Allowance for Loan Losses

3 Months Ended

Mar. 31, 2012

Loans and Allowance for Loan Losses [Abstract]

Allowance for Loan Losses

Note 5 – Allowance for Loan Losses

The following tables summarize the activity in the allowance for loan losses, and ending balance of loans, net of unearned fees for the periods indicated.

	Allowance for Loan Losses – Three months ended March 31, 2012
	RE Mortgage						Home Equity						Auto Indirect			Other Consum.			C&I			Construction					Total
(In thousands)	Resid.			Comm.			Lines			Loans												Resid.			Comm.
Beginning balance	$	2,404		$	13,217		$	18,258		$	1,101		$	215		$	932		$	6,545		$	1,817		$	1,425	$	45,914
Charge-offs		(223	)		(1,305	)		(2,625	)		(41	)		(40	)		(339	)		(281	)		(68	)		—		(4,922	)
Recoveries		—			36			63			3			57			255			50			—			—		464
Provision		976			(1,967	)		6,336			204			343			(248	)		(1,764	)		(77	)		193		3,996
Ending balance	$	3,157		$	9,981		$	22,032		$	1,267		$	575		$	600		$	4,550		$	1,672		$	1,618	$	45,452
Ending balance:
Individ. evaluated for impairment	$	582		$	1,041		$	1,578		$	59		$	14		$	17		$	357		$	80		$	1,048	$	4,776
Loans pooled for evaluation	$	2,463		$	8,939		$	18,949		$	1,096		$	560		$	584		$	2,563		$	625		$	110	$	35,889
Loans acquired with deteriorated credit quality	$	113			—		$	1,505		$	111			—			—		$	1,630		$	967		$	461	$	4,787
	Loans, net of unearned fees – As of March 31, 2012
	RE Mortgage						Home Equity						Auto Indirect			Other Consum.			C&I			Construction					Total
(In thousands)	Resid.			Comm.			Lines			Loans												Resid.			Comm.
Ending balance:
Total loans	$	130,500		$	816,859		$	350,062		$	14,559		$	8,397		$	23,671		$	128,343		$	22,364		$	16,330	$	1,511,085
Individ. evaluated for impairment	$	10,490		$	69,817		$	8,777		$	549		$	404		$	177		$	9,286		$	5,606		$	7,114	$	112,220
Loans pooled for evaluation	$	113,808		$	714,579		$	327,018		$	13,805		$	7,993		$	23,446		$	106,689		$	7,569		$	5,552	$	1,320,459
Loans acquired with deteriorated credit quality	$	6,202		$	32,463		$	14,267		$	205			—		$	48		$	12,368		$	9,189		$	3,664	$	78,406

	Allowance for Loan Losses – Three months ended March 31, 2011
	RE Mortgage						Home Equity					Auto Indirect			Other Consum.			C&I			Construction						Total
(In thousands)	Resid.			Comm.			Lines			Loans											Resid.			Comm.
Beginning balance	$	3,007		$	12,700		$	15,054		$	795	$	1,229		$	701		$	5,991		$	1,824		$	1,270		$	42,571
Charge-offs		(1,125	)		(368	)		(3,601	)		—		(135	)		(229	)		(1,556	)		(35	)		—			(7,049	)
Recoveries		112			28			161			2		127			209			21			2			39			701
Provision		1,550			(333	)		4,682			114		(740	)		23			2,511			(396	)		(410	)		7,001
Ending balance	$	3,544		$	12,027		$	16,296		$	911	$	481		$	704		$	6,967		$	1,395		$	899		$	43,224
Ending balance:
Individ. evaluated for impairment	$	1,055		$	917		$	1,772		$	14	$	161		$	16		$	166		$	136		$	595		$	4,832
Loans pooled for evaluation	$	2,471		$	10,953		$	13,972		$	897	$	319		$	689		$	4,781		$	1,258		$	143		$	35,483
Loans acquired with deteriorated credit quality	$	18		$	157		$	553			—		—			—		$	2,020			—		$	161		$	2,909

	Loans, net of unearned fees – As of March 31, 2011
	RE Mortgage				Home Equity				Auto Indirect		Other Consum.		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
Ending balance:
Total loans	$	128,474	$	695,089	$	335,682	$	16,035	$	20,240	$	16,185	$	131,242	$	23,772	$	20,941	$	1,387,660
Individ. evaluated for impairment	$	12,735	$	55,867	$	9,091	$	779	$	1,125	$	77	$	5,158	$	6,756	$	7,471	$	99,059
Loans pooled for evaluation	$	109,338	$	614,255	$	319,471	$	15,256	$	19,115	$	16,108	$	117,068	$	12,535	$	13,470	$	1,236,616
Loans acquired with deteriorated credit quality	$	6,401	$	24,967	$	7,120		—		—		—	$	9,016	$	4,481		—	$	51,985

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio.

