	December 31, 2011			December 31, 2010


Commercial
Commercial and industrial	$	114,367		$	138,291
Agricultural		20,741			27,178
Commercial Real Estate
Farm		46,308			48,307
Hotel		146,358			152,416
Construction and development		30,746			59,319
Other		540,752			589,192
Residential
1-4 family		365,710			380,987
Home equity		212,202			213,607
Consumer
Direct		51,157			59,139
Indirect		6,038			12,535

Total loans		1,534,379			1,680,971
Allowance for loan losses		(39,889	)		(42,605	)

Net loans	$	1,494,490		$	1,638,366

The following table presents the activity in the allowance for loan losses by portfolio segment for the year ending December 31, 2011:

	Commercial			Commercial Real Estate			Residential			Consumer			Total


Allowance for loan loss
Balance, January 1, 2011	$	6,386		$	32,653		$	2,281		$	1,285		$	42,605
Provision charged to expense		215			13,406			3,136			1,043			17,800
Losses charged off		(2,211	)		(16,954	)		(3,093	)		(2,636	)		(24,894	)
Recoveries		1,172			1,371			648			1,187			4,378

Balance, December 31, 2011	$	5,562		$	30,476		$	2,972		$	879		$	39,889

Activity in the allowance for loan losses was as follows for the years ending December 31, 2010 and 2009:

The following table presents the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment method as of December 31, 2011 and 2010:

December 31, 2011	Commercial		Commercial Real Estate		Residential		Consumer		Total


Allowance for loan loss
Ending Balance individually evaluated for impairment	$	1,193	$	5,476	$	—	$	—	$	6,669
Ending Balance collectively evaluated for impairment		4,369		25,000		2,972		879		33,220

Total ending allowance balance	$	5,562		30,476	$	2,972	$	879	$	39,889

Loans
Ending Balance individually evaluated for impairment	$	5,144	$	41,149	$	14,522	$	1,116	$	61,931
Ending Balance collectively evaluated for impairment		129,964		723,015		563,390		56,079		1,472,448

Total ending loan balance excludes $5,835 of accrued interest	$	135,108		764,164	$	577,912	$	57,195	$	1,534,379

December 31, 2010	Commercial		Commercial Real Estate		Residential		Consumer		Total


Allowance for loan loss
Ending Balance individually evaluated for impairment	$	1,753	$	8,571	$	—	$	—	$	10,324
Ending Balance collectively evaluated for impairment		4,633		24,082		2,281		1,285		32,281

Total ending allowance balance	$	6,386		32,653	$	2,281	$	1,285	$	42,605

Loans
Ending Balance individually evaluated for impairment	$	8,223		64,048	$	16,801	$	1,504	$	90,576
Ending Balance collectively evaluated for impairment		157,246		785,186		577,793		70,170		1,590,395

Total ending loan balance excludes $6,779 of accrued interest	$	165,469	$	849,234	$	594,594	$	71,674	$	1,680,971

Nonperforming loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2011:

December 31, 2011	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized


With an allowance recorded
Commercial
Commercial and industrial	$	3,130	$	3,057	$	1,193	$	4,174
Agricultural								13
Commercial Real Estate
Farm		486		486		193		473
Hotel		5,385		5,385		100		6,952
Construction and development		5,558		5,476		2,371		7,205
Other		14,400		14,322		2,812		16,460
Residential
1-4 Family
Home Equity
Consumer
Direct
Indirect

Subtotal — impaired with allowance recorded	$	28,959	$	28,726	$	6,669	$	35,277
With no related allowance recorded
Commercial
Commercial and industrial	$	2,720	$	2,030	$	—	$	2,264	$	22	$	22
Agricultural		351		57				90
Commercial Real Estate
Farm		579		531				637
Hotel		876		384				319
Construction and development		2,996		1,839				2,262		1		1
Other		16,325		12,726				12,619		135		135
Residential
1-4 Family		12,344		12,045				11,825		8		8
Home Equity		2,548		2,477				1,974		8		8
Consumer
Direct		1,096		1,083				1,143		9		9
Indirect		35		33				58		5		5

