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Loans Receivable and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2013
Receivables [Abstract]  
Summary of Loans Receivable
A summary of the Bank's loans receivable at June 30, 2013 and December 31, 2012 is as follows:
(in thousands)
June 30, 2013
 
December 31, 2012
Commercial and industrial
$
415,740

 
$
376,988

Commercial tax-exempt
82,455

 
92,202

Owner occupied real estate
288,702

 
268,372

Commercial construction and land development
105,596

 
100,399

Commercial real estate
433,628

 
394,404

Residential
90,590

 
83,899

Consumer
217,155

 
212,533

 
1,633,866

 
1,528,797

Less: allowance for loan losses
28,038

 
25,282

Net loans receivable
$
1,605,828

 
$
1,503,515
Summary of Nonaccrual Loans, by Type
The following table summarizes nonaccrual loans by loan type at June 30, 2013 and December 31, 2012:
(in thousands)
June 30, 2013
 
December 31, 2012
Nonaccrual loans:
 
 
 
   Commercial and industrial
$
12,053

 
$
11,289

   Commercial tax-exempt
—

 
—

   Owner occupied real estate
4,999

 
3,119

   Commercial construction and land development
12,027

 
6,300

   Commercial real estate
3,893

 
5,659

   Residential
7,133

 
3,203

   Consumer
3,422

 
2,846

Total nonaccrual loans
$
43,527

 
$
32,416
Age Analysis of Past Due Loan Receivables
The following tables are an age analysis of past due loan receivables as of June 30, 2013 and December 31, 2012:
 
 
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, 2013
 
 
 
 
 
 
 
Commercial and industrial
$
402,836

$
5,307

$
3,067

$
4,530

$
12,904

$
415,740

$
—

Commercial tax-exempt
82,455

—

—

—

—

82,455

—

Owner occupied real estate
283,912

998

626

3,166

4,790

288,702

—

Commercial construction and
land development
97,258

—

—

8,338

8,338

105,596

—

Commercial real estate
427,131

822

4,889

786

6,497

433,628

—

Residential
82,560

—

2,258

5,772

8,030

90,590

—

Consumer
211,777

1,795

1,791

1,792

5,378

217,155

—

Total
$
1,587,929

$
8,922

$
12,631

$
24,384

$
45,937

$
1,633,866

$
—


 
 
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
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, 2013 and December 31, 2012 is detailed in the tables that follow:
(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Residential
Con
sumer
Unallocated
Total
 
 
 
 
 
 
 
 
 
 
June 30, 2013
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
Individually evaluated
for impairment
$
2,695

$
—

$
1,415

$
3,470

$
1,755

$
508

$
492

$
—

$
10,335

Collectively evaluated
for impairment
7,854

74

792

4,340

3,304

355

766

218

17,703

Total ALL
$
10,549

$
74

$
2,207

$
7,810

$
5,059

$
863

$
1,258

$
218

$
28,038

Loans receivable:
 
 
 
 
 
 
 
 
 
Loans evaluated
  individually
$
15,406

$
—

$
5,260

$
15,526

$
15,330

$
8,283

$
3,863

$
—

$
63,668

Loans evaluated
  collectively
400,334

82,455

283,442

90,070

418,298

82,307

213,292

—

1,570,198

Total loans receivable
$
415,740

$
82,455

$
288,702

$
105,596

$
433,628

$
90,590

$
217,155

$
—

$
1,633,866



(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Residential
Con
sumer
Unallocated
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

The following tables summarize the transactions in the ALL for the three and six months ended June 30, 2013 and 2012: 
(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Residential
Consumer
Unallocated
Total
2013
 
 
 
 
 
 
 
 
 
Balance at April 1
$
10,408

$
75

$
2,208

$
7,967

$
5,038

$
338

$
787

$
651

$
27,472

Provision charged to operating expenses
1,175

(1
)
51

(161
)
162

539

468

(433
)
1,800

Recoveries of loans previously charged-off
194

—

—

12

—

—

22

—

228

Loans charged-off
(1,228
)
—

(52
)
(8
)
(141
)
(14
)
(19
)
—

(1,462
)
Balance at June 30
$
10,549

$
74

$
2,207

$
7,810

$
5,059

$
863

$
1,258

$
218

$
28,038


(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Residential
Consumer
Unallocated
Total
2013
 
 
 
 
 
 
 
 
 
Balance at January 1
$
9,959

$
83

$
2,129

$
7,222

$
3,983

$
324

$
793

$
789

$
25,282

Provision charged to operating expenses
1,522

(9
)
311

115

1,299

666

767

(571
)
4,100

Recoveries of loans previously charged-off
332

—

3

498

—

3

58

—

894

Loans charged-off
(1,264
)
—

(236
)
(25
)
(223
)
(130
)
(360
)
—

(2,238
)
Balance at June 30
$
10,549

$
74

$
2,207

$
7,810

$
5,059

$
863

$
1,258

$
218

$
28,038

(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Residential
Consumer
Unallocated
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
Residential
Consumer
Unallocated
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
Schedule of Impaired Loan Receivables
The following table presents additional information regarding the Company's impaired loans for the three and six months ended June 30, 2013 and 2012:
 
Three Months Ended
Six Months Ended
 
June 30, 2013
June 30, 2012
June 30, 2013
June 30, 2012
(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
$
9,952

$
43

$
11,321

$
31

$
9,230

$
74

$
12,103

$
92

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
2,764

—

4,306

43

2,358

—

5,508

123

   Commercial construction and
     land development
7,806

45

10,680

130

7,915

90

11,161

251

   Commercial real estate
11,557

111

10,842

39

12,210

256

11,429

96

   Residential
4,901

19

3,963

7

4,736

36

3,785

18

   Consumer
3,305

8

2,268

2

3,184

14

2,136

2

Total impaired loans with no
  related allowance
40,285

226

43,380

252

39,633

470

46,122

582

Loans with an allowance recorded:
 
 
 
 
 
 
 
   Commercial and industrial
5,312

—

4,219

—

5,251

—

3,010

—

   Owner occupied real estate
1,418

—

1,456

—

1,427

—

1,136

—

   Commercial construction and
     land development
7,816

—

13,312

—

7,829

—

13,066

—

   Commercial real estate
4,159

—

—

—

4,165

—

—

—

   Residential
1,051

—

—

—

526

—

—

—

   Consumer
164

—

—

—

82

—

—

—

Total impaired loans with an
  allowance recorded
19,920

—

18,987

—

19,280

—

17,212

—

Total impaired loans:
 
 
 
 
 
 
 
 
   Commercial and industrial
15,264

43

15,540

31

14,481

74

15,113

92

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
4,182

—

5,762

43

3,785

—

6,644

123

   Commercial construction and
     land development
15,622

45

23,992

130

15,744

90

24,227

251

   Commercial real estate
15,716

111

10,842

39

16,375

256

11,429

96

   Residential
5,952

19

3,963

7

5,262

36

3,785

18

   Consumer
3,469

8

2,268

2

3,266

14

2,136

2

Total impaired loans
$
60,205

$
226

$
62,367

$
252

$
58,913

$
470

$
63,334

$
582

The following table presents information regarding the Company's impaired loans as of June 30, 2013 and December 31, 2012:
 
June 30, 2013
December 31, 2012
(in thousands)
Recorded Investment
Unpaid Principal Balance
Related Allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance
Loans with no related allowance:
 
 
 
 
 
 
   Commercial and industrial
$
10,101

$
15,253

$
—

$
7,426

$
11,746

$
—

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
3,845

4,448

—

1,929

2,301

—

   Commercial construction and land
     development
7,717

7,863

—

7,716

8,500

—

   Commercial real estate
11,173

11,329

—

12,965

14,619

—

   Residential
5,130

5,482

—

4,163

4,423

—

   Consumer
3,371

3,625

—

3,331

3,547

—

Total impaired loans with no related
  allowance
41,337

48,000

—

37,530

45,136

—

Loans with an allowance recorded:
 
 
 
 
 
 
   Commercial and industrial
5,305

5,305

2,695

5,656

6,526

2,399

   Owner occupied real estate
1,415

1,415

1,415

1,451

1,451

1,451

   Commercial construction and land
     development
7,809

7,809

3,470

7,833

7,833

2,470

   Commercial real estate
4,157

4,157

1,755

4,171

4,172

800

   Residential
3,153

3,153

508

—

—

—

   Consumer
492

492

492

—

—

—

Total impaired loans with an
  allowance recorded
22,331

22,331

10,335

19,111

19,982

7,120

Total impaired loans:
 
