1.
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We note your response to comment 3 in your letter dated September 12, 2012. Based on your proposed disclosure on page 10, it appears the total recorded investment in financing receivables acquired with deteriorated credit quality totaled $936,243 at June 30, 2012. Please reconcile this amount to the acquired impaired loans receivable of $14,329,955 at June 30, 2012 disclosed on page 6 of your response and explain why the amounts are not the same.
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2.
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We note your response to comment 4 in your letter dated September 12, 2012. Please clarify your disclosure to clearly label appropriate amounts as unpaid principal balance. Additionally, please ensure that you disclose this information for all impaired loans including accruing and non-accrual TDRs. It may be helpful to consider the example disclosure in ASC 310-10-55-10.
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Non-Accrual and Past Due Loans and Troubled Debt Restructurings
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Recorded Unpaid Principal Balance
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June 30, 2012
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||||||||||||||||||||||||||||
Legacy | Acquired(1 | |||||||||||||||||||||||||||
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Unpaid
Principal
Balance
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Average
Unpaid
Principal
Balance
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Interest Not Accrued(2
|
Unpaid
Principal
Balance
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Average
Unpaid
Principal
Balance
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Interest Not Accrued(2
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Total
Unpaid
Principal
Balance
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Real Estate
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Commercial
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817,456 | 817,456 | 46,627 | 2,431,806 | 2,442,435 | 870,081 | 3,249,262 | |||||||||||||||||||||
Construction
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969,337 | 969,337 | 267,641 | 850,000 | 1,015,929 | 705,281 | 1,819,337 | |||||||||||||||||||||
Residential
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- | - | - | 1,300,661 | 1,174,509 | 388,346 | 1,300,661 | |||||||||||||||||||||
Commercial
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- | - | - | 259,141 | 260,018 | 51,468 | 259,141 | |||||||||||||||||||||
Consumer
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- | - | - | - | - | - | - | |||||||||||||||||||||
Total non-performing loans
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$ | 1,786,793 | $ | 1,786,793 | $ | 314,268 | $ | 4,841,608 | $ | 4,892,891 | $ | 2,015,176 | $ | 6,628,401 | ||||||||||||||
Accruing past due loans:
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30-59 days past due
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Real estate
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1,470,732 | 425,107 | 1,895,839 | |||||||||||||||||||||||||
Commercial
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439,768 | 237,115 | 676,883 | |||||||||||||||||||||||||
Consumer
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- | 42,124 | 42,124 | |||||||||||||||||||||||||
Total 30-59 days past due
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1,910,500 | 704,346 | 2,614,846 | |||||||||||||||||||||||||
60-89 days past due
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Real estate
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888,719 | - | 888,719 | |||||||||||||||||||||||||
Commercial
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- | 20,993 | 20,993 | |||||||||||||||||||||||||
Consumer
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- | 699 | 699 | |||||||||||||||||||||||||
Total 60-89 days past due
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888,719 | 21,692 | 910,411 | |||||||||||||||||||||||||
90 or more days past due
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Consumer
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- | 940,072 | 940,072 | |||||||||||||||||||||||||
Total accruing past due loans
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$ | 2,799,219 | $ | 1,666,110 | $ | 4,465,329 | ||||||||||||||||||||||
Accruing Troubled Debt
Restructurings
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Real Estate
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499,122 | 2,105,531 | 152,848 | 152,848 | 651,970 | |||||||||||||||||||||||
Consumer
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- | 47,557 | 442 | 781 | 442 | |||||||||||||||||||||||
Total Accruing Troubled Debt
Restructurings
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$ | 499,122 | $ | 2,153,088 | $ | 153,290 | $ | 153,629 | $ | 652,412 |
Non-Accrual and Past Due Loans and Troubled Debt Restructurings
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Recorded Unpaid Principal Balance
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December 31, 2011
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Legacy | Acquired(1 | |||||||||||||||||||||||||||
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Unpaid
Principal
Balance
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Average
Unpaid
Principal
Balance
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Interest Not Accrued(2
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Account Balance
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Average
Unpaid
Principal
Balance
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Interest Not Accrued(2
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Total
Account
Balance
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Real Estate
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Commercial
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$ | - | 292,334 | $ | - | $ | 2,288,900 | 1,750,096 | $ | 1,164,630 | $ | 2,288,900 | ||||||||||||||||
Construction
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1,169,337 | 584,961 | 212,484 | 1,184,146 | 849,787 | 255,560 | 2,353,483 | |||||||||||||||||||||
Residential
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- | - | - | 1,019,942 | 755,458 | 241,093 | 1,019,942 | |||||||||||||||||||||
Commercial
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77,975 | 19,494 | 1,735 | 90,039 | 192,549 | 33,041 | 168,014 | |||||||||||||||||||||
Consumer
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- | - | - | - | - | - | - | |||||||||||||||||||||
Total non-performing loans
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$ | 1,247,312 | $ | 896,789 | $ | 214,219 | $ | 4,583,027 | $ | 3,547,890 | $ | 1,694,324 | $ | 5,830,339 | ||||||||||||||
Accruing past due loans:
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30-59 days past due
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Real estate
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421,805 | 474,651 | 896,456 | |||||||||||||||||||||||||
Commercial
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- | - | - | |||||||||||||||||||||||||
Consumer
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- | 22,698 | 22,698 | |||||||||||||||||||||||||
Total 30-59 days past due
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421,805 | 497,349 | 919,154 | |||||||||||||||||||||||||
60-89 days past due
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Real estate
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311,762 | 338,431 | 650,193 | |||||||||||||||||||||||||
Commercial
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11,043 | - | 11,043 | |||||||||||||||||||||||||
Consumer
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- | 3,494 | 3,494 | |||||||||||||||||||||||||
Total 60-89 days past due
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322,805 | 341,925 | 664,730 | |||||||||||||||||||||||||
90 or more days past due
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Consumer
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34,370 | - | 34,370 | |||||||||||||||||||||||||
Total accruing past due loans
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$ | 778,980 | $ | 839,274 | $ | 1,618,254 | ||||||||||||||||||||||
Accruing Troubled Debt
Restructurings
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Real Estate
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5,037,879 | 2,258,052 | - | 91,709 | 5,037,879 | |||||||||||||||||||||||
Consumer
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142,671 | 144,549 | 154,088 | 805 | 296,759 | |||||||||||||||||||||||
Total Accruing Troubled Debt
Restructurings
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$ | 5,180,550 | $ | 2,402,601 | $ | 154,088 | $ | 92,514 | $ | 5,334,638 |
3.
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We note your response to comment 5 in your letter dated September 12, 2012 and your disclosure in the June 30, 2012 Form 10-Q. Please revise future filings to disclose the average recorded investment for all impaired loans by class of financing receivable including accruing and non-accrual TDRs. It may be helpful to consider the example disclosure in ASC 310-10-55-10.
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4.
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We note your response to comment 6 in your letter dated September 12, 2012. Please ensure that in future filings you disclose the financial effects (i.e. the change in recorded interest at the time of modification) for each TDR during the periods presented. Also, please confirm to us, if true, and clearly disclose in future filings that you continue to measure credit impairment at each period end on all loans that have been classified as TDRs using the guidance in ASC 310-10-35. If you do not, please measure credit impairment for all previously classified TDRs using the guidance in ASC 310-10-35 and to the extent that prior periods were materially misstated, please consider the need to potentially restate your financial statements.
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Bancshares is responsible for the adequacy and accuracy of the disclosure in the filing;
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staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
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Bancshares may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
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