Loans (Tables)

3 Months Ended

Mar. 31, 2020

The following is a summary of loans:



(Dollars in thousands)	March 31, 2020		December 31, 2019
Commercial:
Commercial real estate (1)		$1,618,020		$1,547,572
Commercial & industrial (2)	655,157		585,289
Total commercial	2,273,177		2,132,861
Residential Real Estate:
Residential real estate (3)	1,510,472		1,449,090
Consumer:
Home equity	287,134		290,874
Other (4)	19,613		20,174
Total consumer	306,747		311,048
Total loans (5)		$4,090,396		$3,892,999


(1)	Commercial real estate (“CRE”) consists of commercial mortgages primarily secured by income-producing property, as well as construction and development loans. Construction and development loans are made to businesses for land development or the on-site construction of industrial, commercial, or residential buildings.


(2)	Commercial and industrial (“C&I”) consists of loans to businesses and individuals, a substantial portion of which are fully or partially collateralized by real estate.


(3)	Residential real estate consists of mortgage and homeowner construction loans secured by one- to four-family residential properties.


(4)	Other consists of loans to individuals secured by general aviation aircraft and other personal installment loans.

(5)

Includes net unamortized loan origination costs of $5.2 million and $5.3 million, respectively, at March 31, 2020 and December 31, 2019 and net unamortized premiums on purchased loans of $724 thousand and $995 thousand, respectively, at March 31, 2020 and December 31, 2019.

Past Due Loans

The following tables present an age analysis of past due loans, segregated by class of loans:



(Dollars in thousands)	Days Past Due
March 31, 2020	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Commercial real estate		$825		$—		$450		$1,275		$1,616,745		$1,618,020
Commercial & industrial	20		—		290		310		654,847		655,157
Total commercial	845		—		740		1,585		2,271,592		2,273,177
Residential Real Estate:
Residential real estate	5,410		1,197		5,686		12,293		1,498,179		1,510,472
Consumer:
Home equity	1,596		103		783		2,482		284,652		287,134
Other	26		1		88		115		19,498		19,613
Total consumer	1,622		104		871		2,597		304,150		306,747
Total loans		$7,877		$1,301		$7,297		$16,475		$4,073,921		$4,090,396



(Dollars in thousands)	Days Past Due
December 31, 2019	30-59		60-89		Over 90		Total Past Due		Current		Total Loans
Commercial:
Commercial real estate		$830		$—		$603		$1,433		$1,546,139		$1,547,572
Commercial & industrial	1		—		—		1		585,288		585,289
Total commercial	831		—		603		1,434		2,131,427		2,132,861
Residential Real Estate:
Residential real estate	4,574		2,155		4,700		11,429		1,437,661		1,449,090
Consumer:
Home equity	971		729		996		2,696		288,178		290,874
Other	42		—		88		130		20,044		20,174
Total consumer	1,013		729		1,084		2,826		308,222		311,048
Total loans		$6,418		$2,884		$6,387		$15,689		$3,877,310		$3,892,999

Nonaccrual Loans

The following is a summary of nonaccrual loans, segregated by class of loans:



(Dollars in thousands)	Mar 31, 2020		Dec 31, 2019
Commercial:
Commercial real estate		$450		$603
Commercial & industrial	290		657
Total commercial	740		1,260
Residential Real Estate:
Residential real estate	15,423		14,297
Consumer:
Home equity	1,667		1,763
Other	88		88
Total consumer	1,755		1,851
Total nonaccrual loans		$17,918		$17,408
Accruing loans 90 days or more past due		$—		$—

For nonaccrual loans with a carrying value of $490 thousand as of March 31, 2020, no ACL was deemed necessary.

As of March 31, 2020 and December 31, 2019, loans secured by one- to four-family residential property amounting to $3.8 million and $5.8 million, respectively, were in process of foreclosure.

Nonaccrual loans of $6.5 million and $5.9 million, respectively, were current as to the payment of principal and interest at March 31, 2020 and December 31, 2019.

There were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status at March 31, 2020.

The following table presents interest income recognized on nonaccrual loans segregated by loan class:



(Dollars in thousands)
Three months ended March 31, 2020	Interest Income Recognized
Commercial:
Commercial real estate		$—
Commercial & industrial	—
Total commercial	—
Residential Real Estate:
Residential real estate	168
Consumer:
Home equity	23
Other	—
Total consumer	23
Total		$191

Collateral Dependent Individually Analyzed Loans

The following table presents the carrying value of collateral dependent individually analyzed loans:



(Dollars in thousands)
As of March 31, 2020	Carrying Value		Related Allowance
Commercial:
Commercial real estate (1)		$450		$6
Commercial & industrial (2)	290		290
Total commercial	740		296
Residential Real Estate:
Residential real estate (3)	418		—
Consumer:
Home equity (3)	233		233
Other	—		—
Total consumer	233		233
Total		$1,391		$529


(1)	Secured by income-producing property.


(2)	Secured by business assets.

(3)

Secured by one- to four-family residential properties.

