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LOANS (Tables)
 12 Months Ended
Dec. 31, 2012
LOANS [Abstract]  
Summary of Portfolio Loans
Portfolio loans consisted of the following at December 31 (in $1,000s):

 
 
2012
  
2011
 
 
 
  
 
Loans secured by real estate:
 
  
 
Commercial
 
$
756,970
  
$
893,644
 
Residential (including multi-family)
  
253,693
   
325,730
 
Construction, land development and other
land
  
 
56,425
   
 
102,414
 
Total loans secured by real estate
  
1,067,088
   
1,321,788
 
Commercial and other business-purpose loans
  
128,096
   
178,417
 
Consumer
  
9,324
   
12,216
 
Other
  
2,159
   
2,779
 
Total portfolio loans
  
1,206,667
   
1,515,200
 
Less allowance for loan losses
  
(63,455
)
  
(85,788
)
 
        
Net portfolio loans
 
$
1,143,212
  
$
1,429,412
 
Schedule of Allowance for Loan Losses and the Carrying Amount of Loans
The following tables present the allowance for loan losses and the carrying amount of loans based on management's overall assessment of probable incurred losses, and should not be interpreted as an indication of future charge-offs:

 
 
December 31, 2012
 
 
 
Secured by Real Estate
  
  
  
  
  
 
 
 
 
 
 
 
Commercial
  
 
Residential
(including
multi-
family)
  
Construction,
Land
Development
and Other
Land
  
Commercial
and Other
Business-
Purpose
Loans
  
 
 
 
 
Consumer
  
 
 
 
 
Other
  
 
 
 
 
Unallocated
  
 
 
 
 
Total
 
 
 
  
  
  
  
  
  
  
 
Allowance for loan
losses:
 
  
  
  
  
  
  
  
 
Individually
evaluated for
impairment
 
$
8,246
  
$
2,803
  
$
1,058
  
$
1,405
  
$
57
  
  
  
$
13,569
 
Collectively
evaluated
for probable
incurred
losses
  
13,380
   
8,596
   
1,810
   
4,102
   
1,098
  
$
5
  
$
20,895
   
49,886
 
 
                                
Total
allowance
for loan
losses
 
$
21,626
  
$
11,399
  
$
2,868
  
$
5,507
  
$
1,155
  
$
5
  
$
20,895
  
$
63,455
 
 
                                
Portfolio loans:
                                
Individually
evaluated for
impairment
 
$
121,745
  
$
38,722
  
$
14,037
  
$
14,028
  
$
94
          
$
188,626
 
Collectively
evaluated
for probable
incurred losses
  
635,225
   
214,971
   
42,388
   
114,068
   
9,230
  
$
2,159
       
1,018,041
 
 
                                
Total
portfolio
loans
 
$
756,970
  
$
253,693
  
$
56,425
  
$
128,096
  
$
9,324
  
$
2,159
      
$
1,206,667
 




[The remainder of this page intentionally left blank]
 
 
 
 

 
 
 
December 31, 2011
 
 
 
Secured by Real Estate
  
  
  
  
  
 
 
 
 
 
 
 
Commercial
  
 
Residential
(including
multi-
family)
  
Construction,
Land
Development
and Other
Land
  
Commercial
and Other
Business-
Purpose
Loans
  
 
 
 
 
Consumer
  
 
 
 
 
Other
  
 
 
 
 
Unallocated
  
 
 
 
 
Total
 
 
 
  
  
  
  
  
  
  
 
Allowance for loan
losses:
 
  
  
  
  
  
  
  
 
Individually
evaluated for
impairment
 
$
10,636
  
$
3,730
  
$
3,115
  
$
3,732
  
$
29
  
  
  
$
21,242
 
Collectively
evaluated
for probable
incurred
losses
  
26,371
   
15,598
   
7,257
   
10,196
   
660
  
$
17
  
$
4,447
   
64,546
 
 
                                
Total
allowance
for loan
losses
 
$
37,007
  
$
19,328
  
$
10,372
  
$
13,928
  
$
689
  
$
17
  
$
4,447
  
$
85,788
 
 
                                
Portfolio loans:
                                
