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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 6 Months Ended
Jun. 30, 2017
Loans and Leases Receivable Disclosure [Abstract]  
Composition of Loan Portfolio, Excluding Residential Loans Held for Sale
The composition of the Company’s loan portfolio, excluding residential loans held for sale, at June 30, 2017 and December 31, 2016 was as follows:   
 
June 30,
2017
 
December 31,
2016
Residential real estate
$
831,577

 
$
802,494

Commercial real estate
1,138,756

 
1,050,780

Commercial
370,701

 
333,639

Home equity
327,083

 
329,907

Consumer
17,035

 
17,332

HPFC
51,117

 
60,412

Total loans
$
2,736,269

 
$
2,594,564
Schedule of Loan Balances by Portfolio Segment
The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination (costs) fees totaling:
 
June 30,
2017
 
December 31,
2016
Net unamortized fair value mark discount on acquired loans
$
7,442

 
$
8,810

Net unamortized loan origination (costs) fees
(526
)
 
(66
)
Total
$
6,916

 
$
8,744
Summary of Activity in Allowance for Loan Losses
The following presents the activity in the ALL and select loan information by portfolio segment for the three and six months ended June 30, 2017 and 2016, and for the year ended December 31, 2016: 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Three and Six Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
4,271

 
$
12,726

 
$
3,815

 
$
2,107

 
$
175

 
$
627

 
$
23,721

Loans charged off
 
(190
)
 
(9
)
 
(145
)
 
(391
)
 
(48
)
 
(81
)
 
(864
)
Recoveries
 
4

 
10

 
118

 
—

 
2

 
—

 
134

Provision (credit)(1)
 
396

 
121

 
487

 
378

 
53

 
(32
)
 
1,403

Ending balance
 
$
4,481

 
$
12,848

 
$
4,275

 
$
2,094

 
$
182

 
$
514

 
$
24,394

ALL for the six months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
4,160

 
$
12,154

 
$
3,755

 
$
2,194

 
$
181

 
$
672

 
$
23,116

Loans charged off
 
(195
)
 
(12
)
 
(281
)
 
(392
)
 
(62
)
 
(81
)
 
(1,023
)
Recoveries
 
4

 
113

 
195

 
1

 
4

 
—

 
317

Provision (credit)(1)
 
512

 
593

 
606

 
291

 
59

 
(77
)
 
1,984

Ending balance
 
$
4,481

 
$
12,848

 
$
4,275

 
$
2,094

 
$
182

 
$
514

 
$
24,394

ALL balance attributable to loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
468

 
$
1,116

 
$
120

 
$
—

 
$
—

 
$
—

 
$
1,704

Collectively evaluated for impairment
 
4,013

 
11,732

 
4,155

 
2,094

 
182

 
514

 
22,690

Total ending ALL
 
$
4,481

 
$
12,848

 
$
4,275

 
$
2,094

 
$
182

 
$
514

 
$
24,394

Loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
4,451

 
$
13,116

 
$
2,067

 
$
446

 
$
—

 
$
—

 
$
20,080

Collectively evaluated for impairment
 
827,126

 
1,125,640

 
368,634

 
326,637

 
17,035

 
51,117

 
2,716,189

Total ending loans balance
 
$
831,577

 
$
1,138,756

 
$
370,701

 
$
327,083

 
$
17,035

 
$
51,117

 
$
2,736,269

For The Three and Six Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
4,516

 
$
10,380

 
$
3,298

 
$
2,622

 
$
182

 
$
341

 
$
21,339

Loans charged off
 
(19
)
 
(19
)
 
(203
)
 
(57
)
 
(26
)
 
(302
)
 
(626
)
Recoveries
 
31

 
34

 
82

 
1

 
2

 
—

 
150

Provision (credit)(1)
 
(97
)
 
1,164

 
1,381

 
380

 
35

 
(9
)
 
2,854

Ending balance
 
$
4,431

 
$
11,559

 
$
4,558

 
$
2,946

 
$
193

 
$
30

 
$
23,717

ALL for the six months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
4,545

 
$
10,432

 
$
3,241

 
$
2,731

 
$
193

 
$
24

 
$
21,166

Loans charged off
 
(229
)
 
(241
)
 
(429
)
 
(185
)
 
(41
)
 
(302
)
 
(1,427
)
Recoveries
 
71

 
43

 
134

 
2

 
4

 
—

 
254

Provision(1)
 
44

 
1,325

 
1,612

 
398

 
37

 
308

 
3,724

Ending balance
 
$
4,431

 
$
11,559

 
$
4,558

 
$
2,946

 
$
193

 
$
30

 
$
23,717

ALL balance attributable to loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
497

 
$
29

 
$
1,400

 
$
89

 
$
—

 
$
—

 
$
2,015

Collectively evaluated for impairment
 
3,934

 
11,530

 
3,158

 
2,857

 
193

 
30

 
21,702

Total ending ALL
 
$
4,431

 
$
11,559

 
$
4,558

 
$
2,946

 
$
193

 
$
30

 
$
23,717

Loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
4,926

 
$
2,340

 
$
3,461

 
$
503

 
$
7

 
$
—

 
$
11,237

Collectively evaluated for impairment
 
795,630

 
1,015,437

 
333,056

 
341,478

 
17,811

 
70,651

 
$
2,574,063

Total ending loans balance
 
$
800,556

 
$
1,017,777

 
$
336,517

 
$
341,981

 
$
17,818

 
$
70,651

 
$
2,585,300

 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Year Ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
4,545

 
$
10,432

 
$
3,241

 
$
2,731

 
$
193

 
$
24

 
$
21,166

Loans charged off
 
(356
)
 
(315
)
 
(2,218
)
 
(308
)
 
(101
)
 
(507
)
 
(3,805
)
Recoveries
 
95

 
50

 
332

 
2

 
7

 
—

 
486

Provision (credit)(1)
 
(124
)
 
1,987

 
2,400

 
(231
)
 
82

 
1,155

 
5,269

Ending balance
 
$
4,160

 
$
12,154

 
$
3,755

 
$
2,194

 
$
181

 
$
672

 
$
23,116

ALL balance attributable to loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
483

 
$
1,373

 
$
—

 
$
86

 
$
—

 
$
65

 
$
2,007

Collectively evaluated for impairment
 
3,677

 
10,781

 
3,755

 
2,108

 
181

 
607

 
21,109

Total ending ALL
 
$
4,160

 
$
12,154

 
$
3,755

 
$
2,194

 
$
181

 
$
672

 
$
23,116

Loans:
 
  

 
  

 
  

 
  

 
  

 
 
 
  

Individually evaluated for impairment
 
$
4,348

 
$
13,317

 
$
2,028

 
$
457

 
$
7

 
$
97

 
$
20,254

Collectively evaluated for impairment
 
798,146

 
1,037,463

 
331,611

 
329,450

 
17,325

 
60,315

 
2,574,310

Total ending loans balance
 
$
802,494

 
$
1,050,780

 
$
333,639

 
$
329,907

 
$
17,332

 
$
60,412

 
$
2,594,564


(1)
The provision (credit) for loan losses excludes any impact for the change in the reserve for unfunded commitments, which represents management's estimate of the amount required to reflect the probable inherent losses on outstanding letters of credit and unused lines of credit. The reserve for unfunded commitments is presented within accrued interest and other liabilities on the consolidated statements of condition. At June 30, 2017 and 2016, and December 31, 2016, the reserve for unfunded commitments was $7,000, $22,000 and $11,000, respectively.
Schedule of Provision for Credit Losses
The following reconciles the three and six months ended June 30, 2017 and 2016, and year ended December 31, 2016 provision for loan losses to the provision for credit losses as presented on the consolidated statement of income:
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
Year Ended December 31,
2016
 
 
2017
 
2016
 
2017
 
2016
 
Provision for loan losses
 
$
1,403

 
$
2,854

 
$
1,984

 
$
3,724

 
$
5,269

Change in reserve for unfunded commitments
 
(2
)
 
(2
)
 
(4
)
 
—

 
(11
)
Provision for credit losses
 
$
1,401

 
$
2,852

 
$
1,980

 
$
3,724

 
$
5,258
Credit Risk Exposure Indicators by Portfolio Segment
The following summarizes credit risk exposure indicators by portfolio segment as of the following dates:
 
 
Residential 
Real Estate
 
Commercial 
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass (Grades 1-6)
 
$
820,437

 
$
1,072,685

 
$
362,660

 
$
—

 
$
—

 
$
48,814

 
$
2,304,596

Performing
 
—

 
—

 
—

 
325,711

 
17,035

 
—

 
342,746

Special Mention (Grade 7)
 
942

 
23,866

 
1,716

 
—

 
—

 
229

 
26,753

Substandard (Grade 8)
 
10,198

 
42,205

 
4,908

 
—

 
—

 
2,074

 
59,385

Doubtful (Grade 9)
 
—

 
—

 
1,417

 
—

 
—

 
—

 
1,417

Non-performing
 
—

 
—

 
—

 
1,372

 
—

 
—

 
1,372

Total
 
$
831,577

 
$
1,138,756

 
$
370,701

 
$
327,083

 
$
17,035

 
$
51,117

 
$
2,736,269

December 31, 2016
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Pass (Grades 1-6)
 
$
789,554

 
$
1,003,386

 
$
321,148

 
$
—

 
$
—

 
$
58,943

 
$
2,173,031

Performing
 
—

 
—

 
—

 
328,287

 
17,328

 
—

 
345,615

Special Mention (Grade 7)
 
2,387

 
5,724

 
5,598

 
—

 
—

 
257

 
13,966

Substandard (Grade 8)
 
10,553

 
41,670

 
5,437

 
—

 
—

 
1,212

 
58,872

Doubtful (Grade 9)
 
—

 
—

 
1,456

 
—

 
—

 
—

 
1,456

Non-performing
 
—

 
—

 
—

 
1,620

 
4

 
—

 
1,624

Total
 
$
802,494

 
$
1,050,780

 
$
333,639

 
$
329,907

 
$
17,332

 
$
60,412

 
$
2,594,564
Loan Aging Analysis by Portfolio Segment
The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and a summary of non-accrual loans, which include TDRs, and loans past due over 90 days and accruing as of the following dates:
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater
than
90 Days
 
Total
Past Due
 
Current
 
Total Loans
Outstanding
 
Loans > 90
Days Past
Due and
Accruing
 
Non-Accrual
Loans
June 30, 2017
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
2,344

 
$
721

 
$
4,104

 
$
7,169

 
$
824,408

 
$
831,577

 
$
—

 
$
4,890

Commercial real estate
1,189

 
2,262

 
16,262

 
19,713

 
1,119,043

 
1,138,756

 
76

 
16,291

Commercial
178

 
91

 
1,537

 
1,806

 
368,895

 
370,701

 
—

 
2,056

Home equity
1,072

 
480

 
1,028

 
2,580

 
324,503

 
327,083

 
—

 
1,371

Consumer
43

 
5

 
—

 
48

 
16,987

 
17,035

 
—

 
—

HPFC
639

 
576

 
507

 
1,722

 
49,395

 
51,117

 
—

 
1,083

Total
$
5,465

 
$
4,135

 
$
23,438

 
$
33,038

 
$
2,703,231

 
$
2,736,269

 
$
76

 
$
25,691

December 31, 2016
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
1,783

 
$
924

 
$
2,904

 
$
5,611

 
$
796,883

 
$
802,494

 
$
—

 
$
3,945

Commercial real estate
855

 
223

 
12,625

 
13,703

 
1,037,077

 
1,050,780

 
—

 
12,849

Commercial
633

 
218

 
1,675

 
2,526

 
331,113

 
333,639

 
—

 
2,088

Home equity
892

 
134

 
1,321

 
2,347

 
327,560

 
329,907

 
—

 
1,620

Consumer
38

 
—

 
4

 
42

 
17,290

 
17,332

 
—

 
4

HPFC
438

 
688

 
110

 
1,236

 
59,176

 
60,412

 
—

 
207

Total
$
4,639

 
$
2,187

 
$
18,639

 
$
25,465

 
$
2,569,099

 
$
2,594,564

 
$
—

 
$
20,713
Troubled Debt Restructuring and Specific Reserve Related to TDRs
The following is a summary of TDRs, by portfolio segment, and the associated specific reserve included within the ALL as of the periods indicated:
 
 
Number of Contracts
 
Recorded Investment
 
Specific Reserve
 
 
June 30, 2017
 
December 31, 2016
 
June 30, 2017
 
December 31, 2016
 
June 30, 2017
 
December 31, 2016
Residential real estate
 
22

 
21

 
$
3,327

 
$
3,221

 
$
468

 
$
483

Commercial real estate
 
3

 
3

 
993

 
1,008

 
12

 
—

Commercial
 
9

 
10

 
1,453

 
1,502

 
—

 
—

Home equity
 
2

 
1

 
308

 
16

 
—

 
—

Total
 
36

 
35

 
$
6,081

 
$
5,747

 
$
480

 
$
483
Schedule of Loan Modifications
The following represents loan modifications that qualify as TDRs that occurred for the three and six months ended June 30, 2017 and 2016:
 
 
Number of Contracts
 
Pre-Modification
Outstanding
Recorded Investment
 
Post-Modification
Outstanding
Recorded Investment
 
Specific Reserve
 
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
For the three months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
1

 
—

 
$
315

 
$
—

 
$
315

 
$
—

 
$
—

 
$
—

Total
 
1

 
—

 
$
315

 
$
—

 
$
315

 
$
—

 
$
—

 
$
—

For the six months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturity concession
 
1

 
—

 
$
151

 
$
—

 
$
151

 
$
—

 
$
15

 
$
—

Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
1

 
—

 
315

 
—

 
315

 
—

 
—

 
—

Total
 
2

 
—

 
$
466

 
$
—

 
$
466

 
$
—

 
$
15

 
$
—
Summary of Impaired Loan Balances and Associated Allowance by Portfolio Segment
The following is a summary of impaired loan balances and the associated allowance by portfolio segment as of and for the three and six months ended June 30, 2017 and 2016, and as of and for the year-ended December 31, 2016:
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
June 30, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
$
3,026

 
$
3,026

 
$
468

 
$
3,034

 
$
29

 
$
3,030

 
$
55

Commercial real estate
12,049

 
12,049

 
1,116

 
11,901

 
11

 
11,777

 
11

Commercial
121

 
121

 
120

 
41

 
—

 
21

 
—

Home equity
—

 
—

 
—

 
204

 
—

 
251

 
—

Consumer
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
49

 
—

Ending balance
15,196

 
15,196

 
1,704

 
15,180

 
40

 
15,128

 
66

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
1,425

 
1,786

 
—

 
1,327

 
5

 
1,310

 
7

Commercial real estate
1,067

 
1,303

 
—

 
1,251

 
4

 
1,477

 
14

Commercial
1,946

 
3,120

 
—

 
1,962

 
2

 
1,993

 
5

Home equity
446

 
632

 
—

 
236

 
4

 
187

 
4

Consumer
—

 
—

 
—

 
2

 
—

 
4

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
4,884

 
6,841

 
—

 
4,778

 
15

 
4,971

 
30

Total impaired loans
$
20,080

 
$
22,037

 
$
1,704

 
$
19,958

 
$
55

 
$
20,099

 
$
96

June 30, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
$
3,067

 
$
3,067

 
$
497

 
$
3,156

 
$
25

 
$
3,137

 
$
52

Commercial real estate
99

 
99

 
29

 
1,256

 
—

 
847

 
—

Commercial
2,744

 
2,744

 
1,400

 
239

 
—

 
633

 
—

Home equity
303

 
303

 
89

 
303

 
—

 
309

 
—

Consumer
—

 
—

 
—

 
—

 
—

 
(11
)
 
—

HPFC
—

 
—

 
—

 
256

 
—

 
128

 
—

Ending Balance
6,213

 
6,213

 
2,015

 
5,210

 
25

 
5,043

 
52

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
1,859

 
2,347

 
—

 
3,071

 
4

 
2,547

 
4

Commercial real estate
2,241

 
2,765

 
—

 
2,655

 
23

 
2,475

 
25

Commercial
717

 
814

 
—

 
3,978

 
(3
)
 
3,281

 
8

Home equity
200

 
387

 
—

 
220

 
(4
)
 
178

 
—

Consumer
7

 
10

 
—

 
7

 
—

 
18

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending Balance
5,024

 
6,323

 
—

 
9,931

 
20

 
8,499

 
37

Total impaired loans
$
11,237

 
$
12,536

 
$
2,015

 
$
15,141

 
$
45

 
$
13,542

 
$
89




 
 
 
 
 
 
 
Year Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
December 31, 2016:
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 

 
 

 
 

 
 

Residential real estate
$
3,019

 
$
3,019

 
$
483

 
$
3,088

 
$
106

Commercial real estate
11,443

 
11,443

 
1,373

 
5,165

 
—

Commercial
—

 
—

 
—

 
762

 
—

Home equity
299

 
299

 
86

 
305

 
—

Consumer
—

 
—

 
—

 
—

 
—

HPFC
97

 
97

 
65

 
98

 
—

Ending Balance
14,858

 
14,858

 
2,007

 
9,418

 
106

Without an allowance recorded:
  

 
  

 
  

 
  

 
  

Residential real estate
1,329

 
1,800

 
—

 
2,057

 
9

Commercial real estate
1,874

 
2,369

 
—

 
2,214

 
51

Commercial
2,028

 
3,209

 
—

 
2,507

 
16

Home equity
158

 
368

 
—

 
180

 
—

Consumer
7

 
10

 
—

 
12

 
—

HPFC
—

 
—

 
—

 
—

 
—

Ending Balance
5,396

 
7,756

 
—

 
6,970

 
76

Total impaired loans
$
20,254

 
$
22,614

 
$
2,007

 
$
16,388

 
$
182