8. ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables)

6 Months Ended

Jun. 30, 2013

Allowance For Loans and Lease Losses [Abstract]

Concentration Risk, Credit Risk, Loan Products

June 30, 2013	Credit Risk Profile by Internally Assigned Grade
(dollars in thousands)			Real Estate
	Commercial		Commercial		Multi-family		Construction		Residential
Grade:
Pass	$	23,411	$	137,096	$	8,105	$	2,476	$	12,764
Watch		1,340		14,052		1,169		3,406		3,519
Special mention		553		16,309		431		596		1,292
Substandard		1,508		13,128		510		—		787
Doubtful		242		—		—		—		—
Total	$	27,054	$	180,585	$	10,215	$	6,478	$	18,362

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

Concentration Risk, Other Risk

	Credit Risk Profile by Internally Assigned Grade Other Credit Exposure
	Leases		Agriculture		Consumer		Total
Grade:
Pass	$	1,172	$	2,810	$	6,343	$	194,177
Watch		—		—		25		23,511
Special mention		—		397		130		19,708
Substandard		—		—		133		16,066
Doubtful		—		—		—		242
Total	$	1,172	$	3,207	$	6,631	$	253,704

	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

Schedule of allowance for loan and lease losses by portfolio segment and by impairment methodology

June 30, 2013
(dollars in thousands)				Real Estate												Other
	Com- mercial			Com- mercial			Multi- Family			Construc- tion			Residential			Leases		Agri- culture		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		(158	)		402			9			(172	)		115			—		4		(87	)		87			200
Loans charged off		(11	)		(355	)		—			—			(38	)		—		—		(5	)		—			(409	)
Recoveries		97			11			—			—			—			—		—		—			—			108
Ending balance, June 30, 2013	$	1,279		$	2,584		$	247		$	422		$	554		$	3	$	91	$	170		$	330		$	5,680
Ending balance:
Individually evaluated for impairment	$	543		$	593		$	118		$	—		$	217		$	—	$	—	$	24		$	—		$	1,495
Ending balance:
Collectively evaluated for impairment	$	736		$	1,991		$	129		$	422		$	337		$	3	$	91	$	146		$	330		$	4,185
Loans
Ending balance	$	27,054		$	180,585		$	10,215		$	6,478		$	18,362		$	1,172	$	3,207	$	6,631		$	—		$	253,704
Ending balance:
Individually evaluated for impairment	$	2,258		$	13,883		$	1,665		$	256		$	2,370		$	—	$	—	$	171		$	—		$	20,603
Ending balance:
Collectively evaluated for impairment	$	24,796		$	166,702		$	8,550		$	6,222		$	15,992		$	1,172	$	3,207	$	6,460		$	—		$	233,101
Allowance for Loan and Lease Losses
Beginning balance, March 31, 2013	$	1,331		$	2,667		$	256		$	430		$	501		$	3	$	91	$	249		$	375		$	5,903
Provision for loan losses		(74	)		262			(9	)		(8	)		53			—		—		(79	)		(45	)		100
Loans charged off		(1	)		(355	)		—			—			—			—		—		—			—			(356	)
Recoveries		23			10			—			—			—			—		—		—			—			33
Ending balance, June 30, 2013	$	1,279		$	2,584		$	247		$	422		$	554		$	3	$	91	$	170		$	330		$	5,680

December 31, 2012                                                            

(dollars in thousands)

			Real Estate								Other
	Com- mercial		Com- mercial		Multi- Family		Construc- tion		Residential		Leases		Agri- culture		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

June 30, 2012
(dollars in thousands)				Real Estate												Other
	Com- mercial			Com- mercial			Multi- Family			Construc- tion			Residential			Leases			Agri- culture			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		(320	)		703			70			(151	)		6			(76	)		241			510			(28	)		955
Loans charged off		(151	)		(845	)		(8	)		(82	)		(113	)		(8	)		(202	)		(492	)					(1,901	)
Recoveries		—			65			3			22			—			6			—			10						106
Ending balance, June 30, 2012	$	1,065		$	3,079		$	263		$	371		$	502		$	1		$	206		$	376		$	338		$	6,201
Allowance for Loan and Lease Losses
Beginning balance, March 31, 2012	$	945		$	2,959		$	296		$	467		$	713		$	7		$	254		$	373		$	251		$	6,265
Provision for loan losses		223			333			(32	)		(40	)		(211	)		(12	)		(48	)		75			87			375
Loans charged off		(103	)		(234	)		—			(78	)		—			—			—			(82	)		—			(497	)
Recoveries		—			21			(1	)		22			—			6-			—			10			—			58
Ending balance, June 30, 2012	$	1,065		$	3,079		$	263		$	371		$	502		$	1		$	206		$	376		$	338		$	6,201

Scheule of analysis of the loan and lease portfolio

June 30, 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	$	10	$	29	$	1,702	$	1,741	$	25,313	$	27,054		—	$	1,744
Real estate:
Commercial		2,012		—		195		2,207		178,378		180,585		—		3,283
Multi-family		—		—		—		—		10,215		10,215		—		—
Construction		—		—		—		—		6,478		6,478		—		—
Residential		—		—		173		173		18,189		18,362		—		173
Other:
Leases		—		—		—		—		1,172		1,172		—		—
Agriculture		—		—		—		—		3,207		3,207		—		—
Consumer		2		99		—		101		6,530		6,631		—		164
Total	$	2,024	$	128	$	2,070	$	4,222	$	249,482	$	253,704	$	—	$	5,364

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