LOANS (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Accounts, Notes, Loans and Financing Receivable

Loans consist of the following:


	September 30, 2013	December 31, 2012

Commercial real estate	$ 445,662,038	$ 419,667,312
Residential first mortgages	161,861,710	177,663,354
Construction and land development	31,113,145	31,818,782
Home equity and second mortgages	21,711,980	21,982,375
Commercial loans	86,504,220	88,157,606
Consumer loans	901,800	995,206
Commercial equipment	21,085,197	16,267,684
	768,840,090	756,552,319
Less:
Deferred loan fees	880,086	664,610
Allowance for loan loss	8,079,277	8,246,957
	8,959,363	8,911,567

	$ 759,880,727	$ 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 September 30, 2013
Allowance for loan losses:
Balance at July 1,	$ 3,358,001	$ 1,960,882	$ 600,525	$ 364,281	$ 1,519,332	$ 13,972	$ 216,560	$ 8,033,553
Charge-offs	(140,048)	(80,110)	(50)	(155)	(28,576)	(1,012)	(31)	(249,982)
Recoveries	-	154	-	-	168	28	9,746	10,096
Provisions	311,035	(177,787)	(131,581)	(45,812)	272,009	1,539	56,207	285,610
Balance at September 30,	$ 3,528,988	$ 1,703,139	$ 468,894	$ 318,314	$ 1,762,933	$ 14,527	$ 282,482	$ 8,079,277
At and For the Nine Months Ended September 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	(140,048)	(139,048)	(36,012)	(111,038)	(434,149)	(10,003)	(22,008)	(892,306)
Recoveries	-	11,054	-	-	12,059	2,010	59,293	84,416
Provisions	(420,798)	747,905	(28,524)	149,533	235,999	3,179	(47,084)	640,210
Balance at September 30,	$ 3,528,988	$ 1,703,139	$ 468,894	$ 318,314	$ 1,762,933	$ 14,527	$ 282,482	$ 8,079,277
Ending balance: individually evaluated for impairment	$ 559,333	$ 170,741	$ -	$ -	$ 291,821	$ -	$ 22,875	$ 1,044,770
Ending balance: collectively evaluated for impairment	$ 2,969,655	$ 1,532,398	$ 468,894	$ 318,314	$ 1,471,112	$ 14,527	$ 259,607	$ 7,034,507
Loan receivables:
Ending balance	$ 445,662,038	$ 161,861,710	$ 31,113,145	$ 21,711,980	$ 86,504,220	$ 901,800	$ 21,085,197	$ 768,840,090
Ending balance: individually evaluated for impairment	$ 19,856,516	$ 3,882,548	$ 5,349,737	$ 58,000	$ 11,054,771	$ 31,935	$ 316,662	$ 40,550,169
Ending balance: collectively evaluated for impairment	$ 425,805,522	$ 157,979,162	$ 25,763,408	$ 21,653,980	$ 75,449,449	$ 869,865	$ 20,768,535	$ 728,289,921



	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 September 30, 2012
Allowance for loan losses:
Balance at July 1,	$ 3,478,458	$ 901,505	$ 596,854	$ 212,791	$ 1,968,491	$ 18,316	$ 287,722	$ 7,464,137
Charge-offs	(50,034)	(10,991)	(5,995)	(46,989)	(413)	-	(90)	(114,512)
Recoveries	-	429	-	-	23	-	-	452
Provisions	683,311	(3,991)	40,378	18,402	(14,062)	1,505	20,532	746,075
Balance at September 30,	$ 4,111,735	$ 886,952	$ 631,237	$ 184,204	$ 1,954,039	$ 19,821	$ 308,164	$ 8,096,152
At and For the Nine Months Ended September 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	(171,867)	(10,991)	(5,995)	(88,931)	(693,461)	(999)	(149,884)	(1,122,128)
Recoveries	-	37,676	-	-	1,983	-	-	39,659
Provisions	1,758,403	321,062	282,847	129,592	(1,204,777)	1,701	234,752	1,523,580
Balance at September 30,	$ 4,111,735	$ 886,952	$ 631,237	$ 184,204	$ 1,954,039	$ 19,821	$ 308,164	$ 8,096,152
Ending balance: individually evaluated for impairment	$ 1,122,590	$ 247,541	$ 134,500	$ 21,855	$ 499,654	$ -	$ 4,715	$ 2,030,855
Ending balance: collectively evaluated for impairment	$ 2,989,145	$ 639,411	$ 496,737	$ 162,349	$ 1,454,385	$ 19,821	$ 303,449	$ 6,065,297
Loan receivables:
Ending balance	$ 406,261,770	$ 176,825,516	$ 31,639,206	$ 21,940,441	$ 86,057,488	$ 1,047,046	$ 17,246,112	$ 741,017,579
Ending balance: individually evaluated for impairment	$ 23,039,920	$ 4,011,851	$ 5,217,025	$ 293,855	$ 12,972,808	$ 60,925	$ 4,715	$ 45,601,099
Ending balance: collectively evaluated for impairment	$ 383,221,850	$ 172,813,665	$ 26,422,181	$ 21,646,586	$ 73,084,680	$ 986,121	$ 17,241,397	$ 695,416,480

Schedule of Financing Receivables, Non Accrual Status

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



	September 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	$ 2,947,607	9	$ 3,728,175	2	$ 6,675,782	11
Residential first mortgages	2,155,122	7	565,802	3	2,720,924	10
Commercial loans	5,670,331	10	-	-	5,670,331	10
Consumer loans	-	-	31,935	1	31,935	1
Commercial equipment	316,662	5	-	-	316,662	5
	$ 11,089,722	31	$ 4,325,912	6	$ 15,415,634	37



	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
Home equity and second mortgages	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 September 30, 2013 and December 31, 2012 was as follows:


September 30, 2013	Current	31-60 Days	61-89 Days	90 or Greater Days	Total Past Due	Total Loan Receivables
Commercial real estate	$ 440,735,812	$ -	$ 1,978,619	$ 2,947,607	$ 4,926,226	$ 445,662,038
Residential first mortgages	159,568,816	-	137,772	2,155,122	2,292,894	161,861,710
Construction and land dev.	30,786,474	326,671	-	-	326,671	31,113,145
Home equity and second mortgages	21,388,847	199,217	123,916	-	323,133	21,711,980
Commercial loans	80,633,889	200,000	-	5,670,331	5,870,331	86,504,220
Consumer loans	898,574	3,226	-	-	3,226	901,800
Commercial equipment	20,730,853	37,682	-	316,662	354,344	21,085,197
Total	$ 754,743,265	$ 766,796	$ 2,240,307	$ 11,089,722	$ 14,096,825	$ 768,840,090


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 mortgages	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 September 30, 2013 and December 31, 2012 were as follows:



Credit Risk Profile by Internally Assigned Grade

	Commercial Real Estate		Construction and Land Dev.
	9/30/2013	12/31/2012	9/30/2013	12/31/2012

Unrated	$ 63,842,162	$ 59,930,126	$ 4,339,477	$ 4,330,321
Pass	351,452,830	329,882,941	18,631,753	19,752,749
Special mention	5,790,532	4,880,758	-	-
Substandard	24,576,514	24,973,487	8,141,915	7,735,712
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 445,662,038	$ 419,667,312	$ 31,113,145	$ 31,818,782

	Commercial Loans		Commercial Equipment
	9/30/2013	12/31/2012	9/30/2013	12/31/2012

Unrated	$ 11,401,481	$ 11,627,726	$ 5,938,295	$ 5,082,713
Pass	60,365,389	64,436,809	15,121,129	11,180,550
Special mention	402,000	-	2,898	-
Substandard	14,335,350	12,093,071	22,875	4,421
Doubtful	-	-	-	-
Loss	-	-	-	-
Total	$ 86,504,220	$ 88,157,606	$ 21,085,197	$ 16,267,684

Credit Risk Profile Based on Payment Activity

	Residential First Mortgages		Home Equity and Second Mtg.		Consumer Loans
	9/30/2013	12/31/2012	9/30/2013	12/31/2012	9/30/2013	12/31/2012

Performing	$ 159,706,588	$ 174,493,950	$ 21,711,980	$ 21,911,079	$ 901,800	$ 995,206
Nonperforming	2,155,122	3,169,404	-	71,296	-	-
Total	$ 161,861,710	$ 177,663,354	$ 21,711,980	$ 21,982,375	$ 901,800	$ 995,206

Impaired Financing Receivables

Impaired Loans and Troubled Debt Restructures (“TDRs”)

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


September 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	Nine Month Average Recorded Investment	Nine Month Interest Income Recognized
Commercial real estate	$ 20,025,629	$ 15,885,402	$ 3,971,114	$ 19,856,516	$ 559,333	$ 20,010,465	$ 207,372	$ 20,162,244	$ 631,913
Residential first mortgages	3,882,548	3,181,637	700,911	3,882,548	170,741	3,910,884	30,371	3,919,666	96,616
Construction and land dev.	5,349,737	5,349,737	-	5,349,737	-	5,363,126	77,157	5,311,703	223,963
Home equity and second mtg.	58,000	58,000	-	58,000	-	120,000	1,486	216,556	6,016
Commercial loans	11,054,771	10,333,950	720,821	11,054,771	291,821	11,028,319	66,604	10,967,594	292,138
Consumer loans	31,935	31,935	-	31,935	-	36,393	1,112	43,199	2,759
Commercial equipment	335,563	293,787	22,875	316,662	22,875	336,106	1,238	350,886	7,740
Total	$ 40,738,183	$ 35,134,448	$ 5,415,721	$ 40,550,169	$ 1,044,770	$ 40,805,293	$ 385,340	$ 40,971,848	$ 1,261,145


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


September 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	Nine Month Average Recorded Investment	Nine Month Interest Income Recognized
Commercial real estate	$ 23,497,570	$ 19,699,656	$ 3,340,264	$ 23,039,920	$ 1,122,590	$ 23,128,253	$ 282,740	$ 23,257,586	$ 872,500
Residential first mortgages	4,011,851	2,347,285	1,664,567	4,011,851	247,541	4,021,446	35,750	4,025,659	121,746
Construction and land dev.	5,217,025	5,082,525	134,500	5,217,025	134,500	5,145,911	90,653	5,701,121	205,509
Home equity and second mtg.	293,855	272,000	21,855	293,855	21,855	246,399	1,870	220,572	5,373
Commercial loans	13,572,808	12,196,993	775,815	12,972,808	499,654	13,486,660	105,044	13,871,661	321,821
Consumer loans	60,925	60,925	-	60,925	-	63,492	1,557	70,365	4,500
Commercial equipment	4,715	-	4,715	4,715	4,715	4,909	83	5,309	266
Total	$ 46,658,749	$ 39,659,384	$ 5,941,716	$ 45,601,099	$ 2,030,855	$ 46,097,070	$ 517,697	$ 47,152,273	$ 1,531,715

Troubled Debt Restructurings on Financing Receivables

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



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

Commercial real estate	$ 3,152,197	8	$ 3,097,214	7
Residential first mortgages	1,485,600	4	1,418,229	3
	$ 4,637,797	12	$ 4,515,443	10