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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 6 Months Ended
Jun. 30, 2020
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, was as follows for the dates indicated:
(In thousands)
 
June 30,
2020
 
December 31,
2019
Commercial real estate
 
$
1,310,985

 
$
1,243,397

Commercial
 
411,225

 
421,108

SBA PPP
 
218,803

 
—

HPFC
 
16,961

 
21,593

Residential real estate
 
1,054,333

 
1,070,374

Home equity
 
290,815

 
312,779

Consumer
 
22,919

 
25,772

Total loans
 
$
3,326,041

 
$
3,095,023
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,
2020
 
December 31,
2019
Net unamortized fair value mark discount on acquired loans
 
$
(1,970
)
 
$
(2,593
)
Net unamortized loan (fees) origination costs(1)
 
(4,045
)
 
3,111

Total
 
$
(6,015
)
 
$
518


(1)
The change in net unamortized loan (fees) origination costs from December 31, 2019 to June 30, 2020, was primarily driven by origination fees capitalized upon origination of SBA PPP loans during the second quarter of 2020. As of June 30, 2020, unamortized loan fees on originated SBA PPP loans were $7.0 million.
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)
 
Commercial
Real Estate
 
Commercial
 
SBA PPP
 
HPFC
 
Residential
Real Estate
 
Home
Equity
 
Consumer
 
Total
At or For The Three Months Ended June 30, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

 
 

Beginning balance
 
$
13,374

 
$
4,114

 
$
—

 
$
183

 
$
5,897

 
$
2,480

 
$
473

 
$
26,521

Loans charged off
 
(21
)
 
(420
)
 
—

 
—

 
—

 
(17
)
 
(26
)
 
(484
)
Recoveries
 
3

 
63

 
—

 
—

 
21

 
—

 
15

 
102

Provision (credit)(1)
 
5,030

 
922

 
113

 
(13
)
 
2,685

 
621

 
42

 
9,400

Ending balance
 
$
18,386

 
$
4,679

 
$
113

 
$
170

 
$
8,603

 
$
3,084

 
$
504

 
$
35,539

ALL for the six months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
12,414

 
$
3,769

 
$
—

 
$
216

 
$
5,842

 
$
2,423

 
$
507

 
$
25,171

Loans charged off
 
(71
)
 
(673
)
 
—

 
—

 
(96
)
 
(51
)
 
(83
)
 
(974
)
Recoveries
 
7

 
116

 
—

 
—

 
23

 
4

 
20

 
170

Provision (credit)(1)
 
6,036

 
1,467

 
113

 
(46
)
 
2,834

 
708

 
60

 
11,172

Ending balance
 
$
18,386

 
$
4,679

 
$
113

 
$
170

 
$
8,603

 
$
3,084

 
$
504

 
$
35,539

ALL balance attributable to loans:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

 
 

Individually evaluated for impairment
 
$
35

 
$
—

 
$
—

 
$
—

 
$
338

 
$
89

 
$
—

 
$
462

Collectively evaluated for impairment
 
18,351

 
4,679

 
113

 
170

 
8,265

 
2,995

 
504

 
35,077

Total ending ALL
 
$
18,386

 
$
4,679

 
$
113

 
$
170

 
$
8,603

 
$
3,084

 
$
504

 
$
35,539

Loans:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

 
 

Individually evaluated for impairment
 
$
461

 
$
179

 
$
—

 
$
—

 
$
3,153

 
$
370

 
$
—

 
$
4,163

Collectively evaluated for impairment
 
1,310,524

 
411,046

 
218,803

 
16,961

 
1,051,180

 
290,445

 
22,919

 
3,321,878

Total ending loans balance
 
$
1,310,985

 
$
411,225

 
$
218,803

 
$
16,961

 
$
1,054,333

 
$
290,815

 
$
22,919

 
$
3,326,041

At or For The Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
11,838

 
$
3,616

 
$
—

 
$
308

 
$
6,153

 
$
3,027

 
$
259

 
$
25,201

Loans charged off
 
—

 
(217
)
 
—

 
—

 
(14
)
 
(34
)
 
(6
)
 
(271
)
Recoveries
 
3

 
49

 
—

 
—

 
2

 
—

 
4

 
58

Provision (credit)(1)
 
311

 
659

 
—

 
(28
)
 
108

 
(1
)
 
126

 
1,175

Ending balance
 
$
12,152

 
$
4,107

 
$
—

 
$
280

 
$
6,249

 
$
2,992

 
$
383

 
$
26,163

ALL for the six months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
11,654

 
$
3,620

 
$
—

 
$
337

 
$
6,071

 
$
2,796

 
$
234

 
$
24,712

Loans charged off
 
(65
)
 
