| Loans And Allowance For Credit Losses | Loans and Allowance for Credit Losses Major classifications within the Company’s held for investment loan portfolio at June 30, 2020 and December 31, 2019 are as follows: (In thousands) June 30, 2020 December 31, 2019 Commercial: Business $ 6,858,217 $ 5,565,449 Real estate – construction and land 932,022 899,377 Real estate – business 2,941,163 2,833,554 Personal Banking: Real estate – personal 2,690,542 2,354,760 Consumer 1,966,707 1,964,145 Revolving home equity 334,627 349,251 Consumer credit card 666,597 764,977 Overdrafts 5,179 6,304 Total loans (1) $ 16,395,054 $ 14,737,817 (1) Accrued interest receivable totaled $37.0 million at June 30, 2020 and was included within other assets on the consolidated balance sheet. For the three months ended June 30, 2020, the Company wrote-off accrued interest by reversing interest income of $115 thousand and $751 thousand in the Commercial and Personal Banking portfolios, respectively. Similarly, for the six months ended June 30, 2020, the Company wrote-off accrued interest of $169 thousand and $2.7 million in the Commercial and Personal Banking portfolios, respectively. At June 30, 2020, loans of $4.3 billion were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. Additional loans of $1.5 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings. Allowance for credit losses The allowance for credit losses is measured using an average historical loss model which incorporates relevant information about past events, including historical credit loss experience on loans with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics including borrower type, collateral type and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily large loans on non-accrual status, are evaluated on an individual basis. For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the future loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given a single path economic forecast of key macroeconomic variables including GDP, disposable income, unemployment rate, various interest rates, CPI inflation rate, HPI, CREPI and market volatility. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting back to historical averages using a straight-line method. The forecast adjusted loss rate is applied to the loans over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions (except for customer only contractual extensions), renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed. Credit cards and certain similar consumer lines of credit do not have stated maturities and therefore, for these loan classes, remaining contractual lives are determined by estimating future cash flows expected to be received from customers until payments have been fully allocated to outstanding balances. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. Key model assumptions in the Company’s allowance for credit loss model include the forecast, the reasonable and supportable period, prepayment assumptions and qualitative factors applied for portfolio composition changes or credit administration changes. The assumptions utilized in estimating the Company’s allowance for credit losses at June 30, 2020 and March 31, 2020 are discussed below. Key Assumption June 30, 2020 March 31, 2020 Overall economic forecast • The recovery from the Global Coronavirus Recession (GCR) is gradual • Assumes no second wave of contagion and states continue to loosen lockdown measures • Gradual recovery in late 2021 and into 2022 • Significant uncertainty regarding the pandemic and its impact on economy • Immediate, sharp recession caused by unprecedented pandemic event, COVID-19 • Extremely low interest rates • Recovery into 2021 • Significant uncertainty regarding the severity and duration of the pandemic's impact on the economy Reasonable and supportable period and related reversion period • Two years for both commercial and personal banking loans • Reversion to historical average loss rates within two quarters using a straight-line method • One year for commercial loans • Two years for personal banking loans • Reversion to historical average loss rates within two quarters using a straight-line method Forecasted macro-economic variables • Unemployment rate ranging from 10.9% to 5.7% during the supportable forecast period • Real GDP growth ranges from 3.0% to 25.7% • Prime rate of 3.25% • Unemployment rate ranging from 3.6% to 6.0% during the supportable forecast period • Real GDP growth ranges from -11.3% to 13.8% • Prime rate ranges from 3.3% to 4.2% • See "Qualitative factors" below for qualitative adjustments made to the forecasted macro-economic variables stated herein Prepayment assumptions Commercial loans • 5% for most loan pools Personal banking loans • Ranging from 18.7% to 23.3% for most loan pools • 58.0% for consumer credit cards Commercial loans • 5% for most loan pools Personal banking loans • Ranging from 16.5% to 24.0% for most loan pools • 58.1% for consumer credit cards Qualitative factors Added net reserves using qualitative processes related to: • Loans originated in our recent expansion markets and loans that are designated as shared national credits • Changes in the composition of the loan portfolios • Loans downgraded to special mention, substandard, or non-accrual status Added reserves using qualitative processes related to: • Increase loss rates to reflect a recession past 2020 and higher unemployment • Loans originated in our recent expansion markets • Loans that are designated as shared national credits • Loans downgraded to special mention, substandard, or non-accrual status The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded. Sensitivity in the Allowance for Credit Loss model The allowance for credit losses is an estimate that requires significant judgment including projections of the macro-economic environment. The forecasted macro-economic environment continuously changes which can cause fluctuations in estimated expected losses. The current forecast projects a sharp recession with a recovery in the next two years as a result of the Coronavirus outbreak. This pandemic is unprecedented and information that could be used in the estimation of the allowance for credit losses changes frequently. Events such as the timing of governmental required business lock downs or possible additional waves of infection could prolong and deepen the projected recession. A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments during the three and six months ended June 30, 2020 follows: For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands) Commercial Personal Banking Total Commercial Personal Banking Total ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at end of prior period $ 83,551 $ 88,102 $ 171,653 $ 91,760 $ 68,922 $ 160,682 Adoption of ASU 2016-13 — — — (29,711) 8,672 (21,039) Balance at beginning of period $ 83,551 $ 88,102 $ 171,653 $ 62,049 $ 77,594 $ 139,643 Provision for credit losses on loans 50,245 27,246 77,491 71,353 49,006 120,359 Deductions: Loans charged off 3,386 7,859 11,245 3,802 21,835 25,637 Less recoveries on loans 143 2,702 2,845 953 5,426 6,379 Net loan charge-offs 3,243 5,157 8,400 2,849 16,409 19,258 Balance June 30, 2020 $ 130,553 $ 110,191 $ 240,744 $ 130,553 $ 110,191 $ 240,744 LIABILITY FOR UNFUNDED LENDING COMMITMENTS Balance at end of prior period $ 31,061 $ 1,189 $ 32,250 $ 399 $ 676 $ 1,075 Adoption of ASU 2016-13 — — — 16,057 33 16,090 Balance at beginning of period $ 31,061 $ 1,189 $ 32,250 $ 16,456 $ 709 $ 17,165 Provision for credit losses on unfunded lending commitments 2,991 58 3,049 17,596 538 18,134 Balance June 30, 2020 $ 34,052 $ 1,247 $ 35,299 $ 34,052 $ 1,247 $ 35,299 ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 164,605 $ 111,438 $ 276,043 $ 164,605 $ 111,438 $ 276,043 Allowance for loan losses A summary of the activity in the allowance for loan losses during the three and six months ended June 30, 2019 follows: For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands) Commercial Personal Banking Total Commercial Personal Banking Balance at beginning of period $ 93,643 $ 67,039 $ 160,682 $ 92,869 $ 67,063 $ 159,932 Provision for loan losses (1,666) 13,472 11,806 (498) 24,767 24,269 Deductions: Loans charged off 419 14,039 14,458 946 28,243 29,189 Less recoveries on loans 250 2,902 3,152 383 5,787 6,170 Net loan charge-offs (recoveries) 169 11,137 11,306 563 22,456 23,019 Balance June 30, 2019 $ 91,808 $ 69,374 $ 161,182 $ 91,808 $ 69,374 $ 161,182 Delinquent and non-accrual loans The Company considers loans past due on the day following the contractual repayment date, if the contractual repayment was not received by the Company as of the end of the business day. The following table provides aging information on the Company’s past due and accruing loans, in addition to the balances of loans on non-accrual status, at June 30, 2020 and December 31, 2019. (In thousands) Current or Less Than 30 Days Past Due 30 – 89 Days Past Due 90 Days Past Due and Still Accruing Non-accrual Total June 30, 2020 Commercial: Business $ 6,828,267 $ 10,429 $ 487 $ 19,034 $ 6,858,217 Real estate – construction and land 931,697 216 108 1 932,022 Real estate – business 2,934,625 4,617 — 1,921 2,941,163 Personal Banking: Real estate – personal 2,648,795 27,531 12,537 1,679 2,690,542 Consumer 1,941,697 22,576 2,434 — 1,966,707 Revolving home equity 332,916 1,098 613 — 334,627 Consumer credit card 653,016 5,176 8,405 — 666,597 Overdrafts 5,053 126 — — 5,179 Total $ 16,276,066 $ 71,769 $ 24,584 $ 22,635 $ 16,395,054 December 31, 2019 Commercial: Business $ 5,545,104 $ 12,064 $ 792 $ 7,489 $ 5,565,449 Real estate – construction and land 882,826 13,046 3,503 2 899,377 Real estate – business 2,830,494 2,030 — 1,030 2,833,554 Personal Banking: Real estate – personal 2,345,243 6,129 1,689 1,699 2,354,760 Consumer 1,928,082 34,053 2,010 — 1,964,145 Revolving home equity 347,258 1,743 250 — 349,251 Consumer credit card 742,659 10,703 11,615 — 764,977 Overdrafts 5,972 332 — — 6,304 Total $ 14,627,638 $ 80,100 $ 19,859 $ 10,220 $ 14,737,817 At June 30, 2020, the Company had $18.5 million and $540 thousand of non-accrual business and business real estate loans, respectively, that had no allowance for credit loss. The Company did not record any interest income on non-accrual loans during the three and six months ended June 30, 2020. Credit quality indicators The following table provides information about the credit quality of the Commercial loan portfolio. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment based on borrower specific information including but not limited to current financial information, historical payment experience, industry information, collateral levels and collateral types. The “pass” category consists of a range of loan grades that reflect increasing, though still acceptable, risk. A loan is assigned the risk rating at origination and then monitored throughout the contractual term for possible risk rating changes. Movement of risk through the various grade levels in the “pass” category is monitored for early identification of credit deterioration. The “special mention” rating is applied to loans where the borrower exhibits negative financial trends due to borrower specific or systemic conditions that, if left uncorrected, threaten its capacity to meet its debt obligations. The borrower is believed to have sufficient financial flexibility to react to and resolve its negative financial situation. It is a transitional grade that is closely monitored for improvement or deterioration. The “substandard” rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non-accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment. All loans are analyzed for risk rating updates annually. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated Special Mention, Substandard or Non-accrual are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by a credit review department which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan. The risk category of loans in the Commercial portfolio as of June 30, 2020 are as follows: Term Loans Amortized Cost Basis by Origination Year (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total Business Risk Rating: Pass $ 2,203,632 $ 1,267,837 $ 559,915 $ 389,807 $ 211,735 $ 325,202 $ 1,631,883 $ 6,590,011 Special mention 51,188 21,671 12,865 968 4,538 2,233 44,319 137,782 Substandard 16,370 39,097 4,508 3,270 3,548 14,897 29,700 111,390 Non-accrual 2,898 194 20 96 — 3,966 11,860 19,034 Total Business: $ 2,274,088 $ 1,328,799 $ 577,308 $ 394,141 $ 219,821 $ 346,298 $ 1,717,762 $ 6,858,217 Real estate-construction Risk Rating: Pass $ 225,124 $ 345,970 $ 135,951 $ 74,556 $ 43,265 $ 28,420 $ 39,714 $ 893,000 Special mention — — 10,148 14,465 — — — 24,613 Substandard 459 200 593 13,156 — — — 14,408 Non-accrual — — — — — 1 — 1 Total Real estate-construction: $ 225,583 $ 346,170 $ 146,692 $ 102,177 $ 43,265 $ 28,421 $ 39,714 $ 932,022 Real estate- business Risk Rating: Pass $ 484,465 $ 759,959 $ 488,680 $ 283,859 $ 352,181 $ 288,054 $ 45,955 $ 2,703,153 Special mention 18,812 4,490 2,677 46,663 20,287 2,788 84 95,801 Substandard 57,542 5,350 3,827 15,700 18,376 34,783 4,710 140,288 Non-accrual 198 294 769 — 540 120 — 1,921 Total Real-estate business: $ 561,017 $ 770,093 $ 495,953 $ 346,222 $ 391,384 $ 325,745 $ 50,749 $ 2,941,163 Commercial loans Risk Rating: Pass $ 2,913,221 $ 2,373,766 $ 1,184,546 $ 748,222 $ 607,181 $ 641,676 $ 1,717,552 $ 10,186,164 Special mention 70,000 26,161 25,690 62,096 24,825 5,021 44,403 258,196 Substandard 74,371 44,647 8,928 32,126 21,924 49,680 34,410 266,086 Non-accrual 3,096 488 789 96 540 4,087 11,860 20,956 Total Commercial loans: $ 3,060,688 $ 2,445,062 $ 1,219,953 $ 842,540 $ 654,470 $ 700,464 $ 1,808,225 $ 10,731,402 Information about the credit quality of the Commercial loan portfolio as of December 31, 2019 follows: Commercial Loans (In thousands) Business Real Estate-Construction Real Estate- Business Total December 31, 2019 Pass $ 5,393,928 $ 856,364 $ 2,659,827 $ 8,910,119 Special mention 80,089 42,541 92,626 215,256 Substandard 83,943 470 80,071 164,484 Non-accrual 7,489 2 1,030 8,521 Total $ 5,565,449 $ 899,377 $ 2,833,554 $ 9,298,380 The credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided as of June 30, 2020 below: Term Loans Amortized Cost Basis by Origination Year (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total Real estate-personal Current to 90 days past due $ 630,115 $ 575,509 $ 272,310 $ 250,490 $ 269,505 $ 668,025 $ 10,372 $ 2,676,326 Over 90 days past due 1,626 3,373 819 1,126 1,776 3,817 — 12,537 Non-accrual — 1 — 45 67 1,566 — 1,679 Total Real estate-personal: $ 631,741 $ 578,883 $ 273,129 $ 251,661 $ 271,348 $ 673,408 $ 10,372 $ 2,690,542 Consumer Current to 90 days past due $ 284,923 $ 431,407 $ 218,645 $ 163,449 $ 106,543 $ 125,534 $ 633,772 $ 1,964,273 Over 90 days past due — 380 148 265 184 552 905 2,434 Total Consumer: $ 284,923 $ 431,787 $ 218,793 $ 163,714 $ 106,727 $ 126,086 $ 634,677 $ 1,966,707 Revolving home equity Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 334,014 $ 334,014 Over 90 days past due — — — — — — 613 613 Total Revolving home equity: $ — $ — $ — $ — $ — $ — $ 334,627 $ 334,627 Consumer credit card Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 658,192 $ 658,192 Over 90 days past due — — — — — — 8,405 8,405 Total Consumer credit card: $ — $ — $ — $ — $ — $ — $ 666,597 $ 666,597 Overdrafts Current to 90 days past due $ 5,179 $ — $ — $ — $ — $ — $ — $ 5,179 Over 90 days past due — — — — — — — — Total Overdrafts: $ 5,179 $ — $ — $ — $ — $ — $ — $ 5,179 Personal banking loans Current to 90 days past due $ 920,217 $ 1,006,916 $ 490,955 $ 413,939 $ 376,048 $ 793,559 $ 1,636,350 $ 5,637,984 Over 90 days past due 1,626 3,753 967 1,391 1,960 4,369 9,923 23,989 Non-accrual — 1 — 45 67 1,566 — 1,679 Total Personal banking loans: $ 921,843 $ 1,010,670 $ 491,922 $ 415,375 $ 378,075 $ 799,494 $ 1,646,273 $ 5,663,652 Collateral-dependent loans The Company's collateral-dependent loans are comprised of large loans on non-accrual status. The Company requires that collateral-dependent loans are either over-collateralized or carry collateral equal to the amortized cost of the loan. The following table presents the amortized cost basis of collateral-dependent loans as of June 30, 2020. (In thousands) Business Assets Future Revenue Streams Real Estate Energy Total Commercial: Business $ 144 $ 3,701 $ — $ 14,673 $ 18,518 Real estate - business — — 540 — 540 Total $ 144 $ 3,701 $ 540 $ 14,673 $ 19,058 Other Personal Banking loan information As noted above, the credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided in the table in the above section on "Credit quality indicators." In addition, FICO scores are obtained and updated on a quarterly basis for most of the loans in the Personal Banking portfolio. This is a published credit score designed to measure the risk of default by taking into account various factors from a borrower's financial history and is considered supplementary information utilized by the Company, as management does not consider this information in evaluating the allowance for credit losses on loans. The Bank normally obtains a FICO score at the loan's origination and renewal dates, and updates are obtained on a quarterly basis. Excluded from the table below are certain personal real estate loans for which FICO scores are not obtained because the loans generally pertain to commercial customer activities and are often underwritten with other collateral considerations. These loans totaled $190.1 million at June 30, 2020 and $198.2 million at December 31, 2019. The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $195.0 million at June 30, 2020 and $199.2 million at December 31, 2019. As the healthcare loans are guaranteed by the hospital, customer FICO scores are not obtained for these loans. The personal real estate loans and consumer loans excluded below totaled less than 7% of the Personal Banking portfolio. For the remainder of loans in the Personal Banking portfolio, the table below shows the percentage of balances outstanding at June 30, 2020 and December 31, 2019 by FICO score. Personal Banking Loans % of Loan Category Real Estate - Personal Consumer Revolving Home Equity Consumer Credit Card June 30, 2020 FICO score: Under 600 1.1 % 2.6 % 1.3 % 6.0 % 600 - 659 1.9 4.2 2.8 13.6 660 - 719 8.2 14.6 8.3 33.3 720 - 779 24.5 23.5 20.4 26.6 780 and over 64.3 55.1 67.2 20.5 Total 100.0 % 100.0 % 100.0 % 100.0 % December 31, 2019 FICO score: Under 600 1.0 % 3.0 % 1.7 % 5.6 % 600 - 659 1.9 5.2 1.9 14.3 660 - 719 9.2 15.4 9.0 32.2 720 - 779 25.7 27.0 21.5 26.6 780 and over 62.2 49.4 65.9 21.3 Total 100.0 % 100.0 % 100.0 % 100.0 % Troubled debt restructurings Restructured loans are those extended to borrowers who are experiencing financial difficulty and who have been granted a concession. Restructured loans are placed on non-accrual status if the Company does not believe it probable that amounts due under the contractual terms will be collected. Commercial performing restructured loans are primarily comprised of certain business, construction and business real estate loans classified as substandard but renewed at rates judged to be non-market. These loans are performing in accordance with their modified terms, and because the Company believes it probable that all amounts due under the modified terms of the agreements will be collected, interest on these loans is being recognized on an accrual basis. Troubled debt restructurings also include certain credit card and other small consumer loans under various debt management and assistance programs. Modifications to these loans generally involve removing the available line of credit, placing loans on amortizing status, and lowering the contractual interest rate. Certain personal real estate, revolving home equity, and consumer loans were classified as consumer bankruptcy troubled debt restructurings because they were not reaffirmed by the borrower in bankruptcy proceedings. Interest on these loans is being recognized on an accrual basis, as the borrowers are continuing to make payments. Other consumer loans classified as troubled debt restructurings consist of various other workout arrangements with consumer customers. Section 4013 of the CARES Act was signed into law on March 27, 2020, and includes a provision that short-term modifications are not troubled debt restructurings, if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to December 31, 2019. In addition to the CARES Act, bank regulatory agencies issued interagency guidance stating suspending the troubled debt restructuring classification would be appropriate if the borrower was less than 30 days past due at the time the modification program is implemented. The guidance also provides that loans generally will not be adversely classified if the short-term modification is related to COVID-19 relief programs. The Company follows the guidance under the CARES Act when determining if a customer’s modification is subject to troubled debt restructuring classification. If it is deemed the modification is not short-term, not COVID-19 related or the customer does not meet the criteria under the guidance to be scoped out of troubled debt restructuring classification, the Company will evaluate the loan modifications under its existing framework which requires modifications that result in a concession to a borrower experiencing financial difficulty be accounted for as a troubled debt restructuring. (In thousands) June 30, 2020 December 31, 2019 Accruing restructured loans: Commercial $ 57,918 $ 55,934 Assistance programs 8,340 8,365 Consumer bankruptcy 3,264 3,592 Other consumer 3,202 3,621 Non-accrual loans 7,491 7,938 Total troubled debt restructurings $ 80,215 $ 79,450 The table below shows the balance of troubled debt restructurings by loan classification at June 30, 2020, in addition to the outstanding balances of these restructured loans which the Company considers to have been in default at any time during the past twelve months. For purposes of this disclosure, the Company considers "default" to mean 90 days or more past due as to interest or principal. (In thousands) June 30, 2020 Balance 90 days past due at any time during previous 12 months Commercial: Business $ 27,475 $ — Real estate - construction and land 42 — Real estate - business 36,957 — Personal Banking: Real estate - personal 3,818 256 Consumer 3,798 45 Revolving home equity 60 — Consumer credit card 8,065 332 Total troubled debt restructurings $ 80,215 $ 633 For those loans on non-accrual status also classified as restructured, the modification did not create any further financial effect on the Company as those loans were already recorded at net realizable value. For those performing commercial loans classified as restructured, there were no concessions involving forgiveness of principal or interest and, therefore, there was no financial impact to the Company as a result of modification to these loans. No financial impact resulted from those performing loans where the debt was not reaffirmed in bankruptcy, as no changes to loan terms occurred in that process. However, the effects of modifications to loans under various debt management and assistance programs were estimated to decrease interest income by approximately $881 thousand on an annual, pre-tax basis, compared to amounts contractually owed. Other modifications to consumer loans mainly involve extensions and other small modifications that did not include the forgiveness of principal or interest. The allowance for credit losses related to troubled debt restructurings on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as troubled debt restructurings. Those performing loans classified as troubled debt restructurings are accruing loans which management expects to collect under contractual terms. Performing commercial loans having no other concessions granted other than being renewed at non-market interest rates are judged to have similar risk characteristics as non-troubled debt commercial loans and are collectively evaluated based on internal risk rating, loan type, delinquency, historical experience and current economic factors. Performing personal banking loans classified as troubled debt restructurings resulted from the borrower not reaffirming the debt during bankruptcy and have had no other concession granted, other than the Bank's future limitations on collecting payment deficiencies or in pursuing foreclosure actions. As such, they have similar risk characteristics as non-troubled debt personal banking loans and are evaluated collectively based on loan type, delinquency, historical experience and current economic factors. If a troubled debt restructuring defaults and is already on non-accrual status, the allowance for credit losses continues to be based on individual evaluation, using discounted expected cash flows or the fair value of collateral. If an accruing troubled debt restructuring defaults, the loan's risk rating is downgraded to non-accrual status and the loan's related allowance for credit losses is determined based on individual evaluation, or if necessary, the loan is charged off and collection efforts begun. The Company had commitments of $12.3 million at June 30, 2020 to lend additional funds to borrowers with restructured loans. Impaired loans The following Impaired loans disclosures were superceded by ASC 2016-13. The table below shows the Company’s balances of impaired loans at December 31, 2019. These loans consist of all loans on non-accrual status and other restructured loans whose terms have been modified and classified as troubled debt restructurings. These restructured loans are performing in accordance with their modified terms, and because the Company believes it probable that all amounts due under the modified terms of the agreements will be collected, interest on these loans is being recognized on an accrual basis. They are discussed further in the "Troubled debt restructurings" section above. (In thousands) Dec. 31, 2019 Non-accrual loans $ 10,220 Restructured loans (accruing) 71,512 Total impaired loans $ 81,732 The following table shows the balance in the allowance for loan losses and the related loan balance at December 31, 2019, disaggregated on the basis of impairment methodology. Impaired loans evaluated under Accounting Standards Codification (ASC) 310-10-35 include loans on non-accrual status, which are individually evaluated for impairment, and other impaired loans deemed to have similar risk characteristics, which are collectively evaluated. All other loans are collectively evaluated for impairment under ASC 450-20. Impaired Loans All Other Loans (In thousands) Allowance for Loan Losses Loans Outstanding Allowance for Loan Losses Loans Outstanding December 31, 2019 Commercial $ 1,629 $ 64,500 $ 90,131 $ 9,233,880 Personal Banking 1,117 17,232 67,805 5,422,205 Total $ 2,746 $ 81,732 $ 157,936 $ 14,656,085 The following table provides additional information about impaired loans held by the Company at December 31, 2019, segregated between loans for which an allowance for credit losses has been provided and loans for which no allowance has been provided. (In thousands) Recorded Investment Unpaid Principal Balance Related Allowance December 31, 2019 With no related allowance recorded: Business $ 7,054 $ 13,738 $ — $ 7,054 $ 13,738 $ — With an allowance recorded: Business $ 30,437 $ 30,487 $ 837 Real estate – construction and land 46 51 1 Real estate – business 26,963 27,643 791 Real estate – personal 4,729 5,968 258 Consumer 4,421 4,421 35 Revolving home equity 35 35 1 Consumer credit card 8,047 8,047 823 $ 74,678 $ 76,652 $ 2,746 Total $ 81,732 $ 90,390 $ 2,746 Total average impaired loans for the three and six month periods ended June 30, 2019 are shown in the table below. (In thousands) Commercial Personal Banking Total Average Impaired Loans: For the three months ended June 30, 2019 Non-accrual loans $ 9,649 $ 2,347 $ 11,996 Restructured loans (accruing) 37,621 15,731 53,352 Total $ 47,270 $ 18,078 $ 65,348 For the six months ended June 30, 2019 Non-accrual loans $ 9,996 $ 2,161 $ 12,157 Restructured loans (accruing) 45,570 15,585 61,155 Total $ 55,566 $ 17,746 $ 73,312 The table below shows interest income recognized during the three and six month periods ended June 30, 2019, respectively, for impaired loans held at the end of each period. This interest all relates to accruing restructured loans, as discussed in the "Troubled debt restructurings" section above. For the Three Months Ended June 30 For the Six Months Ended June 30 (In thousands) 2019 2019 Interest income recognized on impaired loans: Business $ 341 $ 682 Real estate – construction and land 6 11 Real estate – business 116 231 Real estate – personal 31 62 Consumer 79 157 Revolving home equity 1 2 Consumer credit card 168 335 Total $ 742 $ 1,480 Loans held for sale The Company designates certain long-term fixed rate personal real estate loans as held for sale, and the Company has elected the fair value option for these loans. The election of the fair value option aligns the accounting for these loans with the related economic hedges discussed in Note 11. The loans are primarily sold to FNMA, FHLMC, and GNMA. The Company has resumed sales of these loans, as volatility in the market caused by the COVID-19 outbreak has eased. At June 30, 2020, |
