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Allowance for Loan and Lease Losses
 6 Months Ended
Jun. 30, 2019
Receivables [Abstract]  
Allowance for Loan and Lease Losses Allowance for Loan and Lease Losses
 
Originated Loans and Leases
 
Management reviews the appropriateness of the allowance for loan and lease losses (“allowance”) on a regular basis. Management considers the accounting policy relating to the allowance to be a critical accounting policy, given the inherent uncertainty in evaluating the levels of the allowance required to cover credit losses in the portfolio and the material effect that assumptions could have on the Company’s results of operations. The Company has developed a methodology to measure the amount of estimated loan loss exposure inherent in the loan portfolio to assure that an appropriate allowance is maintained. The Company’s methodology is based upon guidance provided in SEC Staff Accounting Bulletin No. 102, Selected Loan Loss Allowance Methodology and Documentation Issues and ASC Topic 310, Receivables and ASC Topic 450, Contingencies.
 
The model is comprised of four major components that management has deemed appropriate in evaluating the appropriateness of the allowance for loan and lease losses. While none of these components, when used independently, is effective in arriving at a reserve level that appropriately measures the risk inherent in the portfolio, management believes that using them collectively, provides reasonable measurement of the loss exposure in the portfolio. The four components include: impaired loans; individually reviewed and graded loans; historical loss experience; and qualitative or subjective analysis.
 
Since the methodology is based upon historical experience and trends as well as management’s judgment, factors may arise that result in different estimates. Significant factors that could give rise to changes in these estimates may include, but are not limited to, changes in economic conditions in the local area, concentration of risk, changes in interest rates, and declines in local property values. While management’s evaluation of the allowance as of June 30, 2019, considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance.
 
Acquired Loans and Leases
 
Acquired loans accounted for under ASC 310-30
 
For our acquired loans, our allowance for loan losses is estimated based upon our expected cash flows for these loans. To the extent that we experience a deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans.
 
Acquired loans accounted for under ASC 310-20
 
We establish our allowance for loan losses through a provision for credit losses based upon an evaluation process that is similar to our evaluation process used for originated loans. This evaluation, which includes a review of loans on which full collectability may not be reasonably assured, considers, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan loss experience, carrying value of the loans, which includes the remaining net purchase discount or premium, and other factors that warrant recognition in determining our allowance for loan losses.
 
The following tables detail activity in the allowance for loan and lease losses segregated by originated and acquired loan and lease portfolios and by portfolio segment for the three and six months ended June 30, 2019 and 2018. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
 
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Finance
Leases

 
Total

Allowance for originated loans and leases
Beginning balance
$
11,523

 
$
21,045

 
$
6,404

 
$
1,273

 
$
0

 
$
40,245

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(100
)
 
(55
)
 
(3
)
 
(198
)
 
0

 
(356
)
Recoveries
6

 
94

 
56

 
54

 
0

 
210

Provision (credit)
114

 
(130
)
 
396

 
210

 
0

 
590

Ending Balance
$
11,543

 
$
20,954

 
$
6,853

 
$
1,339

 
$
0

 
$
40,689

 
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Finance
Leases

 
Total

Allowance for acquired loans
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
0

 
$
25

 
$
58

 
$
0

 
$
0

 
$
83

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(3
)
 
0

 
(23
)
 
(3
)
 
0

 
(29
)
Recoveries
17

 
4

 
15

 
0

 
0

 
36

Provision (credit)
(14
)
 
22

 
(6
)
 
9

 
0

 
11

Ending Balance
$
0

 
$
51

 
$
44

 
$
6

 
$
0

 
$
101

 
Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Finance
Leases

 
Total

Allowance for originated loans and leases
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
12,431

 
$
20,402

 
$
5,972

 
$
1,302

 
$
0

 
$
40,107

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(103
)
 
(60
)
 
(21
)
 
(650
)
 
0

 
(834
)
Recoveries
2

 
176

 
94

 
531

 
0

 
803

Provision (credit)
536

 
252

 
102

 
145

 
0

 
1,035

Ending Balance
$
12,866

 
$
20,770

 
$
6,147

 
$
1,328

 
$
0

 
$
41,111

 

Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Covered
Loans

 
Total

Allowance for acquired loans
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
25

 
$
0

 
$
73

 
$
6

 
$
0

 
$
104

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
0

 
0

 
(103
)
 
0

 
0

 
(103
)
Recoveries
36

 
15

 
50

 
2

 
0

 
103

Provision (credit)
(42
)
 
10

 
45

 
(3
)
 
0

 
10

Ending Balance
$
19

 
$
25

 
$
65

 
$
5

 
$
0

 
$
114

 
Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Finance
Leases

 
Total

Allowance for originated loans and leases
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
11,217

 
$
23,483

 
$
7,317

 
$
1,304

 
$
0

 
$
43,321

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(480
)
 
(3,398
)
 
(21
)
 
(378
)
 
0

 
(4,277
)
Recoveries
49

 
95

 
282

 
149

 
0

 
575

Provision (credit)
757

 
774

 
(725
)
 
264

 


 
1,070

Ending Balance
$
11,543

 
$
20,954

 
$
6,853

 
$
1,339

 
$
0

 
$
40,689




Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Covered
Loans

 
Total

Allowance for acquired loans
Beginning balance
$
55

 
$
0

 
$
28

 
$
6

 
$
0

 
$
89

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(3
)
 
0

 
(23
)
 
(3
)
 
0

 
(29
)
Recoveries
33

 
10

 
22

 
0

 
0

 
65

Provision (credit)
(85
)
 
41

 
17

 
3

 
0

 
(24
)
Ending Balance
$
0

 
$
51

 
$
44

 
$
6

 
$
0

 
$
101


Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Finance
Leases

 
Total

Allowance for originated loans and leases
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
11,812

 
$
20,412

 
$
6,161

 
$
1,301

 
$
0

 
$
39,686

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(106
)
 
(60
)
 
(206
)
 
(942
)
 
0

 
(1,314
)
Recoveries
8

 
346

 
136

 
606

 
0

 
1,096

Provision (credit)
1,152

 
72

 
56

 
363

 
0

 
1,643

Ending Balance
$
12,866

 
$
20,770

 
$
6,147

 
$
1,328

 
$
0

 
$
41,111


Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Covered
Loans

 
Total

Allowance for acquired loans
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
25

 
$
0

 
$
54

 
$
6

 
$
0

 
$
85

 
 
 
 
 
 
 
 
 
 
 
 
Charge-offs
(1
)
 
0

 
(103
)
 
0

 
0

 
(104
)
Recoveries
56

 
23

 
83

 
2

 
0

 
164

Provision (credit)
(61
)
 
2

 
31

 
(3
)
 
0

 
(31
)
Ending Balance
$
19

 
$
25

 
$
65

 
$
5

 
$
0

 
$
114



At June 30, 2019 and December 31, 2018, the allocation of the allowance for loan and lease losses summarized on the basis of the Company’s impairment methodology was as follows:
 
(In thousands)
Commercial
and Industrial

 
Commercial
Real Estate

 
Residential
Real Estate

 
Consumer
and Other

 
Finance
Leases

 
Total

Allowance for originated loans and leases
 
 
 
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
300

 
$
600

 
$
0

 
$
0

 
$
0

 
$
900

Collectively evaluated for impairment
11,243

 
20,354

 
6,853

 
1,339

 
0

 
39,789

Ending balance
$
11,543

 
$
20,954

 
$
6,853

 
$
1,339

 
$
0

 
$
40,689

 
(In thousands)
Commercial
and Industrial

 
Commercial Real Estate

 
Residential Real Estate

 
Consumer
and Other

 
Covered Loans

 
Total

Allowance for acquired loans
 
 
 
