Allowance for Loan Losses and Credit Quality of Loans (Tables)

12 Months Ended

Dec. 31, 2012

Allowance for Loan Losses and Credit Quality of Loans and Leases [Abstract]

After a thorough consideration of the factors discussed above, any required additions to the allowance for loan losses are made periodically by charges to the provision for loan losses. These charges are necessary to maintain the allowance at a level which management believes is reasonably reflective of overall inherent risk of probable loss in the portfolio. While management uses available information to recognize losses on loans, additions to the allowance may fluctuate from one reporting period to another. These fluctuations are reflective of changes in risk associated with portfolio content and/or changes in management's assessment of any or all of the determining factors discussed above. The following table illustrates the changes in the allowance for loan losses by portfolio segment for the years ended December 31, 2012 and 2011

Allowance for Loan Losses
(in thousands)

Years ended December 31							Residential
	Commercial			Consumer			Real Estate
	Loans			Loans			Mortgages			Unallocated			Total
Balance as of December 31, 2011	$	38,831		$	26,049		$	6,249		$	205		$	71,334
Charge-offs		(8,750	)		(15,848	)		(1,906	)		-			(26,504	)
Recoveries		1,641			2,556			38			-			4,235
Provision		3,902			14,405			1,871			91			20,269
Ending Balance as of December 31, 2012	$	35,624		$	27,162		$	6,252		$	296		$	69,334

Balance as of December 31, 2010	$	40,101		$	26,126		$	4,627		$	380		$	71,234
Charge-offs		(8,969	)		(14,209	)		(1,310	)		-			(24,488	)
Recoveries		1,438			2,406			7			-			3,851
Provision		6,261			11,726			2,925			(175	)		20,737
Ending Balance as of December 31, 2011	$	38,831		$	26,049		$	6,249		$	205		$	71,334

Balance as of December 31, 2009	$	36,599		$	26,664		$	3,002		$	285		$	66,550
Charge-offs		(12,969	)		(15,692	)		(1,176	)		-			(29,837	)
Recoveries		1,922			2,747			43			-			4,712
Provision		14,549			12,407			2,758			95			29,809
Ending Balance as of December 31, 2010	$	40,101		$	26,126		$	4,627		$	380		$	71,234

The following table illustrates the allowance for loan losses and the recorded investment by portfolio segment as of December 31, 2012 and 2011:

Allowance for Loan Losses and Recorded Investment in Loans
(in thousands)

					Residential
	Commercial		Consumer		Real Estate
	Loans		Loans		Mortgages		Unallocated		Total
As of December 31, 2012
Allowance for loan losses	$	35,624	$	27,162	$	6,252	$	296	$	69,334
Allowance for loans individually evaluated for impairment	$	2,848	$	-	$	-			$	2,848
Allowance for loans collectively evaluated for impairment	$	32,776	$	27,162	$	6,252	$	296	$	66,486
Ending balance of loans	$	2,003,371	$	1,623,138	$	651,107			$	4,277,616
Ending balance of loans individually evaluated for impairment	$	11,972	$	-	$	-			$	11,972
Ending balance of loans collectively evaluated for impairment	$	1,991,399	$	1,623,138	$	651,107			$	4,265,644

As of December 31, 2011
Allowance for loan losses	$	38,831	$	26,049	$	6,249	$	205	$	71,334
Allowance for loans individually evaluated for impairment	$	175	$	-	$	-			$	175
Allowance for loans collectively evaluated for impairment	$	38,656	$	26,049	$	6,249	$	205	$	71,159
Ending balance of loans	$	1,702,577	$	1,516,115	$	581,511			$	3,800,203
Ending balance of loans individually evaluated for impairment	$	6,219	$	-	$	-			$	6,219
Ending balance of loans collectively evaluated for impairment	$	1,696,358	$	1,516,115	$	581,511			$	3,793,984

Past due and nonperforming loans by loan class

The following table illustrates the Company's nonaccrual loans by loan class as of December 31, 2012 and 2011:

Loans on Nonaccrual Status
As of December 31, 2012

(In thousands)	December 31, 2012		December 31, 2011
Commercial Loans
Commercial	$	4,985	$	1,699
Commercial Real Estate		7,977		4,868
Agricultural		699		3,307
Agricultural Real Estate		1,038		2,067
Business Banking		6,738		7,446
		21,437		19,387

Consumer Loans
Indirect		1,557		1,550
Home Equity		7,247		7,931
Direct		266		378
		9,070		9,859

