Loans are comprised of the following:	September 30,		December 31,
	2011		2010
Residential real estate	$	227,916	$	236,878
Commercial real estate:
Owner-occupied		145,989		149,042
Nonowner-occupied		58,019		55,989
Construction		24,466		21,591
Commercial and industrial		49,343		55,306
Consumer:
Automobile		48,754		58,271
Home equity		20,246		20,527
Other		40,168		43,718
		614,901		641,322
Less: Allowance for loan losses		6,511		9,386

Loans, net	$	608,390	$	631,936

The Bank originated refund anticipation loans that contributed fee income of $561 and $655 during the nine months ended September 30, 2011 and September 30, 2010, respectively. As recommended by the FDIC, the Bank ceased offering refund anticipation loans effective April 19, 2011.

Activity in the allowance for loan losses was as follows:	Three Months Ended September 30, 2011			Three Months Ended September 30, 2010			Nine Months Ended September 30, 2011			Nine Months Ended September 30, 2010

Beginning balance	$	6,479		$	7,823		$	9,386		$	8,198
Loans charged off:
Residential real estate		741			152			1,325			676
Commercial real estate		113			102			2,085			1,139
Commercial and industrial		26			7			4,727			191
Consumer		476			498			1,223			1,544
Total loans charged off		1,356			759			9,360			3,550

Recoveries of loans:
Residential real estate		57			11			94			20
Commercial real estate		2			----			913			70
Commercial and industrial		48			----			119			25
Consumer		129			166			504			836
Total recoveries of loans		236			177			1,630			951

Net loan charge-offs		(1,120	)		(582	)		(7,730	)		(2,599	)
Provision charged to operations		1,152			2,225			4,855			3,867
Balance, end of year	$	6,511		$	9,466		$	6,511		$	9,466

As a result of management’s evaluation of the trends in the real estate market, the status of long-term, collateral dependent impaired loans and the current regulatory environment, management decided to take partial charge-offs more quickly on collateral dependent impaired loans during the second quarter of 2011.

September 30, 2011	Residential Real Estate		Commercial Real Estate			Commercial and Industrial			Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,008	$	3,517		$	770		$	1,184	$	----	$	6,479
Provision for loan losses		887		(65	)		(74	)		404		----		1,152
Loans charged off		741		113			26			476		----		1,356
Recoveries		57		2			48			129		----		236
Total ending allowance balance	$	1,211	$	3,341		$	718		$	1,241	$	----	$	6,511

September 30, 2011	Residential Real Estate		Commercial Real Estate		Commercial and Industrial		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	993	$	3,141	$	3,795	$	1,457	$	----	$	9,386
Provision for loan losses		1,449		1,372		1,531		503		----		4,855
Loans charged off		1,325		2,085		4,727		1,223		----		9,360
Recoveries		94		913		119		504		----		1,630
Total ending allowance balance	$	1,211	$	3,341	$	718	$	1,241	$	----	$	6,511

September 30, 2011	Residential Real Estate		Commercial Real Estate		Commercial and Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	----	$	405	$	----	$	----	$	405
Collectively evaluated for impairment		1,211		2,936		718		1,241		6,106
Total ending allowance balance	$	1,211	$	3,341	$	718	$	1,241	$	6,511

Loans:
Loans individually evaluated for impairment	$	1,287	$	14,321	$	3,002	$	----	$	18,610
Loans collectively evaluated for impairment		226,629		214,153		46,341		109,168		596,291
Total ending loans balance	$	227,916	$	228,474	$	49,343	$	109,168	$	614,901

December 31, 2010	Residential Real Estate		Commercial Real Estate		Commercial and Industrial		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	125	$	1,698	$	3,407	$	----	$	5,230
Collectively evaluated for impairment		868		1,443		388		1,457		4,156
Total ending allowance balance	$	993	$	3,141	$	3,795	$	1,457	$	9,386

Loans:
Loans individually evaluated for impairment	$	1,784	$	13,460	$	7,862	$	----	$	23,106
Loans collectively evaluated for impairment		235,094		213,162		47,444		122,516		618,216
Total ending loans balance	$	236,878	$	226,622	$	55,306	$	122,516	$	641,322

Information regarding impaired loans is as follows:	September 30, 2011		December 31, 2010

Loans with no allocated allowance for loan losses	$	16,205	$	7,884
Loans with allocated allowance for loan losses		2,405		15,222
Total impaired loans	$	18,610	$	23,106

Amount of the allowance for loan losses allocated	$	405	$	5,230

Average of individually impaired loans during year	$	19,107	$	24,589

Average impaired loans during the nine months ended September 30, 2011 and 2010 were $19,107 and $26,615, respectively. Average impaired loans for the three months ended September 30, 2011 and 2010 were $18,182 and $21,953, respectively. Interest recognized on impaired loans during the nine months ended September 30, 2011 and 2010 were $1,042 and $1,027, respectively. Interest recognized on impaired loans during the three months ended September 30, 2011 and 2010 were $474 and $514, respectively. Accrual basis income was not materially different from cash basis income for the periods presented.

Three Months Ended September 30, 2011	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
Residential real estate	$	1,427	$	1,287	$	----	$	1,026	$	29	$	20
Commercial real estate:
Owner-occupied		8,880		8,152		----		7,701		142		137
Nonowner-occupied		3,222		3,090		----		3,293		117		105
Construction		674		674		----		677		8		9
Commercial and industrial		7,196		3,002		----		3,071		148		92
Consumer:
Automobile		----		----		----		----		----		----
Home equity		----		----		----		----		----		----
Other		----		----		----		----		----		----
With an allowance recorded:
Residential real estate		----		----		----		----		----		----
Commercial real estate:
Owner-occupied		----		----		----		----		----		----
Nonowner-occupied		2,405		2,405		405		2,414		30		30
Construction		----		----		----		----		----		----
Commercial and industrial		----		----		----		----		----		----
Consumer:
Automobile		----		----		----		----		----		----
Home equity		----		----		----		----		----		----
Other		----		----		----		----		----		----
Total	$	23,804	$	18,610	$	405	$	18,182	$	474	$	393

Nine Months Ended September 30, 2011	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Impaired Loans		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
Residential real estate	$	1,427	$	1,287	$	----	$	901	$	38	$	23
Commercial real estate:
Owner-occupied		8,880		8,152		----		7,640		381		369
Nonowner-occupied		3,222		3,090		----		2,980		156		141
Construction		674		674		----		678		27		26
Commercial and industrial		7,196		3,002		----		4,490		340		251
Consumer:
Automobile		----		----		----		----		----		----
Home equity		----		----		----		----		----		----
Other		----		----		----		----		----		----
With an allowance recorded:
Residential real estate		----		----		----		----		----		----
Commercial real estate:
Owner-occupied		----		----		----		----		----		----
Nonowner-occupied		2,405		2,405		405		2,418		100		90
Construction		----		----		----		----		----		----
Commercial and industrial		----		----		----		----		----		----
Consumer:
Automobile		----		----		----		----		----		----
Home equity		----		----		----		----		----		----
Other		----		----		----		----		----		----
Total	$	23,804	$	18,610	$	405	$	19,107	$	1,042	$	900

December 31, 2010	Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Residential real estate	$	1,244	$	----
Commercial real estate:
Owner-occupied		4,234		----
Nonowner-occupied		992		----
Construction		743		----
Commercial and industrial		671		----
Consumer:
Automobile		----		----
Home equity		----		----
Other		----		----
With an allowance recorded:
Residential real estate		540		125
Commercial real estate:
Owner-occupied		4,731		1,125
Nonowner-occupied		2,760		573
Construction		----		----
Commercial and industrial		7,191		3,407
Consumer:
Automobile		----		----
Home equity		----		----
Other		----		----
Total	$	23,106	$	5,230

September 30, 2011	Loans Past Due 90 Days And Still Accruing		Nonaccrual

Residential real estate	$	965	$	3,044
Commercial real estate:
Owner-occupied		----		1,497
Nonowner-occupied		----		86
Construction		----		----
Commercial and industrial		----		----
Consumer:
Automobile		19		8
Home equity		----		69
Other		42		----
Total	$	1,026	$	4,704

December 31, 2010	Loans Past Due 90 Days And Still Accruing		Nonaccrual

Residential real estate	$	1,487	$	2,200
Commercial real estate:
Owner-occupied		----		428
Nonowner-occupied		----		432
Construction		----		----
Commercial and industrial		----		----
Consumer:
Automobile		114		100
Home equity		43		104
Other		70		31
Total	$	1,714	$	3,295

September 30, 2011	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total

Residential real estate	$	3,239	$	541	$	3,916	$	7,696	$	220,220	$	227,916
Commercial real estate:
Owner-occupied		609		47		1,497		2,153		143,836		145,989
Nonowner-occupied		----		----		86		86		57,933		58,019
Construction		----		----		----		----		24,466		24,466
Commercial and industrial		52		37		----		89		49,254		49,343
Consumer:
Automobile		715		143		19		877		47,877		48,754
Home equity		76		46		69		191		20,055		20,246
Other		674		135		42		851		39,317		40,168
Total	$	5,365	$	949	$	5,629	$	11,943	$	602,958	$	614,901

December 31, 2010	30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Loans Not Past Due		Total

Residential real estate	$	4,731	$	1,951	$	3,448	$	10,130	$	226,748	$	236,878
Commercial real estate:
Owner-occupied		1,564		17		428		2,009		147,033		149,042
Nonowner-occupied		87		----		432		519		55,470		55,989
Construction		----		----		----		----		21,591		21,591
Commercial and industrial		15		----		----		15		55,291		55,306
Consumer:
Automobile		1,010		342		213		1,565		56,706		58,271
Home equity		78		50		147		275		20,252		20,527
Other		793		238		101		1,132		42,586		43,718
Total	$	8,278	$	2,598	$	4,769	$	15,645	$	625,677	$	641,322

A troubled debt restructuring (“TDR”) is where the Company has agreed to a loan modification in the form of a concession for a borrower who is experiencing financial difficulty. All TDR’s are considered to be impaired. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or short-term interest only payment terms. The Company has allocated reserves for a portion of its TDR’s to reflect the fair values of the underlying collateral or the present value of the concessionary terms granted to the customer.

September 30, 2011	TDR’s Performing to Modified Terms		TDR’s Not Performed to Modified Terms		Total TDR’s

Residential real estate
Interest only payments	$	----	$	283	$	283
Commercial real estate:
Owner-occupied
Interest only payments		3,624		----		3,624
Rate reduction		452		----		452
Maturity extension at lower stated rate than market rate		226		----		226
Nonowner-occupied
Interest only payments		3,365		----		3,365
Maturity extension at lower stated rate than market rate		1,927		----		1,927
Construction
Interest only payments		675		----		675
Commercial and industrial
Interest only payments		356		----		356
Rate reduction		2,646		----		2,646
Total TDR’s	$	13,271	$	283	$	13,554

December 31, 2010	TDR’s Performing to Modified Terms		TDR’s Not Performed to Modified Terms		Total TDR’s

Residential real estate
Interest only payments	$	456	$	----	$	456
Rate reduction		584		----		584
Commercial real estate:
Owner-occupied
Interest only payments		3,886		----		3,886
Rate reduction		887		----		887
Nonowner-occupied
Interest only payments		2,983		----		2,983
Construction
Interest only payments		679		----		679
Commercial and industrial
Interest only payments		671		----		671
Rate reduction		6,668		----		6,668
Total TDR’s	$	16,814	$	----	$	16,814

At September 30, 2011, the balance in TDR loans decreased $3,260, or 19.4%, from year-end 2010. This was largely impacted by partial charge-offs taken on one impaired commercial and industrial loan relationship totaling $3,839 during the first quarter of 2011. At September 30, 2011 and December 31, 2010, 98% and 100% of the Company’s TDR’s were performing according to their modified terms. The Company allocated $405 and $3,791 in reserves to customers whose loan terms have been modified in TDR’s as of September 30, 2011 and December 31, 2010, respectively. The Company had no commitments to lend additional amounts to customers with outstanding loans that are classified as TDR’s at September 30, 2011 and December 31, 2010.

	TDR’s Performing to Modified Terms				TDR’s Not Performing to Modified Terms				Total TDR’s
September 30, 2011	Three Months Ended		Nine Months Ended		Three Months Ended		Nine Months Ended		Three Months Ended		Nine Months Ended
Residential real estate	$	----	$	----	$	----	$	----	$	----	$	----
Commercial real estate:
Owner-occupied
Rate reduction		----		1,094		----		----		----		1,094
Maturity extension at lower stated rate than market rate		----		226		----		----		----		226
Nonowner-occupied
Interest only payments		----		400		----		----		----		400
Maturity extension at lower stated rate than market rate		----		1,927		----		----		----		1,927
Construction		----		----		----		----		----		----
Commercial and industrial		----		----		----		----		----		----
Total TDR’s	$	----	$	3,647	$	----	$	----	$	----	$	3,647

As of September 30, 2011, 100% of the Company’s TDR’s that occurred during the first nine months of 2011 were performing in accordance with their modified terms and did not experience any defaults during the previous twelve-month period following the loan modification. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual. TDR loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The TDR’s described above increased the allowance for losses by $343 and resulted in charge-offs of $414 during the first nine months of 2011. As of September 30, 2011, the Company had no allocation of reserves to customers whose loan terms have been modified during the first nine months of 2011.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. These risk categories are represented by a loan grading scale from 1 through 10. The Company analyzes loans individually with a higher credit risk rating and groups these loans into a category called "classified" assets. The Company considers its classified assets to be loans that are graded 9 through 10 and generally have outstanding balances greater than $200. Loans graded a 9 or 10 that have outstanding balances of less than $200 may be included in the classified asset category if 1) a portion of the loan balance has been specifically allocated to the allowance for loan losses, or 2) the aggregate borrowings of the customer meet or exceed $200. While the Company uses these criteria for evaluating and establishing its higher risk, classified asset category, loans that do not meet these criteria may still be included as classified assets based on other subjective factors that indicate a concern over the borrower's ability to repay the loan. The Company's risk categories are reviewed annually on loans that have aggregate borrowing amounts that meet or exceed $500.

Substandard (Loan Grade 9). Loans classified as substandard represent very high risk, serious delinquency, nonaccrual, or unacceptable credit. Repayment through the primary source of repayment is in jeopardy due to the existence of one or more well defined weaknesses and the collateral pledged may inadequately protect collection of the loans. Loss of principal is not likely if weaknesses are corrected, although financial statements normally reveal significant weakness. Loans are still considered collectible, although loss of principal is more likely than with special mention loan grade 8 loans. Collateral liquidation is considered likely to satisfy debt.

Doubtful (Loan Grade 10). Loans classified as doubtful display a high probability of loss, although the amount of actual loss at the time of classification is undetermined. This should be a temporary category until such time that actual loss can be identified, or improvements made to reduce the seriousness of the classification. These loans exhibit all substandard characteristics with the addition that weaknesses make collection or liquidation in full highly questionable and improbable. This classification consists of loans where the possibility of loss is high after collateral liquidation based upon existing facts, market conditions, and value. Loss is deferred until certain important and reasonable specific pending factors which may strengthen the credit can be more accurately determined. These factors may include proposed acquisitions, liquidation procedures, capital injection, receipt of additional collateral, mergers, or refinancing plans. A doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded substandard.

Classified loans will mostly consist of commercial and industrial and commercial real estate loans. The Company considers its loans that do not meet the criteria for a classified asset rating as pass rated loans, which will include loans graded from 1 (Prime) to 8 (Special Mention). All commercial loans are categorized into a risk category either at the time of origination or re-evaluation date. As of September 30, 2011 and December 31, 2010, and based on the most recent analysis performed, the risk category of commercial loans by class of loans is as follows:

September 30, 2011	Pass		Classified		Total
Commercial real estate:
Owner-occupied	$	131,001	$	14,988	$	145,989
Nonowner-occupied		49,110		8,909		58,019
Construction		17,105		7,361		24,466
Commercial and industrial		38,666		10,677		49,343
Total	$	235,882	$	41,935	$	277,817

December 31, 2010	Pass		Classified		Total
Commercial real estate:
Owner-occupied	$	138,490	$	10,552	$	149,042
Nonowner-occupied		50,119		5,870		55,989
Construction		15,550		6,041		21,591
Commercial and industrial		43,668		11,638		55,306
Total	$	247,827	$	34,101	$	281,928

The Company also obtains the credit scores of its borrowers upon origination (if available by the credit bureau), but the scores are not updated. The Company focuses mostly on the performance and repayment ability of the borrower as an indicator of credit risk and does not consider a borrower's credit score to be a significant influence in the determination of a loan's credit risk grading.

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment of residential and consumer loans by class of loans based on payment activity as of September 30, 2011 and December 31, 2010:

The Company, through its subsidiaries, grants residential, consumer, and commercial loans to customers located primarily in the central and southeastern areas of Ohio as well as the western counties of West Virginia. Approximately 3.87% of total loans were unsecured at September 30, 2011, down from 3.93% at December 31, 2010.