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Loans and Leases and the Allowance for Loan and Lease Losses
 9 Months Ended
Sep. 30, 2017
Loans and Leases and Allowance for Loan and Lease Losses [Abstract]  
Loans and Leases and the Allowance for Loan and Lease Losses
Loans and Leases and the Allowance for Loan and Lease Losses

Loans and Leases

The Company’s loan and lease portfolio was comprised of the following as of September 30, 2017 and December 31, 2016:

(dollars in thousands)
September 30,
2017

 
December 31,
2016

Commercial
 

 
 

Commercial and Industrial
$
1,252,238

 
$
1,249,791

Commercial Mortgage
2,050,998

 
1,889,551

Construction
232,487

 
270,018

Lease Financing
204,240

 
208,332

Total Commercial
3,739,963

 
3,617,692

Consumer
 

 
 

Residential Mortgage
3,366,634

 
3,163,073

Home Equity
1,528,353

 
1,334,163

Automobile
506,102

 
454,333

Other 1
432,904

 
380,524

Total Consumer
5,833,993

 
5,332,093

Total Loans and Leases
$
9,573,956

 
$
8,949,785

1 
Comprised of other revolving credit, installment, and lease financing.
The majority of the Company’s lending activity is with customers located in the State of Hawaii. A substantial portion of the Company’s real estate loans are secured by real estate in Hawaii.

Net gains related to sales of residential mortgage loans, recorded as a component of mortgage banking income were $1.4 million and $3.6 million for the three months ended September 30, 2017 and 2016, respectively, and $4.6 million and $9.8 million for the nine months ended September 30, 2017 and 2016, respectively.
Allowance for Loan and Lease Losses (the “Allowance”)

The following presents by portfolio segment, the activity in the Allowance for the three and nine months ended September 30, 2017 and 2016.  The following also presents by portfolio segment, the balance in the Allowance disaggregated on the basis of the Company’s impairment measurement method and the related recorded investment in loans and leases as of September 30, 2017 and 2016.

(dollars in thousands)
Commercial

 
Consumer

 
Total

Three Months Ended September 30, 2017
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
66,182

 
$
40,171

 
$
106,353

Loans and Leases Charged-Off
(611
)
 
(5,607
)
 
(6,218
)
Recoveries on Loans and Leases Previously Charged-Off
598

 
2,148

 
2,746

Net Loans and Leases Recovered (Charged-Off)
(13
)
 
(3,459
)
 
(3,472
)
Provision for Credit Losses
295

 
3,705

 
4,000

Balance at End of Period
$
66,464

 
$
40,417

 
$
106,881

Nine Months Ended September 30, 2017
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
65,680

 
$
38,593

 
$
104,273

Loans and Leases Charged-Off
(909
)
 
(16,500
)
 
(17,409
)
Recoveries on Loans and Leases Previously Charged-Off
1,200

 
6,167

 
7,367

Net Loans and Leases Recovered (Charged-Off)
291

 
(10,333
)
 
(10,042
)
Provision for Credit Losses
493

 
12,157

 
12,650

Balance at End of Period
$
66,464

 
$
40,417

 
$
106,881

As of September 30, 2017
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Individually Evaluated for Impairment
$
136

 
$
3,762

 
$
3,898

Collectively Evaluated for Impairment
66,328

 
36,655

 
102,983

Total
$
66,464

 
$
40,417

 
$
106,881

Recorded Investment in Loans and Leases:
 

 
 

 
 

Individually Evaluated for Impairment
$
21,738

 
$
39,385

 
$
61,123

Collectively Evaluated for Impairment
3,718,225

 
5,794,608

 
9,512,833

Total
$
3,739,963

 
$
5,833,993

 
$
9,573,956

 
 
 
 
 
 
Three Months Ended September 30, 2016
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
62,029

 
$
41,903

 
$
103,932

Loans and Leases Charged-Off
(209
)
 
(4,707
)
 
(4,916
)
Recoveries on Loans and Leases Previously Charged-Off
296

 
2,221

 
2,517

Net Loans and Leases Recovered (Charged-Off)
87

 
(2,486
)
 
(2,399
)
Provision for Credit Losses
442

 
2,058

 
2,500

Balance at End of Period
$
62,558

 
$
41,475

 
$
104,033

Nine Months Ended September 30, 2016
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
60,714

 
$
42,166

 
$
102,880

Loans and Leases Charged-Off
(670
)
 
(12,888
)
 
