Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2014

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

(5) Loans and Allowance for Loan Losses

The following tables present the recorded investment in loans by loan class:

	September 30, 2014
(dollars in thousands)	New York and
	other states*		Florida		Total
Commercial:
Commercial real estate	$	172,457		19,712		192,169
Other		27,595		61		27,656
Real estate mortgage - 1 to 4 family:
First mortgages		2,002,935		450,495		2,453,430
Home equity loans		51,430		5,291		56,721
Home equity lines of credit		306,138		40,358		346,496
Installment		5,934		623		6,557
Total loans, net	$	2,566,489		516,540		3,083,029
Less: Allowance for loan losses						46,512
Net loans					$	3,036,517

	December 31, 2013
(dollars in thousands)	New York and
	other states*		Florida		Total
Commercial:
Commercial real estate	$	169,722		21,404		191,126
Other		32,323		32		32,355
Real estate mortgage - 1 to 4 family:
First mortgages		1,909,447		378,361		2,287,808
Home equity loans		47,494		3,642		51,136
Home equity lines of credit		304,044		36,445		340,489
Installment		5,292		603		5,895
Total loans, net	$	2,468,322		440,487		2,908,809
Less: Allowance for loan losses						47,714
Net loans					$	2,861,095

* Includes New York, New Jersey, Vermont and Massachusetts

At September 30, 2014 and December 31, 2013, the Company had approximately $35.8 million and $35.4 million of real estate construction loans, respectively.  Of the $35.8 million in real estate construction loans at September 30, 2014, approximately $14.3 million are secured by first mortgages to residential borrowers while approximately $21.5 million were to commercial borrowers for residential construction projects. Of the $35.4 million in real estate construction loans at December 31, 2013, approximately $13.9 million are secured by first mortgages to residential borrowers while approximately $21.5 million were to commercial borrowers for residential construction projects. The vast majority of construction loans are in the Company’s New York market.

TrustCo lends in the geographic territory of its branch locations in New York, Florida, Massachusetts, New Jersey and Vermont. Although the loan portfolio is diversified, a portion of its debtors’ ability to repay depends significantly on the economic conditions prevailing in the respective geographic territory.

The following tables present the recorded investment in non-accrual loans by loan class:

	September 30, 2014
(dollars in thousands)	New York and
	other states		Florida		Total
Loans in non-accrual status:
Commercial:
Commercial real estate	$	4,226		517		4,743
Other		-		-		-
Real estate mortgage - 1 to 4 family:
First mortgages		25,113		2,251		27,364
Home equity loans		520		-		520
Home equity lines of credit		4,103		144		4,247
Installment		95		1		96
Total non-accrual loans		34,057		2,913		36,970
Restructured real estate mortgages - 1 to 4 family		155		-		155
Total nonperforming loans	$	34,212		2,913		37,125

	December 31, 2013
(dollars in thousands)	New York and
	other states		Florida		Total
Loans in non-accrual status:
Commercial:
Commercial real estate	$	6,620		-		6,620
Other		332		-		332
Real estate mortgage - 1 to 4 family:
First mortgages		26,713		4,781		31,494
Home equity loans		691		-		691
Home equity lines of credit		3,641		356		3,997
Installment		93		-		93
Total non-accrual loans		38,090		5,137		43,227
Restructured real estate mortgages - 1 to 4 family		166		-		166
Total nonperforming loans	$	38,256		5,137		43,393

As of September 30, 2014 and December 31, 2013, the Company’s loan portfolio did not include any subprime mortgages or loans acquired with deteriorated credit quality.

The following tables present the aging of the recorded investment in past due loans by loan class and by region as of September 30, 2014 and December 31, 2013:

New York and other states:

	September 30, 2014
(dollars in thousands)		30-59		60-89		90	+	Total
	Days		Days		Days			30+ days				Total
	Past Due		Past Due		Past Due			Past Due		Current		Loans
Commercial:
Commercial real estate	$	698		53		3,015			3,766		168,691		172,457
Other		-		-		-			-		27,595		27,595
Real estate mortgage - 1 to 4 family:
First mortgages		3,999		1,489		19,076			24,564		1,978,371		2,002,935
Home equity loans		74		-		507			581		50,849		51,430
Home equity lines of credit		161		254		2,146			2,561		303,577		306,138
Installment		20		30		53			103		5,831		5,934
Total	$	4,952		1,826		24,797			31,575		2,534,914		2,566,489

Florida:

(dollars in thousands)		30-59		60-89		90	+	Total
	Days		Days		Days			30+ days				Total
	Past Due		Past Due		Past Due			Past Due		Current		Loans
Commercial:
Commercial real estate	$	-		-		-			-		19,712		19,712
Other		-		-		-			-		61		61
Real estate mortgage - 1 to 4 family:
First mortgages		458		549		1,642			2,649		447,846		450,495
Home equity loans		-		-		-			-		5,291		5,291
Home equity lines of credit		176		-		13			189		40,169		40,358
Installment		13		16		-			29		594		623
Total	$	647		565		1,655			2,867		513,673		516,540

Total:

(dollars in thousands)		30-59		60-89		90	+	Total
	Days		Days		Days			30+ days				Total
	Past Due		Past Due		Past Due			Past Due		Current		Loans
Commercial:
Commercial real estate	$	698		53		3,015			3,766		188,403		192,169
Other		-		-		-			-		27,656		27,656
Real estate mortgage - 1 to 4 family:
First mortgages		4,457		2,038		20,718			27,213		2,426,217		2,453,430
Home equity loans		74		-		507			581		56,140		56,721
Home equity lines of credit		337		254		2,159			2,750		343,746		346,496
Installment		33		46		53			132		6,425		6,557
Total	$	5,599		2,391		26,452			34,442		3,048,587		3,083,029

New York and other states:

	December 31, 2013
(dollars in thousands)		30-59		60-89		90	+	Total
	Days		Days		Days			30+ days				Total
	Past Due		Past Due		Past Due			Past Due		Current		Loans
Commercial:
Commercial real estate	$	583		1,426		3,379			5,388		164,334		169,722
Other		209		-		123			332		31,991		32,323
Real estate mortgage - 1 to 4 family:
First mortgages		4,664		2,042		17,624			24,330		1,885,117		1,909,447
Home equity loans		46		18		552			616		46,878		47,494
Home equity lines of credit		1,014		331		1,897			3,242		300,802		304,044
Installment		85		12		77			174		5,118		5,292
Total	$	6,601		3,829		23,652			34,082		2,434,240		2,468,322

Florida:

(dollars in thousands)		30-59		60-89		90	+	Total
	Days		Days		Days			30+ days				Total
	Past Due		Past Due		Past Due			Past Due		Current		Loans
Commercial:
Commercial real estate	$	-		-		-			-		21,404		21,404
Other		-		-		-			-		32		32
Real estate mortgage - 1 to 4 family:
First mortgages		552		-		4,229			4,781		373,580		378,361
Home equity loans		-		-		-			-		3,642		3,642
Home equity lines of credit		109		-		247			356		36,089		36,445
Installment		-		2		-			2		601		603
Total	$	661		2		4,476			5,139		435,348		440,487

Total:

(dollars in thousands)		30-59		60-89		90	+	Total
	Days		Days		Days			30+ days				Total
	Past Due		Past Due		Past Due			Past Due		Current		Loans
Commercial:
Commercial real estate	$	583		1,426		3,379			5,388		185,738		191,126
Other		209		-		123			332		32,023		32,355
Real estate mortgage - 1 to 4 family:
First mortgages		5,216		2,042		21,853			29,111		2,258,697		2,287,808
Home equity loans		46		18		552			616		50,520		51,136
Home equity lines of credit		1,123		331		2,144			3,598		336,891		340,489
Installment		85		14		77			176		5,719		5,895
Total	$	7,262		3,831		28,128			39,221		2,869,588		2,908,809

At September 30, 2014 and December 31, 2013, there were no loans that are 90 days past due and still accruing interest. As a result, non-accrual loans includes all loans 90 days past due and greater as well as certain loans less than 90 days past due that were placed on non-accrual status for reasons other than delinquent status. There are no commitments to extend further credit on non-accrual or restructured loans.

Activity in the allowance for loan losses by portfolio segment is summarized as follows:

(dollars in thousands)	For the three months ended September 30, 2014
			Real Estate
			Mortgage-
	Commercial		1 to 4 Family		Installment		Total
Balance at beginning of period	$	4,073		42,752		110		46,935
Loans charged off:
New York and other states		124		1,187		67		1,378
Florida		-		278		-		278
Total loan chargeoffs		124		1,465		67		1,656
Recoveries of loans previously charged off:
New York and other states		-		82		10		92
Florida		1		36		4		41
Total recoveries		1		118		14		133
Net loans charged off		123		1,347		53		1,523
Provision for loan losses		95		935		70		1,100
Balance at end of period	$	4,045		42,340		127		46,512

(dollars in thousands)	For the three months ended September 30, 2013
			Real Estate
			Mortgage-
	Commercial		1 to 4 Family		Installment		Total
Balance at beginning of period	$	3,719		43,766		104		47,589
Loans charged off:
New York and other states		585		1,638		30		2,253
Florida		-		234		3		237
Total loan chargeoffs		585		1,872		33		2,490
Recoveries of loans previously charged off:
New York and other states		-		423		5		428
Florida		502		193		-		695
Total recoveries		502		616		5		1,123
Net loans charged off		83		1,256		28		1,367
Provision for loan losses		228		1,240		32		1,500
Balance at end of period	$	3,864		43,750		108		47,722

(dollars in thousands)	For the nine months ended September 30, 2014
			Real Estate
			Mortgage-
	Commercial		1 to 4 Family		Installment		Total
Balance at beginning of period	$	4,019		43,597		98		47,714
Loans charged off:
New York and other states		397		3,804		148		4,349
Florida		613		820		12		1,445
Total loan chargeoffs		1,010		4,624		160		5,793
Recoveries of loans previously charged off:
New York and other states		18		352		23		392
Florida		4		91		4		99
Total recoveries		22		393		27		491
Net loans charged off		988		4,181		133		5,302
Provision for loan losses		1,014		2,924		162		4,100
Balance at end of period	$	4,045		42,340		127		46,512

(dollars in thousands)	For the nine months ended September 30, 2013
			Real Estate
			Mortgage-
	Commercial		1 to 4 Family		Installment		Total
Balance at beginning of period	$	3,771		44,069		87		47,927
Loans charged off:
New York and other states		884		5,283		65		6,232
Florida		100		801		3		904
Total loan chargeoffs		984		6,084		68		7,136
Recoveries of loans previously charged off:
New York and other states		2		620		12		634
Florida		504		293		-		797
Total recoveries		506		913		12		1,431
Net loans charged off		478		5,171		56		5,705
Provision for loan losses		571		4,852		77		5,500
Balance at end of period	$	3,864		43,750		108		47,722

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2014 and December 31, 2013:

	September 30, 2014
(dollars in thousands)			Real Estate Mortgage-
	Commercial		1-to-4 Family		Installment		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-		-		-		-
Collectively evaluated for impairment		4,045		42,340		127		46,512
Total ending allowance balance	$	4,045		42,340		127		46,512
Loans:
Individually evaluated for impairment	$	5,043		22,627		-		27,670
Collectively evaluated for impairment		214,782		2,834,020		6,557		3,055,359
Total ending loans balance	$	219,825		2,856,647		6,557		3,083,029
	December 31, 2013
(dollars in thousands)			Real Estate Mortgage-
	Commercial		1-to-4 Family		Installment		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-		-		-		-
Collectively evaluated for impairment		4,019		43,597		98		47,714
Total ending allowance balance	$	4,019		43,597		98		47,714
Loans:
Individually evaluated for impairment	$	8,082		21,258		-		29,340
Collectively evaluated for impairment		215,399		2,658,175		5,895		2,879,469
Total ending loans balance	$	223,481		2,679,433		5,895		2,908,809

The Company did not acquire any loans with deteriorated credit quality during the three months or nine months ended September 30, 2014 and 2013.

The Company has identified non-accrual commercial and commercial real estate loans, as well as all loans restructured under a troubled debt restructuring (TDR), as impaired loans. A loan is considered impaired when it is probable that the borrower will be unable to repay the loan according to the original contractual terms of the loan agreement or the loan is restructured in a TDR.

A loan for which the terms have been modified, and for which the borrower is experiencing financial difficulties, is considered a TDR and is classified as impaired. TDR’s at September 30, 2014 and December 31, 2013 are measured at the present value of estimated future cash flows using the loan’s effective rate at inception or the fair value of the underlying collateral if the loan is considered collateral dependent.

The following tables present impaired loans by loan class as of September 30, 2014 and December 31, 2013:

New York and other states:

	September 30, 2014
(dollars in thousands)			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Commercial:
Commercial real estate	$	4,526		6,012		-		4,978
Other		-		-		-		82
Real estate mortgage - 1 to 4 family:
First mortgages		17,657		18,738		-		17,131
Home equity loans		440		484		-		476
Home equity lines of credit		2,627		2,982		-		2,604
Total	$	25,250		28,216		-		25,271
Florida:
(dollars in thousands)			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Commercial:
Commercial real estate	$	517		1,130		-		653
Other		-		-		-		-
Real estate mortgage - 1 to 4 family:
First mortgages		1,278		1,462		-		1,451
Home equity loans		-		-		-		-
Home equity lines of credit		625		774		-		566
Total	$	2,420		3,366		-		2,670
Total:
(dollars in thousands)			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Commercial:
Commercial real estate	$	5,043		7,142		-		5,631
Other		-		-		-		82
Real estate mortgage - 1 to 4 family:
First mortgages		18,935		20,200		-		18,582
Home equity loans		440		484		-		476
Home equity lines of credit		3,252		3,756		-		3,170
Total	$	27,670		31,582		-		27,941

New York and other states:
	December 31, 2013
(dollars in thousands)			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Commercial:
Commercial real estate	$	6,620		8,039		-		6,013
Other		332		332		-		165
Real estate mortgage - 1 to 4 family:
First mortgages		16,257		17,353		-		14,706
Home equity loans		561		614		-		636
Home equity lines of credit		2,528		2,825		-		2,051
Total	$	26,298		29,163		-		23,571
Florida:
(dollars in thousands)			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Commercial:
Commercial real estate	$	1,130		1,130		-		1,401
Other		-		-		-		-
Real estate mortgage - 1 to 4 family:
First mortgages		1,630		1,922		-		1,611
Home equity lines of credit		282		380		-		100
Total	$	3,042		3,432		-		3,112
Total:
(dollars in thousands)			Unpaid				Average
	Recorded		Principal		Related		Recorded
	Investment		Balance		Allowance		Investment
Commercial:
Commercial real estate	$	7,750		9,169		-		7,414
Other		332		332		-		165
Real estate mortgage - 1 to 4 family:
First mortgages		17,887		19,275		-		16,317
Home equity loans		561		614		-		636
Home equity lines of credit		2,810		3,205		-		2,151
Total	$	29,340		32,595		-		26,683

The Company has not committed to lend additional amounts to customers with outstanding loans that are classified as impaired. Interest income recognized on impaired loans was not material during the three months and nine months ended September 30, 2014 and 2013.

As of September 30, 2014 and December 31, 2013 impaired loans included approximately $9.7 million and $8.6 million of 1 to 4 family residential real estate loans in accruing status that were identified as TDR’s in accordance with regulatory guidance related to Chapter 7 bankruptcy loans.

Management evaluates impairment on impaired loans on a quarterly basis. If, during this evaluation, impairment of the loan is identified, a charge off is taken at that time. As a result, as of September 30, 2014 and December 31, 2013, based upon management’s evaluation and due to the sufficiency of chargeoffs taken, none of the allowance for loan losses has been allocated to a specific impaired loan(s).

The following table presents, by class, loans that were modified as TDR’s:

	During the three months ended 9/30/2014						During the three months ended 9/30/2013
New York and other states:			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
(dollars in thousands)	Contracts		Investment		Investment		Contracts		Investment		Investment
Commercial:
Commercial real estate		-	$	-		-		-	$	-		-
Real estate mortgage - 1 to 4 family:
First mortgages		13		1,830		1,830		14		1,461		1,461
Home equity loans		2		12		12		1		9		9
Home equity lines of credit		-		-		-		7		787		787
Total		15	$	1,842		1,842		22	$	2,257		2,257
Florida:			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
(dollars in thousands)	Contracts		Investment		Investment		Contracts		Investment		Investment
Commercial:
Commercial real estate		-	$	-		-		-	$	-		-
Real estate mortgage - 1 to 4 family:
First mortgages		1		60		60		4		536		536
Home equity lines of credit		1		14		14		1		63		63
Total		2	$	74		74		5	$	599		599
	During nine months ended 9/30/2014						During the nine months ended 9/30/2013
New York and other states:			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
(dollars in thousands)	Contracts		Investment		Investment		Contracts		Investment		Investment
Commercial:
Commercial real estate		1	$	300		300		-	$	-		-
Real estate mortgage - 1 to 4 family:
First mortgages		31		4,523		4,523		47		5,579		5,579
Home equity loans		4		63		63		9		166		166
Home equity lines of credit		3		565		565		15		1,062		1,062
Total		39	$	5,451		5,451		71	$	6,807		6,807
Florida:			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
			Outstanding		Outstanding				Outstanding		Outstanding
	Number of		Recorded		Recorded		Number of		Recorded		Recorded
(dollars in thousands)	Contracts		Investment		Investment		Contracts		Investment		Investment
Commercial:
Commercial real estate		-	$	-		-		-	$	-		-
Real estate mortgage - 1 to 4 family:
First mortgages		5		423		423		7		1,121		1,121
Home equity lines of credit		3		368		368		2		93		93
Total		8	$	791		791		9	$	1,214		1,214

The addition of these TDR’s did not have a significant impact on the allowance for loan losses.

In situations where the Bank considers a loan modification, management determines whether the borrower is experiencing financial difficulty by performing an evaluation of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s underwriting policy.

Generally, the modification of the terms of loans was the result of the borrower filing for bankruptcy protection. Chapter 13 bankruptcies generally include the deferral of all past due amounts for a period of generally 60 months in accordance with the bankruptcy court order. In the case of Chapter 7 bankruptcies, as previously noted, even though there is no modification of terms, the borrowers’ debt to the Company was discharged and they did not reaffirm the debt.

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. In situations involving a borrower filing for Chapter 13 bankruptcy protection, however, a loan is considered to be in payment default once it is 30 days contractually past due, consistent with the treatment by the bankruptcy court.

The following table presents, by class, TDR’s that defaulted during the three and nine months ended September 30, 2014 and 2013 which had been modified within the last twelve months:

	Three months ended 9/30/2014				Three months ended 9/30/2013
New York and other states:	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
(dollars in thousands)
Commercial:
Commercial real estate		-		-		-		-
Real estate mortgage - 1 to 4 family:
First mortgages		2	$	203		-	$	-
Home equity loans		-		-		-		-
Home equity lines of credit		-		-		-		-
Total		2	$	203		-	$	-

Florida:
	Number of		Recorded		Number of		Recorded
(dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial:
Commercial real estate		-		-		-		-
Real estate mortgage - 1 to 4 family:
First mortgages		1	$	60		-	$	-
Home equity lines of credit		-		-		-		-
Total		1	$	60		-	$	-

	Nine months ended 9/30/2014				Nine months ended 9/30/2013
New York and other states:	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
(dollars in thousands)
Commercial:
Commercial real estate		-		-		-		-
Real estate mortgage - 1 to 4 family:
First mortgages		6	$	509		6	$	589
Home equity loans		-		-		1		44
Home equity lines of credit		-		-		3		94
Total		6	$	509		10	$	727

Florida:
	Number of		Recorded		Number of		Recorded
(dollars in thousands)	Contracts		Investment		Contracts		Investment
Commercial:
Commercial real estate		-		-		-		-
Real estate mortgage - 1 to 4 family:
First mortgages		1	$	60		1	$	138
Home equity lines of credit		1		279		-		-
Total		2	$	339		1	$	138

The TDR’s that subsequently defaulted described above did not have a material impact on the allowance for loan losses as the underlying collateral was evaluated at the time these loans were identified as TDR’s, and a charge off was taken at that time, if necessary. Collateral values on these loans, as well as all non-accrual loans, are reviewed for collateral sufficiency on a quarterly basis.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. On at least an annual basis, the Company’s loan grading process analyzes non-homogeneous loans over $150 thousand, such as commercial and commercial real estate loans, individually by grading the loans based on credit risk. In addition, the Company’s internal loan review department reviews non-homogeneous loans over $250 thousand by testing the loan grades assigned through the Company’s grading process.

The Company uses the following definitions for classified loans:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as such have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those loans classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. All doubtful loans are considered impaired.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

As of September 30, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

	September 30, 2014
New York and other states:
(dollars in thousands)
	Pass		Classified		Total
Commercial:
Commercial real estate	$	163,137		9,320		172,457
Other		27,090		505		27,595
	$	190,227		9,825		200,052
Florida:
(dollars in thousands)
	Pass		Classified		Total
Commercial:
Commercial real estate	$	19,195		517		19,712
Other		61		-		61
	$	19,256		517		19,773
	December 31, 2013
New York and other states:
(dollars in thousands)
	Pass		Classified		Total
Commercial:
Commercial real estate	$	159,024		10,698		169,722
Other		31,691		632		32,323
	$	190,715		11,330		202,045
Florida:
(dollars in thousands)
	Pass		Classified		Total
Commercial:
Commercial real estate	$	20,274		1,130		21,404
Other		32		-		32
	$	20,306		1,130		21,436

Included in classified loans in the above tables are impaired loans of $5.0 million and $8.1 million at September 30, 2014 and December 31, 2013, respectively.

For homogeneous loan pools, such as residential mortgages, home equity lines of credit, and installment loans, the Company uses payment status to identify the credit risk in these loan portfolios. Payment status is reviewed on a daily basis by the Bank’s collection area and on a monthly basis with respect to determining the adequacy of the allowance for loan losses. The payment status of these homogeneous pools at September 30, 2014 and December 31, 2013 is included in the aging of the recorded investment of past due loans table. In addition, the total nonperforming portion of these homogeneous loan pools at September 30, 2014 and December 31, 2013 is presented in the recorded investment in non-accrual loans table.