Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2013

Loans and Allowance for Loan Losses [Abstract]

Allowance for Loan Losses and Recorded Investment in Loans Receivable

	As of and for the Nine Months Ended September 30, 2013
(In thousands)	Commercial and Industrial			Commercial Real Estate			Construction and Land		Consumer			Student		Residential Real Estate			Home Equity Line of Credit			Unallocated		Total
Allowance for Loan Losses
Beginning balance at 12/31/2012	$	932		$	1,685		$	402	$	40		$	-	$	1,691		$	1,336		$	172	$	6,258
Charge-offs		(257	)		(550	)		-		(104	)		-		(82	)		(174	)		-		(1,167	)
Recoveries		59			-			-		23			-		2			6			-		90
Provision		338			1,161			40		64			72		(209	)		(275	)		109		1,300
Ending balance at 9/30/2013	$	1,072		$	2,296		$	442	$	23		$	72	$	1,402		$	893		$	281	$	6,481

Ending balances individually evaluated for impairment	$	219		$	515		$	341	$	-		$	-	$	202		$	-		$	-	$	1,277

Ending balances collectively evaluated for impairment	$	853		$	1,781		$	101	$	23		$	72	$	1,200		$	893		$	281	$	5,204

Loans Receivable
Individually evaluated for impairment	$	481		$	6,868		$	4,130	$	-		$	-	$	2,145		$	98				$	13,722
Collectively evaluated for impairment		24,248			176,434			31,702		3,756			24,578		137,411			43,154					441,283
Ending balance at 9/30/2013	$	24,729		$	183,302		$	35,832	$	3,756		$	24,578	$	139,556		$	43,252				$	455,005

				As of and for the Year Ended December 31, 2012
(In thousands)	Commercial and Industrial			Commercial Real Estate			Construction and Land		Consumer			Student		Residential Real Estate			Home Equity Line of Credit			Unallocated			Total
Allowance for Loan Losses
Beginning balance at 12/31/2011	$	795		$	2,899		$	195	$	31		$	-	$	1,584		$	698		$	526		$	6,728
Charge-offs		(526	)		(5,004	)		-		(117	)		-		(126	)		(536	)		-			(6,309	)
Recoveries		7			9			-		14			-		2			-			-			32
Provision		656			3,781			207		112			-		231			1,174			(354	)		5,807
Ending balance at 12/31/2012	$	932		$	1,685		$	402	$	40		$	-	$	1,691		$	1,336		$	172		$	6,258

Ending balances individually evaluated for impairment	$	428		$	-		$	293	$	-		$	-	$	176		$	112		$	-		$	1,009

Ending balances collectively evaluated for impairment	$	504		$	1,685		$	109	$	40		$	-	$	1,515		$	1,224		$	172		$	5,249

Loans Receivable
Individually evaluated for impairment	$	674		$	9,612		$	4,175	$	4		$	-	$	2,372		$	228					$	17,065
Collectively evaluated for impairment		26,466			183,393			35,870		4,563			4,994		134,218			44,797						434,301
Ending balance at 12/31/2012	$	27,140		$	193,005		$	40,045	$	4,567		$	4,994	$	136,590		$	45,025					$	451,366

Credit Quality Indicators

The Company's allowance for loan losses has three basic components: the specific allowance, the general allowance, and the unallocated components. The specific allowance is used to individually allocate an allowance for larger balance, non-homogeneous loans identified as impaired. The general allowance is used for estimating the loss on pools of smaller-balance, homogeneous loans; including 1-4 family mortgage loans, installment loans and other consumer loans. Also, the general allowance is used for the remaining pool of larger balance, non-homogeneous loans which were not identified as impaired. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodolgies for estimating specific and general losses in the portfolio.

Credit Quality Indicators

			As of September 30, 2013
(In thousands)	Commercial and Industrial		Commercial Real Estate		Construction and Land		Consumer		Student		Residential Real Estate		Home Equity Line of Credit		Total
Grade:
Pass	$	20,965	$	149,331	$	31,702	$	3,749	$	24,578	$	125,485	$	39,399	$	395,209
Special mention		1,332		21,293		-		-		-		6,764		2,751		32,140
Substandard		2,257		12,678		3,994		7		-		6,616		1,102		26,654
Doubtful		175		-		136		-		-		691		-		1,002
Loss		-		-		-		-		-		-		-		-
Total	$	24,729	$	183,302	$	35,832	$	3,756	$	24,578	$	139,556	$	43,252	$	455,005

