LOANS (Tables)

6 Months Ended

Jun. 30, 2012

LOANS

Loans Receivable Composition by Segment

(In thousands)	June 30, 2012			December 31, 2011
Commercial real estate mortgage loans	$	303,345		$	283,917
Multi-family mortgage loans	50,508			21,402
Residential real estate mortgage loans	142,760			141,027
Commercial, financial, and agricultural loans	132,229			116,319
Real estate-construction and land loans	40,232			40,543
Installment/consumer loans	9,152			8,565
Total loans	678,226			611,773
Net deferred loan costs and fees	306			370
	678,532			612,143
Allowance for loan losses	(13,556		)	(10,837		)
Net loans	$	664,976		$	601,306

Loans Receivable by Class Categorized by internally assigned credit risk grades

	Grades:
June 30, 2012	Pass		Special Mention		Substandard		Doubtful		Total
(In thousands)
Originated loans
Commercial real estate:
Owner occupied	$	110,166	$	11,065	10,491		$	—	$	131,722
Non-owner occupied	143,793		9,243		2,943		—		155,979
Multi-Family	50,508		—		—		—		50,508
Residential real estate:
First lien	72,904		—		1,343		1,121		75,368
Home equity	56,402		578		1,689		—		58,669
Commercial:
Secured	56,855		2,210		5,562		—		64,627
Unsecured	63,030		1,252		1,165		16		65,463
Real estate construction and land loans	36,008		—		3,170		250		39,428
Installment/consumer loans	8,452		195		114		—		8,761
Total loans	$	598,118	$	24,543	$	26,477	$	1,387	$	650,525
Acquired loans
Commercial real estate:
Owner occupied	$	11,950	$	402	$	449	$	—	$	12,801
Non-owner occupied	2,354		489		—		—		2,843
Multi-Family	—		—		—		—		—
Residential real estate:
First lien	—		—		—		—		—
Home equity	8,723		—		—		—		8,723
Commercial:
Secured	732		—		117		—		849
Unsecured	1,096		163		31		—		1,290
Real estate construction and land loans	523		—		281		—		804
Installment/consumer loans	391		—		—		—		391
Total loans	$	25,769	$	1,054	$	878	$	—	$	27,701
Total loans
Commercial real estate:
Owner occupied	$	122,116	$	11,467	$	10,940	$	—	$	144,523
Non-owner occupied	146,147		9,732		2,943		—		158,822
Multi-Family	50,508		—		—		—		50,508
Residential real estate:
First lien	72,904		—		1,343		1,121		75,368
Home equity	65,125		578		1,689		—		67,392
Commercial:
Secured	57,587		2,210		5,679		—		65,476
Unsecured	64,126		1,415		1,196		16		66,753
Real estate construction and land loans	36,531		—		3,451		250		40,232
Installment/consumer loans	8,843		195		114		—		9,152
Total loans	$	623,887	$	25,597	$	27,355	$	1,387	$	678,226

