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Allowance for Loan Losses and Credit Quality Indicators | 9 Months Ended
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Sep. 30, 2013
Allowance for Loan Losses and Credit Quality Indicators | 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 the 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 is removed from a group of loans with similar risk characteristics that are not classified to evaluate the removed loan collectively in a group of adversely classified 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. In accordance with GAAP, there was no carryover of previously established allowance for loan losses on acquired portfolios. A provision for loan losses is recorded for any credit deterioration in these acquired loans subsequent to the acquisition. The provision established for covered acquired impaired loans is offset by an adjustment to the FDIC loss share receivable to reflect the indemnified portion of the post-acquisition exposure. The following tables detail activity within the allowance for loan losses, by portfolio segment, for the dates indicated:
|  | Three Months Ended September 30, |
|  | 2013 |  |  | 2012 |
|  |  |  |  | Consumer |  |  | Consumer |  |  |  |  |  |  |  |  | Consumer |  |  | Consumer |  |  |  |
|  | Commercial |  |  | Real Estate |  |  | and Other |  |  | Total |  |  | Commercial |  |  | Real Estate |  |  | and Other |  |  | Total |
(Amounts in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance excluding acquired impaired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 15,873 |  |  | $ | 6,658 |  |  | $ | 583 |  |  | $ | 23,114 |  |  | $ | 18,249 |  |  | $ | 7,272 |  |  | $ | 642 |  |  | $ | 26,163 |
Provision for loan losses charged to operations |  |  | 1,551 |  |  |  | (807 | ) |  |  | 1,366 |  |  |  | 2,110 |  |  |  | 436 |  |  |  | 1,289 |  |  |  | 191 |  |  |  | 1,916 |
Loans charged off |  |  | (1,503 | ) |  |  | 1,035 |  |  |  | (1,487 | ) |  |  | (1,955 | ) |  |  | (1,184 | ) |  |  | (1,126 | ) |  |  | (303 | ) |  |  | (2,613 | )
Recoveries credited to allowance |  |  | 136 |  |  |  | 30 |  |  |  | 187 |  |  |  | 353 |  |  |  | 198 |  |  |  | 63 |  |  |  | 100 |  |  |  | 361 |
Net charge-offs |  |  | (1,367 | ) |  |  | 1,065 |  |  |  | (1,300 | ) |  |  | (1,602 | ) |  |  | (986 | ) |  |  | (1,063 | ) |  |  | (203 | ) |  |  | (2,252 | )
Ending balance |  | $ | 16,057 |  |  | $ | 6,916 |  |  | $ | 649 |  |  | $ | 23,622 |  |  | $ | 17,699 |  |  | $ | 7,498 |  |  | $ | 630 |  |  | $ | 25,827 |
Acquired impaired allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 8 |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |  |  | $ | 8 |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |
Acquired impaired provision |  |  | 158 |  |  |  | 877 |  |  |  | — |  |  |  | 1,035 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Benefit attributable to FDIC indemnificaton asset |  |  | (242 | ) |  |  | (570 | ) |  |  | — |  |  |  | (812 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Provision for loan losses charged to operations |  |  | (84 | ) |  |  | 307 |  |  |  | — |  |  |  | 223 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Provision for loan losses recorded through the FDIC indemnificaton asset |  |  | 242 |  |  |  | 570 |  |  |  | — |  |  |  | 812 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loans charged off |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Recoveries credited to allowance |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Ending balance |  | $ | 166 |  |  | $ | 877 |  |  | $ | — |  |  | $ | 1,043 |  |  | $ | 8 |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |
Total allowance for loan losses |  | $ | 16,223 |  |  | $ | 7,793 |  |  | $ | 649 |  |  | $ | 24,665 |  |  | $ | 17,707 |  |  | $ | 7,498 |  |  | $ | 630 |  |  | $ | 25,835 |
|  | Nine Months Ended September 30, |
|  | 2013 |  |  | 2012 |
