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Loans

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Loans

Loans

The following table shows the composition of the Company's loan portfolio as of March 31, 2021 and 2020 and at December 31, 2020:

			March 31, 2021												December 31, 2020												March 31, 2020
Commercial
Real estate			$	469,974,000					31.0			%			$	442,121,000					29.9			%			$	382,753,000					28.5			%
Construction			53,394,000						3.5			%			56,565,000						3.8			%			43,913,000						3.3			%
Other			297,488,000						19.6			%			285,015,000						19.3			%			237,896,000						17.7			%
Municipal			49,476,000						3.3			%			43,783,000						3.0			%			43,537,000						3.2			%
Residential
Term			520,317,000						34.3			%			522,070,000						35.3			%			500,971,000						37.3			%
Construction			24,796,000						1.6			%			21,600,000						1.5			%			15,202,000						1.1			%
Home equity line of credit			77,210,000						5.1			%			79,750,000						5.4			%			90,674,000						6.7			%
Consumer			24,117,000						1.6			%			25,857,000						1.8			%			29,262,000						2.2			%
Total			$	1,516,772,000					100.0			%			$	1,476,761,000					100.0			%			$	1,344,208,000					100.0			%

Loan balances include net deferred loan costs of $5,328,000 as of March 31, 2021, $6,931,000 as of December 31, 2020, and $7,551,000 as of March 31, 2020. The decrease in net deferred loan costs year-over-year and year-to-date is attributable to unearned fees and deferred costs associated with PPP loans originated during 2020 and the first quarter 2021. Pursuant to collateral agreements, qualifying first mortgage loans and commercial real estate loans, which totaled $362,271,000 at March 31, 2021, were used to collateralize borrowings from the FHLB. This compares to qualifying loans which totaled $378,183,000 at December 31, 2020, and $401,555,000 at March 31, 2020. In addition, commercial, construction and home equity loans totaling $275,993,000 at March 31, 2021, $259,599,000 at December 31, 2020, and $260,703,000 at March 31, 2020, were used to collateralize a standby line of credit at the Federal Reserve Bank of Boston.

For all loan classes, loans over 30 days past due are considered delinquent. Information on the past-due status of loans by class of financing receivable as of March 31, 2021, is presented in the following table:

			30-59 Days Past Due						60-89 Days Past Due						90+ Days Past Due						All Past Due						Current						Total						90+ Days & Accruing
Commercial
Real estate			$	186,000					$	—					$	283,000					$	469,000					$	469,505,000					$	469,974,000					$	—
Construction			47,000						—						80,000						127,000						53,267,000						53,394,000						—
Other			696,000						11,000						628,000						1,335,000						296,153,000						297,488,000						9,000
Municipal			—						—						—						—						49,476,000						49,476,000						—
Residential
Term			1,183,000						148,000						958,000						2,289,000						518,028,000						520,317,000						71,000
Construction			111,000						—						—						111,000						24,685,000						24,796,000						—
Home equity line of credit			547,000						45,000						408,000						1,000,000						76,210,000						77,210,000						—
Consumer			284,000						2,000						5,000						291,000						23,826,000						24,117,000						5,000
Total			$	3,054,000					$	206,000					$	2,362,000					$	5,622,000					$	1,511,150,000					$	1,516,772,000					$	85,000

On March 22, 2020, banking regulators issued an Interagency Statement on Loan Modifications and Reporting in response to the onset of COVID-19; shortly thereafter, on March 30, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed. Both the Interagency Statement and the CARES Act provided an exemption for qualified modifications from Troubled Debt Restructure (TDR) designation, which was extended by the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020. The Company actively worked with borrowers impacted by the COVID-19 outbreak and as of March 31, 2021, a total of 1037 loan modification requests for interest-only payments or deferred payments had been completed in conformance with the Interagency Statement or CARES Act, representing $292,003,000 in loan balances, or approximately 20.0% of the loan portfolio excluding PPP balances. One of these modifications of de minimis amount has been classified as a Troubled Debt Restructure since being modified. So long as modified terms are met, loans in an active modification are not included in past due loan totals and continue to accrue interest.

As of March 31, 2021, loans totaling $50.6 million, or 3.3% of all loans, remained in either their original modification or a subsequent modification. Modification statuses by portfolio segment are summarized below:

Commercial/Municipal Loan Modifications
			Units			Percentage			Balance			Percentage
Paid Off			90			15.0		%	$	14,002,000		6.0		%
Subsequent Modification			30			5.0		%	30,435,000			13.0		%
Still in Original Modification			11			2.0		%	1,595,000			1.0		%
Out of Modification			475			78.0		%	193,212,000			80.0		%
Total			606			100.0		%	$	239,244,000		100.0		%
Residential Real Estate Modifications
			Units			Percentage			Balance			Percentage
Paid Off			41			11.0		%	$	8,269,000		16.0		%
Subsequent Modification			136			38.0		%	16,595,000			32.0		%
Still in Original Modification			16			4.0		%	1,853,000			4.0		%
Out of Modification			170			47.0		%	24,960,000			48.0		%
Total			363			100.0		%	$	51,677,000		100.0		%

Consumer Loan Modifications
			Units			Percentage			Balance			Percentage
Paid Off			17			25.0		%	$	129,000		12.0		%
Subsequent Modification			2			3.0		%	62,000			6.0		%
Still in Original Modification			2			3.0		%	27,000			2.0		%
Out of Modification			47			69.0		%	864,000			80.0		%
Total			68			100.0		%	$	1,082,000		100.0		%

Information on the past-due status of loans by class of financing receivable as of December 31, 2020, is presented in the following table:

			30-59 Days Past Due						60-89 Days Past Due						90+ Days Past Due						All Past Due						Current						Total						90+ Days & Accruing
Commercial
Real estate			$	139,000					$	190,000					$	226,000					$	555,000					$	441,566,000					$	442,121,000					$	—
Construction			13,000						—						80,000						93,000						56,472,000						56,565,000						—
Other			490,000						62,000						2,082,000						2,634,000						282,381,000						285,015,000						1,464,000
Municipal			—						—						—						—						43,783,000						43,783,000						—
Residential
Term			540,000						1,799,000						1,616,000						3,955,000						518,115,000						522,070,000						23,000
Construction			—						—						—						—						21,600,000						21,600,000						—
Home equity line of credit			1,645,000						324,000						367,000						2,336,000						77,414,000						79,750,000						—
Consumer			89,000						42,000						18,000						149,000						25,708,000						25,857,000						18,000
Total			$	2,916,000					$	2,417,000					$	4,389,000					$	9,722,000					$	1,467,039,000					$	1,476,761,000					$	1,505,000

Information on the past-due status of loans by class of financing receivable as of March 31, 2020, is presented in the following table:

			30-59 Days Past Due						60-89 Days Past Due						90+ Days Past Due						All Past Due						Current						Total						90+ Days & Accruing
Commercial
Real estate			$	2,935,000					$	2,000					$	1,297,000					$	4,234,000					$	378,519,000					$	382,753,000					$	22,000
Construction			59,000						—						246,000						305,000						43,608,000						43,913,000						—
Other			1,678,000						295,000						3,895,000						5,868,000						232,028,000						237,896,000						3,536,000
Municipal			—						—						—						—						43,537,000						43,537,000						—
Residential
Term			4,270,000						171,000						3,320,000						7,761,000						493,210,000						500,971,000						192,000
Construction			—						—						—						—						15,202,000						15,202,000						—
Home equity line of credit			1,566,000						264,000						1,481,000						3,311,000						87,363,000						90,674,000						—
Consumer			250,000						18,000						82,000						350,000						28,912,000						29,262,000						20,000
Total			$	10,758,000					$	750,000					$	10,321,000					$	21,829,000					$	1,322,379,000					$	1,344,208,000					$	3,770,000

For all classes, loans are placed on non-accrual status when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when principal and interest is 90 days or more past due unless the loan is both well secured and in the process of collection (in which case the loan may continue to accrue interest in spite of its past due status). A loan is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially responsible party. A loan is "in the process of collection" if collection of the loan is proceeding in due course either (1) through legal action, including judgment enforcement procedures, or, (2) in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in its restoration to a current status in the near future.

Cash payments received on non-accrual loans, which are included in impaired loans, are applied to reduce the loan's principal balance until the remaining principal balance is deemed collectible, after which interest is recognized when collected. As a general rule, a loan may be restored to accrual status when payments are current for a substantial period of time, generally six months, and repayment of the remaining contractual amounts is expected, or when it otherwise becomes well secured and in the process of collection. Information on nonaccrual loans as of March 31, 2021 and 2020 and at December 31, 2020 is presented in the following table:

			March 31, 2021						December 31, 2020						March 31, 2020
Commercial
Real estate			$	748,000					$	543,000					$	1,748,000
Construction			89,000						89,000						246,000
Other			1,675,000						1,481,000						457,000
Municipal			—						—						—
Residential
Term			3,577,000						3,593,000						5,615,000
Construction			—						—						—
Home equity line of credit			852,000						1,015,000						1,916,000
Consumer			—						—						66,000
Total			$	6,941,000					$	6,721,000					$	10,048,000

Impaired loans include TDR loans and loans placed on non-accrual. These loans are measured at the present value of expected future cash flows discounted at the loan's effective interest rate or at the fair value of the collateral if the loan is collateral dependent. If the measure of an impaired loan is lower than the recorded investment in the loan and estimated selling costs, a specific reserve is established for the difference, or, in certain situations, if the measure of an impaired loan is lower than the recorded investment in the loan and estimated selling costs, the difference is written off.

A breakdown of impaired loans by class of financing receivable as of and for the period ended March 31, 2021 is presented in the following table:

																					For the three months ended March 31, 2021
			Recorded Investment						Unpaid Principal Balance						Related Allowance						Average Recorded Investment						Recognized Interest Income
With No Related Allowance
Commercial
Real estate			$	2,223,000					$	2,550,000					$	—					$	2,179,000					$	17,000
Construction			89,000						89,000						—						89,000						—
Other			1,593,000						1,650,000						—						1,654,000						5,000
Municipal			—						—						—						—						—
Residential
Term			7,183,000						8,416,000						—						7,184,000						35,000
Construction			—						—						—						—						—
Home equity line of credit			852,000						928,000						—						872,000						—
Consumer			7,000						7,000						—						7,000						—
			$	11,947,000					$	13,640,000					$	—					$	11,985,000					$	57,000
With an Allowance Recorded
Commercial
Real estate			$	978,000					$	1,013,000					$	174,000					$	968,000					$	9,000
Construction			681,000						681,000						21,000						681,000						6,000
Other			627,000						643,000						563,000						525,000						—
Municipal			—						—						—						—						—
Residential
Term			2,084,000						2,113,000						142,000						1,957,000						16,000
Construction			—						—						—						—						—
Home equity line of credit			23,000						23,000						—						8,000						—
Consumer			—						—						—						—						—
			$	4,393,000					$	4,473,000					$	900,000					$	4,139,000					$	31,000
Total
Commercial
Real estate			$	3,201,000					$	3,563,000					$	174,000					$	3,147,000					$	26,000
Construction			770,000						770,000						21,000						770,000						6,000
Other			2,220,000						2,293,000						563,000						2,179,000						5,000
Municipal			—						—						—						—						—
Residential
Term			9,267,000						10,529,000						142,000						9,141,000						51,000
Construction			—						—						—						—						—
Home equity line of credit			875,000						951,000						—						880,000						—
Consumer			7,000						7,000						—						7,000						—
			$	16,340,000					$	18,113,000					$	900,000					$	16,124,000					$	88,000

Substantially all interest income recognized on impaired loans for all classes of financing receivables was recognized on a cash basis as received.

A breakdown of impaired loans by class of financing receivable as of and for the year ended December 31, 2020 is presented in the following table:

			Recorded Investment						Unpaid Principal Balance						Related Allowance						Average Recorded Investment						Recognized Interest Income
With No Related Allowance
Commercial
Real estate			$	2,060,000					$	2,368,000					$	—					$	4,123,000					$	127,000
Construction			89,000						89,000						—						358,000						—
Other			1,591,000						1,623,000						—						999,000						15,000
Municipal			—						—						—						—						—
Residential
Term			7,335,000						8,629,000						—						8,773,000						193,000
Construction			—						—						—						—						—
Home equity line of credit			1,015,000						1,089,000						—						1,219,000						—
Consumer			8,000						8,000						—						1,000						1,000
			$	12,098,000					$	13,806,000					$	—					$	15,473,000					$	336,000
With an Allowance Recorded
Commercial
Real estate			$	969,000					$	995,000					$	112,000					$	1,018,000					$	43,000
Construction			681,000						681,000						18,000						579,000						30,000
Other			188,000						202,000						169,000						1,193,000						3,000
Municipal			—						—						—						—						—
Residential
Term			2,079,000						2,134,000						163,000						2,073,000						65,000
Construction			—						—						—						—						—
Home equity line of credit			24,000						24,000						—						744,000						1,000
Consumer			—						—						—						8,000						—
			$	3,941,000					$	4,036,000					$	462,000					$	5,615,000					$	142,000
Total
Commercial
Real estate			$	3,029,000					$	3,363,000					$	112,000					$	5,141,000					$	170,000
Construction			770,000						770,000						18,000						937,000						30,000
Other			1,779,000						1,825,000						169,000						2,192,000						18,000
Municipal			—						—						—						—						—
Residential
Term			9,414,000						10,763,000						163,000						10,846,000						258,000
Construction			—						—						—						—						—
Home equity line of credit			1,039,000						1,113,000						—						1,963,000						1,000
Consumer			8,000						8,000						—						9,000						1,000
			$	16,039,000					$	17,842,000					$	462,000					$	21,088,000					$	478,000

A breakdown of impaired loans by class of financing receivable as of and for the period ended March 31, 2020 is presented in the following table:

																					For the three months ended March 31, 2020
			Recorded Investment						Unpaid Principal Balance						Related Allowance						Average Recorded Investment						Recognized Interest Income
With No Related Allowance
Commercial
Real estate			$	5,162,000					$	5,421,000					$	—					$	5,157,000					$	47,000
Construction			246,000						265,000						—						717,000						—
Other			818,000						848,000						—						793,000						3,000
Municipal			—						—						—						—						—
Residential
Term			10,378,000						12,135,000						—						10,015,000						67,000
Construction			—						—						—						—						—
Home equity line of credit			1,232,000						1,306,000						—						1,185,000						4,000
Consumer			—						—						—						—						—
			$	17,836,000					$	19,975,000					$	—					$	17,867,000					$	121,000
With an Allowance Recorded
Commercial
Real estate			$	1,061,000					$	1,082,000					$	230,000					$	1,064,000					$	8,000
Construction			701,000						701,000						3,000						234,000						10,000
Other			172,000						194,000						172,000						4,269,000						—
Municipal			—						—						—						—						—
Residential
Term			1,660,000						1,755,000						233,000						1,999,000						13,000
Construction			—						—						—						—						—
Home equity line of credit			996,000						1,002,000						296,000						1,124,000						—
Consumer			67,000						67,000						58,000						26,000						—
			$	4,657,000					$	4,801,000					$	992,000					$	8,716,000					$	31,000
Total
Commercial
Real estate			$	6,223,000					$	6,503,000					$	230,000					$	6,221,000					$	55,000
Construction			947,000						966,000						3,000						951,000						10,000
Other			990,000						1,042,000						172,000						5,062,000						3,000
Municipal			—						—						—						—						—
Residential
Term			12,038,000						13,890,000						233,000						12,014,000						80,000
Construction			—						—						—						—						—
Home equity line of credit			2,228,000						2,308,000						296,000						2,309,000						4,000
Consumer			67,000						67,000						58,000						26,000						—
			$	22,493,000					$	24,776,000					$	992,000					$	26,583,000					$	152,000

Troubled Debt Restructured

A "TDR" constitutes a restructuring of debt if the Company, for economic or legal reasons related to the borrower's financial difficulties, grants a concession to the borrower that it would not otherwise consider. To determine whether or not a loan should be classified as a TDR, Management evaluates a loan based upon the following criteria:

•The borrower demonstrates financial difficulty; common indicators include past due status with bank obligations, substandard credit bureau reports, or an inability to refinance with another lender, and

•The Company has granted a concession; common concession types include maturity date extension, interest rate adjustments to below market pricing, and deferment of payments.

As of March 31, 2021, the Company had 73 loans with a balance of $11,306,000 that have been classified as TDRs. This compares to 74 loans with a balance of $11,534,000 and 81 loans with a balance of $14,968,000 classified as TDRs as of December 31, 2020 and March 31, 2020, respectively. The impairment carried as a specific reserve in the allowance for loan losses is calculated by present valuing the expected cash flows on the loan at the original interest rate, or, for collateral-dependent loans, using the fair value of the collateral less costs to sell.

The following table shows TDRs by class and the specific reserve as of March 31, 2021:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			13						$	2,525,000					$	174,000
Construction			1						681,000						21,000
Other			7						964,000						358,000
Municipal			—						—						—
Residential
Term			49						6,947,000						142,000
Construction			—						—						—
Home equity line of credit			2						182,000						—
Consumer			1						7,000						—
			73						$	11,306,000					$	695,000

The following table shows TDRs by class and the specific reserve as of December 31, 2020:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			13						$	2,558,000					$	106,000
Construction			1						681,000						18,000
Other			6						717,000						96,000
Municipal			—						—						—
Residential
Term			51						7,384,000						149,000
Construction			—						—						—
Home equity line of credit			2						186,000						—
Consumer			1						8,000						—
			74						$	11,534,000					$	369,000

The following table shows TDRs by class and the specific reserve as of March 31, 2020:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			16						$	4,688,000					$	225,000
Construction			1						701,000						3,000
Other			7						779,000						131,000
Municipal			—						—						—
Residential
Term			54						8,321,000						197,000
Construction			—						—						—
Home equity line of credit			3						479,000						—
Consumer			—						—						—
			81						$	14,968,000					$	556,000

As of March 31, 2021, 11 of the loans classified as TDRs with a total balance of $1,017,000 were more than 30 days past due. Of these loans, none had been placed on TDR status in the previous 12 months. The following table shows these TDRs by class and the associated specific reserves included in the allowance for loan losses as of March 31, 2021:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			2						$	72,000					$	72,000
Construction			—						—						—
Other			4						419,000						92,000
Municipal			—						—						—
Residential
Term			4						366,000						—
Construction			—						—						—
Home equity line of credit			1						160,000						—
Consumer			—						—						—
			11						$	1,017,000					$	164,000

As of March 31, 2020, 22 of the loans classified as TDRs with a total balance of $3,622,000 were more than 30 days past due. Of these loans, one had been placed on TDR status in the previous 12 months. The following table shows these TDRs by class and the associated specific reserves included in the allowance for loan losses as of March 31, 2020:

			Number of Loans						Balance						Specific Reserves
Commercial
Real estate			2						$	618,000					$	—
Construction			—						—						—
Other			4						540,000						131,000
Municipal			—						—						—
Residential
Term			15						2,297,000						24,000
Construction			—						—						—
Home equity line of credit			1						167,000						—
Consumer			—						—						—
			22						$	3,622,000					$	155,000

For the three months ended March 31, 2021, one loan was placed on TDR status. The following table shows this TDR, by class and the associated specific reserve included in the allowance for loan losses as of March 31, 2021:

			Number of Loans						Pre-Modification Outstanding Recorded Investment						Post-Modification Outstanding Recorded Investment						Specific Reserves
Commercial
Real estate			—						$	—					$	—					$	—
Construction			—						—						—						—
Other			1						262,000						262,000						262,000
Municipal			—						—						—						—
Residential
Term			—						—						—						—
Construction			—						—						—						—
Home equity line of credit			—						—						—						—
Consumer			—						—						—						—
			1						$	262,000					$	262,000					$	262,000

For the three months ended March 31, 2020, two loans were placed on TDR status. The following table shows these TDRs by class and associated specific reserves included in the allowance for loan losses as of March 31, 2020:

			Number of Loans						Pre-Modification Outstanding Recorded Investment						Post-Modification Outstanding Recorded Investment						Specific Reserves
Commercial
Real estate			—						$	—					$	—					$	—
Construction			—						—						—						—
Other			—						—						—						—
Municipal			—						—						—						—
Residential
Term			2						235,000						190,000						—
Construction			—						—						—						—
Home equity line of credit			—						—						—						—
Consumer			—						—						—						—
			2						$	235,000					$	190,000					$	—

As of March 31, 2021, Management is aware of six loans classified as TDRs that are involved in bankruptcy with an outstanding balance of $708,000. There were also 21 loans with an outstanding balance of $1,908,000 that were classified as TDRs and on non-accrual status, of which one loan with an outstanding balance of $92,000 was in the process of foreclosure.

Residential Mortgage Loans in Process of Foreclosure

As of March 31, 2021, there were 14 mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $1,067,000. This compares to 15 mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $2,284,000 as of March 31, 2020.

X

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2196772

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X

- References

No definition available.

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