LOANS | LOANS The Company’s loan portfolio is segregated into the following segments: commercial real estate, commercial and industrial, residential mortgage, and consumer. Commercial real estate loans include construction and other commercial real estate. Residential mortgage loans include classes for 1-4 family owner occupied and construction loans. Consumer loans include home equity, direct and indirect auto, and other. These portfolio segments each have unique risk characteristics that are considered when determining the appropriate level for the allowance for loan losses. A substantial portion of the loan portfolio is secured by real estate in Massachusetts, southern Vermont, northeastern New York, New Jersey, and in the Bank’s other New England lending areas. The ability of many of the Bank’s borrowers to honor their contracts is dependent, among other things, on the specific economy and real estate markets of these areas. Total loans include business activity loans and acquired loans. Acquired loans are those loans acquired from previous mergers and acquisitions. Acquired loans that are refinanced are transferred to business activity loans. Business activity and acquired loans are serviced, managed, and accounted for under the Company's same control environment. During the period ended June 30, 2019, the Company reclassified $176 million of aircraft loans from commercial and industrial to held-for-sale, reflecting its intent to sell the portfolio. These loans are not contained in the balances below. The following is a summary of total loans: June 30, 2019 December 31, 2018 (In thousands) Business Acquired Total Business Acquired Total Commercial real estate: Construction $ 300,996 $ 58,497 $ 359,493 $ 327,792 $ 25,220 $ 353,012 Other commercial real estate 2,358,502 1,287,352 3,645,854 2,260,919 786,290 3,047,209 Total commercial real estate 2,659,498 1,345,849 4,005,347 2,588,711 811,510 3,400,221 Commercial and industrial loans: 1,471,766 515,531 1,987,297 1,513,538 466,508 1,980,046 Total commercial loans 4,131,264 1,861,380 5,992,644 4,102,249 1,278,018 5,380,267 Residential mortgages: 1-4 family 2,268,445 596,607 2,865,052 2,317,716 238,952 2,556,668 Construction 9,170 8,158 17,328 9,582 174 9,756 Total residential mortgages 2,277,615 604,765 2,882,380 2,327,298 239,126 2,566,424 Consumer loans: Home equity 281,254 122,576 403,830 289,961 86,719 376,680 Auto and other 604,272 58,702 662,974 647,236 72,646 719,882 Total consumer loans 885,526 181,278 1,066,804 937,197 159,365 1,096,562 Total loans $ 7,294,405 $ 2,647,423 $ 9,941,828 $ 7,366,744 $ 1,676,509 $ 9,043,253 The carrying amount of the acquired loans at June 30, 2019 totaled $2.6 billion . A subset of these loans were determined to have evidence of credit deterioration at acquisition date, which is accounted for in accordance with ASC 310-30. These purchased credit-impaired loans presently maintain a carrying value of $74.1 million (and a note balance of $169.9 million ). These loans are evaluated for impairment through the periodic reforecasting of expected cash flows. Loans considered not credit-impaired at acquisition date had a carrying amount of $2.6 billion . At December 31, 2018, acquired loans maintained a carrying value of $1.7 billion and purchased credit-impaired loans totaled $47.3 million (note balance of $124.0 million). Loans considered not credit-impaired at acquisition date had a carrying amount of $1.6 billion . The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality : Three Months Ended June 30, (In thousands) 2019 2018 Balance at beginning of period $ 2,139 $ 10,392 Acquisitions 4,200 — Accretion (2,278 ) (6,881 ) Net reclassifications from (to) nonaccretable difference 1,464 4,517 Payments received, net (105 ) (1,724 ) Balance at end of period $ 5,420 $ 6,304 Six Months Ended June 30, (In thousands) 2019 2018 Balance at beginning of period $ 2,840 $ 11,561 Acquisitions 