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Loans Receivable and Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2013
Receivables [Abstract]  
Summary of Loans Receivable
A summary of the Bank's loans receivable at September 30, 2013 and December 31, 2012 is as follows:
(in thousands)
September 30, 2013
 
December 31, 2012
Commercial and industrial
$
435,508

 
$
376,988

Commercial tax-exempt
82,507

 
92,202

Owner occupied real estate
300,555

 
268,372

Commercial construction and land development
124,376

 
100,399

Commercial real estate
450,611

 
394,404

Residential
94,227

 
83,899

Consumer
214,892

 
212,533

 
1,702,676

 
1,528,797

Less: allowance for loan losses
27,425

 
25,282

Net loans receivable
$
1,675,251

 
$
1,503,515
Summary of Nonaccrual Loans, by Type

The following table summarizes nonaccrual loans by loan type at September 30, 2013 and December 31, 2012:
(in thousands)
September 30, 2013
 
December 31, 2012
Nonaccrual loans:
 
 
 
   Commercial and industrial
$
9,967

 
$
11,289

   Commercial tax-exempt
—

 
—

   Owner occupied real estate
4,924

 
3,119

   Commercial construction and land development
11,723

 
6,300

   Commercial real estate
6,904

 
5,659

   Residential
7,316

 
3,203

   Consumer
2,541

 
2,846

Total nonaccrual loans
$
43,375

 
$
32,416
Age Analysis of Past Due Loan Receivables
The following tables are an age analysis of past due loan receivables as of September 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
September 30, 2013
 
 
 
 
 
 
 
Commercial and industrial
$
427,524

$
2,105

$
945

$
4,934

$
7,984

$
435,508

$
—

Commercial tax-exempt
82,507

—

—

—

—

82,507

—

Owner occupied real estate
293,443

2,870

839

3,403

7,112

300,555

—

Commercial construction and
land development
116,133

169

—

8,074

8,243

124,376

—

Commercial real estate
439,855

3,937

6,241

578

10,756

450,611

—

Residential
90,874

570

1,243

1,540

3,353

94,227

119

Consumer
211,593

1,875

563

861

3,299

214,892

—

Total
$
1,661,929

$
11,526

$
9,831

$
19,390

$
40,747

$
1,702,676

$
119


 
 
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 September 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
 
 
 
 
 
 
 
 
 
 
September 30, 2013
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
Individually evaluated
for impairment
$
1,790

$
—

$
1,390

$
4,050

$
2,638

$
523

$
477

$
—

$
10,868

Collectively evaluated
for impairment
7,473

75

787

3,439

3,113

356

839

475

16,557

Total ALL
$
9,263

$
75

$
2,177

$
7,489

$
5,751

$
879

$
1,316

$
475

$
27,425

Loans receivable:
 
 
 
 
 
 
 
 
 
Loans evaluated
  individually
$
12,806

$
—

$
5,185

$
14,946

$
15,307

$
8,187

$
3,295

$
—

$
59,726

Loans evaluated
  collectively
422,702

82,507

295,370

109,430

435,304

86,040

211,597

—

1,642,950

Total loans receivable
$
435,508

$
82,507

$
300,555

$
124,376

$
450,611

$
94,227

$
214,892

$
—

$
1,702,676



(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 nine months ended September 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 July 1
$
10,549

