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Note 3: Loans and Allowance For Loan Losses | 12 Months Ended
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Dec. 31, 2012
Notes |
Note 3: Loans and Allowance For Loan Losses | Note 3: Loans and Allowance for Loan Losses Classes of loans at December 31, 2012 and 2011, included:
| 2012 |  | 2011
(In Thousands) |  |  |
One- to four-family residential construction | $29,071 |  | $23,976
Subdivision construction | 35,805 |  | 61,140
Land development | 62,559 |  | 68,771
Commercial construction | 150,515 |  | 119,589
Owner occupied one- to four-family residential | 83,859 |  | 91,994
Non-owner occupied one- to four-family residential | 145,458 |  | 145,781
Commercial real estate | 692,377 |  | 639,857
Other residential | 267,518 |  | 243,742
Commercial business | 264,631 |  | 236,384
Industrial revenue bonds | 43,762 |  | 59,750
Consumer auto | 82,610 |  | 59,368
Consumer other | 83,815 |  | 77,540
Home equity lines of credit | 54,225 |  | 47,114
FDIC-supported loans, net of discounts (TeamBank) | 77,615 |  | 128,875
FDIC-supported loans, net of discounts (Vantus Bank) | 95,483 |  | 123,036
FDIC-supported loans, net of discounts (Sun Security Bank) | 91,519 |  | 144,626
FDIC-supported loans, net of discounts (InterBank) | 259,232 |  | --
| 2,520,054 |  | 2,271,543
Undisbursed portion of loans in process | (157,574) |  | (103,424)
Allowance for loan losses | (40,649) |  | (41,232)
Deferred loan fees and gains, net | (2,193) |  | (2,726)
Total | $2,319,638 |  | $2,124,161
Classes of loans by aging were as follows:
| December 31, 2012
|  |  |  |  |  |  | Total Loans
| 30-59 Days | 60-89 Days | Over 90 | Total Past |  | Total Loans | > 90 Days and
| Past Due | Past Due | Days | Due | Current | Receivable | Still Accruing
(In Thousands) |  |  |  |  |  |  |
One- to four-family |  |  |  |  |  |  |
residential construction | $178 | $-- | $-- | $178 | $28,893 | $29,071 | $--
Subdivision construction | 478 | -- | 3 | 481 | 35,324 | 35,805 | --
Land development | -- | -- | 2,471 | 2,471 | 60,088 | 62,559 | --
Commercial construction | -- | -- | -- | -- | 150,515 | 150,515 | --
Owner occupied one- to four- |  |  |  |  |  |  |
family residential | 3,305 | 263 | 2,352 | 5,920 | 77,939 | 83,859 | 237
Non-owner occupied one- to |  |  |  |  |  |  |
four-family residential | 2,600 | -- | 1,905 | 4,505 | 140,953 | 145,458 | --
Commercial real estate | 1,346 | 726 | 8,324 | 10,396 | 681,981 | 692,377 | --
Other residential | 3,741 | -- | -- | 3,741 | 263,777 | 267,518 | --
Commercial business | 2,094 | 153 | 4,139 | 6,386 | 258,245 | 264,631 | --
Industrial revenue bonds | -- | -- | 2,110 | 2,110 | 41,652 | 43,762 | --
Consumer auto | 690 | 73 | 120 | 883 | 81,727 | 82,610 | 26
Consumer other | 1,522 | 242 | 834 | 2,598 | 81,217 | 83,815 | 449
Home equity lines of credit | 185 | 146 | 220 | 551 | 53,674 | 54,225 | --
FDIC-supported loans, net of |  |  |  |  |  |  |
discounts (TeamBank) | 1,608 | 2,077 | 8,020 | 11,705 | 65,910 | 77,615 | 173
FDIC-supported loans, net of |  |  |  |  |  |  |
discounts (Vantus Bank) | 1,545 | 669 | 5,641 | 7,855 | 87,628 | 95,483 | --
FDIC-supported loans, |  |  |  |  |  |  |
net of discounts |  |  |  |  |  |  |
(Sun Security Bank) | 1,539 | 384 | 21,342 | 23,265 | 68,254 | 91,519 | 1,274
FDIC-supported loans, net of |  |  |  |  |  |  |
discounts (InterBank) | 10,212 | 4,662 | 33,928 | 48,802 | 210,430 | 259,232 | 347
Total | 31,043 | 9,395 | 91,409 | 131,847 | 2,388,207 | 2,520,054 | 2,506
Less FDIC-supported loans, |  |  |  |  |  |  |
net of discounts | 14,904 | 7,792 | 68,931 | 91,627 | 432,222 | 523,849 | 1,794
Total legacy loans | $16,139 | $1,603 | $22,478 | $40,220 | $1,955,985 | $1,996,205 | $712
