Atlantic Union Bankshares Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Loans And Allowance For Loan Losses

Loans And Allowance For Loan Losses

6 Months Ended

Jun. 30, 2011

4.	LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of unearned income, and consist of the following at June 30, 2011 and December 31, 2010 (dollars in thousands):


	June		December
	2011		2010
Commercial:
Commercial Construction	$	194,171	$	205,795
Commercial Real Estate		831,890		758,034
Other Commercial		951,914		975,830

Total		1,977,975		1,939,659
Consumer:
Mortgages		219,639		212,228
Consumer Construction		17,250		15,615
Indirect auto		169,526		180,778
Indirect marine		43,055		46,383
HELOCs		275,279		273,025
Credit Card		17,334		19,308
Other Consumer		139,511		150,257

Total		881,594		897,594

Loans, net of unearned income	$	2,859,569	$	2,837,253

The following table shows the Company's class types that were past due, current, and greater than 90 days and still accruing at June 30, 2011 (dollars in thousands):


	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial:
Commercial Construction	$	6,627	$	210	$	4,624	$	11,461	$	182,710	$	194,171	$	626
Commercial Real Estate		4,884		699		4,755		10,338		821,552		831,890		181
Other Commercial		16,705		6,143		20,068		42,916		908,998		951,914		1,093
Consumer:
Mortgages		5,021		1,884		3,673		10,578		209,061		219,639		3,366
Consumer Construction		477		—		—		477		16,773		17,250		—
Indirect Auto		2,133		256		504		2,893		166,633		169,526		504
Indirect Marine		640		—		597		1,237		41,818		43,055		232
HELOCs		1,544		642		2,004		4,190		271,089		275,279		1,083
Credit Card		145		137		217		499		16,835		17,334		217
Other Consumer		3,906		748		2,297		6,951		132,560		139,511		1,772

Total	$	42,082	$	10,719	$	38,739	$	91,540	$	2,768,029	$	2,859,569	$	9,074

The following table shows the Company's class types that are past due, current, and greater than 90 days and still accruing at December 31, 2010 (dollars in thousands):


	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial:
Commercial Construction	$	6,392	$	1,157	$	6,878	$	14,427	$	191,368	$	205,795	$	900
Commercial Real Estate		7,353		2,379		8,493		18,224		739,809		758,034		609
Other Commercial		24,308		3,016		23,566		50,889		924,941		975,830		3,459
Consumer:
Mortgages		6,161		1,944		4,308		12,414		199,815		212,228		4,242
Consumer Construction		377		—		—		377		15,238		15,615		—
Indirect auto		3,472		613		729		4,814		175,964		180,778		729
Indirect marine		920		181		605		1,706		44,677		46,383		481
HELOCs		1,285		371		2,904		4,559		268,466		273,025		1,704
Credit Card		292		90		199		581		18,727		19,308		199
Other Consumer		2,447		624		3,185		6,256		144,001		150,257		3,009

Total	$	53,007	$	10,374	$	50,866	$	114,247	$	2,723,005	$	2,837,253	$	15,332

The following table reflects the Company's class types that are in nonaccrual status as of June 30, 2011 and excludes purchased impaired loans (dollars in thousands):


	2011
Commercial:
Commercial Construction	$	9,886
Commercial Real Estate		7,136
Other Commercial		32,012
Consumer:
Mortgages		1,087
Consumer Construction		214
Indirect Auto		11
Indirect Marine		365
HELOC		1,267
Other Consumer		2,344

Total	$	54,322

Nonaccrual loans totaled $54.3 million and $48.9 at June 30, 2011 and 2010, respectively. The increase was principally related to the residential home builder market. There were no non-accrual loans excluded from impaired loan disclosure in 2011 or 2010. Loans past due 90 days or more and accruing interest totaled $9.1 million and $18.6 million at June 30, 2011 and 2010, respectively.

