LOANS

3 Months Ended

Mar. 31, 2013

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Accounts, Notes, Loans and Financing Receivable Disclosure [Text Block]

4. LOANS

The Bank makes commercial, consumer, and mortgage loans primarily to customers in Monroe County, Michigan, southern and western Wayne County, Michigan, and surrounding areas. Although the Bank has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on the automotive, manufacturing, and real estate development economic sectors.

Loans consist of the following (000s omitted):

	March 31,		December 31,
	2013		2012
Residential real estate loans	$	235,323	$	240,332
Commercial and Construction real estate loans		291,618		301,433
Agriculture and agricultural real estate loans		12,235		12,004
Commercial and industrial loans		61,066		58,194
Loans to individuals for household, family, and other personal expenditures		14,516		15,286
Total loans, gross	$	614,758	$	627,249
Less: Allowance for loan losses		17,899		17,299
	$	596,859	$	609,950

Loans are placed in a nonaccrual status when, in the opinion of Management, the collection of additional interest is doubtful. All loan relationships over $250,000 that are classified by Management as nonperforming as well as selected performing accounts and all renegotiated loans are reviewed for impairment each quarter. Allowances for loans determined to be impaired are included in the allowance for loan losses. All cash received on nonaccrual loans is applied to the principal balance. Nonperforming assets consist of nonaccrual loans, loans 90 days or more past due, restructured loans, nonaccrual investment securities, and other real estate owned. Other real estate owned includes real estate that has been acquired in full or partial satisfaction of loan obligations or upon foreclosure and real estate that the bank has purchased but no longer intends to use for bank premises.

The following table summarizes nonperforming assets (000’s omitted):

	March 31,			December 31,
	2013			2012
Nonaccrual loans	$	31,558		$	31,343
Loans 90 days past due and accruing		314			1
Restructured loans		37,581			38,460
Total nonperforming loans	$	69,453		$	69,804
Other real estate owned		15,118			14,262
Other assets		59			32
Nonperforming investment securities		3,045			3,045
Total nonperforming assets	$	87,675		$	87,143
Nonperforming assets to total assets		6.82	%		6.87	%
Allowance for loan losses to nonperforming loans		25.77	%		24.78	%