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Loans Receivable and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2012
Receivables [Abstract]  
Summary of Loans Receivable
A summary of the Bank's loans receivable at June 30, 2012 and December 31, 2011 is as follows:
 
(in thousands)
June 30, 2012
 
December 31, 2011
Commercial and industrial
$
356,743

 
$
321,988

Commercial tax-exempt
84,616

 
81,532

Owner occupied real estate
274,504

 
279,372

Commercial construction and land development
108,019

 
103,153

Commercial real estate
377,248

 
364,405

Residential
84,380

 
83,940

Consumer
207,245

 
202,278

 
1,492,755

 
1,436,668

Less: allowance for loan losses
26,158

 
21,620

Net loans receivable
$
1,466,597

 
$
1,415,048
Summary of Nonaccrual Loans, by Type
The following table summarizes nonaccrual loans by loan type at June 30, 2012 and December 31, 2011:

(in thousands)
June 30, 2012
 
December 31, 2011
Nonaccrual loans:
 
 
 
   Commercial and industrial
$
16,631

 
$
10,162

   Commercial tax-exempt
—

 
—

   Owner occupied real estate
3,275

 
2,895

   Commercial construction and land development
4,002

 
8,511

   Commercial real estate
6,174

 
7,820

   Residential
3,233

 
2,912

   Consumer
2,123

 
1,829

Total nonaccrual loans
$
35,438

 
$
34,129
Age Analysis of Past Due Loan Receivables
The following tables are an age analysis of past due loan receivables as of June 30, 2012 and December 31, 2011:

 
 
Past Due Loans
 
 
Recorded Investment in Loans 90 Days and Greater and Still Accruing
(in thousands)
Current
30-59 Days Past Due
60-89 Days Past Due
90 Days Past Due and Greater
Total Past Due
Total Loan Receivables
June 30, 2012
 
 
 
 
 
 
 
Commercial and industrial
$
345,367

$
413

$
3,966

$
6,997

$
11,376

$
356,743

$
—

Commercial tax-exempt
84,616

—

—

—

—

84,616

—

Owner occupied real estate
269,395

557

1,380

3,172

5,109

274,504

—

Commercial construction and
land development
103,699

222

492

3,606

4,320

108,019

—

Commercial real estate
364,765

2,107

6,493

3,883

12,483

377,248

—

Residential
81,517

181

697

1,985

2,863

84,380

154

Consumer
204,971

805

395

1,074

2,274

207,245

—

Total
$
1,454,330

$
4,285

$
13,423

$
20,717

$
38,425

$
1,492,755

$
154


 
 
Past Due Loans
 
 
Recorded Investment in Loans 90 Days and Greater and Still Accruing
(in thousands)
Current
30-59 Days Past Due
60-89 Days Past Due
90 Days Past Due and Greater
Total Past Due
Total Loan Receivables
December 31, 2011
 
 
 
 
 
 
 
Commercial and industrial
$
317,016

$
696

$
1,083

$
3,193

$
4,972

$
321,988

$
—

Commercial tax-exempt
81,532

—

—

—

—

81,532

—

Owner occupied real estate
274,720

2,423

328

1,901

4,652

279,372

—

Commercial construction and
land development
94,160

470

219

8,304

8,993

103,153

—

Commercial real estate
354,818

2,191

1,272

6,124

9,587

364,405

—

Residential
75,841

4,587

607

2,905

8,099

83,940

621

Consumer
199,671

1,314

350

943

2,607

202,278

71

Total
$
1,397,758

$
11,681

$
3,859

$
23,370

$
38,910

$
1,436,668

$
692
Summary of Allowances on Loan Receivables, by Class
A summary of the ALL and balance of loans receivable by loan class and by impairment method as of June 30, 2012 and December 31, 2011 is detailed in the tables that follow.

(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construc tion and land devel opment
Comm. real estate
Resi dential
Con sumer
Unallo cated
Total
 
 
 
 
 
 
 
 
 
 
June 30, 2012
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
Individually evaluated
for impairment
$
3,187

$
—

$
1,456

$
3,677

$
—

$
—

$
—

$
—

$
8,320

Collectively evaluated
for impairment
7,388

74

661

5,240

3,139

438

797

101

17,838

Total ALL
$
10,575

$
74

$
2,117

$
8,917

$
3,139

$
438

$
797

$
101

$
26,158

Loans receivable:
 
 
 
 
 
 
 
 
 
Loans evaluated
  individually
$
18,996

$
—

$
5,188

$
23,508

$
10,312

$
4,137

$
2,301

$
—

$
64,442

Loans evaluated
  collectively
337,747

84,616

269,316

84,511

366,936

80,243

204,944

—

1,428,313

Total loans receivable
$
356,743

$
84,616

$
274,504

$
108,019

$
377,248

$
84,380

$
207,245

$
—

$
1,492,755



(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construc tion and land devel opment
Comm. real estate
Resi dential
Con sumer
Unallo cated
Total
 
 
 
 
 
 
 
 
 
 
December 31, 2011
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
Individually evaluated
for impairment
$
1,000

$
—

$
30

$
2,600

$
—

$
—

$
—

$
—

$
3,630

Collectively evaluated
for impairment
7,400

79

699

5,240

3,241

435

831

65

17,990

Total ALL
$
8,400

$
79

$
729

$
7,840

$
3,241

$
435

$
831

$
65

$
21,620

Loans receivable:
 
 
 
 
 
 
 
 
 
Loans evaluated
  individually
$
15,504

$
—

$
7,492

$
23,216

$
12,117

$
3,346

$
1,829

$
—

$
63,504

Loans evaluated
  collectively
306,484

81,532

271,880

79,937

352,288

80,594

200,449

—

1,373,164

Total loans receivable
$
321,988

$
81,532

$
279,372

$
103,153

$
364,405

$
83,940

$
202,278

$
—

$
1,436,668

The following tables summarize the transactions in the ALL for the three and six months ended June 30, 2012 and 2011:
 
(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Resi dential
Consumer
Unallo-cated
Total
2012
 
 
 
 
 
 
 
 
 
Balance at April 1
$
8,251

$
72

$
1,794

$
8,940

$
3,347

$
426

$
783

$
146

$
23,759

Provision charged to operating expenses
2,481

2

368

172

(129
)
22

79

(45
)
2,950

Recoveries of loans previously charged-off
180

—

4

15

27

—

21

—

247

Loans charged-off
(337
)
—

(49
)
(210
)
(106
)
(10
)
(86
)
—

(798
)
Balance at June 30
$
10,575

$
74

$
2,117

$
8,917

$
3,139

$
438

$
797

$
101

$
26,158


(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Resi dential
Consumer
Unallo-cated
Total
2012
 
 
 
 
 
 
 
 
 
Balance at January 1
$
8,400

$
79

$
729

$
7,840

$
3,241

$
435

$
831

$
65

$
21,620

Provision charged to operating expenses
2,434

(5
)
1,473

1,225

140

67

80

36

5,450

Recoveries of loans previously charged-off
201

—

7

450

30

1

45

—

734

Loans charged-off
(460
)
—

(92
)
(598
)
(272
)
(65
)
(159
)
—

(1,646
)
Balance at June 30
$
10,575

$
74

$
2,117

$
8,917

$
3,139

$
438

$
797

$
101

$
26,158


(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Resi dential
Consumer
Unallo-cated
Total
2011
 
 
 
 
 
 
 
 
 
Balance at April 1
$
8,861

$
83

$
942

$
6,016

$
4,583

$
461

$
761

$
143

$
21,850

Provision charged to operating expenses
734

(2
)
52

375

492

(52
)
184

(83
)
1,700

Recoveries of loans previously charged-off
15

—

—

—

2

29

32

—

78

Loans charged-off
(659
)
—

—

(1,000
)
(42
)
—

(204
)
—

(1,905
)
Balance at June 30
$
8,951

$
81

$
994

$
5,391

$
5,035

$
438

$
773

$
60

$
21,723


(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Resi dential
Consumer
Unallo-cated
Total
2011
 
 
 
 
 
 
 
 
 
Balance at January 1
$
9,679

$
86

$
910

$
5,420

$
4,002

$
442

$
702

$
377

$
21,618

Provision charged to operating expenses
132

(5
)
86

1,353

1,503

68

672

(317
)
3,492

Recoveries of loans previously charged-off
53

—

—

—

8

29

34

—

124

Loans charged-off
(913
)
—

(2
)
(1,382
)
(478
)
(101
)
(635
)
—

(3,511
)
Balance at June 30
$
8,951

$
81

$
994

$
5,391

$
5,035

$
438

$
773

$
60

$
21,723
Schedule of Impaired Loan Receivables
The following table presents information regarding the Company's impaired loans as of June 30, 2012 and December 31, 2011:

 
June 30, 2012
December 31, 2011
(in thousands)
Recorded Invest- ment
Unpaid Principal Balance
Related Allowance
Recorded Invest- ment
Unpaid Principal Balance
Related Allowance
Loans with no related allowance:
 
 
 
 
 
 
   Commercial and industrial
$
10,705

$
16,381

$
—

$
14,504

$
19,672

$
—

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
3,732

4,116

—

7,000

8,845

—

   Commercial construction and land
     development
10,154

17,762

—

11,203

19,756

—

   Commercial real estate
10,312

10,536

—

12,117

12,390

—

   Residential
4,137

4,385

—

3,346

3,729

—

   Consumer
2,301

2,517

—

1,829

2,168

—

Total impaired loans with no related
  allowance
41,341

55,697

—

49,999

66,560

—

Loans with an allowance recorded:
 
 
 
 
 
 
   Commercial and industrial
8,291

9,318

3,187

1,000

1,000

1,000

   Owner occupied real estate
1,456

1,456

1,456

492

659

30

   Commercial construction and land
     development
13,354

13,354

3,677

12,013

12,013

2,600

Total impaired loans with an
  allowance recorded
23,101

24,128

8,320

13,505

13,672

3,630

Total impaired loans:
 
 
 
 
 
 
   Commercial and industrial
18,996

25,699

3,187

15,504

20,672

1,000

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
5,188

5,572

1,456

7,492

9,504

30

   Commercial construction and land
     development
23,508

31,116

3,677

23,216

31,769

2,600

   Commercial real estate
10,312

10,536

—

12,117

12,390

—

   Residential
4,137

4,385

—

3,346

3,729

—

   Consumer
2,301

2,517

—

1,829

2,168

—

Total impaired loans
$
64,442

$
79,825

$
8,320

$
63,504

$
80,232

$
3,630


Total commercial and industrial loans with an allowance recorded increased $7.3 million during the first six months of 2012, primarily as a result of two loans which management determined to require a specific allocation. One of the loans is considered 100% collateral dependent and the allowance was based on an analysis of recent appraisals. The second loan is not entirely collateral dependent, however, management's impairment analysis determined that a specific allocation of the allowance was required.
The following table presents additional information regarding the Company's impaired loans for the three and six months ended June 30, 2012 and 2011:

 
Three Months Ended
Six Months Ended
 
June 30, 2012
June 30, 2011
June 30, 2012
June 30, 2011
(in thousands)
Average Recorded Investment
Interest Income Recognized
Average Recorded Investment
Interest Income Recognized
Average Recorded Investment
Interest Income Recognized
Average Recorded Investment
Interest Income Recognized
Loans with no related allowance:
 
 
 
 
 
 
 
   Commercial and industrial
$
11,321

$
31

$
13,566

$
4

$
12,103

$
92

$
16,717

$
90

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
4,306

43

4,156

30

5,508

123

5,759

100

   Commercial construction and
     land development
10,680

130

10,148

2

11,161

251

12,096

115

   Commercial real estate
10,842

39

7,209

37

11,429

96

7,509

75

   Residential
3,963

7

3,674

—

3,785

18

3,784

—

   Consumer
2,268

2

2,273

—

2,136

2

2,149

—

Total impaired loans with no
  related allowance
43,380

252

41,026

73

46,122

582

48,014

380

Loans with an allowance recorded:
 
 
 
 
 
 
 
   Commercial and industrial
4,219

—

8,634

—

3,010

—

8,742

—

   Owner occupied real estate
1,456

—

739

—

1,136

—

743

—

   Commercial construction and
     land development
13,312

—

3,365

—

13,066

—

3,857

—

Total impaired loans with an
  allowance recorded
18,987

—

12,738

—

17,212

—

13,342

—

Total impaired loans:
 
 
 
 
 
 
 
 
   Commercial and industrial
15,540

31

22,200

4

15,113

92

25,459

90

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
5,762

43

4,895

30

6,644

123

6,502

100

   Commercial construction and
     land development
23,992

130

13,513

2

24,227

251

15,953

115

   Commercial real estate
10,842

39

7,209

37

11,429

96

7,509

75

   Residential
3,963

7

3,674

—

3,785

18

3,784

—

   Consumer
2,268

2

2,273

—

2,136

2

2,149

—

Total impaired loans
$
62,367

$
252

$
53,764

$
73

$
63,334

$
582

$
61,356

$
380
Credit Quality Indicators for Commercial Loans, by Loan Type
Credit quality indicators for commercial loans broken out by loan type are presented in the following tables for the periods ended June 30, 2012 and December 31, 2011. There were no loans classified as doubtful for the periods ended June 30, 2012 or December 31, 2011.

