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Loans and Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2012
Loans and Allowance for Loan Losses [Abstract]  
Summary of Loans
Loans are stated at the principal amount outstanding net of unearned discounts, unearned income and allowance for loan losses.  Unearned income includes deferred loan origination fees reduced by loan origination costs and is amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method.  Interest on substantially all loans is credited to income based on the principal amount outstanding. A summary of loans at June 30, 2012 and December 31, 2011 follows (in thousands):

   
June 30, 2012
  
December 31, 2011
 
Construction and land development
 $18,663  $23,136 
Farm loans
  78,274   72,586 
1-4 Family residential properties
  186,684   180,738 
Multifamily residential properties
  31,067   19,847 
Commercial real estate
  304,369   321,908 
     Loans secured by real estate
  619,057   618,215 
Agricultural loans
  56,436   63,182 
Commercial and industrial loans
  144,673   150,631 
Consumer loans
  15,839   16,274 
All other loans
  8,870   11,430 
     Gross loans
  844,875   859,732 
Less:
        
  Net deferred loan fees, premiums and discounts
  435   704 
  Allowance for loan losses
  11,455   11,120 
     Net loans
 $832,985  $847,908 
Allowance for Loan Losses and Recorded Investment in Loans
The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method for the three and six-months ended June 30, 2012 and 2011 and for the year ended December 31, 2011 (in thousands):
 
Three months ended June 30, 2012
 
Commercial/ Commercial Real Estate
  
Agricultural/ Agricultural Real Estate
  
Residential Real Estate
  
Consumer
  
Unallocated
  
Total
 
Allowance for loan losses:
                  
  Balance, beginning of period
 $8,810  $570  $710  $386  $817  $11,293 
    Provision charged to expense
  453   76   68   27   (208)  416 
    Losses charged off
  (295)  (12)  (44)  (47)  -   (398)
    Recoveries
  39   67   9   29   -   144 
  Balance, end of period
 $9,007  $701  $743  $395  $609  $11,455 
  Ending balance:
                        
    Individually evaluated for impairment
 $645  $89  $-  $-  $-  $734 
    Collectively evaluated for impairment
 $8,362  $612  $743  $395  $609  $10,721 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
Three months ended June 30, 2011
                        
Allowance for loan losses:
                        
  Balance, beginning of period
 $8,737  $360  $448  $403  $703  $10,651 
    Provision charged to expense
  377   196   63   14   266   916 
    Losses charged off
  (877)  -   (49)  (40)  -   (966)
    Recoveries
  75   -   -   19   -   94 
  Balance, end of period
 $8,312  $556  $462  $396  $969  $10,695 
  Ending balance:
                        
    Individually evaluated for impairment
 $661  $-  $-  $-  $-  $661 
    Collectively evaluated for impairment
 $7,651  $556  $462  $396  $969  $10,034 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
 
Six months ended June 30, 2012
                  
Allowance for loan losses:
                  
  Balance, beginning of year
 $8,791  $546  $636  $378  $769  $11,120 
    Provision charged to expense
  748   100   291   52   (160)  1,031 
    Losses charged off
  (598)  (12)  (205)  (95)  -   (910)
    Recoveries
  66   67   21   60   -   214 
  Balance, end of period
 $9,007  $701  $743  $395  $609  $11,455 
  Ending balance:
                        
    Individually evaluated for impairment
 $645  $89  $-  $-  $-  $734 
    Collectively evaluated for impairment
 $8,362  $612  $743  $395  $609  $10,721 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
Loans:
                        
  Ending balance
 $517,406  $132,611  $179,577  $15,600  $731  $845,925 
  Ending balance:
                        
    Individually evaluated for impairment
 $4,487  $947  $-  $-  $-  $5,434 
    Collectively evaluated for impairment
 $512,919  $131,664  $179,577  $15,600  $731  $840,491 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
 
Six months ended June 30, 2011
            
Allowance for loan losses:
                  
  Balance, beginning of year
 $8,307  $404  $440  $392  $850  $10,393 
    Provision charged to expense
  1,468   152   84   33   119   1,856 
    Losses charged off
  (1,569)  -   (63)  (76)  -   (1,708)
    Recoveries
  106   -   1   47   -   154 
  Balance, end of period
 $8,312  $556  $462  $396  $969  $10,695 
  Ending balance:
                        
    Individually evaluated for impairment
 $661  $-  $-  $-  $-  $661 
    Collectively evaluated for impairment
 $7,651  $556  $462  $396  $969  $10,034 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
Loans:
                        
  Ending balance
 $466,332  $109,788  $186,522  $17,471  $20,379  $800,492 
  Ending balance:
                        
    Individually evaluated for impairment
 $7,411  $1,149  $-  $-  $-  $8,560 
    Collectively evaluated for impairment
 $458,921  $108,639  $186,522  $17,471  $20,379  $791,932 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
Year ended December 31, 2011
                        
Allowance for loan losses:
                        
  Balance, beginning of year
 $8,307  $404  $440  $392  $850  $10,393 
    Provision charged to expense
  2,309   205   546   122   (81)  3,101 
    Losses charged off
  (3,077)  (66)  (363)  (254)  -   (3,760)
    Recoveries
  1,252   3   13   118   -   1,386 
  Balance, end of year
 $8,791  $546  $636  $378  $769  $11,120 
  Ending balance:
                        
    Individually evaluated for impairment
 $575  $-  $-  $-  $-  $575 
    Collectively evaluated for impairment
 $8,216  $546  $636  $378  $769  $10,545 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
Loans:
                        
  Ending balance
 $505,693  $130,595  $185,151  $16,270  $22,365  $860,074 
  Ending balance:
                        
    Individually evaluated for impairment
 $4,719  $1,149  $-  $-  $-  $5,868 
    Collectively evaluated for impairment
 $500,974  $129,446  $185,151  $16,270  $22,365  $854,206 
    Loans acquired with deteriorated
                        
      credit quality
 $-  $-  $-  $-  $-  $- 
Credit Risk Profile of the Company's Loan Portfolio
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans. The following tables present the credit risk profile of the Company's loan portfolio based on rating category and payment activity as of June 30, 2012 and December 31, 2011 (in thousands):


   
Construction &
Land Development
  
Farm Loans
  
1-4 Family Residential
Properties
  
Multifamily Residential
Properties
 
   
2012
  
2011
  
2012
  
2011
  
2012
  
2011
  
2012
  
2011
 
Pass
 $15,060  $19,708  $73,582  $67,637  $185,236  $180,247  $30,860  $19,638 
Watch
  2,162   2,168   2,514   2,496   435   497   -   - 
Substandard
  1,441   1,260   2,188   2,452   2,582   1,105   207   208 
Doubtful
  -   -   -   -   -   -   -   - 
     Total
 $18,663  $23,136  $78,284  $72,585  $188,253  $181,849  $31,067  $19,846 

   
Commercial Real Estate (Nonfarm/Nonresidential)
  
Agricultural Loans
  
Commercial & Industrial Loans
  
Consumer Loans
 
   
2012
  
2011
  
2012
  
2011
  
2012
  
2011
  
2012
  
2011
 
Pass
 $274,571  $288,539  $51,481  $58,133  $141,679  $147,591  $15,824  $16,271 
Watch
  24,026   24,664   1,569   1,840   1,278   280   -   - 
Substandard
  5,086   7,798   3,460   3,284   1,815   2,845   14   - 
Doubtful
  -   -   -   -   -   -   -   - 
     Total
 $303,683  $321,001  $56,510  $63,257  $144,772  $150,716  $15,838  $16,271 

   
All Other Loans
  
Total Loans
 
   
2012
  
2011
  
2012
  
2011
 
Pass
 $8,855  $11,413  $797,148  $809,177 
Watch
  -   -   31,984   31,945 
Substandard
  -   -   16,793   18,952 
Doubtful
  -   -   -   - 
     Total
 $8,855  $11,413  $845,925  $860,074 
Loan Portfolio Aging Analysis
The following table presents the Company's loan portfolio aging analysis at June 30, 2012 and December 31, 2011 (in thousands):
 
