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Loans
12 Months Ended
Dec. 31, 2011
Receivables [Abstract]  
Loans
LOANS
    
The following table presents loans by class as of the dates indicated:
December 31,
2011
 
2010
Real estate loans:
 
 
 
Commercial
$
1,553,155

 
$
1,565,665

Construction:
 
 
 
Land acquisition & development
278,613

 
329,720

Residential
61,106

 
99,196

Commercial
61,054

 
98,542

Total construction loans
400,773

 
527,458

Residential
571,943

 
549,604

Agricultural
175,302

 
182,794

Total real estate loans
2,701,173

 
2,825,521

Consumer:
 
 
 
Indirect consumer
407,651

 
423,552

Other consumer
147,487

 
162,137

Credit card
60,933

 
60,891

Total consumer loans
616,071

 
646,580

Commercial
693,261

 
730,471

Agricultural
119,710

 
116,546

Other, including overdrafts
2,813

 
2,383

Loans held for investment
4,133,028

 
4,321,501

Mortgage loans held for sale
53,521

 
46,408

Total loans
$
4,186,549

 
$
4,367,909

    
The Company has lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and internally risk-classified loans.
    
Real estate loans include construction and permanent financing for both single-family and multi-unit properties, term loans for commercial, agricultural and industrial property and/or buildings and home equity loans and lines of credit secured by real estate. Longer-term residential real estate loans are generally sold in the secondary market. Those residential real estate loans not sold are typically secured by first liens on the financed property and generally mature in less than fifteen years. Home equity loans and lines of credit are typically secured by first or second liens on residential real estate and generally do not exceed a loan to value ratio of 80%. The Company had home equity loans and lines of credit of $312,295 and $348,272 as of December 31, 2011 and 2010, respectively. Commercial and agricultural real estate loans are generally secured by first liens on income-producing real estate and generally mature in less than five years.
    
Construction loans are primarily to commercial builders for residential lot development and the construction of single-family residences and commercial real estate properties. Construction loans are generally underwritten pursuant to pre-approved permanent financing. During the construction phase the borrower pays interest only.
    
Consumer loans include direct personal loans, credit card loans and lines of credit; and indirect dealer loans for the purchase of automobiles, recreational vehicles, boats and other consumer goods. Personal loans and indirect dealer loans are generally secured by automobiles, boats and other types of personal property and are made on an installment basis. Credit cards are offered to individuals in our market areas. Lines of credit are generally floating rate loans that are unsecured or secured by personal property.

Commercial loans include a mix of variable and fixed rate loans made to small and medium-sized manufacturing, wholesale, retail and service businesses for working capital needs and business expansions. Commercial loans generally include lines of credit, business credit cards and loans with maturities of five years or less. The loans are generally made with business operations as the primary source of repayment, but also include collateralization by inventory, accounts receivable, equipment and/or personal guarantees.
    
Agricultural loans generally consist of short and medium-term loans and lines of credit that are primarily used for crops, livestock, equipment and general operations. Agricultural loans are ordinarily secured by assets such as livestock or equipment and are repaid from the operations of the farm or ranch. Agricultural loans generally have maturities of five years or less, with operating lines for one production season.
    
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the period indicated:
 
 
 
 
Total Loans
 
 
 
 
30 - 59
60 - 89
> 90
30 or More
 
 
 
 
Days
Days
Days
Days
Current
Non-accrual
Total
As of December 31, 2011
Past Due
Past Due
Past Due
Past Due
Loans
Loans
Loans
Real estate
 
 
 
 
 
 
 
Commercial
$
22,124

$
7,871

$
630

$
30,625

$
1,455,139

$
67,391

$
1,553,155

Construction:
 
 
 
 
 
 

 

Land acquisition & development
5,251

2,448

867

8,566

208,134

61,913

278,613

Residential
415



415

56,219

4,472

61,106

Commercial
1,698



1,698

34,820

24,536

61,054

Total construction loans
7,364

2,448

867

10,679

299,173

90,921

400,773

Residential
4,669

973

1,798

7,440

546,278

18,225

571,943

Agricultural
4,103

1,831


5,934

166,119

3,249

175,302

Total real estate loans
38,260

13,123

3,295

54,678

2,466,709

179,786

2,701,173

Consumer:
 
 
 
 


 
 

Indirect consumer
3,078

370

45

3,493

403,695

463

407,651

Other consumer
1,479

436

60

1,975

144,625

887

147,487

Credit card
604

375

585

1,564

59,343

26

60,933

Total consumer loans
5,161

1,181

690

7,032

607,663

1,376

616,071

Commercial
13,721

3,464

405

17,590

657,609

18,062

693,261

Agricultural
476

215

110

801

118,150

759

119,710

Other, including overdrafts

2


2

2,811


2,813

Loans held for investment
57,618

17,985

4,500

80,103

3,852,942

199,983

4,133,028

Mortgage loans originated for sale




53,521


53,521

Total loans
$
57,618

$
17,985

$
4,500

$
80,103

$
3,906,463

$
199,983

$
4,186,549


 
 
 
 
Total Loans
 
 
 
 
30 - 59
60 - 89
> 90
30 or More
#CIRCULAR!
 
#CIRCULAR!
 
Days
Days
Days
Days
Current
Non-accrual
Total
As of December 31, 2010
Past Due
Past Due
Past Due
Past Due
Loans
Loans
Loans
Real estate
 
 
 
 
 
 
 
Commercial
$
12,934

$
5,025

$

$
17,959

$
1,478,758

$
68,948

$
1,565,665

Construction:
 
 
 
 
 
 

 

Land acquisition & development
5,666

3,942


9,608

278,565

41,547

329,720

Residential
2,783

239


3,022

79,495

16,679

99,196

Commercial
2,794



2,794

79,159

16,589

98,542

Total construction loans
11,243

4,181


15,424

437,219

74,815

527,458

Residential
1,219

973


2,192

532,190

15,222

549,604

Agricultural
3,086

1,770


4,856

175,441

2,497

182,794

Total real estate loans
28,482

11,949


40,431

2,623,608

161,482

2,825,521

Consumer:
 
 
 




 
 

Indirect consumer
3,376

341


3,717

419,271

564

423,552

Other consumer
1,345

207

15

1,567

159,233

1,337

162,137

Credit card
613

392

759

1,764

59,097

30

60,891

Total consumer loans
5,334

940

774

7,048

637,601

1,931

646,580

Commercial
5,220

2,849

957

9,026

690,492

30,953

730,471

Agricultural
697

1,417

117

2,231

113,339

976

116,546

Other, including overdrafts

123

4

127

2,256


2,383

Loans held for investment
39,733

17,278

1,852

58,863

4,067,296

195,342

4,321,501

Mortgage loans originated for sale




46,408


46,408

Total loans
$
39,733

$
17,278

$
1,852

$
58,863

$
4,113,704

$
195,342

$
4,367,909

        
If interest on non-accrual loans had been accrued, such income would have approximated $12,378, $8,912 and $6,448 during the years ended December 31, 2011, 2010 and 2009, respectively.
    
The Company considers impaired loans to include all loans risk rated doubtful, loans placed on non-accrual status and loans renegotiated in troubled debt restructurings with the exception of consumer loans. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:
 
As of December 31, 2011
 
Unpaid
Total
Principal
Balance
Recorded
Investment
With No
Allowance
Recorded
Investment
With
Allowance
Total
Recorded
Investment
Related
Allowance
Real estate:
 
 
 
 
 
Commercial
$
97,745

$
62,769

$
23,218

$
85,987

$
6,741

Construction:
 
 
 
 
 
Land acquisition & development
73,258

22,300

39,131

61,431

12,084

Residential
13,721

10,427

2,044

12,471

312

Commercial
26,647

3,510

21,026

24,536

5,042

Total construction loans
113,626

36,237

62,201

98,438

17,438

Residential
18,305

2,678

15,626

18,304

3,844

Agricultural
8,018

7,470


7,470


Total real estate loans
237,694

109,154

101,045

210,199

28,023

Commercial
26,348

7,354

12,284

19,638

4,664

Agricultural
759

496

263

759

151

Total
$
264,801

$
117,004

$
113,592

$
230,596

$
32,838

 
As of December 31, 2010
 
Unpaid
Total
Principal
Balance
Recorded
Investment
With No
Allowance
Recorded
Investment
With
Allowance
Total
Recorded
Investment
Related
Allowance
Real estate:
 
 
 
 
 
Commercial
$
79,193

$
31,925

$
41,703

$
73,628

$
10,315

Construction:
 
 
 
 
 
Land acquisition & development
48,371

24,120

20,440

44,560

8,064

Residential
18,632

2,993

13,721

16,714

3,431

Commercial
17,458

2,976

13,578

16,554

3,877

Total construction loans
84,461

30,089

47,739

77,828

15,372

Residential
8,951

1,741

7,110

8,851

1,266

Agricultural
3,045

1,065

1,432

2,497

128

Total real estate loans
175,650

64,820

97,984

162,804

27,081

Commercial
36,251

11,354

24,168

35,522

14,892

Agricultural
976

498

478

976

253

Total
$
212,877

$
76,672

$
122,630

$
199,302

$
42,226


The following table presents the average recorded investment in and income recognized on impaired loans for the periods indicated:
 
December 31,
2011
 
 
December 31,
2010
 
 Average
 
 
 
 
 Average
 
 Recorded
 
 Income
 
 
 Recorded
 
 Investment
 
 Recognized
 
 
 Investment
Real estate:
 
 
 
 
 
 
Commercial
$
85,702

 
$
633

 
 
$
49,713

Construction:
 
 
 
 
 
 
Land acquisition & development
57,675

 
96

 
 
34,871

Residential
19,769

 
384

 
 
15,097

Commercial
20,676

 

 
 
21,086

Total construction loans
98,120

 
480

 
 
71,054

Residential
15,768

 
258

 
 
10,889

Agricultural
6,188

 
167

 
 
1,737

Total real estate loans
205,778

 
1,538

 
 
133,393

Commercial
31,490

 
121

 
 
22,017

Agricultural
907

 

 
 
974

Total
$
238,175

 
$
1,659

 
 
$
156,384

    
As of December 31, 2009, the Company’s total recorded investment in impaired loans was $113,975, including $61,529 with no specific allowance for loan loss and $52,446 with an allowance for loan losses of $20,182. For the year ended December 31, 2009, the Company’s average recorded investment in impaired loans was $106,048.
    
The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in a troubled debt restructuring that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principle. Interest income is subsequently recognized only to the extent cash payments are received in excess of principle due. If interest on impaired loans had been accrued, interest income on impaired loans during 2011, 2010 and 2009 would have been approximately $12,231, $8,794 and $6,261, respectively.
    
Collateralized impaired loans are generally recorded at the fair value of the underlying collateral using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized.
    
Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and are typically returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume.
    
The Company had loans renegotiated in troubled debt restructurings of $94,827 as of December 31, 2011, of which $57,451 were included in non-accrual loans and $37,376 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $53,700 as of December 31, 2010, of which $40,210 were included in non-accrual loans and $13,490 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $11,413 as of December 31, 2009, of which $6,730 were included in non-accrual loans and $4,683 were on accrual status.

The following table presents information on the Company's troubled debt restructurings that occurred during 2011:
 
 
Number of Notes
 
Type of Concession
Principle Balance at Restructure Date
 
 
 
Interest only period
Extension of terms or maturity
Interest rate adjustment
Other
Real estate:
 
 
 
 
 
 
 
 
Commercial
 
60

 
$
23,982

$
4,444

$
3,131

$
7,364

$
38,921

Construction:
 
 
 
 
 
 
 
 
Land acquisition & development
 
9

 
995

4,124

680

408

6,207

Residential
 
5

 
7,749

878

234


8,861

Total construction loans
 
14

 
8,744

5,002

914

408

15,068

Residential
 
6

 
9,771

364

223

590

10,948

Agriculture
 
7

 
3,594

517

189

240

4,540

Total real estate loans
 
87

 
46,091

10,327

4,457

8,602

69,477

Consumer:
 
 
 
 
 
 
 
 
Indirect consumer
 
2

 
 
 
 
29

29

Other consumer
 
3

 
17

11

 
50

78

Total consumer loans
 
5

 
17

11


79

107

Commercial
 
40

 
11,727

428

662

2,555

15,372

Agriculture
 
5

 
 
24

 
163

187

Total
 
137

 
$
57,835

$
10,790

$
5,119

$
11,399

$
85,143


For troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification, a specific reserve may already be recorded. In periods subsequent to modification, the Company continues to evaluate all troubled debt restructurings for possible impairment and recognizes impairment through the allowance. Additionally these loans continue to work their way through the credit cycle through charge-off, pay-off or foreclosure. Financial effects of modifications of troubled debt restructurings may include principle loan forgiveness or other charge-offs directly related to the restructuring. Due to the types of the modifications made during 2011, which largely consisted of interest only period modifications, the Company had no charge-offs directly related to modifying troubled debt restructurings during 2011.

The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during 2011. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification. Eighteen of the twenty troubled debt restructurings with payment defaults in the following table are on non-accrual status.
 
As of December 31, 2011
 
Number of Notes
 
Balance
Real estate:
 
 
 
Commercial
9

 
$
2,747

Construction:
 
 
 
Land acquisition & development
1

 
1,135

Residential
1

 
170

Total construction loans
2

 
1,305

Agriculture
1

 
33

Total real estate loans
12

 
4,085

Commercial
6

 
213

Agricultural
2

 
24

Total
20

 
$
4,322


At December 31, 2011, there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual.

As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators:

Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements.

Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a Substandard is not currently sufficient; collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a Substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit.

Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure.

The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:
 
Other Assets
Especially
Mentioned
Substandard
Doubtful
Total
Criticized
Loans
As of December 31, 2011
 
 
 
 
Real estate:
 
 
 
 
Commercial
$
129,046

$
153,320

$
25,087

$
307,453

Construction:
 
 
 
 
Land acquisition & development
37,294

31,873

38,761

107,928

Residential
9,448

5,528

2,044

17,020

Commercial

2,620

21,916

24,536

Total construction loans
46,742

40,021

62,721

149,484

Residential
8,149

15,706

15,140

38,995

Agricultural
16,037

18,498

395

34,930

Total real estate loans
199,974

227,545

103,343

530,862

Consumer:
 
 
 
 
Indirect consumer
1,141

1,729

247

3,117

Other consumer
745

1,361

674

2,780

Credit card

486

2,789

3,275

Total consumer loans
1,886

3,576

3,710

9,172

Commercial
34,698

33,478

12,849

81,025

Agricultural
4,345

5,195

263

9,803

Total
$
240,903

$
269,794

$
120,165

$
630,862


 
Other Assets
Especially
Mentioned
Substandard
Doubtful
Total
Criticized
Loans
As of December 31, 2010
 
 
 
 
Real estate:
 
 
 
 
Commercial
$
133,700

$
149,604

$
41,662

$
324,966

Construction:
 
 
 
 
Land acquisition & development
73,151

36,552

21,795

131,498

Residential
9,083

9,842

13,721

32,646

Commercial
9,025

18,611

13,598

41,234

Total construction loans
91,259

65,005

49,114

205,378

Residential
13,889

18,725

11,474

44,088

Agricultural
12,683

20,885

1,432

35,000

Total real estate loans
251,531

254,219

103,682

609,432

Consumer:
 
 
 
 
Indirect consumer
768

1,964

315

3,047

Other consumer
903

1,499

1,131

3,533

Credit card

571

3,467

4,038

Total consumer loans
1,671

4,034

4,913

10,618

Commercial
47,307

39,145

24,280

110,732

Agricultural
5,416

6,255

478

12,149

Total
$
305,925

$
303,653

$
133,353

$
742,931

The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans.