Portfolio Loans (Tables)

9 Months Ended

Sep. 30, 2022

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Distribution of portfolio loans

Distributions of the loan portfolio by loan category were as follows (dollars in thousands):

	As of
	September 30, 2022		December 31, 2021
Portfolio loans
Commercial	$	1,945,893	$	1,943,886
Commercial real estate	3,278,684		3,119,807
Real estate construction	499,560		385,996
Retail real estate	1,643,099		1,512,976
Retail other	302,878		226,333
Total portfolio loans	7,670,114		7,188,998
ACL	(90,722)		(87,887)
Portfolio loans, net	$	7,579,392	$	7,101,111

Summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings)

The following table is a summary of risk grades segregated by category of portfolio loans (dollars in thousands):

	As of September 30, 2022
	Pass		Watch		Special Mention		Substandard		Substandard Non-accrual		Total
Portfolio loans
Commercial	$	1,707,528	$	135,254	$	58,189	$	38,695	$	6,227	$	1,945,893
Commercial real estate	2,889,804		299,638		42,728		40,722		5,792		3,278,684
Real estate construction	475,099		22,011		2		2,400		48		499,560
Retail real estate	1,625,702		8,601		2,087		3,469		3,240		1,643,099
Retail other	302,760		—		—		—		118		302,878
Total portfolio loans	$	7,000,893	$	465,504	$	103,006	$	85,286	$	15,425	$	7,670,114

	As of December 31, 2021
	Pass		Watch		Special Mention		Substandard		Substandard Non-accrual		Total
Portfolio loans
Commercial	$	1,747,756	$	93,582	$	69,427	$	26,117	$	7,004	$	1,943,886
Commercial real estate	2,682,441		343,304		49,695		38,394		5,973		3,119,807
Real estate construction	369,797		13,793		6		2,400		—		385,996
Retail real estate	1,491,845		12,374		1,992		3,867		2,898		1,512,976
Retail other	226,262		—		—		—		71		226,333
Total portfolio loans	$	6,518,101	$	463,053	$	121,120	$	70,778	$	15,946	$	7,188,998

Risk grades of portfolio loans, further sorted by origination

Risk grades of portfolio loans, further sorted by origination year are as follows (dollars in thousands):

	As of September 30, 2022
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Total
Risk Grade Ratings	2022		2021		2020		2019		2018		Prior
Commercial
Pass	$	403,643	$	315,433	$	145,695	$	60,284	$	53,197	$	149,627	$	579,649	$	1,707,528
Watch	27,665		18,423		4,263		8,372		1,404		3,144		71,983		135,254
Special Mention	1,772		691		1,325		1,078		3,102		17,538		32,683		58,189
Substandard	9,075		1,292		695		6,999		433		5,402		14,799		38,695
Substandard non-accrual	—		3,586		306		137		—		198		2,000		6,227
Total commercial	442,155		339,425		152,284		76,870		58,136		175,909		701,114		1,945,893
Commercial real estate
Pass	765,398		880,522		501,085		332,768		171,177		222,947		15,907		2,889,804
Watch	69,877		44,756		50,799		95,446		18,821		13,338		6,601		299,638
Special Mention	3,010		4,737		15,598		1,517		6,994		10,872		—		42,728
Substandard	14,349		12,681		497		1,841		10,412		942		—		40,722
Substandard non-accrual	—		4,092		41		—		1,650		9		—		5,792
Total commercial real estate	852,634		946,788		568,020		431,572		209,054		248,108		22,508		3,278,684
Real estate construction
Pass	176,071		191,006		84,748		1,570		2,012		1,949		17,743		475,099
Watch	3,100		3,666		3,269		10,533		—		1,443		—		22,011
Special Mention	—		—		—		2		—		—		—		2
Substandard	2,400		—		—		—		—		—		—		2,400
Substandard non-accrual	—		—		48		—		—		—		—		48
Total real estate construction	181,571		194,672		88,065		12,105		2,012		3,392		17,743		499,560
Retail real estate
Pass	344,033		464,066		180,543		79,304		58,925		281,430		217,401		1,625,702
Watch	2,881		1,163		1,875		1,469		1,146		67		—		8,601
Special Mention	148		1,864		—		—		—		—		75		2,087
Substandard	—		1,163		207		82		142		1,868		7		3,469
Substandard non-accrual	—		150		110		—		390		1,985		605		3,240
Total retail real estate	347,062		468,406		182,735		80,855		60,603		285,350		218,088		1,643,099
Retail other
Pass	121,375		47,136		14,999		15,909		7,677		2,124		93,540		302,760
Substandard non-accrual	14		89		3		—		10		2		—		118
Total retail other	121,389		47,225		15,002		15,909		7,687		2,126		93,540		302,878
Total portfolio loans	$	1,944,811	$	1,996,516	$	1,006,106	$	617,311	$	337,492	$	714,885	$	1,052,993	$	7,670,114

	As of December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Total
Risk Grade Ratings	2021		2020		2019		2018		2017		Prior
Commercial
Pass	$	512,729	$	228,811	$	107,877	$	84,873	$	74,351	$	122,418	$	616,697	$	1,747,756
Watch	13,847		5,913		14,274		5,060		1,361		2,866		50,261		93,582
Special Mention	7,062		898		5,961		4,025		6,790		11,845		32,846		69,427
Substandard	3,595		3,362		3,136		1,855		1,125		5,459		7,585		26,117
Substandard non-accrual	4,126		364		142		—		320		52		2,000		7,004
Total commercial	541,359		239,348		131,390		95,813		83,947		142,640		709,389		1,943,886
Commercial real estate
Pass	969,548		637,550		425,850		235,928		200,373		198,002		15,190		2,682,441
Watch	51,560		38,820		123,324		48,088		46,761		32,608		2,143		343,304
Special Mention	9,542		7,060		6,585		10,098		6,357		9,870		183		49,695
Substandard	21,002		3,781		1,218		11,451		521		421		—		38,394
Substandard non-accrual	112		181		359		1,893		3,407		21		—		5,973
Total commercial real estate	1,051,764		687,392		557,336		307,458		257,419		240,922		17,516		3,119,807
Real estate construction
Pass	202,082		123,491		31,927		3,155		738		1,223		7,181		369,797
Watch	7,886		4,159		54		—		1,574		120		—		13,793
Special Mention	—		—		6		—		—		—		—		6
Substandard	—		2,400		—		—		—		—		—		2,400
Total real estate construction	209,968		130,050		31,987		3,155		2,312		1,343		7,181		385,996
Retail real estate
Pass	523,541		215,068		96,617		79,158		82,478		281,737		213,246		1,491,845
Watch	4,100		2,460		1,780		1,312		343		150		2,229		12,374
Special Mention	1,965		27		—		—		—		—		—		1,992
Substandard	1,369		232		12		71		165		1,687		331		3,867
Substandard non-accrual	235		63		—		16		227		1,705		652		2,898
Total retail real estate	531,210		217,850		98,409		80,557		83,213		285,279		216,458		1,512,976
Retail other
Pass	59,366		22,305		26,126		16,189		7,180		1,326		93,770		226,262
Substandard non-accrual	34		10		—		14		13		—		—		71
Total retail other	59,400		22,315		26,126		16,203		7,193		1,326		93,770		226,333
Total portfolio loans	$	2,393,701	$	1,296,955	$	845,248	$	503,186	$	434,084	$	671,510	$	1,044,314	$	7,188,998

Summary of portfolio loans that are past due and still accruing or on a non-accrual status

An analysis of the amortized cost basis of portfolio loans that are past due and still accruing, or on a non-accrual status, is as follows (dollars in thousands):

	As of September 30, 2022
	Loans past due, still accruing						Non-accrual Loans
	30-59 Days		60-89 Days		90+Days
Past due and non-accrual loans
Commercial	$	19	$	45	$	625	$	6,227
Commercial real estate	411		—		349		5,792
Real estate construction	—		—		—		48
Retail real estate	3,734		1,831		255		3,240
Retail other	262		5		—		118
Total past due and non-accrual loans	$	4,426	$	1,881	$	1,229	$	15,425

	As of December 31, 2021
	Loans past due, still accruing						Non-accrual Loans
	30-59 Days		60-89 Days		90+Days
Past due and non-accrual loans
Commercial	$	363	$	10	$	213	$	7,004
Commercial real estate	151		441		—		5,973
Real estate construction	56		—		—		—
Retail real estate	3,312		1,830		693		2,898
Retail other	82		16		—		71
Total past due and non-accrual loans	$	3,964	$	2,297	$	906	$	15,946

Summary of TDR loans

TDR loan balances are summarized as follows (dollars in thousands):

	As of
	September 30, 2022		December 31, 2021
TDRs
In compliance with modified terms	$	1,940	$	1,801
30 – 89 days past due	—		—
Non-performing TDRs	483		551
Total TDRs	$	2,423	$	2,352

Loans that were newly designated as TDRs during the periods presented, are summarized as follows (dollars in thousands):

	Three Months Ended September 30, 2022					Nine Months Ended September 30, 2022
		Recorded Investment					Recorded Investment
	Number of Contracts	Rate Modification1		Payment Modification1		Number of Contracts	Rate Modification1		Payment Modification1
Commercial	—	$	—	$	—	1	$	—	$	381

	Three Months Ended September 30, 2021					Nine Months Ended September 30, 2021
		Recorded Investment					Recorded Investment
	Number of Contracts	Rate Modification1		Payment Modification1		Number of Contracts	Rate Modification1		Payment Modification1
Commercial	—	$	—	$	—	1	$	444	$	—

1.TDRs may include multiple concessions; those that include an interest rate concession and payment concession are shown in the rate modification column.

Schedule of loans modified under the CARES Act or Interagency Statement

The Company’s TDR loan totals do not include the following modified loans with payment deferrals that fall under the CARES Act or Interagency Statement, which suspended GAAP requirements related to TDR classification (dollars in thousands):

	As of September 30, 2022			As of December 31, 2021
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
COVID-19 loan modifications
Commercial loans:
Interest-only deferrals	8	$	20,556	32	$	128,730
Retail loans:
Mortgage and personal loan deferrals	1	99		2	137
Total COVID-19 loans modifications	9	$	20,655	34	$	128,867

Schedule of details of impaired loans, segregated by category

Average recorded investment is calculated using the most recent four quarters (dollars in thousands):

	As of September 30, 2022
	Unpaid Principal Balance		Recorded Investment								Average Recorded Investment
			With No Allowance		With Allowance		Total		Related Allowance
Loans evaluated individually
Commercial	$	9,455	$	547	$	5,892	$	6,439	$	2,806	$	7,488
Commercial real estate	7,497		1,663		4,035		5,698		2,000		5,216
Real estate construction	255		255		—		255		—		266
Retail real estate	2,258		2,089		25		2,114		25		2,526
Total loans evaluated individually	$	19,465	$	4,554	$	9,952	$	14,506	$	4,831	$	15,496

	As of December 31, 2021
	Unpaid Principal Balance		Recorded Investment								Average Recorded Investment
			With No Allowance		With Allowance		Total		Related Allowance
Loans evaluated individually
Commercial	$	10,247	$	498	$	6,490	$	6,988	$	3,564	$	8,791
Commercial real estate	6,456		5,750		—		5,750		—		6,390
Real estate construction	272		272		—		272		—		282
Retail real estate	2,514		2,345		25		2,370		25		4,093
Total loans evaluated individually	$	19,489	$	8,865	$	6,515	$	15,380	$	3,589	$	19,556

Schedule of activity on the allowance for loan losses

The following tables summarize activity in the ACL. Allocation of a portion of the ACL to one category does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Three Months Ended September 30, 2022
	Commercial		Commercial Real Estate		Real Estate Construction		Retail Real Estate		Retail Other		Total
ACL balance, June 30, 2022	$	23,359	$	37,182	$	5,669	$	17,984	$	4,563	$	88,757
Provision for credit losses	615		598		216		684		251		2,364
Charged-off	(381)		—		—		(220)		(218)		(819)
Recoveries	102		19		86		172		41		420
ACL balance, September 30, 2022	$	23,695	$	37,799	$	5,971	$	18,620	$	4,637	$	90,722

	Nine Months Ended September 30, 2022
	Commercial		Commercial Real Estate		Real Estate Construction		Retail Real Estate		Retail Other		Total
ACL balance, December 31, 2021	$	23,855	$	38,249	$	5,102	$	17,589	$	3,092	$	87,887
Provision for credit losses	123		408		663		826		1,744		3,764
Charged-off	(589)		(1,372)		—		(253)		(409)		(2,623)
Recoveries	306		514		206		458		210		1,694
ACL balance, September 30, 2022	$	23,695	$	37,799	$	5,971	$	18,620	$	4,637	$	90,722

	Three Months Ended September 30, 2021
	Commercial		Commercial Real Estate		Real Estate Construction		Retail Real Estate		Retail Other		Total
ACL balance, June 30, 2021	$	24,356	$	39,974	$	7,599	$	20,505	$	2,976	$	95,410
Provision for credit losses	657		(25)		(1,503)		(1,155)		157		(1,869)
Charged-off	(764)		(191)		—		(155)		(98)		(1,208)
Recoveries	157		73		25		157		57		469
ACL balance, September 30, 2021	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

	Nine Months Ended September 30, 2021
	Commercial		Commercial Real Estate		Real Estate Construction		Retail Real Estate		Retail Other		Total
ACL balance, December 31, 2020	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048
Day 1 PCD1	3,546		336		—		129		167		4,178
Provision for credit losses	(1,428)		(6,109)		(2,082)		(3,028)		2,282		(10,365)
Charged-off	(2,026)		(812)		(209)		(315)		(349)		(3,711)
Recoveries	448		186		219		574		225		1,652
ACL balance, September 30, 2021	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

1.The Day 1 PCD is attributable to the CAC acquisition in the second quarter of 2021.

Schedule of allowance for loan losses and recorded investments in portfolio loans, by category

The following tables present the ACL and amortized cost of portfolio loans by category (dollars in thousands):

	As of September 30, 2022
	Portfolio Loans						ACL Attributed to Portfolio Loans
	Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Total		Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Total
Portfolio loan category
Commercial	$	1,939,454	$	6,439	$	1,945,893	$	20,889	$	2,806	$	23,695
Commercial real estate	3,272,986		5,698		3,278,684		35,799		2,000		37,799
Real estate construction	499,305		255		499,560		5,971		—		5,971
Retail real estate	1,640,985		2,114		1,643,099		18,595		25		18,620
Retail other	302,878		—		302,878		4,637		—		4,637
Portfolio loans and related ACL	$	7,655,608	$	14,506	$	7,670,114	$	85,891	$	4,831	$	90,722

	As of December 31, 2021
	Portfolio Loans						ACL Attributed to Portfolio Loans
	Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Total		Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Total
Portfolio loan category
Commercial	$	1,936,898	$	6,988	$	1,943,886	$	20,291	$	3,564	$	23,855
Commercial real estate	3,114,057		5,750		3,119,807		38,249		—		38,249
Real estate construction	385,724		272		385,996		5,102		—		5,102
Retail real estate	1,510,606		2,370		1,512,976		17,564		25		17,589
Retail other	226,333		—		226,333		3,092		—		3,092
Portfolio loans and related ACL	$	7,173,618	$	15,380	$	7,188,998	$	84,298	$	3,589	$	87,887