Note 4 – Loans

Major classifications of loans, net of unearned income and deferred loan origination costs, are summarized as follows:

(in thousands)	September 30 2012		December 31 2011
Commercial construction	$	115,091	$	120,577
Commercial secured by real estate		820,925		798,887
Equipment lease financing		10,167		9,706
Commercial other		379,308		374,597
Real estate construction		54,431		53,534
Real estate mortgage		664,329		650,075
Home equity		82,724		84,841
Consumer direct		126,005		123,949
Consumer indirect		298,557		340,382
Total loans	$	2,551,537	$	2,556,548

CTBI has segregated and evaluates its loan portfolio through nine portfolio segments. The nine segments are commercial construction, commercial secured by real estate, equipment lease financing, commercial other, real estate construction, real estate mortgage, home equity, consumer direct, and consumer indirect. CTBI serves customers in small and mid-sized communities in eastern, northeastern, central, and south central Kentucky, southern West Virginia, and northeastern Tennessee. Therefore, CTBI's exposure to credit risk is significantly affected by changes in these communities.

Commercial construction loans are for the purpose of erecting or rehabilitating buildings or other structures for commercial purposes, including any infrastructure necessary for development. Included in this category are improved property, land development, and tract development loans. The terms of these loans are generally short-term with permanent financing upon completion.

Commercial real estate loans include loans secured by nonfarm, nonresidential properties, 1-4 family/ multi-family properties, farmland, and other commercial real estate. These loans are originated based on the borrower's ability to service the debt and secondarily based on the fair value of the underlying collateral.

Equipment lease financing loans are fixed, variable, and tax exempt leases for commercial purposes.

Commercial other loans consist of commercial check loans, agricultural loans, receivable financing, floorplans, loans to financial institutions, loans for purchasing or carrying securities, and other commercial purpose loans. Commercial loans are underwritten based on the borrower's ability to service debt from the business's underlying cash flows. As a general practice, we obtain collateral such as real estate, equipment, or other assets, although such loans may be uncollateralized but guaranteed.

Real estate construction loans are typically for owner-occupied properties. The terms of these loans are generally short-term with permanent financing upon completion.

Residential real estate loans are a mixture of fixed rate and adjustable rate first and second lien residential mortgage loans. As a policy, CTBI holds adjustable rate loans and sells the majority of its fixed rate first lien mortgage loans into the secondary market. Changes in interest rates or market conditions may impact a borrower's ability to meet contractual principal and interest payments. Residential real estate loans are secured by real property.

Home equity lines are revolving adjustable rate credit lines secured by real property.

Consumer direct loans are fixed rate products comprised of unsecured loans, consumer revolving credit lines, deposit secured loans, and all other consumer purpose loans.

Consumer indirect loans are fixed rate loans secured by automobiles, trucks, vans, and recreational vehicles originated at the selling dealership underwritten and purchased by CTBI's indirect lending department. Both new and used products are financed. Only dealers who have executed dealer agreements with CTBI participate in the indirect lending program.

Not included in the loan balances above were loans held for sale in the amount of $0.8 million at September 30, 2012 and $0.5 million at December 31, 2011. The amount of capitalized fees and costs under ASC 310-20, included in the above loan totals were $0.6 million and $0.7 million at September 30, 2012 and December 31, 2011, respectively.

CTBI acquired loans through the acquisition of First National Bank of LaFollette in the fourth quarter 2010. At acquisition, the transferred loans with evidence of deterioration of credit quality since origination were not significant; therefore, none of the loans acquired were accounted for under the guidance in ASC 310-30.

Credit discounts representing principal losses expected over the life of the loans are a component of the initial fair value for purchased loans acquired that are not deemed impaired at acquisition. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Subsequent to the acquisition date, the methods used to estimate the required allowance for credit losses for these loans is similar to originated loans; however, CTBI records a provision for loan losses only when the required allowance exceeds any remaining credit discounts. During the third quarter, the credit portion of the purchase accounting allocation was exhausted leaving only the premium paid for market rate adjustments to be amortized over the life of the remaining loans. The carrying amounts of those loans included in the balance sheet are $74.0 million and $88.5 million at September 30, 2012 and December 31, 2011, respectively. Provision expense charged to income during the quarter as a result of this change was $0.6 million.

Changes in accretable yield for the nine months ended September 30, 2012 and the year ended December 31, 2011 are as follows:

(in thousands)	September 30 2012			December 31 2011
Beginning balance	$	720		$	2,995
Accretion		(580	)		(1,067	)
Disposals		(140	)		(1,208	)
Ending balance	$	0		$	720

Refer to note 1 to the condensed consolidated financial statements for further information regarding our nonaccrual policy. Nonaccrual loans segregated by class of loans were as follows:

(in thousands)	September 30 2012		December 31 2011
Commercial:
Commercial construction	$	7,200	$	7,029
Commercial secured by real estate		5,741		9,810
Commercial other		1,823		3,914

Residential:
Real estate construction		315		607
Real estate mortgage		2,762		4,204
Home equity		257		189
Total nonaccrual loans	$	18,098	$	25,753

The following tables present CTBI's loan portfolio aging analysis, segregated by class, as of September 30, 2012 and December 31, 2011:

	September 30, 2012
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ and Accruing*
Commercial:
Commercial construction	$	761	$	0	$	8,187	$	8,948	$	106,143	$	115,091	$	1,125
Commercial secured by real estate		3,954		2,197		11,363		17,514		803,411		820,925		5,741
Equipment lease financing		0		0		0		0		10,167		10,167		0
Commercial other		1,798		194		5,368		7,360		371,948		379,308		3,977
Residential:
Real estate construction		212		75		607		894		53,537		54,431		292
Real estate mortgage		1,914		4,186		5,877		11,977		652,352		664,329		3,932
Home equity		1,270		175		584		2,029		80,695		82,724		353
Consumer:
Consumer direct		1,710		342		109		2,161		123,844		126,005		109
Consumer indirect		2,542		676		400		3,618		294,939		298,557		399
Total	$	14,161	$	7,845	$	32,495	$	54,501	$	2,497,036	$	2,551,537	$	15,928

	December 31, 2011
(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ and Accruing*
Commercial:
Commercial construction	$	362	$	33	$	10,171	$	10,566	$	110,011	$	120,577	$	3,292
Commercial secured by real estate		4,566		2,978		11,998		19,542		779,345		798,887		3,969
Equipment lease financing		0		0		0		0		9,706		9,706		0
Commercial other		2,286		688		2,504		5,478		369,119		374,597		619
Residential:
Real estate construction		305		91		622		1,018		52,516		53,534		16
Real estate mortgage		2,067		4,974		6,547		13,588		636,487		650,075		2,719
Home equity		968		312		482		1,762		83,079		84,841		346
Consumer:
Consumer direct		1,723		171		71		1,965		121,984		123,949		71
Consumer indirect		2,684		755		483		3,922		336,460		340,382		483
Total	$	14,961	$	10,002	$	32,878	$	57,841	$	2,498,707	$	2,556,548	$	11,515

*90+ and Accruing are also included in 90+ Days Past Due column.

Credit Quality Indicators:

CTBI categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. CTBI also considers the fair value of the underlying collateral and the strength and willingness of the guarantor(s). CTBI analyzes commercial loans individually by classifying the loans as to credit risk. Loans classified as loss, doubtful, substandard, or special mention are reviewed quarterly by CTBI for further deterioration or improvement to determine if appropriately classified and valued if deemed impaired. All other commercial loan reviews are completed every 12 to 18 months. In addition, during the renewal process of any loan, as well as if a loan becomes past due or if other information becomes available, CTBI will evaluate the loan grade. CTBI uses the following definitions for risk ratings:

Pass grades include investment grade, low risk, moderate risk, and acceptable risk loans. The loans range from loans that have no chance of resulting in a loss to loans that have a limited chance of resulting in a loss. Customers in this grade have excellent to fair credit ratings. The cash flows are adequate to meet required debt repayments.

Watch graded loans are loans that warrant extra management attention but are not currently criticized. Loans on the watch list may be potential troubled credits or may warrant "watch" status for a reason not directly related to the asset quality of the credit. The watch grade is a management tool to identify credits which may be candidates for future classification or may temporarily warrant extra management monitoring.

Other assets especially mentioned (OAEM) reflects loans that are currently protected but are potentially weak. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an unwarranted risk in light of circumstances surrounding a specific asset. Loans in this grade display potential weaknesses which may, if unchecked or uncorrected, inadequately protect CTBI's credit position at some future date. The loans may be adversely affected by economic or market conditions.

Substandard grading indicates that the loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. These loans have a well-defined weakness or weaknesses that jeopardize the orderly liquidation of the debt with the distinct possibility that CTBI will sustain some loss if the deficiencies are not corrected.

Doubtful graded loans have the weaknesses inherent in the substandard grading with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The probability of loss is extremely high, but because of certain important and reasonably specific pending factors which may work to CTBI's advantage or strengthen the asset(s), its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

A loss grading applies to loans that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery value, but rather it is not practical or desirable to defer writing off the asset. Losses must be taken in the period in which they surface as uncollectible, or in the case of collateral-dependent loans, a specific reserve in the amount of the expected loss is applied to the loan until the collateral is liquidated or we have taken possession and moved it into other real estate owned.

The following tables present the credit risk profile of CTBI's commercial loan portfolio based on rating category and payment activity, segregated by class of loans, as of September 30, 2012 and December 31, 2011:

(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Leases		Total
September 30, 2012
Pass	$	86,482	$	672,486	$	321,901	$	10,167	$	1,091,036
Watch		13,041		80,318		40,005		0		133,364
OAEM		1,067		19,798		4,093		0		24,958
Substandard		7,301		42,792		11,884		0		61,977
Doubtful		7,200		5,531		1,425		0		14,156
Total	$	115,091	$	820,925	$	379,308	$	10,167	$	1,325,491

December 31, 2011
Pass	$	85,886	$	643,312	$	323,471	$	9,706	$	1,062,375
Watch		17,721		78,611		38,185		0		134,517
OAEM		1,379		21,087		1,668		0		24,134
Substandard		8,783		46,238		7,364		0		62,385
Doubtful		6,808		9,639		3,909		0		20,356
Total	$	120,577	$	798,887	$	374,597	$	9,706	$	1,303,767

The following tables present the credit risk profile of the CTBI's residential real estate and consumer loan portfolios based on performing or nonperforming status, segregated by class, as of September 30, 2012 and December 31, 2011:

(in thousands)	Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
September 30, 2012
Performing	$	53,824	$	657,635	$	82,114	$	125,896	$	298,158	$	1,217,627
Nonperforming (1)		607		6,694		610		109		399		8,419
Total	$	54,431	$	664,329	$	82,724	$	126,005	$	298,557	$	1,226,046

December 31, 2011
Performing	$	52,911	$	643,152	$	84,306	$	123,878	$	339,899	$	1,244,146
Nonperforming (1)		623		6,923		535		71		483		8,635
Total	$	53,534	$	650,075	$	84,841	$	123,949	$	340,382	$	1,252,781

(1) A loan is considered nonperforming if it is 90 days or more past due or on nonaccrual.

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable CTBI will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance, or other actions intended to maximize collection.

The following table presents impaired loans, the average investment in impaired loans, and interest income recognized on impaired loans for the periods ended September 30, 2012, December 31, 2011, and September 30, 2011:

	September 30, 2012
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Commercial construction	$	3,032	$	3,032	$	0
Commercial secured by real estate		34,099		34,586		0
Commercial other		11,643		13,819		0
Real estate mortgage		666		667		0

Loans with a specific valuation allowance:
Commercial construction		7,070		8,298		2,321
Commercial secured by real estate		3,406		3,530		938
Commercial other		975		2,295		315

Totals:
Commercial		60,225		65,560		3,574
Residential		666		667		0
Total	$	60,891	$	66,227	$	3,574

	Three Months Ended				Nine Months Ended
	September 30, 2012				September 30, 2012
(in thousands)	Average Investment in Impaired Loans		*Interest Income Recognized		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	3,034	$	32	$	4,072	$	90
Commercial secured by real estate		34,229		291		35,566		976
Commercial other		11,756		108		10,348		167
Real estate mortgage		668		10		409		18

Loans with a specific valuation allowance:
Commercial construction		7,355		0		6,881		0
Commercial secured by real estate		3,436		0		3,293		0
Commercial other		977		0		1,582		0

Commercial		60,787		431		61,742		1,233
Residential		668		10		409		18
Total	$	61,455	$	441	$	62,151	$	1,251

	December 31, 2011
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	4,778	$	4,778	$	0	$	8,992	$	252
Commercial secured by real estate		27,811		29,765		0		31,480		1,543
Commercial other		1,770		2,501		0		3,392		143
Real estate construction		27		27		0		19		1
Real estate mortgage		82		82		0		84		5
Consumer direct		93		93		0		82		9
Consumer indirect		112		112		0		99		12

Loans with a specific valuation allowance:
Commercial construction		5,794		6,643		2,203		7,681		0
Commercial secured by real estate		3,525		3,669		1,156		4,747		23
Commercial other		3,432		6,022		1,310		5,071		22

Totals:
Commercial		47,110		53,378		4,669		61,363		1,983
Residential		109		109		0		103		6
Consumer		205		205		0		181		21
Total	$	47,424	$	53,692	$	4,669	$	61,647	$	2,010

	September 30, 2011
(in thousands)	Recorded Balance		Unpaid Contractual Principal Balance		Specific Allowance
Loans without a specific valuation allowance:
Commercial construction	$	5,748	$	5,748	$	0
Commercial secured by real estate		31,308		32,483		0
Commercial other		2,996		3,091		0
Real estate construction		28		28		0
Real estate mortgage		83		83		0
Consumer direct		78		78		0
Consumer indirect		121		121		0

Loans with a specific valuation allowance:
Commercial construction		9,247		10,756		3,714
Commercial secured by real estate		4,619		4,754		1,826
Commercial other		1,793		4,373		765

Totals:
Commercial		55,711		61,205		6,305
Residential		111		111		0
Consumer		199		199		0
Total	$	56,021	$	61,515	$	6,305

	Three Months Ended				Nine Months Ended
	September 30, 2011				September 30, 2011
(in thousands)	Average Investment in Impaired Loans		*Interest Income Recognized		Average Investment in Impaired Loans		*Interest Income Recognized
Loans without a specific valuation allowance:
Commercial construction	$	5,733	$	76	$	9,239	$	193
Commercial secured by real estate		30,910		666		31,901		1,239
Commercial other		3,129		38		3,677		126
Real estate construction		28		0		19		1
Real estate mortgage		83		1		84		4
Consumer direct		79		2		78		6
Consumer indirect		124		3		101		8

Loans with a specific valuation allowance:
Commercial construction		9,440		0		8,614		0
Commercial secured by real estate		4,632		0		5,025		23
Commercial other		1,873		0		4,666		0

Commercial		55,717		780		63,122		1,581
Residential		111		1		103		5
Consumer		203		5		179		14
Total	$	56,031	$	786	$	63,404	$	1,600

*Cash basis interest is substantially the same as interest income recognized.

Included in certain loan categories of impaired loans are certain loans and leases that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Modifications of terms for our loans and their inclusion as troubled debt restructurings are based on individual facts and circumstances. Loan modifications that are included as troubled debt restructurings may involve either an increase or reduction of the interest rate, extension of the term of the loan, or deferral of principal and/or interest payments, regardless of the period of the modification. All of the loans identified as troubled debt restructuring were modified due to financial stress of the borrower. In order to determine if a borrower is experiencing financial difficulty, an evaluation is performed to determine the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under CTBI's internal underwriting policy.

When we modify loans and leases in a troubled debt restructuring, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, or use the current fair value of the collateral, less selling costs for collateral dependent loans. If we determined that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all troubled debt restructuring, including those that have payment defaults, for possible impairment and recognize impairment through the allowance.

