LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2013

Loans Receivable And Allowance For Loan Losses Tables

Schedule of composition of loans categorized by the type of loan

The composition of loans categorized by the type of the loan, is as follows:

	March 31, 2013			December 31, 2012
Commercial, industrial, and municipal	$	128,875		$	132,633
Commercial real estate mortgage		190,613			183,818
Commercial construction and development		29,867			28,482
Residential real estate mortgage		116,816			105,579
Residential construction and development		13,302			15,247
Residential real estate home equity		20,734			21,756
Consumer and individual		4,494			4,715
Subtotals – Gross loans		504,701			492,230
Loans in process of disbursement		(4,937	)		(7,039	)
Subtotals – Disbursed loans		499,764			485,191
Net deferred loan costs		258			231
Allowance for loan losses		(7,434	)		(7,431	)
Net loans receivable	$	492,588		$	477,991

Schedule of summary of impaired loans

The following is a summary of information pertaining to impaired loans at period-end:

	March 31, 2013		December 31, 2012
Impaired loans without a valuation allowance	$	4,645	$	3,410
Impaired loans with a valuation allowance		7,357		9,029
Total impaired loans before valuation allowances		12,002		12,439
Valuation allowance related to impaired loans		2,526		2,434
Net impaired loans	$	9,476	$	10,005

Schedule of allowance for loan losses

Activity in the allowance for loans losses during the three months ended March 31, 2013 follows:

Allowance for loan losses:	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Unallocated		Total
Beginning Balance	$	3,014		$	2,803		$	1,511		$	103		$	—	$	7,431
Provision		343			(293	)		264			9			—		323
Recoveries		2			—			1			5			—		8
Charge offs		(130	)		—			(172	)		(26	)		—		(328	)
Ending balance	$	3,229		$	2,510		$	1,604		$	91		$	—	$	7,434
Individually evaluated for impairment	$	1,424		$	635		$	450		$	17		$	—	$	2,526
Collectively evaluated for impairment	$	1,805		$	1,875		$	1,154		$	74		$	—	$	4,908
Loans receivable (gross):
Individually evaluated for impairment	$	4,675		$	4,539		$	2,763		$	25		$	—	$	12,002
Collectively evaluated for impairment	$	124,200		$	215,941		$	148,089		$	4,469		$	—	$	492,699

Activity in the allowance for loans losses during the three months ended March 31, 2012, follows:

Allowance for loan losses:	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Unallocated		Total
Beginning Balance	$	3,406		$	3,175		$	1,242		$	118		$	—	$	7,941
Provision		(35	)		(149	)		348			(4	)		—		160
Recoveries		1			—			—			—			—		1
Charge offs		(102	)		—			(237	)		(8	)		—		(347	)
Ending balance	$	3,270		$	3,026		$	1,353		$	106		$	—	$	7,755
Individually evaluated for impairment	$	1,445		$	947		$	689		$	18		$	—	$	3,099
Collectively evaluated for impairment	$	1,825		$	2,079		$	664		$	88		$	—	$	4,656
Loans receivable (gross):
Individually evaluated for impairment	$	6,281		$	8,693		$	2,564		$	71		$	—	$	17,609
Collectively evaluated for impairment	$	124,271		$	188,316		$	112,526		$	3,319		$	—	$	428,432

Schedule of commercial credit exposure

The commercial credit exposure based on internally assigned credit grade at March 31, 2013, follows:

			Commercial		Construction
	Commercial		Real Estate		& Development		Agricultural		Government		Total
High quality (risk rating 1)	$	40	$	—	$	—	$	—	$	—	$	40
Minimal risk (2)		17,556		19,206		269		845		91		37,967
Average risk (3)		50,163		121,049		23,943		3,149		12,315		210,619
Acceptable risk (4)		32,412		36,013		3,306		213		—		71,944
Watch risk (5)		6,837		7,734		1,735		—		—		16,306
Substandard risk (6)		579		2,291		395		—		—		3,265
Impaired loans (7)		4,521		4,320		219		154		—		9,214
Total	$	112,108	$	190,613	$	29,867	$	4,361	$	12,406	$	349,355

The commercial credit exposure based on internally assigned credit grade at December 31, 2012, follows:

			Commercial		Construction
	Commercial		Real Estate		& Development		Agricultural		Government		Total
High quality (risk rating 1)	$	38	$	—	$	—	$	—	$	—	$	38
Minimal risk (2)		16,360		20,193		305		559		1,575		38,992
Average risk (3)		51,846		103,454		22,573		3,336		12,550		193,759
Acceptable risk (4)		32,002		45,699		3,318		216		—		81,235
Watch risk (5)		8,271		8,291		1,757		—		—		18,319
Substandard risk (6)		617		2,179		327		—		—		3,123
Impaired loans (7)		5,109		4,002		202		154		—		9,467
Total	$	114,243	$	183,818	$	28,482	$	4,265	$	14,125	$	344,933

Schedule of consumer credit exposure

The consumer credit exposure based on payment activity and internally assigned credit grade at March 31, 2013, follows:

	Residential-		Residential-		Construction and
	Prime		HELOC		Development		Consumer		Total
Performing	$	114,725	$	20,247	$	13,117	$	4,469	$	152,558
Impaired loans		2,091		487		185		25		2,788
Total	$	116,816	$	20,734	$	13,302	$	4,494	$	155,346

The consumer credit exposure based on payment activity and internally assigned credit grade at December 31, 2012, follows:

	Residential-		Residential-		Construction and
	Prime		HELOC		Development		Consumer		Total
Performing	$	103,292	$	21,250	$	15,094	$	4,689	$	144,325
Impaired loans		2,287		506		153		26		2,972
Total	$	105,579	$	21,756	$	15,247	$	4,715	$	147,297

Schedule of payment age analysis of loans receivable

The payment age analysis of loans receivable disbursed at March 31, 2013, follows:

	30-59		60-89		90+		Total				Total		90+ and
Loan Class	Days		Days		Days		Past Due		Current		Loans		Accruing
Commercial:
Commercial and industrial	$	637	$	106	$	1,132	$	1,875	$	110,233	$	112,108	$	—
Agricultural		—		24		154		178		4,183		4,361		—
Government		—		—		—		—		12,406		12,406		—
Commercial real estate:
Commercial real estate		579		266		1,320		2,165		188,448		190,613		—
Commercial construction and development		575		20		—		595		26,705		27,300		—
Residential real estate:
Residential – Prime		996		84		1,364		2,444		114,372		116,816		—
Residential – HELOC		204		29		118		351		20,383		20,734		—
Residential – construction and development		249		33		133		415		10,517		10,932		—
Consumer		8		1		16		25		4,469		4,494		—
Total	$	3,248	$	563	$	4,237	$	8,048	$	491,716	$	499,764	$	—

The payment age analysis of loans receivable disbursed at December 31, 2012, follows:

	30-59		60-89		90+		Total				Total		90+ and
Loan Class	Days		Days		Days		Past Due		Current		Loans		Accruing
Commercial:
Commercial and industrial	$	375	$	83	$	1,795	$	2,253	$	111,990	$	114,243	$	—
Agricultural		—		154		—		154		4,111		4,265		—
Government		—		—		—		—		14,125		14,125		—
Commercial real estate:
Commercial real estate		936		76		1,028		2,040		181,778		183,818		—
Commercial construction and development		—		20		—		20		25,340		25,360		—
Residential real estate:
Residential – prime		950		274		1,344		2,568		103,011		105,579		—
Residential – HELOC		64		—		335		399		21,357		21,756		—
Residential – construction and development		—		—		133		133		11,197		11,330		—
Consumer		21		3		15		39		4,676		4,715		—
Total	$	2,346	$	610	$	4,650	$	7,606	$	477,585	$	485,191	$	—

Schedule of impaired loans, by loan class

Impaired loans as of March 31, 2013, and during the three months then ended, by loan class, follows:

	Unpaid						Average		Interest
	Principal		Related		Recorded		Recorded		Income
	Balance		Allowance		Investment		Investment		Recognized
With no related allowance recorded:
Commercial & industrial	$	1,859	$	—	$	1,754	$	1,619	$	18
Commercial real estate		1,873		—		1,716		1,410		9
Commercial construction & development		3		—		1		1		—
Residential – prime		1,222		—		1,124		974		1
Residential – HELOC		50		—		50		25		1
With an allowance recorded:
Commercial & industrial	$	2,986	$	1,356	$	2,767	$	3,197	$	12
Commercial real estate		2,701		592		2,604		2,752		21
Commercial construction & development		218		43		218		210		4
Agricultural		155		68		154		154		—
Residential – prime		977		261		967		1,215		1
Residential – HELOC		446		133		437		472		1
Residential construction & development		185		56		185		169		—
Consumer		26		17		25		26		—
Totals:
Commercial & industrial	$	4,845	$	1,356	$	4,521	$	4,816	$	30
Commercial real estate		4,574		592		4,320		4,162		30
Commercial construction & development		221		43		219		211		4
Agricultural		155		68		154		154		—
Residential – prime		2,199		261		2,091		2,189		2
Residential – HELOC		496		133		487		497		2
Residential construction & development		185		56		185		169		—
Consumer		26		17		25		26		—

The impaired loans at December 31, 2012, and during the year then ended, by loan class, follows:

	Unpaid						Average		Interest
	Principal		Related		Recorded		Recorded		Income
	Balance		Allowance		Investment		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	1,521	$	—	$	1,483	$	1,545	$	88
Commercial real estate		1,176		—		1,103		2,405		194
Commercial construction and development		—		—		—		—		33
Residential – Prime		881		—		824		493		9
Residential – HELOC		—		—		—		—		3
With an allowance recorded:
Commercial and industrial	$	3,960	$	1,287	$	3,626	$	4,238	$	62
Commercial real estate		3,035		643		2,899		3,303		105
Commercial construction and development		205		31		202		427		21
Agricultural		154		40		154		91		10
Residential – Prime		1,511		277		1,463		1,746		22
Residential – HELOC		510		126		506		387		15
Residential construction and development		153		4		153		149		5
Consumer		26		26		26		48		2
Totals:
Commercial and industrial	$	5,481	$	1,287	$	5,109	$	5,783	$	150
Commercial real estate		4,211		643		4,002		5,708		299
Commercial construction and development		205		31		202		427		54
Agricultural		154		40		154		91		10
Residential – Prime		2,392		277		2,287		2,239		31
Residential – HELOC		510		126		506		387		18
Residential construction and development		153		4		153		149		5
Consumer		26		26		26		48		2

Schedule of loans on nonaccrual status

Loans on nonaccrual status at period-end, follows:

	March 31, 2013		December 31, 2012
Commercial:
Commercial and industrial	$	2,467	$	3,023
Agricultural		154		154
Commercial real estate:
Commercial real estate		2,266		2,001
Commercial construction and development		20		1
Residential real estate:
Residential – prime		1,921		2,021
Residential – HELOC		338		365
Residential construction and development		166		133
Consumer		17		17
Total	$	7,349	$	7,715

Schedule of modifications of troubled debt

The following table presents information concerning modifications of troubled debt made during the three months ended March 31, 2013:

		Pre-modification		Post-modification
	Number of	outstanding recorded		outstanding recorded
As of March 31, 2013 ($000s)	contracts	investment		investment at period-end
Commercial & industrial	1	$	38	$	38
Commercial real estate	2	$	221	$	221

The following table presents information concerning modifications of troubled debt made during the three months ended March 31, 2012:

		Pre-modification		Post-modification
	Number of	outstanding recorded		outstanding recorded
As of March 31, 2012 ($000s)	contracts	investment		investment at period-end
Commercial & industrial	3	$	180	$	180
Commercial real estate	1	$	379	$	379

The following table outlines past troubled debt restructurings that subsequently defaulted within twelve months of the last restructuring date. For purposes of this table, default is defined as 90 days or more past due on restructured payments. No past troubled debt restructurings subsequently defaulted within twelve months of the last restructuring during the three months ended March 31, 2012.

Default during the three months ended	Number of	Recorded
March 31, 2013 ($000s)	contracts	investment
Commercial real estate	1	$	74
Residential – prime	1	$	90