8. ALLOWANCE FOR LOAN AND LEASE LOSSES

3 Months Ended

Mar. 31, 2013

Allowance For Loans and Lease Losses [Abstract]

ALLOWANCE FOR LOAN AND LEASE LOSSES

8. ALLOWANCE FOR LOAN AND LEASE LOSSES 

The Company’s loan and lease portfolio allocated by management’s internal risk ratings as of March 31, 2013 and December 31, 2012 are summarized below: 

March 31, 2013	Credit Risk Profile by Internally Assigned Grade
(dollars in thousands)			Real Estate
	Commercial		Commercial		Multi-family		Construction		Residential
Grade:
Pass	$	23,187	$	134,145	$	8,188	$	2,262	$	14,675
Watch		1,666		13,953		1,175		3,068		2,366
Special mention		578		14,324		436		602		1,152
Substandard		1,650		14,500		512		—		695
Doubtful		246		—		—		—		—
Total	$	27,327	$	176,922	$	10,311	$	5,932	$	18,888

	Credit Risk Profile by Internally Assigned Grade Other Credit Exposure
	Leases		Agriculture		Consumer		Total
Grade:
Pass	$	1,332	$	2,928	$	6,340	$	193,057
Watch		—		—		598		22,826
Special mention		—		399		194		17,685
Substandard		1		—		456		17,814
Doubtful		—		—		—		246
Total	$	1,333	$	3,327	$	7,588	$	251,628

December 31, 2012	Credit Risk Profile by Internally Assigned Grade
(dollars in thousands)			Real Estate
		Commercial		Commercial		Multi-family		Construction		Residential
Grade:
Pass	$	25,670	$	134,969	$	7,018	$	3,049	$	13,283
Watch		1,994		14,613		1,181		3,262		2,518
Special mention		653		16,041		441		607		1,163
Substandard		1,804		14,503		515		—		737
Doubtful		690		—		—		—		—
Total	$	30,811	$	180,126	$	9,155	$	6,918	$	17,701

	Credit Risk Profile by Internally Assigned Grade Other Credit Exposure
	Leases		Agriculture		Consumer		Total
Grade:
Pass	$	1,506	$	2,938	$	7,696	$	196,129
Watch		—		—		251		23,819
Special mention		—		402		153		19,460
Substandard		3		—		469		18,031
Doubtful		—		—		—		690
Total	$	1,509	$	3,340	$	8,569	$	258,129

The allocation of the Company’s allowance for loan and lease losses and by portfolio segment and by impairment methodology are summarized below:

March 31, 2013
(dollars in thousands)				Real Estate										Other
	Commercial			Commercial		Multi-Family		Construction			Residential			Leases		Agriculture		Consumer			Unallocated		Total
Allowance for Loan and Lease Losses
Beginning balance, January 1, 2013	$	1,351		$	2,526	$	238	$	594		$	477		$	3	$	87	$	262		$	243	$	5,781
Provision for loan losses		(84	)		140		18		(164	)		62			—		4		(8	)		132		100
Loans charged-off		(10	)		—		—		—			(38	)		—		—		(5	)				(53	)
Recoveries		74			1		—		—			—			—		—		—					75
Ending balance, March 31, 2013	$	1,331		$	2,667	$	256	$	430		$	501		$	3	$	91	$	249		$	375	$	5,903
Ending balance:
Individually evaluated for impairment	$	542		$	871	$	125	$	—		$	165		$	—	$	—	$	30		$	—	$	1,733
Ending balance:
Collectively evaluated for impairment	$	789		$	1,796	$	131	$	430		$	336		$	3	$	91	$	219		$	375	$	4,170
Loans
Ending balance	$	27,327		$	176,922	$	10,311	$	5,932		$	18,888		$	1,333	$	3,327	$	7,588		$	—	$	251,628
Ending balance:
Individually evaluated for impairment	$	2,390		$	17,531	$	1,673	$	259		$	2,382		$	—	$	—	$	242		$	—	$	24,477
Ending balance:
Collectively evaluated for impairment	$	24,937		$	159,391	$	8,638	$	5,673		$	16,506		$	1,333	$	3,327	$	7,346		$	—	$	227,151

