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Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses

9 Months Ended

Sep. 30, 2020

Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses

Loan and lease receivables consist of the following:


	September 30, 2020		December 31, 2019
	(In Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	240,706	$	226,614
Commercial real estate — non-owner occupied	565,781		516,652
Land development	50,864		51,097
Construction	142,726		109,057
Multi-family	287,583		217,322
1-4 family	38,857		33,359
Total commercial real estate	1,326,517		1,154,101
Commercial and industrial	790,349		503,402
Direct financing leases, net	24,743		28,203
Consumer and other:
Home equity and second mortgages	7,106		7,006
Other	29,341		22,664
Total consumer and other	36,447		29,670
Total gross loans and leases receivable	2,178,056		1,715,376
Less:
Allowance for loan and lease losses	30,817		19,520
Deferred loan fees	7,757		741
Loans and leases receivable, net	$	2,139,482	$	1,695,115

The total amount of the Corporation’s ownership of SBA loans comprised of the following:


	September 30, 2020		December 31, 2019
	(In Thousands)
SBA 7(a) loans	$	41,380	$	40,402
SBA 504 loans	24,833		20,592
SBA Express loans and lines of credit	1,591		1,781
SBA PPP loans	332,342		—
Total SBA loans	$	400,146	$	62,775

As of September 30, 2020 and December 31, 2019, $9.6 million and $12.1 million of SBA loans were considered impaired, respectively.

Loans transferred to third parties consist of the guaranteed portions of SBA 7(a) loans which the Corporation sold in the secondary market and participation interests in other, non-SBA originated loans. The total principal amount of the guaranteed portions of SBA 7(a) loans sold during the three months ended September 30, 2020, and 2019, was $7.9 million and $4.9 million, respectively. The total principal amount of the guaranteed portions of SBA 7(a) loans sold during the nine months ended September 30, 2020, and 2019, was $17.2 million and $10.5 million, respectively. Each of the transfers of these financial assets met the qualifications for sale accounting, and therefore all of the loans transferred during the three and nine months ended September 30, 2020, and 2019, have been derecognized in the unaudited Consolidated Financial Statements. The guaranteed portions of SBA loans were transferred at their fair value and the related gain was recognized upon the transfer as

non-interest income in the unaudited Consolidated Financial Statements. The total outstanding balance of sold SBA loans at September 30, 2020, and December 31, 2019, was $75.1 million and $73.8 million, respectively.

The total principal amount of transferred participation interests in other, non-SBA originated loans during the three months ended September 30, 2020, and 2019, was $7.7 million and $7.5 million, respectively. The total principal amount of transferred participation interests in other, non-SBA originated loans during the nine months ended September 30, 2020, and 2019, was $29.9 million and $31.5 million, respectively, all of which were treated as sales and derecognized under the applicable accounting guidance at the time of transfer. No gain or loss was recognized on participation interests in other, non-SBA originated loans as they were transferred at or near the date of loan origination and the payments received for servicing the portion of the loans participated represents adequate compensation. The total outstanding balance of these transferred loans at September 30, 2020, and December 31, 2019, was $144.1 million and $142.8 million, respectively. As of September 30, 2020, and December 31, 2019, the total amount of the Corporation’s partial ownership of these transferred loans on the unaudited Consolidated Balance Sheets was $266.7 million and $244.6 million, respectively. As of September 30, 2020, the non-SBA originated participation portfolio contained an impaired loan totaling $5.8 million with a sold portion of $4.2 million. There were no loans impaired as of December 31, 2019. The Corporation does not share in the participant’s portion of any potential charge-offs. The total amount of loan participations purchased on the unaudited Consolidated Balance Sheets as of September 30, 2020, and December 31, 2019, was $424,000 and $492,000, respectively.

