LOANS (Tables)

12 Months Ended

Dec. 31, 2012

The composition of loans at December 31 is as follows (dollars in thousands):

	2012		2011

Commercial real estate	$	244,966	$	199,201
Commercial, financial, and agricultural	80,646		92,269
One to four family residential real estate	87,948		77,332
Construction :
Consumer	7,465		5,774
Commerical	17,229		19,745
Consumer	10,923		6,925

Total loans	$	449,177	$	401,246

Schedule of the allowance for loan losses

An analysis of the allowance for loan losses for the years ended December 31 is as follows (dollars in thousands):

	2012			2011			2010

Balance, January 1	$	5,251		$	6,613		$	5,225
Recoveries on loans previously charged off	278			138			374
Loans charged off	(1,256		)	(3,800		)	(5,486		)
Provision	945			2,300			6,500

Balance, December 31	$	5,218		$	5,251		$	6,613

Schedule of breakdown of the allowance for loan losses and recorded balances in loans

A breakdown of the allowance for loan losses and recorded balances in loans at December 31, 2012 is as follows (dollars in thousands):

				Commercial,						One to four
	Commercial			financial and			Commercial			family residential			Consumer
	real estate			agricultural			construction			real estate			construction		Consumer			Unallocated			Total
*Allowance for loan loss reserve:*
Beginning balance ALLR	$	2,823		$	1,079		$	207		$	1,114		$	—	$	—		$	28		$	5,251
Charge-offs	(729		)	(40		)	(6		)	(399		)	—		(82		)	—			(1,256		)
Recoveries	52			201			—			7			—		18			—			278
Provision	1,121			(548		)	(76		)	258			—		64			126			945
Ending balance ALLR	$	3,267		$	692		$	125		$	980		$	—	$	—		$	154		$	5,218

*Loans:*
Ending balance	$	244,966		$	80,646		$	17,229		$	87,948		$	7,465	$	10,923		$	—		$	449,177
Ending balance ALLR	(3,267		)	(692		)	(125		)	(980		)	—		—			(154		)	(5,218		)
Net loans	$	241,699		$	79,954		$	17,104		$	86,968		$	7,465	$	10,923		$	(154	)	$	443,959

*Ending balance ALLR:*
Individually evaluated	$	1,662		$	155		$	10		$	112		$	—	$	—		$	—		$	1,939
Collectively evaluated	1,605			537			115			868			—		—			154			3,279
Total	$	3,267		$	692		$	125		$	980		$	—	$	—		$	154		$	5,218

*Ending balance Loans:*
Individually evaluated	$	22,910		$	6,070		$	858		$	796		$	—	$	—		$	—		$	30,634
Collectively evaluated	222,056			74,576			16,371			87,152			7,465		10,923			—			418,543
Total	$	244,966		$	80,646		$	17,229		$	87,948		$	7,465	$	10,923		$	—		$	449,177

A breakdown of the allowance for loan losses, the activity for the period, and recorded balances in loans for the year ended December 31, 2011 is as follows (dollars in thousands):

				Commercial,						One to four
	Commercial			financial and			Commercial			family residential			Consumer
	real estate			agricultural			construction			real estate			construction		Consumer			Unallocated			Total
*Allowance for loan loss reserve:*
Beginning balance ALLR	$	3,460		$	1,018		$	389		$	1,622		$	—	$	—		$	124		$	6,613
Charge-offs	(2,267		)	(579		)	(412		)	(490		)	—		(52		)	—			(3,800		)
Recoveries	32			21			75			1			—		9			—			138
Provision	1,598			619			155			(19		)	—		43			(96		)	2,300
Ending balance ALLR	$	2,823		$	1,079		$	207		$	1,114		$	—	$	—		$	28		$	5,251