 
 
 
 
 
   Commercial and industrial
15,406

20,558

2,695

13,082

18,272

2,399

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
5,260

5,863

1,415

3,380

3,752

1,451

   Commercial construction and land
     development
15,526

15,672

3,470

15,549

16,333

2,470

   Commercial real estate
15,330

15,486

1,755

17,136

18,791

800

   Residential
8,283

8,635

508

4,163

4,423

—

   Consumer
3,863

4,117

492

3,331

3,547

—

Total impaired loans
$
63,668

$
70,331

$
10,335

$
56,641

$
65,118

$
7,120
Credit Quality Indicators for 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, 2013 and December 31, 2012. There were no loans classified as doubtful for the periods ended June 30, 2013 or December 31, 2012.

 
June 30, 2013
(in thousands)
Pass
Special Mention
Substandard Accrual
Substandard Nonaccrual
Total
Commercial credit exposure:






   Commercial and industrial
$
367,438

$
11,646

$
24,603

$
12,053

$
415,740

   Commercial tax-exempt
82,455

—

—

—

82,455

   Owner occupied real estate
272,441

3,842

7,420

4,999

288,702

   Commercial construction and land development
89,173

1,851

2,545

12,027

105,596

   Commercial real estate
420,386

567

8,782

3,893

433,628

     Total
$
1,231,893

$
17,906

$
43,350

$
32,972

$
1,326,121


 
December 31, 2012
(in thousands)
Pass
Special Mention
Substandard Accrual
Substandard Nonaccrual
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


 
Consumer loan credit exposures are rated either performing or nonperforming as detailed below at June 30, 2013 and December 31, 2012:
 
June 30, 2013
(in thousands)
Performing
Nonperforming
Total
Consumer credit exposure:
 
 
 
   Residential
$
83,457

$
7,133

$
90,590

   Consumer
213,733

3,422

217,155

     Total
$
297,190

$
10,555

$
307,745


 
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
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 three and six month periods ended June 30, 2013 and 2012. 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:
Three Months Ended
Six Months Ended
 
June 30, 2013
June 30, 2012
June 30, 2013
June 30, 2012
(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:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
$
—

1

 
$
1,262

—

 
$
—

1

 
$
1,262

   Change in amortization period
8

 
1,204

—

 
—

8

 
1,204

—

 
—

Owner occupied real estate:
 
 
 
 
 
 
 
 
 
 
 
 
   Forbearance agreement
—

 
—

—

 
—

1

 
193

—

 
—

Commercial construction and land development:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
1

 
1,851

1

 
351

4

 
2,902

5

 
3,396

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

—

 
—

—

 
—

1

 
68

   Change in amortization period
3

 
2,942

—

 
—

3

 
2,942

—

 
—

Residential:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

1

 
280

1

 
260

1

 
280

   Combination of concessions
—

 
—

—

 
—

—

 
—

1

 
195

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

1

 
178

—

 
—

2

 
195

Total
12

 
$
5,997

4

 
$
2,071

17

 
$
7,501

11

 
$
5,396
Loans Receivable Modified as Troubled Debt Restructurings, Previous 12 Months, Subsequently Defaulted
The following table represents loans receivable modified as TDR within the 12 months previous to June 30, 2013 and 2012, respectively, and that subsequently defaulted during the three and six month periods ended June 30, 2013 and 2012, 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.
TDRs That Subsequently Payment Defaulted:
Three Months Ended
Six Months Ended
 
June 30, 2013
June 30, 2012
June 30, 2013
June 30, 2012
(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
9

 
$
6,151

1

 
$
2

10

 
$
6,390

2

 
$
180

   Commercial tax-exempt
—

 
—

—

 
—

—

 
—

—

 
—

   Owner occupied real estate
2

 
1,610

—

 
—

2

 
1,610

1

 
82

   Commercial construction
     and land development
2

 
2,628

1

 
211

3

 
6,119

5

 
3,239

   Commercial real estate
3

 
2,942

—

 
—

4

 
6,217

4

 
3,366

   Residential
—

 
—

1

 
194

1

 
259

3

 
624

   Consumer
—

 
—

1

 
177

2

 
177

1

 
177

Total
16

 
$
13,331

4

 
$
584

22

 
$
20,772

16

 
$
7,668