Impaired Loans

Prior to January 1, 2020, a loan was considered impaired when, based on current information and events, it was probable that the Corporation would not be able to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impaired loans included nonaccrual loans and loans restructured in a troubled debt restructuring. The Corporation identified loss allocations for impaired loans on an individual loan basis. The following is a summary of impaired loans:



(Dollars in thousands)
As of December 31, 2019	Recorded Investment (1)		Unpaid Principal		Related Allowance
No Related Allowance Recorded
Commercial:
Commercial real estate		$—		$—		$—
Commercial & industrial	—		—		—
Total commercial	—		—		—
Residential Real Estate:
Residential real estate	13,968		14,803		—
Consumer:
Home equity	1,471		1,472		—
Other	88		88		—
Total consumer	1,559		1,560		—
Subtotal	15,527		16,363		—
With Related Allowance Recorded
Commercial:
Commercial real estate		$603		$926		$—
Commercial & industrial	657		657		580
Total commercial	1,260		1,583		580
Residential Real Estate:
Residential real estate	687		714		95
Consumer:
Home equity	292		291		291
Other	18		18		2
Total consumer	310		309		293
Subtotal	2,257		2,606		968
Total impaired loans		$17,784		$18,969		$968
Total:
Commercial		$1,260		$1,583		$580
Residential real estate	14,655		15,517		95
Consumer	1,869		1,869		293
Total impaired loans		$17,784		$18,969		$968

(1)

The recorded investment in impaired loans consists of unpaid principal balance, net of charge-offs, interest payments received applied to principal and unamortized deferred loan origination fees and costs. For accruing impaired loans (troubled debt restructurings for which management has concluded that the collectibility of the loan is not in doubt), the recorded investment also includes accrued interest.

The following table presents the average recorded investment balance of impaired loans and interest income recognized on impaired loans segregated by loan class.



(Dollars in thousands)
Three months ended March 31, 2019	Average Recorded Investment		Interest Income Recognized
Commercial:
Commercial real estate		$976		$1
Commercial & industrial	4,689		54
Total commercial	5,665		55
Residential Real Estate:
Residential real estate	10,151		115
Consumer:
Home equity	1,480		14
Other	21		—
Total consumer	1,501		14
Total		$17,317		$184

Credit Quality Indicators

The following table summarizes the Corporation’s loan portfolio by credit quality indicator and loan portfolio segment:



(Dollars in thousands)	Term Loans Amortized Cost by Origination Year
As of March 31, 2020	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost		Revolving Loans Converted to Term Loans		Total
Commercial:
CRE:
Pass		$55,517		$235,636		$340,015		$277,871		$157,491		$530,953		$7,445		$2,517		$1,607,445
Special Mention	—		—		—		9,300		—		825		—		—		10,125
Classified	—		—		—		—		—		450		—		—		450
Total CRE	55,517		235,636		340,015		287,171		157,491		532,228		7,445		2,517		1,618,020
C&I:
Pass	43,850		80,561		59,753		70,374		43,616		189,242		130,463		1,599		619,458
Special Mention	—		—		—		1,866		3,625		17,229		2,128		66		24,914
Classified	—		—		—		—		—		8,346		2,439		—		10,785
Total C&I	43,850		80,561		59,753		72,240		47,241		214,817		135,030		1,665		655,157
Residential Real Estate:
Residential real estate:
Current	100,890		339,675		241,997		225,108		177,100		413,409		—		—		1,498,179
Past Due	—		278		633		3,109		516		7,757		—		—		12,293
Total residential real estate	100,890		339,953		242,630		228,217		177,616		421,166		—		—		1,510,472
Consumer:
Home equity:
Current	2,947		9,308		5,510		2,528		1,601		5,473		243,986		13,299		284,652
Past Due	—		—		—		50		—		93		761		1,578		2,482
Total home equity	2,947		9,308		5,510		2,578		1,601		5,566		244,747		14,877		287,134
Other:
Current	605		2,975		2,025		2,321		822		10,334		414		2		19,498
Past Due	9		—		—		—		88		17		—		1		115
Total other	614		2,975		2,025		2,321		910		10,351		414		3		19,613
Total Loans		$203,818		$668,433		$649,933		$592,527		$384,859		$1,184,128		$387,636		$19,062		$4,090,396

The following table presents the commercial loan portfolio, segregated by category of credit quality indicator:



(Dollars in thousands)
As of December 31, 2019	Pass		Special Mention		Classified
Commercial:
Commercial real estate		$1,546,139		$830		$603
Commercial & industrial	549,416		24,961		10,912
Total commercial		$2,095,555		$25,791		$11,515

The following table presents the residential and consumer loan portfolios, segregated by category of credit quality indicator:



(Dollars in thousands)
As of December 31, 2019	Current		Past Due
Residential Real Estate:
Residential real estate		$1,437,661		$11,429
Consumer:
Home equity		$288,178		$2,696
Other	20,044		130
Total consumer		$308,222		$2,826