Portfolio loans (Tables)

3 Months Ended

Mar. 31, 2020

Portfolio loans

Distribution of portfolio loans

The distribution of portfolio loans is as follows (dollars in thousands):

	March 31, 2020		December 31, 2019
Commercial	$	1,767,191	$	1,748,368
Commercial real estate		2,825,003		2,793,417
Real estate construction		448,313		401,861
Retail real estate		1,656,628		1,693,769
Retail other		48,364		49,834
Portfolio loans	$	6,745,499	$	6,687,249
Allowance		(84,384)		(53,748)
Portfolio loans, net	$	6,661,115	$	6,633,501

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. March 31, 2020 includes purchase discounts and clearings in the pass rating. December 31, 2019 excludes purchase discounts and clearings. (dollars in thousands):

	March 31, 2020
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	1,481,538	$	150,303	$	85,231	$	42,727	$	7,392
Commercial real estate		2,509,301		178,151		100,365		28,245		8,941
Real estate construction		415,302		28,808		3,222		699		282
Retail real estate		1,624,543		13,075		3,652		6,387		8,971
Retail other		48,273		—		—		5		86
Total	$	6,078,957	$	370,337	$	192,470	$	78,063	$	25,672

	December 31, 2019
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	1,458,416	$	172,526	$	66,337	$	41,273	$	9,096
Commercial real estate		2,477,398		186,963		105,487		26,204		9,178
Real estate construction		351,923		45,262		3,928		737		630
Retail real estate		1,661,691		9,125		5,355		7,001		8,935
Retail other		47,698		—		—		—		57
Total	$	5,997,126	$	413,876	$	181,107	$	75,215	$	27,896

Risk grades of portfolio loans, further sorted by origination

Risk grades of portfolio loans, further sorted by origination year at March 31, 2020 is as follows (dollars in thousand):

	Term Loans Amortized Cost Basis by Origination Year
														Revolving
As of March 31, 2020	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial:
Risk rating
Pass	$	183,585	$	217,732	$	158,089	$	136,995	$	84,025	$	129,623	$	571,489	$	1,481,538
Watch		11,686		29,396		17,424		10,367		4,617		12,958		63,855		150,303
Special Mention		12,010		5,723		1,918		7,316		7,148		15,166		35,950		85,231
Substandard		2,860		6,108		4,640		5,646		1,939		1,425		20,109		42,727
Substandard non-accrual		—		3,245		1,871		541		997		738		—		7,392
Total commercial	$	210,141	$	262,204	$	183,942	$	160,865	$	98,726	$	159,910	$	691,403	$	1,767,191
Commercial real estate:
Risk rating
Pass	$	154,317	$	597,120	$	485,314	$	551,251	$	262,300	$	425,072	$	33,927	$	2,509,301
Watch		20,142		61,908		37,717		19,038		19,039		17,375		2,932		178,151
Special Mention		15,788		15,758		18,964		14,042		6,810		28,508		495		100,365
Substandard		2,802		12,855		3,741		6,211		1,884		637		115		28,245
Substandard non-accrual		—		1,345		3,813		1,484		564		1,735		—		8,941
Total commercial real estate	$	193,049	$	688,986	$	549,549	$	592,026	$	290,597	$	473,327	$	37,469	$	2,825,003
Real estate construction:
Risk rating
Pass	$	26,489	$	204,437	$	139,119	$	20,465	$	412	$	1,534	$	22,846	$	415,302
Watch		10,936		12,936		2,582		2,140		214						28,808
Special Mention		2,367		703		—		—		152		—		—		3,222
Substandard		—		—		655		44		—		—		—		699
Substandard non-accrual		—		—		275		—		—		7		—		282
Total real estate construction	$	39,792	$	218,076	$	142,631	$	22,649	$	778	$	1,541	$	22,846	$	448,313
Retail real estate:
Risk rating
Pass	$	51,441	$	201,517	$	199,235	$	204,376	$	184,629	$	381,085	$	402,260	$	1,624,543
Watch		296		3,599		1,893		441		1,034		736		5,076		13,075
Special Mention		108		—		180		—		2,001		1,363		—		3,652
Substandard		—		1,285		447		537		761		2,904		453		6,387
Substandard non-accrual		100		209		863		486		254		5,541		1,518		8,971
Total retail real estate	$	51,945	$	206,610	$	202,618	$	205,840	$	188,679	$	391,629	$	409,307	$	1,656,628
Retail other:
Risk rating
Pass	$	6,126	$	13,896	$	9,331	$	4,942	$	1,601	$	1,419	$	10,958	$	48,273
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		5		5
Substandard non-accrual		16		47		—		3		17		—		3		86
Total retail other	$	6,142	$	13,943	$	9,331	$	4,945	$	1,618	$	1,419	$	10,966	$	48,364

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

Risk grades of portfolio loans, further sorted by origination year at March 31, 2020 is as follows (dollars in thousand):

	Term Loans Amortized Cost Basis by Origination Year
														Revolving
As of March 31, 2020	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial:
Risk rating
Pass	$	183,585	$	217,732	$	158,089	$	136,995	$	84,025	$	129,623	$	571,489	$	1,481,538
Watch		11,686		29,396		17,424		10,367		4,617		12,958		63,855		150,303
Special Mention		12,010		5,723		1,918		7,316		7,148		15,166		35,950		85,231
Substandard		2,860		6,108		4,640		5,646		1,939		1,425		20,109		42,727
Substandard non-accrual		—		3,245		1,871		541		997		738		—		7,392
Total commercial	$	210,141	$	262,204	$	183,942	$	160,865	$	98,726	$	159,910	$	691,403	$	1,767,191
Commercial real estate:
Risk rating
Pass	$	154,317	$	597,120	$	485,314	$	551,251	$	262,300	$	425,072	$	33,927	$	2,509,301
Watch		20,142		61,908		37,717		19,038		19,039		17,375		2,932		178,151
Special Mention		15,788		15,758		18,964		14,042		6,810		28,508		495		100,365
Substandard		2,802		12,855		3,741		6,211		1,884		637		115		28,245
Substandard non-accrual		—		1,345		3,813		1,484		564		1,735		—		8,941
Total commercial real estate	$	193,049	$	688,986	$	549,549	$	592,026	$	290,597	$	473,327	$	37,469	$	2,825,003
Real estate construction:
Risk rating
Pass	$	26,489	$	204,437	$	139,119	$	20,465	$	412	$	1,534	$	22,846	$	415,302
Watch		10,936		12,936		2,582		2,140		214						28,808
Special Mention		2,367		703		—		—		152		—		—		3,222
Substandard		—		—		655		44		—		—		—		699
Substandard non-accrual		—		—		275		—		—		7		—		282
Total real estate construction	$	39,792	$	218,076	$	142,631	$	22,649	$	778	$	1,541	$	22,846	$	448,313
Retail real estate:
Risk rating
Pass	$	51,441	$	201,517	$	199,235	$	204,376	$	184,629	$	381,085	$	402,260	$	1,624,543
Watch		296		3,599		1,893		441		1,034		736		5,076		13,075
Special Mention		108		—		180		—		2,001		1,363		—		3,652
Substandard		—		1,285		447		537		761		2,904		453		6,387
Substandard non-accrual		100		209		863		486		254		5,541		1,518		8,971
Total retail real estate	$	51,945	$	206,610	$	202,618	$	205,840	$	188,679	$	391,629	$	409,307	$	1,656,628
Retail other:
Risk rating
Pass	$	6,126	$	13,896	$	9,331	$	4,942	$	1,601	$	1,419	$	10,958	$	48,273
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		5		5
Substandard non-accrual		16		47		—		3		17		—		3		86
Total retail other	$	6,142	$	13,943	$	9,331	$	4,945	$	1,618	$	1,419	$	10,966	$	48,364

Summary of restructured loans

A summary of troubled debt restructurings (“TDR”) loans is as follows (dollars in thousands):

		March 31,		December 31,
	2020		2019
In compliance with modified terms	$	4,949	$	5,005
30 — 89 days past due		—		—
Included in non-performing loans		1,686		702
Total	$	6,635	$	5,707

Schedule of details of impaired loans, segregated by category

	March 31, 2020
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Commercial	$	11,795	$	3,751	$	3,671	$	7,422	$	2,822	$	11,493
Commercial real estate		11,992		9,111		1,206		10,317		642		15,226
Real estate construction		579		562		—		562		—		888
Retail real estate		7,642		6,597		474		7,071		474		12,767
Retail other		—		—		—		—		—		34
Total	$	32,008	$	20,021	$	5,351	$	25,372	$	3,938	$	40,408

	December 31, 2019
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Commercial	$	14,415	$	4,727	$	5,026	$	9,753	$	3,330	$	13,774
Commercial real estate		14,487		9,883		2,039		11,922		1,049		16,678
Real estate construction		1,116		974		—		974		—		873
Retail real estate		15,581		13,898		474		14,372		474		14,003
Retail other		87		58		—		58		—		42
Total	$	45,686	$	29,540	$	7,539	$	37,079	$	4,853	$	45,370

Schedule of activity on the allowance for loan losses

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

	As of and for the Three Months Ended March 31, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance, prior to adoption of ASC 326	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748
Adoption of ASC 326		715		9,306		2,954		3,292		566		16,833
Provision for credit losses		5,673		6,526		889		4,037		91		17,216
Charged-off		(2,042)		(1,099)		—		(708)		(299)		(4,148)
Recoveries		88		44		146		338		119		735
Ending balance	$	22,725	$	35,967	$	7,193	$	17,454	$	1,045	$	84,384

	As of and for the Three Months Ended March 31, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	17,829	$	21,137	$	2,723	$	8,471	$	488	$	50,648
Provision for loan losses		1,793		(1,089)		2		1,357		48		2,111
Charged-off		(1,807)		(15)		—		(517)		(130)		(2,469)
Recoveries		183		64		82		192		104		625
Ending balance	$	17,998	$	20,097	$	2,807	$	9,503	$	510	$	50,915

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

The following table presents the allowance and amortized cost of portfolio loans by category (dollars in thousands):

	As of March 31, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Allowance
Ending balance attributed to:
Loans individually evaluated for impairment	$	2,822	$	642	$	—	$	474	$	—	$	3,938
Loans collectively evaluated for impairment		19,903		35,325		7,193		16,980		1,045		80,446
Ending balance	$	22,725	$	35,967	$	7,193	$	17,454	$	1,045	$	84,384
Loans:
Loans individually evaluated for impairment	$	7,414	$	8,452	$	307	$	6,618	$	—	$	22,791
Loans collectively evaluated for impairment		1,759,769		2,814,686		447,751		1,649,557		48,364		6,720,127
PCD loans evaluated for impairment		8		1,865		255		453		—		2,581
Ending balance	$	1,767,191	$	2,825,003	$	448,313	$	1,656,628	$	48,364	$	6,745,499

	As of December 31, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Allowance
Ending balance attributed to:
Loans individually evaluated for impairment	$	3,330	$	1,049	$	—	$	474	$	—	$	4,853
Loans collectively evaluated for impairment		14,961		20,141		3,204		10,021		568		48,895
Ending balance	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748
Loans:
Loans individually evaluated for impairment	$	9,740	$	10,018	$	539	$	13,676	$	58	$	34,031
Loans collectively evaluated for impairment		1,738,615		2,781,495		400,887		1,679,397		49,776		6,650,170
PCI loans evaluated for impairment		13		1,904		435		696		—		3,048
Ending balance	$	1,748,368	$	2,793,417	$	401,861	$	1,693,769	$	49,834	$	6,687,249