LOANS (Tables)

3 Months Ended

Mar. 31, 2016

At March 31, 2016 and December 31, 2015, net loans disaggregated by class consisted of the following (in thousands):

	March 31, 2016			December 31, 2015
Commercial and industrial	$	195,321		$	189,769
Commercial real estate		718,934			696,787
Multifamily		480,678			426,549
Mixed use commercial		83,421			78,787
Real estate construction		37,373			37,233
Residential mortgages		181,649			186,313
Home equity		45,447			44,951
Consumer		5,249			6,058
Gross loans		1,748,072			1,666,447
Allowance for loan losses		(20,930	)		(20,685	)
Net loans at end of period	$	1,727,142		$	1,645,762

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, 2016												Three Months Ended March 31, 2015
	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		Provision (credit) for loan losses			Balance at end of period
Commercial and industrial	$	1,875	$	-		$	45	$	(16	)	$	1,904	$	1,560	$	(492	)	$	343	$	587		$	1,998
Commercial real estate		7,019		-			10		261			7,290		6,777		-			7		568			7,352
Multifamily		4,688		-			-		835			5,523		4,018		-			-		449			4,467
Mixed use commercial		766		-			-		86			852		261		-			-		12			273
Real estate construction		386		-			-		2			388		383		-			-		(23	)		360
Residential mortgages		2,476		-			2		(268	)		2,210		3,027		-			11		(420	)		2,618
Home equity		639		(7	)		1		(56	)		577		709		-			2		17			728
Consumer		106		(58	)		2		47			97		166		(1	)		5		(15	)		155
Unallocated		2,730		-			-		(641	)		2,089		2,299		-			-		(925	)		1,374
Total	$	20,685	$	(65	)	$	60	$	250		$	20,930	$	19,200	$	(493	)	$	368	$	250		$	19,325

Summary of changes in the allowance for loan losses

Also in the tables below are total loans at March 31, 2016 and December 31, 2015 disaggregated by class and impairment methodology (in thousands).

	Allowance for Loan Losses						Loan Balances
March 31, 2016	Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance		Individually evaluated for impairment		Collectively evaluated for impairment		Ending balance
Commercial and industrial	$	84	$	1,820	$	1,904	$	4,957	$	190,364	$	195,321
Commercial real estate		-		7,290		7,290		4,511		714,423		718,934
Multifamily		-		5,523		5,523		-		480,678		480,678
Mixed use commercial		-		852		852		-		83,421		83,421
Real estate construction		-		388		388		-		37,373		37,373
Residential mortgages		430		1,780		2,210		5,152		176,497		181,649
Home equity		143		434		577		1,645		43,802		45,447
Consumer		43		54		97		297		4,952		5,249
Unallocated		-		2,089		2,089		-		-		-
Total	$	700	$	20,230	$	20,930	$	16,562	$	1,731,510	$	1,748,072

	Allowance for Loan Losses						Loan Balances
December 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	$	-	$	1,875	$	1,875	$	2,872	$	186,897	$	189,769
Commercial real estate		-		7,019		7,019		4,334		692,453		696,787
Multifamily		-		4,688		4,688		-		426,549		426,549
Mixed use commercial		-		766		766		-		78,787		78,787
Real estate construction		-		386		386		-		37,233		37,233
Residential mortgages		559		1,917		2,476		5,817		180,496		186,313
Home equity		170		469		639		1,683		43,268		44,951
Consumer		48		58		106		379		5,679		6,058
Unallocated		-		2,730		2,730		-		-		-
Total	$	777	$	19,908	$	20,685	$	15,085	$	1,651,362	$	1,666,447

Summary of impaired loans

The following table presents the Company’s impaired loans disaggregated by class at March 31, 2016 and December 31, 2015 (in thousands).

	March 31, 2016						December 31, 2015
	Unpaid Principal Balance		Recorded Balance		Allowance Allocated		Unpaid Principal Balance		Recorded Balance		Allowance Allocated
With no allowance recorded:
Commercial and industrial	$	3,929	$	3,929	$	-	$	2,869	$	2,869	$	-
Commercial real estate		4,929		4,511		-		4,753		4,334		-
Residential mortgages		3,056		2,927		-		3,076		2,947		-
Home equity		1,300		1,300		-		1,233		1,233		-
Consumer		129		129		-		207		207		-
Subtotal		13,343		12,796		-		12,138		11,590		-

With an allowance recorded:
Commercial and industrial		1,028		1,028		84		3		3		-
Residential mortgages		2,225		2,225		430		2,870		2,870		559
Home equity		361		345		143		586		450		170
Consumer		168		168		43		172		172		48
Subtotal		3,782		3,766		700		3,631		3,495		777
Total	$	17,125	$	16,562	$	700	$	15,769	$	15,085	$	777

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, 2016 and 2015 (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,
	2016				2015
	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	$	2,875	$	18	$	4,551	$	33
Commercial real estate		4,319		35		10,208		50
Residential mortgages		5,693		48		5,411		38
Home equity		1,671		15		1,662		13
Consumer		338		4		383		3
Total	$	14,896	$	120	$	22,215	$	137

Troubled debt restructurings

Outstanding TDRs, disaggregated by class, at March 31, 2016 and December 31, 2015 are as follows (dollars in thousands):

	March 31, 2016				December 31, 2015
TDRs Outstanding	Number of Loans		Outstanding Recorded Balance		Number of Loans		Outstanding Recorded Balance
Commercial and industrial		16	$	988		17	$	1,116
Commercial real estate		5		4,080		5		4,131
Residential mortgages		22		4,625		22		4,653
Home equity		5		1,354		5		1,362
Consumer		8		296		8		301
Total		56	$	11,343		57	$	11,563

The following presents, disaggregated by class, information regarding TDRs executed during the three months ended March 31, 2016 and 2015 (dollars in thousands):

	Three Months Ended March 31,
	2016						2015
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
Residential mortgages		-		-		-		2		194		199
Total		-	$	-	$	-		3	$	206	$	211

Summarizes non-accrual loans by loan class

At March 31, 2016 and December 31, 2015, non-accrual loans disaggregated by class were as follows (dollars in thousands):

	March 31, 2016										December 31, 2015
	Non- accrual loans		% of Total			Total Loans		% of Total Loans			Non- accrual loans		% of Total			Total Loans		% of Total Loans
Commercial and industrial	$	4,128		59.0	%	$	195,321		0.2	%	$	1,954		35.3	%	$	189,769		0.1	%
Commercial real estate		1,959		28.0			718,934		0.1			1,733		31.4			696,787		0.1
Multifamily		-		-			480,678		-			-		-			426,549		-
Mixed use commercial		-		-			83,421		-			-		-			78,787		-
Real estate construction		-		-			37,373		-			-		-			37,233		-
Residential mortgages		724		10.3			181,649		0.1			1,358		24.6			186,313		0.1
Home equity		186		2.7			45,447		-			406		7.3			44,951		-
Consumer		1		-			5,249		-			77		1.4			6,058		-
Total	$	6,998		100.0	%	$	1,748,072		0.4	%	$	5,528		100.0	%	$	1,666,447		0.3	%

Summary of current and past due loans

At March 31, 2016 and December 31, 2015, past due loans disaggregated by class were as follows (in thousands).

	Past Due
March 31, 2016	30 - 59 days			60 - 89 days			90 days and over			Total			Current			Total
Commercial and industrial	$	6		$	40		$	4,128		$	4,174		$	191,147		$	195,321
Commercial real estate		-			222			1,959			2,181			716,753			718,934
Multifamily		-			-			-			-			480,678			480,678
Mixed use commercial		-			-			-			-			83,421			83,421
Real estate construction		-			-			-			-			37,373			37,373
Residential mortgages		588			174			724			1,486			180,163			181,649
Home equity		200			-			186			386			45,061			45,447
Consumer		3			-			1			4			5,245			5,249
Total	$	797		$	436		$	6,998		$	8,231		$	1,739,841		$	1,748,072
% of Total Loans		0.1	%		0.0	%		0.4	%		0.5	%		99.5	%		100.0	%

	Past Due
December 31, 2015	30 - 59 days			60 - 89 days			90 days and over			Total			Current			Total
Commercial and industrial	$	21		$	-		$	1,954		$	1,975		$	187,794		$	189,769
Commercial real estate		-			-			1,733			1,733			695,054			696,787
Multifamily		-			-			-			-			426,549			426,549
Mixed use commercial		-			-			-			-			78,787			78,787
Real estate construction		-			-			-			-			37,233			37,233
Residential mortgages		512			175			1,358			2,045			184,268			186,313
Home equity		336			-			406			742			44,209			44,951
Consumer		2			-			77			79			5,979			6,058
Total	$	871		$	175		$	5,528		$	6,574		$	1,659,873		$	1,666,447
% of Total Loans		0.1	%		0.0	%		0.3	%		0.4	%		99.6	%		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, 2016 and December 31, 2015 (in thousands).

	March 31, 2016												December 31, 2015
	Grade												Grade
	Pass			Special mention			Substandard			Total			Pass			Special mention			Substandard			Total
Commercial and industrial	$	186,625		$	1,716		$	6,980		$	195,321		$	180,024		$	3,088		$	6,657		$	189,769
Commercial real estate		710,860			4,921			3,153			718,934			687,210			6,109			3,468			696,787
Multifamily		480,678			-			-			480,678			426,549			-			-			426,549
Mixed use commercial		83,421			-			-			83,421			78,779			-			8			78,787
Real estate construction		37,373			-			-			37,373			37,233			-			-			37,233
Residential mortgages		180,751			-			898			181,649			184,781			-			1,532			186,313
Home equity		45,261			-			186			45,447			44,545			-			406			44,951
Consumer		5,248			-			1			5,249			5,939			-			119			6,058
Total	$	1,730,217		$	6,637		$	11,218		$	1,748,072		$	1,645,060		$	9,197		$	12,190		$	1,666,447
% of Total		99.0	%		0.4	%		0.6	%		100.0	%		98.7	%		0.6	%		0.7	%		100.0	%