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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 9 Months Ended
Sep. 30, 2018
Loans and Leases Receivable Disclosure [Abstract]  
Composition of Loan Portfolio, Excluding Residential Loans Held for Sale
The composition of the Company’s loan portfolio, excluding residential loans held for sale, at September 30, 2018 and December 31, 2017 was as follows:   
 
September 30,
2018
 
December 31,
2017
Residential real estate
$
941,488

 
$
858,369

Commercial real estate
1,215,979

 
1,164,023

Commercial
368,837

 
373,400

Home equity
325,452

 
323,378

Consumer
20,258

 
18,149

HPFC
36,829

 
45,120

Total loans
$
2,908,843

 
$
2,782,439
Schedule of Loan Balances by Portfolio Segment
The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs totaling:
 
September 30,
2018
 
December 31,
2017
Net unamortized fair value mark discount on acquired loans
$
4,757

 
$
6,207

Net unamortized loan origination costs
(1,411
)
 
(963
)
Total
$
3,346

 
$
5,244
Summary of Activity in Allowance for Loan Losses
The following presents the activity in the ALL and select loan information by portfolio segment for the three and nine months ended September 30, 2018 and 2017, and for the year ended December 31, 2017: 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Three and Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
5,779

 
$
10,310

 
$
4,303

 
$
2,616

 
$
260

 
$
400

 
$
23,668

Loans charged off
 
(115
)
 
—

 
(150
)
 
(157
)
 
(28
)
 
(209
)
 
(659
)
Recoveries
 
37

 
4

 
117

 
—

 
3

 
1

 
162

Provision (credit)(1)
 
59

 
268

 
(302
)
 
116

 
38

 
176

 
355

Ending balance
 
$
5,760

 
$
10,582

 
$
3,968

 
$
2,575

 
$
273

 
$
368

 
$
23,526

ALL for the nine months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
5,086

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

Loans charged off
 
(231
)
 
(512
)
 
(448
)
 
(381
)
 
(70
)
 
(209
)
 
(1,851
)
Recoveries
 
52

 
19

 
237

 
44

 
8

 
1

 
361

Provision (credit)(1)
 
853

 
(788
)
 
8

 
545

 
102

 
125

 
845

Ending balance
 
$
5,760

 
$
10,582

 
$
3,968

 
$
2,575

 
$
273

 
$
368

 
$
23,526

ALL balance attributable to loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
619

 
$
23

 
$
—

 
$
114

 
$
—

 
$
—

 
$
756

Collectively evaluated for impairment
 
5,141

 
10,559

 
3,968

 
2,461

 
273

 
368

 
22,770

Total ending ALL
 
$
5,760

 
$
10,582

 
$
3,968

 
$
2,575

 
$
273

 
$
368

 
$
23,526

Loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
5,184

 
$
5,007

 
$
1,548

 
$
373

 
$
—

 
$
—

 
$
12,112

Collectively evaluated for impairment
 
936,304

 
1,210,972

 
367,289

 
325,079

 
20,258

 
36,829

 
2,896,731

Total ending loans balance
 
$
941,488

 
$
1,215,979

 
$
368,837

 
$
325,452

 
$
20,258

 
$
36,829

 
$
2,908,843

For The Three and Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
4,481

 
$
12,848

 
$
4,275

 
$
2,094

 
$
182

 
$
514

 
$
24,394

Loans charged off
 
(238
)
 
(69
)
 
(369
)
 
(11
)
 
(28
)
 
(193
)
 
(908
)
Recoveries
 
26

 
25

 
59

 
1

 
9

 
5

 
125

Provision (credit)(1)
 
273

 
(8
)
 
256

 
93

 
32

 
156

 
802

Ending balance
 
$
4,542

 
$
12,796

 
$
4,221

 
$
2,177

 
$
195

 
$
482

 
$
24,413

ALL for the nine months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
4,160

 
$
12,154

 
$
3,755

 
$
2,194

 
$
181

 
$
672

 
$
23,116

Loans charged off
 
(433
)
 
(81
)
 
(650
)
 
(403
)
 
(90
)
 
(274
)
 
(1,931
)
Recoveries
 
30

 
138

 
254

 
2

 
13

 
5

 
442

Provision(1)
 
785

 
585

 
862

 
384

 
91

 
79

 
2,786

Ending balance
 
$
4,542

 
$
12,796

 
$
4,221

 
$
2,177

 
$
195

 
$
482

 
$
24,413

ALL balance attributable to loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
464

 
$
1,470

 
$
—

 
$
—

 
$
—

 
$
—

 
$
1,934

Collectively evaluated for impairment
 
4,078

 
11,326

 
4,221

 
2,177

 
195

 
482

 
22,479

Total ending ALL
 
$
4,542

 
$
12,796

 
$
4,221

 
$
2,177

 
$
195

 
$
482

 
$
24,413

Loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
4,792

 
$
6,373

 
$
1,842

 
$
423

 
$
—

 
$
—

 
$
13,430

Collectively evaluated for impairment
 
848,059

 
1,125,510

 
367,313

 
327,905

 
18,123

 
47,950

 
2,734,860

Total ending loans balance
 
$
852,851

 
$
1,131,883

 
$
369,155

 
$
328,328

 
$
18,123

 
$
47,950

 
$
2,748,290

 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Year Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
4,160

 
$
12,154

 
$
3,755

 
$
2,194

 
$
181

 
$
672

 
$
23,116

Loans charged off
 
(482
)
 
(124
)
 
(1,014
)
 
(434
)
 
(124
)
 
(290
)
 
(2,468
)
Recoveries
 
30

 
141

 
301

 
2

 
17

 
6

 
497

Provision (credit)(1)
 
1,378

 
(308
)
 
1,129

 
605

 
159

 
63

 
3,026

Ending balance
 
$
5,086

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

ALL balance attributable to loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
568

 
$
1,441

 
$
—

 
$
—

 
$
—

 
$
—

 
$
2,009

Collectively evaluated for impairment
 
4,518

 
10,422

 
4,171

 
2,367

 
233

 
451

 
22,162

Total ending ALL
 
$
5,086

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

Loans:
 
  

 
  

 
  

 
  

 
  

 
 
 
  

Individually evaluated for impairment
 
$
5,171

 
$
6,199

 
$
1,791

 
$
429

 
$
—

 
$
—

 
$
13,590

Collectively evaluated for impairment
 
853,198

 
1,157,824

 
371,609

 
322,949

 
18,149

 
45,120

 
2,768,849

Total ending loans balance
 
$
858,369

 
$
1,164,023

 
$
373,400

 
$
323,378

 
$
18,149

 
$
45,120

 
$
2,782,439


(1)
The provision for loan losses excludes any impact for the change in the reserve for unfunded commitments, which represents management's estimate of the amount required to reflect the probable inherent losses on outstanding letters of credit and unused lines of credit. The reserve for unfunded commitments is presented within accrued interest and other liabilities on the consolidated statements of condition. At September 30, 2018 and 2017, and December 31, 2017, the reserve for unfunded commitments was $15,000, $22,000 and $20,000, respectively.
Schedule of Provision for Credit Losses
The following reconciles the three and nine months ended September 30, 2018 and 2017, and year ended December 31, 2017 provision for loan losses to the provision for credit losses as presented on the consolidated statement of income:
 
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
Year Ended December 31,
2017
 
 
2018
 
2017
 
2018
 
2017
 
Provision for loan losses
 
$
355

 
$
802

 
$
845

 
$
2,786

 
$
3,026

Change in reserve for unfunded commitments
 
(1
)
 
15

 
(5
)
 
11

 
9

Provision for credit losses
 
$
354

 
$
817

 
$
840

 
$
2,797

 
$
3,035
Credit Risk Exposure Indicators by Portfolio Segment
The following summarizes credit risk exposure indicators by portfolio segment as of the following dates:
 
 
Residential 
Real Estate
 
Commercial 
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass (Grades 1-6)
 
$
930,134

 
$
1,185,948

 
$
360,959

 
$
—

 
$
—

 
$
35,325

 
$
2,512,366

Performing
 
—

 
—

 
—

 
323,840

 
20,211

 
—

 
344,051

Special Mention (Grade 7)
 
897

 
13,099

 
2,802

 
—

 
—

 
139

 
16,937

Substandard (Grade 8)
 
10,457

 
16,932

 
5,076

 
—

 
—

 
1,365

 
33,830

Non-performing
 
—

 
—

 
—

 
1,612

 
47

 
—

 
1,659

Total
 
$
941,488

 
$
1,215,979

 
$
368,837

 
$
325,452

 
$
20,258

 
$
36,829

 
$
2,908,843

December 31, 2017
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Pass (Grades 1-6)
 
$
846,394

 
$
1,130,235

 
$
354,904

 
$
—

 
$
—

 
$
43,049

 
$
2,374,582

Performing
 
—

 
—

 
—

 
321,727

 
18,149

 
—

 
339,876

Special Mention (Grade 7)
 
