Loans (Tables)

12 Months Ended

Dec. 31, 2013

The following is a summary of loans:



(Dollars in thousands)	December 31, 2013				December 31, 2012
	Amount		%		Amount		%
Commercial:
Mortgages (1)		$796,249	32	%		$710,813	31	%
Construction and development (2)	36,289		1	%	27,842		1	%
Other (3)	530,797		22	%	513,764		23	%
Total commercial	1,363,335		55	%	1,252,419		55	%
Residential real estate:
Mortgages (4)	749,163		30	%	692,798		30	%
Homeowner construction	23,511		1	%	24,883		1	%
Total residential real estate	772,674		31	%	717,681		31	%
Consumer:
Home equity lines (5)	231,362		9	%	226,861		10	%
Home equity loans (5)	40,212		2	%	39,329		2	%
Other (6)	55,301		3	%	57,713		2	%
Total consumer	326,875		14	%	323,903		14	%
Total loans (7)		$2,462,884	100	%		$2,294,003	100	%


(1)	Amortizing mortgages and lines of credit, primarily secured by income producing property. As of December 31, 2013 and 2012, $190.7 million and $238.6 million, respectively, were pledged as collateral for FHLBB borrowings and letters of credit.


(2)	Loans for construction commercial properties, loans to developers for construction of residential properties and loans for land development.

(3)

Loans to businesses and individuals, a substantial portion of which are fully or partially collateralized by real estate. As of December 31, 2013, $44.1 million and $21.2 million, respectively, were pledged as collateral for FHLBB borrowings and letters of credit and were collateralized for the discount window at the FRB. Comparable amounts for December 31, 2012 were $51.8 million and $29.5 million, respectively.


(4)	As of December 31, 2013 and 2012, $684.6 million and $627.4 million, respectively were pledged as collateral for FHLBB borrowings and letters of credit.


(5)	As of December 31, 2013 and 2012, $195.3 million and $189.4 million, respectively were pledged as collateral for FHLBB borrowings and letters of credit.


(6)	Fixed rate consumer installment loans.


(7)	Includes net unamortized loan origination costs of $879 thousand and $39 thousand, respectively, and net unamortized premiums on purchased loans of $99 thousand and $83 thousand, respectively, at December 31, 2013 and 2012.

Nonaccrual Loans

The following is a summary of nonaccrual loans, segregated by class of loans:



(Dollars in thousands)
December 31,	2013		2012
Commercial:
Mortgages		$7,492		$10,681
Construction and development	—		—
Other	1,291		4,412
Residential real estate:
Mortgages	8,315		6,158
Homeowner construction	—		—
Consumer:
Home equity lines	469		840
Home equity loans	687		371
Other	48		81
Total nonaccrual loans		$18,302		$22,543
Accruing loans 90 days or more past due		$—		$—

As of December 31, 2013 and 2012, nonaccrual loans of $2.7 million and $1.6 million, respectively, were current as to the payment of principal and interest.

Interest income that would have been recognized had nonaccrual loans been current in accordance with their original terms was approximately $1.8 million, $1.8 million and $1.7 million in 2013, 2012 and 2011, respectively. Interest income included in the Consolidated Statements of Income on nonaccrual loans amounted to approximately $400 thousand, $679 thousand and $505 thousand in 2013, 2012 and 2011, respectively.

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
December 31, 2013	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Mortgages		$—		$—		$7,492		$7,492		$788,757		$796,249
Construction and development	—		—		—		—		36,289		36,289
Other	276		302		731		1,309		529,488		530,797
Residential real estate:
Mortgages	4,040		1,285		5,633		10,958		738,205		749,163
Homeowner construction	—		—		—		—		23,511		23,511
Consumer:
Home equity lines	831		100		269		1,200		230,162		231,362
Home equity loans	448		66		349		863		39,349		40,212
Other	43		—		38		81		55,220		55,301
Total loans		$5,638		$1,753		$14,512		$21,903		$2,440,981		$2,462,884



(Dollars in thousands)	Days Past Due
December 31, 2012	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Mortgages		$373		$408		$10,300		$11,081		$699,732		$710,813
Construction and development	—		—		—		—		27,842		27,842
Other	260		296		3,647		4,203		509,561		513,764
Residential real estate:
Mortgages	4,840		1,951		3,658		10,449		682,349		692,798
Homeowner construction	—		—		—		—		24,883		24,883
Consumer:
Home equity lines	753		207		528		1,488		225,373		226,861
Home equity loans	252		114		250		616		38,713		39,329
Other	129		64		66		259		57,454		57,713
Total loans		$6,607		$3,040		$18,449		$28,096		$2,265,907		$2,294,003

Included in past due loans as of December 31, 2013 and 2012, were nonaccrual loans of $15.6 million and $21.0 million, respectively. All loans 90 days or more past due at December 31, 2013 and 2012 were classified as nonaccrual.

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
December 31,	2013		2012		2013		2012		2013		2012
No Related Allowance Recorded:
Commercial:
Mortgages		$998		$2,357		$998		$2,360		$—		$—
Construction and development	—		—		—		—		—		—
Other	1,055		1,058		1,050		1,057		—		—
Residential real estate:
Mortgages	1,167		1,294		1,259		1,315		—		—
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	—		—		—		—		—		—
Home equity loans	—		—		—		—		—		—
Other	—		—		—		—		—		—
Subtotal		$3,220		$4,709		$3,307		$4,732		$—		$—
With Related Allowance Recorded:
Commercial:
Mortgages		$29,335		$17,897		$31,731		$19,738		$552		$1,720
Construction and development	—		—		—		—		—		—
Other	1,506		9,939		1,945		10,690		463		694
Residential real estate:
Mortgages	3,122		2,576		3,507		2,947		463		463
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	173		187		174		255		1		1
Home equity loans	55		117		54		160		—		—
Other	127		137		130		136		2		2
Subtotal		$34,318		$30,853		$37,541		$33,926		$1,481		$2,880
Total impaired loans		$37,538		$35,562		$40,848		$38,658		$1,481		$2,880
Total:
Commercial		$32,894		$31,251		$35,724		$33,845		$1,015		$2,414
Residential real estate	4,289		3,870		4,766		4,262		463		463
Consumer	355		441		358		551		3		3
Total impaired loans		$37,538		$35,562		$40,848		$38,658		$1,481		$2,880

(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 (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.

The following table presents the average recorded investment balance of impaired loans and interest income recognized on impaired loans segregated by loan class, for the periods indicated:



(Dollars in thousands)
	Average Recorded Investment						Interest Income Recognized
Years ended December 31,	2013		2012		2011		2013		2012		2011
Commercial:
Mortgages		$27,496		$10,785		$14,923		$630		$273		$539
Construction and development	—		—		—		—		—		—
Other	6,029		10,661		8,226		190		297		388
Residential real estate:
Mortgages	4,024		4,651		5,743		125		88		188
Homeowner construction	—		—		—		—		—		—
Consumer:
Home equity lines	200		172		127		7		3		5
Home equity loans	72		131		290		6		7		17
Other	146		151		235		9		11		15
Totals		$37,967		$26,551		$29,544		$967		$679		$1,152

At December 31, 2013 and 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 periods indicated:



(Dollars in thousands)			Outstanding Recorded Investment (1)
	# of Loans		Pre-Modifications				Post-Modifications
Years ended December 31,	2013	2012	2013		2012		2013		2012
Commercial:
Mortgages	6	6		$15,974		$9,525		$14,785		$9,525
Construction and development	—	—	—		—		—		—
Other	7	8	1,198		1,889		1,198		1,889
Residential real estate:
Mortgages	1	2	570		651		570		651
Homeowner construction	—	—	—		—		—		—
Consumer:
Home equity lines	1	—	92		—		92		—
Home equity loans	—	—	—		—		—		—
Other	—	2	—		5		—		5
Totals	15	18		$17,834		$12,070		$16,645		$12,070


(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 periods indicated:



(Dollars in thousands)
Years ended December 31,	2013		2012
Below market interest rate concession		$15,836		$1,426
Payment deferral	570		240
Maturity / amortization concession	21		917
Interest only payments	424		361
Combination (1)	983		9,126
Total		$17,834		$12,070


(1)	Loans included in this classification had a combination of any two of the concessions included in this table.

Troubled Debt Restructurings, Subsequent Default

he following table presents loans modified in a troubled debt restructuring within the previous twelve months for which there was a payment default during the periods indicated:



(Dollars in thousands)
	# of Loans		Recorded Investment (1)
Years ended December 31,	2013	2012	2013		2012
Commercial:
Mortgages	1	1		$232		$195
Construction and development	—	—	—		—
Other	2	3	839		866
Residential real estate:
Mortgages	—	—	—		—
Homeowner construction	—	—	—		—
Consumer:
Home equity lines	—	—	—		—
Home equity loans	—	—	—		—
Other	—	—	—		—
Totals	3	4		$1,071		$1,061


(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
December 31,	2013		2012		2013		2012		2013		2012
Mortgages		$756,838		$669,220		$23,185		$21,649		$16,226		$19,944
Construction and development	36,289		27,842		—		—		—		—
Other	507,962		483,371		19,887		24,393		2,948		6,000
Total commercial loans		$1,301,089		$1,180,433		$43,072		$46,042		$19,174		$25,944

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
December 31,	2013		2012		2013		2012
Residential real estate:
Accruing mortgages		$740,848		$686,640		$—		$—
Nonaccrual mortgages	2,682		2,500		5,633		3,658
Homeowner construction	23,511		24,883		—		—
Total residential loans		$767,041		$714,023		$5,633		$3,658
Consumer:
Home equity lines		$231,093		$226,333		$269		$528
Home equity loans	39,864		39,078		348		251
Other	55,262		57,648		39		65
Total consumer loans		$326,219		$323,059		$656		$844

Analysis of Loan Servicing Rights

Loan Servicing Activities

An analysis of loan servicing rights is as follows:



(Dollars in thousands)	Loan Servicing Rights			Valuation Allowance			Total
Balance at December 31, 2010		$913			($156	)		$757
Loan servicing rights capitalized	248			—			248
Amortization	(224		)	—			(224		)
Increase in impairment reserve	—			(16		)	(16		)
Balance at December 31, 2011	937			(172		)	765
Loan servicing rights capitalized	569			—			569
Amortization	(231		)	—			(231		)
Decrease in impairment reserve	—			7			7
Balance at December 31, 2012	1,275			(165		)	1,110
Loan servicing rights capitalized	1,897			—			1,897
Amortization	(405		)	—			(405		)
Decrease in impairment reserve	—			96			96
Balance at December 31, 2013		$2,767			($69	)		$2,698

Loan Servicing Assets Estimated Future Amortization [Table Text Block]

Estimated aggregate amortization expense related to loan servicing assets is as follows:



(Dollars in thousands)
Years ending December 31:	2014		$387
	2015	328
	2016	280
	2017	240
	2018	206
	Thereafter	1,326
Total estimated amortization expense			$2,767

Loans Serviced for Others, by Type of Loan

alance of loans serviced for others, by type of loan:



(Dollars in thousands)

December 31,	2013		2012
Residential mortgages		$310,699		$144,360
Commercial loans	69,526		60,444
Total		$380,225		$204,804