Edgar Filing: ServisFirst Bancshares, Inc.

Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2011

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to_______

Commission file number 000-53149

SERVISFIRST BANCSHARES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		26-0734029
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

850 Shades Creek Parkway, Birmingham, Alabama		35209
(Address of Principal Executive Offices)		(Zip Code)

(205) 949-0302

(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer”, and small reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Class		Outstanding as of October 29, 2011
Common stock, $.001 par value		5,895,682

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	49
Item 4.	Controls and Procedures	49

PART II. OTHER INFORMATION
Item 1	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 5.	Other Information	50
Item 6.	Exhibits	50

EX-31.01 SECTION 302 CERTIFICATION OF THE CEO

EX-31.02 SECTION 302 CERTIFICATION OF THE CFO

EX-32.01 SECTION 906 CERTIFICATION OF THE CEO

EX-32.02 SECTION 906 CERTIFICATION OF THE CFO

PART 1. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

SERVISFIRST BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2011 AND DECEMBER 31, 2010

(In thousands, except share and per share amounts)

	September 30, 2011			December 31, 2010
	(Unaudited)			(Audited)
ASSETS
Cash and due from banks	$	35,624		$	27,454
Interest-bearing balances due from depository institutions		57,739			204,178
Federal funds sold		91,315			346
Cash and cash equivalents		184,678			231,978
Available for sale debt securities, at fair value		296,826			276,959
Held to maturity debt securities (fair value of $16,141 and $4,963 at
September 30, 2011 and December 31, 2010, respectively)		15,355			5,234
Restricted equity securities		3,708			3,510
Mortgage loans held for sale		9,114			7,875
Loans		1,695,476			1,394,818
Less allowance for loan losses		(21,466	)		(18,077	)
Loans, net		1,674,010			1,376,741
Premises and equipment, net		4,499			4,450
Accrued interest and dividends receivable		7,529			6,990
Deferred tax assets		4,889			6,366
Other real estate owned		10,044			6,966
Bank owned life insurance contracts		40,000			-
Other assets		6,678			8,097
Total assets	$	2,257,330		$	1,935,166
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing	$	382,095		$	250,490
Interest-bearing		1,629,186			1,508,226
Total deposits		2,011,281			1,758,716
Federal funds purchased		16,400			-
Other borrowings		4,949			24,937
Trust preferred securities		30,514			30,420
Accrued interest payable		1,043			898
Other liabilities		3,670			3,095
Total liabilities Total liabilities		2,067,857			1,818,066
Stockholders' equity:
Preferred stock, Series A Senior Non-Cumulative Perpetual, par value $.001 (liquidation preference $1,000), net of discount; 40,000 shares authorized, 40,000 shares issued and outstanding at September 30, 2011 and no shares authorized, issued and outstanding at December 31, 2011		39,958			-
Preferred stock, undesignated, par value $.001 per share; 1,000,000shares authorized; no shares outstanding		-			-
Common stock, par value $.001 per share; 15,000,000 shares authorized; 5,890,482 shares issued and outstanding at September 30, 2011 and 5,527,482 shares issued and outstanding at December 31, 2010		6			6
Additional paid-in capital		87,043			75,914
Retained earnings		55,095			38,343
Accumulated other comprehensive income		7,371			2,837
Total stockholders' equity		189,473			117,100
Total liabilities and shareholders' equity	$	2,257,330		$	1,935,166

See Notes to Consolidated Financial Statements.

SERVISFIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Interest income:
Interest and fees on loans	$	21,043	$	17,715	$	59,509	$	50,669
Taxable securities		1,374		1,575		4,360		4,997
Nontaxable securities		742		582		2,175		1,650
Federal funds sold		54		23		125		41
Other interest and dividends		99		64		184		100
Total interest income		23,312		19,959		66,353		57,457
Interest expense:
Deposits		3,382		3,113		9,780		8,795
Borrowed funds		711		859		2,330		2,461
Total interest expense		4,093		3,972		12,110		11,256
Net interest income		19,219		15,987		54,243		46,201
Provision for loan losses		2,740		2,537		6,465		7,612
Net interest income after provision for loan losses		16,479		13,450		47,778		38,589
Noninterest income:
Service charges on deposit accounts		569		564		1,683		1,718
Mortgage banking		814		589		1,641		1,336
Securities gains		-		-		666		53
Other operating income		425		195		871		377
Total noninterest income		1,808		1,348		4,861		3,484
Noninterest expenses:
Salaries and employee benefits		4,723		3,547		13,963		10,176
Equipment and occupancy expense		923		814		2,743		2,368
Professional services		337		220		928		625
FDIC and other regulatory assessments		403		626		1,377		2,276
OREO expense		115		483		504		1,543
Other operating expenses		2,331		1,777		7,283		5,472
Total noninterest expenses		8,832		7,467		26,798		22,460
Income before income taxes		9,455		7,331		25,841		19,613
Provision for income taxes		3,320		2,532		8,990		6,780
Net income		6,135		4,799		16,851		12,833
Preferred stock dividends		100		-		100		-
Net income available to common stockholders	$	6,035	$	4,799	$	16,751	$	12,833

Basic earnings per common share	$	1.03	$	0.87	$	2.93	$	2.33

Diluted earnings per common share	$	0.90	$	0.77	$	2.58	$	2.11

SERVISFIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011			2010
Net income	$	6,135	$	4,799	$	16,851		$	12,833
Other comprehensive income, net of tax:
Unrealized holding gains arising during period from securities available for sale, net of tax of $1,473 and $3,186 for the three and nine months ended September 30, 2011, respectively, and $1,124 and $2,817 for the three and nine months ended September 30, 2010, respectively		1,784		2,087		4,966			5,197
Reclassification adjustment for net gains on sale of securities in net income, net of tax of $234 and $19 for the nine months ended September 30, 2011 and 2010, respectively		-		-		(432	)		(34	)
Other comprehensive income, net of tax		1,784		2,087		4,534			5,163
Comprehensive income	$	7,919	$	6,886	$	21,385		$	17,996

See Notes to Consolidated Financial Statements

SERVISFIRST BANCSHARES, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2011

(In thousands, except share amounts)

(Unaudited)

	Preferred Stock		Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income		Total Stockholders' Equity
Balance, December 31, 2010		-		6		75,913		38,344			2,837		117,100
Sale of 340,000 shares of common stock		-		-		10,159		-			-		10,159
Sale of 40,000 shares of preferred
stock, net		39,958		-		-		-			-		39,958
Preferred dividends paid		-		-		-		(100	)		-		(100	)
Exercise 23,000 stock options		-		-		252		-			-		252
Other comprehensive income		-		-		-		-			4,534		4,534
Stock-based compensation expense		-		-		719		-			-		719
Net income		-		-		-		16,851			-		16,851
Balance, September 30, 2011	$	39,958	$	6	$	87,043	$	55,095		$	7,371	$	189,473

See Notes to Consolidated Financial Statements

SERVISFIRST BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

(In thousands) (Unaudited)

