Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2013

Allowance for Loan Losses [Abstract]

Allowance for loan losses

The following tables detail activity in the allowance for loan losses, segregated by class of loan, for the three month period ended March 31, 2013 and March 31, 2012.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other loan categories and periodically may result in reallocation within the provision categories.

March 31, 2013
	Beginning									Ending
	Balance		Charge-Offs			Recoveries		Provision		Balance
Commercial and Agricultural
Commercial	$	981	$	(31	)	$	18	$	39	$	1,007
Agricultural		296		--			4		--		300
Real Estate
Commercial Construction		1,890		(692	)		80		511		1,789
Residential Construction		138		--			--		--		138
Commercial		5,163		(485	)		43		593		5,314
Residential		3,406		(187	)		5		228		3,452
Farmland		291		(1	)		11		1		302
Consumer and Other
Consumer		228		(101	)		32		123		282
Other		344		(4	)		1		5		346
	$	12,737	$	(1,501	)	$	194	$	1,500	$	12,930

March 31, 2012
	Beginning									Ending
	Balance		Charge-Offs			Recoveries		Provision		Balance
Commercial and Agricultural
Commercial	$	1,071	$	(47	)	$	4	$	52	$	1,080
Agricultural		297		--			--		--		297
Real Estate
Commercial Construction		3,123		(260	)		21		289		3,173
Residential Construction		138		--			--		--		138
Commercial		6,448		(1,297	)		11		1,438		6,600
Residential		3,695		(129	)		3		142		3,711
Farmland		365		--			4		--		369
Consumer and Other
Consumer		205		(19	)		25		21		232
Other		308		--			2		--		310
	$	15,650	$	(1,752	)	$	70	$	1,942	$	15,910

Allowance for loan losses, segregated by impairment methodology

The Company determines its individual reserves during its quarterly review of substandard loans.  This process involves reviewing all loans with a risk grade of 6 or greater and an outstanding balance of $250,000 or more, regardless of the loans impairment classification.  Effective March 31, 2013, management increased the dollar threshold of this review process from $50,000 to $250,000. The threshold change resulted in loans totaling $3.2 million at March 31, 2013 being removed from the individual impairment review process and being placed in the collective review process. These loans are now subject to general reserves.

Since not all loans in the substandard category are considered impaired, this quarterly review process may result in the identification of specific reserves on nonimpaired loans.  Management considers those loans graded substandard, but not classified as impaired, to be higher risk loans and, therefore, makes specific allocations to the allowance for those loans if warranted. The total of such loans is $10,618 and $14,994 as of March 31, 2013 and 2012, respectively. Specific allowance allocation were made for these loans totaling $645 and $1,570 as of March 31, 2013 and 2012, respectively. Since these loans are not considered impaired, both the loan balance and related specific allocation are included in the "Collectively Evaluated for Impairment" column of the following tables. Likewise, at March 31, 2012, impaired loans totaling $869 thousand were below the $50,000 review threshold and were subject to the bank's general loan loss reserve methodology and are included in the "Collectively Evaluated for Impairment" column of the following tables.  

At March 31, 2013, impaired loans totaling $1.97 million were below the $250,000 review threshold and were not individually reviewed for impairment.  Those loans were subject to the bank's general loan loss reserve methodology and are included in the "Collectively Evaluated for Impairment" column of the following tables.  The following tables present breakdowns of the allowance for loan losses, segregated by impairment methodology for March 31, 2013 and 2012:

March 31, 2013	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	456	$	551	$	1,007	$	1,554	$	51,352	$	52,906
Agricultural		--		300		300		--		7,856		7,856
Real Estate
Commercial Construction		1,493		296		1,789		9,442		42,652		52,094
Residential Construction		--		138		138		--		7,570		7,570
Commercial		1,426		3,888		5,314		25,175		303,677		328,852
Residential		1,118		2,334		3,452		7,173		197,485		204,658
Farmland		--		302		302		2,277		45,931		48,208
Consumer and Other
Consumer		--		282		282		--		28,379		28,379
Other		--		346		346		--		6,297		6,297
Total End of Period Balance	$	4,493	$	8,437	$	12,930	$	45,621	$	691,199	$	736,820

March 31, 2012	Ending Allowance Balance						Ending Loan Balance
	Individually		Collectively				Individually		Collectively
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Commercial and Agricultural
Commercial	$	304	$	776	$	1,080	$	1,885	$	53,788	$	55,673
Agricultural		--		297		297		--		8,848		8,848
Real Estate
Commercial Construction		2,755		418		3,173		23,322		33,098		56,420
Residential Construction		--		138		138		--		3,224		3,224
Commercial		1,023		5,577		6,600		35,665		264,724		300,389
Residential		788		2,923		3,711		6,086		188,782		194,868
Farmland		12		357		369		2,536		45,472		48,008
Consumer and Other
Consumer		--		232		232		--		29,643		29,643
Other		--		310		310		--		9,440		9,440
Total End of Period Balance	$	4,882	$	11,028	$	15,910	$	69,494	$	637,019	$	706,513