			As of December 31, 2012
(In thousands)	Commercial and Industrial		Commercial Real Estate		Construction and Land		Consumer		Student		Residential Real Estate		Home Equity Line of Credit		Total
Grade:
Pass	$	21,704	$	152,483	$	35,871	$	4,558	$	4,994	$	120,451	$	40,189	$	380,250
Special mention		2,635		21,455		-		-		-		9,016		2,878		35,984
Substandard		2,391		19,067		4,038		9		-		6,456		1,958		33,919
Doubtful		410		-		136		-		-		667		-		1,213
Loss		-		-		-		-		-		-		-		-
Total	$	27,140	$	193,005	$	40,045	$	4,567	$	4,994	$	136,590	$	45,025	$	451,366

Age Analysis of Past Due Loans Receivable

	As of September 30, 2013
(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Financing Receivables		Carrying Amount > 90 Days and Accruing		Nonaccruals
Commercial and industrial	$	-	$	-	$	162	$	162	$	24,567	$	24,729	$	-	$	386
Commercial real estate		-		-		3,133		3,133		180,169		183,302		-		3,133
Construction and land		61		-		136		197		35,635		35,832		-		136
Consumer		37		-		1		38		3,718		3,756		1		-
Student (U.S. Government guaranteed)		9,399		306		3,629		13,334		11,244		24,578		3,629		-
Residential real estate		593		486		879		1,958		137,598		139,556		-		1,405
Home equity line of credit		27		-		-		27		43,225		43,252		-		-
Total	$	10,117	$	792	$	7,940	$	18,849	$	436,156	$	455,005	$	3,630	$	5,060

	As of December 31, 2012
(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Financing Receivables		Carrying Amount > 90 Days and Accruing		Nonaccruals
Commercial and industrial	$	92	$	52	$	41	$	185	$	26,955	$	27,140	$	-	$	643
Commercial real estate		-		-		7,712		7,712		185,293		193,005		-		7,712
Construction and land		508		250		136		894		39,151		40,045		-		136
Consumer		39		10		5		54		4,513		4,567		1		4
Student (U.S. Government guaranteed)		-		-		-		-		4,994		4,994		-		-
Residential real estate		2,397		397		1,474		4,268		132,322		136,590		-		1,927
Home equity line of credit		1,424		-		311		1,735		43,290		45,025		131		228
Total	$	4,460	$	709	$	9,679	$	14,848	$	436,518	$	451,366	$	132	$	10,650

The Company began purchasing rehabilitated student loans under the Federal Rehabilitated Student Loan Program during the quarter ended December 31, 2012. The repayment of both principal and accrued interest are 98% guaranteed by the U.S. Department of Education. At September 30, 2013, $3.6 million of the student loans were 90 days or more past due and still accruing.

Impaired Loans Receivable

	September 30, 2013
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Commercial and industrial	$	151	$	151	$	-	$	177	$	5
Commercial real estate		4,292		4,292		-		4,302		72
Construction and land		1,997		1,997		-		2,018		76
Student (U.S. Govenment guaranteed)		-		-		-		-		-
Residential real estate		1,217		1,217		-		1,251		12
Home equity line of credit		98		98		-		249		10
Consumer		-		-		-		-		-

With an allowance recorded:
Commercial and industrial	$	330	$	330	$	219	$	344	$	2
Commercial real estate		2,576		2,576		515		2,857		68
Construction and land		2,133		2,133		341		2,134		66
Student (U.S. Government guaranteed)		-		-		-		-		-
Residential real estate		928		928		202		947		13
Home equity line of credit		-		-		-		-		-
Consumer		-		-		-		-		-

Total:
Commercial and industrial	$	481	$	481	$	219	$	521	$	7
Commercial real estate		6,868		6,868		515		7,159		140
Construction and land		4,130		4,130		341		4,152		142
Student (U.S. Government guaranteed)		-		-		-		-		-
Residential real estate		2,145		2,145		202		2,198		24
Home equity line of credit		98		98		-		249		10
Consumer		-		-		-		-		-
Total	$	13,722	$	13,722	$	1,277	$	14,279	$	323

	December 31, 2012
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Commercial and industrial	$	109	$	109	$	-	$	136	$	2
Commercial real estate		9,612		12,523		-		11,613		650
Construction and land		3,711		3,711		-		4,134		200
Student (U.S. Government guaranteed)		-		-		-		-		-
Residential real estate		1,705		1,705		-		1,734		39
Home equity line of credit		47		47		-		47		1
Consumer		4		4		-		5		-

