Loans

6 Months Ended

Jun. 30, 2011

Loans [Abstract]

Loans

5. Loans:

The composition of the loan portfolio at June 30, 2011 and December 31, 2010, is as follows:

	June 30, 2011		December 31, 2010
Gaming	$	44,909,921	$	44,342,798
Residential and land development		29,123,815		30,063,593
Real estate, construction		62,008,715		60,982,989
Real estate, mortgage		220,177,439		222,578,080
Commercial and industrial		24,463,860		36,463,500
Other		12,705,994		15,467,797
Total	$	393,389,744	$	409,898,757

The age analysis of the loan portfolio, segregated by class of loans, as of June 30, 2011 and December 31, 2010, is as follows:

													Loans Past
	Number of Days Past Due												Due Greater
					Greater		Total				Total		Than 90 Days
	30 - 59		60 - 89		Than 90		Past Due		Current		Loans		& Still Accruing
June 30, 2011:
Gaming	$		$		$	275,165	$	275,165	$	44,634,756	$	44,909,921	$	275,165
Residential and land development						15,819,820		15,819,820		13,303,995		29,123,815
Real estate, construction		4,348,383		473,891		762,625		5,584,899		56,423,816		62,008,715		762,624
Real estate, mortgage		5,234,786		6,727,950		812,286		12,775,022		207,402,417		220,177,439		32,420
Commercial and industrial		1,604,289		24,701		123,856		1,752,846		22,711,014		24,463,860		123,856
Other		394,430		58,810		818		454,058		12,251,936		12,705,994		817
Total	$	11,581,888	$	7,285,352	$	17,794,570	$	36,661,810	$	356,727,934	$	393,389,744	$	1,194,882
December 31, 2010:
Gaming	$		$		$	2,808,409	$	2,808,409	$	41,534,389	$	44,342,798	$
Residential and land development		2,281,675				2,317,327		4,599,002		25,464,591		30,063,593
Real estate, construction		8,041,900		4,433,125		4,373,103		16,848,128		44,134,861		60,982,989		1,990,772
Real estate, mortgage		18,479,501		4,639,802		5,139,974		28,259,277		194,318,803		222,578,080		955,715
Commercial and industrial		1,558,356		98,328		41,181		1,697,865		34,765,635		36,463,500		14,099
Other		273,940		33,544		969		308,453		15,159,344		15,467,797		969
Total	$	30,635,372	$	9,204,799	$	14,680,963	$	54,521,134	$	355,377,623	$	409,898,757	$	2,961,555

The Company monitors the credit quality of its loan portfolio through the use of a loan grading system. A score of 1 — 5 is assigned to the loan based on factors including repayment ability, trends in net worth and/or financial condition of the borrower and guarantors, employment stability, management ability, loan to value fluctuations, the type and structure of the loan, conformity of the loan to bank policy and payment performance. Based on the total score, a loan grade of A - F is applied. A grade of A will generally be applied to loans for customers that are well known to the Company and that have excellent sources of repayment. A grade of B will generally be applied to loans for customers that have excellent sources of repayment which have no identifiable risk of collection. A grade of C will generally be applied to loans for customers that have adequate sources of repayment which have little identifiable risk of collection. Loans with a grade of C may be placed on the watch list if weaknesses are not resolved which could result in potential loss. A grade of D will generally be applied to loans for customers that are inadequately protected by current sound net worth, paying capacity of the borrower, or pledged collateral. Loans with a grade of D have unsatisfactory characteristics such as cash flow deficiencies, bankruptcy filing by the borrower or dependence on the sale of collateral for the primary source of repayment, causing more than acceptable levels of risk. Loans 60 to 89 days past due receive a grade of D. A grade of E will generally be applied to loans for customers with weaknesses inherent in the “D” classification and in which collection or liquidation in full is questionable. All loans 90 days or more past due are rated E. A grade of F is applied to loans which are considered uncollectible and of such little value that their continuance in an active bank is not warranted. Loans with this grade are charged off, even though partial or full recovery may be possible in the future. All loans 180 days or more past due are rated F and charged off unless the Bank is in the process of collection.

