Audited Financial Statements The following table provides the average recorded investment in impaired loans and the amount of interest income  recognized on impaired loans after impairment by portfolio segment and class. Year ended December 31, 2011 Average Total interest recorded income (In thousands) investment recognized Impaired loans: Commercial and industrial $ 316 9 Construction and land development 4,136 — Commercial real estate: Owner occupied 1,828 24 Other 2,374 — Total commercial real estate 4,202 24 Residential real estate: Consumer mortgages 1,376 — Investment property 146 Total residential real estate 1,522 — Consumer installment — Total  $ 10,176 33 For the years ended December 31, 2010 and 2009, the average recorded investments in impaired loans were $9.2  million and $4.0 million, respectively. Total interest income recognized on impaired loans for the years ended December 31,  2010, and 2009 was not material. Impaired loans also included TDRs. In the normal course of business, management may grant concessions to  borrowers who are experiencing financial difficulty. A concession may include, but is not limited to, reduction of the stated  interest rate of the loan, reduction of accrued interest, extension of the maturity date or reduction of the face amount or  maturity amount of the debt. A concession has been granted when, as a result of the restructuring, the Bank does not expect  to collect all amounts due, including interest at the original stated rate. A concession may have also been granted if the  debtor is not able to access funds elsewhere at a market rate for debt with similar risk characteristics as the restructured debt. The Company’s determination of whether a loan modification is a TDR, the Company considers the individual facts and  circumstances surrounding each modification. As part of the credit approval process, the restructured loans are evaluated for adequate collateral protection in determining the appropriate accrual status at the time of restructuring. Similar to other impaired loans, TDRs are measured for impairment based on the present value of expected payments  using the loan’s original effective interest rate as the discount rate, or the fair value of the collateral, less selling costs if the  loan is collateral dependent. If the recorded investment in the loan exceeds the measure of fair value, impairment is  recognized by establishing a valuation allowance as part of the allowance for loan losses or a charge-off to the allowance for  loan losses. In periods subsequent to the modification, all TDRs are evaluated, including those that have payment defaults,  for possible impairment. At December 31, 2011 and 2010, the Company had impaired loans classified as TDRs of $9.6 million and $7.6 million,  respectively. At December 31, 2011 the Company had $1.1 million in accruing TDRs . The Company had no accruing TDRs  at December 31, 2010. For impaired loans classified as TDRs, the related allowance for loan losses was approximately $1.0  million at both December 31, 2011 and 2010. At December 31, 2011, there were no significant outstanding commitments to  advance additional funds to customers whose loans had been restructured.  Effective July 1, 2011, the Company adopted ASU 2011-02,  A Creditor’s Determination of Whether a Restructuring is  a Troubled Debt Restructuring . See Note 1. As such, the Company reassessed all restructurings that occurred on or after  January 1, 2011 for identification and disclosure as TDRs. Troubled Debt Restructurings  page 59