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LOANS
 3 Months Ended
Mar. 31, 2013
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
11.LOANS

Loans consist of the following:

 

  March 31, 2013  December 31, 2012 
       
Commercial real estate $417,405,318  $419,667,312 
Residential first mortgages  169,088,653   177,663,354 
Construction and land development  31,061,899   31,818,782 
Home equity and second mortgage  21,578,772   21,982,375 
Commercial loans  88,045,436   88,157,606 
Consumer loans  1,022,981   995,206 
Commercial equipment  15,728,491   16,267,684 
   743,931,550   756,552,319 
Less:        
Deferred loan fees  663,030   664,610 
Allowance for loan loss  8,350,000   8,246,957 
   9,013,030   8,911,567 
         
  $734,918,520  $747,640,752 

 

At March 31, 2013, the Bank’s allowance for loan losses totaled $8,350,000, or 1.12% of loan balances, as compared to $8,246,957, or 1.09% of loan balances, at December 31, 2012. Management’s determination of the adequacy of the allowance is based on a periodic evaluation of the portfolio with consideration given to the overall loss experience, current economic conditions, size, growth and composition of the loan portfolio, financial condition of the borrowers and other relevant factors that, in management’s judgment, warrant recognition in providing an adequate allowance.

 

At March 31, 2013 and December 31, 2012, gross loans included $1,446,342 and $1,454,757, respectively, from the sale of an OREO property that the Bank financed during 2011 that did not qualify for full accrual sales treatment under ASC Topic 360-20-40 “Property Plant and Equipment – Derecognition”. The Bank utilized the cost recovery method and deferred a gain of $225,000. The deferred gain balance was $225,000 at March 31, 2013 and December 31, 2012, respectively.

 

Risk Characteristics of Portfolio Segments

The Company manages its credit products and exposure to credit losses (credit risk) by the following specific portfolio segments (classes), which are levels at which the Company develops and documents its allowance for loan loss methodology. These segments are:

 

Commercial Real Estate (“CRE”)

Commercial and other real estate projects include office buildings, retail locations, churches, other special purpose buildings and commercial construction. Commercial construction balances were below 5% of the CRE portfolio at March 31, 2013 and December 31, 2012, respectively. The Bank offers both fixed-rate and adjustable-rate loans under these product lines. The primary security on a commercial real estate loan is the real property and the leases that produce income for the real property. The Bank generally limits its exposure to a single borrower to 15% of the Bank’s capital. Loans secured by commercial real estate are generally limited to 80% of the lower of the appraised value or sales price at origination and have an initial contractual loan payment period ranging from three to 20 years.

 

Loans secured by commercial real estate are larger and involve greater risks than one-to-four family residential mortgage loans. Because payments on loans secured by such properties are often dependent on the successful operation or management of the properties, repayment of such loans may be subject to a greater extent to adverse conditions in the real estate market or the economy.

 

Residential First Mortgages

Residential first mortgage loans made by the Bank are generally long term loans, amortized on a monthly basis, with principal and interest due each month. The initial contractual loan payment period for residential loans typically ranges from ten to 30 years. The Bank’s experience indicates that real estate loans remain outstanding for significantly shorter time periods than their contractual terms. Borrowers may refinance or prepay loans at their option, without penalty. The Bank originates both fixed-rate and adjustable-rate residential first mortgages.

 

The annual and lifetime limitations on interest rate adjustments may limit the increases in interest rates on these loans. There are also unquantifiable credit risks resulting from potential increased costs to the borrower as a result of repricing of adjustable-rate mortgage loans. During periods of rising interest rates, the risk of default on adjustable-rate mortgage loans may increase due to the upward adjustment of interest cost to the borrower.

 

Construction and Land Development

The Bank offers loans for the construction of one-to-four family dwellings. Generally, these loans are secured by the real estate under construction as well as by guarantees of the principals involved. In addition, the Bank offers loans to acquire and develop land, as well as loans on undeveloped, subdivided lots for home building by individuals.

