LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

6 Months Ended

Jun. 30, 2012

Composition of Company's Loan Portfolio, Excluding Residential Loans Held for Sale

The composition of the Company’s loan portfolio, excluding residential loans held for sale, at June 30, 2012 and December 31, 2011 was as follows:

	June 30, 2012			December 31, 2011
Residential real estate loans	$	570,185		$	578,757
Commercial real estate loans		496,411			470,061
Commercial loans		182,428			185,045
Home equity loans		272,309			268,782
Consumer loans		15,493			11,878
Deferred loan fees net of costs		(362	)		(495	)
Total loans	$	1,536,464		$	1,514,028

Summary of Activity in Allowance for Loan Losses

The following is a summary of activity in the ALL:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Balance at beginning of period	$	23,010		$	22,887		$	23,011		$	22,293
Loan charge-offs		(861	)		(1,170	)		(1,950	)		(2,017	)
Recoveries on loans previously charged off		287			306			384			630
Net charge-offs		(574	)		(864	)		(1,566	)		(1,387	)
Provision for loan losses		826			966			1,817			2,083
Balance at end of period	$	23,262		$	22,989		$	23,262		$	22,989

Activity in Allowance for Loan Losses by Portfolio Segment

The following table presents the ALL for the three months ended June 30, 2012:

	Residential Real Estate			Commercial Real Estate			Commercial			Home Equity			Consumer			Unallocated		Total
ALL:
Beginning balance	$	6,103		$	5,713		$	5,193		$	2,474		$	523		$	3,004	$	23,010
Loans charged off		(138	)		(30	)		(225	)		(464	)		(4	)		—		(861	)
Recoveries		63			145			56			20			3			—		287
Provision (reduction)		324			(991	)		1,344			289			(358	)		218		826
Ending balance	$	6,352		$	4,837		$	6,368		$	2,319		$	164		$	3,222	$	23,262

The following table presents the ALL and select loan information for the six months ended June 30, 2012:

	Residential Real Estate			Commercial Real Estate			Commercial			Home Equity			Consumer			Unallocated		Total
ALL:
Beginning balance	$	6,398		$	5,702		$	4,846		$	2,704		$	420		$	2,941	$	23,011
Loans charged off		(446	)		(209	)		(416	)		(851	)		(28	)		—		(1,950	)
Recoveries		68			166			120			20			10			—		384
Provision (reduction)		332			(822	)		1,818			446			(238	)		281		1,817
Ending balance	$	6,352		$	4,837		$	6,368		$	2,319		$	164		$	3,222	$	23,262
Ending Balance:   Individually evaluated for impairment	$	1,903		$	707		$	933		$	203		$	39		$	—	$	3,785
Ending Balance:   Collectively evaluated for impairment	$	4,449		$	4,130		$	5,435		$	2,116		$	125		$	3,222	$	19,477
Loans ending balance:
Ending Balance:   Individually evaluated for impairment	$	13,458		$	7,362		$	4,751		$	1,651		$	263		$	—	$	27,485
Ending Balance:   Collectively evaluated for impairment	$	556,365		$	489,049		$	177,677		$	270,658		$	15,230		$	—	$	1,508,979
Loans ending balance	$	569,823		$	496,411		$	182,428		$	272,309		$	15,493		$	—	$	1,536,464

The following table presents the ALL for the three months ended June 30, 2011:

	Residential Real Estate			Commercial Real Estate			Commercial			Home Equity			Consumer			Unallocated			Total
ALL:
Beginning balance	$	3,914		$	7,698		$	5,437		$	1,957		$	238		$	3,643		$	22,887
Loans charged off		(625	)		(94	)		(333	)		(111	)		(7	)		—			(1,170	)
Recoveries		63			174			61			6			2			—			306
Provision (reduction)		2,757			(1,454	)		(692	)		626			220			(491	)		966
Ending balance	$	6,109		$	6,324		$	4,473		$	2,478		$	453		$	3,152		$	22,989

The following table presents the ALL and select loan information for the six months ended June 30, 2011:

	Residential Real Estate			Commercial Real Estate			Commercial			Home Equity			Consumer			Unallocated		Total
ALL:
Beginning balance	$	3,273		$	8,198		$	5,633		$	2,051		$	202		$	2,936	$	22,293
Loans charged off		(797	)		(325	)		(755	)		(120	)		(20	)		—		(2,017	)
Recoveries		113			183			156			170			8			—		630
Provision (reduction)		3,520			(1,732	)		(561	)		377			263			216		2,083
Ending balance	$	6,109		$	6,324		$	4,473		$	2,478		$	453		$	3,152	$	22,989
Ending Balance:   Individually evaluated for impairment	$	2,828		$	933		$	397		$	373		$	108		$	—	$	4,639
Ending Balance:   Collectively evaluated for impairment	$	3,281		$	5,391		$	4,076		$	2,105		$	345		$	3,152	$	18,350
Loans ending balance:
Ending Balance:   Individually evaluated for impairment	$	11,839		$	7,765		$	3,878		$	1,355		$	125		$	—	$	24,962
Ending Balance:   Collectively evaluated for impairment	$	578,271		$	457,483		$	210,537		$	267,908		$	12,295		$	—	$	1,526,494
Loans ending balance	$	590,110		$	465,248		$	214,415		$	269,263		$	12,420		$	—	$	1,551,456

 The following table presents the allowance for loan losses and select loan information for the year ended December 31, 2011:

	Residential  Real Estate			Commercial  Real Estate			Commercial			Home Equity			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	3,273		$	8,198		$	5,633		$	2,051		$	202		$	2,936	$	22,293
Loans charged off		(1,216	)		(1,633	)		(1,256	)		(861	)		(59	)		—		(5,025	)
Recoveries		120			374			296			196			16			—		1,002
Provision (reduction)		4,221			(1,237	)		173			1,318			261			5		4,741
Ending balance	$	6,398		$	5,702		$	4,846		$	2,704		$	420		$	2,941	$	23,011
Ending Balance: Individually evaluated for impairment	$	1,364		$	961		$	815		$	440		$	91		$	—	$	3,671
Ending Balance: Collectively evaluated for impairment	$	5,034		$	4,741		$	4,031		$	2,264		$	329		$	2,941	$	19,340
Loans ending balance:
Ending Balance: Individually evaluated for impairment	$	12,715		$	7,830		$	4,019		$	2,670		$	152		$	—	$	27,386
Ending Balance: Collectively evaluated for impairment	$	565,547		$	462,231		$	181,026		$	266,112		$	11,726		$	—	$	1,486,642
Loans ending balance	$	578,262		$	470,061		$	185,045		$	268,782		$	11,878		$	—	$	1,514,028

Credit Risk Exposure Indicators by Portfolio Segment

The following table summarizes credit risk exposure indicators by portfolio segment as of the following periods:

	Residential  Real Estate		Commercial  Real Estate		Commercial		Home Equity		Consumer
June 30, 2012
Pass (Grades 1-6)	$	553,473	$	437,714	$	155,341	$	—	$	—
Performing		—		—		—		270,658		15,233
Special Mention (Grade 7)		1,153		12,585		9,121		—		—
Substandard (Grade 8)		15,197		46,112		17,404		—		—
Non-performing		—		—		—		1,651		260
Doubtful (Grade 9)		—		—		562		—		—
Total	$	569,823	$	496,411	$	182,428	$	272,309	$	15,493
December 31, 2011
Pass (Grades 1-6)	$	560,926	$	413,489	$	157,141	$	—	$	—
Performing		—		—		—		266,112		11,726
Special Mention (Grade 7)		876		8,134		8,998		—		—
Substandard (Grade 8)		16,460		48,438		18,335		—		—
Non-performing		—		—		—		2,670		152
Doubtful (Grade 9)		—		—		571		—		—
Total	$	578,262	$	470,061	$	185,045	$	268,782	$	11,878

Loan Aging Analysis by Portfolio Segment (Including Loans Past Due Over 90 Days and Non-Accrual Loans) and Summary of Non-Accrual Loans, which Include Troubled Debt Restructured Loans, and Loans Past Due Over 90 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 troubled debt restructured loans (“TDRs”), and loans past due over 90 days and accruing as of the following periods:

	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, 2012
Residential real estate	$	842	$	460	$	8,206	$	9,508	$	560,315	$	569,823	$	—	$	10,349
Commercial real estate		2,181		1,912		4,511		8,604		487,807		496,411		451		7,362
Commercial		833		369		3,572		4,774		177,654		182,428		111		4,687
Home equity		425		33		1,142		1,600		270,709		272,309		—		1,652
Consumer		52		20		260		332		15,161		15,493		—		260
Total	$	4,333	$	2,794	$	17,691	$	24,818	$	1,511,646	$	1,536,464	$	562	$	24,310
December 31, 2011
Residential real estate	$	2,207	$	575	$	7,373	$	10,155	$	568,107	$	578,262	$	99	$	9,503
Commercial real estate		2,105		739		5,009		7,853		462,208		470,061		—		7,830
Commercial		1,020		184		2,309		3,513		181,532		185,045		135		3,955
Home equity		1,208		962		1,927		4,097		264,685		268,782		2		2,670
Consumer		73		10		152		235		11,643		11,878		—		152
Total	$	6,613	$	2,470	$	16,770	$	25,853	$	1,488,175	$	1,514,028	$	236	$	24,110

Summary of All Troubled Debt Restructuring Loans (Accruing and Non-Accruing) by Portfolio Segment

The following is a summary of accruing and non-accruing TDR loans by portfolio segment as of the following periods:

	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Current Balance
June 30, 2012
Troubled-Debt Restructurings
Residential real estate		18	$	3,124	$	3,227	$	3,109
Commercial real estate		3		1,708		1,708		1,141
Commercial		2		163		163		102
Consumer		1		3		3		3
Total		24	$	4,998	$	5,101	$	4,355
December 31, 2011
Troubled-Debt Restructurings
Residential real estate		19	$	3,221	$	3,426	$	3,330
Commercial real estate		3		1,708		1,708		1,249
Commercial		2		163		163		103
Total		24	$	5,092	$	5,297	$	4,682

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 the following periods:

							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
June 30, 2012
With an allowance recorded:
Residential real estate	$	11,371	$	11,371	$	1,903	$	11,151	$	25	$	11,360	$	57
Commercial real estate		5,593		5,593		707		5,919		—		6,433		—
Commercial		4,472		4,472		933		4,162		—		4,590		—
Home equity		1,060		1,060		203		1,465		—		1,165		—
Consumer		257		257		39		222		—		260		—
Ending Balance	$	22,753	$	22,753	$	3,785	$	22,919	$	25	$	23,808	$	57
Without allowance recorded:
Residential real estate	$	2,087	$	2,536	$	—	$	2,024	$	6	$	2,081	$	13
Commercial real estate		1,769		2,571		—		1,654		—		1,009		—
Commercial		279		526		—		289		—		260		—
Home equity		591		1,462		—		793		—		787		—
Consumer		6		166		—		7		—		5		—
Ending Balance	$	4,732	$	7,261	$	—	$	4,767	$	6	$	4,142	$	13
Total impaired loans	$	27,485	$	30,014	$	3,785	$	27,686	$	31	$	27,950	$	70

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2011
With related allowance recorded:
Residential real estate	$	10,717	$	11,287	$	1,364	$	11,280	$	109
Commercial real estate		5,477		5,478		961		7,257		3
Commercial		3,636		3,636		815		3,963		7
Home equity		1,888		1,887		440		1,457		1
Consumer		136		136		91		106		—
Ending Balance	$	21,854	$	22,424	$	3,671	$	24,063	$	120
Without related allowance recorded:
Residential real estate	$	1,998	$	1,810	$	—	$	1,847	$	21
Commercial real estate		2,353		3,815		—		2,078		—
Commercial		383		665		—		393		—
Home equity		782		1,189		—		422		—
Consumer		16		176		—		18		—
Ending Balance	$	5,532	$	7,655	$	—	$	4,758	$	21
Total impaired loans	$	27,386	$	30,079	$	3,671	$	28,821	$	141