Loans and Allowance for Loan Losses

3 Months Ended

Sep. 30, 2011

Loans and Allowance for Loan Losses [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 8: LOANS AND ALLOWANCE FOR LOAN LOSSES

	September 30,	December 31,
	2011	2010
	(In Thousands)
One- to four-family residential construction	$25,927	$29,102
Subdivision construction	67,079	86,649
Land development	73,167	95,573
Commercial construction	123,058	68,018
Owner occupied one- to four-family residential	93,418	98,099
Non-owner occupied one- to four-family residential	143,399	136,984
Commercial real estate	597,897	530,277
Other residential	244,970	210,846
Commercial business	223,736	185,865
Industrial revenue bonds	61,055	64,641
Consumer auto	57,940	48,992
Consumer other	75,595	77,331
Home equity lines of credit	45,732	46,852
FDIC-supported loans, net of discounts (TeamBank)	132,920	144,633
FDIC-supported loans, net of discounts (Vantus Bank)	134,111	160,163
	2,100,004	1,984,025
Undisbursed portion of loans in process	(98,112)	(63,108)
Allowance for loan losses	(40,466)	(41,487)
Deferred loan fees and gains, net	(2,554)	(2,543)
	$1,958,872	$1,876,887
Weighted average interest rate	5.84%	6.03%

Classes of loans by aging were as follows:

	September 30, 2011
							Total Loans
	30-59 Days	60-89 Days	Over 90	Total Past		Total Loans	> 90 Days and
	Past Due	Past Due	Days	Due	Current	Receivable	Still Accruing
	(In Thousands)
One- to four-family
residential construction	$—	$—	$1,879	$1,879	$24,048	$25,927	$—
Subdivision construction	197	445	5,063	5,705	61,374	67,079	—
Land development	2,629	—	429	3,058	70,109	73,167	—
Commercial construction	—	—	—	—	123,058	123,058	—
Owner occupied one- to four-
family residential	334	712	3,817	4,863	88,555	93,418	138
Non-owner occupied one- to
four-family residential	3,033	573	3,271	6,877	136,522	143,399	75
Commercial real estate	2,148	—	7,474	9,622	588,275	597,897	—
Other residential	211	—	3,245	3,456	241,514	244,970	—
Commercial business	260	587	1,700	2,547	221,189	223,736	8
Industrial revenue bonds	—	—	2,110	2,110	58,945	61,055	—
Consumer auto	233	24	88	345	57,595	57,940	14
Consumer other	1,336	304	589	2,229	73,366	75,595	225
Home equity lines of credit	23	20	222	265	45,467	45,732	—
FDIC-supported loans, net of
discounts (TeamBank)	1,419	5,964	22,961	30,344	102,576	132,920	—
FDIC-supported loans, net of
discounts (Vantus Bank)	840	368	7,770	8,978	125,133	134,111	14
	12,663	8,997	60,618	82,278	2,017,726	2,100,004	474
Less FDIC-supported loans,
net of discounts	2,259	6,332	30,731	39,322	227,709	267,031	14
Total	$10,404	$2,665	$29,887	$42,956	$1,790,017	$1,832,973	$460

	December 31, 2010
							Total Loans
	30-59 Days	60-89 Days	Over 90	Total Past		Total Loans	> 90 Days and
	Past Due	Past Due	Days	Due	Current	Receivable	Still Accruing
	(In Thousands)
One- to four-family
residential construction	$261	$—	$578	$839	$28,263	$29,102	$—
Subdivision construction	281	1,015	1,860	3,156	83,493	86,649	—
Land development	2,730	—	5,668	8,398	42,616	51,014	—
Commercial construction	—	—	—	—	112,577	112,577	—
Owner occupied one- to four-
family residential	4,856	914	2,724	8,494	89,605	98,099	—
Non-owner occupied one- to
four-family residential	2,085	2,130	2,831	7,046	129,938	136,984	—
Commercial real estate	2,749	8,546	6,074	17,369	512,908	530,277	—
Other residential	—	4,011	4,202	8,213	202,633	210,846	—
Commercial business	350	355	1,642	2,347	183,518	185,865	—
Industrial revenue bonds	—	—	2,190	2,190	62,451	64,641	—
Consumer auto	427	35	94	556	48,436	48,992	22
Consumer other	1,331	318	1,417	3,066	74,265	77,331	565
Home equity lines of credit	152	160	140	452	46,400	46,852	—
FDIC-supported loans, net of
discounts (TeamBank)	2,719	3,731	13,285	19,735	124,898	144,633	—
FDIC-supported loans, net of
discounts (Vantus Bank)	2,277	1,414	9,399	13,090	147,073	160,163	—
	20,218	22,629	52,104	94,951	1,889,074	1,984,025	$587
Less FDIC-supported loans,
net of discounts	4,996	5,145	22,684	32,825	271,971	304,796
Total	$15,222	$17,484	$29,420	$62,126	$1,617,103	$1,679,229

