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Loans Receivable and Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2014
Receivables [Abstract]  
Summary of Loans Receivable
A summary of the Bank's loans receivable at September 30, 2014 and December 31, 2013 is as follows:
(in thousands)
September 30, 2014
 
December 31, 2013
Commercial and industrial
$
478,605

 
$
447,144

Commercial tax-exempt
75,986

 
81,734

Owner occupied real estate
312,032

 
302,417

Commercial construction and land development
122,314

 
133,176

Commercial real estate
594,004

 
473,188

Residential
107,707

 
97,766

Consumer
222,972

 
215,447

 
1,913,620

 
1,750,872

Less: allowance for loan losses
24,540

 
23,110

Net loans receivable
$
1,889,080

 
$
1,727,762
Summary of Nonaccrual Loans, by Type

The following table summarizes nonaccrual loans by loan type at September 30, 2014 and December 31, 2013:
(in thousands)
September 30, 2014
 
December 31, 2013
Nonaccrual loans:
 
 
 
   Commercial and industrial
$
7,974

 
$
10,217

   Commercial tax-exempt
—

 
—

   Owner occupied real estate
6,954

 
4,838

   Commercial construction and land development
3,254

 
8,587

   Commercial real estate
6,407

 
6,705

   Residential
6,157

 
7,039

   Consumer
2,421

 
2,577

Total nonaccrual loans
$
33,167

 
$
39,963
Age Analysis of Past Due Loan Receivables
The following tables are an age analysis of past due loans receivable as of September 30, 2014 and December 31, 2013:
 
 
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 Loans Receivable
September 30, 2014
 
 
 
 
 
 
 
Commercial and industrial
$
468,201

$
6,450

$
—

$
3,954

$
10,404

$
478,605

$
—

Commercial tax-exempt
75,986

—

—

—

—

75,986

—

Owner occupied real estate
303,016

2,175

1,201

5,640

9,016

312,032

—

Commercial construction and
land development
122,262

52

—

—

52

122,314

—

Commercial real estate
587,144

1,951

969

3,940

6,860

594,004

8

Residential
101,929

90

1,171

4,517

5,778

107,707

—

Consumer
219,405

1,399

231

1,937

3,567

222,972

—

Total
$
1,877,943

$
12,117

$
3,572

$
19,988

$
35,677

$
1,913,620

$
8


 
 
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 Loans Receivable
December 31, 2013
 
 
 
 
 
 
 
Commercial and industrial
$
438,522

$
1,830

$
1,041

$
5,751

$
8,622

$
447,144

$
17

Commercial tax-exempt
81,734

—

—

—

—

81,734

—

Owner occupied real estate
295,278

2,618

1,674

2,847

7,139

302,417

—

Commercial construction and
land development
124,240

3,355

342

5,239

8,936

133,176

—

Commercial real estate
465,765

2,142

444

4,837

7,423

473,188

235

Residential
85,352

4,194

6,304

1,916

12,414

97,766

117

Consumer
210,906

2,095

1,335

1,111

4,541

215,447

—

Total
$
1,701,797

$
16,234

$
11,140

$
21,701

$
49,075

$
1,750,872

$
369
Summary of Allowances on Loan Receivables, by Class
The following tables summarize the transactions in the ALL for the three and nine months ended September 30, 2014 and 2013: 
(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Residential
Consumer
Unallocated
Total
2014
 
 
 
 
 
 
 
 
 
Balance at July 1
$
7,100

$
67

$
2,233

$
6,696

$
4,840

$
1,061

$
1,333

$
941

$
24,271

Provision charged to operating expenses
3,047

—

(98
)
(1,954
)
260

581

427

(163
)
2,100

Recoveries of loans previously charged-off
137

—

24

34

2

—

58

—

255

Loans charged-off
(300
)
—

(187
)
(754
)
(355
)
(38
)
(452
)
—

(2,086
)
Balance at September 30
$
9,984

$
67

$
1,972

$
4,022

$
4,747

$
1,604

$
1,366

$
778

$
24,540

(in thousands)
Comm. and industrial
Comm. tax-exempt
Owner occupied real estate
Comm. construction and land development
Comm. real estate
Residential
Consumer
Unallocated
Total
2014
 