*Loans:*
Ending balance	$	199,201		$	92,269		$	19,745		$	77,332		$	5,774	$	6,925		$	—		$	401,246
Ending balance ALLR	(2,823		)	(1,079		)	(207		)	(1,114		)	—		—			(28		)	(5,251		)
Net loans	$	196,378		$	91,190		$	19,538		$	76,218		$	5,774	$	6,925		$	(28	)	$	395,995

*Ending balance ALLR:*
Individually evaluated	$	926		$	160		$	—		$	114		$	—	$	—		$	—		$	1,200
Collectively evaluated	1,897			919			207			1,000			—		—			28			4,051
Total	$	2,823		$	1,079		$	207		$	1,114		$	—	$	—		$	28		$	5,251

*Ending balance Loans:*
Individually evaluated	$	13,628		$	1,707		$	—		$	1,930		$	—	$	—		$	—		$	17,265
Collectively evaluated	185,573			90,562			19,745			75,402			5,774		6,925			—			383,981
Total	$	199,201		$	92,269		$	19,745		$	77,332		$	5,774	$	6,925		$	—		$	401,246

A breakdown of the allowance for loan losses, the activity for the period, and recorded balances in loans for the year ended December 31, 2010 is as follows (dollars in thousands):

				Commercial,						One to four
	Commercial			financial and			Commercial			family residential			Consumer
	real estate			agricultural			construction			real estate			construction		Consumer			Unallocated			Total
*Allowance for loan loss reserve:*
Beginning balance ALLR	$	3,284		$	1,135		$	386		$	23		$	—	$	13		$	384		$	5,225
Charge-offs	(2,426		)	(1,804		)	(720		)	(416		)	—		(9		)	(111		)	(5,486		)
Recoveries	18			260			67			—			—		15			14			374
Provision	2,584			1,427			656			2,015			—		(19		)	(163		)	6,500
Ending balance ALLR	$	3,460		$	1,018		$	389		$	1,622		$	—	$	—		$	124		$	6,613

*Loans:*
Ending balance	$	194,859		$	68,858		$	33,330		$	75,074		$	5,682	$	5,283		$	—		$	383,086
Ending balance ALLR	(3,460		)	(1,018		)	(389		)	(1,622		)	—		—			(124		)	(6,613		)
Net loans	$	191,399		$	67,840		$	32,941		$	73,452		$	5,682	$	5,283		$	(124	)	$	376,473

*Ending balance ALLR:*
Individually evaluated	$	1,601		$	330		$	39		$	696		$	—	$	—		$	—		$	2,666
Collectively evaluated	1,859			688			350			926			—		—			124			3,947
Total	$	3,460		$	1,018		$	389		$	1,622		$	—	$	—		$	124		$	6,613

*Ending balance Loans:*
Individually evaluated	$	18,610		$	2,696		$	2,437		$	5,238		$	—	$	—		$	—		$	28,981
Collectively evaluated	176,249			66,162			30,893			69,836			5,682		5,283			—			354,105
Total	$	194,859		$	68,858		$	33,330		$	75,074		$	5,682	$	5,283		$	—		$	383,086

Schedule of breakdown of loans by risk category

Below is a breakdown of loans by risk category as of December 31, 2012 (dollars in thousands):

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Rating

Excellent

Good

Average

Acceptable

Sp. Mention

Substandard

Doubtful

Unassigned

Total

Commercial real estate

4,807

20,491

84,164

113,379

16,754

5,189

182

—

244,966

Commercial, financial and agricultural

5,026

3,936

23,821

41,785

4,296

1,782

—

80,646

Commercial construction

—

1,038

5,103

5,784

759

1,077

—

3,468

17,229

One-to-four family residential real estate

—

1,969

3,635

4,791

—

646

—

76,907

87,948

Consumer construction

—

7,465

Consumer

—

359

257

—

10,230

10,923

Total loans

9,833

27,793

116,794

165,996

21,809

8,700

182

98,070

449,177

Below is a breakdown of loans by risk category as of December 31, 2011 (dollars in thousands)

