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Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of Accounts, Notes, Loans and Financing Receivable

The following table provides a summary of the Company’s loan portfolio as of the dates indicated:


	September 30, 2022		December 31, 2021
	(In thousands)
Commercial and industrial	$	3,023,729	$	2,960,527
Commercial real estate	4,985,654		4,522,513
Commercial construction	314,193		222,328
Business banking	1,096,436		1,334,694
Residential real estate	2,118,852		1,926,810
Consumer home equity	1,168,476		1,100,153
Other consumer (2)	196,614		214,485
Gross loans before unamortized premiums, unearned discounts and deferred fees	12,903,954		12,281,510
Allowance for loan losses (1)	(131,663)		(97,787)
Unamortized premiums, net of unearned discounts and deferred fees	(19,349)		(26,442)
Loans after the allowance for loan losses, unamortized premiums, unearned discounts and deferred fees	$	12,752,942	$	12,157,281

(1)The Company adopted ASU 2016-13 on January 1, 2022 with a modified retrospective approach. Accordingly, at September 30, 2022 the allowance for loan losses was determined in accordance with ASC 326, “Financial Instruments-Credit Losses” and ASC 310, “Receivables,” as amended. At December 31, 2021 the allowance for loan losses was determined in accordance with ASC 450, “Contingencies” and ASC 310, “Receivables.”

(2)Automobile loans are included in the other consumer portfolio and amounted to $24.0 million and $53.3 million at September 30, 2022 and December 31, 2021, respectively.

Financing Receivable, Allowance for Credit Loss

The following tables summarize the changes in the allowance for loan losses by loan category for the periods indicated:


	For the Three Months Ended September 30, 2022
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Business Banking		Residential Real Estate		Consumer Home Equity		Other Consumer		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	25,852	$	47,555	$	5,474	$	16,699	$	21,663	$	5,662	$	2,626	$	125,531
Charge-offs	(11)		—		—		(369)		—		—		(603)		(983)
Recoveries	126		3		—		286		56		6		158		635
Provision (release)	874		3,545		507		(354)		1,288		174		446		6,480
Ending balance (2)	$	26,841	$	51,103	$	5,981	$	16,262	$	23,007	$	5,842	$	2,627	$	131,663


	For the Nine Months Ended September 30, 2022
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Business Banking		Residential Real Estate		Consumer Home Equity		Other Consumer		Other		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	18,018	$	52,373	$	2,585	$	10,983	$	6,556	$	3,722	$	3,308	$	242	$	97,787
Cumulative effect of change in accounting principle (1)	11,533		(6,655)		1,485		6,160		13,489		1,857		(541)		(242)		27,086
Charge-offs	(13)		—		—		(1,922)		—		—		(1,754)		—		(3,689)
Recoveries	1,074		53		—		1,678		80		16		533		—		3,434
Provision (release)	(3,771)		5,332		1,911		(637)		2,882		247		1,081		—		7,045
Ending balance (2)	$	26,841	$	51,103	$	5,981	$	16,262	$	23,007	$	5,842	$	2,627	$	—	$	131,663

(1)Represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2016-13 (i.e., cumulative effect adjustment related to the adoption of ASU 2016-13 as of January 1, 2022). The adjustment represents a $27.1 million increase to the allowance attributable to the change in accounting methodology for estimating the allowance for loan losses resulting from the Company’s adoption of the standard. The adjustment also includes the adjustment needed to reflect the day one reclassification of the Company’s PCI loan balances to PCD and the associated gross-up of $0.1 million, pursuant to the Company’s adoption of ASU 2016-13.

(2)The balance of accrued interest receivable excluded from amortized cost and the calculation of the allowance for loan losses amounted to $35.9 million at September 30, 2022.

The following tables summarize the changes in the allowance for loan losses by loan category for the three and nine months ended September 30, 2021:


	For the Three Months Ended September 30, 2021
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Business Banking		Residential Real Estate		Consumer Home Equity		Other Consumer		Other		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	22,596	$	52,759	$	3,446	$	12,705	$	6,478	$	3,588	$	3,626	$	439	$	105,637
Charge-offs	—		(8)		—		(867)		—		—		(742)		—		(1,617)
Recoveries	40		—		—		469		88		63		206		—		866
(Release of) Provision	(2,007)		1,435		(44)		(929)		(136)		(16)		297		(88)		(1,488)
Ending balance	$	20,629	$	54,186	$	3,402	$	11,378	$	6,430	$	3,635	$	3,387	$	351	$	103,398


	For the Nine Months Ended September 30, 2021
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Business Banking		Residential Real Estate		Consumer Home Equity		Other Consumer		Other		Total
	(In thousands)
Allowance for loan losses:
Beginning balance	$	26,617	$	54,569	$	4,553	$	13,152	$	6,435	$	3,744	$	3,467	$	494	$	113,031
Charge-offs	(550)		(242)		—		(4,089)		—		—		(1,381)		—		(6,262)
Recoveries	62		4		—		1,125		115		137		554		—		1,997
(Release of) Provision	(5,500)		(145)		(1,151)		1,190		(120)		(246)		747		(143)		(5,368)
Ending balance	$	20,629	$	54,186	$	3,402	$	11,378	$	6,430	$	3,635	$	3,387	$	351	$	103,398

The following tables bifurcate the amount of loans and the allowance for loan losses allocated to each loan category based on the type of impairment analysis as of December 31, 2021:


	As of December 31, 2021
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Business Banking		Residential Real Estate		Consumer Home Equity		Other Consumer		Other		Total
	(In thousands)
Allowance for loan losses ending balance:
Individually evaluated for impairment	$	1,540	$	—	$	—	$	450	$	1,549	$	270	$	161	$	—	$	3,970
Acquired with deteriorated credit quality	5		298		—		—		243		—		—		—		546
Collectively evaluated for impairment	16,473		52,075		2,585		10,533		4,764		3,452		3,147		242		93,271
Total allowance for loan losses by group	$	18,018	$	52,373	$	2,585	$	10,983	$	6,556	$	3,722	$	3,308	$	242	$	97,787
Loans ending balance:
Individually evaluated for impairment	$	16,145	$	3,520	$	—	$	12,060	$	22,378	$	3,922	$	179	$	—	$	58,204
Acquired with deteriorated credit quality	19,028		47,553		—		—		3,058		—		—		—		69,639
Collectively evaluated for impairment	2,925,354		4,471,440		222,328		1,322,634		1,901,374		1,096,231		214,306		—		12,153,667
Total loans by group	$	2,960,527	$	4,522,513	$	222,328	$	1,334,694	$	1,926,810	$	1,100,153	$	214,485	$	—	$	12,281,510

Summary of details the internal risk-rating categories for the Company's commercial and industrial, commercial real estate, commercial construction and business banking portfolios

The following table details the amortized cost balances of the Company’s loan portfolios, presented by credit quality indicator and origination year as of September 30, 2022:


	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans (1)		Total
	(In thousands)
Commercial and industrial
Pass	$	602,715	$	467,826	$	439,013	$	225,164	$	115,237	$	647,820	$	463,873	$	3,407	$	2,965,055
Special Mention	—		—		—		185		3,667		12		900		—		4,764
Substandard	304		13,387		2,963		47		2,688		7,948		390		346		28,073
Doubtful	—		3,912		—		—		—		37		3,331		—		7,280
Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	603,019		485,125		441,976		225,396		121,592		655,817		468,494		3,753		3,005,172

Commercial real estate
Pass	1,179,141		835,810		592,293		620,120		463,910		1,092,428		45,902		4,231		4,833,835
Special Mention	—		—		16,144		703		35,360		9,986		—		—		62,193
Substandard	3,520		50		2,683		19,877		15,837		36,532		8,000		—		86,499
Doubtful	—		—		—		—		—		—		—		—		—


Loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	1,182,661		835,860		611,120		640,700		515,107		1,138,946		53,902		4,231		4,982,527

Commercial construction
Pass	71,700		169,318		24,920		32,909		—		—		11,524		—		310,371
Special Mention	—		—		2,101		—		—		—		—		—		2,101
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial construction	71,700		169,318		27,021		32,909		—		—		11,524		—		312,472

Business banking
Pass	139,053		224,855		175,102		130,091		62,448		246,849		78,458		3,908		1,060,764
Special Mention	—		—		4,704		4,139		3,820		5,729		1,070		—		19,462
Substandard	—		2,160		1,679		4,072		769		10,418		652		770		20,520
Doubtful	—		—		—		191		—		82		—		—		273
Loss	—		—		—		—		—		—		—		—		—
Total business banking	139,053		227,015		181,485		138,493		67,037		263,078		80,180		4,678		1,101,019

Residential real estate
Current and accruing	378,210		711,207		389,001		104,011		70,055		455,291		—		—		2,107,775
30-89 days past due and accruing	723		2,671		707		1,574		1,281		7,453		—		—		14,409
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	—		—		202		293		1,016		7,002		—		—		8,513
Total residential real estate	378,933		713,878		389,910		105,878		72,352		469,746		—		—		2,130,697

Consumer home equity
Current and accruing	74,271		11,284		6,113		5,145		22,589		78,717		956,474		6,378		1,160,971
30-89 days past due and accruing	—		—		—		83		101		646		5,110		—		5,940
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	—		—		—		—		382		1,148		3,390		160		5,080
Total consumer home equity	74,271		11,284		6,113		5,228		23,072		80,511		964,974		6,538		1,171,991