Nonaccruing loans (excluding FDIC-supported loans, net of discount) are summarized as follows:

	September 30,	December 31,
	2011	2010
	(In Thousands)
One- to four-family residential construction	$1,879	$578
Subdivision construction	5,063	1,860
Land development	429	5,668
Commercial construction	—	—
Owner occupied one- to four-family residential	3,680	2,724
Non-owner occupied one- to four-family residential	3,196	2,831
Commercial real estate	7,474	6,074
Other residential	3,245	4,202
Commercial business	1,692	1,642
Industrial revenue bonds	2,110	2,190
Consumer auto	74	72
Consumer other	364	852
Home equity lines of credit	222	140
Total	$29,428	$28,833

The following table presents the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2011.  Also presented are the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of September 30, 2011:

	One- to Four-
	Family
	Residential and	Other	Commercial	Commercial	Commercial
	Construction	Residential	Real Estate	Construction	Business	Consumer	Total
	(In Thousands)
Allowance for loan losses
Balance July 1, 2011	$11,562	$3,629	$15,003	$5,155	$2,324	$2,814	$40,487
Provision charged to expense	(784)	533	7,709	(3)	1,050	(5)	8,500
Losses charged off	(836)	(23)	(5,104)	(2,107)	(506)	(966)	(9,542)
Recoveries	7	1	17	395	153	448	1,021
Balance September 30, 2011	$9,949	$4,140	$17,625	$3,440	$3,021	$2,291	$40,466
Balance January 1, 2011	$11,483	$3,866	$14,336	$5,852	$3,281	$2,669	$41,487
Provision charged to expense	2,892	3,183	13,595	3,475	1,058	928	25,131
Losses charged off	(4,462)	(2,911)	(10,374)	(6,291)	(2,222)	(2,773)	(29,033)
Recoveries	36	2	68	404	904	1,467	2,881
Balance September 30, 2011	$9,949	$4,140	$17,625	$3,440	$3,021	$2,291	$40,466
Ending balance:
Individually evaluated for
impairment	$3,111	$66	$3,717	$985	$451	$38	$8,368
Collectively evaluated for
impairment	$6,838	$4,074	$13,909	$2,425	$2,570	$2,252	$32,068
Loans acquired and
accounted for under ASC 310-30	$—	$—	$—	$30	$—	$—	$30
Loans
Individually evaluated for
impairment	$42,858	$24,512	$85,700	$26,938	$7,872	$681	$188,561
Collectively evaluated for
impairment	$286,965	$220,458	$573,252	$169,287	$215,864	$178,586	$1,644,412
Loans acquired and
accounted for under ASC 310-30	$61,365	$23,464	$118,515	$18,045	$13,810	$31,832	$267,031

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

	One- to Four-
	Family
	Residential and	Other	Commercial	Commercial	Commercial
	Construction	Residential	Real Estate	Construction	Business	Consumer	Total
	(In Thousands)
Allowance for loan losses
Individually evaluated for
impairment	$4,353	$1,714	$3,089	$2,083	$784	$37	$12,060
Collectively evaluated for
impairment	$7,100	$2,152	$11,247	$3,769	$1,697	$2,632	$28,597
Loans acquired and
accounted for under ASC 310-30	$—	$—	$—	$30	$800	$—	$830
Loans
Individually evaluated for
impairment	$40,562	$25,246	$72,379	$45,334	$8,340	$622	$192,483
Collectively evaluated for
impairment	$310,272	$185,600	$522,539	$118,257	$177,525	$172,553	$1,486,746
Loans acquired and
accounted for under ASC 310-30	$75,727	$23,277	$128,704	$22,858	$15,215	$39,015	$304,796

The portfolio segments used in the preceding two tables correspond to the loan classes used in all other tables in Note 8 as follows:

·The one-to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes

·The other residential and construction segment corresponds to the other residential class

·The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes

·The commercial construction segment includes the land development and commercial construction classes

·The commercial business segment corresponds to the commercial business class

·The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes

  Impaired loans are summarized as follows:

	September 30, 2011
		Unpaid
	Recorded	Principal	Specific
	Balance	Balance	Allowance
	(In Thousands)
One- to four-family residential construction	$2,708	$4,138	$358
Subdivision construction	12,159	16,992	1,016
Land development	6,436	6,489	985
Commercial construction	—	—	—
Owner occupied one- to four-family residential	5,202	5,793	792
Non-owner occupied one- to four-family residential	8,752	8,987	945
Commercial real estate	52,567	53,533	3,695
Other residential	8,286	9,259	66
Commercial business	2,917	4,395	451
Industrial revenue bonds	2,110	2,190	22
Consumer auto	117	134	3
Consumer other	432	536	23
Home equity lines of credit	197	208	12
Total	$101,883	$112,654	$8,368

	Three Months Ended		Nine Months Ended
	September 30, 2011		September 30, 2011
	Average		Average
	Investment	Interest	Investment	Interest
	in Impaired	Income	in Impaired	Income
	Loans	Recognized	Loans	Recognized
	(In Thousands)
One- to four-family residential construction	$2,334	$16	$2,033	$34
Subdivision construction	11,260	97	9,692	212
Land development	7,034	68	10,846	301
Commercial construction	—	—	411	—
Owner occupied one- to four-family residential	4,399	21	4,512	55
Non-owner occupied one- to four-family residential	8,603	84	9,497	285
Commercial real estate	34,181	659	28,915	1,120
Other residential	8,288	53	10,118	244
Commercial business	2,560	18	4,363	80
Industrial revenue bonds	2,110	—	2,145	—
Consumer auto	116	1	213	5
Consumer other	473	1	544	8
Home equity lines of credit	184	—	239	1
Total	$81,542	$1,018	$83,528	$2,345

				Year Ended
	December 31, 2010			December 31, 2010
				Average
		Unpaid		Investment	Interest
	Recorded	Principal	Specific	in Impaired	Income
	Balance	Balance	Allowance	Loans	Recognized
	(In Thousands)
One- to four-family residential construction	$1,947	$2,371	$258	$1,724	$83
Subdivision construction	9,894	10,560	2,326	7,850	415
Land development	17,957	21,006	1,925	18,760	534
Commercial construction	1,851	1,851	158	458	31
Owner occupied one- to four-family
residential	5,205	5,620	542	3,612	69
Non-owner occupied one- to four-family
residential	11,785	12,267	1,227	8,182	386
Commercial real estate	25,782	26,392	3,045	10,615	603
Other residential	9,768	9,869	1,714	8,123	140
Commercial business	9,722	12,495	828	2,630	114
Consumer auto	125	137	4	30	1
Consumer other	429	481	14	93	4
Home equity lines of credit	148	166	19	109	1
Total	$94,613	$103,215	$12,060	$62,186	$2,381

At September 30, 2011 and December 31, 2010, all impaired loans had specific valuation allowances.

Included in certain loan categories in the impaired loans are troubled debt restructurings that were classified as impaired. Troubled debt restructurings are loans that are modified by granting concessions to borrowers experiencing financial difficulties.  These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.  The types of concessions made are factored into the estimation of the allowance for loan losses for troubled debt restructurings primarily using a discounted cash flows or collateral adequacy approach.

At September 30, 2011, the Company had $10.7 million of construction loans, $8.3 million of residential mortgage loans, $28.9 million of commercial real estate loans, $672,000 of commercial business loans and $175,000 of consumer loans that were modified in troubled debt restructurings and impaired.  Of the total troubled debt restructurings, $47.0 million were accruing interest at September 30, 2011.  During the previous 12 months, one construction loan totaling $324,000 and one commercial business loan totaling $423,000 were modified as troubled debt restructurings and had payment defaults subsequent to the modifications.  When loans modified as troubled debt restructuring have subsequent payment defaults, the defaults are factored in to the determination of the allowance for loan losses to ensure specific valuation allowances reflect amounts considered uncollectible. At December 31, 2010, the Company had $6.5 million of construction loans, $5.5 million of residential mortgage loans, $8.2 million of commercial real estate loans, $57,000 of other commercial loans and $150,000 of consumer loans that were modified in troubled debt restructurings and impaired.  Of the total troubled debt restructurings, $16.5 million were accruing interest at December 31, 2010. 

The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” Special Mention” and “Substandard.”  Substandard loans are characterized by the distinct possibility that the Bank will sustain some loss if certain deficiencies are not corrected.  Special mention loans possess potential weaknesses that deserve management’s close attention but do not expose the Bank to a degree of risk that warrants substandard classification.  Loans classified as watch are being monitored because of indications of potential weaknesses or deficiencies that may require future classification as special mention or substandard.  Loans not meeting any of the criteria previously described are considered satisfactory.  The FDIC-covered loans are evaluated using this internal grading system.  However, since these loans are accounted for in pools and are currently substantially covered through loss sharing agreements with the FDIC, all of the loan pools were considered satisfactory at September 30, 2011 and December 31, 2010, respectively.  See Note 9 for further discussion of the acquired loan pools and loss sharing agreements.  The loan grading system is presented by loan class below:

	September 30, 2011
			Special
	Satisfactory	Watch	Mention	Substandard	Total
	(In Thousands)
One- to four-family residential
construction	$21,284	$2,622	$—	$2,021	$25,927
Subdivision construction	48,279	6,956	—	11,844	67,079
Land development	51,204	16,231	—	5,732	73,167
Commercial construction	118,084	4,974	—	—	123,058
Owner occupied one- to four-family
residential	88,790	520	—	4,108	93,418
Non-owner occupied one- to four-family
residential	128,612	7,505	—	7,282	143,399
Commercial real estate	514,307	50,032	—	33,558	597,897
Other residential	220,458	21,268	—	3,244	244,970
Commercial business	215,864	4,955	—	2,917	223,736
Industrial revenue bonds	58,945	—	—	2,110	61,055
Consumer auto	57,844	—	—	96	57,940
Consumer other	75,207	—	—	388	75,595
Home equity lines of credit	45,535	—	—	197	45,732
FDIC-supported loans, net of discounts
(TeamBank)	132,920	—	—	—	132,920
FDIC-supported loans, net of discounts
(Vantus Bank)	134,111	—	—	—	134,111
Total	$1,911,444	$115,063	$—	$73,497	$2,100,004

	December 31, 2010
			Special
	Satisfactory	Watch	Mention	Substandard	Total
	(In Thousands)
One- to four-family residential
construction	$27,620	$549	$—	$933	$29,102
Subdivision construction	69,907	8,408	—	8,334	86,649
Land development	57,486	20,834	—	17,253	95,573
Commercial construction	60,770	5,397	—	1,851	68,018
Owner occupied one- to four-family
residential	92,385	766	—	4,948	98,099
Non-owner occupied one- to four-family
residential	120,360	6,471	—	10,153	136,984
Commercial real estate	460,088	46,805	2,574	20,810	530,277
Other residential	185,600	15,478	—	9,768	210,846
Commercial business	177,525	812	—	7,528	185,865
Industrial revenue bonds	62,451	—	—	2,190	64,641
Consumer auto	48,883	—	—	109	48,992
Consumer other	76,966	—	—	365	77,331
Home equity lines of credit	46,704	—	—	148	46,852
FDIC-supported loans, net of discounts
(TeamBank)	144,633	—	—	—	144,633
FDIC-supported loans, net of discounts
(Vantus Bank)	160,163	—	—	—	160,163
Total	$1,791,541	$105,520	$2,574	$84,390	$1,984,025