 
 
 
 
 
 
 
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
0

 
$
0

 
$
0

 
$
0

 
$
0

Collectively evaluated for impairment
0

 
51

 
44

 
6

 
0

 
101

Ending balance
$
0

 
$
51

 
$
44

 
$
6

 
$
0

 
$
101


(In thousands)
Commercial and Industrial

 
Commercial Real Estate

 
Residential Real Estate

 
Consumer
and Other

 
Finance Leases

 
Total

Allowance for originated loans and leases
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
397

 
$
3,365

 
$
0

 
$
0

 
$
0

 
$
3,762

Collectively evaluated for impairment
10,820

 
20,118

 
7,317

 
1,304

 
0

 
39,559

Ending balance
$
11,217

 
$
23,483

 
$
7,317

 
$
1,304

 
$
0

 
$
43,321


(In thousands)
Commercial and Industrial

 
Commercial Real Estate

 
Residential Real Estate

 
Consumer
and Other

 
Covered Loans

 
Total

Allowance for acquired loans
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
0

 
$
0

 
$
0

 
$
0

 
$
0

 
$
0

Collectively evaluated for impairment
55

 
0

 
28

 
6

 
0

 
89

Ending balance
$
55

 
$
0

 
$
28

 
$
6

 
$
0

 
$
89


 
The recorded investment in loans and leases summarized on the basis of the Company’s impairment methodology as of June 30, 2019 and December 31, 2018 was as follows:
(In thousands)
Commercial and Industrial

 
Commercial Real Estate

 
Residential Real Estate

 
Consumer
and Other

 
Finance Leases

 
Total

Originated loans and leases
 
 
 
 
 
 
 
 
 
 
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,770

 
$
5,938

 
$
3,970

 
$
0

 
$
0

 
$
11,678

Collectively evaluated for impairment
1,000,581

 
2,229,275

 
1,281,923

 
72,884

 
15,857

 
4,600,520

Total
$
1,002,351

 
$
2,235,213

 
$
1,285,893

 
$
72,884

 
$
15,857

 
$
4,612,198


(In thousands)
Commercial and Industrial

 
Commercial Real Estate

 
Residential Real Estate

 
Consumer 
and Other

 
Covered Loans

 
Total

Acquired loans
 
 
 
 
 
 
 
 
 
 
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
12

 
$
861

 
$
2,631

 
$
0

 
$
0

 
$
3,504

Loans acquired with deteriorated credit quality
184

 
5,800

 
4,480

 
0

 
0

 
10,464

Collectively evaluated for impairment
41,242

 
160,102

 
31,202

 
805

 
0

 
233,351

Total
$
41,438

 
$
166,763

 
$
38,313

 
$
805

 
$
0

 
$
247,319

 
(In thousands)
Commercial and Industrial

 
Commercial Real Estate

 
Residential Real Estate

 
Consumer 
and Other

 
Finance Leases

 
Total

Originated loans and leases
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,864