	(1)		(2)		(3)		(4)		(5)		(6)		(7)		Rating
	Excellent		Good		Average		Acceptable		Sp. Mention		Substandard		Doubtful		Unassigned		Total

Commercial real estate	$	3,083	$	16,946	$	47,154	$	118,259	$	5,198	$	7,642	$	919	$	—	$	199,201
Commercial, financial and agricultural	4,416		7,875		17,738		60,498		201		1,541		—		—		92,269
Commercial construction	209		552		4,542		10,415		313		20		—		3,694		19,745
One-to-four family residential real estate	—		—		3,359		5,910		2,023		—		—		66,040		77,332
Consumer construction	—		—		—		—		—		—		—		5,774		5,774
Consumer	—		—		105		599		—		—		—		6,221		6,925

Total loans	$	7,708	$	25,373	$	72,898	$	195,681	$	7,735	$	9,203	$	919	$	81,729	$	401,246

Summary of impaired loans and their effect on interest income

The following is a summary of impaired loans and their effect on interest income (dollars in thousands):

									Interest Income		Interest Income
	Nonaccrual		Accrual		Average		Related		Recognized		on
	Basis		Basis		Investment		Valuation Reserve		During Impairment		Accrual Basis
*December 31, 2012*

*With no valuation reserve:*
Commercial real estate	$	132	$	—	$	1,550	$	—	$	—	$	37
Commercial, financial and agricultural	—		—		1,063		—		—		19
Commercial construction	675		—		675		—		—		15
One to four family residential real estate	230		—		1,074		—		—		41
Consumer construction	—		—		16		—		—		1
Consumer	—		—		3		—		—		—

*With a valuation reserve:*
Commercial real estate	$	2,939	$	—	$	3,173	$	1,315	$	54	$	177
Commercial, financial and agricultural	436		—		504		109		—		17
Commercial construction	—		—		—		—		—		—
One to four family residential real estate	275		—		281		95		—		6
Consumer construction	—		—		—		—		—		—
Consumer	—		—		—		—		—		—

*Total:*
Commercial real estate	$	3,071	$	—	$	4,723	$	1,315	$	54	$	214
Commercial, financial and agricultural	436		—		1,567		109		—		36
Commercial construction	675		—		675		—		—		15
One to four family residential real estate	505		—		1,355		95		—		47
Consumer construction	—		—		16		—		—		1
Consumer	—		—		3		—		—		—
Total	$	4,687	$	—	$	8,339	$	1,519	$	54	$	313

December 31, 2011

With no valuation reserve:
Commercial real estate	$	1,313	$	—	$	2,519	$	—	$	66	$	116
Commercial, financial and agricultural	16		—		542		—		29		35
Commercial construction	—		—		176		—		—		11
One to four family residential real estate	608		—		1,727		—		—		99
Consumer construction	—		—		4		—		—		—
Consumer	—		—		2		—		—		—

With a valuation reserve:
Commercial real estate	$	1,049	$	2,400	$	807	$	700	$	20	$	31
Commercial, financial and agricultural	1,095		—		282		173		—		14
Commercial construction	—		—		—		—		—		—
One to four family residential real estate	1,389		103		1,121		150		3		56
Consumer construction	20		—		9		4		—		1
Consumer	—		—		—		—		—		—

Total:
Commercial real estate	$	2,362	$	2,400	$	3,326	$	700	$	86	$	147
Commercial, financial and agricultural	1,111		—		824		173		29		49
Commercial construction	—		—		176		—		—		11
One to four family residential real estate	1,997		103		2,848		150		3		155
Consumer construction	20		—		13		4		—		1
Consumer	—		—		2		—		—		—
Total	$	5,490	$	2,503	$	7,189	$	1,027	$	118	$	363

Summary of past due loans

A summary of past due loans at December 31, is as follows (dollars in thousands):

	2012						2011
	30-89 days		90+ days				30-89 days		90+ days
	Past Due		Past Due/				Past Due		Past Due/
	(accruing)		Nonaccrual		Total		(accruing)		Nonaccrual		Total

Commercial real estate	$	575	$	3,071	$	3,646	$	15	$	2,362	$	2,377
Commercial, financial and agricultural	71		436		507		137		1,111		1,248
Commercial construction	—		675		675		—		—		—
One to four family residential real estate	291		505		796		188		1,997		2,185
Consumer construction	—		—		—		—		20		20
Consumer	14		—		14		14		—		14

Total past due loans	$	951	$	4,687	$	5,638	$	354	$	5,490	$	5,844

Schedule of roll-forward of nonaccrual activity

A roll-forward of nonaccrual activity during the year ended December 31, 2012 (dollars in thousands):

				Commercial,					One to four
	Commercial			Financial and			Commercial		family residential			Consumer
	Real Estate			Agricultural			Construction		real estate			Construction			Consumer			Total

NONACCRUAL

Beginning balance	$	2,362		$	1,111		$	—	$	1,997		$	20		$	—		$	5,490

Principal payments	(1,569		)	(1,385		)	—		(1,068		)	—			—			(4,022		)
Charge-offs	(463		)	—			—		(387		)	(5		)	(3		)	(858		)
Advances	—			—			—		—			—			—			—
Class transfers	—			—			—		—			—			—			—
Transfers to OREO	(675		)	—			—		(662		)	(15		)	—			(1,352		)
Transfers to accruing	—			—			—		—			—			—			—
Transfers from accruing	3,377			716			675		617			—			3			5,388
Other	39			(6		)	—		8			—						41

Ending balance	$	3,071		$	436		$	675	$	505		$	—		$	—		$	4,687

A roll-forward of nonaccrual activity during the year ended December 31, 2011 (dollars in thousands):

				Commercial,						One to four
	Commercial			Financial and			Commercial			family residential			Consumer
	Real Estate			Agricultural			Construction			real estate			Construction			Consumer			Total

NONACCRUAL

Beginning balance	$	3,522		$	760		$	458		$	1,129		$	52		$	—		$	5,921

Principal payments	(1,458		)	(767		)	(14		)	(47		)	—			—			(2,286		)
Charge-offs	(1,950		)	(557		)	(62		)	(601		)	—			(27		)	(3,197		)
Advances	—			—			—			—			—			—			—
Class transfers	—			—			—			—			—			—			—
Transfers to OREO	(1,203		)	(262		)	(382		)	(1,948		)	(53		)	—			(3,848		)
Transfers to accruing	(892		)	—			—			—			—			—			(892		)
Transfers from accruing	4,301			1,938			—			3,273			20			27			9,559
Other	42			(1		)	—			191			1			—			233

Ending balance	$	2,362		$	1,111		$	—		$	1,997		$	20		$	—		$	5,490

Summary of troubled debt restructurings

A summary of troubled debt restructurings that occurred during the years ended December 31 is as follows (dollars in thousands):

	2012			2011
	Number of	Recorded		Number of	Recorded
	Modifications	Investment		Modifications	Investment

Commercial real estate	3	$	4,614	1	$	2,400
Commercial, financial and agricultural	1	1,221		—	—
Commercial construction	3	860		—	—
One to four family residential real estate	1	102		—	—
Consumer construction	—	—		—	—
Consumer	—	—		—	—

Total troubled debt restructurings	8	$	6,797	1	$	2,400

Schedule of roll-forward of troubled debt restructurings

A roll-forward of troubled debt restructuring during the year ended December 31, 2012 (dollars in thousands):

				Commercial,					One to four			Consumer and
	Commercial			Financial and		Commercial			family residential			Consumer
	Real Estate			Agricultural		Construction			real estate			Construction		Total

ACCRUING

Beginning balance	$	2,400		$	—	$	—		$	103		$	—	$	2,503

Principal payments	(84		)	—		(2		)	(1		)	—		(87		)
Charge-offs	—			—		—			—			—		—
Advances	—			—		—			—			—		—
New restructured	3,695			1,221		860			—			—		5,776
Transferred out of TDR	—			—		—			—			—		—
Transfers to nonaccrual	(2,400		)	—		—			—			—		(2,400		)

