XML 14 R10.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Allowance for Loan Losses | 9 Months Ended
--- | ---
Sep. 30, 2013
Allowance for Loan Losses [Abstract] |
Allowance for Loan Losses |
(4) | Allowance for Loan Losses
The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the nine month period ended September 30, 2013 and September 30, 2012. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other loan categories and periodically may result in reallocation within the provision categories.
September 30, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Beginning |  |  |  |  |  |  |  |  |  |  |  | Ending |
|  | Balance |  |  | Charge-Offs |  |  | Recoveries |  |  | Provision |  |  | Balance |
Commercial and Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 981 |  |  | $ | (105 | ) |  | $ | 51 |  |  | $ | 95 |  |  | $ | 1,022 |
Agricultural |  |  | 296 |  |  |  | (27 | ) |  |  | 4 |  |  |  | 24 |  |  |  | 297 |
Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Construction |  |  | 1,890 |  |  |  | (1,779 | ) |  |  | 193 |  |  |  | 1,601 |  |  |  | 1,905 |
Residential Construction |  |  | 138 |  |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 138 |
Commercial |  |  | 5,163 |  |  |  | (1,865 | ) |  |  | 293 |  |  |  | 1,677 |  |  |  | 5,268 |
Residential |  |  | 3,406 |  |  |  | (535 | ) |  |  | 28 |  |  |  | 481 |  |  |  | 3,380 |
Farmland |  |  | 291 |  |  |  | (21 | ) |  |  | 22 |  |  |  | 19 |  |  |  | 311 |
Consumer and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer |  |  | 228 |  |  |  | (333 | ) |  |  | 82 |  |  |  | 300 |  |  |  | 277 |
Other |  |  | 344 |  |  |  | (4 | ) |  |  | 10 |  |  |  | 3 |  |  |  | 353 |
|  | $ | 12,737 |  |  | $ | (4,669 | ) |  | $ | 683 |  |  | $ | 4,200 |  |  | $ | 12,951 |
September 30, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Beginning |  |  |  |  |  |  |  |  |  |  |  | Ending |
|  | Balance |  |  | Charge-Offs |  |  | Recoveries |  |  | Provision |  |  | Balance |
Commercial and Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 1,071 |  |  | $ | (407 | ) |  | $ | 105 |  |  | $ | 153 |  |  | $ | 922 |
Agricultural |  |  | 297 |  |  |  | (3 | ) |  |  | -- |  |  |  | -- |  |  |  | 294 |
Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Construction |  |  | 3,123 |  |  |  | (1,929 | ) |  |  | 74 |  |  |  | 836 |  |  |  | 2,104 |
Residential Construction |  |  | 138 |  |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 138 |
Commercial |  |  | 6,448 |  |  |  | (4,273 | ) |  |  | 217 |  |  |  | 4,165 |  |  |  | 6,557 |
Residential |  |  | 3,695 |  |  |  | (632 | ) |  |  | 9 |  |  |  | 413 |  |  |  | 3,485 |
Farmland |  |  | 365 |  |  |  | (39 | ) |  |  | 5 |  |  |  | -- |  |  |  | 331 |
Consumer and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer |  |  | 205 |  |  |  | (75 | ) |  |  | 63 |  |  |  | 60 |  |  |  | 253 |
Other |  |  | 308 |  |  |  | (11 | ) |  |  | 8 |  |  |  | -- |  |  |  | 305 |
|  | $ | 15,650 |  |  | $ | (7,369 | ) |  | $ | 481 |  |  | $ | 5,627 |  |  | $ | 14,389 |
During 2012, the Company changed its loss history period used in calculating the ALLL from a one year average to a rolling eight quarter average. At September 30, 2012 the loss history period used was based on the annual loss rate from calendar year 2011, whereas the loss history period used at September 30, 2013 was based on the loss rate from the eight quarters ended June 30, 2013. During the third quarter, management implemented a change to its methodology for calculating the allowance for loan losses. This change was intended to better reflect the current position of the loan portfolio. Prior to the third quarter, the allowance for loan loss calculation incorporated a qualitative factor related to improvements in credit administration. These improvements, which began in 2008, included organizational changes to credit administration, specifically related to managing past due loans, grading of loans, recognition of losses and underwriting of new loans. Primary among the organizational changes was the appointment of experienced lending officers to oversee the lending function, as well as the appointment of a chief credit officer. Management feels these organizational changes are now fully implemented, as evidenced by a lower charge-off rate, and therefore, the qualitative factor is no longer relevant. The removal of this qualitative factor did not result in a significant adjustment to the recorded allowance for loan loss balance. The Company determines its individual reserves during its quarterly review of substandard loans. This process involves reviewing all loans with a risk grade of 6 or greater and an outstanding balance of $250,000 or more, regardless of the loans impairment classification. Effective March 31, 2013, management increased the dollar threshold of this review process from $50,000 to $250,000. The threshold change resulted in loans totaling $4.3 million at September 30, 2013 being removed from the individual impairment review process and being placed in the collective review process. These loans are now subject to general reserves. Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on nonimpaired loans. Management considers those loans graded substandard, but not classified as impaired, to be higher risk loans and, therefore, makes specific allocations to the allowance for those loans if warranted. The total of such loans is $5.3 million and $13.4 million as of September 30, 2013 and 2012, respectively. Specific allowance allocations were made for these loans totaling $295 thousand and $1.2 million as of September 30, 2013 and 2012, respectively. Since these loans are not considered impaired, both the loan balance and related specific allocation are included in the “Collectively Evaluated for Impairment” column of the following tables. At September 30, 2013, impaired loans totaling $3.34 million were below the $250,000 review threshold and were not individually reviewed for impairment. Those loans were subject to the bank’s general loan loss reserve methodology and are included in the “Collectively Evaluated for Impairment” column of the following tables. Likewise, at September 30, 2012, impaired loans totaling $944 thousand were below the $50,000 review threshold and were subject to the bank’s general loan loss reserve methodology and are included in the “Collectively Evaluated for Impairment” column of the following tables. The following tables present breakdowns of the allowance for loan losses, segregated by impairment methodology for September 30, 2013 and 2012:
September 30, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Ending Allowance Balance |  |  | Ending Loan Balance |
|  | Individually |  |  | Collectively |  |  |  |  |  | Individually |  |  | Collectively |  |  |  |
|  | Evaluated for |  |  | Evaluated for |  |  |  |  |  | Evaluated for |  |  | Evaluated for |  |  |  |
|  | Impairment |  |  | Impairment |  |  | Total |  |  | Impairment |  |  | Impairment |  |  | Total |
Commercial and Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 108 |  |  | $ | 914 |  |  | $ | 1,022 |  |  | $ | 1,555 |  |  | $ | 47,607 |  |  | $ | 49,162 |
Agricultural |  |  | -- |  |  |  | 297 |  |  |  | 297 |  |  |  | -- |  |  |  | 17,613 |  |  |  | 17,613 |
Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Construction |  |  | 573 |  |  |  | 1,332 |  |  |  | 1,905 |  |  |  | 7,702 |  |  |  | 37,248 |  |  |  | 44,950 |
Residential Construction |  |  | -- |  |  |  | 138 |  |  |  | 138 |  |  |  | -- |  |  |  | 4,680 |  |  |  | 4,680 |
Commercial |  |  | 1,559 |  |  |  | 3,709 |  |  |  | 5,268 |  |  |  | 22,729 |  |  |  | 312,715 |  |  |  | 335,444 |
Residential |  |  | 774 |  |  |  | 2,606 |  |  |  | 3,380 |  |  |  | 6,949 |  |  |  | 200,809 |  |  |  | 207,758 |
Farmland |  |  | 202 |  |  |  | 109 |  |  |  | 311 |  |  |  | 3,583 |  |  |  | 45,705 |  |  |  | 49,288 |
Consumer and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer |  |  | -- |  |  |  | 277 |  |  |  | 277 |  |  |  | -- |  |  |  | 26,235 |  |  |  | 26,235 |
Other |  |  | -- |  |  |  | 353 |  |  |  | 353 |  |  |  | -- |  |  |  | 12,914 |  |  |  | 12,914 |
Total End of Period Balance |  | $ | 3,216 |  |  | $ | 9,735 |  |  | $ | 12,951 |  |  | $ | 42,518 |  |  | $ | 705,526 |  |  | $ | 748,044 |
September 30, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Ending Allowance Balance |  |  | Ending Loan Balance |
|  | Individually |  |  | Collectively |  |  |  |  |  | Individually |  |  | Collectively |  |  |  |
|  | Evaluated for |  |  | Evaluated for |  |  |  |  |  | Evaluated for |  |  | Evaluated for |  |  |  |
|  | Impairment |  |  | Impairment |  |  | Total |  |  | Impairment |  |  | Impairment |  |  | Total |
Commercial and Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 514 |  |  | $ | 408 |  |  | $ | 922 |  |  | $ | 1,701 |  |  | $ | 52,580 |  |  | $ | 54,281 |
Agricultural |  |  | -- |  |  |  | 294 |  |  |  | 294 |  |  |  | -- |  |  |  | 12,594 |  |  |  | 12,594 |
Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Construction |  |  | 1,786 |  |  |  | 318 |  |  |  | 2,104 |  |  |  | 18,743 |  |  |  | 35,309 |  |  |  | 54,052 |
Residential Construction |  |  | -- |  |  |  | 138 |  |  |  | 138 |  |  |  | -- |  |  |  | 6,038 |  |  |  | 6,038 |
Commercial |  |  | 864 |  |  |  | 5,693 |  |  |  | 6,557 |  |  |  | 34,165 |  |  |  | 277,228 |  |  |  | 311,393 |
Residential |  |  | 1,050 |  |  |  | 2,435 |  |  |  | 3,485 |  |  |  | 7,751 |  |  |  | 189,508 |  |  |  | 197,259 |
Farmland |  |  | -- |  |  |  | 331 |  |  |  | 331 |  |  |  | 2,277 |  |  |  | 47,201 |  |  |  | 49,478 |
Consumer and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer |  |  | -- |  |  |  | 253 |  |  |  | 253 |  |  |  | 11 |  |  |  | 29,574 |  |  |  | 29,585 |
Other |  |  | -- |  |  |  | 305 |  |  |  | 305 |  |  |  | -- |  |  |  | 11,842 |  |  |  | 11,842 |
Total End of Period Balance |  | $ | 4,214 |  |  | $ | 10,175 |  |  | $ | 14,389 |  |  | $ | 64,648 |  |  | $ | 661,874 |  |  | $ | 726,522 |

X
- Definition The entire disclosure for allowance for credit losses. + References No definition available. + Details
Name: | us-gaap_AllowanceForCreditLossesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_LoansAndLeasesReceivableAllowanceAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration