Note 4.

Loans and Leases

Summary of Major Loan and Lease Categories


(Dollars in thousands)	At June 30, 2013			At December 31, 2012

Commercial, financial and agricultural	$	439,907		$	468,421
Real estate-commercial		580,400			530,122
Real estate-construction		84,027			91,250
Real estate-residential secured for business purpose		32,329			35,179
Real estate-residential secured for personal purpose		144,002			146,526
Real estate-home equity secured for personal purpose		84,109			82,727
Loans to individuals		43,598			43,780
Lease financings		91,621			83,857

Total loans and leases held for investment, net of deferred income	$	1,499,993		$	1,481,862


Unearned lease income, included in the above table	$	(13,437	)	$	(12,355	)
Net deferred costs (fees), included in the above table	$	2,205		$	1,432
Overdraft deposits included in the above table	$	161		$	128

Overdraft deposits are re-classified as loans and are included in the total loans and leases on the balance sheet.

Age Analysis of Past Due Loans and Leases

The following presents, by class of loans and leases, an aging of past due loans and leases, loans and leases which are current and the recorded investment in loans and leases greater than 90 days past due which are accruing interest at June 30, 2013 and December 31, 2012:

(Dollars in thousands)

30-59
Days
Past Due*

60-89
Days Past
Due*

Greater
Than
90 Days
Past Due*

Total
Past Due*

Current*

Total Loans
and Leases
Held for
Investment

Recorded
Investment
Greater than
90 Days
Past Due
and Accruing
Interest*

At June 30, 2013

Commercial, financial and agricultural

949

274

—

1,223

435,538

439,907

—

Real estate–commercial real estate and construction:

Commercial real estate

1,391

—

1,391

560,112

580,400

—

Construction

—

68,453

84,027

—

Real estate–residential and home equity:

Residential secured for business purpose

353

—

390

31,770

32,329

—

Residential secured for personal purpose

2,176

155

221

2,552

140,720

144,002

221

Home equity secured for personal purpose

459

610

83,499

84,109

Loans to individuals

519

276

190

985

42,575

43,598

190

Lease financings

1,010

324

1,370

89,902

91,621

Total

6,857

1,143

521

8,521

1,452,569

1,499,993

521

*	Excludes impaired loans and leases.


(Dollars in thousands)	30-59 Days Past Due*		60-89 Days Past Due*		Greater Than 90 Days Past Due*		Total Past Due*		Current*		Total Loans and Leases Held for Investment		Recorded Investment Greater than 90 Days Past Due and Accruing Interest*

At December 31, 2012

Commercial, financial and agricultural	$	416	$	95	$	—	$	511	$	464,588	$	468,421	$	—
Real estate–commercial real estate and construction:
Commercial real estate		1,173		—		—		1,173		504,086		530,122		—
Construction		306		—		—		306		74,959		91,250		—
Real estate–residential and home equity:
Residential secured for business purpose		1,663		—		—		1,663		33,344		35,179		—
Residential secured for personal purpose		1,617		152		—		1,769		143,953		146,526		—
Home equity secured for personal purpose		276		64		54		394		82,333		82,727		54
Loans to individuals		551		115		347		1,013		42,729		43,780		347
Lease financings		1,001		273		40		1,314		82,138		83,857		40

Total	$	7,003	$	699	$	441	$	8,143	$	1,428,130	$	1,481,862	$	441

*	Excludes impaired loans and leases.

