10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2014

Commission File No. 001-33037

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.

(Exact name of registrant as specified in its charter)

Virginia	20-1417448
(State or other jurisdiction	(I.R.S. Employer Identification No.)
of incorporation or organization)

6830 Old Dominion Drive

McLean, Virginia 22101

(Address of principal executive offices) (zip code)

(703) 893-7400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

YES x                 NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES x                 NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b–2 of the Exchange Act:

Large accelerated filer   o                    Accelerated filer  x                         Smaller reporting company  o

Non-accelerated filer    o  (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o   No x

As of May 2, 2014, there were 11,607,612 shares of common stock outstanding.

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.

FORM 10-Q

March 31, 2014

INDEX

		PAGE
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
	Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013	2
	Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2014 and 2013	3
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2014	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013	5
	Notes to Consolidated Financial Statements	6- 24
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		25- 35
Item 3 – Quantitative and Qualitative Disclosures about Market Risk		36-39
Item 4 – Controls and Procedures		40
PART II - OTHER INFORMATION
Item 1 – Legal Proceedings		40
Item 1A – Risk Factors		40
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 3 – Defaults Upon Senior Securities		40
Item 4 – Mine Safety Disclosures		40
Item 5 – Other Information		40
Item 6 - Exhibits		41
Signatures		42
Certifications		43-45

ITEM I - FINANCIAL INFORMATION
PART I - FINANCIAL STATEMENTS
SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts) (Unaudited)
	March 31,			December 31,
	2014			2013
ASSETS
Cash and cash equivalents:
Cash and due from financial institutions	$	3,710		$	2,679
Interest-bearing deposits in other financial institutions		15,672			18,177
Total cash and cash equivalents		19,382			20,856
Securities available for sale, at fair value		2,135			1,993
Securities held to maturity, at amortized cost (fair value of $82,631 and $76,193, respectively)		86,106			82,443
Covered loans		50,335			51,701
Non-covered loans		488,714			494,357
Total loans		539,049			546,058
Less allowance for loan losses		(7,356	)		(7,090	)
Net loans		531,693			538,968
Stock in Federal Reserve Bank and Federal Home Loan Bank		4,793			5,915
Bank premises and equipment, net		6,260			6,324
Goodwill		9,160			9,160
Core deposit intangibles, net		768			813
FDIC indemnification asset		5,066			5,804
Bank-owned life insurance		20,514			18,374
Other real estate owned		13,755			11,792
Deferred tax assets, net		8,130			8,281
Other assets		5,466			5,462
Total assets	$	713,228		$	716,185
LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest-bearing demand deposits	$	46,975		$	44,643
Interest-bearing deposits:
NOW accounts		22,457			24,297
Money market accounts		127,445			130,855
Savings accounts		17,410			16,999
Time deposits		342,004			323,565
Total interest-bearing deposits		509,316			495,716
Total deposits		556,291			540,359
Securities sold under agreements to repurchase and other short-term borrowings		19,727			39,795
Federal Home Loan Bank (FHLB) advances		25,000			25,000
Other liabilities		4,563			4,417
Total liabilities		605,581			609,571
Commitments and contingencies (See Note 5)		-			-
Stockholders’ equity:
Preferred stock, $.01 par value.  Authorized 5,000,000 shares; no shares issued and outstanding		-			-
Common stock, $.01 par value.  Authorized 45,000,000 shares; issued and outstanding, 11,594,912 shares at March 31, 2014 and 11,590,612 at December 31, 2013		116			116
Additional paid in capital		97,234			97,127
Retained earnings		13,392			12,561
Accumulated other comprehensive loss		(3,095	)		(3,190	)
Total stockholders’ equity		107,647			106,614
Total liabilities and stockholders’ equity	$	713,228		$	716,185
See accompanying notes to consolidated financial statements.

2

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(dollars in thousands, except per share amounts) (Unaudited)
	For the Three Months Ended
	March 31,
	2014			2013
Interest and dividend income :
Interest and fees on loans	$	7,756		$	8,343
Interest and dividends on taxable securities		513			530
Interest and dividends on tax exempt securities		92			38
Interest and dividends on other earning assets		280			112
Total interest and dividend income		8,641			9,023
Interest expense:
Interest on deposits		896			1,100
Interest on borrowings		158			153
Total interest expense		1,054			1,253
Net interest income		7,587			7,770
Provision for loan losses		1,175			1,093
Net interest income after provision for loan losses		6,412			6,677
Noninterest income:
Account maintenance and deposit service fees		178			193
Income from bank-owned life insurance		140			149
Gain on other assets		202			-
Net gain on sale of available for sale securities		-			142
Total other-than-temporary impairment losses (OTTI)		(16	)		(3	)
Portion of OTTI recognized in other comprehensive income (before taxes)		-			-
Net credit related OTTI recognized in earnings		(16	)		(3	)
Other		37			55
Total noninterest income		541			536
Noninterest expenses:
Salaries and benefits		2,389			2,246
Occupancy expenses		772			760
Furniture and equipment expenses		187			156
Amortization of core deposit intangible		45			123
Virginia franchise tax expense		116			127
Merger expenses		213			-
FDIC assessment		125			234
Data processing expense		126			148
Telephone and communication expense		178			178
Change in FDIC indemnification asset		124			130
Net (gain)  loss on other real estate owned		(419	)		56
Other operating expenses		663			793
Total noninterest expenses		4,519			4,951
Income before income taxes		2,434			2,262
Income tax expense		792			736
Net income	$	1,642		$	1,526
Other comprehensive income (loss):
Unrealized gain (loss) on available for sale securities	$	143		$	(1	)
Realized amount on securities sold, net		-			(142	)
Non-credit component of other-than-temporary impairment on held-to-maturity securities		21			97
Accretion of amounts previously recorded upon transfer to held-to-maturity from available-for-sale		(20	)		(8	)
Net unrealized gain (loss)		144			(54	)
Tax effect		(49	)		18
Other comprehensive income (loss)		95			(36	)
Comprehensive income	$	1,737		$	1,490
Earnings per share, basic and diluted	$	0.14		$	0.13
See accompanying notes to consolidated financial statements.

3

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2014
(dollars in thousands, except per share amounts) (Unaudited)
								Accumulated
			Additional					Other
	Common		Paid in		Retained			Comprehensive
	Stock		Capital		Earnings			Loss			Total
Balance - December 31, 2013	$	116	$	97,127	$	12,561		$	(3,190	)	$	106,614
Comprehensive income:
Net income						1,642						1,642
Change in unrealized loss  on securities available for sale (net of tax benefit, $49)									94			94
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax, $0 and accretion, $20 and amounts recorded into other comprehensive income at transfer)									1			1
Dividends on common stock ($.07 per share)						(811	)					(811	)
Issuance of common stock under Stock Incentive Plan (4,300 shares)				30								30
Stock-based compensation expense				77								77
Balance - March 31, 2014	$	116	$	97,234	$	13,392		$	(3,095	)	$	107,647
See accompanying notes to consolidated financial statements.

4

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013
(dollars in thousands) (Unaudited)
	2014			2013
Operating activities:
Net income	$	1,642		$	1,526
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation		172			167
Amortization of core deposit intangible		45			123
Other amortization, net		47			105
Accretion of loan discount		(706	)		(775	)
Amortization of FDIC indemnification asset		124			130
Provision for loan losses		1,175			1,093
Earnings on bank-owned life insurance		(140	)		(149	)
Stock based compensation expense		77			64
Net gain on sale of available for sale securities		-			(142	)
Impairment on securities		16			3
Net (gain) loss on other real estate owned		(419	)		56
Net decrease in other assets		121			286
Net increase (decrease) in other liabilities		146			(492	)
Net cash and cash equivalents provided by operating activities		2,300			1,995
Investing activities:
Proceeds from sales of available for sale securities		-			159
Purchases of  held to maturity securities		(5,000	)		(6,241	)
Proceeds from paydowns, maturities and calls of held to maturity securities		1,320			8,353
Loan originations and payments, net		2,397			17,823
Purchase of bank-owned life insurance		(2,000	)		-
Net decrease in stock in Federal Reserve Bank and Federal Home Loan Bank		1,122			1,197
Payments received on FDIC indemnification asset		638			17
Proceeds from sale of other real estate owned		2,778			2,013
Purchases of bank premises and equipment		(112	)		(19	)
Net cash and cash equivalents provided by investing activities		1,143			23,302
Financing activities:
Net increase in deposits		15,932			8,396
Cash dividends paid - common stock		(811	)		(580	)
Issuance of common stock under Stock Incentive Plan		30			-
Net decrease in securities sold under agreement to repurchase and other short-term borrowings		(20,068	)		(17,800	)
Net cash and cash equivalents used in financing activities		(4,917	)		(9,984	)
Increase (decrease) in cash and cash equivalents		(1,474	)		15,313
Cash and cash equivalents at beginning of period		20,856			39,200
Cash and cash equivalents at end of period	$	19,382		$	54,513
Supplemental disclosure of cash flow information
Cash payments for:
Interest	$	1,035		$	1,201
Income taxes		918			1,363
Supplemental schedule of noncash investing and financing activities
Transfer from non-covered loans to other real estate owned		4,409			312
Transfer from covered loans to other real estate owned		-			1,831
See accompanying notes to consolidated financial statements.

5

SOUTHERN NATIONAL BANCORP OF VIRGINIA, INC.

Notes to Consolidated Financial Statements (Unaudited)

March 31, 2014

1.         ACCOUNTING POLICIES

Southern National Bancorp of Virginia, Inc. (“Southern National” or “SNBV”) is a corporation formed on July 28, 2004 under the laws of the Commonwealth of Virginia and is the holding company for Sonabank (“Sonabank”) a Virginia state chartered bank which commenced operations on April 14, 2005.  The principal activities of Sonabank are to attract deposits and originate loans as permitted under applicable banking regulations.  Sonabank operates 15 branches in Virginia located in Fairfax County (Reston, McLean and Fairfax), in Charlottesville, Warrenton (2), Loudoun County (Middleburg, Leesburg (2), and South Riding), Front Royal, New Market, Richmond, Haymarket and Clifton Forge, and five branches in Maryland (four in Montgomery County and one in Frederick County).

The consolidated financial statements include the accounts of Southern National Bancorp of Virginia, Inc. and its subsidiary.  Significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“U. S. GAAP”) for interim financial information and instructions for Form 10-Q and follow general practice within the banking industry.  Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by U. S. GAAP for complete financial statements.  However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in Southern National’s Form 10-K for the year ended December 31, 2013.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U. S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the carrying value of investment securities, other than temporary impairment of investment securities, the valuation of goodwill and intangible assets, the FDIC indemnification asset,  mortgage servicing rights, other real estate owned and deferred tax assets.

Recent Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-04, “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” The objective of this guidance is to clarify when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Southern National’s Consolidated Financial Statements.

6

2. STOCK- BASED COMPENSATION

In 2004, the Board of Directors adopted a stock option plan that authorized the reservation of up to 302,500 shares of common stock and provided for the granting of stock options to certain directors, officers and employees.  As of March 31, 2014, options to purchase an aggregate of 302,500 shares of common stock were outstanding and no shares remained available for issuance. The 2010 Stock Awards and Incentive Plan was approved by the Board of Directors in January 2010 and approved by the stockholders at the Annual Meeting in April 2010. The 2010 plan authorized the reservation of 700,000 shares of common stock for the granting of stock awards. The options granted to officers and employees are incentive stock options and the options granted to non-employee directors are non-qualified stock options.  The purpose of the plan is to afford key employees an incentive to remain in the employ of Southern National and to assist in the attracting and retaining of non-employee directors by affording them an opportunity to share in Southern National’s future success.  Under the plan, the option’s price cannot be less than the fair market value of the stock on the grant date.  The maximum term of the options is ten years and options granted may be subject to a graded vesting schedule.

Southern National granted no options during the first three months of 2014.

For the three months ended March 31, 2014 and 2013, stock-based compensation expense was $77 thousand and $64 thousand, respectively.  As of March 31, 2014, unrecognized compensation expense associated with the stock options was $854 thousand, which is expected to be recognized over a weighted average period of 3.4 years.

A summary of the activity in the stock option plan during the three months ended March 31, 2014 follows (dollars in thousands):

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
				Exercise		Contractual		Value
	Shares			Price		Term		(in thousands)
Options outstanding, beginning of period		631,075		$	8.21
Granted		-			-
Forfeited		-			-
Exercised		(4,300	)		6.87
Options outstanding, end of period		626,775		$	8.22		5.8	$	1,248
Vested or expected to vest		626,775		$	8.22		5.8	$	1,248
Exercisable at end of period		367,275		$	8.19		3.9	$	749

7

3.         SECURITIES

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows (in thousands):

	Amortized		Gross Unrealized					Fair
March 31, 2014	Cost		Gains		Losses			Value
Obligations of states and political subdivisions	$	2,300	$	-	$	(165	)	$	2,135
	Amortized		Gross Unrealized					Fair
December 31, 2013	Cost		Gains		Losses			Value
Obligations of states and political subdivisions	$	2,302	$	-	$	(309	)	$	1,993

The amortized cost, unrecognized gains and losses, and fair value of securities held to maturity were as follows (in thousands):

	Amortized		Gross Unrecognized					Fair
March 31, 2014	Cost		Gains		Losses			Value
Residential government-sponsored mortgage-backed securities	$	24,722	$	680	$	(172	)	$	25,230
Residential government-sponsored collateralized mortgage obligations		4,101		-		(60	)		4,041
Government-sponsored agency securities		34,972		41		(2,910	)		32,103
Obligations of states and political subdivisions		14,360		28		(555	)		13,833
Other residential collateralized mortgage obligations		645		-		-			645
Trust preferred securities		7,306		1,241		(1,768	)		6,779
	$	86,106	$	1,990	$	(5,465	)	$	82,631

	Amortized		Gross Unrecognized					Fair
December 31, 2013	Cost		Gains		Losses			Value
Residential government-sponsored mortgage-backed securities	$	25,609	$	673	$	(294	)	$	25,988
Residential government-sponsored collateralized mortgage obligations		4,295		2		(349	)		3,948
Government-sponsored agency securities		29,971		-		(3,994	)		25,977
Obligations of states and political subdivisions		14,388		-		(987	)		13,401
Other residential collateralized mortgage obligations		659		-		(12	)		647
Trust preferred securities		7,521		939		(2,228	)		6,232
	$	82,443	$	1,614	$	(7,864	)	$	76,193

The amortized cost amounts are net of recognized other than temporary impairment.

The fair value and carrying amount, if different, of debt securities as of March 31, 2014, by contractual maturity were as follows (in thousands).  Securities not due at a single maturity date, primarily mortgage-backed securities and collateralized mortgage obligations, are shown separately.

	Held to Maturity				Available for Sale
	Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value
Due in five to ten years	$	6,535	$	6,363	$	-	$	-
Due after ten years		50,103		46,352		2,300		2,135
Residential government-sponsored mortgage-backed securities		24,722		25,230		-		-
Residential government-sponsored collateralized mortgage obligations		4,101		4,041		-		-
Other residential collateralized mortgage obligations		645		645		-		-
Total	$	86,106	$	82,631	$	2,300	$	2,135

Securities with a carrying amount of approximately $69.2 million and $65.3 million at March 31, 2014 and December 31, 2013, respectively, were pledged to secure public deposits, repurchase agreements and a line of credit for advances from the Federal Home Loan Bank of Atlanta (“FHLB”).

8

Southern National monitors the portfolio for indicators of other than temporary impairment.  At March 31, 2014 and December 31, 2013, certain securities’ fair values were below cost. As outlined in the table below, there were securities with fair values totaling approximately $62.3 million in the portfolio with the carrying value exceeding the estimated fair value that are considered temporarily impaired at March 31, 2014.  Because the decline in fair value is attributable to changes in interest rates and market illiquidity, and not credit quality, and because we do not have the intent to sell these securities and it is likely that we will not be required to sell the securities before their anticipated recovery, management does not consider these securities to be other-than-temporarily impaired as of March 31, 2014. The following tables present information regarding securities in a continuous unrealized loss position as of March 31, 2014 and December 31, 2013 (in thousands) by duration of time in a loss position:

March 31, 2014
	Less than 12 months				12 Months or More					Total
Available for Sale	Fair value		Unrealized Losses		Fair value		Unrealized Losses			Fair value		Unrealized Losses
Obligations of states and political subdivisions	$	-	$	-	$	2,135	$	(165	)	$	2,135	$	(165	)

	Less than 12 months					12 Months or More					Total
Held to Maturity	Fair value		Unrecognized Losses			Fair value		Unrecognized Losses			Fair value		Unrecognized Losses
Residential government-sponsored mortgage-backed securities	$	12,392	$	(172	)	$	-	$	-		$	12,392	$	(172	)
Residential government-sponsored collateralized mortgage obligations		4,041		(60	)		-		-			4,041		(60	)
Government-sponsored agency securities		9,064		(920	)		17,998		(1,990	)		27,062		(2,910	)
Obligations of states and political subdivisions		8,875		(292	)		3,442		(263	)		12,317		(555	)
Other residential collateralized mortgage obligations		-		-			-		-			-		-
Trust preferred securities		-		-			4,309		(1,768	)		4,309		(1,768	)
	$	34,372	$	(1,444	)	$	25,749	$	(4,021	)	$	60,121	$	(5,465	)

December 31, 2013
	Less than 12 months					12 Months or More					Total
Available for Sale	Fair value		Unrealized Losses			Fair value		Unrealized Losses			Fair value		Unrealized Losses
Obligations of states and political subdivisions	$	409	$	(78	)	$	1,584	$	(231	)	$	1,993	$	(309	)

	Less than 12 months					12 Months or More					Total
Held to Maturity	Fair value		Unrecognized Losses			Fair value		Unrecognized Losses			Fair value		Unrecognized Losses
Residential government-sponsored mortgage-backed securities	$	12,644	$	(294	)	$	-	$	-		$	12,644	$	(294	)
Residential government-sponsored collateralized mortgage obligations		2,984		(349	)		-		-			2,984		(349	)
Government-sponsored agency securities		8,733		(1,250	)		17,244		(2,744	)		25,977		(3,994	)
Obligations of states and political subdivisions		10,327		(588	)		3,064		(399	)		13,391		(987	)
Other residential collateralized mortgage obligations		647		(12	)		-		-			647		(12	)
Trust preferred securities		-		-			4,070		(2,228	)		4,070		(2,228	)
	$	35,335	$	(2,493	)	$	24,378	$	(5,371	)	$	59,713	$	(7,864	)

9

As of March 31, 2014, we owned pooled trust preferred securities as follows:

															Previously
												% of Current			Recognized
												Defaults and			Cumulative
		Ratings								Estimated		Deferrals to			Other
	Tranche	When Purchased		Current Ratings						Fair		Total			Comprehensive
Security	Level	Moody’s	Fitch	Moody’s	Fitch	Par Value		Book Value		Value		Collateral			Loss (1)
						(in thousands)
ALESCO VII  A1B	Senior	Aaa	AAA	A3	BBB	$	6,340	$	5,750	$	4,107		16	%	$	274
MMCF III B	Senior Sub	A3	A-	Ba1	CC		333		327		202		34	%		6
							6,673		6,077		4,309				$	280
															Cumulative Other		Cumulative
															Comprehensive		OTTI Related to
Other Than Temporarily Impaired:															Loss (2)		Credit Loss (2)
TPREF FUNDING II	Mezzanine	A1	A-	Caa3	C		1,500		520		520		41	%		605	$	375
TRAP 2007-XII C1	Mezzanine	A3	A	C	C		2,155		57		372		30	%		805		1,293
TRAP 2007-XIII D	Mezzanine	NR	A-	NR	C		2,039		-		168		25	%		7		2,032
MMC FUNDING XVIII	Mezzanine	A3	A-	Ca	C		1,092		27		271		27	%		374		691
ALESCO V C1	Mezzanine	A2	A	C	C		2,149		475		582		15	%		1,013		661
ALESCO XV C1	Mezzanine	A3	A-	C	C		3,245		30		79		33	%		656		2,559
ALESCO XVI  C	Mezzanine	A3	A-	C	C		2,158		120		478		14	%		858		1,180
							14,338		1,229		2,470				$	4,318	$	8,791
Total						$	21,011	$	7,306	$	6,779

(1)  Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion

(2)  Pre-tax

Each of these securities has been evaluated for other than temporary impairment.  In performing a detailed cash flow analysis of each security, Sonabank works with independent third parties to estimate expected cash flows and assist with the evaluation of other than temporary impairment. The cash flow analyses performed included the following assumptions:

● .5% of the remaining performing collateral will default or defer per annum.

● Recoveries of 16% with a two year lag on all defaults and deferrals.

● No prepayments for 10 years and then 1% per annum for the remaining life of the security.

● Additionally banks with assets over $15 billion will no longer be allowed to count down streamed trust preferred proceeds as Tier 1 capital (although it will still be counted as Tier 2 capital). That will incent the large banks to prepay their trust preferred securities if they can or if it is economically desirable. As a consequence, we have projected in all of our pools that 10% of the collateral issued by banks with assets over $15 billion will prepay in the first year of the forecast, and 15% in the second year.

● Our securities have been modeled using the above assumptions by independent third parties using the forward LIBOR curve to discount projected cash flows to present values.

We recognized OTTI charges of $16 thousand during the first quarter of 2014 compared to OTTI charges related to credit on the trust preferred securities totaling $3 thousand during the first quarter of 2013.

10

The following table presents a roll forward of the credit losses on our securities held to maturity recognized in earnings for the three months ended March 31, 2014 and 2013 (in thousands):

	2014			2013
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1	$	8,911		$	8,964
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized		-			-
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized		16			3
Reductions due to realized losses		(2	)		(25	)
Amount of cumulative other-than-temporary impairment related to credit loss as of March 31	$	8,925		$	8,942

Changes in accumulated other comprehensive income by component for the three months ended March 31, 2014 and 2013 are shown in the table below.  All amounts are net of tax (in thousands).

	Unrealized Holding
	Gains (Losses) on
For the three months ended March 31, 2014	Available for Sale			Held to Maturity
	Securities			Securities			Total
Beginning balance	$	(203	)	$	(2,987	)	$	(3,190	)
Other comprehensive income/(loss) before reclassifications		94			1			95
Amounts reclassified from accumulated other comprehensive income/(loss)		-			-			-
Net current-period other comprehensive income/(loss)		94			1			95
Ending balance	$	(109	)	$	(2,986	)	$	(3,095	)
	Unrealized Holding
	Gains (Losses) on
For the three months ended March 31, 2013	Available for Sale			Held to Maturity
	Securities			Securities			Total
Beginning balance	$	44		$	(3,025	)	$	(2,981	)
Other comprehensive income/(loss) before reclassifications		(1	)		60			59
Amounts reclassified from accumulated other comprehensive income/(loss)		(93	)		(2	)		(95	)
Net current-period other comprehensive income/(loss)		(94	)		58			(36	)
Ending balance	$	(50	)	$	(2,967	)	$	(3,017	)

4.LOANS AND ALLOWANCE FOR LOAN LOSSES

The following table summarizes the composition of our loan portfolio as of March 31, 2014 and December 31, 2013:

	Covered		Non-covered			Total			Covered		Non-covered			Total
	Loans (1)		Loans			Loans			Loans (1)		Loans			Loans
	March 31, 2014								December 31, 2013
Loans secured by real estate:
Commercial real estate - owner-occupied	$	1,552	$	105,121		$	106,673		$	1,603	$	106,225		$	107,828
Commercial real estate - non-owner-occupied		5,769		148,962			154,731			5,829		150,008			155,837
Secured by farmland		-		504			504			100		508			608
Construction and land loans		-		39,872			39,872			1		39,068			39,069
Residential 1-4 family		16,589		61,222			77,811			16,631		66,482			83,113
Multi- family residential		580		21,414			21,994			585		21,496			22,081
Home equity lines of credit		24,866		7,526			32,392			25,769		6,431			32,200
Total real estate loans		49,356		384,621			433,977			50,518		390,218			440,736
Commercial loans		898		104,258			105,156			1,097		104,284			105,381
Consumer loans		77		1,249			1,326			81		1,308			1,389
Gross loans		50,331		490,128			540,459			51,696		495,810			547,506
Less deferred fees on loans		4		(1,414	)		(1,410	)		5		(1,453	)		(1,448	)
Loans, net of deferred fees	$	50,335	$	488,714		$	539,049		$	51,701	$	494,357		$	546,058

(1) Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

11

Accounting policy related to the allowance for loan losses is considered a critical policy given the level of estimation, judgment, and uncertainty in the levels of the allowance required to account for the inherent probable losses in the loan portfolio and the material effect such estimation, judgment, and uncertainty can have on the consolidated financial results.

As part of the Greater Atlantic acquisition, the Bank and the FDIC entered into loss sharing agreements on approximately $143.4 million (contractual basis) of Greater Atlantic Bank’s assets.  There are two agreements with FDIC, one for single family loans which is a 10-year agreement expiring in December 2019, and one for non-single family (commercial) assets which is a 5-year agreement expiring in December 2014. The Bank will share in the losses on the loans and foreclosed loan collateral with the FDIC as specified in the loss sharing agreements; we refer to these assets collectively as “covered assets.”  Loans that are not covered in the loss sharing agreement are referred to as “non-covered loans” at March 31, 2014. Non-covered loans included $38.1 million of loans acquired in the HarVest acquisition.

Accretable discount on the acquired covered loans and the HarVest loans was $8.3 million and $8.9 million at March 31, 2014 and December 31, 2013 respectively.

Credit-impaired covered loans are those loans which presented evidence of credit deterioration at the date of acquisition and it is probable that Southern National would not collect all contractually required principal and interest payments. Generally, acquired loans that meet Southern National’s definition for nonaccrual status fell within the definition of credit-impaired covered loans.

12

Impaired loans for the covered and non-covered portfolios were as follows (in thousands):

March 31, 2014	Covered Loans						Non-covered Loans						Total Loans
			Unpaid						Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment (1)		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	737	$	835	$	-	$	7,624	$	7,695	$	-	$	8,361	$	8,530	$	-
Commercial real estate - non-owner occupied (2)		2,137		2,477		-		347		435		-		2,484		2,912		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		3,406		3,844		-		3,406		3,844		-
Residential 1-4 family (4)		1,210		1,427		-		5,730		5,781		-		6,940		7,208		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	4,084	$	4,739	$	-	$	17,107	$	17,755	$	-	$	21,191	$	22,494	$	-
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	-	$	109	$	209	$	109	$	109	$	209	$	109
Commercial real estate - non-owner occupied (2)		-		-		-		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		918		2,018		200		918		2,018		200
Residential 1-4 family (4)		-		-		-		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	1,027	$	2,227	$	309	$	1,027	$	2,227	$	309
Grand total	$	4,084	$	4,739	$	-	$	18,134	$	19,982	$	309	$	22,218	$	24,721	$	309
(1) Recorded investment is after cumulative prior charge offs of $1.7 million. These loans also have aggregate SBA guarantees of $2.4 million.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
(4)  Includes home equity lines of credit.
December 31, 2013	Covered Loans						Non-covered Loans						Total Loans
			Unpaid						Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment (1)		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	745	$	844	$	-	$	7,476	$	7,476	$	-	$	8,221	$	8,320	$	-
Commercial real estate - non-owner occupied (2)		2,145		2,486		-		359		449		-		2,504		2,935		-
Construction and land development		-		-		-		2,107		2,307		-		2,107		2,307		-
Commercial loans		-		-		-		3,155		3,631		-		3,155		3,631		-
Residential 1-4 family (4)		1,220		1,439		-		5,358		5,358		-		6,578		6,797		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	4,110	$	4,769	$	-	$	18,455	$	19,221	$	-	$	22,565	$	23,990	$	-
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	-	$	400	$	500	$	192	$	400	$	500	$	192
Commercial real estate - non-owner occupied (2)		-		-		-		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		1,718		2,518		325		1,718		2,518		325
Residential 1-4 family (4)		-		-		-		2,637		2,637		200		2,637		2,637		200
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	4,755	$	5,655	$	717	$	4,755	$	5,655	$	717
Grand total	$	4,110	$	4,769	$	-	$	23,210	$	24,876	$	717	$	27,320	$	29,645	$	717
(1) Recorded investment is after cumulative prior charge offs of $1.4 million. These loans also have aggregate SBA guarantees of $2.4 million.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
(4)  Includes home equity lines of credit.

13

The following tables present the average recorded investment and interest income for impaired loans recognized by class of loans for the three months ended March 31, 2014 and 2013 (in thousands):

Three months ended March 31, 2014	Covered Loans				Non-covered Loans				Total Loans
	Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	742	$	13	$	7,550	$	127	$	8,292	$	140
Commercial real estate - non-owner occupied (1)		2,141		21		354		9		2,495		30
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		3,169		21		3,169		21
Residential 1-4 family (2)		1,217		13		5,348		79		6,565		92
Other consumer loans		-		-		-		-		-		-
Total	$	4,100	$	47	$	16,421	$	236	$	20,521	$	283
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	114	$	4	$	114	$	4
Commercial real estate - non-owner occupied (1)		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		1,143		-		1,143		-
Residential 1-4 family (2)		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-
Total	$	-	$	-	$	1,257	$	4	$	1,257	$	4
Grand total	$	4,100	$	47	$	17,678	$	240	$	21,778	$	287
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Includes home equity lines of credit.
Three months ended March 31, 2013	Covered Loans				Non-covered Loans				Total Loans
	Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	137	$	5	$	4,221	$	45	$	4,358	$	50
Commercial real estate - non-owner occupied (1)		2,017		32		1,077		21		3,094		53
Construction and land development		48		-		2,451		23		2,499		23
Commercial loans		45		1		4,879		12		4,924		13
Residential 1-4 family (2)		1,734		22		2,977		34		4,711		56
Other consumer loans		-		-		-		-		-		-
Total	$	3,981	$	60	$	15,605	$	135	$	19,586	$	195
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	131	$	4	$	131	$	4
Commercial real estate - non-owner occupied (1)		-		-		976		16		976		16
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		-		-		-		-
Residential 1-4 family (2)		-		-		5,786		88		5,786		88
Other consumer loans		-		-		-		-		-		-
Total	$	-	$	-	$	6,893	$	108	$	6,893	$	108
Grand total	$	3,981	$	60	$	22,498	$	243	$	26,479	$	303
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Includes home equity lines of credit.

