Note 4.

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.

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.

Purchased performing loans are recorded at fair value and include credit and interest rate marks associated with acquisition accounting adjustments, as accounted for under the contractual cash flow method of accounting. The fair value adjustment is accreted as an adjustment to yield over the estimated contractual lives of the loans. There is no allowance for loan losses established at the acquisition date for acquired performing loans. A provision for loan losses is recorded for any credit deterioration in these loans subsequent to the acquisition. In accordance with GAAP, there was no carryover of previously established allowance for loan losses on acquired portfolios.

The following tables detail activity within the allowance for loan losses, by portfolio segment, for the dates indicated:


	Three Months Ended June 30,
	2013												2012
	Commercial			Consumer Real Estate			Consumer and Other			Total			Commercial			Consumer Real Estate			Consumer and Other			Total
(Amounts in thousands)
Beginning balance	$	17,250		$	7,003		$	597		$	24,850		$	17,865		$	7,259		$	676		$	25,800
Provision for loan losses		2,304			749			152			3,205			950			623			47			1,620
Loans charged off		(3,446	)		(1,282	)		(278	)		(5,006	)		(836	)		(619	)		(157	)		(1,612	)
Recoveries credited to allowance		(227	)		188			112			73			278			9			76			363

Net charge-offs		(3,673	)		(1,094	)		(166	)		(4,933	)		(558	)		(610	)		(81	)		(1,249	)

Ending balance	$	15,881		$	6,658		$	583		$	23,122		$	18,257		$	7,272		$	642		$	26,171


	Six Months Ended June 30,
	2013												2012
	Commercial			Consumer Real Estate			Consumer and Other			Total			Commercial			Consumer Real Estate			Consumer and Other			Total
(Amounts in thousands)
Beginning balance	$	17,267		$	7,906		$	597		$	25,770		$	17,752		$	7,711		$	742		$	26,205
Provision for loan losses		2,787			1,229			331			4,347			1,216			1,237			89			2,542
Loans charged off		(4,229	)		(2,678	)		(858	)		(7,765	)		(1,086	)		(1,727	)		(361	)		(3,174	)
Recoveries credited to allowance		56			201			513			770			375			51			172			598

Net charge-offs		(4,173	)		(2,477	)		(345	)		(6,995	)		(711	)		(1,676	)		(189	)		(2,576	)

Ending balance	$	15,881		$	6,658		$	583		$	23,122		$	18,257		$	7,272		$	642		$	26,171

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.

During the quarterly cash flow analysis, one of the Company’s seven purchased credit impaired loan pools was deemed impaired. The pool had a recorded investment of $3.57 million, current unpaid principal balance of $4.14 million, and cumulative impairment of $177 thousand at June 30, 2013. For the three months ended June 30, 2013, the Company had an average recorded investment of $3.59 million and recognized interest income of $34 thousand in connection with the impaired loan pool. For the six months ended June 30, 2013, the Company had an average recorded investment of $11.86 million and recognized interest income of $117 thousand in connection with impaired loan pools. These amounts are not included in the tables below. 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, 2013						December 31, 2012
(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	$	4,347	$	6,832	$	—	$	2,916	$	2,916	$	—
Commercial and industrial		1,844		1,897		—		284		284		—
Multi-family residential		20		37		—		—		—		—
Single family non-owner occupied		1,016		2,292		—		383		684		—
Non-farm, non-residential		8,127		9,062		—		5,282		5,362		—
Agricultural		—		—		—		—		—		—
Farmland		361		361		—		—		—		—
Consumer real estate loans
Home equity lines		659		687		—		276		277		—
Single family owner occupied		2,213		2,834		—		277		383		—
Owner occupied construction		50		61		—		—		—		—
Consumer and other loans
Consumer loans		8		12		—		—		—		—

Total impaired loans with no allowance		18,645		24,075		—		9,418		9,906		—

Impaired loans with a related allowance:
Commercial loans
Construction, development, and other land		1,094		1,094		164		—		—		—
Commercial and industrial		3,592		8,732		3,293		3,318		8,502		3,192
Multi-family residential		—		—		—		378		397		18
Single family non-owner occupied		1,024		1,097		179		2,411		2,460		996
Non-farm, non-residential		1,863		2,009		392		2,781		2,958		358
Agricultural		—		—		—		—		—		—
Farmland		—		—		—		—		—		—
Consumer real estate loans
Home equity lines		217		230		222		223		230		223
Single family owner occupied		3,228		3,374		593		4,673		4,903		806
Owner occupied construction		—		—		—		—		—		—
Consumer and other loans
Consumer loans		—		—		—		—		—		—

Total impaired loans with an allowance		11,018		16,536		4,843		13,784		19,450		5,593

Total impaired loans	$	29,663	$	40,611	$	4,843	$	23,202	$	29,356	$	5,593


	For the Three Months Ended June 30, 2013				For the Six Months Ended June 30, 2013
(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	$	6,828	$	211	$	4,511	$	297
Commercial and industrial		1,903		—		1,251		16
Multi-family residential		37		1		36		5
Single family non-owner occupied		2,281		14		1,561		172
Non-farm, non-residential		9,068		84		7,512		508
Agricultural		—		—		—		—
Farmland		361		—		225		12
Consumer real estate loans
Home equity lines		708		—		503		49
Single family owner occupied		2,867		—		1,707		110
Owner occupied construction		61		5		31		5
Consumer and other loans
Consumer loans		12		—		6		—

Total impaired loans with no allowance		24,126		315		17,343		1,174

Impaired loans with a related allowance:
Commercial loans
Construction, development, and other land		1,095		—		1,882		133
Commercial and industrial		3,592		—		3,350		—
Multi-family residential		—		—		188		7
Single family non-owner occupied		1,098		—		1,413		6
Non-farm, non-residential		2,011		—		2,383		40
Agricultural		—		—		—		—
Farmland		—		—		—		—
Consumer real estate loans
Home equity lines		230		—		226		4
Single family owner occupied		3,377		4		3,931		26
Owner occupied construction		—		—		—		—
Consumer and other loans
Consumer loans		—		—		—		—

Total impaired loans with an allowance		11,403		4		13,373		216

Total impaired loans	$	35,529	$	319	$	30,716	$	1,390


	For the Three Months Ended June 30, 2012				For the Six Months Ended June 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	$	11	$	—	$	30	$	—
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, development, and other land		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

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, 2013, and December 31, 2012. Impairment related to the Company’s purchased credit impaired loan pools is excluded from the following tables.


	June 30, 2013
(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	$	5,441	$	164	$	57,788	$	1,483	$	12,036	$	—
Commercial and industrial		5,428		3,285		89,627		1,343		1,805		8
Multi-family residential		20		—		61,330		1,086		620		—
Single family non-owner occupied		2,040		179		133,829		3,353		8,088		—
Non-farm, non-residential		9,990		392		456,938		4,242		29,496		—
Agricultural		—		—		2,424		27		—		—
Farmland		361		—		34,366		319		861		—

Total commercial loans		23,280		4,020		836,302		11,853		52,906		8
Consumer real estate loans
Home equity lines		876		222		137,651		1,346		48,425		—
Single family owner occupied		5,441		593		481,714		4,317		6,524		—
Owner occupied construction		50		—		21,760		180		1,104		—

Total consumer real estate loans		6,367		815		641,125		5,843		56,053		—
Consumer and other loans
Consumer loans		8		—		70,987		583		718		—
Other		—		—		3,752		—		—		—

Total consumer and other loans		8		—		74,739		583		718		—

Total loans	$	29,655	$	4,835	$	1,552,166	$	18,279	$	109,677	$	8


	December 31, 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	$	2,916	$	—	$	55,369	$	1,214	$	25,744	$	—
Commercial and industrial		3,602		3,192		88,540		1,159		3,544		8
Multi-family residential		378		18		67,278		1,612		649		—
Single family non-owner occupied		2,794		858		134,323		3,509		10,223		—
Non-farm, non-residential		8,063		358		451,240		4,901		38,072		—
Agricultural		—		—		1,852		22		1		—
Farmland		—		—		34,779		416		882		—

Total commercial loans		17,753		4,426		833,381		12,833		79,115		8
Consumer real estate loans
Home equity lines		499		223		139,706		1,351		50,343		—
Single family owner occupied		4,950		944		483,553		5,051		8,005		—
Owner occupied construction		—		—		16,768		337		1,099		—

Total consumer real estate loans		5,449		1,167		640,027		6,739		59,447		—
Consumer and other loans
Consumer loans		—		—		81,037		597		800		—
Other		—		—		5,666		—		—		—

Total consumer and other loans		—		—		86,703		597		800		—

Total loans	$	23,202	$	5,593	$	1,560,111	$	20,169	$	139,362	$	8

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 $3.0 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 aggregates purchased credit impaired loans with common risk characteristics into the following loan pools: construction and development, commercial and industrial, commercial real estate, consumer, home equity lines of credit, residential real estate – 1st lien, residential real estate – 2nd lien, and lines of credit. However, these loan pools are disaggregated in the following tables for disclosure purposes.

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, 2013, and December 31, 2012. Non-covered special mention and substandard loans declined between December 31, 2012, and June 30, 2013, due primarily to loan work out activity across the portfolio coupled with continued credit improvement in the Peoples’ acquired loan portfolio.


	June 30, 2013
(Amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Non-covered loans
Commercial loans
Construction, development, and other land	$	40,067	$	1,916	$	9,302	$	913	$	—	$	52,198
Commercial and industrial		82,560		1,888		4,370		3,630		—		92,448
Multi-family residential		54,602		4,118		816		—		—		59,536
Single family non-owner occupied		117,582		5,024		10,722		879		—		134,207
Non-farm, non-residential		420,792		11,864		22,449		119		—		455,224
Agricultural		2,367		14		12		—		—		2,393
Farmland		28,806		1,584		3,964		—		—		34,354
Consumer real estate loans
Home equity lines		103,983		2,027		3,592		218		—		109,820
Single family owner occupied		436,893		8,798		27,521		—		—		473,212
Owner occupied construction		21,276		—		—		—		—		21,276
Consumer and other loans
Consumer loans		67,721		896		381		4		—		69,002
Other		3,739		1		12		—		—		3,752

Total non-covered loans	$	1,380,388	$	38,130	$	83,141	$	5,763	$	—	$	1,507,422

Covered loans
Commercial loans
Construction, development, and other land	$	12,194	$	1,388	$	9,357	$	128	$	—	$	23,067
Commercial and industrial		3,619		418		350		25		—		4,412
Multi-family residential		1,814		—		620		—		—		2,434
Single family non-owner occupied		4,806		93		4,837		14		—		9,750
Non-farm, non-residential		17,692		2,605		20,547		356		—		41,200
Agricultural		31		—		—		—		—		31
Farmland		828		309		97		—		—		1,234
Consumer real estate loans
Home equity lines		16,502		11,162		49,443		25		—		77,132
Single family owner occupied		14,314		175		5,795		183		—		20,467
Owner occupied construction		380		—		1,258		—		—		1,638
Consumer and other loans
Consumer loans		2,067		—		644		—		—		2,711
Other		—		—		—		—		—		—

Total covered loans	$	74,247	$	16,150	$	92,948	$	731	$	—	$	184,076


	December 31, 2012
(Amounts in thousands)	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Non-covered loans
Commercial loans
Construction, development, and other land	$	41,850	$	1,497	$	13,546	$	541	$	—	$	57,434
Commercial and industrial		77,573		2,506		4,821		3,838		—		88,738
Multi-family residential		60,161		4,043		1,490		—		—		65,694
Single family non-owner occupied		112,562		5,938		16,092		1,320		—		135,912
Non-farm, non-residential		399,907		15,975		32,808		120		—		448,810
Agricultural		1,657		19		33		—		—		1,709
Farmland		28,887		2,262		3,421		—		—		34,570
Consumer real estate loans
Home equity lines		104,750		2,739		3,592		—		—		111,081
Single family owner occupied		436,587		9,599		27,319		—		42		473,547
Owner occupied construction		15,841		382		—		—		—		16,223
Consumer and other loans
Consumer loans		76,787		867		501		8		—		78,163
Other		5,657		8		1		—		—		5,666

Total non-covered loans	$	1,362,219	$	45,835	$	103,624	$	5,827	$	42	$	1,517,547

Covered loans
Commercial loans
Construction, development, and other land	$	6,463	$	2,120	$	17,834	$	178	$	—	$	26,595
Commercial and industrial		6,225		445		197		81		—		6,948
Multi-family residential		1,962		—		649		—		—		2,611
Single family non-owner occupied		6,065		2,223		3,015		125		—		11,428
Non-farm, non-residential		23,855		5,477		19,189		44		—		48,565
Agricultural		143		—		1		—		—		144
Farmland		935		—		156		—		—		1,091
Consumer real estate loans
Home equity lines		16,323		11,981		53,116		25		—		81,445
Single family owner occupied		16,011		927		5,786		237		—		22,961
Owner occupied construction		484		—		1,160		—		—		1,644
Consumer and other loans
Consumer loans		2,987		562		125		—		—		3,674
Other		—		—		—		—		—		—

Total covered loans	$	81,453	$	23,735	$	101,228	$	690	$	—	$	207,106

Nonaccrual loans, presented by loan class, consisted of the following at June 30, 2013, and December 31, 2012. Loans acquired with credit deterioration 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.


	June 30, 2013						December 31, 2012
(Amounts in thousands)	Non-covered		Covered		Total		Non-covered		Covered		Total
Commercial loans
Construction, development, and other land	$	5,240	$	1,402	$	6,642	$	405	$	1,990	$	2,395
Commercial and industrial		5,453		72		5,525		3,912		35		3,947
Multi-family residential		20		—		20		378		—		378
Single family non-owner occupied		3,378		26		3,404		7,071		21		7,092
Non-farm, non-residential		7,039		665		7,704		5,938		951		6,889
Agricultural		—		—		—		2		—		2
Farmland		444		—		444		—		—		—
Consumer real estate loans
Home equity lines		1,305		543		1,848		872		436		1,308
Single family owner occupied		6,160		1,011		7,171		5,219		831		6,050
Owner occupied construction		—		170		170		—		59		59
Consumer and other loans
Consumer loans		86		—		86		126		—		126
Other		—		—		—		—		—		—

Total		29,125		3,889		33,014		23,923		4,323		28,246
Acquired impaired loans		—		—		—		8		—		8

Total nonaccrual loans	$	29,125	$	3,889	$	33,014	$	23,931	$	4,323	$	28,254

The following tables present the aging of past due loans, by loan class, at June 30, 2013, and December 31, 2012. 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, 2013, and December 31, 2012. 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.


	June 30, 2013
	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, development, and other land	$	322	$	194	$	4,964	$	5,480	$	46,718	$	52,198
Commercial and industrial		228		37		1,280		1,545		90,903		92,448
Multi-family residential		—		—		20		20		59,516		59,536
Single family non-owner occupied		631		679		1,306		2,616		131,591		134,207
Non-farm, non-residential		1,115		914		4,648		6,677		448,547		455,224
Agricultural		11		—		—		11		2,382		2,393
Farmland		511		83		—		594		33,760		34,354
Consumer real estate loans
Home equity lines		631		39		942		1,612		108,208		109,820
Single family owner occupied		4,129		468		1,768		6,365		466,847		473,212
Owner occupied construction		—		—		—		—		21,276		21,276
Consumer and other loans
Consumer loans		390		30		54		474		68,528		69,002
Other		3		—		—		3		3,749		3,752

Total non-covered loans	$	7,971	$	2,444	$	14,982	$	25,397	$	1,482,025	$	1,507,422


	June 30, 2013
	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, development, and other land	$	101	$	—	$	700	$	801	$	22,266	$	23,067
Commercial and industrial		116		21		—		137		4,275		4,412
Multi-family residential		—		—		—		—		2,434		2,434
Single family non-owner occupied		—		93		26		119		9,631		9,750
Non-farm, non-residential		—		—		627		627		40,573		41,200
Agricultural		—		—		—		—		31		31
Farmland		—		309		—		309		925		1,234
Consumer real estate loans
Home equity lines		85		9		162		256		76,876		77,132
Single family owner occupied		884		81		455		1,420		19,047		20,467
Owner occupied construction		—		—		170		170		1,468		1,638
Consumer and other loans
Consumer loans		333		—		—		333		2,378		2,711
Other		—		—		—		—		—		—

Total covered loans	$	1,519	$	513	$	2,140	$	4,172	$	179,904	$	184,076


	December 31, 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, development, and other land	$	344	$	—	$	188	$	532	$	56,902	$	57,434
Commercial and industrial		387		84		1,432		1,903		86,835		88,738
Multi-family residential		624		—		—		624		65,070		65,694
Single family non-owner occupied		1,841		1,348		3,715		6,904		129,008		135,912
Non-farm, non-residential		2,702		936		3,621		7,259		441,551		448,810
Agricultural		—		—		—		—		1,709		1,709
Farmland		216		196		—		412		34,158		34,570
Consumer real estate loans
Home equity lines		315		93		495		903		110,178		111,081
Single family owner occupied		6,564		1,176		1,644		9,384		464,163		473,547
Owner occupied construction		382		—		—		382		15,841		16,223
Consumer and other loans
Consumer loans		715		73		47		835		77,328		78,163
Other		—		—		—		—		5,666		5,666

Total non-covered loans	$	14,090	$	3,906	$	11,142	$	29,138	$	1,488,409	$	1,517,547


	December 31, 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, development, and other land	$	252	$	161	$	1,121	$	1,534	$	25,061	$	26,595
Commercial and industrial		45		—		—		45		6,903		6,948
Multi-family residential		—		—		—		—		2,611		2,611
Single family non-owner occupied		8		—		21		29		11,399		11,428
Non-farm, non-residential		501		—		927		1,428		47,137		48,565
Agricultural		—		—		—		—		144		144
Farmland		6		—		—		6		1,085		1,091
Consumer real estate loans
Home equity lines		217		112		204		533		80,912		81,445
Single family owner occupied		413		135		475		1,023		21,938		22,961
Owner occupied construction		—		—		59		59		1,585		1,644
Consumer and other loans
Consumer loans		—		—		—		—		3,674		3,674
Other		—		—		—		—		—		—

Total covered loans	$	1,442	$	408	$	2,807	$	4,657	$	202,449	$	207,106

The Company’s troubled debt restructurings (“TDRs”) totaled $11.20 million at June 30, 2013, and $12.05 million at December 31, 2012, which are reported net of those on nonaccrual status of $2.77 million and $3.83 million, respectively. Accruing nonperforming TDRs amounted to $276 thousand, or 2.46% of total accruing TDRs at June 30, 2013, and $6.01 million, or 49.88% of total TDRs at December 31, 2012. The allowance for loan losses included reserves related to TDRs of $2.00 million and $1.87 million at June 30, 2013, and December 31, 2012, respectively. Interest income recognized on TDRs for the three and six months ended June 30, 2013, totaled $132 thousand and $238 thousand, respectively. Interest income recognized on TDRs for the three and six months ended June 30, 2012, totaled $81 thousand and $175 thousand, respectively. There were no covered loans recorded as TDRs at June 30, 2013. A loan acquired with credit deterioration through a business combination, for which a discount exists, is generally not considered a TDR as long as the loan remains in the loan pool.

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 either the collateral or net present value method, whichever is most applicable. 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 table presents information for loans modified as TDRs that were restructured during the three and six months ended June 30, 2013 and 2012 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,
	2013						2012
(Amounts in thousands)	Total Contracts		Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Total Contracts		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Extended payment term
Single family owner occupied		—		—		—		1	$	351	$	319

Total		—	$	—	$	—		1	$	351	$	319


	Six Months Ended June 30,
	2013						2012
(Amounts in thousands)	Total Contracts		Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Total Contracts		Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Extended payment term
Single family owner occupied		—		—		—		1	$	351	$	319

Total		—	$	—	$	—		1	$	351	$	319

There were no payment defaults on loans modified as TDRs during the three and six months ended June 30, 2013 or 2012 that were restructured within the previous 12 months.