5. Loans and Leases

Loans and Leases at March 31, 2012, and December 31, 2011 were as follows:

(in thousands)	03/31/2012			12/31/2011
Commercial and industrial
Agriculture	$	53,070		$	67,566
Commercial and industrial other		410,563			417,128
Subtotal commercial and industrial		463,633			484,694
Commercial real estate
Construction		27,811			47,304
Agriculture		53,334			53,071
Commercial real estate other		690,524			665,859
Subtotal commercial real estate		771,669			766,234
Residential real estate
Home equity		157,405			161,278
Mortgages		517,824			500,034
Subtotal residential real estate		675,229			661,312
Consumer and other
Indirect		31,368			32,787
Consumer and other		30,371			30,961
Subtotal consumer and other		61,739			63,748
Leases		5,867			6,489
Total loans and leases		1,978,137			1,982,477
Less: unearned income and deferred costs and fees		(568	)		(628	)
Total loans and leases, net of unearned income and deferred costs and fees	$	1,977,569		$	1,981,849

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 5 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. There have been no significant changes in these policies and guidelines. As such, these policies are reflective of new originations as well as those balances held at March 31, 2012. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan originations, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Generally loans are placed on nonaccrual status if principal or interest payments become 90 days or more past due and/or management deem the collectability of the principal and/or interest to be in question, as well as when required by regulatory requirements. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan. Loans are generally returned to accrual status when all the principal and interest amounts contractually due are brought current, the borrower has established a payment history, and future payments are reasonably assured. When management determines that the collection of principal in full is improbable, management will charge-off a partial amount or full amount of the loan balance. Management considers specific facts and circumstances relative to each individual credit in making such a determination. For residential and consumer loans, management uses specific regulatory guidance and thresholds for determining charge-offs.

An age analysis of past due loans, segregated by class of loans, as of March 31, 2012 is provided below.


(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Commercial and industrial
Agriculture	$	0	$	0	$	53,070	$	53,070		$	0	$	37
Commercial and industrial other		556		854		409,153		410,563			28		7,255
Subtotal commercial and industrial		556		854		462,223		463,633			28		7,292
Commercial real estate
Construction		6		9,638		18,167		27,811			0		11,943
Agriculture		215		0		53,119		53,334			0		172
Commercial real estate other		6,704		9,498		674,322		690,524			1,202		12,079
Subtotal commercial real estate		6,925		19,136		745,608		771,669			1,202		24,194
Residential real estate
Home equity		840		1,254		155,311		157,405			322		1,243
Mortgages		3,095		4,781		509,948		517,824			0		5,507
Subtotal residential real estate		3,935		6,035		665,259		675,229			322		6,750
Consumer and other
Indirect		660		208		30,500		31,368			0		219
Consumer and other		0				30,371		30,371			0		0
Subtotal consumer and other		660		208		60,871		61,739			0		219
Leases		4		0		5,863		5,867			0		0
Total loans and leases		12,080		26,233		1,939,824		1,978,137			1,552		38,455
Less: unearned income and deferred costs and fees		0		0		0		(568	)		0		0
Total loans and leases, net of unearned income and deferred costs and fees	$	12,080	$	26,233	$	1,939,824	$	1,977,569		$	1,552	$	38,455

An age analysis of past due loans, segregated by class of loans, as of December 31, 2011 is provided below.


(in thousands)	30-89 days		90 days or more		Current Loans		Total Loans			90 days and accruing		Nonaccrual
Commercial and industrial
Agriculture		26		0		67,540		67,566			0		175
Commercial and industrial other		890		155		416,083		417,128			0		6,930
Subtotal commercial and industrial		916		155		483,623		484,694			0		7,105
Commercial real estate
Construction		102		7,761		39,441		47,304			0		12,958
Agriculture		186		211		52,674		53,071			0		346
Commercial real estate other		4,923		9,449		651,487		665,859			0		13,048
Subtotal commercial real estate		5,211		17,421		743,602		766,234			0		26,352
Residential real estate
Home equity		1,217		1,232		158,829		161,278			322		1,222
Mortgages		4,808		4,942		490,284		500,034			1,056		4,662
Subtotal residential real estate		6,025		6,174		649,113		661,312			1,378		5,884
Consumer and other
Indirect		1,009		228		31,550		32,787			2		237
Consumer and other		0		0		30,961		30,961			0		0
Subtotal consumer and other		1,009		228		62,511		63,748			2		237
Leases		10		0		6,479		6,489			0		10
Total loans and leases		13,171		23,978		1,945,328		1,982,477			1,380		39,588
Less: unearned income and deferred costs and fees		0		0		0		(628	)		0		0
Total loans and leases, net of unearned income and deferred costs and fees	$	13,171	$	23,978	$	1,945,328	$	1,981,849		$	1,380	$	39,588