Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses

Loan and lease receivables consist of the following:



	March 31, 2014		December 31, 2013
	(In Thousands)
Commercial real estate
Commercial real estate — owner occupied	$	137,648	$	141,164
Commercial real estate — non-owner occupied	336,806		341,695
Construction and land development	71,465		68,708
Multi-family	64,092		62,758
1-4 family	28,690		30,786
Total commercial real estate	638,701		645,111
Commercial and industrial	303,630		293,552
Direct financing leases, net	26,364		26,065
Consumer and other
Home equity and second mortgages	5,517		5,272
Other	12,009		11,972
Total consumer and other	17,526		17,244
Total gross loans and leases receivable	986,221		981,972
Less:
Allowance for loan and lease losses	14,101		13,901
Deferred loan fees	902		1,021
Loans and leases receivable, net	$	971,218	$	967,050

The total principal amount of loans transferred to third parties, which consisted solely of participation interests in originated loans, during the three months ended March 31, 2014 and 2013 was $6.2 million and $3.8 million, respectively. Each of the transfers of these financial assets met the qualifications for sale accounting, including the requirements specific to loan participations, and therefore all of the loans transferred during the three months ended March 31, 2014 and March 31, 2013 have been derecognized in the unaudited Consolidated Financial Statements. The Corporation has a continuing involvement in each of the agreements by way of relationship management and servicing the loans; however, there are no further obligations to the third-party participant required of the Corporation in the event of a borrower’s default, other than standard representations and warranties related to sold amounts. The loans were transferred at their fair value and no gain or loss was recognized upon the transfer, as the participation interest was transferred at or near the date of loan origination and the payments received for servicing the portion of the loans participated represents adequate compensation. The total amount of loan participations purchased on the Corporation’s Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 was $494,000 and $498,000, respectively.

The total amount of outstanding loans transferred to third parties as loan participations sold at March 31, 2014 and December 31, 2013 was $49.1 million and $52.1 million, respectively, all of which was treated as a sale and derecognized under the applicable accounting guidance in effect at the time of the transfers of the financial assets. The Corporation’s continuing involvement with these loans is by way of partial ownership, relationship management and all servicing responsibilities. As of March 31, 2014 and December 31, 2013, the total amount of the Corporation’s partial ownership of loans on the Corporation’s Consolidated Balance Sheets was $75.0 million and $77.2 million, respectively. As of March 31, 2014 and December 31, 2013, no loans in this participation sold portfolio were considered impaired. The Corporation does not share in the participant’s portion of the charge-offs.

At each of March 31, 2014 and December 31, 2013, the carrying amount of the loan purchased with deteriorated credit quality was $1.4 million. This loan is classified as a non-performing troubled debt restructuring because the Corporation cannot reasonably estimate the timing of the cash flows expected to be collected and therefore the discount will not be accreted to earnings until the carrying amount is fully paid. During the three months ended March 31, 2014, there were no changes to the allowance for loan and lease losses relating to this loan, as it is a collateral dependent loan and was deemed to have sufficient collateral value as of March 31, 2014 to support the carrying value.

The following information illustrates ending balances of the Corporation’s loan and lease portfolio, including impaired loans by class of receivable, and considering certain credit quality indicators as of March 31, 2014 and December 31, 2013:



	Category
As of March 31, 2014	I			II			III			IV			Total
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	112,896		$	9,472		$	14,947		$	333		$	137,648
Commercial real estate — non-owner occupied	288,387			27,165			20,977			277			336,806
Construction and land development	55,821			2,543			7,693			5,408			71,465
Multi-family	58,420			5,644			—			28			64,092
1-4 family	19,356			5,441			3,245			648			28,690
Total commercial real estate	534,880			50,265			46,862			6,694			638,701

Commercial and industrial	276,575			12,930			7,468			6,657			303,630

Direct financing leases, net	23,079			3,228			57			—			26,364

Consumer and other:
Home equity and second mortgages	4,727			21			201			568			5,517
Other	11,232			—			—			777			12,009
Total consumer and other	15,959			21			201			1,345			17,526

Total gross loans and leases receivable	$	850,493		$	66,444		$	54,588		$	14,696		$	986,221
Category as a % of total portfolio	86.24		%	6.74		%	5.54		%	1.49		%	100.00		%



	Category
As of December 31, 2013	I			II			III			IV			Total
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	118,764		$	11,259		$	10,802		$	339		$	141,164
Commercial real estate — non-owner occupied	290,865			29,444			21,103			283			341,695
Construction and land development	53,493			1,972			7,754			5,489			68,708
Multi-family	57,049			5,678			—			31			62,758
1-4 family	19,197			7,611			3,312			666			30,786
Total commercial real estate	539,368			55,964			42,971			6,808			645,111

Commercial and industrial	268,109			11,688			5,712			8,043			293,552

Direct financing leases, net	23,171			2,421			473			—			26,065

Consumer and other:
Home equity and second mortgages	4,408			134			150			580			5,272
Other	11,177			—			—			795			11,972
Total consumer and other	15,585			134			150			1,375			17,244

Total gross loans and leases receivable	$	846,233		$	70,207		$	49,306		$	16,226		$	981,972
Category as a % of total portfolio	86.18		%	7.15		%	5.02		%	1.65		%	100.00		%

Credit underwriting through a committee process is a key component of the Corporation’s operating philosophy. Business development officers have relatively low individual lending authority limits, and thus a significant portion of the Corporation’s new credit extensions require approval from a loan approval committee regardless of the type of loan or lease, asset quality grade of the credit, amount of the credit, or the related complexities of each proposal. In addition, the Corporation makes every effort to ensure that there is appropriate collateral at the time of origination to protect the Corporation’s interest in the related loan or lease.

Each credit is evaluated for proper risk rating upon origination, at the time of each subsequent renewal, upon receipt and evaluation of updated financial information from the Corporation’s borrowers, or as other circumstances dictate. The Corporation uses a nine grade risk rating system to monitor the ongoing credit quality of its loans and leases. The risk rating grades follow a consistent definition, and are then applied to specific loan types based on the nature of the loan. Each risk rating is subjective and, depending on the size and nature of the credit, subject to various levels of review and concurrence on the stated risk rating. In addition to its nine grade risk rating system, the Corporation groups loans into four loan and related risk categories which determine the level and nature of review by management.

Category I — Loans and leases in this category are performing in accordance with the terms of the contract and generally exhibit no immediate concerns regarding the security and viability of the underlying collateral, financial stability of the borrower, integrity or strength of the borrower’s management team or the industry in which the borrower operates. Loans and leases in this category are not subject to additional monitoring procedures above and beyond what is required at the origination or renewal of the loan or lease. The Corporation monitors Category I loans and leases through payment performance, continued maintenance of its personal relationships with such borrowers and continued review of such borrowers’ compliance with the terms of their respective agreements.

Category II — Loans and leases in this category are beginning to show signs of deterioration in one or more of the Corporation’s core underwriting criteria such as financial stability, management strength, industry trends and collateral values. Management will place credits in this category to allow for proactive monitoring and resolution with the borrower to possibly mitigate the area of concern and prevent further deterioration or risk of loss to the Corporation. Category II loans are considered performing but are monitored frequently by the assigned business development officer and by subcommittees of the Banks’ loan committees.

Category III — Loans and leases in this category are identified by management as warranting special attention. However, the balance in this category is not intended to represent the amount of adversely classified assets held by the Banks. Category III loans and leases generally exhibit undesirable characteristics such as evidence of adverse financial trends and conditions, managerial problems, deteriorating economic conditions within the related industry, or evidence of adverse public filings and may exhibit collateral shortfall positions. Management continues to believe that it will collect all required principal and interest in accordance with the original terms of the contracts relating to the loans and leases in this category, and therefore Category III loans are considered performing with no specific reserves established for this category. Category III loans are monitored by management and loan committees of the Banks on a monthly basis and the Banks’ Boards of Directors at each of their regularly scheduled meetings.

