Note 5 – Allowance for Loan Losses

As discussed in Note 2, due to the deconsolidation of the Bank during the second quarter of 2011, no loans or allowance for loan losses were reported on the Company’s consolidated balance sheet as of June 30, 2011. Activity in the allowance for loan losses for the three and six months ended June 30, 2011 and 2010 follows:

	Successor Company			Predecessor Company			Successor Company			Predecessor Company
	Three Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2011			Six Months Ended June 30, 2010
Balance, beginning of period	$	877		$	27,829		$	402		$	29,083
Provision for loan losses charged to expense		136			7,700			621			12,625
Loans charged off		(14	)		(8,634	)		(24	)		(14,987	)
Recoveries of loans previously charged off		-			815			-			989
Reduction due to deconsolidation of the Bank		(999	)		-			(999	)		-
Balance, end of period	$	-		$	27,710		$	-		$	27,710

Roll forward of allowance for loan losses for the three months ended June 30, 2011:

(Successor Company)	March 31, 2011		Provision			Net Charge-offs			Reduction Due to Deconsolidation of the Bank			June 30, 2011
Real estate mortgage loans:
Commercial	$	158	$	50		$	-		$	(208	)	$	-
Residential		341		29			-			(370	)		-
Construction and vacant land		61		14			-			(75	)		-
Commercial and agricultural loans		55		(18	)		-			(37	)		-
Indirect auto loans		217		65			(14	)		(268	)		-
Home equity loans		30		(5	)		-			(25	)		-
Other consumer loans		15		1			-			(16	)		-
Total loans	$	877	$	136		$	(14	)	$	(999	)	$	-

Roll forward of allowance for loan losses for the six months ended June 30, 2011:

(Successor Company)	December 31, 2010		Provision		Net Charge-offs			Reduction Due to Deconsolidation of the Bank			June 30, 2011
Real estate mortgage loans:
Commercial	$	7	$	201	$	-		$	(208	)	$	-
Residential		164		206		-			(370	)		-
Construction and vacant land		-		75		-			(75	)		-
Commercial and agricultural loans		24		13		-			(37	)		-
Indirect auto loans		184		108		(24	)		(268	)		-
Home equity loans		14		11		-			(25	)		-
Other consumer loans		9		7		-			(16	)		-
Total loans	$	402	$	621	$	(24	)	$	(999	)	$	-

(Successor Company)
December 31, 2010	Allowance for Loan Losses						Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Purchased Credit- Impaired		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Purchased Credit- Impaired
Real estate mortgage loans:
Commercial	$	-	$	7	$	-	$	-	$	552	$	599,820
Residential		-		164		-		-		11,868		213,983
Farmland		-		-		-		-		-		12,083
Construction and vacant land		-		-		-		-		-		38,956
Commercial and agricultural		-		24		-		-		4,901		55,740
Indirect auto loans		-		184		-		-		6,295		21,744
Home equity loans		-		14		-		-		25,305		4,353
Other consumer loans		-		9		-		-		5,546		3,183
Total loans	$	-	$	402	$	-	$	-	$	54,467	$	949,862