Management’s Discussion and Analysis The table below provides information concerning the composition of nonaccrual loans at December 31, 2011 and 2010,  respectively. The Company discontinues the accrual of interest income when (1) there is a significant deterioration in the financial  condition of the borrower and full repayment of principal and interest is not expected or (2) the principal or interest is more  than 90 days past due, unless the loan is both well-secured and in the process of collection. At December 31, 2011, the  Company had $10.4 million in loans on nonaccrual, compared to $11.8 million at December 31, 2010. Due to the weakening credit status of a borrower, the Company may elect to formally restructure certain loans to  facilitate a repayment plan that minimizes the potential losses that we might incur. Restructured loans, or troubled debt  restructurings (“TDRs”), are classified as impaired loans, and if the loans are on nonaccrual status as of the date of  restructuring, the loans are included in the nonaccrual loan balances noted above. Nonaccrual loan balances do not include  loans that have been restructured that were performing as of the restructure date. At December 31, 2011, the Company had  $1.1 million in accruing TDRs. At December 31, 2010, the Company had no accruing TDRs. At December 31, 2011 and 2010, there were no loans 90 days past due and still accruing interest. The table below provides information concerning the composition of OREO at December 31, 2011 and 2010,  respectively. The Company owned $7.9 million in other real estate at December 31, 2011, which we had acquired from borrowers,  compared to $8.1 million at December 31, 2010. OREO primarily relates to four properties with a total carrying value of  $6.3 million at December 31, 2011. One of the properties, with a carrying value of $2.3 million at December 31, 2011, is a  completed condominium project on the Florida Gulf Coast. The Company had previously purchased a participation interest in  the first lien mortgage loan on the condominium project on the Florida Gulf Coast from Silverton Bank. Subsequently, this  loan defaulted and was foreclosed upon and the Company’s interest in the property is currently included in OREO. Following Silverton Bank's failure on May 1, 2010, the FDIC has held this property as the receiver of Silverton Bank. CB  Richard Ellis, a national real estate firm, has been managing this property and selling condominiums in the project as a FDIC contractor. The Company depends upon the FDIC and CB Richard Ellis for information regarding this property and its  performance. Based upon the latest information available to us, including appraisals, current unit sales, and comparable  sales, we believe that the fair value of the Company’s interest in these properties, less selling costs, is greater than or equal to  the Company’s recorded investment. During 2011, the Company learned that the FDIC approved a bulk sale of the  condominiums and club amenities, which may speed the disposition of this property. page 15 December 31 (In thousands) 2011 2010 Other real estate owned: Commercial: Building $ 615 — Developed lots 1,325 Residential: Condominiums 3,663 5,494 New construction  97 369 Developed lots  141 136 Undeveloped land 1,401 1,746 Other 656 380 Total other real estate owned $ 7,898 8,125 December 31 (In thousands) 2011 2010 Nonaccrual loans: Commercial and industrial $ 76 521 Construction and land development 5,095 4,102 Commercial real estate 3,457 4,735 Residential real estate 1,726 2,474 Consumer installment — 1 Total nonaccrual loans / nonperfoming loans $ 10,354 11,833