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Allowance for Loan Losses
 6 Months Ended
Jun. 30, 2012
Allowance for Loan Losses [Abstract]  
Allowance for Loan Losses

Note 5 – Allowance for Loan Losses

The following tables summarize the activity in the allowance for loan losses, and ending balance of loans, net of unearned fees for the periods indicated.

 

                                                                                 
    Allowance for Loan Losses – Three months ended June 30, 2012  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consum.     C&I     Resid.     Comm.     Total  

Beginning balance

   $ 3,157     $ 9,981     $ 22,032     $ 1,267     $ 575     $ 600     $ 4,550     $ 1,672     $ 1,618     $ 45,452  

Charge-offs

     (325 )      (363 )      (2,478 )      (117 )      (31 )      (309 )      (296 )      (201 )      (68 )      (4,188 ) 

Recoveries

     27       782       84       6       42       187       86       —         —         1,214  

Provision

     599       (834 )      1,964       3       (153 )      143       1,354       208       87       3,371  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 3,458     $ 9,566     $ 21,602     $ 1,159     $ 433     $ 621     $ 5,694     $ 1,679     $ 1,637     $ 45,849  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   
    Allowance for Loan Losses – Six months ended June 30, 2012  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consum.     C&I     Resid.     Comm.     Total  

Beginning balance

   $ 2,404     $ 13,217     $ 18,258     $ 1,101     $ 215     $ 932     $ 6,545     $ 1,817     $ 1,425     $ 45,914  

Charge-offs

     (548 )      (1,668 )      (5,103 )      (158 )      (71 )      (648 )      (577 )      (269 )      (68 )      (9,110 ) 

Recoveries

     27       818       147       9       99       442       136       —         —         1,678  

Provision

     1,575       (2,801 )      8,300       207       190       (105 )      (410 )      131       280       7,367  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 3,458     $ 9,566     $ 21,602     $ 1,159     $ 433     $ 621     $ 5,694     $ 1,679     $ 1,637     $ 45,849  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance:

                                                                                

Individ. evaluated for impairment

   $ 551     $ 781     $ 1,880     $ 42     $ 16     $ 32     $ 1,502     $ 201     $ 1,035     $ 6,040  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans pooled for evaluation

   $ 2,536     $ 8,531     $ 18,443     $ 1,038     $ 417     $ 589     $ 2,533     $ 540     $ 95     $ 34,722  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans acquired with deteriorated credit quality

   $ 371     $ 254     $ 1,279     $ 79       —         —       $ 1,659     $ 938     $ 507     $ 5,087  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                                                 
    Loans, net of unearned fees – As of June 30, 2012  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consum.     C&I     Resid.     Comm.     Total  

Ending balance:

                                                                                

Total loans

   $ 134,015     $ 850,132     $ 346,917     $ 14,274     $ 6,496     $ 25,561     $ 139,733     $ 19,259     $ 16,095     $ 1,552,482  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Individ. evaluated for impairment

   $ 9,765     $ 69,488     $ 9,401     $ 546     $ 319     $ 178     $ 10,152     $ 4,407     $ 7,009     $ 111,265  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans pooled for evaluation

   $ 118,184     $ 748,232     $ 323,566     $ 13,523     $ 6,177     $ 25,344     $ 118,194     $ 6,386     $ 5,378     $ 1,364,984  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans acquired with deteriorated credit quality

   $ 6,066     $ 32,412     $ 13,950     $ 205       —       $ 39     $ 11,387     $ 8,466     $ 3,708     $ 76,233  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The following tables summarize the activity in the allowance for loan losses, and ending balance of loans, net of unearned fees for the periods indicated.

 

                                                                                 
    Allowance for Loan Losses – Three months ended June 30, 2011  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consum.     C&I     Resid.     Comm.     Total  

Beginning balance

   $ 3,544     $ 12,027     $ 16,296     $ 911     $ 481     $ 704     $ 6,967     $ 1,395     $ 899     $ 43,224  

Charge-offs

     (321 )      (1,621 )      (1,928 )      (264 )      (100 )      (304 )      (202 )      (395 )      (95 )      (5,230 ) 

Recoveries

     —         38       86       —         56       165       41       20       1       407  

Provision

     (702 )      2,975       2,026       524       (53 )      257       6       677       (149 )      5,561  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 2,521     $ 13,419     $ 16,480     $ 1,171     $ 384     $ 822     $ 6,812     $ 1,697     $ 656     $ 43,962  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   
    Allowance for Loan Losses – Six months ended June 30, 2011  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consum.     C&I     Resid.     Comm.     Total  

Beginning balance

   $ 3,007     $ 12,700     $ 15,054     $ 795     $ 1,229     $ 701     $ 5,991     $ 1,824     $ 1,270     $ 42,571  

Charge-offs

     (1,446 )      (1,989 )      (5,529 )      (264 )      (235 )      (533 )      (1,758 )      (430 )      (95 )      (12,279 ) 

Recoveries

     112       66       247       2       183       374       62       22       40       1,108  

Provision

     848       2,642       6,708       638       (793 )      280       2,517       281       (559 )      12,562  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 2,521     $ 13,419     $ 16,480     $ 1,171     $ 384     $ 822     $ 6,812     $ 1,697     $ 656     $ 43,962  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance:

                                                                                

Individ. evaluated for impairment

   $ 955     $ 2,181     $ 1,408     $ 129     $ 113     $ 22     $ 206     $ 286     $ 509     $ 5,809  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans pooled for evaluation

   $ 1,552     $ 11,224     $ 14,629     $ 1,042     $ 271     $ 800     $ 4,968     $ 1,150     $ 147     $ 35,783  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans acquired with deteriorated credit quality

   $ 14     $ 14     $ 443       —         —         —       $ 1,638     $ 261       —       $ 2,370  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                                                 
    Loans, net of unearned fees – As of June 30, 2011  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consum.     C&I     Resid.     Comm.     Total  

Ending balance:

                                                                                

Total loans

   $ 127,083     $ 701,674     $ 332,532     $ 14,905     $ 16,767     $ 18,660     $ 140,531     $ 22,479     $ 21,431     $ 1,396,062  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Individ. evaluated for impairment

   $ 11,292     $ 65,734     $ 8,271     $ 492     $ 936     $ 93     $ 5,385     $ 6,250     $ 7,329     $ 105,782  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans pooled for evaluation

   $ 109,393     $ 611,279     $ 317,959     $ 14,413     $ 15,831     $ 18,567     $ 127,109     $ 11,784     $ 14,102     $ 1,240,437  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans acquired with deteriorated credit quality

   $ 6,398     $ 24,661     $ 6,302       —         —         —       $ 8,037     $ 4,445       —       $ 49,843  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio.

The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows:

 

  •  

Pass – This grade represents loans ranging from acceptable to very little or no credit risk. These loans typically meet most if not all policy standards in regard to: loan amount as a percentage of collateral value, debt service coverage, profitability, leverage, and working capital.

 

  •  

Special Mention – This grade represents “Other Assets Especially Mentioned” in accordance with regulatory guidelines and includes loans that display some potential weaknesses which, if left unaddressed, may result in deterioration of the repayment prospects for the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention.

 

  •  

Substandard – This grade represents “Substandard” loans in accordance with regulatory guidelines. Loans within this rating typically exhibit weaknesses that are well defined to the point that repayment is jeopardized. Loss potential is, however, not necessarily evident. The underlying collateral supporting the credit appears to have sufficient value to protect the Company from loss of principal and accrued interest, or the loan has been written down to the point where this is true. There is a definite need for a well defined workout/rehabilitation program.

 

  •  

Doubtful – This grade represents “Doubtful” loans in accordance with regulatory guidelines. An asset classified as Doubtful has all the weaknesses inherent in a loan classified 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. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and financing plans.

 

  •  

Loss – This grade represents “Loss” loans in accordance with regulatory guidelines. A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan, even though some recovery may be affected in the future. The portion of the loan that is graded loss should be charged off no later than the end of the quarter in which the loss is identified.

