Loans, net (Tables)

6 Months Ended

Jun. 30, 2012

Loans receivable

Loans receivable consisted of the following (dollars in thousands):

		June 30,			December 31,
		2012			2011
Mortgage loans:
Fixed-rate residential	$	7,301		$	8,063
Adjustable-rate residential		3,588			3,967
Commercial real estate		87,309			97,547
Construction		--			308
Total mortgage loans		98,198			109,885
Commercial non-real estate		10,392			12,939
Consumer loans:
Home equity		14,436			14,590
Consumer and installment		21,790			22,939
Consumer lines of credit		283			300
Total consumer loans		36,509			37,829
Total loans		145,099			160,653
Less:
Unamortized loan discount		(210	)		(231	)
Allowance for loan losses		(4,576	)		(4,549	)
Net deferred loan origination costs		144			146
Total, net	$	140,457		$	156,019
Weighted-average interest rate of loans		4.68	%		5.08	%

Information about Impaired Loans

Information about impaired loans for the periods ended June 30, 2012 and December 31, 2011 is as follows (in thousands):

	June 30,		December 31,
	2012		2011
Loans receivable for which there is a related allowance for credit losses determined in accordance with ASC 310-10/Statement No. 114	$	1,636	$	1,923
Other impaired loans		26,751		25,550
Total impaired loans	$	28,387	$	27,473
Average monthly balance of impaired loans	$	32,602	$	29,916
Specific allowance for credit losses	$	692	$	439

Impaired Loans

Impaired Loans
For the Periods Ended June 30, 2012 and December 31, 2011
(in thousands)
	Unpaid						Average
June 30, 2012	Principal		Recorded		Related		Recorded
	Balance		Investment		Allowance		Investment
With no related allowance recorded:
Commercial
Commercial Real Estate	$	20,113	$	16,712	$	--	$	18,412
Commercial Non Real Estate		2,727		2,408		--		2,568
Consumer
Consumer - other		6,163		5,192		--		5,678
Consumer - home equity		517		490		--		504
Residential Real Estate
1-4 family		2,020		1,949		--		1,984
With an allowance recorded:
Commercial
Commercial Real Estate	$	1,564	$	1,403	$	619	$	1,483
Consumer
Consumer - other		233		233		73		233
Residential Real Estate
1-4 family		--		--		--		--
Total:	$	33,337	$	28,387	$	692	$	30,862
Commercial		24,404		20,523		619		22,463
Consumer		6,913		5,915		73		6,415
Residential		2,020		1,949		--		1,984

December 31, 2011	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment
With no related allowance recorded:
Commercial
Commercial Real Estate	$	22,454	$	16,949	$	--	$	19,702
Commercial Non Real Estate		2,376		2,075		--		2,225
Consumer
Consumer - other		5,135		4,203		--		4,669
Consumer - home equity		511		491		--		501
Residential Real Estate
1-4 Family		1,891		1,832		--		1,862
With a related allowance recorded:
Commercial
Commercial Real Estate	$	1,564	$	1,403	$	306	$	1,483
Commercial Non Real Estate		282		281		60		282
Consumer
Consumer - other		239		239		73		239
Total:	$	34,452	$	27,473	$	439	$	30,963
Commercial		26,676		20,708		366		23,692
Consumer		5,885		4,933		73		5,409
Residential		1,891		1,832		--		1,862

Loans Receivable on Non - Accrual Basis

At June 30, 2012 and December 31, 2011, loans which are accounted for on a non-accrual basis:

Loans Receivable on Non-accrual Status
As of June 30, 2012 and December 31, 2011
(in thousands)
	June 30,		December 31,
	2012		2011
Commercial
Commercial real estate	$	11,434	$	11,338
Commercial non real estate		1,351		1,340
Consumer
Consumer - other		2,872		2,536
Consumer - automobile		39		65
Consumer - home equity		356		307
Residential Real Estate
1-4 family		1,171		1,220
Total	$	17,223	$	16,806