During 2012, certain loans were modified in troubled debt restructurings, where economic concessions were granted to borrowers consisting of reductions in the interest rates, payment extensions, forgiveness of principal, and forbearances. Presented below, segregated by class of loans, are troubled debt restructurings that occurred during the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30, 2012
(in thousands)	Number of Loans		Post-Modification Outstanding Balance		Net Charge-offs Resulting from Modification
Commercial:
Commercial construction		0	$	0	$	0
Commercial secured by real estate		2		666		0
Commercial other		2		50		0
Residential:
Real estate mortgage		1		391		0
Total troubled debt restructurings		5	$	1,107	$	0

	Nine Months Ended September 30, 2012
(in thousands)	Number of Loans		Post-Modification Outstanding Balance		Net Charge-offs Resulting from Modification
Commercial:
Commercial construction		5	$	557	$	0
Commercial secured by real estate		8		4,078		0
Commercial other		13		1,116		0
Residential:
Real estate mortgage		1		391		0
Total troubled debt restructurings		27	$	6,142	$	0

	Three Months Ended September 30, 2011
(in thousands)	Number of Loans		Post-Modification Outstanding Balance		Net Charge-offs Resulting from Modification
Commercial:
Commercial construction		5	$	138	$	0
Commercial secured by real estate		7		6,949		0
Commercial other		1		3		1
Total troubled debt restructurings		13	$	7,090	$	1

	Nine Months Ended September 30, 2011
(in thousands)	Number of Loans		Post-Modification Outstanding Balance		Net Charge-offs Resulting from Modification
Commercial:
Commercial construction		7	$	3,372	$	0
Commercial secured by real estate		17		17,626		0
Commercial other		9		1,977		1
Total troubled debt restructurings		33	$	22,975	$	1

Loans retain their accrual status at the time of their modification. As a result, if a loan is on nonaccrual at the time it is modified, it stays as nonaccrual, and if a loan is on accrual at the time of the modification, it generally stays on accrual. Commercial and consumer loans modified in a troubled debt restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a troubled debt restructuring subsequently default, CTBI evaluates the loan for possible further impairment. The allowance for loan losses may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. Presented below, segregated by class of loans, are loans that were modified as troubled debt restructurings which have subsequently defaulted. CTBI considers a loan in default when it is 90 days or more past due or transferred to nonaccrual.

(in thousands)	Three Months Ended September 30, 2012				Nine Months Ended September 30, 2012
	Number of Loans		Recorded Balance		Number of Loans		Recorded Balance
Commercial:
Commercial construction		0	$	0		0	$	0
Commercial secured by real estate		2		376		6		800
Commercial other		2		66		8		112
Total defaulted restructured loans		4	$	442		14	$	912

	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2011				September 30, 2011
	Number of Loans		Recorded Balance		Number of Loans		Recorded Balance
Commercial:
Commercial construction		2	$	3,913		2	$	3,913
Commercial secured by real estate		0		0		0		0
Commercial other		0		0		2		83
Total defaulted restructured loans		2	$	3,913		4	$	3,996

The following tables present the activity in the allowance for loan losses and the recorded investment in loans based on portfolio class and impairment method for the periods ended September 30, 2012 and 2011:

	Three Months Ended September 30, 2012
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing			Real Estate Construction			Real Estate Mortgage		Home Equity		Consumer Direct			Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	3,931	$	13,262	$	5,487	$	142		$	390		$	4,472	$	574	$	857		$	4,019	$	33,134
Provision charged to expense		1,249		698		529		(5	)		(8	)		407		26		(19	)		42		2,919
Losses charged off		787		658		766		0			18			411		41		173			810		3,664
Recoveries		67		87		184		0			3			17		0		122			320		800
Ending balance	$	4,460	$	13,389	$	5,434	$	137		$	367		$	4,485	$	559	$	787		$	3,571	$	33,189

Ending balance:
Individually evaluated for impairment	$	2,321	$	938	$	315	$	0		$	0		$	0	$	0	$	0		$	0	$	3,574
Collectively evaluated for impairment	$	2,139	$	12,451	$	5,119	$	137		$	367		$	4,485	$	559	$	787		$	3,571	$	29,615

Loans
Ending balance:
Individually evaluated for impairment	$	10,102	$	37,505	$	12,618	$	0		$	0		$	666	$	0	$	0		$	0	$	60,891
Collectively evaluated for impairment	$	104,989	$	783,420	$	366,690	$	10,167		$	54,431		$	663,663	$	82,724	$	126,005		$	298,557	$	2,490,646

	Nine Months Ended September 30, 2012
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct			Consumer Indirect			Total
Allowance for loan losses
Beginning balance	$	4,023	$	11,753	$	5,608	$	112	$	354	$	4,302	$	562	$	917		$	5,540		$	33,171
Provision charged to expense		1,500		3,148		1,454		25		189		892		119		(67	)		(756	)		6,504
Losses charged off		1,262		1,645		2,161		0		189		833		123		522			2,262			8,997
Recoveries		199		133		533		0		13		124		1		459			1,049			2,511
Ending balance	$	4,460	$	13,389	$	5,434	$	137	$	367	$	4,485	$	559	$	787		$	3,571		$	33,189

Ending balance:
Individually evaluated for impairment	$	2,321	$	938	$	315	$	0	$	0	$	0	$	0	$	0		$	0		$	3,574
Collectively evaluated for impairment	$	2,139	$	12,451	$	5,119	$	137	$	367	$	4,485	$	559	$	787		$	3,571		$	29,615

Loans
Ending balance:
Individually evaluated for impairment	$	10,102	$	37,505	$	12,618	$	0	$	0	$	666	$	0	$	0		$	0		$	60,891
Collectively evaluated for impairment	$	104,989	$	783,420	$	366,690	$	10,167	$	54,431	$	663,663	$	82,724	$	126,005		$	298,557		$	2,490,646

	Three Months Ended September 30, 2011
(in thousands)	Commercial Construction		Commercial Secured by Real Estate			Commercial Other		Equipment Lease Financing		Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct			Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	4,637	$	13,202		$	5,452	$	123	$	296	$	3,938	$	514	$	1,067		$	5,923	$	35,152
Provision charged to expense		1,162		(134	)		366		0		261		692		56		(6	)		118		2,515
Losses charged off		304		369			856		0		244		566		44		261			716		3,360
Recoveries		16		27			127		0		6		17		7		141			351		692
Ending balance	$	5,511	$	12,726		$	5,089	$	123	$	319	$	4,081	$	533	$	941		$	5,676	$	34,999

Ending balance:
Individually evaluated for impairment	$	3,714	$	1,826		$	765	$	0	$	0	$	0	$	0	$	0		$	0	$	6,305
Collectively evaluated for impairment	$	1,797	$	10,900		$	4,324	$	123	$	319	$	4,081	$	533	$	941		$	5,676	$	28,694

Loans
Ending balance:
Individually evaluated for impairment	$	14,995	$	35,927		$	4,789	$	0	$	28	$	83	$	0	$	78		$	121	$	56,021
Collectively evaluated for impairment	$	106,147	$	770,251		$	372,101	$	10,765	$	50,422	$	644,696	$	84,173	$	124,363		$	354,618	$	2,517,536

	Nine Months Ended September 30, 2011
(in thousands)	Commercial Construction		Commercial Secured by Real Estate		Commercial Other		Equipment Lease Financing			Real Estate Construction		Real Estate Mortgage		Home Equity		Consumer Direct		Consumer Indirect		Total
Allowance for loan losses
Beginning balance	$	4,332	$	12,327	$	7,392	$	148		$	271	$	2,982	$	407	$	1,169	$	5,777	$	34,805
Provision charged to expense		1,958		2,858		1,039		(25	)		347		2,247		282		70		1,446		10,222
Losses charged off		808		2,582		3,691		0			319		1,217		171		670		2,630		12,088
Recoveries		29		123		349		0			20		69		15		372		1,083		2,060
Ending balance	$	5,511	$	12,726	$	5,089	$	123		$	319	$	4,081	$	533	$	941	$	5,676	$	34,999

Ending balance:
Individually evaluated for impairment	$	3,714	$	1,826	$	765	$	0		$	0	$	0	$	0	$	0	$	0	$	6,305
Collectively evaluated for impairment	$	1,797	$	10,900	$	4,324	$	123		$	319	$	4,081	$	533	$	941	$	5,676	$	28,694

Loans
Ending balance:
Individually evaluated for impairment	$	14,995	$	35,927	$	4,789	$	0		$	28	$	83	$	0	$	78	$	121	$	56,021
Collectively evaluated for impairment	$	106,147	$	770,251	$	372,101	$	10,765		$	50,422	$	644,696	$	84,173	$	124,363	$	354,618	$	2,517,536