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Loans and Allowance for Loan Losses
 9 Months Ended
Sep. 30, 2012
Loans and Allowance for Loan Losses [Abstract]  
Loans and Allowance for Loan Losses
(2)   Loans and Allowance for Loan Losses

A summary of loans, by major class within our Company’s loan portfolio, at September 30, 2012 and December 31, 2011 are as follows:

 

                 

(in thousands)

   September 30,
2012		     December 31,
2011		  

Commercial, financial, and agricultural

   $ 124,977     $ 128,555  

Real estate construction - residential

     22,074       30,201  

Real estate construction - commercial

     44,751       47,697  

Real estate mortgage - residential

     222,124       203,454  

Real estate mortgage - commercial

     402,969       402,960  

Installment and other consumer

     26,006       29,884  

Unamortized loan origination fees and costs, net

     197       179  
   

 

 

    

 

 

  

Total loans

   $ 843,098     $ 842,930  
   

 

 

    

 

 

  

The Bank grants real estate, commercial, installment, and other consumer loans to customers located within the communities surrounding Jefferson City, Clinton, Warsaw, Springfield, Branson and Lee’s Summit, Missouri. As such, the Bank is susceptible to changes in the economic environment in these communities. The Bank does not have a concentration of credit in any one economic sector. Installment and other consumer loans consist primarily of the financing of vehicles. At September 30, 2012, loans with a carrying value of $452,000,000 were pledged to Federal Home Loan Bank as collateral for borrowings and letters of credit.

 

Allowance for loan losses

The following is a summary of the allowance for loan losses for the three and nine months ended September 30, 2012 and 2011:

 

                                                                 
    For the Three Months Ended September 30, 2012  

(in thousands)

   Commercial,
Financial, and
Agricultural		     Real Estate
Construction -
Residential		     Real Estate
Construction -
Commercial		     Real Estate
Mortgage -
Residential		     Real Estate
Mortgage -
Commercial		     Installment
Loans to
Individuals		     Unallocated     Total  

Balance, beginning of period

   $ 3,045     $ 709     $ 1,644     $ 3,560     $ 6,107     $ 232     $ 17     $ 15,314  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Additions:

                                                                

Provision for loan losses

     1,239       (68 )      90       118       3,241       91       (11 )      4,700  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Deductions:

                                                                

Loans charged off

     742       0       0       41       2,366       154       0       3,303  

Less recoveries on loans

     (18 )      0       0       (19 )      (96 )      (76 )      0       (209 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loans charged off

     724       0       0       22       2,270       78       0       3,094  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, end of period

   $ 3,560     $ 641     $ 1,734     $ 3,656     $ 7,078     $ 245     $ 6     $ 16,920  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                                 
    For the Nine Months Ended September 30, 2012  

(in thousands)

   Commercial,
Financial, and
Agricultural		     Real Estate
Construction -
Residential		     Real Estate
Construction -
Commercial		     Real Estate
Mortgage -
Residential		     Real Estate
Mortgage -
Commercial		     Installment
Loans to
Individuals		     Unallocated     Total  

Balance, beginning of period

   $ 1,804     $ 1,188     $ 1,562     $ 3,251     $ 5,734     $ 267     $ 3     $ 13,809  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Additions:

                                                                

Provision for loan losses

     2,469       (614 )      149       913       4,793       187       3       7,900  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Deductions:

                                                                

Loans charged off

     846       0       0       618       3,666       425       0       5,555  

Less recoveries on loans

     (133 )      (67 )      (23 )      (110 )      (217 )      (216 )      0       (766 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loans charged off

     713       (67 )      (23 )      508       3,449       209       0       4,789  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, end of period

   $ 3,560     $ 641     $ 1,734     $ 3,656     $ 7,078     $ 245     $ 6     $ 16,920  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                                                 
    For the Three Months Ended September 30, 2011  

(in thousands)

   Commercial,
Financial, and
Agricultural		     Real Estate
Construction -
Residential		     Real Estate
Construction -
Commercial		     Real Estate
Mortgage -
Residential		     Real Estate
Mortgage -
Commercial		     Installment
Loans to
Individuals		     Unallocated     Total  

Balance, beginning of period

   $ 2,533     $ 986     $ 1,330     $ 2,990     $ 4,837     $ 219     $ 968     $ 13,863  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Additions:

                                                                

