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Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2013

	(Unaudited) September 30, 2013			December 31, 2012
	(In thousands)
Real Estate
One-to-four family residential	$	95,452		$	99,216
Multi-family residential		50,486			62,823
Commercial real estate		72,050			82,430
Construction and land development		15,896			14,113
Commercial		12,010			13,290
Consumer and other		1,137			1,131
Home equity lines of credit		16,779			16,421
Total loans		263,810			289,424

Less
Net deferred loan fees, premiums and discounts		(400	)		(469	)
Undisbursed portion of loans		(2,550	)		(2,798	)
Allowance for loan losses		(6,407	)		(5,900	)
Net loans	$	254,453		$	280,257

Schedule of allowance for loan losses and recorded investment in loans

	Allowance for Loan Losses and Recorded Investment in Loans
Three Months Ended September 30, 2013	Commercial			Owner Occupied 1-4			Non-owner Occupied 1-4		Multi- family			Commercial Real Estate		Construction			Land			Consumer and Home Equity			Total
	(Unaudited; In thousands)
Beginning balance	$	915		$	552		$	990	$	1,001		$	2,259	$	46		$	348		$	235		$	6,346
Provision charged to expense		(138	)		(8	)		5		(73	)		231		(12	)		(9	)		29			25
Losses charged off		(3	)		---			---		---			12		---			---			(35	)		(26	)
Recoveries		39			---			3		---			8		---			12			---			62
Ending balance	$	813		$	544		$	998	$	928		$	2,510	$	34		$	351		$	229		$	6,407

Nine Months Ended September 30, 2013	Commercial			Owner Occupied 1-4			Non-owner Occupied 1-4			Multi- family			Commercial Real Estate			Construction			Land			Consumer and Home Equity			Total
	(Unaudited; In thousands)
Beginning balance	$	633		$	589		$	1,022		$	1,055		$	2,177		$	62		$	154		$	208		$	5,900
Provision charged to expense		156			(46	)		98			(127	)		364			(28	)		177			56			650
Losses charged off		(32	)		---			(241	)		---			(39	)		---			(10	)		(35	)		(357	)
Recoveries		56			1			119			---			8			---			30			---			214
Ending balance		813			544			998			928			2,510			34			351			229			6,407
ALL individually evaluated		---			13			30			---			767			---			47			---			857
ALL collectively evaluated		813			531			968			928			1,743			34			304			229			5,550
Total ALL		813			544			998			928			2,510			34			351			229			6,407
Loans individually evaluated		---			1,035			3,648			533			6,246			---			820			90			12,372
Loans collectively evaluated		12,010			45,007			45,762			49,953			65,804			5,943			9,133			17,826			251,438
Total loans evaluated	$	12,010		$	46,042		$	49,410		$	50,486		$	72,050		$	5,943		$	9,953		$	17,916		$	263,810

Three Months Ended September 30, 2012	Commercial			Owner Occupied 1-4			Non-owner Occupied 1-4			Multi- family			Commercial Real Estate			Construction		Land			Consumer and Home Equity		Total
	(Unaudited; In thousands)
Beginning balance	$	684		$	432		$	1,118		$	888		$	1,859		$	8	$	120		$	159	$	5,268
Provision charged to expense		(61	)		159			(158	)		(9	)		524			19		(10	)		36		500
Losses charged off		---			(42	)		(45	)		---			(283	)		---		---			---		(370	)
Recoveries		8			---			3			1			---			---		72			---		84
Ending balance	$	631		$	549		$	918		$	880		$	2,100		$	27	$	182		$	195	$	5,482

Nine Months Ended September 30, 2012	Commercial			Owner Occupied 1-4			Non-owner Occupied 1-4			Multi- family			Commercial Real Estate			Construction			Land			Consumer and Home Equity			Total
	(Unaudited; In thousands)
Beginning balance	$	667		$	436		$	1,330		$	646		$	1,788		$	64		$	264		$	136		$	5,331
Provision charged to expense		400			171			(351	)		492			1,011			(37	)		(155	)		70			1,600
Losses charged off		(462	)		(58	)		(83	)		(259	)		(699	)		---			(16	)		(11	)		(1,588	)
Recoveries		26			---			22			1			---			---			89			---			138
Ending balance		631			549			918			880			2,100			27			182			195			5,482
ALL individually evaluated		2			36			27			---			290			---			---			5			360
ALL collectively evaluated		629			513			891			880			1,810			27			182			190			5,122
Total ALL		631			549			918			880			2,100			27			182			195			5,482
Loans individually evaluated		298			1,322			6,483			2,126			9,244			---			751			162			20,386
Loans collectively evaluated		11,169			48,950			45,310			62,079			78,262			7,131			4,634			17,854			275,389
Total loans evaluated	$	11,467		$	50,272		$	51,793		$	64,205		$	87,506		$	7,131		$	5,385		$	18,016		$	295,775

	Allowance for Loan Losses and Recorded Investment in Loans
At December 31, 2012	Commercial		Owner Occupied 1-4		Non-owner Occupied 1-4		Multi- family		Commercial Real Estate		Construction		Land		Consumer and Home Equity		Total
	(In thousands)

ALL individually evaluated	$	---	$	14	$	27	$	24	$	253	$	---	$	---	$	---	$	318
ALL collectively evaluated		633		575		993		1,031		1,924		62		154		208		5,582
Total ALL		633		589		1,021		1,055		2,177		62		154		208		5,900
Loans individually evaluated		49		1,653		5,917		2,891		6,233		---		1,379		92		18,214
Loans collectively evaluated		13,241		46,892		44,754		59,932		76,197		8,928		3,806		17,460		271,210
Total loans evaluated	$	13,290	$	48,545	$	50,671	$	62,823	$	82,430	$	8,928	$	5,185	$	17,552	$	289,424

Schedule of an analysis of loan quality based on property

The following table provides an analysis of loan quality using the above designations, based on property type at September 30, 2013.

Credit Rating	Commercial		Owner Occupied 1-4		Non-owner Occupied 1-4		Multi- family		Commercial Real Estate		Construction		Land		Consumer and Home Equity		Total
							(Unaudited; In thousands)

1 - Superior	$	22	$	3,353	$	228	$	---	$	98	$	--	$	268	$	1,614	$	5,583
2 - Good		1,236		20,620		3,614		1,771		10,358		2,717		1,854		11,440		53,610
3 - Pass Low risk		4,437		14,736		12,761		25,870		17,326		2,670		4,659		3,916		86,375
4 - Pass		3,757		5,362		24,040		15,285		26,218		556		1,792		909		77,919
4W - Watch		108		840		3,315		5,950		9,393		---		80		---		19,686
5 - Special mention		---		278		1,283		1,540		352		---		480		37		3,970
6 - Substandard		2,450		853		4,169		70		8,305		---		820		---		16,667
7 - Doubtful		---		---		---		---		---		---		---		---		---
8 - Loss		---		---		---		---		---		---		---		---		---
Total	$	12,010	$	46,042	$	49,410	$	50,486	$	72,050	$	5,943	$	9,953	$	17,916	$	263,810

The following table provides an analysis of loan quality using the above designations, based on property type at December 31, 2012.

Credit Rating	Commercial		Owner Occupied 1-4		Non-owner Occupied 1-4		Multi- family		Commercial Real Estate		Construction		Land		Consumer and Home Equity		Total
							(In thousands)

1 - Superior	$	27	$	3,849	$	246	$	---	$	103	$	667	$	193	$	1,787	$	6,872
2 - Good		3,061		20,104		4,299		7,661		10,924		1,123		172		11,311		58,655
3 - Pass Low risk		7,982		16,459		12,625		31,281		31,853		5,383		286		3,374		109,243
4 - Pass		1,689		6,221		24,623		18,010		22,993		1,755		1,387		1,078		77,756
4W - Watch		186		746		2,894		2,954		5,014		---		1,769		---		13,563
5 - Special mention		296		---		2,535		2,139		4,658		---		---		---		9,628
6 - Substandard		49		1,166		3,449		778		6,885		---		1,378		2		13,707
7 - Doubtful		---		---		---		---		---		---		---		---		---
8 - Loss		---		---		---		---		---		---		---		---		---
Total	$	13,290	$	48,545	$	50,671	$	62,823	$	82,430	$	8,928	$	5,185	$	17,552	$	289,424

Schedule of loan portfolio aging analysis

	Loan Portfolio Aging Analysis as of September 30, 2013 (Unaudited)
	30-59 Days		60-89 Days		Over 90 Days		Total Past Due		Current		Total Loans		Under 90 Days and Not Accruing		Total 90 Days and Accruing
	(In thousands)

Commercial	$	---	$	---	$	---	$	---	$	12,010	$	12,010	$	---	$	---
Owner occupied 1-4		---		88		4		92		45,950		46,042		658		---
Non-owner occupied 1-4		---		---		1,244		1,244		48,166		49,410		470		---
Multi-family		---		---		70		70		50,416		50,486		---		---
Commercial real estate		---		---		170		170		71,880		72,050		16		---
Construction		---		---		---		---		5,943		5,943		---		---
Land		---		---		130		130		9,823		9,953		---		---
Consumer and home equity		---		---		---		---		17,916		17,916		---		---
Total	$	---	$	88	$	1,618	$	1,706	$	262,104	$	263,810	$	1,144	$	---

	Loan Portfolio Aging Analysis as of December 31, 2012
	30-59 Days		60-89 Days		Over 90 Days		Total Past Due		Current		Total Loans		Under 90 Days and Not Accruing		Total 90 Days and Accruing
	(In thousands)

Commercial	$	---	$	---	$	49	$	49	$	13,241	$	13,290	$	---	$	---
Owner occupied 1-4		184		406		107		697		47,848		48,545		862		---
Non-owner occupied 1-4		291		216		2,124		2,631		48,040		50,671		543		---
Multi-family		700		78		---		778		62,045		62,823		76		---
Commercial real estate		---		---		487		487		81,943		82,430		815		---
Construction		---		---		---		---		8,928		8,928		---		---
Land		---		79		140		219		4,966		5,185		1,238		---
Consumer and home equity		1		2		---		3		17,549		17,552		2		---
Total	$	1,176	$	781	$	2,907	$	4,864	$	284,560	$	289,424	$	3,536	$	---

Schedule of impaired loans

	Impaired Loans as of and for the Quarter and Nine Months ended September 30, 2013 (Unaudited)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Quarterly Average Impaired Loans		Year-to-date Average Impaired Loans		Quarterly Interest Income Recognized		Year-to-date Interest Income Recognized
	(In thousands)
Loans without specific valuation allowance
Commercial	$	---	$	144	$	---	$	3	$	19	$	---	$	---
Owner occupied 1-4		906		1,019		---		1,033		1,249		24		21
Non-owner occupied 1-4		3,366		4,009		---		4,549		5,136		64		195
Multi-family		533		552		---		1,346		1,939		22		80
Commercial real estate		2,477		2,924		---		3,663		4,423		116		260
Construction		---		---		---		---		---		---		---
Land		725		990		---		725		890		17		---
Consumer and home equity		90		91		---		109		100		1		4
Total loans without a specific valuation allowance		8,097		9,729		---		11,428		13,756		244		560

Loans with a specific valuation allowance
Commercial		---		---		---		---		---		---		---
Owner occupied 1-4		129		133		13		129		129		2		2
Non-owner occupied 1-4		282		282		30		292		284		1		1
Multi-family		---		---		---		---		---		---		---
Commercial real estate		3,769		3,769		767		3,778		1,889		87		263
Construction		---		---		---		---		---		---		---
Land		95		95		47		100		50		1		2
Consumer and home equity		---		---		---		---		---		---		---
Total loans with a specific valuation allowance		4,275		4,279		857		4,299		2,352		91		268

Total
Commercial		---		144		---		3		19		---		---
Owner occupied 1-4		1,035		1,152		13		1,162		1,378		26		23
Non-owner occupied 1-4		3,648		4,291		30		4,841		5,420		65		196
Multi-family		533		552		---		1,346		1,939		22		80
Commercial real estate		6,246		6,693		767		7,441		6,312		203		523
Construction		---		---		---		---		---		---		---
Land		820		1,085		47		825		940		18		2
Consumer and home equity		90		91		---		109		100		1		4
Total impaired loans	$	12,372	$	14,008	$	857	$	15,727	$	16,108	$	335	$	828

	Impaired loans as of and for the Year Ended December 31, 2012						Impaired loans for the Quarter and Nine Months Ended September 30, 2012 (Unaudited)
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Quarterly Average Impaired Loans		Year-to-date Average Impaired Loans		Quarterly Interest Income Recognized		Year-to-date Interest Income Recognized
							(In thousands)
Loans without a specific valuation allowance
Commercial	$	49	$	521	$	---	$	63	$	698	$	---	$	4
Owner occupied 1-4		1,421		1,535		---		1,266		1,473		17		77
Non-owner occupied 1-4		5,636		5,900		---		6,176		6,627		60		217
Multi-family		2,813		2,865		---		1,935		2,782		29		122
Commercial real estate		4,667		5,720		---		7,301		7,952		70		250
Construction		---		---		---		---		---		---		---
Land		1,379		1,615		---		1,206		1,612		1		3
Consumer and home equity		92		114		---		158		177		2		6
Total loans without a specific valuation allowance		16,057		18,360		---		18,105		21,321		179		679

