LOANS (Tables)

3 Months Ended

Mar. 31, 2013

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

	March 31,		December 31,		March 31,
	2013		2012		2012

Commercial real estate	$	246,207	$	244,966	$	203,676
Commercial, financial, and agricultural	82,530		80,646		93,018
One to four family residential real estate	89,629		87,948		81,953
Construction:
Consumer	7,587		7,465		5,115
Commerical	16,295		17,229		22,116
Consumer	11,803		10,923		8,524

Total loans	$	454,051	$	449,177	$	414,402

Schedule of the allowance for loan losses

An analysis of the allowance for loan losses for the three months ended March 31, 2013, the year ended December 31, 2012, and the three months ended March 31, 2012 is as follows (dollars in thousands):

	March 31,			December 31,			March 31,
	2013			2012			2012

Balance at beginning of period	$	5,218		$	5,251		$	5,251
Recoveries on loans previously charged off	24			278			32
Loans charged off	(580		)	(1,256		)	(396		)
Provision	375			945			495

Balance at end of period	$	5,037		$	5,218		$	5,382

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 March 31, 2013 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	$	3,267		$	692		$	125		$	980		$	—	$	—		$	154		$	5,218
Charge-offs	(435		)	(72		)	—			(7		)	—		(66		)	—			(580		)
Recoveries	12			3			1			5			—		3			—			24
Provision	120			224			(8		)	12			—		76			(49		)	375
Ending balance ALLR	$	2,964		$	847		$	118		$	990		$	—	$	13		$	105		$	5,037

*Loans:*
Ending balance	$	246,207		$	82,530		$	16,295		$	89,629		$	7,587	$	11,803		$	—		$	454,051
Ending balance ALLR	(2,964		)	(847		)	(118		)	(990		)	—		(13		)	(105		)	(5,037		)
Net loans	$	243,243		$	81,683		$	16,177		$	88,639		$	7,587	$	11,790		$	(105	)	$	449,014

*Ending balance ALLR:*
Individually evaluated	$	1,428		$	321		$	10		$	150		$	—	$	13		$	—		$	1,922
Collectively evaluated	1,536			526			108			840			—		—			105			3,115
Total	$	2,964		$	847		$	118		$	990		$	—	$	13		$	105		$	5,037

*Ending balance Loans:*
Individually evaluated	$	21,836		$	6,097		$	975		$	477		$	—	$	13		$	—		$	29,398
Collectively evaluated	224,371			76,433			15,320			89,152			7,587		11,790			—			424,653
Total	$	246,207		$	82,530		$	16,295		$	89,629		$	7,587	$	11,803		$	—		$	454,051

Impaired loans, by definition, are individually evaluated.

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
Unallocated assignment	—			—			—			—			—		—			—			—
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 and recorded balances in loans at March 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	(173		)	(20		)	—			(190		)	(5		)	(8		)	—			(396		)
Recoveries	8			18			—			1			—			5			—			32
Provision	127			49			23			158			5			3			130			495
Unallocated assignment	—			—			—			—			—			—			—			—
Ending balance ALLR	$	2,785		$	1,126		$	230		$	1,083		$	—		$	—		$	158		$	5,382

*Loans:*
Ending balance	$	203,676		$	93,018		$	22,116		$	81,953		$	5,115		$	8,524		$	—		$	414,402
Ending balance ALLR	(2,785		)	(1,126		)	(230		)	(1,083		)	—			—			(158		)	(5,382		)
Net loans	$	200,891		$	91,892		$	21,886		$	80,870		$	5,115		$	8,524		$	(158	)	$	409,020

*Ending balance ALLR:*
Individually evaluated	$	969		$	374		$	13		$	28		$	—		$	—		$	—		$	1,384
Collectively evaluated	1,816			752			217			1,055			—			—			158			3,998
Total	$	2,785		$	1,126		$	230		$	1,083		$	—		$	—		$	158		$	5,382

*Ending balance Loans:*
Individually evaluated	$	22,804		$	12,886		$	—		$	859		$	1,172		$	—		$	—		$	37,721
Collectively evaluated	180,872			80,132			22,116			81,094			3,943			8,524			—			376,681
Total	$	203,676		$	93,018		$	22,116		$	81,953		$	5,115		$	8,524		$	—		$	414,402

Schedule of breakdown of loans by risk category

Below is a breakdown of loans by risk category as of March 31, 2013 (dollars in thousands):

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Rating

Excellent

Good

Average

Acceptable

Sp. Mention

Substandard

Doubtful

Unassigned

Total

Commercial real estate

5,541

21,220

85,101

112,846

16,529

4,781

189

—

246,207

Commercial, financial and agricultural

5,004

4,613

23,156

43,719

4,080

1,958

—

82,530

Commercial construction

—

740

5,392

5,687

757

402

—

3,317

16,295

One to four family residential real estate

—

1,961

3,109

4,667

—

534

—

79,358

89,629

Consumer construction

—

7,587

Consumer

—

177

370

—

11,206

11,803

Total loans

10,545

28,711

116,808

167,289

21,366

7,675

189

101,468

454,051

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		7,465
Consumer	—		359		71		257		—		6		—		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 March 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	$	3,906	$	16,755	$	50,487	$	109,881	$	16,533	$	5,282	$	832	$	—	$	203,676
Commercial, financial and agricultural	4,691		8,697		19,205		44,845		12,289		3,291		—		—		93,018
Commercial construction	207		690		6,353		10,180		767		416		—		3,503		22,116
One to four family residential real estate	—		2,000		3,731		6,705		—		993		—		68,524		81,953
Consumer construction	—		—		—		—		—		—		—		5,115		5,115
Consumer	—		—		97		657		—		—		—		7,770		8,524

Total loans	$	8,804	$	28,142	$	79,873	$	172,268	$	29,589	$	9,982	$	832	$	84,912	$	414,402

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
*March 31, 2013*

*With no valuation reserve:*
Commercial real estate	$	738	$	—	$	846	$	—	$	—	$	12
Commercial, financial and agricultural	316		—		306		—		—		3
Commercial construction	—		—		482		—		—		3
One to four family residential real estate	112		—		155		—		—		2
Consumer construction	—		—		—		—		—		—
Consumer	—		—		—		—		—		—

*With a valuation reserve:*
Commercial real estate	$	2,225	$	—	$	2,269	$	1,112	$	—	$	30
Commercial, financial and agricultural	108		—		109		35		—		2
Commercial construction	—		—		—		—		—		—
One to four family residential real estate	334		—		315		129		—		6
Consumer construction	—		—		—		—		—		—
Consumer	—		—		—		—		—		—

*Total:*
Commercial real estate	$	2,963	$	—	$	3,115	$	1,112	$	—	$	42
Commercial, financial and agricultural	424		—		415		35		—		5
Commercial construction	—		—		482		—		—		3
One to four family residential real estate	446		—		470		129		—		8
Consumer construction	—		—		—		—		—		—
Consumer	—		—		—		—		—		—
Total	$	3,833	$	—	$	4,482	$	1,276	$	—	$	58

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

March 31, 2012

With no valuation reserve:
Commercial real estate	$	1,861	$	—	$	1,038	$	—	$	—	$	14
Commercial, financial and agricultural	1,397		—		13		—		—		—
Commercial construction	—		—		—		—		—		—
One to four family residential real estate	854		—		1,117		—		—		15
Consumer construction	15		—		19		—		—		—
Consumer	—		—		—		—		—		—

With a valuation reserve:
Commercial real estate	$	93	$	2,400	$	3,585	$	671	$	20	$	14
Commercial, financial and agricultural	229		—		1,358		229		—		19
Commercial construction	—		—		—		—		—		—
One to four family residential real estate	8		—		8		8		—		—
Consumer construction	—		—		—		—		—		—
Consumer	—		—		—		—		—		—