Nonaccrual and Troubled Debt Restructured Loans and Lease Modifications

The following presents, by class of loans and leases, nonaccrual loans and leases (including nonaccrual troubled debt restructured loans and lease modifications) and accruing troubled debt restructured loans and lease modifications at June 30, 2013 and December 31, 2012:


	At June 30, 2013						At December 31, 2012
(Dollars in thousands)	Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Total Impaired Loans and Leases		Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Total Impaired Loans and Leases*

Commercial, financial and agricultural	$	1,708	$	1,438	$	3,146	$	2,842	$	480	$	3,322
Real estate–commercial real estate and construction:
Commercial real estate		8,726		10,171		18,897		14,340		10,523		24,863
Construction		13,531		2,043		15,574		13,588		2,397		15,985
Real estate–residential and home equity:
Residential secured for business purpose		169		—		169		172		—		172
Residential secured for personal purpose		730		—		730		804		—		804
Loans to individuals		—		38		38		—		38		38
Lease financings		343		6		349		386		19		405

Total	$	25,207	$	13,696	$	38,903	$	32,132	$	13,457	$	45,589

*	Includes non-accrual troubled debt restructured loans and lease modifications of $503 thousand and $579 thousand at June 30, 2013 and December 31, 2012, respectively.

Credit Quality Indicators

The following tables present by class, the recorded investment in loans and leases held for investment by credit quality indicator at June 30, 2013 and December 31, 2012.

The Corporation employs a ten (10) grade risk rating system related to the credit quality of commercial loans and residential real estate loans secured for a business purpose of which the first six categories are pass categories (credits not adversely rated). The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating. Loans with risk ratings of one through five are reviewed based on the relationship dollar amount with the borrower: loans with a relationship total of $2.5 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.5 million but greater than $500 thousand are reviewed annually based on the borrower’s fiscal year; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with risk ratings of six are also reviewed based on the relationship dollar amount with the borrower: loans with a relationship balance of $2.0 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.0 million but greater than $500 thousand are reviewed annually; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with risk ratings of seven are reviewed at least quarterly, and as often as monthly, at management’s discretion. Loans with risk ratings of eight through ten are reviewed monthly.

Cash Secured – No credit risk

Fully Secured – Negligible credit risk

Strong – Minimal credit risk

Satisfactory – Nominal credit risk

Acceptable – Moderate credit risk

Pre-Watch – Marginal, but stable credit risk

Special Mention – Potential weakness

Substandard – Well-defined weakness

Doubtful – Collection in-full improbable

10.

Loss – Considered uncollectible

Commercial Credit Exposure Credit Risk by Internally Assigned Grades


	Commercial, Financial and Agricultural				Real Estate–Commercial				Real Estate–Construction				Real Estate–Residential Secured for Business Purpose
(Dollars in thousands)	At June 30, 2013		At December 31, 2012		At June 30, 2013		At December 31, 2012		At June 30, 2013		At December 31, 2012		At June 30, 2013		At December 31, 2012

Grade:
1. Cash secured/ 2. Fully secured	$	851	$	2,263	$	—	$	—	$	—	$	—	$	—	$	—
3. Strong		6,106		5,227		9,502		9,591		6,241		3,907		—		—
4. Satisfactory		38,401		40,747		21,123		25,837		1,701		1,783		113		335
5. Acceptable		243,168		260,042		353,806		321,194		31,900		26,331		23,593		22,764
6. Pre-watch		105,622		106,436		140,034		110,476		27,942		42,190		4,412		8,458
7. Special Mention		23,053		31,825		13,415		16,187		—		548		1,902		288
8. Substandard		22,706		21,881		42,520		45,844		16,243		16,491		2,309		3,334
9. Doubtful		—		—		—		993		—		—		—		—
10. Loss		—		—		—		—		—		—		—		—

Total	$	439,907	$	468,421	$	580,400	$	530,122	$	84,027	$	91,250	$	32,329	$	35,179

The Corporation monitors the credit risk profile by payment activity for the following classifications of loans and leases: residential real estate loans secured for a personal purpose, home equity loans secured for a personal purpose, loans to individuals and lease financings. Nonperforming loans and leases are loans past due 90 days or more, loans and leases on non-accrual of interest and troubled debt restructured loans and lease modifications. Performing loans and leases are reviewed only if the loan becomes 60 days or more past due. Nonperforming loans and leases are reviewed monthly. Performing loans and leases have a nominal to moderate risk of loss. Nonperforming loans and leases are loans or leases with a well-defined weakness and where collection in-full is improbable.

Credit Exposure — Real Estate — Residential Secured for Personal Purpose, Real Estate — Home Equity Secured for Personal Purpose, Loans to individuals, Lease Financing Credit Risk Profile by Payment Activity


	Real Estate–Residential Secured for Personal Purpose				Real Estate–Home Equity Secured for Personal Purpose				Loans to individuals				Lease Financing
(Dollars in thousands)	At June 30, 2013		At December 31, 2012		At June 30, 2013		At December 31, 2012		At June 30, 2013		At December 31, 2012		At June 30, 2013		At December 31, 2012

Performing	$	143,051	$	145,722	$	84,035	$	82,673	$	43,370	$	43,395	$	91,236	$	83,412
Nonperforming		951		804		74		54		228		385		385		445

Total	$	144,002	$	146,526	$	84,109	$	82,727	$	43,598	$	43,780	$	91,621	$	83,857

Risks associated with lending activities include, among other things, the impact of changes in interest rates and economic conditions, which may adversely impact the ability of borrowers to repay outstanding loans, and impact the value of the associated collateral.

Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans with a business purpose are generally perceived as having more risk of default than residential real estate loans with a personal purpose and consumer loans. These types of loans involve larger loan balances to a single borrower or groups of related borrowers. Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful development of their properties and factors affecting residential real estate borrowers.

Commercial, financial and agricultural business loans are typically based on the borrowers’ ability to repay the loans from the cash flow of their businesses. These loans may involve greater risk because the availability of funds to repay each loan depends substantially on the success of the business itself. In addition, the collateral securing the loans often depreciates over time, is difficult to appraise and liquidate and fluctuates in value based on the success of the business.

Risk of loss on a construction loan depends largely upon whether our initial estimate of the property’s value at completion of construction equals or exceeds the cost of the property construction (including interest). During the construction phase, a number of factors can result in delays and cost overruns. If estimates of value are inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan or by seizure of collateral. Included in real estate-construction is track development financing. Risk factors related to track development financing include the demand for residential housing and the real estate valuation market. When projects move slower than anticipated, the properties may have significantly lower values than when the original underwriting was completed, resulting in lower collateral values to support the loan. Extended time frames also cause the interest carrying cost for a project to be higher than the builder projected, negatively impacting the builder’s profit and cash flow and, therefore, their ability to make principal and interest payments.

Commercial real estate loans and residential real estate loans with a business purpose secured by owner-occupied properties are dependent upon the successful operation of the borrower’s business. If the operating company suffers difficulties in terms of sales volume and/or profitability, the borrower’s ability to repay the loan may be impaired. Loans secured by properties where repayment is dependent upon payment of rent by third party tenants or the sale of the property may be impacted by loss of tenants, lower lease rates needed to attract new tenants or the inability to sell a completed project in a timely fashion and at a profit.

Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans secured for a business purpose are more susceptible to a risk of loss during a downturn in the business cycle. The Corporation has strict underwriting, review, and monitoring procedures in place, however, these procedures cannot eliminate all of the risks related to these loans.

The Corporation focuses on both assessing the borrower’s capacity and willingness to repay and on obtaining sufficient collateral. Commercial, financial and agricultural loans are generally secured by the borrower’s assets and by personal guarantees. Commercial real estate and residential real estate loans secured for a business purpose are originated primarily within the Southeastern Pennsylvania market area at conservative loan-to-value ratios and often by a guarantee of the borrowers. Management closely monitors the composition and quality of the total commercial loan portfolio to ensure that any credit concentrations by borrower or industry are closely monitored.

The Corporation originates fixed-rate and adjustable-rate real estate-residential mortgage loans that are secured by the underlying 1- to 4-family residential properties for personal purposes. Credit risk exposure in this area of lending is minimized by the evaluation of the credit worthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to underwriting policies that emphasize conservative loan-to-value ratios of generally no more than 80%. Residential mortgage loans granted in excess of the 80% loan-to-value ratio criterion are generally insured by private mortgage insurance.

In the real estate-home equity loan portfolio secured for a personal purpose, credit exposure is minimized by the evaluation of the creditworthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to the Corporation’s underwriting policies. Combined loan-to-value ratios are generally limited to 80%, but increased to 85% for the Corporation’s strongest profile borrower. Other credit considerations and compensating factors may warrant higher combined loan-to-value ratios.

Credit risk for direct consumer loans is controlled by strict adherence to conservative underwriting standards that consider debt-to-income levels and the creditworthiness of the borrower and, if secured, collateral values. These loans are included within the portfolio of loans to individuals.

The primary risks that are involved with lease financing receivables are credit underwriting and borrower industry concentrations. The Corporation has strict underwriting, review, and monitoring procedures in place to mitigate this risk. Risk also lies in the residual value of the underlying equipment. Residual values are subject to judgments as to the value of the underlying equipment that can be affected by changes in economic and market conditions and the financial viability of the residual guarantors and insurers. To the extent not guaranteed or assumed by a third party, or otherwise insured against, the Corporation bears the risk of ownership of the leased assets. This includes the risk that the actual value of the leased assets at the end of the lease term will be less than the residual value. The Corporation greatly reduces this risk primarily by using $1.00 buyout leases, in which the entire cost of the leased equipment is included in the contractual payments, leaving no residual payment at the end of the lease terms.

Reserve for Loan and Lease Losses and Recorded Investment in Loans and Leases

The following presents, by portfolio segment, a summary of the activity in the reserve for loan and lease losses, the balance in the reserve for loan and lease losses disaggregated on the basis of impairment method and the recorded investment in loans and leases disaggregated on the basis of impairment method for the three and six months ended June 30, 2013 and 2012:


(Dollars in thousands)	Commercial, Financial and Agricultural			Real Estate– Commercial and Construction			Real Estate– Residential Secured for Business Purpose			Real Estate– Residential and Home Equity Secured for Personal Purpose			Loans to Individuals			Lease Financings			Unallocated			Total

Three Months Ended June 30, 2013

Reserve for loan and lease losses:
Beginning balance	$	11,883		$	8,032		$	570		$	792		$	628		$	1,358		$	1,959		$	25,222
Charge-offs		(90	)		(3,691	)		(24	)		(23	)		(224	)		(267	)		N/A			(4,319	)
Recoveries		39			42			—			1			78			209			N/A			369
(Recovery of provision) provision		(437	)		4,279			40			314			211			(88	)		(873	)		3,446

Ending balance	$	11,395		$	8,662		$	586		$	1,084		$	693		$	1,212		$	1,086		$	24,718


Three Months Ended June 30, 2012

Reserve for loan and lease losses:
Beginning balance	$	11,701		$	13,352		$	948		$	732		$	704		$	1,160		$	2,000		$	30,597
Charge-offs		(1,458	)		(133	)		—			(2	)		(119	)		(310	)		N/A			(2,022	)
Recoveries		362			44			3			1			26			148			N/A			584
Provision (recovery of provision)		1,416			(947	)		(117	)		153			108			163			567			1,343

Ending balance	$	12,021		$	12,316		$	834		$	884		$	719		$	1,161		$	2,567		$	30,502


(Dollars in thousands)	Commercial, Financial and Agricultural			Real Estate– Commercial and Construction			Real Estate– Residential Secured for Business Purpose			Real Estate– Residential and Home Equity Secured for Personal Purpose			Loans to Individuals			Lease Financings			Unallocated			Total

Six Months Ended June 30, 2013

Reserve for loan and lease losses:
Beginning balance	$	11,594		$	7,507		$	639		$	980		$	679		$	1,326		$	2,021		$	24,746
Charge-offs		(1,161	)		(4,073	)		(74	)		(27	)		(404	)		(426	)		N/A			(6,165	)
Recoveries		87			48			8			3			112			359			N/A			617
Provision (recovery of provision)		875			5,180			13			128			306			(47	)		(935	)		5,520

Ending balance	$	11,395		$	8,662		$	586		$	1,084		$	693		$	1,212		$	1,086		$	24,718


Six Months Ended June 30, 2012

Reserve for loan and lease losses:
Beginning balance	$	11,262		$	13,317		$	823		$	735		$	730		$	1,344		$	1,659		$	29,870
Charge-offs		(3,165	)		(1,675	)		—			(2	)		(240	)		(646	)		N/A			(5,728	)
Recoveries		415			140			55			3			57			247			N/A			917
Provision (recovery of provision)		3,509			534			(44	)		148			172			216			908			5,443

Ending balance	$	12,021		$	12,316		$	834		$	884		$	719		$	1,161		$	2,567		$	30,502

N/A – Not applicable

(Dollars in thousands)

Commercial,
Financial and
Agricultural

Real Estate–
Commercial
and
Construction

Real Estate–
Residential
Secured for
Business
Purpose

Real Estate–
Residential and
Home Equity
Secured for
Personal
Purpose

Loans to
Individuals

Lease
Financings

Unallocated

Total

At June 30, 2013

Reserve for loan and lease losses:

Ending balance: individually evaluated for impairment

230

—

N/A

230

Ending balance: collectively evaluated for impairment

11,165

8,662

586

1,084

693

1,212

1,086

24,488

Total ending balance

11,395

8,662

586

1,084

693

1,212

1,086

24,718

Loans and leases held for investment:

Ending balance: individually evaluated for impairment

3,146

34,471

169

730

—

38,554

Ending balance: collectively evaluated for impairment

436,761

629,956

32,160

227,381

43,560

91,621

1,461,439

Total ending balance

439,907

664,427

32,329

228,111

43,598

91,621

1,499,993


(Dollars in thousands)	Commercial, Financial and Agricultural		Real Estate– Commercial and Construction		Real Estate– Residential Secured for Business Purpose		Real Estate– Residential and Home Equity Secured for Personal Purpose		Loans to Individuals		Lease Financings		Unallocated		Total

At June 30, 2012

Reserve for loan and lease losses:
Ending balance: individually evaluated for impairment	$	432	$	—	$	—	$	—	$	—	$	—	$	N/A	$	432
Ending balance: collectively evaluated for impairment		11,589		12,316		834		884		719		1,161		2,567		30,070

Total ending balance	$	12,021	$	12,316	$	834	$	884	$	719	$	1,161	$	2,567	$	30,502


Loans and leases held for investment:
Ending balance: individually evaluated for impairment	$	5,647	$	37,545	$	177	$	312	$	49	$	—			$	43,730
Ending balance: collectively evaluated for impairment		492,308		559,647		31,920		218,601		43,988		75,255				1,421,719

Total ending balance	$	497,955	$	597,192	$	32,097	$	218,913	$	44,037	$	75,255			$	1,465,449

N/A – Not applicable

Impaired Loans

The following presents, by class of loans, the recorded investment and unpaid principal balance of impaired loans, the amounts of the impaired loans for which there is not an allowance for credit losses and the amounts for which there is an allowance for credit losses at June 30, 2013 and December 31, 2012:


	At June 30, 2013						At December 31, 2012
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance

Impaired loans with no related allowance recorded:
Commercial, financial and agricultural	$	2,504	$	4,082			$	2,646	$	4,504
Real estate–commercial real estate		18,897		28,269				24,863		30,991
Real estate–construction		15,574		17,594				15,985		17,959
Real estate–residential secured for business purpose		169		181				172		184
Real estate–residential secured for personal purpose		730		730				804		804
Loans to individuals		38		55				38		55

Total impaired loans with no allowance recorded	$	37,912	$	50,911			$	44,508	$	54,497


Impaired loans with an allowance recorded:
Commercial, financial and agricultural	$	642	$	702	$	230	$	676	$	717	$	208

Total impaired loans with an allowance recorded	$	642	$	702	$	230	$	676	$	717	$	208


	At June 30, 2013						At December 31, 2012
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance

Total impaired loans:
Commercial, financial and agricultural	$	3,146	$	4,784	$	230	$	3,322	$	5,221	$	208
Real estate–commercial real estate		18,897		28,269		—		24,863		30,991		—
Real estate–construction		15,574		17,594		—		15,985		17,959		—
Real estate–residential secured for business purpose		169		181		—		172		184		—
Real estate–residential secured for personal purpose		730		730		—		804		804		—
Loans to individuals		38		55		—		38		55		—

Total impaired loans	$	38,554	$	51,613	$	230	$	45,184	$	55,214	$	208

The following presents by class of loans, the average recorded investment in impaired loans and an analysis of interest on impaired loans:


	Three Months Ended June 30, 2013						Three Months Ended June 30, 2012
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized*		Interest Income That Would Have Been Recognized Under Original Terms		Average Recorded Investment		Interest Income Recognized*		Interest Income That Would Have Been Recognized Under Original Terms

Commercial, financial and agricultural	$	2,469	$	8	$	23	$	6,011	$	31	$	60
Real estate–commercial real estate		21,434		147		191		19,863		44		257
Real estate–construction		15,675		28		185		16,639		35		190
Real estate–residential secured for business purpose		169		—		2		161		—		2
Real estate–residential secured for personal purpose		751		—		12		185		—		3
Real estate–home equity secured for personal purpose		6		—		—		—		—		—
Loans to individuals		38		1		—		49		2		—

Total	$	40,542	$	184	$	413	$	42,908	$	112	$	512

*	Includes interest income recognized on accruing troubled debt restructured loans of $184 thousand and $109 thousand for the three months ended June 30, 2013 and 2012, respectively.


	Six Months Ended June 30, 2013						Six Months Ended June 30, 2012
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized*		Interest Income That Would Have Been Recognized Under Original Terms		Average Recorded Investment		Interest Income Recognized*		Interest Income That Would Have Been Recognized Under Original Terms

Commercial, financial and agricultural	$	2,731	$	16	$	62	$	5,596	$	33	$	152
Real estate–commercial real estate		22,732		302		416		20,421		87		526
Real estate–construction		15,758		56		369		16,250		52		385
Real estate–residential secured for business purpose		178		—		5		140		—		3
Real estate–residential secured for personal purpose		773		—		24		130		—		4
Real estate–home equity secured for personal purpose		3		—		—		4		—		—
Loans to individuals		42		2		—		49		3		—

Total	$	42,217	$	376	$	876	$	42,590	$	175	$	1,070

*	Includes interest income recognized on accruing troubled debt restructured loans of $370 thousand and $167 thousand for the six months ended June 30, 2013 and 2012, respectively.

Troubled Debt Restructured Loans

The following presents, by class of loans, information regarding accruing and non-accrual loans that were restructured:


	Three Months Ended June 30, 2013								Three Months Ended June 30, 2012
(Dollars in thousands)	Number of Loans		Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Allowance		Number of Loans		Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Allowance

Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural		1	$	1,000	$	1,000	$	—		1	$	135	$	135	$	—
Real estate–commercial real estate		—		—		—		—		1		175		175		—

Total		1	$	1,000	$	1,000	$	—		2	$	310	$	310	$	—


Nonaccrual Troubled Debt Restructured Loans:

Total		—	$	—	$	—	$	—		—	$	—	$	—	$	—


	Six Months Ended June 30, 2013								Six Months Ended June 30, 2012
(Dollars in thousands)	Number of Loans		Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Allowance		Number of Loans		Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Allowance

Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural		1	$	1,000	$	1,000	$	—		8	$	1,672	$	1,672	$	—
Real estate–commercial real estate		—		—		—		—		4		1,009		1,009		—
Real estate–construction		—		—		—		—		2		1,330		1,330		—

Total		1	$	1,000	$	1,000	$	—		14	$	4,011	$	4,011	$	—


Nonaccrual Troubled Debt Restructured Loans:
Commercial, financial and agricultural		—	$	—	$	—	$	—		2	$	448	$	448	$	—
Real estate–commercial real estate		—		—		—		—		1		124		124		—

Total		—	$	—	$	—	$	—		3	$	572	$	572	$	—

The Corporation grants concessions primarily related to extensions of interest-only payment periods and an occasional payment modification. These modifications typically are on a short-term basis up to one year. Our goal when restructuring a credit is to afford the customer a reasonable period of time to provide cash flow relief to customers experiencing cash flow difficulties. Accruing troubled debt restructured loans were primarily comprised of loans on which interest is being accrued under the restructured terms, and the loans were current or less than ninety days past due.

The following presents, by class of loans, information regarding the types of concessions granted on accruing and nonaccrual loans that were restructured during the three and six months ended June 30, 2013 and 2012:


	Three Months Ended June 30, 2013
	Interest Only Term Extension				Temporary Payment Reduction				Temporary Payment Suspension				Maturity Date Extension				Total Concessions Granted
(Dollars in thousands)	No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount

Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural		1	$	1,000		—	$	—		—	$	—		—	$	—		1	$	1,000

Total		1	$	1,000		—	$	—		—	$	—		—	$	—		1	$	1,000


Nonaccrual Troubled Debt Restructured Loans:

Total		—	$	—		—	$	—		—	$	—		—	$	—		—	$	—


	Three Months Ended June 30, 2012
	Interest Only Term Extension				Temporary Payment Reduction				Temporary Payment Suspension				Maturity Date Extension				Total Concessions Granted
(Dollars in thousands)	No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount

Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural		—	$	—		—	$	—		—	$	—		1	$	135		1	$	135
Real estate–commercial real estate		—		—		—		—		—		—		1		175		1		175

Total		—	$	—		—	$	—		—	$	—		2	$	310		2	$	310


Nonaccrual Troubled Debt Restructured Loans:

Total		—	$	—		—	$	—		—	$	—		—	$	—		—	$	—


	Six Months Ended June 30, 2013
	Interest Only Term Extension				Temporary Payment Reduction				Temporary Payment Suspension				Maturity Date Extension				Total Concessions Granted
(Dollars in thousands)	No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount

Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural		1	$	1,000		—	$	—		—	$	—		—	$	—		1	$	1,000

Total		1	$	1,000		—	$	—		—	$	—		—	$	—		1	$	1,000


Nonaccrual Troubled Debt Restructured Loans:

Total		—	$	—		—	$	—		—	$	—		—	$	—		—	$	—


	Six Months Ended June 30, 2012
	Interest Only Term Extension				Temporary Payment Reduction				Temporary Payment Suspension				Maturity Date Extension				Total Concessions Granted
(Dollars in thousands)	No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount		No. of Loans		Amount

Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural		4	$	1,316		3	$	221		—	$	—		1	$	135		8	$	1,672
Real estate–commercial real estate		2		647		1		187		—		—		1		175		4		1,009
Real estate–construction		2		1,330		—		—		—		—		—		—		2		1,330

Total		8	$	3,293		4	$	408		—	$	—		2	$	310		14	$	4,011


Nonaccrual Troubled Debt Restructured Loans:
Commercial, financial and agricultural		—	$	—		—	$	—		2	$	448		—	$	—		2	$	448
Real estate–commercial real estate		—		—		—		—		1		124		—		—		1		124

Total		—	$	—		—	$	—		3	$	572		—	$	—		3	$	572

The following presents, by class of loans, information regarding accruing and nonaccrual troubled debt restructured loans, for which there was a payment default during the three and six month periods ended June 30, 2013 and 2012 and within twelve months of the restructuring date:


	Three Months Ended June 30,								Six Months Ended June 30,
	2013				2012				2013				2012
(Dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment

Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural		—	$	—		—	$	—		3	$	230		—	$	—

Total		—	$	—		—	$	—		3	$	230		—	$	—


Nonaccrual Troubled Debt Restructured Loans:

Total		—	$	—		—	$	—		—	$	—		—	$	—