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Loans

6 Months Ended

Jun. 30, 2021

The period end loan composition was as follows:


($ in Thousands)	June 30, 2021		December 31, 2020
PPP	$	405,482	$	767,757
Commercial and industrial	7,909,119		7,701,422
Commercial real estate — owner occupied	880,755		900,912
Commercial and business lending	9,195,355		9,370,091
Commercial real estate — investor	4,300,651		4,342,584
Real estate construction	1,880,897		1,840,417
Commercial real estate lending	6,181,549		6,183,001
Total commercial	15,376,904		15,553,091
Residential mortgage	7,638,372		7,878,324
Home equity	631,783		707,255
Other consumer	300,477		313,054
Total consumer	8,570,632		8,898,632
Total loans	$	23,947,536	$	24,451,724

Accrued interest receivable on loans totaled $59 million at June 30, 2021, and $66 million at December 31, 2020, and is included in interest receivable on the consolidated balance sheets. Interest accrued but not received for loans placed on nonaccrual is reversed against interest income. The amount of accrued interest reversed totaled approximately $140,000 and $238,000 for the three and six months ended June 30, 2021, respectively, and approximately $1 million for both the three and six months ended June 30, 2020.

The following table presents commercial and consumer loans by credit quality indicator by vintage year at June 30, 2021:


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2021		2020		2019		2018		2017		Prior		Total
PPP:(b)
Risk rating:
Pass	$	—	$	—	$	282,722	$	113,640	$	—	$	—	$	—	$	—	$	396,362
Special Mention	—		—		212		212		—		—		—		—		424
Potential Problem	—		—		7,958		737		—		—		—		—		8,695

PPP	$	—	$	—	$	290,892	$	114,589	$	—	$	—	$	—	$	—	$	405,482
Commercial and industrial:
Risk rating:
Pass	$	2,084	$	2,381,324	$	1,116,185	$	1,135,991	$	1,179,056	$	946,719	$	290,980	$	651,006	$	7,701,262
Special Mention	—		445		13,162		13,582		56,423		28,681		109		10		112,412
Potential Problem	3,011		28,181		4,007		7,754		19,395		14,985		1,075		1,668		77,064
Nonaccrual	32		—		—		231		725		16,205		138		1,081		18,380
Commercial and industrial	$	5,126	$	2,409,950	$	1,133,354	$	1,157,558	$	1,255,599	$	1,006,590	$	292,303	$	653,765	$	7,909,119
Commercial real estate - owner occupied:
Risk rating:
Pass	$	11,768	$	25,900	$	106,833	$	179,316	$	201,438	$	124,160	$	67,086	$	154,611	$	859,345
Special Mention	—		—		—		3,223		—		—		97		255		3,575
Potential Problem	—		580		366		6,274		797		769		2,999		6,044		17,828
Nonaccrual	—		—		—		—		—		—		—		7		7
Commercial real estate - owner occupied	$	11,768	$	26,480	$	107,198	$	188,813	$	202,235	$	124,929	$	70,182	$	160,918	$	880,755
Commercial and business lending:
Risk rating:
Pass	$	13,852	$	2,407,225	$	1,505,741	$	1,428,948	$	1,380,495	$	1,070,879	$	358,066	$	805,617	$	8,956,970
Special Mention	—		445		13,374		17,017		56,423		28,681		206		265		116,411
Potential Problem	3,011		28,761		12,330		14,765		20,191		15,754		4,074		7,712		103,587
Nonaccrual	32		—		—		231		725		16,205		138		1,089		18,387
Commercial and business lending	$	16,894	$	2,436,431	$	1,531,444	$	1,460,960	$	1,457,834	$	1,131,519	$	362,484	$	814,683	$	9,195,355
Commercial real estate - investor:
Risk rating:
Pass	$	32,109	$	108,396	$	659,581	$	1,001,096	$	1,027,913	$	581,600	$	193,334	$	362,007	$	3,933,926
Special Mention	—		—		30,901		65,075		84,483		29,100		10,418		12,132		232,109
Potential Problem	799		—		6,738		25,879		4,917		15,417		4,519		14,144		71,613
Nonaccrual	—		—		12,504		21,138		9,763		19,372		—		227		63,003
Commercial real estate - investor	$	32,908	$	108,396	$	709,724	$	1,113,188	$	1,127,075	$	645,489	$	208,270	$	388,511	$	4,300,651
Real estate construction:
Risk rating:
Pass	$	5,734	$	31,184	$	338,231	$	771,306	$	512,719	$	151,219	$	21,386	$	14,671	$	1,840,716
Special Mention	—		—		—		—		7,542		15,885		42		2		23,470
Potential Problem	—		—		11		128		16,237		—		—		89		16,465
Nonaccrual	—		—		—		—		—		—		—		247		247
Real estate construction	$	5,734	$	31,184	$	338,242	$	771,433	$	536,497	$	167,104	$	21,427	$	15,009	$	1,880,897
Commercial real estate lending:
Risk rating:
Pass	$	37,843	$	139,580	$	997,812	$	1,772,402	$	1,540,632	$	732,819	$	214,719	$	376,679	$	5,774,642
Special Mention	—		—		30,901		65,075		92,025		44,985		10,459		12,134		255,579
Potential Problem	799		—		6,749		26,007		21,153		15,417		4,519		14,233		88,078
Nonaccrual	—		—		12,504		21,138		9,763		19,372		—		474		63,250
Commercial real estate lending	$	38,642	$	139,580	$	1,047,966	$	1,884,621	$	1,663,572	$	812,593	$	229,697	$	403,520	$	6,181,549