(13,558
)
Recoveries on Loans and Leases Previously Charged-Off
7,619

 
5,592

 
13,211

Net Loans and Leases Recovered (Charged-Off)
6,949

 
(7,296
)
 
(347
)
Provision for Credit Losses
(5,105
)
 
6,605

 
1,500

Balance at End of Period
$
62,558

 
$
41,475

 
$
104,033

As of September 30, 2016
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Individually Evaluated for Impairment
$
11

 
$
3,436

 
$
3,447

Collectively Evaluated for Impairment
62,547

 
38,039

 
100,586

Total
$
62,558

 
$
41,475

 
$
104,033

Recorded Investment in Loans and Leases:
 

 
 

 
 

Individually Evaluated for Impairment
$
21,793

 
$
38,450

 
$
60,243

Collectively Evaluated for Impairment
3,467,761

 
5,166,093

 
8,633,854

Total
$
3,489,554

 
$
5,204,543

 
$
8,694,097


Credit Quality Indicators

The Company uses several credit quality indicators to manage credit risk in an ongoing manner.  The Company uses an internal credit risk rating system that categorizes loans and leases into pass, special mention, or classified categories.  Credit risk ratings are applied individually to those classes of loans and leases that have significant or unique credit characteristics that benefit from a case-by-case evaluation.  These are typically loans and leases to businesses or individuals in the classes which comprise the commercial portfolio segment.  Groups of loans and leases that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk-rated and monitored collectively.  These are typically loans and leases to individuals in the classes which comprise the consumer portfolio segment.

The following are the definitions of the Company’s credit quality indicators:

Pass:
Loans and leases in all classes within the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan or lease agreement. Management believes that there is a low likelihood of loss related to those loans and leases that are considered pass.

Special Mention:
Loans and leases in the classes within the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease. Management believes that there is a moderate likelihood of some loss related to those loans and leases that are considered special mention.

Classified:
Loans and leases in the classes within the commercial portfolio segment that are inadequately protected by the sound worth and paying capacity of the borrower or of the collateral pledged, if any. Classified loans and leases are also those in the classes within the consumer portfolio segment that are past due 90 days or more as to principal or interest. Residential mortgage loans that are past due 90 days or more as to principal or interest may be considered pass if the Company is in the process of collection and the current loan-to-value ratio is 60% or less. Home equity loans that are past due 90 days or more as to principal or interest may be considered pass if the Company is in the process of collection, the first mortgage is with the Company, and the current combined loan-to-value ratio is 60% or less. Residential mortgage and home equity loans may be current as to principal and interest, but may be considered classified for a period of generally up to six months following a loan modification. Following a period of demonstrated performance in accordance with the modified contractual terms, the loan may be removed from classified status. Management believes that there is a distinct possibility that the Company will sustain some loss if the deficiencies related to classified loans and leases are not corrected in a timely manner.

The Company’s credit quality indicators are periodically updated on a case-by-case basis.  The following presents by class and by credit quality indicator, the recorded investment in the Company’s loans and leases as of September 30, 2017 and December 31, 2016.
 
September 30, 2017
(dollars in thousands)
Commercial
and Industrial

 
Commercial
Mortgage

 
Construction

 
Lease
Financing

 
Total
Commercial

Pass
$
1,206,294

 
$
1,997,523

 
$
231,033

 
$
203,806

 
$
3,638,656

Special Mention
18,593

 
30,744

 
13

 
—

 
49,350

Classified
27,351

 
22,731

 
1,441

 
434

 
51,957

Total
$
1,252,238

 
$
2,050,998

 
$
232,487

 
$
204,240

 
$
3,739,963

 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
Residential
Mortgage

 
Home
Equity

 
Automobile

 
Other 1

 
Total
Consumer

Pass
$
3,357,447

 
$
1,521,919

 
$
505,296

 
$
432,211

 
$
5,816,873

Special Mention
—

 
1,764

 
—

 
—

 
1,764

Classified
9,187

 
4,670

 
806

 
693

 
15,356

Total
$
3,366,634

 
$
1,528,353

 
$
506,102

 
$
432,904

 
$
5,833,993

Total Recorded Investment in Loans and Leases
 
 

 
 

 
 

 
$
9,573,956

 
December 31, 2016
(dollars in thousands)
Commercial
and Industrial

 
Commercial
Mortgage

 
Construction

 
Lease
Financing

 
Total
Commercial

Pass
$
1,203,025

 
$
1,792,119

 
$
264,287

 
$
207,386

 
$
3,466,817

Special Mention
20,253

 
66,734

 
4,218

 
5

 
91,210

Classified
26,513

 
30,698

 
1,513

 
941

 
59,665

Total
$
1,249,791

 
$
1,889,551

 
$
270,018

 
$
208,332

 
$
3,617,692

 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
Residential
Mortgage

 
Home
Equity

 
Automobile

 
Other 1

 
Total
Consumer

Pass
$
3,149,294

 
$
1,327,676

 
$
453,439

 
$
379,793

 
$
5,310,202

Special Mention
—

 
2,964

 
—

 
—

 
2,964

Classified
13,779

 
3,523

 
894

 
731

 
18,927

Total
$
3,163,073

 
$
1,334,163

 
$
454,333

 
$
380,524

 
$
5,332,093

Total Recorded Investment in Loans and Leases
 
 

 
 

 
 

 
$
8,949,785

1 
Comprised of other revolving credit, installment, and lease financing.
Aging Analysis

The following presents by class, an aging analysis of the Company’s loan and lease portfolio as of September 30, 2017 and December 31, 2016.
(dollars in thousands)
30 - 59
Days
Past Due

 
60 - 89
Days
Past Due

 
Past Due
90 Days
or More

 
Non-Accrual

 
Total
Past Due and
Non-Accrual

 
Current

 
Total
Loans and
Leases

 
Non-Accrual
Loans and
Leases that
are Current 2

As of September 30, 2017
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial
$
2,063

 
$
206

 
$
5

 
$
901

 
$
3,175

 
$
1,249,063

 
$
1,252,238

 
$
162

Commercial Mortgage
1,321

 
619

 
—

 
1,425

 
3,365

 
2,047,633

 
2,050,998

 
404

Construction
—

 
—

 
—

 
—

 
—

 
232,487

 
232,487

 
—

Lease Financing
—

 
—

 
—

 
—

 
—

 
204,240

 
204,240

 
—

Total Commercial
3,384

 
825

 
5

 
2,326

 
6,540

 
3,733,423

 
3,739,963

 
566

Consumer
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
3,838

 
1,456

 
2,933

 
9,188

 
17,415

 
3,349,219

 
3,366,634

 
1,517

Home Equity
2,588

 
1,017

 
1,392

 
4,128

 
9,125

 
1,519,228

 
1,528,353

 
1,300

Automobile
9,743

 
1,623

 
806

 
—

 
12,172

 
493,930

 
506,102

 
—

Other 1
2,772

 
1,912

 
1,528

 
—

 
6,212

 
426,692

 
432,904

 
—

Total Consumer
18,941

 
6,008

 
6,659

 
13,316

 
44,924

 
5,789,069

 
5,833,993

 
2,817

Total
$
22,325

 
$
6,833

 
$
6,664

 
$
15,642

 
$
51,464

 
$
9,522,492

 
$
9,573,956

 
$
3,383

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial
$
10,698

 
$
1,016

 
$
—

 
$
151

 
$
11,865

 
$
1,237,926

 
$
1,249,791

 
$
—

Commercial Mortgage
128

 
17

 
—

 
997

 
1,142

 
1,888,409

 
1,889,551

 
416

Construction
—

 
—

 
—

 
—

 
—

 
270,018

 
270,018

 
—

Lease Financing
—

 
—

 
—

 
—

 
—

 
208,332

 
208,332

 
—

Total Commercial
10,826


1,033


—

 
1,148

 
13,007

 
3,604,685

 
3,617,692

 
416

Consumer
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
6,491

 
106

 
3,127

 
13,780

 
23,504

 
3,139,569

 
3,163,073

 
1,628

Home Equity
3,063

 
2,244

 
1,457

 
3,147

 
9,911

 
1,324,252

 
1,334,163

 
1,015

Automobile
11,692

 
2,162

 
894

 
—

 
14,748

 
439,585

 
454,333

 
—

Other 1
3,200

 
1,532

 
1,592

 
—

 
6,324

 
374,200

 
380,524

 
—

Total Consumer
24,446

 
6,044

 
7,070

 
16,927

 
54,487

 
5,277,606

 
5,332,093

 
2,643

Total
$
35,272

 
$
7,077

 
$
7,070

 
$
18,075

 
$
67,494

 
$
8,882,291

 
$
8,949,785

 
$
3,059

1 
Comprised of other revolving credit, installment, and lease financing.
2 
Represents non-accrual loans that are not past due 30 days or more; however, full payment of principal and interest is still not expected.
Impaired Loans

The following presents by class, information related to impaired loans as of September 30, 2017 and December 31, 2016.

(dollars in thousands)
Recorded
 Investment

 
Unpaid
 Principal
 Balance

 
Related 
Allowance for 
Loan Losses

September 30, 2017
 

 
 

 
 

Impaired Loans with No Related Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
8,967

 
$
16,279

 
$
—

Commercial Mortgage
9,450

 
12,950

 
—

Construction
1,441

 
1,440

 
—

Total Commercial
19,858

 
30,669

 
—

Total Impaired Loans with No Related Allowance Recorded
$
19,858

 
$
30,669

 
$
—

 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
656

 
$
656

 
$
14

Commercial Mortgage
1,224

 
1,224

 
122

Total Commercial
1,880

 
1,880

 
136

Consumer
 

 
 

 
 

Residential Mortgage
21,401

 
26,140

 
3,117

Home Equity
1,810

 
1,810

 
267

Automobile
13,612

 
13,612

 
304

Other 1
2,562

 
2,562

 
74

Total Consumer
39,385

 
44,124

 
3,762

Total Impaired Loans with an Allowance Recorded
$
41,265

 
$
46,004

 
$
3,898

 
 
 
 
 
 
Impaired Loans:
 
 
 
 
 
Commercial
$
21,738

 
$
32,549

 
$
136

Consumer
39,385

 
44,124

 
3,762

Total Impaired Loans
$
61,123

 
$
76,673

 
$
3,898

 
 
 
 
 
 
December 31, 2016
 

 
 

 
 

Impaired Loans with No Related Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
9,556

 
$
16,518

 
$
—

Commercial Mortgage
9,373

 
12,873

 
—

Construction
1,513

 
1,513

 
—

Total Commercial
20,442

 
30,904

 
—

Total Impaired Loans with No Related Allowance Recorded
$
20,442

 
$
30,904

 
$
—

 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
765

 
$
765

 
$
24

Commercial Mortgage
365

 
365

 
21

Total Commercial
1,130

 
1,130

 
45

Consumer
 

 
 

 
 

Residential Mortgage
25,625

 
30,615

 
3,224

Home Equity
1,516

 
1,516

 
15

Automobile
9,660

 
9,660

 
206

Other 1
2,325

 
2,325

 
65

Total Consumer
39,126

 
44,116

 
3,510

Total Impaired Loans with an Allowance Recorded
$
40,256

 
$
45,246

 
$
3,555

 
 
 
 
 
 
Impaired Loans:
 

 
 

 
 

Commercial
$
21,572

 
$
32,034

 
$
45

Consumer
39,126

 
44,116

 
3,510

Total Impaired Loans
$
60,698

 
$
76,150

 
$
3,555

1 Comprised of other revolving credit and installment financing.
The following presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2017 and 2016.

 
Three Months Ended
September 30, 2017
 
Three Months Ended
September 30, 2016
(dollars in thousands)
Average Recorded
Investment

 
Interest Income
Recognized

 
Average Recorded
Investment

 
Interest Income
Recognized

Impaired Loans with No Related Allowance Recorded:
 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

Commercial and Industrial
$
8,592

 
$
106

 
$
9,762

 
$
115

Commercial Mortgage
9,512

 
61

 
9,848

 
90

Construction
1,453

 
23

 
1,548

 
25

Total Commercial
19,557

 
190

 
21,158

 
230

Total Impaired Loans with No Related Allowance Recorded
$
19,557

 
$
190

 
$
21,158

 
$
230

 
 
 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 

 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

Commercial and Industrial
$
640

 
$
11

 
$
681

 
$
27

Commercial Mortgage
771

 
31

 
194

 
5

Total Commercial
1,411

 
42

 
875

 
32

Consumer
 

 
 

 
 

 
 

Residential Mortgage
21,674

 
209

 
27,172

 
235

Home Equity
1,773

 
20

 
1,428

 
15

Automobile
12,895

 
217

 
7,908

 
129

Other 1
2,615

 
52

 
2,064

 
44

Total Consumer
38,957

 
498

 
38,572

 
423

Total Impaired Loans with an Allowance Recorded
$
40,368

 
$
540

 
$
39,447

 
$
455

 
 
 
 
 
 
 
 
Impaired Loans:
 

 
 

 
 

 
 

Commercial
$
20,968

 
$
232

 
$
22,033

 
$
262

Consumer
38,957

 
498

 
38,572

 
423

Total Impaired Loans
$
59,925

 
$
730

 
$
60,605

 
$
685

 
 
