LION 9.30.2014 10Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________________________________
FORM 10-Q
__________________________________________________________________
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarter ended September 30, 2014
Commission file number 001-34981
__________________________________________________________________
Fidelity Southern Corporation
(Exact name of registrant as specified in its charter)
__________________________________________________________________
|
| | |
Georgia | | 58-1416811 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
|
| | |
3490 Piedmont Road, Suite 1550, Atlanta GA | | 30305 |
(Address of principal executive offices) | | (Zip Code) |
(404) 639-6500
(Registrant's telephone number, including area code)
__________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. |
| | | | | | | | | | | | | | |
Large accelerated filer | | ¨ | | Accelerated filer | | ý | | Non-accelerated filer | | o | | Smaller reporting company | | o |
| | | | | | | | (Do not check if smaller reporting company) | | | | | | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
As of October 31, 2014 (the most recent practicable date), the Registrant had outstanding approximately 21,327,806 shares of Common Stock.
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
Report on Form 10-Q
September 30, 2014
TABLE OF CONTENTS
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Part I. | | | |
| | | |
| Item l. | | |
| | | |
| | | |
| | | |
| | | |
| Item 2. | | |
| Item 3. | | |
| Item 4. | | |
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Part II. | | | |
| | | |
| Item 1. | | |
| Item 1A. | | |
| Item 2. | | |
| Item 3. | | |
| Item 4. | | |
| Item 5. | | |
| Item 6. | | |
| | |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
| | | | | | | |
| (Unaudited) | | |
($ in thousands) | September 30, 2014 | | December 31, 2013 |
Assets | | | |
Cash and due from banks | $ | 11,276 |
| | $ | 17,599 |
|
Interest-bearing deposits with banks | 79,407 |
| | 95,555 |
|
Federal funds sold | 882 |
| | 3,405 |
|
Cash and cash equivalents | 91,565 |
| | 116,559 |
|
Investment securities available-for-sale | 156,331 |
| | 168,865 |
|
Investment securities held-to-maturity | 7,588 |
| | 4,051 |
|
Loans held-for-sale (includes loans at fair value of $161,775 and $127,850, respectively) | 324,442 |
| | 187,366 |
|
Loans (includes covered loans of $37,706 and $58,365, respectively) | 2,073,803 |
| | 1,893,037 |
|
Allowance for loan losses | (28,297 | ) | | (33,684 | ) |
Loans, net of allowance for loan losses | 2,045,506 |
| | 1,859,353 |
|
Premises and equipment, net | 59,650 |
| | 44,555 |
|
Other real estate, net (includes covered assets of $8,508 and $6,191, respectively) | 26,999 |
| | 30,982 |
|
Bank owned life insurance | 34,279 |
| | 33,855 |
|
Servicing rights | 62,196 |
| | 53,202 |
|
Other assets | 53,109 |
| | 65,380 |
|
Total assets | $ | 2,861,665 |
| | $ | 2,564,168 |
|
Liabilities | | | |
Deposits | | | |
Noninterest-bearing demand deposits | $ | 639,471 |
| | $ | 488,224 |
|
Interest-bearing deposits | 1,819,820 |
| | 1,714,228 |
|
Total deposits | 2,459,291 |
| | 2,202,452 |
|
Other borrowings | 76,402 |
| | 59,233 |
|
Subordinated debt | 46,393 |
| | 46,393 |
|
Other liabilities | 21,416 |
| | 19,860 |
|
Total liabilities | 2,603,502 |
| | 2,327,938 |
|
Shareholders’ equity | | | |
Preferred stock, no par value. Authorized 10,000,000; zero issued | — |
| | — |
|
Common stock, no par value. Authorized 50,000,000; issued and outstanding 21,324,486 and 21,342,549, respectively | 161,527 |
| | 158,153 |
|
Accumulated other comprehensive income, net of tax | 2,367 |
| | 968 |
|
Retained earnings | 94,269 |
| | 77,109 |
|
Total shareholders’ equity | 258,163 |
| | 236,230 |
|
Total liabilities and shareholders’ equity | $ | 2,861,665 |
| | $ | 2,564,168 |
|
See accompanying notes to unaudited consolidated financial statements.
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
($ in thousands, except per share data) | 2014 | | 2013 | | 2014 | | 2013 |
Interest income: | | | | | | | |
Loans, including fees | $ | 24,690 |
| | $ | 23,900 |
| | $ | 71,282 |
| | $ | 70,793 |
|
Investment securities | 1,183 |
| | 978 |
| | 3,676 |
| | 2,916 |
|
Federal funds sold and bank deposits | 18 |
| | 53 |
| | 76 |
| | 71 |
|
Total interest income | 25,891 |
| | 24,931 |
| | 75,034 |
| | 73,780 |
|
Interest expense: | | | | | | | |
Deposits | 2,282 |
| | 2,601 |
| | 7,098 |
| | 7,828 |
|
Other borrowings | 163 |
| | 84 |
| | 276 |
| | 763 |
|
Subordinated debt | 282 |
| | 716 |
| | 834 |
| | 2,451 |
|
Total interest expense | 2,727 |
| | 3,401 |
| | 8,208 |
| | 11,042 |
|
Net interest income | 23,164 |
| | 21,530 |
| | 66,826 |
| | 62,738 |
|
Provision for loan losses | 1,859 |
| | 1,121 |
| | (25 | ) | | 5,167 |
|
Net interest income after provision for loan losses | 21,305 |
| | 20,409 |
| | 66,851 |
| | 57,571 |
|
Noninterest income: | | | | | | | |
Service charges on deposit accounts | 1,141 |
| | 1,075 |
| | 3,209 |
| | 3,044 |
|
Other fees and charges | 1,140 |
| | 997 |
| | 3,160 |
| | 2,859 |
|
Mortgage banking activities | 16,135 |
| | 17,809 |
| | 40,292 |
| | 55,762 |
|
Indirect lending activities | 6,303 |
| | 2,583 |
| | 14,610 |
| | 7,010 |
|
SBA lending activities | 1,479 |
| | 647 |
| | 3,682 |
| | 3,148 |
|
Bank owned life insurance | 313 |
| | 326 |
| | 1,369 |
| | 965 |
|
Other | 1,397 |
| | 2,407 |
| | 4,287 |
| | 6,343 |
|
Total noninterest income | 27,908 |
| | 25,844 |
| | 70,609 |
| | 79,131 |
|
Noninterest expense: | | | | | | | |
Salaries and employee benefits | 17,022 |
| | 14,424 |
| | 49,080 |
| | 42,984 |
|
Commissions | 5,363 |
| | 6,019 |
| | 14,443 |
| | 20,388 |
|
Occupancy | 3,467 |
| | 2,844 |
| | 9,477 |
| | 7,542 |
|
Communication | 1,009 |
| | 754 |
| | 2,958 |
| | 2,319 |
|
Other | 8,849 |
| | 10,061 |
| | 26,151 |
| | 26,552 |
|
Total noninterest expense | 35,710 |
| | 34,102 |
| | 102,109 |
| | 99,785 |
|
Income before income tax expense | 13,503 |
| | 12,151 |
| | 35,351 |
| | 36,917 |
|
Income tax expense | 4,701 |
| | 4,298 |
| | 12,528 |
| | 13,140 |
|
Net income | 8,802 |
| | 7,853 |
| | 22,823 |
| | 23,777 |
|
Preferred stock dividends and accretion of discount | — |
| | (817 | ) | | — |
| | (2,463 | ) |
Net income available to common equity | $ | 8,802 |
| | $ | 7,036 |
| | $ | 22,823 |
| | $ | 21,314 |
|
| | | | | | | |
Earnings per common share: | | | | | | | |
Basic | $ | 0.41 |
| | $ | 0.33 |
| | $ | 1.07 |
| | $ | 1.20 |
|
Diluted | $ | 0.38 |
| | $ | 0.30 |
| | $ | 0.97 |
| | $ | 1.07 |
|
| | | | | | | |
Cash dividends declared per common share | $ | 0.09 |
| | $ | — |
| | $ | 0.21 |
| | $ | — |
|
| | | | | | | |
Net income | $ | 8,802 |
| | $ | 7,853 |
| | $ | 22,823 |
| | $ | 23,777 |
|
Other comprehensive income (loss): |
|
| | | | | | |
Change in net unrealized gains/(losses) on securities for the period | (705 | ) | | 400 |
| | 2,256 |
| | (2,939 | ) |
Less: Income tax expense (benefit) related to items of other comprehensive income | (268 | ) | | 152 |
| | 857 |
| | (1,117 | ) |
Other comprehensive income (loss), net of tax | (437 | ) | | 248 |
| | 1,399 |
| | (1,822 | ) |
Total comprehensive income | $ | 8,365 |
| | $ | 8,101 |
| | $ | 24,222 |
| | $ | 21,955 |
|
See accompanying notes to unaudited consolidated financial statements.
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
| | | | | | | |
| Nine Months Ended September 30, |
| 2014 | | 2013 |
(in thousands) | | | |
Operating activities: | | | |
Net income | $ | 22,823 |
| | $ | 23,777 |
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | | | |
Provision for loan losses | (25 | ) | | 5,167 |
|
Depreciation and amortization of premises and equipment | 3,197 |
| | 2,470 |
|
Other amortization, net | 5,310 |
| | 6,024 |
|
Impairment of other real estate | 2,111 |
| | 3,474 |
|
Share-based compensation | 491 |
| | 998 |
|
Gain on loan sales, including origination of servicing rights | (43,202 | ) | | (60,570 | ) |
Net gain on sale of other real estate | (2,486 | ) | | (3,930 | ) |
Net income on bank owned life insurance | (1,292 | ) | | (882 | ) |
Change in assets and liabilities which (used) provided cash: | | | |
Net (increase) decrease in loans originated for resale | (94,885 | ) | | 120,245 |
|
Net payments received from FDIC under loss-share agreements | 5,028 |
| | 5,188 |
|
Other assets | (7,687 | ) | | 260 |
|
Other liabilities | 564 |
| | 8,600 |
|
Net cash (used in) provided by operating activities | (110,053 | ) | | 110,821 |
|
Investing activities: | | | |
Purchases of investment securities available-for-sale | (5,006 | ) | | (56,552 | ) |
Purchases of investment securities held-to-maturity | (4,334 | ) | | — |
|
Purchase of FHLB stock | (10,575 | ) | | (5,355 | ) |
Maturities and calls of investment securities available-for-sale | 19,860 |
| | 37,615 |
|
Maturities and calls of investment securities held-to-maturity | 796 |
| | 1,694 |
|
Redemption of FHLB stock | 10,564 |
| | 6,566 |
|
Net proceeds from sales of loans | 52,211 |
| | — |
|
Net increase in loans | (245,120 | ) | | (80,917 | ) |
Proceeds from bank owned life insurance | 868 |
| | — |
|
Proceeds from sale of other real estate | 14,443 |
| | 26,470 |
|
Purchases of premises and equipment | (11,052 | ) | | (6,765 | ) |
Net proceeds received from deposit assumption and branch acquisition transaction | 162,033 |
|
| — |
|
Net cash used in investing activities | (15,312 | ) | | (77,244 | ) |
Financing activities: | | | |
Net increase in noninterest-bearing demand deposits | 130,101 |
| | 64,528 |
|
Net (decrease) increase in interest-bearing deposits | (44,119 | ) | | 35,023 |
|
Net increase (decrease) in other borrowings | 17,169 |
| | (37,238 | ) |
Subordinated debt redemption | — |
| | (21,500 | ) |
Common stock dividends paid | (4,470 | ) | | (434 | ) |
Proceeds from the issuance of common stock | 1,690 |
| | 67,702 |
|
Preferred stock redemption | — |
|
| (48,200 | ) |
Preferred stock dividends paid | — |
| | (1,607 | ) |
Net cash provided by financing activities | 100,371 |
| | 58,274 |
|
Net (decrease) increase in cash and cash equivalents | (24,994 | ) | | 91,851 |
|
Cash and cash equivalents, beginning of period | 116,559 |
| | 49,020 |
|
Cash and cash equivalents, end of period | $ | 91,565 |
| | $ | 140,871 |
|
|
| | | | | | | |
Supplemental disclosures of cash flow information: | | | |
Cash paid during the period for: | | | |
Interest | $ | 8,363 |
| | $ | 12,176 |
|
Income taxes | $ | 3,639 |
| | $ | 10,250 |
|
Supplemental disclosures of noncash investing and financing activities: | | | |
Noncash transfers to other real estate | $ | 10,086 |
| | $ | 20,407 |
|
Accretion on preferred stock | $ | — |
| | $ | 856 |
|
Deposit assumption and branch acquisition | | | |
Assets acquired | $ | 9,119 |
| | $ | — |
|
Liabilities assumed | $ | 170,994 |
| | $ | — |
|
See accompanying notes to unaudited consolidated financial statements.
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited consolidated financial statements include the accounts of Fidelity Southern Corporation ("FSC" or "Fidelity") and its wholly-owned subsidiaries. FSC owns 100% of Fidelity Bank (the “Bank”) and LionMark Insurance Company, an insurance agency offering consumer credit related insurance products. FSC also owns three subsidiaries established to issue trust preferred securities, which are not consolidated for financial reporting purposes in accordance with current accounting guidance, as FSC is not the primary beneficiary. The “Company” or "our", as used herein, includes FSC and its subsidiaries, unless the context otherwise requires.
These unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles followed within the financial services industry for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete financial statements.
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the periods. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the calculations of and the amortization of capitalized servicing rights, valuation of deferred income taxes, the valuation of loans held-for-sale and certain derivatives, the valuation of real estate or other assets acquired in connection with foreclosures or in satisfaction of loans, purchase accounting-related adjustments, and the Federal Deposit Insurance Corporation ("FDIC") receivable for loss share agreements. The Company principally operates in one business segment, which is community banking.
In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and results of operations for the interim periods have been included. All such adjustments are normal recurring accruals. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts have been reclassified to conform to current year presentation. These reclassifications had no impact on previously reported net income and shareholders’ equity.
The Company’s significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements included in the 2013 Annual Report on Form 10-K/A filed with the Securities and Exchange Commission. There were no new accounting policies or changes to existing policies adopted in the first nine months of 2014, which had a significant effect on the results of operations or statement of financial condition. For interim reporting purposes, the Company follows the same basic accounting policies and considers each interim period as an integral part of an annual period.
Operating results for the three and nine-month periods ended September 30, 2014, are not necessarily indicative of the results that may be expected for the year ended December 31, 2014. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K/A and Annual Report to Shareholders for the year ended December 31, 2013.
Recent Accounting Pronouncements
In January 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-04 "Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure." The amendments clarify when an in substance repossession or foreclosure occurs, such that the loan should be derecognized and real estate property should be recognized. The amendments will be effective for entities during annual reporting periods beginning after December 15, 2014, and interim reporting periods therein and those requirements should be applied prospectively. Early adoption is permitted. The adoption of this ASU is not expected to have a significant impact on the Company’s Consolidated Financial Statements.
In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers." The amendments in this guidance indicate that entities should recognize revenue to reflect the transfers of goods or services to customers in an amount equal to the consideration the entity receives or expects to receive. The amendments will be effective for entities during annual reporting periods beginning after December 15, 2016, and interim reporting periods therein and those requirements should be applied retrospectively. Early adoption is not permitted. The adoption of this ASU is not expected to have a significant impact on the Company's Consolidated Financial Statements.
In June 2014, the FASB issued ASU 2014-11 "Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." The new guidance requires entities to account for repurchase-to-maturity transactions as secured borrowings, eliminates accounting guidance on linked repurchase financing transactions, and expands disclosure requirements for certain transfers of financial assets that are accounted for as sales and certain transfers accounted for as secured borrowings. The amendments are effective for entities during annual reporting periods beginning after December 15, 2014, and interim reporting periods therein. The guidance should be applied by making a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption for any transactions outstanding on the effective date. Early adoption is not permitted. The adoption of this ASU is not expected to have a significant impact on the Company's Consolidated Financial Statements.
In August 2014, the FASB issued ASU 2014-14 "Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure." The amendments in this guidance provide specific guidance on how to classify or measure foreclosed mortgage loans that are government guaranteed. The amendments will be effective for public entities during annual reporting periods beginning after December 15, 2014, and interim reporting periods therein and those requirements should be applied retrospectively. Early adoption is not permitted. The adoption of this ASU is not expected to have a significant impact on the Company's Consolidated Financial Statements.
In August 2014, the FASB issued ASU 2014-15 "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." The amendments in this standard provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments will be effective for public entities during annual reporting periods beginning after December 15, 2016, and interim reporting periods therein and those requirements should be applied retrospectively. Early adoption is not permitted. The adoption of this ASU is not expected to have a significant impact on the Company's Consolidated Financial Statements.
Other accounting standards that have been issued or proposed by the FASB or other standard-settings bodies are not expected to have a material impact on the Company financial position, results of operations or cash flows.
Contingencies
Due to the nature of their activities, the Company and its subsidiaries are at times engaged in various legal proceedings that arise in the course of normal business, some of which were outstanding as of September 30, 2014. While it is difficult to predict or determine the outcome of these proceedings, it is the opinion of management, after consultation with its legal counsel, that there is not a reasonable possibility that the ultimate liabilities, if any, would have a material adverse impact on the Company’s consolidated results of operations, financial position, or cash flows.
2. DEPOSIT ASSUMPTION AND BRANCH ACQUISITION
On September 19, 2014, the Company announced the completion of a previously announced transaction in which the Company assumed the deposits of six branches of Center State Bank of Florida, N.A. and acquired five of those branches pursuant to a definitive agreement entered into on June 5, 2014. No loans were acquired in the transaction.
Net cash proceeds of approximately $162.0 million were received in the transaction, representing the deposit balances assumed at closing, net of amounts paid for real and personal property acquired and a 1.50% premium on deposits. Customer deposit balances assumed were recorded at $170.9 million, real and personal property was recorded at $7.2 million, core deposit intangible of $1.8 million was recognized, and approximately $100,000 in other accrued liabilities, net were recorded in the transaction. The amount allocated to goodwill was insignificant.
The assets acquired and liabilities assumed in the transaction were recorded at fair value in accordance with ASC 805, "Business Combinations." The effects of the acquired assets and liabilities have been included in the consolidated financial statements since the acquisition date. Pro forma results have not been disclosed as those amounts are not significant to the unaudited financial statements.
3. INVESTMENT SECURITIES
The amortized cost and fair value of debt securities are categorized in the table below by contractual maturity. Securities not due at a single maturity (i.e., mortgage-backed securities) are shown separately.
|
| | | | | | | | | | | | | | | |
| September 30, 2014 | | December 31, 2013 |
(in thousands) | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value |
Available-for-sale: | | | | | | | |
Obligations of U.S. Government sponsored enterprises: | | | | | | | |
Due five years through ten years | $ | 24,687 |
| | $ | 24,970 |
| | $ | 19,605 |
| | $ | 19,553 |
|
Due after ten years | 1,506 |
| | 1,541 |
| | 1,518 |
| | 1,486 |
|
Municipal securities: | | | | | | | |
Due within one year | 820 |
| | 824 |
| | — |
| | — |
|
Due after one year through five years | 886 |
| | 903 |
| | 1,716 |
| | 1,745 |
|
Due five years through ten years | 689 |
| | 728 |
| | 691 |
| | 700 |
|
Due after ten years | 12,274 |
| | 12,833 |
| | 12,292 |
| | 12,324 |
|
Residential mortgage-backed securities | 111,651 |
| | 114,532 |
| | 131,481 |
| | 133,057 |
|
Total available-for-sale | $ | 152,513 |
| | $ | 156,331 |
| | $ | 167,303 |
| | $ | 168,865 |
|
Held-to-maturity: | | | | | | | |
Residential mortgage-backed securities | $ | 3,290 |
| | $ | 3,655 |
| | $ | 4,051 |
| | $ | 4,437 |
|
Commercial mortgage-backed securities | 4,298 |
| | 4,298 |
| | — |
| | — |
|
Total held-to-maturity | $ | 7,588 |
| | $ | 7,953 |
| | $ | 4,051 |
| | $ | 4,437 |
|
The Bank did not sell any investment securities during the three and nine months ended September 30, 2014 or September 30, 2013.
The following table summarizes the amortized cost and fair value of debt securities and the related gross unrealized gains and losses at September 30, 2014 and December 31, 2013.
|
| | | | | | | | | | | | | | | | | | | |
| September 30, 2014 |
(in thousands) | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Other than Temporary Impairment | | Fair Value |
Available-for-sale: | | | | | | | | | |
Obligations of U.S. Government sponsored enterprises | $ | 26,193 |
| | $ | 318 |
| | $ | — |
| | $ | — |
| | $ | 26,511 |
|
Municipal securities | 14,669 |
| | 620 |
| | (1 | ) | | — |
| | 15,288 |
|
Mortgage-backed securities | 111,651 |
| | 2,951 |
| | (70 | ) | | — |
| | 114,532 |
|
| $ | 152,513 |
| | $ | 3,889 |
| | $ | (71 | ) | | $ | — |
| | $ | 156,331 |
|
Held-to-maturity: | | | | | | | | | |
Residential mortgage-backed securities | $ | 3,290 |
| | $ | 365 |
| | $ | — |
| | $ | — |
| | $ | 3,655 |
|
Commercial mortgage-backed securities | 4,298 |
| | — |
| | — |
| | — |
| | 4,298 |
|
| $ | 7,588 |
| | $ | 365 |
| | $ | — |
| | $ | — |
| | $ | 7,953 |
|
|
| | | | | | | | | | | | | | | | | | | |
| December 31, 2013 |
(in thousands) | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Other than Temporary Impairment | | Fair Value |
Available-for-sale: | | | | | | | | | |
Obligations of U.S. Government sponsored enterprises: | $ | 21,123 |
| | $ | 4 |
| | $ | (88 | ) | | $ | — |
| | $ | 21,039 |
|
Municipal securities | 14,699 |
| | 240 |
| | (170 | ) | | — |
| | 14,769 |
|
Residential mortgage-backed securities | 131,481 |
| | 2,049 |
| | (473 | ) | | — |
| | 133,057 |
|
| $ | 167,303 |
| | $ | 2,293 |
| | $ | (731 | ) | | $ | — |
| | $ | 168,865 |
|
Held-to-maturity: | | | | | | | | | |
Residential mortgage-backed securities | $ | 4,051 |
| | $ | 386 |
| | $ | — |
| | $ | — |
| | $ | 4,437 |
|
At September 30, 2014, four securities had gross unrealized losses of $70,000, of which three securities had been in a loss position for greater than twelve months. These securities consist of two mortgage-backed securities with an aggregate fair value of $3.3 million and unrealized losses of $66,000 and one municipal security with a fair value of $1.0 million and an unrealized loss of approximately $1,000. At December 31, 2013, all securities in an unrealized loss position had been in a loss position for less than twelve months.
Management believes that the impairment is the result of fluctuations in interest rates and not credit-related issues. Management does not intend to sell these securities and it is not more likely than not that the Company will be required to sell the investments before recovery of the amortized cost basis. Accordingly, as of September 30, 2014, management believes the impairment detailed in the prior table is temporary and no impairment loss has been recognized in the Company’s Consolidated Statements of Comprehensive Income.
Investment securities with a carrying value aggregating $109.4 million and $124.7 million at September 30, 2014 and December 31, 2013, were pledged as collateral for public deposits and overnight repurchase agreements.
4. LOANS HELD-FOR-SALE
Loans held-for-sale at September 30, 2014 and December 31, 2013 totaled $324.4 million and $187.4 million, respectively, and are shown in the table below:
|
| | | | | | | |
(in thousands) | September 30, 2014 | | December 31, 2013 |
SBA | $ | 17,667 |
| | $ | 9,516 |
|
Residential mortgage | 161,775 |
| | 127,850 |
|
Indirect automobile | 145,000 |
| | 50,000 |
|
Total loans held-for-sale | $ | 324,442 |
| | $ | 187,366 |
|
5. LOANS
Loans outstanding, by class, are summarized in the following table and are presented net of deferred fees and costs of $5.9 million and $5.3 million at September 30, 2014 and December 31, 2013, respectively. Non-covered loans represent existing portfolio loans prior to the FDIC-assisted transactions, loans acquired but not covered under the Loss Share Agreements, and additional loans originated subsequent to the FDIC-assisted transactions.
|
| | | | | | | | | | | | | | | |
| Non-covered | | Covered |
(in thousands) | September 30, 2014 | | December 31, 2013 | | September 30, 2014 | | December 31, 2013 |
Commercial | $ | 501,492 |
| | $ | 493,093 |
| | $ | 22,926 |
| | $ | 37,885 |
|
SBA | 142,674 |
| | 134,221 |
| | 628 |
| | 603 |
|
Total commercial loans | 644,166 |
| | 627,314 |
| | 23,554 |
| | 38,488 |
|
Construction loans | 103,962 |
| | 92,929 |
| | 4,862 |
| | 8,769 |
|
Indirect automobile | 1,087,710 |
| | 975,223 |
| | — |
| | — |
|
Installment | 14,705 |
| | 13,876 |
| | 942 |
| | 1,486 |
|
Total consumer loans | 1,102,415 |
| | 989,099 |
| | 942 |
| | 1,486 |
|
Residential mortgage | 117,538 |
| | 59,075 |
| | 1,754 |
| | 1,853 |
|
Home equity lines of credit | 68,016 |
| | 66,255 |
| | 6,594 |
| | 7,769 |
|
Total mortgage loans | 185,554 |
| | 125,330 |
| | 8,348 |
| | 9,622 |
|
Total loans | $ | 2,036,097 |
| | $ | 1,834,672 |
| | $ | 37,706 |
| | $ | 58,365 |
|
Loans in nonaccrual status that are not covered under loss share agreements totaling approximately $37.2 million, and $40.9 million at September 30, 2014 and December 31, 2013, respectively, are presented by class of loans in the following table.
|
| | | | | | | |
(in thousands) | September 30, 2014 | | December 31, 2013 |
Commercial | $ | 10,575 |
| | $ | 10,890 |
|
SBA | 13,985 |
| | 15,385 |
|
Total commercial loans | 24,560 |
| | 26,275 |
|
Construction | 7,241 |
| | 9,093 |
|
Indirect automobile | 795 |
| | 2,362 |
|
Installment | 936 |
| | 601 |
|
Total consumer loans | 1,731 |
| | 2,963 |
|
Residential mortgage | 2,436 |
| | 1,886 |
|
Home equity lines of credit | 1,272 |
| | 727 |
|
Total mortgage loans | 3,708 |
| | 2,613 |
|
Total loans | $ | 37,240 |
| | $ | 40,944 |
|
Accruing loans delinquent 30-89 days and troubled debt restructured loans ("TDRs") accruing interest, presented by class of loans at September 30, 2014 and December 31, 2013, were as follows:
|
| | | | | | | | | | | | | | | |
| September 30, 2014 | | December 31, 2013 |
(in thousands) | Accruing Loans Delinquent 30-89 Days | | TDRs Accruing Interest | | Accruing Loans Delinquent 30-89 Days | | TDRs Accruing Interest |
Commercial | $ | 325 |
| | $ | 7,055 |
| | $ | 1,620 |
| | $ | 7,242 |
|
SBA | 175 |
| | 2,791 |
| | 169 |
| | 2,520 |
|
Construction | — |
| | 451 |
| | — |
| | 1,662 |
|
Indirect automobile | 1,573 |
| | — |
| | 1,561 |
| | — |
|
Installment | 430 |
| | 18 |
| | 305 |
| | — |
|
Residential mortgage | 64 |
| | 636 |
| | 1,314 |
| | 647 |
|
Home equity lines of credit | 318 |
| | — |
| | 163 |
| | — |
|
Total loans | $ | 2,885 |
| | $ | 10,951 |
| | $ | 5,132 |
| | $ | 12,071 |
|
There were no loans 90 days or more past due and still accruing at September 30, 2014 or December 31, 2013.
TDR Loans
TDRs are loans in which the borrower is experiencing financial difficulty and the Company has granted an economic concession to the borrower. Prior to modifying a borrower’s loan terms, the Company performs an evaluation of the borrower’s financial condition and ability to service the loan under the potential modified loan terms.
The types of concessions granted are generally interest rate reductions or term extensions. If a loan is accruing at the time of modification, the loan remains on accrual status and is subject to the Company’s charge-off and nonaccrual policies. If a loan is on nonaccrual status before it is determined to be a TDR, then the loan remains on nonaccrual status. TDRs may be returned to accrual status if there has been at least a six-month sustained period of repayment performance by the borrower. Interest income recognition on impaired loans is dependent upon nonaccrual status.
During the nine months ended September 30, 2014 and 2013, certain loans were modified, resulting in TDRs. The modification of the terms of such loans included one or a combination of the following modifications: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk.
The following tables presents loans, by class, which were modified as TDRs that occurred during the three and nine months ended September 30, 2014 and 2013 along with the type of modification:
|
| | | | | | | | | | | | | | | |
| Troubled Debt Restructured During the Three Months Ended | | Troubled Debt Restructured During the Three Months Ended |
| September 30, 2014 | | September 30, 2013 |
(in thousands) | Interest Rate | | Term | | Interest Rate | | Term |
Commercial | $ | — |
| | $ | 22 |
| | $ | — |
| | $ | 1,873 |
|
SBA | — |
| | — |
| | — |
| | — |
|
Construction | — |
| | — |
| | — |
| | — |
|
Indirect automobile | — |
| | 275 |
| | — |
| | 338 |
|
Installment | — |
| | 42 |
| | — |
| | — |
|
Residential mortgage | — |
| | — |
| | — |
| | 141 |
|
Home equity lines of credit | — |
| | — |
| | — |
| | — |
|
Total loans | $ | — |
| | $ | 339 |
| | $ | — |
| | $ | 2,352 |
|
|
| | | | | | | | | | | | | | | |
| | | | | | | |
| Troubled Debt Restructured During the Nine Months Ended | | Troubled Debt Restructured During the Nine Months Ended |
| September 30, 2014 | | September 30, 2013 |
(in thousands) | Interest Rate | | Term | | Interest Rate | | Term |
Commercial | $ | — |
| | $ | 22 |
| | $ | 214 |
| | $ | 1,873 |
|
SBA | — |
| | — |
| | — |
| | — |
|
Construction | — |
| | — |
| | — |
| | — |
|
Indirect automobile | — |
| | 657 |
| | — |
| | 1,040 |
|
Installment | 127 |
| | 60 |
| |
|
| | — |
|
Residential mortgage | 155 |
| | — |
| | 127 |
| | 217 |
|
Home equity lines of credit | — |
| | 217 |
| | — |
| | 140 |
|
Total loans | $ | 282 |
| | $ | 956 |
| | $ | 341 |
| | $ | 3,270 |
|
The following tables present the amount of TDRs that were restructured in the previous twelve months ended September 30, 2014 and 2013 and subsequently redefaulted during the three and nine months ended September 30, 2014 and September 30, 2013:
|
| | | | | | | |
| Troubled Debt Restructured during the last twelve months and subsequently redefaulting during the three months ended (1) |
(in thousands) | September 30, 2014 | | September 30, 2013 |
Commercial | $ | 22 |
| | $ | — |
|
SBA | — |
| | — |
|
Construction | — |
| | — |
|
Indirect automobile | — |
| | — |
|
Installment | 42 |
| | — |
|
Residential mortgage | — |
| | 141 |
|
Home equity lines of credit | — |
| | — |
|
Total loans | $ | 64 |
| | $ | 141 |
|
|
| | | | | | | |
| Troubled Debt Restructured during the last twelve months and subsequently redefaulting during the nine months ended (1) |
(in thousands) | September 30, 2014 | | September 30, 2013 |
Commercial | $ | 22 |
| | $ | 1,312 |
|
SBA | — |
| | — |
|
Construction | — |
| | 772 |
|
Indirect automobile | — |
| | 401 |
|
Installment | 187 |
| | — |
|
Residential mortgage | 155 |
| | 344 |
|
Home equity lines of credit | 217 |
| | — |
|
Total loans | $ | 581 |
| | $ | 2,829 |
|
(1) Subsequently redefaulting is defined as a payment default (i.e., 30 days contractually past due) within 12 months of the restructuring date
The Company had TDRs with a balance of $19.9 million and $25.6 million at September 30, 2014 and December 31, 2013, respectively. There were charge-offs of TDR loans of $1.9 million for the nine months ended September 30, 2014 and $20,000 for the nine months ended September 30, 2013. Charge-offs on such loans are factored into the rolling historical loss rate, which is one of the considerations used in establishing the allowance for loan losses. The Company was not committed to lend additional amounts as of September 30, 2014 or December 31, 2013 to customers with outstanding loans that are classified as TDRs.
Impaired Loans
Impaired loans are evaluated based on the present value of expected future cash flows discounted at each loan’s original effective interest rate, or at the loan’s observable market price, or the fair value of the collateral, if the loan is collateral-dependent.
The following tables present by class the unpaid principal balance, amortized cost and related allowance for impaired loans at September 30, 2014 and December 31, 2013.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2014 | | December 31, 2013 |
(in thousands) | Unpaid Principal Balance | | Recorded Investment(1) | | Related Allowance | | Unpaid Principal Balance | | Recorded Investment(1) | | Related Allowance |
Impaired loans with allowance | | | | | | | | | | | |
Commercial | $ | 10,857 |
| | $ | 10,792 |
| | $ | 3,781 |
| | $ | 9,501 |
| | $ | 9,381 |
| | $ | 4,037 |
|
SBA | 4,644 |
| | 3,624 |
| | 264 |
| | 9,762 |
| | 8,079 |
| | 607 |
|
Construction | 451 |
| | 451 |
| | 253 |
| | 15,408 |
| | 10,500 |
| | 625 |
|
Indirect automobile | 2,384 |
| | 1,976 |
| | 9 |
| | 2,364 |
| | 2,362 |
| | 13 |
|
Installment | 1,785 |
| | 467 |
| | 300 |
| | 461 |
| | 431 |
| | 302 |
|
Residential mortgage | 2,260 |
| | 2,260 |
| | 651 |
| | 2,270 |
| | 2,270 |
| | 805 |
|
Home equity lines of credit | 852 |
| | 741 |
| | 687 |
| | 879 |
| | 789 |
| | 735 |
|
Total impaired loans with allowance | $ | 23,233 |
| | $ | 20,311 |
| | $ | 5,945 |
| | $ | 40,645 |
| | $ | 33,812 |
| | $ | 7,124 |
|
|
| | | | | | | | | | | | | | | |
| September 30, 2014 | | December 31, 2013 |
(in thousands) | Unpaid Principal Balance | | Recorded Investment (1) | | Unpaid Principal Balance | | Recorded Investment (1) |
Impaired loans with no allowance | | | | | | | |
Commercial | $ | 17,123 |
| | $ | 14,722 |
| | $ | 12,495 |
| | $ | 11,522 |
|
SBA | 21,232 |
| | 17,840 |
| | 12,706 |
| | 10,545 |
|
Construction | 9,460 |
| | 7,241 |
| | 2,758 |
| | 1,266 |
|
Indirect automobile | — |
| | — |
| | — |
| | — |
|
Installment | 65 |
| | 53 |
| | 1,461 |
| | 170 |
|
Residential mortgage | 1,096 |
| | 1,096 |
| | 725 |
| | 725 |
|
Home equity lines of credit | 205 |
| | 185 |
| | 62 |
| | 56 |
|
Total impaired loans with no allowance | $ | 49,181 |
| | $ | 41,137 |
| | $ | 30,207 |
| | $ | 24,284 |
|
(1)The primary difference between the unpaid principal balance and recorded investment represents charge offs previously taken; it excludes accrued interest receivable due to materiality
Average impaired loans and interest income recognized for the three and nine months ended September 30, 2014 and September 30, 2013, by class, are summarized in the tables below. Interest income recognized during the periods on a cash basis was de minimis. |
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, |
| 2014 | | 2013 |
(in thousands) | Average Balance | | Interest Income Recognized | | Average Balance | | Interest Income Recognized |
Commercial | $ | 23,776 |
| | $ | 232 |
| | $ | 21,444 |
| | $ | 295 |
|
SBA | 22,477 |
| | 837 |
| | 22,479 |
| | 264 |
|
Construction | 7,894 |
| | 10 |
| | 10,882 |
| | 55 |
|
Indirect automobile | 1,981 |
| | 42 |
| | 2,511 |
| | 40 |
|
Installment | 502 |
| | 42 |
| | 723 |
| | 47 |
|
Residential mortgage | 3,222 |
| | 10 |
| | 3,275 |
| | 9 |
|
Home equity lines of credit | 932 |
| | 116 |
| | 1,758 |
| | 13 |
|
Total | $ | 60,784 |
| | $ | 1,289 |
| | $ | 63,072 |
| | $ | 723 |
|
|
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2014 | | 2013 |
(in thousands) | Average Balance | | Interest Income Recognized | | Average Balance | | Interest Income Recognized |
Commercial | $ | 22,758 |
| | $ | 834 |
| | $ | 25,262 |
| | $ | 728 |
|
SBA | 21,683 |
| | 1,626 |
| | 24,231 |
| | 798 |
|
Construction | 9,413 |
| | 223 |
| | 12,766 |
| | 132 |
|
Indirect automobile | 2,087 |
| | 135 |
| | 3,011 |
| | 109 |
|
Installment | 524 |
| | 174 |
| | 648 |
| | 139 |
|
Residential mortgage | 3,010 |
| | 28 |
| | 3,403 |
| | 35 |
|
Home equity lines of credit | 951 |
| | 211 |
| | 2,020 |
| | 41 |
|
Total | $ | 60,426 |
| | $ | 3,231 |
| | $ | 71,341 |
| | $ | 1,982 |
|
Credit Quality Indicators
The Company uses an asset quality ratings system to assign a numeric indicator of the credit quality and level of existing credit risk inherent in a loan. These ratings are adjusted periodically as the Company becomes aware of changes in the credit quality of the underlying loans.
Indirect automobile loans typically receive a risk rating only when being downgraded to an adverse rating. The Company uses a number of factors, including FICO scoring, to help evaluate the likelihood consumer borrowers will pay their credit obligations as agreed. The weighted-average FICO score for the indirect automobile portfolio was 751 at September 30, 2014 and 733 at December 31, 2013.
The following are definitions of the asset rating categories.
•Pass – These categories include loans rated satisfactory with high, good, average or acceptable business and credit risk.
•Special Mention – A special mention asset has potential weaknesses that deserve management’s close attention.
•Substandard – A substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. A substandard asset has a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt.
•Doubtful – Doubtful assets have all the weaknesses inherent in assets 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.
•Loss – Loss assets are considered uncollectable and of such little value that their continuance as recorded assets is not warranted.
The following tables present the recorded investment in loans, by loan rating category, as of September 30, 2014 and December 31, 2013:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2014 | | |
Asset Rating | | Commercial | | SBA | | Construction | | Indirect Automobile | | Installment | | Residential Mortgage | | Home Equity Lines of Credit | | Total |
Pass | | $ | 476,971 |
| | $ | 120,230 |
| | $ | 97,675 |
| | $ | — |
| | $ | 13,236 |
| | $ | 115,572 |
| | $ | 72,817 |
| | $ | 896,501 |
|
Special Mention | | 18,340 |
| | 5,110 |
| | 209 |
| | — |
| | 520 |
| | 172 |
| | 82 |
| | 24,433 |
|
Substandard | | 29,107 |
| | 16,542 |
| | 10,940 |
| | 2,962 |
| | 1,891 |
| | 3,548 |
| | 1,711 |
| | 66,701 |
|
Doubtful | | — |
| | 1,420 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,420 |
|
Loss | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | 524,418 |
| | 143,302 |
| | 108,824 |
| | 2,962 |
| | 15,647 |
| | 119,292 |
| | 74,610 |
| | 989,055 |
|
Ungraded Performing | | — |
| | — |
| | — |
| | 1,084,748 |
| | — |
| | — |
| | — |
| | 1,084,748 |
|
Total | | $ | 524,418 |
| | $ | 143,302 |
| | $ | 108,824 |
| | $ | 1,087,710 |
| | $ | 15,647 |
| | $ | 119,292 |
| | $ | 74,610 |
| | $ | 2,073,803 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2013 | | |
Asset Rating | | Commercial | | SBA | | Construction | | Indirect Automobile | | Installment | | Residential Mortgage | | Home Equity Lines of Credit | | Total |
Pass | | $ | 463,400 |
| | $ | 111,107 |
| | $ | 73,374 |
| | $ | — |
| | $ | 12,463 |
| | $ | 57,151 |
| | $ | 71,558 |
| | $ | 789,053 |
|
Special Mention | | 30,075 |
| | 5,487 |
| | 10,897 |
| | — |
| | 711 |
| | 175 |
| | 741 |
| | 48,086 |
|
Substandard | | 37,503 |
| | 18,230 |
| | 17,427 |
| | 3,021 |
| | 2,188 |
| | 3,602 |
| | 1,725 |
| | 83,696 |
|
Doubtful | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Loss | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | 530,978 |
| | 134,824 |
| | 101,698 |
| | 3,021 |
| | 15,362 |
| | 60,928 |
| | 74,024 |
| | 920,835 |
|
Ungraded Performing | | — |
| | — |
| | — |
| | 972,202 |
| | — |
| | — |
| | — |
| | 972,202 |
|
Total | | $ | 530,978 |
| | $ | 134,824 |
| | $ | 101,698 |
| | $ | 975,223 |
| | $ | 15,362 |
| | $ | 60,928 |
| | $ | 74,024 |
| | $ | 1,893,037 |
|
Purchased Credit Impaired ("PCI") Loans
The carrying amount of PCI loans at September 30, 2014 and December 31, 2013 follows.
|
| | | | | | | | |
(in thousands) | | September 30, 2014 | | December 31, 2013 |
Commercial | | $ | 24,802 |
|
| $ | 40,060 |
|
Construction | | 4,861 |
|
| 8,769 |
|
Consumer | | 1,974 |
|
| 3,050 |
|
Mortgage | | 8,800 |
|
| 9,997 |
|
Total carrying amount | | $ | 40,437 |
|
| $ | 61,876 |
|
Total outstanding balance | | $ | 46,877 |
| | $ | 72,910 |
|
Accretable yield, or income expected to be collected on PCI loans at September 30, 2014 and September 30, 2013, is as follows.
|
| | | | | | | | |
(in thousands) | | September 30, 2014 | | September 30, 2013 |
Beginning balance, January 1 | | $ | 2,188 |
|
| $ | 3,343 |
|
Accretion of income | | (2,295 | ) | | (2,363 | ) |
Other activity, net | | 629 |
|
| 203 |
|
Ending balance | | $ | 522 |
|
| $ | 1,183 |
|
6. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established as losses are estimated to have occurred through a provision charged to operations. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.
The allowance for loan losses is maintained at a level which, in management's opinion, is adequate to absorb credit losses inherent in the portfolio. The Company utilizes both peer group analysis, as well as a historical analysis of the Company's portfolio to validate the overall adequacy of the allowance for loan losses. In addition to these objective criteria, the Company subjectively assesses the adequacy of the allowance for loan losses with consideration given to current economic conditions, changes to loan policies, the volume and type of lending, composition of the portfolio, the level of classified and criticized credits, seasoning of the loan portfolio, payment status and other factors.
A summary of changes in the allowance for loan losses, by loan portfolio segment, for the three and nine months ended September 30, 2014 and 2013 is as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2014 |
(in thousands) | Commercial | | Construction | | Consumer | | Mortgage | | Covered | | Acquired, Non-covered | | Unallocated | | Total |
Beginning balance | $ | 15,426 |
| | $ | 1,279 |
| | $ | 5,639 |
| | $ | 3,092 |
| | $ | 1,856 |
| | $ | 314 |
| | $ | 1,306 |
| | $ | 28,912 |
|
Charge-offs | (1,358 | ) | | — |
| | (1,005 | ) | | (32 | ) | | (156 | ) | | (52 | ) | | — |
| | (2,603 | ) |
Recoveries | 21 |
| | 41 |
| | 391 |
| | 28 |
| | 79 |
| | — |
| | — |
| | 560 |
|
Net(charge-offs)/recoveries | (1,337 | ) | | 41 |
| | (614 | ) | | (4 | ) | | (77 | ) | | (52 | ) | | — |
| | (2,043 | ) |
Decrease in FDIC indemnification asset | — |
| | — |
| | — |
| | — |
| | (431 | ) | | — |
| | — |
| | (431 | ) |
Provision for loan losses(1) | 1,623 |
| | (76 | ) | | 587 |
| | 91 |
| | (125 | ) | | (141 | ) | | (100 | ) | | 1,859 |
|
Ending balance | $ | 15,712 |
| | $ | 1,244 |
| | $ | 5,612 |
| | $ | 3,179 |
| | $ | 1,223 |
| | $ | 121 |
| | $ | 1,206 |
| | $ | 28,297 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2013 |
(in thousands) | Commercial | | Construction | | Consumer | | Mortgage | | Covered | | Acquired, Non-covered | | Unallocated | | Total |
Beginning balance | $ | 15,551 |
| | $ | 4,119 |
| | $ | 6,135 |
| | $ | 3,291 |
| | $ | 2,374 |
| | $ | 528 |
| | $ | 1,311 |
| | $ | 33,309 |
|
Charge-offs | (477 | ) | | (6 | ) | | (1,376 | ) | | — |
| | (36 | ) | | (10 | ) | | — |
| | (1,905 | ) |
Recoveries | 70 |
| | 247 |
| | 388 |
| | 2 |
| | — |
| | — |
| | — |
| | 707 |
|
Net(charge-offs)/recoveries | (407 | ) | | 241 |
| | (988 | ) | | 2 |
| | (36 | ) | | (10 | ) | | — |
| | (1,198 | ) |
Increase in FDIC indemnification asset | — |
| | — |
| | — |
| | — |
| | 429 |
| | — |
| | — |
| | 429 |
|
Provision for loan losses(1) | 1,069 |
| | (2,115 | ) | | 1,946 |
| | 230 |
| | 150 |
| | (110 | ) | | (49 | ) | | 1,121 |
|
Ending balance | $ | 16,213 |
| | $ | 2,245 |
| | $ | 7,093 |
| | $ | 3,523 |
| | $ | 2,917 |
| | $ | 408 |
| | $ | 1,262 |
| | $ | 33,661 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2014 |
(in thousands) | Commercial | | Construction | | Consumer | | Mortgage | | Covered | | Acquired, Non-covered | | Unallocated | | Total |
Beginning balance | $ | 17,348 |
| | $ | 2,044 |
| | $ | 6,410 |
| | $ | 3,376 |
| | $ | 3,331 |
| | $ | 278 |
| | $ | 897 |
| | $ | 33,684 |
|
Charge-offs | (3,201 | ) | | (111 | ) | | (3,051 | ) | | (180 | ) | | (652 | ) | | (52 | ) | | — |
| | (7,247 | ) |
Recoveries | 33 |
| | 1,818 |
| | 1,071 |
| | 58 |
| | 288 |
| | 16 |
| | — |
| | 3,284 |
|
Net (charge-offs)/recoveries | (3,168 | ) | | 1,707 |
| | (1,980 | ) | | (122 | ) | | (364 | ) | | (36 | ) | | — |
| | (3,963 | ) |
Decrease in FDIC indemnification asset | — |
| | — |
| | — |
| | — |
| | (1,399 | ) | | — |
| | — |
| | (1,399 | ) |
Provision for loan losses(1) | 1,532 |
| | (2,507 | ) | | 1,182 |
| | (75 | ) | | (345 | ) | | (121 | ) | | 309 |
| | (25 | ) |
Ending balance | $ | 15,712 |
| | $ | 1,244 |
| | $ | 5,612 |
| | $ | 3,179 |
| | $ | 1,223 |
| | $ | 121 |
| |
|