Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 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 nine months ended September 30, 2013 and 2012 are summarized as follows:



Nine Months Ended September 30, 2013
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Losses charged off	(1,475		)	(120		)	(679		)	(1,439		)	(555		)	(181		)	(4,449		)
Recoveries	584			7			277			60			276			49			1,253
Provision charged to expense	(33		)	(246		)	281			2,530			660			158			3,350
Balance, end of year	$	10,462		$	476		$	1,438		$	3,508		$	1,611		$	296		$	17,791

Three Months Ended September 30, 2013
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	10,424		$	438		$	1,606		$	3,508		$	1,581		$	258		$	17,815
Losses charged off	(630		)	—			(35		)	(410		)	(196		)	(83		)	(1,354		)
Recoveries	83			2			178			5			104			8			380
Provision charged to expense	585			36			(311		)	405			122			113			950
Balance, end of year	$	10,462		$	476		$	1,438		$	3,508		$	1,611		$	296		$	17,791

As of September 30, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,462		$	79		$	6		$	—		$	—		$	—		$	1,547
Collectively evaluated for impairment	9,000			397			1,432			3,508			1,611			296			16,244
Total ending allowance balance	$	10,462		$	476		$	1,438		$	3,508		$	1,611		$	296		$	17,791
Loans:
Individually evaluated for impairment	$	20,148		$	588		$	1,670		$	1,107		$	191		$	152		$	23,856
Collectively evaluated for impairment	383,883			79,225			63,727			121,178			206,158			13,273			867,444
Total ending loans balance	$	404,031		$	79,813		$	65,397		$	122,285		$	206,349		$	13,425		$	891,300



Nine Months Ended September 30, 2012
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Losses charged off	(2,057		)	(213		)	(1,267		)	(851		)	(738		)	(252		)	(5,378		)
Recoveries	39			24			86			31			244			36			460
Provision charged to expense	3,064			(466		)	1,551			661			615			17			5,442
Balance, end of year	$	11,760		$	754		$	1,701		$	2,130		$	1,012		$	230		$	17,587

Three Months Ended September 30, 2012
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	11,396		$	840		$	1,716		$	2,146		$	985		$	217		$	17,300
Losses charged off	(738		)	(48		)	(292		)	(296		)	(161		)	(146		)	(1,681		)
Recoveries	9			4			3			16			54			7			93
Provision charged to expense	1,093			(42		)	274			264			134			152			1,875
Balance, end of year	$	11,760		$	754		$	1,701		$	2,130		$	1,012		$	230		$	17,587

As of September 30, 2012
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	2,525		$	69		$	2		$	—		$	—		$	—		$	2,596
Collectively evaluated for impairment	9,235			$	685		$	1,699		$	2,130		$	1,012		$	230		14,991
Total ending allowance balance	$	11,760		$	754		$	1,701		$	2,130		$	1,012		$	230		$	17,587
Loans:
Individually evaluated for impairment	$	25,310		$	340		$	1,179		$	—		$	—		$	—		$	26,829
Collectively evaluated for impairment	386,614			71,582			67,370			125,108			195,358			12,854			858,886
Total ending loans balance	$	411,924		$	71,922		$	68,549		$	125,108		$	195,358		$	12,854		$	885,715

Age Analysis of Past Due Loans

ely. Information regarding delinquent loans as of September 30, 2013 and December 31, 2012 is as follows:

Age Analysis of Past Due Loans as of September 30, 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	$	20	$	50	$	9,610	$	9,680	$	394,351	$	404,031	$	—
Commercial	1,567		109		234		1,910		77,903		79,813		—
Residential real estate	377		586		2,587		3,550		61,847		65,397		—
Home equity loans	1,094		362		1,065		2,521		119,764		122,285		—
Indirect	225		59		41		325		206,024		206,349
Consumer	191		—		109		300		13,125		13,425		—
Total	$	3,474	$	1,166	$	13,646	$	18,286	$	873,014	$	891,300	$	—

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 September 30, 2013 and December 31, 2012 are as follows:



	At September 30, 2013						Three Months Ended September 30, 2013		Nine Months Ended September 30, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	14,625	$	19,617	$	—	$	16,127	$	16,667
Commercial	245		298		—		203		167
Residential real estate	1,613		1,801		—		1,802		1,800
Home equity loans	1,107		1,518		—		897		669
Indirect	191		293		—		208		129
Consumer	152		203		—		113		87
With allowance recorded:
Commercial real estate	5,523		8,842		1,462		5,139		5,781
Commercial	343		343		79		342		396
Residential real estate	57		154		6		29		60
Home equity loans	—		—		—		—		—
Indirect	—		—		—		—		—
Consumer	—		—		—		—		—
Total	$	23,856	$	33,069	$	1,547	$	24,860	$	25,756

	At December 31, 2012						Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,378	$	20,086	$	—	$	7,204	$	9,246
Commercial	138		138		—		164		269
Residential real estate	1,610		1,686		—		966		1,052
Home equity loans	398		398		—		—		—
Indirect	—		—		—		—		—
Consumer	61		61		—		—		—
With allowance recorded:
Commercial real estate	7,942		9,876		1,449		19,502		19,376
Commercial	459		459		209		159		216
Residential real estate	181		1,452		15		85		79
Home equity loans	—		—		—		—		—
Indirect	—		—		—		—		—
Consumer	—		—		—		—		—
Total	$	26,167	$	34,156	$	1,673	$	28,080	$	30,238

*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 September 30, 2013 and 2012.



		Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
		Recorded Investment			Recorded Investment
	Number of Contracts	Pre-Modification Outstanding	Post-Modification Outstanding	At September 30, 2013	Number of Contracts	Pre-Modification Outstanding	Post-Modification Outstanding	At September 30, 2013
Commercial	—	$—	—	—	4	$110	$104	$104
Residential real estate	1	$46	$42	$42	3	$189	$174	$174
Home equity loans	5	$320	$277	$277	21	$1,006	$753	$753
Indirect Loans	3	$31	$31	$31	35	$380	$303	$303
Consumer Loans	2	$27	$27	$27	2	$27	$27	$27



		Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
		Recorded Investment			Recorded Investment
	Number of Contracts	Pre-Modification Outstanding	Post-Modification Outstanding	At September 30, 2012	Number of Contracts	Pre-Modification Outstanding	Post-Modification Outstanding	At September 30, 2012
Commercial real estate	—	$—	$—	$—	4	$2,861	$2,861	$2,861

Loans on Nonaccrual Status

Nonaccrual loan balances at September 30, 2013 and December 31, 2012 are as follows:



Loans On Non-Accrual Status	September 30, 2013		December 31, 2012
	(Dollars in thousands)
Commercial real estate	$	13,630	$	16,349
Commercial	355		472
Residential real estate	5,335		5,622
Home equity loans	4,798		4,293
Indirect	486		711
Consumer	372		349
Total Nonaccrual Loans	$	24,976	$	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 September 30, 2013 and December 31, 2012:



Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
Commercial Credit Exposure	September 30, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	74	$	—	$	—	$	—	$	—	$	74
Grade 2 — Modest	—		37		—		—		—		—		37
Grade 3 — Better than average	866		—		—		—		—		—		866
Grade 4 — Average	27,181		866		616		—		—		—		28,663
Grade 5 — Acceptable	343,587		75,332		5,552		—		—		—		424,471
Total Pass Credits	371,634		76,309		6,168		—		—		—		454,111
Grade 6 — Special mention	10,671		3,149		37		—		—		—		13,857
Grade 7 — Substandard	21,726		355		568		—		—		—		22,649
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	404,031		79,813		6,773		—		—		—		490,617
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		55,131		119,764		206,024		13,125		394,044
30-59 days past due loans not internally risk graded	—		—		377		1,094		225		191		1,887
60-89 days past due loans not internally risk graded	—		—		586		362		59		—		1,007
90+ days past due loans not internally risk graded	—		—		2,530		1,065		41		109		3,745
Total loans not internally credit risk graded	—		—		58,624		122,285		206,349		13,425		400,683
Total loans internally and not internally credit risk graded	$	404,031	$	79,813	$	65,397	$	122,285	$	206,349	$	13,425	$	891,300


*	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.