Loans

9 Months Ended

Sep. 30, 2012

Loans [Abstract]

Loans

Note E –Loans

The following summarizes the Company’s major classifications for loans:

( In thousands)	September 30, 2012		December 31, 2011
Residential real estate	$	1,008,305	$	929,788
Home equity – junior liens		143,058		141,797
Commercial and industrial		105,027		130,899
Commercial real estate		787,887		732,146
Consumer		38,285		35,845
DDA overdrafts		2,670		2,628
Gross loans		2,085,232		1,973,103
Allowance for loan losses		(18,986)		(19,409)
Net loans	$	2,066,246	$	1,953,694

Construction loans of $12.8 million and $9.3 million are included within residential real estate loans at September 30, 2012 and December 31, 2011, respectively.  Construction loans of $17.1 million and $20.2 million are included within commercial real estate loans at September 30, 2012 and December 31, 2011, respectively.  The Company’s commercial and residential real estate construction loans are primarily secured by real estate within the Company’s principal markets.  These loans were originated under the Company’s loan policy, which is focused on the risk characteristics of the loan portfolio, including construction loans.  Adequate consideration has been given to these loans in establishing the Company’s allowance for loan losses.

The composition of loans acquired in the VSB acquisition outstanding at September 30, 2012 is as follows:

	September 30, 2012
Residential real estate	$	22,789
Home equity – junior liens		6,137
Commercial and industrial		2,810
Commercial real estate		34,435
Consumer		2,934
Gross loans	$	69,105

The outstanding loan balances acquired in the VSB acquisition in the above table include $6.5 million of credit-impaired loans, with a contractual principal balance of $10.8 million.

Activity for the accretable yield for the first nine months of 2012 is as follows:

Accretable yield at the beginning of the period	$	-
Additions		954
Accretion		(112)
Net reclassifications to accretable from non-accretable		-
Maturities, foreclosures and charge-offs		-
Accretable yield at the end of period	$	842