Subtotal — impaired with no allowance recorded	$	39,870	$	33,205	$	—	$	33,191	$	188	$	188

Total impaired loans	$	68,829	$	61,931	$	6,669	$	68,468	$	188	$	188

December 31, 2010	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated


With an allowance recorded
Commercial
Commercial and industrial	$	4,935	$	4,902	$	1,753
Agricultural
Commercial Real Estate
Farm		461		465		71
Hotel		13,178		12,603		1,151
Construction and development		41,924		17,613		3,110
Other		22,580		20,458		4,239
Residential
1-4 Family
Home Equity
Consumer
Direct
Indirect

Subtotal — impaired with allowance recorded	$	83,078	$	56,041	$	10,324
With no related allowance recorded
Commercial
Commercial and industrial	$	3,966	$	3,191	$	—
Agricultural		422		130
Commercial Real Estate
Farm		766		735
Hotel		59		60
Construction and development		1,677		1,390
Other		14,120		10,724
Residential
1-4 Family		15,171		14,889
Home Equity		2,000		1,912
Consumer
Direct		1,431		1,430
Indirect		78		74

Subtotal — impaired with no allowance recorded	$	39,690	$	34,535	$	—

Total impaired loans	$	122,768	$	90,576	$	10,324

The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2011 and 2010:

	Non-accrual				Past due over 90 days and still accruing


December 31,	2011		2010		2011		2010

Commercial
Commercial and industrial	$	2,518	$	4,587	$	—	$	—
Agricultural		57		130
Commercial Real Estate
Farm		1,016		736
Hotel		384		6,534
Construction and development		3,240		19,004
Other		21,060		24,530		3,259		41
Residential
1-4 Family		10,873		10,694				850
Home Equity		2,105		1,686				85
Consumer
Direct		242		261		7		14
Indirect		33		74

Total	$	41,528	$	68,236	$	3,266	$	990

The following table presents the aging of the recorded investment in past due loans as of December 31, 2011 by class of loans:

December 31, 2011	Total Loans		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due


Commercial
Commercial and industrial	$	114,367	$	1,139	$	655	$	1,831	$	3,625	$	110,742
Agricultural		20,741						57		57		20,684
Commercial Real Estate
Farm		46,308				58		905		963		45,345
Hotel		146,358						384		384		145,974
Construction and development		30,746		61				3,179		3,240		27,506
Other		540,752		4,249		3,576		16,529		24,354		516,398
Residential
1-4 Family		365,710		9,327		2,233		7,182		18,742		346,968
Home Equity		212,202		1,417		500		1,491		3,408		208,794
Consumer
Direct		51,157		382		146		129		657		50,500
Indirect		6,038		87		24		16		127		5,911

Total — excludes $5,835 of accrued interest	$	1,534,379	$	16,662	$	7,192	$	31,703	$	55,557	$	1,478,822

December 31, 2010	Total Loans		30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due


Commercial
Commercial and industrial	$	138,291	$	1,202	$	233	$	3,151	$	4,586	$	133,705
Agricultural		27,178						130		130		27,048
Commercial Real Estate
Farm		48,307						528		528		47,779
Hotel		152,416						512		512		151,904
Construction and development		59,319				728		18,276		19,004		40,315
Other		589,192		4,237		2,678		17,646		24,561		564,631
Residential
1-4 Family		380,987		7,101		2,633		8,013		17,747		363,240
Home Equity		213,607		642		261		1,375		2,278		211,329
Consumer
Direct		59,139		508		153		138		799		58,340
Indirect		12,535		114		6		36		156		12,379

Total — excludes $6,779 of accrued interest	$	1,680,971	$	13,804	$	6,692	$	49,805	$	70,301	$	1,610,670

During the year ending December 31, 2011, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk.

Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 60 months to 30 years. Modifications involving an extension of the maturity date were for periods ranging from 6 months to 14 months.

The following table presents loans by class modified as troubled debt restructurings that occurred during the year ending December 31, 2011:

		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment


Commercial
Commercial and industrial	3	$	248	$	248
Commercial Real Estate
Construction and development	3		4,287		4,287
Hotel	1		5,922		5,498
Other	15		8,783		6,619
Residential
1-4 Family	8		632		632
Home Equity	45		855		855
Consumer
Direct	6		47		47

Total	81	$	20,774	$	18,186

The troubled debt restructurings described above increased the allowance for loan losses by $30 and resulted in charge offs of $3,062 during the year ending December 31, 2011.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the year ending December 31, 2011:

		Recorded Investment


Commercial
Commercial and industrial	4	$	926
Commercial real estate:
Farm	2		532
Development	1		150
Other	7		910
Residential
1-4 Family	6		521
Home Equity	5		93

Total	25	$	3,132

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the company's internal underwriting policy.

The Company has allocated $3,013 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2011. The Company has committed to lend additional amounts totaling $0 to customers with outstanding loans that are classified as troubled debt restructurings. At December 31, 2010, the comparable numbers were $2,599 of specific reserves and $517 of commitments.

The terms of certain other loans were modified during year ending December 31, 2011 that did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of December 31, 2011 of $5,429. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

The Company categorizes loans into risk categories based on relevant information about the ability of the borrower 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 commercial and commercial real estate loans individually by classifying the loans as to credit risk. This analysis includes credit relationships with an outstanding balance greater than $1 million on an annual basis. The Company uses the following definitions for risk ratings:

Special Mention — Loans classified as special mention have above average risk that requires management's ongoing attention. The borrower may demonstrated inability to generate profits or to maintain net worth, chronic delinquency and /or a demonstrated lack of willingness or capacity to meet obligations.

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

Non-accrual — Loans classified as non-accrual are loans where the further accrual of interest is stopped because payment in full of principal and interest is not expected. In most cases, the principal and interest has been in default for a period of 90 days or more.

As of December 31, 2011 and 2010, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

December 31, 2011	Pass		Special Mention		Substandard		Non-accrual


Commercial
Commercial and industrial	$	93,380	$	11,935	$	6,534	$	2,518
Agricultural		20,150		524		10		57
Commercial Real Estate
Farm		42,847		2,151		294		1,016
Hotel		77,259		51,900		16,815		384
Construction and development		15,498		3,212		8,796		3,240
Other		422,385		66,377		30,930		21,060

Total	$	671,519	$	136,099	$	63,379	$	28,275

December 31, 2010	Pass		Special Mention		Substandard		Non-accrual


Commercial
Commercial and industrial	$	113,349	$	14,019	$	6,336	$	4,587
Agricultural		25,113		1,766		169		130
Commercial Real Estate
Farm		38,206		7,590		1,775		736
Hotel		86,884		55,666		3,332		6,534
Construction and development		16,083		10,697		13,535		19,004
Other		479,863		45,491		39,308		24,530

Total	$	759,498	$	135,229	$	64,455	$	55,521

Beginning in late 2011, loans not meeting the criteria above that are analyzed individually as part of the above described process are classified by delinquency. These loans are primarily residential mortgage and consumer loans. All consumer loans fully or partially secured by 1-4 residential real estate that are 60-89 days will be classified as Watch. If loans are greater than 90 days past due, they will be classified as Substandard. Consumer loans not secured by 1-4 family residential real estate that are 60-119 days past due will be classified Substandard while loans greater than 119 days will be classified as Loss. As of December 31, 2011, the performing/non performing loans by category of loans is as follows:

For residential and consurmer loans in 2010, performing loans are loans risk graded 1-4 and under performing loans are loans risk graded 5, 6, or 9. As of December 31, 2010, the performing/under performing loans by category of loans is as follows: