UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x  Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2011

or

¨  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 33-76644

COMMUNITYCORP

(Exact name of registrant as specified in its charter)

South Carolina	57-1019001
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

1100 N. Jefferies Boulevard

Walterboro, SC 29488

(Address of principal executive offices, including zip code)

(843) 549-2265

(Issuer’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 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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 xNO ¨

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES  x NO o

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer ¨	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES o NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:

233,003 shares of common stock, $5.00 par value, as of July 31, 2011

COMMUNITYCORP

Index

		Page No.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets – June 30, 2011 and December 31, 2010	3
	Condensed Consolidated Statements of Operations - Three and six months ended June 30, 2011 and 2010	4
	Condensed Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income - Six months ended June 30, 2011 and 2010	5
	Condensed Consolidated Statements of Cash Flows - Six months ended June 30, 2011 and 2010	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosure About Market Risk		27
Item 4. Controls and Procedures		27
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings		27
Item 1A. Risk Factors		27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3. Defaults Under Senior Securities		28
Item 4. Removed and Reserved		28
Item 5. Other Information		28
Item 6. Exhibits		28

COMMUNITYCORP

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2011			2010
	(Unaudited)			(Audited)
Assets:
Cash and cash equivalents:
Cash and due from banks	$	3,748,668		$	4,206,974
Interest bearing deposits		12,900,487			9,966,826
Federal funds sold		1,775,000			2,004,000
Total cash and cash equivalents		18,424,155			16,177,800
Time deposits with other banks		750,000			1,000,000
Investment securities:
Securities available-for-sale		31,273,755			26,955,350
Securities held-to-maturity (estimated fair value of $309,287 in 2011 and $309,023 in 2010)		299,903			299,885
Nonmarketable equity securities		292,200			302,300
Total investment securities		31,865,858			27,557,535
Loans receivable		100,357,304			105,297,684
Less allowance for loan losses		(1,913,210	)		(2,019,497	)
Loans receivable, net		98,444,094			103,278,187
Premises and equipment, net		2,824,224			2,903,212
Accrued interest receivable		799,733			785,859
Other real estate owned		2,985,528			2,764,189
Other assets		953,947			1,361,893
Total assets	$	157,047,539		$	155,828,675
Liabilities:
Deposits:
Noninterest-bearing transaction accounts	$	12,673,102		$	14,077,860
Interest-bearing transaction accounts		21,931,962			21,295,198
Money market savings accounts		4,411,096			4,116,167
Savings		15,693,014			14,452,567
Time deposits $100,000 and over		46,465,066			46,142,153
Other time deposits		37,016,957			37,499,876
Total deposits		138,191,197			137,583,821
Accrued interest payable		354,301			451,331
Other liabilities		154,896			154,686
Total liabilities		138,700,394			138,189,838
Shareholders’ Equity:
Preferred stock, $5 par value, 3,000,000 shares authorized and unissued
Common stock, $5 par value, 3,000,000 shares authorized; 300,000 shares issued		1,500,000			1,500,000
Capital surplus		1,737,924			1,737,924
Retained earnings		19,036,777			18,782,807
Accumulated other comprehensive income (loss)		389,586			(64,752	)
Treasury Stock (66,997 shares at cost)		(4,317,142	)		(4,317,142	)
Total shareholders’ equity		18,347,145			17,638,837
Total liabilities and shareholders’ equity	$	157,047,539		$	155,828,675

See notes to condensed consolidated financial statements.

3

COMMUNITYCORP

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Interest income:
Loans, including fees	$	1,574,644	$	1,685,719		$	3,138,627	$	3,521,176
Securities		212,624		199,274			410,532		413,857
Other interest income		10,106		23,725			20,909		36,583
Total		1,797,374		1,908,718			3,570,068		3,971,616
Interest expense:
Deposit accounts		376,233		559,978			780,820		1,165,237
Other interest expense		-		-			-		1
Total		376,233		559,978			780,820		1,165,238
Net interest income		1,421,141		1,348,740			2,789,248		2,806,378
Provision for loan losses		313,000		846,000			538,000		1,211,000
Net interest income after provision for loan losses		1,108,141		502,740			2,251,248		1,595,378
Noninterest income:
Service charges		102,076		111,161			205,720		210,473
Other income		32,126		29,083			64,432		70,524
Total		134,202		140,244			270,152		280,997
Noninterest expenses:
Salaries and benefits		484,380		516,696			982,578		1,010,799
Net occupancy expense		81,274		62,314			146,262		125,245
Equipment expense		91,448		87,612			182,228		180,993
Other operating expenses		325,367		310,292			740,061		613,163
Total		982,469		976,914			2,051,129		1,930,200
Income (loss) before taxes		259,874		(333,930	)		470,271		(53,825	)
Income tax provision		66,300		(97,250	)		99,800		(22,250	)
Net income (loss)	$	193,574	$	(236,680	)	$	370,471	$	(31,575	)
Earnings (loss) per share:
Weighted average common shares outstanding		233,003		233,033			233,003		233,504
Net income (loss) per common share	$	0.83	$	(1.02	)	$	1.59	$	(0.14	)

See notes to condensed consolidated financial statements.

4

COMMUNITYCORP

Condensed Consolidated Statement of Shareholders’ Equity and Comprehensive Income

For The Six Months Ended June 30, 2011 and 2010

(Unaudited)

							Accumulated
							Other
							Comprehensive
	Common stock				Capital		Income			Retained			Treasury
	Shares		Amount		Surplus		(Loss)			Earnings			Stock			Total
Balance, December 31, 2010		300,000	$	1,500,000	$	1,737,924	$	(64,752	)	$	18,782,807		$	(4,317,142	)	$	17,638,837
Cash dividends paid ($ .50 per share)											(116,501	)					(116,501	)
Net income for the period											370,471						370,471
Other comprehensive income, net of tax expense of $239,308								454,338									454,338
Comprehensive income																	824,809
Balance, June 30, 2011		300,000	$	1,500,000	$	1,737,924	$	389,586		$	19,036,777		$	(4,317,142	)	$	18,347,145
Balance, December 31, 2009		300,000	$	1,500,000	$	1,737,924	$	286,072		$	18,440,398		$	(4,218,741	)	$	17,745,653
Cash dividends paid ($ .50 per share)											(117,001	)					(117,001	)
Net loss for the period											(31,575	)					(31,575	)
Other comprehensive income, net of tax expense of $53,060								100,737									100,737
Comprehensive income																	69,162
Purchase of treasury stock														(98,401	)		(98,401	)
Balance, June 30, 2010		300,000	$	1,500,000	$	1,737,924	$	386,809		$	18,291,822		$	(4,317,142	)	$	17,599,413

See notes to condensed consolidated financial statements.

5

COMMUNITYCORP

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	June 30,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	370,471		$	(31,575	)
Adjustments to reconcile net income to net cash Provided (used) by operating activities:
Provision for loan losses		538,000			1,211,000
Depreciation expense		112,270			118,895
Loss on sale of other real estate owned		21,432			-
Net premium amortization of investment securities		13,838			32,825
(Increase) decrease in accrued interest receivable		(13,874	)		13,569
Decrease in accrued interest payable		(97,030	)		(117,789	)
Decrease in other assets		168,638			214,112
Increase in other liabilities		210			33,676
Net cash provided by operating activities		1,113,955			1,474,713
Cash flows from investing activities:
Proceeds from maturities of securities available-for-sale		1,844,296			4,854,116
Purchases of securities available-for-sale		(5,482,911	)		(1,599,200	)
Proceeds from maturities of securities held-to-maturity		-			265,000
(Increase) decrease of nonmarketable equity securities		10,100			(100	)
Net decrease in loans to customers		3,758,104			3,474,217
Net decrease in time deposits in other banks		250,000			250,000
Proceeds from sales of other real estate owned		295,218			-
Purchases of premises and equipment		(33,282	)		(24,828	)
Net cash provided by investing activities		641,525			7,219,205
Cash flows from financing activities:
Net increase (decrease) in demand deposits, interest-bearing transaction accounts and savings accounts		767,382			(2,317,817	)
Net decrease  in time deposits		(160,006	)		(1,088,673	)
Cash dividends paid		(116,501	)		(117,001	)
Purchase of treasury stock		-			(98,401	)
Net cash provided (used) by financing activities		490,875			(3,621,892	)
Net increase in cash and cash equivalents		2,246,355			5,072,026
Cash and cash equivalents, beginning of period		16,177,800			17,694,266
Cash and cash equivalents, end of period	$	18,424,155		$	22,766,292
Cash paid during the period for:
Income taxes	$	50,000		$	-
Interest	$	877,850		$	1,283,027
Supplemental noncash investing and financing activities
Foreclosures on loans	$	537,989		$	-
Net change in valuation allowance - available-for-sale	$	454,338		$	100,737

See notes to condensed consolidated financial statements.

6

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in accordance with the requirements for interim financial statements and, accordingly, they are condensed and omit disclosures, which would substantially duplicate those contained in the most recent annual report to shareholders.  The financial statements as of June 30, 2011 and for the interim periods ended June 30, 2011 and 2010 are unaudited and, in our opinion, include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation.  The results of operations for the six months ended June 30, 2011 are not necessarily indicative of the results which may be expected for the entire calendar year.  The financial information as of December 31, 2010 has been derived from the audited financial statements as of that date.  For further information, refer to the financial statements and the notes included in Communitycorp’s 2010 Annual Report.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting, and / or disclosure of financial information by the Company.

In July 2010, the Receivables topic of the Accounting Standards Codification (“ASC”) was amended by Accounting Standards Update (“ASU”) 2010-20 to require expanded disclosures related to a company’s allowance for credit losses and the credit quality of its financing receivables. The amendments require the allowance disclosures to be provided on a disaggregated basis.  The Company is required to include these disclosures in its interim and annual financial statements.  See Note. 6.

Disclosures about Troubled Debt Restructurings (“TDRs”) required by ASU 2010-20 were deferred by the Financial Accounting Standards Board (“FASB”) in ASU 2011-01 issued in January 2011. In April 2011 the FASB issued ASU 2011-02 to assist creditors with their determination of when a restructuring is a TDR.   The determination is based on whether the restructuring constitutes a concession and whether the debtor is experiencing financial difficulties as both events must be present.

Disclosures related to TDRs under ASU 2010-20 will be effective for reporting periods beginning after June 15, 2011.

In April 2011, the criteria used to determine effective control of transferred assets in the Transfers and Servicing topic of the ASC was amended by ASU 2011-03.  The requirement for the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms and the collateral maintenance implementation guidance related to that criterion were removed from the assessment of effective control.  The other criteria to assess effective control were not changed.  The amendments are effective for the Company beginning January 1, 2012 but are not expected to have a material effect on the financial statements.

ASU 2011-04 was issued in May 2011 to amend the Fair Value Measurement topic of the ASC by clarifying the application of existing fair value measurement and disclosure requirements and by changing particular principles or requirements for measuring fair value or for disclosing information about fair value measurements.  The amendments will be effective for the Company beginning January 1, 2012 but are not expected to have a material effect on the financial statements.

The Comprehensive Income topic of the ASC was amended in June 2011.  The amendment eliminates the option to present other comprehensive income as a part of the statement of changes in stockholders’ equity.  The amendment requires consecutive presentation of the statement of net income and other comprehensive income and requires an entity to present reclassification adjustments from other comprehensive income to net income on the face of the financial statements.  The amendments will be applicable to the Company on January 1, 2012 and will be applied retrospectively.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

NOTE 3 - RECLASSIFICATIONS

Certain captions and amounts in the financial statements in the Company’s Form 10-Q for the quarter ended June 30, 2010 and Form 10-K for the year ended December 31, 2010 were reclassified to conform to the June 30, 2011 presentation.

7

NOTE 4 - COMPREHENSIVE INCOME

Accounting principles generally require that recognized income, expenses, gains, and losses be included in net income.  Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

The components of other comprehensive income and related tax effects are as follows:

			Tax
	Pre-tax		(Expense)			Net-of-tax
	Amount		Benefit			Amount
For the Three Months Ended June 30, 2011:
Unrealized gains on securities available-for-sale	$	573,632	$	(197,903	)	$	375,729
Reclassification adjustment for gains (losses) in net income		-		-			-
Other Comprehensive income	$	573,632	$	(197,903	)	$	375,729
For the Three Months Ended June 30, 2010:
Unrealized gains on securities available-for-sale	$	96,016	$	(33,126	)	$	62,890
Reclassification adjustment for gains (losses) in net income		-		-			-
Other Comprehensive income	$	96,016	$	(33,126	)	$	62,890
For the Six Months Ended June 30, 2011:
Unrealized gains on securities available-for-sale	$	693,646	$	(239,308	)	$	454,338
Reclassification adjustment for gains (losses) in net income		-		-			-
Other Comprehensive income	$	693,646	$	(239,308	)	$	454,338
For the Six Months Ended June 30, 2010:
Unrealized gains on securities available-for-sale	$	153,797	$	(53,060	)	$	100,737
Reclassification adjustment for gains (losses) in net income		-		-			-
Other Comprehensive income	$	153,797	$	(53,060	)	$	100,737

Accumulated other comprehensive income consists of the net unrealized gains and (losses) on securities available-for sale, net of the deferred tax effects.

NOTE 5 - INVESTMENT SECURITIES

Securities Available-for-Sale

The amortized cost and estimated fair values of securities available-for-sale at June 30, 2011 and December 31, 2010 were:

	Amortized		Gross Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
June 30, 2011
U.S. Government agencies	$	16,991,360	$	50,450	$	16,648	$	17,025,162
Mortgage-backed securities		2,981,397		67,448		77		3,048,768
Municipals		10,506,211		505,542		11,928		10,999,825
Other		200,000		-		-		200,000
Total	$	30,678,968	$	623,440	$	28,653	$	31,273,755

	Amortized		Gross Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
December 31, 2010
Government-sponsored enterprises	$	13,891,989	$	11,473	$	312,020	$	13,591,442
Mortgage-backed securities		1,842,249		24,286		15,269		1,851,266
Obligations of state and local governments		11,119,970		247,905		55,233		11,312,642
Other		200,000		-		-		200,000
Total	$	27,054,208	$	283,664	$	382,522	$	26,955,350

8

The following is a summary of maturities of securities available-for-sale as of June 30, 2011.  The amortized cost and estimated fair values are based on the contractual maturity dates.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty.

	Securities
	Available-For-Sale
	Amortized		Estimated
	Cost		Fair Value
Due in one year or less	$	-		-
Due after one year but within five years		1,831,797		1,883,346
Due after five years but within ten years		18,120,927		18,515,613
Due after ten years		7,744,847		7,826,028
		27,697,571		28,224,987
Mortgage-backed securities		2,981,397		3,048,768
Total	$	30,678,968	$	31,273,755

The following table shows gross unrealized losses and fair value, aggregated by investment category, and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2011 and December 31, 2010.

	June 30, 2011				December 31, 2010
	Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses
Less Than 12 Months
Government-sponsored enterprises	$	3,479,060	$	16,648	$	12,379,970	$	312,020
Mortgaged-backed Securities		63,216		77		964,073		15,269
Obligations of state and local governments		-		-		2,151,511		55,233
		3,542,276		16,725		15,495,554		382,522
12 Months or More
Obligations of state and local governments		240,000		11,928		-		-
		240,000		11,928		-		-
Total	$	3,782,276	$	28,653	$	15,495,554	$	382,522

A total of ten available-for-sale securities were in a loss position at June 30, 2011, including one security that had been in a continuous loss position for twelve months or more.  The Company believes, based on industry analyst reports and credit ratings, that the deterioration in value is attributable to changes in market interest rates and not in credit quality and considers these losses temporary.  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 these securities before recovery of their amortized costs.  Management evaluates investment securities in a loss position based on length of impairment, severity of impairment and other factors.

Securities Held-to-Maturity

The amortized cost and estimated fair values of securities held-to-maturity at June 30, 2011 and December 31, 2010 were:

	Amortized		Gross Unrealized				Estimated
	Cost		Gains		Losses		Fair Value
June 30, 2011
Obligations of state and local governments	$	299,903	$	9,384	$	-	$	309,287
December 31, 2010
Obligations of state and local governments	$	299,885	$	9,138	$	-	$	309,023

The following is a summary of maturities of securities held-to-maturity as of June 30, 2011.  The amortized cost and estimated fair values are based on the contractual maturity dates.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty.

9

	Securities
	Held-to-Maturity
	Amortized		Estimated
	Cost		Fair Value
Due after one year but within five years	$	99,903	$	100,651
Due after five years but within ten years		200,000		208,636
Total	$	299,903	$	309,287

NOTE 6 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

Major classifications of loans receivable are summarized as follows:

	June 30,		December 31,
	2011		2010
Real estate – construction	$	13,654,980	$	12,674,197
Real estate – mortgage		73,318,790		76,149,357
Commercial and industrial		8,293,690		11,602,305
Consumer and other		5,089,844		4,871,825
Total gross loans	$	100,357,304	$	105,297,684

The loan portfolio consisted of loans having                                                                           :

	June 30,		December 31,
	2011		2010
Variable rates loans	$	2,018,931	$	1,556,700
Fixed rates		98,338,373		103,740,984
Total gross loans	$	100,357,304	$	105,297,684

A summary of the allowance for loan losses for the six months ended June 30, 2011 and year ended December 31, 2010 is as follows:

	June 30,			December 31,
	2011			2010
Balance, beginning of year	$	2,019,497		$	2,053,340
Provision charged to operations		538,000			1,866,000
Recoveries on loans previously charged-off		6,188			11,932
Loans charged-off		(650,475	)		(1,911,775	)
Balance, end of period	$	1,913,210		$	2,019,497

The following is an analysis of the allowance for loan losses by class of loans for the six months ended June 30, 2011 and the year ended December 31, 2010

June 30, 2011

				Real Estate Loans
										Total
										Real
										Estate						Consumer
(Dollars in Thousands)	Total			Construction			Mortgage			Loans			Commercial			and Other
Beginning Balance	$	2,019		$	807		$	404		$	1,211		$	606		$	202
Provisions		538			412			64			476			50			12
Recoveries		6			-			3			3			-			3
Charge-offs		(650	)		(498	)		(77	)		(575	)		(60	)		(15	)
Ending balance	$	1,913		$	721		$	394		$	1,115		$	596		$	202

10

December 31, 2010

				Real Estate Loans
										Total
										Real
(Dollars in Thousands)										Estate						Consumer
	Total			Construction			Mortgage			Loans			Commercial			And Other
Beginning Balance	$	2,053		$	826		$	413		$	1,239		$	616		$	198
Provisions		1,866			746			373			1,119			560			187
Recoveries		12			-			-			-			4			8
Charge-offs		(1,912	)		(765	)		(382	)		(1,147	)		(574	)		(191	)
Ending balance	$	2,019		$	807		$	404		$	1,211		$	606		$	202

At June 30, 2011 and December 31, 2010 the allocation of the allowance for loan losses and the recorded investment in loans summarized on the basis of the Company’s impairment methodology was as follows:

June 30, 2011

			Real Estate Loans
							Total
							Real
(Dollars in Thousands)							Estate				Consumer
	Total		Construction		Mortgage		Loans		Commercial		and Other
Allowance for Loan Losses
Examined for Impairment
Individually	$	411	$	30	$	35	$	65	$	326	$	20
Collectively		1,502		691		359		1050		270		182
Allowance for Loan Losses	$	1,913	$	721	$	394	$	1,115	$	596	$	202
Total Loans
Examined for Impairment
Individually	$	8,338	$	1,708	$	1,141	$	2,849	$	5,311	$	178
Collectively		92,019		11,947		72,178		84,125		2,982		4,912
Total Loans	$	100,357	$	13,655	$	73,319	$	86,974	$	8,293	$	5,090

December 31, 2010

			Real Estate Loans
							Total
							Real
(Dollars in Thousands)							Estate				Consumer
	Total		Construction		Mortgage		Loans		Commercial		and Other
Allowance for Loan Losses
Examined for Impairment
Individually	$	373	$	296	$	25	$	321	$	40	$	12
Collectively		1,646		511		379		890		566		190
Allowance for Loan Losses	$	2,019	$	807	$	404	$	1,211	$	606	$	202
Total Loans
Examined for Impairment
Individually	$	7,703	$	3,162	$	4,121	$	7,283	$	303	$	117
Collectively		97,595		9,512		72,029		81,541		11,299		4,755
Total Loans	$	105,298		12,674		76,150		88,824		11,602		4,872

The Company identifies impaired loans through its normal internal loan review process.  Loans on the Company’s problem loan watch list are considered potentially impaired loans.  These loans are evaluated in determining whether all outstanding principal and interest are expected to be collected.  Loans are not considered impaired if a minimal delay occurs and all amounts due including accrued interest at the contractual interest rate for the period of delay are expected to be collected.

11

The following summarizes the Company’s impaired loans by class as of June 30, 2011 and December 31, 2010.

June 30, 2011
			Unpaid
(Dollars in Thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
With no related allowance recorded:
Real estate
Construction	$	1,578	$	1,578	$	-
Mortgage		829		865		-
Total real estate loans		2,407		2,443		-
Commercial		3,686		4,486		-
Consumer and other		126		126		-
		6,219		7,055		-
With an allowance recorded:
Real estate
Construction		130		315		30
Mortgage		312		466		35
Total real estate loans		442		781		65
Commercial		1,625		4,080		326
Consumer and other		52		52		20
		2,119		4,913		411
Total
Real estate
Construction		1,708		1,893		30
Mortgage		1,141		1,331		35
Total real estate loans		2,849		3,224		65
Commercial		5,311		8,566		326
Consumer and other		178		178		20
Total	$	8,338	$	11,968	$	411

December 31, 2010
			Unpaid
(Dollars in Thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
With no related allowance recorded:
Real estate
Construction	$	1,326	$	1,294	$	-
Mortgage		4,016		4,196		-
Total real estate loans		5,342		5,490		-
Commercial		218		249		-
Consumer and other		62		61		-
		5,622		5,800		-
With an allowance recorded:
Real estate
Construction		1,836		1,879		296
Mortgage		105		103		25
Total real estate loans		1,941		1,982		321
Commercial		85		741		40
Consumer and other		55		53		12
		2,081		2,776		373

12

			Unpaid
(Dollars in Thousands)	Recorded		Principal		Related
	Investment		Balance		Allowance
Total
Real estate
Construction	$	3,162	$	3,173	$	296
Mortgage		4,121		4,299		25
Total real estate loans		7,283		7,472		321
Commercial		303		990		40
Consumer and other		117		114		12
Total	$	7,703	$	8,576		373

The average recorded investment in impaired loans for the six months and year ended June 30, 2011 and December 31, 2010, was $7,787,247 and $8,512,074, respectively.

Nonaccrual loans were $4,403,484 and $4,805,658 at June 30, 2011 and December 31, 2010, respectively.

Interest income on impaired loans other than nonaccrual loans is recognized on an accrual basis. Interest income on nonaccrual loans is recognized only as collected.  During the six months ended June 30, 2011 and for the year ended December 31, 2010, interest income recognized on nonaccrual loans was $16,913 and $30,674, respectively.  If the nonaccrual loans had been accruing interest at their original contracted rates, related income would have been $147,828 and $275,415 for the six months ended June 30, 2011 and for the year ended December 31, 2010, respectively.

A summary of current, past due and nonaccrual loans as of June 30, 2011 and December 31, 2010 were as follows:

June 30, 2011
	Past Due		Past Due Over 90 days
(Dollars in Thousands)	30-89		And		Non-		Total				Total
	Days		Accruing		Accruing		Past Due		Current		Loans
Real estate
Construction	$	749	$	-	$	2,364	$	3,113	$	10,542	$	13,655
Mortgage		823		-		1,912		2,735		70,584		73,319
Total real estate loans		1,572		-		4,276		5,848		81,126		86,974
Commercial		166		-		68		234		8,059		8,293