Loans Receivable | Loans Receivable The following table shows a summary of our loans receivable at amortized cost basis at June 30, 2022 and December 31, 2021 (in thousands): June 30, 2022 December 31, 2021 Originated (1) Acquired (2) Total Originated (1) Acquired (2) Total Personal Banking: Residential mortgage loans (3) $ 3,101,251 185,524 3,286,775 2,783,459 211,161 2,994,620 Home equity loans 1,095,844 184,648 1,280,492 1,107,202 212,729 1,319,931 Vehicle loans 1,785,828 109,907 1,895,735 1,384,246 99,985 1,484,231 Consumer loans 97,939 8,871 106,810 307,961 46,556 354,517 Total Personal Banking 6,080,862 488,950 6,569,812 5,582,868 570,431 6,153,299 Commercial Banking: Commercial real estate loans 2,130,573 355,401 2,485,974 2,202,027 423,454 2,625,481 Commercial real estate loans - owner occupied 342,907 47,295 390,202 321,253 68,750 390,003 Commercial loans 926,565 60,271 986,836 765,877 81,732 847,609 Total Commercial Banking 3,400,045 462,967 3,863,012 3,289,157 573,936 3,863,093 Total loans receivable, gross 9,480,907 951,917 10,432,824 8,872,025 1,144,367 10,016,392 Allowance for credit losses (84,300) (14,055) (98,355) (86,750) (15,491) (102,241) Total loans receivable, net (4) $ 9,396,607 937,862 10,334,469 8,785,275 1,128,876 9,914,151 (1) Includes originated and purchased loan pools purchased in an asset acquisition. (2) Includes loans subject to purchase accounting in a business combination. (3) Includes fair value of $31.2 million and $25.1 million of loans held-for-sale at June 30, 2022 and December 31, 2021, respectively. (4) Includes $67.0 million and $62.8 million of net unearned income, unamortized premiums and discounts and deferred fees and costs at June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 2022, the Company purchased a total of $115.8 million small business equipment finance loan pools and a total of $188.3 million one- to four-family jumbo mortgage loan pools. The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended June 30, 2022 (in thousands): Balance as of June 30, 2022 Current period provision Charge-offs Recoveries Balance as of March 31, 2022 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 16,158 2,723 (138) 267 13,306 Home equity loans 5,232 (583) (255) 427 5,643 Vehicle loans 15,738 1,888 (934) 603 14,181 Consumer loans 779 (1,685) (978) 333 3,109 Total Personal Banking 37,907 2,343 (2,305) 1,630 36,239 Commercial Banking: Commercial real estate loans 39,641 (1,917) (4,392) 1,378 44,572 Commercial real estate loans - owner occupied 4,095 (188) — 7 4,276 Commercial loans 16,712 2,391 (329) 442 14,208 Total Commercial Banking 60,448 286 (4,721) 1,827 63,056 Total $ 98,355 2,629 (7,026) 3,457 99,295 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ 6 — — — 6 Home equity loans 64 9 — — 55 Total Personal Banking 70 9 — — 61 Commercial Banking: Commercial real estate loans 3,463 1,671 — — 1,792 Commercial real estate loans - owner occupied 328 120 — — 208 Commercial loans 3,589 1,596 — — 1,993 Total Commercial Banking 7,380 3,387 — — 3,993 Total off-balance sheet exposure $ 7,450 3,396 — — 4,054 The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the quarter ended June 30, 2021 (in thousands): Balance as of June 30, 2021 Current period provision Charge-offs Recoveries Balance as of March 31, 2021 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 7,247 1,922 (770) 234 5,861 Home equity loans 7,239 2,253 (379) 124 5,241 Vehicle loans 12,888 (1,196) (1,598) 794 14,888 Consumer loans 2,801 691 (803) 350 2,563 Total Personal Banking 30,175 3,670 (3,550) 1,502 28,553 Commercial Banking: Commercial real estate loans 64,580 (2,925) (3,074) 373 70,206 Commercial real estate loans - owner occupied 4,729 (1,138) (890) 4 6,753 Commercial loans 17,846 393 (1,161) 129 18,485 Total Commercial Banking 87,155 (3,670) (5,125) 506 95,444 Total $ 117,330 — (8,675) 2,008 123,997 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ 2 — — — 2 Home equity loans 42 8 — — 34 Total Personal Banking 44 8 — — 36 Commercial Banking: Commercial real estate loans 1,932 (183) — — 2,115 Commercial real estate loans - owner occupied 181 (207) — — 388 Commercial loans 1,232 (848) — — 2,080 Total Commercial Banking 3,345 (1,238) — — 4,583 Total off-balance sheet exposure $ 3,389 (1,230) — — 4,619 The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the six months ended June 30, 2022 (in thousands): Balance as of June 30, 2022 Current period provision Charge-offs Recoveries Balance as of December 31, 2021 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 16,158 9,685 (1,321) 421 7,373 Home equity loans 5,232 (214) (702) 848 5,300 Vehicle loans 15,738 583 (1,581) 1,253 15,483 Consumer loans 779 (691) (2,054) 640 2,884 Total Personal Banking 37,907 9,363 (5,658) 3,162 31,040 Commercial Banking: Commercial real estate loans 39,641 (11,582) (5,416) 2,498 54,141 Commercial real estate loans - owner occupied 4,095 201 — 11 3,883 Commercial loans 16,712 3,166 (1,010) 1,379 13,177 Total Commercial Banking 60,448 (8,215) (6,426) 3,888 71,201 Total $ 98,355 1,148 (12,084) 7,050 102,241 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ 6 4 — — 2 Home equity loans 64 25 — — 39 Total Personal Banking 70 29 — — 41 Commercial Banking: Commercial real estate loans 3,463 2,582 — — 881 Commercial real estate loans - owner occupied 328 186 — — 142 Commercial loans 3,589 2,195 — — 1,394 Total Commercial Banking 7,380 4,963 — — 2,417 Total off-balance sheet exposure $ 7,450 4,992 — — 2,458 The following table provides information related to the allowance for credit losses by portfolio segment and by class of financing receivable for the six months ended June 30, 2021 (in thousands): Balance as of June 30, 2021 Current Charge-offs Recoveries Balance as of December 31, 2020 Allowance for Credit Losses Personal Banking: Residential mortgage loans $ 7,247 1,330 (1,625) 276 7,266 Home equity loans 7,239 1,601 (607) 253 5,992 Vehicle loans 12,888 (423) (2,905) 1,391 14,825 Consumer loans 2,801 1,342 (2,099) 687 2,871 Total Personal Banking 30,175 3,850 (7,236) 2,607 30,954 Commercial Banking: Commercial real estate loans 64,580 (7,756) (7,700) 655 79,381 Commercial real estate loans - owner occupied 4,729 (4,904) (890) 5 10,518 Commercial loans 17,846 3,190 (1,215) 2,297 13,574 Total Commercial Banking 87,155 (9,470) (9,805) 2,957 103,473 Total $ 117,330 (5,620) (17,041) 5,564 134,427 Allowance for Credit Losses - off-balance sheet exposure Personal Banking: Residential mortgage loans $ 2 — — — 2 Home equity loans 42 7 — — 35 Total Personal Banking 44 7 — — 37 Commercial Banking: Commercial real estate loans 1,932 (1,517) — — 3,449 Commercial real estate loans - owner occupied 181 (145) — — 326 Commercial loans 1,232 (1,319) — — 2,551 Total Commercial Banking 3,345 (2,981) — — 6,326 Total off-balance sheet exposure $ 3,389 (2,974) — — 6,363 The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at June 30, 2022 (in thousands): Total loans Allowance for Nonaccrual Loans 90 days past due and accruing TDRs Allowance Additional Personal Banking: Residential mortgage loans $ 3,286,775 16,158 7,616 — 6,157 861 — Home equity loans 1,280,492 5,232 4,156 — 1,465 472 — Vehicle loans 1,895,735 15,738 3,166 — — — — Consumer loans 106,810 779 136 379 — — — Total Personal Banking 6,569,812 37,907 15,074 379 7,622 1,333 — Commercial Banking: Commercial real estate loans 2,485,974 39,641 76,437 — 42,180 1,558 18 Commercial real estate loans - owner occupied 390,202 4,095 590 — 144 23 — Commercial loans 986,836 16,712 6,284 — 4,291 549 327 Total Commercial Banking 3,863,012 60,448 83,311 — 46,615 2,130 345 Total $ 10,432,824 98,355 98,385 379 54,237 3,463 345 (1) Includes $37.6 million of nonaccrual TDRs. The following table provides information related to the loan portfolio by portfolio segment and by class of financing receivable at December 31, 2021 (in thousands): Total loans Allowance for Nonaccrual Loans 90 days past due and accruing TDRs Allowance Additional Personal Banking: Residential mortgage loans $ 2,994,620 7,373 10,402 — 6,749 1,442 — Home equity loans 1,319,931 5,300 5,758 — 1,781 718 — Vehicle loans 1,484,231 15,483 3,263 — — — — Consumer loans 354,517 2,884 675 331 — — — Total Personal Banking 6,153,299 31,040 20,098 331 8,530 2,160 — Commercial Banking: Commercial real estate loans 2,625,481 54,141 129,666 — 17,025 2,024 400 Commercial real estate loans - owner occupied 390,003 3,883 1,233 — 159 24 — Commercial loans 847,609 13,177 7,474 — 4,574 609 60 Total Commercial Banking 3,863,093 71,201 138,373 — 21,758 2,657 460 Total $ 10,016,392 102,241 158,471 331 30,288 4,817 460 (1) Includes $17.2 million of nonaccrual TDRs. We present the amortized cost of our loans on nonaccrual status including such loans with no allowance. The following table presents the amortized cost of our loans on nonaccrual status as of the beginning and end of the period ended June 30, 2022 (in thousands): June 30, 2022 Nonaccrual loans at January 1, 2022 Nonaccrual loans with an allowance Nonaccrual loans with no allowance Total nonaccrual loans at the end of the period Loans 90 days past due and accruing Personal Banking: Residential mortgage loans $ 10,402 7,616 — 7,616 — Home equity loans 5,758 3,956 200 4,156 — Vehicle loans 3,263 1,941 1,225 3,166 — Consumer loans 675 136 — 136 379 Total Personal Banking 20,098 13,649 1,425 15,074 379 Commercial Banking: Commercial real estate loans 129,666 10,534 65,903 76,437 — Commercial real estate loans - owner occupied 1,233 590 — 590 — Commercial loans 7,474 3,506 2,778 6,284 — Total Commercial Banking 138,373 14,630 68,681 83,311 — Total $ 158,471 28,279 70,106 98,385 379 During the three and six months ended June 30, 2022, we recognized $137,000 and $290,000 of interest income on nonaccrual and troubled debt restructuring loans. The following table presents the amortized cost of our loans on nonaccrual status as of the year ended December 31, 2021 (in thousands): December 31, 2021 Nonaccrual loans at January 1, 2021 Nonaccrual loans with an allowance Nonaccrual loans with no allowance Total nonaccrual loans at the end of the period Loans 90 days past due and accruing Personal Banking: Residential mortgage loans $ 15,924 10,402 — 10,402 — Home equity loans 9,123 5,551 207 5,758 — Vehicle loans 5,533 3,251 12 3,263 — Consumer loans 1,031 674 1 675 331 Total Personal Banking 31,611 19,878 220 20,098 331 Commercial Banking: Commercial real estate loans 44,092 65,529 64,137 129,666 — Commercial real estate loans - owner occupied 3,642 1,233 — 1,233 — Commercial loans 23,487 3,941 3,533 7,474 — Total Commercial Banking 71,221 70,703 67,670 138,373 — Total $ 102,832 90,581 67,890 158,471 331 During the year ended December 31, 2021, we recognized $803,000 of interest income on nonaccrual and troubled debt restructuring loans. The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2022 (in thousands): Real estate Equipment Total Personal Banking: Residential mortgage loans $ 575 — 575 Home equity loans 100 — 100 Total Personal Banking 675 — 675 Commercial Banking: Commercial real estate loans 74,267 — 74,267 Commercial loans 3,810 1,262 5,072 Total Commercial Banking 78,077 1,262 79,339 Total $ 78,752 1,262 80,014 The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2021 (in thousands): Real estate Equipment Total Personal Banking: Residential mortgage loans $ 580 — 580 Home equity loans 99 — 99 Total Personal Banking 679 — 679 Commercial Banking: Commercial real estate loans 119,825 1,705 121,530 Commercial loans 3,973 1,926 5,899 Total Commercial Banking 123,798 3,631 127,429 Total $ 124,477 3,631 128,108 Our loan portfolios include loans that have been modified in a TDR, where concessions have been granted to borrowers who have experienced financial difficulties. These concessions typically result from our loss mitigation activities and could include: extending the note’s maturity date, permitting interest only payments, reducing the interest rate to a rate lower than current market rates for new debt with similar risk, reducing the principal payment, principal forbearance or other actions. These concessions are applicable to all loan segments and classes. Certain TDRs are classified as nonperforming at the time of restructuring and may be returned to performing status after considering the borrower’s sustained repayment performance for a period of at least six months. When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, the loan’s observable market price or the current fair value of the collateral, less selling costs, for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premiums or discounts), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment in accordance with ASC 310-10. As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan. Loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, we evaluate the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, partial charge-offs may be taken to further write-down the carrying value of the loan, or the loan may be charged-off completely. In March 2020 and August 2020, joint statements were issued by federal and state regulatory agencies, after consultation with the FASB, to clarify that short-term loan modifications are not TDRs if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to any relief. Under this guidance, six months is provided as an example of short-term, and current is defined as less than 30 days past due at the time the modification program is implemented. The guidance also provides that these modified loans generally will not be classified as nonaccrual during the term of the modification. For borrowers who are 30 days or more past due when enrolling in a loan modification program related to the COVID-19 pandemic, we evaluate the loan modifications under our existing TDR framework, and where such a loan modification would result in a concession to a borrower experiencing financial difficulty, the loan will be accounted for as a TDR and will generally not accrue interest. This TDR relief under the CARES Act was extended by the Consolidated Appropriations Act, 2021 (“CAA”), signed into law on December 27, 2020. Under the CAA, such relief will continue until the earlier of 60 days after the date the COVID-19 national emergency comes to an end or January 1, 2022. Certain loan modifications made during the prior year were done in accordance with Section 4013 of the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus. Accordingly, these loans were not categorized as TDRs. The following table provides a roll forward of troubled debt restructurings for the periods indicated (dollars in thousands): For the quarter ended June 30, 2022 2021 Number of Amount Number of Amount Beginning TDR balance: 130 $ 28,701 164 $ 27,510 New TDRs 2 26,115 2 2,295 Re-modified TDRs 5 6,403 1 344 Net paydowns — (479) — (1,610) Paid-off loans: Residential mortgage loans — — 4 (726) Home equity loans 1 (13) 1 (11) Commercial real estate loans 2 (80) 2 (302) Commercial loans 1 (7) 1 (69) Ending TDR balance: 128 $ 54,237 158 $ 27,431 Accruing TDRs $ 16,590 $ 18,480 Nonaccrual TDRs 37,647 8,951 For the six months ended June 30, 2022 2021 Number of Amount Number of Amount Beginning TDR balance: 134 $ 30,288 170 $ 32,135 New TDRs 2 26,115 2 2,295 Re-modified TDRs 6 6,603 5 1,241 Net paydowns — (1,509) — (4,073) Charge-offs: Residential mortgage loans 1 (3) — — Paid-off loans: Residential mortgage loans 1 (201) 4 (726) Home equity loans 2 (77) 1 (11) Commercial real estate loans 3 (369) 5 (2,686) Commercial real estate loans - owner occupied — — 1 (47) Commercial loans 1 (7) 3 (697) Ending TDR balance: 128 $ 54,237 158 $ 27,431 Accruing TDRs $ 16,590 $ 18,480 Nonaccrual TDRs 37,647 8,951 The following table provides information related to TDRs (including re-modified TDRs) by portfolio segment and by class of financing receivable during the periods indicated (in thousands): For the quarter ended June 30, 2022 For the six months ended June 30, 2022 Number of Recorded Current Current Number of Recorded Current Current Commercial Banking: Commercial real estate loans 3 $ 58,042 29,292 1,122 4 $ 58,372 29,492 1,133 Commercial loans 4 3,524 3,226 410 4 3,524 3,226 411 Total Commercial Banking 7 61,566 32,518 1,532 8 61,896 32,718 1,544 Total 7 $ 61,566 32,518 1,532 8 $ 61,896 32,718 1,544 For the quarter ended June 30, 2021 For the six months ended June 30, 2021 Number of Recorded Current Current Number of Recorded Current Current Personal Banking: Residential mortgage loans — $ — — — 1 $ 121 116 10 Home equity loans — — — — 1 3 — — Total Personal Banking — — — — 2 124 116 10 Commercial Banking: Commercial real estate loans 1 725 343 34 3 1,537 1,125 148 Commercial loans 2 2,396 2,295 — 2 2,396 2,295 — Total Commercial Banking 3 3,121 2,638 34 5 3,933 3,420 148 Total 3 $ 3,121 2,638 34 7 $ 4,057 3,536 158 The following table provides information as of June 30, 2022 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended June 30, 2022 (in thousands): Type of modification Number of contracts Rate Maturity date Total Commercial Banking: Commercial real estate loans 3 $ 4,179 25,113 29,292 Commercial loans 4 — 3,226 3,226 Total Commercial Banking 7 4,179 28,339 32,518 Total 7 $ 4,179 28,339 32,518 The following table provides information as of June 30, 2021 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the quarter ended June 30, 2021 (in thousands): Type of modification Number of contracts Rate Maturity date Total Commercial Banking: Commercial real estate loans 1 $ — 343 343 Commercial loans 2 — 2,295 2,295 Total Commercial Banking 3 — 2,638 2,638 Total 3 $ — 2,638 2,638 The following table provides information as of June 30, 2022 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the six months ended June 30, 2022 (in thousands): Type of modification Number of contracts Rate Maturity date Total Commercial Banking: Commercial real estate loans 4 $ 4,179 25,313 29,492 Commercial loans 4 — 3,226 3,226 Total Commercial Banking 8 4,179 28,539 32,718 Total 8 $ 4,179 28,539 32,718 The following table provides information as of June 30, 2021 for TDRs (including re-modified TDRs) by type of modification, by portfolio segment and class of financing receivable for modifications during the six months ended June 30, 2021 (in thousands): Type of modification Number of contracts Rate Maturity date Other Total Personal Banking: Residential mortgage loans 1 $ 116 — — 116 Home equity loans 1 — — — — Total Personal Banking 2 116 — — 116 Commercial Banking: Commercial real estate loans 3 — 1,052 73 1,125 Commercial loans 2 — 2,295 — 2,295 Total Commercial Banking 5 — 3,347 73 3,420 Total 7 $ 116 3,347 73 3,536 The following table provides information related to troubled debt restructurings modified within the previous twelve months of June 30, 2022 that subsequently defaulted: Number of Recorded Current Current Commercial Banking: Commercial real estate loans 1 $ 4,167 3,823 — Total Commercial Banking 1 4,167 3,823 — Total 1 $ 4,167 3,823 — The following table provides information related to troubled debt restructurings modified within the previous twelve months of June 30, 2021 that subsequently defaulted: Number of Recorded Current Current Commercial Banking: Commercial real estate loans 1 $ 454 454 50 Total Commercial Banking 1 454 454 50 Total 1 $ 454 454 50 The following table provides information related to the amortized cost basis of loan payment delinquencies at June 30, 2022 (in thousands): 30-59 days 60-89 days 90 days or Total Current Total loans 90 days or Personal Banking: Residential mortgage loans $ 785 5,941 5,445 12,171 3,274,604 3,286,775 — Home equity loans 3,664 952 2,081 6,697 1,273,795 1,280,492 — Vehicle loans 6,449 1,170 1,861 9,480 1,886,255 1,895,735 — Consumer loans 449 290 460 1,199 105,611 106,810 379 Total Personal Banking 11,347 8,353 9,847 29,547 6,540,265 6,569,812 379 Commercial Banking: Commercial real estate loans 2,581 1,350 14,823 18,754 2,467,220 2,485,974 — Commercial real estate loans - owner occupied 120 122 126 368 389,834 390,202 — Commercial loans 1,486 341 583 2,410 984,426 986,836 — Total Commercial Banking 4,187 1,813 15,532 21,532 3,841,480 3,863,012 — Total loans $ 15,534 10,166 25,379 51,079 10,381,745 10,432,824 379 The following table provides information related to the amortized cost basis of loan payment delinquencies at December 31, 2021 (in thousands): 30-59 days 60-89 days 90 days or Total Current Total loans 90 days or Personal Banking: Residential mortgage loans $ 20,567 5,433 7,641 33,641 2,960,979 2,994,620 — Home equity loans 3,153 949 4,262 8,364 1,311,567 1,319,931 — Vehicle loans 5,331 1,487 1,635 8,453 1,475,778 1,484,231 — Consumer loans 1,205 519 765 2,489 352,028 354,517 331 Total Personal Banking 30,256 8,388 14,303 52,947 6,100,352 6,153,299 331 Commercial Banking: Commercial real estate loans 16,938 699 23,489 41,126 2,584,355 2,625,481 — Commercial real estate loans - owner occupied 127 70 574 771 389,232 390,003 — Commercial loans 193 727 1,105 2,025 845,584 847,609 — Total Commercial Banking 17,258 1,496 25,168 43,922 3,819,171 3,863,093 — Total originated loans $ 47,514 9,884 39,471 96,869 9,919,523 10,016,392 331 Credit Quality Indicators: For Commercial Banking we categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We analyze loans individually by classifying the loans by credit risk. Credit relationships greater than or equal to $1.0 million classified as special mention or substandard are reviewed quarterly for deterioration or improvement to determine if the loan is appropriately classified. We use the following definitions for risk ratings other than pass: Special Mention — Loans designated as special mention have specific, well-defined risk issues, which create a high level of uncertainty regarding the long-term viability of the business. Loans in this class are considered to have high-risk characteristics. A special mention loan exhibits material negative financial trends due to company-specific or systemic conditions. If these potential weaknesses are not mitigated, they threaten the borrower’s capacity to meet its debt obligations. Special mention loans still demonstrate sufficient financial flexibility to react to and positively address the root cause of the adverse financial trends without significant deviations from their current business strategy. Their potential weaknesses deserve our close attention and warrant enhanced monitoring. Substandard — Loans classified as substandard are inadequately protected by the current net worth and payment capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified as substandard. In addition, those weaknesses make collection or liquidation in full highly questionable and improbable. A loan classified as doubtful exhibits discernible loss potential, but a complete loss seems very unlikely. The possibility of a loss on a doubtful loan is high, but because of certain important and reasonably specific pending factors that may strengthen the loan, its classification as an estimated loss is deferred until a more exact status can be determined. Loss — Loans classified as loss are considered uncollectible and of such value that the continuance as a loan is not warranted. A loss classification does not mean that the loan has no recovery or salvage value; instead, it means that it is not practical or desirable to defer writing off all or a portion of a basically worthless loan even though partial recovery may be possible in the future. For Personal Banking loans a pass risk rating is maintained until they are greater than 90 days past due, and risk rating reclassification is based primarily on past due status of the loan. The risk rating categories can generally be described by the following groupings: Pass — Loans classified as pass are homogeneous loans that are less than 90 days past due from the required payment date at month-end. Substandard — Loans classified as substandard are homogeneous loans that are greater than 90 days past due from the required payment date at month-end, loans classified as TDRs or homogenous retail loans that are greater than 180 days past due from the required payment date at month-end that has been written down to the value of underlying collateral, less costs to sell. Doubtful — Loans classified as doubtful are homogeneous loans that are greater than 180 days past due from the required payment date at month-end and not written down to the value of underlying collateral. These loans are generally charged-off in the month in which the 180 day period elapses. The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of June 30, 2022 (in thousands): YTD June 30, 2022 2021 2020 2019 2018 Prior Revolving loans Revolving loans converted to term loans Total loans Personal Banking: Residential mortgage loans Pass $ 290,471 843,802 572,648 278,086 141,007 1,147,103 — — 3,273,117 Substandard — 106 710 258 417 12,167 — — 13,658 Total residential mortgage loans 290,471 843,908 573,358 278,344 141,424 1,159,270 — — 3,286,775 Home equity loans Pass 62,500 138,755 187,786 121,932 56,161 231,691 435,304 40,995 1,275,124 Substandard — 48 — 378 345 2,889 845 863 5,368 Total home equity loans 62,500 138,803 187,786 122,310 56,506 234,580 436,149 41,858 1,280,492 Vehicle loans Pass 527,150 742,059 288,651 181,929 97,160 55,620 — — 1,892,569 Substandard 83 964 402 764 578 375 — — 3,166 Total