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Portfolio Loans (Tables)

9 Months Ended

Sep. 30, 2021

Distributions of portfolio loans are as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Portfolio loans
Commercial	$	1,931,863	$	2,014,576
Commercial real estate		3,068,622		2,892,535
Real estate construction		430,857		461,786
Retail real estate		1,512,884		1,407,852
Retail other		206,409		37,428
Total portfolio loans	$	7,150,635	$	6,814,177

ACL		(92,802)		(101,048)

Portfolio loans, net	$	7,057,833	$	6,713,129

Summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings)

The following table is a summary of risk grades segregated by category of portfolio loans (dollars in thousands):


	As of September 30, 2021
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Portfolio loans
Commercial	$	1,718,398	$	115,108	$	62,094	$	26,033	$	10,230
Commercial real estate		2,623,243		338,270		81,525		18,964		6,620
Real estate construction		413,986		14,464		7		2,400		—
Retail real estate		1,486,172		11,724		2,008		4,498		8,482
Retail other		206,372		—		—		—		37
Total portfolio loans	$	6,448,171	$	479,566	$	145,634	$	51,895	$	25,369


	As of December 31, 2020
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Portfolio loans
Commercial	$	1,768,755	$	136,948	$	72,447	$	27,903	$	8,523
Commercial real estate		2,393,372		383,277		75,486		34,897		5,503
Real estate construction		434,681		24,481		77		2,546		1
Retail real estate		1,382,616		10,264		2,471		3,702		8,799
Retail other		37,324		—		—		—		104
Total portfolio loans	$	6,016,748	$	554,970	$	150,481	$	69,048	$	22,930

Risk grades of portfolio loans, further sorted by origination

Risk grades of portfolio loans, further sorted by origination year are as follows (dollars in thousands):


	As of September 30, 2021
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2021		2020		2019		2018		2017			Prior		loans		Total
Commercial
Pass	$	468,833	$	265,204	$	112,809	$	90,292	$	73,553	$	132,127	$	575,580	$	1,718,398
Watch		15,078		5,355		19,783		5,668		7,545		4,287		57,392		115,108
Special Mention		3,011		1,143		2,479		4,385		6,864		12,484		31,728		62,094
Substandard		3,357		3,504		3,321		1,437		1,244		5,552		7,618		26,033
Substandard non-accrual		4,305		444		1,597		—		1,821		63		2,000		10,230
Total commercial		494,584		275,649		139,989		101,782		91,027		154,513		674,318		1,931,863

Commercial real estate
Pass		655,907		690,244		463,830		289,396		257,618		245,795		20,453		2,623,243
Watch		41,596		40,404		130,282		62,312		27,226		34,572		1,878		338,270
Special Mention		27,115		7,056		7,551		18,661		10,436		10,430		276		81,525
Substandard		4,894		9,289		1,574		2,072		526		429		180		18,964
Substandard non-accrual		114		761		352		1,962		3,407		24		—		6,620
Total commercial real estate		729,627		747,753		603,588		374,403		299,213		291,250		22,787		3,068,622

Real estate construction
Pass		160,719		141,699		93,701		3,918		899		1,249		11,801		413,986
Watch		6,279		6,115		55		276		1,616		123		—		14,464
Special Mention		—		—		7		—		—		—		—		7
Substandard		—		2,400		—		—		—		—		—		2,400
Substandard non-accrual		—		—		—		—		—		—		—		—
Total real estate construction		166,999		150,214		93,763		4,193		2,516		1,372		11,801		430,857

Retail real estate
Pass		428,556		230,120		107,262		92,875		95,667		313,708		217,984		1,486,172
Watch		2,641		2,666		1,982		1,521		352		270		2,292		11,724
Special Mention		1,979		29		—		—		—		—		—		2,008
Substandard		1,630		321		14		73		166		2,210		84		4,498
Substandard non-accrual		500		145		72		546		1,369		4,582		1,268		8,482
Total retail real estate		435,305		233,281		109,330		95,015		97,553		320,771		221,629		1,512,884

Retail other
Pass		45,614		25,177		30,366		19,737		9,935		2,658		72,885		206,372
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		—		11		7		5		14		—		—		37
Total retail other		45,614		25,188		30,373		19,742		9,949		2,658		72,885		206,409

Total portfolio loans	$	1,872,128	$	1,432,087	$	977,044	$	595,136	$	500,258	$	770,563	$	1,003,419	$	7,150,635


