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Loans (Tables)
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Summary of Loans
The following is a summary of loans:
(Dollars in thousands)
June 30,
2020
December 31, 2019
Commercial:
 
 
Commercial real estate (1)

$1,630,998


$1,547,572

Commercial & industrial (2)
852,445

585,289

Total commercial
2,483,443

2,132,861

Residential Real Estate:
 
 
Residential real estate (3)
1,508,223

1,449,090

Consumer:
 
 
Home equity
277,632

290,874

Other (4)
18,343

20,174

Total consumer
295,975

311,048

Total loans (5)

$4,287,641


$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 portion of which are fully or partially collateralized by real estate. C&I also includes $212.2 million of PPP loans as of June 30, 2020.
(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 fees of $453 thousand at June 30, 2020 and net unamortized loan origination costs of $5.3 million, at December 31, 2019 and net unamortized premiums on purchased loans of $1.1 million and $995 thousand, respectively, at June 30, 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
 
 
 
 
 
 
June 30, 2020
30-59
 
60-89
 
Over 90
 
Total Past Due
 
Current
 
Total Loans
Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate

$—

 

$—

 

$431

 

$431

 

$1,630,567

 

$1,630,998

Commercial & industrial
2

 
1

 
—

 
3

 
852,442

 
852,445

Total commercial
2

 
1

 
431

 
434

 
2,483,009

 
2,483,443

Residential Real Estate:
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
3,858

 
3,545

 
5,096

 
12,499

 
1,495,724

 
1,508,223

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Home equity
829

 
16

 
788

 
1,633

 
275,999

 
277,632

Other
16

 
2

 
88

 
106

 
18,237

 
18,343

Total consumer
845

 
18

 
876

 
1,739

 
294,236

 
295,975

Total loans

$4,705

 

$3,564

 

$6,403

 

$14,672

 

$4,272,969

 

$4,287,641


(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)
Jun 30,
2020
 
Dec 31,
2019
Commercial:
 
 
 
Commercial real estate

$431

 

$603

Commercial & industrial
—

 
657

Total commercial
431

 
1,260

Residential Real Estate:
 
 
 
Residential real estate
13,850

 
14,297

Consumer:
 
 
 
Home equity
1,648

 
1,763

Other
88

 
88

Total consumer
1,736

 
1,851

Total nonaccrual loans

$16,017

 

$17,408

Accruing loans 90 days or more past due

$—

 

$—



For nonaccrual loans with a carrying value of $1.4 million as of June 30, 2020, no ACL was deemed necessary.

As of June 30, 2020 and December 31, 2019, loans secured by one- to four-family residential property amounting to $3.4 million and $5.8 million, respectively, were in process of foreclosure.

Nonaccrual loans of $5.5 million and $5.9 million, respectively, were current as to the payment of principal and interest at June 30, 2020 and December 31, 2019.

There were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status at June 30, 2020.

The following table presents interest income recognized on nonaccrual loans segregated by loan class:
(Dollars in thousands)
Interest Income Recognized
Periods ended June 30, 2020
Three Months
Six Months
Commercial:
 
 
Commercial real estate

$—


$—

Commercial & industrial
—

—

Total commercial
—

—

Residential Real Estate:
 
 
Residential real estate
103

271

Consumer:
 
 
Home equity
17

40

Other
—

—

Total consumer
17

40

Total

$120


$311
Troubled Debt Restructurings
The following tables present loans modified as a TDR:
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Outstanding Recorded Investment (1)
 
# of Loans
 
Pre-Modifications
 
Post-Modifications
Three months ended June 30,
2020
 
2019
 
2020
 
2019
 
2020
 
2019
Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
—

 

$841

 

$—

 

$841

 

$—

Commercial & industrial
2

 
—

 
460

 
—

 
460

 
—

Total commercial
3

 
—

 
1,301

 
—

 
1,301

 
—

Residential Real Estate:
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
6

 
—

 
3,512

 
—

 
3,512

 
—

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Home equity
3

 
—

 
802

 
—

 
802

 
—

Other
—

 
—

 
—

 
—

 
—

 
—

Total consumer
3

 
—

 

$802

 

$—

 

$802

 

$—

Total
12

 
—

 

$5,615

 

$—

 

$5,615

 

$—

(1)
The recorded investment in TDRs consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring. For accruing TDRs, the recorded investment also includes accrued interest.

 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Outstanding Recorded Investment (1)
 
# of Loans
 
Pre-Modifications
 
Post-Modifications
Six months ended June 30,
2020
 
2019
 
2020
 
2019
 
2020
 
2019
Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
1

 
—

 

$841

 

$—

 

$841

 

$—

Commercial & industrial
2

 
—

 
460

 
—

 
460

 
—

Total commercial
3

 
—

 
1,301

 
—

 
1,301

 
—

Residential Real Estate:
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
6

 
—

 
3,512

 
—

 
3,512

 
—

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Home equity
3

 
—

 
802

 
—

 
802

 
—

Other
—

 
—

 
—

 
—

 
—

 
—

Total consumer
3

 
—

 

$802

 

$—

 

$802

 

$—

Total
12

 
—

 

$5,615

 

$—

 

$5,615

 

$—


(1)
The recorded investment in TDRs consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring. For accruing TDRs, the recorded investment also includes accrued interest.

