TROUBLED DEBT RESTRUCTURINGS

3 Months Ended

Mar. 31, 2013

Troubled Debt Restructuring, Debtor, Current Period [Abstract]

Troubled Debt Restructuring [Text Block]

NOTE 7 TROUBLED DEBT RESTRUCTURINGS

The following table summarizes information relative to loan modifications determined to be troubled debt restructurings during the three months ended March 31, 2013 and 2012.

There have been no financing receivables modified as troubled debt restructurings during the three months ended March 31, 2013.

			Pre-Modification		Post-Modification
(Dollars amounts in thousands)			Outstanding		Outstanding
	Number		Recorded		Recorded
Three months ended March 31, 2012	Of TDRs		Investment		Investment
Commercial operating		1	$	31	$	15
Commercial real estate, 1-4 family		0		0		0
Commercial real estate, other		1		2,148		2,128
Total		2	$	2,179	$	2,143

A modification of a loan constitutes a troubled debt restructuring when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Corporation offers various types of concessions when modifying a loan. Loan terms that may be modified due to a borrower’s financial situation include, but are not limited to, a reduction in the stated interest rate, a reduction in the face amount of the debt, a reduction of the accrued interest, temporary interest-only payments, or re-aging, extensions, deferrals, renewals and rewrites. In mitigation, additional collateral, a co-borrower or a guarantor may be requested.

Loans modified in a TDR may already be on nonaccrual status and partial charge-offs may have in some cases been taken against the outstanding loan balance. The allowance for impaired loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent or on the present value of expected future cash flows, discounted at the loan’s original effective interest rate. Management exercises significant judgment in developing these determinations. Restructured loans are subject to periodic credit reviews to determine the necessity and adequacy of a specific loan loss allowance based on the collectability of the recorded investment in the restructured loan.

No loans were modified during the first quarter of 2013. During the first quarter of 2012, the Corporation restructured two loans with a recorded investment of $2,143,000. Loan modifications consisted of interest rate reductions and no modifications resulted in the reduction of the recorded investment in the associated loan balances. These loans have performed as agreed and continue to pay down pursuant to the terms of their modifications.

There have been no financing receivables modified as troubled debt restructurings within the previous twelve months that have subsequently defaulted during the three months ended March 31, 2013.