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Allowance for Loan Losses

6 Months Ended

Jun. 30, 2013

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 five-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								Six Months Ended
		June 30								June 30
		2013				2012				2013				2012
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Balance at beginning of the period		$	19,565			$	19,412			$	18,270			$	18,882
Loans charged-off:
Commercial
Owner occupied real estate			6				3				138				3
Non owner occupied real estate			45				28				191				28
Residential development			—				—				—				—
Development & Spec Land Loans			—				—				—				—
Commercial and industrial			774				327				913				327
Total commercial			825				358				1,242				358
Real estate
Residential mortgage			416				115				559				204
Residential construction			—				—				—				—
Mortgage warehouse			—				—				—				—
Total real estate			416				115				559				204
Consumer
Direct Installment			88				58				195				171
Direct Installment Purchased			—				—				—				—
Indirect Installment			271				271				624				609
Home Equity			201				754				639				887
Total consumer			560				1,083				1,458				1,667
Total loans charged-off			1,801				1,556				3,259				2,229
Recoveries of loans previously charged-off:
Commercial
Owner occupied real estate			14				52				46				352
Non owner occupied real estate			1				—				3				7
Residential development			—				—				—				—
Development & Spec Land Loans			—				—				—				—
Commercial and industrial			111				28				147				53
Total commercial			126				80				196				412
Real estate
Residential mortgage			5				2				8				32
Residential construction			—				—				—				—
Mortgage warehouse			—				—				—				—
Total real estate			5				2				8				32
Consumer
Direct Installment			54				20				448				35
Direct Installment Purchased			—				—				—				—
Indirect Installment			202				189				372				390
Home Equity			—				18				32				84
Total consumer			256				227				852				509
Total loan recoveries			387				309				1,056				953
Net loans charged-off			1,414				1,247				2,203				1,276
Provision charged to operating expense
Commercial			(940	)			(391	)			802				(305	)
Real estate			675				35				986				646
Consumer			994				565				1,025				427
Total provision charged to operating expense			729				209				2,813				768
Balance at the end of the period		$	18,880			$	18,374			$	18,880			$	18,374

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:

June 30, 2013		Commercial				Real Estate				Mortgage Warehousing				Consumer				Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment		$	2,398			$	—			$	—			$	—			$	2,398
Collectively evaluated for impairment			5,128				3,734				1,610				6,010				16,482
Total ending allowance balance		$	7,526			$	3,734			$	1,610			$	6,010			$	18,880
Loans:
Individually evaluated for impairment		$	9,390			$	—			$	—			$	—			$	9,390
Collectively evaluated for impairment			494,174				183,250				155,442				278,867				1,111,733
Total ending loans balance		$	503,564			$	183,250			$	155,442			$	278,867			$	1,121,123
December 31, 2012		Commercial				Real Estate				Mortgage Warehousing				Consumer				Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment		$	1,945			$	—			$	—			$	—			$	1,945
Collectively evaluated for impairment			5,826				3,204				1,705				5,590				16,325
Total ending allowance balance		$	7,771			$	3,204			$	1,705			$	5,590			$	18,270
Loans:
Individually evaluated for impairment		$	10,597			$	—			$	—			$	—			$	10,597
Collectively evaluated for impairment			451,243				190,292				251,928				290,174				1,183,637
Total ending loans balance		$	461,840			$	190,292			$	251,928			$	290,174			$	1,194,234

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 FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e24092-122690



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

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 09

-Article 12

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