The following tables illustrate ending balances of the Corporation’s loan and lease portfolio, including impaired loans by class of receivable, and considering certain credit quality indicators:


	September 30, 2020
	Category
	I			II			III			IV			Total
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	173,645		$	34,561		$	24,559		$	7,941		$	240,706
Commercial real estate — non-owner occupied	459,399			79,260			21,309			5,813			565,781
Land development	48,660			1,314			—			890			50,864
Construction	113,476			19,928			9,322			—			142,726
Multi-family	253,849			33,734			—			—			287,583
1-4 family	35,446			1,681			1,350			380			38,857
Total commercial real estate	1,084,475			170,478			56,540			15,024			1,326,517
Commercial and industrial	658,865			51,665			59,126			20,693			790,349
Direct financing leases, net	17,962			289			6,141			351			24,743
Consumer and other:
Home equity and second mortgages	6,389			598			119			—			7,106
Other	29,127			185			—			29			29,341
Total consumer and other	35,516			783			119			29			36,447
Total gross loans and leases receivable	$	1,796,818		$	223,215		$	121,926		$	36,097		$	2,178,056
Category as a % of total portfolio	82.49		%	10.25		%	5.60		%	1.66		%	100.00		%


	December 31, 2019
	Category
	I			II			III			IV			Total
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	187,728		$	18,455		$	16,399		$	4,032		$	226,614
Commercial real estate — non-owner occupied	459,821			55,524			1,307			—			516,652
Land development	49,132			439			—			1,526			51,097
Construction	108,959			—			98			—			109,057
Multi-family	205,750			11,572			—			—			217,322
1-4 family	29,284			1,843			1,759			473			33,359
Total commercial real estate	1,040,674			87,833			19,563			6,031			1,154,101
Commercial and industrial	398,445			34,478			55,904			14,575			503,402
Direct financing leases, net	21,282			579			6,342			—			28,203
Consumer and other:
Home equity and second mortgages	6,307			610			89			—			7,006
Other	22,517			—			—			147			22,664
Total consumer and other	28,824			610			89			147			29,670
Total gross loans and leases receivable	$	1,489,225		$	123,500		$	81,898		$	20,753		$	1,715,376
Category as a % of total portfolio	86.82		%	7.20		%	4.77		%	1.21		%	100.00		%

Each credit is evaluated for proper risk rating upon origination, at the time of each subsequent renewal, upon receipt and evaluation of updated financial information from the Corporation’s borrowers, or as other circumstances dictate. The Corporation primarily uses a nine grade risk rating system to monitor the ongoing credit quality of its loans and leases. The risk rating grades follow a consistent definition and are then applied to specific loan types based on the nature of the loan. Each risk rating is subjective and, depending on the size and nature of the credit, subject to various levels of review and concurrence on the stated risk rating. In addition to its nine grade risk rating system, the Corporation groups loans into four loan and related risk categories which determine the level and nature of review by management.

Category I — Loans and leases in this category are performing in accordance with the terms of the contract and generally exhibit no immediate concerns regarding the security and viability of the underlying collateral, financial stability of the borrower, integrity or strength of the borrowers’ management team, or the industry in which the borrower operates. The Corporation monitors Category I loans and leases through payment performance, continued maintenance of its personal relationships with such borrowers, and continued review of such borrowers’ compliance with the terms of their respective agreements.

Category II — Loans and leases in this category are beginning to show signs of deterioration in one or more of the Corporation’s core underwriting criteria such as financial stability, management strength, industry trends, or collateral values. Management will place credits in this category to allow for proactive monitoring and resolution with the borrower to possibly mitigate the area of concern and prevent further deterioration or risk of loss to the Corporation. Category II loans are considered performing but are monitored frequently by the assigned business development officer and by asset quality review committees.

Category III — Loans and leases in this category are identified by management as warranting special attention. However, the balance in this category is not intended to represent the amount of adversely classified assets held by the Bank. Category III loans and leases generally exhibit undesirable characteristics, such as evidence of adverse financial trends and conditions, managerial problems, deteriorating economic conditions within the related industry, or evidence of adverse public filings and may exhibit collateral shortfall positions. Management continues to believe that it will collect all contractual principal and interest in accordance with the original terms of the contracts relating to the loans and leases in this category, and therefore Category III loans are considered performing with no specific reserves established for this category. Category III loans are monitored by management and asset quality review committees on a monthly basis.

Category IV — Loans and leases in this category are considered to be impaired. Impaired loans and leases, with the exception of performing troubled debt restructurings, have been placed on non-accrual as management has determined that it is unlikely that the Bank will receive the contractual principal and interest in accordance with the original terms of the agreement. Impaired

loans are individually evaluated to assess the need for the establishment of specific reserves or charge-offs. When analyzing the adequacy of collateral, the Corporation obtains external appraisals at least annually for impaired loans and leases. External appraisals are obtained from the Corporation’s approved appraiser listing and are independently reviewed to monitor the quality of such appraisals. To the extent a collateral shortfall position is present, a specific reserve or charge-off will be recorded to reflect the magnitude of the impairment. Loans and leases in this category are monitored by management and asset quality review committees on a monthly basis.

