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Various loans secured by first mortgages were assigned as collateral for term notes, certificates of deposit, advances from the Federal Home Loan Bank, and unused lines of credit. The mortgage loans pledged as collateral amounted to $195,267,091 and $104,739,882 at December 31, 2001 and 2000, respectively. 

## Note 14 - Allowance for Loan Losses >. 

The changes in the allowance for loan losses were as follows: 

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At December 31, 2001, $10.7 million ($13.1 million at December 31, 2000) in commercial and real estate loans over $1,000,000 was considered impaired with an allowance of $3.7 million ($7.8 million at December 31, 2000), of which $2 million was established based on the fair value of the collateral (2000-$392,000) and $1.7 million was established based on the present value of expected future cash flows (2000-$7.4 million). There were no consumer loans over $1,000,000 considered impaired at December 31, 2001 and 2000. The average recorded investment in impaired loans amounted to $11.9 million for 2001 (2000 - $8.8 million). Interest income in the amount of approximately $376,900 was recognized on impaired loans in 2001 (2000 - approximately $227,000; 1999 - approx- imately $428,000). 

