XML 23 R13.htm IDEA: XBRL DOCUMENT v3.4.0.3
Allowance for Loan Losses
 3 Months Ended
Mar. 31, 2016
Receivables [Abstract]  
Allowance for Loan Losses
Allowance for Loan Losses
The allowance for loan losses is management’s best estimate of inherent risk of loss in the loan portfolio as of the balance sheet date. The Corporation uses a methodology to systematically measure the amount of estimated loan loss exposure inherent in the loan portfolio for purposes of establishing a sufficient allowance for loan losses. The methodology includes: (1) the identification of loss allocations for individual loans deemed to be impaired and (2) the application of loss allocation factors for non-impaired loans based on historical loss experience and estimated loss emergence period, with adjustments for various exposures that management believes are not adequately represented by historical loss experience.

Prior to December 31, 2015, an unallocated allowance was maintained for measurement imprecision associated with impaired and nonaccrual loans. As a result of further enhancement and refinement of the allowance methodology to provide a more precise quantification of probable losses in the loan portfolio, management concluded that the potential risks anticipated by the unallocated allowance have been incorporated into the allocated component of the methodology, eliminating the need for the unallocated allowance in the fourth quarter of 2015.

The following table presents the activity in the allowance for loan losses for the three months ended March 31, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
Commercial
 
 
 
 
 
 
 
 
 
 
 
Mortgages
 
Construction
 
C&I (1)
 
Total Commercial
 
Residential
 
Consumer
 
Un-allocated
 
Total
Beginning Balance

$9,140

 

$1,758

 

$8,202

 

$19,100

 

$5,460

 

$2,509

 

$—

 

$27,069

Charge-offs
(1,253
)
 
—

 
(8
)
 
(1,261
)
 
(136
)
 
(78
)
 
—

 
(1,475
)
Recoveries
4

 
—

 
26

 
30

 
2

 
11

 
—

 
43

Provision
695

 
(115
)
 
41

 
621

 
37

 
(158
)
 
—

 
500

Ending Balance

$8,586

 

$1,643

 

$8,261

 

$18,490

 

$5,363

 

$2,284

 

$—

 

$26,137

(1) Commercial & industrial loans.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents the activity in the allowance for loan losses for the three months ended March 31, 2015:
(Dollars in thousands)
Commercial
 
 
 
 
 
 
 
 
 
 
 
Mortgages
 
Construction
 
C&I (1)
 
Total Commercial
 
Residential
 
Consumer
 
Un-allocated
 
Total
Beginning Balance

$8,202

 

$1,300

 

$7,987

 

$17,489

 

$5,430

 

$2,713

 

$2,391

 

$28,023

Charge-offs
(200
)
 
—

 
(7
)
 
(207
)
 
(48
)
 
(66
)
 
—

 
(321
)
Recoveries
80

 
—

 
14

 
94

 
2

 
12

 
—

 
108

Provision
249

 
(71
)
 
(191
)
 
(13
)
 
(29
)
 
72

 
(30
)
 
—

Ending Balance

$8,331

 

$1,229

 

$7,803

 

$17,363

 

$5,355

 

$2,731

 

$2,361

 

$27,810


(1) Commercial & industrial loans.

The following table presents the Corporation’s loan portfolio and associated allowance for loan loss by portfolio segment and by impairment methodology.
(Dollars in thousands)
March 31, 2016
 
December 31, 2015
 
Loans
 
Related Allowance
 
Loans
 
Related Allowance
Loans Individually Evaluated for Impairment:
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
Mortgages

$13,480

 

$586

 

$15,141

 

$1,633

Construction & development
—

 
—

 
—

 
—

Commercial & industrial
3,496

 
757

 
3,871

 
771

Residential real estate
10,013

 
133

 
11,333

 
156

Consumer
1,573

 
1

 
1,881

 
23

Subtotal

$28,562

 

$1,477

 

$32,226

 

$2,583

Loans Collectively Evaluated for Impairment:
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
Mortgages

$963,451

 

$8,000

 

$916,812

 

$7,507

Construction & development
123,032

 
1,643

 
122,297

 
1,758

Commercial & industrial
595,352

 
7,504

 
596,426

 
7,431

Residential real estate
994,336

 
5,230

 
1,002,222

 
5,304

Consumer
342,260

 
2,283

 
343,144

 
2,486

Subtotal

$3,018,431

 

$24,660

 

$2,980,901

 

$24,486

Total

$3,046,993

 

$26,137

 

$3,013,127

 

$27,069