NOTE L — LOANS

The following table presents the contractual aging of the recorded investment in past due loans by class of loans as of June 30, 2011:


					Accruing
	Accruing		Accruing		Greater						Total
	30-59 Days		60-89 Days		Than						Financing
(Dollars in thousands)	Past Due		Past Due		90 Days		Nonaccrual		Current		Receivables

Construction and land development	$	77	$	327	$	—	$	2,543	$	46,246	$	49,193
Commercial real estate		646		—		—		29,322		486,967		516,935
Residential real estate		3,041		531		—		13,677		505,813		523,062
Commerical and financial		30		—		—		—		47,982		48,012
Consumer		579		16		—		623		50,133		51,351
Other		—		—		—		—		392		392

Total	$	4,373	$	874	$	—	$	46,165	$	1,137,533	$	1,188,945

The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans. Under the Company’s risk rating system, the Company classifies problem and potential problem loans as “Special Mention,” “Substandard,” and “Doubtful”. Substandard loans include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful, have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories, but possess weaknesses that deserve management’s close attention are deemed to be Special Mention. Risk ratings are updated any time the situation warrants.

Loans not meeting the criteria above are considered to be pass-rated loans. The following table presents the risk category of loans by class of loans based on the most recent analysis performed as of June 30, 2011:


	Construction						Commercial
	& Land		Commercial		Residential		and		Consumer
(Dollars in thousands)	Development		Real Estate		Real Estate		Financial		Loans		Total
Pass	$	42,843	$	403,138	$	481,707	$	46,029	$	49,393	$	1,023,110
Special mention		574		43,804		6,121		1,622		1,005		53,126
Substandard		38		5,748		16		250		254		6,306
Doubtful		—		—		—		—		—		—
Nonaccrual		2,543		29,322		13,677		—		623		46,165
Troubled debt restructures		3,195		34,923		21,541		111		468		60,238

	$	49,193	$	516,935	$	523,062	$	48,012	$	51,743	$	1,188,945