vehicle loans 527,233 743,023 289,053 182,693 97,738 55,995 — — 1,895,735 Consumer loans Pass 9,391 12,822 5,966 5,235 3,613 6,244 61,662 1,361 106,294 Substandard — 27 — 10 5 61 412 1 516 Total consumer loans 9,391 12,849 5,966 5,245 3,618 6,305 62,074 1,362 106,810 Total Personal Banking 889,595 1,738,583 1,056,163 588,592 299,286 1,456,150 498,223 43,220 6,569,812 Business Banking: Commercial real estate loans Pass 124,555 344,825 415,474 297,289 235,348 798,170 28,902 9,104 2,253,667 Special mention — 798 1,466 20,818 1,077 6,863 988 15 32,025 Substandard — 96 7,117 28,401 43,407 116,480 564 4,217 200,282 Total commercial real estate loans 124,555 345,719 424,057 346,508 279,832 921,513 30,454 13,336 2,485,974 Commercial real estate loans - owner occupied Pass 41,726 63,126 18,245 39,001 47,377 132,060 3,233 1,772 346,540 Special mention — — — 15,067 3,698 689 61 — 19,515 Substandard — — — 5,360 1,934 14,747 — 2,106 24,147 Total commercial real estate loans - owner occupied 41,726 63,126 18,245 59,428 53,009 147,496 3,294 3,878 390,202 Commercial loans Pass 335,778 127,282 63,945 54,761 21,293 57,692 288,640 4,738 954,129 Special mention 153 155 283 486 47 — 1,344 — 2,468 Substandard 569 306 896 3,309 2,596 1,881 11,060 9,622 30,239 Total commercial loans 336,500 127,743 65,124 58,556 23,936 59,573 301,044 14,360 986,836 Total Business Banking 502,781 536,588 507,426 464,492 356,777 1,128,582 334,792 31,574 3,863,012 Total loans $ 1,392,376 2,275,171 1,563,589 1,053,084 656,063 2,584,732 833,015 74,794 10,432,824 During the six months ended June 30, 2022, $9.2 million of revolving loans were converted to term loans. The following table presents the amortized cost basis of our loan portfolio by year of origination and credit quality indicator for each portfolio segment as of December 31, 2021 (in thousands): 2021 2020 2019 2018 2017 Prior Revolving loans Revolving loans converted to term loans Total loans Personal Banking: Residential mortgage loans Pass $ 644,862 602,429 304,275 156,639 171,240 1,098,635 — — 2,978,080 Substandard 138 489 377 538 882 14,116 — — 16,540 Total residential mortgage loans 645,000 602,918 304,652 157,177 172,122 1,112,751 — — 2,994,620 Home equity loans Pass 150,847 210,224 138,661 65,011 61,692 209,959 435,660 40,766 1,312,820 Substandard — — 441 60 455 3,820 1,275 1,060 7,111 Total home equity loans 150,847 210,224 139,102 65,071 62,147 213,779 436,935 41,826 1,319,931 Vehicle loans Pass 801,084 292,804 205,653 119,304 34,546 27,576 — — 1,480,967 Substandard 387 365 1,141 745 379 247 — — 3,264 Total vehicle loans 801,471 293,169 206,794 120,049 34,925 27,823 — — 1,484,231 Consumer loans Pass 117,856 81,266 47,195 20,595 9,794 12,202 63,025 1,578 353,511 Substandard 213 161 105 64 26 50 357 30 1,006 Total consumer loans 118,069 81,427 47,300 20,659 9,820 12,252 63,382 1,608 354,517 Total Personal Banking 1,715,387 1,187,738 697,848 362,956 279,014 1,366,605 500,317 43,434 6,153,299 Business Banking: Commercial real estate loans Pass 306,689 433,219 335,541 263,524 221,450 683,537 26,288 10,179 2,280,427 Special mention 803 1,808 52,513 3,296 1,394 8,529 729 23 69,095 Substandard — 34,153 44,712 46,045 56,077 89,311 492 5,169 275,959 Total commercial real estate loans 307,492 469,180 432,766 312,865 278,921 781,377 27,509 15,371 2,625,481 Commercial real estate - owner occupied Pass 69,084 19,452 51,997 60,824 57,676 94,687 2,822 2,707 359,249 Special mention — — — 769 1,959 1,444 856 — 5,028 Substandard — — 3,575 2,887 7,840 10,602 — 822 25,726 Total commercial real estate - owner occupied loans 69,084 19,452 55,572 64,480 67,475 106,733 3,678 3,529 390,003 Commercial loans Pass 224,367 110,171 73,276 27,668 20,748 76,987 262,805 12,301 808,323 Special mention 197 661 812 1,195 50 581 2,234 — 5,730 Substandard 329 4,767 5,102 4,437 1,529 2,116 6,667 8,609 33,556 Total commercial loans 224,893 115,599 79,190 33,300 22,327 79,684 271,706 20,910 847,609 Total Business Banking 601,469 604,231 567,528 410,645 368,723 967,794 302,893 39,810 3,863,093 Total loans $ 2,316,856 1,791,969 1,265,376 773,601 647,737 2,334,399 803,210 83,244 10,016,392 During the year ended December 31, 2021, $27.3 million of revolving loans were converted to term loans. |