Loans and Leases (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Accounts, Notes, Loans and Financing Receivable

The table below details portfolio loans and leases as of the dates indicated:



	September 30, 2018						December 31, 2017
(dollars in thousands)	Originated		Acquired		Total Loans and Leases		Originated		Acquired		Total Loans and Leases
Loans held for sale	$	4,111	$	—	$	4,111	$	3,794	$	—	$	3,794
Real Estate Loans:
Commercial mortgage	$	1,259,397	$	359,096	$	1,618,493	$	1,122,327	$	401,050	$	1,523,377
Home equity lines and loans	180,068		27,738		207,806		183,283		34,992		218,275
Residential mortgage	381,037		86,365		467,402		360,935		97,951		458,886
Construction	158,691		19,802		178,493		128,266		84,188		212,454
Total real estate loans	$	1,979,193	$	493,001	$	2,472,194	$	1,794,811	$	618,181	$	2,412,992
Commercial and industrial	618,200		104,799		722,999		589,304		130,008		719,312
Consumer	44,833		2,976		47,809		35,146		3,007		38,153
Leases	109,934		28,539		138,473		68,035		47,366		115,401
Total portfolio loans and leases	$	2,752,160	$	629,315	$	3,381,475	$	2,487,296	$	798,562	$	3,285,858
Total loans and leases	$	2,756,271	$	629,315	$	3,385,586	$	2,491,090	$	798,562	$	3,289,652
Loans with fixed rates	$	1,167,097	$	375,326	$	1,542,423	$	1,034,542	$	538,510	$	1,573,052
Loans with adjustable or floating rates	1,589,174		253,989		1,843,163		1,456,548		260,052		1,716,600
Total loans and leases	$	2,756,271	$	629,315	$	3,385,586	$	2,491,090	$	798,562	$	3,289,652
Net deferred loan origination fees included in the above loan table	$	1,220	$	—	$	1,220	$	887	$	—	$	887

Schedule of Components of Leveraged Lease Investments

Components of the net investment in leases are detailed as follows:



	September 30, 2018									December 31, 2017
(dollars in thousands)	Originated			Acquired			Total Leases			Originated			Acquired			Total Leases
Minimum lease payments receivable	$	122,596		$	32,039		$	154,635		$	75,592		$	55,219		$	130,811
Unearned lease income	(17,717		)	(4,293		)	(22,010		)	(10,338		)	(9,523		)	(19,861		)
Initial direct costs and deferred fees	5,055			793			5,848			2,781			1,670			4,451
Total Leases	$	109,934		$	28,539		$	138,473		$	68,035		$	47,366		$	115,401

Schedule of Financing Receivables, Non Accrual Status

Non-Performing Loans and Leases⁽¹⁾



	September 30, 2018						December 31, 2017
(dollars in thousands)	Originated		Acquired		Total Loans and Leases		Originated		Acquired		Total Loans and Leases
Commercial mortgage	$	—	$	735	$	735	$	90	$	782	$	872
Home equity lines and loans	1,692		241		1,933		1,221		260		1,481
Residential mortgage	1,968		802		2,770		1,505		2,912		4,417
Construction	291		—		291		—		—		—
Commercial and industrial	925		857		1,782		826		880		1,706
Consumer	42		75		117		—		—		—
Leases	479		883		1,362		103		—		103
Total non-performing loans and leases	$	5,397	$	3,593	$	8,990	$	3,745	$	4,834	$	8,579

(1) Purchased credit-impaired loans, which have been recorded at their fair values at acquisition, and which are performing, are excluded from this table, with the exception of $393 thousand and $167 thousand of purchased credit-impaired loans as of September 30, 2018 and December 31, 2017, respectively, which became non-performing subsequent to acquisition.

