Loans Receivable, Net

6 Months Ended

Jun. 30, 2019

Receivables [Abstract]

Loans Receivable, Net

Loans Receivable, Net

The Company’s loan portfolio is comprised of three segments: residential real estate, commercial, and consumer and other loans. The loan segments are further disaggregated into the following classes: residential real estate, commercial real estate, other commercial, home equity and other consumer loans. The following table presents loans receivable for each portfolio class of loans:

	At or for the Six Months ended			At or for the Year ended
(Dollars in thousands)	June 30, 2019			December 31, 2018
Residential real estate loans	$	920,715		887,742
Commercial loans
Real estate	4,959,863			4,657,561
Other commercial	2,076,605			1,911,171
Total	7,036,468			6,568,732
Consumer and other loans
Home equity	596,041			544,688
Other consumer	288,553			286,387
Total	884,594			831,075
Loans receivable	8,841,777			8,287,549
Allowance for loan and lease losses	(129,054		)	(131,239	)
Loans receivable, net	$	8,712,723		8,156,310
Net deferred origination (fees) costs included in loans receivable	$	(5,936	)	(5,685	)
Net purchase accounting (discounts) premiums included in loans receivable	$	(24,349	)	(25,172	)
Weighted-average interest rate on loans (tax-equivalent)	5.19		%	4.97	%

Allowance for Loan and Lease Losses

The ALLL is a valuation allowance for probable incurred credit losses. The following tables summarize the activity in the ALLL by loan class:

	Three Months ended June 30, 2019
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,786		10,711		72,328		36,849		5,880		4,018
Provision for loan losses	—			(105	)	(196	)	(829	)	(73	)	1,203
Charge-offs	(2,859		)	(49	)	(126	)	(358	)	(20	)	(2,306	)
Recoveries	2,127			138		441		597		14		937
Balance at end of period	$	129,054		10,695		72,447		36,259		5,801		3,852

	Three Months ended June 30, 2018
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	127,608		10,634		68,342		38,108		6,040		4,484
Provision for loan losses	4,718			258		2,774		675		8		1,003
Charge-offs	(2,604		)	(44	)	(190	)	(640	)	(7	)	(1,723	)
Recoveries	1,842			55		319		521		51		896
Balance at end of period	$	131,564		10,903		71,245		38,664		6,092		4,660

	Six Months ended June 30, 2019
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	131,239		10,631		72,448		38,160		5,811		4,189
Provision for loan losses	57			173		(344	)	(1,744	)	(9	)	1,981
Charge-offs	(6,200		)	(341	)	(409	)	(1,198	)	(28	)	(4,224	)
Recoveries	3,958			232		752		1,041		27		1,906
Balance at end of period	$	129,054		10,695		72,447		36,259		5,801		3,852

	Six Months ended June 30, 2018
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,568		10,798		68,515		39,303		6,204		4,748
Provision for loan losses	5,513			81		3,019		672		(194	)	1,935
Charge-offs	(7,611		)	(47	)	(1,223	)	(2,428	)	(19	)	(3,894	)
Recoveries	4,094			71		934		1,117		101		1,871
Balance at end of period	$	131,564		10,903		71,245		38,664		6,092		4,660

The following tables disclose the recorded investment in loans and the balance in the ALLL by loan class:

	June 30, 2019
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans receivable
Individually evaluated for impairment	$	101,981	10,782	62,939	22,150	3,221	2,889
Collectively evaluated for impairment	8,739,796		909,933	4,896,924	2,054,455	592,820	285,664
Total loans receivable	$	8,841,777	920,715	4,959,863	2,076,605	596,041	288,553
ALLL
Individually evaluated for impairment	$	108	—	38	68	—	2
Collectively evaluated for impairment	128,946		10,695	72,409	36,191	5,801	3,850
Total ALLL	$	129,054	10,695	72,447	36,259	5,801	3,852

	December 31, 2018
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans receivable
Individually evaluated for impairment	$	108,788	12,685	68,837	20,975	3,497	2,794
Collectively evaluated for impairment	8,178,761		875,057	4,588,724	1,890,196	541,191	283,593
Total loans receivable	$	8,287,549	887,742	4,657,561	1,911,171	544,688	286,387
ALLL
Individually evaluated for impairment	$	3,223	83	568	2,313	39	220
Collectively evaluated for impairment	128,016		10,548	71,880	35,847	5,772	3,969
Total ALLL	$	131,239	10,631	72,448	38,160	5,811	4,189

Substantially all of the Company’s loans receivable are with customers in the Company’s geographic market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas.

