XML 60 R12.htm IDEA: XBRL DOCUMENT v2.4.1.9
Loans
 3 Months Ended
Mar. 31, 2015
Loans  
Loans

 

(3)Loans

 

The composition of loans by primary loan portfolio class follows:

 

(in thousands)

 

March 31, 2015

 

December 31, 2014

 

Commercial and industrial

 

$
594,980 

 

$
588,200 

 

Construction and development, excluding undeveloped land

 
99,846 

 
95,733 

 

Undeveloped land

 
19,995 

 
21,268 

 

 

 

 

 

 

 

Real estate mortgage:

 

 

 

 

 

Commercial investment

 
486,371 

 
487,822 

 

Owner occupied commercial

 
341,454 

 
340,982 

 

1-4 family residential

 
191,004 

 
195,102 

 

Home equity - first lien

 
45,288 

 
43,779 

 

Home equity - junior lien

 
65,824 

 
66,268 

 

Subtotal: Real estate mortgage

 
1,129,941 

 
1,133,953 

 

 

 

 

 

 

 

Consumer

 
29,248 

 
29,396 

 

 

 

 

 

 

 

Total loans

 

$
1,874,010 

 

$
1,868,550 

 

 

The following table presents the balance in the recorded investment in loans and allowance for loan losses by portfolio segment and based on impairment evaluation method as of March 31, 2015 and December 31, 2014.

 

 

 

Type of loan

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

and development

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

excluding

 

 

 

 

 

 

 

 

 

(in thousands)

 

and

 

undeveloped

 

Undeveloped

 

Real estate

 

 

 

 

 

March 31, 2015

 

industrial

 

land

 

land

 

mortgage

 

Consumer

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$
594,980 

 

$
99,846 

 

$
19,995 

 

$
1,129,941 

 

$
29,248 

 

$
1,874,010 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans collectively evaluated for impairment

 

$
587,861 

 

$
98,849 

 

$
19,995 

 

$
1,125,536 

 

$
29,169 

 

$
1,861,410 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$
7,041 

 

$
516 

 

$

—

 

$
3,905 

 

$
74 

 

$
11,536 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans acquired with deteriorated credit quality

 

$
78 

 

$
481 

 

$

—

 

$
500 

 

$
5 

 

$
1,064 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and development

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

and

 

undeveloped

 

Undeveloped

 

Real estate

 

 

 

 

 

 

 

 

 

industrial

 

land

 

land

 

mortgage

 

Consumer

 

Unallocated

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2014

 

$
11,819

 

$
721

 

$
1,545

 

$
10,541

 

$
294

 

$

—

 

$
24,920

 

Provision (credit)

 
(24

)
74

 
(398

)
378

 
(30

)

—

 

—

 

Charge-offs

 
(12

)

—

 

—

 
(63

)
(139

)

—

 
(214

)

Recoveries

 
7

 

—

 

—

 
15

 
154

 

—

 
176

 

At March 31, 2015

 

$
11,790

 

$
795

 

$
1,147

 

$
10,871

 

$
279

 

$

—

 

$
24,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loans collectively evaluated for impairment

 

$
11,204

 

$
705

 

$
1,147

 

$
10,484

 

$
205

 

$

—

 

$
23,745

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loans individually evaluated for impairment

 

$
586

 

$
90

 

$

—

 

$
387

 

$
74

 

$

—

 

$
1,137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loans acquired with deteriorated credit quality

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

 

 

 

Type of loan

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

and development

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

excluding

 

 

 

 

 

 

 

 

 

(in thousands)

 

and

 

undeveloped

 

Undeveloped

 

Real estate

 

 

 

 

 

December 31, 2014

 

industrial

 

land

 

land

 

mortgage

 

Consumer

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$
588,200 

 

$
95,733 

 

$
21,268 

 

$
1,133,953 

 

$
29,396 

 

$
1,868,550 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans collectively evaluated for impairment

 

$
580,889 

 

$
94,603 

 

