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Loans and Leases and the Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2021
Loans And Leases And Allowance For Loan And Lease Losses [Abstract] |
Loans and Leases and the Allowance for Credit Losses | Note 4. Loans and Leases and the Allowance for Credit Losses Loans and Leases The Company’s loan and lease portfolio was comprised of the following as of September 30, 2021, and December 31, 2020:
(dollars in thousands) |  | September 30, 2021 |  |  | December 31, 2020 |
Commercial |  |  |  |  |  |  |  |
Commercial and Industrial |  | $ | 1,325,446 |  |  | $ | 1,357,610 |
PPP 1 |  |  | 268,480 |  |  |  | 517,683 |
Commercial Mortgage |  |  | 2,994,520 |  |  |  | 2,854,829 |
Construction |  |  | 296,052 |  |  |  | 259,798 |
Lease Financing |  |  | 107,526 |  |  |  | 110,766 |
Total Commercial |  |  | 4,992,024 |  |  |  | 5,100,686 |
Consumer |  |  |  |  |  |  |  |
Residential Mortgage |  |  | 4,272,540 |  |  |  | 4,130,513 |
Home Equity |  |  | 1,680,229 |  |  |  | 1,604,538 |
Automobile |  |  | 727,234 |  |  |  | 708,800 |
Other 2 |  |  | 400,723 |  |  |  | 395,483 |
Total Consumer |  |  | 7,080,726 |  |  |  | 6,839,334 |
Total Loans and Leases |  | $ | 12,072,750 |  |  | $ | 11,940,020 |
1 | The PPP amounts presented, which are reported net of deferred costs and fees, were previously included as a component of the Commercial and Industrial loan class.
2 | Comprised of other revolving credit, installment, and lease financing.
The majority of the Company’s lending activity is with customers located in the State of Hawaii. A substantial portion of the Company’s real estate loans are secured by real estate in Hawaii. Net gains related to sales of residential mortgage loans, recorded as a component of mortgage banking income were $1.2 million and $3.4 million for the three months ended September 30, 2021, and September 30, 2020, respectively, and $5.9 million and $9.0 million for the nine months ended September 30, 2021, and September 30, 2020, respectively. The Company elected to exclude AIR from the amortized cost basis of loans disclosed throughout this footnote. As of September 30, 2021, and December 31, 2020, AIR for loans totaled $29.9 million and $35.9 million, respectively, and is included in the “accrued interest receivable” line item on the Company’s consolidated statements of condition. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was passed by Congress and signed into law on March 27, 2020. The CARES Act established the PPP, which provides loans to small businesses who were affected by economic conditions as a result of COVID-19 to provide cash-flow assistance to employers who maintain their eligible costs during the COVID-19 emergency. PPP loans carry an interest rate of one percent, and a maturity of two or five years. These loans are fully guaranteed by the Small Business Administration (“SBA”) and may be eligible for forgiveness by the SBA to the extent that the proceeds are used to cover eligible costs over a period of up to 24 weeks after the loan is made as long as certain conditions are met regarding employee retention and compensation levels. PPP loans deemed eligible for forgiveness by the SBA will be repaid by the SBA to the Company. The SBA pays the Company fees for processing PPP loans. These processing fees are accounted for as loan origination fees and recognized over the contractual loan term as a yield adjustment on the loans. Allowance for Credit Losses (the “Allowance”) The following presents by portfolio segment, the activity in the Allowance for the three and nine months ended September 30, 2021, and September 30, 2020.
(dollars in thousands) |  | Commercial |  |  | Consumer |  |  | Total |
Three Months Ended September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Credit Losses: |  |  |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period |  | $ | 78,639 |  |  | $ | 101,746 |  |  | $ | 180,385 |
Loans and Leases Charged-Off |  |  | (196 | ) |  |  | (3,249 | ) |  |  | (3,445 | )
Recoveries on Loans and Leases Previously Charged-Off |  |  | 118 |  |  |  | 2,134 |  |  |  | 2,252 |
Net Loans and Leases Recovered (Charged-Off) |  |  | (78 | ) |  |  | (1,115 | ) |  |  | (1,193 | )
Provision for Credit Losses |  |  | (9,894 | ) |  |  | (1,378 | ) |  |  | (11,272 | )
Balance at End of Period |  | $ | 68,667 |  |  | $ | 99,253 |  |  | $ | 167,920 |
Nine Months Ended September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Credit Losses: |  |  |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period |  | $ | 84,847 |  |  | $ | 131,405 |  |  | $ | 216,252 |
Loans and Leases Charged-Off |  |  | (900 | ) |  |  | (13,145 | ) |  |  | (14,045 | )
Recoveries on Loans and Leases Previously Charged-Off |  |  | 374 |  |  |  | 8,378 |  |  |  | 8,752 |
Net Loans and Leases Recovered (Charged-Off) |  |  | (526 | ) |  |  | (4,767 | ) |  |  | (5,293 | )