Schedule of Information Related to Purchased Credit Impaired Loans

The outstanding principal balance and related carrying amount of purchased credit-impaired loans, for which the Corporation applies ASC 310-30, Accounting for Purchased Loans with Deteriorated Credit Quality, to account for the interest earned, as of the dates indicated, are as follows:



(dollars in thousands)	September 30, 2018		December 31, 2017
Outstanding principal balance	$	38,062	$	46,543
Carrying amount⁽¹⁾	$	27,519	$	30,849

(1) Includes $393 thousand and $173 thousand of purchased credit-impaired loans as of September 30, 2018 and December 31, 2017, respectively, for which the Corporation could not estimate the timing or amount of expected cash flows to be collected at acquisition, and for which no accretable yield is recognized. Additionally, the table above includes $393 thousand and $167 thousand of purchased credit-impaired loans as of September 30, 2018 and December 31, 2017, respectively, which became non-performing subsequent to acquisition, which are disclosed in Note 5C, above, and which also have no accretable yield.

Schedule of Changes in Accretable Discount Related to Purchased Credit Impaired Loans

The following table presents changes in the accretable discount on purchased credit-impaired loans, for which the Corporation applies ASC 310-30, for the nine months ended September 30, 2018:



(dollars in thousands)	Accretable Discount
Balance, December 31, 2017	$	4,083
Accretion	(1,819		)
Reclassifications from nonaccretable difference	609
Additions/adjustments	329
Balance, September 30, 2018	$	3,202

Past Due Financing Receivables

The following tables present an aging of all portfolio loans and leases as of the dates indicated:



	Accruing Loans and Leases
As of September 30, 2018	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
Commercial mortgage	$	—	$	2,468	$	—	$	2,468	$	1,615,290	$	1,617,758	$	735	$	1,618,493
Home equity lines and loans	324		—		—		324		205,549		205,873		1,933		207,806
Residential mortgage	2,218		179		—		2,397		462,235		464,632		2,770		467,402
Construction	488		—		—		488		177,714		178,202		291		178,493
Commercial and industrial	1,115		1,255		—		2,370		718,847		721,217		1,782		722,999
Consumer	46		23		—		69		47,623		47,692		117		47,809
Leases	751		252		—		1,003		136,108		137,111		1,362		138,473
Total portfolio loans and leases	$	4,942	$	4,177	$	—	$	9,119	$	3,363,366	$	3,372,485	$	8,990	$	3,381,475



	Accruing Loans and Leases
As of December 31, 2017	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
Commercial mortgage	$	1,366	$	2,428	$	—	$	3,794	$	1,518,711	$	1,522,505	$	872	$	1,523,377
Home equity lines and loans	338		10		—		348		216,446		216,794		1,481		218,275
Residential mortgage	1,386		79		—		1,465		453,004		454,469		4,417		458,886
Construction	—		—		—		—		212,454		212,454		—		212,454
Commercial and industrial	658		286		—		944		716,662		717,606		1,706		719,312
Consumer	1,106		—		—		1,106		37,047		38,153		—		38,153
Leases	125		177		—		302		114,996		115,298		103		115,401
Total portfolio loans and leases	$	4,979	$	2,980	$	—	$	7,959	$	3,269,320	$	3,277,279	$	8,579	$	3,285,858

*Included as “current” are $720 thousand and $4.1 million of loans and leases as of September 30, 2018 and December 31, 2017, respectively, which are classified as administratively delinquent. An administratively delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. Management does not consider these loans to be delinquent.

The following tables present an aging of originated portfolio loans and leases as of the dates indicated:



	Accruing Loans and Leases
As of September 30, 2018	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
Commercial mortgage	$	—	$	76	$	—	$	76	$	1,259,321	$	1,259,397	$	—	$	1,259,397
Home equity lines and loans	250		—		—		250		178,126		178,376		1,692		180,068
Residential mortgage	1,475		—		—		1,475		377,594		379,069		1,968		381,037
Construction	488		—		—		488		157,912		158,400		291		158,691
Commercial and industrial	1,051		1,255		—		2,306		614,969		617,275		925		618,200
Consumer	46		23		—		69		44,722		44,791		42		44,833
Leases	407		115		—		522		108,933		109,455		479		109,934
Total originated portfolio loans and leases	$	3,717	$	1,469	$	—	$	5,186	$	2,741,577	$	2,746,763	$	5,397	$	2,752,160



	Accruing Loans and Leases
As of December 31, 2017	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
Commercial mortgage	$	1,255	$	81	$	—	$	1,336	$	1,120,901	$	1,122,237	$	90	$	1,122,327
Home equity lines and loans	26		—		—		26		182,036		182,062		1,221		183,283
Residential mortgage	721		—		—		721		358,709		359,430		1,505		360,935
Construction	—		—		—		—		128,266		128,266		—		128,266
Commercial and industrial	439		236		—		675		587,803		588,478		826		589,304
Consumer	21		—		—		21		35,125		35,146		—		35,146
Leases	125		177		—		302		67,630		67,932		103		68,035
Total originated portfolio loans and leases	$	2,587	$	494	$	—	$	3,081	$	2,480,470	$	2,483,551	$	3,745	$	2,487,296

*Included as “current” are $720 thousand and $4.0 million of loans and leases as of September 30, 2018 and December 31, 2017, respectively, which are classified as administratively delinquent. An administratively delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. Management does not consider these loans to be delinquent.

The following tables present an aging of acquired portfolio loans and leases as of the dates indicated:



	Accruing Loans and Leases
As of September 30, 2018	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
Commercial mortgage	$	—	$	2,392	$	—	$	2,392	$	355,969	$	358,361	$	735	$	359,096
Home equity lines and loans	74		—		—		74		27,423		27,497		241		27,738
Residential mortgage	743		179		—		922		84,641		85,563		802		86,365
Construction	—		—		—		—		19,802		19,802		—		19,802
Commercial and industrial	64		—		—		64		103,878		103,942		857		104,799
Consumer	—		—		—		—		2,901		2,901		75		2,976
Leases	344		137		—		481		27,175		27,656		883		28,539
Total acquired portfolio loans and leases	$	1,225	$	2,708	$	—	$	3,933	$	621,789	$	625,722	$	3,593	$	629,315



	Accruing Loans and Leases
As of December 31, 2017	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current*		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
Commercial mortgage	$	111	$	2,347	$	—	$	2,458	$	397,810	$	400,268	$	782	$	401,050
Home equity lines and loans	312		10		—		322		34,410		34,732		260		34,992
Residential mortgage	665		79		—		744		94,295		95,039		2,912		97,951
Construction	—		—		—		—		84,188		84,188		—		84,188
Commercial and industrial	219		50		—		269		128,859		129,128		880		130,008
Consumer	1,085		—		—		1,085		1,922		3,007		—		3,007
Leases	—		—		—		—		47,366		47,366		—		47,366
Total acquired portfolio loans and leases	$	2,392	$	2,486	$	—	$	4,878	$	788,850	$	793,728	$	4,834	$	798,562

*Included as “current” are $0 and $102 thousand of loans and leases as of September 30, 2018 and December 31, 2017, respectively, which are classified as administratively delinquent. An administratively delinquent loan is one which has been approved for a renewal or extension but has not had all the required documents fully executed as of the reporting date. Management does not consider these loans to be delinquent.

Allowance for Credit Losses on Financing Receivables

The following tables detail the roll-forward of the Allowance for the three and nine months ended September 30, 2018 and 2017:



(dollars in thousands)	Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage			Construction		Commercial and Industrial			Consumer			Leases			Unallocated		Total
Balance, December 31, 2017	$	7,550		$	1,086		$	1,926		$	937	$	5,038		$	246		$	742		$	—	$	17,525
Charge-offs	(74		)	(225		)	(42		)	—		(1,069		)	(165		)	(2,416		)	—		(3,991		)
Recoveries	8			1			55			1		17			5			232			—		319
Provision for loan and lease losses	60			30			(121		)	303		1,319			232			3,008			—		4,831
Balance, September 30, 2018	$	7,544		$	892		$	1,818		$	1,241	$	5,305		$	318		$	1,566		$	—	$	18,684



(dollars in thousands)	Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage			Construction		Commercial and Industrial			Consumer			Leases			Unallocated		Total
Balance, June 30, 2018	$	8,033		$	933		$	1,933		$	1,158	$	5,672		$	289		$	1,380		$	—	$	19,398
Charge-offs	(58		)	—			(42		)	—		(319		)	(73		)	(1,068		)	—		(1,560		)
Recoveries	2			—			54			—		16			2			108			—		182
Provision for loan and lease losses	(433		)	(41		)	(127		)	83		(64		)	100			1,146			—		664
Balance, September 30, 2018	$	7,544		$	892		$	1,818		$	1,241	$	5,305		$	318		$	1,566		$	—	$	18,684



(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Unallocated		Total
Balance, December 31, 2016	$	6,227	$	1,255		$	1,917		$	2,233		$	5,142		$	153		$	559		$	—	$	17,486
Charge-offs	—		(676		)	(158		)	—			(560		)	(96		)	(924		)	—		(2,414		)
Recoveries	9		—			85			3			18			5			271			—		391
Provision for loan and lease losses	1,096		513			(23		)	(1,306		)	280			148			833			—		1,541
Balance, September 30, 2017	$	7,332	$	1,092		$	1,821		$	930		$	4,880		$	210		$	739		$	—	$	17,004



(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Unallocated		Total
Balance, June 30, 2017	$	6,608	$	1,214		$	1,776		$	1,111		$	4,813		$	177		$	700		$	—	$	16,399
Charge-offs	—		(69		)	(88		)	—			(301		)	(37		)	(411		)	—		(906		)
Recoveries	3		—			85			1			2			1			86			—		178
Provision for loan and lease losses	721		(53		)	48			(182		)	366			69			364			—		1,333
Balance, September 30, 2017	$	7,332	$	1,092		$	1,821		$	930		$	4,880		$	210		$	739		$	—	$	17,004

Financing Receivable by Financial Instrument Performance Status

The following tables detail the allocation of the Allowance for all portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, 2018 and December 31, 2017:



As of September 30, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	19	$	228	$	—	$	11	$	20	$	—	$	—	$	278
Collectively evaluated for impairment	7,544		873		1,590		1,241		5,294		298		1,566		—		18,406
Purchased credit-impaired⁽¹⁾	—		—		—		—		—		—		—		—		—
Total	$	7,544	$	892	$	1,818	$	1,241	$	5,305	$	318	$	1,566	$	—	$	18,684

⁽¹⁾Purchased credit-impaired loans are evaluated for impairment on an individual basis.



As of December 31, 2017	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Unallocated		Total
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	19	$	230	$	—	$	5	$	4	$	—	$	—	$	258
Collectively evaluated for impairment	7,550		1,067		1,696		937		5,033		242		742		—		17,267
Purchased credit-impaired⁽¹⁾	—		—		—		—		—		—		—		—		—
Total	$	7,550	$	1,086	$	1,926	$	937	$	5,038	$	246	$	742	$	—	$	17,525

⁽¹⁾Purchased credit-impaired loans are evaluated for impairment on an individual basis.

The following tables detail the carrying value for all portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, 2018 and December 31, 2017:



As of September 30, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Carrying value of loans and leases:
Individually evaluated for impairment	$	736	$	2,602	$	5,940	$	291	$	1,757	$	144	$	—	$	11,470
Collectively evaluated for impairment	1,609,375		204,694		461,462		175,802		705,015		47,665		138,473		3,342,486
Purchased credit-impaired⁽¹⁾	8,382		510		—		2,400		16,227		—		—		27,519
Total	$	1,618,493	$	207,806	$	467,402	$	178,493	$	722,999	$	47,809	$	138,473	$	3,381,475

⁽¹⁾Purchased credit-impaired loans are evaluated for impairment on an individual basis.



As of December 31, 2017	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Carrying value of loans and leases:
Individually evaluated for impairment	$	2,128	$	2,162	$	7,726	$	—	$	1,897	$	27	$	—	$	13,940
Collectively evaluated for impairment	1,503,825		215,604		451,160		204,088		712,865		38,126		115,401		3,241,069
Purchased credit-impaired⁽¹⁾	17,424		509		—		8,366		4,550		—		—		30,849
Total	$	1,523,377	$	218,275	$	458,886	$	212,454	$	719,312	$	38,153	$	115,401	$	3,285,858

⁽¹⁾Purchased credit-impaired loans are evaluated for impairment on an individual basis.

The following tables detail the allocation of the Allowance for originated portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, 2018 and December 31, 2017:



As of September 30, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	19	$	179	$	—	$	4	$	4	$	—	$	206
Collectively evaluated for impairment	7,544		873		1,590		1,241		5,294		298		1,566		18,406
Total	$	7,544	$	892	$	1,769	$	1,241	$	5,298	$	302	$	1,566	$	18,612



As of December 31, 2017	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	19	$	180	$	—	$	5	$	4	$	—	$	208
Collectively evaluated for impairment	7,550		1,067		1,696		937		5,033		242		742		17,267
Total	$	7,550	$	1,086	$	1,876	$	937	$	5,038	$	246	$	742	$	17,475

The following tables detail the carrying value for originated portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, 2018 and December 31, 2017:



As of September 30, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Carrying value of loans and leases:
Individually evaluated for impairment	$	—	$	2,361	$	4,268	$	291	$	1,294	$	68	$	—	$	8,282
Collectively evaluated for impairment	1,259,397		177,707		376,769		158,400		616,906		44,765		109,934		2,743,878
Total	$	1,259,397	$	180,068	$	381,037	$	158,691	$	618,200	$	44,833	$	109,934	$	2,752,160



As of December 31, 2017	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Carrying value of loans and leases:
Individually evaluated for impairment	$	1,345	$	1,902	$	4,418	$	—	$	1,186	$	27	$	—	$	8,878
Collectively evaluated for impairment	1,120,982		181,381		356,517		128,266		588,118		35,119		68,035		2,478,418
Total	$	1,122,327	$	183,283	$	360,935	$	128,266	$	589,304	$	35,146	$	68,035	$	2,487,296

The following tables detail the allocation of the Allowance for acquired portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, 2018 and December 31, 2017:



As of September 30, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	49	$	—	$	7	$	16	$	—	$	72
Collectively evaluated for impairment	—		—		—		—		—		—		—		—
Purchased credit-impaired⁽¹⁾	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	49	$	—	$	7	$	16	$	—	$	72

⁽¹⁾Purchased credit-impaired loans are evaluated for impairment on an individual basis.



As of December 31, 2017	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	50	$	—	$	—	$	—	$	—	$	50
Collectively evaluated for impairment	—		—		—		—		—		—		—		—
Purchased credit-impaired⁽¹⁾	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	50	$	—	$	—	$	—	$	—	$	50

⁽¹⁾Purchased credit-impaired loans are evaluated for impairment on an individual basis.

The following tables detail the carrying value for acquired portfolio loans and leases by portfolio segment based on the methodology used to evaluate the loans and leases for impairment as of September 30, 2018 and December 31, 2017:



As of September 30, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Carrying value of loans and leases:
Individually evaluated for impairment	$	736	$	241	$	1,672	$	—	$	463	$	76	$	—	$	3,188
Collectively evaluated for impairment	349,978		26,987		84,693		17,402		88,109		2,900		28,539		598,608
Purchased credit-impaired⁽¹⁾	8,382		510		—		2,400		16,227		—		—		27,519
Total	$	359,096	$	27,738	$	86,365	$	19,802	$	104,799	$	2,976	$	28,539	$	629,315

⁽¹⁾ Purchased credit-impaired loans are evaluated for impairment on an individual basis.



As of December 31, 2017	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
Carrying value of loans and leases:
Individually evaluated for impairment	$	783	$	260	$	3,308	$	—	$	711	$	—	$	—	$	5,062
Collectively evaluated for impairment	382,843		34,223		94,643		75,822		124,747		3,007		47,366		762,651
Purchased credit-impaired⁽¹⁾	17,424		509		—		8,366		4,550		—		—		30,849
Total	$	401,050	$	34,992	$	97,951	$	84,188	$	130,008	$	3,007	$	47,366	$	798,562

⁽¹⁾ Purchased credit-impaired loans are evaluated for impairment on an individual basis.

Financing Receivable Credit Quality Indicators

The following tables detail the carrying value of acquired portfolio loans and leases by portfolio segment based on the credit quality indicators used to determine the Allowance as of September 30, 2018 and December 31, 2017:

Credit Risk Profile by Internally Assigned Grade



	Commercial Mortgage				Construction				Commercial and Industrial				Total
(dollars in thousands)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Pass	$	339,258	$	376,691	$	16,468	$	66,967	$	87,183	$	124,249	$	442,909	$	567,907
Special Mention	2,321		13,448		934		3,902		227		225		3,482		17,575
Substandard	16,966		10,038		2,400		13,319		17,389		4,624		36,755		27,981
Doubtful	551		873		—		—		—		910		551		1,783
Total	$	359,096	$	401,050	$	19,802	$	84,188	$	104,799	$	130,008	$	483,697	$	615,246

The following tables detail the carrying value of all portfolio loans and leases by portfolio segment based on the credit quality indicators used to determine the Allowance as of September 30, 2018 and December 31, 2017:

Credit Risk Profile by Internally Assigned Grade



	Commercial Mortgage				Construction				Commercial and Industrial				Total
(dollars in thousands)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Pass	$	1,592,174	$	1,490,862	$	168,897	$	193,227	$	697,913	$	711,145	$	2,458,984	$	2,395,234
Special Mention	2,321		13,448		934		3,902		2,425		889		5,680		18,239
Substandard	23,447		18,194		8,662		15,325		22,660		6,013		54,769		39,532
Doubtful	551		873		—		—		1		1,265		552		2,138
Total	$	1,618,493	$	1,523,377	$	178,493	$	212,454	$	722,999	$	719,312	$	2,519,985	$	2,455,143

Credit Risk Profile by Payment Activity



	Residential Mortgage				Home Equity Lines and Loans				Consumer				Leases				Total
(dollars in thousands)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Performing	$	464,632	$	454,469	$	205,873	$	216,794	$	47,692	$	38,153	$	137,111	$	115,298	$	855,308	$	824,714
Non-performing	2,770		4,417		1,933		1,481		117		—		1,362		103		6,182		6,001
Total	$	467,402	$	458,886	$	207,806	$	218,275	$	47,809	$	38,153	$	138,473	$	115,401	$	861,490	$	830,715

The following tables detail the carrying value of originated portfolio loans and leases by portfolio segment based on the credit quality indicators used to determine the Allowance as of September 30, 2018 and December 31, 2017:

Credit Risk Profile by Internally Assigned Grade



	Commercial Mortgage				Construction				Commercial and Industrial				Total
(dollars in thousands)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Pass	$	1,252,916	$	1,114,171	$	152,429	$	126,260	$	610,730	$	586,896	$	2,016,075	$	1,827,327
Special Mention	—		—		—		—		2,198		664		2,198		664
Substandard	6,481		8,156		6,262		2,006		5,271		1,389		18,014		11,551
Doubtful	—		—		—		—		1		355		1		355
Total	$	1,259,397	$	1,122,327	$	158,691	$	128,266	$	618,200	$	589,304	$	2,036,288	$	1,839,897

Credit Risk Profile by Payment Activity



	Residential Mortgage				Home Equity Lines and Loans				Consumer				Leases				Total
(dollars in thousands)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Performing	$	379,069	$	359,430	$	178,376	$	182,062	$	44,791	$	35,146	$	109,455	$	67,932	$	711,691	$	644,570
Non-performing	1,968		1,505		1,692		1,221		42		—		479		103		4,181		2,829
Total	$	381,037	$	360,935	$	180,068	$	183,283	$	44,833	$	35,146	$	109,934	$	68,035	$	715,872	$	647,399

Schedule of Allowance for Loan Losses by Portfolio Segment



	Residential Mortgage				Home Equity Lines and Loans				Consumer				Leases				Total
(dollars in thousands)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Performing	$	85,563	$	95,039	$	27,497	$	34,732	$	2,901	$	3,007	$	27,656	$	47,366	$	143,617	$	180,144
Non-performing	802		2,912		241		260		75		—		883		—		2,001		3,172
Total	$	86,365	$	97,951	$	27,738	$	34,992	$	2,976	$	3,007	$	28,539	$	47,366	$	145,618	$	183,316

Troubled Debt Restructurings on Financing Receivables

The following table presents the balance of TDRs as of the indicated dates:



(dollars in thousands)	September 30, 2018		December 31, 2017
TDRs included in nonperforming loans and leases	$	1,208	$	3,289
TDRs in compliance with modified terms	4,316		5,800
Total TDRs	$	5,524	$	9,089

The following table presents information regarding loan and lease modifications categorized as TDRs for the three months ended September 30, 2018:



	For the Three Months Ended September 30, 2018
(dollars in thousands)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Home equity loans and lines	—	$	—	$	—
Residential mortgages	4	406		430
Leases	—	—		—
Total	4	$	406	$	430

The following table presents information regarding the types of loan and lease modifications made for the three months ended September 30, 2018:



	Number of Contracts
	Loan Term Extension	Interest Rate Change and Term Extension	Interest Rate Change and/or Interest-Only Period	Contractual Payment Reduction (Leases only)	Temporary Payment Deferral
Home equity loans and lines	—	—	—	—	—
Residential mortgages	1	—	—	—	3
Leases	—	—	—	—	—
Total	1	—	—	—	3

The following table presents information regarding loan and lease modifications categorized as TDRs for the nine months ended September 30, 2018:



	For the Nine Months Ended September 30, 2018
(dollars in thousands)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Home equity loans and lines	1	$	8	$	8
Residential mortgages	6	625		649
Commercial and industrial	1	18		18
Leases	2	33		33
Total	10	$	684	$	708

The following table presents information regarding the types of loan and lease modifications made for the nine months ended September 30, 2018:



	Number of Contracts
	Loan Term Extension	Interest Rate Change and Term Extension	Interest Rate Change and/or Interest-Only Period	Contractual Payment Reduction (Leases only)	Temporary Payment Deferral
Home equity loans and lines	—	1	—	—	—
Residential mortgages	2	1	—	—	3
Commercial and industrial	—	1	—	—	—
Leases	—	—	—	2	—
Total	2	3	—	2	3

Impaired Financing Receivables

The following tables detail the recorded investment and principal balance of impaired loans by portfolio segment, their related Allowance and interest income recognized for the three and nine months ended September 30, 2018 and 2017 (purchased credit-impaired loans are not included in the tables):



As of and for the Three Months Ended September 30, 2018	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
Impaired loans with related allowance:
Home equity lines and loans	$	567	$	567	$	19	$	569	$	6	$	—
Residential mortgage	1,699		1,699		228		1,702		20		—
Commercial and industrial	25		25		12		25		—		—
Consumer	58		58		19		58		—		—
Total	$	2,349	$	2,349	$	278	$	2,354	$	26	$	—

Impaired loans without related allowance*:
Commercial mortgage	$	735	$	793	$	—	$	930	$	—	$	—
Home equity lines and loans	2,035		2,096		—		2,064		2		—
Residential mortgage	4,242		4,328		—		4,299		24		—
Construction	291		291		—		294		—		—
Commercial and industrial	1,733		2,665		—		2,138		5		—
Consumer	86		86		—		87		—		—
Total	$	9,122	$	10,259	$	—	$	9,812	$	31	$	—
Grand total	$	11,471	$	12,608	$	278	$	12,166	$	57	$	—

*The table above does not include the recorded investment of $1.4 million of impaired leases without a related Allowance.

**Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.



As of and for the Nine Months Ended September 30, 2018	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
Impaired loans with related allowance:
Home equity lines and loans	$	567	$	567	$	19	$	572	$	17	$	—
Residential mortgage	1,699		1,699		228		1,709		60		—
Commercial and industrial	25		25		12		29		1		—
Consumer	58		58		19		58		1		—
Total	$	2,349	$	2,349	$	278	$	2,368	$	79	$	—

Impaired loans without related allowance*:
Commercial mortgage	$	735	$	793	$	—	$	825	$	6	$	—
Home equity lines and loans	2,035		2,096		—		2,086		10		—
Residential mortgage	4,242		4,328		—		4,228		91		—
Construction	291		291				239		5		—
Commercial and industrial	1,733		2,665		—		2,236		56		—
Consumer	86		86				88		3		—
Total	$	9,122	$	10,259	$	—	$	9,702	$	171	$	—
Grand total	$	11,471	$	12,608	$	278	$	12,070	$	250	$	—

*The table above does not include the recorded investment of $1.4 million of impaired leases without a related Allowance.

**Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.



As of and for the Three Months Ended September 30, 2017	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
Impaired loans with related allowance:
Home equity lines and loans	$	21	$	21	$	3	$	21	$	—	$	—
Residential mortgage	1,770		1,770		116		1,776		23		—
Consumer	27		27		4		28		—		—
Total	$	1,818	$	1,818	$	123	$	1,825	$	23	$	—

Impaired loans without related allowance*:
Commercial mortgage	$	1,449	$	1,485	$	—	$	1,451	$	15	$	—
Home equity lines and loans	633		694		—		655		1		—
Residential mortgage	4,688		5,015		—		4,243		43		—
Commercial and industrial	1,940		2,796		—		2,605		2		—
Total	$	8,710	$	9,990	$	—	$	8,954	$	61	$	—
Grand total	$	10,528	$	11,808	$	123	$	10,779	$	84	$	—

*The table above does not include the recorded investment of $270 thousand of impaired leases without a related Allowance.

**Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.



As of and for the Nine Months Ended September 30, 2017	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)	Recorded Investment**		Principal Balance		Related Allowance		Average Principal Balance		Interest Income Recognized		Cash-Basis Interest Income Recognized
Impaired loans with related allowance:
Home equity lines and loans	$	21	$	21	$	3	$	21	$	1	$	—
Residential mortgage	1,770		1,770		116		1,797		67		—
Consumer	27		27		4		28		1		—
Total	$	1,818	$	1,818	$	123	$	1,846	$	69	$	—

Impaired loans without related allowance*:
Commercial mortgage	$	1,449	$	1,485	$	—	$	1,475	$	45	$	—
Home equity lines and loans	633		694		—		669		5		—
Residential mortgage	4,688		5,015		—		4,288		118		—
Commercial and industrial	1,940		2,796		—		2,746		34		—
Total	$	8,710	$	9,990	$	—	$	9,178	$	202	$	—
Grand total	$	10,528	$	11,808	$	123	$	11,024	$	271	$	—

*The table above does not include the recorded investment of $270 thousand of impaired leases without a related Allowance.

**Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.



(dollars in thousands)	Recorded Investment ⁽²⁾		Principal Balance		Related Allowance
As of December 31, 2017	Recorded Investment ⁽²⁾		Principal Balance		Related Allowance
Impaired loans with related allowance:
Home equity lines and loans	$	577	$	577	$	19
Residential mortgage	2,436		2,435		230
Commercial and industrial	18		19		5
Consumer	27		27		4
Total	$	3,058	$	3,058	$	258
Impaired loans without related allowance⁽¹⁾:
Home equity lines and loans	$	1,585	$	1,645	$	—
Residential mortgage	5,290		5,529		—
Commercial and industrial	1,879		3,613		—
Commercial mortgage	2,128		2,218		—
Total	$	10,882	$	13,005	$	—
Grand total	$	13,940	$	16,063	$	258


⁽¹⁾	The table above does not include the recorded investment of $272 thousand of impaired leases without a related Allowance.


⁽²⁾	Recorded investment equals principal balance less partial charge-offs and interest payments on non-performing loans that have been applied to principal.

Summary of Loans Acquired

The following tables detail, for acquired loans, the outstanding principal, remaining Loan Mark, and recorded investment, by portfolio segment, as of the dates indicated:



	As of September 30, 2018
(dollars in thousands)	Outstanding Principal		Remaining Loan Mark			Recorded Investment
Commercial mortgage	$	369,894	$	(10,798	)	$	359,096
Home equity lines and loans	30,240		(2,502		)	27,738
Residential mortgage	89,302		(2,937		)	86,365
Construction	20,142		(340		)	19,802
Commercial and industrial	111,799		(7,000		)	104,799
Consumer	3,094		(118		)	2,976
Leases	29,793		(1,254		)	28,539
Total	$	654,264	$	(24,949	)	$	629,315



	As of December 31, 2017
(dollars in thousands)	Outstanding Principal		Remaining Loan Mark			Recorded Investment
Commercial mortgage	$	412,263	$	(11,213	)	$	401,050
Home equity lines and loans	37,944		(2,952		)	34,992
Residential mortgage	101,523		(3,572		)	97,951
Construction	86,081		(1,893		)	84,188
Commercial and industrial	141,960		(11,952		)	130,008
Consumer	3,051		(44		)	3,007
Leases	50,530		(3,164		)	47,366
Total	$	833,352	$	(34,790	)	$	798,562