Loans (Tables)

3 Months Ended

Mar. 31, 2013

Categories of Loans

Categories of loans at March 31, 2013 and December 31, 2012 include:

	March 31,			December 31,
	2013			2012
Commercial
Real estate	$	202,046		$	203,613
Construction and development		17,061			17,462
Other		68,276			67,773
		287,383			288,848
Residential Mortgage
One- to four- family		491,133			502,619
Consumer loans
Real estate		100,461			100,516
Auto		15,082			15,572
Boat/RVs		75,205			76,416
Other		6,293			6,598
		197,041			199,102
Total loans		975,557			990,569
Undisbursed loans in process		(6,015	)		(7,418	)
Unamortized deferred loan costs, net		2,325			2,432
Allowance for loan losses		(15,991	)		(16,038	)
Net loans	$	955,876		$	969,545

Non-Accrual Loans Segregated by Class of Loans

Non-accrual loans, segregated by class of loans, as of March 31, 2013 and December 31, 2012 are as follows:

	March 31,		December 31,
	2013		2012
Commercial
Real Estate	$	2,686	$	2,450
Construction and development		5,532		5,989
Other		1,712		1,315
Residential Mortgage		10,765		10,791
Consumer
Real estate		1,795		1,656
Auto		27		37
Boat/RV		1,249		1,076
Other		62		96
	$	23,828	$	23,410

Age Analysis of Past Due Loans Segregated by Class of Loans

An age analysis of Company’s past due loans, segregated by class of loans, as of March 31, 2013 and December 31, 2012 is as follows:

	March 31, 2013
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
Commercial
Real Estate	$	1,969	$	-	$	2,686	$	4,655	$	197,391	$	202,046	$	-
Construction and development		520		-		4,702		5,222		11,839		17,061		-
Other		1,191		-		729		1,920		66,356		68,276		-
Residential Mortgage		7,522		2,226		6,295		16,043		475,090		491,133		813
Consumer
Real estate		875		358		1,183		2,416		98,045		100,461		-
Auto		49		28		1		78		15,004		15,082		-
Boat/RV		1,291		751		352		2,394		72,811		75,205		-
Other		153		25		49		227		6,066		6,293		-
	$	13,570	$	3,388	$	15,997	$	32,955	$	942,602	$	975,557	$	813

	December 31, 2012
													Total Loans
					Greater						Total		> 90 Days
	30-59 Days		60-89 Days		Than 90		Total Past				Loans		and
	Past Due		Past Due		Days		Due		Current		Receivable		Accruing
Commercial
Real Estate	$	1,097	$	992	$	2,350	$	4,439	$	199,174	$	203,613	$	-
Construction  and development		192		-		4,912		5,104		12,358		17,462		-
Other		259		223		735		1,217		66,556		67,773		-
Residential Mortgage		12,487		2,732		8,356		23,575		479,044		502,619		177
Consumer
Real estate		1,302		358		1,119		2,779		97,737		100,516		-
Auto		47		18		15		80		15,492		15,572		-
Boat/RV		1,508		756		497		2,761		73,655		76,416		-
Other		234		21		95		350		6,248		6,598		96
	$	17,126	$	5,100	$	18,079	$	40,305	$	950,264	$	990,569	$	273

Impaired Loans

The following tables present impaired loans for the three month periods ended March 31, 2013 and 2012 and the year ended December 31, 2012.

	March 31, 2013
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
Commercial
Real estate	$	3,992	$	5,056	$	-	$	4,136	$	41
Construction and development		2,667		4,842		-		2,804		8
Other		936		936		-		954		3
Residential Mortgage		2,341		3,280		-		2,463		13
Loans with a specific valuation allowance
Commercial
Real estate		208		208		100		208		3
Construction and development		5,265		7,879		1,159		5,297		6
Other		634		634		380		773		6
Residential Mortgage		833		833		57		833		9
Total
Commercial
Real estate	$	4,200	$	5,264	$	100	$	4,344	$	44
Construction and development	$	7,932	$	12,721	$	1,159	$	8,101	$	14
Other	$	1,570	$	1,570	$	380	$	1,727	$	9
Residential Mortgage	$	3,174	$	4,113	$	57	$	3,296	$	22

	December 31, 2012
							Average
			Unpaid				Investment in		Interest
	Recorded		Principal		Specific		Impaired		Income
	Balance		Balance		Allowance		Loans		Recognized
Loans without a specific valuation allowance
Commercial
Real estate	$	5,341	$	6,354	$	-	$	5,384	$	248
Construction and development		3,632		7,078		-		4,884		30
Other		972		972		-		2,828		117
Residential Mortgage		2,583		3,522		-		3,755		58
Loans with a specific valuation allowance
Commercial
Real estate		208		947		100		211		12
Construction and development		4,639		5,157		959		5,230		78
Other		912		912		257		921		30
Residential Mortgage		834		834		57		654		-
Total
Commercial
Real estate	$	5,549	$	7,301	$	100	$	5,595	$	260
Construction and development	$	8,271	$	12,235	$	959	$	10,114	$	108
Other	$	1,884	$	1,884	$	257	$	3,749	$	147
Residential Mortgage	$	3,417	$	4,356	$	57	$	4,409	$	58

	March 31, 2012
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
Commercial
Real estate	$	4,840	$	5,690	$	-	$	5,158	$	13
Construction and development		4,216		9,152		-		5,044		10
Other		3,292		3,292		-		3,609		2
Residential Mortgage		3,892		5,383		-		4,635		22
Loans with a specific valuation allowance
Commercial
Real estate		1,092		1,592		144		1,342		-
Construction and development		7,071		7,281		1,437		7,071		-
Other		1,470		1,470		543		1,470		-
Residential Mortgage		533		533		37		535		-
Total
Commercial
Real estate	$	5,932	$	7,282	$	144	$	6,500	$	13
Construction and development	$	11,287	$	16,433	$	1,437	$	12,115	$	10
Other	$	4,762	$	4,762	$	543	$	5,079	$	2
Residential Mortgage	$	4,425	$	5,916	$	37	$	5,170	$	22

Commercial and Retail Credit Exposure Credit Risk Profile by Internal Rating

The following information presents the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of March 31, 2013 and December 31, 2012.

March 31, 2013
Commercial Credit Exposure Credit Risk Profile
Internal Rating	Real estate		Construction and Development		Other
Pass	$	185,917	$	9,320	$	65,626
Special Mention		6,383		150		202
Substandard		9,746		7,591		1,838
Doubtful		-		-		610
Total	$	202,046	$	17,061	$	68,276

Retail Credit Exposure Credit Risk Profile
	Mortgage		Consumer
	Residential		Real Estate		Auto		Boat/RV		Other
Pass	$	474,762	$	98,107	$	15,050	$	73,723	$	6,152
Special Mention		1,991		-		-		-		-
Substandard		14,380		2,354		32		1,482		141
Total	$	491,133	$	100,461	$	15,082	$	75,205	$	6,293

December 31, 2012
Commercial Credit Exposure Credit Risk Profile
			Construction
			and
Internal Rating	Real estate		Development		Other
Pass	$	185,794	$	9,314	$	63,413
Special Mention		6,692		172		255
Substandard		11,127		7,976		3,281
Doubtful		-		-		824
Total	$	203,613	$	17,462	$	67,773

Retail Credit Exposure Credit Risk Profile
	Mortgage		Consumer
	Residential		Real Estate		Auto		Boat/RV		Other
Pass	$	486,027	$	97,972	$	15,533	$	75,026	$	6,434
Special Mention		2,012		-		-		-		-
Substandard		14,580		2,544		39		1,390		164
Total	$	502,619	$	100,516	$	15,572	$	76,416	$	6,598

Activity in Allowance for Loan Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2013 and 2012 and year ended December 31, 2012.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other segments.

	Three Months Ended March 31, 2013
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	9,908		$	3,394		$	2,736		$	16,038
Provision charged to expense		200			500			250			950
Losses charged off		(237	)		(383	)		(480	)		(1,100	)
Recoveries		2			23			78			103
Balance, end of period	$	9,873		$	3,534		$	2,584		$	15,991
Ending balance:
Individually evaluated for impairment	$	1,639		$	57		$	-		$	1,696
Collectively evaluated for impairment		8,234			3,477			2,584			14,295
Total allowance for loan losses	$	9,873		$	3,534		$	2,584		$	15,991
Loans:
Ending balance
Individually evaluated for impairment	$	13,702		$	3,174		$	-		$	16,876
Collectively evaluated for impairment		273,681			487,959			197,041			958,681
Total loans	$	287,383		$	491,133		$	197,041		$	975,557

	Year Ended December 31, 2012
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	10,602			3,444			2,769			16,815
Provision charged to expense		3,213			1,612			1,200			6,025
Losses charged off		(4,493	)		(1,901	)		(1,608	)		(8,002	)
Recoveries		586			239			375			1,200
Balance, end of period	$	9,908			3,394			2,736			16,038
Ending balance:
Individually evaluated for impairment	$	1,316			57			-			1,373
Collectively evaluated for impairment		8,592			3,337			2,736			14,665
Total allowance for loan losses	$	9,908		$	3,394		$	2,736		$	16,038
Loans:
Ending balance
Individually evaluated for impairment	$	15,704			3,417			-			19,121
Collectively evaluated for impairment		273,144			499,202			199,102			971,448
Total loans	$	288,848		$	502,619		$	199,102		$	990,569

	Three Months Ended March 31, 2012
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	10,602		$	3,444		$	2,769		$	16,815
Provision charged to expense		390			465			495			1,350
Losses charged off		(901	)		(441	)		(525	)		(1,867	)
Recoveries		153			3			180			336
Balance, end of period	$	10,244		$	3,471		$	2,919		$	16,634

Troubled Debts Restructured

The following tables provide detail regarding troubled debts restructured in the three month period ended March 31, 2013 and 2012.

Three Months Ended March 31, 2013
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	No. of Loans		Recorded Balance		Recorded Balance
Commercial
Real Estate		1	$	50	$	50
Other		2		1,009		723
Residential Mortgage		11		750		1,056
Consumer
Real estate		4		220		229
Auto		2		22		22
Boat/RV		1		30		30
Other		1		11		11

Three Months Ended March 31, 2012
			Pre- Modification		Post- Modification
			Outstanding		Outstanding
	No. of Loans		Recorded Balance		Recorded Balance
Commercial
Real Estate		1	$	403	$	403
Other		1		97		97
Residential Mortgage		9		839		863
Consumer
Real estate		7		325		326
Auto
Boat/RV		1		10		10

Newly Restructured Loans by Types

Newly restructured loans by types are as follows:

	Three Months Ended March 31, 2013
	Interest Only		Term		Combination		Total Modification
Commercial
Real Estate	$	-	$	-	$	50	$	50
Other		-		88		635		723
Residential Mortgage		-		-		1,057		1,057
Consumer
Real estate		-		213		16		229
Auto		-		4		18		22
Boat/RV		-		30		-		30
Other		-		-		11		11

	Three Months Ended March 31, 2012
	Interest Only		Term		Combination		Total Modification
Commercial
Real Estate	$	-	$	403	$	1,117	$	1,520
Construction and development		-		-		172		172
Other		-		143		181		324
Residential Mortgage		320		169		2,107		2,596
Consumer
Real estate		-		55		775		830
Auto		-		11		4		15
Boat/RV		-		153		-		153
Other		-		8		44		52

Troubled Debts Restructured Defaulted

The following tables provide detail regarding troubled debts restructured in the last twelve months that have defaulted in the quarter ended March 31, 2013.

Three Months Ended March 31, 2013
			Post-Modification
			Outstanding
	No. of Loans		Recorded Balance
Commercial
Real Estate		1	$	518
Other		1		109