XML 30 R14.htm IDEA: XBRL DOCUMENT
v3.20.2

Allowance for Credit Losses | 9 Months Ended
--- | ---
Sep. 30, 2020
Receivables [Abstract] |
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES We maintain an ACL at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) Commercial Real Estate, or CRE, 2) Commercial and Industrial, or C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer. The following are key risks within each portfolio segment: CRE—Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily, and health care. Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied. C&I—Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the company is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. Collateral for these types of loans often does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt. Commercial Construction—Loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While the risk of these loans is generally confined to the construction period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer. Business Banking—Commercial loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs. The business banking portfolio is monitored by utilizing a standard and closely managed process focusing on behavioral and performance criteria. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and business. Consumer Real Estate—Loans secured by first and second liens such as home equity loans, home equity lines of credit and 1-4 family residential mortgages, including purchase money mortgages. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the local housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt. Other Consumer—Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes auto loans, unsecured loans and lines and credit cards. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values. Management monitors various credit quality indicators for the commercial, business banking and consumer loan portfolios, including changes in risk ratings, nonperforming status and delinquency on a monthly basis. We monitor the commercial loan portfolio through an internal risk rating system. Loan risk ratings are assigned based upon the creditworthiness of the borrower and are reviewed on an ongoing basis according to our internal policies. Loans within the pass rating generally have a lower risk of loss than loans risk rated as special mention or substandard. Our risk ratings are consistent with regulatory guidance and are as follows: Pass—The loan is currently performing and is of high quality. Special Mention—A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in the strength of our credit position at some future date. Substandard—A substandard loan is not adequately protected by the net worth and/or paying capacity of the borrower or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Doubtful—Loans classified doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. The following table presents loan balances by year of origination and internally assigned risk rating for our portfolio segments as of September 30, 2020:
| Risk Rating
(dollars in thousands) | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 and Prior | Revolving | Revolving-Term | Total
Commercial Real Estate |  |  |  |  |  |  |  |  |
Pass | $ | 277,760 |  | $ | 406,883 |  | $ | 446,299 |  | $ | 289,243 |  | $ | 326,634 |  | $ | 644,888 |  | $ | 47,764 |  | — |  | $ | 2,439,471 |
Special Mention | — |  | 37,197 |  | 186 |  | 21,850 |  | 43,805 |  | 64,855 |  | 850 |  | — |  | 168,743 |
Substandard | — |  | 18,489 |  | 8,066 |  | 15,039 |  | 54,975 |  | 105,474 |  | 1,500 |  | — |  | 203,543 |
Doubtful | — |  | — |  | — |  | — |  | 341 |  | 6,129 |  | — |  | — |  | 6,470 |
Total Commercial Real Estate | 277,760 |  | 462,569 |  | 454,551 |  | 326,132 |  | 425,755 |  | 821,346 |  | 50,114 |  | — |  | 2,818,227 |
Commercial and Industrial |  |  |  |  |  |  |  |  |
Pass | 682,632 |  | 209,253 |  | 149,912 |  | 76,118 |  | 38,877 |  | 199,772 |  | 347,762 |  | — |  | 1,704,326 |
Special Mention | 3,829 |  | 20,396 |  | 3,613 |  | 968 |  | 8,563 |  | 6,998 |  | 30,552 |  | — |  | 74,919 |
Substandard | — |  | 4,861 |  | 2,519 |  | 14,704 |  | 71 |  | 11,789 |  | 2,317 |  | — |  | 36,261 |
Doubtful | — |  | 238 |  | 173 |  | 2,537 |  | 195 |  | — |  | — |  | — |  | 3,143 |
Total Commercial and Industrial | 686,461 |  | 234,748 |  | 156,217 |  | 94,327 |  | 47,706 |  | 218,559 |  | 380,631 |  | — |  | 1,818,649 |
Commercial Construction |  |  |  |  |  |  |  |  |
Pass | 102,950 |  | 223,433 |  | 79,733 |  | 15,844 |  | 9,854 |  | 9,915 |  | 11,127 |  | — |  | 452,856 |
Special Mention | — |  | — |  | 3,823 |  | — |  | — |  | 5,033 |  | 91 |  | — |  | 8,947 |
Substandard | — |  | 3,567 |  | — |  | 1,752 |  | — |  | 3,738 |  | — |  | — |  | 9,057 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total Commercial Construction | 102,950 |  | 227,000 |  | 83,556 |  | 17,596 |  | 9,854 |  | 18,686 |  | 11,218 |  | — |  | 470,860 |
Business Banking |  |  |  |  |  |  |  |  |
Pass | 97,367 |  | 163,334 |  | 133,688 |  | 93,886 |  | 81,481 |  | 289,927 |  | 104,721 |  | 336 |  | 964,740 |
Special Mention | — |  | 59 |  | 1,049 |  | 1,719 |  | 1,093 |  | 7,055 |  | 691 |  | 123 |  | 11,789 |
Substandard | 104 |  | 646 |  | 3,204 |  | 3,755 |  | 3,759 |  | 26,517 |  | 754 |  | 683 |  | 39,422 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total Business Banking | 97,471 |  | 164,039 |  | 137,941 |  | 99,360 |  | 86,333 |  | 323,499 |  | 106,166 |  | 1,142 |  | 1,015,951 |
Consumer Real Estate |  |  |  |  |  |  |  |  |
Pass | 95,412 |  | 136,136 |  | 74,500 |  | 70,027 |  | 79,784 |  | 263,696 |  | 436,392 |  | 22,546 |  | 1,178,493 |
Special Mention | — |  | — |  | — |  | — |  | 798 |  | 153 |  | — |  | — |  | 951 |
Substandard | — |  | 187 |  | 555 |  | 880 |  | 1,036 |  | 7,193 |  | 212 |  | 973 |  | 11,036 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total Consumer Real Estate | 95,412 |  | 136,323 |  | 75,055 |  | 70,907 |  | 81,618 |  | 271,042 |  | 436,604 |  | 23,519 |  | 1,190,480 |
Other consumer |  |  |  |  |  |  |  |  |
Pass | 8,703 |  | 15,078 |  | 7,953 |  | 4,270 |  | 3,039 |  | 854 |  | 33,216 |  | 641 |  | 73,754 |
Special Mention | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Substandard | — |  | 481 |  | 129 |  | 115 |  | 611 |  | 3,868 |  | 396 |  | 1,347 |  | 6,947 |
Doubtful | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total Other Consumer | 8,703 |  | 15,559 |  | 8,082 |  | 4,385 |  | 3,650 |  | 4,722 |  | 33,612 |  | 1,988 |  | 80,701 |
Total Loan Balance | $ | 1,268,757 |  | $ | 1,240,238 |  | $ | 915,402 |  | $ | 612,707 |  | $ | 654,916 |  | $ | 1,657,854 |  | $ | 1,018,345 |  | $ | 26,649 |  | $ | 7,394,868 |
We monitor the delinquent status of the commercial and consumer portfolios on a monthly basis. Loans are considered nonperforming when interest and principal are 90 days or more past due or management has determined that a material deterioration in the borrower’s financial condition exists. The risk of loss is generally highest for nonperforming loans. The following table presents loan balances by year of origination and performing and nonperforming status for our portfolio segments as of September 30, 2020:
(dollars in thousands) | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 and Prior | Revolving | Revolving-Term | Total
Commercial Real Estate |  |  |  |  |  |  |  |  |
Performing | $ | 277,760 |  | $ | 462,569 |  | $ | 454,551 |  | $ | 326,132 |  | $ | 411,947 |  | $ | 788,059 |  | $ | 50,114 |  | $ | — |  | $ | 2,771,132 |
Nonperforming | — |  | — |  | — |  | — |  | 13,808 |  | 33,287 |  | — |  | — |  | 47,095 |
Total Commercial Real Estate | 277,760 |  | 462,569 |  | 454,551 |  | 326,132 |  | 425,755 |  | 821,346 |  | 50,114 |  | — |  | 2,818,227 |
Commercial and Industrial |  |  |  |  |  |  |  |  |
Performing | 683,514 |  | 234,748 |  | 155,958 |  | 94,327 |  | 47,706 |  | 217,628 |  | 379,082 |  | — |  | 1,812,963 |
