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Loans and Leases and the Allowance for Loan and Lease Losses
 6 Months Ended
Jun. 30, 2019
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 June 30, 2019 and December 31, 2018:

(dollars in thousands)
June 30,
2019

 
December 31,
2018

Commercial
 

 
 

Commercial and Industrial
$
1,408,729

 
$
1,331,149

Commercial Mortgage
2,411,289

 
2,302,356

Construction
119,228

 
170,061

Lease Financing
163,070

 
176,226

Total Commercial
4,102,316

 
3,979,792

Consumer
 

 
 

Residential Mortgage
3,785,006

 
3,673,796

Home Equity
1,694,577

 
1,681,442

Automobile
703,523

 
658,133

Other 1
473,707

 
455,611

Total Consumer
6,656,813

 
6,468,982

Total Loans and Leases
$
10,759,129

 
$
10,448,774

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 $1.1 million and $0.5 million for the three months ended June 30, 2019 and 2018, respectively, and $1.6 million and $0.8 million for the six months ended June 30, 2019 and 2018, respectively.

Allowance for Loan and Lease Losses (the “Allowance”)

The following presents by portfolio segment, the activity in the Allowance for the three and six months ended June 30, 2019 and 2018.  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 June 30, 2019 and 2018.

(dollars in thousands)
Commercial

 
Consumer

 
Total

Three Months Ended June 30, 2019
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
67,527

 
$
38,496

 
$
106,023

Loans and Leases Charged-Off
(206
)
 
(4,923
)
 
(5,129
)
Recoveries on Loans and Leases Previously Charged-Off
401

 
2,377

 
2,778

Net Loans and Leases Recovered (Charged-Off)
195

 
(2,546
)
 
(2,351
)
Provision for Credit Losses
1,546

 
2,454

 
4,000

Balance at End of Period
$
69,268

 
$
38,404

 
$
107,672

Six Months Ended June 30, 2019
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
66,874

 
$
39,819

 
$
106,693

Loans and Leases Charged-Off
(2,192
)
 
(9,765
)
 
(11,957
)
Recoveries on Loans and Leases Previously Charged-Off
902

 
5,034

 
5,936

Net Loans and Leases Recovered (Charged-Off)
(1,290
)
 
(4,731
)
 
(6,021
)
Provision for Credit Losses
3,684

 
3,316

 
7,000

Balance at End of Period
$
69,268

 
$
38,404

 
$
107,672

As of June 30, 2019
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Individually Evaluated for Impairment
$
716

 
$
3,327

 
$
4,043

Collectively Evaluated for Impairment
68,552

 
35,077

 
103,629

Total
$
69,268

 
$
38,404

 
$
107,672

Recorded Investment in Loans and Leases:
 

 
 

 
 

Individually Evaluated for Impairment
$
20,791

 
$
41,971

 
$
62,762

Collectively Evaluated for Impairment
4,081,525

 
6,614,842

 
10,696,367

Total
$
4,102,316

 
$
6,656,813

 
$
10,759,129

 
 
 
 
 
 
Three Months Ended June 30, 2018
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
64,110

 
$
43,828

 
$
107,938

Loans and Leases Charged-Off
(485
)
 
(5,176
)
 
(5,661
)
Recoveries on Loans and Leases Previously Charged-Off
366

 
2,045

 
2,411

Net Loans and Leases Recovered (Charged-Off)
(119
)
 
(3,131
)
 
(3,250
)
Provision for Credit Losses
(279
)
 
3,779

 
3,500

Balance at End of Period
$
63,712

 
$
44,476

 
$
108,188

Six Months Ended June 30, 2018
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Balance at Beginning of Period
$
65,822

 
$
41,524

 
$
107,346

Loans and Leases Charged-Off
(691
)
 
(10,958
)
 
(11,649
)
Recoveries on Loans and Leases Previously Charged-Off
694

 
4,172

 
4,866

Net Loans and Leases Recovered (Charged-Off)
3

 
(6,786
)
 
(6,783
)
Provision for Credit Losses
(2,113
)
 
9,738

 
7,625

Balance at End of Period
$
63,712

 
$
44,476

 
$
108,188

As of June 30, 2018
 

 
 

 
 

Allowance for Loan and Lease Losses:
 

 
 

 
 

Individually Evaluated for Impairment
$
100

 
$
3,827

 
$
3,927

Collectively Evaluated for Impairment
63,612

 
40,649

 
104,261

Total
$
63,712

 
$
44,476

 
$
108,188

Recorded Investment in Loans and Leases:
 

 
 

 
 

Individually Evaluated for Impairment
$
12,184

 
$
41,981

 
$
54,165

Collectively Evaluated for Impairment
3,804,088

 
6,195,070

 
9,999,158

Total
$
3,816,272

 
$
6,237,051

 
$
10,053,323


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 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 June 30, 2019 and December 31, 2018.
 
June 30, 2019
(dollars in thousands)
Commercial
and Industrial

 
Commercial
Mortgage

 
Construction

 
Lease
Financing

 
Total
Commercial

Pass
$
1,374,994

 
$
2,341,245

 
$
117,961

 
$
162,081

 
$
3,996,281

Special Mention
17,730

 
50,098

 
—

 
—

 
67,828

Classified
16,005

 
19,946

 
1,267

 
989

 
38,207

Total
$
1,408,729

 
$
2,411,289

 
$
119,228

 
$
163,070

 
$
4,102,316

 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
Residential
Mortgage

 
Home
Equity

 
Automobile

 
Other 1

 
Total
Consumer

Pass
$
3,779,877

 
$
1,691,560

 
$
702,916

 
$
472,744

 
$
6,647,097

Classified
5,129

 
3,017

 
607

 
963

 
9,716

Total
$
3,785,006

 
$
1,694,577

 
$
703,523

 
$
473,707

 
$
6,656,813

Total Recorded Investment in Loans and Leases
 
 

 
 

 
 

 
$
10,759,129

 
December 31, 2018
(dollars in thousands)
Commercial
and Industrial

 
Commercial
Mortgage

 
Construction

 
Lease
Financing

 
Total
Commercial

Pass
$
1,302,278

 
$
2,256,128

 
$
168,740

 
$
175,223

 
$
3,902,369

Special Mention
17,688

 
30,468

 
—

 
5

 
48,161

Classified
11,183

 
15,760

 
1,321

 
998

 
29,262

Total
$
1,331,149

 
$
2,302,356

 
$
170,061

 
$
176,226

 
$
3,979,792

 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
Residential
Mortgage

 
Home
Equity

 
Automobile

 
Other 1

 
Total
Consumer

Pass
$
3,668,475

 
$
1,677,193

 
$
657,620

 
$
454,697

 
$
6,457,985

Classified
5,321

 
4,249

 
513

 
914

 
10,997

Total
$
3,673,796

 
$
1,681,442

 
$
658,133

 
$
455,611

 
$
6,468,982

Total Recorded Investment in Loans and Leases
 
 

 
 

 
 

 
$
10,448,774

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 June 30, 2019 and December 31, 2018.
(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 June 30, 2019
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial
$
2,908

