NOTE 3 - LOANS

3 Months Ended

Mar. 31, 2012

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 3 – LOANS

The Company originates loans for business, consumer and real estate activities and for equipment purchases. Such loans are concentrated in the Company’s market areas which consist of Yolo, Placer, Sonoma, Shasta, Humboldt, Mendocino, Trinity and Del Norte Counties and neighboring communities. Loans decreased $7,641,000 for the first three months ending March 31, 2012 to $448,878,000 from $456,519,000 at December 31, 2011. At March 31, 2012 compared to December 31, 2011, real estate construction loans increased by $908,000 while commercial loans decreased by $5,237,000 and real estate commercial loans decreased by $903,000 due to loan pay-offs and charge-offs. Loan demand for these products continues to remain soft in 2012. Major classifications of loans were as follows (in thousands):

	March 31,			December 31,
	2012			2011
Commercial	$	40,923		$	46,160
Real estate - commercial		275,741			276,644
Real estate - construction		28,371			27,463
Real estate - mortgage		47,530			47,362
Installment		8,705			10,925
Other		47,608			47,965
Gross loans		448,878			456,519
Deferred loan fees, net		(229	)		(304	)
Allowance for loan losses		(12,274	)		(12,656	)
Total loans, net	$	436,375		$	443,559

Certain real estate loans receivable are pledged as collateral for available borrowings with the FHLB, FRB, and certain correspondent banks. Pledged loans totaled $130,905,000 and $137,528,000 at March 31, 2012 and December 31, 2011, respectively.

8

The Company did not recognize any interest income on impaired loans for the periods ending March 31, 2012 and December 31, 2011. The following table presents impaired loans and the related allowance for loan losses as of the dates indicated (in thousands):

	As of March 31, 2012						As of December 31, 2011
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment		Balance		Allowance
With no allocated allowance
Commercial	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - commercial		954		1,079		—		1,502		1,556		—
Real estate - construction		3,557		3,589		—		4,128		4,153		—
Real estate - mortgage		610		692		—		643		751		—
Installment		159		170		—		70		75		—
Other		86		89		—		88		91		—
Subtotal		5,366		5,619		—		6,431		6,626		—
With allocated allowance
Commercial		1,174		1,177		371		1,788		1,849		450
Real estate - commercial		3,436		3,500		2		4,496		5,302		606
Real estate - construction		5,312		5,312		520		5,312		5,312		504
Real estate - mortgage		295		324		47		295		314		37
Installment		—		—		—		37		39		13
Other		51		51		34		—		—		—
Subtotal		10,268		10,364		974		11,928		12,816		1,610
Total Impaired Loans	$	15,634	$	15,983	$	974	$	18,359	$	19,442	$	1,610

The following table presents the average balance related to impaired loans for the period indicated (in thousands):

	Average Recorded Investment
	for the three months ended
	March 31,
		2012		2011
Commercial	$	1,202	$	526
Real estate - commercial		4,564		9,438
Real estate - construction		8,867		3,207
Real estate - mortgage		921		1,729
Installment		166		53
Other		138		—
Total	$	15,858	$	14,953

Nonperforming loans include all such loans that are either on nonaccrual status or are 90 days past due as to principal or interest but still accrue interest because such loans are well-secured and in the process of collection. Nonperforming loans are summarized as follows (in thousands):

	March 31,		December 31,
	2012		2011
Nonaccrual loans	$	15,634	$	18,359
Loans 90 days past due or more but still accruing interest		—		52
Total nonperforming loans	$	15,634	$	18,411

If interest on nonaccrual loans had been accrued, such income would have approximated $155,000 and $259,000 for the three months ended March 31, 2012 and 2011, respectively.

The following table shows an aging analysis of the loan portfolio by the amount of time past due (in thousands):

	As of March 31, 2012
	Accruing Interest
				30-89		Greater than
				Days		90 Days
		Current		Past Due		Past Due		Nonaccrual		Total
Commercial	$	39,612	$	137	$	—	$	1,174	$	40,923
Real estate - commercial		269,263		2,088		—		4,390		275,741
Real estate - construction		19,026		476		—		8,869		28,371
Real estate - mortgage		46,024		601		—		905		47,530
Installment		8,505		41		—		159		8,705
Other		47,363		108		—		137		47,608
Total	$	429,793	$	3,451	$	—	$	15,634	$	448,878

	As of December 31, 2011
	Accruing Interest
				30-89		Greater than
				Days		90 Days
		Current		Past Due		Past Due		Nonaccrual		Total
Commercial	$	44,325	$	47	$	—	$	1,788	$	46,160
Real estate - commercial		264,143		6,503		—		5,998		276,644
Real estate - construction		18,023		—		—		9,440		27,463
Real estate - mortgage		45,170		1,254		—		938		47,362
Installment		10,614		152		52		107		10,925
Other		47,877		—		—		88		47,965
Total	$	430,152	$	7,956	$	52	$	18,359	$	456,519

During the period ending March 31, 2012, there were no loans modified as troubled debt restructurings. There were no loans modified as troubled debt restructurings in the past twelve months that had a payment default during the period ended March 31, 2012. There are no commitments to lend additional amounts at March 31, 2012 to customers with outstanding loans that are classified as troubled debt restructurings.