Loans (Tables)

9 Months Ended

Sep. 30, 2012

Composition of Net Loans

The composition of net loans at September 30, 2012 and December 31, 2011 is as follows:

	September 30, 2012			December 31, 2011
	(In Thousands)
Real Estate:
Land Development and Construction	$	11,280		$	13,480
Farmland		32,986			35,912
1-4 Family Mortgages		119,297			133,987
Commercial Real Estate		131,906			129,387
Total Real Estate Loans		295,469			312,766
Business Loans:
Commercial and Industrial Loans		50,802			36,581
Farm Production and Other Farm Loans		1,515			1,579
Total Business Loans		52,317			38,160
Consumer Loans:
Credit Cards		976			995
Other Consumer Loans		29,680			37,545
Total Consumer Loans		30,656			38,540
Total Gross Loans		378,442			389,466
Unearned income		(242	)		(204	)
Allowance for loan losses		(7,449	)		(6,681	)
Loans, net	$	370,751		$	382,581

Period-End Non-Accrual Loans, Segregated by Class of Loans

Period-end non-accrual loans, segregated by class of loans, were as follows:

	September 30, 2012		December 31, 2011
	(in thousands)
Real Estate:
Land Development and Construction	$	234	$	1,134
Farmland		843		641
1-4 Family Mortgages		2,525		1,966
Commercial Real Estate		10,471		6,818
Total Real Estate Loans		14,073		10,559
Business Loans:
Commercial and Industrial Loans		174		284
Farm Production and Other Farm Loans		5		21
Total Business Loans		179		305
Consumer Loans:
Other Consumer Loans		248		435
Total Consumer Loans		248		435
Total Non-Accrual Loans	$	14,500	$	11,299

Age Analysis of Past Due Loans, Segregated by Class of Loans

An aging analysis of past due loans, segregated by class of loans, as of September 30, 2012, was as follows (in thousands):

	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or more Days Past Due
Real Estate:
Land Development and Construction	$	77	$	—	$	77	$	11,203	$	11,280	$	—
Farmland		552		347		899		32,087		32,986		—
1-4 Family Mortgages		4,625		897		5,522		113,775		119,297		49
Commercial Real Estate		3,030		4,672		7,702		124,204		131,906		—
Total Real Estate Loans		8,284		5,916		14,200		281,269		295,469		49
Business Loans:
Commercial and Industrial Loans		420		8		428		50,374		50,802		—
Farm Production and Other Farm Loans		23		—		23		1,492		1,515		—
Total Business Loans		443		8		451		51,866		52,317		—
Consumer Loans:
Credit Cards		51		28		79		897		976		28
Other Consumer Loans		1,300		58		1,358		28,322		29,680		43
Total Consumer Loans		1,351		86		1,437		29,219		30,656		71
Total Loans	$	10,078	$	6,010	$	16,088	$	362,354	$	378,442	$	120

An aging analysis of past due loans, segregated by class of loans, as of December 31, 2011 was as follows (in thousands):

	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or more Days Past Due
Real Estate:
Land Development and Construction	$	30	$	562	$	592	$	12,888	$	13,480	$	39
Farmland		1,061		139		1,200		34,712		35,912		—
1-4 Family Mortgages		5,774		822		6,596		127,391		133,987		80
Commercial Real Estate		4,941		4,855		9,796		119,591		129,387		109
Total Real Estate Loans		11,806		6,378		18,184		294,582		312,766		228
Business Loans:
Commercial and Industrial Loans		294		99		393		36,188		36,581		—
Farm Production and Other Farm Loans		13		6		19		1,560		1,579		—
Total Business Loans		307		105		412		37,748		38,160		—
Consumer Loans:
Credit Cards		20		17		37		958		995		17
Other Consumer Loans		1,858		252		2,110		35,435		37,545		24
Total Consumer Loans		1,878		269		2,147		36,393		38,540		41
Total Loans	$	13,991	$	6,752	$	20,743	$	368,723	$	389,466	$	269

Impaired Loans, by Class of Loans

Impaired loans as of September 30, 2012 and December 31, 2011, by class of loans, are as follows (in thousands):

September 30, 2012	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	234	$	106	$	128	$	234	$	117	$	356
Farmland		843		701		142		843		24		700
1-4 Family Mortgages		2,525		1,732		793		2,525		220		2,472
Commercial Real Estate		10,471		4,846		5,625		10,471		1,326		8,750
Total Real Estate Loans		14,073		7,385		6,688		14,073		1,687		12,278
Business Loans:
Commercial and Industrial Loans		174		76		98		174		57		206
Farm Production and Other Farm Loans		5		5		—		5		—		9
Total Business Loans		179		81		98		179		57		215
Consumer Loans:
Other Consumer Loans		248		248		—		248		—		277
Total Consumer Loans		248		248		—		248		—		277
Total Loans	$	14,500	$	7,714	$	6,786	$	14,500	$	1,744	$	12,770

December 31, 2011	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	1,134	$	992	$	142	$	1,134	$	134	$	883
Farmland		641		492		149		641		24		588
1-4 Family Mortgages		2,066		1,297		769		2,066		216		1,933
Commercial Real Estate		6,818		5,042		1,776		6,818		736		6,896
Total Real Estate Loans		10,659		7,823		2,836		10,659		1,110		10,300
Business Loans:
Commercial and Industrial Loans		284		163		121		284		57		860
Farm Production and Other Farm Loans		21		21		—		21		—		19
Total Business Loans		305		184		121		305		57		879
Consumer Loans:
Other Consumer Loans		435		430		5		435		—		321
Total Consumer Loans		435		430		5		435		—		321
Total Loans	$	11,399	$	8,437	$	2,962	$	11,399	$	1,167	$	11,500

Detailed Amount of Gross Loans by Loan Grade and Class

The following table details the amount of gross loans by loan grade and class as of September 30, 2012 (in thousands):

Grades	Satisfactory 1, 2, 3, 4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	8,946	$	1,906	$	428	$	—	$	—	$	11,280
Farmland		28,574		2,797		1,615		—		—		32,986
1-4 Family Mortgages		100,826		5,783		12,688		—		—		119,297
Commercial Real Estate		108,248		6,865		16,793		—		—		131,906
Total Real Estate Loans		246,594		17,351		31,524		—		—		295,469
Business Loans:
Commercial and Industrial Loans		36,686		1,108		675		30		—		38,499
Farm Production and Other Farm Loans		1,433		29		53		—		—		1,515
Total Business Loans		38,119		1,137		728		30		—		40,014
Consumer Loans:
Credit Cards		948		—		28		—		—		976
Other Consumer Loans		40,528		314		1,112		29		—		41,983
Total Consumer Loans		41,476		314		1,140		29		—		42,959
Total Loans	$	324,869	$	18,802	$	33,392	$	59	$	—	$	378,442

The following table details the amount of gross loans by loan grade and class as of December 31, 2011 (in thousands):

Grades	Satisfactory 1, 2, 3,4		Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	9,647	$	2,290	$	1,481	$	—	$	62	$	13,480
Farmland		31,405		3,043		1,464		—		—		35,912
1-4 Family Mortgages		115,365		5,784		12,811		27		—		133,987
Commercial Real Estate		108,347		7,188		13,852		—		—		129,387
Total Real Estate Loans		264,764		18,305		29,608		27		62		312,766
Business Loans:
Commercial and Industrial Loans		27,970		7,712		863		36		—		36,581
Farm Production and Other Farm Loans		1,481		8		90		—		—		1,579
Total Business Loans		29,451		7,720		953		36		—		38,160
Consumer Loans:
Credit Cards		978		—		17		—		—		995
Other Consumer Loans		35,859		325		1,304		53		4		37,545
Total Consumer Loans		36,837		325		1,321		53		4		38,540
Total Loans	$	331,052	$	26,350	$	31,882	$	116	$	66	$	389,466

Detailed Activity in Allowance for Possible Loan Losses by Portfolio Segment

The following table details activity in the allowance for possible loan losses by portfolio segment for the nine months ended September 30, 2012:

September 30, 2012	Real Estate		Business Loans		Consumer		Total
Beginning Balance, January 1, 2012	$	4,176,475	$	1,672,467	$	832,470	$	6,681,412
Provision for possible loan losses		1,204,314		15,456		108,691		1,328,461
Chargeoffs		511,610		55,260		200,144		767,014
Recoveries		49,440		50,332		106,801		206,573
Net Chargeoffs		462,170		4,928		93,343		560,441
Ending Balance	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,686,862	$	57,325	$	—	$	1,744,187
Loans collectively evaluated for impairment		3,231,757		1,625,670		847,818		5,705,245
Ending Balance, September 30, 2012	$	4,918,619	$	1,682,995	$	847,818	$	7,449,432

Activity in Allowance for Possible Loan Losses

Activity in the allowance for possible loan losses for the nine months ended September 30, 2011 was as follows:

	September 30, 2011
Balance, beginning of period	$	6,379,070
Provision for possible loan losses		2,586,707
Chargeoffs		(1,658,080	)
Recoveries		96,721
Balance, end of period	$	7,404,418

Recorded Investment in Loans Related to Balance in Allowance for Possible Loan Losses by Portfolio Segment

The Corporation’s recorded investment in loans as of September 30, 2012 and December 31, 2011 related to each balance in the allowance for possible loan losses by portfolio segment and disaggregated on the basis of the Corporation’s impairment methodology was as follows (in thousands):

September 30, 2012	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	14,073	$	179	$	248	$	14,500
Loans collectively evaluated for general impairment		281,396		39,835		42,711		363,942
	$	295,469	$	40,014	$	42,959	$	378,442
December 31, 2011	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	10,659	$	305	$	435	$	11,399
Loans collectively evaluated for general impairment		302,107		37,855		38,105		378,067
	$	312,766	$	38,160	$	38,540	$	389,466