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Allowance for Loan Losses and Credit Quality Indicators
 9 Months Ended
Sep. 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 Company enhanced the allowance for loan losses during the third quarter of 2012 by combining three previously reported commercial loan classes, “Construction—commercial”, “Land development”, and “Other land’, into one segment, “Construction, development, and other land”. Management determined that qualitative and quantitative factors for the respective loan classes were significantly similar and do not warrant separate segmentation.

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

 

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

Beginning balance

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

Provision for loan losses

     436       1,289       191       1,916       7,393       (4,811 )      (662 )      1,920  

Loans charged off

     (1,184 )      (1,126 )      (303 )      (2,613 )      (2,157 )      (712 )      (193 )      (3,062 ) 

Recoveries credited to allowance

     198       63       100       361       968       15       84       1,067  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net charge-offs

     (986 )      (1,063 )      (203 )      (2,252 )      (1,189 )      (697 )      (109 )      (1,995 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 17,707     $ 7,498     $ 630     $ 25,835     $ 18,504     $ 7,133     $ 770     $ 26,407  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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

Beginning balance

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

Provision for loan losses

     1,735       2,475       248       4,458       10,258       (3,190 )      (457 )      6,611  

Loans charged off

     (2,353 )      (2,802 )      (632 )      (5,787 )      (5,324 )      (2,541 )      (680 )      (8,545 ) 

Recoveries credited to allowance

     573       114       272       959       1,270       223       366       1,859  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net charge-offs

     (1,780 )      (2,688 )      (360 )      (4,828 )      (4,054 )      (2,318 )      (314 )      (6,686 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

   $ 17,707     $ 7,498     $ 630     $ 25,835     $ 18,504     $ 7,133     $ 770     $ 26,407  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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:

 

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

Impaired loans with no related allowance:

                                                

Commercial loans

                                                

Construction, development, and other land

   $ 1,556     $ 2,306     $ —       $ 661     $ 661     $ —    

Commercial and industrial

     836       836       —         114       127       —    

Multi-family residential

     365       365       —         278       278       —    

Single family non-owner occupied

     —         —         —         1,206       1,244       —    

Non-farm, non-residential

     2,351       2,405       —         1,616       1,647       —    

Agricultural

     —         —         —         —         —         —    

Farmland

     —         —         —         258       258       —    

Consumer real estate loans

                                                

Home equity lines

     276       277       —         368       378       —    

Single family owner occupied

     1,706       1,875       —         2,428       2,508       —    

Owner occupied construction

     —         —         —         —         —         —    

Consumer and other loans

                                                

Consumer loans

     —         —         —         6       6       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with no allowance

     7,090       8,064       —         6,935       7,107       —    
             

Impaired loans with a related allowance:

                                                

Commercial loans

                                                

Construction, development, and other land

     —         —         —         112       112       4  

Commercial and industrial

     3,293       8,273       3,293       4,031       4,069       2,048  

Multi-family residential

     386       398       26       —         —         —    

Single family non-owner occupied

     1,237       1,290       661       2,232       2,232       124  

Non-farm, non-residential

     6,287       6,743       1,256       5,317       5,480       1,819  

Agricultural

     —         —         —         —         —         —    

Farmland

     744       744       159       —         —         —    

Consumer real estate loans

                                                

Home equity lines

     —         —         —         —         —         —    

Single family owner occupied

     4,124       4,228       931       5,529       5,612       1,203  

Owner occupied construction

     —         —         —         —         —         —    

Consumer and other loans

                                                

Consumer loans

     —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with an allowance

     16,071       21,676       6,326       17,221       17,505       5,198  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 23,161     $ 29,740     $ 6,326     $ 24,156     $ 24,612     $ 5,198  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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

Impaired loans with no related allowance:

                                

Commercial loans

                                