Provision for loan losses

     562       284       490       (9 )      1,550       99       (966 )      2,010  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Deductions:

                                                                

Loans charged off

     1,273       311       512       219       884       122       0       3,321  

Less recoveries on loans

     0       (2 )      0       (27 )      (40 )      (69 )      0       (138 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loans charged off

     1,273       309       512       192       844       53       0       3,183  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, end of period

   $ 1,822     $ 961     $ 1,308     $ 2,789     $ 5,543     $ 265     $ 2     $ 12,690  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                                                                 
    For the Nine Months Ended September 30, 2011  

(in thousands)

   Commercial,
Financial, and
Agricultural		     Real Estate
Construction -
Residential		     Real Estate
Construction -
Commercial		     Real Estate
Mortgage -
Residential		     Real Estate
Mortgage -
Commercial		     Installment
Loans to
Individuals		     Unallocated     Total  

Balance, beginning of period

   $ 2,931     $ 2,067     $ 1,339     $ 3,922     $ 3,458     $ 231     $ 617     $ 14,565  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Additions:

                                                                

Provision for loan losses

     968       688       231       524       3,641       206       (615 )      5,643  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Deductions:

                                                                

Loans charged off

     2,146       1,858       512       1,758       1,625       369       0       8,268  

Less recoveries on loans

     (69 )      (64 )      (250 )      (101 )      (69 )      (197 )      0       (750 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net loans charged off

     2,077       1,794       262       1,657       1,556       172       0       7,518  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance, end of period

   $ 1,822     $ 961     $ 1,308     $ 2,789     $ 5,543     $ 265     $ 2     $ 12,690  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The following table provides the balance in the allowance for loan losses at September 30, 2012 and December 31, 2011, and the related loan balance by impairment methodology. Loans evaluated under ASC 310-10-35 include loans on non-accrual status, which are individually evaluated for impairment, troubled debt restructurings, and other impaired loans deemed to have similar risk characteristics. All other loans are collectively evaluated for impairment under ASC 450-20. Although the allowance for loan losses is comprised of specific and general allocations, the entire allowance is available to absorb credit losses.

 

                                                                 

(in thousands)

   Commercial,
Financial, and
Agricultural		     Real Estate
Construction -
Residential		     Real Estate
Construction -
Commercial		     Real Estate
Mortgage -
Residential		     Real Estate
Mortgage -
Commercial		     Installment
Loans to
Individuals		     Unallocated     Total  

September 30, 2012

                                                                

Allowance for loan losses:

                                                                

Individually evaluated for impairment

   $ 1,952     $ 60     $ 553     $ 858     $ 2,439     $ 0     $ 0     $ 5,862  

Collectively evaluated for impairment

     1,608       581       1,181       2,798       4,639       245       6       11,058  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 3,560     $ 641     $ 1,734     $ 3,656     $ 7,078     $ 245     $ 6     $ 16,920  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans outstanding:

                                                                

Individually evaluated for impairment

   $ 5,676     $ 2,540     $ 7,890     $ 5,307     $ 20,585     $ 0     $ 0     $ 41,998  

Collectively evaluated for impairment

     119,300       19,534       36,861       216,817       382,385       26,203       0       801,100  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 124,976     $ 22,074     $ 44,751     $ 222,124     $ 402,970     $ 26,203     $ 0     $ 843,098  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                 

December 31, 2011

                                                                

Allowance for loan losses:

                                                                

Individually evaluated for impairment

   $ 239     $ 167     $ 380     $ 653     $ 2,309     $ 0     $ 0     $ 3,748  

Collectively evaluated for impairment

     1,565       1,021       1,182       2,598       3,425       267       3       10,061  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 1,804     $ 1,188     $ 1,562     $ 3,251     $ 5,734     $ 267     $ 3     $ 13,809  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Loans outstanding:

                                                                

Individually evaluated for impairment

   $ 4,428     $ 1,147     $ 7,867     $ 6,569     $ 33,440     $ 0     $ 0     $ 53,451  

Collectively evaluated for impairment

     124,127       29,054       39,830       196,885       369,520       30,063       0       789,479  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 128,555     $ 30,201     $ 47,697     $ 203,454     $ 402,960     $ 30,063     $ 0     $ 842,930  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

Loans, or portions of loans, are charged off to the extent deemed uncollectible. Loan charge-offs reduce the allowance for loan losses, and recoveries of loans previously charged off are added back to the allowance. Once the fair value for a collateral dependent loan has been determined, any impaired amount is typically charged off unless the loan has other income streams to support repayment. For impaired loans which have other income streams to support repayment, a specific reserve is established for the amount determined to be impaired.

Impaired loans

Impaired loans totaled $42,200,000 and $53,620,000 at September 30, 2012 and December 31, 2011 respectively, and are comprised of loans on non-accrual status and loans which have been classified as troubled debt restructurings.

The categories of impaired loans at September 30, 2012 and December 31, 2011 are as follows:

 

                 

(in thousands)

   September 30,
2012		     December 31,
2011		  

Non-accrual loans

   $ 34,233     $ 46,403  

Troubled debt restructurings continuing to accrue interest

     7,967       7,217  
   

 

 

    

 

 

  

Total impaired loans

   $ 42,200     $ 53,620  
   

 

 

    

 

 

  

The following tables provide additional information about impaired loans at September 30, 2012 and December 31, 2011, respectively, segregated between loans for which an allowance has been provided and loans for which no allowance has been provided:

 

                         

(in thousands)

   Recorded
Investment		     Unpaid
Principal
Balance		     Related
Allowance		  

At September 30, 2012

                        

With no related allowance recorded:

                        

Commercial, financial and Agricultural

   $ 2,849     $ 2,955     $ 0  

Real estate - construction residential

     2,350       2,379       0  

Real estate - construction commercial

     1,879       2,110       0  

Real estate - residential

     2,138       2,501       0  

Real estate - commercial

     3,538       3,409       0  

Consumer

     202       233       0  
   

 

 

    

 

 

    

 

 

  

Total

   $ 12,956     $ 13,587     $ 0  
   

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                        

Commercial, financial and Agricultural

   $ 2,828     $ 2,877     $ 1,952  

Real estate - construction residential

     189       189       60  

Real estate - construction commercial

     6,011       6,115       553  

Real estate - residential

     3,169       3,324       858  

Real estate - commercial

     17,047       17,602       2,439  
   

 

 

    

 

 

    

 

 

  

Total

   $ 29,244     $ 30,107     $ 5,862  
   

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 42,200     $ 43,694     $ 5,862  
   

 

 

    

 

 

    

 

 

  
                         

(in thousands)

   Recorded
Investment		     Unpaid
Principal
Balance		     Related
Allowance		  

At December 31, 2011

                        

With no related allowance recorded:

                        

Commercial, financial and Agricultural

   $ 3,546     $ 3,625     $ 0  

Real estate - construction residential

     584       788       0  

Real estate - construction commercial

     1,459       1,756       0  

Real estate - residential

     2,315       2,654       0  

Real estate - commercial

     15,151       21,190       0  

Consumer

     168       177       0  
   

 

 

    

 

 

    

 

 

  

Total

   $ 23,223     $ 30,190     $ 0  
   

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                        

Commercial, financial and Agricultural

   $ 882     $ 904     $ 239  

Real estate - construction residential

     563       563       167  

Real estate - construction commercial

     6,409       6,448       380  

Real estate - residential

     4,254       4,265       653  

Real estate - commercial

     18,289       18,780       2,309  
   

 

 

    

 

 

    

 

 

  

Total

   $ 30,397     $ 30,960     $ 3,748  
   

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 53,620     $ 61,150     $ 3,748  
   

 

 

    

 

 

    

 

 

  

The following table presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2012 and 2011:

 

                                                                 
    For the Three Months Ended September 30,     For the Nine Months Ended September 30,  
    2012     2011     2012     2011  

(in thousands)

   Average
Recorded
Investment		     Interest
Recognized
For the
Period Ended		     Average
Recorded
Investment		     Interest
Recognized
For the
Period Ended		     Average
Recorded
Investment		     Interest
Recognized
For the
Period Ended		     Average
Recorded
Investment		     Interest
Recognized
For the
Period Ended		  

With no related allowance recorded:

                                                                

Commercial, financial and Agricultural

   $ 3,074     $ 23     $ 3,638     $ 19     $ 3,315     $ 66     $ 3,517     $ 30  

Real estate - construction residential

     1,589       0       656       0       737       7       1,488       0  

Real estate - construction commercial

     1,879       0       8,899       0       1,653       0       9,818       0  

Real estate - residential

     2,299       5       2,583       7       3,333       47       3,631       19  

Real estate - commercial

     3,598       28       14,035       23       10,582       87       11,844       41  

Consumer

     181       0       179       2       162       1       195       3  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 12,620     $ 56     $ 29,990     $ 51     $ 19,782     $ 208     $ 30,493     $ 93  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

With an allowance recorded:

                                                                

Commercial, financial and Agricultural

   $ 2,890     $ 7     $ 963     $ 5     $ 2,615     $ 21     $ 661     $ 10  

Real estate - construction residential

     189       0       0       0       189       0       0       0  

Real estate - construction commercial

     6,192       0       186       0       6,180       0       83       0  

Real estate - residential

     3,037       4       3,664       28       2,566       11       3,286       83  

Real estate - commercial

     15,072       2       18,961       2       14,209       1       17,686       5  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 27,380     $ 13     $ 23,774     $ 35     $ 25,759     $ 33     $ 21,716     $ 98  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total impaired loans

   $ 40,000     $ 69     $ 53,764     $ 86     $ 45,541     $ 241     $ 52,209     $ 191  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

The specific reserve component of our Company’s allowance for loan losses at September 30, 2012 and December 31, 2011 was determined by using fair values of the underlying collateral obtained through independent appraisals and internal evaluations, or by discounting the total expected future cash flows. The recorded investment varies from the unpaid principal balance primarily due to partial charge-offs taken resulting from current appraisals received. The amount recognized as interest income on impaired loans continuing to accrue interest, primarily related to troubled debt restructurings, was $69,000 and $86,000, for the three months ended September 30, 2012 and 2011, respectively, and $241,000 and $191,000 for the nine months ended September 30, 2012 and 2011, respectively. The average recorded investment in impaired loans is calculated on a monthly basis during the periods reported. Contractual interest due on loans in non-accrual status was $966,000 at September 30, 2012 compared to $1,751,000 at September 30, 2011. Interest income recognized on loans in non-accrual status was $8,000 and $41,000 for the three and nine months ended September 30, 2011. During the three and nine months ended September 30, 2012 there was no significant interest collected on loans in non-accrual status. Contractual interest due on non-accrual loans decreased from $1,110,000 at June 30, 2012 to $966,000 at September 30, 2012 due to several significant loans that went to foreclosure during the third quarter of 2012.

Delinquent and Non-Accrual Loans

The delinquency status of loans is determined based on the contractual terms of the notes. Borrowers are generally classified as delinquent once payments become 30 days or more past due. The following table provides aging information for our Company’s past due and non-accrual loans at September 30, 2012 and December 31, 2011.

 

                                         

(in thousands)

   Current or
Less Than
30 Days
Past Due		     30 - 89 Days
Past Due		     90 Days
Past Due
And Still
Accruing		     Non-Accrual     Total  

September 30, 2012

                                        

Commercial, Financial, and Agricultural

   $ 121,195     $ 555     $ 0     $ 3,227     $ 124,977  

Real Estate Construction - Residential

     19,534       0       0       2,540       22,074  

Real Estate Construction - Commercial

     36,803       58       0       7,890       44,751  

Real Estate Mortgage - Residential

     214,390       3,012       0       4,722       222,124  

Real Estate Mortgage - Commercial

     386,438       879       0       15,652       402,969  

Installment and Other Consumer

     25,596       400       5       202       26,203  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 803,956     $ 4,904     $ 5     $ 34,233     $ 843,098  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

December 31, 2011

                                        

Commercial, Financial, and Agricultural

   $ 126,244     $ 243     $ 0     $ 2,068     $ 128,555  

Real Estate Construction - Residential

     29,054       0       0       1,147       30,201  

Real Estate Construction - Commercial

     39,822       0       8       7,867       47,697  

Real Estate Mortgage - Residential

     195,779       3,513       9       4,153       203,454  

Real Estate Mortgage - Commercial

     371,000       924       36       31,000       402,960  

Installment and Other Consumer

     29,282       612       1       168       30,063  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 791,181     $ 5,292     $ 54     $ 46,403     $ 842,930  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

Credit Quality

The following table provides information about the credit quality of the loan portfolio using our Company’s internal rating system reflecting management’s risk assessment. Loans are placed on watch status when (1) one or more weaknesses which could jeopardize timely liquidation exits; or (2) the margin or liquidity of an asset is sufficiently tenuous that adverse trends could result in a collection problem. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified may have a well defined weakness or weaknesses that jeopardize the repayment of the debt. Such loans are characterized by the distinct possibility that our Company may sustain some loss if the deficiencies are not corrected. It is our Company’s policy to discontinue the accrual of interest income on loans when management believes that the collection of interest or principal is doubtful. Loans are placed on non-accrual status when (1) deterioration in the financial condition of the borrower exists for which payment of full principal and interest is not expected, or (2) payment of principal or interest has been in default for a period of 90 days or more and the asset is not both well secured and in the process of collection. Subsequent interest payments received on such loans are applied to principal if any doubt exists as to the collectability of such principal; otherwise, such receipts are recorded as interest income on a cash basis.

 

                                                         

(in thousands)

   Commercial     Real Estate
Construction -
Residential		     Real Estate
Construction -
Commercial		     Real Estate
Mortgage -
Residential		     Real Estate
Mortgage -
Commercial		     Installment
and other
Consumer		     Total  

At September 30, 2012

                                                        

Watch

   $ 21,571     $ 4,006     $ 7,485     $ 24,617     $ 27,189     $ 648     $ 85,516  

Substandard

     6,051       390       748       4,172       12,358       442       24,161  

Non-accrual

     3,227       2,540       7,890       4,722       15,652       202       34,233  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 30,849     $ 6,936     $ 16,123     $ 33,511     $ 55,199     $ 1,292     $ 143,910  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

At December 31, 2011

                                                        

Watch

   $ 22,206     $ 9,644     $ 9,338     $ 13,231     $ 24,392     $ 557     $ 79,368  

Substandard

     4,142       842       1,189       4,269       8,004       444       18,890  

Non-accrual

     2,068       1,147       7,867       4,153       31,000       168       46,403  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 28,416     $ 11,633     $ 18,394     $ 21,653     $ 63,396     $ 1,169     $ 144,661  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Troubled Debt Restructurings

At September 30, 2012, loans classified as troubled debt restructurings (TDRs) totaled $21,711,000, of which $13,744,000 was on non-accrual status and $7,967,000 was on accrual status. At December 31, 2011, loans classified as TDRs totaled $32,165,000, of which $24,948,000 was on non-accrual status and $7,217,000 was on accrual status. When an individual loan is determined to be a TDR, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the underlying collateral less applicable selling costs. Accordingly, specific reserves of $1,576,000 and $1,522,000 were allocated to the allowance for loan losses at September 30, 2012 and December 31, 2011, respectively.

 

The following table summarizes loans that were modified as TDRs during the nine months ended September 30, 2012:

 

                         
    The Nine Months Ended September 30, 2012  
    Recorded Investment (1)  

(in thousands)

   Number of
Contracts		     Pre-
Modification		     Post-
Modification		  

Troubled Debt Restructurings

                        

Commercial, financial and agricultural

     3     $ 297     $ 280  

Real estate construction - commercial

     1       43       42  

Real estate mortgage - commercial

     2       644       644  
   

 

 

    

 

 

    

 

 

  

Total

     6     $ 984     $ 966  
   

 

 

    

 

 

    

 

 

  

 

(1) The amounts reported post-modification are inclusive of all partial pay-downs and charge-offs, and no portion of the debt was forgiven. Loans modified as a TDR that were fully paid down, charged-off or foreclosed upon during the period ended are not reported.

According to guidance provided in ASC subtopic 310-40, Troubled Debt Restructurings by Creditors, a loan restructuring or modification of terms is a TDR if the creditor, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. Our Company’s portfolio of loans classified as TDRs include concessions such as interest rates below the current market rate, deferring principal payments, and extending maturity dates. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is ultimately repaid in full, charged-off, or the collateral for the loan is foreclosed and sold. Our Company considers a loan in TDR status in default when the borrower’s payment according to the modified terms is at least 90 days past due or has defaulted due to expiration of the loan’s maturity date. During the three months ended September 30, 2012 there were no new loans meeting the TDR criteria. During the nine months ended September 30, 2012, six loans meeting the TDR criteria were modified. There were no loans modified as a TDR that defaulted during the three and nine months ended September 30, 2012, and within twelve months of their modification date.