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The table below provides information concerning the composition of nonaccrual loans at December 31, 2011 and 2010, respectively. 

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The Company discontinues the accrual of interest income when (1) there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected or (2) the principal or interest is more than 90 days past due, unless the loan is both well-secured and in the process of collection. At December 31, 2011, the Company had $10.4 million in loans on nonaccrual, compared to $11.8 million at December 31, 2010. 

Due to the weakening credit status of a borrower, the Company may elect to formally restructure certain loans to facilitate a repayment plan that minimizes the potential losses that we might incur. Restructured loans, or troubled debt restructurings (“TDRs”), are classified as impaired loans, and if the loans are on nonaccrual status as of the date of restructuring, the loans are included in the nonaccrual loan balances noted above. Nonaccrual loan balances do not include loans that have been restructured that were performing as of the restructure date. At December 31, 2011, the Company had $1.1 million in accruing TDRs. At December 31, 2010, the Company had no accruing TDRs. 

At December 31, 2011 and 2010, there were no loans 90 days past due and still accruing interest. 

The table below provides information concerning the composition of OREO at December 31, 2011 and 2010, respectively. 

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The Company owned $7.9 million in other real estate at December 31, 2011, which we had acquired from borrowers, compared to $8.1 million at December 31, 2010. OREO primarily relates to four properties with a total carrying value of $6.3 million at December 31, 2011. One of the properties, with a carrying value of $2.3 million at December 31, 2011, is a completed condominium project on the Florida Gulf Coast. The Company had previously purchased a participation interest in the first lien mortgage loan on the condominium project on the Florida Gulf Coast from Silverton Bank. Subsequently, this loan defaulted and was foreclosed upon and the Company’s interest in the property is currently included in OREO. Following Silverton Bank's failure on May 1, 2010, the FDIC has held this property as the receiver of Silverton Bank. CB Richard Ellis, a national real estate firm, has been managing this property and selling condominiums in the project as a FDIC contractor. The Company depends upon the FDIC and CB Richard Ellis for information regarding this property and its performance. Based upon the latest information available to us, including appraisals, current unit sales, and comparable sales, we believe that the fair value of the Company’s interest in these properties, less selling costs, is greater than or equal to the Company’s recorded investment. During 2011, the Company learned that the FDIC approved a bulk sale of the condominiums and club amenities, which may speed the disposition of this property. 

