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Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2023

Loans and leases, net of unearned income

Loans and leases, net of unearned income, are summarized as follows:


	June 30, 2023		December 31, 2022
	(dollars in thousands)
Real estate - commercial mortgage	$	7,846,861	$	7,693,835
Commercial and industrial	4,602,446		4,477,537
Real-estate - residential mortgage	5,147,262		4,737,279
Real-estate - home equity	1,061,891		1,102,838
Real-estate - construction	1,308,564		1,269,925
Consumer	763,530		699,179
Leases and other loans	346,015		328,331
Gross loans	21,076,569		20,308,924
Unearned income	(31,884)		(29,377)
Net loans	$	21,044,685	$	20,279,547

The Corporation segments its loan portfolio by "portfolio segments," as presented in the table above. Certain portfolio segments are further disaggregated by "class segment" for the purpose of estimating credit losses.

Allowance for Credit Losses

The ACL consists of loans evaluated collectively and individually for expected credit losses. The ACL represents an estimate of expected credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans. The ACL is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries. The reserve for OBS credit exposures includes estimated losses on unfunded loan commitments, letters of credit and other OBS credit exposures.

The following table summarizes the ACL - loans balance and the reserve for OBS credit exposures balance as of June 30, 2023 and December 31, 2022:



	June 30, 2023		December 31, 2022
	(dollars in thousands)
ACL - loans	$	287,442	$	269,366

Reserve for OBS credit exposures(1)	$	16,568	$	16,328

(1) Included in other liabilities on the consolidated balance sheets.

The following table presents the activity in the ACL - loans balances:


	Three months ended June 30				Six months ended June 30
	2023		2022		2023		2022
	(dollars in thousands)
Balance at beginning of period	$	278,695	$	243,705	$	269,366	$	249,001


Loans charged off	(4,787)		(1,618)		(21,690)		(3,518)
Recoveries of loans previously charged off	2,816		5,367		5,715		8,321
Net loans (charged off) recovered	(1,971)		3,749		(15,975)		4,803
Provision for credit losses(1)	10,718		1,110		34,051		(5,240)
Balance at end of period	$	287,442	$	248,564	$	287,442	$	248,564
Provision for OBS credit exposures	$	(971)	$	390	$	240	$	(210)
Reserve for OBS credit exposures	$	16,568	$	14,323	$	16,568	$	14,323

(1) Provision included in the table only includes the portion related to net loans.

The following table presents the activity in the ACL by portfolio segment:


	Real Estate Commercial Mortgage		Commercial and Industrial		Real Estate Residential Mortgage		Consumer and Home Equity		Real Estate Construction		Leases and other loans		Total
	(dollars in thousands)
Three months ended June 30, 2023
Balance at March 31, 2023	$	66,256	$	77,126	$	86,209	$	27,303	$	11,646	$	10,155	$	278,695


Loans charged off	(230)		(2,017)		(62)		(1,313)		—		(1,165)		(4,787)
Recoveries of loans previously charged off	29		988		58		959		569		213		2,816
Net loans (charged off) recovered	(201)		(1,029)		(4)		(354)		569		(952)		(1,971)
Provision for loan losses(1)	6,247		(908)		2,644		2,033		(1,071)		1,773		10,718
Balance at June 30, 2023	$	72,302	$	75,189	$	88,849	$	28,982	$	11,144	$	10,976	$	287,442
Three months ended June 30, 2022
Balance at March 31, 2022	$	79,853	$	66,511	$	55,892	$	20,213	$	13,303	$	7,933	$	243,705
Loans charged off	—		(201)		(66)		(877)		—		(474)		(1,618)
Recoveries of loans previously charged off	3,536		739		92		762		12		226		5,367
Net loans (charged off) recovered	3,536		538		26		(115)		12		(248)		3,749
Provision for loan and lease losses(1)	(10,784)		5,070		5,717		2,982		(2,687)		812		1,110
Balance at June 30, 2022	$	72,605	$	72,119	$	61,635	$	23,080	$	10,628	$	8,497	$	248,564
Six months ended June 30, 2023
Balance at December 31, 2022	$	69,456	$	70,116	$	83,250	$	26,429	$	10,743	$	9,372	$	269,366


Loans charged off	(13,592)		(2,629)		(62)		(3,519)		—		(1,888)		(21,690)
Recoveries of loans previously charged off	815		2,074		106		1,620		771		329		5,715
Net loans (charged off) recovered	(12,777)		(555)		44		(1,899)		771		(1,559)		(15,975)
Provision for loan losses(1)	15,623		5,628		5,555		4,452		(370)		3,163		34,051
Balance at June 30, 2023	$	72,302	$	75,189	$	88,849	$	28,982	$	11,144	$	10,976	$	287,442
Six months ended June 30, 2022
Balance at December 31, 2021	$	87,970	$	67,056	$	54,236	$	19,749	$	12,941	$	7,049	$	249,001
Loans charged off	(152)		(428)		(66)		(1,929)		—		(943)		(3,518)
Recoveries of loans previously charged off	3,648		2,719		314		1,216		44		380		8,321
Net loans (charged off) recovered	3,496		2,291		248		(713)		44		(563)		4,803
Provision for loan losses(1)	(18,861)		2,772		7,151		4,044		(2,357)		2,011		(5,240)
Balance at June 30, 2022	$	72,605	$	72,119	$	61,635	$	23,080	$	10,628	$	8,497	$	248,564

(1) Provision included in the table only includes the portion related to net loans.

The ACL - loans includes qualitative adjustments, as appropriate, intended to capture the impact of uncertainties not reflected in the quantitative models. Qualitative adjustments include and consider changes in national, regional and local economic and

business conditions, an assessment of the lending environment, including underwriting standards and other factors affecting credit quality.

The provision for credit losses for the second quarter of 2023 was recorded to increase the ACL as a result of loan growth and changes to the macroeconomic outlook.

Non-accrual Loans

All loans individually evaluated for impairment are measured for losses on a quarterly basis. As of June 30, 2023 and December 31, 2022, substantially all of the Corporation's individually evaluated loans with total commitments greater than or equal to $1.0 million were measured based on the estimated fair value of each loan’s collateral, if any. Collateral could be in the form of real estate, in the case of commercial mortgages and construction loans, or business assets, such as accounts receivables or inventory, in the case of commercial and industrial loans. Commercial and industrial loans may also be secured by real estate.

As of June 30, 2023 and December 31, 2022, approximately 91% of loans evaluated individually for impairment with principal balances greater than or equal to $1.0 million, whose primary collateral consisted of real estate, were measured at estimated fair value using appraisals performed by state certified third-party appraisers that had been updated in the preceding 12 months.

The following table presents total non-accrual loans, by class segment:


	June 30, 2023						December 31, 2022
	With a Related Allowance		Without a Related Allowance		Total		With a Related Allowance		Without a Related Allowance		Total
	(dollars in thousands)
Real estate - commercial mortgage	$	19,727	$	34,088	$	53,815	$	39,722	$	30,439	$	70,161
Commercial and industrial	17,420		12,068		29,488		14,804		12,312		27,116
Real estate - residential mortgage	19,675		2,025		21,700		25,315		979		26,294
Real estate - home equity	5,711		116		5,827		5,975		130		6,105
Real estate - construction	707		392		1,099		866		502		1,368
Consumer	17		—		17		92		—		92
Leases and other loans	9,264		2,070		11,334		4,052		9,255		13,307
	$	72,521	$	50,759	$	123,280	$	90,826	$	53,617	$	144,443

As of June 30, 2023 and December 31, 2022, there were $50.8 million and $53.6 million, respectively, of non-accrual loans that did not have a specific valuation allowance for credit losses. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary.

Asset Quality

Maintaining an appropriate ACL is dependent on various factors, including the ability to identify potential problem loans in a timely manner. For commercial construction, commercial and industrial, and commercial real estate, an internal risk rating process is used. The Corporation believes that internal risk ratings are the most relevant credit quality indicator for these types of loans. The migration of loans through the various internal risk categories is a significant component of the ACL methodology for these loans, which bases the probability of default on this migration. Assigning risk ratings involves judgment. The Corporation's loan review officers provide a separate assessment of risk rating accuracy. Risk ratings may be changed based on the ongoing monitoring procedures performed by loan officers or credit administration staff, or if specific loan review assessments identify a deterioration or an improvement in a loan.

