NOTE D - LOANS

Loans
Major Classifications

Major classifications of loans were as follows:
	March 31,			December 31,
	2012			2011
	(In thousands)

Commercial, financial and agricultural	$	35,199		$	35,341
Real estate - construction and development		51,077			51,725
Real estate - mortgage		123,804			124,994
Installment loans to individuals		19,292			18,871
Other		1,121			2,092
		230,493			233,023
Less allowance for loan losses		(3,822	)		(4,026	)
	$	226,671		$	228,997

Transactions in the allowance for loan losses were as follows:

Security Capital Corporation
Allowance for Loan Losses
(in thousands)
	Three Months Ended March 31,
	2012			2011
	(In thousands)
Balance at beginning of year	$	4,026		$	4,477

Loans charge-offs:
Commercial, financial & agricultural		20			9
Real estate - construction & development		313			3
Real estate - mortgage		53			81
Installment loans to individuals		185			207
Other		-			-
Total charge-offs		571			300

Loan recoveries:
Commercial, financial & agricultural		3			10
Real estate - construction & development		97			8
Real estate - mortgage		13			-
Installment loans to individuals		202			184
Other		-			-
Total recoveries		315			202

Net charge-offs		256			98

Provision for loan losses		52			430

Balance at end of year	$	3,822		$	4,809

Loans at End of Period (Net of Allowance)	$	226,671		$	228,997

Ratio: Allowance to Loans		1.69	%		2.10	%

Average Loans	$	225,720		$	240,859

Ratio: Allowance to Average Loans		1.69	%		2.00	%

Ratio: Net Charge-Offs to Average Loans		0.11	%		0.04	%

At March 31, 2012, and December 31, 2011, loans lines of $50,000 and greater, rated substandard or lower, were analyzed for impairment. The following table, a summary comparison of the analysis for impairment, provides the ending balances in the Company's loans and allowance for loan losses, broken down by portfolio segment as of March 31, 2012 and December 31, 2011. The table also provides additional detail as to the amount of our loans and allowance that corresponds to individual versus collective impairment evaluation. The impairment evaluation corresponds to the Company's systematic methodology for estimating its Allowance for Loan Losses.


March 31, 2012
	Commercial,		Real Estate				Installment
	Financial		Construction		Real Estate		and
	and Agriculture		and Development		Mortgage		Other		Total
	(In thousands)
Loans
Individually evaluated	$	689	$	26,943	$	10,565	$	90	$	38,287
Collectively evaluated		34,510		24,134		113,239		20,323		192,206
Total	$	35,199	$	51,077	$	123,804	$	20,413	$	230,493

Allowance for Loan Losses
Individually evaluated	$	20	$	1,708	$	859	$	33	$	2,620
Collectively evaluated		106		382		532		182		1,202
Total	$	126	$	2,090	$	1,391	$	215	$	3,822

December 31, 2011
	Commercial,		Real Estate				Installment
	Financial		Construction		Real Estate		and
	and Agriculture		and Development		Mortgage		Other		Total
	(In thousands)
Loans
Individually evaluated	$	613	$	24,360	$	11,449	$	193	$	36,615
Collectively evaluated		34,728		27,365		113,545		20,770		196,408
Total	$	35,341	$	51,725	$	124,994	$	20,963	$	233,023

Allowance for Loan Losses
Individually evaluated	$	33	$	1,291	$	853	$	82	$	2,259
Collectively evaluated		97		870		598		202		1,767
Total	$	130	$	2,161	$	1,451	$	284	$	4,026

The following table provides additional detail of loans lines of $50,000 and greater, rated substandard or lower which were analyzed for impairment and reflects the breakdown according to class as of March 31, 2012, and December 31, 2011. The recorded investment included in the following table represents customer balances net of any partial charge-offs recognized on the loans, net of any deferred fees and costs. As a majority of these loans at March 31, 2012, and December 31, 2011, are on nonaccrual status, recorded investment excludes any insignificant amount of accrued interest receivable on loans 90 days or more past due and still accruing. The unpaid balance represents the recorded balance prior to any partial charge-offs.