The following tables present ending loan balances by loan category and risk grade as of the dates indicated:

 

                                                                                 
    Credit Quality Indicators – As of June 30, 2012  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect Consumer     C&I     Resid.     Comm.     Total  

Originated loans:

                                                                                

Pass

   $ 104,504     $ 640,678     $ 295,238     $ 12,346     $ 5,296     $ 21,891     $ 113,819     $ 5,969     $ 5,067     $ 1,204,808  

Special mention

     1,951       28,990       7,341       653       671       645       4,824       41       543       45,659  

Substandard

     13,050       71,114       12,394       527       529       134       8,480       4,783       6,777       117,788  

Loss

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Originated loans

   $ 119,505     $ 740,782     $ 314,973     $ 13,526     $ 6,496     $ 22,670     $ 127,123     $ 10,793     $ 12,387     $ 1,368,255  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

PNCI loans:

                                                                                

Pass

   $ 8,047     $ 69,024     $ 16,798     $ 543       —       $ 2,686     $ 1,223       —         —       $ 98,321  

Special mention

     —         4,204       846       —         —         58       —         —         —         5,108  

Substandard

     397       3,710       351       —         —         108       —         —         —         4,566  

Loss

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total PNCI loans

   $ 8,444     $ 76,938     $ 17,995     $ 543       —       $ 2,852     $ 1,223       —         —       $ 107,995  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

PCI loans

   $ 6,066     $ 32,412     $ 13,949     $ 205       —       $ 39     $ 11,387     $ 8,466     $ 3,708     $ 76,232  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans

   $ 134,015     $ 850,132     $ 346,917     $ 14,274     $ 6,496     $ 25,561     $ 139,733     $ 19,259     $ 16,095     $ 1,552,482  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                                                 
    Credit Quality Indicators – As of December 31, 2011  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

Originated loans:

                                                                                

Pass

   $ 103,611     $ 574,167     $ 305,290     $ 13,478     $ 9,686     $ 19,871     $ 107,877     $ 6,872     $ 5,387     $ 1,146,239  

Special mention

     1,020       46,518       1,295       —         33       10       6,709       903       430       56,918  

Substandard

     13,689       78,997       15,249       842       1,102       389       8,900       6,133       6,927       132,228  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Originated loans

   $ 118,320     $ 699,682     $ 321,834     $ 14,320     $ 10,821     $ 20,270     $ 123,486     $ 13,908     $ 12,744     $ 1,335,385  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

PNCI loans:

                                                                                

Pass

   $ 14,576     $ 83,735     $ 20,053     $ 367       —       $ 3,034     $ 1,707       —         —       $ 123,472  

Special mention

     —         9,693       548       —         —         4       —         —         —         10,245  

Substandard

     174       —         301       —         —         3       98       —         —         576  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total PNCI loans

   $ 14,750     $ 93,428     $ 20,902     $ 367       —       $ 3,041     $ 1,805       —         —       $ 134,293  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

PCI loans

   $ 6,516     $ 33,226     $ 14,569     $ 157       —       $ 49     $ 13,840     $ 8,214     $ 4,783     $ 81,354  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans

   $ 139,586     $ 826,336     $ 357,305     $ 14,844     $ 10,821     $ 23,360     $ 139,131     $ 22,122     $ 17,527     $ 1,551,032  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Consumer loans, whether unsecured or secured by real estate, automobiles, or other personal property, are primarily susceptible to three primary risks; non-payment due to income loss, over-extension of credit and, when the borrower is unable to pay, shortfall in collateral value. Typically non-payment is due to loss of job and will follow general economic trends in the marketplace driven primarily by rises in the unemployment rate. Loss of collateral value can be due to market demand shifts, damage to collateral itself or a combination of the two.

