XML 72 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
Allowance for Loan Losses
 12 Months Ended
Dec. 31, 2012
Allowance for Loan Losses [Abstract]  
Allowance for Loan Losses

Note 4 – Allowance for Loan Losses

 

The changes in the allowance for loan losses for the years ended December 31, 2012 and 2011 are as follows: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

(In Thousands)

 

 

Balance, beginning

$
4,215 

 

$
3,709 

 

 

Provision for loan losses

 
1,183 

 

 
734 

 

 

Loans charged off

 
(270)

 

 
(250)

 

 

Recoveries

 
19 

 

 
22 

 

 

Balance at end of year

$
5,147 

 

$
4,215 

 

 

 

 

 

 

 

 

 

 

 

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention (potential weaknesses), substandard (well defined weaknesses) and doubtful (full collection unlikely) within the Company's internal risk rating system as of December 31, 2012 and December 31, 2011, respectively:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

Special Mention

 

Substandard

 

Doubtful

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

(In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

$
197,879 

 

$
748 

 

$
6,277 

 

$

 -

 

$
204,904 

Commercial construction

 
16,102 

 

 
341 

 

 
3,274 

 

 

 -

 

 
19,717 

Commercial

 
28,066 

 

 
530 

 

 
100 

 

 

 -

 

 
28,696 

Residential real estate

 
249,737 

 

 
156 

 

 
660 

 

 
301 

 

 
250,854 

Consumer

 
1,382 

 

 

 -

 

 

 -

 

 

 -

 

 
1,382 

            Total

$
493,166 

 

$
1,775 

 

$
10,311 

 

$
301 

 

$
505,553 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

$
163,828 

 

$
865 

 

$
7,099 

 

$

 -

 

$
171,792 

Commercial construction

 
9,090 

 

 

 -

 

 
4,324 

 

 

 -

 

 
13,414 

Commercial

 
26,612 

 

 
194 

 

 
73 

 

 

 -

 

 
26,879 

Residential real estate

 
209,810 

 

 
282 

 

 
269 

 

 

 -

 

 
210,361 

Consumer

 
1,140 

 

 

 -

 

 

 -

 

 

 -

 

 
1,140 

            Total

$
410,480 

 

$
1,341 

 

$
11,765 

 

$

 -

 

$
423,586 

 

 

 

Note 4 – Allowance for Loan Losses (Continued)

 

The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2012 and 2011, respectively:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

Recorded Investment

 

Unpaid Principal Balance

 

Related Allowance

 

Average Recorded Investment

 

Interest Income Recognized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In Thousands)

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commercial real estate

 

$
5,985 

 

$
5,985 

 

 

 

 

$
6,031 

 

$
301 

 

  Commercial construction

 

 
2,117 

 

 
2,117 

 

 

 

 

 
3,218 

 

 
77 

 

  Commercial

 

 
291 

 

 
291 

 

 

 

 

 
302 

 

 
7 

 

  Residential real estate

 

 
458 

 

 
458 

 

 

 

 

 
377 

 

 
23 

 

  Consumer

 

 

 -

 

 

 -

 

 

 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commercial real estate

 

$
1,635 

 

$
1,635 

 

$
411 

 

$
1,899 

 

$
161 

 

  Commercial construction

 

 
1,498 

 

 
1,498 

 

 
198 

 

 
749 

 

 
44 

 

  Commercial

 

 
11 

 

 
60 

 

 
11 

 

 
5 

 

 

 -

 

  Residential real estate

 

 
660 

 

 
660 

 

 
130 

 

 
689 

 

 
18 

 

  Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commercial real estate

 

$
7,620 

 

$
7,620 

 

$
411 

 

$
7,930 

 

$
462 

 

  Commercial construction

 

 
3,615 

 

 
3,615 

 

 
198 

 

 
3,967 

 

 
121 

 

  Commercial

 

 
302 

 

 
351 

 

 
11 

 

 
307 

 

 
7 

 

  Residential real estate

 

 
1,118 

 

 
1,118 

 

 
130 

 

 
1,066 

 

 
41 

 

  Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

$
12,655 

 

$
12,704 

 

$
750 

 

$
13,270 

 

$
631 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commercial real estate

 

$
7,814 

 

$
7,863 

 

 

 

 

$
5,787 

 

$
492 

 

  Commercial construction

 

 
3,974 

 

 
3,974 

 

 

 

 

 
3,360 

 

 
156 

 

  Commercial

 

 
362 

 

 
362 

 

 

 

 

 
363 

 

 
15 

 

  Residential real estate

 

 
552 

 

 
552 

 

 

 

 

 
498 

 

 
24 

 

  Consumer

 

 

 -

 

 

 -

 

 

 

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commercial real estate

 

$
670 

 

$
670 

 

$
107 

 

$
463 

 

$
42 

 

  Commercial construction

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

  Commercial

 

 
55 

 

 
55 

 

 
19 

 

 
61 

 

 
4 

 

  Residential real estate

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

  Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commercial real estate

 

$
8,484 

 

$
8,533 

 

$
107 

 

$
6,250 

 

$
534 

 

  Commercial construction

 

 
3,974 

 

 
3,974 

 

 

 -

 

 
3,360 

 

 
156 

 

  Commercial

 

 
417 

 

 
417 

 

 
19 

 

 
424 

 

 
19 

 

  Residential real estate

 

 
552 

 

 
552 

 

 

 -

 

 
498 

 

 
24 

 

  Consumer

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

$
13,427 

 

$
13,476 

 

$
126 

 

$
10,532 

 

$
733 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note 4 – Allowance for Loan Losses (Continued)

 

The following table presents nonaccrual loans by classes of the loan portfolio as of December 31, 2012 and 2011, respectively:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

December 31, 2011

 

 

 

 

 

 

 

 

 

(In Thousands)

 

 

 

 

 

 

 

 

  Commercial real estate

$
2,104 

 

$
1,869 

 

  Commercial construction

 

 -

 

 

 -

 

  Commercial

 
39 

 

 

 -

 

  Residential real estate

 
301 

 

 

 -

 

  Consumer

 

 -

 

 

 -

 

      Total

$
2,444 

 

$
1,869 

 

 

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due.  The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2012 and 2011, respectively:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

30-59 Days Past Due

 

60-89 Days Past Due

 

Greater than 90 Days

 

Total         Past Due

 

Current

 

Total Loan
Receivables

 

Loan Receivables > 90 Days and Accruing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In Thousands)

Commercial real estate

$
831 

 

$

 -

 

$
1,809 

 

$
2,640 

 

$
202,264 

 

$
204,904 

 

$
351 

Commercial construction

 
2,559 

 

 

 -

 

 

 -

 

 
2,559 

 

 
17,158 

 

 
19,717 

 

 

 -

Commercial

 

 -

 

 
39 

 

 
10 

 

 
49 

 

 
28,647 

 

 
28,696 

 

 
10 

Residential real estate

 
301 

 

 

 -

 

 
301 

 

 
602 

 

 
250,252 

 

 
250,854 

 

 

 -

Consumer

 
13 

 

 

 -

 

 

 -

 

 
13 

 

 
1,369 

 

 
1,382 

 

 

 -

            Total

$
3,704 

 

$
39 

 

$
2,120 

 

$
5,863 

 

$
499,690 

 

$
505,553 

 

$
361 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

$
300 

 

$
1,222 

 

$
2,074 

 

$
3,596 

 

$
168,196 

 

$
171,792 

 

$
205 

Commercial construction

 

 -

 

 
1,412 

 

 

 -

 

 
1,412 

 

 
12,002 

 

 
13,414 

 

 

 -

Commercial

 

 -

 

 

 -

 

 
61 

 

 
61 

 

 
26,818 

 

 
26,879 

 

 
61 

Residential real estate

 

 -

 

 
269 

 

 

 -

 

 
269 

 

 
210,092 

 

 
210,361 

 

 

 -

Consumer

 
22 

 

 

 -

 

 

 -

 

 
22 

 

 
1,118 

 

 
1,140 

 

 

 -

            Total

$
322 

 

$
2,903 

 

$
2,135 

 

$
5,360 

 

$
418,226 

 

$
423,586 

 

$
266 

 

 

Note 4 – Allowance for Loan Losses (Continued)

 

The following table summarizes information in regards to the allowance for loan losses and the recorded investment in loans receivable at December 31, 2012, and the activity in the allowance for loan losses for the year ended December 31, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

Commercial Construction

 

Commercial

 

Residential Real Estate

 

Consumer

 

Unallocated

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

(In Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ending December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Balance - December 31, 2011

 

$
1,264 

 

$
352 

 

$
423 

 

$
1,691 

 

$
40 

 

$
445 

 

$
4,215 

  Charge-offs

 

 
(231)

 

 

 -

 

 

 -

 

 
(39)

 

 

 -

 

 

 -

 

 
(270)

  Recoveries

 

 
1 

 

 

 -

 

 

 -

 

 
18 

 

 

 -

 

 

 -

 

 
19 

  Provisions

 

 
973 

 

 
308 

 

 
(29)

 

 
7 

 

 
(7)

 

 
(69)

 

 
1,183 

Ending Balance - December 31, 2012

 

$
2,007 

 

$
660 

 

$
394 

 

$
1,677 

 

$
33 

 

$
376 

 

$
5,147 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ending December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Balance - December 31, 2010

 

$
1,014 

 

$
443 

 

$
325 

 

$
1,309 

 

$
35 

 

$
583 

 

$
3,709 

  Charge-offs

 

 
(137)

 

 

 -

 

 
(50)

 

 
(63)

 

 

 -

 

 

 -

 

 
(250)

  Recoveries

 

 
2 

 

 

 -

 

 
4 

 

 
4 

 

 
12 

 

 

 -

 

 
22 

  Provisions

 

 
385 

 

 
(91)

 

 
144 

 

 
441 

 

 
(7)

 

 
(138)

 

 
734 

Ending Balance - December 31, 2011

 

$
1,264 

 

$
352 

 

$
423 

 

$
1,691 

 

$
40 

 

$
445 

 

$
4,215 

 

 

 

Note 4 – Allowance for Loan Losses (Continued)

 

The following tables represent the allocation of the allocation for loan losses and the related loan portfolio disaggregated based on impairment methodology at December 31, 2012 and December 31, 2011.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate

 

Commercial Construction

 

Commercial

 

Residential Real Estate

 

Consumer

 

Unallocated

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In Thousands)

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance

$
2,007 

 

$
660 

 

$
394 

 

$
1,677 

 

$
33 

 

$
376 

 

$
5,147 

Ending balance: individually evaluated for impairment

$
411 

 

$
198 

 

$
11 

 

$
130 

 

$

 -

 

$

 -

 

$
750 

Ending balance: collectively evaluated for impairment

$
1,596 

 

$
462 

 

$
383 

 

$
1,547 

 

$
33 

 

$
376 

 

$
4,397 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

$
204,904 

 

$
19,717 

 

$
28,696 

 

$
250,854 

 

$
1,382 

 

 

 

 

$
505,553 

Ending balance: individually evaluated  for impairment

$
7,620 

 

$
3,615 

 

$
302 

 

$
1,118 

 

$

 -

 

 

 

 

$
12,655 

Ending balance: collectively evaluated for impairment

$
197,284 

 

$
16,102 

 

$
28,394 

 

$
249,736 

 

$
1,382 

 

 

 

 

$
492,898 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance

$
1,264 

 

$
352 

 

$
423 

 

$
1,691 

 

$
40 

 

$
445 

 

$
4,215 

Ending balance: individually evaluated for impairment

$
107 

 

$

 -

 

$
19 

 

$

 -

 

$

 -

 

$

 -

 

$
126 

Ending balance: collectively evaluated for impairment

$
1,157 

 

$
352 

 

$
404 

 

$
1,691 

 

$
40 

 

$
445 

 

$
4,089 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

$
171,792 

 

$
13,414 

 

$
26,879 

 

$
210,361 

 

$
1,140 

 

 

 

 

$
423,586 

Ending balance: individually evaluated  for impairment

$
8,484 

 

$
3,974 

 

$
417 

 

$
552 

 

$

 -

 

 

 

 

$
13,427 

Ending balance: collectively evaluated for impairment

$
163,308 

 

$
9,440 

 

$
26,462 

 

$
209,809 

 

$
1,140 

 

 

 

 

$
410,159 

 

Troubled Debt Restructurings

 

The Company may grant a concession or modification for economic or legal reasons related to a borrower’s financial condition than it would not otherwise consider, resulting in a modified loan which is then identified as troubled debt restructuring (“TDR”).  The Company may modify loans through rate reductions, extensions to maturity, interest only payments, or payment modifications to better coincide the timing of payments due under the modified terms with the expected timing of cash flows from the borrowers’ operations.  Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral.  TDRs are considered impaired loans for purposes of calculating the Company’s allowance for loan losses.

 

The Company identifies loans for potential restructure primarily through direct communication with the borrower and the evaluation of the borrower’s financial statements, revenue projections, tax returns, and credit reports.  Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future.

 

 

 

 

Note 4 – Allowance for Loan Losses (Continued)

 

The following table presents newly restructured loans that occurred during the years ended December 31, 2012 and 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Loans

 

Pre-Modification Outstanding Balance

 

Post- Modification Outstanding Balance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars In Thousands)

 

Year Ending December 31, 2012

 

 

 

 

 

 

 

 

 

Commercial real estate

 

4 

 

$
1,247 

 

$
1,247 

 

Commercial construction

 

1 

 

 
341 

 

 
341 

 

Commercial

 

1 

 

 
3 

 

 
3 

 

Residential real estate

 

1 

 

 
660 

 

 
660 

 

 

 

 

 

 

 

 

 

 

 

 

 

7 

 

$
2,251 

 

$
2,251 

 

Year Ending December 31, 2011

 

 

 

 

 

 

 

 

 

Commercial real estate

 

2 

 

$
1,920 

 

$
1,920 

 

Commercial construction

 

4 

 

 
2,808 

 

 
2,808 

 

Commercial

 

 -

 

 

 -

 

 

 -

 

Residential real estate

 

2 

 

 
161 

 

 
161 

 

 

 

 

 

 

 

 

 

 

 

 

 

8 

 

$
4,889 

 

$
4,889 

 

 

 

Of the TDRs described above, two loans required an impairment reserve of $206 thousand recorded in the allowance for loan losses for the twelve months ended December 31, 2012 and two loans attributable to one customer relationship required an impairment reserve of $19 thousand recorded in the allowance for loan losses for the twelve months ended December 31, 2011.  As of the years ended December 31, 2012 and 2011,  no available commitments were outstanding on TDRs.    

 

There were no loans that were modified and classified as a TDR within the prior twelve months that experienced a payment default (loans ninety or more days past due) during the twelve months ended December 31, 2012.

 

The following table represents loans that were modified and classified as a TDR within the twelve months ended December 31, 2011 that experienced a payment default (loans ninety or more days past due):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Loans

 

 

Recorded Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars In Thousands)

 

 

Year ending December 31, 2011

 

 

 

 

 

 

 

 

Commercial real estate

 

 
4 

 

$
1,309 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
4 

 

$
1,309