The allowance for loan losses is maintained at a level believed adequate by management to absorb probable incurred credit losses in the loan portfolio. The allowance is increased by provisions for loan losses charged to income. Loan losses are charged against the allowance when management believes a loan is uncollectible. Subsequent recoveries, if any, are credited to the allowance. This policy applies to each of the Company’s portfolio segments.

The Company’s established methodology for evaluating the adequacy of the allowance for loan losses considers both components of the allowance; (1) specific allowances allocated to loans evaluated individually for impairment under the Accounting Standards Codification (“ASC”) Section 310-10-35 of the Financial Accounting Standards Board (“FASB”), and (2) allowances calculated for pools of loans evaluated collectively for impairment under FASB ASC Subtopic 450-20.

Prior to the fourth quarter of 2009, the Company determined its past loan loss experience by using a rolling twelve quarter historical approach. Beginning in the fourth quarter of 2009, the Company began using a rolling eight quarter historical approach. The change in methodology was implemented as management believed this shorter period was more reflective of the current economic conditions at that time and that the collectively-evaluated allowance could be better estimated by using a shorter loss period rather than a longer loss period combined with a larger emphasis on estimating additional qualitative and environment factors. The impact of the change in methodology increased the allowance for loan losses in the fourth quarter of 2009 by approximately $235,000.

For the quarter ended September 30, 2011, the Company changed its methodology for evaluating the adequacy of the allowance for loan losses by revising and enhancing the methodology for loans evaluated collectively for impairment. Under its new methodology, the Company revised and further disaggregated its pools of loans evaluated collectively for impairment. Similar to the prior methodology, pools are analyzed by general loan types, and further analyzed by collateral types, where appropriate. However, under the new methodology, pools are further disaggregated by internal credit risk ratings for commercial loans, commercial mortgages and construction loans and by delinquency status for residential mortgages, consumer loans and all other loan types.

Allowance allocations for each pool are determined through a migration analysis based on activity for the period beginning March 2008. The analysis computes loss rates based on a probability of default (“PD”) and loss given default (“LGD”). Allowance allocations were previously computed based on weighted average charge-off rates as opposed to the use of credit migration matrices, which computes PDs and LGDs based on historical losses as loans migrate through the various risk rating or delinquency categories. The March 2008 date was selected in an effort to capture sufficient data points to provide a meaningful migration analysis using available data in comparable formats.

Under both the current and previous methodologies, loss rates are adjusted to consider qualitative factors such as economic conditions and trends, among others. However, under the new methodology, the Company applies a more detailed analysis of qualitative factors that are assessed on a quarterly basis based upon gradings specific to the Company, as well as regional economic metrics. As of September 30, 2011, the allowance for loan losses for loans evaluated collectively for impairment decreased from $15.6 million under the Company’s prior methodology to $11.9 million under the new methodology.

Loan impairment is reported when full payment under the loan terms is not expected. Impaired loans are carried at the present value of estimated future cash flows using the loan's existing rate, or the fair value of collateral if the loan is collateral dependent. A portion of the allowance for loan losses is allocated to impaired loans if the value of such loans is deemed to be less than the unpaid balance. If these allocations require an increase in the allowance for loan losses, that increase is recorded as a component of the provision for loan losses. Loans are evaluated for impairment when payments are delayed or when the internal grading system indicates a substandard or doubtful classification. This policy applies to each class of the Company’s loan portfolio.

Impairment is evaluated in total for smaller-balance loans of similar nature, such as residential mortgage, consumer, home equity and second mortgage loans. Commercial loans and mortgage loans secured by other properties are evaluated individually for impairment. When credit analysis of borrower operating results and financial condition indicates that underlying cash flows of the borrower's business are not adequate to meet its debt service requirements, including loans to the borrower by United Bank & Trust (the “Bank”), the loan is evaluated for impairment. Often this is associated with a delay or shortfall of payments of thirty days or more.

Loans are generally moved to nonaccrual status when ninety days or more past due or in bankruptcy. These loans are often also considered impaired. Impaired loans are charged off, in part or in full, when deemed uncollectible. This typically occurs when the loan is 120 or more days past due, unless the loan is both well-secured and in the process of collection. This policy applies to each class of the Company’s loan portfolio.

	Twelve Months Ended December 31, 2011
Thousands of dollars	Business & Commercial Mortgages			CLD (1)			Residential Mortgage			Personal			Total
Balance, January 1	$	16,672		$	3,248		$	2,661		$	2,582		$	25,163
Provision charged to expense		9,863			2,886			1,579			1,536			15,864
Amounts related to change in allocation methodology		(2,246	)		49			(990	)		(527	)		(3,714	)
Net provision after amounts related to change in allocation methodology		7,617			2,935			589			1,009			12,150
Losses charged off		(12,063	)		(2,908	)		(1,387	)		(2,006	)		(18,364	)
Recoveries		1,111			278			68			227			1,684
Balance, December 31	$	13,337		$	3,553		$	1,931		$	1,812		$	20,633

Ending balance: individually evaluated for impairment	$	5,213	$	2,907	$	871	$	40	$	9,031
Ending balance: collectively evaluated for impairment	$	8,124	$	646	$	1,060	$	1,772	$	11,602

Total Loans:
Ending balance	$	333,979	$	39,723	$	86,029	$	103,971	$	563,702
Ending balance: individually evaluated for impairment	$	31,225	$	14,486	$	5,241	$	183	$	51,135
Ending balance: collectively evaluated for impairment	$	302,754	$	25,237	$	80,788	$	103,788	$	512,567

	Twelve Months Ended December 31, 2010															2009
Thousands of dollars	Business & Commercial Mortgages			CLD (1)			Residential Mortgage			Personal			Total
Balance, January 1	$	12,221		$	5,164		$	760		$	1,875		$	20,020		$	18,312
Provision charged to expense		11,710			3,716			3,655			2,449			21,530			25,770
Losses charged off		(7,683	)		(5,919	)		(1,820	)		(1,907	)		(17,329	)		(24,368	)
Recoveries		424			287			66			165			942			306
Balance, December 31	$	16,672		$	3,248		$	2,661		$	2,582		$	25,163		$	20,020
		16,672			3,248			2,661			2,582			25,163
Ending balance: individually evaluated for impairment	$	6,402		$	1,765		$	708		$	283		$	9,158
Ending balance: collectively evaluated for impairment	$	10,270		$	1,483		$	1,953		$	2,299		$	16,005

Total Loans:
Ending balance	$	354,020		$	32,924		$	90,867		$	114,174		$	591,985
Ending balance: individually evaluated for impairment	$	26,628		$	14,699		$	3,290		$	566		$	45,183
Ending balance: collectively evaluated for impairment	$	327,392		$	18,225		$	87,577		$	113,608		$	546,802

(1) Construction and land development loans

The Company categorizes commercial and tax-exempt loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, management capacity, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed during the loan approval process and is updated as circumstances warrant. The risk characteristics of each loan portfolio segment are as follows:

Business and Commercial Mortgages. The Business and Commercial Mortgages segment consists of commercial and industrial loans and commercial real estate loans. Commercial and industrial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee. Some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The characteristics of properties securing the Company’s commercial real estate portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. In general, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.

Construction and Land Development. Construction and Land Development (“CLD”) loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates and financial analysis of the developers and property owners. CLD loans are generally based on estimates of costs and value associated with the complete project. These estimates may be inaccurate. CLD loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

Consumer. Consumer loans consist of two segments – residential mortgage loans and personal loans. For residential mortgage loans that are secured by 1-4 family residences and are generally owner occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and personal loans are secured by personal assets, such as automobiles or recreational vehicles. Some personal loans are unsecured, such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Commercial and tax-exempt loans that are analyzed individually are assigned one of eight internal risk categories. Categories 1-4 are considered to be Pass-rated loans. Other risk category definitions for individually-analyzed commercial and tax-exempt loans are as follows:

5	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 Bank’s credit position at some future date.

6	Substandard. Loans classified as substandard are inadequately protected by the current net

	worth and paying capacity of the obligor or of the collateral securing the loans, 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.

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

8	Loss. Loans classified as loss are regarded as uncollectible and should be charged off.

In thousands of dollars		As of December 31, 2011
Commercial & Tax-exempt Loans		CLD		Owner- Occupied CRE		Other CRE		Commercial & Industrial		Total Commercial
Credit Risk Profile by Internally Assigned Rating		CLD		Owner- Occupied CRE		Other CRE		Commercial & Industrial		Total Commercial
1-4	Pass	$	11,940	$	77,447	$	96,864	$	63,466	$	249,717
5	Special Mention		2,920		15,526		15,897		17,212		51,555
6	Substandard		14,020		5,803		17,818		8,799		46,440
7	Doubtful		827		72		-		625		1,524
8	Loss		-		-		-		-		-
	Total	$	29,707	$	98,848	$	130,579	$	90,102	$	349,236

Consumer Loans
Credit risk profile based on payment activity	Residential Mortgage		Consumer Construction		Home Equity		Other Consumer		Total Consumer
Performing	$	95,045	$	10,016	$	74,387	$	22,394	$	201,842
Accruing restructured		3,078		-		171		-		3,249
Delinquent less than 90 days		3,072		-		239		70		3,381
Nonperforming		3,404		-		118		107		3,629
Total	$	104,599	$	10,016	$	74,915	$	22,571	$	212,101
Subtotal									$	561,337
Deferred loan fees and costs, overdrafts, in-process accounts										2,365
Total Portfolio Loans									$	563,702

In thousands of dollars		As of December 31, 2010
Commercial & Tax-exempt Loans		CLD		Owner-Occupied CRE		Other CRE		Commercial & Industrial		Total Commercial
Credit Risk Profile by Internally Assigned Rating		CLD		Owner-Occupied CRE		Other CRE		Commercial & Industrial		Total Commercial
1-4	Pass	$	16,246	$	79,929	$	106,379	$	51,751	$	254,305
5	Special Mention		5,942		12,556		20,467		22,697		61,662
6	Substandard		13,381		12,641		10,773		9,350		46,145
7	Doubtful		427		416		74		120		1,037
8	Loss		-		-		-		-		-
	Total	$	35,996	$	105,542	$	137,693	$	83,918	$	363,149

Consumer Loans
Credit risk profile based on payment activity	Residential Mortgage		Consumer Construction		Home Equity		Other Consumer		Total Consumer
Performing	$	104,078	$	5,558	$	76,978	$	24,507	$	211,121
Accruing restructured		2,844		-		-		-		2,844
Delinquent less than 90 days		1,854		-		411		125		2,390
Nonperforming		4,765		-		762		56		5,583
Total	$	113,541	$	5,558	$	78,151	$	24,688	$	221,938
Subtotal									$	585,087
Deferred loan fees and costs, overdrafts, in-process accounts										6,898
Total Portfolio Loans									$	591,985

The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Schedules detailing the loan portfolio aging analysis as of December 31, 2011 and 2010 follow.

Loan Portfolio Aging Analysis
December 31, 2011	Delinquent Loans								Total				Total
Thousands of dollars	30-89 Days Past Due		90 Days and Over (a) (1)		Total Past Due (b)		Current (c-b-d)		Portfolio Loans (c)		Nonaccrual Loans (d)		Nonper-forming (a+d)
Commercial
Commercial CLD	$	426	$	-	$	426	$	23,277	$	29,707	$	6,004	$	6,004
Owner-Occupied CRE		1,511		-		1,511		92,828		98,848		4,509		4,509
Other CRE		703		-		703		122,672		130,579		7,204		7,204
Commercial & Industrial		447		-		447		85,216		90,102		4,439		4,439
Consumer
Residential Mortgage		3,072		-		3,072		98,123		104,599		3,404		3,404
Consumer Construction		-		-		-		10,016		10,016		-		-
Home Equity		239		31		270		74,558		74,915		87		118
Other Consumer		70		-		70		22,394		22,571		107		107
Subtotal	$	6,468	$	31	$	6,499	$	529,084	$	561,337	$	25,754	$	25,785
Deferred loan fees and costs, overdrafts, in-process accounts										2,365
Total Portfolio Loans									$	563,702

Loan Portfolio Aging Analysis
December 31, 2010	Delinquent Loans								Total				Total
Thousands of dollars	30-89 Days Past Due		90 Days and Over (a) (1)		Total Past Due (b)		Current (c-b-d)		Portfolio Loans (c)		Nonaccrual Loans (d)		Nonper-forming (a+d)
Commercial
Commercial CLD	$	1,044	$	-	$	1,044	$	26,393	$	35,996	$	8,559	$	8,559
Owner-Occupied CRE		688		-		688		101,317		105,542		3,537		3,537
Other CRE		2,982		-		2,982		128,126		137,693		6,585		6,585
Commercial & Industrial		734		142		876		78,204		83,918		4,838		4,980
Consumer
Residential Mortgage		1,854		441		2,295		106,922		113,541		4,324		4,765
Consumer Construction		-		-		-		5,558		5,558		-		-
Home Equity		411		-		411		76,978		78,151		762		762
Other Consumer		125		-		125		24,507		24,688		56		56
Subtotal	$	7,838	$	583	$	8,421	$	548,005	$	585,087	$	28,661	$	29,244
Deferred loan fees and costs, overdrafts, in-process accounts										6,898
Total Portfolio Loans									$	591,985
(1) All are accruing.

Impaired Loans at December 31, 2011							Year Ended December 31, 2011
Thousands of dollars	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
Commercial
Commercial CLD	$	5,977	$	15,366	$	-	$	7,222	$	-
Owner-Occupied CRE		1,622		2,502		-		1,997		54
Other CRE		4,922		8,031		-		5,822		165
Commercial & Industrial		1,696		3,774		-		1,141		11
Consumer						-
Residential Mortgage		1,042		1,778		-		867		4
Consumer Construction		-		-		-		-		-
Home Equity		43		43		-		295		-
Other Consumer		189		189		-		358		-
Subtotal	$	15,491	$	31,683	$	-	$	17,702	$	234

Impaired Loans at December 31, 2011							Year Ended December 31, 2011
Thousands of dollars	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans with a specific valuation allowance
Commercial
Commercial CLD	$	8,509	$	8,594	$	2,907	$	6,956	$	328
Owner-Occupied CRE		6,391		7,925		2,344		5,441		107
Other CRE		15,259		17,205		2,085		13,502		574
Commercial & Industrial		1,335		2,372		785		1,727		38
Consumer
Residential Mortgage		4,792		5,998		870		5,740		148
Consumer Construction		-		-		-		-		-
Home Equity		171		171		35		184		5
Other Consumer		5		5		5		5		1
Subtotal	$	36,462	$	42,270	$	9,031	$	33,555	$	1,201

Total Impaired Loans
Commercial
Commercial CLD	$	14,486	$	23,960	$	2,907	$	14,178	$	328
Owner-Occupied CRE		8,013		10,427		2,344		7,438		161
Other CRE		20,181		25,236		2,085		19,324		739
Commercial & Industrial		3,031		6,146		785		2,868		49
Consumer
Residential Mortgage		5,834		7,776		870		6,607		152
Consumer Construction		-		-		-		-		-
Home Equity		214		214		35		479		5
Other Consumer		194		194		5		363		1
Total Impaired Loans	$	51,953	$	73,953	$	9,031	$	51,257	$	1,435

Impaired Loans at December 31, 2010							Year Ended December 31, 2010
Thousands of dollars	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
Commercial
Commercial CLD	$	3,434	$	8,194	$	-	$	3,872	$	-
Owner-Occupied CRE		2,457		2,853		-		2,225		60
Other CRE		1,300		1,681		-		1,405		16
Commercial & Industrial		1,301		1,330		-		783		48
Consumer
Residential Mortgage		3,129		3,693		-		4,418		-
Consumer Construction		-		-		-		-		-
Home Equity		257		257		-		478		-
Other Consumer		253		253		-		542		-
Subtotal	$	12,131	$	18,262	$	-	$	13,723	$	124

Impaired Loans at December 31, 2010							Year Ended December 31, 2010
Thousands of dollars	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans with a specific valuation allowance
Commercial
Commercial CLD	$	10,519	$	17,999	$	1,627	$	9,786	$	161
Owner-Occupied CRE		6,511		7,185		1,532		5,595		198
Other CRE		14,062		18,043		4,305		13,230		408
Commercial & Industrial		1,713		2,397		703		917		20
Consumer
Residential Mortgage		3,290		3,327		708		2,396		105
Consumer Construction		-		-		-		-		-
Home Equity		588		611		278		430		13
Other Consumer		8		8		5		10		7
Subtotal	$	36,691	$	49,571	$	9,158	$	32,364	$	911

Total Impaired Loans
Commercial
Commercial CLD	$	13,953	$	26,193	$	1,627	$	13,658	$	161
Owner-Occupied CRE		8,968		10,038		1,532		7,820		257
Other CRE		15,362		19,724		4,305		14,635		424
Commercial & Industrial		3,014		3,728		703		1,700		68
Consumer
Residential Mortgage		6,419		7,020		708		6,814		105
Consumer Construction		-		-		-		-		-
Home Equity		845		868		278		908		13
Other Consumer		261		261		5		552		7
Total Impaired Loans	$	48,822	$	67,833	$	9,158	$	46,087	$	1,035

Included in the above impaired loan totals were $21.8 million and $17.3 million of loan modifications meeting the definition of a troubled debt restructuring that were accruing interest and performing in accordance with their agreements at December 31, 2011 and 2010, respectively. Substantially all of the interest income recognized in the tables above was recorded on a cash basis.

Interest payments received on impaired loans are recorded as interest income unless collection of the remaining recorded investment is doubtful, at which time payments received are recorded as reductions to principal. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the judgment of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status. These policies apply to each class of the Company’s loan portfolio.

In the course of working with borrowers, the Bank may choose to restructure the contractual terms of certain loans. In this scenario, the Bank attempts to work out an alternative payment schedule with the borrower in order to optimize collectability of the loan. Any loans that are modified are reviewed by the Bank to identify if a troubled debt restructuring (“TDR”) has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Bank grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two. If such efforts by the Bank do not result in a satisfactory arrangement, the loan is referred to legal counsel, at which time foreclosure proceedings are initiated. At any time prior to a sale of the property at foreclosure, the Bank may terminate foreclosure proceedings if the borrower is able to work out a satisfactory payment plan.

It is the Bank’s policy to have any restructured loans which are on nonaccrual status prior to being restructured remain on nonaccrual status until six months of satisfactory borrower performance, at which time management would consider its return to accrual status. The balance of nonaccrual restructured loans, which is included in nonaccrual loans, was $10.7 million at December 31, 2011 and $8.5 million at December 31, 2010. If the restructured loan is on accrual status prior to being restructured, it is reviewed to determine if the restructured loan should remain on accrual status. The balance of accruing restructured loans was $21.8 million at December 31, 2011 and $17.3 million at December 31, 2010.

Loans that are considered TDRs are classified as performing, unless they are on nonaccrual status or greater than 90 days delinquent as of the end of the most recent quarter. All TDRs are considered impaired by the Company. When it is determined that the borrower has met the six month satisfactory performance period (or six payments) under modified terms and the restructuring agreement specified an interest rate greater than or equal to an acceptable rate for a comparable new loan, the loan is considered to be performing. On a quarterly basis, the Company individually reviews all TDR loans to determine if a loan meets both of these criteria.

Accruing restructured loans at December 31, 2011 are comprised of two categories of loans on which interest is being accrued under their restructured terms, and the loans are current or less than ninety days past due. The first category consists of $18.6 million of commercial loans, primarily comprised of business loans that have been temporarily modified as interest-only loans, generally for a period of up to one year, without a sufficient corresponding increase in the interest rate. Within this category are $8.2 million of CLD loans that have been renewed as interest only, generally for a period of up to one year, to assist the borrower.

The Bank does not generally forgive principal or interest on restructured loans. However, when a loan is restructured, principal is generally received on a delayed basis as compared to the original repayment schedule. CLD loans that are restructured are generally modified to require interest-only for a period of time. The Bank does not generally reduce interest rates on restructured commercial loans. The average yield on modified commercial loans was 5.38%, compared to 5.54% earned on the entire commercial loan portfolio in the fourth quarter of 2011.

The second category included in accruing restructured loans consists of residential mortgage and home equity loans whose terms have been restructured at less than market terms and include rate modifications, extension of maturity, and forbearance. This category consists of fifteen loans for a total of $3.2 million at December 31, 2011. The average yield on modified residential mortgage and home equity loans was 3.96%, compared to 5.71% earned on the entire residential mortgage loan portfolio in the fourth quarter of 2011.

With regard to determination of the amount of the allowance for loan losses, all restructured loans are considered to be impaired. As a result, the determination of the amount of impaired loans for each portfolio segment within troubled debt restructurings is the same as detailed previously above.

	Newly Classified Accruing Troubled Debt Restructurings
Twelve months ended	December 31, 2011						December 31, 2010
Dollars in thousands	Total Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance		Total Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Commercial
Commercial CLD		4	$	3,858	$	3,858		6	$	4,508	$	4,508
Owner-Occupied CRE		2		479		479		-		-		-
Other CRE		3		3,128		3,128		5		6,853		6,853
Commercial & Industrial		3		704		704		4		443		443
Consumer
Residential Mortgage		3		1,199		1,199		9		1,879		1,879
Total		15	$	9,368	$	9,368	$	25	$	13,858	$	13,858

Twelve months ended December 31, 2011	Troubled Debt Restructurings that Subsequently Defaulted
Dollars in thousands	Number of Loans		Recorded Balance
Commercial
Commercial CLD		1	$	119
Other CRE		3		740
Commercial & Industrial		-		-
Consumer
Residential Mortgage		3		1,236
Total		7	$	2,095

As a result of adopting the amendments in ASU No. 2011-02, the Company reassessed all restructurings that occurred on or after the beginning of the current fiscal year (January 1, 2011) to determine whether they are now considered troubled debt restructurings. The Company identified as TDRs certain loans for which the allowance for loan losses had previously been measured under a general allowance methodology. Upon identifying those loans as TDRs, the Company identified them as impaired under the guidance in ASC 310-10-35. The amendments in ASU No. 2011-02 require prospective application of the impairment measurement guidance in ASC 310-10-35 for those loans newly identified as impaired. At the end of the first interim period of adoption (September 30, 2011), the recorded investment in loans for which the allowance was previously measured under a general allowance methodology and are now impaired under ASC 310-10-35 was $4.0 million, and the allowance for loan losses associated with those loans, on the basis of a current evaluation of loss, was $1.5 million.