only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of June 30, 2015 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

5

 

6

 

7

 

8

 

Total

Commercial Construction

$

 -

 

$

 -

 

$
2,311 

 

$
149 

 

$
461 

 

$
2,921 

Commercial Real Estate - Owner Occupied

 
5,544 

 

 
581 

 

 
8,856 

 

 
14,857 

 

 

 -

 

 
29,838 

Commercial Real Estate - Non-Owner Occupied

 
5,070 

 

 
3,801 

 

 
7,648 

 

 
3,497 

 

 

 -

 

 
20,016 

Raw Land and Lots

 
1,511 

 

 
533 

 

 
1,938 

 

 
1,121 

 

 

 -

 

 
5,103 

Single Family Investment Real Estate

 
4,674 

 

 
1,710 

 

 
4,100 

 

 
5,020 

 

 

 -

 

 
15,504 

Commercial and Industrial

 
422 

 

 
12 

 

 
917 

 

 
1,650 

 

 
24 

 

 
3,025 

Other Commercial

 
91 

 

 

 -

 

 
476 

 

 
545 

 

 

 -

 

 
1,112 

Total

$
17,312 

 

$
6,637 

 

$
26,246 

 

$
26,839 

 

$
485 

 

$
77,519 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table shows the recorded investment in only PCI loans in the commercial portfolios by class with their related risk rating and credit quality indicator information current as of December 31, 2014 (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

5

 

6

 

7

 

8

 

Total

Commercial Construction

$

 -

 

$

 -

 

$
3,130 

 

$
194 

 

$
458 

 

$
3,782 

Commercial Real Estate - Owner Occupied

 
1,525 

 

 
3,546 

 

 
10,880 

 

 
15,216 

 

 

 -

 

 
31,167 

Commercial Real Estate - Non-Owner Occupied

 
2,837 

 

 
934 

 

 
18,736 

 

 
6,362 

 

 

 -

 

 
28,869 

Raw Land and Lots

 
1,564 

 

 
189 

 

 
3,148 

 

 
2,526 

 

 

 -

 

 
7,427 

Single Family Investment Real Estate

 
2,807 

 

 
1,253 

 

 
6,462 

 

 
6,357 

 

 

 -

 

 
16,879 

Commercial and Industrial

 
437 

 

 

 -

 

 
913 

 

 
2,477 

 

 
28 

 

 
3,855 

Other Commercial

 

 -

 

 

 -

 

 
510 

 

 
1,746 

 

 

 -

 

 
2,256 

Total

$
9,170 

 

$
5,922 

 

$
43,779 

 

$
34,878 

 

$
486 

 

$
94,235 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands):

 

 

 

 

 

 

 

 

 

For the Six Months ended

June 30,

 

2015

 

2014

Balance at beginning of period

$
28,956 

 

 

$
2,980 

 

Additions

 

 -

 

 

 
34,653 

 

Accretion

 
(3,106)

 

 

 
(3,677)

 

Reclass of nonaccretable difference due to improvement in expected cash flows

 
2,976 

 

 

 

 -

 

Other, net (1)

 
(4,784)

 

 

 
(1,365)

 

Balance at end of period

$
24,042 

 

 

$
32,591 

 

 

 

 

 

 

 

 

 

(1)    This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the quarter.

 

The carrying value of the Company’s PCI loan portfolio, accounted for under ASC 310-30, totaled $87.8 million at June 30, 2015 and $105.8 million at December 31, 2014.  The outstanding balance of the Company’s PCI loan portfolio totaled $107.1 million at June 30, 2015 and $126.3 million at December 31, 2014.  The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, totaled $1.6 billion at June 30, 2015 and $1.8 billion at December 31, 2014; the remaining discount on these loans totaled $23.0 million at June 30, 2015 and $24.3 million at December 31, 2014, respectively.