XML 22 R10.htm IDEA: XBRL DOCUMENT v2.3.0.15
Impaired Loans, Troubled Debt Restructures and Valuation Allowance For Loan Losses
9 Months Ended
Sep. 30, 2011
Impaired Loans, Troubled Debt Restructures and Valuation Allowance For Loan Losses [Abstract] 
IMPAIRED, LOANS TROUBLED DEBT RESTRUCTURES AND VALUATION ALLOWANCE FOR LOAN LOSSES

NOTE E — IMPAIRED LOANS, TROUBLED DEBT RESTRUCTURES AND VALUATION ALLOWANCE FOR LOAN LOSSES

During the third quarter of 2011, the company adopted Accounting Standards Update (“ASU”) 2011-02, A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring (Topic 310), which modified guidance for identifying restructurings of receivables that constitute a TDR. As a result of adopting the provisions of ASU 2011-02, the company reassessed all loan modifications that occurred after December 31, 2010 for identification as TDRs. The company did not identify any loans that were previously measured under general allowance for credit losses methodology as TDRs. The company adopted the provisions of the ASU that require impaired loan accounting and reporting for newly identified TDRs as of July 1, 2011. During the first nine months of 2011, the total of newly identified TDRs was $15.9 million, of which $262 thousand were accruing construction and land development loans, $3.2 million were accruing real estate mortgage loans, $9.0 million were accruing commercial real estate loans, $187 thousand were accruing installment loans to individuals and $9 thousand were accruing commercial and financial loans. Loans modified during the three and nine months, but full collection under the modified terms is doubtful, are classified as nonaccrual loans from the date of modification and are therefore excluded from the tables below.

The company’s TDR concessions granted generally do not include forgiveness of principal balances. Loan modifications are not reported in calendar years after modification if the loans were modified at an interest rate equal to the yields of new loan originations with comparable risk and the loans are performing based on the terms of the restructuring agreements.

When a loan is modified as a TDR, there is not a direct, material impact on the loans within the Statements of Financial Condition, as principal balances are generally not forgiven.

 

The following table presents loans that were modified within the nine months preceding September 30, 2011.

 

                                 

(Dollars in thousands)

Troubled Debt Restructurings Modified

   Number
of
Contracts		     Pre-
Modification
Outstanding
Recorded
Investment 		    Post-
Modification
Outstanding
Recorded
Investment		     Valuation
Allowance
Recorded		  

Construction and land development

     4     $ 262     $ 262     $ 9  

Residential real estate

    19       3,220       3,220       79  

Commercial real estate

     4       8,971       8,971       126  

Consumer

     4       187       187       30  

Commercial and financial

     1       9       9       0  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

     32     $ 12,649     $ 12,649     $ 244  
   

 

 

    

 

 

    

 

 

    

 

 

  

During the three months ended September 30, 2011, the total of newly identified TDRs was $1.6 million, of which $881 thousand were accruing real estate mortgage loans and $57 thousand were accruing construction and land development loans.

The following table presents loans that were modified with the three months ended September 30, 2011.

 

                                 
(Dollars in thousands) Troubled Debt Restructurings Modified   Number
of
Contracts		     Pre-
Modification
Outstanding
Recorded
Investment 		    Post-
Modification
Outstanding
Recorded
Investment		     Valuation
Allowance
Recorded		  

Construction and land development

     1     $ 57     $ 57     $ 4  

Residential real estate

    5       881       881       46  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total

     6     $ 938     $ 938     $ 50  
   

 

 

    

 

 

    

 

 

    

 

 

  

Accruing loans that were restructured within the 12 months preceding September 30, 2011 and defaulted during the nine months ended September 30, 2011 are presented within the table below. The company considers a loan to have defaulted when it becomes 90 or more days delinquent under the modified terms, has been transferred to non-accrual status or has been transferred to other real estate owned.

 

                 

(Dollars in thousands)

Troubled Debt Restructurings Defaulted

   Number
of
Contracts		     Recorded
Investment		  

Construction and land development

     2     $ 124  

Residential real estate

     1       220  

Commercial real estate

     1       744  

Commercial and financial

     1       8  
   

 

 

    

 

 

  

Total

     5     $ 1,096  
   

 

 

    

 

 

  

 

At September 30, 2011 and 2010, the Company’s recorded investments in impaired loans and the related valuation allowances were as follows:

 

                                         
    Impaired Loans for the Nine Months Ended September 30, 2011  
(Dollars in thousands)   Recorded
Investment		     Unpaid
Principal
Balance		     Related
Valuation
Allowance		     Average
Recorded
Investment		     Interest
Income
Recognized		  

With no related allowance recorded:

                                        

Construction & land development

   $ 1,826     $ 6,640     $ —       $ 2,784     $ 15  

Commercial real estate

     18,498       19,189       —         22,062       302  

Residential real estate

     8,633       13,125       —         8,737       77  

Commercial and financial

     19       19       —         1,026       2  

Consumer

     477       505       —         397       2  

With an allowance recorded:

                                        

Construction & land development

     3,575       3,698       288       17,051       108  

Commercial real estate

     45,503       48,781       4,962       44,690       1,369  

Residential real estate

     25,976       26,770       3,277       27,148       642  

Commercial and financial

     103       103       9       172       2  

Consumer

     797       917       168       754       29  

Total:

                                        

Construction & land development

     5,401       10,338       288       19,835       123  

Commercial real estate

     64,001       67,970       4,962       66,752       1,671  

Residential real estate

     34,609       39,895       3,277       35,885       719  

Commercial and financial

     122       122       9       1,198       4  

Consumer

     1,274       1,422       168       1,151       31  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 105,407     $ 119,747     $ 8,704     $ 124,821     $ 2,548  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                 
    Impaired Loans for the Nine Months Ended September 30,  2010  
(Dollars in thousands)   Recorded
Investment		     Related
Valuation
Allowance		     Average
Recorded
Investment		     Interest
Income
Recognized		  

With no related allowance recorded

   $ 49,190     $ —                    

With an allowance recorded

     84,749       11,618                  
   

 

 

    

 

 

                  
    $ 133,939     $ 11,618     $ 154,021     $ 2,489  
   

 

 

    

 

 

    

 

 

    

 

 

  

Impaired loans also include loans that have been modified in troubled debt restructurings (“TDRs”) where concessions to borrowers who experienced financial difficulties have been granted. At September 30, 2011 and 2010, accruing TDRs totaled $72.8 million and $64.4 million, respectively.

The valuation allowance is included in the allowance for loan losses. The average recorded investment in impaired loans for the nine months ended September 30, 2011 and 2010 was $124,821,000 and $154,021,000, respectively. The impaired loans were measured for impairment based primarily on the value of underlying collateral.

Interest payments received on impaired loans are recorded as interest income unless collection of the remaining recorded investment is doubtful at which time payments received are recorded as reductions to principal. For the nine months ended September 30, 2011 and 2010, the Company recorded $2,548,000 and $2,489,000, respectively, in interest income on impaired loans.

 

The nonaccrual loans and accruing loans past due 90 days or more were $32,627,000 and $29,000, respectively, at September 30, 2011 and were $69,519,000 and $17,000, respectively, at September 30, 2010.

Transactions in the allowance for loan losses for the three months and nine months ended September 30, 2011 are summarized as follows:

 

                                                 
    Allowance for Loan Losses for the Three Months Ended  September 30, 2011  
(Dollars in thousands)   Beginning
Balance		     Provision
for Loan
Losses		     Charge-
Offs		     Recoveries     Net
Charge-
Offs		     Ending
Balance		  

Construction & land development

   $ 2,031     $ 331     $ (720 )    $ 190     $ (530 )    $ 1,832  

Commercial real estate

     16,251       (2,686 )      (74 )      16       (58 )      13,507  

Residential real estate

     11,375       2,527       (2,368 )      196       (2,172 )      11,730  

Commercial and financial

     572       (309 )      —         131       131       394  

Consumer

     1,002       137       (213 )      12       (201 )      938  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 31,231     $ —       $ (3,375 )    $ 545     $ (2,830 )    $ 28,401  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
    Allowance for Loan Losses for the Nine Months Ended September 30, 2011  
(Dollars in thousands)   Beginning
Balance		     Provision
for Loan
Losses		     Charge-
Offs		     Recoveries     Net
Charge-
Offs		     Ending
Balance		  

Construction & land development

   $ 7,214     $ (1,471 )    $ (4,418 )    $ 507     $ (3,911 )    $ 1,832  

Commercial real estate

     18,563       (3,759 )      (1,331 )      34       (1,297 )      13,507  

Residential real estate

     10,102       7,205       (5,922 )      345       (5,577 )      11,730  

Commercial and financial

     480       (349 )      —         263       263       394  

Consumer

     1,385       (84 )      (417 )      54       (363 )      938  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 37,744     $ 1,542     $ (12,088 )    $ 1,203     $ (10,885 )    $ 28,401  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The allowance for loan losses is composed of specific allowances for certain impaired loans and general allowances grouped into loan pools based on similar characteristics. The Company’s loan portfolio and related allowance at September 30, 2011 is shown in the table below:

 

                                                 
    At September 30, 2011  
    Individually Evaluated
for Impairment		     Collectively Evaluated for
Impairment		     Total  
(Dollars in thousands)   Carrying
Value		     Associated
Allowance		     Carrying
Value		     Associated
Allowance		     Carrying
Value		     Associated
Allowance		  

Construction & land development

   $ 5,401     $ 288     $ 42,252     $ 1,544     $ 47,653     $ 1,832  

Commercial real estate

     64,001       4,962       455,350       8,545       519,351       13,507  

Residential real estate

     34,609       3,277       501,316       8,453       535,925       11,730  

Commercial and financial

     122       9       53,412       385       53,534       394  

Consumer

     1,274       168       50,811       770       52,085       938  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 105,407     $ 8,704     $ 1,103,141     $ 19,697     $ 1,208,548     $ 28,401