Loans

The following table shows the composition of the Company's loan portfolio as of March 31, 2013 and 2012 and at December 31, 2012:



	March 31, 2013				December 31, 2012				March 31, 2012
Commercial
Real estate	$	250,180,000	29.0	%	$	251,335,000	28.9	%	$	254,708,000	29.3	%
Construction	17,090,000		2.0	%	22,417,000		2.6	%	30,828,000		3.5	%
Other	89,874,000		10.4	%	81,183,000		9.3	%	85,467,000		9.8	%
Municipal	15,017,000		1.7	%	14,704,000		1.7	%	15,961,000		1.8	%
Residential
Term	376,029,000		43.5	%	379,447,000		43.7	%	358,394,000		41.2	%
Construction	4,222,000		0.5	%	6,459,000		0.7	%	6,451,000		0.7	%
Home equity line of credit	96,536,000		11.2	%	99,082,000		11.4	%	103,372,000		11.9	%
Consumer	14,529,000		1.7	%	14,657,000		1.7	%	15,711,000		1.8	%
Total	$	863,477,000	100.0	%	$	869,284,000	100.0	%	$	870,892,000	100.0	%

Loan balances include net deferred loan costs of $1,901,000 as of March 31, 2013, $1,783,000 as of December 31, 2012, and $1,520,000 as of March 31, 2012. Pursuant to collateral agreements, qualifying first mortgage loans, which totaled $253,030,956 at March 31, 2013, $256,378,000 at December 31, 2012, and $229,448,000 at March 31, 2012, were used to collateralize borrowings from the Federal Home Loan Bank of Boston. In addition, commercial, construction and home equity loans totaling $233,980,000 at March 31, 2013, $220,520,000 at December 31, 2012, and $227,022,000 at March 31, 2012, 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 $20,924,000 at March 31, 2013, $19,150,000 at December 31, 2012 and $24,438,000 at March 31, 2012. Loans past due 90 days or greater which are accruing interest totaled $389,000 at March 31, 2013, $1,051,000 at December 31, 2012 and $1,955,000 at March 31, 2012. The Company continues to accrue interest on these loans because it believes collection of principal and interest is reasonably assured.

For all loan classes, loans over 30 days past due are considered deliquent. Information on the past-due status of loans by class of financing receivable as of March 31, 2013, is presented in the following table:



	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		All Past Due		Current		Total		90+ Days & Accruing
Commercial
Real estate	$	709,000	$	1,360,000	$	2,295,000	$	4,364,000	$	245,816,000	$	250,180,000	$	—
Construction	22,000		—		30,000		52,000		17,038,000		17,090,000		—
Other	1,403,000		2,828,000		2,464,000		6,695,000		83,179,000		89,874,000		—
Municipal	—		—		—		—		15,017,000		15,017,000		—
Residential
Term	1,496,000		3,032,000		8,844,000		13,372,000		362,657,000		376,029,000		233,000
Construction	189,000		—		—		189,000		4,033,000		4,222,000		—
Home equity line of credit	916,000		248,000		771,000		1,935,000		94,601,000		96,536,000		—
Consumer	100,000		67,000		156,000		323,000		14,206,000		14,529,000		156,000
Total	$	4,835,000	$	7,535,000	$	14,560,000	$	26,930,000	$	836,547,000	$	863,477,000	$	389,000

Information on the past-due status of loans by class of financing receivable as of December 31, 2012, is presented in the following table:



	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		All Past Due		Current		Total		90+ Days & Accruing
Commercial
Real estate	$	2,172,000	$	346,000	$	2,380,000	$	4,898,000	$	246,437,000	$	251,335,000	$	102,000
Construction	—		29,000		35,000		64,000		22,353,000		22,417,000		—
Other	658,000		218,000		2,306,000		3,182,000		78,001,000		81,183,000		2,000
Municipal	136,000		—		—		136,000		14,568,000		14,704,000		—
Residential
Term	2,404,000		1,082,000		9,298,000		12,784,000		366,663,000		379,447,000		363,000
Construction	188,000		—		—		188,000		6,271,000		6,459,000		—
Home equity line of credit	430,000		133,000		1,136,000		1,699,000		97,383,000		99,082,000		539,000
Consumer	101,000		70,000		45,000		216,000		14,441,000		14,657,000		45,000
Total	$	6,089,000	$	1,878,000	$	15,200,000	$	23,167,000	$	846,117,000	$	869,284,000	$	1,051,000

Information on the past-due status of loans by class of financing receivable as of March 31, 2012, is presented in the following table:



	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		All Past Due		Current		Total		90+ Days & Accruing
Commercial
Real estate	$	547,000	$	76,000	$	4,526,000	$	5,149,000	$	249,559,000	$	254,708,000	$	1,025,000
Construction	1,951,000		—		35,000		1,986,000		28,842,000		30,828,000		—
Other	956,000		622,000		1,869,000		3,447,000		82,020,000		85,467,000		563,000
Municipal	—		—		—		—		15,961,000		15,961,000		—
Residential
Term	3,324,000		—		9,299,000		12,623,000		345,771,000		358,394,000		359,000
Construction	492,000		—		1,454,000		1,946,000		4,505,000		6,451,000		—
Home equity line of credit	86,000		—		1,156,000		1,242,000		102,130,000		103,372,000		—
Consumer	154,000		19,000		8,000		181,000		15,530,000		15,711,000		8,000
Total	$	7,510,000	$	717,000	$	18,347,000	$	26,574,000	$	844,318,000	$	870,892,000	$	1,955,000

For all classes, loans are placed on non-accrual status when, based on current information and events, it is probable that the Company 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.

Cash payments received on non-accrual loans, which includes impaired loans, are applied to reduce the loan's principal balance until the remaining principal balance is deemed collectible, after which interest is recognized when collected. As a general rule, a loan may be restored to accrual status when payments are current for a substantial period of time, generally six months, and repayment of the remaining contractual amounts is expected or when it otherwise becomes well secured and in the process of collection. Information on nonaccrual loans as of March 31, 2013 and 2012 and at December 31, 2012 is presented in the following table:



	March 31, 2013		December 31, 2012		March 31, 2012
Commercial
Real estate	$	4,599,000	$	4,603,000	$	7,160,000
Construction	1,045,000		101,000		946,000
Other	3,152,000		3,459,000		2,634,000
Municipal	—		—		—
Residential
Term	11,098,000		10,333,000		10,893,000
Construction	—		—		1,454,000
Home equity line of credit	1,030,000		654,000		1,336,000
Consumer	—		—		15,000
Total	$	20,924,000	$	19,150,000	$	24,438,000

Impaired loans include restructured loans and loans placed on non-accrual. 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 class of financing receivable as of and for the period ended March 31, 2013, 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	$	11,010,000	$	11,468,000	$	—	$	10,154,000	$	101,000
Construction	95,000		115,000		—		43,000		1,000
Other	3,580,000		4,315,000		—		3,695,000		27,000
Municipal	—		—		—		—		—
Residential
Term	13,611,000		15,476,000		—		13,078,000		98,000
Construction	—		—		—		—		—
Home equity line of credit	1,683,000		1,912,000		—		1,492,000		8,000
Consumer	—		—		—		—		—
	$	29,979,000	$	33,286,000	$	—	$	28,462,000	$	235,000
With an Allowance Recorded
Commercial
Real estate	$	6,524,000	$	7,217,000	$	1,473,000	$	6,800,000	$	62,000
Construction	2,252,000		2,252,000		760,000		2,975,000		26,000
Other	1,970,000		1,991,000		535,000		2,097,000		9,000
Municipal	—		—		—		—		—
Residential
Term	6,651,000		6,786,000		337,000		6,814,000		64,000
Construction	—		—		—		—		—
Home equity line of credit	—		—		—		174,000		—
Consumer	—		—		—		—		—
	$	17,397,000	$	18,246,000	$	3,105,000	$	18,860,000	$	161,000
Total
Commercial
Real estate	$	17,534,000	$	18,685,000	$	1,473,000	$	16,954,000	$	163,000
Construction	2,347,000		2,367,000		760,000		3,018,000		27,000
Other	5,550,000		6,306,000		535,000		5,792,000		36,000
Municipal	—		—		—		—		—
Residential
Term	20,262,000		22,262,000		337,000		19,892,000		162,000
Construction	—		—		—		—		—
Home equity line of credit	1,683,000		1,912,000		—		1,666,000		8,000
Consumer	—		—		—		—		—
	$	47,376,000	$	51,532,000	$	3,105,000	$	47,322,000	$	396,000

