Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2014

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

Activity in the allowance for loan losses by segment for the three months ended March 31, 2014 and 2013 are summarized as follows:



Three Months Ended March 31, 2014
	Commercial Real Estate			Commercial			Residential Real Estate			Home Equity Loans			Indirect			Consumer			Total
	(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	10,122		$	497		$	1,411		$	3,484		$	1,593		$	398		$	17,505
Losses charged off	(546		)	—			(77		)	(222		)	(70		)	(83		)	(998		)
Recoveries	6			1			2			11			58			12			90
Provision charged to expense	662			(34		)	147			205			(68		)	(12		)	900
Balance, end of period	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	838		$	73		$	6		$	—		$	—		$	—		$	917
Collectively evaluated for impairment	9,406			391			1,477			3,478			1,513			315			16,580
Total ending allowance balance	$	10,244		$	464		$	1,483		$	3,478		$	1,513		$	315		$	17,497
Loans:
Individually evaluated for impairment	$	16,175		$	460		$	1,254		$	980		$	190		$	65		$	19,124
Collectively evaluated for impairment	392,292			82,837			67,417			121,844			209,504			17,171			891,065
Total ending loans balance	$	408,467		$	83,297		$	68,671		$	122,824		$	209,694		$	17,236		$	910,189



Three Months Ended March 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 period	$	11,386		$	835		$	1,559		$	2,357		$	1,230		$	270		$	17,637
Losses charged off	(123		)	(63		)	(513		)	(436		)	(216		)	(77		)	(1,428		)
Recoveries	7			4			64			47			94			31			247
Provision charged to expense	(486		)	(242		)	554			980			502			42			1,350
Balance, end of period	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,778		$	192		$	—		$	—		$	—		$	—		$	1,970
Collectively evaluated for impairment	9,006			$	342		$	1,664		$	2,948		$	1,610		$	266		15,836
Total ending allowance balance	$	10,784		$	534		$	1,664		$	2,948		$	1,610		$	266		$	17,806
Loans:
Individually evaluated for impairment	$	23,941		$	564		$	1,991		$	483		$	99		$	59		$	27,137
Collectively evaluated for impairment	391,812			75,345			62,495			121,281			199,865			11,996			862,794
Total ending loans balance	$	415,753		$	75,909		$	64,486		$	121,764		$	199,964		$	12,055		$	889,931



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

Age Analysis of Past Due Loans

Information regarding delinquent loans as of March 31, 2014 and December 31, 2013 is as follows:

Age Analysis of Past Due Loans as of March 31, 2014



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days and Accruing
Commercial real estate	$	741	$	1,260	$	6,319	$	8,320	$	400,147	$	408,467	$	—
Commercial	68		—		159		227		83,070		83,297		—
Residential real estate	422		340		2,076		2,838		65,833		68,671		—
Home equity loans	872		591		1,643		3,106		119,718		122,824		—
Indirect	169		51		5		225		209,469		209,694
Consumer	33		60		95		188		17,048		17,236		—
Total	$	2,305	$	2,302	$	10,297	$	14,904	$	895,285	$	910,189	$	—

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



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater		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

Impaired Loans

Impaired loans for the Period Ended March 31, 2014 and December 31, 2013 are as follows:



	At March 31, 2014						Three Months Ended March 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Balance
	(Dollars in thousands)
With no related allowance recorded:
Commercial real estate	$	12,512	$	16,899	$	—	$	14,021
Commercial	202		255		—		208
Residential real estate	1,233		1,371		—		1,482
Home equity loans	980		1,563		—		1,045
Indirect	190		263		—		192
Consumer	65		97		—		113
With allowance recorded:
Commercial real estate	3,663		5,553		838		2,988
Commercial	258		258		73		258
Residential real estate	21		82		6		11
Home equity loans	—		—		—		—
Indirect	—		—		—		—
Consumer	—		—		—		—
Total	$	19,124	$	26,341	$	917	$	20,318

	At December 31, 2013						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

*impaired loans shown in the tables 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.

Troubled Debt Restructuring Loan Information

The following table provides the number of loans modified in a TDR and the recorded investment and unpaid principal balance by loan segment as of March 31, 2014 and 2013.



	Three Months Ended March 31, 2014
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	18	$6,214	$8,530
Commercial	1	—	171
Residential real estate	13	964	1,070
Home equity loans	28	786	1,322
Indirect Loans	39	190	263
Consumer Loans	1	65	65
Total	100	$8,219	$11,421



	Three Months Ended March 31, 2013
	(Dollars in thousands)
	Number of Contracts	Recorded Investment	Unpaid Principal
Commercial real estate	14	$6,796	$8,772
Commercial	1	—	171
Residential real estate	10	946	973
Home equity loans	14	483	688
Indirect Loans	14	99	161
Consumer Loans	1	59	59
Total	54	$8,383	$10,824

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



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

Loans on Nonaccrual Status

Nonaccrual loan balances at March 31, 2014 and December 31, 2013 are as follows:



Loans On Non-Accrual Status	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Commercial real estate	$	10,145	$	11,241
Commercial	227		289
Residential real estate	5,127		5,231
Home equity loans	4,845		4,464
Indirect	362		443
Consumer	212		318
Total Nonaccrual Loans	$	20,918	$	21,986

Summary of Recorded Investment Based on Delinquency Status

The following tables present 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 March 31, 2014 and December 31, 2013:



Commercial Credit Exposure	Commercial Real Estate		Commercial		Residential Real Estate*		Home Equity Loans		Indirect		Consumer		Total
Commercial Credit Exposure	March 31, 2014
	(Dollars in thousands)
Loans graded by internal credit risk grade:
Grade 1 — Minimal	$	—	$	51	$	—	$	—	$	—	$	—	$	51
Grade 2 — Modest	—		39		—		—		—		—		39
Grade 3 — Better than average	848		—		—		—		—		—		848
Grade 4 — Average	20,204		164		611		—		—		—		20,979
Grade 5 — Acceptable	361,379		79,884		5,654		—		—		—		446,917
Total Pass Credits	382,431		80,138		6,265		—		—		—		468,834
Grade 6 — Special mention	3,341		118		32		—		—		—		3,491
Grade 7 — Substandard	22,695		3,041		615		—		—		—		26,351
Grade 8 — Doubtful	—		—		—		—		—		—		—
Grade 9 — Loss	—		—		—		—		—		—		—
Total loans internally credit risk graded	408,467		83,297		6,912		—		—		—		498,676
Loans not monitored by internal risk grade:
Current loans not internally risk graded	—		—		59,525		119,718		209,469		17,048		405,760
30-59 days past due loans not internally risk graded	—		—		65		872		169		33		1,139
60-89 days past due loans not internally risk graded	—		—		340		591		51		60		1,042
90+ days past due loans not internally risk graded	—		—		1,829		1,643		5		95		3,572
Total loans not internally credit risk graded	—		—		61,759		122,824		209,694		17,236		411,513
Total loans internally and not internally credit risk graded	$	408,467	$	83,297	$	68,671	$	122,824	$	209,694	$	17,236	$	910,189


*	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, 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.