Allowance for Credit Losses

3 Months Ended

Mar. 31, 2022

Allowance for Credit Losses

Allowance for Credit Losses

4. Allowance for Credit Losses

The Company maintains the allowance for credit losses for loans and leases (the “ACL”) that is deducted from the amortized cost basis of loans and leases to present the net carrying value of loans and leases expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount of loans and leases.

The Company also maintains an estimated reserve for unfunded commitments on the unaudited interim consolidated balance sheets. The reserve for unfunded commitments is reduced in the period in which the off-balance sheet financial instruments expire, loan funding occurs, or is otherwise settled.

Rollforward of the Allowance for Credit Losses

The following presents the activity in the ACL by class of loans and leases for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31, 2022
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Allowance for credit losses:
Balance at beginning of period	$	20,080	$	42,951	$	9,773	$	1,659	$	34,364	$	5,642	$	42,793	$	157,262
Charge-offs		(706)		—		—		—		—		(43)		(4,109)		(4,858)
Recoveries		53		14		—		—		16		28		2,148		2,259
Increase (decrease) in Provision		(267)		2,273		(865)		(297)		(3,492)		(543)		(1,192)		(4,383)
Balance at end of period	$	19,160	$	45,238	$	8,908	$	1,362	$	30,888	$	5,084	$	39,640	$	150,280

	Three Months Ended March 31, 2021
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Allowance for credit losses:
Balance at beginning of year	$	24,711	$	58,123	$	10,039	$	3,298	$	40,461	$	7,163	$	64,659	$	208,454
Charge-offs		(963)		(66)		—		—		(98)		—		(6,541)		(7,668)
Recoveries		215		3		166		—		17		24		2,655		3,080
Increase (decrease) in Provision		3,359		(6,369)		347		(101)		(1,909)		(519)		1,692		(3,500)
Balance at end of period	$	27,322	$	51,691	$	10,552	$	3,197	$	38,471	$	6,668	$	62,465	$	200,366

Rollforward of the Reserve for Unfunded Commitments

The following presents the activity in the Reserve for Unfunded Commitments for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31, 2022
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Reserve for unfunded commitments:
Balance at beginning of period	$	8,615	$	2,114	$	8,963	$	—	$	15	$	10,546	$	69	$	30,322
Increase (decrease) in Provision		693		(325)		(917)		—		(12)		(780)		(23)		(1,364)
Balance at end of period	$	9,308	$	1,789	$	8,046	$	—	$	3	$	9,766	$	46	$	28,958

	Three Months Ended March 31, 2021
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Reserve for unfunded commitments:
Balance at beginning of period	$	11,719	$	1,328	$	9,037	$	—	$	2	$	8,452	$	65	$	30,603
Increase (decrease) in Provision		4,410		(216)		(724)		—		(2)		48		(16)		3,500
Balance at end of period	$	16,129	$	1,112	$	8,313	$	—	$	—	$	8,500	$	49	$	34,103

Credit Quality Information

The Company performs an internal loan review and grading or scoring procedures on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of the Company’s lending policies and procedures. The objective of the loan review and grading or scoring procedures is to identify, in a timely manner, existing or emerging credit quality issues so that appropriate steps can be initiated to avoid or minimize future losses.

Loans and leases subject to grading primarily include: commercial and industrial loans, commercial real estate loans, construction loans and lease financing. Other loans subject to grading include installment loans to businesses or individuals for business and commercial purposes, overdraft lines of credit, commercial credit cards, and other credits as may be determined. Credit quality indicators for internally graded loans and leases are generally updated on an annual basis or on a quarterly basis for those loans and leases deemed to be of potentially higher risk.

An internal credit risk rating system is used to determine loan grade and is based on borrower credit risk and transactional risk. The loan grading process is a mechanism used to determine the risk of a particular borrower and is based on the following factors of a borrower: character, earnings and operating cash flow, asset and liability structure, debt capacity, management and controls, borrowing entity, and industry and operating environment.

Pass – “Pass” (uncriticized) loans and leases, are not considered to carry greater than normal risk. The borrower has the apparent ability to satisfy obligations to the Company, and therefore no loss in ultimate collection is anticipated.

