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Loans Receivable and Allowance for Loan Losses
 6 Months Ended
Jun. 30, 2011
Loans Receivable and Allowance for Loan Losses [Abstract]  
Loans Receivable and Allowance for Loan Losses
Note 3: Loans Receivable and Allowance for Loan Losses
A summary of the Company’s loan portfolio at June 30, 2011 and December 31, 2010 is as follows:
                 
    June 30,     December 31,  
    2011     2010  
Real Estate
               
Commercial
  $ 203,889,507     $ 228,842,489  
Residential
    154,301,727       187,058,318  
Construction
    26,479,881       63,889,083  
Construction to permanent
    10,300,425       10,331,043  
Commercial
    23,512,120       14,573,790  
Consumer home equity
    42,600,664       42,884,962  
Consumer installment
    2,009,548       1,932,763  
 
           
Total Loans
    463,093,872       549,512,448  
Premiums on purchased loans
    237,398       242,426  
Net deferred costs
    49,482       150,440  
Allowance for loan losses
    (11,399,727 )     (15,374,101 )
 
           
Loans receivable, net
  $ 451,981,025     $ 534,531,213  
 
           
The changes in the allowance for loan losses for the periods shown are as follows:
                                 
    Three months ended     Six months ended  
    June 30,     June 30,  
    2011     2010     2011     2010  
 
                               
Balance, beginning of period
  $ 12,208,476     $ 15,061,796     $ 15,374,101     $ 15,794,118  
Provision for loan losses
    1,482,798       512,000       8,464,427       1,239,000  
Loans charged-off
    (3,034,591 )     (1,594,136 )     (7,188,138 )     (3,177,383 )
Recoveries of loans previously charged-off
    743,044       9,409       763,650       133,334  
Transferred to loans held-for-sale
    —       —       (6,014,313 )     —  
 
                       
Balance, end of period
  $ 11,399,727     $ 13,989,069     $ 11,399,727     $ 13,989,069  
 
