XML 61 R12.htm IDEA: XBRL DOCUMENT

Note 4 - Loans

6 Months Ended

Jun. 30, 2014

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

NOTE 4: Loans

Major classifications of loans are summarized as follows:

(Dollars in thousands)	June 30, 2014			December 31, 2013
Real estate – residential mortgage	$	180,514		$	188,455
Real estate – construction ¹		7,580			5,810
Commercial, financial and agricultural ²		295,545			288,593
Equity lines		50,577			50,795
Consumer		8,239			9,007
Consumer finance		283,973			277,724
		826,428			820,384
Less allowance for loan losses		(35,258	)		(34,852	)
Loans, net	$	791,170		$	785,532

1	Includes the Corporation's real estate construction lending and consumer real estate lot lending.

²	Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending.

Consumer loans included $338,000 and $354,000 of demand deposit overdrafts at June 30, 2014 and December 31, 2013, respectively.

The outstanding principal balance and the carrying amount of loans acquired pursuant to the Corporation's acquisition of CVBK (or acquired loans) that were recorded at fair value at the acquisition date and are included in the consolidated balance sheet at June 30, 2014 and December 31, 2013 were as follows:

	June 30, 2014						December 31, 2013
(Dollars in thousands)	Acquired Loans -Purchased Credit Impaired (PCI)		Acquired Loans -Purchased Performing		Acquired Loans - Total		Acquired Loans -Purchased Credit Impaired		Acquired Loans -Purchased Performing		Acquired Loans - Total
Outstanding principal balance	$	42,616	$	98,071	$	140,687	$	49,041	$	110,977	$	160,018
Carrying amount
Real estate – residential mortgage	$	2,078	$	20,135	$	22,213	$	2,694	$	29,285	$	31,979
Real estate – construction¹		401		191		592		771		917		1,688
Commercial, financial and agricultural²		24,619		54,421		79,040		28,602		55,204		83,806
Equity lines		334		16,403		16,737		332		16,909		17,241
Consumer		24		1,438		1,462		121		2,156		2,277
Total acquired loans	$	27,456	$	92,588	$	120,044	$	32,520	$	104,471	$	136,991

1	Includes the Corporation's real estate construction lending and consumer real estate lot lending.

²	Includes the Corporation’s commercial real estate lending, land acquisition and development lending, builder line lending and commercial business lending.

Loans on nonaccrual status were as follows:

(Dollars in thousands)	June 30, 2014		December 31, 2013
Real estate – residential mortgage	$	2,153	$	1,996
Commercial, financial and agricultural:
Commercial real estate lending		1,702		1,486
Land acquisition and development lending		—		—
Builder line lending		—		13
Commercial business lending		374		374
Equity lines		209		291
Consumer		232		231
Consumer finance		646		1,187
Total loans on nonaccrual status	$	5,316	$	5,578

The past due status of loans as of June 30, 2014 was as follows:

(Dollars in thousands)

30-59 Days

Past Due

60-89 Days

Past Due

90+ Days

Past Due

Total Past

Due

Current ¹

Total Loans

90+ Days

Past Due and

Accruing

Real estate – residential mortgage

$

1,038

$

919

$

1,482

$

3,439

$

177,075

$

180,514

$

72

Real estate – construction:

Construction lending

—

4,408

—

Consumer lot lending

—

3,172

—

Commercial, financial and agricultural:

Commercial real estate lending

904

103

942

1,949

184,268

186,217

178

Land acquisition and development lending

—

2,936

30,710

33,646

—

Builder line lending

—

18,132

—

Commercial business lending

364

11

342

717

56,833

57,550

—

Equity lines

349

17

35

401

50,176

50,577

—

Consumer

35

32

194

261

7,978

8,239

—

Consumer finance

9,670

2,491

646

12,807

271,166

283,973

—

Total

$

12,360

$

3,573

$

6,577

$

22,510

$

803,918

$

826,428

$

250

¹ For the purposes of the above table, “Current” includes loans that are 1-29 days past due.

The table above includes the following:

•

nonaccrual loans that are current of $2.56 million, 30-59 days past due of $90,000, 60-89 days past due of $92,000 and 90+ days past due of $2.57 million and

•

loans purchased (both performing and PCI) in the acquisition of CVBK that are current of $114.69 million, 30-59 days past due of $1.39 million, 60-89 days past due of $161,000 and 90+ days past due of $3.80 million.

The past due status of loans as of December 31, 2013 was as follows:

(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current¹		Total Loans		90+ Days Past Due and Accruing
Real estate – residential mortgage	$	1,547	$	952	$	1,547	$	4,046	$	184,409	$	188,455	$	—
Real estate – construction:
Construction lending		—		—		—		—		3,728		3,728		—
Consumer lot lending		—		—		—		—		2,082		2,082		—
Commercial, financial and agricultural:
Commercial real estate lending		5,567		228		72		5,867		162,255		168,122		72
Land acquisition and development lending		—		—		272		272		25,368		25,640		—
Builder line lending		—		—		—		—		13,426		13,426		—
Commercial business lending		306		368		2,033		2,707		78,698		81,405		—
Equity lines		264		45		173		482		50,313		50,795		—
Consumer		54		46		195		295		8,712		9,007		3
Consumer finance		14,174		2,998		1,187		18,359		259,365		277,724		—
Total	$	21,912	$	4,637	$	5,479	$	32,028	$	788,356	$	820,384	$	75

¹For the purposes of the table above, “Current” includes loans that are 1-29 days past due.

