Allowance for Loan Losses

12 Months Ended

Dec. 31, 2011

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses

Note 4—Allowance for Loan Losses

The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company over the prior one to five years. Management believes the two-year historical loss experience methodology is appropriate in the current economic environment, as it captures loss rates that are comparable to the current period being analyzed.

	December 31		December 31		December 31
	2011		2010		2009
Balance at beginning of the period	$	19,064	$	16,015	$	11,410
Loans charged-off:
Commercial
Owner occupied real estate		190		1,560		920
Non owner occupied real estate		401		288		400
Residential development		—		—		—
Development & Spec Land Loans		—		780		787
Commercial and industrial		376		1,228		354
Total commercial		967		3,856		2,461
Real estate
Residential mortgage		956		811		432
Residential construction		—		—		—
Mortgage warehouse		—		—		—
Total real estate		956		811		432
Consumer
Direct Installment		661		568		2,297
Direct Installment Purchased		—		—		—
Indirect Installment		1,676		2,863		3,960
Home Equity		2,420		1,636		1,097
Total consumer		4,757		5,067		7,354
Total loans charged-off		6,680		9,734		10,247
Recoveries of loans previously charged off:
Commercial
Owner occupied real estate		26		5		—
Non owner occupied real estate		113		—		—
Residential development		—		66		—
Development & Spec Land Loans		—		—		—
Commercial and industrial		24		162		66
Total commercial		163		233		66
Real estate
Residential mortgage		10		1		—
Residential construction		—		—		—
Mortgage warehouse		—		—		—
Total real estate		10		1		—
Consumer
Direct Installment		96		61		147
Direct Installment Purchased		—		—		—
Indirect Installment		803		880		992
Home Equity		144		54		44
Total consumer		1,043		995		1,183
Total loan recoveries		1,216		1,229		1,249
Net loans charged-off		5,464		8,505		8,998
Provision charged to operating expense		5,282		11,554		13,603
Balance at the end of the period	$	18,882	$	19,064	$	16,015

Management’s general practice is to proactively charge down loans individually evaluated for impairment to the fair value of the underlying collateral.

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 90 days past due, and charge down to the net realizable value when other secured loans are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment analysis:

					Mortgage
December 31, 2011	Commercial		Real Estate		Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	2,136	$	—	$	—	$	—	$	2,136
Collectively evaluated for impairment		5,881		2,472		1,695		6,698		16,746
Total ending allowance balance	$	8,017	$	2,472	$	1,695	$	6,698	$	18,882
Loans:
Individually evaluated for impairment	$	7,960	$	—	$	—	$	—	$	7,960
Collectively evaluated for impairment		345,350		157,663		208,726		266,450		978,189
Total ending loans balance	$	353,310	$	157,663	$	208,726	$	266,450	$	986,149

					Mortgage
December 31, 2010	Commercial		Real Estate		Warehousing		Consumer		Total
Allowance For Loan Losses
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,457	$	—	$	—	$	—	$	1,457
Collectively evaluated for impairment		6,097		2,379		1,435		7,696		17,607
Total ending allowance balance	$	7,554	$	2,379	$	1,435	$	7,696	$	19,064
Loans:
Individually evaluated for impairment	$	8,123	$	—	$	—	$	—	$	8,123
Collectively evaluated for impairment		322,953		163,040		124,075		267,832		877,900
Total ending loans balance	$	331,076	$	163,040	$	124,075	$	267,832	$	886,023