LOANS (Tables)

9 Months Ended

Sep. 30, 2012

Recorded investment in loans by portfolio segment

The following table presents the recorded investment in loans by portfolio segment. The recorded investment in loans includes the principal balance outstanding adjusted for purchase premiums and discounts, deferred loan fees and costs and includes accrued interest.

	September 30, 2012			December 31, 2011
Commercial	$	18,187		$	25,994
Real estate:
Single-family residential		15,425			18,214
Multi-family residential		22,900			27,163
Commercial		57,687			69,757
Consumer:
Home equity lines of credit		13,145			14,921
Other		1,038			1,221
Subtotal		128,382			157,270
Less: ALLL		(5,442	)		(6,110	)
Loans, net	$	122,940		$	151,160

Activity in ALLL by portfolio segment

The following tables present the activity in the ALLL by portfolio segment for the three and nine months ended September 30, 2012:

	Three months ended September 30, 2012
				Real Estate								Consumer
	Commercial			Single-family			Multi-family		Commercial			Home equity lines of  credit			Other			Total
Beginning balance	$	1,386		$	245		$	1,370	$	2,130		$	286		$	17		$	5,434
Addition to (reduction in) provision for loan losses		(370	)		(15	)		544		510			(115	)		(11	)		543
Charge-offs		—			—			—		(536	)		—			—			(536	)
Recoveries		—			1			—		—			3			6			10
Reclass of ALLL on loan-related commitments (1)		(9	)		—			—		—			—			—			(9	)
Ending balance	$	1,007		$	231		$	1,914	$	2,104		$	174		$	12		$	5,442

⁽¹⁾  Reclassified from (to) accrued interest payable and other liabilities in the consolidated balance sheet

	Nine months ended September 30, 2012
				Real Estate									Consumer
	Commercial			Single-family			Multi-family			Commercial			Home equity lines of  credit			Other			Total
Beginning balance	$	2,281		$	207		$	1,470		$	1,863		$	272		$	17		$	6,110
Addition to (reduction in) provision for loan losses		(1,467	)		23			856			1,570			(51	)		12			943
Charge-offs		(99	)		(7	)		(434	)		(1,467	)		(60	)		(34	)		(2,101	)
Recoveries		292			8			22			138			13			17			490
Ending balance	$	1,007		$	231		$	1,914		$	2,104		$	174		$	12		$	5,442

The following tables present the activity in the ALLL by portfolio segment for the three and nine months ended September 30, 2011:

	Three months ended September 30, 2011
				Real Estate									Consumer
	Commercial			Single-family			Multi-family			Commercial			Home equity lines of  credit			Other			Total
Beginning balance	$	2,754		$	242		$	2,183		$	2,632		$	220		$	19		$	8,050
Addition to (reduction in) provision for loan losses		(266	)		(54	)		1,015			(387	)		100			(3	)		405
Charge-offs		—			—			(867	)		(580	)		(149	)		—			(1,596	)
Recoveries		29			2			—			47			15			1			94
Reclass of ALLL on loan-related commitments (1)		2			—			—			—			—			—			2
Ending balance	$	2,519		$	190		$	2,331		$	1,712		$	186		$	17		$	6,955

⁽¹⁾  Reclassified from (to) accrued interest payable and other liabilities in the consolidated balance sheet

	Nine months ended September 30, 2011
				Real Estate												Consumer
	Commercial			Single-family			Multi-family			Commercial			Construction			Home equity lines of  credit			Other			Total
Beginning balance	$	1,879		$	241		$	2,520		$	4,719		$	74		$	303		$	22		$	9,758
Addition to (reduction in) provision for loan losses		1,679			(43	)		1,926			(1,247	)		(74	)		12			3			2,256
Charge-offs		(1,140	)		(14	)		(2,117	)		(1,930	)		—			(149	)		(18	)		(5,368	)
Recoveries		100			6			2			170			—			20			10			308
Reclass of ALLL on loan-related commitments (1)		1			—			—			—			—			—			—			1
Ending balance	$	2,519		$	190		$	2,331		$	1,712		$	—		$	186		$	17		$	6,955

⁽¹⁾  Reclassified from (to) accrued interest payable and other liabilities in the consolidated balance sheet

Balance in ALLL and recorded investment in loans by portfolio segment and based on impairment method

The following table presents the balance in the ALLL and the recorded investment in loans by portfolio segment and based on the impairment method as of September 30, 2012:

