LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2013

LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

Summary of loans outstanding, by classification

Loans outstanding, by classification, are summarized as follows (in thousands):

	March 31,		December 31,
	2013		2012
Commercial, financial, and agricultural	$	20,900	$	23,510
Commercial Real Estate	118,586		125,239
Single-Family Residential	35,619		34,523
Construction and Development	2,448		1,813
Consumer	5,963		5,913
	183,516		190,998
Allowance for loan losses	3,415		3,509
	$	180,101	$	187,489

Summary of activity in allowance for loan losses

Activity in the allowance for loan losses is summarized as follows (in thousands):

	March 31, 2013			December 31, 2012			March 31, 2012
Balance at beginning of period	$	3,509		$	3,956		$	3,956
Provision for loan losses	225			2,400			750
Loans charged-off	(388		)	(3,069		)	(823		)
Recoveries on loans previously charged-off	69			222			44
Balance at end of period	$	3,415		$	3,509		$	3,927

Summary of activity in the allowance for loan losses by portfolio segment

Activity in the allowance for loan losses by portfolio segment is summarized as follows (in thousands):

	For the Three Month Period Ended March 31, 2013
	Commercial			Commercial Real Estate			Single-family Residential			Construction & Development			Consumer			Total
Beginning balance	$	433		$	1,853		$	803		$	177		$	243		$	3,509
Provision for loan losses	(31		)	14			136			39			67			225
Loans charged-off	(5		)	(65		)	(216		)	(30		)	(72		)	(388		)
Recoveries on loans charged-off	11			26			11			—			21			69
Ending Balance	$	408		$	1,828		$	734		$	186		$	259		$	3,415

	For the Three Month Period Ended March 31, 2012
	Commercial			Commercial Real Estate			Single-family Residential			Construction & Development			Consumer			Total
Beginning balance	$	394		$	2,206		$	696		$	449		$	211		$	3,956
Provision for loan losses	(10		)	414			204			148			(6		)	750
Loans charged-off	(7		)	(631		)	(134		)	(29		)	(22		)	(823		)
Recoveries on loans charged-off	8			7			4			—			25			44
Ending Balance	$	385		$	1,996		$	770		$	568		$	208		$	3,927

	For the Year Ended December, 2012
	Commercial			Commercial Real Estate			Single-family Residential			Construction & Development			Consumer			Total
Beginning balance	$	394		$	2,206		$	696		$	449		$	211		$	3,956
Provision for loan losses	27			1,761			646			(140		)	106			2,400
Loans charged-off	(21		)	(2,138		)	(625		)	(136		)	(149		)	(3,069		)
Recoveries on loans charged-off	33			24			86			4			75			222
Ending Balance	$	433		$	1,853		$	803		$	177		$	243		$	3,509

Schedule of allocation of allowance for loan losses by portfolio segment

The allocation of the allowance for loan losses by portfolio segment was as follows (in thousands):

	At March 31, 2013
	Commercial		Commercial Real Estate		Single-family Residential		Construction & Development		Consumer		Total
Specific Reserves:
Impaired loans	$	—	$	354	$	—	$	—	$	—	$	354
Total specific reserves	—		354		—		—		—		354
General reserves	408		1,474		734		186		259		3,061
Total	$	408	$	1,828	$	734	$	186	$	259	$	3,415
Loans individually evaluated for impairment	$	—	$	13,298	$	434	$	120	$	—	$	13,852
Loans collectively evaluated for impairment	20,900		105,288		35,185		2,328		5,963		169,664
Total	$	20,900	$	118,586	$	35,619	$	2,448	$	5,963	$	183,516

	At December 31, 2012
	Commercial		Commercial Real Estate		Single- family Residential		Construction & Development		Consumer		Total
Specific Reserves:
Impaired loans	$	—	$	319	$	1	$	—	$	—	$	320
Total specific reserves	—		319		1		—		—		320
General reserves	433		1,534		802		177		243		3,189
Total	$	433	$	1,853	$	803	$	177	$	243	$	3,509
Loans individually evaluated for impairment	$	—	$	17,248	$	516	$	278	$	—	$	18,042
Loans collectively evaluated for impairment	23,510		107,991		34,007		1,535		5,913		172,956
Total	$	23,510	$	125,239	$	34,523	$	1,813	$	5,913	$	190,998

Schedule of impaired loans by class of loan

The following table presents impaired loans by class of loan (in thousands):

	At March 31, 2013
							Impaired Loans - With
	Impaired Loans - With Allowance						no Allowance
	Unpaid Principal		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal		Recorded Investment
Residential:
First mortgages	$	—	$	—	$	—	$	231	$	231
HELOC’s and equity	—		—		—		203		203
Commercial
Secured	—		—		—		—		—
Unsecured	—		—		—		—		—
Commercial Real Estate:
Owner occupied	1,039		1,039		281		6,932		6,845
Non-owner occupied	1,057		1,003		73		4,326		4,081
Multi-family	—		—		—		330		330
Construction and Development:
Construction	—		—		—		120		120
Improved Land	—		—		—		—		—
Unimproved Land	—		—		—		—		—
Consumer and Other	—		—		—		—		—
Total	$	2,096	$	2,042	$	354	$	12,142	$	11,810

	At December 31, 2012
	Impaired Loans - With Allowance						Impaired Loans - With no Allowance
	Unpaid Principal		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal		Recorded Investment		Average Recorded Investment		Interest Income Recognized
Residential:
First mortgages	$	—	$	—	$	—	$	234	$	230	$	231	$	—
HELOC’s and equity	77		77		1		261		209		210		44
Commercial
Secured	—		—		—		—		—		—		—
Unsecured	—		—		—		—		—		—		—
Commercial Real Estate:
Owner occupied	2,856		2,856		293		7,199		7,199		10,116		480
Non-owner occupied	492		319		24		7,056		5,770		6,420		673
Multi-family	388		388		2		716		716		1,053		103
Construction and Development													.
Construction	—		—		—		120		121		122		55
Improved Land	—		—		—		418		157		169		6
Unimproved Land	—		—		—		—		—		—		—
Consumer and Other	—		—				—		—		—		—
Total	$	3,813	$	3,640	$	320	$	16,004	$	14,402	$	18,321	$	1,361

Schedule of average recorded investment and interest income recognized on impaired loans by class of loan

The following table presents the average recorded investment and interest income recognized on impaired loans by class of loan (in thousands):

	March 31, 2013				March 31, 2012
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Residential:
First mortgages	$	231	$	—	$	—	$	—
HELOC’s and equity	204		9		711		5
Commercial
Secured	—		—		—		—
Unsecured	—		—		—		—
Commercial Real Estate:
Owner occupied	7,898		199		4,828		64
Non-owner occupied	5,404		47		7,696		262
Multi-family	367		29		406		8
Construction and Development:
Construction	122		8		343		18
Improved Land	—		—		620		3
Unimproved Land	—		—		—		—
Consumer and Other	—		—		—		—
Total	$	14,226	$	292	$	14,604	$	360

Schedule of aging analysis of loan portfolio

The following table is an aging analysis of our loan portfolio (in thousands):

	At March 31, 2013
	30- 59 Days Past Due		60- 89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total Loans Receivable		Recorded Investment > 90 Days and Accruing		Nonaccrual
Residential:
First mortgages	$	2,592	$	193	$	2,355	$	5,140	$	21,217	$	26,357	$	—	$	2,819
HELOC’s and equity	210		24		358		592		8,670		9,262		—		385
Commercial:
Secured	30		16		—		46		15,337		15,383		—		24
Unsecured	—		—		—		—		5,517		5,517		—		—
Commercial Real Estate:
Owner occupied	693		179		258		1,130		44,088		45,218		—		2,521
Non-owner occupied	897		46		5,385		6,328		54,980		61,308		—		5,956
Multi-family	—		—		—		—		12,060		12,060		—		—
Construction and Development:
Construction	—		—		—		—		1,792		1,792		—		—
Improved Land	48		—		120		168		117		285		—		120
Unimproved Land	28		—		—		28		343		371		—		—
Consumer and Other	69		9		68		146		5,817		5,963		—		68
Total	$	4,567	$	467	$	8,544	$	13,578	$	169,938	$	183,516	$	—	$	11,893

	At December 31, 2012
	30- 59 Days Past Due		60- 89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total Loans Receivable		Recorded Investment > 90 Days and Accruing		Nonaccrual
Residential:
First mortgages	$	1,550	$	957	$	3,116	$	5,623	$	20,106	$	25,729	$	—	$	3,721
HELOC’s and equity	218		32		291		541		8,253		8,794		—		321
Commercial:
Secured	24		—		5		29		16,827		16,856		—		5
Unsecured	5		—		—		5		6,649		6,654		—		—
Commercial Real Estate:
Owner occupied	1,463		188		394		2,045		55,603		57,648		—		2,029
Non-owner occupied	353		634		3,613		4,600		50,486		55,086		—		4,355
Multi-family	—		—		—		—		12,505		12,505		—		—
Construction and Development:
Construction	767		—		—		767		222		989		—		—
Improved Land	—		—		120		120		331		451		—		120
Unimproved Land	—		—		157		157		216		373		—		157
Consumer and Other	49		43		87		179		5,734		5,913		—		87
Total	$	4,429	$	1,854	$	7,783	$	14,066	$	176,932	$	190,998	$	—	$	10,795

Schedule of loan portfolio by risk rating

The following table presents our loan portfolio by risk rating (in thousands):

	At March 31, 2013
	Total		Pass Credits		Special Mention		Substandard		Doubtful
Residential:
First mortgages	$	26,357	$	23,009	$	800	$	2,548	$	—
HELOC’s and equity	9,262		8,754		24		484		—
Commercial:
Secured	15,383		15,334		32		16		1
Unsecured	5,517		5,517		—		—		—
Commercial Real Estate:
Owner occupied	45,218		36,378		3,093		5,715		32
Non-owner occupied	61,308		49,024		8,314		3,961		9
Multi-family	12,060		11,018		648		394		—
Construction and Development:
Construction	1,792		1,672		120		—		—
Improved Land	285		237		—		48		—
Unimproved Land	371		—		—		371		—
Consumer and Other	5,963		5,828		55		80		—
Total	$	183,516	$	156,771	$	13,086	$	13,617	$	42

	At December 31, 2012
	Total		Pass Credits		Special Mention		Substandard		Doubtful
Residential:
First mortgages	$	25,729	$	21,656	$	—	$	4,073	$	—
HELOC’s and equity	8,794		7,745		583		466		—
Commercial:
Secured	16,856		16,788		37		31		—
Unsecured	6,654		5,456		1,185		13		—
Commercial Real Estate:
Owner occupied	57,648		44,252		9,551		3,845		—
Non-owner occupied	55,086		45,127		3,248		6,711		—
Multi-family	12,505		10,636		1,413		456		—
Construction and Development:
Construction	989		869		120		—		—
Improved Land	451		245		—		206		—
Unimproved Land	373		—		—		373		—
Consumer and Other	5,913		5,801		—		87		25
Total	$	190,998	$	158,575	$	16,137	$	16,261	$	25

Schedule of troubled debt restructurings

During the three months ended March 31, 2013, the Bank modified 2 loans that were considered to be troubled debt restructurings. We extended the terms and decreased the interest rate on 2 loans (dollar in thousands).

	March 31, 2013
	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Troubled Debt Restructurings
Commercial Real Estate:
Owner occupied	1	$	198	$	198
Non-owner occupied	1	62		62
Total	2	$	260	$	260

During the three months ended March 31, 2012, the Bank modified 4 loans that were considered to be troubled debt restructurings. We extended the terms and decreased the interest rate on 4 loans (dollar in thousands).

	March 31, 2012
	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Troubled Debt Restructurings
Commercial Real Estate:
Owner occupied	2	1,633		1,716
Non-owner occupied	2	947		953
Total	4	$	2,580	$	2,669