Portfolio loans (Tables)

6 Months Ended

Jun. 30, 2020

Portfolio loans

Distribution of portfolio loans

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

	June 30, 2020		December 31, 2019
Commercial	$	2,357,954	$	1,748,368
Commercial real estate		2,847,014		2,793,417
Real estate construction		433,031		401,861
Retail real estate		1,548,215		1,693,769
Retail other		42,806		49,834
Portfolio loans	$	7,229,020	$	6,687,249
Allowance		(96,046)		(53,748)
Portfolio loans, net	$	7,132,974	$	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. June 30, 2020 includes purchase discounts and clearings in the pass rating. December 31, 2019 excludes purchase discounts and clearings. (dollars in thousands):

	June 30, 2020
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	2,078,284	$	136,817	$	94,439	$	41,978	$	6,436
Commercial real estate		2,476,189		233,826		93,676		34,314		9,009
Real estate construction		405,327		23,907		685		2,832		280
Retail real estate		1,518,644		12,124		3,617		4,613		9,217
Retail other		42,653		—		—		—		153
Total	$	6,521,097	$	406,674	$	192,417	$	83,737	$	25,095

	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 or renewal year at June 30, 2020 is as follows (dollars in thousand):

	Term Loans Amortized Cost Basis by Origination or Renewal Year
														Revolving
As of June 30, 2020	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial:
Risk rating
Pass	$	931,544	$	193,072	$	139,275	$	129,906	$	79,484	$	94,852	$	510,151	$	2,078,284
Watch		23,426		22,915		20,322		8,145		3,017		15,488		43,504		136,817
Special Mention		5,947		5,442		3,226		7,039		6,930		15,579		50,276		94,439
Substandard		11,291		3,222		4,258		5,588		1,286		1,372		14,961		41,978
Substandard non-accrual		29		3,659		713		541		804		690		—		6,436
Total commercial	$	972,237	$	228,310	$	167,794	$	151,219	$	91,521	$	127,981	$	618,892	$	2,357,954
Commercial real estate:
Risk rating
Pass	$	315,356	$	577,080	$	473,528	$	496,679	$	226,747	$	357,509	$	29,290	$	2,476,189
Watch		40,462		69,029		44,938		28,018		27,333		23,329		717		233,826
Special Mention		12,212		16,494		17,895		14,233		6,800		24,553		1,489		93,676
Substandard		17,409		5,862		3,216		5,635		1,863		329		—		34,314
Substandard non-accrual		300		1,337		3,752		1,496		391		1,733		—		9,009
Total commercial real estate	$	385,739	$	669,802	$	543,329	$	546,061	$	263,134	$	407,453	$	31,496	$	2,847,014
Real estate construction:
Risk rating
Pass	$	61,660	$	200,254	$	122,501	$	1,535	$	407	$	1,299	$	17,671	$	405,327
Watch		9,071		10,092		2,411		2,128		205						23,907
Special Mention		673		12		—		—		—		—		—		685
Substandard		2,600		—		48		34		150		—		—		2,832
Substandard non-accrual		—		—		275		—		—		5		—		280
Total real estate construction	$	74,004	$	210,358	$	125,235	$	3,697	$	762	$	1,304	$	17,671	$	433,031
Retail real estate:
Risk rating
Pass	$	232,130	$	186,986	$	172,855	$	176,644	$	167,885	$	340,407	$	241,737	$	1,518,644
Watch		1,102		2,221		1,943		333		986		722		4,817		12,124
Special Mention		526		—		174		—		1,988		929		—		3,617
Substandard		1,487		214		333		160		751		1,216		452		4,613
Substandard non-accrual		280		175		793		732		248		5,437		1,552		9,217
Total retail real estate	$	235,525	$	189,596	$	176,098	$	177,869	$	171,858	$	348,711	$	248,558	$	1,548,215
Retail other:
Risk rating
Pass	$	6,101	$	12,360	$	8,099	$	4,079	$	1,253	$	1,084	$	9,677	$	42,653
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		63		7		—		2		17		63		1		153
Total retail other	$	6,164	$	12,367	$	8,099	$	4,081	$	1,270	$	1,147	$	9,678	$	42,806

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 or renewal year at June 30, 2020 is as follows (dollars in thousand):

	Term Loans Amortized Cost Basis by Origination or Renewal Year
														Revolving
As of June 30, 2020	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial:
Risk rating
Pass	$	931,544	$	193,072	$	139,275	$	129,906	$	79,484	$	94,852	$	510,151	$	2,078,284
Watch		23,426		22,915		20,322		8,145		3,017		15,488		43,504		136,817
Special Mention		5,947		5,442		3,226		7,039		6,930		15,579		50,276		94,439
Substandard		11,291		3,222		4,258		5,588		1,286		1,372		14,961		41,978
Substandard non-accrual		29		3,659		713		541		804		690		—		6,436
Total commercial	$	972,237	$	228,310	$	167,794	$	151,219	$	91,521	$	127,981	$	618,892	$	2,357,954
Commercial real estate:
Risk rating
Pass	$	315,356	$	577,080	$	473,528	$	496,679	$	226,747	$	357,509	$	29,290	$	2,476,189
Watch		40,462		69,029		44,938		28,018		27,333		23,329		717		233,826
Special Mention		12,212		16,494		17,895		14,233		6,800		24,553		1,489		93,676
Substandard		17,409		5,862		3,216		5,635		1,863		329		—		34,314
Substandard non-accrual		300		1,337		3,752		1,496		391		1,733		—		9,009
Total commercial real estate	$	385,739	$	669,802	$	543,329	$	546,061	$	263,134	$	407,453	$	31,496	$	2,847,014
Real estate construction:
Risk rating
Pass	$	61,660	$	200,254	$	122,501	$	1,535	$	407	$	1,299	$	17,671	$	405,327
Watch		9,071		10,092		2,411		2,128		205						23,907
Special Mention		673		12		—		—		—		—		—		685
Substandard		2,600		—		48		34		150		—		—		2,832
Substandard non-accrual		—		—		275		—		—		5		—		280
Total real estate construction	$	74,004	$	210,358	$	125,235	$	3,697	$	762	$	1,304	$	17,671	$	433,031
Retail real estate:
Risk rating
Pass	$	232,130	$	186,986	$	172,855	$	176,644	$	167,885	$	340,407	$	241,737	$	1,518,644
Watch		1,102		2,221		1,943		333		986		722		4,817		12,124
Special Mention		526		—		174		—		1,988		929		—		3,617
Substandard		1,487		214		333		160		751		1,216		452		4,613
Substandard non-accrual		280		175		793		732		248		5,437		1,552		9,217
Total retail real estate	$	235,525	$	189,596	$	176,098	$	177,869	$	171,858	$	348,711	$	248,558	$	1,548,215
Retail other:
Risk rating
Pass	$	6,101	$	12,360	$	8,099	$	4,079	$	1,253	$	1,084	$	9,677	$	42,653
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		63		7		—		2		17		63		1		153
Total retail other	$	6,164	$	12,367	$	8,099	$	4,081	$	1,270	$	1,147	$	9,678	$	42,806

Summary of restructured loans

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

		June 30,		December 31,
	2020		2019
In compliance with modified terms	$	4,191	$	5,005
30 — 89 days past due		125		—
Included in non-performing loans		1,662		702
Total	$	5,978	$	5,707

Schedule of details of impaired loans, segregated by category

	June 30, 2020
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Commercial	$	11,739	$	3,186	$	3,077	$	6,263	$	1,248	$	9,467
Commercial real estate		10,847		9,105		1,000		10,105		486		13,583
Real estate construction		576		559		—		559		—		836
Retail real estate		5,371		4,705		474		5,179		474		10,817
Retail other		—		—		—		—		—		30
Total	$	28,533	$	17,555	$	4,551	$	22,106	$	2,208	$	34,733

	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 June 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	22,725	$	35,967	$	7,193	$	17,454	$	1,045	$	84,384
Provision for credit losses		2,473		6,861		574		2,981		2		12,891
Charged-off		(1,140)		(165)		—		(292)		(105)		(1,702)
Recoveries		88		17		25		262		81		473
Ending balance	$	24,146	$	42,680	$	7,792	$	20,405	$	1,023	$	96,046
	As of and for the Six Months Ended June 30, 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		8,146		13,387		1,463		7,018		93		30,107
Charged-off		(3,182)		(1,264)		—		(1,000)		(404)		(5,850)
Recoveries		176		61		171		600		200		1,208
Ending balance	$	24,146	$	42,680	$	7,792	$	20,405	$	1,023	$	96,046

	As of and for the Three Months Ended June 30, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	17,998	$	20,097	$	2,807	$	9,503	$	510	$	50,915
Provision for loan losses		1,161		(97)		411		941		101		2,517
Charged-off		(2,563)		—		—		(200)		(178)		(2,941)
Recoveries		137		188		87		369		103		884
Ending balance	$	16,733	$	20,188	$	3,305	$	10,613	$	536	$	51,375
	As of and for the Six Months Ended June 30, 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		2,954		(1,186)		413		2,298		149		4,628
Charged-off		(4,370)		(15)		—		(717)		(308)		(5,410)
Recoveries		320		252		169		561		207		1,509
Ending balance	$	16,733	$	20,188	$	3,305	$	10,613	$	536	$	51,375

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 June 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Allowance
Ending balance attributed to:
Loans individually evaluated for impairment	$	1,248	$	486	$	—	$	474	$	—	$	2,208
Loans collectively evaluated for impairment		22,898		42,194		7,792		19,931		1,023		93,838
Ending balance	$	24,146	$	42,680	$	7,792	$	20,405	$	1,023	$	96,046
Loans:
Loans individually evaluated for impairment	$	6,263	$	10,105	$	559	$	5,179	$	—	$	22,106
Loans collectively evaluated for impairment		2,351,687		2,834,987		432,217		1,542,624		42,806		7,204,321
PCD loans evaluated for impairment		4		1,922		255		412		—		2,593
Ending balance	$	2,357,954	$	2,847,014	$	433,031	$	1,548,215	$	42,806	$	7,229,020

	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