The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows:

• Pass – This grade represents loans ranging from acceptable to very little or no credit risk. These loans typically meet most if not all policy standards in regard to: loan amount as a percentage of collateral value, debt service coverage, profitability, leverage, and working capital.

• Special Mention – This grade represents “Other Assets Especially Mentioned” in accordance with regulatory guidelines and includes loans that display some potential weaknesses which, if left unaddressed, may result in deterioration of the repayment prospects for the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention.

• Substandard – This grade represents “Substandard” loans in accordance with regulatory guidelines. Loans within this rating typically exhibit weaknesses that are well defined to the point that repayment is jeopardized. Loss potential is, however, not necessarily evident. The underlying collateral supporting the credit appears to have sufficient value to protect the Company from loss of principal and accrued interest, or the loan has been written down to the point where this is true. There is a definite need for a well defined workout/rehabilitation program.

• Doubtful – This grade represents “Doubtful” loans in accordance with regulatory guidelines. An asset classified as Doubtful has all the weaknesses inherent in a loan classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and financing plans.

• Loss – This grade represents “Loss” loans in accordance with regulatory guidelines. A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan, even though some recovery may be affected in the future. The portion of the loan that is graded loss should be charged off no later than the end of the quarter in which the loss is identified.

The following tables present ending loan balances by loan category and risk grade as of the dates indicated:

	Credit Quality Indicators – As of March 31, 2012
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
Originated loans:
Pass	$	100,541	$	580,788	$	297,041	$	12,760	$	6,748	$	19,952	$	98,541	$	6,874	$	5,215	$	1,128,460
Special mention		2,048		40,584		6,894		616		951		610		7,457		43		571		59,774
Substandard		13,020		73,977		12,051		615		698		175		8,585		6,256		6,880		122,257
Loss		—		—		1		—		—		—		—		2		—		3
Total Originated loans	$	115,609	$	695,349	$	315,987	$	13,991	$	8,397	$	20,737	$	114,583	$	13,175	$	12,666	$	1,310,494
PNCI loans:
Pass	$	8,427	$	81,623	$	18,482	$	363		—	$	2,700	$	1,392		—		—	$	112,987
Special mention		—		5,167		1,042		—		—		106		—		—		—		6,315
Substandard		262		2,257		284		—		—		80		—		—		—		2,883
Loss		—		—		—		—		—		—		—		—		—		—
Total PNCI loans	$	8,689	$	89,047	$	19,808	$	363		—	$	2,886	$	1,392		—		—	$	122,185
PCI loans	$	6,202	$	32,463	$	14,267	$	205		—	$	48	$	12,368	$	9,189	$	3,664	$	78,406
Total loans	$	130,500	$	816,859	$	350,062	$	14,559	$	8,397	$	23,671	$	128,343	$	22,364	$	16,330	$	1,511,085

	Credit Quality Indicators – As of December 31, 2011
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
Originated loans:
Pass	$	103,611	$	574,167	$	305,290	$	13,478	$	9,686	$	19,871	$	107,877	$	6,872	$	5,387	$	1,146,239
Special mention		1,020		46,518		1,295		—		33		10		6,709		903		430		56,918
Substandard		13,689		78,997		15,249		842		1,102		389		8,900		6,133		6,927		132,228
Total Originated loans	$	118,320	$	699,682	$	321,834	$	14,320	$	10,821	$	20,270	$	123,486	$	13,908	$	12,744	$	1,335,385
PNCI loans:
Pass	$	14,576	$	83,735	$	20,053	$	367		—	$	3,034	$	1,707		—		—	$	123,472
Special mention		—		9,693		548		—		—		4		—		—		—		10,245
Substandard		174		—		301		—		—		3		98		—		—		576
Total PNCI loans	$	14,750	$	93,428	$	20,902	$	367		—	$	3,041	$	1,805		—		—	$	134,293
PCI loans	$	6,516	$	33,226	$	14,569	$	157		—	$	49	$	13,840	$	8,214	$	4,783	$	81,354
Total loans	$	139,586	$	826,336	$	357,305	$	14,844	$	10,821	$	23,360	$	139,131	$	22,122	$	17,527	$	1,551,032

Consumer loans, whether unsecured or secured by real estate, automobiles, or other personal property, are primarily susceptible to three primary risks; non-payment due to income loss, over-extension of credit and, when the borrower is unable to pay, shortfall in collateral value. Typically non-payment is due to loss of job and will follow general economic trends in the marketplace driven primarily by rises in the unemployment rate. Loss of collateral value can be due to market demand shifts, damage to collateral itself or a combination of the two.

Problem consumer loans are generally identified by payment history of the borrower (delinquency) or significant changes in the borrower’s credit rating. Current credit scores are obtained for all consumer loans on a quarterly basis, and risk ratings are adjusted appropriately. The Bank manages its consumer loan portfolios by monitoring delinquency and contacting borrowers to encourage repayment, suggest modifications if appropriate, and, when continued scheduled payments become unrealistic, initiate repossession or foreclosure through appropriate channels. Collateral values may be determined by appraisals obtained through Bank approved, licensed appraisers, qualified independent third parties, public value information (blue book values for autos), sales invoices, or other appropriate means. Appropriate valuations are obtained at initiation of the credit and periodically (every 3-12 months depending on collateral type) once repayment is questionable and the loan has been classified.

Commercial real estate loans generally fall into two categories, owner-occupied and non-owner occupied. Loans secured by owner occupied real estate are primarily susceptible to changes in the business conditions of the related business. This may be driven by, among other things, industry changes, geographic business changes, changes in the individual fortunes of the business owner, and general economic conditions and changes in business cycles. These same risks apply to commercial loans whether secured by equipment or other personal property or unsecured. Losses on loans secured by owner occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral. When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default. Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often these shifts are a result of changes in general economic or market conditions or overbuilding and resultant over-supply. Losses are dependent on value of underlying collateral at the time of default. Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs.

Construction loans, whether owner occupied or non-owner occupied commercial real estate loans or residential development loans, are not only susceptible to the related risks described above but the added risks of construction itself including cost over-runs, mismanagement of the project, or lack of demand or market changes experienced at time of completion. Again, losses are primarily related to underlying collateral value and changes therein as described above.

Problem commercial loans are generally identified by periodic review of financial information which may include financial statements, tax returns, rent rolls and payment history of the borrower (delinquency). Based on this information the Bank may decide to take any of several courses of action including demand for repayment, additional collateral or guarantors, and, when repayment becomes unlikely through borrower’s income and cash flow, repossession or foreclosure of the underlying collateral.

Collateral values may be determined by appraisals obtained through Bank approved, licensed appraisers, qualified independent third parties, public value information (blue book values for autos), sales invoices, or other appropriate means. Appropriate valuations are obtained at initiation of the credit and periodically (every 3-12 months depending on collateral type) once repayment is questionable and the loan has been classified.

Once a loan becomes delinquent and repayment becomes questionable, a Bank collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Bank will estimate its probable loss, using a recent valuation as appropriate to the underlying collateral less estimated costs of sale, and charge the loan down to the estimated net realizable amount. Depending on the length of time until ultimate collection, the Bank may revalue the underlying collateral and take additional charge-offs as warranted. Revaluations may occur as often as every 3-12 months depending on the underlying collateral and volatility of values. Final charge-offs or recoveries are taken when collateral is liquidated and actual loss is known. Unpaid balances on loans after or during collection and liquidation may also be pursued through lawsuit and attachment of wages or judgment liens on borrower’s other assets.

The following table shows the ending balance of current, past due, and nonaccrual originated loans by loan category as of the date indicated:

	Analysis of Past Due and Nonaccrual Originated Loans – As of March 31, 2012
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
Originated loan balance:
Past due:
30-59 Days	$	3,051	$	6,641	$	1,638	$	79	$	138	$	8	$	481	$	220	$	161	$	12,417
60-89 Days		221		3,118		2,476		393		14		3		811		97		—		7,133
> 90 Days		2,134		11,125		2,303		35		105		10		4,902		780		39		21,433
Total past due		5,406		20,884		6,417		507		257		21		6,194		1,097		200		40,983
Current		110,203		674,465		309,570		13,484		8,140		20,716		108,389		12,078		12,466		1,269,511
Total Originated loans	$	115,609	$	695,349	$	315,987	$	13,991	$	8,397	$	20,737	$	114,583	$	13,175	$	12,666	$	1,310,494
> 90 Days and still accruing		—		—		—		—		—		—	$	111		—		—	$	111
Nonaccrual loans	$	8,296	$	41,040	$	7,001	$	485	$	348	$	100	$	7,085	$	5,647	$	651	$	70,653

