Note 7: Loans and Allowance For Loan Losses: Impaired Financing Receivable Policy (Policies)

3 Months Ended

Sep. 30, 2012

Policies

Impaired Financing Receivable Policy

At September 30, 2012, $39.8 million of impaired loans had specific valuation allowances totaling $8.2 million.  At December 31, 2011, all impaired loans had specific valuation allowances totaling $10.0 million.  Previous to the third quarter of 2012, the Company reported all impaired loans as having specific valuation allowances, even though in many instances the allowance assigned to a particular loan was actually only the general valuation percentage used for that particular category of loans.  In the third quarter of 2012, the Company began reporting specific valuation allowances on impaired loans only if the recorded loan balance was greater than the calculated fair value of the collateral supporting the loan.  This change was also factored into the general valuation allowances recorded by the Company, and did not result in a significant change to the overall allowance for loan losses recorded by the Company.