Loans, Allowance for Loan Losses, and Credit Quality Indicators (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Loan Classifications

Major classifications of loans, including loans held-for-sale, at December 31 are as follows:

	December 31, 2012			% of gross loans			December 31, 2011			% of gross loans
Real estate secured loans:
Permanent Loans:
Multi-family residential	$	45,212			5.2	%	$	51,897			6.3	%
Residential 1-4 family		51,437			5.9	%		61,717			7.5	%
Owner-occupied commercial		219,276			25.2	%		207,008			25.2	%
Nonowner-occupied commercial		145,315			16.7	%		157,844			19.3	%
Total permanent real estate loans		461,240			53.0	%		478,466			58.3	%
Construction Loans:
Multi-family residential		17,022			2.0	%		2,574			0.3	%
Residential 1-4 family		20,390			2.3	%		17,960			2.2	%
Commercial real estate		23,235			2.7	%		10,901			1.3	%
Commercial bare land and acquisition & development		10,668			1.2	%		19,496			2.4	%
Residential bare land and acquisition & development		8,405			0.9	%		12,707			1.6	%
Total construction real estate loans		79,720			9.1	%		63,638			7.8	%
Total real estate loans		540,960			62.1	%		542,104			66.0	%
Commercial loans		325,604			37.4	%		272,600			33.2	%
Consumer loans		3,581			0.4	%		4,569			0.6	%
Other loans		1,112			0.1	%		1,556			0.2	%
Gross loans		871,257			100.0	%		820,829			100.0	%
Deferred loan origination fees		(841	)					(677	)
		870,416						820,152
Allowance for loan losses		(16,345	)					(14,941	)
Total loans, net of allowance for loan losses and net deferred fees	$	854,071					$	805,211
Loans held-for-sale	$	—					$	1,058

Summary of Allowance for Loan Losses Activity

A summary of the activity in the allowance for loan losses is as follows for the years ended 2012, 2011, and 2010:

	Twelve months ended December 31,
	2012			2011			2010
Balance, beginning of period	$	14,941		$	16,570		$	13,367
Provision charged to income		1,900			12,900			15,000
Loans charged against allowance		(3,664	)		(15,804	)		(15,514	)
Recoveries credited to allowance		3,168			1,275			3,717
Balance, end of period	$	16,345		$	14,941		$	16,570

Summary of Allowance for Credit Losses Activity by Loan Segment

A summary of the activity in the allowance for loan losses by major loan classification follows:

Allowance for Loan Losses and Recorded Investment in Loans Receivable

For the year ended December 31, 2012
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated			Total
Beginning balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707		$	14,941
Charge-offs		(1,401	)		(1,190	)		(1,054	)		(19	)		—			(3,664	)
Recoveries		1,917			55			1,188			8			—			3,168
Provision		554			2,324			(251	)		(6	)		(721	)		1,900
Ending balance	$	3,846		$	9,456		$	1,987		$	70		$	986		$	16,345

	Balances as of December 31, 2012
	Commercial and Other		Real Estate		Construction		Consumer		Unallocated		Total
Ending allowance: collectively evaluated for impairment	$	3,844	$	9,456	$	1,987	$	70	$	986	$	16,343
Ending allowance: individually evaluated for impairment		2		—		—		—		—		2
Total ending allowance	$	3,846	$	9,456	$	1,987	$	70	$	986	$	16,345
Ending loan balance: collectively evaluated for impairment	$	322,677	$	455,206	$	79,619	$	3,581	$	—	$	861,083
Ending loan balance: individually evaluated for impairment		4,039		6,034		101		—		—		10,174
Total ending loan balance	$	326,716	$	461,240	$	79,720	$	3,581	$	—	$	871,257

For the year ended December 31, 2011
	Commercial and Other			Real Estate			Construction			Consumer			Unallocated		Total
Beginning balance	$	2,230		$	10,042		$	3,040		$	64		$	1,194	$	16,570
Charge-offs		(1,403	)		(5,555	)		(8,792	)		(54	)		—		(15,804	)
Recoveries		581			176			498			20			—		1,275
Provision		1,368			3,604			7,358			57			513		12,900
Ending balance	$	2,776		$	8,267		$	2,104		$	87		$	1,707	$	14,941

	Balances as of December 31, 2011
	Commercial and Other		Real Estate		Construction		Consumer		Unallocated		Total
Ending allowance: collectively evaluated for impairment	$	2,776	$	7,812	$	2,104	$	87	$	1,707	$	14,486
Ending allowance: individually evaluated for impairment		—		455		—		—		—		455
Total ending allowance	$	2,776	$	8,267	$	2,104	$	87	$	1,707	$	14,941
Ending loan balance: collectively evaluated for impairment	$	267,099	$	467,426	$	50,548	$	4,569	$	—	$	789,642
Ending loan balance: individually evaluated for impairment		7,057		11,040		13,090		—		—		31,187
Total ending loan balance	$	274,156	$	478,466	$	63,638	$	4,569	$	—	$	820,829

Dental Credit Quality Indicators

The following tables present the Company’s loan portfolio information by loan type and credit grade at December 31, 2012, and December 31, 2011:

Credit Quality Indicators

As of December 31, 2012

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	43,883	$	—	$	1,329	$	—	$	45,212
Residential 1-4 family		43,458		—		7,979		—		51,437
Owner-occupied commercial		208,713		—		10,563		—		219,276
Nonowner-occupied commercial		141,762		—		3,553		—		145,315
Total real estate loans		437,816		—		23,424		—		461,240
Construction
Multi-family residential		17,022		—		—		—		17,022
Residential 1-4 family		20,278		—		112		—		20,390
Commercial real estate		21,646		—		1,589		—		23,235
Commercial bare land and acquisition & development		10,668		—		—		—		10,668
Residential bare land and acquisition & development		5,449		—		2,956		—		8,405
Total construction loans		75,063		—		4,657		—		79,720
Commercial and other		317,250		—		9,466		—		326,716
Consumer		3,544		—		37		—		3,581
Totals	$	833,673	$	—	$	37,584	$	—	$	871,257

As of December 31, 2011

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
Real estate loans
Multi-family residential	$	50,547	$	—	$	1,350	$	—	$	51,897
Residential 1-4 family		51,622		—		10,095		—		61,717
Owner-occupied commercial		194,250		—		11,143		1,615		207,008
Nonowner-occupied commercial		154,805		—		3,039		—		157,844
Total real estate loans		451,224		—		25,627		1,615		478,466
Construction
Multi-family residential		2,574		—		—		—		2,574
Residential 1-4 family		14,036		—		3,924		—		17,960
Commercial real estate		7,075		—		3,826		—		10,901
Commercial bare land and acquisition & development		11,000		—		8,496		—		19,496
Residential bare land and acquisition & development		9,929		—		2,778		—		12,707
Total construction loans		44,614		—		19,024		—		63,638
Commercial and other		264,415		—		9,663		78		274,156
Consumer		4,486		—		83		—		4,569
Totals	$	764,739	$	—	$	54,397	$	1,693	$	820,829

Schedule of Past Due Payments

The Company uses the terms “past due” and “delinquent” interchangeably. Amortizing loans are considered past due or delinquent based upon the number of contractually required payments not made as indicated in the following table:

Number of Payments Past Due	Days Delinquent
2 Payments	30 Days
3 Payments	60 Days
4 Payments	90 Days
5 Payments	120 Days
6 Payments	150 Days
7 Payments	180 Days

Aged Analysis of Dental Loans Receivable

The following tables present an aged analysis of past due and nonaccrual loans at December 31, 2012, and December 31, 2011:

Aged Analysis of Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	45,212	$	45,212
Residential 1-4 family		351		318		—		1,140		1,809		49,628		51,437
Owner-occupied commercial		—		—		—		3,805		3,805		215,471		219,276
Nonowner-occupied commercial		1,404		—		—		—		1,404		143,911		145,315
Total real estate loans		1,755		318		—		4,945		7,018		454,222		461,240
Construction
Multi-family residential		—		—		—		—		—		17,022		17,022
Residential 1-4 family		234		—		—		—		234		20,156		20,390
Commercial real estate		—		—		—		—		—		23,235		23,235
Commercial bare land and acquisition & development		—		—		—		—		—		10,668		10,668
Residential bare land and acquisition & development		—		—		—		101		101		8,304		8,405
Total construction loans		234		—		—		101		335		79,385		79,720
Commercial and other		264		—		—		4,315		4,579		322,137		326,716
Consumer		8		—		—		—		8		3,573		3,581
Total	$	2,261	$	318	$	—	$	9,361	$	11,940	$	859,317	$	871,257

As of December 31, 2011

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
Real estate loans
Multi-family residential	$	—	$	—	$	—	$	—	$	—	$	51,897	$	51,897
Residential 1-4 family		251		210		—		3,426		3,887		57,830		61,717
Owner-occupied commercial		151		190		—		5,138		5,479		201,529		207,008
Nonowner-occupied commercial		—		—		—		575		575		157,269		157,844
Total real estate loans		402		400		—		9,139		9,941		468,525		478,466
Construction
Multi-family residential		—		—		—		—		—		2,574		2,574
Residential 1-4 family		67		—		—		757		824		17,136		17,960
Commercial real estate		1,635		—		—		933		2,568		8,333		10,901
Commercial bare land and acquisition & development		—		—		—		7,837		7,837		11,659		19,496
Residential bare land and acquisition & development		52		175		—		1,929		2,156		10,551		12,707
Total construction loans		1,754		175		—		11,456		13,385		50,253		63,638
Commercial and other		634		—		—		5,999		6,633		267,523		274,156
Consumer		—		—		—		—		—		4,569		4,569
Total	$	2,790	$	575	$	—	$	26,594	$	29,959	$	790,870	$	820,829

Analysis of Impaired Loans

The following tables display an analysis of the Company’s impaired loans at December 31, 2012, and December 31, 2011:

Impaired Loan Analysis

As of December 31, 2012

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Real estate
Multi-family residential	$	—	$	—	$	—	$	—	$	—
Residential 1-4 family		1,447		2,032		—		3,068		—
Owner-occupied commercial		4,229		5,069		—		4,157		21
Nonowner-occupied commercial		358		358		—		153		11
Total real estate loans		6,034		7,459		—		7,378		32
Construction
Multi-family residential		—		—		—		—		—
Residential 1-4 family		—		—		—		544		—
Commercial real estate		—		—		—		1,219		—
Commercial bare land and acquisition & development		—		—		—		5,621		—
Residential bare land and acquisition & development		101		173		—		1,024		—
Total construction loans		101		173		—		8,408		—
Commercial and other		3,921		9,417		—		5,056		2
Consumer		—		—		—		—		—
With an allowance recorded
Real estate
Multi-family residential		—		—		—		—		—
Residential 1-4 family		—		—		—		18		—
Owner-occupied commercial		—		—		—		681		—
Nonowner-occupied commercial		—		—		—		12		—
Total real estate loans		—		—		—		711		—
Construction
Multi-family residential		—		—		—		—		—
Residential 1-4 family		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—		—
Residential bare land and acquisition & development		—		—		—		—		—
Total construction loans		—		—		—		—		—
Commercial and other		118		129		2		148		—
Consumer		—		—		—		—		—
Total
Real estate
Multi-family residential		—		—		—		—		—
Residential 1-4 family		1,447		2,032		—		3,086		—
Owner-occupied commercial		4,229		5,069		—		4,838		21
Nonowner-occupied commercial		358		358		—		165		11
Total real estate loans		6,034		7,459		—		8,089		32
Construction
Multi-family residential		—		—		—		—		—
Residential 1-4 family		—		—		—		544		—
Commercial real estate		—		—		—		1,219		—
Commercial bare land and acquisition & development		—		—		—		5,621		—
Residential bare land and acquisition & development		101		173		—		1,024		—
Total construction loans		101		173		—		8,408		—
Commercial and other		4,039		9,546		2		5,204		2
Consumer		—		—		—		—		—
Total impaired loans	$	10,174	$	17,178	$	2	$	21,701	$	34

Impaired Loan Analysis

As of December 31, 2011

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Real estate
Multi-family residential	$	—	$	—	$	—	$	54	$	—
Residential 1-4 family		4,300		4,756		—		5,785		52
Owner-occupied commercial		3,954		4,295		—		6,220		36
Nonowner-occupied commercial		525		1,011		—		5,052		—
Other real estate loans		431		412		—		729		33
Total real estate loans		9,210		10,474		—		17,840		121
Construction
Multi-family residential		—		—		—		136		—
Residential 1-4 family		757		1,037		—		1,331		—
Commercial real estate		2,568		3,306		—		3,161		111
Commercial bare land and acquisition & development		7,837		13,027		—		12,617		234
Residential bare land and acquisition & development		1,928		5,319		—		2,242		38
Total construction loans		13,090		22,689		—		19,487		383
Commercial and other		7,057		10,691		—		6,137		44
Consumer		—		—		—		—		—
With an allowance recorded
Real estate
Multi-family residential		—		—		—		—		—
Residential 1-4 family		215		248		10		351		—
Owner-occupied commercial		1,615		1,614		445		427		—
Nonowner-occupied commercial		—		—		—		30		—
Other real estate loans		—		—		—		67		—
Total real estate loans		1,830		1,862		455		875		—
Construction
Multi-family residential		—		—		—		—		—
Residential 1-4 family		—		—		—		462		—
Commercial real estate		—		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—		—
Residential bare land and acquisition & development		—		—		—		1,099		—
Total construction loans		—		—		—		1,561		—
Commercial and other		—		—		—		1,391		—
Consumer		—		—		—		—		—
Total
Real estate
Multi-family residential		—		—		—		54		—
Residential 1-4 family		4,515		5,004		10		6,136		52
Owner-occupied commercial		5,569		5,909		445		6,647		36
Nonowner-occupied commercial		525		1,011		—		5,082		—
Other real estate loans		431		412		—		796		33
Total real estate loans		11,040		12,336		455		18,715		121
Construction
Multi-family residential		—		—		—		136		—
Residential 1-4 family		757		1,037		—		1,793		—
Commercial real estate		2,568		3,306		—		3,161		111
Commercial bare land and acquisition & development		7,837		13,027		—		12,617		234
Residential bare land and acquisition & development		1,928		5,319		—		3,341		38
Total construction loans		13,090		22,689		—		21,048		383
Commercial and other		7,057		10,691		—		7,528		44
Consumer		—		—		—		—		—
Total impaired loans	$	31,187	$	45,716	$	455	$	47,291	$	548

Schedule of Troubled Debt Restructurings by Class

The following table displays the Company’s TDRs by class at December 31, 2012, and 2011:

	Troubled Debt Restructurings as of
	December 31, 2012				December 31, 2011
	Number of Contracts		Outstanding Recorded Investment		Number of Contracts		Outstanding Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		8		565		9		2,422
Owner-occupied commercial		5		2,095		3		860
Non owner-occupied commercial		1		140		2		679
Total real estate loans		14		2,800		14		3,961
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		5		101		4		1,804
Total construction loans		5		101		4		1,804
Commercial and other		8		589		3		1,058
Consumer		—		—		—		—
		27	$	3,490		21	$	6,823

