OTHER REAL ESTATE OWNED ("OREO")

3 Months Ended

Mar. 31, 2013

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

9. OTHER REAL ESTATE OWNED (“OREO”)

OREO assets are presented net of the allowance for losses. The Company considers OREO as classified assets for regulatory and financial reporting. An analysis of the activity follows.

	Three Months Ended March 31,						Year Ended December 31,
	2013			2012			2012
Balance at beginning of year	$	6,891,353		$	5,028,513		$	5,028,513
Additions of underlying property		370,800			135,270			4,020,494
Disposals of underlying property		-			(395,949	)		(1,483,449	)
Valuation allowance		(310,500	)		(300,000	)		(674,205	)
Balance at end of period	$	6,951,653		$	4,467,834		$	6,891,353

During the three months ended March 31, 2012, the Bank disposed of two OREO properties resulting in proceeds of $299,032 and recognized net losses of $96,917. There were no disposals during the three months ended March 31, 2013.

Expenses applicable to OREO assets include the following.

	Three Months Ended March 31,
	2013		2012
Valuation allowance	$	310,500	$	300,000
Operating expenses		40,862		(1,701	)
	$	351,362	$	298,299

Operating expenses for the three months ended March 31, 2012 included $7,600 in deposits refunded on sold foreclosed real estate.