June 30, 2012
 
30-59 days Past Due
  
60-89 days Past Due
  
90 Days
or More Past Due
  
Total
Past Due
  
Current
  
Total Loans Receivable
  
Total Loans > 90 days & Accruing
 
Construction and land development
 $-  $-  $-  $-  $18,663  $18,663  $- 
Farm loans
  204   83   70   357   77,927   78,284   - 
1-4 Family residential properties
  636   543   967   2,146   186,107   188,253   - 
Multifamily residential properties
  -   -   -   -   31,067   31,067   - 
Commercial real estate
  617   111   346   1,074   302,609   303,683   - 
     Loans secured by real estate
  1,457   737   1,383   3,577   616,373   619,950   - 
Agricultural loans
  272   823   58   1,153   55,357   56,510   - 
Commercial and industrial loans
  258   57   248   563   144,209   144,772   - 
Consumer loans
  89   29   15   133   15,705   15,838   - 
All other loans
  -   -   -   -   8,855   8,855   - 
     Total loans
 $2,076  $1,646  $1,704  $5,426  $840,499  $845,925  $- 
December 31, 2011
                            
Construction and land development
 $-  $-  $-  $-  $23,136  $23,136  $- 
Farm loans
  377   111   737   1,225   71,360   72,585   - 
1-4 Family residential properties
  1,079   200   1,033   2,312   179,537   181,849   - 
Multifamily residential properties
  -   -   -   -   19,846   19,846   - 
Commercial real estate
  399   101   228   728   320,273   321,001   - 
     Loans secured by real estate
  1,855   412   1,998   4,265   614,152   618,417   - 
Agricultural loans
  -   -   673   673   62,584   63,257   - 
Commercial and industrial loans
  950   73   585   1,608   149,108   150,716   - 
Consumer loans
  94   36   7   137   16,134   16,271   - 
All other loans
  -   -   -   -   11,413   11,413   - 
     Total loans
 $2,899  $521  $3,263  $6,683  $853,391  $860,074  $- 
Impaired Loans
The following tables present impaired loans as of June 30, 2012 and December 31, 2011 (in thousands):


   
June 30, 2012
  
December 31, 2011
 
   
Recorded
Balance
  
Unpaid Principal Balance
  
Specific Allowance
  
Recorded
Balance
  
Unpaid Principal Balance
  
Specific Allowance
 
Loans with a specific allowance:
                  
Construction and land development
 $1,014  $1,529  $407  $833  $1,070  $295 
Farm loans
  -   -   -   -   -   - 
1-4 Family residential properties
  67   67   23   71   71   27 
Multifamily residential properties
  -   -   -   -   -   - 
Commercial real estate
  597   597   121   1,414   1,693   183 
     Loans secured by real estate
  1,678   2,193   551   2,318   2,834   505 
Agricultural loans
  312   312   89   -   -   - 
Commercial and industrial loans
  411   411   94   382   382   70 
Consumer loans
  -   -   -   -   -   - 
All other loans
  -   -   -   -   -   - 
     Total loans
 $2,401  $2,916  $734  $2,700  $3,216  $575 
Loans without a specific allowance:
                        
Construction and land development
 $-  $-  $-  $-  $-  $- 
Farm loans
  206   206   -   532   532   - 
1-4 Family residential properties
  1,535   1,862   -   1,641   1,818   - 
Multifamily residential properties
  -   -   -   -   -   - 
Commercial real estate
  1,840   1,879   -   1,226   1,256   - 
     Loans secured by real estate
  3,581   3,947   -   3,399   3,606   - 
Agricultural loans
  553   553   -   673   673   - 
Commercial and industrial loans
  369   589   -   660   1,255   - 
Consumer loans
  15   31   -   8   20   - 
All other loans
  -   -   -   -   -   - 
     Total loans
 $4,518  $5,120  $-  $4,740  $5,554  $- 
Total loans:
                        
Construction and land development
 $1,014  $1,529  $407  $833  $1,070  $295 
Farm loans
  206   206   -   532   532   - 
1-4 Family residential properties
  1,602   1,929   23   1,712   1,889   27 
Multifamily residential properties
  -   -   -   -   -   - 
Commercial real estate
  2,437   2,476   121   2,640   2,949   183 
     Loans secured by real estate
  5,259   6,140   551   5,717   6,440   505 
Agricultural loans
  865   865   89   673   673   - 
Commercial and industrial loans
  780   1,000   94   1,042   1,637   70 
Consumer loans
  15   31   -   8   20   - 
All other loans
  -   -   -   -   -   - 
     Total loans
 $6,919  $8,036  $734  $7,440  $8,770  $575 
Impaired loans by portfolio class
The following tables present average recorded investment and interest income recognized on impaired loans for the three and six- month periods ended June 30, 2012 and 2011 (in thousands):

   
For the three months ended
 
   
June 30, 2012
  
June 30, 2011
 
   
Average Investment
in Impaired Loans
  
Interest Income Recognized
  
Average Investment
in Impaired Loans
  
Interest Income Recognized
 
Construction and land development
 $1,014  $-  $1,430  $- 
Farm loans
  206   -   535   - 
1-4 Family residential properties
  1,621   -   2,320   - 
Multifamily residential properties
  -   -   -   - 
Commercial real estate
  2,437   7   4,074   1 
     Loans secured by real estate
  5,278   7   8,359   1 
Agricultural loans
  864   -   752   - 
Commercial and industrial loans
  780   3   1,366   - 
Consumer loans
  15   -   -   - 
All other loans
  -   -   -   - 
     Total loans
 $6,937  $10  $10,477  $1 
 
   
For the six months ended
 
   
June 30, 2012
  
June 30, 2011
 
   
Average Investment
in Impaired Loans
  
Interest Income Recognized
  
Average Investment
in Impaired Loans
  
Interest Income Recognized
 
Construction and land development
 $1,014  $-  $1,422  $- 
Farm loans
  206   -   536   - 
1-4 Family residential properties
  1,632   -   2,331   - 
Multifamily residential properties
  -   -   -   - 
Commercial real estate
  2,349   14   4,483   7 
     Loans secured by real estate
  5,201   14   8,772   7 
Agricultural loans
  883   -   756   - 
Commercial and industrial loans
  834   7   1,171   - 
Consumer loans
  17   -   -   - 
All other loans
  -   -   -   - 
     Total loans
 $6,935  $21  $10,699  $7 
Nonaccrual Loans
The following table presents the Company's recorded balance of nonaccrual loans as June 30, 2012 and December 31, 2011 (in thousands). This table excludes purchased impaired loans and performing troubled debt restructurings.


   
June 30,
2012
  
December 31, 2011
 
Construction and land development
 $1,014  $833 
Farm loans
  206   532 
1-4 Family residential properties
  1,595   1,712 
Multifamily residential properties
  -   - 
Commercial real estate
  2,048   2,245 
     Loans secured by real estate
  4,863   5,322 
Agricultural loans
  865   673 
Commercial and industrial loans
  476   720 
Consumer loans
  15   8 
All other loans
  -   - 
     Total loans
 $6,219  $6,723 
Recorded Balance of Troubled Debt Restructurings
The following table presents the Company's recorded balance of troubled debt restructurings at June 30, 2012 (in thousands).


Troubled debt restructurings:
 
June 30, 2012
  
December 31, 2011
 
Construction and land development
 $1,014  $- 
1-4 Family residential properties
  471   393 
Commercial real estate
  1,025   952 
     Loans secured by real estate
  2,510   1,345 
Commercial and industrial loans
  320   489 
     Total
 $2,830  $1,834 
Performing troubled debt restructurings:
        
1-4 Family residential properties
 $7  $- 
Commercial real estate
  389   395 
     Loans secured by real estate
  396   395 
Commercial and industrial loans
  304   322 
     Total
 $700  $717