Allowance for Loan Losses |
Allowance for Loan Losses The allowance for loan losses is management’s best estimate of incurred losses inherent in the loan portfolio as of the balance sheet date. The Corporation uses a methodology to systematically measure the amount of estimated loan loss exposure inherent in the loan portfolio for purposes of establishing a sufficient allowance for loan losses. The methodology includes: (1) the identification of loss allocations for individual loans deemed to be impaired and (2) the application of loss allocation factors for non-impaired loans based on historical loss experience and estimated loss emergence period, with adjustments for various exposures that management believes are not adequately represented by historical loss experience.
The following table presents the activity in the allowance for loan losses for the three months ended March 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | (Dollars in thousands) | Commercial | | | Consumer | | | | CRE (1) | C&I (2) | Total Commercial | Residential Real Estate | Home Equity | Other | Total Consumer | Total | Beginning Balance |
| $12,729 |
|
| $5,580 |
|
| $18,309 |
|
| $5,427 |
|
| $2,412 |
|
| $340 |
|
| $2,752 |
|
| $26,488 |
| Charge-offs | (627 | ) | (6 | ) | (633 | ) | — |
| (35 | ) | (22 | ) | (57 | ) | (690 | ) | Recoveries | 25 |
| 29 |
| 54 |
| — |
| 7 |
| 5 |
| 12 |
| 66 |
| Provision | (308 | ) | 268 |
| (40 | ) | 67 |
| (192 | ) | 165 |
| (27 | ) | — |
| Ending Balance |
| $11,819 |
|
| $5,871 |
|
| $17,690 |
|
| $5,494 |
|
| $2,192 |
|
| $488 |
|
| $2,680 |
|
| $25,864 |
|
(1) Commercial real estate loans. (2) Commercial & industrial loans. The following table presents the activity in the allowance for loan losses for the three months ended March 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | (Dollars in thousands) | Commercial | | | Consumer | | | | CRE (1) | C&I (2) | Total Commercial | Residential Real Estate | Home Equity | Other | Total Consumer | Total | Beginning Balance |
| $11,166 |
|
| $6,992 |
|
| $18,158 |
|
| $5,252 |
|
| $1,889 |
|
| $705 |
|
| $2,594 |
|
| $26,004 |
| Charge-offs | — |
| (2 | ) | (2 | ) | — |
| (45 | ) | (32 | ) | (77 | ) | (79 | ) | Recoveries | — |
| 107 |
| 107 |
| 4 |
| 2 |
| 8 |
| 10 |
| 121 |
| Provision | 1,200 |
| (800 | ) | 400 |
| 103 |
| (106 | ) | 3 |
| (103 | ) | 400 |
| Ending Balance |
| $12,366 |
|
| $6,297 |
|
| $18,663 |
|
| $5,359 |
|
| $1,740 |
|
| $684 |
|
| $2,424 |
|
| $26,446 |
|
(1) Commercial real estate loans. (2) Commercial & industrial loans.
The following table presents the Corporation’s loan portfolio and associated allowance for loan loss by portfolio segment and by impairment methodology: | | | | | | | | | | | | | | | | | (Dollars in thousands) | March 31, 2018 | | December 31, 2017 | | Loans | | Related Allowance | | Loans | | Related Allowance | Loans Individually Evaluated for Impairment | | | | | | | | Commercial: | | | | | | | | Commercial real estate |
| $— |
| |
| $— |
| |
| $4,954 |
| |
| $1,018 |
| Commercial & industrial | 5,861 |
| | 53 |
| | 5,157 |
| | 1 |
| Total commercial | 5,861 |
| | 53 |
| | 10,111 |
| | 1,019 |
| Residential Real Estate: | | | | | | | | Residential real estate | 9,708 |
| | 112 |
| | 9,783 |
| | 104 |
| Consumer: | | | | | | | | Home equity | 783 |
| | 108 |
| | 557 |
| | — |
| Other | 141 |
| | 5 |
| | 147 |
| | 6 |
| Total consumer | 924 |
| | 113 |
| | 704 |
| | 6 |
| Subtotal | 16,493 |
| | 278 |
| | 20,598 |
| | 1,129 |
| Loans Collectively Evaluated for Impairment | | | | | | | | Commercial: | | | | | | | | Commercial real estate | 1,217,278 |
| | 11,819 |
| | 1,205,541 |
| | 11,711 |
| Commercial & industrial | 597,969 |
| | 5,818 |
| | 607,177 |
| | 5,579 |
| Total commercial | 1,815,247 |
| | 17,637 |
| | 1,812,718 |
| | 17,290 |
| Residential Real Estate: | | | | | | | | Residential real estate | 1,240,182 |
| | 5,382 |
| | 1,217,465 |
| | 5,323 |
| Consumer: | | | | | | | | Home equity | 284,940 |
| | 2,084 |
| | 291,910 |
| | 2,412 |
| Other | 30,544 |
| | 483 |
| | 31,380 |
| | 334 |
| Total consumer | 315,484 |
| | 2,567 |
| | 323,290 |
| | 2,746 |
| Subtotal | 3,370,913 |
| | 25,586 |
| | 3,353,473 |
| | 25,359 |
| Total |
| $3,387,406 |
| |
| $25,864 |
| |
| $3,374,071 |
| |
| $26,488 |
|
|