14

The following tables present the aging of the recorded investment in past due loans by class of loans as of March 31, 2014 and December 31, 2013 (in thousands):

March 31, 2014	30 - 59		60 - 89
	Days		Days		90 Days		Total		Nonaccrual		Loans Not		Total
	Past Due		Past Due		or More		Past Due		Loans		Past Due		Loans
Covered loans:
Commercial real estate - owner occupied	$	142	$	-	$	-	$	142	$	-	$	1,410	$	1,552
Commercial real estate - non-owner occupied (1)		146		-		-		146		1,991		4,212		6,349
Construction and land development		-		-		-		-		-		-		-
Commercial loans		-		-		-		-		-		898		898
Residential 1-4 family (2)		282		-		-		282		1,366		39,807		41,455
Other consumer loans		-		-		-		-		-		77		77
Total	$	570	$	-	$	-	$	570	$	3,357	$	46,404	$	50,331
Non-covered loans:
Commercial real estate - owner occupied	$	708	$	-	$	-	$	708	$	212	$	104,201	$	105,121
Commercial real estate - non-owner occupied (1)		-		-		-		-		-		170,880		170,880
Construction and land development		-		-		-		-		-		39,872		39,872
Commercial loans		636		-		-		636		3,094		100,528		104,258
Residential 1-4 family (2)		420		28		-		448		521		67,779		68,748
Other consumer loans		20		-		-		20		-		1,229		1,249
Total	$	1,784	$	28	$	-	$	1,812	$	3,827	$	484,489	$	490,128
Total loans:
Commercial real estate - owner occupied	$	850	$	-	$	-	$	850	$	212	$	105,611	$	106,673
Commercial real estate - non-owner occupied (1)		146		-		-		146		1,991		175,092		177,229
Construction and land development		-		-		-		-		-		39,872		39,872
Commercial loans		636		-		-		636		3,094		101,426		105,156
Residential 1-4 family (2)		702		28		-		730		1,887		107,586		110,203
Other consumer loans		20		-		-		20		-		1,306		1,326
Total	$	2,354	$	28	$	-	$	2,382	$	7,184	$	530,893	$	540,459
December 31, 2013	30 - 59		60 - 89
	Days		Days		90 Days		Total		Nonaccrual		Loans Not		Total
	Past Due		Past Due		or More		Past Due		Loans		Past Due		Loans
Covered loans:
Commercial real estate - owner occupied	$	-	$	-	$	-	$	-	$	-	$	1,603	$	1,603
Commercial real estate - non-owner occupied (1)		503		-		-		503		245		5,766		6,514
Construction and land development		-		-		-		-		-		1		1
Commercial loans		-		-		-		-		-		1,097		1,097
Residential 1-4 family (2)		41		-		-		41		1,377		40,982		42,400
Other consumer loans		-		-		-		-		-		81		81
Total	$	544	$	-	$	-	$	544	$	1,622	$	49,530	$	51,696
Non-covered loans:
Commercial real estate - owner occupied	$	708	$	283	$	-	$	991	$	-	$	105,234	$	106,225
Commercial real estate - non-owner occupied (1)		359		-		-		359		-		171,653		172,012
Construction and land development		8		3		-		11		2,107		36,950		39,068
Commercial loans		522		968		-		1,490		3,070		99,724		104,284
Residential 1-4 family (2)		957		98		-		1,055		2,637		69,221		72,913
Other consumer loans		14		-		-		14		-		1,294		1,308
Total	$	2,568	$	1,352	$	-	$	3,920	$	7,814	$	484,076	$	495,810
Total loans:
Commercial real estate - owner occupied	$	708	$	283	$	-	$	991	$	-	$	106,837	$	107,828
Commercial real estate - non-owner occupied (1)		862		-		-		862		245		177,419		178,526
Construction and land development		8		3		-		11		2,107		36,951		39,069
Commercial loans		522		968		-		1,490		3,070		100,821		105,381
Residential 1-4 family (2)		998		98		-		1,096		4,014		110,203		115,313
Other consumer loans		14		-		-		14		-		1,375		1,389
Total	$	3,112	$	1,352	$	-	$	4,464	$	9,436	$	533,606	$	547,506

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Non-covered nonaccrual loans include SBA guaranteed amounts totaling $2.4 million and $1.9 million at March 31, 2014 and December 31, 2013, respectively.

15

Activity in the allowance for non-covered loan and lease losses for the three months ended March 31, 2014 and 2013 is summarized below (in thousands):

	Commercial			Commercial
	Real Estate			Real Estate			Construction									Other
Non-covered loans:	Owner			Non-owner			and Land			Commercial			1-4 Family			Consumer
Three months ended March 31, 2014	Occupied			Occupied (1)			Development			Loans			Residential (2)			Loans			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	814		$	985		$	1,068		$	2,797		$	1,302		$	54		$	19	$	7,039
Charge offs		(71	)		-			-			(588	)		(300	)		-			-		(959	)
Recoveries		4			6			-			35			-			5			-		50
Provision		(131	)		(181	)		84			404			100			(9	)		908		1,175
Ending balance	$	616		$	810		$	1,152		$	2,648		$	1,102		$	50		$	927	$	7,305
Three months ended March 31, 2013
Allowance for loan losses:
Beginning balance	$	932		$	1,474		$	970		$	2,110		$	1,163		$	33		$	285	$	6,967
Charge offs		-			(199	)		(300	)		(399	)		(38	)		(140	)		-		(1,076	)
Recoveries		-			-			2			39			121			-			-		162
Provision		(34	)		(84	)		376			345			50			171			275		1,099
Ending balance	$	898		$	1,191		$	1,048		$	2,095		$	1,296		$	64		$	560	$	7,152

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Activity in the allowance for covered loan and lease losses by class of loan for the three months ended March 31, 2014 and 2013 is summarized below (in thousands).

	Commercial		Commercial
	Real Estate		Real Estate		Construction							Other
Covered loans:	Owner		Non-owner		and Land		Commercial			1-4 Family		Consumer
Three months ended March 31, 2014	Occupied		Occupied (1)		Development		Loans			Residential (3)		Loans		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	-	$	45	$	-	$	-		$	-	$	6	$	-	$	51
Charge offs		-		-		-		-			-		-		-		-
Recoveries		-		-		-		-			-		-		-		-
Adjustments (2)		-		-		-		-			-		-		-		-
Provision		-		-		-		-			-		-		-		-
Ending balance	$	-	$	45	$	-	$	-		$	-	$	6	$	-	$	51
Three months ended March 31, 2013
Allowance for loan losses:
Beginning balance	$	-	$	45	$	-	$	43		$	-	$	11	$	-	$	99
Charge offs		-		-		-		-			-		-		-		-
Recoveries		-		-		-		-			-		-		-		-
Adjustments (2)		-		-		-		(35	)		-		8		-		(27	)
Provision		-		-		-		(8	)		-		2		-		(6	)
Ending balance	$	-	$	45	$	-	$	-		$	-	$	21	$	-	$	66

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Represents the portion of increased expected losses which is covered by the loss sharing agreement with the FDIC.

(3) Includes home equity lines of credit.

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The following tables present the balance in the allowance for loan losses and the recorded investment in non-covered loans by portfolio segment and based on impairment method as of March 31, 2014 and December 31, 2013 (in thousands):

	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
Non-covered loans:	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
March 31, 2014
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	109	$	-	$	-	$	200	$	-	$	-	$	-	$	309
Collectively evaluated for impairment		507		810		1,152		2,448		1,102		50		927		6,996
Total ending allowance	$	616	$	810	$	1,152	$	2,648	$	1,102	$	50	$	927	$	7,305
Loans:
Individually evaluated for impairment	$	7,733	$	347	$	-	$	4,324	$	5,730	$	-	$	-	$	18,134
Collectively evaluated for impairment		97,388		170,533		39,872		99,934		63,018		1,249		-		471,994
Total ending loan balances	$	105,121	$	170,880	$	39,872	$	104,258	$	68,748	$	1,249	$	-	$	490,128
December 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	192	$	-	$	-	$	325	$	200	$	-	$	-	$	717
Collectively evaluated for impairment		622		985		1,068		2,472		1,102		54		19		6,322
Total ending allowance	$	814	$	985	$	1,068	$	2,797	$	1,302	$	54	$	19	$	7,039
Loans:
Individually evaluated for impairment	$	7,876	$	359	$	2,107	$	4,873	$	7,995	$	-	$	-	$	23,210
Collectively evaluated for impairment		98,349		171,653		36,961		99,411		64,918		1,308		-		472,600
Total ending loan balances	$	106,225	$	172,012	$	39,068	$	104,284	$	72,913	$	1,308	$	-	$	495,810

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

The following tables present the balance in the allowance for covered loan losses and the recorded investment in covered loans by portfolio segment and based on impairment method as of March 31, 2014 and December 31, 2013 (in thousands):

	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
Covered loans:	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
March 31, 2014
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		-		45		-		-		-		6		-		51
Total ending allowance	$	-	$	45	$	-	$	-	$	-	$	6	$	-	$	51
Loans:
Individually evaluated for impairment	$	737	$	2,137	$	-	$	-	$	1,210	$	-	$	-	$	4,084
Collectively evaluated for impairment		815		4,212		-		898		40,245		77		-		46,247
Total ending loan balances	$	1,552	$	6,349	$	-	$	898	$	41,455	$	77	$	-	$	50,331
December 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		-		45		-		-		-		6		-		51
Total ending allowance	$	-	$	45	$	-	$	-	$	-	$	6	$	-	$	51
Loans:
Individually evaluated for impairment	$	745	$	2,145	$	-	$	-	$	1,220	$	-	$	-	$	4,110
Collectively evaluated for impairment		858		4,369		1		1,097		41,180		81		-		47,586
Total ending loan balances	$	1,603	$	6,514	$	1	$	1,097	$	42,400	$	81	$	-	$	51,696

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Troubled Debt Restructurings

A modification is classified as a troubled debt restructuring (“TDR”) if both of the following exist: (1) the borrower is experiencing financial difficulty and (2) the Bank has granted a concession to the borrower.  The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future.  Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures.  Concessions may include the reduction of an interest rate at a rate lower than current market rate for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness.  When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers.  The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when determining whether a modification is a TDR.

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Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, TDRs are typically modified through reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.

During the periods ending March 31, 2014 and March 31, 2013, there were no loans modified in troubled debt restructurings.  No TDRs defaulted during the quarters ending March 31, 2014 and March 31, 2013, which had been modified in the previous 12 months.

Credit Quality Indicators

Through its system of internal controls Southern National evaluates and segments loan portfolio credit quality on a quarterly basis using regulatory definitions for Special Mention, Substandard and Doubtful.  Special Mention loans are considered to be criticized.  Substandard and Doubtful loans are considered to be classified.  Southern National had no loans classified Doubtful at March 31, 2014 or December 31, 2013.

Special Mention loans are loans that have a potential weakness that deserves management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position.

Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

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As of March 31, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

March 31, 2014	Covered Loans						Non-covered Loans								Total Loans
	Classified/						Special								Classified/
	Criticized (1)		Pass		Total		Mention		Substandard (3)		Pass		Total		Criticized		Pass		Total
Commercial real estate - owner occupied	$	737	$	815	$	1,552	$	796	$	7,733	$	96,592	$	105,121	$	9,266	$	97,407	$	106,673
Commercial real estate - non-owner occupied (2)		2,137		4,212		6,349		-		347		170,533		170,880		2,484		174,745		177,229
Construction and land development		-		-		-		618		-		39,254		39,872		618		39,254		39,872
Commercial loans		-		898		898		31		4,324		99,903		104,258		4,355		100,801		105,156
Residential 1-4 family (4)		1,210		40,245		41,455		171		5,730		62,847		68,748		7,111		103,092		110,203
Other consumer loans		-		77		77		-		-		1,249		1,249		-		1,326		1,326
Total	$	4,084	$	46,247	$	50,331	$	1,616	$	18,134	$	470,378	$	490,128	$	23,834	$	516,625	$	540,459
December 31, 2013	Covered Loans						Non-covered Loans								Total Loans
	Classified/						Special								Classified/
	Criticized (1)		Pass		Total		Mention		Substandard (3)		Pass		Total		Criticized		Pass		Total
Commercial real estate - owner occupied	$	745	$	858	$	1,603	$	802	$	7,876	$	97,547	$	106,225	$	9,423	$	98,405	$	107,828
Commercial real estate - non-owner occupied (2)		2,145		4,369		6,514		-		359		171,653		172,012		2,504		176,022		178,526
Construction and land development		-		1		1		618		2,107		36,343		39,068		2,725		36,344		39,069
Commercial loans		-		1,097		1,097		31		4,873		99,380		104,284		4,904		100,477		105,381
Residential 1-4 family (4)		1,220		41,180		42,400		176		7,995		64,742		72,913		9,391		105,922		115,313
Other consumer loans		-		81		81		-		-		1,308		1,308		-		1,389		1,389
Total	$	4,110	$	47,586	$	51,696	$	1,627	$	23,210	$	470,973	$	495,810	$	28,947	$	518,559	$	547,506
(1) Credit quality is enhanced by a loss sharing agreement with the FDIC in the covered portfolio. The same credit quality indicators used in the non-covered portfolio are combined.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) Includes SBA guarantees of $2.4 million as of March 31, 2014 and December 31, 2013.
(4) Includes home equity lines of credit.

5.         FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Southern National is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments include commitments to extend credit and standby letters of credit.  These instruments involve elements of credit and funding risk in excess of the amount recognized in the consolidated balance sheet.  Letters of credit are written conditional commitments issued by Southern National to guarantee the performance of a customer to a third party.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.  We had letters of credit outstanding totaling $7.8 million and $6.9 million as of March 31, 2014 and December 31, 2013, respectively.

Our exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit is based on the contractual amount of these instruments.  We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Unless noted otherwise, we do not require collateral or other security to support financial instruments with credit risk.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments are made predominately for adjustable rate loans, and generally have fixed expiration dates of up to three months or other termination clauses and usually require payment of a fee.  Since many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  We evaluate each customer’s creditworthiness on a case-by-case basis.

At March 31, 2014 and December 31, 2013, we had unfunded lines of credit and undisbursed construction loan funds totaling $113.7 million and $105.8 million, respectively. We had approved loan commitments of $15.0 million at March 31, 2014, and we had no approved loan commitments as of December 31, 2013.  Virtually all of our unfunded lines of credit, undisbursed construction loan funds and approved loan commitments are variable rate.

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6.         EARNINGS PER SHARE

The following is a reconciliation of the denominators of the basic and diluted earnings per share (“EPS”) computations (dollars in thousands, except per share data):

			Weighted
			Average
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
For the three months ended March 31, 2014
Basic EPS	$	1,642		11,591	$	0.14
Effect of dilutive stock options and warrants		-		66		-
Diluted EPS	$	1,642		11,657	$	0.14
For the three months ended March 31, 2013
Basic EPS	$	1,526		11,590	$	0.13
Effect of dilutive stock options and warrants		-		26		-
Diluted EPS	$	1,526		11,616	$	0.13

There were 643,199 and 591,843 anti-dilutive options and warrants for the three months ended March 31, 2014 and 2013, respectively.

7.FAIR VALUE

ASC 820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability

The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:

Securities Available for Sale

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.  Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities.  If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow.  Level 2 securities would include U. S. agency securities, mortgage-backed securities, obligations of states and political subdivisions and certain corporate, asset-backed and other securities.  In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.  Currently, all of Southern National’s available-for-sale debt securities are considered to be Level 2 securities.

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Assets measured at fair value on a recurring basis are summarized below:

			Fair Value Measurements Using
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Total at		Identical Assets		Inputs		Inputs
(dollars in thousands)	March 31, 2014		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available for sale securities
Obligations of states and political subdivisions	$	2,135	$	-	$	2,135	$	-
			Fair Value Measurements Using
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Total at		Identical Assets		Inputs		Inputs
(dollars in thousands)	December 31, 2013		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available for sale securities
Obligations of states and political subdivisions	$	1,993	$	-	$	1,993	$	-

Assets and Liabilities Measured on a Non-recurring Basis:

Trust Preferred Securities Classified as Held-to-Maturity

The base input in calculating fair value is a Bloomberg Fair Value Index yield curve for single issuer trust preferred securities which correspond to the ratings of the securities we own.  We also use composite rating indices to fill in the gaps where the bank rating indices did not correspond to the ratings in our portfolio.  When a bank index that matches the rating of our security is not available, we used the bank index that most closely matches the rating, adjusted by the spread between the composite index that most closely matches the security’s rating and the composite index with a rating that matches the bank index used.  Then, we use the adjusted index yield, which is further adjusted by a liquidity premium, as the discount rate to be used in the calculation of the present value of the same cash flows used to evaluate the securities for OTTI.  The liquidity premiums were derived in consultation with a securities advisor. The liquidity premiums we used ranged from 2% to 5%, and the adjusted discount rates ranged from 9.30% to 14.49% at March 31, 2014.  The liquidity premiums we used ranged from 2% to 5%, and the adjusted discount rates ranged from 10.97% to 14.97% at December 31, 2013. Due to current market conditions as well as the limited trading activity of these securities, the market value of the securities is highly sensitive to assumption changes and market volatility.  We have determined that our trust preferred securities are classified within Level 3 of the fair value hierarchy.

Other Residential Collateralized Mortgage Obligation Classified as Held-to Maturity

The fair value was estimated within Level 2 fair value hierarchy, as the fair value is based on either pricing models, quoted market prices of securities with similar characteristics, or discounted cash flows.  We have evaluated this security for potential impairment and, based on our review of the trustee report, shock analysis and current information regarding delinquencies, nonperforming loans and credit support, it has been determined that no OTTI charge for credit exists for the three months ended March 31, 2014.  The assumptions used in the analysis included a 6.1% prepayment speed, 6.4% default rate, a 57% loss severity and an accounting yield of 2.38% at March 31, 2014.  The assumptions used in the analysis at December 31, 2013, included a 4.3% prepayment speed, 8.9% default rate, a 51% loss severity and an accounting yield of 1.38%.

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Impaired Loans

Generally, we measure the impairment for impaired loans considering the fair value of the loan’s collateral (if the loan is collateral dependent).  Fair value of the loan’s collateral is determined by an independent appraisal or evaluation less estimated costs related to selling the collateral.  In some cases appraised value is net of costs to sell.  Estimated selling costs range from 6% to 10% of collateral valuation at March 31, 2014 and December 31, 2013. Fair value is classified as Level 3 in the fair value hierarchy. Non-covered loans identified as impaired totaled $18.1 million (including SBA guarantees of $2.4 million and HarVest loans of $868 thousand) as of March 31, 2014 with an allocated allowance for loan losses totaling $309 thousand compared to a carrying amount of $23.2 million (including SBA guarantees of $2.4 million) with an allocated allowance for loan losses totaling $717 thousand at December 31, 2013.  Charge offs related to the impaired loans at March 31, 2014 totaled $516 thousand for the quarter ended March 31, 2014 compared to $555 thousand for the quarter ended March 31, 2013.

Other Real Estate Owned (OREO)

OREO is evaluated at the time of acquisition and recorded at fair value as determined by independent appraisal or evaluation less cost to sell.  In some cases appraised value is net of costs to sell.  Selling costs have been in the range from 6% to 7.6% of collateral valuation at March 31, 2014 and December 31, 2013. Fair value is classified as Level 3 in the fair value hierarchy. OREO is further evaluated quarterly for any additional impairment.  At March 31, 2014, the total amount of OREO was $13.8 million, of which $12.1 million was non-covered and $1.7 million was covered.

At December 31, 2013, the total amount of OREO was $11.8 million, of which $9.6 million was non-covered (including $509 thousand acquired from HarVest) and $2.2 million was covered.

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Assets measured at fair value on a non-recurring basis are summarized below:

			Fair Value Measurements Using
				Significant
			Quoted Prices in	Other	Significant
			Active Markets for	Observable	Unobservable
	Total at		Identical Assets	Inputs	Inputs
(dollars in thousands)	March 31, 2014		(Level 1)	(Level 2)	(Level 3)
Securities held to maturity:
Trust preferred securities	$	520			$	520
Impaired non-covered loans:
Commercial real estate - owner occupied		7,624				7,624
Commercial real estate - non-owner occupied (1)		347				347
Construction and land development		-				-
Commercial loans		4,124				4,124
Residential 1-4 family		5,730				5,730
Impaired covered loans:
Commercial real estate - owner occupied		737				737
Commercial real estate - non-owner occupied (1)		2,137				2,137
Residential 1-4 family		1,210				1,210
Non-covered other real estate owned:
Commercial real estate - owner occupied		461				461
Commercial real estate - non-owner occupied (1)		-				-
Construction and land development		7,564				7,564
Residential 1-4 family		4,074				4,074
Covered other real estate owned:
Commercial real estate - owner occupied		-				-
Commercial real estate - non-owner occupied (1)		1,450				1,450
Commercial		79				79
Residential 1-4 family		127				127
			Fair Value Measurements Using
				Significant
			Quoted Prices in	Other	Significant
			Active Markets for	Observable	Unobservable
	Total at		Identical Assets	Inputs	Inputs
(dollars in thousands)	December 31, 2013		(Level 1)	(Level 2)	(Level 3)
Impaired non-covered loans:
Commercial real estate - owner occupied	$	7,684			$	7,684
Commercial real estate - non-owner occupied (1)		359				359
Construction and land development		2,107				2,107
Commercial loans		4,548				4,548
Residential 1-4 family		7,795				7,795
Impaired covered loans:
Commercial real estate - owner occupied		745				745
Commercial real estate - non-owner occupied (1)		2,145				2,145
Residential 1-4 family		1,220				1,220
Non-covered other real estate owned:
Commercial real estate - owner occupied		461				461
Commercial real estate - non-owner occupied (1)		1,342				1,342
Construction and land development		6,066				6,066
Residential 1-4 family		1,710				1,710
Covered other real estate owned:
Commercial real estate - owner occupied		557				557
Commercial real estate - non-owner occupied (1)		1,450				1,450
Commercial		79				79
Residential 1-4 family		127				127
(1) Includes loans secured by farmland and multi-family residential loans.

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Fair Value of Financial Instruments

The carrying amount, estimated fair values and fair value hierarchy levels (previously defined) of financial instruments were as follows (in thousands):

		March 31, 2014				December 31, 2013
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy Level	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	19,382	$	19,382	$	20,856	$	20,856
Securities available for sale	See previous table		2,135		2,135		1,993		1,993
Securities held to maturity	Level 2 & Level 3		86,106		82,631		82,443		76,193
Stock in Federal Reserve Bank and Federal
Home Loan Bank	n/a		4,793		n/a		5,915		n/a
Net non-covered loans	Level 3		481,409		487,745		487,318		493,472
Net covered loans	Level 3		50,284		56,589		51,650		57,564
Accrued interest receivable	Level 2 & Level 3		2,015		2,015		2,186		2,186
FDIC indemnification asset	Level 3		5,066		3,606		5,804		4,220
Financial liabilities:
Demand deposits	Level 1		69,432		69,432		68,940		68,940
Money market and savings accounts	Level 1		144,855		144,855		147,854		147,854
Certificates of deposit	Level 3		342,004		342,920		323,565		324,733
Securities sold under agreements to
repurchase and other short-term borrowings	Level 1		19,727		19,727		34,545		34,545
FHLB advances	Level 3		25,000		25,828		30,250		31,168
Accrued interest payable	Level 1 & Level 3		371		371		341		341

Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable, demand deposits, savings accounts, money market accounts, short-term debt, and variable rate loans that reprice frequently and fully.  For fixed rate loans or deposits and for variable rate loans with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life. A discount for liquidity risk was not considered necessary in estimating the fair value of loans. It was not practicable to determine the fair value of Federal Reserve Bank and Federal Home Loan Bank stock due to restrictions placed on its transferability.  Fair value of long-term debt is based on current rates for similar financing.  The fair value of the FDIC indemnification asset was determined by discounting estimated future cash flows using the long-term risk free rate plus a premium and represents the present value of our current expectation for recoveries from the FDIC on covered loans.  The fair value of off-balance-sheet items is not considered material.  The fair value of loans is not presented on an exit price basis.

8.         ACQUISTIONS

As previously announced, on January 8, 2014, Southern National Bancorp of Virginia, Inc. entered into a merger agreement with Prince George’s Federal Savings Bank (FSB). Prince George’s FSB, with assets of approximately $104 million, was founded in 1931 and is headquartered in Upper Marlboro, which is the County Seat of Prince George’s County, Maryland. Prince George’s FSB has four offices, all of which are in Maryland, including a main office in Upper Marlboro and three branch offices in Dunkirk, Brandywine and Huntingtown.Upon completion of the cash and stock transaction with a value of approximately $11.5 million, the combined company will have approximately $805 million in total assets, $700 million in total deposits, and $600 million in total loans.

Sonabank has entered into an agreement to purchase 44% of the common stock of Southern Trust Mortgage LLC (STM) from the Middleburg Bank. The CEO of STM, Jerry Flowers, and EVB will be purchasing the remainder of the stock held by Middleburg Bank. Upon consummation of the transaction, STM management will own 51.1%, Sonabank 44% and EVB 4.9%. We hope to close this transaction in the second quarter.

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis is presented to aid the reader in understanding and evaluating the financial condition and results of operations of SNBV.  This discussion and analysis should be read with the consolidated financial statements, the footnotes thereto, and the other financial data included in this report and in our annual report on Form 10-K for the year ended December 31, 2013.  Results of operations for the three month period ended March 31, 2014 are not necessarily indicative of results that may be attained for any other period.

FORWARD-LOOKING STATEMENTS

Statements and financial discussion and analysis contained in this Quarterly Report on Form 10-Q that are not statements of historical fact constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions and involve a number of risks and uncertainties, many of which are beyond our control. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “continue,” “would,” “could,” “hope,” “might,” “assume,” “objective,” “seek,” “plan,” “strive” and similar words, or the negatives of these words, are intended to identify forward-looking statements.

Many possible events or factors could affect our future financial results and performance and could cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements. In addition to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, factors that could contribute to those differences include, but are not limited to:

● the effects of future economic, business and market conditions and changes, domestic and foreign;

● changes in the local economies in our market areas adversely affect our customers and their ability to transact profitable business with us, including the ability of our borrowers to repay their loans according to their terms or a change in the value of the related collateral;

● changes in the availability of funds resulting in increased costs or reduced liquidity;

● a deterioration or downgrade in the credit quality and credit agency ratings of the securities in our securities portfolio;

● impairment concerns and risks related to our investment portfolio of collateralized mortgage obligations, agency mortgage-backed securities, obligations of states and political subdivisions and pooled trust preferred securities;

● the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations;

● increased credit risk in our assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of our total loan portfolio;

● the concentration of our loan portfolio in loans collateralized by real estate;

● our level of construction and land development and commercial real estate loans;

● changes in the levels of loan prepayments and the resulting effects on the value of our loan portfolio;

● the failure of assumptions and estimates underlying the establishment of and provisions made to the allowance for loan losses;

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● our ability to expand and grow our business and operations, including the establishment of additional branches and acquisition of additional branches and banks, and our ability to realize the cost savings and revenue enhancements we expect from such activities;

● changes in governmental monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve System, or changes in interest rates and market prices, which could reduce our net interest margins, asset valuations and expense expectations;

● increased competition for deposits and loans adversely affecting rates and terms;

● the continued service of key management personnel;

● the potential payment of interest on demand deposit accounts to effectively compete for customers;

● potential environmental liability risk associated with lending activities;

● increased asset levels and changes in the composition of assets and the resulting impact on our capital levels and regulatory capital ratios;

● risks of mergers and acquisitions, including the related time and cost of implementing transactions and the potential failure to achieve expected gains, revenue growth or expense savings;

● legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators, including those associated with the Dodd Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and changes in the scope and cost of Federal Deposit Insurance Corporation (“FDIC”) insurance and other coverage;

● increases in regulatory capital requirements for banking organizations generally, which may adversely affect our ability to expand our business or could cause us to shrink our business;

● the effects of war or other conflicts, acts of terrorism or other catastrophic events that may affect general economic conditions;

● changes in accounting policies, rules and practices and applications or determinations made thereunder;

● the risk that our deferred tax assets could be reduced if future taxable income  is less than currently estimated, if corporate tax rates in the future are less than current rates,  or if sales of our capital stock trigger limitations on the amount of net operating loss carryforwards that we may utilize for income tax purposes; and

● other factors and risks described under “Risk Factors” herein and in any of our subsequent reports that we make with the Securities and Exchange Commission (the “Commission” or “SEC”) under the Exchange Act.

Forward-looking statements are not guarantees of performance or results. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe we have chosen these assumptions or bases in good faith and that they are reasonable. We caution you, however, that assumptions or bases almost always vary from actual results, and the differences between assumptions or bases and actual results can be material. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Quarterly Report on Form 10-Q. These statements speak only as of the date of this Quarterly Report on Form 10-Q.  Except as required by applicable law, we undertake no obligation to update publicly these statements in light of new information or future events.

OVERVIEW

Southern National Bancorp of Virginia, Inc. (“Southern National”, “we” or “our”) is the bank holding company for Sonabank (“Sonabank” or the “Bank”), a Virginia state chartered bank which commenced operations on April 14, 2005. Sonabank conducts full-service community banking operations from locations in Fairfax County (Reston, McLean and Fairfax), in Charlottesville, Warrenton (2), Loudoun County (Middleburg, Leesburg (2), and South Riding), Front Royal, New Market, Richmond, Haymarket and Clifton Forge, and five branches in Maryland (four in Montgomery County and one in Frederick County) and maintains loan production offices in Richmond, Charlottesville, Warrenton and Fredericksburg. We have administrative offices in Warrenton and an executive office in Georgetown, Washington, D.C where senior management is located.

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RESULTS OF OPERATIONS

Net Income

Net income for the quarter ended March 31, 2014 was $1.6 million compared to $1.5 million during the first quarter of 2013.

Net Interest Income
 

Our operating results depend primarily on our net interest income, which is the difference between interest and dividend income on interest-earning assets such as loans and investments, and interest expense on interest-bearing liabilities such as deposits and borrowings.

During the first quarter net interest income before the provision for loan losses was $7.6 million, down slightly from $7.8 million during the first quarter of 2013. Average loans during the first quarter of 2014 were $544.1 million compared to $514.0 million during the same period last year. The net interest margin was 4.72% in the first quarter of 2014, down from 4.94% in the first quarter of 2013. The loan discount accretion on the Greater Atlantic Bank (GAB) portfolio contributed $412 thousand to net interest income during the first quarter of 2014, compared to $447 thousand during the first quarter of 2013. The loan discount accretion on the HarVest Bank portfolio contributed $378 thousand during the first quarter of 2014, compared to $369 thousand during the same period last year. Before taking the discount accretion related to the GAB and HarVest acquisitions into account, the net interest margin was still strong at 4.29% in the first quarter of 2014 compared to 4.43% in the first quarter of 2013, despite the margin compression we experienced over the past year.

