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Allowance For Loan Losses And Credit Quality
9 Months Ended
Sep. 30, 2011
Allowance For Loan Losses And Credit Quality [Abstract] 
Allowance For Loan Losses And Credit Quality

NOTE 6 – ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

The allowance for loan losses represents the Company's estimate as to the probable credit losses inherent in its loan portfolio. The allowance for loan losses is increased through periodic charges to provision for loan losses and represents the aggregate amount, net of loans charged-off and recoveries on previously charged-off loans, that is needed to establish an appropriate reserve for credit losses. The allowance is estimated based on a variety of factors and uses a methodology as described below:

 

The Company classifies loans into relatively homogeneous pools by loan type in accordance with regulatory guidelines for regulatory reporting purposes. The Company regularly reviews all loans within each loan category to establish risk ratings for them that include Pass, Watch, Special Mention, Substandard, Doubtful and Loss. Pursuant to "Accounting for Creditors for Impairment of a Loan," the impaired portion of collateral dependent loans is charged-off. Other loans not considered impaired have loss factors applied to the various loan pool balances to establish loss potential for provisioning purposes.

Analyses are performed to establish the loss factors based on a three-year historical experience, more heavily weighted to the most recent loss experience, as well as expected losses based on qualitative evaluations of such factors as the economic trends and conditions, industry conditions, levels and trends in delinquencies and impaired loans, levels and trends in charge-offs and recoveries, among others. The loss factors are applied to loan category pools segregated by risk classification through the current period to estimate the loss inherent in the Company's loan portfolio pursuant to "Accounting for Contingencies."

Additionally, impaired loans are evaluated for loss potential on an individual basis in accordance with "Accounting for Creditors for Impairment of a Loan," and specific reserves are established based on thorough analysis of collateral values where loss potential exists. When an impaired loan is collateral dependent and a deficiency exists in the fair value of real estate collateralizing the loan in comparison to the associated loan balance, the deficiency is charged-off at that time. Impaired loans are reviewed no less frequently than quarterly.

In the event that a current appraisal to support the fair value of the real estate collateral underlying an impaired loan has not yet been received, but the Company believes that the collateral value is insufficient to support the loan amount, an impairment reserve is recorded. In these instances, the receipt of a current appraisal triggers an updated review of the collateral support for the loan and any deficiency is charged-off or reserved at that time. In those instances where a current appraisal is not available in a timely manner in relation to a financial reporting cut-off date, the Company's internal appraisal review department prepares or reviews a collateral valuation based on a number of factors including, but not limited to, property location, local price volatility, local economic conditions, and recent comparable sales. In all cases, the costs to sell the subject property are deducted in arriving at the fair value of the collateral. Any unpaid property taxes or similar expenses are expensed at the time the property is acquired by the Bank.

 

Transactions in the allowance for loan losses for the three months and nine months ended September 30, 2011 were as follows:

Allowance for Credit Losses and Recorded Investment in Financing Receivables

 

(Dollars in 000's)                                                      
    Construction,
Land Dev		     Comm &
Industrial		     Comm Real
Estate		     Comm Real
Estate Multi		     Comm Real
Estate - Other		     Loans to
Individuals		     Consumer
Finance		     Other Loans,
Concessions,
and Overdrafts		     Total  

For the three months ended September 30, 2011

                  

Allowance for credit losses:

                  

Beginning balance

   $ 3,577      $ 7,037      $ 11,008      $ 202      $ 2,484      $ 178      $ 3,065      $ 882      $ 28,433   

Charge-offs and concessions

     (3,202 )      (37 )      (1,872 )      —          (404 )      (537 )      (487 )      (368 )      (6,907 ) 

Recoveries

     13        142        131        —          7        —          94        12        399   

Provision

     2,850        (2,790 )      4,628        (28 )      149        851        (502 )      (108 )      5,050   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 3,238      $ 4,352      $ 13,895      $ 174      $ 2,236      $ 492      $ 2,170      $ 418      $ 26,975   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

For the nine months ended September 30, 2011

                  

