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Loans Receivable and Allowance for Loan Losses Loans Receivable and Allowance for Loan Losses (Tables)
 12 Months Ended
Dec. 31, 2012
Receivables [Abstract]  
Summary of Loans Receivable
A summary of the Bank's loans receivable at December 31, 2012 and 2011 is as follows:
 
 
December 31,
(in thousands)
2012
 
2011
Commercial and industrial
$
376,988

 
$
321,988

Commercial tax-exempt
92,202

 
81,532

Owner occupied real estate
268,372

 
279,372

Commercial construction and land development
100,399

 
103,153

Commercial real estate
394,404

 
364,405

Residential
83,899

 
83,940

Consumer
212,533

 
202,278

 
1,528,797

 
1,436,668

Less: allowance for loan losses
25,282

 
21,620

Net loans receivable
$
1,503,515

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

 
December 31,
(in thousands)
2012
 
2011
Nonaccrual loans:
 
 
 
   Commercial and industrial
$
11,289

 
$
10,162

   Commercial tax-exempt
—

 
—

   Owner occupied real estate
3,119

 
2,895

   Commercial construction and land development
6,300

 
8,511

   Commercial real estate
5,659

 
7,820

   Residential
3,203

 
2,912

   Consumer
2,846

 
1,829

Total nonaccrual loans
$
32,416

 
$
34,129
Age Analysis of Past Due Loan Receivables
The following table is an age analysis of past due loan receivables as of December 31, 2012 and 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
December 31, 2012
 
 
 
 
 
 
 
Commercial and industrial
$
368,769

$
1,096

$
3,256

$
3,867

$
8,219

$
376,988

$
30

Commercial tax-exempt
92,202

—

—

—

—

92,202

—

Owner occupied real estate
265,817

610

353

1,592

2,555

268,372

—

Commercial construction and
land development
89,250

4,251

4,318

2,580

11,149

100,399

188

Commercial real estate
386,821

3,846

78

3,659

7,583

394,404

—

Residential
76,587

4,303

1,252

1,757

7,312

83,899

—

Consumer
208,335

2,277

410

1,511

4,198

212,533

2

Total
$
1,487,781

$
16,383

$
9,667

$
14,966

$
41,016

$
1,528,797

$
220


 
 
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 December 31, 2012 and 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
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
Individually evaluated
for impairment
$
2,399

$
—

$
1,451

$
2,470

$
800

$
—

$
—

$
—

$
7,120

Collectively evaluated
for impairment
7,560

83

678

4,752

3,183

324

793

789

18,162

Total ALL
$
9,959

$
83

$
2,129

$
7,222

$
3,983

$
324

$
793

$
789

$
25,282

Loans receivable:
 
 
 
 
 
 
 
 
 
Loans evaluated
  individually
$
13,082

$
—

$
3,380

$
15,549

$
17,136

$
4,163

$
3,331

$
—

$
56,641

Loans evaluated
  collectively
363,906

92,202

264,992

84,850

377,268

79,736

209,202

—

1,472,156

Total loans receivable
$
376,988

$
92,202

$
268,372

$
100,399

$
394,404

$
83,899

$
212,533

$
—

$
1,528,797


(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction 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 twelve months ended December 31, 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 January 1
$
8,400

$
79

$
729

$
7,840

$
3,241

$
435

$
831

$
65

$
21,620

Provision charged to operating expenses
3,634

4

2,165

243

2,498

193

639

724

10,100

Recoveries of loans previously charged-off
227

—

7

517

97

4

67

—

919

Loans charged-off
(2,302
)
—

(772
)
(1,378
)
(1,853
)
(308
)
(744
)
—

(7,357
)
Balance at December 31
$
9,959

$
83

$
2,129

$
7,222

$
3,983

$
324

$
793

$
789

$
25,282


(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
6,510

(7
)
13

13,038

76

113

1,161

(312
)
20,592

Recoveries of loans previously charged-off
156

—

60

11

15

68

135

—

445

Loans charged-off
(7,945
)
—

(254
)
(10,629
)
(852
)
(188
)
(1,167
)
—

(21,035
)
Balance at December 31
$
8,400

$
79

$
729

$
7,840

$
3,241

$
435

$
831

$
65

$
21,620


The following table summarizes the transactions in the ALL for the twelve months ended December 31, 2010. The table is presented in summary as the FASB guidance issued in July 2010 related to an entity's allowance for credit losses and the credit quality of its financing receivables required the activity by portfolio segment be disclosed only for periods beginning on or after December 15, 2010.

 
Year Ended December 31,
(in thousands)
2010
Balance at beginning of year
$
14,391

Provision charged to expense
21,000

Recoveries
522

Loans charged off
(14,295
)
Balance at end of year
$
21,618
Schedule of Impaired Loan Receivables
The following table presents information regarding the Company's impaired loans as of December 31, 2012 and 2011:

 
December 31, 2012
December 31, 2011
(in thousands)
Recorded Investment
Unpaid Principal Balance
Related Allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance
Loans with no related allowance:
 
 
 
 
 
 
   Commercial and industrial
$
7,426

$
11,746

$
—

$
14,504

$
19,672

$
—

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
1,929

2,301

—

7,000

8,845

—

   Commercial construction and land
development
7,716

8,500

—

11,203

19,756

—

   Commercial real estate
12,965

14,619

—

12,117

12,390

—

   Residential
4,163

4,423

—

3,346

3,729

—

   Consumer
3,331

3,547

—

1,829

2,168

—

Total impaired loans with no related
allowance
37,530

45,136

—

49,999

66,560

—

Loans with an allowance recorded:
 
 
 
 
 
 
   Commercial and industrial
5,656

6,526

2,399

1,000

1,000

1,000

   Owner occupied real estate
1,451

1,451

1,451

492

659

30

   Commercial construction and land
development
7,833

7,833

2,470

12,013

12,013

2,600

   Commercial real estate
4,171

4,172

800

—

—

—

Total impaired loans with an
allowance recorded
19,111

19,982

7,120

13,505

13,672

3,630

Total impaired loans:
 
 
 
 
 
 
   Commercial and industrial
13,082

18,272

2,399

15,504

20,672

1,000

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
3,380

3,752

1,451

7,492

9,504

30

   Commercial construction and land
development
15,549

16,333

2,470

23,216

31,769

2,600

   Commercial real estate
17,136

18,791

800

12,117

12,390

—

   Residential
4,163

4,423

—

3,346

3,729

—

   Consumer
3,331

3,547

—

1,829

2,168

—

Total impaired loans
$
56,641

$
65,118

$
7,120

$
63,504

$
80,232

$
3,630

The following table presents additional information regarding the Company's impaired loans for the twelve months ended December 31, 2012 and 2011:

 
December 31, 2012
December 31, 2011
(in thousands)
Average Recorded Investment
Interest Income Recognized
Average Recorded Investment
Interest Income Recognized
Loans with no related allowance:
 
 
 
   Commercial and industrial
$
11,567

$
171

$
12,901

$
141

   Commercial tax-exempt
—

—

—

—

   Owner occupied real estate
3,846

150

5,333

191

   Commercial construction and
     land development
10,319

510

11,803

231

   Commercial real estate
12,434

319

9,500

192

   Residential
3,994

43

3,557

6

   Consumer
2,539

18

1,945

—

Total impaired loans with no
  related allowance
44,699

1,211

45,039

761

Loans with an allowance recorded:
 
 
 
   Commercial and industrial
5,258

—

7,974

—

   Owner occupied real estate
1,571

—

453

—

   Commercial construction and
     land development
11,375

—

4,637

—

   Commercial real estate
655

—

—

—

Total impaired loans with an
  allowance recorded
18,859

—

13,064

—

Total impaired loans:
 
 
 
 
   Commercial and industrial
16,825

171

20,875

141

   Commercial tax-exempt
—

—

—

—

   Owner occupied real estate
5,417

150

5,786

191

   Commercial construction and
     land development
21,694

510

16,440

231

   Commercial real estate
13,089

319

9,500

192

   Residential
3,994

43

3,557

6

   Consumer
2,539

18

1,945

—

Total impaired loans
$
63,558

$
1,211

$
58,103

$
761
Credit Quality Indicators for Commercial Loans, by Loan Type
Consumer credit exposures are rated as performing or nonperforming as detailed below at December 31, 2012 and 2011:

 
December 31, 2012
(in thousands)
Performing
Nonperforming
Total
Consumer credit exposure:
 
 
 
   Residential
$
80,696

$
3,203

$
83,899

   Consumer
209,687

2,846

212,533

     Total
$
290,383

$
6,049

$
296,432


 
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

Credit quality indicators for commercial loans broken out by loan type are presented in the following tables for the years ended December 31, 2012 and 2011. There were no loans classified as doubtful for the years ended December 31, 2012 or December 31, 2011.