Aging Analysis

The following tables present an aging analysis of the recorded investment in loans by loan class:

	June 30, 2019
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	19,891	208	8,069	6,325	3,340	1,949
Accruing loans 60-89 days past due	18,046		845	12,675	2,136	1,484	906
Accruing loans 90 days or more past due	3,463		1,333	1,385	254	229	262
Non-accrual loans	41,195		5,744	23,517	7,836	2,513	1,585
Total past due and non-accrual loans	82,595		8,130	45,646	16,551	7,566	4,702
Current loans receivable	8,759,182		912,585	4,914,217	2,060,054	588,475	283,851
Total loans receivable	$	8,841,777	920,715	4,959,863	2,076,605	596,041	288,553

	December 31, 2018
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	24,312	5,251	9,477	4,282	3,213	2,089
Accruing loans 60-89 days past due	9,255		860	3,231	3,838	735	591
Accruing loans 90 days or more past due	2,018		788	—	492	428	310
Non-accrual loans	47,252		8,021	27,264	8,619	2,575	773
Total past due and non-accrual loans	82,837		14,920	39,972	17,231	6,951	3,763
Current loans receivable	8,204,712		872,822	4,617,589	1,893,940	537,737	282,624
Total loans receivable	$	8,287,549	887,742	4,657,561	1,911,171	544,688	286,387

Impaired Loans

Loans are designated impaired when, based upon current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement and therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. The following tables disclose information related to impaired loans by loan class:

	At or for the Three or Six Months ended June 30, 2019
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	5,638	43	5,474	100	—	21
Unpaid principal balance	5,640		43	5,474	102	—	21
Specific valuation allowance	108		—	38	68	—	2
Average balance - three months	10,850		44	5,739	5,052	—	15
Average balance - six months	13,632		681	6,941	5,791	40	179
Loans without a specific valuation allowance
Recorded balance	96,343		10,739	57,465	22,050	3,221	2,868
Unpaid principal balance	113,211		12,004	68,852	25,363	3,857	3,135
Average balance - three months	92,346		10,670	58,283	17,500	3,139	2,754
Average balance - six months	91,428		10,690	58,686	16,236	3,218	2,598
Total
Recorded balance	101,981		10,782	62,939	22,150	3,221	2,889
Unpaid principal balance	118,851		12,047	74,326	25,465	3,857	3,156
Specific valuation allowance	108		—	38	68	—	2
Average balance - three months	103,196		10,714	64,022	22,552	3,139	2,769
Average balance - six months	105,060		11,371	65,627	22,027	3,258	2,777

	At or for the Year ended December 31, 2018
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	19,197	1,957	9,345	7,268	120	507
Unpaid principal balance	19,491		2,220	9,345	7,268	120	538
Specific valuation allowance	3,223		83	568	2,313	39	220
Average balance	19,519		2,686	8,498	7,081	82	1,172
Loans without a specific valuation allowance
Recorded balance	89,591		10,728	59,492	13,707	3,377	2,287
Unpaid principal balance	107,486		11,989	71,300	17,689	3,986	2,522
Average balance	106,747		10,269	73,889	17,376	3,465	1,748
Total
Recorded balance	108,788		12,685	68,837	20,975	3,497	2,794
Unpaid principal balance	126,977		14,209	80,645	24,957	4,106	3,060
Specific valuation allowance	3,223		83	568	2,313	39	220
Average balance	126,266		12,955	82,387	24,457	3,547	2,920

Interest income recognized on impaired loans for the six months ended June 30, 2019 and 2018 was not significant.

Restructured Loans

A restructured loan is considered a troubled debt restructuring if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:

	Three Months ended June 30, 2019
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	4		1	—	—	—	3
Pre-modification recorded balance	$	388	117	—	—	—	271
Post-modification recorded balance	$	374	123	—	—	—	251
TDRs that subsequently defaulted
Number of loans	1		—	—	—	—	1
Recorded balance	$	305	—	—	—	—	305

	Three Months ended June 30, 2018
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	8		1	4	1	2	—
Pre-modification recorded balance	$	5,273	227	4,623	171	252	—
Post-modification recorded balance	$	5,159	227	4,509	171	252	—
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

	Six Months ended June 30, 2019
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	8		1	1	2	1	3
Pre-modification recorded balance	$	2,093	117	1,035	567	103	271
Post-modification recorded balance	$	2,079	123	1,035	567	103	251
TDRs that subsequently defaulted
Number of loans	1		—	—	—	—	1
Recorded balance	$	305	—	—	—	—	305

	Six Months ended June 30, 2018
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	20		3	8	7	2	—
Pre-modification recorded balance	$	21,270	666	12,901	7,451	252	—
Post-modification recorded balance	$	21,156	666	12,787	7,451	252	—
TDRs that subsequently defaulted
Number of loans	1		1	—	—	—	—
Recorded balance	$	334	334	—	—	—	—

The modifications for the TDRs that occurred during the six months ended June 30, 2019 and 2018 included one or a combination of the following: an extension of the maturity date, a reduction of the interest rate or a reduction in the principal amount.

In addition to the TDRs that occurred during the period provided in the preceding tables, the Company had TDRs with pre-modification loan balances of $2,528,000 and $1,313,000 for the six months ended June 30, 2019 and 2018, respectively, for which OREO was received in full or partial satisfaction of the loans. The majority of such TDRs were in commercial real estate for the six months ended June 30, 2019 and 2018. At June 30, 2019 and December 31, 2018, the Company had $1,437,000 and $350,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At June 30, 2019 and December 31, 2018, the Company had $2,011,000 and $698,000, respectively, of OREO secured by residential real estate properties.