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Allowance for Loan Losses

6 Months Ended

Jun. 30, 2012

Allowance for Loan Losses [Abstract]

Note 4.

Allowance for Loan Losses

Transactions in the allowance for loan losses for the six months ended June 30, 2012 and 2011 and for the year ended December 31, 2011 were as follows:


	(in thousands)
	June 30, 2012			December 31, 2011			June 30, 2011
Balance at beginning of year	$	12,937		$	16,036		$	16,036
Provision charged to operating expense		2,650			12,380			3,820
Loan recoveries		196			310			156
Loan charge-offs		(1,784	)		(15,789	)		(6,234	)

Balance at end of period	$	13,999		$	12,937		$	13,778

The following tables present, as of June 30, 2012 and December 31, 2011, the total allowance for loan losses, the allowance by impairment methodology and loans by impairment methodology.


	June 30, 2012 (in thousands)
	Construction and Land Development			Secured by 1-4 Family Residential			Other Real Estate			Commercial and Industrial			Consumer and Other Loans			Total
Allowance for loan losses:
Beginning Balance, December 31, 2011	$	2,843		$	3,766		$	5,192		$	963		$	173		$	12,937
Charge-offs		(369	)		(562	)		(674	)		(74	)		(105	)		(1,784	)
Recoveries		1			2			52			16			125			196
Provision for loan losses		700			993			1,285			(264	)		(64	)		2,650

Ending Balance, June 30, 2012	$	3,175		$	4,199		$	5,855		$	641		$	129		$	13,999


Ending Balance:
Individually evaluated for impairment		1,145			972			1,033			55			—			3,205
Collectively evaluated for impairment		2,030			3,227			4,822			586			129			10,794

Loans:
Ending Balance		47,843			128,229			174,212			24,937			8,914			384,135

Individually evaluated for impairment		5,256			5,460			10,813			402			—			21,931
Collectively evaluated for impairment		42,587			122,769			163,399			24,535			8,914			362,204

	December 31, 2011 (in thousands)
	Construction and Land Development			Secured by 1-4 Family Residential			Other Real Estate			Commercial and Industrial			Consumer and Other Loans			Total
Allowance for loan losses:
Beginning Balance, December 31, 2010	$	4,050		$	1,681		$	9,187		$	858		$	260		$	16,036
Charge-offs		(2,983	)		(4,639	)		(7,551	)		(348	)		(268	)		(15,789	)
Recoveries		50			6			—			3			251			310
Provision for loan losses		1,726			6,718			3,556			450			(70	)		12,380

Ending Balance, December 31, 2011	$	2,843		$	3,766		$	5,192		$	963		$	173		$	12,937


Ending Balance:
Individually evaluated for impairment		930			848			351			309			—			2,438
Collectively evaluated for impairment		1,913			2,918			4,841			654			173			10,499

Loans:
Ending Balance		48,363			122,339			181,141			29,446			11,151			392,440

Individually evaluated for impairment		7,640			6,860			10,940			480			—			25,920
Collectively evaluated for impairment		40,723			115,479			170,201			28,966			11,151			366,520

Impaired loans and the related allowance at June 30, 2012 and December 31, 2011, were as follows:


	June 30, 2012 (in thousands)
	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
Real estate loans:
Construction and land development	$	5,586	$	595	$	4,661	$	5,256	$	1,145	$	5,730	$	137
Secured by 1-4 family		6,325		1,296		4,164		5,460		972		5,287		112
Other real estate loans		15,435		7,447		3,366		10,813		1,033		10,618		108
Commercial and industrial		402		—		402		402		55		468		10
Consumer and other loans		—		—		—		—		—		—		—

Total	$	27,748	$	9,338	$	12,593	$	21,931	$	3,205	$	22,103	$	367


	December 31, 2011 (in thousands)
	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
Real estate loans:
Construction and land development	$	8,106	$	3,531	$	4,109	$	7,640	$	930	$	7,077	$	367
Secured by 1-4 family		8,566		3,495		3,365		6,860		848		6,519		301
Other real estate loans		15,165		8,135		2,805		10,940		351		23,918		396
Commercial and industrial		480		—		480		480		309		660		27
Consumer and other loans		—		—		—		—		—		—		—

Total	$	32,317	$	15,161	$	10,758	$	25,920	$	2,438	$	38,174	$	1,091

The “Recorded Investment” amounts in the table above represent the outstanding principal balance on each loan represented in the table. The “Unpaid Principal Balance” represents the outstanding principal balance on each loan represented in the table plus any amounts that have been charged off on each loan and/or payments that have been applied towards principal on non-accrual loans.

As of June 30, 2012, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $7.0 million. At June 30, 2012, $1.4 million of the loans classified as TDRs were performing under the restructured terms and were not considered non-performing assets. There were $11.4 million in TDRs at December 31, 2011. There was one other real estate loan modified under a TDR during the three and six month periods ended June 30, 2012. The pre-modification and post-modification outstanding recorded investment for this TDR totaled $2.4 million. There were no TDRs that defaulted during the three and six month periods ended June 30, 2012.