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Loans and the Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2013
Loans and the Allowance for Loan Losses [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
 
 
September
30,
 
December
31,
 
 
 
2013
 
2012
 
 
 
(in thousands)
 
Commercial and industrial
 
$
229,212
 
$
181,682
 
Commercial real estate
 
 
531,674
 
 
497,392
 
Construction
 
 
42,727
 
 
40,277
 
Residential mortgage
 
 
152,934
 
 
169,094
 
Installment
 
 
789
 
 
1,104
 
Subtotal
 
 
957,336
 
 
889,549
 
Net deferred loan costs
 
 
156
 
 
123
 
Total loans
 
$
957,492
 
$
889,672
 
Loans Receivable on Non-Accrual Status
Loans Receivable on Non-Accrual Status
 
 
 
 
 
 
 
 
 
September 30,
2013
 
December 31,
2012
 
 
 
(in thousands)
 
Commercial and industrial
 
$
85
 
$
216
 
Commercial real estate
 
 
175
 
 
354
 
Construction
 
 
—
 
 
319
 
Residential mortgage
 
 
1,772
 
 
2,729
 
Total loans receivable on non-accrual status
 
$
2,032
 
$
3,618
 
Credit Quality Indicators
Credit Quality Indicators
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2013
 
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
 
 
 
(in thousands)
 
Commercial and industrial
 
$
225,081
 
$
2,785
 
$
1,346
 
$
—
 
$
229,212
 
Commercial real estate
 
 
508,679
 
 
12,457
 
 
10,538
 
 
—
 
 
531,674
 
Construction
 
 
41,640
 
 
—
 
 
1,087
 
 
—
 
 
42,727
 
Residential mortgage
 
 
149,572
 
 
981
 
 
2,381
 
 
—
 
 
152,934
 
Installment
 
 
665
 
 
—
 
 
124
 
 
—
 
 
789
 
Total loans
 
$
925,637
 
$
16,223
 
$
15,476
 
$
—
 
$
957,336
 
 
 
 
December 31, 2012
 
 
 
Pass
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
 
 
 
(in thousands)
 
Commercial and industrial
 
$
176,818
 
$
3,281
 
$
1,583
 
$
—
 
$
181,682
 
Commercial real estate
 
 
462,266
 
 
18,945
 
 
16,181
 
 
—
 
 
497,392
 
Construction
 
 
38,303
 
 
810
 
 
1,164
 
 
—
 
 
40,277
 
Residential mortgage
 
 
163,769
 
 
993
 
 
4,332
 
 
—
 
 
169,094
 
Installment
 
 
967
 
 
—
 
 
137
 
 
—
 
 
1,104
 
Total loans
 
$
842,123
 
$
24,029
 
$
23,397
 
$
—
 
$
889,549
 
Analysis of Impaired Loans
The following table provides an analysis of the impaired loans at September 30, 2013 and December 31, 2012:
 
 
 
September 30, 2013
 
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
 
 
(in thousands)
 
No Related Allowance Recorded
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
1,275
 
$
1,576
 
$
—
 
Total
 
$
1,275
 
$
1,576
 
$
—
 
 
 
 
 
 
 
 
 
 
 
 
With An Allowance Recorded
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
175
 
$
374
 
$
76
 
Residential mortgage
 
 
1,113
 
 
1,113
 
 
143
 
Total
 
$
1,288
 
$
1,487
 
$
219
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
1,450
 
$
1,950
 
$
76
 
Residential mortgage
 
 
1,113
 
 
1,113
 
 
143
 
Total (including related allowance)
 
$
2,563
 
$
3,063
 
$
219
 
 
 
 
December 31, 2012
 
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
 
 
(in thousands)
 
No Related Allowance Recorded
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
1,500
 
$
1,950
 
$
—
 
Total
 
$
1,500
 
 
1,950
 
$
—
 
 
 
 
 
 
 
 
 
 
 
 
With An Allowance Recorded
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,180
 
$
4,180
 
$
493
 
Residential mortgage
 
 
1,255
 
 
1,255
 
 
152
 
Total
 
$
5,435
 
$
5,435
 
$
645
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
5,680
 
$
6,130
 
$
493
 
Residential mortgage
 
 
1,255
 
 
1,255
 
 
152
 
Total (including related allowance)
 
$
6,935
 
$
7,385
 
$
645
 
 
The following table provides an analysis related to the average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2013 and 2012.
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans with no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
1,275
 
$
19
 
$
2,246
 
$
28
 
$
1,275
 
$
57
 
$
2,246
 
$
86
 
Total
 
$
1,275
 
$
19
 
$
2,246
 
$
28
 
$
1,275
 
$
57
 
$
2,246
 
$
86
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans with an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
175
 