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		YTD 2021		2020		2019		2018		2017		Prior		Total
Total commercial:
Risk rating:
Pass	$	51,695	$	2,546,805	$	2,503,553	$	3,201,349	$	2,921,126	$	1,803,698	$	572,785	$	1,182,296	$	14,731,612
Special Mention	—		445		44,274		82,092		148,447		73,666		10,666		12,399		371,990
Potential Problem	3,810		28,761		19,079		40,772		41,345		31,171		8,593		21,945		191,665
Nonaccrual	32		—		12,504		21,368		10,488		35,577		138		1,563		81,637
Total commercial	$	55,536	$	2,576,011	$	2,579,410	$	3,345,581	$	3,121,406	$	1,944,111	$	592,182	$	1,218,202	$	15,376,904
Residential mortgage:
Risk rating:
Pass	$	—	$	—	$	958,932	$	2,127,161	$	1,164,371	$	498,556	$	791,985	$	2,036,364	$	7,577,370
Special Mention	—		—		299		—		—		420		—		464		1,183
Potential Problem	—		—		319		378		561		731		124		911		3,024
Nonaccrual	—		—		245		1,907		3,328		5,582		6,715		39,018		56,795
Residential mortgage	$	—	$	—	$	959,795	$	2,129,446	$	1,168,260	$	505,289	$	798,824	$	2,076,757	$	7,638,372
Home equity:
Risk rating:
Pass	$	3,403	$	517,872	$	191	$	1,852	$	9,887	$	11,545	$	9,371	$	70,719	$	621,438
Special Mention	12		25		—		—		31		14		—		200		270
Potential Problem	1,162		233		10		—		1,152		18		—		146		1,558
Nonaccrual	320		59		10		377		163		350		349		7,209		8,517
Home equity	$	4,896	$	518,189	$	211	$	2,229	$	11,233	$	11,927	$	9,720	$	78,275	$	631,783
Other consumer:
Risk rating:
Pass	$	487	$	159,450	$	5,542	$	8,478	$	8,354	$	2,777	$	1,182	$	114,125	$	299,908
Special Mention	1		369		—		—		13		—		—		1		383

Nonaccrual	4		62		—		15		49		16		19		25		186
Other consumer	$	491	$	159,881	$	5,542	$	8,493	$	8,416	$	2,793	$	1,201	$	114,151	$	300,477
Total consumer:
Risk rating:
Pass	$	3,890	$	677,322	$	964,665	$	2,137,491	$	1,182,613	$	512,878	$	802,538	$	2,221,208	$	8,498,715
Special Mention	12		394		299		—		44		434		—		666		1,836
Potential Problem	1,162		233		329		378		1,712		749		124		1,057		4,583
Nonaccrual	324		121		254		2,299		3,540		5,949		7,083		46,252		65,498
Total consumer	$	5,388	$	678,070	$	965,547	$	2,140,168	$	1,187,909	$	520,010	$	809,745	$	2,269,183	$	8,570,632
Total loans:
Risk rating:
Pass(c)	$	55,585	$	3,224,127	$	3,468,217	$	5,338,840	$	4,103,739	$	2,316,576	$	1,375,323	$	3,403,504	$	23,230,327
Special Mention	12		839		44,573		82,092		148,491		74,100		10,666		13,064		373,826
Potential Problem	4,972		28,994		19,409		41,150		43,057		31,920		8,717		23,002		196,248
Nonaccrual	355		121		12,758		23,667		14,028		41,526		7,221		47,814		147,135
Total loans	$	60,924	$	3,254,081	$	3,544,958	$	5,485,750	$	4,309,315	$	2,464,122	$	1,401,926	$	3,487,385	$	23,947,536

(a) Revolving loans converted to term loans are also reported in their year of origination.

(b) The Corporation’s policy is to assign risk ratings at the borrower level. PPP loans are 100% guaranteed by the SBA and therefore the Corporation considers these loans to have a risk profile similar to pass rated loans.

The following table presents commercial and consumer loans by credit quality indicator by vintage year at December 31, 2020:


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2020		2019		2018		2017		2016		Prior		Total
PPP:(b)
Risk rating:
Pass	$	—	$	—	$	745,767	$	—	$	—	$	—	$	—	$	—	$	745,767
Special Mention	—		—		3,988		—		—		—		—		—		3,988
Potential Problem	—		—		18,002		—		—		—		—		—		18,002

PPP	$	—	$	—	$	767,757	$	—	$	—	$	—	$	—	$	—	$	767,757
Commercial and industrial:
Risk rating:
Pass	$	4,628	$	2,177,138	$	1,389,260	$	1,435,519	$	1,182,302	$	483,957	$	305,998	$	453,734	$	7,427,908
Special Mention	—		10,159		2,719		39,854		37,042		113		215		67		90,169
Potential Problem	2,565		7,237		19,331		28,413		56,580		2,269		6,477		1,179		121,487
Nonaccrual	16,852		—		6,238		5,789		17,014		16,623		8,781		7,414		61,859
Commercial and industrial	$	24,045	$	2,194,534	$	1,417,548	$	1,509,575	$	1,292,938	$	502,962	$	321,471	$	462,394	$	7,701,422
Commercial real estate - owner occupied:
Risk rating:
Pass	$	1,150	$	18,022	$	185,861	$	209,069	$	128,360	$	99,546	$	147,366	$	79,111	$	867,335
Special Mention	—		113		1,882		3,122		300		658		264		—		6,339
Potential Problem	—		3,486		4,104		8,916		—		1,490		4,437		3,747		26,179
Nonaccrual	—		—		—		—		—		318		—		740		1,058
Commercial real estate - owner occupied	$	1,150	$	21,621	$	191,847	$	221,107	$	128,660	$	102,012	$	152,067	$	83,598	$	900,912
Commercial and business lending:
Risk rating:
Pass	$	5,778	$	2,195,160	$	2,320,888	$	1,644,588	$	1,310,662	$	583,503	$	453,364	$	532,845	$	9,041,009
Special Mention	—		10,272		8,589		42,976		37,342		771		479		67		100,496
Potential Problem	2,565		10,723		41,437		37,329		56,580		3,759		10,915		4,926		165,668
Nonaccrual	16,852		—		6,238		5,789		17,014		16,941		8,781		8,154		62,917
Commercial and business lending	$	25,195	$	2,216,154	$	2,377,152	$	1,730,682	$	1,421,598	$	604,974	$	473,539	$	545,992	$	9,370,091
Commercial real estate - investor:
Risk rating:
Pass	$	10,971	$	171,497	$	1,249,644	$	976,332	$	720,237	$	271,987	$	341,658	$	211,360	$	3,942,714
Special Mention	—		—		90,235		97,333		12,339		—		21,882		8,465		230,254
Potential Problem	—		838		16,343		13,575		30,911		2,279		239		27,209		91,396
Nonaccrual	19,803		—		10,141		53,056		446		14,267		—		309		78,220
Commercial real estate - investor	$	30,774	$	172,335	$	1,366,364	$	1,140,297	$	763,933	$	288,533	$	363,779	$	247,343	$	4,342,584
Real estate construction:
Risk rating:
Pass	$	776	$	47,880	$	645,925	$	738,561	$	294,910	$	25,219	$	2,420	$	16,768	$	1,771,682
Special Mention	—		—		487		494		48,283		42		—		30		49,336
Potential Problem	—		—		135		—		18,803		—		93		15		19,046
Nonaccrual	—		—		—		—		—		16		—		338		353
Real estate construction	$	776	$	47,880	$	646,547	$	739,055	$	361,996	$	25,277	$	2,513	$	17,150	$	1,840,417
Commercial real estate lending:
Risk rating:
Pass	$	11,746	$	219,377	$	1,895,569	$	1,714,893	$	1,015,146	$	297,205	$	344,078	$	228,127	$	5,714,396
Special Mention	—		—		90,722		97,827		60,622		42		21,882		8,494		279,590
Potential Problem	—		838		16,479		13,575		49,714		2,279		332		27,224		110,442
Nonaccrual	19,803		—		10,141		53,056		446		14,283		—		647		78,573
Commercial real estate lending	$	31,549	$	220,215	$	2,012,911	$	1,879,352	$	1,125,929	$	313,810	$	366,292	$	264,493	$	6,183,001


