Loans and Leases

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Loans and Leases

Loans and Leases

The loan and lease portfolio consists of loans and leases originated by the Corporation, as well as loans acquired in prior acquisitions. Certain tables in this footnote are presented with a breakdown between originated and acquired loans and leases.

A. The following table details loans and leases as of the dates indicated:

 

Loans and Leases
	June 30, 2019						December 31, 2018
(dollars in thousands)	Originated		Acquired		Total Loans and Leases		Originated		Acquired		Total Loans and Leases
Loans held for sale	$	6,333	$	—	$	6,333	$	1,749	$	—	$	1,749
Real Estate Loans:
Commercial mortgage	1,476,340		279,458		1,755,798		1,327,822		329,614		1,657,436
Home equity lines and loans	180,715		23,137		203,852		181,506		25,845		207,351
Residential mortgage	433,169		72,924		506,093		411,022		83,333		494,355
Construction	149,424		3,130		152,554		174,592		6,486		181,078
Total real estate loans	2,239,648		378,649		2,618,297		2,094,942		445,278		2,540,220
Commercial and industrial	653,904		50,263		704,167		624,643		70,941		695,584
Consumer	46,809		2,526		49,335		44,099		2,715		46,814
Leases	148,488		14,378		162,866		121,567		22,969		144,536
Total portfolio loans and leases	3,088,849		445,816		3,534,665		2,885,251		541,903		3,427,154
Total loans and leases	$	3,095,182	$	445,816	$	3,540,998	$	2,887,000	$	541,903	$	3,428,903
Loans with fixed rates	$	1,262,209	$	261,044	$	1,523,253	$	1,204,070	$	323,604	$	1,527,674
Loans with adjustable or floating rates	1,832,973		184,772		2,017,745		1,682,930		218,299		1,901,229
Total loans and leases	$	3,095,182	$	445,816	$	3,540,998	$	2,887,000	$	541,903	$	3,428,903
Net deferred loan origination fees included in the above loan table	$	183	$	—	$	183	$	2,226	$	—	$	2,226

B. The following table details the components of net investment in leases:

Components of Net Investment in Leases
	June 30, 2019									December 31, 2018
(dollars in thousands)	Originated			Acquired			Total Leases			Originated			Acquired			Total Leases
Minimum lease payments receivable	$	165,463		$	15,703		$	181,166		$	135,313		$	25,372		$	160,685
Unearned lease income	(23,170		)	(1,658		)	(24,828		)	(19,388		)	(3,005		)	(22,393		)
Initial direct costs and deferred fees	6,195			333			6,528			5,642			602			6,244
Total Leases	$	148,488		$	14,378		$	162,866		$	121,567		$	22,969		$	144,536

C. The following table details nonperforming loans and leases as of the dates indicated:  

 

Nonperforming Loans and Leases
	June 30, 2019						December 31, 2018
(dollars in thousands)	Originated		Acquired		Total Loans and Leases		Originated		Acquired		Total Loans and Leases
Commercial mortgage	$	3,324	$	2,748	$	6,072	$	435	$	2,133	$	2,568
Home equity lines and loans	49		—		49		3,590		26		3,616
Residential mortgage	695		6		701		2,813		639		3,452
Commercial and industrial	3,785		710		4,495		1,786		315		2,101
Consumer	36		24		60		45		63		108
Leases	465		337		802		392		583		975
Total non-performing loans and leases	$	8,354	$	3,825	$	12,179	$	9,061	$	3,759	$	12,820

D. Purchased Credit-Impaired Loans and Leases

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:

Purchased Credit-Impaired Loans and Leases
(dollars in thousands)	June 30, 2019		December 31, 2018
Outstanding principal balance	$	14,512	$	17,904
Carrying amount	10,845		12,304

The following table presents changes in the accretable discount on purchased credit-impaired loans, for which the Corporation applies ASC 310-30, for the six months ended June 30, 2019: 

Roll-Forward of Accretable Discount on Purchased Credit-Impaired Loans and Leases
(dollars in thousands)	Accretable Discount
Balance, December 31, 2018	$	2,697
Accretion	(493		)
Reclassifications from nonaccretable difference	87
Additions/adjustments	—
Disposals	(526		)
Balance, June 30, 2019	$	1,765