Other consumer
Current and accruing	42,452		34,736		19,085		20,170		23,645		20,694		18,490		10		179,282
30-89 days past due and accruing	77		114		94		59		354		220		52		—		970
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	41		25		56		74		80		107		92		—		475
Total other consumer	42,570		34,875		19,235		20,303		24,079		21,021		18,634		10		180,727

Total	$	2,492,207	$	2,477,355	$	1,676,860	$	1,168,907	$	823,239	$	2,629,119	$	1,597,708	$	19,210	$	12,884,605

(1)The amounts presented represent the amortized cost as of September 30, 2022 of revolving loans that were converted to term loans during the nine months ended September 30, 2022.

The following tables detail the internal risk-rating categories for the Company’s commercial and industrial, commercial real estate, commercial construction and business banking portfolios:


	As of December 31, 2021
Category	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Business Banking		Total
	(In thousands)
Unrated	$	171,537	$	4,378	$	—	$	696,629	$	872,544
Pass	2,656,873		4,199,803		213,744		569,956		7,640,376
Special mention	70,141		104,517		1,889		50,085		226,632
Substandard	50,339		213,815		6,695		17,814		288,663
Doubtful	11,637		—		—		210		11,847
Loss	—		—		—		—		—
Total	$	2,960,527	$	4,522,513	$	222,328	$	1,334,694	$	9,040,062

Summary of age analysis of past due loans

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


	As of September 30, 2022
	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Commercial and industrial	$	—	$	304	$	1,994	$	2,298	$	3,002,874	$	3,005,172
Commercial real estate	—		—		—		—		4,982,527		4,982,527
Commercial construction	—		—		—		—		312,472		312,472
Business banking	5,591		1,188		3,609		10,388		1,090,631		1,101,019
Residential real estate	12,572		1,905		6,588		21,065		2,109,632		2,130,697
Consumer home equity	4,560		1,752		4,485		10,797		1,161,194		1,171,991
Other consumer	720		286		439		1,445		179,282		180,727
Total	$	23,443	$	5,435	$	17,115	$	45,993	$	12,838,612	$	12,884,605


	As of December 31, 2021
	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans
	(In thousands)
Commercial and industrial	$	45	$	31	$	1,672	$	1,748	$	2,958,779	$	2,960,527
Commercial real estate	25,931		—		1,196		27,127		4,495,386		4,522,513
Commercial construction	—		—		—		—		222,328		222,328
Business banking	5,043		1,793		4,640		11,476		1,323,218		1,334,694
Residential real estate	17,523		3,511		5,543		26,577		1,900,233		1,926,810
Consumer home equity	3,774		1,510		4,571		9,855		1,090,298		1,100,153
Other consumer	1,194		548		889		2,631		211,854		214,485
Total (1)	$	53,510	$	7,393	$	18,511	$	79,414	$	12,202,096	$	12,281,510

Summary pertaining to the breakdown of the Company's nonaccrual loans

The following table presents information regarding non-accrual loans as of the dates indicated:


	As of September 30, 2022								As of December 31, 2021
	Non-Accrual Loans With ACL		Non-Accrual Loans Without ACL (3)		Total Non-Accrual Loans		Amortized Cost of Loans >90 DPD and Still Accruing (2)		Total Non-Accrual Loans (1)		Recorded Investment >90 DPD and Still Accruing
	(In thousands)
Commercial and industrial	$	3,363	$	8,910	$	12,273	$	—	$	12,400	$	—
Commercial real estate	—		—		—		—		—		1,196
Commercial construction	—		—		—		—		—		—
Business banking	6,934		679		7,613		—		8,230		—
Residential real estate	8,513		—		8,513		—		6,681		769
Consumer home equity	5,080		—		5,080		—		4,732		25
Other consumer	461		14		475		—		950		—
Total non-accrual loans	$	24,351	$	9,603	$	33,954	$	—	$	32,993	$	1,990

(1)The amounts presented represent the recorded investment balance of loans as of December 31, 2021.

(2)“DPD” indicated in the table above refers to “days past due.”

(3)The loans on non-accrual status and without an ACL as of September 30, 2022, were primarily comprised of collateral dependent loans for which the fair value of the underlying loan collateral exceeded the loan carrying value.

