Loans

6 Months Ended

Jun. 30, 2013

Loans [Abstract]

LOANS

NOTE E — LOANS

Information relating to loans is summarized as follows:

	June 30,		December 31
(Dollars in thousands)	2013		2012
Construction and land development	$	61,116	$	60,736
Commercial real estate		513,598		486,828
Residential real estate		581,378		569,331
Commercial and financial		65,224		61,903
Consumer		44,296		46,930
Other loans		281		353
NET LOAN BALANCES(1)	$	1,265,893	$	1,226,081

(1) Net loan balances as of June 30, 2013 and December 31, 2012 are net of deferred costs of $1,972,000 and $1,530,000, respectively.

The following table presents the contractual aging of the recorded investment in past due loans by class of loans as of June 30, 2013 and December 31, 2012:

June 30, 2013

(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	$	1,533	$	59,583	$	61,116
Commercial real estate		438		3		0		10,926		502,231		513,598
Residential real estate		1,734		380		0		20,552		558,712		581,378
Commercial and financial		614		0		0		0		64,610		65,224
Consumer		22		33		0		255		43,986		44,296
Other		0		0		0		0		281		281
Total	$	2,808	$	416	$	0	$	33,266	$	1,229,403	$	1,265,893
December 31, 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	$	7	$	0	$	0	$	1,342	$	59,387	$	60,736
Commercial real estate		832		5		0		17,234		468,757		486,828
Residential real estate		1,179		1,377		1		22,099		544,675		569,331
Commercial and financial		41		0		0		0		61,862		61,903
Consumer		109		0		0		280		46,541		46,930
Other		0		0		0		0		353		353
Total	$	2,168	$	1,382	$	1	$	40,955	$	1,181,575	$	1,226,081

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. The principal balance of loans classified as doubtful are generally charged off. 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 recalculated at least annually by the loan relationship manager.  The following tables present the risk category of loans by class of loans based on the most recent analysis performed as of June 30, 2013 and December 31, 2012:

June 30, 2013

(Dollars in thousands)	Construction & Land Development		Commercial Real Estate		Residential Real Estate		Commercial and Financial		Consumer Loans		Total
Pass	$	56,037	$	464,031	$	542,189	$	63,854	$	43,110	$	1,169,221
Special mention		1,231		18,337		699		1,297		250		21,814
Substandard		0		10,075		1,327		73		505		11,980
Doubtful		0		0		0		0		0		0
Nonaccrual		1,533		10,926		20,552		0		255		33,266
Pass-Troubled debt restructures		1,838		7,415		0		0		0		9,253
Troubled debt restructures		477		2,814		16,611		0		457		20,359
	$	61,116	$	513,598	$	581,378	$	65,224	$	44,577	$	1,265,893

December 31, 2012
(Dollars in thousands)	Construction & Land Development		Commercial Real Estate		Residential Real Estate		Commercial and Financial		Consumer Loans		Total
Pass	$	54,994	$	414,023	$	527,891	$	61,123	$	45,907	$	1,103,938
Special mention		1,717		12,137		1,686		587		450		16,577
Substandard		0		22,180		36		193		256		22,665
Doubtful		0		0		0		0		0		0
Nonaccrual		1,342		17,234		22,099		0		280		40,955
Pass-Troubled debt restructures		2,103		6,513		0		0		0		8,616
Troubled debt restructures		580		14,741		17,619		0		390		33,330
	$	60,736	$	486,828	$	569,331	$	61,903	$	47,283	$	1,226,081