Loans

9 Months Ended

Sep. 30, 2011

Loans [Abstract]

Loans

5. Loans:

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

	September 30, 2011		December 31, 2010
Gaming	$	37,592,200	$	44,342,798
Residential and land development		29,065,957		30,063,593
Real estate, construction		64,349,749		60,982,989
Real estate, mortgage		241,275,815		222,578,080
Commercial and industrial		36,935,888		36,463,500
Other		12,937,606		15,467,797
Total	$	422,157,215	$	409,898,757

The age analysis of the loan portfolio, segregated by class of loans, as of September 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
September 30, 2011:
Gaming	$		$		$		$		$	37,592,200	$	37,592,200	$
Residential and land development		5,578,335		344,747		18,178,652		24,101,734		4,964,223		29,065,957
Real estate, construction		3,936,458		865,012		1,925,317		6,726,787		57,622,962		64,349,749		4,308,259
Real estate, mortgage		11,493,401		7,733,635		2,610,259		21,837,295		219,438,520		241,275,815		1,848,052
Commercial and industrial		1,783,497		55,116		219,047		2,057,660		34,878,228		36,935,888		219,047
Other		173,386		32,417		66,019		271,822		12,665,784		12,937,606		5,124
Total	$	22,965,077	$	9,030,927	$	22,999,294	$	54,995,298	$	367,161,917	$	422,157,215	$	6,380,482
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 September 30, 2011 and December 31, 2010, is as follows:

	Loans With A Grade Of:
	A or B		C		D		E		Total
September 30, 2011:
Gaming	$	15,428,623	$	6,299,367	$	275,100	$	15,589,110	$	37,592,200
Residential and land development		4,964,222				8,281,915		15,819,820		29,065,957
Real estate, construction		54,506,091		348,807		9,343,856		150,995		64,349,749
Real estate, mortgage		202,039,876		2,829,951		35,696,164		709,824		241,275,815
Commercial and industrial		33,513,806		297,570		2,925,304		199,208		36,935,888
Other		12,448,480		47,239		376,096		65,791		12,937,606
Total	$	322,901,098	$	9,822,934	$	56,898,435	$	32,534,748	$	422,157,215
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 September 30, 2011 and December 31, 2010, are as follows:

	September 30, 2011		December 31, 2010
Gaming	$	15,589,110	$	10,221,662
Residential and land development		15,819,820		632,321
Real estate, construction				386,557
Real estate, mortgage		774,756		3,268,778
Commercial and industrial				27,081
Other		60,895		698
Total	$	32,244,581	$	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 September 30, 2011 and December 31, 2010 are as follows:

			Pre-Modification		Post-Modification
	Number		Outstanding		Outstanding
	of		Recorded		Recorded		Related
	Contracts		Investment		Investment		Allowance
September 30, 2011:
Real estate, construction		6	$	2,956,526	$	2,956,526	$	112,000
Real estate, mortgage		6		10,349,797		10,349,797		830,000
Commercial and industrial		1		707,410		707,410
		13	$	14,013,733	$	14,013,733	$	942,000
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 September 30, 2011 and December 31, 2010, are as follows:

	Unpaid						Average
	Principal		Recorded		Related		Recorded
	Balance		Investment		Allowance		Investment
September 30, 2011:
Gaming	$	15,589,110	$	15,589,110	$		$	11,516,919
Residential and land development		19,014,568		15,819,820				7,382,320
Real estate, construction		3,032,631		2,956,526		112,000		184,818
Real estate, mortgage		12,114,942		11,124,553		1,216,114		4,850,146
Commercial and industrial		707,410		707,410				314,718
Other		60,895		60,895		6,800		20,165
Total	$	50,519,556	$	46,258,314	$	1,334,914	$	24,269,086
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 nine months ended September 30, 2011 and the year ended December 31, 2010.