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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 6 Months Ended
Jun. 30, 2019
Financing Receivable, Modifications [Line Items]  
Troubled Debt Restructurings on Financing Receivables [Table Text Block]
The following represents loan modifications that qualify as TDRs that occurred for the three and six months ended June 30, 2019 and 2018:
(In thousands, except number of contracts)
 
Number of Contracts
 
Pre-Modification
Outstanding
Recorded Investment
 
Post-Modification
Outstanding
Recorded Investment
 
Specific Reserve
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
For the three and six months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
—

 
1

 
$
—

 
$
163

 
$
—

 
$
186

 
$
—

 
$
39

Total
 
—

 
1

 
$
—

 
$
163

 
$
—

 
$
186

 
$
—

 
$
39
Composition of Loan Portfolio, Excluding Residential Loans Held for Sale
The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:
(In thousands)
 
June 30,
2019
 
December 31,
2018
Residential real estate
 
$
1,035,792

 
$
992,866

Commercial real estate
 
1,260,639

 
1,269,533

Commercial
 
428,676

 
381,780

Home equity
 
323,536

 
327,763

Consumer
 
23,665

 
20,624

HPFC
 
28,016

 
33,656

Total loans
 
$
3,100,324

 
$
3,026,222
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 for the dates indicated:
(In thousands)
 
June 30,
2019
 
December 31,
2018
Net unamortized fair value mark discount on acquired loans
 
$
3,240

 
$
3,936

Net unamortized loan origination costs
 
(2,586
)
 
(1,865
)
Total
 
$
654

 
$
2,071
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 periods indicated:
(In thousands)
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Three and Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
6,153

 
$
11,838

 
$
3,616

 
$
3,027

 
$
259

 
$
308

 
$
25,201

Loans charged off
 
(14
)
 
—

 
(217
)
 
(34
)
 
(6
)
 
—

 
(271
)
Recoveries
 
2

 
3

 
49

 
—

 
4

 
—

 
58

Provision (credit)(1)
 
108

 
311

 
659

 
(1
)
 
126

 
(28
)
 
1,175

Ending balance
 
$
6,249

 
$
12,152

 
$
4,107

 
$
2,992

 
$
383

 
$
280

 
$
26,163

ALL for the six months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
6,071

 
$
11,654

 
$
3,620

 
$
2,796

 
$
234

 
$
337

 
$
24,712

Loans charged off
 
(25
)
 
(65
)
 
(453
)
 
(44
)
 
(20
)
 
—

 
(607
)
Recoveries
 
4

 
7

 
111

 
—

 
11

 
—

 
133

Provision (credit)(1)
 
199

 
556

 
829

 
240

 
158

 
(57
)
 
1,925

Ending balance
 
$
6,249

 
$
12,152

 
$
4,107

 
$
2,992

 
$
383

 
$
280

 
$
26,163

ALL balance attributable to loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
524

 
$
27

 
$
322

 
$
310

 
$
—

 
$
—

 
$
1,183

Collectively evaluated for impairment
 
5,725

 
12,125

 
3,785

 
2,682

 
383

 
280

 
24,980

Total ending ALL
 
$
6,249

 
$
12,152

 
$
4,107

 
$
2,992

 
$
383

 
$
280

 
$
26,163

Loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
4,472

 
$
409

 
$
675

 
$
887

 
$
—

 
$
—

 
$
6,443

Collectively evaluated for impairment
 
1,031,320

 
1,260,230

 
428,001

 
322,649

 
23,665

 
28,016

 
3,093,881

Total ending loans balance
 
$
1,035,792

 
$
1,260,639

 
$
428,676

 
$
323,536

 
$
23,665

 
$
28,016

 
$
3,100,324

For The Three and Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
5,497

 
$
10,286

 
$
4,126

 
$
2,427

 
$
230

 
$
424

 
$
22,990

Loans charged off
 
(85
)
 
(86
)
 
(127
)
 
(75
)
 
(16
)
 
—

 
(389
)
Recoveries
 
15

 
2

 
57

 
1

 
2

 
—

 
77

Provision (credit)(1)
 
352

 
108

 
247

 
263

 
44

 
(24
)
 
990

Ending balance
 
$
5,779

 
$
10,310

 
$
4,303

 
$
2,616

 
$
260

 
$
400

 
$
23,668

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

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

Loans charged off
 
(116
)
 
(512
)
 
(298
)
 
(224
)
 
(42
)
 
—

 
(1,192
)
Recoveries
 
15

 
15

 
120

 
44

 
5

 
—

 
199

Provision(1)
 
794

 
(1,056
)
 
310

 
429

 
64

 
(51
)
 
490

Ending balance
 
$
5,779

 
$
10,310

 
$
4,303

 
$
2,616

 
$
260

 
$
400

 
$
23,668

ALL balance attributable to loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
585

 
$
23

 
$
—

 
$
226

 
$
—

 
$
—

 
$
834

Collectively evaluated for impairment
 
5,194

 
10,287

 
4,303

 
2,390

 
260

 
400

 
22,834

Total ending ALL
 
$
5,779

 
$
10,310

 
$
4,303

 
$
2,616

 
$
260

 
$
400

 
$
23,668

Loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
5,400

 
$
5,093

 
$
1,611

 
$
487

 
$
—

 
$
—

 
$
12,591

Collectively evaluated for impairment
 
902,510

 
1,184,959

 
384,782

 
323,184

 
19,506

 
39,997

 
2,854,938

Total ending loans balance
 
$
907,910

 
$
1,190,052

 
$
386,393

 
$
323,671

 
$
19,506

 
$
39,997

 
$
2,867,529

(In thousands)
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Year Ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
5,086

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

Loans charged off
 
(173
)
 
(512
)
 
(736
)
 
(476
)
 
(96
)
 
(255
)
 
(2,248
)
Recoveries
 
90

 
28

 
1,770

 
44

 
11

 
1

 
1,944

Provision (credit)(1)
 
1,068

 
275

 
(1,585
)
 
861

 
86

 
140

 
845

Ending balance
 
$
6,071

 
$
11,654

 
$
3,620

 
$
2,796

 
$
234

 
$
337

 
$
24,712

ALL balance attributable to loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
586

 
$
23

 
$
53

 
$
162

 
$
—

 
$
—

 
$
824

Collectively evaluated for impairment
 
5,485

 
11,631

 
3,567

 
2,634

 
234

 
337

 
23,888

Total ending ALL
 
$
6,071

 
$
11,654

 
$
3,620

 
$
2,796

 
$
234

 
$
337

 
$
24,712

Loans:
 
  

 
  

 
  

 
  

 
  

 
 
 
  

Individually evaluated for impairment
 
$
4,762

 
$
930

 
$
786

 
$
442

 
$
6

 
$
—

 
$
6,926

Collectively evaluated for impairment
 
988,104

 
1,268,603

 
380,994

 
327,321

 
20,618

 
33,656

 
3,019,296

Total ending loans balance
 
$
992,866

 
$
1,269,533

 
$
381,780

 
$
327,763

 
$
20,624

 
$
33,656

 
$
3,026,222


(1)
The provision (credit) 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 June 30, 2019 and 2018, and December 31, 2018, the reserve for unfunded commitments was $14,000, $16,000 and $22,000, respectively.
Schedule of Provision for Credit Losses
The following reconciles the provision for loan losses to the provision for credit losses as presented on the consolidated statements of income for the periods indicated:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
Year Ended December 31,
2018
(In thousands)
 
2019
 
2018
 
2019
 
2018
 
Provision for loan losses
 
$
1,175

 
$
990

 
$
1,925

 
$
490

 
$
845

Change in reserve for unfunded commitments
 
(2
)
 
(7
)
 
(8
)
 
(4
)
 
