PREVIOUSLY REPORTED LOAN FRAUD

12 Months Ended

Dec. 31, 2014

Previously Reported Loan Fraud [Text Block]

NOTE R – PREVIOUSLY REPORTED LOAN FRAUD

In 2010, the Bank discovered loan fraud in connection with one of the Bank’s largest loan relationships. The previously reported loan fraud included multiple loans to the same borrower and related entities and had been committed over a period of years.

In September 2010, $10.8 million in loans were charged-off pertaining to this previously reported loan fraud. The Bank is committed to employing every legal remedy available to recover losses arising from this loan fraud. During the years ended December 31, 2014, 2013 and 2012, $0, $0 and $2.6 million of losses were recovered on these loans. Additionally, there were $0, $0 and $47,000 in legal and investigative fees incurred in the years ended December 31, 2014, 2013 and 2012 to determine the extent of the fraud and the potential for any additional losses or recoveries.