indicates a collateral deficiency of $42 thousand for this loan. In addition, during the fourth quarter nine loans totaling $1.6 million were removed from impaired status, as a result of credit upgrades, transfers to foreclosed real estate, or charge-offs. As of December 31, 2010, all loans classified  as impaired were also included in the previously discussed substandard loan balances. There were no other loans considered to be impaired loans as of December 31, 2010. Typically, management does not individually classify smaller- balance homogeneous loans, such as mortgage or consumer loans, as impaired. At December 31, 2010, the Bancorp classified five loans totaling $12.1 million as troubled debt restructurings, which involves modifying the terms of a loan to forego a portion of interest or principal or reducing the interest rate on the loan to a rate materially less than market rates. The troubled debt restructurings are comprised of one construction develop- ment participation hotel loan in the amount of $1.2 million, for which a significant deferral of principal repayment was granted. The second troubled debt restructuring is for a commercial real estate participation hotel loan in the amount of $5.0 million, for which a significant deferral of principal repayment and extension in maturity was granted. The third is for a commercial real estate hotel loan in the amount of $5.0 million for which a significant deferral of principal repayment was granted. This loan is on accrual status and classified as impaired. In addition, two commercial real estate troubled debt restructurings in the total amount of $893 thousand are currently in bankruptcy proceedings,  for which a significant deferral of principal and interest repayment was granted by the Bank as required by the  bankruptcy plan. All of the loans classified as troubled  debt restructurings are currently on non-accrual status and classified as impaired except for one loan, which is on accrual status. The valuation basis for the Bancorp’s troubled debt restructurings is based on the present value of cash flows, unless consistent cash flows are not present, then the fair value of the collateral securing the loan is the basis for  valuation. At December 31, 2010, management is of the opinion that there are no loans, except those discussed above, where known information about possible credit problems of borrowers causes management to have serious doubts as  to the ability of such borrowers to comply with the present loan repayment terms and which may result in disclosure of such loans as non-accrual, past due or restructured loans. Management does not presently anticipate that any of the non-performing loans or classified loans would materially impact future operations, liquidity or capital resources. For 2010, $5.6 million in provisions to the ALL were required, compared to $8.5 million for 2009. The ALL provision decrease for 2010 is a result of lower charge-off activity for the Bancorp’s commercial real estate participation loans. The current year ALL provisions were related to the elevated credit risk in the commercial real estate participa- tion, commercial real estate and commercial business loan portfolios. Charge-offs, net of recoveries, totaled $2.6 million for 2010, compared to $7.1 million for 2009. The 2010 net loan charge-offs of $2.6 million were comprised of $720 thousand in commercial real estate participation loans, $919 thousand in commercial real estate loans, $727 thousand in residential real estate loans, $172 thousand in commercial business loans and $25 thousand in consumer loans. The ALL provisions take into consideration management’s current judgments about the credit quality of the loan  portfolio, loan portfolio balances, changes in the portfolio mix and local economic conditions. In determining the provision for loan losses for the current period, management has given consideration to increased risks associated with the local economy, changes in loan balances and mix, and asset quality. The ALL to total loans was 2.18% at December 31, 2010, compared to 1.33% at December 31, 2009. The increase in ALL to total loans was a result of the increase  in substandard and non-performing loans, and additional qualitative risks associated with the current stressed economic environment. The ALL to non-performing loans (coverage ratio) was 37.8% at December 31, 2010, compared to 32.9% at December 31, 2009. The December 31, 2010 balance in the ALL account of $9.1 million is considered adequate by management after evaluation of the loan portfolio, past experience and current economic and market conditions. While management may periodically allocate portions of the allowance for specific problem loans, the whole allowance is available for any loan charge offs that occur. The allocation of the ALL reflects performance and growth trends within the various loan categories, as well as consideration of the facts and circumstances that affect the repayment of individual loans, and loans which have been pooled as of the evaluation date, with particular attention given to non-performing loans and loans which have been classified as substandard, doubtful or loss. Management has allocated reserves to both performing and non-performing loans based on current information available. At December 31, 2010, the Bancorp's investment  portfolio totaled $160.5 million and was invested as follows: 61.1% in U.S. government agency mortgage-backed  securities and collateralized mortgage obligations, 35.4%  in municipal securities, 2.6% in U.S. government agency debt securities, and 0.9% in trust preferred securities.  At December 31, 2010, securities available-for-sale totaled $142.1 million or 88.5% of total securities. Available-for-sale securities are those the Bancorp may decide to sell if needed for liquidity, asset-liability management or other reasons. During 2010, securities increased by $16.1 million (11.2%). In addition, at December 31, 2010, the Bancorp had $3.4 million in FHLB stock. As of December 31, 2010, the Bancorp’s management was notified that the quarterly interest payments for three  of its four investments in trust preferred securities are in “payment in kind” status. Payment in kind status results in a temporary delay in the payment of interest. As a result of a delay in the collection of the interest payments, management placed these securities on non-accrual status. At December 31, 2010, the cost basis of the three trust preferred securities on non-accrual status totaled $3.9 million. Current estimates indicate that the interest payment delays may exceed ten years. One trust preferred security with a cost basis of  $1.3 million remains on accrual status. Deposits are a fundamental and cost-effective source  of funds for lending and other investment purposes. The 14