	Grades:
December 31, 2011	Pass		Special Mention		Substandard		Doubtful		Total
(In thousands)
Originated loans
Commercial real estate:
Owner occupied	$	107,659	$	14,752	$	9,433	$	—	$	131,844
Non-owner occupied	123,602		8,950		2,982		—		135,534
Multi-Family	21,402		—		—		—		21,402
Residential real estate:
First lien	64,725		—		1,351		1,223		67,299
Home equity	61,075		584		1,972		225		63,856
Commercial:
Secured	50,671		4,135		3,090		—		57,896
Unsecured	51,253		1,435		1,080		9		53,777
Real estate construction and land loans	35,979		—		4,050		250		40,279
Installment/consumer loans	7,689		264		18		—		7,971
Total loans	$	524,055	$	30,120	$	23,976	$	1,707	$	579,858
Acquired loans
Commercial real estate:
Owner occupied	$	13,003	$	223	$	406	$	—	$	13,632
Non-owner occupied	2,414		493		—		—		2,907
Multi-Family	—		—		—		—		—
Residential real estate:
First lien	—		—		—		—		—
Home equity	9,872		—		—		—		9,872
Commercial:
Secured	2,015		123		118		—		2,256
Unsecured	2,168		178		44		—		2,390
Real estate construction and land loans	—		—		264		—		264
Installment/consumer loans	594		—		—		—		594
Total loans	$	30,066	$	1,017	$	832	$	—	$	31,915
Total loans
Commercial real estate:
Owner occupied	$	120,662	$	14,975	$	9,839	$	—	$	145,476
Non-owner occupied	126,016		9,443		2,982		—		138,441
Multi-Family	21,402		—		—		—		21,402
Residential real estate:
First lien	64,725		—		1,351		1,223		67,299
Home equity	70,947		584		1,972		225		73,728
Commercial:
Secured	52,686		4,258		3,208		—		60,152
Unsecured	53,421		1,613		1,124		9		56,167
Real estate construction and land loans	35,979		—		4,314		250		40,543
Installment/consumer loans	8,283		264		18		—		8,565
Total loans	$	554,121	$	31,137	$	24,808	$	1,707	$	611,773

Aging Analysis of Loans Receivable by Class

June 30, 2012	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due and Accruing		Nonaccrual Including 90 Days or More Past Due		Total Past Due and Nonaccrual		Current		Total Loans
(In thousands)
Originated loans
Commercial real estate:
Owner occupied	$	87	$	—	$	—	$	432	$	519	$	131,203	$	131,722
Non-owner occupied	—		—		—		—		—		155,979		155,979
Multi-Family	—		—		—		—		—		50,508		50,508
Residential real estate:
First lien	489		—		—		1,121		1,610		73,758		75,368
Home equity	877		—		—		1,061		1,938		56,731		58,669
Commercial:
Secured	—		123		—		246		369		64,258		64,627
Unsecured	226		17		—		229		472		64,991		65,463
Real estate construction and land loans	—		—		—		250		250		39,178		39,428
Installment/consumer loans	1		—		—		—		1		8,760		8,761
Total loans	$	1,680	$	140	$	—	$	3,339	$	5,159	$	645,366	$	650,525
Acquired loans
Commercial real estate:
Owner occupied	$	—	$	—	$	448	$	—	$	448	$	12,353	$	12,801
Non-owner occupied	—		—		—		—		—		2,843		2,843
Multi-Family	—		—		—		—		—		—		—
Residential real estate:
First lien	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		8,723		8,723
Commercial:
Secured	13		—		—		—		13		836		849
Unsecured	—		—		—		—		—		1,290		1,290
Real estate construction and land loans	—		—		—		—		—		804		804
Installment/consumer loans	4		—		—		—		4		387		391
Total loans	$	17	$	—	$	448	$	—	$	465	$	27,236	$	27,701
Total loans
Commercial real estate:
Owner occupied	$	87	$	—	$	448	$	432	$	967	$	143,556	$	144,523
Non-owner occupied	—		—		—		—		—		158,822		158,822
Multi-Family	—		—		—		—		—		50,508		50,508
Residential real estate:
First lien	489		—		—		1,121		1,610		73,758		75,368
Home equity	877		—		—		1,061		1,938		65,454		67,392
Commercial:
Secured	13		123		—		246		382		65,094		65,476
Unsecured	226		17		—		229		472		66,281		66,753
Real estate construction and land loans	—		—		—		250		250		39,982		40,232
Installment/consumer loans	5		—		—		—		5		9,147		9,152
Total loans	$	1,697	$	140	$	448	$	3,339	$	5,624	$	672,602	$	678,226

