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Loans
9 Months Ended
Sep. 30, 2011
Receivables [Abstract] 
Loans
Note 3 – Loans

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

   
September 30, 2011
  
December 31, 2010
  
September 30, 2010
 
Commercial
                  
   Real estate
 $257,910,000   29.7% $245,540,000   27.7% $251,767,000   27.4%
   Construction
  30,345,000   3.5%  41,869,000   4.7%  40,304,000   4.4%
   Other
  96,045,000   11.1%  101,462,000   11.4%  106,993,000   11.6%
Municipal
  19,853,000   2.3%  21,833,000   2.5%  25,737,000   2.8%
Residential
                        
   Term
  329,730,000   38.0%  337,927,000   38.1%  352,872,000   38.4%
   Construction
  12,061,000   1.4%  15,512,000   1.7%  18,380,000   2.0%
Home equity line of credit
  105,891,000   12.1%  105,297,000   11.9%  104,434,000   11.4%
Consumer
  16,738,000   1.9%  18,156,000   2.0%  18,051,000   2.0%
Total loans
 $868,573,000   100.0% $887,596,000   100.0% $918,538,000   100.0%

Loan balances include net deferred loan costs of $1.3 million as of September 30, 2011 and $1.3 million as of December 31, 2010. Pursuant to collateral agreements, qualifying first mortgage loans, which were valued at $190.9 million at September 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 $310.2 million at September 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 $21.0 million at September 30, 2011, $21.2 million at December 31, 2010 and $21.7 million at September 30, 2010. Loans past due 90 days or greater which are accruing interest totaled $1,291,000 at September 30, 2011, $1,116,000 at December 31, 2010 and $729,000 at September 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 by class of financing receivable as of September 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
 $1,678,000  $3,437,000  $5,115,000  $252,795,000  $257,910,000  $- 
   Construction
  -   35,000   35,000   30,310,000   30,345,000   - 
   Other
  975,000   802,000   1,777,000   94,268,000   96,045,000   71,000 
Municipal
  -   -   -   19,853,000   19,853,000   - 
Residential
                        
   Term
  2,228,000   7,945,000   10,173,000   319,557,000   329,730,000   1,213,000 
   Construction
  -   396,000   396,000   11,665,000   12,061,000   - 
Home equity line of credit
  245,000   1,234,000   1,479,000   104,412,000   105,891,000   - 
Consumer
  140,000   7,000   147,000   16,591,000   16,738,000   7,000 
Total
 $5,266,000  $13,856,000  $19,122,000  $849,451,000  $868,573,000  $1,291,000 

Information on the past-due status of loans by class of financing receivable 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 

For all classes, 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 September 30, 2011 and 2010 and at December 31, 2010 is presented in the following table:

   
September 30, 2011
  
December 31, 2010
  
September 30, 2010
 
Commercial
         
   Real estate
 $6,056,000  $5,946,000  $6,946,000 
   Construction
  792,000   937,000   438,000 
   Other
  1,327,000   1,753,000   2,424,000 
Municipal
  -   -   - 
Residential
            
   Term
  11,073,000   8,347,000   9,772,000 
   Construction
  396,000   3,567,000   1,738,000 
Home Equity Line of Credit
  1,234,000   519,000   280,000 
Consumer
  102,000   106,000   107,000 
Total
 $20,980,000  $21,175,000  $21,705,000 

Information regarding impaired loans is as follows:

   
September 30, 2011
  
December 31, 2010
  
September 30, 2010
 
Balance of impaired loans
 $28,270,000  $25,283,000  $25,375,000 
Less portion for which no allowance for loan losses is allocated
  (18,437,000)  (15,773,000)  (16,174,000)
Portion of impaired loan balance for which an allowance for loan losses is allocated
 $9,833,000  $9,510,000  $9,201,000 
Portion of allowance for loan losses allocated to the impaired loan balance
 $1,627,000  $1,256,000  $1,073,000 

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 nine-month periods ended September 30, 2011, is presented in the following table:

            
For the nine months ended
 September 30, 2011
  
For the quarter ended
 September 30, 2011
 
   
Recorded Investment
  
Unpaid Principal Balance
  
Related Allowance
  
Average Recorded Investment
  
Recognized Interest Income
  
Average Recorded Investment
  
Recognized Interest Income
 
With No Related Allowance
                   
 
Commercial
 
                     
 
  Real estate
 
 $5,008,000  $5,008,000  $-  $5,268,000  $-  $5,384,000  $- 
 
  Construction
 
  792,000   792,000   -   670,000   -   775,000   - 
 
  Other
 
  1,295,000   1,295,000   -   1,150,000   -   1,215,000   - 
Municipal
  -   -   -   -   -   -   - 
Residential
                            