922

 
9,154

 
12,517

 
—

 
—

 
191

 
22,784

Substandard (Grade 8)
 
11,053

 
24,634

 
5,979

 
—

 
—

 
1,880

 
43,546

Non-performing
 
—

 
—

 
—

 
1,651

 
—

 
—

 
1,651

Total
 
$
858,369

 
$
1,164,023

 
$
373,400

 
$
323,378

 
$
18,149

 
$
45,120

 
$
2,782,439
Loan Aging Analysis by Portfolio Segment
The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and a summary of non-accrual loans, which include TDRs, and loans past due over 90 days and accruing as of the following dates:
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater
than
90 Days
 
Total
Past Due
 
Current
 
Total Loans
Outstanding
 
Loans > 90
Days Past
Due and
Accruing
 
Non-Accrual
Loans
September 30, 2018
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
3,342

 
$
636

 
$
3,801

 
$
7,779

 
$
933,709

 
$
941,488

 
$
—

 
$
4,720

Commercial real estate
607

 
104

 
5,355

 
6,066

 
1,209,913

 
1,215,979

 
—

 
5,517

Commercial
79

 
644

 
2,040

 
2,763

 
366,074

 
368,837

 
—

 
2,402

Home equity
542

 
335

 
1,427

 
2,304

 
323,148

 
325,452

 
—

 
1,614

Consumer
36

 
14

 
47

 
97

 
20,161

 
20,258

 
14

 
33

HPFC
617

 
460

 
591

 
1,668

 
35,161

 
36,829

 
—

 
591

Total
$
5,223

 
$
2,193

 
$
13,261

 
$
20,677

 
$
2,888,166

 
$
2,908,843

 
$
14

 
$
14,877

December 31, 2017
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
3,871

 
$
1,585

 
$
4,021

 
$
9,477

 
$
848,892

 
$
858,369

 
$
—

 
$
4,979

Commercial real estate
849

 
323

 
5,528

 
6,700

 
1,157,323

 
1,164,023

 
—

 
5,642

Commercial
329

 
359

 
1,535

 
2,223

 
371,177

 
373,400

 
—

 
2,000

Home equity
1,046

 
173

 
1,329

 
2,548

 
320,830

 
323,378

 
—

 
1,650

Consumer
57

 
10

 
—

 
67

 
18,082

 
18,149

 
—

 
—

HPFC
139

 
1,372

 
419

 
1,930

 
43,190

 
45,120

 
—

 
1,043

Total
$
6,291

 
$
3,822

 
$
12,832

 
$
22,945

 
$
2,759,494

 
$
2,782,439

 
$
—

 
$
15,314
Troubled Debt Restructuring and Specific Reserve Related to TDRs
The following is a summary of TDRs, by portfolio segment, and the associated specific reserve included within the ALL as of the periods indicated:
 
 
Number of Contracts
 
Recorded Investment
 
Specific Reserve
 
 
September 30, 2018
 
December 31, 2017
 
September 30, 2018
 
December 31, 2017
 
September 30, 2018
 
December 31, 2017
Residential real estate
 
26

 
24

 
$
3,754

 
$
3,604

 
$
476

 
$
452

Commercial real estate
 
2

 
3

 
349

 
976

 
23

 
16

Commercial
 
4

 
7

 
1,228

 
1,345

 
—

 
—

Home equity
 
2

 
2

 
305

 
307

 
114

 
—

Total
 
34

 
36

 
$
5,636

 
$
6,232

 
$
613

 
$
468
Schedule of Loan Modifications
The following represents loan modifications that qualify as TDRs that occurred for the three and nine months ended September 30, 2018 and 2017:
 
 
Number of Contracts
 
Pre-Modification
Outstanding
Recorded Investment
 
Post-Modification
Outstanding
Recorded Investment
 
Specific Reserve
 
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
For the three months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate concession
 
—

 
1

 
$
—

 
$
134

 
$
—

 
$
145

 
$
—

 
$
—

Maturity concession
 
—

 
1

 
—

 
147

 
—

 
147

 
—

 
—

Interest rate and maturity concession
 
1

 
1

 
68

 
148

 
68

 
156

 
12

 
29

Payment deferral
 
1

 
—

 
166

 
—

 
166

 
—

 
45

 
—

Total
 
2

 
3

 
$
234

 
$
429

 
$
234

 
$
448

 
$
57

 
$
29

For the nine months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate concession
 
