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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)
 6 Months Ended
Jun. 30, 2018
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, 2018 and December 31, 2017 was as follows:   
 
June 30,
2018
 
December 31,
2017
Residential real estate
$
907,910

 
$
858,369

Commercial real estate
1,190,052

 
1,164,023

Commercial
386,393

 
373,400

Home equity
323,671

 
323,378

Consumer
19,506

 
18,149

HPFC
39,997

 
45,120

Total loans
$
2,867,529

 
$
2,782,439
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 totaling:
 
June 30,
2018
 
December 31,
2017
Net unamortized fair value mark discount on acquired loans
$
5,199

 
$
6,207

Net unamortized loan origination costs
(947
)
 
(963
)
Total
$
4,252

 
$
5,244
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, 2018 and 2017, and for the year ended December 31, 2017: 
 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Three and Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL for the three months ended:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
5,497

 
$
10,286

 
$
4,126

 
$
2,427

 
$
230

 
$
424

 
$
22,990

Loans charged off
 
(85
)
 
(86
)
 
(127
)
 
(75
)
 
(16
)
 
—

 
(389
)
Recoveries
 
15

 
2

 
57

 
1

 
2

 
—

 
77

Provision (credit)(1)
 
352

 
108

 
247

 
263

 
44

 
(24
)
 
990

Ending balance
 
$
5,779

 
$
10,310

 
$
4,303

 
$
2,616

 
$
260

 
$
400

 
$
23,668

ALL for the six months ended:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
5,086

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

Loans charged off
 
(116
)
 
(512
)
 
(298
)
 
(224
)
 
(42
)
 
—

 
(1,192
)
Recoveries
 
15

 
15

 
120

 
44

 
5

 
—

 
199

Provision (credit)(1)
 
794

 
(1,056
)
 
310

 
429

 
64

 
(51
)
 
490

Ending balance
 
$
5,779

 
$
10,310

 
$
4,303

 
$
2,616

 
$
260

 
$
400

 
$
23,668

ALL balance attributable to loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
585

 
$
23

 
$
—

 
$
226

 
$
—

 
$
—

 
$
834

Collectively evaluated for impairment
 
5,194

 
10,287

 
4,303

 
2,390

 
260

 
400

 
22,834

Total ending ALL
 
$
5,779

 
$
10,310

 
$
4,303

 
$
2,616

 
$
260

 
$
400

 
$
23,668

Loans:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Individually evaluated for impairment
 
$
5,400

 
$
5,093

 
$
1,611

 
$
487

 
$
—

 
$
—

 
$
12,591

Collectively evaluated for impairment
 
902,510

 
1,184,959

 
384,782

 
323,184

 
19,506

 
39,997

 
2,854,938

Total ending loans balance
 
$
907,910

 
$
1,190,052

 
$
386,393

 
$
323,671

 
$
19,506

 
$
39,997

 
$
2,867,529

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

 
 
Residential
Real Estate
 
Commercial
Real Estate
 
Commercial
 
Home
Equity
 
Consumer
 
HPFC
 
Total
For The Year Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALL:
 
 

 
 

 
 

 
 

 
 

 
 
 
 

Beginning balance
 
$
4,160

 
$
12,154

 
$
3,755

 
$
2,194

 
$
181

 
$
672

 
$
23,116

Loans charged off
 
(482
)
 
(124
)
 
(1,014
)
 
(434
)
 
(124
)
 
(290
)
 
(2,468
)
Recoveries
 
30

 
141

 
301

 
2

 
17

 
6

 
497

Provision (credit)(1)
 
1,378

 
(308
)
 
1,129

 
605

 
159

 
63

 
3,026

Ending balance
 
$
5,086

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

ALL balance attributable to loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
568

 
$
1,441

 
$
—

 
$
—

 
$
—

 
$
—

 
$
2,009

Collectively evaluated for impairment
 
4,518

 
10,422

 
4,171

 
2,367

 
233

 
451

 
22,162

Total ending ALL
 
$
5,086

 
$
11,863

 
$
4,171

 
$
2,367

 
$
233

 
$
451

 
$
24,171

Loans:
 
  

 
  

 
  

 
  

 
  

 
 
 
  

Individually evaluated for impairment
 
$
5,171

 
$
6,199

 
$
1,791

 
$
429

 
$
—

 
$
—

 
$
13,590

Collectively evaluated for impairment
 
853,198

 
1,157,824

 
371,609

 
322,949

 
18,149

 
45,120

 
2,768,849

Total ending loans balance
 
$
858,369

 
$
1,164,023

 
$
373,400

 
$
323,378

 
$
18,149

 
$
45,120

 
$
2,782,439


(1)
The provision 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, 2018 and 2017, and December 31, 2017, the reserve for unfunded commitments was $16,000, $7,000 and $20,000, respectively.
Schedule of Provision for Credit Losses
The following reconciles the three and six months ended June 30, 2018 and 2017, and year ended December 31, 2017 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,
2017
 
 
2018
 
2017
 
2018
 
2017
 
Provision for loan losses
 
$
990

 
$
1,403

 
$
490

 
$
1,984

 
$
3,026

Change in reserve for unfunded commitments
 
(7
)
 
(2
)
 
(4
)
 
(4
)
 
9

Provision for credit losses
 
$
983

 
$
1,401

 
$
486

 
$
1,980

 
$
3,035
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, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pass (Grades 1-6)
 
$
895,277

 
$
1,165,799

 
$
369,697

 
$
—

 
$
—

 
$
38,209

 
$
2,468,982

Performing
 
—

 
—

 
—

 
321,993

 
19,486

 
—

 
341,479

Special Mention (Grade 7)
 
654

 
6,235

 
12,605

 
—

 
—

 
158

 
19,652

Substandard (Grade 8)
 
11,979

 
18,018

 
4,091

 
—

 
—

 
1,630

 
35,718

Non-performing
 
—

 
—

 
—

 
1,678

 
20

 
—

 
1,698

Total
 
$
907,910

 
$
1,190,052

 
$
386,393

 
$
323,671

 
$
19,506

 
$
39,997

 
$
2,867,529

December 31, 2017
 
 

 
 

 
 

 
 

 
 

 
 
 
 
Pass (Grades 1-6)
 
$
846,394

 
$
1,130,235

 
$
354,904

 
$
—

 
$
—

 
$
43,049

 
$
2,374,582

Performing
 
—

 
—

 
—

 
321,727

 
18,149

 
—

 
339,876

Special Mention (Grade 7)
 
922

 
9,154

 
12,517

 
—

 
—

 
191

 
22,784

Substandard (Grade 8)
 
11,053

 
24,634

 
5,979

 
—

 
—

 
1,880

 
43,546

Non-performing
 
—

 
—

 
—

 
1,651

 
—

 
—

 
1,651

Total
 
$
858,369

 
$
1,164,023

 
$
373,400

 
$
323,378

 
$
18,149

 
$
45,120

 
$
2,782,439
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, 2018
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
1,632

 
$
721

 
$
4,653

 
$
7,006

 
$
900,904

 
$
907,910

 
$
—

 
$
5,742

Commercial real estate
4,823

 
25

 
916

 
5,764

 
1,184,288

 
1,190,052

 
—

 
5,600

Commercial
263

 
1,228

 
1,500

 
2,991

 
383,402

 
386,393

 
—

 
1,934

Home equity
995

 
242

 
1,421

 
2,658

 
321,013

 
323,671

 
—

 
1,680

Consumer
62

 
24

 
20

 
106

 
19,400

 
19,506

 
—

 
20

HPFC
264

 
191

 
834

 
1,289

 
38,708

 
39,997

 
—

 
834

Total
$
8,039

 
$
2,431

 
$
9,344

 
$
19,814

 
$
2,847,715

 
$
2,867,529

 
$
—

 
$
15,810

December 31, 2017
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Residential real estate
$
3,871

 
$
1,585

 
$
4,021

 
$
9,477

 
$
848,892

 
$
858,369

 
$
—

 
$
4,979

Commercial real estate
849

 
323

 
5,528

 
6,700

 
1,157,323

 
1,164,023

 
—

 
5,642

Commercial
329

 
359

 
1,535

 
2,223

 
371,177

 
373,400

 
—

 
2,000

Home equity
1,046

 
173

 
1,329

 
2,548

 
320,830

 
323,378

 
—

 
1,650

Consumer
57

 
10

 
—

 
67

 
18,082

 
18,149

 
—

 
—

HPFC
139

 
1,372

 
419

 
1,930

 
43,190

 
45,120

 
—

 
1,043

Total
$
6,291

 
$
3,822

 
$
12,832

 
$
22,945

 
$
2,759,494

 
$
2,782,439

 
$
—

 
$
15,314
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, 2018
 
December 31, 2017
 
June 30, 2018
 
December 31, 2017
 
June 30, 2018
 
December 31, 2017
Residential real estate
 
24

 
24

 
$
3,540

 
$
3,604

 
$
442

 
$
452

Commercial real estate
 
2

 
3

 
352

 
976

 
23

 
16

Commercial
 
6

 
7

 
1,278

 
1,345

 
—

 
—

Home equity
 
2

 
2

 
306

 
307

 
114

 
—

Total
 
34

 
36

 
$
5,476

 
$
6,232

 
$
579

 
$
468
Schedule of Loan Modifications
The following represents loan modifications that qualify as TDRs that occurred for the three and six months ended June 30, 2018 and 2017:
 
 
Number of Contracts
 
Pre-Modification
Outstanding
Recorded Investment
 
Post-Modification
Outstanding
Recorded Investment
 
Specific Reserve
 
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
For the three months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
1

 
—

 
$
163

 
$
—

 
$
186

 
$
—

 
$
39

 
$
—

Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
—

 
1

 
—

 
315

 
—

 
315

 
—

 
—

Total
 
1

 
1

 
$
163

 
$
315

 
$
186

 
$
315

 
$
39

 
$
—

For the six months ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
1

 
—

 
$
163

 
$
—

 
$
186

 
$
—

 
$
39

 
$
—

Maturity concession
 
—

 
1

 
—

 
151

 
—

 
151

 
—

 
15

Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate and maturity concession
 
—

 
1

 
—

 
315

 
—

 
315

 
—

 
—

Total
 
1

 
2

 
$
163

 
$
466

 
$
186

 
$
466

 
$
39

 
$
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, 2018 and 2017, and as of and for the year-ended December 31, 2017:
 
 
 
 
 
 
 
For the
Three Months Ended
 
For the
Six Months Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
June 30, 2018:
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
$
3,506

 
$
3,506

 
$
585

 
$
3,525

 
$
39

 
$
3,636

 
$
69

Commercial real estate
351

 
351

 
23

 
1,971

 
10

 
3,121

 
11

Commercial
—

 
—

 
—

 
—

 
—

 
—

 
—

Home equity
465

 
465

 
226

 
306

 
—

 
204

 
—

Consumer
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
4,322

 
4,322

 
834

 
5,802

 
49

 
6,961

 
80

Without an allowance recorded:
 

 
 

 
 

 
 

 
 

 
 
 
 
Residential real estate
1,894

 
2,200

 
—

 
1,704

 
7

 
1,574

 
14

Commercial real estate(1)
4,742

 
5,080

 
—

 
2,556

 
(3
)
 
1,963

 
—

Commercial
1,611

 
2,785

 
—

 
1,663

 
2

 
1,705

 
4

Home equity(2)
22

 
61

 
—

 
183

 
(2
)
 
265

 
—

Consumer
—

 
—

 
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
—

 
—

 
—

 
—

Ending balance
8,269

 
10,126

 
—

 
6,106

 
4

 
5,507

 
18

Total impaired loans
$
12,591

 
$
14,448

 
$
834

 
$
11,908

 
$
53

 
$
12,468

 
$
98

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


(1)
Negative interest income recognized for the three months ended June 30, 2018 represents the re-allocation of interest income between "without an allowance recorded" and "with an allowance recorded" during the period.
(2)
Negative interest income recognized for the three months ended June 30, 2018 was due to the reversal of interest income recognized for the three months ended March 31, 2018 upon the redefault of a TDR during the three months ended June 30, 2018.

 
 
 
 
 
 
 
For the
Year Ended
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
December 31, 2017:
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 

 
 

 
 

 
 

Residential real estate
$
3,858

 
$
3,858

 
$
568

 
$
3,177

 
$
131

Commercial real estate
5,422

 
5,422

 
1,441

 
8,900

 
22

Commercial
—

 
—

 
—

 
31

 
—

Home equity
—

 
—

 
—

 
125

 
—

Consumer
—

 
—

 
—

 
—

 
—

HPFC
—

 
—

 
—

 
24

 
—

Ending Balance
9,280

 
9,280

 
2,009

 
12,257

 
153

Without an allowance recorded:
  

 
  

 
  

 
  

 
  

Residential real estate
1,313

 
1,673

 
—

 
1,345

 
15

Commercial real estate
777

 
1,084

 
—

 
1,132

 
29

Commercial
1,791

 
2,964

 
—

 
1,920

 
10

Home equity
429

 
495

 
—

 
310

 
8

Consumer
—

 
—

 
—

 
2

 
—

HPFC
—

 
—

 
—

 
—

 
—

Ending Balance
4,310

 
6,216

 
—

 
4,709

 
62

Total impaired loans
$
13,590

 
$
15,496

 
$
2,009

 
$
16,966

 
$
215