$
74

$
2,207

$
7,810

$
5,059

$
863

$
1,258

$
218

$
28,038

Provision charged to operating expenses
(437
)
1

4

(33
)
801

45

562

257

1,200

Recoveries of loans previously charged-off
613

—

—

(21
)
—

7

11

—

610

Loans charged-off
(1,462
)
—

(34
)
(267
)
(109
)
(36
)
(515
)
—

(2,423
)
Balance at September 30
$
9,263

$
75

$
2,177

$
7,489

$
5,751

$
879

$
1,316

$
475

$
27,425

(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
1,085

(8
)
315

82

2,100

711

1,329

(314
)
5,300

Recoveries of loans previously charged-off
945

—

3

477

—

10

69

—

1,504

Loans charged-off
(2,726
)
—

(270
)
(292
)
(332
)
(166
)
(875
)
—

(4,661
)
Balance at September 30
$
9,263

$
75

$
2,177

$
7,489

$
5,751

$
879

$
1,316

$
475

$
27,425

(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 July 1
$
10,575

$
74

$
2,117

$
8,917

$
3,139

$
438

$
797

$
101

$
26,158

Provision charged to operating expenses
398

6

294

(762
)
1,609

101

301

553

2,500

Recoveries of loans previously charged-off
15

—

—

64

55

3

20

—

157

Loans charged-off
(487
)
—

—

(625
)
(1,580
)
(198
)
(329
)
—

(3,219
)
Balance at September 30
$
10,501

$
80

$
2,411

$
7,594

$
3,223

$
344

$
789

$
654

$
25,596


(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
2,832

1

1,766

464

1,749

168

381

589

7,950

Recoveries of loans previously charged-off
216

—

8

513

85

4

65

—

891

Loans charged-off
(947
)
—

(92
)
(1,223
)
(1,852
)
(263
)
(488
)
—

(4,865
)
Balance at September 30
$
10,501

$
80

$
2,411

$
7,594

$
3,223

$
344

$
789

$
654

$
25,596
Schedule of Impaired Loan Receivables
The following table presents additional information regarding the Company's impaired loans for the three and nine months ended September 30, 2013 and 2012:
 
Three Months Ended
Nine Months Ended
 
September 30, 2013
September 30, 2012
September 30, 2013
September 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
$
9,501

$
47

$
11,921

$
48

$
9,320

$
121

$
12,042

$
140

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
3,808

—

2,379

27

2,841

—

4,465

150

   Commercial construction and
     land development
6,366

43

9,682

166

7,399

133

10,668

417

   Commercial real estate
10,229

104

12,238

79

11,550

360

11,699

175

   Residential
5,355

13

4,270

13

4,942

49

3,946

31

   Consumer
3,190

8

2,632

6

3,186

22

2,301

8

Total impaired loans with no
  related allowance
38,449

215

43,122

339

39,238

685

45,121

921

Loans with an allowance recorded:
 
 
 
 
 
 
 
   Commercial and industrial
4,587

—

8,106

—

5,030

—

4,709

—

   Owner occupied real estate
1,399

—

2,036

—

1,418

—

1,436

—

   Commercial construction and
     land development
8,848

—

11,524

—

8,168

—

12,552

—

   Commercial real estate
5,129

—

—

—

4,486

—

—

—

   Residential
3,091

—

—

—

1,381

—

—

—

   Consumer
478

—

—

—

214

—

—

—

Total impaired loans with an
  allowance recorded
23,532

—

21,666

—

20,697

—

18,697

—

Total impaired loans:
 
 
 
 
 
 
 
 
   Commercial and industrial
14,088

47

20,027

48

14,350

121

16,751

140

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
5,207

—

4,415

27

4,259

—

5,901

150

   Commercial construction and
     land development
15,214

43

21,206

166

15,567

133

23,220

417

   Commercial real estate
15,358

104

12,238

79

16,036

360

11,699

175

   Residential
8,446

13

4,270

13

6,323

49

3,946

31

   Consumer
3,668

8

2,632

6

3,400

22

2,301

8

Total impaired loans
$
61,981

$
215

$
64,788

$
339

$
59,935

$
685

$
63,818

$
921

The following table presents information regarding the Company's impaired loans as of September 30, 2013 and December 31, 2012:
 
September 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
$
9,577

$
14,109

$
—

$
7,426

$
11,746

$
—

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
3,795

4,351

—

1,929

2,301

—

   Commercial construction and land
     development
5,574

5,987

—

7,716

8,500

—

   Commercial real estate
8,220

8,301

—

12,965

14,619

—

   Residential
5,098

5,471

—

4,163

4,423

—

   Consumer
2,818

3,095

—

3,331

3,547

—

Total impaired loans with no related
  allowance
35,082

41,314

—

37,530

45,136

—

Loans with an allowance recorded:
 
 
 
 
 
 
   Commercial and industrial
3,229

3,229

1,790

5,656

6,526

2,399

   Owner occupied real estate
1,390

1,390

1,390

1,451

1,451

1,451

   Commercial construction and land
     development
9,372

9,372

4,050

7,833

7,833

2,470

   Commercial real estate
7,087

7,087

2,638

4,171

4,172

800

   Residential
3,089

3,089

523

—

—

—

   Consumer
477

477

477

—

—

—

Total impaired loans with an
  allowance recorded
24,644

24,644

10,868

19,111

19,982

7,120

Total impaired loans:
 
