Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2013

The following table shows the summary of activities for the allowance for credit losses as of and for the three months ended June 30, 2013 and 2012 by portfolio segment (in thousands):



	Commercial			Real Estate			Consumer			Unallocated		Total
Allowance for credit losses:
Beginning balance, April 1, 2013	$	2,261		$	5,536		$	1,315		$	377	$	9,489
Provision charged to operations	433			(479		)	(77		)	123		—
Losses charged to allowance	(4		)	—			(18		)	—		(22		)
Recoveries	102			—			32			—		134
Ending balance, June 30, 2013	$	2,792		$	5,057		$	1,252		$	500	$	9,601
Allowance for credit losses:
Beginning balance, April 1. 2012	$	2,714		$	5,140		$	2,142		$	289	$	10,285
Provision charged to operations	(124		)	653			(513		)	84		100
Losses charged to allowance	(16		)	(319		)	(177		)	—		(512		)
Recoveries	225			—			42			—		267
Ending balance, June 30, 2012	$	2,799		$	5,474		$	1,494		$	373	$	10,140

The following table shows the summary of activities for the allowance for credit losses as of and for the six months ended June 30, 2013 and 2012 by portfolio segment of loans (in thousands):



	Commercial			Real Estate			Consumer			Unallocated		Total
Allowance for credit losses:
Beginning balance, January 1, 2013	$	2,676		$	5,877		$	1,541		$	39	$	10,133
Provision charged to operations	674			(820		)	(315		)	461		—
Losses charged to allowance	(702		)	—			(35		)	—		(737		)
Recoveries	144			—			61			—		205
Ending balance, June 30, 2013	$	2,792		$	5,057		$	1,252		$	500	$	9,601

Allowance for credit losses:
Beginning balance, January 1, 2012	$	2,266		$	7,155		$	1,836		$	139	$	11,396
Provision charged to operations	361			111			(206		)	234		500
Losses charged to allowance	(122		)	(1,792		)	(267		)	—		(2,181		)
Recoveries	294			—			131			—		425
Ending balance, June 30, 2012	$	2,799		$	5,474		$	1,494		$	373	$	10,140

The following is a summary of the allowance for credit losses by impairment methodology and portfolio segment as of June 30, 2013 and December 31, 2012 (in thousands):



	Commercial		Real Estate		Consumer		Unallocated		Total
Allowance for credit losses:
Ending balance, June 30, 2013	$	2,792	$	5,057	1,252		$	500	$	9,601
Ending balance: individually evaluated for impairment	$	410	$	408	53		$	—	$	871
Ending balance: collectively evaluated for impairment	$	2,382	$	4,649	1,199		$	500	$	8,730

Ending balance, December 31, 2012	$	2,676	$	5,877	$	1,541	$	39	$	10,133
Ending balance: individually evaluated for impairment	$	40	$	465	$	5	$	—	$	510
Ending balance: collectively evaluated for impairment	$	2,636	$	5,412	$	1,536	$	39	$	9,623

Loans by impairment methdology

The following table shows the ending balances of loans as of June 30, 2013 and December 31, 2012 by portfolio segment and by impairment methodology (in thousands):



	Commercial		Real Estate		Consumer		Total
Loans:
Ending balance, June 30, 2013	$	115,882	$	243,230	$	46,123	$	405,235
Ending balance: individually evaluated for impairment	$	1,339	$	12,733	$	1,885	$	15,957
Ending balance: collectively evaluated for impairment	$	114,543	$	230,497	$	44,238	$	389,278

Loans:
Ending balance, December 31, 2012	$	104,555	$	237,938	$	53,278	$	395,771
Ending balance: individually evaluated for impairment	$	2,405	$	12,868	$	1,832	$	17,105
Ending balance: collectively evaluated for impairment	$	102,150	$	225,070	$	51,446	$	378,666

Loan portfolio by internal risk rating

The following table shows the loan portfolio by class allocated by management’s internal risk ratings at June 30, 2013 (in thousands):



	Pass		Special Mention		Substandard		Doubtful		Total
Commercial:
Commercial and industrial	$	73,891	$	431	$	2,804	$	—	$	77,126
Agricultural land and production	38,756		—		—		—		38,756
Real Estate:
Owner occupied	104,245		2,689		5,180		—		112,114
Real estate construction and other land loans	20,130		2,429		11,138		—		33,697
Commercial real estate	51,955		3,769		5,058		—		60,782
Agricultural real estate	29,594		2,013		—		—		31,607
Other real estate	5,030		—		—		—		5,030
Consumer:
Equity loans and lines of credit	34,939		2,310		2,199		—		39,448
Consumer and installment	6,607		60		8		—		6,675
Total	$	365,147	$	13,701	$	26,387	$	—	$	405,235

