NON-PERFORMING ASSETS

3 Months Ended

Mar. 31, 2012

NON-PERFORMING ASSETS [Abstract]

NON-PERFORMING ASSETS

NOTE G - NON-PERFORMING ASSETS

Non-performing assets ("NPA") include non-accrual loans, loans delinquent 90 days or more (if any), and other real estate.  A loan which is 90 days or more past due is automatically classified as a non-accrual loan and a non-performing asset.  In addition, loan analysis may designate a loan or loan line which is not 90 days or more past due as being non-accrual.  Other real estate which generates no income above the related expenses is considered non-performing.

Risk of nonpayment exists with respect to all loans, which could result in the classification of such loans as non-performing. At March 31, 2012, NPA balances were comparable to year-end 2011 primarily due to the continuing effect of the adverse economy and real estate downturn on residential land development and construction loan portfolios. 

The Company has a significant concentration in real estate lending, including loans to real estate developers secured by real estate located in Desoto County, Mississippi.  Declining real estate values and a severe constriction in the availability of mortgage financing has negatively impacted real estate sales, which has resulted in customers' inability to repay loans. In addition, the value of collateral underlying such loans has decreased materially.  During 2012, the Company has continued to experience significant levels of non-performing assets relating to real estate lending, primarily in our residential real estate portfolio.

As of March 31, 2012, the Company had $987 thousand identified as Troubled Debt Restructured ("TDR") assets.  At December 31, 2011, the Company had $548 thousand TDR assets. The Company's policy in managing TDRs is to include the asset in NPAs and reserve appropriately with management working with the borrower on a plan to either return the obligation to an accruing status or take appropriate measures to secure the collateral for disposition.

The following table presents information with respect to non-performing assets at March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011 (dollars in thousands, except for selected ratios):

	Mar. 31,		Dec. 31,		Sept. 30,		Jun. 30,
	2012		2011		2011		2011
Loans on non-accrual status	$	5,472	$	7,537	$	6,176	$	14,006
Loans past due 90 days or more but
not non-accrual status		3		10		119		3
OREO - non-performing		21,214		20,343		20,609		16,294
Total NPAs	$	26,689	$	27,890	$	26,904	$	30,303
Operating commercial real
estate OREO	$	3,307	$	3,324	$	3,340	$	3,385
OREO - non-performing		21,214		20,343		20,609		16,294
Total OREO	$	24,521	$	23,667	$	23,949	$	19,679
Selected ratios:
NPLs to total gross loans		2.375		3.239		2.628		5.630
NPAs to total gross loans and OREO		10.466		10.865		10.210		11.285
NPAs to total assets		4.950		5.453		5.102		5.646