LOANS (Tables)

3 Months Ended

Mar. 31, 2015

At March 31, 2015 and December 31, 2014, net loans disaggregated by class consisted of the following (in thousands):

	March 31, 2015			December 31, 2014
Commercial and industrial	$	178,812		$	177,813
Commercial real estate		579,873			560,524
Multifamily		322,229			309,666
Mixed use commercial		35,333			34,806
Real estate construction		24,608			26,206
Residential mortgages		184,977			187,828
Home equity		49,440			50,982
Consumer		6,888			7,602
Gross loans		1,382,160			1,355,427
Allowance for loan losses		(19,325	)		(19,200	)
Net loans at end of period	$	1,362,835		$	1,336,227

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).

	Three Months Ended March 31, 2015												Three Months Ended March 31, 2014
	Balance at beginning of period		Charge-offs			Recoveries		Provision (credit) 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	$	1,560	$	(492	)	$	343	$	587		$	1,998	$	2,615	$	(115	)	$	293	$	(312	)	$	2,481
Commercial real estate		6,777		-			7		568			7,352		6,572		-			12		624			7,208
Multifamily		4,018		-			-		449			4,467		2,159		-			-		481			2,640
Mixed use commercial		261		-			-		12			273		54		-			-		33			87
Real estate construction		383		-			-		(23	)		360		88		-			-		129			217
Residential mortgages		3,027		-			11		(420	)		2,618		2,463		-			4		160			2,627
Home equity		709		-			2		17			728		745		-			27		(54	)		718
Consumer		166		(1	)		5		(15	)		155		241		(2	)		5		(58	)		186
Unallocated		2,299		-			-		(925	)		1,374		2,326		-			-		(753	)		1,573
Total	$	19,200	$	(493	)	$	368	$	250		$	19,325	$	17,263	$	(117	)	$	341	$	250		$	17,737

Summary of changes in the allowance for loan losses

At March 31, 2015 and December 31, 2014, 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 March 31, 2015 and December 31, 2014 disaggregated by class and impairment methodology (in thousands).

	Allowance for Loan Losses						Loan Balances
March 31, 2015	Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance		Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance
Commercial and industrial	$	10	$	1,988	$	1,998	$	3,764	$	175,048	$	178,812
Commercial real estate		-		7,352		7,352		10,302		569,571		579,873
Multifamily		-		4,467		4,467		-		322,229		322,229
Mixed use commercial		-		273		273		-		35,333		35,333
Real estate construction		-		360		360		-		24,608		24,608
Residential mortgages		771		1,847		2,618		5,651		179,326		184,977
Home equity		159		569		728		1,670		47,770		49,440
Consumer		88		67		155		398		6,490		6,888
Unallocated		-		1,374		1,374		-		-		-
Total	$	1,028	$	18,297	$	19,325	$	21,785	$	1,360,375	$	1,382,160

	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

Summary of impaired loans

The following table presents the Company’s impaired loans disaggregated by class at March 31, 2015 and December 31, 2014 (in thousands).

	March 31, 2015						December 31, 2014
	Unpaid Principal Balance		Recorded Balance		Allowance Allocated		Unpaid Principal Balance		Recorded Balance		Allowance Allocated
With no allowance recorded:
Commercial and industrial	$	3,723	$	3,723	$	-	$	4,833	$	4,833	$	-
Commercial real estate		10,721		10,302		-		10,632		10,214		-
Residential mortgages		1,919		1,773		-		1,645		1,516		-
Home equity		1,407		1,407		-		1,377		1,377		-
Consumer		214		214		-		137		137		-
Subtotal		17,984		17,419		-		18,624		18,077		-

With an allowance recorded:
Commercial and industrial		42		41		10		57		56		16
Residential mortgages		3,877		3,878		771		3,906		3,906		809
Home equity		400		263		159		326		190		92
Consumer		182		184		88		185		186		88
Subtotal		4,501		4,366		1,028		4,474		4,338		1,005
Total	$	22,485	$	21,785	$	1,028	$	23,098	$	22,415	$	1,005

The following table presents the Company’s average recorded investment in impaired loans and the related interest income recognized disaggregated by class for the three months ended March 31, 2015 and 2014 (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.

	Three Months Ended March 31,
	2015				2014
	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	$	4,551	$	33	$	7,567	$	107
Commercial real estate		10,208		50		11,558		99
Residential mortgages		5,411		38		5,036		36
Home equity		1,662		13		771		17
Consumer		383		3		170		2
Total	$	22,215	$	137	$	25,102	$	261

Troubled debt restructurings

Outstanding TDRs, disaggregated by class, at March 31, 2015 and December 31, 2014 are as follows (dollars in thousands):

	March 31, 2015				December 31, 2014
TDRs Outstanding	Number of Loans		Outstanding Recorded Balance		Number of Loans		Outstanding Recorded Balance
Commercial and industrial		30	$	2,721		31	$	3,683
Commercial real estate		8		10,057		8		10,179
Residential mortgages		21		4,478		19		4,314
Home equity		5		1,208		5		1,216
Consumer		7		277		7		281
Total		71	$	18,741		70	$	19,673

The following presents, disaggregated by class, information regarding TDRs executed during the three months ended March 31, 2015 and 2014 (dollars in thousands):

	Three Months Ended March 31,
	2015						2014
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		1	$	12	$	12		3	$	377	$	377
Residential mortgages		2		194		199		-		-		-
Total		3	$	206	$	211		3	$	377	$	377

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 three months ended March 31, 2015 and 2014 (dollars in thousands).

	Three Months Ended March 31,
	2015				2014
Defaulted TDRs	Number of Loans		Outstanding Recorded Balance		Number of Loans		Outstanding Recorded Balance
Commercial real estate		-	$	-		2	$	1,596
Total		-	$	-		2	$	1,596

Summary of impaired and non-accrual loans

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

	March 31, 2015		December 31, 2014
Non-accrual loans	$	12,292	$	12,981
Non-accrual loans held for sale		-		-
Loans 90 days past due and still accruing		-		-
OREO		-		-
Total non-performing assets	$	12,292	$	12,981
TDRs accruing interest	$	9,418	$	9,380
TDRs non-accruing	$	9,323	$	10,293

Summarizes non-accrual loans by loan class

At March 31, 2015 and December 31, 2014, non-accrual loans disaggregated by class were as follows (dollars in thousands):

	March 31, 2015										December 31, 2014
	Non-accrual loans		% of Total			Total Loans		% of Total Loans			Non-accrual loans		% of Total			Total Loans		% of Total Loans
Commercial and industrial	$	3,035		24.7	%	$	178,812		0.2	%	$	4,060		31.3	%	$	177,813		0.3	%
Commercial real estate		6,647		54.1			579,873		0.5			6,556		50.5			560,524		0.5
Multifamily		-		-			322,229		-			-		-			309,666		-
Mixed use commercial		-		-			35,333		-			-		-			34,806		-
Real estate construction		-		-			24,608		-			-		-			26,206		-
Residential mortgages		2,074		16.9			184,977		0.2			2,020		15.6			187,828		0.1
Home equity		414		3.3			49,440		-			303		2.3			50,982		0.1
Consumer		122		1.0			6,888		-			42		0.3			7,602		-
Total	$	12,292		100.0	%	$	1,382,160		0.9	%	$	12,981		100.0	%	$	1,355,427		1.0	%

Summary of current and past due loans

At March 31, 2015 and December 31, 2014, past due loans disaggregated by class were as follows (in thousands).

	Past Due
March 31, 2015	30 - 59 days			60 - 89 days			90 days and over			Total			Current			Total
Commercial and industrial	$	8		$	379		$	3,035		$	3,422		$	175,390		$	178,812
Commercial real estate		-			-			6,647			6,647			573,226			579,873
Multifamily		-			-			-			-			322,229			322,229
Mixed use commercial		-			-			-			-			35,333			35,333
Real estate construction		-			-			-			-			24,608			24,608
Residential mortgages		505			-			2,074			2,579			182,398			184,977
Home equity		199			-			414			613			48,827			49,440
Consumer		10			-			122			132			6,756			6,888
Total	$	722		$	379		$	12,292		$	13,393		$	1,368,767		$	1,382,160
% of Total Loans		0.1	%		0.0	%		0.9	%		1.0	%		99.0	%		100.0	%

	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	%

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 March 31, 2015 and December 31, 2014 (in thousands).

	March 31, 2015												December 31, 2014
	Grade												Grade
	Pass			Special mention			Substandard			Total			Pass			Special mention			Substandard			Total
Commercial and industrial	$	165,527		$	3,543		$	9,742		$	178,812		$	167,922		$	1,225		$	8,666		$	177,813
Commercial real estate		553,861			15,395			10,617			579,873			536,536			9,182			14,806			560,524
Multifamily		322,229			-			-			322,229			309,666			-			-			309,666
Mixed use commercial		35,313			-			20			35,333			34,806			-			-			34,806
Real estate construction		24,608			-			-			24,608			26,206			-			-			26,206
Residential mortgages		181,809			-			3,168			184,977			183,263			-			4,565			187,828
Home equity		48,021			-			1,419			49,440			49,569			-			1,413			50,982
Consumer		6,766			-			122			6,888			7,279			-			323			7,602
Total	$	1,338,134		$	18,938		$	25,088		$	1,382,160		$	1,315,247		$	10,407		$	29,773		$	1,355,427
% of Total		96.8	%		1.4	%		1.8	%		100.0	%		97.0	%		0.8	%		2.2	%		100.0	%