$
21,268 

 

$
1,129,766 

 

$
29,311 

 

$
1,855,837 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for impairment

 

$
7,239 

 

$
516 

 

$

—

 

$
3,720 

 

$
76 

 

$
11,551 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans acquired with deteriorated credit quality

 

$
72 

 

$
614 

 

$

—

 

$
467 

 

$
9 

 

$
1,162 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and development

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

excluding

 

 

 

 

 

 

 

 

 

 

 

 

 

and

 

undeveloped

 

Undeveloped

 

Real estate

 

 

 

 

 

 

 

 

 

industrial

 

land

 

land

 

mortgage

 

Consumer

 

Unallocated

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2013

 

$
7,644

 

$
2,555

 

$
5,376

 

$
12,604

 

$
343

 

$

—

 

$
28,522

 

Provision (credit)

 
4,593

 
(1,584

)
(2,244

)
(1,190

)
25

 

—

 
(400

)

Charge-offs

 
(661

)
(250

)
(1,753

)
(993

)
(587

)

—

 
(4,244

)

Recoveries

 
243

 

—

 
166

 
120

 
513

 

—

 
1,042

 

At December 31, 2014

 

$
11,819

 

$
721

 

$
1,545

 

$
10,541

 

$
294

 

$

—

 

$
24,920

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loans collectively evaluated for impairment

 

$
10,790

 

$
706

 

$
1,545

 

$
10,285

 

$
218

 

$

—

 

$
23,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loans individually evaluated for impairment

 

$
1,029

 

$
15

 

$

—

 

$
256

 

$
76

 

$

—

 

$
1,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loans acquired with deteriorated credit quality

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

 

The considerations by Bancorp in computing its allowance for loan losses are determined based on the various risk characteristics of each loan segment. Relevant risk characteristics are as follows:

 

·

Commercial and industrial loans:  Loans in this category are made to businesses. Generally these loans are secured by assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending will have an effect on the credit quality in this loan category.

 

·

Construction and development, excluding undeveloped land:  Loans in this category primarily include owner-occupied and investment construction loans and commercial development projects Bancorp finances.  In most cases, these loans require only interest to be paid during construction, and then convert to permanent financing requiring principal amortization. Repayment is derived from sale of the units including any pre-sold units. Credit risk is affected by construction delays, cost overruns, market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by us.

 

·

Undeveloped land:  Loans in this category are secured by land initially acquired for development by the borrower, but for which no development has yet taken place.  Credit risk is affected by market conditions and time to sell at an adequate price.  Credit risk is also affected by market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by us.

 

·

Real estate mortgage:  Loans in this category are made to and secured by owner-occupied residential real estate, owner-occupied real estate used for business purposes, and income-producing investment properties.  Repayment is dependent on the credit quality of the individual borrower. The underlying properties are generally located in Bancorp’s primary market area. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan category. The cash flows of the income producing investment properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on credit quality.  In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending will have an adverse effect on credit quality.

 

·

Consumer:  Loans in this category may be either secured or unsecured and repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have a significant effect on the credit quality in this loan category.

 

Bancorp has loans that were acquired in a prior acquisition, for which there was, at acquisition, evidence of deterioration of credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected.  The carrying amount of those loans is included in the balance sheet amounts of loans at March 31, 2015 and December 31, 2014.   Changes in the interest component of the fair value adjustment for acquired impaired loans are shown in the following table:

 

(in thousands)

 

Accretable
discount

 

Non-
accretable
discount

 

Balance at December 31, 2013

 

$
137

 

$
369

 

 

 

 

 

 

 

Accretion

 
(75

)
(103

)

Reclassifications from (to) non-accretable difference

 

—

 

—

 

Disposals

 

—

 

—

 

Balance at December 31, 2014

 
62

 
266

 

 

 

 

 

 

 

Accretion

 
(14

)

—

 

Reclassifications from (to) non-accretable difference

 

—

 

—

 

Disposals

 

—

 

—

 

Balance at March 31, 2015

 

$
48

 

$
266

 

 

The following tables present loans individually evaluated for impairment as of March 31, 2015 and December 31, 2014.