	2011			2010
OPERATING ACTIVITIES
Net income	$	16,851		$	12,833
Adjustments to reconcile net income to net cash provided by
operating activities:
Deferred tax benefit		(1,476	)		(292	)
Provision for loan losses		6,465			7,612
Depreciation and amortization		844			800
Net amortization of investments		648			565
Market value adjustment of interest rate cap		98			40
Increase in accrued interest and dividends receivable		(539	)		(634	)
Stock-based compensation expense		719			509
Increase (decrease) in accrued interest payable		145			(112	)
Proceeds from sale of mortgage loans held for sale		115,329			113,404
Originations of mortgage loans held for sale		(115,344	)		(115,361	)
Gain on sale of securities available for sale		(666	)		(53	)
Gain on sale of mortgage loans held for sale		(1,641	)		(1,336	)
Net (gain) loss on sale of other real estate owned		(87	)		180
Write down of other real estate owned		181			853
Decrease in special prepaid FDIC insurance assessments		1,126			1,963
Loss on prepayment of other borrowings		738			-
Net change in other assets, liabilities, and other
operating activities		966			(773	)
Net cash provided by operating activities		24,357			20,198
INVESTMENT ACTIVITIES
Purchase of securities available for sale		(95,311	)		(40,817	)
Proceeds from maturities, calls and paydowns of securities
available for sale		19,679			23,517
Purchase of securities held to maturity		(11,188	)		(1,986	)
Proceeds from maturities, calls and paydowns of securities
held to maturity		1,067			-
Increase in loans		(309,529	)		(147,150	)
Purchase of premises and equipment		(893	)		(196	)
Purchase of restricted equity securities		(543	)		(269	)
Purchase of interest rate cap		-			(160	)
Purchase of bank-owned life insurance contracts		(40,000	)		-
Proceeds from sale of securities available for sale		63,270			31,014
Proceeds from sale of restricted equity securities		345			-
Proceeds from sale of other real estate owned and repossessions		2,950			7,470
Additions to other real estate owned		-			(75	)
Net cash used in investing activities		(370,153	)		(128,652	)
FINANCING ACTIVITIES
Net increase in noninterest-bearing deposits		131,605			13,230
Net decrease in interest-bearing deposits		120,960			155,972
Net increase in federal funds purchased		16,400			-
Proceeds from issuance of trust preferred securities		-			15,050
Proceeds from sale of common stock, net		10,411			50
Proceeds from sale of preferred stock, net		39,958			-
Repayment of other borrowings		(20,738	)		-
Dividends on preferred stock		(100	)		-
Net cash provided by financing activities		298,496			184,302
Net (decrease) increase in cash and cash equivalents		(47,300	)		75,848
Cash and cash equivalents at beginning of year		231,978			76,206
Cash and cash equivalents at end of year	$	184,678		$	152,054
SUPPLEMENTAL DISCLOSURE
Cash paid for:
Interest	$	11,965		$	11,368
Income taxes		10,136			6,958
NONCASH TRANSACTIONS
Transfers of loans from held for sale to held for investment	$	417		$	787
Other real estate acquired in settlement of loans		6,263			5,156
Internally financed sales of other real estate owned		141			1,083

See Notes to Consolidated Financial Statements.

SERVISFIRST BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2011

(Unaudited)

NOTE 1 - GENERAL

The accompanying consolidated financial statements in this report have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, including Regulation S-X and the instructions for Form 10-Q, and have not been audited. These consolidated financial statements do not include all of the information and footnotes required by U. S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments necessary to present fairly the consolidated financial position and the consolidated results of operations for the interim periods have been made. All such adjustments are of a normal nature. The consolidated results of operations are not necessarily indicative of the consolidated results of operations which ServisFirst Bancshares, Inc. (the “Company”) may achieve for future interim periods or the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Form 10-K for the year ended December 31, 2010.

All reported amounts are in thousands except share and per share data.

NOTE 2 - CASH AND CASH EQUIVALENTS

Cash on hand, cash items in process of collection, amounts due from banks, and federal funds sold are included in cash and cash equivalents.

NOTE 3 - EARNINGS PER COMMON SHARE

Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock options and warrants, as well as the potential common stock issuable upon possible conversion of the preferred securities described in Note 11 to the consolidated financial statements.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
	(In Thousands, Except Shares and Per Share Data)
Earnings Per Common Share
Weighted average common shares outstanding		5,886,178		5,515,384		5,709,334		5,513,482
Net income available to common stockholders	$	6,035	$	4,799	$	16,751	$	12,833
Basic earnings per common share	$	1.03	$	0.87	$	2.93	$	2.33

Weighted average common shares outstanding		5,886,178		5,515,384		5,709,334		5,513,482
Dilutive effects of assumed conversions and
exercise of stock options and warrants		996,631		902,563		962,579		735,377
Weighted average common and dilutive potential
common shares outstanding		6,882,809		6,417,947		6,671,913		6,248,859
Net income, available to common stockholders	$	6,035	$	4,799	$	16,751	$	12,833
Effect of interest expense on covertible debt, net of tax and
discretionary expenditures related to conversion		150		150		444		323
Net income, adjusted for effect of debt conversion	$	6,185	$	4,949	$	17,195	$	13,156
Diluted earnings per common share	$	0.90	$	0.77	$	2.58	$	2.11

