| ALLOWANCE FOR LOAN LOSSES |
Note 4
ALLOWANCE FOR LOAN LOSSES
An analysis of the changes in the allowance for loan losses for
December 31 was as follows:
| (Dollars in Thousands) |
2011 |
|
|
2010 |
|
|
2009 |
|
| Balance, Beginning of Year |
$ |
35,436 |
|
|
$ |
43,999 |
|
|
$ |
37,004 |
|
| Provision for Loan Losses |
|
18,996 |
|
|
|
23,824 |
|
|
|
40,017 |
|
| Recoveries on Loans Previously Charged-Off |
|
2,794 |
|
|
|
3,127 |
|
|
|
3,442 |
|
| Loans Charged-Off |
|
(26,191 |
) |
|
|
(35,514 |
) |
|
|
(36,072 |
) |
| Reclassification of Unfunded Reserve to Other Liability |
|
- |
|
|
|
- |
|
|
|
(392 |
) |
| Balance, End of Year |
$ |
31,035 |
|
|
$ |
35,436 |
|
|
$ |
43,999 |
|
The following table details the activity in the allowance for loan
losses by portfolio class for the years ended December 31, 2011 and 2010. Allocation of a portion of the allowance to one category
of loans does not preclude its availability to absorb losses in other categories.
|
(Dollars in Thousands)
|
Commercial, Financial, Agricultural |
Real Estate Construction
|
Real Estate Commercial Mortgage |
Real Estate Residential |
Real Estate Home Equity |
Consumer
|
Unallocated
|
Total
|
| 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning Balance |
|
$ |
1,544 |
|
$ |
2,060 |
|
$ |
8,645 |
|
$ |
17,046 |
|
$ |
2,522 |
|
$ |
2,612 |
|
$ |
1,007 |
|
$ |
35,436 |
|
| Provision for Loan Losses |
|
|
1,446 |
|
|
(827 |
) |
|
8,477 |
|
|
6,864 |
|
|
2,383 |
|
|
749 |
|
|
(96 |
) |
|
18,996 |
|
| Charge-Offs |
|
|
1,843 |
|
|
114 |
|
|
6,713 |
|
|
11,870 |
|
|
2,727 |
|
|
2,924 |
|
|
- |
|
|
26,191 |
|
| Recoveries |
|
|
387 |
|
|
14 |
|
|
251 |
|
|
478 |
|
|
214 |
|
|
1,450 |
|
|
- |
|
|
2,794 |
|
| Net Charge-Offs |
|
|
1,456 |
|
|
100 |
|
|
6,462 |
|
|
11,392 |
|
|
2,513 |
|
|
1,474 |
|
|
|
|
|
23,397 |
|
| Ending Balance |
|
$ |
1,534 |
|
$ |
1,133 |
|
$ |
10,660 |
|
$ |
12,518 |
|
$ |
2,392 |
|
$ |
1,887 |
|
$ |
911 |
|
$ |
31,035 |
|
| Period-end amount allocated to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans Individually Evaluated for Impairment |
|
$ |
311
|
|
$
|
68
|
|
$
|
5,828
|
|
$
|
4,702
|
|
$
|
239
|
|
$
|
26
|
|
$
|
-
|
|
$
|
11,174
|
|
| Loans Collectively Evaluated for Impairment |
|
|
1,223
|
|
|
1,065
|
|
|
4,832
|
|
|
7,816
|
|
|
2,153
|
|
|
1,861
|
|
|
911
|
|
|
19,861
|
|
| Ending Balance |
|
$ |
1,534 |
|
$ |
1,133 |
|
$ |
10,660 |
|
$ |
12,518 |
|
$ |
2,392 |
|
$ |
1,887 |
|
$ |
911 |
|
$ |
31,035 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning Balance |
|
$ |
2,409 |
|
$ |
12,117 |
|
$ |
8,751 |
|
$ |
14,159 |
|
$ |
2,201 |
|
$ |
3,457 |
|
$ |
905 |
|
$ |
43,999 |
|
| Provision for Loan Losses |
|
|
883 |
|
|
(4,188 |
) |
|
8,395 |
|
|
14,670 |
|
|
2,853 |
|
|
1,109 |
|
|
102 |
|
|
23,824 |
|
| Charge-Offs |
|
|
2,118 |
|
|
5,877 |
|
|
8,762 |
|
|
12,168 |
|
|
3,087 |
|
|
3,502 |
|
|
- |
|
|
35,514 |
|
| Recoveries |
|
|
370 |
|
|
8 |
|
|
261 |
|
|
385 |
|
|
555 |
|
|
1,548 |
|
|
- |
|
|
3,127 |
|
| Net Charge-Offs |
|
|
1,748 |
|
|
5,869 |
|
|
8,501 |
|
|
11,783 |
|
|
2,532 |
|
|
1,954 |
|
|
- |
|
|
32,387 |
|
| Ending Balance |
|
$ |
1,544 |
|
$ |
2,060 |
|
$ |
8,645 |
|
$ |
17,046 |
|
$ |
2,522 |
|
$ |
2,612 |
|
$ |
1,007 |
|
$ |
35,436 |
|
| Period-end amount allocated to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans Individually Evaluated for Impairment |
|
$ |
252
|
|
$ |
413
|
|
$ |
4,640
|
|
$ |
7,965
|
|
$ |
1,389
|
|
$ |
71
|
|
$ |
-
|
|
$ |
14,730 |
|
| Loans Collectively Evaluated for Impairment |
|
|
1,292
|
|
|
1,647
|
|
|
4,005
|
|
|
9,081
|
|
|
1,133
|
|
|
2,541
|
|
|
1,007
|
|
|
20,706
|
|
| Ending Balance |
|
$ |
1,544 |
|
$ |
2,060 |
|
$ |
8,645 |
|
$ |
17,046 |
|
$ |
2,522 |
|
$ |
2,612 |
|
$ |
1,007 |
|
$ |
35,436 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys recorded investment in loans as of December 31, 2011 and 2010 related to each balance in the allowance for
loan losses by portfolio class and disaggregated on the basis of the Companys impairment methodology was as follows:
|
(Dollars in Thousands)
|
Commercial, Financial, Agricultural |
Real Estate Construction
|
Real Estate Commercial Mortgage |
Real Estate Residential |
Real Estate Home Equity |
Consumer
|
Unallocated
|
Total
|
| 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Individually Evaluated for Impairment |
|
$ |
1,653
|
|
$
|
511
|
|
$
|
65,624
|
|
$
|
36,324
|
|
$
|
3,527
|
|
$
|
143
|
|
$
|
-
|
|
$
|
107,782
|
|
| Collectively Evaluated for Impairment |
|
|
129,226
|
|
|
25,856
|
|
|
573,516
|
|
|
363,047
|
|
|
240,736
|
|
|
188,520
|
|
|
-
|
|
|
1,520,901
|
|
| Total |
|
$ |
130,879 |
|
$ |
26,367 |
|
$ |
639,140 |
|
$ |
399,371 |
|
$ |
244,263 |
|
$ |
188,663 |
|
$ |
- |
|
$ |
1,628,683 |
|
| 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Individually Evaluated for Impairment |
|
$ |
1,685
|
|
$
|
2,533
|
|
$
|
42,369
|
|
$
|
37,779
|
|
$
|
3,278
|
|
$
|
144
|
|
$
|
-
|
|
$
|
87,788
|
|
| Collectively Evaluated for Impairment |
|
|
155,709
|
|
|
40,706
|
|
|
629,333
|
|
|
392,762
|
|
|
248,287
|
|
|
204,086
|
|
|
-
|
|
|
1,670,883
|
|
| Total |
|
$ |
157,394 |
|
$ |
43,239 |
|
$ |
671,702 |
|
$ |
430,541 |
|
$ |
251,565 |
|
$ |
204,230 |
|
$ |
- |
|
$ |
1,758,671 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired Loans. Loans are deemed to be impaired when, based
on current information and events, it is probable that the Company will not be able to collect all amounts due (principal and interest
payments), according to the contractual terms of the loan agreement. Loans, for which the terms have been modified, and for which
the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. Interest
income recognized on impaired loans was approximately $4.3 million, $1.4 million, and $3.4 million for the years ended December
31, 2011, 2010, and 2009.
The following table presents loans individually evaluated for impairment
by class of loans as of December 31:
|
(Dollars in Thousands)
|
Unpaid Principal Balance |
Recorded Investment With No Allowance
|
Recorded Investment With Allowance
|
Related Allowance
|
Average Recorded Investment
|
| 2011: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial, Financial and Agricultural |
|
$ |
1,653 |
|
$ |
671 |
|
$ |
982 |
|
$ |
311 |
|
$ |
1,554 |
| Real Estate - Construction |
|
|
511 |
|
|
- |
|
|
511 |
|
|
68 |
|
|
1,775 |
| Real Estate - Commercial Mortgage |
|
|
65,624 |
|
|
19,987 |
|
|
45,637 |
|
|
5,828 |
|
|
50,706 |
| Real Estate - Residential |
|
|
36,324 |
|
|
6,897 |
|
|
29,427 |
|
|
4,702 |
|
|
30,988 |
| Real Estate - Home Equity |
|
|
3,527 |
|
|
645 |
|
|
2,882 |
|
|
239 |
|
|
2,743 |
| Consumer |
|
|
143 |
|
|
90 |
|
|
53 |
|
|
26 |
|
|
90 |
| Total |
|
$ |
107,782 |
|
$ |
28,290 |
|
$ |
79,492 |
|
$ |
11,174 |
|
$ |
87,856 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2010: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial, Financial and Agricultural |
|
$ |
1,684 |
|
$ |
389 |
|
$ |
1,295 |
|
$ |
252 |
|
$ |
2,768 |
| Real Estate - Construction |
|
|
2,533 |
|
|
- |
|
|
2,533 |
|
|
413 |
|
|
5,801 |
| Real Estate - Commercial Mortgage |
|
|
42,370 |
|
|
9,030 |
|
|
33,340 |
|
|
4,640 |
|
|
48,820 |
| Real Estate - Residential |
|
|
37,780 |
|
|
3,295 |
|
|
34,485 |
|
|
7,965 |
|
|
41,958 |
| Real Estate - Home Equity |
|
|
3,278 |
|
|
375 |
|
|
2,903 |
|
|
1,389 |
|
|
3,087 |
| Consumer |
|
|
143 |
|
|
- |
|
|
143 |
|
|
71 |
|
|
172 |
| Total |
|
$ |
87,788 |
|
$ |
13,089 |
|
$ |
74,699 |
|
$ |
14,730 |
|
$ |
102,606 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The average recorded investment in impaired loans was $121 million in 2009.
|