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LOANS (Tables)
 9 Months Ended
Sep. 30, 2013
LOANS [Abstract]  
Major Classifications of Loans
Major classifications of loans at September 30, 2013 and December 31, 2012 are summarized as follows:

   
2013
  
2012
 
Residential real estate
 $214,151  $214,743 
Multifamily real estate
  37,484   28,673 
Commercial real estate:
        
Owner occupied
  91,094   91,902 
Non owner occupied
  201,723   178,849 
Commercial and industrial
  89,843   84,430 
Consumer
  25,987   28,128 
All other
  71,759   77,900 
   $732,041  $704,625 
 
Activity in the Allowance for Loan Losses by Portfolio Segment
Activity in the allowance for loan losses by portfolio segment for the nine months ending September 30, 2013 was as follows:

Loan Class
 
Balance
Dec 31, 2012
  
Provision for
loan losses
  
Loans
charged-off
  
Recoveries
  
Balance
Sept 30, 2013
 
                 
Residential real estate
 $2,163  $571  $191  $10  $2,553 
Multifamily real estate
  331   43   -   -   374 
Commercial real estate:
                    
Owner occupied
  1,117   96   67   299   1,445 
Non owner occupied
  1,888   209   -   -   2,097 
Commercial and industrial
  3,046   215   12   87   3,336 
Consumer
  244   87   123   47   255 
All other
  2,699   (671)  202   286   2,112 
Total
 $11,488  $550  $595  $729  $12,172 

Activity in the allowance for loan losses by portfolio segment for the nine months ending September 30, 2012 was as follows:

Loan Class
 
Balance
Dec 31, 2011
  
Provision for
loan losses
  
Loans
charged-off
  
Recoveries
  
Balance
Sept 30, 2012
 
                 
Residential real estate
 $2,134  $422  $223  $44  $2,377 
Multifamily real estate
  284   92   -   -   376 
Commercial real estate:
                    
Owner occupied
  918   (172)  15   272   1,003 
Non owner occupied
  2,381   (236)  318   3   1,830 
Commercial and industrial
  1,880   1,585   1,216   2   2,251 
Consumer
  298   87   186   77   276 
All other
  1,900   1,182   527   87   2,642 
Total
 $9,795  $2,960  $2,485  $485  $10,755 

Activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2013 was as follows:

Loan Class
 
Balance
June 30, 2013
  
Provision for
loan losses
  
Loans
charged-off
  
Recoveries
  
Balance
Sept 30, 2013
 
                 
Residential real estate
 $2,371  $213  $35  $4  $2,553 
Multifamily real estate
  429   (55)  -   -   374 
Commercial real estate:
                    
Owner occupied
  1,094   351   -   -   1,445 
Non owner occupied
  1,968   129   -   -   2,097 
Commercial and industrial
  4,073   (772)  -   35   3,336 
Consumer
  233   60   60   22   255 
All other
  2,030   124   108   66   2,112 
Total
 $12,198  $50  $203  $127  $12,172 

Activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2012 was as follows:

Loan Class
 
Balance
June 30, 2012
  
Provision for
loan losses
  
Loans
charged-off
  
Recoveries
  
Balance
Sept 30, 2012
 
                 
Residential real estate
 $2,268  $201  $104  $12  $2,377 
Multifamily real estate
  427   (51)  -   -   376 
Commercial real estate:
                    
Owner occupied
  979   (248)  -   272   1,003 
Non owner occupied
  2,306   (199)  277   -   1,830 
Commercial and industrial
  1,984   490   224   1   2,251 
Consumer
  310   (11)  47   24   276 
All other
  1,588   1,078   53   29   2,642 
Total
 $9,862  $1,260  $705  $338  $10,755 
 
Purchased Loans
The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected.  The carrying amount of those loans is as follows at September 30, 2013 and December 31, 2012.

   
2013
  
2012
 
Residential real estate
 $188  $202 
Multifamily real estate
  1,290   3,173 
Commercial real estate
        
Owner occupied
  252   271 
Non owner occupied
  3,787   5,896 
Commercial and industrial
  501   511 
All other
  4,502   4,496 
Total carrying amount
 $10,520  $14,549 
          
Carrying amount, net of allowance
 $10,020  $14,049 
Purchase Loans Accretable Yield, or Income Expected to be Collected
The accretable yield, or income expected to be collected, on the purchased loans above is as follows at September 30, 2013 and September 30, 2012.  There was no accretable yield on the purchased loans above prior to October 1, 2012.

   
2013
  
2012
 
Balance at January 1
 $635  $- 
New loans purchased
  -   - 
Accretion of income
  (22)  - 
Income recognized upon full loan repayment
  (415)  - 
Reclassifications from non-accretable difference
  23   - 
Disposals
  -   - 
Balance at September 30
 $221  $- 
Past Due and Non-performing Loans
The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2013 and December 31 2012.  The recorded investment in non-accrual loans is less than the principal owed on non-accrual loans due to discounts applied to the carrying value of the loan at time of their acquisition and interest payments made by the borrower which have been used to reduce the recorded investment in the loan rather than recognized as interest income.

September 30, 2013
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
           
Residential real estate
 $2,900  $2,623  $400 
Multifamily real estate
  4,141   2,815   936 
Commercial real estate
            
Owner occupied
  1,486   1,280   408 
Non owner occupied
  2,950   2,166   1,113 
Commercial and industrial
  9,352   7,521   31 
Consumer
  173   157   16 
All other
  12,282   4,862   145 
Total
 $33,284  $21,424  $3,049 
              

December 31, 2012
 
Principal Owed on Non-accrual Loans
  
Recorded Investment in Non-accrual Loans
  
Loans Past Due Over 90 Days, still accruing
 
           
Residential real estate
 $3,145  $2,813  $208 
Multifamily real estate
  5,501   4,390   227 
Commercial real estate
            
Owner occupied
  1,153   976   783 
Non owner occupied
  3,207   2,174   74 
Commercial and industrial
  11,407   9,897   555 
Consumer
  278   267   - 
All other
  5,468   5,289   2,043 
Total
 $30,159  $25,806  $3,890 
              
Aging of Recorded Investment in Past Due Loans by Loan Class
The following table presents the aging of the recorded investment in past due loans as of September 30, 2013 by class of loans:
Loan Class
 
Total Loans
  
30-89 Days Past Due
  
Greater than 90 days past due
  
Total Past Due
  
Loans Not
Past Due
 
                 
Residential real estate
 $214,151  $4,942  $1,909  $6,851  $207,300 
Multifamily real estate
  37,484   798   3,162   3,960   33,524 
Commercial real estate:
                    
Owner occupied
  91,094   1,474   1,203   2,677   88,417 
Non owner occupied
  201,723   338   3,031   3,369   198,354 
Commercial and industrial
  89,843   3,916   3,258   7,174   82,669 
Consumer
  25,987   266   76   342   25,645 
All other
  71,759   310   4,927   5,237   66,522 
Total
 $732,041  $12,044  $17,566  $29,610  $702,431 

The following table presents the aging of the recorded investment in past due loans as of December 31, 2012 by class of loans:
Loan Class
 
Total Loans
  
30-89 Days Past Due
  
Greater than 90 days past due
  
Total Past Due
  
Loans Not
Past Due
 
                 
Residential real estate
 $214,743  $9,356  $2,040  $11,396  $203,347 
Multifamily real estate
  28,673   695   3,893   4,588   24,085 
Commercial real estate:
                    
Owner occupied
  91,902   6,212   1,129   7,341   84,561 
Non owner occupied
  178,849   5,267   2,248   7,515   171,334 
Commercial and industrial
  84,430   2,306   2,485   4,791   79,639 
Consumer
  28,128   602   176   778   27,350 
All other
  77,900   468   7,332   7,800   70,100 
Total
 $704,625  $24,906  $19,303  $44,209  $660,416 
 
Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment Based on Impairment Method
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2013:
   
Allowance for Loan Losses
  
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
  
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
 
                          
Residential real estate
 $290  $2,263  $-  $2,553  $3,732  $210,231  $188  $214,151 
Multifamily real estate
  -   374   -   374   2,691   33,503   1,290   37,484 
Commercial real estate:
                                
Owner occupied
  185   1,260   -   1,445   2,428   88,414   252   91,094 
Non-owner occupied
  362   1,735   -   2,097   1,161   196,775   3,787   201,723 
Commercial and industrial
  2,342   994   -   3,336   6,722   82,620   501   89,843 
Consumer
  -   255   -   255   -   25,987   -   25,987 
All other
  117   1,495   500   2,112   3,398   63,859   4,502   71,759 
Total
 $3,296  $8,376  $500  $12,172  $20,132  $701,389  $10,520  $732,041 

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2012:
   
Allowance for Loan Losses
  
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
  
Individually Evaluated for Impairment
  
Collectively Evaluated for Impairment
  
Acquired with Deteriorated Credit Quality
  
Total
 
                          
Residential real estate
 $358  $1,805  $-  $2,163  $4,609  $209,932  $202  $214,743 
Multifamily real estate
  -   331   -   331   1,670   23,830   3,173   28,673 
Commercial real estate:
                                
Owner occupied
  74   1,043   -   1,117   2,511   89,120   271   91,902 
Non-owner occupied
  362   1,526   -   1,888   2,627   170,326   5,896   178,849 
Commercial and industrial
  2,173   873   -   3,046   10,799   73,120   511   84,430 
Consumer
  -   244   -   244   -   28,128   -   28,128 
All other
  375   1,824   500   2,699   4,271   69,133   4,496   77,900 
Total
 $3,342  $7,646  $500  $11,488  $26,487  $663,589  $14,549  $704,625 
Loans Individually Evaluated for Impairment by Class of Loans
The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2013.  The table includes $7,603 of loans acquired with deteriorated credit quality that the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

   
Unpaid Principal Balance
  
Recorded Investment
  
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
         
Residential  real estate
 $1,481  $1,290  $- 
Multifamily real estate
  5,314   3,981   - 
Commercial real estate
            
Owner occupied
  2,625   2,013   - 
Non owner occupied
  2,127   1,376   - 
Commercial and industrial
  1,693   710   - 
All other
  3,155   3,136   - 
    16,395   12,506   - 
With an allowance recorded:
            
Residential  real estate
 $2,644  $2,630  $290 
Commercial real estate
            
Owner occupied
  531   531   185 
Non owner occupied
  809   790   362 
Commercial and industrial
  7,181   6,513   2,342 
All other
  12,161   4,764   617 
    23,326   15,228   3,796 
Total
 $39,721  $27,734  $3,796 
              
The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2012.  The table includes $9,421 of loans acquired with deteriorated credit quality that the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

   
Unpaid Principal Balance
  
Recorded Investment
  
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
         
Residential  real estate
 $1,886  $1,714  $- 
Multifamily real estate
  6,332   4,533   - 
Commercial real estate
            
Owner occupied
  2,876   2,196   - 
Non owner occupied
  3,912   2,916   - 
Commercial and industrial
  2,031   837   - 
All other
  3,426   3,427   - 
    20,463   15,623   - 
With an allowance recorded:
            
Residential  real estate
 $3,118  $3,097  $358 
Commercial real estate
            
Owner occupied
  586   586   74 
Non owner occupied
  809   789   362 
Commercial and industrial
  10,771   10,473   2,173 
All other
  5,517   5,340   875 
    20,801   20,285   3,842 
Total
 $41,264  $35,908  $3,842 
              
 
The Average Balance of Loans Individually Evaluated for Impairment and Interest Income Recognized
The following table presents the average balance of loans individually evaluated for impairment and interest income recognized on these loans for the nine months ended September 30, 2013 and September 30, 2012.   The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

   
Nine months ended Sept 30, 2013
  
Nine months ended Sept 30, 2012
 
Loan Class
 
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
  
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
 
                    
Residential real estate
 $4,303  $140  $140  $9,905  $410  $383 
Multifamily real estate
  4,247   828   828   6,546   1,387   1,389 
Commercial real estate:
                        
Owner occupied
  2,620   136   119   8,298   981   984 
Non-owner occupied
  2,603   9   9   11,305   66   73 
Commercial and industrial
  9,184   44   44   9,738   397   378 
Consumer
  -   -   -   36   2   2 
All other
  8,620   214   214   7,307   852   842 
Total
 $31,577  $1,371  $1,354  $53,135  $4,095  $4,051 

The following table presents the average balance of loans individually evaluated for impairment and interest income recognized on these loans for the three months ended September 30, 2013 and September 30, 2012.   The table includes loans acquired with deteriorated credit quality that are still individually evaluated for impairment.

