Allowance for Non-Covered Loan Losses and Credit Quality (Tables)

9 Months Ended

Sep. 30, 2013

Allowance for Non Covered Loan Losses and Credit Quality [Abstract]

The following table summarizes activity related to the allowance for loan losses on non-covered loans, by portfolio segment, for the three and nine months ended September 30, 2013 and 2012:



(dollars in thousands)	Three Months Ended September 30, 2013
	Commercial			Real estate mortgage			Real estate construction		Consumer			Total
Beginning balance	$	4,316		$	7,055		$	2,575	$	3,021		$	16,967
Provision	(290		)	(194		)	501		508			525
Charge-offs	(70		)	—			—		(700		)	(770		)
Recoveries	48			70			3		99			220
Ending Balance	$	4,004		$	6,931		$	3,079	$	2,928		$	16,942



(dollars in thousands)	Three Months Ended September 30, 2012
	Commercial			Real estate mortgage			Real estate construction			Consumer			Total
Beginning balance	$	4,471		$	5,844		$	3,983		$	3,267		$	17,565
Provision	63			901			142			144			1,250
Charge-offs	(258		)	(655		)	(1,308		)	(278		)	(2,499		)
Recoveries	81			68			7			98			254
Ending Balance	$	4,357		$	6,158		$	2,824		$	3,231		$	16,570



(dollars in thousands)	Nine Months Ended September 30, 2013
	Commercial			Real estate mortgage			Real estate construction			Consumer			Total
Beginning balance	$	4,405		$	6,516		$	3,050		$	3,176		$	17,147
Provision	(45		)	467			92			1,311			1,825
Charge-offs	(506		)	(194		)	(70		)	(1,960		)	(2,730		)
Recoveries	150			142			7			401			700
Ending Balance	$	4,004		$	6,931		$	3,079		$	2,928		$	16,942



(dollars in thousands)	Nine Months Ended September 30, 2012
	Commercial			Real estate mortgage			Real estate construction			Consumer			Total
Beginning balance	$	4,034		$	6,500		$	4,046		$	3,452		$	18,032
Provision	1,443			2,766			809			582			5,600
Charge-offs	(1,234		)	(3,220		)	(2,041		)	(1,192		)	(7,687		)
Recoveries	114			112			10			389			625
Ending Balance	$	4,357		$	6,158		$	2,824		$	3,231		$	16,570

Schedule of Allowance For Loan Losses and Related Non Covered Loans, by Portfolio Segment

The following tables provides a summary of the allowance for non-covered loan losses and related non-covered loans, by portfolio segment, at September 30, 2013 and December 31, 2012:



(dollars in thousands)	September 30, 2013
	Commercial		Real estate mortgage		Real estate construction		Consumer		Total
Allowance for non-covered loan losses:
Individually evaluated for impairment	$	1,276	$	1,625	$	1,258	$	48	$	4,207
Collectively evaluated for impairment	2,728		5,306		1,821		2,880		12,735
Total allowance for non-covered loan losses	$	4,004	$	6,931	$	3,079	$	2,928	$	16,942
Non-covered loans:
Individually evaluated for impairment	$	8,759	$	12,929	$	12,533	$	611	$	34,832
Collectively evaluated for impairment	164,244		473,665		38,569		159,623		836,101
Total non-covered loans ⁽¹⁾	$	173,003	$	486,594	$	51,102	$	160,234	$	870,933

⁽¹⁾ Total non-covered loans excludes deferred loan costs of $1.7 million.



(dollars in thousands)	December 31, 2012
	Commercial		Real estate mortgage		Real estate construction		Consumer		Total
Allowance for non-covered loan losses:
Individually evaluated for impairment	$	1,468	$	1,154	$	881	$	52	$	3,555
Collectively evaluated for impairment	2,937		5,362		2,169		3,124		13,592
Total allowance for non-covered loan losses	$	4,405	$	6,516	$	3,050	$	3,176	$	17,147
Non-covered loans:
Individually evaluated for impairment	$	9,974	$	11,357	$	19,607	$	916	$	41,854
Collectively evaluated for impairment	152,507		441,270		61,791		153,974		809,542
Total non-covered loans ⁽¹⁾	$	162,481	$	452,627	$	81,398	$	154,890	$	851,396

⁽¹⁾ Total non-covered loans excludes deferred loan costs of $1.7 million.

Schedule of Impaired Loans and the Related Allowance for Loan Losses

At September 30, 2013 and December 31, 2012, the Company had non-covered impaired loans which consisted of nonaccrual loans and restructured loans. As of September 30, 2013, the Company had no commitments to extend additional credit on these non-covered impaired loans. Non-covered impaired loans and the related allowance for loan losses at September 30, 2013 and December 31, 2012 were as follows:



(dollars in thousands)	September 30, 2013				December 31, 2012
	Recorded investment		Allowance		Recorded investment		Allowance
With no related allowance recorded:
Nonaccrual loans	$	9,603	$	—	$	15,479	$	—
Restructured loans	4,255		—		8,635		—
Total with no related allowance	$	13,858	$	—	$	24,114	$	—
With an allowance recorded:
Nonaccrual loans	$	304	$	15	$	72	$	5
Restructured loans	20,670		4,192		17,668		3,550
Total with an allowance recorded	20,974		4,207		17,740		3,555
Total	$	34,832	$	4,207	$	41,854	$	3,555

Schedule of Impaired Non Covered Loans, By Class

The following table further summarizes impaired non-covered loans, by class, at September 30, 2013 and December 31, 2012:



(dollars in thousands)	September 30, 2013						December 31, 2012
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
With no related allowance recorded:
Commercial	$	3,040	$	3,535	$	—	$	3,737	$	4,231	$	—
Real estate mortgages:
One-to-four family residential	555		632		—		938		1,132		—
Multi-family and commercial	2,744		3,137		—		3,605		4,283		—
Total real estate mortgages	3,299		3,769		—		4,543		5,415		—
Real estate construction:
One-to-four family residential	7,234		11,592		—		15,251		23,133		—
Total real estate construction	7,234		11,592		—		15,251		23,133		—
Consumer:
Direct	285		551		—		583		1,017		—
Total consumer	285		551		—		583		1,017		—
Total with no related allowance recorded	$	13,858	$	19,447	$	—	$	24,114	$	33,796	$	—
With an allowance recorded:
Commercial	$	5,719	$	5,731	$	1,276	$	6,237	$	6,237	$	1,468
Real estate mortgages:
One-to-four family residential	731		731		87		524		524		53
Multi-family and commercial	8,900		9,277		1,538		6,290		6,657		1,101
Total real estate mortgages	9,631		10,008		1,625		6,814		7,181		1,154
Real estate construction:
One-to-four family residential	5,046		5,046		1,211		4,094		4,112		855
Multi-family and commercial	253		253		47		262		262		26
Total real estate construction	5,299		5,299		1,258		4,356		4,374		881
Consumer:
Direct	325		325		48		333		333		52
Total consumer	325		325		48		333		333		52
Total with an allowance recorded	20,974		21,363		4,207		17,740		18,125		3,555
Total impaired non-covered loans	$	34,832	$	40,810	$	4,207	$	41,854	$	51,921	$	3,555

Troubled Debt Restructurings

Troubled debt restructurings at September 30, 2013 and December 31, 2012 were as follows:



(dollars in thousands)	September 30, 2013						December 31, 2012
	Accrual status		Nonaccrual status		Total modifications		Accrual status		Nonaccrual status		Total modifications
Troubled debt restructurings:
Commercial	$	6,324	$	636	$	6,960	$	7,008	$	1,160	$	8,168
Real estate mortgages:
One-to-four family residential	768		326		1,094		573		340		913
Multi-family and commercial	10,544		1,052		11,596		7,993		1,823		9,816
Total real estate mortgage	11,312		1,378		12,690		8,566		2,163		10,729
Real estate construction:
One-to-four family residential	6,710		5,506		12,216		10,135		9,013		19,148
Multi-family and commercial	253		—		253		262		—		262
Total real estate construction	6,963		5,506		12,469		10,397		9,013		19,410
Consumer:
Direct	326		14		340		332		20		352
Total consumer	326		14		340		332		20		352
Total restructured loans	$	24,925	$	7,534	$	32,459	$	26,303	$	12,356	$	38,659

Summary of Loans Restructured in Period

The following tables present loans restructured during the nine months ended September 30, 2013 and the three and nine months ended September 30, 2012. There were no loans restructured during the three months ended September 30, 2013. During the periods presented, all modification terms were a combination of terms employed by the Company.



(dollars in thousands)	For the Three Months Ended September 30, 2012
	Number of contracts	Pre-modification recorded investment		Post-modification recorded investment
Troubled debt restructurings:
Commercial	8	$	4,013	$	3,892
Real estate mortgages:
One-to-four family residential	1	173		173
Multi-family and commercial	1	376		376
Total real estate mortgage	2	549		549
Real estate construction:
One-to-four family residential	1	631		631
Multi-family and commercial	1	265		265
Total real estate construction	2	896		896
Total restructured loans	12	$	5,458	$	5,337



(dollars in thousands)	For the Nine Months Ended September 30, 2013
	Number of contracts	Pre-modification recorded investment		Post-modification recorded investment
Troubled debt restructurings:
Commercial	2	$	108	$	106
Real estate mortgages:
One-to-four family residential	1	214		214
Multi-family and commercial	7	3,296		3,296
Total real estate mortgage	8	3,510		3,510
Real estate construction:
One-to-four family residential	2	176		89
Total real estate construction	2	176		89
Total restructured loans	12	$	3,794	$	3,705