| December 31, 2011
|  |  |  |  |  |  | Total Loans
| 30-59 Days | 60-89 Days | Over 90 | Total Past |  | Total Loans | > 90 Days and
| Past Due | Past Due | Days | Due | Current | Receivable | Still Accruing
(In Thousands) |  |  |  |  |  |  |
One- to four-family |  |  |  |  |  |  |
residential construction | $2,082 | $342 | $186 | $2,610 | $21,366 | $23,976 | $--
Subdivision construction | 4,014 | 388 | 6,661 | 11,063 | 50,077 | 61,140 | --
Land development | -- | 4 | 2,655 | 2,659 | 66,112 | 68,771 | --
Commercial construction | -- | -- | -- | -- | 119,589 | 119,589 | --
Owner occupied one- to four- |  |  |  |  |  |  |
family residential | 833 | -- | 3,888 | 4,721 | 87,273 | 91,994 | 40
Non-owner occupied one- to |  |  |  |  |  |  |
four-family residential | 117 | -- | 3,425 | 3,542 | 142,239 | 145,781 | --
Commercial real estate | 6,323 | 535 | 6,204 | 13,062 | 626,795 | 639,857 | --
Other residential | -- | -- | -- | -- | 243,742 | 243,742 | --
Commercial business | 426 | 10 | 1,362 | 1,798 | 234,586 | 236,384 | --
Industrial revenue bonds | -- | -- | 2,110 | 2,110 | 57,640 | 59,750 | --
Consumer auto | 455 | 56 | 117 | 628 | 58,740 | 59,368 | 10
Consumer other | 1,508 | 641 | 715 | 2,864 | 74,676 | 77,540 | 356
Home equity lines of credit | 45 | 29 | 174 | 248 | 46,866 | 47,114 | --
FDIC-supported loans, net of |  |  |  |  |  |  |
discounts (TeamBank) | 2,422 | 862 | 19,215 | 22,499 | 106,376 | 128,875 | --
FDIC-supported loans, net of |  |  |  |  |  |  |
discounts (Vantus Bank) | 562 | 57 | 5,999 | 6,618 | 116,418 | 123,036 | 5
FDIC-supported loans, |  |  |  |  |  |  |
net of discounts |  |  |  |  |  |  |
(Sun Security Bank) | 5,628 | 6,851 | 40,299 | 52,778 | 91,848 | 144,626 | 150
Total | 24,415 | 9,775 | 93,010 | 127,200 | 2,144,343 | 2,271,543 | 561
Less FDIC-supported loans, |  |  |  |  |  |  |
net of discounts | 8,612 | 7,770 | 65,513 | 81,895 | 314,642 | 396,537 | 155
Total legacy loans | $15,803 | $2,005 | $27,497 | $45,305 | $1,829,701 | $1,875,006 | $406
Nonaccruing loans are summarized as follows:
| December 31,
| 2012 |  | 2011
(In Thousands) |  |  |
One- to four-family residential construction | $-- |  | $186
Subdivision construction | 3 |  | 6,661
Land development | 2,471 |  | 2,655
Commercial construction | -- |  | --
Owner occupied one- to four-family residential | 2,115 |  | 3,848
Non-owner occupied one- to four-family |  |  |
residential | 1,905 |  | 3,425
Commercial real estate | 8,324 |  | 6,204
Other residential | -- |  | --
Commercial business | 6,249 |  | 1,362
Industrial revenue bonds | -- |  | 2,110
Consumer auto | 94 |  | 107
Consumer other | 385 |  | 359
Home equity lines of credit | 220 |  | 174
Total | $21,766 |  | $27,091
Transactions in the allowance for loan losses were as follows:
| 2012 | 2011 | 2010
(In Thousands) |  |  |
Balance, beginning of year | $41,232 | $41,487 | $40,101
Provision charged to expense | 43,863 | 35,336 | 35,630
Loans charged off, net of recoveries |  |  |
of $3,845 for 2012, $5,063 for |  |  |
2011 and $5,804 for 2010 | (44,446) | (35,591) | (34,244)
Balance, end of year | $40,649 | $41,232 | $41,487
The following table presents the activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2012 and 2011. Also presented are the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2012, 2011 and 2010:
| One- to Four- |  |  |  |  |  |
| Family |  |  |  |  |  |
| Residential |  |  |  |  |  |
| and | Other | Commercial | Commercial | Commercial |  |
| Construction | Residential | Real Estate | Construction | Business | Consumer | Total
(In Thousands) |  |  |  |  |  |  |
Allowance for Loan Losses |  |  |  |  |  |  |
Balance, January 1, 2012 | $11,424 | $3,088 | $18,390 | $2,982 | $2,974 | $2,374 | $41,232