 

A decline in demand for new housing might adversely affect the ability of borrowers to repay these loans. Construction and land development loans are inherently riskier than providing financing on owner-occupied real estate. The Bank’s risk of loss is affected by the accuracy of the initial estimate of the market value of the completed project as well as the accuracy of the cost estimates made to complete the project. In addition, the volatility of the real estate market has made it increasingly difficult to ensure that the valuation of land associated with these loans is accurate. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, the Bank may be required to advance funds beyond the amount originally committed to permit completion of the development. If the estimate of value proves to be inaccurate, a project’s value might be insufficient to assure full repayment. As a result of these factors, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the project rather than the ability of the borrower or guarantor to repay principal and interest. If the Bank forecloses on a project, there can be no assurance that the Bank will be able to recover all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs.

 

Home Equity and Second Mortgage Loans

The Bank maintains a portfolio of home equity and second mortgage loans. These products contain a higher risk of default than residential first mortgages as in the event of foreclosure, the first mortgage would need to be paid off prior to collection of the second mortgage. This risk has been heightened as the market value of residential property has declined.

 

Commercial Loans

The Bank offers commercial loans to its business customers. The Bank offers a variety of commercial loan products including term loans and lines of credit. Such loans are generally made for terms of five years or less. The Bank offers both fixed-rate and adjustable-rate loans under these product lines. When making commercial business loans, the Bank considers the financial condition of the borrower, the borrower’s payment history of both corporate and personal debt, the projected cash flows of the business, the viability of the industry in which the consumer operates, the value of the collateral, and the borrower’s ability to service the debt from income. These loans are primarily secured by equipment, real property, accounts receivable, or other security as determined by the Bank.

 

Commercial loans are made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself.

 

Consumer Loans

The Bank has developed a number of programs to serve the needs of its customers with primary emphasis upon loans secured by automobiles, boats, recreational vehicles and trucks. The Bank also makes home improvement loans and offers both secured and unsecured personal lines of credit. Consumer loans entail greater risk from other loan types due to being secured by rapidly depreciating assets or the reliance on the borrower’s continuing financial stability.

 

Commercial Equipment Loans

These loans consist primarily of fixed-rate, short-term loans collateralized by a commercial customer’s equipment. When making commercial equipment loans, the Bank considers the same factors it considers when underwriting a commercial business loan. Commercial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. In the case of business failure, collateral would need to be liquidated to provide repayment for the loan. In many cases, the highly specialized nature of collateral equipment would make full recovery from the sale of collateral problematic.

 

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses at and for the three months ended March 31, 2013 and March 31, 2012, respectively, and the year ended December 31, 2012 and loan receivable balances at March 31, 2013 and March 31, 2012, respectively, and at December 31, 2012. An allocation of the allowance to one category of loans does not prevent the Company’s ability to utilize the allowance to absorb losses in a different category. The loan receivables are disaggregated on the basis of the Company’s impairment methodology.

 

  Commercial
Real Estate		  Residential
First
Mortgage		  Construction
and Land
 Development		  Home
Equity and
Second Mtg.		  Commercial
Loans		  Consumer
Loans		  Commercial
Equipment		  Total 
At and For the Three Months Ended March 31, 2013                         
                                 
Allowance for loan losses:                                
Balance at January 1, $4,089,834  $1,083,228  $533,430  $279,819  $1,949,024  $19,341  $292,281  $8,246,957 
Charge-offs  -   (58,840)  (35,903)  -   -   (8,976)  -   (103,719)
Recoveries  -   992   -   -   992   992   49,613   52,589 
Provisions  (549,904)  959,785   (449)  38,452   (126,476)  5,729   (172,964)  154,173 
Balance at March 31, $3,539,930  $1,985,165  $497,078  $318,271  $1,823,540  $17,086  $168,930  $8,350,000 
Ending balance: individually evaluated for impairment $767,349  $444,028  $-  $39,800  $307,930  $-  $24,703  $1,583,810 
Ending balance: collectively  evaluated for impairment $2,772,581  $1,541,137  $497,078  $278,471  $1,515,610  $17,086  $144,227  $6,766,190 
Loan receivables:                                
Ending balance $417,405,318  $169,088,653  $31,061,899  $21,578,772  $88,045,436  $1,022,981  $15,728,491  $743,931,550 
Ending balance: individually evaluated for impairment $22,599,139  $5,137,875  $4,621,596  $482,502  $9,107,430  $46,664  $220,206  $42,215,412 
Ending balance: collectively  evaluated for impairment $394,806,179  $163,950,778  $26,440,303  $21,096,270  $78,938,006  $976,317  $15,508,285  $701,716,138 

 

  Commercial
Real Estate		  Residential
First
Mortgage		  Construction
and Land
 Development		  Home
Equity and
Second Mtg.		  Commercial
Loans		  Consumer
 Loans		  Commercial
Equipment		  Total 
At and For the Year Ended December 31, 2012                         
                                 
Allowance for loan losses:                                
Balance at January 1, $2,525,199  $539,205  $354,385  $143,543  $3,850,294  $19,119  $223,296  $7,655,041 
Charge-offs  (486,431)  (10,987)  (140,835)  (210,753)  (1,003,824)  (4,994)  (168,802)  (2,026,626)
Recoveries  -   37,524   -   -   51,350   987   -   89,861 
Provisions  2,051,066   517,486   319,880   347,029   (948,796)  4,229   237,787   2,528,681 
Balance at December 31, $4,089,834  $1,083,228  $533,430  $279,819  $1,949,024  $19,341  $292,281  $8,246,957 
Ending balance: individually evaluated for impairment $785,878  $403,475  $-  $-  $353,883  $-  $4,421  $1,547,657 
Ending balance: collectively evaluated for impairment $3,303,956  $679,753  $533,430  $279,819  $1,595,141  $19,341  $287,860  $6,699,300 
Loan receivables:                                
Ending balance $419,667,312  $177,663,354  $31,818,782  $21,982,375  $88,157,606  $995,206  $16,267,684  $756,552,319 
Ending balance: individually evaluated for impairment $21,618,890  $3,367,827  $4,877,868  $291,000  $8,778,681  $51,748  $4,421  $38,990,435 
Ending balance: collectively  evaluated for impairment $398,048,422  $174,295,527  $26,940,914  $21,691,375  $79,378,925  $943,458  $16,263,263  $717,561,884 

 

 

  Commercial
Real Estate		  Residential
First
Mortgage		  Construction
and Land
 Development		  Home
Equity and
Second Mtg.		  Commercial
Loans		  Consumer
 Loans		  Commercial
Equipment		  Total 
At and For the Three Months Ended March 31, 2012                         
                                 
Allowance for loan losses:                                
Balance at January 1, $2,525,199  $539,205  $354,385  $143,543  $3,850,294  $19,119  $223,296  $7,655,041 
Charge-offs  (36,452)  -   -   -   (43,349)  (985)  -   (80,786)
Recoveries  -   -   -   -   469   -   -   469 
Provisions  896,289   104,803   94,021   121,595   (1,014,365)  216   138,515   341,074 
Balance at March 31, $3,385,036  $644,008  $448,406  $265,138  $2,793,049  $18,350  $361,811  $7,915,798 
Ending balance: individually  evaluated for impairment $788,146  $113,000  $100,000  $89,540  $892,200  $-  $150,010  $2,132,896 
Ending balance: collectively  evaluated for impairment $2,596,890  $531,008  $348,406  $175,598  $1,900,849  $18,350  $211,801  $5,782,902 
Loan receivables:                                
Ending balance $387,062,534  $171,910,733  $36,254,152  $23,455,588  $93,410,257  $960,745  $18,567,449  $731,621,458 
Ending balance: individually  evaluated for impairment $39,662,243  $5,725,407  $10,915,597  $463,601  $18,451,306  $74,928  $237,977  $75,531,059 
Ending balance: collectively  evaluated for impairment $347,400,291  $166,185,326  $25,338,555  $22,991,987  $74,958,951  $885,817  $18,329,472  $656,090,399 

