| LOANS |
NOTE 3. LOANS The composition of loans at December 31, 2013 and 2012 is summarized as follows: | | | December 31, | | | | | 2013 | | 2012 | | | | | (In Thousands) | | | Commercial, financial and agricultural | | $ | 1,278,649 | | $ | 1,030,990 | | | Real estate - construction | | | 151,868 | | | 158,361 | | | Real estate - mortgage: | | | | | | | | | Owner-occupied commercial | | | 710,372 | | | 568,041 | | | 1-4 family mortgage | | | 278,621 | | | 235,909 | | | Other mortgage | | | 391,396 | | | 323,599 | | | Total real estate - mortgage | | | 1,380,389 | | | 1,127,549 | | | Consumer | | | 47,962 | | | 46,282 | | | Total Loans | | | 2,858,868 | | | 2,363,182 | | | Less: Allowance for loan losses | | | (30,663) | | | (26,258) | | | Net Loans | | $ | 2,828,205 | | $ | 2,336,924 | | Changes in the allowance for loan losses during the years ended December 31, 2013, 2012 and 2011, respectively are as follows: | | | Years Ended December 31, | | | | | 2013 | | 2012 | | 2011 | | | | | (In Thousands) | | | Balance, beginning of year | | $ | 26,258 | | $ | 22,030 | | $ | 18,077 | | | Loans charged off | | | (9,012) | | | (5,755) | | | (5,653) | | | Recoveries | | | 409 | | | 883 | | | 634 | | | Provision for loan losses | | | 13,008 | | | 9,100 | | | 8,972 | | | Balance, end of year | | $ | 30,663 | | $ | 26,258 | | $ | 22,030 | | The Company assesses the adequacy of its allowance for loan losses at the end of each calendar quarter. The level of the allowance is based on management’s evaluation of the loan portfolios, past loan loss experience, current asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, economic conditions, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. Loan losses are charged off when management believes that the full collectability of the loan is unlikely. A loan may be partially charged-off after a “confirming event” has occurred which serves to validate that full repayment pursuant to the terms of the loan is unlikely. Allocation of the allowance is made for specific loans, but the entire allowance is available for any loan that in management’s judgment deteriorates and is uncollectible. The portion of the reserve classified as qualitative factors, is management’s evaluation of potential future losses that would arise in the loan portfolio should management’s assumption about qualitative and environmental conditions materialize. This qualitative factor portion of the allowance for loan losses is based on management’s judgment regarding various external and internal factors including macroeconomic trends, management’s assessment of the Company’s loan growth prospects, and evaluations of internal risk controls.
The following table presents an analysis of the allowance for loan losses by portfolio segment as of December 31, 2013 and 2012. The total allowance for loan losses is disaggregated into those amounts associated with loans individually evaluated and those associated with loans collectively evaluated.
Changes in the allowance for loan losses, segregated by loan type, during the years ended December 31, 2013 and 2012, respectively, are as follows: |
| | Commercial, | | | | | | | | | | | | | | | | | | | | financial and | | Real estate - | | Real estate - | | | | | Qualitative | | | | | | | | agricultural | | construction | | mortgage | | Consumer | | Factors | | Total | | | | | (In Thousands) | | | | | Year Ended December 31, 2013 | | | Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | Balance at December 31, 2012 | | $ | 8,233 | | $ | 6,511 | | $ | 4,912 | | $ | 199 | | $ | 6,403 | | $ | 26,258 | | | Chargeoffs | | | (1,932) | | | (4,829) | | | (2,041) | | | (210) | | | - | | | (9,012) | | | Recoveries | | | 66 | | | 296 | | | 36 | | | 11 | | | - | | | 409 | | | Provision | | | 4,803 | | | 3,831 | | | 4,588 | | | 855 | | | (1,069) | | | 13,008 | | | Balance at December 31, 2013 | | $ | 11,170 | | $ | 5,809 | | $ | 7,495 | | $ | 855 | | $ | 5,334 | | $ | 30,663 | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2013 | | | Individually Evaluated for Impairment | | $ | 1,992 | | $ | 1,597 | | $ | 1,982 | | $ | 699 | | $ | - | | $ | 6,270 | | | Collectively Evaluated for Impairment | | | 9,178 | | | 4,212 | | | 5,513 | | | 156 | | | 5,334 | | | 24,393 | | | | | | | | | | | | | | | | | | | | | | | | Loans: | | | | | | | | | | | | | | | | | | | | | Ending Balance | | $ | 1,278,649 | | $ | 151,868 | | $ | 1,380,389 | | $ | 47,962 | | $ | - | | $ | 2,858,868 | | | Individually Evaluated for Impairment | | | 3,827 | | | 9,238 | | | 18,202 | | | 699 | | | - | | | 31,966 | | | Collectively Evaluated for Impairment | | | 1,274,822 | | | 142,630 | | | 1,362,187 | | | 47,263 | | | - | | | 2,826,902 | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2012 | | | Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | Balance at December 31, 2011 | | $ | 6,627 | | $ | 6,542 | | $ | 3,295 | | $ | 531 | | $ | 5,035 | | $ | 22,030 | | | Chargeoffs | | | (1,106) | | | (3,088) | | | (660) | | | (901) | | | - | | | (5,755) | | | Recoveries | | | 125 | | | 58 | | | 692 | | | 8 | | | - | | | 883 | | | Provision | | | 2,587 | | | 2,999 | | | 1,585 | | | 561 | | | 1,368 | | | 9,100 | | | Balance at December 31, 2012 | | $ | 8,233 | | $ | 6,511 | | $ | 4,912 | | $ | 199 | | $ | 6,403 | | $ | 26,258 | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2012 | | | Individually Evaluated for Impairment | | $ | 577 | | $ | 1,013 | | $ | 1,921 | | $ | - | | $ | - | | $ | 3,511 | | | Collectively Evaluated for Impairment | | | 7,656 | | | 5,498 | | | 2,991 | | | 199 | | | 6,403 | | | 22,747 | | | | | | | | | | | | | | | | | | | | | | | | Loans: | | | | | | | | | | | | | | | | | | | | | Ending Balance | | $ | 1,030,990 | | $ | 158,361 | | $ | 1,127,549 | | $ | 46,282 | | $ | - | | $ | 2,363,182 | | | Individually Evaluated for Impairment | | | 3,910 | | | 14,422 | | | 18,927 | | | 135 | | | - | | | 37,394 | | | Collectively Evaluated for Impairment | | | 1,027,080 | | | 143,939 | | | 1,108,622 | | | 46,147 | | | - | | | 2,325,788 | | The credit quality of the loan portfolio is summarized no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies. The following table presents credit quality indicators for the loan loss portfolio segments and classes. These categories are utilized to develop the associated allowance for loan losses using historical losses adjusted for current economic conditions defined as follows:
| · | Pass loans which are well protected by the current net worth and paying capacity of the obligor (or obligors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral. | | · | Special Mention loans with potential weakness that may, if not reversed or corrected, weaken the credit or inadequately protect the Company’s position at some future date. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification. | | · | Substandard loans that exhibit well-defined weakness or weaknesses that presently jeopardize debt repayment. These loans are characterized by the distinct possibility that the institution will sustain some loss if the weaknesses are not corrected. | | · |
Doubtful loans that have all the weaknesses inherent in loans classified substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.
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Loans by credit quality indicator as of December 31, 2013 and 2012 were as follows: | | | | | | Special | | | | | | | | | | | | December 31, 2013 | | Pass | | Mention | | Substandard | | Doubtful | | Total | | | | | (In Thousands) | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | $ | 1,238,109 | | $ | 34,883 | | $ | 5,657 | | $ | - | | $ | 1,278,649 | | | Real estate - construction | | | 139,239 | | | 3,392 | | | 9,237 | | | - | | | 151,868 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | | | | | | | commercial | | | 696,687 | | | 11,545 | | | 2,140 | | | - | | | 710,372 | | | 1-4 family mortgage | | | 265,019 | | | 1,253 | | | 12,349 | | | - | | | 278,621 | | | Other mortgage | | | 379,419 | | | 8,179 | | | 3,798 | | | - | | | 391,396 | | | Total real estate mortgage | | | 1,341,125 | | | 20,977 | | | 18,287 | | | - | | | 1,380,389 | | | Consumer | | | 47,243 | | | 3 | | | 716 | | | - | | | 47,962 | | | Total | | $ | 2,765,716 | | $ | 59,255 | | $ | 33,897 | | $ | - | | $ | 2,858,868 | | | | | | | | | | | | | | | | | | | | | | | | | | Special | | | | | | | | | | | | December 31, 2012 | | Pass | | Mention | | Substandard | | Doubtful | | Total | | | | | (In Thousands) | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | $ | 1,004,043 | | $ | 19,172 | | $ | 7,775 | | $ | - | | $ | 1,030,990 | | | Real estate - construction | | | 121,168 | | | 22,771 | | | 14,422 | | | - | | | 158,361 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | | | | | | | commercial | | | 555,536 | | | 4,142 | | | 8,363 | | | - | | | 568,041 | | | 1-4 family mortgage | | | 223,152 | | | 6,379 | | | 6,378 | | | - | | | 235,909 | | | Other mortgage | | | 312,473 | | | 6,674 | | | 4,452 | | | - | | | 323,599 | | | Total real estate mortgage | | | 1,091,161 | | | 17,195 | | | 19,193 | | | - | | | 1,127,549 | | | Consumer | | | 46,076 | | | 71 | | | 135 | | | - | | | 46,282 | | | Total | | $ | 2,262,448 | | $ | 59,209 | | $ | 41,525 | | $ | - | | $ | 2,363,182 | |
Loans by performance status as of December 31, 2013 and 2012 are as follows:
| December 31, 2013 | | Performing | | Nonperforming | | Total | | | | | (In Thousands) | | | Commercial, financial | | | | | | | | | | | | and agricultural | | $ | 1,276,935 | | $ | 1,714 | | $ | 1,278,649 | | | Real estate - construction | | | 148,118 | | | 3,750 | | | 151,868 | | | Real estate - mortgage: | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | commercial | | | 708,937 | | | 1,435 | | | 710,372 | | | 1-4 family mortgage | | | 276,725 | | | 1,896 | | | 278,621 | | | Other mortgage | | | 391,153 | | | 243 | | | 391,396 | | | Total real estate mortgage | | | 1,376,815 | | | 3,574 | | | 1,380,389 | | | Consumer | | | 47,264 | | | 698 | | | 47,962 | | | Total | | $ | 2,849,132 | | $ | 9,736 | | $ | 2,858,868 | | | | | | | | | | | | | | | December 31, 2012 | | Performing | | Nonperforming | | Total | | | | | (In Thousands) | | | Commercial, financial | | | | | | | | | | | | and agricultural | | $ | 1,030,714 | | $ | 276 | | $ | 1,030,990 | | | Real estate - construction | | | 151,901 | | | 6,460 | | | 158,361 | | | Real estate - mortgage: | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | commercial | | | 565,255 | | | 2,786 | | | 568,041 | | | 1-4 family mortgage | | | 235,456 | | | 453 | | | 235,909 | | | Other mortgage | | | 323,359 | | | 240 | | | 323,599 | | | Total real estate mortgage | | | 1,124,070 | | | 3,479 | | | 1,127,549 | | | Consumer | | | 46,139 | | | 143 | | | 46,282 | | | Total | | $ | 2,352,824 | | $ | 10,358 | | $ | 2,363,182 | |
Loans by past due status as of December 31, 2013 and 2012 are as follows:
| December 31, 2013 | | Past Due Status (Accruing Loans) | | | | | | | | | | | | | | | | | | | | | | | Total Past | | | | | | | | | | | | | | 30-59 Days | | 60-89 Days | | 90+ Days | | Due | | Non-Accrual | | Current | | Total Loans | | | | | (In Thousands) | | | Commercial, financial | | | | | | | | | | | | | | | | | | | | | | | | and agricultural | | $ | 73 | | $ | - | | $ | - | | $ | 73 | | $ | 1,714 | | $ | 1,276,862 | | $ | 1,278,649 | | | Real estate - construction | | | - | | | - | | | - | | | - | | | 3,750 | | | 148,118 | | | 151,868 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | | | | | | | | | | | | | commercial | | | - | | | - | | | - | | | - | | | 1,435 | | | 708,937 | | | 710,372 | | | 1-4 family mortgage | | | 177 | | | - | | | 19 | | | 196 | | | 1,877 | | | 276,548 | | | 278,621 | | | Other mortgage | | | - | | | - | | | - | | | - | | | 243 | | | 391,153 | | | 391,396 | | | Total real estate - | | | | | | | | | | | | | | | | | | | | | | | | mortgage | | | 177 | | | - | | | 19 | | | 196 | | | 3,555 | | | 1,376,638 | | | 1,380,389 | | | Consumer | | | 89 | | | 97 | | | 96 | | | 282 | | | 602 | | | 47,078 | | | 47,962 | | | Total | | $ | 339 | | $ | 97 | | $ | 115 | | $ | 551 | | $ | 9,621 | | $ | 2,848,696 | | $ | 2,858,868 | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2012 | | Past Due Status (Accruing Loans) | | | | | | | | | | | | | | | | | | | | | | | Total Past | | | | | | | | | | | | | | 30-59 Days | | 60-89 Days | | 90+ Days | | Due | | Non-Accrual | | Current | | Total Loans | | | | | (In Thousands) | | | Commercial, financial | | | | | | | | | | | | | | | | | | | | | | | | and agricultural | | $ | 1,699 | | $ | 385 | | $ | - | | $ | 2,084 | | $ | 276 | | $ | 1,028,630 | | $ | 1,030,990 | | | Real estate - construction | | | - | | | - | | | - | | | - | | | 6,460 | | | 151,901 | | | 158,361 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | | | | | | | | | | | | | commercial | | | 1,480 | | | 10 | | | - | | | 1,490 | | | 2,786 | | | 563,765 | | | 568,041 | | | 1-4 family mortgage | | | 420 | | | 16 | | | - | | | 436 | | | 453 | | | 235,020 | | | 235,909 | | | Other mortgage | | | 516 | | | - | | | - | | | 516 | | | 240 | | | 322,843 | | | 323,599 | | | Total real estate - | | | | | | | | | | | | | | | | | | | | | | | | mortgage | | | 2,416 | | | 26 | | | - | | | 2,442 | | | 3,479 | | | 1,121,628 | | | 1,127,549 | | | Consumer | | | 108 | | | - | | | 8 | | | 116 | | | 135 | | | 46,031 | | | 46,282 | | | Total | | $ | 4,223 | | $ | 411 | | $ | 8 | | $ | 4,642 | | $ | 10,350 | | $ | 2,348,190 | | $ | 2,363,182 | |
Fair value estimates for specifically impaired loans are derived from appraised values based on the current market value or as is value of the property, normally from recently received and reviewed appraisals. Appraisals are obtained from state-certified appraisers and are based on certain assumptions, which may include construction or development status and the highest and best use of the property. These appraisals are reviewed by our credit administration department to ensure they are acceptable, and values are adjusted down for costs associated with asset disposal. Once this estimated net realizable value has been determined, the value used in the impairment assessment is updated. As subsequent events dictate and estimated net realizable values decline, required reserves may be established or further adjustments recorded. The following table presents details of the Company’s impaired loans as of December 31, 2013 and 2012, respectively. Loans which have been fully charged off do not appear in the tables. | | | December 31, 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Unpaid | | | | | Average | | Interest Income | | | | | Recorded | | Principal | | Related | | Recorded | | Recognized | | | | | Investment | | Balance | | Allowance | | Investment | | in Period | | | | | (In Thousands) | | | With no allowance recorded: | | | | | | | | | | | | | | | | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | $ | 1,210 | | $ | 1,210 | | $ | - | | $ | 1,196 | | $ | 63 | | | Real estate - construction | | | 1,967 | | | 2,405 | | | - | | | 1,363 | | | 32 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | Owner-occupied commercial | | | 577 | | | 577 | | | - | | | 603 | | | 32 | | | 1-4 family mortgage | | | 1,198 | | | 1,198 | | | - | | | 1,200 | | | 55 | | | Other mortgage | | | 2,311 | | | 2,311 | | | - | | | 1,901 | | | 123 | | | Total real estate - mortgage | | | 4,086 | | | 4,086 | | | - | | | 3,704 | | | 210 | | | Consumer | | | - | | | - | | | - | | | - | | | - | | | Total with no allowance recorded | | | 7,263 | | | 7,701 | | | - | | | 6,263 | | | 305 | | | | | | | | | | | | | | | | | | | | | With an allowance recorded: | | | | | | | | | | | | | | | | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | | 2,618 | | | 2,958 | | | 1,992 | | | 2,844 | | | 98 | | | Real estate - construction | | | 7,270 | | | 7,750 | | | 1,597 | | | 6,564 | | | 200 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | Owner-occupied commercial | | | 1,509 | | | 1,509 | | | 620 | | | 1,573 | | | 38 | | | 1-4 family mortgage | | | 11,120 | | | 11,120 | | | 1,210 | | | 10,743 | | | 342 | | | Other mortgage | | | 1,487 | | | 1,586 | | | 152 | | | 1,873 | | | 96 | | | Total real estate - mortgage | | | 14,116 | | | 14,215 | | | 1,982 | | | 14,189 | | | 476 | | | Consumer | | | 699 | | | 699 | | | 699 | | | 790 | | | 28 | | | Total with allowance recorded | | | 24,703 | | | 25,622 | | | 6,270 | | | 24,387 | | | 802 | | | | | | | | | | | | | | | | | | | | | Total Impaired Loans: | | | | | | | | | | | | | | | | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | | 3,828 | | | 4,168 | | | 1,992 | | | 4,040 | | | 161 | | | Real estate - construction | | | 9,237 | | | 10,155 | | | 1,597 | | | 7,927 | | | 232 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | Owner-occupied commercial | | | 2,086 | | | 2,086 | | | 620 | | | 2,176 | | | 70 | | | 1-4 family mortgage | | | 12,318 | | | 12,318 | | | 1,210 | | | 11,943 | | | 397 | | | Other mortgage | | | 3,798 | | | 3,897 | | | 152 | | | 3,774 | | | 219 | | | Total real estate - mortgage | | | 18,202 | | | 18,301 | | | 1,982 | | | 17,893 | | | 686 | | | Consumer | | | 699 | | | 699 | | | 699 | | | 790 | | | 28 | | | Total impaired loans | | $ | 31,966 | | $ | 33,323 | | $ | 6,270 | | $ | 30,650 | | $ | 1,107 |
