NOTE 4 -LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans

The Company's primary lending activity is the origination of loans secured by real estate. The Company originates one-to-four family mortgage loans, multi-family loans, nonresidential real estate loans, commercial business loans and construction loans. To a lesser extent, we also originate land loans and consumer loans.

The following table summarizes the composition of our total net loans receivable at March 31, 2012 and December 31, 2011:


	March 31, 2012						December 31, 2011
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Real estate loans:
Permanent loans:
One-to-four family	$	45,532			17.4	%	$	44,813			17.0	%
Multi-family		17,218			6.6			16,695			6.3
Nonresidential		98,543			37.7			98,278			37.3
Construction loans:
One-to-four family		18,875			7.2			18,618			7.1
Multi-family		2,977			1.2			2,357			0.9
Nonresidential		7,095			2.7			6,753			2.5
Land loans		24,888			9.5			25,409			9.6
Total real estate loans		215,128			82.3			212,923			80.7

Consumer:
Home equity loans and lines of credit		18,595			7.1			19,722			7.5
Auto loans		468			0.2			429			0.2
Deposit loans		371			0.2			321			0.1
Overdrafts		31			-			77			-
Other		2,359			0.9			1,828			0.7
Total consumer loans		21,824			8.4			22,377			8.5

Commercial loans		24,408			9.3			28,462			10.8

Total loans		261,360			100.0	%		263,762			100.0	%
Allowance for loan losses		(4,314	)					(4,316	)
Net deferred loan costs		121						88
Loans receivable, net	$	257,167					$	259,534

The following table sets forth certain information at March 31, 2012 and December 31, 2011 regarding the dollar amount of loan principal repayments becoming due during the periods indicated. The table does not include any estimate of prepayments which may significantly shorten the average life of loans and may cause our actual repayment experience to differ from that shown below. Demand loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less.

		At March 31, 2012

		One- to		Multi-family and Nonresidential										Total
		Four-Family		Real Estate		Construction		Land		Consumer		Commercial		Loans
	(Dollars in thousands)

Amounts due in:
One year or less		$	11,154	$	19,260	$	26,915	$	7,945	$	12,295	$	12,588	$	90,157
More than one year to three years			9,261		50,910		2,032		13,216		1,536		5,680		82,635
More than three years to five years			11,357		41,551		-		3,252		806		3,309		60,275
More than five years to fifteen years			7,793		4,040		-		475		7,187		2,831		22,326
More than fifteen years			5,967		-		-		-		-		-		5,967
Total		$	45,532	$	115,761	$	28,947	$	24,888	$	21,824	$	24,408	$	261,360


		At December 31, 2011

		One- to		Multi-family and Nonresidential										Total
		Four-Family		Real Estate		Construction		Land		Consumer		Commercial		Loans
		(Dollars in thousands)

Amounts due in:
One year or less		$	9,942	$	12,231	$	25,977	$	14,289	$	11,637	$	17,041	$	91,117
More than one year to three years			10,457		56,586		1,751		7,610		1,645		7,651		85,700
More than three years to five years			11,244		40,319		-		3,032		1,011		3,448		59,054
More than five years to fifteen years			6,675		5,837		-		478		8,084		322		21,396
More than fifteen years			6,495		-		-		-		-		-		6,495
Total		$	44,813	$	114,973	$	27,728	$	25,409	$	22,377	$	28,462	$	263,762

The following tables set forth the dollar amount of all loans at March 31, 2012 that are due after March 31, 2013, and at December 31, 2011 that are due after December 31, 2012, and have either fixed interest rates or floating or adjustable interest rates:

As of March 31, 2012			Floating or
	Fixed Rates		Adjustable Rates		Total
	(Dollars in thousands)
One-to-four family	$	33,456	$	922	$	34,378
Multi-family and nonresidential		87,838		8,663		96,501
Construction		214		1,818		2,032
Land		3,003		13,940		16,943
Consumer		2,938		6,591		9,529
Commercial		10,344		1,476		11,820
Total	$	137,793	$	33,410	$	171,203


