Acquisitions and FDIC Indemnification Asset

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Acquisitions and FDIC Indemnification Asset

Acquisitions and FDIC Indemnification Asset

The Bank is party to a loss sharing agreement with the FDIC as a result of a 2009 acquisition. Under the loss-sharing agreement (“LSA”), the Bank will share in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $29 million, the FDIC has agreed to reimburse the Bank for 80 percent of the losses. On losses exceeding $29 million, the FDIC has agreed to reimburse the Bank for 95 percent of the losses. The loss-sharing agreement is subject to following servicing procedures as specified in the agreement with the FDIC. Loans acquired that are subject to the loss-sharing agreement with the FDIC are referred to as covered loans for disclosure purposes. Since the acquisition date the Bank has been reimbursed $19.4 million for losses and carrying expenses and currently carries an immaterial balance in the indemnification asset. The balance of loans covered by the loss share agreement at September 30, 2015 and December 31, 2014 totaled $6.5 million and $7.3 million, respectively. The only loans still covered by the loss share agreement are the single family loans; however recoveries on non-single family loans are still subject to sharing with the FDIC until 2017.

FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, applies to a loan with evidence of deterioration of credit quality since origination, acquired by completion of a transfer for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. FASB ASC 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition. The carrying amount of loans accounted for in accordance with FASB ASC 310-30 at September 30, 2015 and 2014 are shown in the following table:

							2015
(Dollar amounts in thousands)	Commercial			Consumer			Total
Beginning balance, July 1,	$	4,329		$	1,547		$	5,876
Discount accretion	—			—			—
Disposals	(105		)	(9		)	(114		)
ASC 310-30 Loans, September 30,	$	4,224		$	1,538		$	5,762

							2015
(Dollar amounts in thousands)	Commercial			Consumer			Total
Beginning balance, January 1,	$	4,803		$	1,571		$	6,374
Discount accretion	—			—			—
Disposals	(579		)	(33		)	(612		)
ASC 310-30 Loans, September 30,	$	4,224		$	1,538		$	5,762

							2014
(Dollar amounts in thousands)	Commercial			Consumer			Total
Beginning balance, July 1,	$	7,337		$	1,885		$	9,222
Discount accretion	—			—			—
Disposals	(1,569		)	(108		)	(1,677		)
ASC 310-30 Loans, September 30,	$	5,768		$	1,777		$	7,545

							2014
(Dollar amounts in thousands)	Commercial			Consumer			Total
Beginning balance, January 1,	$	7,676		$	2,409		$	10,085
Discount accretion	—			—			—
Disposals	(1,908		)	(632		)	(2,540		)
ASC 310-30 Loans, September 30,	$	5,768		$	1,777		$	7,545