NOTE 4 - SECURITIES

The amortized cost and fair value of available-for-sale and held-to-maturity securities at September 30, 2011 and December 31, 2010 are summarized as follows:

	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Market Value
	(In Thousands)
September 30, 2011:
Securities Available for Sale
U.S. Treasury and government sponsored agencies	$	95,191	$	1,715	$	(92	)	$	96,814
Mortgage-backed securities		96,565		5,094		-			101,659
State and municipal securities		92,191		5,091		(38	)		97,244
Corporate debt		1,027		82		-			1,109
Total	$	284,974	$	11,982	$	(130	)	$	296,826
Securities Held to Maturity
Mortgage-backed securities	$	9,824	$	410	$	-		$	10,234
State and municipal securities		5,531		376		-			5,907
Total	$	15,355	$	786	$	-		$	16,141

December 31, 2010:
Securities Available for Sale
U.S. Treasury and government sponsored agencies	$	90,631	$	1,887	$	(224	)	$	92,294
Mortgage-backed securities		101,709		2,783		(268	)		104,224
State and municipal securities		78,241		1,076		(1,051	)		78,266
Corporate debt		2,013		162		-			2,175
Total	$	272,594	$	5,908	$	(1,543	)	$	276,959
Securities Held to Maturity
State and municipal securities	$	5,234	$	-	$	(271	)	$	4,963
Total	$	5,234	$	-	$	(271	)	$	4,963

All mortgage-backed securities are with government-sponsored enterprises (GSEs) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.

The following table identifies, as of September 30, 2011 and December 31, 2010, the Company’s investment securities that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months. At September 30, 2011, two of the Company’s 493 debt securities had been in an unrealized loss position for 12 or more months. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost, which may be maturity; accordingly, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2011. Further, the Company believes any deterioration in value of its current investment securities is attributable to changes in market interest rates and not credit quality of the issuer.

	Less Than Twelve Months					Twelve Months or More					Total
	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
	(In Thousands)
September 30, 2011:
U.S. Treasury and government
sponsored agencies	$	-		$	-	$	-		$	-	$	-		$	-
Mortgage-backed securities		(92	)		14,049		-			-		(92	)		14,049
State and municipal securities		(27	)		2,730		(11	)		395		(38	)		3,125
Corporate debt		-			-		-			-		-			-
Total	$	(119	)	$	16,779	$	(11	)	$	395	$	(130	)	$	17,174

December 31, 2010:
U.S. Treasury and government
sponsored agencies	$	(224	)	$	24,217	$	-		$	-	$	(224	)	$	24,217
Mortgage-backed securities		(268	)		16,417		-			-		(268	)		16,417
State and municipal securities		(1,034	)		33,282		(288	)		3,674		(1,322	)		36,956
Corporate debt		-			-		-			-		-			-
Total	$	(1,526	)	$	73,916	$	(288	)	$	3,674	$	(1,814	)	$	77,590

NOTE 5 – LOANS

The following table details the Company’s loans at September 30, 2011 and December 31, 2010:

	September 30, 2011			December 31, 2010
	(Dollars In Thousands)
Commercial, financial and agricultural	$	699,616		$	536,620
Real estate - construction		160,171			172,055
Real estate - mortgage:
Owner-occupied commercial		364,590			270,767
1-4 family mortgage		204,866			199,236
Other mortgage		223,294			178,793
Subtotal: Real estate - mortgage		792,750			648,796
Consumer		42,939			37,347
Total Loans		1,695,476			1,394,818
Less: Allowance for loan losses		(21,466	)		(18,077	)
Net Loans	$	1,674,010		$	1,376,741

