Allowance for Loan Losses and Credit Quality of Loans (Tables)

9 Months Ended

Sep. 30, 2018

Allowance for Loan Losses and Credit Quality of Loans [Abstract]

Portfolio	Class - 2018	Class - 2017
Commercial Loans	Commercial and Industrial	Commercial
	Commercial Real Estate	Commercial Real Estate
	Business Banking	Agricultural
		Agricultural Real Estate
		Business Banking
Consumer Loans	Dealer Finance	Indirect
	Specialty Lending	Home Equity
	Direct	Direct
Residential Real Estate

Allowance for Loan Losses by Portfolio

The following tables illustrate the changes in the allowance for loan losses by our portfolio segments:

(In thousands)	Commercial Loans			Consumer Loans			Residential Real Estate			Total
Balance as of June 30, 2018	$	31,059		$	36,479		$	4,912		$	72,450
Charge-offs		(823	)		(6,818	)		(123	)		(7,764	)
Recoveries		410			1,602			81			2,093
Provision		1,086			6,044			(1,104	)		6,026
Ending Balance as of September 30, 2018	$	31,732		$	37,307		$	3,766		$	72,805

Balance as of June 30, 2017	$	24,428		$	35,523		$	6,649		$	66,600
Charge-offs		(574	)		(6,979	)		(421	)		(7,974	)
Recoveries		266			1,446			123			1,835
Provision		1,434			6,197			258			7,889
Ending Balance as of September 30, 2017	$	25,554		$	36,187		$	6,609		$	68,350

(In thousands)	Commercial Loans			Consumer Loans			Residential Real Estate			Total
Balance as of December 31, 2017	$	27,606		$	36,830		$	5,064		$	69,500
Charge-offs		(2,535	)		(21,947	)		(513	)		(24,995	)
Recoveries		780			4,946			274			6,000
Provision		5,881			17,478			(1,059	)		22,300
Ending Balance as of September 30, 2018	$	31,732		$	37,307		$	3,766		$	72,805

Balance as of December 31, 2016	$	25,444		$	33,375		$	6,381		$	65,200
Charge-offs		(2,991	)		(19,742	)		(1,717	)		(24,450	)
Recoveries		919			3,680			166			4,765
Provision		2,182			18,874			1,779			22,835
Ending Balance as of September 30, 2017	$	25,554		$	36,187		$	6,609		$	68,350

The following tables illustrate the allowance for loan losses and the recorded investment by portfolio segments:

(In thousands)	Commercial Loans		Consumer Loans		Residential Real Estate		Total
As of September 30, 2018
Allowance for loan losses	$	31,732	$	37,307	$	3,766	$	72,805
Allowance for loans individually evaluated for impairment		25		-		-		25
Allowance for loans collectively evaluated for impairment	$	31,707	$	37,307	$	3,766	$	72,780
Ending balance of loans	$	3,212,577	$	2,301,198	$	1,373,487	$	6,887,262
Ending balance of originated loans individually evaluated for impairment		5,077		7,760		6,445		19,282
Ending balance of acquired loans collectively evaluated for impairment		153,808		33,994		153,073		340,875
Ending balance of originated loans collectively evaluated for impairment	$	3,053,692	$	2,259,444	$	1,213,969	$	6,527,105

As of December 31, 2017
Allowance for loan losses	$	27,606	$	36,830	$	5,064	$	69,500
Allowance for loans individually evaluated for impairment		57		-		-		57
Allowance for loans collectively evaluated for impairment	$	27,549	$	36,830	$	5,064	$	69,443
Ending balance of loans	$	3,028,269	$	2,234,349	$	1,321,021	$	6,583,639
Ending balance of originated loans individually evaluated for impairment		5,876		8,432		6,830		21,138
Ending balance of acquired loans collectively evaluated for impairment		187,313		43,906		170,472		401,691
Ending balance of originated loans collectively evaluated for impairment	$	2,835,080	$	2,182,011	$	1,143,719	$	6,160,810

Past Due and Nonperforming Loans by Loan Class

The following tables set forth information with regard to past due and nonperforming loans by loan class:

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of September 30, 2018
Originated
Commercial Loans:
C&I	$	209	$	41	$	-	$	250	$	908	$	857,782	$	858,940
CRE		1,133		-		-		1,133		3,637		1,708,369		1,713,139
Business Banking		1,318		98		-		1,416		5,754		479,520		486,690
Total Commercial Loans	$	2,660	$	139	$	-	$	2,799	$	10,299	$	3,045,671	$	3,058,769
Consumer Loans:
Dealer Finance	$	14,364	$	2,039	$	1,252	$	17,655	$	2,062	$	1,209,880	$	1,229,597
Specialty Lending		3,037		2,155		1,544		6,736		-		514,660		521,396
Direct		3,313		949		434		4,696		2,541		508,974		516,211
Total Consumer Loans	$	20,714	$	5,143	$	3,230	$	29,087	$	4,603	$	2,233,514	$	2,267,204
Residential Real Estate	$	1,366	$	219	$	1,231	$	2,816	$	6,106	$	1,211,492	$	1,220,414
Total Originated Loans	$	24,740	$	5,501	$	4,461	$	34,702	$	21,008	$	6,490,677	$	6,546,387

Acquired
Commercial Loans:
C&I	$	-	$	-	$	-	$	-	$	-	$	30,871	$	30,871
CRE		-		-		-		-		2		87,827		87,829
Business Banking		425		-		240		665		611		33,832		35,108
Total Commercial Loans	$	425	$	-	$	240	$	665	$	613	$	152,530	$	153,808
Consumer Loans:
Dealer Finance	$	4	$	-	$	-	$	4	$	-	$	99	$	103
Direct		223		14		-		237		275		33,379		33,891
Total Consumer Loans	$	227	$	14	$	-	$	241	$	275	$	33,478	$	33,994
Residential Real Estate	$	839	$	39	$	33	$	911	$	1,405	$	150,757	$	153,073
Total Acquired Loans	$	1,491	$	53	$	273	$	1,817	$	2,293	$	336,765	$	340,875

Total Loans	$	26,231	$	5,554	$	4,734	$	36,519	$	23,301	$	6,827,442	$	6,887,262

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of December 31, 2017
Originated
Commercial Loans:
Commercial	$	-	$	-	$	-	$	-	$	202	$	753,577	$	753,779
Commercial Real Estate		161		138		-		299		3,178		1,533,065		1,536,542
Agricultural		117		-		-		117		1,043		34,386		35,546
Agricultural Real Estate		493		-		-		493		2,736		30,905		34,134
Business Banking		1,907		597		-		2,504		5,304		473,147		480,955
Total Commercial Loans	$	2,678	$	735	$	-	$	3,413	$	12,463	$	2,825,080	$	2,840,956
Consumer Loans:
Indirect	$	18,747	$	4,033	$	3,492	$	26,272	$	2,115	$	1,642,204	$	1,670,591
Home Equity		2,887		854		341		4,082		2,736		448,081		454,899
Direct		341		108		70		519		35		64,399		64,953
Total Consumer Loans	$	21,975	$	4,995	$	3,903	$	30,873	$	4,886	$	2,154,684	$	2,190,443
Residential Real Estate	$	3,730	$	667	$	1,262	$	5,659	$	5,987	$	1,138,903	$	1,150,549
Total Originated Loans	$	28,383	$	6,397	$	5,165	$	39,945	$	23,336	$	6,118,667	$	6,181,948