The following table presents information on how loans were modified as a TDR:
 
 
 
 
 
 
 
 
(Dollars in thousands)
Three Months
 
Six Months
Periods ended June 30,
2020
 
2019
 
2020
 
2019
Below-market interest rate concession

$—

 

$—

 

$—

 

$—

Payment deferral
5,202

 
—

 
5,202

 
—

Maturity / amortization concession
—

 
—

 
—

 
—

Interest only payments
—

 
—

 
—

 
—

Combination (1)
413

 
—

 
413

 
—

Total

$5,615

 

$—

 

$5,615

 

$—


(1)
Loans included in this classification were modified with a combination of any two of the concessions listed in this table.
Collateral Dependent Individually Analyzed Loans
The following table presents the carrying value of collateral dependent individually analyzed loans:
(Dollars in thousands)
 
 
As of June 30, 2020
Carrying Value
Related Allowance
Commercial:
 
 
Commercial real estate (1)

$431


$—

Commercial & industrial (2)
414

—

Total commercial
845

—

Residential Real Estate:
 
 
Residential real estate (3)
2,664

—

Consumer:
 
 
Home equity (3)
754

233

Other
—

—

Total consumer
754

233

Total

$4,263


$233

(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, impaired loans included nonaccrual loans and loans restructured in a TDR. 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 (TDRs 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
 
Six Months
For the periods ended June 30, 2019
Average Recorded Investment
Interest Income Recognized
 
Average Recorded Investment
Interest Income Recognized
Commercial:
 
 
 
 
 
Commercial real estate

$926


$—

 

$951


$1

Commercial & industrial
3,868

49

 
4,276

103

Total commercial
4,794

49

 
5,227

104

Residential Real Estate:




 
 
 
Residential real estate
10,728

107

 
10,441

222

Consumer:




 
 
 
Home equity
1,332

13

 
1,406

27

Other
35

—

 
28

—

Total consumer
1,367

13

 
1,434

27

Total

$16,889


$169

 

$17,102


$353
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 June 30, 2020
2020
2019
2018
2017
2016
Prior
Revolving Loans Amortized Cost
Revolving Loans Converted to Term Loans
Total
Commercial:
 
 
 
 
 
 
 
 
 
CRE:
 
 
 
 
 
 
 
 
 
Pass

$204,928


$376,942


$338,798


$249,371


$150,315


$285,727


$11,917


$2,422


$1,620,420

Special Mention
—

—

—

9,301

—

846

—

—

10,147

Classified
—

—

—

—

—

431

—

—

431

Total CRE
204,928

376,942

338,798

258,672

150,315

287,004

11,917

2,422

1,630,998

C&I:
 
 
 
 
 
 
 
 
 
Pass
286,230

103,671

84,136

63,842

68,551

112,282

100,844

1,462

821,018

Special Mention
271

—

—

2,434

—

16,897

1,630

68

21,300

Classified
414

—

—

—

—

7,592

2,121

—

10,127

Total C&I
286,915

103,671

84,136

66,276

68,551

136,771

104,595

1,530

852,445

Residential Real Estate:
 
 
 
 
 
 
 
 
 
Residential real estate:
 
 
 
 
 
 
 
 
 
Current
227,967

321,681

205,996

201,423

160,586

378,071

—

—

1,495,724

Past Due
—

510

631

2,139

111

9,108

—

—

12,499

Total residential real estate
227,967

322,191

206,627

203,562

160,697

387,179

—

—

1,508,223

Consumer:
 
 
 
 
 
 
 
 
 
Home equity:
 
 
 
 
 
 
 
 
 
Current
6,958

8,591

5,204

2,108

1,375

5,026

234,470

12,267

275,999

Past Due
—

—

—

176

—

13

497

947

1,633

Total home equity
6,958

8,591

5,204

2,284

1,375

5,039

234,967

13,214

277,632

Other:
 
 
 
 
 
 
 
 
 
Current
1,132

2,645

1,842

2,113

742

9,434

327

2

18,237

Past Due
8

—

—

11

87

—

—

—

106

Total other
1,140

2,645

1,842

2,124

829

9,434

327

2

18,343

Total Loans

$727,908


$814,040


$636,607


$532,918


$381,767


$825,427


$351,806


$17,168


$4,287,641


Consistent with industry practice, Washington Trust may renew commercial loans at or immediately prior to their maturity. Renewals subject to full credit evaluation before being granted are reported as current period originations in the table above.
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