The following table reflects the Company's class types that are in nonaccrual status as of December 31, 2010 and excludes purchased impaired loans (dollars in thousands):


	2010
Commercial:
Commercial Construction	$	11,410
Commercial Real Estate		9,276
Other Commercial		38,908
Consumer:
Mortgages		261
Consumer Construction		218
Indirect auto		14
Indirect marine		124
HELOC		1,329
Other Consumer		176

Total	$	61,716

The following table shows the Company's class types that are impaired with a related allowance at June 30, 2011 (dollars in thousands):


Class Category	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Commercial Construction	$	10,049	$	11,746	$	1,004	$	10,376	$	134
Commercial Real Estate		12,926		17,286		484		13,089		266
Other Commercial		39,092		43,447		6,964		40,470		556
Consumer Construction		214		249		91		228		—
Indirect Auto		93		352		—		106		3
Indirect Marine		365		414		179		365		—
HELOC		1,267		1,304		908		1,578		—

Total	$	64,006	$	74,798	$	9,630	$	66,212	$	959

The following table shows the Company's class types that are impaired with a related allowance at December 31, 2010 (dollars in thousands):


Class Category	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Commercial Construction	$	18,234	$	18,274	$	3,684	$	18,649	$	970
Commercial Real Estate		10,303		10,348		1,200		9,869		664
Other Commercial		48,678		49,337		5,672		49,157		1,854
Mortgage		66		66		—		105		—
Consumer Construction		218		228		95		228		—
Indirect Auto		14		15		—		17		1
Indirect Marine		124		124		—		124		5
HELOC		1,329		1,330		606		1,330		29
Other Consumer		177		187		—		187		—

Total	$	79,144	$	79,908	$	11,257	$	79,666	$	3,524

The following table shows the Company's class types that are impaired without a related allowance at June 30, 2011 (dollars in thousands):


Class Category	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Commercial Construction	$	45,092	$	55,291	$	—	$	44,822	$	1,015
Commercial Real Estate		25,270		27,694		—		25,983		595
Other Commercial		118,523		137,360		—		124,876		2,499
Mortgage		2,053		2,155		—		2,059		61
Indirect Auto		88		330		—		120		—
HELOC		2,047		2,260		—		2,274		10
Other Consumer		350		618		—		577		—

Total	$	193,423	$	225,708	$	—	$	200,711	$	4,180

The following table shows the Company's class types that are impaired without a related allowance at December 31, 2010 (dollars in thousands):


Class Category	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
Commercial Construction	$	39,184	$	39,271	$	—	$	42,001	$	1,707
Commercial Real Estate		29,522		29,643		—		29,698		1,656
Other Commercial		124,054		124,398		—		143,434		5,082
Mortgage		2,260		2,274		—		2,291		105
Indirect Auto		119		119		—		143		8
HELOC		650		650		—		650		22

Total	$	195,788	$	196,354	$	—	$	218,217	$	8,581

The following table shows the allowance for loan loss activity, portfolio segment types, balances for allowance for credit losses, and loans based on impairment methodology for the quarter ended June 30, 2011. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):


	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	28,956		$	9,488		$	(38	)	$	38,406
Recoveries credited to allowance		338			549			—			887
Loans charged off		(6,881	)		(3,581	)		—			(10,462	)
Provision charged to operations		6,939			3,859			2			10,800

Balance, end of year	$	29,352		$	10,315		$	(36	)	$	39,631

Ending balance: individually evaluated for impairment		9,214			310			—			9,524

Ending balance: collectively evaluated for impairment		20,033			10,005			(36	)		30,002

Ending balance: loans acquired with deteriorated credit quality		105			—			—			105


Total	$	29,352		$	10,315		$	(36	)	$	39,631


Loans:
Ending balance	$	1,977,975		$	881,594		$	—		$	2,859,569

Ending balance: individually evaluated for impairment		240,742			6,477			—			247,219
Ending balance: collectively evaluated for impairment		1,727,023			875,117			—			2,602,140

Ending balance: loans acquired with deteriorated credit quality		10,210			—			—			10,210

Total	$	1,977,975		$	881,594		$	—		$	2,859,569

The following table shows the portfolio segment types, balances for allowance for credit losses, and loans based on impairment methodology for the year ended December 31, 2010.


	Commercial		Consumer		Unallocated			Total
Balance, end of year	$	28,255	$	10,189	$	(38	)	$	38,406

Ending balance: individually evaluated for impairment		10,065		701		—			10,766

Ending balance: collectively evaluated for impairment		17,699		9,488		(38	)		27,149

Ending balance: loans acquired with deteriorated credit quality		491		—		—			491

Total	$	28,255	$	10,189	$	(38	)	$	38,406

Loans:
Ending balance	$	1,939,659	$	897,594	$	—		$	2,837,253

Ending balance: individually evaluated for impairment		259,386		1,547		—			260,933

Ending balance: collectively evaluated for impairment		1,667,473		896,047		—			2,563,520

Ending balance: loans acquired with deteriorated credit quality		12,800		—		—			12,800

Total	$	1,939,659	$	897,594	$	—		$	2,837,253

Activity in the allowance for loan losses for the six months ended June 30, 2010 is summarized below (dollars in thousands):


Beginning balance	$	30,484
Recoveries credited to allowance		1,416
Loans charged off		(6,900	)
Provision for loan losses		8,956

Ending balance	$	33,956

The Company uses a risk rating system for commercial loans. They are graded on a scale of 1 through 9. A general description of the characteristics of the risk grades is as follows:

Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;

Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;

Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;

Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan;

Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower's ability to repay;

Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company's credit position;

Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected;

Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; and

Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

Classified loans include loans with risk ratings of 7 and worse. The following table shows classified loans, excluding purchased impaired loans, classified in the commercial portfolios by class with their related risk rating as of June 30, 2011. The risk rating information has been updated through June 30, 2011 (dollars in thousands):


	Commercial Construction		Commercial Real Estate		Other Commercial		Total
Risk rated 7	$	55,924	$	35,982	$	144,803	$	236,709
Risk rated 8		—		—		335		335

Total	$	55,924	$	35,982	$	145,138	$	237,044

The following table shows classified loans, excluding purchased impaired loans, classified in the commercial portfolios by class with their related risk rating as of December 31, 2010. The risk rating information has been updated through December 31, 2010 (dollars in thousands):


	Commercial Construction		Commercial Real Estate		Other Commercial		Total
Risk rated 7	$	55,633	$	41,409	$	168,719	$	265,761
Risk rated 8		—		—		376		376

Total	$	55,633	$	41,409	$	169,095	$	266,137

The following table shows only purchased impaired commercial portfolios by class with their related risk rating as of June 30, 2011. The credit quality indicator information has been updated through June 30, 2011 (dollars in thousands):


	Commercial Construction		Commercial Real Estate		Other Commercial		Total
Risk rated 7	$	—	$	1,342	$	7,958	$	9,300
Risk rated 8		—		—		910		910

Total	$	—	$	1,342	$	8,868	$	10,210

The following table shows only purchased impaired commercial portfolios by class with their related risk rating as of December 31, 2010. The credit quality indicator information has been updated through December 31, 2010 (dollars in thousands):


	Commercial Construction		Commercial Real Estate		Other Commercial		Total

Risk rated 7	$	945	$	375	$	8,164	$	9,484
Risk rated 8		225		535		2,556		3,316

Total	$	1,170	$	910	$	10,720	$	12,800

The following table shows purchased impaired commercial and consumer portfolios by class and their delinquency status. The credit quality indicator information has been updated through June 30, 2011 (dollars in thousands):


	30-89 Days Past Due		Greater Than 90 Days		Current		Total
Commercial:
Commercial Real Estate	$	—	$	—	$	1,342	$	1,342
Other Commercial		—		2,524		6,344		8,868
Consumer:
Indirect auto		10		5		43		58
HELOCs		20		35		857		912
Other Consumer		5		228		—		233

Total	$	35	$	2,792	$	8,586	$	11,413

The current column represents loans that are less than 30 days past due.


	30-89 Days Past Due		Greater Than 90 Days		Current		Total
Commercial:
Commercial Construction	$	—	$	1,170	$	—	$	1,170
Commercial Real Estate		—		910		—		910
Other Commercial		—		9,341		1,379		10,720
Consumer:
Indirect auto		8		10		63		81
HELOCs		20		844		116		980
Other Consumer		81		56		1		137

Total	$	109	$	12,331	$	1,559	$	13,999

The current column represents loans that are less than 30 days past due.

- Definition

The entire disclosure for claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5066-111524

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5162-111524

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3, 4
-Article 5

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5074-111524

+ Details