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| | December 31, 2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Unpaid | | | | | Average | | Interest Income | | | | | Recorded | | Principal | | Related | | Recorded | | Recognized in | | | | | Investment | | Balance | | Allowance | | Investment | | Period | | | | | (In Thousands) | | | With no allowance recorded: | | | | | | | | | | | | | | | | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | $ | 2,602 | | $ | 2,856 | | $ | - | | $ | 2,313 | | $ | 105 | | | Real estate - construction | | | 6,872 | | | 7,894 | | | - | | | 7,631 | | | 188 | | | Owner-occupied commercial | | | 5,111 | | | 5,361 | | | - | | | 5,411 | | | 145 | | | 1-4 family mortgage | | | 2,166 | | | 2,388 | | | - | | | 2,177 | | | 108 | | | Other mortgage | | | 4,151 | | | 4,249 | | | - | | | 4,206 | | | 275 | | | Total real estate - mortgage | | | 11,428 | | | 11,998 | | | - | | | 11,794 | | | 528 | | | Consumer | | | 135 | | | 344 | | | - | | | 296 | | | 6 | | | Total with no allowance recorded | | | 21,037 | | | 23,092 | | | - | | | 22,034 | | | 827 | | | | | | | | | | | | | | | | | | | | | With an allowance recorded: | | | | | | | | | | | | | | | | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | | 1,308 | | | 1,308 | | | 577 | | | 1,325 | | | 90 | | | Real estate - construction | | | 7,550 | | | 8,137 | | | 1,013 | | | 6,961 | | | 154 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | Owner-occupied commercial | | | 3,195 | | | 3,195 | | | 779 | | | 3,277 | | | 77 | | | 1-4 family mortgage | | | 4,002 | | | 4,002 | | | 1,007 | | | 4,001 | | | 139 | | | Other mortgage | | | 302 | | | 302 | | | 135 | | | 307 | | | 20 | | | Total real estate - mortgage | | | 7,499 | | | 7,499 | | | 1,921 | | | 7,585 | | | 236 | | | Total with allowance recorded | | | 16,357 | | | 16,944 | | | 3,511 | | | 15,871 | | | 480 | | | | | | | | | | | | | | | | | | | | | Total Impaired Loans: | | | | | | | | | | | | | | | | | | Commercial, financial | | | | | | | | | | | | | | | | | | and agricultural | | | 3,910 | | | 4,164 | | | 577 | | | 3,638 | | | 195 | | | Real estate - construction | | | 14,422 | | | 16,031 | | | 1,013 | | | 14,592 | | | 342 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | Owner-occupied commercial | | | 8,306 | | | 8,556 | | | 779 | | | 8,688 | | | 222 | | | 1-4 family mortgage | | | 6,168 | | | 6,390 | | | 1,007 | | | 6,178 | | | 247 | | | Other mortgage | | | 4,453 | | | 4,551 | | | 135 | | | 4,513 | | | 295 | | | Total real estate - mortgage | | | 18,927 | | | 19,497 | | | 1,921 | | | 19,379 | | | 764 | | | Consumer | | | 135 | | | 344 | | | - | | | 296 | | | 6 | | | Total impaired loans | | $ | 37,394 | | $ | 40,036 | | $ | 3,511 | | $ | 37,905 | | $ | 1,307 | | Troubled Debt Restructurings (“TDR”) at December 31, 2013 and 2012 totaled $14.2 million and $12.3 million, respectively. The increase primarily consists of one relationship that was added in the fourth quarter totaling $8.0 million offset by pay-offs of $4.9 million and charge-offs of 0.9 million during 2013. The Company’s TDRs have resulted primarily from allowing the borrower to pay interest-only for an extended period of time, or through interest rate reductions rather than from debt forgiveness. At December 31, 2013, the Company had a related allowance for loan losses of $2,411,000 allocated to these TDRs, compared to $1,442,000 at December 31, 2012. The Company had eleven TDR loans to one borrower in the amount of $4.8 million enter into payment default status during the fourth quarter of 2013. All other loans classified as TDRs as of December 31, 2013 are performing as agreed under the terms of their restructured plans. The following table presents an analysis of TDRs as of December 31, 2013 and 2012.
| | December 31, 2013 | | December 31, 2012 | | | | | | | Pre- | | Post- | | | | | Pre- | | Post- | | | | | | | Modification | | Modification | | | | | Modification | | Modification | | | | | | | Outstanding | | Outstanding | | | | | Outstanding | | Outstanding | | | | Number of | | Recorded | | Recorded | | Number of | | Recorded | | Recorded | | | | Contracts | | Investment | | Investment | | Contracts | | Investment | | Investment | | | | (In Thousands) | | | Troubled Debt Restructurings | | | | | | | | | | | | | | | | | | | | Commercial, financial and | | | | | | | | | | | | | | | | | | | | agricultural | | 5 | | $ | 2,029 | | $ | 2,029 | | | 2 | | $ | 1,168 | | $ | 1,168 | | | Real estate - construction | | 7 | | | 1,781 | | | 1,781 | | | 15 | | | 3,213 | | | 3,213 | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | | | | | | | | | commercial | | - | | | - | | | - | | | 6 | | | 5,907 | | | 5,907 | | | 1-4 family mortgage | | 4 | | | 10,073 | | | 10,073 | | | 5 | | | 1,709 | | | 1,709 | | | Other mortgage | | 1 | | | 285 | | | 285 | | | 1 | | | 302 | | | 302 | | | Total real estate mortgage | | 5 | | | 10,358 | | | 10,358 | | | 12 | | | 7,918 | | | 7,918 | | | Consumer | | - | | | - | | | - | | | - | | | - | | | - | | | | | 17 | | $ | 14,168 | | $ | 14,168 | | | 29 | | $ | 12,299 | | $ | 12,299 | | | | | | | | | | | | | | | | | | | | | | | | Number of | | Recorded | | | | | Number of | | Recorded | | | | | | | Contracts | | Investment | | | | | Contracts | | Investment | | | | | | | | | | | | | | | | | | | | | | | | | | Troubled Debt Restructurings | | | | | | | | | | | | | | | | | | | | That Subsequently Defaulted | | | | | | | | | | | | | | | | | | | | Commercial, financial and | | | | | | | | | | | | | | | | | | | | agricultural | | 3 | | $ | 1,067 | | | | | | - | | $ | - | | | | | | Real estate - construction | | 6 | | | 1,564 | | | | | | - | | | - | | | | | | Real estate - mortgage: | | | | | | | | | | | | | | | | | | | | Owner-occupied | | | | | | | | | | | | | | | | | | | | commercial | | - | | | - | | | | | | 3 | | | 2,786 | | | | | | 1-4 family mortgage | | 2 | | | 1,848 | | | | | | - | | | - | | | | | | Other mortgage | | - | | | - | | | | | | - | | | - | | | | | | Total real estate - mortgage | | 2 | | | 1,848 | | | | | | 3 | | | 2,786 | | | | | | Consumer | | - | | | - | | | | | | - | | | - | | | | | | | | 11 | | $ | 4,479 | | | | | | 3 | | $ | 2,786 | | | | | In the ordinary course of business, the Company has granted loans to certain related parties, including directors, and their affiliates. The interest rates on these loans were substantially the same as rates prevailing at the time of the transaction and repayment terms are customary for the type of loan. Changes in related party loans for the years ended December 31, 2013 and 2012 are as follows: | | | Years Ended December 31, | | | | | 2013 | | 2012 | | | | | (In Thousands) | | | Balance, beginning of year | | $ | 12,400 | | $ | 9,047 | | | Advances | | | 4,975 | | | 7,630 | | | Repayments | | | (4,258) | | | (8,096) | | | Participations | | | - | | | 3,819 | | | Balance, end of year | | $ | 13,117 | | $ | 12,400 | |
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