 
June 30, 2012
(in thousands)
Pass Rated Loans
Special Mention
Substandard Accrual
Substandard Nonaccrual
Total
Commercial credit exposure:






   Commercial and industrial
$
312,039

$
7,244

$
20,829

$
16,631

$
356,743

   Commercial tax-exempt
84,616

—

—

—

84,616

   Owner occupied real estate
258,995

2,836

9,398

3,275

274,504

   Commercial construction and land development
83,674

3,948

16,395

4,002

108,019

   Commercial real estate
360,696

5,323

5,055

6,174

377,248

     Total
$
1,100,020

$
19,351

$
51,677

$
30,082

$
1,201,130


 
December 31, 2011
(in thousands)
Pass Rated Loans
Special Mention
Substandard Accrual
Substandard Nonaccrual
Total
Commercial credit exposure:
 
 
 
 
 
   Commercial and industrial
$
280,884

$
9,176

$
21,766

$
10,162

$
321,988

   Commercial tax-exempt
77,657

3,875

—

—

81,532

   Owner occupied real estate
263,001

2,887

10,589

2,895

279,372

   Commercial construction and land development
76,374

3,071

15,197

8,511

103,153

   Commercial real estate
349,786

794

6,005

7,820

364,405

     Total
$
1,047,702

$
19,803

$
53,557

$
29,388

$
1,150,450


 
Consumer loan credit exposures are rated either performing or nonperforming as detailed below at June 30, 2012 and December 31, 2011:

 
June 30, 2012
(in thousands)
Performing
Nonperforming
Total
Consumer credit exposure:
 
 
 
   Residential
$
81,147

$
3,233

$
84,380

   Consumer
205,122

2,123

207,245

     Total
$
286,269

$
5,356

$
291,625


 
December 31, 2011
(in thousands)
Performing
Nonperforming
Total
Consumer credit exposure:
 
 
 
   Residential
$
81,028

$
2,912

$
83,940

   Consumer
200,449

1,829

202,278

     Total
$
281,477

$
4,741

$
286,218
Troubled Debt Restructurings on Loan Receivables Modified During the Current Period
The following table presents new TDRs, with the recorded investment at the time of restructure, being the same pre-modification and post-modification, modified during the three and six month periods ended June 30, 2012 and 2011.

 
New TDRs for the Three Months Ended
New TDRs for the Six Months Ended
 
June 30, 2012
June 30, 2011
June 30, 2012
June 30, 2011
(dollars in thousands)
Number of Contracts
Recorded Investment at Time of Restructure
Number of Contracts
Recorded Investment at Time of Restructure
Number of Contracts
Recorded Investment at Time of Restructure
Number of Contracts
Recorded Investment at Time of Restructure
   Commercial and industrial
1

$
1,262

1

$
3,516

1

$
1,262

3

$
12,042

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
—

—

—

—

—

—

—

—

   Commercial construction and
     land development
1

351

—

—

5

3,396

—

—

   Commercial real estate
—

—

—

—

1

68

—

—

   Residential
1

280

1

194

2

475

1

194

   Consumer
1

178

—

—

2

195

—

—

Total
4

$
2,071

2

$
3,710

11

$
5,396

4

$
12,236
Troubled Debt Restructurings on Loan Receivables, by Concession Type
The following tables present the number of contracts and balances at the time the loans were converted to a TDR status by concession type for the three and six months ended June 30, 2012 and 2011:

(dollars in thousands)
Granting a Material Extension of Time
Forbearance Agreement
Accepting Interest Only for a Period of Time
Adjusting the Interest Rate
Change in Amortization Period
Adjusting the Interest Rate & Change in Amortization Period
Three Months Ended
June 30, 2012
 
 
 
 
Commercial and industrial:
 
 
 
 
 
 
   Number of Contracts
1

—

—

—

—

—

   Balance at time of TDR
$
1,262

$
—

$
—

$
—

$
—

$
—

Commercial construction and
land development:
 
 
 
 
 
 
   Number of Contracts
1

—

—

—

—

—

   Balance at time of TDR
$
351

$
—

$
—

$
—

$
—

$
—

Residential:
 
 
 
 
 
 
   Number of Contracts
1

—

—

—

—

—

   Balance at time of TDR
$
280

$
—

$
—

$
—

$
—

$
—

Consumer:
 
 
 
 
 
 
   Number of Contracts
1

—

—

—

—

—

   Balance at time of TDR
$
178

$
—

$
—

$
—

$
—

$
—

Totals:
 
 
 
 
 
