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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q  
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
Or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 001-35070
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts
04-2976299
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
Ten Post Office Square
02109
Boston,
Massachusetts
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (617) 912-1900
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange which registered
Common StockBPFHNASDAQ Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer ☐
Non-accelerated filer    ☐Smaller reporting company    ☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No x
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of July 31, 2020:
Common Stock, Par Value $1.00 Per Share82,196,822
(class)(outstanding)


BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
FORM 10-Q
TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION
Item 1
Item 2
Item 3
Item 4
PART II—OTHER INFORMATION
Item 1
Item 1A
Item 2
Item 3
Item 4
Item 5
Item 6
Certifications

i


PART I. FINANCIAL INFORMATION, ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
 June 30, 2020December 31, 2019
 
(In thousands, except share 
and per share data)
Assets:
Cash and cash equivalents$179,027  $292,479  
Investment securities available-for-sale (amortized cost of $959,850 and $966,900 at June 30, 2020 and December 31, 2019, respectively)
1,002,970  978,284  
Investment securities held-to-maturity (fair value of $43,351 and $47,949 at June 30, 2020 and December 31, 2019, respectively)
42,495  48,212  
Equity securities at fair value24,492  18,810  
Stock in Federal Home Loan Bank and Federal Reserve Bank42,407  39,078  
Loans held for sale9,786  7,386  
Total loans7,332,954  6,976,704  
Less: Allowance for loan losses89,324  71,982  
Net loans7,243,630  6,904,722  
Premises and equipment, net43,805  44,527  
Goodwill57,607  57,607  
Intangible assets, net8,935  10,352  
Fees receivable3,921  4,095  
Accrued interest receivable24,918  24,175  
Deferred income taxes, net9,116  11,383  
Right-of-use assets94,143  102,075  
Other assets371,654  287,316  
Total assets$9,158,906  $8,830,501  
Liabilities:
Deposits$7,427,397  $7,241,476  
Securities sold under agreements to repurchase46,623  53,398  
Federal Home Loan Bank borrowings426,313  350,829  
Junior subordinated debentures106,363  106,363  
Lease liabilities108,234  117,214  
Other liabilities218,771  140,820  
Total liabilities8,333,701  8,010,100  
Redeemable Noncontrolling Interests—  1,383  
Shareholders’ Equity:
Common stock, $1.00 par value; authorized: 170,000,000 shares; issued and outstanding: 82,058,483 shares at June 30, 2020 and 83,265,674 shares at December 31, 2019
82,058  83,266  
Additional paid-in capital594,463  600,708  
Retained earnings118,647  127,469  
Accumulated other comprehensive income30,037  7,575  
Total shareholders’ equity825,205  819,018  
Total liabilities, redeemable noncontrolling interests and shareholders’ equity$9,158,906  $8,830,501  
See accompanying notes to Consolidated Financial Statements.
1

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 Three months ended June 30,Six months ended June 30,
 2020201920202019
 (In thousands, except share and per share data)
Interest and dividend income:
Loans$62,807  $71,943  $129,165  $141,876  
Taxable investment securities859  1,121  1,727  2,306  
Non-taxable investment securities2,005  1,901  4,003  3,802  
Mortgage-backed securities2,566  2,706  5,353  5,603  
Short-term investments and other582  1,057  1,653  1,965  
Total interest and dividend income68,819  78,728  141,901  155,552  
Interest expense:
Deposits7,335  14,515  20,131  28,573  
Federal Home Loan Bank borrowings1,755  5,027  3,789  7,807  
Junior subordinated debentures764  1,080  1,681  2,201  
Repurchase agreements and other short-term borrowings27  646  105  1,173  
Total interest expense9,881  21,268  25,706  39,754  
Net interest income58,938  57,460  116,195  115,798  
Provision/(credit) for loan losses22,604  1,363  39,566  (63) 
Net interest income after provision/(credit) for loan losses36,334  56,097  76,629  115,861  
Fees and other income:
Wealth management and trust fees17,261  18,912  35,632  37,970  
Investment management fees1,770  2,455  3,695  5,105  
Other banking fee income2,395  2,867  4,885  5,366  
Gain on sale of loans, net204  58  304  131  
Gain on OREO, net—  —  —  91  
Other1,032  88  (333) 965  
Total fees and other income22,662  24,380  44,183  49,628  
Operating expense:
Salaries and employee benefits33,937  32,706  69,033  68,432  
Occupancy and equipment7,560  7,852  15,206  16,200  
Information systems7,113  5,137  13,838  10,997  
Professional services3,446  3,313  7,047  6,873  
Marketing and business development2,313  1,934  4,203  3,019  
Amortization of intangibles702  672  1,417  1,344  
FDIC insurance767  585  767  1,245  
Restructuring—  —  —  1,646  
Other5,615  3,460  10,850  6,456  
Total operating expense61,453  55,659  122,361  116,212  
Income/(loss) before income taxes(2,457) 24,818  (1,549) 49,277  
Income tax expense841  5,369  943  10,286  
Net income/(loss) before attribution to noncontrolling interests(3,298) 19,449  (2,492) 38,991  
(Continued)
2

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 Three months ended June 30,Six months ended June 30,
 2020201920202019
Less: Net income attributable to noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company$(3,298) $19,380  $(2,498) $38,822  
Adjustments to net income/(loss) attributable to the Company to arrive at net income/(loss) attributable to common shareholders—  (816) 414  741  
Net income/(loss) attributable to common shareholders for earnings/(loss) per share calculation$(3,298) $18,564  $(2,084) $39,563  
Basic earnings/(loss) per share attributable to common shareholders:
Total attributable to common shareholders:$(0.04) $0.22  $(0.03) $0.47  
Weighted average basic common shares outstanding81,929,752  83,565,780  82,464,438  83,426,213  
Diluted earnings/(loss) per share attributable to common shareholders:
Total attributable to common shareholders:$(0.04) $0.22  $(0.03) $0.47  
Weighted average diluted common shares outstanding81,929,752  84,048,972  82,464,438  84,036,050  
 See accompanying notes to Consolidated Financial Statements.
3

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

 Three months ended June 30,Six months ended June 30,
 2020201920202019
(In thousands)
Net income/(loss) attributable to the Company$(3,298) $19,380  $(2,498) $38,822  
Other comprehensive income/(loss), net of tax:
Net unrealized gain/(loss) on securities available-for-sale8,198  10,665  22,687  22,233  
Unrealized gain/(loss) on cash flow hedges(302) (6) (302) (33) 
Reclassification adjustment for net realized (gain)/loss included in net income107  (136) 107  (356) 
Net unrealized gain/(loss) on cash flow hedges(195) (142) (195) (389) 
Net unrealized gain/(loss) on other (30) —  (30) —  
Other comprehensive income/(loss), net of tax7,973  10,523  22,462  21,844  
Total comprehensive income/(loss) attributable to the Company, net of tax$4,675  $29,903  $19,964  $60,666  
 See accompanying notes to Consolidated Financial Statements.

4

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

Six months ended June 30, 2020 and 2019
 
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income/(Loss)		Total
 (In thousands, except share data)
Balance at December 31, 2018$83,656  $600,196  $87,821  $(17,719) $753,954  
Net income/(loss) attributable to the Company—  —  38,822  —  38,822  
Other comprehensive income/(loss), net—  —  —  21,844  21,844  
Dividends paid to common shareholders: $0.24 per share
—  —  (20,200) —  (20,200) 
Net proceeds from issuance of:
143,147 shares of common stock
143  990  —  —  1,133  
37,511 shares of incentive stock grants, net of 9,377 shares canceled or forfeited and 115,173 shares withheld for employee taxes
(88) (587) —  —  (675) 
Amortization of stock compensation and employee stock purchase plan—  2,340  —  —  2,340  
Stock options exercised63  372  —  —  435  
Other equity adjustments—  558  —  —  558  
Balance at June 30, 2019$83,774  $603,869  $106,443  $4,125  $798,211  
Balance at December 31, 2019$83,266  $600,708  $127,469  $7,575  $819,018  
Impact due to change in accounting principle (1)—  —  13,492  —  13,492  
Net income/(loss) attributable to the Company—  —  (2,498) —  (2,498) 
Other comprehensive income/(loss), net—  —  —  22,462  22,462  
Dividends paid to common shareholders: $0.24 per share
—  —  (19,816) —  (19,816) 
Repurchase of 1,565,060 shares of common stock
(1,565) (11,242) —  —  (12,807) 
Net proceeds from issuance of:
111,055 shares of common stock
111  949  —  —  1,060  
271,004 shares of incentive stock grants, net of 31,159 shares withheld for employee taxes
240  3,436  —  —  3,676  
Amortization of stock compensation and employee stock purchase plan—  (879) —  —  (879) 
Stock options exercised7  48  —  —  55  
Other equity adjustments(1) 1,443  —  —  1,442  
Balance at June 30, 2020$82,058  $594,463  $118,647  $30,037  $825,205  
_____________________
(1) Impact due to the adoption of ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements.”
See accompanying notes to Consolidated Financial Statements.
5

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

Three months ended June 30, 2020 and 2019
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income/(Loss)		Total
 (In thousands, except share data)
Balance at March 31, 2019$83,774  $604,288  $97,155  $(6,398) $778,819  
Net income/(loss) attributable to the Company—  —  19,380  —  19,380  
Other comprehensive income/(loss), net—  —  —  10,523  10,523  
Dividends paid to common shareholders: $0.12 per share
—  —  (10,092) —  (10,092) 
Net proceeds from issuance of:
39,156 shares of common stock
39  114  —  —  153  
16,916 shares of incentive stock grants, net of 6,401 shares canceled or forfeited and 101,262 shares withheld for employee taxes
(92) (753) —  —  (845) 
Amortization of stock compensation and employee stock purchase plan—  988  —  —  988  
Stock options exercised53  332  —  —  385  
Other equity adjustments—  (1,100) —  —  (1,100) 
Balance at June 30, 2019$83,774  $603,869  $106,443  $4,125  $798,211  
Balance at March 31, 2020$81,800  $593,167  $131,761  $22,064  $828,792  
Net income/(loss) attributable to the Company—  —  (3,298) —  (3,298) 
Other comprehensive income/(loss), net—  —  —  7,973  7,973  
Dividends paid to common shareholders: $0.12 per share
—  —  (9,816) —  (9,816) 
Net proceeds from issuance of:
22,727 shares of common stock
23  117  —  —  140  
265,465 shares of incentive stock grants, net of 30,195 shares withheld for employee taxes
235  3,379  —  —  3,614  
Amortization of stock compensation and employee stock purchase plan—  (2,227) —  —  (2,227) 
Other equity adjustments—  27  —  —  27  
Balance at June 30, 2020$82,058  $594,463  $118,647  $30,037  $825,205  
See accompanying notes to Consolidated Financial Statements.
6

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 Six months ended June 30,
 20202019
 (In thousands)
Cash flows from operating activities:
Net income/(loss) attributable to the Company$(2,498) $38,822  
Adjustments to arrive at net income/(loss):
Net income attributable to noncontrolling interests6  169  
Net income/(loss) before attribution to noncontrolling interests(2,492) 38,991  
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Depreciation and amortization11,630  11,712  
Net income attributable to noncontrolling interests(6) (169) 
Stock compensation, net of cancellations2,997  2,933  
Provision/(credit) for loan losses39,566  (63) 
Loans originated for sale(42,611) (17,103) 
Proceeds from sale of loans held for sale40,451  16,406  
Deferred income tax expense/(benefit)(12,233) 959  
Decrease/(increase) in right-of-use assets7,932  (2,419) 
Increase/(decrease) in operating lease liabilities(8,980) 2,476  
Net decrease/(increase) in other operating activities(11,973) (26,560) 
Net cash provided by/(used in) operating activities24,281  27,163  
Cash flows from investing activities:
Investment securities available-for-sale:
Purchases(29,481) (9,845) 
Maturities, calls, redemptions, and principal payments32,481  64,230  
Investment securities held-to-maturity:
Principal payments5,541  15,872  
Equity securities at fair value:
Transfers out(28,137) (35,349) 
Transfers in22,455  30,485  
(Investments)/distributions in trusts, net(209) 504  
Contingent considerations from divestitures2,497  2,019  
(Purchase)/redemption of Federal Home Loan Bank and Federal Reserve Bank stock(3,329) (15,190) 
Net increase in portfolio loans(358,604) (188,548) 
Proceeds from recoveries of loans previously charged off235  577  
Proceeds from sale of OREO—  492  
Capital expenditures(4,221) (811) 
Net cash provided by/(used in) investing activities(360,772) (135,564) 
(Continued)
7

BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 Six months ended June 30,
 20202019
(In thousands)
Cash flows from financing activities:
Net increase/(decrease) in deposits185,921  (343,207) 
Net increase/(decrease) in securities sold under agreements to repurchase(6,775) 25,444  
Net increase/(decrease) in federal funds purchased—  (115,000) 
Net increase/(decrease) in short-term Federal Home Loan Bank borrowings(75,000) 340,000  
Advances of long-term Federal Home Loan Bank borrowings425,000  290,000  
Repayments of long-term Federal Home Loan Bank borrowings(274,516) (130,076) 
Dividends paid to common shareholders(19,816) (20,200) 
Repurchase of common stock(12,807) —  
Proceeds from stock option exercises55  435  
Proceeds from issuance of common stock1,060  1,133  
Tax withholding for share based compensation awards(200) (1,268) 
Distributions paid to noncontrolling interests(6) (169) 
Other equity adjustments123  (194) 
Net cash provided by/(used in) financing activities223,039  46,898  
Net increase/(decrease) in cash and cash equivalents(113,452) (61,503) 
Cash and cash equivalents at beginning of year292,479  127,259  
Cash and cash equivalents at end of period$179,027  $65,756  
Supplemental disclosure of cash flow items:
Cash paid for interest$25,106  $37,382  
Cash paid for income taxes, (net of refunds received)$1,969  $14,277  
Change in unrealized gain/(loss) on available-for-sale securities, net of tax$22,687  $22,233  
Change in unrealized gain/(loss) on cash flow hedges, net of tax$(195) $(389) 
Change in unrealized gain/(loss) on other, net of tax$(30) $—  
Non-cash transactions:
Loans charged off$(2,074) $(759) 
See accompanying notes to Consolidated Financial Statements.

8
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements

1.  Basis of Presentation and Summary of Significant Accounting Policies
Boston Private Financial Holdings, Inc. (the “Company” or “BPFH”), is a bank holding company (the “Holding Company”) with two reportable segments: (i) Private Banking and (ii) Wealth Management and Trust.
The Private Banking segment is comprised of the banking operations of Boston Private Bank & Trust Company (the “Bank” or “Boston Private Bank”), a trust company chartered by the Commonwealth of Massachusetts, whose deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”), and a wholly-owned subsidiary of the Company. Boston Private Bank is a member of the Federal Reserve Bank of Boston and primarily operates in three geographic markets: New England, Northern California, and Southern California. The Private Banking segment is principally engaged in providing private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations. In addition, the Private Banking segment is an active provider of financing for affordable housing, first-time homebuyers, economic development, social services, community revitalization and small businesses.
The Wealth Management and Trust segment is comprised of Boston Private Wealth LLC (“Boston Private Wealth”), a registered investment adviser (“RIA”) and wholly-owned subsidiary of the Bank, as well as the trust operations of Boston Private Bank. The Wealth Management and Trust segment offers planning-based financial strategies, wealth management, family office, financial planning, tax planning, and trust services to individuals, families, institutions, and nonprofit institutions. On September 1, 2019, KLS Professional Advisors Group, LLC (“KLS”) merged with and into Boston Private Wealth. Prior to the merger, the results of KLS were reported in a third reportable segment, “Affiliate Partners”, as discussed below. The Wealth Management and Trust segment operates in New England, New York, Southeast Florida, Northern California, and Southern California.
Prior to the third quarter of 2019, the Company had three reportable segments: Affiliate Partners, Private Banking, and Wealth Management and Trust. The Affiliate Partners segment was comprised of two affiliates: KLS and Dalton, Greiner, Hartman, Maher & Co., LLC (“DGHM”), each of which are RIAs. With the integration of KLS into Boston Private Wealth in September of 2019, the Company reorganized its segment reporting structure to align with how its financial performance and strategy are reviewed and managed. The results of KLS are included in the results of Boston Private Wealth within the Wealth Management and Trust segment, and the results of DGHM are included within the Holding Company and Eliminations for all periods presented. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 3: Asset Sales and Divestitures” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information.
The Company conducts substantially all of its business through its two reportable segments. All significant intercompany accounts and transactions have been eliminated in consolidation, and the portion of income allocated to the owners other than the Company is included in “Net income attributable to noncontrolling interests” in the Consolidated Statements of Operations for the periods owned. Redeemable noncontrolling interests, if any, in the Consolidated Balance Sheets reflect the maximum redemption value of agreements with the owners of DGHM.
The unaudited interim Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include all necessary adjustments of a normal recurring nature, which, in the opinion of management, are required for a fair presentation of the results of operations and financial condition of the Company. The interim results of consolidated operations are not necessarily indicative of the results for the entire year.
The information in this report should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission (“SEC”). Prior period amounts are reclassified whenever necessary to conform to the current period presentation. With the integration of KLS into Boston Private Wealth and the related change to reportable segments, fee revenue from KLS is reported in Wealth management and trust fees for all periods on the Consolidated Statements of Operations, which was presented as Wealth advisory fees in prior periods.
The Company’s significant accounting policies are described in Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC. For interim reporting purposes, the Company follows the same significant accounting policies, except for the following new accounting pronouncements from the Financial Accounting Standards Board (the “FASB”) that were adopted effective January 1, 2020:
•In June 2016, the FASB issued ASU 2016-13. Throughout 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”); ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”); ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 942)—Effective Dates (“ASU 2019-10”); and ASU 2019-11, Codification
9

Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”). This update and related amendments to Topic 326 are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology with a current expected credit losses (“CECL”) model methodology that reflects expected credit losses and requires consideration of a reasonable and supportable forecast to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019. The Company adopted this update on January 1, 2020 utilizing a modified retrospective approach. On adoption of ASU 2016-13 on January 1, 2020, the Company recognized a decrease in the allowance for loan losses of $20.4 million and an increase in the reserve for unfunded loan commitments of $1.4 million. The net, after-tax impact of the decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million as shown in the Consolidated Statements of Changes in Shareholders’ Equity.
2. Earnings/(Loss) Per Share
The treasury stock method of calculating earnings/(loss) per share (“EPS”) is presented below for the three and six months ended June 30, 2020 and 2019. The following tables present the computations of basic and diluted EPS:
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands, except share and per share data)
Basic earnings/(loss) per share - Numerator:
Net income/(loss) before attribution to noncontrolling interests$(3,298) $19,449  $(2,492) $38,991  
Less: Net income attributable to noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company(3,298) 19,380  (2,498) 38,822  
Decrease/(increase) in noncontrolling interests’ redemption values (1)—  (816) 414  741  
Net income/(loss) attributable to common shareholders, treasury stock method$(3,298) $18,564  $(2,084) $39,563  
Basic earnings/(loss) per share - Denominator:
Weighted average basic common shares outstanding81,929,752  83,565,780  82,464,438  83,426,213  
Per share data - Basic earnings/(loss) per share:
Total attributable to common shareholders$(0.04) $0.22  $(0.03) $0.47  
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands, except share and per share data)
Diluted earnings/(loss) per share - Numerator:
Net income/(loss) attributable to common shareholders, after assumed dilution$(3,298) $18,564  $(2,084) $39,563  
Diluted earnings/(loss) per share - Denominator:
Weighted average basic common shares outstanding81,929,752  83,565,780  82,464,438  83,426,213  
Dilutive effect of: Time-based and market-based stock options, performance-based and time-based restricted stock, and performance-based and time-based restricted stock units, and other dilutive securities (2)—  483,192  —  609,837  
Weighted average diluted common shares outstanding (2)81,929,752  84,048,972  82,464,438  84,036,050  
Per share data - Diluted earnings/(loss) per share:
Total attributable to common shareholders$(0.04) $0.22  $(0.03) $0.47  
Dividends per share declared and paid on common stock$0.12  $0.12  $0.24  $0.24  
_____________________
(1)See Part II. Item 8. “Financial Statements and Supplementary Data - Note 14: Noncontrolling Interests” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the redemption values related to the redeemable noncontrolling interests. In accordance with the FASB Accounting Standards Codification Distinguishing Liabilities from Equity (“ASC 480”), an increase in redemption value from period to period reduces income attributable to common shareholders. A decrease in redemption value from period to period increases income attributable to common shareholders, but only to the extent that the cumulative change in redemption value remains a cumulative increase since adoption of this standard in the first quarter of 2009.
(2)The diluted EPS computations for the three and six months ended June 30, 2020 and 2019 do not assume the conversion, exercise, or contingent issuance of the following shares for the following periods because the result would have been anti-
10
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
dilutive for the periods indicated. This includes shares excluded from the computation of diluted earnings/(loss) per share because the effect would have been anti-dilutive given the net loss during the period, and out-of-the money options, where the exercise prices were greater than the average market price of common shares for the period, because their inclusion would have been anti-dilutive As a result of the anti-dilution, the potential common shares excluded from the diluted EPS computation are as follows:
Three months ended June 30,Six months ended June 30,
2020201920202019
Anti-dilutive shares excluded from computation of average dilutive EPS(In thousands)
Potential common shares from: options, restricted stock, or other dilutive securities2,328  750  1,813  820  
Total anti-dilutive shares excluded from computation of average dilutive EPS2,328  750  1,813  820  

3. Reportable Segments
Management reporting
The Company has two reportable segments: (i) Private Banking and (ii) Wealth Management and Trust, as well as Boston Private Financial Holdings, Inc. (the “Holding Company”) within Holding Company and Eliminations. The financial performance of the Company is managed and evaluated according to these two segments. Each segment is managed by a segment leader (“Segment Leader”) who has full authority and responsibility for the performance and the allocation of resources within their segment. The Company’s Chief Executive Officer (“CEO”) is the Company’s Chief Operating Decision Maker (“CODM”).
The Segment Leader for Private Banking is the CEO of Boston Private Bank, who is also the Company’s CEO. The Bank’s banking operations are reported in the Private Banking segment. The Segment Leader for Wealth Management and Trust is the President of Private Banking, Wealth and Trust. The Segment Leader of Wealth Management and Trust reports to the CEO of the Company. The Segment Leaders have authority with respect to the allocation of capital within their respective segments, management oversight responsibility, performance assessments, and overall authority and accountability within their respective segment. The Company’s CODM communicates with the President of Private Banking, Wealth and Trust regarding profit and loss responsibility, strategic planning, priority setting and other matters. The Company’s Chief Financial Officer reviews all financial detail with the CODM on a monthly basis.
Description of reportable segments
Private Banking
The Private Banking segment operates primarily in three geographic markets: New England, Northern California and Southern California. The Bank conducts business under the name of Boston Private Bank & Trust Company in all markets. The Bank is chartered by the Commonwealth of Massachusetts and is insured by the FDIC. The Bank is principally engaged in providing private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations. In addition, the Bank is an active provider of financing for affordable housing, first-time homebuyers, economic development, social services, community revitalization and small businesses.
Wealth Management and Trust
The Wealth Management and Trust segment is comprised of the trust operations of the Bank and the operations of Boston Private Wealth. On September 1, 2019, KLS merged into Boston Private Wealth. As a result, the results of KLS are included in the results of Boston Private Wealth within the Wealth Management and Trust segment for all periods presented. The Wealth Management and Trust segment offers planning-based financial strategies, wealth management, family office, financial planning, tax planning, and trust services to individuals, families, institutions, and nonprofit institutions. The Wealth Management and Trust segment operates in New England, New York, Southeast Florida, Northern California and Southern California.
Changes to segment reporting
With the integration of KLS into Boston Private Wealth in the third quarter of 2019, the Company reorganized the segment reporting structure to align with how the Company's financial performance and strategy is reviewed and managed. The results of KLS are included in the results of Boston Private Wealth within the Wealth Management and Trust segment, and the results of DGHM are included in Holding Company and Eliminations for all periods presented.
Measurement of segment profit and assets
The accounting policies of the segments are the same as those described in Part I. Item 1. "Notes to Unaudited Consolidated Financial Statements - Note 1: Basis of Presentation and Summary of Significant Accounting Policies."
11
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)

Reconciliation of reportable segment items
The following tables present a reconciliation of the revenues, expenses, assets, and other significant items of reportable segments as of and for the three and six months ended June 30, 2020 and 2019.
Three months ended June 30,Six months ended June 30,
2020201920202019
Private Banking (1)(In thousands)
Net interest income$59,690  $58,419  $117,780  $117,756  
Fees and other income3,597  2,804  4,705  6,062  
Total revenue63,287  61,223  122,485  123,818  
Provision/(credit) for loan losses22,604  1,363  39,566  (63) 
Operating expense (2)42,914  37,805  85,502  79,122  
Income/(loss) before income taxes(2,231) 22,055  (2,583) 44,759  
Income tax expense/(benefit)(1,255) 4,878  (2,186) 9,308  
Net income/(loss) before attribution to noncontrolling interests(976) 17,177  (397) 35,451  
Net income/(loss) attributable to the Company$(976) $17,177  $(397) $35,451  
Assets$9,104,761  $8,619,399  $9,104,761  $8,619,399  
Amortization of intangibles$64  $—  $141  $—  
Depreciation$2,611  $2,373  $5,237  $5,043  
Three months ended June 30,Six months ended June 30,
2020201920202019
Wealth Management and Trust (1)(In thousands)
Net interest income$7  $104  $79  $210  
Fees and other income17,292  18,956  35,777  38,082  
Total revenue17,299  19,060  35,856  38,292  
Operating expense (2)14,651  14,409  30,100  29,976  
Income before income taxes2,648  4,651  5,756  8,316  
Income tax expense898  1,520  1,972  2,714  
Net income before attribution to noncontrolling interests1,750  3,131  3,784  5,602  
Net income attributable to the Company$1,750  $3,131  $3,784  $5,602  
Assets$146,254  $151,128  $146,254  $151,128  
Amortization of intangibles$638  $672  $1,276  $1,344  
Depreciation$286  $333  $580  $700  
Three months ended June 30,Six months ended June 30,
2020201920202019
Holding Company and Eliminations (1)(In thousands)
Net interest income (3)$(759) $(1,063) $(1,664) $(2,168) 
Fees and other income1,773  2,620  3,701  5,484  
Total revenue1,014  1,557  2,037  3,316  
Operating expense3,888  3,445  6,759  7,114  
Income/(loss) before income taxes(2,874) (1,888) (4,722) (3,798) 
Income tax expense/(benefit) 1,198  (1,029) 1,157  (1,736) 
Net income/(loss) before attribution to noncontrolling interests(4,072) (859) (5,879) $(2,062) 
Noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company$(4,072) $(928) $(5,885) $(2,231) 
Assets (including eliminations)$(92,109) $(57,654) $(92,109) $(57,654) 
Depreciation$38  $49  $77  $96  
12
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
Three months ended June 30,Six months ended June 30,
2020201920202019
Total Company (1)(In thousands)
Net interest income$58,938  $57,460  $116,195  $115,798  
Fees and other income22,662  24,380  44,183  49,628  
Total revenue81,600  81,840  160,378  165,426  
Provision/(credit) for loan losses22,604  1,363  39,566  (63) 
Operating expense61,453  55,659  122,361  116,212  
Income/(loss) before income taxes(2,457) 24,818  (1,549) 49,277  
Income tax expense841  5,369  943  10,286  
Net income/(loss) before attribution to noncontrolling interests(3,298) 19,449  (2,492) 38,991  
Noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company$(3,298) $19,380  $(2,498) $38,822  
Assets$9,158,906  $8,712,873  $9,158,906  $8,712,873  
Amortization of intangibles$702  $672  $1,417  $1,344  
Depreciation$2,935  $2,755  $5,894  $5,839  
_____________________
(1)Due to rounding, the sum of individual segment results may not add up to the Total Company results.
(2)Operating expense related to the Private Banking and Wealth Management and Trust segments includes restructuring expense of $1.3 million and $0.4 million, respectively, for the six months ended June 30, 2019. There were no other restructuring expenses in other periods presented.
(3)Interest expense on junior subordinated debentures is included in Holding Company and Eliminations.
13
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
4. Investments
The following table presents a summary of investment securities at June 30, 2020 and December 31, 2019:
 Amortized
Cost		UnrealizedFair
Value
GainsLosses
(In thousands)
At June 30, 2020
Available-for-sale securities at fair value:
U.S. government and agencies$19,959  $1,162  $—  $21,121  
Government-sponsored entities153,225  5,718  —  158,943  
Municipal bonds315,056  18,899  —  333,955  
Mortgage-backed securities (1)471,610  17,515  (174) 488,951  
Total$959,850  $43,294  $(174) $1,002,970  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$42,495  $888  $(32) $43,351  
Total$42,495  $888  $(32) $43,351  
Equity securities at fair value:
Money market mutual funds (2)$24,492  $—  $—  $24,492  
Total$24,492  $—  $—  $24,492  
At December 31, 2019
Available-for-sale securities at fair value:
U.S. government and agencies$19,955  $42  $(57) $19,940  
Government-sponsored entities154,963  1,292  —  156,255  
Municipal bonds312,977  12,551  (73) 325,455  
Mortgage-backed securities (1)479,005  1,117  (3,488) 476,634  
Total$966,900  $15,002  $(3,618) $978,284  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$48,212  $53  $(316) $47,949  
Total$48,212  $53  $(316) $47,949  
Equity securities at fair value:
Money market mutual funds (2)$18,810  $—  $—  $18,810  
Total$18,810  $—  $—  $18,810  
_____________________
(1)All mortgage-backed securities are guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
(2)Money market mutual funds maintain a constant net asset value of $1.00 and therefore have no unrealized gain or loss.
The Company adopted ASU 2016-13 as of January 1, 2020. Under ASU 2016-13, the Company is required to assess the investment portfolio for credit impairment. The Company considers the held-to-maturity portfolio to meet the "zero loss" expectation requirements. All held-to-maturity securities owned by the Company are AAA rated mortgage-backed securities that are backed by the guarantees of U.S. government, U.S. government agencies or government-sponsored entities. The Company has experienced zero losses for these securities. In addition, as of June 30, 2020, no held-to-maturity securities were past due. Therefore, no credit allowance was recorded on the held-to-maturity investment portfolio. The Company evaluated the available-for-sale investment securities on a security by security basis and identified no security with impairment. Therefore, no credit allowance was booked on the available-for-sale investment portfolio. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements” for additional information on ASU 2016-13.
The following table presents the maturities of available-for-sale investment securities, based on contractual maturity, as of June 30, 2020. Certain securities are callable before their final maturity. Additionally, certain securities (such as mortgage-backed securities) are shown within the table below based on their final (contractual) maturity, but due to prepayments and amortization are expected to have shorter lives.
14
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
 Available-for-sale Securities
Amortized
Cost		Fair
Value
(In thousands)
Within one year$45,957  $46,277  
After one, but within five years301,995  314,345  
After five, but within ten years231,164  244,374  
Greater than ten years380,734  397,974  
Total$959,850  $1,002,970  
The following table presents the maturities of held-to-maturity investment securities, based on contractual maturity, as of June 30, 2020.
 Held-to-maturity Securities
Amortized
Cost		Fair
Value
(In thousands)
After five, but within ten years$34,732  $35,377  
Greater than ten years7,763  7,974  
Total$42,495  $43,351  
The following table presents the maturities of equity securities, based on contractual maturity, as of June 30, 2020.
 Equity Securities
Amortized
Cost		Fair
Value
(In thousands)
Within one year$24,492  $24,492  
Total$24,492  $24,492  
During the three and six months ended June 30, 2020 and 2019, there were no sales of available-for-sale, held-to- maturity, or equity securities.
The following tables present information regarding securities at June 30, 2020 and December 31, 2019 having temporary impairment, due to the fair values having declined below the amortized cost of the individual securities, and the time period that the investments have been temporarily impaired.
Less than 12 months12 months or longerTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		# of
Securities
(In thousands, except number of securities)
June 30, 2020
Available-for-sale securities
Mortgage-backed securities (1) $20,871  $(45) $10,622  $(129) $31,493  $(174) 28  
Total$20,871  $(45) $10,622  $(129) $31,493  $(174) 28  
Held-to-maturity securities
Mortgage-backed securities (1)$2,135  $(9) $2,024  $(23) $4,159  $(32) 2  
Total$2,135  $(9) $2,024  $(23) $4,159  $(32) 2  
15
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
Less than 12 months12 months or longerTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		# of
Securities
(In thousands, except number of securities)
December 31, 2019
Available-for-sale securities
U.S. government and agencies$9,899  $(57) $—  $—  $9,899  $(57) 1  
Government-sponsored entities1,725  —  —  —  1,725  —  1  
Municipal bonds9,149  (73) —  —  9,149  (73) 4  
Mortgage-backed securities (1)140,723  (1,016) 187,043  (2,472) 327,766  (3,488) 85  
Total$161,496  $(1,146) $187,043  $(2,472) $348,539  $(3,618) 91  
Held-to-maturity securities
Mortgage-backed securities (1)$10,328  $(11) $30,451  $(305) $40,779  $(316) 14  
Total$10,328  $(11) $30,451  $(305) $40,779  $(316) 14  
_____________________
(1)All mortgage-backed securities are guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
As of June 30, 2020, the mortgage-backed securities in the first table above had current Standard and Poor’s credit rating of at least AAA. As of June 30, 2020, the Company determined that the unrealized losses on investments, since their purchase, is primarily attributed to changes in interest rates and not as a result of the deterioration of credit quality. As of June 30, 2020, the Company had no intent to sell any securities in an unrealized loss position, and it is not more likely than not that the Company would be forced to sell any of these securities prior to the full recovery of all unrealized loss amounts.
Other investments
The Company invests in low-income housing tax credits, which are included in other assets, to encourage private capital investment in the construction and rehabilitation of low-income housing. The Company makes these investments as an indirect subsidy that allows investors, such as the Company, in a flow-through limited liability entity, such as limited partnerships or limited liability companies that manage or invest in qualified affordable housing projects, to receive the benefits of the tax credits allocated to the entity that owns the qualified affordable housing project. The Company also holds partnership interests in venture capital funds formed to provide financing to small businesses and to promote community development.
Other investments, which are included in other assets, can be temporarily impaired when the fair values decline below the amortized costs of the individual investments. There were no other investments with unrealized losses as of June 30, 2020 or December 31, 2019. The Company’s other investments primarily include low income housing partnerships which generate tax credits. The Company also holds partnership interests in small business investment companies formed to provide financing to small businesses and to promote community development. The Company had $74.8 million and $65.5 million in other investments included in Other assets as of June 30, 2020 and December 31, 2019, respectively.
5. Fair Value Measurements
Fair value is defined under GAAP as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value. Financial instruments are considered Level 1 when valuation can be based on quoted prices in active markets for identical assets or liabilities. Level 2 financial instruments are valued using quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or models using inputs that are observable or can be corroborated by observable market data of substantially the full term of the assets or liabilities. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable and when determination of the fair value requires significant management judgment or estimation.
16
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:
 As of June 30, 2020Fair value measurements at reporting date using:
Quoted prices in
active markets
for identical
assets (Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies$21,121  $—  $21,121  $—  
Government-sponsored entities158,943  —  158,943  —  
Municipal bonds333,955  —  333,955  —  
Mortgage-backed securities488,951  —  488,951  —  
Total available-for-sale securities1,002,970  —  1,002,970  —  
Equity securities24,492  24,492  —  —  
Derivatives - interest rate customer swaps96,968  —  96,968  —  
Derivatives - risk participation agreement21  —  21  —  
Trading securities held in the “rabbi trust” (1)6,328  6,328  —  —  
Liabilities:
Derivatives - interest rate customer swaps$97,760  $—  $97,760  $—  
Derivatives - interest rate swaps274  —  274  —  
Derivatives - risk participation agreement478  —  478  —  
Deferred compensation “rabbi trust” (1)6,320  6,320  —  —  
  Fair value measurements at reporting date using:
As of December 31, 2019Quoted prices in
active markets
for identical
assets (Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies$19,940  $—  $19,940  $—  
Government-sponsored entities156,255  —  156,255  —  
Municipal bonds325,455  —  325,455  —  
Mortgage-backed securities476,634  —  476,634  —  
Total available-for-sale securities978,284  —  978,284  —  
Equity securities18,810  18,810  —  —  
Derivatives - interest rate customer swaps36,089  —  36,089  —  
Derivatives - risk participation agreements10  —  10  —  
Trading securities held in the “rabbi trust” (1)6,119  6,119  —  —  
Liabilities:
Derivatives - interest rate customer swaps$36,580  $—  $36,580  $—  
Derivatives - risk participation agreements242  —  242  —  
Deferred compensation “rabbi trust” (1)6,112  6,112  —  —  
_____________________
(1) The Company has adopted a special trust for the Deferred Compensation Plan called a “rabbi trust”. The rabbi trust is an arrangement that is used to accumulate assets that may be used to fund the Company’s obligation to pay benefits under the Deferred Compensation Plan. To prevent immediate taxation to the executives who participate in the Deferred Compensation Plan, the amounts placed in the rabbi trust must remain subject to the claims of the Company’s creditors. The investments chosen by the participants in the Deferred Compensation Plan are mirrored by the rabbi trust as a way to minimize the earnings volatility of the Deferred Compensation Plan.
As of June 30, 2020 and December 31, 2019, available-for-sale securities consisted of U.S. government and agencies securities, government-sponsored entities securities, municipal bonds, and mortgage-backed securities. Available-for-sale Level 2 securities generally have quoted prices but are traded less frequently than exchange-traded securities and can be priced using
17
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
market data from similar assets and include government-sponsored entities securities, municipal bonds, mortgage-backed securities, “off-the-run” U.S. Treasury securities, and certain investments in Small Business Administration's (the "SBA") loans (which are categorized as U.S. government and agencies securities). “Off-the-run” U.S. Treasury securities are Treasury bonds and notes issued before the most recently issued bond or note of a particular maturity. When Treasuries move to the secondary over-the-counter market, they become less frequently traded, therefore, they are considered “off-the-run.” No investments held as of June 30, 2020 or December 31, 2019 were categorized as Level 3.
As of June 30, 2020 and December 31, 2019, equity securities consisted of Level 1 money market mutual funds that are valued with prices quoted in active markets.
In managing its interest rate and credit risk, the Company may utilize derivative instruments including interest rate customer swaps, interest rate swaps, and risk participation agreements. As a service to its customers, the Company may utilize derivative instruments including customer foreign exchange forward contracts to manage its foreign exchange risk, if any. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities, and therefore, they have been categorized as a Level 2 measurement as of June 30, 2020 and December 31, 2019. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 8: Derivatives and Hedging Activities” for further details.
To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of collateral securing the position.
The Company has determined that the majority of inputs used to value its derivatives are within Level 2. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy as of June 30, 2020 and December 31, 2019.
Trading securities held in the rabbi trust consist of publicly traded mutual fund investments that are valued at prices quoted in active markets. Therefore, they have been categorized as Level 1 as of June 30, 2020 and December 31, 2019.
The Company accounts for its investments held in the rabbi trust in accordance with ASC 320, Investments - Debt and Equity Securities. The investments held in the rabbi trust are classified as trading securities. The assets of the rabbi trust are carried at their fair value within other assets on the Consolidated Balance Sheets. Changes in the fair value of the securities are recorded as an increase or decrease in other income each quarter. The deferred compensation liability reflects the market value of the securities selected by the participants and is included within other liabilities on the Consolidated Balance Sheets. Changes in the fair value of the liability are recorded as an increase or decrease in salaries and employee benefits expense each quarter.
There were no transfers for assets or liabilities recorded at fair value on a recurring basis as of June 30, 2020 and December 31, 2019. There were no Level 3 assets valued on a recurring basis at June 30, 2020 or December 31, 2019. There were no changes in the valuation techniques used for measuring the fair value.
The following tables present the Company’s assets measured at fair value on a non-recurring basis during the periods ended June 30, 2020 and June 30, 2019, respectively, aggregated by the level in the fair value hierarchy within which those measurements fall.
 As of June 30, 2020Fair value measurements at reporting date using:Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Three months ended June 30, 2020Six months ended June 30, 2020
(In thousands)
Assets:
Impaired loans (1)$98  $—  $—  $98  $(1,219) $(1,198) 
_____________________
(1)Collateral-dependent impaired loans held as of June 30, 2020 that had write-downs or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2020.
18
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
 As of June 30, 2019Fair value measurements at reporting date using:Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Three months ended June 30, 2019Six months ended June 30, 2019
(In thousands)
Assets:
Impaired loans (1)$1,144  $—  $—  $1,144  $220  $592  
_____________________
(1)Collateral-dependent impaired loans held as of June 30, 2019 that had write-downs or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2019.
The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:
 As of June 30, 2020
Fair ValueValuation
Technique		Unobservable
Input		Range of
Inputs
Utilized 		Weighted
Average of
Inputs
Utilized
(In thousands)
Impaired Loans$98  Appraisals of CollateralDiscount for costs to sell
10% - 10%
10%
Appraisal adjustments—%—%
 As of June 30, 2019
Fair ValueValuation
Technique		Unobservable
Input		Range of
Inputs
Utilized 		Weighted
Average of
Inputs
Utilized
(In thousands)
Impaired Loans$1,144  Appraisals of CollateralDiscount for costs to sell
—% - 5%
4%
Appraisal adjustments—%—%
Impaired loans include those loans that were adjusted to the fair value of underlying collateral as required under ASC 310, Receivables. The amount does not include impaired loans that are measured based on expected future cash flows discounted at the respective loan’s original effective interest rate, as that amount is not considered a fair value measurement. The Company uses appraisals, which management may adjust to reflect estimated fair value declines, or may apply other discounts to appraised values for unobservable factors resulting from its knowledge of the property or consideration of broker quotes. The appraisers use a market, income, and/or a cost approach in determining the value of the collateral. Therefore, they have been categorized as a Level 3 measurement.
19
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following tables present the carrying values and fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis:
 As of June 30, 2020
Book ValueFair ValueQuoted prices 
in active
markets for
identical
assets 
(Level 1)		Significant 
other
observable
inputs
(Level 2)		Significant
unobservable
inputs 
(Level 3)
(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents$179,027  $179,027  $179,027  $—  $—  
Investment securities held-to-maturity42,495  43,351  —  43,351  —  
Loans held for sale9,786  9,958  —  9,958  —  
Loans, net7,243,630  7,082,051  —  —  7,082,051  
Other financial assets71,246  71,246  —  71,246  —  
FINANCIAL LIABILITIES:
Deposits7,427,397  7,429,520  —  7,429,520  —  
Securities sold under agreements to repurchase46,623  46,623  —  46,623  —  
Federal Home Loan Bank borrowings426,313  428,014  —  428,014  —  
Junior subordinated debentures106,363  69,863  —  —  69,863  
Other financial liabilities2,557  2,557  —  2,557  —  
 As of December 31, 2019
Book ValueFair ValueQuoted prices 
in active
markets for
identical
assets 
(Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs 
(Level 3)
(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents$292,479  $292,479  $292,479  $—  $—  
Investment securities held-to-maturity48,212  47,949  —  47,949  —  
Loans held for sale7,386  7,475  —  7,475  —  
Loans, net6,904,722  6,883,360  —  —  6,883,360  
Other financial assets67,348  67,348  —  67,348  —  
FINANCIAL LIABILITIES:
Deposits7,241,476  7,241,739  —  7,241,739  —  
Securities sold under agreements to repurchase53,398  53,398  —  53,398  —  
Federal Home Loan Bank borrowings350,829  351,233  —  351,233  —  
Junior subordinated debentures106,363  96,363  —  —  96,363  
Other financial liabilities1,957  1,957  —  1,957  —  
The estimated fair values have been determined by using available quoted market information or other appropriate valuation methodologies. The aggregate fair value amounts presented above do not represent the underlying value of the financial assets and liabilities of the Company taken as a whole as they do not reflect any premium or discount the Company might recognize if the assets were sold or the liabilities sold, settled, or redeemed. An excess of fair value over book value on financial assets represents a premium, or gain, the Company might recognize if the assets were sold, while an excess of book value over fair value on financial liabilities represents a premium, or gain, the Company might recognize if the liabilities were sold, settled, or redeemed prior to maturity. Conversely, losses would be recognized if assets were sold where the book value exceeded the fair value or liabilities were sold where the fair value exceeded the book value.
The fair value estimates provided are made at a specific point in time, based on relevant market information and the characteristics of the financial instrument. The estimates do not provide for any premiums or discounts that could result from concentrations of ownership of a financial instrument. Because no active market exists for some of the Company’s financial instruments, certain fair value estimates are based on subjective judgments regarding current economic conditions, risk characteristics of the financial instruments, future expected loss experience, prepayment assumptions, and other factors. The resulting estimates involve uncertainties and are considered best estimates. Changes made to any of the underlying assumptions could significantly affect the estimates.
20
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
Cash and cash equivalents
The carrying value reported in the balance sheet for cash and cash equivalents approximates fair value due to the short-term nature of their maturities and these assets are classified as Level 1 measurements.
Investment securities held-to-maturity
Investment securities held-to-maturity consist of mortgage-backed securities as of June 30, 2020 and December 31, 2019. The mortgage-backed securities are fixed income instruments that are not quoted on an exchange, but may be traded in active markets. The fair value of these securities is based on quoted market prices obtained from external pricing services. The principal market for our securities portfolio is the secondary institutional market, with an exit price that is predominantly reflective of bid level pricing in that market. Accordingly, held-to-maturity mortgage-backed securities are classified as Level 2.
There were no transfers of the Company's financial instruments that are not measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019.
Loans held for sale
Loans held for sale are recorded at the lower of cost or fair value in the aggregate. Fair value estimates are based on actual commitments to sell the loans to investors at an agreed upon price or current market prices if rates have changed since the time the loan closed. Accordingly, loans held for sale are included in the Level 2 fair value category.
Loans, net
Fair value estimates are based on loans with similar financial characteristics. The Company estimates the fair value of loans using the exit price notion under ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which includes identifying an exit price using current market information for origination rates and making certain adjustments to incorporate credit risk, transaction costs and other adjustments utilizing publicly available rates and indexes. Loans, net are included in the Level 3 fair value category based upon the inputs and valuation techniques used.
Other financial assets
Other financial assets consist of accrued interest and fees receivable, and stock in the Federal Home Loan Bank of Boston (“FHLB”) and the Federal Reserve Bank (“FRB”), for which the carrying amount approximates fair value, and these assets are classified as Level 2 measurements.
Deposits
The fair values reported for transaction accounts (demand, NOW, savings, and money market) equal their respective book values reported on the balance sheet and these liabilities are classified as Level 2 measurements. The fair values disclosed are, by definition, equal to the amount payable on demand at the reporting date. The fair values for certificates of deposit are based on the discounted value of contractual cash flows. The discount rates used are representative of approximate rates currently offered on certificates of deposit with similar remaining maturities and these liabilities are classified as Level 2 measurements.
Securities sold under agreements to repurchase
The fair values of securities sold under agreements to repurchase are estimated based on contractual cash flows discounted at the Bank’s incremental borrowing rate for FHLB borrowings with similar maturities and these liabilities have been classified as Level 2 measurements.
Federal funds purchased, if any
The carrying amounts of federal funds purchased, if any, approximate fair value due to their short-term nature and therefore these funds have been classified as Level 2 measurements.
Federal Home Loan Bank borrowings
The fair values reported for FHLB borrowings are estimated based on the discounted value of contractual cash flows. The discount rate used is based on the Bank’s estimated current incremental borrowing rate for FHLB borrowings of similar maturities and therefore these borrowings have been classified as Level 2 measurements.
Junior subordinated debentures
The fair values of the junior subordinated debentures issued by Boston Private Capital Trust I and Boston Private Capital Trust II are estimated using Level 3 inputs such as the interest rates on these securities, current rates for similar debt, and regulatory changes that would result in an unfavorable change in the regulatory capital treatment of this type of debt.
21
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
Other financial liabilities
Other financial liabilities consists of accrued interest payable for which the carrying amount approximates fair value and is classified as Level 2 measurements.
Financial instruments with off-balance sheet risk, if any
The Bank’s commitments to originate loans and for unused lines and outstanding letters of credit are primarily at market interest rates and therefore, the carrying amount approximates fair value.
6. Loan Portfolio and Credit Quality
The Bank’s lending activities are conducted principally in the regions of New England, Northern California, and Southern California. The Bank originates single and multi-family residential loans, commercial real estate loans, commercial and industrial loans, commercial tax-exempt loans, construction and land loans, and home equity and other consumer loans. Most loans are secured by borrowers’ personal or business assets. The ability of the Bank’s single family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic conditions within the Bank’s lending areas. Commercial, construction, and land borrowers’ ability to repay is generally dependent upon the health of the economy and real estate values, including the performance of the construction sector. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio is susceptible to changing conditions in the New England, Northern California, and Southern California economies and real estate markets.
Beginning in the first quarter of 2020, the Company made a change to the loan portfolio segmentation in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given their different underlying risk characteristics. Beginning in the second quarter of 2020, the Company also added a segment for loans originated under the SBA's Paycheck Protection Program (the "PPP"). For the period ended December 31, 2019, there were no PPP loans as the SBA initiated the program in the first quarter of 2020 in response to the COVID-19 pandemic.
The following table presents a summary of the loan portfolio based on the portfolio segment as of the dates indicated:
 June 30, 2020December 31, 2019
 (In thousands)
Commercial and industrial$565,748  $694,034  
Paycheck Protection Program370,034  —  
Commercial tax-exempt419,264  447,927  
Commercial real estate2,676,708  2,551,274  
Construction and land240,211  225,983  
Residential2,859,627  2,839,155  
Home equity84,588  83,657  
Consumer and other116,774  134,674  
Total$7,332,954  $6,976,704  
The following table presents nonaccrual loans receivable by class of receivable as of the dates indicated:
June 30, 2020December 31, 2019
(In thousands)
Commercial and industrial$3,649  $582  
Commercial real estate5,285  —  
Residential16,394  13,993  
Home equity195  1,525  
Consumer and other81  3  
Total$25,604  $16,103  
The Bank’s policy is to discontinue the accrual of interest on a loan when the collectability of principal or interest is in doubt. In certain instances, although infrequent, loans that have become 90 days or more past due may remain on accrual status if the value of the collateral securing the loan is sufficient to cover principal and interest and the loan is in the process of collection. There was one commercial real estate loan with a balance less than $0.1 million 90 days or more past due, but still accruing, as of June 30, 2020 and no loans 90 days or more past due, but still accruing, as of December 31, 2019. The Bank’s policy for returning a loan to accrual status requires the loan to be brought current and for the client to show a history of making timely payments (generally six consecutive months). For troubled debt restructured loans (“TDRs”), a return to accrual status generally requires timely payments for a period of six months in accordance with the restructured loan terms, along with meeting other criteria.
22
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following tables show the payment status of loans receivable by class of receivable as of the dates indicated:
June 30, 2020
Accruing Past DueNonaccrual Loans
30-59 Days Past Due 60-89 Days Past DueTotal Accruing Past DueCurrent30-89 Days Past Due90 Days or
Greater
Past Due		Total Non-Accrual LoansCurrent Accruing LoansTotal
Loans
Receivable
(In thousands)
Commercial and industrial$3,058  $43  $3,101  $636  $—  $3,013  $3,649  $558,998  $565,748  
Paycheck Protection Program—  —  —  —  —  —  —  370,034  370,034  
Commercial tax-exempt—  —  —  —  —  —  —  419,264  419,264  
Commercial real estate (1)—  925  975  5,285  —  —  5,285  2,670,448  2,676,708  
Construction and land—  —  —  —  —  —  —  240,211  240,211  
Residential—  747  747  7,473  1,586  7,335  16,394  2,842,486  2,859,627  
Home equity489  251  740  8  139  48  195  83,653  84,588  
Consumer and other7  15  22  1  —  80  81  116,671  116,774  
Total$3,554  $1,981  $5,585  $13,403  $1,725  $10,476  $25,604  $7,301,765  $7,332,954  
______________________
(1) There was one commercial real estate loan with a balance less than $0.1 million that was 90+ days past due and accruing at June 30, 2020. Total accruing past due amount will not sum across for this reason.
December 31, 2019
Accruing Past DueNonaccrual Loans
30-59 Days Past Due60-89 Days Past DueTotal Accruing Past DueCurrent30-89 Days Past Due90 Days or Greater Past DueTotal Non-Accrual LoansCurrent Accruing LoansTotal Loans Receivable
(In thousands)
Commercial and industrial$828  $—  $828  $—  $241  $341  $582  $692,624  $694,034  
Commercial tax-exempt—  —  —  —  —  —  —  447,927  447,927  
Commercial real estate1,420  —  1,420  —  —  —  —  2,549,854  2,551,274  
Construction and land—  —  —  —  —  —  —  225,983  225,983  
Residential19,133  1,038  20,171  9,593  759  3,641  13,993  2,804,991  2,839,155  
Home equity369  —  369  220  148  1,157  1,525  81,763  83,657  
Consumer and other1,008  2,149  3,157  1  —  2  3  131,514  134,674  
Total$22,758  $3,187  $25,945  $9,814  $1,148  $5,141  $16,103  $6,934,656  $6,976,704  
Nonaccrual and delinquent loans are affected by many factors, such as economic and business conditions, interest rates, unemployment levels, and real estate collateral values, among others. In periods of prolonged economic decline, borrowers may become more severely affected over time as liquidity levels decline and the borrower’s ability to continue to make payments deteriorates.
With respect to real estate collateral values, the declines from the peak, as well as the value of the real estate at the time of origination versus the current value, can impact the level of problem loans. For instance, if the loan to value ratio at the time of renewal has increased due to the decline in the real estate value since origination, the loan may no longer meet the Bank’s underwriting standards and may be considered for classification as a problem loan dependent upon a review of risk factors. There could be an increase in these situations as the economic conditions brought on by the COVID-19 pandemic could lead to a decline in collateral values.
Generally when a collateral dependent loan becomes impaired, an updated appraisal of the collateral, if appropriate, is obtained. If the impaired loan has not been upgraded to a performing status within a reasonable amount of time, the Bank will continue to obtain updated appraisals as deemed necessary, especially during periods of declining property values. The COVID-19 pandemic has limited the Bank’s ability to obtain updated appraisals. In lieu of appraisals, the Bank may use other valuation techniques in the short-term. The Bank did not use any alternative valuation techniques in the second quarter of 2020.
The past due status of a loan is determined in accordance with its contractual repayment terms. All loan types are reported past due when one scheduled payment is due and unpaid for 30 days or more.
23
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
Credit quality indicators
The Bank uses a risk rating system to monitor the credit quality of its loan portfolio. Loan classifications are assessments made by the Bank of the status of the loans based on the facts and circumstances known to the Bank, including management’s judgment, at the time of assessment. Some or all of these classifications may change in the future if there are unexpected changes in the financial condition of the borrower, including but not limited to, changes resulting from continuing deterioration in employment levels, general business and economic conditions on a national basis or in the local markets in which the Bank operates adversely affecting, among other things, real estate values. Such conditions, as well as other factors which adversely affect borrowers’ ability to service or repay loans, typically result in changes in loan default and charge-off rates, and increased provisions for loan losses, which would adversely affect the Company’s financial performance and financial condition. These circumstances are not entirely foreseeable and, as a result, it may not be possible to accurately reflect them in the Company’s analysis of credit risk. Generally, only commercial loans, including commercial real estate, other commercial and industrial loans, commercial tax-exempt loans, and construction and land loans, are given a numerical grade.
A summary of the rating system used by the Bank is included here from Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, follows:
Pass - All loans graded as pass are considered acceptable credit quality by the Bank and are grouped for purposes of calculating the allowance for loan losses. For residential, home equity and consumer loans, the Bank classifies loans as pass unless there is known information such as delinquency or client requests for modifications which, due to financial difficulty, would then generally result in a risk rating such as special mention or more severe depending on the factors.
Special mention - Loans rated in this category are defined as having potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the Bank’s credit position. These loans are currently protected but have the potential to deteriorate to a substandard rating. For commercial loans, the borrower’s financial performance may be inconsistent or below forecast, creating the possibility of liquidity problems and shrinking debt service coverage. In loans having this rating, the primary source of repayment is still good, but there is increasing reliance on collateral or guarantor support. Collectability of the loan is not yet in jeopardy. In particular, loans in this category are considered more variable than other categories, since they will typically migrate through categories more quickly.
Substandard - Loans rated in this category are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. A substandard credit has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans may be either still accruing or nonaccruing depending upon the severity of the risk and other factors such as the value of the collateral, if any, and past due status.
Doubtful - Loans rated in this category indicate that collection or liquidation in full on the basis of currently existing facts, conditions, and values, is highly questionable and improbable. Loans in this category are usually on nonaccrual and classified as impaired.
These above credit quality indicators are assigned upon origination with commercial loans reassessed on an annual basis while noncommercial loans are reassessed when the loan becomes past due greater than 90 days or when ad-hoc information becomes available to the loan officer. Further the commercial loan portfolio is subject for selection of an independent review, also on an annual basis. In addition, those loans not considered to be "Pass" rated, are subject to a Loan Committee review on a quarterly basis. Lastly, on an ad-hoc basis as new information becomes available to the loan officer on the credit quality of the borrower, the credit quality indicators are reassessed.
24
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following tables present the loan portfolio’s credit risk profile by internally assigned grade and class of receivable as of the dates indicated:
June 30, 2020
By Loan Grade or Nonaccrual Status
PassSpecial
Mention 		Accruing
Classified (1)		Nonaccrual
Loans		Total
(In thousands)
Commercial and industrial$513,576  $8,628  $39,895  $3,649  $565,748  
Paycheck Protection Program370,034  —  —  —  370,034  
Commercial tax-exempt408,326  2,460  8,478  —  419,264  
Commercial real estate2,460,827  175,661  34,935  5,285  2,676,708  
Construction and land235,378  4,833  —  —  240,211  
Residential2,839,005  —  4,228  16,394  2,859,627  
Home equity83,343  —  1,050  195  84,588  
Consumer and other116,393  300  —  81  116,774  
Total$7,026,882  $191,882  $88,586  $25,604  $7,332,954  
December 31, 2019
By Loan Grade or Nonaccrual Status
PassSpecial
Mention 		Accruing
Classified (1)		Nonaccrual
Loans		Total
(In thousands)
Commercial and industrial$656,364  $12,101  $24,987  $582  $694,034  
Commercial tax-exempt436,721  7,154  4,052  —  447,927  
Commercial real estate2,495,702  32,014  23,558  —  2,551,274  
Construction and land225,526  457  —  —  225,983  
Residential2,820,909  —  4,253  13,993  2,839,155  
Home equity81,060  —  1,072  1,525  83,657  
Consumer and other134,371  300  —  3  134,674  
Total$6,850,653  $52,026  $57,922  $16,103  $6,976,704  
______________________
(1) Accruing Classified may include both Substandard and Doubtful classifications.
The following table presents the loan portfolio’s credit risk profile by loan origination year and class of receivable as of the dates indicated:
25
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
June 30, 2020
Loan Origination Year By Loan Grade or Nonaccrual Status
20202019201820172016PriorRevolvingTotal
(In thousands)
Commercial and industrial
Pass$24,040  $92,841  $72,857  $16,771  $25,701  $57,514  $223,852  $513,576  
Special Mention—  676  963  1,439  —  2,837  2,713  8,628  
Accruing Classified (1)200  4,423  7,455  14,726  1,358  442  11,291  39,895  
Nonaccrual49  161  —  197  —  14  3,228  3,649  
Total$24,289  $98,101  $81,275  $33,133  $27,059  $60,807  $241,084  $565,748  
Paycheck Protection Program
Pass$370,034  $—  $—  $—  $—  $—  $—  $370,034  
Total$370,034  $—  $—  $—  $—  $—  $—  $370,034  
Commercial tax-exempt
Pass$12,665  $15,912  $40,819  $24,606  $107,595  $206,729  $—  $408,326  
Special Mention—  —  —  —  —  2,460  —  2,460  
Accruing Classified (1)—  —  —  3,975  —  4,503  —  8,478  
Total$12,665  $15,912  $40,819  $28,581  $107,595  $213,692  $—  $419,264  
Commercial real estate
Pass$187,358  $481,495  $260,482  $338,837  $393,779  $725,465  $73,411  $2,460,827  
Special Mention20,640  34,666  27,114  790  37,704  54,747  —  175,661  
Accruing Classified (1)1,252  11,536  —  1,179  8,878  12,090  —  34,935  
Nonaccrual—  5,285  —  —  —  —  —  5,285  
Total$209,250  $532,982  $287,596  $340,806  $440,361  $792,302  $73,411  $2,676,708  
Construction and land
Pass$5,937  $61,095  $77,695  $47,276  $16,928  $26,447  $—  $235,378  
Special Mention—  —  4,833  —  —  —  —  4,833  
Total$5,937  $61,095  $82,528  $47,276  $16,928  $26,447  $—  $240,211  
Residential
Pass$332,172  $583,429  $448,630  $459,227  $438,329  $577,218  $—  $2,839,005  
Accruing Classified (1)—  —  —  —  —  4,228  —  4,228  
Nonaccrual—  262  1,084  2,529  —  12,519  —  16,394  
Total$332,172  $583,691  $449,714  $461,756  $438,329  $593,965  $—  $2,859,627  
Home equity
Pass$—  $—  $454  $248  $686  $12,998  $68,957  $83,343  
Accruing Classified (1)—  —  —  —  —  1,050  —  1,050  
Nonaccrual—  —  —  —  —  56  139  195  
Total$—  $—  $454  $248  $686  $14,104  $69,096  $84,588  
Consumer and other
Pass$1,388  $318  $38  $—  $88  $806  $113,755  $116,393  
Special Mention—  —  —  —  —  —  300  300  
Nonaccrual—  —  73  —  —  —  8  81  
Total$1,388  $318  $111  $—  $88  $806  $114,063  $116,774  
Total
Pass$933,594  $1,235,090  $900,975  $886,965  $983,106  $1,607,177  $479,975  $7,026,882  
Special Mention20,640  35,342  32,910  2,229  37,704  60,044  3,013  191,882  
Accruing Classified (1)1,452  15,959  7,455  19,880  10,236  22,313  11,291  88,586  
Nonaccrual49  5,708  1,157  2,726  —  12,589  3,375  25,604  
Total$955,735  $1,292,099  $942,497  $911,800  $1,031,046  $1,702,123  $497,654  $7,332,954  
______________________
(1) Accruing Classified may include both Substandard and Doubtful classifications.
26
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following tables present, by class of receivable, the balance of impaired loans with and without a related allowance, the associated allowance for those impaired loans with a related allowance, and the total unpaid principal on impaired loans:
As of and for the three and six months ended June 30, 2020
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceQTD Average Recorded InvestmentYTD Average Recorded InvestmentQTD Interest Income Recognized while ImpairedYTD Interest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$3,434  $3,456  n/a$1,323  $1,058  $—  $6  
Paycheck Protection Program—  —  n/a—  —  —  —  
Commercial tax-exempt—  —  n/a—  —  —  —  
Commercial real estate6,007  6,122  n/a6,064  3,964  8  17  
Construction and land—  —  n/a—  —  —  —  
Residential16,309  16,569  n/a16,331  15,903  143  260  
Home equity391  391  n/a1,258  1,383  7  10  
Consumer and other—  —  n/a—  —  —  —  
Subtotal$26,141  $26,538  n/a24,976  $22,308  158  $293  
With an allowance recorded:
Commercial and industrial $259  $268  $(161) 265  $273  1  $1  
Paycheck Protection Program—  —  —  —  —  —  —  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  
Residential528  528  (60) 530  532  2  6  
Home equity263  263  (18) 267  269  2  4  
Consumer and other—  —  —  —  —  —  —  
Subtotal$1,050  $1,059  $(239) $1,062  $1,074  $5  $11  
Total:
Commercial and industrial$3,693  $3,724  $(161) $1,588  $1,331  $1  $7  
Paycheck Protection Program—  —  —  —  —  —  —  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate6,007  6,122  —  6,064  3,964  8  17  
Construction and land—  —  —  —  —  —  —  
Residential16,837  17,097  (60) 16,861  16,435  145  266  
Home equity654  654  (18) 1,525  1,652  9  14  
Consumer and other—  —  —  —  —  —  —  
Total$27,191  $27,597  $(239) $26,038  $23,382  $163  $304  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
27
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
As of and for the three and six months ended June 30, 2019
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceQTD Average Recorded InvestmentYTD Average Recorded InvestmentQTD Interest Income Recognized while ImpairedYTD Interest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$1,669  $2,616  n/a$1,520  $1,328  $10  $25  
Commercial tax-exempt—  —  n/a—  —  —  —  
Commercial real estate—  —  n/a—  78  —  256  
Construction and land—  —  n/a—  —  —  —  
Residential15,127  15,387  n/a14,079  12,605  103  240  
Home equity2,497  3,059  n/a2,359  2,018  1  1  
Consumer and other—  —  n/a—  —  —  —  
Subtotal$19,293  $21,062  n/a$17,958  $16,029  $114  $522  
With an allowance recorded:
Commercial and industrial$441  $441  $93  $596  $1,036  $4  $20  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  
Residential778  778  74  733  752  6  13  
Home equity274  274  24  69  776  1  1  
Consumer and other—  —  —  —  —  —  —  
Subtotal$1,493  $1,493  $191  $1,398  $2,564  $11  $34  
Total:
Commercial and industrial$2,110  $3,057  $93  $2,116  $2,364  $14  $45  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  78  —  256  
Construction and land—  —  —  —  —  —  —  
Residential15,905  16,165  74  14,812  13,357  109  253  
Home equity2,771  3,333  24  2,428  2,794  2  2  
Consumer and other—  —  —  —  —  —  —  
Total$20,786  $22,555  $191  $19,356  $18,593  $125  $556  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, if applicable, which was applied to principal.

