Loans

6 Months Ended

Jun. 30, 2011

Receivables [Abstract]

Loans

Note 3 – Loans

The following table shows the composition of the Company’s loan portfolio as of June 30, 2011 and 2010 and at December 31, 2010:

	June 30, 2011				December 31, 2010				June 30, 2010
Commercial
Real estate	$	263,337,000	29.7	%	$	245,540,000	27.7	%	$	260,799,000	28.0	%
Construction		29,386,000	3.3	%		41,869,000	4.7	%		35,932,000	3.9	%
Other		102,499,000	11.6	%		101,462,000	11.4	%		113,831,000	12.2	%
Municipal		19,974,000	2.3	%		21,833,000	2.5	%		23,795,000	2.6	%
Residential
Term		335,807,000	37.9	%		337,927,000	38.1	%		359,774,000	38.4	%
Construction		11,063,000	1.2	%		15,512,000	1.7	%		18,302,000	2.0	%
Home equity line of credit		107,224,000	12.0	%		105,297,000	11.9	%		100,450,000	10.8	%
Consumer		17,639,000	2.0	%		18,156,000	2.0	%		19,127,000	2.1	%
Total loans	$	886,929,000	100.0	%	$	887,596,000	100.0	%	$	932,010,000	100.0	%

Loan balances include net deferred loan costs of $1.4 million as of June 30, 2011 and $1.3 million as of December 31, 2010. Pursuant to collateral agreements, qualifying first mortgage loans, which were valued at $180.8 million at June 30, 2011 and $192.9 million at December 31, 2010, were used to collateralize borrowings from the Federal Home Loan Bank of Boston. In addition, commercial, construction and home equity loans totaling $329.7 million at June 30, 2011 and $342.9 million at December 31, 2010 were used to collateralize a standby line of credit at the Federal Reserve Bank of Boston that is currently unused.

Loans on non-accrual status totaled $22.0 million at June 30, 2011, $21.2 million at December 31, 2010 and $23.6 million at June 30, 2010. Loans past due 90 days or greater which are accruing interest totaled $355,000 at June 30, 2011, $1,116,000 at December 31, 2010 and $1,394,000 at June 30, 2010. The Company continues to accrue interest on these loans because it believes collection of principal and interest is reasonably assured.

Information on the past-due status of loans as of June 30, 2011, is presented in the following table:

	30-89 Days Past Due		90+ Days Past Due		All Past Due		Current		Total		90+ Days & Accruing
Commercial
Real estate	$	2,227,000	$	4,051,000	$	6,278,000	$	257,059,000	$	263,337,000	$	-
Construction		117,000		-		117,000		29,269,000		29,386,000		-
Other		544,000		997,000		1,541,000		100,958,000		102,499,000		38,000
Municipal		-		-		-		19,974,000		19,974,000		-
Residential
Term		6,093,000		9,916,000		16,009,000		319,798,000		335,807,000		309,000
Construction		-		334,000		334,000		10,729,000		11,063,000		-
Home equity line of credit		868,000		740,000		1,608,000		105,616,000		107,224,000		-
Consumer		258,000		8,000		266,000		17,373,000		17,639,000		8,000
Total	$	10,107,000	$	16,046,000	$	26,153,000	$	860,776,000	$	886,929,000	$	355,000

Information on the past-due status of loans as of December 31, 2010, is presented in the following table:

	30-89 Days Past Due		90+ Days Past Due		All Past Due		Current		Total		90+ Days & Accruing
Commercial
Real estate	$	2,055,000	$	4,000,000	$	6,055,000	$	239,485,000	$	245,540,000	$	-
Construction		120,000		937,000		1,057,000		40,812,000		41,869,000		-
Other		3,070,000		1,370,000		4,440,000		97,022,000		101,462,000		524,000
Municipal		-		-		-		21,833,000		21,833,000		-
Residential
Term		4,535,000		7,696,000		12,231,000		325,696,000		337,927,000		585,000
Construction		104,000		1,724,000		1,828,000		13,684,000		15,512,000		-
Home equity line of credit		1,564,000		474,000		2,038,000		103,259,000		105,297,000		-
Consumer		259,000		7,000		266,000		17,890,000		18,156,000		7,000
Total	$	11,707,000	$	16,208,000	$	27,915,000	$	859,681,000	$	887,596,000	$	1,116,000

Loans are placed on non-accrual status when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement or when principal and interest is 90 days or more past due unless the loan is both well secured and in the process of collection (in which case the loan may continue to accrue interest in spite of its past due status). A loan is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially responsible party. A loan is "in the process of collection" if collection of the loan is proceeding in due course either (1) through legal action, including judgment enforcement procedures, or, (2) in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in its restoration to a current status in the near future.

Information on nonaccrual loans as of June 30, 2011 and 2010 and at December 31, 2010 is presented in the following table:

	June 30, 2011		December 31, 2010		June 30, 2010
Commercial
Real estate	$	6,746,000	$	5,946,000	$	7,333,000
Construction		771,000		937,000		472,000
Other		2,095,000		1,753,000		2,505,000
Municipal		-		-		-
Residential
Term		11,260,000		8,347,000		9,865,000
Construction		334,000		3,567,000		2,936,000
Home Equity Line of Credit		740,000		519,000		170,000
Consumer		103,000		106,000		326,000
Total	$	22,049,000	$	21,175,000	$	23,607,000

Information regarding impaired loans is as follows:

	June 30, 2011			December 31, 2010			June 30, 2010
Balance of impaired loans	$	26,981,000		$	25,283,000		$	26,599,000
Less portion for which no allowance for loan losses is allocated		(19,368,000	)		(15,773,000	)		(16,644,000	)
Portion of impaired loan balance for which an allowance for loan losses is allocated	$	7,613,000		$	9,510,000		$	9,955,000
Portion of allowance for loan losses allocated to the impaired loan balance	$	1,965,000		$	1,256,000		$	2,062,000

Impaired loans include restructured loans and loans placed on non-accrual status when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. These loans are measured at the present value of expected future cash flows discounted at the loan’s effective interest rate or at the fair value of the collateral if the loan is collateral dependent. If the measure of an impaired loan is lower than the recorded investment in the loan and estimated selling costs, a specific reserve is established for the difference.

A breakdown of impaired loans by category as of and for the three- and six-month periods ended June 30, 2011, is presented in the following table:

							For six months ended June 30, 2011				For the quarter ended June 30, 2011
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Un-Recognized Interest Income		Average Recorded Investment		Un-Recognized Interest Income
With No Related Allowance
Commercial
Real estate	$	5,841,000	$	5,841,000	$	-	$	5,151,000	$	143,000	$	5,738,000	$	80,000
Construction		772,000		772,000		-		617,000		22,000		790,000		14,000
Other		1,056,000		1,056,000		-		1,118,000		41,000		1,064,000		20,000
Municipal		-		-		-		-		-		-		-
Residential
Term		10,818,000		10,818,000		-		8,957,000		226,000		9,785,000		126,000
Construction		334,000		334,000		-		1,641,000		47,000		348,000		4,000
Heloc		509,000		509,000		-		417,000		6,000		516,000		4,000
Consumer		38,000		38,000		-		40,000		3,000		38,000		1,000
	$	19,368,000	$	19,368,000	$	-	$	17,941,000	$	488,000	$	18,279,000	$	249,000
With an Allowance Recorded
Commercial
Real estate	$	905,000	$	905,000	$	613,000	$	2,021,000	$	52,000	$	1,785,000	$	24,000
Construction		-		-		-		227,000		8,000		3,000		-
Other		1,039,000		1,039,000		857,000		652,000		21,000		754,000		11,000
Municipal		-		-		-		-		-		-		-
Residential
Term		5,373,000		5,373,000		265,000		5,254,000		65,000		4,978,000		31,000
Construction		-		-		-		192,000		5,000		192,000		2,000
Heloc		231,000		231,000		165,000		256,000		4,000		281,000		2,000
Consumer		65,000		65,000		65,000		69,000		2,000		65,000		1,000
	$	7,613,000	$	7,613,000	$	1,965,000	$	8,671,000	$	157,000	$	8,058,000	$	71,000
Total
Commercial
Real estate	$	6,746,000	$	6,746,000	$	613,000	$	7,171,000	$	195,000	$	7,521,000	$	104,000
Construction		772,000		772,000		-		844,000		29,000		793,000		13,000
Other		2,095,000		2,095,000		857,000		1,770,000		63,000		1,816,000		31,000
Municipal		-		-		-		-		-		-		-
Residential
Term		16,191,000		16,191,000		265,000		14,210,000		290,000		14,761,000		156,000
Construction		334,000		334,000		-		1,833,000		52,000		539,000		6,000
Heloc		740,000		740,000		165,000		673,000		10,000		797,000		6,000
Consumer		103,000		103,000		65,000		109,000		5,000		103,000		2,000
	$	26,981,000	$	26,981,000	$	1,965,000	$	26,610,000	$	644,000	$	26,330,000	$	318,000

A breakdown of impaired loans by category as of December 31, 2010, is presented in the following table:

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Unrecognized Interest Income
With No Related Allowance
Commercial
Real estate	$	3,531,000	$	3,531,000	$	-	$	3,967,000	$	232,000
Construction		257,000		257,000		-		271,000		20,000
Other		1,256,000		1,256,000		-		1,484,000		104,000
Municipal		-		-		-		-		-
Residential
Term		6,804,000		6,804,000		-		7,814,000		436,000
Construction		3,567,000		3,567,000		-		2,573,000		134,000
Home Equity Line of Credit		319,000		319,000		-		196,000		6,000
Consumer		39,000		39,000		-		20,000		3,000
	$	15,773,000	$	15,773,000	$	-	$	16,325,000	$	935,000
With an Allowance Recorded
Commercial
Real estate	$	2,415,000	$	2,415,000	$	192,000	$	2,925,000	$	157,000
Construction		680,000		680,000		152,000		305,000		22,000
Other		497,000		497,000		291,000		912,000		60,000
Municipal		-		-		-		-		-
Residential
Term		5,651,000		5,651,000		432,000		4,869,000		134,000
Construction		-		-		-		281,000		14,000
Home Equity Line of Credit		200,000		200,000		122,000		87,000		3,000
Consumer		67,000		67,000		67,000		132,000		9,000
	$	9,510,000	$	9,510,000	$	1,256,000	$	9,511,000	$	399,000
Total
Commercial
Real estate	$	5,946,000	$	5,946,000	$	192,000	$	6,892,000	$	389,000
Construction		937,000		937,000		152,000		576,000		42,000
Other		1,753,000		1,753,000		291,000		2,396,000		164,000
Municipal		-		-		-		-		-
Residential
Term		12,455,000		12,455,000		432,000		12,683,000		570,000
Construction		3,567,000		3,567,000		-		2,854,000		148,000
Home Equity Line of Credit		519,000		519,000		122,000		283,000		9,000
Consumer		106,000		106,000		67,000		152,000		12,000
	$	25,283,000	$	25,283,000	$	1,256,000	$	25,836,000	$	1,334,000