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NOTE 3 - LOANS
 6 Months Ended
Jun. 30, 2012
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 3 – LOANS


The Company originates loans for business, consumer and real estate activities. 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. Major classifications of loans were as follows (in thousands):


    June 30,   December 31,
    2012   2011
Commercial   $ 43,471     $ 46,160  
Real estate - commercial     282,957       276,644  
Real estate - construction     28,927       27,463  
Real estate - mortgage     45,511       47,362  
Installment     7,920       10,925  
Other     46,687       47,965  
Gross loans     455,473       456,519  
Deferred loan fees, net     (216 )     (304 )
Allowance for loan losses     (11,732 )     (12,656 )
Total loans, net   $ 443,525     $ 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 $126,493,000 and $137,528,000 at June 30, 2012 and December 31, 2011, respectively.


The Company did not recognize any interest income on impaired loans for the three and six month periods ending June 30, 2012 and the year ending 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 June 30, 2012   As of December 30, 2012
        Unpaid           Unpaid    
    Recorded   Principal   Related   Recorded   Principal   Related
    Investment   Balance   Allowance   Investment   Balance   Allowance
With no allocated allowance                                                
Commercial   $ —     $ —     $ —     $ —     $ —     $ —  
Real estate - commercial     5,758       6,035       —       1,502       1,556       —  
Real estate - construction     3,069       3,113       —       4,128       4,153       —  
Real estate - mortgage     660       751       —       643       751       —  
Installment     136       147       —       70       75       —  
Other     111       114       —       88       91       —  
Subtotal     9,734       10,160       —       6,431       6,626       —  
                                                 
With allocated allowance                                                
Commercial     1,113       1,117       240       1,788       1,849       450  
Real estate - commercial     187       187       99       4,496       5,302       606  
Real estate - construction     5,312       5,312       529       5,312       5,312       504  
Real estate - mortgage     281       311       35       295       314       37  
Installment     —       —       —       37       39       13  
Other     —       —       —       —       —       —  
Subtotal     6,893       6,927       903       11,928       12,816       1,610  
Total Impaired Loans   $ 16,627     $ 17,087     $ 903     $ 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   Average Recorded Investment
    for the three months ended   for the six months ended
    June 30,   June 30,
    2012   2011   2012   2011
                 
Commercial   $ 1,143     $ 2,284     $ 1,173     $ 2,300  
Real estate - commercial     5,989       10,166       6,119       10,211  
Real estate - construction     8,388       4,257       8,394       4,260  
Real estate - mortgage     950       1,153       964       1,157  
Installment     140       23       144       23  
Other     124       50       138       50  
Total   $ 16,734     $ 17,933     $ 16,932     $ 18,001  

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):


    June 30,   December 31,
    2012   2011
Nonaccrual loans   $ 16,627     $ 18,359  
Loans 90 days past due or more but still accruing interest     144       52  
Total nonperforming loans   $ 16,771     $ 18,411  
                 
Nonaccrual loans to total gross loans     3.65 %     4.02 %
Nonperforming loans to total gross loans     3.68 %     4.04 %

If interest on nonaccrual loans had been accrued, such income would have approximated $357,000 and $735,000 for the six months ended June 30, 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 June 30, 2012
    Accruing Interest        
    Current   30-89 Days Past Due   Greater than 90 Days
Past Due 		  Nonaccrual   Total
                     
Commercial   $ 42,212     $ 146     $ —     $ 1,113     $ 43,471  
Real estate - commercial     276,774       94       144       5,945       282,957  
Real estate - construction     20,546       —       —       8,381       28,927  
Real estate - mortgage     44,315       255       —       941       45,511  
Installment     7,695       89       —       136       7,920  
Other     46,494       82       —       111       46,687  
Total   $ 438,036     $ 666     $ 144     $ 16,627     $ 455,473  

    As of December 31, 2011
    Accruing Interest        
    Current   30-89 Days Past Due   Greater than 90 Days
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 June 30, 2012, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. The following table shows information related to Troubled Debt Restructurings for the periods indicated (in thousands):


    For the three months ended June 30, 2012   For the six months ended June 30, 2012
    Non Accruing TDRs   Non Accruing TDRs
        Pre-Modification   Post-Modification       Pre-Modification   Post-Modification
    Number   Outstanding   Outstanding   Number   Outstanding   Outstanding
    of   Recorded   Recorded   of   Recorded   Recorded
    Contracts   Investment   Investment   Contracts   Investment   Investment
Commercial     1     $ 1,076     $ 1,076       1     $ 1,076     $ 1,076  
Real estate - commercial     2     $ 278     $ 278       2     $ 278     $ 278  
Installment     1     $ 25     $ 25       2     $ 73     $ 73  

At June 30, 2012, there were $203,000 in specific reserves allocated to customers whose loan terms were modified in troubled debt restructurings. There are no commitments to lend additional amounts at June 30, 2012 to customers with outstanding loans that are classified as troubled debt restructurings. There were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the year period ending June 30, 2012.


There were four loans with modifications involving a reduction of the stated interest rate. There was one modification involving an extension of the maturity date for six months. The recorded investment in five loans was reduced in the aggregate amount of $9,000 during the year.