LOANS AND LEASES (Tables)

12 Months Ended

Dec. 31, 2012

Major classifications of LHFI are as follows:

	As of December 31,
(In thousands)	2012			2011
Construction and land development	$	37,215		$	54,120
Residential real estate		24,981			26,637
Multi-family		11,756			11,622
Commercial real estate		167,115			182,579
Commercial and industrial		40,560			54,136
Consumer		1,139			949
Leases		37,347			36,014
Tax certificates		24,569			48,809
Less: Deferred loan fees		(517	)		(623	)
Total LHFI, net of unearned income	$	344,165		$	414,243

The following tables present risk ratings for each loan portfolio segment at December 31, 2012 and 2011, excluding LHFS.

As of December 31, 2012					Special
(In thousands)	Pass		Pass-Watch		Mention		Substandard		Non-accrual		Total
Construction and land development	$	2,139	$	13,872	$	16,343	$	581	$	4,280	$	37,215
Commercial real estate		64,308		69,510		19,529		3,423		10,345		167,115
Commercial & industrial		14,764		10,774		92		9,969		4,961		40,560
Residential real estate		15,125		6,634		602		1,626		994		24,981
Multi-family		9,019		2,034		703		-		-		11,756
Leases		36,755		325		16		-		251		37,347
Tax certificates		23,968		-		-		-		601		24,569
Consumer		926		213		-		-		-		1,139
Subtotal LHFI		167,004		103,362		37,285		15,599		21,432		344,682
Less: Deferred loan fees												(517	)
Total LHFI											$	344,165

December 31, 2011					Special
(In thousands)	Pass		Pass-Watch		Mention		Substandard		Non-accrual		Total
Construction and land development	$	1,303	$	17,493	$	19,936	$	2,374	$	13,014	$	54,120
Commercial real estate		87,308		64,878		13,722		-		16,671		182,579
Commercial & industrial		19,073		12,101		18,242		-		4,720		54,136
Residential real estate		15,335		9,092		1,071		-		1,139		26,637
Multi-family		4,962		3,907		1,050		-		1,703		11,622
Leases		35,355		147		27		-		485		36,014
Tax certificates		47,786		-		-		-		1,023		48,809
Consumer		847		102		-		-		-		949
Subtotal LHFI		211,969		107,720		54,048		2,374		38,755		414,866
Less: Deferred loan fees												(623	)
Total LHFI											$	414,243

The following tables are an aging analysis of past due payments for each loan portfolio segment at December 31, 2012 and 2011, excluding LHFS.

As of December 31, 2012	30-59 Days		60-89 Days		Accruing		Total
(In thousands)	Past Due		Past Due		90+ Days		Non-accrual		Current		Total
Construction and land development	$	-	$	-	$	-	$	4,280	$	32,935	$	37,215
Commercial real estate		1,548		1,486		-		10,345		153,736		167,115
Commercial & industrial		200		-		-		4,961		35,399		40,560
Residential real estate		562		486		-		994		22,939		24,981
Multi-family		-		-		-		-		11,756		11,756
Leases		325		16		-		251		36,755		37,347
Tax certificates		-		-		-		601		23,968		24,569
Consumer		-		-		-		-		1,139		1,139
Subtotal LHFI		2,635		1,988		-		21,432		318,627		344,682
Less: Deferred loan fees												(517	)
Total LHFI											$	344,165

December 31, 2011	30-59 Days		60-89 Days		Accruing		Total
(In thousands)	Past Due		Past Due		90+ Days		Non-accrual		Current		Total
Construction and land development	$	-	$	-	$	-	$	13,014	$	41,106	$	54,120
Commercial real estate		2,837		100		-		16,671		162,971		182,579
Commercial & industrial		148		-		-		4,720		49,268		54,136
Residential real estate		527		382		-		1,139		24,589		26,637
Multi-family		-		-		-		1,703		9,919		11,622
Leases		147		28		-		485		35,354		36,014
Tax certificates		-		-		-		1,023		47,786		48,809
Consumer		-		-		-		-		949		949
Subtotal LHFI		3,659		510		-		38,755		371,942		414,866
Less: Deferred loan fees												(623	)
Total LHFI											$	414,243

The following table details the composition of the non-accrual loans.

	As of December 31, 2012				As of December 31, 2011
(In thousands)	Loan balance		Specific reserves		Loan balance		Specific reserves
Non-accrual loans held for investment
Construction and land development	$	4,280	$	820	$	13,014	$	-
Commercial real estate		10,345		835		16,671		-
Commercial & industrial		4,961		255		4,720		-
Residential real estate		994		14		1,139		24
Multi-family		-		-		1,703		-
Leases		251		55		485		114
Tax certificates		601		47		1,023		-
Total non-accrual LHFI	$	21,432	$	2,026	$	38,755	$	138
Non-accrual loans held for sale
Construction and land development	$	-	$	-	$	8,901	$	-
Commercial real estate		1,572		-		3,634		-
Residential real estate		-		-		34		-
Total non-accrual LHFS	$	1,572	$	-	$	12,569	$	-
Total non-accrual loans	$	23,004	$	2,026	$	51,324	$	138

The following is a summary of information pertaining to impaired loans:

	As of December 31,
(In thousands)	2012		2011
Impaired loans with a valuation allowance	$	9,405	$	1,068
Impaired loans without a valuation allowance		19,423		45,009
Impaired LHFS		1,572		12,569
Total impaired loans	$	30,400	$	58,646

Valuation allowance related to impaired loans	$	2,026	$	138

	For the years ended December 31,
(In thousands)	2012		2011		2010
Average investment in impaired loans and leases	$	39,412	$	62,936	$	78,225
Interest income recognized on impaired loans and leases	$	366	$	202	$	335

Interest income recognized on a cash basis on impaired loans and leases	$	66	$	202	$	335

The following table details the Company's TDRs that are on an accrual status and a non-accrual status at December 31, 2012.

(In thousands)	As of December 31, 2012
	Number of loans		Accrual Status		Non-Accrual Status		Total TDRs
Construction and land development		4	$	1,664	$	854	$	2,518
Commercial real estate		4		613		10,063		10,676
Commercial & industrial		2		5,290		2,457		7,747
Residential real estate		2		-		149		149
Total		12	$	7,567	$	13,523	$	21,090

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

	Modifications by type for the year ended December 31, 2012
(Dollars in thousands)	Number of loans		Rate		Term		Payment		Combination of types		Total		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Construction and land development		1	$	-	$	-	$	-	$	282	$	282	$	290	$	290
Commercial real estate		2		-		-		-		7,624		7,624		9,426		9,426
Commercial & industrial		1		-		-		5,290		-		5,290		5,290		5,290
Total		4	$	-	$	-	$	5,290	$	7,906	$	13,196	$	15,006	$	15,006

	Modifications by type for the year ended December 31, 2011
(Dollars in thousands)	Number of loans		Rate		Term		Payment		Combination of types		Total		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Construction and land development		5	$	-	$	2,374	$	-	$	3,567	$	5,941	$	8,219	$	6,693
Commercial real estate		3		-		2,935		60		640		3,635		3,803		3,803
Commercial & industrial		1		-		-		-		2,744		2,744		2,774		2,774
Residential real estate		2		139		-		41		-		180		194		194
Total		11	$	139	$	5,309	$	101	$	6,951	$	12,500	$	14,990	$	13,464