Loans

The following table shows the composition of the Company's loan portfolio as of June 30, 2013 and 2012 and at December 31, 2012:



	June 30, 2013				December 31, 2012				June 30, 2012
Commercial
Real estate	$	251,799,000	29.1	%	$	251,335,000	28.9	%	$	253,193,000	28.7	%
Construction	18,641,000		2.2	%	22,417,000		2.6	%	33,072,000		3.8	%
Other	91,393,000		10.6	%	81,183,000		9.3	%	87,833,000		10.0	%
Municipal	14,885,000		1.7	%	14,704,000		1.7	%	16,089,000		1.8	%
Residential
Term	374,522,000		43.2	%	379,447,000		43.7	%	368,876,000		41.8	%
Construction	4,759,000		0.5	%	6,459,000		0.7	%	6,449,000		0.7	%
Home equity line of credit	95,013,000		11.0	%	99,082,000		11.4	%	100,689,000		11.4	%
Consumer	15,059,000		1.7	%	14,657,000		1.7	%	15,613,000		1.8	%
Total	$	866,071,000	100.0	%	$	869,284,000	100.0	%	$	881,814,000	100.0	%

Loan balances include net deferred loan costs of $2,001,000 as of June 30, 2013, $1,783,000 as of December 31, 2012, and $1,664,000 as of June 30, 2012. Pursuant to collateral agreements, qualifying first mortgage loans, which totaled $254,417,000 at June 30, 2013, $256,378,000 at December 31, 2012, and $243,196,000 at June 30, 2012, were used to collateralize borrowings from the Federal Home Loan Bank of Boston. In addition, commercial, construction and home equity loans totaling $221,953,000 at June 30, 2013, $220,520,000 at December 31, 2012, and $232,598,000 at June 30, 2012, were used to collateralize a standby line of credit at the Federal Reserve Bank of Boston that is currently unused.

For all loan classes, loans over 30 days past due are considered delinquent. Information on the past-due status of loans by class of financing receivable as of June 30, 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	$	717,000	$	—	$	2,347,000	$	3,064,000	$	248,735,000	$	251,799,000	$	—
Construction	—		—		456,000		456,000		18,185,000		18,641,000		—
Other	244,000		3,482,000		2,547,000		6,273,000		85,120,000		91,393,000		503,000
Municipal	—		—		—		—		14,885,000		14,885,000		—
Residential
Term	636,000		3,955,000		7,933,000		12,524,000		361,998,000		374,522,000		395,000
Construction	82,000		—		—		82,000		4,677,000		4,759,000		—
Home equity line of credit	652,000		62,000		816,000		1,530,000		93,483,000		95,013,000		—
Consumer	104,000		63,000		121,000		288,000		14,771,000		15,059,000		121,000
Total	$	2,435,000	$	7,562,000	$	14,220,000	$	24,217,000	$	841,854,000	$	866,071,000	$	1,019,000

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 June 30, 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	$	—	$	13,000	$	1,858,000	$	1,871,000	$	251,322,000	$	253,193,000	$	—
Construction	119,000		—		34,000		153,000		32,919,000		33,072,000		—
Other	177,000		266,000		1,398,000		1,841,000		85,992,000		87,833,000		—
Municipal	1,560,000		—		—		1,560,000		14,529,000		16,089,000		—
Residential
Term	2,191,000		1,000,000		7,878,000		11,069,000		357,807,000		368,876,000		—
Construction	—		—		1,336,000		1,336,000		5,113,000		6,449,000		—
Home equity line of credit	530,000		—		1,311,000		1,841,000		98,848,000		100,689,000		—
Consumer	140,000		49,000		180,000		369,000		15,244,000		15,613,000		164,000
Total	$	4,717,000	1,328,000		$	13,995,000	$	20,040,000	$	861,774,000	$	881,814,000	$	164,000

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 are included in 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 June 30, 2013 and 2012 and at December 31, 2012 is presented in the following table:



	June 30, 2013		December 31, 2012		June 30, 2012
Commercial
Real estate	$	4,424,000	$	4,603,000	$	5,545,000
Construction	519,000		101,000		521,000
Other	2,856,000		3,459,000		2,361,000
Municipal	—		—		—
Residential
Term	10,640,000		10,333,000		10,723,000
Construction	—		—		1,336,000
Home equity line of credit	1,046,000		654,000		1,456,000
Consumer	—		—		16,000
Total	$	19,485,000	$	19,150,000	$	21,958,000

Impaired loans include troubled debt restructured 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 June 30, 2013, is presented in the following table:



							For the six months ended June 30, 2013				For the quarter ended June 30, 2013
	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	$	11,452,000	$	11,851,000	$	—	$	10,621,000	$	200,000	$	11,083,000	$	99,000
Construction	517,000		1,065,000		—		210,000		28,000		376,000		27,000
Other	4,017,000		4,325,000		—		3,726,000		59,000		3,759,000		32,000
Municipal	—		—		—		—		—		—		—
Residential
Term	15,399,000		17,441,000		—		13,862,000		248,000		14,636,000		150,000
Construction	—		—		—		—		—		—		—
Home equity line of credit	1,655,000		1,892,000		—		1,579,000		15,000		1,665,000		7,000
Consumer	—		—		—		—		—		—		—
	$	33,040,000	$	36,574,000	$	—	$	29,998,000	$	550,000	$	31,519,000	$	315,000
With an Allowance Recorded
Commercial
Real estate	$	5,880,000	$	6,619,000	$	1,510,000	$	6,688,000	$	110,000	$	6,577,000	$	48,000
Construction	1,302,000		1,302,000		266,000		2,297,000		19,000		1,626,000		(7,000		)
Other	1,773,000		1,893,000		1,005,000		2,008,000		11,000		1,920,000		2,000
Municipal	—		—		—		—		—		—		—
Residential
Term	4,296,000		4,520,000		218,000		5,961,000		93,000		5,117,000		29,000
Construction	—		—		—		—		—		—		—
Home equity line of credit	40,000		40,000		7,000		94,000		1,000		15,000		1,000
Consumer	—		—		—		—		—		—		—
	$	13,291,000	$	14,374,000	$	3,006,000	$	17,048,000	$	234,000	$	15,255,000	$	73,000
Total
Commercial
Real estate	$	17,332,000	$	18,470,000	$	1,510,000	$	17,309,000	$	310,000	$	17,660,000	$	147,000
Construction	1,819,000		2,367,000		266,000		2,507,000		47,000		2,002,000		20,000
Other	5,790,000		6,218,000		1,005,000		5,735,000		70,000		5,679,000		34,000
Municipal	—		—		—		—		—		—		—
Residential
Term	19,695,000		21,961,000		218,000		19,822,000		341,000		19,753,000		179,000
Construction	—		—		—		—		—		—		—
Home equity line of credit	1,695,000		1,932,000		7,000		1,673,000		16,000		1,680,000		8,000
Consumer	—		—		—		—		—		—		—
	$	46,331,000	$	50,948,000	$	3,006,000	$	47,046,000	$	784,000	$	46,774,000	$	388,000

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 June 30, 2012, is presented in the following table:



							For the six months ended June 30, 2012				For the quarter ended June 30, 2012
	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	$	10,313,000	$	10,313,000	$	—	$	9,729,000	$	111,000	$	11,013,000	$	71,000
Construction	1,464,000		1,464,000		—		2,189,000		26,000		1,395,000		13,000
Other	2,249,000		2,249,000		—		2,710,000		16,000		2,439,000		21,000
Municipal	—		—		—		—		—		—		—
Residential
Term	8,695,000		8,695,000		—		9,662,000		71,000		9,322,000		41,000
Construction	1,002,000		1,002,000		—		880,000		—		1,042,000		—
Home equity line of credit	740,000		740,000		—		758,000		—		740,000		—
Consumer	—		—		—		6,000		—		—		—
	$	24,463,000	$	24,463,000	$	—	$	25,934,000	$	224,000	$	25,951,000	$	146,000
With an Allowance Recorded
Commercial
Real estate	$	3,482,000	$	3,482,000	$	1,133,000	$	4,026,000	$	16,000	$	3,775,000	$	6,000
Construction	2,155,000		2,155,000		787,000		1,376,000		37,000		2,155,000		37,000
Other	1,851,000		1,851,000		932,000		2,013,000		18,000		1,802,000		13,000
Municipal	—		—		—		—		—		—		—
Residential
Term	10,357,000		10,357,000		966,000		8,487,000		127,000		9,525,000		68,000
Construction	334,000		334,000		48,000		466,000		—		334,000		—
Home equity line of credit	716,000		716,000		300,000		566,000		—		613,000		—
Consumer	16,000		16,000		11,000		15,000		—		15,000		—
	$	18,911,000	$	18,911,000	$	4,177,000	$	16,949,000	$	198,000	$	18,219,000	$	124,000
Total
Commercial
Real estate	$	13,795,000	$	13,795,000	$	1,133,000	$	13,755,000	$	127,000	$	14,788,000	$	77,000
Construction	3,619,000		3,619,000		787,000		3,565,000		63,000		3,550,000		50,000
Other	4,100,000		4,100,000		932,000		4,723,000		34,000		4,241,000		34,000
Municipal	—		—		—		—		—		—		—
Residential
Term	19,052,000		19,052,000		966,000		18,149,000		198,000		18,847,000		109,000
Construction	1,336,000		1,336,000		48,000		1,346,000		—		1,376,000		—
Home equity line of credit	1,456,000		1,456,000		300,000		1,324,000		—		1,353,000		—
Consumer	16,000		16,000		11,000		21,000		—		15,000		—
	$	43,374,000	$	43,374,000	$	4,177,000	$	42,883,000	$	422,000	$	44,170,000	$	270,000