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CREDIT QUALITY ASSESSMENT (Tables)
 12 Months Ended
Dec. 31, 2012
Summary Information on Allowance for Loan and Lease Loss Activity

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  
Activity in Allowance for Loan and Lease Losses by Respective Loan Portfolio Segment

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 %
Summary of Impaired Loans

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  

 
Recorded Investment with Respect to Impaired loans, Associated Allowance by Applicable Portfolio Segment and Principal Balance of Impaired Loans Prior to Amounts Charged-Off

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 of Loan Portfolio by Segment

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  

 
Restructured Loans for Specific Segments of Loan Portfolio

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 Accretable Discount Related to Acquired Credit Impaired Loans

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
Commercial Loan
  
Credit Risk Rating Indicators

 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  

 
Non Commercial Loan
  
Credit Risk Rating Indicators

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