 
   Number of Contracts
4

—

—

—

—

—

   Balance at time of TDR
$
2,071

$
—

$
—

$
—

$
—

$
—


(dollars in thousands)
Granting a Material Extension of Time
Forbearance Agreement
Accepting Interest Only for a Period of Time
Adjusting the Interest Rate
Change in Amortization Period
Adjusting the Interest Rate & Change in Amortization Period
Three Months Ended
June 30, 2011
 
 
 
 
Commercial and industrial:


 



   Number of Contracts
—

1

—

—

—

—

   Balance at time of TDR
$
—

$
3,516

$
—

$
—

$
—

$
—

Residential:


 
 


   Number of Contracts
—

—

1

—

—

—

   Balance at time of TDR
$
—

$
—

$
194

$
—

$
—

$
—

Totals:
 
 
 
 
 
 
   Number of Contracts
—

1

1

—

—

—

   Balance at time of TDR
$
—

$
3,516

$
194

$
—

$
—

$
—



(dollars in thousands)
Granting a Material Extension of Time
Forbearance Agreement
Accepting Interest Only for a Period of Time
Adjusting the Interest Rate
Change in Amortization Period
Adjusting the Interest Rate & Change in Amortization Period
Six Months Ended
June 30, 2012
 
 
 
 
Commercial and industrial:
 
 
 
 
 
 
   Number of Contracts
1

—

—

—

—

—

   Balance at time of TDR
$
1,262

$
—

$
—

$
—

$
—

$
—

Commercial construction and
land development:
 
 
 
 
 
 
   Number of Contracts
5

—

—

—

—

—

   Balance at time of TDR
$
3,396

$
—

$
—

$
—

$
—

$
—

Commercial real estate:
 
 
 
 
 
 
   Number of Contracts
1

—

—

—

—

—

   Balance at time of TDR
$
68

$
—

$
—

$
—

$
—

$
—

Residential:
 
 
 
 
 
 
   Number of Contracts
1

—

—

—

—

1

   Balance at time of TDR
$
280

$
—

$
—

$
—

$
—

$
195

Consumer:
 
 
 
 
 
 
   Number of Contracts
2

—

—

—

—

—

   Balance at time of TDR
$
195

$
—

$
—

$
—

$
—

$
—

Totals:
 
 
 
 
 
 
   Number of Contracts
10

—

—

—

—

1

   Balance at time of TDR
$
5,201

$
—

$
—

$
—

$
—

$
195


(dollars in thousands)
Granting a Material Extension of Time
Forbearance Agreement
Accepting Interest Only for a Period of Time
Adjusting the Interest Rate
Change in Amortization Period
Adjusting the Interest Rate & Change in Amortization Period
Six Months Ended
June 30, 2011
 
 
 
 
Commercial and industrial:
 
 
 
 
 
 
   Number of Contracts
—

3

—

—

—

—

   Balance at time of TDR
$
—

$
12,042

$
—

$
—

$
—

$
—

Residential:
 
 
 
 
 
 
   Number of Contracts
—

—

1

—

—

—

   Balance at time of TDR
$
—

$
—

$
194

$
—

$
—

$
—

Totals:
 
 
 
 
 
 
   Number of Contracts
—

3

1

—

—

—

   Balance at time of TDR
$
—

$
12,042

$
194

$
—

$
—

$
—
Loans Receivable Modified as Troubled Debt Restructurings, Previous 12 Months, Subsequently Defaulted
The following table represents loans receivable modified as TDRs within the 12 months previous to June 30, 2012 and 2011, respectively, which subsequently defaulted during the three and six month periods ended June 30, 2012 and 2011, respectively. The Bank's policy is to consider a loan past due or delinquent if payment is not received on or before the due date.
Troubled Debt Restructurings That Subsequently Defaulted:
Three Months Ended
Six Months Ended
 
June 30, 2012
June 30, 2011
June 30, 2012
June 30, 2011
(dollars in thousands)
Number of Contracts
Recorded Investment
Number of Contracts
Recorded Investment
Number of Contracts
Recorded Investment
Number of Contracts
Recorded Investment
   Commercial and industrial
1

$
2

—

$
—

2

$
180

2

$
8,276

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
—

—

—

—

1

82

—

—

   Commercial construction
     and land development
1

211

—

—

5

3,239

—

—

   Commercial real estate
—

—

—

—

4

3,366

—

—

   Residential
1

194

1

194

3

624

1

194

   Consumer
1

177

—

—

1

177

—

—

Total
4

$
584

1

$
194

16

$
7,668

3

$
8,470