                       
At June 30, 2011 and December 31, 2010, the unpaid balances of loans delinquent 90 days or more and still accruing interest were $906,962 and $3,374,242, respectively. At June 30, 2011, this was comprised of one loan which has matured, is well secured and the borrower continues to make payments monthly. The Company has agreed to forbear from pursuing its remedies while the borrower arranges refinancing from another financial institution.
The unpaid principal balances of loans on nonaccrual status and considered impaired were $26.7 million at June 30, 2011 and $89.1 million at December 31, 2010. On March 24, 2011, the Company completed the sale of certain non-performing assets that included 21 non-accruing loans with an aggregate net book value of $52.4 million (net of related specific reserves) and 4 other real estate owned (“OREO”) properties with an aggregate carrying value of $14.4 million. The sale of $66.8 million of non-performing assets was consummated for a cash purchase price of $60,602,036 which represented 90.7% of the Bank’s net book value for these assets.
If non-accrual loans had been performing in accordance with their original terms, the Company would have recorded approximately $0.5 million of additional income during the quarter ended June 30, 2011 and $1.6 million during the quarter ended June 30, 2010. If non-accrual loans had been performing in accordance with their original terms, the Company would have recorded approximately $1.5 million of additional income for the six months ended June 30, 2011 and $3.4 million during the six months ended June 30, 2010.
For the three months ended June 30, 2011 and 2010, the interest collected and recognized as income on impaired loans was approximately $30,000 and $546,000, respectively. For the six months ended June 30, 2011 and 2010, the interest income collected and recognized on impaired loans was approximately $461,000 and $1,279,000 respectively. The average recorded investment in impaired loans for the three and six months ended June 30, 2011 was $42.0 million and $60.8 million respectively.
At June 30, 2011, there were 16 loans totaling $31.5 million that were considered “troubled debt restructurings,” all of which are included in impaired loans, as compared to December 31, 2010 when there were 19 loans totaling $38.0 million, all of which were included in impaired loans. At June 30, 2011, 6 of the 16 loans aggregating $16.1 million were accruing loans and 10 loans aggregating $15.4 million were non-accruing loans.
The Company’s lending activities are conducted principally in Fairfield and New Haven Counties in Connecticut and Westchester County, New York City and Long Island, New York. The Company grants commercial real estate loans, commercial business loans and a variety of consumer loans. In addition, the Company had granted loans for the construction of residential homes, residential developments and for land development projects. A moratorium on all new construction loans was instituted by management in July 2008. All residential and commercial mortgage loans are collateralized primarily by first or second mortgages on real estate. The ability and willingness of borrowers to satisfy their loan obligations is dependent in large part upon the status of the regional economy and regional real estate market. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio and the recovery of a substantial portion of any resulting real estate acquired is susceptible to changes in market conditions.
The Company has established credit policies applicable to each type of lending activity in which it engages, evaluates the creditworthiness of each customer and, in most cases, extends credit of up to 75% of the market value of the collateral at the date of the credit extension depending on the Company’s evaluation of the borrowers’ creditworthiness and type of collateral. In the case of construction loans, the maximum loan-to-value was 65% of the “as completed” market value. The market value of collateral is monitored on an ongoing basis and additional collateral is obtained when warranted. Real estate is the primary form of collateral. Other important forms of collateral are accounts receivable, inventory, other business assets, marketable securities and time deposits. While collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment to be based on the borrower’s ability to generate continuing cash flows on all loans not related to construction.
Risk characteristics of the Company’s portfolio classes include the following:
Commercial Real Estate Loans — In underwriting commercial real estate loans, the Company evaluates both the prospective borrower’s ability to make timely payments on the loan and the value of the property securing the loans. Repayment of such loans may be negatively impacted should the borrower default or should there be a substantial decline in the value of the property securing the loan or a decline in the general economic conditions. Where the owner occupies the property, the Company also evaluates the business’s ability to repay the loan on a timely basis. In addition, the Company may require personal guarantees, lease assignments and/or the guarantee of the operating company when the property is owner occupied. These types of loans may involve greater risks than other types of lending, because payments on such loans are often dependent upon the successful operation of the business involved, therefore, repayment of such loans may be negatively impacted by adverse changes in economic conditions affecting the borrowers’ business.
Construction Loans — Construction loans are short-term loans (generally up to 18 months) secured by land for both residential and commercial development. The loans are generally made for acquisition and improvements. Funds are disbursed as phases of construction are completed.
In the past, the Company funded construction of single family homes, when no contract of sale exists, based upon the experience of the builder, the financial strength of the owner, the type and location of the property and other factors. Construction loans are generally personally guaranteed by the principal(s). Repayment of such loans may be negatively impacted by the builders’ inability to complete construction, by a downturn in the new construction market, by a significant increase in interest rates or by a decline in general economic conditions. The Company has had a moratorium in place since mid-2008 on new speculative construction loans.
Residential Real Estate Loans — Various loans secured by residential real estate properties are offered by the Company, including 1-4 family residential mortgages, multi-family residential loans and a variety of home equity line of credit products. Repayment of such loans may be negatively impacted should the borrower default, should there be a significant decline in the value of the property securing the loan or should there be a decline in general economic conditions.
Commercial and Industrial Loans — The Company’s commercial and industrial loan portfolio consists primarily of commercial business loans and lines of credit to businesses and professionals. These loans are usually made to finance the purchase of inventory, new or used equipment or other short or long-term working capital purposes. These loans are generally secured by corporate assets, often with real estate as secondary collateral, but are also offered on an unsecured basis. In granting this type of loan, the Company primarily looks to the borrower’s cash flow as the source of repayment with collateral and personal guarantees, where obtained, as a secondary source. Commercial loans are often larger and may involve greater risks than other type of loans offered by the Company. Payments on such loans are often dependent upon the successful operation of the underlying business involved and, therefore, repayment of such loans may be negatively impacted by adverse changes in economic conditions, management’s inability to effectively manage the business, claims of others against the borrower’s assets which may take priority over the Company’s claims against assets, death or disability of the borrower or loss of market for the borrower’s products or services.
Other Loans — The Company also offers installment loans and reserve lines of credit to individuals. Repayments of such loans are often dependent on the personal income of the borrower which may be negatively impacted by adverse changes in economic conditions. The Company does not place an emphasis on originating these types of loans.
The Company does not have any lending programs commonly referred to as subprime lending. Subprime lending generally targets borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burdened ratios.
The following table sets forth activity in our allowance for loan losses, by loan type, for the period ended June 30, 2011. The following table also details the amount of loans receivable, net, that are evaluated individually, and collectively, for impairment, and the related portion of allowance for loan losses that is allocated to each loan portfolio segment.
                                                                 
            Commercial Real             Construction                          
Three months ended June 30, 2011   Commercial     Estate     Construction     to Permanent     Residential     Consumer     Unallocated     Total  
Allowance for loan losses:
                                                               
Beginning Balance
  $ 590,872     $ 6,576,501     $ 2,938,102     $ 529,745     $ 1,097,762     $ 452,708     $ 22,786     $ 12,208,476  
Charge-offs
    —       (1,801,551 )     (1,071,281 )     —       —       (161,759 )     —       (3,034,591 )
Recoveries
    —       3,789       443,588       —       —       295,667       —       743,044  
Transferred to loans held-for-sale
    —       —       —       —       —       —       —       —  
Provision
    294,438       1,658,960       (969,470 )     355,307       147,727       17,442       (21,606 )     1,482,798  
 
                                               
Ending Balance
  $ 885,310     $ 6,437,699     $ 1,340,939     $ 885,052     $ 1,245,489     $ 604,058     $ 1,180     $ 11,399,727  
Ending balance: individually evaluated for impairment
  $ 226,674     $ 1,356,134     $ 228,599     $ 818,217     $ 220,476     $ 151,500     $ —     $ 3,001,600  
 
                                               
Ending balance: collectively evaluated for impairment
  $ 658,636     $ 5,081,565     $ 1,112,340     $ 66,835     $ 1,025,013     $ 452,558     $ 1,180     $ 8,398,127  
 
                                               
 
                                                               
Total Allowance for Loan Losses
  $ 885,310     $ 6,437,699     $ 1,340,939     $ 885,052     $ 1,245,489     $ 604,058     $ 1,180     $ 11,399,727  
 
                                               
 
                                                               
Total Loans ending balance
  $ 23,512,120     $ 203,889,507     $ 26,479,881     $ 10,300,425     $ 154,301,727     $ 44,610,212     $ —     $ 463,093,872  
 
                                               
 
                                                               
Ending balance: individually evaluated for impairment
  $ 1,212,521     $ 11,812,331     $ 6,364,172     $ 8,591,092     $ 13,413,155     $ 1,417,742     $ —     $ 42,811,013  
 
                                               
 
                                                               
Ending balance: collectively evaluated for impairment
  $ 22,299,599     $ 192,077,176     $ 20,115,709     $ 1,709,333     $ 140,888,572     $ 43,192,470     $ —     $ 420,282,859  
 
                                               
                                                                 
            Commercial Real             Construction                          
Six months ended June 30, 2011   Commercial     Estate     Construction     to Permanent     Residential     Consumer     Unallocated     Total  
Allowance for loan losses:
                                                               
Beginning Balance
  $ 441,319     $ 7,632,355     $ 3,478,058     $ 491,446     $ 2,363,838     $ 578,612     $ 388,473     $ 15,374,101  
Charge-offs
    —       (2,736,139 )     (2,832,041 )     —       (1,458,199 )     (161,759 )     —       (7,188,138 )
Recoveries
    240       3,789       461,282       —       —       298,339       —       763,650  
Transferred to loans held-for-sale
    —       (963,461 )     (1,369,354 )     —       (3,681,498 )     —       —       (6,014,313 )
Provision
    443,751       2,501,155       1,602,994       393,606       4,021,348       (111,134 )     (387,293 )     8,464,427  
 
                                               
Ending Balance
  $ 885,310     $ 6,437,699     $ 1,340,939     $ 885,052     $ 1,245,489     $ 604,058     $ 1,180     $ 11,399,727  
Ending balance: individually evaluated for impairment
  $ 226,674     $ 1,356,134     $ 228,599     $ 818,217     $ 220,476     $ 151,500     $ —     $ 3,001,600  
 
                                               
Ending balance: collectively evaluated for impairment
  $ 658,636     $ 5,081,565     $ 1,112,340     $ 66,835     $ 1,025,013     $ 452,558     $ 1,180     $ 8,398,127  
 
                                               
 
                                                               
Total Allowance for Loan Losses
  $ 885,310     $ 6,437,699     $ 1,340,939     $ 885,052     $ 1,245,489     $ 604,058     $ 1,180     $ 11,399,727  
 
                                               
 
                                                               
Total Loans ending balance
  $ 23,512,120     $ 203,889,507     $ 26,479,881     $ 10,300,425     $ 154,301,727     $ 44,610,212     $ —     $ 463,093,872  
 
                                               
 
                                                               
Ending balance: individually evaluated for impairment
  $ 1,212,521     $ 11,812,331     $ 6,364,172     $ 8,591,092     $ 13,413,155     $ 1,417,742     $ —     $ 42,811,013  
 
                                               
 
                                                               
Ending balance: collectively evaluated for impairment
  $ 22,299,599     $ 192,077,176     $ 20,115,709     $ 1,709,333     $ 140,888,572     $ 43,192,470     $ —     $ 420,282,859  
 
                                               
The Company monitors the credit quality of its loans receivable in an ongoing manner. Credit quality is monitored by reviewing certain credit quality indicators. Management has determined that loan-to-value ratios (LTVs), (at period end) and internally assigned risk ratings are the key credit quality indicators that best help management monitor the credit quality of the Company’s loans receivable. Loan-to-value ratios used by management in monitoring credit quality are based on current period loan balances and original values at time of origination (unless a current appraisal has been obtained as a result of the loan being deemed impaired or the loan is a maturing construction loan).
Appraisals on properties securing impaired loans and Other Real Estate Owned are updated annually. Additionally, appraisals on construction loans are updated four months in advance of scheduled maturity dates. We update our impairment analysis monthly based on the most recent appraisal as well as other factors (such as senior lien positions, e.g. property taxes), and we are using published information regarding actual median home sales prices in the towns/counties where our collateral is located in CT and NY.
The majority of the Company’s impaired loans have been resolved through courses of action other than via bank liquidations of real estate collateral through the OREO. These include normal loan payoffs, the traditional workout process, triggering personal guarantee obligations, and troubled debt restructurings. However, as loan workout efforts progress to a point where the bank’s liquidation of real estate collateral is the likely outcome, the impairment analysis is updated to reflect actual recent experience with bank sales of OREO properties.
A disposition discount is built into our impairment analysis and reflected in our allowance once a property is determined to be a likely OREO (e.g. foreclosure is probable). To determine the discount we compare the actual sales prices of our OREO properties to the appraised value that was obtained as of the date when we took title to the property. The difference is the bank-owned disposition discount.
The Company has a risk rating system as part of the risk assessment of its loan portfolio. The Company’s lending officers are required to assign a risk rating to each loan in their portfolio at origination. When the lender learns of important financial developments, the risk rating is reviewed accordingly, and adjusted if necessary. Similarly, the Loan Committee can adjust a risk rating. The Loan Workout Committee meets on a regular basis and reviews loans rated “special mention” or worse. In addition, the Company engages a third party independent loan reviewer that performs semi-annual reviews of a sample of loans, validating the Bank’s risk ratings assigned to such loans. The risk ratings play an important role in the establishment of the loan loss provision and to confirm the adequacy of the allowance for loan losses.
When assigning a risk rating to a loan, management utilizes the Bank’s internal nine-point risk rating system. Loans deemed to be “acceptable quality” are rated 1 through 5, with a rating of 1 established for loans with minimal risk and borrowers exhibiting the strongest financial condition. Loans rated 1 — 5 are considered “Pass”. Loans that are deemed to be of “questionable quality” are rated 6 (special mention). An asset is considered “special mention” when it has a potential weakness based on objective evidence, but does not currently expose the Company to sufficient risk to warrant classification in one of the following categories. Loans with adverse classifications (substandard, doubtful or loss) are rated 7, 8 or 9, respectively. An asset is considered “substandard” if it is not adequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard assets have well defined weaknesses based on objective evidence, and are characterized by the “distinct possibility” that the Company will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.”
Charge-off generally commences in the month that the loan is classified “doubtful” and is fully charged off within six months of such classification. If the account is classified “loss” the full balance is charged off immediately. The full balance is charged off regardless of the potential recovery from the sale of the collateral. This amount is recognized as a recovery once the collateral is sold.
In accordance with FFIEC (“Federal Financial Institutions Examination Council”) published policies establishing uniform criteria for the classification of retail credit based on delinquency status, “Open-end” credits are charged-off when 180 days delinquent and “Closed-end” credits are charged-off when 120 days delinquent. Typically, consumer installment loans are charged off no later than 90 days past due.
The following table details the credit risk exposure of loans receivable, by loan type and credit quality indicator at June 30, 2011:
CREDIT RISK PROFILE BY CREDITWORTHINESS CATEGORY
                                                                                                                 
                                                    Construction to                    
    Commercial     Commercial Real Estate     Construction     Permanent     Residential Real Estate     Consumer        
LTVs:   < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     Other     Total  
Internal Risk Rating
                                                                                                               
Pass
  $ 17,059,866     $ 1,010,558     $ 129,445,812     $ 7,930,298     $ —     $ —     $ —     $ —     $ 100,042,773     $ 36,102,022     $ 38,681,443     $ 504,874     $ 689,849     $ 331,467,495  
Special Mention
    244,506       174,250       26,506,967       4,644,478       11,364,872       —       1,709,333       —       1,040,930       —       274,390       3,029,362       —       48,989,088  
Substandard & Doubtful
    4,850,852       172,088       13,939,247       21,422,705       5,402,712       9,712,297       —       8,591,092       3,999,523       13,116,479       12,552       1,417,742       —       82,637,289  
 
                                                                                   
 
  $ 22,155,224     $ 1,356,896     $ 169,892,026     $ 33,997,481     $ 16,767,584     $ 9,712,297     $ 1,709,333     $ 8,591,092     $ 105,083,226     $ 49,218,501     $ 38,968,385     $ 4,951,978     $ 689,849     $ 463,093,872  
 
                                                                                   
CREDIT RISK PROFILE
                                                         
            Commercial Real             Construction to     Residential              
    Commercial     Estate     Construction     Permanent     Real Estate     Consumer     Totals  
 
                                                       
Performing
  $ 22,299,599     $ 192,319,547     $ 20,115,709     $ 6,614,333     $ 151,395,323     $ 43,616,470     $ 436,360,981  
Non Performing
    1,212,521       11,569,960       6,364,172       3,686,092       2,906,404       993,742       26,732,891  
 
                                         
Total
  $ 23,512,120     $ 203,889,507     $ 26,479,881     $ 10,300,425     $ 154,301,727     $ 44,610,212     $ 463,093,872  
 
                                         
The following table details the credit risk exposure of loans receivable, by loan type and credit quality indicator at December 31, 2010:
CREDIT RISK PROFILE BY CREDITWORTHINESS CATEGORY
                                                                                                                 
                                                    Construction to                    
    Commercial     Commercial Real Estate     Construction     Permanent     Residential Real Estate     Consumer        
LTVs:   < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     < 75%     >= 75%     Other     Total  
Internal Risk Rating
                                                                                                               
Pass
  $ 11,225,261     $ 256,296     $ 124,645,152     $ 9,449,059     $ 1,272,028     $ 350,000     $ —     $ —     $ 91,534,348     $ 51,996,851     $ 35,192,214     $ —       1,917,783     $ 327,838,992  
Special Mention
    704,053       181,600       35,253,018       4,645,738       15,059,704       4,485,209       1,709,333       —       2,088,700       2,907,285       3,146,244       2,879,621       —       73,060,505  
Substandard & Doubtful
    1,424,161       782,419       13,792,482       41,057,040       10,712,146       32,009,996       —       8,621,710       18,052,003       20,479,131       99,235       1,567,648       14,980       148,612,951  
 
                                                                                   
 
  $ 13,353,475     $ 1,220,315     $ 173,690,652     $ 55,151,837     $ 27,043,878     $ 36,845,205     $ 1,709,333     $ 8,621,710     $ 111,675,051     $ 75,383,267     $ 38,437,693     $ 4,447,269     $ 1,932,763     $ 549,512,448  
 
                                                                                   
CREDIT RISK PROFILE
                                                         
            Commercial Real             Construction to     Residential              
    Commercial     Estate     Construction     Permanent     Real Estate     Consumer     Totals  
 
                                                       
Performing
  $ 13,358,840     $ 202,054,317     $ 33,003,060     $ 8,951,208     $ 159,270,574     $ 43,724,749     $ 460,362,748  
Non Performing
    1,214,950       26,788,172       30,886,023       1,379,835       27,787,744       1,092,976       89,149,700  
 
                                         
Total
  $ 14,573,790     $ 228,842,489     $ 63,889,083     $ 10,331,043     $ 187,058,318     $ 44,817,725     $ 549,512,448  
 
                                         
Included in loans receivable are loans for which the accrual of interest income has been discontinued due to deterioration in the financial condition of the borrowers. The recorded balance of these nonaccrual loans was $26.7 million and $89.1 million at June 30, 2011, and December 31, 2010 respectively. Generally, loans are placed on non-accruing status when they become 90 days or more delinquent, or earlier if deemed appropriate, and remain on non-accrual status until they are brought current, have six months of performance under the loan terms, and factors indicating reasonable doubt about the timely collection of payments no longer exist. Therefore, loans may be current in accordance with their loan terms, or may be less than 90 days delinquent and still be on a non-accruing status. Additionally, certain loans that cannot demonstrate sufficient global cash flow to continue loan payments in the future and certain trouble debt restructures (TDRs) are placed on non-accrual status.
The following table sets forth the detail, and delinquency status, of non-accrual loans and past due loans at June 30, 2011:
                                                         
    Non-Accrual and Past Due Loans  
                                                    Total Non-  
                                            >90 Days Past     Accrual and  
    31-60 Days     61-90 Days     Greater Than     Total Past             Due and     Past Due  
2011   Past Due     Past Due     90 Days     Due     Current     Accruing     Loans  
Commercial
                                                       
Pass
  $ —     $ —     $ —     $ —     $ —     $ —     $ —  
Special Mention
    —       —       —       —       —       —       —  
Substandard
    —       —       348,208       348,208       864,313       —       1,212,521  
 
                                         
Total Commercial
  $ —     $ —     $ 348,208     $ 348,208     $ 864,313     $ —     $ 1,212,521  
 
                                         
Commercial Real Estate
                                                       
Substandard
  $ 1,762,100     $ —     $ 6,471,749     $ 8,233,849     $ 3,336,111     $ 906,962     $ 12,476,922  
 
                                         
Total Commercial Real Estate
  $ 1,762,100     $ —     $ 6,471,749     $ 8,233,849     $ 3,336,111     $ 906,962     $ 12,476,922  
 
                                         
Construction
                                                       
Substandard
  $ —     $ —     $ 3,350,744     $ 3,350,744     $ 3,013,428     $ —     $ 6,364,172  
 
                                         
Total Construction
  $ —     $ —     $ 3,350,744     $ 3,350,744     $ 3,013,428     $ —     $ 6,364,172  
 
                                         
Construction to Permanent
                                                       
Substandard
  $ 2,336,875     $ —     $ —     $ 2,336,875     $ 1,349,217     $ —     $ 3,686,092  
 
                                         
Total Construction to Permanent
  $ 2,336,875     $ —     $ —     $ 2,336,875     $ 1,349,217     $ —     $ 3,686,092  
 
                                         
Residential Real Estate
                                                       
Substandard
  $ —     $ 406,404     $ 2,500,000     $ 2,906,404     $ —     $ —     $ 2,906,404  
 
                                         
Total Residential Real Estate
  $ —     $ 406,404     $ 2,500,000     $ 2,906,404     $ —     $ —     $ 2,906,404  
 
                                         
Consumer
                                                       
Substandard
  $ —     $ —     $ 993,742     $ 993,742     $ —     $ —     $ 993,742  
 
                                         
Total Consumer
  $ —     $ —     $ 993,742     $ 993,742     $ —     $ —     $ 993,742  
 
                                         
 
                                                       
Total
  $ 4,098,975     $ 406,404     $ 13,664,443     $ 18,169,822     $ 8,563,069     $ 906,962     $ 27,639,853  
 
                                         
The following table sets forth the detail, and delinquency status, of non-accrual loans and past due loans at December 31, 2010:
                                                         
    Non-Accrual and Past Due Loans  
                                                    Total Non-  
                                            >90 Days Past     Accrual and  
    31-60 Days     61-90 Days     Greater Than     Total Past             Due and     Past Due  
2010   Past Due     Past Due     90 Days     Due     Current     Accruing     Loans  
Commercial
                                                       
Special Mention
  $ —     $ —     $ —     $ —     $ —     $ 63,289     $ 63,289  
Substandard
    350,000       100,000       698,767       1,148,767       66,183       175,000       1,389,950  
 
                                         
Total Commercial
  $ 350,000     $ 100,000     $ 698,767     $ 1,148,767     $ 66,183     $ 238,289     $ 1,453,239  
 
                                         
Commercial Real Estate
                                                       
Substandard
  $ 269,672     $ 6,449,096     $ 13,521,123     $ 20,239,891     $ 6,548,281     $ —     $ 26,788,172  
 
                                         
Total Commercial Real Estate
  $ 269,672     $ 6,449,096     $ 13,521,123     $ 20,239,891     $ 6,548,281     $ —     $ 26,788,172  
 
                                         
Construction
                                                       
Substandard
  $ 1,517,943     $ 4,059,516     $ 13,736,985     $ 19,314,444     $ 11,571,579     $ 3,135,953     $ 34,021,976  
 
                                         
Total Construction
  $ 1,517,943     $ 4,059,516     $ 13,736,985     $ 19,314,444     $ 11,571,579     $ 3,135,953     $ 34,021,976  
 
                                         
Construction to Permanent
                                                       
Substandard
  $ —     $ —     $ —     $ —     $ 1,379,835     $ —     $ 1,379,835  
 
                                         
Total Construction to Permanent
  $ —     $ —     $ —     $ —     $ 1,379,835     $ —     $ 1,379,835  
 
                                         
Residential Real Estate
                                                       
Substandard
  $ —     $ —     $ 15,897,248     $ 15,897,248     $ 11,890,496     $ —     $ 27,787,744  
 
                                         
Total Residential Real Estate
  $ —     $ —     $ 15,897,248     $ 15,897,248     $ 11,890,496     $ —     $ 27,787,744  
 
                                         
Consumer
                                                       
Substandard
  $ —     $ —     $ 1,092,976     $ 1,092,976     $ —     $ —     $ 1,092,976  
 
                                         
Total Consumer
  $ —     $ —     $ 1,092,976     $ 1,092,976     $ —     $ —     $ 1,092,976  
 
                                         
 
                                                       
Total
  $ 2,137,615     $ 10,608,612     $ 44,947,099     $ 57,693,326     $ 31,456,374     $ 3,374,242     $ 92,523,942  
 
                                         
These non-accrual and past due amounts included loans deemed to be impaired of $42.8 million and $89.1 million at June 30, 2011, and December 31, 2010, respectively. Loans past due ninety days or more and still accruing interest were approximately $907,000 and $3.4 million at June 30, 2011, and December 31, 2010 respectively, and consisted of one loan at June 30, 2011 that is current as to payment but past maturity where payoff is pending.
The following table sets forth the detail and delinquency status of loans receivable, by performing and non-performing loans at June 30, 2011.
                                                                 
    Performing (Accruing) Loans             Total Non-        
                    Greater                     Total     Accrual and        
    31-60 Days     61-90 Days     Than 90     Total Past             Performing     Past Due        
2011   Past Due     Past Due     Days     Due     Current     Loans     Loans     Total Loans  
Commercial
                                                               
Pass
  $ —     $ —     $ —     $ —     $ 18,070,424     $ 18,070,424     $ —     $ 18,070,424  
Special Mention
    —       —       —       —       418,756       418,756       —       418,756  
Substandard
    248,318       —       —       248,318       3,562,101       3,810,419       1,212,521       5,022,940  
 
                                               
Total Commercial
  $ 248,318     $ —     $ —     $ 248,318     $ 22,051,281     $ 22,299,599     $ 1,212,521     $ 23,512,120  
 
                                               
Commercial Real Estate
                                                               
Pass
  $ —     $ —     $ —     $ —     $ 137,376,110     $ 137,376,110     $ —     $ 137,376,110  
Special Mention
    —       —       —       —       31,151,444       31,151,444       —       31,151,444  
Substandard
    622,027       949,141       —       1,571,168       21,313,863       22,885,031       12,476,922       35,361,953  
 
                                               
Total Commercial Real Estate
  $ 622,027     $ 949,141     $ —     $ 1,571,168     $ 189,841,417     $ 191,412,585     $ 12,476,922     $ 203,889,507  
 
                                               
Construction
                                                               
Pass
  $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  
Special Mention
    —       —       —       —       11,364,872       11,364,872       —       11,364,872  
Substandard
    —       —       —       —       8,750,837       8,750,837       6,364,172       15,115,009  
 
                                               
Total Construction
  $ —     $ —     $ —     $ —     $ 20,115,709     $ 20,115,709     $ 6,364,172     $ 26,479,881  
 
                                               
Construction to Permanent
                                                               
Pass
  $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ —  
Special Mention
    —       —       —       —       1,709,333       1,709,333       —       1,709,333  
Substandard
    —       —       —       —       4,905,000       4,905,000       3,686,092       8,591,092  
 
                                               
Total Construction to Permanent
  $ —     $ —     $ —     $ —     $ 6,614,333     $ 6,614,333     $ 3,686,092     $ 10,300,425  
 
                                               
Residential Real Estate
                                                               
Pass
  $ —     $ —     $ —     $ —     $ 136,144,795     $ 136,144,795     $ —     $ 136,144,795  
Special Mention
    521,406       —       —       521,406       519,524       1,040,930       —       1,040,930  
Substandard
    —       —       —       —       14,209,598       14,209,598       2,906,404       17,116,002  
 
                                               
Total Residential Real Estate
  $ 521,406     $ —     $ —     $ 521,406     $ 150,873,917     $ 151,395,323     $ 2,906,404     $ 154,301,727  
 
                                               
Consumer
                                                               
Pass
  $ —     $ —     $ —     $ —     $ 39,876,166     $ 39,876,166     $ —     $ 39,876,166  
Special Mention
    —       —       —       —       3,303,753       3,303,753       —       3,303,753  
Substandard
    —       —       —       —       436,551       436,551       993,742       1,430,293  
 
                                               
Total Consumer
  $ —     $ —     $ —     $ —     $ 43,616,470     $ 43,616,470     $ 993,742     $ 44,610,212  
 
                                               
 
                                                               
Total
  $ 1,391,751     $ 949,141     $ —     $ 2,340,892     $ 433,113,127     $ 435,454,019     $ 27,639,853     $ 463,093,872  
 
                                               
The following table sets forth the detail and delinquency status of loans receivable, net, by performing and non-performing loans at December 31, 2010.
                                                         
    Performing (Accruing) Loans             Total Non-        
            Greater                     Total     Accrual and        
    31-60 Days     Than 60     Total Past             Perfoming     Past Due        
2010   Past Due     Days     Due     Current     Loans     Loans     Total Loans  
Commercial
                                                       
Pass
  $ —     $ —     $ —     $ 11,481,557     $ 11,481,557     $ —     $ 11,481,557  
Special Mention
    —       —       —       822,364       822,364       63,289       885,653  
Substandard
    —       —       —       816,630       816,630       1,389,950       2,206,580  
 
                                         
Total Commercial
  $ —     $ —     $ —     $ 13,120,551     $ 13,120,551     $ 1,453,239     $ 14,573,790  
 
                                         
Commercial Real Estate
                                                       
Pass
  $ —     $ —     $ —     $ 134,094,210     $ 134,094,210     $ —     $ 134,094,210  
Special Mention
    —       —       —       39,898,756       39,898,756       —       39,898,756  
Substandard
    —       —       —       28,061,351       28,061,351       26,788,172       54,849,523  
 
                                         
Total Commercial Real Estate
  $ —     $ —     $ —     $ 202,054,317     $ 202,054,317     $ 26,788,172     $ 228,842,489  
 
                                         
Construction
                                                       
Pass
  $ —     $ —     $ —     $ 1,622,029     $ 1,622,029     $ —     $ 1,622,029  
Special Mention
    —       —       —       19,544,913       19,544,913       —       19,544,913  
Substandard
    —       —       —       8,700,165       8,700,165       34,021,976       42,722,141  
 
                                         
Total Construction
  $ —     $ —     $ —     $ 29,867,107     $ 29,867,107     $ 34,021,976     $ 63,889,083  
 
                                         
Construction to Permanent
                                                       
Pass
  $ —     $ —     $ —     $ —     $ —     $ —     $ —  
Special Mention
    —       —       —       1,709,333       1,709,333       —       1,709,333  
Substandard
    1,127,875       —       1,127,875       6,114,000       7,241,875       1,379,835       8,621,710  
 
                                         
Total Construction to Permanent
  $ 1,127,875     $ —     $ 1,127,875     $ 7,823,333     $ 8,951,208     $ 1,379,835     $ 10,331,043  
 
                                         
Residential Real Estate
                                                       
Pass
  $ 198,357     $ —     $ 198,357     $ 143,332,842     $ 143,531,199     $ —     $ 143,531,199  
Special Mention
    2,907,285       —       2,907,285       2,088,700       4,995,985       —       4,995,985  
Substandard
    —       —       —       10,743,390       10,743,390       27,787,744       38,531,134  
 
                                         
Total Residential Real Estate
  $ 3,105,642     $ —     $ 3,105,642     $ 156,164,932     $ 159,270,574     $ 27,787,744     $ 187,058,318  
 
                                         
Consumer
                                                       
Pass
  $ —     $ —     $ —     $ 37,109,997     $ 37,109,997     $ —     $ 37,109,997  
Special Mention
    168,589       —       168,589       5,857,276       6,025,865       —       6,025,865  
Substandard
    —       —       —       588,887       588,887       1,092,976       1,681,863  
 
                                         
Total Consumer
  $ 168,589     $ —     $ 168,589     $ 43,556,160     $ 43,724,749     $ 1,092,976     $ 44,817,725  
 
                                         
 
                                                       
Total
  $ 4,402,106     $ —     $ 4,402,106     $ 452,586,400     $ 456,988,506     $ 92,523,942     $ 549,512,448  
 
                                         
The following table summarizes impaired loans as of June 30, 2011:
                         
    Recorded     Unpaid Principal        
    Investment     Balance     Related Allowance  
2011
                       
With no related allowance recorded:
                       
Commercial
  $ 848,208     $ 1,167,972     $ —  
Commercial Real Estate
    4,695,242       5,418,345       —  
Construction
    5,106,134       6,246,697       —  
Construction to Permanent
    4,905,000       4,905,000          
Residential
    8,331,641       8,331,641       —  
Consumer
    993,742       1,038,640       —  
 
                 
Total:
  $ 24,879,967     $ 27,108,295     $ —  
 
                       
With an allowance recorded:
                       
Commercial
  $ 364,313     $ 387,714     $ 226,674  
Commercial Real Estate
    7,117,089       8,092,062       1,356,134  
Construction
    1,258,038       2,386,713       228,599  
Construction to Permanent
    3,686,092       3,761,875       818,217  
Residential
    5,081,514       5,081,514       220,476  
Consumer
    424,000       424,000       151,500  
 
                 
Total:
  $ 17,931,046     $ 20,133,878     $ 3,001,600  
 
                       
Commercial
  $ 1,212,521     $ 1,555,686     $ 226,674  
Commercial Real Estate
    11,812,331       13,510,407       1,356,134  
Construction
    6,364,172       8,633,410       228,599  
Construction to Permanent
    8,591,092       8,666,875       818,217  
Residential
    13,413,155       13,413,155       220,476  
Consumer
    1,417,742       1,462,640       151,500  
 
                 
Total:
  $ 42,811,013     $ 47,242,173     $ 3,001,600  
 
                 
The recorded investment of impaired loans at June 30, 2011 and December 31, 2010 was $42.8 million and $100.7 million respectively, with related allowances of $3.0 million and $6.0 million, respectively.
Included in the table above at June 30, 2011, are 19 loans with carrying balances of $24.9 million that required no specific reserves in our allowance for loan losses comprised of 15 non-accruing loans aggregating $13.9 million and 4 accruing TDR loans aggregating $11.0 million. Loans that did not require specific reserves at June 30, 2011 have sufficient collateral values, less costs to sell, supporting the carrying balances of the loans. In some cases, there may be no specific reserves because the Company already charged-off the specific impairment. Once a borrower is in default, the Company is under no obligation to advance additional funds on unused commitments.
The following table summarizes impaired loans as of December 31, 2010:
                         
    Recorded     Unpaid Principal        
    Investment     Balance     Related Allowance  
2010
                       
With no related allowance recorded:
                       
Commercial
  $ 1,077,512     $ 1,828,917     $ —  
Commercial Real Estate
    12,770,033       13,052,924       —  
Construction
    14,060,251       15,133,253       —  
Construction to Permanent
    —       —          
Residential
    24,513,106       24,737,293       —  
Consumer
    1,516,977       1,883,585       —  
 
                 
Total:
  $ 53,937,879     $ 56,635,972     $ —  
 
                       
With an allowance recorded:
                       
Commercial
  $ 137,438     $ 151,633     $ 76,045  
Commercial Real Estate
    15,696,205       19,509,247       2,300,199  
Construction
    16,825,772       19,368,468       1,895,326  
Construction to Permanent
    1,379,835       1,425,000       183,835  
Residential
    12,706,762       12,826,248       1,556,077  
Consumer
    —       —       —  
 
                 
Total:
  $ 46,746,012     $ 53,280,596     $ 6,011,482  
 
                       
Commercial
  $ 1,214,950     $ 1,980,550     $ 76,045  
Commercial Real Estate
    28,466,238       32,562,171       2,300,199  
Construction
    30,886,023       34,501,721       1,895,326  
Construction to Permanent
    1,379,835       1,425,000       183,835  
Residential
    37,219,868       37,563,541       1,556,077  
Consumer
    1,516,977       1,883,585       —  
 
                 
Total:
  $ 100,683,891     $ 109,916,568     $ 6,011,482  
 
                 
Included in the table above at December 31, 2010, are loans with carrying balances of $53.9 million that required no specific reserves in our allowance for loan losses. Loans that did not require specific reserves at December 31, 2010 have sufficient collateral values, less costs to sell, supporting the carrying balances of the loans.