Loans (Tables)

12 Months Ended

Dec. 31, 2012

Composition of Net Loans

The composition of net loans at December 31, 2012 and 2011 is as follows:

	2012			2011
	(In Thousands)
Real Estate:
Land Development and Construction	$	12,755		$	13,480
Farmland		31,663			35,912
1-4 Family Mortgages		115,837			133,987
Commercial Real Estate		132,495			129,387
Total Real Estate Loans		292,750			312,766
Business Loans:
Commercial and Industrial Loans		45,564			36,581
Farm Production and other Farm Loans		1,433			1,579
Total Business Loans		46,997			38,160
Consumer Loans:
Credit Cards		1,050			995
Other Consumer Loans		28,341			37,545
Total Consumer Loans		29,391			38,540
Total Gross Loans		369,138			389,466
Unearned income		(248	)		(204	)
Allowance for loan losses		(6,954	)		(6,681	)
Loans, net	$	361,936		$	382,581

Activity in Related Party Loans

Activity in related party loans during 2012 is presented in the following table.

Balance outstanding at December 31, 2011	$	1,127,383
Principal additions		1,423,635
Principal reductions		697,796
Balance outstanding at December 31, 2012	$	1,853,222

Year-End Non-Accrual Loans, Segregated by Class of Loans

Year-end non-accrual loans, segregated by class of loans, were as follows:

	2012		2011
	(in thousands)
Real Estate:
Land Development and Construction	$	142	$	1,134
Farmland		1,087		641
1-4 Family Mortgages		2,356		1,966
Commercial Real Estate		10,175		6,818
Total Real Estate Loans		13,760		10,559
Business Loans:
Commercial and Industrial Loans		167		284
Farm Production and other Farm Loans		3		21
Total Business Loans		170		305
Consumer Loans:
Credit Cards		—		—
Other Consumer Loans		212		435
Total Consumer Loans		212		435
Total Non-Accrual Loans	$	14,142	$	11,299

Age Analysis of Past Due Loans, Segregated by Class of Loans

An age analysis of past due loans, segregated by class of loans, as of December 31, 2012 was as follows (in thousands):

	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or  more Days Past Due
Real Estate:
Land Development and Construction	$	2,588	$	—	$	2,588	$	10,167	$	12,755	$	—
Farmland		786		589		1,375		30,288		31,663		—
1-4 Family Mortgages		8,139		623		8,762		107,075		115,837		32
Commercial Real Estate		3,033		5,013		8,046		124,449		132,495		544
Total Real Estate Loans		14,546		6,225		20,771		271,979		292,750		576
Business Loans:
Commercial and Industrial Loans		3,070		9		3,079		42,485		45,564		—
Farm Production and other Farm Loans		2		—		2		1,431		1,433		—
Total Business Loans		3,072		9		3,081		43,916		46,997		—
Consumer Loans:
Credit Cards		40		30		70		980		1,050		30
Other Consumer Loans		1,711		57		1,768		26,573		28,341		3
Total Consumer Loans		1,751		87		1,838		27,553		29,391		33
Total Loans	$	19,369	$	6,321	$	25,690	$	343,448	$	369,138	$	609

An age analysis of past due loans, segregated by class of loans, as of December 31, 2011 was as follows (in thousands):

	Loans 30-89 Days Past Due		Loans 90 or more Days Past Due		Total Past Due Loans		Current Loans		Total Loans		Accruing Loans 90 or  more Days Past Due
Real Estate:
Land Development and Construction	$	30	$	562	$	592	$	12,888	$	13,480	$	39
Farmland		1,061		139		1,200		34,712		35,912		—
1-4 Family Mortgages		5,774		822		6,596		127,391		133,987		80
Commercial Real Estate		4,941		4,855		9,796		119,591		129,387		109
Total Real Estate Loans		11,806		6,378		18,184		294,582		312,766		228
Business Loans:
Commercial and Industrial Loans		294		99		393		36,188		36,581		—
Farm Production and other Farm Loans		13		6		19		1,560		1,579		—
Total Business Loans		307		105		412		37,748		38,160		—
Consumer Loans:
Credit Cards		20		17		37		958		995		17
Other Consumer Loans		1,858		252		2,110		35,435		37,545		24
Total Consumer Loans		1,878		269		2,147		36,393		38,540		41
Total Loans	$	13,991	$	6,752	$	20,743	$	368,723	$	389,466	$	269

Impaired Loans, by Class of Loans

Impaired loans as of December 31, by class of loans, are as follows (in thousands):

2012	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	142	$	18	$	124	$	142	$	117	$	638
Farmland		1,087		947		140		1,087		24		864
1-4 Family Mortgages		2,356		1,740		616		2,356		186		2,211
Commercial Real Estate		10,175		5,954		4,221		10,175		711		8,496
Total Real Estate Loans		13,760		8,659		5,101		13,760		1,038		12,209
Business Loans:
Commercial and Industrial Loans		167		76		91		167		55		226
Farm Production and other Farm Loans		3		3		—		3		—		12
Total Business Loans		170		79		91		170		55		238
Consumer Loans:
Other Consumer Loans		212		212		—		212		—		323
Total Consumer Loans		212		212		—		212		—		323
Total Loans	$	14,142	$	8,950	$	5,192	$	14,142	$	1,093	$	12,770

2011	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Real Estate:
Land Development and Construction	$	1,134	$	992	$	142	$	1,134	$	134	$	883
Farmland		641		492		149		641		24		588
1-4 Family Mortgages		2,066		1,297		769		2,066		216		1,933
Commercial Real Estate		6,818		5,042		1,776		6,818		736		6,896
Total Real Estate Loans		10,659		7,823		2,836		10,659		1,110		10,300
Business Loans:
Commercial and Industrial Loans		284		163		121		284		57		860
Farm Production and other Farm Loans		21		21		—		21		—		19
Total Business Loans		305		184		121		305		57		879
Consumer Loans:
Other Consumer Loans		435		430		5		435		—		321
Total Consumer Loans		435		430		5		435		—		321
Total Loans	$	11,399	$	8,437	$	2,962	$	11,399	$	1,167	$	11,500

Restructured Loans Segregated by Class

The following table presents restructured loans segregated by class (in thousands, except number of loans):

December 31, 2012	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		4	$	6,850	$	5,602
Total		4	$	6,850	$	5,602
December 31, 2011	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial real estate		1	$	1,699	$	1,459
Total		1	$	1,699	$	1,459

Changes in Restructured Loans

Changes in the Company’s restructured loans are set forth in the table below:

	Number of Loans		Recorded Investment
Totals at January 1, 2012		1	$	1,459
Additional loans with concessions		3		4,878
Reductions due to:
Writedown				(634	)
Principal paydowns				(101	)
Total at December 31, 2012		4	$	5,602

Detailed Amount of Gross Loans by Loan Grade and Class

The following table details the amount of gross loans by loan grade and class for the year ended December 31, 2012 (in thousands):

Grades	Satisfactory 1, 2, 3,4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	10,596	$	1,890	$	269	$	—	$	—	$	12,755
Farmland		27,069		2,701		1,893		—		—		31,663
1-4 Family Mortgages		97,630		6,177		12,030		—		—		115,837
Commercial Real Estate		108,914		6,728		16,853		—		—		132,495
Total Real Estate Loans		244,209		17,496		31,045		—		—		292,750
Business Loans:
Commercial and Industrial Loans		41,449		3,486		601		28		—		45,564
Farm Production and other Farm Loans		1,358		26		49		—		—		1,433
Total Business Loans		42,807		3,512		650		28		—		46,997
Consumer Loans:
Credit Cards		1,020		—		30		—		—		1,050
Other Consumer Loans		26,995		287		1,029		28		2		28,341
Total Consumer Loans		28,015		287		1,059		28		2		29,391
Total Loans	$	315,031	$	21,295	$	32,754	$	56	$	2	$	369,138

The following table details the amount of gross loans by loan grade and class for the year ended December 31, 2011:

Grades	Satisfactory 1, 2, 3,4		Special Mention 5,6		Substandard 7		Doubtful 8		Loss 9		Total Loans
Real Estate:
Land Development and Construction	$	9,647	$	2,290	$	1,481	$	—	$	62	$	13,480
Farmland		31,405		3,043		1,464		—		—		35,912
1-4 Family Mortgages		115,365		5,784		12,811		27		—		133,987
Commercial Real Estate		108,347		7,188		13,852		—		—		129,387
Total Real Estate Loans		264,764		18,305		29,608		27		62		312,766
Business Loans:
Commercial and Industrial Loans		27,970		7,712		863		36		—		36,581
Farm Production and other Farm Loans		1,481		8		90		—		—		1,579
Total Business Loans		29,451		7,720		953		36		—		38,160
Consumer Loans:
Credit Cards		978		—		17		—		—		995
Other Consumer Loans		35,859		325		1,304		53		4		37,545
Total Consumer Loans		36,837		325		1,321		53		4		38,540
Total Loans	$	331,052	$	26,350	$	31,882	$	116	$	66	$	389,466

Net (Chargeoffs) Recoveries, Segregated by Class of Loans

Net (chargeoffs) recoveries, segregated by class of loans, were as follows:

	2012			2011			2010
Real Estate:
Land Development and Construction	$	(87,917	)	$	(60,964	)	$	(175,771	)
Farmland		2,386			(423,078	)		(140,866	)
1-4 Family Mortgages		(220,591	)		(911,026	)		(623,445	)
Commercial Real Estate		(854,847	)		(79,236	)		(99,899	)
Total Real Estate Loans		(1,160,969	)		(1,474,304	)		(1,039,981	)
Business Loans:
Commercial and Industrial Loans		936			(994,522	)		(244,382	)
Farm Production and other Farm Loans		(3,436	)		(4,671	)		(10,487	)
Total Business Loans		(2,500	)		(999,193	)		(254,869	)
Consumer Loans:
Credit Cards		(9,441	)		(43,763	)		(39,881	)
Other Consumer Loans		(100,030	)		(175,824	)		(267,916	)
Total Consumer Loans		(109,471	)		(219,587	)		(307,797	)
Total Net Chargeoffs	$	(1,272,940	)	$	(2,693,084	)	$	(1,602,647	)

Detailed Activity in Allowance for Loan Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2012, 2011 and 2010:

2012	Real Estate		Business Loans			Consumer		Total
Beginning Balance	$	4,176,475	$	1,672,467		$	832,470	$	6,681,412
Provision for loan losses		1,614,053		(115,269	)		47,013		1,545,797
Chargeoffs		1,218,879		55,390			229,926		1,504,195
Recoveries		57,910		52,890			120,455		231,255
Net Chargeoffs		1,160,969		2,500			109,471		1,272,940
Ending Balance	$	4,629,559	$	1,554,698		$	770,012	$	6,954,269
Period end allowance allocated to:
Loans individually evaluated for impairment		1,038,521		54,706			—		1,093,227
Loans collectively evaluated for impairment		3,591,038		1,499,992			770,012		5,861,042
Ending Balance	$	4,629,559	$	1,554,698		$	770,012	$	6,954,269

2011	Real Estate		Business Loans		Consumer		Total
Beginning Balance	$	4,306,691	$	1,104,706	$	967,673	$	6,379,070
Provision for loan losses		1,344,088		1,566,954		84,384		2,995,426
Chargeoffs		1,500,400		1,011,458		306,123		2,817,981
Recoveries		26,096		12,265		86,536		124,897
Net Chargeoffs		1,474,304		999,193		219,587		2,693,084
Ending Balance	$	4,176,475	$	1,672,467	$	832,470	$	6,681,412
Period end allowance allocated to:
Loans individually evaluated for impairment		1,109,209		57,325		—		1,166,594
Loans collectively evaluated for impairment		3,067,266		1,615,142		832,470		5,514,818
Ending Balance	$	4,176,475	$	1,672,467	$	832,470	$	6,681,412

2010	Real Estate		Business Loans		Consumer		Total
Beginning Balance	$	3,356,197	$	1,162,613	$	1,007,117	$	5,525,927
Provision for loan losses		1,990,475		196,962		268,353		2,455,790
Chargeoffs		1,062,599		352,745		399,117		1,814,461
Recoveries		22,618		97,876		91,320		211,814
Net Chargeoffs		1,039,981		254,869		307,797		1,602,647
Ending Balance	$	4,306,691	$	1,104,706	$	967,673	$	6,379,070
Period end allowance allocated to:
Loans individually evaluated for impairment		1,263,306		194,301		20,799		1,478,406
Loans collectively evaluated for impairment		3,043,385		910,405		946,874		4,900,664
Ending Balance	$	4,306,691	$	1,104,706	$	967,673	$	6,379,070

Recorded Investment in Loans Related to Balance in Allowance for Possible Loan Losses by Portfolio Segment

The Company’s recorded investment in loans as of December 31, 2012 and 2011 related to each balance in the allowance for possible loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology was as follows (in thousands):

2012	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for impairment	$	13,760	$	170	$	212	$	14,142
Loans collectively evaluated for impairment		278,990		46,827		29,179		354,996
	$	292,750	$	46,997	$	29,391	$	369,138
2011	Real Estate		Business Loans		Consumer		Total
Loans individually evaluated for impairment	$	10,659	$	305	$	435	$	11,399
Loans collectively evaluated for impairment		302,107		37,855		38,105		378,067
	$	312,766	$	38,160	$	38,540	$	389,466