NOTE 6: ALLOWANCE FOR LOAN LOSSES

Changes in the allowance for loan losses for the years ended December 31, 2013 and 2012 and information pertaining to the allocation of the allowance for loan losses and balances of the allowance for loan losses and loans receivable based on individual and collective impairment evaluation by loan portfolio class at the indicated dates are summarized in the tables below. An allocation of a portion of the allowance to a given portfolio class does not limit the Company’s ability to absorb losses in another portfolio class.

	December 31, 2013
	1-4 family
	first-lien			Residential								Other
	residential			construction		Commercial			Commercial			commercial
(In thousands)	mortgage			mortgage		real estate			lines of credit			and industrial
Allowance for loan losses:
Beginning Balance	$	811		$	-	$	1,748		$	440		$	750
Charge-offs		(153	)		-		(46	)		(124	)		(149	)
Recoveries		47			-		19			22			-
Provisions		(56	)		-		581			59			233
Ending balance	$	649		$	-	$	2,302		$	397		$	834
Ending balance: related to loans
individually evaluated for impairment	$	59		$	-	$	649		$	135		$	107
Ending balance: related to loans
collectively evaluated for impairment	$	590		$	-	$	1,653		$	262		$	727

Loans receivables:
Ending balance	$	166,298		$	1,982	$	95,536		$	14,444		$	32,675
Ending balance: individually
evaluated for impairment	$	952		$	-	$	3,541		$	381		$	405
Ending balance: collectively
evaluated for impairment	$	165,346		$	1,982	$	91,995		$	14,063		$	32,269

			Home equity			Other
	Municipal		and junior liens			consumer			Unallocated		Total
Allowance for loan losses:
Beginning Balance	$	2	$	494		$	168		$	88	$	4,501
Charge-offs		-		(81	)		(98	)		-		(651	)
Recoveries		-		19			52			-		159
Provisions		-		1			14			200		1,032
Ending balance	$	2	$	433		$	136		$	288	$	5,041
Ending balance: related to loans
individually evaluated for impairment	$	-	$	84		$	2		$	-	$	1,036
Ending balance: related to loans
collectively evaluated for impairment	$	2	$	349		$	134		$	288	$	4,005

Loans receivables:
Ending balance	$	5,122	$	21,110		$	4,166				$	341,333
Ending balance: individually
evaluated for impairment	$	-	$	459		$	2				$	5,740
Ending balance: collectively
evaluated for impairment	$	5,122	$	20,651		$	4,164				$	335,592

	December 31, 2012
	1-4 family
	first-lien			Residential									Other
	residential			construction			Commercial			Commercial			commercial
(In thousands)	mortgage			mortgage			real estate			lines of credit			and industrial
Allowance for loan losses:
Beginning Balance	$	664		$	-		$	1,346		$	463		$	649
Charge-offs		(108	)		-			(142	)		-			(89	)
Recoveries		75			-			14			50			-
Provisions		180			-			530			(73	)		190
Ending balance	$	811		$	-		$	1,748		$	440		$	750
Ending balance: related to loans
individually evaluated for impairment	$	215		$	-		$	401		$	-		$	207
Ending balance: related to loans
collectively evaluated for impairment	$	596		$	-		$	1,347		$	440		$	543

Loans receivables:
Ending balance	$	173,955		$	2,655		$	82,329		$	13,748		$	31,477
Ending balance: individually
evaluated for impairment	$	2,151		$	-		$	2,736		$	358		$	882
Ending balance: collectively
evaluated for impairment	$	171,804		$	2,655		$	79,593		$	13,390		$	30,595


				Home equity			Other
	Municipal			and junior liens			consumer			Unallocated			Total
Allowance for loan losses:
Beginning Balance	$	2		$	501		$	162		$	193		$	3,980
Charge-offs		-			(8	)		(161	)		-			(508	)
Recoveries		-			6			59			-			204
Provisions		-			(5	)		108			(105	)		825
Ending balance	$	2		$	494		$	168		$	88		$	4,501
Ending balance: related to loans
individually evaluated for impairment	$	-		$	95		$	5		$	-		$	923
Ending balance: related to loans
collectively evaluated for impairment	$	2		$	399		$	163		$	88		$	3,578

Loans receivables:
Ending balance	$	3,588		$	22,073		$	3,469					$	333,294
Ending balance: individually
evaluated for impairment	$	-		$	535		$	5					$	6,667
Ending balance: collectively
evaluated for impairment	$	3,588		$	21,538		$	3,464					$	326,627