Note 8 - Other Real Estate Owned.

6 Months Ended

Jun. 30, 2011

Real Estate Owned [Text Block]

Note  8.  Other Real Estate Owned.

At June 30, 2011, other real estate owned included residential and commercial properties, developed building lots and a partially developed residential subdivision. The Company had no other repossessed assets at June 30, 2011. The following table reflects the changes in other real estate owned during 2011:

									Transfer to
	Balance						Fair Value		Premises and		Balance
	12-31-10		Additions		Sales, net		Adjustments		Equipment		6-30-11
	(In thousands)
Other Real Estate Owned	$	11,616	$	5,145	$	3,769	$	854	$	751	$	11,387

The fair value adjustments made to other real estate owned (“OREO”) were done in order to adjust the carrying values of these properties to their estimated fair market values.  In most cases, the estimated fair market values are derived from an initial appraisal, an updated appraisal or a broker’s price opinion (“BPO”).  In certain instances when a listing agreement is renewed for a lesser amount, management will adjust the recorded estimated fair value of the subject property accordingly.  Additionally, in certain instances when the Company receives an offer to purchase near the end of a quarterly accounting period for less than the current carrying value and the sale does not consummate until the next accounting period, management will adjust the recorded estimated fair value of the subject property accordingly.