Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2022

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

Impaired Financing Receivables

The following table summarizes the Company’s impaired loans by loan portfolio as of December 31, 2021:


	As of December 31, 2021
	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(In thousands)
With no related allowance recorded:
Commercial and industrial	$	12,309	$	13,212	$	—
Commercial real estate	3,520		3,520		—
Business banking	4,199		5,069		—
Residential real estate	11,217		12,587		—
Consumer home equity	1,924		1,924		—
Other consumer	18		18		—
Sub-total	33,187		36,330		—
With an allowance recorded:
Commercial and industrial	3,836		4,226		1,540
Business banking	7,861		11,240		450
Residential real estate	11,161		11,161		1,549
Consumer home equity	1,998		1,998		270
Other consumer	161		161		161
Sub-total	25,017		28,786		3,970
Total	$	58,204	$	65,116	$	3,970

The following table displays information regarding interest income recognized on impaired loans, by portfolio, for the three and nine months ended September 30, 2021:


	For the Three Months Ended September 30, 2021				For the Nine Months Ended September 30, 2021
	Average Recorded Investment		Total Interest Recognized		Average Recorded Investment		Total Interest Recognized
	(In thousands)
With no related allowance recorded:
Commercial and industrial	$	12,517	$	39	$	11,405	$	131
Commercial real estate	3,909		45		4,047		133
Business banking	3,988		25		4,586		75
Residential real estate	11,561		113		12,349		344
Consumer home equity	1,877		13		1,988		47
Other consumer	22		—		24		—
Sub-total	33,874		235		34,399		730
With an allowance recorded:
Commercial and industrial	7,808		—		7,849		—
Commercial real estate	—		—		271		—
Business banking	12,642		14		14,560		43
Residential real estate	12,290		127		13,093		387
Consumer home equity	2,108		15		2,232		53
Other consumer	67		—		22		—
Sub-total	34,915		156		38,027		483
Total	$	68,789	$	391	$	72,426	$	1,213

Schedule Financing Receivable, Purchased with Credit Deterioration

The following table displays the outstanding and carrying amounts of PCI loans as of December 31, 2021:


	As of December 31, 2021
	(In thousands)
Outstanding balance	$	78,074
Carrying amount	69,639

Schedule Of Certain Loans And Debt Securities Acquired In Transfer

The following table summarizes activity in the accretable yield for the PCI loan portfolio:


	For the Three Months Ended September 30, 2021		For the Nine Months Ended September 30, 2021
	(In thousands)
Balance at beginning of period	$	2,981	$	2,495
Accretion	(245)		(877)
Other change in expected cash flows	(1,161)		(1,370)
Reclassification from non-accretable difference for loans with improved cash flows	—		1,327
Balance at end of period	$	1,575	$	1,575