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LOANS
 3 Months Ended
Mar. 31, 2013
Accounting Policies [Abstract]  
LOANS

 

NOTE 3 - LOANS

The composition of loans receivable and loans held-for-sale is as follows:

(in thousands)   March 31, 2013   December 31, 2012
Residential 1-4 family   $ 209,159     $ 198,552  
Residential 5+ multifamily     4,714       3,889  
Construction of residential 1-4 family     1,395       2,379  
Home equity credit     33,925       34,162  
Residential real estate     249,193       238,982  
Commercial     96,835       87,382  
Construction of commercial     9,755       5,823  
Commercial real estate     106,590       93,205  
Farm land     4,282       4,320  
Vacant land     7,898       9,926  
Real estate secured     367,963       346,433  
Commercial and industrial     33,943       38,094  
Municipal     3,995       3,378  
Consumer     3,975       4,181  
Loans receivable, gross     409,876       392,086  
Deferred loan origination fees and costs, net     1,068       1,032  
Allowance for loan losses     (4,686 )     (4,360 )
Loans receivable, net   $ 406,258     $ 388,758  
Loans held-for-sale                
Residential 1-4 family   $ 710     $ 1,879  

Concentrations of Credit Risk

Salisbury's loans consist primarily of residential and commercial real estate loans located principally in northwestern Connecticut and nearby New York and Massachusetts towns, which constitute Salisbury's service area. Salisbury offers a broad range of loan and credit facilities to borrowers in its service area, including residential mortgage loans, commercial real estate loans, construction loans, working capital loans, equipment loans, and a variety of consumer loans, including home equity lines of credit, and installment and collateral loans. All residential and commercial mortgage loans are collateralized by first or second mortgages on real estate. The ability of single family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the market area and real estate values. The ability of commercial borrowers to honor their repayment commitments is dependent on the general economy as well as the health of the real estate economic sector in Salisbury’s market area.

Loan Credit Quality

The composition of loans receivable by risk rating grade is as follows:

(in thousands)   Pass   Special mention   Substandard   Doubtful   Loss   Total
March 31, 2013                                                
Residential 1-4 family   $ 189,694     $ 13,344     $ 6,023     $ 98     $ —     $ 209,159  
Residential 5+ multifamily     2,354       1,142       1,218       —       —       4,714  
Construction of residential 1-4 family     1,395       —       —       —       —       1,395  
Home equity credit     30,881       1,368       1,676       —       —       33,925  
Residential real estate     224,324       15,854       8,917       98       —       249,193  
Commercial     68,196       19,679       8,960       —       —       96,835  
Construction of commercial     8,989       153       613       —       —       9,755  
Commercial real estate     77,185       19,832       9,573       —       —       106,590  
Farm land     1,644       1,466       1,172       —       —       4,282  
Vacant land     4,425       189       3,284       —       —       7,898  
Real estate secured     307,578       37,341       22,946       98       —       367,963  
Commercial and industrial     24,049       8,532       1,362       —       —       33,943  
Municipal     3,995       —       —       —       —       3,995  
Consumer     3,851       101       23       —       —       3,975  
Loans receivable, gross   $ 339,473     $ 45,974     $ 24,331     $ 98     $ —     $ 409,876  

 

11
 

 

(in thousands)   Pass   Special mention   Substandard   Doubtful   Loss   Total
December 31, 2012                                                
Residential 1-4 family   $ 180,442     $ 12,473     $ 5,538     $ 99     $ —     $ 198,552  
Residential 5+ multifamily     2,872       773       244       —       —       3,889  
Construction of residential 1-4 family     1,570       —       809       —       —       2,379  
Home equity credit     30,981       1,848       1,333       —       —       34,162  
Residential real estate     215,865       15,094       7,924       99       —       238,982  
Commercial     64,817       13,299       9,266       —       —       87,382  
Construction of commercial     5,055       297       471       —       —       5,823  
Commercial real estate     69,872       13,596       9,737       —       —       93,205  
Farm land     2,799       341       1,180       —       —       4,320  
Vacant land     4,885       863       4,178       —       —       9,926  
Real estate secured     293,421       29,894       23,019       99       —       346,433  
Commercial and industrial     28,453       8,300       1,341       —       —       38,094  
Municipal     3,378       —       —       —       —       3,378  
Consumer     3,994       159       28       —       —       4,181  
Loans receivable, gross   $ 329,246     $ 38,353     $ 24,388     $ 99     $ —     $ 392,086  

The composition of loans receivable by delinquency status is as follows:

    Past due        
(in thousands)     Current       1-29 days       30-59 days       60-89 days       90-179 days       180 days and over       30 days and over       Accruing 90 days and over       Non- accrual  
March 31, 2013                                                                        
Residential 1-4 family   $ 199,921     $ 5,445     $ 549     $ 2,771     $ 356     $ 117     $ 3,793     $ 165     $ 2,880  
Residential 5+ multifamily     4,610       —       —       104       —       —       104       —       —  
Construction of residential
1-4 family		     1,395       —       —       —       —       —       —       —       —  
Home equity credit     33,241       153       495       36       —       —       531       —       113  
Residential real estate     239,167       5,598       1,044       2,911       356       117       4,428       165       2,993  
Commercial     91,560       2,817       76       1,024       424       934       2,458       198       2,043  
Construction of commercial     9,592       —       21       142       —       —       163       —       21  
Commercial real estate     101,152       2,817       97       1,166       424       934       2,621       198       2,064  
Farm land     3,110       785       14       373       —       —       387       —       —  
Vacant land     4,772       —       —       47       —       3,079       3,126       —       3,126  
Real estate secured     348,201       9,200       1,155       4,497       780       4,130       10,561       363       8,182  
Commercial and industrial     33,592       267       58       26       —       —       84       —       42  
Municipal     3,995       —       —       —       —       —       —       —       —  
Consumer     3,886       66       15       8       —       —       23       —       —  
Loans receivable, gross   $ 389,674     $ 9,533     $ 1,228     $ 4,531     $ 780     $ 4,130     $ 10,668     $ 165     $ 8,224  
December 31, 2012                                                                        
Residential 1-4 family   $ 190,488     $ 2,545     $ 3,578     $ 639     $ 1,185     $ 117     $ 5,519     $ —     $ 3,024  
Residential 5+ multifamily     3,889       —       —       —       —       —       —       —       —  
Construction of residential
1-4 family		     2,379       —       —       —       —       —       —       —       —  
Home equity credit     32,540       890       113       396       —       223       732       —       442  
Residential real estate     229,296       3,435       3,691       1,035       1,185       340       6,251       —       3,466  
Commercial     83,477       864       1,104       566       58       1,313       3,041       —       2,214  
Construction of commercial     5,659       —       164       —       —       —       164       —       21  
Commercial real estate     89,136       864       1,268       566       58       1,313       3,205       —       2,235  
Farm land     3,898       422       —       —       —       —       —       —       —  
Vacant land     5,932       —       —       48       740       3,206       3,994       —       3,994  
Real estate secured     328,262       4,721       4,959       1,649       1,983       4,859       13,450       —       9,695  
Commercial and industrial     37,618       351       26       99       —       —       125       —       164  
Municipal     3,378       —       —       —       —       —       —       —       —  
Consumer     4,034       108       25       14       —       —       39       —       —  
Loans receivable, gross   $ 373,292     $ 5,180     $ 5,010     $ 1,762     $ 1,983     $ 4,859     $ 13,614     $ —     $ 9,859  

 

12
 

Troubled Debt Restructurings

Troubled debt restructurings occurring during the periods are as follows:

    Three months ended March 31, 2013   Three months ended March 31, 2012
(in thousands)   Quantity   Pre-modification balance   Post-modification balance   Quantity   Pre-modification balance   Post-modification balance
Residential real estate     —     $ —     $ —       1     $ 326     $ 326  
Commercial real estate     2       1,022       1,022       5       559       559  
Commercial and industrial     —       —       —       —       —       —  
Troubled debt restructurings     2     $ 1,022     $ 1,022       6     $ 1,105     $ 1,105  
Rate reduction and term extension     2     $ 1,022     $ 1,022       2     $ 373     $ 373  
Debt consolidation and term extension     —       —       —       3       706       706  
Seasonal interest only concession     —       —       —       1       26       26  
Troubled debt restructurings     2     $ 1,022     $ 1,022       6     $ 1,105     $ 1,105  

Two loans were restructured during the quarter ended March 31, 2013 and both were current at March 31, 2013.

Allowance for Loan Losses

Changes in the allowance for loan losses are as follows:

    March 31, 2013     March 31, 2012  
Three months ended
(in thousands)		     Beginning balance       Provision       Charge-offs       Recoveries       Ending balance       Beginning balance       Provision       Charge-offs       Recoveries       Ending balance  
Residential   $ 1,934     $ 23     $ (18 )   $ —     $ 1,939     $ 1,479     $ 39     $ (18 )   $ —     $ 1,500  
Commercial     1,059       178       —       —       1,237       1,139       (79 )     —       1       1,061  
Land     301       265       (38 )     —       528       410       (29 )     (42 )     —       339  
Real estate     3,294       466       (56 )     —       3,704       3,028       (69 )     (60 )     1       2,900  
Commercial & industrial     499       (40 )     (4 )     —       455       704       100       (29 )     3       778  
Municipal     36       4       —       —       40       24       4       —       —       28  
Consumer     91       (15 )     (13 )     3       66       79       59       (10 )     5       133  
Unallocated     440       (19 )     —       —       421       241       86       —       —       327  
Totals   $ 4,360     $ 396     $ (73 )   $ 3     $ 4,686     $ 4,076     $ 180     $ (99 )   $ 9     $ 4,166  

 

13
 

The composition of loans receivable and the allowance for loan losses is as follows:

    Collectively evaluated   Individually evaluated   Total portfolio
(in thousands)     Loans       Allowance       Loans       Allowance       Loans       Allowance  
March 31, 2013                                                
Residential 1-4 family   $ 202,490     $ 794     $ 6,669     $ 643     $ 209,159     $ 1,437  
Residential 5+ multifamily     3,743       21       971       50       4,714       71  
Construction of residential 1-4 family     1,395       6       —       —       1,395       6  
Home equity credit     33,741       424       184       1       33,925       425  
Residential real estate     241,369       1,245       7,824       694       249,193       1,939  
Commercial     91,276       1,045       5,559       88       96,835       1,133  
Construction of commercial     9,734       104       21       —       9,755       104  
Commercial real estate     101,010       1,149       5,580       88       106,590       1,237  
Farm land     4,282       68       —       —       4,282       68  
Vacant land     4,773       58       3,125       402       7,897       460  
Real estate secured     351,434       2,520       16,529       1,184       367,962       3,704  
Commercial and industrial     32,952       426       991       29       33,943       455  
Municipal     3,995       40       —       —       3,995       40  
Consumer     3,898       36       77       30       3,975       66  
Unallocated allowance     —       —       —       —       —       421  
Totals   $ 392,279     $ 3,022     $ 17,597     $ 1,243     $ 409,876     $ 4,686  
    Collectively evaluated   Individually evaluated   Total portfolio
(in thousands)     Loans       Allowance       Loans       Allowance       Loans       Allowance  
December 31, 2012                                                
Residential 1-4 family   $ 191,886     $ 743     $ 6,666     $ 652     $ 198,552     $ 1,395  
Residential 5+ multifamily     2,913       22       976       50       3,889       72  
Construction of residential 1-4 family     2,379       10       —       —       2,379       10  
Home equity credit     33,697       365       465       92       34,162       457  
Residential real estate     230,875       1,140       8,107       794       238,982       1,934  
Commercial     81,635       931       5,747       64       87,382       995  
Construction of commercial     5,802       64       21       —       5,823       64  
Commercial real estate     87,437       995       5,768       64       93,205       1,059  
Farm land     4,320       66       —       —       4,320       66  
Vacant land     5,795       70       4,131       164       9,926       234  
Real estate secured     328,427       2,271       18,006       1,022       346,433       3,293  
Commercial and industrial     37,073       467       1,021       32       38,094       499  
Municipal     3,378       36       —       —       3,378       36  
Consumer     4,061       39       120       53       4,181       92  
Unallocated allowance     —       —       —       —       —       440  
Totals   $ 372,939     $ 2,813     $ 19,147     $ 1,107     $ 392,086     $ 4,360  

The credit quality segments of loans receivable and the allowance for loan losses are as follows:

(in thousands)   Collectively evaluated   Individually evaluated   Total portfolio
      Loans       Allowance       Loans       Allowance       Loans       Allowance  
March 31, 2013                                                
Performing loans   $ 382,423     $ 2,687     $ 77     $ 30     $ 382,500     $ 2,717  
Potential problem loans     9,856       335       2,558       86       12,414       421  
Impaired loans     —       —       14,962       1,127       14,962       1,127  
Unallocated allowance     —       —       —       —       —       421  
Totals   $ 392,279     $ 3,022     $ 17,597     $ 1,243     $ 409,876     $ 4,686  
December 31, 2012                                                
Performing loans   $ 364,594     $ 2,567     $ 121     $ 52     $ 364,713     $ 2,619  
Potential problem loans     8,345       246       2,465       131       10,810       377  
Impaired loans     —       —       16,562       924       16,563       924  
Unallocated allowance     —       —       —       —       —       440  
Totals   $ 372,939     $ 2,813     $ 19,148     $ 1,107     $ 392,086     $ 4,360  

 

14
 

Certain data with respect to impaired loans individually evaluated is as follows:

    Impaired loans with specific allowance     Impaired loans with no specific allowance  
    Loan balance                     Loan balance          
(in thousands)     Book       Note       Average       Specific allowance       Income recognized       Book       Note       Average       Income recognized  
March 31, 2013                                                                        
Residential 1-4 family   $ 3,917     $ 3,998     $ 3,868     $ 631     $ 17     $ 2,073     $ 2,279     $ 2,161     $ 10  
Home equity credit     48       48       223       1       —       113       118       109       —  
Residential real estate     3,965       4,046       4,091       632       17       2,186       2,396       2,270       10  
Commercial     1,695       1,860       1,665       88       14       3,122       3,320       3,096       26  
Vacant land     3,187       3,387       3,187       403       —       (61 )     601       527       —  
Real estate secured     8,847       9,293       8,943       1,123       31       5,247       6,317       5,893       36  
Commercial and industrial     227       257       257       4       3       641       1,043       669       9  
Consumer     —       —       —       —       —       —       —       —       —  
Totals   $ 9,074     $ 9,550     $ 9,200     $ 1,127     $ 34     $ 5,888     $ 7,360     $ 6,562     $ 45  

 

    Impaired loans with specific allowance     Impaired loans with no specific allowance  
    Loan balance                     Loan balance          
(in thousands)     Book       Note       Average       Specific allowance       Income recognized       Book       Note       Average       Income recognized  
December 31, 2012                                                                        
Residential 1-4 family   $ 3,857     $ 3,925     $ 2,404     $ 578     $ 77     $ 2,263     $ 2,460     $ 1,601     $ 34  
Home equity credit     351       351       146       92       —       91       93       203       —  
Residential real estate     4,208       4,276       2,550       670       77       2,354       2,553       1,804       34  
Commercial     1,629       1,784       1,925       64       60       3,381       3,576       3,122       82  
Vacant land     3,186       3,387       1,455       158       —         808       1,467       2,358       4  
Real estate secured     9,023       9,447       5,930       892       137       6,543       7,596       7,284       120  
Commercial and industrial     335       368       833       32       13       661       1,063       854       31  
Consumer     —       —       —       —       —       —       —       —       —  
Totals   $ 9,358     $ 9,815     $ 6,763     $ 924     $ 150     $ 7,204     $ 8,659     $ 8,138     $ 151