28
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
As of and for the year ended December 31, 2019
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceAverage Recorded InvestmentInterest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$470  $553  n/a$1,062  $268  
Commercial tax-exempt—  —  n/a—  —  
Commercial real estate733  733  n/a155  262  
Construction and land—  —  n/a—  —  
Residential15,362  15,622  n/a13,700  636  
Home equity1,557  2,119  n/a2,095  35  
Consumer and other—  —  n/a—  —  
Subtotal$18,122  $19,027  n/a$17,012  $1,201  
With an allowance recorded:
Commercial and industrial$254  $254  $146  $736  $33  
Commercial tax-exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential538  538  67  1,130  23  
Home equity273  273  22  545  4  
Consumer and other—  —  —  —  —  
Subtotal$1,065  $1,065  $235  $2,411  $60  
Total:
Commercial and industrial$724  $807  $146  $1,798  $301  
Commercial tax-exempt—  —  —  —  —  
Commercial real estate733  733  —  155  262  
Construction and land—  —  —  —  —  
Residential15,900  16,160  67  14,830  659  
Home equity1,830  2,392  22  2,640  39  
Consumer and other—  —  —  —  —  
Total$19,187  $20,092  $235  $19,423  $1,261  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
When management determines that it is probable that the Bank will not collect all principal and interest on a loan in accordance with the original loan terms, the loan is designated as impaired.
On March 22, 2020, regulators issued an interagency statement encouraging financial institutions to work with borrowers affected by the COVID-19 pandemic. The interagency statement also provided additional information regarding loan modifications. The regulators indicated they will not criticize institutions for working with borrowers in a safe and sound manner and have indicated that related modifications will not automatically result in a TDR. The regulators also provided supervisory views that loans modified under this program would not be considered past due or nonaccrual.
The regulators view prudent loan modification programs offered to financial institution customers affected by the COVID-19 pandemic as positive and proactive actions that can manage adverse impacts on borrowers, and lead to improved loan performance and reduced credit risk. The statement indicated that short-term modifications made on a good faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief are not TDRs.
As of June 30, 2020, 336 residential and home equity loans with a current outstanding principal balance of $214.5 million were processed under this deferment program.
Loans that are designated as impaired require an analysis to determine the amount of impairment, if any. Impairment would be indicated as a result of the carrying value of the loan exceeding either the estimated collateral value, less costs to sell, for collateral dependent loans or the net present value of the projected cash flow, discounted at the loan’s contractual effective interest rate, for loans not considered to be collateral dependent. Generally, shortfalls in the analysis on collateral dependent loans would result in the impairment amount being charged-off to the allowance for loan losses. Shortfalls on cash flow
29
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
dependent loans may be carried as specific allocations to the general reserve unless a known loss is determined to have occurred, in which case, such known loss is charged-off.
Loans in the held for sale category are carried at the lower of amortized cost or estimated fair value in the aggregate and are excluded from the allowance for loan losses analysis.
As of June 30, 2020, the Bank has pledged $2.3 billion of loans in a blanket lien agreement with the FHLB. The Bank also has $358.2 million of loans pledged as collateral at the FRB for access to their discount window. As of December 31, 2019, the Bank had pledged $2.5 billion of loans to the FHLB and $395.3 million of loans at the FRB.
The Bank may, under certain circumstances, restructure loans as a concession to borrowers who are experiencing financial difficulty. These loans are outside of the guidelines to not be considered a TDR by recent regulatory guidance. Such loans are classified as TDRs and are included in impaired loans. TDRs typically result from the Bank’s loss mitigation activities which, among other things, could include rate reductions, payment extensions, and/or principal forgiveness. As of June 30, 2020 and December 31, 2019, TDRs totaled $14.8 million and $12.6 million, respectively. As of June 30, 2020, $8.9 million of the $14.8 million in TDRs were on accrual status. As of December 31, 2019, $7.1 million of the $12.6 million in TDRs were on accrual status.
Since all TDR loans are considered impaired loans, they are individually evaluated for impairment. The resulting impairment, if any, would have an impact on the allowance for loan losses as a specific reserve or charge-off. If, prior to the classification as a TDR, the loan was not impaired, there would have been a general reserve on the particular loan. Prior to the adoption of ASU 2016-13 on January 1, 2020, a general or allocated reserve would have been applied. Many loans initially categorized as TDRs are already on nonaccrual status and are already considered impaired. Therefore, there is generally not a material change to the allowance for loan losses when a nonaccruing loan is categorized as a TDR.
The following tables present the balance of TDRs that were restructured or defaulted during the periods indicated:
As of and for the three months ended June 30, 2020
Restructured Current QuarterTDRs that defaulted in the Current Quarter that were restructured in prior twelve months
# of LoansPre- modification recorded investmentPost- modification recorded investment# of LoansPost- modification recorded investment
(In thousands, except number of loans)
Commercial and industrial—  $—  $—  —  $—  
Paycheck Protection Program—  —  —  —  —  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential—  —  —  1  1,562  
Home equity—  —  —  —  —  
Consumer and other—  —  —  —  —  
Total—  $—  $—  1  $1,562  
30
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
As of and for the six months ended June 30, 2020
Restructured Year to DateTDRs that defaulted in the Year to Date that were restructured
in prior twelve months
# of
Loans		Pre-
modification
recorded
investment		Post-
modification
recorded
investment		# of
Loans		Post-
modification
recorded
investment
(In thousands, except number of loans)
Commercial and industrial (1)1  $50  $50  —  $—  
Paycheck Protection Program—  —  —  —  —  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land —  —  —  —  —  
Residential (2)1  2,373  2,373  1  1,562  
Home equity—  —  —  —  —  
Consumer and other—  —  —  —  —  
Total2  $2,423  $2,423  1  $1,562  
_____________________
(1)Represents the following type of concession: extension of maturity and reduction in interest rate.
(2)Represents the following type of concession: payment deferral.     
31
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
As of and for the three months ended June 30, 2019
Restructured Current QuarterTDRs that defaulted in the Current Quarter that were restructured in prior twelve months
# of LoansPre- modification recorded investmentPost- modification recorded investment# of LoansPost- modification recorded investment
(In thousands, except number of loans)
Commercial and industrial—  $—  $—  —  $—  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential (1)1  222  222  —  —  
Home equity (1)1  274  274  —  —  
Consumer and other—  —  —  —  —  
Total2  $496  $496  —  $—  
_____________________
(1)Represents the following type of concession: temporary reduction of interest rate.
As of and for the six months ended June 30, 2019
Restructured Year to DateTDRs that defaulted in the Year to Date that were restructured
in prior twelve months
# of
Loans		Pre-
modification
recorded
investment		Post-
modification
recorded
investment		# of
Loans		Post-
modification
recorded
investment
(In thousands, except number of loans)
Commercial and industrial1  $179  $179  —  $—  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land —  —  —  —  —  
Residential2  3,222  3,222  —  —  
Home equity1  274  274  —  —  
Consumer and other—  —  —  —  —  
Total4  $3,675  $3,675  —  $—  
As of and for the six months ended June 30, 2019
Extension of termTemporary rate reductionPayment deferralCombination of concessionsTotal concessions
# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment
(In thousands, except number of loans)
Commercial and industrial 1  $179  —  $—  —  $—  —  $—  1  $179  
Commercial tax exempt—  —  —  —  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  —  —  —  
Residential—  —  2  3,222  —  —  —  —  2  3,222  
Home equity—  —  1  274  —  —  —  —  1  274  
Consumer and other—  —  —  —  —  —  —  —  —  —  
1  $179  3  $3,496  —  $—  —  $—  4  $3,675  
In response to the COVID-19 pandemic, the Bank initiated a mortgage deferment program under which principal and interest payments on qualifying loans are generally deferred for initially three months and the loan term is extended three months; if requested, the loan can be deferred for an additional three months. Loans that are deferred under the program are not considered TDRs or past due based on current regulatory guidance. As of June 30, 2020, 336 residential and home equity loans totaling $214.5 million were processed under this deferment program.
32
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
Loan participations serviced for others and loans serviced for others are not included in the Company’s total loans.
The following table presents a summary of the loan participations serviced for others and loans serviced for others based on class of receivable as of the dates indicated:
 June 30, 2020December 31, 2019
 (In thousands)
Commercial and industrial$15,122  $14,533  
Commercial tax-exempt17,829  18,101  
Commercial real estate124,312  121,929  
Construction and land72,474  75,451  
Total loan participations serviced for others $229,737  $230,014  
Residential$130,114  $204,696  
Total loans serviced for others$130,114  $204,696  
Total loans include deferred loan origination (fees)/costs, net, of $(1.6) million and $8.1 million as of June 30, 2020 and December 31, 2019, respectively. The change in the balance of loan origination (fees)/costs, net, between December 31, 2019 and June 30, 2020 was primarily driven by PPP loan origination fees in the second quarter of 2020.
7. Allowance for Loan Losses
The allowance for loan losses is established based upon the Company's current estimate of expected lifetime credit losses on loans measured at amortized cost. Loan losses are charged against the allowance when management's assessments confirm that the Company will not collect the full amortized cost basis of a loan. Subsequent recoveries, if any, are credited to the allowance when collected.
Under the CECL methodology, which the Company adopted on January 1, 2020, the Company estimates credit losses on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The quantitative model utilizes a factor-based approach to estimate expected credit losses using probability of default and loss given default, which are derived from a selected peer group's historical default and loss experience. The model estimates expected credit losses using loan level data over the contractual life of the exposure, considering the effect of estimated prepayments and curtailments. Reasonable and supportable economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period, beyond which is a reversion to the Company's historical long-run average. Management has determined a reasonable and supportable period of two years and a straight line reversion period of twelve months to be appropriate for purposes of estimating expected credit losses. Management also applies a weight to the various forecasts chosen to determine the reasonable and supportable economic forecasts. The Company's qualitative assessment is based on factors outlined in regulatory guidance and include the following:
• Volume and trend of past-due, non-accrual, and adversely-graded loans
• Trends in volume and terms of loans
• Concentration risk
• Experience and depth of management
• Risk surrounding lending policy and underwriting standards
• Risk surrounding loan review
• Banking industry conditions, other external factors, and inherent model risk
Loans that no longer share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting. For the loans that will be individually assessed, the Company will use either a discounted cash flow approach or a fair value of collateral approach. The latter approach will be used for loans deemed to be collateral dependent or when foreclosure is probable.
Accrued interest receivable amounts are excluded from balances of loans held at amortized cost and are included within Accrued interest receivable on the consolidated balance sheet. Management has elected not to measure an allowance for credit losses on these amounts as the Company employs a timely write-off policy as generally any loan over 89 days past-due is put on non-accrual status and any associated accrued interest is reversed.
For periods disclosed prior to the adoption of ASU 2016-13 as of January 1, 2020, the Allowance for loan losses was determined under the incurred loss model. Refer to "Note 1: Basis of Presentation and Summary of Significant Account Policies" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the methodology.
33
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The allowance for loan losses, which is reported as a reduction of outstanding loan balances, totaled $89.3 million and $72.0 million as of June 30, 2020 and December 31, 2019, respectively.
Beginning in the first quarter of 2020, the Company made a change to the loan portfolio segmentation as it relates to the allowance for loan losses in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given their different underlying risk characteristics. For the periods ended June 30, 2019, the Provision/(credit) for loan losses and related allowance balance in the allowance for loan losses for tax-exempt commercial and industrial loans is included with Commercial and industrial loans. Beginning in the second quarter of 2020, the Company made a change to the loan portfolio segmentation as it relates to the allowance for loan losses, adding the segment Paycheck Protection Program. For the periods ended June 30, 2019, there were no loans in this segment as the SBA initiated the program in the first quarter of 2020 in response to the COVID-19 pandemic. The following tables present a summary of the changes in the allowance for loan losses for the periods indicated:
As of and for the three months ended June 30,As of and for the six months ended June 30,
2020201920202019
(In thousands)
Allowance for loan losses, beginning of period:
Commercial and industrial$10,255  $15,687  $10,048  $15,912  
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt1,927  n/a6,016  n/a
Commercial real estate36,580  41,813  40,765  41,934  
Construction and land5,709  5,353  5,119  6,022  
Residential11,779  10,057  8,857  10,026  
Home equity303  796  778  1,284  
Consumer and other1,658  108  399  134  
Total allowance for loan losses, beginning of period$68,211  $73,814  $71,982  $75,312  
Impact of adopting ASU 2016-13:
Commercial and industrial$—  n/a$(565) n/a
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a(4,409) n/a
Commercial real estate—  n/a(14,455) n/a
Construction and land—  n/a(2,158) n/a
Residential—  n/a685  n/a
Home equity—  n/a(535) n/a
Consumer and other—  n/a1,052  n/a
Total impact of adopting ASU 2016-13$—  n/a$(20,385) n/a
Provision/(credit) for loan losses:
Commercial and industrial$(359) $550  $886  $137  
Paycheck Protection Program190  n/a190  n/a
Commercial tax-exempt559  n/a879  n/a
Commercial real estate11,095  1,898  21,365  1,588  
Construction and land3,815  (573) 6,563  (1,242) 
Residential5,986  (502) 8,223  (571) 
Home equity1,293  9  1,221  83  
Consumer and other25  (19) 239  (58) 
Total provision/(credit) for loan losses$22,604  $1,363  $39,566  $(63) 
34
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
As of and for the three months ended June 30,As of and for the six months ended June 30,
2020201920202019
(In thousands)
Loans charged off:
Commercial and industrial$(389) $(195) $(907) $(195) 
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a—  n/a
Commercial real estate—  —  —  —  
Construction and land—  —  —  —  
Residential—  —  —  —  
Home equity(1,157) —  (1,157) (562) 
Consumer and other—  —  (10) (2) 
Total charge offs$(1,546) $(195) $(2,074) $(759) 
Recoveries on loans previously charged off:
Commercial and industrial$52  $40  $97  $228  
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a—  n/a
Commercial real estate—  30  —  219  
Construction and land—  —  —  —  
Residential—  —  —  100  
Home equity—  —  132  —  
Consumer and other3  15  6  30  
Total recoveries$55  $85  $235  $577  
Allowance for loan losses, end of period:
Commercial and industrial$9,559  $16,082  $9,559  $16,082  
Paycheck Protection Program190  n/a190  n/a
Commercial tax-exempt2,486  n/a2,486  n/a
Commercial real estate47,675  43,741  47,675  43,741  
Construction and land9,524  4,780  9,524  4,780  
Residential17,765  9,555  17,765  9,555  
Home equity439  805  439  805  
Consumer and other1,686  104  1,686  104  
Total allowance for loan losses, end of period$89,324  $75,067  $89,324  $75,067  
The balance of the allowance for loan losses of $89.3 million as of June 30, 2020 represents an increase of $17.3 million from December 31, 2019. During the three and six months ended June 30, 2020, the Company recognized a Provision for loan loss expense of $22.6 million and $39.6 million, respectively. The increase in the allowance for loan losses in the first two quarters of 2020 was primarily driven by changes in economic forecasts in both the first quarter and second quarter of 2020 to reflect deteriorating economic conditions related to the COVID-19 pandemic and a change in the weight of forecast scenarios used to be weighted more heavily to the downside scenario, combined with an increase in qualitative factors to account for incremental risk not included in the quantitative model.
The balance of reserve for unfunded loan commitments of $7.1 million as of June 30, 2020 represents an increase of $6.0 million from December 31, 2019. The increase was driven by deteriorating economic conditions related to the COVID-19 pandemic increasing the reserve factor as well as an increase in commitments. This amount is recognized as Other expense within Noninterest expense.
Upon the adoption of ASU 2016-13 on January 1, 2020, the Company recognized a decrease in the allowance for loan losses of $20.4 million. The adoption amount was driven primarily by the portfolio composition, the short-term nature of many commercial loans, estimated prepayments and curtailments, a change to the loan portfolio segmentation in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given the different underlying risk characteristics, and reasonable and supportable economic forecasts at the time of adoption.
Upon the adoption of ASU 2016-13 on January 1, 2020, the Company recognized an increase in the reserve of $1.4 million in the unfunded loan commitments expense. The net, after-tax impact of the $20.4 million decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million.
The allowance for loan losses is an estimate of the inherent risk of loss in the loan portfolio as of the consolidated balance sheet dates. Management estimates the level of the allowance based on all relevant information available. Changes to the required level in the allowance result in either a provision for loan loss expense, if an increase is required, or a credit to the
35
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
provision, if a decrease is required. Loan losses are charged to the allowance when available information confirms that specific loans, or portions thereof, are uncollectible. Recoveries on loans previously charged off are credited to the allowance when received in cash or when the Bank takes possession of other assets.
The following tables present the Company’s allowance for loan losses and loan portfolio as of June 30, 2020 and December 31, 2019 by portfolio segment, disaggregated by method of impairment analysis. The Company had no loans acquired with deteriorated credit quality as of June 30, 2020 or December 31, 2019.
June 30, 2020
Individually Evaluated
for Impairment		Collectively Evaluated
for Impairment		Total
Recorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan losses
(In thousands)
Commercial and industrial$3,693  $161  $562,055  $9,398  $565,748  $9,559  
Paycheck Protection Program—  —  370,034  190  370,034  190  
Commercial tax-exempt—  —  419,264  2,486  419,264  2,486  
Commercial real estate6,007  —  2,670,701  47,675  2,676,708  47,675  
Construction and land—  —  240,211  9,524  240,211  9,524  
Residential16,837  60  2,842,790  17,705  2,859,627  17,765  
Home equity654  18  83,934  421  84,588  439  
Consumer and other—  —  116,774  1,686  116,774  1,686  
Total$27,191  $239  $7,305,763  $89,085  $7,332,954  $89,324  
December 31, 2019
Individually Evaluated
for Impairment		Collectively Evaluated
for Impairment		Total
Recorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan losses
(In thousands)
Commercial and industrial$724  $146  $1,141,237  $15,918  $1,141,961  $16,064  
Commercial real estate733  —  2,550,541  40,765  2,551,274  40,765  
Construction and land—  —  225,983  5,119  225,983  5,119  
Residential15,900  67  2,823,255  8,790  2,839,155  8,857  
Home equity1,830  22  81,827  756  83,657  778  
Consumer and other—  —  134,674  399  134,674  399  
Total$19,187  $235  $6,957,517  $71,747  $6,976,704  $71,982  
36
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
8. Derivatives and Hedging Activities
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and, to a lesser extent, the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are generally determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain loans, deposits, and borrowings. As a service to its customers, the Company may utilize derivative instruments including customer foreign exchange forward contracts to manage its foreign exchange risk, if any.
The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019:
 June 30, 2020December 31, 2019
 Asset derivativesLiability derivativesAsset derivativesLiability derivatives
 Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)
 (In thousands)
Derivatives designated as hedging instruments:
Interest rate swapsOther assets$—  Other liabilities$274  Other assets$—  Other liabilities$—  
Derivatives not designated as hedging instruments:
Interest rate customer swapsOther assets96,968  Other liabilities97,760  Other assets36,089  Other liabilities36,580  
Risk participation agreementsOther assets21  Other liabilities478  Other assets10  Other liabilities242  
Total$96,989  $98,512  $36,099  $36,822  
_____________________
(1)For additional details, see Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 5: Fair Value Measurements.”
The following table presents the effect of the Company’s derivative financial instruments on accumulated other comprehensive income for the three and six months ended June 30, 2020 and 2019:
Derivatives in cash
flow hedging
relationships
Amount of gain or (loss) recognized in OCI on derivatives
Location of gain
or (loss) reclassified
from accumulated
OCI into income
Amount of gain or (loss) reclassified from accumulated OCI into income
Three months ended June 30,Three months ended June 30,
2020201920202019
(In thousands)(In thousands)
Interest rate swaps$(426) $(9) Interest income/(expense)$(152) $191  
Total$(426) $(9) $(152) $191  
Derivatives in cash
flow hedging
relationships		Amount of gain or (loss) recognized in OCI on derivatives Location of gain
or (loss) reclassified
from accumulated
OCI into income		Amount of gain or (loss) reclassified from accumulated OCI into income
Six months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)(In thousands)
Interest rate swaps$(426) $(47) Interest income/(expense)$(152) $502  
Total$(426) $(47) $(152) $502  
37
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following table presents the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019:
Location of gain or (loss) reclassified from accumulated
OCI into income		Amount of gain or
(loss) recognized in
income on cash flow
hedging relationships		Amount of gain or
(loss) recognized in
income on cash flow
hedging relationships
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)
Total amounts of income and (expense) line items presented in the statement of operations in which the effects of fair value or cash flow hedges are recordedInterest income/(expense)$(152) $191  $(152) $502  
The effects of cash flow hedging:
Gain or (loss) on cash flow hedging relationships in ASC 815
Interest contracts - amount of gain or (loss) reclassified from accumulated other comprehensive income into incomeInterest income/(expense)$(152) $191  $(152) $502  
The Bank has agreements with its derivative counterparties that contain provisions where, if the Bank defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Bank could also be declared in default on its derivative obligations. The Bank was in compliance with these provisions as of June 30, 2020 and December 31, 2019.
The Bank also has agreements with certain of its derivative counterparties that contain provisions where, if the Bank fails to maintain its status as a well- or adequately-capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations under the agreements. The Bank was in compliance with these provisions as of June 30, 2020 and December 31, 2019.
Certain of the Bank’s agreements with its derivative counterparties contain provisions where, if specified, events or conditions occur that materially change the Bank’s creditworthiness in an adverse manner, the Bank may be required to fully collateralize its obligations under the derivative instruments. The Bank was in compliance with these provisions as of June 30, 2020 and December 31, 2019.
As of June 30, 2020 and December 31, 2019, the termination amounts related to collateral determinations of derivatives in a liability position were $98.9 million and $35.7 million, respectively. The Company has minimum collateral posting thresholds with its derivative counterparties. As of June 30, 2020 and December 31, 2019, the Company had pledged securities with a market value of $100.9 million and $40.0 million, respectively, against its obligations under these agreements. The collateral posted is typically greater than the current liability position; however, due to timing of liability position changes at period end, the funding of a collateral shortfall may take place shortly following period end.
Cash flow hedges of interest rate risk
The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements.
To accomplish this objective and strategy, the Bank has entered into one interest rate swap during 2020 with an effective date of April 14, 2020. The interest rate swap is designated as a cash flow hedge and involves the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed payments.
The one interest rate swap entered into during 2020 has a notional amount of $100 million and a term of eighteen months from its respective effective date. The interest rate swap will effectively fix the Bank's interest payments on $100 million of rolling three month FHLB advances at a rate of 0.48%.
Per ASU 2017-12, for derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. For active cash flow hedges, a portion of the balance reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made or received on the Company’s interest rate swaps.
Non-designated hedges
Derivatives not designated as hedges are not speculative and result from different services the Bank provides to qualified commercial clients. The Bank offers certain derivative products directly to such clients. The Bank economically hedges derivative transactions executed with commercial clients by entering into mirror-image, offsetting derivatives with third parties. Derivative transactions executed as part of these programs are not designated in ASC 815-qualifying hedging
38
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
relationships and are, therefore, marked-to-market through earnings each period. Because the derivatives have mirror-image contractual terms, the changes in fair value substantially offset through earnings. The net effect on earnings is primarily driven by changes in the credit valuation adjustment (“CVA”). The CVA represents the dollar amount of fair value adjustment related to nonperformance risk of both the Bank and its counterparties. Fees earned in connection with the execution of derivatives related to this program are recognized in the Consolidated Statements of Operations in other income. The Bank has interest rate swaps and caps related to this program with an aggregate notional amount of $1.6 billion as of June 30, 2020 and December 31, 2019. As of June 30, 2020 and December 31, 2019, there were no foreign currency exchange contracts related to this program.
In addition, as a participant lender, the Bank has guaranteed performance on the pro-rated portion of swaps executed by other financial institutions. As the participant lender, the Bank is providing a partial guarantee, but is not a direct party to the related swap transactions. The Bank has no obligations under the risk participation agreements unless the borrower defaults on their swap transaction with the lead bank and the swap is in a liability position to the borrower. In that instance, the Bank has agreed to pay the lead bank a portion of the swap’s termination value at the time of the default. The derivative transactions entered into as part of these agreements are not designated, as per ASC 815, as qualifying hedging relationships and are, therefore, marked-to-market through earnings each period. As of June 30, 2020 and December 31, 2019, there were seven of these risk participation transactions with an aggregate notional amount of $58.1 million and $58.8 million, respectively.
The Bank has also participated out to other financial institutions a pro-rated portion of swaps executed by the Bank. The other financial institution has no obligations under the risk participation agreements unless the borrowers default on their swap transactions with the Bank and the swaps are in liability positions to the borrower. In those instances, the other financial institution has agreed to pay the Bank a portion of the swap’s termination value at the time of the default. The derivative transactions entered into as part of these agreements are not designated, as per ASC 815, as qualifying hedging relationships and are, therefore, marked-to-market through earnings each period. As of June 30, 2020, there were five of these risk participation transactions with an aggregate notional amount of $30.4 million. As of December 31, 2019, there were four of these risk participation transactions with an aggregate notional amount of $20.5 million.
The following table presents the effect of the Bank’s derivative financial instruments not designated as hedging instruments in the Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019.
Amount of gain or (loss), net,
recognized in income on derivatives
Derivatives not designated as
hedging instruments		Location of gain or (loss) recognized in income on derivativesThree months ended June 30,Six months ended June 30,
2020201920202019
 (In thousands)
Interest rate swapsOther income/(expense)$254  $(64) $(301) $(255) 
Risk participation agreementsOther income/(expense)(24) (213) (226) (109) 
Total$230  $(277) $(527) $(364) 
9. Income Taxes
The following table presents the components of income tax expense and effective tax rates for the periods indicated:
Six months ended June 30,
20202019
(In thousands)
Income/(loss) before income taxes$(1,549) $49,277  
Income tax expense943  10,286  
Net income/(loss) before attribution to noncontrolling interests$(2,492) $38,991  
Effective tax rate(60.9)%20.9 %
The effective tax rate for the six months ended June 30, 2020 of (60.9)%, with related tax expense of $0.9 million, was calculated based on a forecasted 2020 annual effective tax rate. The effective tax rate for the six months ended June 30, 2019 of 20.9%, with related tax expense of $10.3 million, was calculated based on a forecasted 2019 annual effective tax rate.
The effective tax rate for the six months ended June 30, 2020 was negative due primarily to the impact of earnings from tax-exempt investments and income tax credits in relation to near break-even income. The tax rate is less meaningful in periods where the Company is near break-even as a result of the larger proportionate impact of tax benefit items compared to pre-tax income. The effective tax rate for the six months ended June 30, 2019 is less than the statutory rate of 21% due primarily to earnings from tax-exempt investments and income tax credits, which were partially offset by state and local income taxes and the accounting for investments in affordable housing projects. The effective tax rate for the six months ended June 30, 2020 is less than the effective tax rate for the same period in 2019 due primarily to the lower level of income in 2020 as compared to
39
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
2019. In addition, the effective tax rate for the six months ended June 30, 2020 includes income tax expense of $0.5 million related to employee share-based payments.
10. Noncontrolling Interests
Noncontrolling interests consist of equity owned by management of the Company’s majority-owned affiliate, DGHM. Net income attributable to noncontrolling interests in the Consolidated Statements of Operations represents the net income allocated to the noncontrolling interest owners of DGHM. Net income allocated to the noncontrolling interest owners was zero and $69 thousand for the three-month periods ended June 30, 2020 and 2019, respectively, and $6 thousand and $169 thousand for the six-month periods ended June 30, 2020 and 2019, respectively.
On the Consolidated Balance Sheets, noncontrolling interests are included as the sum of the capital and undistributed profits allocated to the noncontrolling interest owners. Typically, this balance is included in a company’s permanent shareholders’ equity in the Consolidated Balance Sheets. When the noncontrolling interest owners’ rights include certain redemption features, as described in ASC 480, Distinguishing Liabilities from Equity, such redeemable noncontrolling interests are classified as mezzanine equity and are not included in permanent shareholders’ equity. Due to the redemption features of the noncontrolling interests of DGHM, the Company had redeemable noncontrolling interests held in mezzanine equity in the accompanying Consolidated Balance Sheets of zero and $1.4 million as of June 30, 2020 and December 31, 2019, respectively. The aggregate amount of such redeemable noncontrolling equity interests are recorded at the estimated maximum redemption values. The Company had no noncontrolling interests included in permanent shareholder’s equity at June 30, 2020 and December 31, 2019.
The DGHM operating agreement provides the Company and/or the noncontrolling interest holders with contingent call and put options and mandatory repurchase obligations used for the orderly transfer of noncontrolling equity interests between the noncontrolling interest holders and the Company at contractually predetermined values. This agreement is discussed in Part II. Item 8. “Financial Statements and Supplementary Data - Note 14: Noncontrolling Interests” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
The interests in DGHM take the form of limited liability company units. There are various events that could trigger a put, call or mandatory repurchase, such as a change in control, death, disability, retirement, resignation or termination. The terms of these rights and obligations are governed by the operating agreement of DGHM.
The following table presents a rollforward of the Company’s redeemable noncontrolling interests for the periods indicated:
Three months endedSix months ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(In thousands)
Redeemable noncontrolling interests at beginning of period$—  $662  $1,383  $2,526  
Net income attributable to noncontrolling interests—  69  6  169  
Distributions—  (69) (6) (169) 
Purchases/(sales) of ownership interests—  —  (64) 12  
Amortization of equity compensation8  9  16  26  
Adjustments to fair value(8) 1,115  (1,335) (778) 
Redeemable noncontrolling interests at end of period$—  $1,786  $—  $1,786  
11. Accumulated Other Comprehensive Income
The following table presents a summary of the amounts reclassified from the Company's Accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020 and 2019:
Description of component of Accumulated other comprehensive income/(loss)Three months ended June 30,Six months ended June 30,Affected line item in
Statement of Operations
2020201920202019
(In thousands)
Net realized gain/(loss) on cash flow hedges:
Hedges related to deposits:
Pre-tax gain/(loss)$(152) $191  $(152) $502  Interest income/(expense)
Tax (expense)/ benefit45  (55) 45  (146) Income tax (expense)/benefit
Net$(107) $136  $(107) $356  Net income/(loss) attributable to the Company
Total reclassifications for the period, net of tax$(107) $136  $(107) $356  
40
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following table presents the after-tax changes in the components of the Company’s Accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020 and 2019:
Components of Accumulated other comprehensive income/(loss)
Unrealized
gain/(loss)
on securities
available-for-sale		Unrealized
gain/(loss)
on cash flow
hedges		Unrealized
gain/(loss)
on other		Accumulated
other
comprehensive
income/(loss)
(In thousands)
Balance at December 31, 2018$(17,556) $391  $(554) $(17,719) 
Other comprehensive income/(loss) before reclassifications22,233  (33) —  22,200  
Reclassified from other comprehensive income/(loss)—  (356) —  (356) 
Other comprehensive income/(loss), net22,233  (389) —  21,844  
Balance at June 30, 2019$4,677  $2  $(554) $4,125  
Balance at December 31, 2019$8,435  $—  $(860) $7,575  
Other comprehensive income/(loss) before reclassifications22,687  (302) (30) 22,355  
Reclassified from other comprehensive income/(loss)—  107  —  107  
Other comprehensive income/(loss), net22,687  (195) (30) 22,462  
Balance at June 30, 2020$31,122  $(195) $(890) $30,037  
Components of Accumulated other comprehensive income/(loss)
Unrealized
gain/(loss)
on securities
available-for-sale		Unrealized
gain/(loss)
on cash flow
hedges		Unrealized
gain/(loss)
on other		Accumulated
other
comprehensive
income/(loss)
(In thousands)
Balance at March 31, 2019$(5,988) $144  $(554) $(6,398) 
Other comprehensive income/(loss) before reclassifications10,665  (6) —  10,659  
Reclassified from other comprehensive income/(loss)—  (136) —  (136) 
Other comprehensive income/(loss), net10,665  (142) —  10,523  
Balance at June 30, 2019$4,677  $2  $(554) $4,125  
Balance at March 31, 2020$22,924  $—  $(860) $22,064  
Other comprehensive income/(loss) before reclassifications8,198  (302) (30) 7,866  
Reclassified from other comprehensive income/(loss)—  107  —  107  
Other comprehensive income/(loss), net8,198  (195) (30) 7,973  
Balance at June 30, 2020$31,122  $(195) $(890) $30,037  
12. Restructuring
There were no restructuring charges for the three and six months ended June 30, 2020. In the first quarter of 2019, the Company incurred restructuring charges of $1.6 million. The charges were in connection with a previously announced reduction to the Company’s workforce, which included executive transition changes as well as other employee benefit and technology related initiatives. The restructuring was intended to improve the Company’s operating efficiency and enhance earnings.
41
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
The following table presents a summary of the restructuring activity for the three and six months ended June 30, 2020 and 2019:
Severance ChargesOther Associated CostsTotal
(In thousands)
Accrued charges at December 31, 2019$526  $789  $1,315  
Costs paid(434) —  (434) 
Accrued charges at March 31, 202092  789  881  
Costs paid(92) —  (92) 
Accrued charges at June 30, 2020$—  $789  $789  
Accrued charges at December 31, 2018$3,896  $789  $4,685  
Cost incurred1,646  —  1,646  
Costs paid(1,986) —  (1,986) 
Accrued charges at March 31, 20193,556  789  4,345  
Costs paid(1,364) —  (1,364) 
Accrued charges at June 30, 2019$2,192  $789  $2,981  
13. Revenue Recognition
In accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. ASC 606 does not apply to revenue associated with financial instruments such as loans and securities. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest income considered in-scope of ASC 606 is discussed below.
Wealth management and trust fees
Wealth management and trust fees are earned for providing wealth management, retirement plan advisory, family office, financial planning, trust services, and other financial advisory services to clients. The Company’s performance obligation under these contracts is satisfied over time as the services are provided. Fees are recognized monthly based on the average monthly, beginning-of-quarter, or, for a small number of clients, end-of-quarter market value of the AUM and the applicable fee rate, depending on the terms of the contracts. Fees are also recognized monthly based either on a fixed fee amount or are based on the quarter-end (in arrears) market value of the AUM and the applicable fee rate, depending on the terms of the contracts. No performance based incentives are earned under wealth management contracts. Receivables are recorded on the Consolidated Balance Sheets in the Fees receivable line item. Deferred revenues of $6.0 million and $6.5 million as of June 30, 2020 and December 31, 2019, respectively, are recorded on the Consolidated Balance Sheets within Other liabilities.
Trust fees are earned when the Company is appointed as trustee for clients. As trustee, the Company administers the client’s trust and manages the assets of the trust including investments and property. The Company’s performance obligation under these agreements is satisfied over time as the administration and management services are provided. Fees are recognized monthly or, in certain circumstances, quarterly based on a percentage of the market value of the account as outlined in the agreement. Payment frequency is defined in the individual contracts which primarily stipulate monthly in arrears. No performance based incentives are earned on trust fee contracts. Receivables are recorded on the Consolidated Balance Sheets within Fees receivable.
Investment management fees
Investment management fees are earned for the management of a series of accounts and funds in which clients invest directly, acting as a sub-advisor to larger investment management companies, or private client account management. The Company’s performance obligation is satisfied over time and the resulting fees are recognized monthly, based upon either the beginning-of-quarter (in advance) or quarter-end (in arrears) market value of the AUM and the applicable fee rate, depending on the terms of the contracts. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Company may earn performance-based incentives on certain contracts. Receivables are recorded on the Consolidated Balance Sheets within Fees receivable.
Other banking fee income
The Bank charges a variety of fees to its clients for services provided on the deposit and deposit management related accounts. Each fee is either transaction based or assessed monthly. The types of fees include service charges on accounts, overdraft fees, maintenance fees, ATM fee charges, and other miscellaneous charges related to the accounts. These fees are not governed by individual contracts with clients. They are charges to clients based on disclosures presented to clients upon opening
42
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
these accounts along with updated disclosures when changes are made to the fee structures. The transaction-based fees are recognized in revenue when charged to the client based on specific activity on the client’s account. Monthly service/maintenance charges are recognized in the month they are earned and are charged directly to the client’s account.
The Bank also charges fees for treasury activities such as swap fees and foreign exchange fees for clients with a banking relationship. These fees are recorded when earned via completion of the transaction for the client. The completion of the transaction is deemed to be the performance obligation of the transaction. The related revenue is recorded through a direct charge to the client’s account. There are no individual agreements or contracts with clients relating to foreign exchange fees as they are governed by client disclosure statements and the Bank’s internal policies and procedures.
The following table presents the fee income considered in-scope of ASC 606 by contracts with customers:
 Three months ended June 30,Six months ended June 30,
 2020201920202019
 (In thousands)
Fees and other income:
Wealth management and trust fees $17,261  $18,912  $35,632  $37,970  
Investment management fees1,770  2,455  3,695  5,105  
Other income602  638  1,354  1,322  
Revenue from contracts with customers19,633  22,005  40,681  44,397  
Non-interest income within the scope of other GAAP topics3,029  2,375  3,502  5,231  
Total non-interest income$22,662  $24,380  $44,183  $49,628  
14. Lease Accounting
On adoption of ASU 2016-02 on January 1, 2019, the Company recognized $124.1 million of lease liabilities and $108.5 million of right-of-use ("ROU") assets on the Consolidated Balance Sheet. ROU assets obtained in exchange for lease liabilities are net of tenant improvement allowances and deferred rent. There was no impact to the Company’s Consolidated Statements of Cash Flows upon adoption, since the net impact of all adjustments recorded upon transition represents non-cash activity. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements” for additional information on the Company's adoption of this standard.
The Company, as lessee, has 37 real estate leases for office and ATM locations classified as operating leases. The Company determines if an arrangement is a lease or contains a lease at inception. The terms of the real estate leases generally have annual increases in payments based off of a fixed or variable rate, such as the Consumer Price Index rate, that is outlined within the respective contracts. Generally, the initial terms of the leases for our leased properties range from five to fifteen years. Most of the leases also include options to renew for periods of five to ten years at contractually agreed upon rates or at market rates at the time of the extension. On a quarterly basis, the Company evaluates whether the renewal of each lease is reasonably certain. If the lease doesn’t provide the implicit interest rate, the Bank uses its incremental borrowing rate at the commencement date of the lease in determining the present value of lease payments. No other significant judgments or assumptions were made in applying the requirements of ASU 2016-02.
The following table presents information about the Company's leases as of the dates indicated.
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)
Lease cost
Operating lease cost$4,493  $4,841  $9,094  $9,526  
Short-term lease cost58  (3) 106  29  
Variable lease cost—  2  (9) 4  
Less: Sublease income—  (28) (28) (46) 
Total operating lease cost$4,551  $4,812  $9,163  $9,513  
43
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
Six months ended June 30, 2020
(In thousands, except years and percentages)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$10,180  
ROU assets obtained in exchange for new operating lease liabilities$443  
Weighted-average remaining lease term for operating leases7.8 years
Weighted-average discount rate for operating leases3.2 %
The Company is obligated for minimum payments under non-cancelable operating leases. In accordance with the terms of these leases, the Company is currently committed to minimum annual payments as follows as of June 30, 2020:
June 30, 2020
(In thousands)
Remainder of 2020$9,883  
202119,727  
202219,680  
202318,722  
202412,692  
Thereafter43,964  
Total future minimum lease payments124,668  
Less: Amounts representing interest(16,434) 
Present value of net future minimum lease payments$108,234  
15. Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This update and the related amendments to Topic 842 require lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”); ASU No. 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”); and ASU No. 2019-01, Leases (Topic 842), Codification Improvements (“ASU 2019-01”). The standard establishes an ROU model that requires a lessee to recognize an ROU asset and lease liability on the Consolidated Balance Sheets for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and method of expense recognition in the Consolidated Statements of Operations. The Company adopted these provisions on January 1, 2019. The most significant effects relate to the recognition of new ROU assets and lease liabilities on the balance sheet for real estate operating leases and providing significant disclosures about leasing activities. Additionally, the Company elected the package of practical expedients, as prescribed by ASU 2016-02. On adoption, the Company recognized $124.1 million of lease liabilities and $108.5 million of ROU assets. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 14: Lease Accounting” for further details.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). Throughout 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”); ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”); ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 942)—Effective Dates (“ASU 2019-10”); and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”). This update and related amendments to Topic 326 are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology with a CECL model methodology that reflects expected credit losses and requires consideration of a reasonable and supportable economic forecast to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019. The Company adopted this update on January 1, 2020 utilizing a modified retrospective approach. On adoption of ASU 2016-13, the Company recognized a decrease in the allowance for loan losses of $20.4 million and an increase in the reserve for unfunded loan commitments of $1.4 million. The net, after-tax impact of the decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million as shown in the Consolidated Statements of Changes in Shareholders’ Equity. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 4: Investments”, “Note 6 - Loan Portfolio and Credit Quality”, and “Note 7 - Allowance for Loan Losses” for further details.
In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU
44
BOSTON PRIVATE FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements - (Continued)
2018-14”). The amendments in ASU 2018-14 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. This update is effective on a retrospective basis for interim and annual reporting periods beginning January 1, 2021. The Company is assessing the potential impact for this update and how it applies to the Company’s disclosures surrounding its two non-qualified supplemental executive retirement plans and a long-term incentive plan.
45

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As of and for the three and six months ended June 30, 2020
Certain statements contained in this Quarterly Report on Form 10-Q that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” and similar expressions. These statements include, among others, statements regarding our strategy; evaluations of interest rate trends and future liquidity; expectations as to changes in assets, deposits and results of operations; the impact of the COVID-19 pandemic; future operations, market position and financial position; and prospects, plans and objectives of management. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company’s control.
Forward-looking statements are based on the current assumptions and beliefs of management and are only expectations of future results. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, factors referenced herein under the section captioned “Risk Factors”; the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of the economic contraction as a result of the COVID-19 pandemic; continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Company operates; changes in customer behavior; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; turbulence in the capital and debt markets; changes in interest rates; increases in loan defaults and charge-off rates; decreases in the value of securities and other assets; changes in loan loss reserves; decreases in deposit levels necessitating increased borrowing to fund loans and investments; competitive pressures from other financial institutions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; changes in regulation; reputational risk relating to the Company’s participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; risks that goodwill and intangibles recorded in the Company’s financial statements will become impaired; the risk that the Company’s deferred tax asset may not be realized; risks related to the identification and implementation of acquisitions, dispositions and restructurings; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated in the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
46

Executive Summary
The Company offers a wide range of private banking, wealth management, and trust services to high net worth individuals, families, businesses and select institutions through its two reportable segments: (i) Private Banking and (ii) Wealth Management and Trust. This Executive Summary provides an overview of the most significant aspects of the Company's operating segments and operations in the second quarter of 2020. Details of the matters addressed in this summary are provided elsewhere in this document and, in particular, in the sections immediately following.
As of and for the three months ended June 30,
20202019$ Change% Change
(In thousands, except per share data and percentages)
Total revenue$81,600  $81,840  $(240) — %
Provision/(credit) for loan losses22,604  1,363  21,241  nm
Total operating expense61,453  55,659  5,794  10 %
Net income/(loss) before attribution to noncontrolling interests(3,298) 19,449  (22,747) nm
Net income attributable to noncontrolling interests—  69  (69) (100)%
Net income/(loss) attributable to the Company(3,298) 19,380  (22,678) nm
Diluted earnings/(loss) per share attributable to common shareholders$(0.04) $0.22  $(0.26) nm
ASSETS UNDER MANAGEMENT AND ADVISORY (“AUM”):
Wealth Management and Trust$14,889,000  $14,649,000  $240,000  2 %
Other (1)1,067,000  1,550,000  (483,000) (31)%
Total AUM$15,956,000  $16,199,000  $(243,000) (2)%
_____________________
(1) Includes results from Dalton, Greiner, Hartman, Maher & Co., LLC (“DGHM”)
nm = not meaningful
Net income/(loss) attributable to the Company was $(3.3) million and $19.4 million for the three months ended June 30, 2020 and June 30, 2019, respectively. The Company recognized Diluted earnings/(loss) per share attributable to common shareholders of $(0.04) and $0.22 for the three months ended June 30, 2020 and June 30, 2019, respectively. Key items that affected the Company’s results in the second quarter of 2020 compared to the same period of 2019 include:
▪Provision expense for loan losses increased $21.2 million to $22.6 million for the three months ended June 30, 2020, compared to the same period of 2019. During the second quarter of 2020, the Company recognized a total provision for loan losses of $25.4 million, which includes a provision for loan loss expense of $22.6 million, and separately, an expense of $2.8 million for unfunded loan commitments, recognized as Other expense within Noninterest expense. The provision for loan losses in the second quarter of 2020 was primarily driven by the change in economic forecasts in the second quarter of 2020 to reflect deteriorating economic conditions related to the COVID-19 pandemic and a change in the weight of forecast scenarios used to be weighted more heavily to the downside scenario, combined with an increase in qualitative factors to account for incremental risk not included in the quantitative model.
▪Total revenue decreased $0.2 million to $81.6 million for the three months ended June 30, 2020, compared to the same period of 2019 as described below.
•Total fees and other income decreased $1.7 million, or 7%, to $22.7 million for the three months ended June 30, 2020, compared to the same period of 2019. The decrease was primarily driven by lower Wealth management and trust fees and Investment management fees due to the impact of lower equity market values on AUM at the end of the first quarter of 2020, as many accounts are billed in arrears. Total fees and other income represents 28% of Total revenue for the three months ended June 30, 2020, compared to 30% of Total revenue for the same period of 2019.
•Net interest income increased $1.5 million, or 3%, to $58.9 million for the three months ended June 30, 2020, compared to the same period of 2019. The increase in Net interest income was primarily driven by PPP-related income and lower funding costs, partially offset by lower interest on interest-earning assets. Net interest margin (“NIM”) was 2.75% for the three months ended June 30, 2020, a decrease of 3 basis points compared to the same period in 2019. Although Net interest income increased, the decrease in NIM was driven by the addition of lower-yielding PPP loans in the second quarter of 2020.
▪Total operating expense increased $5.8 million, or 10%, to $61.5 million for the three months ended June 30, 2020, compared to the same period of 2019. The increase was primarily driven by increases in the reserve for unfunded loan commitments within Other expense, Information systems expense as a result of IT initiatives being placed in service in
47

the fourth quarter of 2019, and Salaries and employee benefits expense, partially offset by a decrease in Occupancy and equipment expense.
▪For the three months ended June 30, 2020, total loans increased $289.6 million, or 4%, while total deposits increased $591.8 million, or 9%, from the first quarter of 2020. The increase in loans was primarily driven by the addition of $370.0 million of PPP loans in the second quarter of 2020, while the increase in deposits was primarily driven by clients maintaining adequate cash reserves during an economic downturn and the increase in funding of PPP loans into deposit accounts in the second quarter of 2020. The Company’s loan-to-deposit ratio decreased from 103% as of March 31, 2020 to 99% as of June 30, 2020 driven by strong deposit inflows. Deposits are the Company’s primary source of funds to originate loans. When the Company’s loan-to-deposit ratio exceeds 100%, the Company relies on other funding sources, such as FHLB borrowings or federal funds, to fund loan growth. If the Company is unable to grow deposits in line with loan growth, it may evaluate other options such as slowing loan growth, selling a portion of portfolio loans, or originating mortgage loans as held-for-sale.
The Company’s Private Banking segment reported Net income/(loss) attributable to the Company of $(1.0) million in the second quarter of 2020, compared to $17.2 million for the same period of 2019. Net income/(loss) attributable to the Company decreased $18.2 million from the same period in 2019 primarily driven by an increase of $21.2 million to the provision for loan losses, an increase of $5.1 million in Operating expense primarily due to higher Other expense related to the reserve for unfunded loan commitments, and an increase in Information systems expense. These items were partially offset by an increase of $2.1 million in Total revenue primarily due to an increase in Net interest income and by the impact of favorable mark-to-market adjustments related to derivatives and deferred compensation within Fees and other income.
The Company’s Wealth Management and Trust segment reported Net income attributable to the Company of $1.8 million in the second quarter of 2020, compared to $3.1 million for the same period of 2019. The decrease of $1.4 million, or 44%, was primarily driven by a decrease of $1.8 million in Total revenue due to the impact of lower AUM on fee revenues and an increase of $0.2 million in Total operating expense. The increase in Total operating expense was primarily driven by increases in Salaries and employee benefits expense and Information systems expense, partially offset by decreases in Other expense, Professional services expense, and Occupancy and equipment expense. Wealth Management and Trust AUM increased $0.2 billion, or 2%, to $14.9 billion at June 30, 2020 from $14.6 billion at June 30, 2019. The increase in AUM was primarily driven by favorable market returns of $0.2 billion for the twelve months ended June 30, 2020.
Impact of the COVID-19 Pandemic
The COVID-19 pandemic has caused, and continues to cause, substantial disruptions to the global economy and to the customers and communities that we serve. In response to the pandemic, the Company implemented business continuity contingency plans, including company-wide remote working arrangements. We are also focused on supporting our clients who may be experiencing a financial hardship due to the COVID-19 pandemic, including by participating in the Small Business Administration’s (the “SBA”) Paycheck Protection Program (the “PPP”) and offering loan deferrals and forbearance as needed, including our mortgage deferment program, and creating the Commercial real estate second loan program. We will continue to evaluate this fluid situation and take additional actions as necessary.  
Participation in the PPP
The CARES Act initially appropriated $349 billion for “paycheck protection loans” through the PPP. The amount appropriated was subsequently increased to $659 billion. The CARES Act provided funding to the SBA for use for the PPP. Under the terms of the PPP, certain businesses can apply for loans through qualified financial institutions, such as the Bank, based on eligibility criteria. The PPP provides loans to eligible businesses with an initial term of up to five years at an interest rate of 1.0%. Loans issued under the PPP will be forgiven if the borrower uses at least 60% of the proceeds on payroll costs for a period of up to 24 weeks, following the loan funding date. This was changed from 75% and 8 weeks by the Paycheck Protection Program Flexibility Act signed into law on June 5. The SBA has issued an interim final rule in which it has provided that a lender may rely on certifications made by a borrower to determine the borrower’s eligibility for a PPP loan and use of loan proceeds, subject to a good faith review, and to determine the qualifying loan amount and eligibility for loan forgiveness.
Loans issued by participating financial institutions are 100% guaranteed by the SBA. Banks will receive a processing fee from the SBA from 1.0% to 5.0% based on the size of the loan. Loans up to $350 thousand will have a 5.0% fee, loans between $350 thousand and $2.0 million will have a 3.0% fee, and loans greater than $2.0 million will have a 1.0% fee.
In conjunction with the PPP, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) has created a lending facility for qualified financial institutions. The Paycheck Protection Program Liquidity Facility (the “PPPLF”) will extend credit to depository institutions with a term of up to five years at an interest rate of 0.35%. Only loans issued under the PPP can be pledged as collateral to access the facility. As of June 30, 2020, the Bank has not participated in the PPPLF, but may do so in the future.
As of June 30, 2020, the Bank processed 1,045 loans totaling $380.3 million under the PPP program. The Bank will receive $11.1 million of processing fees from the SBA, which will be accreted through net interest income on a straight-line
48

basis over the life of the loan. If a loan is forgiven or otherwise paid off, the remainder of the processing fee will be accreted through net interest income. As of June 30, 2020, $0.8 million was accreted through net interest income.
Mortgage deferment program 
In response to the COVID-19 pandemic, the Bank initiated a mortgage deferment program under which principal and interest payments on qualifying loans are generally deferred for initially three months and the loan term is extended three months; if requested, the loan may be deferred for a subsequent three months. Loans that are deferred under the program are not considered TDRs or past due based on current regulatory guidance. As of June 30, 2020, approximately 336 residential and home equity loans totaling approximately $214.5 million were processed under the program.
Commercial real estate second loan program
In response to the COVID-19 pandemic, the Bank also initiated a program to offer qualifying Commercial real estate borrowers a second mortgage to cover up to one year of principal and interest payments. In order to qualify for the loan, the total exposure after receiving the second mortgage for each borrower could not exceed a 75% loan-to-value ratio, and the loans were required to be current at the time of application, amongst other conditions. As of June 30, 2020, borrowers with approximately 240 existing loans totaling $1.3 billion requested and were approved for these second mortgages, representing approximately 50% of the Commercial real estate loan balance. As of June 30, 2020, the borrowers associated with the $1.3 billion of existing loans received approximately $80.0 million in additional funding under this program. The Company does not anticipate a material increase in the $80.0 million balance of new loans in the future.  The entire Commercial real estate portfolio will continue to be monitored for credit deterioration regardless of their participation in the plan.
During the second quarter of 2020, the Company recognized a total provision for loan losses expense of $25.4 million for loans and off-balance sheet commitments primarily driven by the changes in economic forecasts to reflect deteriorating economic conditions related to the COVID-19 pandemic and a change in the weight of forecast scenarios used, combined with an increase in qualitative factors to account for incremental risk not included in the quantitative model. There have been no significant changes to judgments in determining the fair value of assets or liabilities, and there have been no material impairments of financial assets. The Company will continue to monitor the fair value of assets to determine if trigger events exist to warrant further impairment testing.
Critical Accounting Policies
Critical accounting policies reflect significant judgments and uncertainties, which could potentially result in materially different results under different assumptions and conditions. The Company believes that its most critical accounting policies upon which its financial condition depends, which involve the most complex or subjective decisions or assessments, are the allowance for loan losses, the valuation of goodwill and intangible assets and the analysis for impairment, and income tax estimates. These policies are discussed in Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Subsequent to the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2019, there was one change to the critical accounting policies. Upon the adoption of ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”) on January 1, 2020, management's policy and processes for the allowance for loan losses has changed. The updates in this standard replace the incurred loss impairment methodology with a CECL model methodology. The CECL model methodology incorporates current conditions, reasonable and supportable forecasts, and prepayments to estimate loan losses over the life of the loan. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 7: Allowance for Loan Losses” for further discussion on the new policy and processes. There have been no other changes to the Company's policies through the filing of this Quarterly Report on Form 10-Q.
Results of operations for the three and six months ended June 30, 2020 versus June 30, 2019
Net income/(loss). The Company recorded Net loss attributable to the Company for the three and six months ended June 30, 2020 of $(3.3) million and $(2.5) million, respectively, compared to Net income attributable to the Company of $19.4 million and $38.8 million for the same respective periods in 2019.

The Company recognized Diluted loss per share attributable to common shareholders for the three and six months ended June 30, 2020 of $(0.04) per share and $(0.03) per share, respectively, compared to Diluted earnings per share attributable to common shareholders of $0.22 per share and $0.47 per share for the same respective periods in 2019. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 2: Earnings/(Loss) Per Share” for further detail on adjustments made to arrive at income/(loss) available to common shareholders.
The following table presents selected financial highlights:
49

Three months ended June 30,$
Change		% ChangeSix months ended June 30,$
Change		%
Change
2020201920202019
(In thousands, except percentages)
Net interest income$58,938  $57,460  1,478  3 %$116,195  $115,798  $397  — %
Fees and other income22,662  24,380  (1,718) (7)%44,183  49,628  (5,445) (11)%
Total revenue81,600  81,840  (240) — %160,378  165,426  (5,048) (3)%
Provision/(credit) for loan losses22,604  1,363  21,241  nm39,566  (63) 39,629  nm
Operating expense61,453  55,659  5,794  10 %122,361  116,212  6,149  5 %
Income tax expense841  5,369  (4,528) (84)%943  10,286  (9,343) (91)%
Net income/(loss) before attribution to noncontrolling interests
(3,298) 19,449  (22,747) nm(2,492) 38,991  (41,483) nm
Less: Net income attributable to noncontrolling interests—  69  (69) (100)%6  169  (163) (96)%
Net income/(loss) attributable to the Company$(3,298) $19,380  $(22,678) nm$(2,498) $38,822  $(41,320) nm
_____________________
nm = not meaningful
Net interest income. Net interest income represents the difference between interest earned, primarily on loans and investments, and interest paid on funding sources, primarily deposits and borrowings. Interest rate spread is the difference between the average rate earned on total interest-earning assets and the average rate paid on total interest-bearing liabilities. NIM is the amount of net interest income expressed as a percentage of average interest-earning assets. The average rate earned on interest-earning assets is the amount of annualized interest income expressed as a percentage of average interest-earning assets. The average rate paid on interest-bearing liabilities is equal to annualized interest expense as a percentage of average interest-bearing liabilities. When credit quality declines and loans are placed on nonaccrual status, NIM can decrease because the same assets are earning less income. Loans graded as substandard but still accruing interest income totaled $88.6 million at June 30, 2020 and could be placed on nonaccrual status if their credit quality declines further.
Net interest income for the three months ended June 30, 2020 was $58.9 million, an increase of $1.5 million, or 3%, compared to the same period in 2019. The increase was primarily driven by PPP-related income and lower funding costs, partially offset by lower interest on interest-earning assets. NIM was 2.75% for the three months ended June 30, 2020, a decrease of 3 basis points compared to the same period in 2019. Although Net interest income increased, the decrease in NIM was driven by the addition of lower-yielding PPP loans in the second quarter of 2020.
Net interest income for the six months ended June 30, 2020 was $116.2 million, an increase of $0.4 million compared to the same period in 2019. Net interest income remained relatively flat as lower funding costs were offset by lower interest on interest-earning assets. NIM was 2.76% for the six months ended June 30, 2020, a decrease of 8 basis points compared to the same period in 2019. The decrease in NIM was driven by a higher volume of interest-earning assets, primarily the addition of lower-yielding PPP loans.
50

The following tables present the composition of the Company’s NIM for the three and six months ended June 30, 2020 and 2019.
Average BalanceInterest Income/ExpenseAverage Yield/Rate (1)
As of and for the three months ended June 30,
AVERAGE BALANCE SHEET:202020192020201920202019
AVERAGE ASSETS(In thousands)
Interest-earning assets:
Cash and investments: (2)
Taxable investment securities$198,337  $227,029  $859  $1,121  1.73 %1.98 %
Non-taxable investment securities 316,513  304,309  2,005  1,901  2.53 %2.50 %
Mortgage-backed securities505,669  508,033  2,566  2,706  2.03 %2.13 %
Short-term investments and other186,895  130,363  582  1,057  1.23 %3.23 %
Total cash and investments1,207,414  1,169,734  6,012  6,785  1.99 %2.32 %
Loans: (3)
Commercial and industrial 1,037,285  1,091,903  9,708  11,170  3.70 %4.05 %
Paycheck Protection Program283,619  —  1,573  —  2.19 %— %
Commercial real estate 2,659,074  2,506,637  24,602  29,953  3.66 %4.73 %
Construction and land 233,305  202,609  2,251  2,559  3.82 %5.00 %
Residential2,862,708  3,008,753  23,079  25,735  3.22 %3.42 %
Home equity88,307  91,384  650  1,146  2.96 %5.03 %
Other consumer124,346  124,778  944  1,380  3.05 %4.43 %
Total loans7,288,644  7,026,064  62,807  71,943  3.42 %4.07 %
Total earning assets8,496,058  8,195,798  68,819  78,728  3.22 %3.82 %
LESS: Allowance for loan losses68,473  73,856  
Cash and due from banks (non-interest bearing)39,959  45,705  
Other assets641,657  511,859  
TOTAL AVERAGE ASSETS$9,109,201  $8,679,506  
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and NOW$680,758  $684,507  $187  $276  0.11 %0.16 %
Money market3,684,147  3,226,569  4,848  10,476  0.53 %1.30 %
Certificates of deposit671,470  752,500  2,300  3,763  1.38 %2.01 %
Total interest-bearing deposits5,036,375  4,663,576  7,335  14,515  0.59 %1.25 %
Junior subordinated debentures106,363  106,363  764  1,080  2.84 %4.02 %
FHLB borrowings and other610,856  952,645  1,782  5,673  1.15 %2.36 %
Total interest-bearing liabilities5,753,594  5,722,584  9,881  21,268  0.69 %1.48 %
Non-interest bearing demand deposits2,213,829  1,926,591  
Payables and other liabilities306,896  238,544  
Total average liabilities8,274,319  7,887,719  
Redeemable noncontrolling interests—  943  
Average shareholders’ equity834,882  790,844  
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY$9,109,201  $8,679,506  
Net interest income$58,938  $57,460  
Interest rate spread2.53 %2.34 %
NIM2.75 %2.78 %
51

Average BalanceInterest Income/ExpenseAverage Yield/Rate (1)
As of and for the six months ended June 30,
AVERAGE BALANCE SHEET:202020192020201920202019
AVERAGE ASSETS(In thousands)
Interest-earning assets:
Cash and investments: (2)
Taxable investment securities$199,755  $235,218  $1,727  $2,306  1.73 %1.92 %
Non-taxable investment securities 316,097  305,581  4,003  3,802  2.53 %2.49 %
Mortgage-backed securities513,149  514,872  5,353  5,603  2.09 %2.18 %
Short-term investments and other167,188  105,610  1,653  1,965  1.96 %3.61 %
Total cash and investments1,196,189  1,161,281  12,736  13,676  2.13 %2.34 %
Loans: (3)
Commercial and industrial 1,091,648  1,081,092  20,432  22,150  3.69 %4.08 %
Paycheck Protection Program143,297  —  1,573  —  2.23 %— %
Commercial real estate 2,620,689  2,452,824  52,084  58,104  3.93 %4.71 %
Construction and land 233,315  206,956  4,823  5,200  4.09 %5.00 %
Residential2,856,771  2,990,948  46,547  51,280  3.26 %3.43 %
Home equity87,178  91,017  1,602  2,267  3.69 %5.02 %
Other consumer128,292  129,332  2,104  2,875  3.29 %4.48 %
Total loans7,161,190  6,952,169  129,165  141,876  3.58 %4.07 %
Total earning assets8,357,379  8,113,450  141,901  155,552  3.38 %3.82 %
LESS: Allowance for loan losses60,102  74,692  
Cash and due from banks (non-interest bearing)44,831  46,010  
Other assets602,319  502,068  
TOTAL AVERAGE ASSETS$8,944,427  $8,586,836  
AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and NOW$659,842  $679,716  $419  $572  0.13 %0.17 %
Money market3,717,664  3,283,891  14,505  20,549  0.78 %1.26 %
Certificates of deposit670,144  764,094  5,207  7,452  1.56 %1.97 %
Total interest-bearing deposits5,047,650  4,727,701  20,131  28,573  0.80 %1.22 %
Junior subordinated debentures106,363  106,363  1,681  2,201  3.17 %4.17 %
FHLB borrowings and other533,334  785,245  3,894  8,980  1.44 %2.27 %
Total interest-bearing liabilities5,687,347  5,619,309  25,706  39,754  0.90 %1.42 %
Non-interest bearing demand deposits2,129,758  1,950,088  
Payables and other liabilities288,846  236,894  
Total average liabilities8,105,951  7,806,291  
Redeemable noncontrolling interests573  1,619  
Average shareholders’ equity837,903  778,926  
TOTAL AVERAGE LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY$8,944,427  $8,586,836  
Net interest income$116,195  $115,798  
Interest rate spread2.48 %2.40 %
NIM2.76 %2.84 %
__________________
(1) Annualized. 
(2) Investments classified as available-for-sale and held-to-maturity are shown in the average balance sheet at amortized cost.
(3) Includes loans held for sale and nonaccrual loans.
Interest and dividend income. Total interest and dividend income for the three months ended June 30, 2020 was $68.8 million, a decrease of $9.9 million, or 13%, compared to the same period in 2019. Total interest and dividend income for the six months ended June 30, 2020 was $141.9 million, a decrease of $13.7 million, or 9%, compared to the same period in 2019. The decreases were primarily driven by lower yields on loans and investments, partially offset by higher volumes of loans and investments.
The Bank generally has interest related to nonaccrual loans that is either collected or reversed each quarter. When a loan is placed on nonaccrual, the interest income previously accrued but uncollected, is reversed which will have a negative
52

effect on the related yield. Interest collected on loans while on nonaccrual status is generally applied to the principal balance. If a nonaccruing loan pays off, previously collected interest income that was applied to principal may be recorded as interest income if the principal balance was paid in full. Based on the net amount collected or reversed, the impact on interest income and related yields can be either positive or negative. In addition, the Bank collects prepayment penalties on certain commercial loans that pay off prior to maturity which could also impact interest income and related yields positively. The amount and timing of prepayment penalties varies from quarter to quarter.
Interest income on commercial and industrial loans (including commercial loans and commercial tax-exempt loans) for the three months ended June 30, 2020 was $9.7 million, a decrease of $1.5 million, or 13%, compared to the same period in 2019, as a result of a 35 basis point decrease in the average yield and a 5% decrease in the average balance. For the six months ended June 30, 2020, commercial and industrial interest income was $20.4 million, a decrease of $1.7 million, or 8%, compared to the same period in 2019, as a result of a 39 basis point decrease in the average yield, partially offset by a 1% increase in the average balance. The decreases in the average yield for the three and six month periods were primarily the result of decreases to the interest rate benchmarks to which the variable rate loans are tied and lower yields on recent loan originations. The decrease in the average balance for the three month period was related primarily to slowing originations in all regions in which the Bank operates as the impact of the COVID-19 pandemic is uncertain. The increase in the average balance for the six month period was related primarily to growth in the first quarter of 2020 across all regions in which the Bank operates before the COVID-19 pandemic.
Interest income on PPP loans for the three and six months ended June 30, 2020 was $1.6 million. The Company began earning interest income on PPP loans in the second quarter of 2020. Interest income on PPP loans includes interest earned on the loans and the accretion of origination fees over the life of the loans.
Interest income on commercial real estate loans for the three months ended June 30, 2020 was $24.6 million, a decrease of $5.4 million, or 18%, compared to the same period in 2019, as a result of a 107 basis point decrease in the average yield, partially offset by a 6% increase in the average balance. For the six months ended June 30, 2020, commercial real estate interest income was $52.1 million, a decrease of $6.0 million, or 10%, compared to the same period in 2019, as a result of a 78 basis point decrease in the average yield, partially offset by a 7% increase in the average balance. The decreases in the average yield for the three and six month periods were primarily the result of decreases to the interest rate benchmarks to which the variable rate loans are tied and lower yields on recent loan originations. The increases in the average balance for the three and six month periods were related primarily to the addition of approximately $80.0 million of additional loans under the commercial real estate second loan program across all regions as part of relief measures provided to clients as a result of the COVID-19 pandemic.
Interest income on construction and land loans for the three months ended June 30, 2020 was $2.3 million, a decrease of $0.3 million, or 12%, compared to the same period in 2019, as a result of a 118 basis point decrease in the average yield, partially offset by a 15% increase in the average balance. For the six months ended June 30, 2020, construction and land interest income was $4.8 million, a decrease of $0.4 million, or 7%, compared to the same period in 2019, as a result of a 91 basis point decrease in the average yield, partially offset by a 13% increase in the average balance. The overall yields on construction and land loans fluctuate due to the short-term nature of the loans and the related impact of draws and payoffs. Due to the relatively low balances in construction and land loans, a large drawdown or paydown can result in a significant change in the overall yield depending on the interest rate of the particular loans that caused the balance changes. The decreases in the average yield for the three and six month periods were primarily the result of decreases to the interest rate benchmarks to which the variable rate loans are tied. The increases in the average balance for the three and six month periods were related primarily to line drawdowns across all regions in which the Bank operates.
Interest income on residential mortgage loans for the three months ended June 30, 2020 was $23.1 million, a decrease of $2.7 million, or 10%, from the same period in 2019, as a result of a 20 basis point decrease in the average yield and a 5% decrease in the average balance. For the six months ended June 30, 2020, residential mortgage interest income was $46.5 million, a decrease of $4.7 million, or 9%, compared to the same period in 2019, as a result of a 17 basis point decrease in the average yield and a 4% decrease in the average balance. The decreases in the average yield for the three and six month periods were primarily the result of decreases to the interest rate benchmarks to which the variable rate loans are tied and lower yields on recent loan originations. The decreases in the average balance for the three and six month periods were primary driven by the sale of $190.7 million of residential loans in the third and fourth quarters of 2019 and slowing originations in the first two quarters of 2020.
Interest income on home equity loans for the three months ended June 30, 2020 was $0.7 million, a decrease of $0.5 million, or 43%, compared to the same period in 2019, as a result of a 207 basis point decrease in the average yield and a 3% decrease in the average balance. For the six months ended June 30, 2020, home equity interest income was $1.6 million, a decrease of $0.7 million, or 29%, compared to the same period in 2019, as a result of a 133 basis point decrease in the average yield and a 4% decrease in the average balance. The decreases in the average yield for the three and six month periods were primarily the result of decreases to the interest rate benchmarks to which the variable rate loans are tied. The decreases in the
53

average balance for the three and six month periods were primarily driven by reduced demand as a result of economic uncertainty related to the COVID-19 pandemic.
Interest income on other consumer loans for the three months ended June 30, 2020 was $0.9 million, a decrease of $0.4 million, or 32%, compared to the same period in 2019, as a result of a 138 basis point decrease in the average yield while the average balance remained flat. For the six months ended June 30, 2020, other consumer interest income was $2.1 million, a decrease of $0.8 million, or 27%, compared to the same period in 2019, as a result of a 119 basis point decrease in the average yield and a 1% decrease in the average balance. The decreases in the average yield for the three and six month periods were primarily the result of decreases to the interest rate benchmarks to which the variable rate loans are tied, while the average balances have remained relatively flat driven by strategic decisions to slow new consumer loan growth.
Investment income for the three months ended June 30, 2020 was $6.0 million, a decrease of $0.8 million, or 11%, compared to the same period in 2019, as a result of a 33 basis point decrease in the average yield, partially offset by a 3% increase in the average balance. For the six months ended June 30, 2020, investment income was $12.7 million, a decrease of $0.9 million, or 7%, compared to the same period in 2019, as a result of a 21 basis point decrease in the average yield, partially offset by a 3% increase in the average balance. The decreases in the average yield for the three and six month periods were primarily due to the lower interest rate environment. The increases in the average balance for the three and six month periods were primarily due to additional liquidity generated from deposits.
Interest expense. Total interest expense for the three months ended June 30, 2020 was $9.9 million, a decrease of $11.4 million, or 54%, compared to the same period in 2019. For the six months ended June 30, 2020, total interest expense was $25.7 million, a decrease of $14.0 million, or 35%, compared to the same period in 2019. The decreases in interest expense for the three and six months periods were primarily driven by the impact of lower rates on interest-bearing deposits and borrowings and a decrease in the average volume of borrowings, partially offset by an increase in the volume of interest-bearing deposits.
Interest expense on interest-bearing deposits for the three months ended June 30, 2020 was $7.3 million, a decrease of $7.2 million, or 49%, compared to the same period in 2019, as a result of a 66 basis point decrease in the average rate, partially offset by an 8% increase in the average balance. For the six months ended June 30, 2020, interest expense on interest-bearing deposits was $20.1 million, a decrease of $8.4 million, or 30%, compared to the same period in 2019, as a result of a 42 basis point decrease in the average rate, partially offset by a 7% increase in the average balance. The decreases in the average rate paid on deposits for the three and six month periods were driven primarily by wholesale reductions in rates paid for deposit accounts given the recent decreases in interest rates. The increases in the average balance for interest-bearing deposits was primarily driven by increases in deposit products in all regions in which the Bank operates as clients hold additional cash deposit balances given the economic uncertainty surrounding the COVID-19 pandemic.
Interest paid on non-deposit interest-bearing liabilities for the three months ended June 30, 2020 was $2.5 million, a decrease of $4.2 million, or 62%, compared to the same period in 2019, as a result of a 121 basis point decrease in the average rate paid on FHLB borrowings and other borrowings, a 36% decrease in the average balance of FHLB borrowings and other borrowings, and a 118 basis point decrease in the average rate on junior subordinated debentures. For the six months ended June 30, 2020, interest paid on non-deposit interest-bearing liabilities was $5.6 million, a decrease of $5.6 million, or 50%, compared to the same period in 2019, as a result of an 83 basis point decrease in the average rate paid on FHLB borrowings and other borrowings, a 32% decrease in the average balance of FHLB borrowings and other borrowings, and a 100 basis point decrease in the average rate on junior subordinated debentures. The decreases in the average rates paid were primarily driven by the decreases in benchmark interest rates to which the instruments are tied. The decreases in the average balance for non-deposit interest-bearing liabilities were primarily driven by increases in deposits, reducing the need for higher-cost borrowings.
Provision/(credit) for loan losses. The Company recorded a provision for loan losses of $22.6 million for the three months ended June 30, 2020, compared to a provision for loan losses of $1.4 million for the same period in 2019. For the six months ended June 30, 2020, the Company recorded a provision for loan losses of $39.6 million, compared to a credit to the provision for loan losses of $0.1 million for the same period in 2019. The provision for loan losses was primarily driven by changes in economic forecasts in both the first and second quarters of 2020 to reflect deteriorating economic conditions related to the COVID-19 pandemic and a change in the weight of forecast scenarios used to be weighted more heavily to the downside scenario, combined with an increase in qualitative factors to account for incremental risk not included in the quantitative model. Under the CECL methodology, the provision for loan loss required may be significantly affected by reasonable and supportable economic forecasts.
The provision/(credit) for loan losses is determined as a result of the required level of the allowance for loan losses, estimated by management, which reflects the inherent risk of loss in the loan portfolio as of the balance sheet dates. The Company estimates credit losses on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The quantitative model utilizes a factor-based approach to estimate expected credit losses using probability of default and loss given default, which are derived from a selected peer group's historical default and loss experience. The model estimates expected credit losses using loan level data over the contractual life of the exposure,
54

considering the effect of prepayments and curtailments. Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period, beyond which is a reversion to the Company's historical long-run average. Qualitative factors are estimated by management and include trends in problem loans, strength of management, concentration risk and underwriting standards. For further details, see “Loan Portfolio and Credit Quality” below. For periods disclosed prior to the adoption of ASU 2016-13 as of January 1, 2020, the Allowance for loan losses was determined under the incurred loss model. Refer to "Note 1: Basis of Presentation and Summary of Significant Account Policies" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the methodology.
Fees and other income
Three months ended June 30,$
Change		% ChangeSix months ended June 30,$
Change		%
Change
2020201920202019
(In thousands, except percentages)
Wealth management and trust fees$17,261  $18,912  $(1,651) (9)%$35,632  $37,970  $(2,338) (6)%
Investment management fees1,770  2,455  (685) (28)%3,695  5,105  (1,410) (28)%
Other banking fee income2,395  2,867  (472) (16)%4,885  5,366  (481) (9)%
Gain on sale of loans, net204  58  146  nm304  131  173  nm
Total core fees and income21,630  24,292  (2,662) (11)%44,516  48,572  (4,056) (8)%
Total other income1,032  88  944  nm(333) 1,056  (1,389) nm
Total fees and other income$22,662  $24,380  $(1,718) (7)%$44,183  $49,628  $(5,445) (11)%
_____________________
nm = not meaningful
Total fees and other income for the three months ended June 30, 2020 decreased $1.7 million, or 7%, compared to the same period in 2019 driven by lower Wealth management and trust fees and Investment management fees, partially offset by higher Total other income. The decreases in Wealth management and trust fees and Investment management fees were driven by the impact of lower equity market values on AUM at the end of the first quarter of 2020, as many accounts are billed in arrears. The increase in Total other income was driven primarily by a favorable mark-to-market adjustment on deferred compensation in the second quarter of 2020.
Total fees and other income for the six months ended June 30, 2020 decreased $5.4 million, or 11%, compared to the same period in 2019 driven by lower Wealth management and trust fees, Investment management fees, and Total other income. The decreases in Wealth management and trust fees and Investment management fees were driven by the impact of lower equity market values on AUM and net outflows. Total AUM managed or advised by the Company was $16.0 billion at June 30, 2020, a decrease of $0.2 billion, or 2%, compared to June 30, 2019. The decrease was primarily driven by the impact of net outflows of $0.2 billion for the twelve months ended June 30, 2020. The decrease in Total other income for the six months ended June 30, 2020 was driven primarily by the impact of mark-to-market adjustments on derivatives and deferred compensation.
Operating Expense
Three months ended June 30,$
Change		% ChangeSix months ended June 30,$
Change		%
Change
2020201920202019
(In thousands, except percentages)
Salaries and employee benefits$33,937  $32,706  $1,231  4 %$69,033  $68,432  $601  1 %
Occupancy and equipment7,560  7,852  (292) (4)%15,206  16,200  (994) (6)%
Information systems7,113  5,137  1,976  38 %13,838  10,997  2,841  26 %
Professional services3,446  3,313  133  4 %7,047  6,873  174  3 %
Marketing and business development2,313  1,934  379  20 %4,203  3,019  1,184  39 %
Amortization of intangibles702  672  30  4 %1,417  1,344  73  5 %
FDIC insurance767  585  182  31 %767  1,245  (478) (38)%
Restructuring —  —  —  nm—  1,646  (1,646) (100)%
Other5,615  3,460  2,155  62 %10,850  6,456  4,394  68 %
Total operating expense$61,453  $55,659  $5,794  10 %$122,361  $116,212  $6,149  5 %
_____________________
nm = not meaningful
55

Total operating expense for the three months ended June 30, 2020 increased $5.8 million, or 10%, to $61.5 million, compared to the same period in 2019, primarily due to increases in Other expense, Information systems expense, and Salaries and employee benefits expense. Total operating expense for the six months ended June 30, 2020 increased $6.1 million, or 5%, compared to the same period in 2019, primarily due to increases in Other expense, Information systems expense, Marketing and business development expense, and Salaries and employee benefits expense, partially offset by decreases in Restructuring expense, Occupancy and equipment expense, and FDIC insurance expense.
•Other expense increased $2.2 million, or 62%, and $4.4 million, or 68%, for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019. The increases were primarily driven by increases to the reserve for unfunded loan commitments of $2.8 million and $4.7 million for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019. The increases to the reserve were driven by deteriorating economic conditions related to the COVID-19 pandemic.
•Information systems expense increased $2.0 million, or 38%, and $2.8 million, or 26%, for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019. The increases were primarily driven by new information technology initiatives placed into service during the fourth quarter of 2019 and an increase in costs related to building out remote working capabilities in the second quarter of 2020.
•Marketing and business development expense increased $0.4 million, or 20%, and $1.2 million, or 39%, for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019. The increases were primarily driven by new advertising campaigns and timing of spend.
•Salaries and employee benefits expense increased $1.2 million, or 4%, and $0.6 million, or 1%, for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019. The increases were primarily driven by severance expense and an unfavorable mark-to-market adjustment on deferred compensation in the second quarter of 2020, partially offset by decreased variable compensation throughout 2020.
•Restructuring expense decreased for the six months ended June 30, 2020, compared to the same period of 2019. In the first quarter of 2019, there was a restructuring expense of $1.6 million related to executive departures.
•Occupancy and equipment expense decreased $0.3 million, or 4%, and $1.0 million, or 6%, for the three and six months ended June 30, 2020, respectively, compared to the same periods in 2019. The decreases were primarily driven by decreases in depreciation expense on leasehold improvements and rent expense due to lease expirations that were not renewed.
•FDIC insurance decreased $0.5 million, or 38%, for the six months ended June 30, 2020, compared to the same period in 2019. The decrease was driven by an FDIC insurance assessment credit received in the first quarter of 2020. In January 2019, the Bank received notification from the FDIC that it was eligible for small bank assessment credits of $2.0 million because the FDIC's Deposit Insurance Fund reserve ratio exceeded the target level. The full $2.0 million of credits has been utilized.
Income tax expense. Income tax expense for the six months ended June 30, 2020 was $0.9 million, compared to $10.3 million for the same period in 2019. The effective tax rate for the six months ended June 30, 2020 was (60.9)%, compared to an effective tax rate of 20.9% for the same period of 2019. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 9: Income Taxes” for further detail.
56

Financial Condition
Condensed Consolidated Balance Sheets and Discussion
 June 30,
2020		December 31, 2019Increase/
(decrease)		%
Change
 (In thousands, except percentages)
Assets:
Total cash and investments$1,291,391  $1,376,863  $(85,472) (6)%
Loans held for sale9,786  7,386  2,400  32 %
Total loans7,332,954  6,976,704  356,250  5 %
Less: Allowance for loan losses89,324  71,982  17,342  24 %
Net loans7,243,630  6,904,722  338,908  5 %
Goodwill and intangible assets, net66,542  67,959  (1,417) (2)%
Right-of-use assets94,143  102,075  (7,932) (8)%
Total other assets453,414  371,496  81,918  22 %
Total assets$9,158,906  $8,830,501  $328,405  4 %
Liabilities and Equity:
Deposits$7,427,397  $7,241,476  $185,921  3 %
Total borrowings579,299  510,590  68,709  13 %
Lease liabilities108,234  117,214  (8,980) (8)%
Total other liabilities218,771  140,820  77,951  55 %
Total liabilities8,333,701  8,010,100  323,601  4 %
Redeemable noncontrolling interests (“RNCI”)—  1,383  (1,383) (100)%
Total shareholders’ equity825,205  819,018  6,187  1 %
Total liabilities, RNCI and shareholders’ equity$9,158,906  $8,830,501  $328,405  4 %
Total assets. Total assets increased $328.4 million, or 4%, to $9.2 billion at June 30, 2020 from $8.8 billion at December 31, 2019, primarily driven by an increase in Net loans and Total other assets, partially offset by a decrease in Total cash and investments.
Total cash and investments. Total cash and investments (consisting of Cash and cash equivalents, Investment securities available-for-sale, Investment securities held-to-maturity, Equity securities at fair value, and Stock in the Federal Home Loan Bank and Federal Reserve Bank) decreased $85.5 million, or 6%, from December 31, 2019. The decrease was primarily driven by a decrease of $113.5 million in Cash and cash equivalents, partially offset by an increase of $30.4 million in Investment securities available-for-sale and Equity securities at fair value. The Company utilized cash to partially fund loan growth. Total cash and investments represent 14% of total assets at June 30, 2020 and 16% of total assets at December 31, 2019.
The majority of the investments held by the Company are held by the Bank. The Bank’s asset-liability management policy requires management to maintain a portfolio of securities which will provide liquidity necessary to facilitate funding of loans, to cover deposit fluctuations, and to mitigate the Bank’s overall balance sheet exposure to interest rate risk, while at the same time earning a satisfactory return on the funds invested. The securities in which the Bank may invest are subject to regulation and are generally limited to securities that are considered “investment grade.”
Investment maturities, redemptions, principal payments, and sales of securities, if any, net of purchases (includes Investment securities available-for-sale, Investment securities held-to-maturity and Equity securities at fair value), provided $2.9 million of cash proceeds during the six months ended June 30, 2020, compared to $65.4 million in the same period in 2019. The timing of sales and reinvestments is based on various factors, including management’s evaluation of interest rate trends, credit risk, and the Company’s liquidity. The Company’s available-for-sale investment portfolio carried a total of $43.3 million of unrealized gains and $0.2 million of unrealized losses at June 30, 2020, compared to $15.0 million of unrealized gains and $3.6 million of unrealized losses at December 31, 2019. The increase in the total net unrealized gains is primarily driven by the current interest rate environment.
No impairment losses were recognized through earnings related to investment securities during the six months ended June 30, 2020 and 2019. The Company does not consider these investments to be credit impaired as the decline in fair value on investments is primarily attributed to changes in interest rates and not due to credit quality or other risk factors.
Additionally, at June 30, 2020 and December 31, 2019, the Company held $42.5 million and $48.2 million, respectively, of Investment securities held-to-maturity at amortized cost. All of the held-to-maturity securities held at June 30, 2020 were mortgage-backed securities guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
57

See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 4: Investments” for further details of the Company’s investment securities.
Loans held for sale. Loans held for sale at June 30, 2020 increased $2.4 million, or 32%, to $9.8 million from the balance at December 31, 2019. The balance of Loans held for sale usually relates to the timing and volume of residential loans originated for sale and the ultimate sale transaction, which is typically executed within a short time following the loan origination. From time to time, the Company may also sell loans that have been held in the loan portfolio. The sale of such loans may improve the Bank’s liquidity and capital position or may provide the Bank additional flexibility for more profitable and strategic future lending opportunities.
Goodwill and intangible assets, net. Goodwill and intangible assets, net at June 30, 2020 decreased $1.4 million, or 2%, to $66.5 million from the balance at December 31, 2019, due to Amortization of intangible assets. There was no change to Goodwill during the six months ended June 30, 2020.
Goodwill and indefinite-lived intangible assets are subject to annual impairment tests, or more frequently, if there is indication of impairment, based on guidance in ASC 350, Intangibles-Goodwill and Other. Indefinite-lived intangible assets such as advisory contracts are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”).
Management performed its annual goodwill and indefinite-lived intangible asset impairment testing during the fourth quarter of 2019. The estimated fair value of Boston Private Wealth exceeded its carrying value. Management will perform the annual goodwill and indefinite-lived intangible asset impairment testing for this year in the fourth quarter of 2020. Management determined that there was not a trigger event in the second quarter of 2020 from the economic conditions related to the COVID-19 pandemic, and will continually monitor for triggering events that would warrant testing prior to the fourth quarter of 2020.
Right-of-use assets. Right-of-use ("ROU") assets at June 30, 2020 decreased $7.9 million, or 8%, to $94.1 million compared to the balance at December 31, 2019 due to amortization of ROU assets and lease expirations that were not renewed in the second quarter of 2020. Upon adoption of the lease accounting standard, ASU 2016-02, the Company recognized $108.5 million of ROU assets on the face of the Consolidated Balance Sheets as of January 1, 2019. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 14: Lease Accounting” for further details.
Total other assets. Total other assets, as presented in the table above, consists of the following line items from the Consolidated Balance Sheets: Premises and equipment, net; Fees receivable; Accrued interest receivable; Deferred income taxes, net; and Other assets. Total other assets at June 30, 2020 increased $81.9 million, or 22%, to $453.4 million from the balance at December 31, 2019. These changes resulted from the following factors:
•Other assets, which consist primarily of bank-owned life insurance, investment in partnerships, prepaid expenses, interest rate derivatives, and other receivables increased $84.3 million, or 29%, to $371.7 million at June 30, 2020 from $287.3 million at December 31, 2019. The increase was primarily driven by an increase in the market value of derivative assets, partially offset by an increase in the market value of derivative liabilities in Other liabilities.
•Deferred income taxes, net, decreased $2.3 million, or 20%, to $9.1 million at June 30, 2020 from $11.4 million at December 31, 2019. The decrease was primarily due to the current year tax effect of other comprehensive income of $9.0 million and the tax effect of the adoption of ASU 2016-13 of $5.5 million, partially offset by the deferred tax benefit of $12.2 million related to the additional allowance for loan losses.
Deposits. Deposits at June 30, 2020 increased $185.9 million, or 3%, compared to the balance at December 31, 2019. The increase in deposits in the second quarter of 2020 was primarily due to an increase in demand deposits driven by clients maintaining adequate cash reserves during an economic downturn and the funding of PPP loans into deposit accounts in the second quarter of 2020. Average total deposits for the three months ended June 30, 2020 increased 10% from the same period in 2019 as shown in the average balance sheet. For further details, see “Results of Operations” above.
Deposits are the principal source of the Bank’s funds for use in lending, investments, and liquidity. Deposit levels can fluctuate from quarter to quarter as a result of large short-term transactions by commercial clients. Seasonality can also affect the deposit balances. The Company has historically seen seasonal outflows of deposits in the second quarter of each year related to tax payments. Given the delay of the federal tax payment date in 2020, the Company anticipates to see this impact of seasonality in the third quarter of 2020.
As a general matter, deposits are a cheaper source of funds than borrowings, because interest rates paid for deposits are typically less than interest rates charged for borrowings. If, as a result of general economic conditions, market interest rates, competitive pressures, or otherwise, the amount of deposits at the Bank decreases, the Bank may be limited in its ability to grow its loan portfolio or may have to rely more heavily on higher cost borrowings as a source of funds in the future.
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The following table presents the composition of the Company’s deposits at June 30, 2020 and December 31, 2019:
June 30, 2020December 31, 2019
Balanceas a % of totalBalanceas a % of total
(In thousands, except percentages)
Demand deposits (non-interest bearing)$2,293,864  32 %$1,971,013  27 %
NOW (1)686,395  9 %578,527  8 %
Savings72,261  1 %67,673  1 %
Money market (1)3,753,228  51 %3,969,330  55 %
Certificates of deposit less than $100,000 (1)109,507  1 %145,226  2 %
Certificates of deposit $100,000 to $250,000105,584  1 %94,095  1 %
Certificates of deposit more than $250,000406,558  5 %415,612  6 %
Total deposits$7,427,397  100 %$7,241,476  100 %
_____________________
(1) Includes brokered deposits of $510.2 million and $422.4 million at June 30, 2020 and December 31, 2019, respectively.
Total borrowings. Total borrowings (consisting of Securities sold under agreements to repurchase, FHLB borrowings, and Junior subordinated debentures) at June 30, 2020 increased $68.7 million, or 13%, compared to the balance at December 31, 2019, primarily driven by an increase in FHLB borrowings, partially offset by a decrease in repurchase agreements.
•FHLB borrowings increased $75.5 million, or 22%, to $426.3 million at June 30, 2020 from $350.8 million at December 31, 2019. The increase was primarily due to asset liability management considerations to fund the balance sheet, specifically funding for loan growth, as well as to manage interest rate risk. At December 31, 2019, the Company had a higher amount of short-term deposits that reduced the need for FHLB borrowings. FHLB borrowings are generally used to provide additional funding for loan growth when it is in excess of deposit growth and to manage interest rate risk, but can also be used as an additional source of liquidity for the Bank.
•Repurchase agreements decreased $6.8 million, or 13%, to $46.6 million at June 30, 2020 from $53.4 million at December 31, 2019. Repurchase agreements are generally linked to commercial demand deposit accounts with an overnight sweep feature.
Lease liabilities. Lease liabilities decreased $9.0 million, or 8%, to $108.2 million at June 30, 2020 compared to the balance at December 31, 2019 due to lease expirations that were not renewed in the second quarter of 2020. Upon adoption of the lease accounting standard discussed above, the Company recognized $124.1 million of lease liabilities on the face of the Consolidated Balance Sheets as of January 1, 2019. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 14: Lease Accounting” for further details of the Company’s leases.
Total other liabilities. Total other liabilities, which consist primarily of accrued interest, accrued employee benefits, interest rate derivatives, the unfunded portion of partnership investment commitments, and other accrued expenses, increased $78.0 million, or 55%, to $218.8 million at June 30, 2020, compared to the balance at December 31, 2019. The increase was primarily driven by increases in the market value adjustment on derivative liabilities and the reserve for unfunded loan commitments in 2020.
Loan Portfolio and Credit Quality
Total loans. Total loans increased $356.3 million, or 5%, to $7.3 billion, or 80% of total assets, as of June 30, 2020, from $7.0 billion, or 79% of total assets, as of December 31, 2019. The following table presents a summary of the loan portfolio based on the portfolio segment and changes in balances as of the dates indicated:
 June 30,
2020		December 31, 2019$ Change% Change
 (In thousands)
Commercial and industrial$565,748  $694,034  $(128,286) (18)%
Paycheck Protection Program370,034  —  370,034  n/a
Commercial tax-exempt419,264  447,927  (28,663) (6)%
Commercial real estate2,676,708  2,551,274  125,434  5 %
Construction and land240,211  225,983  14,228  6 %
Residential2,859,627  2,839,155  20,472  1 %
Home equity84,588  83,657  931  1 %
Consumer and other116,774  134,674  (17,900) (13)%
Total loans$7,332,954  $6,976,704  $356,250  5 %
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The Bank specializes in lending to individuals, real estate investors, and middle market businesses, including corporations, partnerships, associations and nonprofit organizations. Loans made by the Bank to individuals may include residential mortgage loans and mortgage loans on investment or vacation properties, unsecured and secured personal lines of credit, home equity loans, and overdraft protection. Loans made by the Bank to businesses include commercial and mortgage loans, revolving lines of credit, working capital loans, equipment financing, community lending programs, and construction and land loans. The types and sizes of loans the Bank originates are limited by regulatory requirements.
Beginning in the first quarter of 2020, the Company made a change to the loan portfolio segmentation in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given their different underlying risk characteristics. Beginning in the second quarter of 2020, the Company also added a segment for PPP loans originated. For the period ended December 31, 2019, there were no such loans as the SBA initiated the program in the first quarter of 2020 in response to the COVID-19 pandemic.
The Bank’s loans are affected by the economic and real estate markets in which they are located. Generally, commercial real estate, construction, and land loans are affected more than residential loans in an economic downturn. The ability to grow the loan portfolio is traditionally partially related to the Bank's ability to increase deposit levels. If, as a result of general economic conditions, market interest rates, competitive pressures, or otherwise, deposit levels at the Bank decrease relative to its overall banking operations, the Bank may be limited in its ability to grow its loan portfolio or may need to increase higher cost borrowings to fund growth in the loan portfolio.
The Bank’s commercial real estate loan portfolio, the largest portfolio segment after residential, includes loans secured by the following types of collateral as of the dates indicated:
 June 30, 2020December 31, 2019
 (In thousands)
 Multifamily and residential investment $917,642  $899,583  
 Retail621,499  631,796  
 Office and medical 547,555  487,133  
 Manufacturing, industrial, and warehouse250,069  223,913  
 Hospitality 160,097  145,195  
 Other 179,846  163,654  
Total commercial real estate loans$2,676,708  $2,551,274  
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Geographic concentration. The following tables present the Company’s outstanding loan balance concentrations as of the dates indicated based on the location of the regional offices to which they are attributed.
As of June 30, 2020
New EnglandNorthern CaliforniaSouthern CaliforniaTotal
AmountPercentAmountPercentAmountPercentAmountPercent
(In thousands, except percentages)
Commercial and industrial $416,578  6 %$56,475  1 %$92,695  1 %$565,748  8 %
Paycheck Protection Program193,910  3 %119,073  1 %57,051  1 %370,034  5 %
Commercial tax-exempt 296,862  4 %111,629  2 %10,773  — %419,264  6 %
Commercial real estate 1,105,423  15 %833,984  11 %737,301  10 %2,676,708  36 %
Construction and land 152,673  2 %38,926  — %48,612  1 %240,211  3 %
Residential 1,502,486  20 %558,940  8 %798,201  11 %2,859,627  39 %
Home equity 55,685  1 %17,627  — %11,276  — %84,588  1 %
Consumer and other 57,986  1 %4,601  — %54,187  1 %116,774  2 %
Total loans (1)$3,781,603  52 %$1,741,255  23 %$1,810,096  25 %$7,332,954  100 %
As of December 31, 2019
New EnglandNorthern CaliforniaSouthern CaliforniaTotal
AmountPercentAmountPercentAmountPercentAmountPercent
(In thousands, except percentages)
Commercial and industrial $558,701  8 %$46,330  1 %$89,003  1 %$694,034  10 %
Commercial tax-exempt 338,737  5 %98,266  1 %10,924  — %447,927  6 %
Commercial real estate 1,027,133  15 %769,777  11 %754,364  11 %2,551,274  37 %
Construction and land 152,100  2 %31,484  — %42,399  1 %225,983  3 %
Residential 1,540,592  22 %558,307  8 %740,256  11 %2,839,155  41 %
Home equity 55,226  1 %17,357  — %11,074  — %83,657  1 %
Consumer and other 104,258  2 %11,265  — %19,151  — %134,674  2 %
Total loans (1)$3,776,747  55 %$1,532,786  21 %$1,667,171  24 %$6,976,704  100 %
________________________
(1)Regional percentage totals may not foot due to rounding.
Allowance for loan losses. The allowance for loan losses is reported as a reduction of outstanding loan balances and totaled $89.3 million and $72.0 million as of June 30, 2020 and December 31, 2019, respectively.
The allowance for loan losses increased $17.3 million to $89.3 million, or 1.22% of total loans, as of June 30, 2020 from $72.0 million, or 1.03% of total loans, as of December 31, 2019. The increase in the allowance for loan losses in the first two quarters of 2020 was primarily driven by changes in economic forecasts in both the first quarter and second quarter of 2020 to reflect deteriorating economic conditions related to the COVID-19 pandemic and a change in the weight of forecast scenarios used to be weighted more heavily to the downside scenario, combined with an increase in qualitative factors to account for incremental risk not included in the quantitative model.
The decrease in the allowance for loan losses of $20.4 million on adoption of ASU 2016-13 was driven primarily by the portfolio composition including the short-term nature of Commercial real estate loans, estimated prepayments, a change to the loan portfolio segmentation in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given the different underlying risk characteristics, and the reasonable and supportable economic forecasts at the time of adoption. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 7: Allowance for Loan Losses” for an analysis of the Company’s allowance for loan losses.
Prior to the adoption of ASU 2016-13, the Company’s allowance for loan losses was comprised of three primary components (general reserves, allocated reserves on non-impaired special mention and substandard loans, and allocated reserves on impaired loans). Refer to "Note 1: Basis of Presentation and Summary of Significant Account Policies" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for details on that methodology.
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The following table presents a summary of loans charged off, net of recoveries, by geography for the periods indicated. The geography assigned to the data is based on the location of the regional offices to which the loans are attributed.
Three months ended June 30,Six months ended June 30,
2020201920202019