December 31, 2012
(dollars in thousands)			Real Estate								Other
	Commercial		Commercial		Multi-Family		Construction		Residential		Leases		Agriculture		Consumer		Unallocated		Total
Ending balance:
Individually evaluated for impairment	$	480	$	786	$	122	$	—	$	179	$	—	$	—	$	28	$	—	$	1,595
Ending balance:
Collectively evaluated for impairment	$	871	$	1,740	$	116	$	594	$	298	$	3	$	87	$	234	$	243	$	4,186
Loans
Ending balance	$	30,811	$	180,126	$	9,155	$	6,918	$	17,701	$	1,509	$	3,340	$	8,569	$	—	$	258,129
Ending balance:
Individually evaluated for impairment	$	2,828	$	19,105	$	1,681	$	263	$	2,429	$	—	$	—	$	247	$	—	$	26,553
Ending balance:
Collectively evaluated for impairment	$	27,983	$	161,021	$	7,474	$	6,655	$	15,272	$	1,509	$	3,340	$	8,322	$	—	$	231,576

March 31, 2012
(dollars in thousands)				Real Estate												Other
	Commercial			Commercial			Multi-Family			Construction			Residential			Leases			Agriculture			Consumer			Unallocated			Total
Allowance for Loan and Lease Losses
Beginning balance, January 1, 2012	$	1,536		$	3,156		$	198		$	582		$	609		$	79		$	167		$	348		$	366		$	7,041
Provision for loan losses		(543	)		370			102			(111	)		217			(64	)		289			435			(115	)		580
Loans charged-off		(48	)		(611	)		(8	)		(4	)		(113	)		(8	)		(202	)		(410	)					(1,404	)
Recoveries		—			44			4			—			—			—			—			—						48
Ending balance, March 31, 2012	$	945		$	2,959		$	296		$	467		$	713		$	7		$	254		$	373		$	251		$	6,265

The Company’s aging analysis of the loan and lease portfolio at March 31, 2013 and December 31, 2012 are summarized below: 

March 31, 2013													Past Due
(dollars in thousands)					Past Due								Greater Than
	30-59 Days		60-89 Days		Greater Than		Total Past						90 Days and
	Past Due		Past Due		90 Days		Due		Current		Total Loans		Accruing		Nonaccrual
Commercial:
Commercial	$	7	$	—	$	1,771	$	1,778	$	25,549	$	27,327		—	$	1,822
Real estate:
Commercial		2,115		—		633		2,748		174,174		176,922		—		2,600
Multi-family		—		—		—		—		10,311		10,311		—		—
Construction		—		—		—		—		5,932		5,932		—		—
Residential		571		—		172		743		18,145		18,888		—		172
Other:
Leases		—		—		1		1		1,332		1,333		—		1
Agriculture		—		—		—		—		3,327		3,327		—		—
Consumer		225		45		67		337		7,251		7,588		—		216
Total	$	2,918	$	45	$	2,644	$	5,607	$	246,021	$	251,628	$	—	$	4,811

December 31, 2012													Past Due
(dollars in thousands)					Past Due								Greater Than
	30-59 Days		60-89 Days		Greater Than		Total Past						90 Days and
	Past Due		Past Due		90 Days		Due		Current		Total Loans		Accruing		Nonaccrual
Commercial:
Commercial	$	804	$	—	$	1,497	$	2,301	$	28,510	$	30,811		—	$	2,352
Real estate:
Commercial		—		703		700		1,403		178,723		180,126		—		2,687
Multi-family		—		—		—		—		9,155		9,155		—		—
Construction		—		—		—		—		6,918		6,918		—		—
Residential		—		—		210		210		17,491		17,701		—		210
Other:
Leases		—		—		3		3		1,506		1,509		—		3
Agriculture		—		—		—		—		3,340		3,340		—		—
Consumer		—		60		114		174		8,395		8,569		—		222
Total	$	804	$	763	$	2,524	$	4,091	$	254,038	$	258,129	$	—	$	5,474