The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination year, in the current period:


		June 30, 2023
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
		(in thousands)												Amortized		Amortized
		2023		2022		2021		2020		2019		Prior		Cost Basis		Cost Basis		Total
Real estate - commercial mortgage
	Pass	$	436,213	$	1,014,277	$	1,079,313	$	931,445	$	761,840	$	3,044,060	$	98,737	$	3,912	$	7,369,797
	Special Mention	—		17,541		70,283		17,725		38,372		149,434		1,012		—		294,367
	Substandard or Lower	202		4,889		25,184		45,196		25,257		81,489		480		—		182,697
	Total real estate - commercial mortgage	436,415		1,036,707		1,174,780		994,366		825,469		3,274,983		100,229		3,912		7,846,861
Real estate - commercial mortgage
	Current period gross charge-offs	—		—		—		—		—		(30)		—		(13,562)		(13,592)
Commercial and industrial(1)
	Pass	461,413		652,086		425,486		365,676		292,754		706,510		1,432,210		9,051		4,345,186
	Special Mention	392		16,804		11,786		5,392		3,522		16,458		60,230		748		115,332
	Substandard or Lower	205		3,221		1,780		3,063		19,248		29,342		84,059		1,010		141,928
	Total commercial and industrial	462,010		672,111		439,052		374,131		315,524		752,310		1,576,499		10,809		4,602,446
Commercial and industrial(1)
	Current period gross charge-offs	—		—		—		—		—		—		(502)		(2,127)		(2,629)
Real estate - construction(2)
	Pass	103,193		218,294		432,924		127,131		18,815		88,431		17,480		—		1,006,268
	Special Mention	—		26		262		28,037		—		11,263		—		—		39,588
	Substandard or Lower	—		473		—		—		2,202		23,259		2,408		—		28,342
	Total real estate - construction	103,193		218,793		433,186		155,168		21,017		122,953		19,888		—		1,074,198
Real estate - construction(2)
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
	Pass	$	1,000,819	$	1,884,657	$	1,937,723	$	1,424,252	$	1,073,409	$	3,839,001	$	1,548,427	$	12,963	$	12,721,251
	Special Mention	392		34,371		82,331		51,154		41,894		177,155		61,242		748		449,287
	Substandard or Lower	407		8,583		26,964		48,259		46,707		134,090		86,947		1,010		352,967
	Total	$	1,001,618	$	1,927,611	$	2,047,018	$	1,523,665	$	1,162,010	$	4,150,246	$	1,696,616	$	14,721	$	13,523,505

(1) Loans originated in 2021 and 2020 include $9.8 million of PPP loans that were assigned a rating of Pass based on the existence of a federal government

guaranty through the SBA.

(2) Excludes real estate - construction - other.

The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination year, in the prior period:


		December 31, 2022
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
		(dollars in thousands)												Amortized		Amortized
		2022		2021		2020		2019		2018		Prior		Cost Basis		Cost Basis		Total
Real estate - commercial mortgage
	Pass	$	1,014,575	$	1,095,725	$	969,118	$	810,850	$	621,689	$	2,610,511	$	80,665	$	307	$	7,203,440
	Special Mention	95		50,367		23,296		33,735		16,205		181,736		947		—		306,381
	Substandard or Lower	1,032		3,039		31,042		38,378		23,112		87,168		243		—		184,014
	Total real estate - commercial mortgage	1,015,702		1,149,131		1,023,456		882,963		661,006		2,879,415		81,855		307		7,693,835
Real estate - commercial mortgage
	Current period gross charge-offs	—		—		—		—		—		(53)		—		(12,420)		(12,473)
Commercial and industrial(1)
	Pass	907,390		449,145		397,881		315,605		185,096		604,352		1,387,961		618		4,248,048
	Special Mention	11,405		24,479		3,763		8,147		5,218		24,633		56,048		250		133,943
	Substandard or Lower	834		418		4,818		13,044		3,081		22,025		51,077		249		95,546
	Total commercial and industrial	919,629		474,042		406,462		336,796		193,395		651,010		1,495,086		1,117		4,477,537
Commercial and industrial(1)
	Current period gross charge-offs	—		—		(36)		—		(21)		(365)		(1,192)		(776)		(2,390)
Real estate - construction(2)
	Pass	159,195		390,993		243,406		28,539		24,421		93,511		47,271		—		987,336
	Special Mention	—		—		—		—		—		21,603		—		—		21,603
	Substandard or Lower	—		—		3,852		2,274		—		4,272		203		—		10,601
	Total real estate - construction	159,195		390,993		247,258		30,813		24,421		119,386		47,474		—		1,019,540
Real estate - construction(2)
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
	Pass	$	2,081,160	$	1,935,863	$	1,610,405	$	1,154,994	$	831,206	$	3,308,374	$	1,515,897	$	925	$	12,438,824
	Special Mention	11,500		74,846		27,059		41,882		21,423		227,972		56,995		250		461,927
	Substandard or Lower	1,866		3,457		39,712		53,696		26,193		113,465		51,523		249		290,161
	Total	$	2,094,526	$	2,014,166	$	1,677,176	$	1,250,572	$	878,822	$	3,649,811	$	1,624,415	$	1,424	$	13,190,912

(1) Loans originated in 2021 and 2020 include $20.4 million of PPP loans that were assigned a rating of Pass based on the existence of a federal government

guaranty through the SBA.

(2) Excludes real estate - construction - other.

The Corporation considers the performance of the loan portfolio and its impact on the ACL. The Corporation does not assign internal risk ratings to smaller balance, homogeneous loans, such as home equity, residential mortgage, construction loans to individuals secured by residential real estate, consumer and leases and other loans. For these loans, the most relevant credit quality indicator is delinquency status and the Corporation evaluates credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year, for the periods shown:


		June 30, 2023
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
		(dollars in thousands)												Amortized		Amortized
		2023		2022		2021		2020		2019		Prior		Cost Basis		Cost Basis		Total
Real estate - residential mortgage
	Performing	$	413,908	$	1,030,693	$	1,715,214	$	1,020,426	$	276,538	$	651,744	$	—	$	—	$	5,108,523
	Nonperforming	—		658		4,680		4,650		5,239		23,512		—		—		38,739
	Total real estate - residential mortgage	413,908		1,031,351		1,719,894		1,025,076		281,777		675,256		—		—		5,147,262
Real estate - residential mortgage
	Current period gross charge-offs	—		—		—		—		—		—		—		(62)		(62)
Consumer and real estate - home equity
	Performing	169,479		309,613		94,775		66,026		49,842		284,430		814,043		26,745		1,814,953
	Nonperforming	60		403		516		418		66		5,301		1,393		2,311		10,468
	Total consumer and real estate - home equity	169,539		310,016		95,291		66,444		49,908		289,731		815,436		29,056		1,825,421
Consumer and real estate - home equity
	Current period gross charge-offs	—		—		—		—		—		(374)		—		(3,145)		(3,519)
Leases and other loans
	Performing	99,355		94,583		33,981		29,249		22,671		22,958		—		—		302,797
	Nonperforming	—		—		—		—		—		11,334		—		—		11,334
	Leases and other loans	99,355		94,583		33,981		29,249		22,671		34,292		—		—		314,131
Leases and other loans
	Current period gross charge-offs	(214)		(401)		(133)		(72)		(52)		(417)		—		(599)		(1,888)
Construction - other
	Performing	31,781		173,436		25,814		3,335		—		—		—		—		234,366
	Nonperforming	—		—		—		—		—		—		—		—		—
	Total construction - other	31,781		173,436		25,814		3,335		—		—		—		—		234,366
Construction - other
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
	Performing	$	714,523	$	1,608,325	$	1,869,784	$	1,119,036	$	349,051	$	959,132	$	814,043	$	26,745	$	7,460,639
	Nonperforming	60		1,061		5,196		5,068		5,305		40,147		1,393		2,311		60,541
	Total	$	714,583	$	1,609,386	$	1,874,980	$	1,124,104	$	354,356	$	999,279	$	815,436	$	29,056	$	7,521,180