E. Age Analysis of Past Due Loans and Leases

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

Payment Status of All Portfolio Loans and Leases
	Accruing Loans and Leases
As of June 30, 2019	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)
Commercial mortgage	$	645	$	71	$	—	$	716	$	1,749,010	$	1,749,726	$	6,072	$	1,755,798
Home equity lines and loans	60		250		—		310		203,493		203,803		49		203,852
Residential mortgage	2,404		115		—		2,519		502,873		505,392		701		506,093
Construction	1,649		—		—		1,649		150,905		152,554		—		152,554
Commercial and industrial	3,072		225		—		3,297		696,375		699,672		4,495		704,167
Consumer	96		29		—		125		49,150		49,275		60		49,335
Leases	589		261		—		850		161,214		162,064		802		162,866
Total portfolio loans and leases	$	8,515	$	951	$	—	$	9,466	$	3,513,020	$	3,522,486	$	12,179	$	3,534,665

Payment Status of All Portfolio Loans and Leases
	Accruing Loans and Leases
As of December 31, 2018	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current(1)		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)
Commercial mortgage	$	821	$	251	$	—	$	1,072	$	1,653,796	$	1,654,868	$	2,568	$	1,657,436
Home equity lines and loans	92		—		—		92		203,643		203,735		3,616		207,351
Residential mortgage	2,330		218		—		2,548		488,355		490,903		3,452		494,355
Construction	—		—		—		—		181,078		181,078		—		181,078
Commercial and industrial	280		332		—		612		692,871		693,483		2,101		695,584
Consumer	35		5		—		40		46,666		46,706		108		46,814
Leases	641		460		—		1,101		142,460		143,561		975		144,536
Total portfolio loans and leases	$	4,199	$	1,266	$	—	$	5,465	$	3,408,869	$	3,414,334	$	12,820	$	3,427,154

(1) Included as “current” are $3.2 million of loans and leases as of December 31, 2018 which were 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:

Payment Status of Originated Portfolio Loans and Leases
	Accruing Loans and Leases
As of June 30, 2019	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)
Commercial mortgage	$	645	$	71	$	—	$	716	$	1,472,300	$	1,473,016	$	3,324	$	1,476,340
Home equity lines and loans	60		250		—		310		180,356		180,666		49		180,715
Residential mortgage	1,319		28		—		1,347		431,127		432,474		695		433,169
Construction	1,648		—		—		1,648		147,776		149,424		—		149,424
Commercial and industrial	3,072		—		—		3,072		647,047		650,119		3,785		653,904
Consumer	96		29		—		125		46,648		46,773		36		46,809
Leases	536		260		—		796		147,227		148,023		465		148,488
Total originated portfolio loans and leases	$	7,376	$	638	$	—	$	8,014	$	3,072,481	$	3,080,495	$	8,354	$	3,088,849

Payment Status of Originated Portfolio Loans and Leases
	Accruing Loans and Leases
As of December 31, 2018	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current(1)		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)
Commercial mortgage	$	816	$	251	$	—	$	1,067	$	1,326,320	$	1,327,387	$	435	$	1,327,822
Home equity lines and loans	25		—		—		25		177,891		177,916		3,590		181,506
Residential mortgage	1,545		—		—		1,545		406,664		408,209		2,813		411,022
Construction	—		—		—		—		174,592		174,592		—		174,592
Commercial and industrial	280		332		—		612		622,245		622,857		1,786		624,643
Consumer	35		5		—		40		44,014		44,054		45		44,099
Leases	350		233		—		583		120,592		121,175		392		121,567
Total originated portfolio loans and leases	$	3,051	$	821	$	—	$	3,872	$	2,872,318	$	2,876,190	$	9,061	$	2,885,251

(1) Included as “current” are $2.0 million of loans and leases as of December 31, 2018 which were 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:

Payment Status of Acquired Portfolio Loans and Leases
	Accruing Loans and Leases
As of June 30, 2019	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)
Commercial mortgage	$	—	$	—	$	—	$	—	$	276,710	$	276,710	$	2,748	$	279,458
Home equity lines and loans	—		—		—		—		23,137		23,137		—		23,137
Residential mortgage	1,085		87		—		1,172		71,746		72,918		6		72,924
Construction	1		—		—		1		3,129		3,130		—		3,130
Commercial and industrial	—		225		—		225		49,328		49,553		710		50,263
Consumer	—		—		—		—		2,502		2,502		24		2,526
Leases	53		1		—		54		13,987		14,041		337		14,378
Total acquired portfolio loans and leases	$	1,139	$	313	$	—	$	1,452	$	440,539	$	441,991	$	3,825	$	445,816

Payment Status of Acquired Portfolio Loans and Leases
	Accruing Loans and Leases
As of December 31, 2018	30 – 59 Days Past Due		60 – 89 Days Past Due		Over 89 Days Past Due		Total Past Due		Current(1)		Total Accruing Loans and Leases		Nonaccrual Loans and Leases		Total Loans and Leases
(dollars in thousands)
Commercial mortgage	$	5	$	—	$	—	$	5	$	327,476	$	327,481	$	2,133	$	329,614
Home equity lines and loans	67		—		—		67		25,752		25,819		26		25,845
Residential mortgage	785		218		—		1,003		81,691		82,694		639		83,333
Construction	—		—		—		—		6,486		6,486		—		6,486
Commercial and industrial	—		—		—		—		70,626		70,626		315		70,941
Consumer	—		—		—		—		2,652		2,652		63		2,715
Leases	291		227		—		518		21,868		22,386		583		22,969
Total acquired portfolio loans and leases	$	1,148	$	445	$	—	$	1,593	$	536,551	$	538,144	$	3,759	$	541,903

(1) Included as “current” are $1.2 million of loans and leases as of December 31, 2018 which were 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.

F. Allowance for Loan and Lease Losses (the “Allowance”)

The following tables detail the roll-forward of the Allowance for the three and six months ended June 30, 2019 and 2018:

Roll-Forward of Allowance for Loan and Lease Losses
(dollars in thousands)	Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Total
Balance, December 31, 2018	$	7,567		$	1,003		$	1,813		$	1,485		$	5,461		$	229		$	1,868		$	19,426
Charge-offs	(1,387		)	(314		)	(671		)	—			(426		)	(231		)	(1,192		)	(4,221		)
Recoveries	17			87			3			2			54			18			433			614
Provision for loan and lease losses	2,761			267			748			(401		)	611			237			1,140			5,363
Balance, June 30, 2019	$	8,958		$	1,043		$	1,893		$	1,086		$	5,700		$	253		$	2,249		$	21,182

Roll-Forward of Allowance for Loan and Lease Losses
(dollars in thousands)	Commercial Mortgage		Home Equity Lines and Loans			Residential Mortgage			Construction			Commercial and Industrial			Consumer			Leases			Total
Balance, March 31, 2019	$	8,241	$	1,038		$	1,891		$	1,186		$	5,888		$	328		$	2,044		$	20,616
Charge-offs	—		(267		)	(341		)	—			(21		)	(126		)	(624		)	(1,379		)
Recoveries	3		87			2			1			39			7			179			318
Provision for loan and lease losses	714		185			341			(101		)	(206		)	44			650			1,627
Balance, June 30, 2019	$	8,958	$	1,043		$	1,893		$	1,086		$	5,700		$	253		$	2,249		$	21,182

Roll-Forward of Allowance for Loan and Lease Losses
(dollars in thousands)	Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage		Construction		Commercial and Industrial			Consumer			Leases			Total
Balance, December 31, 2017	$	7,550		$	1,086		$	1,926	$	937	$	5,038		$	246		$	742		$	17,525
Charge-offs	(16		)	(225		)	—		—		(750		)	(92		)	(1,348		)	(2,431		)
Recoveries	6			1			1		2		1			3			123			137
Provision for loan and lease losses	493			71			6		219		1,383			132			1,863			4,167
Balance, June 30, 2018	$	8,033		$	933		$	1,933	$	1,158	$	5,672		$	289		$	1,380		$	19,398

Roll-Forward of Allowance for Loan and Lease Losses
(dollars in thousands)	Commercial Mortgage			Home Equity Lines and Loans			Residential Mortgage		Construction		Commercial and Industrial			Consumer			Leases			Total
Balance, March 31, 2018	$	7,174		$	1,045		$	1,898	$	844	$	5,361		$	291		$	1,049		$	17,662
Charge-offs	(16		)	(200		)	—		—		(467		)	(43		)	(751		)	(1,477		)
Recoveries	3			1			1		1		—			2			68			76
Provision for loan and lease losses	872			87			34		313		778			39			1,014			3,137
Balance, June 30, 2018	$	8,033		$	933		$	1,933	$	1,158	$	5,672		$	289		$	1,380		$	19,398

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 June 30, 2019 and December 31, 2018:

Allocation of Allowance by Impairment Evaluation Method - All Loans and Leases
As of June 30, 2019	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	153	$	264	$	—	$	—	$	43	$	—	$	460
Collectively evaluated for impairment	8,958		890		1,629		1,086		5,700		210		2,249		20,722
Purchased credit-impaired(1)	—		—		—		—		—		—		—		—
Total	$	8,958	$	1,043	$	1,893	$	1,086	$	5,700	$	253	$	2,249	$	21,182

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

Allocation of Allowance by Impairment Evaluation Method - All Loans and Leases
As of December 31, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	162	$	272	$	—	$	—	$	28	$	—	$	462
Collectively evaluated for impairment	7,567		841		1,541		1,485		5,461		201		1,868		18,964
Purchased credit-impaired(1)	—		—		—		—		—		—		—		—
Total	$	7,567	$	1,003	$	1,813	$	1,485	$	5,461	$	229	$	1,868	$	19,426

(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 June 30, 2019 and December 31, 2018:

Carrying Value of All Portfolio Loans and Leases by Impairment Evaluation Method
As of June 30, 2019	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Carrying value of loans and leases:
Individually evaluated for impairment	$	6,071	$	1,493	$	3,736	$	—	$	4,886	$	104	$	—	$	16,290
Collectively evaluated for impairment	1,742,871		201,843		502,355		150,107		698,257		49,231		162,866		3,507,530
Purchased credit-impaired(1)	6,856		516		2		2,447		1,024		—		—		10,845
Total	$	1,755,798	$	203,852	$	506,093	$	152,554	$	704,167	$	49,335	$	162,866	$	3,534,665

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

Carrying Value of All Portfolio Loans and Leases by Impairment Evaluation Method
As of December 31, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Carrying value of loans and leases:
Individually evaluated for impairment	$	7,008	$	4,998	$	6,608	$	—	$	2,629	$	134	$	—	$	21,377
Collectively evaluated for impairment	1,642,117		201,841		487,747		178,673		691,879		46,680		144,536		3,393,473
Purchased credit-impaired(1)	8,311		512		—		2,405		1,076		—		—		12,304
Total	$	1,657,436	$	207,351	$	494,355	$	181,078	$	695,584	$	46,814	$	144,536	$	3,427,154

 

(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 June 30, 2019 and December 31, 2018:

Allocation of Allowance by Impairment Evaluation Method - Originated Loans and Leases
As of June 30, 2019	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	153	$	167	$	—	$	—	$	37	$	—	$	357
Collectively evaluated for impairment	8,958		890		1,629		1,086		5,700		210		2,246		20,719
Total	$	8,958	$	1,043	$	1,796	$	1,086	$	5,700	$	247	$	2,246	$	21,076

Allocation of Allowance by Impairment Evaluation Method - Originated Loans and Leases
As of December 31, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	162	$	175	$	—	$	—	$	28	$	—	$	365
Collectively evaluated for impairment	7,567		841		1,541		1,485		5,461		201		1,868		18,964
Total	$	7,567	$	1,003	$	1,716	$	1,485	$	5,461	$	229	$	1,868	$	19,329

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 June 30, 2019 and December 31, 2018:

Carrying Value of Originated Portfolio Loans and Leases by Impairment Evaluation Method
As of June 30, 2019	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Carrying value of loans and leases:
Individually evaluated for impairment	$	3,323	$	1,493	$	2,878	$	—	$	4,176	$	61	$	—	$	11,931
Collectively evaluated for impairment	1,473,017		179,222		430,291		149,424		649,728		46,748		148,488		3,076,918
Total	$	1,476,340	$	180,715	$	433,169	$	149,424	$	653,904	$	46,809	$	148,488	$	3,088,849

Carrying Value of Originated Portfolio Loans and Leases by Impairment Evaluation Method
As of December 31, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Carrying value of loans and leases:
Individually evaluated for impairment	$	4,874	$	4,972	$	5,106	$	—	$	2,314	$	71	$	—	$	17,337
Collectively evaluated for impairment	1,322,948		176,534		405,916		174,592		622,329		44,028		121,567		2,867,914
Total	$	1,327,822	$	181,506	$	411,022	$	174,592	$	624,643	$	44,099	$	121,567	$	2,885,251

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 June 30, 2019 and December 31, 2018:

Allocation of Allowance by Impairment Evaluation Method - Acquired Loans and Leases
As of June 30, 2019	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	97	$	—	$	—	$	6	$	—	$	103
Collectively evaluated for impairment	—		—		—		—		—		—		3		3
Purchased credit-impaired(1)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	97	$	—	$	—	$	6	$	3	$	106

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

Allocation of Allowance by Impairment Evaluation Method - Acquired Loans and Leases
As of December 31, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Allowance on loans and leases:
Individually evaluated for impairment	$	—	$	—	$	97	$	—	$	—	$	—	$	—	$	97
Collectively evaluated for impairment	—		—		—		—		—		—		—		—
Purchased credit-impaired(1)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	97	$	—	$	—	$	—	$	—	$	97

(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 June 30, 2019 and December 31, 2018:

Carrying Value of Acquired Portfolio Loans and Leases by Impairment Evaluation Method
As of June 30, 2019	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Carrying value of loans and leases:
Individually evaluated for impairment	$	2,748	$	—	$	858	$	—	$	710	$	43	$	—	$	4,359
Collectively evaluated for impairment	269,854		22,621		72,064		683		48,529		2,483		14,378		430,612
Purchased credit-impaired(1)	6,856		516		2		2,447		1,024		—		—		10,845
Total	$	279,458	$	23,137	$	72,924	$	3,130	$	50,263	$	2,526	$	14,378	$	445,816

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

Carrying Value of Acquired Portfolio Loans and Leases by Impairment Evaluation Method
As of December 31, 2018	Commercial Mortgage		Home Equity Lines and Loans		Residential Mortgage		Construction		Commercial and Industrial		Consumer		Leases		Total
(dollars in thousands)
Carrying value of loans and leases:
Individually evaluated for impairment	$	2,134	$	26	$	1,502	$	—	$	315	$	63	$	—	$	4,040
Collectively evaluated for impairment	319,169		25,307		81,831		4,081		69,550		2,652		22,969		525,559
Purchased credit-impaired(1)	8,311		512		—		2,405		1,076		—		—		12,304
Total	$	329,614	$	25,845	$	83,333	$	6,486	$	70,941	$	2,715	$	22,969	$	541,903

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

As part of the process of determining the Allowance for the different segments of the loan and lease portfolio, management considers certain credit quality indicators. Periodic reviews of the individual loans are conducted by both in-house staff as well as external loan reviewers. The result of these reviews is reflected in the risk grade assigned to each loan. These internally assigned grades are as follows:

• Pass – Loans considered satisfactory with no indications of deterioration.

• Special mention - Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

• Substandard - Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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

The following tables detail the carrying value of all portfolio loans and leases by portfolio segment based on the credit quality indicators used, in part, in the determination of the Allowance as of June 30, 2019 and December 31, 2018:

Credit Risk Profile by Internally Assigned Grade - All Portfolio Loans and Leases
As of June 30, 2019
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial mortgage	$	1,725,550	$	11,036	$	19,212	$	—	$	1,755,798
Home equity loans and lines	203,287		—		565		—		203,852
Residential	505,251		—		842		—		506,093
Construction	142,959		—		9,595		—		152,554
Commercial and industrial	691,317		3,196		9,654		—		704,167
Consumer	49,097		—		238		—		49,335
Leases	162,064		—		802		—		162,866
Total	$	3,479,525	$	14,232	$	40,908	$	—	$	3,534,665

Credit Risk Profile by Internally Assigned Grade - All Portfolio Loans and Leases
As of December 31, 2018
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial mortgage	$	1,635,068	$	631	$	20,639	$	1,098	$	1,657,436
Home equity loans and lines	203,037		—		4,314		—		207,351
Residential	490,789		—		3,566		—		494,355
Construction	171,353		938		8,787		—		181,078
Commercial and industrial	684,444		2,737		8,402		1		695,584
Consumer	46,588		—		226		—		46,814
Leases	143,561		—		975		—		144,536
Total	$	3,374,840	$	4,306	$	46,909	$	1,099	$	3,427,154

The following tables detail the carrying value of originated portfolio loans and leases by portfolio segment based on the credit quality indicators used, in part, in the determination of the Allowance as of June 30, 2019 and December 31, 2018:

Credit Risk Profile by Internally Assigned Grade - Originated Portfolio Loans and Leases
As of June 30, 2019
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial mortgage	$	1,467,082	$	5,600	$	3,658	$	—	$	1,476,340
Home equity loans and lines	180,666		—		49		—		180,715
Residential	432,333		—		836		—		433,169
Construction	142,276		—		7,148		—		149,424
Commercial and industrial	643,946		2,460		7,498		—		653,904
Consumer	46,595		—		214		—		46,809
Leases	148,023		—		465		—		148,488
Total	$	3,060,921	$	8,060	$	19,868	$	—	$	3,088,849

Credit Risk Profile by Internally Assigned Grade - Originated Portfolio Loans and Leases
As of December 31, 2018
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial mortgage	$	1,321,973	$	631	$	5,218	$	—	$	1,327,822
Home equity loans and lines	177,916		—		3,590		—		181,506
Residential	408,095		—		2,927		—		411,022
Construction	167,272		938		6,382		—		174,592
Commercial and industrial	615,817		2,511		6,314		1		624,643
Consumer	43,936		—		163		—		44,099
Leases	121,175		—		392		—		121,567
Total	$	2,856,184	$	4,080	$	24,986	$	1	$	2,885,251

The following tables detail the carrying value of acquired portfolio loans and leases by portfolio segment based on the credit quality indicators used, in part, in the determination of the Allowance as of June 30, 2019 and December 31, 2018:

Credit Risk Profile by Internally Assigned Grade - Acquired Portfolio Loans and Leases
As of June 30, 2019
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial mortgage	$	258,468	$	5,436	$	15,554	$	—	$	279,458
Home equity loans and lines	22,621		—		516		—		23,137
Residential	72,918		—		6		—		72,924
Construction	683		—		2,447		—		3,130
Commercial and industrial	47,371		736		2,156		—		50,263
Consumer	2,502		—		24		—		2,526
Leases	14,041		—		337		—		14,378
Total	$	418,604	$	6,172	$	21,040	$	—	$	445,816

Credit Risk Profile by Internally Assigned Grade - Acquired Portfolio Loans and Leases
As of December 31, 2018
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial mortgage	$	313,095	$	—	$	15,421	$	1,098	$	329,614
Home equity loans and lines	25,121		—		724		—		25,845
Residential	82,694		—		639		—		83,333
Construction	4,081		—		2,405		—		6,486
Commercial and industrial	68,627		226		2,088		—		70,941
Consumer	2,652		—		63		—		2,715
Leases	22,386		—		583		—		22,969
Total	$	518,656	$	226	$	21,923	$	1,098	$	541,903

G. Troubled Debt Restructurings (“TDRs”)

The restructuring of a loan is considered a “troubled debt restructuring” if both of the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the creditor has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan, and (e) for leases, a reduced lease payment. A less common concession granted is the forgiveness of a portion of the principal.

The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower, were a concession not granted. Similarly, the determination of whether a concession has been granted is very subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender.

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

Troubled Debt Restructurings
(dollars in thousands)	June 30, 2019		December 31, 2018
TDRs included in nonperforming loans and leases	$	4,190	$	1,217
TDRs in compliance with modified terms	5,141		9,745
Total TDRs	$	9,331	$	10,962

The following tables present information regarding loan and lease modifications categorized as TDRs for the three and six months ended June 30, 2019: 

Troubled Debt Restructurings
	For the Three Months Ended June 30, 2019
(dollars in thousands)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Home equity loans and lines	1	$	64	$	64
Residential mortgages	1	40		40
Commercial and industrial	2	919		919
Leases	1	105		105
Total	5	$	1,128	$	1,128

Troubled Debt Restructurings
	For the Six Months Ended June 30, 2019
(dollars in thousands)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Home equity loans and lines	1	$	64	$	64
Residential mortgages	1	40		40
Commercial and industrial	2	919		919
Leases	2	131		131
Total	6	$	1,154	$	1,154

The following tables presents information regarding the types of loan and lease modifications made for the three and six months ended June 30, 2019:

Troubled Debt Restructurings
	Number of Contracts for the Three Months Ended June 30, 2019
	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	1	—	—	—	—
Commercial and industrial	—	—	2	—	—
Leases	—	—	—	1	—
Total	1	1	2	1	—

Troubled Debt Restructurings
	Number of Contracts for the Six Months Ended June 30, 2019
	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	1	—	—	—	—
Commercial and industrial	—	—	2	—	—
Leases	—	—	—	2	—
Total	1	1	2	2	—

H. Impaired Loans

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 six months ended June 30, 2019 and balances as of December 31, 2018 (purchased credit-impaired loans are not included in the tables):

Impaired Loans
As of and for the Three Months Ended June 30, 2019	Recorded Investment(2)		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)
Impaired loans with related allowance:
Home equity lines and loans	$	1,233	$	1,233	$	153	$	1,177	$	10	$	—
Residential mortgage	1,946		1,946		264		1,950		23		—
Consumer	78		91		43		78		1		—
Total	3,257		3,270		460		3,205		34		—
Impaired loans without related allowance(1):
Commercial mortgage	6,072		7,704		—		6,148		—		—
Home equity lines and loans	260		260		—		262		3		—
Residential mortgage	1,790		1,790		—		1,797		15		—
Commercial and industrial	4,886		5,153		—		4,916		5		—
Consumer	26		29		—		26		—		—
Total	13,034		14,936		—		13,149		23		—
Grand total	$	16,291	$	18,206	$	460	$	16,354	$	57	$	—

(1) The table above does not include the recorded investment of $1.0 million 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.

Impaired Loans
As of and for the Six Months Ended June 30, 2019	Recorded Investment(2)		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)
Impaired loans with related allowance:
Home equity lines and loans	$	1,233	$	1,233	$	153	$	1,235	$	22	$	—
Residential mortgage	1,946		1,946		264		1,956		46		—
Consumer	78		91		43		79		2		—
Total	$	3,257	$	3,270	$	460	$	3,270	$	70	$	—
Impaired loans without related allowance(1):
Commercial mortgage	$	6,072	$	7,704	$	—	$	6,870	$	20	$	—
Home equity lines and loans	260		260		—		264		5		—
Residential mortgage	1,790		1,790		—		1,807		31		—
Commercial and industrial	4,886		5,153		—		4,940		64		—
Consumer	26		29				27		—		—
Total	$	13,034	$	14,936	$	—	$	13,908	$	120	$	—
Grand total	$	16,291	$	18,206	$	460	$	17,178	$	190	$	—

(1) The table above does not include the recorded investment of $1.0 million 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.

Impaired Loans
As of and for the Three Months Ended June 30, 2018	Recorded Investment(2)		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)
Impaired loans with related allowance:
Home equity lines and loans	$	570	$	570	$	19	$	572	$	6	$	—
Residential mortgage	2,379		2,379		299		2,383		22		—
Commercial and industrial	267		362		104		314		—		—
Consumer	27		27		4		27		—		—
Total	$	3,243	$	3,338	$	426	$	3,296	$	28	$	—
Impaired loans without related allowance(1):
Commercial mortgage	$	1,011	$	1,010	$	—	$	1,022	$	—	$	—
Home equity lines and loans	2,425		2,487		—		2,450		2		—
Residential mortgage	3,223		3,265		—		3,236		19		—
Commercial and industrial	1,598		2,300		—		1,620		5		—
Total	$	8,257	$	9,062	$	—	$	8,328	$	26	$	—
Grand total	$	11,500	$	12,400	$	426	$	11,624	$	54	$	—

(1) The table above does not include the recorded investment of $2 million 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.

Impaired Loans
As of and for the Six Months Ended June 30, 2018	Recorded Investment(2)		Contractual Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash-Basis Interest Income Recognized
(dollars in thousands)
Impaired loans with related allowance:
Home equity lines and loans	$	570	$	570	$	19	$	574	$	11	$	—
Residential mortgage	2,379		2,379		299		2,387		45		—
Commercial and industrial	267		362		104		391		—		—
Consumer	27		27		4		27		1		—
Total	$	3,243	$	3,338	$	426	$	3,379	$	57	$	—
Impaired loans without related allowance(1):
Commercial mortgage	$	1,011	$	1,010	$	—	$	771	$	6	$	—
Home equity lines and loans	2,425		2,487		—		2,473		8		—
Residential mortgage	3,223		3,265		—		3,105		41		—
Commercial and industrial	1,598		2,300		—		1,569		12		—
Total	$	8,257	$	9,062	$	—	$	7,918	$	67	$	—
Grand total	$	11,500	$	12,400	$	426	$	11,297	$	124	$	—

(1) The table above does not include the recorded investment of $2 million 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.

Impaired Loans
As of December 31, 2018	Recorded Investment (2)		Contractual Principal Balance		Related Allowance
(dollars in thousands)
Impaired loans with related allowance:
Home equity lines and loans	$	1,280	$	1,280	$	162
Residential mortgage	1,966		1,966		272
Consumer	50		50		28
Total	$	3,296	$	3,296	$	462
Impaired loans without related allowance(1):
Commercial mortgage	$	7,007	$	7,264	$	—
Home equity lines and loans	3,718		3,724		—
Residential mortgage	4,641		4,728		—
Commercial and industrial	2,629		3,803		—
Consumer	83		86
Total	$	18,078	$	19,605	$	—
Grand total	$	21,374	$	22,901	$	462

(1) The table above does not include the recorded investment of $1.2 million 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.

I. Loan Mark

Loans acquired in mergers and acquisitions are recorded at fair value as of the date of the transaction. This adjustment to the acquired principal amount is referred to as the “Loan Mark.” With the exception of purchased credit impaired loans, for which the Loan Mark is accounted under ASC 310-30, the Loan Mark is amortized or accreted as an adjustment to yield over the lives of the loans.

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

Loan Mark on Acquired Loans and Leases
	As of June 30, 2019
(dollars in thousands)	Outstanding Principal		Remaining Loan Mark			Recorded Investment
Commercial mortgage	$	286,496	$	(7,038	)	$	279,458
Home equity lines and loans	25,289		(2,152		)	23,137
Residential mortgage	75,404		(2,480		)	72,924
Construction	3,345		(215		)	3,130
Commercial and industrial	52,078		(1,815		)	50,263
Consumer	2,616		(90		)	2,526
Leases	14,762		(384		)	14,378
Total	$	459,990	$	(14,174	)	$	445,816

Loan Mark on Acquired Loans and Leases
	As of December 31, 2018
(dollars in thousands)	Outstanding Principal		Remaining Loan Mark			Recorded Investment
Commercial mortgage	$	339,241	$	(9,627	)	$	329,614
Home equity lines and loans	28,212		(2,367		)	25,845
Residential mortgage	86,111		(2,778		)	83,333
Construction	6,780		(294		)	6,486
Commercial and industrial	72,948		(2,007		)	70,941
Consumer	2,828		(113		)	2,715
Leases	23,695		(726		)	22,969
Total	$	559,815	$	(17,912	)	$	541,903