LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

12 Months Ended

Dec. 31, 2022

The following table summarizes the change in allowance for credit losses by loan category, and bifurcates the amount of loans allocated to each loan category for the periods indicated:


	Years Ended December 31, 2022
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	14,402	$	83,486	$	12,316	$	3,508	$	14,484	$	17,986	$	740	$	146,922


Charge-offs	—		(62)		—		(196)		—		(122)		(2,272)		(2,652)
Recoveries	49		333		—		149		—		121		997		1,649

Provision for credit loss expense	13,108		(5,958)		(1,554)		(627)		6,489		(6,481)		1,523		6,500
Ending balance (1)	$	27,559	$	77,799	$	10,762	$	2,834	$	20,973	$	11,504	$	988	$	152,419

	Years Ended December 31, 2021
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	21,086	$	45,009	$	5,397	$	5,095	$	14,275	$	22,060	$	470	$	113,392


Charge-offs	(3,474)		—		—		(219)		—		(69)		(1,182)		(4,944)
Recoveries	2,686		57		—		98		1		249		638		3,729
Initial reserve on PCD loans	166		14,397		1,019		—		429		163		366		16,540
Provision for credit loss expense	(6,062)		24,023		5,900		(1,466)		(221)		(4,417)		448		18,205
Ending balance (1)	$	14,402	$	83,486	$	12,316	$	3,508	$	14,484	$	17,986	$	740	$	146,922


	Year Ended December 31, 2020
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance, pre adoption of ASU 2016-13	$	17,594	$	32,935	$	6,053	$	1,746	$	3,440	$	5,576	$	396	$	67,740
Cumulative effect accounting adjustment (2)	(1,984)		(13,048)		(3,652)		495		9,828		7,012		212		(1,137)
Cumulative effect accounting adjustment (3)	49		337		—		—		423		319		29		1,157
Charge-offs	(2,309)		(3,885)		—		(380)		(105)		(142)		(1,625)		(8,446)
Recoveries	289		9		—		33		2		210		1,035		1,578
Provision (benefit)	7,447		28,661		2,996		3,201		687		9,085		423		52,500
Ending balance (1)	$	21,086	$	45,009	$	5,397	$	5,095	$	14,275	$	22,060	$	470	$	113,392

(1)Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $50.8 million, $43.7 million, and $36.0 million at December 31, 2022, 2021, and 2020, respectively.

(2)Represents adjustment needed to reflect the cumulative day one impact pursuant to the Company's adoption of Accounting Standards Update 2016-13 on January 1, 2020. The adjustment represents a $1.1 million decrease to the allowance attributable to the change in accounting methodology for estimating the allowance for credit losses resulting from the Company's adoption of the standard.

(3)Represents adjustment needed to reflect the day one reclassification of the Company's purchased credit impaired ("PCI") loan balances to PCD and the associated gross-up, pursuant to the Company's adoption of Accounting Standards Update 2016-13. The adjustment represents a $1.2 million increase to the allowance resulting from the day one reclassification.

Schedule of Internal Risk-Rating Categories for the Company's Commercial Portfolio

The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of the dates indicated below:


	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass (2)	$	350,036	$	137,832	$	113,020	$	59,936	$	79,391	$	18,197	$	815,128	$	3,165	$	1,576,705
Potential weakness	4,836		925		1,023		1,744		467		623		17,122		—		26,740
Definite weakness - loss unlikely	2,389		1,681		180		618		—		—		3,623		—		8,491
Partial loss probable	—		—		—		—		—		—		23,167		—		23,167
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	357,261	$	140,438	$	114,223	$	62,298	$	79,858	$	18,820	$	859,040	$	3,165	$	1,635,103


Commercial real estate
Pass	$	1,277,333	$	1,487,333	$	1,213,984	$	723,794	$	696,166	$	1,833,099	$	44,477	$	669	$	7,276,855
Potential weakness	42,005		65,603		39,740		14,167		58,190		183,468		—		—		403,173
Definite weakness - loss unlikely	42,629		3,843		4,774		4,066		3,553		21,162		—		—		80,027
Partial loss probable	—		—		—		—		—		175		—		—		175
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	1,361,967	$	1,556,779	$	1,258,498	$	742,027	$	757,909	$	2,037,904	$	44,477	$	669	$	7,760,230


Commercial construction
Pass	$	504,932	$	327,194	$	169,838	$	56,693	$	3,135	$	1,588	$	23,122	$	951	$	1,087,453
Potential weakness	33,000		1,775		3,347		—		—		—		—		—		38,122
Definite weakness - loss unlikely	18,980		9,858		—		—		—		—		—		—		28,838
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	556,912	$	338,827	$	173,185	$	56,693	$	3,135	$	1,588	$	23,122	$	951	$	1,154,413


Small business
Pass	$	54,876	$	44,811	$	31,051	$	16,588	$	9,882	$	18,891	$	39,434	$	—	$	215,533
Potential weakness	—		152		373		366		191		117		686		—		1,885
Definite weakness - loss unlikely	139		98		417		—		—		401		629		—		1,684
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total small business	$	55,015	$	45,061	$	31,841	$	16,954	$	10,073	$	19,409	$	40,749	$	—	$	219,102


Residential real estate
Pass	$	665,407	$	419,665	$	193,886	$	94,065	$	94,425	$	565,246	$	—	$	—	$	2,032,694
Default	—		—		729		158		—		1,943		—		—		2,830

Total residential real estate	$	665,407	$	419,665	$	194,615	$	94,223	$	94,425	$	567,189	$	—	$	—	$	2,035,524


Home equity
Pass	$	43,917	$	60,103	$	54,802	$	32,014	$	26,414	$	118,367	$	748,294	$	3,874	$	1,087,785
Default	—		—		—		122		—		83		760		—		965


Total home equity	$	43,917	$	60,103	$	54,802	$	32,136	$	26,414	$	118,450	$	749,054	$	3,874	$	1,088,750


Other consumer
Pass	$	677	$	2,013	$	1,619	$	1,022	$	231	$	3,023	$	26,939	$	—	$	35,524
Default	—		—		—		18		—		11		—		—		29

Total other consumer	$	677	$	2,013	$	1,619	$	1,040	$	231	$	3,034	$	26,939	$	—	$	35,553


Total	$	3,041,156	$	2,562,886	$	1,828,783	$	1,005,371	$	972,045	$	2,766,394	$	1,743,381	$	8,659	$	13,928,675


	December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass (2)	$	478,141	$	167,421	$	92,657	$	74,940	$	12,432	$	27,000	$	681,155	$	250	$	1,533,996
Potential weakness	779		6,874		1,627		109		908		287		5,401		—		15,985
Definite weakness - loss unlikely	766		317		962		515		2,570		258		7,910		—		13,298
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	479,686	$	174,612	$	95,246	$	75,564	$	15,910	$	27,545	$	694,466	$	250	$	1,563,279

Commercial real estate
Pass	$	1,445,829	$	1,232,824	$	875,001	$	950,540	$	820,201	$	1,913,217	$	154,020	$	—	$	7,391,632
Potential weakness	51,024		86,781		53,250		69,137		53,455		185,847		13,617		—		513,111
Definite weakness - loss unlikely	20,078		4,106		3,380		1,663		35,727		22,647		—		—		87,601
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	1,516,931	$	1,323,711	$	931,631	$	1,021,340	$	909,383	$	2,121,711	$	167,637	$	—	$	7,992,344

Commercial construction
Pass	$	374,023	$	451,987	$	141,127	$	62,752	$	19,168	$	48,175	$	36,368	$	2,289	$	1,135,889
Potential weakness	9,646		2,550		—		—		—		12,811		—		—		25,007
Definite weakness - loss unlikely	4,561		—		—		—		—		—		—		—		4,561
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	388,230	$	454,537	$	141,127	$	62,752	$	19,168	$	60,986	$	36,368	$	2,289	$	1,165,457

Small business
Pass	$	53,939	$	37,017	$	20,840	$	13,459	$	9,665	$	18,603	$	35,875	$	—	$	189,398
Potential weakness	210		456		379		198		4		285		803		—		2,335
Definite weakness - loss unlikely	—		619		32		9		4		278		514		—		1,456
Partial loss probable	—		—		—		—		—		—		—		—		—
Definite loss	—		—		—		—		—		—		—		—		—
Total small business	$	54,149	$	38,092	$	21,251	$	13,666	$	9,673	$	19,166	$	37,192	$	—	$	193,189