Provision for Credit Losses |  |  | (15,654 | ) |  |  | (27,385 | ) |  |  | (43,039 | )
Balance at End of Period |  | $ | 68,667 |  |  | $ | 99,253 |  |  | $ | 167,920 |
Three Months Ended September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Credit Losses: |  |  |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period |  | $ | 72,522 |  |  | $ | 100,917 |  |  | $ | 173,439 |
Loans and Leases Charged-Off |  |  | (171 | ) |  |  | (2,176 | ) |  |  | (2,347 | )
Recoveries on Loans and Leases Previously Charged-Off |  |  | 231 |  |  |  | 3,573 |  |  |  | 3,804 |
Net Loans and Leases Recovered (Charged-Off) |  |  | 60 |  |  |  | 1,397 |  |  |  | 1,457 |
Provision for Credit Losses |  |  | 7,685 |  |  |  | 20,915 |  |  |  | 28,600 |
Balance at End of Period |  | $ | 80,267 |  |  | $ | 123,229 |  |  | $ | 203,496 |
Nine Months Ended September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Credit Losses: |  |  |  |  |  |  |  |  |  |  |  |
Balance at Beginning of Period (December 31, 2020) |  | $ | 73,801 |  |  | $ | 36,226 |  |  | $ | 110,027 |
CECL Adoption (Day 1) Impact |  |  | (18,789 | ) |  |  | 17,052 |  |  |  | (1,737 | )
Balance at Beginning of Period (January 1, 2020) |  |  | 55,012 |  |  |  | 53,278 |  |  |  | 108,290 |
Loans and Leases Charged-Off |  |  | (1,520 | ) |  |  | (16,287 | ) |  |  | (17,807 | )
Recoveries on Loans and Leases Previously Charged-Off |  |  | 2,084 |  |  |  | 8,329 |  |  |  | 10,413 |
Net Loans and Leases Recovered (Charged-Off) |  |  | 564 |  |  |  | (7,958 | ) |  |  | (7,394 | )
Provision for Credit Losses |  |  | 24,691 |  |  |  | 77,909 |  |  |  | 102,600 |
Balance at End of Period |  | $ | 80,267 |  |  | $ | 123,229 |  |  | $ | 203,496 |
Credit Quality Indicators The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company uses an internal credit risk rating system that categorizes loans and leases into pass, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans and leases that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans and leases to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans and leases that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk-rated and monitored collectively. These are typically loans and leases to individuals in the classes which comprise the consumer portfolio segment. The following are the definitions of the Company’s credit quality indicators:
| Pass: | Loans and leases in all classes within the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan or lease agreement. Residential mortgage loans that are past due 90 days or more as to principal or interest may be considered Pass if the current loan-to-value ratio is 60% or less. Home equity loans that are past due 90 days or more as to principal or interest may be considered Pass if the first mortgage is with the Company and the current combined loan-to-value ratio is 60% or less.
| Special Mention: | Loans and leases in all classes within the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease. The Special Mention credit quality indicator is not used for the consumer portfolio segment.
| Classified: | Loans and leases in the classes within the commercial portfolio segment that are inadequately protected by the sound worth and paying capacity of the borrower or of the collateral pledged, if any. Classified loans and leases are also those in the classes within the consumer portfolio segment that are past due 90 days or more as to principal or interest. Residential mortgage and home equity loans may be current as to principal and interest, but may be considered Classified for a period of generally up to six months following a loan modification. Following a period of demonstrated performance in accordance with the modified contractual terms, the loan may be removed from Classified status.
For pass rated credits, risk ratings are certified at a minimum annually. For special mention or classified credits, risk ratings are reviewed for appropriateness on an ongoing basis, monthly, or at a minimum, quarterly. The following presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of September 30, 2021.
|  | Term Loans by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) | YTD September 30, 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | Prior |  |  | Revolving Loans |  |  | Revolving Loans Converted to Term Loans |  |  | Total Loans and Leases |
September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 335,503 |  |  | $ | 341,306 |  |  | $ | 91,475 |  |  | $ | 80,521 |  |  | $ | 31,948 |  |  | $ | 89,088 |  |  | $ | 257,097 |  |  | $ | 589 |  |  | $ | 1,227,527 |
Special Mention |  |  | 2,008 |  |  |  | 33,200 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 153 |  |  |  | 25,343 |  |  |  | 26 |  |  |  | 60,730 |
Classified |  |  | 188 |  |  |  | 2,024 |  |  |  | 88 |  |  |  | 2,055 |  |  |  | 573 |  |  |  | 18,409 |  |  |  | 13,785 |  |  |  | 67 |  |  |  | 37,189 |
