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Loans Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Summary of Loans Receivable

Loans receivable, net, at December 31, 2020 and 2019 consisted of the following (in thousands):

						December 31,
						2020						2019
Commercial:
Commercial and industrial (1)						$	470,656					$	396,434
Commercial real estate - owner occupied						1,145,065						792,653
Commercial real estate - investor						3,491,464						2,296,410
Total commercial						5,107,185						3,485,497
Consumer:
Residential real estate						2,309,459						2,321,157
Home equity loans and lines						285,016						318,576
Other consumer						54,446						89,422
Total consumer						2,648,921						2,729,155
Total loans receivable						7,756,106						6,214,652
Deferred origination costs, net of fees						9,486						9,880
Allowance for credit losses						(60,735)						(16,852)
Total loans receivable, net						$	7,704,857					$	6,207,680

(1)The commercial and industrial loans balance at December 31, 2020 includes Paycheck Protection Program (“PPP”) loans of $95.4 million.

Risk Category of Loans by Loan Portfolio Segment Excluding PCI Loans

The following table summarizes total loans by year of origination, internally assigned credit grades and risk characteristics (in thousands):

						2020						2019						2018						2017						2016						2015 and prior						Revolving lines of credit						Total
December 31, 2020
Commercial and industrial
Pass						$	137,262					$	40,737					$	27,967					$	18,845					$	33,568					$	59,339					$	134,140					$	451,858
Special Mention						150						583						826						1,422						907						118						1,429						5,435
Substandard						581						1,284						1,243						809						439						1,706						7,301						13,363
Total commercial and industrial						137,993						42,604						30,036						21,076						34,914						61,163						142,870						470,656
Commercial real estate - owner occupied
Pass						96,888						114,506						122,962						124,050						104,264						428,423						18,932						1,010,025
Special Mention						—						3,512						8,240						1,023						17,115						17,811						439						48,140
Substandard						—						34,670						9,001						3,404						3,677						35,509						639						86,900
Total commercial real estate - owner occupied						96,888						152,688						140,203						128,477						125,056						481,743						20,010						1,145,065
Commercial real estate - investor
Pass						$	635,930					$	628,435					$	317,104					$	426,268					$	281,876					$	812,062					$	194,913					$	3,296,588
Special Mention						—						15,979						17,113						15,225						4,234						55,872						149						108,572
Substandard						4,311						9,217						1,931						17,222						11,474						36,326						5,823						86,304
Total commercial real estate - investor						640,241						653,631						336,148						458,715						297,584						904,260						200,885						3,491,464
Consumer:
Residential real estate (1)
Pass						$	595,982					$	437,593					$	226,435					$	166,773					$	146,237					$	729,037					$	—					$	2,302,057
Special Mention						—						532						—						—						446						2,186						—						3,164
Substandard						570						—						1,489						221						—						1,958						—						4,238
Total residential real estate						596,552						438,125						227,924						166,994						146,683						733,181						—						2,309,459
Consumer (1)
Pass						24,954						26,659						83,296						25,469						16,565						156,276						2,145						335,364
Special Mention						—						—						—						—						150						382						—						532
Substandard						—						—						—						—						—						3,566						—						3,566
Total consumer						24,954						26,659						83,296						25,469						16,715						160,224						2,145						339,462
Total loans receivable						$	1,496,628					$	1,313,707					$	817,607					$	800,731					$	620,952					$	2,340,571					$	365,910					$	7,756,106

(1)For residential real estate and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity.

Analysis of Allowance for Loan Losses

An analysis of the allowance for credit losses on loans for the years ended December 31, 2020 and 2019 is as follows (in thousands):

						Commercial and Industrial						Commercial Real Estate - Owner Occupied						Commercial Real Estate - Investor						Residential Real Estate						Consumer						Unallocated						Total
For the Year Ended December 31, 2020
Allowance for credit losses on loans
Balance at beginning of year						$	1,458					$	2,893					$	9,883					$	2,002					$	591					$	25					$	16,852
Impact of CECL adoption						2,416						(1,109)						(5,395)						3,833						2,981						(25)						2,701
Initial allowance for credit losses on PCD loans						1,221						26						260						109						1,023						—						2,639
Credit loss expense (benefit) (1)						1,039						15,007						34,935						8,191						(1,770)						—						57,402
Charge-offs (1)						(890)						(1,769)						(13,081)						(3,200)						(1,244)						—						(20,184)
Recoveries						146						6						101						883						189						—						1,325
Balance at end of year						$	5,390					$	15,054					$	26,703					$	11,818					$	1,770					$	—					$	60,735
For the Year Ended December 31, 2019
Allowance for credit losses on loans
Balance at beginning of year						$	1,609					$	2,277					$	8,770					$	2,413					$	486					$	1,022					$	16,577
Credit loss (benefit) expense						(311)						947						638						792						567						(997)						1,636
Charge-offs						—						(663)						(236)						(1,299)						(606)						—						(2,804)
Recoveries						160						332						711						96						144						—						1,443
Balance at end of year						$	1,458					$	2,893					$	9,883					$	2,002					$	591					$	25					$	16,852

(1) The year ended December 31, 2020 was impacted by the shift in current and forward-looking economic conditions, credit migration and borrower vulnerability related to COVID-19. The Company recorded $14.6 million of charge-offs related to the sale of higher-risk commercial loans and $3.3 million of charge-offs related to the sale of under-performing residential and consumer loans.

A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. At December 31, 2020, the Company had collateral dependent loans with an amortized cost balance as follows: commercial and industrial of $1.9 million, commercial real estate - owner occupied of $13.8 million, and commercial real estate - investor of $18.3 million. In addition, the Company had residential and consumer loans collateralized by residential real estate, which are in the process of foreclosure, with an amortized cost balance of $1.4 million and $1.8 million at December 31, 2020 and December 31, 2019, respectively. The amount of foreclosed residential real estate property held by the Company was $106,000 and $51,000 at December 31, 2020 and December 31, 2019, respectively.

In accordance with ASC 310, prior to the adoption of ASU 2016-13, the following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2019, excluding PCI loans (in thousands):

						Commercial and Industrial						Commercial Real Estate - Owner Occupied						Commercial Real Estate - Investor						Residential Real Estate						Consumer						Unallocated						Total
At December 31, 2019
Allowance for loan losses:
Ending allowance balance attributed to loans:
Individually evaluated for impairment						$	—					$	474					$	—					$	—					$	2					$	—					$	476
Collectively evaluated for impairment						1,458						2,419						9,883						2,002						589						25						16,376
Total ending allowance balance						$	1,458					$	2,893					$	9,883					$	2,002					$	591					$	25					$	16,852
Loans:
Loans individually evaluated for impairment						$	243					$	6,163					$	5,584					$	11,009					$	3,511					$	—					$	26,510
Loans collectively evaluated for impairment						395,848						785,778						2,279,114						2,309,812						404,325						—						6,174,877
Total ending loan balance						$	396,091					$	791,941					$	2,284,698					$	2,320,821					$	407,836					$	—					$	6,201,387

Impaired Financing Receivables

The summary of loans individually evaluated for impairment by loan portfolio segment as of December 31, 2019 was as follows, excluding PCI loans (in thousands):

						Unpaid Principal Balance						Recorded Investment						Allowance for Loan Losses Allocated
At December 31, 2019
With no related allowance recorded:
Commercial and industrial						$	265					$	243					$	—
Commercial real estate – owner occupied						4,062						3,968						—
Commercial real estate – investor						6,665						5,584						—
Residential real estate						11,009						11,009						—
Consumer						3,734						3,509						—
Total with no related allowance recorded						$	25,735					$	24,313					$	—
With an allowance recorded:
Commercial and industrial						$	—					$	—					$	—
Commercial real estate – owner occupied						2,376						2,195						474
Commercial real estate – investor						—						—						—
Residential real estate						—						—						—
Consumer						2						2						2
Total with an allowance recorded						$	2,378					$	2,197					$	476

																		For the Year Ended December 31, 2019
																		Average Recorded Investment						Interest Income Recognized
With no related allowance recorded:
Commercial and industrial																		$	523					$	5
Commercial real estate – owner occupied																		4,171						179
Commercial real estate – investor																		9,012						222
Residential real estate																		10,275						548
Consumer																		3,275						178
Total with no related allowance recorded																		$	27,256					$	1,132
With an allowance recorded:
Commercial and industrial																		$	—					$	—
Commercial real estate – owner occupied																		2,173						138
Commercial real estate – investor																		—						—
Residential real estate																		—						—
Consumer																		—						—
Total with an allowance recorded																		$	2,173					$	138

Recorded Investment in Non-Accrual Loans by Loan Portfolio Segment Excluding PCI Loans

The following table presents the recorded investment in non-accrual loans by loan portfolio segment as of December 31, 2020 and 2019 (in thousands). The December 31, 2020 balances include PCD loans while the December 31, 2019 balances exclude PCI loans (in accordance with ASC 310, prior to the adoption of ASU 2016-13 on January 1, 2020).

