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Allowance for Credit Losses
3 Months Ended
Mar. 31, 2012
Allowance for Credit Losses [Abstract]  
ALLOWANCE FOR CREDIT LOSSES
NOTE 4: ALLOWANCE FOR CREDIT LOSSES
 
Changes in the allowance for credit losses, for the periods indicated, are as follows:
 
   
Three Months Ended
March 31
 
(Dollars in thousands)
 
2012
   
2011
 
Beginning balance
  $ 6,164     $ 5,884  
Provision
    425       426  
Loans charged off
    (463 )     (54 )
Leases charged off
           
Recoveries
    16       51  
Net charge-offs
    (447 )     (3 )
Ending balance
  $ 6,142     $ 6,307  
Reserve for unfunded loan commitments
  $ 96     $ 126  
 
               
Impaired loans are loans individually evaluated for collectability, and which will probably not be collected in accordance with their contractual terms. Information regarding impaired loans is for the periods indicated is as follows:
 
   
Three Months Ended
 March 31
 
(Dollars in thousands)
 
2012
   
2011
 
Total recorded investment
  $ 7,335     $ 6,917  
Impaired loans with a specific allowance
    2,114       5,211  
Impaired loans without a specific allowance
    5,221       1,706  
Average recorded investment
    7,455       7,120  
Specific allowance allocation
    826       749  
Total cash collected
    6       570  
Interest income recorded
          6  
 
               
 
The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status as of March 31, 2012 and December 31, 2011:
 
Age Analysis of Past Due Loans Receivables
 
                           
March 31, 2012
       
                                 
Loans
Receivable
 
(Dollars in thousands)
 
30-59
Days Past
Due
   
60-89
Days Past
Due
   
Greater
than
90 Days
   
Total
Past
Due
   
Current
   
Total
Loans
Receivables
   
> 90
Days and
Accruing
 
Residential mortgage
  $ 435     $     $ 1,962     $ 2,397     $ 24,119     $ 26,516     $ 108  
Commercial mortgage
    937       284       290       1,511       229,211       230,722        
Commercial:
                                                       
Commercial term
                202       202       81,853       82,055        
Commercial construction
    2,196       1,874       2,343       6,413       20,689       27,102        
Lease financing
    1             60       61       78       139        
Consumer:
                                                       
Home equity
    223             89       312       35,356       35,668       28  
Other
          48             48       7,386       7,434        
Total
  $ 3,792     $ 2,206     $ 4,946     $ 10,944     $ 398,692     $ 409,636     $ 136  
 
                                                       
                                   
December 31, 2011
         
                                                   
Loans
Receivable
 
(Dollars in thousands)
 
30-59
Days Past
Due
   
60-89
Days Past
Due
   
Greater
than
90 Days
   
Total
Past
 Due
   
Current
   
Total
Loans
Receivables
   
> 90
Days and
Accruing
 
Residential mortgage
  $ 692     $     $ 1,873     $ 2,565     $ 23,896     $ 26,461     $  
Commercial mortgage
    257             2,324       2,581       229,716       232,297       210  
Commercial:
                                                       
Commercial term
          54       200       254       76,048       76,302        
Commercial construction
                312       312       24,506       24,818        
Lease financing
                61       61       130       191        
Consumer:
                                                       
Home equity
    175             60       235       35,807       36,042        
Other
    15             21       36       7,537       7,573        
Total
  $ 1,139     $ 54     $ 4,851     $ 6,044     $ 397,640     $ 403,684     $ 210  
 
DNB reclassified $2.0 million of  past due loans from commercial mortgage to commercial construction during the three months ended March 31, 2012.
 
The following table sets forth those assets that are: (i) placed on non-accrual status, (ii) contractually delinquent by 90 days or more and still accruing, (iii) troubled debt restructurings other than those included in items (i) and (ii), and (iv) OREO as a result of foreclosure or voluntary transfer to DNB as well as other repossessed assets.
 
