LOANS (Tables)

3 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Composition of loans receivable and loans held-for-sale

The composition of loans receivable and loans held-for-sale is as follows:

(in thousands)	September 30, 2013			December 31, 2012
Residential 1-4 family	$	225,262		$	198,552
Residential 5+ multifamily		4,894			3,889
Construction of residential 1-4 family		1,250			2,379
Home equity credit		34,163			34,162
Residential real estate		265,569			238,982
Commercial		91,817			87,382
Construction of commercial		9,154			5,823
Commercial real estate		100,971			93,205
Farm land		4,193			4,320
Vacant land		9,168			9,926
Real estate secured		379,901			346,433
Commercial and industrial		35,837			38,094
Municipal		4,101			3,378
Consumer		3,974			4,181
Loans receivable, gross		423,813			392,086
Deferred loan origination fees and costs, net		1,149			1,032
Allowance for loan losses		(4,656	)		(4,360	)
Loans receivable, net	$	420,306		$	388,758
Loans held-for-sale
Residential 1-4 family	$	708		$	1,879

Composition of loans receivable by risk rating grade

The composition of loans receivable by risk rating grade is as follows:

(in thousands)	Pass		Special mention		Substandard		Doubtful		Loss		Total
September 30, 2013
Residential 1-4 family	$	206,691	$	11,754	$	6,721	$	96	$	-	$	225,262
Residential 5+ multifamily		2,711		1,208		975		-		-		4,894
Construction of residential 1-4 family		1,250		-		-		-		-		1,250
Home equity credit		31,541		1,240		1,382		-		-		34,163
Residential real estate		242,193		14,202		9,078		96		-		265,569
Commercial		66,899		16,513		8,405		-		-		91,817
Construction of commercial		8,412		152		590		-		-		9,154
Commercial real estate		75,311		16,665		8,995		-		-		100,971
Farm land		1,611		1,436		1,146		-		-		4,193
Vacant land		5,759		293		3,116		-		-		9,168
Real estate secured		324,874		32,596		22,335		96		-		379,901
Commercial and industrial		28,149		6,675		1,013		-				35,837
Municipal		4,101		-		-		-		-		4,101
Consumer		3,854		102		18		-		-		3,974
Loans receivable, gross	$	360,978	$	39,373	$	23,366	$	96	$	-	$	423,813
(in thousands)		Pass		Special mention		Substandard		Doubtful		Loss		Total
December 31, 2012
Residential 1-4 family	$	180,442	$	12,473	$	5,538	$	99	$	-	$	198,552
Residential 5+ multifamily		2,872		773		244		-		-		3,889
Construction of residential 1-4 family		1,570		-		809		-		-		2,379
Home equity credit		30,981		1,848		1,333		-		-		34,162
Residential real estate		215,865		15,094		7,924		99		-		238,982
Commercial		64,817		13,299		9,266		-		-		87,382
Construction of commercial		5,055		297		471		-		-		5,823
Commercial real estate		69,872		13,596		9,737		-		-		93,205
Farm land		2,799		341		1,180		-		-		4,320
Vacant land		4,885		863		4,178		-		-		9,926
Real estate secured		293,421		29,894		23,019		99		-		346,433
Commercial and industrial		28,453		8,300		1,341		-		-		38,094
Municipal		3,378		-		-		-		-		3,378
Consumer		3,994		159		28		-		-		4,181
Loans receivable, gross	$	329,246	$	38,353	$	24,388	$	99	$	-	$	392,086

Composition of loans receivable by delinquency status

The composition of loans receivable by delinquency status is as follows:

			Past due
(in thousands)		Current		1-29 days		30-59 days		60-89 days		90-179 days		180 days and over		30 days and over		Accruing 90 days and over		Non- accrual
September 30, 2013
Residential 1-4 family	$	217,263	$	3,156	$	2,644	$	2,012	$	53	$	134	$	4,843	$	-	$	3,013
Residential 5+ multifamily		4,678		115		-		101		-		-		101		-		-
Construction of residential 1-4 family		1,250		-		-		-		-		-		-		-		-
Home equity credit		33,018		337		447		191		132		38		808		23		420
Residential real estate		256,209		3,608		3,091		2,304		185		172		5,752		23		3,433
Commercial		88,105		1,902		213		438		127		1,032		1,810		-		2,114
Construction of commercial		7,940		1,074		-		140		0		-		140		-		-
Commercial real estate		96,045		2,976		213		578		127		1,032		1,950		-		2,114
Farm land		3,782		-		27		-		384		-		411		-		384
Vacant land		5,910		120		58		7		-		3,073		3,138		-		3,072
Real estate secured		361,946		6,704		3,389		2,889		696		4,277		11,251		23		9,003
Commercial and industrial		35,346		328		30		112		-		21		163		-		140
Municipal		4,091		10		-		-		-		-		-		-		-
Consumer		3,857		89		13		15		-		-		28		-		-
Loans receivable, gross	$	405,240	$	7,131	$	3,432	$	3,016	$	696	$	4,298	$	11,442	$	23	$	9,143
December 31, 2012
Residential 1-4 family	$	190,488	$	2,545	$	3,578	$	639	$	1,185	$	117	$	5,519	$	-	$	3,024
Residential 5+ multifamily		3,889		-		-		-		-		-		-		-		-
Construction of residential 1-4 family		2,379		-		-		-		-		-		-		-		-
Home equity credit		32,540		890		113		396		-		223		732		-		442
Residential real estate		229,296		3,435		3,691		1,035		1,185		340		6,251		-		3,466
Commercial		83,477		864		1,104		566		58		1,313		3,041		-		2,214
Construction of commercial		5,659		-		164		-		-		-		164		-		21
Commercial real estate		89,136		864		1,268		566		58		1,313		3,205		-		2,235
Farm land		3,898		422		-		-		-		-		-		-		-
Vacant land		5,932		-		-		48		740		3,206		3,994		-		3,994
Real estate secured		328,262		4,721		4,959		1,649		1,983		4,859		13,450		-		9,695
Commercial and industrial		37,618		351		26		99		-		-		125		-		164
Municipal		3,378		-		-		-		-		-		-		-		-
Consumer		4,034		108		25		14		-		-		39		-		-
Loans receivable, gross	$	373,292	$	5,180	$	5,010	$	1,762	$	1,983	$	4,859	$	13,614	$	-	$	9,859

Troubled debt restructurings

Troubled debt restructurings occurring during the periods are as follows:

	Three months ended September 30, 2013						Nine months ended September 30, 2013
(in thousands)	Quantity		Pre-modification balance		Post-modification balance		Quantity		Pre-modification balance		Post-modification balance
Residential real estate		-	$	-	$	-		4	$	1,906	$	1,906
Commercial real estate		-		-		-		-		-		-
Commercial and industrial		-		-		-		1		91		91
Troubled debt restructurings		-	$	-	$	-		5	$	1,997	$	1,997
Rate reduction		-	$	-	$	-		2	$	1,070	$	1,070
Rate reduction and debt consolidation		-		-		-		1		91		91
Rate reduction and interest only pursuant to sale		-		-		-		1		758		758
Rate reduction and term extension		-		-		-		1		78		78
Troubled debt restructurings		-	$	-	$	-		5	$	1,997	$	1,997

Changes in the allowance for loan losses

Changes in the allowance for loan losses are as follows:

	Three months ended September 30												Nine months ended September 30
(in thousands)	Beginning balance		Provision			Charge-offs			Reco-veries		Ending balance		Beginning balance		Provision			Charge-offs			Reco-veries			Ending balance
2013 Periods
Residential	$	1,892	$	227		$	(159	)	$	-	$	1,960	$	1,934	$	259		$	(233	)	$	-		$	1,960
Commercial		1,403		58			(19	)		-		1,442		1,059		471			(94	)		6			1,442
Land		137		22			(23	)		-		136		301		56			(221	)		-			136
Real estate		3,432		307			(201	)		-		3,538		3,294		786			(548	)		6			3,538
Commercial & industrial		541		(62	)		-			-		479		499		(16	)		(4	)		-			479
Municipal		40		1			-			-		41		36		5			-			-			41
Consumer		69		8			(23	)		9		63		91		5			(47	)		14			63
Unallocated		549		(14	)		-			-		535		440		96			(1	)		-			535
Totals	$	4,631	$	240		$	(224	)	$	9	$	4,656	$	4,360	$	876		$	(600	)	$	20		$	4,656
2012 Periods
Residential	$	1,475	$	92		$	(88	)	$	-	$	1,479	$	1,478	$	226		$	(225	)	$	-		$	1,479
Commercial		1,277		(206	)		(41	)		3		1,033		1,139		(72	)		(41	)		7			1,033
Land		219		318			(224	)		-		313		410		169			(266	)		-			313
Real estate		2,971		204			(353	)		3		2,825		3,027		323			(532	)		7			2,825
Commercial & industrial		820		(23	)		-			1		798		704		114			(29	)		9			798
Municipal		27		6			-			-		33		24		9			-			-			33
Consumer		66		74			(14	)		5		131		79		92			(63	)		22			130
Unallocated		323		69			-			-		392		242		152			-			(1	)		393
Totals	$	4,207	$	330		$	(367	)	$	9	$	4,179	$	4,076	$	690		$	(624	)	$	37		$	4,179

Composition of loans receivable and the allowance for loan losses

The composition of loans receivable and the allowance for loan losses is as follows:

	Collectively evaluated				Individually evaluated				Total portfolio
(in thousands)		Loans		Allowance		Loans		Allowance		Loans		Allowance
September 30, 2013
Residential 1-4 family	$	219,211	$	862	$	6,051	$	647	$	225,262	$	1,509
Residential 5+ multifamily		3,934		20		960		-		4,894		20
Construction of residential 1-4 family		1,250		6		-		-		1,250		6
Home equity credit		33,672		361		491		64		34,163		425
Residential real estate		258,067		1,249		7,502		711		265,569		1,960
Commercial		86,744		973		5,073		365		91,817		1,338
Construction of commercial		9,154		104		-		-		9,154		104
Commercial real estate		95,898		1,077		5,073		365		100,971		1,442
Farm land		3,809		66		384		-		4,193		66
Vacant land		6,096		65		3,072		5		9,168		70
Real estate secured		363,870		2,457		16,031		1,081		379,901		3,538
Commercial and industrial		34,997		408		840		71		35,837		479
Municipal		4,101		41		-		-		4,101		41
Consumer		3,893		36		81		27		3,974		63
Unallocated allowance		-		535		-		-		-		535
Totals	$	406,861	$	3,477	$	16,952	$	1,179	$	423,813	$	4,656
	Collectively evaluated					Individually evaluated			Total portfolio
(in thousands)		Loans		Allowance		Loans		Allowance		Loans		Allowance
December 31, 2012
Residential 1-4 family	$	191,886	$	743	$	6,666	$	652	$	198,552	$	1,395
Residential 5+ multifamily		2,913		22		976		50		3,889		72
Construction of residential 1-4 family		2,379		10		-		-		2,379		10
Home equity credit		33,697		365		465		92		34,162		457
Residential real estate		230,875		1,140		8,107		794		238,982		1,934
Commercial		81,635		931		5,747		64		87,382		995
Construction of commercial		5,802		64		21		-		5,823		64
Commercial real estate		87,437		995		5,768		64		93,205		1,059
Farm land		4,320		66		-		-		4,320		66
Vacant land		5,795		70		4,131		164		9,926		234
Real estate secured		328,427		2,271		18,006		1,022		346,433		3,293
Commercial and industrial		37,073		467		1,021		32		38,094		499
Municipal		3,378		36		-		-		3,378		36
Consumer		4,061		39		120		53		4,181		92
Unallocated allowance		-		440		-		-		-		440
Totals	$	372,939	$	3,253	$	19,147	$	1,107	$	392,086	$	4,360

Credit quality segments of loans receivable and allowance for loan losses

The credit quality segments of loans receivable and the allowance for loan losses are as follows:

	Collectively evaluated				Individually evaluated				Total portfolio
(in thousands)		Loans		Allowance		Loans		Allowance		Loans		Allowance
September 30, 2013
Performing loans	$	398,638	$	2,693	$	80	$	27	$	398,718	$	2,720
Potential problem loans		8,223		249		905		122		9,128		371
Impaired loans		-		-		15,967		1,030		15,967		1,030
Unallocated allowance		-		535		-		-		-		535
Totals	$	406,861	$	3,477	$	16,952	$	1,179	$	423,813	$	4,656
December 31, 2012
Performing loans	$	364,594	$	2,567	$	121	$	52	$	364,715	$	2,619
Potential problem loans		8,345		246		2,464		131		10,809		377
Impaired loans		-		-		16,562		924		16,562		924
Unallocated allowance		-		440		-		-		-		440
Totals	$	372,939	$	3,253	$	19,147	$	1,107	$	392,086	$	4,360

Certain data with respect to impaired loans

Certain data with respect to impaired loans individually evaluated is as follows:

	Impaired loans with specific allowance								Impaired loans with no specific allowance
(in thousands)	Loan balance										Loan balance
		Book		Note		Average		Specific allowance		Income recognized		Book		Note		Average		Income recognized
September 30, 2013
Residential 1-4 family	$	3,850	$	4,085	$	4,016	$	573	$	62	$	2,648	$	2,958	$	2,286	$	44
Home equity credit		87		88		104		41		1		381		387		212		2
Residential real estate		3,937		4,173		4,120		614		63		3,029		3,345		2,498		46
Commercial		3,264		3,301		2,083		365		104		1,559		1,995		2,709		26
Construction of commercial		-		-		4		-		-		-		20		10		-
Farm land		-		-		-		-		-		384		384		38		-
Vacant land		249		268		2,049		5		-		2,823		3,892		1,295		-
Real estate secured		7,450		7,742		8,256		984		167		7,795		9,636		6,550		72
Commercial and industrial		127		160		268		46		1		595		996		600		27
Consumer		-		-		-		-		-		-		-		-		-
Totals	$	7,577	$	7,902	$	8,524	$	1,030	$	168	$	8,390	$	10,632	$	7,150	$	99

	Impaired loans with specific allowance								Impaired loans with no specific allowance
(in thousands)	Loan balance										Loan balance
		Book		Note		Average		Specific allowance		Income recognized		Book		Note		Average		Income recognized
December 31, 2012
Residential 1-4 family	$	3,857	$	3,925	$	2,404	$	578	$	77	$	2,263	$	2,460	$	1,601	$	34
Home equity credit		351		351		146		92		-		91		93		203		-
Residential real estate		4,208		4,276		2,550		670		77		2,354		2,553		1,804		34
Commercial		1,629		1,784		1,925		64		60		3,381		3,576		3,122		82
Vacant land		3,186		3,387		1,455		158		-		808		1,467		2,358		4
Real estate secured		9,023		9,447		5,930		892		137		6,543		7,596		7,284		120
Commercial and industrial		335		368		833		32		13		661		1,063		854		31
Consumer		-		-		-		-		-		-		-		-		-
Totals	$	9,358	$	9,815	$	6,763	$	924	$	150	$	7,204	$	8,659	$	8,138	$	151