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

A breakdown of impaired loans by class of financing receivable as of and for the year ended December 31, 2012, 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	$	9,386,000	$	9,963,000	$	—	$	10,102,000	$	199,000
Construction	101,000		115,000		—		2,533,000		—
Other	4,737,000		5,345,000		—		2,877,000		53,000
Municipal	—		—		—		—		—
Residential
Term	12,747,000		14,440,000		—		9,801,000		189,000
Construction	—		—		—		560,000		—
Home equity line of credit	1,311,000		1,440,000		—		961,000		27,000
Consumer	—		—		—		3,000		—
	$	28,282,000	$	31,303,000	$	—	$	26,837,000	$	468,000
With an Allowance Recorded
Commercial
Real estate	$	6,388,000	$	7,018,000	$	1,523,000	$	4,614,000	$	211,000
Construction	3,253,000		3,253,000		969,000		1,816,000		85,000
Other	1,124,000		1,126,000		652,000		1,974,000		38,000
Municipal	—		—		—		—		—
Residential
Term	6,697,000		6,842,000		395,000		9,066,000		237,000
Construction	—		—		—		261,000		—
Home equity line of credit	—		—		—		442,000		—
Consumer	—		—		—		9,000		—
	$	17,462,000	$	18,239,000	$	3,539,000	$	18,182,000	$	571,000
Total
Commercial
Real estate	$	15,774,000	$	16,981,000	$	1,523,000	$	14,716,000	$	410,000
Construction	3,354,000		3,368,000		969,000		4,349,000		85,000
Other	5,861,000		6,471,000		652,000		4,851,000		91,000
Municipal	—		—		—		—		—
Residential
Term	19,444,000		21,282,000		395,000		18,867,000		426,000
Construction	—		—		—		821,000		—
Home equity line of credit	1,311,000		1,440,000		—		1,403,000		27,000
Consumer	—		—		—		12,000		—
	$	45,744,000	$	49,542,000	$	3,539,000	$	45,019,000	$	1,039,000

A breakdown of impaired loans by class of financing receivable as of and for the period ended March 31, 2012, 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	$	10,704,000	$	10,704,000	$	—	$	8,445,000	$	40,000
Construction	1,362,000		1,362,000		—		2,983,000		13,000
Other	2,811,000		2,811,000		—		2,981,000		8,000
Municipal	—		—		—		—		—
Residential
Term	9,930,000		9,930,000		—		10,001,000		30,000
Construction	1,120,000		1,120,000		—		718,000		—
Home equity line of credit	774,000		774,000		—		776,000		—
Consumer	—		—		—		12,000		—
	$	26,701,000	$	26,701,000	$	—	$	25,916,000	$	91,000
With an Allowance Recorded
Commercial
Real estate	$	3,591,000	$	3,591,000	$	944,000	$	4,278,000	$	10,000
Construction	731,000		731,000		117,000		597,000		—
Other	1,075,000		1,075,000		480,000		2,223,000		5,000
Municipal	—		—		—		—		—
Residential
Term	8,124,000		8,124,000		592,000		7,449,000		59,000
Construction	334,000		334,000		49,000		598,000		—
Home equity line of credit	562,000		562,000		156,000		519,000		—
Consumer	15,000		15,000		10,000		15,000		—
	$	14,432,000	$	14,432,000	$	2,348,000	$	15,679,000	$	74,000
Total
Commercial
Real estate	$	14,295,000	$	14,295,000	$	944,000	$	12,723,000	$	50,000
Construction	2,093,000		2,093,000		117,000		3,580,000		13,000
Other	3,886,000		3,886,000		480,000		5,204,000		13,000
Municipal	—		—		—		—		—
Residential
Term	18,054,000		18,054,000		592,000		17,450,000		89,000
Construction	1,454,000		1,454,000		49,000		1,316,000		—
Home equity line of credit	1,336,000		1,336,000		156,000		1,295,000		—
Consumer	15,000		15,000		10,000		27,000		—
	$	41,133,000	$	41,133,000	$	2,348,000	$	41,595,000	$	165,000