Non-Performing Assets
 
(Dollars in thousands)
 
March 31, 2012
   
Dec. 31, 2011
 
Non-accrual loans:
           
Residential mortgage
  $ 1,853     $ 1,873  
Commercial mortgage
    290       2,114  
Commercial
    4,839       3,233  
Lease financing
    61       61  
Consumer
    150       151  
Total non-accrual loans
    7,193       7,432  
Loans 90 days past due and still accruing
    136       210  
Troubled debt restructurings
           
Total non-performing loans
    7,329       7,642  
Other real estate owned & other repossessed property
    3,855       3,974  
Total non-performing assets
  $ 11,184     $ 11,616  
Asset quality ratios:
               
Non-performing loans to total loans
    1.79 %     1.89 %
Non-performing assets to total assets
    1.79       1.91  
Allowance for credit losses to:
               
Total loans and leases
    1.50       1.53  
Non-performing loans and leases
    83.8       80.7  

The following tables summarize information in regards to impaired loans by loan portfolio class as of and for three months ended March 31, 2012 and as of and for the year ended December 31, 2011.

Impaired Loans
   
March 31, 2012
 
(Dollars in thousands)
 
Recorded
Investment
   
Unpaid
Principal
Balance
   
Related
Allowance
   
Average
Recorded
Investment
   
Interest
Income
Recognized
 
With no related allowance recorded:
                             
Residential mortgage
  $ 1,995     $ 2,411     $     $ 2,005     $  
Commercial mortgage
    207       207             104        
Commercial:
                                       
Commercial term
    201       566             201        
Commercial construction
    2,607       3,468             1,459        
Lease financing
    61       74             61        
Consumer
    150       151             150        
With allowance recorded:
                                       
Residential mortgage
                             
Commercial mortgage
    83       85       45       1,099        
Commercial:
                                       
Commercial term
                             
Commercial construction
    2,031       2,031       781       2,376        
Lease financing
                             
Consumer
                             
Total:
                                       
Residential mortgage
    1,995       2,411             2,005        
Commercial mortgage
    290       292       45       1,203        
Commercial:
                                       
Commercial term
    201       566             201        
Commercial construction
    4,638       5,499       781       3,835        
Lease financing
    61       74             61        
Consumer
    150       151             150        
Total
  $ 7,335     $ 8,993     $ 826     $ 7,455     $  

                                                                                                          December 31, 2011
 
(Dollars in thousands)
 
Recorded
Investment
   
Unpaid
Principal
Balance
   
Related
Allowance
   
Average
Recorded
Investment
   
Interest
Income
Recognized
 
With no related allowance recorded:
                             
Residential mortgage
  $ 2,014     $ 2,413     $     $ 1,095     $  
Commercial mortgage
                      821       58  
Commercial:
                                       
Commercial term
    202       566             206       1  
Commercial construction
    312       634             339        
Lease financing
    61       74             123        
Consumer
    151       152             79        
With allowance recorded:
                                       
Residential mortgage
                      959        
Commercial mortgage
    2,114       2,116       826       444        
Commercial:
                                       
Commercial term
                      450        
Commercial construction
    2,720       2,833       359       2,813        
Lease financing
                      27        
Consumer
                             
Total:
                                       
Residential mortgage
    2,014       2,413             2,054        
Commercial mortgage
    2,114       2,116       826       1,265       58  
Commercial:
                                       
Commercial term
    202       566             656       1  
Commercial construction
    3,032       3,467       359       3,152        
Lease financing
    61       74             150        
Consumer
    151       152             79        
Total
  $ 7,574     $ 8,788     $ 1,185     $ 7,356     $ 59  
 
The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within DNB's internal risk rating system as of March 31, 2012 and December 31, 2011.
 