Acquired
Commercial Loans:
Commercial	$	-	$	-	$	-	$	-	$	-	$	39,575	$	39,575
Commercial Real Estate		-		-		-		-		2		106,632		106,634
Business Banking		354		-		-		354		669		40,081		41,104
Total Commercial Loans	$	354	$	-	$	-	$	354	$	671	$	186,288	$	187,313
Consumer Loans:
Indirect	$	38	$	-	$	1	$	39	$	22	$	1,157	$	1,218
Home Equity		254		34		103		391		225		39,256		39,872
Direct		6		1		1		8		23		2,785		2,816
Total Consumer Loans	$	298	$	35	$	105	$	438	$	270	$	43,198	$	43,906
Residential Real Estate	$	627	$	226	$	140	$	993	$	1,431	$	168,048	$	170,472
Total Acquired Loans	$	1,279	$	261	$	245	$	1,785	$	2,372	$	397,534	$	401,691

Total Loans	$	29,662	$	6,658	$	5,410	$	41,730	$	25,708	$	6,516,201	$	6,583,639

Impaired Loans and Specific Reserve Allocations

The following table provides information on loans specifically evaluated for impairment:

	September 30, 2018						December 31, 2017
(In thousands)	Recorded Investment Balance (Book)		Unpaid Principal Balance (Legal)		Related Allowance		Recorded Investment Balance (Book)		Unpaid Principal Balance (Legal)		Related Allowance
Originated
With no related allowance recorded:
Commercial Loans:
C&I	$	404	$	676			$	-	$	-
CRE		3,629		5,616				-		-
Commercial		-		-				-		251
Commercial Real Estate		-		-				2,211		3,979
Agricultural		-		-				452		465
Agricultural Real Estate		-		-				2,250		2,423
Business Banking		1,019		2,099				860		1,730
Total Commercial Loans	$	5,052	$	8,391			$	5,773	$	8,848
Consumer Loans:
Dealer Finance	$	160	$	254			$	-	$	-
Direct		7,600		9,600				-		-
Indirect		-		-				131		143
Home Equity		-		-				8,027		9,966
Direct		-		-				274		274
Total Consumer Loans	$	7,760	$	9,854			$	8,432	$	10,383
Residential Real Estate	$	6,445	$	8,721			$	6,830	$	8,780
Total	$	19,257	$	26,966			$	21,035	$	28,011

With an allowance recorded:
Commercial Loans:
C&I	$	25	$	25	$	25	$	-	$	-	$	-
Commercial Real Estate		-		-		-		76		82		30
Agricultural		-		-		-		27		27		27
Total Commercial Loans	$	25	$	25	$	25	$	103	$	109	$	57

Total Loans	$	19,282	$	26,991	$	25	$	21,138	$	28,120	$	57

The following tables summarize the average recorded investments on loans specifically evaluated for impairment and the interest income recognized:

	For the three months ended
	September 30, 2018				September 30, 2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated
Commercial Loans:
C&I	$	433	$	-	$	-	$	-
CRE		3,645		32		-		-
Commercial		-		-		1,000		-
Commercial Real Estate		-		-		2,415		48
Agricultural		-		-		115		-
Agricultural Real Estate		-		-		1,505		11
Business Banking		1,024		4		955		2
Total Commercial Loans	$	5,102	$	36	$	5,990	$	61
Consumer Loans:
Dealer Finance	$	177	$	4	$	-	$	-
Direct		7,730		102		-		-
Indirect		-		-		35		1
Home Equity		-		-		8,159		111
Direct		-		-		119		2
Total Consumer Loans	$	7,907	$	106	$	8,313	$	114
Residential Real Estate	$	6,519	$	68	$	6,633	$	82
Total Originated Loans	$	19,528	$	210	$	20,936	$	257

Total Loans	$	19,528	$	210	$	20,936	$	257

	For the nine months ended
	September 30, 2018				September 30, 2017
(In thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Originated
Commercial Loans:
C&I	$	449	$	1	$	-	$	-
CRE		3,999		96		-		-
Commercial		-		-		2,393		-
Commercial Real Estate		-		-		3,906		93
Agricultural		-		-		147		1
Agricultural Real Estate		-		-		1,545		32
Business Banking		998		12		837		7
Total Commercial Loans	$	5,446	$	109	$	8,828	$	133
Consumer Loans:
Dealer Finance	$	187	$	8	$	-	$	-
Direct		7,953		317		-		-
Indirect		-		-		22		2
Home Equity		-		-		8,274		331
Direct		-		-		119		2
Total Consumer Loans	$	8,140	$	325	$	8,415	$	335
Residential Real Estate	$	6,719	$	212	$	6,425	$	211
Total Originated Loans	$	20,305	$	646	$	23,668	$	679

