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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2020

Loans and Allowance for Credit Losses

Schedule of loans, net of unamortized net deferred fees

Loans, net of unamortized net deferred fees, at March 31, 2020 and December 31, 2019 are summarized by type as follows:


	March 31, 2020					December 31, 2019
(dollars in thousands)	Amount			%		Amount		%
Commercial	$	1,773,478		23	%	$	1,545,906	20	%
Income producing - commercial real estate		3,827,024		50	%		3,702,747	50	%
Owner occupied - commercial real estate		971,634		12	%		985,409	13	%
Real estate mortgage - residential		104,558		1	%		104,221	1	%
Construction - commercial and residential		969,166		12	%		1,035,754	14	%
Construction - C&I (owner occupied)		114,138		1	%		89,490	1	%
Home equity		78,228		1	%		80,061	1	%
Other consumer		2,647		—			2,160	—
Total loans		7,840,873		100	%		7,545,748	100	%
Less: allowance for credit losses		(96,336)					(73,658)
Net loans (1)	$	7,744,537	(1)			$	7,472,090

(1)	Excludes accrued interest receivable of $22.6 million and $21.3 million at March 31, 2020 and December 31, 2019, respectively, which is recorded in Other assets.

Schedule of detail activity in the allowance for credit losses by portfolio segment

The following tables detail activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2020 and 2019. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.


			Income Producing -		Owner Occupied -		Real Estate		Construction -
			Commercial		Commercial		Mortgage -		Commercial and		Home		Other
(dollars in thousands)	Commercial		Real Estate		Real Estate		Residential		Residential		Equity		Consumer		Total
For the Three Months Ended March 31, 2020
Allowance for credit losses:
Balance at beginning of period, prior to adoption of ASC 326	$	18,832	$	29,265	$	5,838	$	1,557	$	17,485	$	656	$	25	$	73,658
Impact of adopting ASC 326		892		11,230		4,674		(301)		(6,143)		245		17		10,614
Loans charged-off		—		(550)		—		—		(1,768)		—		—		(2,318)
Recoveries of loans previously charged-off		69		—		—		—		—		—		3		72
Net loans charged-off		69		(550)		—		—		(1,768)		—		3		(2,246)
Provision for credit losses		7,553		3,606		(645)		113		3,767		(83)		(1)		14,310
Ending balance	$	27,346	$	43,551	$	9,867	$	1,369	$	13,341	$	818	$	44	$	96,336
As of March 31, 2020
Allowance for credit losses:
Individually evaluated for impairment	$	7,239	$	1,903	$	375	$	657	$	1,554	$	105	$	—	$	11,833
Collectively evaluated for impairment		20,107		41,648		9,492		712		11,787		713		44		84,503
Ending balance	$	27,346	$	43,551	$	9,867	$	1,369	$	13,341	$	818	$	44	$	96,336

Three Months Ended March 31, 2019
Allowance for credit losses:
Balance at beginning of period	$	15,857	$	28,034	$	6,242	$	965	$	18,175	$	599	$	72	$	69,944
Loans charged-off		(4)		(3,496)		—		—		—		—		—		(3,500)
Recoveries of loans previously charged-off		130		—		—		1		—		—		8		139
Net loans charged-off		126		(3,496)		—		1		—		—		8		(3,361)
Provision for credit losses		1,212		2,227		(262)		(285)		294		6		168		3,360
Ending balance	$	17,195	$	26,765	$	5,980	$	681	$	18,469	$	605	$	248	$	69,943
As of March 31, 2019
Allowance for credit losses:
Individually evaluated for impairment	$	5,892	$	15	$	600	$	—	$	—	$	—	$	—	$	6,507
Collectively evaluated for impairment		11,303		26,750		5,380		681		18,469		605		248		63,436
Ending balance	$	17,195	$	26,765	$	5,980	$	681	$	18,469	$	605	$	248	$	69,943

Schedule of amortized cost basis of collateral-dependent loans by class of loans

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2020:


	Business/Other
(dollars in thousands)	Assets		Real Estate
Commercial	$	15,287	$	3,518
Income producing - commercial real estate		3,193		18,278
Owner occupied - commercial real estate		—		10,645
Real estate mortgage - residential		—		8,052
Construction - commercial and residential		—		6,875
Construction - C&I (owner occupied)		—		—
Home equity		—		541
Other consumer		7		—
Total	$	18,487	$	47,909

Schedule of the risk category of loans by class of loans


March 31, 2020 (dollars in thousands)	2016		2017		2018		2019		2020		Prior		Total
Commercial
Pass		146,077		339,954		324,160		267,490		113,862		495,376		1,686,919
Watch		—		16,892		494		1,010		—		15,828		34,224
Special Mention		—		11,108		11,365		—		—		1,111		23,584
Substandard		4,871		1,652		2,577		1,131		—		18,520		28,751
Total		150,948		369,606		338,596		269,631		113,862		530,835		1,773,478
Income producing - commercial real estate
Pass		417,298		586,243		736,476		897,933		147,214		1,005,065		3,790,229
Watch		—		4,641		—		4,334		—		1,365		10,340
Special Mention		800		—		—		5,542		—		4,854		11,196
Substandard		—		4,984		3,193		—		—		7,082		15,259
Total		418,098		595,868		739,669		907,809		147,214		1,018,366		3,827,024
Owner occupied - commercial real estate
Pass		112,140		120,780		226,702		92,231		689		369,509		922,051
Watch		2,691		—		2,607		—		—		34,500		39,798
Substandard		850		—		—		—		—		8,935		9,785
Total		115,681		120,780		229,309		92,231		689		412,944		971,634
Real estate mortgage - residential
Pass		3,436		11,950		24,773		29,207		4,203		22,316		95,885
Watch		—		—		—		—		—		620		620
Substandard		4,154		2,688		—		—		—		1,211		8,053
Total		7,590		14,638		24,773		29,207		4,203		24,147		104,558
Construction - commercial and residential
Pass		82,642		437,815		292,994		102,645		17,223		28,972		962,291
Substandard		2,303		1,893		—		—		—		2,679		6,875
Total		84,945		439,708		292,994		102,645		17,223		31,651		969,166
Construction - C&I (owner occupied)
Pass		11,742		4,073		39,220		21,460		12,633		11,062		100,190
Watch		—		2,129		11,100		—		—		719		13,948
Total		11,742		6,202		50,320		21,460		12,633		11,781		114,138
Home Equity
Pass		5,598		9,349		8,729		4,935		931		47,201		76,743
Watch		—		—		—		—		—		944		944
Substandard		—		—		—		—		—		541		541
Total		5,598		9,349		8,729		4,935		931		48,686		78,228
Other Consumer
Pass		200		203		136		109		1,173		810		2,631
Substandard		—		—		—		—		—		16		16
Total		200		203		136		109		1,173		826		2,647
Total Recorded Investment	$	794,802	$	1,556,354	$	1,684,526	$	1,428,027	$	297,928	$	2,079,236	$	7,840,873

Schedule of loans by class and credit quality indicators


											Total
(dollars in thousands)	Pass		Watch		Special Mention		Substandard		Doubtful		Loans
December 31, 2019
Commercial	$	1,470,636	$	38,522	$	11,460	$	25,288	$	—	$	1,545,906
Income producing - commercial real estate		3,667,585		16,069		—		19,093		—		3,702,747
Owner occupied - commercial real estate		925,800		53,146		—		6,463		—		985,409
Real estate mortgage - residential		98,228		628		—		5,365		—		104,221
Construction - commercial and residential		1,113,734		—		—		11,510		—		1,125,244
Home equity		78,626		948		—		487		—		80,061
Other consumer		2,160		—		—		—		—		2,160
Total	$	7,356,769	$	109,313	$	11,460	$	68,206	$	—	$	7,545,748

Schedule by class of loan, an aging analysis and the recorded investments in loans past due

The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of March 31, 2020 and December 31, 2019.


	Loans		Loans		Loans								Total Recorded
	30-59 Days		60-89 Days		90 Days or		Total Past		Current				Investment in
(dollars in thousands)	Past Due		Past Due		More Past Due		Due Loans		Loans		Non-Accrual		Loans
March 31, 2020
Commercial	$	4,596	$	168	$	—	$	4,764	$	1,752,396	$	16,318	$	1,773,478
Income producing - commercial real estate		3,376		12,086		—		15,462		3,805,665		5,897		3,827,024
Owner occupied - commercial real estate		288		—		—		288		961,561		9,785		971,634
Real estate mortgage - residential		5,282		—		—		5,282		90,962		8,314		104,558
Construction - commercial and residential		2,062		—		—		2,062		960,229		6,875		969,166
Construction - C&I (owner occupied)		—		—		—		—		114,138		—		114,138
Home equity		592		—		—		592		77,095		541		78,228
Other consumer		8		—		—		8		2,632		7		2,647
Total	$	16,204	$	12,254	$	—	$	28,458	$	7,764,678	$	47,737	$	7,840,873

December 31, 2019
Commercial	$	3,063	$	781	$	—	$	3,844	$	1,527,134	$	14,928	$	1,545,906
Income producing - commercial real estate		—		5,542		—		5,542		3,687,494		9,711		3,702,747
Owner occupied - commercial real estate		13,008		—		—		13,008		965,938		6,463		985,409
Real estate mortgage – residential		3,533		—		—		5,333		95,057		5,631		104,221
Construction - commercial and residential		—		—		—		—		1,113,735		11,509		1,125,244
Home equity		136		192		—		328		79,246		487		80,061
Other consumer		—		9		—		9		2,151		—		2,160
Total	$	19,740	$	6,524	$	—	$	26,264	$	7,470,755	$	48,729	$	7,545,748

Schedule of information related to nonaccrual loans by class

The following presents the nonaccrual loans as of March 31, 2020 and December 31, 2019:


	March 31, 2020						December 31, 2019
	Nonaccrual with		Nonaccrual with		Total		Total
	No Allowance		an Allowance		Nonaccrual		Nonaccrual
(dollars in thousands)	for Credit Loss		for Credit Loss		Loans		Loans

Commercial		9,672		13,093		16,318		14,928
Income producing - commercial real estate		2,704		3,193		5,897		9,711
Owner occupied - commercial real estate		9,008		777		9,785		6,463
Real estate mortgage - residential		5,858		2,717		8,314		5,631
Construction - commercial and residential		3,788		3,087		6,875		11,509
Home equity		53		487		541		487
Other consumer		—		7		7		—
Total	$	31,083	$	23,361	$	47,737	$	48,729

(1)	Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $17.9 million at March 31, 2020 and $16.6.0 million at December 31, 2019.

(2)

Gross interest income of $717 thousand and $701 thousand would have been recorded for the three months ended March 31, 2020 and 2019, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while there was no interest recorded on such loans for the three months ended March 31, 2020 and 2019, respectively. See Note 1 to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status.

Schedule of impaired loans, by class of loan

The following table presents, by class of loan, information related to impaired loans for the period December 31, 2019.


	Unpaid		Recorded		Recorded						Average Recorded		Interest Income
	Contractual		Investment		Investment		Total				Investment		Recognized
	Principal		With No		With		Recorded		Related		Year		Year
(dollars in thousands)	Balance		Allowance		Allowance		Investment		Allowance		To Date		To Date
December 31, 2019
Commercial	$	15,814	$	11,858	$	3,956	$	15,814	$	5,714	$	15,682	$	270
Income producing - commercial real estate		14,093		2,713		11,380		14,093		2,145		18,133		382
Owner occupied - commercial real estate		7,349		6,388		961		7,349		415		6,107		197
Real estate mortgage – residential		5,631		3,175		2,456		5,631		650		5,638		—
Construction - commercial and residential		11,509		11,101		408		11,509		100		8,211		92
Home equity		487		—		487		487		100		487		—
Other consumer		—		—		—		—		—		—		—
Total	$	54,883	$	35,235	$	19,648	$	54,883	$	9,124	$	54,258	$	941

Schedule of loans modified in troubled debt restructurings

The following table presents by class, the recorded investment of loans modified in TDRs held by the Company for the periods ended March 31, 2020 and 2019.


	For the Three Months Ended March 31, 2020
					Income		Owner
	Number				Producing -		Occupied -		Construction -
	of				Commercial		Commercial		Commercial
(dollars in thousands)	Contracts		Commercial		Real Estate		Real Estate		Real Estate		Total
Troubled debt restructurings
Restructured accruing		11	$	1,438	$	15,574	$	860	$	—	$	17,872
Restructured nonaccruing		2		137		—		2,370		—		2,507
Total		13	$	1,575	$	15,574	$	3,230	$	—	$	20,379

Specific allowance			$	—	$	1,007	$	—	$	—	$	1,007

Restructured and subsequently defaulted			$	—	$	—	$	—	$	—	$	—


	For the Three Months Ended March 31, 2019
					Income		Owner
	Number				Producing -		Occupied -		Construction -
	of				Commercial		Commercial		Commercial
(dollars in thousands)	Contracts		Commercial		Real Estate		Real Estate		Real Estate		Total
Troubled debt restructurings
Restructured accruing		10	$	3,218	$	19,622	$	3,337	$	—	$	26,177
Restructured nonaccruing		3		538		—		—		—		538
Total		13	$	3,756	$	19,622	$	3,337	$	—	$	26,715

Specific allowance			$	775	$	3,000	$	—	$	—	$	3,775

Restructured and subsequently defaulted			$	—	$	—	$	—	$	—	$	—