Schedule of Non-Covered Restructured Loans

The following tables present newly non-covered restructured loans that occurred during the twelve months ended December 31, 2012 and 2011, respectively:

	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2012
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		—		—		121		—
Owner-occupied commercial		—		112		—		303
Non owner-occupied commercial		—		—		—		—
Total real estate loans		—		112		121		303
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		127		—		—
Total construction loans		—		127		—		—
Commercial and other		—		228		230		69
Consumer		—		—		—		—
	$	—	$	467	$	351	$	372

	Troubled Debt Restructurings
	Identified during the twelve months ended December 31, 2011
	Rate Modification		Term Modification		Interest Only Modification		Combination Modification
Real estate
Multifamily residential	$	—	$	—	$	—	$	—
Residential 1-4 family		140		26		928		1,328
Owner-occupied commercial		—		305		—		555
Non owner-occupied commercial		—		154		—		525
Total real estate loans		140		485		928		2,408
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		—		1,804
Total construction loans		—		—		—		1,804
Commercial and other		—		—		—		634
Consumer		—		—		—		—
	$	140	$	485	$	928	$	4,846

Schedule of Troubled Debt Restructurings that Subsequently Defaulted

The following table presents loans receivable modified as troubled debt restructurings that subsequently defaulted within twelve months during the period:

	Troubled Debt Restructurings That Subsequently Defaulted during the Period Ended December 31,
	2012				2011
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Real estate
Multifamily residential		—	$	—		—	$	—
Residential 1-4 family		2		340		1		738
Owner-occupied commercial		1		411		1		429
Non owner-occupied commercial		—		—		1		525
Total real estate loans		3		751		3		1,692
Construction
Multifamily residential		—		—		—		—
Residential 1-4 family		—		—		—		—
Commercial real estate		—		—		—		—
Commercial bare land and acquisition & development		—		—		—		—
Residential bare land and acquisition & development		—		—		2		442
Total construction loans		—		—		2		442
Commercial and other		1		194		1		634
Consumer		—		—		—		—
		4	$	945		6	$	2,768

Dental Loan [Member]

Dental Credit Quality Indicators

The following tables present the Company’s dental loan portfolio information by market and credit grade at December 31, 2012 and 2011:

Dental Credit Quality Indicators

As of December 31, 2012

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
In Market	$	184,872	$	—	$	7,036	$	—	$	191,908
Out-of-Market		78,480		—		394		—		78,874
Total	$	263,352	$	—	$	7,430	$	—	$	270,782

As of December 31, 2011

	Loan Grade
	Pass		Special Mention		Substandard		Doubtful		Totals
In Market	$	162,435	$	—	$	3,698	$	—	$	166,133
Out-of-Market		42,356		—		—		—		42,356
Total	$	204,791	$	—	$	3,698	$	—	$	208,489

Aged Analysis of Dental Loans Receivable

The following tables present an aged analysis of the dental loans by market, including nonaccrual loans at December 31, 2012, and 2011:

Aged Analysis of Dental Loans Receivable

As of December 31, 2012

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
In Market	$	—	$	—	$	—	$	2,499	$	2,499	$	189,409	$	191,908
Out-of-Market		—		—		—		—		—		78,874		78,874
Total	$	—	$	—	$	—	$	2,499	$	2,499	$	268,283	$	270,782

As of December 31, 2011

	30-59 Days Past Due Still Accruing		60-89 Days Past Due Still Accruing		Greater Than 90 Days Still Accruing		Nonaccrual		Total Past Due and Nonaccrual		Total Current		Total Loans Receivable
In Market	$	634	$	—	$	—	$	744	$	1,378	$	164,755	$	166,133
Out-of-Market		—		—		—		—		—		42,356		42,356
Total	$	634	$	—	$	—	$	744	$	1,378	$	207,111	$	208,489