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Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Loans Held for Investment, Net of Unearned Income

The following is a summary of the Bank's loans held for investment, net of unearned income of $1.437 million at June 30, 2012 and $2.045 million at December 31, 2011:



(Dollars in thousands)	June 30, 2012		December 31, 2011
Construction and land development loans	$	67,814	$	69,325
Other commercial real estate loans	499,370		505,180
Asset-based loans	36,689		37,540
Other commercial loans	111,084		117,790
Home equity loans	36,183		37,024
Other 1-4 family residential loans	189,927		186,815
Consumer loans	41,529		42,666
Total loans	$	982,596	$	996,340

Schedule of Past Due Status of Loans, by Type

The following table presents a summary of the past due status of all loans, including nonaccrual loans, by type at December 31, 2011:



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
Construction and land development loans	$	603	$	—	$	4,172	$	4,775	$	64,550	$	69,325	$	72
Other commercial real estate loans	2,194		679		9,792		12,665		492,515		505,180		279
Asset based loans	—		—		—		—		37,540		37,540		—
Other commercial loans	546		442		419		1,407		116,383		117,790		50
Home equity loans	121		37		141		299		36,725		37,024		—
Other 1-4 family residential loans	2,978		303		981		4,262		182,553		186,815		174
Consumer loans	214		67		41		322		42,344		42,666		27
Total	$	6,656	$	1,528	$	15,546	$	23,730	$	972,610	$	996,340	$	602

The following table presents a summary of the past due status of all loans, including nonaccrual loans, by type at June 30, 2012:



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
Construction and land development loans	$	556	$	64	$	1,078	$	1,698	$	66,116	$	67,814	$	—
Other commercial real estate loans	1,155		499		2,832		4,486		494,884		499,370		1,368
Asset based loans	—		—		—		—		36,689		36,689		—
Other commercial loans	433		53		289		775		110,309		111,084		80
Home equity loans	209		80		17		306		35,877		36,183		—
Other 1-4 family residential loans	1,641		567		708		2,916		187,011		189,927		81
Consumer loans	188		37		14		239		41,290		41,529		8
Total	$	4,182	$	1,300	$	4,938	$	10,420	$	972,176	$	982,596	$	1,537

Schedule of Nonaccrual Status Loans and Nonperforming Assets

The following table presents a summary of the nonaccrual status of loans by type at June 30, 2012 and December 31, 2011 and other nonperforming assets:



(Dollars in thousands)	June 30, 2012		December 31, 2011
Construction and land development loans	$	1,373	$	4,398
Other commercial real estate loans	2,557		9,937
Asset based loans	—		—
Other commercial loans	629		913
Home equity loans	116		474
Other 1-4 family residential loans	1,748		1,422
Consumer loans	20		33
Total nonaccrual loans	$	6,443	$	17,177
Other real estate owned	31,077		36,952
Total nonperforming credit-related assets	$	37,520	$	54,129

Schedule of Loans by Credit Risk Rating

The following table presents a summary of loans by credit risk rating at June 30, 2012.



(Dollars in thousands)
	Construction		Other Commercial Real Estate		Asset-Based		Other Commercial
10 and 20	$	—	$	—	$	—	$	20,919
30-32	43,604		403,986		24,065		86,496
40	12,838		65,839		11,572		2,298
50	10,772		29,545		1,052		1,296
60	600		—		—		75
Total	$	67,814	$	499,370	$	36,689	$	111,084



(Dollars in thousands)
	Home Equity		Other 1-4 Family		Consumer		Total
10 and 20	$	—	$	114	$	13,291	$	34,324
30-32	34,033		174,642		27,427		794,253
40	977		8,745		605		102,874
50	1,173		6,335		203		50,376
60	—		91		3		769
Total	$	36,183	$	189,927	$	41,529	$	982,596

Note 4: (Continued)

The following table presents a summary of loans by credit risk rating at December 31, 2011.



