Allowance for Loan Losses

6 Months Ended

Jun. 30, 2011

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses

Note 4 — Allowance for Loan Losses

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the prior one to five years. Management believes the two-year historical loss experience methodology is appropriate in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed.

	Three Months Ended				Six Months Ended
	June 30		June 30		June 30		June 30
	2011		2010		2011		2010
Balance at beginning of the period	$	19,090	$	16,120	$	19,064	$	16,015
Loans charged-off:
Commercial
Owner occupied real estate		113		894		124		958
Non owner occupied real estate		114		—		114		288
Residential development		—		—		—		—
Development & Spec Land Loans		—		—		—		780
Commercial and industrial		160		57		210		757
Total commercial		387		951		448		2,783
Real estate
Residential mortgage		669		287		751		597
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		669		287		751		597
Consumer
Direct Installment		217		254		402		339
Direct Installment Purchased		—		—		—		—
Indirect Installment		331		651		786		1,729
Home Equity		552		766		1,529		868
Total consumer		1,100		1,671		2,717		2,936
Total loans charged-off		2,156		2,909		3,916		6,316
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate		18		—		18		—
Non owner occupied real estate		—		—		—		—
Residential development		—		66		—		66
Development & Spec Land Loans		—		—		—		—
Commercial and industrial		3		—		5		—
Total commercial		21		66		23		66
Real estate
Residential mortgage		10		—		10		1
Residential construction		—		—		—		—
Mortgage warehouse		—		—		—		—
Total real estate		10		—		10		1
Consumer
Direct Installment		19		19		67		40
Direct Installment Purchased		—		—		—		—
Indirect Installment		220		244		389		499
Home Equity		50		3		69		5
Total consumer		289		266		525		544
Total loan recoveries		320		332		558		611
Net loans charged-off		1,836		2,577		3,358		5,705
Provision charged to operating expense		1,332		3,000		2,880		6,233
Balance at the end of the period	$	18,586	$	16,543	$	18,586	$	16,543

Management’s general practice is to proactively charge down loans individually evaluated for impairment to the fair value of the underlying collateral.

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 90 days past due, and charge down to the net realizable value when other secured loans are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment analysis:

					Mortgage
June 30, 2011 (Unaudited)	Commercial		Real Estate		Warehousing		Consumer		Total Allowance
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,490	$	—	$	—	$	—	$	1,490
Collectively evaluated for impairment		5,588		1,710		1,516		8,282		17,096
Total ending allowance balance	$	7,078	$	1,710	$	1,516	$	8,282	$	18,586
Loans:
Individually evaluated for impairment	$	9,655	$	—	$	—	$	—	$	9,655
Collectively evaluated for impairment		329,822		164,421		75,057		263,020		832,320
Total ending loans balance	$	339,477	$	164,421	$	75,057	$	263,020	$	841,975

					Mortgage
December 31, 2010	Commercial		Real Estate		Warehousing		Consumer		Total Allowance
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,457	$	—	$	—	$	—	$	1,457
Collectively evaluated for impairment		6,097		2,379		1,435		7,696		17,607
Total ending allowance balance	$	7,554	$	2,379	$	1,435	$	7,696	$	19,064
Loans:
Individually evaluated for impairment	$	8,123	$	—	$	—	$	—	$	8,123
Collectively evaluated for impairment		322,953		163,040		124,075		267,832		877,900
Total ending loans balance	$	331,076	$	163,040	$	124,075	$	267,832	$	886,023