The delinquency aging of the loan and lease portfolio by class of receivable was as follows:


	September 30, 2020
	30-59 Days Past Due			60-89 Days Past Due			Greater Than 90 Days Past Due			Total Past Due			Current			Total Loans and Leases
	(Dollars in Thousands)
Accruing loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	—		$	—		$	232,765		$	232,765
Non-owner occupied	—			—			—			—			559,968			559,968
Land development	—			—			—			—			49,974			49,974
Construction	—			—			—			—			142,726			142,726
Multi-family	—			—			—			—			287,583			287,583
1-4 family	47			—			—			47			38,477			38,524
Commercial and industrial	1,491			530			—			2,021			767,635			769,656
Direct financing leases, net	—			—			—			—			24,392			24,392
Consumer and other:
Home equity and second mortgages	—			—			—			—			7,106			7,106
Other	—			—			—			—			29,312			29,312
Total	1,538			530			—			2,068			2,139,938			2,142,006
Non-accruing loans and leases
Commercial real estate:
Owner occupied	—			272			—			272			7,669			7,941
Non-owner occupied	—			—			—			—			5,813			5,813
Land development	—			—			—			—			890			890
Construction	—			—			—			—			—			—
Multi-family	—			—			—			—			—			—
1-4 family	—			—			333			333			—			333
Commercial and industrial	86			545			7,039			7,670			13,023			20,693
Direct financing leases, net	—			—			—			—			351			351
Consumer and other:
Home equity and second mortgages	—			—			—			—			—			—
Other	—			—			29			29			—			29
Total	86			817			7,401			8,304			27,746			36,050
Total loans and leases
Commercial real estate:
Owner occupied	—			272			—			272			240,434			240,706
Non-owner occupied	—			—			—			—			565,781			565,781
Land development	—			—			—			—			50,864			50,864
Construction	—			—			—			—			142,726			142,726
Multi-family	—			—			—			—			287,583			287,583
1-4 family	47			—			333			380			38,477			38,857
Commercial and industrial	1,577			1,075			7,039			9,691			780,658			790,349
Direct financing leases, net	—			—			—			—			24,743			24,743
Consumer and other:
Home equity and second mortgages	—			—			—			—			7,106			7,106
Other	—			—			29			29			29,312			29,341
Total	$	1,624		$	1,347		$	7,401		$	10,372		$	2,167,684		$	2,178,056
Percent of portfolio	0.07		%	0.06		%	0.35		%	0.48		%	99.52		%	100.00		%


	December 31, 2019
	30-59 Days Past Due			60-89 Days Past Due			Greater Than 90 Days Past Due			Total Past Due			Current			Total Loans and Leases
	(Dollars in Thousands)
Accruing loans and leases
Commercial real estate:
Owner occupied	$	—		$	—		$	—		$	—		$	222,582		$	222,582
Non-owner occupied	—			—			—			—			516,652			516,652
Land development	—			990			—			990			48,581			49,571
Construction	309			—			—			309			108,748			109,057
Multi-family	—			—			—			—			217,322			217,322
1-4 family	—			—			—			—			33,026			33,026
Commercial and industrial	2,707			52			—			2,759			486,068			488,827
Direct financing leases, net	—			—			—			—			28,203			28,203
Consumer and other:
Home equity and second mortgages	—			—			—			—			7,006			7,006
Other	—			—			—			—			22,517			22,517
Total	3,016			1,042			—			4,058			1,690,705			1,694,763
Non-accruing loans and leases
Commercial real estate:
Owner occupied	—			—			342			342			3,690			4,032
Non-owner occupied	—			—			—			—			—			—
Land development	—			—			—			—			1,526			1,526
Construction	—			—			—			—			—			—
Multi-family	—			—			—			—			—			—
1-4 family	—			333			—			333			—			333
Commercial and industrial	4,368			2,717			3,123			10,208			4,367			14,575
Direct financing leases, net	—			—			—			—			—			—
Consumer and other:
Home equity and second mortgages	—			—			—			—			—			—
Other	—			—			147			147			—			147
Total	4,368			3,050			3,612			11,030			9,583			20,613
Total loans and leases
Commercial real estate:
Owner occupied	—			—			342			342			226,272			226,614
Non-owner occupied	—			—			—			—			516,652			516,652
Land development	—			990			—			990			50,107			51,097
Construction	309			—			—			309			108,748			109,057
Multi-family	—			—			—			—			217,322			217,322
1-4 family	—			333			—			333			33,026			33,359
Commercial and industrial	7,075			2,769			3,123			12,967			490,435			503,402
Direct financing leases, net	—			—			—			—			28,203			28,203
Consumer and other:
Home equity and second mortgages	—			—			—			—			7,006			7,006
Other	—			—			147			147			22,517			22,664
Total	$	7,384		$	4,092		$	3,612		$	15,088		$	1,700,288		$	1,715,376
Percent of portfolio	0.43		%	0.24		%	0.21		%	0.88		%	99.12		%	100.00		%

The Corporation’s total impaired assets consisted of the following:


	September 30, 2020		December 31, 2019
	(In Thousands)
Non-accrual loans and leases
Commercial real estate:
Commercial real estate — owner occupied	$	7,941	$	4,032
Commercial real estate — non-owner occupied	5,813		—
Land development	890		1,526
Construction	—		—
Multi-family	—		—
1-4 family	333		333
Total non-accrual commercial real estate	14,977		5,891
Commercial and industrial	20,693		14,575
Direct financing leases, net	351		—
Consumer and other:
Home equity and second mortgages	—		—
Other	29		147
Total non-accrual consumer and other loans	29		147
Total non-accrual loans and leases	36,050		20,613
Foreclosed properties, net	613		2,919
Total non-performing assets	36,663		23,532
Performing troubled debt restructurings	47		140
Total impaired assets	$	36,710	$	23,672


	September 30, 2020		December 31, 2019
Total non-accrual loans and leases to gross loans and leases	1.66	%	1.20	%
Total non-performing assets to total gross loans and leases plus foreclosed properties, net	1.68		1.37
Total non-performing assets to total assets	1.41		1.12
Allowance for loan and lease losses to gross loans and leases	1.41		1.14
Allowance for loan and lease losses to non-accrual loans and leases	85.48		94.70

As of September 30, 2020, and December 31, 2019, $15.4 million and $15.6 million of the non-accrual loans and leases were considered troubled debt restructurings, respectively. The Corporation has allocated $4.4 million and $2.7 million of specific reserves to troubled debt restructurings as of September 30, 2020 and December 31, 2019, respectively. There were no unfunded commitments associated with troubled debt restructured loans and leases as of September 30, 2020.

All loans and leases modified as a troubled debt restructuring are measured for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a default, is considered in the determination of an appropriate level of the allowance for loan and lease losses.

The following table provides the number of loans modified in a troubled debt restructuring and the pre- and post-modification recorded investment by class of receivable:


	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2020
	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	—	$	—	$	—	2	$	299	$	272





Commercial and industrial	—	—		—		3	6,007		5,589




Total	—	$	—	$	—	5	$	6,306	$	5,861


	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2019
	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	2	$	3,774	$	3,741	2	$	3,774	$	3,741





Commercial and industrial	2	2,804		2,804		16	13,412		13,023
Total	4	$	6,578	$	6,545	18	$	17,186	$	16,764

Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, principal reduction, or some combination of these concessions. During the three and nine months ended September 30, 2020, and 2019, the modification of terms primarily consisted of payment schedule modifications or principal reductions.

There were two commercial and industrial loans for a total of $703,000 and two owner-occupied commercial real estate loans for a total of $272,000 modified in troubled debt restructurings during the previous 12 months which subsequently defaulted during the three and nine months ended September 30, 2020. There were no loans modified in a troubled debt restructuring during the 12 months previous to September 30, 2019 which subsequently defaulted during the three and nine months ended September 30, 2019.

The following represents additional information regarding the Corporation’s impaired loans and leases, including performing troubled debt restructurings, by class:


	As of and for the Nine Months Ended September 30, 2020
	Recorded Investment⁽¹⁾		Unpaid Principal Balance			Impairment Reserve		Average Recorded Investment⁽²⁾			Foregone Interest Income			Interest Income Recognized		Net Foregone Interest Income
	(In Thousands)
With no impairment reserve recorded:
Commercial real estate:
Owner occupied	$	4,471	$	4,498		$	—	$	3,092		$	149		$	72	$	77
Non-owner occupied	—		—			—		35			—			—		—
Land development	890		5,187			—		1,295			19			—		19
Construction	—		—			—		—			—			—		—
Multi-family	—		—			—		—			—			—		—
1-4 family	380		385			—		416			30			79		(49)
Commercial and industrial	9,787		12,300			—		10,620			813			316		497
Direct financing leases, net	—		—			—		—			—			—		—
Consumer and other:
Home equity and second mortgages	—		—			—		—			—			—		—
Other	29		695			—		106			32			—		32
Total	15,557		23,065			—		15,564			1,043			467		576
With impairment reserve recorded:
Commercial real estate:
Owner occupied	3,470		4,829			2,974		3,534			297			—		297
Non-owner occupied	5,813		5,813			2,768		21			399			—		399
Land development	—		—		—	—		—		—	—		—	—		—
Construction	—		—		—	—		—		—	—		—	—		—
Multi-family	—		—			—		—			—			—		—
1-4 family	—		—			—		—			—			—		—
Commercial and industrial	10,906		12,228			2,981		5,724			308			—		308
Direct financing leases, net	351		351			175		56			2			—		2
Consumer and other:
Home equity and second mortgages	—		—			—		—			—			—		—
Other	—		—			—		—			—			—		—
Total	20,540		23,221			8,898		9,335			1,006			—		1,006
Total:
Commercial real estate:
Owner occupied	7,941		9,327			2,974		6,626			446			72		374
Non-owner occupied	5,813		5,813			2,768		56			399			—		399
Land development	890		5,187			—		1,295			19			—		19
Construction	—		—			—		—			—			—		—
Multi-family	—		—			—		—			—			—		—
1-4 family	380		385			—		416			30			79		(49)
Commercial and industrial	20,693		24,528			2,981		16,344			1,121			316		805
Direct financing leases, net	351		351			175		56			2			—		2
Consumer and other:
Home equity and second mortgages	—		—			—		—			—			—		—
Other	29		695			—		106			32			—		32
Grand total	$	36,097	$	46,286		$	8,898	$	24,899		$	2,049		$	467	$	1,582

(1)The recorded investment represents the unpaid principal balance net of any partial charge-offs.

(2)Average recorded investment is calculated primarily using daily average balances.


	As of and for the Year Ended December 31, 2019
	Recorded Investment⁽¹⁾		Unpaid Principal Balance		Impairment Reserve		Average Recorded Investment⁽²⁾		Foregone Interest Income		Interest Income Recognized		Net Foregone Interest Income
	(In Thousands)
With no impairment reserve recorded:
Commercial real estate:
Owner occupied	$	387	$	387	$	—	$	3,285	$	64	$	355	$	(291)
Non-owner occupied	—		—		—		58		1		—		1
Land development	1,526		5,823		—		1,843		52		6		46
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	473		478		—		356		19		46		(27)
Commercial and industrial	4,779		6,549		—		14,479		1,073		379		694
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	—		—		—		—		—		7		(7)
Other	147		813		—		191		48		—		48
Total	7,312		14,050		—		20,212		1,257		793		464
With impairment reserve recorded:
Commercial real estate:
Owner occupied	3,645		5,004		1,082		1,511		414		—		414
Non-owner occupied	—		—		—		—		—		—		—
Land development	—		—		—		—		—		—		—
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	—		—		—		—		—		—		—
Commercial and industrial	9,796		11,179		2,283		2,367		1,022		—		1,022
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	—		—		—		—		—		—		—
Other	—		—		—		—		—		—		—
Total	13,441		16,183		3,365		3,878		1,436		—		1,436
Total:
Commercial real estate:
Owner occupied	4,032		5,391		1,082		4,796		478		355		123
Non-owner occupied	—		—		—		58		1		—		1
Land development	1,526		5,823		—		1,843		52		6		46
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	473		478		—		356		19		46		(27)
Commercial and industrial	14,575		17,728		2,283		16,846		2,095		379		1,716
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	—		—		—		—		—		7		(7)
Other	147		813		—		191		48		—		48
Grand total	$	20,753	$	30,233	$	3,365	$	24,090	$	2,693	$	793	$	1,900

(1)The recorded investment represents the unpaid principal balance net of any partial charge-offs.

(2)Average recorded investment is calculated primarily using daily average balances.

The difference between the recorded investment of loans and leases and the unpaid principal balance of $10.2 million and $9.5 million as of September 30, 2020, and December 31, 2019, respectively, represents partial charge-offs of loans and leases resulting from losses due to the appraised value of the collateral securing the loans and leases being below the carrying values of the loans and leases. Impaired loans and leases also included $47,000 and $140,000 of loans as of September 30, 2020, and December 31, 2019, respectively, that were performing troubled debt restructurings, and although not on non-accrual, were reported as impaired due to the concession in terms. When a loan is placed on non-accrual, interest accrual is discontinued and previously accrued but uncollected interest is deducted from interest income. Cash payments collected on non-accrual loans are first applied to such loan’s principal. Foregone interest represents the interest that was contractually due on the loan but not received or recorded. To the extent the amount of principal on a non-accrual loan is fully collected and additional cash is received, the Corporation will recognize interest income.

To determine the level and composition of the allowance for loan and lease losses, the Corporation categorizes the portfolio into segments with similar risk characteristics. First, the Corporation evaluates loans and leases for potential impairment classification. The Corporation analyzes each loan and lease determined to be impaired on an individual basis to determine a specific reserve based upon the estimated value of the underlying collateral for collateral-dependent loans, or alternatively, the present value of expected cash flows. The Corporation applies historical trends from established risk factors to each category of loans and leases that has not been individually evaluated for the purpose of establishing the general portion of the allowance.

A summary of the activity in the allowance for loan and lease losses by portfolio segment is as follows:


	As of and for the Three Months Ended September 30, 2020
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Beginning balance	$	16,438	$	10,179	$	847	$	27,464
Charge-offs	—		(505)		—		(505)
Recoveries	—		21		2		23
Net charge-offs	—		(484)		2		(482)
Provision for loan and lease losses	3,742		127		(34)		3,835

Ending balance	$	20,180	$	9,822	$	815	$	30,817


	As of and for the Three Months Ended September 30, 2019
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Beginning balance	$	11,269	$	7,892	$	658	$	19,819
Charge-offs	—		(1,097)		(2)		(1,099)
Recoveries	1		99		1		101
Net recoveries	1		(998)		(1)		(998)
Provision for loan and lease losses	(132)		1,517		(36)		1,349

Ending balance	$	11,138	$	8,411	$	621	$	20,170


	As of and for the Nine Months Ended September 30, 2020
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Beginning balance	$	10,852	$	8,078	$	590	$	19,520
Charge-offs	(27)		(1,414)		(13)		(1,454)
Recoveries	3		259		2		264
Net charge-offs	(24)		(1,155)		(11)		(1,190)
Provision for loan and lease losses	9,352		2,899		236		12,487

Ending balance	$	20,180	$	9,822	$	815	$	30,817


	As of and for the Nine Months Ended September 30, 2019
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Beginning balance	$	11,662	$	8,079	$	684	$	20,425
Charge-offs	—		(1,158)		(4)		(1,162)
Recoveries	74		191		29		294
Net recoveries	74		(967)		25		(868)
Provision for loan and lease losses	(598)		1,299		(88)		613

Ending balance	$	11,138	$	8,411	$	621	$	20,170

The following tables provide information regarding the allowance for loan and lease losses and balances by type of allowance methodology.


	As of September 30, 2020
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Allowance for loan and lease losses:
Collectively evaluated for impairment	$	14,438	$	6,666	$	815	$	21,919
Individually evaluated for impairment	5,742		3,156		—		8,898

Total	$	20,180	$	9,822	$	815	$	30,817
Loans and lease receivables:
Collectively evaluated for impairment	$	1,311,493	$	794,048	$	36,418	$	2,141,959
Individually evaluated for impairment	15,024		21,044		29		36,097

Total	$	1,326,517	$	815,092	$	36,447	$	2,178,056


	As of December 31, 2019
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Allowance for loan and lease losses:
Collectively evaluated for impairment	$	9,770	$	5,795	$	590	$	16,155
Individually evaluated for impairment	1,082		2,283		—		3,365

Total	$	10,852	$	8,078	$	590	$	19,520
Loans and lease receivables:
Collectively evaluated for impairment	$	1,148,070	$	517,030	$	29,523	$	1,694,623
Individually evaluated for impairment	6,031		14,575		147		20,753

Total	$	1,154,101	$	531,605	$	29,670	$	1,715,376