Loans

9 Months Ended

Sep. 30, 2012

Loans [Abstract]

LOANS

NOTE J – LOANS

Information relating to loans as of September 30, 2012 and December 31, 2011 is summarized as follows:

(Dollars in thousands)	September 30, 2012		December 31 2011
Construction and land development	$	56,213	$	49,184
Commercial real estate		473,803		508,353
Residential real estate		562,421		546,246
Commercial and financial		58,222		53,105
Consumer		51,564		50,611
Other loans		255		575
Total	$	1,202,478	$	1,208,074

(1) Net loan balances as of September 30, 2012 and December 31, 2011 are net of deferred costs of $1,972,000 and $1,632,000, respectively.

The following table presents the contractual aging of the recorded investment in past due loans by class of loans as of September 30, 2012 and December 31, 2011:

	September 30, 2012
(Dollars in thousands)	Accruing 30-59 Days Past Due		Accruing 60-89 Days Past Due		Accruing Greater Than 90 Days		Nonaccrual		Current		Total Financing Receivables
Construction & land development	$	0	$	0	$	0	$	1,790	$	54,423	$	56,213
Commercial real estate		5		0		0		23,416		450,382		473,803
Residential real estate		3,041		363		0		18,654		540,363		562,421
Commercial and financial		0		0		0		37		58,185		58,222
Consumer		69		5		0		553		50,937		51,564
Other		0		0		0		0		255		255
Total	$	3,115	$	368	$	0	$	44,450	$	1,154,545	$	1,202,478

	December 31, 2011
(Dollars in thousands)	Accruing 30-59 Days Past Due		Accruing 60-89 Days Past Due		Accruing Greater Than 90 Days		Nonaccrual		Current		Total Financing Receivables
Construction & land development	$	6	$	215	$	0	$	2,227	$	46,736	$	49,184
Commercial real estate		836		0		0		13,120		494,397		508,353
Residential real estate		2,979		607		0		12,555		530,105		546,246
Commercial and financial		80		0		0		16		53,009		53,105
Consumer		246		74		0		608		49,683		50,611
Other		0		0		0		0		575		575
Total	$	4,147	$	896	$	0	$	28,526	$	1,174,505	$	1,208,074

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” and these loans are monitored on an ongoing basis. 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 substandard may require a specific allowance, but generally does not exceed 30% of the principal balance. 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 classified as doubtful generally have specific allowances in excess of 30% of the principal balance. 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 and risk grades are reassessed at least annually by the loan relationship manager.  The following table presents the risk category of loans by class of loans based on the most recent analysis performed as of September 30, 2012 and December 31, 2011:

	September 30, 2012
(Dollars in thousands)	Construction & Land Development		Commercial Real Estate		Residential Real Estate		Commercial and Financial		Consumer Loans		Total
Pass	$	49,940	$	372,370	$	523,006	$	57,093	$	50,200	$	1,052,609
Special mention		1,748		34,003		1,125		836		392		38,104
Substandard		0		22,597		9		256		274		23,136
Doubtful		0		0		0		0		0		0
Nonaccrual		1,790		23,416		18,654		37		553		44,450
Troubled debt restructures		2,735		21,417		19,627		0		400		44,179
	$	56,213	$	473,803	$	562,421	$	58,222	$	51,819	$	1,202,478

	December 31, 2011
(Dollars in thousands)	Construction & Land Development		Commercial Real Estate		Residential Real Estate		Commercial and Financial		Consumer Loans		Total
Pass	$	42,899	$	387,161	$	505,316	$	51,375	$	49,299	$	1,036,050
Special mention		802		57,334		5,529		1,445		523		65,633
Substandard		90		5,558		133		168		305		6,254
Doubtful		0		0		0		0		0		0
Nonaccrual		2,227		13,120		12,555		16		608		28,526
Troubled debt restructures		3,166		45,180		22,713		101		451		71,611
	$	49,184	$	508,353	$	546,246	$	53,105	$	51,186	$	1,208,074