Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2018

Composition of Loan Portfolio, Excluding Residential Loans Held for Sale

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:



	December 31,
	2018		2017
Residential real estate loans	$	992,866	$	858,369
Commercial real estate loans	1,269,533		1,164,023
Commercial loans	381,780		373,400
Home equity loans	327,763		323,378
Consumer loans	20,624		18,149
HPFC	33,656		45,120
Total loans	$	3,026,222	$	2,782,439

Schedule of Loan Balances for Each 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:



	December 31,
	2018			2017
Net unamortized fair value mark discount on acquired loans	$	3,936		$	6,207
Net unamortized loan origination costs	(1,865		)	(963		)
Total	$	2,071		$	5,244

Activity in Allowance for Loan Losses by Portfolio Segment

The following table presents the activity in the ALL and select loan information by portfolio segment at or for the periods indicated:



	Residential Real Estate			Commercial Real Estate			Commercial			Home Equity			Consumer			HPFC			Total
At or For The Year Ended December 31, 2018:
ALL:
Beginning balance	$	5,086		$	11,863		$	4,171		$	2,367		$	233		$	451		$	24,171
Loans charged off	(173		)	(512		)	(736		)	(476		)	(96		)	(255		)	(2,248		)
Recoveries	90			28			1,770			44			11			1			1,944
Provision (credit)⁽¹⁾	1,068			275			(1,585		)	861			86			140			845
Ending balance	$	6,071		$	11,654		$	3,620		$	2,796		$	234		$	337		$	24,712
ALL balance attributable loans:
Individually evaluated for impairment	$	586		$	23		$	53		$	162		$	—		$	—		$	824
Collectively evaluated for impairment	5,485			11,631			3,567			2,634			234			337			23,888
Total ending ALL	$	6,071		$	11,654		$	3,620		$	2,796		$	234		$	337		$	24,712
Loans:
Individually evaluated for impairment	$	4,762		$	930		$	786		$	442		$	6		$	—		$	6,926
Collectively evaluated for impairment	988,104			1,268,603			380,994			327,321			20,618			33,656			3,019,296
Total loan balances	$	992,866		$	1,269,533		$	381,780		$	327,763		$	20,624		$	33,656		$	3,026,222
At or 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 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 loan balances	$	858,369		$	1,164,023		$	373,400		$	323,378		$	18,149		$	45,120		$	2,782,439



	Residential Real Estate			Commercial Real Estate			Commercial			Home Equity			Consumer			HPFC			Total
At or 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 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 loan balances	$	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 was presented within accrued interest and other liabilities on the consolidated statements of condition. At December 31, 2018, 2017, and 2016, the reserve for unfunded commitments was $22,000, $20,000 and $11,000, respectively.

Schedule of Provision for Credit Losses

The following table reconciles the provision for loan losses to the provision for credit losses as presented on the consolidated statement of income for the periods indicated:



	For the Year Ended December 31,
	2018		2017		2016
Provision for loan losses	$	845	$	3,026	$	5,269
Change in reserve for unfunded commitments	2		9		(11		)
Provision for credit losses	$	847	$	3,035	$	5,258

Credit Risk Exposure Indicators by Portfolio Segment

The following table 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
December 31, 2018:
Pass (Grades 1 – 6)	$	983,086	$	1,247,190	$	374,429	$	—	$	—	$	32,261	$	2,636,966
Performing	—		—		—		325,917		20,595		—		346,512
Special Mention (Grade 7)	887		7,921		3,688		—		—		123		12,619
Substandard (Grade 8)	8,893		14,422		3,663		—		—		1,272		28,250
Non-performing	—		—		—		1,846		29		—		1,875
Total	$	992,866	$	1,269,533	$	381,780	$	327,763	$	20,624	$	33,656	$	3,026,222
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 (Including Loans Past Due Over Ninety Days and Non Accrual Loans) and Summary of Non Accrual Loans, Which Include Troubled Debt Restructured Loans, and Loans Past Due Over Ninety Days and Accruing

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
December 31, 2018:
Residential real estate	$	3,300	$	2,046	$	4,520	$	9,866	$	983,000	$	992,866	$	—	$	5,492
Commercial real estate	1,794		369		1,108		3,271		1,266,262		1,269,533		—		1,380
Commercial	150		19		799		968		380,812		381,780		—		1,279
Home equity	907		607		1,476		2,990		324,773		327,763		—		1,846
Consumer	67		15		29		111		20,513		20,624		14		15
HPFC	—		183		423		606		33,050		33,656		—		518
Total	$	6,218	$	3,239	$	8,355	$	17,812	$	3,008,410	$	3,026,222	$	14	$	10,530
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 December 31:



	Number of Contracts		Recorded Investment				Specific Reserve
	2018	2017	2018		2017		2018		2017
Residential real estate	25	24	$	3,614	$	3,604	$	443	$	452
Commercial real estate	2	3	347		976		23		16
Commercial	2	7	141		1,345		—		—
Consumer and home equity	2	2	304		307		162		—
Total	31	36	$	4,406	$	6,232	$	628	$	468

Summary of All Troubled Debt Restructuring Loans (Accruing and Non Accruing) by Portfolio Segment

The following represents loan modifications that occurred that qualify as TDRs and the type of loan modification made by portfolio segment for the year ended December 31:



	Number of Contracts			Pre-Modification Outstanding Recorded Investment						Post-Modification Outstanding Recorded Investment						Specific Reserve
	2018	2017	2016	2018		2017		2016		2018		2017		2016		2018		2017		2016
Residential real estate:
Maturity concession	—	2	—	$	—	$	298	$	—	$	—	$	298	$	—	$	—	$	15	$	—
Interest rate concession	—	1	—	—		134		—		—		145		—		—		—		—
Interest rate and maturity concession	2	1	—	231		148		—		254		156		—		50		30		—
Payment deferral	1	—	—	166		—		—		166		—		—		45		—		—
Commercial:
Maturity concession	—	—	6	—		—		2,973		—		—		2,973		—		—		1,400
Home equity:
Interest rate and maturity concession	—	1	—	—		315		—		—		315		—		—		—		—
Total	3	5	6	$	397	$	895	$	2,973	$	420	$	914	$	2,973	$	95	$	45	$	1,400

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 periods indicated:



							For the Year Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2018:
With related allowance recorded:
Residential real estate	$	3,471	$	3,471	$	586	$	3,591	$	127
Commercial real estate	131		131		23		1,969		11
Commercial	556		556		53		111		—
Home equity	318		318		162		250		—
Consumer	—		—		—		—		—
HPFC	—		—		—		—		—
Ending balance	4,476		4,476		824		5,921		138
Without related allowance recorded:
Residential real estate	1,291		1,415		—		1,524		34
Commercial real estate	799		975		—		2,269		13
Commercial	230		293		—		1,379		8
Home equity	124		305		—		195		—
Consumer	6		13		—		1		—
HPFC	—		—		—		—		—
Ending balance	2,450		3,001		—		5,368		55
Total impaired loans	$	6,926	$	7,477	$	824	$	11,289	$	193
December 31, 2017:
With related 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 related 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



							For the Year Ended
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
December 31, 2016:
With related 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 related 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