Allowance for Loan Losses, Nonperforming Assets and Impaired Loans (Tables)

12 Months Ended

Dec. 31, 2012

Allowance for Loan Losses, Nonperforming Assets and Impaired Loans [Abstract]

Financing receivables and activity in the allowance for credit losses account

An analysis of the allowance for loan losses follows:

	Years ended December 31,
	2012			2011			2010
Balance at beginning of year	$	8,068		$	7,664		$	6,926
Loans charged off		(2,953	)		(2,628	)		(2,810	)
Recoveries of loans previously charged off		100			83			139
Provision for loan losses		3,134			2,949			3,409
Balance at end of year	$	8,349		$	8,068		$	7,664

A detailed analysis showing the allowance roll-forward by portfolio segment and related loan balance by segment follows:

	Activity in the Allowance for Loan Losses by Segment for the year ended December 31, 2012
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate			Commercial Non Real Estate			Public Sector and IDA			Consumer Non Real Estate			Unallocated			Total
Balance, December 31, 2011	$	1,079		$	1,245		$	3,515		$	1,473		$	232		$	403		$	121		$	8,068
Charge-offs		(640	)		(370	)		(1,589	)		(109	)		---			(245	)		---			(2,953	)
Recoveries		13			8			---			2			---			77			---			100
Provision for loan losses		618			1,380			1,516			(407	)		(90	)		189			(72	)		3,134
Balance, December 31,2012	$	1,070		$	2,263		$	3,442		$	959		$	142		$	424		$	49		$	8,349

	Activity in the Allowance for Loan Losses by Segment for the year ended December 31, 2011(1)
	Consumer Real Estate			Consumer Non-Real Estate			Commercial Real Estate			Commercial & Industrial			Construction, Development & Other Land			Unallocated			Total
Balance, December 31, 2010	$	1,059		$	586		$	4,033		$	1,108		$	749		$	129		$	7,664
Charge-offs		(461	)		(266	)		(457	)		(655	)		(789	)		---			(2,628	)
Recoveries		14			68			---			1			---			---			83
Provision for loan losses		440			13			935			581			988			(8	)		2,949
Balance, December 31, 2011	$	1,052		$	401		$	4,511		$	1,035		$	948		$	121		$	8,068

(1)	Segments reported for December 31, 2011 and December 31, 2010 are presented using the segmentation method in effect for 2011 and 2010. The Company began reporting under revised segments beginning 2012.

	Activity in the Allowance for Loan Losses by Segment for the year ended December 31, 2010(1)
	Consumer Real Estate			Consumer Non-Real Estate			Commercial Real Estate			Commercial & Industrial			Construction, Development & Land			Unallocated			Total
Balance, December 31, 2009	$	249		$	1,049		$	4,321		$	459		$	562		$	286		$	6,926
Charge-offs		(89	)		(358	)		(1,021	)		(927	)		(415	)		---			(2,810	)
Recoveries		10			67			61			1			---			---			139
Provision for loan losses		889			(172	)		672			1,575			602			(157	)		3,409
Balance, December 31, 2010	$	1,059		$	586		$	4,033		$	1,108		$	749		$	129		$	7,664

	Allowance for Loan Losses by Segment and Evaluation Method as of
	December 31, 2012
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate			Commercial Non Real Estate			Public Sector and IDA			Consumer Non Real Estate			Unallocated			Total
Individually evaluated for impairment		$	---		$	43		$	273		$	231		$	---		$	7		$	---		$	554
Collectively evaluated for impairment			1,070			2,220			3,169			728			142			417			49			7,795
Total		$	1,070		$	2,263		$	3,442		$	959		$	142		$	424		$	49		$	8,349

	Loans by Segment and Evaluation Method as of
	December 31, 2012
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate			Commercial Non Real Estate			Public Sector and IDA			Consumer Non Real Estate			Unallocated			Total
Individually evaluated for impairment		$	6,643		$	864		$	10,329		$	574		$	---		$	46		$	---		$	18,456
Collectively evaluated for impairment			43,670			142,398			293,979			36,775			26,169			31,668			---			574,659
Total		$	50,313		$	143,262		$	304,308		$	37,349		$	26,169		$	31,714		$	---		$	593,115

	Allowance for Loan Losses by Segment and Evaluation Method as of
	December 31, 2011(1)
	Consumer Real Estate			Consumer Non-Real Estate			Commercial Real Estate			Commercial & Industrial			Construction, Development & Other Land			Unallocated			Total
Individually evaluated for impairment		$	---		$	---		$	1,014		$	62		$	47		$	---	$	1,123
Collectively evaluated for impairment			1,052			401			3,497			973			901			121		6,945
Total		$	1,052		$	401		$	4,511		$	1,035		$	948		$	121	$	8,068

(1)

Segments reported for December 31, 2011 and December 31, 2010 are presented using the segmentation method in effect for 2011 and 2010. The Company began reporting under revised segments beginning 2012.

	Loans by Segment and Evaluation Method as of
	December 31, 2011(1)
	Consumer Real Estate			Consumer Non-Real Estate			Commercial Real Estate			Commercial & Industrial			Construction, Development & Other Land			Unallocated			Total
Individually evaluated for impairment		$	238		$	---		$	9,067		$	139		$	3,152		$	---	$	12,596
Collectively evaluated for impairment			109,843			29,707			357,507			37,584			41,233			---		575,874
Total		$	110,081		$	29,707		$	366,574		$	37,723		$	44,385		$	---	$	588,470

(1)	Segments reported for December 31, 2011 and December 31, 2010 are presented using the segmentation method in effect for 2011 and 2010. The Company began reporting under revised segments beginning 2012.

Summary of ratios for the allowance for loan losses

A summary of ratios for the allowance for loan losses follows:

	December 31,
	2012			2011			2010
Ratio of allowance for loan losses to the end of period loans, net of unearned income and deferred fees		1.41	%		1.37	%		1.33	%
Ratio of net charge-offs to average loans, net of unearned income and deferred fees		0.49	%		0.43	%		0.46	%

Summary of nonperforming assets

A summary of nonperforming assets follows:

	December 31,
	2012			2011			2010
Nonperforming assets:
Nonaccrual loans	$	10,870		$	1,398		$	1,938
Restructured loans in nonaccrual		2,151			3,806			6,133
Total nonperforming loans		13,021			5,204			8,071
Other real estate owned, net		1,435			1,489			1,723
Total nonperforming assets	$	14,456		$	6,693		$	9,794
Ratio of nonperforming assets to loans, net of unearned income and deferred fees, plus other real estate owned		2.44	%		1.13	%		1.69	%
Ratio of allowance for loan losses to nonperforming loans(1)		64.12	%		155.03	%		94.96	%

(1)

The Company defines nonperforming loans as total nonaccrual and restructured loans that are nonaccrual. Loans 90 days past due and still accruing and accruing restructured loans are excluded.

Summary of loans past due 90 days or more and impaired loans

A summary of loans past due 90 days or more and impaired loans follows:

	December 31,
	2012			2011			2010
Loans past due 90 days or more and still accruing	$	170		$	481		$	1,336
Ratio of loans past due 90 days or more and still accruing to loans, net of unearned income and deferred fees		0.03	%		0.08	%		0.23	%
Accruing restructured loans	$	2,005		$	3,756		$	350
Impaired loans:
Impaired loans with no valuation allowance	$	16,974		$	5,505		$	1,115
Impaired loans with a valuation allowance		1,482			7,091			7,676
Total impaired loans		18,456			12,596			8,791
Valuation allowance		(554	)		(1,123	)		(1,200	)
Impaired loans, net of allowance	$	17,902		$	11,473		$	7,591
Average recorded investment in impaired loans(1)	$	13,540		$	8,734		$	7,526
Income recognized on impaired loans, after designation as impaired	$	9		$	141		$	17
Amount of income recognized on a cash basis	$	---		$	---		$	---

(1)

Recorded investment includes principal, accrued interest, and deferred fees and costs.

Summary of investment in impaired loans, related allowance, recorded investment and interest income recognized

A detailed analysis of investment in impaired loans, associated reserves and interest income recognized, segregated by loan class follows:

	Impaired Loans as of December 31, 2012
	Principal Balance		(A) Total Recorded Investment(1)		Recorded Investment(1) in (A) for Which There is No Related Allowance		Recorded Investment(1) in (A) for Which There is a Related Allowance		Related Allowance
Real Estate Construction
Construction, residential	$	123	$	118	$	118	$	---	$	---
Construction, other		6,520		6,487		6,487		---		---

Consumer Real Estate
Equity lines		---		---		---		---		---
Residential closed-end first liens		783		785		634		151		43
Residential closed-end junior liens		81		81		81		---		---

Commercial Real Estate
Multifamily real estate		5,284		5,288		5,288		---		---
Commercial real estate, owner occupied		5,045		5,043		4,293		750		273
Commercial real estate, other		---		---		---		---		---

Commercial Non Real Estate
Commercial and Industrial		574		574		39		535		231

Public Sector and IDA
Public sector and IDA		---		---		---		---		---

Consumer Non Real Estate
Credit cards		---		---		---		---		---
Automobile		46		46		---		46		7
Other consumer loans		---		---		---		---		---
Total	$	18,456	$	18,422	$	16,940	$	1,482	$	554

(1)

Recorded investment includes the unpaid principal balance, accrued interest and any accrued interest and deferred fees.

	Impaired Loans as of December 31, 2011(3)
	Principal Balance		(A) Total Recorded Investment(1)		Recorded Investment(1) in (A) for Which There is No Related Allowance		Recorded Investment(1) in (A) for Which There is a Related Allowance		Related Allowance
Consumer Real Estate(2)
Closed-end Consumer Real Estate	$	237	$	237	$	237	$	---	$	---

Commercial Real Estate(2)
College housing		366		366		366		---		---
Office and Retail		3,500		3,500		---		3,500		57
Hotel		3,319		3,320		2,794		526		16
Medical Professionals		66		67		---		67		66
General contractors		703		703		176		527		402
Other commercial real estate		1,113		1,112		425		687		474

Commercial and Industrial(2)
Commercial and Industrial		139		139		---		139		62

Construction, Development and Land(2)
Residential		2,901		2,912		1,256		1,656		46
Commercial		252		252		252		---		---
Total	$	12,596	$	12,608	$	5,506	$	7,102	$	1,123

	(1)	Recorded investment includes the unpaid principal balance and any accrued interest and deferred fees.
	(2)	Only classes with impaired loans are shown.

(3)

Segments and classes at December 31, 2011 are reported using the segmentation method in effect for 2011. The Company began reporting under revised segments beginning in 2012.

	Impaired Loans as of December 31, 2010(3)
	Principal Balance		(A) Total Recorded Investment(1)		Recorded Investment(1) in (A) for Which There is No Related Allowance		Recorded Investment(1) in (A) for Which There is a Related Allowance		Related Allowance
Consumer Real Estate(2)
Closed-end Consumer Real Estate	$	505	$	505	$	---	$	505	$	26

Commercial Real Estate(2)
Hotel		3,509		3,509		287		3,222		267
Convenience stores		577		592		592		---		---
Other commercial real estate		1,065		1,066		---		1,066		299

Commercial and Industrial(2)
Commercial and Industrial		698		698		---		698		508

Construction, Development and Land(2)
Residential		2,185		2,185		---		2,185		100
Commercial		252		253		253		---		---
Total	$	8,791	$	8,808	$	1,132	$	7,676	$	1,200

(1)

Recorded investment includes the unpaid principal balance and any accrued interest and deferred fees.

(2)

Only classes with impaired loans are shown.

(3)

	Average Investment and Interest Income for Impaired Loans
	For the Year Ended December 31, 2012
	Average Recorded Investment(1)		Interest Income Recognized
Real Estate Construction
Construction, residential	$	1,171	$	---
Construction, other		4,290		1

Commercial Real Estate
Equity lines		101		---
Residential closed-end first liens		873		2
Residential closed-end junior liens		234		---

Commercial Real Estate
Multifamily real estate		1,466		5
Commercial real estate, owner occupied		4,806		1
Commercial real estate, other		---		---

Commercial Non Real Estate
Commercial and Industrial		570		---

Public Sector and IDA
Public sector and IDA		---		---

Consumer Non Real Estate
Credit cards		---		---
Automobile		4		---
Other consumer		25		---
Total	$	13,540	$	9

(1)

Recorded investment includes the unpaid principal balance and any accrued interest and deferred fees.