Commercial, financial and agricultural		41.26	%		38.47	%
Real estate - construction		9.45	%		12.34	%
Real estate - mortgage:
Owner-occupied commercial		21.50	%		19.41	%
1-4 family mortgage		12.09	%		14.28	%
Other mortgage		13.17	%		12.82	%
Subtotal: Real estate - mortgage		46.76	%		46.51	%
Consumer		2.53	%		2.68	%
Total Loans		100.00	%		100.00	%

Loans by credit quality indicator as of September 30, 2011 were as follows:

	Pass		Special Mention		Substandard		Doubtful		Total
	(In Thousands)
Commercial, financial
and agricultural	$	678,924	$	11,980	$	8,712	$	-	$	699,616
Real estate - construction		125,811		12,638		21,722		-		160,171
Real estate - mortgage:
Owner-occupied
commercial		351,031		7,693		5,866		-		364,590
1-4 family mortgage		194,254		4,870		5,742		-		204,866
other mortgage		214,791		5,030		3,473		-		223,294
Total real estate mortgage		760,076		17,593		15,081		-		792,750
Consumer		41,741		101		1,097		-		42,939
Total	$	1,606,552	$	42,312	$	46,612	$	-	$	1,695,476

Loans by performance status as of September 30, 2011 were as follows:

	Performing		Nonperforming		Total
	(In Thousands)
Commercial, financial and agricultural	$	698,576	$	1,040	$	699,616
Real estate - construction		146,031		14,140		160,171
Real estate - mortgage:
Owner-occupied commercial		363,968		622		364,590
1-4 family mortgage		203,404		1,462		204,866
other mortgage		222,716		578		223,294
Total real estate mortgage		790,088		2,662		792,750
Consumer		42,360		579		42,939
Total	$	1,677,055	$	18,421	$	1,695,476

Loans by past-due status as of September 30, 2011 were as follows:

	Past Due Status (Accruing Loans)
	30-59 Days		60-89 Days		90+ Days		Total Past Due		Non-Accrual		Current		Total Loans
	(In Thousands)
Commercial, financial and agricultural	$	604	$	-	$	-	$	604	$	1,040	$	697,972	$	699,616
Real estate - construction		480		-		500		980		13,640		145,551		160,171
Real estate - mortgage:
Owner-occupied commercial		1,593		-		-		1,593		622		362,375		364,590
1-4 family mortgage		278		-		291		569		1,171		203,126		204,866
Other mortgage		751		-		578		1,329		-		221,965		223,294
Total real estate - mortgage		2,622		-		869		3,491		1,793		787,466		792,750
Consumer		-		6		-		6		579		42,354		42,939
Total	$	3,706	$	6	$	1,369	$	5,081	$	17,052	$	1,673,343	$	1,695,476

The following table presents an analysis of the allowance for loan losses by portfolio segment as of September 30, 2011 and December 31, 2010. The total allowance for loan losses is disaggregated into those amounts associated with loans individually evaluated and those associated with loans collectively evaluated.

	Commercial, financial and agricultural			Real estate - construction			Real estate - mortgage			Consumer			Unallocated		Total
	(In Thousands)
	Three Months Ended September 30, 2011
Allowance for loan losses:
Balance at June 30, 2011	$	5,809		$	6,468		$	3,185		$	566		$	3,488	$	19,516
Chargeoffs		(37	)		(678	)		(88	)		(11	)		-		(814	)
Recoveries		12			10			1			1			-		24
Provision		464			479			964			482			351		2,740
Balance at September 30, 2011	$	6,248		$	6,279		$	4,062		$	1,038		$	3,839	$	21,466

	Nine Months Ended September 30, 2011
Allowance for loan losses:
Balance at December 31, 2010	$	5,348		$	6,373		$	2,443		$	749		$	3,164	$	18,077
Chargeoffs		(897	)		(1,999	)		(103	)		(340	)		-		(3,339	)
Recoveries		12			174			2			75			-		263
Provision		1,785			1,731			1,720			554			675		6,465
Balance at September 30, 2011	$	6,248		$	6,279		$	4,062		$	1,038		$	3,839	$	21,466

