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Allowance for Loan Losses and Credit Quality Indicators
 6 Months Ended
Jun. 30, 2012
Loans and Allowance for Loan Losses and Credit Quality Indicators [Abstract]  
Allowance for Loan Losses and Credit Quality Indicators

Note 6. Allowance for Loan Losses and Credit Quality Indicators

Allowance for Loan Losses

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. Purchased credit impaired loan pools are evaluated separately from the non-purchased credit impaired portfolio for impairment. See Note 3, “Business Combinations,” for additional information.

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 nonhomogeneous 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 loans with similar risk characteristics that are not classified or graded 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 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 nonaccruals. 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.

The following tables detail activity within the allowance for loan losses, by portfolio segment, for the three and six months ended June 30, 2012 and 2011.

 

                                                                 
    Three Months Ended June 30, 2012     Three Months Ended June 30, 2011  
          Consumer     Consumer                 Consumer     Consumer        
(Amounts in thousands)   Commercial     Real Estate     and Other     Total     Commercial     Real Estate     and Other     Total  

Beginning balance

   $ 17,865     $ 7,259     $ 676     $ 25,800     $ 12,300     $ 12,641     $ 1,541     $ 26,482  

Provision for loan losses

     950       623       47       1,620       2,504       408       167       3,079  

Loans charged off

     (836 )      (619 )      (157 )      (1,612 )      (2,727 )      (457 )      (272 )      (3,456 ) 

Recoveries credited to allowance

     278       9       76       363       223       49       105       377  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net charge-offs

     (558 )      (610 )      (81 )      (1,249 )      (2,504 )      (408 )      (167 )      (3,079 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 18,257     $ 7,272     $ 642     $ 26,171     $ 12,300     $ 12,641     $ 1,541     $ 26,482  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                                 
    Six Months Ended June 30, 2012     Six Months Ended June 30, 2011  
          Consumer     Consumer                 Consumer     Consumer        
(Amounts in thousands)   Commercial     Real Estate     and Other     Total     Commercial     Real Estate     and Other     Total  

Beginning balance

   $ 17,752     $ 7,711     $ 742     $ 26,205     $ 12,300     $ 12,641     $ 1,541     $ 26,482  

Provision for loan losses

     1,216       1,237       89       2,542       2,865       1,621       205       4,691  

Loans charged off

     (1,086 )      (1,727 )      (361 )      (3,174 )      (3,167 )      (1,829 )      (487 )      (5,483 ) 

Recoveries credited to allowance

     375       51       172       598       302       208       282       792  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net charge-offs

     (711 )      (1,676 )      (189 )      (2,576 )      (2,865 )      (1,621 )      (205 )      (4,691 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 18,257     $ 7,272     $ 642     $ 26,171     $ 12,300     $ 12,641     $ 1,541     $ 26,482  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Credit Quality Indicators

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 tables present the Company’s recorded investment in non-purchased loans considered to be impaired and related information on those impaired loans for the periods indicated:

 

                                                 
    June 30, 2012     December 31, 2011  
          Unpaid                 Unpaid        
    Recorded     Principal     Related     Recorded     Principal     Related  
(Amounts in thousands)   Investment     Balance     Allowance     Investment     Balance     Allowance  

Impaired loans with no related allowance:

                                                

Commercial loans

                                                

Construction — commercial

   $ 12     $ 12     $ —       $ 411     $ 411     $ —    

Land development

     —         —         —         250       250       —    

Other land loans

     —         —         —         —         —         —    

Commercial and industrial

     61       66       —         114       127       —    

Multi-family residential

     796       801       —         278       278       —    

Single family non-owner occupied

     1,202       1,248       —         1,206       1,244       —    

Non-farm, non-residential

     816       856       —         1,616       1,647       —    

Agricultural

     —         —         —         —         —         —    

Farmland

     —         —         —         258       258       —    

Consumer real estate loans

                                                

Home equity lines

     366       385       —         368       378       —    

Single family owner occupied

     5,812       5,926       —         2,428       2,508       —    

Owner occupied construction

     —         —         —         —         —         —    

Consumer and other loans

                                                

Consumer loans

     —         —         —         6       6       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with no allowance

     9,065       9,294       —         6,935       7,107       —    

Impaired loans with a related allowance:

                                                

Commercial loans

                                                

