Allowance for Loan Losses and Credit Quality of Loans (Tables)

3 Months Ended

Mar. 31, 2013

Allowance for Loan Losses and Credit Quality of Loans [Abstract]

Allowance for loan losses by portfolio

The following table illustrates the changes in the allowance for loan losses by our originated portfolio segments for the three months ended March 31, 2013 and 2012:

Three months ended							Residential
	Commercial			Consumer			Real Estate
	Loans			Loans			Mortgages			Unallocated		Total
Balance as of December 31, 2012	$	35,624		$	27,162		$	6,252		$	296	$	69,334
Charge-offs		(3,322	)		(3,723	)		(671	)		-		(7,716	)
Recoveries		467			977			14			-		1,458
Provision		2,589			1,869			1,113			87		5,658
Ending Balance as of March 31, 2013	$	35,358		$	26,285		$	6,708		$	383	$	68,734
Balance as of December 31, 2011	$	38,831		$	26,049		$	6,249		$	205	$	71,334
Charge-offs		(1,130	)		(4,052	)		(358	)		-		(5,540	)
Recoveries		385			675			9			-		1,069
Provision		(299	)		4,118			620			32		4,471
Ending Balance as of March 31, 2012	$	37,787		$	26,790		$	6,520		$	237	$	71,334

For acquired loans, to the extent that we experience deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans.  As of March 31, 2013 and 2012, there was no allowance for loan losses for the acquired loan portfolio. Net charge-offs related to acquired loans totaled $0.2 million during the three months ended March 31, 2013 and is included in the table above.

The following tables illustrate the allowance for loan losses and the recorded investment by portfolio segments as of March 31, 2013 and December 31, 2012:

Allowance for Loan Losses and Recorded Investment in Loans
(in thousands)
					Residential
	Commercial		Consumer		Real Estate
	Loans		Loans		Mortgages		Unallocated		Total
As of March 31, 2013
Allowance for loan losses	$	35,358	$	26,285	$	6,708	$	383	$	68,734
Allowance for loans individually evaluated for impairment	$	607	$	-	$	-			$	607
Allowance for loans collectively evaluated for impairment	$	34,751	$	26,285	$	6,708	$	383	$	68,127
Ending balance of loans	$	2,306,954	$	1,891,154	$	996,925			$	5,195,033
Ending balance of loans individually evaluated for impairment	$	9,690	$	-	$	-			$	9,690
Ending balance of acquired loans	$	466,673	$	294,780	$	361,680			$	1,123,133
Ending balance of loans collectively evaluated for impairment	$	1,830,591	$	1,596,374	$	635,245			$	4,062,210
As of December 31, 2012
Allowance for loan losses	$	35,624	$	27,162	$	6,252	$	296	$	69,334
Allowance for loans individually evaluated for impairment	$	2,848	$	-	$	-			$	2,848
Allowance for loans collectively evaluated for impairment	$	32,776	$	27,162	$	6,252	$	296	$	66,486
Ending balance of loans	$	2,003,371	$	1,623,138	$	651,107			$	4,277,616
Ending balance of loans individually evaluated for impairment	$	11,972	$	-	$	-			$	11,972
Ending balance of loans collectively evaluated for impairment	$	1,991,399	$	1,623,138	$	651,107			$	4,265,644

Past due and nonperforming loans by loan class

The following table illustrates the Company's nonaccrual loans by loan class:

Loans on Nonaccrual Status as of:
(In thousands)	March 31, 2013		December 31, 2012
ORIGINATED
Commercial Loans
Commercial	$	3,098	$	4,985
Commercial Real Estate		7,766		7,977
Agricultural		728		699
Agricultural Real Estate		1,164		1,038
Business Banking		6,843		6,738
		19,599		21,437
Consumer Loans
Indirect		1,782		1,557
Home Equity		7,241		7,247
Direct		270		266
		9,293		9,070
Residential Real Estate Mortgages		8,061		9,169
	$	36,953	$	39,676
ACQUIRED
Commercial Loans
Commercial	$	76
Business Banking		1,266
		1,342
Consumer Loans
Indirect		168
Home Equity		465
Direct		85
		718
Residential Real Estate Mortgages		2,713
	$	4,773
Total nonaccrual loans	$	41,726	$	39,676

The following tables set forth information with regard to past due and nonperforming loans by loan class as of March 31, 2013 and December 31, 2012:

Age Analysis of Past Due Financing Receivables
As of March 31, 2013
(in thousands)
					Greater Than
	31-60 Days		61-90 Days		90 Days		Total						Recorded
	Past Due		Past Due		Past Due		Past Due						Total
	Accruing		Accruing		Accruing		Accruing		Non-Accrual		Current		Loans
ORIGINATED
Commercial Loans
Commercial	$	549	$	-	$	-	$	549	$	3,098	$	545,847	$	549,494
Commercial Real Estate		1,753		-		-		1,753		7,766		849,715		859,234
Agricultural		111		49		-		160		728		60,297		61,185
Agricultural Real Estate		39		-		-		39		1,164		33,136		34,339
Business Banking		2,817		717		-		3,534		6,843		325,652		336,029
		5,269		766		-		6,035		19,599		1,814,647		1,840,281
Consumer Loans
Indirect		8,783		1,667		863		11,313		1,782		981,043		994,138
Home Equity		4,811		1,450		533		6,794		7,241		525,902		539,937
Direct		449		87		52		588		270		61,441		62,299
		14,043		3,204		1,448		18,695		9,293		1,568,386		1,596,374
Residential Real Estate Mortgages		3,249		471		79		3,799		8,061		623,385		635,245
	$	22,561	$	4,441	$	1,527	$	28,529	$	36,953	$	4,006,418	$	4,071,900
ACQUIRED
Commercial Loans
Commercial	$	1,037	$	124	$	-	$	1,161	$	76	$	132,082	$	133,319
Commercial Real Estate		1,484		456		-		1,940		-		242,561		244,501
Business Banking		1,663		241		6		1,910		1,266		85,677		88,853
		4,184		821		6		5,011		1,342		460,320		466,673
Consumer Loans
Indirect		833		18		41		892		168		186,677		187,737
Home Equity		961		273		67		1,301		465		95,806		97,572
Direct		63		2		10		75		85		9,311		9,471
		1,857		293		118		2,268		718		291,794		294,780
Residential Real Estate Mortgages		5,980		170		-		6,150		2,713		352,817		361,680
	$	12,021	$	1,284	$	124	$	13,429	$	4,773	$	1,104,931	$	1,123,133

As of December 31, 2012
(in thousands)
					Greater Than
	31-60 Days		61-90 Days		90 Days		Total						Recorded
	Past Due		Past Due		Past Due		Past Due						Total
	Accruing		Accruing		Accruing		Accruing		Non-Accrual		Current		Loans
Commercial Loans
Commercial	$	-	$	-	$	-	$	-	$	4,985	$	556,496	$	561,481
Commercial Real Estate		126		-		-		126		7,977		966,692	$	974,795
Agricultural		22		-		-		22		699		63,037	$	63,758
Agricultural Real Estate		108		-		103		211		1,038		36,128	$	37,377
Business Banking		3,019		708		45		3,772		6,738		355,450	$	365,960
		3,275		708		148		4,131		21,437		1,977,803	$	2,003,371
Consumer Loans
Indirect		10,956		2,477		1,205		14,638		1,557		964,802	$	980,997
Home Equity		6,065		1,223		681		7,969		7,247		560,066	$	575,282
Direct		717		144		84		945		266		65,648	$	66,859
		17,738		3,844		1,970		23,552		9,070		1,590,516	$	1,623,138
Residential Real Estate Mortgages		1,839		725		330		2,894		9,169		639,044	$	651,107
	$	22,852	$	5,277	$	2,448	$	30,577	$	39,676	$	4,207,363	$	4,277,616

Impaired loans and specific reserve allocations

The following table provides information on impaired loans and specific reserve allocations as of March 31, 2013 and December 31, 2012:

	March 31, 2013						December 31, 2012
	Recorded		Unpaid				Recorded		Unpaid
	Investment		Principal				Investment		Principal
	Balance		Balance		Related		Balance		Balance		Related
(in thousands)	(Book)		(Legal)		Allowance		(Book)		(Legal)		Allowance
With no related allowance recorded:
Commercial Loans
Commercial	$	5,106	$	7,374			$	1,651	$	1,710
Commercial Real Estate		8,461		9,156				8,709		9,553
Agricultural		873		1,269				940		1,286
Agricultural Real Estate		1,833		2,163				1,713		2,026
Business Banking		8,385		11,429				7,048		9,579
Total Commercial Loans		24,658		31,391				20,061		24,154
Consumer Loans
Home Equity		2,910		3,084				2,553		2,657
Residential Real Estate Mortgages		2,022		2,407				2,011		2,308
		29,590		36,882				24,625		28,967
With an allowance recorded:
Commercial Loans
Commercial	$	-	$	-	$	-	$	4,335	$	4,340	$	2,241
Commercial Real Estate		4,068		5,689		607		4,068		5,689		607
		4,068		5,689		607		8,403		10,029		2,848
Total:	$	33,658	$	42,571	$	607	$	33,028	$	39,148	$	2,848

The following table summarizes the average recorded investments on impaired loans and the interest income recognized for the three months ended March 31, 2013 and 2012:

	For the three months ended
	March 31, 2013						March 31, 2012
	Average		Interest Income				Average		Interest Income
	Recorded		Recognized				Recorded		Recognized
(in thousands)	Investment		Accrual		Cash		Investment		Accrual		Cash
With no related allowance recorded:
Commercial Loans
Commercial	$	6,038	$	15	$	15	$	1,974	$	14	$	14
Commercial Real Estate		8,545		61		61		5,821		15		15
Agricultural		1,004		11		11		3,117		45		45
Agricultural Real Estate		1,841		17		17		1,977		17		17
Business Banking		8,189		54		54		7,730		60		60
Consumer Loans
Home Equity		2,643		39		39		1,909		31		31
Residential Real Estate Mortgages		1,988		25		25		1,031		13		13
	$	30,248	$	222	$	222	$	23,559	$	195	$	195
With an allowance recorded:
Commercial Loans
Commercial	$	-	$	-	$	-	$	1,432	$	47	$	47
Commercial Real Estate		4,068		-		-		-		-		-
	$	4,068	$	-	$	-	$	1,432	$	47	$	47
Total:	$	34,316	$	222	$	222	$	24,991	$	242	$	242

Financing receivable credit quality by loan class

Consumer and Residential Mortgage loans are graded as either Performing or Nonperforming.   Nonperforming loans are loans that are 1) over 90 days past due and interest is still accruing, 2) on nonaccrual status or 3) restructured.  All loans not meeting any of these three criteria are considered Performing.

The following tables illustrate the Company's credit quality by loan class as of March 31, 2013 and December 31, 2012:

Credit Quality Indicators

As of March 31, 2013

ORIGINATED

Commercial Credit Exposure			Commercial				Agricultural
By Internally Assigned Grade:	Commercial		Real Estate		Agricultural		Real Estate		Total
Pass	$	525,022	$	819,736	$	55,091	$	30,515	$	1,430,364
Special Mention		14,810		19,972		13		3		34,798
Substandard		9,159		19,526		6,050		3,821		38,556
Doubtful		503		-		31		-		534
Total	$	549,494	$	859,234	$	61,185	$	34,339	$	1,504,252
Business Banking Credit Exposure
By Internally Assigned Grade:	Small Business								Total
Non-classified	$	315,645							$	315,645
Classified		20,384								20,384
Total	$	336,029							$	336,029
Consumer Credit Exposure
By Payment Activity:	Indirect		Home Equity		Direct				Total
Performing	$	991,493	$	532,163	$	61,977			$	1,585,633
Nonperforming		2,645		7,774		322				10,741
Total	$	994,138	$	539,937	$	62,299			$	1,596,374
Residential Mortgage Credit Exposure	Residential
By Payment Activity:	Mortgage								Total
Performing	$	627,105							$	627,105
Nonperforming		8,140								8,140
Total	$	635,245							$	635,245

Credit Quality Indicators

As of March 31, 2013

ACQUIRED

Commercial Credit Exposure			Commercial
By Internally Assigned Grade:	Commercial		Real Estate				Total
Pass	$	122,178	$	225,825			$	348,003
Special Mention		3,013		6,368				9,381
Substandard		8,128		12,308				20,436
Doubtful		-		-				-
Total	$	133,319	$	244,501			$	377,820
Business Banking Credit Exposure
By Internally Assigned Grade:	Small Business						Total
Non-classified	$	83,990					$	83,990
Classified		4,863						4,863
Total	$	88,853					$	88,853
Consumer Credit Exposure
By Payment Activity:	Indirect		Home Equity		Direct		Total
Performing	$	187,528	$	97,040	$	9,376	$	293,944
Nonperforming		209		532		95		836
Total	$	187,737	$	97,572	$	9,471	$	294,780
Residential Mortgage Credit Exposure	Residential
By Payment Activity:	Mortgage						Total
Performing	$	358,967					$	358,967
Nonperforming		2,713						2,713
Total	$	361,680					$	361,680

Credit Quality Indicators
As of December 31, 2012
Commercial Credit Exposure			Commercial				Agricultural
By Internally Assigned Grade:	Commercial		Real Estate		Agricultural		Real Estate		Total
Pass	$	522,985	$	901,928	$	57,347	$	33,472	$	1,515,732
Special Mention		18,401		32,135		13		3		50,552
Substandard		17,351		40,732		6,362		3,902		68,347
Doubtful		2,744		-		36		-		2,780
Total		561,481		974,795		63,758		37,377		1,637,411
Business Banking. Credit Exposure
By Internally Assigned Grade:	Small Business								Total
Non-classified		342,528								342,528
Classified		23,432								23,432
Total		365,960								365,960
Consumer Credit Exposure
By Payment Activity:	Indirect		Home Equity		Direct				Total
Performing	$	978,235	$	567,354	$	66,509			$	1,612,098
Nonperforming		2,762		7,928		350				11,040
Total	$	980,997	$	575,282	$	66,859			$	1,623,138
Residential Mortgage Credit Exposure	Residential
By Payment Activity:	Mortgage								Total
Performing	$	641,608							$	641,608
Nonperforming		9,499								9,499
Total	$	651,107							$	651,107