An analysis of the loan portfolio by loan grade, segregated by class of loans, as of June 30, 2011 and December 31, 2010, is as follows:

	Loans With A Grade Of:
	A or B		C		D		E		Total
June 30, 2011:
Gaming	$	29,181,795	$		$		$	15,728,126	$	44,909,921
Residential and land development		5,012,773		4,220,000		19,258,722		632,320		29,123,815
Real estate, construction		52,101,038		73,594		9,640,556		193,527		62,008,715
Real estate, mortgage		181,993,752		5,792,770		29,939,922		2,450,995		220,177,439
Commercial and industrial		15,697,642		299,048		8,262,406		204,764		24,463,860
Other		12,372,826		38,145		289,718		5,305		12,705,994
Total	$	296,359,826	$	10,423,557	$	67,391,324	$	19,215,037	$	393,389,744
December 31, 2010:
Gaming	$	27,397,218	$		$	6,413,068	$	10,532,512	$	44,342,798
Residential and land development		25,664,590		864,342		3,102,340		432,321		30,063,593
Real estate, construction		52,417,942		314,806		7,715,653		534,588		60,982,989
Real estate, mortgage		184,963,841		8,247,627		25,669,185		3,697,427		222,578,080
Commercial and industrial		33,702,021		289,222		2,323,291		148,966		36,463,500
Other		15,232,311		39,865		195,621				15,467,797
Total	$	339,377,923	$	9,755,862	$	45,419,158	$	15,345,814	$	409,898,757

Total loans on nonaccrual as of June 30, 2011 and December 31, 2010, are as follows:

	June 30, 2011		December 31, 2010
Gaming	$	15,728,126	$	10,221,662
Residential and land development		15,819,821		632,321
Real estate, construction				386,557
Real estate, mortgage		1,014,036		3,268,778
Commercial and industrial				27,081
Other				698
Total	$	32,561,983	$	14,537,097

The Company has modified certain loans by granting interest rate concessions to these customers. These loans are classified as troubled debt restructurings. These loans are all in compliance with their modified terms and are currently accruing. Troubled debt restructurings as of June 30, 2011 and December 31, 2010 are as follows:

			Pre-Modification		Post-Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded		Related
	Contracts		Investment		Investment		Allowance
June 30, 2011:
Real estate, construction		1	$	183,607	$	183,607	$	112,000
Real estate, mortgage		2		8,874,063		8,874,063		498,000
Commercial and industrial		1		708,352		708,352
		4	$	9,766,022	$	9,766,022	$	610,000
December 31, 2010:
Real estate, construction		1	$	186,831	$	186,831	$	116,000
Real estate, mortgage		1		515,663		515,663		110,000
		2	$	702,494	$	702,494	$	226,000

Impaired loans, segregated by class of loans, as of June 30, 2011 and December 31, 2010, are as follows:

	Unpaid						Average
	Principal		Recorded		Related		Recorded
	Balance		Investment		Allowance		Investment
June 30, 2011:
Gaming	$	15,728,125	$	15,728,126	$		$	10,116,646
Residential and land development		19,500,599		15,819,821				632,321
Real estate, construction		183,607		183,607		112,000		185,120
Real estate, mortgage		10,818,096		9,888,099		935,201		1,207,129
Commercial and industrial		708,352		708,352				3,935
Total	$	46,938,779	$	42,328,005	$	1,047,201	$	12,145,151
December 31, 2010:
Gaming	$	10,532,512	$	10,221,662	$	107,328	$	9,363,015
Residential and land development		4,313,098		632,321		8,220		2,692,751
Real estate, construction		573,388		573,388		179,000		199,531
Real estate, mortgage		4,762,356		3,784,441		649,392		2,366,888
Commercial and industrial		27,081		27,081		195		8,065
Other		698		698		698		590
Total	$	20,209,133	$	15,239,591	$	944,833	$	14,630,840

No material interest income was recognized on impaired loans for the six months ended June 30, 2011 and the year ended December 31, 2010.