Individually
evaluated for
impairment
 
$
167,792
  
$
54,296
  
$
35,921
  
$
23,583
  
$
63
          
$
281,655
 
Collectively
evaluated
for probable
incurred losses
  
725,852
   
271,434
   
66,493
   
154,834
   
12,153
  
$
2,779
       
1,233,545
 
 
                                
Total
portfolio
loans
 
$
893,644
  
$
325,730
  
$
102,414
  
$
178,417
  
$
12,216
  
$
2,779
      
$
1,515,200
 
Schedule of Summarize Activity in the Allowance for Loan Losses
Activity within the allowance for loan losses is summarized below (in $1,000s):

 
 
2012
  
2011
  
2010
 
 
 
  
  
 
Balance at beginning of year
 
$
85,788
  
$
124,955
  
$
111,026
 
Allowance for loan losses of acquired
bank affiliate
      
 
2,380
     
Provision for loan losses charged to operations
  
1,452
   
35,630
   
142,237
 
Net charge-offs:
            
Loans charged-off (deduction)
  
(46,095
)
  
(92,445
)
  
(142,885
)
Recoveries
  
22,310
   
15,268
   
14,577
 
Net charge-offs
  
(23,785
)
  
(77,177
)
  
(128,308
)
 
            
Balance at end of year
 
$
63,455
  
$
85,788
  
$
124,955
 


 
 
Year Ended December 31, 2012
 
 
 
Secured by Real Estate
  
  
  
  
  
 
 
 
 
 
 
 
Commercial
  
 
Residential
(including
multi-
family)
  
Construction,
Land
Development
and Other
Land
  
Commercial
and Other
Business-
Purpose
Loans
  
 
 
 
 
Consumer
  
 
 
 
 
Other
  
 
 
 
 
Unallocated
  
 
 
 
 
Total
 
 
 
  
  
  
  
  
  
  
 
Beginning balance
 
$
37,007
  
$
19,328
  
$
10,372
  
$
13,928
  
$
689
  
$
17
  
$
4,447
  
$
85,788
 
 
                                
Charge-offs
  
(19,298
)
  
(11,536
)
  
(5,705
)
  
(7,911
)
  
(989
)
  
(656
)
      
(46,095
)
Recoveries
  
6,947
   
5,334
   
3,166
   
6,316
   
448
   
99
       
22,310
 
Net charge-offs
  
(12,351
)
  
(6,202
)
  
(2,539
)
  
(1,595
)
  
(541
)
  
(557
)
      
(23,785
)
 
                                
Provision for loan losses
  
7,327
   
1,704
   
(4,196
)
  
(5,085
)
  
1,135
   
567
       
1,452
 
 
                                
Additional unallocated
allowance
  
(10,357
)
  
(3,431
)
  
(769
)
  
(1,741
)
  
(128
)
  
(22
)
  
16,448
     
 
                                
Ending balance
 
$
21,626
  
$
11,399
  
$
2,868
  
$
5,507
  
$
1,155
  
$
5
  
$
20,895
  
$
63,455
 


 
 
Year Ended December 31, 2011
 
 
 
Secured by Real Estate
  
  
  
 
 
 
 
 
 
 
 
 
 
Commercial
  
 
Residential
(including
multi-
family)
  
Construction,
Land
Development
and Other
Land
  
Commercial
and Other
Business-
Purpose
Loans
  
 
 
 
 
Consumer
  
 
 
 
 
Other
 
 
 
 
Unallocated
 
 
 
 
 
Total
 
 
 
  
  
  
  
  
 
 
 
 
Beginning balance
 
$
48,272
  
$
34,602
  
$
17,352
  
$
23,965
  
$
679
  
$
85
 
 
 
$
124,955
 
 
                        
 
    
Acquired loan loss
reserve
  
1,043
   
117
   
651
   
500
   
68
   
1
 
 
  
2,380
 
 
                        
 
    
Charge-offs
  
(33,609
)
  
(19,709
)
  
(20,753
)
  
(17,339
)
  
(1,033
)
  
(2
)
 
  
(92,445
)
Recoveries
  
4,709
   
2,881
   
3,768
   
3,667
   
237
   
6
 
 
  
15,268
 
Net charge-offs
  
(28,900
)
  
(16,828
)
  
(16,985
)
  
(13,672
)
  
(796
)
  
4
 
 
  
(77,177
)
 
                        
 
    
Provision for loan losses
  
19,195
   
2,404
   
9,671
   
3,650
   
775
   
(65
)
 
  
35,630
 
 
                        
 
    
Additional unallocated
allowance
  
(2,603
)
  
(967
)
  
(317
)
  
(515
)
  
(37
)
  
(8
)
$
4,447    
 
                        
 
    
Ending balance
 
$
37,007
  
$
19,328
  
$
10,372
  
$
13,928
  
$
689
  
$
17
 
$
4,447 
$
85,788
 
Schedule of Nonperforming Loans and Other Nonperforming Assets
Nonperforming loans (i.e., loans which are 90 days or more past due and loans on nonaccrual status) at December 31 are summarized as follows (in $1,000s):

 
 
2012
  
2011
 
Nonaccrual loans:
 
  
 
Loans secured by real estate:
 
  
 
Commercial
 
$
80,449
  
$
121,250
 
Residential (including multi-family)
  
29,719
   
45,357
 
Construction, land development and other land
  
8,440
   
29,088
 
Total loans secured by real estate
  
118,608
   
195,695
 
Commercial and other business-purpose loans
  
11,678
   
17,818
 
Consumer
  
292
   
124
 
Total nonaccrual loans
  
130,578
   
213,637
 
 
        
Past due (>90 days) loans and accruing interest:
        
Loans secured by real estate:
        
Commercial
  
660
   
3,778
 
Residential (including multi-family)
  
85
   
259
 
Total loans secured by real estate
  
745
   
4,037
 
Commercial and other business-purpose loans
  
70
   
148
 
Consumer
      
38
 
Total past due loans
  
815
   
4,223
 
 
        
Total nonperforming loans
 
$
131,393
  
$
217,860
 
Schedule of Impaired Loans
Impaired loans are summarized in the following tables (in $1,000s), based on loans which either have an allowance for loan losses recorded or no such allowance as of December 31, 2012 and 2011:

 
 
December 31, 2012
 
 
 
 
 
Carrying
Value
  
 
Unpaid
Principal
Balance
  
Related
Allowance
for Loan
Losses
 
 
 
  
  
 
With an allowance recorded:
 
  
  
 
Loans secured by real estate:
 
  
  
 
Commercial
 
$
76,961
  
$
90,983
  
$
9,638
 
Residential (including multi-family)
  
20,672
   
34,886
   
3,564
 
Construction, land development and other land
  
7,406
   
13,213
   
1,153
 
Total loans secured by real estate
  
105,039
   
139,082
   
14,355
 
Commercial and other business-purpose loans
  
11,598
   
20,550
   
2,001
 
Consumer
  
373
   
1,517
   
139
 
 
  
117,010
   
161,149
   
16,495
 
With no related allowance recorded:
            
Loans secured by real estate:
            
Commercial
  
73,656
   
107,802
     
Residential (including multi-family)
  
26,100
   
33,126
     
Construction, land development and other land
  
9,625
   
13,922
     
Total loans secured by real estate
  
109,381
   
154,850
     
Commercial and other business-purpose loans
  
7,574
   
11,379
     
Consumer
  
22
   
22
     
 
  
116,977
   
166,251
     
 
            
Total
 
$
233,987
  
$
327,400
  
$
16,495
 





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December 31, 2011
 
 
 
 
 
Carrying
Value
  
 
Unpaid
Principal
Balance
  
Related
Allowance
for Loan
Losses
 
 
 
  
  
 
With an allowance recorded:
 
  
  
 
Loans secured by real estate:
 
  
  
 
Commercial
 
$
68,486
  
$
79,753
  
$
11,053
 
Residential (including multi-family)
  
30,140
   
34,714
   
5,132
 
Construction, land development and other land
  
15,066
   
21,014
   
3,445
 
Total loans secured by real estate
  
113,692
   
135,481
   
19,630
 
Commercial and other business-purpose loans
  
16,037
   
17,294
   
4,696
 
Consumer
  
166
   
173
   
95
 
 
  
