| Allowance For Credit Losses |
(4) ALLOWANCE FOR CREDIT LOSSES
The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status as of December 31, 2013 and December 31, 2012:
Age Analysis of Past Due Loans Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivable
|
|
|
|
30-59
|
|
60-89
|
|
Greater
|
|
|
|
|
|
Total
|
|
> 90
|
|
|
|
Days Past
|
|
Days Past
|
|
than
|
|
Total
|
|
|
|
Loans
|
|
Days and
|
|
(Dollars in thousands)
|
|
Due
|
|
Due
|
|
90 Days
|
|
Past Due
|
|
Current
|
|
Receivables
|
|
Accruing
|
|
Residential mortgage
|
$
|
507
|
$
|
865
|
$
|
1,757
|
$
|
3,129
|
$
|
21,548
|
$
|
24,677
|
$
|
-
|
|
Commercial mortgage
|
|
358
|
|
192
|
|
74
|
|
624
|
|
233,975
|
|
234,599
|
|
-
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
50
|
|
-
|
|
-
|
|
50
|
|
89,229
|
|
89,279
|
|
-
|
|
Commercial construction
|
|
-
|
|
-
|
|
2,554
|
|
2,554
|
|
16,563
|
|
19,117
|
|
-
|
|
Lease financing
|
|
-
|
|
-
|
|
2
|
|
2
|
|
-
|
|
2
|
|
2
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
-
|
|
50
|
|
376
|
|
426
|
|
40,992
|
|
41,418
|
|
67
|
|
Other
|
|
80
|
|
-
|
|
77
|
|
157
|
|
6,105
|
|
6,262
|
|
72
|
|
Total
|
$
|
995
|
$
|
1,107
|
$
|
4,840
|
$
|
6,942
|
$
|
408,412
|
$
|
415,354
|
$
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivable
|
|
|
30-59
|
60-89
|
Greater
|
|
|
|
Total
|
> 90
|
|
|
Days Past
|
Days Past
|
than
|
Total
|
|
|
Loans
|
Days and
|
|
(Dollars in thousands)
|
Due
|
Due
|
90 Days
|
Past Due
|
Current
|
Receivables
|
Accruing
|
|
Residential mortgage
|
$
|
692
|
$
|
319
|
$
|
2,256
|
$
|
3,267
|
$
|
22,568
|
$
|
25,835
|
$
|
60
|
|
Commercial mortgage
|
|
68
|
|
-
|
|
3,514
|
|
3,582
|
|
230,620
|
|
234,202
|
|
710
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
-
|
|
-
|
|
-
|
|
-
|
|
81,888
|
|
81,888
|
|
-
|
|
Commercial construction
|
|
-
|
|
-
|
|
2,031
|
|
2,031
|
|
10,216
|
|
12,247
|
|
-
|
|
Lease financing
|
|
-
|
|
-
|
|
28
|
|
28
|
|
39
|
|
67
|
|
-
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
162
|
|
-
|
|
152
|
|
314
|
|
35,008
|
|
35,322
|
|
92
|
|
Other
|
|
95
|
|
-
|
|
54
|
|
149
|
|
6,788
|
|
6,937
|
|
7
|
|
Total
|
$
|
1,017
|
$
|
319
|
$
|
8,035
|
$
|
9,371
|
$
|
387,127
|
$
|
396,498
|
$
|
869
|
The following table sets forth those assets that are: (i) placed on non-accrual status, (ii) contractually delinquent by 90 days or more and still accruing, (iii) troubled debt restructurings other than those included in items (i) and (ii), and (iv) OREO as a result of foreclosure or voluntary transfer to DNB as well as other repossessed property.
Non-Performing Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
(Dollars in thousands)
|
2013
|
2012
|
|
Non-accrual loans:
|
|
|
|
|
|
Residential mortgage
|
$
|
2,250
|
$
|
2,196
|
|
Commercial mortgage
|
|
266
|
|
2,804
|
|
Commercial:
|
|
|
|
|
|
Commercial term
|
|
-
|
|
-
|
|
Commercial construction
|
|
2,554
|
|
4,326
|
|
Lease financing
|
|
-
|
|
28
|
|
Consumer:
|
|
|
|
|
|
Home equity
|
|
434
|
|
64
|
|
Other
|
|
82
|
|
147
|
|
Total non-accrual loans
|
|
5,586
|
|
9,565
|
|
Loans 90 days past due and still accruing
|
|
141
|
|
869
|
|
Total non-performing loans
|
|
5,727
|
|
10,434
|
|
Other real estate owned & other repossessed property
|
|
1,096
|
|
1,237
|
|
Total non-performing assets
|
$
|
6,823
|
$
|
11,671
|
The following tables summarize information in regards to impaired loans by loan portfolio class as of December 31, 2013 and December 31, 2012 and for the years then ended.
Impaired Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
|
|
Unpaid
|
|
|
Average
|
Interest
|
|
|
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
|
(Dollars in thousands)
|
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
$
|
2,250
|
$
|
2,848
|
$
|
-
|
$
|
2,393
|
$
|
-
|
|
Commercial mortgage
|
|
2,502
|
|
2,574
|
|
-
|
|
2,018
|
|
-
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
-
|
|
3
|
|
-
|
|
-
|
|
-
|
|
Commercial construction
|
|
499
|
|
3,355
|
|
-
|
|
1,047
|
|
-
|
|
Lease financing
|
|
-
|
|
-
|
|
-
|
|
11
|
|
-
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
434
|
|
442
|
|
-
|
|
136
|
|
-
|
|
Other
|
|
78
|
|
78
|
|
-
|
|
115
|
|
3
|
|
Total:
|
$
|
5,763
|
$
|
9,300
|
$
|
-
|
$
|
5,720
|
$
|
3
|
|
With allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
64
|
$
|
-
|
|
Commercial mortgage
|
|
36
|
|
36
|
|
14
|
|
1,477
|
|
-
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
-
|
|
-
|
|
-
|
|
40
|
|
-
|
|
Commercial construction
|
|
2,055
|
|
3,386
|
|
361
|
|
3,007
|
|
-
|
|
Lease financing
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
4
|
|
4
|
|
4
|
|
1
|
|
-
|
|
Total:
|
$
|
2,095
|
$
|
3,426
|
$
|
379
|
$
|
4,589
|
$
|
-
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
$
|
2,250
|
$
|
2,848
|
$
|
-
|
$
|
2,457
|
$
|
-
|
|
Commercial mortgage
|
|
2,538
|
|
2,610
|
|
14
|
|
3,495
|
|
-
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
-
|
|
3
|
|
-
|
|
40
|
|
-
|
|
Commercial construction
|
|
2,554
|
|
6,741
|
|
361
|
|
4,054
|
|
-
|
|
Lease financing
|
|
-
|
|
-
|
|
-
|
|
11
|
|
-
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
434
|
|
442
|
|
-
|
|
136
|
|
-
|
|
Other
|
|
82
|
|
82
|
|
4
|
|
116
|
|
3
|
|
Total:
|
$
|
7,858
|
$
|
12,726
|
$
|
379
|
$
|
10,309
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
Unpaid
|
|
|
Average
|
Interest
|
|
|
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
|
(Dollars in thousands)
|
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
|
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
$
|
2,386
|
$
|
2,883
|
$
|
-
|
$
|
2,243
|
$
|
-
|
|
Commercial mortgage
|
|
2,807
|
|
2,814
|
|
-
|
|
699
|
|
1
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
-
|
|
3
|
|
-
|
|
111
|
|
12
|
|
Commercial construction
|
|
-
|
|
-
|
|
-
|
|
1,855
|
|
130
|
|
Lease financing
|
|
28
|
|
36
|
|
-
|
|
49
|
|
1
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
64
|
|
72
|
|
-
|
|
85
|
|
2
|
|
Other
|
|
147
|
|
147
|
|
-
|
|
82
|
|
2
|
|
Total:
|
$
|
5,432
|
$
|
5,955
|
$
|
-
|
$
|
5,124
|
$
|
148
|
|
With allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Commercial mortgage
|
|
2,565
|
|
2,569
|
|
151
|
|
985
|
|
158
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Commercial construction
|
|
4,326
|
|
4,864
|
|
864
|
|
2,628
|
|
66
|
|
Lease financing
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Total:
|
$
|
6,891
|
$
|
7,433
|
$
|
1,015
|
$
|
3,613
|
$
|
224
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage
|
$
|
2,386
|
$
|
2,883
|
$
|
-
|
$
|
2,243
|
$
|
-
|
|
Commercial mortgage
|
|
5,372
|
|
5,383
|
|
151
|
|
1,684
|
|
159
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
-
|
|
3
|
|
-
|
|
111
|
|
12
|
|
Commercial construction
|
|
4,326
|
|
4,864
|
|
864
|
|
4,483
|
|
196
|
|
Lease financing
|
|
28
|
|
36
|
|
-
|
|
49
|
|
1
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
64
|
|
72
|
|
-
|
|
85
|
|
2
|
|
Other
|
|
147
|
|
147
|
|
-
|
|
82
|
|
2
|
|
Total:
|
$
|
12,323
|
$
|
13,388
|
$
|
1,015
|
$
|
8,737
|
$
|
372
|
The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within DNB’s internal risk rating system as of December 31, 2013 and December 31, 2012.
Credit Quality Indicators
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
|
|
|
Special
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Pass
|
|
Mention
|
|
Substandard
|
|
Doubtful
|
|
Total
|
|
Residential mortgage
|
$
|
22,142
|
$
|
-
|
$
|
2,535
|
$
|
-
|
$
|
24,677
|
|
Commercial mortgage
|
|
224,868
|
|
5,028
|
|
4,703
|
|
-
|
|
234,599
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
88,657
|
|
419
|
|
203
|
|
-
|
|
89,279
|
|
Commercial construction
|
|
16,450
|
|
-
|
|
1,967
|
|
700
|
|
19,117
|
|
Lease financing
|
|
2
|
|
-
|
|
-
|
|
-
|
|
2
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
40,940
|
|
-
|
|
478
|
|
-
|
|
41,418
|
|
Other
|
|
6,180
|
|
-
|
|
82
|
|
-
|
|
6,262
|
|
Total
|
$
|
399,239
|
$
|
5,447
|
$
|
9,968
|
$
|
700
|
$
|
415,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
|
|
Special
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Pass
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|
Residential mortgage
|
$
|
23,346
|
$
|
-
|
$
|
2,489
|
$
|
-
|
$
|
25,835
|
|
Commercial mortgage
|
|
211,001
|
|
10,847
|
|
12,354
|
|
-
|
|
234,202
|
|
Commercial:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term
|
|
81,394
|
|
73
|
|
421
|
|
-
|
|
81,888
|
|
Commercial construction
|
|
4,018
|
|
-
|
|
6,198
|
|
2,031
|
|
12,247
|
|
Lease financing
|
|
67
|
|
-
|
|
-
|
|
-
|
|
67
|
|
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
Home equity
|
|
35,069
|
|
-
|
|
253
|
|
-
|
|
35,322
|
|
Other
|
|
6,933
|
|
-
|
|
4
|
|
-
|
|
6,937
|
|
Total
|
$
|
361,828
|
$
|
10,920
|
$
|
21,719
|
$
|
2,031
|
$
|
396,498
|
The following tables set forth the activity and composition of DNB’s allowance for credit losses at the dates indicated.
