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7. TROUBLED DEBT RESTRUCTURING (Tables)

12 Months Ended

Dec. 31, 2012

In the determination of the allowance for loan losses, management considers troubled debt restructurings and subsequent defaults in these restructurings by adjusting the loan grades of such loans, which figure into the environmental factors associated with the allowance. Defaults resulting in charge-offs affect the historical loss experience ratios which are a component of the allowance calculation. Additionally, specific reserves may be established on restructured loans evaluated individually.

	December 31, 2012
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Construction/Land Development		1	$	4,628	$	4,628
Farmland				-		-
Real Estate		1		147		147
Multi-Family				-		-
Commercial Real Estate				-		-
Home Equity – closed end				-		-
Home Equity – open end				-		-
Commercial & Industrial – Non- Real Estate				-		-
Consumer				-		-
Dealer Finance				-		-
Credit Cards				-		-

			$	4,775	$	4,775

During the twelve months ended December 31, 2012, the Bank modified 2 loans that were considered to be troubled debt restructurings. These modifications include rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof.

During the twelve months ended December 31, 2012, one loans that had previously been restructured, was in default. A restructured loan is considered in default when it becomes 90 days past due.

	December 31, 2012
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings that subsequently defaulted during the period:
Construction/Land Development			$	-	$	-
Farmland				-		-
Real Estate		1		147		147
Multi-Family				-		-
Commercial Real Estate				-		-
Home Equity – closed end				-		-
Home Equity – open end				-		-
Commercial & Industrial – Non- Real Estate				-		-
Consumer				-		-
Dealer Finance				-		-
Credit Cards				-		-
Consumer				-		-
			$	147	$	147

	December 31, 2011
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Commercial		4	$	1,601	$	1,601
Real Estate		5		5,375		5,375
Home Equity		2		451		451
Credit Cards
Consumer
Total			$	7,427	$	7,427

During the twelve months ended December 31, 2011, the Bank modified 11 loans that were considered to be troubled debt restructurings. These modifications included rate adjustments, revisions to amortization schedules, suspension of principal payments for a temporary period, re-advancing funds to be applied as payments to bring the loan(s) current, or any combination thereof

	December 31, 2011
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of Contracts		Recorded Investment		Recorded Investment

Troubled Debt Restructurings that subsequently defaulted during the period:
Commercial		1	$	309	$	309
Real Estate		2		1,306		1,306
Home Equity				-		-
Credit Cards				-		-
Consumer				-		-

			$	1,615	$	1,615