7. TROUBLED DEBT RESTRUCTURINGS

6 Months Ended

Jun. 30, 2013

Troubled Debt Restructuring Note, Debtor [Abstract]

TROUBLED DEBT RESTRUCTURINGS

7. TROUBLED DEBT RESTRUCTURINGS

At June 30, 2013, there were 25 loans and leases that were considered to be troubled debt restructurings. Of these loans and leases, 11 were modified and are currently performing (less than ninety days past due) totaling $4,620,000 and 14 are considered nonperforming (and included in the $5,364,000 discussed in Note 6), totaling $3,728,000. Of the 14 TDRs considered nonperforming, seven are current to the modified terms. At December 31, 2012, there were 42 loans and leases that were considered to be troubled debt restructurings. Of these loans and leases, 29 were modified and are currently performing (less than ninety days past due) totaling $14,906,000 and 13 are considered nonperforming (and included in the $5,474,000 discussed in Note 6), totaling $2,461,000. Of the 13 TDRs considered nonperforming, six are current to the modified terms. At June 30, 2013 and December 31, 2012, there were no unfunded commitments on those loans considered troubled debt restructures. See also “Impaired Loans and Leases” in “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The Company has allocated $945,000 and $1,575,000 of specific reserves to loans whose terms have been modified as troubled debt restructurings as of June 30, 2013 and December 31, 2012.

During the six-month period ended June 30, 2013, the terms of four loans were modified as a troubled debt restructuring. The modifications of the terms of these loans were extensions of the maturity date and/or interest rates lower than the original loan rate.

The following table presents loans by class modified as troubled debt restructurings during the three months ended June 30, 2013 (dollars in thousands):

			Pre-		Post-
			Modification		Modification
			Outstanding		Outstanding
	Number		Recorded		Recorded
	of Loans		Investment		Investment
Troubled debt restructurings:
Real estate – commercial		3	$	762	$	722
Total		3	$	762	$	722

The following table presents loans by class modified as troubled debt restructurings during the six months ended June 30, 2013 (dollars in thousands):

			Pre-		Post-
			Modification		Modification
			Outstanding		Outstanding
	Number		Recorded		Recorded
	of Loans		Investment		Investment
Troubled debt restructurings:
Real estate – commercial		4	$	1,200	$	1,160
Total		4	$	1,200	$	1,160

The troubled debt restructurings described above increased the allowance for loan and lease losses by $100,000 and resulted in $40,000 in charge-offs during the six months ended June 30, 2013.

The following table presents loans by class modified as troubled debt restructurings during the three months ended June 30, 2012 (dollars in thousands):

			Pre-		Post-
			Modification		Modification
			Outstanding		Outstanding
	Number		Recorded		Recorded
	of Loans		Investment		Investment
Troubled debt restructurings:
Commercial		4	$	646	$	646
Real estate – commercial		4		1,299		1,299
Real estate – multi-family		1		274		274
Total		9	$	2,219	$	2,219

The following table presents loans by class modified as troubled debt restructurings during the six months ended June 30, 2012 (dollars in thousands):

			Pre-		Post-
			Modification		Modification
			Outstanding		Outstanding
	Number		Recorded		Recorded
	of Loans		Investment		Investment
Troubled debt restructurings:
Commercial		5	$	693	$	693
Real estate – commercial		6		3,509		3,509
Real estate – multi-family		2		539		539
Real estate – residential		3		921		808
Other – agriculture		1		410		410
Other – consumer		2		31		31
Total		19	$	6,103	$	5,990

The troubled debt restructurings described above increased the allowance for loan and lease losses by $96,000 and resulted in charge-offs of $113,000 during the six months ended June 30, 2012.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the period indicated (dollars in thousands):

Six months ended June 30, 2013	Number		Recorded
	of Loans		Investment
Troubled debt restructurings that subsequently defaulted:
Commercial		1	$	513
Total		1	$	513

Three months ended June 30, 2012	Number		Recorded
	of Loans		Investment
Troubled debt restructurings that subsequently defaulted:
Real estate-commercial		2	$	1,097
Consumer		1		5
Total		3	$	1,102

Six months ended June 30, 2012	Number		Recorded
	of Loans		Investment
Troubled debt restructurings that subsequently defaulted:
Real estate – commercial		6	$	2,357
Commercial		1		863
Consumer		1		5
Total		8	$	3,225

There were no payment defaults on troubled debt restructurings within 12 months following the modification for the three months ended June 30, 2013.