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Allowance for Loan Losses | 9 Months Ended
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Sep. 30, 2012
Allowance for Loan Losses [Abstract] |
Allowance for Loan Losses | Note 4. Allowance for Loan Losses Transactions in the allowance for loan losses for the nine months ended September 30, 2012 and 2011 and for the year ended December 31, 2011 were as follows:
|  | (in thousands) |
|  | September 30, 2012 |  |  | December 31, 2011 |  |  | September 30, 2011 |
Balance at beginning of year |  | $ | 12,937 |  |  | $ | 16,036 |  |  | $ | 16,036 |
Provision charged to operating expense |  |  | 3,455 |  |  |  | 12,380 |  |  |  | 9,395 |
Loan recoveries |  |  | 240 |  |  |  | 310 |  |  |  | 208 |
Loan charge-offs |  |  | (2,583 | ) |  |  | (15,789 | ) |  |  | (7,137 | )
Balance at end of period |  | $ | 14,049 |  |  | $ | 12,937 |  |  | $ | 18,502 |
The following tables present, as of September 30, 2012 and December 31, 2011, the total allowance for loan losses, the allowance by impairment methodology and loans by impairment methodology.
|  | September 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 | ) |  |  | (761 | ) |  |  | (1,042 | ) |  |  | (261 | ) |  |  | (150 | ) |  |  | (2,583 | )
Recoveries |  |  | 1 |  |  |  | 2 |  |  |  | 58 |  |  |  | 24 |  |  |  | 155 |  |  |  | 240 |
Provision for loan losses |  |  | 1,059 |  |  |  | 992 |  |  |  | 1,531 |  |  |  | (75 | ) |  |  | (52 | ) |  |  | 3,455 |
Ending Balance, September 30, 2012 |  | $ | 3,534 |  |  | $ | 3,999 |  |  | $ | 5,739 |  |  | $ | 651 |  |  | $ | 126 |  |  | $ | 14,049 |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  |  | 1,728 |  |  |  | 709 |  |  |  | 762 |  |  |  | 40 |  |  |  | — |  |  |  | 3,239 |
Collectively evaluated for impairment |  |  | 1,806 |  |  |  | 3,290 |  |  |  | 4,977 |  |  |  | 611 |  |  |  | 126 |  |  |  | 10,810 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  |  | 44,725 |  |  |  | 128,354 |  |  |  | 175,122 |  |  |  | 24,216 |  |  |  | 8,335 |  |  |  | 380,752 |
Individually evaluated for impairment |  |  | 6,353 |  |  |  | 4,758 |  |  |  | 8,597 |  |  |  | 164 |  |  |  | — |  |  |  | 19,872 |
Collectively evaluated for impairment |  |  | 38,372 |  |  |  | 123,596 |  |  |  | 166,525 |  |  |  | 24,052 |  |  |  | 8,335 |  |  |  | 360,880 |
|  | 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 September 30, 2012 and December 31, 2011, were as follows:
|  | September 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 |  | $ | 6,683 |  |  | $ | 596 |  |  | $ | 5,758 |  |  | $ | 6,353 |  |  | $ | 1,728 |  |  | $ | 5,516 |  |  | $ | 238 |
Secured by 1-4 family |  |  | 5,801 |  |  |  | 1,955 |  |  |  | 2,803 |  |  |  | 4,758 |  |  |  | 709 |  |  |  | 5,244 |  |  |  | 143 |
Other real estate loans |  |  | 12,673 |  |  |  | 5,569 |  |  |  | 3,027 |  |  |  | 8,597 |  |  |  | 762 |  |  |  | 10,155 |  |  |  | 88 |
Commercial and industrial |  |  | 165 |  |  |  | — |  |  |  | 164 |  |  |  | 164 |  |  |  | 40 |  |  |  | 386 |  |  |  | 6 |
Consumer and other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 25,322 |  |  | $ | 8,120 |  |  | $ | 11,752 |  |  | $ | 19,872 |  |  | $ | 3,239 |  |  | $ | 21,302 |  |  | $ | 475 |
|  | 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 September 30, 2012, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $5.4 million. At September 30, 2012, $1.6 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. The following tables provide further information regarding loans modified under TDRs during the three and nine month periods ended September 30, 2012 and 2011:
|  | For the three months ended September 30, 2012 |  |  | For the three months ended September 30, 2011 |
|  | (dollars in thousands) |  |  | (dollars in thousands) |
|  | Number of Contracts |  |  | Pre- modification outstanding recorded investment |  |  | Post- modification outstanding recorded investment |  |  | Number of Contracts |  |  | Pre- modification outstanding recorded investment |  |  | Post- modification outstanding recorded investment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | 1 |  |  | $ | 701 |  |  | $ | 357 |
Secured by 1-4 family |  |  | 1 |  |  |  | 183 |  |  |  | 183 |  |  |  | — |  |  |  | — |  |  |  | — |
Other real estate loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 1 |  |  | $ | 183 |  |  | $ | 183 |  |  |  | 1 |  |  | $ | 701 |  |  | $ | 357 |
|  | For the nine months ended September 30, 2012 |  |  | For the nine months ended September 30, 2011 |
|  | (dollars in thousands) |  |  | (dollars in thousands) |
|  | Number of Contracts |  |  | Pre- modification outstanding recorded investment |  |  | Post- modification outstanding recorded investment |  |  | Number of Contracts |  |  | Pre- modification outstanding recorded investment |  |  | Post- modification outstanding recorded investment |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | 1 |  |  | $ | 701 |  |  | $ | 357 |
Secured by 1-4 family |  |  | 1 |  |  |  | 183 |  |  |  | 183 |  |  |  | 2 |  |  |  | 575 |  |  |  | 575 |
Other real estate loans |  |  | 1 |  |  |  | 2,426 |  |  |  | 2,426 |  |  |  | 12 |  |  |  | 11,724 |  |  |  | 11,750 |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 2 |  |  | $ | 2,609 |  |  | $ | 2,609 |  |  |  | 15 |  |  | $ | 13,000 |  |  | $ | 12,682 |
For the three and nine months ended September 30, 2012 and 2011, there were no troubled debt restructurings that subsequently defaulted within twelve months of the loan modification. Management defines default as over ninety days past due during the twelve month period subsequent to the modification.

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