7. Allowance for Loan Losses

The following tables detail activity in the Allowance for the periods indicated:



Three Months Ended June 30,	Commercial		Real estate construction		Real estate term		Home equity lines and other consumer		Unallocated		Total
		(In Thousands)
2012
Balance, beginning of period	$	6,083	$	1,218	$	5,197	$	599	$	3,191	$	16,288
Charge-Offs		-		-		(127)		-		-		(127)
Recoveries		223		12		-		5		-		240
Provision		880		22		323		270		(1,406)		89
Balance, end of period	$	7,186	$	1,252	$	5,393	$	874	$	1,785	$	16,490

Balance, end of period: Individually evaluated
for impairment	$	542	$	263	$	67	$	49	$	-	$	921

Balance, end of period: Collectively evaluated
for impairment	$	6,644	$	989	$	5,326	$	825	$	1,785	$	15,569

2011
Balance, beginning of period	$	6,138	$	1,876	$	4,305	$	601	$	2,219	$	15,139
Charge-Offs		(91)		-		(90)		(65)		-		(246)
Recoveries		109		12		-		10		-		131
Provision		547		(256)		755		373		(869)		550
Balance, end of period	$	6,703	$	1,632	$	4,970	$	919	$	1,350	$	15,574

Balance, end of period: Individually evaluated
for impairment	$	513	$	183	$	0	$	0	$	-	$	696

Balance, end of period: Collectively evaluated
for impairment	$	6,190	$	1,449	$	4,970	$	919	$	1,350	$	14,878


Six Months Ended June 30,	Commercial		Real estate construction		Real estate term		Home equity lines and other consumer		Unallocated		Total
		(In Thousands)
2012
Balance, beginning of period	$	6,783	$	1,143	$	5,529	$	792	$	2,256	$	16,503
Charge-Offs		(231)		-		(553)		-		-		(784)
Recoveries		572		12		-		9		-		593
Provision		62		97		417		73		(471)		178
Balance, end of period	$	7,186	$	1,252	$	5,393	$	874	$	1,785	$	16,490

Balance, end of period: Individually evaluated
for impairment	$	542	$	263	$	67	$	49	$	-	$	921

Balance, end of period: Collectively evaluated
for impairment	$	6,644	$	989	$	5,326	$	825	$	1,785	$	15,569

2011
Balance, beginning of period	$	6,374	$	1,035	$	4,270	$	741	$	1,986	$	14,406
Charge-Offs		(564)		-		(90)		(65)		-		(719)
Recoveries		699		13		53		23		-		788
Provision		194		584		737		220		(636)		1,099
Balance, end of period	$	6,703	$	1,632	$	4,970	$	919	$	1,350	$	15,574

Balance, end of period: Individually evaluated
for impairment	$	513	$	183	$	0	$	0	$	-	$	696

Balance, end of period: Collectively evaluated
for impairment	$	6,190	$	1,449	$	4,970	$	919	$	1,350	$	14,878

The following is a detail of the recorded investment in the loan portfolio, segregated by amounts evaluated individually or collectively in the Allowance at the periods indicated:



	Commercial		Real estate construction		Real estate term		Home equity lines and other consumer		Total
		(In Thousands)
June 30, 2012
Balance, end of period	$	240,395	$	40,922	$	340,530	$	38,260	$	660,107

Balance, end of period: Individually evaluated
for impairment	$	2,733	$	3,670	$	7,359	$	434	$	14,196

Balance, end of period: Collectively evaluated
for impairment	$	237,662	$	37,252	$	333,171	$	37,826	$	645,911

June 30, 2011
Balance, end of period	$	232,765	$	47,639	$	314,093	$	42,458	$	636,955

Balance, end of period: Individually evaluated
for impairment	$	4,843	$	2,949	$	4,688	$	209	$	12,689

Balance, end of period: Collectively evaluated
for impairment	$	227,922	$	44,690	$	309,405	$	42,249	$	624,266

The following represents the balance of the Allowance for the periods indicated segregated by segment and class:



	Total		Commercial		Real estate construction		Real estate term		Home equity lines and other consumer		Unallocated
				(In Thousands)
June 30, 2012
Individually evaluated for impairment:
Risk Code 6 - Substandard	$	515	$	141	$	-	$	325	$	49	$	-
Risk Code 7 - Doubtful		406		400		-		6		-		-

Collectively evaluated for impairment:
Risk Code 2 - Good		14		8		-		6
Risk Code 3 - Satisfactory		11,364		4,888		1,065		4,845		566		-
Risk Code 4 - Watch		413		139		10		16		248		-
Risk Code 5 - Special Mention		1,630		1,584		6		32		8		-
Risk Code 6 - Substandard		363		26		171		163		3		-
Risk Code 7 - Doubtful		-		-		-		-		-		-
Unallocated		1,785		-		-		-		-		1,785
	$	16,490	$	7,186	$	1,252	$	5,393	$	874	$	1,785

June 30, 2011
Individually evaluated for impairment:
Risk Code 6 - Substandard	$	240	$	57	$	183	$	-	$	-	$	-
Risk Code 7 - Doubtful		456		456		-		-		-		-

Collectively evaluated for impairment:
Risk Code 3 - Satisfactory		9,512		3,809		1,041		4,094		568		-
Risk Code 4 - Watch		513		143		68		13		289		-
Risk Code 5 - Special Mention		2,271		2,180		-		31		60		-
Risk Code 6 - Substandard		1,232		58		340		832		2		-
Risk Code 7 - Doubtful		-		-		-		-		-		-
Unallocated		1,350		-		-		-		-		1,350
	$	15,574	$	6,703	$	1,632	$	4,970	$	919	$	1,350

At June 30, 2012, the Company’s ratio of nonperforming loans compared to portfolio loans was 0.92%. The Company’s ratio of Allowance compared to portfolio loans at June 30, 2012 was 2.51%.