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Loans, Allowance for Loan Losses and Credit Quality
 9 Months Ended
Sep. 30, 2020
Loans, Allowance for Loan Losses and Credit Quality [Abstract]  
LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY LOANS AND ALLOWANCE FOR LOAN LOSSES
As disclosed in Note 2 - "Recent Accounting Standards Updates" and Note 4 - "Loans, Allowance for Credit Losses and Credit Quality," the Company adopted the CECL standard, effective January 1, 2020. As required by disclosure guidance, the Company has included relevant disclosures from the prior year and prior to the adoption of CECL within this footnote, as it relates to loans and allowance for loan losses.
The following table bifurcates the amount of loans and the allowance allocated to each loan category based on the type of impairment analysis as of December 31, 2019:
 December 31, 2019 
Commercial
and
Industrial		Commercial
Real Estate		Commercial
Construction		Small
Business		Residential
Real
Estate		Home
Equity		Other ConsumerTotal 
(Dollars in thousands)
Financing receivables ending balance:
Collectively evaluated for impairment$1,370,580 $3,987,848 $547,293 $173,960 $1,571,848 $1,127,963 $29,663 $8,809,155 
Individually evaluated for impairment24,456 8,337 — 537 11,228 4,948 122 49,628   
Purchased credit impaired loans— 6,174 — — 7,493 887 302 14,856 
Total loans by group$1,395,036 $4,002,359 $547,293 $174,497 $1,590,569 $1,133,798 $30,087 $8,873,639 (1)
(1)The amount of net deferred costs on originated loans included in the ending balance was $7.1 million at December 31, 2019. Net unamortized discounts on acquired loans not deemed to be purchased credit impaired ("PCI") included in the ending balance was $21.6 million at December 31, 2019.
    At December 31, 2019, the reserve for unfunded loan commitments was $2.1 million.
    The following table summarizes changes in allowance for loan losses by loan category for the periods indicated:
Three Months Ended September 30, 2019
(Dollars in thousands)
Commercial and
Industrial		Commercial
Real Estate		Commercial
Construction		Small
Business		Residential
Real Estate
Home Equity		Other ConsumerTotal
Allowance for loan losses
Beginning balance$16,857 $32,660 $5,593 $1,768 $3,296 $5,547 $239 $65,960 
Charge-offs— (82)— (125)— (28)(472)(707)
Recoveries1,003 106 — 61 140 194 185 1,689 
Provision (benefit)(528)(33)240 48 (88)36 325 — 
Ending balance$17,332 $32,651 $5,833 $1,752 $3,348 $5,749 $277 $66,942 
Nine Months Ended September 30, 2019
(Dollars in thousands)
Commercial and
Industrial		Commercial
Real Estate		Commercial
Construction		Small
Business		Residential
Real Estate
Home Equity		Other ConsumerTotal
Allowance for loan losses
Beginning balance$15,760 $32,370 $5,158 $1,756 $3,219 $5,608 $422 $64,293 
Charge-offs— (82)— (319)— (212)(1,125)(1,738)
Recoveries1,127 152 — 108 141 278 581 2,387 
Provision (benefit)445 211 675 207 (12)75 399 2,000 
Ending balance$17,332 $32,651 $5,833 $1,752 $3,348 $5,749 $277 $66,942 
Ending balance: collectively evaluated for impairment$17,326 $32,610 $5,833 $1,741 $2,729 $5,594 $272 $66,105 
Ending balance: individually evaluated for impairment$6 $41 $— $11 $619 $155 $5 $837 
The Company's historical approach to loan portfolio segmentation by risk characteristics and monitoring of credit quality for commercial loans under previous accounting guidance was consistent with that applied under the newly adopted CECL standard. See Note 4 - "Loans, Allowance for Credit Losses and Credit Quality" further discussion surrounding the Company's policies for loan segmentation and credit quality monitoring.
The following tables detail the amount of outstanding principal balances relative to each of the risk-rating categories for the Company’s loan portfolio as of December 31, 2019:
  December 31, 2019
CategoryRisk
Rating		Commercial  and
Industrial		Commercial
Real Estate		Commercial
Construction		Small BusinessTotal
  (Dollars in thousands)
Pass1 - 6$1,274,155 $3,860,555 $542,608 $171,213 $5,848,531 
Potential weakness763,485 97,268 2,247 1,416 164,416 
Definite weakness-loss unlikely857,396 44,536 2,438 1,868 106,238 
Partial loss probable9— — — — — 
Definite loss10— — — — — 
Total$1,395,036 $4,002,359 $547,293 $174,497 $6,119,185 
Impaired Loans
    Under previous accounting guidance, a loan was considered impaired when, based on current information and events, it was probable that the Company would be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment included payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experienced insignificant payment delays and payment shortfalls generally were not classified as impaired. Management determined the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.
The table below sets forth information regarding the Company’s impaired loans by loan portfolio at the date indicated:
 December 31, 2019
 Recorded
Investment		Unpaid
Principal
Balance		Related
Allowance
 (Dollars in thousands)
With no related allowance recorded
Commercial and industrial$23,786 $34,970 $— 
Commercial real estate6,213 12,101 — 
Small business469 484 — 
Residential real estate4,976 5,123 — 
Home equity3,764 3,893 — 
Other consumer34 34 — 
Subtotal39,242 56,605 — 
With an allowance recorded
Commercial and industrial$670 $670 $126 
Commercial real estate2,124 2,124 48 
Small business68 105 8 
Residential real estate6,252 7,163 637 
Home equity1,184 1,382 156 
Other consumer88 91 5 
Subtotal10,386 11,535 980 
Total$49,628 $68,140 $980 
The following table sets forth information regarding interest income recognized on impaired loans, by portfolio, for the periods indicated:
 Three Months EndedNine Months Ended
September 30, 2019September 30, 2019
 Average
Recorded
Investment		Interest
Income
Recognized		Average
Recorded
Investment		Interest
Income
Recognized
 (Dollars in thousands)
With no related allowance recorded
Commercial and industrial$25,694 $35 $27,937 $108 
Commercial real estate12,987 149 13,261 478 
Small business235 3 266 10 
Residential real estate5,031 57 5,061 175 
Home equity4,417 50 4,479 151 
Other consumer39 1 43 2 
Subtotal48,403 295 51,047 924 
With an allowance recorded
Commercial and industrial$353 $4 $360 $13 
Commercial real estate1,402 20 1,415 60 
Small business92 — 95 2 
Residential real estate6,047 61 6,115 179 
Home equity959 11 972 33 
Other consumer107 1 116 3 
Subtotal8,960 97 9,073 290 
Total$57,363 $392 $60,120 $1,214 

Purchased Credit Impaired Loans

    Under previous accounting guidance, certain loans acquired by the Company may have shown evidence of deterioration of credit quality since origination at purchase date, and it was therefore deemed unlikely that the Company would be able to collect all contractually required payments. As such, these loans were deemed to be PCI loans and the carrying value and prospective income recognition were predicated upon future cash flows expected to be collected. The following table displays certain information pertaining to PCI loans at the date indicated:
December 31, 2019
(Dollars in thousands)
Outstanding balance$18,358 
Carrying amount$14,856 
    
The following table summarizes activity in the accretable yield for the PCI loan portfolio for the periods indicated:
Three Months Ended September 30Nine Months Ended September 30
20192019
(Dollars in thousands)
Beginning balance$2,238 $1,191 
Acquisition— 1,464 
Accretion(412)(1,215)
Other change in expected cash flows (1)237 623 
Reclassification from nonaccretable difference for loans which have paid off227 227 
Ending balance$2,290 $2,290 
(1) Represents changes in cash flows expected to be collected and resulting in increased interest income as a prospective yield adjustment over the remaining life of the loan(s).