Category IV — Loans and leases in this category are considered to be impaired. Impaired loans and leases have been placed on non-accrual as management has determined that it is unlikely that the Banks will receive the required principal and interest in accordance with the contractual terms of the agreement. Impaired loans are individually evaluated to assess the need for the establishment of specific reserves or charge-offs. When analyzing the adequacy of collateral, the Corporation obtains external appraisals at least annually for impaired loans and leases. External appraisals are obtained from the Corporation’s approved appraiser listing and are independently reviewed to monitor the quality of such appraisals. To the extent a collateral shortfall position is present, a specific reserve or charge-off will be recorded to reflect the magnitude of the impairment. Loans and leases in this category are monitored by management and loan committees of the Banks on a monthly basis and the Banks’ Boards of Directors at each of their regularly scheduled meetings.

Utilizing regulatory classification terminology, the Corporation identified $21.3 million and $22.8 million of loans and leases as Substandard as of March 31, 2014 and December 31, 2013, respectively. No loans were considered Special Mention, Doubtful or Loss as of either March 31, 2014 or December 31, 2013. The population of Substandard loans are a subset of Category III and Category IV loans.

The delinquency aging of the loan and lease portfolio by class of receivable as of March 31, 2014 and December 31, 2013 were as follows:



As of March 31, 2014	30-59 days past due			60-89 days past due			Greater than 90 days past due			Total past due			Current			Total loans
	(Dollars in Thousands)
Accruing loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	—		$	—		$	137,396		$	137,396
Non-owner occupied	—			—			—			—			336,529			336,529
Construction and land development	—			—			—			—			66,123			66,123
Multi-family	—			—			—			—			64,064			64,064
1-4 family	45			—			—			45			28,255			28,300
Commercial and industrial	—			—			—			—			297,005			297,005
Direct financing leases, net	—			—			—			—			26,364			26,364
Consumer and other:
Home equity and second mortgages	—			—			—			—			5,098			5,098
Other	—			—			—			—			11,232			11,232
Total	45			—			—			45			972,066			972,111
Non-accruing loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	252		$	252		$	—		$	252
Non-owner occupied	—			—			—			—			277			277
Construction and land development	—			—			—			—			5,342			5,342
Multi-family	—			—			—			—			28			28
1-4 family	177			—			118			295			95			390
Commercial and industrial	186			3,559			2,739			6,484			141			6,625
Direct financing leases, net	—			—			—			—			—			—
Consumer and other:
Home equity and second mortgages	—			—			—			—			419			419
Other	—			—			777			777			—			777
Total	363			3,559			3,886			7,808			6,302			14,110
Total loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	252		$	252		$	137,396		$	137,648
Non-owner occupied	—			—			—			—			336,806			336,806
Construction and land development	—			—			—			—			71,465			71,465
Multi-family	—			—			—			—			64,092			64,092
1-4 family	222			—			118			340			28,350			28,690
Commercial and industrial	186			3,559			2,739			6,484			297,146			303,630
Direct financing leases, net	—			—			—			—			26,364			26,364
Consumer and other:
Home equity and second mortgages	—			—			—			—			5,517			5,517
Other	—			—			777			777			11,232			12,009
Total	$	408		$	3,559		$	3,886		$	7,853		$	978,368		$	986,221
Percent of portfolio	0.04		%	0.36		%	0.40		%	0.80		%	99.20		%	100.00		%



As of December 31, 2013	30-59 days past due			60-89 days past due			Greater than 90 days past due			Total past due			Current			Total loans
	(Dollars in Thousands)
Accruing loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	—		$	—		$	140,825		$	140,825
Non-owner occupied	—			—			—			—			341,412			341,412
Construction and land development	—			—			—			—			63,286			63,286
Multi-family	—			—			—			—			62,727			62,727
1-4 family	—			—			—			—			30,265			30,265
Commercial and industrial	—			—			—			—			285,541			285,541
Direct financing leases, net	—			—			—			—			26,065			26,065
Consumer and other:
Home equity and second mortgages	—			—			—			—			4,819			4,819
Other	—			—			—			—			11,177			11,177
Total	—			—			—			—			966,117			966,117
Non-accruing loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	254		$	254		$	85		$	339
Non-owner occupied	—			—			—			—			283			283
Construction and land development	—			—			—			—			5,422			5,422
Multi-family	—			—			—			—			31			31
1-4 family	—			180			123			303			218			521
Commercial and industrial	1,944			1,407			53			3,404			4,607			8,011
Direct financing leases, net	—			—			—			—			—			—
Consumer and other:
Home equity and second mortgages	—			—			85			85			368			453
Other	—			—			795			795			—			795
Total	1,944			1,587			1,310			4,841			11,014			15,855
Total loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	254		$	254		$	140,910		$	141,164
Non-owner occupied	—			—			—			—			341,695			341,695
Construction and land development	—			—			—			—			68,708			68,708
Multi-family	—			—			—			—			62,758			62,758
1-4 family	—			180			123			303			30,483			30,786
Commercial and industrial	1,944			1,407			53			3,404			290,148			293,552
Direct financing leases, net	—			—			—			—			26,065			26,065
Consumer and other:
Home equity and second mortgages	—			—			85			85			5,187			5,272
Other	—			—			795			795			11,177			11,972
Total	$	1,944		$	1,587		$	1,310		$	4,841		$	977,131		$	981,972
Percent of portfolio	0.20		%	0.16		%	0.13		%	0.49		%	99.51		%	100.00		%

The Corporation’s total impaired assets consisted of the following at March 31, 2014 and December 31, 2013, respectively.



	March 31, 2014		December 31, 2013
	(Dollars in Thousands)
Non-accrual loans and leases
Commercial real estate:
Commercial real estate — owner occupied	$	252	$	339
Commercial real estate — non-owner occupied	277		283
Construction and land development	5,342		5,422
Multi-family	28		31
1-4 family	390		521
Total non-accrual commercial real estate	6,289		6,596
Commercial and industrial	6,625		8,011
Direct financing leases, net	—		—
Consumer and other:
Home equity and second mortgages	419		453
Other	777		795
Total non-accrual consumer and other loans	1,196		1,248
Total non-accrual loans and leases	14,110		15,855
Foreclosed properties, net	333		333
Total non-performing assets	14,443		16,188
Performing troubled debt restructurings	586		371
Total impaired assets	$	15,029	$	16,559



	March 31, 2014		December 31, 2013
Total non-accrual loans and leases to gross loans and leases	1.43	%	1.61	%
Total non-performing assets to total gross loans and leases plus foreclosed properties, net	1.46		1.65
Total non-performing assets to total assets	1.13		1.28
Allowance for loan and lease losses to gross loans and leases	1.43		1.42
Allowance for loan and lease losses to non-accrual loans and leases	99.94		87.68

As of March 31, 2014 and December 31, 2013, $7.3 million and $8.1 million of the non-accrual loans were considered troubled debt restructurings, respectively. As of March 31, 2014, there were no unfunded commitments associated with troubled debt restructured loans and leases.



	As of March 31, 2014					As of December 31, 2013
	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
	(Dollars in Thousands)
Troubled debt restructurings:
Commercial real estate
Commercial real estate — owner occupied	1	$	110	$	82	1	$	110	$	84
Commercial real estate — non-owner occupied	3	385		277		3	385		283
Construction and land development	3	6,060		5,408		3	6,060		5,489
Multi-family	1	184		28		1	184		31
1-4 family	10	911		648		10	911		666
Commercial and industrial	4	386		209		5	1,935		565
Direct financing leases, net	—	—		—		—	—		—
Consumer and other:
Home equity and second mortgages	5	599		505		6	752		580
Other	1	2,076		777		1	2,076		795
Total	28	$	10,711	$	7,934	30	$	12,413	$	8,493

All loans and leases modified as a troubled debt restructuring are evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a default, is considered in the determination of an appropriate level of the allowance for loan and lease losses.

As of March 31, 2014 and December 31, 2013, the Corporation’s troubled debt restructurings grouped by type of concession were as follows:



	As of March 31, 2014			As of December 31, 2013
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	(Dollars in Thousands)
Commercial real estate
Extension of term	1	$	51	1	$	55
Combination of extension and interest rate concession	17	6,392		17	6,498
Commercial and industrial
Extension of term	—	—		1	49
Combination of extension and interest rate concession	4	209		4	516
Consumer and other
Extension of term	1	777		2	880
Combination of extension and interest rate concession	5	505		5	495
Total	28	$	7,934	30	$	8,493

There were no loans and leases modified in a troubled debt restructuring during the previous 12 months which subsequently defaulted during the three months ended March 31, 2014.

The following represents additional information regarding the Corporation’s impaired loans and leases by class:



	Impaired Loans and Leases
	As of and for the Three Months Ended March 31, 2014
	Recorded investment		Unpaid principal balance		Impairment reserve		Average recorded investment⁽¹⁾		Foregone interest income		Interest income recognized		Net foregone interest income
	(In Thousands)
With no impairment reserve recorded:
Commercial real estate:
Owner occupied	$	334	$	334	$	—	$	362	$	6	$	5	$	1
Non-owner occupied	224		224		—		227		3		—		3
Construction and land development	5,408		8,078		—		5,474		40		—		40
Multi-family	28		395		—		30		13		—		13
1-4 family	232		232		—		248		3		—		3
Commercial and industrial	214		225		—		446		3		219		(216		)
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	508		508		—		513		7		—		7
Other	777		1,443		—		786		22		—		22
Total	7,725		11,439		—		8,086		97		224		(127		)
With impairment reserve recorded:
Commercial real estate:
Owner occupied	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Non-owner occupied	53		93		53		53		1		—		1
Construction and land development	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	416		421		155		419		4		—		4
Commercial and industrial	6,443		6,443		239		6,902		96		—		96
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	60		60		60		60		1		—		1
Other	—		—		—		—		—		—		—
Total	6,972		7,017		507		7,434		102		—		102
Total:
Commercial real estate:
Owner occupied	$	334	$	334	$	—	$	362	$	6	$	5	$	1
Non-owner occupied	277		317		53		280		4		—		4
Construction and land development	5,408		8,078		—		5,474		40		—		40
Multi-family	28		395		—		30		13		—		13
1-4 family	648		653		155		667		7		—		7
Commercial and industrial	6,657		6,668		239		7,348		99		219		(120		)
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	568		568		60		573		8		—		8
Other	777		1,443		—		786		22		—		22
Grand total	$	14,697	$	18,456	$	507	$	15,520	$	199	$	224	$	(25	)


(1)	Average recorded investment is calculated primarily using daily average balances.



	Impaired Loans and Leases
	As of and for the Year Ended December 31, 2013
	Recorded investment		Unpaid principal balance		Impairment reserve		Average recorded investment⁽¹⁾		Foregone interest income		Interest income recognized		Net Foregone Interest Income
	(In Thousands)
With no impairment reserve recorded:
Commercial real estate:
Owner occupied	$	339	$	339	$	—	$	715	$	57	$	50	$	7
Non-owner occupied	229		229		—		1,586		198		17		181
Construction and land development	5,489		8,160		—		5,777		203		3		200
Multi-family	31		398		—		366		93		—		93
1-4 family	244		244		—		405		31		34		(3		)
Commercial and industrial	555		766		—		434		97		114		(17		)
Direct financing leases, net	—		—		—		6		—		—		—
Consumer and other:
Home equity and second mortgages	518		518		—		593		37		3		34
Other	795		1,461		—		942		100		—		100
Total	8,200		12,115		—		10,824		816		221		595
With impairment reserve recorded:
Commercial real estate:
Owner occupied	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Non-owner occupied	54		94		54		88		6		—		6
Construction and land development	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	422		422		155		437		18		—		18
Commercial and industrial	7,488		7,488		131		670		42		—		42
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	62		62		62		65		5		—		5
Other	—		—		—		—		—		—		—
Total	8,026		8,066		402		1,260		71		—		71
Total:
Commercial real estate:
Owner occupied	$	339	$	339	$	—	$	715	$	57	$	50	$	7
Non-owner occupied	283		323		54		1,674		204		17		187
Construction and land development	5,489		8,160		—		5,777		203		3		200
Multi-family	31		398		—		366		93		—		93
1-4 family	666		666		155		842		49		34		15
Commercial and industrial	8,043		8,254		131		1,104		139		114		25
Direct financing leases, net	—		—		—		6		—		—		—
Consumer and other:
Home equity and second mortgages	580		580		62		658		42		3		39
Other	795		1,461		—		942		100		—		100
Grand total	$	16,226	$	20,181	$	402	$	12,084	$	887	$	221	$	666


(1)	Average recorded investment is calculated primarily using daily average balances.

The difference between the loans and leases recorded investment and the unpaid principal balance of $3.8 million and $4.0 million as of March 31, 2014 and December 31, 2013 represents partial charge-offs resulting from confirmed losses due to the value of the collateral securing the loans and leases being below the carrying values of the loans and leases. Impaired loans and leases also included $586,000 and $371,000 of loans as of March 31, 2014 and December 31, 2013, that were performing troubled debt restructurings, and thus, while not on non-accrual, were reported as impaired, due to the concession in terms. When a loan is placed on non-accrual, interest accrual is discontinued and previously accrued but uncollected interest is deducted from interest income. Cash payments collected on non-accrual loans are first applied to principal. Foregone interest represents the interest that was contractually due on the note but not received or recorded. To the extent the amount of principal on a non-accrual note is fully collected and additional cash is received, the Corporation will recognize interest income.

To determine the level and composition of the allowance for loan and lease losses, the Corporation breaks out the portfolio by segments and risk ratings. First, the Corporation evaluates loans and leases for potential impairment classification. The Corporation analyzes each loan and lease determined to be impaired on an individual basis to determine a specific reserve based upon the estimated value of the underlying collateral for collateral-dependent loans, or alternatively, the present value of expected cash flows. The Corporation applies historical trends from established risk factors to each category of loans and leases that has not been individually evaluated for the purpose of establishing the general portion of the allowance.

A summary of the activity in the allowance for loan and lease losses by portfolio segment is as follows:



	As of and for the Three Months Ended March 31, 2014
	Commercial real estate			Commercial and industrial			Consumer and other			Direct financing leases, net			Total
	(Dollars in Thousands)
Allowance for credit losses:
Beginning balance	$	9,055		$	4,235		$	273		$	338		$	13,901
Charge-offs	—			—			—			—			—
Recoveries	15			—			5			—			20
Provision	(98		)	284			(2		)	(4		)	180
Ending balance	$	8,972		$	4,519		$	276		$	334		$	14,101
Ending balance: individually evaluated for impairment	$	208		$	239		$	60		$	—		$	507
Ending balance: collectively evaluated for impairment	$	8,764		$	4,280		$	216		$	334		$	13,594
Ending balance: loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—
Loans and lease receivables:
Ending balance, gross	$	638,701		$	303,630		$	17,526		$	26,364		$	986,221
Ending balance: individually evaluated for impairment	$	5,291		$	6,657		$	1,344		$	—		$	13,292
Ending balance: collectively evaluated for impairment	$	632,006		$	296,973		$	16,182		$	26,364		$	971,525
Ending balance: loans acquired with deteriorated credit quality	$	1,404		$	—		$	—		$	—		$	1,404
Allowance as % of gross loans	1.40		%	1.49		%	1.57		%	1.27		%	1.43		%



	As of and for the Year Ended March 31, 2013
	Commercial real estate			Commercial and industrial			Consumer and other			Direct financing leases, net			Total
	(Dollars in Thousands)
Allowance for credit losses:
Beginning balance	$	10,693		$	4,129		$	371		$	207		$	15,400
Charge-offs	(7		)	—			(4		)	—			(11		)
Recoveries	32			—			1			5			38
Provision	169			(61		)	(5		)	(23		)	80
Ending balance	$	10,887		$	4,068		$	363		$	189		$	15,507
Ending balance: individually evaluated for impairment	$	1,325		$	135		$	73		$	—		$	1,533
Ending balance: collectively evaluated for impairment	$	9,562		$	3,933		$	290		$	189		$	13,974
Ending balance: loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—
Loans and lease receivables:
Ending balance, gross	$	631,064		$	255,169		$	16,677		$	14,526		$	917,436
Ending balance: individually evaluated for impairment	$	10,083		$	1,126		$	1,710		$	—		$	12,919
Ending balance: collectively evaluated for impairment	$	620,981		$	254,043		$	14,967		$	14,526		$	904,517
Ending balance: loans acquired with deteriorated credit quality	$	—		$	—		$	—		$	—		$	—
Allowance as % of gross loans	1.73		%	1.59		%	2.18		%	1.30		%	1.69		%