 
$
8,388

 
$
3,915

 
$
0

 
$
0

 
$
14,167

Collectively evaluated for impairment
1,032,059

 
2,153,181

 
1,288,346

 
70,228

 
14,556

 
4,558,370

Total
$
1,033,923

 
$
2,161,569

 
$
1,292,261

 
$
70,228

 
$
14,556

 
$
4,572,537

 
(In thousands)
Commercial and Industrial

 
Commercial Real Estate

 
Residential Real Estate

 
Consumer 
and Other

 
Covered Loans

 
Total

Acquired loans
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
32

 
$
842

 
$
2,564

 
$
0

 
$
0

 
$
3,438

Loans acquired with deteriorated credit quality
153

 
5,852

 
5,031

 
0

 
0

 
11,036

Collectively evaluated for impairment
43,527

 
172,398

 
34,038

 
761

 
0

 
250,724

Total
$
43,712

 
$
179,092

 
$
41,633

 
$
761

 
$
0

 
$
265,198


 
A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans consist of our non-homogenous nonaccrual loans, and all loans restructured in a troubled debt restructuring (TDR). Specific reserves on individually identified impaired loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan. For loans that are collateral dependent, impairment is measured based on the fair value of the collateral less estimated selling costs, and such impaired amounts are generally charged off. The majority of impaired loans are collateral dependent impaired loans that have limited exposure or require limited specific reserves because of the amount of collateral support with respect to these loans, and previous charge-offs. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured. In these cases, interest is recognized on a cash basis. Impaired loans are as follows:
 
 
June 30, 2019
 
December 31, 2018
(In thousands)
Recorded Investment
 
Unpaid Principal Balance
 
Related Allowance
 
Recorded Investment
 
Unpaid Principal Balance
 
Related Allowance
Originated loans and leases with no related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial other
$
1,174

 
$
1,374

 
$
0

 
$
183

 
$
271

 
$
0

Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate other
2,904

 
2,904

 
0

 
3,205

 
3,405

 
0

Residential real estate
 
 
 
 
 
 
 
 
 
 
 
Home equity
3,970

 
4,184

 
0

 
3,915

 
4,168

 
0

Subtotal
8,048

 
8,462

 
0

 
7,303

 
7,844

 
0

 
 
 
 
 
 
 
 
 
 
 
 
Originated loans and leases with related allowance
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial other
596

 
696

 
300

 
5,183

 
5,183

 
3,365

Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate other
3,034

 
3,034

 
600

 
1,681

 
1,681

 
397

Subtotal
3,630

 
3,730

 
900

 
6,864

 
6,864

 
3,762

Total
$
11,678

 
$
12,192

 
$
900

 
$
14,167

 
$
14,708

 
$
3,762

 
 
June 30, 2019
 
December 31, 2018
(In thousands)
Recorded Investment
 
Unpaid Principal Balance
 
Related Allowance
 
Recorded Investment
 
Unpaid Principal Balance
 
Related Allowance
Acquired loans with no related allowance
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial other
$
12

 
$
12

 
$
0

 
$
32

 
$
32

 
$
0

Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate other
861

 
943

 
0

 
842

 
924

 
0

Residential real estate
 
 
 
 
 
 
 
 
 
 
 
Home equity
2,631

 
2,734

 
0

 
2,564

 
2,696

 
0

Total
$
3,504

 
$
3,689

 
$
0

 
$
3,438

 
$
3,652

 
$
0


The average recorded investment and interest income recognized on impaired loans for the three months ended June 30, 2019 and 2018 was as follows:
 
 
Three Months Ended June 30, 2019
 
Three Months Ended June 30, 2018
(In thousands)
Average Recorded Investment
 
Interest Income Recognized
 
Average Recorded Investment
 
Interest Income Recognized
Originated loans and leases with no related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
Commercial and industrial other
$
1,331

 
$
0

 
$
3,227

 
$
0

Commercial real estate
 
 
 
 
 
 
 
Commercial real estate other
3,718

 
0

 
6,407

 
0

Residential real estate
 
 
 
 
 
 
 
Home equity
4,009

 
0

 
4,016

 
0

Subtotal
$
9,058

 
$
0

 
$
13,650

 
$
0

 
 
 
 
 
 
 
 
Originated loans and leases with related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
Commercial and industrial other
693

 
0

 
1,300

 
0

Commercial real estate
 
 
 
 
 
 
 
Commercial real estate other
1,579

 
0

 
36

 
0

Subtotal
$
2,272

 
$
0

 
$
1,336

 
$
0

Total
$
11,330

 
$
0

 
$
14,986

 
$
0

 
 
Three Months Ended June 30, 2019
 
Three Months Ended June 30, 2018
(In thousands)
Average Recorded Investment
 
Interest Income Recognized
 
Average Recorded Investment
 
Interest Income Recognized
Acquired loans and leases with no related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
Commercial and industrial other
$
12