Construction, development, and other land

   $ 784     $ —       $ 1,296     $ —    

Commercial and industrial

     449       3       559       13  

Multi-family residential

     591       —         1,146       4  

Single family non-owner occupied

     954       4       524       29  

Non-farm, non-residential

     1,584       41       2,872       65  

Agricultural

     —         —         —         —    

Farmland

     372       —         508       —    

Consumer real estate loans

                                

Home equity lines

     321       —         592       20  

Single family owner occupied

     4,456       38       5,727       113  

Owner occupied construction

     —         —         1       —    

Consumer and other loans

                                

Consumer loans

     —         —         26       —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with no allowance

     9,511       86       13,251       244  
         

Impaired loans with a related allowance:

                                

Commercial loans

                                

Construction, development, and other land

     55       —         55       1  

Commercial and industrial

     3,600       —         3,662       163  

Multi-family residential

     193       —         1,309       —    

Single family non-owner occupied

     2,066       —         619       57  

Non-farm, non-residential

     6,454       90       5,802       291  

Agricultural

     —         —         —         —    

Farmland

     372       —         372       —    

Consumer real estate loans

                                

Home equity lines

     125       —         83       —    

Single family owner occupied

     3,355       15       4,827       66  

Owner occupied construction

     —         —         —         —    

Consumer and other loans

                                

Consumer loans

     —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with an allowance

     16,220       105       16,729       578  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 25,731     $ 191     $ 29,980     $ 822  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

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

Impaired loans with no related allowance:

                                

Commercial loans

                                

Construction, development, and other land

   $ 83     $ —       $ 1,538     $ 1  

Commercial and industrial

     221       4       2,791       4  

Multi-family residential

     962       10       1,370       24  

Single family non-owner occupied

     2,481       10       1,673       29  

Non-farm, non-residential

     1,059       6       1,894       16  

Agricultural

     —         —         —         —    

Farmland

     333       —         112       —    

Consumer real estate loans

                                

Home equity lines

     398       4       470       12  

Single family owner occupied

     1,617       21       1,374       26  

Owner occupied construction

     —         —         80       3  

Consumer and other loans

                                

Consumer loans

     66       1       25       1  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with no allowance

     7,220       56       11,327       116  
         

Impaired loans with a related allowance:

                                

Commercial loans

                                

Construction, development, and other land

     381       4       293       7  

Commercial and industrial

     4,066       8       1,802       16  

Multi-family residential

     591       —         627       —    

Single family non-owner occupied

     2,258       27       2,345       81  

Non-farm, non-residential

     6,430       98       3,709       109  

Agricultural

     —         —         —         —    

Farmland

     —         —         111       —    

Consumer real estate loans

                                

Home equity lines

     335       —         145       —    

Single family owner occupied

     6,064       49       5,847       141  

Owner occupied construction

     —         —         —         —    

Consumer and other loans

                                

Consumer loans

     —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans with an allowance

     20,125       186       14,879       354  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 27,345     $ 242     $ 26,206     $ 470  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

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 September 30, 2012, and December 31, 2011.

 

                                                 
    September 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, development, and other land

   $ 1,556     $ —       $ 70,081     $ 1,230     $ 19,278     $ —    

Commercial and industrial

     4,121       3,285       96,367       1,339       3,910       8  

Multi-family residential

     386       26       74,669       1,739       4,260       —    

Single family non-owner occupied

     1,602       661       129,658       2,907       4,086       —    

Non-farm, non-residential

     8,638       1,256       457,891       4,966       33,553       —    

Agricultural

     —         —         1,780       19       2       —    

Farmland

     744       159       36,270       327       1,055       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total commercial loans

     17,047       5,387       866,716       12,527       66,144       8  

Consumer real estate loans

                                                

Home equity lines

     276       —         132,626       1,325       66,333       —    

Single family owner occupied

     5,830       931       491,877       4,781       13,737       —    

Owner occupied construction

     —         —         15,846       246       1,212       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total consumer real estate loans

     6,106       931       640,349       6,352       81,282       —    

Consumer and other loans

                                                

Consumer loans

     —         —         79,486       630       911       —    

Other

     —         —         5,569       —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total consumer and other loans

     —         —         85,055       630       911       —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans

   $ 23,153     $ 6,318     $ 1,592,120     $ 19,509     $ 148,337     $ 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, development, and other land

   $ 773     $ 4     $ 60,846     $ 1,888     $ 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 September 30, 2012, and December 31, 2011. There were no covered loans at December 31, 2011.

