Loans (Tables)

9 Months Ended

Sep. 30, 2012

The following is a summary of loans:



(Dollars in thousands)	September 30, 2012				December 31, 2011
	Amount		%		Amount		%
Commercial:
Mortgages (1)		$693,221	31	%		$624,813	29	%
Construction and development (2)	25,132		1		10,955		1
Other (3)	500,974		22		488,860		22
Total commercial	1,219,327		54		1,124,628		52
Residential real estate:
Mortgages (4)	692,659		31		678,582		32
Homeowner construction	22,753		1		21,832		1
Total residential real estate	715,412		32		700,414		33
Consumer:
Home equity lines (5)	227,549		10		223,430		10
Home equity loans (5)	39,452		2		43,121		2
Other (6)	54,957		2		55,566		3
Total consumer	321,958		14		322,117		15
Total loans (7)		$2,256,697	100	%		$2,147,159	100	%


(1)	Amortizing mortgages and lines of credit, primarily secured by income producing property. As of September 30, 2012 and December 31, 2011, $250.1 million and $107.1 million, respectively, of these loans were pledged as collateral for FHLBB borrowings (see Note 8).


(2)	Loans for construction of residential and commercial properties and for land development.

(3)

Loans to businesses and individuals, a substantial portion of which are fully or partially collateralized by real estate. As of September 30, 2012, $54.3 million and $32.7 million, respectively, of these loans were pledged as collateral for FHLBB borrowings and were collateralized for the discount window at the Federal Reserve Bank. Comparable amounts for December 31, 2011 were $27.2 million and $42.1 million, respectively (see Note 8).


(4)	As of September 30, 2012 and December 31, 2011, $599.6 million and $611.8 million, respectively, of these loans were pledged as collateral for FHLBB borrowings (see Note 8).


(5)	As of September 30, 2012 and December 31, 2011, $191.2 million and $165.4 million, respectively, of these loans were pledged as collateral for FHLBB borrowings (see Note 8).


(6)	Fixed-rate consumer installment loans.


(7)	Includes net unamortized loan origination costs of $39 thousand and $31 thousand, respectively, and net unamortized premiums on purchased loans of $76 thousand and $67 thousand, respectively, at September 30, 2012 and December 31, 2011.

Nonaccrual Loans

The following is a summary of nonaccrual loans, segregated by class of loans, as of the dates indicated:



(Dollars in thousands)	Sep 30, 2012		Dec 31, 2011
Commercial:
Mortgages		$5,956		$5,709
Construction and development	—		—
Other	3,201		3,708
Residential real estate:
Mortgages	7,127		10,614
Homeowner construction	—		—
Consumer:
Home equity lines	1,013		718
Home equity loans	376		335
Other	74		153
Total nonaccrual loans		$17,747		$21,237
Accruing loans 90 days or more past due		$—		$—

As of September 30, 2012 and December 31, 2011, nonaccrual loans of $3.3 million and $3.6 million, respectively, were current as to the payment of principal and interest.

Past Due Loans

Past due status is based on the contractual payment terms of the loan. The following tables present an age analysis of past due loans, segregated by class of loans, as of the dates indicated:



(Dollars in thousands)	Days Past Due
September 30, 2012	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Mortgages		$3,978		$874		$2,495		$7,347		$685,874		$693,221
Construction and development	—		—		—		—		25,132		25,132
Other	2,719		1,169		1,366		5,254		495,720		500,974
Residential real estate:
Mortgages	2,368		821		3,924		7,113		685,546		692,659
Homeowner construction	—		—		—		—		22,753		22,753
Consumer:
Home equity lines	1,546		914		528		2,988		224,561		227,549
Home equity loans	296		241		250		787		38,665		39,452
Other	34		58		33		125		54,832		54,957
Total loans		$10,941		$4,077		$8,596		$23,614		$2,233,083		$2,256,697



(Dollars in thousands)	Days Past Due
December 31, 2011	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Mortgages		$1,621		$315		$4,995		$6,931		$617,882		$624,813
Construction and development	—		—		—		—		10,955		10,955
Other	3,760		982		633		5,375		483,485		488,860
Residential real estate:
Mortgages	3,969		1,505		6,283		11,757		666,825		678,582
Homeowner construction	—		—		—		—		21,832		21,832
Consumer:
Home equity lines	645		210		525		1,380		222,050		223,430
Home equity loans	362		46		202		610		42,511		43,121
Other	66		7		147		220		55,346		55,566
Total loans		$10,423		$3,065		$12,785		$26,273		$2,120,886		$2,147,159

Included in past due loans as of September 30, 2012 and December 31, 2011, were nonaccrual loans of $14.5 million and $17.6 million, respectively.

Impaired Loans

The following is a summary of impaired loans, as of the dates indicated:



(Dollars in thousands)	Recorded Investment (1)				Unpaid Principal				Related Allowance
	Sep 30, 2012		Dec 31, 2011		Sep 30, 2012		Dec 31, 2011		Sep 30, 2012		Dec 31, 2011
No Related Allowance Recorded:
Commercial:
Mortgages		$914		$7,093		$915		$7,076		$—		$—
Construction and development	—		—		—		—		—		—
Other	2,140		1,622		2,136		1,620		—		—
Residential real estate:
Mortgages	2,641		2,383		2,678		2,471		—		—
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	—		—		—		—		—		—
Home equity loans	—		—		—		—		—		—
Other	—		—		—		—		—		—
Subtotal		$5,695		$11,098		$5,729		$11,167		$—		$—
With Related Allowance Recorded:
Commercial:
Mortgages		$14,205		$5,023		$15,641		$6,760		$939		$329
Construction and development	—		—		—		—		—		—
Other	7,960		8,739		8,611		9,740		571		839
Residential real estate:
Mortgages	1,711		3,606		2,029		4,138		510		495
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	188		278		255		373		1		82
Home equity loans	122		130		145		153		1		1
Other	163		205		171		227		1		69
Subtotal		$24,349		$17,981		$26,852		$21,391		$2,023		$1,815
Total impaired loans		$30,044		$29,079		$32,581		$32,558		$2,023		$1,815
Total:
Commercial		$25,219		$22,477		$27,303		$25,196		$1,510		$1,168
Residential real estate	4,352		5,989		4,707		6,609		510		495
Consumer	473		613		571		753		3		152
Total impaired loans		$30,044		$29,079		$32,581		$32,558		$2,023		$1,815

(1)

The recorded investment in impaired loans consists of unpaid principal balance, net of charge-offs, interest payments received applied to principal and unamortized deferred loan origination fees and costs. For impaired accruing loans (including those troubled debt restructurings for which management has concluded that the collectibility of the loan is not in doubt), the recorded investment also includes accrued interest. As of September 30, 2012 and December 31, 2011, recorded investment in impaired loans included accrued interest of $53 thousand and $46 thousand, respectively.

The following tables present the average recorded investment and interest income recognized on impaired loans segregated by loan class for the periods indicated:



(Dollars in thousands)	Average Recorded Investment				Interest Income Recognized
Three months ended September 30,	2012		2011		2012		2011
Commercial:
Mortgages		$9,611		$14,150		$71		$111
Construction and development	—		—		—		—
Other	10,176		7,330		73		80
Residential real estate:
Mortgages	4,400		5,822		21		38
Homeowner construction	—		—		—		—
Consumer:
Home equity lines	121		116		—		1
Home equity loans	120		167		2		3
Other	144		245		2		4
Totals		$24,572		$27,830		$169		$237



(Dollars in thousands)	Average Recorded Investment				Interest Income Recognized
Nine months ended September 30,	2012		2011		2012		2011
Commercial:
Mortgages		$8,795		$15,829		$176		$433
Construction and development	—		—		—		—
Other	10,756		9,109		231		291
Residential real estate:
Mortgages	4,867		5,658		66		127
Homeowner construction	—		—		—		—
Consumer:
Home equity lines	167		106		2		4
Home equity loans	138		340		5		14
Other	151		236		7		12
Totals		$24,874		$31,278		$487		$881

At September 30, 2012, there were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status or had been restructured.

Troubled Debt Restructurings

The following table presents loans modified as a troubled debt restructuring during the three months ended September 30, 2012 and 2011.



(Dollars in thousands)			Outstanding Recorded Investment (1)
	# of Loans		Pre-Modifications				Post-Modifications
Three months ended September 30,	2012	2011	2012		2011		2012		2011
Commercial:
Mortgages	2	—		$8,183		$—		$8,183		$—
Residential real estate:
Mortgages	—	1	—		139		—		139
Consumer:
Home equity loans	—	1	—		28		—		28
Totals	2	2		$8,183		$167		$8,183		$167


(1)	The recorded investment in troubled debt restructurings consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring. For accruing troubled debt restructurings the recorded investment also includes accrued interest.

The following table presents loans modified as a troubled debt restructuring during the nine months ended September 30, 2012 and 2011.



(Dollars in thousands)			Outstanding Recorded Investment (1)
	# of Loans		Pre-Modifications				Post-Modifications
Nine months ended September 30,	2012	2011	2012		2011		2012		2011
Commercial:
Mortgages	5	2		$9,044		$215		$9,044		$215
Other	7	7	1,625		1,293		1,625		1,293
Residential real estate:
Mortgages	2	6	651		1,449		651		1,449
Consumer:
Home equity loans	—	1	—		28		—		—
Other	2	1	5		117		5		145
Totals	16	17		$11,325		$3,102		$11,325		$3,102


(1)	The recorded investment in troubled debt restructurings consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring. For accruing troubled debt restructurings the recorded investment also includes accrued interest.

Troubled Debt Restructurings Type of Modification

The following table provides information on how loans were modified as a troubled debt restructuring during the three and nine months ended September 30, 2012 and 2011.



(Dollars in thousands)
	Three Months				Nine Months
Periods ended September 30,	2012		2011		2012		2011
Payment deferral		$—		$139		$240		$2,184
Maturity / amortization concession	—		28		917		694
Interest only payments	—		—		361		15
Below market interest rate concession	—		—		1,426		—
Combination (1)	8,183		—		8,381		209
Total		$8,183		$167		$11,325		$3,102

(1)

Loans included in this classification had a combination of any two of the concessions included in this table. In the third quarter of 2012 , a restructuring involving one accruing commercial real estate relationship with a carrying value of $8.2 million occurred. The restructuring included a modification of certain payment terms and a below market interest rate reduction for a temporary period on approximately $3.1 million of the total balance.

Troubled Debt Restructurings Subsequent Default

The following tables present loans modified in a troubled debt restructuring within the previous twelve months for which there was a payment default during the three and nine months ended September 30, 2012 and 2011.



(Dollars in thousands)	# of Loans		Recorded Investment (1)
Three months ended September 30,	2012	2011	2012		2011
Commercial:
Other	3	9	428		894
Residential real estate:
Mortgages	2	2	670		383
Consumer:
Other	1	—	13		—
Totals	6	11		$1,111		$1,277


(1)	The recorded investment in troubled debt restructurings consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs. For accruing troubled debt restructurings the recorded investment also includes accrued interest.



(Dollars in thousands)	# of Loans		Recorded Investment (1)
Nine months ended September 30,	2012	2011	2012		2011
Commercial:
Mortgages	1	2		$195		$215
Other	3	10	428		929
Residential real estate:
Mortgages	2	2	670		383
Consumer:
Other	1	—	13		—
Totals	7	14		$1,306		$1,527


(1)	The recorded investment in troubled debt restructurings consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs. For accruing troubled debt restructurings the recorded investment also includes accrued interest.

Credit Quality Indicators - Commercial

The following table presents the commercial loan portfolio, segregated by category of credit quality indicator:



(Dollars in thousands)	Pass				Special Mention				Classified
	Sep 30, 2012		Dec 31, 2011		Sep 30, 2012		Dec 31, 2011		Sep 30, 2012		Dec 31, 2011
Mortgages		$653,639		$583,162		$23,424		$29,759		$16,158		$11,892
Construction and development	25,132		10,955		—		—		—		—
Other	463,527		455,577		30,534		22,731		6,913		10,552
Total commercial loans		$1,142,298		$1,049,694		$53,958		$52,490		$23,071		$22,444

Credit Quality Indicators Residential & Consumer

The following table presents the residential and consumer loan portfolios, segregated by category of credit quality indicator:



(Dollars in thousands)	Under 90 Days Past Due				Over 90 Days Past Due
	Sep 30, 2012		Dec 31, 2011		Sep 30, 2012		Dec 31, 2011
Residential Real Estate:
Accruing mortgages		$685,532		$667,968		$—		$—
Nonaccrual mortgages	3,203		4,331		3,924		6,283
Homeowner construction	22,753		21,832		—		—
Total residential real estate loans		$711,488		$694,131		$3,924		$6,283
Consumer:
Home equity lines		$227,021		$222,905		$528		$525
Home equity loans	39,202		42,919		250		202
Other	54,924		55,419		33		147
Total consumer loans		$321,147		$321,243		$811		$874