Residential real estate
Pass	$	454,162	$	215,142	$	114,762	$	122,745	$	133,961	$	559,701	$	—	$	—	$	1,600,473
Default	—		392		—		1,010		—		2,811		—		—		4,213

Total residential real estate	$	454,162	$	215,534	$	114,762	$	123,755	$	133,961	$	562,512	$	—	$	—	$	1,604,686


Home equity
Pass	$	66,410	$	63,870	$	38,201	$	33,505	$	38,051	$	109,544	$	684,427	$	3,932	$	1,037,940
Default	—		—		—		—		—		—		1,555		116		1,671

Total home equity	$	66,410	$	63,870	$	38,201	$	33,505	$	38,051	$	109,544	$	685,982	$	4,048	$	1,039,611

Other consumer
Pass	$	3,363	$	2,702	$	2,191	$	859	$	654	$	4,462	$	14,377	$	—	$	28,608
Default	16		6		29		25		—		35		1		—		112

Total other consumer	$	3,379	$	2,708	$	2,220	$	884	$	654	$	4,497	$	14,378	$	—	$	28,720
Total	$	2,962,947	$	2,273,064	$	1,344,438	$	1,331,466	$	1,126,800	$	2,905,961	$	1,636,023	$	6,587	$	13,587,286

(1)Loans origination dates in the tables above reflect the original date, or the date of a material modification of a previously originated loan, for both organic originations and acquired loans.

(2)Loans originated as part of the Paycheck Protection Program ("PPP") established by the Coronavirus, Aid, Relief and Economic Security Act ("CARES Act") are reported as commercial and industrial under the 2021 and 2020 vintage years and "Pass" category as these loans are 100% guaranteed by the U.S. Government. Outstanding PPP loans totaled $9.1 million and $216.2 million at December 31, 2022 and 2021, respectively.

Financing Receivable Credit Quality Indicators for Consumer and Residential Portfolio's

The following table shows the weighted average FICO scores and the weighted average combined LTV ratios at the dates indicated below:


	December 31 2022		December 31 2021
Residential portfolio
FICO score (re-scored)(1)	753		749
LTV (re-valued)(2)	57.0	%	54.4	%
Home equity portfolio
FICO score (re-scored)(1)	771		772
LTV (re-valued)(2)(3)	41.3	%	42.4	%

(1)The average FICO scores at December 31, 2022 are based upon rescores from December 2022, as available for previously originated loans, or origination score data for loans booked in December 2022. The average FICO scores at December 31, 2021 were based upon rescores from December 2021, as available for previously originated loans, or origination score data for loans booked in December 2021.

(2)The combined LTV ratios for December 31, 2022 are based upon updated automated valuations as of November 2022, when available, and/or the most current valuation data available. The combined LTV ratios for December 31, 2021 were based upon updated automated valuations as of November 2021, when available, and/or the most current valuation data available as of such date. The updated automated valuations provide new information on loans that may be available since the previous valuation was obtained. If no new information is available, the valuation will default to the previously obtained data or most recent appraisal.

(3)For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.

Financing Receivable, Nonaccrual

The following table shows information regarding nonaccrual loans at the dates indicated:


	Nonaccrual Balances
	December 31, 2022						December 31, 2021
	With Allowance for Credit Losses		Without Allowance for Credit Losses		Total (1)		With Allowance for Credit Losses		Without Allowance for Credit Losses		Total (1)
	(Dollars in thousands)
Commercial and industrial	$	26,395	$	298	$	26,693	$	3,420	$	19	$	3,439
Commercial real estate	12,961		2,769		15,730		10,870		—		10,870

Small business	99		5		104		44		—		44
Residential real estate	8,479		—		8,479		8,580		602		9,182
Home equity	3,400		—		3,400		3,781		—		3,781
Other consumer	475		—		475		504		—		504
Total nonaccrual loans	$	51,809	$	3,072	$	54,881	$	27,199	$	621	$	27,820

(1)Included in these amounts are $11.5 million and $2.0 million of nonaccruing TDRs at December 31, 2022 and December 31, 2021, respectively

Foreclosed Residential Real Estate Property

The following table shows information regarding foreclosed residential real estate property at the dates indicated:


	December 31, 2022		December 31, 2021
	(Dollars in thousands)
Foreclosed residential real estate property held by the creditor	$	—	$	—
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure	$	1,615	$	1,426

Schedule of the Age Analysis of Past Due Financing Receivables

The following tables show the age analysis of past due financing receivables at the dates indicated:


	December 31, 2022
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables (2)
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	3	$	49	1	$	175	3	$	23,726	7	$	23,950	$	1,611,153	$	1,635,103
Commercial real estate	7	2,052		5	4,971		3	2,977		15	10,000		7,750,230		7,760,230
Commercial construction	—	—		—	—		—	—		—	—		1,154,413		1,154,413
Small business	12	111		3	25		3	5		18	141		218,961		219,102
Residential real estate	8	1,654		8	1,105		16	1,725		32	4,484		2,031,040		2,035,524
Home equity	19	1,647		3	201		17	965		39	2,813		1,085,937		1,088,750
Other consumer (1)	432	421		15	83		4	28		451	532		35,021		35,553
Total	481	$	5,934	35	$	6,560	46	$	29,426	562	$	41,920	$	13,886,755	$	13,928,675


	December 31, 2021
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables (2)
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	7	$	143	2	$	252	2	$	24	11	$	419	$	1,562,860	$	1,563,279
Commercial real estate	15	32,845		—	—		4	1,339		19	34,184		7,958,160		7,992,344
Commercial construction	—	—		—	—		—	—		—	—		1,165,457		1,165,457
Small business	11	136		6	53		4	24		21	213		192,976		193,189
Residential real estate	12	2,709		5	714		76	3,922		93	7,345		1,597,341		1,604,686
Home equity	15	1,375		6	381		21	1,671		42	3,427		1,036,184		1,039,611
Other consumer (1)	458	719		41	277		16	112		515	1,108		27,612		28,720
Total	518	$	37,927	60	$	1,677	123	$	7,092	701	$	46,696	$	13,540,590	$	13,587,286

(1)Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

(2)The amount of net deferred costs on originated loans included in the ending balance was $5.0 million at December 31, 2022 compared to net deferred fees of $159,000 at December 31, 2021. Net unamortized discounts on acquired loans included in the ending balance was $10.4 million at both December 31, 2022 and 2021.

Schedule of Troubled Debt Restructuring and Other Pertinent Information

The following table shows the Company’s total TDRs and other pertinent information at the dates indicated:


		December 31, 2022		December 31, 2021
	(Dollars in thousands)
TDRs on accrual status		$	11,278	$	14,635
TDRs on nonaccrual		11,520		1,993
Total TDRs		$	22,798	$	16,628

Additional commitments to lend to a borrower who has been a party to a TDR		$	64	$	190

Schedule of Post-Modification Balance of Troubled Debt Restructuring by Type of Modification

The following table shows the troubled debt restructurings which occurred for the periods indicated and the change in the recorded investment subsequent to the modifications occurring:


	Year Ended
	December 31, 2022
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings		(Dollars in thousands)
Commercial and industrial	4	$	3,466	$	3,465
Commercial real estate	1	7,850		7,850
Small business	—	—		—



Total	5	$	11,316	$	11,315


	Year Ended
	December 31, 2021
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings		(Dollars in thousands)
Commercial and industrial	1	$	14,148	$	14,148
Commercial real estate	5	3,964		3,964
Small business	2	189		189



Total (1)	8	$	18,301	$	18,301


	Year Ended
	December 31, 2020
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled debt restructurings		(Dollars in thousands)
Commercial and industrial	8	$	732	$	732
Commercial real estate	10	2,865		2,865
Small business	10	752		728
Residential real estate	2	559		642


Total (1)	30	$	4,908	$	4,967

(1)The pre-modification and post-modification balances represent the legal principal balance of the loan. Activity presented in the tables above includes $14.3 million, and $1.9 million of modifications on existing TDRs during the years ended December 31, 2021 and 2020, respectively.

Troubled Debt Restructurings On Financing Receivables Post Modification

The following table shows the Company’s post-modification balance of TDRs listed by type of modification for the periods indicated:


	Years Ended
	December 31
	2022		2021		2020

Extended maturity	$	11,315	$	4,153	$	4,120
Adjusted interest rate	—		—		822
Combination rate and maturity	—		14,148		—
Court ordered concession	—		—		25
Total	$	11,315	$	18,301	$	4,967