Acquired
Commercial Loans:
Commercial Real Estate	$	-	$	-	$	121	$	-
Total Commercial Loans	$	-	$	-	$	121	$	-
Total Acquired Loans	$	-	$	-	$	121	$	-

Total Loans	$	20,305	$	646	$	23,789	$	679

Financing Receivable Credit Quality by Loan Class

The following tables illustrate the Company’s credit quality by loan class:

(In thousands)	As of September 30, 2018
Originated
Commercial Credit Exposure By Internally Assigned Grade:			C&I		CRE		Total
Pass			$	805,333	$	1,660,900	$	2,466,233
Special Mention				33,557		16,762		50,319
Substandard				20,050		35,477		55,527
Total			$	858,940	$	1,713,139	$	2,572,079

Business Banking Credit Exposure By Internally Assigned Grade:					Business Banking		Total
Non-classified					$	474,252	$	474,252
Classified						12,438		12,438
Total					$	486,690	$	486,690

Consumer Credit Exposure By Payment Activity:	Dealer Finance		Specialty Lending		Direct		Total
Performing	$	1,226,283	$	519,852	$	513,236	$	2,259,371
Nonperforming		3,314		1,544		2,975		7,833
Total	$	1,229,597	$	521,396	$	516,211	$	2,267,204

Residential Real Estate Credit Exposure By Payment Activity:					Residential Real Estate		Total
Performing					$	1,213,077	$	1,213,077
Nonperforming						7,337		7,337
Total					$	1,220,414	$	1,220,414

Acquired
Commercial Credit Exposure By Internally Assigned Grade:	C&I		CRE		Total
Pass	$	27,046	$	87,091	$	114,137
Special Mention		3,825		93		3,918
Substandard		-		645		645
Total	$	30,871	$	87,829	$	118,700

Business Banking Credit Exposure By Internally Assigned Grade:			Business Banking		Total
Non-classified			$	32,098	$	32,098
Classified				3,010		3,010
Total			$	35,108	$	35,108

Consumer Credit Exposure By Payment Activity:	Dealer Finance		Direct		Total
Performing	$	103	$	33,616	$	33,719
Nonperforming		-		275		275
Total	$	103	$	33,891	$	33,994

Residential Real Estate Credit Exposure By Payment Activity:			Residential Real Estate		Total
Performing			$	151,635	$	151,635
Nonperforming				1,438		1,438
Total			$	153,073	$	153,073

(In thousands)	As of December 31, 2017
Originated
Commercial Credit Exposure By Internally Assigned Grade:	Commercial		Commercial Real Estate		Agricultural		Agricultural Real Estate		Total
Pass	$	708,567	$	1,481,926	$	31,142	$	23,381	$	2,245,016
Special Mention		30,337		28,264		2,294		2,441		63,336
Substandard		14,875		26,352		2,110		8,312		51,649
Total	$	753,779	$	1,536,542	$	35,546	$	34,134	$	2,360,001

Business Banking Credit Exposure By Internally Assigned Grade:							Business Banking		Total
Non-classified							$	468,898	$	468,898
Classified								12,057		12,057
Total							$	480,955	$	480,955

Consumer Credit Exposure By Payment Activity:			Indirect		Home Equity		Direct		Total
Performing			$	1,664,984	$	451,822	$	64,848	$	2,181,654
Nonperforming				5,607		3,077		105		8,789
Total			$	1,670,591	$	454,899	$	64,953	$	2,190,443