—

 
1

 
$
—

 
$
134

 
$
—

 
$
145

 
$
—

 
$
—

Maturity concession
 
—

 
2

 
—

 
298

 
—

 
298

 
—

 
15

Interest rate and maturity concession
 
2

 
1

 
231

 
148

 
254

 
156

 
51

 
29

Payment deferral
 
1

 
—

 
166

 
—

 
166

 
—

 
45

 
—

Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
—

 
1

 
—

 
315

 
—

 
315

 
—

 
—

Total
 
3

 
5

 
$
397

 
$
895

 
$
420

 
$
914

 
$
96

 
$
44
Summary of Impaired Loan Balances and Associated Allowance by Portfolio Segment
The following is a summary of impaired loan balances and the associated allowance by portfolio segment as of and for the three and nine months ended September 30, 2018 and 2017, and as of and for the year-ended December 31, 2017:
 
 
 
 
 
 
 
For the
Three Months Ended
 
For the
Nine Months Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized(1)
 
Average
Recorded
Investment
 
Interest
Income
Recognized
September 30, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
$
3,577

 
$
3,577

 
$
619

 
$
3,541

 
$
27

 
$
2,428

 
$
96

Commercial real estate
349

 
349

 
23

 
350

 
6

 
2,428

 
17

Commercial
—

 
—

 
—

 
—

 
—

 
—

 
—

Home equity
318

 
318

 
114

 
391

 
—

 
232

 
—

Consumer
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
4,244

 
4,244

 
756

 
4,282

 
33

 
5,088

 
113

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
1,607

 
1,807

 
—

 
1,750

 
13

 
1,582

 
27

Commercial real estate
4,658

 
4,944

 
—

 
4,700

 
—

 
2,637

 
—

Commercial
1,548

 
2,725

 
—

 
1,580

 
2

 
1,666

 
6

Home equity
55

 
206

 
—

 
39

 
—

 
213

 
—

Consumer
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
7,868

 
9,682

 
—

 
8,069

 
15

 
6,098

 
33

Total impaired loans
$
12,112

 
$
13,926

 
$
756

 
$
12,351

 
$
48

 
$
11,186

 
$
146

September 30, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
$
3,262

 
$
3,262

 
$
464

 
$
3,194

 
$
48

 
$
3,084

 
$
103

Commercial real estate
5,589

 
5,589

 
1,470

 
6,590

 
4

 
10,048

 
15

Commercial
—

 
—

 
—

 
82

 
—

 
41

 
—

Home equity
—

 
—

 
—

 
—

 
—

 
167

 
—

Consumer
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
33

 
—

Ending Balance
8,851

 
8,851

 
1,934

 
9,866

 
52

 
13,373

 
118

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
1,530

 
1,949

 
—

 
1,427

 
15

 
1,349

 
15

Commercial real estate
784

 
1,032

 
—

 
794

 
15

 
1,250

 
22

Commercial
1,842

 
3,015

 
—

 
1,891

 
(6
)
 
1,959

 
8

Home equity
423

 
482

 
—

 
440

 
1

 
271

 
6

Consumer
—

 
—

 
—

 
—

 
(4
)
 
3

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending Balance
4,579

 
6,478

 
—

 
4,552

 
21

 
4,832

 
51

Total impaired loans
$
13,430

 
$
15,329

 
$
1,934

 
$
14,418

 
$
73

 
$
18,205

 
$
169


(1)
Negative interest income recognized represents the re-allocation of interest income between "without an allowance recorded" and "with an allowance recorded" during the period.
 
 
 
 
 
 
 
For the
Year Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
December 31, 2017:
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 

 
 

 
 

 
 

Residential real estate
$
3,858

 
$
3,858

 
$
568

 
$
3,177

 
$
131

Commercial real estate
5,422

 
5,422

 
1,441

 
8,900

 
22

Commercial
—

 
—

 
—

 
31

 
—

Home equity
—

 
—

 
—

 
125

 
—

Consumer
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
24

 
—

Ending Balance
9,280

 
9,280

 
2,009

 
12,257

 
153

Without an allowance recorded:
  

 
  

 
  

 
  

 
  

Residential real estate
1,313

 
1,673

 
—

 
1,345

 
15

Commercial real estate
777

 
1,084

 
—

 
1,132

 
29

Commercial
1,791

 
2,964

 
—

 
1,920

 
10

Home equity
429

 
495

 
—

 
310

 
8

Consumer
—

 
—

 
—

 
2

 
—

HPFC
—

 
—

 
—

 
—

 
—

Ending Balance
4,310

 
6,216

 
—

 
4,709

 
62

Total impaired loans
$
13,590

 
$
15,496

 
$
2,009

 
$
16,966

 
$
215