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Allowance for Loan Losses and Credit Quality | 12 Months Ended
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Dec. 31, 2011
Loans and Allowance for Loan Losses and Credit Quality [Abstract] |
Allowance for Loan Losses and Credit Quality |
Note 5. | Allowance for Loan Losses and Credit Quality
The allowance for loan losses is maintained at a level management deems sufficient to absorb probable loan losses inherent in the loan portfolio. The allowance is increased by charges to earnings in the form of provision for loan losses and recoveries of prior loan charge-offs, and decreased by loans charged off. The provision is calculated to bring the allowance to a level which, according to a systematic process of measurement, reflects the amount management estimates is needed to absorb probable losses within the portfolio. While management utilizes its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Company’s control, including, among other things, the performance of the Company’s loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications. Management performs quarterly assessments to determine the appropriate level of allowance for loan losses. Differences between actual loan loss experience and estimates are reflected through adjustments that are made by increasing or decreasing the allowance based upon current measurement criteria. Commercial, consumer real estate, and non-real estate consumer loan portfolios are evaluated separately for purposes of determining the allowance. The specific components of the allowance include allocations to individual commercial loans and credit relationships and allocations to the remaining non-homogeneous and homogeneous pools of loans that have been deemed impaired. Additionally, a loan that becomes adversely classified or graded is removed from a group of non-classified or non-graded loans with similar risk characteristics in order to evaluate the removed loan collectively in a group of adversely classified or graded loans with similar risk characteristics. Management’s general reserve allocations are based on judgment of qualitative and quantitative factors about both macro and micro economic conditions reflected within the portfolio of loans and the economy as a whole. Factors considered in this evaluation include, but are not necessarily limited to, probable losses from loan and other credit arrangements, general economic conditions, changes in credit concentrations or pledged collateral, historical loan loss experience, and trends in portfolio volume, maturities, composition, delinquencies, and non-accruals. Historical loss rates for each risk grade of commercial loans are adjusted by environmental factors to estimate the amount of reserve needed by segment. While management has allocated the allowance for loan losses to various portfolio segments, the entire allowance is available for use against any type of loan loss deemed appropriate by management. As part of the Company’s continuing refinement of its methodology, the qualitative adjustments historically applied to consumer loans were revised downward based upon review and analysis of historical loss experience within the portfolio, as the Company now estimates fewer losses on that portfolio. The decrease in estimated losses on the consumer portfolio segment was offset by increases in estimated losses on the commercial portfolio segment. Primarily, the increase was in the specific loss estimated on certain impaired loans as a result of new information regarding the values of underlying collateral. This refinement initially created a small difference in the allowance allocated to each portfolio segment. The allocation of the allowance at the beginning of 2011 has been reclassified to reflect the application of the refinement. During 2011, the Company further segmented the single family residential real estate class into owner occupied and non-owner occupied classes, which management believes provides better granularity and segmentation of loans with similar risk characteristics. This segmentation also contributed to the overall reduction of estimated losses on non-impaired consumer loan segments in the allowance model, as losses on the Company’s non-owner occupied residential real estate loans have historically been higher than losses on owner occupied residential real estate loans. The following table details the activity in the allowance for loan loss by portfolio segment:
(Amounts in thousands) |  | Commercial |  |  | Consumer Real Estate |  |  | Consumer and Other |  |  | Total |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, January 1, 2009 |  | $ | 8,104 |  |  | $ | 7,199 |  |  | $ | 2,479 |  |  | $ | 17,782 |
Provision for loan losses |  |  | 10,850 |  |  |  | 3,420 |  |  |  | 1,531 |  |  |  | 15,801 |