 
 
 
 
 
   Commercial and industrial
12,806

17,338

1,790

13,082

18,272

2,399

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
5,185

5,741

1,390

3,380

3,752

1,451

   Commercial construction and land
     development
14,946

15,359

4,050

15,549

16,333

2,470

   Commercial real estate
15,307

15,388

2,638

17,136

18,791

800

   Residential
8,187

8,560

523

4,163

4,423

—

   Consumer
3,295

3,572

477

3,331

3,547

—

Total impaired loans
$
59,726

$
65,958

$
10,868

$
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 September 30, 2013 and December 31, 2012. There were no loans classified as doubtful for the periods ended September 30, 2013 or December 31, 2012.

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






   Commercial and industrial
$
393,313

$
9,454

$
22,774

$
9,967

$
435,508

   Commercial tax-exempt
82,507

—

—

—

82,507

   Owner occupied real estate
284,355

3,983

7,293

4,924

300,555

   Commercial construction and land development
108,560

—

4,093

11,723

124,376

   Commercial real estate
437,256

607

5,844

6,904

450,611

     Total
$
1,305,991

$
14,044

$
40,004

$
33,518

$
1,393,557


 
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 September 30, 2013 and December 31, 2012:
 
September 30, 2013
(in thousands)
Performing
Nonperforming
Total
Consumer credit exposure:
 
 
 
   Residential
$
86,911

$
7,316

$
94,227

   Consumer
212,351

2,541

214,892

     Total
$
299,262

$
9,857

$
309,119


 
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 nine month periods ended September 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
Nine Months Ended
 
September 30, 2013
September 30, 2012
September 30, 2013
September 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

   Interest rate adjustment
—

 
—

1

 
3,404

—

 
—

1

 
3,404

   Change in amortization period
—

 
—

—

 
—

7

 
1,079

—

 
—

   Combination of concessions
—

 
—

—

 
—

1

 
125

—

 
—

Owner occupied real estate:
 
 
 
 
 
 
 
 
 
 
 
 
   Forbearance agreement
—

 
—

—

 
—

1

 
193

—

 
—

Commercial construction and land development:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
1

 
1,749

—

 
—

4

 
2,801

5

 
3,396

   Combination of concessions
—

 
—

1

 
3,546

—

 
—

1

 
3,546

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

—

 
—

—

 
—

1

 
68

   Change in amortization period
—

 
—

—

 
—

—

 
—

—

 
—

   Combination of concessions
—

 
—

1

 
3,275

3

 
2,945

1

 
3,275

Residential:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

1

 
49

1

 
260

2

 
329

   Forbearance agreement
1

 
3,096

—

 
—

1

 
3,096

—

 
—

   Change in amortization period
1

 
346

—

 
—

1

 
346

—

 
—

   Combination of concessions
—

 
—

—

 
—

—

 
—

1

 
195

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

2

 
664

1

 
35

4

 
859

   Forbearance agreement
1

 
480

—

 
—

1

 
480

—

 
—

Total
4

 
$
5,671

6

 
$
10,938

21

 
$
11,360

17

 
$
16,334
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 September 30, 2013 and 2012, respectively, and that subsequently defaulted during the three and nine month periods ended September 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
Nine Months Ended
 
September 30, 2013
September 30, 2012
September 30, 2013
September 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
1

 
$
179

1

 
$
2

10

 
$
5,051

2

 
$
177

   Commercial tax-exempt
—

 
—

—

 
—

—

 
—

—

 
—

   Owner occupied real estate
—

 
—

—

 
—

2

 
1,580

—

 
—

   Commercial construction
     and land development
—

 
—

—

 
—

2

 
2,426

4

 
2,575

   Commercial real estate
—

 
—

—

 
—

3

 
2,943

2

 
1,011

   Residential
1

 
3,089

1

 
65

2

 
3,348

3

 
609

   Consumer
1

 
477

—

 
—

2

 
575

1

 
178

Total
3

 
$
3,745

2

 
$
67

21

 
$
15,923

12

 
$
4,550