 
$
0

 
$
270

 
$
0

Commercial real estate
 
 
 
 
 
 
 
Commercial real estate other
851

 
0

 
1,479

 
0

Residential real estate
 
 
 
 
 
 
 
Home equity
2,557

 
0

 
1,786

 
0

Subtotal
$
3,420

 
$
0

 
$
3,535

 
$
0

 
 
 
 
 
 
 
 
Acquired loans and leases with related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
Commercial real estate other
0

 
0

 
37

 
0

Subtotal
$
0

 
$
0

 
$
37

 
$
0

Total
$
3,420

 
$
0

 
$
3,572

 
$
0




The average recorded investment and interest income recognized on impaired loans for the six months ended June 30, 2019 and 2018 was as follows:

 
Six Months Ended June 30, 2019
 
Six Months Ended June 30, 2018
(In thousands)
Average Recorded Investment
 
Interest Income Recognized
 
Average Recorded Investment
 
Interest Income Recognized
Originated loans and leases with no related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
Commercial and industrial other
$
2,352

 
$
0

 
$
2,104

 
$
0

Commercial real estate
 
 
 
 
 
 
 
Commercial real estate other
5,400

 
0

 
6,084

 
0

Residential real estate
 
 
 
 
 
 
 
Home equity
3,994

 
0

 
3,758

 
0

Subtotal
$
11,746

 
$
0

 
$
11,946

 
$
0

 
 
 
 
 
 
 
 
Originated loans and leases with related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
Commercial and industrial other
487

 
0

 
789

 
0

Commercial real estate
 
 
 
 
 
 
 
Commercial real estate other
706

 
0

 
14

 
0

Subtotal
$
1,193

 
$
0

 
$
803

 
$
0

Total
$
12,939

 
$
0

 
$
12,749

 
$
0


 
Six Months Ended June 30, 2019
 
Six Months Ended June 30, 2018
(In thousands)
Average Recorded Investment
 
Interest Income Recognized
 
Average Recorded Investment
 
Interest Income Recognized
Acquired loans and leases with no related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
Commercial and industrial other
$
35

 
$
0

 
$
138

 
$
0

Commercial real estate
 
 
 
 
 
 
 
Construction
0

 
0

 
0

 
0

Commercial real estate other
896

 
0

 
1,637

 
0

Residential real estate
 
 
 
 
 
 
 
Home equity
2,591

 
0

 
1,966

 
0

Subtotal
$
3,522

 
$
0

 
$
3,741

 
$
0

 
 
 
 
 
 
 
 
Acquired loans and leases with related allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
Commercial real estate other
0

 
0

 
15

 
0

Subtotal
$
0

 
$
0

 
$
15

 
$
0

Total
$
3,522

 
$
0

 
$
3,756

 
$
0



 
Loans are considered modified in a TDR when, due to a borrower’s financial difficulties, the Company makes concessions to the borrower that it would not otherwise consider. These modifications may include, among others, an extension for the term of the loan, and granting a period when interest-only payments can be made with the principal payments made over the remaining term of the loan or at maturity.
 
The following tables present information on loans modified in troubled debt restructuring during the periods indicated.
 
Three Months Ended
June 30, 2019
 
 
 
 
 
 
Defaulted TDRs2
(In thousands)
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
 
Number of Loans
 
Post-Modification Outstanding Recorded Investment
Commercial and Industrial
 
 
 
 
 
 
 
 
 
Commercial and industrial other1
1

 
$
595

 
$
595

 
0

 
$
0

Total
1

 
$
595

 
$
595

 
0

 
$
0

1 Represents the following concessions:  extension of term and reduction of rate.
2 TDRs that defaulted during the three months ended June 30, 2019 that were restructured in the prior twelve months.
 