4,200 — Accretion (3,598 ) (10,313 ) Net reclassifications from (to) nonaccretable difference 2,129 7,049 Payments received, net (160 ) (1,912 ) Reclassification to TDR 9 — Disposals — (81 ) Balance at end of period $ 5,420 $ 6,304 The following is a summary of past due loans at June 30, 2019 and December 31, 2018: Business Activities Loans (In thousands) 30-59 Days 60-89 Days 90 Total Past Current Total Loans Past Due > June 30, 2019 Commercial real estate: Construction $ — $ — $ — $ — $ 300,996 $ 300,996 $ — Other commercial real estate 388 478 17,375 18,241 2,340,261 2,358,502 — Total 388 478 17,375 18,241 2,641,257 2,659,498 — Commercial and industrial loans: Total 2,071 784 9,889 12,744 1,459,022 1,471,766 1,422 Residential mortgages: 1-4 family 867 543 3,504 4,914 2,263,531 2,268,445 1,258 Construction — — — — 9,170 9,170 — Total 867 543 3,504 4,914 2,272,701 2,277,615 1,258 Consumer loans: — Home equity 191 582 979 1,752 279,502 281,254 165 Auto and other 3,498 663 1,802 5,963 598,309 604,272 — Total 3,689 1,245 2,781 7,715 877,811 885,526 165 Total $ 7,015 $ 3,050 $ 33,549 $ 43,614 $ 7,250,791 $ 7,294,405 $ 2,845 Business Activities Loans (In thousands) 30-59 Days 60-89 Days 90 Total Past Current Total Loans Past Due > December 31, 2018 Commercial real estate: Construction $ — $ — $ — $ — $ 327,792 $ 327,792 $ — Other commercial real estate 913 276 18,833 20,022 2,240,897 2,260,919 993 Total 913 276 18,833 20,022 2,568,689 2,588,711 993 Commercial and industrial loans: Total 4,694 975 4,636 10,305 1,503,233 1,513,538 4 Residential mortgages: 1-4 family 1,631 1,619 1,440 4,690 2,313,026 2,317,716 66 Construction — — — — 9,582 9,582 — Total 1,631 1,619 1,440 4,690 2,322,608 2,327,298 66 Consumer loans: Home equity 618 15 933 1,566 288,395 289,961 — Auto and other 3,543 615 1,699 5,857 641,379 647,236 — Total 4,161 630 2,632 7,423 929,774 937,197 — Total $ 11,399 $ 3,500 $ 27,541 $ 42,440 $ 7,324,304 $ 7,366,744 $ 1,063 Acquired Loans (In thousands) 30-59 Days 60-89 Days 90 Total Past Acquired Total Loans Past Due > June 30, 2019 Commercial real estate: Construction $ — $ — $ — $ — $ 1,411 $ 58,497 $ — Other commercial real estate 998 695 4,432 6,125 28,212 1,287,352 2,441 Total 998 695 4,432 6,125 29,623 1,345,849 2,441 Commercial and industrial loans: Total 1,055 62 1,003 2,120 31,456 515,531 214 Residential mortgages: 1-4 family 970 488 1,408 2,866 12,050 596,607 75 Construction — — — — — 8,158 — Total 970 488 1,408 2,866 12,050 604,765 75 Consumer loans: Home equity 379 — 727 1,106 700 122,576 82 Auto and other 168 41 309 518 263 58,702 — Total 547 41 1,036 1,624 963 181,278 82 Total $ 3,570 $ 1,286 $ 7,879 $ 12,735 $ 74,092 $ 2,647,423 $ 2,812 Acquired Loans (In thousands) 30-59 Days 60-89 Days 90 Total Past Acquired Total Loans Past Due > December 31, 2018 Commercial real estate: — Construction $ — $ — $ — $ — $ — $ 25,220 $ — Other commercial real estate 2,603 1,127 4,183 7,913 11,994 786,290 1,652 Total 2,603 1,127 4,183 7,913 11,994 811,510 1,652 Commercial and industrial loans: Total 217 147 1,515 1,879 29,539 466,508 144 Residential mortgages: 1-4 family 1,382 144 918 2,444 4,888 238,952 75 Construction — — — — — 174 — Total 1,382 144 918 2,444 4,888 239,126 75 Consumer loans: Home equity 290 148 751 1,189 553 86,719 — Auto and other 193 62 547 802 314 72,646 96 Total 483 210 1,298 1,991 867 159,365 96 Total $ 4,685 $ 1,628 $ 7,914 $ 14,227 $ 47,288 $ 1,676,509 $ 1,967 The following is summary information pertaining to non-accrual loans at June 30, 2019 and December 31, 2018: June 30, 2019 December 31, 2018 (In thousands) Business Acquired Total Business Acquired Total Commercial real estate: Construction $ — $ — $ — $ — $ — $ — Other commercial real estate 17,375 1,991 19,366 17,840 2,531 20,371 Total 17,375 1,991 19,366 17,840 2,531 20,371 Commercial and industrial loans: Total 8,467 789 9,256 4,632 1,371 6,003 Residential mortgages: 1-4 family 2,246 1,333 3,579 1,374 843 2,217 Construction — — — — — — Total 2,246 1,333 3,579 1,374 843 2,217 Consumer loans: Home equity 814 645 1,459 933 751 1,684 Auto and other 1,802 309 2,111 1,699 451 2,150 Total 2,616 954 3,570 2,632 1,202 3,834 Total non-accrual loans $ 30,704 $ 5,067 $ 35,771 $ 26,478 $ 5,947 $ 32,425 Loans evaluated for impairment as of June 30, 2019 and December 31, 2018 were as follows: Business Activities Loans (In thousands) Commercial Commercial and Residential Consumer Total June 30, 2019 Loans receivable: Balance at end of period Individually evaluated for impairment $ 22,035 $ 6,753 $ 2,841 $ 138 $ 31,767 Collectively evaluated for impairment 2,637,463 1,465,013 2,274,774 885,388 7,262,638 Total $ 2,659,498 $ 1,471,766 $ 2,277,615 $ 885,526 $ 7,294,405 Business Activities Loans (In thousands) Commercial Commercial and Residential Consumer Total December 31, 2018 Loans receivable: Balance at end of year Individually evaluated for impairment $ 23,345 $ 2,825 $ 2,089 $ 342 $ 28,601 Collectively evaluated for impairment 2,565,366 1,510,713 2,325,209 936,855 7,338,143 Total $ 2,588,711 $ 1,513,538 $ 2,327,298 $ 937,197 $ 7,366,744 Acquired Loans (In thousands) Commercial Commercial and Residential Consumer Total June 30, 2019 Loans receivable: Balance at end of Period Individually evaluated for impairment $ 3,709 $ 372 $ 740 $ 349 $ 5,170 Purchased credit-impaired loans 29,623 31,456 12,050 963 74,092 Collectively evaluated for impairment 1,312,517 483,703 591,975 179,966 2,568,161 Total $ 1,345,849 $ 515,531 $ 604,765 $ 181,278 $ 2,647,423 Acquired Loans (In thousands) Commercial Commercial and Residential Consumer Total December 31, 2018 Loans receivable: Balance at end of year Individually evaluated for impairment $ 3,980 $ 763 $ 362 $ 646 $ 5,751 Purchased credit-impaired loans 11,994 29,539 4,888 867 47,288 Collectively evaluated for impairment 795,536 436,206 233,876 157,852 1,623,470 Total $ 811,510 $ 466,508 $ 239,126 $ 159,365 $ 1,676,509 The following is a summary of impaired loans at June 30, 2019 and December 31, 2018: Business Activities Loans June 30, 2019 (In thousands) Recorded Investment (1) Unpaid Principal Related Allowance With no related allowance: Other commercial real estate $ 21,538 $ 33,028 $ — Commercial and industrial loans 5,319 10,807 — Residential mortgages - 1-4 family 1,244 1,407 — Consumer - home equity 35 240 — Consumer - other — — — With an allowance recorded: Other commercial real estate $ 513 $ 525 $ 7 Commercial and industrial loans 1,343 1,349 42 Residential mortgages - 1-4 family 1,613 1,739 78 Consumer - home equity 92 101 7 Consumer - other 11 11 — Total Commercial real estate $ 22,051 $ 33,553 $ 7 Commercial and industrial loans 6,662 12,156 42 Residential mortgages 2,857 3,146 78 Consumer 138 352 7 Total impaired loans $ 31,708 $ 49,207 $ 134 (1) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. These amounts are components of total loans and other assets on the Consolidated Balance Sheet. (2) The Unpaid Principal Balance represents the customer's legal obligation to the Company. Business Activities Loans December 31, 2018 (In thousands) Recorded Investment (1) Unpaid Principal Related Allowance With no related allowance: Other commercial real estate loans $ 22,606 $ 31,038 $ — Commercial and industrial loans 1,584 2,566 — Residential mortgages - 1-4 family 443 441 — Consumer - home equity 230 242 — Consumer - other — — — With an allowance recorded: Other commercial real estate loans $ 666 $ 670 $ 9 Commercial and industrial loans 1,251 1,235 49 Residential mortgages - 1-4 family 1,663 1,779 128 Consumer - home equity 100 106 10 Consumer - other 13 13 1 Total Commercial real estate $ 23,272 $ 31,708 $ 9 Commercial and industrial loans 2,835 3,801 49 Residential mortgages 2,106 2,220 128 Consumer 343 361 11 Total impaired loans $ 28,556 $ 38,090 $ 197 (1) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on the Consolidated Balance Sheet. (2) The Unpaid Principal Balance represents the customer's legal obligation to the Company. Acquired Loans June 30, 2019 (In thousands) Recorded Investment (1) Unpaid Principal Related Allowance With no related allowance: Other commercial real estate loans $ 2,664 $ 5,544 $ — Commercial and industrial loans 343 594 — Residential mortgages - 1-4 family 658 656 — Consumer - home equity 243 1,448 — Consumer - other 16 14 — With an allowance recorded: Other commercial real estate loans $ 1,066 $ 1,071 $ 84 Commercial and industrial loans 29 30 — Residential mortgages - 1-4 family 88 113 8 Consumer - home equity 50 50 — Consumer - other 41 39 7 Total x Commercial real estate $ 3,730 $ 6,615 $ 84 Commercial and industrial loans 372 624 — Residential mortgages 746 769 8 Consumer 350 1,551 7 Total impaired loans $ 5,198 $ 9,559 $ 99 (1) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on the Consolidated Balance Sheet. (2) The Unpaid Principal Balance represents the customer's legal obligation to the Company. Acquired Loans December 31, 2018 (In thousands) Recorded Investment (1) Unpaid Principal Related Allowance With no related allowance: Other commercial real estate loans $ 3,055 $ 5,959 $ — Other commercial and industrial loans 538 644 — Residential mortgages - 1-4 family 271 324 — Consumer - home equity 399 1,053 — Consumer - other — 11 — With an allowance recorded: Other commercial real estate loans $ 925 $ 947 $ 9 Commercial and industrial loans 228 232 4 Residential mortgages - 1-4 family 94 117 36 Consumer - home equity 205 196 41 Consumer - other 43 40 7 Total Commercial real estate $ 3,980 $ 6,906 $ 9 Commercial and industrial loans 766 876 4 Residential mortgages 365 441 36 Consumer 647 1,300 48 Total impaired loans $ 5,758 $ 9,523 $ 97 (1) The Recorded Investment represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, and unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on the Consolidated Balance Sheet. (2) The Unpaid Principal Balance represents the customer's legal obligation to the Company. The following is a summary of the average recorded investment and interest income recognized on impaired loans as of June 30, 2019 and 2018: Business Activities Loans Six Months Ended Six Months Ended (In thousands) Average Cash Basis Average Cash Basis With no related allowance: Other commercial real estate loans $ 20,877 $ 213 $ 29,092 $ 326 Commercial and industrial loans 1,775 304 4,467 201 Residential mortgages - 1-4 family 574 23 942 26 Consumer - home equity 196 1 1,754 4 Consumer - other — — — — With an allowance recorded: Other commercial real estate loans $ 569 $ 12 $ 1,786 $ 47 Commercial and industrial loans 1,468 64 1,279 83 Residential mortgages - 1-4 family 1,633 37 1,409 32 Consumer - home equity 95 3 45 1 Consumer - other 12 — 16 — Total Commercial real estate $ 21,446 $ 225 $ 30,878 $ 373 Commercial and industrial loans 3,243 368 5,746 284 Residential mortgages 2,207 60 2,351 58 Consumer loans 303 4 1,815 5 Total impaired loans $ 27,199 $ 657 $ 40,790 $ 720 Acquired Loans Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 (In thousands) Average Cash Basis Average Cash Basis With no related allowance: Other commercial real estate loans $ 2,607 $ 82 $ 2,306 $ 111 Commercial and industrial loans 522 32 349 27 Residential mortgages - 1-4 family 362 12 1,505 6 Consumer - home equity 557 5 760 — Consumer - other 5 — 17 1 With an allowance recorded: Other commercial real estate loans $ 965 $ 33 $ 3,020 $ 89 Commercial and industrial loans 30 1 287 17 Residential mortgages - 1-4 family 90 4 77 2 Consumer - home equity 50 1 320 5 Consumer - other 42 1 — — Total Commercial real estate $ 3,572 $ 115 $ 5,326 $ 200 Commercial and industrial loans 552 33 636 44 Residential mortgages 452 16 1,582 8 Consumer loans 654 7 1,097 6 Total impaired loans $ 5,230 $ 171 $ 8,641 $ 258 Troubled Debt Restructuring