					Term Loans Amortized Cost Basis by Origination Year(a)
($ in Thousands)	Rev Loans Converted to Term(a)		Rev Loans Amortized Cost Basis		2020		2019		2018		2017		2016		Prior		Total
Total commercial:
Risk rating:
Pass	$	17,524	$	2,414,537	$	4,216,457	$	3,359,482	$	2,325,808	$	880,708	$	797,441	$	760,973	$	14,755,405
Special Mention	—		10,272		99,311		140,803		97,964		813		22,361		8,562		380,086
Potential Problem	2,565		11,561		57,916		50,905		106,295		6,038		11,247		32,150		276,111
Nonaccrual	36,655		—		16,379		58,845		17,460		31,224		8,781		8,801		141,490
Total commercial	$	56,745	$	2,436,370	$	4,390,063	$	3,610,033	$	2,547,526	$	918,783	$	839,831	$	810,485	$	15,553,091
Residential mortgage:
Risk rating:
Pass	$	—	$	—	$	2,185,240	$	1,490,589	$	615,118	$	998,072	$	911,797	$	1,612,971	$	7,813,788
Special Mention	—		—		—		355		330		102		126		537		1,450
Potential Problem	—		—		1,200		689		652		—		179		1,028		3,749
Nonaccrual	—		—		1,478		2,271		5,882		7,116		11,003		31,587		59,337
Residential mortgage	$	—	$	—	$	2,187,918	$	1,493,903	$	621,983	$	1,005,290	$	923,105	$	1,646,124	$	7,878,324
Home equity:
Risk rating:
Pass	$	10,224	$	569,389	$	2,057	$	12,968	$	15,792	$	11,594	$	5,803	$	76,165	$	693,767
Special Mention	596		631		—		39		14		39		4		804		1,532
Potential Problem	—		1,922		—		—		—		—		—		146		2,068
Nonaccrual	1,600		100		965		134		410		319		711		7,249		9,888
Home equity	$	12,421	$	572,041	$	3,022	$	13,141	$	16,216	$	11,952	$	6,518	$	84,364	$	707,255
Other consumer:
Risk rating:
Pass	$	70	$	165,114	$	9,525	$	10,309	$	3,987	$	1,872	$	1,185	$	120,425	$	312,416
Special Mention	5		438		13		16		11		4		7		8		498

Nonaccrual	5		33		9		49		21		10		—		18		140
Other consumer	$	81	$	165,585	$	9,547	$	10,374	$	4,019	$	1,886	$	1,192	$	120,451	$	313,054
Total consumer:
Risk rating:
Pass	$	10,294	$	734,502	$	2,196,822	$	1,513,865	$	634,897	$	1,011,539	$	918,785	$	1,809,561	$	8,819,971
Special Mention	602		1,069		13		410		356		145		137		1,349		3,480
Potential Problem	—		1,922		1,200		689		652		—		179		1,174		5,817
Nonaccrual	1,605		133		2,452		2,454		6,313		7,445		11,714		38,854		69,364
Total consumer	$	12,501	$	737,626	$	2,200,487	$	1,517,417	$	642,218	$	1,019,128	$	930,816	$	1,850,939	$	8,898,632
Total loans:
Risk rating:
Pass (c)	$	27,819	$	3,149,039	$	6,413,278	$	4,873,347	$	2,960,705	$	1,892,247	$	1,716,226	$	2,570,534	$	23,575,376
Special Mention	602		11,341		99,324		141,213		98,320		958		22,498		9,911		383,566
Potential Problem	2,565		13,483		59,116		51,593		106,947		6,038		11,426		33,324		281,928
Nonaccrual	38,260		133		18,831		61,298		23,773		38,669		20,496		47,655		210,854
Total loans	$	69,246	$	3,173,996	$	6,590,550	$	5,127,451	$	3,189,745	$	1,937,912	$	1,770,647	$	2,661,424	$	24,451,724

(a) Revolving loans converted to term loans are also reported in their year of origination.

Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate policies for allowance for loan losses, allowance for unfunded commitments, nonaccrual loans, and charge offs.

For commercial loans, management has determined the pass credit quality indicator to include credits exhibiting acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits performing in accordance with the original contractual terms.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that warrant specific attention from management. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, which may jeopardize liquidation of the debt, and are characterized by the distinct possibility the Corporation will sustain some loss if the deficiencies are not corrected. Management has determined commercial loan relationships in nonaccrual status, and commercial and consumer loan relationships with their terms restructured in a TDR, meet the criteria to be individually evaluated. Commercial loans classified as special mention, potential problem, and nonaccrual are reviewed at a minimum on a quarterly basis, while pass credits, which are performing rated credits, are generally reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted.

The following table presents loans by past due status at June 30, 2021:


	Accruing
($ in Thousands)	Current(a)		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(b)(c)		Total
PPP	$	405,482	$	—	$	—	$	—	$	—	$	405,482
Commercial and industrial	7,890,277		80		179		203		18,380		7,909,119
Commercial real estate - owner occupied	880,700		47		—		—		7		880,755
Commercial and business lending	9,176,459		127		179		203		18,387		9,195,355
Commercial real estate - investor	4,237,257		391		—		—		63,003		4,300,651
Real estate construction	1,880,533		115		2		—		247		1,880,897
Commercial real estate lending	6,117,791		507		2		—		63,250		6,181,549
Total commercial	15,294,250		634		180		203		81,637		15,376,904
Residential mortgage	7,576,418		4,524		491		144		56,795		7,638,372
Home equity	620,794		2,202		270		—		8,517		631,783
Other consumer	298,261		649		425		955		186		300,477
Total consumer	8,495,473		7,375		1,186		1,099		65,498		8,570,632
Total loans	$	23,789,723	$	8,009	$	1,367	$	1,302	$	147,135	$	23,947,536

(a) Any loans deferred in connection with the COVID-19 pandemic are considered current in accordance with Section 4013 of the CARES Act.

(b) Of the total nonaccrual loans, $97 million, or 66%, were current with respect to payment at June 30, 2021.

(c) No interest income was recognized on nonaccrual loans for the three and six months ended June 30, 2021. In addition, there were $5 million of nonaccrual loans for which there was no related ACLL at June 30, 2021.

The following table presents loans by past due status at December 31, 2020:


	Accruing
($ in Thousands)	Current(a)		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Nonaccrual(b)(c)		Total
PPP	$	767,757	$	—	$	—	$	—	$	—	$	767,757
Commercial and industrial	7,633,269		2,819		3,300		175		61,859		7,701,422
Commercial real estate - owner occupied	899,480		158		215		—		1,058		900,912
Commercial and business lending	9,300,506		2,977		3,516		175		62,917		9,370,091
Commercial real estate - investor	4,251,571		1,024		11,769		—		78,220		4,342,584
Real estate construction	1,839,073		991		—		—		353		1,840,417
Commercial real estate lending	6,090,644		2,015		11,769		—		78,573		6,183,001
Total commercial	15,391,150		4,992		15,284		175		141,490		15,553,091
Residential mortgage	7,808,294		8,975		1,410		308		59,337		7,878,324
Home equity	692,565		3,071		1,731		—		9,888		707,255
Other consumer	310,200		1,039		560		1,115		140		313,054
Total consumer	8,811,060		13,085		3,701		1,423		69,364		8,898,632
Total loans	$	24,202,209	$	18,077	$	18,985	$	1,598	$	210,854	$	24,451,724

(a) Any loans deferred in connection with the COVID-19 pandemic are considered current in accordance with Section 4013 of the CARES Act.

(b) Of the total nonaccrual loans, $128 million, or 61%, were current with respect to payment at December 31, 2020.

(c) No interest income was recognized on nonaccrual loans for the year ended December 31, 2020. In addition, there were $28 million of nonaccrual loans for which there was no related ACLL at December 31, 2020.

Troubled Debt Restructurings

Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty.