 

 

 

 

 

Unpaid

 

 

 

Average

 

(in thousands)

 

Recorded

 

principal

 

Related

 

recorded

 

March 31, 2015

 

investment

 

balance

 

allowance

 

investment

 

 

 

 

 

 

 

 

 

 

 

Loans with no related allowance recorded

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
749 

 

$
1,857 

 

$

—

 

$
823 

 

Construction and development, excluding undeveloped land

 
26 

 
151 

 

—

 
26 

 

Undeveloped land

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

Commercial investment

 
112 

 
1,704 

 

—

 
113 

 

Owner occupied commercial

 
1,330 

 
1,398 

 

—

 
1,557 

 

1-4 family residential

 
721 

 
721 

 

—

 
796 

 

Home equity - first lien

 

—

 

—

 

—

 

—

 

Home equity - junior lien

 
109 

 
109 

 

—

 
73 

 

Subtotal: Real estate mortgage

 
2,272 

 
3,932 

 

—

 
2,539 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

—

 

—

 

—

 

—

 

Subtotal

 

$
3,047 

 

$
5,940 

 

$

—

 

$
3,388 

 

 

 

 

 

 

 

 

 

 

 

Loans with an allowance recorded

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
6,292 

 

$
7,861 

 

$
586 

 

$
6,318 

 

Construction and development, excluding undeveloped land

 
490 

 
490 

 
90 

 
490 

 

Undeveloped land

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

Commercial investment

 
122 

 
122 

 

—

 
122 

 

Owner occupied commercial

 
1,432 

 
1,811 

 
243 

 
1,074 

 

1-4 family residential

 
79 

 
79 

 
144 

 
79 

 

Home equity - first lien

 

—

 

—

 

—

 

—

 

Home equity - junior lien

 

—

 

—

 

—

 

—

 

Subtotal: Real estate mortgage

 
1,633 

 
2,012 

 
387 

 
1,275 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
74 

 
74 

 
74 

 
75 

 

Subtotal

 

$
8,489 

 

$
10,437 

 

$
1,137 

 

$
8,158 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
7,041 

 

$
9,718 

 

$
586 

 

$
7,141 

 

Construction and development, excluding undeveloped land

 
516 

 
641 

 
90 

 
516 

 

Undeveloped land

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

—

 

—

 

—

 

—

 

Commercial investment

 
234 

 
1,826 

 

—

 
235 

 

Owner occupied commercial

 
2,762 

 
3,209 

 
243 

 
2,631 

 

1-4 family residential

 
800 

 
800 

 
144 

 
875 

 

Home equity - first lien

 

—

 

—

 

—

 

—

 

Home equity - junior lien

 
109 

 
109 

 

—

 
73 

 

Subtotal: Real estate mortgage

 
3,905 

 
5,944 

 
387 

 
3,814 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
74 

 
74 

 
74 

 
75 

 

Total

 

$
11,536 

 

$
16,377 

 

$
1,137 

 

$
11,546 

 

 

 

 

 

 

Unpaid

 

 

 

Average

 

(in thousands)

 

Recorded

 

principal

 

Related

 

recorded

 

December 31, 2014

 

investment

 

balance

 

allowance

 

investment

 

 

 

 

 

 

 

 

 

 

 

Loans with no related allowance recorded

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
896 

 

$
3,596 

 

$

—

 

$
996 

 

Construction and development, excluding undeveloped land

 
26 

 
151 

 

—

 
26 

 

Undeveloped land

 

—

 

—

 

—

 
5,608 

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

Commercial investment

 
113 

 
113 

 

—

 
198 

 

Owner occupied commercial

 
1,784 

 
2,221 

 

—

 
1,939 

 

1-4 family residential

 
870 

 
870 

 

—

 
782 

 

Home equity - first lien

 