Allowance for loan Losses by portfolio

Allowance for Loan Losses and Recorded Investment in Loans Receivable
(in thousands)
The following tables present the activity in the allowance for loan losses by portfolio segment as of June 30, 2012 and 2011.
				Commercial
	Commercial			Real Estate			Consumer			Residential			Total
June 30, 2012
Allowance for loan losses:
Beginning balance	$	1,887		$	1,920		$	484		$	258		$	4,549
Charge-offs		(48	)		(299	)		(286	)		(6	)		(639	)
Recoveries		3			28			4			1			36
Provisions		185			383			54			8			630
Ending balance	$	2,027		$	2,032		$	256		$	261		$	4,576
June 30, 2011
Allowance for loan losses:
Beginning balance	$	2,166		$	4,602		$	335		$	276		$	7,379
Charge-offs		(295	)		(777	)		(181	)		(11	)		(1,264	)
Recoveries		33			138			25			61			257
Provisions		--			--			--			--			--
Ending balance	$	1,904		$	3,963		$	179		$	326		$	6,372

Allowance for Loan Losses and Recorded Investment in Loans

The following tables present the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2012 and December 31, 2111.

			Commercial
	Commercial		Real Estate		Consumer		Residential		Total
Allowance for loan losses:
June 30, 2012
Ending balances attributable
to loans:
Individually evaluated
for impairment	$	--	$	619	$	73	$	-- $		692
Collectively evaluated
for impairment		2,027		1,413		183		261		3,884
Ending balance	$	2,027	$	2,032	$	256	$	261	$	4,576
Loans receivable:
Ending balance - total	$	10,392	$	87,309	$	36,509	$	10,889	$	145,099
Ending balances:
Individually evaluated
for impairment	$	2,408	$	18,115	$	5,915	$	1,949	$	28,387
Collectively evaluated
for impairment	$	7,984	$	69,194	$	30,594	$	8,940	$	116,712

			Commercial
	Commercial		Real Estate		Consumer		Residential		Total
Allowance for loan losses:
December 31, 2011
Ending balances attributable
to loans:
Individually evaluated
for impairment	$	60	$	306	$	73	$	--	$	439
Collectively evaluated
for impairment		1,827		1,614		411		258		4,110
Ending balance	$	1,887	$	1,920	$	484	$	258	$	4,549
Loans receivable:
Ending balance - total	$	12,939	$	97,547	$	37,829	$	12,338	$	160,653
Ending balances:
Individually evaluated
for impairment	$	2,356	$	18,352	$	4,933	$	1,832	$	27,473
Collectively evaluated
for impairment	$	10,583	$	79,195	$	32,896	$	10,506	$	133,180

Credit Risk Profile by Creditworthiness Category

Consumer Credit Exposure (1)

Credit Risk Profile Based on Payment Activity

					Consumer								Residential real estate
	Other				Automobile				Home equity				1-4 family
	June 30,		December 31,		June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
	2012		2011		2012		2011		2012		2011		2012		2011
Performing	$	18,380	$	19,760	$	782	$	878	$	14,080	$	14,282	$	9,718	$	11,118
Nonperforming		2,872		2,536		39		65		356		308		1,171		1,220
Total	$	21,252	$	22,296	$	821	$	943	$	14,436	$	14,590	$	10,889	$	12,338

(1) Credit quality indicators are reviewed and updated as applicable on an ongoing basis in accordance with credit policies.

Past Due Loan Trends for Corporation's Loans Receivable

The following are past due loans for the Corporation’s loans receivable for the periods ended June 30, 2012 and December 31, 2011(in thousands).

					Greater				90 days
	30 - 59 Days		60 - 89 Days		Than		Total Past		Past Due				Total Loans
	Past Due		Past Due		90 Days		Due		& Still Accruing		Current		Receivable
June 30, 2012
Commercial:
Commercial non real estate	$	38	$	4	$	744	$	786	$	16	$	9,590	$	10,392
Commercial real estate		800		278		7,123		8,201		--		79,108		87,309
Consumer:
Consumer - other		225		145		1,700		2,070		--		19,182		21,252
Consumer - automobile		13		1		10		24		--		797		821
Consumer - home equity		99		175		153		427		--		14,009		14,436
Residential 1-4 family		228		273		617		1,118		--		9,771		10,889
Total	$	1,403	$	876	$	10,347	$	12,626	$	16	$	132,457	$	145,099
December 31, 2011
Commercial:
Commercial non real estate	$	485	$	139	$	996	$	1,237	$	383	$	11,319	$	12,939
Commercial real estate		714		472		8,046		9,232		--		88,315		97,547
Consumer:
Consumer - other		422		69		2,052		2,543		--		19,753		22,296
Consumer - automobile		69		--		--		69		--		874		943
Consumer - home equity		408		47		182		578		59		13,953		14,590
Residential 1-4 family		482		--		675		1,157		--		11,181		12,338
Total	$	2,580	$	727	$	11,951	$	14,816	$	442	$	145,395	$	160,653

Loan Modifications for Corporation's Loans Receivable

The following are loan modifications for the Corporation’s loans receivable for the three and six month periods ended June 30, 2012.

	Three Months Ended June 30, 2012						Six Months Ended June 30, 2012
			Pre		Post				Pre		Post
			Modification		Modification				Modification		Modification
	Number		Outstanding		Outstanding		Number		Outstanding		Outstanding
Troubled Debt Restructurings	of New		Recorded		Recorded		of New		Recorded		Recorded
Added during current period	Contracts		Investment		Investment		Contracts		Investment		Investment
	(in thousands)						(in thousands)
Commercial:
Commercial non real estate		--	$	--		--		3	$	238	$	238
Commercial real estate		1		175		165		1		268		258
Consumer:
Consumer - other		2		117		117		6		757		757
Residential 1-4 family		--		--		--		1		1		1
Total		3	$	292	$	282		11	$	1,264	$	1,254
	Three Months Ended June 30, 2012						Six Months Ended June 30, 2012
			Post						Post
			Modification						Modification
	Number		Outstanding		Defaulted		Number		Outstanding		Defaulted
Troubled Debt Restructurings	of New		Recorded		Recorded		of New		Recorded		Recorded
Defaulted during the period	Contracts		Investment		Investment		Contracts		Investment		Investment
Added since December 31, 2011		(in thousands)					(in thousands)
Commercial:
Commercial non real estate		--	$	--	$	--		--	$	--	$	--
Commercial real estate		1		175		165		1		175		165
Consumer:
Consumer - other		--		--		--		--		--		--
Total		1	$	175	$	165		1	$	175	$	165

Corporate Credit Quality Indicator

Credit Risk Profile by Creditworthiness Category

Commercial Credit Exposure (1)

Credit Risk Profile by Creditworthiness Category
 

	Commercial Non Real				Commercial Real
	Estate				Estate
	June 30,		December 31,		June 30,		December 31,
	2012		2011		2012		2011
Grade 1 Minimal Risk	$	58	$	52	$	--	$	--
Grade 2 Low Risk		--		223		--		--
Grade 3 Moderate Risk		263		363		7,572		9,242
Grade 4 Acceptable Risk		4,952		6,458		32,639		39,168
Grade 5 Watch		1,762		1,778		21,683		21,263
Grade 6 Special Mention		1,790		1,933		8,227		9,890
Grade 7 Substandard		1,471		1,926		15,938		17,984
Grade 8 Doubtful		96		206		1,250		--
Total	$	10,392	$	12,939	$	87,309	$	97,547

(1) Credit quality indicators are reviewed and updated as applicable on an ongoing basis in accordance with credit policies.

Internally Assigned Grade

Credit Risk Profile by Creditworthiness Category

Consumer Credit Exposure (1)

Credit Risk Profile by Internally Assigned Grade

	Residential				Consumer
	June 30,		December 31,		June 30,		December 31,
	2012		2011		2012		2011
Grade:
Pass	$	8,920	$	10,833	$	31,021	$	33,307
Special mention		697		243		1,579		480
Substandard		1,272		1,262		3,909		4,042
Total	$	10,889	$	12,338	$	36,509 $		37,829

(1) Credit quality indicators are reviewed and updated as applicable on an ongoing basis in accordance with credit policies.