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Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 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 $1.074 million at September 30, 2012 and $2.045 million at December 31, 2011:



(Dollars in thousands)	September 30, 2012		December 31, 2011
Construction and land development loans	$	57,613	$	69,325
Other commercial real estate loans	496,862		505,180
Asset-based loans	42,436		37,540
Other commercial loans	113,454		117,790
Home equity loans	37,196		37,024
Other 1-4 family residential loans	197,629		186,815
Consumer loans	42,137		42,666
Total loans	$	987,327	$	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 September 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	$	544	$	64	$	1,023	$	1,631	$	55,982	$	57,613	$	—
Other commercial real estate loans	15,726		22		1,988		17,736		479,126		496,862		172
Asset based loans	—		—		—		—		42,436		42,436		—
Other commercial loans	123		162		339		624		112,830		113,454		152
Home equity loans	139		—		10		149		37,047		37,196		10
Other 1-4 family residential loans	1,813		429		468		2,710		194,919		197,629		67
Consumer loans	115		72		10		197		41,940		42,137		7
Total	$	18,460	$	749	$	3,838	$	23,047	$	964,280	$	987,327	$	408

Schedule of Nonaccrual Status Loans and Nonperforming Assets

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



(Dollars in thousands)	September 30, 2012		December 31, 2011
Construction and land development loans	$	1,465	$	4,398
Other commercial real estate loans	2,658		9,937
Asset based loans	—		—
Other commercial loans	613		913
Home equity loans	98		474
Other 1-4 family residential loans	1,369		1,422
Consumer loans	16		33
Total nonaccrual loans	$	6,219	$	17,177
Other real estate owned	28,002		36,952
Total nonperforming credit-related assets	$	34,221	$	54,129

Schedule of Loans by Credit Risk Rating

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



(Dollars in thousands)
	Construction		Other Commercial Real Estate		Asset-Based		Other Commercial
10 and 20	$	—	$	—	$	—	$	21,389
30-32	39,978		396,742		26,670		88,154
40	6,512		70,839		15,387		2,462
50	10,523		29,281		379		1,375
60	600		—		—		74
Total	$	57,613	$	496,862	$	42,436	$	113,454



(Dollars in thousands)
	Home Equity		Other 1-4 Family		Consumer		Total
10 and 20	$	—	$	59	$	13,070	$	34,518
30-32	35,313		181,556		28,361		796,774
40	729		9,366		567		105,862
50	1,154		6,558		137		49,407
60	—		90		2		766
Total	$	37,196	$	197,629	$	42,137	$	987,327

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 third quarter and first nine months 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	$	9,131	$	147	$	12,952	$	394
Other commercial real estate loans	34,221		384		34,193		1,158
Asset based loans	—		—		—		—
Other commercial loans	1,486		4		2,567		83
Home equity loans	—		—		389		4
Other 1-4 family residential loans	7,927		119		4,747		184
Consumer loans	—		—		166		14
Loans with a specific valuation allowance:
Construction and land development loans	$	10,497	$	106	$	13,283	$	299
Other commercial real estate loans	3,450		67		12,205		114
Asset based loans	—		—		—		—
Other commercial loans	1,214		29		2,672		91
Home equity loans	614		1		207		1
Other 1-4 family residential loans	—		—		1,754		44
Consumer loans	—		—		30		1
Total:
Construction and land development loans	$	19,628	$	253	$	26,235	$	693
Other commercial real estate loans	37,671		451		46,398		1,272
Asset based loans	—		—		—		—
Other commercial loans	2,700		33		5,239		174
Home equity loans	614		1		596		5
Other 1-4 family residential loans	7,927		119		6,501		228
Consumer loans	—		—		196		15

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



(Dollars in thousands)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Construction and land development loans	$	6,915	$	9,269	$	—
Other commercial real estate loans	29,160		29,299		—
Asset based loans	—		—		—
Other commercial loans	967		967		—
Home equity loans	1,080		1,080		—
Other 1-4 family residential loans	5,092		5,191		—
Consumer loans	100		104		—
Loans with a specific valuation allowance:
Construction and land development loans	$	4,208	$	4,208	$	1,165
Other commercial real estate loans	15,145		16,555		2,182
Asset based loans	—		—		—
Other commercial loans	481		578		450
Home equity loans	74		74		36
Other 1-4 family residential loans	1,556		1,556		400
Consumer loans	39		39		39
Total:
Construction and land development loans	$	11,123	$	13,477	$	1,165
Other commercial real estate loans	44,305		45,854		2,182
Asset based loans	—		—		—
Other commercial loans	1,448		1,545		450
Home equity loans	1,154		1,154		36
Other 1-4 family residential loans	6,648		6,747		400
Consumer loans	139		143		39

