XML 58 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.8

LOANS | 9 Months Ended
--- | ---
Sep. 30, 2014
LOANS [Abstract] |
LOANS | NOTE E: LOANS The segments of the Company’s loan portfolio are disaggregated into the following classes that allow management to monitor risk and performance:
· | Consumer mortgages consist primarily of fixed rate residential instruments, typically 10 – 30 years in contractual term, secured by first liens on real property.
· | Business lending is comprised of general purpose commercial and industrial loans including, but not limited to agricultural-related and dealer floor plans, as well as mortgages on commercial properties.
· | Consumer indirect consists primarily of installment loans originated through selected dealerships and are secured by automobiles, marine and other recreational vehicles.
· | Consumer direct consists of all other loans to consumers such as personal installment loans and lines of credit.
· | Home equity products are consumer purpose installment loans or lines of credit most often secured by a first or second lien position on residential real estate with terms up to 30 years.
The balances of these classes are summarized as follows:
| September 30, | December 31,
(000's omitted) | 2014 | 2013
Consumer mortgage | $1,598,298 | $1,582,058
Business lending | 1,251,178 | 1,260,364
Consumer indirect | 841,975 | 740,002
Consumer direct | 186,672 | 180,139
Home equity | 339,121 | 346,520
Gross loans, including deferred origination costs | 4,217,244 | 4,109,083
Allowance for loan losses | (45,273) | (44,319)
Loans, net of allowance for loan losses | $4,171,971 | $4,064,764
The outstanding balance related to credit impaired acquired loans was $7.0 million and $13.1 million at September 30, 2014 and December 31, 2013, respectively. The changes in the accretable discount related to the credit impaired acquired loans are as follows:
(000’s omitted) |
Balance at December 31, 2013 | $997
Accretion recognized, year-to-date | (567)
Net reclassification to accretable from nonaccretable | 355
Balance at September 30, 2014 | $785
Credit Quality Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed on a monthly basis to identify loans for non-accrual status. The following is an aged analysis of the Company’s past due loans, by class as of September 30, 2014: Legacy Loans (excludes loans acquired after January 1, 2009)
| Past Due | 90+ Days Past |  |  |  |
| 30 – 89 | Due and |  | Total |  |
(000’s omitted) | Days | Still Accruing | Nonaccrual | Past Due | Current | Total Loans
Consumer mortgage | $12,044 | $2,074 | $12,228 | $26,346 | $1,499,800 | $1,526,146
Business lending | 3,567 | 66 | 3,005 | 6,638 | 1,101,014 | 1,107,652
Consumer indirect | 9,483 | 115 | 11 | 9,609 | 830,786 | 840,395
Consumer direct | 1,201 | 20 | 2 | 1,223 | 179,165 | 180,388
Home equity | 2,349 | 269 | 2,067 | 4,685 | 272,045 | 276,730
Total | $28,644 | $2,544 | $17,313 | $48,501 | $3,882,810 | $3,931,311
Acquired Loans (includes loans acquired after January 1, 2009)
| Past Due | 90+ Days Past |  |  |  |  |
| 30 – 89 | Due and |  | Total | Acquired |  |
(000’s omitted) | Days | Still Accruing | Nonaccrual | Past Due | Impaired(1) | Current | Total Loans
Consumer mortgage | $2,303 | $53 | $2,033 | $4,389 | $0 | $67,763 | $72,152
Business lending | 134 | 0 | 1,421 | 1,555 | 5,487 | 136,484 | 143,526
Consumer indirect | 64 | 0 | 0 | 64 | 0 | 1,516 | 1,580
Consumer direct | 148 | 18 | 0 | 166 | 0 | 6,118 | 6,284
Home equity | 483 | 75 | 556 | 1,114 | 0 | 61,277 | 62,391
Total | $3,132 | $146 | $4,010 | $7,288 | $5,487 | $273,158 | $285,933
(1) | Acquired impaired loans were not classified as nonperforming assets as the loans are considered to be performing under ASC 310-30. As a result interest income, through the accretion of the difference between the carrying amount of the loans and the expected cashflows, is being recognized on all acquired impaired loans.
The following is an aged analysis of the Company’s past due loans by class as of December 31, 2013: Legacy Loans (excludes loans acquired after January 1, 2009)
| Past Due | 90+ Days Past |  |  |  |
| 30 – 89 | Due and |  | Total |  |
(000’s omitted) | Days | Still Accruing | Nonaccrual | Past Due | Current | Total Loans
Consumer mortgage | $16,589 | $1,253 | $11,097 | $28,939 | $1,473,320 | $1,502,259
Business lending | 2,960 | 164 | 3,083 | 6,207 | 1,079,818 | 1,086,025
Consumer indirect | 11,647 | 738 | 14 | 12,399 | 723,878 | 736,277
Consumer direct | 1,858 | 90 | 4 | 1,952 | 169,452 | 171,404
Home equity | 2,635 | 173 | 1,867 | 4,675 | 271,235 | 275,910
Total | $35,689 | $2,418 | $16,065 | $54,172 | $3,717,703 | $3,771,875
Acquired Loans (includes loans acquired after January 1, 2009)
| Past Due | 90+ Days Past |  |  |  |  |
| 30 – 89 | Due and |  | Total | Acquired |  |
(000’s omitted) | Days | Still Accruing | Nonaccrual | Past Due | Impaired(1) | Current | Total Loans
Consumer mortgage | $1,857 | $85 | $1,463 | $3,405 | $0 | $76,394 | $79,799
Business lending | 531 | 0 | 1,472 | 2,003 | 7,090 | 165,246 | 174,339
Consumer indirect | 157 | 17 | 0 | 174 | 0 | 3,551 | 3,725
Consumer direct | 385 | 27 | 0 | 412 | 0 | 8,323 | 8,735
Home equity | 592 | 8 | 473 | 1,073 | 0 | 69,537 | 70,610
Total | $3,522 | $137 | $3,408 | $7,067 | $7,090 | $323,051 | $337,208
(1) | Acquired impaired loans were not classified as nonperforming assets as the loans are considered to be performing under ASC 310-30. As a result interest income, through the accretion of the difference between the carrying amount of the loans and the expected cashflows, is being recognized on all acquired impaired loans.
The Company uses several credit quality indicators to assess credit risk in an ongoing manner. The Company’s primary credit quality indicator for its business lending portfolio is an internal credit risk rating system that categorizes loans as “pass”, “special mention”, or “classified”. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. In general, the following are the definitions of the Company’s credit quality indicators:
Pass | The condition of the borrower and the performance of the loans are satisfactory or better.
Special Mention | The condition of the borrower has deteriorated although the loan performs as agreed.
Classified | The condition of the borrower has significantly deteriorated and the performance of the loan could further deteriorate, if deficiencies are not corrected.
Doubtful | The condition of the borrower has deteriorated to the point that collection of the balance is improbable based on current facts and conditions.
The following table shows the amount of business lending loans by credit quality category:
| September 30, 2014 |  | December 31, 2013
(000’s omitted) | Legacy | Acquired | Total |  | Legacy | Acquired | Total
Pass | $927,154 | $95,640 | $1,022,794 |  | $908,885 | $116,271 | $1,025,156
Special mention | 104,353 | 20,567 | 124,920 |  | 93,600 | 24,264 | 117,864
Classified | 76,145 | 21,832 | 97,977 |  | 83,379 | 26,714 | 110,093
Doubtful | 0 | 0 | 0 |  | 161 | 0 | 161
Acquired impaired | 0 | 5,487 | 5,487 |  | 0 | 7,090 | 7,090
Total | $1,107,652 | $143,526 | $1,251,178 |  | $1,086,025 | $174,339 | $1,260,364
All other loans are underwritten and structured using standardized criteria and characteristics, primarily payment performance, and are normally risk rated and monitored collectively on a monthly basis. These are typically loans to individuals in the consumer categories and are delineated as either performing or nonperforming. Performing loans include current, 30 - 89 days past due and acquired impaired loans. Nonperforming loans include 90+ days past due and still accruing and nonaccrual loans. The following table details the balances in all other loan categories at September 30, 2014: Legacy loans (excludes loans acquired after January 1, 2009)
| Consumer | Consumer | Consumer | Home |
(000’s omitted) | Mortgage | Indirect | Direct | Equity | Total
Performing | $1,511,844 | $840,269 | $180,366 | $274,394 | $2,806,873
Nonperforming | 14,302 | 126 | 22 | 2,336 | 16,786
Total | $1,526,146 | $840,395 | $180,388 | $276,730 | $2,823,659
Acquired loans (includes loans acquired after January 1, 2009)
| Consumer | Consumer | Consumer | Home |
(000’s omitted) | Mortgage | Indirect | Direct | Equity | Total
Performing | $70,066 | $1,580 | $6,266 | $61,760 | $139,672
Nonperforming | 2,086 | 0 | 18 | 631 | 2,735
Total | $72,152 | $1,580 | $6,284 | $62,391 | $142,407
The following table details the balances in all other loan categories at December 31, 2013: Legacy loans (excludes loans acquired after January 1, 2009)
| Consumer | Consumer | Consumer | Home |
(000’s omitted) | Mortgage | Indirect | Direct | Equity | Total
Performing | $1,489,909 | $735,525 | $171,310 | $273,870 | $2,670,614
Nonperforming | 12,350 | 752 | 94 | 2,040 | 15,236
Total | $1,502,259 | $736,277 | $171,404 | $275,910 | $2,685,850
Acquired loans (includes loans acquired after January 1, 2009)
| Consumer | Consumer | Consumer | Home |
(000’s omitted) | Mortgage | Indirect | Direct | Equity | Total
Performing | $78,251 | $3,708 | $8,708 | $70,129 | $160,796
Nonperforming | 1,548 | 17 | 27 | 481 | 2,073
Total | $79,799 | $3,725 | $8,735 | $70,610 | $162,869
All loan classes are collectively evaluated for impairment except business lending, as described in Note C. A summary of individually evaluated impaired loans as of September 30, 2014 and December 31, 2013 follows:
| September 30, | December 31,
(000’s omitted) | 2014 | 2013
Loans with allowance allocation | $945 | $945
Loans without allowance allocation | 0 | 600
Carrying balance | 945 | 1,545
Contractual balance | 1,003 | 1,852
Specifically allocated allowance | 50 | 50
In the course of working with borrowers, the Company may choose to restructure the contractual terms of certain loans. In this scenario, the Company attempts to work-out an alternative payment schedule with the borrower in order to optimize collectability of the loan. Any loans that are modified are reviewed by the Company to identify if a troubled debt restructuring (“TDR”) has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial standing and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two. With regard to determination of the amount of the allowance for loan losses, troubled debt restructured loans are considered to be impaired. As a result, the determination of the amount of allowance for loan losses related to impaired loans for each portfolio segment within TDRs is the same as detailed previously. In accordance with the clarified guidance issued by the Office of the Comptroller of the Currency (“OCC”) in 2012 addressing the accounting for certain loans that have been discharged in Chapter 7 bankruptcy, loans that have been discharged in Chapter 7 bankruptcy but not reaffirmed by the borrower, are classified as TDRs, irrespective of payment history or delinquency status, even if the repayment terms for the loan have not been otherwise modified. The Company’s lien position against the underlying collateral remains unchanged. Pursuant to that guidance, the Company records a charge-off equal to any portion of the carrying value that exceeds the net realizable value of the collateral. The amount of loss incurred in 2014 and 2013 was immaterial. TDRs less than $0.5 million are collectively included in the general loan loss allocation and the qualitative review, if necessary. Commercial loans greater than $0.5 million are individually evaluated for impairment, and if necessary, a specific allocation of the allowance for loan losses is provided. Information regarding TDRs as of September 30, 2014 and December 31, 2013 is as follows:
| September 30, 2014 |  | December 31, 2013
(000’s omitted) | Nonaccrual | Accruing | Total |  | Nonaccrual | Accruing | Total
| # | Amount | # | Amount | # | Amount |  | # | Amount | # | Amount | # | Amount
Consumer mortgage | 37 | $1,796 | 50 | $2,215 | 87 | $4,011 |  | 31 | $1,682 | 48 | $2,171 | 79 | $3,853
Business lending | 7 | 609 | 2 | 93 | 9 | 702 |  | 4 | 162 | 1 | 47 | 5 | 209
Consumer indirect | 0 | 0 | 81 | 693 | 81 | 693 |  | 0 | 0 | 98 | 692 | 98 | 692
Consumer direct | 0 | 0 | 19 | 80 | 19 | 80 |  | 0 | 0 | 46 | 116 | 46 | 116
Home equity | 14 | 297 | 14 | 328 | 28 | 625 |  | 12 | 202 | 20 | 363 | 32 | 565
Total | 58 | $2,702 | 166 | $3,409 | 224 | $6,111 |  | 47 | $2,046 | 213 | $3,389 | 260 | $5,435
The following table presents information related to loans modified in a TDR during the three and nine months ended September 30, 2014. Of the loans noted in the table below, all but two loans for the three and nine months ended September 30, 2014 were modified due to a Chapter 7 bankruptcy as described previously. The two exceptions were business loans restructured via granting a waiver of payments for a period of time. The financial effects of these restructurings were immaterial.
| Three Month Ended September 30, 2014 |  | Nine Month Ended September 30, 2014
(000’s omitted) | Number of loans modified | Outstanding Balance |  | Number of loans modified | Outstanding Balance
Consumer mortgage | 6 | $283 |  | 22 | $1,016
Business lending | 0 | 0 |  | 7 | 556
Consumer indirect | 16 | 165 |  | 29 | 334
Consumer direct | 5 | 7 |  | 7 | 14
Home equity | 0 | 0 |  | 5 | 173
Total | 27 | $455 |  | 70 | $2,093
Allowance for Loan Losses The allowance for loan losses is general in nature and is available to absorb losses from any loan type despite the analysis below. The following presents by class the activity in the allowance for loan losses:
| Three Months Ended September 30, 2014
| Consumer | Business | Consumer | Consumer | Home |  | Acquired |
(000’s omitted) | Mortgage | Lending | Indirect | Direct | Equity | Unallocated | Impaired | Total
Beginning balance | $9,375 | $16,553 | $11,354 | $3,298 | $1,860 | $2,012 | $163 | $44,615
Charge-offs | (203) | (435) | (1,711) | (307) | (74) | 0 | (10) | (2,740)
Recoveries | 14 | 335 | 1,025 | 239 | 38 | 0 | 0 | 1,651
Provision | 268 | 138 | 1,231 | 100 | 77 | (65) | (2) | 1,747
Ending balance | $9,454 | $16,591 | $11,899 | $3,330 | $1,901 | $1,947 | $151 | $45,273
| Three Months Ended September 30, 2013
| Consumer | Business | Consumer | Consumer | Home |  | Acquired |
(000’s omitted) | Mortgage | Lending | Indirect | Direct | Equity | Unallocated | Impaired | Total
Beginning balance | $7,373 | $18,283 | $9,369 | $3,054 | $1,674 | $2,745 | $975 | $43,473
Charge-offs | (217) | (1,012) | (1,186) | (348) | (59) | 0 | (59) | (2,881)
Recoveries | 2 | 375 | 811 | 206 | 4 | 0 | 0 | 1,398
Provision | 443 | 625 | 1,074 | 253 | 95 | (500) | 103 | 2,093
Ending balance | $7,601 | $18,271 | $10,068 | $3,165 | $1,714 | $2,245 | $1,019 | $44,083
| Nine Months Ended September 30, 2014
| Consumer | Business | Consumer | Consumer | Home |  | Acquired |
(000’s omitted) | Mortgage | Lending | Indirect | Direct | Equity | Unallocated | Impaired | Total
Beginning balance | $8,994 | $17,507 | $10,248 | $3,181 | $1,830 | $2,029 | $530 | $44,319
Charge-offs | (734) | (940) | (4,573) | (1,219) | (450) | 0 | (30) | (7,946)
Recoveries | 67 | 607 | 2,826 | 677 | 76 | 0 | 0 | 4,253
Provision | 1,127 | (583) | 3,398 | 691 | 445 | (82) | (349) | 4,647
Ending balance | $9,454 | $16,591 | $11,899 | $3,330 | $1,901 | $1,947 | $151 | $45,273
| Nine Months Ended September 30, 2013
| Consumer | Business | Consumer | Consumer | Home |  | Acquired |
(000’s omitted) | Mortgage | Lending | Indirect | Direct | Equity | Unallocated | Impaired | Total
Beginning balance | $7,070 | $18,013 | $9,606 | $3,303 | $1,451 | $2,666 | $779 | $42,888
Charge-offs | (817) | (2,075) | (3,075) | (1,300) | (379) | 0 | (59) | (7,705)
Recoveries | 15 | 619 | 2,682 | 761 | 16 | 0 | 0 | 4,093
Provision | 1,333 | 1,714 | 855 | 401 | 626 | (421) | 299 | 4,807
Ending balance | $7,601 | $18,271 | $10,068 | $3,165 | $1,714 | $2,245 | $1,019 | $44,083

X
- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.3,4) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 3, 4 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=28368275&loc=d3e5074-111524 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=28368275&loc=d3e5066-111524 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 7 -Article 9 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph k -Article 4 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=28368275&loc=d3e5162-111524 + Details
Name: | us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_LoansReceivableNetAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration