Loans

6 Months Ended

Jun. 30, 2011

Loans

Loans

NOTE 6    LOANS:

Loans receivable outstanding are summarized as follows:

		June 30,		December 31,
(Dollars are in thousands)		2011		2010
Commercial, financial and agricultural	$	98,365	$	109,551
Real estate-construction	44,872		52,307
Real estate-mortgages	473,814		489,314
Installment loans to individuals	46,952		56,622
Total loans	$	664,003	$	707,794

The following table presents information concerning the Company's investment in loans considered impaired as of June 30, 2011 and December 31, 2010:

As of June 30, 2011 (Dollars are in thousands)		Average Recorded Investment		Interest Income Recognized				Recorded Investment				Unpaid Principal Balance				Related Allowance
With no related allowance recorded:
Commercial, financial and agricultural	$	14,062	$	322		$		16,934		$		17,712		$		-
Real estate-construction		13,672		128				14,768				23,735				-
Real Estate-mortgages		34,413		857				40,827				44,103				-
Installment loans to individuals		1		-				4				4				-
With an allowance recorded:
Commercial,financial and agricultural		6,104		90				3,650				3,824				1,256
Real estate-construction		7,275		50				3,963				4,306				1,632
Real Estate-mortgages		13,533		254				10,357				10,642				1,735
Installment loans to individuals		38		1				26				27				7
Total	$	89,098	$	1,702		$		90,529		$		104,353		$		4,630
As of December 31, 2010 (Dollars are in thousands)							Recorded Investment				Unpaid Principal Balance				Related Allowance
With no related allowance recorded:
Commercial, financial and agricultural					$		9,264		$		9,785		$		-
Real estate-construction							8,585				12,594				-
Real Estate-mortgages							27,138				27,997				-
Installment loans to individuals							-				-				-
With an allowance recorded:
Commercial, financial and agricultural							11,729				11,729				4,042
Real estate-construction							14,913				16,253				3,926
Real Estate-mortgages							18,973				19,142				4,842
Installment loans to individuals							46				46				23
Total					$		90,648		$		97,546		$		12,833

The average recorded investment in impaired loans was $63.4 million for the year ended December 31, 2010.

Loans receivable on nonaccrual status are summarized as follows:

		June 30,		December 31,
(Dollars are in thousands)		2011		2010
Commercial, financial and agricultural	$	11,544	$	5,970
Real estate-construction	12,239		15,460
Real estate-mortgages	18,889		22,986
Installment loans to individuals	324		1,365
Total loans receivable on nonaccrual status	$	42,996	$	45,781

Total interest income not recognized on nonaccrual loans for six months ended June 30, 2011 and 2010 was $1.1 million and $309 thousand, respectively.

An age analysis of past due loans receivable was as follows:

As of June 30, 2011 (Dollars are 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
Commercial, financial and agricultural	$	4,257	$	9,855	$	14,112	$	84,253	$	98,365	$	446
Real estate-construction		3,628		9,394		13,022		31,850		44,872		-
Real Estate-mortgages		19,305		11,355		30,660		443,154		473,814		1,598
Installment loans to individuals		1,276		533		1,809		45,143		46,952		309
Total	$	28,466	$	31,137	$	59,603	$	604,400	$	664,003	$	2,353

As of December 31, 2010 (Dollars are 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
Commercial, financial and agricultural	$	5,622	$	2,690	$	8,312	$	101,239	$	109,551	$	90
Real estate-construction		2,079		8,150		10,229		42,078		52,307		-
Real Estate-mortgages		22,251		12,227		34,478		454,836		489,314		1,332
Installment loans to individuals		2,584		337		2,921		53,701		56,622		270
Total	$	32,536	$	23,404	$	55,940	$	651,854	$	707,794	$	1,692

The Company categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans receivable as to credit risk.  The Company uses the following definitions for risk ratings:

Pass - Loans in this category are considered to have a low likelihood of loss based on relevant information analyzed about the ability of the borrowers to service their debt and other factors.

Special Mention - Loans in this category are currently protected but are potentially weak, including adverse trends in borrower's operations, credit quality or financial strength.  Those loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances.  Special mention loans have potential weaknesses which may, if not checked or corrected, weaken the loan or inadequately protect the Company's credit position at some future date.

Substandard - A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful - Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.

Based on the most recent analysis performed, the risk category of loans receivable was as follows:

As of June 30, 2011 (Dollars are in thousands)		Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	68,631	$	8,906	$	18,304	$	2,524	$	98,365
Real estate-construction		25,638		4,158		15,076		-		44,872
Real Estate-mortgages		375,388		30,728		63,560		4,138		473,814
Installment loans to individuals		44,720		632		1,560		40		46,952
Total	$	514,377	$	44,424	$	98,500	$	6,702	$	664,003

As of December 31, 2010 (Dollars are in thousands)		Pass		Special Mention		Substandard		Doubtful		Total
Commercial, financial and agricultural	$	83,482	$	5,561	$	18,619	$	1,889	$	109,551
Real estate-construction		28,802		4,095		19,410		-		52,307
Real Estate-mortgages		418,166		20,113		47,389		3,646		489,314
Installment loans to individuals		56,037		122		434		29		56,622
Total	$	586,487	$	29,891	$	85,852	$	5,564	$	707,794

At June 30, 2011 there were $19.2 million in loans that are classified as troubled debt restructurings compared to $13.9 million at December 31, 2010.