Provision charged to expense | (1,626) | 4,471 | 16,360 | 18,101 | 4,897 | 1,660 | 43,863
Losses charged off | (3,203) | (3,579) | (18,010) | (18,027) | (3,082) | (2,390) | (48,291)
Recoveries | 227 | 347 | 701 | 882 | 307 | 1,381 | 3,845
Balance, December 31, 2012 | $6,822 | $4,327 | $17,441 | $3,938 | $5,096 | $3,025 | $40,649
Ending balance: |  |  |  |  |  |  |
Individually evaluated |  |  |  |  |  |  |
for impairment | $2,288 | $1,089 | $4,990 | $96 | $2,778 | $156 | $11,397
Collectively evaluated |  |  |  |  |  |  |
for impairment | $4,532 | $3,239 | $12,443 | $3,842 | $2,315 | $2,864 | $29,235
Loans acquired and |  |  |  |  |  |  |
accounted for under |  |  |  |  |  |  |
ASC 310-30 | $1 | $-- | $9 | $-- | $4 | $3 | $17
Loans |  |  |  |  |  |  |
Individually evaluated |  |  |  |  |  |  |
for impairment | $14,691 | $16,405 | $48,476 | $12,009 | $10,064 | $980 | $102,625
Collectively evaluated |  |  |  |  |  |  |
for impairment | $279,502 | $251,113 | $687,663 | $201,065 | $254,567 | $219,670 | $1,893,580
Loans acquired and |  |  |  |  |  |  |
accounted for under |  |  |  |  |  |  |
ASC 310-30 | $278,889 | $53,280 | $129,128 | $7,997 | $14,939 | $39,616 | $523,849
| One- to Four- |  |  |  |  |  |
| Family |  |  |  |  |  |
| Residential |  |  |  |  |  |
| and | Other | Commercial | Commercial | Commercial |  |
| Construction | Residential | Real Estate | Construction | Business | Consumer | Total
(In Thousands) |  |  |  |  |  |  |
Allowance for Loan Losses |  |  |  |  |  |  |
Balance, January 1, 2011 | $11,483 | $3,866 | $14,336 | $5,852 | $3,281 | $2,669 | $41,487
Provision charged to expense | 7,995 | 5,693 | 17,859 | 1,020 | 1,459 | 1,310 | 35,336
Losses charged off | (8,333) | (8,018) | (13,862) | (4,103) | (2,842) | (3,496) | (40,654)
Recoveries | 279 | 1,547 | 57 | 213 | 1,076 | 1,891 | 5,063
Balance, December 31, 2011 | $11,424 | $3,088 | $18,390 | $2,982 | $2,974 | $2,374 | $41,232
Ending balance: |  |  |  |  |  |  |
Individually evaluated for |  |  |  |  |  |  |
impairment | $4,989 | $89 | $3,584 | $594 | $736 | $38 | $10,030
Collectively evaluated for |  |  |  |  |  |  |
impairment | $6,435 | $2,999 | $14,806 | $2,358 | $2,238 | $2,336 | $31,172
Loans acquired and |  |  |  |  |  |  |
accounted for under |  |  |  |  |  |  |
ASC 310-30 | $-- | $-- | $-- | $30 | $-- | $-- | $30
Loans |  |  |  |  |  |  |
Individually evaluated for |  |  |  |  |  |  |
impairment | $39,519 | $20,802 | $99,254 | $27,592 | $10,720 | $839 | $198,726
Collectively evaluated for |  |  |  |  |  |  |
impairment | $283,371 | $222,940 | $600,353 | $160,768 | $225,665 | $183,183 | $1,676,280
Loans acquired and |  |  |  |  |  |  |
accounted for under |  |  |  |  |  |  |
ASC 310-30 | $109,909 | $25,877 | $157,805 | $40,215 | $28,784 | $33,947 | $396,537
| One- to Four- |  |  |  |  |  |
| Family |  |  |  |  |  |
| Residential and | Other | Commercial | Commercial | Commercial |  |
| Construction | Residential | Real Estate | Construction | Business | Consumer | Total
(In Thousands) |  |  |  |  |  |  |
Allowance for Loan Losses |  |  |  |  |  |  |
Individually evaluated |  |  |  |  |  |  |
for impairment | $4,353 | $1,714 | $3,089 | $2,083 | $784 | $37 | $12,060
Collectively evaluated |  |  |  |  |  |  |
for impairment | $7,100 | $2,152 | $11,247 | $3,769 | $1,697 | $2,632 | $28,597
Loans acquired and |  |  |  |  |  |  |
accounted for under |  |  |  |  |  |  |
ASC 310-30 | $-- | $-- | $-- | $30 | $800 | $-- | $830
Loans |  |  |  |  |  |  |
Individually evaluated |  |  |  |  |  |  |
for impairment | $40,562 | $25,246 | $72,379 | $45,334 | $8,340 | $622 | $192,483
Collectively evaluated |  |  |  |  |  |  |
for impairment | $310,272 | $185,600 | $522,539 | $118,257 | $177,525 | $172,553 | $1,486,746
Loans acquired and |  |  |  |  |  |  |
accounted for under |  |  |  |  |  |  |
ASC 310-30 | $75,727 | $23,277 | $128,704 | $22,858 | $15,215 | $39,015 | $304,796
The portfolio segments used in the preceding three tables correspond to the loan classes used in all other tables in Note 3 as follows: · The one- to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes. · The other residential segment corresponds to the other residential class. · The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes. · The commercial construction segment includes the land development and commercial construction classes. · The commercial business segment corresponds to the commercial business class. · The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes. The weighted average interest rate on loans receivable at December 31, 2012 and 2011, was 5.39% and 5.86%, respectively. Loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of loans serviced for others were $158.4 million and $170.3 million at December 31, 2012 and 2011, respectively. In addition, available lines of credit on these loans were $15.7 million and $11.7 million at December 31, 2012 and 2011, respectively. A loan is considered impaired, in accordance with the impairment accounting guidance (FASB ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include not only nonperforming loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. The following summarizes information regarding impaired loans at and during the years ended December 31, 2012, 2011 and 2010:
|  |  | Year Ended
| December 31, 2012 |  | December 31, 2012
|  |  |  |  | Average |
|  | Unpaid |  |  | Investment | Interest
| Recorded | Principal | Specific |  | in Impaired | Income
| Balance | Balance | Allowance |  | Loans | Recognized
(In Thousands) |  |  |  |  |  |
One- to four-family residential construction | $410 | $410 | $239 |  | $679 | $22
Subdivision construction | 2,577 | 2,580 | 688 |  | 8,399 | 143
Land development | 12,009 | 13,204 | 96 |  | 12,614 | 656
Commercial construction | -- | -- | -- |  | 383 | --
Owner occupied one- to four-family |  |  |  |  |  |
residential | 5,627 | 6,037 | 550 |  | 5,174 | 295
Non-owner occupied one- to four-family |  |  |  |  |  |
residential | 6,077 | 6,290 | 811 |  | 10,045 | 330
Commercial real estate | 48,476 | 49,779 | 4,990 |  | 45,181 | 2,176
Other residential | 16,405 | 16,405 | 1,089 |  | 16,951 | 836
Commercial business | 7,279 | 8,615 | 2,778 |  | 4,851 | 329
Industrial revenue bonds | 2,785 | 2,865 | -- |  | 3,034 | 5
Consumer auto | 143 | 170 | 22 |  | 157 | 17
Consumer other | 602 | 682 | 89 |  | 654 | 65
Home equity lines of credit | 235 | 248 | 45 |  | 162 | 15
Total | $102,625 | $107,285 | $11,397 |  | $108,284 | $4,889
|  |  | Year Ended
| December 31, 2011 |  | December 31, 2011
|  |  |  |  | Average |
|  | Unpaid |  |  | Investment | Interest
| Recorded | Principal | Specific |  | in Impaired | Income
| Balance | Balance | Allowance |  | Loans | Recognized
(In Thousands) |  |  |  |  |  |
One- to four-family residential construction | $873 | $917 | $12 |  | $1,939 | $39
Subdivision construction | 12,999 | 14,730 | 2,953 |  | 10,154 | 282
Land development | 7,150 | 7,317 | 594 |  | 9,983 | 379
Commercial construction | -- | -- | -- |  | 308 | --
Owner occupied one- to four-family |  |  |  |  |  |
residential | 5,481 | 6,105 | 776 |  | 4,748 | 76
Non-owner occupied one- to four-family |  |  |  |  |  |
residential | 11,259 | 11,768 | 1,249 |  | 9,658 | 425
Commercial real estate | 49,961 | 55,233 | 3,562 |  | 34,403 | 1,616
Other residential | 12,102 | 12,102 | 89 |  | 9,475 | 454
Commercial business | 4,679 | 5,483 | 736 |  | 4,173 | 125
Industrial revenue bonds | 2,110 | 2,190 | 22 |  | 2,137 | --
Consumer auto | 147 | 168 | 3 |  | 192 | 6
Consumer other | 579 | 680 | 22 |  | 544 | 10
Home equity lines of credit | 174 | 184 | 12 |  | 227 | 1
Total | $107,514 | $116,877 | $10,030 |  | $87,941 | $3,413
|  |  | Year Ended
| December 31, 2010 |  | December 31, 2010
|  |  |  |  | Average |
|  | Unpaid |  |  | Investment | Interest
| Recorded | Principal | Specific |  | in Impaired | Income
| Balance | Balance | Allowance |  | Loans | Recognized
(In Thousands) |  |  |  |  |  |
One- to four-family residential construction | $1,947 | $2,371 | $258 |  | $1,724 | $83
Subdivision construction | 9,894 | 10,560 | 2,326 |  | 7,850 | 415
Land development | 17,957 | 21,006 | 1,925 |  | 18,760 | 534
Commercial construction | 1,851 | 1,851 | 158 |  | 458 | 31
Owner occupied one- to four-family |  |  |  |  |  |
residential | 5,205 | 5,620 | 542 |  | 3,612 | 69
Non-owner occupied one- to four-family |  |  |  |  |  |
residential | 11,785 | 12,267 | 1,227 |  | 8,182 | 386
Commercial real estate | 25,782 | 26,392 | 3,045 |  | 10,615 | 603
Other residential | 9,768 | 9,869 | 1,714 |  | 8,123 | 140
Commercial business | 9,722 | 12,495 | 828 |  | 2,630 | 114
Consumer auto | 125 | 137 | 4 |  | 30 | 1
Consumer other | 429 | 481 | 14 |  | 93 | 4
Home equity lines of credit | 148 | 166 | 19 |  | 109 | 1
Total | $94,613 | $103,215 | $12,060 |  | $62,186 | $2,381
At December 31, 2012, $43.4 million of impaired loans had specific valuation allowances totaling $11.4 million. At December 31, 2011, all impaired loans had specific valuation allowances totaling $10.0 million. Previous to the third quarter of 2012, the Company reported all impaired loans as having specific valuation allowances, even though in many instances the allowance assigned to a particular loan was actually only the general valuation percentage used for that particular category of loans. In the third quarter of 2012, the Company began reporting specific valuation allowances on impaired loans only if the recorded loan balance was greater than the calculated fair value of the collateral supporting the loan. This change was also factored into the general valuation allowances recorded by the Company, and did not result in a significant change to the overall allowance for loan losses recorded by the Company. For impaired loans which were nonaccruing, interest of approximately $1.8 million, $2.4 million and $2.0 million would have been recognized on an accrual basis during the years ended December 31, 2012, 2011 and 2010, respectively. Included in certain loan categories in the impaired loans are troubled debt restructurings that were classified as impaired. Troubled debt restructurings are loans that are modified by granting concessions to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. The types of concessions made are factored into the estimation of the allowance for loan losses for troubled debt restructurings primarily using a discounted cash flows or collateral adequacy approach. The following table presents newly restructured loans during 2012 by type of modification:
|  |  |  | Total
| Interest Only | Term | Combination | Modification
(In Thousands) |  |  |  |
Mortgage loans on real estate: |  |  |  |
Residential one-to-four family | $1,291 | $3,199 | $392 | $4,882
Commercial | 773 | 5,405 | -- | 6,178
Construction and land development | 183 | 309 | -- | 492
Other residential | -- | 3,977 | -- | 3,977
Home equity lines of credit | -- | 19 | -- | 19
Commercial | 24 | 3,615 | -- | 3,639
Consumer | -- | 39 | -- | 39
Total | $2,271 | $16,563 | $392 | $19,226
At December 31, 2012, the Company had $2.8 million of construction loans, $7.1 million of residential mortgage loans, $26.9 million of commercial real estate loans, $7.9 million of other residential loans, $1.9 million of commercial business loans and $167,000 of consumer loans that were modified in troubled debt restructurings and impaired. Of the total troubled debt restructurings at December 31, 2012, $38.1 million were accruing interest, $14.6 million were classified as substandard and $1.0 million were classified as doubtful using the Company’s internal grading system which is described below. During the previous 12 months, five commercial real estate loans totaling $1.8 million, two non-owner occupied residential mortgage loans totaling $406,000, four owner occupied residential mortgage loans totaling $294,000 and one consumer loan totaling $19,000, were modified as troubled debt restructurings and had payment defaults subsequent to the modifications. When loans modified as troubled debt restructuring have subsequent payment defaults, the defaults are factored into the determination of the allowance for loan losses to ensure specific valuation allowances reflect amounts considered uncollectible. At December 31, 2011, the Company had $9.0 million of construction loans, $17.0 million of residential mortgage loans, $31.3 million of commercial real estate loans, $671,000 of commercial business loans and $156,000 of consumer loans that were modified in troubled debt restructurings and impaired. Of the total troubled debt restructurings at December 31, 2011, $50.8 million were accruing interest at December 31, 2011. As of December 31, 2012, borrowers with loans designated as troubled debt restructurings totaling $1.4 million, including $160,000 of construction loans, $1.2 million of residential mortgage loans, $49,000 of commercial business loans and $17,000 of consumer loans, met the criteria for placement back on accrual status. This criteria is a minimum of six months of payment performance under existing or modified terms. The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention” and “Substandard.” Substandard loans are characterized by the distinct possibility that the Bank will sustain some loss if certain deficiencies are not corrected. Special mention loans possess potential weaknesses that deserve management’s close attention but do not expose the Bank to a degree of risk that warrants substandard classification. Loans classified as watch are being monitored because of indications of potential weaknesses or deficiencies that may require future classification as special mention or substandard. Loans not meeting any of the criteria previously described are considered satisfactory. The FDIC-covered loans are evaluated using this internal grading system. However, since these loans are accounted for in pools and are currently covered through loss sharing agreements with the FDIC, all of the loan pools were considered satisfactory at December 31, 2012 and 2011, respectively. See Note 4 for further discussion of the acquired loan pools and loss sharing agreements. The loan grading system is presented by loan class below:
|  | December 31, 2012
|  |  | Special |  |  |
| Satisfactory | Watch | Mention | Substandard | Doubtful | Total
(In Thousands) |  |  |  |  |  |
One- to four-family residential |  |  |  |  |  |
construction | $28,662 | $-- | $-- | $409 | $-- | $29,071
Subdivision construction | 31,156 | 2,993 | -- | 1,656 | -- | 35,805
Land development | 47,388 | 3,887 | -- | 11,284 | -- | 62,559
Commercial construction | 150,515 | -- | -- | -- | -- | 150,515
Owner occupied one- to-four- |  |  |  |  |  |
family residential | 79,411 | 792 | -- | 3,656 | -- | 83,859
Non-owner occupied one- to- |  |  |  |  |  |
four-family residential | 132,073 | 7,884 | -- | 5,501 | -- | 145,458
Commercial real estate | 619,387 | 42,753 | -- | 30,237 | -- | 692,377
Other residential | 252,238 | 6,793 | -- | 8,487 | -- | 267,518
Commercial business | 253,165 | 4,286 | -- | 6,180 | 1,000 | 264,631
Industrial revenue bonds | 40,977 | 675 | -- | 2,110 | -- | 43,762
Consumer auto | 82,467 | -- | -- | 143 | -- | 82,610
Consumer other | 83,250 | -- | -- | 565 | -- | 83,815
Home equity lines of credit | 52,076 | -- | 1,913 | 236 | -- | 54,225
FDIC-supported loans, net of |  |  |  |  |  |
discounts (TeamBank) | 77,568 | -- | -- | 47 | -- | 77,615
FDIC-supported loans, net of |  |  |  |  |  |
discounts (Vantus Bank) | 95,281 | -- | -- | 202 | -- | 95,483
FDIC-supported loans, net of |  |  |  |  |  |
discounts (Sun Security Bank) | 91,519 | -- | -- | -- | -- | 91,519
FDIC-supported loans, net of |  |  |  |  |  |
discounts (InterBank) | 259,210 | -- | -- | 22 | -- | 259,232
Total | $2,376,343 | $70,063 | $1,913 | $70,735 | $1,000 | $2,520,054
| December 31, 2011
|  |  | Special |  |  |
| Satisfactory | Watch | Mention | Substandard | Doubtful | Total
(In Thousands) |  |  |  |  |  |
One- to four-family residential |  |  |  |  |  |
construction | $21,436 | $2,354 | $-- | $186 | -- | $23,976
Subdivision construction | 45,754 | 2,701 | -- | 12,685 | -- | 61,140
Land development | 41,179 | 20,902 | 245 | 6,445 | -- | 68,771
Commercial construction | 119,589 | -- | -- | -- | -- | 119,589
Owner occupied one- to-four- |  |  |  |  |  |
family residential | 86,725 | 1,018 | -- | 4,251 | -- | 91,994
Non-owner occupied one- to four- |  |  |  |  |  |
family residential | 129,458 | 5,232 | 249 | 10,842 | -- | 145,781
Commercial real estate | 542,712 | 51,757 | 13,384 | 32,004 | -- | 639,857
Other residential | 222,940 | 13,262 | -- | 7,540 | -- | 243,742
Commercial business | 225,664 | 5,403 | 638 | 4,679 | -- | 236,384
Industrial revenue bonds | 57,640 | -- | -- | 2,110 | -- | 59,750
Consumer auto | 59,237 | -- | -- | 131 | -- | 59,368
Consumer other | 77,006 | -- | -- | 534 | -- | 77,540
Home equity lines of credit | 46,940 | -- | -- | 174 | -- | 47,114
FDIC-supported loans, net of |  |  |  |  |  |
discounts (TeamBank) | 128,875 | -- | -- | -- | -- | 128,875
FDIC-supported loans, net of |  |  |  |  |  |
discounts (Vantus Bank) | 123,036 | -- | -- | -- | -- | 123,036
FDIC-supported loans, net of |  |  |  |  |  |
discounts (Sun Security Bank) | 144,626 | -- | -- | -- | -- | 144,626
Total | $2,072,817 | $102,629 | $14,516 | $81,581 | -- | $2,271,543
Certain of the Bank’s real estate loans are pledged as collateral for borrowings as set forth in Notes 9 and 11. Certain directors and executive officers of the Company and the Bank are customers of and had transactions with the Bank in the ordinary course of business. Except for the interest rates on loans secured by personal residences, in the opinion of management, all loans included in such transactions were made on substantially the same terms as those prevailing at the time for comparable transactions with unrelated parties. Generally, residential first mortgage loans and home equity lines of credit to all employees and directors have been granted at interest rates equal to the Bank’s cost of funds, subject to annual adjustments in the case of residential first mortgage loans and monthly adjustments in the case of home equity lines of credit. At December 31, 2012 and 2011, loans outstanding to these directors and executive officers are summarized as follows:
| December 31, |
| 2012 |  | 2011
(In Thousands) |  |  |
Balance, beginning of year{start} | $2,294 |  | $12,933
New loans | 5,121 |  | 2,607
Payments | (3,120) |  | (13,246)
Balance, end of year{end} | $4,295 |  | $2,294

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