Note 3 - Loans

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3.     LOANS

The loan portfolio is classified by major type as follows:

	As of September 30, 2013						As of December 31, 2012
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Commercial and industrial	$	439,420			37.00	%	$	383,641			34.78	%
Real estate mortgage
Residential		39,998			3.37			36,807			3.34
Commercial		694,980			58.52			665,244			60.32
		734,978			61.89			702,051			63.66
Real estate construction
Residential		4,936			0.42			2,420			0.22
Commercial		3,747			0.31			7,284			0.66
		8,683			0.73			9,704			0.88
Consumer and other		4,483			0.38			7,531			0.68
Gross loans		1,187,564			100.00	%		1,102,927			100.00	%
Unearned discounts, interest and deferred fees		(2,740	)					(2,590	)
Total loans		1,184,824						1,100,337
Allowance for loan losses		(20,800	)					(24,592	)
Loans, net (1)	$	1,164,024					$	1,075,745

(1) Includes loans held-for-sale.

The recorded investment in loans is the face amount increased or decreased by applicable accrued interest and unamortized premium, discount, or finance charges, and may also reflect a previous direct write-down of the loan.

The recorded investment in loans at the dates indicated is determined as follows (in thousands):

September 30, 2013	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	439,420	$	(956	)	$	1,137	$	439,601
Real estate mortgage		734,978		(1,549	)		1,851		735,280
Real estate construction		8,683		(101	)		25		8,607
Consumer and other		4,483		(134	)		13		4,362
Total	$	1,187,564	$	(2,740	)	$	3,026	$	1,187,850

December 31, 2012	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	383,641	$	(814	)	$	1,078	$	383,905
Real estate mortgage		702,051		(1,595	)		2,024		702,480
Real estate construction		9,704		(30	)		18		9,692
Consumer and other		7,531		(151	)		21		7,401
Total	$	1,102,927	$	(2,590	)	$	3,141	$	1,103,478

Loan Origination/Risk Management

The Company selectively extends credit for the purpose of establishing long-term relationships with its customers. The Company mitigates the risks inherent in lending by focusing on businesses and individuals with demonstrated payment history, historically favorable profitability trends and stable cash flows. In addition to these primary sources of repayment, the Company looks to tangible collateral and personal guarantees as secondary sources of repayment. Lending officers are provided with detailed underwriting policies covering all lending activities in which the Company is engaged and that require all lenders to obtain appropriate approvals for the extension of credit. The Company also maintains documentation requirements and extensive credit quality assurance practices in order to identify credit portfolio weaknesses as early as possible so any exposures that are discovered may be reduced.

The Company has certain lending procedures in place that are designed to maximize loan income within an acceptable level of risk. These procedures include the approval of lending policies and underwriting guidelines by the Board of Directors of each Bank, and separate policy, administrative and approval oversight by the Directors’ Loan Committee of MetroBank, and by the Directors’ Credit Committee of Metro United.  Additionally, MetroBank’s loan portfolio is reviewed by its internal loan review department, and Metro United's loan portfolio is reviewed by an external third-party company. These procedures also serve to timely identify changes in asset quality and to ensure proper recording and reporting of nonperforming assets.

Inherent in all lending is the risk of nonpayment. The types of collateral required, the terms of the loans and the underwriting practices discussed under each loan category below are all designed to minimize the risk of nonpayment. In addition, as further risk protection, the Banks rarely make loans at their respective legal lending limit. MetroBank generally does not make loans larger than $13 million to one borrower and Metro United generally does not make loans larger than $8 million to one borrower. Loans greater than the Banks’ lending limits are subject to participation with other financial institutions, including with each other. Loans originated by MetroBank are approved by the Chief Lending Officer, Chief Credit Officer, the Loan Committee or the Director’s Loan Committee based on the size of the loan relationship and its risk rating. Loans originated by Metro United are approved by the Management Credit Committee or Director’s Credit Committee except for certain consumer loans, which are approved under individual authority. Control systems and procedures are in place to ensure all loans are approved in accordance with credit policies.

Commercial and Industrial Loans. Generally, the Company’s commercial loans are underwritten on the basis of the borrower’s ability to service such debt as reflected by cash flow projections. Commercial loans are generally collateralized by business assets, which may include real estate, accounts receivable and inventory, certificates of deposit, securities, guarantees or other collateral. The Company also generally obtains personal guarantees from the principals of the business. Working capital loans are primarily collateralized by short-term assets, whereas term loans are primarily collateralized by long-term assets. As a result, commercial loans involve additional complexities, variables and risks and require more thorough underwriting and servicing than other types of loans. Indigenous to individuals in the Asian business community is the desire to own the building and land which house their businesses. Accordingly, while a loan may be principally driven and classified by the type of business operated, real estate is frequently the primary source of collateral.

Real Estate Mortgage - Commercial and Residential Mortgage Loans. The Company makes commercial mortgage loans to finance the purchase of real property, which generally consists of developed real estate. The Company’s commercial mortgage loans are collateralized by first liens on real estate. For MetroBank, these loans typically have variable rates and amortize over a 15 to 20 year period, with balloon payments due at the end of five to seven years. For Metro United, these loans have both variable and fixed rates and amortize over a 25 to 30 year period, with balloon payments due at the end of five to ten years. Payments on loans collateralized by such properties are dependent on the successful operation or management of the properties. Accordingly, repayment of these loans may be subject to adverse conditions in the real estate market or the economy to a greater extent than other types of loans. In underwriting commercial mortgage loans, consideration is given to the property’s historical cash flow, current and projected occupancy, location and physical condition. The underwriting analysis also includes credit checks, appraisals, environmental impact reports and a review of the financial condition of the borrower. The Company also originates two to seven year balloon residential mortgage loans with a 15 to 30-year amortization primarily collateralized by owner occupied residential properties, which are retained in the Company’s residential mortgage portfolio.

Real Estate Construction Loans. The Company makes loans to finance the construction of residential and non-residential properties. The majority of the Company’s residential construction loans in Texas are for single-family dwellings that are pre-sold or are under earnest money contracts. The Company also originates loans to finance the construction of commercial properties such as multi-family, office, industrial, warehouse and retail centers. Construction loans involve additional risks attributable to the fact that loan funds are advanced upon the security of a project under construction, and the project is of uncertain value prior to its completion. Because of uncertainties inherent in estimating construction costs, the market value of the completed project and the effects of governmental regulation on real property, it can be difficult to accurately evaluate the total funds required to complete a project and the related loan to value ratio. As a result of these uncertainties, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If the Company is forced to foreclose on a project prior to completion, there is no assurance that the Company will be able to recover the entire unpaid portion of the loan. In addition, the Company may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminable period of time. While the Company has underwriting procedures designed to identify what it believes to be acceptable levels of risks in construction lending, no assurance can be given that these procedures will prevent losses from the risks described above.  

Consumer Loans. The Company, through its subsidiary Metro United, offers a variety of loan products to retail customers through its branch network. Loans to retail customers include automobile loans, lines of credit and other personal loans. The terms of these loans typically range from 12 to 60 months depending on the nature of the collateral and the size of the loan.

 Loan review process. In addition to the Banks’ loan portfolio reviews by by external third-party companies, other ongoing reviews are performed by loan officers and involve the grading of each loan by its respective loan officer. Depending on the grade, a loan will be aggregated with other loans of similar grade and a loss factor is applied to the total loans in each group to establish the required level of allowance for loan losses. For both Banks, grades of 1-10 are applied to each loan, with loans graded 7-10 requiring the most allowance for loan losses. Factors utilized in the grading process include but are not limited to historical performance, payment status, collateral value and financial strength of the borrower. Oversight of the loan review process is the responsibility of the Chief Risk Officer. Differences of opinion are resolved among the Loan Officer, Chief Risk Officer and the Chief Credit Officer. See “Allowance for Loan Losses and Reserve for Unfunded Lending Commitments” for additional discussion on loan grades.