The table above includes the following:

•

nonaccrual loans that are current of $2.15 million, 30-59 days past due of $7,000, 60-89 days past due of $306,000 and 90+ days past due of $3.11 million and

•

loans purchased (both performing and PCI) in the acquisition of CVBK that are current of $131.82 million, 30-59 days past due of $1.35 million, 60-89 days past due of $841,000 and 90+ days past due of $2.98 million of which $3,000 are 90+ days past due and accruing.

Loan modifications that were classified as TDRs during the three and six months ended June 30, 2014 and 2013 were as follows:

	Three Months Ended June 30,
	2014				2013
(Dollars in thousands)	Number of Loans		Post-Modification Recorded Investment		Number of Loans		Post-Modification Recorded Investment
Real estate - residential mortgage - interest rate concession		1	$	328		1	$	89
Commercial, financial and agricultural:
Commercial real estate lending - interest rate concession		—		—		1		473
Builder line lending - interest rate concession		—		—		1		17
Total		1	$	328		3	$	579

	Six Months Ended June 30,
	2014				2013
(Dollars in thousands)	Number of Loans		Post-Modification Recorded Investment		Number of Loans		Post-Modification Recorded Investment
Real estate - residential mortgage - interest rate concession		1	$	328		1	$	89
Commercial, financial and agricultural:
Commercial real estate lending - interest rate concession		—		—		2		479
Builder line lending - interest rate concession		—		—		1		17
Total		1	$	328		4	$	585

A TDR payment default occurs when, within 12 months of the original TDR modification, either a full or partial charge-off occurs or a TDR becomes 90 days or more past due. There were no TDR defaults during the three and six months ended June 30, 2014. There was one $3,000 commercial real estate loan that defaulted during the six months ended June 30, 2013.

Impaired loans, which consisted solely of TDRs, and the related allowance at June 30, 2014 were as follows:

(Dollars in thousands)	Recorded Investment in Loans		Unpaid Principal Balance		Related Allowance		Average Balance-Impaired Loans		Interest Income Recognized
Real estate – residential mortgage	$	2,348	$	2,460	$	430	$	2,374	$	57
Commercial, financial and agricultural:
Commercial real estate lending		2,711		2,851		416		2,776		65
Builder line lending		—		—		—		—		—
Commercial business lending		489		489		129		492		5
Equity lines		30		32		1		32		—
Consumer		93		93		14		93		2
Total	$	5,671	$	5,925	$	990	$	5,767	$	129

Impaired loans, which included TDR loans of $5.62 million, and the related allowance at December 31, 2013 were as follows:

(Dollars in thousands)	Recorded Investment in Loans		Unpaid Principal Balance		Related Allowance		Average Balance-Impaired Loans		Interest Income Recognized
Real estate – residential mortgage	$	2,601	$	2,694	$	390	$	2,090	$	99
Commercial, financial and agricultural:
Commercial real estate lending		2,729		2,780		504		2,748		99
Builder line lending		13		16		4		14		1
Commercial business lending		695		756		131		562		11
Equity lines		131		132		—		33		—
Consumer		93		93		14		95		9
Total	$	6,262	$	6,471	$	1,043	$	5,542	$	219

PCI loans had an unpaid principal balance of $42.62 million and a carrying value of $27.46 million at June 30, 2014. Determining the fair value of purchased credit impaired loans required the Corporation to estimate cash flows expected to result from those loans and to discount those cash flows at appropriate rates of interest. For such loans, the excess of the cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans and is called the accretable yield. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the effect of estimated credit losses and is called the nonaccretable difference. In accordance with GAAP, there was no carry-over of previously established allowance for loan losses from acquired loans.

The PCI loan portfolio related to the CVBK acquisition was accounted for at fair value on the date of acquisition as follows:

(Dollars in thousands)	October 1, 2013
Contractual principal and interest due	$	70,390
Nonaccretable difference		(26,621	)
Expected cash flows		43,769
Accretable yield		(8,454	)
Purchase credit impaired loans - estimated fair value	$	35,315

The following table presents a summary of the change in the accretable yield of the PCI loan portfolio for the period from December 31, 2013 to June 30, 2014:

(Dollars in thousands)	Accretable Yield
Accretable yield, December 31, 2013	$	7,776
Accretion		(1,529	)
Reclassification of nonaccretable difference due to improvement in expected cash flows		1,820
Changes in expected cash flows ¹		7,056
Accretable yield, June 30, 2014	$	15,123

¹ Represents changes in cash flows expected to be collected due to the effects of changes in recovery approach and

prepayment assumptions.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References+ Details