Loans with a specific valuation allowance
Commercial		---		---		---		235		179		5		7
Owner occupied 1-4		232		240		14		132		107		2		4
Non-owner occupied 1-4		281		281		27		340		369		1		3
Multi-family		78		83		24		200		304		---		---
Commercial real estate		1,566		1,567		253		2,405		2,849		12		40
Construction		---		---		---		---		---		---		---
Land		---		---		---		---		---		---		---
Consumer and home equity		---		---		---		3		1		---		---
Total loans with a specific valuation allowance		2,157		2,171		318		3,315		3,809		20		54

Total
Commercial		49		521		---		298		877		5		11
Owner occupied 1-4		1,653		1,775		14		1,393		1,580		20		80
Non-owner occupied 1-4		5,917		6,271		27		6,517		6,996		61		221
Multi-family		2,891		2,948		24		2,135		3,086		29		121
Commercial real estate		6,233		7,287		253		9,706		10,801		81		290
Construction		---		---		---		---		---		---		---
Land		1,379		1,615		---		1,206		1,613		1		4
Consumer and home equity		92		114		---		165		178		2		6
Total impaired loans	$	18,214	$	20,531	$	318	$	21,420	$	25,131	$	199	$	733

Schedule of breakdown of non-accruing loans

	(Unaudited)
	September 30, 2013		December 31, 2012
	(In thousands)
Commercial	$	---	$	49
Owner occupied 1-4		663		969
Non-owner occupied 1-4		1,713		2,667
Multi-family		70		76
Commercial real estate		186		1,302
Construction		---		---
Land		130		1,378
Consumer and home equity		---		2
Total	$	2,762	$	6,443

Schedule of newly classified troubled debt restructurings

	Newly restructured loans for the three months ended September 30, 2013 (Unaudited)
	Number of loans		Pre-modification Recorded Balance		Post-modification Recorded Balance		Type of Modification
	(Dollars in thousands)

Commercial		---	$	---	$	---		---
Owner occupied 1-4		---		---		---		---
Non-owner occupied 1-4		---		---		---		---
Multi-family		---		---		---		---
Commercial real estate		---		---		---		---
Construction		---		---		---		---
Land		1		95		95	Rate and term
Consumer and home equity		---		---		---		---
Total		1	$	95	$	95

	Newly restructured loans for the three months ended September 30, 2012 (Unaudited)
	Number of loans		Pre-modification Recorded Balance		Post-modification Recorded Balance		Type of Modification
	(Dollars in thousands)

Commercial		---	$	---	$	---		---
Owner occupied 1-4		1		87		87	Term
Non-owner occupied 1-4		---		---		---		---
Multi-family		---		---		---		---
Commercial real estate		---		---		---		---
Construction		---		---		---		---
Land		---		---		---		---
Consumer and home equity		---		---		---		---
Total		1	$	87	$	87

	Newly restructured loans for the nine months ended September 30, 2013 (Unaudited)
	Number of loans		Pre-modification Recorded Balance		Post-modification Recorded Balance		Type of Modification
	(Dollars in thousands)

Commercial		---	$	---	$	---		---
Owner occupied 1-4		1		38		38	Below market rate
Non-owner occupied 1-4		7		1,520		1,246	A/B note, payment adjustment, term
Multi-family		---		---		---		---
Commercial real estate		1		778		761	Term
Construction		---		---		---		---
Land		1		95		95	Rate and term
Consumer and home equity		1		29		29	Term
Total		11	$	2,460	$	2,169

	Newly restructured loans for the nine months ended September 30, 2012 (Unaudited)
	Number of loans		Pre-modification Recorded Balance		Post-modification Recorded Balance		Type of Modification
	(Dollars in thousands)

Commercial		---	$	---	$	---		---
Owner occupied 1-4		1		108		108	Below market rate
Owner-occupied 1-4		1		87		87	High loan-to-value
Non-owner occupied 1-4		---		---		---		---
Multi-family		---		---		---		---
Commercial real estate		2		345		345	Below market rate
Construction		---		---		---		---
Land		---		---		---		---
Consumer and home equity		---		---		---		---
Total		4	$	540	$	540

	Troubled debt restructurings that subsequently defaulted for the three months ended September 30, 2012 (Unaudited)			Troubled debt restructurings that subsequently defaulted for the nine months ended September 30, 2012 (Unaudited)
	Number of loans	Recorded Balance		Number of loans	Recorded Balance
	(Dollars in thousands)			(Dollars in thousands)

Commercial	---	$	---	1	$	125
Owner occupied 1-4	---		---	---		---
Non-owner occupied 1-4	---		---	---		---
Multi-family	---		---	---		---
Commercial Real Estate	1		1,374	1		1,374
Construction	---		---	---		---
Land	---		---	---		---
Consumer and home equity	---		--	---		---
Total	1	$	1,374	2	$	1,499