The following table shows the loan portfolio by class allocated by management’s internally assigned risk grade ratings at December 31, 2012 (in thousands):



	Pass		Special Mention		Substandard		Doubtful		Total
Commercial:
Commercial and industrial	$	71,125	$	824	$	6,007	$	—	$	77,956
Agricultural land and production	26,599		—		—		—		26,599
Real Estate:
Owner occupied	107,281		1,831		5,332		—		114,444
Real estate construction and other land loans	18,517		3,377		11,305		—		33,199
Commercial real estate	44,880		3,952		4,965		—		53,797
Agricultural real estate	26,883		1,517		—		—		28,400
Other real estate	8,098		—		—		—		8,098
Consumer:
Equity loans and lines of credit	40,527		258		2,147		—		42,932
Consumer and installment	10,259		77		10		—		10,346
Total	$	354,169	$	11,836	$	29,766	$	—	$	395,771

Loan portfolio by time past due

The following table shows an aging analysis of the loan portfolio by class and the time past due at June 30, 2013 (in thousands):



	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days Accruing		Non-accrual
Commercial:
Commercial and industrial	$	19	$	1,339	$	—	$	1,358	$	75,768	$	77,126	$	—	$	1,339
Agricultural land and production	—		—		—		—		38,756		38,756		—		—
Real estate:	—						—		—		—
Owner occupied	—		—		—		—		112,114		112,114		—		600
Real estate construction and other land loans	—		658		4,731		5,389		28,308		33,697		—		6,290
Commercial real estate	—		—		154		154		60,628		60,782		—		154
Agricultural real estate	—		—		—		—		31,607		31,607		—		—
Other real estate	—		—		—		—		5,030		5,030		—		—
Consumer:							—		—		—
Equity loans and lines of credit	—		113		—		113		39,335		39,448		—		1,884
Consumer and installment	35		—		—		35		6,640		6,675		—		—
Total	$	54	$	2,110	$	4,885	$	7,049	$	398,186	$	405,235	$	—	$	10,267

The following table shows an aging analysis of the loan portfolio by class and the time past due at December 31, 2012 (in thousands):



	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days Accruing		Non- accrual
Commercial:
Commercial and industrial	$	—	$	—	$	—	$	—	$	77,956	$	77,956	$	—	$	—
Agricultural land and production	—		—		—		—		26,599		26,599		—		—
Real estate:	—
Owner occupied	—		213		—		213		114,231		114,444		—		1,575
Real estate construction and other land loans	—		—		—		—		33,199		33,199		—		6,288
Commercial real estate	—		—		—		—		53,797		53,797		—		—
Agricultural real estate	—		—		—		—		28,400		28,400		—		—
Other real estate	—		—		—		—		8,098		8,098		—		—
Consumer:
Equity loans and lines of credit	—		—		—		—		42,932		42,932		—		1,832
Consumer and installment	27		—		—		27		10,319		10,346		—		—
Total	$	27	$	213	$	—	$	240	$	395,531	$	395,771	$	—	$	9,695

Impaired loans

The following table shows information related to impaired loans by class at June 30, 2013 (in thousands):



	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial:
Commercial and industrial	$	—	$	—	$	—
Agricultural land and production	—		—		—
Total commercial	—		—		—
Real estate:
Owner occupied	198		235		—
Real estate construction and other land loans	5,389		6,718		—
Commercial real estate	154		154		—
Agricultural real estate	—		—		—
Other real estate	—		—		—
Total real estate	5,741		7,107		—
Consumer:
Equity loans and lines of credit	1,705		2,082		—
Consumer and installment	—		—		—
Total consumer	1,705		2,082		—
Total with no related allowance recorded	7,446		9,189		—

With an allowance recorded:
Commercial:
Commercial and industrial	1,339		1,355		410
Agricultural land and production	—		—		—
Total commercial	1,339		1,355		410
Real estate:
Owner occupied	1,318		1,482		67
Real estate construction and other land loans	5,674		6,090		341
Commercial real estate	—		—		—
Agricultural real estate	—		—		—
Other real estate	—		—		—
Total real estate	6,992		7,572		408
Consumer:
Equity loans and lines of credit	180		185		53
Consumer and installment	—		—		—
Total consumer	180		185		53
Total with an allowance recorded	8,511		9,112		871
Total	$	15,957	$	18,301	$	871

The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality.