Total:
Commercial real estate	$	1,954	$	2,400	$	4,623	$	671	$	20	$	28
Commercial, financial and agricultural	1,626		—		1,371		229		—		19
Commercial construction	—		—		—		—		—		—
One to four family residential real estate	862		—		1,125		8		—		15
Consumer construction	15		—		19		—		—		—
Consumer	—		—		—		—		—		—
Total	$	4,457	$	2,400	$	7,138	$	908	$	20	$	62

Summary of past due loans

A summary of past due loans at March 31, 2013, December 31, 2012 and March 31, 2012 is as follows (dollars in thousands):

	March 31,						December 31,						March 31,
	2013						2012						2012
	30-89 days		90+ days				30-89 days		90+ days				30-89 days		90+ days
	Past Due		Past Due/				Past Due		Past Due/				Past Due		Past Due/
	(accruing)		Nonaccrual		Total		(accruing)		Nonaccrual		Total		(accruing)		Nonaccrual		Total

Commercial real estate	$	385	$	2,963	$	3,348	$	575	$	3,071	$	3,646	$	784	$	1,954	$	2,738
Commercial, financial and agricultural	186		424		610		71		436		507		20		1,626		1,646
Commercial construction	24		—		24		—		675		675		706		—		706
One to four family residential real estate	101		446		547		291		505		796		124		862		986
Consumer construction	—		—		—		—		—		—		—		15		15
Consumer	13		—		13		14		—		14		16		—		16

Total past due loans	$	709	$	3,833	$	4,542	$	951	$	4,687	$	5,638	$	1,650	$	4,457	$	6,107

Schedule of roll-forward of nonaccrual activity

A roll-forward of nonaccrual activity for the three months ended March 31, 2013 (dollars in thousands):

	For the Three Months Ended March 31, 2013
				Commercial,						One to four
	Commercial			Financial and			Commercial			family residential			Consumer
	Real Estate			Agricultural			Construction			real estate			Construction		Consumer		Total

NONACCRUAL

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

Principal payments	(117		)	(2		)	(100		)	(49		)	—		—		(268		)
Charge-offs	(329		)	(72		)	—			(7		)	—		—		(408		)
Advances	—			—			—			—			—		—		—
Class transfers	—			—			—			—			—		—		—
Transfers to OREO	—			—			(580		)	(69		)	—		—		(649		)
Transfers to accruing	—			—			—			—			—		—		—
Transfers from accruing	317			62			—			62			—		—		441
Other	21			—			5			4			—		—		30

Ending balance	$	2,963		$	424		$	—		$	446		$	—	$	—	$	3,833

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 for the three months ended March 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	(366		)	(31		)	—		(1,048		)	(5		)	—		(1,450		)
Charge-offs	(46		)	—			—		(187		)	—			—		(233		)
Advances	—			—			—		—			—			—		—
Class transfers	—			—			—		—			—			—		—
Transfers to OREO	(327		)	—			—		(33		)	—			—		(360		)
Transfers to accruing	—			—			—		—			—			—		—
Transfers from accruing	310			559			—		132			—			—		1,001
Other	21			(13		)	—		1			—			—		9

Ending balance	$	1,954		$	1,626		$	—	$	862		$	15		$	—	$	4,457

Summary of troubled debt restructurings

A summary of troubled debt restructurings for the periods indicated is as follows (dollars in thousands):

	Three Months Ended			Year Ended			Three Months Ended
	March 31,			December 31,			March 31,
	2013			2012			2012
	Number of	Recorded		Number of	Recorded		Number of	Recorded
	Modifications	Investment		Modifications	Investment		Modifications	Investment

Commercial real estate	—	$	—	3	$	4,614	1	$	2,400
Commercial, financial and agricultural	1	953		1	1,221		—	—
Commercial construction	—	—		3	860		—	—
One to four family residential real estate	—	—		1	102		—	—
Consumer construction	—	—		—	—		—	—
Consumer	—	—		—	—		—	—

Total troubled debt restructurings	1	$	953	8	$	6,797	1	$	2,400

Schedule of roll-forward of troubled debt restructurings

A roll-forward of troubled debt restructuring during the period ended March 31, 2013 (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	$	3,611		$	1,221	$	858	$	102		$	—	$	5,792

Principal payments	(23		)	—		—		(2		)	—		(25		)
Charge-offs	—			—		—		—			—		—
Advances	—			—		—		—			—		—
New restructured	—			953		—		—			—		953
Transferred out of TDR	—			—		—		—			—		—
Transfers to nonaccrual	—			—		—		—			—		—

Ending Balance	$	3,588		$	2,174	$	858	$	100		$	—	$	6,720

NONACCRUAL

Beginning balance	$	2,162		$	—	$	—	$	102		$	—	$	2,264

Principal payments	—			—		—		—					—
Charge-offs	—			—		—		—					—
Advances	—			—		—		—					—
New restructured	7			—		—		4					11
Transfers to foreclosed properties	—			—		—		—					—
Transfers from accruing	—			—		—		—					—

Ending Balance	$	2,169		$	—	$	—	$	106		$	—	$	2,275

TOTALS

Beginning balance	$	5,773		$	1,221	$	858	$	204		$	—	$	8,056

Principal payments	(23		)	—		—		(2		)	—		(25		)
Charge-offs	—			—		—		—			—		—
Advances	—			—		—		—			—		—
New restructured	7			953		—		4			—		964
Transfers out of TDRs	—			—		—		—			—		—
Tansfers to nonaccrual	—			—		—		—			—		—
Transfers to foreclosed properties	—			—		—		—			—		—
Transfers from accruing	—			—		—		—			—		—

Ending Balance	$	5,757		$	2,174	$	858	$	206		$	—	$	8,995

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 March 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	—			—		—		—		—		—
Charge-offs	—			—		—		—		—		—
Advances	—			—		—		—		—		—
New restructured	3,672			1,221		859		—		—		5,752
Transferred out of TDR	—			—		—		—		—		—
Transfers to nonaccrual	(2,400		)	—		—		—		—		(2,400		)

Ending Balance	$	3,672		$	1,221	$	859	$	103	$	—	$	5,855

NONACCRUAL

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

Principal payments	—			—		—		—		—		—
Charge-offs	—			—		—		—		—		—
Advances	—			—		—		—		—		—
New restructured	835			1,072		—		293		—		2,200
Transfers to foreclosed properties	—			—		—		—		—		—
Transfers from accruing	2,400			—		—		—		—		2,400

Ending Balance	$	3,235		$	1,072	$	—	$	293	$	—	$	4,600

TOTALS

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

Principal payments	—			—		—		—		—		—
Charge-offs	—			—		—		—		—		—
Advances	—			—		—		—		—		—
New restructured	4,507			2,293		859		293		—		7,952
Transfers out of TDRs	—			—		—		—		—		—
Tansfers to nonaccrual	(2,400		)	—		—		—		—		(2,400		)
Transfers to foreclosed properties	—			—		—		—		—		—
Transfers from accruing	2,400			—		—		—		—		2,400

Ending Balance	$	6,907		$	2,293	$	859	$	396	$	—	$	10,455

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):

	March 31,			December 31,			March 31,
	2013			2012			2012

Loans outstanding, beginning of period	$	11,297		$	8,827		$	8,827
New loans	25			3,911			770
Net activity on revolving lines of credit	(24		)	233			(31		)
Repayment	(405		)	(1,674		)	(200		)

Loans outstanding, end of period	$	10,893		$	11,297		$	9,366