Note 6: Loans Held For Investment: Non-Performing Loans Policy (Policies)

12 Months Ended

Sep. 30, 2012

Policies

Non-Performing Loans Policy

For the quarters ended September 30, 2012 and 2011, the Corporation’s average investment in non-performing loans was $29.1 million and $36.6 million, respectively.  The Corporation records payments on non-performing loans utilizing the cash basis or cost recovery method of accounting during the periods when the loans are on non-performing status.  For the quarters ended September 30, 2012 and 2011, interest income of $1.6 million and $1.5 million, respectively, was recognized, based on cash receipts from loan payments on non-performing loans.  Foregone interest income, which would have been recorded had the non-performing loans been current in accordance with their original terms, amounted to $101,000 and $313,000 for the quarters ended September 30, 2012 and 2011, respectively, and was not included in the results of operations.