Loans Receivable, Net

3 Months Ended

Dec. 31, 2011

3 LOANS RECEIVABLE, NET

At December 31, 2011 and June 30, 2011, loans consisted of the following:

	(Dollars in thousands)
	December 31, 2011					June 30, 2011
Type of Loan	Amount		Percent			Amount		Percent
Mortgage Loans:
Residential	$	53,024		55.37	%	$	54,860		56.22	%
Commercial Real Estate		30,902		32.27			29,877		30.61
Land		3,381		3.53			3,283		3.36
Second Mortgage Loans		3,750		3.91			3,945		4.04
Total Mortgage Loans		91,057		95.08			91,965		94.23
Consumer Loans:
Automobile Loans		688		0.72			807		0.83
Savings Account Loans		964		1.01			1,143		1.17
Mobile Home Loans		112		0.12			139		0.14
Other Consumer Loans		191		0.20			245		0.25
Total Consumer Loans		1,955		2.05			2,334		2.39
Commercial Business Loans		2,748		2.87			3,302		3.38
Total Loans		95,760		100.00	%		97,601		100.00	%
Add: Unamortized deferred loan costs,
net of origination fees		186					199
Less: Allowance for possible loan losses		1,666					1,983
Total Loans Receivable, net	$	94,280				$	95,817

Loan Origination Risk Management. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

Commercial business and commercial real estate loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. Once it is determined that the borrower's management possesses sound ethics and solid business acumen, the Company's management examines current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial business loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial business loans are secured by the assets being financed, including business equipment, farm equipment and cattle and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans are subject to underwriting standards and processes similar to commercial business loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company's commercial real estate portfolio are diverse in terms of type and geographic location. This diversity helps reduce the Company's exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. As a general rule, the Company avoids financing single-purpose projects unless other underwriting factors are present to help mitigate risk. The Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting market areas it serves. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. At December 31, 2011, approximately 26.8% of the outstanding principal balances of the Company's commercial real estate loans were secured by owner-occupied properties.

With respect to loans to developers and builders that are secured by non-owner occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

The Company originates consumer loans utilizing a computer-based credit scoring analysis to supplement the underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Additionally, trend and outlook reports are reviewed by management on a regular basis. Underwriting standards for home equity loans are heavily influenced by statutory requirements, which include, but are not limited to, a maximum loan-to-value, collection remedies, the total aggregate balance to one borrower and documentation requirements.

The Company employs an independent, outside consultant who reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management and the Board of Directors. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company's policies and procedures.

Concentrations of Credit. Most of the Company's lending activity occurs within the State of Missouri, including eleven counties surrounding one of the largest metropolitan areas in the State of Missouri, Springfield, as well as other markets. The majority of the Company's loan portfolio consists of one-to-four family home loans, commercial and commercial real estate loans. As of December 31, 2011 and June 30, 2011, there were no concentrations of loans related to any single industry in excess of 10% of total loans.

Related Party Loans. In the ordinary course of business, the Company has granted loans to certain directors, executive officers and their affiliates (collectively referred to as "related parties"). These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other unaffiliated persons and do not involve more than normal risk of collectability. Activity in related party loans during the six months ended December 31, 2011 is presented in the following table.

Non-Accrual and Past Due Loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Non-accrual loans segregated by class of loan at December 31, 2011 and June 30, 2011 were as follows:

	(In Thousands)
	December 31, 2011		June 30, 2011
Non-Accrual Loans
Real Estate:
Residential	$	50	$	452
Commercial and Land		461		630
Commercial Business		81		251
Consumer		6		6
Total Non-Accrual Loans	$	598	$	1,339

Had non-accrual loans performed in accordance with their original contract terms, the Company would have recognized additional interest income, net of tax, of approximately $24,000 during the six month period ended December 31, 2011.