Loans charged off |  |  | (5,937 | ) |  |  | (2,395 | ) |  |  | (2,023 | ) |  |  | (10,355 | )
Recoveries credited to allowance |  |  | 590 |  |  |  | 113 |  |  |  | 346 |  |  |  | 1,049 |
Net charge-offs |  |  | (5,347 | ) |  |  | (2,282 | ) |  |  | (1,677 | ) |  |  | (9,306 | )
Ending balance, December 31, 2009 |  | $ | 13,607 |  |  | $ | 8,337 |  |  | $ | 2,333 |  |  | $ | 24,277 |
Beginning balance, January 1, 2010 |  | $ | 13,607 |  |  | $ | 8,337 |  |  | $ | 2,333 |  |  | $ | 24,277 |
Provision for loan losses |  |  | 6,552 |  |  |  | 8,106 |  |  |  | 99 |  |  |  | 14,757 |
Loans charged off |  |  | (7,980 | ) |  |  | (4,352 | ) |  |  | (1,270 | ) |  |  | (13,602 | )
Recoveries credited to allowance |  |  | 339 |  |  |  | 109 |  |  |  | 602 |  |  |  | 1,050 |
Net charge-offs |  |  | (7,641 | ) |  |  | (4,243 | ) |  |  | (668 | ) |  |  | (12,552 | )
Ending balance, December 31, 2010 |  | $ | 12,518 |  |  | $ | 12,200 |  |  | $ | 1,764 |  |  | $ | 26,482 |
Beginning balance, January 1, 2011 |  | $ | 12,300 |  |  | $ | 12,641 |  |  | $ | 1,541 |  |  | $ | 26,482 |
Provision for loan losses |  |  | 12,007 |  |  |  | (2,681 | ) |  |  | (279 | ) |  |  | 9,047 |
Loans charged off |  |  | (7,981 | ) |  |  | (2,501 | ) |  |  | (978 | ) |  |  | (11,460 | )
Recoveries credited to allowance |  |  | 1,426 |  |  |  | 252 |  |  |  | 458 |  |  |  | 2,136 |
Net charge-offs |  |  | (6,555 | ) |  |  | (2,249 | ) |  |  | (520 | ) |  |  | (9,324 | )
Ending balance, December 31, 2011 |  | $ | 17,752 |  |  | $ | 7,711 |  |  | $ | 742 |  |  | $ | 26,205 |
The negative provision in the consumer real estate and consumer and other segments was the result of the aforementioned methodology refinement. The Company identifies loans for potential impairment through a variety of means including, but not limited to, ongoing loan review, renewal processes, delinquency data, market communications, and public information. If it is determined that it is probable that the Company will not collect all principal and interest amounts contractually due, the loan is generally deemed to be impaired. The following table presents the Company’s recorded investment in loans considered to be impaired and related information on those impaired loans for the periods ended December 31, 2011 and 2010:
|  | December 31, 2011 |
(Amounts in thousands) |  | Recorded Investment |  |  | Related Allowance |  |  | Unpaid Principal Balance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
Loans without a related allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 411 |  |  | $ | — |  |  | $ | 411 |  |  | $ | 282 |  |  | $ | — |
Land development |  |  | 250 |  |  |  | — |  |  |  | 250 |  |  |  | 293 |  |  |  | — |
Other land loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 766 |  |  |  | — |
Commercial and industrial |  |  | 114 |  |  |  | — |  |  |  | 127 |  |  |  | 2,251 |  |  |  | 4 |
Multi-family residential |  |  | 278 |  |  |  | — |  |  |  | 278 |  |  |  | 1,177 |  |  |  | 24 |
Single family non-owner occupied |  |  | 1,206 |  |  |  | — |  |  |  | 1,244 |  |  |  | 1,659 |  |  |  | 39 |
Non-farm, non-residential |  |  | 1,616 |  |  |  | — |  |  |  | 1,647 |  |  |  | 2,059 |  |  |  | 25 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland |  |  | 258 |  |  |  | — |  |  |  | 258 |  |  |  | 167 |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 368 |  |  |  | — |  |  |  | 378 |  |  |  | 476 |  |  |  | 15 |
Single family owner occupied |  |  | 2,428 |  |  |  | — |  |  |  | 2,508 |  |  |  | 1,825 |  |  |  | 43 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 60 |  |  |  | 3 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 6 |  |  |  | — |  |  |  | 6 |  |  |  | 23 |  |  |  | 2 |
|  | $ | 6,935 |  |  | $ | — |  |  | $ | 7,107 |  |  | $ | 11,038 |  |  | $ | 155 |
Loans with a related allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 135 |  |  | $ | 3 |
Land development |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other land loans |  |  | 112 |  |  |  | 4 |  |  |  | 112 |  |  |  | 113 |  |  |  | 6 |
Commercial and industrial |  |  | 4,031 |  |  |  | 2,048 |  |  |  | 4,069 |  |  |  | 2,358 |  |  |  | 21 |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 470 |  |  |  | — |
Single family non-owner occupied |  |  | 2,232 |  |  |  | 124 |  |  |  | 2,232 |  |  |  | 2,323 |  |  |  | 107 |
Non-farm, non-residential |  |  | 5,317 |  |  |  | 1,819 |  |  |  | 5,480 |  |  |  | 4,112 |  |  |  | 191 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 83 |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 108 |  |  |  | — |
Single family owner occupied |  |  | 5,529 |  |  |  | 1,203 |  |  |  | 5,612 |  |  |  | 5,794 |  |  |  | 164 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 17,221 |  |  | $ | 5,198 |  |  | $ | 17,505 |  |  | $ | 15,496 |  |  | $ | 492 |
|  | December 31, 2010 |
(Amounts in thousands) |  | Recorded Investment |  |  | Related Allowance |  |  | Unpaid Principal Balance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
Loans without a related allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 122 |  |  | $ | — |  |  | $ | 132 |  |  | $ | 471 |  |  | $ | — |
Land development |  |  | 50 |  |  |  | — |  |  |  | 50 |  |  |  | 500 |  |  |  | — |
Other land loans |  |  | 362 |  |  |  | — |  |  |  | 362 |  |  |  | 889 |  |  |  | — |
Commercial and industrial |  |  | 3,808 |  |  |  | — |  |  |  | 3,837 |  |  |  | 3,540 |  |  |  | — |
Multi-family residential |  |  | 2,329 |  |  |  | — |  |  |  | 2,345 |  |  |  | 1,475 |  |  |  | 32 |
Single family non-owner occupied |  |  | 1,197 |  |  |  | — |  |  |  | 1,238 |  |  |  | 823 |  |  |  | 4 |
Non-farm, non-residential |  |  | 2,974 |  |  |  | — |  |  |  | 3,068 |  |  |  | 2,009 |  |  |  | 15 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 330 |  |  |  | — |  |  |  | 335 |  |  |  | 221 |  |  |  | 7 |
Single family owner occupied |  |  | 678 |  |  |  | — |  |  |  | 698 |  |  |  | 1,237 |  |  |  | 32 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | 2 |  |  |  | — |
|  | $ | 11,851 |  |  | $ | — |  |  | $ | 12,066 |  |  | $ | 11,167 |  |  | $ | 90 |
Loans with a related allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 131 |  |  | $ | — |
Land development |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other land loans |  |  | 113 |  |  |  | 5 |  |  |  | 113 |  |  |  | 28 |  |  |  | 2 |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,172 |  |  |  | — |
Multi-family residential |  |  | 723 |  |  |  | 257 |  |  |  | 758 |  |  |  | 987 |  |  |  | 28 |
Single family non-owner occupied |  |  | 3,386 |  |  |  | 770 |  |  |  | 3,395 |  |  |  | 1,247 |  |  |  | 38 |
Non-farm, non-residential |  |  | 1,080 |  |  |  | 158 |  |  |  | 1,140 |  |  |  | 1,992 |  |  |  | 59 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 95 |  |  |  | 34 |  |  |  | 98 |  |  |  | 298 |  |  |  | 3 |
Single family owner occupied |  |  | 5,415 |  |  |  | 1,100 |  |  |  | 5,491 |  |  |  | 2,181 |  |  |  | 67 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 10,812 |  |  | $ | 2,324 |  |  | $ | 10,995 |  |  | $ | 10,036 |  |  | $ | 197 |
As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk rating of commercial loans, the level of classified commercial loans, net charge-offs, non-performing loans and general economic conditions. The Company’s loan review function generally reviews all commercial loan relationships greater than $2.00 million on an annual basis and at various times through the year. Smaller commercial and retail loans are sampled for review throughout the year by our internal loan review department. Through the loan review process, loans are identified for upgrade or downgrade in risk rating and changed to reflect current information as part of the process. The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of the risk grades is as follows:
| • |  | Pass – This grade includes loans to borrowers of acceptable credit quality and risk. The Company further differentiates within this grade based upon borrower characteristics which include: capital strength, earnings stability, liquidity leverage, and industry.
| • |  | Special Mention –This grade includes loans that require more than a normal degree of supervision and attention. These loans have all the characteristics of an adequate asset, but due to being adversely affected by economic or financial conditions have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan.
| • |  | Substandard – This grade includes loans that have well defined weaknesses which make payment default or principal exposure possible, but not yet certain. Such loans are apt to be dependent upon collateral liquidation, a secondary source of repayment, or an event outside of the normal course of business to meet the repayment terms.
| • |  | Doubtful – This grade includes loans that are placed on non-accrual status. These loans have all the weaknesses inherent in a “substandard’ loan with the added factor that the weaknesses are so severe that collection or liquidation in full, on the basis of current existing facts, conditions and values, is extremely unlikely, but because of certain specific pending factors, the amount of loss cannot yet be determined.
| • |  | Loss – This grade includes loans that are to be charged off or charged down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. “Loss” is not intended to imply that the asset has no recovery or salvage value, but simply that it is not practical or desirable to defer writing off all or some portion of the loan, even though partial recovery may be realized in the future.
