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Allowance for Loan Losses

9 Months Ended

Sep. 30, 2012

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses

Note 5 – Allowance for Loan Losses

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the prior one to five years. Management believes the two-year historical loss experience methodology is appropriate in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed. The actual allowance for loan loss activity is provided below.

		Three Months Ended September 30								Nine Months Ended September 30
		2012 (Unaudited)				2011 (Unaudited)				2012 (Unaudited)				2011 (Unaudited)
Balance at beginning of the period		$	18,374			$	18,586			$	18,882			$	19,064
Loans charged-off:
Commercial
Owner occupied real estate			92				65				95				189
Non owner occupied real estate			81				196				109				310
Residential development			—				—				—				—
Development & Spec Land Loans			—				—				—				—
Commercial and industrial			221				17				548				227
Total commercial			394				278				752				726
Real estate
Residential mortgage			247				86				451				837
Residential construction			—				—				—				—
Mortgage warehouse			—				—				—				—
Total real estate			247				86				451				837
Consumer
Direct Installment			90				78				261				480
Direct Installment Purchased			—				—				—				—
Indirect Installment			313				494				922				1,280
Home Equity			123				359				1,010				1,888
Total consumer			526				931				2,193				3,648
Total loans charged-off			1,167				1,295				3,396				5,211
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate			—				—				352				18
Non owner occupied real estate			—				—				7				—
Residential development			—				—				—				—
Development & Spec Land Loans			—				—				—				—
Commercial and industrial			61				9				114				14
Total commercial			61				9				473				32
Real estate
Residential mortgage			42				—				74				10
Residential construction			—				—				—				—
Mortgage warehouse			—				—				—				—
Total real estate			42				—				74				10
Consumer
Direct Installment			28				16				63				83
Direct Installment Purchased			—				—				—				—
Indirect Installment			173				179				563				568
Home Equity			16				51				100				120
Total consumer			217				246				726				771
Total loan recoveries			320				255				1,273				813
Net loans charged-off			847				1,040				2,123				4,398
Provision charged to operating expense
Commercial			625				1,341				320				1,290
Real estate			254				815				900				968
Consumer			162				(592	)			589				2,186
Total provision charged to operating expense			1,041				1,564				1,809				4,444
Balance at the end of the period		$	18,568			$	19,110			$	18,568			$	19,110

Certain loans are individually evaluated for impairment, and the Company’s general practice is to proactively charge down impaired loans to the fair value of the underlying collateral.

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down or specific allocation of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the value is known but no later than when a loan is 180 days past due. Pursuant to such guidelines, the Company also charges-off unsecured open-end loans when the loan is 90 days past due, and charges down to the net realizable value other secured loans when they are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection in full will occur regardless of delinquency status, are not charged off.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment analysis:

September 30, 2012		Commercial				Real Estate				Mortgage Warehousing				Consumer				Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment		$	2,403			$	—			$	—			$	—			$	2,403
Collectively evaluated for impairment			5,655				2,974				1,716				5,820				16,165
Total ending allowance balance		$	8,058			$	2,974			$	1,716			$	5,820			$	18,568
Loans:
Individually evaluated for impairment		$	12,865			$	—			$	—			$	—			$	12,865
Collectively evaluated for impairment			436,121				177,218				244,660				287,957				1,145,956
Total ending loans balance		$	448,986			$	177,218			$	244,660			$	287,957			$	1,158,821
December 31, 2011		Commercial				Real Estate				Mortgage Warehousing				Consumer				Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment		$	2,136			$	—			$	—			$	—			$	2,136
Collectively evaluated for impairment			5,881				2,472				1,695				6,698				16,746
Total ending allowance balance		$	8,017			$	2,472			$	1,695			$	6,698			$	18,882
Loans:
Individually evaluated for impairment		$	7,960			$	—			$	—			$	—			$	7,960
Collectively evaluated for impairment			345,350				157,663				208,726				266,450				978,189
Total ending loans balance		$	353,310			$	157,663			$	208,726			$	266,450			$	986,149

X

- Definition

The entire disclosure for any allowance and reserve accounts (their beginning and ending balances, as well as a reconciliation by type of activity during the period). Alternatively, disclosure of the required information may be within the footnotes to the financial statements or a supplemental schedule to the financial statements.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 09

-Article 12



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e24092-122690

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