NOTE 4: Allowance for Loan Losses

Changes in the allowance for loan losses were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2011			2010			2011			2010
Balance at the beginning of period	$	30,211		$	25,154		$	28,840		$	24,027
Provision charged to operations		4,075			3,719			10,285			10,219
Loans charged off		(2,551	)		(2,699	)		(8,655	)		(9,124	)
Recoveries of loans previously charged off		855			561			2,120			1,613
Balance at the end of period	$	32,590		$	26,735		$	32,590		$	26,735

The following table presents, as of and for the nine months ended September 30, 2011, the total allowance for loan losses, the allowance by impairment methodology (individually evaluated for impairment or collectively evaluated for impairment), the total loans and loans by impairment methodology (individually evaluated for impairment or collectively evaluated for impairment).

(Dollars in thousands)	Real Estate Residential Mortgage			Real Estate Construction		Commercial, Financial and Agricultural			Equity Lines			Consumer			Consumer Finance			Total
Allowance for loan losses:
Balance at beginning of period	$	1,442		$	581	$	8,688		$	380		$	307		$	17,442		$	28,840
Provision charged to operations		1,446			153		2,508			539			139			5,500			10,285
Loans charged off		(648	)		-		(2,541	)		(9	)		(247	)		(5,210	)		(8,655	)
Recoveries of loans previously charged off		90			-		149			-			71			1,810			2,120
Balance at end of period	$	2,330		$	734	$	8,804		$	910		$	270		$	19,542		$	32,590
Ending balance: individually evaluated for impairment	$	618		$	-	$	1,842		$	-		$	49		$	-		$	2,509
Ending balance: collectively evaluated for impairment	$	1,712		$	734	$	6,962		$	910		$	221		$	19,542		$	30,081
Loans:
Ending balance	$	146,617		$	7,122	$	215,964		$	32,576		$	5,487		$	247,745		$	655,511
Ending balance: individually evaluated for impairment	$	3,048		$	-	$	12,653		$	-		$	324		$	-		$	16,025
Ending balance: collectively evaluated for impairment	$	143,569		$	7,122	$	203,311		$	32,576		$	5,163		$	247,745		$	639,486

The following table presents, as of December 31, 2010, the total allowance for loan losses, the allowance by impairment methodology (individually evaluated for impairment or collectively evaluated for impairment), the total loans and loans by impairment methodology (individually evaluated for impairment or collectively evaluated for impairment).

(Dollars in thousands)	Real Estate Residential Mortgage		Real Estate Construction		Commercial, Financial and Agricultural		Equity Lines		Consumer		Consumer Finance		Total
Allowance for loan losses:
Balance at end of period	$	1,442	$	581	$	8,688	$	380	$	307	$	17,442	$	28,840
Ending balance: individually evaluated for impairment	$	466	$	-	$	2,067	$	49	$	51	$	-	$	2,633
Ending balance: collectively evaluated for impairment	$	976	$	581	$	6,621	$	331	$	256	$	17,442	$	26,207
Loans:
Ending balance	$	146,073	$	12,095	$	219,226	$	32,187	$	5,250	$	220,753	$	635,584
Ending balance: individually evaluated for impairment	$	3,110	$	-	$	12,821	$	148	$	338	$	-	$	16,417
Ending balance: collectively evaluated for impairment	$	142,963	$	12,095	$	206,405	$	32,039	$	4,912	$	220,753	$	619,167

Loans by credit quality indicators as of September 30, 2011 were as follows:

(Dollars in thousands)	Pass		Special Mention		Substandard		Substandard Nonaccrual		Total1
Real estate – residential mortgage	$	140,943	$	862	$	3,323	$	1,489	$	146,617
Real estate – construction:
Construction lending		2,215		354		2,871		-		5,440
Consumer lot lending		1,682		-		-		-		1,682
Commercial, financial and agricultural:
Commercial real estate lending		94,651		5,988		11,133		4,500		116,272
Land acquisition and development lending		13,513		10,107		9,312		-		32,932
Builder line lending		11,979		3,304		1,029		2,303		18,615
Commercial business lending		43,034		3,733		1,279		99		48,145
Equity lines		31,383		285		779		129		32,576
Consumer		4,691		11		785		-		5,487
	$	344,091	$	24,644	$	30,511	$	8,520	$	407,766

(Dollars in thousands)		Performing				Non-Performing				Total
Consumer finance		$	247,150			$	595			$	247,745

1 At September 30, 2011, the Corporation did not have any loans classified as Doubtful or Loss.

Loans by credit quality indicators as of December 31, 2010 were as follows:

(Dollars in thousands)	Pass		Special Mention		Substandard		Substandard Nonaccrual		Total1
Real estate – residential mortgage	$	140,651	$	1,344	$	3,889	$	189	$	146,073
Real estate – construction:
Construction lending		6,017		-		4,727		-		10,744
Consumer lot lending		1,351		-		-		-		1,351
Commercial, financial and agricultural:
Commercial real estate lending		93,235		12,002		320		5,760		111,317
Land acquisition and development lending		21,642		3,394		9,278		-		34,314
Builder line lending		13,827		6,112		4,810		67		24,816
Commercial business lending		42,865		4,166		300		1,448		48,779
Equity lines		31,562		263		96		266		32,187
Consumer		4,804		11		400		35		5,250
	$	355,954	$	27,292	$	23,820	$	7,765	$	414,831

(Dollars in thousands)		Performing				Non-Performing				Total
Consumer finance		$	220,602			$	151			$	220,753

1 At December 31, 2010, the Corporation did not have any loans classified as Doubtful or Loss.