(Dollars in thousands)
	Construction		Other Commercial Real Estate		Asset-Based		Other Commercial
10 and 20	$	—	$	—	$	—	$	11,085
30-32	45,982		406,498		29,296		103,359
40	5,185		57,912		7,096		1,802
50	13,059		40,770		1,148		1,466
60	5,099		—		—		78
Total	$	69,325	$	505,180	$	37,540	$	117,790



(Dollars in thousands)
	Home Equity		Other 1-4 Family		Consumer		Total
10 and 20	$	—	$	119	$	13,486	$	24,690
30-32	35,824		172,182		28,471		821,612
40	585		8,205		544		81,329
50	615		6,216		162		63,436
60	—		93		3		5,273
Total	$	37,024	$	186,815	$	42,666	$	996,340

Schedule of Loans Individually Reviewed for Impairment Allowances and Averaged Recorded Investment in Impaired Loans

The following table summarizes the average recorded investment in impaired loans and the amount of interest income recognized for the second quarter and first half of 2011:



(Dollars in thousands)	Average Investment In Impaired Loans		Interest Income Recognized		Average Investment In Impaired Loans		Interest Income Recognized
	Quarter-to-Date		Quarter-to-Date		Year-to-Date		Year-to-Date
Loans without a specific valuation allowance:
Construction and land development loans	$	9,294	$	115	$	14,894	$	247
Other commercial real estate loans	19,933		290		34,179		774
Asset based loans	—		—		—		—
Other commercial loans	—		—		3,156		79
Home equity loans	730		4		719		4
Other 1-4 family residential loans	2,905		31		3,000		65
Consumer loans	416		7		471		14
Loans with a specific valuation allowance:
Construction and land development loans	$	16,583	$	97	$	14,700	$	193
Other commercial real estate loans	23,563		1		16,656		47
Asset based loans	—		—		—		—
Other commercial loans	5,490		53		3,413		62
Home equity loans	—		—		—		—
Other 1-4 family residential loans	3,725		40		3,291		44
Consumer loans	7		1		56		1
Total:
Construction and land development loans	$	25,877	$	212	$	29,594	$	440
Other commercial real estate loans	43,496		291		50,835		821
Asset based loans	—		—		—		—
Other commercial loans	5,490		53		6,569		141
Home equity loans	730		4		719		4
Other 1-4 family residential loans	6,630		71		6,291		109
Consumer loans	423		8		527		15

The following table summarizes loans that were individually reviewed for impairment allowances at December 31, 2011:



(Dollars in thousands)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Construction and land development loans	$	9,539	$	13,915	$	—
Other commercial real estate loans	33,048		36,117		—
Asset based loans	—		—		—
Other commercial loans	433		460		—
Home equity loans	159		159		—
Other 1-4 family residential loans	4,466		4,732		—
Consumer loans	128		154		—
Loans with a specific valuation allowance:
Construction and land development loans	$	8,620	$	11,294	$	1,750
Other commercial real estate loans	7,722		8,471		894
Asset based loans	—		—		—
Other commercial loans	1,111		1,111		485
Home equity loans	456		456		166
Other 1-4 family residential loans	1,843		1,843		397
Consumer loans	37		37		37
Total:
Construction and land development loans	$	18,159	$	25,209	$	1,750
Other commercial real estate loans	40,770		44,588		894
Asset based loans	—		—		—
Other commercial loans	1,544		1,571		485
Home equity loans	615		615		166
Other 1-4 family residential loans	6,309		6,575		397
Consumer loans	165		191		37

The following table summarizes loans that were individually reviewed for impairment allowances at June 30, 2012:



(Dollars in thousands)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Construction and land development loans	$	7,028	$	9,382	$	—
Other commercial real estate loans	37,763		39,601		—
Asset based loans	—		—		—
Other commercial loans	687		713		—
Home equity loans	1,099		1,099		—
Other 1-4 family residential loans	4,187		4,245		—
Consumer loans	112		124		—
Loans with a specific valuation allowance:
Construction and land development loans	$	4,344	$	4,344	$	1,120
Other commercial real estate loans	6,933		6,962		1,372
Asset based loans	—		—		—
Other commercial loans	684		813		496
Home equity loans	74		74		36
Other 1-4 family residential loans	2,239		2,239		520
Consumer loans	94		95		94
Total:
Construction and land development loans	$	11,372	$	13,726	$	1,120
Other commercial real estate loans	44,696		46,563		1,372
Asset based loans	—		—		—
Other commercial loans	1,371		1,526		496
Home equity loans	1,173		1,173		36
Other 1-4 family residential loans	6,426		6,484		520
Consumer loans	206		219		94

The following table summarizes loans that were individually reviewed for impairment allowances at June 30, 2011:



(Dollars in thousands)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Construction and land development loans	$	13,493	$	18,319	$	—
Other commercial real estate loans	34,100		36,754		—
Asset based loans	—		—		—
Other commercial loans	728		754		—
Home equity loans	721		721		—
Other 1-4 family residential loans	2,835		2,836		—
Consumer loans	452		462		—
Loans with a specific valuation allowance:
Construction and land development loans	$	14,209	$	18,046	$	3,333
Other commercial real estate loans	16,459		18,129		2,658
Asset based loans	—		—		—
Other commercial loans	3,393		3,545		1,341
Home equity loans	—		—		—
Other 1-4 family residential loans	3,286		3,307		1,261
Consumer loans	54		54		40
Total:
Construction and land development loans	$	27,702	$	36,365	$	3,333
Other commercial real estate loans	50,559		54,883		2,658
Asset based loans	—		—		—
Other commercial loans	4,121		4,299		1,341
Home equity loans	721		721		—
Other 1-4 family residential loans	6,121		6,143		1,261
Consumer loans	506		516		40

The following table summarizes the average recorded investment in impaired loans and the amount of interest income recognized for the second quarter and first half of 2012:



(Dollars in thousands)	Average Investment In Impaired Loans		Interest Income Recognized		Average Investment In Impaired Loans		Interest Income Recognized
	Quarter-to-Date		Quarter-to-Date		Year-to-Date		Year-to-Date
Loans without a specific valuation allowance:
Construction and land development loans	$	11,818	$	77	$	12,856	$	228
Other commercial real estate loans	35,435		435		34,911		844
Asset based loans	—		—		—		—
Other commercial loans	664		13		669		22
Home equity loans	1,135		13		732		14
Other 1-4 family residential loans	4,159		65		4,716		118
Consumer loans	108		3		119		5
Loans with a specific valuation allowance:
Construction and land development loans	$	4,351	$	70	$	4,491	$	101
Other commercial real estate loans	11,178		168		10,400		229
Asset based loans	—		—		—		—
Other commercial loans	576		1		698		7
Home equity loans	76		4		201		6
Other 1-4 family residential loans	2,561		18		2,460		49
Consumer loans	126		2		87		3
Total:
Construction and land development loans	$	16,169	$	147	$	17,347	$	329
Other commercial real estate loans	46,613		603		45,311		1,073
Asset based loans	—		—		—		—
Other commercial loans	1,240		14		1,367		29
Home equity loans	1,211		17		933		20
Other 1-4 family residential loans	6,720		83		7,176		167
Consumer loans	234		5		206		8

Schedule of Allowance for Loan Losses, by Loan Cateogry

The following table summarizes activity in the allowance for loan losses for the six months ended June 30, 2012 by loan category:



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	4,131		$	4,073		$	3,347		$	2,607		$	795		$	—	$	14,953
Provision charged to expense	935			3,146			51			426			2			—		4,560
Losses charged off	(1,506		)	(2,584		)	(479		)	(596		)	(356		)	—		(5,521		)
Recoveries	588			141			104			355			130			—		1,318
Balance, end of period	$	4,148		$	4,776		$	3,023		$	2,792		$	571		$	—	$	15,310
Ending balance:
Individually evaluated for impairment	$	1,120		$	1,372		$	496		$	556		$	94		$	—	$	3,638
Ending balance:
Collectively evaluated for impairment	$	3,028		$	3,404		$	2,527		$	2,236		$	477		$	—	$	11,672
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—
Loans:
Ending balance	$	67,814		$	499,370		$	147,773		$	226,110		$	41,529		$	—	$	982,596
Ending balance:
Individually evaluated for impairment	$	11,372		$	44,696		$	1,371		$	7,599		$	206		$	—	$	65,244
Ending balance:
Collectively evaluated for impairment	$	56,442		$	454,674		$	146,402		$	218,511		$	41,323		$	—	$	917,352
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—

The following table summarizes activity in the allowance for loan losses for the three months ended June 30, 2012 by loan category:



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	4,426		$	5,280		$	2,856		$	2,946		$	576		$	—	$	16,084
Provision charged to expense	903			700			406			168			103			—		2,280
Losses charged off	(1,414		)	(1,231		)	(271		)	(357		)	(187		)	—		(3,460		)
Recoveries	233			27			32			35			79			—		406
Balance, end of period	$	4,148		$	4,776		$	3,023		$	2,792		$	571		$	—	$	15,310

The following table summarizes the balance in the allowance for loan losses at December 31, 2011 by loan category:



(Dollars in thousands)
	Construction		Other CRE		Commercial		Residential		Consumer		Unallocated		Total
Balance December 31, 2011	$	4,131	$	4,073	$	3,347	$	2,607	$	795	$	—	$	14,953
Balance December 31, 2011:
Individually evaluated for impairment	$	1,750	$	894	$	485	$	563	$	37	$	—	$	3,729
Balance December 31, 2011:
Collectively evaluated for impairment	$	2,381	$	3,179	$	2,862	$	2,044	$	758	$	—	$	11,224
Balance December 31, 2011:
Loans acquired with deteriorated credit quality	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans:
Balance December 31, 2011:	$	69,325	$	505,180	$	155,330	$	223,839	$	42,666	$	—	$	996,340
Balance December 31, 2011:
Individually evaluated for impairment	$	18,159	$	40,770	$	1,544	$	6,924	$	165	$	—	$	67,562
Balance December 31, 2011:
Collectively evaluated for impairment	$	51,166	$	464,410	$	153,786	$	216,915	$	42,501	$	—	$	928,778
Balance December 31, 2011:
Loans acquired with deteriorated credit quality	$	—	$	—	$	—	$	—	$	—	$	—	$	—

The following table summarizes activity in the allowance for loan losses for the six months ended June 30, 2011 by loan category:



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	3,942		$	2,763		$	4,442		$	3,701		$	1,177		$	—	$	16,025
Provision charged to expense	127			2,092			1,798			566			277			—		4,860
Losses charged off	(331		)	(1,017		)	(1,095		)	(706		)	(440		)	—		(3,589		)
Recoveries	882			264			137			121			105			—		1,509
Balance, end of period	$	4,620		$	4,102		$	5,282		$	3,682		$	1,119		$	—	$	18,805
Ending balance:
Individually evaluated for impairment	$	3,333		$	2,658		$	1,341		$	1,261		$	40		$	—	$	8,633
Ending balance:
Collectively evaluated for impairment	$	1,287		$	1,444		$	3,941		$	2,421		$	1,079		$	—	$	10,172
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—
Loans:
Ending balance	$	87,826		$	533,720		$	152,063		$	226,823		$	44,163		$	—	$	1,044,595
Ending balance:
Individually evaluated for impairment	$	27,702		$	50,559		$	4,121		$	6,842		$	506		$	—	$	89,730
Ending balance:
Collectively evaluated for impairment	$	60,124		$	483,161		$	147,942		$	219,981		$	43,657		$	—	$	954,865
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—

The following table summarizes activity in the allowance for loan losses for the three months ended June 30, 2011 by loan category:



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	4,124		$	3,165		$	5,023		$	3,606		$	1,125		$	—	$	17,043
Provision charged to expense	13			1,295			421			366			185			—		2,280
Losses charged off	(111		)	(515		)	(255		)	(326		)	(235		)	—		(1,442		)
Recoveries	594			157			93			36			44			—		924
Balance, end of period	$	4,620		$	4,102		$	5,282		$	3,682		$	1,119		$	—	$	18,805

Schedule of Restructured Loan Portfolio

The following table presents information about the Company’s restructured loan portfolio as of June 30, 2012 and December 31, 2011:



(Dollars in thousands)	June 30, 2012				December 31, 2011
	Recorded Balance		Allowance		Recorded Balance		Allowance
Restructured loans with an allowance:
Construction and land development loans	$	295	$	16	$	136	$	61
Other commercial real estate loans	4,447		603		4,018		320
Other commercial loans	238		238		387		117
Other 1-4 family residential loans	198		80		199		76
Restructured loans without an allowance:
Construction and land development loans	2,282		—		2,725		—
Other commercial real estate loans	11,707		—		17,002		—
Other commercial loans	92		—		119		—
Other 1-4 family residential loans	469		—		1,194		—
Total restructured loans	$	19,728	$	937	$	25,780	$	574

Schedule of Trouble Debt Restructurings

The following table summarizes the activity for trouble debt restructurings that occurred in the second quarter of 2011.

Note 4: (Continued)



(Dollars in thousands)	Number of Loans Modified	Pre Modification Balance		Post Modification Balance
Interest Rate Modifications:
Construction and land development loans	2	$	662	$	662
Total rate modifications	2	$	662	$	662

Term Extensions and Renewals:
Construction and land development loans	2	$	1,004	$	949
Other commercial real estate loans	5	4,188		4,175
Other commercial loans	1	1,828		1,797
Other 1-4 family residential loans	1	153		152
Total extensions and renewals	9	$	7,173	$	7,073
Total loans restructured	11	$	7,835	$	7,735

The following table presents loans modified under the terms of a TDR that became 90 days or more delinquent or were foreclosed on during the three and six month periods ended June 30, 2012, that were initially restructured within the prior twelve months.



(Dollars in thousands)	Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
	Number of Loans	Amortized Cost		Number of Loans	Amortized Cost
Other commercial loans	—	$	—	1	$	335
Other 1-4 family residential loans	1	152		2	304
Total subsequent defaults	1	$	152	3	$	639