December 31, 2011	30-59 Days Past Due		60-89 Days Past Due		>90 Days Past Due and Accruing		Nonaccrual Including 90 Days or More Past Due		Total Past Due and Nonaccrual		Current		Total Loans
(In thousands)
Originated loans
Commercial real estate:
Owner occupied	$	485	$	1,281	$	—	$	449	$	2,215	$	129,629	$	131,844
Non-owner occupied	—		—		—		—		—		135,534		135,534
Multi-Family	—		—		—		—		—		21,402		21,402
Residential real estate:
First lien	—		—		—		1,561		1,561		65,738		67,299
Home equity	448		255		—		1,382		2,085		61,771		63,856
Commercial:
Secured	—		—		—		479		479		57,417		57,896
Unsecured	—		53		—		40		93		53,684		53,777
Real estate construction and land loans	—		—		—		250		250		40,029		40,279
Installment/consumer loans	1		—		—		—		1		7,970		7,971
Total loans	$	934	$	1,589	$	—	$	4,161	$	6,684	$	573,174	$	579,858
Acquired loans
Commercial real estate:
Owner occupied	$	—	$	—	$	406	$	—	$	406	$	13,226	$	13,632
Non-owner occupied	—		—		—		—		—		2,907		2,907
Multi-Family	—		—		—		—		—		—		—
Residential real estate:
First lien	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		9,872		9,872
Commercial:
Secured	—		—		—		—		—		2,256		2,256
Unsecured	—		—		—		—		—		2,390		2,390
Real estate construction and land loans	—		—		—		—		—		264		264
Installment/consumer loans	—		—		5		—		5		589		594
Total loans	$	—	$	—	$	411	$	—	$	411	$	31,504	$	31,915
Total loans
Commercial real estate:
Owner occupied	$	485	$	1,281	$	406	$	449	$	2,621	$	142,855	$	145,476
Non-owner occupied	—		—		—		—		—		138,441		138,441
Multi-Family	—		—		—		—		—		21,402		21,402
Residential real estate:
First lien	—		—		—		1,561		1,561		65,738		67,299
Home equity	448		255		—		1,382		2,085		71,643		73,728
Commercial:
Secured	—		—		—		479		479		59,673		60,152
Unsecured	—		53		—		40		93		56,074		56,167
Real estate construction and land loans	—		—		—		250		250		40,293		40,543
Installment/consumer loans	1		—		5		—		6		8,559		8,565
Total loans	$	934	$	1,589	$	411	$	4,161	$	7,095	$	604,678	$	611,773

Schedule of impaired loans by class

June 30, 2012	Recorded Investment		Unpaid Principal Balance		Related Allocated Allowance
(In thousands)
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	4,284	$	4,339	$	—
Non-owner occupied	916		916		—
Residential real estate:
First lien	1,461		1,594		—
Home equity	593		850		—
Commercial:
Secured	369		373		—
Unsecured	—		—		—
Real estate construction and land loans	250		371		—
Installment/consumer loans	—		—		—
Total with no related allowance recorded	$	7,873	$	8,443	$	—
With an allowance recorded:
Residential real estate - Home equity	$	468	$	473	$	236
Commercial - Secured	150		155		154
Commercial - Unsecured	196		215		162
Total with an allowance recorded:	$	814	$	843	$	552
Total:
Commercial real estate:
Owner occupied	$	4,284	$	4,339	$	—
Non-owner occupied	916		916		—
Residential real estate:
First lien	1,461		1,594		—
Home equity	1,061		1,323		236
Commercial:
Secured	519		528		154
Unsecured	196		215		162
Real estate construction and land loans	250		371		—
Installment/consumer loans	—		—		—
Total	$	8,687	$	9,286	$	552

December 31, 2011	Recorded Investment		Unpaid Principal Balance		Related Allocated Allowance
(In thousands)
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	4,163	$	4,206	$	—
Non-owner occupied	916		916		—
Residential real estate:
First lien	338		344		—
Home equity	688		860		—
Commercial:
Secured	533		533		—
Unsecured	—		—		—
Real estate construction and land loans	250		371		—
Installment/consumer loans	—		—		—
Total with no related allowance recorded	$	6,888	$	7,230	$	—
With an allowance recorded:
Residential real estate - First lien	$	1,223	$	1,329	$	76
Residential real estate - Home equity	693		700		29
Commercial - Secured	219		229		162
Total with an allowance recorded:	$	2,135	$	2,258	$	267
Total:
Commercial real estate:
Owner occupied	$	4,163	$	4,206	$	—
Non-owner occupied	916		916		—
Residential real estate:
First lien	1,561		1,673		76
Home equity	1,381		1,560		29
Commercial:
Secured	752		762		162
Unsecured	—		—		—
Real estate construction and land loans	250		371		—
Installment/consumer loans	—		—		—
Total	$	9,023	$	9,488	$	267

	Three months ended June 30,
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
(In thousands)	2012				2011
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	4,312	$	44	$	3,722	$	25
Non-owner occupied	916		15		228		—
Residential real estate:
First lien	1,470		9		1,247		—
Home equity	801		—		607		—
Commercial:
Secured	370		5		150		—
Unsecured	—		—		—		—
Real estate construction and land loans	250		—		3,339		—
Installment/consumer loans	—		—		—		—
Total with no related allowance recorded	$	8,119	$	73	$	9,293	$	25
With an allowance recorded:
Residential real estate - Home equity	$	471	$	—	$	942	$	—
Commercial - Secured	152				—
Commercial - Unsecured	202		—		239		—
Total with an allowance recorded:	$	825	$	—	$	1,181	$	—
Total:
Commercial real estate:
Owner occupied	$	4,312	$	44	$	3,722	$	25
Non-owner occupied	916		15		228		—
Residential real estate:
First lien	1,470		9		1,247		—
Home equity	1,272		—		1,549		—
Commercial:
Secured	522		5		150		—
Unsecured	202		—		239		—
Real estate construction and land loans	250		—		3,339		—
Installment/consumer loans	—		—		—		—
Total	$	8,944	$	73	$	10,474	$	25

	Six months ended June 30,
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
(In thousands)	2012				2011
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	4,310	$	86	$	3,727	$	52
Non-owner occupied	916		30		228		—
Residential real estate:
First lien	1,506		15		1,254		—
Home equity	822		—		625		—
Commercial:
Secured	371		10		150		—
Unsecured	—		—		—		—
Real estate construction and land loans	250		—		3,377		—
Installment/consumer loans	—		—		—		—
Total with no related allowance recorded	$	8,175	$	141	$	9,361	$	52
With an allowance recorded:
Residential real estate - Home equity	$	472	$	—	$	945	$	—
Commercial - Secured	155				—
Commercial - Unsecured	208		—		239		—
Total with an allowance recorded:	$	835	$	—	$	1,184	$	—
Total:
Commercial real estate:
Owner occupied	$	4,310	$	86	$	3,727	$	52
Non-owner occupied	916		30		228		—
Residential real estate:
First lien	1,506		15		1,254		—
Home equity	1,294		—		1,570		—
Commercial:
Secured	526		10		150		—
Unsecured	208		—		239		—
Real estate construction and land loans	250		—		3,377		—
Installment/consumer loans	—		—		—		—
Total	$	9,010	$	141	$	10,545	$	52

Loans Receivable by class modified as troubled debt restructurings

	For the Six Months Ended
	June 30, 2012
(In thousands)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Originated loans
Commercial real estate:
Owner occupied	1	$	163	$	162
Non-owner occupied	—	—		—
Multi-Family	—	—		—
Residential real estate:
First lien	—	—		—
Home equity	—	—		—
Commercial:
Secured	—	—		—
Unsecured	—	—		—
Real estate construction and land loans	—	—		—
Installment/consumer loans	—	—		—
Total loans	1	$	163	$	162