Nonperforming | 2,947 |  | — |  | 259 |  | — |  | — |  | 931 |  | 1,549 |  | — |  | 5,686 |
Total Commercial and Industrial | 686,461 |  | 234,748 |  | 156,217 |  | 94,327 |  | 47,706 |  | 218,559 |  | 380,631 |  | — |  | 1,818,649 |
Commercial Construction |  |  |  |  |  |  |  |  |
Performing | 102,950 |  | 227,000 |  | 83,556 |  | 16,555 |  | 9,854 |  | 18,223 |  | 11,218 |  | — |  | 469,356 |
Nonperforming | — |  | — |  | — |  | 1,041 |  | — |  | 463 |  | — |  | — |  | 1,504 |
Total Commercial Construction | 102,950 |  | 227,000 |  | 83,556 |  | 17,596 |  | 9,854 |  | 18,686 |  | 11,218 |  | — |  | 470,860 |
Business Banking |  |  |  |  |  |  |  |  |
Performing | 97,471 |  | 163,734 |  | 136,249 |  | 98,042 |  | 84,263 |  | 311,076 |  | 105,951 |  | 1,084 |  | 997,870 |
Nonperforming | — |  | 305 |  | 1,692 |  | 1,318 |  | 2,070 |  | 12,423 |  | 215 |  | 58 |  | 18,081 |
Total Business Banking | 97,471 |  | 164,039 |  | 137,941 |  | 99,360 |  | 86,333 |  | 323,499 |  | 106,166 |  | 1,142 |  | 1,015,951 |
Consumer Real Estate |  |  |  |  |  |  |  |  |
Performing | 94,828 |  | 136,323 |  | 74,440 |  | 69,663 |  | 80,532 |  | 265,917 |  | 436,328 |  | 22,639 |  | 1,180,670 |
Nonperforming | 584 |  | — |  | 615 |  | 1,244 |  | 1,086 |  | 5,125 |  | 276 |  | 880 |  | 9,810 |
Total Consumer Real Estate | 95,412 |  | 136,323 |  | 75,055 |  | 70,907 |  | 81,618 |  | 271,042 |  | 436,604 |  | 23,519 |  | 1,190,480 |
Other Consumer |  |  |  |  |  |  |  |  |
Performing | 8,567 |  | 15,157 |  | 8,082 |  | 4,299 |  | 3,379 |  | 4,043 |  | 33,425 |  | 1,853 |  | 78,805 |
Nonperforming | 136 |  | 402 |  | — |  | 86 |  | 271 |  | 679 |  | 187 |  | 135 |  | 1,896 |
Total Other Consumer | 8,703 |  | 15,559 |  | 8,082 |  | 4,385 |  | 3,650 |  | 4,722 |  | 33,612 |  | 1,988 |  | 80,701 |
Performing | 1,265,090 |  | 1,239,531 |  | 912,836 |  | 609,018 |  | 637,681 |  | 1,604,946 |  | 1,016,118 |  | 25,576 |  | 7,310,796 |
Nonperforming | 3,667 |  | 707 |  | 2,566 |  | 3,689 |  | 17,235 |  | 52,908 |  | 2,227 |  | 1,073 |  | 84,072 |
Total Loan Balance | $ | 1,268,757 |  | $ | 1,240,238 |  | $ | 915,402 |  | $ | 612,707 |  | $ | 654,916 |  | $ | 1,657,854 |  | $ | 1,018,345 |  | $ | 26,649 |  | $ | 7,394,868 |
The following tables present the age analysis of past due loans segregated by class of loans as of the dates presented:
| September 30, 2020(2)
(dollars in thousands) | Current |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days Past Due(1) |  | Non - performing |  | Total Past Due Loans |  | Total Loans
Commercial real estate | $ | 2,771,132 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 47,095 |  |  | $ | 47,095 |  |  | $ | 2,818,227 |
Commercial and industrial | 1,811,342 |  |  | 1,235 |  |  | — |  |  | 386 |  |  | 5,686 |  |  | 7,307 |  |  | 1,818,649 |
Commercial construction | 469,356 |  |  | — |  |  | — |  |  | — |  |  | 1,504 |  |  | 1,504 |  |  | 470,860 |
Business banking | 994,389 |  |  | 2,733 |  |  | 748 |  |  | — |  |  | 18,081 |  |  | 21,562 |  |  | 1,015,951 |
Consumer real estate | 1,177,782 |  |  | 1,723 |  |  | 1,031 |  |  | 134 |  |  | 9,810 |  |  | 12,698 |  |  | 1,190,480 |
Other consumer | 78,310 |  |  | 349 |  |  | 146 |  |  | — |  |  | 1,896 |  |  | 2,391 |  |  | 80,701 |
Total | $ | 7,302,311 |  |  | $ | 6,040 |  |  | $ | 1,925 |  |  | $ | 520 |  |  | $ | 84,072 |  |  | $ | 92,556 |  |  | $ | 7,394,868 |
(1) Represents acquired loans that were recorded at fair value at the acquisition date and remain performing at September 30, 2020. (2) We had 144 loans that were modified totaling $350.0 million under the CARES Act at September 30, 2020. These customers were not considered past due as a result of their delayed payments. Upon exiting the loan modification deferral program, the measurement of loan delinquency will resume where it left off upon entry into the program. Due to the modification program, this delinquency table may not accurately reflect the credit risk associated with these loans.
| December 31, 2019
(dollars in thousands) | Current |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days Past Due(1) |  | Non - performing |  | Total Past Due Loans |  | Total Loans
Commercial real estate | $ | 3,025,505 |  |  | $ | 7,749 |  |  | $ | 71 |  |  | $ | 911 |  |  | $ | 25,356 |  |  | $ | 34,087 |  |  | $ | 3,059,592 |
Commercial and industrial | 1,466,460 |  |  | 126 |  |  | 1,589 |  |  | 1,443 |  |  | 10,911 |  |  | 14,069 |  |  | 1,480,529 |
Commercial construction | 367,204 |  |  | 956 |  |  | 1,163 |  |  | — |  |  | 737 |  |  | 2,856 |  |  | 370,060 |
Business banking | 830,735 |  |  | 5,093 |  |  | 1,099 |  |  | — |  |  | 9,863 |  |  | 16,055 |  |  | 846,790 |
Consumer real estate | 1,283,591 |  |  | 2,620 |  |  | 1,758 |  |  | 1,175 |  |  | 6,063 |  |  | 11,616 |  |  | 1,295,207 |
Other consumer | 81,866 |  |  | 1,448 |  |  | 305 |  |  | 228 |  |  | 1,127 |  |  | 3,108 |  |  | 84,974 |
Total | $ | 7,055,361 |  |  | $ | 17,992 |  |  | $ | 5,985 |  |  | $ | 3,757 |  |  | $ | 54,057 |  |  | $ | 81,791 |  |  | $ | 7,137,152 |
(1)Represents acquired loans that were recorded at fair value at the acquisition date and remained performing at December 31, 2019. The following table presents loans on nonaccrual status and loans past due 90 days or more and still accruing by class of loan:
|  |  |  |  |  |  |  |  | September 30, 2020
| September 30, 2020 |  | For the three months ended |  | For the nine months ended
(dollars in thousands) | Beginning of Period Nonaccrual |  | End of Period Nonaccrual |  | Nonaccrual With No Related Allowance |  | Past Due 90+ Days Still Accruing |  | Interest Income Recognized on Nonaccrual(1) |  | Interest Income Recognized on Nonaccrual(1)
Commercial real estate | $ | 25,356 |  |  | $ | 47,095 |  |  | $26,996 |  |  | $ | — |  |  | $8 |  |  | $19 |
Commercial and industrial | 10,911 |  |  | 5,686 |  |  | 967 |  |  | 386 |  |  | 31 |  |  | 52 |
Commercial construction | 737 |  |  | 1,504 |  |  | 1,218 |  |  | — |  |  | — |  |  | — |
Business banking | 9,863 |  |  | 18,081 |  |  | 5,197 |  |  | — |  |  | 59 |  |  | 163 |
Consumer real estate | 6,063 |  |  | 9,810 |  |  | 398 |  |  | 134 |  |  | 90 |  |  | 262 |
Other consumer | 1,127 |  |  | 1,896 |  |  | — |  |  | — |  |  | 1 |  |  | 4 |
Total | $ | 54,057 |  |  | $ | 84,072 |  |  | $34,776 |  |  | $ | 520 |  |  | $189 |  |  | $500 |
(1) Represents only cash payments received and applied to interest on nonaccrual loans. The following table presents collateral-dependent loans by class of loan:
| September 30, 2020
| Type of Collateral
(dollars in thousands) | Real Estate |  | Blanket Lien |  | Investment/Cash |  | Other
Commercial real estate | $46,965 |  |  | $40 |  |  | $— |  |  | $— |
Commercial and industrial | 6,065 |  |  | 20,548 |  |  | — |  |  | — |
Commercial construction | 5,203 |  |  | — |  |  | — |  |  | — |
Business banking | 4,427 |  |  | 1,621 |  |  | — |  |  | 689 |
Consumer real estate | 398 |  |  | — |  |  | — |  |  | — |
Total | $63,058 |  |  | $22,209 |  |  | $— |  |  | $689 |
The following table presents activity in the ACL for the three and nine months ended September 30, 2020:
| Three Months Ended September 30, 2020
(dollars in thousands) | Commercial Real Estate |  | Commercial and Industrial |  | Commercial Construction |  | Business Banking |  | Consumer Real Estate |  | Other Consumer |  | Total Loans
Allowance for credit losses on loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 57,730 |  |  | $ | 19,164 |  |  | $ | 8,874 |  |  | $ | 14,404 |  |  | $ | 11,585 |  |  | $ | 2,852 |  |  | $ | 114,609 |
Provision for credit losses on loans | 23,839 |  |  | (4,155) |  |  | (1,617) |  |  | 2,072 |  |  | (797) |  |  | (40) |  |  | 19,302 |
Charge-offs | (10,187) |  |  | (1,196) |  |  | — |  |  | (1,748) |  |  | (252) |  |  | (284) |  |  | (13,667) |
Recoveries | 172 |  |  | 398 |  |  | 1 |  |  | 64 |  |  | 41 |  |  | 78 |  |  | 754 |
Net (Charge-offs)/Recoveries | (10,015) |  |  | (798) |  |  | 1 |  |  | (1,684) |  |  | (211) |  |  | (206) |  |  | (12,913) |
Balance at End of Period | $ | 71,554 |  |  | $ | 14,211 |  |  | $ | 7,258 |  |  | $ | 14,792 |  |  | $ | 10,577 |  |  | $ | 2,606 |  |  | $ | 120,998 |
| Nine Months Ended September 30, 2020
(dollars in thousands) | Commercial Real Estate |  | Commercial and Industrial (2) |  | Commercial Construction |  | Business Banking(1) |  | Consumer Real Estate |  | Other Consumer |  | Total Loans
Allowance for credit losses on loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 30,577 |  |  | $ | 15,681 |  |  | $ | 7,900 |  |  | $ | — |  |  | $ | 6,337 |  |  | $ | 1,729 |  |  | $ | 62,224 |
Impact of CECL adoption | 4,810 |  |  | 7,853 |  |  | (3,376) |  |  | 12,898 |  |  | 4,525 |  |  | 642 |  |  | 27,352 |
Provision for credit losses on loans | 52,185 |  |  | 62,949 |  |  | 2,712 |  |  | 4,197 |  |  | 32 |  |  | 1,489 |  |  | 123,564 |
Charge-offs | (16,229) |  |  | (72,692) |  |  | — |  |  | (2,469) |  |  | (470) |  |  | (1,556) |  |  | (93,416) |
Recoveries | 211 |  |  | 420 |  |  | 22 |  |  | 166 |  |  | 153 |  |  | 302 |  |  | 1,274 |
Net (Charge-offs)/Recoveries | (16,018) |  |  | (72,272) |  |  | 22 |  |  | (2,303) |  |  | (317) |  |  | (1,254) |  |  | (92,142) |
Balance at End of Period | $ | 71,554 |  |  | $ | 14,211 |  |  | $ | 7,258 |  |  | $ | 14,792 |  |  | $ | 10,577 |  |  | $ | 2,606 |  |  | $ | 120,998 |
(1) In connection with our adoption of ASU 2016-13, we made changes to our loan portfolio segments to align with the methodology applied in determining the allowance under CECL. Our new segmentation breaks out business banking loans from our other loan segments: CRE, C&I, commercial construction, consumer real estate and other consumer. The business banking allowance balance at the beginning of period is included in the other segments and reclassified to business banking through the impact of CECL adoption line. (2) During the three months ended June 30, 2020, we experienced a pre-tax loss of $58.7 million related to a customer fraud resulting from a check kiting scheme. The adoption of ASU 2016-13 resulted in an increase to our ACL of $27.4 million on January 1, 2020. The increase included $8.2 million for S&T legacy loans and $9.3 million for acquired loans from the DNB merger. We also recorded a day one adjustment of $9.9 million primarily related to a C&I relationship that was charged off in the first quarter of 2020. We obtained information on the relationship subsequent to filing our December 31, 2019 10-K, but before the end of the first quarter of 2020. The updated information supported a loss existed at January 1, 2020. During the three months ended June 30, 2020, we had a charge-off of $58.7 million related to a previously disclosed customer fraud resulting from a check kiting scheme. The fraud was perpetrated by a single business customer and the customer has plead guilty in an ongoing criminal investigation. The check kiting scheme resulted in a deposit account overdraft, which became a loan to us that was charged off through the ACL. The customer also had a lending relationship that was originally $15.1 million, including a $14.3 million CRE loan and a $0.8 million line of credit. We recognized a $4.2 million charge-off related to this lending relationship during the three months ended June 30, 2020 and the remaining outstanding balance of $10.9 million is a nonperforming loan at September 30, 2020. A specific reserve of $3.4 million was recognized in the three months ended September 30, 2020 based upon new liens identified against the collateral. Our qualitative reserve changed ($13.5) million and $15.8 million for the three and nine months ended September 30, 2020. Included in these amounts were ($13.3) million for the three months ended and $12.7 million for the nine months ended for the economic forecast and an allocation for our hotel portfolio and business banking portfolios due to the COVID-19 pandemic. Our forecast covers a period of two years and is driven in part by national unemployment data. The reduction in qualitative reserve for the three months ended September 30, 2020 was due to a meaningful improvement in expected unemployment levels of the forecast period. We added $2.0 million of ACL to the business banking portfolio during the three months ended September 30, 2020 due to the COVID-19 pandemic. Changes in our current conditions qualitative factors resulted in a decrease of $0.2 million and an increase of $3.1 million to the ACL for the three and nine months ended September 30, 2020. Offsetting the decrease in qualitative ACL for the three months ended September 30, 2020 was the impact of the hotel portfolio downgrades on the quantitative model. Our total hotel portfolio was $243.0 million with 95 percent of this portfolio on deferral at September 30, 2020. During the three months ended September 30, 2020, we did an extensive review of the hotel portfolio and as a result downgraded a significant amount of loans within this portfolio. As of September 30, 2020, $92.9 million of hotel loans were risk rated special mention and $126.6 million were substandard. The ACL at September 30, 2020 reflects our estimate of potential loss for the hotel loans. Our estimate will be updated in the fourth quarter when we obtain appraisals on the substandard hotel portfolio. The C&I portfolio included $550.1 million of loans originated under the PPP at September 30, 2020. The loans are 100 percent guaranteed by the SBA, therefore, we have not assigned any ACL to these loans at September 30, 2020. Prior to the adoption of ASU 326 on January 1, 2020, we calculated our allowance for loan losses using an incurred loan loss methodology. The following tables are disclosures related to the allowance for loan losses in prior periods. The following table presents the recorded investment in commercial loan classes by internally assigned risk ratings as of December 31, 2019:
| December 31, 2019
(dollars in thousands) | Commercial Real Estate | % of Total |  | Commercial and Industrial | % of Total |  | Commercial Construction | % of Total |  | Total | % of Total
Pass | $ | 3,270,438 |  | 95.7 | % |  | $ | 1,636,314 |  | 95.1 | % |  | $ | 347,304 |  | 92.5 | % |  | $ | 5,254,056 |  | 95.3 | %
Special mention | 57,285 |  | 1.7 | % |  | 36,484 |  | 2.1 | % |  | 10,109 |  | 2.7 | % |  | 103,878 |  | 1.9 | %
Substandard | 86,772 |  | 2.5 | % |  | 47,980 |  | 2.8 | % |  | 17,899 |  | 4.8 | % |  | 152,651 |  | 2.8 | %
Doubtful | 2,023 |  | 0.1 | % |  | 55 |  | — | % |  | 133 |  | — | % |  | 2,211 |  | — | %
Total | $ | 3,416,518 |  | 100.0 | % |  | $ | 1,720,833 |  | 100.0 | % |  | $ | 375,445 |  | 100.0 | % |  | $ | 5,512,796 |  | 100.0 | %
The following table presents the recorded investment in consumer loan classes by performing and nonperforming status as of December 31, 2019:
| December 31, 2019
(dollars in thousands) | Residential Mortgage | % of Total |  | Home Equity | % of Total |  | Installment and Other Consumer | % of Total |  | Consumer Construction | % of Total |  | Total | % of Total
Performing | $ | 991,066 |  | 99.2 | % |  | $ | 535,709 |  | 99.5 | % |  | $ | 78,993 |  | 99.9 | % |  | $ | 8,390 |  | 100.0 | % |  | $ | 1,614,158 |  | 99.4 | %
Nonperforming | 7,519 |  | 0.8 | % |  | 2,639 |  | 0.5 | % |  | 40 |  | 0.1 | % |  | — |  | — | % |  | 10,198 |  | 0.6 | %
Total | $ | 998,585 |  | 100.0 | % |  | $ | 538,348 |  | 100.0 | % |  | $ | 79,033 |  | 100.0 | % |  | $ | 8,390 |  | 100.0 | % |  | $ | 1,624,356 |  | 100.0 | %
The following table presents investments in loans considered to be impaired and related information on those impaired loans as of December 31, 2019:
| December 31, 2019
(dollars in thousands) | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With a related allowance recorded: |  |  |  |  |
Commercial real estate | $ | 13,011 |  |  | $ | 14,322 |  |  | $ | 2,023 |
Commercial and industrial | 10,001 |  |  | 10,001 |  |  | 55 |
Commercial construction | 489 |  |  | 489 |  |  | 113 |
Consumer real estate | — |  |  | — |  |  | — |
Other consumer | 9 |  |  | 9 |  |  | 9 |
Total with a Related Allowance Recorded | 23,510 |  |  | 24,821 |  |  | 2,200 |
Without a related allowance recorded: |  |  |  |  |
Commercial real estate | 34,909 |  |  | 40,201 |  |  | — |
Commercial and industrial | 7,605 |  |  | 10,358 |  |  | — |
Commercial construction | 1,425 |  |  | 2,935 |  |  | — |
Consumer real estate | 7,884 |  |  | 8,445 |  |  | — |
Other consumer | 4 |  |  | 11 |  |  | — |
Total without a Related Allowance Recorded | 51,827 |  |  | 61,950 |  |  | — |
Total: |  |  |  |  |
Commercial real estate | 47,920 |  |  | 54,523 |  |  | 2,023 |
Commercial and industrial | 17,606 |  |  | 20,359 |  |  | 55 |
Commercial construction | 1,914 |  |  | 3,424 |  |  | 113 |
Consumer real estate | 7,884 |  |  | 8,445 |  |  | — |
Other consumer | 13 |  |  | 20 |  |  | 9 |
Total | $ | 75,337 |  |  | $ | 86,771 |  |  | $ | 2,200 |
The following table presents average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2019:
| Three months ended |  | Nine months ended
| September 30, 2019 |  | September 30, 2019
(dollars in thousands) | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized
With a related allowance recorded: |  |  |  |  |  |  |
Commercial real estate | $ | 14,255 |  |  | $ | — |  |  | $ | 14,348 |  |  | $ | — |
Commercial and industrial | — |  |  | — |  |  | — |  |  | — |
Commercial construction | 490 |  |  | — |  |  | 490 |  |  | — |
Consumer real estate | — |  |  | — |  |  | — |  |  | — |
Other consumer | 11 |  |  | — |  |  | 13 |  |  | 1 |
Total with a Related Allowance Recorded | 14,756 |  |  | — |  |  | 14,851 |  |  | 1 |
Without a related allowance recorded: |  |  |  |  |  |  |
Commercial real estate | 39,179 |  |  | 231 |  |  | 39,788 |  |  | 712 |
Commercial and industrial | 8,008 |  |  | 116 |  |  | 6,644 |  |  | 308 |
Commercial construction | 2,318 |  |  | 34 |  |  | 2,318 |  |  | 117 |
Consumer real estate | 8,830 |  |  | 97 |  |  | 8,993 |  |  | 297 |
Other consumer | 3 |  |  | — |  |  | 4 |  |  | — |
Total without a Related Allowance Recorded | 58,338 |  |  | 478 |  |  | 57,747 |  |  | 1,434 |
Total: |  |  |  |  |  |  |
Commercial real estate | 53,434 |  |  | 231 |  |  | 54,136 |  |  | 712 |
Commercial and industrial | 8,008 |  |  | 116 |  |  | 6,644 |  |  | 308 |
