Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Activity in the Loan Balances and the Allowance for Loan Losses by Segment

Activity in the allowance for loan losses by segment for the three months ended March 31, 2013 and 2012 are summarized as follows:



Three Months Ended March 31, 2013
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Losses charged off	(123		)	(63		)	(513		)	(436		)	(216		)	(77		)	(1,428		)
Recoveries	7			4			64			47			94			31			247
Provision charged to expense	(486		)	(242		)	554			980			502			42			1,350
Balance, end of year	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,778		$	192		$	—		$	—		$	—		$	—		$	1,970
Collectively evaluated for impairment	9,006			342			1,664			2,948			1,610			266			15,836
Total ending allowance balance	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Loans:
Individually evaluated for impairment	$	23,941		$	564		$	1,991		$	483		$	99		$	59		$	27,137
Collectively evaluated for impairment	391,812			75,345			62,495			121,281			199,865			11,996			862,794
Total ending loans balance	$	415,753		$	75,909		$	64,486		$	121,764		$	199,964		$	12,055		$	889,931

Three Months Ended March 31, 2012
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Losses charged off	(979		)	—			(467		)	(403		)	(178		)	(49		)	(2,076		)
Recoveries	20			17			67			4			103			17			228
Provision charged to expense	1,896			(841		)	643			408			(9		)	(197		)	1,900
Balance, end of year	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3,635		$	145		$	37		$	—		$	—		$	—		$	3,817
Collectively evaluated for impairment	8,016			440			1,537			2,298			807			200			13,298
Total ending allowance balance	$	11,651		$	585		$	1,574		$	2,298		$	807		$	200		$	17,115
Loans:
Individually evaluated for impairment	$	29,328		$	592		$	1,279		$	—		$	—		$	—		$	31,199
Collectively evaluated for impairment	381,453			72,865			59,733			125,298			178,433			13,239			831,021
Total ending loans balance	$	410,781		$	73,457		$	61,012		$	125,298		$	178,433		$	13,239		$	862,220

Age Analysis of Past Due Loans

March 31, 2013 and December 31, 2012 is as follows:

Age Analysis of Past Due Loans as of March 31, 2013



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	2,869	$	1,901	$	10,215	$	14,985	$	400,768	$	415,753	$	—
Commercial	1,308		5		462		1,775		74,134		75,909		—
Residential real estate	1,094		—		2,267		3,361		61,125		64,486		—
Home equity loans	730		57		1,009		1,796		119,968		121,764		—
Indirect	299		104		56		459		199,505		199,964
Consumer	409		2		188		599		11,456		12,055		—
Total	$	6,709	$	2,069	$	14,197	$	22,975	$	866,956	$	889,931	$	—

Age Analysis of Past Due Loans as of December 31, 2012



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	3,681	$	1,004	$	12,398	$	17,083	$	396,922	$	414,005	$	—
Commercial	—		—		376		376		68,329		68,705		—
Residential real estate	394		1,094		2,827		4,315		60,668		64,983		184
Home equity loans	630		494		1,510		2,634		120,196		122,830		—
Indirect	645		227		69		941		198,983		199,924
Consumer	26		40		123		189		11,912		12,101		—
Total	$	5,376	$	2,859	$	17,303	$	25,538	$	857,010	$	882,548	$	184

Impaired Loans

Impaired loans for the Period Ended March 31, 2013 and December 31, 2012 are as follows:



	At March 31, 2013						Three Months Ended March 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	19,035	$	24,826	$	—	$	17,207
Commercial	123		294		—		130
Residential real estate	1,991		2,209		—		1,800
Home equity loans	483		689		—		441
Indirect	99		161		—		50
Consumer	59		59		—		61
With allowance recorded:							0
Commercial real estate	4,906		5,867		1,778		6,424
Commercial	441		442		192		450
Residential real estate	—		—		—		—
Home equity loans	—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	27,137	$	34,547	$	1,970	$	26,563

	At December 31, 2012						Three Months Ended March 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,378	$	20,086	$	—	$	9,786
Commercial	138		138		—		287
Residential real estate	1,610		1,686		—		1,449
Home equity loans	398		398		—		—
Indirect	—		—		—		—
Consumer	61		61		—		—
With allowance recorded:
Commercial real estate	7,942		9,876		1,449		18,567
Commercial	459		459		209		269
Residential real estate	181		1,452		15		72
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	26,167	$	34,156	$	1,673	$	30,430

*impaired loans shown in the table above included loans that were classified as troubled debt restructurings ("TDRs'). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.

Troubled Debt Restructuring Loan Information

The following table summarizes the loans that were modified as a TDR during the period ended March 31, 2013 and 2012.



At March 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Residential real estate	1	$34	$23
Home equity loans	6	$361	$243
Indirect Loans	14	$161	$99



At March 31, 2012	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	5	$4,559	$3,041

Loans on Nonaccrual Status

Nonaccrual loan balances at March 31, 2013 and December 31, 2012 are as follows:



Loans On Non-Accrual Status	March 31, 2013		December 31, 2012
	(Dollars in thousands)
Commercial real estate	$	16,978	$	16,349
Commercial	372		472
Residential real estate	5,148		5,622
Home equity loans	5,156		4,293
Indirect	551		711
Consumer	309		349
Total Nonaccrual Loans	$	28,514	$	27,796

Summary of Recorded Investment Based on Delinquency Status

The following table presents the recorded investment of commercial real estate, commercial and residential real estate loans by internal credit risk grade and the recorded investment of residential real estate, home equity, indirect and consumer loans based on delinquency status as of March 31, 2013 and December 31, 2012:



Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
Commercial Credit Exposure	March 31, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	113	$	—	$	—	$	—	$	—	$	113
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,091		3		—		—		—		—		1,094
Grade 4 — Average	30,126		3,576		622		—		—		—		34,324
Grade 5 — Acceptable	346,812		68,567		5,909		—		—		—		421,288
Total Pass Credits	378,029		72,259		6,531		—		—		—		456,819
Grade 6 — Special mention	10,470		3,128		41		—		—		—		13,639
Grade 7 — Substandard	27,254		522		1,353		—		—		—		29,129
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	415,753		75,909		7,925		—		—		—		499,587
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		53,834		119,968		199,505		11,456		384,763
30-59 days past due loans not internally risk graded	—		—		1,094		730		299		409		2,532
60-89 days past due loans not internally risk graded	—		—		—		57		104		2		163
90+ days past due loans not internally risk graded	—		—		1,633		1,009		56		188		2,886
Total loans not internally credit risk graded	—		—		56,561		121,764		199,964		12,055		390,344
Total loans internally and not internally credit risk graded	$	415,753	$	75,909	$	64,486	$	121,764	$	199,964	$	12,055	$	889,931


*	Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.



Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
Commercial Credit Exposure	December 31, 2012
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	114	$	—	$	—	$	—	$	—	$	114
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,100		6		—		—		—		—		1,106
Grade 4 — Average	30,604		4,547		626		—		—		—		35,777
Grade 5 — Acceptable	342,067		60,023		5,584		—		—		—		407,674
Total Pass Credits	373,771		64,690		6,210		—		—		—		444,671
Grade 6 — Special mention	12,201		3,394		42		—		—		—		15,637
Grade 7 — Substandard	27,268		621		1,468		—		—		—		29,357
Grade 8 — Doubtful	765		—		—		—		—		—		765
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	414,005		68,705		7,720		—		—		—		490,430
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		54,416		120,196		198,983		11,912		385,507
30-59 days past due loans not internally risk graded	—		—		394		630		645		26		1,695
60-89 days past due loans not internally risk graded	—		—		1,094		494		227		40		1,855
90+ days past due loans not internally risk graded	—		—		1,359		1,510		69		123		3,061
Total loans not internally credit risk graded	—		—		57,263		122,830		199,924		12,101		392,118
Total loans internally and not internally credit risk graded	$	414,005	$	68,705	$	64,983	$	122,830	$	199,924	$	12,101	$	882,548

* Residential loans with an internal commercial credit risk grade include loans that are secured by non owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.