(In thousands)
Net loans (charged off)/recovered:
New England$7  $31  $22  $253  
Northern California3  20  125  38  
Southern California(1,501) (161) (1,986) (473) 
Total net loans (charged off)/ recovered$(1,491) $(110) $(1,839) $(182) 
There were $1.5 million in net charge offs recorded in the second quarter of 2020 compared to $0.1 million of net charge-offs for the same period of 2019.
Nonperforming assets. The Company’s nonperforming assets include nonaccrual loans and OREO, if any. OREO consists of real estate acquired through foreclosure proceedings and real estate acquired through acceptance of deeds in lieu of foreclosure. As of June 30, 2020, nonperforming assets totaled $25.6 million, or 0.28% of total assets, an increase of $9.5 million, or 59%, compared to $16.1 million, or 0.18% of total assets, as of December 31, 2019.
The Bank’s policy is to discontinue the accrual of interest on a loan when the collectability of principal or interest in accordance with the contractual terms of the loan agreement is in doubt. Despite a loan having a current payment status, if the Bank has reason to believe it may not collect all principal and interest on the loan in accordance with the related contractual terms, the Bank will generally discontinue the accrual of interest income and will apply any future interest payments received to principal. Of the $25.6 million of loans on nonaccrual status as of June 30, 2020, $13.4 million, or 52%, had a current payment status, $1.7 million, or 7%, were 30-89 days past due, and $10.5 million, or 41%, were 90 days or more past due. Of the $16.1 million of loans on nonaccrual status as of December 31, 2019, $9.8 million, or 61%, had a current payment status, $1.2 million, or 7%, were 30-89 days past due, and $5.1 million, or 32%, were 90 days or more past due.
The Bank continues to evaluate the underlying collateral of each nonperforming loan and pursue the collection of interest and principal. Where appropriate, the Bank obtains updated appraisals on collateral. Reductions in fair values of the collateral for nonaccrual loans, if they are collateral dependent, could result in additional future provision for loan losses depending on the timing and severity of the decline. See Part I. Item 1. “Financial Statements and Supplementary Data - Note 6: Loans Portfolio and Credit Quality” for further information on nonperforming loans.
Delinquencies. The past due status of a loan is determined in accordance with its contractual repayment terms. All loan types are reported past due when one scheduled payment is due and unpaid for 30 days or more. Loans 30-89 days past due decreased $20.4 million, or 79%, to $5.5 million as of June 30, 2020 from $25.9 million as of December 31, 2019. Loan delinquencies can be attributed to many factors, such as continuing weakness in, or deteriorating, economic conditions in the region in which the collateral is located, the loss of a tenant or lower lease rates for commercial borrowers, or the loss of income for consumers and the resulting liquidity impacts on the borrowers. The economic conditions created by the COVID-19 pandemic represent an example of an event that could cause an increase in delinquencies in future quarters. The Bank has instituted programs such as deferments, forbearances, and the commercial real estate second mortgage program to help borrowers who have been impacted by the COVID-19 pandemic. Further deterioration in the credit condition of these delinquent loans could lead to the loans going to nonaccrual status and/or being downgraded. Downgrades would generally result in additional charge offs or provision for loan losses. Past due loans may be included with accruing substandard loans.
In certain instances, although very infrequently, loans that have become 90 days or more past due may remain on accrual status if the value of the collateral securing the loan is sufficient to cover principal and interest and the loan is in the process of collection. There was one commercial real estate loan with an immaterial balance 90 days or more past due, but still accruing, as of June 30, 2020 and no loans 90 days or more past due, but still accruing, as of December 31, 2019.
Impaired loans. Impaired loans individually evaluated for impairment in the allowance for loan losses totaled $27.2 million as of June 30, 2020, an increase of $8.0 million, or 42%, compared to $19.2 million as of December 31, 2019. As of June 30, 2020, $1.1 million of the individually evaluated impaired loans had $0.2 million in specific reserve allocations. The remaining $26.1 million of individually evaluated impaired loans did not have specific reserve allocations due to the adequacy of collateral, prior charge-offs taken, interest collected and applied to principal, or a combination of these items. As of December 31, 2019, $1.1 million of individually evaluated impaired loans had $0.2 million in specific reserve allocations, and the remaining $18.1 million of individually evaluated impaired loans did not have specific reserve allocations.
The Bank may, under certain circumstances, restructure loans as a concession to borrowers who are experiencing financial difficulty. Such loans are classified as TDRs and are included in impaired loans. TDRs typically result from the Bank’s loss mitigation activities which, among other things, could include rate reductions, payment extensions, and/or principal forgiveness. As of June 30, 2020 and December 31, 2019, TDRs totaled $14.8 million and $12.6 million, respectively. As of
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June 30, 2020, $8.9 million of the $14.8 million in TDRs were on accrual status. As of December 31, 2019, $7.1 million of the $12.6 million in TDRs were on accrual status.
In the first quarter of 2020, in response to the COVID-19 pandemic, the Company initiated a mortgage deferment program under which principal and interest payments on qualifying loans are generally deferred for initially three months and the loan term is extended three months and if requested, can be deferred for an additional three month period. As of June 30, 2020, 336 residential and home equity loans with a current outstanding principal balance of approximately $214.5 million were processed under this deferment program.
Potential Problem Loans. Loans that evidence weakness or potential weakness related to repayment history, the borrower’s financial condition, or other factors are reviewed by the Bank’s management to determine if the loan should be adversely classified. Delinquent loans may or may not be adversely classified depending upon management’s judgment with respect to each individual loan. The Bank classifies certain loans as “substandard,” “doubtful,” or “loss” based on criteria consistent with guidelines provided by banking regulators. Potential problem loans consist of accruing classified loans where known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present loan repayment terms and which may result in classification of such loans as nonperforming at some time in the future. Management cannot predict the extent to which economic conditions may worsen or other factors which may impact borrowers and the potential problem loans. Triggering events for loan downgrades include updated appraisal information, inability of borrowers to cover debt service payments, loss of tenants, notification by the tenant of non-renewal of lease or inability of tenants to pay rent, inability of borrowers to sell completed construction projects, and the inability of borrowers to sell properties. Accordingly, there can be no assurance that other loans will not become 90 days or more past due, be placed on nonaccrual, be restructured, or require increased allowance coverage and provision for loan losses.
As of June 30, 2020, the Bank has identified $88.6 million in potential problem loans, an increase of $30.7 million, or 53% compared to $57.9 million as of December 31, 2019. The increase in potential problem loans during the first six months of 2020 was driven by three borrowing relationships in the New England region: a commercial and industrial relationship in the amount of $13.2 million, a Commercial tax-exempt relationship totaling $4.5 million, and a Commercial real estate relationship in the amount of $10.5 million. Numerous factors impact the level of potential problem loans, including economic conditions and real estate values. These factors affect the borrower’s liquidity and, in some cases, the borrower’s ability to comply with loan covenants such as debt service coverage. For instance, when there is a loss of a major tenant in a commercial real estate building, the appraised value of the building generally declines. Loans may be downgraded when this occurs as a result of the additional risk to the borrower in obtaining a new tenant in a timely manner and negotiating a lease with similar or better terms than the previous tenant. In many cases, these loans are still current and paying as agreed, although future performance may be impacted.
The following table presents a roll-forward of nonaccrual loans for the three and six months ended June 30, 2020 and 2019:
As of and for the three months ended June 30,As of and for the six months ended June 30,
2020201920202019
(In thousands)
Nonaccrual loans, beginning of period$24,314  $12,019  $16,103  $14,057  
Transfers in to nonaccrual status6,037  5,911  17,373  6,258  
Transfers out to accrual status(3,005) (171) (5,235) (204) 
Charge-offs (1)(1,546) (195) (2,074) (759) 
Paid off/paid down(196) (409) (563) (2,197) 
Nonaccrual loans, end of period$25,604  $17,155  $25,604  $17,155  
___________________
(1) During the second quarter of 2020, one nonaccrual loan was charged-off and transferred to OREO with a value of zero. As of June 30, 2020 it represents the only asset in OREO.
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The following table presents a summary of credit quality by geography, based on the location of the regional offices:
June 30,
2020		December 31, 2019
 (In thousands)
Nonaccrual loans:
New England$11,630  $9,764  
Northern California9,459  319  
Southern California4,515  6,020  
Total nonaccrual loans$25,604  $16,103  
Loans 30-89 days past due and accruing: (1)
New England $4,214  $20,507  
Northern California111  2,593  
Southern California1,210  2,845  
Total loans 30-89 days past due$5,535  $25,945  
Accruing classified loans: (2)
New England$53,124  $20,428  
Northern California21,712  24,946  
Southern California13,750  12,548  
Total accruing classified loans$88,586  $57,922  
___________________
(1) There was one commercial real estate loan with a balance less than $0.1 million that was 90+ days past due and accruing at June 30, 2020.
(2) Accruing Classified may include both Substandard and Doubtful classifications.
The following table presents a summary of credit quality by loan type. The loan type assigned to the credit quality data is based on the purpose of the loan.
 June 30,
2020		December 31, 2019
 (In thousands)
Nonaccrual loans:
Commercial and industrial$3,649  $582  
Paycheck Protection Program—  —  
Commercial tax-exempt—  —  
Commercial real estate5,285  —  
Construction and land—  —  
Residential16,394  13,993  
Home equity195  1,525  
Consumer and other81  3  
Total nonaccrual loans$25,604  $16,103  
Loans 30-89 days past due and accruing: (1)
Commercial and industrial$3,101  $828  
Paycheck Protection Program—  —  
Commercial tax-exempt—  —  
Commercial real estate925  1,420  
Construction and land—  —  
Residential747  20,171  
Home equity740  369  
Consumer and other22  3,157  
Total loans 30-89 days past due$5,535  $25,945  
Accruing classified loans: (2)
Commercial and industrial$39,895  $24,987  
Paycheck Protection Program—  —  
Commercial tax-exempt8,478  4,052  
Commercial real estate34,935  23,558  
Construction and land—  —  
Residential4,228  4,253  
Home equity1,050  1,072  
Consumer and other—  —  
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Total accruing classified loans$88,586  $57,922  
___________________
(1) There was one commercial real estate loan with a balance less than $0.1 million that was 90+ days past due and accruing at June 30, 2020.
(2) Accruing Classified may include both Substandard and Doubtful classifications.
Liquidity
Liquidity is defined as the Company’s ability to generate adequate cash to meet its needs for day-to-day operations and material long and short-term commitments. Liquidity risk is the risk of potential loss if the Company were unable to meet its funding requirements at a reasonable cost. The Company manages its liquidity based on demand, commitments, specific events and uncertainties to meet current and future financial obligations of a short-term nature. The Company’s objective in managing liquidity is to respond to the needs of depositors and borrowers as well as earnings enhancement opportunities in a changing marketplace.
The following table presents certain liquidity measurements as of the dates indicated:
June 30,
2020		December 31, 2019$
Change		%
Change
(In thousands, except percentages)
Cash and cash equivalents$179,027  $292,479  $(113,452) (39)%
Investment securities available-for-sale 1,002,970  978,284  24,686  3 %
Equity securities at fair value24,492  18,810  5,682  30 %
Less: Securities pledged against current borrowings and derivatives(118,611) (88,444) (30,167) (34)%
Cash and investments$1,087,878  $1,201,129  $(113,251) (9)%
As a percent of assets12 %14 %
Access to additional FHLB borrowings1,184,166  1,432,603  (248,437) (17)%
Total liquidity$2,272,044  $2,633,732  $(361,688) (14)%
As a percent of assets25 %30 %
As a percent of deposits31 %36 %
At June 30, 2020, the Company’s Cash and cash equivalents amounted to $179.0 million. The Holding Company’s Cash and cash equivalents amounted to $45.0 million at June 30, 2020. Management believes that the Holding Company and its affiliates, including the Bank, have adequate liquidity to meet their commitments for the foreseeable future.
Management is responsible for establishing and monitoring liquidity targets as well as strategies to meet these targets. At June 30, 2020, consolidated Cash and cash equivalents, Investment securities available-for-sale and Equity securities at fair value less securities pledged against current borrowings and derivatives amounted to $1.1 billion, or 12% of total assets, compared to $1.2 billion, or 14% of total assets, at December 31, 2019. Future loan growth may depend upon the Company’s ability to grow its core deposit levels. The Bank also has the ability to access additional borrowing under the PPPLF by pledging funded PPP loans if needed. In addition, the Company has access to available borrowings through the FHLB totaling $1.2 billion at June 30, 2020 and $1.4 billion at December 31, 2019. Combined, this liquidity totals $2.3 billion, or 25% of assets and 31% of deposits, as of June 30, 2020, compared to $2.6 billion, or 30% of assets and 36% of deposits, at December 31, 2019.
The Bank has various internal policies and guidelines regarding liquidity, both on- and off-balance sheet, loans to deposits ratio, and limits on the use of wholesale funds. These policies and/or guidelines require certain minimum or maximum balances or ratios be maintained at all times. In light of the provisions in the Bank’s internal liquidity policies and guidelines, the Bank will carefully manage the amount and timing of future loan growth along with its relevant liquidity policies and balance sheet guidelines. As a general matter, deposits are a cheaper source of funds than borrowings, because interest rates paid for deposits are typically less than interest rates charged for borrowings. If, as a result of general economic conditions, market interest rates, competitive pressures, or otherwise, the balance of deposits at the Bank approaches or exceeds internal policies and/or guidelines, the Bank may be limited in its ability to grow its loan portfolio, may rely more heavily on higher cost borrowings as a source of funds, or consider loan sales in the future.
Holding Company Liquidity. The Company and noncontrolling interest holders of the Company’s majority-owned affiliate, DGHM, have contingent put options, call options, and mandatory repurchase obligations that would require the Company to purchase (and the noncontrolling interest owners of DGHM to sell) the remaining noncontrolling interest in DGHM at contractually predetermined values as determined by the operating agreement of DGHM. At June 30, 2020, the estimated maximum redemption value for DGHM related to outstanding put options was zero based on the contractually predetermined calculation in the DGHM operating agreement. These put and call options are discussed in detail in Part II. Item 8. “Financial Statements and Supplementary Data - Note 14: Noncontrolling Interests” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
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Although not a primary source of funds, the Holding Company has generated liquidity from the sale of affiliates in the past. Additional funds were generated at the time of the sale of Anchor Capital Advisors LLC (“Anchor”) which occurred in April 2018 and the sale of Bingham, Osborn & Scarborough, LLC (“BOS”) which occurred in December 2018. As part of the sale agreements for both Anchor and BOS, the Company expects to receive future contingent payments for the remaining six months of 2020 of approximately $1.0 million and $1.1 million at June 30, 2020, respectively.
Dividends from the Bank are limited by various regulatory requirements relating to capital adequacy and retained earnings. See Part II. Item 5. “Market for Registrant’s Common Equity, Related Stockholders Matters, and Issuers Purchases of Equity Securities” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for further details.
The Bank pays dividends to the Holding Company, subject to the approval of the Bank’s Board of Directors, depending on its profitability and asset growth. Dividends from the Bank to the Holding Company are limited to the sum of the Bank’s Net income during the current calendar year and the retained net income of the prior two calendar years unless approved by regulators. If regulatory agencies were to require banks to increase their capital ratios, or impose other restrictions, it may limit the ability of the Bank to pay dividends to the Holding Company and/or limit the amount that the Bank could grow.
Although the Bank’s capital currently exceeds regulatory requirements for capital, the Holding Company could downstream additional capital to increase the rate that the Bank could grow. Depending upon the amount of capital downstreamed by the Holding Company, the approval of the Holding Company’s Board of Directors may be required prior to the payment, if any.
The Company is required to pay interest quarterly on its junior subordinated debentures. The estimated cash outlay for the remaining six months of 2020 for the interest payments is approximately $1.1 million based on the debt outstanding at June 30, 2020. LIBOR is expected to be phased out as an index by the end of 2021, and $103.1 million of the Company's junior subordinated debentures are tied to LIBOR. The Company will need to negotiate an alternative benchmark rate to be used at the time.
The Company presently pays cash dividends on its common stock on a quarterly basis dependent upon a number of factors such as profitability, Holding Company liquidity, and the Company’s capital levels. However, the ultimate declaration of dividends by the Board of Directors of the Company will depend on consideration of, among other things, recent financial trends and internal forecasts, regulatory limitations, alternative uses of capital deployment, general economic conditions, and regulatory changes to capital requirements. Additionally, the Company is required to inform and consult with the Federal Reserve in advance of declaring a dividend that exceeds earnings for the period for which the dividend is being paid.
The Company's $0.06 per share dividend announced on July 28, 2020 for the second quarter of 2020 exceeded the Company's earnings for the quarter. As required, the Company requested and received a non-objection letter from the Federal Reserve Bank of Boston to pay the proposed dividend. Given the current economic conditions and future forecasts, the Company’s Board of Directors will evaluate the amount of future dividends, if any, to be declared on a quarter by quarter basis. The Board of Directors could reduce or eliminate quarterly cash dividends based on the current or forecasted conditions if deemed prudent.
Bank Liquidity. The Bank has established various borrowing arrangements to provide additional sources of liquidity and funding. Management believes that the Bank currently has adequate liquidity available to respond to current demands. The Bank is a member of the FHLB of Boston, and as such, has access to short- and long-term borrowings from that institution. The FHLB can change the advance amounts that banks can utilize based on a bank’s current financial condition as obtained from publicly available data such as FDIC Call Reports. Decreases in the amount of FHLB borrowings available to the Bank would lower its liquidity and possibly limit the Bank’s ability to grow in the short-term. In addition, due to the elevated level of deposits in the second quarter of 2020, the Bank did not utilize any borrowings from the PPPLF, as originally anticipated. However, the Bank will continue to monitor its level of deposits and may utilize borrowings from the PPPLF in future quarters, if needed. Management believes that the Bank has adequate liquidity to meet its commitments for the foreseeable future.
In addition to the above liquidity, the Bank has access to the FRB discount window facility, which can provide short-term liquidity as “lender of last resort”. The use of non-core funding sources, including brokered deposits and borrowings, by the Bank may be limited by regulatory agencies. Generally, the regulatory agencies prefer that banks rely on core-funding sources for liquidity.
From time to time, the Bank purchases federal funds from the FHLB and other banking institutions to supplement its liquidity position. At June 30, 2020, the Bank had unused federal fund lines of credit totaling $500.0 million, compared to $500.0 million at December 31, 2019, with correspondent institutions to provide it with immediate access to overnight borrowings. At June 30, 2020 and December 31, 2019, the Bank did not have any outstanding borrowings under the federal funds lines with these correspondent institutions nor outstanding borrowings under federal funds lines with the FHLB. Certain liquidity sources, such as federal funds lines, may be withdrawn by the correspondent bank at any time especially in the event of financial deterioration of the institution.
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The Bank has negotiated brokered deposit agreements with several institutions that have nationwide distribution capabilities. The Bank participates in deposit placement services that can be used to provide customers to expanded deposit insurance coverage. At June 30, 2020, the Bank had $510.2 million of brokered deposits outstanding under these agreements, compared to $422.4 million at December 31, 2019.
If the Bank is no longer able to utilize the FHLB for borrowing, collateral currently used for FHLB borrowings could be transferred to other facilities such as the FRB’s discount window. In addition, the Bank could increase its usage of brokered deposits. Other borrowing arrangements may have higher rates than the FHLB would typically charge.
Capital Resources
Total shareholders’ equity at June 30, 2020 was $825.2 million compared to $819.0 million at December 31, 2019, an increase of $6.2 million. The increase in shareholders’ equity was primarily the result of the impact of the change in accumulated other comprehensive income and the adoption of ASU 2016-13, partially offset by dividends paid to common shareholders and the repurchase of common shares.
Under the Federal Reserve’s capital rules applicable to the Company and the Bank, the Company and the Bank are each required to maintain a minimum common equity Tier 1 capital to risk-weighted assets ratio of 4.5%, a minimum total Tier 1 capital to risk-weighted assets ratio of 6.0%, a minimum total capital to risk-weighted assets ratio of 8.0%, and a minimum Tier 1 leverage ratio of 4.0%. Additionally, Federal Reserve rules require the Company and the Bank to each establish a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements for “adequately capitalized” institutions equal to 2.5% of total risk-weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases.
A Federal Reserve-supervised institution, such as the Bank, is considered “well capitalized” if it (i) has a total capital to risk-weighted assets ratio of 10.0% or greater; (ii) a Tier 1 capital to risk-weighted assets ratio of 8.0% or greater; (iii) a common equity Tier 1 capital ratio to risk-weighted assets of 6.5% or greater; (iv) a Tier 1 leverage ratio of 5.0% or greater; and (iv) is not subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The Bank is currently considered “well capitalized” under all regulatory definitions.
The following table presents the Company’s and the Bank’s regulatory capital and related ratios as of June 30, 2020 and December 31, 2019. Also presented are the minimum requirements established by the Federal Reserve as of those dates for the Company and the Bank, respectively, to meet applicable capital requirements for the Bank to be considered “well capitalized” under the prompt corrective action provisions of the Federal Deposit Insurance Act. The Federal Reserve and the Massachusetts Division of Banks may impose higher capital ratios than those listed below based upon the results of regulatory exams.
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ActualFor capital adequacy purposes (at least)To be well capitalized under prompt corrective action provisions (at least)Minimum capital ratio with capital conservation buffer (1)
AmountRatioAmountRatioAmountRatioRatio
(In thousands, except percentages)
As of June 30, 2020
Common equity tier 1 risk-based capital
Company$731,316  11.09 %$296,728  4.5 %n/an/a7.0%
Boston Private Bank774,360  11.78 %295,832  4.5 %$427,314  6.5%7.0%
Tier 1 risk-based capital
Company831,338  12.61 %395,637  6.0 %n/an/a8.5%
Boston Private Bank774,360  11.78 %394,443  6.0 %525,924  8.0%8.5%
Total risk-based capital
Company913,936  13.86 %527,517  8.0 %n/an/a10.5%
Boston Private Bank856,712  13.03 %525,924  8.0 %657,405  10.0%10.5%
Tier 1 leverage capital
Company831,338  9.23 %360,383  4.0 %n/an/a4.0%
Boston Private Bank774,360  8.63 %359,057  4.0 %448,821  5.0%4.0%
As of December 31, 2019
Common equity tier 1 risk-based capital
Company$745,926  11.42 %$293,886  4.5 %n/an/a7.0%
Boston Private Bank778,635  11.97 %292,717  4.5 %$422,813  6.5%7.0%
Tier 1 risk-based capital
Company846,337  12.96 %391,848  6.0 %n/an/a8.5%
Boston Private Bank778,635  11.97 %390,289  6.0 %520,386  8.0%8.5%
Total risk-based capital
Company919,573  14.08 %522,464  8.0 %n/an/a10.5%
Boston Private Bank851,733  13.09 %520,386  8.0 %650,482  10.0%10.5%
Tier 1 leverage capital
Company846,337  9.77 %346,398  4.0 %n/an/a4.0%
Boston Private Bank778,635  9.03 %344,958  4.0 %431,198  5.0%4.0%
____________________
(1) Required capital ratios with the capital conservation buffer added to the minimum risk-based capital ratios.
The Company has sponsored the creation of two statutory trusts for the sole purpose of issuing trust preferred securities and investing the proceeds in junior subordinated debentures of the Company. In accordance with ASC 810-10-55, Consolidation - Overall - Implementation Guidance and Illustrations - Variable Interest Entities, these statutory trusts are not consolidated into the Company’s financial statements; however, the Company reflects the amounts of junior subordinated debentures payable to the preferred stockholders of statutory trusts as debt in its financial statements. As of both June 30, 2020 and December 31, 2019, all $100.0 million of the net balance of these trust preferred securities qualified as Tier 1 capital.
Recent Accounting Pronouncements
See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements” for a description of upcoming changes to accounting principles generally accepted in the United States that may materially impact the Company.

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Item 3.  Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes in the Interest Rate Sensitivity and Market Risk as described in Part II. Item 7A. “Quantitative and Qualitative Disclosures about Market Risk – Interest Rate Sensitivity and Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Item 4.  Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
As required by Rule 13a-15 under the Exchange Act, the Company has evaluated, with the participation of management, including the Company's Chief Executive Officer and Chief Financial Officer, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well designed and operated, can provide only a reasonable assurance of achieving the desired control objectives.
Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that such disclosure controls and procedures were effective as of June 30, 2020 in ensuring that material information required to be disclosed by the Company, including its consolidated subsidiaries, was made known to the certifying officers by others within the Company and its consolidated subsidiaries in the reports that it files or submits under the Exchange Act and is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. On a quarterly basis, the Company evaluates the disclosure controls and procedures, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that the Company’s systems evolve with its business.
(b) Change in internal controls over financial reporting.
There have been no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.


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PART II. Other Information
Item 1.  Legal Proceedings
The Company is involved in various legal proceedings from time to time. In the opinion of management, the final disposition of these proceedings will not have a material adverse effect on the financial condition or results of operations of the Company.
Item 1A.  Risk Factors
This section supplements and updates certain of the information found under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 28, 2020 (“Annual Report”) and Part II. Item 1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as filed with the SEC on May 8, 2020 (the “First Quarter 10-Q”), based on information currently known to us and recent developments since the date of the First Quarter 10-Q filing. The matters discussed below should be read in conjunction with the risks described in Part I. Item 1A. “Risk Factors” of our Annual Report and Part II. Item 1A. “Risk Factors” of our First Quarter 10-Q. However, the risks and uncertainties that we face are not limited to those described below and those set forth in the Annual Report and First Quarter 10-Q. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business and the trading price of our securities, particularly in light of the fast-changing nature of the COVID-19 pandemic, responsive containment measures taken and the related impacts to economic and operating conditions.
The COVID-19 pandemic, and the measures taken to control its spread, will continue to adversely impact our employees, customers, business operations and financial results, and the ultimate impact will depend on future developments, which are highly uncertain and cannot be predicted.
The COVID-19 pandemic has, and will likely continue to, severely impact the national economy and the regional and local markets in which we operate, lower equity market valuations, create significant volatility and disruption in capital and debt markets, and increase unemployment levels. Our business operations may be disrupted if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, or other restrictions in connection with the pandemic. We are subject to heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements that we have put in place for our employees. Federal Reserve actions to combat the economic contraction caused by the COVID-19 pandemic, including the reduction of the target federal funds rate and quantitative easing programs, could, if prolonged, adversely affect our net interest income and margins, and our profitability. The continued closures of many businesses and the institution of social distancing, shelter in place and stay home orders in the states and communities we serve, have reduced business activity and financial transactions, and may impact the execution of our strategic plan, such as by delaying strategic hiring. While certain of these restrictions have been eased and workplaces in the communities we serve are beginning to reopen, the pace of reopening is measured and these government policies and directives are subject to change as the effects and spread of the COVID-19 pandemic continue to evolve. It is unclear whether any COVID-19 pandemic-related businesses losses that we or our customers may suffer will be covered by existing insurance policies. Additionally, certain government directives and social distancing protocols may hinder our ability to conduct timely property appraisals, which could delay or impact the accuracy of the recognition of credit losses in our loan portfolios. Changes in customer behavior due to worsening business and economic conditions or legislative or regulatory initiatives may impact the demand for our products and services, which could adversely affect our revenue. The measures we have taken to aid our customers, including the introduction of a mortgage deferment program, may be insufficient to help our customers who have been negatively impacted by the economic fallout from the COVID-19 pandemic. Loans that are currently in deferral status may become nonperforming loans. Because of adverse economic and market conditions, we may be required to increase the Bank’s provision for loan loss expense, or recognize impairments on the securities we hold, goodwill, intangible assets, and right-of-use assets. The increase in market volatility and a corresponding increase in trading frequency means that our Wealth Management and Trust business is subject to an increased risk of trading errors, and the risk that any trading errors are of an increased magnitude. While the COVID-19 pandemic negatively impacted our results of operations for the first half of 2020, the extent to which the COVID-19 pandemic will continue to impact our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic, as well as further actions we may take as may be required by government authorities or that we determine is in the best interests of our employees and customers. There is no certainty that such measures will be sufficient to mitigate the risks posed by the pandemic.
Our participation in the SBA’s PPP may expose us to reputational harm, increased litigation risk, as well as the risk that the SBA may not fund some or all of the guarantees associated with PPP loans, which could result in these loans being charged off.
We have approved approximately 1,045 loans aggregating approximately $380.3 million through the PPP. Lenders participating in the PPP have faced increased public scrutiny about their loan application process and procedures, and the nature
70

and type of the borrowers receiving PPP loans. We depend on our reputation as a trusted and responsible financial services company to compete effectively in the communities that we serve, and any negative public or customer response to, or any litigation or claims that might arise out of, our participation in the PPP and any other legislative or regulatory initiatives and programs that may be enacted in response to the COVID-19 pandemic, could adversely impact our business. Other larger banks have been subject to litigation regarding the process and procedures that such banks used in processing applications for the PPP, and we may be subject to the same or similar litigation, in addition to litigation in connection with our processing of PPP loan forgiveness applications. In addition, if the SBA determines that there is a deficiency in the manner in which a PPP loan was originated, funded, or serviced by us, the SBA may deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of any loss related to the deficiency from us.
71

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities of the Company in the second quarter of 2020.
Item 3.  Defaults Upon Senior Securities
None.
Item 4.  Mine Safety Disclosures
Not applicable.
Item 5.  Other Information
None.
Item 6.  Exhibits
(a) Exhibits
Exhibit No.DescriptionIncorporated by Reference
Filed or
Furnished
with this
10-Q
Form
SEC Filing
Date
Exhibit
Number
31.1Filed
31.2Filed
32.1Furnished
32.2Furnished
101.INSThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL documentFiled
101.SCHInline XBRL Taxonomy Extension Schema DocumentFiled
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentFiled
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentFiled
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentFiled
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentFiled
104Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit 101)Filed
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BOSTON PRIVATE FINANCIAL HOLDINGS, INC.
/s/    ANTHONY DECHELLIS
August 6, 2020Anthony DeChellis
Chief Executive Officer, President and Director
(Principal Executive Officer)
/s/    STEVEN M. GAVEN
August 6, 2020Steven M. Gaven
Executive Vice President, Chief Financial Officer
73
 Document

Exhibit 31.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
I, Anthony DeChellis, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Boston Private Financial Holdings, Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
/s/    ANTHONY DECHELLIS
Date: August 6, 2020 Anthony DeChellis
 Chief Executive Officer, President and Director


Document

Exhibit 31.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
I, Steven M. Gaven, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Boston Private Financial Holdings, Inc. (the “registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
/s/    STEVEN M. GAVEN
 Steven M. Gaven
Date: August 6, 2020 Executive Vice President, Chief Financial Officer


Document

Exhibit 32.1*
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned Chief Executive Officer of Boston Private Financial Holdings, Inc. (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
  
/s/    ANTHONY DECHELLIS
  Anthony DeChellis
Date: August 6, 2020  Chief Executive Officer, President and Director

*  This certification shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.


Document

Exhibit 32.2*
CERTIFICATION PURSUANT TO
18 U.S.C. § 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned Chief Financial Officer of Boston Private Financial Holdings, Inc. (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
  
/s/    STEVEN M. GAVEN
  Steven M. Gaven
Date: August 6, 2020  Executive Vice President, Chief Financial Officer

*  This certification shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.


v3.20.2
Cover Page - shares
 6 Months Ended
Jun. 30, 2020
Jul. 31, 2020
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Document Type 10-Q  
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Document Period End Date Jun. 30, 2020  
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Entity File Number 001-35070  
Entity Registrant Name BOSTON PRIVATE FINANCIAL HOLDINGS, INC  
Entity Incorporation, State or Country Code MA  
Entity Tax Identification Number 04-2976299  
Entity Address, Address Line One Ten Post Office Square  
Entity Address, City or Town Boston,  
Entity Address, State or Province MA  
Entity Address, Postal Zip Code 02109  
City Area Code 617  
Local Phone Number 912-1900  
Title of 12(b) Security Common Stock  
Trading Symbol BPFH  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
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Entity Shell Company false  
Entity Common Stock, Shares Outstanding   82,196,822
Entity Central Index Key 0000821127  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.20.2
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Assets:    
Cash and cash equivalents $ 179,027,000 $ 292,479,000
Investment securities available-for-sale (amortized cost of $959,850 and $966,900 at June 30, 2020 and December 31, 2019, respectively) 1,002,970,000 978,284,000
Investment securities held-to-maturity (fair value of $43,351 and $47,949 at June 30, 2020 and December 31, 2019, respectively) 42,495,000 48,212,000
Equity securities at fair value 24,492,000 18,810,000
Stock in Federal Home Loan Bank and Federal Reserve Bank 42,407,000 39,078,000
Loans held for sale 9,786,000 7,386,000
Total loans 7,332,954,000 6,976,704,000
Less: Allowance for loan losses 89,324,000 71,982,000
Net loans 7,243,630,000 6,904,722,000
Premises and equipment, net 43,805,000 44,527,000
Goodwill 57,607,000 57,607,000
Intangible assets, net 8,935,000 10,352,000
Fees receivable 3,921,000 4,095,000
Accrued interest receivable 24,918,000 24,175,000
Deferred income taxes, net 9,116,000 11,383,000
Right-of-use assets 94,143,000 102,075,000
Other assets 371,654,000 287,316,000
Total assets 9,158,906,000 8,830,501,000
Liabilities:    
Deposits 7,427,397,000 7,241,476,000
Securities sold under agreements to repurchase 46,623,000 53,398,000
Federal Home Loan Bank borrowings 426,313,000 350,829,000
Junior subordinated debentures 106,363,000 106,363,000
Lease liabilities 108,234,000 117,214,000
Other liabilities 218,771,000 140,820,000
Total liabilities 8,333,701,000 8,010,100,000
Redeemable Noncontrolling Interests 0 1,383,000
Shareholders’ Equity:    
Common stock, $1.00 par value; authorized: 170,000,000 shares; issued and outstanding: 82,058,483 shares at June 30, 2020 and 83,265,674 shares at December 31, 2019 82,058,000 83,266,000
Additional paid-in capital 594,463,000 600,708,000
Retained earnings 118,647,000 127,469,000
Accumulated other comprehensive income 30,037,000 7,575,000
Total shareholders’ equity 825,205,000 819,018,000
Total liabilities, redeemable noncontrolling interests and shareholders’ equity $ 9,158,906,000 $ 8,830,501,000
v3.20.2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Assets:    
Investment securities, available for sale, amortized cost $ 959,850 $ 966,900
Debt securities, held-to-maturity, fair value $ 43,351 $ 47,949
Shareholders’ Equity:    
Common stock, par value (in dollars per share) $ 1.00 $ 1.00
Common stock, shares authorized (in shares) 170,000,000 170,000,000
Common stock, shares issued (in shares) 82,058,483 83,265,674
Common stock, shares, outstanding (in shares) 82,058,483 83,265,674
v3.20.2
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Interest and dividend income:        
Loans $ 62,807 $ 71,943 $ 129,165 $ 141,876
Taxable investment securities 859 1,121 1,727 2,306
Non-taxable investment securities 2,005 1,901 4,003 3,802
Mortgage-backed securities 2,566 2,706 5,353 5,603
Short-term investments and other 582 1,057 1,653 1,965
Total interest and dividend income 68,819 78,728 141,901 155,552
Interest expense:        
Deposits 7,335 14,515 20,131 28,573
Federal Home Loan Bank borrowings 1,755 5,027 3,789 7,807
Junior subordinated debentures 764 1,080 1,681 2,201
Repurchase agreements and other short-term borrowings 27 646 105 1,173
Total interest expense 9,881 21,268 25,706 39,754
Net interest income 58,938 57,460 116,195 115,798
Provision/(credit) for loan losses 22,604 1,363 39,566 (63)
Net interest income after provision/(credit) for loan losses 36,334 56,097 76,629 115,861
Fees and other income:        
Fees 19,633 22,005 40,681 44,397
Gain on OREO, net 0 0 0 91
Other 1,032 88 (333) 965
Total fees and other income 22,662 24,380 44,183 49,628
Operating expense:        
Salaries and employee benefits 33,937 32,706 69,033 68,432
Occupancy and equipment 7,560 7,852 15,206 16,200
Information systems 7,113 5,137 13,838 10,997
Professional services 3,446 3,313 7,047 6,873
Marketing and business development 2,313 1,934 4,203 3,019
Amortization of intangibles 702 672 1,417 1,344
FDIC insurance 767 585 767 1,245
Restructuring 0 0 0 1,646
Other 5,615 3,460 10,850 6,456
Total operating expense 61,453 55,659 122,361 116,212
Income/(loss) before income taxes (2,457) 24,818 (1,549) 49,277
Income tax expense 841 5,369 943 10,286
Net income/(loss) before attribution to noncontrolling interests (3,298) 19,449 (2,492) 38,991
Less: Net income attributable to noncontrolling interests 0 69 6 169
Net income/(loss) attributable to the Company (3,298) 19,380 (2,498) 38,822
Adjustments to net income/(loss) attributable to the Company to arrive at net income/(loss) attributable to common shareholders 0 (816) 414 741
Net income/(loss) attributable to common shareholders, treasury stock method $ (3,298) $ 18,564 $ (2,084) $ 39,563
Basic earnings/(loss) per share attributable to common shareholders:        
Total attributable to common shareholders (in dollars per share) $ (0.04) $ 0.22 $ (0.03) $ 0.47
Weighted average basic common shares outstanding (in shares) 81,929,752 83,565,780 82,464,438 83,426,213
Diluted earnings/(loss) per share attributable to common shareholders:        
Total attributable to common shareholders (in dollars per share) $ (0.04) $ 0.22 $ (0.03) $ 0.47
Weighted average diluted common shares outstanding (in shares) 81,929,752 84,048,972 82,464,438 84,036,050
Wealth management and trust fees        
Fees and other income:        
Fees $ 17,261 $ 18,912 $ 35,632 $ 37,970
Investment management fees        
Fees and other income:        
Fees 1,770 2,455 3,695 5,105
Other banking fee income        
Fees and other income:        
Fees 2,395 2,867 4,885 5,366
Gain on sale of loans, net        
Fees and other income:        
Fees $ 204 $ 58 $ 304 $ 131
v3.20.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net income/(loss) attributable to the Company $ (3,298) $ 19,380 $ (2,498) $ 38,822
Other comprehensive income/(loss), net of tax:        
Net unrealized gain/(loss) on securities available-for-sale 8,198 10,665 22,687 22,233
Unrealized gain/(loss) on cash flow hedges (302) (6) (302) (33)
Reclassification adjustment for net realized (gain)/loss included in net income 107 (136) 107 (356)
Net unrealized gain/(loss) on cash flow hedges (195) (142) (195) (389)
Net unrealized gain/(loss) on other (30) 0 (30) 0
Other comprehensive income/(loss), net 7,973 10,523 22,462 21,844
Total comprehensive income/(loss) attributable to the Company, net of tax $ 4,675 $ 29,903 $ 19,964 $ 60,666
v3.20.2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) - USD ($)
$ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
 [1]
Common Stock
Additional Paid-in Capital
Retained Earnings
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
 [1]
Accumulated Other Comprehensive Income/(Loss)
Beginning Balance at Dec. 31, 2018 $ 753,954   $ 83,656 $ 600,196 $ 87,821   $ (17,719)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income/(loss) attributable to the Company 38,822       38,822    
Other comprehensive income/(loss), net 21,844           21,844
Dividends paid to common shareholders (20,200)       (20,200)    
Net proceeds from issuance of:              
Net proceeds from issuance of common stock 1,133   143 990      
Net proceeds from issuance of incentive stock grant shares canceled or forfeited and withheld for employee taxes (675)   (88) (587)      
Amortization of stock compensation and employee stock purchase plan 2,340     2,340      
Stock options exercised 435   63 372      
Other equity adjustments 558     558      
Ending Balance at Jun. 30, 2019 $ 798,211   83,774 603,869 106,443   4,125
Net proceeds from issuance of:              
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member            
Beginning Balance at Mar. 31, 2019 $ 778,819   83,774 604,288 97,155   (6,398)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income/(loss) attributable to the Company 19,380       19,380    
Other comprehensive income/(loss), net 10,523           10,523
Dividends paid to common shareholders (10,092)       (10,092)    
Net proceeds from issuance of:              
Net proceeds from issuance of common stock 153   39 114      
Net proceeds from issuance of incentive stock grant shares canceled or forfeited and withheld for employee taxes (845)   (92) (753)      
Amortization of stock compensation and employee stock purchase plan 988     988      
Stock options exercised 385   53 332      
Other equity adjustments (1,100)     (1,100)      
Ending Balance at Jun. 30, 2019 798,211   83,774 603,869 106,443   4,125
Beginning Balance at Dec. 31, 2019 819,018 $ 13,492 83,266 600,708 127,469 $ 13,492 7,575
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income/(loss) attributable to the Company (2,498)       (2,498)    
Other comprehensive income/(loss), net 22,462           22,462
Dividends paid to common shareholders (19,816)       (19,816)    
Repurchase of shares of common stock (12,807)   (1,565) (11,242)      
Net proceeds from issuance of:              
Net proceeds from issuance of common stock 1,060   111 949      
Net proceeds from issuance of incentive stock grant shares canceled or forfeited and withheld for employee taxes 3,676   240 3,436      
Amortization of stock compensation and employee stock purchase plan (879)     (879)      
Stock options exercised 55   7 48      
Other equity adjustments 1,442   (1) 1,443      
Ending Balance at Jun. 30, 2020 $ 825,205   82,058 594,463 118,647   30,037
Net proceeds from issuance of:              
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201613Member            
Beginning Balance at Mar. 31, 2020 $ 828,792   81,800 593,167 131,761   22,064
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income/(loss) attributable to the Company (3,298)       (3,298)    
Other comprehensive income/(loss), net 7,973           7,973
Dividends paid to common shareholders (9,816)       (9,816)    
Net proceeds from issuance of:              
Net proceeds from issuance of common stock 140   23 117      
Net proceeds from issuance of incentive stock grant shares canceled or forfeited and withheld for employee taxes 3,614   235 3,379      
Amortization of stock compensation and employee stock purchase plan (2,227)     (2,227)      
Other equity adjustments 27     27      
Ending Balance at Jun. 30, 2020 $ 825,205   $ 82,058 $ 594,463 $ 118,647   $ 30,037
[1] Impact due to the adoption of ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements.”
v3.20.2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (Parenthetical) - $ / shares
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Stockholders' Equity [Abstract]        
Dividends paid (in dollars per share) $ 0.12 $ 0.12 $ 0.24 $ 0.24
Repurchase of common stock, number of common shares (in shares)     1,565,060  
Shares of common stock issued (in shares) 22,727 39,156 111,055 143,147
Incentive stock grant (in shares) 265,465 16,916 271,004 37,511
Stock forfeited (in shares)   6,401   9,377
Shares withheld for employee taxes (in shares) 30,195 101,262 31,159 115,173
v3.20.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash flows from operating activities:    
Net income/(loss) attributable to the Company $ (2,498) $ 38,822
Adjustments to arrive at net income/(loss):    
Net income attributable to noncontrolling interests 6 169
Net income/(loss) before attribution to noncontrolling interests (2,492) 38,991
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:    
Depreciation and amortization 11,630 11,712
Net income attributable to noncontrolling interests (6) (169)
Stock compensation, net of cancellations 2,997 2,933
Provision/(credit) for loan losses 39,566 (63)
Loans originated for sale (42,611) (17,103)
Proceeds from sale of loans held for sale 40,451 16,406
Deferred income tax expense/(benefit) (12,233) 959
Decrease/(increase) in right-of-use assets 7,932 (2,419)
Increase/(decrease) in operating lease liabilities (8,980) 2,476
Net decrease/(increase) in other operating activities (11,973) (26,560)
Net cash provided by/(used in) operating activities 24,281 27,163
Investment securities available-for-sale:    
Purchases (29,481) (9,845)
Maturities, calls, redemptions, and principal payments 32,481 64,230
Investment securities held-to-maturity:    
Principal payments 5,541 15,872
Equity securities at fair value:    
Transfers out (28,137) (35,349)
Transfers in 22,455 30,485
(Investments)/distributions in trusts, net (209) 504
Contingent considerations from divestitures 2,497 2,019
(Purchase)/redemption of Federal Home Loan Bank and Federal Reserve Bank stock (3,329) (15,190)
Net increase in portfolio loans (358,604) (188,548)
Proceeds from recoveries of loans previously charged off 235 577
Proceeds from sale of OREO 0 492
Capital expenditures (4,221) (811)
Net cash provided by/(used in) investing activities (360,772) (135,564)
Cash flows from financing activities:    
Net increase/(decrease) in deposits 185,921 (343,207)
Net increase/(decrease) in securities sold under agreements to repurchase (6,775) 25,444
Net increase/(decrease) in federal funds purchased 0 (115,000)
Net increase/(decrease) in short-term Federal Home Loan Bank borrowings (75,000) 340,000
Advances of long-term Federal Home Loan Bank borrowings 425,000 290,000
Repayments of long-term Federal Home Loan Bank borrowings (274,516) (130,076)
Dividends paid to common shareholders (19,816) (20,200)
Repurchase of common stock (12,807) 0
Proceeds from stock option exercises 55 435
Proceeds from issuance of common stock 1,060 1,133
Tax withholding for share based compensation awards (200) (1,268)
Distributions paid to noncontrolling interests (6) (169)
Other equity adjustments 123 (194)
Net cash provided by/(used in) financing activities 223,039 46,898
Net increase/(decrease) in cash and cash equivalents (113,452) (61,503)
Cash and cash equivalents at beginning of year 292,479 127,259
Cash and cash equivalents at end of period 179,027 65,756
Supplemental disclosure of cash flow items:    
Cash paid for interest 25,106 37,382
Cash paid for income taxes, (net of refunds received) 1,969 14,277
Change in unrealized gain/(loss) on available-for-sale securities, net of tax 22,687 22,233
Change in unrealized gain/(loss) on cash flow hedges, net of tax (195) (389)
Net unrealized gain/(loss) on other (30) 0
Non-cash transactions:    
Loans charged off $ (2,074) $ (759)
v3.20.2
Basis of Presentation and Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies
Boston Private Financial Holdings, Inc. (the “Company” or “BPFH”), is a bank holding company (the “Holding Company”) with two reportable segments: (i) Private Banking and (ii) Wealth Management and Trust.
The Private Banking segment is comprised of the banking operations of Boston Private Bank & Trust Company (the “Bank” or “Boston Private Bank”), a trust company chartered by the Commonwealth of Massachusetts, whose deposits are insured by the Federal Deposit Insurance Corporation (the “FDIC”), and a wholly-owned subsidiary of the Company. Boston Private Bank is a member of the Federal Reserve Bank of Boston and primarily operates in three geographic markets: New England, Northern California, and Southern California. The Private Banking segment is principally engaged in providing private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations. In addition, the Private Banking segment is an active provider of financing for affordable housing, first-time homebuyers, economic development, social services, community revitalization and small businesses.
The Wealth Management and Trust segment is comprised of Boston Private Wealth LLC (“Boston Private Wealth”), a registered investment adviser (“RIA”) and wholly-owned subsidiary of the Bank, as well as the trust operations of Boston Private Bank. The Wealth Management and Trust segment offers planning-based financial strategies, wealth management, family office, financial planning, tax planning, and trust services to individuals, families, institutions, and nonprofit institutions. On September 1, 2019, KLS Professional Advisors Group, LLC (“KLS”) merged with and into Boston Private Wealth. Prior to the merger, the results of KLS were reported in a third reportable segment, “Affiliate Partners”, as discussed below. The Wealth Management and Trust segment operates in New England, New York, Southeast Florida, Northern California, and Southern California.
Prior to the third quarter of 2019, the Company had three reportable segments: Affiliate Partners, Private Banking, and Wealth Management and Trust. The Affiliate Partners segment was comprised of two affiliates: KLS and Dalton, Greiner, Hartman, Maher & Co., LLC (“DGHM”), each of which are RIAs. With the integration of KLS into Boston Private Wealth in September of 2019, the Company reorganized its segment reporting structure to align with how its financial performance and strategy are reviewed and managed. The results of KLS are included in the results of Boston Private Wealth within the Wealth Management and Trust segment, and the results of DGHM are included within the Holding Company and Eliminations for all periods presented. See Part II. Item 8. “Financial Statements and Supplementary Data - Note 3: Asset Sales and Divestitures” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for additional information.
The Company conducts substantially all of its business through its two reportable segments. All significant intercompany accounts and transactions have been eliminated in consolidation, and the portion of income allocated to the owners other than the Company is included in “Net income attributable to noncontrolling interests” in the Consolidated Statements of Operations for the periods owned. Redeemable noncontrolling interests, if any, in the Consolidated Balance Sheets reflect the maximum redemption value of agreements with the owners of DGHM.
The unaudited interim Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include all necessary adjustments of a normal recurring nature, which, in the opinion of management, are required for a fair presentation of the results of operations and financial condition of the Company. The interim results of consolidated operations are not necessarily indicative of the results for the entire year.
The information in this report should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission (“SEC”). Prior period amounts are reclassified whenever necessary to conform to the current period presentation. With the integration of KLS into Boston Private Wealth and the related change to reportable segments, fee revenue from KLS is reported in Wealth management and trust fees for all periods on the Consolidated Statements of Operations, which was presented as Wealth advisory fees in prior periods.
The Company’s significant accounting policies are described in Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC. For interim reporting purposes, the Company follows the same significant accounting policies, except for the following new accounting pronouncements from the Financial Accounting Standards Board (the “FASB”) that were adopted effective January 1, 2020:
•In June 2016, the FASB issued ASU 2016-13. Throughout 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”); ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”); ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 942)—Effective Dates (“ASU 2019-10”); and ASU 2019-11, Codification
Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”). This update and related amendments to Topic 326 are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology with a current expected credit losses (“CECL”) model methodology that reflects expected credit losses and requires consideration of a reasonable and supportable forecast to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019. The Company adopted this update on January 1, 2020 utilizing a modified retrospective approach. On adoption of ASU 2016-13 on January 1, 2020, the Company recognized a decrease in the allowance for loan losses of $20.4 million and an increase in the reserve for unfunded loan commitments of $1.4 million. The net, after-tax impact of the decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million as shown in the Consolidated Statements of Changes in Shareholders’ Equity.
v3.20.2
Earnings/(Loss) Per Share
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Earnings/(Loss) Per Share Earnings/(Loss) Per Share
The treasury stock method of calculating earnings/(loss) per share (“EPS”) is presented below for the three and six months ended June 30, 2020 and 2019. The following tables present the computations of basic and diluted EPS:
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands, except share and per share data)
Basic earnings/(loss) per share - Numerator:
Net income/(loss) before attribution to noncontrolling interests$(3,298) $19,449  $(2,492) $38,991  
Less: Net income attributable to noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company(3,298) 19,380  (2,498) 38,822  
Decrease/(increase) in noncontrolling interests’ redemption values (1)—  (816) 414  741  
Net income/(loss) attributable to common shareholders, treasury stock method$(3,298) $18,564  $(2,084) $39,563  
Basic earnings/(loss) per share - Denominator:
Weighted average basic common shares outstanding81,929,752  83,565,780  82,464,438  83,426,213  
Per share data - Basic earnings/(loss) per share:
Total attributable to common shareholders$(0.04) $0.22  $(0.03) $0.47  
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands, except share and per share data)
Diluted earnings/(loss) per share - Numerator:
Net income/(loss) attributable to common shareholders, after assumed dilution$(3,298) $18,564  $(2,084) $39,563  
Diluted earnings/(loss) per share - Denominator:
Weighted average basic common shares outstanding81,929,752  83,565,780  82,464,438  83,426,213  
Dilutive effect of: Time-based and market-based stock options, performance-based and time-based restricted stock, and performance-based and time-based restricted stock units, and other dilutive securities (2)—  483,192  —  609,837  
Weighted average diluted common shares outstanding (2)81,929,752  84,048,972  82,464,438  84,036,050  
Per share data - Diluted earnings/(loss) per share:
Total attributable to common shareholders$(0.04) $0.22  $(0.03) $0.47  
Dividends per share declared and paid on common stock$0.12  $0.12  $0.24  $0.24  
_____________________
(1)See Part II. Item 8. “Financial Statements and Supplementary Data - Note 14: Noncontrolling Interests” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the redemption values related to the redeemable noncontrolling interests. In accordance with the FASB Accounting Standards Codification Distinguishing Liabilities from Equity (“ASC 480”), an increase in redemption value from period to period reduces income attributable to common shareholders. A decrease in redemption value from period to period increases income attributable to common shareholders, but only to the extent that the cumulative change in redemption value remains a cumulative increase since adoption of this standard in the first quarter of 2009.
(2)The diluted EPS computations for the three and six months ended June 30, 2020 and 2019 do not assume the conversion, exercise, or contingent issuance of the following shares for the following periods because the result would have been anti-
dilutive for the periods indicated. This includes shares excluded from the computation of diluted earnings/(loss) per share because the effect would have been anti-dilutive given the net loss during the period, and out-of-the money options, where the exercise prices were greater than the average market price of common shares for the period, because their inclusion would have been anti-dilutive As a result of the anti-dilution, the potential common shares excluded from the diluted EPS computation are as follows:
Three months ended June 30,Six months ended June 30,
2020201920202019
Anti-dilutive shares excluded from computation of average dilutive EPS(In thousands)
Potential common shares from: options, restricted stock, or other dilutive securities2,328  750  1,813  820  
Total anti-dilutive shares excluded from computation of average dilutive EPS2,328  750  1,813  820  
v3.20.2
Reportable Segments
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Reportable Segments Reportable Segments
Management reporting
The Company has two reportable segments: (i) Private Banking and (ii) Wealth Management and Trust, as well as Boston Private Financial Holdings, Inc. (the “Holding Company”) within Holding Company and Eliminations. The financial performance of the Company is managed and evaluated according to these two segments. Each segment is managed by a segment leader (“Segment Leader”) who has full authority and responsibility for the performance and the allocation of resources within their segment. The Company’s Chief Executive Officer (“CEO”) is the Company’s Chief Operating Decision Maker (“CODM”).
The Segment Leader for Private Banking is the CEO of Boston Private Bank, who is also the Company’s CEO. The Bank’s banking operations are reported in the Private Banking segment. The Segment Leader for Wealth Management and Trust is the President of Private Banking, Wealth and Trust. The Segment Leader of Wealth Management and Trust reports to the CEO of the Company. The Segment Leaders have authority with respect to the allocation of capital within their respective segments, management oversight responsibility, performance assessments, and overall authority and accountability within their respective segment. The Company’s CODM communicates with the President of Private Banking, Wealth and Trust regarding profit and loss responsibility, strategic planning, priority setting and other matters. The Company’s Chief Financial Officer reviews all financial detail with the CODM on a monthly basis.
Description of reportable segments
Private Banking
The Private Banking segment operates primarily in three geographic markets: New England, Northern California and Southern California. The Bank conducts business under the name of Boston Private Bank & Trust Company in all markets. The Bank is chartered by the Commonwealth of Massachusetts and is insured by the FDIC. The Bank is principally engaged in providing private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations. In addition, the Bank is an active provider of financing for affordable housing, first-time homebuyers, economic development, social services, community revitalization and small businesses.
Wealth Management and Trust
The Wealth Management and Trust segment is comprised of the trust operations of the Bank and the operations of Boston Private Wealth. On September 1, 2019, KLS merged into Boston Private Wealth. As a result, the results of KLS are included in the results of Boston Private Wealth within the Wealth Management and Trust segment for all periods presented. The Wealth Management and Trust segment offers planning-based financial strategies, wealth management, family office, financial planning, tax planning, and trust services to individuals, families, institutions, and nonprofit institutions. The Wealth Management and Trust segment operates in New England, New York, Southeast Florida, Northern California and Southern California.
Changes to segment reporting
With the integration of KLS into Boston Private Wealth in the third quarter of 2019, the Company reorganized the segment reporting structure to align with how the Company's financial performance and strategy is reviewed and managed. The results of KLS are included in the results of Boston Private Wealth within the Wealth Management and Trust segment, and the results of DGHM are included in Holding Company and Eliminations for all periods presented.
Measurement of segment profit and assets
The accounting policies of the segments are the same as those described in Part I. Item 1. "Notes to Unaudited Consolidated Financial Statements - Note 1: Basis of Presentation and Summary of Significant Accounting Policies."
Reconciliation of reportable segment items
The following tables present a reconciliation of the revenues, expenses, assets, and other significant items of reportable segments as of and for the three and six months ended June 30, 2020 and 2019.
Three months ended June 30,Six months ended June 30,
2020201920202019
Private Banking (1)(In thousands)
Net interest income$59,690  $58,419  $117,780  $117,756  
Fees and other income3,597  2,804  4,705  6,062  
Total revenue63,287  61,223  122,485  123,818  
Provision/(credit) for loan losses22,604  1,363  39,566  (63) 
Operating expense (2)42,914  37,805  85,502  79,122  
Income/(loss) before income taxes(2,231) 22,055  (2,583) 44,759  
Income tax expense/(benefit)(1,255) 4,878  (2,186) 9,308  
Net income/(loss) before attribution to noncontrolling interests(976) 17,177  (397) 35,451  
Net income/(loss) attributable to the Company$(976) $17,177  $(397) $35,451  
Assets$9,104,761  $8,619,399  $9,104,761  $8,619,399  
Amortization of intangibles$64  $—  $141  $—  
Depreciation$2,611  $2,373  $5,237  $5,043  
Three months ended June 30,Six months ended June 30,
2020201920202019
Wealth Management and Trust (1)(In thousands)
Net interest income$7  $104  $79  $210  
Fees and other income17,292  18,956  35,777  38,082  
Total revenue17,299  19,060  35,856  38,292  
Operating expense (2)14,651  14,409  30,100  29,976  
Income before income taxes2,648  4,651  5,756  8,316  
Income tax expense898  1,520  1,972  2,714  
Net income before attribution to noncontrolling interests1,750  3,131  3,784  5,602  
Net income attributable to the Company$1,750  $3,131  $3,784  $5,602  
Assets$146,254  $151,128  $146,254  $151,128  
Amortization of intangibles$638  $672  $1,276  $1,344  
Depreciation$286  $333  $580  $700  
Three months ended June 30,Six months ended June 30,
2020201920202019
Holding Company and Eliminations (1)(In thousands)
Net interest income (3)$(759) $(1,063) $(1,664) $(2,168) 
Fees and other income1,773  2,620  3,701  5,484  
Total revenue1,014  1,557  2,037  3,316  
Operating expense3,888  3,445  6,759  7,114  
Income/(loss) before income taxes(2,874) (1,888) (4,722) (3,798) 
Income tax expense/(benefit) 1,198  (1,029) 1,157  (1,736) 
Net income/(loss) before attribution to noncontrolling interests(4,072) (859) (5,879) $(2,062) 
Noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company$(4,072) $(928) $(5,885) $(2,231) 
Assets (including eliminations)$(92,109) $(57,654) $(92,109) $(57,654) 
Depreciation$38  $49  $77  $96  
Three months ended June 30,Six months ended June 30,
2020201920202019
Total Company (1)(In thousands)
Net interest income$58,938  $57,460  $116,195  $115,798  
Fees and other income22,662  24,380  44,183  49,628  
Total revenue81,600  81,840  160,378  165,426  
Provision/(credit) for loan losses22,604  1,363  39,566  (63) 
Operating expense61,453  55,659  122,361  116,212  
Income/(loss) before income taxes(2,457) 24,818  (1,549) 49,277  
Income tax expense841  5,369  943  10,286  
Net income/(loss) before attribution to noncontrolling interests(3,298) 19,449  (2,492) 38,991  
Noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company$(3,298) $19,380  $(2,498) $38,822  
Assets$9,158,906  $8,712,873  $9,158,906  $8,712,873  
Amortization of intangibles$702  $672  $1,417  $1,344  
Depreciation$2,935  $2,755  $5,894  $5,839  
_____________________
(1)Due to rounding, the sum of individual segment results may not add up to the Total Company results.
(2)Operating expense related to the Private Banking and Wealth Management and Trust segments includes restructuring expense of $1.3 million and $0.4 million, respectively, for the six months ended June 30, 2019. There were no other restructuring expenses in other periods presented.
(3)Interest expense on junior subordinated debentures is included in Holding Company and Eliminations.
v3.20.2
Investments
 6 Months Ended
Jun. 30, 2020
Investments [Abstract]  
Investments Investments
The following table presents a summary of investment securities at June 30, 2020 and December 31, 2019:
 Amortized
Cost		UnrealizedFair
Value
GainsLosses
(In thousands)
At June 30, 2020
Available-for-sale securities at fair value:
U.S. government and agencies$19,959  $1,162  $—  $21,121  
Government-sponsored entities153,225  5,718  —  158,943  
Municipal bonds315,056  18,899  —  333,955  
Mortgage-backed securities (1)471,610  17,515  (174) 488,951  
Total$959,850  $43,294  $(174) $1,002,970  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$42,495  $888  $(32) $43,351  
Total$42,495  $888  $(32) $43,351  
Equity securities at fair value:
Money market mutual funds (2)$24,492  $—  $—  $24,492  
Total$24,492  $—  $—  $24,492  
At December 31, 2019
Available-for-sale securities at fair value:
U.S. government and agencies$19,955  $42  $(57) $19,940  
Government-sponsored entities154,963  1,292  —  156,255  
Municipal bonds312,977  12,551  (73) 325,455  
Mortgage-backed securities (1)479,005  1,117  (3,488) 476,634  
Total$966,900  $15,002  $(3,618) $978,284  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$48,212  $53  $(316) $47,949  
Total$48,212  $53  $(316) $47,949  
Equity securities at fair value:
Money market mutual funds (2)$18,810  $—  $—  $18,810  
Total$18,810  $—  $—  $18,810  
_____________________
(1)All mortgage-backed securities are guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
(2)Money market mutual funds maintain a constant net asset value of $1.00 and therefore have no unrealized gain or loss.
The Company adopted ASU 2016-13 as of January 1, 2020. Under ASU 2016-13, the Company is required to assess the investment portfolio for credit impairment. The Company considers the held-to-maturity portfolio to meet the "zero loss" expectation requirements. All held-to-maturity securities owned by the Company are AAA rated mortgage-backed securities that are backed by the guarantees of U.S. government, U.S. government agencies or government-sponsored entities. The Company has experienced zero losses for these securities. In addition, as of June 30, 2020, no held-to-maturity securities were past due. Therefore, no credit allowance was recorded on the held-to-maturity investment portfolio. The Company evaluated the available-for-sale investment securities on a security by security basis and identified no security with impairment. Therefore, no credit allowance was booked on the available-for-sale investment portfolio. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements” for additional information on ASU 2016-13.
The following table presents the maturities of available-for-sale investment securities, based on contractual maturity, as of June 30, 2020. Certain securities are callable before their final maturity. Additionally, certain securities (such as mortgage-backed securities) are shown within the table below based on their final (contractual) maturity, but due to prepayments and amortization are expected to have shorter lives.
 Available-for-sale Securities
Amortized
Cost		Fair
Value
(In thousands)
Within one year$45,957  $46,277  
After one, but within five years301,995  314,345  
After five, but within ten years231,164  244,374  
Greater than ten years380,734  397,974  
Total$959,850  $1,002,970  
The following table presents the maturities of held-to-maturity investment securities, based on contractual maturity, as of June 30, 2020.
 Held-to-maturity Securities
Amortized
Cost		Fair
Value
(In thousands)
After five, but within ten years$34,732  $35,377  
Greater than ten years7,763  7,974  
Total$42,495  $43,351  
The following table presents the maturities of equity securities, based on contractual maturity, as of June 30, 2020.
 Equity Securities
Amortized
Cost		Fair
Value
(In thousands)
Within one year$24,492  $24,492  
Total$24,492  $24,492  
During the three and six months ended June 30, 2020 and 2019, there were no sales of available-for-sale, held-to- maturity, or equity securities.
The following tables present information regarding securities at June 30, 2020 and December 31, 2019 having temporary impairment, due to the fair values having declined below the amortized cost of the individual securities, and the time period that the investments have been temporarily impaired.
Less than 12 months12 months or longerTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		# of
Securities
(In thousands, except number of securities)
June 30, 2020
Available-for-sale securities
Mortgage-backed securities (1) $20,871  $(45) $10,622  $(129) $31,493  $(174) 28  
Total$20,871  $(45) $10,622  $(129) $31,493  $(174) 28  
Held-to-maturity securities
Mortgage-backed securities (1)$2,135  $(9) $2,024  $(23) $4,159  $(32) 2  
Total$2,135  $(9) $2,024  $(23) $4,159  $(32) 2  
Less than 12 months12 months or longerTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		# of
Securities
(In thousands, except number of securities)
December 31, 2019
Available-for-sale securities
U.S. government and agencies$9,899  $(57) $—  $—  $9,899  $(57) 1  
Government-sponsored entities1,725  —  —  —  1,725  —  1  
Municipal bonds9,149  (73) —  —  9,149  (73) 4  
Mortgage-backed securities (1)140,723  (1,016) 187,043  (2,472) 327,766  (3,488) 85  
Total$161,496  $(1,146) $187,043  $(2,472) $348,539  $(3,618) 91  
Held-to-maturity securities
Mortgage-backed securities (1)$10,328  $(11) $30,451  $(305) $40,779  $(316) 14  
Total$10,328  $(11) $30,451  $(305) $40,779  $(316) 14  
_____________________
(1)All mortgage-backed securities are guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
As of June 30, 2020, the mortgage-backed securities in the first table above had current Standard and Poor’s credit rating of at least AAA. As of June 30, 2020, the Company determined that the unrealized losses on investments, since their purchase, is primarily attributed to changes in interest rates and not as a result of the deterioration of credit quality. As of June 30, 2020, the Company had no intent to sell any securities in an unrealized loss position, and it is not more likely than not that the Company would be forced to sell any of these securities prior to the full recovery of all unrealized loss amounts.
Other investments
The Company invests in low-income housing tax credits, which are included in other assets, to encourage private capital investment in the construction and rehabilitation of low-income housing. The Company makes these investments as an indirect subsidy that allows investors, such as the Company, in a flow-through limited liability entity, such as limited partnerships or limited liability companies that manage or invest in qualified affordable housing projects, to receive the benefits of the tax credits allocated to the entity that owns the qualified affordable housing project. The Company also holds partnership interests in venture capital funds formed to provide financing to small businesses and to promote community development.
Other investments, which are included in other assets, can be temporarily impaired when the fair values decline below the amortized costs of the individual investments. There were no other investments with unrealized losses as of June 30, 2020 or December 31, 2019. The Company’s other investments primarily include low income housing partnerships which generate tax credits. The Company also holds partnership interests in small business investment companies formed to provide financing to small businesses and to promote community development. The Company had $74.8 million and $65.5 million in other investments included in Other assets as of June 30, 2020 and December 31, 2019, respectively.
