LOANS (Tables)

12 Months Ended

Dec. 31, 2014

At December 31, 2014 and 2013, net loans disaggregated by class consisted of the following (in thousands):

	December 31, 2014			December 31, 2013
Commercial and industrial	$	177,813		$	171,199
Commercial real estate		560,524			464,560
Multifamily		309,666			184,624
Mixed use commercial		34,806			4,797
Real estate construction		26,206			6,565
Residential mortgages		187,828			169,552
Home equity		50,982			57,112
Consumer		7,602			10,439
Gross loans		1,355,427			1,068,848
Allowance for loan losses		(19,200	)		(17,263	)
Net loans at end of period	$	1,336,227		$	1,051,585

Summary of changes in the allowance for loan losses

At December 31, 2014 and 2013, the ending balance in the allowance for loan losses disaggregated by class and impairment methodology is as follows (in thousands). Also in the tables below are total loans at December 31, 2014 and 2013 disaggregated by class and impairment methodology (in thousands).

	Allowance for Loan Losses						Loan Balances
December 31, 2014	Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance		Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance
Commercial and industrial	$	16	$	1,544	$	1,560	$	4,889	$	172,924	$	177,813
Commercial real estate		-		6,777		6,777		10,214		550,310		560,524
Multifamily		-		4,018		4,018		-		309,666		309,666
Mixed use commercial		-		261		261		-		34,806		34,806
Real estate construction		-		383		383		-		26,206		26,206
Residential mortgages		809		2,218		3,027		5,422		182,406		187,828
Home equity		92		617		709		1,567		49,415		50,982
Consumer		88		78		166		323		7,279		7,602
Unallocated		-		2,299		2,299		-		-		-
Total	$	1,005	$	18,195	$	19,200	$	22,415	$	1,333,012	$	1,355,427

	Allowance for Loan Losses						Loan Balances
December 31, 2013	Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance		Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance
Commercial and industrial	$	41	$	2,574	$	2,615	$	7,754	$	163,445	$	171,199
Commercial real estate		-		6,572		6,572		11,821		452,739		464,560
Multifamily		-		2,159		2,159		-		184,624		184,624
Mixed use commercial		-		54		54		-		4,797		4,797
Real estate construction		-		88		88		-		6,565		6,565
Residential mortgages		709		1,754		2,463		5,049		164,503		169,552
Home equity		93		652		745		1,082		56,030		57,112
Consumer		102		139		241		284		10,155		10,439
Unallocated		-		2,326		2,326		-		-		-
Total	$	945	$	16,318	$	17,263	$	25,990	$	1,042,858	$	1,068,848

Summary of current and past due loans

At December 31, 2014 and 2013, past due loans disaggregated by class were as follows (in thousands).

	Past Due
December 31, 2014	30 - 59 days			60 - 89 days			90 days and over			Total			Current			Total
Commercial and industrial	$	52		$	241		$	4,060		$	4,353		$	173,460		$	177,813
Commercial real estate		-			-			6,556			6,556			553,968			560,524
Multifamily		-			-			-			-			309,666			309,666
Mixed use commercial		-			-			-			-			34,806			34,806
Real estate construction		-			-			-			-			26,206			26,206
Residential mortgages		822			-			2,020			2,842			184,986			187,828
Home equity		-			112			303			415			50,567			50,982
Consumer		59			77			42			178			7,424			7,602
Total	$	933		$	430		$	12,981		$	14,344		$	1,341,083		$	1,355,427
% of Total Loans		0.1	%		0.0	%		1.0	%		1.1	%		98.9	%		100.0	%

	Past Due
December 31, 2013	30 - 59 days			60 - 89 days			90 days and over			Total			Current			Total
Commercial and industrial	$	13		$	-		$	5,014		$	5,027		$	166,172		$	171,199
Commercial real estate		631			-			7,492			8,123			456,437			464,560
Multifamily		-			-			-			-			184,624			184,624
Mixed use commercial		-			-			-			-			4,797			4,797
Real estate construction		-			-			-			-			6,565			6,565
Residential mortgages		1,535			339			1,897			3,771			165,781			169,552
Home equity		795			100			647			1,542			55,570			57,112
Consumer		75			-			133			208			10,231			10,439
Total	$	3,049		$	439		$	15,183		$	18,671		$	1,050,177		$	1,068,848
% of Total Loans		0.3	%		0.0	%		1.4	%		1.7	%		98.3	%		100.0	%

Summary of impaired loans

The following table presents the Company’s impaired loans disaggregated by class for the years ended December 31, 2014 and 2013 (in thousands).