 
 
 
 
 
 
 
Nine Months Ended
September 30, 2017
 
Nine Months Ended
September 30, 2016
(dollars in thousands)
Average Recorded
Investment

 
Interest Income
Recognized

 
Average Recorded
Investment

 
Interest Income
Recognized

Impaired Loans with No Related Allowance Recorded:
 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

Commercial and Industrial
$
8,989

 
$
248

 
$
11,061

 
$
333

Commercial Mortgage
9,390

 
223

 
10,040

 
252

Construction
1,477

 
71

 
1,570

 
76

Total Commercial
19,856

 
542

 
22,671

 
661

Total Impaired Loans with No Related Allowance Recorded
$
19,856

 
$
542

 
$
22,671

 
$
661

 
 
 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

Commercial and Industrial
$
684

 
$
31

 
$
983

 
$
59

Commercial Mortgage
562

 
39

 
97

 
5

Total Commercial
1,246

 
70

 
1,080

 
64

Consumer
 

 
 

 
 

 
 

Residential Mortgage
23,331

 
635

 
27,889

 
736

Home Equity
1,642

 
57

 
1,365

 
50

Automobile
11,592

 
581

 
7,553

 
376

Other 1
2,553

 
162

 
1,922

 
126

Total Consumer
39,118

 
1,435

 
38,729

 
1,288

Total Impaired Loans with an Allowance Recorded
$
40,364

 
$
1,505

 
$
39,809

 
$
1,352

 
 
 
 
 
 
 
 
Impaired Loans:
 

 
 

 
 

 
 

Commercial
$
21,102

 
$
612

 
$
23,751

 
$
725

Consumer
39,118

 
1,435

 
38,729

 
1,288

Total Impaired Loans
$
60,220

 
$
2,047

 
$
62,480

 
$
2,013

1 
Comprised of other revolving credit and installment financing.


For the three and nine months ended September 30, 2017 and 2016, the amounts of interest income recognized by the Company within the periods that the loans were impaired were primarily related to loans modified in a troubled debt restructuring that remained on accrual status.  For the three and nine months ended September 30, 2017 and 2016, the amount of interest income recognized using a cash-basis method of accounting during the periods that the loans were impaired was not material.

Modifications

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider.  Loans modified in a TDR were $59.2 million and $60.0 million as of September 30, 2017 and December 31, 2016, respectively.  As of September 30, 2017, there were no commitments to lend additional funds on loans modified in a TDR. As of December 31, 2016, there were $0.4 million of commitments to lend additional funds on loans modified in a TDR.

The Company offers various types of concessions when modifying a loan or lease. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor are often requested. Commercial mortgage and construction loans modified in a TDR often 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 co-borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period. Residential mortgage loans modified in a TDR generally include a lower interest rate and the loan being fully amortized for up to 40 years from the modification effective date. In some cases, the Company may forbear a portion of the unpaid principal balance with a balloon payment due upon maturity or pay-off of the loan. Land loans are also included in the class of residential mortgage loans. Land loans are typically structured as interest-only monthly payments with a balloon payment due at maturity. Land loan modifications usually involve extending the interest-only monthly payments up to an additional five years with a balloon payment due at maturity, or re-amortizing the remaining balance over a period up to 360 months. Interest rates are not changed for land loan modifications. Home equity modifications are made infrequently and uniquely designed to meet the specific needs of each borrower. Automobile loans modified in a TDR are primarily comprised of loans where the Company has lowered monthly payments by extending the term.

Loans modified in a TDR are typically already on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance.  As a result, loans modified in a TDR may have the financial effect of increasing the specific Allowance associated with the loan.  An Allowance for impaired consumer and commercial 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, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent.  Management exercises significant judgment in developing these estimates.

The following presents by class, information related to loans modified in a TDR during the three and nine months ended September 30, 2017 and 2016.
 
Loans Modified as a TDR for the
Three Months Ended September 30, 2017
 
Loans Modified as a TDR for the
Three Months Ended September 30, 2016
 
 

 
Recorded

 
Increase in

 
 

 
Recorded

 
Increase in

Troubled Debt Restructurings
Number of

 
Investment

 
Allowance

 
Number of

 
Investment

 
Allowance

(dollars in thousands)
Contracts

(as of period end)1
 
(as of period end)
 
 
Contracts

(as of period end)1
 
(as of period end)
 
Commercial
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial
1

 
$
198

 
$
—

 
4

 
$
97

 
$
1

Commercial Mortgage
2

 
1,307

 
93

 
1

 
208

 
2

Total Commercial
3

 
1,505

 
93

 
5

 
305

 
3

Consumer
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
—

 
—

 
—

 
3

 
547

 
258

Home Equity
2

 
203

 
1

 
—

 
—

 
—

Automobile
123

 
2,636

 
59

 
79

 
1,678

 
38

Other 2
34

 
383

 
9

 
62

 
510

 
14

Total Consumer
159

 
3,222

 
69

 
144

 
2,735

 
310

Total
162

 
$
4,727

 
$
162

 
149

 
$
3,040

 
$
313

 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Modified as a TDR for the
Nine Months Ended September 30, 2017
 
Loans Modified as a TDR for the
Nine Months Ended September 30, 2016
 
 

 
Recorded

 
Increase in

 
 

 
Recorded

 
Increase in

Troubled Debt Restructurings
Number of

 
Investment

 
Allowance

 
Number of

 
Investment

 
Allowance

(dollars in thousands)
Contracts

(as of period end)1
 
(as of period end)
 
 
Contracts

(as of period end)1
 
(as of period end)
 
Commercial
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial
12

 
$
7,485

 
$
12

 
6

 
$
3,084

 
$
1

Commercial Mortgage
3

 
2,007

 
93

 
1

 
208

 
2

Total Commercial
15

 
9,492

 
105

 
7

 
3,292

 
3

Consumer
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
—

 
—

 
—

 
8

 
3,025

 
274

Home Equity
3

 
442

 
5

 
1

 
476

 
5

Automobile
326

 
6,657

 
149

 
184

 
3,617

 
82

Other 2
136

 
1,131

 
28

 
155

 
1,127

 
31

Total Consumer
465

 
8,230

 
182

 
348

 
8,245

 
392

Total
480

 
$
17,722

 
$
287

 
355

 
$
11,537

 
$
395

1 
The period end balances reflect all paydowns and charge-offs since the modification date.  TDRs fully paid-off, charged-off, or foreclosed upon by period end are not included.
2 
Comprised of other revolving credit and installment financing.
The following presents by class, all loans modified in a TDR that defaulted during the three and nine months ended September 30, 2017 and 2016, and within twelve months of their modification date.  A TDR is considered to be in default once it becomes 60 days or more past due following a modification.
 
Three Months Ended
September 30, 2017
 
Three Months Ended
September 30, 2016
TDRs that Defaulted During the Period,
 

 
Recorded

 
Recorded
 
Within Twelve Months of their Modification Date
Number of

 
Investment

 
Number of

 
Investment

(dollars in thousands)
Contracts

 
(as of period end)1

 
Contracts

 
(as of period end)1

Consumer
 
 
 

 
 

 
 

Automobile
15

 
$
373

 
1

 
$
3

Other 2
13

 
83

 
—

 
—

Total Consumer
28

 
456


1

 
3

Total
28

 
$
456

 
1

 
$
3

 
 
 
 
 
 
 
 
 
Nine Months Ended
September 30, 2017
 
Nine Months Ended
September 30, 2016
TDRs that Defaulted During the Period,
 

 
Recorded

 
Recorded
 
Within Twelve Months of their Modification Date
Number of

 
Investment

 
Number of

 
Investment

(dollars in thousands)
Contracts

 
(as of period end)1

 
Contracts

 
(as of period end)1

Commercial
 
 
 
 
 
 
 
Commercial and Industrial
1

 
$
49

 
—

 
$
—

Total Commercial
1

 
49

 
—

 
—

 
 
 
 
 
 
 
 
Consumer
 

 
 

 
 

 
 

Residential Mortgage
—

 
—

 
3

 
1,044

Home Equity
—

 
—

 
1

 
158

Automobile
23

 
551

 
3

 
47

Other 2
33

 
184

 
18

 
110

Total Consumer
56

 
735

 
25

 
1,359

Total
57

 
$
784

 
25

 
$
1,359


1 
The period end balances reflect all paydowns and charge-offs since the modification date.  TDRs fully paid-off, charged-off, or foreclosed upon by period end are not included.
2 
Comprised of other revolving credit and installment financing.
Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default.  If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment.  The specific Allowance associated with the loan may be increased, adjustments may be made in the allocation of the Allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan.

Foreclosure Proceedings

Consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure totaled $5.5 million as of September 30, 2017.