 
$
105

 
$
—

 
$
552

 
$
3,565

 
$
1,405,164

 
$
1,408,729

 
$
355

Commercial Mortgage
749

 
202

 
—

 
11,310

 
12,261

 
2,399,028

 
2,411,289

 
11,310

Construction
—

 
—

 
—

 
—

 
—

 
119,228

 
119,228

 
—

Lease Financing
—

 
—

 
—

 
—

 
—

 
163,070

 
163,070

 
—

Total Commercial
3,657

 
307

 
—

 
11,862

 
15,826

 
4,086,490

 
4,102,316

 
11,665

Consumer
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
4,688

 
396

 
1,859

 
4,697

 
11,640

 
3,773,366

 
3,785,006

 
338

Home Equity
3,059

 
1,751

 
2,981

 
2,486

 
10,277

 
1,684,300

 
1,694,577

 
443

Automobile
11,727

 
1,663

 
607

 
—

 
13,997

 
689,526

 
703,523

 
—

Other 1
2,528

 
1,578

 
963

 
—

 
5,069

 
468,638

 
473,707

 
—

Total Consumer
22,002

 
5,388

 
6,410

 
7,183

 
40,983

 
6,615,830

 
6,656,813

 
781

Total
$
25,659

 
$
5,695

 
$
6,410

 
$
19,045

 
$
56,809

 
$
10,702,320

 
$
10,759,129

 
$
12,446

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial and Industrial
$
3,653

 
$
118

 
$
10

 
$
542

 
$
4,323

 
$
1,326,826

 
$
1,331,149

 
$
515

Commercial Mortgage
561

 
—

 
—

 
2,040

 
2,601

 
2,299,755

 
2,302,356

 
2,040

Construction
—

 
—

 
—

 
—

 
—

 
170,061

 
170,061

 
—

Lease Financing
—

 
—

 
—

 
—

 
—

 
176,226

 
176,226

 
—

Total Commercial
4,214


118


10

 
2,582

 
6,924

 
3,972,868

 
3,979,792

 
2,555

Consumer
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
5,319

 
638

 
2,446

 
5,321

 
13,724

 
3,660,072

 
3,673,796

 
1,203

Home Equity
3,323

 
1,581

 
2,684

 
3,671

 
11,259

 
1,670,183

 
1,681,442

 
765

Automobile
12,372

 
2,240

 
513

 
—

 
15,125

 
643,008

 
658,133

 
—

Other 1
2,913

 
1,245

 
914

 
—

 
5,072

 
450,539

 
455,611

 
—

Total Consumer
23,927

 
5,704

 
6,557

 
8,992

 
45,180

 
6,423,802

 
6,468,982

 
1,968

Total
$
28,141

 
$
5,822

 
$
6,567

 
$
11,574

 
$
52,104

 
$
10,396,670

 
$
10,448,774

 
$
4,523

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 June 30, 2019 and December 31, 2018.

(dollars in thousands)
Recorded
 Investment

 
Unpaid
 Principal
 Balance

 
Related 
Allowance for 
Loan Losses

June 30, 2019
 

 
 

 
 

Impaired Loans with No Related Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
4,844

 
$
4,844

 
$
—

Commercial Mortgage
5,721

 
10,837

 
—

Construction
1,267

 
1,267

 
—

Total Commercial
11,832

 
16,948

 
—

Total Impaired Loans with No Related Allowance Recorded
$
11,832

 
$
16,948

 
$
—

 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
1,682

 
$
1,913

 
$
111

Commercial Mortgage
7,277

 
7,277

 
605

Total Commercial
8,959

 
9,190

 
716

Consumer
 

 
 

 
 

Residential Mortgage
19,045

 
22,926

 
2,681

Home Equity
3,495

 
3,495

 
350

Automobile
17,626

 
17,626

 
251

Other 1
1,805

 
1,806

 
45

Total Consumer
41,971

 
45,853

 
3,327

Total Impaired Loans with an Allowance Recorded
$
50,930

 
$
55,043

 
$
4,043

 
 
 
 
 
 
Impaired Loans:
 
 
 
 
 
Commercial
$
20,791

 
$
26,138

 
$
716

Consumer
41,971

 
45,853

 
3,327

Total Impaired Loans
$
62,762

 
$
71,991

 
$
4,043

 
 
 
 
 
 
December 31, 2018
 

 
 

 
 

Impaired Loans with No Related Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
4,587

 
$
4,587

 
$
—

Commercial Mortgage
2,712

 
6,212

 
—

Construction
1,321

 
1,321

 
—

Total Commercial
8,620

 
12,120

 
—

Total Impaired Loans with No Related Allowance Recorded
$
8,620

 
$
12,120

 
$
—

 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 

 
 

 
 

Commercial
 

 
 

 
 

Commercial and Industrial
$
1,856

 
$
2,099

 
$
130

Commercial Mortgage
1,822

 
1,822

 
92

Total Commercial
3,678

 
3,921

 
222

Consumer
 

 
 

 
 

Residential Mortgage
19,753

 
23,635

 
3,051

Home Equity
3,359

 
3,359

 
350

Automobile
17,117

 
17,117

 
296

Other 1
2,098

 
2,098

 
57

Total Consumer
42,327

 
46,209

 
3,754

Total Impaired Loans with an Allowance Recorded
$
46,005

 
$
50,130

 
$
3,976

 
 
 
 
 
 
Impaired Loans:
 

 
 

 
 

Commercial
$
12,298

 
$
16,041

 
$
222

Consumer
42,327

 
46,209

 
3,754

Total Impaired Loans
$
54,625

 
$
62,250

 
$
3,976

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 six months ended June 30, 2019 and 2018.

 
Three Months Ended
June 30, 2019
 
Three Months Ended
June 30, 2018
(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
$
5,008

 
$
78

 
$
7,540

 
$
83

Commercial Mortgage
5,789

 
16

 
6,351

 
30

Construction
1,281

 
21

 
1,386

 
22

Total Commercial
12,078

 
115

 
15,277

 
135

Total Impaired Loans with No Related Allowance Recorded
$
12,078

 
$
115

 
$
15,277

 
$
135

 
 
 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 

 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

Commercial and Industrial
$
1,598

 
$
22

 
$
1,128

 
$
10

Commercial Mortgage
4,535

 
2

 
236

 
3

Total Commercial
6,133

 
24

 
1,364

 
13

Consumer
 

 
 

 
 

 
 

Residential Mortgage
19,179

 
199

 
20,509

 
215

Home Equity
3,388

 
42

 
2,221

 
26

Automobile
17,705

 
298

 
15,819

 
278

Other 1
1,898

 
39

 
2,806

 
56

Total Consumer
42,170

 
578

 
41,355

 
575

Total Impaired Loans with an Allowance Recorded
$
48,303

 
$
602

 
$
42,719

 
$
588

 
 
 
 
 
 
 
 
Impaired Loans:
 

 
 

 
 

 
 

Commercial
$
18,211

 
$
139

 
$
16,641

 
$
148

Consumer
42,170

 
578

 
41,355

 
575

Total Impaired Loans
$
60,381

 
$
717

 
$
57,996

 
$
723

 
 
 
 
 
 
 
 
 
Six Months Ended
June 30, 2019
 
Six Months Ended
June 30, 2018
(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
$
4,867

 
$
163

 
$
7,724

 
$
196

Commercial Mortgage
4,763

 
32

 
7,132

 
117

Construction
1,294

 
42

 
1,396

 
45

Total Commercial
10,924

 
237

 
16,252

 
358

Total Impaired Loans with No Related Allowance Recorded
$
10,924

 
$
237

 
$
16,252

 
$
358

 
 
 
 
 
 
 
 
Impaired Loans with an Allowance Recorded:
 
 
 

 
 

 
 

Commercial
 

 
 

 
 

 
 

Commercial and Industrial
$
1,684

 
$
43

 
$
1,022

 
$
20

Commercial Mortgage
3,630

 
4

 
557

 
6

Total Commercial
5,314

 
47

 
1,579

 
26

Consumer
 

 
 

 
 

 
 

Residential Mortgage
19,370

 
395

 
20,866

 
427

Home Equity
3,378

 
80

 
2,135

 
51

Automobile
17,509

 
593

 
15,483

 
539

Other 1
1,965

 
81

 
2,752

 
108

Total Consumer
42,222

 
1,149

 
41,236

 
1,125

Total Impaired Loans with an Allowance Recorded
$
47,536

 
$
1,196

 
$
42,815

 
$
1,151

 
 