Total Commercial and Industrial |  | $ | 337,699 |  |  | $ | 376,530 |  |  | $ | 91,563 |  |  | $ | 82,576 |  |  | $ | 32,521 |  |  | $ | 107,650 |  |  | $ | 296,225 |  |  | $ | 682 |  |  | $ | 1,325,446 |
PPP |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 196,837 |  |  | $ | 71,643 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 268,480 |
Total PPP |  | $ | 196,837 |  |  | $ | 71,643 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 268,480 |
Commercial Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 608,445 |  |  | $ | 774,572 |  |  | $ | 362,497 |  |  | $ | 264,407 |  |  | $ | 196,531 |  |  | $ | 554,832 |  |  | $ | 61,212 |  |  | $ | - |  |  | $ | 2,822,496 |
Special Mention |  |  | 39,129 |  |  |  | 69,618 |  |  |  | - |  |  |  | 30,286 |  |  |  | - |  |  |  | 6,122 |  |  |  | - |  |  |  | - |  |  |  | 145,155 |
Classified |  |  | 1,589 |  |  |  | 10,566 |  |  |  | 644 |  |  |  | - |  |  |  | 4,784 |  |  |  | 9,286 |  |  |  | - |  |  |  | - |  |  |  | 26,869 |
Total Commercial Mortgage |  | $ | 649,163 |  |  | $ | 854,756 |  |  | $ | 363,141 |  |  | $ | 294,693 |  |  | $ | 201,315 |  |  | $ | 570,240 |  |  | $ | 61,212 |  |  | $ | - |  |  | $ | 2,994,520 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 101,403 |  |  | $ | 118,076 |  |  | $ | 61,403 |  |  | $ | - |  |  | $ | 894 |  |  | $ | - |  |  | $ | 14,276 |  |  | $ | - |  |  | $ | 296,052 |
Total Construction |  | $ | 101,403 |  |  | $ | 118,076 |  |  | $ | 61,403 |  |  | $ | - |  |  | $ | 894 |  |  | $ | - |  |  | $ | 14,276 |  |  | $ | - |  |  | $ | 296,052 |
Lease Financing |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 18,997 |  |  | $ | 15,935 |  |  | $ | 16,836 |  |  | $ | 10,749 |  |  | $ | 2,586 |  |  | $ | 41,531 |  |  | $ | - |  |  | $ | - |  |  | $ | 106,634 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 892 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 892 |
Total Lease Financing |  | $ | 18,997 |  |  | $ | 15,935 |  |  | $ | 16,836 |  |  | $ | 11,641 |  |  | $ | 2,586 |  |  | $ | 41,531 |  |  | $ | - |  |  | $ | - |  |  | $ | 107,526 |
Total Commercial |  | $ | 1,304,099 |  |  | $ | 1,436,940 |  |  | $ | 532,943 |  |  | $ | 388,910 |  |  | $ | 237,316 |  |  | $ | 719,421 |  |  | $ | 371,713 |  |  | $ | 682 |  |  | $ | 4,992,024 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,120,627 |  |  | $ | 1,173,498 |  |  | $ | 403,404 |  |  | $ | 201,297 |  |  | $ | 285,312 |  |  | $ | 1,083,359 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,267,497 |
Classified |  |  | - |  |  |  | - |  |  |  | 294 |  |  |  | - |  |  |  | 2,281 |  |  |  | 2,468 |  |  |  | - |  |  |  | - |  |  |  | 5,043 |
Total Residential Mortgage |  | $ | 1,120,627 |  |  | $ | 1,173,498 |  |  | $ | 403,698 |  |  | $ | 201,297 |  |  | $ | 287,593 |  |  | $ | 1,085,827 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,272,540 |
Home Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 3,282 |  |  | $ | 1,636,803 |  |  | $ | 34,308 |  |  | $ | 1,674,393 |
Classified |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 113 |  |  |  | 4,920 |  |  |  | 803 |  |  |  | 5,836 |
Total Home Equity |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 3,395 |  |  | $ | 1,641,723 |  |  | $ | 35,111 |  |  | $ | 1,680,229 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 233,401 |  |  | $ | 166,682 |  |  | $ | 155,905 |  |  | $ | 105,933 |  |  | $ | 40,967 |  |  | $ | 23,952 |  |  | $ | - |  |  | $ | - |  |  | $ | 726,840 |
Classified |  |  | 26 |  |  |  | 53 |  |  |  | 87 |  |  |  | 55 |  |  |  | 17 |  |  |  | 156 |  |  |  | - |  |  |  | - |  |  |  | 394 |
Total Automobile |  | $ | 233,427 |  |  | $ | 166,735 |  |  | $ | 155,992 |  |  | $ | 105,988 |  |  | $ | 40,984 |  |  | $ | 24,108 |  |  | $ | - |  |  | $ | - |  |  | $ | 727,234 |
Other1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 127,788 |  |  | $ | 54,794 |  |  | $ | 105,858 |  |  | $ | 55,663 |  |  | $ | 21,442 |  |  | $ | 6,949 |  |  | $ | 26,151 |  |  | $ | 1,485 |  |  | $ | 400,130 |
Classified |  |  | - |  |  |  | 93 |  |  |  | 244 |  |  |  | 95 |  |  |  | 78 |  |  |  | 10 |  |  |  | 70 |  |  |  | 3 |  |  |  | 593 |
Total Other |  | $ | 127,788 |  |  | $ | 54,887 |  |  | $ | 106,102 |  |  | $ | 55,758 |  |  | $ | 21,520 |  |  | $ | 6,959 |  |  | $ | 26,221 |  |  | $ | 1,488 |  |  | $ | 400,723 |
Total Consumer |  | $ | 1,481,842 |  |  | $ | 1,395,120 |  |  | $ | 665,792 |  |  | $ | 363,043 |  |  | $ | 350,097 |  |  | $ | 1,120,289 |  |  | $ | 1,667,944 |  |  | $ | 36,599 |  |  | $ | 7,080,726 |
Total Loans and Leases |  | $ | 2,785,941 |  |  | $ | 2,832,060 |  |  | $ | 1,198,735 |  |  | $ | 751,953 |  |  | $ | 587,413 |  |  | $ | 1,839,710 |  |  | $ | 2,039,657 |  |  | $ | 37,281 |  |  | $ | 12,072,750 |
1 | Comprised of other revolving credit, installment, and lease financing.
For the nine months ended September 30, 2021, and September 30, 2020, $2.5 million and $1.3 million revolving loans, respectively, were converted to term loans. The following presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of December 31, 2020.
|  | Term Loans by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | 2016 |  |  | Prior |  |  | Revolving Loans |  |  | Revolving Loans Converted to Term Loans |  |  | Total Loans and Leases |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 426,780 |  |  | $ | 149,024 |  |  | $ | 149,468 |  |  | $ | 49,385 |  |  | $ | 52,354 |  |  | $ | 68,269 |  |  | $ | 342,339 |  |  | $ | 847 |  |  | $ | 1,238,466 |
Special Mention |  |  | 11,702 |  |  |  | 42 |  |  |  | - |  |  |  | - |  |  |  | 110 |  |  |  | 95 |  |  |  | 32,319 |  |  |  | 52 |  |  |  | 44,320 |
Classified |  |  | 32,208 |  |  |  | 1,734 |  |  |  | 2,266 |  |  |  | 777 |  |  |  | 19 |  |  |  | 19,166 |  |  |  | 18,529 |  |  |  | 125 |  |  |  | 74,824 |
Total Commercial and Industrial |  | $ | 470,690 |  |  | $ | 150,800 |  |  | $ | 151,734 |  |  | $ | 50,162 |  |  | $ | 52,483 |  |  | $ | 87,530 |  |  | $ | 393,187 |  |  | $ | 1,024 |  |  | $ | 1,357,610 |
PPP |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 517,683 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 517,683 |
Total PPP |  | $ | 517,683 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 517,683 |
Commercial Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 847,676 |  |  | $ | 458,472 |  |  | $ | 350,363 |  |  | $ | 245,157 |  |  | $ | 267,860 |  |  | $ | 425,157 |  |  | $ | 76,869 |  |  | $ | - |  |  | $ | 2,671,554 |
Special Mention |  |  | 66,523 |  |  |  | 28,418 |  |  |  | 291 |  |  |  | 7,117 |  |  |  | 8,665 |  |  |  | 5,035 |  |  |  | - |  |  |  | - |  |  |  | 116,049 |
Classified |  |  | 49,640 |  |  |  | 655 |  |  |  | 2,783 |  |  |  | 274 |  |  |  | 4,742 |  |  |  | 9,132 |  |  |  | - |  |  |  | - |  |  |  | 67,226 |
Total Commercial Mortgage |  | $ | 963,839 |  |  | $ | 487,545 |  |  | $ | 353,437 |  |  | $ | 252,548 |  |  | $ | 281,267 |  |  | $ | 439,324 |  |  | $ | 76,869 |  |  | $ | - |  |  | $ | 2,854,829 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 106,508 |  |  | $ | 105,731 |  |  | $ | 11,275 |  |  | $ | 8,133 |  |  | $ | - |  |  | $ | - |  |  | $ | 28,151 |  |  | $ | - |  |  | $ | 259,798 |
Total Construction |  | $ | 106,508 |  |  | $ | 105,731 |  |  | $ | 11,275 |  |  | $ | 8,133 |  |  | $ | - |  |  | $ | - |  |  | $ | 28,151 |  |  | $ | - |  |  | $ | 259,798 |
Lease Financing |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 19,906 |  |  | $ | 20,132 |  |  | $ | 13,785 |  |  | $ | 4,202 |  |  | $ | 9,657 |  |  | $ | 41,755 |  |  | $ | - |  |  | $ | - |  |  | $ | 109,437 |
Classified |  |  | 33 |  |  |  | 67 |  |  |  | 1,092 |  |  |  | 42 |  |  |  | 95 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,329 |
Total Lease Financing |  | $ | 19,939 |  |  | $ | 20,199 |  |  | $ | 14,877 |  |  | $ | 4,244 |  |  | $ | 9,752 |  |  | $ | 41,755 |  |  | $ | - |  |  | $ | - |  |  | $ | 110,766 |
Total Commercial |  | $ | 2,078,659 |  |  | $ | 764,275 |  |  | $ | 531,323 |  |  | $ | 315,087 |  |  | $ | 343,502 |  |  | $ | 568,609 |  |  | $ | 498,207 |  |  | $ | 1,024 |  |  | $ | 5,100,686 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,300,831 |  |  | $ | 576,452 |  |  | $ | 295,522 |  |  | $ | 454,165 |  |  | $ | 545,798 |  |  | $ | 954,120 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,126,888 |
Classified |  |  | - |  |  |  | 294 |  |  |  | - |  |  |  | 1,032 |  |  |  | - |  |  |  | 2,299 |  |  |  | - |  |  |  | - |  |  |  | 3,625 |
Total Residential Mortgage |  | $ | 1,300,831 |  |  | $ | 576,746 |  |  | $ | 295,522 |  |  | $ | 455,197 |  |  | $ | 545,798 |  |  | $ | 956,419 |  |  | $ | - |  |  | $ | - |  |  | $ | 4,130,513 |
Home Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 4,449 |  |  | $ | 1,556,671 |  |  | $ | 37,559 |  |  | $ | 1,598,679 |
Classified |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 88 |  |  |  | 4,693 |  |  |  | 1,078 |  |  |  | 5,859 |
Total Home Equity |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 4,537 |  |  | $ | 1,561,364 |  |  | $ | 38,637 |  |  | $ | 1,604,538 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 219,218 |  |  | $ | 213,914 |  |  | $ | 158,216 |  |  | $ | 68,776 |  |  | $ | 33,899 |  |  | $ | 13,850 |  |  | $ | - |  |  | $ | - |  |  | $ | 707,873 |
Classified |  |  | 101 |  |  |  | 245 |  |  |  | 171 |  |  |  | 113 |  |  |  | 161 |  |  |  | 136 |  |  |  | - |  |  |  | - |  |  |  | 927 |
Total Automobile |  | $ | 219,319 |  |  | $ | 214,159 |  |  | $ | 158,387 |  |  | $ | 68,889 |  |  | $ | 34,060 |  |  | $ | 13,986 |  |  | $ | - |  |  | $ | - |  |  | $ | 708,800 |
Other1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 71,042 |  |  | $ | 145,549 |  |  | $ | 92,993 |  |  | $ | 39,770 |  |  | $ | 9,225 |  |  | $ | 2,189 |  |  | $ | 32,070 |  |  | $ | 1,485 |  |  | $ | 394,323 |
Classified |  |  | 51 |  |  |  | 419 |  |  |  | 375 |  |  |  | 167 |  |  |  | 42 |  |  |  | 21 |  |  |  | 85 |  |  |  | - |  |  |  | 1,160 |
Total Other |  | $ | 71,093 |  |  | $ | 145,968 |  |  | $ | 93,368 |  |  | $ | 39,937 |  |  | $ | 9,267 |  |  | $ | 2,210 |  |  | $ | 32,155 |  |  | $ | 1,485 |  |  | $ | 395,483 |
Total Consumer |  | $ | 1,591,243 |  |  | $ | 936,873 |  |  | $ | 547,277 |  |  | $ | 564,023 |  |  | $ | 589,125 |  |  | $ | 977,152 |  |  | $ | 1,593,519 |  |  | $ | 40,122 |  |  | $ | 6,839,334 |
Total Loans and Leases |  | $ | 3,669,902 |  |  | $ | 1,701,148 |  |  | $ | 1,078,600 |  |  | $ | 879,110 |  |  | $ | 932,627 |  |  | $ | 1,545,761 |  |  | $ | 2,091,726 |  |  | $ | 41,146 |  |  | $ | 11,940,020 |
1 | Comprised of other revolving credit, installment, and lease financing.
Aging Analysis Loans and leases are considered to be past due once becoming 30 days delinquent. For the consumer portfolio, this generally represents two missed monthly payments. The following presents by class, an aging analysis of the Company’s loan and lease portfolio as of September 30, 2021, and December 31, 2020.
(dollars in thousands) |  | 30 - 59 Days Past Due |  |  | 60 - 89 Days Past Due |  |  | Past Due 90 Days or More |  |  | Non- Accrual |  |  | Total Past Due and Non- Accrual |  |  | Current |  |  | Total Loans and Leases |  |  | Non- Accrual Loans and Leases that are Current 2 |
As of September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  | $ | 130 |  |  | $ | 1,887 |  |  | $ | — |  |  | $ | 209 |  |  | $ | 2,226 |  |  | $ | 1,323,220 |  |  | $ | 1,325,446 |  |  | $ | 172 |
PPP |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 268,480 |  |  |  | 268,480 |  |  |  | — |
Commercial Mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8,309 |  |  |  | 8,309 |  |  |  | 2,986,211 |  |  |  | 2,994,520 |  |  |  | 8,309 |
Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 296,052 |  |  |  | 296,052 |  |  |  | — |
Lease Financing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 107,526 |  |  |  | 107,526 |  |  |  | — |
Total Commercial |  |  | 130 |  |  |  | 1,887 |  |  |  | — |  |  |  | 8,518 |  |  |  | 10,535 |  |  |  | 4,981,489 |  |  |  | 4,992,024 |  |  |  | 8,481 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  | 1,074 |  |  |  | 3,253 |  |  |  | 4,776 |  |  |  | 4,348 |  |  |  | 13,451 |  |  |  | 4,259,089 |  |  |  | 4,272,540 |  |  |  | 528 |
Home Equity |  |  | 2,219 |  |  |  | 689 |  |  |  | 2,946 |  |  |  | 5,422 |  |  |  | 11,276 |  |  |  | 1,668,953 |  |  |  | 1,680,229 |  |  |  | 1,234 |
Automobile |  |  | 6,427 |  |  |  | 1,110 |  |  |  | 395 |  |  |  | — |  |  |  | 7,932 |  |  |  | 719,302 |  |  |  | 727,234 |  |  |  | — |
Other 1 |  |  | 2,067 |  |  |  | 743 |  |  |  | 593 |  |  |  | — |  |  |  | 3,403 |  |  |  | 397,320 |  |  |  | 400,723 |  |  |  | — |
Total Consumer |  |  | 11,787 |  |  |  | 5,795 |  |  |  | 8,710 |  |  |  | 9,770 |  |  |  | 36,062 |  |  |  | 7,044,664 |  |  |  | 7,080,726 |  |  |  | 1,762 |
Total |  | $ | 11,917 |  |  | $ | 7,682 |  |  | $ | 8,710 |  |  | $ | 18,288 |  |  | $ | 46,597 |  |  | $ | 12,026,153 |  |  | $ | 12,072,750 |  |  | $ | 10,243 |
As of December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  | $ | 191 |  |  | $ | 59 |  |  | $ | — |  |  | $ | 441 |  |  | $ | 691 |  |  | $ | 1,356,919 |  |  | $ | 1,357,610 |  |  | $ | 285 |
