Note 9. Troubled Debt Restructuring

3 Months Ended

Sep. 30, 2011

Loans and Leases Receivable, Troubled Debt Restructuring Policy [Policy Text Block]

9.     Troubled Debt Restructuring

A troubled debt restructuring (“TDR”) includes a loan modification where a borrower is experiencing financial difficulty and the Bank grants a concession to that borrower that the Bank would not otherwise consider except for the borrower’s financial difficulties.  Modifications include below market interest rate, interest-only terms, forgiveness of principal, or an exceptionally long amortization period.  Most of the Bank’s modifications are below market interest rates.  A TDR may be either on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability.  If a TDR is placed on nonaccrual status, it remains there until it performs under the restructured terms for six consecutive months at which time it is returned to accrual status.

	As of September 30, 2011
						Commercial			Residential
	Commercial		Construction			Real Estate			Real Estate			Multifamily			Consumer		Total
Accruing
December 31, 2010	$	-	$	2,005,213		$	11,510,812		$	4,747,253		$	-		$	-	$	18,263,278
Principal payments		-		-			(83,066	)		(254,258	)		-			-		(337,324	)
Charge-offs		-		-			-			-			-			-		-
Advances		-		-			416,126			23,537			-			-		439,663
New restructured		-		3,518,007			807,724			6,780,581			-			99,904		11,206,216
Class transfers		-		(1,926,048	)		(3,551,718	)		(439,088	)		-			-		(5,916,854	)
Transfers from
nonaccrual		-		-			-			115,857			-			-		115,857
September 30, 2011	$	-	$	3,597,172		$	9,099,878		$	10,973,882		$	-		$	99,904	$	23,770,836
Nonaccrual
December 31, 2010	$	-	$	-		$	-		$	2,730,885		$	130,880		$	-	$	2,861,765
Principal payments		-		-			-			(45,370	)		(3,854	)		-		(49,224	)
Charge-offs		-		-			-			-			-			-		-
Advances		-		-			-			13,565			-			-		13,565
New restructured		85,000		-			-			2,609,750			-			-		2,694,750
Class transfers		-		-			-			-			-			-		-
Transfers to
accrual		-		-			-			(115,857	)		-			-		(115,857	)
September 30, 2011	$	85,000	$	-		$	-		$	5,192,973		$	127,026		$	-	$	5,404,999
Totals
December 31, 2010	$	-	$	2,005,213		$	11,510,812		$	7,478,138		$	130,880		$	-	$	21,125,043
Principal payments		-		-			(83,066	)		(299,628	)		(3,854	)		-		(386,548	)
Charge-offs		-		-			-			-			-			-		-
Advances		-		-			416,126			37,102			-			-		453,228
New restructured		85,000		3,518,007			807,724			9,390,331			-			99,904		13,900,966
Class transfers		-		(1,926,048	)		(3,551,718	)		(439,088	)		-			-		(5,916,854	)
Transfers from
nonaccrual		-		-			-			-			-			-		-
September 30, 2011	$	85,000	$	3,597,172		$	9,099,878		$	16,166,855		$	127,026		$	99,904	$	29,175,835

A summary of troubled debt restructurings as of September 30, 2011 and December 31, 2010 is noted in the table below.  All troubled debt restructurings are considered impaired loans and, as of September 30, 2011, the allowance associated with those loans was $1.8 million.

	September 30, 2011
	Number of Modifications		Total Troubled Debt Restructurings		Allowance for Loan Losses Allocation		Recorded Investment
Commercial		2	$	85,000		-	$	85,000
Real estate
Construction		4		3,597,172		17,572		3,579,600
Commercial		18		9,099,878		949,290		8,150,588
Residential		77		16,166,855		778,734		15,388,121
Multifamily		1		127,026		-		127,026
Installment and other		7		99,904		52,733		47,171
Total Loans		109	$	29,175,835		1,798,329	$	27,377,506

	December 31, 2010
	Number of		Total Troubled Debt		Allowance for Loan Losses		Recorded
	Modifications		Restructurings		Allocation		Investment
Commercial		-	$	-		-	$	-
Real estate
Construction		3		2,005,213		-		2,005,213
Commercial		19		11,510,812		793,960		10,716,852
Residential		42		7,478,138		-		7,478,138
Multifamily		1		130,880		-		130,880
Installment and other		-		-		-		-
Total Loans		65	$	21,125,043		793,960	$	20,331,083

The following is a summary of troubled debt restructurings as of September 30, 2011 and December 31, 2010 that were in default.  Troubled debt restructures in default are past due 30 days or more at the end of the period.

	September 30, 2011		December 31, 2010
	Number of		Total in		Number or		Total in
	Modifications		Default		Modifications		Default
Commercial		-	$	-		-	$	-
Real estate
Construction		-		-		-		-
Commercial		1		814,239		1		820,000
Residential		21		4,944,998		2		223,376
Multifamily		-		-		-		-
Installment and other		2		29,775		-		-
Total Loans		24	$	5,789,012		3	$	1,043,376