March 31, 2012
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Loans analyzed for
impairment with
no related allowance:
Commercial, financial, and agricultural	$	298	$	298	$	-	$	301	$	2
Real estate-construction and development		18,021		18,021		-		18,261		269
Real estate-mortgage		7,568		8,419		-		7,480		89
Installment loans and other		-		-		-		-		-
Total	$	25,887	$	26,738	$	-	$	26,042	$	360
Loans analyzed for
impairment with
a related allowance:
Commercial, financial, and agricultural	$	391	$	391	$	20	$	396	$	5
Real estate-construction and development		8,922		8,972		1,708		9,041		76
Real estate-mortgage		2,997		3,026		859		3,233		34
Installment loans and other		90		90		33		93		2
Total	$	12,400	$	12,479	$	2,620	$	12,763	$	117
Total loans analyzed for
impairment:
Commercial, financial, and agricultural	$	689	$	689	$	20	$	697	$	7
Real estate-construction and development		26,943		26,993		1,708		27,302		345
Real estate-mortgage		10,565		11,445		859		10,713		123
Installment loans and other		90		90		33		93		2
Total Impaired Loans	$	38,287	$	39,217	$	2,620	$	38,805	$	477

December 31, 2011
							Average		Interest
							Recorded		Income
	Recorded		Unpaid		Related		Investment		Recognized
	Investment		Balance		Allowance		YTD		YTD
	(In thousands)
Loans analyzed for
impairment with
no related allowance:
Commercial, financial, and agricultural	$	513	$	513	$	-	$	488	$	27
Real estate-construction and development		18,210		18,210		-		18,439		869
Real estate-mortgage		5,278		6,076		-		7,948		356
Installment loans and other		-		-		-		-		-
Total	$	24,001	$	24,799	$	-	$	26,875	$	1,252
Loans analyzed for
impairment with
a related allowance:
Commercial, financial, and agricultural	$	100	$	100	$	33	$	117	$	5
Real estate-construction and development		6,151		6,201		1,291		6,279		159
Real estate-mortgage		6,170		6,170		853		6,247		286
Installment loans and other		193		208		82		238		18
Total	$	12,614	$	12,679	$	2,259	$	12,881	$	468
Total loans analyzed for
impairment:
Commercial, financial, and agricultural	$	613	$	613	$	33	$	605	$	32
Real estate-construction and development		24,361		24,411		1,291		24,718		1,028
Real estate-mortgage		11,448		12,246		853		14,195		642
Installment loans and other		193		208		82		238		18
Total Impaired Loans	$	36,615	$	37,478	$	2,259	$	39,756	$	1,720

The following table summarizes by class the Company's loans classified as past due in excess of 30 days or more in addition to those loans classified as non-accrual:

March 31, 2012
			90 Days +				Total
		30-89	Past Due				Past Due
	Days Past		and Still		Nonaccrual		and		Total
	Due		Accruing		Loans		Nonaccrual		Loans
	(In thousands)

Commercial, financial	$	219	$	-	$	66	$	285	$	35,199
and agricultural
Real estate - construction
and development		441		-		3,191		3,632		51,077
Real estate - mortgage		2,493		-		2,125		4,618		123,804
Installment loans to individuals		625		-		90		715		19,292
Other		24		3		-		27		1,121
Total	$	3,802	$	3	$	5,472	$	9,277	$	230,493


December 31, 2011
			90 Days +				Total
		30-89	Past Due				Past Due
	Days Past		and Still		Nonaccrual		and		Total
	Due		Accruing		Loans		Nonaccrual		Loans
	(In thousands)

Commercial, financial	$	353	$	-	$	43	$	396	$	35,341
and agricultural
Real estate - construction
and development		510		-		4,592		5,102		51,725
Real estate - mortgage		2,704		-		2,814		5,518		124,994
Installment loans to individuals		1,199		-		88		1,287		18,871
Other		12		10		-		22		2,092
Total	$	4,778	$	10	$	7,537	$	12,325	$	233,023

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company uses the following definitions for risk ratings, which are consistent with the definitions used in supervisory guidance:

Special Mention: Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

As of March 31, 2012, and December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

March 31, 2012

	Commercial,		Real Estate				Installment
	Financial		Commercial &		Real Estate		and
	and Agriculture		Development		Mortgage		Other		Total
	(In thousands)
Pass	$	28,897	$	20,693	$	98,928	$	19,411	$	167,929
Special Mention		5,060		4,021		6,490		413		15,984
Substandard		1,242		26,363		18,386		589		46,580
Doubtful		-		-		-		-		-
Total	$	35,199	$	51,077	$	123,804	$	20,413	$	230,493

December 31, 2011

	Commercial,		Real Estate				Installment
	Financial		Commercial &		Real Estate		and
	and Agriculture		Development		Mortgage		Other		Total
	(In thousands)
Pass	$	28,716	$	22,698	$	96,474	$	19,852	$	167,740
Special Mention		5,491		4,732		8,137		446		18,806
Substandard		1,134		24,295		20,383		665		46,477
Doubtful		-		-		-		-		-
Total	$	35,341	$	51,725	$	124,994	$	20,963	$	233,023