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Loans | 12 Months Ended
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Dec. 31, 2010
Loans [Abstract] |
Loans | 5. LOANS The composition of the loan portfolio is as follows:
December 31 (In thousands) |  | 2010 |  |  | 2009 |
Commercial, financial and agricultural |  | $ | 737,902 |  |  | $ | 751,277 |
Real estate: |  |  |  |  |  |  |  |
Commercial |  |  | 1,226,616 |  |  |  | 1,130,672 |
Construction |  |  | 406,480 |  |  |  | 495,518 |
Residential |  |  | 1,692,209 |  |  |  | 1,555,390 |
Consumer |  |  | 666,871 |  |  |  | 704,430 |
Leases |  |  | 2,607 |  |  |  | 3,145 |
Total loans |  | $ | 4,732,685 |  |  | $ | 4,640,432 |
The composition of the loan portfolio, by class of loan, as of December 31, 2010 is as follows:
|  |  |  |  | Accrued |  |  |  |
|  | Loan |  |  | Interest |  |  | Recorded |
(In thousands) |  | Balance |  |  | Receivable |  |  | Investment |
Commercial, financial and agricultural* |  | $ | 737,902 |  |  | $ | 2,886 |  |  | $ | 740,788 |
Commercial real estate* |  |  | 1,226,616 |  |  |  | 4,804 |  |  |  | 1,231,420 |
Construction real estate: |  |  |  |  |  |  |  |  |  |  |  |
Vision commercial land and development |  |  | 171,334 |  |  |  | 282 |  |  |  | 171,616 |
Remaining commercial |  |  | 195,693 |  |  |  | 622 |  |  |  | 196,315 |
Mortgage |  |  | 26,326 |  |  |  | 95 |  |  |  | 26,421 |
Installment |  |  | 13,127 |  |  |  | 54 |  |  |  | 13,181 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 464,903 |  |  |  | 1,403 |  |  |  | 466,306 |
Mortgage |  |  | 906,648 |  |  |  | 2,789 |  |  |  | 909,437 |
HELOC |  |  | 260,463 |  |  |  | 1,014 |  |  |  | 261,477 |
Installment |  |  | 60,195 |  |  |  | 255 |  |  |  | 60,450 |
Consumer |  |  | 666,871 |  |  |  | 3,245 |  |  |  | 670,116 |
Leases |  |  | 2,607 |  |  |  | 56 |  |  |  | 2,663 |
Total loans |  | $ | 4,732,685 |  |  | $ | 17,505 |  |  | $ | 4,750,190 |
* | Included within commercial, financial and agricultural loans and commercial real estate loans are an immaterial amount of consumer loans that are not broken out by class.
Loans are shown net of deferred origination fees, costs and unearned income of $6.7 million at December 31, 2010 and $6.3 million at December 31, 2009. Overdrawn deposit accounts of $2.6 million and $3.3 million have been reclassified to loans at December 31, 2010 and 2009, respectively. Nonperforming loans are summarized as follows at December 31, 2009:
December 31 (In thousands) |  | 2009 |
Impaired loans: |  |  |
Nonaccrual |  | $ | 201,001 |
Restructured (accruing) |  |  | 142 |
Total impaired loans |  |  | 201,143 |
Other nonaccrual loans |  |  | 32,543 |
Total nonaccrual and restructured loans |  | $ | 233,686 |
Loans past due 90 days or more and accruing |  |  | 14,773 |
Total nonperforming loans |  | $ | 248,459 |
The following table presents the recorded investment in nonaccrual, restructured, and loans past due 90 days or more and still accruing by class of loans as of December 31, 2010:
|  |  |  |  | Loans Past Due |
|  |  |  |  | Accruing |  |  | 90 Days |  |  | Total |
|  | Nonaccrual |  |  | Restructured |  |  | or More |  |  | Nonperforming |
(In thousands) |  | Loans |  |  | Loans |  |  | and Accruing |  |  | Loans |
Commercial, financial and agricultural |  | $ | 19,276 |  |  | $ | — |  |  | $ | — |  |  | $ | 19,276 |
Commercial real estate |  |  | 57,941 |  |  |  | — |  |  |  | 20 |  |  |  | 57,961 |
Construction real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Vision commercial land and development |  |  | 87,424 |  |  |  | — |  |  |  | — |  |  |  | 87,424 |
Remaining commercial |  |  | 27,080 |  |  |  | — |  |  |  | — |  |  |  | 27,080 |
Mortgage |  |  | 354 |  |  |  | — |  |  |  | — |  |  |  | 354 |
Installment |  |  | 417 |  |  |  | — |  |  |  | 13 |  |  |  | 430 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 60,227 |  |  |  | — |  |  |  | — |  |  |  | 60,227 |
Mortgage |  |  | 32,479 |  |  |  | — |  |  |  | 2,175 |  |  |  | 34,654 |
HELOC |  |  | 964 |  |  |  | — |  |  |  | 149 |  |  |  | 1,113 |
Installment |  |  | 1,195 |  |  |  | — |  |  |  | 277 |  |  |  | 1,472 |
Consumer |  |  | 1,911 |  |  |  | — |  |  |  | 1,059 |  |  |  | 2,970 |
Leases |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total loans |  | $ | 289,268 |  |  | $ | — |  |  | $ | 3,693 |  |  | $ | 292,961 |
The following table provides additional information regarding those nonaccrual loans that are individually evaluated for impairment and those collectively evaluated for impairment at December 31, 2010.