The following table presents nonaccrual and performing restructured loans by loan portfolio:


	June 30, 2021				December 31, 2020
($ in Thousands)	Performing Restructured Loans		Nonaccrual Restructured Loans(a)		Performing Restructured Loans		Nonaccrual Restructured Loans(a)

Commercial and industrial	$	11,569	$	1,699	$	12,713	$	6,967
Commercial real estate — owner occupied	1,225		—		1,711		—
Commercial real estate — investor	13,306		213		26,435		225
Real estate construction	253		108		260		111
Residential mortgage	12,227		14,029		7,825		11,509
Home equity	2,451		1,189		1,957		1,379
Other consumer	904		—		1,191		—
Total restructured loans(b)	$	41,935	$	17,237	$	52,092	$	20,190

(a) Nonaccrual restructured loans have been included within nonaccrual loans.
(b) Does not include any restructured loans related to the COVID-19 pandemic in accordance with Section 4013 of the CARES Act.

The Corporation had a recorded investment of $10 million in loans modified as TDRs during the six months ended June 30, 2021, of which $5 million were in accrual status, included in pass or special mention based on their risk rating within the credit quality tables, and $5 million were in nonaccrual within the credit quality tables, pending a sustained period of repayment. Short-term loan modifications made in good faith to help ease the adverse effects of the COVID-19 pandemic are not categorized as TDRs in accordance with the CARES Act. The following table provides the number of loans modified in a TDR by loan portfolio, the recorded investment, and unpaid principal balance for the six months ended June 30, 2021 and 2020:


	Six Months Ended June 30, 2021					Six Months Ended June 30, 2020
($ in Thousands)	Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)		Number of Loans	Recorded Investment(a)		Unpaid Principal Balance(b)

Commercial and industrial	2	$	128	$	129	2	$	1,112	$	1,140
Commercial real estate — owner occupied	—	—		—		1	288		319
Commercial real estate — investor	4	1,690		1,690		1	395		1,705
Real estate construction	—	—		—		1	102		102
Residential mortgage	37	7,424		7,450		24	5,163		5,237
Home equity	4	566		603		15	471		483

Total loans modified	47	$	9,808	$	9,871	44	$	7,531	$	8,986

(a) Represents post-modification outstanding recorded investment.
(b) Represents pre-modification outstanding recorded investment.

Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the six months ended June 30, 2021, restructured loan modifications of commercial loans primarily included maturity date extensions and payment schedule modifications. Restructured loan modifications of consumer loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the six months ended June 30, 2021.

The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the six months ended June 30, 2021 and 2020, and the recorded investment in these restructured loans as of June 30, 2021 and 2020:


	Six Months Ended June 30, 2021			Six Months Ended June 30, 2020
($ in Thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment





Residential mortgage	1	97		5	1,036
Home equity	—	—		4	208

Total loans modified	1	$	97	9	$	1,244

All loans modified in a TDR are individually evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the ACLL.

The Corporation analyzes loans for classification as a probable TDR. This analysis includes identifying customers that are showing possible liquidity issues in the near term without reasonable access to alternative sources of capital. At June 30, 2021, the Corporation had $19 million in loans meeting this classification compared to $68 million at December 31, 2020. Of the loans classified as probable TDRs at June 30, 2021, the entire $19 million was related to the commercial and industrial portfolio.

Allowance for Credit Losses on Loans

The ACLL is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the ACLL represents management’s estimate of an amount appropriate to provide for expected lifetime credit losses in the loan portfolio at the balance sheet date. The expected lifetime credit losses are the product of multiplying the Corporation's estimates of probability of default, loss given default, and the individual loan level exposure at default on an undiscounted basis. A main factor in the determination of the ACLL is the economic forecast. The Corporation utilized Moody's baseline forecast, updated during June 2021, in the allowance model. The forecast is applied over a 2 year reasonable and supportable period with straight-line reversion to the historical losses over the second year of the period. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit). See Note 12 for additional information on the change in the allowance for unfunded commitments.

The following table presents a summary of the changes in the ACLL by portfolio segment for the six months ended June 30, 2021:


($ in Thousands)	December 31, 2020		Charge offs		Recoveries		Net Charge offs		Provision for credit losses		June 30, 2021		ACLL / Loans
Allowance for loan losses
PPP	$	531	$	—	$	—	$	—	$	(299)	$	232
Commercial and industrial	142,793		(3,723)		6,423		2,700		(41,178)		104,315
Commercial real estate — owner occupied	11,274		—		9		9		1,023		12,306
Commercial and business lending	154,598		(3,723)		6,432		2,709		(40,454)		116,853
Commercial real estate — investor	93,435		(14,340)		2,865		(11,475)		1,410		83,371
Real estate construction	59,193		(3)		54		52		(10,023)		49,221
Commercial real estate lending	152,629		(14,342)		2,919		(11,423)		(8,613)		132,592
Total commercial	307,226		(18,065)		9,350		(8,715)		(49,067)		249,445
Residential mortgage	42,996		(554)		222		(332)		566		43,230
Home equity	18,849		(535)		1,216		681		(4,464)		15,066
Other consumer	14,630		(1,700)		675		(1,025)		(2,535)		11,069
Total consumer	76,475		(2,790)		2,114		(676)		(6,433)		69,366
Total loans	$	383,702	$	(20,855)	$	11,464	$	(9,391)	$	(55,500)	$	318,811
Allowance for unfunded commitments

Commercial and industrial	22,311		—		—		—		(1,151)		21,161
Commercial real estate — owner occupied	266		—		—		—		140		406
Commercial and business lending	22,577		—		—		—		(1,011)		21,566
Commercial real estate — investor	636		—		—		—		87		723
Real estate construction	18,887		—		—		—		(1,267)		17,620
Commercial real estate lending	19,523		—		—		—		(1,180)		18,343
Total commercial	42,101		—		—		—		(2,191)		39,910

Home equity	3,118		—		—		—		(172)		2,946
Other consumer	2,557		—		—		—		(137)		2,420
Total consumer	5,675		—		—		—		(309)		5,366
Total loans	$	47,776	$	—	$	—	$	—	$	(2,500)	$	45,276
Allowance for credit losses on loans
PPP	$	531	$	—	$	—	$	—	$	(299)	$	232	0.06	%
Commercial and industrial	165,105		(3,723)		6,423		2,700		(42,328)		125,476		1.59	%
Commercial real estate — owner occupied	11,539		—		9		9		1,163		12,711		1.44	%
Commercial and business lending	177,175		(3,723)		6,432		2,709		(41,465)		138,419		1.51	%
Commercial real estate — investor	94,071		(14,340)		2,865		(11,475)		1,497		84,093		1.96	%
Real estate construction	78,080		(3)		54		52		(11,290)		66,842		3.55	%
Commercial real estate lending	172,152		(14,342)		2,919		(11,423)		(9,793)		150,936		2.44	%
Total commercial	349,327		(18,065)		9,350		(8,715)		(51,257)		289,355		1.88	%
Residential mortgage	42,996		(554)		222		(332)		566		43,230		0.57	%
Home equity	21,967		(535)		1,216		681		(4,636)		18,012		2.85	%
Other consumer	17,187		(1,700)		675		(1,025)		(2,672)		13,489		4.49	%
Total consumer	82,150		(2,790)		2,114		(676)		(6,743)		74,731		0.87	%
Total loans	$	431,478	$	(20,855)	$	11,464	$	(9,391)	$	(58,000)	$	364,087	1.52	%

The following table presents a summary of the changes in the ACLL by portfolio segment for the year ended December 31, 2020:


($ in Thousands)	Dec. 31, 2019		Cumulative effect of ASU 2016-13 adoption (CECL)		Jan. 1, 2020		Charge offs		Recoveries		Net Charge offs		Gross up of allowance for PCD loans at acquisition		Provision recorded at acquisition		Provision for credit losses		Dec. 31, 2020		ACLL / Loans
Allowance for loan losses
PPP	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	531	$	531
Commercial and industrial	91,133		52,919		144,052		(80,320)		7,004		(73,316)		293		408		71,355		142,793
Commercial real estate — owner occupied	10,284		(1,851)		8,433		(419)		147		(272)		890		255		1,967		11,274
Commercial and business lending	101,417		51,068		152,485		(80,739)		7,151		(73,588)		1,183		663		73,853		154,598
Commercial real estate — investor	40,514		2,041		42,555		(22,920)		643		(22,277)		753		472		71,933		93,435
Real estate construction	24,915		7,467		32,382		(19)		49		31		435		492		25,854		59,193
Commercial real estate lending	65,428		9,508		74,937		(22,938)		692		(22,246)		1,188		964		97,787		152,629
Total commercial	166,846		60,576		227,422		(103,677)		7,844		(95,834)		2,371		1,627		171,641		307,226
Residential mortgage	16,960		33,215		50,175		(1,867)		500		(1,367)		651		403		(6,864)		42,996
Home equity	10,926		11,649		22,575		(1,719)		1,978		259		422		374		(4,781)		18,849
Other consumer	6,639		7,016		13,655		(4,790)		1,101		(3,689)		61		140		4,462		14,630
Total consumer	34,525		51,880		86,405		(8,376)		3,579		(4,797)		1,134		917		(7,183)		76,475
Total loans	$	201,371	$	112,457	$	313,828	$	(112,053)	$	11,422	$	(100,631)	$	3,504	$	2,543	$	164,457	$	383,702
Allowance for unfunded commitments

Commercial and industrial	12,276		(3,998)		8,278		—		—		—		—		61		13,972		22,311
Commercial real estate — owner occupied	127		—		127		—		—		—		—		4		135		266
Commercial and business lending	12,403		(3,998)		8,405		—		—		—		—		65		14,108		22,577
Commercial real estate — investor	530		246		776		—		—		—		—		2		(141)		636
Real estate construction	7,532		18,347		25,879		—		—		—		—		45		(7,038)		18,887
Commercial real estate lending	8,062		18,593		26,655		—		—		—		—		47		(7,179)		19,523
Total commercial	20,465		14,595		35,060		—		—		—		—		112		6,929		42,101

Home equity	1,038		2,591		3,629		—		—		—		—		66		(577)		3,118
Other consumer	405		1,504		1,909		—		—		—		—		—		649		2,557
Total consumer	1,443		4,095		5,538		—		—		—		—		66		72		5,675
Total loans	$	21,907	$	18,690	$	40,597	$	—	$	—	$	—	$	—	$	179	$	7,000	$	47,776
Allowance for credit losses on loans
PPP	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	531	$	531	0.07	%
Commercial and industrial	103,409		48,921		152,330		(80,320)		7,004		(73,316)		293		469		85,327		165,105		2.14	%
Commercial real estate — owner occupied	10,411		(1,851)		8,560		(419)		147		(272)		890		259		2,102		11,539		1.28	%
Commercial and business lending	113,820		47,070		160,890		(80,739)		7,151		(73,588)		1,183		728		87,961		177,175		1.89	%
Commercial real estate — investor	41,044		2,287		43,331		(22,920)		643		(22,277)		753		474		71,792		94,071		2.17	%
Real estate construction	32,447		25,814		58,261		(19)		49		31		435		537		18,816		78,080		4.24	%
Commercial real estate lending	73,490		28,101		101,591		(22,938)		692		(22,246)		1,188		1,011		90,608		172,152		2.78	%
Total commercial	187,311		75,171		262,482		(103,677)		7,844		(95,834)		2,371		1,739		178,569		349,327		2.25	%
Residential mortgage	16,960		33,215		50,175		(1,867)		500		(1,367)		651		403		(6,864)		42,996		0.55	%
Home equity	11,964		14,240		26,204		(1,719)		1,978		259		422		440		(5,358)		21,967		3.11	%
Other consumer	7,044		8,520		15,564		(4,790)		1,101		(3,689)		61		140		5,111		17,187		5.49	%
Total consumer	35,968		55,975		91,943		(8,376)		3,579		(4,797)		1,134		983		(7,112)		82,150		0.92	%
Total loans	$	223,278	$	131,147	$	354,425	$	(112,053)	$	11,422	$	(100,631)	$	3,504	$	2,722	$	171,457	$	431,478	1.76	%

Loans Acquired in Acquisitions

Loans acquired in a business combination after January 1, 2020 are recorded in accordance with ASC Topic 326. See Note 2 for more information on loans acquired in a business combination. After January 1, 2020, acquired loans were segregated into two types:

•Non-PCD loans are accounted for in accordance with ASC Topic 310-20 "Nonrefundable Fees and Other Costs" as these loans do not show evidence of credit deterioration since origination. The allowance for loan losses on these loans is recorded through provision for credit losses on the consolidated statements of income at acquisition.

•PCD loans are loans demonstrating more than insignificant credit deterioration and are accounted for in accordance with ASC Topic 326-30. Under this guidance, the credit mark on acquired assets grosses up the ACLL and the amortized cost of the loan.