An age analysis of past due loans segregated by class of loans, as of December 31, 2011 was as follows:

		(In Thousands)
		Loans
		30 - 89 Days	90+ Days	Non- Accrual		Current	Total
	Type of Loan	Past Due	Past Due	Loans		Loans	Loans
Mortgage Loans:
	Residential	$ 733	$ -	$ 50		$52,241	$53,024
	Commercial Real Estate	88	-	368		30,446	30,902
	Land	3	-	93		3,285	3,381
	Second Mortgage Loans	42	-	-		3,708	3,750
	Total Mortgage Loans	866	-	511		89,680	91,057
Consumer Loans:
	Automobile Loans	10	-	6		672	688
	Savings Account Loans	-	-		-	964	964
	Mobile Home Loans	-	-	-		112	112
	Other Consumer Loans	-	-	-		191	191
	Total Consumer Loans	10	-	6		1,939	1,955
	Commercial Business Loans	-	-	81		2,667	2,748
	Total Loans	$ 876	$ -	$ 598		$94,286	$95,760

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, interest rates below market rates, loan maturity extensions, forbearance agreements, forgiveness of principal, extended amortizations, additional extensions of credit that creates a credit balance that exceeds the collateral value, or other actions. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months. However, such loans would as TDRs until the borrower's sustained repayment performance is at least twelve months.

When the Company modifies a loan in a TDR, it evaluates any possible impairment similar to other impaired loans based on the current fair value of the collateral, less selling costs for collateral dependent loans. Loans may also be valued based on a discounted cash flow analysis at the loan’s effective interest rate. If it is determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs) impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modifications, all TDRs are evaluated, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.

Performing loans classified as TDRs during the six months ended December 31, 2011, segregated by class, are shown in the table below:

Six months ended December 31, 2011
				Recorded
				Investment
	Number of			with no		Related
Type of Loan	Contracts			Allowance		Allowance
			(In Thousands)
Mortgage Loans:
Residential		-			-		-
Commercial Real Estate		1		$	474	$	62
Land		-			-		-
Second Mortgage Loans		-			-		-


Total Mortgage Loans	1		474		62

Consumer Loans:
Automobile Loans	-		-		-
Savings Account Loans	-		-		-
Mobile Home Loans	-		-		-
Other Consumer Loans	-		-		-
Total Consumer Loans	-		-		-
Commercial Business Loans	-		-		-
Total Loans	1	$	474	$	62

For the six months ended December 31, 2011, one commercial real estate loan was renewed and was classified as a TDR due to a reduction of the interest rate and an extension of the amortization term. The financial impact of this modification was immaterial. In addition, there was no material impact on the loan loss allowance as a result of this modification because the loan had been subject to impairment analysis and the reserve was already in place.

There were no TDR loans during the period July 1, 2011 through December 31, 2011 that have defaulted on their restructured terms. There is one commercial real estate loan that became a TDR in the quarter ended December 31, 2010, and also defaulted on the restructured terms during the same period. The property securing the loan is currently involved in a foreclosure.

As of December 31, 2011, the Bank had $554,000 of performing loans classified as TDRs including the $474,000 commercial real estate loan in the table above which became a TDR during the six months ended December 31, 2011.

Impaired Loans. Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated on an individual loan basis for all loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan's existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

Impaired loans include nonperforming loans but also include loans modified in TDRs where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collections.

Impaired loans at December 31, 2011 and June 30, 2011 are set forth in the following table. No interest income was recognized on impaired loans subsequent to their classification as impaired.

December 31, 2011	Unpaid		Recorded		Recorded
	Contractual		Investment		Investment		Total				Average
	Principal		With No		With		Recorded		Related		Recorded
	Balance		Allowance		Allowance		Investment		Allowance		Investment
	(In Thousands)
Residential Real Estate	$	468	$	89	$	243	$	332	$	137	$	598
Commercial Real Estate		3,690		1,566		2,057		3,623		67		3,323
Land		529		529		-		529		-		422
Commercial Business		109		104		-		104		5		383
Consumer		11		11		-		11		-		14
	$	4,508	$	2,299	$	2,300	$	4,599	$	209	$	4,740

June 30, 2011		Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(In Thousands)
Residential Real Estate	$	847	$	460	$	364	$	824	$	23	$	913
Commercial Real Estate		3,694		1,229		1,846		3,075		618		4,154
Land		176		176		-		176		-		351
Commercial Business		829		498		267		764		65		465
Consumer		14		14		-		14		-		3
	$	5,560	$	2,377	$	2,477	$	4,854	$	706	$	5,886

Credit Quality Indicator. As part of the on-going monitoring of the credit quality of the Company's loan portfolio, management tracks certain credit quality indicators including trends related to (i) the weighted-average risk grade of commercial loans, (ii) the level of classified commercial loans, (iii) net charge-offs, (iv) non-performing loans (see details above) and (v) the general economic conditions in the State of Missouri.

The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans. Loans are graded on a scale of 1 to 8. A description of the general characteristics of the 8 risk grades is as follows:

·	Grades 1 and 2 - These grades include loans to very high credit quality borrowers. These borrowers (grades 1 and 2), generally have significant capital strength, moderate leverage, stable earnings, growth, and readily available financing alternatives.

·	Grades 3 - This grade includes loans that are "pass grade" loans to borrowers of acceptable credit quality and risk. These borrowers have satisfactory asset quality and liquidity, adequate debt capacity and coverage, and good management in critical positions.

·	Grades 4 - This grade includes loans that require ”increased management attention”. These borrowers generally have limited additional debt capacity and modest coverage and average or below average asset quality, margins, and market share.

Grade 5 - This grade is for "Other Assets Specially Mentioned" in accordance with regulatory guidelines. This grade is intended to be temporary and includes loans to borrowers whose credit quality has clearly deteriorated and are at risk of further decline unless active measures are taken to correct the situation.

Grade 6 - This grade includes "Substandard" loans, in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. By definition under regulatory guidelines, a "Substandard" loan has defined weaknesses which make payment default or principal exposure likely, but not yet certain. Such loans are apt to be dependent upon collateral liquidation, a secondary source of repayment or an event outside of the normal course of business. Also, included in "Substandard" loans, in accordance with regulatory guidelines, are loans for which the accrual of interest has been stopped. This grade includes loans where interest is more than 90 days past due and not fully secured and loans where a specific valuation allowance may be necessary.

Grade 7 - This grade includes "Doubtful" loans in accordance with regulatory guidelines. Such loans are placed on non-accrual status and may be dependent upon collateral having a value that is difficult to determine or upon some near-term event which lacks certainty. Additionally, these loans generally have a specific valuation allowance in excess of 30% of the principal balance.

Grade 8 - This grade includes "Loss" loans in accordance with regulatory guidelines. Such loans are to be charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. "Loss" is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt.

The following tables show the outstanding balance of loans by credit quality indicator and loan segment as of December 31, 2011 and June 30, 2011:

December 31, 2011
	(In Thousands)
			Specially
Type of Loan	Pass		Mentioned		Substandard		Doubtful		Total
Mortgage Loans:
Residential	$	52,029	$	527	$	459	$	9	$	53,024
Commercial Real Estate		27,041		171		3,690		-		30,902
Land		2,851		-		530		-		3,381
Second Mortgage Loans		3,750		-		-		-		3,750
Total Mortgage Loans		85,671		698		4,679		9		91,057
Consumer Loans:
Automobile Loans		677		-		11		-		688
Savings Account Loans		964		-		-		-		964
Mobile Home Loans		112		-		-		-		112
Other Consumer Loans		191		-		-		-		191
Total Consumer Loans		1,944		-		11		-		1,955
Commercial Business Loans		2,639		-		109		-		2,748
Total Gross Loans	$	90,254	$	698	$	4,799	$	9	$	95,760

June 30, 2011
			Specially
Type of Loan	Pass		Mentioned		Substandard		Doubtful		Total
	(In Thousands)
Mortgage Loans:
Residential	$	54,032	$	-	$	828	$	-	$	54,860
Commercial Real Estate		26,008		176		3,694		-		29,878
Land		3,107		-		176		-		3,283
Second Mortgage Loans		3,926		-		19		-		3,945
Total Mortgage Loans		87,073		176		4,717		-		91,966
Consumer Loans:
Automobile Loans		793		-		14		-		807
Savings Account Loans		1,143		-		-		-		1,143
Mobile Home Loans		138		-		-		-		138
Other Consumer Loans		245		-		-		-		245
Total Consumer Loans		2,319		-		14		-		2,333
Commercial Business Loans		2,473		-		829		-		3,302
Total Gross Loans	$	91,865	$	176	$	5,560	$	-	$	97,601

The following table presents weighted average risk grades for the entire portfolio of each of the types of loans listed, and the total amount of such loans that were classified as Risk Grades 6, 7 and 8.

	December 31, 2011			June 30, 2011
	Weighted Average Risk Grade	(In Thousands) Classified Loans		Weighted Average Risk Grade	(In Thousands) Classified Loans
Commercial Real Estate	3.44	$	3,690	3.40	$	3,694
Land	3.50		530	3.19		176
Commercial Business	3.34		109	3.81		829
Total		$	4,329			$4,699

Net (charge-offs) recoveries, segregated by class of loans, were as follows:


	Six Months Ended
	December 31, 2011
	(In Thousands)
Mortgage Loans:
Residential	$	(49	)
Commercial Real Estate		(227	)
Land		-
Commercial Business Loans		(102	)
Consumer Loans		(13	)
Total	$	(391	)

In assessing the general economic conditions in the State of Missouri, management monitors and tracks the State and Counties Unemployment Rates, DJIA, S&P 500, NASDAQ, Fed Funds, Prime Rate, Crude, Gold, LIBOR and Springfield Builder Permits. Management believes these indices provide a reliable indication of the direction of overall economy from expansion to recession throughout the United States and in the State of Missouri.

Allowance for Possible Loan Losses. The allowance for possible loan losses is a reserve established through a provision for possible loan losses charged to expense, which represents management's best estimate of probable losses that have been incurred within the existing portfolio of loans. The allowance, in the judgment of management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio. The Company's allowance for possible loan loss methodology includes allowance allocations calculated in accordance with U.S. GAAP calculated in accordance with Accounting Standards Codification (“ASC”) 450 and ASC 310. Accordingly, the methodology is based on historical loss experience by type of credit and internal risk grade, specific homogeneous risk pools and specific loss allocations, with adjustments for current events and conditions. The Company's process for determining the appropriate level of the allowance for possible loan losses is designed to account for credit deterioration as it occurs. The provision for possible loan losses reflects loan quality trends, including the levels of and trends related to non-accrual loans, past due loans, potential problem loans, criticized loans and net charge-offs or recoveries, among other factors. The provision for possible loan losses also reflects the totality of actions taken on all loans for a particular period. In other words, the amount of the provision reflects not only the necessary increases in the allowance for possible loan losses related to newly identified criticized loans, but it also reflects actions taken related to other loans including, among other things, any necessary increases or decreases in required allowances for specific loans or loan pools.

The level of the allowance reflects management's continuing evaluation of industry concentrations, specific credit risks, loan loss experience, current loan portfolio quality, present economic, political and regulatory conditions and unidentified losses inherent in the current loan portfolio. Portions of the allowance may be allocated for specific credits; however, the entire allowance is available for any credit that, in management's judgment, should be charged off. While management utilizes its best judgment and information available, the ultimate adequacy of the allowance is dependent upon a variety of factors beyond the Company's control, including, among other things, the performance of the Company's loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.

The Company's allowance for possible loan losses consists of three elements: (i) specific valuation allowances determined in accordance with ASC Topic 310 based on probable losses on specific loans; (ii) historical valuation allowances determined in accordance with ASC Topic 450 based on historical loan loss experience for similar loans with similar characteristics and trends, adjusted, as necessary, to reflect the impact of current conditions; and (iii) general valuation allowances determined in accordance with ASC Topic 450 based on general economic conditions and other qualitative risk factors both internal and external to the Company.

The allowances established for probable losses on specific loans are based on a regular analysis and evaluation of problem loans. Loans are classified based on an internal credit risk grading process that evaluates, among other things: (i) the obligor's ability to repay; (ii) the underlying collateral, if any; and (iii) the economic environment and industry in which the borrower operates. This analysis is performed at the relationship manager level for all commercial loans. When a loan has a calculated Risk Grade of 6 or higher, the officer analyzes the loan to determine whether the loan is impaired and, if impaired, the need to specifically allocate a portion of the allowance for possible loan losses to the loan. Specific valuation allowances are determined by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower's industry, among other things.

Historical valuation allowances are calculated based on the historical loss experience of specific types of loans and the internal risk grade of such loans at the time they were charged-off. The Company calculates historical loss ratios for pools of similar loans with similar characteristics based on the proportion of actual charge-offs experienced to the total population of loans in the pool. The historical loss ratios are updated each quarter based on actual charge-off experience. A historical valuation allowance is established for each pool of similar loans based upon the product of the historical loss ratio and the total dollar amount of the loans in the pool. The Company's pools of similar loans include similarly risk-graded groups of commercial and industrial loans, commercial real estate loans, consumer real estate loans and consumer and other loans. Starting in fiscal 2011, each quarterly review has included calculations for “look back periods” of one, two and three years and the Bank used the highest historical loss rate in its allowance calculations.

General valuation allowances are based on general economic conditions and other qualitative risk factors both internal and external to the Company. In general, such valuation allowances are determined by evaluating, among other things: (i) the experience, ability and effectiveness of the Bank's lending management and staff; (ii) the effectiveness of the Company's loan policies, procedures and internal controls; (iii) changes in asset quality; (iv) changes in loan portfolio volume; (v) the composition and concentrations of credit; (vi) the impact of competition on loan structuring and pricing; (vii) the effectiveness of the internal loan review function; (viii) the impact of environmental risks on portfolio risks; and (ix) the impact of rising interest rates on portfolio risk. Management evaluates the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis. Each component is determined to have either a high, moderate or low degree of risk. The results are then input into a "general allocation matrix" to determine an appropriate general valuation allowance.

Included in the general valuation allowances are allocations for groups of similar loans with risk characteristics that exceed certain concentration limits established by management. Concentration risk limits have been established, among other things, for certain industry concentrations, large balance and highly leveraged credit relationships that exceed specified risk grades, and loans originated with policy exceptions that exceed specified risk grades.

Loans identified as losses by management, internal/external loan review and/or bank examiners are charged-off. Furthermore, consumer loan accounts are charged-off automatically based on regulatory requirements.

The following table details activity in the allowance for possible loan losses by portfolio segment for the quarter ended December 31, 2011. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

	(In Thousands)
							Commercial
	Mortgage						Business							Consumer
	Loans						Loans							Loans						Total

Balance – June 30, 2011	$		1,702				$		258					$		23				$		1,983
Provision for loan losses			(35		)				104							5						74
Charge-offs			(342		)				(126			)				(20		)				(488		)
Recoveries				66						24					7						97
Net (Charge-offs) / Recoveries				(276		)				(102	)				(13		)				(391		)
Balance – December 31, 2011		$		1,391				$		260			$		15				$		1,666

Period-end amount allocated to:
Loans individually evaluated	$	204	$	5	$	-	$	209
for impairment
Loans collectively evaluated		1,187		255		15		1,457
for impairment
Balance – December 31, 2011	$	1,391	$	260	$	15	$	1,666

The Company's recorded investment in loans as of December 31, 2011 and June 30, 2011 related to each balance in the allowance for possible loan losses by portfolio segment and disaggregated on the basis of the Company's impairment methodology was as follows:

	(In Thousands)
	Mortgage Loans		Commercial Business Loans		Consumer Loans		Total Loans
December 31, 2011
Loans individually evaluated for impairment	$	4,688	$	109	$	11	$	4,808
Loans collectively evaluated for impairment		86,369		2,639		1,944		90,952
Ending Balance	$	91,057	$	2,748	$	1,955	$	95,760

June 30, 2011
Loans individually evaluated for impairment	$	4,717	$	829	$	14	$	5,560
Loans collectively evaluated for impairment		87,248		2,473		2,320		92,041
Ending Balance	$	91,965	$	3,302	$	2,334	$	97,601

(In Thousands)

Balance outstanding at June 30, 2011

Principal additions

Principal reductions

Balance at December 31, 2011

FIRST BANCSHARES INC /MO/ 10-Q