The following tables present the Company’s investment in loans by internal credit grade indicator at December 31, 2011 and 2010:
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|  | December 31, 2011 |
(Amounts in thousands) |  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Loss |  |  | Total |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 34,512 |  |  | $ | 15 |  |  | $ | 955 |  |  | $ | — |  |  | $ | — |  |  | $ | 35,482 |
Land development |  |  | 2,479 |  |  |  | — |  |  |  | 423 |  |  |  | — |  |  |  | — |  |  |  | 2,902 |
Other land loans |  |  | 17,171 |  |  |  | 5,629 |  |  |  | 584 |  |  |  | — |  |  |  | — |  |  |  | 23,384 |
Commercial and industrial |  |  | 86,288 |  |  |  | 568 |  |  |  | 2,679 |  |  |  | 2,404 |  |  |  | — |  |  |  | 91,939 |
Multi-family residential |  |  | 74,486 |  |  |  | 965 |  |  |  | 1,599 |  |  |  | — |  |  |  | — |  |  |  | 77,050 |
Single family non-owner occupied |  |  | 93,444 |  |  |  | 1,346 |  |  |  | 11,953 |  |  |  | — |  |  |  | — |  |  |  | 106,743 |
Non-farm, non-residential |  |  | 303,071 |  |  |  | 9,635 |  |  |  | 22,855 |  |  |  | 444 |  |  |  | — |  |  |  | 336,005 |
Agricultural |  |  | 1,327 |  |  |  | 7 |  |  |  | 40 |  |  |  | — |  |  |  | — |  |  |  | 1,374 |
Farmland |  |  | 35,568 |  |  |  | 1,055 |  |  |  | 538 |  |  |  | — |  |  |  | — |  |  |  | 37,161 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 105,535 |  |  |  | 2,237 |  |  |  | 3,615 |  |  |  | — |  |  |  | — |  |  |  | 111,387 |
Single family owner occupied |  |  | 435,001 |  |  |  | 8,936 |  |  |  | 29,130 |  |  |  | — |  |  |  | — |  |  |  | 473,067 |
Owner occupied construction |  |  | 19,190 |  |  |  | 128 |  |  |  | 259 |  |  |  | — |  |  |  | — |  |  |  | 19,577 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 66,357 |  |  |  | 198 |  |  |  | 574 |  |  |  | — |  |  |  | — |  |  |  | 67,129 |
Other |  |  | 12,857 |  |  |  | 1 |  |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | 12,867 |
Total loans |  | $ | 1,287,286 |  |  | $ | 30,720 |  |  | $ | 75,213 |  |  | $ | 2,848 |  |  | $ | — |  |  | $ | 1,396,067 |
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|  | December 31, 2010 |
(Amounts in thousands) |  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Loss |  |  | Total |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 40,497 |  |  | $ | 663 |  |  | $ | 1,534 |  |  | $ | — |  |  | $ | — |  |  | $ | 42,694 |
Land development |  |  | 14,458 |  |  |  | 1,226 |  |  |  | 966 |  |  |  | — |  |  |  | — |  |  |  | 16,650 |
Other land loans |  |  | 16,723 |  |  |  | 6,138 |  |  |  | 1,607 |  |  |  | — |  |  |  | — |  |  |  | 24,468 |
Commercial and industrial |  |  | 87,156 |  |  |  | 1,756 |  |  |  | 5,211 |  |  |  | — |  |  |  | — |  |  |  | 94,123 |
Multi-family residential |  |  | 61,059 |  |  |  | 2,553 |  |  |  | 4,212 |  |  |  | — |  |  |  | — |  |  |  | 67,824 |
Single family non-owner occupied |  |  | 90,985 |  |  |  | 3,563 |  |  |  | 10,412 |  |  |  | — |  |  |  | — |  |  |  | 104,960 |
Non-farm, non-residential |  |  | 316,026 |  |  |  | 18,942 |  |  |  | 16,936 |  |  |  | — |  |  |  | — |  |  |  | 351,904 |
Agricultural |  |  | 1,318 |  |  |  | — |  |  |  | 24 |  |  |  | — |  |  |  | — |  |  |  | 1,342 |
Farmland |  |  | 33,042 |  |  |  | 2,569 |  |  |  | 1,343 |  |  |  | — |  |  |  | — |  |  |  | 36,954 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 106,803 |  |  |  | 1,923 |  |  |  | 2,894 |  |  |  | — |  |  |  | — |  |  |  | 111,620 |
Single family owner occupied |  |  | 407,845 |  |  |  | 11,661 |  |  |  | 24,037 |  |  |  | 654 |  |  |  | — |  |  |  | 444,197 |
Owner occupied construction |  |  | 17,389 |  |  |  | 789 |  |  |  | 171 |  |  |  | — |  |  |  | — |  |  |  | 18,349 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 62,676 |  |  |  | 306 |  |  |  | 493 |  |  |  | — |  |  |  | — |  |  |  | 63,475 |
Other |  |  | 7,635 |  |  |  | 11 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,646 |
Total loans |  | $ | 1,263,612 |  |  | $ | 52,100 |  |  | $ | 69,840 |  |  | $ | 654 |  |  | $ | — |  |  | $ | 1,386,206 |
Loans graded as special mention decreased $21.38 million, or 41.04%, between the years ended December 31, 2011 and 2010, primarily due to the improved performance of borrowers which mitigated the potential weakness previously identified. The following tables detail the Company’s recorded investment in loans related to each segment in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology at December 31, 2011 and 2010:
|  | December 31, 2011 |
(Amounts in thousands) |  | Loans Individually Evaluated for Impairment |  |  | Allowance for Loans Individually Evaluated |  |  | Loans Collectively Evaluated for Impairment |  |  | Allowance for Loans Collectively Evaluated |  |  | Acquired, Impaired Loans Evaluated for Impairment |  |  | Allowance for Acquired, Impaired Loans Evaluated |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 411 |  |  | $ | — |  |  | $ | 35,071 |  |  | $ | 865 |  |  | $ | — |  |  | $ | — |
Land development |  |  | 250 |  |  |  | — |  |  |  | 2,652 |  |  |  | 481 |  |  |  | — |  |  |  | — |
Other land loans |  |  | 112 |  |  |  | 4 |  |  |  | 23,123 |  |  |  | 542 |  |  |  | 149 |  |  |  | — |
Commercial and industrial |  |  | 3,738 |  |  |  | 1,847 |  |  |  | 87,563 |  |  |  | 1,668 |  |  |  | 638 |  |  |  | 201 |
Multi-family residential |  |  | 278 |  |  |  | — |  |  |  | 76,772 |  |  |  | 1,889 |  |  |  | — |  |  |  | — |
Single family non-owner occupied |  |  | 3,438 |  |  |  | 124 |  |  |  | 102,063 |  |  |  | 2,836 |  |  |  | 1,242 |  |  |  | — |
Non-farm, non-residential |  |  | 6,933 |  |  |  | 1,819 |  |  |  | 328,610 |  |  |  | 5,114 |  |  |  | 462 |  |  |  | — |
Agricultural |  |  | — |  |  |  | — |  |  |  | 1,374 |  |  |  | 19 |  |  |  | — |  |  |  | — |
Farmland |  |  | 258 |  |  |  | — |  |  |  | 36,903 |  |  |  | 343 |  |  |  | — |  |  |  | — |
Total commercial loans |  |  | 15,418 |  |  |  | 3,794 |  |  |  | 694,131 |  |  |  | 13,757 |  |  |  | 2,491 |  |  |  | 201 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 368 |  |  |  | — |  |  |  | 111,019 |  |  |  | 1,365 |  |  |  | — |  |  |  | — |
Single family owner occupied |  |  | 7,957 |  |  |  | 1,203 |  |  |  | 464,715 |  |  |  | 4,931 |  |  |  | 395 |  |  |  | — |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | 19,577 |  |  |  | 212 |  |  |  | — |  |  |  | — |
Total consumer real estate loans |  |  | 8,325 |  |  |  | 1,203 |  |  |  | 595,311 |  |  |  | 6,508 |  |  |  | 395 |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 6 |  |  |  | — |  |  |  | 67,123 |  |  |  | 742 |  |  |  | — |  |  |  | — |
Other |  |  | — |  |  |  | — |  |  |  | 12,867 |  |  |  | — |  |  |  | — |  |  |  | — |
Total consumer and other loans |  |  | 6 |  |  |  | — |  |  |  | 79,990 |  |  |  | 742 |  |  |  | — |  |  |  | — |
Total loans |  | $ | 23,749 |  |  | $ | 4,997 |  |  | $ | 1,369,432 |  |  | $ | 21,007 |  |  | $ | 2,886 |  |  | $ | 201 |
|  | December 31, 2010 |