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The following table details average balances of interest-earning assets and interest-bearing liabilities, the amount of interest earned/paid on such assets and liabilities, and the yield/rate for the periods indicated:

	Average Balance Sheets and Net Interest
	Analysis For the Three Months Ended
	3/31/2014								3/31/2013
				Interest								Interest
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate			Balance			Expense		Rate
	(Dollar amounts in thousands)
Assets
Interest-earning assets:
Loans, net  of deferred fees (1) (2)	$	544,110		$	7,756		5.78	%	$	513,972		$	8,343		6.58	%
Investment securities		84,609			605		2.86	%		84,566			568		2.69	%
Other earning assets		23,501			280		4.83	%		38,720			112		1.17	%
Total earning assets		652,220			8,641		5.37	%		637,258			9,023		5.74	%
Allowance for loan losses		(7,426	)							(7,655	)
Total non-earning assets		69,332								70,149
Total assets	$	714,126							$	699,752
Liabilities and stockholders’ equity
Interest-bearing liabilities:
NOW accounts	$	23,002			6		0.11	%	$	24,762			15		0.25	%
Money market accounts		129,554			90		0.28	%		158,698			192		0.49	%
Savings accounts		17,333			27		0.64	%		10,085			14		0.56	%
Time deposits		332,057			773		0.94	%		304,566			879		1.17	%
Total interest-bearing deposits		501,946			896		0.72	%		498,111			1,100		0.90	%
Borrowings		54,021			158		1.19	%		47,253			153		1.31	%
Total interest-bearing liabilities		555,967			1,054		0.77	%		545,364			1,253		0.93	%
Noninterest-bearing liabilities:
Demand deposits		46,290								45,591
Other liabilities		4,614								4,988
Total liabilites		606,871								595,943
Stockholders’ equity		107,255								103,809
Total liabilities and stockholders’
equity	$	714,126							$	699,752
Net interest income				$	7,587							$	7,770
Interest rate spread							4.60	%							4.81	%
Net interest margin							4.72	%							4.94	%

(1)  Includes loan fees in both interest income and the calculation of the yield on loans.

(2)  Calculations include non-accruing loans in average loan amounts outstanding.

Provision for Loan Losses

The provision for loan losses is a current charge to earnings made in order to increase the allowance for loan losses to a level deemed appropriate by management based on an evaluation of the loan portfolio, current economic conditions, changes in the nature and volume of lending, historical loan experience and other known internal and external factors affecting loan collectability.  Our loan loss allowance is calculated by segmenting the loan portfolio by loan type and applying historical loss factors to each segment.  The historical loss factors may be qualitatively adjusted by considering regulatory and peer data, and the application of management’s judgment.

The provision for loan losses in the first quarter of 2014 was $1.2 million, compared to $1.1 million in the first quarter of 2013. Net charge offs during the quarter ended March 31, 2014 were $909 thousand compared to $914 thousand during the first quarter of 2013.

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Noninterest Income

The following table presents the major categories of noninterest income for the three months ended March 31, 2014 and 2013:

	For the Three Months Ended
	March 31,
	2014			2013			Change
	(dollars in thousands)
Account maintenance and deposit service fees	$	178		$	193		$	(15	)
Income from bank-owned life insurance		140			149			(9	)
Gain on other assets		202			-			202
Net gain on sale of available for sale securities		-			142			(142	)
Net impairment losses recognized in earnings		(16	)		(3	)		(13	)
Other		37			55			(18	)
Total noninterest income	$	541		$	536		$	5

Noninterest income was $541 thousand during the first quarter of 2014, compared to $536 thousand during the same quarter of 2013. During the first quarter of 2014, we sold part of our investment in CapitalSouth Partners Fund III, a Small Business Investment Company, for a gain of $202 thousand.  We had a gain on the sale of available for sale FHLMC preferred stock in the amount of $142 thousand during the quarter ended March 31, 2013.

Noninterest Expense

The following table presents the major categories of noninterest expense for the three months ended March 31, 2014 and 2013:

	For the Three Months Ended
	March 31,
	2014			2013		Change
	(dollars in thousands)
Salaries and benefits	$	2,389		$	2,246	$	143
Occupancy expenses		772			760		12
Furniture and equipment expenses		187			156		31
Amortization of core deposit intangible		45			123		(78	)
Virginia franchise tax expense		116			127		(11	)
Merger expenses		213			-		213
FDIC assessment		125			234		(109	)
Data processing expense		126			148		(22	)
Telephone and communication expense		178			178		-
Change in FDIC indemnification asset		124			130		(6	)
Net (gain) loss on other real estate owned		(419	)		56		(475	)
Other operating expenses		663			793		(130	)
Total noninterest expense	$	4,519		$	4,951	$	(432	)

Noninterest expense was $4.5 million for the first quarter of 2014 compared to $5.0 million for the first quarter of 2013. During the first quarter of 2014, we sold two properties in Other Real Estate Owned (OREO) resulting in gains of $637 thousand.  We also sold two other OREO properties resulting in losses of $218 thousand, and the net gain for the quarter ended March 31, 2014 was $419 thousand.  This compared to a loss on OREO of $56 thousand for the first quarter of 2013.

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The efficiency ratio was 62.18% during the quarter ended March 31, 2014 compared to 59.94% during the first quarter of 2013. It continues to be a challenge to support the additional risk management costs mandated by the regulators.

FINANCIAL CONDITION

Balance Sheet Overview

Total assets were $713.2 million as of March 31, 2014 compared to $716.2 million as of December 31, 2013.  Net loans receivable decreased from $539.0 million at the end of 2013 to $531.7 million at March 31, 2014.

Total deposits were $556.3 million at March 31, 2014 compared to $540.4 million at December 31, 2013. Certificates of deposit increased $18.4 million during the quarter.  This was partially offset by a decrease in money market accounts of $3.4 million during the quarter ended March 31, 2014.  Noninterest-bearing deposits were $47.0 million at March 31, 2014 and $44.6 million at December 31, 2013.

Loan Portfolio

As part of the Greater Atlantic acquisition, the Bank and the FDIC entered into a loss sharing agreement on approximately $143.4 million (contractual basis) of Greater Atlantic Bank’s assets.  The Bank will share in the losses on the loans and foreclosed loan collateral with the FDIC as specified in the loss sharing agreement; we refer to these assets collectively as “covered assets.”  Loans that are not covered in the loss sharing agreement are referred to as “non-covered loans.”

The following table summarizes the composition of our loan portfolio as of March 31, 2014 and December 31, 2013:

	Covered		Non-covered			Total			Covered		Non-covered			Total
	Loans (1)		Loans			Loans			Loans (1)		Loans			Loans
	March 31, 2014								December 31, 2013
Loans secured by real estate:
Commercial real estate - owner-occupied	$	1,552	$	105,121		$	106,673		$	1,603	$	106,225		$	107,828
Commercial real estate - non-owner-occupied		5,769		148,962			154,731			5,829		150,008			155,837
Secured by farmland		-		504			504			100		508			608
Construction and land loans		-		39,872			39,872			1		39,068			39,069
Residential 1-4 family		16,589		61,222			77,811			16,631		66,482			83,113
Multi- family residential		580		21,414			21,994			585		21,496			22,081
Home equity lines of credit		24,866		7,526			32,392			25,769		6,431			32,200
Total real estate loans		49,356		384,621			433,977			50,518		390,218			440,736
Commercial loans		898		104,258			105,156			1,097		104,284			105,381
Consumer loans		77		1,249			1,326			81		1,308			1,389
Gross loans		50,331		490,128			540,459			51,696		495,810			547,506
Less deferred fees on loans		4		(1,414	)		(1,410	)		5		(1,453	)		(1,448	)
Loans, net of deferred fees	$	50,335	$	488,714		$	539,049		$	51,701	$	494,357		$	546,058

(1) Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

As of March 31, 2014 and December 31, 2013, substantially all of our loans were to customers located in Virginia and Maryland.  We are not dependent on any single customer or group of customers whose insolvency would have a material adverse effect on operations.

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After the strong loan closings in the fourth quarter of 2013, the momentum diminished somewhat in the first quarter of 2014, although going forward the pipeline remains strong. Margin pressure continues but is not as brutal as a year ago.

Total loans outstanding declined from $546.1 million at December 31, 2013 to $539.0 million at the end of the first quarter of 2014. The decline was largely attributable to prepayments on three residential mortgages aggregating $2.8 million and a foreclosure on a $2.4 million residence.

Asset Quality

We will generally place a loan on nonaccrual status when it becomes 90 days past due.  Loans will also be placed on nonaccrual status in cases where we are uncertain whether the borrower can satisfy the contractual terms of the loan agreement.  Cash payments received while a loan is categorized as nonaccrual will be recorded as a reduction of principal as long as doubt exists as to future collections.

We maintain appraisals on loans secured by real estate, particularly those categorized as nonperforming loans and potential problem loans.  In instances where appraisals reflect reduced collateral values, we make an evaluation of the borrower’s overall financial condition to determine the need, if any, for impairment or write-down to their fair values.  If foreclosure occurs, we record other real estate owned at the lower of our recorded investment in the loan or fair value less our estimated costs to sell.

Our loss and delinquency experience on our loan portfolio has been limited by a number of factors, including our underwriting standards and the relatively short period of time since the loans were originated.  Whether our loss and delinquency experience in the area of our portfolio will increase significantly depends upon the value of the real estate securing loans and economic factors such as the overall economy of the region.

Non-covered Loans and Assets

Non-covered loans evaluated for impairment totaled $18.1 million with allocated allowance for loan losses in the amount of $309 thousand as of March 31, 2014, including $3.8 million of nonaccrual loans. This compares to $23.2 million of impaired loans with allocated allowance for loan losses in the amount of $717 thousand at December 31, 2013, including $7.8 million of nonaccrual loans. The nonaccrual loans included SBA guaranteed amounts of $2.4 million $1.9 million at March 31, 2014 and December 31, 2013, respectively.  At March 31, 2014 and December 31, 2013 there were no loans past due 90 days or more and accruing interest.

Non-covered nonperforming assets decreased from $17.4 million at December 31, 2013 to $15.9 million at March 31, 2014.

Non-covered OREO as of March 31, 2014 was $12.1 million compared to $9.6 million as of the end of 2013. During the first quarter of 2014 we disposed of two non-covered properties in the aggregate amount of $1.9 million. In addition, OREO increased by an aggregate of $4.4 million as a result of foreclosures.
 

Sonabank has an internal loan review and a loan committee, both of which provide on-going monitoring to identify and address issues with problem loans.  The loan loss provision is determined after consideration of all known relevant internal and external factors affecting loan collectability to maintain the allowance for loan and lease losses at a level necessary to absorb estimated credit losses. We believe the allowance for loan losses is sufficient to cover probable incurred credit losses at March 31, 2014.

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The following table presents a comparison of non-covered nonperforming assets as of March 31, 2014 and December 31, 2013 (in thousands):

	March 31,			December 31,
	2014			2013
Nonaccrual loans	$	3,828		$	7,814
Loans past due 90 days and accruing interest		-			-
Total nonperforming loans		3,828			7,814
Other real estate owned		12,099			9,579
Total nonperforming assets	$	15,927		$	17,393
SBA guaranteed amounts included in nonaccrual loans	$	2,389		$	1,852
Allowance for loan losses to nonperforming loans		190.83	%		90.08	%
Allowance for loan losses to total non-covered loans		1.49	%		1.42	%
Nonperforming assets excluding SBA guaranteed loans to
total non-covered assets		2.05	%		2.35	%

A modification is classified as a troubled debt restructuring (“TDR”) if both of the following exist: (1) the borrower is experiencing financial difficulty and (2) the Bank has granted a concession to the borrower.  The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future.  Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures.  Concessions may include the reduction of an interest rate at a rate lower than current market rate for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness.  When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers.  The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when determining whether a modification is a TDR.

Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, TDRs are typically modified through reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.

During the periods ending March 31, 2014 and March 31, 2013, there were no loans modified in troubled debt restructurings.  No TDRs defaulted during the quarters ending March 31, 2014 and March 31, 2013, which had been modified in the previous 12 months.

Covered Loans and Assets

Covered loans identified as impaired totaled $4.1 million as of March 31, 2014 and December 31, 2013. Nonaccrual loans were $3.4 million and $1.6 million at March 31, 2014 and December 31, 2013, respectively. At March 31, 2014 and December 31, 2013, there were no loans past due 90 days or more and accruing interest.

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Securities

Investment securities, available for sale and held to maturity, were $88.2 million at March 31, 2014 and $84.4 million at December 31, 2013.  The increase was primarily due to the purchase of $5.0 million in a callable agency security net of repayments in the first quarter of 2014.

At March 31, 2014, we owned pooled trust preferred securities as follows (in thousands):

																			Previously
																% of Current			Recognized
																Defaults and			Cumulative
		Ratings												Estimated		Deferrals to			Other
	Tranche	When Purchased				Current Ratings								Fair		Total			Comprehensive
Security	Level	Moody’s		Fitch		Moody’s		Fitch		Par Value		Book Value		Value		Collateral			Loss (1)
										(in thousands)
ALESCO VII  A1B	Senior		Aaa	AAA			A3	BBB		$	6,340	$	5,750	$	4,107		16	%	$	274
MMCF III B	Senior Sub		A3		A-		Ba1	CC			333		327		202		34	%		6
											6,673		6,077		4,309				$	280
																			Cumulative Other		Cumulative
Other Than Temporarily    Impaired:																			Comprehensive		OTTI Related to
																			Loss (2)		Credit Loss (2)
TPREF FUNDING II	Mezzanine		A1		A-		Caa3		C		1,500		520		520		41	%		605	$	375
TRAP 2007-XII C1	Mezzanine		A3		A		C		C		2,155		57		372		30	%		805		1,293
TRAP 2007-XIII D	Mezzanine		NR		A-		NR		C		2,039		-		168		25	%		7		2,032
MMC FUNDING XVIII	Mezzanine		A3		A-		Ca		C		1,092		27		271		27	%		374		691
ALESCO V C1	Mezzanine		A2		A		C		C		2,149		475		582		15	%		1,013		661
ALESCO XV C1	Mezzanine		A3		A-		C		C		3,245		30		79		33	%		656		2,559
ALESCO XVI  C	Mezzanine		A3		A-		C		C		2,158		120		478		14	%		858		1,180
											14,338		1,229		2,470				$	4,318	$	8,791
Total										$	21,011	$	7,306	$	6,779
(1)  Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion
(2)  Pre-tax

Our largest pooled trust preferred security is ALESCO VII A 1B , which was rated triple A at acquisition which is now rated A3 (Moody’s) and BBB (Fitch).

Each of these securities has been evaluated for potential impairment under accounting guidelines.  In performing a detailed cash flow analysis of each security, Sonabank works with independent third parties to identify the most reflective estimate of the cash flow estimated to be collected. If this estimate results in a present value of expected cash flows that is less than the amortized cost basis of a security (that is, credit loss exists), an OTTI is considered to have occurred. If there is no credit loss, any impairment is considered temporary.

We recognized OTTI charges of $16 thousand during the first quarter of 2014 compared to OTTI charges related to credit on the trust preferred securities totaling $3 thousand during the first quarter of 2013.

Other securities in our investment portfolio are as follows:

●   residential government-sponsored mortgage-backed securities in the amount of $24.7 million and residential government-sponsored collateralized mortgage obligations totaling $4.1 million

●   callable agency securities in the amount of $35.0 million

●   municipal bonds in the amount of $16.5 million with a taxable equivalent yield of 3.11% and ratings as follows:

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Rating		Amount
Service	Rating	(in thousands)
Moody’s	Aaa	$	505
Moody’s	Aa2		3,635
Moody’s	Aa3		721
Moody’s	A1		1,196
Standard & Poor’s	AAA		3,152
Standard & Poor’s	AA		6,681
Standard & Poor’s	AA-		605
		$	16,495

In accordance with regulatory guidance we have performed an independent analysis on each security and monitor the portfolio on an ongoing basis.

●   SARM 2005-22 1A2 in the amount of $645 thousand, a residential collateralized mortgage obligation that is not government-sponsored

Liquidity and Funds Management

The objective of our liquidity management is to assure the ability to meet our financial obligations. These obligations include the payment of deposits on demand or at maturity, the repayment of borrowings at maturity and the ability to fund commitments and other new business opportunities. We obtain funding from a variety of sources, including customer deposit accounts, customer certificates of deposit and payments on our loans and investments. Historically, our level of core deposits has been insufficient to fully fund our lending activities. As a result, we have sought funding from additional sources, including institutional certificates of deposit and the sale of available-for-sale investment securities. In addition, we maintain lines of credit from the Federal Home Loan Bank of Atlanta and utilize securities sold under agreements to repurchase and reverse repurchase agreement borrowings from approved securities dealers.

We prepare a cash flow forecast for one year with the first three months prepared on a weekly basis and on a monthly basis thereafter. The projections incorporate all scheduled maturities of loans excluding impaired loans and all scheduled maturities of out of area certificates of deposit. In addition, prepayments on investment securities are estimated by using a projection produced by our bond accounting system. To estimate loan growth over the one year period, the projection incorporates the scheduled loan closings in the Loan Pipeline Report along with other management estimates.

During the three months ended March 31, 2014, we funded our financial obligations with deposits, securities sold under agreements to repurchase and borrowings from the Federal Home Loan Bank of Atlanta. At March 31, 2014, we had $113.7 million of unfunded lines of credit and undisbursed construction loan funds. Our approved loan commitments were $15.0 million at March 31, 2014. Management anticipates that funding requirements for these commitments can be met from the normal sources of funds.

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Capital Resources

The following table provides a comparison of our leverage and risk-weighted capital ratios and the leverage and risk-weighted capital ratios of the bank at the dates indicated to the minimum and well-capitalized regulatory standards (dollars in thousands):

						Required
						For Capital					To Be Categorized as
	Actual					Adequacy Purposes					Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2014
Southern National
Tier 1 risk-based capital ratio	$	100,784		18.80	%	$	21,443		4.00	%	$	32,164		6.00	%
Total risk-based capital ratio		107,478		20.05	%		42,886		8.00	%		53,607		10.00	%
Leverage ratio		100,784		14.30	%		28,191		4.00	%		35,239		5.00	%
Sonabank
Tier 1 risk-based capital ratio	$	99,880		18.64	%	$	21,431		4.00	%	$	32,146		6.00	%
Total risk-based capital ratio		106,571		19.89	%		42,862		8.00	%		53,577		10.00	%
Leverage ratio		99,880		14.18	%		28,179		4.00	%		35,224		5.00	%
December 31, 2013
Southern National
Tier 1 risk-based capital ratio	$	99,700		18.56	%	$	21,489		4.00	%	$	32,234		6.00	%
Total risk-based capital ratio		106,406		19.81	%		42,978		8.00	%		53,723		10.00	%
Leverage ratio		99,700		14.22	%		28,038		4.00	%		35,048		5.00	%
Sonabank
Tier 1 risk-based capital ratio	$	98,958		18.43	%	$	21,478		4.00	%	$	32,217		6.00	%
Total risk-based capital ratio		105,660		19.68	%		42,956		8.00	%		53,695		10.00	%
Leverage ratio		98,958		14.12	%		28,027		4.00	%		35,034		5.00	%

The most recent regulatory notification categorized Sonabank as well capitalized under the regulatory framework for prompt corrective action.  There are no conditions or events since that notification that management believes have changed Sonabank’s category.

35

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are engaged primarily in the business of investing funds obtained from deposits and borrowings into interest-earning loans and investments.  Consequently, our earnings depend to a significant extent on our net interest income, which is the difference between the interest income on loans and other investments and the interest expense on deposits and borrowings.  To the extent that our interest-bearing liabilities do not reprice or mature at the same time as our interest-earning assets, we are subject to interest rate risk and corresponding fluctuations in net interest income.  We have employed asset/liability management policies that seek to manage our interest income, without having to incur unacceptable levels of credit or investment risk.

We use simulation modeling to manage our interest rate risk, and we review quarterly interest sensitivity reports prepared for us by FTN Financial using the Sendero ALM Analysis System.  This approach uses a model which generates estimates of the change in our economic value of equity (EVE) over a range of interest rate scenarios.  EVE is the present value of expected cash flows from assets, liabilities and off-balance sheet contracts using assumptions about estimated loan prepayment rates, reinvestment rates and deposit decay rates.

During the fourth quarter of 2012, we converted to an enhanced model with FTN Financial that uses detailed data on loans and deposits that is extracted directly from the loan and deposit applications and requires more detailed assumptions about interest rates on new volumes.  The new model also accommodates the analysis of floors, ceilings, etc. on a loan-by-loan basis.  The greater level of input detail provides more meaningful reports compared to the summarized input data previously used.

36

The following tables are based on an analysis prepared by FTN Financial setting forth an analysis of our interest rate risk as measured by the estimated change in EVE resulting from instantaneous and sustained parallel shifts in the yield curve (plus 400 basis points or minus 200 basis points, measured in 100 basis point increments) as of March 31, 2014 and as of December 31, 2013, and all changes are within our ALM Policy guidelines:

	Sensitivity of Economic Value of Equity
	As of March 31, 2014
									Economic Value of
Change in	Economic Value of Equity								Equity as a % of
Interest Rates
in Basis Points			$ Change			% Change			Total			Equity
(Rate Shock)	Amount		From Base			From Base			Assets			Book Value
	(Dollar amounts in thousands)
Up 400	$	107,518	$	(14,953	)		-12.21	%		15.07	%		99.88	%
Up 300		110,059		(12,412	)		-10.13	%		15.43	%		102.24	%
Up 200		113,401		(9,070	)		-7.41	%		15.90	%		105.35	%
Up 100		118,157		(4,314	)		-3.52	%		16.57	%		109.76	%
Base		122,471		-			0.00	%		17.17	%		113.77	%
Down 100		120,508		(1,963	)		-1.60	%		16.90	%		111.95	%
Down 200		117,254		(5,217	)		-4.26	%		16.44	%		108.92	%
	Sensitivity of Economic Value of Equity
	As of December 31, 2013
									Economic Value of
Change in	Economic Value of Equity								Equity as a % of
Interest Rates
in Basis Points			$ Change			% Change			Total			Equity
(Rate Shock)	Amount		From Base			From Base			Assets			Book Value
	(Dollar amounts in thousands)
Up 400	$	104,514	$	(15,340	)		-12.80	%		14.59	%		98.03	%
Up 300		106,947		(12,907	)		-10.77	%		14.93	%		100.31	%
Up 200		110,177		(9,677	)		-8.07	%		15.38	%		103.34	%
Up 100		114,794		(5,060	)		-4.22	%		16.03	%		107.67	%
Base		119,854		-			0.00	%		16.74	%		112.42	%
Down 100		117,479		(2,375	)		-1.98	%		16.40	%		110.19	%
Down 200		114,952		(4,902	)		-4.09	%		16.05	%		107.82	%

Our interest rate sensitivity is also monitored by management through the use of a model run by FTN Financial that generates estimates of the change in the net interest income over a range of interest rate scenarios.  Net interest income depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.  In this regard, the model assumes that the composition of our interest sensitive assets and liabilities existing at March 31, 2014 and December 31, 2013 remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. All changes are within our ALM Policy guidelines.

37

	Sensitivity of Net Interest Income
	As of March 31, 2014
Change in	Adjusted Net Interest Income					Net Interest Margin
Interest Rates
in Basis Points			$ Change						% Change
(Rate Shock)	Amount		From Base			Percent			From Base
	(Dollar amounts in thousands)
Up 400	$	32,663	$	6,436			4.98	%		0.96	%
Up 300		30,656		4,429			4.68	%		0.66	%
Up 200		28,743		2,516			4.40	%		0.38	%
Up 100		27,219		992			4.17	%		0.15	%
Base		26,227		-			4.02	%		0.00	%
Down 100		26,226		(1	)		4.02	%		0.00	%
Down 200		25,895		(332	)		3.97	%		-0.05	%

	Sensitivity of Net Interest Income
	As of December 31, 2013
Change in	Adjusted Net Interest Income					Net Interest Margin
Interest Rates
in Basis Points			$ Change						% Change
(Rate Shock)	Amount		From Base			Percent			From Base
	(Dollar amounts in thousands)
Up 400	$	32,376	$	5,627			4.87	%		0.83	%
Up 300		30,565	$	3,816			4.60	%		0.56	%
Up 200		28,856	$	2,107			4.35	%		0.31	%
Up 100		27,547	$	798			4.16	%		0.12	%
Base		26,749	$	-			4.04	%		0.00	%
Down 100		27,206	$	457			4.11	%		0.07	%
Down 200		26,319	$	(430	)		3.97	%		-0.07	%

38

Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements.  Modeling changes in EVE requires the making of certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.  Accordingly, although the EVE tables and Sensitivity of Net Interest Income (NII) tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to, and do not, provide a precise forecast of the effect of changes in market interest rates on our net worth and net interest income.  Sensitivity of EVE and NII are modeled using different assumptions and approaches.  In the low interest rate environment that currently exists, limitations on downward adjustments for interest rates, particularly as they apply to deposits, can and do result in anomalies in scenarios that are unlikely to occur due to the current low interest rate environment.

39

 ITEM 4 – CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this quarterly report on Form 10-Q, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d -15(c) under the Securities Exchange Act of 1934).  Based upon that evaluation, our chief executive officer and chief financial officer have concluded that these controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting. There have been no changes in Southern National’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

Southern National and Sonabank may, from time to time, be a party to various legal proceedings arising in the ordinary course of business.  There are no proceedings pending, or to management’s knowledge, threatened, against Southern National or Sonabank as of March 31, 2014.

ITEM 1A – RISK FACTORS

As of March 31, 2014 there were no material changes to the risk factors previously disclosed on our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2. – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable

ITEM 3. – DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4. – MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. – OTHER INFORMATION

Not applicable

40

ITEM 6 - EXHIBITS

	(a) Exhibits.
	Exhibit No.	Description
	31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*	Filed with this Quarterly Report on Form 10-Q
**	Furnished with this Quarterly Report on Form 10-Q

41

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Southern National Bancorp of Virginia, Inc.
	(Registrant)
May 9, 2014	/s/ Georgia S. Derrico
(Date)	Georgia S. Derrico,
	Chairman of the Board and Chief Executive Officer
May 9, 2014	/s/ William H. Lagos
(Date)	William H. Lagos,
	Senior Vice President and Chief Financial Officer

42

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Georgia S. Derrico, certify that:

1.  I have reviewed this report on Form 10-Q of Southern National Bancorp of Virginia, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,  as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses  in the design or operation of internal control over financial reporting  which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014

/s/ Georgia S. Derrico

Georgia S. Derrico,

Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, William H. Lagos, certify that:

1.  I have reviewed this report on Form 10-Q of Southern National Bancorp of Virginia, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,  as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses  in the design or operation of internal control over financial reporting  which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014

/s/ William H. Lagos

William H. Lagos,

Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Southern National Bancorp of Virginia, Inc.  (“Southern National”) on Form 10-Q for the period ending March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial officer of Southern National hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 that based on their knowledge and belief:  1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Southern National as of and for the periods covered in the Report.

/s/ Georgia S. Derrico

Georgia S. Derrico, Chief Executive Officer

/s/ William H. Lagos

William H. Lagos, Chief Financial Officer

May 9, 2014

XML

LOANS - Allowance for loan and lease losses (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 7,090
Charge offs	(516)		(555)
Provision for loan losses	1,175		1,093
Ending balance	7,356
Total Loans | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	7,039		6,967
Charge offs	(959)		(1,076)
Recoveries	50		162
Provision for loan losses	1,175		1,099
Ending balance	7,305		7,152
Total Loans | Commercial real estate - owner occupied | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	814		932
Charge offs	(71)
Recoveries	4
Provision for loan losses	(131)		(34)
Ending balance	616		898
Total Loans | Commercial Real Estate Non-owner Occupied | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	985	[1]	1,474	[1]
Charge offs		[1]	(199)	[1]
Recoveries	6	[1]		[1]
Provision for loan losses	(181)	[1]	(84)	[1]
Ending balance	810	[1]	1,191	[1]
Total Loans | Construction and Land Loans | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,068		970
Charge offs			(300)
Recoveries			2
Provision for loan losses	84		376
Ending balance	1,152		1,048
Total Loans | Commercial loans | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,797		2,110
Charge offs	(588)		(399)
Recoveries	35		39
Provision for loan losses	404		345
Ending balance	2,648		2,095
Total Loans | 1-4 Family Residential | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,302	[2]	1,163	[2]
Charge offs	(300)	[2]	(38)	[2]
Recoveries		[2]	121	[2]
Provision for loan losses	100	[2]	50	[2]
Ending balance	1,102	[2]	1,296	[2]
Total Loans | Other consumer loans | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	54		33
Charge offs			(140)
Recoveries	5
Provision for loan losses	(9)		171
Ending balance	50		64
Total Loans | Unallocated | Non-covered Loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	19		285
Charge offs
Recoveries
Provision for loan losses	908		275
Ending balance	$ 927		$ 560

[1] Includes loans secured by farmland and multi-family residential loans.

[2] Includes home equity lines of credit.

XML

FAIR VALUE (Details Textuals 1) (Fair Value, Measurements, Nonrecurring, Other Residential Collateralized Mortgage Obligation Classified as Held-to Maturity)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Measurements, Nonrecurring | Other Residential Collateralized Mortgage Obligation Classified as Held-to Maturity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Prepayment speed	6.10%	4.30%
Default rate	6.40%	8.90%
Loss severity	57.00%	51.00%
Accounting yield	2.38%	1.38%

XML

EARNINGS PER SHARE - Reconciliation of the denominators of the basic and diluted EPS computations (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share [Abstract]
Basic EPS - Income (Numerator) (in dollars)	$ 1,642	$ 1,526
Effect of dilutive stock options and warrants - Income (Numerator) (in dollars)
Diluted EPS - Income (Numerator)	$ 1,642	$ 1,526
Basic EPS- Weighted Average Shares (Denominator) (in shares)	11,591	11,590
Effect of dilutive stock options and warrants- Weighted Average Shares (Denominator) (in shares)	66	26
Diluted EPS- Weighted Average Shares (Denominator) (in shares)	11,657	11,616
Basic EPS - Per Share Amount (in dollars per share)	$ 0.14	$ 0.13
Effect of dilutive stock options and warrants- Per Share Amount (in dollars per share)
Diluted EPS- Per Share Amount (in dollars per share)	$ 0.14	$ 0.13

XML

FAIR VALUE (Details Textuals 2) (USD $)	3 Months Ended			3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014 Minimum	Dec. 31, 2013 Minimum	Mar. 31, 2014 Maximum	Dec. 31, 2013 Maximum	Mar. 31, 2014 Non-covered Loans	Dec. 31, 2013 Non-covered Loans	Mar. 31, 2014 HarVest Loans	Mar. 31, 2014 SBA guaranteed	Dec. 31, 2013 SBA guaranteed
Accounts Notes And Loans Receivable [Line Items]
Non covered Impaired loans								$ 18,100,000	$ 23,200,000
SBA guarantees											2,400,000	2,400,000
Allowances for loan losses	7,356,000		7,090,000					309,000	717,000
HarVest loans										868,000
Fair value of estimated costs related to selling the collateral				6.00%	6.00%	10.00%	10.00%
Charge offs	$ 516,000	$ 555,000

XML

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Detail Textuals) (Letter of Credit, USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Letter of Credit
Line of Credit Facility [Line Items]
Letters of credit outstanding	$ 7.8	$ 6.9

XML

SECURITIES (Detail Textuals 1) (USD $) In Billions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Held to Maturity
Other than temporary impairment performing collateral will default or defer per annum	0.50%
Recoveries ranging	16.00%
Period of no prepayments for security	10 years
Percentage of prepayments for remaining life of the security	1.00%
SBA guaranteed
Held to Maturity
Prepay collateral issued by banks with assets over $15 billion in 2014	15.00%	10.00%
Trust preferred securities
Held to Maturity
Average assets with bank		$ 15

XML

FAIR VALUE (Details Textuals 4) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total other real estate owned	$ 13,755,000	$ 11,792,000
Significant Unobservable Inputs (Level 3) | Non-covered Loans
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Non covered other real estate owned	12,100,000	9,600,000
Other real estate owned acquired		509,000
Significant Unobservable Inputs (Level 3) | Covered loans
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Covered other real estate owned	$ 1,700,000	$ 2,200,000

XML

SECURITIES - Amortized cost and fair value of securities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 2,135	$ 1,993
Obligations of states and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	2,300	2,302
Gross Unrealized Gains
Gross Unrealized Losses	(165)	(309)
Fair Value	$ 2,135	$ 1,993

XML

FAIR VALUE - Assets measured at fair value on recurring basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Available for sale securities
Fair value	$ 2,135	$ 1,993
Fair Value, Measurements, Recurring | Total | Obligations of states and political subdivisions
Available for sale securities
Fair value	2,135	1,993
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Obligations of states and political subdivisions
Available for sale securities
Fair value
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Obligations of states and political subdivisions
Available for sale securities
Fair value	2,135	1,993
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Obligations of states and political subdivisions
Available for sale securities
Fair value

XML

LOANS - Balance in allowance for covered loan losses and recorded investment in covered loans by portfolio segment and based on impairment method (Details 7) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013		Dec. 31, 2012
Ending allowance balance attributable to loans:
Less allowance for loan losses	$ 7,356		$ 7,090
Loans Receivable
Loans:
Total loans	540,459		547,506
Loans Receivable | Commercial real estate - owner occupied
Loans:
Total loans	106,673		107,828
Loans Receivable | Commercial real estate - non-owner occupied
Loans:
Total loans	177,229	[1]	178,526	[1]
Loans Receivable | Construction and land development
Loans:
Total loans	39,872		39,069
Loans Receivable | Commercial loans
Loans:
Total loans	105,156		105,381
Loans Receivable | Residential 1-4 family
Loans:
Total loans	110,203	[2]	115,313	[2]
Loans Receivable | Other consumer loans
Loans:
Total loans	1,326		1,389
Loans Receivable | Covered loans
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment	51		51
Less allowance for loan losses	51		51		66		99
Loans:
Individually evaluated for impairment	4,084		4,110
Collectively evaluated for impairment	46,247		47,586
Total loans	50,331	[3]	51,696	[3]
Loans Receivable | Covered loans | Commercial real estate - owner occupied
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment
Less allowance for loan losses
Loans:
Individually evaluated for impairment	737		745
Collectively evaluated for impairment	815		858
Total loans	1,552		1,603
Loans Receivable | Covered loans | Commercial real estate - non-owner occupied
Ending allowance balance attributable to loans:
Individually evaluated for impairment		[1]		[1]
Collectively evaluated for impairment	45	[1]	45	[1]
Less allowance for loan losses	45	[1]	45	[1]	45	[1]	45	[1]
Loans:
Individually evaluated for impairment	2,137	[1]	2,145	[1]
Collectively evaluated for impairment	4,212	[1]	4,369	[1]
Total loans	6,349	[1]	6,514	[1]
Loans Receivable | Covered loans | Construction and land development
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment
Less allowance for loan losses
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment			1
Total loans			1
Loans Receivable | Covered loans | Commercial loans
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment
Less allowance for loan losses							43
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment	898		1,097
Total loans	898		1,097
Loans Receivable | Covered loans | Residential 1-4 family
Ending allowance balance attributable to loans:
Individually evaluated for impairment		[2]		[2]
Collectively evaluated for impairment		[2]		[2]
Less allowance for loan losses		[2]		[2]		[2]		[2]
Loans:
Individually evaluated for impairment	1,210	[2]	1,220	[2]
Collectively evaluated for impairment	40,245	[2]	41,180	[2]
Total loans	41,455	[2]	42,400	[2]
Loans Receivable | Covered loans | Other consumer loans
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment	6		6
Less allowance for loan losses	6		6		21		11
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment	77		81
Total loans	77		81
Loans Receivable | Covered loans | Unallocated Loan
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment
Less allowance for loan losses
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment
Total loans

[1] Includes loans secured by farmland and multi-family residential loans.

[2] Includes home equity lines of credit.

[3] Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

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LOANS - Average recorded investment and interest income for impaired loans (Details 2) (Total Loans, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	$ 20,521		$ 19,586
With no related allowance recorded, Interest Income Recognized	283		195
With an allowance recorded
With an allowance recorded, Average Recorded Investment	1,257		6,893
With an allowance recorded, Interest IncomeRecognized	4		108
Average Recorded Investment, Grand total	21,778		26,479
Interest Income Recognized, Grand total	287		303
Commercial real estate - owner occupied
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	8,292		4,358
With no related allowance recorded, Interest Income Recognized	140		50
With an allowance recorded
With an allowance recorded, Average Recorded Investment	114		131
With an allowance recorded, Interest IncomeRecognized	4		4
Commercial real estate - non-owner occupied
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	2,495	[1]	3,094	[1]
With no related allowance recorded, Interest Income Recognized	30	[1]	53	[1]
With an allowance recorded
With an allowance recorded, Average Recorded Investment		[1]	976	[1]
With an allowance recorded, Interest IncomeRecognized		[1]	16	[1]
Construction and land development
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment			2,499
With no related allowance recorded, Interest Income Recognized			23
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Commercial loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	3,169		4,924
With no related allowance recorded, Interest Income Recognized	21		13
With an allowance recorded
With an allowance recorded, Average Recorded Investment	1,143
With an allowance recorded, Interest IncomeRecognized
Residential 1-4 family
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	6,565	[2]	4,711	[2]
With no related allowance recorded, Interest Income Recognized	92	[2]	56	[2]
With an allowance recorded
With an allowance recorded, Average Recorded Investment		[2]	5,786	[2]
With an allowance recorded, Interest IncomeRecognized		[2]	88	[2]
Other consumer loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment
With no related allowance recorded, Interest Income Recognized
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Covered loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	4,100		3,981
With no related allowance recorded, Interest Income Recognized	47		60
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Average Recorded Investment, Grand total	4,100		3,981
Interest Income Recognized, Grand total	47		60
Covered loans | Commercial real estate - owner occupied
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	742		137
With no related allowance recorded, Interest Income Recognized	13		5
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Covered loans | Commercial real estate - non-owner occupied
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	2,141	[1]	2,017	[1]
With no related allowance recorded, Interest Income Recognized	21	[1]	32	[1]
With an allowance recorded
With an allowance recorded, Average Recorded Investment		[1]		[1]
With an allowance recorded, Interest IncomeRecognized		[1]		[1]
Covered loans | Construction and land development
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment			48
With no related allowance recorded, Interest Income Recognized
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Covered loans | Commercial loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment			45
With no related allowance recorded, Interest Income Recognized			1
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Covered loans | Residential 1-4 family
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	1,217	[2]	1,734	[2]
With no related allowance recorded, Interest Income Recognized	13	[2]	22	[2]
With an allowance recorded
With an allowance recorded, Average Recorded Investment		[2]		[2]
With an allowance recorded, Interest IncomeRecognized		[2]		[2]
Covered loans | Other consumer loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment
With no related allowance recorded, Interest Income Recognized
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Non-covered Loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	16,421		15,605
With no related allowance recorded, Interest Income Recognized	236		135
With an allowance recorded
With an allowance recorded, Average Recorded Investment	1,257		6,893
With an allowance recorded, Interest IncomeRecognized	4		108
Average Recorded Investment, Grand total	17,678		22,498
Interest Income Recognized, Grand total	240		243
Non-covered Loans | Commercial real estate - owner occupied
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	7,550		4,221
With no related allowance recorded, Interest Income Recognized	127		45
With an allowance recorded
With an allowance recorded, Average Recorded Investment	114		131
With an allowance recorded, Interest IncomeRecognized	4		4
Non-covered Loans | Commercial real estate - non-owner occupied
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	354	[1]	1,077	[1]
With no related allowance recorded, Interest Income Recognized	9	[1]	21	[1]
With an allowance recorded
With an allowance recorded, Average Recorded Investment		[1]	976	[1]
With an allowance recorded, Interest IncomeRecognized		[1]	16	[1]
Non-covered Loans | Construction and land development
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment			2,451
With no related allowance recorded, Interest Income Recognized			23
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized
Non-covered Loans | Commercial loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	3,169		4,879
With no related allowance recorded, Interest Income Recognized	21		12
With an allowance recorded
With an allowance recorded, Average Recorded Investment	1,143
With an allowance recorded, Interest IncomeRecognized
Non-covered Loans | Residential 1-4 family
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment	5,348	[2]	2,977	[2]
With no related allowance recorded, Interest Income Recognized	79	[2]	34	[2]
With an allowance recorded
With an allowance recorded, Average Recorded Investment		[2]	5,786	[2]
With an allowance recorded, Interest IncomeRecognized		[2]	88	[2]
Non-covered Loans | Other consumer loans
With no related allowance recorded
With no related allowance recorded, Average Recorded Investment
With no related allowance recorded, Interest Income Recognized
With an allowance recorded
With an allowance recorded, Average Recorded Investment
With an allowance recorded, Interest IncomeRecognized

[1] Includes loans secured by farmland and multi-family residential loans.

[2] Includes home equity lines of credit.

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FAIR VALUE - Fair Value of Financial Instruments (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Financial assets:
Cash and cash equivalents	$ 19,382	$ 20,856	$ 54,513	$ 39,200
Securities available for sale	2,135	1,993
Securities held to maturity	86,106	82,443
Stock in Federal Reserve Bank and Federal Home Loan Bank	4,793	5,915
FDIC indemnification asset	5,066	5,804
Financial liabilities:
Certificates of deposit	342,004	323,565
Securities sold under agreements to repurchase and other short-term borrowings	19,727	39,795
FHLB advances	25,000	25,000
Carrying Amount
Financial assets:
Cash and cash equivalents	19,382	20,856
Securities available for sale	2,135	1,993
Securities held to maturity	86,106	82,443
Stock in Federal Reserve Bank and Federal Home Loan Bank	4,793	5,915
Net non-covered loans	481,409	487,318
Net covered loans	50,284	51,650
Accrued interest receivable	2,015	2,186
FDIC indemnification asset	5,066	5,804
Financial liabilities:
Demand deposits	69,432	68,940
Money market and savings accounts	144,855	147,854
Certificates of deposit	342,004	323,565
Securities sold under agreements to repurchase and other short-term borrowings	19,727	34,545
FHLB advances	25,000	30,250
Accrued interest payable	371	341
Fair Value
Financial assets:
Cash and cash equivalents	19,382	20,856
Securities available for sale	2,135	1,993
Securities held to maturity	82,631	76,193
Net non-covered loans	487,745	493,472
Net covered loans	56,589	57,564
Accrued interest receivable	2,015	2,186
FDIC indemnification asset	3,606	4,220
Financial liabilities:
Demand deposits	69,432	68,940
Money market and savings accounts	144,855	147,854
Certificates of deposit	342,920	324,733
Securities sold under agreements to repurchase and other short-term borrowings	19,727	34,545
FHLB advances	25,828	31,168
Accrued interest payable	$ 371	$ 341

XML

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Detail Textuals 1) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Unfunded Lines Of Credit and Undisbursed Construction Loan Funds
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Unfunded lines of credit and undisbursed construction loan funds	$ 113.7	$ 105.8
Approved loan commitment
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Unfunded lines of credit and undisbursed construction loan funds	$ 15.0

XML

STOCK- BASED COMPENSATION

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

STOCK-BASED COMPENSATION

2. STOCK- BASED COMPENSATION

In 2004, the Board of Directors adopted a stock option plan that authorized the reservation of up to 302,500 shares of common stock and provided for the granting of stock options to certain directors, officers and employees.  As of March 31, 2014, options to purchase an aggregate of 302,500 shares of common stock were outstanding and no shares remained available for issuance. The 2010 Stock Awards and Incentive Plan was approved by the Board of Directors in January 2010 and approved by the stockholders at the Annual Meeting in April 2010. The 2010 plan authorized the reservation of 700,000 shares of common stock for the granting of stock awards. The options granted to officers and employees are incentive stock options and the options granted to non-employee directors are non-qualified stock options.  The purpose of the plan is to afford key employees an incentive to remain in the employ of Southern National and to assist in the attracting and retaining of non-employee directors by affording them an opportunity to share in Southern National’s future success.  Under the plan, the option’s price cannot be less than the fair market value of the stock on the grant date.  The maximum term of the options is ten years and options granted may be subject to a graded vesting schedule.

Southern National granted no options during the first three months of 2014.

For the three months ended March 31, 2014 and 2013, stock-based compensation expense was $77 thousand and $64 thousand, respectively.  As of March 31, 2014, unrecognized compensation expense associated with the stock options was $854 thousand, which is expected to be recognized over a weighted average period of 3.4 years.

A summary of the activity in the stock option plan during the three months ended March 31, 2014 follows (dollars in thousands):

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
				Exercise		Contractual		Value
	Shares			Price		Term		(in thousands)
Options outstanding, beginning of period		631,075		$	8.21
Granted		-			-
Forfeited		-			-
Exercised		(4,300	)		6.87
Options outstanding, end of period		626,775		$	8.22		5.8	$	1,248
Vested or expected to vest		626,775		$	8.22		5.8	$	1,248
Exercisable at end of period		367,275		$	8.19		3.9	$	749

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LOANS - Risk category of loans by class of loans (Details 8) (Total Loans, USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	$ 106,673		$ 107,828
Commercial real estate - non-owner occupied	177,229	[1]	178,526	[1]
Construction and land development	39,872		39,069
Commercial loans	105,156		105,381
Residential 1-4 family	110,203	[2]	115,313	[2]
Consumer loans	1,326		1,389
Total loans	540,459		547,506
Classified/Criticized
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	9,266		9,423
Commercial real estate - non-owner occupied	2,484	[1]	2,504	[1]
Construction and land development	618		2,725
Commercial loans	4,355		4,904
Residential 1-4 family	7,111	[2]	9,391	[2]
Consumer loans
Total loans	23,834		28,947
Pass
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	97,407		98,405
Commercial real estate - non-owner occupied	174,745	[1]	176,022	[1]
Construction and land development	39,254		36,344
Commercial loans	100,801		100,477
Residential 1-4 family	103,092	[2]	105,922	[2]
Consumer loans	1,326		1,389
Total loans	516,625		518,559
Covered loans
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	1,552	[3]	1,603	[3]
Commercial real estate - non-owner occupied	6,349	[1]	6,514	[1]
Construction and land development		[3]	1	[3]
Commercial loans	898	[3]	1,097	[3]
Residential 1-4 family	41,455	[2]	42,400	[2]
Consumer loans	77	[3]	81	[3]
Total loans	50,331	[3]	51,696	[3]
Covered loans | Classified/Criticized
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	737	[4]	745	[4]
Commercial real estate - non-owner occupied	2,137	[1],[4]	2,145	[1],[4]
Construction and land development		[4]		[4]
Commercial loans		[4]		[4]
Residential 1-4 family	1,210	[2],[4]	1,220	[2],[4]
Consumer loans		[4]		[4]
Total loans	4,084	[4]	4,110	[4]
Covered loans | Pass
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	815		858
Commercial real estate - non-owner occupied	4,212	[1]	4,369	[1]
Construction and land development			1
Commercial loans	898		1,097
Residential 1-4 family	40,245	[2]	41,180	[2]
Consumer loans	77		81
Total loans	46,247		47,586
Non-covered Loans
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	105,121		106,225
Commercial real estate - non-owner occupied	170,880	[1]	172,012	[1]
Construction and land development	39,872		39,068
Commercial loans	104,258		104,284
Residential 1-4 family	68,748	[2]	72,913	[2]
Consumer loans	1,249		1,308
Total loans	490,128		495,810
Non-covered Loans | Special Mention
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	796		802
Commercial real estate - non-owner occupied		[1]		[1]
Construction and land development	618		618
Commercial loans	31		31
Residential 1-4 family	171	[2]	176	[2]
Consumer loans
Total loans	1,616		1,627
Non-covered Loans | Substandard
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	7,733	[5]	7,876	[5]
Commercial real estate - non-owner occupied	347	[1],[5]	359	[1],[5]
Construction and land development		[5]	2,107	[5]
Commercial loans	4,324	[5]	4,873	[5]
Residential 1-4 family	5,730	[2],[5]	7,995	[2],[5]
Consumer loans		[5]		[5]
Total loans	18,134	[5]	23,210	[5]
Non-covered Loans | Pass
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	96,592		97,547
Commercial real estate - non-owner occupied	170,533	[1]	171,653	[1]
Construction and land development	39,254		36,343
Commercial loans	99,903		99,380
Residential 1-4 family	62,847	[2]	64,742	[2]
Consumer loans	1,249		1,308
Total loans	$ 470,378		$ 470,973

[1] Includes loans secured by farmland and multi-family residential loans.

[2] Includes home equity lines of credit.

[3] Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

[4] Credit quality is enhanced by a loss sharing agreement with the FDIC in the covered portfolio. The same credit quality indicators used in the non-covered portfolio are combined.

[5] Includes SBA guarantees of $2.4 million as of March 31, 2014 and December 31, 2013.

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SECURITIES - Owned pooled trust preferred securities (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013	Dec. 31, 2013
Other than temporarily impaired
Cumulative other comprehensive loss
Cumulative OTTI related to credit loss
Estimated fair value	82,631			76,193
Trust preferred securities
Security
Par value - security	6,673
Book value - security	6,077
Estimated fair value - security	4,309
Previously recognized cumulative other comprehensive loss	280	[1]
Other than temporarily impaired
Par value - other than temporarily impaired	14,338
Book value - other than temporarily impaired	1,229
Estimated fair value - other than temporarily impaired	2,470
Cumulative other comprehensive loss	4,318	[2]
Cumulative OTTI related to credit loss	8,791	[2]
Par value	21,011
Book value	7,306
Estimated fair value	6,779			6,232
Trust preferred securities | ALESCO VII A1B Senior | Rating Of Moody AAA Fitch AAA When Purchased and Current Moody A3 Fitch BBB
Security
Par value - security	6,340
Book value - security	5,750
Estimated fair value - security	4,107
Current deferrals and defaults - security	16.00%
Previously recognized cumulative other comprehensive loss	274	[1]
Trust preferred securities | MMCF III B Senior Sub | Rating Of Moody A3 Fitch A- When Purchased and Current Moody Ba1 Fitch CC
Security
Par value - security	333
Book value - security	327
Estimated fair value - security	202
Current deferrals and defaults - security	34.00%
Previously recognized cumulative other comprehensive loss	6	[1]
Trust preferred securities | TPREF FUNDING II Mezzanine | Rating Of Moody A1 Fitch A- When Purchased and Current Moody Caa3 Fitch C
Other than temporarily impaired
Par value - other than temporarily impaired	1,500
Book value - other than temporarily impaired	520
Estimated fair value - other than temporarily impaired	520
Current Deferrals and Defaults - other than temporarily impaired	41.00%
Cumulative other comprehensive loss	605	[2]
Cumulative OTTI related to credit loss	375	[2]
Trust preferred securities | TRAP 2007-XII C1 Mezzanine | Rating Of Moody A3 Fitch A When Purchased and Current Moody C Fitch C
Other than temporarily impaired
Par value - other than temporarily impaired	2,155
Book value - other than temporarily impaired	57
Estimated fair value - other than temporarily impaired	372
Current Deferrals and Defaults - other than temporarily impaired	30.00%
Cumulative other comprehensive loss	805	[2]
Cumulative OTTI related to credit loss	1,293	[2]
Trust preferred securities | TRAP 2007-XIII D Mezzanine | Rating Of Fitch A- When Purchased and Current Fitch C
Other than temporarily impaired
Par value - other than temporarily impaired	2,039
Book value - other than temporarily impaired
Estimated fair value - other than temporarily impaired	168
Current Deferrals and Defaults - other than temporarily impaired	25.00%
Cumulative other comprehensive loss	7	[2]
Cumulative OTTI related to credit loss	2,032	[2]
Trust preferred securities | MMC FUNDING XVIII Mezzanine | Rating Of Moody A3 Fitch A- When Purchased and Current Moody Ca Fitch C
Other than temporarily impaired
Par value - other than temporarily impaired	1,092
Book value - other than temporarily impaired	27
Estimated fair value - other than temporarily impaired	271
Current Deferrals and Defaults - other than temporarily impaired	27.00%
Cumulative other comprehensive loss	374	[2]
Cumulative OTTI related to credit loss	691	[2]
Trust preferred securities | ALESCO V C1 Mezzanine | Rating Of Moody A2 Fitch A When Purchased and Current Moody C Fitch C
Other than temporarily impaired
Par value - other than temporarily impaired	2,149
Book value - other than temporarily impaired	475
Estimated fair value - other than temporarily impaired	582
Current Deferrals and Defaults - other than temporarily impaired	15.00%
Cumulative other comprehensive loss	1,013	[2]
Cumulative OTTI related to credit loss	661	[2]
Trust preferred securities | ALESCO XV C1Mezzanine | Rating Of Moody A3 Fitch A- When Purchased and Current Moody C Fitch C
Other than temporarily impaired
Par value - other than temporarily impaired	3,245
Book value - other than temporarily impaired	30
Estimated fair value - other than temporarily impaired	79
Current Deferrals and Defaults - other than temporarily impaired	33.00%
Cumulative other comprehensive loss	656	[2]
Cumulative OTTI related to credit loss	2,559	[2]
Trust preferred securities | ALESCO XVI C Mezzanine | Rating Of Moody A3 Fitch A- When Purchased and Current Moody C Fitch C
Other than temporarily impaired
Par value - other than temporarily impaired	2,158
Book value - other than temporarily impaired	120
Estimated fair value - other than temporarily impaired	478
Current Deferrals and Defaults - other than temporarily impaired	14.00%
Cumulative other comprehensive loss	858	[2]
Cumulative OTTI related to credit loss	$ 1,180	[2]

[1] Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion

[2] Pre-tax

XML

SECURITIES - Securities in continuous unrealized loss position (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Held to Maturity
Held to maturity, less than 12 months, fair value	$ 34,372	$ 35,335
Held to Maturity, less than 12 months unrecognized losses	(1,444)	(2,493)
Held to Maturity, 12 months or more, fair value	25,749	24,378
Held to Maturity, 12 months or more, unrecognized losses	(4,021)	(5,371)
Held to maturity, total fair value	60,121	59,713
Held to maturity, total unrecognized losses	(5,465)	(7,864)
Obligations of states and political subdivisions
Held to Maturity
Available for sale, less than 12 months, fair value		409
Available for sale, less than 12 months, unrecognized losses		(78)
Available for sale, 12 months or more, fair value	2,135	1,584
Available for sale, 12 months or more, unrecognized losses	(165)	(231)
Available for sale, total fair value	2,135	1,993
Available for sale, total unrecognized losses	(165)	(309)
Held to maturity, less than 12 months, fair value	8,875	10,327
Held to Maturity, less than 12 months unrecognized losses	(292)	(588)
Held to Maturity, 12 months or more, fair value	3,442	3,064
Held to Maturity, 12 months or more, unrecognized losses	(263)	(399)
Held to maturity, total fair value	12,317	13,391
Held to maturity, total unrecognized losses	(555)	(987)
Residential government-sponsored mortgage-backed securities
Held to Maturity
Held to maturity, less than 12 months, fair value	12,392	12,644
Held to Maturity, less than 12 months unrecognized losses	(172)	(294)
Held to Maturity, 12 months or more, fair value
Held to Maturity, 12 months or more, unrecognized losses
Held to maturity, total fair value	12,392	12,644
Held to maturity, total unrecognized losses	(172)	(294)
Residential government-sponsored collateralized mortgage obligations
Held to Maturity
Held to maturity, less than 12 months, fair value	4,041	2,984
Held to Maturity, less than 12 months unrecognized losses	(60)	(349)
Held to Maturity, 12 months or more, fair value
Held to Maturity, 12 months or more, unrecognized losses
Held to maturity, total fair value	4,041	2,984
Held to maturity, total unrecognized losses	(60)	(349)
Government-Sponsored Agency Securities
Held to Maturity
Held to maturity, less than 12 months, fair value	9,064	8,733
Held to Maturity, less than 12 months unrecognized losses	(920)	(1,250)
Held to Maturity, 12 months or more, fair value	17,998	17,244
Held to Maturity, 12 months or more, unrecognized losses	(1,990)	(2,744)
Held to maturity, total fair value	27,062	25,977
Held to maturity, total unrecognized losses	(2,910)	(3,994)
Other residential collateralized mortgage obligations
Held to Maturity
Held to maturity, less than 12 months, fair value		647
Held to Maturity, less than 12 months unrecognized losses		(12)
Held to Maturity, 12 months or more, fair value
Held to Maturity, 12 months or more, unrecognized losses
Held to maturity, total fair value		647
Held to maturity, total unrecognized losses		(12)
Trust preferred securities
Held to Maturity
Held to maturity, less than 12 months, fair value
Held to Maturity, less than 12 months unrecognized losses
Held to Maturity, 12 months or more, fair value	4,309	4,070
Held to Maturity, 12 months or more, unrecognized losses	(1,768)	(2,228)
Held to maturity, total fair value	4,309	4,070
Held to maturity, total unrecognized losses	$ (1,768)	$ (2,228)

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FAIR VALUE (Details Textuals 3)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation [Line Items]
Description of other real estate owned loan collateral liquidation expenses	Fair value is classified as Level 3 in the fair value hierarchy. OREO is further evaluated quarterly for any additional impairment.
Minimum
Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percentage of selling costs on other real estate owned	6.00%	6.00%
Maximum
Fair Value, Assets Measured On Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percentage of selling costs on other real estate owned	7.60%	7.60%

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LOANS (Details Textuals) (Loans Receivable, USD $)													3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Covered loans		Dec. 31, 2013 Covered loans		Mar. 31, 2014 Covered loans Greater Atlantic Bank	Mar. 31, 2014 Covered loans HarVest Bank of Maryland	Dec. 31, 2013 Covered loans HarVest Bank of Maryland	Mar. 31, 2014 Non-covered Loans	Dec. 31, 2013 Non-covered Loans	Dec. 31, 2013 Non-covered Loans HarVest Bank of Maryland	Mar. 31, 2014 FDIC Agreement	Mar. 31, 2014 FDIC Single family loans	Mar. 31, 2014 FDIC Non-Single Family (Commercial)
Accounts Notes And Loans Receivable [Line Items]
Loss sharing agreement							$ 143,400,000
Total loans	540,459,000	547,506,000	50,331,000	[1]	51,696,000	[1]				490,128,000	495,810,000	38,100,000
Accretable discount on the acquired covered loans								$ 8,300,000	$ 8,900,000
Number of agreements													2
Term loan agreement expiring														10 years	5 years

[1] Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

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SECURITIES - Roll forward of credit losses (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1	$ 8,911	$ 8,964
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized	16	3
Reductions due to realized losses	(2)	(25)
Amount of cumulative other-than-temporary impairment related to credit loss as of March 31	$ 8,925	$ 8,942

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SECURITIES - Changes in accumulated other comprehensive income by component (Details 6) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income (Loss) Net Of Tax [Roll Forward]
Beginning balance	$ (3,190)	$ (2,981)
Other comprehensive income/(loss) before reclassifications	95	59
Amounts reclassified from accumulated other comprehensive income/(loss)		(95)
Net current-period other comprehensive income/(loss)	95	(36)
Ending balance	(3,095)	(3,017)
Unrealized Holding Gains (Losses) on Available for Sale Securities
Accumulated Other Comprehensive Income (Loss) Net Of Tax [Roll Forward]
Beginning balance	(203)	44
Other comprehensive income/(loss) before reclassifications	94	(1)
Amounts reclassified from accumulated other comprehensive income/(loss)		(93)
Net current-period other comprehensive income/(loss)	94	(94)
Ending balance	(109)	(50)
Held to Maturity Securities
Accumulated Other Comprehensive Income (Loss) Net Of Tax [Roll Forward]
Beginning balance	(2,987)	(3,025)
Other comprehensive income/(loss) before reclassifications	1	60
Amounts reclassified from accumulated other comprehensive income/(loss)		(2)
Net current-period other comprehensive income/(loss)	1	58
Ending balance	$ (2,986)	$ (2,967)

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ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

ACCOUNTING POLICIES

1.         ACCOUNTING POLICIES

Southern National Bancorp of Virginia, Inc. (“Southern National” or “SNBV”) is a corporation formed on July 28, 2004 under the laws of the Commonwealth of Virginia and is the holding company for Sonabank (“Sonabank”) a Virginia state chartered bank which commenced operations on April 14, 2005.  The principal activities of Sonabank are to attract deposits and originate loans as permitted under applicable banking regulations.  Sonabank operates 15 branches in Virginia located in Fairfax County (Reston, McLean and Fairfax), in Charlottesville, Warrenton (2), Loudoun County (Middleburg, Leesburg (2), and South Riding), Front Royal, New Market, Richmond, Haymarket and Clifton Forge, and five branches in Maryland (four in Montgomery County and one in Frederick County).

The consolidated financial statements include the accounts of Southern National Bancorp of Virginia, Inc. and its subsidiary.  Significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“U. S. GAAP”) for interim financial information and instructions for Form 10-Q and follow general practice within the banking industry.  Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by U. S. GAAP for complete financial statements.  However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in Southern National’s Form 10-K for the year ended December 31, 2013.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U. S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the carrying value of investment securities, other than temporary impairment of investment securities, the valuation of goodwill and intangible assets, the FDIC indemnification asset,  mortgage servicing rights, other real estate owned and deferred tax assets.

Recent Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-04, “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” The objective of this guidance is to clarify when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Southern National’s Consolidated Financial Statements.

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SECURITIES (Detail Textuals) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Federal Home Loan Bank of Atlanta	Dec. 31, 2013 Federal Home Loan Bank of Atlanta
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Securities with a carrying amount were pledged to secure public deposits			$ 69,200,000	$ 65,300,000
Temporarily impaired securities	$ 16,000	$ 3,000	$ 62,300,000

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LOANS - Activity in allowance for covered loan and lease losses by class of loan (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 7,090
Charge offs	(516)		(555)
Provision for loan losses	1,175		1,093
Ending balance	7,356
Loans Receivable | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	51		99
Charge offs
Recoveries
Adjustments		[1]	(27)	[1]
Provision for loan losses			(6)
Ending balance	51		66
Loans Receivable | Commercial real estate - owner occupied | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance
Charge offs
Recoveries
Adjustments		[1]		[1]
Provision for loan losses
Ending balance
Loans Receivable | Commercial Real Estate Non-owner Occupied | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	45	[2]	45	[2]
Charge offs		[2]		[2]
Recoveries		[2]		[2]
Adjustments		[1],[2]		[1],[2]
Provision for loan losses		[2]		[2]
Ending balance	45	[2]	45	[2]
Loans Receivable | Construction and Land Loans | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance
Charge offs
Recoveries
Adjustments		[1]		[1]
Provision for loan losses
Ending balance
Loans Receivable | Commercial loans | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			43
Charge offs
Recoveries
Adjustments		[1]	(35)	[1]
Provision for loan losses			(8)
Ending balance
Loans Receivable | 1-4 Family Residential | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance		[3]		[3]
Charge offs		[3]		[3]
Recoveries		[3]		[3]
Adjustments		[1],[3]		[1],[3]
Provision for loan losses		[3]		[3]
Ending balance		[3]		[3]
Loans Receivable | Other consumer loans | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	6		11
Charge offs
Recoveries
Adjustments		[1]	8	[1]
Provision for loan losses			2
Ending balance	6		21
Loans Receivable | Unallocated | Covered loans
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance
Charge offs
Recoveries
Adjustments		[1]		[1]
Provision for loan losses
Ending balance

[1] Represents the portion of increased expected losses which is covered by the loss sharing agreement with the FDIC.

[2] Includes loans secured by farmland and multi-family residential loans.

[3] Includes home equity lines of credit.

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FAIR VALUE (Details Textuals) (Trust Preferred Securities)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Minimum / Maximum Liquidity Premiums	2.00%	2.00%
Minimum / Maximum Adjusted discount rates	9.30%	10.97%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Minimum / Maximum Liquidity Premiums	5.00%	5.00%
Minimum / Maximum Adjusted discount rates	14.49%	14.97%

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CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Cash and cash equivalents:
Cash and due from financial institutions	$ 3,710	$ 2,679
Interest-bearing deposits in other financial institutions	15,672	18,177
Total cash and cash equivalents	19,382	20,856
Securities available for sale, at fair value	2,135	1,993
Securities held to maturity, at amortized cost (fair value of $82,631 and $76,193, respectively)	86,106	82,443
Total loans	539,049	546,058
Less allowance for loan losses	(7,356)	(7,090)
Net loans	531,693	538,968
Stock in Federal Reserve Bank and Federal Home Loan Bank	4,793	5,915
Bank premises and equipment, net	6,260	6,324
Goodwill	9,160	9,160
Core deposit intangibles, net	768	813
FDIC indemnification asset	5,066	5,804
Bank-owned life insurance	20,514	18,374
Other Real Estate Owned	13,755	11,792
Deferred tax assets, net	8,130	8,281
Other assets	5,466	5,462
Total assets	713,228	716,185
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits	46,975	44,643
Interest-bearing deposits:
NOW accounts	22,457	24,297
Money market accounts	127,445	130,855
Savings accounts	17,410	16,999
Time deposits	342,004	323,565
Total interest-bearing deposits	509,316	495,716
Total deposits	556,291	540,359
Securities sold under agreements to repurchase and other short-term borrowings	19,727	39,795
Federal Home Loan Bank (FHLB) advances	25,000	25,000
Other liabilities	4,563	4,417
Total liabilities	605,581	609,571
Commitments and contingencies (See Note 5)
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 5,000,000 shares; no shares issued and outstanding
Common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding, 11,594,912 shares at March 31, 2014 and 11,590,612 at December 31, 2013	116	116
Additional paid in capital	97,234	97,127
Retained earnings	13,392	12,561
Accumulated other comprehensive loss	(3,095)	(3,190)
Total stockholders' equity	107,647	106,614
Total liabilities and stockholders' equity	713,228	716,185
Covered loans
Cash and cash equivalents:
Total loans	50,335	51,701
Non-covered loans
Cash and cash equivalents:
Total loans	$ 488,714	$ 494,357

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LOANS (Details Textuals 1) (Loans Receivable, Non-covered Loans, USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Accounts Notes And Loans Receivable [Line Items]
Charge off on Recorded investment	$ 1.7	$ 1.4
SBA guaranteed
Accounts Notes And Loans Receivable [Line Items]
SBA guarantees	$ 2.4	$ 2.4

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Statement Of Stockholders Equity [Abstract]
Tax on change in unrealized loss on securities available for sale	$ 49
Tax on change in unrecognized loss on securities held to maturity, portion of OTTI	0
Accretion on change in unrecognized loss on securities held to maturity, portion of OTTI	$ 20
Common stock dividends per share (in dollars per share)	$ 0.07
Issuance of common shares under Stock Incentive Plan (in shares)	4,300

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LOANS - Summary (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Accounts Notes And Loans Receivable [Line Items]
Loans, net of deferred fees	$ 531,693		$ 538,968
Total Loans
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	106,673		107,828
Commercial real estate - non-owner-occupied	154,731		155,837
Secured by farmland	504		608
Construction and land development	39,872		39,069
Residential 1-4 family	77,811		83,113
Multi- family residential	21,994		22,081
Home equity lines of credit	32,392		32,200
Total real estate loans	433,977		440,736
Commercial loans	105,156		105,381
Consumer loans	1,326		1,389
Gross loans	540,459		547,506
Less deferred fees on loans	(1,410)		(1,448)
Loans, net of deferred fees	539,049		546,058
Total Loans | Covered loans
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	1,552	[1]	1,603	[1]
Commercial real estate - non-owner-occupied	5,769	[1]	5,829	[1]
Secured by farmland		[1]	100	[1]
Construction and land development		[1]	1	[1]
Residential 1-4 family	16,589	[1]	16,631	[1]
Multi- family residential	580	[1]	585	[1]
Home equity lines of credit	24,866	[1]	25,769	[1]
Total real estate loans	49,356	[1]	50,518	[1]
Commercial loans	898	[1]	1,097	[1]
Consumer loans	77	[1]	81	[1]
Gross loans	50,331	[1]	51,696	[1]
Less deferred fees on loans	4	[1]	5	[1]
Loans, net of deferred fees	50,335	[1]	51,701	[1]
Total Loans | Non-covered Loans
Accounts Notes And Loans Receivable [Line Items]
Commercial real estate - owner-occupied	105,121		106,225
Commercial real estate - non-owner-occupied	148,962		150,008
Secured by farmland	504		508
Construction and land development	39,872		39,068
Residential 1-4 family	61,222		66,482
Multi- family residential	21,414		21,496
Home equity lines of credit	7,526		6,431
Total real estate loans	384,621		390,218
Commercial loans	104,258		104,284
Consumer loans	1,249		1,308
Gross loans	490,128		495,810
Less deferred fees on loans	(1,414)		(1,453)
Loans, net of deferred fees	$ 488,714		$ 494,357

[1] Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

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ACCOUNTING POLICIES (Detail Textuals) (Sonabank)	3 Months Ended
	Mar. 31, 2014 Branch
Virginia
Organization And Significant Accounting Policies [Line Items]
Number of branches	15
Warrenton
Organization And Significant Accounting Policies [Line Items]
Number of branches	2
Maryland
Organization And Significant Accounting Policies [Line Items]
Number of branches	5
Maryland | Montgomery
Organization And Significant Accounting Policies [Line Items]
Number of branches	4
Maryland | Frederick
Organization And Significant Accounting Policies [Line Items]
Number of branches	1
South Riding | Loudoun
Organization And Significant Accounting Policies [Line Items]
Number of branches	1
Front Royal
Organization And Significant Accounting Policies [Line Items]
Number of branches	1
New Market
Organization And Significant Accounting Policies [Line Items]
Number of branches	1
Richmond
Organization And Significant Accounting Policies [Line Items]
Number of branches	1
Haymarket
Organization And Significant Accounting Policies [Line Items]
Number of branches	1
Clifton Forge
Organization And Significant Accounting Policies [Line Items]
Number of branches	1
Middleburg and Leesburg | Loudoun
Organization And Significant Accounting Policies [Line Items]
Number of branches	2

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LOANS - Impaired loans (Details 1) (Total Loans, USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
With no related allowance recorded
With no related allowance recorded - Recorded Investment	$ 21,191		$ 22,565
With no related allowance recorded - Unpaid Principal Balance	22,494		23,990
With an allowance recorded
With an allowance recorded - Recorded Investment	1,027		4,755
With an allowance recorded - Unpaid Principal Balance	2,227		5,655
With an allowance recorded - Allowance for Loan Losses Allocated	309		717
Recorded Investment, Grand total	22,218		27,320
Unpaid Principal Balance, Grand total	24,721		29,645
Related Allowance, Grand total	309		717
Commercial real estate - owner occupied
With no related allowance recorded
With no related allowance recorded - Recorded Investment	8,361		8,221
With no related allowance recorded - Unpaid Principal Balance	8,530		8,320
With an allowance recorded
With an allowance recorded - Recorded Investment	109		400
With an allowance recorded - Unpaid Principal Balance	209		500
With an allowance recorded - Allowance for Loan Losses Allocated	109		192
Commercial real estate - non-owner occupied
With no related allowance recorded
With no related allowance recorded - Recorded Investment	2,484	[1]	2,504	[1]
With no related allowance recorded - Unpaid Principal Balance	2,912	[1]	2,935	[1]
With an allowance recorded
With an allowance recorded - Recorded Investment		[1]		[1]
With an allowance recorded - Unpaid Principal Balance		[1]		[1]
With an allowance recorded - Allowance for Loan Losses Allocated		[1]		[1]
Construction and land development
With no related allowance recorded
With no related allowance recorded - Recorded Investment			2,107
With no related allowance recorded - Unpaid Principal Balance			2,307
With an allowance recorded
With an allowance recorded - Recorded Investment
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Commercial loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment	3,406		3,155
With no related allowance recorded - Unpaid Principal Balance	3,844		3,631
With an allowance recorded
With an allowance recorded - Recorded Investment	918		1,718
With an allowance recorded - Unpaid Principal Balance	2,018		2,518
With an allowance recorded - Allowance for Loan Losses Allocated	200		325
Residential 1-4 family
With no related allowance recorded
With no related allowance recorded - Recorded Investment	6,940	[2]	6,578	[2]
With no related allowance recorded - Unpaid Principal Balance	7,208	[2]	6,797	[2]
With an allowance recorded
With an allowance recorded - Recorded Investment		[2]	2,637	[2]
With an allowance recorded - Unpaid Principal Balance		[2]	2,637	[2]
With an allowance recorded - Allowance for Loan Losses Allocated		[2]	200	[2]
Other consumer loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment
With no related allowance recorded - Unpaid Principal Balance
With an allowance recorded
With an allowance recorded - Recorded Investment
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Covered loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment	4,084		4,110
With no related allowance recorded - Unpaid Principal Balance	4,739		4,769
With an allowance recorded
With an allowance recorded - Recorded Investment
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Recorded Investment, Grand total	4,084		4,110
Unpaid Principal Balance, Grand total	4,739		4,769
Related Allowance, Grand total
Covered loans | Commercial real estate - owner occupied
With no related allowance recorded
With no related allowance recorded - Recorded Investment	737		745
With no related allowance recorded - Unpaid Principal Balance	835		844
With an allowance recorded
With an allowance recorded - Recorded Investment
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Covered loans | Commercial real estate - non-owner occupied
With no related allowance recorded
With no related allowance recorded - Recorded Investment	2,137	[1]	2,145	[1]
With no related allowance recorded - Unpaid Principal Balance	2,477	[1]	2,486	[1]
With an allowance recorded
With an allowance recorded - Recorded Investment		[1]		[1]
With an allowance recorded - Unpaid Principal Balance		[1]		[1]
With an allowance recorded - Allowance for Loan Losses Allocated		[1]		[1]
Covered loans | Construction and land development
With no related allowance recorded
With no related allowance recorded - Recorded Investment
With no related allowance recorded - Unpaid Principal Balance
With an allowance recorded
With an allowance recorded - Recorded Investment
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Covered loans | Commercial loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment
With no related allowance recorded - Unpaid Principal Balance
With an allowance recorded
With an allowance recorded - Recorded Investment
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Covered loans | Residential 1-4 family
With no related allowance recorded
With no related allowance recorded - Recorded Investment	1,210	[2]	1,220	[2]
With no related allowance recorded - Unpaid Principal Balance	1,427	[2]	1,439	[2]
With an allowance recorded
With an allowance recorded - Recorded Investment		[2]		[2]
With an allowance recorded - Unpaid Principal Balance		[2]		[2]
With an allowance recorded - Allowance for Loan Losses Allocated		[2]		[2]
Covered loans | Other consumer loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment
With no related allowance recorded - Unpaid Principal Balance
With an allowance recorded
With an allowance recorded - Recorded Investment
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Non-covered Loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment	17,107	[3]	18,455	[4]
With no related allowance recorded - Unpaid Principal Balance	17,755		19,221
With an allowance recorded
With an allowance recorded - Recorded Investment	1,027	[3]	4,755	[4]
With an allowance recorded - Unpaid Principal Balance	2,227		5,655
With an allowance recorded - Allowance for Loan Losses Allocated	309		717
Recorded Investment, Grand total	18,134	[3]	23,210	[4]
Unpaid Principal Balance, Grand total	19,982		24,876
Related Allowance, Grand total	309		717
Non-covered Loans | Commercial real estate - owner occupied
With no related allowance recorded
With no related allowance recorded - Recorded Investment	7,624	[3]	7,476	[4]
With no related allowance recorded - Unpaid Principal Balance	7,695		7,476
With an allowance recorded
With an allowance recorded - Recorded Investment	109	[3]	400	[4]
With an allowance recorded - Unpaid Principal Balance	209		500
With an allowance recorded - Allowance for Loan Losses Allocated	109		192
Non-covered Loans | Commercial real estate - non-owner occupied
With no related allowance recorded
With no related allowance recorded - Recorded Investment	347	[1],[3]	359	[1],[4]
With no related allowance recorded - Unpaid Principal Balance	435	[1]	449	[1]
With an allowance recorded
With an allowance recorded - Recorded Investment		[1],[3]		[1],[4]
With an allowance recorded - Unpaid Principal Balance		[1]		[1]
With an allowance recorded - Allowance for Loan Losses Allocated		[1]		[1]
Non-covered Loans | Construction and land development
With no related allowance recorded
With no related allowance recorded - Recorded Investment		[3]	2,107	[4]
With no related allowance recorded - Unpaid Principal Balance			2,307
With an allowance recorded
With an allowance recorded - Recorded Investment		[3]		[4]
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated
Non-covered Loans | Commercial loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment	3,406	[3]	3,155	[4]
With no related allowance recorded - Unpaid Principal Balance	3,844		3,631
With an allowance recorded
With an allowance recorded - Recorded Investment	918	[3]	1,718	[4]
With an allowance recorded - Unpaid Principal Balance	2,018		2,518
With an allowance recorded - Allowance for Loan Losses Allocated	200		325
Non-covered Loans | Residential 1-4 family
With no related allowance recorded
With no related allowance recorded - Recorded Investment	5,730	[2],[3]	5,358	[2],[4]
With no related allowance recorded - Unpaid Principal Balance	5,781	[2]	5,358	[2]
With an allowance recorded
With an allowance recorded - Recorded Investment		[2],[3]	2,637	[2],[4]
With an allowance recorded - Unpaid Principal Balance		[2]	2,637	[2]
With an allowance recorded - Allowance for Loan Losses Allocated		[2]	200	[2]
Non-covered Loans | Other consumer loans
With no related allowance recorded
With no related allowance recorded - Recorded Investment		[3]		[4]
With no related allowance recorded - Unpaid Principal Balance
With an allowance recorded
With an allowance recorded - Recorded Investment		[3]		[4]
With an allowance recorded - Unpaid Principal Balance
With an allowance recorded - Allowance for Loan Losses Allocated

[1] Includes loans secured by farmland and multi-family residential loans.

[2] Includes home equity lines of credit.

[3] Recorded investment is after cumulative prior charge offs of $1.7 million. These loans also have aggregate SBA guarantees of $2.4 million.

[4] Recorded investment is after cumulative prior charge offs of $1.4 million. These loans also have aggregate SBA guarantees of $2.4 million.

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STOCK- BASED COMPENSATION (Detail Textuals) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended			3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Stock Options	Mar. 31, 2014 Stock Options Maximum	Dec. 31, 2004 Stock Options 2004 Stock Option Plan	Apr. 30, 2010 Stock Options 2010 Stock Awards and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for reservation (in shares)					302,500	700,000
Options to purchase an aggregate common stock (in shares)			302,500
Maximum term of options				10 years
Stock-based compensation expense	$ 77	$ 64
Unrecognized compensation expense associated with the stock options	$ 854
Unrecognized compensation cost weighted average recognition period	3 years 4 months 24 days

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating activities:
Net income	$ 1,642	$ 1,526
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation	172	167
Amortization of core deposit intangible	45	123
Other amortization, net	47	105
Accretion of loan discount	(706)	(775)
Amortization of FDIC indemnification asset	124	130
Provision for loan losses	1,175	1,093
Earnings on bank-owned life insurance	(140)	(149)
Stock based compensation expense	77	64
Net gain on sale of available for sale securities		(142)
Impairment on securities	16	3
Net (gain) loss on other real estate owned	(419)	56
Net decrease in other assets	121	286
Net increase (decrease) in other liabilities	146	(492)
Net cash and cash equivalents provided by operating activities	2,300	1,995
Investing activities:
Proceeds from sales of available for sale securities		159
Purchases of held to maturity securities	(5,000)	(6,241)
Proceeds from paydowns, maturities and calls of held to maturity securities	1,320	8,353
Loan originations and payments, net	2,397	17,823
Purchase of bank-owned life insurance	(2,000)
Net decrease in stock in Federal Reserve Bank and Federal Home Loan Bank	1,122	1,197
Payments received on FDIC indemnification asset	638	17
Proceeds from sale of other real estate owned	2,778	2,013
Purchases of bank premises and equipment	(112)	(19)
Net cash and cash equivalents provided by investing activities	1,143	23,302
Financing activities:
Net increase in deposits	15,932	8,396
Cash dividends paid - common stock	(811)	(580)
Issuance of common stock under Stock Incentive Plan	30
Net decrease in securities sold under agreement to repurchase and other short-term borrowings	(20,068)	(17,800)
Net cash and cash equivalents used in financing activities	(4,917)	(9,984)
Increase (decrease) in cash and cash equivalents	(1,474)	15,313
Cash and cash equivalents at beginning of period	20,856	39,200
Cash and cash equivalents at end of period	19,382	54,513
Cash payments for:
Interest	1,035	1,201
Income taxes	918	1,363
Supplemental schedule of noncash investing and financing activities
Transfer from non-covered loans to other real estate owned	4,409	312
Transfer from covered loans to other real estate owned		$ 1,831

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CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Securities held to maturity fair value (in dollars)	$ 82,631	$ 76,193
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	45,000,000	45,000,000
Common stock, shares issued	11,594,912	11,590,612
Common stock, shares outstanding	11,594,912	11,590,612

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STOCK- BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Schedule of activity in the stock option plan

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
				Exercise		Contractual		Value
	Shares			Price		Term		(in thousands)
Options outstanding, beginning of period		631,075		$	8.21
Granted		-			-
Forfeited		-			-
Exercised		(4,300	)		6.87
Options outstanding, end of period		626,775		$	8.22		5.8	$	1,248
Vested or expected to vest		626,775		$	8.22		5.8	$	1,248
Exercisable at end of period		367,275		$	8.19		3.9	$	749

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	May 02, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Southern National Bancorp of Virginia Inc
Entity Central Index Key	0001325670
Trading Symbol	sona
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,607,612
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

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SECURITIES (Tables)

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule of amortized cost and fair value of securities available-for-sale

	Amortized		Gross Unrealized					Fair
March 31, 2014	Cost		Gains		Losses			Value
Obligations of states and political subdivisions	$	2,300	$	-	$	(165	)	$	2,135
	Amortized		Gross Unrealized					Fair
December 31, 2013	Cost		Gains		Losses			Value
Obligations of states and political subdivisions	$	2,302	$	-	$	(309	)	$	1,993

Schedule of amortized cost, unrecognized gains and losses, and fair value of held to maturity securities

	Amortized		Gross Unrecognized					Fair
March 31, 2014	Cost		Gains		Losses			Value
Residential government-sponsored mortgage-backed securities	$	24,722	$	680	$	(172	)	$	25,230
Residential government-sponsored collateralized mortgage obligations		4,101		-		(60	)		4,041
Government-sponsored agency securities		34,972		41		(2,910	)		32,103
Obligations of states and political subdivisions		14,360		28		(555	)		13,833
Other residential collateralized mortgage obligations		645		-		-			645
Trust preferred securities		7,306		1,241		(1,768	)		6,779
	$	86,106	$	1,990	$	(5,465	)	$	82,631

	Amortized		Gross Unrecognized					Fair
December 31, 2013	Cost		Gains		Losses			Value
Residential government-sponsored mortgage-backed securities	$	25,609	$	673	$	(294	)	$	25,988
Residential government-sponsored collateralized mortgage obligations		4,295		2		(349	)		3,948
Government-sponsored agency securities		29,971		-		(3,994	)		25,977
Obligations of states and political subdivisions		14,388		-		(987	)		13,401
Other residential collateralized mortgage obligations		659		-		(12	)		647
Trust preferred securities		7,521		939		(2,228	)		6,232
	$	82,443	$	1,614	$	(7,864	)	$	76,193

Schedule of fair value and carrying amount, if different, of debt securities, by contractual maturity

	Held to Maturity				Available for Sale
	Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value
Due in five to ten years	$	6,535	$	6,363	$	-	$	-
Due after ten years		50,103		46,352		2,300		2,135
Residential government-sponsored mortgage-backed securities		24,722		25,230		-		-
Residential government-sponsored collateralized mortgage obligations		4,101		4,041		-		-
Other residential collateralized mortgage obligations		645		645		-		-
Total	$	86,106	$	82,631	$	2,300	$	2,135

Schedule of present information regarding securities in a continuous unrealized loss position by duration of time in a loss position

March 31, 2014
	Less than 12 months				12 Months or More					Total
Available for Sale	Fair value		Unrealized Losses		Fair value		Unrealized Losses			Fair value		Unrealized Losses
Obligations of states and political subdivisions	$	-	$	-	$	2,135	$	(165	)	$	2,135	$	(165	)

	Less than 12 months					12 Months or More					Total
Held to Maturity	Fair value		Unrecognized Losses			Fair value		Unrecognized Losses			Fair value		Unrecognized Losses
Residential government-sponsored mortgage-backed securities	$	12,392	$	(172	)	$	-	$	-		$	12,392	$	(172	)
Residential government-sponsored collateralized mortgage obligations		4,041		(60	)		-		-			4,041		(60	)
Government-sponsored agency securities		9,064		(920	)		17,998		(1,990	)		27,062		(2,910	)
Obligations of states and political subdivisions		8,875		(292	)		3,442		(263	)		12,317		(555	)
Other residential collateralized mortgage obligations		-		-			-		-			-		-
Trust preferred securities		-		-			4,309		(1,768	)		4,309		(1,768	)
	$	34,372	$	(1,444	)	$	25,749	$	(4,021	)	$	60,121	$	(5,465	)

December 31, 2013
	Less than 12 months					12 Months or More					Total
Available for Sale	Fair value		Unrealized Losses			Fair value		Unrealized Losses			Fair value		Unrealized Losses
Obligations of states and political subdivisions	$	409	$	(78	)	$	1,584	$	(231	)	$	1,993	$	(309	)

	Less than 12 months					12 Months or More					Total
Held to Maturity	Fair value		Unrecognized Losses			Fair value		Unrecognized Losses			Fair value		Unrecognized Losses
Residential government-sponsored mortgage-backed securities	$	12,644	$	(294	)	$	-	$	-		$	12,644	$	(294	)
Residential government-sponsored collateralized mortgage obligations		2,984		(349	)		-		-			2,984		(349	)
Government-sponsored agency securities		8,733		(1,250	)		17,244		(2,744	)		25,977		(3,994	)
Obligations of states and political subdivisions		10,327		(588	)		3,064		(399	)		13,391		(987	)
Other residential collateralized mortgage obligations		647		(12	)		-		-			647		(12	)
Trust preferred securities		-		-			4,070		(2,228	)		4,070		(2,228	)
	$	35,335	$	(2,493	)	$	24,378	$	(5,371	)	$	59,713	$	(7,864	)

Schedule of owned pooled trust preferred securities

															Previously
												% of Current			Recognized
												Defaults and			Cumulative
		Ratings								Estimated		Deferrals to			Other
	Tranche	When Purchased		Current Ratings						Fair		Total			Comprehensive
Security	Level	Moody’s	Fitch	Moody’s	Fitch	Par Value		Book Value		Value		Collateral			Loss (1)
						(in thousands)
ALESCO VII  A1B	Senior	Aaa	AAA	A3	BBB	$	6,340	$	5,750	$	4,107		16	%	$	274
MMCF III B	Senior Sub	A3	A-	Ba1	CC		333		327		202		34	%		6
							6,673		6,077		4,309				$	280
															Cumulative Other		Cumulative
															Comprehensive		OTTI Related to
Other Than Temporarily Impaired:															Loss (2)		Credit Loss (2)
TPREF FUNDING II	Mezzanine	A1	A-	Caa3	C		1,500		520		520		41	%		605	$	375
TRAP 2007-XII C1	Mezzanine	A3	A	C	C		2,155		57		372		30	%		805		1,293
TRAP 2007-XIII D	Mezzanine	NR	A-	NR	C		2,039		-		168		25	%		7		2,032
MMC FUNDING XVIII	Mezzanine	A3	A-	Ca	C		1,092		27		271		27	%		374		691
ALESCO V C1	Mezzanine	A2	A	C	C		2,149		475		582		15	%		1,013		661
ALESCO XV C1	Mezzanine	A3	A-	C	C		3,245		30		79		33	%		656		2,559
ALESCO XVI  C	Mezzanine	A3	A-	C	C		2,158		120		478		14	%		858		1,180
							14,338		1,229		2,470				$	4,318	$	8,791
Total						$	21,011	$	7,306	$	6,779

(1)  Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion

(2)  Pre-tax

Schedule of credit losses recognized in earnings

	2014			2013
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1	$	8,911		$	8,964
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized		-			-
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized		16			3
Reductions due to realized losses		(2	)		(25	)
Amount of cumulative other-than-temporary impairment related to credit loss as of March 31	$	8,925		$	8,942

Schedule of changes in accumulated other comprehensive income by component

	Unrealized Holding
	Gains (Losses) on
For the three months ended March 31, 2014	Available for Sale			Held to Maturity
	Securities			Securities			Total
Beginning balance	$	(203	)	$	(2,987	)	$	(3,190	)
Other comprehensive income/(loss) before reclassifications		94			1			95
Amounts reclassified from accumulated other comprehensive income/(loss)		-			-			-
Net current-period other comprehensive income/(loss)		94			1			95
Ending balance	$	(109	)	$	(2,986	)	$	(3,095	)
	Unrealized Holding
	Gains (Losses) on
For the three months ended March 31, 2013	Available for Sale			Held to Maturity
	Securities			Securities			Total
Beginning balance	$	44		$	(3,025	)	$	(2,981	)
Other comprehensive income/(loss) before reclassifications		(1	)		60			59
Amounts reclassified from accumulated other comprehensive income/(loss)		(93	)		(2	)		(95	)
Net current-period other comprehensive income/(loss)		(94	)		58			(36	)
Ending balance	$	(50	)	$	(2,967	)	$	(3,017	)

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Interest and dividend income :
Interest and fees on loans	$ 7,756	$ 8,343
Interest and dividends on taxable securities	513	530
Interest and dividends on tax exempt securities	92	38
Interest and dividends on other earning assets	280	112
Total interest and dividend income	8,641	9,023
Interest expense:
Interest on deposits	896	1,100
Interest on borrowings	158	153
Total interest expense	1,054	1,253
Net interest income	7,587	7,770
Provision for loan losses	1,175	1,093
Net interest income after provision for loan losses	6,412	6,677
Noninterest income:
Account maintenance and deposit service fees	178	193
Income from bank-owned life insurance	140	149
Gain on other assets	202
Net gain on sale of available for sale securities		142
Total other-than-temporary impairment losses (OTTI)	(16)	(3)
Portion of OTTI recognized in other comprehensive income (before taxes)
Net credit related OTTI recognized in earnings	(16)	(3)
Other	37	55
Total noninterest income	541	536
Noninterest expenses:
Salaries and benefits	2,389	2,246
Occupancy expenses	772	760
Furniture and equipment expenses	187	156
Amortization of core deposit intangible	45	123
Virginia franchise tax expense	116	127
Merger expenses	213
FDIC assessment	125	234
Data processing expense	126	148
Telephone and communication expense	178	178
Change in FDIC indemnification asset	124	130
Net (gain) loss on other real estate owned	(419)	56
Other operating expenses	663	793
Total noninterest expenses	4,519	4,951
Income before income taxes	2,434	2,262
Income tax expense	792	736
Net income	1,642	1,526
Other comprehensive income (loss):
Unrealized gain (loss) on available for sale securities	143	(1)
Realized amount on securities sold, net		(142)
Non-credit component of other-than-temporary impairment on held-to-maturity securities	21	97
Accretion of amounts previously recorded upon transfer to held-to-maturity from available-for-sale	(20)	(8)
Net unrealized gain (loss)	144	(54)
Tax effect	(49)	18
Other comprehensive income (loss)	95	(36)
Comprehensive income	$ 1,737	$ 1,490
Earnings per share, basic and diluted (in dollars per share)	$ 0.14	$ 0.13

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FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

3 Months Ended

Mar. 31, 2014

Financial Instruments With Off Balance Sheet Risk [Abstract]

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

5.         FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Southern National is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments include commitments to extend credit and standby letters of credit.  These instruments involve elements of credit and funding risk in excess of the amount recognized in the consolidated balance sheet.  Letters of credit are written conditional commitments issued by Southern National to guarantee the performance of a customer to a third party.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.  We had letters of credit outstanding totaling $7.8 million and $6.9 million as of March 31, 2014 and December 31, 2013, respectively.

