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Allowance for Loan and Lease Losses | 9 Months Ended
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Sep. 30, 2014
Loans Receivable [Abstract] |
Allowance For Credit Losses Text Block | NOTE 5 – ALLOWANCE FOR LOAN AND LEASE LOSSES The composition of the Company's allowance for loan and lease losses at September 30, 2014 and December 31, 2013 was as follows:
| September 30, |  | December 31,
| 2014 |  | 2013
| (In thousands)
Allowance for loans and lease losses on non-covered loans: |  |  |  |  |
Originated and other loans and leases held for investment: |  |  |  |  |
Mortgage | $ | 18,872 |  | $ | 19,937
Commercial |  | 9,112 |  |  | 14,897
Consumer |  | 8,709 |  |  | 6,006
Auto and leasing |  | 13,404 |  |  | 7,866
Unallocated |  | 182 |  |  | 375
|  | 50,279 |  |  | 49,081
Acquired loans: |  |  |  |  |
Accounted for under ASC 310-20 (Loans with revolving feature and/or |  |  |  |  |
acquired at a premium) |  |  |  |  |
Commercial |  | 270 |  |  | 926
Consumer |  | 1,031 |  |  | -
Auto |  | 3,159 |  |  | 1,428
|  | 4,460 |  |  | 2,354
Accounted for under ASC 310-30 (Loans acquired with deteriorated |  |  |  |  |
credit quality, including those by analogy) |  |  |  |  |
Commercial |  | 10,115 |  |  | 1,713
Consumer |  | 5 |  |  | 418
Auto |  | - |  |  | 732
|  | 10,120 |  |  | 2,863
|  | 64,859 |  |  | 54,298
Allowance for loans and lease losses on covered loans: |  |  |  |  |
Loans secured by 1-4 family residential properties |  | 15,252 |  |  | 12,495
Commercial and other construction |  | 46,586 |  |  | 39,619
Consumer |  | 389 |  |  | 615
|  | 62,227 |  |  | 52,729
Total allowance for loan and lease losses | $ | 127,086 |  | $ | 107,027
Non-Covered Loan s The Company maintains an allowance for loan and lease losses at a level that management considers adequate to provide for probable losses based upon an evaluation of known and inherent risks. The Company's allowance for loan and lease losses policy provides for a detailed quarterly analysis of probable losses. The analysis includes a review of historical loan loss experience, value of underlying collateral, current economic conditions, financial condition of borrowers and other pertinent factors. While management uses available information in estimating probable loan losses, future additions to the allowance may be required based on factors beyond the Company's control. We also maintain an allowance for loan losses on acquired loans when: (i) for loans accounted for under ASC 310-30, there is deterioration in credit quality subsequent to acquisition, and (ii) for loans accounted for under ASC 310-20, the inherent losses in the loans exceed the remaining credit discount recorded at the time of acquisition. As part of the Company's continuous enhancement to the allowance for loan and lease losses methodology, during the quarter ended March 31, 2014, an assessment of the look-back period and historical loss factor was performed for auto and leasing and consumer loan portfolios based on the trends observed and their relation with the economic cycle as of the period ended March 3 1, 2014. Same analysis was performed for the commercial portfolio during the quarter ended June 30, 2014. As a result, the look-back period was changed to 24 months from the previously determined 12 months for auto and leasing and consumer. For the commercial portfolio, a look back period of 12 months was maintained. In addition, during the quarter ended June 30, 2014, an assessment of environmental factors was performed for commercial, auto, and consumer portfolios. As a result, the environmental factors continue to reflect our assessment of the impact to our portfolio, taking into consideration the current evolution of the portfolio and expected impact, due to recent economic developments, changes in values of collateral and delinquencies, among others. These changes in the allowance for loan and lease losses' look-back period for the consumer and auto and leasing portfolios, and economic factors for the commercial, auto, and consumer portfolios are considered a change in accounting estimate as per ASC 250-10 provisions, where adjustments should be made prospectively. Originated and Other Loans and Leases Held for Investment The following table s present the activity in our allowance for loan and lease losses and the related recorded investment of the associated loans for our originated and other loan s held for investment portfolio by segment for the period s indicated:
| Quarter Ended September 30, 2014
|  |  |  |  |  |  |  |  |  | Auto and |  |  |  |  |  |
| Mortgage |  | Commercial |  | Consumer |  | Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 19,062 |  | $ | 12,423 |  | $ | 7,887 |  | $ | 11,127 |  | $ | 139 |  | $ | 50,638
Charge-offs |  | (1,563) |  |  | (1,081) |  |  | (1,585) |  |  | (7,393) |  |  | - |  |  | (11,622)
Recoveries |  | 138 |  |  | 56 |  |  | 66 |  |  | 2,434 |  |  | - |  |  | 2,694
Provision (recapture) for non-covered originated and other loan and lease losses |  | 1,235 |  |  | (2,286) |  |  | 2,341 |  |  | 7,236 |  |  | 43 |  |  | 8,569
Balance at end of period | $ | 18,872 |  | $ | 9,112 |  | $ | 8,709 |  | $ | 13,404 |  | $ | 182 |  | $ | 50,279
| Nine-Month Period Ended September 30, 2014
|  |  |  |  |  |  |  |  |  | Auto and |  |  |  |  |  |
| Mortgage |  | Commercial |  | Consumer |  | Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 19,937 |  | $ | 14,897 |  | $ | 6,006 |  | $ | 7,866 |  | $ | 375 |  | $ | 49,081
Charge-offs |  | (3,764) |  |  | (2,043) |  |  | (3,820) |  |  | (17,994) |  |  | - |  |  | (27,621)
Recoveries |  | 374 |  |  | 269 |  |  | 457 |  |  | 6,094 |  |  | - |  |  | 7,194
Provision (recapture) for non-covered originated and other loan and lease losses |  | 2,325 |  |  | (4,011) |  |  | 6,066 |  |  | 17,438 |  |  | (193) |  |  | 21,625
Balance at end of period | $ | 18,872 |  | $ | 9,112 |  | $ | 8,709 |  | $ | 13,404 |  | $ | 182 |  | $ | 50,279
| September 30, 2014
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses on non-covered originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 7,932 |  | $ | 1,108 |  | $ | - |  | $ | - |  | $ | - |  | $ | 9,040
Collectively evaluated for impairment |  | 10,940 |  |  | 8,004 |  |  | 8,709 |  |  | 13,404 |  |  | 182 |  |  | 41,239
Total ending allowance balance | $ | 18,872 |  | $ | 9,112 |  | $ | 8,709 |  | $ | 13,404 |  | $ | 182 |  | $ | 50,279
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 91,692 |  | $ | 226,583 |  | $ | - |  | $ | - |  | $ | - |  | $ | 318,275
Collectively evaluated for impairment |  | 699,414 |  |  | 990,652 |  |  | 175,882 |  |  | 542,892 |  |  | - |  |  | 2,408,840
Total ending loan balance | $ | 791,106 |  | $ | 1,217,235 |  | $ | 175,882 |  | $ | 542,892 |  | $ | - |  | $ | 2,727,115
| Quarter Ended September 30, 2013
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 21,375 |  | $ | 17,624 |  | $ | 2,341 |  | $ | 3,641 |  | $ | 720 |  | $ | 45,701
Charge-offs |  | (1,758) |  |  | (2,234) |  |  | (465) |  |  | (1,305) |  |  | - |  |  | (5,762)
Recoveries |  | - |  |  | 28 |  |  | 37 |  |  | 639 |  |  | - |  |  | 704
Provision for non-covered originated and other loan and lease losses |  | 1,374 |  |  | (703) |  |  | 2,915 |  |  | 3,143 |  |  | 201 |  |  | 6,930
Balance at end of period | $ | 20,991 |  | $ | 14,715 |  | $ | 4,828 |  | $ | 6,118 |  | $ | 921 |  | $ | 47,573
| Nine-Month Period Ended September 30, 2013
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 21,092 |  | $ | 17,072 |  | $ | 856 |  | $ | 533 |  | $ | 368 |  | $ | 39,921
Charge-offs |  | (33,465) |  |  | (5,678) |  |  | (1,034) |  |  | (2,105) |  |  | - |  |  | (42,282)
Recoveries |  | - |  |  | 291 |  |  | 143 |  |  | 855 |  |  | - |  |  | 1,289
Provision for non-covered originated and other loan and lease losses |  | 33,364 |  |  | 3,030 |  |  | 4,863 |  |  | 6,835 |  |  | 553 |  |  | 48,645
Balance at end of period | $ | 20,991 |  | $ | 14,715 |  | $ | 4,828 |  | $ | 6,118 |  | $ | 921 |  | $ | 47,573
| December 31, 2013
| Mortgage |  | Commercial |  | Consumer |  | Auto and Leasing |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered originated and other loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 8,708 |  | $ | 1,431 |  | $ | - |  | $ | - |  | $ | - |  | $ | 10,139
Collectively evaluated for impairment |  | 11,229 |  |  | 13,466 |  |  | 6,006 |  |  | 7,866 |  |  | 375 |  |  | 38,942
Total ending allowance balance | $ | 19,937 |  | $ | 14,897 |  | $ | 6,006 |  | $ | 7,866 |  | $ | 375 |  | $ | 49,081
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 84,494 |  | $ | 28,145 |  | $ | - |  | $ | - |  | $ | - |  | $ | 112,639
Collectively evaluated for impairment |  | 681,771 |  |  | 1,099,512 |  |  | 127,744 |  |  | 379,874 |  |  | - |  |  | 2,288,901
Total ending loans balance | $ | 766,265 |  | $ | 1,127,657 |  | $ | 127,744 |  | $ | 379,874 |  | $ | - |  | $ | 2,401,540
Acquired Loans accounted for under ASC 310-2 0 (Loans with revolving feature and/or acquired at a premium) T he following table s present the activity in our allowance for loan losses and related recorded investment of the associated loans in our non-covered acquired loan portfolio, excluding loans accounted for under ASC 310-30, for the period s indicated:
| Quarter Ended September 30, 2014
| Commercial |  | Consumer |  | Auto |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 464 | 1 | $ | 338 |  | $ | 2,642 |  | $ | - |  | $ | 3,444
Charge-offs |  | (228) |  |  | (1,432) |  |  | (1,748) |  |  | - |  |  | (3,408)
Recoveries |  | 35 |  |  | 139 |  |  | 519 |  |  | - |  |  | 693
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20 |  | (1) |  |  | 1,986 |  |  | 1,746 |  |  | - |  |  | 3,731
Balance at end of period | $ | 270 |  | $ | 1,031 |  | $ | 3,159 |  | $ | - |  | $ | 4,460
| Nine-Month Period Ended September 30, 2014
| Commercial |  | Consumer |  | Auto |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 926 | 1 | $ | - |  | $ | 1,428 |  | $ | - |  | $ | 2,354
Charge-offs |  | (512) |  |  | (5,442) |  |  | (4,414) |  |  | - |  |  | (10,368)
Recoveries |  | 65 |  |  | 363 |  |  | 1,504 |  |  | - |  |  | 1,932
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20 |  | (209) |  |  | 6,110 |  |  | 4,641 |  |  | - |  |  | 10,542
Balance at end of period | $ | 270 |  | $ | 1,031 |  | $ | 3,159 |  | $ | - |  | $ | 4,460
| September 30, 2014
| Commercial |  | Consumer |  | Auto |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment |  | 270 |  |  | 1,031 |  |  | 3,159 |  |  | - |  |  | 4,460
Total ending allowance balance | $ | 270 |  | $ | 1,031 |  | $ | 3,159 |  | $ | - |  | $ | 4,460
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment |  | 26,984 |  |  | 47,284 |  |  | 210,808 |  |  | - |  |  | 285,076
Total ending loan balance | $ | 26,984 |  | $ | 47,284 |  | $ | 210,808 |  | $ | - |  | $ | 285,076
| Quarter Ended September 30, 2013
| Commercial |  | Consumer |  | Auto |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 924 | $ 1 | $ | - |  | $ | - |  | $ | - |  | $ | 924
Charge-offs |  | - |  |  | (1,233) |  |  | (1,598) |  |  | - |  |  | (2,831)
Recoveries |  | 6 |  |  | 88 |  |  | 884 |  |  | - |  |  | 978
Provision (recapture)for non-covered acquired loan and lease losses accounted for under ASC 310-20 |  | 431 |  |  | 1,145 |  |  | 1,394 |  |  | - |  |  | 2,970
Balance at end of period | $ | 1,361 |  | $ | - |  | $ | 680 |  | $ | - |  | $ | 2,041
| Nine-Month Period Ended September 30, 2013
| Commercial |  | Consumer |  | Auto |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered acquired loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | - | $ 1 | $ | - |  | $ | - |  | $ | - |  | $ | -
Charge-offs |  | (25) |  |  | (3,847) |  |  | (4,723) |  |  | - |  |  | (8,595)
Recoveries |  | 6 |  |  | 932 |  |  | 3,000 |  |  | - |  |  | 3,938
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-20 |  | 1,380 |  |  | 2,915 |  |  | 2,403 |  |  | - |  |  | 6,698
Balance at end of period | $ | 1,361 |  | $ | - |  | $ | 680 |  | $ | - |  | $ | 2,041
| December 31, 2013
| Commercial |  | Consumer |  | Auto |  | Unallocated |  | Total
| (In thousands)
Allowance for loan and lease losses on non-covered acquired loans accounted for under ASC 310-20: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending allowance balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment |  | 926 |  |  | - |  |  | 1,428 |  |  | - |  |  | 2,354
Total ending allowance balance | $ | 926 |  | $ | - |  | $ | 1,428 |  | $ | - |  | $ | 2,354
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment |  | 77,681 |  |  | 56,174 |  |  | 301,584 |  |  | - |  |  | 435,439
Total ending loan balance | $ | 77,681 |  | $ | 56,174 |  | $ | 301,584 |  | $ | - |  | $ | 435,439
Acquired Loans Accounted for under ASC 310-3 0 (including those accounted for under ASC 310-30 by analogy) The following table s present the activity in our allowance for loan losses and related recorded investment of the associated loans in our non-covered acquired loan portfolio accounted for under ASC 310-30, for the period s indicated:
| Quarter Ended September 30, 2014
| Mortgage |  | Commercial |  | Construction |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | - | 1 | $ | 6,216 | 1 | $ | - | $ 1 | $ | 62 |  | $ | - |  | $ | 6,278
Provision(recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-30 |  | - |  |  | 3,899 |  |  | - |  |  | (57) |  |  | - |  |  | 3,842
Balance at end of period | $ | - |  | $ | 10,115 |  | $ | - |  | $ | 5 |  | $ | - |  | $ | 10,120
| Nine-Month Period Ended September 30, 2014
| Mortgage |  | Commercial |  | Construction |  | Consumer |  | Auto |  | Total
| (In thousands)
Allowance for loan and lease losses for non-covered loans accounted for under ASC 310-30: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | - | 1 | $ | 1,713 | 1 | $ | - | 1 | $ | 418 |  | $ | 732 |  | $ | 2,863
Provision (recapture) for non-covered acquired loan and lease losses accounted for under ASC 310-30 |  | - |  |  | 8,402 |  |  | - |  |  | (413) |  |  | (732) |  |  | 7,257
Balance at end of period | $ | - |  | $ | 10,115 |  | $ | - |  | $ | 5 |  | $ | - |  | $ | 10,120
Non-covered acquired l oans accounted for under ASC 310-30 were recognized at fair value as of December 18, 2012, which included the i mpact of expected credit losses, and therefore, no allowance for credit losses was recorded during the nine-month period ended September 30, 2013. Covered Loans For covered loans, as part of the evaluation of actual versus expected cash flows, the Company assesses on a quarterly basis the credit quality of these loans based on delinquency, severity factors and risk ratings, among other assumptions. Migration and credit quality trends are assessed at the pool level, by comparing information from the latest evaluation period through the end of the reporting per iod. The changes in the allowance for loan and lease losses on covered loans for the quarters and nine-month period s ended September 3 0, 201 4 and 201 3 were as follows:
| Quarter Ended September 30, |  | Nine-Month Period Ended September 30,
| 2014 |  | 2013 |  | 2014 |  | 2013
| (In thousands)
Balance at beginning of the period | $ | 59,515 |  | $ | 53,992 |  | $ | 52,729 |  | $ | 54,124
Provision for covered loan and lease losses, net |  | 1,115 |  |  | 3,074 |  |  | 4,339 |  |  | 4,956
FDIC shared-loss portion of provision for (recapture of) |  |  |  |  |  |  |  |  |  |  |
covered loan and lease losses, net |  | 1,597 |  |  | (511) |  |  | 5,159 |  |  | (2,525)
Balance at end of the period | $ | 62,227 |  | $ | 56,555 |  | $ | 62,227 |  | $ | 56,555
FDIC shared-loss portion of provision for (recapture of) covered loans and lease losses net, represents the credit impairment losses to be covered under the FDIC loss-share agreement which is increasing (decreasing) the FDIC loss-share indemnification asset. Net provision for covered loans includes both additional reserves and reserve releases for different pools. The pools for which there were releases are also subject to a reduction to the FDIC shared-loss indemnification a sset because of lower expec ted losses which are recognized as recaptures.

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- Definition The entire disclosure for allowance for credit losses. + References No definition available. + Details
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