Allowance for Credit Losses

6 Months Ended

Jun. 30, 2021

We maintain an ACL at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) Commercial Real Estate, or CRE, 2) Commercial and Industrial, or C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer.

The following are key risks within each portfolio segment:

CRE—Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied.

C&I—Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the company is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. Collateral for these types of loans often does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt.

Commercial Construction—Loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While the risk of these loans is generally confined to the construction/development period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer.

Business Banking—Commercial purpose loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs. The business banking portfolio is monitored by utilizing a standard and closely managed process focusing on behavioral and performance criteria. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and business.

Consumer Real Estate—Loans secured by first and second liens such as home equity loans, home equity lines of credit and 1-4 family residential mortgages, including purchase money mortgages. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the local housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

Other Consumer—Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes auto loans, unsecured loans and lines. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

Management monitors various credit quality indicators for the commercial, business banking and consumer loan portfolios, including changes in risk ratings, nonperforming status and delinquency on a monthly basis.

We monitor the commercial loan portfolio through an internal risk rating system. Loan risk ratings are assigned based upon the creditworthiness of the borrower and are reviewed on an ongoing basis according to our internal policies. Loans within the pass rating generally have a lower risk of loss than loans risk rated as special mention or substandard.

Our risk ratings are consistent with regulatory guidance and are as follows:

Pass—The loan is currently performing and is of high quality.

Special Mention—A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in the strength of our credit position at some future date.

Substandard—A substandard loan is not adequately protected by the net worth and/or paying capacity of the borrower or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful—Loans classified doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

The following tables presents loan balances by year of origination and internally assigned risk rating for our portfolio segments as of the dates presented:


	June 30, 2021
	Risk Rating
(dollars in thousands)	2021		2020		2019		2018		2017		2016 and Prior		Revolving		Revolving-Term		Total

Commercial real estate
Pass	$	179,504	$	326,531	$	457,287	$	347,132	$	229,164	$	778,930	$	40,398	—		$	2,358,945
Special mention	—		448		29,581		8,310		38,927		112,654		—		—		189,920
Substandard	—		—		17,007		15,516		19,229		131,668		1,500		—		184,920
Doubtful	—		—		751		—		—		5,760		—		—		6,511
Total commercial real estate	179,504		326,979		504,625		370,957		287,320		1,029,012		41,898		—		2,740,296

Commercial and industrial
Pass	395,929		265,953		153,588		102,789		45,641		140,169		370,282		—		1,474,351
Special mention	51		3,008		22,124		3,369		—		1,141		11,574		—		41,266
Substandard	5,433		—		8,962		1,573		5,572		5,357		3,733		—		30,630
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial	401,413		268,962		184,674		107,731		51,213		146,667		385,588		—		1,546,247

Commercial construction
Pass	61,289		126,858		182,394		48,374		1,352		5,131		19,761		—		445,159
Special mention	—		1,380		3,269		—		—		8,421		—		—		13,071
Substandard	—		2,138		4,058		—		500		2,945		—		—		9,642
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial construction	61,289		130,376		189,721		48,374		1,853		16,498		19,761		—		467,871

Business banking
Pass	100,800		115,666		158,725		123,708		85,193		337,243		104,566		455		1,026,356
Special mention	117		637		1,919		1,665		1,564		6,958		287		121		13,270
Substandard	—		72		1,694		3,364		1,376		23,139		954		651		31,249
Doubtful	—		—		—		—		—		—		—		—		—
Total business banking	100,917		116,374		162,338		128,737		88,133		367,340		105,808		1,228		1,070,875

Consumer real estate
Pass	43,351		111,065		98,684		49,815		45,224		241,295		467,802		22,670		1,079,907
Special mention	—		—		—		—		—		2,205		—		—		2,205
Substandard	—		58		185		1,595		1,404		6,963		356		1,205		11,766
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer real estate	43,351		111,123		98,869		51,411		46,628		250,463		468,158		23,875		1,093,878

Other consumer
Pass	12,668		12,283		9,842		4,764		2,016		1,767		36,611		1,040		80,990
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		113		123		208		4,910		275		1,560		7,190
Doubtful	—		—		—		—		—		4		—		—		4
Total other consumer	12,668		12,283		9,955		4,887		2,223		6,681		36,886		2,600		88,184

Pass	793,541		958,356		1,060,518		676,582		408,589		1,504,535		1,039,420		24,166		6,465,707
Special mention	168		5,474		56,894		13,343		40,492		131,379		11,861		121		259,732
Substandard	5,433		2,268		32,019		22,172		28,289		174,983		6,818		3,415		275,397
Doubtful	—		—		751		—		—		5,764		—		—		6,514
Total	$	799,142	$	966,097	$	1,150,182	$	712,097	$	477,370	$	1,816,661	$	1,058,098	$	27,703	$	7,007,351


	December 31, 2020
	Risk Rating
(dollars in thousands)	2020		2019		2018		2017		2016		2015 and Prior		Revolving		Revolving-Term		Total

Commercial real estate
Pass	$	334,086	$	422,800	$	394,963	$	277,724	$	307,321	$	615,217	$	46,330	$	—	$	2,398,441
Special mention	—		35,499		10,200		22,502		55,174		75,022		—		—		198,397
Substandard	—		17,259		12,781		19,914		50,700		83,792		1,500		—		185,946
Doubtful	—		645		—		—		1,989		6,529		—		—		9,163
Total commercial real estate	334,086		476,203		417,944		320,140		415,184		780,560		47,830		—		2,791,947

Commercial and industrial
Pass	454,131		199,453		140,049		68,607		27,645		206,782		383,082		—		1,479,749
Special mention	3,697		8,211		2,628		697		768		1,046		23,527		—		40,574
Substandard	—		7,793		2,613		8,544		75		13,781		2,022		—		34,828
Doubtful	—		—		—		4,401		—		—		—		—		4,401
Total commercial and industrial	457,828		215,457		145,290		82,249		28,488		221,609		408,631		—		1,559,552

Commercial construction
Pass	131,235		224,794		59,649		2,420		6,346		4,555		12,778		—		441,777
Special mention	1,578		2,533		3,886		—		—		8,593		—		—		16,590
Substandard	—		3,580		—		501		—		3,629		—		—		7,710
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial construction	132,813		230,907		63,535		2,921		6,346		16,777		12,778		—		466,077

Business banking
Pass	296,254		154,335		123,207		86,552		77,238		266,042		103,571		291		1,107,490
Special mention	—		1,060		1,147		1,602		1,084		6,866		637		123		12,519
Substandard	103		1,078		3,896		3,209		3,880		25,871		1,341		680		40,058
Doubtful	—		—		—		—		—		—		—		—		—
Total business banking	296,357		156,473		128,250		91,363		82,202		298,779		105,549		1,094		1,160,067

Consumer real estate
Pass	120,736		122,171		67,700		63,653		73,805		243,939		438,888		22,667		1,153,559
Special mention	—		—		1,489		—		—		150		132		—		1,771
Substandard	—		373		742		1,480		2,449		6,958		—		—		12,002
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer real estate	120,736		122,544		69,931		65,133		76,254		251,047		439,020		22,667		1,167,332

Other consumer
Pass	18,849		13,162		6,784		3,395		2,082		687		26,647		2,767		74,373
Special mention	—		—		—		—		—		—		—		—		—
Substandard	15		—		—		—		—		3,367		744		2,386		6,512
Doubtful	—		—		—		—		—		—		—		—		—
Total other consumer	18,864		13,162		6,784		3,395		2,082		4,054		27,391		5,153		80,885


Pass	1,355,291		1,136,715		792,352		502,350		494,436		1,337,221		1,011,297		25,726		6,655,389
Special Mention	5,274		47,302		19,350		24,802		57,026		91,677		24,296		123		269,851
Substandard	118		30,083		20,032		33,648		57,105		137,398		5,607		3,066		287,056
Doubtful	—		645		—		4,401		1,989		6,529		—		—		13,564
Total	$	1,360,684	$	1,214,746	$	831,734	$	565,201	$	610,556	$	1,572,826	$	1,041,199	$	28,914	$	7,225,860

We monitor the delinquent status of the commercial and consumer portfolios on a monthly basis. Loans are considered nonperforming when interest and principal are 90 days or more past due or management has determined that a material deterioration in the borrower’s financial condition exists. The risk of loss is generally highest for nonperforming loans.

The following tables presents loan balances by year of origination and performing and nonperforming status for our portfolio segments as of June 30, 2021 and December 31, 2020:


	June 30, 2021
(dollars in thousands)	2021		2020		2019		2018		2017		2016 and Prior		Revolving		Revolving-Term		Total

Commercial real estate
Performing	$	179,504	$	326,979	$	488,368	$	368,211	$	280,693	$	974,576	$	41,898	$	—	$	2,660,229
Nonperforming	—		—		16,257		2,747		6,628		54,435		—		—		80,067
Total commercial real estate	179,504		326,979		504,625		370,957		287,320		1,029,012		41,898		—		2,740,296

Commercial and industrial
Performing	395,980		268,962		184,674		107,347		45,711		146,416		384,959		—		1,534,049
Nonperforming	5,433		—		—		384		5,501		250		629		—		12,198
Total commercial and industrial	401,413		268,962		184,674		107,731		51,213		146,667		385,588		—		1,546,247

Commercial construction
Performing	61,289		130,376		189,721		48,374		1,853		16,113		19,761		—		467,486
Nonperforming	—		—		—		—		—		385		—		—		385
Total commercial construction	61,289		130,376		189,721		48,374		1,853		16,498		19,761		—		467,871

Business banking
Performing	100,917		116,374		162,077		127,306		87,342		358,870		105,753		1,170		1,059,810
Nonperforming	—		—		261		1,431		791		8,470		55		57		11,064
Total business banking	100,917		116,374		162,338		128,737		88,133		367,340		105,808		1,228		1,070,875

Consumer real estate
Performing	43,351		110,441		98,578		51,161		46,018		244,783		467,827		22,934		1,085,094
Nonperforming	—		682		291		249		610		5,680		331		940		8,783
Total consumer real estate	43,351		111,123		98,869		51,411		46,628		250,463		468,158		23,875		1,093,878

Other consumer
Performing	12,668		12,162		9,955		4,887		2,223		6,681		36,886		2,600		88,062
Nonperforming	—		121		—		—		—		—		—		—		121
Total other consumer	12,668		12,283		9,955		4,887		2,223		6,681		36,886		2,600		88,184

Performing	793,709		965,293		1,133,373		707,286		463,841		1,747,440		1,057,084		26,705		6,894,731
Nonperforming	5,433		803		16,809		4,811		13,529		69,221		1,015		998		112,619
Total	$	799,142	$	966,097	$	1,150,182	$	712,097	$	477,370	$	1,816,661	$	1,058,098	$	27,703	$	7,007,351


	December 31, 2020
(dollars in thousands)	2020		2019		2018		2017		2016		2015 and Prior		Revolving		Revolving-Term		Total

Commercial real estate
Performing	$	334,086	$	459,799	$	417,944	$	313,465	$	394,972	$	722,782	$	47,830	$	—	$	2,690,879
Nonperforming	—		16,404		—		6,675		20,212		57,778		—		—		101,070
Total commercial real estate	334,086		476,203		417,944		320,140		415,184		780,560		47,830		—		2,791,947

Commercial and industrial
Performing	457,828		214,144		143,706		69,411		28,426		220,701		408,350		—		1,542,566
Nonperforming	—		1,313		1,584		12,838		62		908		281		—		16,985
Total commercial and industrial	457,828		215,457		145,290		82,249		28,488		221,609		408,631		—		1,559,552

Commercial construction
Performing	132,813		230,907		63,535		2,921		6,346		16,393		12,778		—		465,692
Nonperforming	—		—		—		—		—		384		—		—		384
Total commercial construction	132,813		230,907		63,535		2,921		6,346		16,777		12,778		—		466,077

Business Banking
Performing	296,327		156,164		126,432		90,414		80,106		286,970		105,494		1,037		1,142,944
Nonperforming	30		309		1,818		949		2,096		11,809		55		57		17,123
Total business banking	296,357		156,473		128,250		91,363		82,202		298,779		105,549		1,094		1,160,067

Consumer real estate
Performing	120,736		122,315		69,225		63,647		74,690		245,331		438,702		21,572		1,156,216
Nonperforming	—		229		706		1,486		1,564		5,716		318		1,096		11,116
Total consumer real estate	120,736		122,544		69,931		65,133		76,254		251,047		439,020		22,667		1,167,332

Other consumer
Performing	18,864		13,162		6,784		3,395		2,082		3,958		27,391		5,153		80,789
Nonperforming	—		—		—		—		—		96		—		—		96
Total other consumer	18,864		13,162		6,784		3,395		2,082		4,054		27,391		5,153		80,885

Performing	1,360,654		1,196,491		827,625		543,253		586,622		1,496,135		1,040,544		27,762		7,079,086
Nonperforming	30		18,254		4,108		21,948		23,934		76,691		654		1,153		146,774
Total	$	1,360,684	$	1,214,746	$	831,734	$	565,201	$	610,556	$	1,572,826	$	1,041,199	$	28,914	$	7,225,860

The following tables present the age analysis of past due loans segregated by class of loans as of the dates presented:


	June 30, 2021
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Non - performing		Total Past Due Loans		Total Loans
Commercial real estate	$	2,648,221	$	12,007	$	—	$	80,067	$	92,075	2,740,296
Commercial and industrial	1,534,049		—		—		12,198		12,198		1,546,247
Commercial construction	466,987		—		500		385		885		467,871
Business banking	1,057,279		2,311		222		11,064		13,597		1,070,875
Consumer real estate	1,083,947		640		507		8,783		9,930		1,093,878
Other consumer	87,905		105		52		121		278		88,184
Total	$	6,878,389	$	15,063	$	1,281	$	112,619	$	128,962	$	7,007,351

(1) We had 42 loans that were modified totaling $68.7 million under the CARES Act at June 30, 2021. These customers were not considered past due as a result of their delayed payments. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it left off upon entry into the program. Due to the modifications, this delinquency table may not accurately reflect the credit risk associated with these loans.


	December 31, 2020
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Past Due 90+ Days Still Accruing (2)		Non - performing		Total Past Due Loans		Total Loans
Commercial real estate	$	2,690,877	$	—	$	—	$	—	$	101,070	$	101,070	$	2,791,947
Commercial and industrial	1,542,567		—		—		—		16,985		16,985		1,559,552
Commercial construction	462,094		19		3,580		—		384		3,983		466,077
Business banking	1,140,581		1,614		379		371		17,122		19,486		1,160,067
Consumer real estate	1,153,028		1,087		1,968		132		11,117		14,304		1,167,332
Other consumer	80,583		168		37		—		96		302		80,885
Total(1)	$	7,069,730	$	2,888	$	5,965	$	503	$	146,774	$	156,130	$	7,225,860
(1) We had 52 loans that were modified totaling $195.6 million under the CARES Act at December 31, 2020. These customers were not considered past due as a result of their delayed payments. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it left off upon entry into the program. Due to the modification program, this delinquency table may not accurately reflect the credit risk associated with these loans. (2) Represents acquired loans that were recorded at fair value at the acquisition date and remain performing at December 31, 2020.

The following table presents loans on nonaccrual status by class of loan:


								June 30, 2021
	June 30, 2021						For the three and six months ended
(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance			Interest Income Recognized on Nonaccrual(1)		Interest Income Recognized on Nonaccrual(1)
Commercial real estate	$	101,070	$	80,067	$	47,648		$	5	$	66
Commercial and industrial	16,985		12,198		11,183			72		115
Commercial construction	384		385		—			—		—
Business banking	17,122		11,064		1,508			139		275
Consumer real estate	11,117		8,783		—			210		319
Other consumer	96		121		—			—		1
Total	$	146,774	$	112,619	$	60,340		$	426	$	776

(1) Represents only cash payments received and applied to interest on nonaccrual loans.


									December 31, 2020
	December 31, 2020								For the twelve months ended
(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance		Past Due 90+ Days Still Accruing		Interest Income Recognized on Nonaccrual(1)
Commercial real estate	$	25,356	$	101,070	$	60,401	$	—	$	22
Commercial and industrial	10,911		16,985		6,436		—		101
Commercial construction	737		384		285		—		—
Business banking	9,863		17,122		3,890		371		275
Consumer real estate	6,063		11,117		398		132		423
Other consumer	1,127		96		—		—		4
Total	$	54,057	$	146,774	$	71,410	$	503	$	826

(1) Represents only cash payments received and applied to interest on nonaccrual loans.

The following tables present collateral-dependent loans by class of loan as of the dates presented:


	June 30, 2021
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets		Investment/Cash		Other
Commercial real estate	$	76,437	$	—	$	—	$	—
Commercial and industrial	302		14,461		—		—
Commercial construction	3,222		—		—		—
Business banking	1,806		1,141		—		—
Consumer real estate	—		—		—		—

Total	$	81,767	$	15,602	$	—	$	—


	December 31, 2020
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets		Investment/Cash		Other
Commercial real estate	$	100,450	$	—	$	—	$	—
Commercial and industrial	1,040		15,080		—		—
Commercial construction	3,552		—		—		—
Business banking	3,085		1,619		—		689
Consumer real estate	398		—		—		—

Total	$	108,525	$	16,699	$	—	$	689

The following tables present activity in the ACL for the periods presented:


	Three Months Ended June 30, 2021
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	66,842	$	14,663	$	6,329	$	15,680	$	8,981	$	2,606	$	115,101
Provision for credit losses on loans(1)	2,937		225		(426)		(560)		(410)		243		2,008
Charge-offs	(7,558)		(473)		—		(410)		(76)		(221)		(8,737)
Recoveries	965		11		2		47		152		88		1,264
Net (Charge-offs)/Recoveries	(6,594)		(462)		2		(363)		76		(132)		(7,473)
Balance at End of Period	$	63,186	$	14,426	$	5,905	$	14,756	$	8,647	$	2,717	$	109,636
(1) Excludes unfunded commitments


	Three Months Ended June 30, 2020
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	42,611	$	19,870	$	6,606	$	13,706	$	11,200	$	2,857	$	96,850
Impact of CECL adoption	—		—		—		—		—		—		—
Provision for credit losses on loans(1)	20,681		60,906		2,249		918		400		677		85,831
Charge-offs	(5,600)		(61,616)		—		(260)		(37)		(790)		(68,303)
Recoveries	38		4		19		40		22		108		231
Net (Charge-offs)/Recoveries	(5,562)		(61,612)		19		(220)		(15)		(682)		(68,072)
Balance at End of Period	$	57,730	$	19,164	$	8,874	$	14,404	$	11,585	$	2,852	$	114,609

(1) Excludes unfunded commitments


	Six Months Ended June 30, 2021
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	65,656	$	16,100	$	7,239	$	15,917	$	10,014	$	2,686	$	117,612
Provision for credit losses on loans(1)	4,933		2,953		(1,337)		(46)		(1,254)		61		5,308
Charge-offs	$	(8,369)	$	(4,774)	$	—	$	(1,327)	$	(347)	$	(453)	$	(15,270)
Recoveries	965		148		3		213		234		423		1,985
Net (Charge-offs)/Recoveries	(7,403)		(4,627)		3		(1,115)		(113)		(30)		(13,285)
Balance at End of Period	$	63,186	$	14,426	$	5,905	$	14,756	$	8,647	$	2,717	$	109,636
(1) Excludes unfunded commitments


	Six Months Ended June 30, 2020
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	30,577	$	15,681	$	7,900	$	—	$	6,337	$	1,729	$	62,224
Impact of CECL adoption	4,810		7,853		(3,376)		12,898		4,525		642		27,352
Provision for credit losses on loans(1)	28,345		67,104		4,329		2,126		829		1,529		104,262
Charge-offs	(6,042)		(71,496)		—		(721)		(218)		(1,272)		(79,749)
Recoveries	40		22		21		101		112		224		520
Net (Charge-offs)/Recoveries	(6,002)		(71,474)		21		(620)		(106)		(1,048)		(79,229)
Balance at End of Period	$	57,730	$	19,164	$	8,874	$	14,404	$	11,585	$	2,852	$	114,609
(1) Excludes unfunded commitments

The adoption of ASU 2016-13 resulted in an increase to our ACL of $27.4 million on January 1, 2020. The increase included $8.2 million for S&T legacy loans and $9.3 million for acquired loans from the DNB merger. We also recorded a day one adjustment of $9.9 million primarily related to a C&I relationship that was charged off in the first quarter of 2020. We obtained information on the relationship subsequent to filing our December 31, 2019 Form 10-K, but before the end of the first quarter of 2020. The updated information supported a loss existed at January 1, 2020.

The provision for credit losses, which includes a provision for losses on loans and on unfunded commitments, is a charge to earnings to maintain the ACL at a level consistent with management's assessment of expected losses in the loan portfolio at the balance sheet date. The provision for credit losses decreased $84.2 million and $101.1 million to $2.6 million and $5.7 million for the three and six months ended June 30, 2021 compared to $86.8 million and $106.8 million for the same periods in 2020. The provision for credit losses includes $0.6 million and $0.4 million for the reserve for unfunded commitments for the three and six months ended June 30, 2021.

During the three months ended June 30, 2020, we recognized a charge-off of $58.7 million related to a customer fraud from a check kiting scheme. We continue to pursue all available resources of recovery to mitigate the loss. The customer also had a lending relationship of $15.1 million that had a $4.2 million charge-off during the three months ended June 30, 2020. We received a recovery of $0.9 million on the lending relationship during the three months ended June 30, 2021.

The significant decrease in the provision for credit losses during the three and six months ended June 30, 2021 was mainly due to the above mentioned customer fraud and an improved economic forecast in 2021 compared to 2020. Our economic forecast covers a period of two years and is driven primarily by national unemployment data. The forecasted national unemployment rate improved at June 30, 2021 compared to the same periods in 2020.