NOTE 4: Allowance for Loan Losses

Changes in the allowance for loan losses were as follows:

	Year Ended December 31,
(Dollars in thousands)	2011			2010			2009
Balance at the beginning of year	$	28,840		$	24,027		$	19,806
Provision charged to operations		14,160			14,959			18,563
Loans charged off		(12,177	)		(12,330	)		(16,177	)
Recoveries of loans previously charged off		2,854			2,184			1,835
Balance at the end of year	$	33,677		$	28,840		$	24,027

The following table presents, as of December 31, 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 & Agricultural			Equity Lines			Consumer			Consumer Finance			Total
Allowance for loan losses:
Balance at the beginning of year	$	1,442		$	581		$	8,688		$	380		$	307		$	17,442		$	28,840
Provision charged to operations		1,935			(101	)		3,745			572			209			7,800			14,160
Loans charged off		(1,096	)		-			(2,566	)		(52	)		(319	)		(8,144	)		(12,177	)
Recoveries of loans previously charged off		98			-			173			12			122			2,449			2,854
Ending balance	$	2,379		$	480		$	10,040		$	912		$	319		$	19,547		$	33,677
Ending balance: individually evaluated for impairment	$	657		$	-		$	3,274		$	-		$	49		$	-		$	3,980
Ending balance: collectively evaluated for impairment	$	1,722		$	480		$	6,766		$	912		$	270		$	19,547		$	29,697
Loans:
Ending balance	$	147,135		$	5,737		$	212,235		$	33,192		$	6,057		$	246,305		$	650,661
Ending balance: individually evaluated for impairment	$	3,482		$	-		$	14,288		$	-		$	324		$	-		$	18,094
Ending balance: collectively evaluated for impairment	$	143,653		$	5,737		$	197,947		$	33,192		$	5,733		$	246,305		$	632,567

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 & 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 December 31, 2011 were as follows:

(Dollars in thousands)	Pass		Special Mention		Substandard		Substandard Nonaccrual		Total1
Real estate – residential mortgage	$	140,304	$	1,261	$	3,130	$	2,440	$	147,135
Real estate – construction:
Construction lending		2,214		-		2,870		-		5,084
Consumer lot lending		653		-		-		-		653
Commercial, financial and agricultural:
Commercial real estate lending		96,773		5,413		9,493		5,093		116,772
Land acquisition & development lending		13,605		9,939		9,101		-		32,645
Builder line lending		12,480		1,434		1,420		2,303		17,637
Commercial business lending		41,590		2,001		917		673		45,181
Equity lines		31,935		298		836		123		33,192
Consumer		5,271		10		776		-		6,057
	$	344,825	$	20,356	$	28,543	$	10,632	$	404,356

(Dollars in thousands)		Performing				Non-Performing				Total
Consumer finance		$	245,924			$	381			$	246,305

_____________

1 At December 31, 2011, the Corporation does 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 & 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.