	Average Investment and Interest Income for Impaired Loans
	For the Year Ended December 31, 2011(3)				For the Year Ended December 31, 2010(3)
	Average Recorded Investment(1)		Interest Income Recognized		Average Recorded Investment(1)		Interest Income Recognized
Consumer Real Estate(2)
Closed-end Consumer Real Estate	$	450	$	3	$	337	$	---

Commercial Real Estate(2)
College Housing		281		7		---		---
Office and Retail		292		---		253		---
Hotels		3,445		41		2,767		---
Medical Professionals		67		5		---		---
Convenience Stores		---		---		49		15
General Contractors		112		4		---		---
Other Commercial Real Estate		1,139		24		337		1

Commercial & Industrial(2)
Commercial & Industrial		553		---		1,183		---

Construction, Development and Land(2)
Residential		2,143		49		2,579		---
Commercial		252		8		21		1
Total	$	8,734	$	141	$	7,526	$	17

(1)

Recorded investment includes the unpaid principal balance and any accrued interest and deferred fees and costs.

(2)

Only classes with impaired loans are shown.

(3)

Analysis of past due and nonaccrual loans

An analysis of past due and nonaccrual loans follows:

December 31, 2012
	30 – 89 Days Past Due		90 or More Days Past Due		90 or More Days Past Due and Still Accruing		Nonaccruals (Including Impaired Nonaccruals)
Real Estate Construction
Construction, residential	$	---	$	123	$	---	$	123
Construction, other		31		89		---		3,109

Consumer Real Estate
Equity lines		22		30		30		98
Residential closed-end first liens		1,507		605		126		801
Residential closed-end junior liens		121		39		---		120

Commercial Real Estate
Multifamily real estate		671		261		---		4,624
Commercial real estate, owner occupied		1,113		---		---		3,536
Commercial real estate, other		40		2,089		---		---

Commercial Non Real Estate
Commercial and Industrial		291		505		---		561

Public Sector and IDA
Public sector and IDA		---		---		---		---

Consumer Non Real Estate
Credit cards		20		4		4		---
Automobile		142		10		10		49
Other consumer loans		132		---		---		---
Total	$	4,090	$	3,755	$	170	$	13,021

December 31, 2011(1)
	30 – 89 Days Past Due		90 or More Days Past Due		90 Days Past Due and Still Accruing		Nonaccruals (Including Impaired Nonaccruals)
Consumer Real Estate
Equity Lines	$	---	$	---	$	---	$	---
Closed-ended Consumer Real Estate		1,735		658		346		313
Consumer Construction		---		---		---		---

Consumer Non-Real Estate
Credit Cards		26		8		8		---
Consumer General		270		38		38		---
Consumer Overdraft		---		---		---		---

Commercial Real Estate
College Housing		452		250		---		250
Office/Retail		---		---		---		---
Nursing Homes		---		---		---		---
Hotels		616		526		---		1,397
Municipalities		---		---		---		---
Medical Professionals		---		---		---		---
Religious Organizations		---		---		---		---
Convenience Stores		---		---		---		---
Entertainment and Sports		---		---		---		---
Nonprofits		---		---		---		---
Restaurants		---		---		---		---
General Contractors		103		---		---		703
Other Commercial Real Estate		815		488		63		1,112

Commercial and Industrial
Commercial and Industrial		31		26		26		139

Construction, Development and Land
Residential		---		1,290		---		1,290
Commercial		252		---		---		---
Total	$	4,300	$	3,284	$	481	$	5,204

(1)	Segments and classes at December 31, 2011 are reported using the segmentation method in effect for 2011. The Company began reporting under revised segments beginning in 2012.

Non-impaired loans by credit quality indicator

The following displays non-impaired loans by credit quality indicator:

December 31, 2012

	Pass		Special Mention		Classified (Excluding Impaired)
Real Estate Construction
Construction, 1-4 family residential	$	14,344	$	158	$	---
Construction, other		29,011		---		120

Consumer Real Estate
Equity lines		17,742		100		182
Closed-end first liens		113,893		652		2,413
Closed-end junior liens		6,713		119		138

Commercial Real Estate
Multifamily residential real estate		36,421		---		324
Commercial real estate owner-occupied		160,188		253		1,079
Commercial real estate other		92,628		3,112		---

Commercial Non Real Estate
Commercial and Industrial		36,372		99		318

Public Sector and IDA
States and political subdivisions		26,170		---		---

Consumer Non Real Estate
Credit cards		6,690		---		---
Automobile		12,344		101		56
Other consumer		11,815		45		105
Total	$	564,331	$	4,639	$	4,735

