LOANS (Tables)

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Loan Balances

Year-end loans were as follows:

		2013		2012
Commercial	$	241,794	$	201,384
Residential real estate		283,356		278,286
Nonresidential real estate		571,221		573,101
Construction		103,019		104,498
Consumer		15,806		16,447
Municipal obligations		36,058		23,128
Gross loans		1,251,254		1,196,844
Less: Deferred loan origination fees and discount		(1,609)		(1,435)
Allowance for loan losses		(16,306)		(16,568)
Net loans	$	1,233,339	$	1,178,841

Certain of the Company’s directors and executive officers are loan customers of the Bank. A schedule of the aggregate activity in these loans follows:

		2013
Beginning balance	$	3,275
Effect of change in composition of board		300
New loans and advances on lines of credit		13,544
Loan payments		(12,725)
Ending balance	$	4,394

Allowance for Loan Losses and Recorded Investment in Loans by Portfolio Segment and Based on Impairment Method

The following table presents the activity in the allowance for loan losses by portfolio segment for the years ending December 31, 2013 and 2012:

						Non
				Residential		Residential						Municipal
December 31, 2013		Commercial		Real estate		Real estate		Construction		Consumer		Obligations		Total
Allowance for loan losses
Beginning balance	$	2,716	$	4,272	$	6,991	$	1,964	$	584	$	41	$	16,568
Provision for loan losses		1,029		2,317		1,577		(560)		286		51		4,700
Loans charged off		(582)		(2,244)		(2,151)		(319)		(792)		-		(6,088)
Recoveries		84		209		85		453		295		-		1,126
Total ending allowance balance	$	3,247	$	4,554	$	6,502	$	1,538	$	373	$	92	$	16,306
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	709	$	1,085	$	951	$	674	$	-	$	-	$	3,419
Collectively evaluated for impairment		2,538		3,469		5,551		864		373		92		12,887
Total ending allowance balance	$	3,247	$	4,554	$	6,502	$	1,538	$	373	$	92	$	16,306
Loans
Loans individually evaluated for impairment	$	4,116	$	8,179	$	14,220	$	2,549	$	-	$	-	$	29,064
Loans collectively evaluated for impairment		237,678		275,177		557,001		100,470		15,806		36,058		1,222,190
Total ending loan balance	$	241,794	$	283,356	$	571,221	$	103,019	$	15,806	$	36,058	$	1,251,254

						Non
				Residential		Residential						Municipal
December 31, 2012		Commercial		Real estate		Real estate		Construction		Consumer		Obligations		Total
Allowance for loan losses
Beginning balance	$	3,207	$	2,591	$	7,614	$	4,701	$	162	$	13	$	18,288
Provision for loan losses		303		3,831		1,955		(187)		1,070		28		7,000
Loans charged off		(975)		(2,196)		(2,817)		(3,554)		(941)		-		(10,483)
Recoveries		181		46		239		1,004		293		-		1,763
Total ending allowance balance	$	2,716	$	4,272	$	6,991	$	1,964	$	584	$	41	$	16,568
Ending allowance balance attributable to loans
Individually evaluated for impairment	$	1,266	$	970	$	2,540	$	1,369	$	120	$	-	$	6,265
Collectively evaluated for impairment		1,450		3,302		4,451		595		464		41		10,303
Total ending allowance balance	$	2,716	$	4,272	$	6,991	$	1,964	$	584	$	41	$	16,568
Loans
Loans individually evaluated for impairment	$	1,840	$	8,666	$	18,076	$	5,154	$	120	$	-	$	33,856
Loans collectively evaluated for impairment		199,544		269,620		555,025		99,344		16,327		23,128		1,162,988
Total ending loan balance	$	201,384	$	278,286	$	573,101	$	104,498	$	16,447	$	23,128	$	1,196,844
Activity in the allowance for loan losses as of December 31, 2011 was as follows:
					Non
			Residential		Residential						Municipal
December 31, 2011	Commercial		Real estate		Real estate		Construction		Consumer		Obligations		Total
Beginning balance	$	3,440	$	2,431	$	8,126	$	3,150	$	166	$	55	$	17,368
Provision for loan losses		1,919		1,330		3,400		3,616		527		(42)		10,750
Loans charged off		(2,236)		(1,214)		(4,076)		(2,066)		(908)		-		(10,500)
Recoveries		84		44		164		1		377		-		670
Total ending allowance balance	$	3,207	$	2,591	$	7,614	$	4,701	$	162	$	13	$	18,288

Individually Impaired Loans by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2013:

		Unpaid				Allowance for		Average		Interest		Cash Basis
		Principal		Recorded		Loan Losses		Recorded		Income		Interest
		Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded
Commercial	$	1,104	$	1,104	$	-	$	256	$	-	$	-
Residential real estate
Home equity lines of credit		-		-		-		15		-		-
Multifamily properties		1,308		958		-		605		-		-
Other		1,949		1,694		-		1,769		-		-
Nonresidential real estate
Owner occupied properties		1,032		1,032		-		2,113		-		-
Non owner occupied properties		3,873		3,823		-		4,284		-		-
Construction		-		-		-		386		-		-
Consumer		-		-		-		-		-		-
		9,266		8,611		-		9,428		-		-
With an allowance recorded
Commercial		3,012		3,012		709		2,974		104		93
Residential real estate
Home equity lines of credit		388		373		155		449		12		12
Multifamily properties		1,484		1,484		239		593		29		28
Other		3,776		3,670		691		4,930		74		71
Nonresidential real estate
Owner occupied properties		8,288		6,532		685		6,264		15		11
Non owner occupied properties		3,439		2,833		266		3,494		143		136
Construction		2,830		2,549		674		3,234		119		102
Consumer		-		-		-		-		-		-
		23,217		20,453		3,419		21,938		496		453
Total	$	32,483	$	29,064	$	3,419	$	31,366	$	496	$	453

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2012:

		Unpaid				Allowance for		Average		Interest		Cash Basis
		Principal		Recorded		Loan Losses		Recorded		Income		Interest
		Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded
Commercial	$	28	$	28	$	-	$	204	$	-	$	-
Residential real estate
Home equity lines of credit		50		50		-		50		-		-
Multifamily properties		-		-		-		211		-		-
Other		1,922		1,679		-		2,109		-		-
Nonresidential real estate
Owner occupied properties		-		-		-		623		-		-
Non owner occupied properties		5,056		4,551		-		3,417		-		-
Construction		-		-		-		256		-		-
Consumer		-		-		-		-		-		-
		7,056		6,308		-		6,870		-		-
With an allowance recorded
Commercial		1,812		1,812		1,266		1,075		20		18
Residential real estate
Home equity lines of credit		766		566		212		511		15		15
Multifamily properties		1,320		1,320		248		942		33		33
Other		5,196		5,051		510		3,670		121		106
Nonresidential real estate
Owner occupied properties		9,142		8,190		1,644		8,903		250		248
Non owner occupied properties		5,876		5,335		896		6,731		194		156
Construction		6,274		5,154		1,369		7,315		207		193
Consumer		120		120		120		15		1		1
		30,506		27,548		6,265		29,162		841		770
Total	$	37,562	$	33,856	$	6,265	$	36,032	$	841	$	770

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2011:

		Average		Interest		Cash Basis
		Principal		Recorded		Interest
		Balance		Investment		Recognized
With no related allowance recorded
Commercial	$	341	$	-	$	-
Residential real estate
Home equity lines of credit		6		-		-
Multifamily properties		80		-		-
Other		1,444		-		-
Nonresidential real estate
Owner occupied properties		635		-		-
Non owner occupied properties		1,013		-		-
Construction		570		-		-
Consumer		-		-		-
		4,089		-		-
With an allowance recorded
Commercial		1,718		18		10
Residential real estate
Home equity lines of credit		-		-		-
Multifamily properties		800		42		28
Other		2,663		78		73
Nonresidential real estate
Owner occupied properties		4,556		166		106
Non owner occupied properties		9,932		284		263
Construction		7,934		278		262
Consumer		-		-		-
		27,603		866		742
Total	$	31,962	$	866	$	742

Aging of Recorded Investment in Past Due Loans by Class of Loans

The following table presents the aging of the recorded investment in past due loans as of December 31, 2013 and 2012 by class of loans:

		Loans		Loans over
		30-90 days		90 days				Loans not
		past due		past due		Nonaccrual		past due		Total
December 31, 2013
Commercial	$	100	$	-	$	385	$	241,309	$	241,794
Residential real estate
Home equity lines of credit		550		-		622		97,786		98,958
Multifamily properties		-		-		-		67,964		67,964
Other residential real estate		3,693		-		4,738		108,003		116,434
Nonresidential real estate
Owner occupied properties		838		-		6,583		294,389		301,810
Non owner occupied properties		608		-		2,573		266,230		269,411
Construction		-		-		510		102,509		103,019
Consumer
Credit card balances		16		20		-		7,103		7,139
Other consumer		9		1		6		8,651		8,667
Municipal obligations		-		-		-		36,058		36,058
Total	$	5,814	$	21	$	15,417	$	1,230,002	$	1,251,254

		Loans		Loans over
		30-90 days		90 days				Loans not
		past due		past due		Nonaccrual		past due		Total
December 31, 2012
Commercial	$	1,668	$	-	$	740	$	198,976	$	201,384
Residential real estate
Home equity lines of credit		476		-		775		98,806		100,057
Multifamily properties		-		-		-		48,558		48,558
Other residential real estate		6,615		17		4,468		118,571		129,671
Nonresidential real estate
Owner occupied properties		2,809		-		7,000		278,362		288,171
Non owner occupied properties		2,788		-		5,138		277,004		284,930
Construction		738		-		1,075		102,685		104,498
Consumer
Credit card balances		32		22		-		6,905		6,959
Other consumer		5		-		48		9,435		9,488
Municipal obligations		-		-		-		23,128		23,128
Total	$	15,131	$	39	$	19,244	$	1,162,430	$	1,196,844

Loans by Class Modified as Troubled Debt Restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the year ending December 31, 2013 and 2012:

	2013					2012
			Pre-Modification	Post-Modification				Pre-Modification		Post-Modification
	Number		Outstanding	Outstanding		Number		Outstanding		Outstanding
	Of		Recorded	Recorded		Of		Recorded		Recorded
	Loans		Investment	Investment		Loans		Investment		Investment
Troubled Debt Restructurings:
Commercial	2	$	113	$	112	3	$	1,186	$	1,177
Residential real estate	-		-		-
Home equity lines of credit						-		-		-
Multifamily properties	2		2,455		2,443	-		-		-
Other residential real estate	4		1,001		998	4		1,182		1,180
Nonresidential real estate
Owner occupied properties	2		323		323	2		210		208
Non owner occupied properties	2		970		926	2		2,954		2,804
Construction	-		-		-	5		3,205		2,927
Consumer
Credit card balances	-		-		-	-		-		-
Other consumer	-		-		-	-		-		-
Municipal obligations	-		-		-	-		-		-
Total	12	$	4,862	$	4,802	16	$	8,737	$	8,296

Loans by Class Modified as Troubled Debt Restructurings for which there was Payment Default within Twelve Months Following Modification

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the period ending December 31, 2013 and 2012:

Troubled Debt Restructurings

That Subsequently Defaulted:

	2013			2012
Recorded	Number		Recorded	Number		Recorded
Investment	of Loans		Investment	of Loans		Investment
Commercial	3	$	170	1	$	152
Residential real estate
Home equity lines of credit
Multifamily properties	1		958	-		-
Other residential real estate	-		-	1		465
Nonresidential real estate
Owner occupied properties	1		144	2		6,591
Non owner occupied properties	3		2,302	3		3,081
Construction	4		1,465	3		1,695
Consumer
Credit card balances	-		-	-		-
Other consumer	-		-	-		-
Municipal obligations	-		-	-		-
Total	12	$	5,039	10	$	11,984

Risk Category of Loans by Class of Loans

As of December 31, 2013 and 2012, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

				Special
December 31, 2013		Pass		Mention		Substandard		Doubtful		Not Rated		Total
Commercial	$	226,021	$	4,736	$	11,037	$	-	$	-	$	241,794
Residential real estate
Home equity lines of credit		11,775		1,721		1,582		-		83,880		98,958
Multifamily properties		65,521		-		2,443		-		-		67,964
Other residential real estate		24,697		4,594		8,606		-		78,537		116,434
Nonresidential real estate
Owner occupied properties		271,281		9,058		21,471		-		-		301,810
Non owner occupied properties		256,328		5,216		7,867		-		-		269,411
Construction		97,738		2,264		3,017		-		-		103,019
Consumer
Credit card balances		-		-		-		-		7,139		7,139
Other consumer		-		-		4		-		8,663		8,667
Municipal obligations		36,058		-		-		-		-		36,058
Total	$	989,419	$	27,589	$	56,027	$	-	$	178,219	$	1,251,254

			Special
December 31, 2012	Pass		Mention		Substandard		Doubtful		Not Rated		Total
Commercial	$	188,686	$	8,469	$	4,229	$	-	$	-	$	201,384
Residential real estate
Home equity lines of credit		10,840		999		1,388		-		86,830		100,057
Multifamily properties		45,329		99		3,130		-		-		48,558
Other residential real estate		35,922		1,146		10,477		-		82,126		129,671
Nonresidential real estate
Owner occupied properties		258,816		13,648		15,707		-		-		288,171
Non owner occupied properties		264,442		8,098		12,390		-		-		284,930
Construction		96,154		2,264		6,080		-		-		104,498
Consumer
Credit card balances		-		-		-		-		6,959		6,959
Other consumer		-		-		141		-		9,347		9,488
Municipal obligations		23,128		-		-		-		-		23,128
Total	$	923,317	$	34,723	$	53,542	$	-	$	185,262	$	1,196,844