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



(Dollars in thousands)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Construction and land development loans	$	11,279	$	14,152	$	—
Other commercial real estate loans	33,835		36,452		—
Asset based loans	—		—		—
Other commercial loans	526		553		—
Home equity loans	384		384		—
Other 1-4 family residential loans	4,694		4,939		—
Consumer loans	120		146		—
Loans with a specific valuation allowance:
Construction and land development loans	$	12,936	$	16,630	$	2,350
Other commercial real estate loans	12,083		13,753		1,381
Asset based loans	—		—		—
Other commercial loans	1,373		1,475		614
Home equity loans	207		207		116
Other 1-4 family residential loans	1,749		1,771		569
Consumer loans	26		26		26
Total:
Construction and land development loans	$	24,215	$	30,782	$	2,350
Other commercial real estate loans	45,918		50,205		1,381
Asset based loans	—		—		—
Other commercial loans	1,899		2,028		614
Home equity loans	591		591		116
Other 1-4 family residential loans	6,443		6,710		569
Consumer loans	146		172		26

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 the average recorded investment in impaired loans and the amount of interest income recognized for the third quarter and first nine months 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	$	6,935	$	80	$	10,861	$	308
Other commercial real estate loans	24,168		266		31,291		1,110
Asset based loans	—		—		—		—
Other commercial loans	1,549		17		965		39
Home equity loans	1,831		15		1,102		29
Other 1-4 family residential loans	7,702		75		5,723		193
Consumer loans	272		4		171		9
Loans with a specific valuation allowance:
Construction and land development loans	$	2,978	$	38	$	3,981	$	139
Other commercial real estate loans	24,748		297		15,236		526
Asset based loans	—		—		—		—
Other commercial loans	42		5		477		12
Home equity loans	76		1		159		7
Other 1-4 family residential loans	832		4		1,917		53
Consumer loans	39		—		71		3
Total:
Construction and land development loans	$	9,913	$	118	$	14,842	$	447
Other commercial real estate loans	48,916		563		46,527		1,636
Asset based loans	—		—		—		—
Other commercial loans	1,591		22		1,442		51
Home equity loans	1,907		16		1,261		36
Other 1-4 family residential loans	8,534		79		7,640		246
Consumer loans	311		4		242		12

Schedule of Allowance for Loan Losses, by Loan Cateogry

The following table summarizes activity in the allowance for loan losses for the nine months ended September 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	701			4,199			631			741			268			—		6,540
Losses charged off	(1,594		)	(2,810		)	(667		)	(925		)	(560		)	—		(6,556		)
Recoveries	754			288			130			369			178			—		1,719
Balance, end of period	$	3,992		$	5,750		$	3,441		$	2,792		$	681		$	—	$	16,656
Ending balance:
Individually evaluated for impairment	$	1,165		$	2,182		$	450		$	436		$	39		$	—	$	4,272
Ending balance:
Collectively evaluated for impairment	$	2,827		$	3,568		$	2,991		$	2,356		$	642		$	—	$	12,384
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—
Loans:
Ending balance	$	57,613		$	496,862		$	155,890		$	234,825		$	42,137		$	—	$	987,327
Ending balance:
Individually evaluated for impairment	$	11,123		$	44,305		$	1,448		$	7,802		$	139		$	—	$	64,817
Ending balance:
Collectively evaluated for impairment	$	46,490		$	452,557		$	154,442		$	227,023		$	41,998		$	—	$	922,510
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—

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



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	4,148		$	4,776		$	3,023		$	2,792		$	571		$	—	$	15,310
Provision charged to expense	(234		)	1,053			580			315			266			—		1,980
Losses charged off	(88		)	(226		)	(188		)	(329		)	(204		)	—		(1,035		)
Recoveries	166			147			26			14			48			—		401
Balance, end of period	$	3,992		$	5,750		$	3,441		$	2,792		$	681		$	—	$	16,656

