Loans (Tables)

6 Months Ended

Jun. 30, 2013

Loans [Abstract]

Categories of Loans

Categories of loans at June 30, 2013 and December 31, 2012 include:

	June 30,			December 31,
	2013			2012
Commercial
Real estate	$	197,675		$	203,613
Construction and development		15,115			17,462
Other		74,075			67,773
		286,865			288,848
Residential mortgage
One- to four- family		490,415			502,619
Consumer loans
Real estate		102,025			100,516
Auto		15,277			15,572
Boat/RVs		77,559			76,416
Other		5,972			6,598
		200,833			199,102
Total loans		978,113			990,569
Undisbursed loans in process		(6,291	)		(7,418	)
Unamortized deferred loan costs, net		2,431			2,432
Allowance for loan losses		(15,701	)		(16,038	)
Net loans	$	958,552		$	969,545

Non-Accrual Loans Segregated by Class of Loans

Non-accrual loans, segregated by class of loans, as of June 30, 2013 and December 31, 2012 are as follows:

	June 30,		December 31,
	2013		2012
Commercial
Real estate	$	2,571	$	2,450
Construction and development		4,960		5,989
Other		1,452		1,315
Residential Mortgage		7,520		10,791
Consumer
Real estate		1,338		1,656
Auto		25		37
Boat/RV		713		1,076
Other		68		96
	$	18,647	$	23,410

Age Analysis of Past Due Loans Segregated by Class of Loans

An age analysis of Company’s past due loans, segregated by class of loans, as of June 30, 2013 and December 31, 2012 is as follows:

	June 30, 2013
	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Accruing
Commercial
Real estate	$	1,897	$	144	$	2,499	$	4,540	$	193,135	$	197,675	$	-
Construction and development		245		-		4,346		4,591		10,524		15,115		-
Other		911		140		800		1,851		72,224		74,075		-
Residential Mortgage		7,394		1,608		7,074		16,076		474,339		490,415		236
Consumer
Real estate		682		92		951		1,725		100,300		102,025		-
Auto		25		-		4		29		15,248		15,277		-
Boat/RV		1,368		372		179		1,919		75,640		77,559		-
Other		175		8		54		237		5,735		5,972		-
	$	12,697	$	2,364	$	15,907	$	30,968	$	947,145	$	978,113	$	236

	December 31, 2012
													Total Loans
					Greater						Total		> 90 Days
	30-59 Days		60-89 Days		Than 90		Total Past				Loans		and
	Past Due		Past Due		Days		Due		Current		Receivable		Accruing
Commercial
Real Estate	$	1,097	$	992	$	2,350	$	4,439	$	199,174	$	203,613	$	-
Construction  and development		192		-		4,912		5,104		12,358		17,462		-
Other		259		223		735		1,217		66,556		67,773		-
Residential Mortgage		12,487		2,732		8,356		23,575		479,044		502,619		177
Consumer
Real estate		1,302		358		1,119		2,779		97,737		100,516		-
Auto		47		18		15		80		15,492		15,572		-
Boat/RV		1,508		756		497		2,761		73,655		76,416		-
Other		234		21		95		350		6,248		6,598		96
	$	17,126	$	5,100	$	18,079	$	40,305	$	950,264	$	990,569	$	273

Impaired Loans

The following tables present impaired loans for the three and six month periods ended June 30, 2013 and 2012 and the year ended December 31, 2012.

	June 30, 2013
	Recorded Balance		Unpaid Principal Balance			Specific Allowance			Average Investment in Impaired Loans - Quarter			Average Investment in Impaired Loans - YTD			Interest Income Recognized - Quarter			Interest Income Recognized -  YTD
Loans without a specific valuation allowance
Commercial
Real estate	$	3,011		$	4,075		$	-		$	3,503		$	3,762		$	29		$	69
Construction and development		2,890			5,618			-			3,418			3,685			26			34
Other		916			1,216			-			926			942			5			8
Residential Mortgage		2,578			3,517			-			2,722			2,851			19			38
Loans with a specific valuation allowance
Commercial
Real estate		206			206			100			206			207			3			6
Construction and development		3,966			6,127			690			3,975			4,001			2			8
Other		434			634			235			534			660			3			9
Residential Mortgage		306			306			21			307			307			-			3
Total
Commercial
Real estate	$	3,217		$	4,281		$	100		$	3,709		$	3,969		$	32		$	75
Construction and development	$	6,856		$	11,745		$	690		$	7,393		$	7,686		$	28		$	42
Other	$	1,350		$	1,850		$	235		$	1,460		$	1,602		$	8		$	17
Residential Mortgage	$	2,884		$	3,823		$	21		$	3,029		$	3,158		$	19		$	41

	December 31, 2012
							Average
			Unpaid				Investment in		Interest
	Recorded		Principal		Specific		Impaired		Income
	Balance		Balance		Allowance		Loans		Recognized
Loans without a specific valuation allowance
Commercial
Real estate	$	5,341	$	6,354	$	-	$	5,384	$	248
Construction and development		3,632		7,078		-		4,884		30
Other		972		972		-		2,828		117
Residential Mortgage		2,583		3,522		-		3,755		58
Loans with a specific valuation allowance
Commercial
Real estate		208		947		100		211		12
Construction and development		4,639		5,157		959		5,230		78
Other		912		912		257		921		30
Residential Mortgage		834		834		57		654		-
Total
Commercial
Real estate	$	5,549	$	7,301	$	100	$	5,595	$	260
Construction and development	$	8,271	$	12,235	$	959	$	10,114	$	108
Other	$	1,884	$	1,884	$	257	$	3,749	$	147
Residential Mortgage	$	3,417	$	4,356	$	57	$	4,409	$	58

	June 30, 2012
	Recorded Balance		Unpaid Principal Balance			Specific Allowance			Average Investment in Impaired Loans - Quarter			Average Investment in Impaired Loans - YTD			Interest Income Recognized - Quarter			Interest Income Recognized -  YTD
Loans without a specific valuation allowance
Commercial
Real estate	$	5,005		$	7,224		$	-		$	5,765		$	6,165		$	61		$	109
Construction and development		3,082			5,992			-			3,755			4,531			17			33
Other		3,119			3,119			-			3,380			3,679			42			83
Residential Mortgage		3,267			4,355			-			3,579			4,179			20			51
Loans with a specific valuation allowance
Commercial
Real estate		518			518			43			259			173			-			-
Construction and development		6,509			7,050			1,296			6,684			6,742			16			27
Other		1,204			1,204			318			1,212			1,215			13			25
Residential Mortgage		531			531			36			532			534			-			-
Total
Commercial
Real estate	$	5,523		$	7,742		$	43		$	6,024		$	6,338		$	61		$	109
Construction and development	$	9,591		$	13,042		$	1,296		$	10,439		$	11,273		$	33		$	60
Other	$	4,323		$	4,323		$	318		$	4,592		$	4,894		$	55		$	108
Residential Mortgage	$	3,798		$	4,886		$	36		$	4,111		$	4,713		$	20		$	51

Commercial and Retail Credit Exposure Credit Risk Profile by Internal Rating

The following information presents the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of June 30, 2013 and December 31, 2012.

June 30, 2013
Commercial Credit Exposure Credit Risk Profile
Internal Rating	Real estate		Construction and Development		Other
Pass	$	185,175	$	7,663	$	71,812
Special Mention		3,890		1,679		180
Substandard		8,610		5,773		1,476
Doubtful		-		-		607
Total	$	197,675	$	15,115	$	74,075

Retail Credit Exposure Credit Risk Profile
	Mortgage		Consumer
	Residential		Real Estate		Auto		Boat/RV		Other
Pass	$	478,150	$	99,984	$	15,267	$	76,545	$	5,842
Special Mention		1,824		-		-		-		-
Substandard		10,441		2,041		10		1,014		130
Total	$	490,415	$	102,025	$	15,277	$	77,559	$	5,972

December 31, 2012
Commercial Credit Exposure Credit Risk Profile
			Construction
			and
Internal Rating	Real estate		Development		Other
Pass	$	185,794	$	9,314	$	63,413
Special Mention		6,692		172		255
Substandard		11,127		7,976		3,281
Doubtful		-		-		824
Total	$	203,613	$	17,462	$	67,773

Retail Credit Exposure Credit Risk Profile
	Mortgage		Consumer
	Residential		Real Estate		Auto		Boat/RV		Other
Pass	$	486,027	$	97,972	$	15,533	$	75,026	$	6,434
Special Mention		2,012		-		-		-		-
Substandard		14,580		2,544		39		1,390		164
Total	$	502,619	$	100,516	$	15,572	$	76,416	$	6,598

Activity in Allowance for Loan Losses by Portfolio Segment

	Three Months Ended June 30, 2013
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of period	$	9,873		$	3,534		$	2,584		$	15,991
Provision charged to expense		471			184			(105	)		550
Losses charged off		(731	)		(59	)		(180	)		(970
Recoveries		20			3			107			130
Balance, end of period	$	9,633		$	3,662		$	2,406		$	15,701

	Six Months Ended June 30, 2013
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	9,908		$	3,394		$	2,736		$	16,038
Provision charged to expense		671			684			145			1,500
Losses charged off		(968	)		(442	)		(660	)		(2,070	)
Recoveries		22			26			185			233
Balance, end of period	$	9,633		$	3,662		$	2,406		$	15,701
Ending balance:
Individually evaluated for impairment	$	1,025		$	21		$	-		$	1,046
Collectively evaluated for impairment	$	8,608		$	3,641		$	2,406		$	14,655
Loans:
Ending balance
Individually evaluated for impairment	$	11,423		$	2,884		$	-		$	14,307
Collectively evaluated for impairment	$	275,442		$	487,531		$	200,833		$	963,806