Residential Real Estate Mortgages		9,169		9,044

Total Nonaccrual	$	39,676	$	38,290

The following table sets forth information with regard to past due and nonperforming loans by loan class:

Age Analysis of Past Due Loans

As of December 31, 2012

(in thousands)


					Greater Than								Recorded
	31-60 Days		61-90 Days		90 Days		Total						Total
	Past Due		Past Due		Past Due		Past Due						Loans and
	Accruing		Accruing		Accruing		Accruing		Non-Accrual		Current		Leases
Commercial
Commercial	$	-	$	-	$	-	$	-	$	4,985	$	556,496	$	561,481
Commercial Real Estate		126		-		-		126		7,977		966,692		974,795
Agricultural		22		-		-		22		699		63,037		63,758
Agricultural Real Estate		108		-		103		211		1,038		36,128		37,377
Business Banking		3,019		708		45		3,772		6,738		355,450		365,960
		3,275		708		148		4,131		21,437		1,977,803		2,003,371

Consumer
Indirect		10,956		2,477		1,205		14,638		1,557		964,802		980,997
Home Equity		6,065		1,223		681		7,969		7,247		560,066		575,282
Direct		717		144		84		945		266		65,648		66,859
		17,738		3,844		1,970		23,552		9,070		1,590,516		1,623,138

Residential Real Estate Mortgages		1,839		725		330		2,894		9,169		639,044		651,107
	$	22,852	$	5,277	$	2,448	$	30,577	$	39,676	$	4,207,363	$	4,277,616

Age Analysis of Past Due Loans

As of December 31, 2011

(in thousands)


					Greater Than								Recorded
	31-60 Days		61-90 Days		90 Days		Total						Total
	Past Due		Past Due		Past Due		Past Due						Loans and
	Accruing		Accruing		Accruing		Accruing		Non-Accrual		Current		Leases
Commercial Loans
Commercial	$	663	$	50	$	-	$	713	$	1,699	$	508,662	$	511,074
Commercial Real Estate		1,942		-		-		1,942		4,868		828,089		834,899
Agricultural		77		13		-		90		3,307		63,140		66,537
Agricultural Real Estate		-		-		50		50		2,067		31,809		33,926
Business Banking		1,871		1,024		-		2,895		7,446		245,800		256,141
		4,553		1,087		50		5,690		19,387		1,677,500		1,702,577

Consumer Loans
Indirect		12,141		2,584		1,283		16,008		1,550		855,545		873,103
Home Equity		5,823		1,277		954		8,054		7,931		553,660		569,645
Direct		831		191		140		1,162		378		71,827		73,367
		18,795		4,052		2,377		25,224		9,859		1,481,032		1,516,115

Residential Real Estate Mortgages		2,003		139		763		2,905		9,044		569,562		581,511
	$	25,351	$	5,278	$	3,190	$	33,819	$	38,290	$	3,728,094	$	3,800,203

Impaired loans and specific reserve allocations

The following provides additional information on impaired loans for the years ended December 31, 2012 and 2011:

Impaired Loans
	December 31, 2012						December 31, 2011
	Recorded		Unpaid				Recorded		Unpaid
	Investment		Principal				Investment		Principal
	Balance		Balance		Related		Balance		Balance		Related
(in thousands)	(Book)		(Legal)		Allowance		(Book)		(Legal)		Allowance
With no related allowance recorded:
Commercial Loans
Commercial	$	650	$	709			$	1,243	$	2,723
Commercial Real Estate		3,909		4,753				4,868		7,165
Agricultural		699		1,019				3,307		4,166
Agricultural Real Estate		1,038		1,225				2,067		2,288
Business Banking		6,738		9,269				7,446		9,976
Total Commercial Loans		13,034		16,975				18,931		26,318

Consumer Loans
Home Equity		2,553		2,657				2,000		2,103

Residential Real Estate Mortgages		2,011		2,308				1,040		1,125
		17,598		21,940				21,971		29,546

With an allowance recorded:
Commercial Loans
Commercial	$	4,335	$	4,340	$	2,241	$	456	$	808	$	175
Commercial Real Estate		4,068		5,689		607		-		-		-
Agricultural		-		-		-		-		-		-
Agricultural Real Estate		-		-		-		-		-		-
		8,403		10,029		2,848		456		808		175

Total:	$	26,001	$	31,969	$	2,848	$	22,427	$	30,354	$	175

The following table summarizes the average recorded investments on impaired loans and the interest income recognized for the years ended December 31, 2012, 2011 and 2010:

	December 31, 2012						December 31, 2011						December 31, 2010
	Average		Interest Income				Average		Interest Income				Average		Interest Income
	Recorded		Recognized				Recorded		Recognized				Recorded		Recognized
(in thousands)	Investment		Accrual		Cash		Investment		Accrual		Cash		Investment		Accrual		Cash
With no related allowance recorded:
Commercial Loans
Commercial	$	1,421	$	25	$	25	$	2,322	$	94	$	94	$	1,898	$	113	$	113
Commercial Real Estate		6,167		70		70		4,794		163		163		4,219		317		317
Agricultural		2,611		368		368		3,013		133		133		2,990		82		82
Agricultural Real Estate		1,575		86		86		1,719		109		109		1,929		150		150
Business Banking		6,636		227		227		6,121		266		266		4,959		234		234
Consumer Loans
Home Equity		1,877		66		66		1,904		91		91		-		-		-
Residential Real Estate Mortgages		1,143		73		73		926		58		58		132		6		6
	$	21,429	$	915	$	915	$	20,798	$	914	$	914	$	16,127	$	902	$	902

With an allowance recorded:
Commercial Loans
Commercial	$	4,217	$	43	$	43	$	861	$	86	$	86	$	2,366	$	118	$	118
Commercial Real Estate		339		-		-		287		-		-		1,234		-		-
Agricultural		-		-		-		791		68		68		1,386		150		150
Agricultural Real Estate		-		-		-		357		18		18		816		67		67
	$	4,556	$	43	$	43	$	2,295	$	172	$	172	$	5,802	$	335	$	335

Total:	$	25,985	$	958	$	958	$	23,094	$	1,086	$	1,086	$	21,929	$	1,237	$	1,237

Financing receivable credit quality by loan class

The following tables illustrates the Company's credit quality by loan class for the years ended December 31, 2012 and 2011:

Credit Quality Indicators

As of December 31, 2012

Commercial Credit Exposure			Commercial				Agricultural
By Internally Assigned Grade:	Commercial		Real Estate		Agricultural		Real Estate		Total
Pass	$	522,985	$	901,928	$	57,347	$	33,472	$	1,515,732
Special Mention		18,401		32,135		13		3		50,552
Substandard		17,351		40,732		6,362		3,902		68,347
Doubtful		2,744		-		36		-		2,780
Total	$	561,481	$	974,795	$	63,758	$	37,377	$	1,637,411

Business Banking Credit Exposure	Business
By Internally Assigned Grade:	Banking								Total
Non-classified	$	342,528							$	342,528
Classified		23,432								23,432
Total	$	365,960							$	365,960

Consumer Credit Exposure
By Payment Activity:	Indirect		Home Equity		Direct				Total
Performing	$	978,235	$	567,354	$	66,509			$	1,612,098
Nonperforming		2,762		7,928		350				11,040
Total	$	980,997	$	575,282	$	66,859			$	1,623,138

Residential Mortgage Credit Exposure	Residential
By Payment Activity:	Mortgage								Total
Performing	$	641,608							$	641,608
Nonperforming		9,499								9,499
Total	$	651,107							$	651,107

Credit Quality Indicators

As of December 31, 2011

Commercial Credit Exposure			Commercial				Agricultural
By Internally Assigned Grade:	Commercial		Real Estate		Agricultural		Real Estate		Total
Pass	$	470,332	$	758,673	$	58,481	$	28,927	$	1,316,413
Special Mention		10,346		24,478		42		10		34,876
Substandard		29,940		51,748		7,945		4,989		94,622
Doubtful		456		-		69		-		525
Total	$	511,074	$	834,899	$	66,537	$	33,926	$	1,446,436

Business Banking Credit Exposure	Business
By Internally Assigned Grade:	Banking								Total
Non-classified	$	237,887							$	237,887
Classified		18,254								18,254
Total	$	256,141							$	256,141

Consumer Credit Exposure
By Payment Activity:	Indirect		Home Equity		Direct				Total
Performing	$	870,270	$	560,760	$	72,849			$	1,503,879
Nonperforming		2,833		8,885		518				12,236
Total	$	873,103	$	569,645	$	73,367			$	1,516,115

Residential Mortgage Credit Exposure	Residential
By Payment Activity:	Mortgage								Total
Performing	$	571,704							$	571,704
Nonperforming		9,807								9,807
Total	$	581,511							$	581,511