Loans (Tables)

3 Months Ended

Mar. 31, 2014

Composition of Net Loans

The composition of net loans (in thousands) at March 31, 2014 and December 31, 2013 is as follows:

	March 31, 2014			December 31, 2013
Real Estate:
Land Development and Construction	$	31,062		$	27,224
Farmland		30,097			29,634
1-4 Family Mortgages		102,413			105,489
Commercial Real Estate		158,224			145,369
Total Real Estate Loans		321,796			307,716
Business Loans:
Commercial and Industrial Loans		40,971			55,813
Farm Production and Other Farm Loans		1,140			1,308
Total Business Loans		42,111			57,121
Consumer Loans:
Credit Cards		988			1,087
Other Consumer Loans		25,500			26,744
Total Consumer Loans		26,488			27,831
Total Gross Loans		390,395			392,668
Unearned income		(561	)		(485	)
Allowance for loan losses		(8,362	)		(8,078	)
Loans, net	$	381,472		$	384,105

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

Period-end, non-accrual loans (in thousands), segregated by class, were as follows:

	March 31, 2014		December 31, 2013
Real Estate:
Land Development and Construction	$	130	$	136
Farmland		281		352
1-4 Family Mortgages		1,672		1,866
Commercial Real Estate		10,561		8,894
Total Real Estate Loans		12,644		11,248
Business Loans:
Commercial and Industrial Loans		2,131		2,224
Total Business Loans		2,131		2,224
Consumer Loans:
Other Consumer Loans		80		120
Total Consumer Loans		80		120
Total Non-Accrual Loans	$	14,855	$	13,592

Age Analysis of Past Due Loans, Segregated by Class

An aging analysis of past due loans (in thousands), segregated by class, as of March 31, 2014, was as follows:

											Accruing
			Loans								Loans
	Loans		90 or more								90 or more
	30-89 Days		Days		Total Past		Current		Total		Days
	Past Due		Past Due		Due Loans		Loans		Loans		Past Due
Real Estate:
Land Development and Construction	$	639	$	—	$	639	$	30,423	$	31,062	$	—
Farmland		366		71		437		29,660		30,097		—
1-4 Family Mortgages		4,827		342		5,169		97,244		102,413		90
Commercial Real Estate		2,348		5,630		4,978		153,246		158,224		—
Total Real Estate Loans		8,180		6,043		14,223		310,573		321,796		90
Business Loans:
Commercial and Industrial Loans		192		—		192		40,779		40,971		—
Farm Production and Other Farm Loans		3		—		3		1,137		1,140		—
Total Business Loans		195		3		195		41,916		42,111		—
Consumer Loans:
Credit Cards		26		17		43		945		988		17
Other Consumer Loans		993		49		1,042		24,458		25,500		12
Total Consumer Loans		1,019		66		1,085		25,403		26,488		29
Total Loans	$	9,394	$	6,109	$	15,503	$	377,892	$	390,395	$	119

An aging analysis of past due loans (in thousands), segregated by class, as of December 31, 2013 was as follows:

											Accruing
			Loans								Loans
	Loans		90 or more								90 or more
	30-89 Days		Days		Total Past		Current		Total		Days
	Past Due		Past Due		Due Loans		Loans		Loans		Past Due
Real Estate:
Land Development and Construction	$	170	$	—	$	170	$	27,054	$	27,224	$	—
Farmland		419		69		488		29,146		29,634		—
1-4 Family Mortgages		4,234		1,088		5,322		100,167		105,489		335
Commercial Real Estate		3,308		9,316		12,624		132,745		145,369		1,750
Total Real Estate Loans		8,131		10,473		18,604		289,112		307,716		2,085
Business Loans:
Commercial and Industrial Loans		248		23		271		55,542		55,813		—
Farm Production and other Farm Loans		5		—		5		1,303		1,308		—
Total Business Loans		253		23		276		56,845		57,121		—
Consumer Loans:
Credit Cards		39		10		49		1,038		1,087		10
Other Consumer Loans		1,105		41		1,146		25,598		26,744		—
Total Consumer Loans		1,144		51		1,195		26,636		27,831		10
Total Loans	$	9,528	$	10,547	$	20,075	$	372,593	$	392,668	$	2,095

Impaired Loans, Segregated by Class of Loans

Impaired loans (in thousands) as of March 31, 2014 and December 31, 2013, segregated by class, are as follows:

			Recorded		Recorded
	Unpaid		Investment		Investment		Total				Average
	Principal		With No		With		Recorded		Related		Recorded
March 31, 2014	Balance		Allowance		Allowance		Investment		Allowance		Investment
Real Estate:
Land Development and Construction	$	130	$	24	$	106	$	130	$	103	$	130
Farmland		281		153		128		281		24		339
1-4 Family Mortgages		1,672		1,328		344		1,672		53		1,653
Commercial Real Estate		10,561		2,797		7,764		10,561		896		9,922
Total Real Estate Loans		12,644		4,302		8,342		12,644		1,076		12,044
Business Loans:
Commercial and Industrial Loans		2,131		47		2,084		2,131		1,560		2,136
Total Business Loans		2,131		47		2,084		2,131		1,560		2,136
Consumer Loans:
Other Consumer Loans		80		80		—		80		—		100
Total Consumer Loans		80		80		—		80		—		100
Total Loans	$	14,855	$	4,429	$	10,426	$	14,855	$	2,636	$	14,281

			Recorded		Recorded
	Unpaid		Investment		Investment		Total				Average
	Principal		With No		With		Recorded		Related		Recorded
December 31, 2013	Balance		Allowance		Allowance		Investment		Allowance		Investment
Real Estate:
Land Development and Construction	$	136	$	25	$	111	$	136	$	103	$	278
Farmland		352		220		132		352		24		720
1-4 Family Mortgages		1,866		1,054		812		1,866		202		2,111
Commercial Real Estate		8,894		976		7,918		8,894		896		9,535
Total Real Estate Loans		11,248		2,275		8,973		11,248		1,225		12,644
Business Loans:
Commercial and Industrial Loans		2,224		118		2,106		2,224		1,072		1,195
Farm Production and other Farm Loans		—		—		—		—		—		2
Total Business Loans		2,224		118		2,106		2,224		1,072		1,197
Consumer Loans:
Other Consumer Loans		120		120		—		120		—		166
Total Consumer Loans		120		120		—		120		—		166
Total Loans	$	13,592	$	2,513	$	11,079	$	13,592	$	2,297	$	14,007

Troubled Debt Restructurings Segregated by Class

The following table presents troubled debt restructurings (in thousands, except for number of loans), segregated by class:

			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of		Recorded		Recorded
March 31, 2014	Loans		Investment		Investment
Commercial real estate		5	$	9,261	$	7,024
Total		5	$	9,261	$	7,024
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of		Recorded		Recorded
December 31, 2013	Loans		Investment		Investment
Commercial real estate		5	$	9,261	$	7,119
Total		5	$	9,261	$	7,119

Changes in Troubled Debt Restructurings

Changes in the Corporation’s troubled debt restructurings (in thousands, except for number of loans) are set forth in the table below:

	Number of Loans		Recorded Investment
Totals at January 1, 2014		5	$	7,119
Reductions due to:
Principal paydowns				(95	)
Total at March 31, 2014		5	$	7,024

Detailed Amount of Gross Loans Segregated by Loan Grade and Class

The following table details the amount of gross loans (in thousands), segregated by loan grade and class, as of March 31, 2014:

			Special
	Satisfactory		Mention		Substandard		Doubtful		Loss		Total
Grades	1, 2, 3, 4		5, 6		7		8		9		Loans
Real Estate:
Land Development and Construction	$	29,024	$	176	$	1,862	$	—	$	—	$	31,062
Farmland		25,603		805		3,689		—		—		30,097
1-4 Family Mortgages		84,462		4,910		13,041		—		—		102,413
Commercial Real Estate		138,337		5,702		14,185		—		—		158,224
Total Real Estate Loans		277,426		11,593		32,777		—		—		321,796
Business Loans:
Commercial and Industrial Loans		38,179		430		284		2,078		—		40,971
Farm Production and Other Farm Loans		1,133		6		1		—		—		1,140
Total Business Loans		39,312		436		285		2,078		—		42,111
Consumer Loans:
Credit Cards		971		—		17		—		—		988
Other Consumer Loans		24,759		233		464		44		—		25,500
Total Consumer Loans		25,730		233		481		44		—		26,488
Total Loans	$	342,468	$	12,262	$	33,543	$	2,122	$	—	$	390,395

The following table details the amount of gross loans (in thousands) segregated by loan grade and class, as of December 31, 2013:

			Special
	Satisfactory		Mention		Substandard		Doubtful		Loss		Total
Grades	1, 2, 3, 4		5, 6		7		8		9		Loans
Real Estate:
Land Development and Construction	$	25,165	$	192	$	1,867	$	—	$	—	$	27,224
Farmland		25,160		744		3,730		—		—		29,634
1-4 Family Mortgages		87,108		4,671		13,710		—		—		105,489
Commercial Real Estate		125,339		5,915		14,115		—		—		145,369
Total Real Estate Loans		262,772		11,522		33,422		—		—		307,716
Business Loans:
Commercial and Industrial Loans		52,871		426		416		2,100		—		55,813
Farm Production and other Farm Loans		1,298		8		2		—		—		1,308
Total Business Loans		54,169		434		418		2,100		—		57,121
Consumer Loans:
Credit Cards		1,077		—		10		—		—		1,087
Other Consumer Loans		25,942		193		564		42		3		26,744
Total Consumer Loans		27,019		193		574		42		3		27,831
Total Loans	$	343,960	$	21,295	$	34,414	$	2,142	$	3	$	392,668

Detailed Activity in Allowance for Possible Loan Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2014:

	Real		Business
March 31, 2014	Estate		Loans		Consumer			Total
Beginning Balance, January 1, 2014	$	4,705,753	$	2,767,409	$	604,337		$	8,077,499
Provision for possible loan losses		239,280		139,578		(17,490	)		361,368
Chargeoffs		61,040		22,760		35,540			119,340
Recoveries		15,155		2,283		24,607			42,045
Net Chargeoffs		45,885		20,477		10,933			77,295
Ending Balance	$	4,899,148	$	2,886,510	$	575,914		$	8,361,572
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,075,733	$	1,560,619	$	—		$	2,636,352
Loans collectively evaluated for impairment		3,823,415		1,325,891		575,914			5,725,220
Ending Balance, March 31, 2014	$	4,899,148	$	2,886,510	$	575,914		$	8,361,572

The following table details activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2013:

	Real		Business
March 31, 2013	Estate		Loans			Consumer			Total
Beginning Balance, January 1, 2013	$	4,629,559	$	1,554,698		$	770,012		$	6,954,269
Provision for possible loan losses		742,220		(537,313	)		(30,398	)		174,509
Chargeoffs		276,473		1,404			60,136			338,013
Recoveries		14,520		7,126			22,164			43,810
Net Chargeoffs		261,953		(5,722	)		37,972			294,203
Ending Balance, March 31, 2013	$	5,109,826	$	1,023,107		$	701,642		$	6,834,575
Period end allowance allocated to:
Loans individually evaluated for impairment	$	1,321,099	$	54,706		$	—		$	1,375,805
Loans collectively evaluated for impairment		3,788,727		968,401			701,642			5,458,770
Ending Balance, March 31, 2013	$	5,109,826	$	1,023,107		$	701,642		$	6,834,575

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 March 31, 2014 and December 31, 2013 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):

	Real		Business
March 31, 2014	Estate		Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	12,644	$	2,131	$	80	$	14,855
Loans collectively evaluated for general impairment		309,152		39,980		26,408		375,540
	$	321,796	$	42,111	$	26,488	$	390,395
	Real		Business
December 31, 2013	Estate		Loans		Consumer		Total
Loans individually evaluated for specific impairment	$	11,248	$	2,224	$	120	$	13,592
Loans collectively evaluated for general impairment		296,468		54,897		27,711		379,076
	$	307,716	$	57,121	$	27,831	$	392,668