Credit Quality Assessment (Tables)

3 Months Ended

Mar. 31, 2013

Summary Information on Allowance for Loan and Lease Loss Activity

Summary information on the allowance for loan and lease loss activity for the period indicated is provided in the following table:

	Three Months Ended March 31,
(In thousands)	2013			2012
Balance at beginning of year	$	42,957		$	49,426
Provision for loan and lease losses		78			664
Loan and lease charge-offs		(3,108	)		(5,298	)
Loan and lease recoveries		1,319			269
Net charge-offs		(1,789	)		(5,029	)
Balance at period end	$	41,246		$	45,061

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 period indicated:

	For the Three Months Ended March 31, 2013
				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	$	6,495		$	4,737		$	9,583		$	6,997		$	332		$	3,846		$	8,522		$	2,445		$	42,957
Provision (credit)		2,505			(1,831	)		(934	)		37			(252	)		535			44			(26	)		78
Charge-offs		(1,857	)		-			(131	)		(91	)#		-			(564	)		(465	)		-			(3,108	)
Recoveries		113			1,020			100			10			-			56			18			2			1,319
Net charge-offs		(1,744	)		1,020			(31	)		(81	)		-			(508	)		(447	)		2			(1,789	)
Balance at end of period	$	7,256		$	3,926		$	8,618		$	6,953		$	80		$	3,873		$	8,119		$	2,421		$	41,246
Total loans and leases	$	344,489		$	150,599		$	487,802		$	565,820		$	1,974		$	353,341		$	538,346		$	122,698		$	2,565,069
Allowance for loans and leases to total loans and leases ratio		2.11	%		2.61	%		1.77	%		1.23	%		4.05	%		1.10	%		1.51	%		1.97	%		1.61	%
Balance of loans specifically evaluated for impairment	$	7,887		$	5,826		$	13,205		$	7,243			na.		$	31		$	4,506		$	2,004		$	40,702
Allowance for loans specifically evaluated for impairment	$	1,940		$	149		$	242		$	377			na.			na.		$	698		$	609		$	4,015
Specific allowance to specific loans ratio		24.60	%		2.56	%		1.83	%		5.21	%		na.			na.			15.49	%		30.39	%		9.86	%
Balance of loans collectively evaluated	$	336,602		$	144,773		$	474,597		$	558,577		$	1,974		$	353,310		$	533,840		$	120,694		$	2,524,367
Allowance for loans collectively evaluated	$	5,316		$	3,777		$	8,376		$	6,576		$	80		$	3,873		$	7,421		$	1,812		$	37,231
Collective allowance to collective loans ratio		1.58	%		2.61	%		1.76	%		1.18	%		4.05	%		1.10	%		1.39	%		1.50	%		1.47	%

	For the Year 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	%

Summary of Impaired Loans

The following table provides summary information regarding impaired loans at the dates indicated and for the periods then ended:

(In thousands)	March 31, 2013		December 31, 2012
Impaired loans with a specific allowance	$	14,232	$	27,526
Impaired loans without a specific allowance		26,470		21,247
Total impaired loans	$	40,702	$	48,773
Allowance for loan and lease losses related to impaired loans	$	4,015	$	5,149
Allowance for loan and lease losses related to loans collectively evaluated		37,231		37,808
Total allowance for loan and lease losses	$	41,246	$	42,957
Average impaired loans for the period	$	44,738	$	57,438
Contractual interest income due on impaired loans during the period	$	821	$	4,433
Interest income on impaired loans recognized on a cash basis	$	1,041	$	1,121
Interest income on impaired loans recognized on an accrual basis	$	141	$	560

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 the dates indicated:

	March 31, 2013
			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	$	2,149	$	-	$	811	$	211	$	-	$	3,171
Restructured accruing		2,693		-		-		1,301		3,404		7,398
Restructured non-accruing		132		1,055		-		1,030		1,446		3,663
Balance	$	4,974	$	1,055	$	811	$	2,542	$	4,850	$	14,232
Allowance	$	1,940	$	149	$	242	$	377	$	1,307	$	4,015
Impaired loans without a specific allowance
Non-accruing	$	1,422	$	3,246	$	10,515	$	2,028	$	-	$	17,211
Restructured accruing		1,182		-		852		596		811		3,441
Restructured non-accruing		309		1,525		1,027		2,077		880		5,818
Balance	$	2,913	$	4,771	$	12,394	$	4,701	$	1,691	$	26,470
Total impaired loans
Non-accruing	$	3,571	$	3,246	$	11,326	$	2,239	$	-	$	20,382
Restructured accruing		3,875		-		852		1,897		4,215		10,839
Restructured non-accruing		441		2,580		1,027		3,107		2,326		9,481
Balance	$	7,887	$	5,826	$	13,205	$	7,243	$	6,541	$	40,702
Unpaid principal balance in total impaired loans	$	7,932	$	15,723	$	16,206	$	7,337	$	2,821	$	50,019

	March 31, 2013
			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	$	8,436	$	6,079	$	12,524	$	11,214	$	6,486	$	44,738
Contractual interest income due on impaired loans during the period	$	74	$	152	$	269	$	208	$	118
Interest income on impaired loans recognized on a cash basis	$	30	$	50	$	169	$	777	$	15
Interest income on impaired loans recognized on an accrual basis	$	53	$	-	$	7	$	30	$	51

	December 31, 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

	December 31, 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

Credit Quality of Loan Portfolio by Segment

The following tables provide information on the credit quality of the loan portfolio by segment at the dates indicated:

	March 31, 2013
			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	$	4,012	$	5,826	$	12,353	$	5,346	$	-	$	2,388	$	5,393	$	3,258	$	38,576
Loans and leases 90 days past due		-		-		-		-		-		54		-		-		54
Restructured loans and leases		3,875		-		852		1,897		-		31		4,184		-		10,839
Total non-performing loans and leases		7,887		5,826		13,205		7,243		-		2,473		9,577		3,258		49,469
Other real estate owned		1,829		-		80		2,223		-		-		1,118		-		5,250
Total non-performing assets	$	9,716	$	5,826	$	13,285	$	9,466	$	-	$	2,473	$	10,695	$	3,258	$	54,719

	December 31, 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

	March 31, 2013
			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	$	5,296	$	2,148	$	10,997	$	6,362	$	-	$	873	$	5,459	$	-	$	31,135
61-90 days		-		-		-		-		-		217		61		-		278
> 90 days		-		-		-		-		-		54		-		-		54
Total past due		5,296		2,148		10,997		6,362		-		1,144		5,520		-		31,467
Non-accrual loans and leases		4,012		5,826		12,353		5,346		-		2,388		5,393		3,258		38,576
Loans aquired with deteriorated credit quality		1,996		331		2,251		4,514		-		-		-		-		9,092
Current loans		333,185		142,294		462,201		549,598		1,974		349,809		527,433		119,440		2,485,934
Total loans and leases	$	344,489	$	150,599	$	487,802	$	565,820	$	1,974	$	353,341	$	538,346	$	122,698	$	2,565,069

	December 31, 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

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 Three Months Ended March 31, 2013
			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	$	-	$	-	$	852	$	402	$	-	$	1,254
Restructured non-accruing		145		-		-		-		-		145
Balance	$	-	$	-	$	852	$	402	$	-	$	1,399
Specific allowance	$	32	$	-	$	-	$	-	$	-	$	32
Restructured and subsequently defaulted	$	-	$	-	$	-	$	-	$	-	$	-

	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	$	-	$	-	$	-	$	-	$	-	$	-

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, 2013	$	693
Accretion recognized to date		(98	)
Net reclassification from accretable to non-accretable		-
Balance at March 31, 2013	$	595

Commercial

Credit Risk Rating Indicators

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

	March 31, 2013
			Commercial Real Estate
							Commercial
			Commercial		Commercial		Owner
(In thousands)	Commercial		AD&C		Investor R/E		Occupied R/E		Total
Pass	$	293,923	$	139,623	$	431,166	$	517,084	$	1,381,796
Special Mention		18,030		374		15,775		18,966		53,145
Substandard		31,312		10,602		40,307		28,999		111,220
Doubtful		1,224		-		554		771		2,549
Total	$	344,489	$	150,599	$	487,802	$	565,820	$	1,548,710

	December 31, 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	$	1,373,442
Special Mention		13,603		1,793		21,963		17,262		54,621
Substandard		26,091		8,338		28,885		32,613		95,927
Doubtful		1,666		-		592		791		3,049
Total	$	346,708	$	151,933	$	456,888	$	571,510	$	1,527,039

Non Commercial Loan

Credit Risk Rating Indicators

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 the dates indicated:

	March 31, 2013
					Residential Real Estate
					Residential		Residential
(In thousands)	Leasing		Consumer		Mortgage		Construction		Total
Performing	$	1,974	$	350,868	$	528,769	$	119,440	$	1,001,051
Non-performing:
90 days past due		-		54		-		-		54
Non-accruing		-		2,388		5,393		3,258		11,039
Restructured loans and leases		-		31		4,184		-		4,215
Total	$	1,974	$	353,341	$	538,346	$	122,698	$	1,016,359

	December 31, 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