Loans and Allowance for Credit Losses

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

Loans

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

	As of December 31,
	2023		2022
	(In thousands)
Commercial and industrial	$	3,034,068	$	3,150,946
Commercial real estate	5,457,349		5,155,323
Commercial construction	386,999		336,276
Business banking	1,085,763		1,090,492
Residential real estate	2,565,485		2,460,849
Consumer home equity	1,208,231		1,187,547
Other consumer (1)(2)	235,533		194,098
Gross loans before unamortized premiums, unearned discounts and deferred fees and costs	13,973,428		13,575,531
Allowance for loan losses (3)	(148,993)		(142,211)
Unamortized premiums, net of unearned discounts and deferred fees, net of costs	(25,068)		(13,003)
Loans after the allowance for loan losses, unamortized premiums, unearned discounts and deferred fees and costs	$	13,799,367	$	13,420,317

(1)Automobile loans are included in the other consumer portfolio above and amounted to $7.2 million and $18.1 million at December 31, 2023 and 2022, respectively.

(2)Home improvement loans are included in the other consumer portfolio and amounted to $178.9 million and $121.1 million at December 31, 2023 and 2022, respectively.

(3)The balance of accrued interest receivable excluded from amortized cost and the calculation of the allowance for loan losses amounted to $53.9 million and $45.2 million as of December 31, 2023 and 2022, respectively, and is included within other assets on the Consolidated Balance Sheets.

There are no other loan categories that exceed 10% of total loans not already reflected in the preceding table.

The Company’s lending activities are conducted principally in the New England area with the exception of its Shared National Credit Program (“SNC Program”) portfolio and certain purchased loans. The Company participates in the SNC Program in an effort to improve its industry and geographical diversification. The SNC Program portfolio is included in the Company’s commercial and industrial, commercial real estate and commercial construction portfolios. The SNC Program portfolio is defined as loan syndications with exposure over $100 million and with three or more lenders participating.

Most loans originated by the Company are either collateralized by real estate or other assets or guaranteed by federal and local governmental authorities. The ability and willingness of the single-family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the borrowers’ geographic areas and real estate values. The ability and willingness of commercial real estate, commercial and industrial, and construction loan borrowers to honor their repayment commitments is generally dependent on the health of the real estate economy in the borrowers’ geographic areas and the general economy.

Loans Pledged as Collateral

The carrying value of loans pledged to secure advances from the FHLBB were $4.6 billion and $3.9 billion at December 31, 2023 and 2022, respectively. The balance of funds borrowed from the FHLBB were $17.7 million and $704.1 million at December 31, 2023 and 2022, respectively.

The carrying value of loans pledged to secure advances from the Federal Reserve Bank (“FRB”) was $1.1 billion at both December 31, 2023 and 2022, respectively. There were no funds borrowed from the FRB outstanding at December 31, 2023 and 2022.

Serviced Loans

At December 31, 2023 and 2022, mortgage loans partially or wholly-owned by others and serviced by the Company amounted to $77.2 million and $84.0 million, respectively.

Purchased Loans

The Company began purchasing residential real estate mortgage loans during the third quarter of 2022 and ceased such purchases in the first quarter of 2023. Loans purchased were subject to the same underwriting criteria as those loans originated directly by the Company. During the year ended December 31, 2023, the Company purchased $32.0 million of residential real estate mortgage loans. The Company purchased $380.2 million of residential real estate mortgage loans during the year ended December 31, 2022. As of December 31, 2023 and 2022, the amortized cost balance of loans purchased was $385.5 million and $376.1 million, respectively.

Commercial Loan Sales

During the year ended December 31, 2023, the Company sold $214.2 million of commercial and industrial loans previously included in the SNC program portfolio and recognized a loss on sale of $2.7 million.

Allowance for Loan Losses

The allowance for loan losses is established to provide for management’s estimate of expected lifetime credit losses on loans measured at amortized cost at the balance sheet date through a provision for loan losses charged to net income. Charge-offs, net of recoveries, are charged directly to the allowance for loan losses. Commercial and residential loans are charged-off in the period in which they are deemed uncollectible. Delinquent loans in these product types are subject to ongoing review and analysis to determine if a charge-off in the current period is appropriate. For consumer loans, policies and procedures exist that require charge-off consideration upon a certain triggering event depending on the product type.

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

	For the Year Ended December 31, 2023
	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	$	26,859	$	54,730	$	7,085	$	16,189	$	28,129	$	6,454	$	2,765	$	142,211
Cumulative effect of change in accounting principle (1)	47		—		—		(140)		(849)		(201)		—		(1,143)
Charge-offs	(13)		(8,008)		—		(4,645)		—		(7)		(2,419)		(15,092)
Recoveries	296		198		—		1,867		97		41		466		2,965
Provision (release)	(230)		18,555		(419)		1,642		(1,423)		(692)		2,619		20,052
Ending balance	$	26,959	$	65,475	$	6,666	$	14,913	$	25,954	$	5,595	$	3,431	$	148,993

(1)Represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2022-02 (i.e., cumulative effect adjustment related to the adoption of ASU 2022-02 as of January 1, 2023). The adjustment represents a $1.1 million decrease 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.

	For the Year Ended December 31, 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	(269)		—		—		(2,292)		—		(1)		(2,269)		—		(4,831)
Recoveries	1,322		91		—		2,069		94		24		644		—		4,244
Provision (release)	(3,745)		8,921		3,015		(731)		7,990		852		1,623		—		17,925
Ending balance	$	26,859	$	54,730	$	7,085	$	16,189	$	28,129	$	6,454	$	2,765	$	—	$	142,211

(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.

The allowance for loan losses increased by $6.8 million to $149.0 million at December 31, 2023 from $142.2 million at December 31, 2022 and the allowance for loans losses as a percentage of total loans increased by 2 basis points to 1.07% at December 31, 2023 from 1.05% at December 31, 2022. The increase in allowance for loan losses was primarily due to increased loan balances. Total charge-offs increased by $10.3 million to $15.1 million during the year ended December 31, 2023 from $4.8 million during the year ended December 31, 2022. The increase was primarily due to charge-offs on non-performing commercial real estate loans collateralized by properties in the office risk category taken in the fourth quarter of 2023. Such loans had been previously reserved for on a specific reserve basis in the third quarter of 2023.

Reserve for Unfunded Commitments

Management evaluates the need for a reserve on unfunded lending commitments in a manner consistent with loans held for investment. The Company’s adoption of ASU 2022-02 on January 1, 2023 did not impact the reserve for unfunded lending commitments. Upon adoption of ASU 2016-13 on January 1, 2022, the Company recorded a transition adjustment related to the reserve for unfunded lending commitments of $1.0 million, resulting in a total reserve for unfunded lending commitments of $11.1 million as of January 1, 2022. As of December 31, 2023 and December 31, 2022, the Company’s reserve for unfunded lending commitments was $14.1 million and $13.2 million, respectively, which is recorded within other liabilities in the Company’s Consolidated Balance Sheets.

Portfolio Segmentation

Management uses a methodology to systematically estimate the amount of expected losses in each segment of loans in the Company’s portfolio. Commercial and industrial business banking, investment commercial real estate, and commercial and industrial loans are evaluated based upon loan-level risk characteristics, historical losses and other factors which form the basis for estimating expected losses. Other portfolios, including owner occupied commercial real estate (which includes business banking owner occupied commercial real estate), commercial construction, residential mortgages, home equity and consumer loans, are analyzed as groups taking into account delinquency ratios, and the Company’s and peer banks’ historical loss experience. For the purposes of estimating the allowance for loan losses, management segregates the loan portfolio into loan categories that share similar risk characteristics such as the purpose of the loan, repayment source, and collateral. These characteristics are considered when determining the appropriate level of the allowance for each category. Some examples of these risk characteristics unique to each loan category include:

Commercial Lending

Commercial and industrial: The primary risk associated with commercial and industrial loans is the ability of borrowers to achieve business results consistent with those projected at origination. Collateral frequently consists of a first lien position on business assets including, but not limited to, accounts receivable, inventory, aircraft and equipment. The primary repayment source is operating cash flow and, secondarily, the liquidation of assets. Under its lending guidelines, the Company

generally requires a corporate or personal guarantee from individuals that hold material ownership in the borrowing entity when the loan-to-value of a commercial and industrial loan is in excess of a specified threshold.

Commercial real estate: Collateral values are established by independent third-party appraisals and evaluations. Primary repayment sources include operating income generated by the real estate, permanent debt refinancing, sale of the real estate and, secondarily, liquidation of the collateral. Under its lending guidelines, the Company generally requires a corporate or personal guarantee from individuals that hold material ownership in the borrowing entity when the loan-to-value of a commercial real estate loan is in excess of a specified threshold.

Commercial construction: These loans are generally considered to present a higher degree of risk than other real estate loans and may be affected by a variety of factors, such as adverse changes in interest rates and the borrower’s ability to control costs and adhere to time schedules. Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the completed project. Construction loan repayment is substantially dependent on the ability of the borrower to complete the project and obtain permanent financing.

Business banking: These loans are typically secured by all business assets or commercial real estate. Business banking originations include traditionally underwritten loans as well as partially automated scored loans. Business banking scored loans are determined by utilizing the Company’s proprietary decision matrix that has a number of quantitative factors including, but not limited to, a guarantor’s credit score, industry risk, and time in business. The Company also engages in Small Business Association (“SBA”) lending. The SBA guarantees reduce the Company’s loss due to default and are considered a credit enhancement to the loan structure.

Residential Lending

These loans are made to borrowers who demonstrate the ability to repay principal and interest on a monthly basis. Underwriting considerations include, among others, income sources and their reliability, willingness to repay as evidenced by credit repayment history, financial resources (including cash reserves) and the value of the collateral. The Company maintains policy standards for minimum credit score and cash reserves and maximum loan-to-value consistent with a “prime” portfolio. Collateral consists of mortgage liens on 1-4 family residential dwellings. The policy standards applied to loans originated by the Company are the same as those applied to purchased loans. The Company does not originate or purchase sub-prime or other high-risk loans. Residential loans are originated either for sale to investors or retained in the Company’s loan portfolio. Decisions about whether to sell or retain residential loans are made based on the interest rate characteristics, pricing for loans in the secondary mortgage market, competitive factors and the Company’s liquidity and capital needs.

Consumer Lending

Consumer home equity: Home equity lines of credit are granted for ten years with monthly interest-only repayment requirements. Full principal repayment is required at the end of the ten-year draw period. Home equity loans are term loans that require the monthly payment of principal and interest such that the loan will be fully amortized at maturity. Underwriting considerations are materially consistent with those utilized in residential real estate. Collateral consists of a senior or subordinate lien on owner-occupied residential property.

Other consumer: The Company’s policy and underwriting in this category, which is comprised primarily of home improvement, automobile and aircraft loans, include the following factors, among others: income sources and reliability, credit histories, term of repayment, and collateral value, as applicable. These are typically granted on an unsecured basis, with the exception of aircraft and automobile loans.

Credit Quality

Commercial Lending Credit Quality

The credit quality of the Company’s commercial loan portfolio is actively monitored and supported by a comprehensive credit approval process and all large dollar transactions are sent for approval to a committee of seasoned business line and credit professionals. The Company maintains an independent credit risk review function that reports directly to the Risk Management Committee of the Board of Directors. Credits that demonstrate significant deterioration in credit quality are transferred to a specialized group of experienced officers for individual attention.

The Company monitors credit quality indicators and utilizes portfolio scorecards to assess the risk of its commercial portfolio. Specifically, the Company utilizes a 15-point credit risk-rating system to manage risk and identify potential problem loans. Under this point system, risk-rating assignments are based upon a number of quantitative and qualitative factors that are under continual review. Factors include cash flow, collateral coverage, liquidity, leverage, position

within the industry, internal controls and management, financial reporting, and other considerations. Commercial loan risk ratings are (re)evaluated for each loan at least once-per-year. The risk-rating categories under the credit risk-rating system are defined as follows:

0 Risk Rating- Unrated

Certain segments of the portfolios are not rated. These segments include aircraft loans, business banking scored loan products, and other commercial loans managed by exception. Loans within this unrated loan segment are monitored by delinquency status; and for lines of credit greater than $100,000 in exposure, an annual review is conducted which includes the review of the business score and loan and deposit account performance. The Company supplements performance data with current business credit scores for the business banking portfolio on a quarterly basis. Unrated commercial and business banking loans are generally restricted to commercial exposure of less than $1.5 million. Loans included in this category generally are not required to provide regular financial reporting or regular covenant monitoring.

For purposes of estimating the allowance for loan losses, unrated loans are considered in the same manner as “Pass” rated loans. Unrated loans are included with “Pass” rated loans for disclosure purposes.

1-10 Risk Rating – Pass

Loans with a risk rating of 1-10 are classified as “Pass” and are comprised of loans that range from “substantially risk free” which indicates borrowers of unquestioned credit standing, well-established national companies with a very strong financial condition, and loans fully secured by policy conforming cash levels, through “low pass” which indicates acceptable rated loans that may be experiencing weak cash flow, impending lease rollover or minor liquidity concerns.

11 Risk Rating – Special Mention (Potential Weakness)

Loans to borrowers in this category exhibit potential weaknesses or downward trends deserving management’s close attention. While potentially weak, no loss of principal or interest is envisioned. Included in this category are borrowers who are performing as agreed, are weak when compared to industry standards, may be experiencing an interim loss and may be in declining industries. An element of asset quality, financial flexibility or management is below average. The Company does not consider borrowers within this category as new business prospects. Borrowers rated special mention may find it difficult to obtain alternative financing from traditional bank sources.

12 Risk Rating – Substandard (Well-Defined Weakness)

Loans with a risk-rating of 12 exhibit well-defined weaknesses that, if not corrected, may jeopardize the orderly liquidation of the debt. A loan is classified as substandard if it is inadequately protected by the repayment capacity of the obligor or by the collateral pledged. Specifically, repayment under market rates and terms, or by the requirements under the existing loan documents, is in jeopardy, but no loss of principal or interest is envisioned. There is a possibility that a partial loss of principal and/or interest will occur in the future if the deficiencies are not corrected. Loss potential, while existing in the aggregate portfolio of substandard assets, does not have to exist in individual assets classified as substandard. Non-accrual is possible, but not mandatory, in this class.

13 Risk Rating – Doubtful (Loss Probable)

Loans classified as doubtful have comparable weaknesses as found in the loans classified as substandard, with the added provision that such weaknesses make collection of the debt in full (based on currently existing facts, conditions and values) highly questionable and improbable. Serious problems exist such that a partial loss of principal is likely. The probability of loss exists, but because of reasonably specific pending factors that may work to strengthen the credit, estimated losses are deferred until a more exact status can be determined. Specific reserves will be the amount identified after specific review. Non-accrual is mandatory in this class.

14 Risk Rating – Loss

Loans to borrowers in this category are deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuance as active assets of the Company is not warranted. This classification does not mean that the loans have no recovery or salvage value, but rather, it is not practical or desirable to defer writing off these assets even though partial recovery may occur in the future. Loans in this category have a recorded investment of $0 at the time of the downgrade.

Residential and Consumer Lending Credit Quality

For the Company’s residential and consumer portfolios, the quality of the loan is best indicated by the repayment performance of an individual borrower. Updated appraisals, broker opinions of value and other collateral valuation methods are employed in the residential and consumer portfolios, typically for credits that are deteriorating. Delinquency status is determined using payment performance, while accrual status may be determined using a combination of payment performance, expected borrower viability and collateral value. Delinquent consumer loans are handled by a team of seasoned collection specialists.

The following table details the amortized cost balances of the Company’s loan portfolios, presented by credit quality indicator and origination year as of December 31, 2023, and gross charge-offs for the year ended December 31, 2023:

	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term Loans (1)		Total
	(In thousands)
Commercial and industrial
Pass	$	477,138	$	442,896	$	350,782	$	341,243	$	140,641	$	641,342	$	485,448	$	3,255	$	2,882,745
Special Mention	4,229		25,796		14,994		13,563		89		553		51,106		455		110,785
Substandard	1,534		11,995		1,775		405		—		2,581		7,803		—		26,093
Doubtful	—		—		—		—		—		8		—		—		8
Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	482,901		480,687		367,551		355,211		140,730		644,484		544,357		3,710		3,019,631
Current period gross charge-offs	—		2		—		—		—		11		—		—		13
Commercial real estate
Pass	498,590		1,435,893		855,014		573,370		516,689		1,291,189		47,581		2,556		5,220,882
Special Mention	15,200		7,990		—		736		2,281		34,803		—		—		61,010
Substandard	19,738		12,589		15,237		3,938		33,413		48,978		8,006		—		141,899
Doubtful	10,615		—		—		—		—		19,441		—		—		30,056
Loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	544,143		1,456,472		870,251		578,044		552,383		1,394,411		55,587		2,556		5,453,847
Current period gross charge-offs	2,008		—		—		—		—		6,000		—		—		8,008
Commercial construction
Pass	133,463		151,957		96,147		—		—		—		2,614		—		384,181
Special Mention	456		—		—		—		—		—		—		—		456
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial construction	133,919		151,957		96,147		—		—		—		2,614		—		384,637
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Business banking
Pass	139,237		165,247		182,606		146,180		110,638		229,636		73,054		3,996		1,050,594
Special Mention	1,474		2,553		1,009		4,294		4,692		11,479		23		27		25,551
Substandard	1,310		596		2,684		2,071		1,464		3,423		594		579		12,721
Doubtful	—		—		—		—		507		220		—		—		727
Loss	—		—		—		—		—		—		—		—		—
Total business banking	142,021		168,396		186,299		152,545		117,301		244,758		73,671		4,602		1,089,593
Current period gross charge-offs	188		161		1,596		86		654		590		—		1,370		4,645
Residential real estate
Current and accruing	257,671		728,997		665,811		354,003		93,817		451,812		—		—		2,552,111
30-89 days past due and accruing	750		6,615		2,437		2,112		1,496		8,219		—		—		21,629
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	—		1,755		1,433		291		288		4,958		—		—		8,725

Total residential real estate	258,421		737,367		669,681		356,406		95,601		464,989		—		—		2,582,465
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Consumer home equity
Current and accruing	30,393		84,065		9,151		4,899		4,166		80,687		970,882		9,472		1,193,715
30-89 days past due and accruing	148		483		—		—		—		558		7,509		223		8,921
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	—		66		—		—		—		1,466		6,770		230		8,532
Total consumer home equity	30,541		84,614		9,151		4,899		4,166		82,711		985,161		9,925		1,211,168
Current period gross charge-offs	—		—		—		—		—		—		7		—		7
Other consumer
Current and accruing	93,659		36,601		23,962		12,427		11,367		14,609		13,353		85		206,063
30-89 days past due and accruing	170		271		153		25		12		92		40		—		763
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	50		61		25		2		14		34		7		—		193
Total other consumer	93,879		36,933		24,140		12,454		11,393		14,735		13,400		85		207,019
Current period gross charge-offs	1,047		411		329		92		111		260		169		—		2,419
Total	$	1,685,825	$	3,116,426	$	2,223,220	$	1,459,559	$	921,574	$	2,846,088	$	1,674,790	$	20,878	$	13,948,360

(1)The amounts presented represent the amortized cost as of December 31, 2023 of revolving loans that were converted to term loans during the year ended December 31, 2023.

The following table details the amortized cost balances of the Company’s loan portfolios, presented by credit quality indicator and origination year as of December 31, 2022:

	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans (1)		Total
	(In thousands)
Commercial and industrial
Pass	$	778,144	$	479,317	$	415,990	$	199,865	$	100,716	$	639,825	$	473,148	$	50	$	3,087,055
Special Mention	2,298		1,307		7,267		4,841		147		—		1,196		670		17,726
Substandard	294		4,954		2,644		46		2,598		7,854		485		346		19,221
Doubtful	—		5,249		—		—		—		23		3,254		—		8,526
Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	780,736		490,827		425,901		204,752		103,461		647,702		478,083		1,066		3,132,528
Commercial real estate
Pass	1,510,675		825,620		586,567		581,840		461,296		1,006,160		52,590		4,187		5,028,935
Special Mention	—		—		771		4,204		15,366		12,255		—		—		32,596
Substandard	—		—		2,621		19,796		24,532		34,883		8,000		—		89,832
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	1,510,675		825,620		589,959		605,840		501,194		1,053,298		60,590		4,187		5,151,363
Commercial construction
Pass	91,397		178,648		28,956		20,767		—		—		12,130		—		331,898
Special Mention	—		—		2,361		—		—		—		—		—		2,361
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial construction	91,397		178,648		31,317		20,767		—		—		12,130		—		334,259

Business banking
Pass	178,806		202,230		170,088		128,282		59,452		233,484		78,080		4,770		1,055,192
Special Mention	—		991		4,635		4,605		3,740		7,584		145		—		21,700
Substandard	—		3,482		1,424		2,663		570		7,505		2,230		221		18,095
Doubtful	—		—		—		181		—		70		—		—		251
Loss	—		—		—		—		—		—		—		—		—
Total business banking	178,806		206,703		176,147		135,731		63,762		248,643		80,455		4,991		1,095,238
Residential real estate
Current and accruing	761,442		696,959		382,262		99,494		66,702		434,720		—		—		2,441,579
30-89 days past due and accruing	4,652		5,470		1,245		2,762		2,951		11,646		—		—		28,726
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	—		—		144		1,491		1,015		7,100		—		—		9,750
Total residential real estate	766,094		702,429		383,651		103,747		70,668		453,466		—		—		2,480,055
Consumer home equity
Current and accruing	97,395		10,774		5,840		5,015		21,092		73,927		953,829		7,320		1,175,192
30-89 days past due and accruing	559		—		—		—		72		944		7,239		247		9,061
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	—		—		—		61		274		1,303		5,120		296		7,054
Total consumer home equity	97,954		10,774		5,840		5,076		21,438		76,174		966,188		7,863		1,191,307
Other consumer
Current and accruing	55,414		32,390		17,641		18,298		18,832		16,603		17,476		—		176,654
30-89 days past due and accruing	143		68		43		61		240		178		58		7		798
Loans 90 days or more past due and still accruing	—		—		—		—		—		—		—		—		—
Non-accrual	31		93		39		2		92		44		15		10		326
Total other consumer	55,588		32,551		17,723		18,361		19,164		16,825		17,549		17		177,778
Total	$	3,481,250	$	2,447,552	$	1,630,538	$	1,094,274	$	779,687	$	2,496,108	$	1,614,995	$	18,124	$	13,562,528

(1)The amounts presented represent the amortized cost as of December 31, 2022 of revolving loans that were converted to term loans during the year ended December 31, 2022.

Asset Quality

The Company manages its loan portfolio with careful monitoring. As a general rule, loans more than 90 days past due with respect to principal and interest are classified as non-accrual loans. Exceptions may be made if management believes that collateral held by the Company is clearly sufficient and in full satisfaction of both principal and interest. The Company may also use discretion regarding other loans over 90 days delinquent if the loan is well secured and in the process of collection. Non-accrual loans and loans that are more than 90 days past due but still accruing interest are considered non-performing loans.

Non-accrual loans may be returned to an accrual status when principal and interest payments are no longer delinquent, and the risk characteristics of the loan have improved to the extent that there no longer exists a concern as to the collectability of principal and interest. Loans are considered past due based upon the number of days delinquent according to their contractual terms.

A loan is expected to remain on non-accrual status until it becomes current with respect to principal and interest, the loan is liquidated, or the loan is determined to be uncollectible and is charged-off against the allowance for loan losses.

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

	As of December 31, 2023
	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	$	3,316	$	—	$	465	$	3,781	$	3,015,850	$	3,019,631
Commercial real estate	—		—		—		—		5,453,847		5,453,847
Commercial construction	—		—		—		—		384,637		384,637
Business banking	3,455		1,647		1,202		6,304		1,083,289		1,089,593
Residential real estate	17,116		4,888		6,764		28,768		2,553,697		2,582,465
Consumer home equity	6,517		2,600		8,204		17,321		1,193,847		1,211,168
Other consumer	532		235		189		956		206,063		207,019
Total	$	30,936	$	9,370	$	16,824	$	57,130	$	13,891,230	$	13,948,360

	As of December 31, 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	$	1,300	$	385	$	2,074	$	3,759	$	3,128,769	$	3,132,528
Commercial real estate	—		—		—		—		5,151,363		5,151,363
Commercial construction	—		—		—		—		334,259		334,259
Business banking	6,642		845		3,517		11,004		1,084,234		1,095,238
Residential real estate	25,877		3,852		6,456		36,185		2,443,870		2,480,055
Consumer home equity	8,262		1,108		6,525		15,895		1,175,412		1,191,307
Other consumer	634		170		320		1,124		176,654		177,778
Total	$	42,715	$	6,360	$	18,892	$	67,967	$	13,494,561	$	13,562,528

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

	As of December 31, 2023						As of December 31, 2022
	Non-Accrual Loans With ACL		Non-Accrual Loans Without ACL (1)		Total Non-Accrual Loans		Non-Accrual Loans With ACL		Non-Accrual Loans Without ACL (1)		Total Nonaccrual Loans
	(In thousands)
Commercial and industrial	$	4	$	464	$	468	$	3,270	$	10,707	$	13,977
Commercial real estate	13,969		16,087		30,056		—		—		—
Commercial construction	—		—		—		—		—		—
Business banking	4,572		11		4,583		5,844		1,653		7,497
Residential real estate	8,725		—		8,725		9,750		—		9,750
Consumer home equity	8,532		—		8,532		7,054		—		7,054
Other consumer	193		—		193		326		—		326
Total non-accrual loans	$	35,995	$	16,562	$	52,557	$	26,244	$	12,360	$	38,604

(1)The loans on non-accrual status and without an ACL as of both December 31, 2023 and December 31, 2022, were primarily comprised of collateral dependent loans for which the fair value of the underlying loan collateral exceeded the loan carrying value.

The amount of interest income recognized on non-accrual loans during the year ended December 31, 2023 and 2022 was not significant. As of both December 31, 2023 and December 31, 2022, there were no loans greater than 90 days past due and still accruing.

It is the Company’s policy to reverse any accrued interest when a loan is put on non-accrual status and, generally, to record any payments received from a borrower related to a loan on non-accrual status as a reduction of the amortized cost basis of the loan. Accrued interest reversed against interest income for the years ended December 31, 2023 and 2022 was not significant.

For collateral values for residential mortgage and home equity loans, the Company relies primarily upon third-party valuation information from certified appraisers and values are generally based upon recent appraisals of the underlying collateral, brokers’ opinions based upon recent sales of comparable properties, or estimated auction or liquidation values less estimated costs to sell. As of December 31, 2023 and December 31, 2022, the Company had collateral-dependent residential mortgage and home equity loans totaling $0.8 million and $0.6 million, respectively.

For collateral-dependent commercial loans, the amount of the allowance for loan losses is individually assessed based upon the fair value of the collateral. Various types of collateral are used, including real estate, inventory, equipment, accounts receivable, securities and cash, among others. For commercial real estate loans, the Company relies primarily upon third-party valuation information from certified appraisers and values are generally based upon recent appraisals of the underlying collateral, brokers’ opinions based upon recent sales of comparable properties, estimated equipment auction or liquidation values, income capitalization, or a combination of income capitalization and comparable sales. As of December 31, 2023 and December 31, 2022, the Company had collateral-dependent commercial loans totaling $30.7 million and $16.2 million, respectively.

Appraisals for all loan types are obtained at the time of loan origination as part of the loan approval process and are updated at the time of a loan modification and/or refinance and as considered necessary by management for impairment review purposes. In addition, appraisals are updated as required by regulatory pronouncements.

As of both December 31, 2023 and December 31, 2022, the Company had no residential real estate held in other real estate owned (“OREO”). As of December 31, 2023, there were two residential real estate loans, which had a balance of $0.2 million, collateralized by residential real estate property for which formal foreclosure proceedings were in-process. As of December 31, 2022, there were no mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings were in-process. As of December 31, 2023, there were three consumer home equity loans, which had a total balance of $0.2 million, collateralized by residential real estate property for which formal foreclosure proceedings were in-process. As of December 31, 2022, there were no consumer home equity loans collateralized by residential real estate property for which formal foreclosure proceedings were in-process.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The following table shows the amortized cost balance as of December 31, 2023 of loans modified during the year ended December 31, 2023 to borrowers experiencing financial difficulty by the type of concession granted:

	As of December 31, 2023
	Amortized Cost Balance		% of Total Portfolio
	(Dollars in thousands)
Interest Rate Reduction:
Business banking	$	43	0.00	%
Residential real estate	301		0.01	%
Consumer home equity	1,883		0.16	%
Total interest rate reduction	$	2,227	0.02	%
Other-than-Insignificant Delay in Repayment:
Business banking	$	20	0.00	%
Residential real estate	3,284		0.13	%
Consumer home equity	1,004		0.08	%
Total other-than-insignificant delay in repayment	$	4,308	0.03	%
Term Extension:
Business banking	$	274	0.03	%
Total term extension	$	274	0.00	%
Combination—Interest Rate Reduction & Other-than-Insignificant Delay in Repayment:
Commercial real estate	$	10,615	0.19	%
Business banking	86		0.01	%
Consumer home equity	603		0.05	%
Total combination—interest rate reduction & other-than-insignificant delay in repayment	$	11,304	0.08	%
Combination—Interest Rate Reduction & Term Extension:
Business banking	$	561	0.05	%
Consumer home equity	213		0.02	%
Total combination—interest rate reduction & term extension	$	774	0.01	%
Combination—Term Extension & Other-than-Insignificant Delay in Repayment:
Business banking	$	24	0.00	%
Residential real estate	140		0.01	%
Total combination—term extension & other-than-insignificant delay in repayment	$	164	0.00	%
Combination—Interest Rate Reduction, Term Extension & Other-than-Insignificant Delay in Repayment
Business banking	$	180	0.02	%
Residential real estate	81		0.00	%
Consumer home equity	51		0.00	%
Total combination—interest rate reduction, term extension & other-than-insignificant delay in repayment	$	312	0.00	%
Total by portfolio segment
Commercial real estate	$	10,615	0.19	%
Business banking	1,188		0.11	%
Residential real estate	3,806		0.15	%
Consumer home equity	3,754		0.31	%
Total	$	19,363	0.14	%

The following table describes the financial effect of the modifications made during the year ended December 31, 2023 to borrowers experiencing financial difficulty:

Loan Type	Financial Effect (1)
Interest Rate Reduction
Commercial real estate	Reduced weighted-average contractual interest rate from 7.4% to 3.4%.
Business banking	Reduced weighted-average contractual interest rate from 9.8% to 7.6%.
Residential real estate	Reduced weighted-average contractual interest rate from 5.4% to 3.6%.
Consumer home equity	Reduced weighted-average contractual interest rate from 7.5% to 4.5%.
Other-than-Insignificant Delay in Repayment
Commercial real estate	Interest-only period of 9 months for one borrower. Principal deferred to the end of the loan life.
Business banking	Deferred a weighted average of 4 payments. For principal and interest deferrals, the loans were re-amortized over an extended payment period resulting in reduced monthly payment amounts for the borrowers. For interest-only deferrals, interest accrued at the time of the modification was added to the end of the loan life.
Residential real estate	Deferred a weighted average of 7 principal and interest payments which were added to the end of the loan life.
Consumer home equity	Deferred a weighted average of 8 principal and interest payments which were added to the end of the loan life.
Term Extension
Business banking	Added a weighted-average 4.3 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Residential real estate	Added a weighted-average 23.7 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Consumer home equity	Added a weighted-average 16.8 years to the life of loans, which reduced monthly payment amounts for the borrowers.

(1)Loans that were modified in more than one manner are included in each modification type corresponding to the type of modifications performed.

As of December 31, 2023, no loans to borrowers experiencing financial difficulty modified during the year ended December 31, 2023 had a payment default during the 12-month period ended December 31, 2023.

Management closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the age analysis of past due loans to borrowers experiencing financial difficulty as of December 31, 2023 that were modified during the 12-month period ended December 31, 2023:

	As of December 31, 2023
	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total
	(In thousands)
Commercial real estate	$	—	$	—	$	—	$	—	$	10,615	$	10,615
Business banking	—		—		—		—		1,188		1,188
Residential real estate	366		227		—		593		3,213		3,806
Consumer home equity	51		—		400		451		3,303		3,754
Total	$	417	$	227	$	400	$	1,044	$	18,319	$	19,363

As of December 31, 2023, there were no additional commitments to lend to borrowers experiencing financial difficulty and which were modified during the year ended December 31, 2023 in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant delay in repayment, or a term extension.

Loan Participations

The Company occasionally purchases commercial loan participations, or participates in syndications through the SNC Program. These participations meet the same underwriting, credit and portfolio management standards as the Company’s other loans and are applied against the same criteria to determine the allowance for loan losses as other loans.

The following table summarizes the Company’s loan participations:

	As of and for the Year Ended December 31,
	2023						2022
	Balance		Non-performing Loan Rate (%)		Gross Charge-offs		Balance		Non-performing Loan Rate (%)		Gross Charge-offs
	(Dollars in thousands)
Commercial and industrial	$	985,394	0.00	%	$	—	$	1,024,131	0.83	%	$	—
Commercial real estate	447,550		0.00	%	—		422,042		0.00	%	—
Commercial construction	146,043		0.00	%	—		96,134		0.00	%	—
Business banking	72		0.00	%	22		51		0.00	%	3
Total loan participations	$	1,579,059	0.00	%	$	22	$	1,542,358	0.55	%	$	3

Troubled Debt Restructurings (“TDR”)

As described previously in Note 2, “Summary of Significant Accounting Policies,” the Company adopted ASU 2022-02 on January 1, 2023 which eliminated TDR accounting. Previously, in cases where a borrower experienced financial difficulty and the Company made certain concessionary modifications to contractual terms, the loan was classified as a TDR. The process through which management identified loans as TDR loans, the methodology employed to record any loan losses, and the calculation of any shortfall on collateral dependent loans is described within Note 2, “Summary of Significant Accounting Policies.” The below disclosures regarding TDRs relate to prior periods and were included for comparative purposes.

The Company’s policy was to have any TDR loan which was on non-accrual status prior to being modified remain on non-accrual status for approximately six months subsequent to being modified before management considered its return to accrual status. If the TDR loan was on accrual status prior to being modified, it was reviewed to determine if the modified loan should remain on accrual status.

TDR loan information as of December 31, 2022 and the year ended December 31, 2021 was prepared in accordance with GAAP effective for the Company prior to the Company’s adoption of ASU 2022-02.

The following table shows the TDR loans on accrual and non-accrual status as of December 31, 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	$	4,449	9	$	11,317	11	$	15,766
Business banking	11	4,124		22	2,101		33	6,225
Residential real estate	114	17,618		28	4,016		142	21,634
Consumer home equity	51	2,632		19	1,917		70	4,549
Other consumer	1	11		—	—		1	11
Total	179	$	28,834	78	$	19,351	257	$	48,185

At December 31, 2022, the outstanding recorded investment of loans that were new TDR loans during the year ended December 31, 2022 was $11.0 million. The amount of allowance for loan losses associated with the TDR loans was $1.8 million at December 31, 2022. There were no additional commitments to lend to borrowers who have been party to a TDR as of December 31, 2022.

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

	For the Years Ended December 31,
	2022					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)
Commercial and industrial	4	$	5,415	$	5,415	—	$	—	$	—
Business banking	30	2,779		2,798		—	—		—
Residential real estate	10	2,842		2,842		2	498		498
Consumer home equity	7	1,535		1,535		3	300		300
Total	51	$	12,571	$	12,590	5	$	798	$	798

(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 Years Ended December 31,
	2022		2021
	(In thousands)
Extended maturity	$	1,011	$	200
Adjusted interest rate and extended maturity	1,088		—
Interest only/principal deferred	1,499		—
Covenant modification	2,418		—
Court-ordered concession	—		396
Principal and interest deferred	3,353		—
Extended maturity and interest only/principal deferred	2,997		—
Other	224		202
Total	$	12,590	$	798

One loan totaling approximately $1.0 million that was modified during the preceding 12 months subsequently defaulted during the year ended December 31, 2022. No loans were modified during the preceding 12 months which subsequently defaulted during the year ended December 31, 2021. The Company considers a loan to have defaulted when it reaches 90 days past due or is transferred to non-accrual. During the years ended December 31, 2022 and 2021, no amounts were charged-off on TDRs modified in the prior 12 months.

Allowance for Loan Losses

As described in Note 2, “Summary of Significant Accounting Policies,” the Company adopted ASU 2016-13 effective January 1, 2022. The Company has included comparative prior period disclosures of its allowance for loan losses which were prepared in accordance with ASC 450, “Contingencies” and ASC 310, “Receivables” (i.e., prior to the Company’s adoption of ASU 2016-13). Refer to the Company’s 2021 Form 10-K for significant accounting policies related to the Company’s allowance for loan losses as of December 31, 2021. A discussion of the Company’s calculation of its allowance for loan losses for the year ended December 31, 2021 follows.

The allowance for loan losses was established to provide for probable losses incurred in the Company’s loan portfolio at the balance sheet date and was established through a provision for loan losses charged to net income. Charge-offs, net of recoveries, were charged directly to the allowance. Commercial and residential loans were charged-off in the period in which they were deemed uncollectible. Delinquent loans in these product types were subject to ongoing review and analysis to determine if a charge-off in the current period was appropriate. For consumer loans, policies and procedures existed that required charge-off consideration upon a certain triggering event depending on the product type.

Management used a methodology to systematically estimate the amount of losses incurred in the portfolio. Commercial real estate, commercial and industrial, commercial construction and business banking loans were evaluated using a loan rating system, historical losses and other factors which formed the basis for estimating incurred losses. Portfolios of more homogeneous populations of loans, including residential mortgages and consumer loans, were analyzed as groups taking into account delinquency ratios, historical loss experience and charge-offs. For the purpose of estimating the allowance for loan losses, management segregated the loan portfolio into the categories noted in the credit quality tables presented in the “Credit Quality” section above. Each of these loan categories possessed unique risk characteristics such as the purpose of the loan, repayment source, and collateral. These characteristics were considered when determining the appropriate level of the allowance for each category. The Company’s historical approach to loan portfolio segmentation by risk characteristics and monitoring of credit quality for commercial loans under previous accounting guidance was consistent with that applied under the CECL standard.

The following table summarizes the change in allowance for loan losses by loan category for the year ended December 31, 2021:

	For the Year Ended 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:
Beginning balance	$	26,617	$	54,569	$	4,553	$	13,152	$	6,435	$	3,744	$	3,467	$	494	$	113,031
Charge-offs	(1,558)		(247)		—		(5,091)		(35)		(24)		(2,047)		—		(9,002)
Recoveries	935		4		—		1,524		122		185		674		—		3,444
(Release of) Provision	(7,976)		(1,953)		(1,968)		1,398		34		(183)		1,214		(252)		(9,686)
Ending balance	$	18,018	$	52,373	$	2,585	$	10,983	$	6,556	$	3,722	$	3,308	$	242	$	97,787

Impaired Loans

As described in Note 2, “Summary of Significant Accounting Policies,” the Company adopted ASU 2016-13 effective January 1, 2022. The Company has included certain prior period disclosures related to impaired loans for comparative purposes. Under previous accounting guidance, impaired loans consisted of all loans for which management had determined it was probable that the Company would be unable to collect all amounts due according to the contractual terms of the loan agreements. Factors considered by management in determining impairment included payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Refer to the Company’s 2021 Form 10-K for significant accounting policies related to impaired loans. A discussion of the Company’s calculation of its loan impairment for the year ended December 31, 2021 follows.

The Company measured impairment of loans using a discounted cash flow method, the loan’s observable market price, or the fair value of the collateral if the loan was collateral dependent. The Company defined the population of impaired loans to include certain non-accrual loans, TDR loans, and residential and home equity loans that had been partially charged off.

The following table displays information regarding interest income recognized on impaired loans, by portfolio, for the year ended December 31, 2021:

	For the Year Ended December 31, 2021
	Average Recorded Investment		Total Interest Recognized
	(In thousands)
With no allowance recorded:
Commercial and industrial	$	11,813	$	161
Commercial real estate	3,916		178
Business banking	4,352		99
Residential real estate	12,506		456
Consumer home equity	2,027		62
Other consumer	23		—
Sub-total	34,637		956
With an allowance recorded:
Commercial and industrial	7,229		—
Commercial real estate	926		—
Business banking	13,027		57
Residential real estate	12,322		474
Consumer home equity	2,106		65
Other consumer	63		—
Sub-total	35,673		596
Total	$	70,310	$	1,552

Purchased Credit Impaired Loans

As described in Note 2, “Summary of Significant Accounting Policies,” the Company adopted ASU 2016-13 effective January 1, 2022. The Company has included prior period disclosures related to PCI loans for comparative purposes. Under previous accounting guidance, the excess of cash flows expected to be collected over the carrying amount of the PCI loans, referred to as the “accretable yield,” was accreted into interest income over the life of the loans using the effective yield method. The adoption of ASU 2016-13 eliminated the concept of and accounting related to PCI loans. The following table summarizes activity in the accretable yield for the PCI loan portfolio:

	For the Year Ended December 31, 2021
	(In thousands)
Balance at beginning of period	$	2,495
Acquisition	8,896
Accretion	(1,194)
Other change in expected cash flows	(1,475)
Reclassification from non-accretable difference for loans with improved cash flows	1,649
Balance at end of period	$	10,371

The estimate of cash flows expected to be collected was regularly re-assessed subsequent to acquisition. A decrease in expected cash flows in subsequent periods may have indicated that the loan was impaired which would require the establishment of an allowance for loan losses by a charge to the provision for loan losses. An increase in expected cash flows in subsequent periods served, first, to reduce any previously established allowance for loan losses by the increase in the present value of cash flows expected to be collected, and resulted in a recalculation of the amount of accretable yield for the loan. The adjustment of accretable yield due to an increase in expected cash flows was accounted for as a change in estimate. The additional cash flows expected to be collected were reclassified from the non-accretable difference to the accretable yield, and the amount of periodic accretion was adjusted accordingly over the remaining life of the loans.