Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2012

Major Classifications of Loans

Major classifications of loans are as follows (in thousands):

	December 31,
	2012		2011
Commercial	$	509,609	$	454,087
Agricultural		68,306		68,122
Real estate		1,226,823		1,041,396
Consumer		272,428		212,310
Total loans held for investment	$	2,077,166	$	1,775,915

Non-Accrual Loans, Loan Still Accruing and Past Due 90 Days or More Restructured Loans

The Company’s non-accrual loans, loan still accruing and past due 90 days or more restructured loans are as follows (in thousands):

	December 31,
	2012		2011
Non-accrual loans	$	21,800	$	19,975
Loans still accruing and past due 90 days or more		97		96
Restructured loans*		—		—
Total	$	21,897	$	20,071

* Restructured loans whose interest collection, after considering economic and business conditions and collection efforts, are doubtful are included in non-accrual loans.

Recorded Investment in Impaired Loans and Related Valuation Allowance

The Company’s recorded investment in impaired loans and the related valuation allowance are as follows (in thousands):

December 31, 2012				December 31, 2011
Recorded Investment		Valuation Allowance		Recorded Investment		Valuation Allowance
$	21,800	$	6,010	$	19,975	$	5,953

Schedule of Non-Accrual Loans

Non-accrual loans totaled $21,800,000 and $19,975,000, respectively, of this amount and consisted of (in thousands):

	December 31,
	2012		2011
Commercial	$	2,251	$	3,450
Agricultural		372		145
Real Estate		18,698		16,193
Consumer		479		187
Total	$	21,800	$	19,975

Schedule of Impaired Loans and Related Allowance

The Company’s impaired loans and related allowance as of December 31, 2012 and 2011 is summarized in the following table (in thousands). No interest income was recognized on impaired loans subsequent to their classification as impaired.

December 31, 2012	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Commercial	$	2,677	$	20	$	2,231	$	2,251	$	1,350	$	2,966
Agricultural		381		—		372		372		131		437
Real Estate		22,569		2,049		16,649		18,698		4,356		20,164
Consumer		543		115		364		479		173		458
Total	$	26,170	$	2,184	$	19,616	$	21,800	$	6,010	$	24,025

December 31, 2011	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Commercial	$	3,856	$	—	$	3,450	$	3,450	$	2,092	$	3,801
Agricultural		199		3		142		145		79		246
Real Estate		19,305		1,786		14,407		16,193		3,708		18,068
Consumer		227		29		158		187		74		233
Total	$	23,587	$	1,818	$	18,157	$	19,975	$	5,953	$	22,348

Schedule of Internal Ratings of Loans

At December 31, 2012 and 2011, the following summarizes the Company’s internal ratings of its loans (in thousands):

December 31, 2012	Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	498,188	$	2,193	$	9,198	$	30	$	509,609
Agricultural		64,397		342		3,559		8		68,306
Real Estate		1,176,330		14,680		35,673		140		1,226,823
Consumer		271,114		382		911		21		272,428
Total	$	2,010,029	$	17,597	$	49,341	$	199	$	2,077,166

December 31, 2011	Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	432,110	$	9,227	$	12,748	$	2	$	454,087
Agricultural		65,007		347		2,755		13		68,122
Real Estate		980,308		20,922		40,068		98		1,041,396
Consumer		211,177		302		820		11		212,310
Total	$	1,688,602	$	30,798	$	56,391	$	124	$	1,775,915

Schedule of Past Due Loans

At December 31, 2012 and 2011, the Company’s past due loans are as follows (in thousands):

December 31, 2012	15-59 Days Past Due *		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Total Current		Total Loans		Total 90 Days Past Due Still Accruing
Commercial	$	1,708	$	470	$	247	$	2,425	$	507,184	$	509,609	$	—
Agricultural		467		95		—		562		67,744		68,306		—
Real Estate		10,141		2,711		1,237		14,089		1,212,734		1,226,823		34
Consumer		1,660		287		163		2,110		270,318		272,428		63
Total	$	13,976	$	3,563	$	1,647	$	19,186	$	2,057,980	$	2,077,166	$	97

December 31, 2011	15-59 Days Past Due *		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Total Current		Total Loans		Total 90 Days Past Due Still Accruing
Commercial	$	1,574	$	430	$	—	$	2,004	$	452,083	$	454,087	$	—
Agricultural		300		60		—		360		67,762		68,122		—
Real Estate		10,215		547		988		11,750		1,029,646		1,041,396		62
Consumer		1,396		128		47		1,571		210,739		212,310		34
Total	$	13,485	$	1,165	$	1,035	$	15,685	$	1,760,230	$	1,775,915	$	96

* The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due.

Allowance for Loan Losses by Estimating Probable Losses in Various Categories of Loan Portfolio

The allowance for loan losses as of December 31, 2012 and 2011, is presented below (in thousands). Management has evaluated the appropriateness of the allowance for loan losses by estimating the losses in various categories of the loan portfolio which are identified below:

	2012		2011
Allowance for loan losses provided for:
Loans specifically evaluated as impaired	$	6,010	$	5,953
Remaining portfolio		28,829		28,362
Total allowance for loan losses	$	34,839	$	34,315

Schedule of Allowance for Loan Loss by Portfolio Segment

The following table details the allowance for loan loss at December 31, 2012 and 2011 by portfolio segment (in thousands). Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

December 31, 2012	Commercial		Agricultural		Real Estate		Consumer		Total
Loans individually evaluated for impairment	$	3,253	$	388	$	8,380	$	308	$	12,329
Loan collectively evaluated for impairment		4,090		1,153		15,683		1,584		22,510
Total	$	7,343	$	1,541	$	24,063	$	1,892	$	34,839

December 31, 2011	Commercial		Agricultural		Real Estate		Consumer		Total
Loans individually evaluated for impairment	$	4,647	$	758	$	8,310	$	282	$	13,997
Loan collectively evaluated for impairment		5,017		724		13,223		1,354		20,318
Total	$	9,664	$	1,482	$	21,533	$	1,636	$	34,315

Changes in Allowance for Loan Losses

Changes in the allowance for loan losses for the years ended December 31, 2012 and 2011 are summarized as follows (in thousands):

December 31, 2012	Commercial			Agricultural			Real Estate			Consumer			Total
Beginning balance	$	9,664		$	1,482		$	21,533		$	1,636		$	34,315
Provision (credit) for loan losses		(2,103	)		58			4,842			687			3,484
Recoveries		281			54			639			421			1,395
Charge-offs		(499	)		(53	)		(2,951	)		(852	)		(4,355	)
Ending balance	$	7,343		$	1,541		$	24,063		$	1,892		$	34,839

December 31, 2011	Commercial			Agricultural			Real Estate			Consumer			Total
Beginning balance	$	7,745		$	2,299		$	19,101		$	1,961		$	31,106
Provision (credit) for loan losses		1,949			(755	)		5,240			192			6,626
Recoveries		610			33			874			390			1,907
Charge-offs		(640	)		(95	)		(3,682	)		(907	)		(5,324	)
Ending balance	$	9,664		$	1,482		$	21,533		$	1,636		$	34,315

Schedule of Investment in Loans Related to Balance in Allowance for Loan Losses on Basis of Company's Impairment Methodology

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

December 31, 2012	Commercial		Agricultural		Real Estate		Consumer		Total
Loans individually evaluated for impairment	$	11,421	$	3,909	$	50,493	$	1,314	$	67,137
Loan collectively evaluated for impairment		498,188		64,397		1,176,330		271,114		2,010,029
Total	$	509,609	$	68,306	$	1,226,823	$	272,428	$	2,077,166

December 31, 2011	Commercial		Agricultural		Real Estate		Consumer		Total
Loans individually evaluated for impairment	$	21,977	$	3,115	$	61,088	$	1,133	$	87,313
Loan collectively evaluated for impairment		432,110		65,007		980,308		211,177		1,688,602
Total	$	454,087	$	68,122	$	1,041,396	$	212,310	$	1,775,915

Schedule of Loans Modified and Considered Troubled Debt Restructuring

The Company’s loans that were modified in the years ended December 31, 2012 and 2011, and considered a troubled debt restructuring are as follows (dollars in thousands):

	Year ended December 31, 2012						Year ended December 31, 2011
	Number		Pre-Modification Recorded Investment		Post- Modification Recorded Investment		Number		Pre-Modification Recorded Investment		Post- Modification Recorded Investment
Commercial		18	$	1,180	$	1,180		8	$	2,467	$	2,467
Agricultural		5		354		354		4		2,566		2,566
Real Estate		34		12,304		12,304		9		2,292		2,292
Consumer		2		20		20		—		—		—
Total		59	$	13,858	$	13,858		21	$	7,325	$	7,325

Schedule of How Loans Were Modified as Troubled Debt Restructured Loans

The balances below provide information as to how the loans were modified as troubled debt restructured loans during the year ended December 31, 2012 and 2011 (in thousands):

	Year ended December 31, 2012						Year ended December 31, 2011
	Adjusted Interest Rate		Extended Maturity		Combined Rate and Maturity		Adjusted Interest Rate		Extended Maturity		Combined Rate and Maturity
Commercial	$	509	$	298	$	373	$	2,350	$	118	$	—
Agricultural		243		15		95		—		2,566		—
Real Estate		935		2,893		8,477		492		1,468		331
Consumer		—		19		1		—		—		—
Total	$	1,687	$	3,225	$	8,946	$	2,842	$	4,152	$	331

Schedule of Troubled Debt Restructuring

The loans are as follows (dollars in thousands):

	Year ended December 31, 2012
	Number		Balance
Commercial		1	$	30
Agriculture		—		—
Real Estate		6		1,509
Consumer		1		19
Total		8	$	1,558

Analysis of Changes in Loans to Officers, Directors, Principal Shareholders, or Associates of Such Persons

An analysis of the changes in loans to officers, directors, principal shareholders, or associates of such persons for the year ended December 31, 2012 (determined as of each respective year-end) follows (in thousands):

	Beginning Balance		Additional Loans		Payments		Ending Balance
Year ended December 31, 2012	$	42,548	$	81,196	$	80,226	$	43,518