Loans (Tables)

12 Months Ended

Dec. 31, 2013

Loans Tables

Schedule of composition of loans categorized by the type of loan

The composition of loans at December 31 categorized by the type of the loan is as follows:

	2013			2012
Commercial, industrial, and municipal	$	130,220		$	132,633
Commercial real estate mortgage		212,850			183,818
Commercial construction and development		13,672			28,482
Residential real estate mortgage		123,980			105,579
Residential construction and development		18,277			15,247
Residential real estate home equity		20,677			21,756
Consumer and individual		3,567			4,715
Subtotals – Gross loans		523,243			492,230
Loans in process of disbursement		(6,895	)		(7,039	)
Subtotals – Disbursed loans		516,348			485,191
Net deferred loan costs		315			231
Allowance for loan losses		(6,783	)		(7,431	)
Net loans receivable	$	509,880		$	477,991

Schedule of loans to executives and directors

Activity in such loans is summarized below:

	2013			2012
Loans outstanding at beginning	$	7,371		$	9,958
New loans		3,519			4,485
Repayments		(4,227	)		(7,072	)
Loans outstanding at end	$	6,663		$	7,371

Schedule of impaired loans

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

	December 31,
	2013		2012		2011
Impaired loans without a valuation allowance	$	9,303	$	3,410	$	5,474
Impaired loans with a valuation allowance		6,472		9,029		11,745
Total impaired loans before valuation allowances		15,775		12,439		17,219
Valuation allowance related to impaired loans		2,108		2,434		3,178
Net impaired loans	$	13,667	$	10,005	$	14,041

	Years Ended December 31,
	2013		2012		2011
Average recorded investment, net of allowance for loan losses	$	14,109	$	12,026	$	12,965
Interest income recognized	$	534	$	569	$	597
Interest income recognized on a cash basis on impaired loans	$	0	$	0	$	0

The impaired loans at December 31, 2013 and 2012, and during the years then ended, by loan class, follows:

	2013
	Unpaid						Average		Interest
	Principal		Related		Recorded		Recorded		Income
	Balance		Allowance		Investment		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	2,906	$	0	$	2,861	$	2,172	$	135
Commercial real estate		2,555		0		2,376		1,740		85
Commercial construction and development		1		0		0		0		0
Agricultural		0		0		0		0		0
Government		3,090		0		3,090		1,545		150
Residential – Prime		979		0		866		845		14
Residential – HELOC		110		0		110		55		3
Residential construction and development		0		0		0		0		0
Consumer		0		0		0		0		0
With an allowance recorded:
Commercial and industrial	$	2,231	$	1,112	$	1,999	$	2,813	$	43
Commercial real estate		3,143		621		3,011		2,955		81
Commercial construction and development		142		74		140		171		8
Agricultural		152		55		152		153		0
Residential – Prime		749		101		706		1,085		9
Residential – HELOC		412		119		400		453		5
Residential construction and development		49		8		47		106		1
Consumer		19		18		17		22		0
Totals:
Commercial and industrial	$	5,137	$	1,112	$	4,860	$	4,985	$	178
Commercial real estate		5,698		621		5,387		4,695		166
Commercial construction and development		143		74		140		171		8
Agricultural		152		55		152		153		0
Government		3,090		0		3,090		1,545		150
Residential – Prime		1,728		101		1,572		1,930		23
Residential – HELOC		522		119		510		508		8
Residential construction and development		49		8		47		106		1
Consumer		19		18		17		22		0

	2012
	Unpaid						Average		Interest
	Principal		Related		Recorded		Recorded		Income
	Balance		Allowance		Investment		Investment		Recognized
With no related allowance recorded:
Commercial and industrial	$	1,483	$	0	$	1,483	$	1,545	$	88
Commercial real estate		1,103		0		1,103		2,405		194
Commercial construction and development		0		0		0		0		33
Residential – Prime		824		0		824		493		9
Residential – HELOC		0		0		0		0		3
With an allowance recorded:
Commercial and industrial	$	3,626	$	1,287	$	2,339	$	2,777	$	62
Commercial real estate		2,899		643		2,256		2,634		105
Commercial construction and development		202		31		171		316		21
Agricultural		154		40		114		57		10
Residential – Prime		1,463		277		1,186		1,384		22
Residential – HELOC		506		126		380		259		15
Residential construction and development		153		4		149		129		5
Consumer		26		26		0		27		2
Totals:
Commercial and industrial	$	5,109	$	1,287	$	3,822	$	4,322	$	150
Commercial real estate		4,002		643		3,359		5,039		299
Commercial construction and development		202		31		171		316		54
Agricultural		154		40		114		57		10
Residential – Prime		2,287		277		2,010		1,877		31
Residential – HELOC		506		126		380		259		18
Residential construction and development		153		4		149		129		5
Consumer		26		26		0		27		2

Schedule of allowance for loan losses

A summary analysis of the allowance for loan losses for the three years ended December 31 follows:

	2013			2012			2011
Balance, January 1	$	7,431		$	7,941		$	7,960
Provision charged to operating expense		4,015			785			1,390
Recoveries on loans		80			37			178
Loans charged off		(4,743	)		(1,332	)		(1,587	)
Balance, December 31	$	6,783		$	7,431		$	7,941

Detailed allowance for loan losses activity for the years ended December 31, 2013, 2012, and 2011, follows:

	2013
				Commercial			Residential
	Commercial			Real Estate			Real Estate			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	3,014		$	2,803		$	1,511		$	103		$	0	$	7,431
Provision		3,435			(9	)		556			33			0		4,015
Recoveries		29			33			6			12			0		80
Charge-offs		(3,650	)		(174	)		(850	)		(69	)		0		(4,743	)
Ending balance	$	2,828		$	2,653		$	1,223		$	79		$	0	$	6,783
Individually evaluated for impairment	$	1,167		$	695		$	228		$	18		$	0	$	2,108
Collectively evaluated for impairment	$	1,661		$	1,958		$	995		$	61		$	0	$	4,675
Loans receivable (gross):
Individually evaluated for impairment	$	8,102		$	5,527		$	2,129		$	17		$	0	$	15,775
Collectively evaluated for impairment	$	122,118		$	220,995		$	160,805		$	3,550		$	0	$	507,468

	2012
				Commercial			Residential
	Commercial			Real Estate			Real Estate			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	3,406		$	3,175		$	1,242		$	118		$	0	$	7,941
Provision		(270	)		142			877			36			0		785
Recoveries		6			4			21			6			0		37
Charge-offs		(128	)		(518	)		(629	)		(57	)		0		(1,332	)
Ending balance	$	3,014		$	2,803		$	1,511		$	103		$	0	$	7,431
Individually evaluated for impairment	$	1,327		$	674		$	407		$	26		$	0	$	2,434
Collectively evaluated for impairment	$	1,687		$	2,129		$	1,104		$	77		$	0	$	4,997
Loans receivable (gross):
Individually evaluated for impairment	$	5,263		$	4,204		$	2,946		$	26		$	0	$	12,439
Collectively evaluated for impairment	$	127,370		$	208,096		$	139,636		$	4,689		$	0	$	479,791

	2011
				Commercial			Residential
	Commercial			Real Estate			Real Estate			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	3,862		$	3,674		$	211		$	213		$	0	$	7,960
Provision		245			(269	)		1,398			16			0		1,390
Recoveries		166			6			0			6			0		178
Charge-offs		(867	)		(236	)		(367	)		(117	)		0		(1,587	)
Ending balance	$	3,406		$	3,175		$	1,242		$	118		$	0	$	7,941
Individually evaluated for impairment	$	1,663		$	885		$	615		$	15		$	0	$	3,178
Collectively evaluated for impairment	$	1,743		$	2,290		$	627		$	103		$	0	$	4,763
Loans receivable (gross):
Individually evaluated for impairment	$	6,484		$	8,063		$	2,603		$	69		$	0	$	17,219
Collectively evaluated for impairment	$	120,708		$	196,375		$	112,123		$	3,663		$	0	$	432,869

Schedule of loans by credit exposure

The commercial credit exposure based on internally assigned credit grade at December 31, 2013 and 2012, follows:

	2013
			Commercial		Construction
	Commercial		Real Estate		& Development		Agricultural		Government		Total
High quality (risk rating 1)	$	44	$	0	$	0	$	0	$	0	$	44
Minimal risk (2)		24,085		19,249		120		1,115		78		44,647
Average risk (3)		51,745		145,673		8,863		2,563		6,512		215,356
Acceptable risk (4)		26,395		34,154		2,917		424		357		64,247
Watch risk (5)		8,146		7,572		1,632		0		0		17,350
Substandard risk (6)		654		815		0		0		0		1,469
Impaired loans (7)		4,860		5,387		140		152		3,090		13,629
Totals	$	115,929	$	212,850	$	13,672	$	4,254	$	10,037	$	356,742

	2012
			Commercial		Construction
	Commercial		Real Estate		& Development		Agricultural		Government		Total
High quality (risk rating 1)	$	38	$	0	$	0	$	0	$	0	$	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		0		81,235
Watch risk (5)		8,271		8,291		1,757		0		0		18,319
Substandard risk (6)		617		2,179		327		0		0		3,123
Impaired loans (7)		5,109		4,002		202		154		0		9,467
Totals	$	114,243	$	183,818	$	28,482	$	4,265	$	14,125	$	344,933

The consumer credit exposure based on payment activity at December 31, 2013 and 2012, follows:

	2013
	Residential-		Residential-		Construction and
	Prime		HELOC		Development		Consumer		Total
Performing	$	122,408	$	20,167	$	18,230	$	3,550	$	164,355
Impaired loans		1,572		510		47		17		2,146
Totals	$	123,980	$	20,677	$	18,277	$	3,567	$	166,501

	2012
	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
Totals	$	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 December 31, 2013 and 2012, follows:

	2013
	30-59		60-89		90+		Total				Total		90+ and
Loan Class	Days		Days		Days		Past Due		Current		Loans		Accruing
Commercial:
Commercial and industrial	$	284	$	57	$	610	$	951	$	114,978	$	115,929	$	0
Agricultural		0		0		152		152		4,102		4,254		0
Government		0		0		0		0		10,037		10,037		0
Commercial real estate:
Commercial real estate		376		547		1,276		2,199		210,651		212,850		0
Construction and development		0		0		0		0		11,434		11,434		0
Residential real estate:
Residential – Prime		369		87		335		791		123,189		123,980		0
Residential – HELOC		45		14		314		373		20,304		20,677		0
Construction and development		37		0		0		37		13,583		13,620		0
Consumer		15		10		9		34		3,533		3,567		0
Totals	$	1,126	$	715	$	2,696	$	4,537	$	511,811	$	516,348	$	0

	2012
	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	$	0
Agricultural		0		154		0		154		4,111		4,265		0
Government		0		0		0		0		14,125		14,125		0
Commercial real estate:
Commercial real estate		936		76		1,028		2,040		181,778		183,818		0
Construction and development		0		20		0		20		25,340		25,360		0
Residential real estate:
Residential – Prime		950		274		1,344		2,568		103,011		105,579		0
Residential – HELOC		64		0		335		399		21,357		21,756		0
Construction and development		0		0		133		133		11,197		11,330		0
Consumer		21		3		15		39		4,676		4,715		0
Totals	$	2,346	$	610	$	4,650	$	7,606	$	477,585	$	485,191	$	0

Schedule of loans on nonaccrual status

The loans on nonaccrual status at December 31, follows:

	2013		2012
Commercial:
Commercial and industrial	$	1,575	$	3,023
Agricultural		152		154
Commercial real estate:
Commercial real estate		4,103		2,001
Construction and development		17		1
Residential real estate:
Residential – Prime		1,059		2,021
Residential – HELOC		387		365
Construction and development		30		133
Consumer		17		17
Totals	$	7,340	$	7,715

Schedule of modifications of troubled debt

The following table presents information concerning modifications of troubled debt made during 2013 and 20112:

					Postmodification
			Premodification		Outstanding
			Outstanding		Recorded
	Number of		Recorded		Investment
As of December 31, 2013	contracts		Investment		at Period-End
Commercial and industrial		7		$1,012		$642
Commercial and real estate		5		587		564
Residential real estate - Prime		5		867		852

The following table outlines past troubled debt restructurings that subsequently defaulted during 2013 when the default occurred within 12 months of the last restructuring date. For purposes of this table, default is defined as 90 days or more past due on restructured payments.

	Number of		Recorded
	Contracts		Investment
Commercial and industrial		1		$ 0
Commercial real estate		1		80
Residential real estate - Prime		1		87

					Postmodification
			Premodification		Outstanding
			Outstanding		Recorded
	Number of		Recorded		Investment
As of December 31, 2012	Contracts		Investment		at Period-End
Commercial and industrial		6		$661		$614
Commercial and real estate		3		603		570
Residential real estate - Prime		1		121		89

The following table outlines past troubled debt restructurings that subsequently defaulted during 2012 when the default occurred within 12 months of the last restructuring date. For purposes of this table, default is defined as 90 days or more past due on restructured payments.

	Number of		Recorded
	Contracts		Investment
Commercial and industrial		2		$  0
Commercial real estate		1		45