Our exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit is based on the contractual amount of these instruments.  We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Unless noted otherwise, we do not require collateral or other security to support financial instruments with credit risk.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments are made predominately for adjustable rate loans, and generally have fixed expiration dates of up to three months or other termination clauses and usually require payment of a fee.  Since many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements.  We evaluate each customer’s creditworthiness on a case-by-case basis.

At March 31, 2014 and December 31, 2013, we had unfunded lines of credit and undisbursed construction loan funds totaling $113.7 million and $105.8 million, respectively. We had approved loan commitments of $15.0 million at March 31, 2014, and we had no approved loan commitments as of December 31, 2013.  Virtually all of our unfunded lines of credit, undisbursed construction loan funds and approved loan commitments are variable rate.

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LOANS AND ALLOWANCE FOR LOAN LOSSES

3 Months Ended

Mar. 31, 2014

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

4.LOANS AND ALLOWANCE FOR LOAN LOSSES

The following table summarizes the composition of our loan portfolio as of March 31, 2014 and December 31, 2013:

	Covered		Non-covered			Total			Covered		Non-covered			Total
	Loans (1)		Loans			Loans			Loans (1)		Loans			Loans
	March 31, 2014								December 31, 2013
Loans secured by real estate:
Commercial real estate - owner-occupied	$	1,552	$	105,121		$	106,673		$	1,603	$	106,225		$	107,828
Commercial real estate - non-owner-occupied		5,769		148,962			154,731			5,829		150,008			155,837
Secured by farmland		-		504			504			100		508			608
Construction and land loans		-		39,872			39,872			1		39,068			39,069
Residential 1-4 family		16,589		61,222			77,811			16,631		66,482			83,113
Multi- family residential		580		21,414			21,994			585		21,496			22,081
Home equity lines of credit		24,866		7,526			32,392			25,769		6,431			32,200
Total real estate loans		49,356		384,621			433,977			50,518		390,218			440,736
Commercial loans		898		104,258			105,156			1,097		104,284			105,381
Consumer loans		77		1,249			1,326			81		1,308			1,389
Gross loans		50,331		490,128			540,459			51,696		495,810			547,506
Less deferred fees on loans		4		(1,414	)		(1,410	)		5		(1,453	)		(1,448	)
Loans, net of deferred fees	$	50,335	$	488,714		$	539,049		$	51,701	$	494,357		$	546,058

(1) Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

Accounting policy related to the allowance for loan losses is considered a critical policy given the level of estimation, judgment, and uncertainty in the levels of the allowance required to account for the inherent probable losses in the loan portfolio and the material effect such estimation, judgment, and uncertainty can have on the consolidated financial results.

As part of the Greater Atlantic acquisition, the Bank and the FDIC entered into loss sharing agreements on approximately $143.4 million (contractual basis) of Greater Atlantic Bank’s assets.  There are two agreements with FDIC, one for single family loans which is a 10-year agreement expiring in December 2019, and one for non-single family (commercial) assets which is a 5-year agreement expiring in December 2014. The Bank will share in the losses on the loans and foreclosed loan collateral with the FDIC as specified in the loss sharing agreements; we refer to these assets collectively as “covered assets.”  Loans that are not covered in the loss sharing agreement are referred to as “non-covered loans” at March 31, 2014. Non-covered loans included $38.1 million of loans acquired in the HarVest acquisition.

Accretable discount on the acquired covered loans and the HarVest loans was $8.3 million and $8.9 million at March 31, 2014 and December 31, 2013 respectively.

Credit-impaired covered loans are those loans which presented evidence of credit deterioration at the date of acquisition and it is probable that Southern National would not collect all contractually required principal and interest payments. Generally, acquired loans that meet Southern National’s definition for nonaccrual status fell within the definition of credit-impaired covered loans.

Impaired loans for the covered and non-covered portfolios were as follows (in thousands):

March 31, 2014	Covered Loans						Non-covered Loans						Total Loans
			Unpaid						Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment (1)		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	737	$	835	$	-	$	7,624	$	7,695	$	-	$	8,361	$	8,530	$	-
Commercial real estate - non-owner occupied (2)		2,137		2,477		-		347		435		-		2,484		2,912		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		3,406		3,844		-		3,406		3,844		-
Residential 1-4 family (4)		1,210		1,427		-		5,730		5,781		-		6,940		7,208		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	4,084	$	4,739	$	-	$	17,107	$	17,755	$	-	$	21,191	$	22,494	$	-
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	-	$	109	$	209	$	109	$	109	$	209	$	109
Commercial real estate - non-owner occupied (2)		-		-		-		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		918		2,018		200		918		2,018		200
Residential 1-4 family (4)		-		-		-		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	1,027	$	2,227	$	309	$	1,027	$	2,227	$	309
Grand total	$	4,084	$	4,739	$	-	$	18,134	$	19,982	$	309	$	22,218	$	24,721	$	309
(1) Recorded investment is after cumulative prior charge offs of $1.7 million. These loans also have aggregate SBA guarantees of $2.4 million.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
(4)  Includes home equity lines of credit.
December 31, 2013	Covered Loans						Non-covered Loans						Total Loans
			Unpaid						Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment (1)		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	745	$	844	$	-	$	7,476	$	7,476	$	-	$	8,221	$	8,320	$	-
Commercial real estate - non-owner occupied (2)		2,145		2,486		-		359		449		-		2,504		2,935		-
Construction and land development		-		-		-		2,107		2,307		-		2,107		2,307		-
Commercial loans		-		-		-		3,155		3,631		-		3,155		3,631		-
Residential 1-4 family (4)		1,220		1,439		-		5,358		5,358		-		6,578		6,797		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	4,110	$	4,769	$	-	$	18,455	$	19,221	$	-	$	22,565	$	23,990	$	-
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	-	$	400	$	500	$	192	$	400	$	500	$	192
Commercial real estate - non-owner occupied (2)		-		-		-		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		1,718		2,518		325		1,718		2,518		325
Residential 1-4 family (4)		-		-		-		2,637		2,637		200		2,637		2,637		200
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	4,755	$	5,655	$	717	$	4,755	$	5,655	$	717
Grand total	$	4,110	$	4,769	$	-	$	23,210	$	24,876	$	717	$	27,320	$	29,645	$	717
(1) Recorded investment is after cumulative prior charge offs of $1.4 million. These loans also have aggregate SBA guarantees of $2.4 million.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
(4)  Includes home equity lines of credit.

The following tables present the average recorded investment and interest income for impaired loans recognized by class of loans for the three months ended March 31, 2014 and 2013 (in thousands):

Three months ended March 31, 2014	Covered Loans				Non-covered Loans				Total Loans
	Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	742	$	13	$	7,550	$	127	$	8,292	$	140
Commercial real estate - non-owner occupied (1)		2,141		21		354		9		2,495		30
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		3,169		21		3,169		21
Residential 1-4 family (2)		1,217		13		5,348		79		6,565		92
Other consumer loans		-		-		-		-		-		-
Total	$	4,100	$	47	$	16,421	$	236	$	20,521	$	283
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	114	$	4	$	114	$	4
Commercial real estate - non-owner occupied (1)		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		1,143		-		1,143		-
Residential 1-4 family (2)		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-
Total	$	-	$	-	$	1,257	$	4	$	1,257	$	4
Grand total	$	4,100	$	47	$	17,678	$	240	$	21,778	$	287
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Includes home equity lines of credit.
Three months ended March 31, 2013	Covered Loans				Non-covered Loans				Total Loans
	Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	137	$	5	$	4,221	$	45	$	4,358	$	50
Commercial real estate - non-owner occupied (1)		2,017		32		1,077		21		3,094		53
Construction and land development		48		-		2,451		23		2,499		23
Commercial loans		45		1		4,879		12		4,924		13
Residential 1-4 family (2)		1,734		22		2,977		34		4,711		56
Other consumer loans		-		-		-		-		-		-
Total	$	3,981	$	60	$	15,605	$	135	$	19,586	$	195
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	131	$	4	$	131	$	4
Commercial real estate - non-owner occupied (1)		-		-		976		16		976		16
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		-		-		-		-
Residential 1-4 family (2)		-		-		5,786		88		5,786		88
Other consumer loans		-		-		-		-		-		-
Total	$	-	$	-	$	6,893	$	108	$	6,893	$	108
Grand total	$	3,981	$	60	$	22,498	$	243	$	26,479	$	303
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Includes home equity lines of credit.

The following tables present the aging of the recorded investment in past due loans by class of loans as of March 31, 2014 and December 31, 2013 (in thousands):

March 31, 2014	30 - 59		60 - 89
	Days		Days		90 Days		Total		Nonaccrual		Loans Not		Total
	Past Due		Past Due		or More		Past Due		Loans		Past Due		Loans
Covered loans:
Commercial real estate - owner occupied	$	142	$	-	$	-	$	142	$	-	$	1,410	$	1,552
Commercial real estate - non-owner occupied (1)		146		-		-		146		1,991		4,212		6,349
Construction and land development		-		-		-		-		-		-		-
Commercial loans		-		-		-		-		-		898		898
Residential 1-4 family (2)		282		-		-		282		1,366		39,807		41,455
Other consumer loans		-		-		-		-		-		77		77
Total	$	570	$	-	$	-	$	570	$	3,357	$	46,404	$	50,331
Non-covered loans:
Commercial real estate - owner occupied	$	708	$	-	$	-	$	708	$	212	$	104,201	$	105,121
Commercial real estate - non-owner occupied (1)		-		-		-		-		-		170,880		170,880
Construction and land development		-		-		-		-		-		39,872		39,872
Commercial loans		636		-		-		636		3,094		100,528		104,258
Residential 1-4 family (2)		420		28		-		448		521		67,779		68,748
Other consumer loans		20		-		-		20		-		1,229		1,249
Total	$	1,784	$	28	$	-	$	1,812	$	3,827	$	484,489	$	490,128
Total loans:
Commercial real estate - owner occupied	$	850	$	-	$	-	$	850	$	212	$	105,611	$	106,673
Commercial real estate - non-owner occupied (1)		146		-		-		146		1,991		175,092		177,229
Construction and land development		-		-		-		-		-		39,872		39,872
Commercial loans		636		-		-		636		3,094		101,426		105,156
Residential 1-4 family (2)		702		28		-		730		1,887		107,586		110,203
Other consumer loans		20		-		-		20		-		1,306		1,326
Total	$	2,354	$	28	$	-	$	2,382	$	7,184	$	530,893	$	540,459
December 31, 2013	30 - 59		60 - 89
	Days		Days		90 Days		Total		Nonaccrual		Loans Not		Total
	Past Due		Past Due		or More		Past Due		Loans		Past Due		Loans
Covered loans:
Commercial real estate - owner occupied	$	-	$	-	$	-	$	-	$	-	$	1,603	$	1,603
Commercial real estate - non-owner occupied (1)		503		-		-		503		245		5,766		6,514
Construction and land development		-		-		-		-		-		1		1
Commercial loans		-		-		-		-		-		1,097		1,097
Residential 1-4 family (2)		41		-		-		41		1,377		40,982		42,400
Other consumer loans		-		-		-		-		-		81		81
Total	$	544	$	-	$	-	$	544	$	1,622	$	49,530	$	51,696
Non-covered loans:
Commercial real estate - owner occupied	$	708	$	283	$	-	$	991	$	-	$	105,234	$	106,225
Commercial real estate - non-owner occupied (1)		359		-		-		359		-		171,653		172,012
Construction and land development		8		3		-		11		2,107		36,950		39,068
Commercial loans		522		968		-		1,490		3,070		99,724		104,284
Residential 1-4 family (2)		957		98		-		1,055		2,637		69,221		72,913
Other consumer loans		14		-		-		14		-		1,294		1,308
Total	$	2,568	$	1,352	$	-	$	3,920	$	7,814	$	484,076	$	495,810
Total loans:
Commercial real estate - owner occupied	$	708	$	283	$	-	$	991	$	-	$	106,837	$	107,828
Commercial real estate - non-owner occupied (1)		862		-		-		862		245		177,419		178,526
Construction and land development		8		3		-		11		2,107		36,951		39,069
Commercial loans		522		968		-		1,490		3,070		100,821		105,381
Residential 1-4 family (2)		998		98		-		1,096		4,014		110,203		115,313
Other consumer loans		14		-		-		14		-		1,375		1,389
Total	$	3,112	$	1,352	$	-	$	4,464	$	9,436	$	533,606	$	547,506

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Non-covered nonaccrual loans include SBA guaranteed amounts totaling $2.4 million and $1.9 million at March 31, 2014 and December 31, 2013, respectively.

Activity in the allowance for non-covered loan and lease losses for the three months ended March 31, 2014 and 2013 is summarized below (in thousands):

	Commercial			Commercial
	Real Estate			Real Estate			Construction									Other
Non-covered loans:	Owner			Non-owner			and Land			Commercial			1-4 Family			Consumer
Three months ended March 31, 2014	Occupied			Occupied (1)			Development			Loans			Residential (2)			Loans			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	814		$	985		$	1,068		$	2,797		$	1,302		$	54		$	19	$	7,039
Charge offs		(71	)		-			-			(588	)		(300	)		-			-		(959	)
Recoveries		4			6			-			35			-			5			-		50
Provision		(131	)		(181	)		84			404			100			(9	)		908		1,175
Ending balance	$	616		$	810		$	1,152		$	2,648		$	1,102		$	50		$	927	$	7,305
Three months ended March 31, 2013
Allowance for loan losses:
Beginning balance	$	932		$	1,474		$	970		$	2,110		$	1,163		$	33		$	285	$	6,967
Charge offs		-			(199	)		(300	)		(399	)		(38	)		(140	)		-		(1,076	)
Recoveries		-			-			2			39			121			-			-		162
Provision		(34	)		(84	)		376			345			50			171			275		1,099
Ending balance	$	898		$	1,191		$	1,048		$	2,095		$	1,296		$	64		$	560	$	7,152

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Activity in the allowance for covered loan and lease losses by class of loan for the three months ended March 31, 2014 and 2013 is summarized below (in thousands).

	Commercial		Commercial
	Real Estate		Real Estate		Construction							Other
Covered loans:	Owner		Non-owner		and Land		Commercial			1-4 Family		Consumer
Three months ended March 31, 2014	Occupied		Occupied (1)		Development		Loans			Residential (3)		Loans		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	-	$	45	$	-	$	-		$	-	$	6	$	-	$	51
Charge offs		-		-		-		-			-		-		-		-
Recoveries		-		-		-		-			-		-		-		-
Adjustments (2)		-		-		-		-			-		-		-		-
Provision		-		-		-		-			-		-		-		-
Ending balance	$	-	$	45	$	-	$	-		$	-	$	6	$	-	$	51
Three months ended March 31, 2013
Allowance for loan losses:
Beginning balance	$	-	$	45	$	-	$	43		$	-	$	11	$	-	$	99
Charge offs		-		-		-		-			-		-		-		-
Recoveries		-		-		-		-			-		-		-		-
Adjustments (2)		-		-		-		(35	)		-		8		-		(27	)
Provision		-		-		-		(8	)		-		2		-		(6	)
Ending balance	$	-	$	45	$	-	$	-		$	-	$	21	$	-	$	66

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Represents the portion of increased expected losses which is covered by the loss sharing agreement with the FDIC.

(3) Includes home equity lines of credit.

The following tables present the balance in the allowance for loan losses and the recorded investment in non-covered loans by portfolio segment and based on impairment method as of March 31, 2014 and December 31, 2013 (in thousands):

	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
Non-covered loans:	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
March 31, 2014
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	109	$	-	$	-	$	200	$	-	$	-	$	-	$	309
Collectively evaluated for impairment		507		810		1,152		2,448		1,102		50		927		6,996
Total ending allowance	$	616	$	810	$	1,152	$	2,648	$	1,102	$	50	$	927	$	7,305
Loans:
Individually evaluated for impairment	$	7,733	$	347	$	-	$	4,324	$	5,730	$	-	$	-	$	18,134
Collectively evaluated for impairment		97,388		170,533		39,872		99,934		63,018		1,249		-		471,994
Total ending loan balances	$	105,121	$	170,880	$	39,872	$	104,258	$	68,748	$	1,249	$	-	$	490,128
December 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	192	$	-	$	-	$	325	$	200	$	-	$	-	$	717
Collectively evaluated for impairment		622		985		1,068		2,472		1,102		54		19		6,322
Total ending allowance	$	814	$	985	$	1,068	$	2,797	$	1,302	$	54	$	19	$	7,039
Loans:
Individually evaluated for impairment	$	7,876	$	359	$	2,107	$	4,873	$	7,995	$	-	$	-	$	23,210
Collectively evaluated for impairment		98,349		171,653		36,961		99,411		64,918		1,308		-		472,600
Total ending loan balances	$	106,225	$	172,012	$	39,068	$	104,284	$	72,913	$	1,308	$	-	$	495,810

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

The following tables present the balance in the allowance for covered loan losses and the recorded investment in covered loans by portfolio segment and based on impairment method as of March 31, 2014 and December 31, 2013 (in thousands):

	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
Covered loans:	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
March 31, 2014
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		-		45		-		-		-		6		-		51
Total ending allowance	$	-	$	45	$	-	$	-	$	-	$	6	$	-	$	51
Loans:
Individually evaluated for impairment	$	737	$	2,137	$	-	$	-	$	1,210	$	-	$	-	$	4,084
Collectively evaluated for impairment		815		4,212		-		898		40,245		77		-		46,247
Total ending loan balances	$	1,552	$	6,349	$	-	$	898	$	41,455	$	77	$	-	$	50,331
December 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		-		45		-		-		-		6		-		51
Total ending allowance	$	-	$	45	$	-	$	-	$	-	$	6	$	-	$	51
Loans:
Individually evaluated for impairment	$	745	$	2,145	$	-	$	-	$	1,220	$	-	$	-	$	4,110
Collectively evaluated for impairment		858		4,369		1		1,097		41,180		81		-		47,586
Total ending loan balances	$	1,603	$	6,514	$	1	$	1,097	$	42,400	$	81	$	-	$	51,696

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Troubled Debt Restructurings

A modification is classified as a troubled debt restructuring (“TDR”) if both of the following exist: (1) the borrower is experiencing financial difficulty and (2) the Bank has granted a concession to the borrower.  The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future.  Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures.  Concessions may include the reduction of an interest rate at a rate lower than current market rate for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness.  When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers.  The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when determining whether a modification is a TDR.

Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, TDRs are typically modified through reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.

During the periods ending March 31, 2014 and March 31, 2013, there were no loans modified in troubled debt restructurings.  No TDRs defaulted during the quarters ending March 31, 2014 and March 31, 2013, which had been modified in the previous 12 months.

Credit Quality Indicators

Through its system of internal controls Southern National evaluates and segments loan portfolio credit quality on a quarterly basis using regulatory definitions for Special Mention, Substandard and Doubtful.  Special Mention loans are considered to be criticized.  Substandard and Doubtful loans are considered to be classified.  Southern National had no loans classified Doubtful at March 31, 2014 or December 31, 2013.

Special Mention loans are loans that have a potential weakness that deserves management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position.

Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

As of March 31, 2014 and December 31, 2013, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

March 31, 2014	Covered Loans						Non-covered Loans								Total Loans
	Classified/						Special								Classified/
	Criticized (1)		Pass		Total		Mention		Substandard (3)		Pass		Total		Criticized		Pass		Total
Commercial real estate - owner occupied	$	737	$	815	$	1,552	$	796	$	7,733	$	96,592	$	105,121	$	9,266	$	97,407	$	106,673
Commercial real estate - non-owner occupied (2)		2,137		4,212		6,349		-		347		170,533		170,880		2,484		174,745		177,229
Construction and land development		-		-		-		618		-		39,254		39,872		618		39,254		39,872
Commercial loans		-		898		898		31		4,324		99,903		104,258		4,355		100,801		105,156
Residential 1-4 family (4)		1,210		40,245		41,455		171		5,730		62,847		68,748		7,111		103,092		110,203
Other consumer loans		-		77		77		-		-		1,249		1,249		-		1,326		1,326
Total	$	4,084	$	46,247	$	50,331	$	1,616	$	18,134	$	470,378	$	490,128	$	23,834	$	516,625	$	540,459
December 31, 2013	Covered Loans						Non-covered Loans								Total Loans
	Classified/						Special								Classified/
	Criticized (1)		Pass		Total		Mention		Substandard (3)		Pass		Total		Criticized		Pass		Total
Commercial real estate - owner occupied	$	745	$	858	$	1,603	$	802	$	7,876	$	97,547	$	106,225	$	9,423	$	98,405	$	107,828
Commercial real estate - non-owner occupied (2)		2,145		4,369		6,514		-		359		171,653		172,012		2,504		176,022		178,526
Construction and land development		-		1		1		618		2,107		36,343		39,068		2,725		36,344		39,069
Commercial loans		-		1,097		1,097		31		4,873		99,380		104,284		4,904		100,477		105,381
Residential 1-4 family (4)		1,220		41,180		42,400		176		7,995		64,742		72,913		9,391		105,922		115,313
Other consumer loans		-		81		81		-		-		1,308		1,308		-		1,389		1,389
Total	$	4,110	$	47,586	$	51,696	$	1,627	$	23,210	$	470,973	$	495,810	$	28,947	$	518,559	$	547,506
(1) Credit quality is enhanced by a loss sharing agreement with the FDIC in the covered portfolio. The same credit quality indicators used in the non-covered portfolio are combined.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) Includes SBA guarantees of $2.4 million as of March 31, 2014 and December 31, 2013.
(4) Includes home equity lines of credit.

XML

STOCK- BASED COMPENSATION - Activity in stock option plan (Details) (Stock Options, USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Stock Options
Shares
Options outstanding, beginning of period	631,075
Granted
Forfeited
Exercised	(4,300)
Options outstanding, end of period	626,775
Vested or expected to vest	626,775
Exercisable at end of period	367,275
Weighted Average Exercise Price
Options outstanding, beginning of period	$ 8.21
Granted
Forfeited
Exercised	$ 6.87
Options outstanding, end of period	$ 8.22
Vested or expected to vest	$ 8.22
Exercisable at end of period	$ 8.19
Weighted Average Remaining Contractual Term
Options outstanding, end of period	5 years 9 months 18 days
Vested or expected to vest	5 years 9 months 18 days
Exercisable at end of period	3 years 10 months 24 days
Options outstanding, end of period - Aggregate Intrinsic Value	$ 1,248
Vested or expected to vest - Aggregate Intrinsic Value	1,248
Exercisable at end of period - Aggregate Intrinsic Value	$ 749

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2014

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Schedule of loans, net of unearned income

	Covered		Non-covered			Total			Covered		Non-covered			Total
	Loans (1)		Loans			Loans			Loans (1)		Loans			Loans
	March 31, 2014								December 31, 2013
Loans secured by real estate:
Commercial real estate - owner-occupied	$	1,552	$	105,121		$	106,673		$	1,603	$	106,225		$	107,828
Commercial real estate - non-owner-occupied		5,769		148,962			154,731			5,829		150,008			155,837
Secured by farmland		-		504			504			100		508			608
Construction and land loans		-		39,872			39,872			1		39,068			39,069
Residential 1-4 family		16,589		61,222			77,811			16,631		66,482			83,113
Multi- family residential		580		21,414			21,994			585		21,496			22,081
Home equity lines of credit		24,866		7,526			32,392			25,769		6,431			32,200
Total real estate loans		49,356		384,621			433,977			50,518		390,218			440,736
Commercial loans		898		104,258			105,156			1,097		104,284			105,381
Consumer loans		77		1,249			1,326			81		1,308			1,389
Gross loans		50,331		490,128			540,459			51,696		495,810			547,506
Less deferred fees on loans		4		(1,414	)		(1,410	)		5		(1,453	)		(1,448	)
Loans, net of deferred fees	$	50,335	$	488,714		$	539,049		$	51,701	$	494,357		$	546,058

(1) Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

Schedule of summary of impaired loans

March 31, 2014	Covered Loans						Non-covered Loans						Total Loans
			Unpaid						Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment (1)		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	737	$	835	$	-	$	7,624	$	7,695	$	-	$	8,361	$	8,530	$	-
Commercial real estate - non-owner occupied (2)		2,137		2,477		-		347		435		-		2,484		2,912		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		3,406		3,844		-		3,406		3,844		-
Residential 1-4 family (4)		1,210		1,427		-		5,730		5,781		-		6,940		7,208		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	4,084	$	4,739	$	-	$	17,107	$	17,755	$	-	$	21,191	$	22,494	$	-
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	-	$	109	$	209	$	109	$	109	$	209	$	109
Commercial real estate - non-owner occupied (2)		-		-		-		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		918		2,018		200		918		2,018		200
Residential 1-4 family (4)		-		-		-		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	1,027	$	2,227	$	309	$	1,027	$	2,227	$	309
Grand total	$	4,084	$	4,739	$	-	$	18,134	$	19,982	$	309	$	22,218	$	24,721	$	309
(1) Recorded investment is after cumulative prior charge offs of $1.7 million. These loans also have aggregate SBA guarantees of $2.4 million.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
(4)  Includes home equity lines of credit.
December 31, 2013	Covered Loans						Non-covered Loans						Total Loans
			Unpaid						Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related		Recorded		Principal		Related
	Investment		Balance		Allowance		Investment (1)		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	745	$	844	$	-	$	7,476	$	7,476	$	-	$	8,221	$	8,320	$	-
Commercial real estate - non-owner occupied (2)		2,145		2,486		-		359		449		-		2,504		2,935		-
Construction and land development		-		-		-		2,107		2,307		-		2,107		2,307		-
Commercial loans		-		-		-		3,155		3,631		-		3,155		3,631		-
Residential 1-4 family (4)		1,220		1,439		-		5,358		5,358		-		6,578		6,797		-
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	4,110	$	4,769	$	-	$	18,455	$	19,221	$	-	$	22,565	$	23,990	$	-
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	-	$	400	$	500	$	192	$	400	$	500	$	192
Commercial real estate - non-owner occupied (2)		-		-		-		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-		-		-		-
Commercial loans		-		-		-		1,718		2,518		325		1,718		2,518		325
Residential 1-4 family (4)		-		-		-		2,637		2,637		200		2,637		2,637		200
Other consumer loans		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	4,755	$	5,655	$	717	$	4,755	$	5,655	$	717
Grand total	$	4,110	$	4,769	$	-	$	23,210	$	24,876	$	717	$	27,320	$	29,645	$	717
(1) Recorded investment is after cumulative prior charge offs of $1.4 million. These loans also have aggregate SBA guarantees of $2.4 million.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) The Bank recognizes loan impairment and may concurrently record a charge off to the allowance for loan losses.
(4)  Includes home equity lines of credit.

Schedule of details of average recorded investment and interest income for impaired loans recognized by class of loans

Three months ended March 31, 2014	Covered Loans				Non-covered Loans				Total Loans
	Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	742	$	13	$	7,550	$	127	$	8,292	$	140
Commercial real estate - non-owner occupied (1)		2,141		21		354		9		2,495		30
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		3,169		21		3,169		21
Residential 1-4 family (2)		1,217		13		5,348		79		6,565		92
Other consumer loans		-		-		-		-		-		-
Total	$	4,100	$	47	$	16,421	$	236	$	20,521	$	283
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	114	$	4	$	114	$	4
Commercial real estate - non-owner occupied (1)		-		-		-		-		-		-
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		1,143		-		1,143		-
Residential 1-4 family (2)		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-
Total	$	-	$	-	$	1,257	$	4	$	1,257	$	4
Grand total	$	4,100	$	47	$	17,678	$	240	$	21,778	$	287
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Includes home equity lines of credit.
Three months ended March 31, 2013	Covered Loans				Non-covered Loans				Total Loans
	Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized		Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	137	$	5	$	4,221	$	45	$	4,358	$	50
Commercial real estate - non-owner occupied (1)		2,017		32		1,077		21		3,094		53
Construction and land development		48		-		2,451		23		2,499		23
Commercial loans		45		1		4,879		12		4,924		13
Residential 1-4 family (2)		1,734		22		2,977		34		4,711		56
Other consumer loans		-		-		-		-		-		-
Total	$	3,981	$	60	$	15,605	$	135	$	19,586	$	195
With an allowance recorded
Commercial real estate - owner occupied	$	-	$	-	$	131	$	4	$	131	$	4
Commercial real estate - non-owner occupied (1)		-		-		976		16		976		16
Construction and land development		-		-		-		-		-		-
Commercial loans		-		-		-		-		-		-
Residential 1-4 family (2)		-		-		5,786		88		5,786		88
Other consumer loans		-		-		-		-		-		-
Total	$	-	$	-	$	6,893	$	108	$	6,893	$	108
Grand total	$	3,981	$	60	$	22,498	$	243	$	26,479	$	303
(1) Includes loans secured by farmland and multi-family residential loans.
(2) Includes home equity lines of credit.

Schedule of details of aging of the recorded investment in past due loans by class of loans

March 31, 2014	30 - 59		60 - 89
	Days		Days		90 Days		Total		Nonaccrual		Loans Not		Total
	Past Due		Past Due		or More		Past Due		Loans		Past Due		Loans
Covered loans:
Commercial real estate - owner occupied	$	142	$	-	$	-	$	142	$	-	$	1,410	$	1,552
Commercial real estate - non-owner occupied (1)		146		-		-		146		1,991		4,212		6,349
Construction and land development		-		-		-		-		-		-		-
Commercial loans		-		-		-		-		-		898		898
Residential 1-4 family (2)		282		-		-		282		1,366		39,807		41,455
Other consumer loans		-		-		-		-		-		77		77
Total	$	570	$	-	$	-	$	570	$	3,357	$	46,404	$	50,331
Non-covered loans:
Commercial real estate - owner occupied	$	708	$	-	$	-	$	708	$	212	$	104,201	$	105,121
Commercial real estate - non-owner occupied (1)		-		-		-		-		-		170,880		170,880
Construction and land development		-		-		-		-		-		39,872		39,872
Commercial loans		636		-		-		636		3,094		100,528		104,258
Residential 1-4 family (2)		420		28		-		448		521		67,779		68,748
Other consumer loans		20		-		-		20		-		1,229		1,249
Total	$	1,784	$	28	$	-	$	1,812	$	3,827	$	484,489	$	490,128
Total loans:
Commercial real estate - owner occupied	$	850	$	-	$	-	$	850	$	212	$	105,611	$	106,673
Commercial real estate - non-owner occupied (1)		146		-		-		146		1,991		175,092		177,229
Construction and land development		-		-		-		-		-		39,872		39,872
Commercial loans		636		-		-		636		3,094		101,426		105,156
Residential 1-4 family (2)		702		28		-		730		1,887		107,586		110,203
Other consumer loans		20		-		-		20		-		1,306		1,326
Total	$	2,354	$	28	$	-	$	2,382	$	7,184	$	530,893	$	540,459
December 31, 2013	30 - 59		60 - 89
	Days		Days		90 Days		Total		Nonaccrual		Loans Not		Total
	Past Due		Past Due		or More		Past Due		Loans		Past Due		Loans
Covered loans:
Commercial real estate - owner occupied	$	-	$	-	$	-	$	-	$	-	$	1,603	$	1,603
Commercial real estate - non-owner occupied (1)		503		-		-		503		245		5,766		6,514
Construction and land development		-		-		-		-		-		1		1
Commercial loans		-		-		-		-		-		1,097		1,097
Residential 1-4 family (2)		41		-		-		41		1,377		40,982		42,400
Other consumer loans		-		-		-		-		-		81		81
Total	$	544	$	-	$	-	$	544	$	1,622	$	49,530	$	51,696
Non-covered loans:
Commercial real estate - owner occupied	$	708	$	283	$	-	$	991	$	-	$	105,234	$	106,225
Commercial real estate - non-owner occupied (1)		359		-		-		359		-		171,653		172,012
Construction and land development		8		3		-		11		2,107		36,950		39,068
Commercial loans		522		968		-		1,490		3,070		99,724		104,284
Residential 1-4 family (2)		957		98		-		1,055		2,637		69,221		72,913
Other consumer loans		14		-		-		14		-		1,294		1,308
Total	$	2,568	$	1,352	$	-	$	3,920	$	7,814	$	484,076	$	495,810
Total loans:
Commercial real estate - owner occupied	$	708	$	283	$	-	$	991	$	-	$	106,837	$	107,828
Commercial real estate - non-owner occupied (1)		862		-		-		862		245		177,419		178,526
Construction and land development		8		3		-		11		2,107		36,951		39,069
Commercial loans		522		968		-		1,490		3,070		100,821		105,381
Residential 1-4 family (2)		998		98		-		1,096		4,014		110,203		115,313
Other consumer loans		14		-		-		14		-		1,375		1,389
Total	$	3,112	$	1,352	$	-	$	4,464	$	9,436	$	533,606	$	547,506

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Schedule of activity in the allowance for non-covered and covered loan and lease losses by class of loan

Activity in the allowance for non-covered loan and lease losses for the three months ended March 31, 2014 and 2013 is summarized below (in thousands):

	Commercial			Commercial
	Real Estate			Real Estate			Construction									Other
Non-covered loans:	Owner			Non-owner			and Land			Commercial			1-4 Family			Consumer
Three months ended March 31, 2014	Occupied			Occupied (1)			Development			Loans			Residential (2)			Loans			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	814		$	985		$	1,068		$	2,797		$	1,302		$	54		$	19	$	7,039
Charge offs		(71	)		-			-			(588	)		(300	)		-			-		(959	)
Recoveries		4			6			-			35			-			5			-		50
Provision		(131	)		(181	)		84			404			100			(9	)		908		1,175
Ending balance	$	616		$	810		$	1,152		$	2,648		$	1,102		$	50		$	927	$	7,305
Three months ended March 31, 2013
Allowance for loan losses:
Beginning balance	$	932		$	1,474		$	970		$	2,110		$	1,163		$	33		$	285	$	6,967
Charge offs		-			(199	)		(300	)		(399	)		(38	)		(140	)		-		(1,076	)
Recoveries		-			-			2			39			121			-			-		162
Provision		(34	)		(84	)		376			345			50			171			275		1,099
Ending balance	$	898		$	1,191		$	1,048		$	2,095		$	1,296		$	64		$	560	$	7,152

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Activity in the allowance for covered loan and lease losses by class of loan for the three months ended March 31, 2014 and 2013 is summarized below (in thousands).

	Commercial		Commercial
	Real Estate		Real Estate		Construction							Other
Covered loans:	Owner		Non-owner		and Land		Commercial			1-4 Family		Consumer
Three months ended March 31, 2014	Occupied		Occupied (1)		Development		Loans			Residential (3)		Loans		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	-	$	45	$	-	$	-		$	-	$	6	$	-	$	51
Charge offs		-		-		-		-			-		-		-		-
Recoveries		-		-		-		-			-		-		-		-
Adjustments (2)		-		-		-		-			-		-		-		-
Provision		-		-		-		-			-		-		-		-
Ending balance	$	-	$	45	$	-	$	-		$	-	$	6	$	-	$	51
Three months ended March 31, 2013
Allowance for loan losses:
Beginning balance	$	-	$	45	$	-	$	43		$	-	$	11	$	-	$	99
Charge offs		-		-		-		-			-		-		-		-
Recoveries		-		-		-		-			-		-		-		-
Adjustments (2)		-		-		-		(35	)		-		8		-		(27	)
Provision		-		-		-		(8	)		-		2		-		(6	)
Ending balance	$	-	$	45	$	-	$	-		$	-	$	21	$	-	$	66

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Represents the portion of increased expected losses which is covered by the loss sharing agreement with the FDIC.

(3) Includes home equity lines of credit.

Schedule of allowance for non-covered loan and covered loan losses and the recorded investment by portfolio segment

The following tables present the balance in the allowance for loan losses and the recorded investment in non-covered loans by portfolio segment and based on impairment method as of March 31, 2014 and December 31, 2013 (in thousands):

	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
Non-covered loans:	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
March 31, 2014
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	109	$	-	$	-	$	200	$	-	$	-	$	-	$	309
Collectively evaluated for impairment		507		810		1,152		2,448		1,102		50		927		6,996
Total ending allowance	$	616	$	810	$	1,152	$	2,648	$	1,102	$	50	$	927	$	7,305
Loans:
Individually evaluated for impairment	$	7,733	$	347	$	-	$	4,324	$	5,730	$	-	$	-	$	18,134
Collectively evaluated for impairment		97,388		170,533		39,872		99,934		63,018		1,249		-		471,994
Total ending loan balances	$	105,121	$	170,880	$	39,872	$	104,258	$	68,748	$	1,249	$	-	$	490,128
December 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	192	$	-	$	-	$	325	$	200	$	-	$	-	$	717
Collectively evaluated for impairment		622		985		1,068		2,472		1,102		54		19		6,322
Total ending allowance	$	814	$	985	$	1,068	$	2,797	$	1,302	$	54	$	19	$	7,039
Loans:
Individually evaluated for impairment	$	7,876	$	359	$	2,107	$	4,873	$	7,995	$	-	$	-	$	23,210
Collectively evaluated for impairment		98,349		171,653		36,961		99,411		64,918		1,308		-		472,600
Total ending loan balances	$	106,225	$	172,012	$	39,068	$	104,284	$	72,913	$	1,308	$	-	$	495,810

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

The following tables present the balance in the allowance for covered loan losses and the recorded investment in covered loans by portfolio segment and based on impairment method as of March 31, 2014 and December 31, 2013 (in thousands):

	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
Covered loans:	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
March 31, 2014
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		-		45		-		-		-		6		-		51
Total ending allowance	$	-	$	45	$	-	$	-	$	-	$	6	$	-	$	51
Loans:
Individually evaluated for impairment	$	737	$	2,137	$	-	$	-	$	1,210	$	-	$	-	$	4,084
Collectively evaluated for impairment		815		4,212		-		898		40,245		77		-		46,247
Total ending loan balances	$	1,552	$	6,349	$	-	$	898	$	41,455	$	77	$	-	$	50,331
December 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		-		45		-		-		-		6		-		51
Total ending allowance	$	-	$	45	$	-	$	-	$	-	$	6	$	-	$	51
Loans:
Individually evaluated for impairment	$	745	$	2,145	$	-	$	-	$	1,220	$	-	$	-	$	4,110
Collectively evaluated for impairment		858		4,369		1		1,097		41,180		81		-		47,586
Total ending loan balances	$	1,603	$	6,514	$	1	$	1,097	$	42,400	$	81	$	-	$	51,696

(1) Includes loans secured by farmland and multi-family residential loans.

(2) Includes home equity lines of credit.

Schedule of the risk category of loans by class of loans

March 31, 2014	Covered Loans						Non-covered Loans								Total Loans
	Classified/						Special								Classified/
	Criticized (1)		Pass		Total		Mention		Substandard (3)		Pass		Total		Criticized		Pass		Total
Commercial real estate - owner occupied	$	737	$	815	$	1,552	$	796	$	7,733	$	96,592	$	105,121	$	9,266	$	97,407	$	106,673
Commercial real estate - non-owner occupied (2)		2,137		4,212		6,349		-		347		170,533		170,880		2,484		174,745		177,229
Construction and land development		-		-		-		618		-		39,254		39,872		618		39,254		39,872
Commercial loans		-		898		898		31		4,324		99,903		104,258		4,355		100,801		105,156
Residential 1-4 family (4)		1,210		40,245		41,455		171		5,730		62,847		68,748		7,111		103,092		110,203
Other consumer loans		-		77		77		-		-		1,249		1,249		-		1,326		1,326
Total	$	4,084	$	46,247	$	50,331	$	1,616	$	18,134	$	470,378	$	490,128	$	23,834	$	516,625	$	540,459
December 31, 2013	Covered Loans						Non-covered Loans								Total Loans
	Classified/						Special								Classified/
	Criticized (1)		Pass		Total		Mention		Substandard (3)		Pass		Total		Criticized		Pass		Total
Commercial real estate - owner occupied	$	745	$	858	$	1,603	$	802	$	7,876	$	97,547	$	106,225	$	9,423	$	98,405	$	107,828
Commercial real estate - non-owner occupied (2)		2,145		4,369		6,514		-		359		171,653		172,012		2,504		176,022		178,526
Construction and land development		-		1		1		618		2,107		36,343		39,068		2,725		36,344		39,069
Commercial loans		-		1,097		1,097		31		4,873		99,380		104,284		4,904		100,477		105,381
Residential 1-4 family (4)		1,220		41,180		42,400		176		7,995		64,742		72,913		9,391		105,922		115,313
Other consumer loans		-		81		81		-		-		1,308		1,308		-		1,389		1,389
Total	$	4,110	$	47,586	$	51,696	$	1,627	$	23,210	$	470,973	$	495,810	$	28,947	$	518,559	$	547,506
(1) Credit quality is enhanced by a loss sharing agreement with the FDIC in the covered portfolio. The same credit quality indicators used in the non-covered portfolio are combined.
(2) Includes loans secured by farmland and multi-family residential loans.
(3) Includes SBA guarantees of $2.4 million as of March 31, 2014 and December 31, 2013.
(4) Includes home equity lines of credit.

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ACQUISTIONS

3 Months Ended

Mar. 31, 2014

Business Combinations [Abstract]

ACQUISTIONS

8.         ACQUISTIONS

As previously announced, on January 8, 2014, Southern National Bancorp of Virginia, Inc. entered into a merger agreement with Prince George’s Federal Savings Bank (FSB). Prince George’s FSB, with assets of approximately $104 million, was founded in 1931 and is headquartered in Upper Marlboro, which is the County Seat of Prince George’s County, Maryland. Prince George’s FSB has four offices, all of which are in Maryland, including a main office in Upper Marlboro and three branch offices in Dunkirk, Brandywine and Huntingtown.Upon completion of the cash and stock transaction with a value of approximately $11.5 million, the combined company will have approximately $805 million in total assets, $700 million in total deposits, and $600 million in total loans.

Sonabank has entered into an agreement to purchase 44% of the common stock of Southern Trust Mortgage LLC (STM) from the Middleburg Bank. The CEO of STM, Jerry Flowers, and EVB will be purchasing the remainder of the stock held by Middleburg Bank. Upon consummation of the transaction, STM management will own 51.1%, Sonabank 44% and EVB 4.9%. We hope to close this transaction in the second quarter.

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

EARNINGS PER SHARE

6.         EARNINGS PER SHARE

The following is a reconciliation of the denominators of the basic and diluted earnings per share (“EPS”) computations (dollars in thousands, except per share data):

			Weighted
			Average
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
For the three months ended March 31, 2014
Basic EPS	$	1,642		11,591	$	0.14
Effect of dilutive stock options and warrants		-		66		-
Diluted EPS	$	1,642		11,657	$	0.14
For the three months ended March 31, 2013
Basic EPS	$	1,526		11,590	$	0.13
Effect of dilutive stock options and warrants		-		26		-
Diluted EPS	$	1,526		11,616	$	0.13

There were 643,199 and 591,843 anti-dilutive options and warrants for the three months ended March 31, 2014 and 2013, respectively.

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FAIR VALUE

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE

7.FAIR VALUE

ASC 820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability

The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:

Securities Available for Sale

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy.  Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities.  If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flow.  Level 2 securities would include U. S. agency securities, mortgage-backed securities, obligations of states and political subdivisions and certain corporate, asset-backed and other securities.  In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.  Currently, all of Southern National’s available-for-sale debt securities are considered to be Level 2 securities.

Assets measured at fair value on a recurring basis are summarized below:

			Fair Value Measurements Using
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Total at		Identical Assets		Inputs		Inputs
(dollars in thousands)	March 31, 2014		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available for sale securities
Obligations of states and political subdivisions	$	2,135	$	-	$	2,135	$	-
			Fair Value Measurements Using
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Total at		Identical Assets		Inputs		Inputs
(dollars in thousands)	December 31, 2013		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available for sale securities
Obligations of states and political subdivisions	$	1,993	$	-	$	1,993	$	-

Assets and Liabilities Measured on a Non-recurring Basis:

Trust Preferred Securities Classified as Held-to-Maturity

The base input in calculating fair value is a Bloomberg Fair Value Index yield curve for single issuer trust preferred securities which correspond to the ratings of the securities we own.  We also use composite rating indices to fill in the gaps where the bank rating indices did not correspond to the ratings in our portfolio.  When a bank index that matches the rating of our security is not available, we used the bank index that most closely matches the rating, adjusted by the spread between the composite index that most closely matches the security’s rating and the composite index with a rating that matches the bank index used.  Then, we use the adjusted index yield, which is further adjusted by a liquidity premium, as the discount rate to be used in the calculation of the present value of the same cash flows used to evaluate the securities for OTTI.  The liquidity premiums were derived in consultation with a securities advisor. The liquidity premiums we used ranged from 2% to 5%, and the adjusted discount rates ranged from 9.30% to 14.49% at March 31, 2014.  The liquidity premiums we used ranged from 2% to 5%, and the adjusted discount rates ranged from 10.97% to 14.97% at December 31, 2013. Due to current market conditions as well as the limited trading activity of these securities, the market value of the securities is highly sensitive to assumption changes and market volatility.  We have determined that our trust preferred securities are classified within Level 3 of the fair value hierarchy.

Other Residential Collateralized Mortgage Obligation Classified as Held-to Maturity

The fair value was estimated within Level 2 fair value hierarchy, as the fair value is based on either pricing models, quoted market prices of securities with similar characteristics, or discounted cash flows.  We have evaluated this security for potential impairment and, based on our review of the trustee report, shock analysis and current information regarding delinquencies, nonperforming loans and credit support, it has been determined that no OTTI charge for credit exists for the three months ended March 31, 2014.  The assumptions used in the analysis included a 6.1% prepayment speed, 6.4% default rate, a 57% loss severity and an accounting yield of 2.38% at March 31, 2014.  The assumptions used in the analysis at December 31, 2013, included a 4.3% prepayment speed, 8.9% default rate, a 51% loss severity and an accounting yield of 1.38%.

Impaired Loans

Generally, we measure the impairment for impaired loans considering the fair value of the loan’s collateral (if the loan is collateral dependent).  Fair value of the loan’s collateral is determined by an independent appraisal or evaluation less estimated costs related to selling the collateral.  In some cases appraised value is net of costs to sell.  Estimated selling costs range from 6% to 10% of collateral valuation at March 31, 2014 and December 31, 2013. Fair value is classified as Level 3 in the fair value hierarchy. Non-covered loans identified as impaired totaled $18.1 million (including SBA guarantees of $2.4 million and HarVest loans of $868 thousand) as of March 31, 2014 with an allocated allowance for loan losses totaling $309 thousand compared to a carrying amount of $23.2 million (including SBA guarantees of $2.4 million) with an allocated allowance for loan losses totaling $717 thousand at December 31, 2013.  Charge offs related to the impaired loans at March 31, 2014 totaled $516 thousand for the quarter ended March 31, 2014 compared to $555 thousand for the quarter ended March 31, 2013.

Other Real Estate Owned (OREO)

OREO is evaluated at the time of acquisition and recorded at fair value as determined by independent appraisal or evaluation less cost to sell.  In some cases appraised value is net of costs to sell.  Selling costs have been in the range from 6% to 7.6% of collateral valuation at March 31, 2014 and December 31, 2013. Fair value is classified as Level 3 in the fair value hierarchy. OREO is further evaluated quarterly for any additional impairment.  At March 31, 2014, the total amount of OREO was $13.8 million, of which $12.1 million was non-covered and $1.7 million was covered.

At December 31, 2013, the total amount of OREO was $11.8 million, of which $9.6 million was non-covered (including $509 thousand acquired from HarVest) and $2.2 million was covered.

Assets measured at fair value on a non-recurring basis are summarized below:

			Fair Value Measurements Using
				Significant
			Quoted Prices in	Other	Significant
			Active Markets for	Observable	Unobservable
	Total at		Identical Assets	Inputs	Inputs
(dollars in thousands)	March 31, 2014		(Level 1)	(Level 2)	(Level 3)
Securities held to maturity:
Trust preferred securities	$	520			$	520
Impaired non-covered loans:
Commercial real estate - owner occupied		7,624				7,624
Commercial real estate - non-owner occupied (1)		347				347
Construction and land development		-				-
Commercial loans		4,124				4,124
Residential 1-4 family		5,730				5,730
Impaired covered loans:
Commercial real estate - owner occupied		737				737
Commercial real estate - non-owner occupied (1)		2,137				2,137
Residential 1-4 family		1,210				1,210
Non-covered other real estate owned:
Commercial real estate - owner occupied		461				461
Commercial real estate - non-owner occupied (1)		-				-
Construction and land development		7,564				7,564
Residential 1-4 family		4,074				4,074
Covered other real estate owned:
Commercial real estate - owner occupied		-				-
Commercial real estate - non-owner occupied (1)		1,450				1,450
Commercial		79				79
Residential 1-4 family		127				127
			Fair Value Measurements Using
				Significant
			Quoted Prices in	Other	Significant
			Active Markets for	Observable	Unobservable
	Total at		Identical Assets	Inputs	Inputs
(dollars in thousands)	December 31, 2013		(Level 1)	(Level 2)	(Level 3)
Impaired non-covered loans:
Commercial real estate - owner occupied	$	7,684			$	7,684
Commercial real estate - non-owner occupied (1)		359				359
Construction and land development		2,107				2,107
Commercial loans		4,548				4,548
Residential 1-4 family		7,795				7,795
Impaired covered loans:
Commercial real estate - owner occupied		745				745
Commercial real estate - non-owner occupied (1)		2,145				2,145
Residential 1-4 family		1,220				1,220
Non-covered other real estate owned:
Commercial real estate - owner occupied		461				461
Commercial real estate - non-owner occupied (1)		1,342				1,342
Construction and land development		6,066				6,066
Residential 1-4 family		1,710				1,710
Covered other real estate owned:
Commercial real estate - owner occupied		557				557
Commercial real estate - non-owner occupied (1)		1,450				1,450
Commercial		79				79
Residential 1-4 family		127				127
(1) Includes loans secured by farmland and multi-family residential loans.

Fair Value of Financial Instruments

The carrying amount, estimated fair values and fair value hierarchy levels (previously defined) of financial instruments were as follows (in thousands):

		March 31, 2014				December 31, 2013
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy Level	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	19,382	$	19,382	$	20,856	$	20,856
Securities available for sale	See previous table		2,135		2,135		1,993		1,993
Securities held to maturity	Level 2 & Level 3		86,106		82,631		82,443		76,193
Stock in Federal Reserve Bank and Federal
Home Loan Bank	n/a		4,793		n/a		5,915		n/a
Net non-covered loans	Level 3		481,409		487,745		487,318		493,472
Net covered loans	Level 3		50,284		56,589		51,650		57,564
Accrued interest receivable	Level 2 & Level 3		2,015		2,015		2,186		2,186
FDIC indemnification asset	Level 3		5,066		3,606		5,804		4,220
Financial liabilities:
Demand deposits	Level 1		69,432		69,432		68,940		68,940
Money market and savings accounts	Level 1		144,855		144,855		147,854		147,854
Certificates of deposit	Level 3		342,004		342,920		323,565		324,733
Securities sold under agreements to
repurchase and other short-term borrowings	Level 1		19,727		19,727		34,545		34,545
FHLB advances	Level 3		25,000		25,828		30,250		31,168
Accrued interest payable	Level 1 & Level 3		371		371		341		341

Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable, demand deposits, savings accounts, money market accounts, short-term debt, and variable rate loans that reprice frequently and fully.  For fixed rate loans or deposits and for variable rate loans with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life. A discount for liquidity risk was not considered necessary in estimating the fair value of loans. It was not practicable to determine the fair value of Federal Reserve Bank and Federal Home Loan Bank stock due to restrictions placed on its transferability.  Fair value of long-term debt is based on current rates for similar financing.  The fair value of the FDIC indemnification asset was determined by discounting estimated future cash flows using the long-term risk free rate plus a premium and represents the present value of our current expectation for recoveries from the FDIC on covered loans.  The fair value of off-balance-sheet items is not considered material.  The fair value of loans is not presented on an exit price basis.

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ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with U. S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the carrying value of investment securities, other than temporary impairment of investment securities, the valuation of goodwill and intangible assets, the FDIC indemnification asset,  mortgage servicing rights, other real estate owned and deferred tax assets.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2014, the FASB issued ASU No. 2014-04, “Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” The objective of this guidance is to clarify when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. ASU No. 2014-04 states that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, ASU No. 2014-04 requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU No. 2014-04 is effective for interim and annual reporting periods beginning after December 15, 2014. The adoption of ASU No. 2014-04 is not expected to have a material impact on the Southern National’s Consolidated Financial Statements.

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SECURITIES (Detail Textuals 2) (Trust preferred securities, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Trust preferred securities
Held to Maturity
OTTI charges related to credit	$ 16	$ 3

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FAIR VALUE - Assets measured at fair value on non-recurring basis (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held to maturity fair value (in dollars)	$ 82,631		$ 76,193
Fair Value, Measurements, Nonrecurring | Total | Commercial real estate - owner occupied
Impaired non-covered loans:
Impaired non-covered loans	7,624		7,684
Impaired covered loans:
Impaired covered loans	737		745
Non covered other real estate owned:
Non-covered other real estate owned	461		461
Covered other real estate owned:
Covered other real estate owned			557
Fair Value, Measurements, Nonrecurring | Total | Commercial real estate - non-owner occupied
Impaired non-covered loans:
Impaired non-covered loans	347	[1]	359	[1]
Impaired covered loans:
Impaired covered loans	2,137	[1]	2,145	[1]
Non covered other real estate owned:
Non-covered other real estate owned		[1]	1,342	[1]
Covered other real estate owned:
Covered other real estate owned	1,450	[1]	1,450	[1]
Fair Value, Measurements, Nonrecurring | Total | Construction and land development
Impaired non-covered loans:
Impaired non-covered loans			2,107
Non covered other real estate owned:
Non-covered other real estate owned	7,564		6,066
Fair Value, Measurements, Nonrecurring | Total | Commercial loans
Impaired non-covered loans:
Impaired non-covered loans	4,124		4,548
Covered other real estate owned:
Covered other real estate owned	79		79
Fair Value, Measurements, Nonrecurring | Total | Residential 1-4 family
Impaired non-covered loans:
Impaired non-covered loans	5,730		7,795
Impaired covered loans:
Impaired covered loans	1,210		1,220
Non covered other real estate owned:
Non-covered other real estate owned	4,074		1,710
Covered other real estate owned:
Covered other real estate owned	127		127
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate - owner occupied
Impaired non-covered loans:
Impaired non-covered loans
Impaired covered loans:
Impaired covered loans
Non covered other real estate owned:
Non-covered other real estate owned
Covered other real estate owned:
Covered other real estate owned
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate - non-owner occupied
Impaired non-covered loans:
Impaired non-covered loans		[1]		[1]
Impaired covered loans:
Impaired covered loans		[1]		[1]
Non covered other real estate owned:
Non-covered other real estate owned		[1]		[1]
Covered other real estate owned:
Covered other real estate owned		[1]		[1]
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Construction and land development
Impaired non-covered loans:
Impaired non-covered loans
Non covered other real estate owned:
Non-covered other real estate owned
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial loans
Impaired non-covered loans:
Impaired non-covered loans
Covered other real estate owned:
Covered other real estate owned
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential 1-4 family
Impaired non-covered loans:
Impaired non-covered loans
Impaired covered loans:
Impaired covered loans
Non covered other real estate owned:
Non-covered other real estate owned
Covered other real estate owned:
Covered other real estate owned
Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs (Level 2) | Commercial real estate - owner occupied
Impaired non-covered loans:
Impaired non-covered loans
Impaired covered loans:
Impaired covered loans
Non covered other real estate owned:
Non-covered other real estate owned
Covered other real estate owned:
Covered other real estate owned
Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs (Level 2) | Commercial real estate - non-owner occupied
Impaired non-covered loans:
Impaired non-covered loans		[1]		[1]
Impaired covered loans:
Impaired covered loans		[1]		[1]
Non covered other real estate owned:
Non-covered other real estate owned		[1]		[1]
Covered other real estate owned:
Covered other real estate owned		[1]		[1]
Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs (Level 2) | Construction and land development
Impaired non-covered loans:
Impaired non-covered loans
Non covered other real estate owned:
Non-covered other real estate owned
Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs (Level 2) | Commercial loans
Impaired non-covered loans:
Impaired non-covered loans
Covered other real estate owned:
Covered other real estate owned
Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs (Level 2) | Residential 1-4 family
Impaired non-covered loans:
Impaired non-covered loans
Impaired covered loans:
Impaired covered loans
Non covered other real estate owned:
Non-covered other real estate owned
Covered other real estate owned:
Covered other real estate owned
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | Commercial real estate - owner occupied
Impaired non-covered loans:
Impaired non-covered loans	7,624		7,684
Impaired covered loans:
Impaired covered loans	737		745
Non covered other real estate owned:
Non-covered other real estate owned	461		461
Covered other real estate owned:
Covered other real estate owned			557
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | Commercial real estate - non-owner occupied
Impaired non-covered loans:
Impaired non-covered loans	347	[1]	359	[1]
Impaired covered loans:
Impaired covered loans	2,137	[1]	2,145	[1]
Non covered other real estate owned:
Non-covered other real estate owned		[1]	1,342	[1]
Covered other real estate owned:
Covered other real estate owned	1,450	[1]	1,450	[1]
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | Construction and land development
Impaired non-covered loans:
Impaired non-covered loans			2,107
Non covered other real estate owned:
Non-covered other real estate owned	7,564		6,066
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | Commercial loans
Impaired non-covered loans:
Impaired non-covered loans	4,124		4,548
Covered other real estate owned:
Covered other real estate owned	79		79
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | Residential 1-4 family
Impaired non-covered loans:
Impaired non-covered loans	5,730		7,795
Impaired covered loans:
Impaired covered loans	1,210		1,220
Non covered other real estate owned:
Non-covered other real estate owned	4,074		1,710
Covered other real estate owned:
Covered other real estate owned	127		127
Trust Preferred Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held to maturity fair value (in dollars)	6,779		6,232
Trust Preferred Securities | Fair Value, Measurements, Nonrecurring | Total
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held to maturity fair value (in dollars)	520
Trust Preferred Securities | Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held to maturity fair value (in dollars)
Trust Preferred Securities | Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held to maturity fair value (in dollars)
Trust Preferred Securities | Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held to maturity fair value (in dollars)	$ 520

[1] Includes loans secured by farmland and multi-family residential loans.

