Loans | Loans Classes of loans are as follows: June 30, December 31, (Amounts In Thousands) Agricultural $ 81,171 $ 88,580 Commercial and financial 219,693 218,632 Real estate: Construction, 1 to 4 family residential 68,918 69,738 Construction, land development and commercial 115,452 109,595 Mortgage, farmland 227,124 215,286 Mortgage, 1 to 4 family first liens 862,818 831,591 Mortgage, 1 to 4 family junior liens 148,018 144,200 Mortgage, multi-family 318,244 336,810 Mortgage, commercial 380,862 361,196 Loans to individuals 26,607 26,417 Obligations of state and political subdivisions 53,965 57,626 $ 2,502,872 $ 2,459,671 Net unamortized fees and costs 929 894 $ 2,503,801 $ 2,460,565 Less allowance for loan losses 29,510 29,400 $ 2,474,291 $ 2,431,165 Changes in the allowance for loan losses, the allowance for loan losses applicable to impaired loans and the related loan balance of impaired loans for the three and six months ended June 30, 2018 were as follows: Three Months Ended June 30, 2018 Agricultural Commercial and Financial Real Estate: Construction and land development Real Estate: Mortgage, farmland Real Estate: Mortgage, 1 to 4 family Real Estate: Mortgage, multi- family and commercial Other Total (Amounts In Thousands) Allowance for loan losses: Beginning balance $ 2,253 $ 4,658 $ 2,780 $ 3,709 $ 8,655 $ 5,794 $ 1,061 $ 28,910 Charge-offs (5 ) (176 ) — — (205 ) (53 ) (108 ) (547 ) Recoveries 17 193 2 19 147 13 45 436 Provision (194 ) 365 272 (253 ) 305 (57 ) 273 711 Ending balance $ 2,071 $ 5,040 $ 3,054 $ 3,475 $ 8,902 $ 5,697 $ 1,271 $ 29,510 Six Months Ended June 30, 2018 Agricultural Commercial and Financial Real Estate: Construction and land development Real Estate: Mortgage, farmland Real Estate: Mortgage, 1 to 4 family Real Estate: Mortgage, multi- family and commercial Other Total (Amounts In Thousands) Allowance for loan losses: Beginning balance $ 2,294 $ 4,837 $ 2,989 $ 3,669 $ 8,668 $ 5,700 $ 1,243 $ 29,400 Charge-offs (5 ) (206 ) — — (326 ) (54 ) (223 ) (814 ) Recoveries 29 441 145 19 245 17 82 978 Provision (247 ) (32 ) (80 ) (213 ) 315 34 169 (54 ) Ending balance $ 2,071 $ 5,040 $ 3,054 $ 3,475 $ 8,902 $ 5,697 $ 1,271 $ 29,510 Ending balance, individually evaluated for impairment $ 189 $ 706 $ 36 $ 13 $ 71 $ 443 $ 60 $ 1,518 Ending balance, collectively evaluated for impairment $ 1,882 $ 4,334 $ 3,018 $ 3,462 $ 8,831 $ 5,254 $ 1,211 $ 27,992 Loans: Ending balance $ 81,171 $ 219,693 $ 184,370 $ 227,124 $ 1,010,836 $ 699,106 $ 80,572 $ 2,502,872 Ending balance, individually evaluated for impairment $ 3,718 $ 3,524 $ 942 $ 4,276 $ 6,980 $ 7,958 $ 60 $ 27,458 Ending balance, collectively evaluated for impairment $ 77,453 $ 216,169 $ 183,428 $ 222,848 $ 1,003,856 $ 691,148 $ 80,512 $ 2,475,414 Changes in the allowance for loan losses for the three and six months ended June 30, 2017 were as follows: Three Months Ended June 30, 2017 Agricultural Commercial and Financial Real Estate: Construction and land development Real Estate: Mortgage, farmland Real Estate: Mortgage, 1 to 4 family Real Estate: Mortgage, multi- family and commercial Other Total (Amounts In Thousands) Allowance for loan losses: Beginning balance $ 2,505 $ 3,899 $ 3,094 $ 3,507 $ 8,172 $ 4,358 $ 915 $ 26,450 Charge-offs (39 ) (237 ) (114 ) — (63 ) (43 ) (110 ) (606 ) Recoveries 29 210 29 — 234 49 44 595 Provision (154 ) 714 156 502 (3 ) 1,050 246 2,511 Ending balance $ 2,341 $ 4,586 $ 3,165 $ 4,009 $ 8,340 $ 5,414 $ 1,095 $ 28,950 Six Months Ended June 30, 2017 Agricultural Commercial and Financial Real Estate: Construction and land development Real Estate: Mortgage, farmland Real Estate: Mortgage, 1 to 4 family Real Estate: Mortgage, multi- family and commercial Other Total (Amounts In Thousands) Allowance for loan losses: Beginning balance $ 2,947 $ 4,531 $ 2,890 $ 3,417 $ 7,677 $ 4,045 $ 1,023 $ 26,530 Charge-offs (39 ) (457 ) (114 ) — (208 ) (43 ) (298 ) (1,159 ) Recoveries 67 664 410 — 367 229 145 1,882 Provision (634 ) (152 ) (21 ) 592 504 