Loans, Allowance for Credit Losses and Credit Quality (Notes)

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Loans, Allowance for Credit Losses and Credit Quality [Text Block]

LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

Loans Held for Investment and Allowance for Credit Losses

The following table summarizes the change in allowance for credit losses by loan category, and bifurcates the amount of loans allocated to each loan category for the period indicated:

	Three Months Ended June 30, 2022
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home  Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	14,169	$	84,436	$	11,867	$	3,159	$	18,388	$	11,750	$	749	$	144,518
Charge-offs	—		—		—		(11)		—		(98)		(435)		(544)
Recoveries	29		—		—		33		—		14		269		345
(Release of) provision for credit losses	(91)		(980)		(157)		(397)		1,362		74		189		—
Ending balance (1)	$	14,107	$	83,456	$	11,710	$	2,784	$	19,750	$	11,740	$	772	$	144,319
	Three Months Ended June 30, 2021
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home  Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	20,207	$	44,348	$	5,268	$	3,621	$	12,956	$	20,716	$	433	$	107,549
Charge-offs	(142)		—		—		(35)		—		(69)		(235)		(481)
Recoveries	35		—		—		4		—		45		205		289
(Release of) provision for credit losses	(3,068)		(23)		(403)		22		(942)		(605)		19		(5,000)
Ending balance (1)	$	17,032	$	44,325	$	4,865	$	3,612	$	12,014	$	20,087	$	422	$	102,357
	Six Months Ended June 30, 2022
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home  Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	14,402	$	83,486	$	12,316	$	3,508	$	14,484	$	17,986	$	740	$	146,922
Charge-offs	—		—		—		(59)		—		(122)		(1,069)		(1,250)
Recoveries	42		3		—		59		—		40		503		647
(Release of) provision for credit losses	(337)		(33)		(606)		(724)		5,266		(6,164)		598		(2,000)
Ending balance (1)	$	14,107	$	83,456	$	11,710	$	2,784	$	19,750	$	11,740	$	772	$	144,319
	Six Months Ended June 30, 2021
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home  Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	21,086	$	45,009	$	5,397	$	5,095	$	14,275	$	22,060	$	470	$	113,392
Charge-offs	(3,473)		—		—		(101)		—		(69)		(524)		(4,167)
Recoveries	99		57		—		15		1		58		402		632
(Release of) provision for credit losses	(680)		(741)		(532)		(1,397)		(2,262)		(1,962)		74		(7,500)
Ending balance (1)	$	17,032	$	44,325	$	4,865	$	3,612	$	12,014	$	20,087	$	422	$	102,357

(1)Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $39.0 million and $29.9 million as of June 30, 2022 and June 30, 2021, respectively.

The balance of allowance for credit losses of $144.3 million as of June 30, 2022 represents a decrease of $2.6 million, or 1.8%, compared to December 31, 2021. The decrease in the allowance was primarily driven by a release of the provision for credit losses of $2.0 million recorded during the first quarter of 2022, reflecting a stabilized credit quality environment and continued strong asset quality metrics and attrition experienced during the second quarter of 2022, which were offset by increased reserves on individually evaluated loans and net loan growth, resulting in a zero provision recorded for the three months ended June 30, 2022.

For the purpose of estimating the allowance for credit losses, management segregated the loan portfolio into the portfolio segments detailed in the above tables.  Each of these loan categories possesses unique risk characteristics that are considered when determining the appropriate level of allowance for each segment.  Some of the characteristics unique to each loan category include:

Commercial Portfolio

•Commercial and Industrial: Loans in this category consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment.  Collateral generally consists of pledges of business assets including, but not limited to: accounts receivable, inventory, plant and equipment, or real estate, if applicable. Repayment sources consist of primarily, operating cash flow, and secondarily, liquidation of assets.

•Commercial Real Estate: Loans in this category consist of mortgage loans to finance investment in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties.  Loans are typically written with amortizing payment structures.  Collateral values are determined based upon third party appraisals and evaluations.  Loan to value ratios at origination are governed by established policy and regulatory guidelines. Repayment sources consist of, primarily, cash flow from operating leases and rents and, secondarily, liquidation of assets.