Problem consumer loans are generally identified by payment history of the borrower (delinquency) or significant changes in the borrower’s credit rating. Current credit scores are obtained for all consumer loans on a quarterly basis, and risk ratings are adjusted appropriately. The Bank manages its consumer loan portfolios by monitoring delinquency and contacting borrowers to encourage repayment, suggest modifications if appropriate, and, when continued scheduled payments become unrealistic, initiate repossession or foreclosure through appropriate channels. Collateral values may be determined by appraisals obtained through Bank approved, licensed appraisers, qualified independent third parties, public value information (blue book values for autos), sales invoices, or other appropriate means. Appropriate valuations are obtained at initiation of the credit and periodically (every 3-12 months depending on collateral type) once repayment is questionable and the loan has been classified.

Commercial real estate loans generally fall into two categories, owner-occupied and non-owner occupied. Loans secured by owner occupied real estate are primarily susceptible to changes in the business conditions of the related business. This may be driven by, among other things, industry changes, geographic business changes, changes in the individual fortunes of the business owner, and general economic conditions and changes in business cycles. These same risks apply to commercial loans whether secured by equipment or other personal property or unsecured. Losses on loans secured by owner occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral. When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default. Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often these shifts are a result of changes in general economic or market conditions or overbuilding and resultant over-supply. Losses are dependent on value of underlying collateral at the time of default. Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs.

Construction loans, whether owner occupied or non-owner occupied commercial real estate loans or residential development loans, are not only susceptible to the related risks described above but the added risks of construction itself including cost over-runs, mismanagement of the project, or lack of demand or market changes experienced at time of completion. Again, losses are primarily related to underlying collateral value and changes therein as described above.

Problem commercial loans are generally identified by periodic review of financial information which may include financial statements, tax returns, rent rolls and payment history of the borrower (delinquency). Based on this information the Bank may decide to take any of several courses of action including demand for repayment, additional collateral or guarantors, and, when repayment becomes unlikely through borrower’s income and cash flow, repossession or foreclosure of the underlying collateral.

Collateral values may be determined by appraisals obtained through Bank approved, licensed appraisers, qualified independent third parties, public value information (blue book values for autos), sales invoices, or other appropriate means. Appropriate valuations are obtained at initiation of the credit and periodically (every 3-12 months depending on collateral type) once repayment is questionable and the loan has been classified.

Once a loan becomes delinquent and repayment becomes questionable, a Bank collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Bank will estimate its probable loss, using a recent valuation as appropriate to the underlying collateral less estimated costs of sale, and charge the loan down to the estimated net realizable amount. Depending on the length of time until ultimate collection, the Bank may revalue the underlying collateral and take additional charge-offs as warranted. Revaluations may occur as often as every 3-12 months depending on the underlying collateral and volatility of values. Final charge-offs or recoveries are taken when collateral is liquidated and actual loss is known. Unpaid balances on loans after or during collection and liquidation may also be pursued through lawsuit and attachment of wages or judgment liens on borrower’s other assets.

The following table shows the ending balance of current, past due, and nonaccrual originated loans by loan category as of the date indicated:

 

                                                                                 
    Analysis of Past Due and Nonaccrual Originated Loans – As of June 30, 2012  
(In thousands)   RE Mortgage     Home Equity     Auto     Other           Construction        
  Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

Originated loan balance:

                                                                                

Past due:

                                                                                

30-59 Days

   $ 322     $ 1,559     $ 2,948     $ 142     $ 101     $ 99     $ 677       —       $ 962     $ 6,810  

60-89 Days

     911       4,106       1,604       29       9       3       259     $ 96       90       7,107  

> 90 Days

     2,213       11,803       2,962       268       100       9       7,285       257       38       24,935  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total past due

     3,446       17,468       7,514       439       210       111       8,221       353       1,090       38,852  

Current

     116,059       723,314       307,459       13,087       6,286       22,559       118,902       10,440       11,297       1,329,403  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Originated loans

   $ 119,505     $ 740,782     $ 314,973     $ 13,526     $ 6,496     $ 22,670     $ 127,123     $ 10,793     $ 12,387     $ 1,368,255  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

> 90 Days and still accruing

     —         —         —         —         —         —       $ 893       —         —       $ 893  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Nonaccrual loans

   $ 7,726     $ 40,120     $ 7,771     $ 483     $ 280     $ 72     $ 7,482     $ 4,354     $ 567     $ 68,855  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
 
The following table shows the ending balance of current, past due, and nonaccrual PNCI loans by loan category as of the date indicated:  
   
    Analysis of Past Due and Nonaccrual PNCI Loans – As of June 30, 2012  
(In thousands)   RE Mortgage     Home Equity     Auto     Other           Construction        
  Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

PNCI loan balance:

                                                                                

Past due:

                                                                                

30-59 Days

   $ 197     $ 315       —         —         —       $ 1       —         —         —       $ 513  

60-89 Days

     —         213     $ 132       —         —         —         —         —         —         345  

> 90 Days

     —         166       —         —         —         31       —         —         —         197  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total past due

     197       694       132       —         —         32       —         —         —         1,055  

Current

     8,247       76,244       17,863     $ 543       —         2,820     $ 1,223       —         —         106,940  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total PNCI loans

   $ 8,444     $ 76,938     $ 17,995     $ 543       —       $ 2,852     $ 1,223       —         —       $ 107,995  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

> 90 Days and still accruing

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Nonaccrual loans

   $ 75     $ 2,452     $ 420       —         —       $ 77       —         —         —       $ 3,024  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The following table shows the ending balance of current, past due, and nonaccrual originated loans by loan category as of the date indicated:

 

                                                                                 
    Analysis of Past Due and Nonaccrual Originated Loans – As of December 31, 2011  
(In thousands)   RE Mortgage     Home Equity     Auto     Other           Construction        
  Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

Originated loan balance:

                                                                                

Past due:

                                                                                

30-59 Days

   $ 1,715     $ 7,509     $ 2,586     $ 52     $ 181     $ 46     $ 683     $ 921       —       $ 13,693  

60-89 Days

     750       1,171       2,629       281       56       153       1,334       92       —         6,466  

> 90 Days

     3,279       9,892       3,129       114       130       5       4,929       2,088       —         23,566  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total past due

     5,744       18,572       8,344       447       367       204       6,946       3,101       —         43,725  

Current

     112,576       681,110       313,490       13,873       10,454       20,066       116,540       10,807     $ 12,744       1,291,660  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Originated loans

   $ 118,320     $ 699,682     $ 321,834     $ 14,320     $ 10,821     $ 20,270     $ 123,486     $ 13,908     $ 12,744     $ 1,335,385  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

> 90 Days and still accruing

     —       $ 500       —         —         —         —         —         —         —       $ 500  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Nonaccrual loans

   $ 8,525     $ 43,765     $ 8,307     $ 509     $ 509     $ 109     $ 7,257     $ 5,627     $ 667     $ 75,275  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

The following table shows the ending balance of current, past due, and nonaccrual PNCI loans by loan category as of the date indicated:

 

                                                                                 
    Analysis of Past Due and Nonaccrual PNCI Loans – As of December 31, 2011  
(In thousands)   RE Mortgage     Home Equity     Auto     Other           Construction        
  Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

PNCI loan balance:

                                                                                

Past due:

                                                                                

30-59 Days

     —       $ 118     $ 63       —         —         —         —         —         —       $ 181  

60-89 Days

   $ 76       —         39       —         —         —         —         —         —         115  

> 90 Days

     —         420       14       —         —         —         —         —         —         434  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total past due

     76       538       116       —         —         —         —         —         —         730  

Current

     14,674       92,890       20,786     $ 367       —       $ 3,041     $ 1,805       —         —         133,563  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total PNCI loans

   $ 14,750     $ 93,428     $ 20,902     $ 367       —       $ 3,041     $ 1,805       —         —       $ 134,293  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

> 90 Days and still accruing

     —       $ 420       —         —         —         —         —         —         —       $ 420  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Nonaccrual loans

     —         —       $ 110       —         —         —         —         —         —       $ 110  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Impaired originated loans are those where management has concluded that it is probable that the borrower will be unable to pay all amounts due under the contractual terms. The following tables show the recorded investment (financial statement balance), unpaid principal balance, average recorded investment, and interest income recognized for impaired Originated and PNCI loans, segregated by those with no related allowance recorded and those with an allowance recorded for the periods indicated.

 

                                                                                 
    Impaired Originated Loans – As of June 30, 2012  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

With no related allowance recorded:

                                                                                

Recorded investment

   $ 6,838     $ 61,957     $ 4,271     $ 446     $ 241     $ 50     $ 8,285     $ 2,828     $ 486     $ 85,402  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

   $ 9,141     $ 71,721     $ 7,526     $ 1,100     $ 443     $ 74     $ 8,997     $ 6,756     $ 661     $ 106,419  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

   $ 7,226     $ 53,415     $ 4,291     $ 404     $ 395     $ 42     $ 6,538     $ 3,665     $ 3,479     $ 79,455  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

   $ 43     $ 793     $ 11     $ 3     $ 2       —       $ 63       —       $ 7     $ 922  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                                                                                

Recorded investment

   $ 2,691     $ 4,687     $ 4,671     $ 100     $ 78     $ 22     $ 1,867     $ 1,579     $ 6,523     $ 22,218  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

   $ 3,237     $ 5,164     $ 5,323     $ 166     $ 101     $ 24     $ 1,904     $ 2,725     $ 6,790     $ 25,434  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Related allowance

   $ 528     $ 782     $ 1,822     $ 42     $ 16     $ 5     $ 1,502     $ 201     $ 1,035     $ 5,933  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

   $ 3,185     $ 12,774     $ 4,316     $ 115     $ 233     $ 41     $ 1,231     $ 1,664     $ 3,690     $ 27,249  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

   $ 13     $ 75     $ 32       —         —         —       $ 38     $ 2     $ 189     $ 349  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   
    Impaired PNCI Loans – As of June 30, 2012  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

With no related allowance recorded:

                                                                                

Recorded investment

     —       $ 2,844     $ 381       —         —       $ 45       —         —         —       $ 3,270  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

     —       $ 4,814     $ 427       —         —       $ 48       —         —         —       $ 5,289  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

     —       $ 1,422     $ 191       —         —       $ 23       —         —         —       $ 1,636  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

     —       $ 121     $ 2       —         —         —         —         —         —       $ 123  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                                                                                

Recorded investment

   $ 236       —       $ 78       —         —       $ 61       —         —         —       $ 375  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

   $ 240       —       $ 82       —         —       $ 130       —         —         —       $ 452  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Related allowance

   $ 23       —       $ 57       —         —       $ 27       —         —         —       $ 107  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

   $ 118       —       $ 39       —         —       $ 31       —         —         —       $ 188  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

   $ 4       —       $ 2       —         —       $ 1       —         —         —       $ 7  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

The following tables show the recorded investment (financial statement balance), unpaid principal balance, average recorded investment, and interest income recognized for impaired Originated and PNCI loans, segregated by those with no related allowance recorded and those with an allowance recorded for the periods indicated.

 

                                                                                 
    Impaired Originated Loans – As of December 31, 2011  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

With no related allowance recorded:

                                                                                

Recorded investment

   $ 6,921     $ 61,205     $ 5,101     $ 224     $ 424     $ 39     $ 8,473     $ 1,809     $ 571     $ 84,767  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

   $ 8,663     $ 72,408     $ 8,519     $ 528     $ 777     $ 56     $ 9,229     $ 2,857     $ 916     $ 103,953  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

   $ 6,557     $ 53,346     $ 5,228     $ 458     $ 569     $ 44     $ 6,687     $ 3,942     $ 3,590     $ 80,421  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

   $ 58     $ 2,235     $ 99     $ 7     $ 15     $ 2     $ 381       —       $ 4     $ 2,801  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                                                                                

Recorded investment

   $ 3,246     $ 10,688     $ 4,177     $ 350     $ 147     $ 70     $ 964     $ 3,818     $ 6,328     $ 29,788  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

   $ 3,760     $ 11,094     $ 4,977     $ 666     $ 193     $ 75     $ 1,040     $ 8,698     $ 6,330     $ 36,833  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Related allowance

   $ 460     $ 1,613     $ 2,365     $ 73     $ 29     $ 24     $ 200     $ 258     $ 971     $ 5,993  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

   $ 4,611     $ 10,019     $ 4,770     $ 215     $ 407     $ 52     $ 1,023     $ 2,334     $ 3,578     $ 27,009  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

   $ 77     $ 588     $ 122     $ 3     $ 2     $ 2     $ 36     $ (16 )    $ 387     $ 1,201  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   
    Impaired PNCI Loans – As of December 31, 2011  
    RE Mortgage     Home Equity     Auto     Other           Construction        
(In thousands)   Resid.     Comm.     Lines     Loans     Indirect     Consumer     C&I     Resid.     Comm.     Total  

With no related allowance recorded:

                                                                                

Recorded investment

     —         —       $ 110     $ 87       —         —       $ 89       —         —       $ 286  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

     —         —       $ 126     $ 89       —         —       $ 98       —         —       $ 313  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

     —         —       $ 55     $ 44       —         —       $ 45       —         —       $ 144  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

     —         —       $ 5     $ 2       —         —       $ 3       —         —       $ 10  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                                                                                

Recorded investment

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Related allowance

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

     —         —         —         —         —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

At June 30, 2012, $65,105,000 of Originated loans were TDR and classified as impaired. The Company had obligations to lend $48,000 of additional funds on these TDR as of June 30, 2012. At June 30, 2012, $622,000 of PNCI loans were TDR and classified as impaired. The Company had no obligations to lend additional funds on these TDR as of June 30, 2012.

At December 31, 2011, $66,160,000 of Originated loans were TDR and classified as impaired. The Company had obligations to lend $258,000 of additional funds on these TDR as of December 31, 2011. At December 31, 2011, $176,000 of PNCI loans were TDR and classified as impaired. The Company had no obligations to lend additional funds on these TDR as of December 31, 2011.

 

The following tables show the recorded investment (financial statement balance), unpaid principal balance, average recorded investment, and interest income recognized for impaired Originated loans, segregated by those with no related allowance recorded and those with an allowance recorded for the periods indicated.

 

                                                                                 
    Impaired Originated Loans – As June 30, 2011  
    RE Mortgage     Home Equity     Auto
Indirect		     Other
Consum.		     C&I     Construction     Total  
(in thousands)   Resid.     Comm.     Lines     Loans           Resid.     Comm.    

With no related allowance recorded:

                                                                                

Recorded investment

   $ 7,613     $ 44,873     $ 4,311     $ 362     $ 548     $ 34     $ 4,791     $ 4,501     $ 6,472     $ 73,505  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

   $ 10,165     $ 51,637     $ 7,009     $ 783     $ 1,005     $ 37     $ 5,815     $ 9,280     $ 6,666     $ 92,397  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

   $ 6,903     $ 45,180     $ 4,833     $ 527     $ 631     $ 42     $ 4,846     $ 5,288     $ 6,541     $ 74,791  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

   $ 13     $ 814     $ 4     $ 3     $ 6     $ 1     $ 57     $ 2     $ 189     $ 1,089  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                                                                                

Recorded investment

   $ 3,679     $ 20,861     $ 3,960     $ 130     $ 388     $ 59     $ 594     $ 1,749     $ 857     $ 32,277  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Unpaid principal

   $ 4,069     $ 23,516     $ 4,603     $ 295     $ 476     $ 63     $ 743     $ 2,706     $ 906     $ 37,377  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Related allowance

   $ 955     $ 2,181     $ 1,408     $ 129     $ 113     $ 22     $ 206     $ 286     $ 509     $ 5,809  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average recorded Investment

   $ 4,827     $ 15,105     $ 4,661     $ 105     $ 528     $ 47     $ 838     $ 1,300     $ 843     $ 28,254  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest income Recognized

   $ 17     $ 408     $ 24     $ 1     $ 2       —       $ 8     ($ 18 )    $ 6     $ 448  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

At June 30, 2011, $50,337,000 of originated loans were TDR and classified as impaired. The Company did not have any obligations to lend additional funds on these loans as of June 30, 2011. At June 30, 2011, the Company had no PNCI loans.

The following tables show certain information regarding Troubled Debt Restructurings (TDRs) that occurred during the period indicated:

 

                                                                                 
    TDR Information for the Three Months Ended June 30, 2012  
    RE Mortgage     Home Equity    

Auto

Indirect

    

Other

Consum.

    

C&I

     Construction    

Total

  
(In thousands)   Resid.     Comm.     Lines     Loans           Resid.     Comm.    

Number

     1       3       6       —         —         —         —         —         —         10  

Pre-modification out-standing principal balance

   $ 71     $ 1,050     $ 817       —         —         —         —         —         —       $ 1,938  

Post-modification out-standing principal balance

   $ 72     $ 1,050     $ 857       —         —         —         —         —         —       $ 1,979  

Financial Impact due to troubled debt restructure taken as additional provision

   $ (11 )    $ 57     $ 44       —         —         —         —         —         —       $ 90  

Number that defaulted during the period

     —         3       1       1       —         —         2       1       —         8  

Recorded investment of TDRs that defaulted during the period

     —       $ 1,046     $ 274     $ 46       —         —       $ 1,124     $ 97       —       $ 2,587  

Financial Impact due to the default of previous troubled debt restructure taken as charge-offs or additional provisions

     —         —       $ (13 )    $ (1 )      —         —       $ 50       —         —       $ 36  

 

The following tables show certain information regarding Troubled Debt Restructurings (TDRs) that occurred during the period indicated:

 

                                                                                 
    TDR Information for the Three Months Ended March 31, 2012  
    RE Mortgage     Home Equity    

Auto

Indirect

    

Other

Consum.

    

C&I

     Construction    

Total

  
(In thousands)   Resid.     Comm.     Lines     Loans           Resid.     Comm.    

Number

     2       7       2       —         —         1       1       2       —         15  

Pre-modification out-standing principal balance

   $ 650     $ 1,561     $ 436       —         —       $ 38     $ 249     $ 230       —       $ 3,164  

Post-modification out-standing principal balance

   $ 669     $ 1,523     $ 464       —         —       $ 38     $ 249     $ 232       —       $ 3,175  

Financial Impact due to troubled debt restructure taken as additional provision

     —         —       $ 16       —         —         —         —         —         —       $ 16  

Number that defaulted during the period

     1       4       —         —         —         —         —         —         1       6  

Recorded investment of TDRs that defaulted during the period

   $ 112     $ 2,632       —         —         —         —         —         —       $ 39     $ 2,783  

Financial Impact due to the default of previous troubled debt restructure taken as charge-offs or additional provisions

     —         —         —         —         —         —         —         —         —         —    

Modifications classified as Troubled Debt Restructurings can include one or a combination of the following:

 

  •  

Rate modifications

 

  •  

Term extensions

 

  •  

Interest only modifications, either temporary or long-term

 

  •  

Payment modifications

 

  •  

Collateral substitutions/additions

For all new Troubled Debt Restructurings, an impairment analysis is conducted. If the loan is determined to be collateral dependent, any additional amount of impairment will be calculated based on the difference between estimated collectible value and the current carrying balance of the loan. This difference could result in an increased provision and is typically charged off. If the asset is determined not to be collateral dependent, the impairment is measured on the net present value difference between the estimated cash flows of the restructured loan and the cash flows which would have been received under the original terms. The effect of this could result in a requirement for additional provision to the reserve. The effect of these required provisions for the period are indicated above.

Typically if a TDR defaults during the period, the loan is then considered collateral dependent and, if it was not already considered collateral dependent, an appropriate provision will be reserved or charge will be taken. The additional provisions required resulting from default of previously modified TDR’s are noted above.