December 31, 2011(1)

	Pass		Special Mention		Classified (Excluding Impaired)
Consumer Real Estate
Equity Lines	$	17,971	$	---	$	14
Closed-ended Consumer Real Estate		87,882		595		1,332
Consumer Construction		2,050		---		---

Consumer Non-Real Estate
Credit Cards		6,594		---		1
Consumer General		22,679		42		105
Consumer Overdraft		285		---		1

Commercial Real Estate
College Housing		88,157		452		215
Office/Retail		73,106		420		267
Nursing Homes		16,173		---		---
Hotel		24,498		---		616
Municipalities		19,230		---		---
Medical Professionals		18,577		---		---
Religious Organizations		15,852		---		---
Convenience Stores		10,519		---		---
Entertainment and Sports		7,346		---		---
Nonprofit		3,265		3,170		---
Restaurants		6,138		---		387
General Contractors		4,550		109		247
Other Commercial Real Estate		63,422		---		790

Commercial and Industrial
Commercial and Industrial		37,252		196		137

Construction, Development and Land
Residential		15,732		---		---
Commercial		22,409		2,961		130
Total	$	563,687	$	7,945	$	4,242

(1)	Segments and classes at December 31, 2011 are reported using the segmentation method in effect for 2011. The Company began reporting under revised segments beginning in 2012.

Troubled debt restructurings

From time to time the Company modifies loans in troubled debt restructurings ("TDRs"). The following tables present restructurings by class that occurred during the years ended December 31, 2012 and 2011.

Note: only classes with restructured loans are presented.

	Restructurings that occurred during the year ended December 31, 2012
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment(1)		Impairment Accrued as of 12/31/2012
Consumer Real Estate
Closed-end first liens		5	$	389	$	348	$	43
Closed-end junior liens		1		147		93		---

Commercial Real Estate
Commercial real estate owner-occupied		3		890		895		---

Commercial Non Real Estate
Commercial and Industrial		1		400		400		167
Total		10	$	1,826	$	1,736	$	210

(1)	Post-modification outstanding recorded investment considers amounts immediately following the modification. Amounts do not reflect balances at the end of the period.

	Restructurings that occurred during the year ended December 31, 2011(2)
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment(1)		Impairment Accrued as of 12/31/2011
Consumer Real Estate
Closed-end Consumer Real Estate		2	$	290	$	92	$	---

Commercial Real Estate
College housing		2		419		332		---
Medical professionals		3		79		79		66
General contractors		2		128		128		128
Other commercial real estate		3		680		726		474

Commercial and Industrial		1		50		50		50

Construction, Development and Land
Residential		3		2,474		1,645		47

Total		16	$	4,120	$	3,052	$	765

(1)	Post-modification outstanding recorded investment considers amounts immediately following the modification. Amounts do not reflect balances at the end of the period.

(2)	Segments and classes at December 31, 2011 are reported using the segmentation method in effect for 2011. The Company began reporting under revised segments beginning in 2012.

The following tables present restructured loans that were modified during 2012 and 2011 and that subsequently experienced payment default. The company defines default as one or more payments that occur more than 90 days past the due date.

	Restructurings that defaulted during the year ended December 31, 2012 that were modified within 12 months prior to default
	Number of Contracts		Recorded Investment		Impairment Accrued
Consumer Real Estate
Closed-end first liens		1		96		---
Closed-end junior liens		1		81		---

Commercial Real Estate
Commercial real estate owner occupied		2		861		---

Commercial Non Real Estate
Commercial and industrial		1		388		167
Total		5	$	1,426	$	167

	Restructurings that defaulted during the year ended December 31, 2011(1) that were modified within 12 months prior to default
	Number of Contracts		Recorded Investment		Impairment Accrued
Consumer Real Estate
Closed-end Consumer Real Estate		2	$	92	$	---

Commercial Real Estate
College housing		1		250		---
General contractors		2		128		128
Other commercial real estate		3		687		474

Commercial and Industrial		1		50		50

Construction, Development and Land
Residential		3		1,645		46
Total		12	$	2,852	$	698

(1)	Segments and classes at December 31, 2011 are reported using the segmentation method in effect for 2011. The Company began reporting under revised segments beginning in 2012.