Special Mention – Loans and leases that have potential weaknesses deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for assets or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard – Loans and leases that are inadequately protected by the current financial condition and paying capacity of the obligor or by any collateral pledged. Loans and leases so classified must have a well-defined weakness or weaknesses that jeopardize the collection of the debt. They are characterized by the distinct possibility that the bank may sustain some loss if the deficiencies are not corrected.

Doubtful – Loans and leases that have weaknesses found in substandard borrowers with the added provision that the weaknesses make collection of debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss – Loans and leases classified as loss are considered uncollectible and of such little value that their continuance as an asset is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.

Loans that are primarily monitored for credit quality using FICO scores include: residential mortgage loans, home equity lines and consumer loans. FICO scores are calculated primarily based on a consideration of payment history, the current amount of debt, the length of credit history available, a recent history of new sources of credit and the mix of credit type. FICO scores are updated on a monthly, quarterly or bi-annual basis, depending on the product type.

The amortized cost basis by year of origination and credit quality indicator of the Company’s loans and leases as of March 31, 2022 was as follows:

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Amortized
(dollars in thousands)	2022		2021		2020		2019		2018		Prior		Cost Basis		Cost Basis		Total
Commercial Lending
Commercial and Industrial
Risk rating:
Pass	$	158,853	$	483,473	$	98,061	$	184,897	$	79,810	$	166,075	$	594,007	$	31,048	$	1,796,224
Special Mention		2,876		356		3,898		3,983		52		5,594		1,601		867		19,227
Substandard		—		337		1,296		1,776		13,251		757		15,877		138		33,432
Other (1)		4,028		10,510		6,171		6,450		3,516		1,664		42,312		—		74,651
Total Commercial and Industrial		165,757		494,676		109,426		197,106		96,629		174,090		653,797		32,053		1,923,534
Commercial Real Estate
Risk rating:
Pass		240,807		682,346		351,893		523,735		471,899		1,291,495		77,724		14,752		3,654,651
Special Mention		—		—		—		47,897		473		39,064		696		—		88,130
Substandard		—		—		—		—		1,757		15,280		4		—		17,041
Other (1)		—		—		—		—		—		158		—		—		158
Total Commercial Real Estate		240,807		682,346		351,893		571,632		474,129		1,345,997		78,424		14,752		3,759,980
Construction
Risk rating:
Pass		6,160		167,645		118,526		136,209		112,919		89,172		19,470		—		650,101
Special Mention		—		—		—		244		705		353		—		—		1,302
Substandard		—		—		—		—		357		827		—		—		1,184
Other (1)		7,871		29,932		5,774		2,957		3,922		4,435		822		—		55,713
Total Construction		14,031		197,577		124,300		139,410		117,903		94,787		20,292		—		708,300
Lease Financing
Risk rating:
Pass		3,913		31,974		57,192		45,698		8,813		69,286		—		—		216,876
Special Mention		—		479		2,672		1,360		12		20		—		—		4,543
Substandard		—		—		270		123		15		1,343		—		—		1,751
Total Lease Financing		3,913		32,453		60,134		47,181		8,840		70,649		—		—		223,170
Total Commercial Lending	$	424,508	$	1,407,052	$	645,753	$	955,329	$	697,501	$	1,685,523	$	752,513	$	46,805	$	6,614,984

(continued)

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
(continued)													Amortized		Amortized
(dollars in thousands)	2022		2021		2020		2019		2018		Prior		Cost Basis		Cost Basis		Total
Residential Lending
Residential Mortgage
FICO:
740 and greater	$	185,434	$	1,096,789	$	615,500	$	264,419	$	183,368	$	1,012,447	$	—	$	—	$	3,357,957
680 - 739		26,812		128,172		72,766		44,872		25,913		159,950		—		—		458,485
620 - 679		3,088		13,196		12,304		5,995		5,021		39,145		—		—		78,749
550 - 619		—		2,267		1,570		720		731		8,847		—		—		14,135
Less than 550		2,116		228		60		—		82		4,098		—		—		6,584
No Score (3)		6,550		15,806		7,676		13,968		17,545		56,444		—		—		117,989
Other (2)		18,485		30,872		16,042		9,704		10,810		32,600		43		1,369		119,925
Total Residential Mortgage		242,485		1,287,330		725,918		339,678		243,470		1,313,531		43		1,369		4,153,824
Home Equity Line
FICO:
740 and greater		—		—		—		—		—		—		705,570		1,892		707,462
680 - 739		—		—		—		—		—		—		147,290		3,202		150,492
620 - 679		—		—		—		—		—		—		39,370		2,129		41,499
550 - 619		—		—		—		—		—		—		10,310		1,426		11,736
Less than 550		—		—		—		—		—		—		1,482		494		1,976
No Score (3)		—		—		—		—		—		—		4,936		—		4,936
Total Home Equity Line		—		—		—		—		—		—		908,958		9,143		918,101
Total Residential Lending		242,485		1,287,330		725,918		339,678		243,470		1,313,531		909,001		10,512		5,071,925
Consumer Lending
FICO:
740 and greater		60,821		145,550		74,436		68,970		46,731		24,261		112,298		217		533,284
680 - 739		26,319		87,933		50,976		48,120		28,498		18,340		68,407		647		329,240
620 - 679		6,222		39,016		19,677		25,307		16,453		14,473		30,462		1,038		152,648
550 - 619		292		7,159		7,314		11,776		8,904		8,485		10,352		1,129		55,411
Less than 550		53		2,003		3,445		5,732		2,939		3,089		3,166		471		20,898
No Score (3)		280		458		9		53		35		52		35,063		337		36,287
Other (2)		502		4,247		363		1,691		4		2,181		68,078		—		77,066
Total Consumer Lending		94,489		286,366		156,220		161,649		103,564		70,881		327,826		3,839		1,204,834
Total Loans and Leases	$	761,482	$	2,980,748	$	1,527,891	$	1,456,656	$	1,044,535	$	3,069,935	$	1,989,340	$	61,156	$	12,891,743

(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.

(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.

(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

The amortized cost basis by year of origination and credit quality indicator of the Company’s loans and leases as of December 31, 2021 was as follows:

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Amortized
(dollars in thousands)	2021		2020		2019		2018		2017		Prior		Cost Basis		Cost Basis		Total
Commercial Lending
Commercial and Industrial
Risk rating:
Pass	$	623,098	$	129,665	$	223,388	$	88,409	$	29,380	$	168,591	$	644,947	$	40,193	$	1,947,671
Special Mention		397		4,382		4,213		12,552		974		5,313		4,804		986		33,621
Substandard		354		1,380		1,951		1,285		60		3,551		17,893		1,043		27,517
Other (1)		13,277		7,070		7,741		4,453		1,995		370		43,384		—		78,290
Total Commercial and Industrial		637,126		142,497		237,293		106,699		32,409		177,825		711,028		42,222		2,087,099
Commercial Real Estate
Risk rating:
Pass		693,370		338,140		533,887		487,739		415,186		940,732		78,479		14,891		3,502,424
Special Mention		—		—		48,499		7,470		25,513		30,255		7,600		—		119,337
Substandard		—		—		—		1,776		164		15,303		459		—		17,702
Other (1)		—		—		—		—		—		160		—		—		160
Total Commercial Real Estate		693,370		338,140		582,386		496,985		440,863		986,450		86,538		14,891		3,639,623
Construction
Risk rating:
Pass		154,558		107,767		210,314		155,311		62,770		48,021		22,859		—		761,600
Special Mention		—		—		244		707		—		356		—		—		1,307
Substandard		—		—		—		363		—		839		—		—		1,202
Other (1)		26,835		8,875		4,317		4,308		2,684		2,048		793		—		49,860
Total Construction		181,393		116,642		214,875		160,689		65,454		51,264		23,652		—		813,969
Lease Financing
Risk rating:
Pass		33,980		60,650		48,236		9,449		15,009		57,130		—		—		224,454
Special Mention		501		2,702		1,506		311		153		—		—		—		5,173
Substandard		—		270		140		16		871		470		—		—		1,767
Total Lease Financing		34,481		63,622		49,882		9,776		16,033		57,600		—		—		231,394
Total Commercial Lending	$	1,546,370	$	660,901	$	1,084,436	$	774,149	$	554,759	$	1,273,139	$	821,218	$	57,113	$	6,772,085