(Amounts in thousands) |  | Loans Individually Evaluated for Impairment |  |  | Allowance for Loans Individually Evaluated |  |  | Loans Collectively Evaluated for Impairment |  |  | Allowance for Loans Collectively Evaluated |  |  | Acquired, Impaired Loans Evaluated for Impairment |  |  | Allowance for Acquired, Impaired Loans Evaluated |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 122 |  |  | $ | — |  |  | $ | 42,572 |  |  | $ | 1,472 |  |  | $ | — |  |  | $ | — |
Land development |  |  | 50 |  |  |  | — |  |  |  | 16,600 |  |  |  | 1,772 |  |  |  | — |  |  |  | — |
Other land loans |  |  | 113 |  |  |  | 5 |  |  |  | 23,843 |  |  |  | 742 |  |  |  | 512 |  |  |  | — |
Commercial and industrial |  |  | 3,401 |  |  |  | — |  |  |  | 90,201 |  |  |  | 4,511 |  |  |  | 521 |  |  |  | — |
Multi-family residential |  |  | 3,052 |  |  |  | 257 |  |  |  | 64,772 |  |  |  | 824 |  |  |  | — |  |  |  | — |
Single family non-owner occupied |  |  | 4,583 |  |  |  | 770 |  |  |  | 98,981 |  |  |  | 2,442 |  |  |  | 1,396 |  |  |  | — |
Non-farm, non-residential |  |  | 4,054 |  |  |  | 158 |  |  |  | 347,426 |  |  |  | 2,688 |  |  |  | 424 |  |  |  | — |
Agricultural |  |  | — |  |  |  | — |  |  |  | 1,342 |  |  |  | 19 |  |  |  | — |  |  |  | — |
Farmland |  |  | — |  |  |  | — |  |  |  | 36,954 |  |  |  | 70 |  |  |  | — |  |  |  | — |
Total commercial loans |  |  | 15,375 |  |  |  | 1,190 |  |  |  | 722,691 |  |  |  | 14,540 |  |  |  | 2,853 |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 425 |  |  |  | 34 |  |  |  | 111,195 |  |  |  | 2,104 |  |  |  | — |  |  |  | — |
Single family owner occupied |  |  | 6,093 |  |  |  | 1,100 |  |  |  | 437,736 |  |  |  | 5,557 |  |  |  | 368 |  |  |  | — |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | 18,349 |  |  |  | 193 |  |  |  | — |  |  |  | — |
Total consumer real estate loans |  |  | 6,518 |  |  |  | 1,134 |  |  |  | 567,280 |  |  |  | 7,854 |  |  |  | 368 |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 1 |  |  |  | — |  |  |  | 63,474 |  |  |  | 1,764 |  |  |  | — |  |  |  | — |
Other |  |  | — |  |  |  | — |  |  |  | 7,646 |  |  |  | — |  |  |  | — |  |  |  | — |
Total consumer and other loans |  |  | 1 |  |  |  | — |  |  |  | 71,120 |  |  |  | 1,764 |  |  |  | — |  |  |  | — |
Total loans |  | $ | 21,894 |  |  | $ | 2,324 |  |  | $ | 1,361,091 |  |  | $ | 24,158 |  |  | $ | 3,221 |  |  | $ | — |
Non-accrual and Past Due Loans Non-accrual loans, presented by loan class, consisted of the following at December 31, 2011 and 2010:
(Amounts in thousands) |  | 2011 |  |  | 2010 |
Commercial loans |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 461 |  |  | $ | 285 |
Land development |  |  | 297 |  |  |  | 50 |
Other land loans |  |  | 35 |  |  |  | 321 |
Commercial and industrial |  |  | 3,905 |  |  |  | 3,518 |
Multi-family residential |  |  | 341 |  |  |  | 2,463 |
Single family non-owner occupied |  |  | 1,639 |  |  |  | 2,426 |
Non-farm, non-residential |  |  | 8,063 |  |  |  | 4,670 |
Farmland |  |  | 271 |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |
Home equity lines |  |  | 516 |  |  |  | 868 |
Single family owner occupied |  |  | 8,255 |  |  |  | 3,938 |
Owner-occupied construction |  |  | 1 |  |  |  | 6 |
Consumer and other loans |  |  |  |  |  |  |  |
Consumer loans |  |  | 52 |  |  |  | 99 |
Total |  |  | 23,836 |  |  |  | 18,644 |
Acquired, impaired loans |  |  | 651 |  |  |  | 770 |
Total non-accrual loans |  | $ | 24,487 |  |  | $ | 19,414 |
The following tables present the aging of the recorded investment in past due loans, by loan class, at December 31, 2011 and 2010. Non-accrual loans, excluding those 0 to 29 days past due, are included in the applicable delinquency category. There were no loans past due 90 days and still accruing interest at December 31, 2011 or 2010.
|  | December 31, 2011 |
(Amounts in thousands) |  | 30 -59 Days |  |  | 60 -89 Days |  |  | 90+ Days |  |  | Total Past Due |  |  | Current Loans |  |  | Total Loans |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 48 |  |  | $ | — |  |  | $ | 411 |  |  | $ | 459 |  |  | $ | 35,023 |  |  | $ | 35,482 |
Land development |  |  | — |  |  |  | — |  |  |  | 297 |  |  |  | 297 |  |  |  | 2,605 |  |  |  | 2,902 |
Other land loans |  |  | 205 |  |  |  | — |  |  |  | 279 |  |  |  | 484 |  |  |  | 22,900 |  |  |  | 23,384 |
Commercial and industrial |  |  | 150 |  |  |  | 30 |  |  |  | 3,568 |  |  |  | 3,748 |  |  |  | 88,191 |  |  |  | 91,939 |
Multi-family residential |  |  | 667 |  |  |  | — |  |  |  | 342 |  |  |  | 1,009 |  |  |  | 76,041 |  |  |  | 77,050 |
Single family non-owner occupied |  |  | 1,222 |  |  |  | 414 |  |  |  | 1,020 |  |  |  | 2,656 |  |  |  | 104,087 |  |  |  | 106,743 |
Non-farm, non-residential |  |  | 837 |  |  |  | 860 |  |  |  | 2,180 |  |  |  | 3,877 |  |  |  | 332,128 |  |  |  | 336,005 |
Agricultural |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | 7 |  |  |  | 1,367 |  |  |  | 1,374 |
Farmland |  |  | 152 |  |  |  | — |  |  |  | 258 |  |  |  | 410 |  |  |  | 36,751 |  |  |  | 37,161 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 642 |  |  |  | 222 |  |  |  | 235 |  |  |  | 1,099 |  |  |  | 110,288 |  |  |  | 111,387 |
Single family owner occupied |  |  | 5,230 |  |  |  | 1,993 |  |  |  | 5,333 |  |  |  | 12,556 |  |  |  | 460,511 |  |  |  | 473,067 |
Owner occupied construction |  |  | — |  |  |  | 29 |  |  |  | — |  |  |  | 29 |  |  |  | 19,548 |  |  |  | 19,577 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 198 |  |  |  | 71 |  |  |  | 12 |  |  |  | 281 |  |  |  | 66,848 |  |  |  | 67,129 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 12,867 |  |  |  | 12,867 |
Total loans |  | $ | 9,351 |  |  | $ | 3,626 |  |  | $ | 13,935 |  |  | $ | 26,912 |  |  | $ | 1,369,155 |  |  | $ | 1,396,067 |
|  | December 31, 2010 |
(Amounts in thousands) |  | 30 -59 Days |  |  | 60 -89 Days |  |  | 90+ Days |  |  | Total Past Due |  |  | Current Loans |  |  | Total Loans |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction — commercial |  | $ | 531 |  |  | $ | — |  |  | $ | 122 |  |  | $ | 653 |  |  | $ | 42,041 |  |  | $ | 42,694 |
Land development |  |  | — |  |  |  | — |  |  |  | 50 |  |  |  | 50 |  |  |  | 16,600 |  |  |  | 16,650 |
Other land loans |  |  | — |  |  |  | — |  |  |  | 684 |  |  |  | 684 |  |  |  | 23,784 |  |  |  | 24,468 |
Commercial and industrial |  |  | 3,648 |  |  |  | 121 |  |  |  | 356 |  |  |  | 4,125 |  |  |  | 89,998 |  |  |  | 94,123 |
Multi-family residential |  |  | 956 |  |  |  | — |  |  |  | 1,793 |  |  |  | 2,749 |  |  |  | 65,075 |  |  |  | 67,824 |
Single family non-owner occupied |  |  | 1,784 |  |  |  | 345 |  |  |  | 2,169 |  |  |  | 4,298 |  |  |  | 100,662 |  |  |  | 104,960 |
Non-farm, non-residential |  |  | 3,251 |  |  |  | 2,056 |  |  |  | 3,249 |  |  |  | 8,556 |  |  |  | 343,348 |  |  |  | 351,904 |
Agricultural |  |  | 19 |  |  |  | — |  |  |  | — |  |  |  | 19 |  |  |  | 1,323 |  |  |  | 1,342 |
Farmland |  |  | 110 |  |  |  | — |  |  |  | — |  |  |  | 110 |  |  |  | 36,844 |  |  |  | 36,954 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 682 |  |  |  | 250 |  |  |  | 608 |  |  |  | 1,540 |  |  |  | 110,080 |  |  |  | 111,620 |
