ECB BANCORP INC - 10-Q filing on 2012-11-13

Credit Quality of Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2012

Credit Quality of Loans and Allowance for Loan Losses [Abstract]

Credit Quality of Loans and Allowance for Loan Losses

(7) Credit Quality of Loans and Allowance for Loan Losses

The following tables summarize the balances by loan category of the allowance for loan losses with changes arising from charge-offs, recoveries and provision expense for the nine months ending September 30, 2012 and 2011, and the three months ending September 30, 2012 and 2011. Also, provided is allowance for loan losses information as of December 31, 2011:

Allowance for Loan Losses

As of and for the Nine Months Ended September 30, 2012


Allowance for Credit Losses	Real Estate Construction and Land Development			Real Estate Secured by Farmland			Real Estate Secured by Residential Properties			Real Estate Secured by Nonfarm Nonresidential			Consumer Installment			Credit Cards and Related Plans			Commercial and Industrial			Loans to Finance Agricultural Production			All Other Loans			General Qualitative & Quantitative Portion			Total
	(Dollars in thousands)
Beginning balance	$	3,655		$	15		$	2,418		$	1,740		$	46		$	18		$	555		$	115		$	26		$	3,504		$	12,092
Charge-offs		(1,823	)		—			(434	)		(1,095	)		(47	)		(21	)		(464	)		—			(138	)		—			(4,022	)
Recoveries		345			—			57			3			13			4			13			—			97			—			532
Provisions		1,335			(2	)		172			954			141			63			578			(25	)		59			(492	)		2,783

Ending Balance	$	3,512		$	13		$	2,213		$	1,602		$	153		$	64		$	682		$	90		$	44		$	3,012		$	11,385

Ending Balance: individually evaluated for impairment	$	694		$	—		$	524		$	451		$	—		$	—		$	1		$	—		$	—		$	—		$	1,670

Ending Balance: collectively evaluated for impairment	$	2,818		$	13		$	1,689		$	1,151		$	153		$	64		$	681		$	90		$	44		$	3,012		$	9,715

Loans
Ending Balance	$	65,707		$	28,030		$	106,456		$	204,963		$	6,077		$	1,555		$	60,905		$	33,194		$	10,047		$	—		$	516,934

Ending Balance: individually evaluated for impairment	$	8,164		$	358		$	7,895		$	16,088		$	—		$	—		$	204		$	—		$	—		$	—		$	32,709

Ending Balance: collectively evaluated for impairment	$	57,543		$	27,672		$	98,561		$	188,875		$	6,077		$	1,555		$	60,701		$	33,194		$	10,047		$	—		$	484,225

Allowance for Loan Losses

As of and for the Three Months Ended September 30, 2012


Allowance for Credit Losses	Real Estate Construction and Land Development			Real Estate Secured by Farmland		Real Estate Secured by Residential Properties			Real Estate Secured by Nonfarm Nonresidential			Consumer Installment			Credit Cards and Related Plans			Commercial and Industrial			Loans to Finance Agricultural Production			All Other Loans			General Qualitative & Quantitative Portion			Total
	(Dollars in thousands)
Beginning balance	$	3,255		$	13	$	2,389		$	1,050		$	150		$	69		$	651		$	101		$	39		$	3,063		$	10,780
Charge-offs		(910	)		—		(156	)		(203	)		(4	)		(4	)		(43	)		—			(39	)		—			(1,359	)
Recoveries		8			—		10			1			—			1			1			—			26			—			47
Provisions		1,159			—		(30	)		754			7			(2	)		73			(11	)		18			(51	)		1,917

Ending Balance	$	3,512		$	13	$	2,213		$	1,602		$	153		$	64		$	682		$	90		$	44		$	3,012		$	11,385

Ending Balance: individually evaluated for impairment	$	694		$	—	$	524		$	451		$	—		$	—		$	1		$	—		$	—		$	—		$	1,670

Ending Balance: collectively evaluated for impairment	$	2,818		$	13	$	1,689		$	1,151		$	153		$	64		$	681		$	90		$	44		$	3,012		$	9,715

Loans
Ending Balance	$	65,707		$	28,030	$	106,456		$	204,963		$	6,077		$	1,555		$	60,905		$	33,194		$	10,047		$	—		$	516,934

Ending Balance: individually evaluated for impairment	$	8,164		$	358	$	7,895		$	16,088		$	—		$	—		$	204		$	—		$	—		$	—		$	32,709