As of December 31, 2011			Floating or
	Fixed Rates		Adjustable Rates		Total
	(Dollars in thousands)
One-to-four family	$	33,873	$	998	$	34,871
Multi-family and nonresidential		93,484		9,258		102,742
Construction		213		1,538		1,751
Land		3,045		8,076		11,121
Consumer		3,293		7,446		10,739
Commercial		10,061		1,360		11,421
Total	$	143,969	$	28,676	$	172,645

Our adjustable-rate mortgage loans do not adjust downward below the initial discounted contract rate. When market rates rise the interest rates on these loans may increase based on the contract rate (the index plus the margin) exceeding the initial interest rate floor.

Nonperforming Assets

We consider repossessed assets and loans that are 90 days or more past due to be nonperforming assets. Loans are placed on non-accrual status when, in management's opinion, the borrower is unable to meet payment obligations, which typically occurs when principal and interest payments are 90 days delinquent at which time the accrual of interest ceases and the allowance for any uncollectible accrued interest is established and charged against interest income. Typically, payments received on a non-accrual loan are first applied to the outstanding principal balance. At March 31, 2012 and December 31, 2011, non-accruing loans were $2.6 million and $2.8 million, respectively. Had non-accrual loans performed in accordance with their original contractual terms, the Company would have recognized additional interest income, net of tax, of approximately $77,000 for the first three months of 2012. No interest income was recognized on non-accrual loans on a cash basis during the first three months of 2012 or during 2011.

Other real estate owned and repossessed assets which are acquired through, or in lieu, of foreclosure are held for sale and initially recorded at fair value, less estimated selling cost, when acquired, establishing a new cost basis. Costs incurred after acquisition are generally expensed. Any changes in fair value below the new cost basis of the asset are recorded through a valuation allowance and charged to expense. The valuations of other real estate owned and repossessed asset are subjective in nature and may be adjusted in the future because of changes in market conditions.

The following table provides information with respect to our nonperforming assets at the dates indicated.

Nonperforming Assets	At March 31,			At December 31,
	2012			2011
	(Dollars in thousands)

Non-accrual loans:
One- to four-family	$	1,580		$	2,135
Multi-family and nonresidential		-			-
Construction		292			-
Land		-			-
Consumer		209			254
Commercial		561			399
Total		2,642			2,788

Accruing loans past due 90 days or more:
One- to four-family		-			-
Multi-family and nonresidential		-			-
Construction		-			-
Land		-			-
Consumer		-			-
Commercial		-			-
Total		-			-
Total of non-accrual and 90 days or		2,642			2,788
more past due loans


Real estate owned		1,555			1,391
Other nonperforming assets		-			-
Total nonperforming assets	$	4,197		$	4,179

Total nonperforming loans to total loans		1.01	%		1.06	%
Total nonperforming loans to total assets		0.72	%		0.76	%
Total nonperforming assets to total assets		1.15	%		1.14	%

Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable credit losses in the loan portfolio and represents management's best estimate of known and inherent losses in the loan portfolio, based upon management's evaluation of the portfolio's collectibility. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings. The recommendations for increases or decreases to the allowance are approved by the Asset Quality Review Committee and presented to the Board of Directors.

Our methodology for assessing the appropriateness of the allowance for loan losses consists of: (1) a specific allowance on identified problem loans; and (2) a general valuation allowance on the remainder of the loan portfolio. Management estimates a range of losses and then makes its best estimate of potential credit losses within that range. Although we determine the amount of each element of the allowance separately, the entire allowance for loan losses is available for the entire portfolio.

Specific Allowance Required for Identified Problem Loans. We establish an allowance on certain identified problem loans based on such factors as: (1) the strength of the customer's personal or business cash flows; (2) the availability of other sources of repayment; (3) the amount due or past due; (4) the type and value of collateral; (5) the strength of our collateral position; and (6) the borrower's effort to cure the delinquency.

We also identify loans that may need to be charged-off as a loss by reviewing all delinquent loans, classified loans and other loans for which management may have concerns about collectibility. For individually reviewed loans, the borrower's inability to make payments under the terms of the loan or a shortfall in collateral value would result in our allocating a portion of the allowance to the loan that was impaired.