|  |  |  |  | Loans |  |  | Loans |
|  |  |  |  | Individually |  |  | Collectively |
|  |  |  |  | Evaluated for |  |  | Evaluated for |
(In thousands) |  | Nonaccrual |  |  | Impairment |  |  | Impairment |
Commercial, financial and agricultural |  | $ | 19,276 |  |  | $ | 19,205 |  |  | $ | 71 |
Commercial real estate |  |  | 57,941 |  |  |  | 57,930 |  |  |  | 11 |
Construction real estate: |  |  |  |  |  |  |  |  |  |  |  |
Vision commercial land and development |  |  | 87,424 |  |  |  | 86,491 |  |  |  | 933 |
Remaining commercial |  |  | 27,080 |  |  |  | 27,080 |  |  |  | — |
Mortgage |  |  | 354 |  |  |  | — |  |  |  | 354 |
Installment |  |  | 417 |  |  |  | — |  |  |  | 417 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 60,227 |  |  |  | 60,227 |  |  |  | — |
Mortgage |  |  | 32,479 |  |  |  | — |  |  |  | 32,479 |
HELOC |  |  | 964 |  |  |  | — |  |  |  | 964 |
Installment |  |  | 1,195 |  |  |  | — |  |  |  | 1,195 |
Consumer |  |  | 1,911 |  |  |  | — |  |  |  | 1,911 |
Leases |  |  | — |  |  |  | — |  |  |  | — |
Total loans |  | $ | 289,268 |  |  | $ | 250,933 |  |  | $ | 38,335 |
The majority of the loans individually evaluated for impairment were evaluated using the fair value of the collateral or present value of expected future cash flows as the measurement method. Impaired loans were as follows at December 31, 2009:
December 31 (In thousands) |  | 2009 |
Year-end loans with no allocated allowance for loan losses |  | $ | 77,487 |
Year-end loans with allocated allowance for loan losses |  |  | 123,656 |
Total |  | $ | 201,143 |
Amount of the allowance for loan losses allocated |  | $ | 36,721 |
The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2010.
|  | Unpaid |  |  |  |  |  | Allowance for |
|  | Principal |  |  | Recorded |  |  | Loan Losses |
(In thousands) |  | Balance (Restated) |  |  | Investment (Restated) |  |  | Allocated (Restated) |
With no related allowance recorded |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural |  | $ | 9,347 |  |  | $ | 8,891 |  |  | $ | — |
Commercial real estate |  |  | 21,526 |  |  |  | 17,170 |  |  |  | — |
Construction real estate: |  |  |  |  |  |  |  |  |  |  |  |
Vision commercial land and development |  |  | 11,206 |  |  |  | 7,847 |  |  |  | — |
Remaining commercial |  |  | 12,305 |  |  |  | 11,743 |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 46,344 |  |  |  | 43,031 |  |  |  | — |
With an allowance recorded |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial and agricultural |  |  | 11,801 |  |  |  | 10,314 |  |  |  | 3,028 |
Commercial real estate |  |  | 44,789 |  |  |  | 40,760 |  |  |  | 12,652 |
Construction real estate: |  |  |  |  |  |  |  |  |  |  |  |
Vision commercial land and development |  |  | 103,937 |  |  |  | 78,644 |  |  |  | 39,887 |
Remaining commercial |  |  | 23,563 |  |  |  | 15,337 |  |  |  | 5,425 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 19,716 |  |  |  | 17,196 |  |  |  | 5,912 |
Total |  | $ | 304,534 |  |  | $ | 250,933 |  |  | $ | 66,904 |
Management's general practice is to proactively charge down loans individually evaluated for impairment to the fair value of the underlying collateral. At December 31, 2010, there were $12.0 million in partial charge-offs on loans individually evaluated for impairment with no related allowance recorded and an additional $41.6 million of partial charge-offs on loans individually evaluated for impairment that also had a specific reserve allocated. The allowance for loan losses included specific reserves related to loans individually evaluated for impairment at December 31, 2010 and 2009, of $66.9 million and $36.7 million, respectively, related to loans with a recorded investment of $162.3 million and $123.7 million. The average balance of loans individually evaluated for impairment was $210.4 million, $184.7 million and $130.6 million for 2010, 2009 and 2008, respectively. Interest income on loans individually evaluated for impairment is recognized on a cash basis after all past due and current principal payments have been made. For the year ended December 31, 2010, the Corporation recognized a net reversal to interest income of $1.3 million, consisting of $948,000 in interest recognized at PNB and $2.2 million in interest reversed at Vision, on loans that were individually evaluated for impairment as of the end of the year. For the year ended December 31, 2009, the Corporation recognized a net reversal to interest income of $1.3 million, consisting of $1.8 million in interest recognized at PNB and $3.1 million in interest reversed at Vision, on loans that were individually evaluated for impairment as of the end of the year. For the year ended December 31, 2008, the Corporation recognized $0.9 million in interest income, consisting of $2.8 million in interest recognized at PNB and $1.9 million in interest reversed at Vision. The following table presents the aging of the recorded investment in past due loans as of December 31, 2010 by class of loans.
|  |  |  |  | Past Due |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Nonaccrual |  |  |  |  |  |  |  |  |  |
|  | Accruing |  |  | Loans and Loans |  |  |  |  |  |  |  |  |  |
|  | Loans |  |  | Past Due 90 |  |  |  |  |  |  |  |  | Total |
|  | Past Due |  |  | Days or More |  |  | Total |  |  | Total |  |  | Recorded |
(In thousands) |  | 30–89 Days |  |  | and Accruing |  |  | Past Due |  |  | Current |  |  | Investment |
Commercial, financial and agricultural |  | $ | 2,247 |  |  | $ | 15,622 |  |  | $ | 17,869 |  |  | $ | 722,919 |  |  | $ | 740,788 |
Commercial real estate |  |  | 9,521 |  |  |  | 53,269 |  |  |  | 62,790 |  |  |  | 1,168,630 |  |  |  | 1,231,420 |
Construction real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Vision commercial land and development |  |  | 2,406 |  |  |  | 65,130 |  |  |  | 67,536 |  |  |  | 104,080 |  |  |  | 171,616 |
Remaining commercial |  |  | 141 |  |  |  | 19,687 |  |  |  | 19,828 |  |  |  | 176,487 |  |  |  | 196,315 |
Mortgage |  |  | 479 |  |  |  | 148 |  |  |  | 627 |  |  |  | 25,794 |  |  |  | 26,421 |
Installment |  |  | 235 |  |  |  | 399 |  |  |  | 634 |  |  |  | 12,547 |  |  |  | 13,181 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 3,281 |  |  |  | 26,845 |  |  |  | 30,126 |  |  |  | 436,180 |  |  |  | 466,306 |
Mortgage |  |  | 17,460 |  |  |  | 24,422 |  |  |  | 41,882 |  |  |  | 867,555 |  |  |  | 909,437 |
HELOC |  |  | 1,396 |  |  |  | 667 |  |  |  | 2,063 |  |  |  | 259,414 |  |  |  | 261,477 |
Installment |  |  | 1,018 |  |  |  | 892 |  |  |  | 1,910 |  |  |  | 58,540 |  |  |  | 60,450 |
