Loans and Allowance for Loan and Lease Losses (Tables)

9 Months Ended

Sep. 30, 2012

Loans and Allowance for Loan and Lease Losses [Abstract]

Loans and allowance for loan and lease losses

	At September 30,		At December 31,
	2012		2011
Real estate loans:
Commercial	$	103,428	$	100,126
Residential		164,879		164,420
Construction		15,717		17,980
Commercial loans and leases		26,522		30,961
Municipal loans		1,179		740
Consumer loans		2,343		2,860
Total loans		314,068		317,087
Less:
Undisbursed loan proceeds		220		12
Deferred loan fees, net		684		434
Allowance for loan losses		4,236		4,132
		5,140		4,578
Total loans—net	$	308,928	$	312,509

Allowance for Loan Losses

Allowance for Loan Losses

For Three Months Ended September 30, 2012

	Commercial Real Estate Loans			Residential Real Estate Loans			Construction Real Estate Loans		Commercial Loans and Leases			Municipal Loans		Consumer Loans			Total
Balance at beginning of quarter	$	773		$	1,418		$	954	$	847		$	—	$	111		$	4,103
Provision (credit) for losses		(234	)		165			57		253			—		14			255
Charge-offs (1)		—			(50	)		—		(65	)		—		(18	)		(133	)
Recoveries		—			2			1		1			—		7			11
Balance at end of quarter	$	539		$	1,535		$	1,012	$	1,036		$	—	$	114		$	4,236

Allowance for Loan Losses and Recorded Investment in Loans

For Nine Months Ended September 30, 2012

	Commercial Real Estate Loans			Residential Real Estate Loans			Construction Real Estate Loans			Commercial Loans and Leases			Municipal Loans		Consumer Loans			Total
Balance at beginning of year	$	584		$	1,539		$	1,150		$	760		$	—	$	99		$	4,132
Provision for losses		8			356			51			427			—		48			890
Charge-offs (1)		(53	)		(367	)		(196	)		(154	)		—		(52	)		(822	)
Recoveries		—			7			7			3			—		19			36
Balance at end of period	$	539		$	1,535		$	1,012		$	1,036		$	—	$	114		$	4,236
Ending allowance balance:
Individually evaluated for impairment	$	426		$	462		$	334		$	453		$	—	$	15		$	1,690
Collectively evaluated for impairment		113			1,073			678			583			—		99			2,546
Total	$	539		$	1,535		$	1,012		$	1,036		$	—	$	114		$	4,236
Ending loan balance:
Individually evaluated for impairment	$	5,819		$	6,675		$	4,887		$	1,242		$	—	$	49		$	18,672
Collectively evaluated for impairment		97,609			158,204			10,830			25,280			1,179		2,294			295,396
Total	$	103,428		$	164,879		$	15,717		$	26,522		$	1,179	$	2,343		$	314,068

Allowance for Loan Losses

For Three Months Ended September 30, 2011

	Commercial Real Estate Loans			Residential Real Estate Loans			Construction Real Estate Loans			Commercial Loans and Leases			Municipal Loans		Consumer Loans			Total
Balance at beginning of quarter	$	674		$	1,693		$	859		$	824			—	$	69		$	4,119
Provision (credit) for losses		66			56			179			(54	)		—		8			255
Charge-offs (1)		(10	)		(107	)		(13	)		—			—		(21	)		(151	)
Recoveries		—			2			—			—			—		4			6
Balance at end of quarter	$	730		$	1,644		$	1,025		$	770			—	$	60		$	4,229

Allowance for Loan Losses

For Nine Months Ended September 30, 2011

	Commercial Real Estate Loans			Residential Real Estate Loans			Construction Real Estate Loans			Commercial Loans and Leases		Municipal Loans		Consumer Loans			Total
Balance at beginning of year	$	639		$	1,584		$	1,254		$	657		—	$	78		$	4,212
Provision for losses		101			329			306			112		—		22			870
Charge-offs (1)		(11	)		(298	)		(535	)		—		—		(52	)		(896	)
Recoveries		1			29			—			1		—		12			43
Balance at end of period	$	730		$	1,644		$	1,025		$	770		—	$	60		$	4,229

Allowance for Loan Losses and Recorded Investment in Loans

For Year Ended December 31, 2011

	Commercial Real Estate Loans		Residential Real Estate Loans		Construction Real Estate Loans		Commercial Loans and Leases		Municipal Loans		Consumer Loans		Total
Ending allowance balance:
Individually evaluated for impairment	$	445	$	707	$	435	$	142	$	—	$	8	$	1,737
Collectively evaluated for impairment		139		832		715		618		—		91		2,395
Total	$	584	$	1,539	$	1,150	$	760		—	$	99	$	4,132
Ending loan balance:
Individually evaluated for impairment	$	4,891	$	6,440	$	3,672	$	935	$	—	$	44	$	15,982
Collectively evaluated for impairment		95,235		157,980		14,308		30,026		740		2,816		301,105
Total	$	100,126	$	164,420	$	17,980	$	30,961	$	740	$	2,860	$	317,087

(1) Policy for Charging Off Loans:

A loan should be charged off at any point in time when it no longer can be considered a bankable asset, meaning collectable within the parameters of policy. The Bank shall not renew any loan, or put a loan on a demand basis, only to defer a problem, nor is it appropriate to attempt long-term recoveries while reporting loans as assets. An unsecured loan generally should be charged off no later than when it is 120 days past due as to principal or interest. For loans in the legal process of foreclosure against collateral of real and/or liquid value, the 120-day rule does not apply. Such charge-offs can be deferred until the foreclosure process progresses to the point where the Bank can adequately determine whether or not any ultimate loss will result. In similar instances where other legal actions will cause extraordinary delays, such as the settlement of an estate, yet collateral of value is realizable, the 120-day period could be extended. When a loan is unsecured or not fully collateralized, the loan should be charged off or written down to the documented collateral value rather than merely being placed on non-accrual status.

Loan Portfolio Quality Indicators

Loan Portfolio Quality Indicators

At September 30, 2012

	Commercial Real Estate Loans		Residential Real Estate Loans		Construction Real Estate Loans		Commercial Loans and Leases		Municipal Loans		Consumer Loans		Total
Rating:
Pass (Grades 1-5)	$	86,915	$	158,121	$	10,830	$	25,110	$	1,179	$	2,294	$	284,449
Watch (Grade 6)		4,660		83		—		16		—		—		4,759
Special Mention (Grade 7)		6,034		—		—		154		—		—		6,188
Substandard (Grade 8)		5,198		2,672		2,345		89		—		—		10,304
Doubtful (Grade 9)		621		4,003		2,542		1,153		—		49		8,368
Loss (Grade 10)		—		—		—		—		—		—		—
Total	$	103,428	$	164,879	$	15,717	$	26,522	$	1,179	$	2,343	$	314,068

Loan Portfolio Quality Indicators

At December 31, 2011

	Commercial Real Estate Loans		Residential Real Estate Loans		Construction Real Estate Loans		Commercial Loans and Leases		Municipal Loans		Consumer Loans		Total
Rating:
Pass (Grades 1-5)	$	82,701	$	156,783	$	12,204	$	28,513	$	740	$	2,860	$	283,801
Watch (Grade 6)		7,257		1,100		2,210		1,200		—		—		11,767
Special Mention (Grade 7)		5,037		90		135		318		—		—		5,580
Substandard (Grade 8)		5,131		1,940		—		286		—		—		7,357
Doubtful (Grade 9)		—		4,507		3,431		644		—		—		8,582
Loss (Grade 10)		—		—		—		—		—		—		—
Total	$	100,126	$	164,420	$	17,980	$	30,961	$	740	$	2,860	$	317,087

Loan portfolio aging analysis

Loan Portfolio Aging Analysis

At September 30, 2012

	30-59 Days Past Due (A)		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 days & Accruing
Real estate loans:
Commercial	$	270	$	—	$	443	$	713	$	102,715	$	103,428	$	—
Residential		3,415		458		3,008		6,881		157,998		164,879		233
Construction		2,120		—		284		2,404		13,313		15,717		—
Commercial loans and leases		281		—		780		1,061		25,461		26,522		—
Municipal loans		—		—		—		—		1,179		1,179		—
Consumer loans		33		3		—		36		2,307		2,343		—
Total	$	6,119	$	461	$	4,515	$	11,095	$	302,973	$	314,068	$	233

(A) Includes $3,602,000 in loans classified as nonaccrual that are less than 30 days past due, of which $2,120,000 are construction loans, $1,195,000 are residential real estate loans, $280,000 are commercial loans, $7,000 are commercial real estate loans and $8,000 are consumer loans.

Loan Portfolio Aging Analysis

At December 31, 2011

	30-59 Days Past Due (A)		60-89 Days Past Due (B)		90 Days and Greater		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 days & Accruing
Real estate loans:
Commercial	$	—	$	—	$	—	$	—	$	100,126	$	100,126	$	—
Residential		1,204		417		4,398		6,019		158,401		164,420		243
Construction		4,908		—		1,126		6,034		11,946		17,980		—
Commercial loans and leases		434		554		219		1,207		29,754		30,961		—
Municipal loans		—		—		—		—		740		740		—
Consumer loans		8		2		9		19		2,841		2,860		9
Total	$	6,554	$	973	$	5,752	$	13,279	$	303,808	$	317,087	$	252

(A) Includes $3,049,000 in loans classified as nonaccrual that are less than 30 days past due, of which $2,306,000 are construction loans, $425,000 are commercial loans, and $318,000 are residential real estate loans.

(B) Includes a $27,000 residential real estate loan 68 days delinquent that is classified as non-accrual.

Impaired loans

Impaired Loans

At September 30, 2012

							Three Months Ended September 30, 2012				Nine Months Ended September 30, 2012
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment  in Impaired Loans (1)		Interest Income Recognized (2)		Average Investment in  Impaired Loans (1)		Interest Income Recognized (2)
Loans without a specific valuation allowance:
Real estate loans:
Commercial		—		—		N/A		—		—		—		—
Residential		—		—		N/A		—		—		—		—
Construction		—		—		N/A		—		—		—		—
Commercial loans and leases		—		—		N/A		—		—		—		—
Municipal loans		—		—		N/A		—		—		—		—
Consumer loans		—		—		N/A		—		—		—		—
Total		—		—		N/A		—		—		—		—
Loans with a specific valuation allowance:
Real estate loans:
Commercial	$	5,819	$	5,819	$	426	$	5,864	$	51	$	5,497	$	121
Residential		6,675		6,932		462		6,627		19		6,340		59
Construction		4,887		5,142		334		4,838		33		4,220		40
Commercial loans and leases		1,242		1,273		453		1,335		3		1,121		11
Municipal loans		0		0		0		0		0		0		0
Consumer loans		49		49		15		54		0		48		0
Total	$	18,672	$	19,215	$	1,690	$	18,718	$	106	$	17,226	$	231
All Impaired Loans	$	18,672	$	19,215	$	1,690	$	18,718	$	106	$	17,226	$	231

(1) Includes all loans that were classified as impaired at any time during the three-month and nine-month periods (not just impaired loans at September 30, 2012), and their average balance for only the period during which they were classified as impaired.

(2) Interest recorded in income during only the period the loans were classified as impaired, for all loans that were classified as impaired at any time during the three and nine months ended September 30, 2012.

Impaired Loans

At September 30, 2011

	Three Months Ended September 30, 2011				Nine Months Ended September 30, 2011
	Average Investment in Impaired Loans (1)		Interest  Income Recognized (2)		Average Investment in Impaired Loans (1)		Interest  Income Recognized (2)
Loans without a specific valuation allowance:
Real estate loans:
Commercial		—		—		—		—
Residential		—		—		—		—
Construction		—		—		—		—
Commercial loans and leases		—		—		—		—
Municipal loans		—		—		—		—
Consumer loans		—		—		—		—
Total		—		—		—		—
Loans with a specific valuation allowance:
Real estate loans:
Commercial	$	4,800	$	93	$	5,462	$	280
Residential		5,922		20		6,099		80
Construction		3,320		25		4,057		54
Commercial loans and leases		973		2		965		11
Municipal loans		—		—		—		—
Consumer loans		48		—		52		—
Total	$	15,063	$	140	$	16,635	$	425
All Impaired Loans	$	15,063	$	140	$	16,635	$	425

(1) Includes all loans that were classified as impaired at any time during the three-month and nine-month periods (not just impaired loans at September 30, 2011), and their average balance for only the period during which they were classified as impaired.

