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Troubled Debt Restructurings

9 Months Ended

Sep. 30, 2012

Troubled Debt Restructurings [Abstract]

Troubled Debt Restructurings

Troubled Debt Restructurings:

Total troubled debt restructurings were $6.9 million and $4.3 million at September 30, 2012 and December 31, 2011, respectively. The Company has allocated $297 thousand and $48 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2012 and December 31, 2011. There are no commitments to lend additional amounts to borrowers with loans that are classified as troubled debt restructurings at September 30, 2012 and December 31, 2011.

During the three and nine month periods ended September 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; a permanent reduction of the recorded investment in the loan; a permanent increase of the recorded investment in the loan due to a protective advance to pay delinquent real estate taxes or advance new monies; or a deferral of principal payments.

Troubled debt restructuring modifications involved a reduction of the notes stated interest rate in the range of 1% and 3.6% on loans with maturity periods ranging from 5 months to 41 months. One loan involved an extension of the maturity date by 5 years.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine month period ended September 30, 2012:


(In Thousands of Dollars)		Number of Loans				Pre-Modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment
Troubled debt restructurings
Commercial real estate
Owner occupied			3			$	1,143			$	1,166
Non-owner occupied			3				2,376				2,419
Commercial			1				74				100
Residential real estate
1-4 family residential			4				286				286

Total			11			$	3,879			$	3,971

The troubled debt restructurings described above decreased the allowance for loan losses by $161 thousand during the nine month period ended September 30, 2012. There were no charge offs as a result of the allowance adjustments.

There was one residential real estate loan modified as troubled debt restructurings for which there was a payment default within the previous twelve months, for the period ended September 30, 2012. The loan was not past due at September 30, 2012. There was no additional provision or any impact to the allowance for losses associated with these loans. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

Tabular disclosure of troubled debt restructuring which results when the debtor restructures the terms of its debt with a creditor due to the debtor's financial difficulties and the creditor grants certain concessions to obtain payment it might not otherwise receive. Includes a description of the principal changes in terms, the major features of settlement for each restructuring, the aggregate gain on restructuring and the related income tax effect, the per share amount of the total gain on restructuring, net of related income tax effect, and the total gain (loss) on transfers of assets recognized during the period. After the troubled debt restructuring has occurred debtors discuss the extent and amount to which amounts contingently payable are included in the carrying amount of restructured payables, and the conditions under which those amounts would become payable or would be forgiven when there is at least a reasonable possibility that a liability for contingent payments will be incurred.

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