2

Provision for credit losses
 
$
1,173

 
$
983

 
$
1,917

 
$
486

 
$
847
Credit Risk Exposure Indicators by Portfolio Segment
The following summarizes credit risk exposure indicators by portfolio segment as of the following dates:
(In thousands)
 
Residential 
Real Estate
 
Commercial 
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass (Grades 1-6)
 
$
1,026,460

 
$
1,229,524

 
$
423,281

 
$
—

 
$
—

 
$
26,758

 
$
2,706,023

Performing
 
—

 
—

 
—

 
320,866

 
23,284

 
—

 
344,150

Special Mention (Grade 7)
 
482

 
15,072

 
2,051

 
—

 
—

 
98

 
17,703

Substandard (Grade 8)
 
8,850

 
16,043

 
3,344

 
—

 
—

 
1,160

 
29,397

Non-performing
 
—

 
—

 
—

 
2,670

 
381

 
—

 
3,051

Total
 
$
1,035,792

 
$
1,260,639

 
$
428,676

 
$
323,536

 
$
23,665

 
$
28,016

 
$
3,100,324

December 31, 2018
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Pass (Grades 1-6)
 
$
983,086

 
$
1,247,190

 
$
374,429

 
$
—

 
$
—

 
$
32,261

 
$
2,636,966

Performing
 
—

 
—

 
—

 
325,917

 
20,595

 
—

 
346,512

Special Mention (Grade 7)
 
887

 
7,921

 
3,688

 
—

 
—

 
123

 
12,619

Substandard (Grade 8)
 
8,893

 
14,422

 
3,663

 
—

 
—

 
1,272

 
28,250

Non-performing
 
—

 
—

 
—

 
1,846

 
29

 
—

 
1,875

Total
 
$
992,866

 
$
1,269,533

 
$
381,780

 
$
327,763

 
$
20,624

 
$
33,656

 
$
3,026,222
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:
(In thousands)
 
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
June 30, 2019
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
 
$
1,530

 
$
1,396

 
$
4,301

 
$
7,227

 
$
1,028,565

 
$
1,035,792

 
$
—

 
$
5,566

Commercial real estate
 
2,194

 
2,126

 
423

 
4,743

 
1,255,896

 
1,260,639

 
—

 
1,590

Commercial
 
1,380

 
20

 
768

 
2,168

 
426,508

 
428,676

 
—

 
785

Home equity
 
777

 
153

 
2,277

 
3,207

 
320,329

 
323,536

 
—

 
2,672

Consumer
 
57

 
14

 
367

 
438

 
23,227

 
23,665

 
14

 
367

HPFC
 
—

 
171

 
381

 
552

 
27,464

 
28,016

 
—

 
465

Total
 
$
5,938

 
$
3,880

 
$
8,517

 
$
18,335

 
$
3,081,989

 
$
3,100,324

 
$
14

 
$
11,445

December 31, 2018
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
 
$
3,300

 
$
2,046

 
$
4,520

 
$
9,866

 
$
983,000

 
$
992,866

 
$
—

 
$
5,492

Commercial real estate
 
1,794

 
369

 
1,108

 
3,271

 
1,266,262

 
1,269,533

 
—

 
1,380

Commercial
 
150

 
19

 
799

 
968

 
380,812

 
381,780

 
—

 
1,279

Home equity
 
907

 
607

 
1,476

 
2,990

 
324,773

 
327,763

 
—

 
1,846

Consumer
 
67

 
15

 
29

 
111

 
20,513

 
20,624

 
14

 
15

HPFC
 
—

 
183

 
423

 
606

 
33,050

 
33,656

 
—

 
518

Total
 
$
6,218

 
$
3,239

 
$
8,355

 
$
17,812

 
$
3,008,410

 
$
3,026,222

 
$
14

 
$
10,530
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
(In thousands, except number of contracts)
 