 
 
 
 
 
 
 
 
Balance at January 1
$
8,178

$
72

$
2,180

$
5,559

$
4,161

$
960

$
1,303

$
697

$
23,110

Provision charged to operating expenses
1,575

(5
)
(135
)
(489
)
1,481

964

628

81

4,100

Recoveries of loans previously charged-off
1,386

—

310

245

176

20

97

—

2,234

Loans charged-off
(1,155
)
—

(383
)
(1,293
)
(1,071
)
(340
)
(662
)
—

(4,904
)
Balance at September 30
$
9,984

$
67

$
1,972

$
4,022

$
4,747

$
1,604

$
1,366

$
778

$
24,540

(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

A summary of the ALL and balance of loans receivable by loan class and by impairment method as of September 30, 2014 and December 31, 2013 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, 2014
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
Individually evaluated
for impairment
$
3,243

$
—

$
1,142

$
—

$
—

$
1,114

$
465

$
—

$
5,964

Collectively evaluated
for impairment
6,741

67

830

4,022

4,747

490

901

778

18,576

Total ALL
$
9,984

$
67

$
1,972

$
4,022

$
4,747

$
1,604

$
1,366

$
778

$
24,540

Loans receivable:
 
 
 
 
 
 
 
 
 
Loans evaluated
  individually
$
13,336

$
—

$
6,987

$
3,876

$
10,523

$
6,843

$
2,977

$
—

$
44,542

Loans evaluated
  collectively
465,269

75,986

305,045

118,438

583,481

100,864

219,995

—

1,869,078

Total loans receivable
$
478,605

$
75,986

$
312,032

$
122,314

$
594,004

$
107,707

$
222,972

$
—

$
1,913,620


(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, 2013
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
Individually evaluated
for impairment
$
1,559

$
—

$
1,366

$
1,660

$
—

$
524

$
476

$
—

$
5,585

Collectively evaluated
for impairment
6,619

72

814

3,899

4,161

436

827

697

17,525

Total ALL
$
8,178

$
72

$
2,180

$
5,559

$
4,161

$
960

$
1,303

$
697

$
23,110

Loans receivable:
 
 
 
 
 
 
 
 
 
Loans evaluated
  individually
$
13,055

$
—

$
5,822

$
11,669

$
10,953

$
7,979

$
3,121

$
—

$
52,599

Loans evaluated
  collectively
434,089

81,734

296,595

121,507

462,235

89,787

212,326

—

1,698,273

Total loans receivable
$
447,144

$
81,734

$
302,417

$
133,176

$
473,188

$
97,766

$
215,447

$
—

$
1,750,872
Schedule of Impaired Loan Receivables
The following table presents information regarding the Company's impaired loans as of September 30, 2014 and December 31, 2013. The recorded investment represents the contractual obligation less any charged off principal.
 
September 30, 2014
December 31, 2013
(in thousands)
Recorded Investment
Unpaid Principal Balance
Related Allowance
Recorded Investment
Unpaid Principal Balance
Related Allowance
Loans with no related allowance:
 
 
 
 
 
 
   Commercial and industrial
$
8,367

$
9,136

$
—

$
9,838

$
12,587

$
—

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
5,845

6,208

—

4,456

4,664

—

   Commercial construction and land
     development
3,876

3,876

—

8,514

9,047

—

   Commercial real estate
10,523

10,644

—

10,953

12,795

—

   Residential
3,774

4,014

—

4,901

5,366

—

   Consumer
2,512

2,723

—

2,645

2,868

—

Total impaired loans with no related
  allowance
34,897

36,601

—

41,307

47,327

—

Loans with an allowance recorded:
 
 
 
 
 
 
   Commercial and industrial
4,969

4,969

3,243

3,217

3,217

1,559

   Owner occupied real estate
1,142

1,142

1,142

1,366

1,366

1,366

   Commercial construction and land
     development
—

—

—

3,155

3,155

1,660

   Residential
3,069

3,069

1,114

3,078

3,078

524

   Consumer
465

465

465

476

476

476

Total impaired loans with an
  allowance recorded
9,645

9,645

5,964

11,292

11,292

5,585

Total impaired loans:
 
 
 
 
 
 
   Commercial and industrial
13,336

14,105

3,243

13,055

15,804

1,559

   Commercial tax-exempt
—

—

—

—

—

—

   Owner occupied real estate
6,987

7,350

1,142

5,822

6,030

1,366

   Commercial construction and land
     development
3,876

3,876

—

11,669

12,202

1,660

   Commercial real estate
10,523

10,644

—

10,953

12,795

—

   Residential
6,843

7,083

1,114

7,979

8,444

524

   Consumer
2,977

3,188

465

3,121

3,344

476

Total impaired loans
$
44,542

$
46,246

$
5,964

$
52,599

$
58,619

$
5,585

The following table presents additional information regarding the Company's impaired loans for the three and nine months ended September 30, 2014 and 2013:
 
Three Months Ended
Nine Months Ended
 
September 30, 2014
September 30, 2013
September 30, 2014
September 30, 2013
(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
$
8,964

$
129

$
9,501

$
47

$
8,310

$
205

$
9,320

$
121

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
4,858

—

3,808

—

4,514

10

2,841

—

   Commercial construction and
     land development
3,357

8

6,366

43

5,243

39

7,399

133

   Commercial real estate
9,137

40

10,229

96

9,981

128

11,550

351

   Residential
4,074

8

5,355

13

4,261

35

4,942

49

   Consumer
2,535

6

3,190

8

2,655

23

3,186

22

Total impaired loans with no
  related allowance
32,925

191

38,449

207

34,964

440

39,238

676

Loans with an allowance recorded:
 
 
 
 
 
 
 
   Commercial and industrial
1,990

—

4,587

—

2,526

—

5,030

—

   Owner occupied real estate
1,909

—

1,399

—

1,973

—

1,418

—

   Commercial construction and
     land development
3,142

—

8,848

—

4,256

—

8,168

—

   Commercial real estate
—

—

5,129

—

—

—

4,486

—

   Residential
3,069

—

3,091

—

3,072

—

1,381

—

   Consumer
465

—

478

—

469

—

214

—

Total impaired loans with an
  allowance recorded
10,575

—

23,532

—

12,296

—

20,697

—

Total impaired loans:
 
 
 
 
 
 
 
 
   Commercial and industrial
10,954

129

14,088

47

10,836

205

14,350

121

   Commercial tax-exempt
—

—

—

—

—

—

—

—

   Owner occupied real estate
6,767

—

5,207

—

6,487

10

4,259

—

   Commercial construction and
     land development
6,499

8

15,214

43

9,499

39

15,567

133

   Commercial real estate
9,137

40

15,358

96

9,981

128

16,036

351

   Residential
7,143

8

8,446

13

7,333

35

6,323

49

   Consumer
3,000

6

3,668

8

3,124

23

3,400

22

Total impaired loans
$
43,500

$
191

$
61,981

$
207

$
47,260

$
440

$
59,935

$
676
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, 2014 and December 31, 2013. There were no loans classified as doubtful for the periods ended September 30, 2014 or December 31, 2013.
 
September 30, 2014
(in thousands)
Pass
Special Mention
Substandard Accrual
Substandard Nonaccrual
Total
Commercial credit exposure:






   Commercial and industrial
$
436,885

$
14,475

$
19,271

$
7,974

$
478,605

   Commercial tax-exempt
75,986

—

—

—

75,986

   Owner occupied real estate
293,622

2,407

9,049

6,954

312,032

   Commercial construction and land development
117,308

—

1,752

3,254

122,314

   Commercial real estate
584,745

1,061

1,791

6,407

594,004

     Total
$
1,508,546

$
17,943

$
31,863

$
24,589

$
1,582,941


 
December 31, 2013
(in thousands)
Pass
Special Mention
Substandard Accrual
Substandard Nonaccrual
Total
Commercial credit exposure:
 
 
 
 
 
   Commercial and industrial
$
410,530

$
8,064

$
18,333

$
10,217

$
447,144

   Commercial tax-exempt
81,734

—

—

—

81,734

   Owner occupied real estate
285,416

3,624

8,539

4,838

302,417

   Commercial construction and land development
120,687

—

3,902

8,587

133,176

   Commercial real estate
464,408

318

1,757

6,705

473,188

     Total
$
1,362,775

$
12,006

$
32,531

$
30,347

$
1,437,659


 
Consumer loan credit exposures are rated either performing or nonperforming as detailed below at September 30, 2014 and December 31, 2013:
 
September 30, 2014
(in thousands)
Performing
Nonperforming
Total
Consumer credit exposure:
 
 
 
   Residential
$
101,550

$
6,157

$
107,707

   Consumer
220,551

2,421

222,972

     Total
$
322,101

$
8,578

$
330,679


 
December 31, 2013
(in thousands)
Performing
Nonperforming
Total
Consumer credit exposure:
 
 
 
   Residential
$
90,727

$
7,039

$
97,766

   Consumer
212,870

2,577

215,447

     Total
$
303,597

$
9,616

$
313,213
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, 2014 and 2013. 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, 2014
September 30, 2013
September 30, 2014
September 30, 2013
(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:
 
 
 
 
 
 
 
 
 
 
 
 
   Forbearance agreement
—

 
$
—

—

 
$
—

1

 
$
229

—

 
$
—

   Change in amortization period
—

 
—

—

 
—

3

 
261

7

 
1,022

   Combination of concessions
—

 
—

—

 
—

1

 
30

1

 
125

Owner occupied real estate:
 
 
 
 
 
 
 
 
 
 
 
 
   Forbearance agreement
—

 
—

—

 
—

—

 
—

1

 
193

   Accepting interest only for
a period of time
—

 
—

—

 
—

3

 
1,601

—

 
—

   Change in amortization period
—

 
—

—

 
—

1

 
128

—

 
—

Commercial construction and land development:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
1

 
34

1

 
1,749

2

 
276

4

 
2,801

   Forbearance agreement
—

 
—

—

 
—

3

 
2,185

—

 
—

   Change in amortization period
—

 
—

—

 
—

1

 
214

—

 
—

   Combination of concessions
1

 
3,546

—

 
—

1

 
3,546

—

 
—

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
   Change in amortization period
—

 
—

—

 
—

14

 
1,893

—

 
—

   Combination of concessions
1

 
3,275

—

 
—

1

 
3,275

3

 
2,945

Residential:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

1

 
134

—

 
—

2

 
394

   Forbearance agreement
—

 
—

1

 
3,096

—

 
—

1

 
3,096

   Interest rate adjustment
—

 
—

—

 
—

1

 
143

—

 
—

   Change in amortization period
—

 
—

1

 
346

—

 
—

1

 
346

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
   Material extension of time
—

 
—

—

 
—

—

 
—

1

 
35

   Forbearance agreement
—

 
—

1

 
480

—

 
—

1

 
480

Total
3

 
$
6,855

5

 
$
5,805

32

 
$
13,781

22

 
$
11,437
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, 2014 and 2013, respectively, and that subsequently defaulted during the three and nine month periods ended September 30, 2014 and 2013, 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, 2014
September 30, 2013
September 30, 2014
September 30, 2013
(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

7

 
$
1,288

10

 
$
5,051

   Owner occupied real estate
—

 
—

—

 
—

4

 
1,792

2

 
1,580

   Commercial construction
     and land development
2

 
448

—

 
—

4

 
2,376

2

 
2,426

   Commercial real estate
—

 
—

—

 
—

—

 
—

3

 
2,943

   Residential
1

 
341

1

 
3,089

4

 
3,811

2

 
3,348

   Consumer
—

 
—

1

 
477

1

 
476

2

 
575

Total
3

 
$
789

3

 
$
3,745

20

 
$
9,743

21

 
$
15,923