129,895
   
152,948
   
24,421
 
With no related allowance recorded:
            
Loans secured by real estate:
            
Commercial
  
105,548
   
145,956
     
Residential (including multi-family)
  
33,928
   
45,902
     
Construction, land development and other land
  
23,938
   
39,197
     
Total loans secured by real estate
  
163,414
   
231,055
     
Commercial and other business-purpose loans
  
11,658
   
16,976
     
Consumer
  
12
   
48
     
 
  
175,084
   
248,079
     
 
            
Total
 
$
304,979
  
$
401,027
  
$
24,421
 
For the years ended December 31, 2012 and 2011, the average recorded investment in impaired loans and interest income recorded on impaired loans were as follows (in $1,000s):

 
 
Year Ended
December 31, 2012
  
Year Ended
December 31, 2011
 
 
 
Average
  
Interest
  
Average
  
Interest
 
 
 
Recorded
  
Income
  
Recorded
  
Income
 
 
 
Investment
  
Recorded
  
Investment
  
Recorded
 
 
 
  
  
  
 
Commercial
 
$
165,568
  
$
8,092
  
$
177,496
  
$
7,351
 
Residential (including multi-family)
  
57,806
   
2,280
   
61,495
   
3,081
 
Construction, land development and other land
  
30,414
   
829
   
45,514
   
1,205
 
Total loans secured by real estate
  
253,788
   
11,201
   
284,505
   
11,637
 
Commercial and other business-purpose loans
  
24,120
   
1,208
   
29,568
   
1,324
 
Consumer
  
283
   
32
   
268
   
21
 
 
                
Total
 
$
278,191
  
$
12,441
  
$
314,341
  
$
12,982
 
Schedule of Summarize the Aging and Amounts of Past Due Loans
The following tables summarize the aging and amounts of past due loans as of December 31, 2012 and 2011 (in $1,000s):

 
 
December 31, 2012
 
 
 
Past Due Loans
  
Total
  
  
 
 
 
(based on payment due dates)
  
Amount of
  
  
 
 
 
  
  
Loans on
  
Loans More
  
Loans Either
  
 
 
 
More Than
  
  
Nonaccrual
  
Than 29 Days
  
Current or
  
 
 
 
29 Days,
  
More Than
  
Status
  
Past Due or on
  
Less Than
  
Total
 
 
 
and Less Than
  
89 Days
  
(Generally, 90
  
Nonaccrual
  
30 Days
  
Portfolio
 
 
 
90 Days
  
(Accruing)
  
Days or More)
  
Status
  
Past Due
  
Loans
 
 
 
  
  
  
  
  
 
Loans secured by real estate:
 
  
  
  
  
  
 
Commercial
 
$
17,580
  
$
660
  
$
80,449
  
$
98,689
  
$
658,281
  
$
756,970
 
Residential (including multi-
family)
  
6,750
   
85
   
29,719
   
36,554
   
217,139
   
253,693
 
Construction, land development
and other land
  
4,242
       
8,440
   
12,682
   
43,743
   
56,425
 
Total loans secured by real
estate
  
 
28,572
   
 
745
   
 
118,608
   
 
147,925
   
 
919,163
   
 
1,067,088
 
Commercial and other business-
purpose loans
  
3,269
       
11,678
   
14,947
   
113,149
   
128,096
 
Consumer
  
362
   
70
   
292
   
724
   
8,600
   
9,324
 
Other
                  
2,159
   
2,159
 
 
                        
Total
 
$
32,203
  
$
815
  
$
130,578
  
$
163,596
  
$
1,043,071
  
$
1,206,667
 


 
 
December 31, 2011
 
 
 
Past Due Loans
  
Total
  
  
 
 
 
(based on payment due dates)
  
Amount of
  
  
 
 
 
  
  
Loans on
  
Loans More
  
Loans Either
  
 
 
 
More Than
  
  
Nonaccrual
  
Than 29 Days
  
Current or
  
 
 
 
29 Days,
  
More Than
  
Status
  
Past Due or on
  
Less Than
  
Total
 
 
 
and Less Than
  
89 Days
  
(Generally, 90
  
Nonaccrual
  
30 Days
  
Portfolio
 
 
 
90 Days
  
(Accruing)
  
Days or More)
  
Status
  
Past Due
  
Loans
 
 
 
  
  
  
  
  
 
Loans secured by real estate:
 
  
  
  
  
  
 
Commercial
 
$
16,770
  
$
3,778
  
$
121,250
  
$
141,798
  
$
751,846
  
$
893,644
 
Residential (including multi-
family)
  
4,814
   
259
   
45,357
   
50,430
   
275,300
   
325,730
 
Construction, land development
and other land
  
3,691
       
29,088
   
32,779
   
69,635
   
102,414
 
Total loans secured by real
estate
  
 
25,275
   
 
4,037
   
 
195,695
   
 
225,007
   
 
1,096,781
   
 
1,321,788
 
Commercial and other business-
purpose loans
  
3,930
   
148
   
17,818
   
21,896
   
156,521
   
178,417
 
Consumer
  
476
   
38
   
124
   
638
   
11,578
   
12,216
 
Other
                  
2,779
   
2,779
 
 
                        
Total
 
$
29,681
  
$
4,223
  
$
213,637
  
$
247,541
  
$
1,267,659
  
$
1,515,200
 
Schedule of Recent Analysis, the Risk Categories of Loans
Based on management's most recent analysis, the risk categories of loans are summarized as follows (in $1,000s):

 
 
December 31, 2012
 
 
 
Pass
  
  
Total
Portfolio
Loans
 
 
 
 
Watch
  
 
Substandard
 
 
 
  
  
  
 
Loans secured by real estate:
 
  
  
  
 
Commercial
 
$
527,953
  
$
80,673
  
$
148,344
  
$
756,970
 
Residential (including multi-family
  
181,472
   
21,745
   
50,476
   
253,693
 
Construction, land development
and other land
  
32,080
   
9,392
   
14,953
   
56,425
 
Total loans secured by real estate
  
741,505
   
111,810
   
213,773
   
1,067,088
 
Commercial and other business-
purpose loans
  
100,669
   
7,325
   
20,102
   
128,096
 
Consumer
  
6,916
   
1,795
   
613
   
9,324
 
Other
  
2,159
           
2,159
 
 
                
Total
 
$
851,249
  
$
120,930
  
$
234,488
  
$
1,206,667
 
 
 

 
 
 
 
December 31, 2011
 
 
 
Pass
  
  
Total
Portfolio
Loans
 
 
 
 
Watch
  
 
Substandard
 
 
 
  
  
  
 
Loans secured by real estate:
 
  
  
  
 
Commercial
 
$
594,964
  
$
88,667
  
$
210,013
  
$
893,644
 
Residential (including multi-family
  
220,375
   
31,278
   
74,077
   
325,730
 
Construction, land development
and other land
  
50,392
   
11,920
   
40,102
   
102,414
 
Total loans secured by real estate
  
865,731
   
131,865
   
324,192
   
1,321,788
 
Commercial and other business-
purpose loans
  
132,085
   
14,412
   
31,920
   
178,417
 
Consumer
  
11,125
   
574
   
517
   
12,216
 
Other
  
2,485
   
294
       
2,779
 
 
                
Total
 
$
1,011,426
  
$
147,145
  
$
356,629
  
$
1,515,200
 
Summary of Loans Modified as Troubled Debt Restructurings
The following table summarizes loans modified as troubled debt restructurings during the years ended December 31, 2012 and 2011 (in $1,000s):

 
 
December 31, 2012
 
 
 
 
 
Number of
Contracts
  
Pre-restructuring
Outstanding
Recorded
Investment
  
Post-restructuring
Outstanding
Recorded
Investment
  
 
 
Loan Loss
Reserve
 
Troubled debt restructurings:
 
  
  
  
 
Loans secured by real estate:
 
  
  
  
 