 

Non-accrual and Past Due Loans

 

Non-accrual loans as of March 31, 2013 and December 31, 2012 were as follows:

 

  March 31, 2013 
  90 or Greater
Days Delinquent		  Number
 of Loans		  Nonacccrual
Performing
Loans		  Number
 of Loans		  Total Dollars  Total
Number
 of Loans		 
                   
Commercial real estate $2,556,284   8  $3,750,389   2  $6,306,673   10 
Residential first mortgages  2,876,028   9   565,091   3   3,441,119   12 
Construction and land development  -   -   -   -   -   - 
Home equity and second mortgage  187,502   5   -   -   187,502   5 
Commercial loans  3,668,718   11   -   -   3,668,718   11 
Consumer loans  -   -   46,664   1   46,664   1 
Commercial equipment  216,383   4   -   -   216,383   4 
  $9,504,915   37  $4,362,144   6  $13,867,059   43 

 

  December 31, 2012 
  90 or Greater
Days Delinquent		  Number
 of Loans		  Nonacccrual
Performing
Loans		  Number
 of Loans		  Total Dollars  Total
Number
 of Loans		 
                   
Commercial real estate $1,527,844   7  $3,802,947   2  $5,330,791   9 
Residential first mortgages  3,169,404   10   569,693   3   3,739,097   13 
Construction and land development  -   -   -   -   -   - 
Home equity and second mortgage  71,296   2   -   -   71,296   2 
Commercial loans  3,732,090   11   -   -   3,732,090   11 
Consumer loans  -   -   51,748   1   51,748   1 
Commercial equipment  216,383   4   -   -   216,383   4 
  $8,717,017   34  $4,424,388   6  $13,141,405   40 

 

The Bank categorized six performing loans totaling $4,362,144 and $4,424,388 as non-accrual loans at March 31, 2013 and December 31, 2012, respectively. These six loans represent one well-secured commercial relationship with no specific reserves in the allowance due to the Bank's superior credit position with underlying collateral. It is management’s belief that there is no current risk of loss to the Bank for this relationship. These loans were classified as non-accrual loans due to the customer’s operating results. In accordance with the Company’s policy, interest income is recognized on a cash-basis for these loans.

 

Non-accrual loans on which the recognition of interest has been discontinued, which did not have a specific allowance for impairment, amounted to $11,640,973 and $11,371,542 at March 31, 2013 and December 31, 2012, respectively. Interest due but not recognized on these balances at March 31, 2013 and December 31, 2012 was $501,280 and $443,856, respectively. Non-accrual loans with a specific allowance for impairment on which the recognition of interest has been discontinued amounted to $2,226,086 and $1,769,863 at March 31, 2013 and December 31, 2012, respectively. Interest due but not recognized on these balances at March 31, 2013 and December 31, 2012 was $211,279 and $182,106, respectively.

 

An analysis of past due loans as of March 31, 2013 and December 31, 2012 was as follows:

 

March 31, 2013 Current  31-60
 Days		  61-89
 Days		  90 or Greater
Days		  Total
 Past Due		  Total
Loan
 Receivables		 
                         
Commercial real estate $411,789,049  $3,059,985  $-  $2,556,284  $5,616,269  $417,405,318 
Residential first mortgages  165,428,069   784,556   -   2,876,028   3,660,584   169,088,653 
Construction and land dev.  31,061,899   -   -   -   -   31,061,899 
Home equity and second mtg.  21,305,488   85,782   -   187,502   273,284   21,578,772 
Commercial loans  81,092,489   9,963   3,274,266   3,668,718   6,952,947   88,045,436 
Consumer loans  1,022,981   -   -   -   -   1,022,981 
Commercial equipment  15,416,281   95,827   -   216,383   312,210   15,728,491 
Total $727,116,256  $4,036,113  $3,274,266  $9,504,915  $16,815,294  $743,931,550 

 

December 31, 2012 Current  31-60
 Days		  61-89
 Days		  90 or Greater
Days		  Total
 Past Due		  Total
Loan
 Receivables		 
                   
Commercial real estate $416,721,658  $-  $1,417,810  $1,527,844  $2,945,654  $419,667,312 
Residential first mortgages  173,593,886   97,307   802,757   3,169,404   4,069,468   177,663,354 
Construction and land dev.  31,818,782   -   -   -   -   31,818,782 
Home equity and second mtg.  21,499,018   350,715   61,346   71,296   483,357   21,982,375 
Commercial loans  84,384,426   -   41,090   3,732,090   3,773,180   88,157,606 
Consumer loans  983,094   9,363   2,749   -   12,112   995,206 
Commercial equipment  15,659,007   371,921   20,373   216,383   608,677   16,267,684 
Total $744,659,871  $829,306  $2,346,125  $8,717,017  $11,892,448  $756,552,319 

 

There were no accruing loans 90 days or greater past due at March 31, 2013 and December 31, 2012, respectively.

 

Credit Quality Indicators

A risk grading scale is used to assign grades to commercial real estate, construction and land development, commercial loans and commercial equipment loans. Loans are graded at inception, annually thereafter when financial statements are received and at other times when there is an indication that a credit may have weakened or improved. Only commercial loan relationships with an aggregate exposure to the Bank of $750,000 or greater are subject to being risk rated.

 

Residential first mortgages, home equity and second mortgages and consumer loans are evaluated for creditworthiness in underwriting and are monitored based on borrower payment history. These loans are classified as unrated unless they are part of a larger commercial relationship that requires grading or are troubled debt restructures or nonperforming loans with an Other Assets Especially Mentioned (“OAEM”) or higher risk rating due to a delinquent payment history.

 

Management regularly reviews credit quality indicators as part of its individual loan reviews and on a monthly and quarterly basis. The overall quality of the Bank’s loan portfolio is assessed using the Bank’s risk grading scale, the level and trends of net charge-offs, nonperforming loans and delinquencies, the performance of troubled debt restructured loans and the general economic conditions in the Company’s geographical market. This review process is assisted by frequent internal reporting of loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Credit quality indicators and allowance factors are adjusted based on management’s judgment during the monthly and quarterly review process.

 

Loans subject to risk ratings are graded on a scale of one to 10. The Company considers loans classified substandard, doubtful and loss as classified assets for regulatory and financial reporting.

 

Ratings 1 thru 6 - Pass

Ratings 1 thru 6 have asset risks ranging from excellent low risk to adequate. The specific rating assigned considers customer history of earnings, cash flows, liquidity, leverage, capitalization, consistency of debt service coverage, the nature and extent of customer relationship and other relevant specific business factors such as the stability of the industry or market area, changes to management, litigation or unexpected events that could have an impact on risks.

 

Rating 7 - OAEM (Other Assets Especially Mentioned)– Special Mention

These credits, while protected by the financial strength of the borrowers, guarantors or collateral, have reduced quality due to economic conditions, less than adequate earnings performance or other factors which require the lending officer to direct more than normal attention to the credit. Financing alternatives may be limited and/or command higher risk interest rates. OAEM loans are the first adversely classified assets on our watch list. These relationships will be reviewed at least quarterly.

