If a loan was considered to be impaired prior to modification as a TDR, then there is no impact on the allowance for loan losses as a result of the modification, because the loan was already being evaluated individually for impairment. If a loan was not impaired prior to modification as a TDR,  then there could be an impact on the allowance for loan losses, either positive or negative, as a result of the modification because of the movement of the loan from the pools of loans being evaluated collectively for impairment to being evaluated individually for impairment.  Property and equipment are stated at cost less accumulated depreciation and amortization.  Depreciation is computed on the straight -line method over the estimated useful lives and amortization of leasehold improvements is computed on the straight -line method over the shorter of the assets’ estimated useful lives or lease term of the related assets, as follows:  Investment in restricted bank stocks, which represent required investments in the common stock of correspondent banks, is carried at cost and consists of the common stock of the Federal Home Loan Bank of Pittsburgh ( FHLB) of $1, 748, 000 and $ 1, 774, 000, as of December 31, 2013 and 2012,  respectively, and Atlantic Central Bankers Bank ( ACBB) of $ 40, 000 as of December 31, 2013 and 2012.  Management evaluates the restricted stock for impairment in accordance with FASB ASC 942 - 325 -35. Management’ s determination of whether these investments are impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value.  The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as ( 1) the significance of the decline in net assets of the FHLB as compared to the capital stock amount of the FHLB and the length of time this situation has persisted, ( 2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, and ( 3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB.  Management believes no impairment charge was necessary related to restricted stock during 2013 or 2012.  Assets acquired through, or in lieu of, loan foreclosure are held - for -sale and are initially recorded at fair value at the date of foreclosure less costs to sell, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed real estate.  Foreclosed Real Estate Investment in Restricted Bank Stocks Years Buildings and leasehold improvements 10- 30 Furniture, fixture and equipment 3 - 7 Software 3 - 5 Property and Equipment 15