Commercial
  
139
  
$
53,250
  
$
45,415
  
$
3,044
 
Residential
  
100
   
12,628
   
8,826
   
619
 
Construction, land development
and other land
  
15
   
1,755
   
1,147
   
67
 
Total loans secured by
real estate
  
254
   
67,633
   
55,388
   
3,730
 
Commercial and other business-
purpose loans
  
38
   
4,279
   
3,165
   
217
 
Consumer
  
2
   
39
   
37
   
4
 
 
                
Total
  
294
  
$
71,951
  
$
58,590
  
$
3,951
 


 
 
December 31, 2011
 
 
 
 
 
Number of
Contracts
  
Pre-restructuring
Outstanding
Recorded
Investment
  
Post-restructuring
Outstanding
Recorded
Investment
  
 
 
Loan Loss
Reserve
 
Troubled debt restructurings:
 
  
  
  
 
Loans secured by real estate:
 
  
  
  
 
Commercial
  
195
  
$
98,654
  
$
72,363
  
$
4,174
 
Residential
  
191
   
35,690
   
30,849
   
2,213
 
Construction, land development
and other land
  
43
   
12,761
   
9,556
   
733
 
Total loans secured by
real estate
  
429
   
147,105
   
112,768
   
7,120
 
Commercial and other business-
purpose loans
  
116
   
16,948
   
12,479
   
2,407
 
Consumer
  
6
   
325
   
54
   
11
 
 
                
Total
  
551
  
$
164,378
  
$
125,301
  
$
9,538
 
A payment default is determined when a loan is 90 days or more past due.  The following table summarizes loans modified as troubled debt restructurings in the last twelve months for which there was a payment default during the years ended December 31, 2012 and 2011 (in $1,000s):

 
 
December 31, 2012
  
December 31, 2011
 
 
 
Number of
Contracts
  
Recorded
Investment
  
Number of
Contracts
  
Recorded
Investment
 
Troubled debt restructurings that
subsequently defaulted:
 
  
  
  
 
Loans secured by real estate:
 
  
  
  
 
Commercial
  
54
  
$
13,049
   
59
  
$
25,783
 
Residential
  
31
   
2,580
   
55
   
7,893
 
Construction, land development
and other land
  
12
   
1,242
   
21
   
5,355
 
Total loans secured by
real estate
  
97
   
16,871
   
135
   
39,031
 
Commercial and other business-
purpose loans
  
20
   
2,152
   
18
   
3,558
 
 
                
Total
  
117
  
$
19,023
   
153
  
$
42,589
 
Schedule of Troubled Debt Restructurings by Loan Type and Accrual Status
The total amount of troubled debt restructurings as of December 31, 2012 and 2011 is detailed in the following tables by loan type and accrual status (in $1,000s):

 
 
Troubled Debt Restructurings
at December 31, 2012
 
 
 
On
Non-Accrual
Status
  
 
On Accrual
Status
  
 
 
Total
 
 
 
  
  
 
Loans secured by real estate:
 
  
  
 
Commercial
 
$
53,486
  
$
70,168
  
$
123,654
 
Residential (including multi-family)
  
18,203
   
17,053
   
35,256
 
Construction, land development and
other land
  
3,995
   
8,591
   
12,586
 
Total loans secured by real estate
  
75,684
   
95,812
   
171,496
 
Commercial and other business-purpose
loans
  
5,885
   
7,493
   
13,378
 
Consumer
      
104
   
104
 
 
            
Total
 
$
81,569
  
$
103,409
  
$
184,978
 
 

 
 
 
 
Troubled Debt Restructurings
at December 31, 2011
 
 
 
On
Non-Accrual
Status
  
 
On Accrual
Status
  
 
 
Total
 
 
 
  
  
 
Loans secured by real estate:
 
  
  
 
Commercial
 
$
65,589
  
$
52,784
  
$
118,373
 
Residential (including multi-family)
  
25,358
   
18,711
   
44,069
 
Construction, land development and
other land
  
13,714
   
9,918
   
23,632
 
Total loans secured by real estate
  
104,661
   
81,413
   
186,074
 
Commercial and other business-purpose
loans
  
8,336
   
9,876
   
18,212
 
Consumer
      
54
   
54
 
 
            
Total
 
$
112,997
  
$
91,343
  
$
204,340