 
  Term
 
  10,104,000   10,104,000   -   9,482,000   -   10,650,000   - 
 
  Construction
 
  314,000   314,000   -   1,203,000   -   328,000   - 
Heloc
  886,000   886,000   -   618,000   -   1,018,000   - 
Consumer
  38,000   38,000   -   40,000   -   38,000   - 
   $18,437,000  $18,437,000  $-  $18,431,000  $-  $19,408,000  $- 
With an Allowance Recorded
                         
 
Commercial
 
                            
 
  Real estate
 
 $2,731,000  $2,731,000  $636,000  $1,858,000  $43,000  $1,532,000  $15,000 
 
  Construction
 
  -   -   -   151,000   -   -   - 
 
  Other
 
  645,000   645,000   352,000   651,000   16,000   648,000   6,000 
Municipal
  -   -   -   -   -   -   - 
Residential
                          - 
 
  Term
 
  5,963,000   5,963,000   398,000   5,370,000   187,000   5,602,000   63,000 
 
  Construction
 
  82,000   82,000   82,000   155,000   -   82,000   - 
Heloc
  348,000   348,000   95,000   247,000   -   230,000   - 
Consumer
  64,000   64,000   64,000   67,000   -   64,000   - 
   $9,833,000  $9,833,000  $1,627,000  $8,499,000  $246,000  $8,158,000  $84,000 
Total
                            
Commercial
                            
 
  Real estate
 
 $7,739,000  $7,739,000  $636,000  $7,126,000  $43,000  $6,917,000  $15,000 
  Construction
  792,000   792,000   -   821,000   -   775,000   - 
 
  Other
 
  1,940,000   1,940,000   352,000   1,801,000   16,000   1,863,000   6,000 
Municipal
  -   -   -   -   -   -   - 
Residential
                          - 
 
  Term
 
  16,067,000   16,067,000   398,000   14,852,000   187,000   16,252,000   63,000 
 
  Construction
 
  396,000   396,000   82,000   1,359,000   -   410,000   - 
Heloc
  1,234,000   1,234,000   95,000   865,000   -   1,248,000   - 
Consumer
  102,000   102,000   64,000   107,000   -   102,000   - 
   $28,270,000  $28,270,000  $1,627,000  $26,931,000  $246,000  $27,567,000  $84,000 

Virtually all interest income on impaired loans for all categories of financing receivables was recognized on a cash basis as received.



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
  
Recognized Interest
Income
 
With No Related Allowance
 
Commercial
               
   Real estate
 $3,531,000  $3,531,000  $-  $3,967,000  $- 
   Construction
  257,000   257,000   -   271,000   - 
   Other
  1,256,000   1,256,000   -   1,484,000   - 
Municipal
  -   -   -   -   - 
Residential
                    
   Term
  6,804,000   6,804,000   -   7,814,000   - 
   Construction
  3,567,000   3,567,000   -   2,573,000   - 
Home Equity Line of Credit
  319,000   319,000   -   196,000   - 
Consumer
  39,000   39,000   -   20,000   - 
   $15,773,000  $15,773,000  $-  $16,325,000  $- 
With an Allowance Recorded
 
Commercial
                    
   Real estate
 $2,415,000  $2,415,000  $192,000  $2,925,000  $13,000 
   Construction
  680,000   680,000   152,000   305,000   - 
   Other
  497,000   497,000   291,000   912,000   - 
Municipal
  -   -   -   -     
Residential
                  - 
   Term
  5,651,000   5,651,000   432,000   4,869,000   127,000 
   Construction
  -   -   -   281,000   - 
Home Equity Line of Credit
  200,000   200,000   122,000   87,000   3,000 
Consumer
  67,000   67,000   67,000   132,000   - 
   $9,510,000  $9,510,000  $1,256,000  $9,511,000  $143,000 
Total
                    
Commercial
                    
   Real estate
 $5,946,000  $5,946,000  $192,000  $6,892,000  $13,000 
   Construction
  937,000   937,000   152,000   576,000   - 
   Other
  1,753,000   1,753,000   291,000   2,396,000   - 
Municipal
  -   -   -   -     
Residential
                  - 
   Term
  12,455,000   12,455,000   432,000   12,683,000   127,000 
   Construction
  3,567,000   3,567,000   -   2,854,000   - 
Home Equity Line of Credit
  519,000   519,000   122,000   283,000   3,000 
Consumer
  106,000   106,000   67,000   152,000   - 
   $25,283,000  $25,283,000  $1,256,000  $25,836,000  $143,000