LOANS (Tables)

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Summary of Loans

Loans consist of the following:

(Dollars in thousands)	September 30, 2013		December 31, 2012
Commercial	$	116,190	$	104,899
Commercial real estate		126,423		119,192
Residential real estate		112,819		110,412
Construction & land development		14,904		23,358
Consumer		6,838		6,480
Total loans before deferred costs		377,174		364,341
Deferred loan costs		260		239
Total Loans	$	377,434	$	364,580

Schedule of Allowances for Loan Losses by Portfolio Segment

The following table details activity in the allowance for loan losses by portfolio segment for the three and nine month periods ended September 30, 2013 and 2012. 

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development		Consumer			Unallocated		Total
Three months ended September 30, 2013
Beginning balance, June 30, 2013	$	1,316		$	1,815		$	1,174		$	162	$	144		$	334	$	4,945
Provision for possible loan losses		27			(5	)		95			18		(48	)		123		210
Charge-offs		(54	)		—			(28	)		—		(9	)				(91	)
Recoveries		5			—			3			—		5					13
Net charge-offs		(49	)		—			(25	)		—		(4	)				(78	)
Ending balance	$	1,294		$	1,810		$	1,244		$	180	$	92		$	457	$	5,077

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development			Consumer			Unallocated		Total
Nine months ended September 30, 2013
Beginning balance, December 31, 2012	$	933		$	1,902		$	1,096		$	253		$	76		$	320	$	4,580
Provision for possible loan losses		455			(41	)		162			(73	)		(10	)		137		630
Charge-offs		(112	)		(51	)		(28	)		—			(11	)				(202	)
Recoveries		18			—			14			—			37					69
Net charge-offs		(94	)		(51	)		(14	)		—			26					(133	)
Ending balance	$	1,294		$	1,810		$	1,244		$	180		$	92		$	457	$	5,077

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate			Construction & Land Development		Consumer			Unallocated			Total
Three months ended September 30, 2012
Beginning balance, June 30, 2012	$	896	$	1,927	$	1,051		$	217	$	64		$	316		$	4,471
Provision for possible loan losses		94		108		(45	)		85		46			(82	)		206
Charge-offs		—		—		—			—		(39	)					(39	)
Recoveries		2		—		10			—		11						23
Net charge-offs		2		—		10			—		(28	)					(16	)
Ending balance	$	992	$	2,035	$	1,016		$	302	$	82		$	234		$	4,661

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development		Consumer			Unallocated		Total
Nine months ended September 30, 2012
Beginning balance, December 31, 2011	$	1,024		$	1,673		$	894		$	180	$	78		$	233	$	4,082
Provision for possible loan losses		(33	)		376			127			122		24			1		617
Charge-offs		(15	)		(14	)		(104	)		—		(70	)		—		(203	)
Recoveries		16			—			99			—		50			—		165
Net charge-offs		1			(14	)		(5	)		—		(20	)		—		(38	)
Ending balance	$	992		$	2,035		$	1,016		$	302	$	82		$	234	$	4,661

Allowances for Loan Losses and Ending Balances by Portfolio Segment and Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio segment and based on the impairment method as of September 30, 2013 and December 31, 2012:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction & Land Development		Consumer		Unallocated		Total
September 30, 2013
Allowance for loan losses:
Ending allowance balances attributable to loans:
Individually evaluated for impairment	$	185	$	442	$	292	$	—	$	—	$	—	$	919
Collectively evaluated for impairment		1,109		1,368		952		180		92		457		4,158
Total ending allowance balance	$	1,294	$	1,810	$	1,244	$	180	$	92	$	457	$	5,077
Loans:
Loans individually evaluated for impairment	$	3,898	$	3,460	$	1,832	$	—	$	—			$	9,190
Loans collectively evaluated for impairment		112,292		122,963		110,987		14,904		6,838				367,984
Total ending loans balance	$	116,190	$	126,423	$	112,819	$	14,904	$	6,838			$	377,174
December 31, 2012
Allowance for loan losses:
Ending allowance balances attributable to loans:
Individually evaluated for impairment	$	85	$	522	$	172	$	—	$	—	$	—	$	779
Collectively evaluated for impairment		848		1,380		924		253		76		320		3,801
Total ending allowance balance	$	933	$	1,902	$	1,096	$	253	$	76	$	320	$	4,580
Loans:
Loans individually evaluated for impairment	$	4,315	$	4,573	$	1,137	$	166	$	—			$	10,191
Loans collectively evaluated for impairment		100,584		114,619		109,275		23,192		6,480				354,150
Total ending loans balance	$	104,899	$	119,192	$	110,412	$	23,358	$	6,480			$	364,341

Schedule of Impairment by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2013 and December 31, 2012:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
September 30, 2013
Commercial	$	3,913	$	7	$	3,902	$	3,909	$	185	$	3,917	$	126
Commercial real estate		3,767		306		3,155		3,461		442		3,730		125
Residential real estate		1,942		583		1,237		1,820		292		1,270		29
Construction & land development		—		—		—		—		—		28		2
Total impaired loans	$	9,622	$	896	$	8,294	$	9,190	$	919	$	8,945	$	282
December 31, 2012
Commercial	$	4,315	$	—	$	4,329	$	4,329	$	85	$	4,123	$	167
Commercial real estate		4,906		1,723		2,849		4,572		522		4,396		152
Residential real estate		1,223		86		1,057		1,143		172		770		18
Construction & land development		173		166		—		166		—		167		—
Total impaired loans	$	10,617	$	1,975	$	8,235	$	10,210	$	779	$	9,456	$	337

Schedule of Aging of Past Due and Nonaccrual Loans

The following table presents the aging of past due loans and nonaccrual loans as of September 30, 2013 and December 31, 2012 by class of loans:

(Dollars in thousands)	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days + Past Due		Non-Accrual		Total Past Due and Non- Accrual		Total Loans
September 30, 2013
Commercial	$	115,714	$	405	$	—	$	—	$	71	$	476	$	116,190
Commercial real estate		124,753		271		216		—		1,183		1,670		126,423
Residential real estate		110,681		767		257		36		1,078		2,138		112,819
Construction & land development		13,954		950		—		—		—		950		14,904
Consumer		6,616		137		85		—		—		222		6,838
Total Loans	$	371,718	$	2,530	$	558	$	36	$	2,332	$	5,456	$	377,174
December 31, 2012
Commercial	$	104,348	$	60	$	8	$	—	$	483	$	551	$	104,899
Commercial real estate		117,372		41		34		—		1,745		1,820		119,192
Residential real estate		108,574		472		430		131		805		1,838		110,412
Construction & land development		23,180		—		5		—		173		178		23,358
Consumer		6,325		132		23		—		—		155		6,480
Total Loans	$	359,799	$	705	$	500	$	131	$	3,206	$	4,542	$	364,341

Summary of Troubled Debt Restructurings

Loan modifications that are considered TDR’s completed during the three and nine month periods ended September 30, 2013 and 2012 were as follows:

	For the Three Months Ended September 30, 2013
(Dollars in thousands)	Number of loans     restructured		Pre- Modification Recorded     Investment		Post- Modification Recorded     Investment
Commercial		1	$	7	$	7
Residential Real Estate		2		188		188
Total Restructured Loans		3	$	195	$	195

	For the Nine Months Ended September 30, 2013
(Dollars in thousands)	Number of loans     restructured		Pre- Modification Recorded     Investment		Post- Modification Recorded     Investment
Commercial		3	$	83	$	83
Residential Real Estate		2		188		188
Total Restructured Loans		5	$	271	$	271

	For the Three Months Ended September 30, 2012
(Dollars in thousands)	Number of loans     restructured		Pre- Modification Recorded     Investment		Post- Modification Recorded     Investment
Commercial Real Estate		1	$	140	$	140
Residential Real Estate		5		333		333
Total Restructured Loans		6	$	473	$	473

	For the Nine Months Ended September 30, 2012
(Dollars in thousands)	Number of loans     restructured		Pre- Modification Recorded     Investment		Post- Modification Recorded     Investment
Commercial Real Estate		1	$	140	$	140
Residential Real Estate		7		488		488
Total Restructured Loans		8	$	628	$	628

Summary of Loans by Credit Quality Indicator

As of September 30, 2013 and December 31, 2012, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
September 30, 2013
Commercial	$	100,746	$	9,850	$	5,170	$	—	$	424	$	116,190
Commercial real estate		111,168		7,553		5,879		—		1,823		126,423
Residential real estate		243		—		48		—		112,528		112,819
Construction & land development		11,598		—		2,040		—		1,266		14,904
Consumer		—		—		—		—		6,838		6,838
Total	$	223,755	$	17,403	$	13,137	$	—	$	122,879	$	377,174
December 31, 2012
Commercial	$	92,123	$	5,854	$	6,637	$	—	$	285	$	104,899
Commercial real estate		102,602		5,671		8,459		—		2,460		119,192
Residential real estate		200		—		53		—		110,159		110,412
Construction & land development		18,063		2,750		1,244		—		1,301		23,358
Consumer		—		—		—		—		6,480		6,480
Total	$	212,988	$	14,275	$	16,393	$	—	$	120,685	$	364,341

Schedule of Loans Not Rated by Class of Loans

The following table presents loans that are not rated by class of loans as of September 30, 2013 and December 31, 2012. Non-performing loans include loans past due 90 days and greater and loans on nonaccrual of interest.

(Dollars in thousands)	Performing		Non-Performing		Total
September 30, 2013
Commercial	$	424	$	—	$	424
Commercial real estate		1,823		—		1,823
Residential real estate		111,462		1,066		112,528
Construction & land development		1,266		—		1,266
Consumer		6,838		—		6,838
Total	$	121,813	$	1,066	$	122,879
December 31, 2012
Commercial	$	285	$	—	$	285
Commercial real estate		2,460		—		2,460
Residential real estate		109,276		883		110,159
Construction & land development		1,294		7		1,301
Consumer		6,480		—		6,480
Total	$	119,795	$	890	$	120,685