Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Activity in the Loan Balances and the Allowance for Loan Losses by Segment

Activity in the allowance for loan losses by loan segment for 2013, 2012 and 2011 is summarized as follows:



Year Ended December 31, 2013
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Losses charged off	(2,325		)	(121		)	(754		)	(1,775		)	(678		)	(366		)	(6,019		)
Recoveries	697			8			350			66			335			56			1,512
Provision charged to expense	364			(225		)	256			2,836			706			438			4,375
Balance, end of year	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	865		$	73		$	—		$	—		$	—		$	—		$	938
Collectively evaluated for impairment	9,257			424			1,411			3,484			1,593			398			16,567
Total ending allowance balance	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Loans:
Individually evaluated for impairment	$	17,842		$	472		$	1,731		$	1,111		$	195		$	160		$	21,511
Collectively evaluated for impairment	383,749			88,174			64,776			121,965			206,128			15,996			880,788
Total ending loans balance	$	401,591		$	88,646		$	66,507		$	123,076		$	206,323		$	16,156		$	902,299



Year Ended December 31, 2012
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Losses charged off	(3,199		)	(213		)	(1,430		)	(1,372		)	(963		)	(401		)	(7,578		)
Recoveries	388			45			96			35			288			58			910
Provision charged to expense	3,483			(406		)	1,562			1,405			1,014			184			7,242
Balance, end of year	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,449		$	209		$	15		$	—		$	—		$	—		$	1,673
Collectively evaluated for impairment	9,937			626			1,544			2,357			1,230			270			15,964
Total ending allowance balance	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Loans:
Individually evaluated for impairment	$	23,321		$	597		$	1,790		$	398		$	—		$	61		$	26,167
Collectively evaluated for impairment	390,684			68,108			63,193			122,432			199,924			12,040			856,381
Total ending loans balance	$	414,005		$	68,705		$	64,983		$	122,830		$	199,924		$	12,101		$	882,548

Year Ended December 31, 2011
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of year	$	11,127		$	1,317		$	805		$	1,512		$	904		$	471		$	16,136
Losses charged off	(5,195		)	(262		)	(1,664		)	(1,895		)	(695		)	(398		)	(10,109		)
Recoveries	280			42			22			62			209			68			683
Provision charged to expense	4,502			312			2,168			2,610			473			288			10,353
Balance, end of year	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3,747		$	148		$	37		$	—		$	—		$	—		$	3,932
Collectively evaluated for impairment	6,967			1,261			1,294			2,289			891			429			13,131
Total ending allowance balance	$	10,714		$	1,409		$	1,331		$	2,289		$	891		$	429		$	17,063
Loans:
Individually evaluated for impairment	$	31,746		$	705		$	1,141		$	—		$	—		$	—		$	33,592
Collectively evaluated for impairment	350,106			75,865			63,383			126,958			180,089			13,095			809,496
Total ending loans balance	$	381,852		$	76,570		$	64,524		$	126,958		$	180,089		$	13,095		$	843,088

Age Analysis of Past Due Loans

and December 31, 2012 is as follows:

Age Analysis of Past Due Loans as of December 31, 2013



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	525	$	4	$	7,401	$	7,930	$	393,661	$	401,591	$	—
Commercial	—		18		219		237		88,409		88,646		—
Residential real estate	347		960		2,252		3,559		62,948		66,507		158
Home equity loans	932		707		1,078		2,717		120,359		123,076		43
Indirect	332		30		23		385		205,938		206,323
Consumer	183		25		191		399		15,757		16,156		—
Total	$	2,319	$	1,744	$	11,164	$	15,227	$	887,072	$	902,299	$	201

Age Analysis of Past Due Loans as of December 31, 2012



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	3,681	$	1,004	$	12,398	$	17,083	$	396,922	$	414,005	$	—
Commercial	—		—		376		376		68,329		68,705		—
Residential real estate	394		1,094		2,827		4,315		60,668		64,983		184
Home equity loans	630		494		1,510		2,634		120,196		122,830		—
Indirect	645		227		69		941		198,983		199,924
Consumer	26		40		123		189		11,912		12,101		—
Total	$	5,376	$	2,859	$	17,303	$	25,538	$	857,010	$	882,548	$	184

Impaired

Impaired Loans

or the Period Ended December 31, 2013, 2012 and 2011 are as follows:



					Twelve Months Ended December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,530	$	20,438	$	—	$	16,705
Commercial	214		267		—		186
Residential real estate	1,731		1,940		—		1,832
Home equity loans	1,111		1,623		—		847
Indirect	195		268		—		178
Consumer	160		204		—		111
With allowance recorded:
Commercial real estate	2,312		2,319		865		4,374
Commercial	258		258		73		346
Residential real estate	—		—		—		—
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	21,511	$	27,317	$	938	$	24,579

					Twelve Months Ended December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	15,378	$	20,086	$	—	$	9,945
Commercial	138		138		—		207
Residential real estate	1,610		1,686		—		1,187
Home equity loans	398		398		—		100
Indirect	—		—		—		—
Consumer	61		61		—		15
With allowance recorded:
Commercial real estate	7,942		9,876		1,449		16,571
Commercial	459		459		209		251
Residential real estate	181		1,452		15		106
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	26,167	$	34,156	$	1,673	$	28,382



					Twelve Months Ended December 31, 2011
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	12,585	$	20,138	$	—	$	14,805
Commercial	386		386		—		419
Residential real estate	1,069		1,897		—		1,470
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
With allowance recorded:
Commercial real estate	19,161		19,823		3,747		18,130
Commercial	319		794		148		570
Residential real estate	72		72		37		72
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	33,592	$	43,110	$	3,932	$	35,466

*impaired loans shown in the table above included loans that were classified as troubled debt restructurings ("TDRs"). The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession.

Loans on Nonaccrual Status

Nonaccrual loan balances at December 31, 2013 and December 31, 2012 are as follows:



Loans On Non-Accrual Status	December 31, 2013		December 31, 2012
	(Dollars in thousands)
Commercial real estate	$	11,241	$	16,349
Commercial	289		472
Residential real estate	5,231		5,622
Home equity loans	4,464		4,293
Indirect	443		711
Consumer	318		349
Total Nonaccrual Loans	$	21,986	$	27,796

Troubled Debt Restructuring Loan Information

The following table summarizes the loans that were modified as a TDR during the period ended December 31, 2013 and 2012.



At December 31, 2013
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	3	$93	$93
Residential real estate	3	$236	$236
Home equity loans	15	$774	$774
Indirect Loans	25	$195	$195
Consumer Loans	3	$34	$34



At December 31, 2012
	Number of Contracts	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Commercial real estate	7	$5,595	$5,114
Residential real estate	11	$1,167	$1,167
Home equity loans	8	$398	$398
Consumer Loans	1	$61	$61

Summary of Recorded Investment Based on Delinquency Status

The following table presents the recorded investment of commercial real estate, commercial and residential real estate loans by internal credit risk grade and the recorded investment of residential real estate, home equity, indirect and consumer loans based on delinquency status as of December 31, 2013 and December 31, 2012:



Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
Commercial Credit Exposure	December 31, 2013
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	52	$	—	$	—	$	—	$	—	$	52
Grade 2 — Modest	—		37		—		—		—		—		37
Grade 3 — Better than average	857		—		—		—		—		—		857
Grade 4 — Average	22,580		271		613		—		—		—		23,464
Grade 5 — Acceptable	352,781		84,979		5,589		—		—		—		443,349
Total Pass Credits	376,218		85,339		6,202		—		—		—		467,759
Grade 6 — Special mention	2,146		2,891		35		—		—		—		5,072
Grade 7 — Substandard	23,227		416		625		—		—		—		24,268
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	401,591		88,646		6,862		—		—		—		497,099
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		56,390		120,359		205,938		15,757		398,444
30-59 days past due loans not internally risk graded	—		—		64		932		332		183		1,511
60-89 days past due loans not internally risk graded	—		—		960		707		30		25		1,722
90+ days past due loans not internally risk graded	—		—		2,231		1,078		23		191		3,523
Total loans not internally credit risk graded	—		—		59,645		123,076		206,323		16,156		405,200
Total loans internally and not internally credit risk graded	$	401,591	$	88,646	$	66,507	$	123,076	$	206,323	$	16,156	$	902,299


*	Residential loans with an internal commercial credit risk grade include loans that are secured by non-owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.



Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
Commercial Credit Exposure	December 31, 2012
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	114	$	—	$	—	$	—	$	—	$	114
Grade 2 — Modest	—		—		—		—		—		—		—
Grade 3 — Better than average	1,100		6		—		—		—		—		1,106
Grade 4 — Average	30,604		4,547		626		—		—		—		35,777
Grade 5 — Acceptable	342,067		60,023		5,584		—		—		—		407,674
Total Pass Credits	373,771		64,690		6,210		—		—		—		444,671
Grade 6 — Special mention	12,201		3,394		42		—		—		—		15,637
Grade 7 — Substandard	27,268		621		1,468		—		—		—		29,357
Grade 8 — Doubtful	765		—		—		—		—		—		765
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	414,005		68,705		7,720		—		—		—		490,430
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		54,416		120,196		198,983		11,912		385,507
30-59 days past due loans not internally risk graded	—		—		394		630		645		26		1,695
60-89 days past due loans not internally risk graded	—		—		1,094		494		227		40		1,855
90+ days past due loans not internally risk graded	—		—		1,359		1,510		69		123		3,061
Total loans not internally credit risk graded	—		—		57,263		122,830		199,924		12,101		392,118
Total loans internally and not internally credit risk graded	$	414,005	$	68,705	$	64,983	$	122,830	$	199,924	$	12,101	$	882,548

* Residential loans with an internal commercial credit risk grade include loans that are secured by non-owner occupied 1-4 family residential properties and conventional 1-4 family residential properties.