	Year Ended December 31, 2012
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	10,602			3,444			2,769			16,815
Provision charged to expense		3,213			1,612			1,200			6,025
Losses charged off		(4,493	)		(1,901	)		(1,608	)		(8,002	)
Recoveries		586			239			375			1,200
Balance, end of period	$	9,908			3,394			2,736			16,038
Ending balance:
Individually evaluated for impairment	$	1,316			57			-			1,373
Collectively evaluated for impairment		8,592			3,337			2,736			14,665
Total allowance for loan losses	$	9,908		$	3,394		$	2,736		$	16,038
Loans:
Ending balance
Individually evaluated for impairment	$	15,704			3,417			-			19,121
Collectively evaluated for impairment		273,144			499,202			199,102			971,448
Total loans	$	288,848		$	502,619		$	199,102		$	990,569

	Three Months Ended June 30, 2012
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	10,244		$	3,471		$	2,919		$	16,634
Provision charged to expense		1,035			625			190			1,850
Losses charged off		(1,649	)		(706	)		(561	)		(2,916	)
Recoveries		374			2			59			435
Balance, end of period	$	10,004		$	3,392		$	2,607		$	16,003

	Six Months Ended June 30, 2012
	Commercial			Mortgage			Consumer			Total
Allowance for loan losses:
Balance, beginning of year	$	10,602		$	3,444		$	2,769		$	16,815
Provision charged to expense		1,425			1,091			684			3,200
Losses charged off		(2,550	)		(1,147	)		(1,086	)		(4,783	)
Recoveries		527			4			240			771
Balance, end of period	$	10,004		$	3,392		$	2,607		$	16,003

Information on Non-Performing Assets

Information on non-performing assets, excluding performing restructured loans, is provided below:

	June 30,
	2013		2012
Non-performing assets
Non-accrual loans	$	18,647	$	24,575
Accruing loans 90 days + past due		236		290
Total non-performing loans		18,883		24,865
Foreclosed real estate		5,603		7,364
Other repossessed assets		456		601
Total non-performing assets	$	24,942	$	32,830

Newly Restructured Loans by Types

The following tables provide detail regarding troubled debts restructured for the three and six month periods ended June 30^th, 2013 and 2012.

Three Months Ended June 30, 2013
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	No. of Loans		Recorded Balance		Recorded Balance
Commercial
Real estate		1	$	1,290	$	1,284
Other		1		113		112
Residential Mortgage		4		185		193
Consumer
Real estate		16		518		524
Boat/RV		3		97		96

Three Months Ended June 30, 2012
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	No. of Loans		Recorded Balance		Recorded Balance
Commercial
Real estate		2	$	518	$	678
Other		2		119		181
Residential Mortgage		10		1,008		1,110
Consumer
Real estate		3		66		67
Auto		1		8		8
Boat/RV		2		48		48
Other		2		15		14

Six Months Ended June 30, 2013
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	No. of Loans		Recorded Balance		Recorded Balance
Commercial
Real estate		2	$	518	$	678
Other		2		119		181
Residential Mortgage		10		1,008		1,110
Consumer
Real estate		3		66		67
Auto		1		8		8
Boat/RV		2		48		48
Other		2		15		14

Six Months Ended June 30, 2012
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	No. of Loans		Recorded Balance		Recorded Balance
Commercial
Real estate		3	$	921	$	1,081
Other		3		216		277
Residential Mortgage		19		1,846		1,972
Consumer
Real estate		10		391		393
Auto		1		8		8
Boat/RV		3		58		58
Other		2		16		15

The impact to the allowance for loan losses due to these modifications was insignificant.

Newly restructured loans by types are as follows:

	Three Months Ended June 30, 2013
		Interest Only			Term	Combination		Total Modification
Commercial
Real estate		$	-	$	-	$	1,284	$	1,284
Other			-		112		-		112
Residential Mortgage			-		-		193		193
Consumer
Real estate			250		81		193		524
Boat/RV			-		91		5		96

	Three Months Ended June 30, 2012
		Interest Only			Term	Combination		Total Modification
Commercial
Real estate		$	-	$	-	$	678	$	678
Other			-		181		-		181
Residential Mortgage			-		71		1,039		1,110
Consumer
Real estate			-		22		45		67
Auto			-		8		-		8
Boat/RV			-		48		-		48
Other			-		8		6		14

Six Months Ended June 30, 2013
	Interest Only			Term	Combination		Total Modification
Commercial
Real estate	$	-	$	-	$	1,334	$	1,334
Other		-		200		635		835
Residential Mortgage		-		-		1,250		1,250
Consumer
Real estate		250		294		209		753
Auto		-		4		18		22
Boat/RV		-		121		5		126
Other		-		-		11		11

Six Months Ended June 30, 2012
	Interest Only			Term	Combination		Total Modification
Commercial
Real estate	$	-	$	403	$	678	$	1,081
Other		-		97		80		277
Residential Mortgage		320		133		1,408		1,861
Consumer
Real estate		-		335		58		393
Auto		-		7		-		7
Boat/RV		-		58		-		58
Other		-		8		7		15

Troubled Debts Restructured Defaulted

The following table provides detail regarding troubled debts restructured in the last twelve months that have defaulted in the six months ended June 30, 2013.  We had not defaults of any loans modified as troubled debt restructurings made for the three months ended June 30, 2013.

Six Months Ended March 31, 2013
			Post-Modification
			Outstanding
	No. of Loans		Recorded Balance
Commercial
Real estate		1	$	518
Other		1		109