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Loans
 6 Months Ended
Jun. 30, 2011
Notes to Financial Statements [Abstract]  
Loans
(6) Loans

Major classifications of loans at June 30, 2011 and December 31, 2010 are as follows:

   
June 30,
  
December 31,
 
(In thousands)
 
2011
  
2010
 
Residential mortgage loans:
      
1-4 family first-lien residential mortgages
 $149,603  $143,661 
Construction
  2,729   3,569 
    152,332   147,230 
          
Commercial loans:
        
Real estate
  70,038   69,042 
Lines of credit
  13,440   14,122 
Other commercial and industrial
  20,692   20,779 
Municipal loans
  3,888   4,826 
    108,058   108,769 
          
Consumer loans:
        
Home equity and junior liens
  24,986   25,168 
Other consumer
  3,461   3,411 
    28,447   28,579 
          
Total loans
  288,837   284,578 
Net deferred loan costs
  659   718 
Less allowance for loan losses
  (4,006)  (3,648)
Loans receivable, net
 $285,490  $281,648 

The Company grants residential mortgage, commercial and consumer loans to customers throughout Oswego and parts of Onondaga counties. Although the Company has a diversified loan portfolio, a substantial portion of its borrowers’ abilities to honor their contracts is dependent upon the counties’ employment and economic conditions.

Residential mortgage loans with a carrying value of $66.4 million have been pledged by the Company to the Federal Home Loan Bank of New York under a blanket collateral agreement to secure the Company’s line of credit and term borrowings.

Loan Origination / Risk Management

The Company has 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 frequently providing management with reports related to loan production, loan quality, loan delinquencies, non-performing and potential problem loans.  Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

The loan portfolio is segregated into risk rating categories based on the borrower’s overall financial condition, repayment sources, guarantors, and value of collateral, if appropriate.  The risk ratings are evaluated at least annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial, residential mortgage or consumer loans.  Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss.  Loans classified as loss are considered uncollectible and are charged to the allowance for loan loss.  Loans not classified are rated pass.

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company's internal risk rating system as of June 30, 2011 and December 31, 2010:

   
June 30, 2011
 
      
Special
          
(In thousands)
 
Pass
  
Mention
  
Substandard
  
Doubtful
  
Total
 
Residential mortgage loans:
               
1-4 family first-lien residential mortgages
 $144,693  $1,708  $3,152  $50  $149,603 
Construction
  2,729   -   -   -   2,729 
    147,422   1,708   3,152   50   152,332 
Commercial loans:
                    
Real estate
  66,039   801   3,165   33   70,038 
Lines of credit
  12,838   64   538   -   13,440 
Other commercial and industrial
  18,022   1,747   923   -   20,692 
Municipal loans
  3,888   -   -   -   3,888 
    100,787   2,612   4,626   33   108,058 
Consumer loans:
                    
Home equity and junior liens
  23,261   426   1,299   -    24,986 
Other consumer
  3,345   19   61   36   3,461 
    26,606   445   1,360   36   28,447 
Total loans
 $274,815  $4,765  $9,138  $119  $288,837 


   
December 31, 2010
 
      
Special
          
(In thousands)
 
Pass
  
Mention
  
Substandard
  
Doubtful
  
Total
 
Residential mortgage loans:
               
1-4 family first-lien residential mortgages
 $138,435  $1,725  $3,501  $-  $143,661 
Construction
  3,569   -   -   -   3,569 
    142,004   1,725   3,501   -   147,230 
Commercial loans:
                    
Real estate
  63,834   524   4,684   -   69,042 
Lines of credit
  13,280   28   814   -   14,122 
Other commercial and industrial
  19,857   163   759   -   20,779 
Municipal loans
  4,826   -   -   -   4,826 
    101,797   715   6,257   -   108,769 
Consumer loans:
                    
Home equity and junior liens
  23,559   316   1,293   -    25,168 
Other consumer
  3,271   30   110   -    3,411 
    26,830   346   1,403   -   28,579 
Total loans
 $270,631  $2,786  $11,161  $-  $284,578 

Management has reviewed its loan portfolio and determined that, to the best of its knowledge, no exposure exists to sub-prime or other high-risk residential mortgages.  The Company is not in the practice of originating these types of loans.

Non-accrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received within thirty days of the payment due date.

An age analysis of past due loans, segregated by portfolio segment and class of loans, as of June 30, 2011 and December 31, 2010, was as follows:

   
June 30, 2011
 
                    
   
30-59 Days
  
60-89 Days
  
90 Days
  
Total
     
Total Loans
 
(In thousands)
 
Past Due
  
Past Due
  
and Over
  
Past Due
  
Current
  
Receivable
 
Residential mortgage loans:
                  
1-4 family first-lien residential mortgages
 $2,068  $669  $1,036  $3,773  $145,830  $149,603 
Construction
  -   -   -   -   2,729   2,729 
    2,068   669   1,036   3,773   148,559   152,332 
Commercial loans:
                        
Real estate
  451   1,216   1,331   2,998   67,040   70,038 
Lines of credit
  330   -   131   461   12,979   13,440 
Other commercial and industrial
  278   2   1,164   1,444   19,248   20,692 
Municipal loans
  -   -   -   -   3,888   3,888 
    1,059   1,218   2,626   4,903   103,155   108,058 
Consumer loans:
                        
Home equity and junior liens
  292   437   355   1,084   23,902   24,986 
Other consumer
  12   19   45   76   3,385   3,461 
    304   456   400   1,160   27,287   28,447 
Total loans
 $3,431  $2,343  $4,062  $9,836  $279,001  $288,837 
                          
                          
     
     
   
December 31, 2010
 
   
30-59 Days
  
60-89 Days
  
90 Days
  
Total
      
Total Loans
 
(In thousands)
 
Past Due
  
Past Due
  
and Over
  
Past Due
  
Current
  
Receivable
 
Residential mortgage loans:
                        
1-4 family first-lien residential mortgages
 $2,045  $1,078  $1,335  $4,458  $139,203  $143,661 
Construction
  -   -   -   -   3,569   3,569 
    2,045   1,078   1,335   4,458   142,772   147,230 
Commercial loans:
                        
Real estate
  238   908   3,680   4,826   64,216   69,042 
Lines of credit
  205   -   69   274   13,848   14,122 
Other commercial and industrial
  734   301   475   1,510   19,269   20,779 
Municipal loans
  -   -   -   -   4,826   4,826 
    1,177   1,209   4,224   6,610   102,159   108,769 
Consumer loans:
                        
Home equity and junior liens
  586   371   303   1,260   23,908   25,168 
Other consumer
  15   7   62   84   3,327   3,411 
    601   378   365   1,344   27,235   28,579 
Total loans
 $3,823  $2,665  $5,924  $12,412  $272,166  $284,578 


Non-accrual loans, segregated by class of loan, were as follows:

   
June 30,
  
December 31,
 
(In thousands)
 
2011
  
2010
 
Residential mortgage loans:
      
1-4 family first-lien residential mortgages
 $1,036  $1,335 
Construction
  -   - 
    1,036   1,335 
Commercial loans:
        
Real estate
  1,331   3,680 
Lines of credit
  131   69 
Other commercial and industrial
  1,164   475 
Municipal loans
  -   - 
    2,626   4,224 
Consumer loans:
        
Home equity and junior liens
  355   303 
Other consumer
  45   62 
    400   365 
Total nonaccrual loans
 $4,062  $5,924 

There were no loans past due ninety days or more and still accruing interest at June 30, 2011 or December 31, 2010.

Included in the nonaccrual loan balances at June 30, 2011 and December 31, 2010 were loans classified as Troubled Debt Restructurings (“TDR”)  in the amount of $2.1 million (7 loans) and $749,000 ( 3 loans), respectively.  Loans classified as TDRs that were on an accruing basis as of Jun 30, 2011 and December 31, 2010 had recorded balances of $830,000 (5 loans) and $1.5 million (6 loans), respectively.


Impaired Loans

The following tables summarize impaired loans information by portfolio class at and for the periods ended June 30, 2011 and December 31, 2010:

         
June 30, 2011
    
      
Unpaid
     
Average
  
Interest
 
   
Recorded
  
Principal
  
Related
  
Recorded
  
Income
 
   
Investment
  
Balance
  
Allowance
  
Investment
  
Recognized
 
With no related allowance recorded:
               
1-4 family first-lien residential mortgages
 $181  $181  $-  $196  $5 
Residential mortgage construction
  -   -   -   -   - 
Commercial real estate
  1,391   1,391   -   1,658   102 
Commercial lines of credit
  -   -   -   -   - 
Other commercial and industrial
  88   88   -   76   6 
Municipal
  -   -   -   -   - 
Home equity and junior liens
  375   375   -   389   9 
Other consumer
  -   -   -   -   - 
With an allowance recorded:
                    
1-4 family first-lien residential mortgages
  1,124   1,124   222   910   33 
Residential mortgage construction
  -   -   -   -   - 
Commercial real estate
  904   904   301   2,280   6 
Commercial lines of credit
  50   50   50   250   2 
Other commercial and industrial
  717   717   432   398   13 
Municipal
  -   -   -   -   - 
Home equity and junior liens
  313   313   115   220   9 
Other consumer
  -   -   -   -   - 
Total:
                    
1-4 family first-lien residential mortgages
  1,305   1,305   222   1,106   38 
Residential mortgage construction
  -   -   -   -   - 
Commercial real estate
  2,295   2,295   301   3,938   108 
Commercial lines of credit
  50   50   50   250   2 
Other commercial and industrial
  805   805   432   474   19 
Municipal
  -   -   -   -   - 
Home equity and junior liens
  688   688   115   609   9 
Other consumer
  -   -   -   -   - 
   $5,143  $5,143  $1,120  $6,377  $176 



         December 31, 2010       
      
Unpaid
     
Average
  
Interest
 
   
Recorded
  
Principal
  
Related
  
Recorded
  
Income
 
   
Investment
  
Balance
  
Allowance
  
Investment
  
Recognized
 
With no related allowance recorded:
             
1-4 family first-lien residential mortgages
 $185  $185  $-  $441  $14 
Residential mortgage construction
  -   -   -   -   - 
Commercial real estate
  1,919   1,919   -   2,288   91 
Commercial lines of credit
  -   -   -   -   - 
Other commercial and industrial
  96   96   -   73   13 
Municipal
  -   -   -   -   - 
Home equity and junior liens
  411   411   -   119   16 
Other consumer
  -   -   -   -   - 
With an allowance recorded:
                    
1-4 family first-lien residential mortgages
  1,215   1,215   255   682   61 
Residential mortgage construction
  -   -   -   -   - 
Commercial real estate
  2,233   2,322   352   1,262   18 
Commercial lines of credit
  300   300   300   275   10 
Other commercial and industrial
  346   346   78   225   4 
Municipal
  -   -   -   -   - 
Home equity and junior liens
  252   252   110   59   8 
Other consumer
  -   -   -   -   - 
Total:
                    
1-4 family first-lien residential mortgages
  1,400   1,400   255   1,123   75 
Residential mortgage construction
  -   -   -   -   - 
Commercial real estate
  4,152   4,241   352   3,550   109 
Commercial lines of credit
  300   300   300   275   10 
Other commercial and industrial
  442   442   78   298   17 
Municipal
  -   -   -   -   - 
Home equity and junior liens
  663   663   110   178   24 
Other consumer
  -   -   -   -   - 
   $6,957  $7,046  $1,095  $5,424  $235