•Commercial Construction: Loans in this category consist of short-term construction loans, revolving and nonrevolving credit lines and construction/permanent loans to finance the acquisition, development and construction or rehabilitation of real property.  Project types include residential land development, one-to-four family, condominium, and multi-family home construction, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties.  Loans may be written with nonamortizing or hybrid payment structures depending upon the type of project.  Collateral values are determined based upon third party appraisals and evaluations.  Loan to value ratios at origination are governed by established policy and regulatory guidelines.  Repayment sources vary depending upon the type of project and may consist of sale or lease of units, operating cash flows or liquidation of other assets.

•Small Business: Loans in this category consist of revolving, term loan and mortgage obligations extended to sole proprietors and small businesses for purposes of financing working capital and/or capital investment.  Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, or real estate if applicable.  Repayment sources consist primarily of operating cash flows and, secondarily, liquidation of assets.

For the commercial portfolio it is the Company’s policy to obtain personal guarantees for payment from individuals holding material ownership interests in the borrowing entities.

Consumer Portfolio

•Residential Real Estate: Residential mortgage loans held in the Company’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral.  Collateral consists of mortgage liens on one-to-four family residential properties.  Residential mortgage loans also include loans to construct owner-occupied one-to-four family residential properties.

•Home Equity: Home equity loans and credit lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on owner-occupied one-to-four family homes, condominiums or vacation homes. Each home equity loan has a fixed rate and is billed in equal payments comprised of principal and interest. The majority of home equity lines of credit have a variable rate and are billed in interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the then outstanding principal balance plus all accrued interest over a predetermined repayment period, as set forth in the note. Additionally, the Company has the option of renewing each line of credit for additional draw periods.  Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established policy guidelines.

•Other Consumer: Other consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as debt consolidation, personal expenses or overdraft protection.  Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines.  These loans may be secured or unsecured.

Credit Quality

The Company continually monitors the asset quality of the loan portfolio using all available information. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as adversely risk-rated, delinquent, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to restructure the contractual terms of certain loans to match the borrower’s ability to repay the loan based on their current financial condition.

The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For the commercial portfolio, the Company utilizes a 10-point credit risk-rating system, which assigns a risk-grade to each loan obligation based on a number of quantitative and qualitative factors associated with a commercial or small business loan transaction. Factors considered include industry and market conditions, position within the industry, earnings trends, operating cash flow, asset/liability values, debt capacity, guarantor strength, management and controls, financial reporting, collateral, and other considerations. The risk-rating categories for the commercial portfolio are defined as follows:

•Pass: Risk-rating “1” through “6” comprises of loans ranging from ‘Substantially Risk Free’ which indicates borrowers are of unquestioned credit standing and the pinnacle of credit quality, well established companies with a very strong financial condition, and loans fully secured by cash collateral, through ‘Acceptable Risk’, which indicates borrowers may exhibit declining earnings, strained cash flow, increasing or above average leverage and/or weakening market fundamentals that indicate below average asset quality, margins and market share. Collateral coverage is protective.

•Potential Weakness: Borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Company’s asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.

•Definite Weakness Loss Unlikely: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Loans may be inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. However, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.

•Partial Loss Probable: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.

•Definite Loss: Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.

The Company utilizes a comprehensive, continuous strategy for evaluating and monitoring commercial credit quality. Initially, credit quality is determined at loan origination and is re-evaluated when subsequent actions, such as renewals, modifications or reviews, occur. Actively managed commercial borrowers are required to provide updated financial information at least annually which is carefully evaluated for any changes in credit quality. Larger loan relationships are subject to a full annual credit review by experienced credit professionals, while continuous portfolio monitoring techniques are employed to evaluate changes in credit quality for smaller loan relationships. Any changes in credit quality are reflected in risk-rating changes. Additionally, the Company retains an independent loan review firm to evaluate the credit quality of the commercial loan portfolio. The independent loan review process achieves significant penetration into the commercial loan portfolio and reports the results of these reviews to the Audit Committee of the Board of Directors on a quarterly basis. Commercial loan modifications granted by the Company allowing payment deferrals for qualifying borrowers in accordance with the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") were assessed for potential downgrades of risk ratings.