MetroBank’s credit department reports credit risk grade changes on a monthly basis to its management and the Board of Directors. MetroBank performs monthly and quarterly, and Metro United performs monthly concentration analyses based on industries, collateral types and business lines. Findings are reported monthly to the Directors’ Loan Committee of MetroBank and the Directors’ Credit Committee of Metro United and quarterly to the Board of Directors of each respective Bank.

In addition, the Company reviews the real estate values, and when necessary, orders new appraisals on loans collateralized by real estate when loans are renewed, prior to foreclosure and at other times as necessary, particularly in problem loan situations. In instances where updated appraisals reflect reduced collateral values, an evaluation of the borrower’s overall financial condition is made to determine the need, if any, for possible charge-offs or appropriate additions to the allowance for loan losses. The Company records other real estate at fair value at the time of acquisition less estimated costs to sell.

The following table presents the recorded investment in loans by credit risk profile, and which were updated as of the date indicated (in thousands):

As of September 30, 2013	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	425,498	$	673,267	$	8,607	$	4,362	$	1,111,734
7 - “Special Mention”/ “Watch”		2,851		17,714		—		—		20,565
8 - “Substandard”		11,252		44,299		—		—		55,551
9 -“Doubtful"		—		—		—		—		—
Total	$	439,601	$	735,280	$	8,607	$	4,362	$	1,187,850

As of December 31, 2012	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	366,571	$	611,159	$	5,163	$	7,401	$	990,294
7 - “Special Mention”/ “Watch”		4,393		14,593		—		—		18,986
8 - “Substandard”		12,941		76,728		4,529		—		94,198
9 -“Doubtful"		—		—		—		—		—
Total	$	383,905	$	702,480	$	9,692	$	7,401	$	1,103,478

There can be no assurance, however, that the Company’s loan portfolio will not become subject to increasing pressures from deteriorating borrowers’ financial condition due to general economic and other factors. While future deterioration in the loan portfolio is possible, management is continuing its risk assessment and resolution program. In addition, management is focusing its attention on minimizing the Company’s credit risk through diversification.

Nonperforming Assets

            The Company generally places a loan on nonaccrual status and ceases accruing interest when, in the opinion of management, full payment of loan principal or interest is in doubt. All loans past due 90 days are placed on nonaccrual status unless the loan is both well collateralized and in the process of collection. Cash payments received while a loan is classified as nonaccrual are recorded as a reduction of principal as long as significant doubt exists as to collection of the principal. Loans are restored to accrual status only when interest and principal payments are brought current and, in management’s judgment, future payments are reasonably assured.  In addition to nonaccrual loans, the Company evaluates on an ongoing basis other loans which are potential problem loans as to risk exposure in determining the adequacy of the allowance for loan losses.

A loan is considered impaired based on current information and events if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual basis for other loans.  The measurement of impaired loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the loan’s observable market price or based on the fair value of the collateral if the loan is collateral-dependent.

Loans are classified as a troubled debt restructuring in cases where a borrower is experiencing financial difficulty and the Banks make concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate and an extension of the maturity date(s). Generally, a nonaccrual loan that is restructured remains on nonaccrual for a minimum period of six months to demonstrate that the borrower can meet the restructured terms. Once performance has been demonstrated, the loan may be returned to performing status after the calendar year end.

The Company requires that nonperforming assets be monitored by the special assets department or senior lenders for MetroBank, and by the special asset team consisting of internal credit personnel with the assistance of third party consultants and attorneys for Metro United. All nonperforming assets are actively managed pursuant to the Company’s loan policy. Senior management is apprised on a weekly basis of the workout endeavors and provides assistance as necessary to determine the best strategy for problem loan resolution and maximizing repayment on nonperforming assets.

In addition to the Banks’ loan review process described in the preceding paragraphs, the Office of the Comptroller of the Currency (“OCC”) periodically examines and evaluates MetroBank, while the Federal Deposit Insurance Corporation (“FDIC”) and California Department of Business Oversight, Division of Financial Institutions (“CDBO”) periodically examine and evaluate Metro United. Based upon such examinations, the regulators may revalue the assets of the institution and require that it charge-off certain assets, establish specific reserves to compensate for the difference between the regulators-determined value and the book value of such assets or take other regulatory action designed to lessen the risk in the asset portfolio.