(continued)

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
(continued)													Amortized		Amortized
(dollars in thousands)	2021		2020		2019		2018		2017		Prior		Cost Basis		Cost Basis		Total
Residential Lending
Residential Mortgage
FICO:
740 and greater	$	1,101,958	$	635,061	$	286,993	$	198,622	$	251,906	$	829,175	$	—	$	—	$	3,303,715
680 - 739		140,997		81,590		45,163		27,315		32,855		125,906		—		—		453,826
620 - 679		15,781		11,943		5,268		10,149		9,069		37,404		—		—		89,614
550 - 619		1,735		873		698		533		2,033		7,475		—		—		13,347
Less than 550		—		—		—		345		2,603		2,838		—		—		5,786
No Score (3)		18,882		7,938		15,051		18,107		17,333		42,185		—		—		119,496
Other (2)		25,625		16,263		10,242		11,297		16,242		17,152		44		718		97,583
Total Residential Mortgage		1,304,978		753,668		363,415		266,368		332,041		1,062,135		44		718		4,083,367
Home Equity Line
FICO:
740 and greater		—		—		—		—		—		—		671,566		1,873		673,439
680 - 739		—		—		—		—		—		—		141,889		3,968		145,857
620 - 679		—		—		—		—		—		—		37,815		2,500		40,315
550 - 619		—		—		—		—		—		—		9,090		948		10,038
Less than 550		—		—		—		—		—		—		2,574		68		2,642
No Score (3)		—		—		—		—		—		—		4,317		—		4,317
Total Home Equity Line		—		—		—		—		—		—		867,251		9,357		876,608
Total Residential Lending		1,304,978		753,668		363,415		266,368		332,041		1,062,135		867,295		10,075		4,959,975
Consumer Lending
FICO:
740 and greater		155,929		83,337		79,617		56,707		24,525		8,067		117,843		209		526,234
680 - 739		93,214		56,327		55,126		34,049		17,527		6,315		69,366		707		332,631
620 - 679		41,671		21,986		28,491		19,403		12,952		5,324		31,165		1,175		162,167
550 - 619		7,836		8,265		13,265		10,497		7,469		3,244		10,359		1,089		62,024
Less than 550		2,272		3,867		6,646		3,484		2,739		1,175		3,195		536		23,914
No Score (3)		481		19		56		40		65		2		35,414		320		36,397
Other (2)		4,737		365		1,712		17		2,182		31		77,528		—		86,572
Total Consumer Lending		306,140		174,166		184,913		124,197		67,459		24,158		344,870		4,036		1,229,939
Total Loans and Leases	$	3,157,488	$	1,588,735	$	1,632,764	$	1,164,714	$	954,259	$	2,359,432	$	2,033,383	$	71,224	$	12,961,999

(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score.

(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating.

(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

There were no loans and leases graded as Loss as of March 31, 2022 and December 31, 2021.

The amortized cost basis of revolving loans that were converted to term loans during the three months ended March 31, 2022 and 2021 was as follows:

	Three Months Ended
(dollars in thousands)	March 31, 2022
Commercial and industrial	$	203
Home equity line		1,015
Consumer		354
Total Revolving Loans Converted to Term Loans During the Period	$	1,572

	Three Months Ended
(dollars in thousands)	March 31, 2021
Commercial and industrial	$	229
Home equity line		1,079
Consumer		493
Total Revolving Loans Converted to Term Loans During the Period	$	1,801

Past-Due Status

The Company continually updates its aging analysis for loans and leases to monitor the migration of loans and leases into past due categories. The Company considers loans and leases that are delinquent for 30 days or more to be past due. As of March 31, 2022 and December 31, 2021, the aging analysis of the amortized cost basis of the Company’s past due loans and leases was as follows:

	March 31, 2022
	Past Due												Loans and
					Greater								Leases Past
					Than or								Due 90 Days
	30-59		60-89		Equal to								or More and
	Days		Days		90 Days		Total				Total Loans		Still Accruing
(dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		and Leases		Interest
Commercial and industrial	$	2,825	$	2,351	$	1,160	$	6,336	$	1,917,198	$	1,923,534	$	591
Commercial real estate		2,503		—		727		3,230		3,756,750		3,759,980		—
Construction		247		—		—		247		708,053		708,300		—
Lease financing		—		—		75		75		223,095		223,170		—
Residential mortgage		1,229		1,301		5,665		8,195		4,145,629		4,153,824		13
Home equity line		1,640		589		2,252		4,481		913,620		918,101		2,252
Consumer		14,144		2,589		1,588		18,321		1,186,513		1,204,834		1,588
Total	$	22,588	$	6,830	$	11,467	$	40,885	$	12,850,858	$	12,891,743	$	4,444

	December 31, 2021
	Past Due												Loans and
					Greater								Leases Past
					Than or								Due 90 Days
	30-59		60-89		Equal to								or More and
	Days		Days		90 Days		Total				Total Loans		Still Accruing
(dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		and Leases		Interest
Commercial and industrial	$	1,195	$	1,195	$	1,318	$	3,708	$	2,083,391	$	2,087,099	$	740
Commercial real estate		631		—		—		631		3,638,992		3,639,623		—
Construction		162		—		—		162		813,807		813,969		—
Lease financing		—		—		—		—		231,394		231,394		—
Residential mortgage		3,030		1,002		5,617		9,649		4,073,718		4,083,367		987
Home equity line		1,538		538		3,681		5,757		870,851		876,608		3,681
Consumer		16,534		3,366		1,800		21,700		1,208,239		1,229,939		1,800
Total	$	23,090	$	6,101	$	12,416	$	41,607	$	12,920,392	$	12,961,999	$	7,208

Nonaccrual Loans and Leases

The Company generally places a loan or lease on nonaccrual status when management believes that collection of principal or interest has become doubtful or when a loan or lease becomes 90 days past due as to principal or interest, unless it is well secured and in the process of collection. The Company charges off a loan or lease when facts indicate that the loan or lease is considered uncollectible.

The amortized cost basis of loans and leases on nonaccrual status as of March 31, 2022 and December 31, 2021 and the amortized cost basis of loans and leases on nonaccrual status with no ACL as of March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022
	Nonaccrual
	Loans
	and Leases
	With No		Nonaccrual
	Allowance		Loans
(dollars in thousands)	for Credit Losses		and Leases
Commercial and industrial	$	—	$	707
Commercial real estate		727		727
Lease financing		—		75
Residential mortgage		2,163		7,092
Total Nonaccrual Loans and Leases	$	2,890	$	8,601

	December 31, 2021
	Nonaccrual
	Loans
	and Leases
	With No		Nonaccrual
	Allowance		Loans
(dollars in thousands)	for Credit Losses		and Leases
Commercial and industrial	$	—	$	718
Commercial real estate		727		727
Residential mortgage		1,192		5,637
Total Nonaccrual Loans and Leases	$	1,919	$	7,082

For the three months ended March 31, 2022 and 2021, the Company recognized interest income of nil and $0.1 million, respectively, on nonaccrual loans and leases. Furthermore, for the three months ended March 31, 2022 and 2021, the amount of accrued interest receivables written off by reversing interest income was $0.2 million and $0.4 million, respectively.

Collateral-Dependent Loans and Leases

Collateral-dependent loans and leases are those for which repayment (on the basis of the Company’s assessment as of the reporting date) is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. As of March 31, 2022 and December 31, 2021, the amortized cost basis of collateral-dependent loans were $8.4 million and $7.5 million, respectively. As of both March 31, 2022 and December 31, 2021, these loans were primarily collateralized by residential real estate property. As of both March 31, 2022 and December 31, 2021, the fair value of collateral on substantially all collateral-dependent loans were significantly in excess of their amortized cost basis.

Modifications

Commercial and industrial loans modified in a TDR may involve temporary interest-only payments, term and amortization extensions, and converting revolving credit lines to term loans. Modifications of commercial real estate and construction loans in a TDR may involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Modifications of construction loans in a TDR may also involve extending the interest-only payment period. Interest continues to accrue on the missed payments and as a result, the effective yield on the loan remains unchanged. Residential real estate loans modified in a TDR may be comprised of loans where monthly payments are lowered to accommodate the borrowers’ financial needs for a period of time, including extended interest-only periods and re-amortization of the balance. Modifications of consumer loans in a TDR may involve temporary or permanent reduced payments, temporary interest-only payments and below-market interest rates.

Loans modified in a TDR may already be on nonaccrual status and in some cases, partial charge-offs may have already been taken against the outstanding loan balance. Loans modified in a TDR are evaluated for impairment. As a result, this may have a financial effect of increasing the specific ACL associated with the loan. An ACL for impaired commercial loans, including commercial real estate and construction loans, that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or if the loan is collateral-dependent, the estimated fair value of the collateral, less any selling costs. An ACL for impaired residential real estate loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs. Management exercises significant judgment in developing these estimates.

The following presents, by class, information related to loans modified in a TDR during the three months ended March 31, 2022 and 2021:

	Three Months Ended					Three Months Ended
	March 31, 2022					March 31, 2021
	Number of	Recorded		Related		Number of	Recorded		Related
(dollars in thousands)	Contracts(1)	Investment(2)		ACL		Contracts(1)	Investment(2)		ACL
Commercial and industrial	—	$	—	$	—	17	$	2,945	$	1,648
Construction	—		—		—	2		716		342
Residential mortgage	—		—		—	10		4,916		374
Consumer	144		1,759		202	1,690		15,763		11,832
Total	144	$	1,759	$	202	1,719	$	24,340	$	14,196

(1) The number of contracts does not include TDRs that have been fully paid off, charged off, or foreclosed upon by the end of the period.

(2) The recorded investment balances reflect all partial paydowns and charge-offs since the modification date and do not include TDRs that have been fully paid off, charged off, or foreclosed upon by the end of the period.

The above loans were modified in a TDR through an extension of maturity dates, temporary interest-only payments, temporary payment deferrals, reduced payments, converting revolving credit lines to term loans or below-market interest rates.

The Company had commitments to extend credit, standby letters of credit, and commercial letters of credit totaling $6.7 billion as of both March 31, 2022 and December 31, 2021. Of the $6.7 billion at March 31, 2022, there were commitments of $0.1 million to lend additional funds related to borrowers who had loan terms modified in a TDR. Of the $6.7 billion at December 31, 2021, there were commitments of $0.2 million to lend additional funds related to borrowers who had loan terms modified in a TDR.

The following table presents, by class, loans modified in TDRs that have defaulted in the current period within 12 months of their permanent modification date for the periods indicated. The Company is reporting these defaulted TDRs based on a payment default definition of 30 days past due:

	Three Months Ended March 31,
	2022			2021
	Number of	Recorded		Number of	Recorded
(dollars in thousands)	Contracts(1)	Investment(2)		Contracts(1)	Investment(2)
Commercial and industrial	1	$	216	2	$	397
Construction	—		—	1		361
Residential mortgage	—		—	1		372
Consumer	142		1,991	93		1,068
Total	143	$	2,207	97	$	2,198

(1) The number of contracts does not include TDRs that have been fully paid off, charged off, or foreclosed upon by the end of the period.

(2) The recorded investment balances reflect all partial paydowns and charge-offs since the modification date and do not include TDRs that have been fully paid off, charged off, or foreclosed upon by the end of the period.

Foreclosure Proceedings

As of both March 31, 2022 and December 31, 2021, there was one residential mortgage loan of $0.3 million collateralized by real estate property that was modified in a TDR that was in process of foreclosure.

Foreclosed Property

As of March 31, 2022, there were no residential real estate properties held from foreclosed residential real estate loans. As of December 31, 2021, residential real estate property held from one foreclosed residential mortgage loan of $0.2 million was included in other real estate owned and repossessed personal property shown in the unaudited interim consolidated balance sheets.