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FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of assets measured at fair value on a recurring basis

			Fair Value Measurements Using
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Total at		Identical Assets		Inputs		Inputs
(dollars in thousands)	March 31, 2014		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available for sale securities
Obligations of states and political subdivisions	$	2,135	$	-	$	2,135	$	-
			Fair Value Measurements Using
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Total at		Identical Assets		Inputs		Inputs
(dollars in thousands)	December 31, 2013		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available for sale securities
Obligations of states and political subdivisions	$	1,993	$	-	$	1,993	$	-

Schedule of assets measured at fair value on non recurring basis

			Fair Value Measurements Using
				Significant
			Quoted Prices in	Other	Significant
			Active Markets for	Observable	Unobservable
	Total at		Identical Assets	Inputs	Inputs
(dollars in thousands)	March 31, 2014		(Level 1)	(Level 2)	(Level 3)
Securities held to maturity:
Trust preferred securities	$	520			$	520
Impaired non-covered loans:
Commercial real estate - owner occupied		7,624				7,624
Commercial real estate - non-owner occupied (1)		347				347
Construction and land development		-				-
Commercial loans		4,124				4,124
Residential 1-4 family		5,730				5,730
Impaired covered loans:
Commercial real estate - owner occupied		737				737
Commercial real estate - non-owner occupied (1)		2,137				2,137
Residential 1-4 family		1,210				1,210
Non-covered other real estate owned:
Commercial real estate - owner occupied		461				461
Commercial real estate - non-owner occupied (1)		-				-
Construction and land development		7,564				7,564
Residential 1-4 family		4,074				4,074
Covered other real estate owned:
Commercial real estate - owner occupied		-				-
Commercial real estate - non-owner occupied (1)		1,450				1,450
Commercial		79				79
Residential 1-4 family		127				127
			Fair Value Measurements Using
				Significant
			Quoted Prices in	Other	Significant
			Active Markets for	Observable	Unobservable
	Total at		Identical Assets	Inputs	Inputs
(dollars in thousands)	December 31, 2013		(Level 1)	(Level 2)	(Level 3)
Impaired non-covered loans:
Commercial real estate - owner occupied	$	7,684			$	7,684
Commercial real estate - non-owner occupied (1)		359				359
Construction and land development		2,107				2,107
Commercial loans		4,548				4,548
Residential 1-4 family		7,795				7,795
Impaired covered loans:
Commercial real estate - owner occupied		745				745
Commercial real estate - non-owner occupied (1)		2,145				2,145
Residential 1-4 family		1,220				1,220
Non-covered other real estate owned:
Commercial real estate - owner occupied		461				461
Commercial real estate - non-owner occupied (1)		1,342				1,342
Construction and land development		6,066				6,066
Residential 1-4 family		1,710				1,710
Covered other real estate owned:
Commercial real estate - owner occupied		557				557
Commercial real estate - non-owner occupied (1)		1,450				1,450
Commercial		79				79
Residential 1-4 family		127				127
(1) Includes loans secured by farmland and multi-family residential loans.

Schedule of estimated fair values and fair value hierarchy levels of financial instruments

		March 31, 2014				December 31, 2013
	Fair Value	Carrying		Fair		Carrying		Fair
	Hierarchy Level	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	19,382	$	19,382	$	20,856	$	20,856
Securities available for sale	See previous table		2,135		2,135		1,993		1,993
Securities held to maturity	Level 2 & Level 3		86,106		82,631		82,443		76,193
Stock in Federal Reserve Bank and Federal
Home Loan Bank	n/a		4,793		n/a		5,915		n/a
Net non-covered loans	Level 3		481,409		487,745		487,318		493,472
Net covered loans	Level 3		50,284		56,589		51,650		57,564
Accrued interest receivable	Level 2 & Level 3		2,015		2,015		2,186		2,186
FDIC indemnification asset	Level 3		5,066		3,606		5,804		4,220
Financial liabilities:
Demand deposits	Level 1		69,432		69,432		68,940		68,940
Money market and savings accounts	Level 1		144,855		144,855		147,854		147,854
Certificates of deposit	Level 3		342,004		342,920		323,565		324,733
Securities sold under agreements to
repurchase and other short-term borrowings	Level 1		19,727		19,727		34,545		34,545
FHLB advances	Level 3		25,000		25,828		30,250		31,168
Accrued interest payable	Level 1 & Level 3		371		371		341		341

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SECURITIES - Carrying amount and fair value of securities (Details 1) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 86,106	$ 82,443
Gross Unrecognized Gains	1,990	1,614
Gross Unrecognized Losses	(5,465)	(7,864)
Fair Value	82,631	76,193
Residential government-sponsored mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	24,722	25,609
Gross Unrecognized Gains	680	673
Gross Unrecognized Losses	(172)	(294)
Fair Value	25,230	25,988
Residential government-sponsored collateralized mortgage obligations
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	4,101	4,295
Gross Unrecognized Gains		2
Gross Unrecognized Losses	(60)	(349)
Fair Value	4,041	3,948
Government-sponsored agency securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	34,972	29,971
Gross Unrecognized Gains	41
Gross Unrecognized Losses	(2,910)	(3,994)
Fair Value	32,103	25,977
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	14,360	14,388
Gross Unrecognized Gains	28
Gross Unrecognized Losses	(555)	(987)
Fair Value	13,833	13,401
Other residential collateralized mortgage obligations
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	645	659
Gross Unrecognized Gains
Gross Unrecognized Losses		(12)
Fair Value	645	647
Trust preferred securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	7,306	7,521
Gross Unrecognized Gains	1,241	939
Gross Unrecognized Losses	(1,768)	(2,228)
Fair Value	$ 6,779	$ 6,232

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EARNINGS PER SHARE (Detail Textuals) (Stock Options and Warrants)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Stock Options and Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive options and warrants (in shares)	643,199	591,843

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LOANS -Allowance for loan losses and recorded investment in non covered loans by portfolio segment (Details 6) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013		Dec. 31, 2012
Ending allowance balance attributable to loans:
Total ending allowance	$ 7,356		$ 7,090
Total Loans
Loans:
Total ending loan balances	540,459		547,506
Total Loans | Commercial real estate - owner occupied
Loans:
Total ending loan balances	106,673		107,828
Total Loans | Commercial real estate - non-owner occupied
Loans:
Total ending loan balances	177,229	[1]	178,526	[1]
Total Loans | Construction and land development
Loans:
Total ending loan balances	39,872		39,069
Total Loans | Commercial loans
Loans:
Total ending loan balances	105,156		105,381
Total Loans | Residential 1-4 family
Loans:
Total ending loan balances	110,203	[2]	115,313	[2]
Total Loans | Other consumer loans
Loans:
Total ending loan balances	1,326		1,389
Total Loans | Non-covered Loans
Ending allowance balance attributable to loans:
Individually evaluated for impairment	309		717
Collectively evaluated for impairment	6,996		6,322
Total ending allowance	7,305		7,039		7,152		6,967
Loans:
Individually evaluated for impairment	18,134		23,210
Collectively evaluated for impairment	471,994		472,600
Total ending loan balances	490,128		495,810
Total Loans | Non-covered Loans | Commercial real estate - owner occupied
Ending allowance balance attributable to loans:
Individually evaluated for impairment	109		192
Collectively evaluated for impairment	507		622
Total ending allowance	616		814		898		932
Loans:
Individually evaluated for impairment	7,733		7,876
Collectively evaluated for impairment	97,388		98,349
Total ending loan balances	105,121		106,225
Total Loans | Non-covered Loans | Commercial real estate - non-owner occupied
Ending allowance balance attributable to loans:
Individually evaluated for impairment		[1]		[1]
Collectively evaluated for impairment	810	[1]	985	[1]
Total ending allowance	810	[1]	985	[1]	1,191	[1]	1,474	[1]
Loans:
Individually evaluated for impairment	347	[1]	359	[1]
Collectively evaluated for impairment	170,533	[1]	171,653	[1]
Total ending loan balances	170,880	[1]	172,012	[1]
Total Loans | Non-covered Loans | Construction and land development
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment	1,152		1,068
Total ending allowance	1,152		1,068		1,048		970
Loans:
Individually evaluated for impairment			2,107
Collectively evaluated for impairment	39,872		36,961
Total ending loan balances	39,872		39,068
Total Loans | Non-covered Loans | Commercial loans
Ending allowance balance attributable to loans:
Individually evaluated for impairment	200		325
Collectively evaluated for impairment	2,448		2,472
Total ending allowance	2,648		2,797		2,095		2,110
Loans:
Individually evaluated for impairment	4,324		4,873
Collectively evaluated for impairment	99,934		99,411
Total ending loan balances	104,258		104,284
Total Loans | Non-covered Loans | Residential 1-4 family
Ending allowance balance attributable to loans:
Individually evaluated for impairment		[2]	200	[2]
Collectively evaluated for impairment	1,102	[2]	1,102	[2]
Total ending allowance	1,102	[2]	1,302	[2]	1,296	[2]	1,163	[2]
Loans:
Individually evaluated for impairment	5,730	[2]	7,995	[2]
Collectively evaluated for impairment	63,018	[2]	64,918	[2]
Total ending loan balances	68,748	[2]	72,913	[2]
Total Loans | Non-covered Loans | Other consumer loans
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment	50		54
Total ending allowance	50		54		64		33
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment	1,249		1,308
Total ending loan balances	1,249		1,308
Total Loans | Non-covered Loans | Unallocated Loan
Ending allowance balance attributable to loans:
Individually evaluated for impairment
Collectively evaluated for impairment	927		19
Total ending allowance	927		19		560		285
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment
Total ending loan balances

[1] Includes loans secured by farmland and multi-family residential loans.

[2] Includes home equity lines of credit.

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (USD $) In Thousands, unless otherwise specified	Common Stock	Additional Paid in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2013	$ 116	$ 97,127	$ 12,561	$ (3,190)	$ 106,614
Comprehensive income
Net income			1,642		1,642
Change in unrealized loss on securities available for sale (net of tax benefit, $49)				94	94
Change in unrecognized loss on securities held to maturity for which a portion of OTTI has been recognized (net of tax, $0 and accretion, $20 and amounts recorded into other comprehensive income at transfer)				1	1
Dividends on common stock ($.07 per share)			(811)		(811)
Issuance of common stock under Stock Incentive Plan (4,300 shares)		30			30
Stock-based compensation expense		77			77
Balance at Mar. 31, 2014	$ 116	$ 97,234	$ 13,392	$ (3,095)	$ 107,647

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SECURITIES

3 Months Ended

Mar. 31, 2014

Investments, Debt and Equity Securities [Abstract]

SECURITIES

3.         SECURITIES

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows (in thousands):

	Amortized		Gross Unrealized					Fair
March 31, 2014	Cost		Gains		Losses			Value
Obligations of states and political subdivisions	$	2,300	$	-	$	(165	)	$	2,135
	Amortized		Gross Unrealized					Fair
December 31, 2013	Cost		Gains		Losses			Value
Obligations of states and political subdivisions	$	2,302	$	-	$	(309	)	$	1,993

The amortized cost, unrecognized gains and losses, and fair value of securities held to maturity were as follows (in thousands):

	Amortized		Gross Unrecognized					Fair
March 31, 2014	Cost		Gains		Losses			Value
Residential government-sponsored mortgage-backed securities	$	24,722	$	680	$	(172	)	$	25,230
Residential government-sponsored collateralized mortgage obligations		4,101		-		(60	)		4,041
Government-sponsored agency securities		34,972		41		(2,910	)		32,103
Obligations of states and political subdivisions		14,360		28		(555	)		13,833
Other residential collateralized mortgage obligations		645		-		-			645
Trust preferred securities		7,306		1,241		(1,768	)		6,779
	$	86,106	$	1,990	$	(5,465	)	$	82,631

	Amortized		Gross Unrecognized					Fair
December 31, 2013	Cost		Gains		Losses			Value
Residential government-sponsored mortgage-backed securities	$	25,609	$	673	$	(294	)	$	25,988
Residential government-sponsored collateralized mortgage obligations		4,295		2		(349	)		3,948
Government-sponsored agency securities		29,971		-		(3,994	)		25,977
Obligations of states and political subdivisions		14,388		-		(987	)		13,401
Other residential collateralized mortgage obligations		659		-		(12	)		647
Trust preferred securities		7,521		939		(2,228	)		6,232
	$	82,443	$	1,614	$	(7,864	)	$	76,193

The amortized cost amounts are net of recognized other than temporary impairment.

The fair value and carrying amount, if different, of debt securities as of March 31, 2014, by contractual maturity were as follows (in thousands).  Securities not due at a single maturity date, primarily mortgage-backed securities and collateralized mortgage obligations, are shown separately.

	Held to Maturity				Available for Sale
	Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value
Due in five to ten years	$	6,535	$	6,363	$	-	$	-
Due after ten years		50,103		46,352		2,300		2,135
Residential government-sponsored mortgage-backed securities		24,722		25,230		-		-
Residential government-sponsored collateralized mortgage obligations		4,101		4,041		-		-
Other residential collateralized mortgage obligations		645		645		-		-
Total	$	86,106	$	82,631	$	2,300	$	2,135

Securities with a carrying amount of approximately $69.2 million and $65.3 million at March 31, 2014 and December 31, 2013, respectively, were pledged to secure public deposits, repurchase agreements and a line of credit for advances from the Federal Home Loan Bank of Atlanta (“FHLB”).

Southern National monitors the portfolio for indicators of other than temporary impairment.  At March 31, 2014 and December 31, 2013, certain securities’ fair values were below cost. As outlined in the table below, there were securities with fair values totaling approximately $62.3 million in the portfolio with the carrying value exceeding the estimated fair value that are considered temporarily impaired at March 31, 2014.  Because the decline in fair value is attributable to changes in interest rates and market illiquidity, and not credit quality, and because we do not have the intent to sell these securities and it is likely that we will not be required to sell the securities before their anticipated recovery, management does not consider these securities to be other-than-temporarily impaired as of March 31, 2014. The following tables present information regarding securities in a continuous unrealized loss position as of March 31, 2014 and December 31, 2013 (in thousands) by duration of time in a loss position:

March 31, 2014
	Less than 12 months				12 Months or More					Total
Available for Sale	Fair value		Unrealized Losses		Fair value		Unrealized Losses			Fair value		Unrealized Losses
Obligations of states and political subdivisions	$	-	$	-	$	2,135	$	(165	)	$	2,135	$	(165	)

	Less than 12 months					12 Months or More					Total
Held to Maturity	Fair value		Unrecognized Losses			Fair value		Unrecognized Losses			Fair value		Unrecognized Losses
Residential government-sponsored mortgage-backed securities	$	12,392	$	(172	)	$	-	$	-		$	12,392	$	(172	)
Residential government-sponsored collateralized mortgage obligations		4,041		(60	)		-		-			4,041		(60	)
Government-sponsored agency securities		9,064		(920	)		17,998		(1,990	)		27,062		(2,910	)
Obligations of states and political subdivisions		8,875		(292	)		3,442		(263	)		12,317		(555	)
Other residential collateralized mortgage obligations		-		-			-		-			-		-
Trust preferred securities		-		-			4,309		(1,768	)		4,309		(1,768	)
	$	34,372	$	(1,444	)	$	25,749	$	(4,021	)	$	60,121	$	(5,465	)

December 31, 2013
	Less than 12 months					12 Months or More					Total
Available for Sale	Fair value		Unrealized Losses			Fair value		Unrealized Losses			Fair value		Unrealized Losses
Obligations of states and political subdivisions	$	409	$	(78	)	$	1,584	$	(231	)	$	1,993	$	(309	)

	Less than 12 months					12 Months or More					Total
Held to Maturity	Fair value		Unrecognized Losses			Fair value		Unrecognized Losses			Fair value		Unrecognized Losses
Residential government-sponsored mortgage-backed securities	$	12,644	$	(294	)	$	-	$	-		$	12,644	$	(294	)
Residential government-sponsored collateralized mortgage obligations		2,984		(349	)		-		-			2,984		(349	)
Government-sponsored agency securities		8,733		(1,250	)		17,244		(2,744	)		25,977		(3,994	)
Obligations of states and political subdivisions		10,327		(588	)		3,064		(399	)		13,391		(987	)
Other residential collateralized mortgage obligations		647		(12	)		-		-			647		(12	)
Trust preferred securities		-		-			4,070		(2,228	)		4,070		(2,228	)
	$	35,335	$	(2,493	)	$	24,378	$	(5,371	)	$	59,713	$	(7,864	)

As of March 31, 2014, we owned pooled trust preferred securities as follows:

															Previously
												% of Current			Recognized
												Defaults and			Cumulative
		Ratings								Estimated		Deferrals to			Other
	Tranche	When Purchased		Current Ratings						Fair		Total			Comprehensive
Security	Level	Moody’s	Fitch	Moody’s	Fitch	Par Value		Book Value		Value		Collateral			Loss (1)
						(in thousands)
ALESCO VII  A1B	Senior	Aaa	AAA	A3	BBB	$	6,340	$	5,750	$	4,107		16	%	$	274
MMCF III B	Senior Sub	A3	A-	Ba1	CC		333		327		202		34	%		6
							6,673		6,077		4,309				$	280
															Cumulative Other		Cumulative
															Comprehensive		OTTI Related to
Other Than Temporarily Impaired:															Loss (2)		Credit Loss (2)
TPREF FUNDING II	Mezzanine	A1	A-	Caa3	C		1,500		520		520		41	%		605	$	375
TRAP 2007-XII C1	Mezzanine	A3	A	C	C		2,155		57		372		30	%		805		1,293
TRAP 2007-XIII D	Mezzanine	NR	A-	NR	C		2,039		-		168		25	%		7		2,032
MMC FUNDING XVIII	Mezzanine	A3	A-	Ca	C		1,092		27		271		27	%		374		691
ALESCO V C1	Mezzanine	A2	A	C	C		2,149		475		582		15	%		1,013		661
ALESCO XV C1	Mezzanine	A3	A-	C	C		3,245		30		79		33	%		656		2,559
ALESCO XVI  C	Mezzanine	A3	A-	C	C		2,158		120		478		14	%		858		1,180
							14,338		1,229		2,470				$	4,318	$	8,791
Total						$	21,011	$	7,306	$	6,779

(1)  Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion

(2)  Pre-tax

Each of these securities has been evaluated for other than temporary impairment.  In performing a detailed cash flow analysis of each security, Sonabank works with independent third parties to estimate expected cash flows and assist with the evaluation of other than temporary impairment. The cash flow analyses performed included the following assumptions:

● .5% of the remaining performing collateral will default or defer per annum.

● Recoveries of 16% with a two year lag on all defaults and deferrals.

● No prepayments for 10 years and then 1% per annum for the remaining life of the security.

● Additionally banks with assets over $15 billion will no longer be allowed to count down streamed trust preferred proceeds as Tier 1 capital (although it will still be counted as Tier 2 capital). That will incent the large banks to prepay their trust preferred securities if they can or if it is economically desirable. As a consequence, we have projected in all of our pools that 10% of the collateral issued by banks with assets over $15 billion will prepay in the first year of the forecast, and 15% in the second year.

● Our securities have been modeled using the above assumptions by independent third parties using the forward LIBOR curve to discount projected cash flows to present values.

We recognized OTTI charges of $16 thousand during the first quarter of 2014 compared to OTTI charges related to credit on the trust preferred securities totaling $3 thousand during the first quarter of 2013.

The following table presents a roll forward of the credit losses on our securities held to maturity recognized in earnings for the three months ended March 31, 2014 and 2013 (in thousands):

	2014			2013
Amount of cumulative other-than-temporary impairment related to credit loss prior to January 1	$	8,911		$	8,964
Amounts related to credit loss for which an other-than-temporary impairment was not previously recognized		-			-
Amounts related to credit loss for which an other-than-temporary impairment was previously recognized		16			3
Reductions due to realized losses		(2	)		(25	)
Amount of cumulative other-than-temporary impairment related to credit loss as of March 31	$	8,925		$	8,942

Changes in accumulated other comprehensive income by component for the three months ended March 31, 2014 and 2013 are shown in the table below.  All amounts are net of tax (in thousands).

	Unrealized Holding
	Gains (Losses) on
For the three months ended March 31, 2014	Available for Sale			Held to Maturity
	Securities			Securities			Total
Beginning balance	$	(203	)	$	(2,987	)	$	(3,190	)
Other comprehensive income/(loss) before reclassifications		94			1			95
Amounts reclassified from accumulated other comprehensive income/(loss)		-			-			-
Net current-period other comprehensive income/(loss)		94			1			95
Ending balance	$	(109	)	$	(2,986	)	$	(3,095	)
	Unrealized Holding
	Gains (Losses) on
For the three months ended March 31, 2013	Available for Sale			Held to Maturity
	Securities			Securities			Total
Beginning balance	$	44		$	(3,025	)	$	(2,981	)
Other comprehensive income/(loss) before reclassifications		(1	)		60			59
Amounts reclassified from accumulated other comprehensive income/(loss)		(93	)		(2	)		(95	)
Net current-period other comprehensive income/(loss)		(94	)		58			(36	)
Ending balance	$	(50	)	$	(2,967	)	$	(3,017	)

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ACQUISTIONS (Detail Textuals) (USD $) In Millions, unless otherwise specified	0 Months Ended
	Jan. 08, 2014
Southern National Bancorp Of Virginia
Business Acquisition [Line Items]
Percentage of common stock hold by entity	44.00%
Southern Trust Mortgage LLC (STM)
Business Acquisition [Line Items]
Percentage of common stock hold by entity	51.10%
EVB
Business Acquisition [Line Items]
Percentage of common stock hold by entity	4.90%
Middleburg Bank | Southern National Bancorp Of Virginia
Business Acquisition [Line Items]
Percentage of common stock purchase by entity	44.00%
Prince George's Federal Savings Bank (FSB)
Business Acquisition [Line Items]
Value of assets on merger agreement	$ 104
Merger agreement value of consideration transferred cash and stock	11.5
Prince George's Federal Savings Bank (FSB) | Maryland
Business Acquisition [Line Items]
Number of branches	4
Prince George's Federal Savings Bank (FSB) | Dunkirk, Brandywine And Huntingtown
Business Acquisition [Line Items]
Number of branches	3
Prince George's Federal Savings Bank (FSB) | Southern National Bancorp Of Virginia
Business Acquisition [Line Items]
Combined value of assets after merger agreement	805
Combined value of deposit after merger agreement	700
Combined value of loans after merger agreement	$ 600

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SECURITIES - Contractual maturity (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014
Schedule Of Available For Sale and Held To Maturity Securities [Line Items]
Held to maturity, due in five to ten years, amortized cost	$ 6,535
Held to maturity, due in five to ten years, fair value	6,363
Held to maturity, due after ten years, amortized cost	50,103
Held to maturity, due after ten years, fair value	46,352
Held to maturity, amortized cost	86,106
Held to maturity, fair value	82,631
Available for sale, due in five to ten years, amortized cost
Available for sale, due in five to ten years, fair value
Available for sale, due after ten years, amortized cost	2,300
Available for sale, due after ten years, fair value	2,135
Available for sale, amortized cost	2,300
Available for sale, fair value	2,135
Residential government-sponsored mortgage-backed securities
Schedule Of Available For Sale and Held To Maturity Securities [Line Items]
Held to maturity, amortized cost	24,722
Held to maturity, fair value	25,230
Available for sale, amortized cost
Available for sale, fair value
Residential government-sponsored collateralized mortgage obligations
Schedule Of Available For Sale and Held To Maturity Securities [Line Items]
Held to maturity, amortized cost	4,101
Held to maturity, fair value	4,041
Available for sale, amortized cost
Available for sale, fair value
Other residential collateralized mortgage obligations
Schedule Of Available For Sale and Held To Maturity Securities [Line Items]
Held to maturity, amortized cost	645
Held to maturity, fair value	645
Available for sale, amortized cost
Available for sale, fair value

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LOANS - Aging of recorded investment (Details 3) (Total Loans, USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	$ 2,354		$ 3,112
Recorded Investment, 60 - 89 Days Past Due	28		1,352
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	2,382		4,464
Recorded investment, nonaccrual loans	7,184		9,436
Recorded Investment, Loans Not Past Due	530,893		533,606
Gross loans	540,459		547,506
Commercial real estate - owner occupied
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	850		708
Recorded Investment, 60 - 89 Days Past Due			283
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	850		991
Recorded investment, nonaccrual loans	212
Recorded Investment, Loans Not Past Due	105,611		106,837
Gross loans	106,673		107,828
Commercial real estate - non-owner occupied
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	146	[1]	862	[1]
Recorded Investment, 60 - 89 Days Past Due		[1]		[1]
Recorded Investment, 90 Days or More		[1]		[1]
Recorded Investment, Total Past Due	146	[1]	862	[1]
Recorded investment, nonaccrual loans	1,991	[1]	245	[1]
Recorded Investment, Loans Not Past Due	175,092	[1]	177,419	[1]
Gross loans	177,229	[1]	178,526	[1]
Construction and land development
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due			8
Recorded Investment, 60 - 89 Days Past Due			3
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due			11
Recorded investment, nonaccrual loans			2,107
Recorded Investment, Loans Not Past Due	39,872		36,951
Gross loans	39,872		39,069
Commercial loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	636		522
Recorded Investment, 60 - 89 Days Past Due			968
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	636		1,490
Recorded investment, nonaccrual loans	3,094		3,070
Recorded Investment, Loans Not Past Due	101,426		100,821
Gross loans	105,156		105,381
Residential 1-4 family
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	702	[2]	998	[2]
Recorded Investment, 60 - 89 Days Past Due	28	[2]	98	[2]
Recorded Investment, 90 Days or More		[2]		[2]
Recorded Investment, Total Past Due	730	[2]	1,096	[2]
Recorded investment, nonaccrual loans	1,887	[2]	4,014	[2]
Recorded Investment, Loans Not Past Due	107,586	[2]	110,203	[2]
Gross loans	110,203	[2]	115,313	[2]
Other consumer loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	20		14
Recorded Investment, 60 - 89 Days Past Due
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	20		14
Recorded investment, nonaccrual loans
Recorded Investment, Loans Not Past Due	1,306		1,375
Gross loans	1,326		1,389
Covered loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	570		544
Recorded Investment, 60 - 89 Days Past Due
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	570		544
Recorded investment, nonaccrual loans	3,357		1,622
Recorded Investment, Loans Not Past Due	46,404		49,530
Gross loans	50,331	[3]	51,696	[3]
Covered loans | Commercial real estate - owner occupied
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	142
Recorded Investment, 60 - 89 Days Past Due
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	142
Recorded investment, nonaccrual loans
Recorded Investment, Loans Not Past Due	1,410		1,603
Gross loans	1,552		1,603
Covered loans | Commercial real estate - non-owner occupied
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	146	[1]	503	[1]
Recorded Investment, 60 - 89 Days Past Due		[1]		[1]
Recorded Investment, 90 Days or More		[1]		[1]
Recorded Investment, Total Past Due	146	[1]	503	[1]
Recorded investment, nonaccrual loans	1,991	[1]	245	[1]
Recorded Investment, Loans Not Past Due	4,212	[1]	5,766	[1]
Gross loans	6,349	[1]	6,514	[1]
Covered loans | Construction and land development
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due
Recorded Investment, 60 - 89 Days Past Due
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due
Recorded investment, nonaccrual loans
Recorded Investment, Loans Not Past Due			1
Gross loans			1
Covered loans | Commercial loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due
Recorded Investment, 60 - 89 Days Past Due
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due
Recorded investment, nonaccrual loans
Recorded Investment, Loans Not Past Due	898		1,097
Gross loans	898		1,097
Covered loans | Residential 1-4 family
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	282	[2]	41	[2]
Recorded Investment, 60 - 89 Days Past Due		[2]		[2]
Recorded Investment, 90 Days or More		[2]		[2]
Recorded Investment, Total Past Due	282	[2]	41	[2]
Recorded investment, nonaccrual loans	1,366	[2]	1,377	[2]
Recorded Investment, Loans Not Past Due	39,807	[2]	40,982	[2]
Gross loans	41,455	[2]	42,400	[2]
Covered loans | Other consumer loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due
Recorded Investment, 60 - 89 Days Past Due
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due
Recorded investment, nonaccrual loans
Recorded Investment, Loans Not Past Due	77		81
Gross loans	77		81
Non-covered Loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	1,784		2,568
Recorded Investment, 60 - 89 Days Past Due	28		1,352
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	1,812		3,920
Recorded investment, nonaccrual loans	3,827		7,814
Recorded Investment, Loans Not Past Due	484,489		484,076
Gross loans	490,128		495,810
Non-covered Loans | Commercial real estate - owner occupied
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	708		708
Recorded Investment, 60 - 89 Days Past Due			283
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	708		991
Recorded investment, nonaccrual loans	212
Recorded Investment, Loans Not Past Due	104,201		105,234
Gross loans	105,121		106,225
Non-covered Loans | Commercial real estate - non-owner occupied
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due		[1]	359	[1]
Recorded Investment, 60 - 89 Days Past Due		[1]		[1]
Recorded Investment, 90 Days or More		[1]		[1]
Recorded Investment, Total Past Due		[1]	359	[1]
Recorded investment, nonaccrual loans		[1]		[1]
Recorded Investment, Loans Not Past Due	170,880	[1]	171,653	[1]
Gross loans	170,880	[1]	172,012	[1]
Non-covered Loans | Construction and land development
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due			8
Recorded Investment, 60 - 89 Days Past Due			3
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due			11
Recorded investment, nonaccrual loans			2,107
Recorded Investment, Loans Not Past Due	39,872		36,950
Gross loans	39,872		39,068
Non-covered Loans | Commercial loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	636		522
Recorded Investment, 60 - 89 Days Past Due			968
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	636		1,490
Recorded investment, nonaccrual loans	3,094		3,070
Recorded Investment, Loans Not Past Due	100,528		99,724
Gross loans	104,258		104,284
Non-covered Loans | Residential 1-4 family
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	420	[2]	957	[2]
Recorded Investment, 60 - 89 Days Past Due	28	[2]	98	[2]
Recorded Investment, 90 Days or More		[2]		[2]
Recorded Investment, Total Past Due	448	[2]	1,055	[2]
Recorded investment, nonaccrual loans	521	[2]	2,637	[2]
Recorded Investment, Loans Not Past Due	67,779	[2]	69,221	[2]
Gross loans	68,748	[2]	72,913	[2]
Non-covered Loans | Other consumer loans
Accounts Notes And Loans Receivable [Line Items]
Recorded Investment, 30 to 59 Days Past Due	20		14
Recorded Investment, 60 - 89 Days Past Due
Recorded Investment, 90 Days or More
Recorded Investment, Total Past Due	20		14
Recorded investment, nonaccrual loans
Recorded Investment, Loans Not Past Due	1,229		1,294
Gross loans	$ 1,249		$ 1,308

[1] Includes loans secured by farmland and multi-family residential loans.

[2] Includes home equity lines of credit.

[3] Covered Loans were acquired in the Greater Atlantic transaction and are covered under an FDIC loss-share agreement.

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Schedule of reconciliation of the denominators of the basic and diluted earnings per share

			Weighted
			Average
	Income		Shares		Per Share
	(Numerator)		(Denominator)		Amount
For the three months ended March 31, 2014
Basic EPS	$	1,642		11,591	$	0.14
Effect of dilutive stock options and warrants		-		66		-
Diluted EPS	$	1,642		11,657	$	0.14
For the three months ended March 31, 2013
Basic EPS	$	1,526		11,590	$	0.13
Effect of dilutive stock options and warrants		-		26		-
Diluted EPS	$	1,526		11,616	$	0.13