Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2013

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 $330 thousand at June 30, 2013 and $736 thousand at December 31, 2012:



(Dollars in thousands)	June 30, 2013		December 31, 2012
Construction and land development loans	$	63,233	$	58,745
Other commercial real estate loans	477,461		484,114
Asset-based loans	30,905		36,679
Other commercial loans	114,506		116,871
Home equity loans	38,340		37,736
Other 1-4 family residential loans	206,490		200,992
Consumer loans	36,078		40,336
Total loans	$	967,013	$	975,473

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 June 30, 2013:



(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	$	72	$	—	$	606	$	678	$	62,555	$	63,233	$	—
Other commercial real estate loans	8,517		539		955		10,011		467,450		477,461		—
Asset based loans	—		—		81		81		30,824		30,905		—
Other commercial loans	450		132		228		810		113,696		114,506		61
Home equity loans	73		12		286		371		37,969		38,340		37
Other 1-4 family residential loans	1,704		53		1,660		3,417		203,073		206,490		46
Consumer loans	132		53		63		248		35,830		36,078		42
Total	$	10,948	$	789	$	3,879	$	15,616	$	951,397	$	967,013	$	186

The following table presents a summary of the past due status of all loans, including nonaccrual loans, by type at December 31, 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	$	369	$	26	$	817	$	1,212	$	57,533	$	58,745	$	—
Other commercial real estate loans	1,255		294		3,647		5,196		478,918		484,114		66
Asset based loans	—		—		81		81		36,598		36,679		—
Other commercial loans	366		50		408		824		116,047		116,871		64
Home equity loans	49		—		31		80		37,656		37,736		31
Other 1-4 family residential loans	1,329		584		791		2,704		198,288		200,992		137
Consumer loans	217		60		23		300		40,036		40,336		23
Total	$	3,585	$	1,014	$	5,798	$	10,397	$	965,076	$	975,473	$	321

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, 2013 and December 31, 2012 and other nonperforming assets:



(Dollars in thousands)	June 30, 2013		December 31, 2012
Construction and land development loans	$	672	$	817
Other commercial real estate loans	2,073		4,244
Asset based loans	81		81
Other commercial loans	552		694
Home equity loans	337		72
Other 1-4 family residential loans	2,286		1,524
Consumer loans	35		12
Total nonaccrual loans	$	6,036	$	7,444
Other real estate owned	19,721		25,970
Total nonperforming credit-related assets	$	25,757	$	33,414

Schedule of Loans by Credit Risk Rating

The following table presents a summary of loans by credit risk rating at June 30, 2013:



(Dollars in thousands)
	Construction and Land Development		Other Commercial Real Estate		Asset-Based		Other Commercial
10 and 20	$	—	$	—	$	—	$	11,673
30-32	45,389		397,760		24,068		95,244
40	7,895		51,617		6,756		6,263
50	9,343		28,084		81		1,257
60	606		—		—		69
Total	$	63,233	$	477,461	$	30,905	$	114,506



(Dollars in thousands)
	Home Equity		Other 1-4 Family		Consumer		Total
10 and 20	$	—	$	48	$	12,774	$	24,495
30-32	36,756		189,887		22,610		811,714
40	741		8,824		470		82,566
50	843		7,644		223		47,475
60	—		87		1		763
Total	$	38,340	$	206,490	$	36,078	$	967,013

The following table presents a summary of loans by credit risk rating at December 31, 2012:



(Dollars in thousands)
	Construction and Land Development		Other Commercial Real Estate		Asset-Based		Other Commercial
10 and 20	$	—	$	—	$	—	$	10,329
30-32	41,560		394,904		25,830		101,937
40	6,847		62,387		10,572		3,253
50	9,738		26,823		277		1,280
60	600		—		—		72
Total	$	58,745	$	484,114	$	36,679	$	116,871



(Dollars in thousands)
	Home Equity		Other 1-4 Family		Consumer		Total
10 and 20	$	—	$	58	$	13,161	$	23,548
30-32	35,848		184,703		26,439		811,221
40	733		9,529		602		93,923
50	1,155		6,613		132		46,018
60	—		89		2		763
Total	$	37,736	$	200,992	$	40,336	$	975,473

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

The following table summarizes loans that were individually reviewed for impairment allowances at June 30, 2013:



(Dollars in thousands)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Construction and land development loans	$	6,098	$	8,452	$	—
Other commercial real estate loans	15,609		15,904		—
Asset based loans	—		—		—
Other commercial loans	946		946		—
Home equity loans	408		441		—
Other 1-4 family residential loans	5,146		5,146		—
Consumer loans	176		180		—
Loans with a specific valuation allowance:
Construction and land development loans	$	3,851	$	3,851	$	2,205
Other commercial real estate loans	15,773		17,184		3,443
Asset based loans	—		—		—
Other commercial loans	380		380		332
Home equity loans	435		435		195
Other 1-4 family residential loans	2,585		2,585		868
Consumer loans	48		48		48
Total:
Construction and land development loans	$	9,949	$	12,303	$	2,205
Other commercial real estate loans	31,382		33,088		3,443
Asset based loans	—		—		—
Other commercial loans	1,326		1,326		332
Home equity loans	843		876		195
Other 1-4 family residential loans	7,731		7,731		868
Consumer loans	224		228		48

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 2013:



(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	$	6,190	$	92		$	6,266	$	160
Other commercial real estate loans	12,495		160			18,225		417
Asset based loans	—		—			—		—
Other commercial loans	984		11			963		23
Home equity loans	58		(3		)	577		10
Other 1-4 family residential loans	4,920		56			5,570		113
Consumer loans	192		3			158		3
Loans with a specific valuation allowance:
Construction and land development loans	$	3,871	$	46		$	3,882	$	87
Other commercial real estate loans	19,363		270			15,874		417
Asset based loans	—		—			—		—
Other commercial loans	415		3			373		7
Home equity loans	872		6			438		6
Other 1-4 family residential loans	3,345		46			2,521		62
Consumer loans	46		1			44		2
Total:
Construction and land development loans	$	10,061	$	138		$	10,148	$	247
Other commercial real estate loans	31,858		430			34,099		834
Asset based loans	—		—			—		—
Other commercial loans	1,399		14			1,336		30
Home equity loans	930		3			1,015		16
Other 1-4 family residential loans	8,265		102			8,091		175
Consumer loans	238		4			202		5

Note 4: (Continued)

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 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

The following table summarizes loans that were individually reviewed for impairment allowances at December 31, 2012:



(Dollars in thousands)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Construction and land development loans	$	6,903	$	9,257	$	—
Other commercial real estate loans	27,156		27,353		—
Asset based loans	—		—		—
Other commercial loans	1,093		1,254		—
Home equity loans	1,084		1,084		—
Other 1-4 family residential loans	6,577		6,687		—
Consumer loans	94		97		—
Loans with a specific valuation allowance:
Construction and land development loans	$	3,435	$	3,435	$	2,036
Other commercial real estate loans	14,766		16,177		2,421
Asset based loans	—		—		—
Other commercial loans	259		259		209
Home equity loans	72		72		36
Other 1-4 family residential loans	1,920		1,920		496
Consumer loans	40		40		40
Total:
Construction and land development loans	$	10,338	$	12,692	$	2,036
Other commercial real estate loans	41,922		43,530		2,421
Asset based loans	—		—		—
Other commercial loans	1,352		1,513		209
Home equity loans	1,156		1,156		36
Other 1-4 family residential loans	8,497		8,607		496
Consumer loans	134		137		40

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, 2013 by loan category:



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	4,909		$	5,865		$	3,266		$	2,886		$	566		$	—	$	17,492
Provision charged to expense	307			1,725			61			384			183			—		2,660
Losses charged off	(13		)	(617		)	(150		)	(284		)	(252		)	—		(1,316		)
Recoveries	96			121			148			147			83			—		595
Balance, end of period	$	5,299		$	7,094		$	3,325		$	3,133		$	580		$	—	$	19,431
Ending balance:
Individually evaluated for impairment	$	2,205		$	3,443		$	332		$	1,063		$	48		$	—	$	7,091
Ending balance:
Collectively evaluated for impairment	$	3,094		$	3,651		$	2,993		$	2,070		$	532		$	—	$	12,340
Ending balance:
Loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—		$	—	$	—
Loans:
Ending balance	$	63,233		$	477,461		$	145,411		$	244,830		$	36,078		$	—	$	967,013
Ending balance:
Individually evaluated for impairment	$	9,949		$	31,382		$	1,326		$	8,574		$	224		$	—	$	51,455
Ending balance:
Collectively evaluated for impairment	$	53,284		$	446,079		$	144,085		$	236,256		$	35,854		$	—	$	915,558
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, 2013 by loan category:



(Dollars in thousands)
	Construction			Other CRE			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Balance, beginning of period	$	5,259		$	6,400		$	3,299		$	2,751		$	560		$	—	$	18,269
Provision charged to expense	(9		)	862			19			388			120			—		1,380
Losses charged off	(13		)	(256		)	(31		)	(135		)	(134		)	—		(569		)
Recoveries	62			88			38			129			34			—		351
Balance, end of period	$	5,299		$	7,094		$	3,325		$	3,133		$	580		$	—	$	19,431

The following table summarizes the balance in the allowance for loan losses at December 31, 2012 by loan category:



(Dollars in thousands)
	Construction		Other CRE		Commercial		Residential		Consumer		Unallocated		Total
Balance December 31, 2012	$	4,909	$	5,865	$	3,266	$	2,886	$	566	$	—	$	17,492
Balance December 31, 2012:
Individually evaluated for impairment	$	2,036	$	2,421	$	209	$	532	$	40	$	—	$	5,238
Balance December 31, 2012:
Collectively evaluated for impairment	$	2,873	$	3,444	$	3,057	$	2,354	$	526	$	—	$	12,254
Balance December 31, 2012:
Loans acquired with deteriorated credit quality	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans:
Balance December 31, 2012:	$	58,745	$	484,114	$	153,550	$	238,728	$	40,336	$	—	$	975,473
Balance December 31, 2012:
Individually evaluated for impairment	$	10,338	$	41,922	$	1,352	$	9,653	$	134	$	—	$	63,399
Balance December 31, 2012:
Collectively evaluated for impairment	$	48,407	$	442,192	$	152,198	$	229,075	$	40,202	$	—	$	912,074
Balance December 31, 2012:
Loans acquired with deteriorated credit quality	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

Schedule of Restructured Loan Portfolio

The following table presents information about the Company’s restructured loan portfolio as of June 30, 2013 and December 31, 2012:



(Dollars in thousands)	June 30, 2013				December 31, 2012
	Recorded Balance		Allowance		Recorded Balance		Allowance
Restructured loans with an allowance:
Construction and land development loans	$	392	$	164	$	—	$	—
Other commercial real estate loans	8,855		1,057		11,038		1,082
Other commercial loans	—		—		—		—
Other 1-4 family residential loans	629		212		59		12
Restructured loans without an allowance:
Construction and land development loans	901		—		1,719		—
Other commercial real estate loans	3,420		—		11,115		—
Other commercial loans	—		—		308		—
Other 1-4 family residential loans	197		—		571		—
Total restructured loans	$	14,394	$	1,433	$	24,810	$	1,094

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 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

The following table summarizes the activity for troubled debt restructurings that occurred during the three month period ending on June 30, 2013.




(Dollars in thousands)	Number of Loans Modified	Pre Modification Balance		Post Modification Balance
Interest Rate Modifications:
Other 1-4 family residential loans	1	$	27	$	27

Total rate modifications	1	$	27	$	27

The following table summarizes the activity for troubled debt restructurings that occurred during the six month period ending on June 30, 2013.




(Dollars in thousands)	Number of Loans Modified	Pre Modification Balance		Post Modification Balance
Interest Rate Modifications:
Other 1-4 family residential loans	1	$	27	$	27

Total rate modifications	1	$	27	$	27