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Allowance For Loan Losses
9 Months Ended
Sep. 30, 2011
Allowance For Loan Losses [Abstract] 
Allowance For Loan Losses

NOTE 7 - ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses were as follows for the nine months ended September 30, 2011.

 

Summary of Allowance for Loan Losses
  Three Months Ended  Nine Months Ended 
  September 30 September 30
  2011 2010 2011 2010
Beginning Balance  $      5,917  $      9,783  $      6,850  $      5,783
Loans Charged off            (848)         (2,940)         (2,460)         (7,951)
Recoveries               48             112             464             238
Provision for loan losses               41          2,724             304        11,609
Ending Balance  $      5,158  $      9,679  $      5,158  $      9,679
 

The allowance for loan losses was $5.2 million at September 30, 2011 representing 3.3% of total loans, compared to $6.9 million at December 31, 2010 or 3.74% of total loans and $9.7 million at September 30, 2010 or 4.9% of total loans. The allowance for loan losses to non-performing loans ratio was 49.7% at September 30, 2011 compared to 48.7% at December 31, 2010 and 40.5% at September 30, 2010. At September 30, 2011 we believe that our allowance appropriately considers incurred losses in our loan portfolio.

 

Analysis related to the allowance for credit losses (in thousands) as of September 30, 2011 is as follows:

SEPTEMBER 30, 2011  
      Commercial Comercial Real Estate Other Multi Family Consumer Residential - Prime Residential - Subprime Construction Total
                     
ALLOWANCE FOR CREDIT LOSSES:                  
                 
                     
Beginning Balance                    71            1,790            474            503           3,495            458                 59       6,850
  Charge-Offs                   (80)             (449)           (286)          (263)          (1,056)           (313)               (13)     (2,460)
  Recoveries                      7               228                2            153                31              41                   2          464
  Provision                    66             (374)           (160)          (131)              313            601               (11)          304
Ending Balance                    64            1,195              30            262           2,783            787                 37       5,158
Ending Balance: individually                
evaluated for impairment                       -               246                 -                -              306                 -                    -          552
Ending Balance: collectively                
evaluated for impairment                    64               949              30            262           2,477            787                 37       4,606
                     
FINANCING RECEIVABLES:                
Ending Balance               5,502          55,812            767       14,331         66,135       15,991            1,835   160,373
Ending Balance: individually                
evaluated for impairment               1,797          14,290            454            357           2,582         4,950                    -     24,430
Ending Balance: collectively                
evaluated for impairment               3,705          41,522            313       13,974         63,553       11,041            1,835   135,943

The Company's charge-off policy which meets regulatory minimums has not required any revisions during the third quarter of 2011. Losses on unsecured consumer loans are recognized at or before 120 days past due. Secured consumer loans, including residential real estate, are typically charged-off between 120 and 180 days past due, depending on the collateral type, in compliance with the FFIEC guidelines.  Specific loan reserves are established based on credit and or collateral risks on an individual loan basis.  When the probability for full repayment of a loan is unlikely the Bank will initiate a full charge-off or a partial write down of a loan based upon the status of the loan.   Impaired loans or portions thereof are charged-off when deemed uncollectible.   Loans that have been partially charged-off remain on nonperforming status, regardless of collateral value, until specific borrower performance criteria are met.  Total impaired loans as reported above were $24.4                million as of September 30, 2011 and $27.8 million as of December 31, 2010.  Partial charge-offs associated with the impaired loans totaled $6.3 million as of September 30, 2011 and $7.1 million as of December 31, 2010.