—

 

—

 

—

 
11 

 

Home equity - junior lien

 
36 

 
36 

 

—

 
69 

 

Subtotal: Real estate mortgage

 
2,803 

 
3,240 

 

—

 
2,999 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

—

 

—

 

—

 

—

 

Subtotal

 

$
3,725 

 

$
6,987 

 

$

—

 

$
9,629 

 

 

 

 

 

 

 

 

 

 

 

Loans with an allowance recorded

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
6,343 

 

$
7,914 

 

$
1,029 

 

$
6,797 

 

Construction and development, excluding undeveloped land

 
490 

 
490 

 
15 

 
196 

 

Undeveloped land

 

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

Commercial investment

 
122 

 
122 

 

—

 
640 

 

Owner occupied commercial

 
716 

 
716 

 
112 

 
704 

 

1-4 family residential

 
79 

 
79 

 
144 

 
651 

 

Home equity - first lien

 

—

 

—

 

—

 

—

 

Home equity - junior lien

 

—

 

—

 

—

 

—

 

Subtotal: Real estate mortgage

 
917 

 
917 

 
256 

 
1,995 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
76 

 
76 

 
76 

 
80 

 

Subtotal

 

$
7,826 

 

$
9,397 

 

$
1,376 

 

$
9,068 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
7,239 

 

$
11,510 

 

$
1,029 

 

$
7,793 

 

Construction and development, excluding undeveloped land

 
516 

 
641 

 
15 

 
222 

 

Undeveloped land

 

—

 

—

 

—

 
5,608 

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

—

 

—

 

—

 

—

 

Commercial investment

 
235 

 
235 

 

—

 
838 

 

Owner occupied commercial

 
2,500 

 
2,937 

 
112 

 
2,643 

 

1-4 family residential

 
949 

 
949 

 
144 

 
1,433 

 

Home equity - first lien

 

—

 

—

 

—

 
11 

 

Home equity - junior lien

 
36 

 
36 

 

—

 
69 

 

Subtotal: Real estate mortgage

 
3,720 

 
4,157 

 
256 

 
4,994 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
76 

 
76 

 
76 

 
80 

 

Total

 

$
11,551 

 

$
16,384 

 

$
1,376 

 

$
18,697 

 

 

Differences between recorded investment amounts and unpaid principal balance amounts less related allowance are due to partial charge-offs which have occurred over the life of loans and fair value adjustments recorded for loans acquired.

 

Impaired loans include non-accrual loans and loans accounted for as troubled debt restructurings (TDR), which continue to accrue interest. Non-performing loans include the balance of impaired loans plus any loans over 90 days past due and still accruing interest.  Loans past due more than 90 days or more and still accruing interest amounted to $1 thousand at March 31, 2015 and $329 thousand at December 31, 2014.

 

The following table presents the recorded investment in non-accrual loans as of March 31, 2015 and December 31, 2014.

 

(in thousands)

 

March 31, 2015

 

December 31, 2014

 

 

 

 

 

 

 

Commercial and industrial

 

$
1,276 

 

$
1,381 

 

Construction and development, excluding undeveloped land

 
516 

 
516 

 

Undeveloped land

 

—

 

—

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

Commercial investment

 
234 

 
235 

 

Owner occupied commercial

 
2,344 

 
2,081 

 

1-4 family residential

 
800 

 
950 

 

Home equity - first lien

 

—

 

—

 

Home equity - junior lien

 
109 

 
36 

 

Subtotal: Real estate mortgage

 
3,487 

 
3,302 

 

 

 

 

 

 

 

Consumer

 

—

 

—

 

 

 

 

 

 

 

Total

 

$
5,279 

 

$
5,199 

 

 

At March 31, 2015 and December 31, 2014, Bancorp had accruing loans classified as TDR of $6.3 million and $6.4 million, respectively.  Bancorp did not modify and classify any loans as TDR during the three months ended March 31, 2015 or March 31, 2014.

 

Bancorp had no loans accounted for as TDR that were restructured and experienced a payment default within the previous 12 months as of March 31, 2015.  The following table presents the recorded investment in loans accounted for as TDR that were restructured and experienced a payment default within the previous 12 months as of March 31, 2014.

 

(dollars in thousands)

 

Number of

 

Recorded

 

March 31, 2014

 

Contracts

 

Investment

 

 

 

 

 

 

 

Commercial & industrial

 
1 

 

$
790 

 

 

 

 

 

 

 

Total

 
1 

 

$
790 

 

 

Loans accounted for as TDR include modifications from original terms such as those due to bankruptcy proceedings, certain modifications of amortization periods or extended suspension of principal payments due to customer financial difficulties.  Loans accounted for as TDR, which have not defaulted, are individually evaluated for impairment and, at March 31, 2015, had a total allowance allocation of $612 thousand, compared to $703 thousand at December 31, 2014.

 

At March 31, 2015, Bancorp did not have any outstanding commitments to lend additional funds to borrowers whose loans have been modified as TDR, compared to $458 thousand at December 31, 2014.

 

The following table presents the aging of the recorded investment in loans as of March 31, 2015 and December 31, 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recorded

 

 

 

 

 

 

 

90 or more

 

 

 

 

 

 

 

investment

 

 

 

 

 

 

 

days past

 

 

 

 

 

 

 

> 90 days

 

(in thousands)

 

30-59 days

 

60-89 days

 

due (includes)

 

Total

 

 

 

Total

 

and

 

March 31, 2015

 

past due

 

past due

 

non-accrual)

 

past due

 

Current

 

loans

 

accruing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
175 

 

$
22 

 

$
1,277 

 

$
1,474 

 

$
593,506 

 

$
594,980 

 

$
1 

 

Construction and development, excluding undeveloped land

 

—

 
232 

 
516 

 
748 

 
99,098 

 
99,846 

 

—

 

Undeveloped land

 

—

 

—

 

—

 

—

 
19,995 

 
19,995 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial investment

 
1,343 

 
111 

 
234 

 
1,688 

 
484,683 

 
486,371 

 

—

 

Owner occupied commercial

 
374 

 
692 

 
2,344 

 
3,410 

 
338,044 

 
341,454 

 

—

 

1-4 family residential

 
1,786 

 
727 

 
800 

 
3,313 

 
187,691 

 
191,004 

 

—

 

Home equity - first lien

 
100 

 

—

 

—

 
100 

 
45,188 

 
45,288 

 

—

 

Home equity - junior lien

 
104 

 
107 

 
109 

 
320 

 
65,504 

 
65,824 

 

—

 

Subtotal: Real estate mortgage

 
3,707 

 
1,637 

 
3,487 

 
8,831 

 
1,121,110 

 
1,129,941 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
34 

 
22 

 

—

 
56 

 
29,192 

 
29,248 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
3,916 

 

$
1,913 

 

$
5,280 

 

$
11,109 

 

$
1,862,901 

 

$
1,874,010 

 

$
1 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
3,860 

 

$
3 

 

$
1,382 

 

$
5,245 

 

$
582,955 

 

$
588,200 

 

$
1 

 

Construction and development, excluding undeveloped land

 
69 

 

—

 
757 

 
826 

 
94,907 

 
95,733 

 
241 

 

Undeveloped land

 

—

 

—

 

—

 

—

 
21,268 

 
21,268 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial investment

 
993 

 
249 

 
235 

 
1,477 

 
486,345 

 
487,822 

 

—

 

Owner occupied commercial

 
1,272 

 
920 

 
2,081 

 
4,273 

 
336,709 

 
340,982 

 

—

 

1-4 family residential

 
1,801 

 
285 

 
1,023 

 
3,109 

 
191,993 

 
195,102 

 
73 

 

Home equity - first lien

 

—

 

—

 
14 

 
14 

 
43,765 

 
43,779 

 
14 

 