$
—
 
$
4,180
 
$
34
 
$
2,202
 
$
68
 
$
4,180
 
$
103
 
Construction
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
2,066
 
 
16
 
Residential mortgage
 
 
1,226
 
 
10
 
 
4,304
 
 
—
 
 
1,226
 
 
31
 
 
3,876
 
 
26
 
Total
 
$
1,401
 
$
10
 
$
8,484
 
$
34
 
$
3,428
 
$
99
 
$
10,122
 
$
145
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total impaired loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
$
1,450
 
$
19
 
$
6,426
 
$
62
 
$
3,477
 
$
125
 
$
6,426
 
$
189
 
Construction
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
—
 
 
2,066
 
 
16
 
Residential mortgage
 
 
1,226
 
 
10
 
 
4,304
 
 
—
 
 
1,226
 
 
31
 
 
3,876
 
 
26
 
Total
 
$
2,676
 
$
29
 
$
10,730
 
$
62
 
$
4,703
 
$
156
 
$
12,368
 
$
231
 
 
Aging Analysis
Aging Analysis
 
 
 
September 30, 2013
 
 
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater Than
90 Days
 
Total Past
Due
 
Current
 
Total Loans
Receivable
 
Loans
Receivable > 90
Days And
Accruing
 
 
 
(in thousands)
 
Commercial and Industrial
 
$
739
 
$
4,567
 
$
85
 
$
5,391
 
$
223,821
 
$
229,212
 
$
—
 
Commercial Real Estate
 
 
872
 
 
752
 
 
175
 
 
1,799
 
 
529,875
 
 
531,674
 
 
—
 
Construction
 
 
—
 
 
—
 
 
—
 
 
—
 
 
42,727
 
 
42,727
 
 
—
 
Residential Mortgage
 
 
1,326
 
 
39
 
 
1,772
 
 
3,137
 
 
149,797
 
 
152,934
 
 
—
 
Installment
 
 
2
 
 
—
 
 
—
 
 
2
 
 
787
 
 
789
 
 
—
 
Total
 
$
2,939
 
$
5,358
 
$
2,032
 
$
10,329
 
$
947,007
 
$
957,336
 
$
—
 
 
 
 
December 31, 2012
 
 
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater Than
90 Days
 
Total Past
Due
 
Current
 
Total Loans
Receivable
 
Loans
Receivable > 90
Days And
Accruing
 
 
 
(in thousands)
 
Commercial and Industrial
 
$
590
 
$
—
 
$
216
 
$
806
 
$
180,876
 
$
181,682
 
$
—
 
Commercial Real Estate
 
 
1,012
 
 
703
 
 
354
 
 
2,069
 
 
495,323
 
 
497,392
 
 
—
 
Construction
 
 
—
 
 
—
 
 
319
 
 
319
 
 
39,958
 
 
40,277
 
 
—
 
Residential Mortgage
 
 
2,017
 
 
628
 
 
2,784
 
 
5,429
 
 
163,665
 
 
169,094
 
 
55
 
Installment
 
 
23
 
 
—
 
 
—
 
 
23
 
 
1,081
 
 
1,104
 
 
—
 
Total
 
$
3,642
 
$
1,331
 
$
3,673
 
$
8,646
 
$
880,903
 
$
889,549
 
$
55
 
 
Allowance for Loan and Lease Losses
Allowance for loan and lease losses
 
 
September 30, 2013
 
 
 
C & I
 
Comm
R/E
 
Construction
 
Res Mtge
 
Installment
 
Unallocated
 
Total
 
 
 
(in thousands)
 
Allowance for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
—
 
$
76
 
$
—
 
$
143
 
$
—
 
$
—
 
$
219
 
Collectively evaluated for impairment
 
 
1,714
 
 
5,712
 
 
369
 
 
1,161
 
 
94
 
 
925
 
 
9,975
 
Total
 
$
1,714
 
$
5,788
 
$
369
 
$
1,304
 
$
94
 
$
925
 
$
10,194
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Receivable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
—
 
$
1,450
 
$
—
 
$
1,113
 
$
—
 
$
—
 
$
2,563
 
Collectively evaluated for impairment
 
 
226,664
 
 
512,949
 
 
41,640
 
 
137,733
 
 
663
 
 
—
 
 
919,649
 
Loans acquired with discounts related to credit quality
 
 
2,548
 
 
17,275
 
 
1,087
 
 
14,088
 
 
126
 
 
—
 
 
35,124
 
Total
 
$
229,212
 
$
531,674
 
$
42,727
 
$
152,934
 
$
789
 
$
—
 
$
957,336
 
 
Allowance for loan and lease losses
 
 
December 31, 2012
 
 
 
C & I
 
Comm
R/E
 
Construction
 
Res Mtge
 
Installment
 
Unallocated
 
Total
 
 
 
(in thousands)
 
Allowance for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
—
 
$
493
 
$
—
 
$
152
 
$
—
 
$
—
 
$
645
 
Collectively evaluated for impairment
 
 
2,424
 
 
4,830
 
 
313
 
 
1,380
 
 
113
 
 
532
 
 
9,592
 
Total
 
$
2,424
 
$
5,323
 
$
313
 
$
1,532
 
$
113
 
$
532
 
$
10,237
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Receivable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
—
 
$
5,680
 
$
—
 
$
1,255
 
$
—
 
$
—
 
$
6,935
 
Collectively evaluated for impairment
 
 
177,644
 
 
470,797
 
 
38,172
 
 
146,930
 
 
973
 
 
—
 
 
834,516
 
Loans acquired with discounts related to credit quality
 
 
4,038
 
 
20,915
 
 
2,105
 
 
20,909
 
 
131
 
 
—
 
 
48,098
 
Total
 
$
181,682
 
$
497,392
 
$
40,277
 
$
169,094
 
$
1,104
 
$
—
 
$
889,549
 
 
The Corporation’s allowance for loan losses is analyzed quarterly. Many factors are considered, including growth in the portfolio, delinquencies, nonaccrual loan levels, and other factors inherent in the extension of credit. There have been no material changes to the allowance for loan loss methodology as disclosed in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012.
 
A summary of the activity in the allowance for loan losses is as follows:
 
 
 
Three Months Ended September 30, 2013
 
 
 
C & I
 
Comm
R/E
 
Construction
 
Res Mtge
 
Installment
 
Unallocated
 
Total
 
 
 
(in thousands)
 
Balance at July 1,
 
$
2,422
 
$
5,333
 
$
318
 
$
1,341
 
$
29
 
$
759
 
$
10,202
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge offs
 
 
(6)
 
 
—
 
 
—
 
 
—
 
 
(4)
 
 
—
 
 
(10)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recoveries
 
 
—
 
 
—
 
 
—
 
 
—
 
 
2
 
 
—
 
 
2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision
 
 
(702)
 
 
455
 
 
51
 
 
(37)
 
 
67
 
 
166
 
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30,
 
$
1,714
 
$
5,788
 
$
369
 
$
1,304
 
$
94
 
$
925
 
$
10,194
 
 
 
 
Nine Months Ended September 30, 2013
 
 
 
C & I
 
Comm
R/E
 
Construction
 
Res Mtge
 
Installment
 
Unallocated
 
Total
 
 
 
(in thousands)
 
Balance at January 1,
 
$
2,424
 
$
5,323
 
$
313
 
$
1,532
 
$
113
 
$
532
 
$
10,237
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge offs
 
 
(6)
 
 
(50)
 
 
—
 
 
—
 
 
(20)
 
 
—
 
 
(76)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recoveries
 
 
21
 
 
8
 
 
—
 
 
—
 
 
4
 
 
—
 
 
33
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision
 
 
(725)
 
 
507
 
 
56
 
 
(228)
 
 
(3)
 
 
393
 
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30,
 
$
1,714
 
$
5,788
 
$
369
 
$
1,304
 
$
94
 
$
925
 
$
10,194
 
 
 
 
Three Months Ended September 30, 2012
 
 
 
C & I
 
Comm
R/E
 
Construction
 
Res Mtge
 
Installment
 
Unallocated
 
Total
 
 
 
(in thousands)
 
Balance at July 1,
 
$
1,747
 
$
6,173
 
$
449
 
$
1,300
 
$
59
 
$
493
 
$
10,221
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge offs
 
 
—
 
 
—
 
 
—
 
 
(207)
 
 
(3)
 
 
—
 
 
(210)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recoveries
 
 
—
 
 
—
 
 
—
 
 
—
 
 
4
 
 
—
 
 
4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision
 
 
(55)
 
 
103
 
 
43
 
 
71
 
 
4
 
 
59
 
 
225
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30,
 
$
1,692
 
$
6,276
 
$
492
 
$
1,164
 
$
64
 
$
552
 
$
10,240
 
 
 
 
Nine Months Ended September 30, 2012
 
 
 
C & I
 
Comm
R/E
 
Construction
 
Res Mtge
 
Installment
 
Unallocated
 
Total
 
 
 
(in thousands)
 
Balance at January 1,
 
$
1,527
 
$
5,972
 
$
707
 
$
1,263
 
$
51
 
$
82
 
$
9,602
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Charge offs
 
 
—
 
 
—
 
 
—
 
 
(207)
 
 
(11)
 
 
—
 
 
(218)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recoveries
 
 
—
 
 
—
 
 
540
 
 
85
 
 
6
 
 
—
 
 
631
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision
 
 
165
 
 
304
 
 
(755)
 
 
23
 
 
18
 
 
470
 
 
225
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30,
 
$
1,692
 
$
6,276
 
$
492
 
$
1,164
 
$
64
 
$
552
 
$
10,240