LOANS (Tables)

6 Months Ended

Jun. 30, 2013

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consist of the following:


	June 30, 2013	December 31, 2012

Commercial real estate	$ 434,616,482	$ 419,667,312
Residential first mortgages	165,433,554	177,663,354
Construction and land development	29,119,080	31,818,782
Home equity and second mortgage	21,769,081	21,982,375
Commercial loans	84,992,780	88,157,606
Consumer loans	937,147	995,206
Commercial equipment	17,347,472	16,267,684
	754,215,596	756,552,319
Less:
Deferred loan fees	930,439	664,610
Allowance for loan loss	8,033,553	8,246,957
	8,963,992	8,911,567

	$ 745,251,604	$ 747,640,752

Allowance for Credit Losses on Financing Receivables


	Commercial Real Estate	Residential First Mortgage	Construction and Land Development	Home Equity and Second Mtg.	Commercial Loans	Consumer Loans	Commercial Equipment	Total
At and For the Three Months Ended June 30, 2013
Allowance for loan losses:
Balance at April 1,	$ 3,539,930	$ 1,985,165	$ 497,078	$ 318,271	$ 1,823,540	$ 17,086	$ 168,930	$ 8,350,000
Charge-offs	-	(98)	(59)	(110,883)	(405,573)	(15)	(21,977)	(538,605)
Recoveries	-	9,908	-	-	10,899	990	(66)	21,731
Provisions	(181,929)	(34,093)	103,506	156,893	90,466	(4,089)	69,673	200,427
Balance at June 30,	$ 3,358,001	$ 1,960,882	$ 600,525	$ 364,281	$ 1,519,332	$ 13,972	$ 216,560	$ 8,033,553
At and For the Six Months Ended June 30, 2013
Allowance for loan losses:
Balance at January 1,	$ 4,089,834	$ 1,083,228	$ 533,430	$ 279,819	$ 1,949,024	$ 19,341	$ 292,281	$ 8,246,957
Charge-offs	-	(58,938)	(35,962)	(110,883)	(405,573)	(8,991)	(21,977)	(642,324)
Recoveries	-	10,900	-	-	11,891	1,982	49,547	74,320
Provisions	(731,833)	925,692	103,057	195,345	(36,010)	1,640	(103,291)	354,600
Balance at June 30,	$ 3,358,001	$ 1,960,882	$ 600,525	$ 364,281	$ 1,519,332	$ 13,972	$ 216,560	$ 8,033,553
Ending balance: individually evaluated for impairment	$ 613,757	$ 406,966	$ 169,710	$ -	$ 39,871	$ -	$ 3,364	$ 1,233,668
Ending balance: collectively evaluated for impairment	$ 2,744,244	$ 1,553,916	$ 430,815	$ 364,281	$ 1,479,461	$ 13,972	$ 213,196	$ 6,799,885
Loan receivables:
Ending balance	$ 434,616,482	$ 165,433,554	$ 29,119,080	$ 21,769,081	$ 84,992,780	$ 937,147	$ 17,347,472	$ 754,215,596
Ending balance: individually evaluated for impairment	$ 20,473,659	$ 5,236,064	$ 5,705,211	$ 214,000	$ 11,387,777	$ 41,498	$ 155,157	$ 43,213,366
Ending balance: collectively evaluated for impairment	$ 414,142,823	$ 160,197,490	$ 23,413,869	$ 21,555,081	$ 73,605,003	$ 895,649	$ 17,192,315	$ 711,002,230



	Commercial Real Estate	Residential First Mortgage	Construction and Land Development	Home Equity and Second Mtg.	Commercial Loans	Consumer Loans	Commercial Equipment	Total
At and For the Year Ended December 31, 2012
Allowance for loan losses:
Balance at January 1,	$ 2,525,199	$ 539,205	$ 354,385	$ 143,543	$ 3,850,294	$ 19,119	$ 223,296	$ 7,655,041
Charge-offs	(486,431)	(10,987)	(140,835)	(210,753)	(1,003,824)	(4,994)	(168,802)	(2,026,626)
Recoveries	-	37,524	-	-	51,350	987	-	89,861
Provisions	2,051,066	517,486	319,880	347,029	(948,796)	4,229	237,787	2,528,681
Balance at December 31,	$ 4,089,834	$ 1,083,228	$ 533,430	$ 279,819	$ 1,949,024	$ 19,341	$ 292,281	$ 8,246,957
Ending balance: individually evaluated for impairment	$ 785,878	$ 403,475	$ -	$ -	$ 353,883	$ -	$ 4,421	$ 1,547,657
Ending balance: collectively evaluated for impairment	$ 3,303,956	$ 679,753	$ 533,430	$ 279,819	$ 1,595,141	$ 19,341	$ 287,860	$ 6,699,300
Loan receivables:
Ending balance	$ 419,667,312	$ 177,663,354	$ 31,818,782	$ 21,982,375	$ 88,157,606	$ 995,206	$ 16,267,684	$ 756,552,319
Ending balance: individually evaluated for impairment	$ 21,618,890	$ 3,367,827	$ 4,877,868	$ 291,000	$ 8,778,681	$ 51,748	$ 4,421	$ 38,990,435
Ending balance: collectively evaluated for impairment	$ 398,048,422	$ 174,295,527	$ 26,940,914	$ 21,691,375	$ 79,378,925	$ 943,458	$ 16,263,263	$ 717,561,884



	Commercial Real Estate	Residential First Mortgage	Construction and Land Development	Home Equity and Second Mtg.	Commercial Loans	Consumer Loans	Commercial Equipment	Total
At and For the Three Months Ended June 30, 2012
Allowance for loan losses:
Balance at April 1,	$ 3,385,036	$ 644,008	$ 448,406	$ 265,138	$ 2,793,049	$ 18,350	$ 361,811	$ 7,915,798
Charge-offs	(85,381)	-	-	(41,942)	(649,699)	(14)	(149,794)	(926,830)
Recoveries	-	37,247	-	-	1,491	-	-	38,738
Provisions	178,803	220,250	148,448	(10,405)	(176,350)	(20)	75,705	436,431
Balance at June 30,	$ 3,478,458	$ 901,505	$ 596,854	$ 212,791	$ 1,968,491	$ 18,316	$ 287,722	$ 7,464,137
At and For the Six Months Ended June 30, 2012
Allowance for loan losses:
Balance at January 1,	$ 2,525,199	$ 539,205	$ 354,385	$ 143,543	$ 3,850,294	$ 19,119	$ 223,296	$ 7,655,041
Charge-offs	(121,833)	-	-	(41,942)	(693,048)	(999)	(149,794)	(1,007,616)
Recoveries	-	37,247	-	-	1,960	-	-	39,207
Provisions	1,075,092	325,053	242,469	111,190	(1,190,715)	196	214,220	777,505
Balance at June 30,	$ 3,478,458	$ 901,505	$ 596,854	$ 212,791	$ 1,968,491	$ 18,316	$ 287,722	$ 7,464,137
Ending balance: individually evaluated for impairment	$ 604,063	$ 247,408	$ 134,500	$ 47,200	$ 484,937	$ -	$ -	$ 1,518,108
Ending balance: collectively evaluated for impairment	$ 2,874,395	$ 654,097	$ 462,354	$ 165,591	$ 1,483,554	$ 18,316	$ 287,722	$ 5,946,029
Loan receivables:
Ending balance	$ 398,017,392	$ 178,459,492	$ 32,405,839	$ 22,525,909	$ 93,096,685	$ 1,007,453	$ 17,151,518	$ 742,664,288
Ending balance: individually evaluated for impairment	$ 38,727,469	$ 6,328,588	$ 7,812,520	$ 409,348	$ 18,536,881	$ 68,192	$ 803,700	$ 72,686,698
Ending balance: collectively evaluated for impairment	$ 359,289,923	$ 172,130,904	$ 24,593,319	$ 22,116,561	$ 74,559,804	$ 939,261	$ 16,347,818	$ 669,977,590

Schedule of Financing Receivables, Non Accrual Status

Non-accrual loans as of June 30, 2013 and December 31, 2012 were as follows:



	June 30, 2013
	90 or Greater Days Delinquent	Number of Loans	Non-accrual Performing Loans	Number of Loans	Total Dollars	Total Number of Loans

Commercial real estate	$ 3,163,457	8	$ 3,727,138	2	$ 6,890,595	10
Residential first mortgages	2,979,534	9	562,994	3	3,542,528	12
Construction and land development	-	-	-	-	-	-
Home equity and second mortgage	-	-	-	-	-	-
Commercial loans	6,009,421	11	-	-	6,009,421	11
Consumer loans	-	-	41,498	1	41,498	1
Commercial equipment	151,793	2	-	-	151,793	2
	$ 12,304,205	30	$ 4,331,630	6	$ 16,635,835	36



	December 31, 2012
	90 or Greater Days Delinquent	Number of Loans	Non-accrual Performing Loans	Number of Loans	Total Dollars	Total Number of Loans

Commercial real estate	$ 1,527,844	7	$ 3,802,947	2	$ 5,330,791	9
Residential first mortgages	3,169,404	10	569,693	3	3,739,097	13
Construction and land development	-	-	-	-	-	-
Home equity and second mortgage	71,296	2	-	-	71,296	2
Commercial loans	3,732,090	11	-	-	3,732,090	11
Consumer loans	-	-	51,748	1	51,748	1
Commercial equipment	216,383	4	-	-	216,383	4
	$ 8,717,017	34	$ 4,424,388	6	$ 13,141,405	40

Past Due Financing Receivables

An analysis of past due loans as of June 30, 2013 and December 31, 2012 was as follows:


June 30, 2013	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables
Commercial real estate	$ 431,168,815	$ -	$ 284,210	$ 3,163,457	$ 3,447,667	$ 434,616,482
Residential first mortgages	161,686,085	-	767,935	2,979,534	3,747,469	165,433,554
Construction and land dev.	29,119,080	-	-	-	-	29,119,080
Home equity and second mtg.	21,617,047	94,710	57,324	-	152,034	21,769,081
Commercial loans	78,893,319	90,040	-	6,009,421	6,099,461	84,992,780
Consumer loans	936,737	410	-	-	410	937,147
Commercial equipment	17,144,025	26,656	24,998	151,793	203,447	17,347,472
Total	$ 740,565,108	$ 211,816	$ 1,134,467	$ 12,304,205	$ 13,650,488	$ 754,215,596


December 31, 2012
Commercial real estate	$ 416,721,658	$ -	$ 1,417,810	$ 1,527,844	$ 2,945,654	$ 419,667,312
Residential first mortgages	173,593,886	97,307	802,757	3,169,404	4,069,468	177,663,354
Construction and land dev.	31,818,782	-	-	-	-	31,818,782
Home equity and second mtg.	21,499,018	350,715	61,346	71,296	483,357	21,982,375
Commercial loans	84,384,426	-	41,090	3,732,090	3,773,180	88,157,606
Consumer loans	983,094	9,363	2,749	-	12,112	995,206
Commercial equipment	15,659,007	371,921	20,373	216,383	608,677	16,267,684
Total	$ 744,659,871	$ 829,306	$ 2,346,125	$ 8,717,017	$ 11,892,448	$ 756,552,319

Schedule of Financing Receivable Recorded Investment Credit Quality Indicator

Credit quality indicators as of June 30, 2013 and December 31, 2012 were as follows:



Credit Risk Profile by Internally Assigned Grade

	Commercial Real Estate		Construction and Land Dev.
	6/30/2013	12/31/2012	6/30/2013	12/31/2012

Unrated	$ 60,706,137	$ 59,930,126	$ 4,367,952	$ 4,330,321
Pass	343,428,754	329,882,941	16,260,390	19,752,749
Special mention	5,331,812	4,880,758	-	-
Substandard	25,149,779	24,973,487	8,490,738	7,735,712
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 434,616,482	$ 419,667,312	$ 29,119,080	$ 31,818,782

	Commercial Loans		Commercial Equipment
	6/30/2013	12/31/2012	6/30/2013	12/31/2012

Unrated	$ 12,568,790	$ 11,627,726	$ 5,692,755	$ 5,082,713
Pass	57,485,149	64,436,809	8,651,353	11,180,550
Special mention	710,755	-	3,000,000	-
Substandard	14,228,086	12,093,071	3,364	4,421
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 84,992,780	$ 88,157,606	$ 17,347,472	$ 16,267,684

Credit Risk Profile Based on Payment Activity

	Residential First Mortgages		Home Equity and Second Mtg.		Consumer Loans
	6/30/2013	12/31/2012	6/30/2013	12/31/2012	6/30/2013	12/31/2012

Performing	$ 162,454,020	$ 174,493,950	$ 21,769,081	$ 21,911,079	$ 937,147	$ 995,206
Nonperforming	2,979,534	3,169,404	-	71,296	-	-
Total	$ 165,433,554	$ 177,663,354	$ 21,769,081	$ 21,982,375	$ 937,147	$ 995,206

Impaired Financing Receivables

Impaired Loans and Troubled Debt Restructures (“TDRs”)

Impaired loans, including TDRs, at June 30, 2013 and June 30, 2012, respectively, and at December 31, 2012 were as follows:


June 30, 2013	Unpaid Contractual Principal Balance	Recorded Investment With No Allowance	Recorded Investment With Allowance	Total Recorded Investment	Related Allowance	Three Month Average Recorded Investment	Three Month Interest Income Recognized	Six Month Average Recorded Investment	Six Month Interest Income Recognized
Commercial real estate	$ 20,473,659	$ 16,089,286	$ 4,384,373	$ 20,473,659	$ 613,757	$ 20,560,641	$ 234,676	$ 20,624,814	$ 435,435
Residential first mortgages	5,236,064	4,328,414	907,651	5,236,064	406,966	5,277,858	46,226	5,282,785	94,488
Construction and land dev.	5,705,211	4,497,201	1,208,010	5,705,211	169,710	5,573,948	71,379	5,295,158	146,806
Home equity and second mtg.	214,000	214,000	-	214,000	-	232,667	2,179	264,833	4,530
Commercial loans	11,387,777	11,230,906	156,871	11,387,777	39,871	11,378,533	148,950	11,320,953	227,171
Consumer loans	41,498	41,498	-	41,498	-	44,160	1,285	46,603	1,647
Commercial equipment	174,058	151,793	3,364	155,157	3,364	174,211	60	174,439	353
Total	$ 43,232,267	$ 36,553,098	$ 6,660,269	$ 43,213,366	$ 1,233,668	$ 43,242,018	$ 504,755	$ 43,009,585	$ 910,430


December 31, 2012	Unpaid Contractual Principal Balance	Recorded Investment With No Allowance	Recorded Investment With Allowance	Total Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized
Commercial real estate	$ 21,618,890	$ 18,804,478	$ 2,814,412	$ 21,618,890	$ 785,878	$ 22,501,842	$ 1,119,715
Residential first mortgages	3,367,827	2,362,062	1,005,765	3,367,827	403,475	3,388,867	157,595
Construction and land dev.	4,877,868	4,877,868	-	4,877,868	-	4,792,982	276,260
Home equity and second mtg.	291,000	291,000	-	291,000	-	221,000	6,783
Commercial loans	8,778,681	8,330,442	448,238	8,778,681	353,883	9,153,074	284,095
Consumer loans	51,748	51,748	-	51,748	-	64,459	5,284
Commercial equipment	4,421	-	4,421	4,421	4,421	5,112	318
Total	$ 38,990,435	$ 34,717,598	$ 4,272,836	$ 38,990,435	$ 1,547,657	$ 40,127,336	$ 1,850,050


June 30, 2012	Unpaid Contractual Principal Balance	Recorded Investment With No Allowance	Recorded Investment With Allowance	Total Recorded Investment	Related Allowance	Three Month Average Recorded Investment	Three Month Interest Income Recognized	Six Month Average Recorded Investment	Six Month Interest Income Recognized
Commercial real estate	$ 7,809,718	$ 5,097,362	$ 2,304,706	$ 7,402,068	$ 604,063	$ 7,821,751	$ 91,009	$ 7,836,028	$ 225,935
Residential first mortgages	2,579,409	907,147	1,672,261	2,579,409	247,408	2,583,098	26,312	2,585,146	58,717
Construction and land dev.	1,851,415	1,716,915	134,500	1,851,415	134,500	2,020,582	12,947	2,189,748	29,988
Home equity and second mtg.	101,518	-	101,518	101,518	47,200	101,518	-	101,518	-
Commercial loans	2,670,650	1,894,390	776,260	2,670,650	484,937	2,671,025	23,628	2,664,394	51,967
Total	$ 15,012,710	$ 9,615,814	$ 4,989,245	$ 14,605,060	$ 1,518,108	$ 15,197,974	$ 153,896	$ 15,376,834	$ 366,607

Troubled Debt Restructurings on Financing Receivables

TDRs, included in the impaired loan schedules above, as of June 30, 2013 and December 31, 2012, respectively were as follows:



	June 30, 2013		December 31, 2012
	Dollars	Number of Loans	Dollars	Number of Loans

Commercial real estate	$ 3,093,043	7	$ 3,097,214	7
Residential first mortgages	1,489,247	4	1,418,229	3
	$ 4,582,290	11	$ 4,515,443	10