The following table shows the ending balance of current, past due, and nonaccrual PNCI loans by loan category as of the date indicated:

	Analysis of Past Due and Nonaccrual PNCI Loans – As of March 31, 2012
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
PNCI loan balance:
Past due:
30-59 Days	$	4,592	$	462	$	521		—		—		—		—		—		—	$	5,575
60-89 Days		175		—		226		—		—		—		—		—		—		401
> 90 Days		—		—		53		—		—		—		—		—		—		53
Total past due		4,767		462		800		—		—		—		—		—		—		6,029
Current		3,922		88,585		19,008		363		—		2,886		1,392		—		—		116,156
Total PNCI loans	$	8,689	$	89,047	$	19,808	$	363		—	$	2,886	$	1,392		—		—	$	122,185
> 90 Days and still accruing		—		—		—		—		—		—		—		—		—		—
Nonaccrual loans		—	$	1,693	$	406		—		—	$	47		—		—		—	$	2,146

The following table shows the ending balance of current, past due, and nonaccrual originated loans by loan category as of the date indicated:

	Analysis of Past Due and Nonaccrual Originated Loans – As of December 31, 2011
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
Originated loan balance:
Past due:
30-59 Days	$	1,715	$	7,509	$	2,586	$	52	$	181	$	46	$	683	$	921		—	$	13,693
60-89 Days		750		1,171		2,629		281		56		153		1,334		92		—		6,466
> 90 Days		3,279		9,892		3,129		114		130		5		4,929		2,088		—		23,566
Total past due		5,744		18,572		8,344		447		367		204		6,946		3,101		—		43,725
Current		112,576		681,110		313,490		13,873		10,454		20,066		116,540		10,807		12,744		1,291,660
Total Originated loans	$	118,320	$	699,682	$	321,834	$	14,320	$	10,821	$	20,270	$	123,486	$	13,908	$	12,744	$	1,335,385
> 90 Days and still accruing		—	$	500		—		—		—		—		—		—		—	$	500
Nonaccrual loans	$	8,525	$	43,765	$	8,307	$	509	$	509	$	109	$	7,257	$	5,627	$	667	$	75,275

The following table shows the ending balance of current, past due, and nonaccrual PNCI loans by loan category as of the date indicated:

	Analysis of Past Due and Nonaccrual PNCI Loans – As of December 31, 2011
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
PNCI loan balance:
Past due:
30-59 Days		—	$	118	$	63		—		—		—		—		—		—	$	181
60-89 Days	$	76		—		39		—		—		—		—		—		—		115
> 90 Days		—		420		14		—		—		—		—		—		—		434
Total past due		76		538		116		—		—		—		—		—		—		730
Current		14,674		92,890		20,786	$	367		—	$	3,041	$	1,805		—		—		133,563
Total PNCI loans	$	14,750	$	93,428	$	20,902	$	367		—	$	3,041	$	1,805		—		—	$	134,293
> 90 Days and still accruing		—	$	420		—		—		—		—		—		—		—	$	420
Nonaccrual loans		—		—	$	110		—		—		—		—		—		—	$	110

Impaired originated loans are those where management has concluded that it is probable that the borrower will be unable to pay all amounts due under the contractual terms. The following tables show the recorded investment (financial statement balance), unpaid principal balance, average recorded investment, and interest income recognized for impaired Originated and PNCI loans, segregated by those with no related allowance recorded and those with an allowance recorded for the periods indicated.

	Impaired Originated Loans – As of March 31, 2012
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
With no related allowance recorded:
Recorded investment	$	7,288	$	61,224	$	4,039	$	188	$	311	$	55	$	8,453	$	4,631	$	629	$	86,818
Unpaid principal	$	9,377	$	72,273	$	6,755	$	488	$	568	$	80	$	9,110	$	9,642	$	953	$	109,246
Average recorded Investment	$	8,079	$	52,833	$	5,053	$	479	$	467	$	44	$	6,597	$	5,315	$	3,570	$	82,437
Interest income Recognized	$	22	$	375	$	4	$	1	$	1		—	$	33		—	$	3	$	439
With an allowance recorded:
Recorded investment	$	3,040	$	6,521	$	4,332	$	361	$	93	$	45	$	833	$	975	$	6,485	$	22,685
Unpaid principal	$	3,524	$	7,010	$	5,389	$	720	$	117	$	47	$	873	$	2,071	$	6,523	$	26,274
Related allowance	$	559	$	1,043	$	1,498	$	59	$	14	$	17	$	357	$	78	$	1,048	$	4,673
Average recorded Investment	$	3,399	$	10,714	$	3,690	$	188	$	297	$	46	$	704	$	815	$	3,725	$	23,578
Interest income Recognized	$	6	$	62	$	11		—		—		—	$	7	$	2	$	94	$	182

	Impaired PNCI Loans – As of March 31, 2012
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
With no related allowance recorded:
Recorded investment		—	$	2,072	$	326		—		—	$	77		—		—		—	$	2,475
Unpaid principal		—	$	2,075	$	363		—		—	$	78		—		—		—	$	2,516
Average recorded Investment		—	$	1,036	$	163		—		—	$	39		—		—		—	$	1,238
Interest income Recognized		—	$	26		—		—		—	$	1		—		—		—	$	27
With an allowance recorded:
Recorded investment	$	162		—	$	80		—		—		—		—		—		—	$	242
Unpaid principal	$	162		—	$	84		—		—		—		—		—		—	$	246
Related allowance	$	23		—	$	80		—		—		—		—		—		—	$	103
Average recorded Investment	$	81		—	$	40		—		—		—		—		—		—	$	121
Interest income Recognized	$	3		—		—		—		—		—		—		—		—	$	3

The following tables show the recorded investment (financial statement balance), unpaid principal balance, average recorded investment, and interest income recognized for impaired Originated and PNCI loans, segregated by those with no related allowance recorded and those with an allowance recorded for the periods indicated.

	Impaired Originated Loans – As of December 31, 2011
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction					Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.			Comm.
With no related allowance recorded:
Recorded investment	$	6,921	$	61,205	$	5,101	$	224	$	424	$	39	$	8,473	$	1,809		$	571	$	84,767
Unpaid principal	$	8,663	$	72,408	$	8,519	$	528	$	777	$	56	$	9,229	$	2,857		$	916	$	103,953
Average recorded Investment	$	6,557	$	53,346	$	5,228	$	458	$	569	$	44	$	6,687	$	3,942		$	3,590	$	80,421
Interest income Recognized	$	58	$	2,235	$	99	$	7	$	15	$	2	$	381		—		$	4	$	2,801
With an allowance recorded:
Recorded investment	$	3,246	$	10,688	$	4,177	$	350	$	147	$	70	$	964	$	3,818		$	6,328	$	29,788
Unpaid principal	$	3,760	$	11,094	$	4,977	$	666	$	193	$	75	$	1,040	$	8,698		$	6,330	$	36,833
Related allowance	$	460	$	1,613	$	2,365	$	73	$	29	$	24	$	200	$	258		$	971	$	5,993
Average recorded Investment	$	4,611	$	10,019	$	4,770	$	215	$	407	$	52	$	1,023	$	2,334		$	3,578	$	27,009
Interest income Recognized	$	77	$	588	$	122	$	3	$	2	$	2	$	36	$	(16	)	$	387	$	1,201

	Impaired PNCI Loans – As of December 31, 2011
	RE Mortgage				Home Equity				Auto Indirect		Other Consumer		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
With no related allowance recorded:
Recorded investment		—		—	$	110	$	87		—		—	$	89		—		—	$	286
Unpaid principal		—		—	$	126	$	89		—		—	$	98		—		—	$	313
Average recorded Investment		—		—	$	55	$	44		—		—	$	45		—		—	$	144
Interest income Recognized		—		—	$	5	$	2		—		—	$	3		—		—	$	10
With an allowance recorded:
Recorded investment		—		—		—		—		—		—		—		—		—		—
Unpaid principal		—		—		—		—		—		—		—		—		—		—
Related allowance		—		—		—		—		—		—		—		—		—		—
Average recorded Investment		—		—		—		—		—		—		—		—		—		—
Interest income Recognized		—		—		—		—		—		—		—		—		—		—

At March 31, 2012, $67,348,000 of Originated loans were TDR and classified as impaired. The Company had obligations to lend $333,000 of additional funds on these TDR as of March 31, 2012. At March 31, 2012, $495,000 of PNCI loans were TDR and classified as impaired. The Company had no obligations to lend additional funds on these TDR as of March 31, 2012.

At December 31, 2011, $66,160,000 of Originated loans were TDR and classified as impaired. The Company had obligations to lend $258,000 of additional funds on these TDR as of December 31, 2011. At December 31, 2011, $176,000 of PNCI loans were TDR and classified as impaired. The Company had no obligations to lend additional funds on these TDR as of December 31, 2011.

The following tables show the recorded investment (financial statement balance), unpaid principal balance, average recorded investment, and interest income recognized for impaired Originated loans, segregated by those with no related allowance recorded and those with an allowance recorded for the periods indicated.

	Impaired Originated Loans – As of March 31, 2011
	RE Mortgage				Home Equity				Auto Indirect		Other Consum.		C&I		Construction				Total
(in thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
With no related allowance recorded:
Recorded investment	$	8,870	$	44,442	$	6,067	$	769	$	623	$	32	$	4,740	$	5,999	$	6,510	$	78,052
Unpaid principal	$	11,234	$	52,148	$	9,260	$	1,088	$	1,155	$	36	$	5,824	$	11,276	$	6,699	$	98,720
Average recorded Investment	$	6,484	$	35,963	$	5,386	$	511	$	584	$	55	$	3,031	$	9,517	$	3,905	$	65,436
Interest income Recognized	$	6	$	261	$	2	$	1	$	3		—	$	19	$	1	$	94	$	387
With an allowance recorded:
Recorded investment	$	3,757	$	14,907	$	3,048	$	14	$	501	$	46	$	575	$	654	$	964	$	24,466
Unpaid principal	$	4,149	$	15,085	$	3,599	$	14	$	602	$	49	$	618	$	708	$	1,006	$	25,830
Related allowance	$	1,054	$	917	$	1,772	$	14	$	161	$	16	$	166	$	136	$	596	$	4,832
Average recorded Investment	$	2,763	$	10,849	$	4,379	$	142	$	881	$	90	$	1,069	$	748	$	710	$	21,631
Interest income Recognized	$	3	$	190	$	1		—	$	1		—	$	3		—	$	5	$	203

At March 31, 2011, $46,326,000 of originated loans were TDR and classified as impaired. The Company had obligations to lend $378,000 of additional funds on these TDR as of March 31, 2011. At March 31, 2011, the Company had no PNCI loans.

The following tables show certain information regarding Troubled Debt Restructurings (TDRs) that occurred during the period indicated:

	TDR Information for the Three Months Ended March 31, 2012
	RE Mortgage				Home Equity				Auto Indirect		Other Consum.		C&I		Construction				Total
(In thousands)	Resid.		Comm.		Lines		Loans								Resid.		Comm.
Number		2		7		2		—		—		1		1		2		—		15
Pre-modification out-standing principal balance	$	650	$	1,561	$	436		—		—	$	38	$	249	$	230		—	$	3,164
Post-modification out-standing principal balance	$	669	$	1,523	$	464		—		—	$	38	$	249	$	232		—	$	3,175
Financial Impact due to troubled debt restructure taken as additional provision		—		—	$	16		—		—		—		—		—		—	$	16
Number that defaulted during the period		1		4		—		—		—		—		—		—		1		6
Recorded investment of TDRs that defaulted during the period	$	112	$	2,632		—		—		—		—		—		—	$	39	$	2,783
Financial Impact due to the default of previous troubled debt restructure taken as charge-offs or additional provisions		—		—		—		—		—		—		—		—		—		—

Modifications classified as Troubled Debt Restructurings can include one or a combination of the following:

• Rate modifications

• Term extensions

• Interest only modifications, either temporary or long-term

• Payment modifications

• Collateral substitutions/additions

For all new Troubled Debt Restructurings, an impairment analysis is conducted. If the loan is determined to be collateral dependent, any additional amount of impairment will be calculated based on the difference between estimated collectible value and the current carrying balance of the loan. This difference could result in an increased provision and is typically charged off. If the asset is determined not to be collateral dependent, the impairment is measured on the net present value difference between the estimated cash flows of the restructured loan and the cash flows which would have been received under the original terms. The effect of this could result in a requirement for additional provision to the reserve. The effect of these required provisions for the period are indicated above.

Typically if a TDR defaults during the period, the loan is then considered collateral dependent and, if it was not already considered collateral dependent, an appropriate provision will be reserved or charge will be taken. The additional provisions required resulting from default of previously modified TDR’s are noted above.