						December 31,
						2020						2019
Commercial and industrial						$	1,908					$	207
Commercial real estate – owner occupied						13,751						4,811
Commercial real estate – investor						18,287						2,917
Residential real estate						8,671						7,181
Consumer						4,246						2,733
Total non-accrual loans						$	46,863					$	17,849

Aging of Recorded Investment in Past Due Loans Excluding PCI Loans

The following table presents the aging of the recorded investment in past due loans as of December 31, 2020 and 2019 by loan portfolio segment (in thousands). The December 31, 2020 balances include PCD loans while the December 31, 2019 balances exclude PCI loans (in accordance with ASC 310, prior to the adoption of ASU 2016-13 on January 1, 2020).

						30-59 Days Past Due						60-89 Days Past Due						90 Days or Greater Past Due						Total Past Due						Loans Not Past Due						Total
December 31, 2020
Commercial and industrial						$	3,050					$	628					$	327					$	4,005					$	466,651					$	470,656
Commercial real estate – owner occupied						1,015						—						7,871						8,886						1,136,179						1,145,065
Commercial real estate – investor						8,897						3,233						11,122						23,252						3,468,212						3,491,464
Residential real estate						15,156						3,164						4,238						22,558						2,286,901						2,309,459
Consumer						978						533						3,568						5,079						334,383						339,462
Total loans receivable						$	29,096					$	7,558					$	27,126					$	63,780					$	7,692,326					$	7,756,106
December 31, 2019
Commercial and industrial						$	100					$	—					$	207					$	307					$	395,784					$	396,091
Commercial real estate – owner occupied						1,541						1,203						1,040						3,784						788,157						791,941
Commercial real estate – investor						381						938						2,792						4,111						2,280,587						2,284,698
Residential real estate						8,161						3,487						2,859						14,507						2,306,314						2,320,821
Consumer						1,048						491						2,388						3,927						403,909						407,836
Total loans receivable						$	11,231					$	6,119					$	9,286					$	26,636					$	6,174,751					$	6,201,387

Troubled Debt Restructurings

The following table presents information about TDRs which occurred during the years ended December 31, 2020 and 2019, and TDRs modified within the previous year and which defaulted during the years ended December 31, 2020 and 2019 (dollars in thousands):

						Number of Loans						Pre-modification Recorded Investment						Post-modification Recorded Investment
For the Year Ended December 31, 2020
Troubled debt restructurings:
Commercial real estate – owner occupied						1						$	1,112					$	1,143
Commercial real estate – investor						2						1,035						1,116
Residential real estate						6						1,018						1,065
Consumer						6						1,035						668
												Number of Loans						Recorded Investment
Troubled debt restructurings
Which subsequently defaulted:												None						None
						Number of Loans						Pre-modification Recorded Investment						Post-modification Recorded Investment
For the Year Ended December 31, 2019
Troubled debt restructurings:
Commercial real estate – owner occupied						1						$	154					$	198
Commercial real estate – investor						1						272						393
Residential real estate						6						1,036						1,091
Consumer						7						663						683
												Number of Loans						Recorded Investment
Troubled debt restructurings
Which subsequently defaulted:
Consumer												1						$	115

Financing Receivable, Purchased With Credit Deterioration

The carrying amount of the PCD loans is as follows (in thousands):

			Two River						Country Bank
			January 1, 2020						January 1, 2020
Purchase price of loans at acquisition			$	26,354					$	24,667
Allowance for credit losses at acquisition			1,343						1,296
Non-credit discount at acquisition			3,589						5,334
Par value of acquired loans at acquisition			$	31,286					$	31,297

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period

The following table summarizes the changes in accretable yield for PCI loans during the year ended December 31, 2019 (in thousands):

						For the Year Ended December 31,
						2019
Beginning balance						$	3,630
Acquisition						691
Accretion						(2,613)
Reclassification from non-accretable difference						1,317
Ending balance						$	3,025

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