BLUE RIDGE BANKSHARES, INC.  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  December 31,2012  Note 4. Loans Receivable and Related Allowance for Loan Losses (Continued)  Factors considered by management in evaluating impairment include payment status, collateral value,  and the probability of collecting scheduled principal and interest payments when due. Management  determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking  into consideration all of the circumstances surrounding the loan and the borrower, including the  length ofthe delay, the reasons for the delay, the borrower’s prior payment record, and the amount of  the shortfall in relation to the principal and interest owed.  The Bank does not separately evaluate individual consumer and residential mortgage loans for  impairment, unless such loans are part of a larger relationship that is impaired, or are classified as a  troubled debt restmcturing agreement.  Once the determination has been made that a loan is impaired, the determination of whether a specific  allocation of the allowance is necessary is measured by comparing the recorded investment in the  loan to the fair value ofthe loan using one of three methods: (a) the present value of expected future  cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or  (c) the fair value of the collateral less selling costs. The method is selected on a loan-by-loan basis,  with management primarily utilizing the fair value of collateral method, which is required for loans  that are collateral dependent. The evaluation of the need and amount of a specific allocation of the  allowance and whether a loan can be removed from impairment status is made on a monthly basis.  The Bank’s policy for recognizing interest income on impaired loans does not differ from its overall  policy for interest recognition.  The following table presents impaired loans by class, segregated by those for which a specific  allowance was required and those for which a specific allowance was not necessary as of  December 31, 2012 and 2011.  16  (Continued)  December 31,2012  Residential Loans  Home Equity Loans  Commercial/Faun Loans  Total impaired loans  Impaired Loans with  Specific Allowance  Recorded  Investment  $  - - $  Related  Allowance  $  - - $  Impaired  Loans with  No Specific  Allowance  Recorded  Investment  $ 355,543 23,416  11,209  $ 390,168 $  L  Total Impaired Loans  Average  Recorded  Investment  355,543  23,416  11,209  390,168  Unpaid  Principal  Balance  $ 355,543 23,416  11,209  $ 390,168 $  _$_  Interest  Recognized  While  Impaired  17,381  373  1,688  19,442 