	September 30, 2011
Individually Evaluated for Impairment	$	1,249		$	1,809		$	1,741		$	828		$	-	$	5,627
Collectively Evaluated for Impairment		4,999			4,470			2,321			210			3,839		15,839

Loans:
Ending Balance	$	699,616		$	160,171		$	792,750		$	42,939				$	1,695,476
Individually Evaluated for Impairment		8,712			21,722			15,081			1,097					46,612
Collectively Evaluated for Impairment		690,904			138,449			777,669			41,842					1,648,864

	December 31, 2010
	Commercial, financial and agricultural			Real estate - construction			Real estate - mortgage			Consumer			Unallocated		Total

Allowance for loan losses:	$	5,348		$	6,373		$	2,443		$	749		$	3,164	$	18,077

Individually Evaluated for Impairment	$	1,602		$	1,855		$	415		$	554		$	-	$	4,426
Collectively Evaluated for Impairment		3,746			4,518			2,028			195			3,164		13,651

Loans:
Ending Balance	$	536,620		$	172,055		$	648,796		$	37,347				$	1,394,818
Individually Evaluated for Impairment		14,018			28,710			15,093			1,319					59,140
Collectively Evaluated for Impairment		522,602			143,345			633,703			36,028					1,335,678

The following table presents details of the Company’s impaired loans as of September 30, 2011 and December 31, 2010, respectively. Loans which have been fully charged off do not appear in the tables.

September 30, 2011
							For the three months ended September 30, 2011				For the nine months ended September 30, 2011
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized in Period		Average Recorded Investment		Interest Income Recognized in Period
	(In Thousands)
With no allowance recorded:
Commercial, financial and agricultural	$	1,655	$	1,705	$	-	$	1,758	$	21	$	1,679	$	62
Real estate - construction		16,026		17,132		-		17,541		90		17,367		335
Real estate - mortgage:
Owner-occupied commercial		2,334		2,334		-		2,352		43		2,358		120
1-4 family mortgage		725		725		-		630		3		655		14
Other mortgage		1,928		1,929		-		1,862		24		1,883		80
Total real estate - mortgage		4,987		4,988		-		4,844		70		4,896		214
Consumer		173		173		-		173		2		173		5
Total with no allowance recorded		22,841		23,998		-		24,316		183		24,115		616

With an allowance recorded:
Commercial, financial and agricultural		5,212		5,212		1,249		5,501		73		5,480		225
Real estate - construction		5,696		5,696		1,809		6,141		4		6,085		75
Real estate - mortgage:
Owner-occupied commercial		3,184		3,184		117		3,141		62		3,156		199
1-4 family mortgage		4,552		4,589		1,624		4,710		37		4,670		127
Other mortgage		334		334		-		339		6		339		18
Total real estate - mortgage		8,070		8,107		1,741		8,190		105		8,165		344
Consumer		894		914		828		975		4		946		16
Total with allowance recorded		19,872		19,929		5,627		20,807		186		20,676		660

Total Impaired Loans:
Commercial, financial and agricultural		6,867		6,917		1,249		7,259		94		7,159		287
Real estate - construction		21,722		22,828		1,809		23,682		94		23,452		410
Real estate - mortgage:
Owner-occupied commercial		5,518		5,518		117		5,493		105		5,514		319
1-4 family mortgage		5,277		5,314		1,624		5,340		40		5,325		141
Other mortgage		2,262		2,263		-		2,201		30		2,222		98
Total real estate - mortgage		13,057		13,095		1,741		13,034		175		13,061		558
Consumer		1,067		1,087		828		1,148		6		1,119		21
Total impaired loans	$	42,713	$	43,927	$	5,627	$	45,123	$	369	$	44,791	$	1,276

December 31, 2010
	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In Thousands)
With no allowance recorded:
Commercial, financial and agricultural	$	2,345	$	2,930	$	-
Real estate - construction		10,532		12,705		-
Real estate - mortgage:
Owner-occupied commercial		1,614		1,801