Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2012

Loans Receivable, Net [Abstract]

Loan Credit Quality Indicators

The following table presents loans held for investment balances by risk grade as of December 31, 2012:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful
	(Ratings 1-5)		(Rating 6)		(Rating 7)		(Rating 8)		Total
Commercial and agricultural	$	69,003	$	3,447	$	6,953	$	301	$	79,704
Real estate - construction	40,117		2,031		16,266		—		58,414
Real estate - mortgage:
1-4 family residential	504,819		15,855		32,625		239		553,538
Commercial	296,271		50,275		95,126		164		441,836
Consumer	42,495		178		426		444		43,543
Total	$	952,705	$	71,786	$	151,396	$	1,148	$	1,177,035

The following table presents loans held for investment balances by risk grade as of December 31, 2011:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful
	(Ratings 1-5)		(Rating 6)		(Rating 7)		(Rating 8)		Total
Commercial and agricultural	$	77,305	$	7,373	$	9,921	$	490	$	95,089
Real estate - construction	53,105		5,797		33,886		18		92,806
Real estate - mortgage:
1-4 family residential	385,022		25,864		42,630		209		453,725
Commercial	351,731		91,364		87,971		317		531,383
Consumer	43,487		279		387		379		44,532
Total	$	910,650	$	130,677	$	174,795	$	1,413	$	1,217,535

Past Due Loans

The following table presents an aging analysis of accruing and nonaccruing loans as of December 31, 2012:

(dollars in thousands)	Accruing
	30-59 days past due		60-89 days past due		More than 90 days past due		Nonaccrual		Total past due and nonaccrual		Current and accruing		Total Loans
PC and Originated Loans
Commercial and agricultural	$	515	$	—	$	50	$	2,746	$	3,311	$	61,727	$	65,038
Real estate - construction	26		119		—		14,297		14,442		41,290		55,732
Real estate - mortgage:
1-4 family residential	6,173		880		—		18,372		25,425		488,898		514,323
Commercial	617		—		177		43,621		44,415		226,948		271,363
Consumer	24		—		—		206		230		41,957		42,187
Total	$	7,355	$	999	$	227	$	79,242	$	87,823	$	860,820	$	948,643
PI Loans
Commercial and agricultural	$	100	$	1	$	1,103	$	—	$	1,204	$	13,462	$	14,666
Real estate - construction	117		—		655		—		772		1,910		2,682
Real estate - mortgage:
1-4 family residential	1,308		495		4,678		—		6,481		32,734		39,215
Commercial	2,559		4,300		17,384		—		24,243		146,230		170,473
Consumer	4		—		13		—		17		1,339		1,356
Total	$	4,088	$	4,796	$	23,833	$	—	$	32,717	$	195,675	$	228,392
Total Loans	$	11,443	$	5,795	$	24,060	$	79,242	$	120,540	$	1,056,495	$	1,177,035

The following table presents an aging analysis of accruing and nonaccruing loans as of December 31, 2011:

(dollars in thousands)	Accruing
	30-59 days past due		60-89 days past due		More than 90 days past due		Nonaccrual		Total past due and nonaccrual		Current and accruing		Total Loans
PC and Originated Loans
Commercial and agricultural	$	181	$	124	$	305	$	4,636	$	5,246	$	59,826	$	65,072
Real estate - construction	1,410		75		1,400		30,844		33,729		51,198		84,927
Real estate - mortgage:
1-4 family residential	3,066		885		292		26,048		30,291		373,048		403,339
Commercial	1,077		274		1,003		36,666		39,020		249,265		288,285
Consumer	484		278		—		250		1,012		42,677		43,689
Total	$	6,218	$	1,636	$	3,000	$	98,444	$	109,298	$	776,014	$	885,312
PI Loans
Commercial and agricultural	$	443	$	383	$	579	$	—	$	1,405	$	28,612	$	30,017
Real estate - construction	360		—		302		—		662		7,217		7,879
Real estate - mortgage:
1-4 family residential	1,585		132		1,801		—		3,518		46,868		50,386
Commercial	8,946		535		6,313		—		15,794		227,304		243,098
Consumer	9		14		—		—		23		820		843
Total	$	11,343	$	1,064	$	8,995	$	—	$	21,402	$	310,821	$	332,223
Total Loans	$	17,561	$	2,700	$	11,995	$	98,444	$	130,700	$	1,086,835	$	1,217,535

Schedule of Impaired Loans Receivables

The following table summarizes information relative to impaired loans for the quarters ended on the dates indicated:

	December 31, 2012				December 31, 2011
(dollars in thousands)	Balance		Associated Reserves		Balance		Associated Reserves
Impaired loans, held for sale	$	—	$	—	$	4,529	$	—
Impaired loans, not individually reviewed for impairment	6,017		—		5,127		—
Impaired loans, individually reviewed, with no impairment	62,282		—		53,884		—
Impaired loans, individually reviewed, with impairment	15,312		1,737		42,357		11,090
Total impaired loans, excluding purchased impaired *	$	83,611	$	1,737	$	105,897	$	11,090
Purchased impaired loans with subsequent deterioration	$	192,115	5,373		$	—	—
Purchased impaired loans with no subsequent deterioration	$	36,277	—		$	330,836	—
Total Reserves			$	7,110			$	11,090
Average impaired loans calculated using a simple average	$	94,754			$	112,600

* Included at December 31, 2012 and December 31, 2011 were $4.5 million and $2.9 million, respectively, in restructured and performing loans.

Schedule of Loans, Non Accrual Status

The following table presents loans held for investment on nonaccrual status by loan class for the dates indicated below:

(dollars in thousands)	December 31,		December 31,
	2012		2011
Loans held for investment:
Commercial and agricultural	$	2,746	$	4,636
Real estate - construction	14,297		30,844
Real estate - mortgage:
1-4 family residential	18,372		26,048
Commercial	43,621		36,666
Consumer	206		250
Total nonaccrual loans	79,242		98,444
Loans more than 90 days delinquent, still on accrual	227		3,000
Total nonperforming loans	$	79,469	$	101,444

The following table presents loans held for sale on nonaccrual status by loan class for the dates indicated below:

(dollars in thousands)	December 31,		December 31,
	2012		2011
Loans held for sale:
Real estate - construction	$	—	$	1,807
Real estate - mortgage:
1-4 family residential	—		517
Commercial	—		2,205
Consumer	—		—
Total	$	—	$	4,529

Impaired Loans

The following table presents individually reviewed impaired loans and purchased impaired loans with subsequent credit deterioration, segregated by portfolio segment, and the corresponding reserve for impaired loan losses as of December 31, 2012:

			Unpaid
(dollars in thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
With no related allowance recorded:
Commercial and agricultural	$	1,755	$	2,608	$	—
Real estate - construction	11,875		18,553		—
Real estate - mortgage:
1-4 family residential	16,437		20,764		—
Commercial	32,215		38,585		—
Consumer	—		—		—
Total	$	62,282	$	80,510	$	—
With an allowance recorded:
Commercial and agricultural	$	579	$	602	$	282
Real estate - construction	1,658		1,843		82
Real estate - mortgage:
1-4 family residential	1,681		1,745		607
Commercial	11,394		14,714		766
Consumer	—		—		—
Total	$	15,312	$	18,904	$	1,737
Total individually evaluated impaired loans
Commercial and agricultural	$	2,334	$	3,210	$	282
Real estate - construction	13,533		20,396		82
Real estate - mortgage:
1-4 family residential	18,118		22,509		607
Commercial	43,609		53,299		766
Consumer	—		—		—
Total	$	77,594	$	99,414	$	1,737
PI loans with subsequent credit deterioration:
Commercial and agricultural	$	11,533	$	11,728	$	524
Real estate - construction	2,285		2,236		200
Real estate - mortgage:
1-4 family residential	34,961		35,802		711
Commercial	141,974		145,704		3,388
Consumer	1,362		1,147		550
Total	$	192,115	$	196,617	$	5,373

The following table presents individually reviewed impaired loans, segregated by portfolio segment, and the corresponding reserve for impaired loan losses as of December 31, 2011:

			Unpaid
(dollars in thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
With no related allowance recorded:
Commercial and agricultural	$	2,354	$	4,346	$	—
Real estate - construction	16,351		25,714		—
Real estate - mortgage:
1-4 family residential	13,003		19,657		—
Commercial	22,176		26,964		—
Consumer	—		102		—
Total	$	53,884	$	76,783	$	—
With an allowance recorded:
Commercial and agricultural	$	1,536	$	2,047	$	1,506
Real estate - construction	14,109		14,718		4,899
Real estate - mortgage:
1-4 family residential	11,883		12,328		2,140
Commercial	14,659		14,943		2,415
Consumer	170		172		130
Total	$	42,357	$	44,208	$	11,090
Total:
Commercial and agricultural	$	3,890	$	6,393	$	1,506
Real estate - construction	30,460		40,432		4,899
Real estate - mortgage:
1-4 family residential	24,886		31,985		2,140
Commercial	36,835		41,907		2,415
Consumer	170		274		130
Total	$	96,241	$	120,991	$	11,090

Impaired Loans, Average Recorded Investment and Interest Income

The following summary includes impaired loans individually reviewed as well as impaired loans held for sale. Average recorded investment and interest income recognized on impaired loans, segregated by portfolio segment, is shown in the following table for the year ended December 31, 2012 and December 31, 2011.

	For Twelve Months Ended				For Twelve Months Ended
	December 31, 2012				December 31, 2011
	Average		Interest		Average		Interest
(dollars in thousands)	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
Commercial and agricultural	$	1,989	$	42	$	3,202	$	—
Real estate - construction	15,130		92		41,164		1
Real estate - mortgage:
1-4 family residential	18,237		204		17,077		1
Commercial	35,765		286		38,688		25
Consumer	—		—		175		—
Total	$	71,121	$	624	$	100,306	$	27
With an allowance recorded:
Commercial and agricultural	$	706	$	16	$	4,458	$	—
Real estate - construction	1,762		—		51,354		—
Real estate - mortgage:
1-4 family residential	1,764		61		15,740		7
Commercial	13,069		445		40,777		—
Consumer	—		—		214		—
Total	$	17,301	$	522	$	112,543	$	7
Total:
Commercial and agricultural	$	2,695	$	58	$	7,660	$	—
Real estate - construction	16,892		92		92,518		1
Real estate - mortgage:
1-4 family residential	20,001		265		32,817		8
Commercial	48,834		731		79,465		25
Consumer	—		—		389		—
Total	$	88,422	$	1,146	$	212,849	$	34

Schedule of Loans Receivable, Sold Loans

The following table presents sold loans by portfolio segment for the year ended December 31, 2012 and December 31, 2011

	For the Twelve months ended December 31, 2012					For the Twelve months ended December 31, 2011
(dollars in thousands)	Number	Recorded		Contract		Number	Recorded		Contract
	of Loans	Investment		Pricing		of Loans	Investment		Pricing
Commercial and agricultural	—	$	—	$	—	12	$	4,576	$	1,523
Real estate - construction	—	—		—		15	35,984		21,227
Real estate - mortgage:
1-4 family residential	—	—		—		10	4,962		4,059
Commercial	2	3,950		4,200		42	20,217		16,660
Consumer	—	—		—		1	190		—
Total	2	$	3,950	$	4,200	80	$	65,929	$	43,469

Schedule of Loans Recievable, Acquired Loans

The following table presents the balance of all Granite Purchased Loans:

	At December 31, 2012
(dollars in thousands)	Purchased Impaired		Purchased Contractual		Total Purchased Loans		Unpaid Principal Balance
Commercial and agricultural	$	14,666	$	7,311	$	21,977	$	21,692
Real estate - construction	2,682		—		2,682		2,677
Real estate - mortgage:
1-4 family residential	39,215		27,484		66,699		69,200
Commercial	170,467		49		170,516		176,347
Consumer	1,362		—		1,362		1,144
Total	$	228,392	$	34,844	$	263,236	$	271,060

	At December 31, 2011
(dollars in thousands)	Purchased Impaired		Purchased Contractual		Total Purchased Loans		Unpaid Principal Balance
Commercial and agricultural	$	28,872	$	8,061	$	36,933	$	39,531
Real estate - construction	7,641		—		7,641		8,413
Real estate - mortgage:
1-4 family residential	52,894		34,590		87,484		93,310
Commercial	239,621		—		239,621		261,076
Consumer	1,808		1		1,809		1,800
Total	$	330,836	$	42,652	$	373,488	$	404,130

Deteriorated Loans Acquired, Accretable Yield Movement Schedule

The table below includes only those Granite Purchased Loans accounted for under the expected cash flow method (PI Loans) for the periods indicated. This table does not include PC Loans, including Granite Purchased PC Loans or purchased performing residential mortgage loans.

	For Twelve Months Ended December 31, 2012						For Twelve Months Ended December 31, 2011
	Purchased Impaired						Purchased Impaired
(dollars in thousands)	Carrying Amount			Future Accretion			Carrying Amount			Future Accretion
Balance, beginning of period	$	330,836		$	47,804		$	—		$	—
Addition from Bank of Granite Corp acquisition	—			—			351,121			52,581
Accretion	20,549			(20,549		)	4,777			(4,777		)
Increase in future accretion	—			3,045			—			—
Payments received	(111,875		)	—			(24,467		)	—
Foreclosed and transferred to OREO	(11,118		)	—			(595		)	—
Subtotal before allowance	228,392			30,300			330,836			47,804
Allowance for credit losses	(5,373		)	—			—			—
Net carrying amount, end of period	$	223,019		$	30,300		$	330,836		$	47,804

Allowance for Loan Losses

An analysis of the changes in the ALL is as follows:

(dollars in thousands)	2012			2011			2010
Balance, beginning of period	$	39,360		$	93,687		$	49,461
Provision for losses charged to continuing operations	14,049			67,362			132,755
Net charge-offs:
Charge-offs	(30,968		)	(128,424		)	(91,250		)
Recoveries	6,873			6,735			2,721
Net charge-offs	(24,095		)	(121,689		)	(88,529		)
Provision for losses charged to discontinued operations	—			—
Balance, end of period	$	29,314		$	39,360		$	93,687
Annualized net charge-offs during the period to average loans held for investment	1.94		%	10.75		%	5.92		%
Annualized net charge-offs during the period to ALL	82.20		%	309.17		%	94.49		%
Allowance for loan losses to loans held for investment (1)	2.49		%	3.23		%	7.18		%
(1) Excludes discontinued operations

Allowance for Loan Losses by Portfolio Segment

The following table presents ALL activity by portfolio segment for the year ended December 31, 2012:

							Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural			Real Estate - Construction			1-4 Family Residential			Commercial			Consumer			Total
ALL:
Beginning balance at January 1, 2012	$	5,776		$	11,995		$	8,885		$	11,063		$	1,641		$	39,360
Charge-offs	(3,494		)	(11,084		)	(6,422		)	(5,510		)	(4,458		)	(30,968		)
Recoveries	991			3,237			573			852			1,220			6,873
Provision	(35		)	839			5,665			3,222			4,358			14,049
Ending balance at December 31, 2012	$	3,238		$	4,987		$	8,701		$	9,627		$	2,761		$	29,314

The following table presents ALL activity by portfolio segment for the year ended December 31, 2011:

							Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural			Real Estate - Construction			1-4 Family Residential			Commercial			Consumer			Total
ALL:
Beginning balance at January 1, 2011	$	11,144		$	46,792		$	7,742		$	26,851		$	1,158		$	93,687
Charge-offs	(10,832		)	(65,526		)	(11,384		)	(36,998		)	(3,684		)	(128,424		)
Recoveries	855			2,637			831			891			1,521			6,735
Provision	4,609			28,092			11,696			20,319			2,646			67,362
Ending Balance at December 31, 2011	$	5,776		$	11,995		$	8,885		$	11,063		$	1,641		$	39,360

Allowance for Loan Losses, Impairment Methodology

The following table details the recorded investment in loans related to each segment in the allowance for loan losses by portfolio segment and disaggregated on the basis of impairment methodology at December 31, 2012:

					Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural		Real Estate - Construction		1-4 Family Residential		Commercial		Consumer		Total
ALL:
Individually evaluated for impairment	$	282	$	82	$	607	$	766	$	—	$	1,737
Collectively evaluated for impairment	2,432		4,705		7,383		5,473		2,211		22,204
PI loans evaluated for credit impairment	524		200		711		3,388		550		5,373
PI loans with no credit deterioration	—		—		—		—		—		—
Total ALL evaluated for impairment	$	3,238	$	4,987	$	8,701	$	9,627	$	2,761	$	29,314
Loans held for investment
Individually evaluated for impairment	$	2,334	$	13,533	$	18,118	$	43,609	$	—	$	77,594
Collectively evaluated for impairment	62,704		42,199		496,205		227,760		42,181		871,049
PI loans with subsequent credit deterioration	11,533		2,285		34,961		141,974		1,362		192,115
PI loans with no credit deterioration	3,133		397		4,254		28,493		—		36,277
Total loans evaluated for impairment	$	79,704	$	58,414	$	553,538	$	441,836	$	43,543	$	1,177,035

The following table details the recorded investment in loans related to each segment in the allowance for loan losses by portfolio segment and disaggregated on the basis of impairment methodology at December 31, 2011:

					Real Estate - Mortgage
(dollars in thousands)	Commercial and Agricultural		Real Estate - Construction		1-4 Family Residential		Commercial		Consumer		Total
ALL:
Individually evaluated for impairment	$	1,506	$	4,899	$	2,140	$	2,415	$	130	$	11,090
Collectively evaluated for impairment	4,270		7,096		6,745		8,648		1,511		28,270
PI loans evaluated for credit impairment	—		—		—		—		—		—
PI loans with no credit deterioration	—		—		—		—		—		—
Total ALL evaluated for impairment	$	5,776	$	11,995	$	8,885	$	11,063	$	1,641	$	39,360
Loans held for investment
Individually evaluated for impairment	$	3,890	$	30,460	$	24,886	$	36,835	$	170	$	96,241
Collectively evaluated for impairment	62,327		54,705		375,945		254,927		42,554		790,458
PI loans with subsequent credit deterioration	—		—		—		—		—		—
PI loans with no credit deterioration	28,872		7,641		52,894		239,621		1,808		330,836
Total loans evaluated for impairment	$	95,089	$	92,806	$	453,725	$	531,383	$	44,532	$	1,217,535

Troubled Debt Restructurings on Loans

The following table presents a breakdown of troubled debt restructurings that were restructured during the periods presented, segregated by portfolio segment:

	For Twelve Months Ended December 31, 2012					For Twelve Months Ended December 31, 2011
		Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
		Outstanding		Outstanding				Outstanding		Outstanding
(dollars in thousands)	Number	Recorded		Recorded		Number		Recorded		Recorded
	of Loans	Investment		Investment		of Loans		Investment		Investment
Commercial and agricultural	1	$	312	$	127	$	8	$	806	$	806
Real estate - construction	8	1,994		1,335		8		5,162		5,162
Real estate - mortgage:
1-4 family residential	3	566		565		9		406		406
Commercial	5	690		667		15		9,740		9,740
Consumer	—	—		—		—		—		—
Total	17	$	3,562	$	2,694	$	40	$	16,114	$	16,114