Consumer |  |  | 11,204 |  |  |  | 2,465 |  |  |  | 13,669 |  |  |  | 656,447 |  |  |  | 670,116 |
Leases |  |  | 5 |  |  |  | — |  |  |  | 5 |  |  |  | 2,658 |  |  |  | 2,663 |
Total loans |  | $ | 49,393 |  |  | $ | 209,546 |  |  | $ | 258,939 |  |  | $ | 4,491,251 |  |  | $ | 4,750,190 |
Management's policy is to initially place all renegotiated loans (troubled debt restructurings) on nonaccrual status. At December 31, 2010, there were $80.7 million of troubled debt restructurings included in nonaccrual loan totals. Many of these troubled debt restructurings are performing under the renegotiated terms. At December 31, 2010, of the $80.7 million in troubled debt restructurings, $50.3 million were included within current loans presented above. Management will continue to review the renegotiated loans and may determine it appropriate to move certain of these loans back to accrual status in the future. At December 31, 2010, Park had commitments to lend $434,000 of additional funds to borrowers whose terms had been modified in a troubled debt restructuring. Management utilizes past due information as a credit quality indicator across the loan portfolio. The past due information is the primary credit quality indicator within the following classes of loans: (1) mortgage loans and installment loans in the construction real estate segment; (2) mortgage loans, HELOC and installment loans in the residential real estate segment; and (3) consumer loans. The primary credit indicator for commercial loans is based on an internal grading system that grades all commercial loans from 1 to 8. Credit grades are continuously monitored by the respective loan officer and adjustments are made when appropriate. A grade of 1 indicates little or no credit risk and a grade of 8 is considered a loss. Commercial loans with grades of 1 to 4 (pass-rated) are considered to be of acceptable credit risk. Commercial loans graded a 5 (special mention) are considered to be watch list credits and a higher loan loss reserve percentage is allocated to these loans. Loans classified as special mention have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date. Commercial loans graded 6 (substandard), also considered watch list credits, are considered to represent higher credit risk and, as a result, a higher loan loss reserve percentage is allocated to these loans. Loans classified as substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Commercial loans that are graded a 7 (doubtful) are shown as nonperforming and Park generally charges these loans down to their fair value by taking a partial charge-off or recording a specific reserve. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Any commercial loan graded an 8 (loss) is completely charged-off. The table below presents the recorded investment by loan grade at December 31, 2010 for all commercial loans:
|  |  |  |  |  |  |  |  |  |  | Pass |  |  | Recorded |
(In thousands) |  | 5 Rated |  |  | 6 Rated |  |  | Nonaccrual |  |  | Rated |  |  | Investment |
Commercial, financial and agricultural |  | $ | 26,322 |  |  | $ | 11,447 |  |  | $ | 19,276 |  |  | $ | 683,743 |  |  | $ | 740,788 |
Commercial real estate |  |  | 57,394 |  |  |  | 26,992 |  |  |  | 57,941 |  |  |  | 1,089,093 |  |  |  | 1,231,420 |
Construction real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Vision commercial land and development |  |  | 10,220 |  |  |  | 7,941 |  |  |  | 87,424 |  |  |  | 66,031 |  |  |  | 171,616 |
Remaining commercial |  |  | 14,021 |  |  |  | 39,062 |  |  |  | 27,080 |  |  |  | 116,152 |  |  |  | 196,315 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 29,206 |  |  |  | 18,117 |  |  |  | 60,227 |  |  |  | 358,756 |  |  |  | 466,306 |
Leases |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,663 |  |  |  | 2,663 |
Total commercial loans |  | $ | 137,163 |  |  | $ | 103,559 |  |  | $ | 251,948 |  |  | $ | 2,316,438 |  |  | $ | 2,809,108 |
Management transfers a loan to other real estate owned at the time that Park takes possession of the asset. At December 31, 2010 and 2009, Park had $41.7 million and $41.2 million, respectively, of other real estate owned. Other real estate owned at Vision Bank has decreased from $35.2 million at December 31, 2009 to $33.3 million at December 31, 2010. Certain of the Corporation's executive officers and directors are loan customers of the Corporation's two banking subsidiaries. As of December 31, 2010 and 2009, loans and lines of credit aggregating approximately $53.6 million and $56.8 million, respectively, were outstanding to such parties. During 2010, $2.1 million of new loans were made to these executive officers and directors and repayments totaled $5.3 million. New loans and repayments for 2009 were $27.9 million and $9.5 million, respectively. Additionally, during 2009, $20.8 million in loans were removed from the aggregate amount reported due to the resignation of certain directors.

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