General Valuation Allowance on the Remainder of the Loan Portfolio. We establish a general allowance for loans that are not currently classified in order to recognize the inherent losses associated with lending activities. This general valuation allowance is determined through two steps. First, we estimate potential losses on the portfolio by analyzing historical losses for each loan category. Second, we look at additional significant factors that, in management's judgment, affect the collectibility of the portfolio as of the evaluation date. These significant factors may include changes in lending policies and procedures; international, national, regional and local economic conditions; changes in the nature and volume of the portfolio; changes in the experience, ability and depth of lending management; changes in the volume of past dues, non-accruals and classified assets; changes in the quality of the loan review system; changes in the value of underlying collateral for collateral dependent loans; concentrations of credit, and other factors.

At March 31, 2012, our allowance for loan losses represented 1.7% of total gross loans and 163.3% of nonperforming loans. At December 31, 2011, our allowance for loan losses represented 1.6% of total gross loans and 154.8% of nonperforming loans. The allowance for loan losses decreased $2,000 at March 31, 2012, as compared to December 31, 2011, due to $238,000 in charge offs during the first quarter of 2012 which were partially offset by $227,000 in allowance provision and $9,000 in recoveries from charged off loans during the first quarter of 2012.

The following table sets forth the breakdown of the allowance for loan losses by loan category at the dates indicated.

	At March 31,								At December 31,
	2012								2011
						% of								% of
			% of			Loans in					% of			Loans in
			Allowance			Category					Allowance			Category
			to Total			to Total					to Total			to Total
	Amount		Allowance			Loans			Amount		Allowance			Loans
	(Dollars in thousands)								(Dollars in thousands)
One-to-four family	$	404		9.4	%		17.4	%	$	476		11.0	%		17.0	%
Multi-family and nonresidential		1,111		25.7			44.3			1,063		24.6			43.6
Construction		400		9.3			11.1			400		9.3			10.5
Land		641		14.9			9.5			614		14.2			9.6
Consumer		252		5.8			8.4			296		6.9			8.5
Commercial		1,506		34.9			9.3			1,467		34.0			10.8
Total allowance for loan losses	$	4,314		100.0	%		100.0	%	$	4,316		100.0	%		100.0	%

Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance for loan losses may be necessary and our results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. Furthermore, while we believe we have established our allowance for loan losses in conformity with accepted accounting principles, there can be no assurance that our regulators, in reviewing our loan portfolio, will not require us to increase our allowance for loan losses. Our regulators may require us to increase our allowance for loan losses based on judgments different from ours. In addition, because future events affecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the factors discussed above. Any material increase in the allowance for loan losses may adversely affect our financial condition and results of operations.

Analysis of Loan Loss Experience

The following table details allowance for loan losses and recorded investment in loans by portfolio segment for the three months ended March 31, 2012 and 2011:

Allowance for Loan Losses and Recorded Investment in Loans
For the Three Months Ended March 31, 2012
(Dollars in thousands)

	One-to-Four			Multi-family/						Consumer
	Family			Nonresidential		Construction		Land		and Other			Commercial			Unallocated		Total

Allowance for loan losses:

Beginning balance	$	476		$	1,063	$	400	$	614	$	296		$	1,467		$	-	$	4,316
Charge offs		(212	)		-		-		-		(11	)		(15	)		-	$	(238	)
Recoveries		-			6		-		-		1			2			-	$	9
Provision (Credit)		140			42		-		27		(34	)		52			-	$	227
Ending balance	$	404		$	1,111	$	400	$	641	$	252		$	1,506		$	-	$	4,314

Ending balance individually evaluated for impairment	$	50		$	-	$	-	$	-	$	-		$	379		$	-	$	429

Ending balance collectively evaluated for impairment	$	354		$	1,111	$	400	$	641	$	252		$	1,127		$	-	$	3,885

Loans:

Ending balance	$	45,532		$	115,761	$	28,947	$	24,888	$	21,824		$	24,408		$	-	$	261,360

Ending balance individually evaluated for impairment	$	907		$	234	$	-	$	-	$	160		$	800		$	-	$	2,101

Ending balance collectively evaluated for impairment	$	44,625		$	115,527	$	28,947	$	24,888	$	21,664		$	23,608		$	-	$	259,259

Allowance for Loan Losses and Recorded Investment in Loans
For the Three Months Ended March 31, 2011
(Dollars in thousands)

	One-to-Four		Multi-family/								Consumer
	Family		Nonresidential			Construction		Land			and Other			Commercial		Unallocated		Total

Allowance for loan losses:

Beginning balance	$	545	$	1,061		$	325	$	730		$	250		$	738	$	-	$	3,649
Charge offs		-		-			-		-			(5	)		-		-		(5	)
Recoveries		-		-			-		-			3			9		-		12
Provision (Credit)		21		(71	)		-		(49	)		2			352		-		255
Ending balance	$	566	$	990		$	325	$	681		$	250		$	1,099	$	-	$	3,911

Ending balance individually evaluated for impairment	$	216	$	-		$	-	$	71		$	-		$	238	$	-	$	525

Ending balance collectively evaluated for impairment	$	350	$	990		$	325	$	610		$	250		$	861	$	-	$	3,386

Loans:

Ending balance	$	44,248	$	94,357		$	29,411	$	25,998		$	22,080		$	26,810	$	-	$	242,904

Ending balance individually evaluated for impairment	$	501	$	249		$	-	$	292		$	160		$	748	$	-	$	1,950

Ending balance collectively evaluated for impairment	$	43,747	$	94,108		$	29,411	$	25,706		$	21,920		$	26,062	$	-	$	240,954

The following table shows credit quality indicators at March 31, 2012 and December 31, 2011:

Credit Quality Indicators as of March 31, 2012
(Dollars in thousands)

	One-to-Four		Multi-family/						Consumer
	Family		Nonresidential		Construction		Land		and Other		Commercial		Total

Corporate Credit Exposures
Credit Risk Profile by Internally Assigned Grade

Grade:
Pass	$	42,568	$	111,552	$	28,090	$	22,142	$	21,470	$	23,208	$	249,030
Special mention		836		1,386		137		167		156		464		3,146
Substandard		2,128		2,823		720		2,579		198		525		8,973
Doubtful		-		-		-		-		-		211		211
Total	$	45,532	$	115,761	$	28,947	$	24,888	$	21,824	$	24,408	$	261,360

Credit Quality Indicators as of December 31, 2011
(Dollars in thousands)

	One-to-Four		Multi-family/						Consumer
	Family		Nonresidential		Construction		Land		and Other		Commercial		Total

Corporate Credit Exposures
Credit Risk Profile by Internally Assigned Grade

Grade:
Pass	$	41,534	$	111,213	$	26,403	$	25,195	$	21,971	$	27,353	$	253,669
Special mention		840		1,398		137		168		163		472		3,178
Substandard		2,439		2,362		1,188		46		243		426		6,704
Doubtful		-		-		-		-		-		211		211
Total	$	44,813	$	114,973	$	27,728	$	25,409	$	22,377	$	28,462	$	263,762

Credit risk by internally assigned grade

Loans assigned a grade of "Pass" range from loans with virtually no risk of default to loans including some or all of the following characteristics: borrower generally generates sufficient but strained cash flows to fund debt service, key ratios are generally slightly worse than peers, earnings may be trending downward, borrower is currently performing as agreed, risk of default is higher than normal but with prospects for improved financial performance, some borrower management team weaknesses may be evident, loans are protected by collateral that can be liquidated, industry outlook may be trending down but is generally acceptable.

Loans assigned a grade of "Special mention" characteristics include, but are not limited to, the following: weakened due to negative trends in the balance sheet and income statement, current cash flow may be insufficient to meet debt service, existence of documentation deficiencies, potential risk of payment default, collateral coverage is minimal, financial information may be inadequate to show the recent condition of the borrower, management of the borrower may not be adequately qualified or have limited experience, turnover in key positions and industry outlook is generally negative with reasonable expectations of a turnaround within 12 to 18 months.

Loans assigned a grade of "Substandard" characteristics include, but are not limited to, the following: payment default and/or loss is possible but not yet probable, cash flow is insufficient to service debt, there is a likelihood that the collateral will have to be liquidated and/or the guarantor will be called upon to repay the debt, collateral coverage is marginal or nonexistent, guarantor has limited outside worth and is highly leveraged, management of the borrower has no prior experience with similar activities, capital base is weak and insufficient to absorb continuing losses and industry outlook is generally negative with reasonable expectations of a turnaround within 18 to 24 months.

Loans assigned a grade of "Doubtful" include all of the characteristics of "Substandard", but available information suggests it is unlikely that the loan will be paid back in its entirety. Cash flows are insufficient to service the debt, the borrower has had a series of substantial losses, key ratios are at unacceptable levels, and industry outlook is negative with an undeterminable recovery time. If the current adverse trends continue, it is unlikely the borrower will have the ability to meet the terms of the loan agreement. The probability of incurring a loss is greater than 50%. All loans classified as doubtful are placed on nonaccrual status.

These internally assigned grades are updated on a continual basis throughout the course of the year and represent management's most updated judgment regarding grades at March 31, 2012.

Credit risk by payment activity

Loans that do not receive an internally assigned grade are separated into two categories: performing and nonperforming. Performing loans are generally abiding by the terms of their loan contract and are less than 90 days past due. Loans are deemed nonperforming typically when they reach nonaccrual status or are 90 days past due or greater. The information presented by payment activity is updated as of March 31, 2012 based upon past due status as of that date.

The following table shows an aging analysis of past due loans as of the dates indicated:

Age Analysis of Past Due Loans
As of March 31, 2012
(Dollars in thousands)
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		Loans >90 Days and Accruing
One-to-four family	$	935	$	412	$	1,065	$	2,412	$	43,120	$	45,532	$	-
Multifamily/nonresidential		-		-		-		-		115,761		115,761		-
Construction		-		-		291		291		28,656		28,947		-
Land		-		-		-		-		24,888		24,888		-
Consumer and other		138		8		160		306		21,518		21,824		-
Commercial		179		24		561		764		23,644		24,408		-
Total	$	1,252	$	444	$	2,077	$	3,773	$	257,587	$	261,360	$	-

Age Analysis of Past Due Loans
As of December 31, 2011
(Dollars in thousands)
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans		Loans >90 Days and Accruing
One-to-four family	$	889	$	172	$	1,300	$	2,361	$	42,452	$	44,813	$	-
Multifamily/nonresidential		-		237		-		237		114,736		114,973		-
Construction		292		-		-		292		27,436		27,728		-
Land		-		-		-		-		25,409		25,409		-
Consumer and other		303		23		159		485		21,892		22,377		-
Commercial		269		189		385		843		27,619		28,462		-
Total	$	1,753	$	621	$	1,844	$	4,218	$	259,544	$	263,762	$	-

The following tables set forth details regarding impaired loans as of the periods indicated:

Impaired Loans
For the Three Months Ended March 31, 2012
(Dollars in thousands)
	Recorded Investment		Unpaid Principal Blance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One-to-four family	$	700	$	868	$	-	$	858	$	-
Multifamily/nonresidential		234		234		-		235		7
Construction		-		-		-		-		-
Land		-		-		-		-		-
Consumer and other		160		201		-		160		-
Commercial		165		230		-		166		-
Subtotal		1,259		1,533		-		1,419		7

With an allowance recorded:
One-to-four family		207		207		50		207		-
Multifamily/nonresidential		-		-		-		-		-
Construction		-		-		-		-		-
Land		-		-		-		-		-
Consumer and other		-		-		-		-		-
Commercial		635		655		379		637		7
Subtotal		842		862		429		844		7

Total:
One-to-four family		907		1,075		50		1,065		-
Multifamily/nonresidential		234		234		-		235		7
Construction		-		-		-		-		-
Land		-		-		-		-		-
Consumer and other		160		201		-		160		-
Commercial		800		885		379		803		7
Total	$	2,101	$	2,395	$	429	$	2,263	$	14

Impaired Loans
For the Twelve Months Ended December 31, 2011
(Dollars in thousands)
	Recorded Investment		Unpaid Principal Blance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One-to-four family	$	-	$	-	$	-	$	-	$	-
Multifamily/nonresidential		237		237		-		237		-
Construction		-		-		-		-		-
Land		-		-		-		-		-
Consumer and other		-		-		-		-		-
Commercial		166		218		-		166		-
Subtotal		403		455		-		403		-

With an allowance recorded:
One-to-four family		655		655		50		659		28
Multifamily/nonresidential		-		-		-		-		-
Construction		-		-		-		-		-
Land		-		-		-		-		-
Consumer and other		203		203		117		204		7
Commercial		655		675		394		596		22
Subtotal		1,513		1,533		561		1,459		57

Total:
One-to-four family		655		655		50		659		28
Multifamily/nonresidential		237		237		-		237		-
Construction		-		-		-		-		-
Land		-		-		-		-		-
Consumer and other		203		203		117		204		7
Commercial		821		893		394		762		22
Total	$	1,916	$	1,988	$	561	$	1,862	$	57

No interest was recognized on impaired loans on a cash basis during the three month period ended March 31, 2012 or the year ended December 31, 2011.

Troubled Debt Restructurings

The following table sets forth information about modifications which were considered troubled debt restructurings ("TDRs") as of March 31, 2012 and December 31, 2011.

Modifications
As of March 31, 2012
(Dollars in thousands)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings
One-to-four family		1	$	168	$	162
Consumer and other		1		40		40
Commercial		2		237		224
Total		4	$	445	$	426


Troubled Debt Restructurings That Subsequently Defaulted	Number of Contracts		Pre-Modification Outstanding Recorded Investment
Troubled debt restructurings
One-to-four family		1	$	168
Consumer and other		-		-
Commercial		-		-

Modifications
As of December 31, 2011
(Dollars in thousands)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings
One-to-four family		1	$	168	$	165
Consumer and Other		1		40		40
Commercial		2		237		231
Total		4	$	445	$	436

Troubled Debt Restructurings That Subsequently Defaulted	Number of Contracts		Pre-Modification Outstanding Recorded Investment
Troubled debt restructurings
One-to-four family		1	$	168
Consumer and other		-		-
Commercial		-		-

For these loans, the Company measures the level of impairment based on the present value of the estimated projected cash flows, the estimated value of the collateral or, if available, observable market prices. If current valuations are lower than the current book balance of the credit, the negative differences are reviewed and, if deemed appropriate, charged-off. If a charge-off is not deemed appropriate, a specific reserve is established for the individual loan in question. The allowance allocated to TDRs, excluding specifically-impaired loans referred to above, totaled $0 at both March 31, 2012 and 2011. Loans characterized as TDRs totaled $426,000 at March 31, 2012, compared to $436,000 at December 31, 2011. The TDR total of $426,000 and $436,000 at March 31, 2012 and December 31, 2011, respectively, is comprised of four performing loans. One is comprised of a single commercial real estate loan, which was identified as a TDR at December 31, 2011 and March 31, 2012. Another TDR consists of one single family residential loan in the amount of $162,000. This loan was reported to be in foreclosure eligibility status at December 31, 2011; however, during the first quarter of 2012 the loan was brought current by the customer and foreclosure proceedings were ceased. Management continues to monitor the status of this loan. The remaining TDRs consist of one consumer loan and one commercial loan which total $99,000 and both are paying as agreed under the restructured terms.

Residential Mortgage Loan Foreclosure

The Company evaluates its residential mortgage loan foreclosure processes and documentation procedures prior to any formal action being taken against the subject properties. The Company processes a relatively low volume of residential mortgage foreclosures and many of the relevant processes are manual in nature. The Company believes that its procedures for reviewing and validating the information in its documentation pertaining to residential mortgage loan foreclosures are sound.