Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2012

Aging of Recorded Investment in Loans by Class of Loans

The following table provides the components of the Company’s recorded investment in loans for each portfolio segment at September 30, 2012:


	Residential Real Estate		Land		Construction			Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	111,594	$	9,663	$	11,878		$	63,944		$	19,146		$	37,348	$	31,796	$	285,369
Accrued interest receivable		447		42		31			170			56			142		180		1,068
Net deferred loan origination fees and costs		64		2		(13	)		(8	)		(10	)		154		0		189

Recorded investment in loans	$	112,105	$	9,707	$	11,896		$	64,106		$	19,192		$	37,644	$	31,976	$	286,626

Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	2,698	$	4	$	394		$	2,986		$	1,809		$	101	$	0	$	7,992
Collectively evaluated for impairment		109,407		9,703		11,502			61,120			17,383			37,543		31,976		278,634
Acquired with deteriorated credit quality		0		0		0			0			0			0		0		0

Ending balance	$	112,105	$	9,707	$	11,896		$	64,106		$	19,192		$	37,644	$	31,976	$	286,626

The following table provides the components of the Company’s recorded investment in loans for each portfolio segment at December 31, 2011:


	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business			Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Recorded Investment in Loans:
Principal loan balance	$	116,338	$	9,910	$	6,963	$	57,680	$	20,722		$	38,641	$	29,832	$	280,086
Accrued interest receivable		463		60		16		160		64			162		202		1,127
Net deferred loan origination fees and costs		67		2		0		0		(10	)		84		0		143

Recorded investment in loans	$	116,868	$	9,972	$	6,979	$	57,840	$	20,776		$	38,887	$	30,034	$	281,356

Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	2,281	$	5	$	247	$	2,853	$	1,928		$	87	$	0	$	7,401
Collectively evaluated for impairment		114,587		9,967		6,732		54,987		18,848			38,800		30,034		273,955
Acquired with deteriorated credit quality		0		0		0		0		0			0		0		0

Ending balance	$	116,868	$	9,972	$	6,979	$	57,840	$	20,776		$	38,887	$	30,034	$	281,356

Allowance for Loan Losses

An analysis of the allowance for loan losses as of September 30, 2012 is as follows:


	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	267	$	0	$	0	$	441	$	914	$	29	$	0	$	1,651
Collectively evaluated for impairment		943		102		60		520		185		824		306		2,940
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0

Ending balance	$	1,210	$	102	$	60	$	961	$	1,099	$	853	$	306	$	4,591

An analysis of the allowance for loan losses as of December 31, 2011 is as follows:


	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	183	$	0	$	0	$	539	$	936	$	0	$	0	$	1,658
Collectively evaluated for impairment		645		93		33		730		224		400		399		2,524
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0

Ending balance	$	828	$	93	$	33	$	1,269	$	1,160	$	400	$	399	$	4,182

An analysis of the changes in the allowance for loan losses for the three months and nine months ended September 30, 2012 is as follows:


	Residential Real Estate			Land			Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended September 30, 2012
Beginning balance	$	1,173		$	102		$	40	$	826		$	1,154		$	840		$	297		$	4,432
Provisions for loan losses		51			0			20		135			(60	)		158			46			350
Charge-offs		(15	)		0			0		0			0			(154	)		(90	)		(259	)
Recoveries		1			0			0		0			5			9			53			68

Ending balance	$	1,210		$	102		$	60	$	961		$	1,099		$	853		$	306		$	4,591

Changes in Allowance for Loan Losses for the nine-months ended September 30, 2012
Beginning balance	$	828		$	93		$	33	$	1,269		$	1,160		$	400		$	399		$	4,182
Provisions for loan losses		697			12			27		(308	)		(70	)		765			2			1,125
Charge-offs		(327	)		(4	)		0		0			0			(330	)		(236	)		(897	)
Recoveries		12			1			0		0			9			18			141			181

Ending balance	$	1,210		$	102		$	60	$	961		$	1,099		$	853		$	306		$	4,591

An analysis of the changes in the allowance for loan losses for the three months and nine months ended September 30, 2011 is as follows:


	Residential Real Estate			Land		Construction		Commercial Real Estate			Commercial Business			Home Equity & 2nd Mtg			Other Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended September 30, 2011
Beginning balance	$	1,217		$	59	$	26	$	1,271		$	1,020		$	562		$	406		$	4,561
Provisions for loan losses		146			2		2		114			130			3			3			400
Charge-offs		(80	)		0		0		0			0			(250	)		(73	)		(403	)
Recoveries		5			0		3		0			36			16			45			105

Ending balance	$	1,288		$	61	$	31	$	1,385		$	1,186		$	331		$	381		$	4,663

Changes in Allowance for Loan Losses for the nine-months ended September 30, 2011
Beginning balance	$	1,024		$	55	$	21	$	1,051		$	1,251		$	606		$	465		$	4,473
Provisions for loan losses		601			6		7		402			199			136			(26	)		1,325
Charge-offs		(346	)		0		0		(68	)		(305	)		(458	)		(211	)		(1,388	)
Recoveries		9			0		3		0			41			47			153			253

Ending balance	$	1,288		$	61	$	31	$	1,385		$	1,186		$	331		$	381		$	4,663

Impaired Loans by Class of Loans

The following table summarizes the Company’s impaired loans by class of loans as of September 30, 2012 and for the three months and nine months ended September 30, 2012:


	At September 30, 2012						Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method		Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,259	$	1,531	$	0	$	1,152	$	1	$	1	$	1,203	$	2	$	2
Land		4		5		0		23		0		0		23		0		1
Construction		394		402		0		330		0		0		293		0		0
Commercial real estate		1,220		1,511		0		1,229		0		0		1,231		0		0
Commercial business		0		0		0		0		0		0		0		0		0
Home Equity/2nd mortgage		0		0		0		43		0		0		64		2		1
Other consumer		0		0		0		0		1		0		0		1		0

		2,877		3,449		0		2,777		2		1		2,814		5		4

Loans with an allowance recorded:
Residential		1,439		1,524		267		1,382		0		1		1,151		0		1
Land		0		0		0		0		0		0		0		0		0
Construction		0		0		0		0		0		0		0		0		0
Commercial real estate		1,766		1,845		441		1,630		0		0		1,602		0		0
Commercial business		1,809		1,909		914		1,826		0		0		1,877		0		0
Home Equity/2nd mortgage		101		102		29		128		0		0		111		0		0
Other consumer		0		0		0		0		0		0		0		0		0

		5,115		5,380		1,651		4,966		0		1		4,741		0		1

Total:
Residential		2,698		3,055		267		2,534		1		2		2,354		2		3
Land		4		5		0		23		0		0		23		0		1
Construction		394		402		0		330		0		0		293		0		0
Commercial real estate		2,986		3,356		441		2,859		0		0		2,833		0		0
Commercial business		1,809		1,909		914		1,826		0		0		1,877		0		0
Home Equity/2nd mortgage		101		102		29		171		0		0		175		2		1
Other consumer		0		0		0		0		1		0		0		1		0

	$	7,992	$	8,829	$	1,651	$	7,743	$	2	$	2	$	7,555	$	5	$	5

The following table summarizes the Company’s impaired loans by class of loans for the three months and nine months ended September 30, 2011:


	Three Months Ended September 30, 2011						Nine Months Ended September 30, 2011
	Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method		Average Recorded Investment		Interest Income Recognized		Interest Recognized - Cash Method
	(In thousands)
Loans with no related allowance recorded:
Residential	$	820	$	3	$	2	$	936	$	13	$	5
Land		6		1		3		5		1		3
Construction		331		0		0		264		0		0
Commercial real estate		241		9		9		339		9		9
Commercial business		25		0		0		17		0		0
Home Equity/2nd mortgage		16		2		1		18		4		2
Other consumer		3		2		0		6		3		1

		1,442		17		15		1,585		30		20

Loans with an allowance recorded:
Residential		2,481		5		0		2,260		0		36
Land		0		0		0		0		0		0
Construction		0		0		0		70		0		0
Commercial real estate		1,004		0		0		1,101		0		0
Commercial business		1,981		0		0		2,063		0		0
Home Equity/2nd mortgage		265		0		0		352		0		0
Other consumer		0		0		0		6		0		0

		5,731		5		0		5,852		0		36

Total:
Residential		3,301		8		2		3,196		13		41
Land		6		1		3		5		1		3
Construction		331		0		0		334		0		0
Commercial real estate		1,245		9		9		1,440		9		9
Commercial business		2,006		0		0		2,080		0		0
Home Equity/2nd mortgage		281		2		1		370		4		2
Other consumer		3		2		0		12		3		1

	$	7,173	$	22	$	15	$	7,437	$	30	$	56

The following table summarizes the Company’s impaired loans by class of loans as of December 31, 2011:


	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,149	$	1,507	$	0
Land		5		6		0
Construction		247		249		0
Commercial real estate		1,215		1,280		0
Commercial business		0		0		0
HE/2nd mortgage		87		94		0
Other consumer		0		0		0

		2,703		3,136		0

Loans with an allowance recorded:
Residential		1,132		1,233		183
Land		0		0		0
Construction		0		0		0
Commercial real estate		1,638		1,933		539
Commercial business		1,928		2,023		936
HE/2nd mortgage		0		0		0
Other consumer		0		0		0

		4,698		5,189		1,658

Total:
Residential		2,281		2,740		183
Land		5		6		0
Construction		247		249		0
Commercial real estate		2,853		3,213		539
Commercial business		1,928		2,023		936
Home Equity/2nd mortgage		87		94		0
Other consumer		0		0		0

	$	7,401	$	8,325	$	1,658

Recorded Investment in Nonperforming Loans by Class of Loans

Nonperforming loans consists of nonaccrual loans and loans over 90 days past due and still accruing interest. The following table presents the recorded investment in nonperforming loans by class of loans at September 30, 2012 and December 31, 2011:


	September 30, 2012						December 31, 2011
	Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans		Nonaccrual Loans		Loans 90+ Days Past Due Still Accruing		Total Nonperforming Loans
	(In thousands)
Residential	$	2,698	$	67	$	2,765	$	2,281	$	143	$	2,424
Land		4		0		4		5		38		43
Construction		394		0		394		247		0		247
Commercial real estate		2,986		0		2,986		2,853		0		2,853
Commercial business		1,809		0		1,809		1,928		0		1,928
Home Equity/2nd mortgage		101		0		101		87		159		246
Other consumer		0		32		32		0		23		23

Total	$	7,992	$	99	$	8,091	$	7,401	$	363	$	7,764

Recorded Investment in Loans by Risk Category

The following table presents the recorded investment in loans by risk category and class of loans as of the date indicated:


	Residential Real Estate		Land		Construction		Commercial Real Estate		Commercial Business		Home Equity & 2nd Mtg		Other Consumer		Total
	(In thousands)
September 30, 2012
Pass	$	105,004	$	7,306	$	11,303	$	53,670	$	15,264	$	37,009	$	31,875	$	261,431
Special Mention		2,113		268		199		4,917		1,526		136		55		9,214
Substandard		2,290		2,129		0		2,533		593		398		46		7,989
Doubtful		2,698		4		394		2,986		1,809		101		0		7,992
Loss		0		0		0		0		0		0		0		0

Ending balance	$	112,105	$	9,707	$	11,896	$	64,106	$	19,192	$	37,644	$	31,976	$	286,626

December 31, 2011
Pass	$	113,037	$	7,578	$	6,217	$	46,544	$	16,961	$	38,513	$	29,976	$	258,826
Special Mention		862		255		307		5,392		1,462		63		44		8,385
Substandard		688		2,134		208		3,051		425		224		14		6,744
Doubtful		2,281		5		247		2,853		1,928		87		0		7,401
Loss		0		0		0		0		0		0		0		0

Ending balance	$	116,868	$	9,972	$	6,979	$	57,840	$	20,776	$	38,887	$	30,034	$	281,356

Tdrs by Class of Loan and Accrual Status

The following table summarizes the Company’s troubled debt restructurings (TDRs) by class of loan and accrual status as of September 30, 2012 and December 31, 2011:


	September 30, 2012								December 31, 2011
	Accruing		Nonaccrual		Total		Related Allowance for Loan Losses		Accruing		Nonaccrual		Total		Related Allowance for Loan Losses
	(In thousands)
Troubled debt restructurings:
Residential real estate	$	181	$	690	$	871	$	102	$	112	$	516	$	628	$	11
Land		135		0		135		0		135		0		135		0
Construction		0		288		288		0		207		247		454		0
Commercial real estate		0		1,557		1,557		87		0		1,603		1,603		211
Commercial business		0		1,809		1,809		914		0		1,843		1,843		914
Home equity and 2nd mortgage		0		33		33		26		8		0		8		0
Consumer		0		0		0		0		0		0		0		0

Total	$	316	$	4,377	$	4,693	$	1,129	$	462	$	4,209	$	4,671	$	1,136

Information in Regard to Tdrs that Occurred During Period

The following table summarizes information in regard to TDRs that were restructured during the three and nine months ended September 30, 2012.


	Three months ended September 30, 2012						Nine months ended September 30, 2012
	Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance		Number of Contracts		Pre-Modification Outstanding Balance		Post-Modification Outstanding Balance
	(Dollars in thousands)						(Dollars in thousands)
Troubled debt restructurings:
Residential real estate		2	$	190	$	190		3	$	281	$	278
Home equity & 2nd mortgage		0		0		0		1		25		25
Construction		0		0		0		0		0		0
Commercial real estate		0		0		0		0		0		0
Commercial business		0		0		0		0		0		0
Construction		0		0		0		0		0		0
Consumer		0		0		0		0		0		0

Total		2	$	190	$	190		4	$	306	$	303

Financing Receivable Recorded Investment Current Past Due

Aging of Recorded Investment in Loans by Class of Loans

The following table presents the aging of the recorded investment loans by class of loans at September 30, 2012:


	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	4,618	$	1,377	$	1,122	$	7,117	$	104,988	$	112,105
Land		301		4		0		305		9,402		9,707
Construction		113		141		0		254		11,642		11,896
Commercial real estate		244		0		443		687		63,419		64,106
Commercial business		8		17		0		25		19,167		19,192
Home Equity/2nd mortgage		584		140		69		793		36,851		37,644
Other consumer		313		43		32		388		31,588		31,976

Total	$	6,181	$	1,722	$	1,666	$	9,569	$	277,057	$	286,626

The following table presents the aging of the recorded investment in loans by class of loans at December 31, 2011:


	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Residential	$	5,205	$	1,068	$	1,035	$	7,308	$	109,560	$	116,868
Land		442		43		43		528		9,444		9,972
Construction		0		0		247		247		6,732		6,979
Commercial real estate		676		0		1,258		1,934		55,906		57,840
Commercial business		256		0		0		256		20,520		20,776
Home Equity/2nd mortgage		558		72		246		876		38,011		38,887
Other consumer		306		37		23		366		29,668		30,034

Total	$	7,443	$	1,220	$	2,852	$	11,515	$	269,841	$	281,356

- Definition

Tabular disclosure of troubled debt restructurings in the current period: (1) for each restructuring, the principal changes in terms, the major features of settlement, or both; (2) the aggregate gain (loss) on restructuring of payables; (3) the income tax effect on the gain or loss recognized on the restructuring of payables; (4) the gain (loss) recognized on the restructuring of payables, after the impact of income tax expense or benefit; and (5) the aggregate gain (loss) on transfer of assets recognized during the period, after the impact of income tax expense or benefit.

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