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Allowance for Loan Losses and Credit Quality of Loans (Tables)
 9 Months Ended
Sep. 30, 2013
Allowance for Loan Losses and Credit Quality of Loans [Abstract]  
Allowance for loan losses by portfolio
The following tables illustrate the changes in the allowance for loan losses by our portfolio segments for the three and nine months ended September 30, 2013 and 2012:

 
 
  
  
Residential
  
  
 
Three months ended September 30
 
Commercial
  
Consumer
  
Real Estate
  
  
 
 
 
Loans
  
Loans
  
Mortgages
  
Unallocated
  
Total
 
Balance as of June 30, 2013
 
$
37,704
  
$
26,456
  
$
6,806
  
$
218
  
$
71,184
 
Charge-offs
  
(3,489
)
  
(3,746
)
  
(374
)
  
-
   
(7,609
)
Recoveries
  
602
   
733
   
76
   
-
   
1,411
 
Provision
  
980
   
3,744
   
402
   
72
   
5,198
 
Ending Balance as of September 30, 2013
 
$
35,797
  
$
27,187
  
$
6,910
  
$
290
  
$
70,184
 
 
                    
Balance as of June 30, 2012
 
$
37,495
  
$
27,235
  
$
5,943
  
$
61
  
$
70,734
 
Charge-offs
  
(1,904
)
  
(3,446
)
  
(480
)
  
-
   
(5,830
)
Recoveries
  
492
   
574
   
9
   
-
   
1,075
 
Provision
  
1,734
   
2,213
   
809
   
(1
)
  
4,755
 
Ending Balance as of September 30, 2012
 
$
37,817
  
$
26,576
  
$
6,281
  
$
60
  
$
70,734
 
 
                    
 
         
Residential
         
Nine months ended September 30
 
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
  
(8,009
)
  
(11,122
)
  
(1,347
)
  
-
   
(20,478
)
Recoveries
  
1,485
   
2,363
   
179
   
43
   
4,070
 
Provision
  
6,697
   
8,784
   
1,826
   
(49
)
  
17,258
 
Ending Balance as of September 30, 2013
 
$
35,797
  
$
27,187
  
$
6,910
  
$
290
  
$
70,184
 
 
                    
Balance as of December 31, 2011
 
$
38,831
  
$
26,049
  
$
6,249
  
$
205
  
$
71,334
 
Charge-offs
  
(4,685
)
  
(11,237
)
  
(1,130
)
  
-
   
(17,052
)
Recoveries
  
1,180
   
1,918
   
25
   
-
   
3,123
 
Provision
  
2,491
   
9,846
   
1,137
   
(145
)
  
13,329
 
Ending Balance as of September 30, 2012
 
$
37,817
  
$
26,576
  
$
6,281
  
$
60
  
$
70,734
 

The following tables illustrate the allowance for loan losses and the recorded investment by portfolio segments as of September 30, 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 September 30, 2013
 
  
  
  
  
 
Allowance for loan losses
 
$
35,797
  
$
27,187
  
$
6,910
  
$
290
  
$
70,184
 
 
                    
Allowance for loans individually evaluated for impairment
 
$
1,100
  
$
-
  
$
-
      
$
1,100
 
 
                    
Allowance for loans collectively evaluated for impairment
 
$
34,697
  
$
27,187
  
$
6,910
  
$
290
  
$
69,084
 
 
                    
Ending balance of loans
 
$
2,378,848
  
$
1,960,225
  
$
1,028,158
      
$
5,367,231
 
 
                    
Ending balance of loans individually evaluated for impairment
 
$
15,323
  
$
-
  
$
-
      
$
15,323
 
Ending balance of acquired loans
 
$
432,806
  
$
243,469
  
$
325,491
      
$
1,001,766
 
Ending balance of loans collectively evaluated for impairment
 
$
1,930,719
  
$
1,716,756
  
$
702,667
      
$
4,350,142
 
 
                    
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)
 
September 30, 2013
  
December 31, 2012
 
ORIGINATED
 
  
 
Commercial Loans
 
  
 
Commercial
 
$
4,409
  
$
4,985
 
Commercial Real Estate
  
8,642
   
7,977
 
Agricultural
  
1,076
   
699
 
Agricultural Real Estate
  
868
   
1,038
 
Business Banking
  
4,949
   
6,738
 
 
  
19,944
   
21,437
 
 
        
Consumer Loans
        
Indirect
  
1,440
   
1,557
 
Home Equity
  
5,965
   
7,247
 
Direct
  
92
   
266
 
 
  
7,497
   
9,070
 
 
        
Residential Real Estate Mortgages
  
6,666
   
9,169
 
 
        
 
 
$
34,107
  
$
39,676
 
 
        
ACQUIRED
        
Commercial Loans
        
Commercial
 
$
102
     
Commercial Real Estate
  
1,329
     
Business Banking
  
1,338
     
 
  
2,769
     
 
        
Consumer Loans
        
Indirect
  
258
     
Home Equity
  
353
     
Direct
  
71
     
 
  
682
     
 
        
Residential Real Estate Mortgages
  
3,860
     
 
        
 
 
$
7,311
     
 
        
Total nonaccrual loans
 
$
41,418
  
$
39,676
 

 
The following tables set forth information with regard to past due and nonperforming loans by loan class as of September 30, 2013 and December 31, 2012:
 
Age Analysis of Past Due Financing Receivables
 
As of September 30, 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
 
$
76
  
$
1,031
  
$
-
  
$
1,107
  
$
4,409
  
$
589,008
  
$
594,524
 
Commercial Real Estate
  
478
   
-
   
-
   
478
   
8,642
   
910,134
   
919,254
 
Agricultural
  
140
   
-
   
-
   
140
   
1,076
   
63,576
   
64,792
 
Agricultural Real Estate
  
-
   
-
   
-
   
-
   
868
   
34,071
   
34,939
 
Business Banking
  
1,900
   
675
   
-
   
2,575
   
4,949
   
325,009
   
332,533
 
 
  
2,594
   
1,706
   
-
   
4,300
   
19,944
   
1,921,798
   
1,946,042
 
 
                            
Consumer Loans
                            
Indirect
  
10,530
   
2,331
   
1,229
   
14,090
   
1,440
   
1,098,286
   
1,113,816
 
Home Equity
  
6,513
   
1,648
   
768
   
8,929
   
5,965
   
527,428
   
542,322
 
Direct
  
625
   
156
   
107
   
888
   
92
   
59,638
   
60,618
 
 
  
17,668
   
4,135
   
2,104
   
23,907
   
7,497
   
1,685,352
   
1,716,756
 
Residential Real Estate Mortgages
  
2,955
   
172
   
994
   
4,121
   
6,666
   
691,880
   
702,667
 
 
 
$
23,217
  
$
6,013
  
$
3,098
  
$
32,328
  
$
34,107
  
$
4,299,030
  
$
4,365,465
 
 
                            
 
                            
ACQUIRED
                            
Commercial Loans
                            
Commercial
 
$
70
  
$
-
  
$
-
  
$
70
  
$
102
  
$
114,202
  
$
114,374
 
Commercial Real Estate
  
232
   
-
   
-
   
232
   
1,329
   
243,233
   
244,794
 
Business Banking
  
246
   
-
   
-
   
246
   
1,338
   
72,054
   
73,638
 
 
  
548
   
-
   
-
   
548
   
2,769
   
429,489
   
432,806
 
 
                            
Consumer Loans
                            
Indirect
  
526
   
116
   
32
   
674
   
258
   
143,588
   
144,520
 
Home Equity
  
750
   
-
   
154
   
904
   
353
   
89,443
   
90,700
 
Direct
  
113
   
16
   
2
   
131
   
71
   
8,047
   
8,249
 
 
  
1,389
   
132
   
188
   
1,709
   
682
   
241,078
   
243,469
 
Residential Real Estate Mortgages
  
2,479
   
317
   
-
   
2,796
   
3,860
   
318,835
   
325,491
 
 
 
$
4,416
  
$
449
  
$
188
  
$
5,053
  
$
7,311
  
$
989,402
  
$
1,001,766
 
Total Loans
 
$
27,633
  
$
6,462
  
$
3,286
  
$
37,381
  
$
41,418
  
$
5,288,432
  
$
5,367,231
 
 

 
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 September 30, 2013 and December 31, 2012:
 
 
 
September 30, 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
 
$
5,507
  
$
5,549
  
  
$
1,651
  
$
1,710
  
 
Commercial Real Estate
  
5,427
   
5,431
  
   
8,709
   
9,553
  
 
Agricultural
  
1,097
   
1,460
  
   
940
   
1,286
  
 
Agricultural Real Estate
  
1,529
   
1,936
  
   
1,713
   
2,026
  
 
Business Banking
  
6,533
   
8,927
  
   
7,048
   
9,579
  
 
Total Commercial Loans
  
20,093
   
23,303
  
   
20,061
   
24,154
  
 
 
         
          
 
Consumer Loans
         
          
 
Home Equity
  
3,304
   
3,496
  
   
2,553
   
2,657
  
 
 
         
          
 
Residential Real Estate Mortgages
  
2,234
   
2,626
  
   
2,011
   
2,308
  
 
 
 
$
25,631
  
$
29,425
  
  
$
24,625
  
$
29,119
  
 
 
         
          
 
With an allowance recorded:
         
          
 
Commercial Loans
         
          
 
Commercial
 
$
-
  
$
-
  
$
-
  
$
4,335
  
$
4,340
  
$
2,241
 
Commercial Real Estate
  
6,216
   
7,838
   
1,100
   
4,068
   
5,689
   
607
 
Agricultural
  
-
   
-
   
-
   
-
   
-
   
-
 
Agricultural Real Estate
  
-
   
-
   
-
   
-
   
-
   
-
 
 
  
6,216
   
7,838
   
1,100
   
8,403
   
10,029
   
2,848
 
 
                        
Total:
 
$
31,847
  
$
37,263
  
$
1,100
  
$
33,028
  
$
39,148
  
$
2,848
 

 
The following tables summarize the average recorded investments on impaired loans and the interest income recognized for the three and nine months ended September 30, 2013 and 2012:
 
 
 
For the three months ended
 
 
 
September 30, 2013
  
September 30, 2012
 
 
 
Average
  
Interest
  
Average
  
Interest Income
 
 
 
Recorded
  
Income
  
Recorded
  
Recognized
 
(in thousands)
 
Investment
  
Recognized
  
Investment
  
Accrual
 
Commercial Loans
 
  
  
  
 
Commercial
 
$
3,348
  
$
15
  
$
1,128
  
$
32
 
Commercial Real Estate
  
10,751
   
-
   
7,140
   
-
 
Agricultural
  
1,526
   
-
   
2,876
   
4
 
Agricultural Real Estate
  
897
   
12
   
1,876
   
12
 
Business Banking
  
6,581
   
13
   
6,572
   
-
 
Consumer Loans
                
Home Equity
  
3,064
   
8
   
1,828
   
5
 
Residential Real Estate Mortgages
  
2,066
   
15
   
1,055
   
1
 
Total:
 
$
28,233
  
$
63
  
$
22,475
  
$
54
 
 
                
 
 
For the nine months ended
 
 
 
September 30, 2013
  
September 30, 2012
 
 
 
Average
  
Interest
  
Average
  
Interest Income
 
 
 
Recorded
  
Income
  
Recorded
  
Recognized
 
(in thousands)
 
Investment
  
Recognized
  
Investment
  
Accrual
 
Commercial Loans
                
Commercial
 
$
4,069
  
$
45
  
$
1,551
  
$
101
 
Commercial Real Estate
  
10,660
   
51
   
6,481
   
-
 
Agricultural
  
1,100
   
1
   
2,997
   
40
 
Agricultural Real Estate
  
1,287
   
36
   
1,926
   
65
 
Business Banking
  
7,538
   
43
   
7,151
   
-
 
Consumer Loans
                
Home Equity
  
2,871
   
20
   
1,869
   
17
 
Residential Real Estate Mortgages
  
2,015
   
42
   
1,043
   
4
 
Total:
 
$
29,540
  
$
238
  
$
23,018
  
$
227
 
Financing receivable credit quality by loan class
The following tables illustrate the Company’s credit quality by loan class as of September 30, 2013 and December 31, 2012:

Credit Quality Indicators
 
As of September 30, 2013
 
 
 
  
  
  
  
 
ORIGINATED
 
  
  
  
  
 
 
 
  
Commercial
  
  
Agricultural
  
 
Commercial Credit Exposure
 
Commercial
  
Real Estate
  
Agricultural
  
Real Estate
  
Total
 
By Internally Assigned Grade:
 
  
  
  
  
 
Pass
 
$
574,229
  
$
903,073
  
$
59,797
  
$
31,418
  
$
1,568,517
 
Special Mention
  
10,098
   
50
   
389
   
43
   
10,580
 
Substandard
  
10,197
   
16,131
   
4,594
   
3,478
   
34,400
 
Doubtful
  
-
   
-
   
12
   
-
   
12
 
Total
 
$
594,524
  
$
919,254
  
$
64,792
  
$
34,939
  
$
1,613,509
 
 
                    
 
                    
Business Banking Credit Exposure
 
Small Business
              
Total
 
By Internally Assigned Grade:
                    
Non-classified
 
$
313,250
              
$
313,250
 
Classified
  
19,283
               
19,283
 
Total
 
$
332,533
              
$
332,533
 
 
                    
Consumer Credit Exposure
                    
By Payment Activity:
 
Indirect
  
Home Equity
  
Direct
      
Total
 
Performing
 
$
1,111,147
  
$
535,589
  
$
60,419
      
$
1,707,155
 
Nonperforming
  
2,669
   
6,733
   
199
       
9,601
 
Total
 
$
1,113,816
  
$
542,322
  
$
60,618
      
$
1,716,756
 
 
                    
 
 
Residential
                 
Residential Mortgage Credit Exposure
 
Mortgage
              
Total
 
By Payment Activity:
                    
Performing
 
$
695,007
              
$
695,007
 
Nonperforming
  
7,660
               
7,660
 
Total
 
$
702,667
              
$
702,667
 

Credit Quality Indicators
 
As of September 30, 2013
 
ACQUIRED
 
  
  
  
 
Commercial Credit Exposure
 
  
Commercial
  
  
 
By Internally Assigned Grade:
 
Commercial
  
Real Estate
  
Agricultural
  
Total
 
Pass
 
$
98,128
  
$
221,777
  
$
-
  
$
319,905
 
Special Mention
  
1,602
   
4,762
   
-
   
6,364
 
Substandard
  
14,644
   
18,255
   
-
   
32,899
 
Doubtful
  
-
   
-
   
-
   
-
 
Total
 
$
114,374
  
$
244,794
  
$
-
  
$
359,168
 
 
                
Business Banking Credit Exposure
                
By Internally Assigned Grade:
 
Small Business
          
Total
 
Non-classified
 
$
68,917
          
$
68,917
 
Classified
  
4,721
           
4,721
 
Total
 
$
73,638
          
$
73,638
 
 
                
Consumer Credit Exposure
                
By Payment Activity:
 
Indirect
  
Home Equity
  
Direct
  
Total
 
Performing
 
$
144,230
  
$
90,193
  
$
8,176
  
$
242,599
 
Nonperforming
  
290
   
507
   
73
   
870
 
Total
 
$
144,520
  
$
90,700
  
$
8,249
  
$
243,469
 
 
                
Residential Mortgage Credit Exposure
 
Residential
             
By Payment Activity:
 
Mortgage
          
Total
 
Performing
 
$
321,631
          
$
321,631
 
Nonperforming
  
3,860
           
3,860
 
Total
 
$
325,491
          
$
325,491
 

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