PPP |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 517,683 |  |  |  | 517,683 |  |  |  | — |
Commercial Mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8,527 |  |  |  | 8,527 |  |  |  | 2,846,302 |  |  |  | 2,854,829 |  |  |  | 4,983 |
Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 259,798 |  |  |  | 259,798 |  |  |  | — |
Lease Financing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 110,766 |  |  |  | 110,766 |  |  |  | — |
Total Commercial |  |  | 191 |  |  |  | 59 |  |  |  | — |  |  |  | 8,968 |  |  |  | 9,218 |  |  |  | 5,091,468 |  |  |  | 5,100,686 |  |  |  | 5,268 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  | 4,049 |  |  |  | 2,083 |  |  |  | 5,274 |  |  |  | 3,223 |  |  |  | 14,629 |  |  |  | 4,115,884 |  |  |  | 4,130,513 |  |  |  | 2,100 |
Home Equity |  |  | 3,423 |  |  |  | 3,378 |  |  |  | 3,187 |  |  |  | 3,958 |  |  |  | 13,946 |  |  |  | 1,590,592 |  |  |  | 1,604,538 |  |  |  | 987 |
Automobile |  |  | 6,358 |  |  |  | 2,215 |  |  |  | 925 |  |  |  | — |  |  |  | 9,498 |  |  |  | 699,302 |  |  |  | 708,800 |  |  |  | — |
Other 1 |  |  | 2,556 |  |  |  | 1,612 |  |  |  | 1,160 |  |  |  | — |  |  |  | 5,328 |  |  |  | 390,155 |  |  |  | 395,483 |  |  |  | — |
Total Consumer |  |  | 16,386 |  |  |  | 9,288 |  |  |  | 10,546 |  |  |  | 7,181 |  |  |  | 43,401 |  |  |  | 6,795,933 |  |  |  | 6,839,334 |  |  |  | 3,087 |
Total |  | $ | 16,577 |  |  | $ | 9,347 |  |  | $ | 10,546 |  |  | $ | 16,149 |  |  | $ | 52,619 |  |  | $ | 11,887,401 |  |  | $ | 11,940,020 |  |  | $ | 8,355 |
1 | Comprised of other revolving credit, installment, and lease financing.
2 | Represents non-accrual loans that are not past due 30 days or more; however, full payment of principal and interest is still not expected.
Non-Accrual Loans and Leases The following presents the non-accrual loans and leases as of September 30, 2021, and December 31, 2020.
|  | September 30, 2021 |  |  | December 31, 2020 |
(dollars in thousands) |  | Non-accrual loans with a related ACL |  |  | Non-accrual loans without a related ACL |  |  | Total Non- accrual loans |  |  | Non-accrual loans with a related ACL |  |  | Non-accrual loans without a related ACL |  |  | Total Non- accrual loans |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  | $ | 209 |  |  | $ | — |  |  | $ | 209 |  |  | $ | 441 |  |  | $ | — |  |  | $ | 441 |
Commercial Mortgage |  |  | 4,765 |  |  |  | 3,544 |  |  |  | 8,309 |  |  |  | 8,527 |  |  |  | — |  |  |  | 8,527 |
Total Commercial |  |  | 4,974 |  |  |  | 3,544 |  |  |  | 8,518 |  |  |  | 8,968 |  |  |  | — |  |  |  | 8,968 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  | 3,989 |  |  |  | 359 |  |  |  | 4,348 |  |  |  | 3,096 |  |  |  | 127 |  |  |  | 3,223 |
Home Equity |  |  | 5,422 |  |  |  | — |  |  |  | 5,422 |  |  |  | 3,958 |  |  |  | — |  |  |  | 3,958 |
Total Consumer |  |  | 9,411 |  |  |  | 359 |  |  |  | 9,770 |  |  |  | 7,054 |  |  |  | 127 |  |  |  | 7,181 |
Total |  | $ | 14,385 |  |  | $ | 3,903 |  |  | $ | 18,288 |  |  | $ | 16,022 |  |  | $ | 127 |  |  | $ | 16,149 |
All payments received while on non-accrual status are applied against the principal balance of the loan or lease. The Company does not recognize interest income while loans or leases are on non-accrual status. Modifications A modification of a loan constitutes a troubled debt restructuring (“TDR”) when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. Loans modified in a TDR were $72.7 million as of September 30, 2021, and $72.5 million as of December 31, 2020. There were $0.2 million and $0.5 million commitments to lend additional funds on loans modified in a TDR as of September 30, 2021, and December 31, 2020, respectively. Loans modified in a TDR are typically already on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR may have the financial effect of increasing the specific Allowance associated with the loan. An Allowance for impaired commercial and consumer loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. The following presents by class, information related to loans modified in a TDR during the three and nine months ended September 30, 2021, and September 30, 2020.
|  | Loans Modified as a TDR for the Three Months Ended September 30, 2021 |  |  | Loans Modified as a TDR for the Three Months Ended September 30, 2020 |
|  |  |  |  |  | Recorded |  |  | Increase in |  |  |  |  |  |  | Recorded |  |  | Increase in |
Troubled Debt Restructurings |  |  |  |  |  | Investment |  |  | Allowance |  |  |  |  |  |  | Investment |  |  | Allowance |
(dollars in thousands) |  | Number of Contracts |  |  | (as of period end)1 |  |  | (as of period end) |  |  | Number of Contracts |  |  | (as of period end)1 |  |  | (as of period end) |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  |  | 2 |  |  | $ | 153 |  |  | $ | 2 |  |  |  | — |  |  | $ | — |  |  | $ | — |
Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 92 |  |  |  | 1 |
Total Commercial |  |  | 2 |  |  |  | 153 |  |  |  | 2 |  |  |  | 1 |  |  |  | 92 |  |  |  | 1 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  | 2 |  |  |  | 796 |  |  |  | 21 |  |  |  | — |  |  |  | — |  |  |  | — |
Home Equity |  |  | 2 |  |  |  | 779 |  |  |  | 46 |  |  |  | 2 |  |  |  | 134 |  |  |  | — |
Automobile |  |  | 71 |  |  |  | 1,632 |  |  |  | 22 |  |  |  | 12 |  |  |  | 227 |  |  |  | 4 |
Other 2 |  |  | 51 |  |  |  | 439 |  |  |  | 16 |  |  |  | 7 |  |  |  | 93 |  |  |  | 4 |
Total Consumer |  |  | 126 |  |  |  | 3,646 |  |  |  | 105 |  |  |  | 21 |  |  |  | 454 |  |  |  | 8 |
Total |  |  | 128 |  |  | $ | 3,799 |  |  | $ | 107 |  |  |  | 22 |  |  | $ | 546 |  |  | $ | 9 |
1 | The period end balances reflect all paydowns and charge-offs since the modification date. TDRs fully paid-off, charged-off, or foreclosed upon by period end are not included.
2 | Comprised of other revolving credit and installment financing.
|  | Loans Modified as a TDR for the Nine Months Ended September 30, 2021 |  |  | Loans Modified as a TDR for the Nine Months Ended September 30, 2020 |
|  |  |  |  |  | Recorded |  |  | Increase in |  |  |  |  |  |  | Recorded |  |  | Increase in |
Troubled Debt Restructurings |  |  |  |  |  | Investment |  |  | Allowance |  |  |  |  |  |  | Investment |  |  | Allowance |
(dollars in thousands) |  | Number of Contracts |  |  | (as of period end)1 |  |  | (as of period end) |  |  | Number of Contracts |  |  | (as of period end)1 |  |  | (as of period end) |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  |  | 7 |  |  | $ | 258 |  |  | $ | 4 |  |  |  | 3 |  |  | $ | 188 |  |  | $ | 3 |
Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 1,099 |  |  |  | — |
Total Commercial |  |  | 7 |  |  |  | 258 |  |  |  | 4 |  |  |  | 4 |  |  |  | 1,287 |  |  |  | 3 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  | 14 |  |  |  | 5,785 |  |  |  | 584 |  |  |  | — |  |  |  | — |  |  |  | — |
Home Equity |  |  | 9 |  |  |  | 1,488 |  |  |  | 80 |  |  |  | 2 |  |  |  | 134 |  |  |  | — |
Automobile |  |  | 331 |  |  |  | 6,902 |  |  |  | 95 |  |  |  | 81 |  |  |  | 1,346 |  |  |  | 22 |
Other 2 |  |  | 144 |  |  |  | 1,321 |  |  |  | 48 |  |  |  | 42 |  |  |  | 357 |  |  |  | 15 |
Total Consumer |  |  | 498 |  |  |  | 15,496 |  |  |  | 807 |  |  |  | 125 |  |  |  | 1,837 |  |  |  | 37 |
Total |  |  | 505 |  |  | $ | 15,754 |  |  | $ | 811 |  |  |  | 129 |  |  | $ | 3,124 |  |  | $ | 40 |
1 The period end balances reflect all paydowns and charge-offs since the modification date. TDRs fully paid-off, charged-off, or foreclosed upon by period end are not included.
2 | Comprised of other revolving credit and installment financing.
The following presents by class, all loans modified in a TDR that defaulted during the three and nine months ended September 30, 2021, and September 30, 2020, and within twelve months of their modification date. A TDR is considered to be in default once it becomes 60 days or more past due following a modification.
|  | Three Months Ended September 30, 2021 |  |  | Three Months Ended September 30, 2020 |
TDRs that Defaulted During the Period, |  |  |  |  |  | Recorded |  |  |  |  |  |  | Recorded |
Within Twelve Months of their Modification Date |  | Number of |  |  | Investment |  |  | Number of |  |  | Investment |
(dollars in thousands) |  | Contracts |  |  | (as of period end)1 |  |  | Contracts |  |  | (as of period end)1 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Automobile |  |  | 8 |  |  | $ | 157 |  |  |  | 1 |  |  | $ | 6 |
Other 2 |  |  | 5 |  |  |  | 27 |  |  |  | 0 |  |  |  | 0 |
Total Consumer |  |  | 13 |  |  |  | 184 |  |  |  | 1 |  |  |  | 6 |
Total |  |  | 13 |  |  | $ | 184 |  |  |  | 1 |  |  | $ | 6 |
|  | Nine Months Ended September 30, 2021 |  |  | Nine Months Ended September 30, 2020 |
TDRs that Defaulted During the Period, |  |  |  |  |  | Recorded |  |  |  |  |  |  | Recorded |
Within Twelve Months of their Modification Date |  | Number of |  |  | Investment |  |  | Number of |  |  | Investment |
(dollars in thousands) |  | Contracts |  |  | (as of period end)1 |  |  | Contracts |  |  | (as of period end)1 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage |  |  | 1 |  |  | $ | 528 |  |  |  | — |  |  | $ | — |
Automobile |  |  | 12 |  |  |  | 213 |  |  |  | 33 |  |  |  | 591 |
Other 2 |  |  | 12 |  |  |  | 112 |  |  |  | 6 |  |  |  | 38 |
Total Consumer |  |  | 25 |  |  |  | 853 |  |  |  | 39 |  |  |  | 629 |
Total |  |  | 25 |  |  | $ | 853 |  |  |  | 39 |  |  | $ | 629 |
1 | The period end balances reflect all paydowns and charge-offs since the modification date. TDRs fully paid-off, charged-off, or foreclosed upon by period end are not included.
2 | Comprised of other revolving credit and installment financing.
Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The specific Allowance associated with the loan may be increased, adjustments may be made in the allocation of the Allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. Modifications in response to COVID-19 The Company initially offered short-term loan modifications to assist borrowers during the COVID-19 national emergency. These modifications generally involve principal and/or interest payment deferrals for up to six months. Similar to the initial modifications granted, the additional round of loan modifications generally involve principal and/or interest payment deferrals for up to an additional six months for commercial and consumer loans, and principal-only deferrals for up to an additional 12 months for selected commercial loans. The Company generally continues to accrue and recognize interest income during the deferral period. The Company offers several repayment options such as immediate repayment, repayment over a designated time period or as a balloon payment at maturity, or by extending the loan term. These modifications generally do not involve forgiveness or interest rate reductions. Although our formal assistance programs have ended, the Company continues to work with our customers who are still being impacted by the pandemic. In addition, the Company evaluates the need to record an allowance for the related AIR. As of September 30, 2021, and December 31, 2020, the Company recorded an AIR allowance of $0.7 million and $2.7 million, respectively. The allowance was recorded as a contra-asset against AIR with the offset to provision for credit losses. In addition, the Company elected to deduct the AIR from the AIR Allowance (rather than reversing interest income) when the AIR is deemed uncollectible, which generally occurs when the related loan is placed on nonaccrual status or is charged-off. Company, as lessor, also granted short-term lease concessions on some of its sales-type finance leases for equipment and automobiles. The concessions primarily consists of six-month extension programs whereby lease payments currently due are deferred and shifted to the end of the lease term. Interest income continues to accrue, and in certain cases paid during the deferral period. Additional rounds of lease concessions were not material. In accordance with Section 4013 of the CARES Act and the joint agency statement issued by banking agencies, these COVID-19 related loan and lease modifications are not accounted for as TDRs. These loan and lease modifications totaled $130.4 million (23 loans and leases) for the commercial segment and $7.5 million (31 loans and leases) for the consumer segment as of September 30, 2021, and $311.6 million (210 loans and leases) for the commercial segment and $178.1 million (1,920 loans and leases) for the consumer segment as of December 31, 2020. Foreclosure Proceedings Consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure totaled $1.5 million as of September 30, 2021.

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- Definition Loans and Leases and Allowance for Loan and Lease Losses. + References No definition available. + Details
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- Definition The disclosure of Loans and Leases and the Allowance for Loan and Lease Losses includes: (1) balances in the entity's classes of loans and leases as of period end; (2) roll forward of the entity's Allowance for Loan and Lease Losses by portfolio segment; (3) balances in the entity's classes of loans and leases by internal credit quality indicators as of period end; (4) an aging analysis of the entity's classes of loans and leases as of period end; (5) balances of impaired loans by the entity's classes of loans as of period end; and (6) information related to the average recorded investment and interest income recognized on impaired loans for the periods presented. + References No definition available. + Details
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