The following table summarizes activity in the allowance for loan losses for the nine months ended September 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	1,891			3,798			908			693			150			—		7,440
Losses charged off	(1,672		)	(2,503		)	(2,227		)	(1,920		)	(686		)	—		(9,008		)
Recoveries	929			276			172			130			147			—		1,654
Balance, end of period	$	5,090		$	4,334		$	3,295		$	2,604		$	788		$	—	$	16,111
Ending balance:
Individually evaluated for impairment	$	2,350		$	1,381		$	614		$	685		$	26		$	—	$	5,056
Ending balance:
Collectively evaluated for impairment	$	2,740		$	2,953		$	2,681		$	1,919		$	762		$	—	$	11,055
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—
Loans:
Ending balance	$	83,100		$	520,804		$	143,133		$	223,884		$	44,045		$	—	$	1,014,966
Ending balance:
Individually evaluated for impairment	$	24,215		$	45,918		$	1,899		$	7,034		$	146		$	—	$	79,212
Ending balance:
Collectively evaluated for impairment	$	58,885		$	474,886		$	141,234		$	216,850		$	43,899		$	—	$	935,754
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—

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



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	4,620		$	4,102		$	5,282		$	3,682		$	1,119		$	—	$	18,805
Provision charged to expense	1,764			1,706			(890		)	127			(127		)	—		2,580
Losses charged off	(1,341		)	(1,486		)	(1,132		)	(1,214		)	(246		)	—		(5,419		)
Recoveries	47			12			35			9			42			—		145
Balance, end of period	$	5,090		$	4,334		$	3,295		$	2,604		$	788		$	—	$	16,111

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	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Schedule of Restructured Loan Portfolio

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



(Dollars in thousands)	September 30, 2012				December 31, 2011
	Recorded Balance		Allowance		Recorded Balance		Allowance
Restructured loans with an allowance:
Construction and land development loans	$	442	$	63	$	136	$	61
Other commercial real estate loans	4,571		922		4,018		320
Other commercial loans	238		238		387		117
Other 1-4 family residential loans	60		13		199		76
Restructured loans without an allowance:
Construction and land development loans	1,219		—		2,725		—
Other commercial real estate loans	11,483		—		17,002		—
Other commercial loans	79		—		119		—
Other 1-4 family residential loans	568		—		1,194		—
Total restructured loans	$	18,660	$	1,236	$	25,780	$	574

Schedule of Trouble Debt Restructurings

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 nine month periods ended September 30, 2011, that were initially restructured within the prior twelve months.



(Dollars in thousands)	Three Months Ended September 30, 2011			Nine Months Ended September 30, 2011
	Number of Loans	Amortized Cost		Number of Loans	Amortized Cost
Construction and land development loans	2	$	1,951	2	$	1,951
Other commercial real estate loans	4	6,497		4	6,497
Other 1-4 family residential loans	3	155		3	155
Total subsequent defaults	9	$	8,603	9	$	8,603

There were no loans restructured during the third quarter of 2012 or during the first nine months of 2012. The following table summarizes the activity for troubled debt restructurings that occurred in the third quarter of 2011.



(Dollars in thousands)	Number of Loans Modified	Pre Modification Balance		Post Modification Balance
Interest Rate Modifications:
Construction and land development loans	1	$	465	$	463
Other commercial real estate loans	1	181		180
Total rate modifications	2	$	646	$	643

Term Extensions and Renewals:
Construction and land development loans	1	$	404	$	404
Other commercial real estate loans	1	109		109
Other commercial loans	—	—		—
Other 1-4 family residential loans	1	345		345
Total extensions and renewals	3	$	858	$	858
Total loans restructured	5	$	1,504	$	1,501

The following table summarizes the activity for troubled debt restructurings that occurred during the first nine months of 2011.



(Dollars in thousands)	Number of Loans Modified	Pre Modification Balance		Post Modification Balance
Interest Rate Modifications:
Construction and land development loans	3	$	1,156	$	1,125
Other commercial real estate loans	2	340		338
Other 1-4 family residential loans	3	158		157
Total rate modifications	8	$	1,654	$	1,620

Term Extensions and Renewals:
Construction and land development loans	4	$	2,987	$	2,987
Other commercial real estate loans	7	9,663		9,663
Other commercial loans	1	1,797		1,797
Other 1-4 family residential loans	2	496		496
Total extensions and renewals	14	$	14,943	$	14,943
Total loans restructured	22	$	16,597	$	16,563

Note 4: (Continued)

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 nine month periods ended September 30, 2012, that were initially restructured within the prior twelve months.



(Dollars in thousands)	Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
	Number of Loans	Amortized Cost		Number of Loans	Amortized Cost
Construction and land development loans	1	$	295	1	$	295
Other commercial loans	—	—		1	335
Other 1-4 family residential loans	1	38		3	342
Total subsequent defaults	2	$	333	5	$	972