	As of December 31, 2020
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial
Pass	$	812,536	$	158,307	$	107,565	$	93,190	$	61,847	$	79,970	$	455,340	$	1,768,755
Watch		16,544		22,247		14,954		13,724		2,577		10,943		55,959		136,948
Special Mention		6,402		2,671		2,069		7,164		6,763		13,733		33,645		72,447
Substandard		7,772		3,791		2,371		1,939		819		1,233		9,978		27,903
Substandard non-accrual		150		3,045		451		2,168		641		68		2,000		8,523
Total commercial		843,404		190,061		127,410		118,185		72,647		105,947		556,922		2,014,576

Commercial real estate
Pass		717,559		503,977		360,573		384,843		180,555		227,068		18,797		2,393,372
Watch		88,297		110,526		90,412		33,734		32,887		27,023		398		383,277
Special Mention		16,490		8,858		10,490		10,505		7,102		21,808		233		75,486
Substandard		17,445		4,166		1,491		7,812		2,111		1,377		495		34,897
Substandard non-accrual		1,091		776		821		882		286		1,647		—		5,503
Total commercial real estate		840,882		628,303		463,787		437,776		222,941		278,923		19,923		2,892,535

Real estate construction
Pass		179,232		171,663		64,025		1,468		761		1,444		16,088		434,681
Watch		18,485		3,657		337		1,838		164						24,481
Special Mention		67		10		—		—		—		—		—		77
Substandard		2,400		—		—		—		146		—		—		2,546
Substandard non-accrual		—		—		—		—		—		1		—		1
Total real estate construction		200,184		175,330		64,362		3,306		1,071		1,445		16,088		461,786

Retail real estate
Pass		319,302		162,711		135,065		136,427		140,600		257,147		231,364		1,382,616
Watch		2,715		2,053		1,396		349		579		233		2,939		10,264
Special Mention		509		—		—		—		1,962		—		—		2,471
Substandard		899		96		56		26		727		1,631		267		3,702
Substandard non-accrual		687		78		646		1,147		233		4,815		1,193		8,799
Total retail real estate		324,112		164,938		137,163		137,949		144,101		263,826		235,763		1,407,852

Retail other
Pass		8,357		9,430		5,600		2,516		691		440		10,290		37,324
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		14		7		5		15		5		57		1		104
Total retail other		8,371		9,437		5,605		2,531		696		497		10,291		37,428

Total portfolio loans	$	2,216,953	$	1,168,069	$	798,327	$	699,747	$	441,456	$	650,638	$	838,987	$	6,814,177

Summary of portfolio loans that are past due and still accruing or on a non-accrual status

An analysis of the amortized cost basis of portfolio loans that are past due and still accruing, or on a non-accrual status, is as follows (dollars in thousands):


	As of September 30, 2021
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	1,092	$	202	$	—	$	10,230
Commercial real estate		882		—		—		6,620
Real estate construction		—		—		—		—
Retail real estate		2,068		2,020		491		8,482
Retail other		182		—		—		37
Total past due and non-accrual loans	$	4,224	$	2,222	$	491	$	25,369


	As of December 31, 2020
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	243	$	—	$	—	$	8,523
Commercial real estate		—		—		—		5,503
Real estate construction		237		235		—		1
Retail real estate		6,248		400		1,305		8,799
Retail other		66		149		66		104
Total past due and non-accrual loans	$	6,794	$	784	$	1,371	$	22,930

Summary of TDR loans

A summary of TDRs is as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
TDRs
In compliance with modified terms	$	2,083	$	3,814
30 – 89 days past due		—		15
Non-performing TDRs		1,285		1,249
Total TDRs	$	3,368	$	5,078

The following tables summarize TDRs that occurred during the periods presented (dollars in thousands):

Three Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Recorded Investment

Number of

Rate

Payment

Number of

Rate

Payment

Contracts

Modification ⁽¹⁾

Contracts

Modification ⁽¹⁾

Newly designated TDRs

Commercial

—

444

—


	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
			Recorded Investment						Recorded Investment
	Number of		Rate		Payment		Number of		Rate		Payment
	Contracts		Modification ⁽¹⁾		Modification ⁽¹⁾		Contracts		Modification ⁽¹⁾		Modification ⁽¹⁾
Newly designated TDRs
Commercial		—	$	—	$	—		3	$	324	$	—
Commercial real estate		—		—		—		1		651		—
Retail real estate		1		—		167		2		—		353

(1)

TDRs may include multiple concessions; those that include an interest rate concession and payment concession are shown in the rate modification columns.

