Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2013

The following table provides the components of the Company’s recorded investment in loans for each portfolio segment at June 30, 2013:


	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	$	107,773	$	10,155	$	12,068		$	70,306		$	21,395		$	33,821	$	32,222	$	287,740

Accrued interest receivable		418		52		27			186			54			118		159		1,014

Net deferred loan origination fees and costs		58		3		(12	)		(23	)		(9	)		238		0		255


Recorded investment in loans	$	108,249	$	10,210	$	12,083		$	70,469		$	21,440		$	34,177	$	32,381	$	289,009


Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	1,821	$	127	$	203		$	1,127		$	1,776		$	325	$	0	$	5,379
Collectively evaluated for impairment		106,428		10,083		11,880			69,342			19,664			33,852		32,381		283,630
Acquired with deteriorated credit quality		0		0		0			0			0			0		0		0


Ending balance	$	108,249	$	10,210	$	12,083		$	70,469		$	21,440		$	34,177	$	32,381	$	289,009

The following table provides the components of the Company’s recorded investment in loans for each portfolio segment at December 31, 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	$	108,097	$	9,607	$	11,746		$	68,731		$	18,612		$	36,962	$	31,186	$	284,941

Accrued interest receivable		444		48		29			188			53			147		184		1,093

Net deferred loan origination fees and costs		62		2		(12	)		(17	)		(10	)		177		0		202


Recorded investment in loans	$	108,603	$	9,657	$	11,763		$	68,902		$	18,655		$	37,286	$	31,370	$	286,236


Recorded Investment in Loans as Evaluated for Impairment:
Individually evaluated for impairment	$	2,370	$	125	$	403		$	2,836		$	1,776		$	73	$	0	$	7,583
Collectively evaluated for impairment		106,233		9,532		11,360			66,066			16,879			37,213		31,370		278,653
Acquired with deteriorated credit quality		0		0		0			0			0			0		0		0


Ending balance	$	108,603	$	9,657	$	11,763		$	68,902		$	18,655		$	37,286	$	31,370	$	286,236

Allowance for Loan Losses

An analysis of the allowance for loan losses as of June 30, 2013 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	$	93	$	0	$	0	$	164	$	1,065	$	25	$	0	$	1,347
Collectively evaluated for impairment		812		73		60		1,127		195		869		352		3,488
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0


Ending balance	$	905	$	73	$	60	$	1,291	$	1,260	$	894	$	352	$	4,835

An analysis of the allowance for loan losses as of December 31, 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	$	213	$	0	$	0	$	275	$	1,098	$	66	$	0	$	1,652
Collectively evaluated for impairment		709		71		0		1,035		125		853		291		3,084
Acquired with deteriorated credit quality		0		0		0		0		0		0		0		0


Ending balance	$	922	$	71	$	0	$	1,310	$	1,223	$	919	$	291	$	4,736

An analysis of the changes in the allowance for loan losses for the three months and six months ended June 30, 2013 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 June 30, 2013
Beginning balance	$	940		$	69		$	50	$	1,291		$	1,226		$	886		$	330		$	4,792
Provisions for loan losses		24			6			10		89			33			9			54			225
Charge-offs		(99	)		(2	)		0		(89	)		0			(21	)		(65	)		(276	)
Recoveries		40			0			0		0			1			20			33			94


Ending balance	$	905		$	73		$	60	$	1,291		$	1,260		$	894		$	352		$	4,835


Changes in Allowance for Loan Losses for the six-months ended June 30, 2013
Beginning balance	$	922		$	71		$	0	$	1,310		$	1,223		$	919		$	291		$	4,736
Provisions for loan losses		236			4			60		56			(13	)		(24	)		156			475
Charge-offs		(297	)		(2	)		0		(89	)		0			(35	)		(171	)		(594	)
Recoveries		44			0			0		14			50			34			76			218


Ending balance	$	905		$	73		$	60	$	1,291		$	1,260		$	894		$	352		$	4,835

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


	Residential								Commercial			Commercial			Home Equity &			Other
	Real Estate			Land			Construction		Real Estate			Business			2nd Mtg			Consumer			Total
	(In thousands)
Allowance for loan losses:
Changes in Allowance for Loan Losses for the three-months ended June 30, 2012
Beginning balance	$	1,060		$	99		$	35	$	924		$	1,175		$	651		$	284		$	4,228
Provisions for loan losses		147			3			5		(98	)		(22	)		246			19			300
Charge-offs		(35	)		0			0		0			0			(62	)		(55	)		(152	)
Recoveries		1			0			0		0			1			5			49			56


Ending balance	$	1,173		$	102		$	40	$	826		$	1,154		$	840		$	297		$	4,432


Changes in Allowance for Loan Losses for the six-months ended June 30, 2012
Beginning balance	$	828		$	93		$	33	$	1,269		$	1,160		$	400		$	399		$	4,182
Provisions for loan losses		646			12			7		(443	)		(10	)		607			(44	)		775
Charge-offs		(312	)		(4	)		0		0			0			(176	)		(146	)		(638	)
Recoveries		11			1			0		0			4			9			88			113


Ending balance	$	1,173		$	102		$	40	$	826		$	1,154		$	840		$	297		$	4,432

Impaired Loans

The following table summarizes the Company’s impaired loans as of June 30, 2013 and for the three months and six months ended June 30, 2013:


	At June 30, 2013						Three Months Ended June 30, 2013						Six Months Ended June 30, 2013
			Unpaid				Average		Interest		Interest		Average		Interest		Interest
	Recorded		Principal		Related		Recorded		Income		Recognized -		Recorded		Income		Recognized -
	Investment		Balance		Allowance		Investment		Recognized		Cash Method		Investment		Recognized		Cash Method
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,181	$	1,453	$	0	$	1,273	$	2	$	0	$	1,324	$	5	$	1
Land		127		134		0		126		0		0		125		0		0
Construction		203		217		0		232		0		0		289		0		0
Commercial real estate		139		141		0		106		0		0		582		0		0
Commercial business		0		0		0		0		4		3		0		4		3
Home Equity/2nd mortgage		260		262		0		251		1		1		167		2		1
Other consumer		0		0		0		0		0		0		0		0		0


		1,910		2,207		0		1,988		7		4		2,487		11		5


Loans with an allowance recorded:
Residential		640		790		93		625		0		0		731		0		0
Land		0		0		0		3		0		0		2		0		0
Construction		0		0		0		0		0		0		0		0		0
Commercial real estate		988		1,063		164		1,161		0		0		1,208		0		0
Commercial business		1,776		1,909		1,065		1,776		0		0		1,776		0		0
Home Equity/2nd mortgage		65		66		25		49		0		0		57		1		0
Other consumer		0		0		0		0		0		0		0		0		0


		3,469		3,828		1,347		3,614		0		0		3,774		1		0


Total:
Residential		1,821		2,243		93		1,898		2		0		2,055		5		1
Land		127		134		0		129		0		0		127		0		0
Construction		203		217		0		232		0		0		289		0		0
Commercial real estate		1,127		1,204		164		1,267		0		0		1,790		0		0
Commercial business		1,776		1,909		1,065		1,776		4		3		1,776		4		3
Home Equity/2nd mortgage		325		328		25		300		1		1		224		3		1
Other consumer		0		0		0		0		0		0		0		0		0


	$	5,379	$	6,035	$	1,347	$	5,602	$	7	$	4	$	6,261	$	12	$	5

The following table summarizes the Company’s impaired loans for the three months and six months ended June 30, 2012:


	Three Months Ended June 30, 2012						Six Months Ended June 30, 2012
	Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Recognized -		Recorded		Income		Recognized -
	Investment		Recognized		Cash Method		Investment		Recognized		Cash Method

Loans with no related allowance recorded:
Residential	$	1,202	$	0	$	1	$	1,184	$	1	$	1
Land		41		0		0		29		0		0
Construction		266		0		0		259		0		0
Commercial real estate		1,244		0		0		1,234		0		0
Commercial business		0		0		0		0		0		0
Home Equity/2nd mortgage		85		1		0		86		2		1
Other consumer		0		0		0		0		0		0


		2,838		1		1		2,792		3		2


Loans with an allowance recorded:
Residential		1,017		0		0		1,055		0		0
Land		0		0		0		0		0		0
Construction		0		0		0		0		0		0
Commercial real estate		1,502		0		0		1,547		0		0
Commercial business		1,885		0		0		1,899		0		0
Home Equity/2nd mortgage		171		0		1		114		0		1
Other consumer		0		0		0		0		0		0


		4,575		0		1		4,615		0		1


Total:
Residential		2,219		0		1		2,239		1		1
Land		41		0		0		29		0		0
Construction		266		0		0		259		0		0
Commercial real estate		2,746		0		0		2,781		0		0
Commercial business		1,885		0		0		1,899		0		0
Home Equity/2nd mortgage		256		1		1		200		2		2
Other consumer		0		0		0		0		0		0


	$	7,413	$	1	$	2	$	7,407	$	3	$	3

The following table summarizes the Company’s impaired loans as of December 31, 2012:


			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
	(In thousands)
Loans with no related allowance recorded:
Residential	$	1,427	$	1,760	$	0
Land		125		126		0
Construction		403		413		0
Commercial real estate		1,535		1,944		0
Commercial business		0		0		0
HE/2nd mortgage		0		0		0
Other consumer		0		0		0


		3,490		4,243		0


Loans with an allowance recorded:
Residential		943		1,020		213
Land		0		0		0
Construction		0		0		0
Commercial real estate		1,301		1,394		275
Commercial business		1,776		1,909		1,098
HE/2nd mortgage		73		73		66
Other consumer		0		0		0


		4,093		4,396		1,652


Total:
Residential		2,370		2,780		213
Land		125		126		0
Construction		403		413		0
Commercial real estate		2,836		3,338		275
Commercial business		1,776		1,909		1,098
Home Equity/2nd mortgage		73		73		66
Other consumer		0		0		0


	$	7,583	$	8,639	$	1,652

Recorded Investment in Nonperforming Loans

The following table presents the recorded investment in nonperforming loans at June 30, 2013 and December 31, 2012:


	June 30, 2013						December 31, 2012
			Loans 90+ Days		Total				Loans 90+ Days		Total
	Nonaccrual		Past Due		Nonperforming		Nonaccrual		Past Due		Nonperforming
	Loans		Still Accruing		Loans		Loans		Still Accruing		Loans
	(In thousands)

Residential	$	1,821	$	140	$	1,961	$	2,370	$	215	$	2,585
Land		127		0		127		125		0		125
Construction		203		0		203		403		0		403
Commercial real estate		1,127		0		1,127		2,836		0		2,836
Commercial business		1,776		237		2,013		1,776		0		1,776
Home Equity/2nd mortgage		325		96		421		73		56		129
Other consumer		0		9		9		0		18		18


Total	$	5,379	$	482	$	5,861	$	7,583	$	289	$	7,872

Recorded Investment in Loans by Risk Category

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


	Residential						Commercial		Commercial		Home Equity &		Other
	Real Estate		Land		Construction		Real Estate		Business		2nd Mtg		Consumer		Total
	(In thousands)
June 30, 2013
Pass	$	103,950	$	6,782	$	11,880	$	68,218	$	18,344	$	33,362	$	32,361	$	274,897
Special Mention		777		0		0		499		907		256		14		2,453
Substandard		1,701		3,301		0		625		413		234		6		6,280
Doubtful		1,821		127		203		1,127		1,776		325		0		5,379
Loss		0		0		0		0		0		0		0		0


Ending balance	$	108,249	$	10,210	$	12,083	$	70,469	$	21,440	$	34,177	$	32,381	$	289,009


December 31, 2012
Pass	$	102,618	$	7,220	$	11,244	$	63,095	$	15,026	$	36,035	$	31,302	$	266,540
Special Mention		958		17		116		1,018		1,354		553		25		4,041
Substandard		2,657		2,295		0		1,953		499		625		43		8,072
Doubtful		2,370		125		403		2,836		1,776		73		0		7,583
Loss		0		0		0		0		0		0		0		0


Ending balance	$	108,603	$	9,657	$	11,763	$	68,902	$	18,655	$	37,286	$	31,370	$	286,236

Troubled Debt Restructurings by Accrual Status

The following table summarizes the Company’s troubled debt restructurings (TDRs) by accrual status as of June 30, 2013 and December 31, 2012:


	June 30, 2013								December 31, 2012
							Related Allowance								Related Allowance
	Accruing		Nonaccrual		Total		for Loan Losses		Accruing		Nonaccrual		Total		for Loan Losses
	(In thousands)
Troubled debt restructurings:
Residential real estate	$	357	$	353	$	710	$	50	$	180	$	588	$	768	$	87
Land		0		0		0		0		0		0		0		0
Construction		0		109		109		0		0		170		170		0
Commercial real estate		1,178		0		1,178		0		0		1,534		1,534		83
Commercial business		0		1,776		1,776		1,065		0		1,776		1,776		1,098
Home equity and 2nd mortgage		0		65		65		25		41		31		72		25
Consumer		0		0		0		0		0		0		0		0


Total	$	1,535	$	2,303	$	3,838	$	1,140	$	221	$	4,099	$	4,320	$	1,293

Information in Regard to Troubled Debt Restructurings that Occurred During Period

The following table summarizes information in regard to TDRs that were restructured during the three months and six months ended June 30, 2013:


	Three months ended June 30, 2013						Six months ended June 30, 2013
			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
	Number of		Outstanding		Outstanding		Number of		Outstanding		Outstanding
	Contracts		Balance		Balance		Contracts		Balance		Balance
	(Dollars in thousands)						(Dollars in thousands)

Troubled debt restructurings:
Residential real estate		1	$	160	$	160		1	$	160	$	160
Home equity & 2nd mortgage		0		0		0		0		0		0
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		1	$	160	$	160		1	$	160	$	160

The following table summarizes information in regard to TDRs that were restructured during the six months ended June 30, 2012. There were no TDRs that were restructured during the three months ended June 30, 2012.


	Six months ended June 30, 2012
			Pre-Modification		Post-Modification
	Number of		Outstanding		Outstanding
	Contracts		Balance		Balance
	(Dollars in thousands)

Troubled debt restructurings:
Residential real estate		1	$	88	$	87
Home equity & 2nd mortgage		1		25		25
Construction		0		0		0
Commercial real estate		0		0		0
Commercial business		0		0		0
Construction		0		0		0
Consumer		0		0		0


Total		2	$	113	$	112

Loans

Loans at June 30, 2013 and December 31, 2012 consisted of the following:


	June 30,			December 31,
(In thousands)	2013			2012

Real estate mortgage loans:
Residential	$	107,773		$	108,097
Land		10,155			9,607
Residential construction		14,823			12,753
Commercial real estate		70,306			68,731
Commercial real estate construction		3,135			3,299
Commercial business loans		21,395			18,612
Consumer loans:
Home equity and second mortgage loans		33,821			36,962
Automobile loans		23,113			21,922
Loans secured by savings accounts		1,042			770
Unsecured loans		3,134			3,191
Other consumer loans		4,933			5,303

Gross loans		293,630			289,247


Deferred loan origination fees, net		255			202
Undisbursed portion of loans in process		(5,890	)		(4,306	)
Allowance for loan losses		(4,835	)		(4,736	)


Loans, net	$	283,160		$	280,407

Financing Receivable Recorded Investment Current Past Due

Loans

The following table presents the aging of the recorded investment loans at June 30, 2013:


	30-59 Days		60-89 Days		Over 90 Days		Total				Total
	Past Due		Past Due		Past Due		Past Due		Current		Loans
	(In thousands)

Residential	$	4,871	$	615	$	1,453	$	6,939	$	101,310	$	108,249
Land		277		51		123		451		9,759		10,210
Construction		0		0		109		109		11,974		12,083
Commercial real estate		94		71		122		287		70,182		70,469
Commercial business		0		0		237		237		21,203		21,440
Home Equity/2nd mortgage		728		14		340		1,082		33,095		34,177
Other consumer		341		205		9		555		31,826		32,381


Total	$	6,311	$	956	$	2,393	$	9,660	$	279,349	$	289,009

The following table presents the aging of the recorded investment in loans at December 31, 2012:


	30-59 Days		60-89 Days		Over 90 Days		Total				Total
	Past Due		Past Due		Past Due		Past Due		Current		Loans
	(In thousands)

Residential	$	4,085	$	871	$	1,644	$	6,600	$	102,003	$	108,603
Land		343		0		119		462		9,195		9,657
Construction		171		0		113		284		11,479		11,763
Commercial real estate		360		0		335		695		68,207		68,902
Commercial business		36		0		0		36		18,619		18,655
Home Equity/2nd mortgage		1,206		102		97		1,405		35,881		37,286
Other consumer		510		30		18		558		30,812		31,370


Total	$	6,711	$	1,003	$	2,326	$	10,040	$	276,196	$	286,236