Home equity - junior lien

 
470 

 
78 

 
36 

 
584 

 
65,684 

 
66,268 

 

 

 

Subtotal: Real estate mortgage

 
4,536 

 
1,532 

 
3,389 

 
9,457 

 
1,124,496 

 
1,133,953 

 
87 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
43 

 
18 

 

—

 
61 

 
29,335 

 
29,396 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
8,508 

 

$
1,553 

 

$
5,528 

 

$
15,589 

 

$
1,852,961 

 

$
1,868,550 

 

$
329 

 

 

Consistent with regulatory guidance, Bancorp categorizes loans into credit 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.  Pass-rated loans included all risk-rated loans other than those classified as special mention, substandard, and doubtful, which are defined below:

 

·

Special Mention:  Loans classified as special mention have a potential weakness that deserves management’s close attention.  These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp’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 collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize repayment of the debt.  They are characterized by the distinct possibility that Bancorp will sustain some loss if the deficiencies are not corrected.

 

·

Substandard non-performing:  Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status or have been accounted for as troubled debt restructurings.

 

·

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

 

As of March 31, 2015 and December 31, 2014, the internally assigned risk grades of loans by category were as follows:

 

(in thousands)

 

 

 

Special

 

 

 

Substandard

 

 

 

Total

 

March 31, 2015

 

Pass

 

Mention

 

Substandard

 

non-performing

 

Doubtful

 

loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
574,010 

 

$
5,258 

 

$
8,670 

 

$
7,042 

 

$

—

 

$
594,980 

 

Construction and development, excluding undeveloped land

 
92,587 

 
4,798 

 
1,945 

 
516 

 

—

 
99,846 

 

Undeveloped land

 
19,309 

 
527 

 
159 

 

—

 

—

 
19,995 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial investment

 
481,205 

 
4,753 

 
179 

 
234 

 

—

 
486,371 

 

Owner occupied commercial

 
326,208 

 
8,550 

 
3,934 

 
2,762 

 

—

 
341,454 

 

1-4 family residential

 
188,536 

 
1,668 

 

—

 
800 

 

—

 
191,004 

 

Home equity - first lien

 
45,288 

 

—

 

—

 

—

 

—

 
45,288 

 

Home equity - junior lien

 
65,614 

 
101 

 

—

 
109 

 

—

 
65,824 

 

Subtotal: Real estate mortgage

 
1,106,851 

 
15,072 

 
4,113 

 
3,905 

 

—

 
1,129,941 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
29,100 

 
74 

 

—

 
74 

 

—

 
29,248 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
1,821,857 

 

$
25,729 

 

$
14,887 

 

$
11,537 

 

$

—

 

$
1,874,010 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$
563,028 

 

$
6,215 

 

$
11,717 

 

$
7,240 

 

$

—

 

$
588,200 

 

Construction and development, excluding undeveloped land

 
88,389 

 
4,867 

 
1,720 

 
757 

 

—

 
95,733 

 

Undeveloped land

 
20,578 

 
530 

 
160 

 

—

 

—

 
21,268 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial investment

 
482,415 

 
4,991 

 
181 

 
235 

 

—

 
487,822 

 

Owner occupied commercial

 
328,385 

 
6,942 

 
3,156 

 
2,499 

 

—

 
340,982 

 

1-4 family residential

 
192,950 

 
1,129 

 

—

 
1,023 

 

—

 
195,102 

 

Home equity - first lien

 
43,765 

 

—

 

—

 
14 

 

—

 
43,779 

 

Home equity - junior lien

 
66,182 

 
50 

 

—

 
36 

 

—

 
66,268 

 

Subtotal: Real estate mortgage

 
1,113,697 

 
13,112 

 
3,337 

 
3,807 

 

—

 
1,133,953 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 
29,244 

 
76 

 

—

 
76 

 

—

 
29,396 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
1,814,936 

 

$
24,800 

 

$
16,934 

 

$
11,880 

 

$

—

 

$
1,868,550