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Loans (Tables)

6 Months Ended

Jun. 30, 2023

Loans and Leases Receivable Disclosure [Abstract]

The Company’s loan portfolio consisted of the following as of the dates indicated (in thousands):


		Principal Amount Outstanding				Net Deferred Loan (Fees) Costs				Loans, Net
June 30, 2023
Commercial business		$	719,714			$	658			$	720,372
Commercial mortgage			1,965,596				(4,376	)			1,961,220
Residential real estate loans			597,771				13,428				611,199
Residential real estate lines			72,641				3,330				75,971
Consumer indirect			964,466				36,516				1,000,982
Other consumer			28,036				29				28,065
Total		$	4,348,224			$	49,585				4,397,809
Allowance for credit losses – loans											(49,836	)
Total loans, net										$	4,347,973
December 31, 2022
Commercial business		$	663,611			$	638			$	664,249
Commercial mortgage			1,683,814				(3,974	)			1,679,840
Residential real estate loans			576,279				13,681				589,960
Residential real estate lines			74,432				3,238				77,670
Consumer indirect			985,580				38,040				1,023,620
Other consumer			15,002				108				15,110
Total		$	3,998,718			$	51,731				4,050,449
Allowance for credit losses – loans											(45,413	)
Total loans, net										$	4,005,036

Recorded Investment by Loan Class in Current and Nonaccrual Loans

The Company’s recorded investment, by loan class, in current and nonaccrual loans, as well as an analysis of accruing delinquent loans is set forth as of the dates indicated (in thousands):


		30-59 Days Past Due				60-89 Days Past Due				Greater Than 90 Days				Total Past Due				Nonaccrual				Current				Total Loans				Nonaccrual with no allowance
June 30, 2023
Commercial business		$	8			$	—			$	—			$	8			$	415			$	719,291			$	719,714			$	205
Commercial mortgage			453				4,634				—				5,087				2,477				1,958,032				1,965,596				2,477
Residential real estate loans			2,549				20				—				2,569				3,820				591,382				597,771				3,820
Residential real estate lines			53				42				—				95				208				72,338				72,641				208
Consumer indirect			8,896				2,162				—				11,058				2,982				950,426				964,466				2,982
Other consumer			131				11				5				147				—				27,889				28,036				—
Total loans, gross		$	12,090			$	6,869			$	5			$	18,964			$	9,902			$	4,319,358			$	4,348,224			$	9,692
December 31, 2022
Commercial business		$	176			$	10			$	—			$	186			$	340			$	663,085			$	663,611			$	233
Commercial mortgage			—				—				—				—				2,564				1,681,250				1,683,814				659
Residential real estate loans			1,306				28				—				1,334				4,071				570,874				576,279				4,071
Residential real estate lines			264				102				—				366				142				73,924				74,432				142
Consumer indirect			12,637				2,073				—				14,710				3,079				967,791				985,580				3,079
Other consumer			111				1				1				113				1				14,888				15,002				1
Total loans, gross		$	14,494			$	2,214			$	1			$	16,709			$	10,197			$	3,971,812			$	3,998,718			$	8,185

Amortized Cost basis of Loans Modified to Borrowers Experiencing Financial Difficulty

The following table presents the amortized cost basis of loans modified to borrowers experiencing financial difficulty, disaggregated by loan class and type of concession granted as of June 30, 2023 (in thousands):


		Term Extension
		Amortized Cost Basis				% of Total Loans
Loan Type
Commercial business		$	-				0.00	%
Commercial mortgage			-				0.00	%
Residential real estate loans			255				0.04	%
Residential real estate lines			-				0.00	%
Consumer indirect			-				0.00	%
Other consumer			-				0.00	%
Total		$	255				0.01	%

(5.) LOANS (Continued)

Financial Effect of the Modifications Made to Borrowers Experiencing Financial Difficulty

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:


Term Extension
Loan Type		Financial Effect
Residential real estate loans		Added a weighted average 10.0 years to the life of the loans, which reduced monthly payment amount for the borrower.

Performance of Loans that are Modified to Borrowers Experiencing Financial Difficulty

The following table depicts the performance of loans that have been modified in the six months ended June 30, 2023 (in thousands):


		Payment Status (Amortized Cost Basis)
		Current				30-89 Days Past Due				90+ Days Past Due
Loan Type
Commercial business		$	-			$	-			$	-
Commercial mortgage			-				-				-
Residential real estate loans			158				97				-
Residential real estate lines			-				-				-
Consumer indirect			-				-				-
Other consumer			-				-				-
Total		$	158			$	97			$	-

Summary of Collateral Dependent Loans

The following table presents the amortized cost basis of collateral dependent loans by collateral type as of June 30, 2023 and December 31, 2022 (in thousands):


		Collateral type
		Business assets				Real property				Total				Specific Reserve
June 30, 2023
Commercial business		$	3,272			$	78			$	3,350			$	201
Commercial mortgage			—				18,383				18,383				1,004
Total		$	3,272			$	18,461			$	21,733			$	1,205

December 31, 2022
Commercial business		$	147			$	993			$	1,140			$	126
Commercial mortgage			—				21,592				21,592				1,152
Total		$	147			$	22,585			$	22,732			$	1,278

Commercial Loan Portfolio Categorized by Internally Assigned Asset Classification

The following tables set forth the Company’s commercial loan portfolio, categorized by internally assigned asset classification, as of the dates indicated (in thousands):


		Term Loans Amortized Cost Basis by Origination Year
		2023				2022				2021				2020				2019				Prior				Revolving Loans Amortized Cost Basis				Revolving Loans Converted to Term				Total
June 30, 2023
Commercial Business:
Uncriticized		$	55,076			$	155,587			$	91,688			$	40,311			$	24,853			$	59,879			$	245,539			$	—			$	672,933
Special mention			8,422				624				2,381				17,697				54				118				13,094				—				42,390
Substandard			171				97				963				1,199				16				1,294				1,309				—				5,049
Doubtful			—				—				—				—				—				—				—				—				—
Total Commercial Business loans		$	63,669			$	156,308			$	95,032			$	59,207			$	24,923			$	61,291			$	259,942			$	—			$	720,372
Current period gross write-offs		$	—			$	5			$	3			$	12			$	8			$	89			$	—			$	—			$	117

Commercial Mortgage:
Uncriticized		$	257,865			$	545,092			$	383,806			$	242,513			$	154,625			$	330,668			$	—			$	—			$	1,914,569
Special mention			—				340				244				9,545				—				17,007				—				—				27,136
Substandard			—				—				422				105				73				18,915				—				—				19,515
Doubtful			—				—				—				—				—				—				—				—				—
Total Commercial Mortgage loans		$	257,865			$	545,432			$	384,472			$	252,163			$	154,698			$	366,590			$	—			$	—			$	1,961,220
Current period gross write-offs		$	—			$	—			$	—			$	—			$	—			$	18			$	—			$	—			$	18

(5.) LOANS (Continued)


		Term Loans Amortized Cost Basis by Origination Year
		2022				2021				2020				2019				2018				Prior				Revolving Loans Amortized Cost Basis				Revolving Loans Converted to Term				Total
December 31, 2022
Commercial Business
Uncriticized		$	146,581			$	105,001			$	61,115			$	29,644			$	39,625			$	21,467			$	244,848			$	—			$	648,281
Special mention			238				2,351				8,736				7				5				—				1,809				—				13,146
Substandard			—				72				—				42				516				1,034				1,158				—				2,822
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	146,819			$	107,424			$	69,851			$	29,693			$	40,146			$	22,501			$	247,815			$	—			$	664,249
Commercial Mortgage
Uncriticized		$	464,863			$	380,138			$	260,463			$	171,918			$	116,770			$	248,771			$	—			$	—			$	1,642,923
Special mention			—				—				2,319				136				—				11,784				—				—				14,239
Substandard			2,987				202				105				78				10,104				9,202				—				—				22,678
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	467,850			$	380,340			$	262,887			$	172,132			$	126,874			$	269,757			$	—			$	—			$	1,679,840

Retail Loan Portfolio Categorized by Performance Status

The following tables set forth the Company’s retail loan portfolio, categorized by performance status, as of the dates indicated (in thousands):


		Term Loans Amortized Cost Basis by Origination Year
		2023				2022				2021				2020				2019				Prior				Revolving Loans Amortized Cost Basis				Revolving Loans Converted to Term				Total
June 30, 2023
Residential Real Estate Loans
Performing		$	45,664			$	81,353			$	83,363			$	114,966			$	73,542			$	208,491			$	—			$	—			$	607,379
Nonperforming			—				104				885				570				558				1,703				—				—				3,820
Total Residential Real Estate Loans		$	45,664			$	81,457			$	84,248			$	115,536			$	74,100			$	210,194			$	—			$	—			$	611,199
Current period gross write-offs		$	—			$	—			$	—			$	—			$	32			$	70			$	—			$	—			$	102

Residential Real Estate Lines
Performing		$	—			$	—			$	—			$	—			$	—			$	—			$	70,015			$	5,748			$	75,763
Nonperforming			—				—				—				—				—				—				72				136				208
Total Residential Real Estate Lines		$	—			$	—			$	—			$	—			$	—			$	—			$	70,087			$	5,884			$	75,971
Current period gross write-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	28			$	13			$	41

Consumer Indirect
Performing		$	148,651			$	389,735			$	280,256			$	100,445			$	43,797			$	35,116			$	—			$	—			$	998,000
Nonperforming			93				1,098				1,047				320				265				159				—				—				2,982
Total Consumer Indirect Loans		$	148,744			$	390,833			$	281,303			$	100,765			$	44,062			$	35,275			$	—			$	—			$	1,000,982
Current period gross write-offs		$	6			$	2,586			$	2,520			$	849			$	801			$	867			$	—			$	—			$	7,629

Other Consumer
Performing		$	16,073			$	4,920			$	1,995			$	1,421			$	428			$	331			$	2,892			$	—			$	28,060
Nonperforming			—				—				—				—				—				—				5				—				5
Total Other Consumer Loans		$	16,073			$	4,920			$	1,995			$	1,421			$	428			$	331			$	2,897			$	—			$	28,065
Current period gross write-offs		$	455			$	89			$	89			$	25			$	17			$	17			$	28			$	—			$	720

(5.) LOANS (Continued)


		Term Loans Amortized Cost Basis by Origination Year
		2022				2021				2020				2019				2018				Prior				Revolving Loans Amortized Cost Basis				Revolving Loans Converted to Term				Total
December 31, 2022
Residential Real Estate Loans
Performing		$	79,882			$	85,821			$	118,819			$	76,437			$	55,520			$	169,410			$	—			$	—			$	585,889
Nonperforming			—				305				510				795				677				1,784				—				—				4,071
Total		$	79,882			$	86,126			$	119,329			$	77,232			$	56,197			$	171,194			$	—			$	—			$	589,960
Residential Real Estate Lines
Performing		$	—			$	—			$	—			$	—			$	—			$	—			$	70,942			$	6,586			$	77,528
Nonperforming			—				—				—				—				—				—				34				108				142
Total		$	—			$	—			$	—			$	—			$	—			$	—			$	70,976			$	6,694			$	77,670
Consumer Indirect
Performing		$	440,332			$	331,902			$	126,664			$	59,981			$	39,352			$	22,310			$	—			$	—			$	1,020,541
Nonperforming			748				1,209				432				381				205				104				—				—				3,079
Total		$	441,080			$	333,111			$	127,096			$	60,362			$	39,557			$	22,414			$	—			$	—			$	1,023,620
Other Consumer
Performing		$	6,463			$	2,664			$	2,043			$	761			$	213			$	308			$	2,656			$	—			$	15,108
Nonperforming			—				—				—				—				—				—				2				—				2
Total		$	6,463			$	2,664			$	2,043			$	761			$	213			$	308			$	2,658			$	—			$	15,110

Changes in the Allowance for Loan Losses

The following table sets forth the changes in the allowance for credit losses – loans for the three and six months ended June 30, 2023 and 2022 (in thousands):


		Commercial Business				Commercial Mortgage				Residential Real Estate Loans				Residential Real Estate Lines				Consumer Indirect				Other Consumer				Total
Three months ended June 30, 2023
Allowance for credit losses – loans:
Beginning balance		$	12,911			$	15,195			$	4,213			$	651			$	14,117			$	441			$	47,528
Charge-offs			(90	)			(18	)			(39	)			(25	)			(3,009	)			(338	)			(3,519	)
Recoveries			57				2				26				—				2,709				89				2,883
Provision (benefit)			540				1,647				446				84				(511	)			738				2,944
Ending balance		$	13,418			$	16,826			$	4,646			$	710			$	13,306			$	930			$	49,836
Six months ended June 30, 2023
Beginning balance		$	12,585			$	14,412			$	3,301			$	608			$	14,238			$	269			$	45,413
Charge-offs			(117	)			(18	)			(102	)			(41	)			(7,629	)			(720	)			(8,627	)
Recoveries			208				4				31				—				5,491				168				5,902
Provision			742				2,428				1,416				143				1,206				1,213				7,148
Ending balance		$	13,418			$	16,826			$	4,646			$	710			$	13,306			$	930			$	49,836

		Commercial Business				Commercial Mortgage				Residential Real Estate Loans				Residential Real Estate Lines				Consumer Indirect				Other Consumer				Total
Three months ended June 30, 2022
Allowance for credit losses – loans:
Beginning balance		$	10,121			$	13,746			$	1,852			$	425			$	14,568			$	254			$	40,966
Charge-offs			(191	)			—				(56	)			—				(2,672	)			(309	)			(3,228	)
Recoveries			101				2,018				10				12				2,025				102				4,268
Provision (benefit)			109				(3,700	)			334				72				3,411				220				446
Ending balance		$	10,140			$	12,064			$	2,140			$	509			$	17,332			$	267			$	42,452
Six months ended June 30, 2022
Beginning balance			11,099				14,777				1,604				379				11,611				206				39,676
Charge-offs			(242	)			—				(56	)			—				(5,158	)			(685	)			(6,141	)
Recoveries			189				2,019				15				17				3,961				193				6,394
(Benefit) provision			(906	)			(4,732	)			577				113				6,918				553				2,523
Ending balance		$	10,140			$	12,064			$	2,140			$	509			$	17,332			$	267			$	42,452