(2) Interest recorded in income during only the period the loans were classified as impaired, for all loans that were classified as impaired at any time during the three months and nine months ended September 30, 2011.

Impaired Loans

At December 31, 2011

							Year Ended December 31, 2011
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans (1)		Interest Income Recognized (2)
Loans without a specific valuation allowance:
Real estate loans:
Commercial		—		—		N/A		—		—
Residential		—		—		N/A		—		—
Construction		—		—		N/A		—		—
Commercial loans and leases		—		—		N/A		—		—
Municipal loans		—		—		N/A		—		—
Consumer loans		—		—		N/A		—		—
Total		—		—		N/A		—		—
Loans with a specific valuation allowance:
Real estate loans:
Commercial	$	4,891	$	4,891	$	445	$	5,318	$	181
Residential		6,440		6,494		707		6,142		100
Construction		3,672		3,842		435		3,962		57
Commercial loans and leases		935		955		142		952		16
Municipal loans		—		—		—		—		—
Consumer loans		44		44		8		50		—
Total	$	15,982	$	16,226	$	1,737	$	16,424	$	354
All Impaired Loans	$	15,982	$	16,226	$	1,737	$	16,424	$	354

(1) Includes all loans that were classified as impaired at any time during 2011 (not just impaired loans at December 31, 2011), and their average balance for only the period during which they were classified as impaired.

(2) Interest recorded in income during only the period the loans were classified as impaired, for all loans that were classified as impaired at any time during 2011.

Loans accounted for non-accrual basis

Loans Accounted for on a Non-Accrual Basis

	At September 30, 2012		At December 31, 2011
Real estate loans:
Commercial	$	713	$	—
Residential		4,139		4,500
Construction		2,404		3,432
Commercial loans and leases		1,061		644
Municipal loans		—		—
Consumer loans		7		—
Total	$	8,324	$	8,576

Loans classified as troubled debt restructuring consisted primarily of interest rate concessions

	Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
	Modifications						Modifications
	Number		Recorded Balance Before		Recorded Balance After		Number		Recorded Balance Before		Recorded Balance After
Real estate loans:
Commercial		1	$	31	$	31		2	$	172	$	172
Residential		1		79		79		5		1,712		1,712
Construction		—		—		—		1		1,940		1,940
Commercial loans and leases		1		58		58		2		268		268
Municipal loans		—		—		—		—		—		—
Consumer loans		—		—		—		3		9		9
Total		3	$	168	$	168		13	$	4,101	$	4,101

	Three Months Ended September 30, 2011						Nine Months Ended September 30, 2011
	Modifications						Modifications
	Number		Recorded Balance Before		Recorded Balance After		Number		Recorded Balance Before		Recorded Balance After
Real estate loans:
Commercial		1	$	197	$	197		1	$	197	$	197
Residential		2		86		86		13		1,101		1,101
Construction		—		—		—		—		—		—
Commercial loans and leases		1		240		240		1		240		240
Municipal loans		—		—		—		—		—		—
Consumer loans		—		—		—		—		—		—
Total		4	$	523	$	523		15	$	1,538	$	1,538

Troubled debt restructured loans which had payment defaults

	Three Months Ended September 30, 2012				Nine Months Ended September 30, 2012
	Number of Defaults		Recorded Balance		Number of Defaults		Recorded Balance
Real estate loans:
Commercial		—	$	—		—	$	—
Residential		—		—		—		—
Construction		—		—		—		—
Commercial loans and leases		—		—		2		123
Municipal loans		—		—		—		—
Consumer loans		—		—		—		—
Total		—	$	—		2	$	123

	Three Months Ended September 30, 2011				Nine Months Ended September 30, 2011
	Number of Defaults		Recorded Balance		Number of Defaults		Recorded Balance
Real estate loans:
Commercial		—		—		—		—
Residential		3	$	223		3	$	223
Construction		—		—		—		—
Commercial loans and leases		—		—		—		—
Municipal loans		—		—		—		—
Consumer loans		—		—		—		—
Total		3	$	223		3	$	223