 
December 31, 2012
(in thousands)
Pass
Special Mention
Substandard Accrual
Substandard Nonaccrual
Doubtful
Total
Commercial credit exposure:
 
 
 
 
 
 
   Commercial and industrial
$
335,463

$
6,120

$
24,116

$
11,289

$
—

$
376,988

   Commercial tax-exempt
92,202

—

—

—

—

92,202

   Owner occupied real estate
253,338

4,160

7,755

3,119

—

268,372

   Commercial construction and land development
81,219

5,046

7,834

6,300

—

100,399

   Commercial real estate
379,313

574

8,858

5,659

—

394,404

     Total
$
1,141,535

$
15,900

$
48,563

$
26,367

$
—

$
1,232,365

 
 
December 31, 2011
(in thousands)
Pass
Special Mention
Substandard Accrual
Substandard Nonaccrual
Doubtful
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
Troubled Debt Restructurings on Loan Receivables, by Concession Type
The following table presents the recorded investment at the time of restructure of new TDRs and their concession, modified during the twelve month periods ended December 31, 2012 and 2011. The recorded investment at the time of restructure was the same pre-modification and post-modification, therefore there was no financial effect of the modification on the recorded investment. The loans included are considered TDRs as a result of the Bank implementing one or more of the following concessions: granting a material extension of time, entering into a forbearance agreement, adjusting the interest rate, accepting interest only payments for an extended period of time, a change in the amortization period or a combination of any of these concessions.
New TDRs with Concession Type:
Twelve Months Ended
 
December 31, 2012
December 31, 2011
(dollars in thousands)
Number of Contracts
Recorded Investment at Time of Restructure
Number of Contracts
Recorded Investment at Time of Restructure
Commercial and industrial:
 
 
 
 
   Material extension of time
1

$
1,262

2

$
629

   Forbearance agreement
—

—

4

12,456

   Interest rate adjustment
1

3,404

—

—

   Change in amortization period
—

—

4

405

   Combination of concessions
2

3,231

—

—

Total commercial and industrial
4

7,897

10

13,490

Owner occupied real estate:
 
 
 
 
   Forbearance agreement
—

—

1

87

   Combination of concessions
1

1,451

—

—

Total owner occupied real estate
1

1,451

1

87

Commercial construction and land development:
 
 
 
 
   Material extension of time
5

3,396

16

10,932

   Forbearance agreement
—

—

1

231

   Combination of concessions
1

3,546

—

—

Total commercial construction and land development
6

6,942

17

11,163

Commercial real estate:
 
 
 
 
   Material extension of time
1

68

—

—

   Forbearance agreement
—

—

1

93

   Interest rate adjustment
—

—

1

1,194

   Change in amortization period
—

—

3

3,081

   Combination of concessions
1

3,275

—

—

Total commercial real estate
2

3,343

5

4,368

Residential:
 
 
 
 
   Material extension of time
2

329

—

—

   Interest rate adjustment
—

—

1

195

   Change in amortization period
—

—

1

355

   Combination of concessions
1

195

1

78

Total residential
3

524

3

628

Consumer:
 
 
 
 
   Material extension of time
4

426

—

—

   Combination of concessions
2

182

—

—

Total consumer
6

608

—

—

Total
22

$
20,765

36

$
29,736
Loans Receivable Modified as Troubled Debt Restructurings, Previous 12 Months, Subsequently Defaulted
The following table represents loans receivable modified as TDRs within the twelve months previous to December 31, 2012 and 2011, respectively, which subsequently defaulted during the 12 month periods ended December 31, 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 Payment Defaulted:
Twelve Months Ended
 
December 31, 2012
December 31, 2011
(dollars in thousands)
Number of Contracts
Recorded Investment
Number of Contracts
Recorded Investment
   Commercial and industrial
3

$
3,901

4

$
5,531

   Commercial tax-exempt
—

—

—

—

   Owner occupied real estate
—

—

—

—

   Commercial construction
     and land development
6

6,169

11

9,162

   Commercial real estate
1

66

2

747

   Residential
2

258

3

617

   Consumer
4

308

—

—

Total
16

$
10,702

20

$
16,057