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

9 Months Ended

Sep. 30, 2021

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, 2021		December 31, 2020
	(In Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	241,977	$	253,882
Commercial real estate — non-owner occupied	639,423		564,532
Land development	39,119		49,839
Construction	139,933		141,043
Multi-family	313,787		311,556
1-4 family	13,487		38,284
Total commercial real estate	1,387,726		1,359,136
Commercial and industrial	681,065		732,318
Direct financing leases	16,810		22,331
Consumer and other:
Home equity and second mortgages	4,576		7,833
Other	35,645		28,897
Total consumer and other	40,221		36,730
Total gross loans and leases receivable	2,125,822		2,150,515
Less:
Allowance for loan and lease losses	24,676		28,521
Deferred loan fees	2,516		4,545
Loans and leases receivable, net	$	2,098,630	$	2,117,449

As of September 30, 2021 and December 31, 2020, the Corporation had $65.9 million and $228.9 million, respectively, in gross PPP loans outstanding included in the commercial and industrial loan category and deferred processing fees outstanding of $1.4 million and $3.5 million, respectively, included in deferred loan fees. The processing fees are deferred and recognized over the contractual life of the loan, or accelerated at forgiveness, as an adjustment of yield using the interest method. The SBA provides a guaranty to the lender of 100% of principal and interest, unless the lender violated an obligation under the agreement. As loan losses are expected to be immaterial, if any at all, due to the guaranty, management excluded the PPP loans from the allowance for loan and lease losses calculation. Management funded these short-term loans primarily through a combination of excess cash held at the Federal Reserve and from an increase in in-market deposits.

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


	September 30, 2021		December 31, 2020
	(In Thousands)
SBA 7(a) loans	$	30,004	$	36,266
SBA 504 loans	34,501		26,327
SBA Express loans and lines of credit	792		1,251
SBA PPP loans	65,904		228,870
Total SBA loans	$	131,201	$	292,714

As of September 30, 2021 and December 31, 2020, $1.9 million and $9.3 million of SBA loans were considered impaired, respectively.

Loans transferred to third parties consist of the guaranteed portions of SBA 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 loans sold during the three months ended September 30, 2021, and 2020, was $5.3 million and $7.9 million, respectively. The total principal amount of the guaranteed portions of SBA loans sold during the nine months ended September 30, 2021, and 2020, was $25.0 million and $17.2 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, 2021, and 2020, 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, 2021, and December 31, 2020, was $90.5 million and $79.5 million, respectively.

The total principal amount of transferred participation interests in other, non-SBA originated loans during the three months ended September 30, 2021, and 2020, was $18.9 million and $7.7 million, respectively. The total principal amount of transferred participation interests in other, non-SBA originated loans during the nine months ended September 30, 2021, and 2020, was $35.8 million and $29.9 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, 2021, and December 31, 2020, was $172.2 million and $153.6 million, respectively. As of September 30, 2021, and December 31, 2020, the total amount of the Corporation’s partial ownership of these transferred loans on the unaudited Consolidated Balance Sheets was $293.7 million and $276.5 million, respectively. As of September 30, 2021, the non-SBA originated participation portfolio contained no impaired loans. As of December 31, 2020, the non-SBA originated participation portfolio contained an impaired loan totaling $3.0 million with a sold portion of $4.2 million. The Corporation does not share in the participant’s portion of any potential charge-offs. There were no loan participations purchased on the unaudited Consolidated Balance Sheets as of September 30, 2021, and the total of loan participations purchased as of December 31, 2020 was $410,000.

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, 2021
	Category
	I			II			III			IV			Total
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	198,544		$	28,600		$	13,724		$	1,109		$	241,977
Commercial real estate — non-owner occupied	528,494			73,998			36,931			—			639,423
Land development	38,398			721			—			—			39,119
Construction	93,218			14,805			31,910			—			139,933
Multi-family	282,569			19,892			11,326			—			313,787
1-4 family	11,726			973			397			391			13,487
Total commercial real estate	1,152,949			138,989			94,288			1,500			1,387,726
Commercial and industrial	579,443			61,642			34,043			5,937			681,065
Direct financing leases, net	11,422			504			4,835			49			16,810
Consumer and other:
Home equity and second mortgages	4,268			236			72			—			4,576
Other	35,501			144			—			—			35,645
Total consumer and other	39,769			380			72			—			40,221
Total gross loans and leases receivable	$	1,783,583		$	201,515		$	133,238		$	7,486		$	2,125,822
Category as a % of total portfolio	83.90		%	9.48		%	6.27		%	0.35		%	100.00		%