The following table provides an analysis of the age of the recorded investment in loans by portfolio segment at the date indicated (in thousands):

As of September 30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	1,974	$	414	$	1,178	$	3,566	$	436,035	$	439,601	$	—
Real estate mortgage:
Residential		482		—		124		606		39,468		40,074		—
Commercial		16,891		—		8,596		25,487		669,719		695,206		—
Real estate construction:
Residential		—		—		—		—		4,911		4,911		—
Commercial		—		—		—		—		3,696		3,696		—
Consumer and other		8		—		—		8		4,354		4,362		—
Total	$	19,355	$	414	$	9,898	$	29,667	$	1,158,183	$	1,187,850	$	—

As of December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	2,233	$	817	$	1,308	$	4,358	$	379,547	$	383,905	$	—
Real estate mortgage:
Residential		—		—		239		239		36,667		36,906		—
Commercial		114		3,817		18,141		22,072		643,502		665,574		—
Real estate construction:
Residential		—		—		1,426		1,426		984		2,410		—
Commercial		150		—		3,103		3,253		4,029		7,282		—
Consumer and other		—		—		—		—		7,401		7,401		—
Total	$	2,497	$	4,634	$	24,217	$	31,348	$	1,072,130	$	1,103,478	$	—

The following table presents the recorded investment in nonaccrual loans, including nonaccruing troubled debt restructurings, by portfolio segment at the dates indicated (in thousands):

Recorded investment in nonaccrual loans	September 30, 2013		December 31, 2012
Commercial and industrial	$	1,441	$	1,308
Real estate mortgage:
Residential		606		239
Commercial		12,969		22,501
Real estate construction:
Residential		—		1,426
Commercial		—		3,103
Total	$	15,016	$	28,577

Information on impaired loans, which includes nonaccrual loans and troubled debt restructurings, and the related specific allowance for loan losses on such loans at September 30, 2013 and December 31, 2012, is presented below (in thousands):

As of September 30, 2013	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,036
Real estate mortgage:
Residential		606		606		—		451
Commercial		12,700		12,713		—		14,204
Real estate construction:
Residential		—		—		—		713
Commercial		—		—		—		1,552
Impaired loans with an allowance
Commercial and industrial	$	—	$	—	$	—	$	216
Real estate mortgage:
Commercial		657		658		174		2,463
Total:
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,252
Real estate mortgage		13,963		13,977		174		17,118
Real estate construction		—		—		—		2,265

As of December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,287	$	1,289	$	—	$	5,162
Real estate mortgage:
Residential		239		239		—		213
Commercial		18,369		18,369		—		19,732
Real estate construction:
Residential		1,426		1,426		—		1,529
Commercial		3,103		3,103		—		3,171
Impaired loans with an allowance
Commercial and industrial	$	21	$	21	$	21	$	1,434
Real estate mortgage:
Commercial		4,533		4,535		503		6,836
Total:
Commercial and industrial	$	1,308	$	1,310	$	21	$	6,596
Real estate mortgage		23,141		23,143		503		26,781
Real estate construction		4,529		4,529		—		4,700

For the nine months ended September 30, 2013 and 2012, interest income of $28,000 and $139,000 was recognized on impaired loans, which consisted of nonaccrual loans that were paid in full and accruing troubled debt restructurings (“TDRs”). 

Troubled Debt Restructurings

Loans are classified as a TDR in cases where a borrower is experiencing financial difficulty and the Banks make concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate and/or an extension of the maturity date(s). Generally, a nonaccrual loan that is restructured remains on nonaccrual for a minimum period of six months to demonstrate that the borrower can meet the restructured terms. Once performance has been demonstrated the loan may be returned to performing status after the calendar year end.

As of September 30, 2013, there were no commitments to lend additional funds on loans that were modified as TDRs.   As of September 30, 2013, there were no defaults on any loans that were modified as TDRs during the preceding twelve months. There were no new TDRs for the three months ended September 30, 2013.

The following table presents the recorded investment in TDRs that occurred for the nine months ended September 30, 2013 (dollars in thousands):

	Nine Months Ended September 30, 2013
Troubled Debt Restructurings	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and industrial		1	$	229	$	208
Real estate mortgage:
Residential		1		696		482
Commercial		4		3,074		2,636

For the nine months ended September 30, 2013, TDR activity was as follows:

Prior to restructure, one participation purchased by MetroBank and one participation purchased by Metro United secured by a mixed use property containing residential condominium, retail space and subterranean parking were classified as nonaccrual. A 72% principal reduction was received by each Metro Bank and Metro United and the participations were restructured into two loan participations for each Bank with more than sufficient collateral coverage based on the fair value of the collateral. Since the loans were classified and on nonaccrual status both before and after restructuring, the modifications had an insignificant impact on the Company’s determination of the allowance for loan losses. In September 2013, payoffs totaling $211,000 were received by the Banks for one of the restructured loan participations.

Two land loans to the same borrower were restructured as TDRs.  The loans, previously on accrual status and paid according to contractual terms, had matured and were renewed without a principal reduction.  The loans were classified and on accrual status both before and after restructuring.  Prior to restructuring, the Company’s determination of the allowance for loan losses was based on Financial Accounting Standards Board Codification (“FASB Codification”) 450-20; after restructuring, the determination of the allowance for loan losses was based on FASB Codification 310-10-35 and therefore insignificantly reduced the allowance for loan losses.

One commercial retail loan was restructured by extending with no principal reduction at below market terms. The loan was classified and on accrual status before the restructuring and reclassified to nonaccrual status after the restructuring. Prior to restructuring, the Company’s determination of the allowance for loan losses was based on FASB Codification 450-20; after restructuring, the determination of the allowance for loan losses was based on FASB Codification 310-10-35 and therefore insignificantly reduced the allowance for loan losses.

One sufficiently collateralized land loan was previously on nonaccrual status and reported as an impaired loan prior to restructuring. The loan was restructured with no principal reduction at below market terms. Since the loan was classified and on nonaccrual status both before and after restructuring, the modification did not impact the Company’s determination of the allowance for loan losses.

Allowance for Loan Losses and Reserve for Unfunded Lending Commitments

The allowance for loan losses provides for the risk of losses inherent in the lending process and the Company allocates the allowance for loan losses according to management’s assessments of risk inherent in the portfolio. The allowance for loan losses is increased by provisions charged against current earnings and is reduced by net charge-offs. Loans are charged off when they are deemed to be uncollectible in whole or in part. Recoveries are recorded when cash payments are received. In developing the assessment, the Company relies on estimates and exercises judgment regarding matters where the ultimate outcome is uncertain. Circumstances may change and future assessments of credit risk may yield materially different results, resulting in an increase or decrease in the allowance for credit losses.

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments and is maintained at levels that the Company believes are adequate to absorb probable losses inherent in the loan portfolio and unfunded lending commitments as of the date of the financial statements. The Company employs a systematic methodology for determining the allowance for credit losses that consists of four components: (1) a formula-based general reserve derived from  historical average losses by loan grade, (2) specific reserves on larger impaired individual credits that are based on the difference between the current loan balance and the loan’s collateral value, observable market price, or discounted present value, (3) a qualitative component that reflects current market conditions and other factors precedent to losses different from historical averages and (4) a reserve for unfunded lending commitments.

In setting the qualitative reserve portion of the allowance for loan losses, the factors the Company may consider include, but are not limited to, concentrations of credit, common characteristics of known problem loans, potential problem loans and other loans that exhibit weaknesses or deterioration, the general economic environment in the Company’s markets as well as the national economy, particularly the real estate markets, changes in value of the collateral securing loans, results of portfolio stress tests, and changes in lending processes, procedures and personnel. After the aforementioned assessment of the loan portfolio, the general economic environment and other relevant factors, management determines the appropriate allowance for loan loss level and makes the provision necessary to achieve that level. This methodology is consistently followed so that the level of the allowance for loan losses is reevaluated in response to changes in circumstances, economic conditions or other factors on an ongoing basis.

The Company follows a loan review program to evaluate the credit risk in the loan portfolio as discussed under “Nonperforming Assets.” The Company maintains an internally classified loan list which, along with the delinquency list of loans, helps management assess the overall quality of the loan portfolio and the adequacy of the allowance for loan losses. Loans classified as “substandard” are risk-rated as grade 8, and are those loans with well-defined weaknesses such as a highly-leveraged position, unfavorable financial ratios, uncertain repayment sources or poor financial condition, which may jeopardize recoverability of the debt. Loans classified as “doubtful” are risk-rated as grade 9, and are those loans which have characteristics similar to substandard loans but with an increased risk that a loss may occur, or at least a portion of the loan may require a charge-off if liquidated at present. Although loans classified as substandard do not duplicate loans classified as doubtful, both substandard and doubtful loans include some loans that are delinquent at least 30 days or on nonaccrual status. Loans classified as “loss” are risk-rated as grade 10 and are those loans which are charged off.

In addition to the internally classified loan list and delinquency list of loans, the Company maintains a separate “watch list” for loans risk-rated as grade 7, which further aids the Company in monitoring loan portfolios. Watch list loans show potential weaknesses where the present status portrays one or more deficiencies that require attention in the short-term or where pertinent ratios of the loan account have weakened to a point where more frequent monitoring is warranted. These loans do not have all of the characteristics of a classified loan (substandard or doubtful) but do show weakened elements compared with those of a satisfactory credit. The Company reviews these loans to assist in assessing the adequacy of the allowance for loan losses.

Policies and procedures have been developed to assess the adequacy of the allowance for loan losses and the reserve for unfunded lending commitments that include the monitoring of qualitative and quantitative trends described above. Management of both Banks review and approve their respective allowance for loan losses and the reserve for unfunded lending commitments monthly and perform a comprehensive analysis quarterly, which is also presented for approval by each Bank’s Board of Directors. The allowance for credit losses is also subject to federal and California State banking regulations. The Banks’ primary regulators conduct periodic examinations of the allowance for credit losses and make assessments regarding its adequacy and the methodology used in its determination.

The Company maintains a reserve for unfunded commitments to provide for the risk of loss inherent in its unfunded lending related commitments. The process used in determining the reserve is consistent with the process used for the allowance for loan losses discussed above.

The following table presents the allowance for loan losses and recorded investment in loans by portfolio segment at the dates indicated (in thousands):

As of and for the three months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,523		$	13,176		$	75		$	70		$	988	$	21,832
(Reduction in) provision for loan losses		(31	)		(918	)		72			(11	)		233		(655	)
Charge-offs		(450	)		(41	)		(17	)		(9	)		—		(517	)
Recoveries		124			14			—			2			—		140
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221	$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—				$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52				$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362				$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—				$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362				$	1,172,446

As of and for the three months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	9,146		$	16,151		$	185		$	106		$	1,723		$	27,311
(Reduction in) provision for loan losses		922			(574	)		(6	)		50			(692	)		(300	)
Charge-offs		(1,464	)		(130	)		—			(31	)		—			(1,625	)
Recoveries		32			118			—			6			—			156
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031		$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—					$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131					$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723					$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1					$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722					$	1,059,769

As of and for the nine months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	8,255		$	14,748		$	216		$	143		$	1,230		$	24,592
(Reduction in) provision for loan losses		(45	)		(923	)		(95	)		(58	)		(9	)		(1,130	)
Charge-offs		(1,336	)		(1,685	)		(26	)		(42	)		—			(3,089	)
Recoveries		292			91			35			9			—			427
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221		$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—					$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52					$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362					$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—					$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362					$	1,172,446

As of and for the nine months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,966		$	19,213		$	320		$	137		$	685	$	28,321
(Reduction in) provision for loan losses		2,531			(3,166	)		523			66			346		300
Charge-offs		(2,258	)		(1,415	)		(683	)		(92	)		—		(4,448	)
Recoveries		397			933			19			20			—		1,369
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031	$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—				$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131				$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723				$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1				$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722				$	1,059,769