 
Three Months Ended
June 30, 2018
 
 
 
 
 
 
Defaulted TDRs2
(In thousands)
Number of Loans
 
Pre-Modification Outstanding Recorded Investment
 
Post-Modification Outstanding Recorded Investment
 
Number of Loans
 
Post-Modification Outstanding Recorded Investment
Residential real estate
 
 
 
 
 
 
 
 
 
Home equity1
1

 
$
49

 
$
49

 
0

 
$
0

Total
1

 
$
49

 
$
49

 
0

 
$
0

 1 Represents the following concessions:  extension of term and reduction of rate.
2 TDRs that defaulted during the three months ended June 30, 2018 that were restructured in the prior twelve months.
 

 
Six Months Ended
June 30, 2019
 
 
 
 
 
 
Defaulted TDRs3
(In thousands)
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
Number of
Loans
 
Post-
Modification
Outstanding
Recorded
Investment
Commercial and industrial
 
 
 
 
 
 
 
 
 
Commercial and industrial other1
1

 
$
595

 
$
595

 
0

 
$
0

Residential real estate
 
 
 
 
 
 
 
 
 
Home equity2
1

 
168

 
168

 
0

 
0

Total
2

 
$
763

 
$
763

 
0

 
$
0

1 Represents the following concessions:  extension of term and reduction of rate.
2Represents the following concessions:  extension of term and reduction of rate.
3 TDRs that defaulted during the six months ended June 30, 2019 that had been restructured in the prior twelve months.
 
Six Months Ended
June 30, 2018
 
 
 
 
 
 
Defaulted TDRs2
(In thousands)
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
Number of
Loans
 
Post-
Modification
Outstanding
Recorded
Investment
Residential real estate
 
 
 
 
 
 
 
 
 
Home equity1
2

 
$
112

 
$
112

 
0

 
$
0

Total
2

 
$
112

 
$
112

 
0

 
$
0

1 Represents the following concessions:  extension of term and reduction of rate.
2 TDRs that defaulted during the six months ended June 30, 2018 that had been restructured in the prior twelve months.

The following tables present credit quality indicators (internal risk grade) by class of commercial and industrial loans and commercial real estate loans as of June 30, 2019 and December 31, 2018.
 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
Commercial and Industrial Other
 
Commercial and Industrial Agriculture
 
CommercialReal Estate Other
 
CommercialReal Estate Agriculture
 
Commercial Real Estate Construction
 
Total
Originated Loans and Leases
 
 
 
 
 
 
 
 
 
 
 
Internal risk grade:
 
 
 
 
 
 
 
 
 
 
 
Pass
$
892,270

 
$
81,718

 
$
1,830,464

 
$
166,046

 
$
185,677

 
$
3,156,175

Special Mention
12,009

 
1,637

 
20,842

 
2,131

 
0

 
36,619

Substandard
4,666

 
10,051

 
17,751

 
12,302

 
0

 
44,770

Total
$
908,945

 
$
93,406

 
$
1,869,057

 
$
180,479

 
$
185,677

 
$
3,237,564

 
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
Commercial and Industrial Other
 
Commercial and Industrial Agriculture
 
CommercialReal Estate Other
 
CommercialReal Estate Agriculture
 
Commercial Real Estate Construction
 
Total
Acquired Loans and Leases
 
 
 
 
 
 
 
 
 
 
 
Internal risk grade:
 
 
 
 
 
 
 
 
 
 
 
Pass
$
41,174

 
$
0

 
$
162,325

 
$
219

 
$
1,361

 
$
205,079

Special Mention
0

 
0

 
265

 
0

 
0

 
265

Substandard
264

 
0

 
2,593

 
0

 
0

 
2,857

Total
$
41,438

 
$
0

 
$
165,183

 
$
219

 
$
1,361

 
$
208,201

 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
Commercial and Industrial Other
 