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. As a result, for this portfolio the Company utilizes a pass/default risk-rating system, based on an age

analysis (i.e., days past due) associated with each consumer loan. Under this structure, consumer loans less than 90 days past due are assigned a "pass" rating, while any consumer loans 90 days or more past due are assigned a "default" rating.

The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of the dates indicated below:

	June 30, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass (2)	$	220,435	$	188,007	$	136,331	$	79,699	$	98,598	$	26,321	$	751,261	$	—	$	1,500,652
Potential weakness	221		1,022		1,054		872		84		1,017		4,229		—		8,499
Definite weakness - loss unlikely	354		1,283		—		44		407		2,645		27,162		—		31,895
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	221,010	$	190,312	$	137,385	$	80,615	$	99,089	$	29,983	$	782,652	$	—	$	1,541,046
Commercial real estate
Pass	$	543,108	$	1,488,142	$	1,306,131	$	874,026	$	781,208	$	2,122,989	$	131,883	$	516	$	7,248,003
Potential weakness	40,003		63,294		53,347		5,996		68,671		197,553		13,620		2,578		445,062
Definite weakness - loss unlikely	1,113		8,181		4,263		2,904		14,822		67,409		—		—		98,692
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	584,224	$	1,559,617	$	1,363,741	$	882,926	$	864,701	$	2,387,951	$	145,503	$	3,094	$	7,791,757
Commercial construction
Pass	$	362,544	$	369,399	$	269,581	$	65,520	$	28,097	$	11,420	$	33,583	$	3	$	1,140,147
Potential weakness	13,054		—		3,319		—		—		21,304		—		—		37,677
Definite weakness - loss unlikely	—		16,753		—		—		—		—		—		—		16,753
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	375,598	$	386,152	$	272,900	$	65,520	$	28,097	$	32,724	$	33,583	$	3	$	1,194,577
Small business
Pass	$	30,065	$	48,840	$	33,910	$	18,528	$	10,999	$	22,481	$	37,755	$	—	$	202,578
Potential weakness	—		173		415		373		195		141		707		—		2,004
Definite weakness - loss unlikely	103		—		551		13		4		230		470		—		1,371
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total small business	$	30,168	$	49,013	$	34,876	$	18,914	$	11,198	$	22,852	$	38,932	$	—	$	205,953
Residential real estate
Pass	$	396,321	$	432,105	$	200,912	$	99,019	$	102,471	$	610,183	$	—	$	—	$	1,841,011
Default	—		—		123		—		974		1,949		—		—		3,046
Total residential real estate	$	396,321	$	432,105	$	201,035	$	99,019	$	103,445	$	612,132	$	—	$	—	$	1,844,057
Home equity
Pass	$	28,727	$	63,208	$	58,488	$	33,501	$	30,145	$	130,197	$	717,115	$	2,559	$	1,063,940
Default	—		—		—		122		—		292		1,156		—		1,570
Total home equity	$	28,727	$	63,208	$	58,488	$	33,623	$	30,145	$	130,489	$	718,271	$	2,559	$	1,065,510
Other consumer
Pass	$	379	$	2,862	$	2,317	$	1,671	$	576	$	4,350	$	20,697	$	—	$	32,852
Default	—		—		—		—		—		12		—		—		12
Total other consumer	$	379	$	2,862	$	2,317	$	1,671	$	576	$	4,362	$	20,697	$	—	$	32,864
Total	$	1,636,427	$	2,683,269	$	2,070,742	$	1,182,288	$	1,137,251	$	3,220,493	$	1,739,638	$	5,656	$	13,675,764

	June 30, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass (2)	$	552,640	$	296,008	$	113,698	$	83,243	$	18,357	$	20,908	$	577,872	$	—	$	1,662,726
Potential weakness	4,726		11,553		3,292		1,772		1,141		2,531		8,596		—		33,611
Definite weakness - loss unlikely	18,026		338		1,023		1,105		2,714		244		6,711		—		30,161
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	575,392	$	307,899	$	118,013	$	86,120	$	22,212	$	23,683	$	593,179	$	—	$	1,726,498
Commercial real estate
Pass	$	489,652	$	1,029,017	$	679,780	$	373,916	$	496,399	$	862,508	$	15,370	$	—	$	3,946,642
Potential weakness	15,416		29,480		54,436		32,476		18,923		86,135		13,614		—		250,480
Definite weakness - loss unlikely	9,505		22,090		3,665		2,210		9,874		7,077		—		—		54,421
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	514,573	$	1,080,587	$	737,881	$	408,602	$	525,196	$	955,720	$	28,984	$	—	$	4,251,543
Commercial construction
Pass	$	63,620	$	235,629	$	107,190	$	24,374	$	22,951	$	6,568	$	16,232	$	1,998	$	478,562
Potential weakness	—		17,560		—		—		—		—		417		—		17,977
Definite weakness - loss unlikely	—		—		—		—		—		—		—		—		—
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	63,620	$	253,189	$	107,190	$	24,374	$	22,951	$	6,568	$	16,649	$	1,998	$	496,539
Small business
Pass	$	29,131	$	40,220	$	23,870	$	16,104	$	11,712	$	25,050	$	33,588	$	—	$	179,675
Potential weakness	15		—		386		202		8		188		655		—		1,454
Definite weakness - loss unlikely	—		657		44		45		11		289		688		—		1,734
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total small business	$	29,146	$	40,877	$	24,300	$	16,351	$	11,731	$	25,527	$	34,931	$	—	$	182,863
Residential real estate
Pass	$	214,476	$	201,684	$	103,045	$	109,323	$	111,755	$	496,981	$	—	$	—	$	1,237,264
Default	—		—		—		414		—		2,601		—		—		3,015
Total residential real estate	$	214,476	$	201,684	$	103,045	$	109,737	$	111,755	$	499,582	$	—	$	—	$	1,240,279
Home equity
Pass	$	46,378	$	72,942	$	45,918	$	41,749	$	45,468	$	127,241	$	633,065	$	3,962	$	1,016,723
Default	—		—		—		—		—		34		1,651		—		1,685
Total home equity	$	46,378	$	72,942	$	45,918	$	41,749	$	45,468	$	127,275	$	634,716	$	3,962	$	1,018,408
Other consumer
Pass	$	281	$	400	$	304	$	108	$	571	$	6,179	$	15,015	$	—	$	22,858
Default	—		—		—		—		—		—		—		—		—
Total other consumer	$	281	$	400	$	304	$	108	$	571	$	6,179	$	15,015	$	—	$	22,858

Total $ 1,443,866  $ 1,957,578  $ 1,136,651  $ 687,041  $ 739,884  $ 1,644,534  $ 1,323,474  $ 5,960  $ 8,938,988 

(1)Loan origination dates in the tables above reflect the original origination date, or the date of a material modification of a previously originated loan.

(2)Loans originated as part of the Paycheck Protection Program ("PPP") established by the CARES Act are included within commercial and industrial under the 2021 and 2020 vintage year and "pass" category as these loans are 100% guaranteed by the U.S. Government. Outstanding PPP loans totaled $30.6 million and $482.7 million as of June 30, 2022 and 2021, respectively.

    For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. However, the Company does supplement performance data with current Fair Isaac Corporation (“FICO”) scores and Loan to Value (“LTV”) estimates. Current FICO data is purchased and appended to all consumer loans on a regular basis. In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential real estate and home equity portfolios, periodically. The following table shows the weighted average FICO scores and the weighted average combined LTV ratios at the dates indicated below:

	June 30 2022		December 31 2021
Residential real estate portfolio
FICO score (re-scored)(1)	752		749
LTV (re-valued)(2)	55.2	%	54.4	%
Home equity portfolio
FICO score (re-scored)(1)	771		772
LTV (re-valued)(2)(3)	41.4	%	42.4	%

(1)The average FICO scores at June 30, 2022 are based upon rescores from June 2022, as available for previously originated loans, or origination score data for loans booked in June 2022.  The average FICO scores at December 31, 2021 were based upon rescores available from December 2021, as available for previously originated loans, or origination score data for loans booked in December 2021.

(2)The combined LTV ratios for June 30, 2022 are based upon updated automated valuations as of May 2022, when available, and/or the most current valuation data available.  The combined LTV ratios for December 31, 2021 were based upon updated automated valuations as of November 2021, when available, and/or the most current valuation data available as of such date.  The updated automated valuations provide new information on loans that may be available since the previous valuation was obtained.  If no new information is available, the valuation will default to the previously obtained data or most recent appraisal.

(3)For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.

Unfunded Commitments

Management evaluates the need for a reserve on unfunded lending commitments in a manner consistent with loans held for investment. At June 30, 2022 and December 31, 2021, the Company's estimated reserve for unfunded commitments amounted to $1.3 million and $1.5 million, respectively.

Asset Quality

The Company’s philosophy toward managing its loan portfolios is predicated upon careful monitoring, which stresses early detection and response to delinquent and default situations. Delinquent loans are managed by a team of collection specialists and the Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame.  As a general rule, loans 90 days or more past due with respect to principal or interest are classified as nonaccrual loans. The Company also may use discretion regarding other loans 90 days or more delinquent if the loan is well secured and/or in process of collection.

In response to the COVID-19 pandemic, the Company has granted loan modifications to allow deferral of payments for borrowers negatively impacted by the pandemic. The balance of loans with active deferrals as of June 30, 2022 and December 31, 2021 was $197.4 million and $383.1 million, respectively. The majority of these loans with active deferrals as of June 30, 2022 continue to be characterized as current loans. In accordance with regulatory guidance, these modifications are not considered to be troubled debt restructures ("TDRs") if they were performing as of December 31, 2019. Additionally, a majority of these modified loans are characterized as current and therefore are not impacting nonaccrual or delinquency totals as of June 30, 2022 and December 31, 2021. The Company does, however, consider all active deferrals when estimating loss reserves. As loans reach their deferral maturity date, consideration of TDR and delinquency status will resume in accordance with the Company's accounting policy.

The following table shows information regarding nonaccrual loans as of the dates indicated:

	Nonaccrual Balances
	June 30, 2022						December 31, 2021
	With Allowance for Credit Losses		Without Allowance for Credit Losses		Total		With Allowance for Credit Losses		Without Allowance for Credit Losses		Total
	(Dollars in thousands)
Commercial and industrial	$	3,465	$	53	$	3,518	$	3,420	$	19	$	3,439
Commercial real estate	16,008		24,066		40,074		10,870		—		10,870
Small business	31		—		31		44		—		44
Residential real estate	7,980		583		8,563		8,580		602		9,182
Home equity	3,514		—		3,514		3,781		—		3,781
Other consumer	215		—		215		504		—		504
Total nonaccrual loans (1)	$	31,213	$	24,702	$	55,915	$	27,199	$	621	$	27,820

(1)Included in these amounts were $1.7 million and $2.0 million of nonaccruing TDRs at June 30, 2022 and December 31, 2021, respectively.

It is the Company's policy to reverse any accrued interest when a loan is put on nonaccrual status, and, as such, the Company did not record any interest income on nonaccrual loans during the six months ended June 30, 2022 and 2021.

The following table shows information regarding foreclosed residential real estate property at the dates indicated:

	June 30, 2022		December 31, 2021
	(Dollars in thousands)
Foreclosed residential real estate property held by the creditor	$	—	$	—
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure	$	2,080	$	1,426

The following tables show the age analysis of past due financing receivables as of the dates indicated:

	June 30, 2022
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables		Amortized Cost >90 Days and  Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	6	$	442	1	$	188	4	$	3,405	11	$	4,035	$	1,537,011	$	1,541,046	$	—
Commercial real estate	5	881		2	24,066		6	15,067		13	40,014		7,751,743		7,791,757		—
Commercial construction	—	—		1	1,669		—	—		1	1,669		1,192,908		1,194,577		—
Small business	3	100		1	5		5	30		9	135		205,818		205,953		—
Residential real estate	14	2,542		3	470		21	2,576		38	5,588		1,838,469		1,844,057		—
Home equity	8	799		3	153		20	1,570		31	2,522		1,062,988		1,065,510		—
Other consumer (1)	410	487		22	205		5	12		437	704		32,160		32,864		—
Total	446	$	5,251	33	$	26,756	61	$	22,660	540	$	54,667	$	13,621,097	$	13,675,764	$	—

	December 31, 2021
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables		Recorded Investment >90 Days and  Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	7	$	143	2	$	252	2	$	24	11	$	419	$	1,562,860	$	1,563,279	$	—
Commercial real estate	15	32,845		—	—		4	1,339		19	34,184		7,958,160		7,992,344		—
Commercial construction	—	—		—	—		—	—		—	—		1,165,457		1,165,457		—
Small business	11	136		6	53		4	24		21	213		192,976		193,189		—
Residential real estate	12	2,709		5	714		76	3,922		93	7,345		1,597,341		1,604,686		—
Home equity	15	1,375		6	381		21	1,671		42	3,427		1,036,184		1,039,611		—
Other consumer (1)	458	719		41	277		16	112		515	1,108		27,612		28,720		—
Total	518	$	37,927	60	$	1,677	123	$	7,092	701	$	46,696	$	13,540,590	$	13,587,286	$	—

(1)Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

Troubled Debt Restructurings

In the course of resolving nonperforming loans, the Bank may choose to restructure the contractual terms of certain loans. The Bank attempts to work out an alternative payment schedule with the borrower in order to avoid foreclosure actions. Exclusive of loans modified under provisions of the CARES Act, any loans that are modified are reviewed by the Bank to identify if a TDR has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Bank grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two.

The following table shows the Company’s total TDRs and other pertinent information as of the dates indicated:

		June 30, 2022		December 31, 2021
	(Dollars in thousands)
TDRs on accrual status		$	11,734	$	14,635
TDRs on nonaccrual		1,677		1,993
Total TDRs		$	13,411	$	16,628
Additional commitments to lend to a borrower who has been a party to a TDR		$	144	$	190

The Company’s policy is to have any restructured loan which is on nonaccrual status prior to being modified remain on nonaccrual status for six months subsequent to being modified before management considers its return to accrual status. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. Additionally, loans classified as TDRs are adjusted to reflect the changes in value of the recorded investment in the loan, if any, resulting from the granting of a concession. For all residential loan modifications, the borrower must perform during a 90 day trial period before the modification is finalized.

There were no new TDRs during the three or six months ended June 30, 2022. The following table shows the TDRs which occurred during the three and six months ended June 30, 2021 and the change in the recorded investment subsequent to the modifications occurring:

	Three Months Ended					Six Months Ended
	June 30, 2021					June 30, 2021
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(Dollars in thousands)
Troubled debt restructurings
Commercial and industrial	—	$	—	$	—	1	$	14,148	$	14,148
Commercial real estate	—	—		—		5	3,964		3,964
Small business	1	89		89		2	189		189
Total (1)	1	$	89	$	89	8	$	18,301	$	18,301

(1)The pre-modification and post-modification balances represent the legal principal balance of the loan. Activity presented in the table above includes $14.3 million of modifications on existing TDR's occurring during the six months ended June 30, 2021.

The following table shows the Company’s post-modification balance of TDRs listed by type of modification for the periods indicated:

	Three Months Ended		Six Months Ended
	June 30		June 30
		2021		2021
	(Dollars in thousands)
Combination rate and maturity		—		14,148
Extended maturity		89		4,153
Total		89		$	18,301

The Company considers a loan to have defaulted when it reaches 90 days past due. During the six months ended June 30, 2022 and June 30, 2021, there were no loans modified during the prior twelve months that subsequently defaulted during the respective periods. The Company determines the amount of allowance on TDRs in accordance with CECL methodology using a discounted cash flow approach, or a fair value of collateral approach if the loan is determined to be individually evaluated.