Loans The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months . TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan. The following tables include the recorded investment and number of modifications identified during the three and six months ended June 30, 2019 and June 30, 2018. The table includes the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured. The modifications for the three and six months ended June 30, 2019 and 2018 were attributable to interest rate concessions, principal concessions, maturity date extensions, modified payment terms, reamortization, and accelerated maturity. Three Months Ended June 30, 2019 (Dollars in thousands) Number of Pre-Modification Post-Modification Troubled Debt Restructurings Commercial real estate — $ — $ — Commercial and industrial 2 282 279 Total 2 $ 282 $ 279 Six Months Ended June 30, 2019 (Dollars in thousands) Number of Pre-Modification Post-Modification Troubled Debt Restructurings Commercial real estate 2 $ 145 $ 145 Commercial and industrial 3 475 472 Total 5 $ 620 $ 617 Three Months Ended June 30, 2018 (Dollars in thousands) Number of Pre-Modification Post-Modification Troubled Debt Restructurings Commercial and industrial — $ — $ — Residential - 1-4 Family — — — Total — $ — $ — Six Months Ended June 30, 2018 (Dollars in thousands) Number of Pre-Modification Post-Modification Troubled Debt Restructurings 19 Commercial and industrial 4 1,995 1,924 Residential - 1-4 Family 1 118 118 Total 5 $ 2,113 $ 2,042 The following table discloses the recorded investments and numbers of modifications for TDRs where a concession has been made within the previous 12 months, that then defaulted in the respective reporting period. There were no TDRs that defaulted within 12 months of modifications during the three and six months ended June 30, 2019. For the three and six months ended June 30, 2018, there were two loans that were restructured that had subsequently defaulted during the period. Modifications that Subsequently Defaulted Three Months Ended June 30, 2018 (Dollars in thousands) Number of Contracts Recorded Investment Troubled Debt Restructurings Commercial real estate 1 5,992 Commercial and industrial 1 1,065 Modifications that Subsequently Defaulted Six Months Ended June 30, 2018 (Dollars in thousands) Number of Contracts Recorded Investment Troubled Debt Restructurings Commercial real estate 1 5,992 Commercial and industrial 1 1,065 The following table presents the Company’s TDR activity for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, (In thousands) 2019 2018 Balance at beginning of the period $ 25,185 $ 43,105 Principal payments (375 ) (2,511 ) TDR status change (1) — — Other reductions (2) — (7,088 ) Newly identified TDRs 279 — Balance at end of the period $ 25,089 $ 33,506 Six Months Ended June 30, (In thousands) 2019 2018 Balance at beginning of the period $ 27,415 $ 41,990 Principal payments (1,788 ) (3,150 ) TDR status change (1) — — Other reductions (2) (1,155 ) (7,376 ) Newly identified TDRs 617 2,042 Balance at end of the period $ 25,089 $ 33,506 _________________________________ (1) TDR status change classification represents TDR loans with a specified interest rate equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk and the loan was on current payment status and not impaired based on the terms specified by the restructuring agreement. (2) Other reductions classification consists of transfer to other real estate owned, payoffs, charge-offs, and advances to loans. The evaluation of certain loans individually for specific impairment includes loans that were previously classified as TDRs or continue to be classified as TDRs. As of June 30, 2019 , the Company maintained foreclosed residential real estate property with a fair value of $154 thousand . Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of June 30, 2019 and December 31, 2018 totaled $5.4 million and $3.2 million |