INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

INCOME TAXES

Schedule of provision for income taxes included in the statement of operations

	Year Ended December 31,
(in thousands)	2012		2011		2010
Current	$	—	$	—	$	(3,512	)
Deferred	—		—		3,512
Total	$	—	$	—	$	—

Schedule of reconciliation of provision (benefit) for income taxes from statutory tax rates to domestic federal statutory tax rates

	Year Ended December 31,
(in thousands)	2012			2011			2010
Benefit at statutory tax rates	$	(4,662	)	$	(114	)	$	(10,785	)
Add (deduct):
Tax effects of non-taxable income	(1,824		)	(2,288		)	(2,704		)
Non-deductible interest expense	65			98			170
Bank owned life insurance	(235		)	(268		)	(252		)
Change in valuation allowance	6,637			2,568			13,165
Other items, net	19			4			406
Provision for income taxes	$	—		$	—		$	—

Schedule of components of net deferred tax assets (liabilities) included in other assets (liabilities)

	December 31,
(in thousands)	2012			2011
Allowance for loan and lease losses	$	6,603		$	7,299
Deferred compensation	2,517			2,497
Unrealized holding losses on securities available-for-sale	—			2,044
Other-than-temporary impairment	—			577
Other real estate owned valuation	932			1,308
Deferred intangible assets	1,602			1,735
Employee benefits	41			39
Accrued interest	1,441			1,126
AMT tax credits	2,215			2,215
Fixed asset valuation	407			407
Charitable contribution carryover	312			217
Accrued rent expense	213			210
Accrued vacation	51			—
Accrued real estate taxes	14			175
Depreciation	—			13
Net operating loss carryover	18,422			10,104
Gross deferred tax assets	34,770			29,966
Deferred loan origination fees	(34		)	(77		)
Unrealized holding gains on securities available-for-sale	(3,451		)	—
Depreciation	(254		)	—
Gross deferred tax liabilities	(3,739		)	(77		)
Net deferred asset before valuation allowance	31,031			29,889
Valuation allowance	(34,482		)	(27,845		)
Net deferred tax (liabilities) assets	$	(3,451	)	$	2,044