Construction — commercial

     —         —         —         —         —         —    

Land development

     —         —         —         —         —         —    

Other land loans

     111       111       4       112       112       4  

Commercial and industrial

     3,914       3,936       3,739       4,031       4,069       2,048  

Multi-family residential

     —         —         —         —         —         —    

Single family non-owner occupied

     2,895       2,914       441       2,232       2,232       124  

Non-farm, non-residential

     6,620       6,966       1,647       5,317       5,480       1,819  

Agricultural

     —         —         —         —         —         —    

Farmland

     —         —         —         —         —         —    

Consumer real estate loans

                                                

Home equity lines

     250       250       250       —         —         —    

Single family owner occupied

     2,586       2,686       710       5,529       5,612       1,203  

Owner occupied construction

     —         —         —         —         —         —    

Consumer and other loans

                                                

Consumer loans

     —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with an allowance

     16,376       16,863       6,791       17,221       17,505       5,198  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 25,441     $ 26,157     $ 6,791     $ 24,156     $ 24,612     $ 5,198  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                 
    For the Three Months Ended     For the Six Months Ended  
    June 30, 2012     June 30, 2012  
    Average     Interest     Average     Interest  
    Recorded     Income     Recorded     Income  
(Amounts in thousands)   Investment     Recognized     Investment     Recognized  

Impaired loans with no related allowance:

                                

Commercial loans

                                

Construction — commercial

   $ 11     $ —       $ 30     $ —    

Land development

     —         —         —         —    

Other land loans

     —         —         —         —    

Commercial and industrial

     67       5       77       5  

Multi-family residential

     879       4       1,196       4  

Single family non-owner occupied

     1,405       8       1,813       17  

Non-farm, non-residential

     886       7       1,119       17  

Agricultural

     —         —         —         —    

Farmland

     —         —         —         —    

Consumer real estate loans

                                

Home equity lines

     378       8       503       14  

Single family owner occupied

     5,842       27       7,155       48  

Owner occupied construction

     —         —         —         —    

Consumer and other loans

                                

Consumer loans

     —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with no allowance

     9,468       59       11,893       105  

Impaired loans with a related allowance:

                                

Commercial loans

                                

Construction — commercial

     —         —         —         —    

Land development

     —         —         —         —    

Other land loans

     111       —         111       1  

Commercial and industrial

     3,922       72       3,973       72  

Multi-family residential

     —         —         —         —    

Single family non-owner occupied

     2,888       11       2,910       42  

Non-farm, non-residential

     6,683       145       6,952       236  

Agricultural

     —         —         —         —    

Farmland

     —         —         —         —    

Consumer real estate loans

                                

Home equity lines

     250       —         250       —    

Single family owner occupied

     2,581       28       2,697       53  

Owner occupied construction

     —         —         —         —    

Consumer and other loans

                                

Consumer loans

     —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with an allowance

     16,435       256       16,893       404  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 25,903     $ 315     $ 28,786     $ 509  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

                                 
    For the Three Months Ended     For the Six Months Ended  
    June 30, 2011     June 30, 2011  
    Average     Interest     Average     Interest  
    Recorded     Income     Recorded     Income  
(Amounts in thousands)   Investment     Recognized     Investment     Recognized  

Impaired loans with no related allowance:

                                

Commercial loans

                                

Construction — commercial

   $ 481     $ —       $ 322     $ —    

Land development

     916       —         458       —    

Other land loans

     2,291       —         1,491       1  

Commercial and industrial

     4,015       —         4,097       —    

Multi-family residential

     1,357       1       1,578       14  

Single family non-owner occupied

     1,158       19       1,263       19  

Non-farm, non-residential

     1,676       10       2,322       10  

Agricultural

     —         —         —         —    

Farmland

     —         —         —         —    

Consumer real estate loans

                                

Home equity lines

     644       5       506       8  

Single family owner occupied

     1,479       6       1,250       5  

Owner occupied construction

     241       3       121       3  

Consumer and other loans

                                

Consumer loans

     —         —         3       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with no allowance

     14,258       44       13,411       60  

Impaired loans with a related allowance:

                                

Commercial loans

                                

Construction — commercial

     269       —         135       —    

Land development

     —         —         —         —    

Other land loans

     113       2       113       3  

Commercial and industrial

     651       8       651       8  

Multi-family residential

     786       —         644       —    

Single family non-owner occupied

     2,263       27       2,389       54  

Non-farm, non-residential

     3,052       8       2,322       11  

Agricultural

     —         —         —         —    

Farmland

     333       —         166       —    

Consumer real estate loans

                                

Home equity lines

     —         —         49       —    

Single family owner occupied

     6,079       56       5,734       92  

Owner occupied construction

     —         —         —         —    

Consumer and other loans

                                

Consumer loans

     —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with an allowance

     13,546       101       12,203       168  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 27,804     $ 145     $ 25,614     $ 228  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

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 June 30, 2012, and December 31, 2011. The Company is still in the process of identifying purchased performing and credit impaired loans from the Peoples and Waccamaw acquisitions; therefore, those acquired loans have been excluded from the table below.

 

                                                 
    June 30, 2012  
(Amounts in thousands)   Non-acquired
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

   $ 12     $ —       $ 13,298     $ 491     $ —       $ —    

Land development

     —         —         6,549       136       —         —    

Other land loans

     111       4       26,460       346       —         —    

Commercial and industrial

     3,967       3,731       75,236       1,333       255       8  

Multi-family residential

     796       —         80,010       2,163       —         —    

Single family non-owner occupied

     4,097       441       135,446       2,458       1,141       —    

Non-farm, non-residential

     7,436       1,647       350,269       5,105       483       —    

Agricultural

     —         —         1,643       19       —         —    

Farmland

     —         —         37,211       375       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total commercial loans

     16,419       5,823       726,122       12,426       1,879       8  

Consumer real estate loans

                                                

Home equity lines

     616       250       107,236       1,277       —         —    

Single family owner occupied

     8,398       710       427,321       4,849       414       —    

Owner occupied construction

     —         —         30,417       186       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total consumer real estate loans

     9,014       960       564,974       6,312       414       —    

Consumer and other loans

                                                

Consumer loans

     —         —         67,643       642       —         —    

Other

     —         —         5,850       —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total consumer and other loans

     —         —         73,493       642       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans

   $ 25,433     $ 6,783     $ 1,364,589     $ 19,380     $ 2,293     $ 8  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
    December 31, 2011  
(Amounts in thousands)   Non-acquired
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  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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, nonperforming 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 nonaccrual 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 held for investment by internal credit grade indicator at June 30, 2012, and December 31, 2011. There were no covered loans at December 31, 2011.

 

                                                 
    June 30, 2012  
(Amounts in thousands)   Pass     Special
Mention		     Substandard     Doubtful     Loss     Total  

Non-covered loans

                                                

Commercial loans

                                                

Construction — commercial

   $ 19,390     $ 149     $ 1,338     $ —       $ —       $ 20,877  

Land development

     6,377       —         172       —         —         6,549  

Other land loans

     23,178       3,084       309       —         —         26,571  

Commercial and industrial

     90,824       951       3,033       4,556       —         99,364  

Multi-family residential

     81,808       1,420       2,812       —         —         86,040  

Single family non-owner occupied

     126,382       2,711       11,230       361       —         140,684  

Non-farm, non-residential

     408,333       11,953       33,072       462       —         453,820  

Agricultural

     1,603       5       35       —         —         1,643  

Farmland

     35,057       1,366       2,000       —         —         38,423  

Consumer real estate loans

                                                

Home equity lines

     108,758       1,947       4,888       250       —         115,843  

Single family owner occupied

     425,619       8,774       32,057       —         —         466,450  

Owner occupied construction

     29,892       272       253       —         —         30,417  

Consumer and other loans

                                                

Consumer loans

     74,750       363       659       9       —         75,781  

Other

     5,818       25       7       —         —         5,850  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total non-covered loans

   $ 1,437,789     $ 33,020     $ 91,865     $ 5,638     $ —       $ 1,568,312  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
    June 30, 2012  
(Amounts in thousands)   Pass     Special
Mention		     Substandard     Doubtful     Loss     Total  

Covered loans

                                                

Commercial loans

                                                

Construction — commercial

   $ 3,818     $ 2,536     $ 11,319     $ 97     $ —       $ 17,770  

Land development

     —         —         —         —         —         —    

Other land loans

     —         —         —         —         —         —    

Commercial and industrial

     6,986       204       279       194       —         7,663  

Multi-family residential

     2,432       —         1,274       —         —         3,706  

Single family non-owner occupied

     —         —         —         —         —         —    

Non-farm, non-residential

     41,419       6,565       18,724       43       —         66,751  

Agricultural

     305       —         2       —         —         307  

Farmland

     1,102       1       242       —         —         1,345  

Consumer real estate loans

                                                

Home equity lines

     86,685       990       808       25       —         88,508  

Single family owner occupied

     33,234       4,552       7,522       383       —         45,691  

Owner occupied construction

     1,218       283       985       16       —         2,502  

Consumer and other loans

                                                

Consumer loans

     3,740       575       154       65       —         4,534  

Other

     —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total covered loans

   $ 180,939     $ 15,706     $ 41,309     $ 823     $ —       $ 238,777  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
    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  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

Nonaccrual loans, presented by loan class, consisted of the following at June 30, 2012, and December 31, 2011. Loans acquired through business combinations, for which a discount exists, are not considered to be nonaccrual as a result of the accretion of the discount based on the expected cash flow of the loans.

 

                 
(Amounts in thousands)   June 30, 2012     December 31, 2011  

Commercial loans

                

Construction — commercial

   $ 182     $ 461  

Land development

     48       297  

Other land loans

     216       35  

Commercial and industrial

     4,402       3,905  

Multi-family residential

     796       341  

Single family non-owner occupied

     4,355       1,639  

Non-farm, non-residential

     8,655       8,063  

Farmland

     100       271  

Consumer real estate loans

                

Home equity lines

     670       516  

Single family owner occupied

     8,427       8,255  

Owner occupied construction

     33       1  

Consumer and other loans

                

Consumer loans

     55       52  
   

 

 

    

 

 

  

Total

     27,939       23,836  

Acquired impaired loans

     8       651  
   

 

 

    

 

 

  

Total nonaccrual loans

   $ 27,947     $ 24,487  
   

 

 

    

 

 

  

 

The following tables present the aging of past due loans, by loan class, at June 30, 2012, and December 31, 2011. Nonaccrual loans, excluding those 0 to 29 days past due, are included in the applicable delinquency category. There were no accruing loans contractually past due 90 days or more at June 30, 2012, or December 31, 2011. Acquired loans that are past due continue to accrue accretable yield under the accretion method of accounting and therefore are not considered to be nonaccrual. As a result of the Company being in the process of identifying the purchased performing and credit impaired loans from the Peoples and Waccamaw acquisition, all loans from the acquisitions are included in the applicable delinquency category.

 

                                                 
    June 30, 2012  
    30 - 59 Days     60 - 89 Days     90+ Days     Total     Current     Total  
(Amounts in thousands)   Past Due     Past Due     Past Due     Past Due     Loans     Loans  

Non-covered loans

                                                

Commercial loans

                                                

Construction — commercial

   $ 347     $ 72     $ 1,188     $ 1,607     $ 19,270     $ 20,877  

Land development

     —         —         48       48       6,501       6,549  

Other land loans

     65       —         216       281       26,290       26,571  

Commercial and industrial

     1,069       101       1,316       2,486       96,878       99,364  

Multi-family residential

     751       476       401       1,628       84,412       86,040  

Single family non-owner occupied

     674       404       3,306       4,384       136,300       140,684  

Non-farm, non-residential

     2,038       670       5,794       8,502       445,318       453,820  

Agricultural

     34       —         —         34       1,609       1,643  

Farmland

     313       —         —         313       38,110       38,423  

Consumer real estate loans

                                                

Home equity lines

     1,148       468       461       2,077       113,766       115,843  

Single family owner occupied

     2,784       727       5,146       8,657       457,793       466,450  

Owner occupied construction

     19       129       33       181       30,236       30,417  

Consumer and other loans

                                                

Consumer loans

     296       21       36       353       75,428       75,781  

Other

     —         —         —         —         5,850       5,850  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total non-covered loans

   $ 9,538     $ 3,068     $ 17,945     $ 30,551     $ 1,537,761     $ 1,568,312  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
    June 30, 2012  
    30 - 59 Days     60 - 89 Days     90+ Days     Total     Current     Total  
(Amounts in thousands)   Past Due     Past Due     Past Due     Past Due     Loans     Loans  

Covered loans

                                                

Commercial loans

                                                

Construction — commercial

   $ 893     $ 323     $ 8,216     $ 9,432     $ 8,338     $ 17,770  

Land development

     —         —         —         —         —         —    

Other land loans

     —         —         —         —         —         —    

Commercial and industrial

     —         73       255       328       7,335       7,663  

Multi-family residential

     —         —         563       563       3,143       3,706  

Single family non-owner occupied

     —         —         —         —         —         —    

Non-farm, non-residential

     117       61       5,506       5,684       61,607       66,751  

Agricultural

     —         —         —         —         307       307  

Farmland

     —         —         241       241       1,104       1,345  

Consumer real estate loans

                                                

Home equity lines

     436       26       192       654       87,854       88,508  

Single family owner occupied

     472       161       3,904       4,537       41,154       45,691  

Owner occupied construction

     167       —         393       560       1,942       2,502  

Consumer and other loans

                                                

Consumer loans

     —         —         93       93       4,441       4,534  

Other

     —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total covered loans

   $ 2,085     $ 644     $ 19,363     $ 22,092     $ 216,685     $ 238,777  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                 
    December 31, 2011  
    30 - 59 Days     60 - 89 Days     90+ Days     Total     Current     Total  
(Amounts in thousands)   Past Due     Past Due     Past Due     Past Due     Loans     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  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The Company’s troubled debt restructurings (“TDRs”) totaled $7.46 million at June 30, 2012, and $9.45 million at December 31, 2011, which are reported net of those on nonaccrual status of $4.78 million and $3.27 million, respectively. Accruing nonperforming TDRs amounted to $469 thousand, or 6.29% of total accruing TDRs at June 30, 2012, and $600 thousand, or 6.35% of total TDRs at December 31, 2011. The allowance for loan losses included reserves related to TDRs of $675 thousand and $1.14 million at June 30, 2012, and December 31, 2011, respectively. Interest income recognized on TDRs for the three and six months ended June 30, 2012, totaled $81 thousand and $175 thousand, respectively. Interest income recognized on TDRs for the three and six months ended June 30, 2011, totaled $210 thousand and $333 thousand, respectively. There were no covered loans recorded as TDRs at June 30, 2012.

When restructuring loans for borrowers experiencing financial difficulty, the Company generally makes concessions in interest rates, loan terms and/or amortization terms. All restructured loans to borrowers experiencing financial difficulty 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. Certain TDRs are classified as nonperforming at time of restructuring and are returned to performing status after six months of satisfactory payment performance; however, these loans remain identified as impaired until full payment or other satisfaction of the obligation occurs.

 

The following tables present information for loans modified as TDRs, excluding those on nonaccrual status, that were restructured during the three and six months ended June 30, 2012 and 2011 by type of concession made and loan class. The post-modification recorded investment represents the loan balance immediately following modification.

 

                                                 
    Three Months Ended June 30,  
    2012     2011  
(Amounts in thousands)   Total
Contracts		     Pre-Modification
Recorded Investment		     Post-Modification
Recorded  Investment		     Total
Contracts		     Pre-Modification
Recorded Investment		     Post-Modification
Recorded  Investment		  

Below market interest rate

                                                

Non-farm, non-residential

     —       $ —       $ —         1     $ 373     $ 373  

Single family owner occupied

     —         —         —         2       445       445  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     —       $ —       $ —         3     $ 818     $ 818  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   
    Six Months Ended June 30,  
    2012     2011  
(Amounts in thousands)   Total
Contracts		     Pre-Modification
Recorded  Investment		     Post-Modification
Recorded  Investment		     Total
Contracts		     Pre-Modification
Recorded  Investment		     Post-Modification
Recorded  Investment		  

Below market interest rate

                                                

Non-farm, non-residential

     —       $ —       $ —         2     $ 480     $ 480  

Single family owner occupied

     —         —         —         3       726       703  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     —         —         —         5       1,206       1,183  

Extended payment term

                                                

Single family owner occupied

     1       351       318       —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     1       351       318       —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     1     $ 351     $ 318       5     $ 1,206     $ 1,183  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

There were no payment defaults on loans modified as TDRs during the three and six months ended June 30, 2012 or 2011 that were restructured within the previous 12 months.