Commercial construction | 2,808 |  |  | 34 |  |  | 2,808 |  |  | 117 |
Consumer real estate | 8,830 |  |  | 97 |  |  | 8,993 |  |  | 297 |
Other consumer | 14 |  |  | — |  |  | 17 |  |  | 1 |
Total | $ | 73,094 |  |  | $ | 478 |  |  | $ | 72,598 |  |  | $ | 1,435 |
The following table details activity in the allowance for loan losses for the three and nine months ended September 30, 2019:
|  |  | Three Months Ended September 30, 2019
(dollars in thousands) |  |  | Commercial Real Estate |  | Commercial and Industrial |  | Commercial Construction |  | Consumer Real Estate |  | Other Consumer |  | Total Loans
Balance at beginning of period |  |  | $ | 32,836 |  |  | $ | 13,227 |  |  | $ | 7,254 |  |  | $ | 6,571 |  |  | $ | 1,591 |  |  | $ | 61,479 |
Charge-offs |  |  | (2,304) |  |  | (1,467) |  |  | — |  |  | (404) |  |  | (525) |  |  | (4,700) |
Recoveries |  |  | 6 |  |  | 210 |  |  | 1 |  |  | 102 |  |  | 104 |  |  | 423 |
Net (Charge-offs)/Recoveries |  |  | (2,298) |  |  | (1,257) |  |  | 1 |  |  | (302) |  |  | (421) |  |  | (4,277) |
Provision for credit losses |  |  | 1,292 |  |  | 2,397 |  |  | 620 |  |  | 65 |  |  | 539 |  |  | 4,913 |
Balance at End of Period |  |  | $ | 31,830 |  |  | $ | 14,367 |  |  | $ | 7,875 |  |  | $ | 6,334 |  |  | $ | 1,709 |  |  | $ | 62,115 |
|  |  | Nine Months Ended September 30, 2019
(dollars in thousands) |  |  | Commercial Real Estate |  | Commercial and Industrial |  | Commercial Construction |  | Consumer Real Estate |  | Other Consumer |  | Total Loans
Balance at beginning of period |  |  | $ | 33,707 |  |  | $ | 11,596 |  |  | $ | 7,983 |  |  | $ | 6,187 |  |  | $ | 1,523 |  |  | $ | 60,996 |
Charge-offs |  |  | (2,833) |  |  | (8,379) |  |  | — |  |  | (815) |  |  | (1,364) |  |  | (13,391) |
Recoveries |  |  | 134 |  |  | 718 |  |  | 4 |  |  | 595 |  |  | 292 |  |  | 1,743 |
Net (Charge-offs)/Recoveries |  |  | (2,699) |  |  | (7,661) |  |  | 4 |  |  | (220) |  |  | (1,072) |  |  | (11,648) |
Provision for credit losses |  |  | 822 |  |  | 10,432 |  |  | (112) |  |  | 367 |  |  | 1,258 |  |  | 12,767 |
Balance at End of Period |  |  | $ | 31,830 |  |  | $ | 14,367 |  |  | $ | 7,875 |  |  | $ | 6,334 |  |  | $ | 1,709 |  |  | $ | 62,115 |
The following tables present the allowance for loan losses and recorded investments in loans by category as of December 31, 2019:
| December 31, 2019
| Allowance for Loan Losses |  | Portfolio Loans
(dollars in thousands) | Individually Evaluated for Impairment |  | Collectively Evaluated for Impairment |  | Total |  | Individually Evaluated for Impairment |  | Collectively Evaluated for Impairment |  | Total
Commercial real estate | $ | 2,023 |  |  | $ | 28,554 |  |  | $ | 30,577 |  |  | $ | 47,920 |  |  | $ | 3,368,598 |  |  | $ | 3,416,518 |
Commercial and industrial | 55 |  |  | 15,626 |  |  | 15,681 |  |  | 17,606 |  |  | 1,703,227 |  |  | 1,720,833 |
Commercial construction | 113 |  |  | 7,787 |  |  | 7,900 |  |  | 1,914 |  |  | 373,531 |  |  | 375,445 |
Consumer real estate | — |  |  | 6,337 |  |  | 6,337 |  |  | 7,884 |  |  | 1,537,439 |  |  | 1,545,323 |
Other consumer | 9 |  |  | 1,720 |  |  | 1,729 |  |  | 13 |  |  | 79,020 |  |  | 79,033 |
Total | $ | 2,200 |  |  | $ | 60,024 |  |  | $ | 62,224 |  |  | $ | 75,337 |  |  | $ | 7,061,815 |  |  | $ | 7,137,152 |

X
- Definition The entire disclosure for allowance for credit losses. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -URI http://asc.fasb.org/topic&trid=2196771 + Details
Name: | us-gaap_AllowanceForCreditLossesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration