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Allowance for Loan Losses and Credit Quality of Loans (Tables)
 3 Months Ended
Mar. 31, 2015
Allowance for Loan Losses and Credit Quality of Loans [Abstract]  
Portfolio and class segments
The following table illustrates the portfolio and class segments for the Company's loan portfolio:
  
Portfolio
Class
Commercial Loans
Commercial
 
Commercial Real Estate
 
Agricultural
 
Agricultural Real Estate
 
Business Banking
 
 
Consumer Loans
Indirect
 
Home Equity
 
Direct
 
 
Residential Real Estate Mortgages
 
Allowance for loan losses by portfolio
The following tables illustrate the changes in the allowance for loan losses by our portfolio segments for the three months ended March 31, 2015 and 2014:
 
Three months ended March 31,
 
Commercial Loans
  
Consumer Loans
  
Residential Real Estate Mortgages
  
Unallocated
  
Total
 
Balance as of December 31, 2014
 
$
32,433
  
$
26,720
  
$
7,130
  
$
76
  
$
66,359
 
Charge-offs
  
(798
)
  
(4,378
)
  
(504
)
  
-
   
(5,680
)
Recoveries
  
234
   
748
   
56
   
-
   
1,038
 
Provision
  
(591
)
  
3,066
   
1,016
   
151
   
3,642
 
Ending Balance as of March 31, 2015
 
$
31,278
  
$
26,156
  
$
7,698
  
$
227
  
$
65,359
 
 
                    
Balance as of December 31, 2013
 
$
35,090
  
$
27,694
  
$
6,520
  
$
130
  
$
69,434
 
Charge-offs
  
(479
)
  
(4,032
)
  
(319
)
  
-
   
(4,830
)
Recoveries
  
399
   
741
   
94
   
-
   
1,234
 
Provision
  
(573
)
  
4,033
   
(70
)
  
206
   
3,596
 
Ending Balance as of March 31, 2014
 
$
34,437
  
$
28,436
  
$
6,225
  
$
336
  
$
69,434
 
The following tables illustrate the allowance for loan losses and the recorded investment by portfolio segments as of March 31, 2015 and December 31, 2014:
 
Allowance for Loan Losses and Recorded Investment in Loans
(in thousands)
 
 
 
Commercial Loans
  
Consumer Loans
  
Residential Real Estate Mortgages
  
Unallocated
  
Total
 
As of March 31, 2015
 
  
  
  
  
 
Allowance for loan losses
 
$
31,278
  
$
26,156
  
$
7,698
  
$
227
  
$
65,359
 
 
                    
Allowance for loans individually evaluated for impairment
  
2,950
   
-
   
-
       
2,950
 
 
                    
Allowance for loans collectively evaluated for impairment
 
$
28,328
  
$
26,156
  
$
7,698
  
$
227
  
$
62,409
 
 
                    
Ending balance of loans
 
$
2,484,300
  
$
2,013,123
  
$
1,125,600
      
$
5,623,023
 
 
                    
Ending balance of originated loans individually evaluated for impairment
  
12,253
   
6,423
   
4,269
       
22,945
 
Ending balance of acquired loans individually evaluated for impairment
  
9,772
   
-
   
-
       
9,772
 
Ending balance of acquired loans collectively evaluated for impairment
  
315,466
   
132,675
   
260,857
       
708,998
 
Ending balance of originated loans collectively evaluated for impairment
 
$
2,146,809
  
$
1,874,025
  
$
860,474
      
$
4,881,308
 
 
                    
As of December 31, 2014
                    
Allowance for loan losses
 
$
32,433
  
$
26,720
  
$
7,130
  
$
76
  
$
66,359
 
 
                    
Allowance for loans individually evaluated for impairment
  
1,100
   
-
   
-
       
1,100
 
 
                    
Allowance for loans collectively evaluated for impairment
 
$
31,333
  
$
26,720
  
$
7,130
  
$
76
  
$
65,259
 
 
                    
Ending balance of loans
 
$
2,473,702
  
$
2,005,980
  
$
1,115,589
      
$
5,595,271
 
 
                    
Ending balance of originated loans individually evaluated for impairment
  
11,079
   
5,498
   
3,544
       
20,121
 
Ending balance of acquired loans individually evaluated for impairment
  
5,675
   
-
   
-
       
5,675
 
Ending balance of acquired loans collectively evaluated for impairment
  
327,656
   
147,256
   
266,747
       
741,659
 
Ending balance of originated loans collectively evaluated for impairment
 
$
2,129,292
  
$
1,853,226
  
$
845,298
      
$
4,827,816
 
Past due and nonperforming loans by loan class
The following tables set forth information with regard to past due and nonperforming loans by loan class as of March 31, 2015 and December 31, 2014:
 
Age Analysis of Past Due Financing Receivables
As of March 31, 2015
(in thousands)
 
  
31-60 DaysPast DueAccruing
  
61-90 DaysPast DueAccruing
  
Greater Than90 DaysPast DueAccruing
  
TotalPast DueAccruing
  
Non-Accrual
  
Current
  
RecordedTotalLoans
 
ORIGINATED
 
  
  
  
  
  
  
 
Commercial Loans
 
  
  
  
  
  
  
 
Commercial
 
$
348
  
$
-
  
$
35
  
$
383
  
$
1,019
  
$
620,111
  
$
621,513
 
Commercial Real Estate
  
133
   
37
   
-
   
170
   
6,231
   
1,076,218
   
1,082,619
 
Agricultural
  
129
   
-
   
-
   
129
   
800
   
31,080
   
32,009
 
Agricultural Real Estate
  
7
   
-
   
-
   
7
   
561
   
23,963
   
24,531
 
Business Banking
  
602
   
192
   
42
   
836
   
6,624
   
390,930
   
398,390
 
 
  
1,219
   
229
   
77
   
1,525
   
15,235
   
2,142,302
   
2,159,062
 
 
                            
Consumer Loans
                            
Indirect
  
11,794
   
2,348
   
1,722
   
15,864
   
2,056
   
1,327,653
   
1,345,573
 
Home Equity
  
3,507
   
804
   
484
   
4,795
   
6,160
   
470,340
   
481,295
 
Direct
  
375
   
80
   
22
   
477
   
130
   
52,973
   
53,580
 
 
  
15,676
   
3,232
   
2,228
   
21,136
   
8,346
   
1,850,966
   
1,880,448
 
Residential Real Estate Mortgages
  
3,194
   
1,264
   
255
   
4,713
   
7,518
   
852,512
   
864,743
 
 
 
$
20,089
  
$
4,725
  
$
2,560
  
$
27,374
  
$
31,099
  
$
4,845,780
  
$
4,904,253
 
 
                            
ACQUIRED
                            
Commercial Loans
                            
Commercial
 
$
42
  
$
-
  
$
-
  
$
42
  
$
2,517
  
$
70,010
  
$
72,569
 
Commercial Real Estate
  
-
   
-
   
-
   
-
   
7,247
   
190,518
   
197,765
 
Business Banking
  
-
   
2
   
-
   
2
   
488
   
54,414
   
54,904
 
 
  
42
   
2
   
-
   
44
   
10,252
   
314,942
   
325,238
 
 
                            
Consumer Loans
                            
Indirect
  
343
   
44
   
37
   
424
   
146
   
53,577
   
54,147
 
Home Equity
  
212
   
50
   
-
   
262
   
427
   
73,029
   
73,718
 
Direct
  
76
   
4
   
4
   
84
   
28
   
4,698
   
4,810
 
 
  
631
   
98
   
41
   
770
   
601
   
131,304
   
132,675
 
Residential Real Estate Mortgages
  
1,472
   
650
   
-
   
2,122
   
3,101
   
255,634
   
260,857
 
  
$
2,145
  
$
750
  
$
41
  
$
2,936
  
$
13,954
  
$
701,880
  
$
718,770
 
  Total Loans
 
$
22,234
  
$
5,475
  
$
2,601
  
$
30,310
  
$
45,053
  
$
5,547,660
  
$
5,623,023
 
 
 
Age Analysis of Past Due Financing Receivables
As of December 31, 2014
(in thousands)
 
  
31-60 DaysPast DueAccruing
  
61-90 DaysPast DueAccruing
  
Greater Than90 DaysPast DueAccruing
  
TotalPast DueAccruing
  
Non-Accrual
  
Current
  
RecordedTotalLoans
 
ORIGINATED
 
  
  
  
  
  
  
 
Commercial Loans
 
  
  
  
  
  
  
 
Commercial
 
$
-
  
$
735
  
$
-
  
$
735
  
$
1,012
  
$
613,400
  
$
615,147
 
Commercial Real Estate
  
192
   
-
   
-
   
192
   
4,127
   
1,064,549
   
1,068,868
 
Agricultural
  
-
   
-
   
-
   
-
   
817
   
32,130
   
32,947
 
Agricultural Real Estate
  
19
   
-
   
-
   
19
   
565
   
24,390
   
24,974
 
Business Banking
  
799
   
235
   
84
   
1,118
   
6,910
   
390,407
   
398,435
 
 
  
1,010
   
970
   
84
   
2,064
   
13,431
   
2,124,876
   
2,140,371
 
 
                            
Consumer Loans
                            
Indirect
  
16,434
   
3,154
   
1,991
   
21,579
   
1,964
   
1,286,507
   
1,310,050
 
Home Equity
  
4,591
   
1,428
   
821
   
6,840
   
6,596
   
479,444
   
492,880
 
Direct
  
560
   
157
   
52
   
769
   
84
   
54,941
   
55,794
 
 
  
21,585
   
4,739
   
2,864
   
29,188
   
8,644
   
1,820,892
   
1,858,724
 
Residential Real Estate Mortgages
  
2,901
   
96
   
1,256
   
4,253
   
8,770
   
835,819
   
848,842
 
 
 
$
25,496
  
$
5,805
  
$
4,204
  
$
35,505
  
$
30,845
  
$
4,781,587
  
$
4,847,937
 
                             
 
                            
ACQUIRED
                            
Commercial Loans
                            
Commercial
 
$
-
  
$
-
  
$
-
  
$
-
  
$
3,009
  
$
72,255
  
$
75,264
 
Commercial Real Estate
  
-
   
-
   
-
   
-
   
2,666
   
197,222
   
199,888
 
Business Banking
  
5
   
15
   
-
   
20
   
665
   
57,494
   
58,179
 
 
  
5
   
15
   
-
   
20
   
6,340
   
326,971
   
333,331
 
 
                            
Consumer Loans
                            
Indirect
  
518
   
5
   
54
   
577
   
106
   
64,540
   
65,223
 
Home Equity
  
190
   
60
   
5
   
255
   
557
   
75,904
   
76,716
 
Direct
  
31
   
-
   
7
   
38
   
33
   
5,246
   
5,317
 
   
739
   
65
   
66
   
870
   
696
   
145,690
   
147,256
 
Residential Real Estate Mortgages
  
1,162
   
265
   
671
   
2,098
   
3,193
   
261,456
   
266,747
 
 
 
$
1,906
  
$
345
  
$
737
  
$
2,988
  
$
10,229
  
$
734,117
  
$
747,334
 
Total Loans
 
$
27,402
  
$
6,150
  
$
4,941
  
$
38,493
  
$
41,074
  
$
5,515,704
  
$
5,595,271
 
Impaired loans and specific reserve allocations
The following table provides information on loans specifically evaluated for impairment as of March 31, 2015 and December 31, 2014:
 
 
 
March 31, 2015
  
December 31, 2014
 
(in thousands)
 
Recorded
Investment
Balance(Book)
  
Unpaid
Principal
Balance(Legal)
 
Related
Allowance
  
Recorded
Investment
Balance(Book)
  
Unpaid
Principal
Balance(Legal)
 
Related
Allowance
 
ORIGINATED
 
  
 
  
  
 
 
With no related allowance recorded:
 
  
 
  
  
 
 
Commercial Loans
 
  
 
  
  
 
 
Commercial
 
$
1,628
  
$
1,781
   
$
1,748
  
$
1,901
  
Commercial Real Estate
  
4,227
   
4,238
 
   
4,505
   
4,520
 
 
Agricultural
  
19
   
25
 
   
20
   
26
 
 
Agricultural Real Estate
  
633
   
759
 
   
1,147
   
1,441
 
 
Business Banking
  
869
   
910
 
   
896
   
1,301
 
 
Total Commercial Loans
  
7,376
   
7,713
 
   
8,316
   
9,189
 
 
 
        
         
 
Consumer Loans
        
         
 
Indirect
  
17
   
26
    
-
   
-
  
Home Equity
  
6,403
   
7,056
 
   
5,498
   
6,033
 
 
       Direct
  
3
   
3
    
-
   
-
  
    Total Consumer Loans
  
6,423
   
7,085
    
5,498
   
6,033
  
 
        
         
 
Residential Real Estate Mortgages
  
4,269
   
4,742
    
3,544
   
3,959
  
Total
  
18,068
   
19,540
 
   
17,358
   
19,181
 
 
 
                  
With an allowance recorded:
        
         
 
Commercial Loans
        
         
 
Commercial Real Estate
  
4,877
   
6,725
  
$
1,100
   
2,763
   
4,611
  $
600
 
                         
ACQUIRED
                        
With no related allowance recorded:
                        
Commercial Loans
                        
Commercial Real Estate
  
5,935
   
7,109
       
2,666
   
3,830
     
                         
With an allowance recorded:
                        
Commercial Loans
                        
Commercial
  
2,508
   
4,668
   
1,000
   
3,009
   
4,668
   
500
 
          Commercial Real Estate
  
1,329
   
1,329
   
850
   
-
   
-
   
-
 
    Total Commercial Loans
  
3,837
   
5,997
   
1,850
   
3,009
   
4,668
   
500
 
                         
Total:
 
$
32,717
  
$
39,371
  
$
2,950
  
$
25,796
  
$
32,290
  
$
1,100
 
 
The following tables summarize the average recorded investments on impaired loans specifically evaluated for impairment and the interest income recognized for the three months ended March 31, 2015 and 2014:
 
 
 
For the three months ended
 
 
 
March 31, 2015
  
March 31, 2014
 
(in thousands)
 
Average Recorded Investment
  
Interest Income Recognized
  
Average Recorded Investment
  
Interest Income Recognized
 
ORIGINATED
 
  
  
  
 
Commercial Loans
 
  
  
  
 
Commercial
 
$
1,689
  
$
25
  
$
2,038
  
$
-
 
Commercial Real Estate
  
9,125
   
41
   
11,553
   
42
 
Agricultural
  
20
   
-
   
125
   
-
 
Agricultural Real Estate
  
636
   
11
   
1,424
   
12
 
Business Banking
  
873
   
4
   
185
   
12
 
Consumer Loans
                
Indirect
  
9
   
-
   
-
   
-
 
Home Equity
  
6,388
   
72
   
4,282
   
43
 
Direct
  
2
   
-
   
-
   
-
 
Residential Real Estate Mortgage
  
4,265
   
30
   
2,727
   
23
 
Total Originated
 
$
23,007
  
$
183
  
$
22,334
  
$
132
 
ACQUIRED
                
Commercial Loans
                
Commercial
  
2,883
   
-
   
6,436
   
-
 
Commercial Real Estate
  
7,136
   
-
   
3,524
   
-
 
Total Acquired
 
$
10,019
  
$
-
  
$
9,960
  
$
-
 
Total Loans
 
$
33,026
  
$
183
  
$
32,294
  
$
132
 
Financing receivable credit quality by loan class
The following tables illustrate the Company's credit quality by loan class as of March 31, 2015 and December 31, 2014:
 
Credit Quality Indicators
As of March 31, 2015
 
ORIGINATED
 
  
  
  
  
 
Commercial Credit Exposure
By Internally Assigned Grade:
 
Commercial
  
Commercial
Real Estate
  
Agricultural
  
Agricultural
Real Estate
  
Total
 
Pass
 
$
584,916
  
$
1,036,469
  
$
29,781
  
$
22,916
  
$
1,674,082
 
Special Mention
  
15,872
   
19,820
   
117
   
3
   
35,812
 
Substandard
  
20,725
   
26,330
   
2,103
   
1,612
   
50,770
 
Doubtful
  
-
   
-
   
8
   
-
   
8
 
Total
 
$
621,513
  
$
1,082,619
  
$
32,009
  
$
24,531
  
$
1,760,672
 
 
                    
Business Banking Credit Exposure
By Internally Assigned Grade:
 
Business
Banking
              
Total
 
Non-classified
 
$
379,306
              
$
379,306
 
Classified
  
19,084
               
19,084
 
Total
 
$
398,390
              
$
398,390
 
 
                    
Consumer Credit Exposure
By Payment Activity:
 
Indirect
  
Home Equity
  
Direct
      
Total
 
Performing
 
$
1,341,795
  
$
474,651
  
$
53,428
      
$
1,869,874
 
Nonperforming
  
3,778
   
6,644
   
152
       
10,574
 
Total
 
$
1,345,573
  
$
481,295
  
$
53,580
      
$
1,880,448
 
 
                    
Residential Mortgage Credit Exposure
By Payment Activity:
 
Residential Mortgage
              
Total
 
Performing
 
$
856,970
              
$
856,970
 
Nonperforming
  
7,773
               
7,773
 
Total
 
$
864,743
              
$
864,743
 
 
 
Credit Quality Indicators
As of March 31, 2015
 
ACQUIRED
 
  
  
  
 
Commercial Credit Exposure By Internally Assigned Grade:
 
Commercial
  
Commercial
Real Estate
  
 
  
Total
 
Pass
 
$
64,904
  
$
181,277
  
 
 
  
$
246,181
 
Special Mention
  
2,662
   
2,620
   
 
   
5,282
 
Substandard
  
5,003
   
13,868
   
 
   
18,871
 
Total
 
$
72,569
  
$
197,765
  
 
 
  
$
270,334
 
 
                
Business Banking Credit Exposure By Internally Assigned Grade:
 
Business
Banking
          
Total
 
Non-classified
 
$
50,222
          
$
50,222
 
Classified
  
4,682
           
4,682
 
Total
 
$
54,904
          
$
54,904
 
 
                
Consumer Credit Exposure By Payment Activity:
 
Indirect
  
Home Equity
  
Direct
  
Total
 
Performing
 
$
53,964
  
$
73,291
  
$
4,778
  
$
132,033
 
Nonperforming
  
183
   
427
   
32
   
642
 
Total
 
$
54,147
  
$
73,718
  
$
4,810
  
$
132,675
 
 
                
Residential Mortgage Credit Exposure By Payment Activity:
 
Residential Mortgage
          
Total
 
Performing
 
$
257,756
          
$
257,756
 
Nonperforming
  
3,101
           
3,101
 
Total
 
$
260,857
          
$
260,857
 
 
Credit Quality Indicators
As of December 31, 2014
 
ORIGINATED
 
  
  
  
  
 
Commercial Credit Exposure By Internally Assigned Grade:
 
Commercial
  
Commercial
Real Estate
  
Agricultural
  
Agricultural
Real Estate
  
Total
 
Pass
 
$
570,884
  
$
1,023,856
  
$
30,481
  
$
23,443
  
$
1,648,664
 
Special Mention
  
6,022
   
17,341
   
275
   
42
   
23,680
 
Substandard
  
38,241
   
27,671
   
2,183
   
1,489
   
69,584
 
Doubtful
  
-
   
-
   
8
   
-
   
8
 
Total
 
$
615,147
  
$
1,068,868
  
$
32,947
  
$
24,974
  
$
1,741,936
 
 
                    
Business Banking Credit Exposure By Internally Assigned Grade:
 
Business
Banking
              
Total
 
Non-classified
 
$
379,445
              
$
379,445
 
Classified
  
18,990
               
18,990
 
Total
 
$
398,435
              
$
398,435
 
Total
                    
Consumer Credit Exposure By Payment Activity:
 
Indirect
  
Home Equity
  
Direct
      
Total
 
Performing
 
$
1,306,095
  
$
485,463
  
$
55,658
      
$
1,847,216
 
Nonperforming
  
3,955
   
7,417
   
136
       
11,508
 
Total
 
$
1,310,050
  
$
492,880
  
$
55,794
      
$
1,858,724
 
 
                    
Residential Mortgage Credit Exposure By Payment Activity:
 
Residential Mortgage
              
Total
 
Performing
 
$
838,816
              
$
838,816
 
Nonperforming
  
10,026
               
10,026
 
Total
 
$
848,842
              
$
848,842
 
 
 
Credit Quality Indicators
As of December 31, 2014
 
ACQUIRED
 
  
  
  
 
Commercial Credit Exposure By Internally Assigned Grade:
 
Commercial
  
Commercial
Real Estate
    
Total
 
Pass
 
$
63,630
  
$
186,036
  
 
 
  
$
249,666
 
Special Mention
  
2,840
   
2,646
   
 
   
5,486
 
Substandard
  
8,794
   
11,206
   
 
   
20,000
 
Total
 
$
75,264
  
$
199,888
  
 
 
  
$
275,152
 
 
                
Business Banking Credit Exposure By Internally Assigned Grade:
 
Business
Banking
          
Total
 
Non-classified
 
$
53,264
          
$
53,264
 
Classified
  
4,915
           
4,915
 
Total
 
$
58,179
          
$
58,179
 
 
                
Consumer Credit Exposure By Payment Activity:
 
Indirect
  
Home Equity
  
Direct
  
Total
 
Performing
 
$
65,063
  
$
76,154
  
$
5,277
  
$
146,494
 
Nonperforming
  
160
   
562
   
40
   
762
 
Total
 
$
65,223
  
$
76,716
  
$
5,317
  
$
147,256
 
 
                
Residential Mortgage Credit Exposure By Payment Activity:
 
Residential Mortgage
          
Total
 
Performing
 
$
262,883
          
$
262,883
 
Nonperforming
  
3,864
           
3,864
 
Total
 
$
266,747
          
$
266,747