 

Rating 8 - Substandard

Substandard assets are assets that are inadequately protected by the sound worth or paying capacity of the borrower or of the collateral pledged. These assets have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. The loans may have a delinquent history or combination of weak collateral, weak guarantor strength or operating losses. When a loan is assigned to this category the Bank may estimate a specific reserve in the loan loss allowance analysis. These assets listed may include assets with histories of repossessions or some that are non-performing bankruptcies. These relationships will be reviewed at least quarterly.

 

Rating 9 - Doubtful

Doubtful assets have many of the same characteristics of Substandard with the exception that the Bank has determined that loss is not only possible but is probable and the risk is close to certain that loss will occur. When a loan is assigned to this category the Bank will identify the probable loss and it will receive a specific reserve in the loan loss allowance analysis. These relationships will be reviewed at least quarterly.

 

Rating 10 - Loss

Once an asset is identified as a definite loss to the Bank, it will receive the classification of “loss”. There may be some future potential recovery; however it is more practical to write off the loan at the time of classification. Losses will be taken in the period in which they are determined to be uncollectable.

 

Credit quality indicators as of March 31, 2013 and December 31, 2012 were as follows:

 

Credit Risk Profile by Internally Assigned Grade

 

  Commercial Real Estate  Construction and Land Dev. 
  3/31/2013  12/31/2012  3/31/2013  12/31/2012 
                 
Unrated $58,812,409  $59,930,126  $4,631,466  $4,330,321 
Pass  328,207,209   329,882,941   19,041,110   19,752,749 
Special mention  5,408,019   4,880,758   -   - 
Substandard  24,977,681   24,973,487   7,389,323   7,735,712 
Doubtful  -   -   -   - 
Loss  -   -   -   - 
Total $417,405,318  $419,667,312  $31,061,899  $31,818,782 

 

  Commercial Loans  Commercial Equipment 
  3/31/2013  12/31/2012  3/31/2013  12/31/2012 
             
Unrated $11,974,551  $11,627,726  $5,076,787  $5,082,713 
Pass  61,910,052   64,436,809   8,778,228   11,180,550 
Special mention  1,905,558   -   1,848,625   - 
Substandard  12,255,275   12,093,071   3,823   4,421 
Doubtful  -   -   21,028   - 
Loss  -   -   -   - 
Total $88,045,436  $88,157,606  $15,728,491  $16,267,684 

 

Credit Risk Profile Based on Payment Activity

 

  Residential First Mortgages  Home Equity and Second Mtg.  Consumer Loans 
  3/31/2013  12/31/2012  3/31/2013  12/31/2012  3/31/2013  12/31/2012 
                   
Performing $166,212,625  $174,493,950  $21,391,270  $21,911,079  $1,022,981  $995,206 
Nonperforming  2,876,028   3,169,404   187,502   71,296   -   - 
Total $169,088,653  $177,663,354  $21,578,772  $21,982,375  $1,022,981  $995,206 

 

Impaired Loans and Troubled Debt Restructures (“TDRs”)

Impaired loans, including TDRs, at March 31, 2013 and March 31, 2012, respectively, and at December 31, 2012 were as follows:

 

March 31, 2013 Unpaid
Contractual
Principal
Balance		  Recorded
Investment
With No
Allowance		  Recorded
Investment
With
Allowance		  Total
 Recorded
Investment		  Related
Allowance		  Three Month
Average
Recorded
Investment		  Three Month
Interest
Income
Recognized		 
                      
Commercial real estate $22,599,139  $19,762,215  $2,836,924  $22,599,139  $767,349  $21,639,940  $250,517 
Residential first mortgages  5,137,875   4,224,822   913,053   5,137,875   444,028   5,180,228   51,605 
Construction and land dev.  4,627,433   4,621,596   -   4,621,596   -   4,468,755   68,575 
Home equity and second mtg.  482,502   442,702   39,800   482,502   39,800   484,854   2,914 
Commercial loans  9,107,430   8,797,355   310,075   9,107,430   307,930   8,941,164   78,014 
Consumer loans  46,664   46,664   -   46,664   -   49,045   834 
Commercial equipment  239,107   195,355   24,851   220,206   24,703   240,402   114 
Total $42,240,150  $38,090,709  $4,124,703  $42,215,412  $1,583,810  $41,004,388  $452,573 

 

December 31, 2012 Unpaid
Contractual
Principal
Balance		  Recorded
Investment
With No
Allowance		  Recorded
Investment
With
Allowance		  Total
 Recorded
Investment		  Related
Allowance		  Average
Recorded
Investment		  Interest
Income
Recognized		 
                      
Commercial real estate $21,618,890  $18,804,478  $2,814,412  $21,618,890  $785,878  $22,501,842  $1,119,715 
Residential first mortgages  3,367,827   2,362,062   1,005,765   3,367,827   403,475   3,388,867   157,595 
Construction and land dev.  4,877,868   4,877,868   -   4,877,868   -   4,792,982   276,260 
Home equity and second mtg.  291,000   291,000   -   291,000   -   221,000   6,783 
Commercial loans  8,778,681   8,330,442   448,238   8,778,681   353,883   9,153,074   284,095 
Consumer loans  51,748   51,748   -   51,748   -   64,459   5,284 
Commercial equipment  4,421   -   4,421   4,421   4,421   5,112   318 
Total $38,990,435  $34,717,598  $4,272,836  $38,990,435  $1,547,657  $40,127,336  $1,850,050

 

March 31, 2012 Unpaid
Contractual
Principal
Balance		  Recorded
Investment
With No
Allowance		  Recorded
Investment
With
Allowance		  Total
 Recorded
Investment		  Related
Allowance		  Three Month
Average
Recorded
Investment		  Three Month
Interest
Income
Recognized		 
                      
Commercial real estate $12,629,243  $5,475,024  $6,746,569  $12,221,593  $788,146  $12,232,296  $154,142 
Residential first mortgages  1,525,146   907,368   617,778   1,525,146   113,000   1,525,217   20,023 
Construction and land dev.  3,130,466   1,716,916   1,413,550   3,130,466   100,000   3,130,466   12,818 
Home equity and second mtg.  143,858   -   143,858   143,858   89,540   143,858   - 
Commercial loans  4,217,529   1,894,390   2,323,139   4,217,529   892,200   4,217,529   16,732 
Commercial equipment  150,010   -   150,010   150,010   150,010   150,677   927 
Total $21,796,252  $9,993,698  $11,394,904  $21,388,602  $2,132,896  $21,400,043  $204,642 

 

TDRs, included in the impaired loan schedules above, as of March 31, 2013 and December 31, 2012, respectively were as follows:

 

  March 31, 2013  December 31, 2012 
  Dollars  Number
 of Loans		  Dollars  Number
 of Loans		 
             
Commercial real estate $3,096,481   7  $3,097,214   7 
Residential first mortgages  1,492,466   4   1,418,229   3 
  $4,588,947   11  $4,515,443   10 

 

At March 31, 2013 and December 31, 2012, all TDRs were performing according to the terms of their restructured agreements. Interest income in the amount of $48,881 and $220,326 was recognized on these loans for the three months ended March 31, 2013 and the year ended December 31, 2012, respectively. There were no specific reserves in the allowance for loan losses relative to TDR loans at March 31, 2013 and December 31, 2012.

 

During the three months ended March 31, 2013, the Bank entered into one TDR for $77,165 for a residential first mortgage. During the year ended December 31, 2012, the Bank entered into TDRs for eight commercial real estate loans totaling $3,212,894 and three residential first mortgages totaling $1,419,657. For the year ended December 31, 2012, two commercial real estate TDR loans were charged-off in the amount of $415,995. One of the two charged-off commercial real estate loans was transferred to OREO with a balance of $382,500.