	December 31, 2020
	Category
	I			II			III			IV			Total
	(Dollars in Thousands)
Commercial real estate:
Commercial real estate — owner occupied	$	185,943		$	34,917		$	27,593		$	5,429		$	253,882
Commercial real estate — non-owner occupied	432,053			90,942			37,754			3,783			564,532
Land development	47,777			987			185			890			49,839
Construction	104,083			26,444			10,516			—			141,043
Multi-family	278,145			23,386			10,025			—			311,556
1-4 family	35,053			620			2,315			296			38,284
Total commercial real estate	1,083,054			177,296			88,388			10,398			1,359,136
Commercial and industrial	623,346			27,201			65,616			16,155			732,318
Direct financing leases, net	15,597			730			5,955			49			22,331
Consumer and other:
Home equity and second mortgages	7,206			496			91			40			7,833
Other	28,701			175			—			21			28,897
Total consumer and other	35,907			671			91			61			36,730
Total gross loans and leases receivable	$	1,757,904		$	205,898		$	160,050		$	26,663		$	2,150,515
Category as a % of total portfolio	81.75		%	9.57		%	7.44		%	1.24		%	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, 2021
	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	$	—		$	—		$	—		$	—		$	240,868		$	240,868
Non-owner occupied	—			—			—			—			639,423			639,423
Land development	—			—			—			—			39,119			39,119
Construction	—			—			—			—			139,933			139,933
Multi-family	—			—			—			—			313,787			313,787
1-4 family	—			—			—			—			13,096			13,096
Commercial and industrial	272			128			—			400			674,781			675,181
Direct financing leases, net	34			—			—			34			16,727			16,761
Consumer and other:
Home equity and second mortgages	—			—			—			—			4,576			4,576
Other	—			—			—			—			35,645			35,645
Total	306			128			—			434			2,117,955			2,118,389
Non-accruing loans and leases
Commercial real estate:
Owner occupied	841			—			268			1,109			—			1,109
Non-owner occupied	—			—			—			—			—			—
Land development	—			—			—			—			—			—
Construction	—			—			—			—			—			—
Multi-family	—			—			—			—			—			—
1-4 family	39			—			352			391			—			391
Commercial and industrial	92			258			1,443			1,793			4,091			5,884
Direct financing leases, net	—			—			49			49			—			49
Consumer and other:
Home equity and second mortgages	—			—			—			—			—			—
Other	—			—			—			—			—			—
Total	972			258			2,112			3,342			4,091			7,433
Total loans and leases
Commercial real estate:
Owner occupied	841			—			268			1,109			240,868			241,977
Non-owner occupied	—			—			—			—			639,423			639,423
Land development	—			—			—			—			39,119			39,119
Construction	—			—			—			—			139,933			139,933
Multi-family	—			—			—			—			313,787			313,787
1-4 family	39			—			352			391			13,096			13,487
Commercial and industrial	364			386			1,443			2,193			678,872			681,065
Direct financing leases, net	34			—			49			83			16,727			16,810
Consumer and other:
Home equity and second mortgages	—			—			—			—			4,576			4,576
Other	—			—			—			—			35,645			35,645
Total	$	1,278		$	386		$	2,112		$	3,776		$	2,122,046		$	2,125,822
Percent of portfolio	0.06		%	0.02		%	0.10		%	0.18		%	99.82		%	100.00		%


	December 31, 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	$	—		$	—		$	—		$	—		$	248,453		$	248,453
Non-owner occupied	—			—			—			—			560,749			560,749
Land development	7,784			—			—			7,784			41,165			48,949
Construction	—			—			—			—			141,043			141,043
Multi-family	—			—			—			—			311,556			311,556
1-4 family	—			46			—			46			37,988			38,034
Commercial and industrial	663			111			—			774			715,389			716,163
Direct financing leases, net	—			—			—			—			22,282			22,282
Consumer and other:
Home equity and second mortgages	—			—			—			—			7,793			7,793
Other	—			—			—			—			28,876			28,876
Total	8,447			157			—			8,604			2,115,294			2,123,898
Non-accruing loans and leases
Commercial real estate:
Owner occupied	—			—			272			272			5,157			5,429
Non-owner occupied	—			—			3,783			3,783			—			3,783
Land development	890			—			—			890			—			890
Construction	—			—			—			—			—			—
Multi-family	—			—			—			—			—			—
1-4 family	—			—			—			—			250			250
Commercial and industrial	103			342			7,557			8,002			8,153			16,155
Direct financing leases, net	—			—			—			—			49			49
Consumer and other:
Home equity and second mortgages	—			—			—			—			40			40
Other	—			—			21			21			—			21
Total	993			342			11,633			12,968			13,649			26,617
Total loans and leases
Commercial real estate:
Owner occupied	—			—			272			272			253,610			253,882
Non-owner occupied	—			—			3,783			3,783			560,749			564,532
Land development	8,674			—			—			8,674			41,165			49,839
Construction	—			—			—			—			141,043			141,043
Multi-family	—			—			—			—			311,556			311,556
1-4 family	—			46			—			46			38,238			38,284
Commercial and industrial	766			453			7,557			8,776			723,542			732,318
Direct financing leases, net	—			—			—			—			22,331			22,331
Consumer and other:
Home equity and second mortgages	—			—			—			—			7,833			7,833
Other	—			—			21			21			28,876			28,897
Total	$	9,440		$	499		$	11,633		$	21,572		$	2,128,943		$	2,150,515
Percent of portfolio	0.44		%	0.02		%	0.54		%	1.00		%	99.00		%	100.00		%

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


	September 30, 2021		December 31, 2020
	(In Thousands)
Non-accrual loans and leases
Commercial real estate:
Commercial real estate — owner occupied	$	1,109	$	5,429
Commercial real estate — non-owner occupied	—		3,783
Land development	—		890
Construction	—		—
Multi-family	—		—
1-4 family	391		250
Total non-accrual commercial real estate	1,500		10,352
Commercial and industrial	5,884		16,155
Direct financing leases, net	49		49
Consumer and other:
Home equity and second mortgages	—		40
Other	—		21
Total non-accrual consumer and other loans	—		61
Total non-accrual loans and leases	7,433		26,617
Foreclosed properties, net	172		34
Total non-performing assets	7,605		26,651
Performing troubled debt restructurings	53		46
Total impaired assets	$	7,658	$	26,697


	September 30, 2021		December 31, 2020
Total non-accrual loans and leases to gross loans and leases	0.35	%	1.24	%
Total non-performing assets to total gross loans and leases plus foreclosed properties, net	0.36		1.24
Total non-performing assets to total assets	0.29		1.04
Allowance for loan and lease losses to gross loans and leases	1.16		1.33
Allowance for loan and lease losses to non-accrual loans and leases	331.98		107.15

As of September 30, 2021 and December 31, 2020, $857,000 and $6.5 million of the non-accrual loans and leases were considered troubled debt restructurings, respectively. As of September 30, 2021 and December 31, 2020, $201,000 and $760,000 in specific reserves were allocated to troubled debt restructurings, respectively. There were no unfunded commitments associated with troubled debt restructured loans and leases as of September 30, 2021.

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,
	2021
	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 and industrial	1	73		70		2	129		121




Total	1	$	73	$	70	2	$	129	$	121


	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

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, 2021, the modification of terms primarily consisted of payment schedule modifications. During the three and nine months ended September 30, 2020, the modification of terms primarily consisted of payment schedule modifications or principal reductions.

There was one commercial and industrial loan totaling $281,000 modified in a troubled debt restructuring during the previous 12 months which subsequently defaulted during the three and nine months ended September 30, 2021. There were two commercial and industrial loans totaling $703,000 and two owner-occupied commercial real estate loans totaling $272,000 modified in a troubled debt restructuring which subsequently defaulted during the three and nine months ended September 30, 2020.

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, 2021
	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	$	1,109	$	1,147	$	—	$	2,771	$	135	$	—	$	135
Non-owner occupied	—		—		—		3,049		233		16		217
Land development	—		—		—		10		—		—		—
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	391		396		—		261		55		18		37
Commercial and industrial	3,485		3,586		—		8,662		445		113		332
Direct financing leases, net	—		—		—		—		—		—		—
Consumer and other:
Home equity and second mortgages	—		—		—		53		7		9		(2)
Other	—		—		—		11		23		—		23
Total	4,985		5,129		—		14,817		898		156		742
With impairment reserve recorded:
Commercial real estate:
Owner occupied	—		—		—		—		—		—		—
Non-owner occupied	—		—		—		—		—		—		—
Land development	—		—		—		—		—		—		—
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	—		—		—		—		—		—		—
Commercial and industrial	2,452		2,452		1,521		1,834		102		8		94
Direct financing leases, net	49		49		49		49		2		—		2
Consumer and other:
Home equity and second mortgages	—		—		—		—		—		—		—
Other	—		—		—		—		—		—		—
Total	2,501		2,501		1,570		1,883		104		8		96
Total:
Commercial real estate:
Owner occupied	1,109		1,147		—		2,771		135		—		135
Non-owner occupied	—		—		—		3,049		233		16		217
Land development	—		—		—		10		—		—		—
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	391		396		—		261		55		18		37
Commercial and industrial	5,937		6,038		1,521		10,496		547		121		426
Direct financing leases, net	49		49		49		49		2		—		2
Consumer and other:
Home equity and second mortgages	—		—		—		53		7		9		(2)
Other	—		—		—		11		23		—		23
Grand total	$	7,486	$	7,630	$	1,570	$	16,700	$	1,002	$	164	$	838

(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, 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	$	4,338	$	4,365	$	—	$	4,565	$	291	$	72	$	219
Non-owner occupied	3,783		6,563		—		1,519		486		—		486
Land development	890		5,187		—		1,192		14		—		14
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	46		51		—		307		31		141		(110)
Commercial and industrial	9,888		12,337		—		13,951		1,219		423		796
Direct financing leases, net	—		—		—		89		—		—		—
Consumer and other:
Home equity and second mortgages	—		—		—		1		—		—		—
Other	21		688		—		85		41		—		41
Total	18,966		29,191		—		21,709		2,082		636		1,446
With impairment reserve recorded:
Commercial real estate:
Owner occupied	1,091		4,792		471		2,349		384		—		384
Non-owner occupied	—		—		—		—		—		—		—
Land development	—		—		—		—		—		—		—
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	250		250		29		21		—		—		—
Commercial and industrial	6,267		6,972		3,125		3,585		324		—		324
Direct financing leases, net	49		49		49		39		3		—		3
Consumer and other:
Home equity and second mortgages	40		40		7		—		1		—		1
Other	—		—		—		—		—		—		—
Total	7,697		12,103		3,681		5,994		712		—		712
Total:
Commercial real estate:
Owner occupied	5,429		9,157		471		6,914		675		72		603
Non-owner occupied	3,783		6,563		—		1,519		486		—		486
Land development	890		5,187		—		1,192		14		—		14
Construction	—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—
1-4 family	296		301		29		328		31		141		(110)
Commercial and industrial	16,155		19,309		3,125		17,536		1,543		423		1,120
Direct financing leases, net	49		49		49		128		3		—		3
Consumer and other:
Home equity and second mortgages	40		40		7		1		1		—		1
Other	21		688		—		85		41		—		41
Grand total	$	26,663	$	41,294	$	3,681	$	27,703	$	2,794	$	636	$	2,158

(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 $144,000 and $14.6 million as of September 30, 2021, and December 31, 2020, respectively, represents partial charge-offs of loans and leases resulting from losses due to the valuation of the collateral securing the loans and leases being below the carrying values of the loans and leases. Impaired loans and leases also included $53,000 and $46,000 of loans as of September 30, 2021, and December 31, 2020, 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, 2021
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Beginning balance	$	16,876	$	7,881	$	918	$	25,675
Charge-offs	(7)		(356)		(1)		(364)
Recoveries	1,501		128		5		1,634
Net recoveries (charge-offs)	1,494		(228)		4		1,270
Provision for loan and lease losses	(2,736)		563		(96)		(2,269)

Ending balance	$	15,634	$	8,216	$	826	$	24,676


	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) recoveries	—		(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 Nine Months Ended September 30, 2021
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Beginning balance	$	17,157	$	10,593	$	771	$	28,521
Charge-offs	(256)		(3,121)		(25)		(3,402)
Recoveries	3,804		1,041		7		4,852
Net recoveries (charge-offs)	3,548		(2,080)		(18)		1,450
Provision for loan and lease losses	(5,071)		(297)		73		(5,295)

Ending balance	$	15,634	$	8,216	$	826	$	24,676


	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

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


	As of September 30, 2021
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Allowance for loan and lease losses:
Collectively evaluated for impairment	$	15,634	$	6,646	$	826	$	23,106
Individually evaluated for impairment	—		1,570		—		1,570

Total	$	15,634	$	8,216	$	826	$	24,676
Loans and lease receivables:
Collectively evaluated for impairment	$	1,386,226	$	691,889	$	40,221	$	2,118,336
Individually evaluated for impairment	1,500		5,986		—		7,486

Total	$	1,387,726	$	697,875	$	40,221	$	2,125,822


	As of December 31, 2020
	Commercial Real Estate		Commercial and Industrial		Consumer and Other		Total
	(In Thousands)
Allowance for loan and lease losses:
Collectively evaluated for impairment	$	16,657	$	7,419	$	764	$	24,840
Individually evaluated for impairment	500		3,174		7		3,681

Total	$	17,157	$	10,593	$	771	$	28,521
Loans and lease receivables:
Collectively evaluated for impairment	$	1,348,738	$	738,445	$	36,669	$	2,123,852
Individually evaluated for impairment	10,398		16,204		61		26,663

Total	$	1,359,136	$	754,649	$	36,730	$	2,150,515