Loans Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2021

Loans receivable, net at September 30, 2021 and December 31, 2020 consisted of the following (in thousands):


	September 30,		December 31,
	2021		2020
Commercial:
Commercial and industrial (1)	$	457,674	$	470,656
Commercial real estate – owner occupied	1,123,973		1,145,065
Commercial real estate – investor	3,922,983		3,491,464
Total commercial	5,504,630		5,107,185
Consumer:
Residential real estate	2,401,240		2,309,459

Home equity loans and lines and other consumer	275,962		339,462

Total consumer	2,677,202		2,648,921
Total loans receivable	8,181,832		7,756,106
Deferred origination costs, net	8,282		9,486
Allowance for loan credit losses	(50,153)		(60,735)
Total loans receivable, net	$	8,139,961	$	7,704,857

(1) The commercial and industrial loans balance at September 30, 2021 and December 31, 2020 includes Paycheck Protection Program (“PPP”) loans of $52.5 million and $95.4 million, respectively.

Summary of Risk Category of Loans by Loan Portfolio Segment Excluding PCI Loans

The following tables summarize total loans by year of origination, internally assigned credit grades and risk characteristics (in thousands):


	2021		2020		2019		2018		2017		2016 and prior		Revolving lines of credit		Total
September 30, 2021

Commercial and industrial
Pass	$	67,130	$	25,950	$	27,728	$	17,799	$	10,361	$	74,014	$	220,570	$	443,552
Special Mention	—		72		240		438		96		601		2,797		4,244
Substandard	—		603		2,542		838		52		978		4,865		9,878
Total commercial and industrial	67,130		26,625		30,510		19,075		10,509		75,593		228,232		457,674
Commercial real estate - owner occupied
Pass	84,621		74,192		126,131		124,268		112,848		496,831		13,056		1,031,947
Special Mention	—		—		2,958		4,010		696		15,761		203		23,628
Substandard	—		3,446		12,600		8,416		5,707		37,174		1,055		68,398
Total commercial real estate - owner occupied	84,621		77,638		141,689		136,694		119,251		549,766		14,314		1,123,973
Commercial real estate - investor
Pass	878,697		624,794		535,828		274,668		382,965		844,970		237,610		3,779,532
Special Mention	—		—		23,822		9,409		5,223		29,565		—		68,019
Substandard	—		4,289		29,124		685		8,656		29,510		3,168		75,432
Total commercial real estate - investor	878,697		629,083		588,774		284,762		396,844		904,045		240,778		3,922,983


Residential real estate (1)
Pass	648,364		509,408		317,460		145,652		119,991		655,803		—		2,396,678
Special Mention	—		801		145		—		—		1,481		—		2,427
Substandard	—		—		—		—		221		1,914		—		2,135
Total residential real estate	648,364		510,209		317,605		145,652		120,212		659,198		—		2,401,240
Consumer (1)
Pass	20,208		21,016		18,985		58,392		18,930		135,436		—		272,967
Special Mention	—		—		—		—		—		369		—		369
Substandard	—		—		—		18		—		2,608		—		2,626
Total consumer	20,208		21,016		18,985		58,410		18,930		138,413		—		275,962

Total loans	$	1,699,020	$	1,264,571	$	1,097,563	$	644,593	$	665,746	$	2,327,015	$	483,324	$	8,181,832

(1)For residential real estate and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity.


	2020		2019		2018		2017		2016		2015 and prior		Revolving lines of credit		Total
December 31, 2020
Commercial and industrial
Pass	$	137,262	$	40,737	$	27,967	$	18,845	$	33,568	$	59,339	$	134,140	$	451,858
Special Mention	150		583		826		1,422		907		118		1,429		5,435
Substandard	581		1,284		1,243		809		439		1,706		7,301		13,363
Total commercial and industrial	137,993		42,604		30,036		21,076		34,914		61,163		142,870		470,656
Commercial real estate - owner occupied
Pass	96,888		114,506		122,962		124,050		104,264		428,423		18,932		1,010,025
Special Mention	—		3,512		8,240		1,023		17,115		17,811		439		48,140
Substandard	—		34,670		9,001		3,404		3,677		35,509		639		86,900
Total commercial real estate - owner occupied	96,888		152,688		140,203		128,477		125,056		481,743		20,010		1,145,065
Commercial real estate - investor
Pass	635,930		628,435		317,104		426,268		281,876		812,062		194,913		3,296,588
Special Mention	—		15,979		17,113		15,225		4,234		55,872		149		108,572
Substandard	4,311		9,217		1,931		17,222		11,474		36,326		5,823		86,304
Total commercial real estate - investor	640,241		653,631		336,148		458,715		297,584		904,260		200,885		3,491,464
Residential real estate (1)
Pass	595,982		437,593		226,435		166,773		146,237		729,037		—		2,302,057
Special Mention	—		532		—		—		446		2,186		—		3,164
Substandard	570		—		1,489		221		—		1,958		—		4,238
Total residential real estate	596,552		438,125		227,924		166,994		146,683		733,181		—		2,309,459
Consumer (1)
Pass	24,954		26,659		83,296		25,469		16,565		156,276		2,145		335,364
Special Mention	—		—		—		—		150		382		—		532
Substandard	—		—		—		—		—		3,566		—		3,566
Total consumer	24,954		26,659		83,296		25,469		16,715		160,224		2,145		339,462
Total loans	$	1,496,628	$	1,313,707	$	817,607	$	800,731	$	620,952	$	2,340,571	$	365,910	$	7,756,106

(1) For residential real estate and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity.

Analysis of Allowance for Loan Losses

An analysis of the allowance for credit losses on loans for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):


	Commercial and Industrial		Commercial Real Estate – Owner Occupied		Commercial Real Estate – Investor		Residential Real Estate		Consumer		Unallocated		Total
For the three months ended September 30, 2021
Allowance for credit losses on loans
Balance at beginning of period	$	4,404	$	6,350	$	33,037	$	8,818	$	1,267	$	—	$	53,876
Credit loss expense (benefit)	1,962		515		(9,902)		3,081		235		—		(4,109)
Charge-offs	(50)		(64)		—		(12)		(37)		—		(163)
Recoveries	50		26		5		292		176		—		549
Balance at end of period	$	6,366	$	6,827	$	23,140	$	12,179	$	1,641	$	—	$	50,153
For the three months ended September 30, 2020
Allowance for credit losses on loans
Balance at beginning of period	$	4,979	$	2,765	$	8,860	$	17,685	$	4,220	$	—	$	38,509
Credit loss (benefit) expense	(106)		5,166		30,131		(1,891)		(464)		—		32,836


Charge-offs	(575)		(2,252)		(12,037)		(6)		(541)		—		(15,411)
Recoveries	29		2		32		320		33		—		416
Balance at end of period	$	4,327	$	5,681	$	26,986	$	16,108	$	3,248	$	—	$	56,350
For the nine months ended September 30, 2021
Allowance for credit losses on loans
Balance at beginning of period	$	5,390	$	15,054	$	26,703	$	11,818	$	1,770	$	—	$	60,735
Credit loss expense (benefit)	958		(8,225)		(3,336)		284		(705)		—		(11,024)
Charge-offs	(83)		(64)		(345)		(254)		(193)		—		(939)
Recoveries	101		62		118		331		769		—		1,381
Balance at end of period	$	6,366	$	6,827	$	23,140	$	12,179	$	1,641	$	—	$	50,153
For the nine months ended September 30, 2020
Allowance for credit losses on loans
Balance at beginning of period	$	1,458	$	2,893	$	9,883	$	2,002	$	591	$	25	$	16,852
Impact of CECL adoption	2,416		(1,109)		(5,395)		3,833		2,981		(25)		2,701
Credit loss (benefit) expense	(275)		6,120		34,208		10,749		(727)		—		50,075
Initial allowance for credit losses on purchased with credit deterioration (“PCD”) loans	1,221		26		260		109		1,023		—		2,639
Charge-offs	(575)		(2,253)		(12,062)		(1,351)		(723)		—		(16,964)
Recoveries	82		4		92		766		103		—		1,047
Balance at end of period	$	4,327	$	5,681	$	26,986	$	16,108	$	3,248	$	—	$	56,350

Recorded Investment in Non-Accrual Loans by Loan Portfolio Segment Excluding PCI Loans

The following table presents the recorded investment in non-accrual loans by loan portfolio segment as of September 30, 2021 and December 31, 2020 (in thousands):


	September 30,		December 31,
	2021		2020
Commercial and industrial	$	418	$	1,908
Commercial real estate – owner occupied	12,524		13,751
Commercial real estate – investor	8,506		18,287
Residential real estate	5,505		8,671
Consumer	3,351		4,246
	$	30,304	$	46,863

Aging of Recorded Investment in Past Due Loans Excluding PCI Loans

The following table presents the aging of the recorded investment in past due loans as of September 30, 2021 and December 31, 2020 by loan portfolio segment (in thousands):


	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Loans Not Past Due		Total
September 30, 2021
Commercial and industrial	$	1,797	$	—	$	354	$	2,151	$	455,523	$	457,674
Commercial real estate – owner occupied	515		—		6,992		7,507		1,116,466		1,123,973
Commercial real estate – investor	1,074		95		1,663		2,832		3,920,151		3,922,983
Residential real estate	308		2,427		2,136		4,871		2,396,369		2,401,240
Consumer	1,255		369		2,626		4,250		271,712		275,962
	$	4,949	$	2,891	$	13,771	$	21,611	$	8,160,221	$	8,181,832
December 31, 2020
Commercial and industrial	$	3,050	$	628	$	327	$	4,005	$	466,651	$	470,656
Commercial real estate – owner occupied	1,015		—		7,871		8,886		1,136,179		1,145,065
Commercial real estate – investor	8,897		3,233		11,122		23,252		3,468,212		3,491,464
Residential real estate	15,156		3,164		4,238		22,558		2,286,901		2,309,459
Consumer	978		533		3,568		5,079		334,383		339,462
	$	29,096	$	7,558	$	27,126	$	63,780	$	7,692,326	$	7,756,106

Troubled Debt Restructurings

The following table presents information about TDR loans which occurred during the three and nine months ended September 30, 2021 and 2020 (dollars in thousands):


	Number of Loans	Pre-modification Recorded Investment		Post-modification Recorded Investment
Three months ended September 30, 2021
Troubled debt restructurings:

Commercial real estate - owner occupied	1	$	93	$	110

Three months ended September 30, 2020
Troubled debt restructurings:


Commercial real estate – investor	1	$	928	$	993
Residential real estate	1	418		418
Consumer	1	16		16
Nine months ended September 30, 2021
Troubled debt restructurings:
Commercial real estate - owner occupied	1	$	93	$	110
Commercial real estate – investor	1	4,903		4,903
Residential real estate	3	244		336
Consumer	2	26		33
Nine months ended September 30, 2020
Troubled debt restructurings:
Commercial real estate - owner occupied	1	$	1,112	$	1,143
Commercial real estate – investor	1	928		993
Residential real estate	5	849		865
Consumer	5	175		193