8. Troubled Debt Restructuring

3 Months Ended

Mar. 31, 2014

Troubled Debt Restructuring

8. Troubled Debt Restructuring

Note 8.Troubled Debt Restructuring

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.

During the three months ended March 31, 2014, there were no loan modifications that were considered to be troubled debt restructurings.  Modifications may have 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.

During the twelve months ended March 31, 2014, twelve loans (four borrowers) that had previously been restructured, were in default.  A restructured loan is considered in default when it becomes 90 days past due.

	March 31, 2014
		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of Contracts	Recorded Investment		Recorded Investment
Troubled Debt Restructurings
Commercial	6	$	2,328	$	2,328
Real Estate	3		600		600
Home Equity	2		280		280
Credit Cards			-		-
Consumer			-		-
Total		$	3,208	$	3,208

During the three months ended, March 31, 2013, there were no loan modifications that were considered to be troubled debt restructurings.   There were also no troubled debt restructurings from the previous twelve months that went into default in the first quarter of 2013.  A restructured loan is considered in default when it becomes 90 days past due.