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The Company’s impaired loans increased from $2.5 million at December 31, 2011 to $14.5 million at December 31, 2012. The increase in impaired loans during 2012 was the result of an increase in non-accrual loans and TDRs. The difference between the unpaid contractual principal and the impaired loan balance is a result of charge-offs recorded against impaired loans. The difference in the Company’s non-accrual loan balances and impaired loan balances at December 31, 2012 and 2011, was related to TDRs that are current and accruing interest, but still classified as impaired. The following table presents information on impaired loans: 

(Dollars in thousands) 

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At December 31, 2012, the Company had eight loan relationships that were classified as TDRs compared to five at December 31, 2011. During 2012, the Company classified a commercial loan relationship consisting of two commercial loans as a TDR after agreeing to extend the maturity of the loans while the borrower liquidated the business assets securing the loans. The Company did not charge-off any of the loan balances as the anticipated proceeds were expected to exceed the loan balances. As of December 31, 2012, the outstanding balances of these loans totaled $196,000 and were classified as non-accrual and impaired. Also in 2012, a $3.3 million land loan was subject to a TDR. The loan was restructured into two land loans totaling $2.2 million, which were classified as non-accrual and impaired at December 31, 2012, while the remaining balance was charged off. Another land loan relationship totaling $1.6 million was restructured as a TDR during 2012, resulting in a $708,000 charge-off. The remaining loan balances of $896,000 were current and accruing interest at December 31, 2012, but still classified as impaired. A third land loan relationship totaling $3.9 million was classified as a TDR in 2012 when the loan was renewed after the development stalled. As part of the restructuring agreement, the Company agreed to allow the borrower to attempt to sell the properties over the next year. Because the value of the collateral securing the loan exceeded the outstanding balances, no charge-off was recorded. As of December 31, 2012, the loan balances of $3.9 million were current and accruing interest, but still classified as impaired. 

During 2011, the Company restructured three loan relationships that we identified as TDRs. One of the restructurings was a construction and land loan relationship totaling $599,000 which was secured by raw land which had 