Summary of the modifications which occurred during the periods and the change in the recorded investment subsequent to the modifications occurring

The following tables show the TDR loans on accrual and non-accrual status as of the dates indicated:


	As of September 30, 2022
	TDRs on Accrual Status			TDRs on Non-Accrual Status			Total TDRs
	Number of Loans	Balance of Loans		Number of Loans	Balance of Loans		Number of Loans	Balance of Loans
	(Dollars in thousands)
Commercial and industrial	2	$	7,087	10	$	10,248	12	$	17,335
Commercial real estate	1	3,520		—	—		1	3,520
Business banking	7	3,729		20	998		27	4,727
Residential real estate	117	18,268		26	3,340		143	21,608
Consumer home equity	55	3,671		16	855		71	4,526
Other consumer	—	—		1	14		1	14
Total	182	$	36,275	73	$	15,455	255	$	51,730


	As of December 31, 2021
	TDRs on Accrual Status			TDRs on Non-Accrual Status			Total TDRs
	Number of Loans	Balance of Loans		Number of Loans	Balance of Loans		Number of Loans	Balance of Loans
	(Dollars in thousands)
Commercial and industrial	1	$	3,745	6	$	9,983	7	$	13,728
Commercial real estate	1	3,520		—	—		1	3,520
Business banking	5	3,830		3	383		8	4,213
Residential real estate	121	19,119		27	3,015		148	22,134
Consumer home equity	67	3,104		16	818		83	3,922
Other consumer	2	18		—	—		2	18
Total (1)	197	$	33,336	52	$	14,199	249	$	47,535

(1)The amounts presented in the table above represent the recorded investment balance of loans as of December 31, 2021.

The following tables show the modifications which occurred during the periods and the change in the recorded investment subsequent to the modifications occurring:


	For the Three Months Ended September 30, 2022					For the Nine Months Ended September 30, 2022
	Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment (1)		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment (1)
	(Dollars in thousands)
Commercial and industrial	3	$	2,997	$	2,997	4	$	5,415	$	5,415
Business banking	9	284		284		20	854		862
Residential real estate	5	1,170		1,170		8	1,899		1,899
Consumer home equity	4	1,236		1,236		6	1,468		1,468
Total	21	$	5,687	$	5,687	38	$	9,636	$	9,644

(1)The post-modification balances represent the balance of the loan on the date of modification. These amounts may show an increase when modification includes capitalization of interest.


	For the Three Months Ended September 30, 2021					For the Nine Months Ended September 30, 2021
	Number of Contracts	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment (1)		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment (1)
	(Dollars in thousands)
Business banking	—	$	—	$	—	1	$	462	$	462
Residential real estate	—	—		—		1	295		295
Consumer home equity	2	200		200		2	200		200
Total	2	$	200	$	200	4	$	957	$	957

(1)The post-modification balances represent the balance of the loan on the date of modification. These amounts may show an increase when modification includes capitalization of interest.

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


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands)
Extended maturity	$	—	$	200	$	997	$	200
Adjusted interest rate and extended maturity	123		—		535		—
Interest only/principal deferred	—		—		130		—
Covenant modification	—		—		2,418		—
Court-ordered concession	—		—		—		295
Principal and interest deferred	2,343		—		2,343		462
Extended maturity and interest only/principal deferred	2,997		—		2,997		—
Other	224		—		224		—
Total	$	5,687	$	200	$	9,644	$	957

The following table shows the number of loans and the recorded investment amount of those loans, as of the respective date, that have been modified during the prior 12 months which have subsequently defaulted during the periods indicated. The Company considers a loan to have defaulted when it reaches 90 days past due or is transferred to non-accrual:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2022			2021			2022			2021
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted (1):
Business banking	—	$	—	—	$	—	—	$	—	1	$	404
Consumer home equity	—	—		—	—		—	—		1	56
Total	—	$	—	—	$	—	—	$	—	2	$	460

(1)This table does not reflect any TDRs which were fully charged off, paid off, or otherwise settled during the period.

Summary of the Company's loan participations

The following table summarizes the Company’s loan participations:


	As of and for the Nine Months Ended September 30, 2022						As of and for the Year Ended December 31, 2021
	Balance (1)		Non-performing Loan Rate (%)		Gross Charge-offs		Balance (1)		Non-performing Loan Rate (%)		Gross Charge-offs
	(Dollars in thousands)
Commercial and industrial	$	878,861	0.82	%	$	—	$	732,425	1.36	%	$	—
Commercial real estate	406,089		0.00	%	—		362,898		0.00	%	—
Commercial construction	76,913		0.00	%	—		37,081		0.00	%	—
Business banking	56		0.00	%	3		98		0.00	%	—
Total loan participations	$	1,361,919	0.53	%	$	3	$	1,132,502	0.88	%	$	—

(1)The balance of loan participations as of September 30, 2022 represents the amortized cost basis and the balance as of December 31, 2021 represents the recorded investment balance. The difference between amortized cost basis and recorded investment basis as of September 30, 2022 is not material.