Portfolio loans (Tables)

9 Months Ended

Sep. 30, 2020

Portfolio loans

Distribution of portfolio loans

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

	September 30, 2020		December 31, 2019
Commercial	$	2,281,031	$	1,748,368
Commercial real estate		2,912,408		2,793,417
Real estate construction		407,266		401,861
Retail real estate		1,480,520		1,693,769
Retail other		40,086		49,834
Portfolio loans	$	7,121,311	$	6,687,249
Allowance		(98,841)		(53,748)
Portfolio loans, net	$	7,022,470	$	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. September 30, 2020 includes purchase discounts and clearings in the pass rating. December 31, 2019 excludes purchase discounts and clearings. (dollars in thousands):

	September 30, 2020
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	2,011,113	$	145,817	$	82,942	$	33,247	$	7,912
Commercial real estate		2,541,455		255,447		71,315		37,052		7,139
Real estate construction		376,787		26,820		603		2,797		259
Retail real estate		1,452,145		10,960		4,069		4,848		8,498
Retail other		39,996		—		—		—		90
Total	$	6,421,496	$	439,044	$	158,929	$	77,944	$	23,898

	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 September 30, 2020 is as follows (dollars in thousand):

	Term Loans Amortized Cost Basis by Origination Year
														Revolving
As of September 30, 2020	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial:
Risk rating
Pass	$	1,029,324	$	173,103	$	117,434	$	100,388	$	67,473	$	87,096	$	436,295	$	2,011,113
Watch		24,601		21,566		16,918		14,606		3,488		13,653		50,985		145,817
Special Mention		6,011		2,572		2,166		7,181		6,853		14,949		43,210		82,942
Substandard		8,450		3,578		2,528		4,437		935		1,292		12,027		33,247
Substandard non-accrual		348		3,076		586		540		792		70		2,500		7,912
Total commercial	$	1,068,734	$	203,895	$	139,632	$	127,152	$	79,541	$	117,060	$	545,017	$	2,281,031
Commercial real estate:
Risk rating
Pass	$	557,205	$	565,460	$	425,448	$	439,438	$	215,498	$	315,026	$	23,380	$	2,541,455
Watch		52,304		71,844		62,609		28,787		21,629		18,186		88		255,447
Special Mention		8,429		14,981		5,479		12,664		6,096		23,170		496		71,315
Substandard		19,809		4,662		1,197		7,165		2,137		1,587		495		37,052
Substandard non-accrual		923		795		1,939		1,475		287		1,720		—		7,139
Total commercial real estate	$	638,670	$	657,742	$	496,672	$	489,529	$	245,647	$	359,689	$	24,459	$	2,912,408
Real estate construction:
Risk rating
Pass	$	107,927	$	188,254	$	60,326	$	1,188	$	568	$	1,868	$	16,656	$	376,787
Watch		17,661		4,266		2,515		2,205		173						26,820
Special Mention		592		11		—		—		—		—		—		603
Substandard		2,577		—		47		25		148		—		—		2,797
Substandard non-accrual		—		—		256		—		—		3		—		259
Total real estate construction	$	128,757	$	192,531	$	63,144	$	3,418	$	889	$	1,871	$	16,656	$	407,266
Retail real estate:
Risk rating
Pass	$	273,752	$	180,799	$	152,772	$	158,192	$	157,611	$	293,570	$	235,449	$	1,452,145
Watch		1,570		2,090		1,255		320		570		255		4,900		10,960
Special Mention		516		—		70		589		1,975		919		—		4,069
Substandard		1,642		100		330		82		770		1,655		269		4,848
Substandard non-accrual		275		81		697		688		239		4,929		1,589		8,498
Total retail real estate	$	277,755	$	183,070	$	155,124	$	159,871	$	161,165	$	301,328	$	242,207	$	1,480,520
Retail other:
Risk rating
Pass	$	6,974	$	10,695	$	6,798	$	3,336	$	961	$	777	$	10,455	$	39,996
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		15		7		—		2		1		64		1		90
Total retail other	$	6,989	$	10,702	$	6,798	$	3,338	$	962	$	841	$	10,456	$	40,086

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):

	September 30, 2020
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	53	$	—	$	—	$	7,912
Commercial real estate		74		294		—		7,139
Real estate construction		—		—		—		259
Retail real estate		4,606		1,558		262		8,498
Retail other		98		25		17		90
Total	$	4,831	$	1,877	$	279	$	23,898

	December 31, 2019
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	1,075	$	1,014	$	199	$	9,096
Commercial real estate		2,653		3,121		584		9,178
Real estate construction		19		—		—		630
Retail real estate		5,021		1,248		828		8,935
Retail other		52		68		—		57
Total	$	8,820	$	5,451	$	1,611	$	27,896

Summary of restructured loans

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

		September 30,		December 31,
	2020		2019
In compliance with modified terms	$	3,927	$	5,005
30 — 89 days past due		291		—
Included in non-performing loans		1,253		702
Total	$	5,471	$	5,707

Schedule of details of impaired loans, segregated by category

	September 30, 2020
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Commercial	$	15,464	$	2,554	$	5,205	$	7,759	$	1,694	$	8,746
Commercial real estate		9,047		7,737		594		8,331		236		11,613
Real estate construction		569		552		—		552		—		709
Retail real estate		5,285		4,578		474		5,052		474		9,059
Retail other		—		—		—		—		—		23
Total	$	30,365	$	15,421	$	6,273	$	21,694	$	2,404	$	30,150

	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 September 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	24,146	$	42,680	$	7,792	$	20,405	$	1,023	$	96,046
Provision for credit losses		2,593		3,703		(381)		(383)		17		5,549
Charged-off		(2,500)		(569)		(18)		(139)		(171)		(3,397)
Recoveries		124		103		26		301		89		643
Ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841

	As of and for the Nine Months Ended September 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		10,739		17,090		1,082		6,635		110		35,656
Charged-off		(5,682)		(1,833)		(18)		(1,139)		(575)		(9,247)
Recoveries		300		164		197		901		289		1,851
Ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841

	As of and for the Three Months Ended September 30, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	16,733	$	20,188	$	3,305	$	10,613		536	$	51,375
Provision for loan losses		463		3,167		(359)		(86)		226		3,411
Charged-off		(817)		(1,168)		—		(226)		(288)		(2,499)
Recoveries		147		33		164		221		113		678
Ending balance	$	16,526	$	22,220	$	3,110	$	10,522	$	587	$	52,965

	As of and for the Nine Months Ended September 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		3,417		1,981		54		2,212		375		8,039
Charged-off		(5,187)		(1,183)		—		(943)		(596)		(7,909)
Recoveries		467		285		333		782		320		2,187
Ending balance	$	16,526	$	22,220	$	3,110	$	10,522	$	587	$	52,965

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 September 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	$	1,694	$	236	$	—	$	474	$	—	$	2,404
Loans collectively evaluated for impairment		22,669		45,681		7,419		19,710		958		96,437
Ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841
Loans:
Loans individually evaluated for impairment	$	7,759	$	6,415	$	297	$	4,666	$	—	$	19,137
Loans collectively evaluated for impairment		2,273,272		2,904,077		406,714		1,475,468		40,086		7,099,617
PCD loans evaluated for impairment		—		1,916		255		386		—		2,557
Ending balance	$	2,281,031	$	2,912,408	$	407,266	$	1,480,520	$	40,086	$	7,121,311

	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