Allowance for Credit Losses and Recorded Investment in Financing Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2013
|
|
|
Residential
|
Commercial
|
Commercial
|
Commercial
|
Lease
|
Consumer
|
Consumer
|
|
|
|
|
|
(Dollars in thousands)
|
mortgage
|
mortgage
|
term
|
construction
|
financing
|
home equity
|
other
|
Unallocated
|
Total
|
|
Allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance - January 1, 2013
|
$
|
306
|
$
|
3,094
|
$
|
506
|
$
|
1,536
|
$
|
3
|
$
|
178
|
$
|
86
|
$
|
1,129
|
$
|
6,838
|
|
Charge-offs
|
|
(183)
|
|
(716)
|
|
(247)
|
|
(3,648)
|
|
(26)
|
|
-
|
|
(70)
|
|
-
|
|
(4,890)
|
|
Recoveries
|
|
80
|
|
-
|
|
5
|
|
-
|
|
59
|
|
-
|
|
1
|
|
-
|
|
145
|
|
Provisions
|
|
82
|
|
(368)
|
|
357
|
|
3,145
|
|
(36)
|
|
(22)
|
|
61
|
|
(689)
|
|
2,530
|
|
Ending balance - December 31, 2013
|
$
|
285
|
$
|
2,010
|
$
|
621
|
$
|
1,033
|
$
|
-
|
$
|
156
|
$
|
78
|
$
|
440
|
$
|
4,623
|
|
Ending balance: individually
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
-
|
$
|
14
|
$
|
-
|
$
|
361
|
$
|
-
|
$
|
-
|
$
|
4
|
$
|
-
|
$
|
379
|
|
Ending balance: collectively
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
285
|
$
|
1,996
|
$
|
621
|
$
|
672
|
$
|
-
|
$
|
156
|
$
|
74
|
$
|
440
|
$
|
4,244
|
|
Loans receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
$
|
24,677
|
$
|
234,599
|
$
|
89,279
|
$
|
19,117
|
$
|
2
|
$
|
41,418
|
$
|
6,262
|
|
|
$
|
415,354
|
|
Ending balance: individually
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
2,250
|
$
|
2,538
|
$
|
-
|
$
|
2,554
|
$
|
-
|
$
|
434
|
$
|
82
|
|
|
$
|
7,858
|
|
Ending balance: collectively
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
22,427
|
$
|
232,061
|
$
|
89,279
|
$
|
16,563
|
$
|
2
|
$
|
40,984
|
$
|
6,180
|
|
|
$
|
407,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2012
|
|
|
Residential
|
Commercial
|
Commercial
|
Commercial
|
Lease
|
Consumer
|
Consumer
|
|
|
|
|
|
(Dollars in thousands)
|
mortgage
|
mortgage
|
term
|
construction
|
financing
|
home equity
|
other
|
Unallocated
|
Total
|
|
Allowance for credit losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance - January 1, 2012
|
$
|
383
|
$
|
3,442
|
$
|
474
|
$
|
1,029
|
$
|
10
|
$
|
165
|
$
|
95
|
$
|
566
|
$
|
6,164
|
|
Charge-offs
|
|
(99)
|
|
-
|
|
(38)
|
|
(848)
|
|
(1)
|
|
-
|
|
(31)
|
|
-
|
|
(1,017)
|
|
Recoveries
|
|
21
|
|
-
|
|
115
|
|
-
|
|
72
|
|
-
|
|
28
|
|
-
|
|
236
|
|
Provisions
|
|
1
|
|
(348)
|
|
(45)
|
|
1,355
|
|
(78)
|
|
13
|
|
(6)
|
|
563
|
|
1,455
|
|
Ending balance - December 31, 2012
|
$
|
306
|
$
|
3,094
|
$
|
506
|
$
|
1,536
|
$
|
3
|
$
|
178
|
$
|
86
|
$
|
1,129
|
$
|
6,838
|
|
Ending balance: individually
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
-
|
$
|
151
|
$
|
-
|
$
|
864
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
1,015
|
|
Ending balance: collectively
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
306
|
$
|
2,943
|
$
|
506
|
$
|
672
|
$
|
3
|
$
|
178
|
$
|
86
|
$
|
1,129
|
$
|
5,823
|
|
Loans receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
$
|
25,835
|
$
|
234,202
|
$
|
81,888
|
$
|
12,247
|
$
|
67
|
$
|
35,322
|
$
|
6,937
|
|
|
$
|
396,498
|
|
Ending balance: individually
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
2,386
|
$
|
5,372
|
$
|
-
|
$
|
4,326
|
$
|
28
|
$
|
64
|
$
|
147
|
|
|
$
|
12,323
|
|
Ending balance: collectively
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
evaluated for impairment
|
$
|
23,449
|
$
|
228,830
|
$
|
81,888
|
$
|
7,921
|
$
|
39
|
$
|
35,258
|
$
|
6,790
|
|
|
$
|
384,175
|
|