 
 
 
 
 
 
Impaired Loans:
 

 
 

 
 

 
 

Commercial
$
16,238

 
$
284

 
$
17,831

 
$
384

Consumer
42,222

 
1,149

 
41,236

 
1,125

Total Impaired Loans
$
58,460

 
$
1,433

 
$
59,067

 
$
1,509

1 
Comprised of other revolving credit and installment financing.

For the three and six months ended June 30, 2019 and 2018, 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 (“TDR”) that remained on accrual status. For the three and six months ended June 30, 2019 and 2018, 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 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 $56.7 million and $54.0 million as of June 30, 2019 and December 31, 2018, respectively.  There were $0.3 million and $0.2 million commitments to lend additional funds on loans modified in a TDR as of June 30, 2019 and December 31, 2018, respectively.

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 is 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 commercial and consumer 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 six months ended June 30, 2019 and 2018.
 
Loans Modified as a TDR for the
Three Months Ended June 30, 2019
 
Loans Modified as a TDR for the
Three Months Ended June 30, 2018
 
 

 
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

 
$
99

 
$
10

 
6

 
$
712

 
$
48

Total Commercial
1

 
99

 
10

 
6

 
712

 
48

Consumer
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
1

 
57

 
—

 
2

 
455

 
30

Home Equity
2

 
247

 
—

 
3

 
545

 
—

Automobile
79

 
1,488

 
21

 
72

 
1,521

 
31

Other 2
29

 
179

 
5

 
63

 
468

 
14

Total Consumer
111

 
1,971

 
26

 
140

 
2,989

 
75

Total
112

 
$
2,070

 
$
36

 
146

 
$
3,701

 
$
123

 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Modified as a TDR for the
Six Months Ended June 30, 2019
 
Loans Modified as a TDR for the
Six Months Ended June 30, 2018
 
 

 
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
4

 
$
205

 
$
14

 
7

 
$
1,233

 
$
48

Commercial Mortgage
1

 
3,836

 
—

 
—

 
—

 
—

Total Commercial
5

 
4,041

 
14

 
7

 
1,233

 
48

Consumer
 

 
 

 
 

 
 

 
 

 
 

Residential Mortgage
1

 
57

 
—

 
2

 
455

 
30

Home Equity
2

 
247

 
—

 
3

 
545

 
—

Automobile
191

 
3,596

 
51

 
170

 
3,654

 
75

Other 2
66

 
385

 
10

 
138

 
967

 
28

Total Consumer
260

 
4,285

 
61

 
313

 
5,621

 
133

Total
265

 
$
8,326

 
$
75

 
320

 
$
6,854

 
$
181

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 six months ended June 30, 2019 and 2018, 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
June 30, 2019
 
Three Months Ended
June 30, 2018
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

 
$
58

 
—

 
$
—

Total Commercial
1

 
58

 
—

 
—

 
 
 
 
 
 
 
 
Consumer
 
 
 

 
 

 
 

Automobile
9

 
186

 
14

 
289

Other 2
11

 
63

 
21

 
167

Total Consumer
20

 
249


35

 
456

Total
21

 
$
307

 
35

 
$
456

 
 
 
 
 
 
 
 
 
Six Months Ended
June 30, 2019
 
Six Months Ended
June 30, 2018
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

 
$
58

 
—

 
$
—

Total Commercial
1

 
58

 
—

 
—

 
 
 
 
 
 
 
 
Consumer
 

 
 

 
 

 
 

Home Equity
—

 
—

 
1

 
236

Automobile
19

 
353

 
32

 
606

Other 2
20

 
109

 
41

 
295

Total Consumer
39

 
462

 
74

 
1,137

Total
40

 
$
520

 
74

 
$
1,137


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 $2.7 million as of June 30, 2019.