Commercial and Industrial Agriculture
 
CommercialReal Estate Other
 
CommercialReal Estate Agriculture
 
Commercial Real Estate Construction
 
Total
Originated Loans and Leases
Internal risk grade:
 
 
 
 
 
 
 
 
 
 
 
Pass
$
910,476

 
$
93,939

 
$
1,797,599

 
$
157,156

 
$
164,285

 
$
3,123,455

Special Mention
8,675

 
4,951

 
9,484

 
4,964

 
0

 
28,074

Substandard
7,278

 
8,604

 
20,196

 
7,885

 
0

 
43,963

Total
$
926,429

 
$
107,494

 
$
1,827,279

 
$
170,005

 
$
164,285

 
$
3,195,492

 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
Commercial and Industrial Other
 
Commercial and Industrial Agriculture
 
CommercialReal Estate Other
 
CommercialReal Estate Agriculture
 
Commercial Real Estate Construction
 
Total
Acquired Loans and Leases
Internal risk grade:
 
 
 
 
 
 
 
 
 
 
 
Pass
$
43,447

 
$
0

 
$
174,383

 
$
224

 
$
1,384

 
$
219,438

Special Mention
0

 
0

 
452

 
0

 
0

 
452

Substandard
265

 
0

 
2,649

 
0

 
0

 
2,914

Total
$
43,712

 
$
0

 
$
177,484

 
$
224

 
$
1,384

 
$
222,804


 
The following tables present credit quality indicators by class of residential real estate loans and by class of consumer loans. Nonperforming loans include nonaccrual, impaired, and loans 90 days past due and accruing interest. All other loans are considered performing as of June 30, 2019 and December 31, 2018. For purposes of this footnote, acquired loans that were recorded at fair value at the acquisition date and are 90 days or greater past due are considered performing.
 
June 30, 2019
 
 
 
 
 
 
 
 
 
(In thousands)
Residential
Home Equity
 
Residential
Mortgages
 
Consumer
Indirect
 
Consumer
Other
 
Total
Originated Loans and Leases
 
 
 
 
 
 
 
 
 
Performing
$
202,074

 
$
1,074,552

 
$
13,898

 
$
58,807

 
$
1,349,331

Nonperforming
1,984

 
7,283

 
105

 
74

 
9,446

Total
$
204,058

 
$
1,081,835

 
$
14,003

 
$
58,881

 
$
1,358,777

 
June 30, 2019
 
 
 
 
 
 
 
 
 
(In thousands)
Residential
Home Equity
 
Residential
Mortgages
 
Consumer
Indirect
 
Consumer
Other
 
Total
Acquired Loans and Leases
 
 
 
 
 
 
 
 
 
Performing
$
17,602

 
$
18,664

 
$
0

 
$
805

 
$
37,071

Nonperforming
1,053

 
994

 
0

 
0

 
2,047

Total
$
18,655

 
$
19,658

 
$
0

 
$
805

 
$
39,118

 
December 31, 2018
(In thousands)
Residential
Home Equity
 
Residential
Mortgages
 
Consumer
Indirect
 
Consumer
Other
 
Total
Originated Loans and Leases
 
 
 
 
 
 
 
 
 
Performing
$
206,675

 
$
1,076,032

 
$
12,508

 
$
57,486

 
$
1,352,701

Nonperforming
1,784

 
7,770

 
155

 
79

 
9,788

Total
$
208,459

 
$
1,083,802

 
$
12,663

 
$
57,565

 
$
1,362,489

 
December 31, 2018
(In thousands)
Residential
Home Equity
 
Residential
Mortgages
 
Consumer
Indirect
 
Consumer
Other
 
Total
Acquired Loans and Leases
 
 
 
 
 
 
 
 
 
Performing
$
19,735

 
$
19,380

 
$
0

 
$
761

 
$
39,876

Nonperforming
1,414

 
1,104

 
0

 
0

 
2,518

Total
$
21,149

 
$
20,484

 
$
0

 
$
761

 
$
42,394