(453
)
 
—

 
—

 
(25
)
 
(44
)
 
(20
)
 
(607
)
Recoveries
 
7

 
111

 
—

 
—

 
4

 
—

 
11

 
133

Provision (credit)(1)
 
556

 
829

 
—

 
(57
)
 
199

 
240

 
158

 
1,925

Ending balance
 
$
12,152

 
$
4,107

 
$
—

 
$
280

 
$
6,249

 
$
2,992

 
$
383

 
$
26,163

ALL balance attributable to loans:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

 
 

Individually evaluated for impairment
 
$
27

 
$
322

 
$
—

 
$
—

 
$
524

 
$
310

 
$
—

 
$
1,183

Collectively evaluated for impairment
 
12,125

 
3,785

 
—

 
280

 
5,725

 
2,682

 
383

 
24,980

Total ending ALL
 
$
12,152

 
$
4,107

 
$
—

 
$
280

 
$
6,249

 
$
2,992

 
$
383

 
$
26,163

Loans:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

 
 

Individually evaluated for impairment
 
$
409

 
$
675

 
$
—

 
$
—

 
$
4,472

 
$
887

 
$
—

 
$
6,443

Collectively evaluated for impairment
 
1,260,230

 
428,001

 
—

 
28,016

 
1,031,320

 
322,649

 
23,665

 
3,093,881

Total ending loans balance
 
$
1,260,639

 
$
428,676

 
$
—

 
$
28,016

 
$
1,035,792

 
$
323,536

 
$
23,665

 
$
3,100,324

(In thousands)
 
Commercial
Real Estate
 
Commercial
 
SBA PPP
 
HPFC
 
Residential
Real Estate
 
Home
Equity
 
Consumer
 
Total
At or For The Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL:
 
 

 
 

 
 
 
 
 
 

 
 

 
 

 
 

Beginning balance
 
$
11,654

 
$
3,620

 
$
—

 
$
337

 
$
6,071

 
$
2,796

 
$
234

 
$
24,712

Loans charged off
 
(300
)
 
(1,167
)
 
—

 
(71
)
 
(462
)
 
(412
)
 
(301
)
 
(2,713
)
Recoveries
 
49

 
225

 
—

 
—

 
16

 
1

 
19

 
310

Provision (credit)(1)
 
1,011

 
1,091

 
—

 
(50
)
 
217

 
38

 
555

 
2,862

Ending balance
 
$
12,414

 
$
3,769

 
$
—

 
$
216

 
$
5,842

 
$
2,423

 
$
507

 
$
25,171

ALL balance attributable to loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
30

 
$
—

 
$
—

 
$
—

 
$
364

 
$
69

 
$
—

 
$
463

Collectively evaluated for impairment
 
12,384

 
3,769

 
—

 
216

 
5,478

 
2,354

 
507

 
24,708

Total ending ALL
 
$
12,414

 
$
3,769

 
$
—

 
$
216

 
$
5,842

 
$
2,423

 
$
507

 
$
25,171

Loans:
 
  

 
  

 
 
 
 
 
  

 
  

 
  

 
  

Individually evaluated for impairment
 
$
402

 
$
319

 
$
—

 
$
—

 
$
3,384

 
$
373

 
$
—

 
$
4,478

Collectively evaluated for impairment
 
1,242,995

 
420,789

 
—

 
21,593

 
1,066,990

 
312,406

 
25,772

 
3,090,545

Total ending loans balance
 
$
1,243,397

 
$
421,108

 
$
—

 
$
21,593

 
$
1,070,374

 
$
312,779

 
$
25,772

 
$
3,095,023

(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, 2020 and 2019, and December 31, 2019, the reserve for unfunded commitments was $22,000, $14,000 and $21,000, 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,
2019
(In thousands)
 
2020
 
2019
 
2020
 
2019
 
Provision for loan losses
 
$
9,400

 
$
1,175

 
$
11,172

 
$
1,925

 
$
2,862

Change in reserve for unfunded commitments
 
(2
)
 
(2
)
 
1

 
(8
)
 
(1
)
Provision for credit losses
 
$
9,398

 
$
1,173

 
$
11,173

 
$
1,917

 
$
2,861
Credit Risk Exposure Indicators by Portfolio Segment
The following summarizes credit risk exposure indicators by portfolio segment as of the following dates:
(In thousands)
 
Commercial 
Real Estate
 
Commercial
 
SBA PPP
 
HPFC
 
Residential 
Real Estate
 
Home
Equity
 
Consumer
 
Total
June 30, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass (Grades 1-6)
 
$
1,260,532

 
$
406,475

 
$
218,803

 
$
16,111

 
$
1,046,718

 
$
—

 
$
—

 
$
2,948,639

Performing
 
—

 
—

 
—

 
—

 
—

 
288,451

 
22,914

 
311,365

Special Mention (Grade 7)
 
15,711

 
1,154

 
—

 
—

 
409

 
—

 
—

 
17,274

Substandard (Grade 8)
 
34,742

 
3,596

 
—

 
850

 
7,206

 
—

 
—

 
46,394

Non-performing
 
—

 
—

 
—

 
—

 
—

 
2,364

 
5

 
2,369

Total
 
$
1,310,985

 
$
411,225

 
$
218,803

 
$
16,961

 
$
1,054,333

 
$
290,815

 
$
22,919

 
$
3,326,041

December 31, 2019
 
 

 
 

 
 
 
 
 
 

 
 

 
 

 
 
Pass (Grades 1-6)
 
$
1,196,683

 
$
415,870

 
$
—

 
$
20,667

 
$
1,062,825

 
$
—

 
$
—

 
$
2,696,045

Performing
 
—

 
—

 
—

 
—

 
—

 
310,653

 
25,748

 
336,401

Special Mention (Grade 7)
 
31,753

 
2,544

 
—

 
89

 
473

 
—

 
—

 
34,859

Substandard (Grade 8)
 
14,961

 
2,694

 
—

 
837

 
7,076

 
—

 
—

 
25,568

Non-performing
 
—

 
—

 
—

 
—

 
—

 
2,126

 
24

 
2,150

Total
 
$
1,243,397

 
$
421,108

 
$
—

 
$
21,593

 
$
1,070,374

 
$
312,779

 
$
25,772

 
$
3,095,023
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
 
90 Days or Greater
Past Due
 
Total
Past Due
 
Current
 
Total Loans
Outstanding
 
Loans > 90
Days Past
Due and
Accruing
 
Non-Accrual
Loans
June 30, 2020
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
$
117

 
$
1,509

 
$
221

 
$
1,847

 
$
1,309,138

 
$
1,310,985

 
$
—

 
$
432

Commercial
 
4

 
91

 
657

 
752

 
410,473

 
411,225

 
—

 
699

SBA PPP
 
—

 
—

 
—

 
—

 
218,803

 
218,803

 
—

 
—

HPFC
 
127

 
1

 
321

 
449

 
16,512

 
16,961

 
—

 
392

Residential real estate
 
2,765

 
1,483

 
3,431

 
7,679

 
1,046,654

 
1,054,333

 
—

 
4,664

Home equity
 
230

 
171

 
2,051

 
2,452

 
288,363

 
290,815

 
—

 
2,366

Consumer
 
49

 
71

 
5

 
125

 
22,794

 
22,919

 
—

 
5

Total
 
$
3,292

 
$
3,326

 
$
6,686

 
$
13,304

 
$
3,312,737

 
$
3,326,041

 
$
—

 
$
8,558

December 31, 2019
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial real estate
 
$
267

 
$
1,720

 
$
544

 
$
2,531

 
$
1,240,866

 
$
1,243,397

 
$
—

 
$
1,122

Commercial
 
548

 
—

 
417

 
965

 
420,143

 
421,108

 
—

 
420

SBA PPP
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
243

 
288

 
531

 
21,062

 
21,593

 
—

 
364

Residential real estate
 
2,297

 
627

 
2,598

 
5,522

 
1,064,852

 
1,070,374

 
—

 
4,096

Home equity
 
681

 
238

 
1,459

 
2,378

 
310,401

 
312,779

 
—

 
2,130

Consumer
 
108

 
31

 
23

 
162

 
25,610

 
25,772

 
—

 
24

Total
 
$
3,901

 
$
2,859

 
$
5,329

 
$
12,089

 
$
3,082,934

 
$
3,095,023

 
$
—

 
$
8,156
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 for the dates indicated:
 
 
Number of Contracts
 
Recorded Investment
 
Specific Reserve
(In thousands, except number of contracts)
 
June 30,
2020
 
December 31,
2019
 
June 30,
2020
 
December 31,
2019
 
June 30,
2020
 
December 31,
2019
Residential real estate
 
21

 
22

 
$
2,683

 
$
2,869

 
$
338

 
$
364

Commercial real estate
 
2

 
2

 
335

 
338

 
35

 
30

Commercial
 
2

 
2

 
114

 
123

 
—

 
—

Consumer and home equity
 
1

 
1

 
299

 
299

 
89

 
69

Total
 
26

 
27

 
$
3,431

 
$
3,629

 
$
462

 
$
463
Temporary Loan Modifications
The Company's loans impacted by the COVID-19 pandemic and operating under temporary loan modifications, including both (i) the original COVID-related loan modification or (ii) a second COVID-related loan modification, upon expiration of the original COVID-related loan modification, were as follows for the dates indicated:
 
 
June 30,
2020
 
July 23,
2020
(In thousands, except number of units)
 
Units
 
Recorded Investment
 
Units
 
Recorded Investment
Original Loan Modification:
 
 
 
 
 
 
 
 
Commercial
 
992

 
$
410,298

 
544

 
$
242,272

Retail
 
489

 
101,373

 
188

 
40,627

Total
 
1,481

 
511,671

 
732

 
282,899

Second Loan Modification:
 
 
 
 
 
 
 
 
Commercial
 
31

 
5,308

 
57

 
15,041

Retail
 
251

 
29,743

 
412

 
53,039

Total
 
282

 
35,051

 
469

 
68,080

Total
 
1,763

 
$
546,722

 
1,201

 
$
350,979
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(1)
 
Average
Recorded
Investment
 
Interest
Income
Recognized
June 30, 2020:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial real estate
 
$
127

 
$
127

 
$
35

 
$
128

 
$
3

 
$
128

 
$
4

Commercial
 
—

 
—

 
—

 
—

 
—

 
—

 
—

SBA PPP
 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
2,304

 
2,304

 
338

 
2,262

 
22

 
2,306

 
46

Home equity
 
318

 
318

 
89

 
318

 
—

 
318

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
 
2,749

 
2,749

 
462

 
2,708

 
25

 
2,752

 
50

Without an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial real estate
 
334

 
514

 
—

 
303

 
3

 
293

 
6

Commercial
 
179

 
242

 
—

 
239

 
1

 
266

 
3

SBA PPP
 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
849

 
972

 
—

 
957

 
(1
)
 
968

 
2

Home equity
 
52

 
189

 
—

 
52

 
—

 
53

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
 
1,414

 
1,917

 
—

 
1,551

 
3

 
1,580

 
11

Total impaired loans
 
$
4,163

 
$
4,666

 
$
462

 
$
4,259

 
$
28

 
$
4,332

 
$
61

June 30, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial real estate
 
$
131

 
$
131

 
$
27

 
$
131

 
$
5

 
$
131

 
$
6

Commercial
 
461

 
461

 
322

 
230

 
—

 
339

 
—

SBA PPP
 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
3,286

 
3,286

 
524

 
3,370

 
26

 
3,404

 
56

Home equity
 
828

 
828

 
310

 
828

 
—

 
658

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending Balance
 
4,706

 
4,706

 
1,183

 
4,559

 
31

 
4,532

 
62

Without an allowance recorded:
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Commercial real estate
 
278

 
437

 
—

 
278

 
4

 
452

 
7

Commercial
 
214

 
278

 
—

 
219

 
2

 
222

 
4

SBA PPP
 
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Residential real estate
 
1,186

 
1,310

 
—

 
1,234

 
7

 
1,253

 
17

Home equity
 
59

 
197

 
—

 
63

 
—

 
84

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

 
2

 
—

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

(1)
Negative interest income represents the re-allocation of income between "with an allowance recorded" and "without an allowance recorded" (or vice versa) during the period.

 
 
 
 
 
 
 
 
For the
Year Ended
(In thousands)
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
December 31, 2019:
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 

 
 

 
 

 
 

Commercial real estate
 
$
128

 
$
128

 
$
30

 
$
130

 
$
11

Commercial
 
—

 
—

 
—

 
292

 
—

SBA PPP
 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

Residential real estate
 
2,395

 
2,395

 
364

 
2,989

 
110

Home equity
 
318

 
318

 
69

 
522

 
—

Consumer
 
—

 
—

 
—

 
—

 
—

Ending Balance
 
2,841

 
2,841

 
463

 
3,933

 
121

Without an allowance recorded:
 
  

 
  

 
  

 
  

 
  

Commercial real estate
 
274

 
433

 
—

 
381

 
13

Commercial
 
319

 
685

 
—

 
238

 
7

SBA PPP
 
—

 
—

 
—

 
—

 
—

HPFC
 
—

 
—

 
—

 
—

 
—

Residential real estate
 
989

 
1,116

 
—

 
1,258

 
21

Home equity
 
55

 
192

 
—

 
115

 
—

Consumer
 
—

 
—

 
—

 
1

 
—

Ending Balance
 
1,637

 
2,426

 
—

 
1,993

 
41

Total impaired loans
 
$
4,478

 
$
5,267

 
$
463

 
$
5,926

 
$
162