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Loans And Allowance For Credit Losses
 9 Months Ended
Sep. 30, 2020
Loans And Allowance For Credit Losses [Abstract]  
Loans And Allowance For Credit Losses Loans and Allowance for Credit Losses
Major classifications within the Company’s held for investment loan portfolio at September 30, 2020 and December 31, 2019 are as follows:

(In thousands)
September 30, 2020December 31, 2019
Commercial:
Business$6,683,413 $5,565,449 
Real estate – construction and land1,009,729 899,377 
Real estate – business2,993,192 2,833,554 
Personal Banking:
Real estate – personal2,753,867 2,354,760 
Consumer2,006,360 1,964,145 
Revolving home equity324,203 349,251 
Consumer credit card647,893 764,977 
Overdrafts2,270 6,304 
Total loans (1)
$16,420,927 $14,737,817 
(1) Accrued interest receivable totaled $41.3 million at September 30, 2020 and was included within other assets on the consolidated balance sheet. For the three months ended September 30, 2020, the Company wrote-off accrued interest by reversing interest income of $89 thousand and $1.7 million in the Commercial and Personal Banking portfolios, respectively. Similarly, for the nine months ended September 30, 2020, the Company wrote-off accrued interest of $258 thousand and $4.4 million in the Commercial and Personal Banking portfolios, respectively.

At September 30, 2020, loans of $4.1 billion were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. Additional loans of $1.5 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings.

Allowance for credit losses
The allowance for credit losses is measured using an average historical loss model which incorporates relevant information about past events, including historical credit loss experience on loans with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics including borrower type, collateral type and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily large loans on non-accrual status, are evaluated on an individual basis.

For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given a single path economic forecast of key macroeconomic variables including GDP, disposable income, unemployment rate, various interest rates, CPI inflation rate, HPI, CREPI and market volatility. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting back to historical averages using a straight-line method. The forecast adjusted loss rate is applied to the loans over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions (except for contractual extensions at the option of the customer), renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed. Credit cards and certain similar consumer lines of credit do not have stated maturities and therefore, for these loan classes, remaining contractual lives are determined by estimating future cash flows expected to be received from customers until payments have been fully allocated to outstanding balances. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions.
Key model assumptions in the Company’s allowance for credit loss model include the economic forecast, the reasonable and supportable period, prepayment assumptions and qualitative factors applied for portfolio composition changes, underwriting practices, or significant unique events or conditions. The assumptions utilized in estimating the Company’s allowance for credit losses at September 30, 2020 and June 30, 2020 are discussed below.

Key AssumptionSeptember 30, 2020June 30, 2020
Overall economic forecast
•The recovery from the Global Coronavirus Recession (GCR) continues to be gradual
•Assumes no additional systemic lockdown measures
•Gradual recovery in late 2021 and into 2022
•Significant uncertainty regarding the pandemic and its impact on economy
•The recovery from the Global Coronavirus Recession (GCR) is gradual
•Assumes no second wave of contagion and states continue to loosen lockdown measures
•Gradual recovery in late 2021 and into 2022
•Significant uncertainty regarding the pandemic and its impact on economy
Reasonable and supportable period and related reversion period
•Two years for both commercial and personal banking loans
•Reversion to historical average loss rates within two quarters using a straight-line method
•Two years for both commercial and personal banking loans
•Reversion to historical average loss rates within two quarters using a straight-line method
Forecasted macro-economic variables
•Unemployment rate ranging from 8.8% to 5.3% during the supportable forecast period
•Real GDP growth ranges from 4.4% to 2.4%
•Prime rate of 3.25%
•Unemployment rate ranging from 10.9% to 5.7% during the supportable forecast period
•Real GDP growth ranges from 3.0% to 25.7%
•Prime rate of 3.25%
Prepayment assumptions
Commercial loans
•5% for most loan pools
Personal banking loans
•Ranging from 21.6% to 23.5% for most loan pools
•58.0% for consumer credit cards
Commercial loans
•5% for most loan pools
Personal banking loans
•Ranging from 18.7% to 23.3% for most loan pools
•58.0% for consumer credit cards
Qualitative factors
Added net reserves using qualitative processes related to:
•Loans originated in our recent expansion markets, loans that are designated as shared national credits, and certain COVID-19 deferral program loans.
•Changes in the composition of the loan portfolios
•Loans downgraded to special mention, substandard, or non-accrual status
Added net reserves using qualitative processes related to:
•Loans originated in our recent expansion markets and loans that are designated as shared national credits
•Changes in the composition of the loan portfolios
•Loans downgraded to special mention, substandard, or non-accrual status

The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded.

Sensitivity in the Allowance for Credit Loss model
The allowance for credit losses is an estimate that requires significant judgment including projections of the macro-economic environment. The forecasted macro-economic environment continuously changes which can cause fluctuations in estimated expected losses.

The current forecast projects a sharp recession with a recovery in the next two years as a result of the COVID-19 outbreak. This pandemic is unprecedented and information that could be used in the estimation of the allowance for credit losses changes frequently. Events such as the timing of governmental required business lock downs or possible additional waves of infection could prolong and deepen the projected recession.
A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments during the three and nine months ended September 30, 2020 follows:

For the Three Months Ended September 30For the Nine Months Ended September 30
(In thousands)
CommercialPersonal Banking

Total
CommercialPersonal Banking

Total
ALLOWANCE FOR CREDIT LOSSES ON LOANS
Balance at end of prior period$130,553 $110,191 $240,744 $91,760 $68,922 $160,682 
Adoption of ASU 2016-13— — — (29,711)8,672 (21,039)
Balance at beginning of period$130,553 $110,191 $240,744 $62,049 $77,594 $139,643 
Provision for credit losses on loans(1,935)5,135 3,200 69,418 54,141 123,559 
Deductions:
   Loans charged off357 10,292 10,649 4,159 32,127 36,286 
   Less recoveries on loans163 2,902 3,065 1,116 8,328 9,444 
Net loan charge-offs194 7,390 7,584 3,043 23,799 26,842 
Balance September 30, 2020$128,424 $107,936 $236,360 $128,424 $107,936 $236,360 
LIABILITY FOR UNFUNDED LENDING COMMITMENTS
Balance at end of prior period$34,052 $1,247 $35,299 $399 $676 $1,075 
Adoption of ASU 2016-13— — — 16,057 33 16,090 
Balance at beginning of period$34,052 $1,247 $35,299 $16,456 $709 $17,165 
Provision for credit losses on unfunded lending commitments(60)(39)(99)17,536 499 18,035 
Balance September 30, 2020$33,992 $1,208 $35,200 $33,992 $1,208 $35,200 
ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS$162,416 $109,144 $271,560 $162,416 $109,144 $271,560 

Allowance for loan losses
A summary of the activity in the allowance for loan losses during the three and nine months ended September 30, 2019 follows:

For the Three Months Ended September 30For the Nine Months Ended September 30
(In thousands)CommercialPersonal Banking

Total
CommercialPersonal Banking
Total
Balance at beginning of period$91,808 $69,374 $161,182 $92,869 $67,063 $159,932 
Provision for loan losses553 10,410 10,963 55 35,177 35,232 
Deductions:
   Loans charged off490 13,990 14,480 1,436 42,233 43,669 
   Less recoveries on loans199 2,818 3,017 582 8,605 9,187 
Net loan charge-offs291 11,172 11,463 854 33,628 34,482 
Balance September 30, 2019$92,070 $68,612 $160,682 $92,070 $68,612 $160,682 
Delinquent and non-accrual loans
The Company considers loans past due on the day following the contractual repayment date, if the contractual repayment was not received by the Company as of the end of the business day. The following table provides aging information on the Company’s past due and accruing loans, in addition to the balances of loans on non-accrual status, at September 30, 2020 and December 31, 2019.