Credit Quality Indicators
   
March 31, 2012
 
(Dollars in thousands)
 
Pass
   
Special
Mention
   
Substandard
   
Doubtful
   
Total
 
Residential mortgage
  $ 24,663     $     $ 1,853     $     $ 26,516  
Commercial mortgage
    211,100       14,820       4,802             230,722  
Commercial:
                                       
Commercial term
    80,819       586       585       65       82,055  
Commercial construction
    16,395             8,676       2,031       27,102  
Lease financing
    139                         139  
Consumer:
                                       
Home equity
    35,297             371             35,668  
Other
    7,434                         7,434  
Total
  $ 375,847     $ 15,406     $ 16,287     $ 2,096     $ 409,636  
 
                                       

   
December 31, 2011
 
 (Dollars in thousands)
 
Pass
   
Special
 Mention
   
Substandard
   
Doubtful
   
Total
 
Residential mortgage
  $ 24,589     $     $ 1,872     $     $ 26,461  
Commercial mortgage
    214,086       11,346       4,834       2,031       232,297  
Commercial:
                                       
Commercial term
    74,961       690       586       65       76,302  
Commercial construction
    17,624             7,194             24,818  
Lease financing
    191                         191  
Consumer:
                                       
Home equity
    35,976             66             36,042  
Other
    7,573                         7,573  
Total
  $ 375,000     $ 12,036     $ 14,552     $ 2,096     $ 403,684  

The following tables sets forth the activity in DNB's allowance for credit losses for the three months ended March 31, 2012 and March 31, 2011 and the composition of DNB's allowance for credit losses as of March 31, 2012 and March 31, 2011.
 
Allowance for Credit Losses and Recorded Investment in Loans Receivables
(Dollars in thousands)
 
Commercial
   
Lease
financing
   
Residential
mortgage
   
Consumer
   
Unallocated
   
Total
 
Allowance for credit losses:
                                   
Beginning balance - January 1, 2012
  $ 4,945     $ 10     $ 383     $ 260     $ 566     $ 6,164  
Charge-offs
    (437 )           (18 )     (8 )           (463 )
Recoveries
    3             5       8             16  
Provisions
    456       (3 )     6       13       (47 )     425  
Ending balance - March 31, 2012
  $ 4,967     $ 7     $ 376     $ 273     $ 519     $ 6,142  
Ending balance: individually evaluated for impairment
  $ 826     $     $     $     $     $ 826  
Ending balance: collectively evaluated for impairment
  $ 4,141     $ 7     $ 376     $ 273     $ 519     $ 5,316  
Loans receivables:
                                               
Ending balance
  $ 339,879     $ 139     $ 26,516     $ 43,102             $ 409,636  
Ending balance: individually evaluated for impairment
  $ 5,129     $ 61     $ 1,995     $ 150             $ 7,335  
Ending balance: collectively evaluated for impairment
  $ 334,750     $ 78     $ 24,521     $ 42,952             $ 402,301  
Reserve for unfunded loan commitments
  $ 87     $     $     $ 9             $ 96  


       
(Dollars in thousands)
 
Commercial
   
Lease
financing
   
Residential
mortgage
   
Consumer
   
Unallocated
   
Total
 
Allowance for credit losses:
                                   
Beginning balance - January 1, 2011
  $ 4,387     $ 86     $ 454     $ 482     $ 475     $ 5,884  
Charge-offs
    (14 )           (40 )                 (54 )
Recoveries
    4       1       46                   51  
Provisions
    95       34       61       4       232       426  
Ending balance - March 31, 2011
  $ 4,472     $ 121     $ 521     $ 486     $ 707     $ 6,307  
Ending balance: individually evaluated for impairment
  $ 562     $ 63     $ 124     $     $     $ 749  
Ending balance: collectively evaluated for impairment
  $ 3,910     $ 58     $ 397     $ 486     $ 707     $ 5,558  
Loans receivables:
                                               
Ending balance
  $ 331,926     $ 714     $ 29,236     $ 47,625             $ 409,501  
Ending balance: individually evaluated for impairment
  $ 4,813     $ 272     $ 1,772     $ 60             $ 6,917  
Ending balance: collectively evaluated for impairment
  $ 327,113     $ 442     $ 27,464     $ 47,565             $ 402,584  
Reserve for unfunded loan commitments
  $ 109     $     $     $ 17             $ 126