			Real Estate						Consumer
	Commercial		Single-family		Multi-family		Commercial		Home equity lines of  credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	564	$	47	$	585	$	297	$	—	$	—	$	1,493
Collectively evaluated for impairment		443		184		1,329		1,807		174		12		3,949
Total ending allowance balance	$	1,007	$	231	$	1,914	$	2,104	$	174	$	12	$	5,442
Loans:
Individually evaluated for impairment	$	797	$	129	$	4,024	$	6,610	$	—	$	—	$	11,560
Collectively evaluated for impairment		17,390		15,296		18,876		51,077		13,145		1,038		116,822
Total ending loan balance	$	18,187	$	15,425	$	22,900	$	57,687	$	13,145	$	1,038	$	128,382

The following table presents the balance in the ALLL and the recorded investment in loans by portfolio segment and based on the impairment method as of December 31, 2011:

			Real Estate						Consumer
	Commercial		Single-family		Multi-family		Commercial		Home equity lines of credit		Other		Total
ALLL:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	624	$	—	$	11	$	262	$	—	$	—	$	897
Collectively evaluated for impairment		1,657		207		1,459		1,601		272		17		5,213
Total ending allowance balance	$	2,281	$	207	$	1,470	$	1,863	$	272	$	17	$	6,110
Loans:
Individually evaluated for impairment	$	821	$	—	$	5,090	$	6,085	$	135	$	—	$	12,131
Collectively evaluated for impairment		25,173		18,214		22,073		63,672		14,786		1,221		145,139
Total ending loan balance	$	25,994	$	18,214	$	27,163	$	69,757	$	14,921	$	1,221	$	157,270

Individually evaluated for impairment by class of loans

The following table presents loans individually evaluated for impairment by class of loans at September 30, 2012. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, deferred loan fees and costs and includes accrued interest. The table presents accrual basis interest income recognized during the three and nine months ended September 30, 2012. Cash payments of interest during the three and nine months ended September 30, 2012 totaled $120 and $289, respectively.

	As of September 30, 2012						Three months ended September 30, 2012				Nine months ended September 30, 2012
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial	$	143	$	128	$	—	$	130	$	—	$	137	$	—
Real estate:
Multi-family residential		2,934		2,029		—		2,032		—		2,170		—
Commercial:
Non-owner occupied		2,645		1,839		—		1,869		—		2,357		—
Owner occupied		2,244		1,293		—		1,360		—		1,400		—
Total with no allowance recorded		7,966		5,289		—		5,391		—		6,064		—
With an allowance recorded:
Commercial		669		669		564		672		8		686		30
Real estate:
Single-family residential		129		129		47		129		1		131		1
Multi-family residential		2,117		1,995		585		1,996		61		2,002		103
Commercial:
Non-owner occupied		2,662		2,662		274		2,670		40		2,684		127
Owner occupied		401		401		7		402		6		406		19
Land		460		415		16		416		6		452		19
Total with an allowance recorded		6,438		6,271		1,493		6,285		122		6,361		299
Total	$	14,404	$	11,560	$	1,493	$	11,676	$	122	$	12,425	$	299

The following table presents loans individually evaluated for impairment by class of loans at December 31, 2011. The unpaid principal balance is the contractual principal balance outstanding. The recorded investment is the unpaid principal balance adjusted for partial charge-offs, purchase premiums and discounts, deferred loan fees and costs and includes accrued interest. The table presents accrual basis interest income recognized during the three and nine months ended September 30, 2011. Cash payments of interest during the three and nine months ended September 30, 2011 totaled $96 and $118, respectively.

	As of December 31, 2011						Three months ended September 30, 2011				Nine months ended September 30, 2011
	Unpaid Principal Balance		Recorded Investment		ALLL Allocated		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial	$	573	$	47	$	—	$	1,248	$	7	$	515	$	7
Real estate:
Single-family residential		—		—		—		—		—		32		—
Multi-family residential		6,742		4,996		—		787		1		262		1
Commercial:
Non-owner occupied		2,177		1,755		—		2,236		9		796		9
Owner occupied		876		446		—		1,314		21		438		21
Land		—		—		—		684		11		688		32
Consumer:
Home equity lines of credit:
Originated for portfolio		135		135		—		135		—		136		—
Total with no allowance recorded		10,503		7,379		—		6,404		49		2,867		70
With an allowance recorded:
Commercial		796		774		624		515		8		1,163		8
Real estate:
Multi-family residential		94		94		11		2,278		—		3,048		—
Commercial:
Non-owner occupied		2,823		2,823		210		1,379		31		1,752		31
Owner occupied		411		411		20		350		—		817		—
Land		766		650		32		—		—		—		—
Total with an allowance recorded		4,890		4,752		897		4,522		39		6,780		39
Total	$	15,393	$	12,131	$	897	$	10,926	$	88	$	9,647	$	109

Recorded investment in nonaccrual loans by class of loans

The following table presents the recorded investment in nonaccrual loans by class of loans:

	September 30, 2012		December 31, 2011
Commercial	$	667	$	47
Real estate:
Single-family residential		44		736
Multi-family residential		3,937		4,996
Commercial:
Non-owner occupied		1,839		1,910
Owner occupied		1,293		446
Consumer:
Home equity lines of credit:
Originated for portfolio		66		157
Purchased for portfolio		81		9
Total nonaccrual and nonperforming loans	$	7,927	$	8,301

Aging of recorded investment in past due loans by class of loans

The following table presents the aging of the recorded investment in past due loans by class of loans as of September 30, 2012:

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 days Past Due
Commercial	$	21	$	112	$	120	$	253	$	17,934	$	547
Real estate:
Single-family residential		302		706		—		1,008		14,417		44
Multi-family residential		—		—		2,029		2,029		20,871		1,908
Commercial:
Non-owner occupied		42		—		1,243		1,285		29,507		596
Owner occupied		—		—		300		300		22,386		993
Land		—		—		—		—		4,639		—
Consumer:
Home equity lines of credit:
Originated for portfolio		—		—		66		66		10,734		—
Purchased for portfolio		130		—		81		211		2,134		—
Other		61		—		—		61		977		—
Total	$	556	$	818	$	3,839	$	5,213	$	123,599	$	4,088

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

	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Loans Not Past Due		Nonaccrual Loans Not > 90 Days Past Due
Commercial	$	103	$	—	$	—	$	103	$	25,891	$	47
Real estate:
Single-family residential		714		474		491		1,679		16,535		245
Multi-family residential		—		—		3,065		3,065		24,098		1,931
Commercial:
Non-owner occupied		173		275		68		516		35,899		1,842
Owner occupied		—		—		—		—		27,900		446
Land		—		—		—		—		5,442		—
Consumer:
Home equity lines of credit:
Originated for portfolio		22		—		135		157		12,126		22
Purchased for portfolio		—		—		9		9		2,629		—
Other		—		30		—		30		1,191		—
Total	$	1,012	$	779	$	3,768	$	5,559	$	151,711	$	4,533

Loans modified as TDRs by class of loans

The following table presents loans modified as TDRs by class of loans during the nine months ended September 30, 2012:

	Nine months ended September 30, 2012
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Real estate:
Single-family residential		1		132		138
Commercial:
Non-owner occupied		1		478		428
Total		2	$	610	$	566

Schedule of Debtor Troubled Debt Restructuring, Subsequent Periods

Nonaccrual loans include loans that were modified and identified as TDRs and the loans are not performing. At September 30, 2012 and December 31, 2011, nonaccrual TDRs were as follows:

	September 30, 2012		December 31, 2011
Commercial	$	539	$	47
Real estate:
Multi-family residential		1,908		2,527
Commercial:
Owner occupied		300		446
Total	$	2,747		3,020

Financing Receivable Credit Quality Indicators

The recorded investment in loans by risk category and by class of loans as of September 30, 2012 and based on the most recent analysis performed follows. There were no loans rated doubtful at September 30, 2012.

	Not Rated		Pass		Special Mention		Substandard		Total
Commercial	$	389	$	13,568	$	2,960	$	1,270	$	18,187
Real estate:
Single-family residential		15,381		—		—		44		15,425
Multi-family residential		—		12,285		5,815		4,800		22,900
Commercial:
Non-owner occupied		331		21,865		3,018		5,578		30,792
Owner occupied		—		18,555		1,629		2,072		22,256
Land		121		1,013		434		3,071		4,639
Consumer:
Home equity lines of credit:
Originated for portfolio		10,734		—		—		66		10,800
Purchased for portfolio		1,825		—		439		81		2,345
Other		1,038		—		—		—		1,038
	$	29,819	$	67,286	$	14,295	$	16,982	$	128,382

The recorded investment in loans by risk category and by class of loans as of December 31, 2011 follows.

	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	432	$	19,591	$	2,062	$	3,909	$	—	$	25,994
Real estate:
Single-family residential		17,478		—		—		736		—		18,214
Multi-family residential		—		15,395		4,539		6,822		407		27,163
Commercial:
Non-owner occupied		365		22,159		5,717		8,176		—		36,417
Owner occupied		—		22,526		3,474		1,898		—		27,898
Land		954		1,123		—		3,365		—		5,442
Consumer:
Home equity lines of credit:
Originated for portfolio		12,126		—		—		157		—		12,283
Purchased for portfolio		2,182		—		447		9		—		2,638
Other		1,221		—		—		—		—		1,221
	$	34,758	$	80,794	$	16,239	$	25,072	$	407	$	157,270