(dollars in thousands)	For the Nine Months Ended September 30, 2012
	Number of contracts	Pre-modification recorded investment		Post-modification recorded investment
Troubled debt restructurings:
Commercial	13	$	5,042	$	4,884
Real estate mortgages:
One-to-four family residential	2	221		221
Multi-family and commercial	1	374		374
Total real estate mortgage	3	595		595
Real estate construction:
One-to-four family residential	2	1,070		947
Multi-family and commercial	1	265		265
Total real estate construction	3	1,335		1,212
Total restructured loans	19	$	6,972	$	6,691

Schedule of Past Due Status of Loans Receivable

The following table summarizes non-covered nonaccrual loans and past due loans, by class, as of September 30, 2013 and December 31, 2012:



(dollars in thousands)	September 30, 2013
	30 - 59 Days past due		60 - 89 Days past due		Greater than 90 days and accruing		Total past due		Nonaccrual		Current		Total non-covered loans
Commercial	$	873	$	59	$	—	$	932	$	2,435	$	169,636	$	173,003
Real estate mortgages:
One-to-four family residential	—		214		—		214		518		39,294		40,026
Multi-family and commercial	—		—		—		—		1,099		445,469		446,568
Total real estate mortgages	—		214		—		214		1,617		484,763		486,594
Real estate construction:
One-to-four family residential	—		—		—		—		5,570		30,043		35,613
Multi-family and commercial	—		—		—		—		—		15,489		15,489
Total real estate construction	—		—		—		—		5,570		45,532		51,102
Consumer:
Indirect	734		168		44		946		—		77,835		78,781
Direct	355		9		—		364		285		80,804		81,453
Total consumer	1,089		177		44		1,310		285		158,639		160,234
Total	$	1,962	$	450	$	44	$	2,456	$	9,907	$	858,570	870,933
Deferred loan costs, net													1,703
Total non-covered loans													$	872,636



(dollars in thousands)	December 31, 2012
	30 - 59 Days past due		60 - 89 Days past due		Greater than 90 days and accruing		Total past due		Nonaccrual		Current		Total non-covered loans
Commercial	$	232	$	373	$	—	$	605	$	2,966	$	158,910	$	162,481
Real estate mortgages:
One-to-four family residential	—		—		—		—		889		35,984		36,873
Multi-family and commercial	—		—		—		—		1,903		413,851		415,754
Total real estate mortgages	—		—		—		—		2,792		449,835		452,627
Real estate construction:
One-to-four family residential	—		63		—		63		9,210		37,199		46,472
Multi-family and commercial	—		—		—		—		—		34,926		34,926
Total real estate construction	—		63		—		63		9,210		72,125		81,398
Consumer:
Indirect	966		112		—		1,078		—		76,518		77,596
Direct	469		415		—		884		583		75,827		77,294
Total consumer	1,435		527		—		1,962		583		152,345		154,890
Total	$	1,667	$	963	$	—	$	2,630	$	15,551	$	833,215	851,396
Deferred loan costs, net													1,738
Total non-covered loans													$	853,134

Allowance for Credit Losses on Financing Receivables by Credit Quality Indicators

The following table summarizes our internal risk rating, by class, as of September 30, 2013 and December 31, 2012:



(dollars in thousands)	September 30, 2013
	Pass/Watch		Special mention		Substandard		Doubtful/Loss		Total
Commercial	$	153,047	$	4,016	$	15,940	$	—	$	173,003
Real estate mortgages:
One-to-four family residential	35,110		31		4,885		—		40,026
Multi-family and commercial	386,400		30,489		29,679		—		446,568
Total real estate mortgages	421,510		30,520		34,564		—		486,594
Real estate construction:
One-to-four family residential	21,866		3,155		10,592		—		35,613
Multi-family and commercial	13,312		59		2,118		—		15,489
Total real estate construction	35,178		3,214		12,710		—		51,102
Consumer:
Indirect	77,540		13		1,228		—		78,781
Direct	75,788		1,544		4,121		—		81,453
Total consumer	153,328		1,557		5,349		—		160,234
Total	$	763,063	$	39,307	$	68,563	$	—	870,933
Deferred loan costs, net									1,703
									$	872,636



(dollars in thousands)	December 31, 2012
	Pass/Watch		Special mention		Substandard		Doubtful/Loss		Total
Commercial	$	140,809	$	4,412	$	17,260	$	—	$	162,481
Real estate mortgages:
One-to-four family residential	31,511		1,139		4,223		—		36,873
Multi-family and commercial	363,408		26,287		26,059		—		415,754
Total real estate mortgages	394,919		27,426		30,282		—		452,627
Real estate construction:
One-to-four family residential	25,389		776		20,307		—		46,472
Multi-family and commercial	32,166		472		2,288		—		34,926
Total real estate construction	57,555		1,248		22,595		—		81,398
Consumer:
Indirect	76,076		16		1,504		—		77,596
Direct	71,176		450		5,668		—		77,294
Total consumer	147,252		466		7,172		—		154,890
Total	$	740,535	$	33,552	$	77,309	$	—	851,396
Deferred loan costs, net									1,738
									$	853,134