Ending Balance	$	3,611		$	1,221	$	858		$	102		$	—	$	5,792

NONACCRUAL

Beginning balance	$	—		$	—	$	—		$	—		$	—	$	—

Principal payments	(432		)	—		—			—			—		(432		)
Charge-offs	(772		)	—		—			—			—		(772		)
Advances	47			—		—			—			—		47
New restructured	919			—		—			102			—		1,021
Transfers to foreclosed properties	—			—		—			—			—		—
Transfers from accruing	2,400			—		—			—			—		2,400

Ending Balance	$	2,162		$	—	$	—		$	102		$	—	$	2,264

TOTALS

Beginning balance	$	2,400		$	—	$	—		$	103		$	—	$	2,503

Principal payments	(516		)	—		(2		)	(1		)	—		(519		)
Charge-offs	(772		)	—		—			—			—		(772		)
Advances	47			—		—			—			—		47
New restructured	4,614			1,221		860			102			—		6,797
Transfers out of TDRs	—			—		—			—			—		—
Tansfers to nonaccrual	(2,400		)	—		—			—			—		(2,400		)
Transfers to foreclosed properties	—			—		—			—			—		—
Transfers from accruing	2,400			—		—			—			—		2,400

Ending Balance	$	5,773		$	1,221	$	858		$	204		$	—	$	8,056

A roll-forward of troubled debt restructuring during the year ended December 31, 2011 (dollars in thousands):

					Commercial,				One to four			Consumer and
	Commercial				Financial and		Commercial		family residential			Consumer
	Real Estate				Agricultural		Construction		real estate			Construction		Total

ACCRUING

Beginning balance	$	4,537			$	—	$	—	$	105		$	—	$	4,642

Principal payments	—				—		—		(2		)	—		(2		)
Charge-offs	—				—		—		—			—		—
Advances	—				—		—		—			—		—
New restructured	2,400				—		—		—			—		2,400
Transferred out of TDRs	(582			)	—		—		—			—		(582		)
Transfers to nonaccrual	(3,955			)	—		—		—			—		(3,955		)

Ending Balance	$		2,400		$	—	$	—	$	103		$	—	$	2,503

NONACCRUAL

Beginning balance	$		—		$	—	$	—	$	—		$	—	$	—

Principal payments	—				—		—		—			—		—
Charge-offs	—				—		—		—			—		—
Advances	—				—		—		—			—		—
New restructured	—				—		—		—			—		—
Transfers to foreclosed properties	—				—		—		—			—		—
Transfers from accruing	—				—		—		—			—		—

Ending Balance	$		—		$	—	$	—	$	—		$	—	$	—

TOTALS

Beginning balance	$		4,537		$	—	$	—	$	105		$	—	$	4,642

Principal payments	—				—		—		(2		)	—		(2		)
Charge-offs	—				—		—		—			—		—
Advances	—				—		—		—			—		—
New restructured	2,400				—		—		—			—		2,400
Transfers out of TDRs	(582			)	—		—		—			—		(582		)
Transfers to nonaccrual	(3,955			)	—		—		—			—		(3,955		)
Transfers to foreclosed properties	—				—		—		—			—		—
Transfers from accruing	—				—		—		—			—		—

Ending Balance	$		2,400		$	—	$	—	$	103		$	—	$	2,503

Schedule of activity in insider loans granted to the entity's executive officers and directors, including their families and firms

Activity in such loans is summarized below (dollars in thousands):

	2012			2011

Loans outstanding, January 1	$	8,827		$	9,532
New loans	3,911			933
Net activity on revolving lines of credit	233			69
Repayment	(1,674		)	(1,707		)

Loans outstanding, December 31	$	11,297		$	8,827