(3)

Real Estate Acquired in Settlement of Loans


	June 30,			December 31,
	2011			2010

Commercial	$	—		$	67,421
Real estate mortgage — construction		12,803,203			13,229,199
Real estate mortgage		9,149,815			6,254,221

Total	$	21,953,018		$	19,550,841
Less valuation allowance for other real estate owned		(6,536,607	)		(6,158,433	)

Total	$	15,416,411		$	13,392,408


Balance at December 31, 2010				$	19,550,841
Additions, net of charge-offs					5,583,613
Proceeds from sales					(3,123,105	)
Net loss on sales					(58,331	)

Total other real estate owned				$	21,953,018
Less valuation allowance for other real estate owned					(6,536,607	)

Balance at June 30, 2011				$	15,416,411

Activity in the valuation allowance for other real estate owned in settlement of loans for the three and six months ended June 30, 2011 and 2010, respectively, is summarized as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010

Balance, beginning of period	$	6,319,098		$	—	$	6,158,433		$	—
Provision for other real estate owned		280,140			—		440,805			—
Charge-offs		(62,631	)		—		(62,631	)		—

Balance, end of period	$	6,536,607		$	—	$	6,536,607		$	—