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Loans | 6 Months Ended
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Jun. 30, 2024
Receivables [Abstract] |
Loans | Loans The Company periodically reviews and updates the segmentation of its loan portfolio. Updates performed in conjunction with adoption of ASC 326 in 2023 consisted of reporting what had been a single class, commercial real estate loans, as three classes - commercial real estate owner occupied, commercial real estate non-owner occupied, and commercial multi-family. In addition home equity installment loans which had previously been included in the residential term class were included in the home equity revolving and term class. In the first quarter of 2024, a new segment was established for Agriculture loans; certain prior period information of these loans continues to be included the C&I and CRE non-owner occupied segments. Loan Portfolio by Class: The following table shows the composition of the Company's loan portfolio by class of financing receivable as of June 30, 2024 and 2023 and at December 31, 2023:
| June 30, 2024 |  | December 31, 2023 |  | June 30, 2023 |
Commercial |  |  |  |  |  |  |  |  |
Real estate owner occupied | $ | 341,043,000 |  | 15.1 |  | % | $ | 314,819,000 |  | 14.8 |  | % | $ | 301,320,000 |  | 14.6 |  | %
Real estate non-owner occupied | 406,480,000 |  | 18.1 |  | % | 390,167,000 |  | 18.3 |  | % | 392,878,000 |  | 19.1 |  | %
Construction | 98,726,000 |  | 4.4 |  | % | 88,673,000 |  | 4.2 |  | % | 64,094,000 |  | 3.1 |  | %
C&I | 330,542,000 |  | 14.7 |  | % | 315,026,000 |  | 14.8 |  | % | 307,018,000 |  | 14.9 |  | %
Multifamily | 105,704,000 |  | 4.7 |  | % | 93,476,000 |  | 4.4 |  | % | 93,124,000 |  | 4.5 |  | %
Agriculture | 48,748,000 |  | 2.2 |  | % | 45,230,000 |  | 2.1 |  | % | 48,346,000 |  | 2.3 |  | %
Municipal | 62,105,000 |  | 2.8 |  | % | 51,423,000 |  | 2.4 |  | % | 58,252,000 |  | 2.8 |  | %
Residential |  |  |  |  |  |  |  |  |
Term | 686,006,000 |  | 30.5 |  | % | 674,855,000 |  | 31.7 |  | % | 645,127,000 |  | 31.4 |  | %
Construction | 35,574,000 |  | 1.6 |  | % | 32,358,000 |  | 1.5 |  | % | 30,812,000 |  | 1.5 |  | %
Home Equity |  |  |  |  |  |  |  |  |
Revolving and term | 112,228,000 |  | 5.0 |  | % | 104,026,000 |  | 4.9 |  | % | 99,666,000 |  | 4.8 |  | %
Consumer | 20,514,000 |  | 0.9 |  | % | 19,401,000 |  | 0.9 |  | % | 20,316,000 |  | 1.0 |  | %
Total | $ | 2,247,670,000 |  | 100.0 |  | % | $ | 2,129,454,000 |  | 100.0 |  | % | $ | 2,060,953,000 |  | 100.0 |  | %
Loan balances include net deferred loan costs of $12,130,000 as of June 30, 2024, $11,479,000 as of December 31, 2023, and $10,824,000 as of June 30, 2023. Net deferred loan costs have increased from a year ago and year-to-date based upon loan origination unit volume over the periods, prepayments, and normal repayment activity. Loan balances in the Residential Term segment also include a valuation adjustment for fair value swaps hedged by certain loans in the portfolio. This adjustment subtracted $68,000 from the loan balances as of June 30, 2024 and added $2,149,000 to the loan balances as of December 31, 2023; there was no such adjustment as of June 30, 2023. Pursuant to collateral agreements, qualifying first mortgage loans and commercial real estate loans, which totaled $624,058,000 at June 30, 2024, were used to collateralize borrowings from the FHLBB. This compares to qualifying loans which totaled $561,574,000 at December 31, 2023, and $541,345,000 at June 30, 2023. In addition, commercial, residential construction and home equity loans totaling $353,650,000 at June 30, 2024, $320,083,000 at December 31, 2023, and $331,836,000 at June 30, 2023, were used to collateralize a standby line of credit at the FRBB. Past Due Loans: 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 June 30, 2024, 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 owner occupied | $ | 503,000 |  | $ | 64,000 |  | $ | 383,000 |  | $ | 950,000 |  | $ | 340,093,000 |  | $ | 341,043,000 |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | — |  | 406,480,000 |  | 406,480,000 |  | — |
Construction | — |  | — |  | — |  | — |  | 98,726,000 |  | 98,726,000 |  | — |
C&I | 585,000 |  | — |  | 37,000 |  | 622,000 |  | 329,920,000 |  | 330,542,000 |  | 19,000 |
Multifamily | — |  | — |  | — |  | — |  | 105,704,000 |  | 105,704,000 |  | — |
Agriculture | — |  | — |  | — |  | — |  | 48,748,000 |  | 48,748,000 |  | — |
Municipal | — |  | — |  | — |  | — |  | 62,105,000 |  | 62,105,000 |  | — |
Residential |  |  |  |  |  |  |
Term | 110,000 |  | 232,000 |  | 446,000 |  | 788,000 |  | 685,218,000 |  | 686,006,000 |  | 48,000 |
Construction | — |  | — |  | — |  | — |  | 35,574,000 |  | 35,574,000 |  | — |
Home equity |  |  |  |  |  |  |
Revolving and term | 553,000 |  | 127,000 |  | 67,000 |  | 747,000 |  | 111,481,000 |  | 112,228,000 |  | — |
Consumer | 147,000 |  | 44,000 |  | 20,000 |  | 211,000 |  | 20,303,000 |  | 20,514,000 |  | 20,000 |
Total | $ | 1,898,000 |  | $ | 467,000 |  | $ | 953,000 |  | $ | 3,318,000 |  | $ | 2,244,352,000 |  | $ | 2,247,670,000 |  | $ | 87,000 |
Information on the past-due status of loans by class of financing receivable as of December 31, 2023, 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 owner occupied | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 314,819,000 |  | $ | 314,819,000 |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | — |  | 393,636,000 |  | 393,636,000 |  | — |
Construction | — |  | 9,000 |  | 8,000 |  | 17,000 |  | 88,656,000 |  | 88,673,000 |  | — |
C&I | 714,000 |  | 35,000 |  | 120,000 |  | 869,000 |  | 355,918,000 |  | 356,787,000 |  | 10,000 |
Multifamily | — |  | — |  | — |  | — |  | 93,476,000 |  | 93,476,000 |  | — |
Municipal | 31,000 |  | — |  | — |  | 31,000 |  | 51,392,000 |  | 51,423,000 |  | — |
Residential |  |  |  |  |  |  |
Term | 254,000 |  | 818,000 |  | 728,000 |  | 1,800,000 |  | 673,055,000 |  | 674,855,000 |  | 360,000 |
Construction | — |  | — |  | — |  | — |  | 32,358,000 |  | 32,358,000 |  | — |
Home equity |  |  |  |  |  |  |
Revolving and term | 495,000 |  | 95,000 |  | 26,000 |  | 616,000 |  | 103,410,000 |  | 104,026,000 |  | — |
Consumer | 475,000 |  | 22,000 |  | 58,000 |  | 555,000 |  | 18,846,000 |  | 19,401,000 |  | 59,000 |
Total | $ | 1,969,000 |  | $ | 979,000 |  | $ | 940,000 |  | $ | 3,888,000 |  | $ | 2,125,566,000 |  | $ | 2,129,454,000 |  | $ | 429,000 |
Information on the past-due status of loans by class of financing receivable as of June 30, 2023, 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 owner occupied | $ | 37,000 |  | $ | — |  | $ | — |  | $ | 37,000 |  | $ | 301,283,000 |  | $ | 301,320,000 |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | — |  | 396,388,000 |  | 396,388,000 |  | — |
Construction | — |  | — |  | 8,000 |  | 8,000 |  | 64,086,000 |  | 64,094,000 |  | — |
C&I | 346,000 |  | 43,000 |  | 147,000 |  | 536,000 |  | 351,318,000 |  | 351,854,000 |  | — |
Multifamily | — |  | — |  | — |  | — |  | 93,124,000 |  | 93,124,000 |  | — |
Municipal | — |  | — |  | — |  | — |  | 58,252,000 |  | 58,252,000 |  | — |
Residential |  |  |  |  |  |  |
Term | 58,000 |  | 1,205,000 |  | 376,000 |  | 1,639,000 |  | 643,488,000 |  | 645,127,000 |  | 298,000 |
Construction | — |  | — |  | — |  | — |  | 30,812,000 |  | 30,812,000 |  | — |
Home equity |  |  |  |  |  |  |
Revolving and term | 177,000 |  | — |  | 193,000 |  | 370,000 |  | 99,296,000 |  | 99,666,000 |  | 7,000 |
Consumer | 202,000 |  | 36,000 |  | 14,000 |  | 252,000 |  | 20,064,000 |  | 20,316,000 |  | 13,000 |
Total | $ | 820,000 |  | $ | 1,284,000 |  | $ | 738,000 |  | $ | 2,842,000 |  | $ | 2,058,111,000 |  | $ | 2,060,953,000 |  | $ | 318,000 |
Non-Accrual Loans: 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 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. The following table presents the amortized costs basis of loans on nonaccrual status as of June 30, 2024, December 31, 2023 and June 30, 2023:
| June 30, 2024 | December 31, 2023 | June 30, 2023
Dollars in thousands | Nonaccrual with Allowance for Credit Loss | Nonaccrual with no Allowance for Credit Loss | Total Nonaccrual | Nonaccrual with Allowance for Credit Loss | Nonaccrual with no Allowance for Credit Loss | Total Nonaccrual | Nonaccrual with Allowance for Credit Loss | Nonaccrual with no Allowance for Credit Loss | Total Nonaccrual
Commercial |  |  |  |  |  |  |  |  |
Real estate owner occupied | $ | — |  | $ | 383,000 |  | $ | 383,000 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Construction | — |  | 19,000 |  | 19,000 |  | — |  | 29,000 |  | 29,000 |  | — |  | 30,000 |  | 30,000 |
C&I | — |  | 111,000 |  | 111,000 |  | 354,000 |  | 184,000 |  | 538,000 |  | 372,000 |  | 283,000 |  | 655,000 |
Multifamily | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Agriculture | — |  | 32,000 |  | 32,000 |  | — |  | — |  | — |  | — |  | — |  | — |
Municipal | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |  |  | — |  | — |  | — |
Term | — |  | 1,731,000 |  | 1,731,000 |  | 304,000 |  | 1,011,000 |  | 1,315,000 |  | — |  | 533,000 |  | 533,000 |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Home equity |  |  |  |  |  |  | — |  | — |  | — |
Revolving and term | — |  | 288,000 |  | 288,000 |  | — |  | 296,000 |  | 296,000 |  | — |  | 458,000 |  | 458,000 |
Consumer | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total | $ | — |  | $ | 2,564,000 |  | $ | 2,564,000 |  | $ | 658,000 |  | $ | 1,520,000 |  | $ | 2,178,000 |  | $ | 372,000 |  | $ | 1,304,000 |  | $ | 1,676,000 |
Individually Analyzed Loans: IAL include loans with balances of $250,000 or more that have either been placed into non-accrual, were loans reported as TDR prior to adoption of ASU 2022-02, or are loans identified by management as having characteristics that merit individual analysis. 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 IAL 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 IAL loan is lower than the recorded investment in the loan and estimated selling costs, the difference is written off. The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2024 by collateral type:
| Collateral Type |
| Commercial Real Estate | Residential Real Estate |  | Total
Commercial |  |  |  |
Real estate owner occupied | $ | 283,000 |  | $ | — |  |  | $ | 283,000 |
Real estate non-owner occupied | — | — |  | —
Construction | — | — |  | —
C&I | — | — |  | —
Multifamily | — | — |  | —
Agriculture | — | — |  | —
Municipal | — | — |  | —
Residential |  |  |  |
Term | — | 569,000 |  | 569,000
Construction | — | — |  | —
Home Equity |  |  |  |
Revolving and term | — | — |  | —
Consumer | — | — |  | —
Total | $ | 283,000 |  | $ | 569,000 |  |  | $ | 852,000 |
Collateral-dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment. The following table presents the amortized cost basis of collateral-dependent loans as of December 31, 2023 by collateral type:
|  | Collateral Type |  |
|  | Residential Real Estate |  | Total
Commercial |  |  |  |
Real estate owner occupied |  | $ | — |  |  | $ | — |
Real estate non-owner occupied |  | — |  | —
Construction |  | — |  | —
C&I |  | — |  | —
Multifamily |  | — |  | —
Municipal |  | — |  | —
Residential |  |  |  |
Term |  | 685,000 |  | 685,000
Construction |  | — |  | —
Home Equity |  |  |  |
Revolving and term |  | — |  | —
Consumer |  | — |  | —
Total |  | $ | 685,000 |  |  | $ | 685,000 |
The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2023 by collateral type:
| Collateral Type |  |
| Commercial Real Estate | Residential Real Estate |  | Total
Commercial |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  |  | $ | — |
Real estate non-owner occupied | 725,000 | — |  | 725,000
Construction | — | — |  | —
C&I | — | — |  | —
Multifamily | — | — |  | —
Municipal | — | — |  | —
Residential |  |  |  |
Term | — | 385,000 |  | 385,000
Construction | — | — |  | —
Home Equity |  |  |  |
Revolving and term | — | — |  | —
Consumer | — | — |  | —
Total | $ | 725,000 |  | $ | 385,000 |  |  | $ | 1,110,000 |
Loan Modifications to Borrowers Experiencing Financial Difficulty: Loan modifications to borrowers experiencing financial difficulty may include interest rate reduction, term extension, payment deferral, principle forgiveness or a combination thereof. It is the intent to minimize future losses while providing borrowers with financial relief. The following table represents loan modifications made to borrowers experiencing financial difficulty by modification type and class of financing receivable, during the three months ended June 30, 2024:
Amortized Cost Basis
| Payment Deferral | Term Extension | Interest Rate Reduction | Principal Forgiveness | Combination Payment Deferral and Term Extension | % of Total Class of Financing Receivable
Commercial |  |  |  |  |  |
Real estate owner occupied | $ | 635,000 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | 0.19 | %
Real estate non-owner occupied | — |  | — |  | — |  | — |  | — |  | — | %
Construction | — |  | — |  | — |  | — |  | — |  | — | %
C&I | 177,000 |  | — |  | — |  | — |  | 170,000 |  | 0.05 | %
Multifamily | — |  | — |  | — |  | — |  | — |  | — | %
Agriculture | — |  | — |  | — |  | — |  | — |  | — | %
Municipal | — |  | — |  | — |  | — |  | — |  | — | %
Residential |  |  |  |  |  |
Term | — |  | — |  | — |  | — |  | — |  | — | %
Construction | — |  | — |  | — |  | — |  | — |  | — | %
Home Equity |  |  |  |  |  |
Revolving and term | — |  | — |  | — |  | — |  | — |  | — | %
Consumer | — |  | — |  | — |  | — |  | — |  | — | %
Total | $ | 812,000 |  | $ | — |  | $ | — |  | $ | — |  | $ | 170,000 |  | 0.04 | %
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months ended June 30, 2024:
| Payment Deferral
| Financial Effect
Commercial |
Real estate owner occupied | Temporary payment accommodation, payments deferred to end of loan.
C&I | Temporary payment accommodation, payments deferred to end of loan.
| Payment Deferral & Term Extension
| Financial Effect
Commercial |
C&I | Temporary payment accommodation, extended term 60 days.
The following table represents loan modifications made to borrowers experiencing financial difficulty by modification type and class of financing receivable, during the three months ended June 30, 2023:
Amortized Cost Basis
| Payment Deferral | Term Extension | Interest Rate Reduction | Principal Forgiveness | Combination Payment Deferral and Term Extension | % of Total Class of Financing Receivable
Commercial |  |  |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | — | %
Real estate non-owner occupied | — |  | — |  | — |  | — |  | — |  | — | %
Construction | — |  | — |  | — |  | — |  | — |  | — | %
C&I | — |  | 4,000 |  | — |  | — |  | — |  | 0.001 | %
Multifamily | — |  | — |  | — |  | — |  | — |  | — | %
Agriculture | — |  | — |  | — |  | — |  | — |  | — | %
Municipal | — |  | — |  | — |  | — |  | — |  | — | %
Residential |  |  |  |  |  |
Term | — |  | — |  | — |  | — |  | — |  | — | %
Construction | — |  | — |  | — |  | — |  | — |  | — | %
Home Equity |  |  |  |  |  |
Revolving and term | — |  | — |  | — |  | — |  | — |  | — | %
Consumer | — |  | — |  | — |  | — |  | — |  | — | %
Total | $ | — |  | $ | 4,000 |  | $ | — |  | $ | — |  | $ | — |  | 0.0002 | %
The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months ended June 30, 2023:
Term Extension
| Financial Effect
C&I | Extended Term 90 days
The Company monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified during the previous 12 months as of June 30, 2024:
| Payment Status (Amortized Cost Basis) |
| Current | 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due |
Commercial |  |  |  |  |
Real estate owner occupied | $ | 635,000 |  | $ | 503,000 |  | $ | — |  | $ | 283,000 |  |
Construction | 69,000 |  | — |  | — |  | — |  |
C&I | 402,000 |  | 41,000 |  | — |  | — |  |
Multifamily | 1,932,000 |  | — |  | — |  | — |  |
Residential |  |  |  |  |
Term | 1,023,000 |  | — |  | — |  | — |  |
Home Equity |  |  |  |  |
Revolving and term | 70,000 |  | — |  | — |  | — |  |
Consumer | 19,000 |  | — |  | — |  | 13,000 |  |
Total | $ | 4,150,000 |  | $ | 544,000 |  | $ | — |  | $ | 296,000 |  |
The following table depicts the performance of loans that have been modified during the six months ended June 30, 2023:
| Payment Status (Amortized Cost Basis)
| Current | 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due
Commercial |  |  |  |
C&I | $ | 253,000 |  | $ | — |  | $ | — |  | $ | — |
Total | $ | 253,000 |  | $ | — |  | $ | — |  | $ | — |
Residential Mortgage Loans in Process of Foreclosure As of June 30, 2024, there were two mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $127,000. This compares to five mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $400,000 as of December 31, 2023. There were no mortgage loans collateralized by residential real estate in the process of foreclosure as of June 30, 2023.

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