Allowance for credit losses:

                  

Beginning balance

   $ 4,703      $ 8,051      $ 14,419      $ 126      $ 4,623      $ 973      $ 2,376      $ 311      $ 35,582   

Charge-offs and concessions

     (8,757 )      (2,027 )      (10,538 )      (56 )      (2,652 )      (540 )      (1,095 )      (409 )      (26,074 ) 

Recoveries

     67        4,691        851        —          90        1        381        36        6,117   

Provision

     7,225        (6,363 )      9,163        104        175        58        508        480        11,350   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 3,238      $ 4,352      $ 13,895      $ 174      $ 2,236      $ 492      $ 2,170      $ 418      $ 26,975   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: individually evaluated for impairment

   $ —        $ 88      $ 4,908      $ —        $ —        $ 347      $ —        $ —        $ 5,343   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: collectively evaluated for impairment

   $ 3,238      $ 4,264      $ 8,987      $ 174      $ 2,236      $ 145      $ 2,170      $ 418      $ 21,632   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans:

                  

Ending balance

   $ 46,730      $ 98,017      $ 559,251      $ 21,886      $ 49,522      $ 11,271      $ 35,222      $ 31,658      $ 853,557   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: individually evaluated for impairment

   $ 13,670      $ 1,580      $ 55,629      $ 144      $ 3,634      $ 966      $ 86      $ 2,501      $ 78,210   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: collectively evaluated for impairment

   $ 33,060      $ 96,437      $ 503,622      $ 21,742      $ 45,888      $ 10,305      $ 35,136      $ 29,157      $ 775,347   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

Transactions in the allowance for loan losses for the three months and nine months ended September 30, 2010 were as follows:

Allowance for Credit Losses and Recorded Investment in Financing Receivables

 

(Dollars in 000's)                                                      
    Construction,
Land Dev		     Comm &
Industrial		     Comm Real
Estate		     Comm Real
Estate Multi		     Comm Real
Estate - Other		     Loans to
Individuals		     Consumer
Finance		     Other Loans,
Concessions,
and Overdrafts		     Total  

For the three months ended September 30, 2010

                  

Allowance for credit losses:

                  

Beginning balance

   $ 10,880      $ 9,783      $ 17,598      $ 914      $ 3,107      $ 224      $ 1,036      $ 375      $ 43,917   

Charge-offs

     (1,556 )      (493 )      (964 )      —          (222 )      (18 )      (459 )      (31 )      (3,743 ) 

Recoveries

     193        32        25        —          (190 )      1        219        66        346   

Provision

     477        704        (970 )      (607 )      527        (41 )      1,161        349        1,600   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 9,994      $ 10,026      $ 15,689      $ 307      $ 3,222      $ 166      $ 1,957      $ 759      $ 42,120   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

For the nine months ended September 30, 2010

                  

Allowance for credit losses:

                  

Beginning balance

   $ 15,033      $ 6,409      $ 20,923      $ 506      $ 531      $ 231      $ 1,150      $ 1,120      $ 45,903   

Charge-offs

     (7,123 )      (1,799 )      (6,540 )      —          (1,146 )      (102 )      (1,349 )      (651 )      (18,710 ) 

Recoveries

     1,899        985        1,107        —          (95 )      5        720        256        4,877   

Provision

     185        4,431        199        (199 )      3,932        32        1,436        34        10,050   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 9,994      $ 10,026      $ 15,689      $ 307      $ 3,222      $ 166      $ 1,957      $ 759      $ 42,120   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: individually evaluated for impairment

   $ 7,552      $ 981      $ 10,230      $ —        $ 1,343      $ 29      $ —        $ —        $ 20,135   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: collectively evaluated for impairment

   $ 2,442      $ 9,045      $ 5,459      $ 307      $ 1,879      $ 137      $ 1,957      $ 759      $ 21,985   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans:

                  

Ending balance

   $ 75,272      $ 128,624      $ 653,865      $ 24,756      $ 61,933      $ 12,550      $ 37,269      $ 41,810      $ 1,036,079   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: individually evaluated for impairment

   $ 27,166      $ 3,408      $ 77,784      $ 313      $ 5,766      $ 29      $ 113      $ 434      $ 115,013   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance: collectively evaluated for impairment

   $ 48,106      $ 125,216      $ 576,081      $ 24,443      $ 56,167      $ 12,521      $ 37,156      $ 41,376      $ 921,066   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

The following tables summarize the Company's loans past due, both accruing and nonaccruing, by type as of September 30, 2011 and December 31, 2010:

 

(Dollars in 000's)                                                 
     30-59 Days
Past Due		      60-89 Days
Past Due		      Greater
Than
90 Days		      Total Past
Due		      Current      Total
Loans		      Recorded
Investment >
90 Days Past Due
and Accruing		  

September 30, 2011

                     

Construction, Land Dev & Other Land

    $ 1,359       $ 1,102       $ 10,385       $ 12,846       $ 33,884       $ 46,730       $ —     

Commercial & Industrial

      —           —           645         645         97,372         98,017         —     

Commercial Real Estate Loans

      416         —           38,448         38,864         520,387         559,251         —     

Secured Multifamily Residential

      —           —           144         144         21,742         21,886         —     

Other Commercial Loans Secured by RE

      —           —           905         905         48,617         49,522         15   

Loans to Individuals, Family & Personal Expense

      63         668         281         1,012         10,259         11,271         —     

Consumer/Finance

      828         88         86         1,002         34,220         35,222         86   

Other Loans and Overdrafts

      —           —           2,501         2,501         29,157         31,658         —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 2,666       $ 1,858       $ 53,395       $ 57,919       $ 795,638       $ 853,557       $ 101   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

December 31, 2010

                     

Construction, Land Dev & Other Land

    $ 133       $ —         $ 7,447       $ 7,580       $ 55,086       $ 62,666       $ —     

Commercial & Industrial

      222         5         1,298         1,525         117,552         119,077         —     

Commercial Real Estate Loans

      8,011         2,007         36,396         46,414         579,973         626,387         —     

Secured Multifamily Residential

      —           —           307         307         23,920         24,227         —     

Other Commercial Loans Secured by RE

      97         224         2,709         3,030         56,254         59,284         —     

Loans to Individuals, Family & Personal Expense

      10         —           —           10         12,462         12,472         —     

Consumer/Finance

      603         188         123         914         35,945         36,859         123   

Other Loans and Overdrafts

      2,104         —           434         2,538         35,036         37,574         —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 11,180       $ 2,424       $ 48,714       $ 62,318       $ 916,228       $ 978,546       $ 123   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

Impaired loans by type as of September 30, 2011 and interest income recognized for the nine months ended September 30, 2011, were as follows:

 

(Dollars in 000's)                                   
     Unpaid
Principal
Balance		      Recorded
Investment		      Related
Allowance		      Average
Recorded
Investment		      Interest
Income
Recognized		  

September 30, 2011

               

With no Related Allowance

               

Construction, Land Dev & Other Land

    $ 29,954       $ 13,670       $ —         $ 20,711       $ —     

Commercial & Industrial

      764         645         —           1,191         —     

Commercial Real Estate Loans

      54,460         40,113         —           57,905         —     

Secured Multifamily Residential

      200         144         —           131         —     

Other Commercial Loans Secured by RE

      4,778         3,634         —           3,567         —     

Loans to Individuals, Family & Personal Expense

      818         299         —           39         —     

Consumer/Finance

      15         86         —           128         10   

Other Loans

      2,827         2,501         —           2,507         —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 93,816       $ 61,092       $ —         $ 86,179       $ 10   

With a Related Allowance

               

Construction, Land Dev & Other Land

    $ —         $ —         $ —         $ 1,942       $ —     

Commercial & Industrial

      934         935         88         792         —     

Commercial Real Estate Loans

      20,882         15,516         4,908         10,299         —     

Secured Multifamily Residential

      —           —           —           —           —     

Other Commercial Loans Secured by RE

      —           —           —           2,660         —     

Loans to Individuals, Family & Personal Expense

      668         667         347         86         —     

Consumer/Finance

      —           —           —           —           —     

Other Loans

      —           —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 22,484       $ 17,118       $ 5,343       $ 15,779       $ —     

Total Impaired Loans:

               

Construction, Land Dev & Other Land

    $ 29,954       $ 13,670       $ —         $ 22,653       $ —     

Commercial & Industrial

      1,698         1,580         88         1,983         —     

Commercial Real Estate Loans

      75,342         55,629         4,908         68,204         —     

Secured Multifamily Residential

      200         144         —           131         —     

Other Commercial Loans Secured by RE

      4,778         3,634         —           6,227         —     

Loans to Individuals, Family & Personal Expense

      1,486         966         347         125         —     

Consumer/Finance

      15         86         —           128         10   

Other Loans

      2,827         2,501         —           2,507         —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Impaired Loans

    $ 116,300       $ 78,210       $ 5,343       $ 101,958       $ 10   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Included in the table above are $86,000 of Consumer loans and $15,000 of Other Commercial Loans Secured by RE that are 90 days past due and still accruing interest. These loans are charged-off according to policy after 120 days. The remaining loans are on non-accrual status at September 30, 2011.

 

Impaired loans by type as of December 31, 2010 and interest income recognized for the twelve months ended December 31, 2010, were as follows:

 

(Dollars in 000's)                                   
     Unpaid
Principal
Balance		      Recorded
Investment		      Related
Allowance		      Average
Recorded
Investment		      Interest
Income
Recognized		  

December 31, 2010

               

With no Related Allowance

               

Construction, Land Dev & Other Land

    $ 39,517       $ 26,007       $ —         $ 25,675       $ —     

Commercial & Industrial

      2,598         1,682         —           2,654         —     

Commercial Real Estate Loans

      76,316         66,917         —           57,839         —     

Secured Multifamily Residential

      307         307         —           183         —     

Other Commercial Loans Secured by RE

      4,553         3,913         —           4,897         —     

Loans to Individuals, Family & Personal Expense

      26         26         —           5         —     

Consumer/Finance

      123         123         —           10         16   

Other Loans

      2,864         2,538         —           737         —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 126,304       $ 101,513       $ —         $ 92,000       $ 16   

With a Related Allowance

               

Construction, Land Dev & Other Land

    $ 8,151       $ 6,577       $ 2,365       $ 11,324       $ —     

Commercial & Industrial

      1,027         1,027         295         782         —     

Commercial Real Estate Loans

      19,321         13,687         3,554         8,800         —     

Secured Multifamily Residential

      —           —           —           —           —     

Other Commercial Loans Secured by RE

      6,812         6,812         3,440         2,017         —     

Loans to Individuals, Family & Personal Expense

      —           —           5         9         —     

Consumer/Finance

      —           —           —           —           —     

Other Loans

      —           —           —           207         —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 35,311       $ 28,103       $ 9,659       $ 23,139       $ —     

Total Impaired Loans:

               

Construction, Land Dev & Other Land

    $ 47,668       $ 32,584       $ 2,365       $ 36,999       $ —     

Commercial & Industrial

      3,625         2,709         295         3,436         —     

Commercial Real Estate Loans

      95,637         80,604         3,554         66,639         —     

Secured Multifamily Residential

      307         307         —           183         —     

Other Commercial Loans Secured by RE

      11,365         10,725         3,440         6,914         —     

Loans to Individuals, Family & Personal Expense

      26         26         5         14         —     

Consumer/Finance

      123         123         —           10         16   

Other Loans

      2,864         2,538         —           944         —     
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Impaired Loans

    $ 161,615       $ 129,616       $ 9,659       $ 115,139       $ 16   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Included in the table above are $123,000 of consumer loans that are 90 days past due and still accruing interest. These loans are charged-off according to policy after 120 days. The remaining loans were on non-accrual status at December 31, 2010.

The Company's appraisal update procedures for classified loans and OREO property units result in a significant number of appraisals completed as frequently as every six months with the remaining appraisals updated no less frequently than every twelve months.

 

Loans by type, including a breakdown of classified loans, as of September 30, 2011, and December 31, 2010, were as follows:

(Dollars in 000's)

Credit quality indicators as of September 30, 2011 and December 31, 2010 were as follows:

 

September 30, 2011    Construction,
Land Dev		      Comm &
Industrial		      Comm Real
Estate		      Comm Real
Estate Multi		      Comm Real
Estate - Other		      Loans to
Individuals		      Other Loans
and Overdraft		      Total  

Pass

    $ 16,393       $ 50,195       $ 316,595       $ 7,927       $ 37,520       $ 10,216       $ 24,687       $ 463,533   

Watch

      3,748         5,230         23,500         340         245         —           727         33,790   

Special Mention

      2,181         4,832         105,413         12,818         1,876         —           1,545         128,665   

Substandard

      24,408         36,826         107,821         801         9,881         388         4,699         184,824   

Doubtful

      —           934         5,922         —           —           667         —           7,523   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 46,730       $ 98,017       $ 559,251       $ 21,886       $ 49,522       $ 11,271       $ 31,658         818,335   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

Total Consumer Credit

                           35,222   
                       

 

 

  

Total loans

                         $ 853,557   
                       

 

 

  

Consumer Credit Exposure

Credit Risk Profile Based on Payment Activity

 

     Consumer  

Performing

    $ 35,136   

Nonperforming

      86   
  

 

 

  

Total

    $ 35,222   
  

 

 

  

 

December 31, 2010    Construction,
Land Dev		      Comm &
Industrial		      Comm Real
Estate		      Comm Real
Estate Multi		      Comm Real
Estate - Other		      Loans to
Individuals		      Other Loans
and Overdraft		      Total  

Pass

    $ 17,261       $ 58,567       $ 314,878       $ 9,215       $ 40,293       $ 11,620       $ 24,792       $ 476,626   

Watch

      —           5,676         31,395         —           2,098         —           3,824         42,993   

Special Mention

      6,435         12,337         118,287         13,540         2,309         —           3,841         156,749   

Substandard

      35,893         41,404         147,513         1,472         7,772         826         5,117         239,997   

Doubtful

      3,077         1,093         14,314         —           6,812         26         —           25,322   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 62,666       $ 119,077       $ 626,387       $ 24,227       $ 59,284       $ 12,472       $ 37,574         941,687   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

Total Consumer Credit

                           36,859   
                       

 

 

  

Total loans

                         $ 978,546   
                       

 

 

  

Consumer Credit Exposure

Credit Risk Profile Based on Payment Activity

 

     Consumer  

Performing

    $ 36,736   

Nonperforming

      123   
  

 

 

  

Total

    $ 36,859   
  

 

 

  

The Company assigns risk ratings to loans based on internal review. These risk ratings are grouped and defined as follows:

Pass – The borrower is considered creditworthy and has the ability to repay the debt in the normal course of business.

Watch – This rating indicates that according to current information, the borrower has the capacity to perform according to terms; however, elements of uncertainty (an uncharacteristic negative financial or other risk factor event) exist. Margins of debt service coverage are or have narrowed, and historical patterns of financial performance may be erratic although the overall trends are positive. If secured, collateral value and adequate sources of repayment currently protect the loan. Material adverse trends have not developed at this time. Loans in this category can be to new and/or thinly capitalized companies with limited proven performance history.

Special Mention – A Special Mention asset has potential weaknesses that deserve Management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. This rating is not a transitional grade by definition; however, an appropriate action plan is required to ensure timely risk rating change as circumstances warrant.

 

Substandard – The loan is inadequately protected by the current worth and/or paying capacity of the obligor or of the collateral pledged, if any. There are well-defined weaknesses that jeopardize the repayment of the debt. Although loss may not be imminent, if the weaknesses are not corrected, there is a good possibility that the Bank will sustain a loss. Loss potential, while existing in the aggregate amount of Substandard assets, does not have to exist in individual assets classified Substandard.

Doubtful – The loan has the weaknesses of those in the classification of Substandard, one or more of which make collection or liquidation in full, on the basis of currently ascertainable facts, conditions and values, highly questionable or improbable. The possibility of loss is extremely high, but certain identifiable contingencies that are reasonably likely to materialize may work to the advantage and strengthening of the loan, such that it is reasonable to defer its classification as a Loss until its more exact status may be determined. Contingencies that may call for deferral of Loss classification include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. Loans in this classification are carried on nonaccrual and are considered impaired. Credits rated Doubtful are to be reviewed frequently to determine if event(s) that might require a change in rating upward or downward have taken place.

Troubled Debt Restructurings ("TDR") - The Company adopted the amendments in Accounting Standards Update No. 2011-02 during the current period ended September 30, 2011. As required, the Company reassessed all restructurings that occurred on or after the beginning of the current fiscal year for identification as TDR's. The Company did not identify as TDR's any receivables for which the allowance for credit losses had previously been measured under a general allowance for credit losses methodology (ASC 450-20).

Modification Categories

The Company offers a variety of modifications to borrowers. The modification categories offered can generally be described in the following categories:

Rate Modification – A modification in which the interest rate is changed.

Term Modification – A modification in which the maturity date, timing of payments, or frequency of payments is changed.

Interest Only Modification – A modification in which the loan is converted to interest only payments for a period of time.

Payment Modification – A modification in which the dollar amount of the payment is changed, other than an interest only modification described above.

Combination Modification – Any other type of modification, including the use of multiple categories above.

As of September 30, 2011, no available commitments were outstanding on troubled debt restructurings.

The same factors and methodology used to establish an appropriate reserve for the loan portfolio are applied to TDR's on accrual status using the risk ratings assigned to them. All TDR's on nonaccrual status are collateral dependent loans and are carried at fair value based on current appraisals.

 

The following tables summarize the Company's troubled debt restructured loans by type and geographic region as of September 30, 2011:

 

(Dollars in 000's)                                          
     September 30, 2011  
     Restructured loans  
     Southern
Oregon		      Mid Oregon      Northern
California		      Sacramento
Valley		      Totals      Number of
Loans		  

Construction, Land Dev & Other Land

    $ —         $ —         $ —         $ 7,137       $ 7,137         9   

Commercial & Industrial

      331         —           934         222         1,487         3   

Commercial Real Estate Loans

      32,733         3,728         2,615         97         39,173         14   

Other Commercial Loans Secured by RE

      212         —           217         2,083         2,512         5   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total restructured loans

    $ 33,276       $ 3,728       $ 3,766       $ 9,539       $ 50,309         31   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Maturities

(Dollars in 000's)

 

Year

    Amount  

2011

    $ 23,630   

2012

      19,830   

2013

      3,121   

2014

      —     

2015

      —     

Thereafter

      3,728   
  

 

 

  

Total

    $ 50,309   
  

 

 

  

The following table presents troubled debt restructurings by accrual or nonaccrual status as of September 30, 2011 and 2010:

Restructured loans by accrual or nonaccrual status

(Dollars in 000's)

 

     September 30, 2011  
     Restructured loans  
     Accrual Status      Non-accrual
Status		      Total
Modifications		  

Construction, Land Dev & Other Land

    $ 1,605       $ 5,532       $ 7,137   

Commercial & Industrial

      553         934         1,487   

Commercial Real Estate Loans

      250         38,923         39,173   

Other Commercial Loans Secured by RE

      212         2,300         2,512   
  

 

 

     

 

 

     

 

 

  

Total restructured loans

    $ 2,620       $ 47,689       $ 50,309   
  

 

 

     

 

 

     

 

 

  
     September 30, 2010  
     Restructured loans  
     Accrual Status      Non-accrual
Status		      Total
Modifications		  

Construction, Land Dev & Other Land

    $ —         $ 6,073       $ 6,073   

Commercial & Industrial

      225         —           225   

Commercial Real Estate Loans

      —           27,722         27,722   

Other Commercial Loans Secured by RE

      —           325         325   
  

 

 

     

 

 

     

 

 

  

Total restructured loans

    $ 225       $ 34,120       $ 34,345   
  

 

 

     

 

 

     

 

 

  

As of September 30, 2011, borrowers with loans designated as TDR's and totaling $2.6 million met the criteria for placement back on accrual status. This criteria is a minimum of six months of continuous satisfactory (less than 30 days past-due) payment performance under existing or modified terms, and this payment performance is expected to continue as documented by analysis based on current financial statements and/or tax returns.

 

The following tables present newly restructured loans by type of modification that occurred during the three and nine months ended September 30, 2011 and 2010, respectively:

Newly restructured loans by modification type

(Dollars in 000's)

 

     Restructured loans  
     Three Months Ended September 30, 2011  
     Interest Only      Term      Combination      Total
Modifications		  

Construction, Land Dev & Other Land

    $ —         $ —         $ —         $ —     

Commercial & Industrial

      —           1,265         —           1,265   

Commercial Real Estate Loans

      —           2,137         3,728         5,865   

Other Commercial Loans Secured by RE

      —           212         —           212   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total restructured loans

    $ —         $ 3,614       $ 3,728       $ 7,342   
  

 

 

     

 

 

     

 

 

     

 

 

  
     Three Months Ended September 30, 2010  
     Interest Only      Term      Combination      Total
Modifications		  

Construction, Land Dev & Other Land

    $ —         $ —         $ 1,605       $ 1,605   

Commercial & Industrial

      —           —           —           —     

Commercial Real Estate Loans

      —           —           20,769         20,769   

Other Commercial Loans Secured by RE

      —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Total restructured loans

    $ —         $ —         $ 22,374       $ 22,374   
  

 

 

     

 

 

     

 

 

     

 

 

  
     Restructured loans  
     Nine Months Ended September 30, 2011  
     Interest Only      Term      Combination      Total
Modifications		  

Construction, Land Dev & Other Land

    $ —         $ —         $ 82       $ 82   

Commercial & Industrial

      —           1,265         —           1,265   

Commercial Real Estate Loans

      —           2,431         9,080         11,511   

Other Commercial Loans Secured by RE

      —           212         —           212   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total restructured loans

    $ —         $ 3,908       $ 9,162       $ 13,070   
  

 

 

     

 

 

     

 

 

     

 

 

  
     Nine Months Ended September 30, 2010  
     Interest Only      Term      Combination      Total
Modifications		  

Construction, Land Dev & Other Land

    $ —         $ —         $ 1,605       $ 1,605   

Commercial & Industrial

      —           —           —           —     

Commercial Real Estate Loans

      4,032         —           20,770         24,802   

Other Commercial Loans Secured by RE

      —           —           —           —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Total restructured loans

    $ 4,032       $ —         $ 22,375       $ 26,407   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

The following table represents financing receivables modified within the last 12 months as TDR's and had a payment default during the three and nine month periods ended September 30, 2011 and 2010, respectively:

Restructured loans with a payment default occurring within 12 months of the restructure date

(Dollars in 000's)

 

     Three Months Ended  
     September 30, 2011      September 30, 2010  

Construction, Land Dev & Other Land

    $ —         $ —     

Commercial & Industrial

      —           —     

Commercial Real Estate Loans

      —           —     

Other Commercial Loans Secured by RE

      —           —     
  

 

 

     

 

 

  

Total restructured loans

    $ —         $ —     
  

 

 

     

 

 

  
     Nine Months Ended  
     September 30, 2011      September 30, 2010  

Construction, Land Dev & Other Land

    $ 1,956       $ —     

Commercial & Industrial

      —           —     

Commercial Real Estate Loans

      20,769         —     

Other Commercial Loans Secured by RE

      1,196         —     
  

 

 

     

 

 

  

Total restructured loans

    $ 23,921       $ —