Residential Real Estate Credit Exposure By Payment Activity:							Residential Real Estate		Total
Performing							$	1,143,300	$	1,143,300
Nonperforming								7,249		7,249
Total							$	1,150,549	$	1,150,549

Acquired
Commercial Credit Exposure By Internally Assigned Grade:			Commercial		Commercial Real Estate		Total
Pass			$	37,825	$	103,248	$	141,073
Special Mention				425		498		923
Substandard				1,325		2,888		4,213
Total			$	39,575	$	106,634	$	146,209

Business Banking Credit Exposure By Internally Assigned Grade:					Business Banking		Total
Non-classified					$	38,236	$	38,236
Classified						2,868		2,868
Total					$	41,104	$	41,104

Consumer Credit Exposure By Payment Activity:	Indirect		Home Equity		Direct		Total
Performing	$	1,195	$	39,544	$	2,792	$	43,531
Nonperforming		23		328		24		375
Total	$	1,218	$	39,872	$	2,816	$	43,906

Residential Real Estate Credit Exposure By Payment Activity:					Residential Real Estate		Total
Performing					$	168,901	$	168,901
Nonperforming						1,571		1,571
Total					$	170,472	$	170,472

Troubled Debt Restructurings on Financing Receivables

The following tables illustrate the recorded investment and number of modifications for modified loans, including the recorded investment in the loans prior to a modification and the recorded investment in the loans after restructuring:

	Three months ended September 30, 2018
(Dollars in thousands)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Consumer Loans:
Dealer Finance		8	$	90	$	89
Total Consumer Loans		8	$	90	$	89
Total Troubled Debt Restructurings		8	$	90	$	89

	Three months ended September 30, 2017
(Dollars in thousands)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Consumer Loans:
Indirect		1	$	7	$	7
Home Equity		4		189		222
Total Consumer Loans		5	$	196	$	229
Residential Real Estate		1	$	518	$	518
Total Troubled Debt Restructurings		6	$	714	$	747

	Nine months ended September 30, 2018
(Dollars in thousands)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial Loans:
Business Banking		3	$	369	$	371
Total Commercial Loans		3	$	369	$	371
Consumer Loans:
Dealer Finance		15	$	185	$	183
Direct		2		41		41
Total Consumer Loans		17	$	226	$	224
Residential Real Estate		5	$	323	$	323
Total Troubled Debt Restructurings		25	$	918	$	918

	Nine months ended September 30, 2017
(Dollars in thousands)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial Loans:
Commercial		1	$	3,300	$	3,239
Business Banking		1		337		333
Total Commercial Loans		2	$	3,637	$	3,572
Consumer Loans:
Indirect		4	$	39	$	37
Home Equity		8		373		414
Direct		1		120		120
Total Consumer Loans		13	$	532	$	571
Residential Real Estate		8	$	1,066	$	1,068
Total Troubled Debt Restructurings		23	$	5,235	$	5,211

The following tables illustrate the recorded investment and number of modifications for TDRs where a concession has been made and subsequently defaulted during the period:

	Three months ended September 30, 2018				Three months ended September 30, 2017
(Dollars in thousands)	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Consumer Loans:
Indirect		-	$	-		1	$	13
Home Equity		-		-		12		622
Direct		17		816		-		-
Total Consumer Loans		17	$	816		13	$	635
Residential Real Estate		5	$	398		6	$	546
Total Troubled Debt Restructurings		22	$	1,214		19	$	1,181

	Nine months ended September 30, 2018				Nine months ended September 30, 2017
(Dollars in thousands)	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Commercial Loans:
Commercial		-	$	-		1	$	145
Business Banking		2		258		1		329
Total Commercial Loans		2	$	258		2	$	474
Consumer Loans:
Indirect		-	$	-		2	$	19
Home Equity		-		-		30		1,381
Direct		35		1,740		-		-
Total Consumer Loans		35	$	1,740		32	$	1,400
Residential Real Estate		17	$	1,239		12	$	817
Total Troubled Debt Restructurings		54	$	3,237		46	$	2,691