Schedule of details of impaired loans, segregated by category


	As of September 30, 2021
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Loans evaluated on an individual basis
Commercial	$	14,233	$	2,003	$	8,203	$	10,206	$	4,450	$	8,945
Commercial real estate		7,188		6,222		—		6,222		—		6,906
Real estate construction		276		276		—		276		—		338
Retail real estate		4,020		3,637		25		3,662		25		4,630
Retail other		—		—		—		—		—		—
Total loans evaluated individually	$	25,717	$	12,138	$	8,228	$	20,366	$	4,475	$	20,819


	As of December 31, 2020
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Loans evaluated on an individual basis
Commercial	$	16,771	$	4,001	$	4,371	$	8,372	$	1,600	$	7,920
Commercial real estate		7,406		6,067		—		6,067		—		9,349
Real estate construction		292		292		—		292		—		581
Retail real estate		5,873		5,490		25		5,515		25		7,439
Retail other		—		—		—		—		—		10
Total loans evaluated individually	$	30,342	$	15,850	$	4,396	$	20,246	$	1,625	$	25,299

Schedule of activity on the allowance for loan losses

The following tables detail activity in the ACL. Allocation of a portion of the ACL to one category does not preclude its availability to absorb losses in other categories (dollars in thousands):


	As of and for the Three Months Ended September 30, 2021
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL beginning balance	$	24,356	$	39,974	$	7,599	$	20,505	$	2,976	$	95,410
Provision for credit losses		657		(25)		(1,503)		(1,155)		157		(1,869)
Charged-off		(764)		(191)		—		(155)		(98)		(1,208)
Recoveries		157		73		25		157		57		469
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802


	As of and for the Nine Months Ended September 30, 2021
			Commercial		Real Estate		Retail
	Commercial		Real Estate		Construction		Real Estate		Retail Other		Total
ACL beginning balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048
Day 1 PCD ⁽¹⁾		3,546		336		—		129		167		4,178
Provision for credit losses		(1,428)		(6,109)		(2,082)		(3,028)		2,282		(10,365)
Charged-off		(2,026)		(812)		(209)		(315)		(349)		(3,711)
Recoveries		448		186		219		574		225		1,652
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

(1)

The Day 1 PCD is attributable to the CAC acquisition.


	As of and for the Three Months Ended September 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL beginning balance	$	24,146	$	42,680	$	7,792	$	20,405	$	1,023	$	96,046
Provision for credit losses		2,593		3,703		(381)		(383)		17		5,549
Charged-off		(2,500)		(569)		(18)		(139)		(171)		(3,397)
Recoveries		124		103		26		301		89		643
ACL ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841


	As of and for the Nine Months Ended September 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance, prior to adoption of ASC 326-30	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748
Adoption of ASC 326-30		715		9,306		2,954		3,292		566		16,833
Provision for credit losses		10,739		17,090		1,082		6,635		110		35,656
Charged-off		(5,682)		(1,833)		(18)		(1,139)		(575)		(9,247)
Recoveries		300		164		197		901		289		1,851
ACL ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841

Schedule of allowance for loan losses and recorded investments in portfolio loans, by category

The following table presents the ACL and amortized cost of portfolio loans by category (dollars in thousands):


	As of September 30, 2021
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL
Ending balance attributed to:
Loans individually evaluated for impairment	$	4,450	$	—	$	—	$	25	$	—	$	4,475
Loans collectively evaluated for impairment		19,956		39,831		6,121		19,327		3,092		88,327
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

Loans
Loans individually evaluated for impairment	$	10,206	$	6,222	$	276	$	3,662	$	—	$	20,366
Loans collectively evaluated for impairment		1,921,657		3,062,400		430,581		1,509,222		206,409		7,130,269
Loans ending balance	$	1,931,863	$	3,068,622	$	430,857	$	1,512,884	$	206,409	$	7,150,635


	As of December 31, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL
Ending balance attributed to:
Loans individually evaluated for impairment	$	1,600	$	—	$	—	$	25	$	—	$	1,625
Loans collectively evaluated for impairment		22,266		46,230		8,193		21,967		767		99,423
ACL ending balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048

Loans
Loans individually evaluated for impairment	$	8,372	$	6,067	$	292	$	5,515	$	—	$	20,246
Loans collectively evaluated for impairment		2,006,204		2,886,468		461,494		1,402,337		37,428		6,793,931
Loans ending balance	$	2,014,576	$	2,892,535	$	461,786	$	1,407,852	$	37,428	$	6,814,177