Ending Balance: collectively evaluated for impairment	$	57,543		$	27,672	$	98,561		$	188,875		$	6,077		$	1,555		$	60,701		$	33,194		$	10,047		$	—		$	484,225

Allowance for Loan Losses

As of and for the Nine Months Ended September 30, 2011


Allowance for Credit Losses	Real Estate Construction and Land Development			Real Estate Secured by Farmland			Real Estate Secured by Residential Properties			Real Estate Secured by Nonfarm Nonresidential			Consumer Installment			Credit Cards and Related Plans			Commercial and Industrial			Loans to Finance Agricultural Production		All Other Loans			General Qualitative & Quantitative Portion		Total
	(Dollars in thousands)
Beginning balance	$	6,168		$	28		$	3,450		$	1,007		$	12		$	21		$	882		$	18	$	139		$	1,522	$	13,247
Charge-offs		(4,327	)		—			(941	)		(1,594	)		(18	)		(108	)		(338	)		—		(172	)		—		(7,498	)
Recoveries		9			—			7			43			4			1			84			—		86			—		234
Provisions		2,553			(12	)		149			2,067			17			305			215			109		178			650		6,231

Ending Balance	$	4,403		$	16		$	2,665		$	1,523		$	15		$	219		$	843		$	127	$	231		$	2,172	$	12,214

Ending Balance: individually evaluated for impairment	$	940		$	—		$	1,059		$	999		$	—		$	200		$	510		$	—	$	—		$	—	$	3,708

Ending Balance: collectively evaluated for impairment	$	3,463		$	16		$	1,606		$	524		$	15		$	19		$	333		$	127	$	231		$	2,172	$	8,506

Loans
Ending Balance	$	71,174		$	31,782		$	117,824		$	211,479		$	5,354		$	2,231		$	44,201		$	20,910	$	16,671		$	—	$	521,626

Ending Balance: individually evaluated for impairment	$	12,567		$	—		$	7,678		$	9,755		$	—		$	200		$	1,363		$	—	$	—		$	—	$	31,563

Ending Balance: collectively evaluated for impairment	$	58,607		$	31,782		$	110,146		$	201,724		$	5,354		$	2,031		$	42,838		$	20,910	$	16,671		$	—	$	490,063

Allowance for Loan Losses

As of and for the Three Months Ended September 30, 2011


Allowance for Credit Losses	Real Estate Construction and Land Development			Real Estate Secured by Farmland			Real Estate Secured by Residential Properties			Real Estate Secured by Nonfarm Nonresidential			Consumer Installment			Credit Cards and Related Plans			Commercial and Industrial		Loans to Finance Agricultural Production		All Other Loans			General Qualitative & Quantitative Portion		Total
	(Dollars in thousands)
Beginning balance	$	7,467		$	33		$	4,239		$	1,132		$	30		$	188		$	622	$	15	$	174		$	1,548	$	15,448
Charge-offs		(2,410	)		—			(237	)		(1,551	)		(3	)		(99	)		—		—		(50	)		—		(4,350	)
Recoveries		3			—			5			43			2			—			6		—		29			—		88
Provisions		(657	)		(17	)		(1,342	)		1,899			(14	)		130			215		112		78			624		1,028

Ending Balance	$	4,403		$	16		$	2,665		$	1,523		$	15		$	219		$	843	$	127	$	231		$	2,172	$	12,214

Ending Balance: individually evaluated for impairment	$	940		$	—		$	1,059		$	999		$	—		$	200		$	510	$	—	$	—		$	—	$	3,708

Ending Balance: collectively evaluated for impairment	$	3,463		$	16		$	1,606		$	524		$	15		$	19		$	333	$	127	$	231		$	2,172	$	8,506

Loans
Ending Balance	$	71,174		$	31,782		$	117,824		$	211,479		$	5,354		$	2,231		$	44,201	$	20,910	$	16,671		$	—	$	521,626

Ending Balance: individually evaluated for impairment	$	12,567		$	—		$	7,678		$	9,755		$	—		$	200		$	1,363	$	—	$	—		$	—	$	31,563

Ending Balance: collectively evaluated for impairment	$	58,607		$	31,782		$	110,146		$	201,724		$	5,354		$	2,031		$	42,838	$	20,910	$	16,671		$	—	$	490,063

Allowance for Loan Losses

As of December 31, 2011


Allowance for Credit Losses	Real Estate Construction and Land Development		Real Estate Secured by Farmland		Real Estate Secured by Residential Properties		Real Estate Secured by Nonfarm Nonresidential		Consumer Installment		Credit Cards and Related Plans		Commercial and Industrial		Loans to Finance Agricultural Production		All Other Loans		General Qualitative & Quantitative Portion		Total
	(Dollars in thousands)
Ending Balance	$	3,655	$	15	$	2,418	$	1,740	$	46	$	18	$	555	$	115	$	26	$	3,504	$	12,092

Ending Balance: individually evaluated for impairment	$	637	$	—	$	480	$	1,181	$	—	$	—	$	165	$	—	$	—	$	—	$	2,463

Ending Balance: collectively evaluated for impairment	$	3,018	$	15	$	1,938	$	559	$	46	$	18	$	390	$	115	$	26	$	3,504	$	9,629

Loans
Ending Balance	$	67,127	$	29,890	$	110,374	$	203,063	$	6,620	$	1,661	$	45,679	$	21,539	$	10,589	$	—	$	496,542

Ending Balance: individually evaluated for impairment	$	10,074	$	—	$	5,514	$	14,029	$	—	$	—	$	561	$	1,111	$	—	$	—	$	31,289

Ending Balance: collectively evaluated for impairment	$	57,053	$	29,890	$	104,860	$	189,034	$	6,620	$	1,661	$	45,118	$	20,428	$	10,589	$	—	$	465,253

Loans are closely monitored by management for changes in quality. This monitoring includes assessing the appropriateness of the credit quality indicator in relation to the risk of the loan. Management uses the following indicators to grade the risk of each loan based on a system of eight possible ratings.

Pass: Include loans that are risk rated one through three. The primary source of repayment for pass loans is very likely to be sufficient, with secondary sources readily available; strong financial position; minimal risk; profitability, liquidity and capitalization are better than industry norms.

Weak Pass: Include loans that are risk rated four. The asset quality for weak pass assets is generally acceptable. Primary source of loan repayment is acceptable and secondary sources are likely to be realized, if needed; acceptable business credit, but borrowers operations, cash flow, or financial condition evidence more than average risk; requires above average levels of supervision and attention from Loan Officer. The source of increased risk has been identified, can be effectively managed/corrected, and the increased risk is not significant to warrant a more severe rating.

Special Mention: Include loans that are risk rated five. A special mention asset is considered to be high risk due to potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard: Include loans that are risk rated six through eight. Loans rated as substandard are considered to be very high risk. A substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weakness that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Some loans that are substandard do not meet the definition of an impaired loan and therefore are not deemed impaired.

The following tables present loans as of September 30, 2012 and December 31, 2011 classified by risk type:

Credit Quality Indicators

As of September 30, 2012


	Pass		Weak Pass		Special Mention		Substandard		Total
	(Dollars in thousands)
Real Estate—Construction and Land Development Loans	$	30,600	$	21,382	$	5,007	$	8,718	$	65,707
Real Estate—Secured by Farmland		21,645		3,552		2,475		358		28,030
Real Estate—Secured by Residential Properties		59,262		29,163		8,959		9,072		106,456
Real Estate—Secured by Nonfarm Nonresidential		92,020		73,081		20,767		19,095		204,963
Consumer Installment		3,892		1,830		288		67		6,077
Credit Cards and Related Plans		795		528		230		2		1,555
Commercial and Industrial		34,054		20,698		5,170		983		60,905
Loans to Finance Agriculture Production		26,374		6,416		404		—		33,194
All Other Loans		5,660		4,364		23		—		10,047

Total	$	274,302	$	161,014	$	43,323	$	38,295	$	516,934

Credit Quality Indicators

As of December 31, 2011


	Pass		Weak Pass		Special Mention		Substandard		Total
	(Dollars in thousands)
Real Estate—Construction and Land Development Loans	$	27,833	$	23,237	$	4,853	$	11,204	$	67,127
Real Estate—Secured by Farmland		22,008		4,430		3,452		—		29,890
Real Estate—Secured by Residential Properties		60,121		31,146		12,302		6,805		110,374
Real Estate—Secured by Nonfarm Nonresidential		90,099		75,384		18,663		18,917		203,063
Consumer Installment		4,025		2,212		254		129		6,620
Credit Cards and Related Plans		850		529		279		3		1,661
Commercial and Industrial		25,133		16,146		2,686		1,714		45,679
Loans to Finance Agriculture Production		16,473		3,290		584		1,192		21,539
All Other Loans		3,171		7,393		25		—		10,589

Total	$	249,713	$	163,767	$	43,098	$	39,964	$	496,542

The following tables summarize the past due loans by category as of September 30, 2012 and December 31, 2011:

Past Due Loans

As of September 30, 2012


	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total
	(Dollars in thousands)
Real Estate Construction and Land Development	$	124	$	127	$	4,037	$	4,288	$	61,419	$	65,707
Real Estate Secured by Farmland		—		—		357		357		27,673		28,030
Real Estate Secured by Residential Properties		213		763		1,742		2,718		103,738		106,456
Real Estate Secured by Nonfarm Nonresidential		1,781		933		8,490		11,204		193,759		204,963
Consumer Installment		1		3		6		10		6,067		6,077
Credit Cards and Related Plans		3		2		—		5		1,550		1,555
Commercial and Industrial		234		—		172		406		60,499		60,905
Loans to Finance Agricultural Production		—		—		—		—		33,194		33,194
All Other Loans		—		—		—		—		10,047		10,047

Total	$	2,356	$	1,828	$	14,804	$	18,988	$	497,946	$	516,934

Non-Accrual Loans Included in above Total	$	440	$	1,683	$	14,804	$	16,927	$	1,098	$	18,025

Past Due Loans

As of December 31, 2011


	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total
	(Dollars in thousands)
Real Estate Construction and Land Development	$	447	$	198	$	6,142	$	6,787	$	60,340	$	67,127
Real Estate Secured by Farmland		—		—		—		—		29,890		29,890
Real Estate Secured by Residential Properties		1,055		993		1,278		3,326		107,048		110,374
Real Estate Secured by Nonfarm Nonresidential		2,357		—		4,446		6,803		196,260		203,063
Consumer Installment		65		—		22		87		6,533		6,620
Credit Cards and Related Plans		2		2		—		4		1,657		1,661
Commercial and Industrial		294		—		205		499		45,180		45,679
Loans to Finance Agricultural Production		—		—		—		—		21,539		21,539
All Other Loans		—		—		—		—		10,589		10,589

Total	$	4,220	$	1,193	$	12,093	$	17,506	$	479,036	$	496,542

Non-Accrual Loans Included in above Total	$	1,426	$	588	$	12,093	$	14,107	$	1,866	$	15,973

The following tables summarize impaired loans as of September 30, 2012, September 30, 2011 and December 31, 2011. The recorded investment balance includes the loan balance, deferred fees that have yet to be recognized and accrued interest. The deferred fees that have yet to be recognized are not material amounts.

Impaired Loans


	Balance at September 30, 2012						Nine Months Ended September 30, 2012				Three Months Ended September 30, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Real Estate Construction and Land Development	$	5,149	$	7,372	$	—	$	5,269	$	71	$	4,225	$	22
Real Estate Secured by Farmland		357		357		—		198		4		356		—
Real Estate Secured by Residential Properties		2,097		2,227		—		1,910		48		2,070		17
Real Estate Secured by Nonfarm Nonresidential		10,633		11,704		—		8,715		143		9,689		48
Consumer Installment		—		—		—				—				—
Credit Cards and Related Plans		—		—		—		—		—		—		—
Commercial and Industrial		202		200		—		272		12		217		3
Loans to Finance Agricultural Production		—		—		—		195		9		—		—
All Other Loans		—		—		—		—		—		—		—

Total impaired loans with no related allowance	$	18,438	$	21,860	$	—	$	16,559	$	287	$	16,557	$	90
With an allowance recorded:
Real Estate Construction and Land Development	$	3,026	$	3,599	$	694	$	3,607	$	49	$	4,178	$	22
Real Estate Secured by Farmland		—		—		—		—		—		—		—
Real Estate Secured by Residential Properties		5,810		5,823		524		5,380		135		5,568		46
Real Estate Secured by Nonfarm Nonresidential		5,471		5,494		451		7,028		116		5,841		29
Consumer Installment		—		—		—		—		—		—		—
Credit Cards and Related Plans		—		—		—		—		—		—		—
Commercial and Industrial		4		4		1		95		4		37		1
Loans to Finance Agricultural Production		—		—		—		—		—		—		—
All Other Loans		—		—		—		—		—		—		—

Total impaired loans with related allowance recorded	$	14,311	$	14,920	$	1,670	$	16,110	$	304	$	15,624	$	98
Total
Construction and Land Development	$	8,175	$	10,971	$	694	$	8,876	$	120	$	8,403	$	44
Residential		7,907		8,050		524		7,290		183		7,638		63
Commercial		16,667		17,759		452		16,503		288		16,140		81
Consumer		—		—		—		—		—		—		—

Total impaired loans	$	32,749	$	36,780	$	1,670	$	32,669	$	591	$	32,181	$	188

Impaired Loans


	Balance at September 30, 2011						Nine Months Ended September 30, 2011				Three Months Ended September 30, 2011
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Real Estate Construction and Land Development	$	9,766	$	15,847	$	—	$	8,009	$	98	$	8,389	$	32
Real Estate Secured by Farmland		—		—		—		—		—		—		—
Real Estate Secured by Residential Properties		3,546		3,880		—		3,858		58		3,881		21
Real Estate Secured by Nonfarm Nonresidential		5,779		7,245		—		2,220		47		3,626		25
Consumer Installment		—		—		—				—				—
Credit Cards and Related Plans		—		—		—		—		—		—		—
Commercial and Industrial		413		650		—		359		10		344		3
Loans to Finance Agricultural Production		—		—		—		—		—		—		—
All Other Loans		—		—		—		—		—		—		—

Total impaired loans with no related allowance	$	19,504	$	27,622	$	—	$	14,446	$	213	$	16,240	$	81
With an allowance recorded:
Real Estate Construction and Land Development	$	2,807	$	3,478	$	940	$	7,449	$	91	$	5,935	$	22
Real Estate Secured by Farmland		—		—		—		—		—		—		—
Real Estate Secured by Residential Properties		4,138		4,135		1,059		4,064		62		4,367		24
Real Estate Secured by Nonfarm Nonresidential		3,983		4,046		999		3,889		82		5,178		35
Consumer Installment		—		—		—		—		—		—		—
Credit Cards and Related Plans		200		200		200		200		7		200		2
Commercial and Industrial		958		951		510		601		17		995		9
Loans to Finance Agricultural Production		—		—		—		—		—		—		—
All Other Loans		—		—		—		—		—		—		—

Total impaired loans with related allowance recorded	$	12,086	$	12,810	$	3,708	$	16,203	$	259	$	16,675	$	92
Total
Construction and Land Development	$	12,573	$	19,325	$	940	$	15,458	$	189	$	14,324	$	54
Residential		7,684		8,015		1,059		7,922		120		8,248		45
Commercial		11,133		12,892		1,509		7,069		156		10,143		72
Consumer		200		200		200		200		7		200		2

Total impaired loans	$	31,590	$	40,432	$	3,708	$	30,649	$	472	$	32,915	$	173

Impaired Loans

As of December 31, 2011


	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)
With no related allowance recorded:
Real Estate Construction and Land Development	$	6,280	$	11,137	$	—
Real Estate Secured by Farmland		—		—		—
Real Estate Secured by Residential Properties		2,135		2,611		—
Real Estate Secured by Nonfarm Nonresidential		7,075		7,484		—
Consumer Installment		—		—		—
Credit Cards and Related Plans		—		—		—
Commercial and Industrial		379		500		—
Loans to Finance Agricultural Production		1,109		1,110		—
All Other Loans		—		—		—

Total impaired loans with no related allowance	$	16,978	$	22,842	$	—
With an allowance recorded:
Real Estate Construction and Land Development	$	3,806	$	3,794	$	637
Real Estate Secured by Farmland		—		—		—
Real Estate Secured by Residential Properties		3,391		3,382		480
Real Estate Secured by Nonfarm Nonresidential		6,976		6,957		1,181
Consumer Installment		—		—		—
Credit Cards and Related Plans		—		—		—
Commercial and Industrial		186		186		165
Loans to Finance Agricultural Production		—		—		—
All Other Loans		—		—		—

Total impaired loans with related allowance recorded	$	14,359	$	14,319	$	2,463

Total
Construction and Land Development	$	10,086	$	14,931	$	637
Residential		5,526		5,993		480
Commercial		15,725		16,237		1,346
Consumer		—		—		—

Total impaired loans	$	31,337	$	37,161	$	2,463

The following table presents nonaccrual loans as of September 30, 2012 and December 31, 2011 by loan category:

Nonaccrual Loans


	September 30, 2012		December 31, 2011
	(Dollars in thousands)
Real Estate Construction and Land Development	$	4,508	$	6,795
Real Estate Secured by Farmland		358		—
Real Estate Secured by Residential Properties		2,579		2,113
Real Estate Secured by Nonfarm Nonresidential		10,364		6,767
Consumer Installment		44		22
Credit Cards and Related Plans		—		—
Commercial and Industrial		172		276
Loans to Finance Agricultural Production		—		—
All Other Loans		—		—

Total	$	18,025	$	15,973

Interest income not recognized due to loans being on nonaccrual status during the three and nine month period ended September 30, 2012 was approximately $229 thousand and $676 thousand, respectively. Interest income not recognized due to loans being on nonaccrual status during the three and nine month period ended September 30, 2011 was approximately $239 thousand and $689 thousand, respectively.

Troubled Debt Restructurings

Loans which management identifies as impaired generally will be nonperforming loans or restructured loans (also known as “troubled debt restructurings” or “TDRs”). As a result of adopting the amendments in ASU 2011-02, the Company reassessed all restructurings that occurred on or after the beginning of the fiscal year of adoption (January 1, 2011) to determine whether they are considered TDRs under the amended guidance. The Company identified no loans as TDRs which the allowance for loan losses had previously been measured under a general allowance methodology. TDRs are treated as impaired loans in determining the adequacy of the allowance for loan loss.

For the three and nine months ended September 30, 2012 and 2011 the following tables present a breakdown of the types of concessions made by loan class. The recorded investment balances presented are balances at the time of concessions.


	Three Months ended September 30, 2012						Nine Months ended September 30, 2012
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
					(Dollars in thousands)
Below market interest rate:
Real Estate Construction and Land Development		1	$	533	$	533		1	$	533	$	533
Real Estate Secured by Residential Properties		—		—		—		1		1,943		1,943

Total below market interest rate		1	$	533	$	533		2	$	2,476	$	2,476

Extended payment terms:

Real Estate Construction and Land Development		1	$	228	$	228		2	$	732	$	732
Commercial and Industrial		—		—		—		1		18		18
Consumer Installment		1		39		39		1		39		39

Total Extended Payment Terms		2	$	267	$	267		4	$	789	$	789

Total		3	$	800	$	800		6	$	3,265	$	3,265


	Three Months ended September 30, 2011						Nine Months ended September 30, 2011
	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
					(Dollars in thousands)
Below market interest rate:
Real Estate Secured by Residential Properties		—	$	—	$	—		1	$	219	$	219
Real Estate Secured by Nonfarm Nonresidential		—		—		—		1		1,145		1,145
Credit Cards and Related Plans		—		—		—		1		33		33

Total below market interest rate		—	$	—	$	—		3	$	1,397	$	1,397

Extended payment terms:

Real Estate Construction and Land Development		—	$	—	$	—		1	$	56	$	56
Real Estate Secured by Residential Properties		—		—		—		3		1,549		1,549
Real Estate Secured by Nonfarm Nonresidential		3		918		918		3		918		918
Commercial and Industrial		2		227		227		2		227		227

Total Extended Payment Terms		5	$	1,145	$	1,145		9	$	2,750	$	2,750

Forgiveness of principal:
Real Estate Construction and Land Development		—	$	—	$	—		10	$	925	$	860

Total forgiveness of principal		—	$	—	$	—		10	$	925	$	860

Total		5	$	1,145	$	1,145		22	$	5,072	$	5,007

The following table presents the successes and failures of the types of modifications within the previous twelve months as of September 30, 2012. The recorded investment balances presented are as of September 30, 2012.


	Paid in Full				Paying as Restructured				Converted to Non-accrual				Foreclosure/Default
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
	(Dollars in thousands)
Below market interest rate		—	$	—		4	$	3,724		1	$	545		—	$	—
Extended payment terms		—		—		5		985		—		—		—		—
Forgiveness of principal		—		—		—		—		—		—		—		—

Total		—	$	—		9	$	4,709		1	$	545		—	$	—

There was one loan with a recorded investment of $545 thousand that is included in the table above that was placed on non-accrual in a prior period. While the loan was not ninety days past due, it was moved into nonaccrual status due to payment concerns. There were no loans that were restructured during the twelve months ending on September 30, 2012 as a result of payment default.