With an allowance recorded:
Commercial and industrial	$	565	$	565	$	428	$	575	$	5
Commercial real estate		-		-		-		-		-
Construction and land		464		464		293		594		21
Student (U.S. Government guaranteed)		-		-		-		-		-
Residential real estate		667		667		176		692		-
Home equity line of credit		181		181		112		180		3
Consumer		-		-		-		-		-

Total:
Commercial and industrial	$	674	$	674	$	428	$	711	$	7
Commercial real estate		9,612		12,523		-		11,613		650
Construction and land		4,175		4,175		293		4,728		221
Student (U.S. Government guaranteed)		-		-		-		-		-
Residential real estate		2,372		2,372		176		2,426		39
Home equity line of credit		228		228		112		227		4
Consumer		4		4		-		5		-
Total	$	17,065	$	19,976	$	1,009	$	19,710	$	921

Troubled Debt Restructurings

	Three Months Ended September 30, 2013						Three Months Ended September 30, 2012
			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
	Number		Outstanding		Outstanding		Number		Outstanding		Outstanding
	of		Recorded		Recorded		of		Recorded		Recorded
(Dollars in thousands)	Contracts		Investment		Investment		Contracts		Investment		Investment
Troubled Debt Restructurings
Commercial and industrial		2	$	292	$	94		1	$	198	$	198
Commercial real estate		-		-		-		1		1,783		1,783
Construction and Land		1		1,673		1,673		1		1,673		1,673
Consumer		-		-		-		-		-		-
Student		-		-		-		-		-		-
Residential real estate		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-

Troubled Debt Restructurings That Subsequently Defaulted												-
Commercial and industrial		-		-		-		-		-		-
Commercial real estate		-		-		-		-		-		-
Construction and Land		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Student		-		-		-		-		-		-
Residential real estate		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-

	Nine Months Ended September 30, 2013						Nine Months Ended September 30, 2012
			Pre-Modification		Post-Modification				Pre-Modification		Post-Modification
	Number		Outstanding		Outstanding		Number		Outstanding		Outstanding
	of		Recorded		Recorded		of		Recorded		Recorded
(Dollars in thousands)	Contracts		Investment		Investment		Contracts		Investment		Investment
Troubled Debt Restructurings
Commercial and industrial		2	$	292	$	94		2	$	435	$	435
Commercial real estate		2		2,010		2,010		2		3,683		3,683
Construction and Land		2		2,481		2,481		4		3,473		3,473
Consumer		-		-		-		-		-		-
Student		-		-		-		-		-		-
Residential real estate		1		300		300		-		-		-
Home equity line of credit		-		-		-		-		-		-

Troubled Debt Restructurings That Subsequently Defaulted
Commercial and industrial		1		237		237		-		-		-
Commercial real estate		-		-		-		-		-		-
Construction and Land		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Student		-		-		-		-		-		-
Residential real estate		-		-		-		-		-		-
Home equity line of credit		-		-		-		-		-		-

Non-performing Assets, Restructured Loans Still Accruing, and Loans Contractually Past Due

(Dollars in thousands)	September 30, 2013			December 31, 2012			September 30, 2012
Non-accrual loans	$	5,060		$	10,650		$	12,428
Other real estate owned		1,406			1,406			1,776
Non-performing corporate bond investments, at fair value		128			325			303
Total non-performing assets		6,594			12,381			14,507
Restructured loans still accruing		8,564			5,556			5,562
Student loans (U.S. Government guaranteed) past due 90 days or more and still accruing		3,629			-			-
Loans past due 90 or more days and still accruing		1			132			248
Total non-performing and other risk assets	$	18,788		$	18,069		$	20,317

Allowance for loan losses to total loans		1.42	%		1.39	%		1.90	%
Non-accrual loans to total loans		1.11	%		2.36	%		2.74	%
Allowance for loan losses to non-accrual loans		128.08	%		58.76	%		69.25	%
Total non-accrual loans and restructured loans still accruing to total loans		2.99	%		3.59	%		3.96	%
Allowance for loan losses to non-accrual loans and restructured loans still accruing		47.57	%		38.62	%		47.84	%
Total non-performing assets to total assets		1.11	%		2.06	%		2.52	%

Restructured loans on non-accrual status are included with non-accrual loans and not with restructured loans in the above table.