(In thousands)
Current or Less Than 30 Days Past Due

30 – 89
Days Past Due
90 Days Past Due and Still AccruingNon-accrual



Total
September 30, 2020
Commercial:
Business$6,636,383 $7,106 $2,629 $37,295 $6,683,413 
Real estate – construction and land991,404 18,320 4 1 1,009,729 
Real estate – business2,987,992 4,137 — 1,063 2,993,192 
Personal Banking:
Real estate – personal 2,743,260 6,029 2,667 1,911 2,753,867 
Consumer1,983,820 20,329 2,211 — 2,006,360 
Revolving home equity322,572 1,237 394 — 324,203 
Consumer credit card629,181 12,181 6,531 — 647,893 
Overdrafts2,080 190 — — 2,270 
Total $16,296,692 $69,529 $14,436 $40,270 $16,420,927 
December 31, 2019
Commercial:
Business$5,545,104 $12,064 $792 $7,489 $5,565,449 
Real estate – construction and land882,826 13,046 3,503 2 899,377 
Real estate – business2,830,494 2,030 — 1,030 2,833,554 
Personal Banking:
Real estate – personal 2,345,243 6,129 1,689 1,699 2,354,760 
Consumer1,928,082 34,053 2,010 — 1,964,145 
Revolving home equity347,258 1,743 250 — 349,251 
Consumer credit card742,659 10,703 11,615 — 764,977 
Overdrafts5,972 332 — — 6,304 
Total $14,627,638 $80,100 $19,859 $10,220 $14,737,817 

At September 30, 2020, the Company had $20.6 million of non-accrual business loans that had no allowance for credit loss. The Company did not record any interest income on non-accrual loans during the three and nine months ended September 30, 2020.

Credit quality indicators
The following table provides information about the credit quality of the Commercial loan portfolio. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment based on borrower specific information including but not limited to current financial information, historical payment experience, industry information, collateral levels and collateral types. The “pass” category consists of a range of loan grades that reflect increasing, though still acceptable, risk. A loan is assigned the risk rating at origination and then monitored throughout the contractual term for possible risk rating changes. Movement of risk through the various grade levels in the “pass” category is monitored for early identification of credit deterioration. The “special mention” rating is applied to loans where the borrower exhibits negative financial trends due to borrower specific or systemic conditions that, if left uncorrected, threaten its capacity to meet its debt obligations. The borrower is believed to have sufficient financial flexibility to react to and resolve its negative financial situation. It is a transitional grade that is closely monitored for improvement or deterioration. The “substandard” rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non-accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment.

All loans are analyzed for risk rating updates annually. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past
due related to credit issues. Loans rated Special Mention, Substandard or Non-accrual are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by a credit review department which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan.

The risk category of loans in the Commercial portfolio as of September 30, 2020 are as follows:
Term Loans Amortized Cost Basis by Origination Year
(In thousands)20202019201820172016PriorRevolving Loans Amortized Cost BasisTotal
Business
    Risk Rating:
       Pass$2,394,434 $1,097,498 $518,966 $356,416 $186,992 $307,681 $1,535,511 $6,397,498 
       Special mention29,620 28,518 17,532 1,120 5,773 1,843 63,973 148,379 
       Substandard16,118 26,401 2,139 2,849 3,608 13,879 35,247 100,241 
       Non-accrual19,948 — 2,065 16 125 3,845 11,296 37,295 
   Total Business:$2,460,120 $1,152,417 $540,702 $360,401 $196,498 $327,248 $1,646,027 $6,683,413 
Real estate-construction
    Risk Rating:
       Pass$407,465 $323,632 $131,606 $49,040 $24,660 $682 $32,865 $969,950 
       Special mention— — 10,107 14,555 — — — 24,662 
       Substandard1,354 — 593 13,169 — — — 15,116 
       Non-accrual1 — — — — — — 1 
    Total Real estate-construction:$408,820 $323,632 $142,306 $76,764 $24,660 $682 $32,865 $1,009,729 
Real estate- business
    Risk Rating:
       Pass$713,079 $698,287 $384,214 $283,843 $329,613 $238,663 $46,224 $2,693,923 
       Special mention24,660 11,959 45,547 6,943 20,837 1,285 2 111,233 
       Substandard57,938 6,099 11,228 57,364 17,306 33,472 3,566 186,973 
       Non-accrual1 285 624 — — 153 — 1,063 
   Total Real-estate business:$795,678 $716,630 $441,613 $348,150 $367,756 $273,573 $49,792 $2,993,192 
Commercial loans
    Risk Rating:
       Pass$3,514,978 $2,119,417 $1,034,786 $689,299 $541,265 $547,026 $1,614,600 $10,061,371 
       Special mention54,280 40,477 73,186 22,618 26,610 3,128 63,975 284,274 
       Substandard75,410 32,500 13,960 73,382 20,914 47,351 38,813 302,330 
       Non-accrual19,950 285 2,689 16 125 3,998 11,296 38,359 
   Total Commercial loans:$3,664,618 $2,192,679 $1,124,621 $785,315 $588,914 $601,503 $1,728,684 $10,686,334 

Information about the credit quality of the Commercial loan portfolio as of December 31, 2019 follows:

Commercial Loans


(In thousands)


Business
Real
 Estate-Construction
Real
Estate-
Business


Total
December 31, 2019
Pass$5,393,928 $856,364 $2,659,827 $8,910,119 
Special mention80,089 42,541 92,626 215,256 
Substandard83,943 470 80,071 164,484 
Non-accrual7,489 2 1,030 8,521 
Total $5,565,449 $899,377 $2,833,554 $9,298,380 
The credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided as of September 30, 2020 below:
Term Loans Amortized Cost Basis by Origination Year
(In thousands)20202019201820172016PriorRevolving Loans Amortized Cost BasisTotal
Real estate-personal
       Current to 90 days past due$897,007 $532,003 $238,092 $227,499 $247,754 $595,713 $11,221 $2,749,289 
       Over 90 days past due273 394 422 361 357 860 — 2,667 
       Non-accrual— 195 129 45 121 1,421 — 1,911 
   Total Real estate-personal:$897,280 $532,592 $238,643 $227,905 $248,232 $597,994 $11,221 $2,753,867 
Consumer
       Current to 90 days past due$446,909 $380,399 $188,186 $137,253 $90,236 $104,466 $656,700 $2,004,149 
       Over 90 days past due76 337 158 176 162 278 1,024 2,211 
    Total Consumer:$446,985 $380,736 $188,344 $137,429 $90,398 $104,744 $657,724 $2,006,360 
Revolving home equity
       Current to 90 days past due$— $— $— $— $— $— $323,809 $323,809 
       Over 90 days past due— — — — — — 394 394 
   Total Revolving home equity:$— $— $— $— $— $— $324,203 $324,203 
Consumer credit card
       Current to 90 days past due$— $— $— $— $— $— $641,362 $641,362 
       Over 90 days past due— — — — — — 6,531 6,531 
   Total Consumer credit card:$— $— $— $— $— $— $647,893 $647,893 
Overdrafts
       Current to 90 days past due$2,270 $— $— $— $— $— $— $2,270 
       Over 90 days past due— — — — — — — — 
    Total Overdrafts:$2,270 $— $— $— $— $— $— $2,270 
Personal banking loans
       Current to 90 days past due$1,346,186 $912,402 $426,278 $364,752 $337,990 $700,179 $1,633,092 $5,720,879 
       Over 90 days past due349 731 580 537 519 1,138 7,949 11,803 
       Non-accrual— 195 129 45 121 1,421 — 1,911 
   Total Personal banking loans:$1,346,535 $913,328 $426,987 $365,334 $338,630 $702,738 $1,641,041 $5,734,593 

Collateral-dependent loans
The Company's collateral-dependent loans are comprised of large loans on non-accrual status. The Company requires that collateral-dependent loans are either over-collateralized or carry collateral equal to the amortized cost of the loan. The following table presents the amortized cost basis of collateral-dependent loans as of September 30, 2020.
(In thousands)Business AssetsFuture Revenue StreamsEnergyTotal
Commercial:
  Business$18,843 $3,616 $14,276 $36,734 
Total$18,843 $3,616 $14,276 $36,734 
Other Personal Banking loan information
As noted above, the credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided in the table in the above section on "Credit quality indicators." In addition, FICO scores are obtained and updated on a quarterly basis for most of the loans in the Personal Banking portfolio. This is a published credit score designed to measure the risk of default by taking into account various factors from a borrower's financial history and is considered supplementary information utilized by the Company, as management does not consider this information in evaluating the allowance for credit losses on loans. The Bank normally obtains a FICO score at the loan's origination and renewal dates, and updates are obtained on a quarterly basis. Excluded from the table below are certain personal real estate loans for which FICO scores are not obtained because the loans generally pertain to commercial customer activities and are often underwritten with other collateral considerations. These loans totaled $183.3 million at September 30, 2020 and $198.2 million at December 31, 2019. The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $193.2 million at September 30, 2020 and $199.2 million at December 31, 2019. As the healthcare loans are guaranteed by the hospital, customer FICO scores are not obtained for these loans. The personal real estate loans and consumer loans excluded below totaled less than 7% of the Personal Banking portfolio. For the remainder of loans in the Personal Banking portfolio, the table below shows the percentage of balances outstanding at September 30, 2020 and December 31, 2019 by FICO score.

   Personal Banking Loans
% of Loan Category
Real Estate - PersonalConsumerRevolving Home EquityConsumer Credit Card
September 30, 2020
FICO score:
Under 6001.0 %2.4 %1.4 %5.2 %
600 - 6592.1 3.9 2.5 12.9 
660 - 7198.5 14.5 7.3 32.2 
720 - 77925.7 25.6 22.6 27.5 
780 and over62.7 53.6 66.2 22.2 
Total100.0 %100.0 %100.0 %100.0 %
December 31, 2019
FICO score:
Under 6001.0 %3.0 %1.7 %5.6 %
600 - 6591.9 5.2 1.9 14.3 
660 - 7199.2 15.4 9.0 32.2 
720 - 77925.7 27.0 21.5 26.6 
780 and over62.2 49.4 65.9 21.3 
Total100.0 %100.0 %100.0 %100.0 %
Troubled debt restructurings
Restructured loans are those extended to borrowers who are experiencing financial difficulty and who have been granted a concession. Restructured loans are placed on non-accrual status if the Company does not believe it probable that amounts due under the contractual terms will be collected. Commercial performing restructured loans are primarily comprised of certain business, construction and business real estate loans classified as substandard but renewed at rates judged to be non-market. These loans are performing in accordance with their modified terms, and because the Company believes it probable that all amounts due under the modified terms of the agreements will be collected, interest on these loans is being recognized on an accrual basis. Troubled debt restructurings also include certain credit card and other small consumer loans under various debt management and assistance programs. Modifications to these loans generally involve removing the available line of credit, placing loans on amortizing status, and lowering the contractual interest rate. Certain personal real estate, revolving home equity, and consumer loans were classified as consumer bankruptcy troubled debt restructurings because they were not reaffirmed by the borrower in bankruptcy proceedings. Interest on these loans is being recognized on an accrual basis, as the borrowers are continuing to make payments. Other consumer loans classified as troubled debt restructurings consist of various other workout arrangements with consumer customers.
Section 4013 of the CARES Act was signed into law on March 27, 2020, and includes a provision that short-term modifications are not troubled debt restructurings, if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to December 31, 2019. In addition to the CARES Act, bank regulatory agencies issued interagency guidance stating suspending the troubled debt restructuring classification would be appropriate if the borrower was less than 30 days past due at the time the modification program is implemented. The guidance also provides that loans generally will not be adversely classified if the short-term modification is related to COVID-19 relief programs. The Company follows the guidance under the CARES Act when determining if a customer’s modification is subject to troubled debt restructuring classification. If it is deemed the modification is not short-term, not COVID-19 related or the customer does not meet the criteria under the guidance to be scoped out of troubled debt restructuring classification, the Company will evaluate the loan modifications under its existing framework which requires modifications that result in a concession to a borrower experiencing financial difficulty be accounted for as a troubled debt restructuring.

(In thousands)September 30, 2020December 31, 2019
Accruing restructured loans:
Commercial
$50,921 $55,934 
Assistance programs
8,208 8,365 
Consumer bankruptcy
3,101 3,592 
Other consumer
2,418 3,621 
Non-accrual loans
8,513 7,938 
Total troubled debt restructurings
$73,161 $79,450 
The table below shows the balance of troubled debt restructurings by loan classification at September 30, 2020, in addition to the outstanding balances of these restructured loans which the Company considers to have been in default at any time during the past twelve months. For purposes of this disclosure, the Company considers "default" to mean 90 days or more past due as to interest or principal.

(In thousands)September 30, 2020Balance 90 days past due at any time during previous 12 months
Commercial:
Business$17,696 $674 
Real estate - construction and land41 — 
Real estate - business40,596 — 
Personal Banking:
Real estate - personal3,278 252 
Consumer3,530 103 
Revolving home equity56 — 
Consumer credit card7,964 257 
Total troubled debt restructurings$73,161 $1,286 
For those loans on non-accrual status also classified as restructured, the modification did not create any further financial effect on the Company as those loans were already recorded at net realizable value. For those performing commercial loans classified as restructured, there were no concessions involving forgiveness of principal or interest and, therefore, there was no financial impact to the Company as a result of modification to these loans. No financial impact resulted from those performing loans where the debt was not reaffirmed in bankruptcy, as no changes to loan terms occurred in that process. However, the effects of modifications to loans under various debt management and assistance programs were estimated to decrease interest income by approximately $1.1 million on an annual, pre-tax basis, compared to amounts contractually owed. Other modifications to consumer loans mainly involve extensions and other small modifications that did not include the forgiveness of principal or interest.

The allowance for credit losses related to troubled debt restructurings on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as troubled debt restructurings. Those performing loans classified as troubled debt restructurings are accruing loans which management expects to collect under contractual terms. Performing commercial loans having no other concessions granted other than being renewed at non-market interest rates are judged to have similar risk characteristics as non-troubled debt commercial loans and are collectively evaluated based on internal risk rating, loan type, delinquency, historical experience and current economic factors. Performing personal banking loans classified as troubled debt restructurings resulted from the borrower not reaffirming the debt during bankruptcy and have had no other concession granted, other than the Bank's future limitations on collecting payment deficiencies or in pursuing foreclosure actions. As such, they have similar risk characteristics as non-troubled debt personal banking loans and are evaluated collectively based on loan type, delinquency, historical experience and current economic factors.

If a troubled debt restructuring defaults and is already on non-accrual status, the allowance for credit losses continues to be based on individual evaluation, using discounted expected cash flows or the fair value of collateral. If an accruing troubled debt restructuring defaults, the loan's risk rating is downgraded to non-accrual status and the loan's related allowance for credit losses is determined based on individual evaluation, or if necessary, the loan is charged off and collection efforts begun.

The Company had commitments of $13.1 million at September 30, 2020 to lend additional funds to borrowers with restructured loans.

Impaired loans
The following Impaired loans disclosures were superceded by ASC 2016-13.
The table below shows the Company’s balances of impaired loans at December 31, 2019. These loans consist of all loans on non-accrual status and other restructured loans whose terms have been modified and classified as troubled debt restructurings. These restructured loans are performing in accordance with their modified terms, and because the Company believes it probable that all amounts due under the modified terms of the agreements will be collected, interest on these loans is being recognized on an accrual basis. They are discussed further in the "Troubled debt restructurings" section above.

(In thousands)Dec. 31, 2019
Non-accrual loans$10,220 
Restructured loans (accruing)71,512 
Total impaired loans$81,732 

The following table shows the balance in the allowance for loan losses and the related loan balance at December 31, 2019, disaggregated on the basis of impairment methodology. Impaired loans evaluated under Accounting Standards Codification (ASC) 310-10-35 include loans on non-accrual status, which are individually evaluated for impairment, and other impaired loans deemed to have similar risk characteristics, which are collectively evaluated. All other loans are collectively evaluated for impairment under ASC 450-20.

Impaired LoansAll Other Loans

(In thousands)
Allowance for Loan LossesLoans OutstandingAllowance for Loan LossesLoans Outstanding
December 31, 2019
Commercial$1,629 $64,500 $90,131 $9,233,880 
Personal Banking1,117 17,232 67,805 5,422,205 
Total$2,746 $81,732 $157,936 $14,656,085 
The following table provides additional information about impaired loans held by the Company at December 31, 2019, segregated between loans for which an allowance for credit losses has been provided and loans for which no allowance has been provided.



(In thousands)
Recorded Investment
Unpaid Principal
Balance
 Related
Allowance
December 31, 2019
With no related allowance recorded:
Business$7,054 $13,738 $— 
$7,054 $13,738 $— 
With an allowance recorded:
Business$30,437 $30,487 $837 
Real estate – construction and land46 51 1 
Real estate – business26,963 27,643 791 
Real estate – personal4,729 5,968 258 
Consumer4,421 4,421 35 
Revolving home equity35 35 1 
Consumer credit card8,047 8,047 823 
$74,678 $76,652 $2,746 
Total$81,732 $90,390 $2,746 

Total average impaired loans for the three and nine month periods ended September 30, 2019 are shown in the table below.


(In thousands)
CommercialPersonal BankingTotal
Average Impaired Loans:
For the three months ended September 30, 2019
Non-accrual loans$9,655 $1,903 $11,558 
Restructured loans (accruing)53,517 15,644 69,161 
Total$63,172 $17,547 $80,719 
For the nine months ended September 30, 2019
Non-accrual loans$9,881 $2,074 $11,955 
Restructured loans (accruing)48,248 15,605 63,853 
Total$58,129 $17,679 $75,808 

The table below shows interest income recognized during the three and nine month periods ended September 30, 2019, respectively, for impaired loans held at the end of each period. This interest all relates to accruing restructured loans, as discussed in the "Troubled debt restructurings" section above.

For the Three Months Ended September 30For the Nine Months Ended September 30
(In thousands)
20192019
Interest income recognized on impaired loans:
Business$222 $665 
Real estate – construction and land1 2 
Real estate – business363 1,088 
Real estate – personal31 92 
Consumer76 227 
Revolving home equity1 2 
Consumer credit card181 542 
Total$875 $2,618 
Loans held for sale
The Company designates certain long-term fixed rate personal real estate loans as held for sale, and the Company has elected the fair value option for these loans. The election of the fair value option aligns the accounting for these loans with the related economic hedges discussed in Note 11. The loans are primarily sold to FNMA, FHLMC, and GNMA. At September 30, 2020, the fair value of these loans was $35.1 million, and the unpaid principal balance was $33.3 million

The Company also designates certain student loan originations as held for sale. The borrowers are credit-worthy students who are attending colleges and universities. The loans are intended to be sold in the secondary market, and the Company maintains contracts with Sallie Mae to sell the loans within 210 days after the last disbursement to the student. These loans are carried at lower of cost or fair value, which at September 30, 2020 totaled $4.4 million.

At September 30, 2020, none of the loans held for sale were on non-accrual status or 90 days past due and still accruing.
Foreclosed real estate/repossessed assets
The Company’s holdings of foreclosed real estate totaled $57 thousand and $365 thousand at September 30, 2020 and December 31, 2019, respectively. Personal property acquired in repossession, generally autos, marine and recreational vehicles (RV), totaled $1.3 million and $5.5 million at September 30, 2020 and December 31, 2019, respectively. Upon acquisition, these assets are recorded at fair value less estimated selling costs at the date of foreclosure, establishing a new cost basis. They are subsequently carried at the lower of this cost basis or fair value less estimated selling costs.