June 30, 2019
 
December 31, 2018
 
June 30, 2019
 
December 31, 2018
 
June 30, 2019
 
December 31, 2018
Residential real estate
 
22

 
25

 
$
3,342

 
$
3,614

 
$
381

 
$
443

Commercial real estate
 
2

 
2

 
343

 
347

 
27

 
23

Commercial
 
2

 
2

 
133

 
141

 
—

 
—

Home equity
 
1

 
2

 
299

 
304

 
125

 
162

Total
 
27

 
31

 
$
4,117

 
$
4,406

 
$
533

 
$
628
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 periods indicated:
 
 
 
 
 
 
 
 
For the
Three Months Ended
 
For the
Six Months Ended
(In thousands)
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
June 30, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
 
$
3,286

 
$
3,286

 
$
524

 
$
3,370

 
$
26

 
$
3,404

 
$
56

Commercial real estate
 
131

 
131

 
27

 
131

 
5

 
131

 
6

Commercial
 
461

 
461

 
322

 
230

 
—

 
339

 
—

Home equity
 
828

 
828

 
310

 
828

 
—

 
658

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
 
4,706

 
4,706

 
1,183

 
4,559

 
31

 
4,532

 
62

Without an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
 
1,186

 
1,310

 
—

 
1,234

 
7

 
1,253

 
17

Commercial real estate
 
278

 
437

 
—

 
278

 
4

 
452

 
7

Commercial
 
214

 
278

 
—

 
219

 
2

 
222

 
4

Home equity
 
59

 
197

 
—

 
63

 
—

 
84

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
2

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
 
1,737

 
2,222

 
—

 
1,794

 
13

 
2,013

 
28

Total impaired loans
 
$
6,443

 
$
6,928

 
$
1,183

 
$
6,353

 
$
44

 
$
6,545

 
$
90

June 30, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
 
$
3,506

 
$
3,506

 
$
585

 
$
3,525

 
$
39

 
$
3,636

 
$
69

Commercial real estate
 
351

 
351

 
23

 
1,971

 
10

 
3,121

 
11

Commercial
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Home equity
 
465

 
465

 
226

 
306

 
—

 
204

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending Balance
 
4,322

 
4,322

 
834

 
5,802

 
49

 
6,961

 
80

Without an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
 
1,894

 
2,200

 
—

 
1,704

 
7

 
1,574

 
14

Commercial real estate
 
4,742

 
5,080

 
—

 
2,556

 
(3
)
 
1,963

 
—

Commercial
 
1,611

 
2,785

 
—

 
1,663

 
2

 
1,705

 
4

Home equity
 
22

 
61

 
—

 
183

 
(2
)
 
265

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending Balance
 
8,269

 
10,126

 
—

 
6,106

 
4

 
5,507

 
18

Total impaired loans
 
$
12,591

 
$
14,448

 
$
834

 
$
11,908

 
$
53

 
$
12,468

 
$
98



 
 
 
 
 
 
 
 
For the
Year Ended
(In thousands)
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
December 31, 2018:
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 

 
 

 
 

 
 

Residential real estate
 
$
3,471

 
$
3,471

 
$
586

 
$
3,591

 
$
127

Commercial real estate
 
131

 
131

 
23

 
1,969

 
11

Commercial
 
556

 
556

 
53

 
111

 
—

Home equity
 
318

 
318

 
162

 
250

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

Ending Balance
 
4,476

 
4,476

 
824

 
5,921

 
138

Without an allowance recorded:
 
  

 
  

 
  

 
  

 
  

Residential real estate
 
1,291

 
1,415

 
—

 
1,524

 
34

Commercial real estate
 
799

 
975

 
—

 
2,269

 
13

Commercial
 
230

 
293

 
—

 
1,379

 
8

Home equity
 
124

 
305

 
—

 
195

 
—

Consumer
 
6

 
13

 
—

 
1

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

Ending Balance
 
2,450

 
3,001

 
—

 
5,368

 
55

Total impaired loans
 
$
6,926

 
$
7,477

 
$
824

 
$
11,289

 
$
193