The following table shows information related to impaired loans by class at December 31, 2012 (in thousands):



	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial:
Commercial and industrial	$	—	$	—	$	—
Agricultural land and production	—		—		—
Total commercial	—		—		—
Real estate:
Owner occupied	—		—		—
Real estate construction and other land loans	1,352		1,888		—
Commercial real estate	—		—		—
Agricultural real estate	—		—		—
Other real estate	—		—		—
Total real estate	1,352		1,888		—
Consumer:
Equity loans and lines of credit	1,523		1,834		—
Consumer and installment	—		—		—
Total consumer	1,523		1,834		—
Total with no related allowance recorded	2,875		3,722		—

With an allowance recorded:
Commercial:
Commercial and industrial	2,405		2,405		40
Agricultural land and production	—		—		—
Total commercial	2,405		2,405		40
Real estate:
Owner occupied	1,575		1,733		165
Real estate construction and other land loans	9,941		10,875		300
Commercial real estate	—		—		—
Agricultural real estate	—		—		—
Other real estate	—		—		—
Total real estate	11,516		12,608		465
Consumer:
Equity loans and lines of credit	309		323		5
Consumer and installment	—		—		—
Total consumer	309		323		5
Total with an allowance recorded	14,230		15,336		510
Total	$	17,105	$	19,058	$	510

The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality.

The following presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the three months ended June 30, 2013 and 2012.



	Three Months Ended June 30, 2013				Three Months Ended June 30, 2012
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	—	$	—	$	1,144	$	—
Agricultural land and production	—		—		—		—
Total commercial	—		—		1,144		—
Real estate:
Owner occupied	204		—		1,022		—
Real estate construction and other land loans	5,432		—		5,011		—
Commercial real estate	156		—		—		—
Agricultural real estate	—		—		—		—
Other real estate	—		—		—		—
Total real estate	5,792		—		6,033		—
Consumer:
Equity loans and lines of credit	1,719		—		1,758		—
Consumer and installment	—		—		—		—
Total consumer	1,719		—		1,758		—
Total with no related allowance recorded	7,511		—		8,935		—

With an allowance recorded:
Commercial:
Commercial and industrial	1,589		32		1,473		56
Agricultural land and production	—		—		—		—
Total commercial	1,589		32		1,473		56
Real estate:
Owner occupied	1,322		30		—		—
Real estate construction and other land loans	5,695		85		6,868		94
Commercial real estate	—		—		—		—
Agricultural real estate	—		—		—		—
Other real estate	—		—		—		—
Total real estate	7,017		115		6,868		94
Consumer:
Equity loans and lines of credit	143		—		352		—
Consumer and installment	—		—		48		—
Total consumer	143		—		400		—
Total with an allowance recorded	8,749		147		8,741		150
Total	$	16,260	$	147	$	17,676	$	150

The following presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the six months ended June 30, 2013 and 2012 (in thousands):



	Six Months Ended June 30, 2013				Six Months Ended June 30, 2012
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	—	$	—	$	1,412	$	—
Agricultural land and production	—		—		—		—
Total commercial	—		—		1,412		—
Real estate:
Owner occupied	137		—		625		—
Real estate construction and other land loans	5,488		—		5,811		—
Commercial real estate	130		—		—		—
Agricultural real estate	—		—		—		—
Other real estate	—		—		—		—
Total real estate	5,755		—		6,436		—
Consumer:
Equity loans and lines of credit	1,692		—		1,460		—
Consumer and installment	—		—		—		—
Total consumer	1,692		—		1,460		—
Total with no related allowance recorded	7,447		—		9,308		—

With an allowance recorded:
Commercial:
Commercial and industrial	1,803		65		1,511		127
Agricultural land and production	—		—		—		—
Total commercial	1,803		65		1,511		127
Real estate:
Owner occupied	1,402		30		—		—
Real estate construction and other land loans	5,612		170		6,164		193
Commercial real estate	—		—		—		—
Agricultural real estate	—		—		—		—
Other real estate	—		—		—		—
Total real estate	7,014		200		6,164		193
Consumer:
Equity loans and lines of credit	146		—		294		—
Consumer and installment	—		—		60		—
Total consumer	146		—		354		—
Total with an allowance recorded	8,963		265		8,029		320
Total	$	16,410	$	265	$	17,337	$	320