	December 31, 2014						December 31, 2013
	Unpaid Principal Balance		Recorded Balance		Allowance Allocated		Unpaid Principal Balance		Recorded Balance		Allowance Allocated
With no allowance recorded:
Commercial and industrial	$	4,833	$	4,833	$	-	$	6,711	$	6,711	$	-
Commercial real estate		10,632		10,214		-		12,239		11,821		-
Residential mortgages		1,645		1,516		-		2,305		2,176		-
Home equity		1,377		1,377		-		891		891		-
Consumer		137		137		-		25		9		-
Subtotal		18,624		18,077		-		22,171		21,608		-

With an allowance recorded:
Commercial and industrial		57		56		16		1,043		1,043		41
Residential mortgages		3,906		3,906		809		2,873		2,873		709
Home equity		326		190		92		328		191		93
Consumer		185		186		88		274		275		102
Subtotal		4,474		4,338		1,005		4,518		4,382		945
Total	$	23,098	$	22,415	$	1,005	$	26,689	$	25,990	$	945

The following table presents the Company’s average recorded investment in impaired loans and the related interest income recognized disaggregated by class for the years ended December 31, 2014, 2013 and 2012 (in thousands). No interest income was recognized on a cash basis on impaired loans for any of the periods presented. The interest income recognized on accruing impaired loans is shown in the following table.

	Years Ended December 31,
	2014				2013				2012
	Average recorded investment in impaired loans		Interest income recognized on impaired loans		Average recorded investment in impaired loans		Interest income recognized on impaired loans		Average recorded investment in impaired loans		Interest income recognized on impaired loans
Commercial and industrial	$	6,961	$	730	$	12,065	$	800	$	23,215	$	447
Commercial real estate		10,823		251		11,556		1,041		38,477		501
Real estate construction		-		-		488		114		13,681		410
Residential mortgages		5,094		207		4,970		102		9,538		127
Home equity		804		83		814		15		2,607		13
Consumer		248		18		235		22		429		-
Total	$	23,930	$	1,289	$	30,128	$	2,094	$	87,947	$	1,498

Summary of impaired and non-accrual loans

The following table presents a summary of non-performing assets for each period (in thousands):

	December 31, 2014		December 31, 2013
Non-accrual loans	$	12,981	$	15,183
Non-accrual loans held for sale		-		-
Loans 90 days past due and still accruing		-		-
OREO		-		-
Total non-performing assets	$	12,981	$	15,183
TDRs accruing interest	$	9,380	$	10,647
TDRs non-accruing	$	10,293	$	5,438

Summarizes non-accrual loans by loan class

At December 31, 2014 and 2013, non-accrual loans disaggregated by class were as follows (dollars in thousands):

	December 31, 2014										December 31, 2013
	Non-accrual loans		% of Total			Total Loans		% of Total Loans			Non-accrual loans		% of Total			Total Loans		% of Total Loans
Commercial and industrial	$	4,060		31.3	%	$	177,813		0.3	%	$	5,014		33.0	%	$	171,199		0.4	%
Commercial real estate		6,556		50.5			560,524		0.5			7,492		49.3			464,560		0.7
Multifamily		-		-			309,666		-			-		-			184,624		-
Mixed use commercial		-		-			34,806		-			-		-			4,797		-
Real estate construction		-		-			26,206		-			-		-			6,565		-
Residential mortgages		2,020		15.6			187,828		0.1			1,897		12.5			169,552		0.2
Home equity		303		2.3			50,982		0.1			647		4.3			57,112		0.1
Consumer		42		0.3			7,602		-			133		0.9			10,439		-
Total	$	12,981		100.0	%	$	1,355,427		1.0	%	$	15,183		100.0	%	$	1,068,848		1.4	%

Summary of the activity in the allowance for loan losses by loan class

The following summarizes the activity in the allowance for loan losses disaggregated by class for the periods indicated (in thousands):

	Year ended December 31, 2014												Year ended December 31, 2013
	Balance at beginning of period		Charge-offs			Recoveries		(Credit) provision for loan losses			Balance at end of period		Balance at beginning of period		Charge-offs			Recoveries		(Credit) provision for loan losses			Balance at end of period
Commercial and industrial	$	2,615	$	(420	)	$	797	$	(1,432	)	$	1,560	$	6,181	$	(2,867	)	$	2,077	$	(2,776	)	$	2,615
Commercial real estate		6,572		-			519		(314	)		6,777		5,965		(383	)		97		893			6,572
Multifamily		2,159		-			-		1,859			4,018		150		-			-		2,009			2,159
Mixed use commercial		54		-			-		207			261		34		-			-		20			54
Real estate construction		88		-			-		295			383		141		-			-		(53	)		88
Residential mortgages		2,463		(32	)		16		580			3,027		1,576		(126	)		5		1,008			2,463
Home equity		745		-			50		(86	)		709		907		(558	)		32		364			745
Consumer		241		(40	)		47		(82	)		166		189		(166	)		121		97			241
Unallocated		2,326		-			-		(27	)		2,299		2,638		-			-		(312	)		2,326
Total	$	17,263	$	(492	)	$	1,429	$	1,000		$	19,200	$	17,781	$	(4,100	)	$	2,332	$	1,250		$	17,263

	Year ended December 31, 2012
	Balance at beginning of period		Charge-offs			Recoveries		(Credit) provision for loan losses			Balance at end of period
Commercial and industrial	$	25,047	$	(8,534	)	$	2,456	$	(12,788	)	$	6,181
Commercial real estate		10,470		(15,794	)		-		11,289			5,965
Multifamily		559		-			-		(409	)		150
Mixed use commercial		-		-			-		34			34
Real estate construction		623		(3,671	)		340		2,849			141
Residential mortgages		2,401		(3,727	)		115		2,787			1,576
Home equity		512		(1,953	)		246		2,102			907
Consumer		313		(267	)		112		31			189
Unallocated		33		-			-		2,605			2,638
Total	$	39,958	$	(33,946	)	$	3,269	$	8,500		$	17,781

Credit risk profile by internally assigned grade

The following presents the Company’s loan portfolio credit risk profile by internally assigned grade disaggregated by class of loan at December 31, 2014 and 2013 (in thousands).

	December 31, 2014												December 31, 2013
	Grade												Grade
	Pass			Special mention			Substandard			Total			Pass			Special mention			Substandard			Total
Commercial and industrial	$	167,922		$	1,225		$	8,666		$	177,813		$	158,536		$	2,934		$	9,729		$	171,199
Commercial real estate		536,536			9,182			14,806			560,524			440,505			2,817			21,238			464,560
Multifamily		309,666			-			-			309,666			184,624			-			-			184,624
Mixed use commercial		34,806			-			-			34,806			4,797			-			-			4,797
Real estate construction		26,206			-			-			26,206			6,565			-			-			6,565
Residential mortgages		183,263			-			4,565			187,828			164,559			-			4,993			169,552
Home equity		49,569			-			1,413			50,982			56,379			-			733			57,112
Consumer		7,279			-			323			7,602			10,156			-			283			10,439
Total	$	1,315,247		$	10,407		$	29,773		$	1,355,427		$	1,026,121		$	5,751		$	36,976		$	1,068,848
% of Total		97.0	%		0.8	%		2.2	%		100.0	%		96.0	%		0.5	%		3.5	%		100.0	%

Troubled debt restructurings

Outstanding TDRs, disaggregated by class, at December 31, 2014 and 2013 are as follows (dollars in thousands):

	December 31, 2014				December 31, 2013
TDRs Outstanding	Number of Loans		Outstanding Recorded Balance		Number of Loans		Outstanding Recorded Balance
Commercial and industrial		31	$	3,683		43	$	6,022
Commercial real estate		8		10,179		7		6,022
Residential mortgages		19		4,314		17		3,891
Home equity		5		1,216		-		-
Consumer		7		281		3		150
Total		70	$	19,673		70	$	16,085

The following presents, disaggregated by class, information regarding TDRs executed during the years ended December 31, 2014, 2013 and 2012 (dollars in thousands):

	Years Ended December 31,
	2014						2013
New TDRs	Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance		Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Commercial and industrial		10	$	1,877	$	1,877		8	$	2,484	$	2,484
Commercial real estate		2		5,161		5,161		3		3,025		3,025
Residential mortgages		4		581		581		4		924		924
Home equity		5		1,219		1,219		-		-		-
Consumer		4		145		145		1		17		17
Total		25	$	8,983	$	8,983		16	$	6,450	$	6,450

	Year Ended December 31,
	2012
New TDRs	Number of Loans		Pre-Modification Outstanding Recorded Balance		Post-Modification Outstanding Recorded Balance
Commercial and industrial		17	$	6,674	$	6,674
Residential mortgages		6		1,617		1,617
Consumer		1		49		49
Total		24	$	8,340	$	8,340

Presented below and disaggregated by class is information regarding loans modified as TDRs that had payment defaults of 90 days or more within twelve months of restructuring during the years ended December 31, 2014, 2013 and 2012 (dollars in thousands):

	Years Ended December 31,
	2014				2013				2012
Defaulted TDRs	Number of Loans		Outstanding Recorded Balance		Number of Loans		Outstanding Recorded Balance		Number of Loans		Outstanding Recorded Balance
Commercial and industrial		-	$	-		-	$	-		2	$	1,125
Commercial real estate		2		1,529		1		390		-		-
Residential mortgages		-		-		1		310		2		807
Total		2	$	1,529		2	$	700		4	$	1,932