1,183 225 1,697 Ending balance $ 2,341 $ 4,586 $ 3,165 $ 4,009 $ 8,340 $ 5,414 $ 1,095 $ 28,950 Ending balance, individually evaluated for impairment $ 447 $ 908 $ 33 $ 814 $ 56 $ 889 $ 95 $ 3,242 Ending balance, collectively evaluated for impairment $ 1,894 $ 3,678 $ 3,132 $ 3,195 $ 8,284 $ 4,525 $ 1,000 $ 25,708 Loans: Ending balance $ 80,434 $ 203,150 $ 196,925 $ 207,412 $ 933,441 $ 668,234 $ 81,103 $ 2,370,699 Ending balance, individually evaluated for impairment $ 5,052 $ 2,405 $ 690 $ 8,111 $ 5,540 $ 8,313 $ 95 $ 30,206 Ending balance, collectively evaluated for impairment $ 75,382 $ 200,745 $ 196,235 $ 199,301 $ 927,901 $ 659,921 $ 81,008 $ 2,340,493 The following table presents the credit quality indicators by type of loans in each category as of June 30, 2018 and December 31, 2017 , respectively (amounts in thousands): Agricultural Commercial and Financial Real Estate: Construction, 1 to 4 family residential Real Estate: Construction, land development and commercial June 30, 2018 Grade: Excellent $ 3,493 $ 2,467 $ — $ 398 Good 13,250 50,563 9,802 21,057 Satisfactory 40,896 119,579 41,096 42,916 Monitor 17,055 33,179 16,277 45,800 Special Mention 1,091 8,721 1,743 4,203 Substandard 5,386 5,184 — 1,078 Total $ 81,171 $ 219,693 $ 68,918 $ 115,452 Real Estate: Mortgage, farmland Real Estate: Mortgage, 1 to 4 family first liens Real Estate: Mortgage, 1 to 4 family junior liens Real Estate: Mortgage, multi- family June 30, 2018 Grade: Excellent $ 3,780 $ 2,407 $ 529 $ 22,575 Good 50,146 32,860 4,147 72,219 Satisfactory 119,995 715,151 134,934 172,536 Monitor 38,152 80,797 4,715 44,581 Special Mention 4,551 10,255 1,667 — Substandard 10,500 21,348 2,026 6,333 Total $ 227,124 $ 862,818 $ 148,018 $ 318,244 Real Estate: Mortgage, commercial Loans to individuals Obligations of state and political subdivisions Total June 30, 2018 Grade: Excellent $ 35,486 $ — $ 8,457 $ 79,592 Good 97,498 119 15,977 367,638 Satisfactory 184,328 25,551 26,058 1,623,040 Monitor 54,361 620 3,473 339,010 Special Mention 6,463 163 — 38,857 Substandard 2,726 154 — 54,735 Total $ 380,862 $ 26,607 $ 53,965 $ 2,502,872 Agricultural Commercial and Financial Real Estate: Construction, 1 to 4 family residential Real Estate: Construction, land development and commercial December 31, 2017 Grade: Excellent $ 2,585 $ 10,264 $ — $ 2,548 Good 15,755 51,620 4,710 27,296 Satisfactory 40,886 116,375 47,995 35,749 Monitor 17,009 29,392 15,188 39,760 Special Mention 6,898 5,576 1,845 3,358 Substandard 5,447 5,405 — 884 Total $ 88,580 $ 218,632 $ 69,738 $ 109,595 Real Estate: Mortgage, farmland Real Estate: Mortgage, 1 to 4 family first liens Real Estate: Mortgage, 1 to 4 family junior liens Real Estate: Mortgage, multi- family December 31, 2017 Grade: Excellent $ 4,751 $ 2,392 $ 489 $ 16,564 Good 54,409 30,094 4,527 75,768 Satisfactory 109,724 689,645 130,451 195,652 Monitor 32,655 76,766 4,881 42,373 Special Mention 5,306 12,072 1,834 — Substandard 8,441 20,622 2,018 6,453 Total $ 215,286 $ 831,591 $ 144,200 $ 336,810 Real Estate: Mortgage, commercial Loans to individuals Obligations of state and political subdivisions Total December 31, 2017 Grade: Excellent $ 30,355 $ 1 $ 8,794 $ 78,743 Good 98,434 118 30,607 393,338 Satisfactory 179,417 25,445 14,693 1,586,032 Monitor 43,786 500 3,532 305,842 Special Mention 6,303 182 — 43,374 Substandard 2,901 171 — 52,342 Total $ 361,196 $ 26,417 $ 57,626 $ 2,459,671 The below are descriptions of the credit quality indicators: Excellent – Excellent rated loans are prime quality loans covered by highly liquid collateral with generous margins or supported by superior current financial conditions reflecting substantial net worth, relative to total credit extended, and based on assets of a stable and non-speculative nature whose values can be readily verified. Identified repayment source or cash flow is abundant and assured. Good – Good rated loans are adequately secured by readily marketable collateral or good financial condition characterized by liquidity, flexibility and sound net worth. Loans are supported by sound primary and secondary payment sources and timely and accurate financial information. Satisfactory – Satisfactory rated loans are loans to borrowers of average financial means not especially vulnerable to changes in economic or other circumstances, where the major support for the extension is sufficient collateral of a marketable nature, and the primary source of repayment is seen to be clear and adequate. Monitor – Monitor rated loans are identified by management as warranting special attention for a variety of reasons that may bear on ultimate collectability. This may be due to adverse trends, a particular industry, loan structure, or repayment that is dependent on projections, or a one-time occurrence. Special Mention – Special mention rated loans are supported by a marginal payment capacity and are marginally protected by collateral. There are identified weaknesses that if not monitored and corrected may adversely affect the Company’s credit position. A special mention credit would typically have a weakness in one of the general categories (cash flow, collateral position or payment history) but not in all categories. Substandard – Substandard loans are not adequately supported by the paying capacity of the borrower and may be inadequately collateralized. These loans have a well-defined weakness or weaknesses. For these loans, it is more probable than not that the Company could sustain some loss if the deficiency(ies) is not corrected. Past due loans as of June 30, 2018 and December 31, 2017 were as follows: 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Receivable Accruing Loans Past Due 90 Days or More (Amounts In Thousands) June 30, 2018 Agricultural $ 1,003 $ — $ 195 $ 1,198 $ 79,973 $ 81,171 $ — Commercial and financial 484 860 64 1,408 218,285 219,693 — Real estate: Construction, 1 to 4 family residential 344 362 — 706 68,212 68,918 — Construction, land development and commercial 4,295 59 — 4,354 111,098 115,452 — Mortgage, farmland 242 — 516 758 226,366 227,124 516 Mortgage, 1 to 4 family first liens 1,087 1,227 2,930 5,244 857,574 862,818 430 Mortgage, 1 to 4 family junior liens 66 25 54 145 147,873 148,018 54 Mortgage, multi-family 665 — 28 693 317,551 318,244 — Mortgage, commercial 1,875 351 144 2,370 378,492 380,862 — Loans to individuals 101 98 — 199 26,408 26,607 — Obligations of state and political subdivisions — — — — 53,965 53,965 — $ 10,162 $ 2,982 $ 3,931 $ 17,075 $ 2,485,797 $ 2,502,872 $ 1,000 December 31, 2017 Agricultural $ 324 $ — $ 269 $ 593 $ 87,987 $ 88,580 $ — Commercial and financial 447 20 93 560 218,072 218,632 — Real estate: Construction, 1 to 4 family residential — — — — 69,738 69,738 — Construction, land development and commercial 246 — — 246 $ 109,349 109,595 — Mortgage, farmland 269 — — 269 215,017 215,286 — Mortgage, 1 to 4 family first liens 5,143 1,750 2,939 9,832 $ 821,759 831,591 971 Mortgage, 1 to 4 family junior liens 579 116 — 695 143,505 144,200 — Mortgage, multi-family — — — — $ 336,810 336,810 — Mortgage, commercial 307 178 16 501 360,695 361,196 — Loans to individuals 206 55 6 267 $ 26,150 26,417 — Obligations of state and political subdivisions — — — — 57,626 57,626 — $ 7,521 $ 2,119 $ 3,323 $ 12,963 $ 2,446,708 $ 2,459,671 $ 971 The Company does not have a material amount of loans that are past due less than 90 days where there are serious doubts as to the ability of the borrowers to comply with the loan repayment terms. Certain impaired loan information by loan type at June 30, 2018 and December 31, 2017 , was as follows: June 30, 2018 December 31, 2017 Non-accrual loans (1) Accruing loans past due 90 days or more TDR loans Non- accrual loans (1) Accruing loans past due 90 days or more TDR loans (Amounts In Thousands) (Amounts In Thousands) Agricultural $ 1,483 $ — $ 90 $ 1,651 $ — $ 2,309 Commercial and financial 497 — 1,974 825 — 1,943 Real estate: Construction, 1 to 4 family residential — — — — — — Construction, land development and commercial — — 333 — — 339 Mortgage, farmland 1,174 516 4,541 1,391 — 1,451 Mortgage, 1 to 4 family first liens 4,645 430 1,940 4,407 971 1,357 Mortgage, 1 to 4 family junior liens — 54 25 7 — 25 Mortgage, multi-family 183 — — 218 — — Mortgage, commercial 652 — 1,023 597 — 1,046 $ 8,634 $ 1,000 $ 9,926 $ 9,096 $ 971 $ 8,470 (1) There were $3.31 million and $3.62 million of TDR loans included within nonaccrual loans as of June 30, 2018 and December 31, 2017 , respectively. Loans 90 days or more past due that are still accruing interest increased $0.29 million from December 31, 2017 to June 30, 2018 due to an increase in the average accruing balance of loans past due greater than 90 days. As of June 30, 2018 there were 7 accruing loans past due 90 days or more. The average accruing loans past due as of June 30, 2018 are $0.14 million . There were 8 accruing loans past due 90 days or more as of December 31, 2017 and the average loan balance was $0.12 million . The accruing loans past due 90 days or more balances are believed to be adequately collateralized and the Company expects to collect all principal and interest as contractually due under these loans. The Company may modify the terms of a loan to maximize the collection of amounts due. Such a modification is considered a troubled debt restructuring (“TDR”). In most cases, the modification is either a reduction in interest rate, conversion to interest only payments or an extension of the maturity date. The borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term, so a concessionary modification is granted to the borrower that would otherwise not be considered. TDR loans accrue interest as long as the borrower complies with the revised terms and conditions and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles. Below is a summary of information for TDR loans as of June 30, 2018 and December 31, 2017 : June 30, 2018 December 31, 2017 Number of contracts Recorded investment Commitments outstanding Number of contracts Recorded investment Commitments outstanding (Amounts In Thousands) (Amounts In Thousands) Agricultural 5 $ 1,369 $ 1,002 9 $ 3,628 $ 321 Commercial and financial 13 2,318 78 14 2,575 169 Real estate: Construction, 1 to 4 family residential — — — — — 16 Construction, land development and commercial 2 333 — 2 339 — Mortgage, farmland 8 5,641 — 7 2,761 — Mortgage, 1 to 4 family first liens 18 2,019 — 13 1,442 — Mortgage, 1 to 4 family junior liens 1 25 — 1 25 24 Mortgage, multi-family — — — — — — Mortgage, commercial 9 1,532 — 8 1,324 — Loans to individuals — — — — — — 56 $ 13,237 $ 1,080 54 $ 12,094 $ 530 The following is a summary of TDR loans that were modified during the three and six months ended June 30, 2018 : Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Number of contracts Pre-modification recorded investment Post-modification recorded investment Number of contracts Pre-modification recorded investment Post-modification recorded investment (Amounts In Thousands) (Amounts In Thousands) Agricultural — $ — $ — — $ — $ — Commercial and financial 2 461 461 2 461 461 Real estate: Construction, 1 to 4 family residential — — — — — — Construction, land development and commercial — — — — — — Mortgage, farmland 1 3,644 3,644 2 4,944 4,944 Mortgage, 1 to 4 family first lien — — — 6 627 627 Mortgage, 1 to 4 family junior liens — — — — — — Mortgage, multi-family — — — — — — Mortgage, commercial — — — 1 274 274 3 $ 4,105 $ 4,105 11 $ 6,306 $ 6,306 The Company had commitments to lend $1.08 million in additional borrowings to restructured loan customers as of June 30, 2018 . The Company had commitments to lend $0.53 million in additional borrowings to restructured loan customers as of December 31, 2017 . These commitments were in the normal course of business. The additional borrowings were not used to facilitate payments on these loans. There was one TDR loan that was in payment default (defined as past due 90 days or more) totaling $0.52 million during the period ended June 30, 2018 and none for the year ended December 31, 2017 . Information regarding impaired loans as of and for the three and six months ended June 30, 2018 is as follows: June 30, 2018 Three Months Ended Six Months Ended Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: (Amounts In Thousands) Agricultural $ 3,529 $ 3,977 $ — $ 2,601 $ 12 $ 2,674 $ 25 Commercial and financial 2,110 2,809 — 2,266 20 2,363 42 Real estate: Construction, 1 to 4 family residential 111 148 — 112 1 113 3 Construction, land development and commercial 333 350 — 334 3 336 7 Mortgage, farmland 3,760 4,174 — 3,687 30 3,141 45 Mortgage, 1 to 4 family first liens 5,676 7,158 — 5,754 16 5,801 31 Mortgage, 1 to 4 family junior liens — 258 — — — — — Mortgage, multi-family 183 322 — 185 — 187 — Mortgage, commercial 1,599 2,337 — 1,627 11 1,509 22 Loans to individuals — 14 — — — — — $ 17,301 $ 21,547 $ — $ 16,566 $ 93 $ 16,124 $ 175 With an allowance recorded: Agricultural $ 189 $ 189 $ 189 $ 194 $ 3 $ 95 $ 3 Commercial and financial 1,414 1,512 706 1,446 17 1,572 39 Real estate: Construction, 1 to 4 family residential — — — — — — — Construction, land development and commercial 498 498 36 498 6 501 11 Mortgage, farmland 516 516 13 525 6 525 12 Mortgage, 1 to 4 family first liens 1,226 1,288 68 1,231 11 1,246 22 Mortgage, 1 to 4 family junior liens 78 98 3 88 1 89 2 Mortgage, multi-family 6,099 6,099 442 6,134 69 6,139 138 Mortgage, commercial 77 77 1 77 1 78 2 Loans to individuals 60 60 60 62 2 71 4 $ 10,157 $ 10,337 $ 1,518 $ 10,255 $ 116 $ 10,316 $ 233 Total: Agricultural $ 3,718 $ 4,166 $ 189 $ 2,795 $ 15 $ 2,769 $ 28 Commercial and financial 3,524 4,321 706 3,712 37 3,935 81 Real estate: Construction, 1 to 4 family residential 111 148 — 112 1 113 3 Construction, land development and commercial 831 848 36 832 9 837 18 Mortgage, farmland 4,276 4,690 13 4,212 36 3,666 57 Mortgage, 1 to 4 family first liens 6,902 8,446 68 6,985 27 7,047 53 Mortgage, 1 to 4 family junior liens 78 356 3 88 1 89 2 Mortgage, multi-family 6,282 6,421 442 6,319 69 6,326 138 Mortgage, commercial 1,676 2,414 1 1,704 12 1,587 24 Loans to individuals 60 74 60 62 2 71 4 $ 27,458 $ 31,884 $ 1,518 $ 26,821 $ 209 $ 26,440 $ 408 Information regarding impaired loans as of December 31, 2017 is as follows: Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: (Amounts In Thousands) Agricultural $ 1,822 $ 2,193 $ — Commercial and financial 1,725 2,487 — Real estate: Construction, 1 to 4 family residential 114 150 — Construction, land development and commercial 338 371 — Mortgage, farmland 2,523 2,902 — Mortgage, 1 to 4 family first liens 6,045 7,507 — Mortgage, 1 to 4 family junior liens 7 482 — Mortgage, multi-family 218 355 — Mortgage, commercial 1,564 2,274 — Loans to individuals — 14 — $ 14,356 $ 18,735 $ — With an allowance recorded: Agricultural $ 3,094 $ 3,149 $ 133 Commercial and financial 1,043 1,043 1,018 Real estate: Construction, 1 to 4 family residential — — — Construction, land development and commercial 505 505 39 Mortgage, farmland 5,439 5,439 238 Mortgage, 1 to 4 family first liens 577 593 63 Mortgage, 1 to 4 family junior liens 25 25 3 Mortgage, multi-family 6,179 6,179 480 Mortgage, commercial 79 79 2 Loans to individuals 190 190 190 $ 17,131 $ 17,202 $ 2,166 Total: Agricultural $ 4,916 $ 5,342 $ 133 Commercial and financial 2,768 3,530 1,018 Real estate: Construction, 1 to 4 family residential 114 150 — Construction, land development and commercial 843 876 39 Mortgage, farmland 7,962 8,341 238 Mortgage, 1 to 4 family first liens 6,622 8,100 63 Mortgage, 1 to 4 family junior liens 32 507 3 Mortgage, multi-family 6,397 6,534 480 Mortgage, commercial 1,643 2,353 2 Loans to individuals 190 204 190 $ 31,487 $ 35,937 $ 2,166 Impaired loans decreased $4.03 million from December 31, 2017 to June 30, 2018 . Impaired loans include any loan that has been placed on nonaccrual status, accruing loans past due 90 days or more and TDR loans. Impaired loans also include loans that, based on management’s evaluation of current information and events, the Company expects to be unable to collect in full according to the contractual terms of the original loan agreement. Impaired loans were 1.10% of loans held for investment as of June 30, 2018 and 1.28% as of December 31, 2017 . The decrease in impaired loans is due mainly to a decrease in nonaccrual loans of $0.46 million , a decrease of $6.97 million in relationships with a specific allowance for losses, and is offset by a $0.29 million increase in 90 days or more accruing loans, an increase in impaired loans without a specific allowance for losses of $2.95 million and an increase in TDR loans of $1.14 million from December 31, 2017 to June 30, 2018 . The Company regularly reviews a substantial portion of the loans in the portfolio and assesses whether the loans are impaired in accordance with ASC 310. If the loans are impaired, the Company determines if a specific allowance is appropriate. In addition, the Company's management also reviews and, where determined necessary, provides allowances for particular loans based upon (1) reviews of specific borrowers and (2) management’s assessment of areas that management considers are of higher credit risk, including loans that have been restructured. Loans that are determined not to be impaired and for which there are no specific allowances are classified into one or more risk categories. Based upon the risk category assigned, the Company allocates a percentage, as determined by management, for a required allowance needed. The determination of the appropriate percentage begins with historical loss experience factors, which are then adjusted for levels and trends in past due loans, levels and trends in charged-off and recovered loans, trends in volume growth, trends in problem and watch loans, trends in restructured loans, local economic trends and conditions, industry and other conditions, and effects of changing interest rates. Specific allowances for losses on impaired loans are established if the loan balances exceed the net present value of the relevant future cash flows or the fair value of the relevant collateral based on updated appraisals and/or updated collateral analysis for the properties if the loan is collateral dependent. The Company may recognize a charge off or record a specific allowance related to an impaired loan if there is a collateral shortfall or it is unlikely the borrower can make all principal and interest payments as contractually due. For loans that are collateral dependent, losses are evaluated based on the portion of a loan that exceeds the fair market value of the collateral. In general, this is the amount that the carrying value of the loan exceeds the related appraised value less estimated costs to sell the collateral. Generally, it is the Company’s policy not to rely on appraisals that are older than one year prior to the date the impairment is being measured. The most recent appraisal values may be adjusted if, in the Company’s judgment, experience and other market data indicate that the property’s value, use, condition, exit market or other variable affecting its value may have changed since the appraisal was performed, consistent with the December 2006 joint interagency guidance on the allowance for loan losses. The charge off or loss adjustment supported by an appraisal is considered the minimum charge off. Any adjustments made to the appraised value are to provide an additional charge off or specific reserve based on the applicable facts and circumstances. In instances where there is an estimated decline in value, a specific reserve may be provided or a charge off taken pending confirmation of the amount of the loss from an updated appraisal. Upon receipt of the new appraisals, an additional specific reserve may be provided or charge off taken based on the appraised value of the collateral. On average, appraisals are obtained within one month of order. |