Loans and Leases (Tables)

6 Months Ended

Jun. 30, 2014

Summary of Major Loan and Lease Categories

Summary of Major Loan and Lease Categories


(Dollars in thousands)	At June 30, 2014			At December 31, 2013
Commercial, financial and agricultural	$	447,993		$	422,816
Real estate-commercial		626,060			600,353
Real estate-construction		76,735			90,493
Real estate-residential secured for business purpose		35,284			37,319
Real estate-residential secured for personal purpose		162,352			149,164
Real estate-home equity secured for personal purpose		98,880			95,345
Loans to individuals		31,564			40,000
Lease financings		108,126			105,994

Total loans and leases held for investment, net of deferred income	$	1,586,994		$	1,541,484

Unearned lease income, included in the above table	$	(13,742	)	$	(14,439	)
Net deferred costs, included in the above table		2,832			2,744
Overdraft deposits included in the above table		68			62

Age Analysis of Past Due Loans and Leases

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 90 days or more past due which are accruing interest at June 30, 2014 and December 31, 2013:


(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or more Past Due		Total Past Due		Current		Total Loans and Leases Held for Investment		Recorded Investment 90 Days or more Past Due and Accruing Interest
At June 30, 2014
Commercial, financial and agricultural	$	377	$	391	$	787	$	1,555	$	446,438	$	447,993	$	—
Real estate—commercial real estate and construction:
Commercial real estate		1,363		—		923		2,286		623,774		626,060		—
Construction		—		—		7,185		7,185		69,550		76,735		—
Real estate—residential and home equity:
Residential secured for business purpose		19		59		654		732		34,552		35,284		—
Residential secured for personal purpose		492		44		256		792		161,560		162,352		—
Home equity secured for personal purpose		101		10		104		215		98,665		98,880		—
Loans to individuals		414		216		216		846		30,718		31,564		216
Lease financings		1,275		487		624		2,386		105,740		108,126		308

Total	$	4,041	$	1,207	$	10,749	$	15,997	$	1,570,997	$	1,586,994	$	524

At December 31, 2013
Commercial, financial and agricultural	$	386	$	922	$	2,904	$	4,212	$	418,604	$	422,816	$	12
Real estate—commercial real estate and construction:
Commercial real estate		148		262		4,932		5,342		595,011		600,353		—
Construction		—		—		8,742		8,742		81,751		90,493		—
Real estate—residential and home equity:
Residential secured for business purpose		87		276		161		524		36,795		37,319		—
Residential secured for personal purpose		1,370		—		617		1,987		147,177		149,164		—
Home equity secured for personal purpose		278		97		100		475		94,870		95,345		23
Loans to individuals		445		193		319		957		39,043		40,000		319
Lease financings		2,182		455		389		3,026		102,968		105,994		59

Total	$	4,896	$	2,205	$	18,164	$	25,265	$	1,516,219	$	1,541,484	$	413

Non-Performing Loans and Leases

Non-Performing Loans and Leases

The following presents, by class of loans and leases, non-performing loans and leases at June 30, 2014 and December 31, 2013:


	At June 30, 2014								At December 31, 2013
(Dollars in thousands)	Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Loans and Leases 90 Days or more Past Due and Accruing Interest		Total Non- Performing Loans and Leases		Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Loans and Leases 90 Days or more Past Due and Accruing Interest		Total Non- Performing Loans and Leases
Loans held for sale **	$	532	$	—	$	—	$	532	$	—	$	—	$	—	$	—
Loans and leases held for investment:
Commercial, financial and agricultural		3,182		1,238		—		4,420		4,253		1,329		12		5,594
Real estate—commercial real estate and construction:
Commercial real estate		3,901		2,623		—		6,524		8,091		4,271		—		12,362
Construction		7,996		2,479		—		10,475		9,159		2,307		—		11,466
Real estate—residential and home equity:
Residential secured for business purpose		927		—		—		927		224		—		—		224
Residential secured for personal purpose		783		—		—		783		1,101		—		—		1,101
Home equity secured for personal purpose		104		—		—		104		77		—		23		100
Loans to individuals		1		—		216		217		—		36		319		355
Lease financings		316		—		308		624		330		—		59		389

Total	$	17,742	$	6,340	$	524	$	24,606	$	23,235	$	7,943	$	413	$	31,591

*	Includes nonaccrual troubled debt restructured loans and lease modifications of $2.2 million and $1.6 million at June 30, 2014 and December 31, 2013, respectively.

**	Includes real estate construction loan of $532 thousand at June 30, 2014.

Credit Quality Indicators

Commercial Credit Exposure Credit Risk by Internally Assigned Grades


(Dollars in thousands)	Commercial, Financial and Agricultural		Real Estate— Commercial		Real Estate— Construction		Real Estate— Residential Secured for Business Purpose		Total
At June 30, 2014
Grade:
1. Cash secured/ 2. Fully secured	$	4,533	$	1,858	$	3,489	$	—	$	9,880
3. Strong		7,574		9,135		3,954		—		20,663
4. Satisfactory		28,620		16,610		8,689		247		54,166
5. Acceptable		276,339		417,051		44,643		24,955		762,988
6. Pre-watch		66,948		115,956		4,307		4,675		191,886
7. Special Mention		13,439		12,660		2,053		1,740		29,892
8. Substandard		50,540		52,790		9,600		3,667		116,597
9. Doubtful		—		—		—		—		—
10.Loss		—		—		—		—		—

Total	$	447,993	$	626,060	$	76,735	$	35,284	$	1,186,072

At December 31, 2013
Grade:
1. Cash secured/ 2. Fully secured	$	4,763	$	2,014	$	1,682	$	—	$	8,459
3. Strong		6,051		8,515		4,300		—		18,866
4. Satisfactory		34,650		17,758		1,500		261		54,169
5. Acceptable		251,203		384,061		54,464		26,694		716,422
6. Pre-watch		84,201		113,181		16,084		5,884		219,350
7. Special Mention		10,095		19,445		—		1,841		31,381
8. Substandard		31,508		55,331		12,463		2,639		101,941
9. Doubtful		345		48		—		—		393
10.Loss		—		—		—		—		—

Total	$	422,816	$	600,353	$	90,493	$	37,319	$	1,150,981

(Dollars in thousands)	Real Estate— Residential Secured for Personal Purpose		Real Estate— Home Equity Secured for Personal Purpose		Loans to Individuals		Lease Financing		Total
At June 30, 2014
Performing	$	161,569	$	98,776	$	31,347	$	107,502	$	399,194
Nonperforming		783		104		217		624		1,728

Total	$	162,352	$	98,880	$	31,564	$	108,126	$	400,922

At December 31, 2013
Performing	$	148,063	$	95,245	$	39,645	$	105,605	$	388,558
Nonperforming		1,101		100		355		389		1,945

Total	$	149,164	$	95,345	$	40,000	$	105,994	$	390,503

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, 2014 and 2013:


(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, 2014

Reserve for loan and lease losses:
Beginning balance	$	9,547		$	9,247		$	1,056		$	1,221		$	598		$	1,295		$	1,603		$	24,567
Charge-offs		(250	)		(1,251	)		(98	)		(10	)		(267	)		(143	)		N/A			(2,019	)
Recoveries		63			—			45			26			81			80			N/A			295
Provision (recovery of provision)		354			1,267			22			11			(7	)		(131	)		(265	)		1,251

Ending balance	$	9,714		$	9,263		$	1,025		$	1,248		$	405		$	1,101		$	1,338		$	24,094

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

Six Months Ended June 30, 2014

Reserve for loan and lease losses:
Beginning balance	$	9,789		$	8,780		$	1,062		$	1,284		$	694		$	1,285		$	1,600		$	24,494
Charge-offs		(1,689	)		(1,308	)		(114	)		(90	)		(490	)		(290	)		N/A			(3,981	)
Recoveries		109			370			48			27			159			142			N/A			855
Provision (recovery of provision)		1,505			1,421			29			27			42			(36	)		(262	)		2,726

Ending balance	$	9,714		$	9,263		$	1,025		$	1,248		$	405		$	1,101		$	1,338		$	24,094

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

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, 2014

Reserve for loan and lease losses:
Ending balance: individually evaluated for impairment	$	680	$	8	$	456	$	—	$	—	$	—	$	N/A	$	1,144
Ending balance: collectively evaluated for impairment		9,034		9,255		569		1,248		405		1,101		1,338		22,950

Total ending balance	$	9,714	$	9,263	$	1,025	$	1,248	$	405	$	1,101	$	1,338	$	24,094

Loans and leases held for investment:
Ending balance: individually evaluated for impairment	$	14,800	$	34,259	$	2,477	$	887	$	1	$	—			$	52,424
Ending balance: collectively evaluated for impairment		433,193		668,536		32,807		260,345		31,563		108,126				1,534,570

Total ending balance	$	447,993	$	702,795	$	35,284	$	261,232	$	31,564	$	108,126			$	1,586,994

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	$	—			$	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

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, 2014 and December 31, 2013:


	At June 30, 2014						At December 31, 2013
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired loans with no related allowance recorded:
Loans held for sale	$	532	$	2,987			$	—	$	—
Loans held for investment:
Commercial, financial and agricultural		13,121		13,865				10,890		11,749
Real estate—commercial real estate		21,522		23,587				28,883		35,700
Real estate—construction		11,292		11,639				12,357		14,540
Real estate—residential secured for business purpose		901		914				224		235
Real estate—residential secured for personal purpose		783		803				131		131
Real estate—home equity secured for personal purpose		104		104				77		77
Loans to individuals		1		1				36		54

Total impaired loans with no allowance recorded	$	48,256	$	53,900			$	52,598	$	62,486

Impaired loans with an allowance recorded:
Commercial, financial and agricultural	$	1,679	$	1,679	$	680	$	3,215	$	3,272	$	2,398
Real estate—commercial real estate		1,445		1,445		8		—		—		—
Real estate—residential secured for business purpose		1,576		1,576		456		1,550		1,550		501
Real estate—residential secured for personal purpose		—		—		—		970		976		64

Total impaired loans with an allowance recorded	$	4,700	$	4,700	$	1,144	$	5,735	$	5,798	$	2,963


	At June 30, 2014						At December 31, 2013
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Total impaired loans:
Loans held for sale	$	532	$	2,987	$	—	$	—	$	—	$	—
Loans held for investment:
Commercial, financial and agricultural		14,800		15,544		680		14,105		15,021		2,398
Real estate—commercial real estate		22,967		25,032		8		28,883		35,700		—
Real estate—construction		11,292		11,639		—		12,357		14,540		—
Real estate—residential secured for business purpose		2,477		2,490		456		1,774		1,785		501
Real estate—residential secured for personal purpose		783		803		—		1,101		1,107		64
Real estate—home equity secured for personal purpose		104		104		—		77		77		—
Loans to individuals		1		1		—		36		54		—

Total impaired loans	$	52,956	$	58,600	$	1,144	$	58,333	$	68,284	$	2,963

Average Recorded Investment in Impaired Loans and Leases and Analysis of Interest on Impaired Loans

The following presents by class of loans, the average recorded investment in impaired loans and an analysis of interest on impaired loans. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Therefore, interest income on accruing impaired loans is recognized using the accrual method.


	Three Months Ended June 30, 2014						Three Months Ended June 30, 2013
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms		Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms
Loans held for investment:
Commercial, financial and agricultural	$	13,296	$	124	$	51	$	2,469	$	8	$	23
Real estate—commercial real estate		23,666		253		72		21,434		147		191
Real estate—construction		12,357		41		123		15,675		28		185
Real estate—residential secured for business purpose		2,574		17		15		169		—		2
Real estate—residential secured for personal purpose		762		—		18		751		—		12
Real estate—home equity secured for personal purpose		90		—		1		6		—		—
Loans to individuals		2		—		—		38		1		—

Total	$	52,747	$	435	$	280	$	40,542	$	184	$	413

There was no interest income recognized on a cash basis for nonaccrual loans for the three months ended June 30, 2014 and 2013; includes interest income recognized on the accrual method for accruing impaired loans of $435 thousand and $184 thousand for the three months ended June 30, 2014 and 2013, respectively.


	Six Months Ended June 30, 2014						Six Months Ended June 30, 2013
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms		Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms
Loans held for investment:
Commercial, financial and agricultural	$	13,794	$	251	$	116	$	2,731	$	16	$	62
Real estate—commercial real estate		24,884		535		166		22,732		302		416
Real estate—construction		12,412		83		247		15,758		56		369
Real estate—residential secured for business purpose		2,272		33		35		178		—		5
Real estate—residential secured for personal purpose		888		—		32		773		—		24
Real estate—home equity secured for personal purpose		84		—		2		3		—		—
Loans to individuals		6		—		—		42		2		—

Total	$	54,340	$	902	$	598	$	42,217	$	376	$	876

Includes interest income recognized on a cash basis for nonaccrual loans of $23 thousand and $6 thousand for the six months ended June 30, 2014 and 2013, respectively and interest income recognized on the accrual method for accruing impaired loans of $879 thousand and $370 thousand for the six months ended June 30, 2014 and 2013, respectively.

Troubled Debt Restructured Loans

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


	Three Months Ended June 30, 2014								Three Months Ended June 30, 2013
(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	$	—

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

Nonaccrual Troubled Debt Restructured Loans:

Total		—	$	—	$	—	$	—		—	$	—	$	—	$	—


	Six Months Ended June 30, 2014								Six Months Ended June 30, 2013
(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	$	—

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

Nonaccrual Troubled Debt Restructured Loans:
Real estate—commercial real estate		1	$	50	$	50	$	—		—	$	—	$	—	$	—
Real estate—residential secured for business purpose		2		688		688		—		—		—		—		—

Total		3	$	738	$	738	$	—		—	$	—	$	—	$	—

Concessions Granted on Accruing and Nonaccrual Loans Restructured

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, 2014 and 2013.


	Interest Only Term Extension				Interest Rate Reduction				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
Three Months Ended June 30, 2014

Accruing Troubled Debt Restructured Loans:

Total		—	$	—		—	$	—		—	$	—		—	$	—

Nonaccrual Troubled Debt Restructured Loans:

Total		—	$	—		—	$	—		—	$	—		—	$	—

Three Months Ended June 30, 2013

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, 2014

Accruing Troubled Debt Restructured Loans:		—	$	—		—	$	—		—	$	—		—	$	—

Total		—	$	—		—	$	—		—	$	—		—	$	—

Nonaccrual Troubled Debt Restructured Loans:
Real estate—commercial real estate		—	$	—		1	$	50		—	$	—		1	$	50
Real estate—residential secured for business purpose		—		—		1		55		1		633		2		688

Total		—	$	—		2	$	105		1	$	633		3	$	738

Six Months Ended June 30, 2013

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		—	$	—		—	$	—		—	$	—		—	$	—

Accruing and Nonaccrual Troubled Debt Restructured Loans with Payment Defaults

The following presents, by class of loans, information regarding accruing and nonaccrual troubled debt restructured loans, for which there were payment defaults within twelve months of the restructuring date:


	Three Months Ended June 30,								Six Months Ended June 30,
	2014				2013				2014				2013
(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		—	$	—		—	$	—		—	$	—		—	$	—