MORTGAGE SERVICING ACTIVITIES AND MORTGAGE BANKING INCOME (Tables)

12 Months Ended

Dec. 31, 2012

MORTGAGE SERVICING ACTIVITIES AND MORTGAGE BANKING INCOME [Abstract]

There are no restrictions on the Company's consolidated assets or liabilities related to loans sold with servicing rights retained. Upon sale of these loans, the Company recorded MSR, and has elected to account for the MSR under the "amortization method" prescribed under GAAP. Activity related to MSR is as follows:

	At or for the Year Ended December 31,
	2012			2011			2010
MSR Activity
Balance at beginning of period	$	1,604		$	2,271		$	2,765
Additions for loans sold during the period		55			-			284
Reversal of valuation reserve		-			-			-
Amortization		(544	)		(667	)		(778	)
Balance at period end	$	1,115		$	1,604		$	2,271

Key Economic Assumptions Used to Value the MSR and the Sensitivity of the Current Fair Value of Residual Cash Flows to Immediate 10 and 20 Percent Adverse Changes in Assumptions

Key economic assumptions used to value the MSR and the sensitivity of the current fair value of residual cash flows to immediate 10 and 20 percent adverse changes in those assumptions were as follows:

	At December 31, 2012			At December 31, 2011			At December 31, 2010
Net carrying value of the servicing asset	$	1,115		$	1,604		$	2,271
Fair value of the servicing asset		1,511			2,139			2,840
Weighted average life (in years)		5.52			6.30			6.00
Prepayment speed assumptions (annual rate) ("PSA")	150 PSA			150 PSA			150 PSA
Impact on fair value of 10% adverse change	$	(21	)	$	(30	)	$	(43	)
Impact on fair value of 20% adverse change	$	(41	)	$	(59	)	$	(86	)
Expected credit losses (annual rate)	$	13		$	13		$	13
Impact on fair value of 10% adverse change	$	-		$	(1	)	$	-
Impact on fair value of 20% adverse change	$	-		$	(2	)	$	-
Residual cash flows discount rate (annual rate)		13.75	%		13.75	%		13.75	%
Impact on fair value of 10% adverse change	$	(26	)	$	(39	)	$	(54	)
Impact on fair value of 20% adverse change	$	(50	)	$	(76	)	$	(106	)
Average Interest rate on adjustable rate loans		5.59	%		5.84	%		5.81	%
Impact on fair value of 10% adverse change		-			-			-
Impact on fair value of 20% adverse change		-			-			-

Net Mortgage Banking Income Presented in the Consolidated Statements of Operations

Net mortgage banking income presented in the consolidated statements of operations was comprised of the following items:

	Year Ended December 31,
	2012		2011		2010
Gain on the sale of loans originated for sale	$	68	$	5	$	439
Credit to reduce the liability for the First Loss Position		1,286	‑		‑
Mortgage banking fees		414		564		630
Reversal of valuation reserve on MSR	‑		‑		‑
Net mortgage banking income	$	1,768	$	569	$	1,069

- Definition

Tabular disclosure of a sensitivity analysis or stress test showing the hypothetical effect on the fair value of the transferor's interests in transferred financial assets (including any servicing assets or servicing liabilities) of two or more unfavorable variations from the expected levels for each key assumption that is reported, independently determined from any change in another key assumption, and a description of the objectives, methodology, and limitations of the sensitivity analysis or stress test.

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- Definition

Tabular disclosure of the activity in the balance of servicing assets (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (for instance, through purchases of servicing assets), disposals, changes in fair value during the period resulting from changes in inputs or assumptions used in the valuation model, other changes in fair value along with a description of those changes, and other changes that affect the balance along with a description of those changes.

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