California Bank of Commerce NOTES TO FINANCIAL STATEMENTS 5.  ALLOWANCE FOR LOAN LOSSES  (Continued) Troubled Debt Restructurings Purchased Loans 35 Although the Bank purchased various loans under loan participation agreements with other banks  during 2011, none were purchased for which there was at acquisition evidence of deterioration of  credit quality or, with knowledge that all contractually required payments would not be collected. A loan is considered to be in payment default once it is 90 days contractually past due under the  modified terms.  There were no loans modified as troubled debt restructurings for which there was a payment default  within twelve months following the modification during the year ending December 31, 2011. The troubled debt restructurings described above increased the allowance for loan losses by $446,000  and resulted in charge offs of $418,000 during the year ending December 31, 2011. One modification was made involving a reduction of the stated interest rate of the loan for a period of  14 months. The remaining nine modifications involved an extension of the maturity date and were for  periods ranging from 3 months to 12 months. During the year ending December 31, 2011, the terms of certain loans were modified as troubled  debt restructurings. The modification of the terms of such loans included one or a combination of the  following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a  stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent  reduction of the recorded investment in the loan. The Bank has allocated $446,000 of specific reserves to customers whose loan terms have been  modified in troubled debt restructurings as of December 31, 2011. No specific reserves were allocated  to troubled debt restructurings at December 31, 2010. The Bank has committed to lend additional  amounts totaling up to $495,231 as of December 31, 2011 to customers with outstanding loans that  are classified as troubled debt restructurings.  Pre-Modification  Post-Modification  Number Outstanding Outstanding of Recorded Recorded Loans Investment Investment Troubled Debt Restructurings: Commercial & Industrial 8 $ 3,620,286 $ 3,620,286 Real Estate – Other  2  2,745,373  2,327,373 Total 10  $ 6,365,659  $ 5,947,659 The following table presents loans by class modified as troubled debt restructurings that occurred  during the year ending December 31, 2011: