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CREDIT QUALITY ASSESSMENT
 12 Months Ended
Dec. 31, 2012
Credit Quality Assessment [Abstract]  
Credit Quality Assessment

Note 6 – CREDIT QUALITY ASSESSMENT

Allowance for Loan and Lease Losses

Credit risk can vary significantly as losses, as a percentage of outstanding loans, can vary widely during economic cycles and are sensitive to changing economic conditions. The amount of loss in any particular type of loan can vary depending on the purpose of the loan and the underlying collateral securing the loan. Collateral securing commercial loans can range from accounts receivable to equipment to improved or unimproved real estate depending on the purpose of the loan. Home mortgage and home equity loans and lines are typically secured by first or second liens on residential real estate. Consumer loans may be secured by personal property, such as auto loans or they may be unsecured loan products.

Management has an internal credit process in place to maintain credit standards. This process along with an in-house loan administration, accompanied by oversight and review procedures, combines to control and manage credit risk. The primary purpose of loan underwriting is the evaluation of specific lending risks that involves the analysis of the borrower’s ability to service the debt as well as the assessment of the value of the underlying collateral. Oversight and review procedures include the monitoring of the portfolio credit quality, early identification of potential problem credits and the management of the problem credits. As part of the oversight and review process, the Company maintains an allowance for loan and lease losses (the “allowance”) to absorb estimated and probable losses in the loan and lease portfolio. The allowance is based on consistent, periodic review and evaluation of the loan and lease portfolio, along with ongoing, monthly assessments of the probable losses and problem credits in each portfolio. While portions of the allowance are attributed to specific portfolio segments, the entire allowance is available to absorb credit losses inherent in the total loan portfolio.

 

 Summary information on the allowance for loan and lease loss activity for the years ended December 31 is provided in the following table:

Year Ended December 31,
(In thousands) 2012 2011 2010
Balance at beginning of year $ 49,426 $ 62,135 $ 64,559
Provision for loan and lease losses 3,649 1,428 25,908
Loan and lease charge-offs (12,804 ) (16,505 ) (32,616 )
Loan and lease recoveries 2,686 2,368 4,284
Net charge-offs (10,118 ) (14,137 ) (28,332 )
Balance at period end $ 42,957 $ 49,426 $ 62,135

The following tables provide information on the activity in the allowance for loan and lease losses by the respective loan portfolio segment for the years ended December 31:

2012
Commercial Real Estate Residential Real Estate
Commercial
Commercial Commercial Commercial Owner Residential Residential
(Dollars in thousands) Business AD&C Investor R/E Occupied R/E Leasing Consumer Mortgage Construction Total
Balance at beginning of year $ 6,727 $ 6,664 $ 8,248 $ 7,329 $ 795 $ 4,873 $ 10,583 $ 4,207 $ 49,426
Provision (credit) (758 ) 826 4,928 804 (478 ) 44 (167 ) (1,550 ) 3,649
Charge-offs (1,022 ) (3,281 ) (3,690 ) (1,174 ) (8 ) (1,298 ) (2,107 ) (224 ) (12,804 )
Recoveries 1,548 528 97 38 23 227 213 12 2,686
Net charge-offs 526 (2,753 ) (3,593 ) (1,136 ) 15 (1,071 ) (1,894 ) (212 ) (10,118 )
Balance at end of period $ 6,495 $ 4,737 $ 9,583 $ 6,997 $ 332 $ 3,846 $ 8,522 $ 2,445 $ 42,957
Total loans and leases $ 346,708 $ 151,933 $ 456,888 $ 571,510 $ 3,421 $ 356,990 $ 523,364 $ 120,314 $ 2,531,128
Allowance for loans and leases to total loans and leases ratio 1.87 % 3.12 % 2.10 % 1.22 % 9.70 % 1.08 % 1.63 % 2.03 % 1.70 %
Balance of loans specifically evaluated for impairment $ 8,984 $ 6,332 $ 11,843 $ 15,184 na. $ 31 $ 4,528 $ 1,871 $ 48,773
Allowance for loans specifically evaluated for impairment $ 2,597 $ - $ 774 $ 598 na. na. $ 713 $ 467 $ 5,149
Specific allowance to specific loans ratio 28.91 % 0.00 % 6.54 % 3.94 % na. na. 15.75 % 24.96 % 10.56 %
Balance of loans collectively evaluated $ 337,724 $ 145,601 $ 445,045 $ 556,326 $ 3,421 $ 356,959 $ 518,836 $ 118,443 $ 2,482,355
Allowance for loans collectively evaluated $ 3,898 $ 4,737 $ 8,809 $ 6,399 $ 332 $ 3,846 $ 7,809 $ 1,978 $ 37,808
Collective allowance to collective loans ratio 1.15 % 3.25 % 1.98 % 1.15 % 9.70 % 1.08 % 1.51 % 1.67 % 1.52 %

2011
Commercial Real Estate Residential Real Estate
Commercial
Commercial Commercial Commercial Owner Residential Residential
(Dollars in thousands) Business AD&C Investor R/E Occupied R/E Leasing Consumer Mortgage Construction Total
Balance at beginning of year $ 12,870 $ 18,241 $ 4,793 $ 8,177 $ 667 $ 4,231 $ 10,396 $ 2,760 $ 62,135
Provision (credit) (4,252 ) (11,035 ) 4,320 (361 ) 1,182 3,173 5,144 3,257 1,428
Charge-offs (2,565 ) (1,780 ) (868 ) (487 ) (1,072 ) (2,740 ) (5,178 ) (1,815 ) (16,505 )
Recoveries 674 1,238 3 - 18 209 221 5 2,368
Net charge-offs (1,891 ) (542 ) (865 ) (487 ) (1,054 ) (2,531 ) (4,957 ) (1,810 ) (14,137 )
Balance at end of year $ 6,727 $ 6,664 $ 8,248 $ 7,329 $ 795 $ 4,873 $ 10,583 $ 4,207 $ 49,426
Total loans and leases $ 260,327 $ 160,946 $ 371,948 $ 522,076 $ 6,954 $ 360,080 $ 448,662 $ 108,699 $ 2,239,692
Allowance for loans and leases to total loans and leases ratio 2.58 % 4.14 % 2.22 % 1.40 % 11.43 % 1.35 % 2.36 % 3.87 % 2.21 %
Balance of loans specifically evaluated for impairment $ 9,092 $ 18,701 $ 16,964 $ 15,416 na. $ 35 $ 5,108 $ 2,259 $ 67,575
Allowance for loans specifically evaluated for impairment $ 1,037 $ 7 $ 3,380 $ 1,772 na. na. $ 769 $ 826 $ 7,791
Specific allowance to specific loans ratio 11.41 % 0.04 % 19.92 % 11.49 % na. na. 15.05 % 36.56 % 11.53 %
Balance of loans collectively evaluated $ 251,235 $ 142,245 $ 354,984 $ 506,660 $ 6,954 $ 360,045 $ 443,554 $ 106,440 $ 2,172,117
Allowance for loans collectively evaluated $ 5,690 $ 6,657 $ 4,868 $ 5,557 $ 795 $ 4,873 $ 9,814 $ 3,381 $ 41,635
Collective allowance to collective loans ratio 2.26 % 4.68 % 1.37 % 1.10 % 11.43 % 1.35 % 2.21 % 3.18 % 1.92 %

 

The Company’s methodology for evaluating whether a loan is impaired begins with risk-rating credits on an individual basis and includes consideration of the borrower’s overall financial condition, payment record and available cash resources that may include the collateral value and, in a select few cases, verifiable support from financial guarantors. In measuring impairment, the Company looks primarily to the discounted cash flows of the project itself or to the value of the collateral as the primary sources of repayment of the loan. Collateral values or estimates of discounted cash flows (inclusive of any potential cash flow from guarantees) are evaluated to estimate the probability and severity of potential losses. The actual occurrence and severity of losses involving impaired credits can differ substantially from estimates.

The Company may consider the existence of guarantees and the financial strength and wherewithal of the guarantors involved in any loan relationship. Guarantees may be considered as a source of repayment based on the guarantor’s financial condition and respective payment capacity. Accordingly, absent a verifiable payment capacity, a guarantee alone would not be sufficient to avoid classifying the loan as impaired.

Management has established a credit process that dictates that procedures be performed to monitor impaired loans between the receipt of an original appraisal and the updated appraisal. These procedures include the following:

· An internal evaluation is updated quarterly to include borrower financial statements and/or cash flow projections.
· The borrower may be contacted for a meeting to discuss an updated or revised action plan which may include a request for additional collateral.
· Re-verification of the documentation supporting the Company’s position with respect to the collateral securing the loan.
· At the monthly credit committee meeting the loan may be downgraded.
· Upon receipt of the updated appraisal or based on an updated internal financial evaluation, the loan balance is compared to the appraisal and a specific allowance is determined for the particular loan, typically for the amount of the difference between the appraisal and the loan balance.
· The Company will specifically reserve for or charge-off the excess of the loan amount over the amount of the appraisal. In certain cases the Company may establish a larger reserve due to knowledge of current market conditions or the existence of an offer for the collateral that will facilitate a more timely resolution of the loan.

The Company generally follows a policy of not extending maturities on non-performing loans under existing terms. Certain performing loans that have displayed some inherent weakness in the underlying collateral values, an inability to comply with certain loan covenants which do not affect the performance of the credit or other identified weakness may have their terms extended on an exception basis. Maturity date extensions only occur under revised terms that place the Company in a better position to fully collect the loan under the contractual terms and /or terms at the time of the extension that may eliminate or mitigate the inherent weakness in the loan. These terms may incorporate, but are not limited to additional assignment of collateral, significant balance curtailments/liquidations and assignments of additional project cash flows. Documented or demonstrated guarantees may be a consideration in the extension of loan maturities. As a general matter, the Company does not view extension of a loan to be a satisfactory approach to resolving non-performing credits.

Loans that have their terms restructured (e.g., interest rates, loan maturity date, payment and amortization period, etc.) in circumstances that provide payment relief or other concessions to a borrower experiencing financial difficulty are considered trouble debt restructured loans. All restructurings that constitute concessions to a troubled borrower are considered impaired loans that may either be in accruing status or non-accruing status. Non-accruing restructured loans may return to accruing status provided there is a sufficient period of payment performance in accordance with the restructure terms. Loans may be removed from the restructured category in the year subsequent to the restructuring if their revised loans terms are considered to be consistent with terms that can be obtained in the credit market for loans with comparable risk. At December 31, 2012, restructured loans totaled $20.0 million, of which $10.1 million were accruing and $9.9 million were non-accruing. The Company has commitments to lend $5.1 million in additional funds on loans that have been restructured at December 31, 2012. Restructured loans at December 31, 2011 totaled $27.1 million, of which $6.9 million were accruing and $20.2 million were non-accruing. Commitments to lend additional funds on loans that have been restructured at December 31, 2011 amounted to $2.6 million.

 

The following table provides summary information regarding impaired loans at December 31 and for the years then ended:

(In thousands) 2012 2011 2010
Impaired loans with a valuation allowance $ 27,526 $ 36,742 $ 18,946
Impaired loans without a valuation allowance 21,247 30,833 50,668
Total impaired loans $ 48,773 $ 67,575 $ 69,614
Allowance for loan and lease losses related to impaired loans $ 5,149 $ 7,791 $ 3,845
Allowance for loan and lease losses related to loans collectively evaluated 37,808 41,635 58,290
Total allowance for loan and lease losses $ 42,957 $ 49,426 $ 62,135
Average impaired loans for the period $ 57,438 $ 68,377 $ 75,556
Contractual interest income due on impaired loans during the period $ 4,433 $ 4,973 $ 6,651
Interest income on impaired loans recognized on a cash basis $ 1,121 $ 1,523 $ -
Interest income on impaired loans recognized on an accrual basis $ 560 $ 325 $ 524

The following tables present the recorded investment with respect to impaired loans, the associated allowance by the applicable portfolio segment and the principal balance of the impaired loans prior to amounts charged-off at December 31 for the years indicated:

2012
Commercial Real Estate Total Recorded
Commercial All Investment in
Commercial Commercial Owner Other Impaired
(In thousands) Commercial AD&C Investor R/E Occupied R/E Loans Loans
Impaired loans with a specific allowance
Non-accruing $ 2,514 $ - $ 10,219 $ 4,319 $ - $ 17,052
Restructured accruing 2,981 - - 1,503 3,419 7,903
Restructured non-accruing 228 - - 1,039 1,304 2,571
Balance $ 5,723 $ - $ 10,219 $ 6,861 $ 4,723 $ 27,526
Allowance $ 2,597 $ - $ 774 $ 598 $ 1,180 $ 5,149
Impaired loans without a specific allowance
Non-accruing $ 1,846 $ 3,033 $ 577 $ 6,191 $ - $ 11,647
Restructured accruing 1,392 - - - 815 2,207
Restructured non-accruing 23 3,299 1,047 2,132 892 7,393
Balance $ 3,261 $ 6,332 $ 1,624 $ 8,323 $ 1,707 $ 21,247
Total impaired loans
Non-accruing $ 4,360 $ 3,033 $ 10,796 $ 10,510 $ - $ 28,699
Restructured accruing 4,373 - - 1,503 4,234 10,110
Restructured non-accruing 251 3,299 1,047 3,170 2,196 9,964
Balance $ 8,984 $ 6,332 $ 11,843 $ 15,184 $ 6,430 $ 48,773
Unpaid principal balance in total impaired loans $ 11,506 $ 21,590 $ 15,405 $ 17,928 $ 6,904 $ 73,333

2012
Commercial Real Estate Total Recorded
Commercial All Investment in
Commercial Commercial Owner Other Impaired
(In thousands) Commercial AD&C Investor R/E Occupied R/E Loans Loans
Average impaired loans for the period $ 8,659 $ 12,270 $ 13,838 $ 16,172 $ 6,499 $ 57,438
Contractual interest income due on impaired loans during the period $ 527 $ 1,222 $ 1,181 $ 1,391 $ 112
Interest income on impaired loans recognized on a cash basis $ 121 $ 323 $ 175 $ 420 $ 82
Interest income on impaired loans recognized on an accrual basis $ 257 $ - $ - $ 102 $ 201

 

2011
Commercial Real Estate Total Recorded
Commercial All Investment in
Commercial Commercial Owner Other Impaired
(In thousands) Commercial AD&C Investor R/E Occupied R/E Loans Loans
Impaired loans with a specific allowance
Non-accruing $ 1,110 $ - $ 13,812 $ 4,091 $ 1,093 $ 20,106
Restructured accruing 1,346 - - 707 3,475 5,528
Restructured non-accruing 307 6,504 628 3,282 387 11,108
Balance $ 2,763 $ 6,504 $ 14,440 $ 8,080 $ 4,955 $ 36,742
Allowance $ 1,037 $ 7 $ 3,380 $ 1,772 $ 1,595 $ 7,791
Impaired loans without a specific allowance
Non-accruing $ 3,416 $ 7,798 $ 1,883 $ 6,464 $ 800 $ 20,361
Restructured accruing 520 - - - 833 1,353
Restructured non-accruing 2,393 4,399 641 872 814 9,119
Balance $ 6,329 $ 12,197 $ 2,524 $ 7,336 $ 2,447 $ 30,833
Total impaired loans
Non-accruing $ 4,526 $ 7,798 $ 15,695 $ 10,555 $ 1,893 $ 40,467
Restructured accruing 1,866 - - 707 4,308 6,881
Restructured non-accruing 2,700 10,903 1,269 4,154 1,201 20,227
Balance $ 9,092 $ 18,701 $ 16,964 $ 15,416 $ 7,402 $ 67,575
Unpaid principal balance in total impaired loans $ 11,303 $ 37,442 $ 17,389 $ 16,466 $ - $ 82,600

2011
Commercial Real Estate Total Recorded
Commercial All Investment in
Commercial Commercial Owner Other Impaired
(In thousands) Commercial AD&C Investor R/E Occupied R/E Loans Loans
Average impaired loans for the period $ 9,800 $ 27,005 $ 11,409 $ 13,942 $ 6,221 $ 68,377
Contractual interest income due on impaired loans during the period $ 583 $ 1,743 $ 830 $ 800 $ 1,017
Interest income on impaired loans recognized on a cash basis $ 267 $ 487 $ 93 $ 471 $ 205
Interest income on impaired loans recognized on an accrual basis $ 114 $ - $ - $ 45 $ 166

Credit Quality

The following tables provide information on the credit quality of the loan portfolio by segment at December 31 for the years indicated:

2012
Commercial Real Estate Residential Real Estate
Commercial
Commercial Commercial Owner Residential Residential
(In thousands) Commercial AD&C Investor R/E Occupied R/E Leasing Consumer Mortgage Construction Total
Non-performing loans and assets:
Non-accrual loans and leases $ 4,611 $ 6,332 $ 11,843 $ 13,681 $ 865 $ 2,410 $ 4,681 $ 3,125 $ 47,548
Loans and leases 90 days past due 24 - - 209 - 14 - - 247
Restructured loans and leases 4,373 - - 1,503 - 31 4,203 - 10,110
Total non-performing loans and leases 9,008 6,332 11,843 15,393 865 2,455 8,884 3,125 57,905
Other real estate owned 1,829 - 220 2,396 - - 1,401 80 5,926
Total non-performing assets $ 10,837 $ 6,332 $ 12,063 $ 17,789 $ 865 $ 2,455 $ 10,285 $ 3,205 $ 63,831

 

 2011
Commercial Real Estate Residential Real Estate
Commercial
Commercial Commercial Owner Residential Residential
(In thousands) Commercial AD&C Investor R/E Occupied R/E Leasing Consumer Mortgage Construction Total
Non-performing loans and assets:
Non-accrual loans and leases $ 7,226 $ 18,702 $ 16,963 $ 14,709 $ 853 $ 1,786 $ 5,722 $ 5,719 $ 71,680
Loans and leases 90 days past due - - - - 2 165 167 243 577
Restructured loans and leases 1,866 - - 707 - 35 3,579 694 6,881
Total non-performing loans and leases 9,092 18,702 16,963 15,416 855 1,986 9,468 6,656 79,138
Other real estate owned 100 - 462 273 - - 3,395 201 4,431
Total non-performing assets $ 9,192 $ 18,702 $ 17,425 $ 15,689 $ 855 $ 1,986 $ 12,863 $ 6,857 $ 83,569

2012
Commercial Real Estate Residential Real Estate
Commercial
Commercial Commercial Owner Residential Residential
(In thousands) Commercial AD&C Investor R/E Occupied R/E Leasing Consumer Mortgage Construction Total
Past due loans and leases
31-60 days $ 2,138 $ - $ 2,020 $ 1,556 $ 7 $ 496 $ 5,443 $ - $ 11,660
61-90 days 212 - - 1,809 68 101 1,603 - 3,793
> 90 days 24 - - 209 - 14 - - 247
Total past due 2,374 - 2,020 3,574 75 611 7,046 - 15,700
Non-accrual loans and leases 4,611 6,332 11,843 13,681 865 2,410 4,681 3,125 47,548
Loans aquired with deteriorated credit quality 1,978 332 949 3,941 - - - - 7,200
Current loans 337,745 145,269 442,076 550,314 2,481 353,969 511,637 117,189 2,460,680
Total loans and leases $ 346,708 $ 151,933 $ 456,888 $ 571,510 $ 3,421 $ 356,990 $ 523,364 $ 120,314 $ 2,531,128

2011
Commercial Real Estate Residential Real Estate
Commercial
Commercial Commercial Owner Residential Residential
(In thousands) Commercial AD&C Investor R/E Occupied R/E Leasing Consumer Mortgage Construction Total
Past due loans and leases
31-60 days $ 1,467 $ 717 $ 10,723 $ 1,677 $ 7 $ 467 $ 5,246 $ 1,732 $ 22,036
61-90 days 62 - - 2,537 - 20 1,639 - 4,258
> 90 days - - - - 2 165 167 243 577
Total past due 1,529 717 10,723 4,214 9 652 7,052 1,975 26,871
Non-accrual loans and leases 7,226 18,702 16,963 14,709 853 1,786 5,722 5,719 71,680
Current loans 251,572 141,527 344,262 503,153 6,092 357,642 435,888 101,005 2,141,141
Total loans and leases $ 260,327 $ 160,946 $ 371,948 $ 522,076 $ 6,954 $ 360,080 $ 448,662 $ 108,699 $ 2,239,692

Loans and leases are monitored for credit quality on a recurring basis. The credit quality indicators used are dependent on the portfolio segment to which the loan relates. Commercial loans and leases and non-commercial loans and leases have different credit quality indicators as a result of the methods used to monitor each of these loan segments.

The credit quality indicators for commercial loans and leases are developed through review of individual borrowers on an ongoing basis. Each borrower is evaluated at least annually with more frequent evaluation of more severely criticized loans and leases. The indicators represent the rating for loans or leases as of the date presented based on the most recent credit review performed. These credit quality indicators are defined as follows:

Pass - A pass rated credit is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention credit has potential weaknesses that deserve management’s close attention. If uncorrected, such weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

 

Substandard – A substandard loan is inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – A loan that is classified as doubtful has all the weaknesses inherent in a loan classified as substandard with added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.

Loss – Loans classified as a loss are considered uncollectible and of such little value that their continuing to be carried as a loan is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.

The following tables provide information by credit risk rating indicators for each segment of the commercial loan portfolio at December 31 for the years indicated:

2012
Commercial Real Estate
Commercial
Commercial Commercial Owner
(In thousands) Commercial AD&C Investor R/E Occupied R/E Total
Pass $ 305,348 $ 141,802 $ 405,448 $ 520,844 $ 1,374,262
Special Mention 13,603 1,793 21,963 17,262 54,621
Substandard 26,091 8,338 28,885 32,613 95,107
Doubtful 1,666 - 592 791 3,049
Total $ 346,708 $ 151,933 $ 456,888 $ 571,510 $ 1,527,039

2011
Commercial Real Estate
Commercial
Commercial Commercial Owner
(In thousands) Commercial AD&C Investor R/E Occupied R/E Total
Pass $ 225,048 $ 137,181 $ 331,095 $ 469,309 $ 1,162,633
Special Mention 8,551 2,207 9,592 22,103 42,453
Substandard 25,720 21,558 31,261 30,664 109,203
Doubtful 1,008 - - - 1,008
Total $ 260,327 $ 160,946 $ 371,948 $ 522,076 $ 1,315,297

Homogeneous loan pools do not have individual loans subjected to internal risk ratings therefore, the credit indicator applied to these pools is based on their delinquency status. The following tables provide information by credit risk rating indicators for those remaining segments of the loan portfolio at December 31 for the years indicated:

2012
Residential Real Estate
Residential Residential
(In thousands) Leasing Consumer Mortgage Construction Total
Performing $ 2,556 $ 354,535 $ 514,480 $ 117,189 $ 988,760
Non-performing:
90 days past due - 14 - - 14
Non-accruing 865 2,410 4,681 3,125 11,081
Restructured loans and leases - 31 4,203 - 4,234
Total $ 3,421 $ 356,990 $ 523,364 $ 120,314 $ 1,004,089

2011
Residential Real Estate
Residential Residential
(In thousands) Leasing Consumer Mortgage Construction Total
Performing $ 6,099 $ 358,094 $ 439,194 $ 102,043 $ 905,430
Non-performing:
90 days past due 2 165 167 243 577
Non-accruing 853 1,786 5,722 5,719 14,080
Restructured loans and leases - 35 3,579 694 4,308
Total $ 6,954 $ 360,080 $ 448,662 $ 108,699 $ 924,395

During the year ended December 31, 2012, the Company restructured $4.9 million in loans. Modifications consisted principally of interest rate concessions. No modifications resulted in the reduction of the recorded investment in the associated loan balances. Restructured loans are subject to periodic credit reviews to determine the necessity and adequacy of a specific loan loss allowance based on the collectability of the recorded investment in the restructured loan. Loans restructured during 2012 have specific reserves of $1.2 million at December 31, 2012. For the year ended December 31, 2011, the Company restructured $10.3 million in loans. Modifications consisted principally of interest rate concessions and no modifications resulted in the reduction of the recorded investment in the associated loan balances. Loans restructured during 2011 had specific reserves of $1.9 million thousand at December 31, 2011.

The following table provides the amounts of the restructured loans at the date of restructuring for specific segments of the loan portfolio during the period indicated:

For the Year Ended December 31, 2012
Commercial Real Estate
Commercial All
Commercial Commercial Owner Other
(In thousands) Commercial AD&C Investor R/E Occupied R/E Loans Total
Troubled debt restructurings
Restructured accruing $ 2,600 $ - $ - $ 1,014 $ - $ 3,614
Restructured non-accruing - - - - 1,304 1,304
Balance $ 2,600 $ - $ - $ 1,014 $ 1,304 $ 4,918
Specific allowance $ 552 $ - $ - $ 204 $ 467 $ 1,223
Restructured and subsequently defaulted $ - $ - $ - $ - $ - $ -

For the Year Ended December 31, 2011
Commercial Real Estate
Commercial All
Commercial Commercial Owner Other
(In thousands) Commercial AD&C Investor R/E Occupied R/E Loans Total
Troubled debt restructurings
Restructured accruing $ 1,696 $ - $ - $ - $ 3,590 $ 5,286
Restructured non-accruing 469 - 1,269 2,475 763 4,976
Balance $ 2,165 $ - $ 1,269 $ 2,475 $ 4,353 $ 10,262
Specific allowance $ 254 $ - $ 93 $ 509 $ 1,027 $ 1,883
Restructured and subsequently defaulted $ - $ - $ - $ - $ 509 $ 509

Changes in the accretable yield related to loans acquired with evidence of deteriorated credit quality are as follows:

(In thousands) Amount
Balance at January 1, 2012 $ -
CommerceFirst acquisition 1,056
Accretion recognized to date (363 )
Net reclassification from accretable to non-accretable -
Balance at December 31, 2012 $ 693

Other Real Estate Owned

Other real estate owned totaled $5.9 million and $4.4 million at December 31, 2012 and 2011, respectively. The increase compared to the prior year end was due primarily to balances added as a result of the CommerceFirst acquisition.