|  |  |  |  | Consumer |  |  | Consumer |  |  |  |  |  |  |  |  | Consumer |  |  | Consumer |  |  |  |
|  | Commercial |  |  | Real Estate |  |  | and Other |  |  | Total |  |  | Commercial |  |  | Real Estate |  |  | and Other |  |  | Total |
(Amounts in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance excluding acquired impaired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 17,259 |  |  | $ | 7,906 |  |  | $ | 597 |  |  | $ | 25,762 |  |  | $ | 17,551 |  |  | $ | 7,711 |  |  | $ | 742 |  |  | $ | 26,004 |
Provision for loan losses charged to operations |  |  | 4,338 |  |  |  | 422 |  |  |  | 1,697 |  |  |  | 6,457 |  |  |  | 1,928 |  |  |  | 2,475 |  |  |  | 248 |  |  |  | 4,651 |
Loans charged off |  |  | (5,732 | ) |  |  | (1,643 | ) |  |  | (2,345 | ) |  |  | (9,720 | ) |  |  | (2,353 | ) |  |  | (2,802 | ) |  |  | (632 | ) |  |  | (5,787 | )
Recoveries credited to allowance |  |  | 192 |  |  |  | 231 |  |  |  | 700 |  |  |  | 1,123 |  |  |  | 573 |  |  |  | 114 |  |  |  | 272 |  |  |  | 959 |
Net charge-offs |  |  | (5,540 | ) |  |  | (1,412 | ) |  |  | (1,645 | ) |  |  | (8,597 | ) |  |  | (1,780 | ) |  |  | (2,688 | ) |  |  | (360 | ) |  |  | (4,828 | )
Ending balance |  | $ | 16,057 |  |  | $ | 6,916 |  |  | $ | 649 |  |  | $ | 23,622 |  |  | $ | 17,699 |  |  | $ | 7,498 |  |  | $ | 630 |  |  | $ | 25,827 |
Acquired impaired allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 8 |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |  |  | $ | 201 |  |  | $ | — |  |  | $ | — |  |  | $ | 201 |
Acquired impaired provision |  |  | 158 |  |  |  | 877 |  |  |  | — |  |  |  | 1,035 |  |  |  | (193 | ) |  |  | — |  |  |  | — |  |  |  | (193 | )
Benefit attributable to FDIC indemnificaton asset |  |  | (242 | ) |  |  | (570 | ) |  |  | — |  |  |  | (812 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Provision for loan losses charged to operations |  |  | (84 | ) |  |  | 307 |  |  |  | — |  |  |  | 223 |  |  |  | (193 | ) |  |  | — |  |  |  | — |  |  |  | (193 | )
Provision for loan losses recorded through the FDIC indemnificaton asset |  |  | 242 |  |  |  | 570 |  |  |  | — |  |  |  | 812 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loans charged off |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Recoveries credited to allowance |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Ending balance |  | $ | 166 |  |  | $ | 877 |  |  | $ | — |  |  | $ | 1,043 |  |  | $ | 8 |  |  | $ | — |  |  | $ | — |  |  | $ | 8 |
Total allowance for loan losses |  | $ | 16,223 |  |  | $ | 7,793 |  |  | $ | 649 |  |  | $ | 24,665 |  |  | $ | 17,707 |  |  | $ | 7,498 |  |  | $ | 630 |  |  | $ | 25,835 |
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 loans considered to be impaired, excluding purchased credit impaired loans, and related information on those loans for the periods indicated:
|  | September 30, 2013 |  |  | December 31, 2012 |
|  |  |  |  | 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, development, and other land |  | $ | 4,229 |  |  | $ | 6,376 |  |  | $ | — |  |  | $ | 2,916 |  |  | $ | 2,916 |  |  | $ | — |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 284 |  |  |  | 284 |  |  |  | — |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Single family non-owner occupied |  |  | 289 |  |  |  | 317 |  |  |  | — |  |  |  | 383 |  |  |  | 684 |  |  |  | — |
Non-farm, non-residential |  |  | 7,408 |  |  |  | 8,192 |  |  |  | — |  |  |  | 5,282 |  |  |  | 5,362 |  |  |  | — |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland |  |  | 659 |  |  |  | 668 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 541 |  |  |  | 546 |  |  |  | — |  |  |  | 276 |  |  |  | 277 |  |  |  | — |
Single family owner occupied |  |  | 2,448 |  |  |  | 2,751 |  |  |  | — |  |  |  | 277 |  |  |  | 383 |  |  |  | — |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total impaired loans with no allowance |  |  | 15,574 |  |  |  | 18,850 |  |  |  | — |  |  |  | 9,418 |  |  |  | 9,906 |  |  |  | — |
Impaired loans with a related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  |  | 459 |  |  |  | 459 |  |  |  | 347 |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial and industrial |  |  | 4,743 |  |  |  | 10,084 |  |  |  | 3,648 |  |  |  | 3,318 |  |  |  | 8,502 |  |  |  | 3,192 |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 378 |  |  |  | 397 |  |  |  | 18 |
Single family non-owner occupied |  |  | 313 |  |  |  | 365 |  |  |  | 38 |  |  |  | 2,411 |  |  |  | 2,460 |  |  |  | 996 |
Non-farm, non-residential |  |  | 606 |  |  |  | 606 |  |  |  | 7 |  |  |  | 2,781 |  |  |  | 2,958 |  |  |  | 358 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 519 |  |  |  | 535 |  |  |  | 434 |  |  |  | 223 |  |  |  | 230 |  |  |  | 223 |
Single family owner occupied |  |  | 4,930 |  |  |  | 5,092 |  |  |  | 782 |  |  |  | 4,673 |  |  |  | 4,903 |  |  |  | 806 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total impaired loans with an allowance |  |  | 11,570 |  |  |  | 17,141 |  |  |  | 5,256 |  |  |  | 13,784 |  |  |  | 19,450 |  |  |  | 5,593 |
Total impaired loans |  | $ | 27,144 |  |  | $ | 35,991 |  |  | $ | 5,256 |  |  | $ | 23,202 |  |  | $ | 29,356 |  |  | $ | 5,593 |
|  | For the Three Months Ended |  |  | For the Nine Months Ended |
|  | September 30, 2013 |  |  | September 30, 2013 |
|  | Average |  |  | Interest |  |  | Average |  |  | Interest |
|  | Recorded |  |  | Income |  |  | Recorded |  |  | Income |
(Amounts in thousands) |  | Investment |  |  | Recognized |  |  | Investment |  |  | Recognized |
Impaired loans with no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  | $ | 6,375 |  |  | $ | 40 |  |  | $ | 5,133 |  |  | $ | 591 |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | 834 |  |  |  | 16 |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | 24 |  |  |  | 5 |
Single family non-owner occupied |  |  | 317 |  |  |  | — |  |  |  | 1,146 |  |  |  | 182 |
Non-farm, non-residential |  |  | 8,194 |  |  |  | — |  |  |  | 7,739 |  |  |  | 630 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland |  |  | 667 |  |  |  | 3 |  |  |  | 372 |  |  |  | 18 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 546 |  |  |  | — |  |  |  | 518 |  |  |  | 66 |
Single family owner occupied |  |  | 2,794 |  |  |  | — |  |  |  | 2,069 |  |  |  | 145 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | 20 |  |  |  | 5 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | — |
Total impaired loans with no allowance |  |  | 18,893 |  |  |  | 43 |  |  |  | 17,859 |  |  |  | 1,658 |
Impaired loans with a related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  |  | 463 |  |  |  | — |  |  |  | 1,409 |  |  |  | 141 |
Commercial and industrial |  |  | 5,328 |  |  |  | 11 |  |  |  | 4,009 |  |  |  | 11 |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | 126 |  |  |  | 7 |
Single family non-owner occupied |  |  | 365 |  |  |  | — |  |  |  | 1,064 |  |  |  | 8 |
Non-farm, non-residential |  |  | 606 |  |  |  | — |  |  |  | 1,791 |  |  |  | 52 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 535 |  |  |  | 9 |  |  |  | 329 |  |  |  | 14 |
Single family owner occupied |  |  | 5,093 |  |  |  | 13 |  |  |  | 4,318 |  |  |  | 54 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total impaired loans with an allowance |  |  | 12,390 |  |  |  | 33 |  |  |  | 13,046 |  |  |  | 287 |
Total impaired loans |  | $ | 31,283 |  |  | $ | 76 |  |  | $ | 30,905 |  |  | $ | 1,945 |
|  | For the Three Months Ended |  |  | For the Nine Months Ended |
|  | September 30, 2012 |  |  | September 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, 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 |
The following tables detail the Company’s recorded investment in loans, excluding purchased credit impaired 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, 2013, and December 31, 2012.
|  | September 30, 2013 |
|  | Non-acquired |  |  | Allowance |  |  | Loans |  |  | Allowance |
|  | Loans Individually |  |  | for Loans |  |  | Collectively |  |  | for Loans |
|  | Evaluated for |  |  | Individually |  |  | Evaluated for |  |  | Collectively |
(Amounts in thousands) |  | Impairment |  |  | Evaluated |  |  | Impairment |  |  | Evaluated |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  | $ | 4,688 |  |  | $ | 347 |  |  | $ | 61,896 |  |  | $ | 1,476 |
Commercial and industrial |  |  | 4,743 |  |  |  | 3,648 |  |  |  | 93,951 |  |  |  | 1,462 |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | 57,555 |  |  |  | 1,008 |
Single family non-owner occupied |  |  | 602 |  |  |  | 38 |  |  |  | 133,191 |  |  |  | 3,363 |
Non-farm, non-residential |  |  | 8,014 |  |  |  | 7 |  |  |  | 461,592 |  |  |  | 4,399 |
Agricultural |  |  | — |  |  |  | — |  |  |  | 2,450 |  |  |  | 19 |
Farmland |  |  | 659 |  |  |  | — |  |  |  | 32,137 |  |  |  | 290 |
Total commercial loans |  |  | 18,706 |  |  |  | 4,040 |  |  |  | 842,772 |  |  |  | 12,017 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 1,060 |  |  |  | 434 |  |  |  | 135,868 |  |  |  | 1,267 |
Single family owner occupied |  |  | 7,378 |  |  |  | 782 |  |  |  | 498,208 |  |  |  | 4,230 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | 25,813 |  |  |  | 203 |
Total consumer real estate loans |  |  | 8,438 |  |  |  | 1,216 |  |  |  | 659,889 |  |  |  | 5,700 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | 71,751 |  |  |  | 649 |
Other |  |  | — |  |  |  | — |  |  |  | 4,708 |  |  |  | — |
Total consumer and other loans |  |  | — |  |  |  | — |  |  |  | 76,459 |  |  |  | 649 |
Total loans |  | $ | 27,144 |  |  | $ | 5,256 |  |  | $ | 1,579,120 |  |  | $ | 18,366 |
|  | December 31, 2012 |
|  | Non-acquired |  |  | Allowance |  |  | Loans |  |  | Allowance |
|  | Loans Individually |  |  | for Loans |  |  | Collectively |  |  | for Loans |
|  | Evaluated for |  |  | Individually |  |  | Evaluated for |  |  | Collectively |
(Amounts in thousands) |  | Impairment |  |  | Evaluated |  |  | Impairment |  |  | Evaluated |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  | $ | 2,916 |  |  | $ | — |  |  | $ | 55,369 |  |  | $ | 1,214 |
Commercial and industrial |  |  | 3,602 |  |  |  | 3,192 |  |  |  | 88,811 |  |  |  | 1,159 |
Multi-family residential |  |  | 378 |  |  |  | 18 |  |  |  | 67,278 |  |  |  | 1,612 |
Single family non-owner occupied |  |  | 2,794 |  |  |  | 996 |  |  |  | 134,323 |  |  |  | 3,371 |
Non-farm, non-residential |  |  | 8,063 |  |  |  | 358 |  |  |  | 451,240 |  |  |  | 4,901 |
Agricultural |  |  | — |  |  |  | — |  |  |  | 1,852 |  |  |  | 22 |
Farmland |  |  | — |  |  |  | — |  |  |  | 34,779 |  |  |  | 416 |
Total commercial loans |  |  | 17,753 |  |  |  | 4,564 |  |  |  | 833,652 |  |  |  | 12,695 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 499 |  |  |  | 223 |  |  |  | 141,684 |  |  |  | 1,351 |
Single family owner occupied |  |  | 4,950 |  |  |  | 806 |  |  |  | 483,553 |  |  |  | 5,189 |
Owner occupied construction |  |  | — |  |  |  | — |  |  |  | 16,768 |  |  |  | 337 |
Total consumer real estate loans |  |  | 5,449 |  |  |  | 1,029 |  |  |  | 642,005 |  |  |  | 6,877 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | 81,037 |  |  |  | 597 |
Other |  |  | — |  |  |  | — |  |  |  | 5,666 |  |  |  | — |
Total consumer and other loans |  |  | — |  |  |  | — |  |  |  | 86,703 |  |  |  | 597 |
Total loans |  | $ | 23,202 |  |  | $ | 5,593 |  |  | $ | 1,562,360 |  |  | $ | 20,169 |
The Company aggregates purchased credit impaired loans into the following loan pools: Waccamaw commercial, Waccamaw lines of credit, Peoples commercial, Waccamaw serviced home equity lines, Waccamaw residential, Peoples residential, and Waccamaw consumer. During the quarterly cash flow analysis, four of the Company’s seven purchased credit impaired loan pools were deemed impaired. The pools had a combined recorded investment of $23.45 million, a current unpaid principal balance of $36.30 million, and cumulative impairment of $1.04 million at September 30, 2013. For the three months ended September 30, 2013, the Company had an average recorded investment of $23.54 million and recognized interest income of $721 thousand in connection with impaired loan pools. For the nine months ended September 30, 2013, the Company had an average recorded investment of $15.80 million and recognized interest income of $839 thousand in connection with impaired loan pools. The following table details the Company’s recorded investment in purchased credit impaired loans and the allowance for loan losses by loan pool at September 30, 2013, and December 31, 2012.
|  | September 30, 2013 |  |  | December 31, 2012 |
|  | Acquired |  |  | Allowance |  |  | Acquired |  |  | Allowance |
|  | Impaired Loans |  |  | for Acquired |  |  | Impaired Loans |  |  | for Acquired |
|  | Evaluated for |  |  | Impaired Loans |  |  | Evaluated for |  |  | Impaired Loans |
(Amounts in thousands) |  | Impairment |  |  | Evaluated |  |  | Impairment |  |  | Evaluated |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Waccamaw commercial |  | $ | 22,299 |  |  | $ | — |  |  | $ | 40,688 |  |  | $ | — |
Waccamaw lines of credit |  |  | 4,077 |  |  |  | 158 |  |  |  | 10,009 |  |  |  | — |
Peoples commercial |  |  | 9,331 |  |  |  | — |  |  |  | 23,670 |  |  |  | — |
Other |  |  | 2,015 |  |  |  | 8 |  |  |  | 2,340 |  |  |  | 8 |
Total commercial loans |  |  | 37,722 |  |  |  | 166 |  |  |  | 76,707 |  |  |  | 8 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Waccamaw serviced home equity lines |  |  | 44,407 |  |  |  | 443 |  |  |  | 50,343 |  |  |  | — |
Waccamaw residential |  |  | 5,631 |  |  |  | 270 |  |  |  | 8,974 |  |  |  | — |
Peoples residential |  |  | 2,630 |  |  |  | 164 |  |  |  | 3,237 |  |  |  | — |
Total consumer real estate loans |  |  | 52,668 |  |  |  | 877 |  |  |  | 62,554 |  |  |  | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Waccamaw consumer |  |  | 43 |  |  |  | — |  |  |  | 101 |  |  |  | — |
Total loans |  | $ | 90,433 |  |  | $ | 1,043 |  |  | $ | 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 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, 2013, and December 31, 2012. Purchased credit impaired loan pools have been disaggregated in the following tables for disclosure purposes. Non-covered special mention and substandard loans declined between December 31, 2012, and September 30, 2013, due primarily to loan work-out activity across the portfolio coupled with continued credit improvement in the Peoples’ acquired loan portfolio.
|  | September 30, 2013 |
|  |  |  |  | Special |  |  |  |  |  |  |  |  |  |  |  |  |
(Amounts in thousands) |  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |  |  | Loss |  |  | Total |
Non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  | $ | 46,431 |  |  | $ | 1,371 |  |  | $ | 7,007 |  |  | $ | 982 |  |  | $ | — |  |  | $ | 55,791 |
Commercial and industrial |  |  | 87,129 |  |  |  | 1,338 |  |  |  | 3,550 |  |  |  | 3,955 |  |  |  | — |  |  |  | 95,972 |
Multi-family residential |  |  | 53,093 |  |  |  | 2,262 |  |  |  | 724 |  |  |  | — |  |  |  | — |  |  |  | 56,079 |
Single family non-owner occupied |  |  | 118,079 |  |  |  | 4,455 |  |  |  | 9,579 |  |  |  | 140 |  |  |  | — |  |  |  | 132,253 |
Non-farm, non-residential |  |  | 417,892 |  |  |  | 15,729 |  |  |  | 21,253 |  |  |  | 373 |  |  |  | — |  |  |  | 455,247 |
Agricultural |  |  | 2,252 |  |  |  | 11 |  |  |  | 11 |  |  |  | — |  |  |  | — |  |  |  | 2,274 |
Farmland |  |  | 26,974 |  |  |  | 1,695 |  |  |  | 3,216 |  |  |  | — |  |  |  | — |  |  |  | 31,885 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 104,582 |  |  |  | 1,384 |  |  |  | 3,125 |  |  |  | 520 |  |  |  | — |  |  |  | 109,611 |
Single family owner occupied |  |  | 455,194 |  |  |  | 8,018 |  |  |  | 29,212 |  |  |  | — |  |  |  | — |  |  |  | 492,424 |
Owner occupied construction |  |  | 25,349 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 25,349 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 70,313 |  |  |  | 898 |  |  |  | 465 |  |  |  | 3 |  |  |  | — |  |  |  | 71,679 |
Other |  |  | 4,696 |  |  |  | 2 |  |  |  | 10 |  |  |  | — |  |  |  | — |  |  |  | 4,708 |
Total non-covered loans |  | $ | 1,411,984 |  |  | $ | 37,163 |  |  | $ | 78,152 |  |  | $ | 5,973 |  |  | $ | — |  |  | $ | 1,533,272 |
|  | September 30, 2013 |
|  |  |  |  | Special |  |  |  |  |  |  |  |  |  |  |  |  |
(Amounts in thousands) |  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |  |  | Loss |  |  | Total |
Covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  | $ | 10,183 |  |  | $ | 1,292 |  |  | $ | 6,423 |  |  | $ | 81 |  |  | $ | — |  |  | $ | 17,979 |
Commercial and industrial |  |  | 3,299 |  |  |  | 400 |  |  |  | 218 |  |  |  | 34 |  |  |  | — |  |  |  | 3,951 |
Multi-family residential |  |  | 1,476 |  |  |  | — |  |  |  | 527 |  |  |  | — |  |  |  | — |  |  |  | 2,003 |
Single family non-owner occupied |  |  | 4,471 |  |  |  | 1,645 |  |  |  | 2,007 |  |  |  | 19 |  |  |  | — |  |  |  | 8,142 |
Non-farm, non-residential |  |  | 15,536 |  |  |  | 4,835 |  |  |  | 17,340 |  |  |  | 40 |  |  |  | — |  |  |  | 37,751 |
Agricultural |  |  | 176 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 176 |
Farmland |  |  | 676 |  |  |  | — |  |  |  | 338 |  |  |  | — |  |  |  | — |  |  |  | 1,014 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 15,378 |  |  |  | 10,690 |  |  |  | 45,632 |  |  |  | 24 |  |  |  | — |  |  |  | 71,724 |
Single family owner occupied |  |  | 12,489 |  |  |  | 82 |  |  |  | 6,560 |  |  |  | 122 |  |  |  | — |  |  |  | 19,253 |
Owner occupied construction |  |  | 203 |  |  |  | 19 |  |  |  | 1,084 |  |  |  | — |  |  |  | — |  |  |  | 1,306 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 126 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 126 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total covered loans |  | $ | 64,013 |  |  | $ | 18,963 |  |  | $ | 80,129 |  |  | $ | 320 |  |  | $ | — |  |  | $ | 163,425 |
|  | December 31, 2012 |
|  |  |  |  | Special |  |  |  |  |  |  |  |  |  |  |  |  |
(Amounts in thousands) |  | Pass |  |  | 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 |
|  | December 31, 2012 |
|  |  |  |  | Special |  |  |  |  |  |  |  |  |  |  |  |  |
(Amounts in thousands) |  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |  |  | Loss |  |  | Total |
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 September 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.
|  | September 30, 2013 |  |  | December 31, 2012 |
(Amounts in thousands) |  | Non-covered |  |  | Covered |  |  | Total |  |  | Non-covered |  |  | Covered |  |  | Total |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, development, and other land |  | $ | 5,065 |  |  | $ | 619 |  |  | $ | 5,684 |  |  | $ | 405 |  |  | $ | 1,990 |  |  | $ | 2,395 |
Commercial and industrial |  |  | 5,058 |  |  |  | 103 |  |  |  | 5,161 |  |  |  | 3,912 |  |  |  | 35 |  |  |  | 3,947 |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 378 |  |  |  | — |  |  |  | 378 |
Single family non-owner occupied |  |  | 2,216 |  |  |  | 119 |  |  |  | 2,335 |  |  |  | 7,071 |  |  |  | 21 |  |  |  | 7,092 |
Non-farm, non-residential |  |  | 5,268 |  |  |  | 318 |  |  |  | 5,586 |  |  |  | 5,938 |  |  |  | 951 |  |  |  | 6,889 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | 2 |
Farmland |  |  | 437 |  |  |  | 304 |  |  |  | 741 |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 1,417 |  |  |  | 276 |  |  |  | 1,693 |  |  |  | 872 |  |  |  | 436 |  |  |  | 1,308 |
Single family owner occupied |  |  | 6,706 |  |  |  | 1,599 |  |  |  | 8,305 |  |  |  | 5,219 |  |  |  | 831 |  |  |  | 6,050 |
Owner occupied construction |  |  | — |  |  |  | 241 |  |  |  | 241 |  |  |  | — |  |  |  | 59 |  |  |  | 59 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 222 |  |  |  | — |  |  |  | 222 |  |  |  | 126 |  |  |  | — |  |  |  | 126 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 26,389 |  |  |  | 3,579 |  |  |  | 29,968 |  |  |  | 23,923 |  |  |  | 4,323 |  |  |  | 28,246 |
Acquired impaired loans |  |  | 8 |  |  |  | — |  |  |  | 8 |  |  |  | 8 |  |  |  | — |  |  |  | 8 |
Total nonaccrual loans |  | $ | 26,397 |  |  | $ | 3,579 |  |  | $ | 29,976 |  |  | $ | 23,931 |  |  | $ | 4,323 |  |  | $ | 28,254 |
The following tables present the aging of past due loans, by loan class, at September 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 non-covered accruing loans contractually past due 90 days or more at September 30, 2013, and December 31, 2012. There were no covered accruing loans contractually past due 90 days or more at December 31, 2012, and $82 thousand at September 30, 2013. 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. Purchased credit impaired loan pools have been disaggregated in the following tables for disclosure purposes.
|  | September 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 |  | $ | 130 |  |  | $ | 156 |  |  | $ | 4,929 |  |  | $ | 5,215 |  |  | $ | 50,576 |  |  | $ | 55,791 |
Commercial and industrial |  |  | 438 |  |  |  | 142 |  |  |  | 1,221 |  |  |  | 1,801 |  |  |  | 94,171 |  |  |  | 95,972 |
Multi-family residential |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | 100 |  |  |  | 55,979 |  |  |  | 56,079 |
Single family non-owner occupied |  |  | 959 |  |  |  | 268 |  |  |  | 1,129 |  |  |  | 2,356 |  |  |  | 129,897 |  |  |  | 132,253 |
Non-farm, non-residential |  |  | 1,524 |  |  |  | 231 |  |  |  | 4,332 |  |  |  | 6,087 |  |  |  | 449,160 |  |  |  | 455,247 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,274 |  |  |  | 2,274 |
Farmland |  |  | — |  |  |  | — |  |  |  | 437 |  |  |  | 437 |  |  |  | 31,448 |  |  |  | 31,885 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 433 |  |  |  | 101 |  |  |  | 847 |  |  |  | 1,381 |  |  |  | 108,230 |  |  |  | 109,611 |
Single family owner occupied |  |  | 3,512 |  |  |  | 713 |  |  |  | 1,998 |  |  |  | 6,223 |  |  |  | 486,201 |  |  |  | 492,424 |
Owner occupied construction |  |  | 79 |  |  |  | — |  |  |  | — |  |  |  | 79 |  |  |  | 25,270 |  |  |  | 25,349 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | 472 |  |  |  | 89 |  |  |  | 158 |  |  |  | 719 |  |  |  | 70,960 |  |  |  | 71,679 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,708 |  |  |  | 4,708 |
Total non-covered loans |  | $ | 7,647 |  |  | $ | 1,700 |  |  | $ | 15,051 |  |  | $ | 24,398 |  |  | $ | 1,508,874 |  |  | $ | 1,533,272 |
|  | September 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 |  | $ | 34 |  |  | $ | 59 |  |  | $ | 159 |  |  | $ | 252 |  |  | $ | 17,727 |  |  | $ | 17,979 |
Commercial and industrial |  |  | 30 |  |  |  | 58 |  |  |  | 37 |  |  |  | 125 |  |  |  | 3,826 |  |  |  | 3,951 |
Multi-family residential |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,003 |  |  |  | 2,003 |
Single family non-owner occupied |  |  | 72 |  |  |  | — |  |  |  | 119 |  |  |  | 191 |  |  |  | 7,951 |  |  |  | 8,142 |
Non-farm, non-residential |  |  | 144 |  |  |  | — |  |  |  | 267 |  |  |  | 411 |  |  |  | 37,340 |  |  |  | 37,751 |
Agricultural |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 176 |  |  |  | 176 |
Farmland |  |  | — |  |  |  | — |  |  |  | 304 |  |  |  | 304 |  |  |  | 710 |  |  |  | 1,014 |
Consumer real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity lines |  |  | 400 |  |  |  | 10 |  |  |  | 165 |  |  |  | 575 |  |  |  | 71,149 |  |  |  | 71,724 |
Single family owner occupied |  |  | 390 |  |  |  | — |  |  |  | 1,352 |  |  |  | 1,742 |  |  |  | 17,511 |  |  |  | 19,253 |
Owner occupied construction |  |  | 121 |  |  |  | 19 |  |  |  | 120 |  |  |  | 260 |  |  |  | 1,046 |  |  |  | 1,306 |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 126 |  |  |  | 126 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total covered loans |  | $ | 1,191 |  |  | $ | 146 |  |  | $ | 2,523 |  |  | $ | 3,860 |  |  | $ | 159,565 |  |  | $ | 163,425 |
|  | 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 $11.92 million at September 30, 2013, and $12.05 million at December 31, 2012, which are reported net of those on nonaccrual status of $2.66 million and $3.83 million, respectively. Accruing nonperforming TDRs amounted to $2.23 million, or 18.69% of total accruing TDRs at September 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 $1.69 million and $1.87 million at September 30, 2013, and December 31, 2012, respectively. Interest income recognized on TDRs for the three and nine months ended September 30, 2013, totaled $183 thousand and $422 thousand, respectively. Interest income recognized on TDRs for the three and nine months ended September 30, 2012, totaled $62 thousand and $237 thousand, respectively. There were no covered loans recorded as TDRs at September 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 may make 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 the 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 detail loans modified as TDRs that were restructured during the three and nine months ended September 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 September 30, |
|  | 2013 |  |  | 2012 |
|  | Total |  |  | Pre-Modification |  |  | Post-Modification |  |  | Total |  |  | Pre-Modification |  |  | Post-Modification |
(Amounts in thousands) |  | Contracts |  |  | Recorded Investment |  |  | Recorded Investment |  |  | Contracts |  |  | Recorded Investment |  |  | Recorded Investment |
Below market interest rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single family owner occupied |  |  | 1 |  |  | $ | 359 |  |  | $ | 326 |  |  |  | — |  |  | $ | — |  |  | $ | — |
Below market interest rate and extended payment term |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single family owner occupied |  |  | 2 |  |  |  | 642 |  |  |  | 600 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 3 |  |  | $ | 1,001 |  |  | $ | 926 |  |  |  | — |  |  | $ | — |  |  | $ | — |
|  | Nine Months Ended September 30, |
|  | 2013 |  |  | 2012 |
|  | Total |  |  | Pre-Modification |  |  | Post-Modification |  |  | Total |  |  | Pre-Modification |  |  | Post-Modification |
(Amounts in thousands) |  | Contracts |  |  | Recorded Investment |  |  | Recorded Investment |  |  | Contracts |  |  | Recorded Investment |  |  | Recorded Investment |
Below market interest rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single family owner occupied |  |  | 1 |  |  | $ | 359 |  |  | $ | 326 |  |  |  | — |  |  | $ | — |  |  | $ | — |
Extended payment term |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single family owner occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  | $ | 351 |  |  | $ | 319 |
Below market interest rate and extended payment term |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single family owner occupied |  |  | 2 |  |  |  | 642 |  |  |  | 600 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 3 |  |  | $ | 1,001 |  |  | $ | 926 |  |  |  | 1 |  |  | $ | 351 |  |  | $ | 319 |
The following tables detail loans modified as TDRs that were restructured within the previous 12 months for which there was a payment default during the three and nine months ended September 30, 2013 and 2012 by loan class.
|  | Three Months Ended September 30, |
|  | 2013 |  |  | 2012 |
|  | Total |  |  | Recorded |  |  | Total |  |  | Recorded |
|  | Contracts |  |  | Investment |  |  | Contracts |  |  | Investment |
(Amounts in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Non-farm, non-residential |  |  | 1 |  |  | $ | 978 |  |  |  | — |  |  | $ | — |
Total |  |  | 1 |  |  | $ | 978 |  |  |  | — |  |  | $ | — |
|  | Nine Months Ended September 30, |
|  | 2013 |  |  | 2012 |
|  | Total |  |  | Recorded |  |  | Total |  |  | Recorded |
|  | Contracts |  |  | Investment |  |  | Contracts |  |  | Investment |
(Amounts in thousands) |  |  |  |  |  |  |  |  |  |  |  |
Non-farm, non-residential |  |  | 1 |  |  | $ | 978 |  |  |  | — |  |  | $ | — |
Total |  |  | 1 |  |  | $ | 978 |  |  |  | — |  |  | $ | — |

X
- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 55 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=32702940&loc=SL6953791-111525 + Details
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