		December 31, 2022
		Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans converted to Term Loans
		(dollars in thousands)												Amortized		Amortized
		2022		2021		2020		2019		2018		Prior		Cost Basis		Cost Basis		Total
Real estate - residential mortgage
	Performing	$	933,903	$	1,708,703	$	1,054,126	$	286,167	$	87,455	$	620,416	$	—	$	—	$	4,690,770
	Nonperforming	1,199		5,104		6,597		6,466		4,587		22,556		—		—		46,509
	Total real estate - residential mortgage	935,102		1,713,807		1,060,723		292,633		92,042		642,972		—		—		4,737,279
Real estate - residential mortgage
	Current period gross charge-offs	—		—		—		—		—		—		—		(66)		(66)
Consumer and Real estate - home equity
	Performing	416,631		109,724		80,422		52,384		45,642		211,127		842,226		34,061		1,792,217
	Nonperforming	292		298		174		36		98		6,512		1,722		668		9,800
	Total consumer and real estate - home equity	416,923		110,022		80,596		52,420		45,740		217,639		843,948		34,729		1,802,017
Consumer and Real estate - home equity
	Current period gross charge-offs	—		(587)		(70)		(108)		(16)		(442)		(178)		(3,011)		(4,412)
Construction - other
	Performing	164,924		73,492		10,892		—		1,077		—		—		—		250,385
	Nonperforming	—		—		—		—		—		—		—		—		—
	Total construction - other	164,924		73,492		10,892		—		1,077		—		—		—		250,385
Construction - other
	Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Leases and other loans
	Performing	146,198		39,427		40,024		29,309		15,019		15,670		—		—		285,647
	Nonperforming	—		—		—		—		—		13,307		—		—		13,307
	Leases and other loans	146,198		39,427		40,024		29,309		15,019		28,977		—		—		298,954
Leases and other loans
	Current period gross charge-offs	(506)		(167)		(140)		(80)		(47)		(1,191)		—		—		(2,131)
Total
	Performing	$	1,661,656	$	1,931,346	$	1,185,464	$	367,860	$	149,193	$	847,213	$	842,226	$	34,061	$	7,019,019
	Nonperforming	1,491		5,402		6,771		6,502		4,685		42,375		1,722		668		69,616
	Total	$	1,663,147	$	1,936,748	$	1,192,235	$	374,362	$	153,878	$	889,588	$	843,948	$	34,729	$	7,088,635

The following table presents non-performing assets:


	June 30, 2023		December 31, 2022
	(dollars in thousands)
Non-accrual loans	$	123,280	$	144,443
Loans 90 days or more past due and still accruing(1)	24,415		27,463
Total non-performing loans	147,695		171,906
OREO(2)	3,881		5,790
Total non-performing assets	$	151,576	$	177,696

(1) Excludes PPP loans which are fully guaranteed by the federal government of $1.0 million and $7.7 million as of June 30, 2023 and December 31, 2022,

respectively.

(2) Excludes $8.4 million and $6.0 million of residential mortgage properties for which formal foreclosure proceedings were in process as of June 30, 2023 and

December 31, 2022, respectively.

The following tables present the aging of the amortized cost basis of loans, by class segment:


	30-59		60-89		≥ 90 Days
	Days Past		Days Past		Past Due		Non-
	Due		Due		and Accruing		Accrual		Current		Total
	(dollars in thousands)
June 30, 2023
Real estate – commercial mortgage	$	6,566	$	2,671	$	1,233	$	53,815	$	7,782,576	$	7,846,861
Commercial and industrial(1)	3,542		1,977		1,100		29,488		4,566,339		4,602,446
Real estate – residential mortgage	35,456		6,017		17,457		21,700		5,066,632		5,147,262
Real estate – home equity	5,865		1,567		3,902		5,827		1,044,730		1,061,891
Real estate – construction	1,719		—		—		1,099		1,305,746		1,308,564
Consumer	6,482		1,382		723		17		754,926		763,530
Leases and other loans(2)	462		375		—		11,334		301,960		314,131
Total	$	60,092	$	13,989	$	24,415	$	123,280	$	20,822,909	$	21,044,685

(1) Excludes delinquent PPP loans 30-59 days past due, 60-89 days past due and 90 days or more past due of $0.1 million, $0.0 million and $1.0 million,

respectively, which are fully guaranteed by the federal government and are classified as current.

(2) Includes unearned income.


	30-59 Days Past Due		60-89 Days Past Due		≥ 90 Days Past Due and Accruing		Non- accrual		Current		Total
	(dollars in thousands)
December 31, 2022
Real estate – commercial mortgage	$	10,753	$	4,644	$	2,473	$	70,161	$	7,605,804	$	7,693,835
Commercial and industrial(1)	6,067		2,289		1,172		27,116		4,440,893		4,477,537
Real estate – residential mortgage	57,061		8,209		20,215		26,294		4,625,500		4,737,279
Real estate – home equity	5,666		2,444		2,704		6,105		1,085,919		1,102,838
Real estate – construction	1,762		1,758		—		1,368		1,265,037		1,269,925
Consumer	6,692		1,339		899		92		690,157		699,179
Leases and other loans(2)	348		122		—		13,307		285,177		298,954
Total	$	88,349	$	20,805	$	27,463	$	144,443	$	19,998,487	$	20,279,547

(1) Excludes delinquent PPP loans 30-59 days past due, 60-89 days past due and 90 days or more past due of $0.1 million, $0.7 million and $7.7 million,

respectively, which are fully guaranteed by the federal government and are classified as current.

(2) Includes unearned income.

Collateral-Dependent Loans

A loan or a lease, is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans and leases deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, the Corporation records a partial charge-off to reduce the collateral-dependent loan's or lease's carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent loans or leases consists of various types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, and lodging, agriculture land, and vacant land.

Loan Modifications

On January 1, 2023, the Corporation adopted ASU 2022-02. Loan modifications reported below do not include modifications with insignificant payment delays. ASU 2022-02 lists the following factors when considering if the loan modification has insignificant payment delays: (1) the amount of the restructured payments subject to the delay is insignificant relative to the unpaid principal or collateral value of the debt and will result in an insignificant shortfall in the contractual amount due, and (2) the delay in timing of the restructured payment period is insignificant relative to the frequency of payments due under the debt, the debt’s original contractual maturity or the debt’s original expected duration.

The ACL incorporates an estimate of lifetime expected credit losses and is recorded upon asset origination or acquisition. The starting point for the estimate of the ACL is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Corporation uses a probability of default/loss given default model to determine the ACL. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

The Corporation modifies loans by providing a concession when deemed appropriate. Depending on the circumstances, a term extension, interest rate reduction or principal forgiveness may be granted. In certain instances a combination of concessions may be provided to a customer.

Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL, a change to the ACL is generally not recorded upon modification. When principal forgiveness is provided, the amortized cost basis of the forgiven portion of the asset is written off against the ACL. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL.

The following table presents the amortized cost basis during the three months and six months ended June 30, 2023 of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:


	Term Extension
	Three months ended June 30, 2023				Six months ended June 30, 2023
	Amortization Cost Basis		% of Class of Financing Receivable			Amortization Cost Basis		% of Class of Financing Receivable
	(dollars in thousands)
Real estate - commercial mortgage	$	276	—	%		$	1,478	0.02	%
Commercial and industrial	—		—			75		—
Real estate - residential mortgage	2,045		0.04			3,423		0.07




Total	$	2,321				$	4,976

The following table presents the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months and six months ended June 30, 2023:


			Term Extension
			Financial Effect
Three months ended June 30, 2023
Real estate - commercial mortgage			Added a weighted-average 1.25 years to the life of loans, which reduced monthly payment amounts for the borrowers.

Real estate - residential mortgage			Added a weighted-average 5.29 years to the life of loans, which reduced monthly payment amounts for the borrowers.





Six months ended June 30, 2023
Real estate - commercial mortgage			Added a weighted-average 2.05 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Commercial and industrial			Added a weighted-average 2.88 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Real estate - residential mortgage			Added a weighted-average 4.64 years to the life of loans, which reduced monthly payment amounts for the borrowers.

During the six months ended June 30, 2023, there were no loans modified due to financial difficulty where there was an interest rate reduction or principal balance forgiveness.

During the six months ended June 30, 2023, there were no loans modified due to financial difficulty that defaulted in the six months subsequent to modification.

The following table presents the performance of loans that have been modified in the last six months as of June 30, 2023.


			30-89		90+		Total
			Days Past		Past Due		Past
	Current		Due		and Accruing		Due
	(dollars in thousands)
Real estate - commercial mortgage	$	1,478	$	—	$	—	$	—
Commercial and industrial	75		—		—		—
Real estate - residential mortgage	3,423		—		—		—




Total	$	4,976	$	—	$	—	$	—

There were no commitments to lend additional funds to borrowers with loan modifications as a result of financial difficulty as of June 30, 2023.