 

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

Non-covered loans

                                                

Commercial loans

                                                

Construction, development, and other land

   $ 46,390     $ 4,441     $ 11,107     $ 93     $ —       $ 62,031  

Commercial and industrial

     86,312       2,087       3,911       5,112       —         97,422  

Multi-family residential

     67,188       3,863       4,705       —         —         75,756  

Single family non-owner occupied

     112,704       5,969       15,624       1,049       —         135,346  

Non-farm, non-residential

     397,614       19,221       32,077       447       —         449,359  

Agricultural

     1,430       7       37       —         —         1,474  

Farmland

     32,803       1,980       1,952       —         —         36,735  

Consumer real estate loans

                                                

Home equity lines

     106,133       1,798       3,947       —         —         111,878  

Single family owner occupied

     437,158       9,360       28,466       —         —         474,984  

Owner occupied construction

     15,076       —         —         —         —         15,076  

Consumer and other loans

                                                

Consumer loans

     74,661       794       539       9       —         76,003  

Other

     5,538       13       18       —         —         5,569  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total non-covered loans

   $ 1,383,007     $ 49,533     $ 102,383     $ 6,710     $ —       $ 1,541,633  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

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

Covered loans

                                                

Commercial loans

                                                

Construction, development, and other land

   $ 12,470     $ 5,966     $ 10,354     $ 95     $ —       $ 28,885  

Commercial and industrial

     3,802       1,300       (15 )      1,889       —         6,976  

Multi-family residential

     2,423       —         1,136       —         —         3,559  

Single family non-owner occupied

     —         —         —         —         —         —    

Non-farm, non-residential

     27,100       7,899       15,646       78       —         50,723  

Agricultural

     306       —         2       —         —         308  

Farmland

     (134 )      1,225       243       —         —         1,334  

Consumer real estate loans

                                                

Home equity lines

     85,232       1,281       820       25       —         87,358  

Single family owner occupied

     24,218       4,392       7,485       364       —         36,459  

Owner occupied construction

     709       284       989       —         —         1,982  

Consumer and other loans

                                                

Consumer loans

     3,454       629       236       74       —         4,393  

Other

     —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total covered loans

   $ 159,580     $ 22,976     $ 36,896     $ 2,525     $ —       $ 221,977  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   
    December 31, 2011  
(Amounts in thousands)   Pass     Special
  Mention  		       Substandard         Doubtful           Loss         Total  

Commercial loans

                                                

Construction, development, and other land

   $ 54,162     $ 5,644     $ 1,962     $ —       $ —       $ 61,768  

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 September 30, 2012, and December 31, 2011. Loans acquired through business combinations, for which a discount exists, are generally not considered to be nonaccrual as a result of the accretion of the discount which is based on the expected cash flows of the loans.

 

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

Commercial loans

                

Construction, development, and other land

   $ 480     $ 793  

Commercial and industrial

     3,469       3,905  

Multi-family residential

     469       341  

Single family non-owner occupied

     655       1,639  

Non-farm, non-residential

     9,397       8,063  

Agricultural

     4       —    

Farmland

     744       271  

Consumer real estate loans

                

Home equity lines

     817       516  

Single family owner occupied

     10,371       8,255  

Owner occupied construction

     —         1  

Consumer and other loans

                

Consumer loans

     86       52  

Other

     14       —    
   

 

 

    

 

 

  

Total

     26,506       23,836  

Acquired impaired loans

     8       651  
   

 

 

    

 

 

  

Total nonaccrual loans

   $ 26,514     $ 24,487  
   

 

 

    

 

 

  

The following tables present the aging of past due loans, by loan class, at September 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 September 30, 2012, or December 31, 2011. Acquired loans that are past due continue to accrue interest through the accretable yield under the accretion method of accounting and therefore are not considered to be nonaccrual.

 

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

Non-covered loans

                                                

Commercial loans

                                                

Construction, development, and other land

   $ 134     $ 6     $ 480     $ 620     $ 61,410     $ 62,030  

Commercial and industrial

     464       346       3,477       4,287       93,135       97,422  

Multi-family residential

     152       —         386       538       75,218       75,756  

Single family non-owner occupied

     882       310       4,106       5,298       130,048       135,346  

Non-farm, non-residential

     3,016       1,278       9,074       13,368       435,991       449,359  

Agricultural

     —         19       3       22       1,452       1,474  

Farmland

     173       —         —         173       36,562       36,735  

Consumer real estate loans

                                                

Home equity lines

     613       239       587       1,439       110,438       111,877  

Single family owner occupied

     4,502       1,334       5,366       11,202       463,783       474,985  

Owner occupied construction

     —         —         139       139       14,937       15,076  

Consumer and other loans

                                                

Consumer loans

     694       55       99       848       75,156       76,004  

Other

     —         —         —         —         5,569       5,569  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total non-covered loans

   $ 10,630     $ 3,587     $ 23,717     $ 37,934     $ 1,503,699     $ 1,541,633  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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

Covered loans

                                                

Commercial loans

                                                

Construction, development, and other land

   $ 905     $ 386     $ 602     $ 1,893     $ 26,992     $ 28,885  

Commercial and industrial

     80       30       —         110       6,866       6,976  

Multi-family residential

     —         —         —         —         3,559       3,559  

Single family non-owner occupied

     —         —         —         —         —         —    

Non-farm, non-residential

     137       731       357       1,225       49,498       50,723  

Agricultural

     10       —         —         10       298       308  

Farmland

     —         —         —         —         1,334       1,334  

Consumer real estate loans

                                                

Home equity lines

     241       49       417       707       86,651       87,358  

Single family owner occupied

     580       78       299       957       35,502       36,459  

Owner occupied construction

     —         —         61       61       1,921       1,982  

Consumer and other loans

                                                

Consumer loans

     —         —         —         —         4,393       4,393  

Other

     —         —         —         —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total covered loans

   $ 1,953     $ 1,274     $ 1,736     $ 4,963     $ 217,014     $ 221,977  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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

Commercial loans

                                                

Construction, development, and other land

   $ 253     $ —       $ 987     $ 1,240     $ 60,528     $ 61,768  

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 $6.86 million at September 30, 2012, and $9.45 million at December 31, 2011, which are reported net of those on nonaccrual status of $2.18 million and $3.27 million, respectively. Accruing nonperforming TDRs amounted to $121 thousand, or 1.76% of total accruing TDRs at September 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 September 30, 2012, and December 31, 2011, respectively. Interest income recognized on TDRs for the three and nine months ended September 30, 2012, totaled $62 thousand and $237 thousand, respectively. Interest income recognized on TDRs for the three and nine months ended September 30, 2011, totaled $79 thousand and $428 thousand, respectively. There were no covered loans recorded as TDRs at September 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 nine months ended September 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 September 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 Single family owner occupied

     —       $ —       $ —         1     $ 72     $ 72  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     —       $ —       $ —         1     $ 72     $ 72  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   
    Nine Months Ended September 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

     —         —         —         4       798       775  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     —         —         —         6       1,278       1,255  

Extended payment term

                                                

Single family owner occupied

     1       351       318       —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     1       351       318       —         —         —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     1     $ 351     $ 318       6     $ 1,278     $ 1,255  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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