Single family owner occupied |  |  | 8,503 |  |  |  | 1,396 |  |  |  | 2,044 |  |  |  | 11,943 |  |  |  | 432,254 |  |  |  | 444,197 |
Owner occupied construction |  |  | 855 |  |  |  | 326 |  |  |  | 6 |  |  |  | 1,187 |  |  |  | 17,162 |  |  |  | 18,349 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 433 |  |  |  | 47 |  |  |  | 31 |  |  |  | 511 |  |  |  | 62,964 |  |  |  | 63,475 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,646 |  |  |  | 7,646 |
Total loans |  | $ | 20,772 |  |  | $ | 4,541 |  |  | $ | 11,112 |  |  | $ | 36,425 |  |  | $ | 1,349,781 |  |  | $ | 1,386,206 |
Troubled Debt Restructurings At December 31, 2011, total loan restructurings were $12.72 million which included $3.27 million of loans on non-accrual status. The allowance for loan losses related to loan restructurings was $1.14 million. Total interest income recognized on loan restructurings for the year ended December 31, 2011, totaled $561 thousand. The Company’s review of loan modifications beginning January 1, 2011, did not identify any TDRs resulting from the adoption of the guidance outlined in ASU 2011-02. When restructuring loans for troubled borrowers, the Company generally makes concessions in interest rates, loan terms and/or amortization terms. All restructured loans to troubled borrowers in excess of $250 thousand are evaluated for a specific reserve based on the net present value method. Restructured loans under $250 thousand are subject to the reserve calculation at the historical loss rate for classified loans. The following table presents loans modified as TDRs, excluding those on non-accrual status, within the previous 12 months by the types of concessions made by loan class during the year ended December 31, 2011. The post-modification total represents the recorded investment immediately following the modification.
(Amounts in thousands) |  | Number of Loans |  |  | Pre-Modification Recorded Investment |  |  | Post-Modification Recorded Investment |
Below market interest rate |  |  |  |  |  |  |  |  |  |  |  |
Non-farm, non-residential |  |  | 1 |  |  | $ | 373 |  |  | $ | 373 |
Single family owner occupied |  |  | 2 |  |  |  | 159 |  |  |  | 159 |
Total |  |  | 3 |  |  |  | 532 |  |  |  | 532 |
Extended payment terms |  |  |  |  |  |  |  |  |  |  |  |
Non-farm, non-residential |  |  | 1 |  |  |  | 126 |  |  |  | 126 |
Single family owner occupied |  |  | 1 |  |  |  | 267 |  |  |  | 267 |
Total |  |  | 2 |  |  |  | 393 |  |  |  | 393 |
Below market interest rate and extended payment terms |  |  |  |  |  |  |  |  |  |  |  |
Non-farm, non-residential |  |  | 1 |  |  |  | 107 |  |  |  | 107 |
Single family residential mortgage |  |  | 4 |  |  |  | 759 |  |  |  | 736 |
|  |  | 5 |  |  |  | 866 |  |  |  | 843 |
Total loan concessions |  |  | 10 |  |  | $ | 1,791 |  |  | $ | 1,768 |
The following table presents loans modified as TDRs within the previous 12 months for which there was a payment default during the year ended December 31, 2011:
(Amounts in thousands) |  | Number of Loans |  |  | Pre-Modification Recorded Investment |  |  | Post-Modification Recorded Investment |
Non-farm, non-residential |  |  | 1 |  |  | $ | 38 |  |  | $ | 38 |
Total loan concessions |  |  | 1 |  |  | $ | 38 |  |  | $ | 38 |

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