   
Three months ended Sept 30, 2013
  
Three months ended Sept 30, 2012
 
Loan Class
 
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
  
Average Recorded Investment
  
Interest Income Recognized
  
Cash Basis Interest Recognized
 
                    
Residential real estate
 $3,920  $42  $42  $9,646  $93  $79 
Multifamily real estate
  3,981   32   27   4,493   37   48 
Commercial real estate:
                        
Owner occupied
  2,544   40   38   7,425   43   61 
Non-owner occupied
  2,166   -   -   11,008   11   22 
Commercial and industrial
  7,223   3   3   11,710   156   144 
Consumer
  -   -   -   36   1   1 
All other
  7,900   54   17   6,031   658   660 
Total
 $27,734  $171  $127  $50,349  $999  $1,015 
 
Troubled Debt Restructurings
The following table presents TDR’s as of September 30, 2013 and December 31, 2012:

September 30, 2013
 
TDR’s on Non-accrual
  
Other TDR’s
  
Total TDR’s
 
           
Residential  real estate
 $852  $301  $1,153 
Commercial real estate
            
Non owner occupied
  -   3,289   3,289 
Commercial and industrial
  1,655   848   2,503 
All other
  166   2,017   2,183 
Total
 $2,673  $6,455  $9,128 
              

December 31, 2012
 
TDR’s on Non-accrual
  
Other TDR’s
  
Total TDR’s
 
           
Residential  real estate
 $1,020  $240  $1,260 
Commercial real estate
            
Owner occupied
  -   4,224   4,224 
Non owner occupied
  -   4,920   4,920 
Commercial and industrial
  2   2,525   2,527 
All other
  -   2,197   2,197 
Total
 $1,022  $14,106  $15,128 
              
Troubled Debt Restructuring During the Period
The following table presents TDR’s that occurred during the nine months ended September 30, 2013 and September 30, 2012:

   
Nine months ended Sept. 30, 2013
  
Nine months ended Sept. 30, 2012
 
Loan Class
 
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
  
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
 
                    
Commercial real estate
                  
Non owner occupied
  -  $-  $-   1  $519  $519 
Commercial and industrial
  -   -   -   1   1,809   1,809 
All other
  1   16   16   1   190   190 
Total
  1  $16  $16   3  $2,518  $2,518 

The following table presents TDR’s that occurred during the three months ended September 30, 2012:

   
Three months ended Sept. 30, 2012
 
Loan Class
 
Number of Loans
  
Pre-Modification Outstanding Recorded Investment
  
Post-Modification Outstanding Recorded Investment
 
           
Commercial real estate
         
Non owner occupied
  1  $519  $519 
Total
  1  $519  $519 
Risk Category of Loans by Class of Loans
As of September 30, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

Loan Class
 
Pass
  
Special Mention
  
Substandard
  
Doubtful
  
Total Loans
 
                 
Residential real estate
 $197,249  $8,707  $8,113  $82  $214,151 
Multifamily real estate
  32,576   927   3,981   -   37,484 
Commercial real estate:
                    
Owner occupied
  81,246   6,300   3,548   -   91,094 
Non-owner occupied
  193,832   5,598   2,293   -   201,723 
Commercial and industrial
  81,044   1,415   7,349   35   89,843 
Consumer
  25,758   138   91   -   25,987 
All other
  57,194   2,441   12,012   112   71,759 
Total
 $668,899  $25,526  $37,387  $229  $732,041 

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

Loan Class
 
Pass
  
Special Mention
  
Substandard
  
Doubtful
  
Total Loans
 
                 
Residential real estate
 $195,210  $10,115  $9,327  $91  $214,743 
Multifamily real estate
  19,747   1,912   7,014   -   28,673 
Commercial real estate:
                    
Owner occupied
  74,529   8,994   8,379   -   91,902 
Non-owner occupied
  163,337   7,685   7,827   -   178,849 
Commercial and industrial
  70,180   2,739   11,508   3   84,430 
Consumer
  27,931   123   74   -   28,128 
All other
  64,009   814   12,386   691   77,900 
Total
 $614,943  $32,382  $56,515  $785  $704,625