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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 6 Months Ended
Jun. 30, 2014
Loans and Leases Receivable Disclosure [Abstract]  
Composition of Loan Portfolio, Excluding Residential Loans Held for Sale
The composition of the Company’s loan portfolio at June 30, 2014 and December 31, 2013 was as follows:   
 
June 30,
2014
 
December 31,
2013
Residential real estate loans
$
567,641

 
$
570,391

Commercial real estate loans
604,140

 
541,099

Commercial loans
233,859

 
179,203

Home equity loans
273,779

 
272,630

Consumer loans
17,828

 
17,651

Deferred loan fees, net of costs
(482
)
 
(572
)
Total loans
$
1,696,765

 
$
1,580,402
Summary of Activity in Allowance for Loan Losses
The following table presents the activity in the ALL and select loan information by portfolio segment for the three and six months ended June 30, 2014: 
 
Residential 
Real Estate
 
Commercial 
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
Unallocated
 
Total
ALL for the three months ended:
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
$
5,411

 
$
4,528

 
$
6,292

 
$
2,673

 
$
310

 
$
2,456

 
$
21,670

Loans charged off
(178
)
 
(5
)
 
(307
)
 
(44
)
 
(26
)
 
—

 
(560
)
Recoveries
42

 
11

 
73

 
8

 
12

 
—

 
146

Provision (reduction)
(134
)
 
(173
)
 
426

 
115

 
22

 
393

 
649

Ending balance
$
5,141

 
$
4,361

 
$
6,484

 
$
2,752

 
$
318

 
$
2,849

 
$
21,905

ALL for the six months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
5,603

 
$
4,374

 
$
6,220

 
$
2,403

 
$
319

 
$
2,671

 
$
21,590

Loans charged off
(361
)
 
(176
)
 
(526
)
 
(106
)
 
(40
)
 
—

 
(1,209
)
Recoveries
134

 
50

 
169

 
11

 
19

 
—

 
383

Provision (reduction)
(235
)
 
113

 
621

 
444

 
20

 
178

 
1,141

Ending balance
$
5,141

 
$
4,361

 
$
6,484

 
$
2,752

 
$
318

 
$
2,849

 
$
21,905

ALL balance attributable to loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
1,346

 
$
397

 
$
578

 
$
805

 
$
138

 
$
—

 
$
3,264

Collectively evaluated for impairment
3,795

 
3,964

 
5,906

 
1,947

 
180

 
2,849

 
18,641

Total ending ALL
$
5,141

 
$
4,361

 
$
6,484

 
$
2,752

 
$
318

 
$
2,849

 
$
21,905

Loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
11,782

 
$
7,334

 
$
4,272

 
$
2,142

 
$
433

 
$
—

 
$
25,963

Collectively evaluated for impairment
555,377

 
596,806

 
229,587

 
271,637

 
17,395

 
—

 
1,670,802

Total ending loans balance
$
567,159

 
$
604,140

 
$
233,859

 
$
273,779

 
$
17,828

 
$
—

 
$
1,696,765

 
The following table presents the activity in the ALL and select loan information by portfolio segment for the three and six months ended June 30, 2013: 

 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
Unallocated
 
Total
ALL for the three months ended:
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
$
7,269

 
$
3,602

 
$
6,200

 
$
3,358

 
$
222

 
$
2,718

 
$
23,369

Loans charged off
(202
)
 
(91
)
 
(167
)
 
(309
)
 
(76
)
 
—

 
(845
)
Recoveries
2

 
17

 
69

 
—

 
9

 
—

 
97

Provision (reduction)
(837
)
 
62

 
(314
)
 
379

 
66

 
1,344

 
700

Ending balance
$
6,232

 
$
3,590

 
$
5,788

 
$
3,428

 
$
221

 
$
4,062

 
$
23,321

ALL for the six months ended:
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
$
6,996

 
$
4,549

 
$
5,933

 
$
2,520

 
$
184

 
$
2,862

 
$
23,044

Loans charged off
(347
)
 
(171
)
 
(444
)
 
(337
)
 
(133
)
 
—

 
(1,432
)
Recoveries
5

 
92

 
198

 
2

 
28

 
—

 
325

Provision (reduction)
(422
)
 
(880
)
 
101

 
1,243

 
142

 
1,200

 
1,384

Ending balance
$
6,232

 
$
3,590

 
$
5,788

 
$
3,428

 
$
221

 
$
4,062

 
$
23,321

ALL balance attributable to loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
1,487

 
$
296

 
$
386

 
$
442

 
$
71

 
$
—

 
$
2,682

Collectively evaluated for impairment
4,745

 
3,294

 
5,402

 
2,986

 
150

 
4,062

 
20,639

Total ending ALL
$
6,232

 
$
3,590

 
$
5,788

 
$
3,428

 
$
221

 
$
4,062

 
$
23,321

Loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
12,099

 
$
8,479

 
$
3,612

 
$
1,526

 
$
421

 
$
—

 
$
26,137

Collectively evaluated for impairment
557,422

 
514,508

 
186,456

 
300,342

 
17,694

 
—

 
1,576,422

Total ending loans balance
$
569,521

 
$
522,987

 
$
190,068

 
$
301,868

 
$
18,115

 
$
—

 
$
1,602,559


The following table presents the activity in the ALL and select loan information by portfolio segment for the year ended December 31, 2013: 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
Unallocated
 
Total
ALL:
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
$
6,996

 
$
4,549

 
$
5,933

 
$
2,520

 
$
184

 
$
2,862

 
$
23,044

Loans charged off
(1,059
)
 
(952
)
 
(1,426
)
 
(647
)
 
(190
)
 
—

 
(4,274
)
Recoveries
35

 
121

 
495

 
56

 
61

 
—

 
768

Provision (reduction)
(369
)
 
656

 
1,218

 
474

 
264

 
(191
)
 
2,052

Ending balance
$
5,603

 
$
4,374

 
$
6,220

 
$
2,403

 
$
319

 
$
2,671

 
$
21,590

ALL balance attributable to loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
1,750

 
$
526

 
$
132

 
$
433

 
$
140

 
$
—

 
$
2,981

Collectively evaluated for impairment
3,853

 
3,848

 
6,088

 
1,970

 
179

 
2,671

 
18,609

Total ending ALL
$
5,603

 
$
4,374

 
$
6,220

 
$
2,403

 
$
319

 
$
2,671

 
$
21,590

Loans:
 

 
 

 
 

 
 

 
 

 
 

 
 

Individually evaluated for impairment
$
14,435

 
$
8,864

 
$
2,635

 
$
1,571

 
$
442

 
$
—

 
$
27,947

Collectively evaluated for impairment
555,384

 
532,235

 
176,568

 
271,059

 
17,209

 
—

 
1,552,455

Total ending loans balance
$
569,819

 
$
541,099

 
$
179,203

 
$
272,630

 
$
17,651

 
$
—

 
$
1,580,402
Credit Risk Exposure Indicators by Portfolio Segment
The following table summarizes credit risk exposure indicators by portfolio segment as of the following dates:
 
Residential 
Real Estate
 
Commercial 
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
Total
June 30, 2014
 

 
 

 
 

 
 

 
 

 
 
Pass (Grades 1-6)
$
551,460

 
$
566,870

 
$
214,662

 
$
—

 
$
—

 
$
1,332,992

Performing
—

 
—

 
—

 
271,637

 
17,395

 
289,032

Special Mention (Grade 7)
3,064

 
5,909

 
9,093

 
—

 
—

 
18,066

Substandard (Grade 8)
12,635

 
31,361

 
10,104

 
—

 
—

 
54,100

Non-performing
—

 
—

 
—

 
2,142

 
433

 
2,575

Total
$
567,159

 
$
604,140

 
$
233,859

 
$
273,779

 
$
17,828

 
$
1,696,765

December 31, 2013
 

 
 

 
 

 
 

 
 

 
 
Pass (Grades 1-6)
$
551,035

 
$
496,257

 
$
155,851

 
$
—

 
$
—

 
$
1,203,143

Performing
—

 
—

 
—

 
271,059

 
17,210

 
288,269

Special Mention (Grade 7)
3,196

 
7,749

 
11,315

 
—

 
—

 
22,260

Substandard (Grade 8)
15,588

 
37,093

 
12,037

 
—

 
—

 
64,718

Non-performing
—

 
—

 
—

 
1,571

 
441

 
2,012

Total
$
569,819

 
$
541,099

 
$
179,203

 
$
272,630

 
$
17,651

 
$
1,580,402
Loan Aging Analysis by Portfolio Segment (Including Loans Past Due Over Ninety Days and Non Accrual Loans) and Summary of Non Accrual Loans, Which Include Troubled Debt Restructured Loans, and Loans Past Due Over Ninety Days and Accruing
The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and a summary of non-accrual loans, which include TDRs, and loans past due over 90 days and accruing as of the following dates:
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater
than
90 Days
 
Total
Past Due
 
Current
 
Total Loans
Outstanding
 
Loans > 90
Days Past
Due and
Accruing
 
Non-Accrual
Loans
June 30, 2014
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
1,496

 
$
571

 
$
5,581

 
$
7,648

 
$
559,511

 
$
567,159

 
$
—

 
$
7,887

Commercial real estate
1,193

 
204

 
4,702

 
6,099

 
598,041

 
604,140

 
109

 
6,282

Commercial
531

 
103

 
3,397

 
4,031

 
229,828

 
233,859

 
—

 
3,840

Home equity
459

 
148

 
1,820

 
2,427

 
271,352

 
273,779

 
—

 
2,142

Consumer
43

 
6

 
412

 
461

 
17,367

 
17,828

 
—

 
433

Total
$
3,722

 
$
1,032

 
$
15,912

 
$
20,666

 
$
1,676,099

 
$
1,696,765

 
$
109

 
$
20,584

December 31, 2013
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
3,218

 
$
684

 
$
7,269

 
$
11,171

 
$
558,648

 
$
569,819

 
$
—

 
$
10,520

Commercial real estate
926

 
2,036

 
3,301

 
6,263

 
534,836

 
541,099

 
257

 
7,799

Commercial
159

 
237

 
1,980

 
2,376

 
176,827

 
179,203

 
198

 
2,146

Home equity
1,395

 
388

 
1,007

 
2,790

 
269,840

 
272,630

 
—

 
1,571

Consumer
63

 
21

 
418

 
502

 
17,149

 
17,651

 
—

 
441

Total
$
5,761

 
$
3,366

 
$
13,975

 
$
23,102

 
$
1,557,300

 
$
1,580,402

 
$
455

 
$
22,477
Summary of All Troubled Debt Restructuring Loans (Accruing and Non Accruing) by Portfolio Segment
The following is a summary of accruing and non-accruing TDRs by portfolio segment as of the following dates:
 
 
Number of Contracts
 
Pre-Modification
Outstanding Recorded
Investment
 
Post-Modification
Outstanding Recorded
Investment
 
Current Balance
 
 
June 30,
 2014
 
December 31, 2013
 
June 30,
 2014
 
December 31, 2013
 
June 30,
 2014
 
December 31, 2013
 
June 30,
 2014
 
December 31, 2013
Residential
real estate
 
26

 
26

 
$
4,213

 
$
4,140

 
$
4,394

 
$
4,311

 
$
4,126

 
$
4,089

Commercial
real estate
 
9

 
10

 
2,471

 
3,031

 
2,509

 
3,074

 
1,973

 
2,558

Commercial
 
7

 
7

 
504

 
504

 
504

 
504

 
475

 
488

Consumer and
home equity
 
—

 
1

 
—

 
3

 
—

 
3

 
—

 
1

Total
 
42

 
44

 
$
7,188

 
$
7,678

 
$
7,407

 
$
7,892

 
$
6,574

 
$
7,136
Summary of Impaired Loan Balances and Associated Allowance by Portfolio Segment
The following is a summary of impaired loan balances and associated allowance by portfolio segment as of and for the three and six months ended June 30, 2014:
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
$
8,964

 
$
8,964

 
$
1,346

 
$
9,653

 
$
35

 
$
10,273

 
$
64

Commercial real estate
5,734

 
5,734

 
397

 
6,371

 
(4
)
 
6,812

 
1

Commercial
3,886

 
3,886

 
578

 
3,273

 
5

 
2,618

 
10

Home equity
1,704

 
1,704

 
805

 
1,671

 
—

 
1,614

 
—

Consumer
416

 
416

 
138

 
417

 
—

 
422

 
—

Ending Balance
20,704

 
20,704

 
3,264

 
21,385

 
36

 
21,739

 
75

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
2,818

 
3,177

 
—

 
2,924

 
(2
)
 
2,634

 
3

Commercial real estate
1,600

 
1,984

 
—

 
1,466

 
19

 
1,601

 
29

Commercial
386

 
478

 
—

 
387

 
1

 
478

 
2

Home equity
438

 
645

 
—

 
425

 
—

 
421

 
—

Consumer
17

 
37

 
—

 
17

 
—

 
17

 
—

Ending Balance
5,259

 
6,321

 
—

 
5,219

 
18

 
5,151

 
34

Total impaired loans
$
25,963

 
$
27,025

 
$
3,264

 
$
26,604

 
$
54

 
$
26,890

 
$
109

(1) Negative interest income represents the re-allocation of income between "with an allowance recorded" and "without an allowance recorded" (or vice versa) during the period.
The following is a summary of impaired loan balances and associated allowance by portfolio segment as of and for the three and six months ended June 30, 2013:
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
$
9,491

 
$
9,491

 
$
1,487

 
$
9,250

 
$
30

 
$
9,967

 
$
59

Commercial real estate
4,047

 
4,047

 
296

 
4,082

 
6

 
4,213

 
9

Commercial
2,754

 
2,754

 
386

 
2,749

 
1

 
2,779

 
3

Home equity
1,243

 
1,243

 
442

 
1,148

 
—

 
1,338

 
—

Consumer
420

 
420

 
71

 
461

 
—

 
459

 
—

Ending Balance
17,955

 
17,955

 
2,682

 
17,690

 
37

 
18,756

 
71

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
2,608

 
3,503

 
—

 
2,874

 
6

 
2,954

 
13

Commercial real estate
4,432

 
4,705

 
—

 
4,072

 
24

 
3,794

 
46

Commercial
858

 
981

 
—

 
652

 
5

 
595

 
6

Home equity
283

 
483

 
—

 
412

 
—

 
388

 
—

Consumer
1

 
1

 
—

 
2

 
—

 
2

 
—

Ending Balance
8,182

 
9,673

 
—

 
8,012

 
35

 
7,733

 
65

Total impaired loans
$
26,137

 
$
27,628

 
$
2,682

 
$
25,702

 
$
72

 
$
26,489

 
$
136


The following is a summary of impaired loan balances and associated allowance by portfolio segment as of and for the year ended December 31, 2013:
 
 
 
 
 
 
 
Year Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With an allowance recorded:
 
 
 

 
 

 
 

 
 

Residential real estate
$
11,902

 
$
11,902

 
$
1,750

 
$
10,411

 
$
118

Commercial real estate
6,805

 
6,805

 
526

 
5,517

 
20

Commercial
1,876

 
1,876

 
132

 
2,543

 
10

Home equity
1,228

 
1,228

 
433

 
1,291

 
—

Consumer
425

 
425

 
140

 
460

 
—

Ending Balance
22,236

 
22,236

 
2,981

 
20,222

 
148

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

Residential real estate
2,533

 
3,846

 
—

 
2,925

 
28

Commercial real estate
2,059

 
2,782

 
—

 
3,362

 
55

Commercial
759

 
871

 
—

 
765

 
8

Home equity
343

 
479

 
—

 
334

 
—

Consumer
17

 
37

 
—

 
11

 
—

Ending Balance
5,711

 
8,015

 
—

 
7,397

 
91

Total impaired loans
$
27,947

 
$
30,251

 
$
2,981

 
$
27,619

 
$
239