v3.20.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value MeasurementsFair value is defined under GAAP as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value. Financial instruments are considered Level 1 when valuation can be based on quoted prices in active markets for identical assets or liabilities. Level 2 financial instruments are valued using quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or models using inputs that are observable or can be corroborated by observable market data of substantially the full term of the assets or liabilities. Financial instruments are considered Level 3 when their values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable and when determination of the fair value requires significant management judgment or estimation.
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:
 As of June 30, 2020Fair value measurements at reporting date using:
Quoted prices in
active markets
for identical
assets (Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies$21,121  $—  $21,121  $—  
Government-sponsored entities158,943  —  158,943  —  
Municipal bonds333,955  —  333,955  —  
Mortgage-backed securities488,951  —  488,951  —  
Total available-for-sale securities1,002,970  —  1,002,970  —  
Equity securities24,492  24,492  —  —  
Derivatives - interest rate customer swaps96,968  —  96,968  —  
Derivatives - risk participation agreement21  —  21  —  
Trading securities held in the “rabbi trust” (1)6,328  6,328  —  —  
Liabilities:
Derivatives - interest rate customer swaps$97,760  $—  $97,760  $—  
Derivatives - interest rate swaps274  —  274  —  
Derivatives - risk participation agreement478  —  478  —  
Deferred compensation “rabbi trust” (1)6,320  6,320  —  —  
  Fair value measurements at reporting date using:
As of December 31, 2019Quoted prices in
active markets
for identical
assets (Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies$19,940  $—  $19,940  $—  
Government-sponsored entities156,255  —  156,255  —  
Municipal bonds325,455  —  325,455  —  
Mortgage-backed securities476,634  —  476,634  —  
Total available-for-sale securities978,284  —  978,284  —  
Equity securities18,810  18,810  —  —  
Derivatives - interest rate customer swaps36,089  —  36,089  —  
Derivatives - risk participation agreements10  —  10  —  
Trading securities held in the “rabbi trust” (1)6,119  6,119  —  —  
Liabilities:
Derivatives - interest rate customer swaps$36,580  $—  $36,580  $—  
Derivatives - risk participation agreements242  —  242  —  
Deferred compensation “rabbi trust” (1)6,112  6,112  —  —  
_____________________
(1) The Company has adopted a special trust for the Deferred Compensation Plan called a “rabbi trust”. The rabbi trust is an arrangement that is used to accumulate assets that may be used to fund the Company’s obligation to pay benefits under the Deferred Compensation Plan. To prevent immediate taxation to the executives who participate in the Deferred Compensation Plan, the amounts placed in the rabbi trust must remain subject to the claims of the Company’s creditors. The investments chosen by the participants in the Deferred Compensation Plan are mirrored by the rabbi trust as a way to minimize the earnings volatility of the Deferred Compensation Plan.
As of June 30, 2020 and December 31, 2019, available-for-sale securities consisted of U.S. government and agencies securities, government-sponsored entities securities, municipal bonds, and mortgage-backed securities. Available-for-sale Level 2 securities generally have quoted prices but are traded less frequently than exchange-traded securities and can be priced using
market data from similar assets and include government-sponsored entities securities, municipal bonds, mortgage-backed securities, “off-the-run” U.S. Treasury securities, and certain investments in Small Business Administration's (the "SBA") loans (which are categorized as U.S. government and agencies securities). “Off-the-run” U.S. Treasury securities are Treasury bonds and notes issued before the most recently issued bond or note of a particular maturity. When Treasuries move to the secondary over-the-counter market, they become less frequently traded, therefore, they are considered “off-the-run.” No investments held as of June 30, 2020 or December 31, 2019 were categorized as Level 3.
As of June 30, 2020 and December 31, 2019, equity securities consisted of Level 1 money market mutual funds that are valued with prices quoted in active markets.
In managing its interest rate and credit risk, the Company may utilize derivative instruments including interest rate customer swaps, interest rate swaps, and risk participation agreements. As a service to its customers, the Company may utilize derivative instruments including customer foreign exchange forward contracts to manage its foreign exchange risk, if any. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities, and therefore, they have been categorized as a Level 2 measurement as of June 30, 2020 and December 31, 2019. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 8: Derivatives and Hedging Activities” for further details.
To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Counterparty exposure is evaluated by netting positions that are subject to master netting agreements, as well as considering the amount of collateral securing the position.
The Company has determined that the majority of inputs used to value its derivatives are within Level 2. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy as of June 30, 2020 and December 31, 2019.
Trading securities held in the rabbi trust consist of publicly traded mutual fund investments that are valued at prices quoted in active markets. Therefore, they have been categorized as Level 1 as of June 30, 2020 and December 31, 2019.
The Company accounts for its investments held in the rabbi trust in accordance with ASC 320, Investments - Debt and Equity Securities. The investments held in the rabbi trust are classified as trading securities. The assets of the rabbi trust are carried at their fair value within other assets on the Consolidated Balance Sheets. Changes in the fair value of the securities are recorded as an increase or decrease in other income each quarter. The deferred compensation liability reflects the market value of the securities selected by the participants and is included within other liabilities on the Consolidated Balance Sheets. Changes in the fair value of the liability are recorded as an increase or decrease in salaries and employee benefits expense each quarter.
There were no transfers for assets or liabilities recorded at fair value on a recurring basis as of June 30, 2020 and December 31, 2019. There were no Level 3 assets valued on a recurring basis at June 30, 2020 or December 31, 2019. There were no changes in the valuation techniques used for measuring the fair value.
The following tables present the Company’s assets measured at fair value on a non-recurring basis during the periods ended June 30, 2020 and June 30, 2019, respectively, aggregated by the level in the fair value hierarchy within which those measurements fall.
 As of June 30, 2020Fair value measurements at reporting date using:Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Three months ended June 30, 2020Six months ended June 30, 2020
(In thousands)
Assets:
Impaired loans (1)$98  $—  $—  $98  $(1,219) $(1,198) 
_____________________
(1)Collateral-dependent impaired loans held as of June 30, 2020 that had write-downs or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2020.
 As of June 30, 2019Fair value measurements at reporting date using:Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Three months ended June 30, 2019Six months ended June 30, 2019
(In thousands)
Assets:
Impaired loans (1)$1,144  $—  $—  $1,144  $220  $592  
_____________________
(1)Collateral-dependent impaired loans held as of June 30, 2019 that had write-downs or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2019.
The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:
 As of June 30, 2020
Fair ValueValuation
Technique		Unobservable
Input		Range of
Inputs
Utilized 		Weighted
Average of
Inputs
Utilized
(In thousands)
Impaired Loans$98  Appraisals of CollateralDiscount for costs to sell
10% - 10%
10%
Appraisal adjustments—%—%
 As of June 30, 2019
Fair ValueValuation
Technique		Unobservable
Input		Range of
Inputs
Utilized 		Weighted
Average of
Inputs
Utilized
(In thousands)
Impaired Loans$1,144  Appraisals of CollateralDiscount for costs to sell
—% - 5%
4%
Appraisal adjustments—%—%
Impaired loans include those loans that were adjusted to the fair value of underlying collateral as required under ASC 310, Receivables. The amount does not include impaired loans that are measured based on expected future cash flows discounted at the respective loan’s original effective interest rate, as that amount is not considered a fair value measurement. The Company uses appraisals, which management may adjust to reflect estimated fair value declines, or may apply other discounts to appraised values for unobservable factors resulting from its knowledge of the property or consideration of broker quotes. The appraisers use a market, income, and/or a cost approach in determining the value of the collateral. Therefore, they have been categorized as a Level 3 measurement.
The following tables present the carrying values and fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis:
 As of June 30, 2020
Book ValueFair ValueQuoted prices 
in active
markets for
identical
assets 
(Level 1)		Significant 
other
observable
inputs
(Level 2)		Significant
unobservable
inputs 
(Level 3)
(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents$179,027  $179,027  $179,027  $—  $—  
Investment securities held-to-maturity42,495  43,351  —  43,351  —  
Loans held for sale9,786  9,958  —  9,958  —  
Loans, net7,243,630  7,082,051  —  —  7,082,051  
Other financial assets71,246  71,246  —  71,246  —  
FINANCIAL LIABILITIES:
Deposits7,427,397  7,429,520  —  7,429,520  —  
Securities sold under agreements to repurchase46,623  46,623  —  46,623  —  
Federal Home Loan Bank borrowings426,313  428,014  —  428,014  —  
Junior subordinated debentures106,363  69,863  —  —  69,863  
Other financial liabilities2,557  2,557  —  2,557  —  
 As of December 31, 2019
Book ValueFair ValueQuoted prices 
in active
markets for
identical
assets 
(Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs 
(Level 3)
(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents$292,479  $292,479  $292,479  $—  $—  
Investment securities held-to-maturity48,212  47,949  —  47,949  —  
Loans held for sale7,386  7,475  —  7,475  —  
Loans, net6,904,722  6,883,360  —  —  6,883,360  
Other financial assets67,348  67,348  —  67,348  —  
FINANCIAL LIABILITIES:
Deposits7,241,476  7,241,739  —  7,241,739  —  
Securities sold under agreements to repurchase53,398  53,398  —  53,398  —  
Federal Home Loan Bank borrowings350,829  351,233  —  351,233  —  
Junior subordinated debentures106,363  96,363  —  —  96,363  
Other financial liabilities1,957  1,957  —  1,957  —  
The estimated fair values have been determined by using available quoted market information or other appropriate valuation methodologies. The aggregate fair value amounts presented above do not represent the underlying value of the financial assets and liabilities of the Company taken as a whole as they do not reflect any premium or discount the Company might recognize if the assets were sold or the liabilities sold, settled, or redeemed. An excess of fair value over book value on financial assets represents a premium, or gain, the Company might recognize if the assets were sold, while an excess of book value over fair value on financial liabilities represents a premium, or gain, the Company might recognize if the liabilities were sold, settled, or redeemed prior to maturity. Conversely, losses would be recognized if assets were sold where the book value exceeded the fair value or liabilities were sold where the fair value exceeded the book value.
The fair value estimates provided are made at a specific point in time, based on relevant market information and the characteristics of the financial instrument. The estimates do not provide for any premiums or discounts that could result from concentrations of ownership of a financial instrument. Because no active market exists for some of the Company’s financial instruments, certain fair value estimates are based on subjective judgments regarding current economic conditions, risk characteristics of the financial instruments, future expected loss experience, prepayment assumptions, and other factors. The resulting estimates involve uncertainties and are considered best estimates. Changes made to any of the underlying assumptions could significantly affect the estimates.
Cash and cash equivalents
The carrying value reported in the balance sheet for cash and cash equivalents approximates fair value due to the short-term nature of their maturities and these assets are classified as Level 1 measurements.
Investment securities held-to-maturity
Investment securities held-to-maturity consist of mortgage-backed securities as of June 30, 2020 and December 31, 2019. The mortgage-backed securities are fixed income instruments that are not quoted on an exchange, but may be traded in active markets. The fair value of these securities is based on quoted market prices obtained from external pricing services. The principal market for our securities portfolio is the secondary institutional market, with an exit price that is predominantly reflective of bid level pricing in that market. Accordingly, held-to-maturity mortgage-backed securities are classified as Level 2.
There were no transfers of the Company's financial instruments that are not measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019.
Loans held for sale
Loans held for sale are recorded at the lower of cost or fair value in the aggregate. Fair value estimates are based on actual commitments to sell the loans to investors at an agreed upon price or current market prices if rates have changed since the time the loan closed. Accordingly, loans held for sale are included in the Level 2 fair value category.
Loans, net
Fair value estimates are based on loans with similar financial characteristics. The Company estimates the fair value of loans using the exit price notion under ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which includes identifying an exit price using current market information for origination rates and making certain adjustments to incorporate credit risk, transaction costs and other adjustments utilizing publicly available rates and indexes. Loans, net are included in the Level 3 fair value category based upon the inputs and valuation techniques used.
Other financial assets
Other financial assets consist of accrued interest and fees receivable, and stock in the Federal Home Loan Bank of Boston (“FHLB”) and the Federal Reserve Bank (“FRB”), for which the carrying amount approximates fair value, and these assets are classified as Level 2 measurements.
Deposits
The fair values reported for transaction accounts (demand, NOW, savings, and money market) equal their respective book values reported on the balance sheet and these liabilities are classified as Level 2 measurements. The fair values disclosed are, by definition, equal to the amount payable on demand at the reporting date. The fair values for certificates of deposit are based on the discounted value of contractual cash flows. The discount rates used are representative of approximate rates currently offered on certificates of deposit with similar remaining maturities and these liabilities are classified as Level 2 measurements.
Securities sold under agreements to repurchase
The fair values of securities sold under agreements to repurchase are estimated based on contractual cash flows discounted at the Bank’s incremental borrowing rate for FHLB borrowings with similar maturities and these liabilities have been classified as Level 2 measurements.
Federal funds purchased, if any
The carrying amounts of federal funds purchased, if any, approximate fair value due to their short-term nature and therefore these funds have been classified as Level 2 measurements.
Federal Home Loan Bank borrowings
The fair values reported for FHLB borrowings are estimated based on the discounted value of contractual cash flows. The discount rate used is based on the Bank’s estimated current incremental borrowing rate for FHLB borrowings of similar maturities and therefore these borrowings have been classified as Level 2 measurements.
Junior subordinated debentures
The fair values of the junior subordinated debentures issued by Boston Private Capital Trust I and Boston Private Capital Trust II are estimated using Level 3 inputs such as the interest rates on these securities, current rates for similar debt, and regulatory changes that would result in an unfavorable change in the regulatory capital treatment of this type of debt.
Other financial liabilities
Other financial liabilities consists of accrued interest payable for which the carrying amount approximates fair value and is classified as Level 2 measurements.
Financial instruments with off-balance sheet risk, if any
The Bank’s commitments to originate loans and for unused lines and outstanding letters of credit are primarily at market interest rates and therefore, the carrying amount approximates fair value.
v3.20.2
Loan Portfolio and Credit Quality
 6 Months Ended
Jun. 30, 2020
Loans and Leases Receivable Disclosure [Abstract]  
Loan Portfolio and Credit Quality Loan Portfolio and Credit Quality
The Bank’s lending activities are conducted principally in the regions of New England, Northern California, and Southern California. The Bank originates single and multi-family residential loans, commercial real estate loans, commercial and industrial loans, commercial tax-exempt loans, construction and land loans, and home equity and other consumer loans. Most loans are secured by borrowers’ personal or business assets. The ability of the Bank’s single family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic conditions within the Bank’s lending areas. Commercial, construction, and land borrowers’ ability to repay is generally dependent upon the health of the economy and real estate values, including the performance of the construction sector. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio is susceptible to changing conditions in the New England, Northern California, and Southern California economies and real estate markets.
Beginning in the first quarter of 2020, the Company made a change to the loan portfolio segmentation in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given their different underlying risk characteristics. Beginning in the second quarter of 2020, the Company also added a segment for loans originated under the SBA's Paycheck Protection Program (the "PPP"). For the period ended December 31, 2019, there were no PPP loans as the SBA initiated the program in the first quarter of 2020 in response to the COVID-19 pandemic.
The following table presents a summary of the loan portfolio based on the portfolio segment as of the dates indicated:
 June 30, 2020December 31, 2019
 (In thousands)
Commercial and industrial$565,748  $694,034  
Paycheck Protection Program370,034  —  
Commercial tax-exempt419,264  447,927  
Commercial real estate2,676,708  2,551,274  
Construction and land240,211  225,983  
Residential2,859,627  2,839,155  
Home equity84,588  83,657  
Consumer and other116,774  134,674  
Total$7,332,954  $6,976,704  
The following table presents nonaccrual loans receivable by class of receivable as of the dates indicated:
June 30, 2020December 31, 2019
(In thousands)
Commercial and industrial$3,649  $582  
Commercial real estate5,285  —  
Residential16,394  13,993  
Home equity195  1,525  
Consumer and other81  3  
Total$25,604  $16,103  
The Bank’s policy is to discontinue the accrual of interest on a loan when the collectability of principal or interest is in doubt. In certain instances, although infrequent, loans that have become 90 days or more past due may remain on accrual status if the value of the collateral securing the loan is sufficient to cover principal and interest and the loan is in the process of collection. There was one commercial real estate loan with a balance less than $0.1 million 90 days or more past due, but still accruing, as of June 30, 2020 and no loans 90 days or more past due, but still accruing, as of December 31, 2019. The Bank’s policy for returning a loan to accrual status requires the loan to be brought current and for the client to show a history of making timely payments (generally six consecutive months). For troubled debt restructured loans (“TDRs”), a return to accrual status generally requires timely payments for a period of six months in accordance with the restructured loan terms, along with meeting other criteria.
The following tables show the payment status of loans receivable by class of receivable as of the dates indicated:
June 30, 2020
Accruing Past DueNonaccrual Loans
30-59 Days Past Due 60-89 Days Past DueTotal Accruing Past DueCurrent30-89 Days Past Due90 Days or
Greater
Past Due		Total Non-Accrual LoansCurrent Accruing LoansTotal
Loans
Receivable
(In thousands)
Commercial and industrial$3,058  $43  $3,101  $636  $—  $3,013  $3,649  $558,998  $565,748  
Paycheck Protection Program—  —  —  —  —  —  —  370,034  370,034  
Commercial tax-exempt—  —  —  —  —  —  —  419,264  419,264  
Commercial real estate (1)—  925  975  5,285  —  —  5,285  2,670,448  2,676,708  
Construction and land—  —  —  —  —  —  —  240,211  240,211  
Residential—  747  747  7,473  1,586  7,335  16,394  2,842,486  2,859,627  
Home equity489  251  740  8  139  48  195  83,653  84,588  
Consumer and other7  15  22  1  —  80  81  116,671  116,774  
Total$3,554  $1,981  $5,585  $13,403  $1,725  $10,476  $25,604  $7,301,765  $7,332,954  
______________________
(1) There was one commercial real estate loan with a balance less than $0.1 million that was 90+ days past due and accruing at June 30, 2020. Total accruing past due amount will not sum across for this reason.
December 31, 2019
Accruing Past DueNonaccrual Loans
30-59 Days Past Due60-89 Days Past DueTotal Accruing Past DueCurrent30-89 Days Past Due90 Days or Greater Past DueTotal Non-Accrual LoansCurrent Accruing LoansTotal Loans Receivable
(In thousands)
Commercial and industrial$828  $—  $828  $—  $241  $341  $582  $692,624  $694,034  
Commercial tax-exempt—  —  —  —  —  —  —  447,927  447,927  
Commercial real estate1,420  —  1,420  —  —  —  —  2,549,854  2,551,274  
Construction and land—  —  —  —  —  —  —  225,983  225,983  
Residential19,133  1,038  20,171  9,593  759  3,641  13,993  2,804,991  2,839,155  
Home equity369  —  369  220  148  1,157  1,525  81,763  83,657  
Consumer and other1,008  2,149  3,157  1  —  2  3  131,514  134,674  
Total$22,758  $3,187  $25,945  $9,814  $1,148  $5,141  $16,103  $6,934,656  $6,976,704  
Nonaccrual and delinquent loans are affected by many factors, such as economic and business conditions, interest rates, unemployment levels, and real estate collateral values, among others. In periods of prolonged economic decline, borrowers may become more severely affected over time as liquidity levels decline and the borrower’s ability to continue to make payments deteriorates.
With respect to real estate collateral values, the declines from the peak, as well as the value of the real estate at the time of origination versus the current value, can impact the level of problem loans. For instance, if the loan to value ratio at the time of renewal has increased due to the decline in the real estate value since origination, the loan may no longer meet the Bank’s underwriting standards and may be considered for classification as a problem loan dependent upon a review of risk factors. There could be an increase in these situations as the economic conditions brought on by the COVID-19 pandemic could lead to a decline in collateral values.
Generally when a collateral dependent loan becomes impaired, an updated appraisal of the collateral, if appropriate, is obtained. If the impaired loan has not been upgraded to a performing status within a reasonable amount of time, the Bank will continue to obtain updated appraisals as deemed necessary, especially during periods of declining property values. The COVID-19 pandemic has limited the Bank’s ability to obtain updated appraisals. In lieu of appraisals, the Bank may use other valuation techniques in the short-term. The Bank did not use any alternative valuation techniques in the second quarter of 2020.
The past due status of a loan is determined in accordance with its contractual repayment terms. All loan types are reported past due when one scheduled payment is due and unpaid for 30 days or more.
Credit quality indicators
The Bank uses a risk rating system to monitor the credit quality of its loan portfolio. Loan classifications are assessments made by the Bank of the status of the loans based on the facts and circumstances known to the Bank, including management’s judgment, at the time of assessment. Some or all of these classifications may change in the future if there are unexpected changes in the financial condition of the borrower, including but not limited to, changes resulting from continuing deterioration in employment levels, general business and economic conditions on a national basis or in the local markets in which the Bank operates adversely affecting, among other things, real estate values. Such conditions, as well as other factors which adversely affect borrowers’ ability to service or repay loans, typically result in changes in loan default and charge-off rates, and increased provisions for loan losses, which would adversely affect the Company’s financial performance and financial condition. These circumstances are not entirely foreseeable and, as a result, it may not be possible to accurately reflect them in the Company’s analysis of credit risk. Generally, only commercial loans, including commercial real estate, other commercial and industrial loans, commercial tax-exempt loans, and construction and land loans, are given a numerical grade.
A summary of the rating system used by the Bank is included here from Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, follows:
Pass - All loans graded as pass are considered acceptable credit quality by the Bank and are grouped for purposes of calculating the allowance for loan losses. For residential, home equity and consumer loans, the Bank classifies loans as pass unless there is known information such as delinquency or client requests for modifications which, due to financial difficulty, would then generally result in a risk rating such as special mention or more severe depending on the factors.
Special mention - Loans rated in this category are defined as having potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the Bank’s credit position. These loans are currently protected but have the potential to deteriorate to a substandard rating. For commercial loans, the borrower’s financial performance may be inconsistent or below forecast, creating the possibility of liquidity problems and shrinking debt service coverage. In loans having this rating, the primary source of repayment is still good, but there is increasing reliance on collateral or guarantor support. Collectability of the loan is not yet in jeopardy. In particular, loans in this category are considered more variable than other categories, since they will typically migrate through categories more quickly.
Substandard - Loans rated in this category are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. A substandard credit has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans may be either still accruing or nonaccruing depending upon the severity of the risk and other factors such as the value of the collateral, if any, and past due status.
Doubtful - Loans rated in this category indicate that collection or liquidation in full on the basis of currently existing facts, conditions, and values, is highly questionable and improbable. Loans in this category are usually on nonaccrual and classified as impaired.
These above credit quality indicators are assigned upon origination with commercial loans reassessed on an annual basis while noncommercial loans are reassessed when the loan becomes past due greater than 90 days or when ad-hoc information becomes available to the loan officer. Further the commercial loan portfolio is subject for selection of an independent review, also on an annual basis. In addition, those loans not considered to be "Pass" rated, are subject to a Loan Committee review on a quarterly basis. Lastly, on an ad-hoc basis as new information becomes available to the loan officer on the credit quality of the borrower, the credit quality indicators are reassessed.
The following tables present the loan portfolio’s credit risk profile by internally assigned grade and class of receivable as of the dates indicated:
June 30, 2020
By Loan Grade or Nonaccrual Status
PassSpecial
Mention 		Accruing
Classified (1)		Nonaccrual
Loans		Total
(In thousands)
Commercial and industrial$513,576  $8,628  $39,895  $3,649  $565,748  
Paycheck Protection Program370,034  —  —  —  370,034  
Commercial tax-exempt408,326  2,460  8,478  —  419,264  
Commercial real estate2,460,827  175,661  34,935  5,285  2,676,708  
Construction and land235,378  4,833  —  —  240,211  
Residential2,839,005  —  4,228  16,394  2,859,627  
Home equity83,343  —  1,050  195  84,588  
Consumer and other116,393  300  —  81  116,774  
Total$7,026,882  $191,882  $88,586  $25,604  $7,332,954  
December 31, 2019
By Loan Grade or Nonaccrual Status
PassSpecial
Mention 		Accruing
Classified (1)		Nonaccrual
Loans		Total
(In thousands)
Commercial and industrial$656,364  $12,101  $24,987  $582  $694,034  
Commercial tax-exempt436,721  7,154  4,052  —  447,927  
Commercial real estate2,495,702  32,014  23,558  —  2,551,274  
Construction and land225,526  457  —  —  225,983  
Residential2,820,909  —  4,253  13,993  2,839,155  
Home equity81,060  —  1,072  1,525  83,657  
Consumer and other134,371  300  —  3  134,674  
Total$6,850,653  $52,026  $57,922  $16,103  $6,976,704  
______________________
(1) Accruing Classified may include both Substandard and Doubtful classifications.
The following table presents the loan portfolio’s credit risk profile by loan origination year and class of receivable as of the dates indicated:
June 30, 2020
Loan Origination Year By Loan Grade or Nonaccrual Status
20202019201820172016PriorRevolvingTotal
(In thousands)
Commercial and industrial
Pass$24,040  $92,841  $72,857  $16,771  $25,701  $57,514  $223,852  $513,576  
Special Mention—  676  963  1,439  —  2,837  2,713  8,628  
Accruing Classified (1)200  4,423  7,455  14,726  1,358  442  11,291  39,895  
Nonaccrual49  161  —  197  —  14  3,228  3,649  
Total$24,289  $98,101  $81,275  $33,133  $27,059  $60,807  $241,084  $565,748  
Paycheck Protection Program
Pass$370,034  $—  $—  $—  $—  $—  $—  $370,034  
Total$370,034  $—  $—  $—  $—  $—  $—  $370,034  
Commercial tax-exempt
Pass$12,665  $15,912  $40,819  $24,606  $107,595  $206,729  $—  $408,326  
Special Mention—  —  —  —  —  2,460  —  2,460  
Accruing Classified (1)—  —  —  3,975  —  4,503  —  8,478  
Total$12,665  $15,912  $40,819  $28,581  $107,595  $213,692  $—  $419,264  
Commercial real estate
Pass$187,358  $481,495  $260,482  $338,837  $393,779  $725,465  $73,411  $2,460,827  
Special Mention20,640  34,666  27,114  790  37,704  54,747  —  175,661  
Accruing Classified (1)1,252  11,536  —  1,179  8,878  12,090  —  34,935  
Nonaccrual—  5,285  —  —  —  —  —  5,285  
Total$209,250  $532,982  $287,596  $340,806  $440,361  $792,302  $73,411  $2,676,708  
Construction and land
Pass$5,937  $61,095  $77,695  $47,276  $16,928  $26,447  $—  $235,378  
Special Mention—  —  4,833  —  —  —  —  4,833  
Total$5,937  $61,095  $82,528  $47,276  $16,928  $26,447  $—  $240,211  
Residential
Pass$332,172  $583,429  $448,630  $459,227  $438,329  $577,218  $—  $2,839,005  
Accruing Classified (1)—  —  —  —  —  4,228  —  4,228  
Nonaccrual—  262  1,084  2,529  —  12,519  —  16,394  
Total$332,172  $583,691  $449,714  $461,756  $438,329  $593,965  $—  $2,859,627  
Home equity
Pass$—  $—  $454  $248  $686  $12,998  $68,957  $83,343  
Accruing Classified (1)—  —  —  —  —  1,050  —  1,050  
Nonaccrual—  —  —  —  —  56  139  195  
Total$—  $—  $454  $248  $686  $14,104  $69,096  $84,588  
Consumer and other
Pass$1,388  $318  $38  $—  $88  $806  $113,755  $116,393  
Special Mention—  —  —  —  —  —  300  300  
Nonaccrual—  —  73  —  —  —  8  81  
Total$1,388  $318  $111  $—  $88  $806  $114,063  $116,774  
Total
Pass$933,594  $1,235,090  $900,975  $886,965  $983,106  $1,607,177  $479,975  $7,026,882  
Special Mention20,640  35,342  32,910  2,229  37,704  60,044  3,013  191,882  
Accruing Classified (1)1,452  15,959  7,455  19,880  10,236  22,313  11,291  88,586  
Nonaccrual49  5,708  1,157  2,726  —  12,589  3,375  25,604  
Total$955,735  $1,292,099  $942,497  $911,800  $1,031,046  $1,702,123  $497,654  $7,332,954  
______________________
(1) Accruing Classified may include both Substandard and Doubtful classifications.
The following tables present, by class of receivable, the balance of impaired loans with and without a related allowance, the associated allowance for those impaired loans with a related allowance, and the total unpaid principal on impaired loans:
As of and for the three and six months ended June 30, 2020
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceQTD Average Recorded InvestmentYTD Average Recorded InvestmentQTD Interest Income Recognized while ImpairedYTD Interest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$3,434  $3,456  n/a$1,323  $1,058  $—  $6  
Paycheck Protection Program—  —  n/a—  —  —  —  
Commercial tax-exempt—  —  n/a—  —  —  —  
Commercial real estate6,007  6,122  n/a6,064  3,964  8  17  
Construction and land—  —  n/a—  —  —  —  
Residential16,309  16,569  n/a16,331  15,903  143  260  
Home equity391  391  n/a1,258  1,383  7  10  
Consumer and other—  —  n/a—  —  —  —  
Subtotal$26,141  $26,538  n/a24,976  $22,308  158  $293  
With an allowance recorded:
Commercial and industrial $259  $268  $(161) 265  $273  1  $1  
Paycheck Protection Program—  —  —  —  —  —  —  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  
Residential528  528  (60) 530  532  2  6  
Home equity263  263  (18) 267  269  2  4  
Consumer and other—  —  —  —  —  —  —  
Subtotal$1,050  $1,059  $(239) $1,062  $1,074  $5  $11  
Total:
Commercial and industrial$3,693  $3,724  $(161) $1,588  $1,331  $1  $7  
Paycheck Protection Program—  —  —  —  —  —  —  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate6,007  6,122  —  6,064  3,964  8  17  
Construction and land—  —  —  —  —  —  —  
Residential16,837  17,097  (60) 16,861  16,435  145  266  
Home equity654  654  (18) 1,525  1,652  9  14  
Consumer and other—  —  —  —  —  —  —  
Total$27,191  $27,597  $(239) $26,038  $23,382  $163  $304  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
As of and for the three and six months ended June 30, 2019
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceQTD Average Recorded InvestmentYTD Average Recorded InvestmentQTD Interest Income Recognized while ImpairedYTD Interest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$1,669  $2,616  n/a$1,520  $1,328  $10  $25  
Commercial tax-exempt—  —  n/a—  —  —  —  
Commercial real estate—  —  n/a—  78  —  256  
Construction and land—  —  n/a—  —  —  —  
Residential15,127  15,387  n/a14,079  12,605  103  240  
Home equity2,497  3,059  n/a2,359  2,018  1  1  
Consumer and other—  —  n/a—  —  —  —  
Subtotal$19,293  $21,062  n/a$17,958  $16,029  $114  $522  
With an allowance recorded:
Commercial and industrial$441  $441  $93  $596  $1,036  $4  $20  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  
Residential778  778  74  733  752  6  13  
Home equity274  274  24  69  776  1  1  
Consumer and other—  —  —  —  —  —  —  
Subtotal$1,493  $1,493  $191  $1,398  $2,564  $11  $34  
Total:
Commercial and industrial$2,110  $3,057  $93  $2,116  $2,364  $14  $45  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  78  —  256  
Construction and land—  —  —  —  —  —  —  
Residential15,905  16,165  74  14,812  13,357  109  253  
Home equity2,771  3,333  24  2,428  2,794  2  2  
Consumer and other—  —  —  —  —  —  —  
Total$20,786  $22,555  $191  $19,356  $18,593  $125  $556  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
As of and for the year ended December 31, 2019
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceAverage Recorded InvestmentInterest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$470  $553  n/a$1,062  $268  
Commercial tax-exempt—  —  n/a—  —  
Commercial real estate733  733  n/a155  262  
Construction and land—  —  n/a—  —  
Residential15,362  15,622  n/a13,700  636  
Home equity1,557  2,119  n/a2,095  35  
Consumer and other—  —  n/a—  —  
Subtotal$18,122  $19,027  n/a$17,012  $1,201  
With an allowance recorded:
Commercial and industrial$254  $254  $146  $736  $33  
Commercial tax-exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential538  538  67  1,130  23  
Home equity273  273  22  545  4  
Consumer and other—  —  —  —  —  
Subtotal$1,065  $1,065  $235  $2,411  $60  
Total:
Commercial and industrial$724  $807  $146  $1,798  $301  
Commercial tax-exempt—  —  —  —  —  
Commercial real estate733  733  —  155  262  
Construction and land—  —  —  —  —  
Residential15,900  16,160  67  14,830  659  
Home equity1,830  2,392  22  2,640  39  
Consumer and other—  —  —  —  —  
Total$19,187  $20,092  $235  $19,423  $1,261  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
When management determines that it is probable that the Bank will not collect all principal and interest on a loan in accordance with the original loan terms, the loan is designated as impaired.
On March 22, 2020, regulators issued an interagency statement encouraging financial institutions to work with borrowers affected by the COVID-19 pandemic. The interagency statement also provided additional information regarding loan modifications. The regulators indicated they will not criticize institutions for working with borrowers in a safe and sound manner and have indicated that related modifications will not automatically result in a TDR. The regulators also provided supervisory views that loans modified under this program would not be considered past due or nonaccrual.
The regulators view prudent loan modification programs offered to financial institution customers affected by the COVID-19 pandemic as positive and proactive actions that can manage adverse impacts on borrowers, and lead to improved loan performance and reduced credit risk. The statement indicated that short-term modifications made on a good faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief are not TDRs.
As of June 30, 2020, 336 residential and home equity loans with a current outstanding principal balance of $214.5 million were processed under this deferment program.
Loans that are designated as impaired require an analysis to determine the amount of impairment, if any. Impairment would be indicated as a result of the carrying value of the loan exceeding either the estimated collateral value, less costs to sell, for collateral dependent loans or the net present value of the projected cash flow, discounted at the loan’s contractual effective interest rate, for loans not considered to be collateral dependent. Generally, shortfalls in the analysis on collateral dependent loans would result in the impairment amount being charged-off to the allowance for loan losses. Shortfalls on cash flow
dependent loans may be carried as specific allocations to the general reserve unless a known loss is determined to have occurred, in which case, such known loss is charged-off.
Loans in the held for sale category are carried at the lower of amortized cost or estimated fair value in the aggregate and are excluded from the allowance for loan losses analysis.
As of June 30, 2020, the Bank has pledged $2.3 billion of loans in a blanket lien agreement with the FHLB. The Bank also has $358.2 million of loans pledged as collateral at the FRB for access to their discount window. As of December 31, 2019, the Bank had pledged $2.5 billion of loans to the FHLB and $395.3 million of loans at the FRB.
The Bank may, under certain circumstances, restructure loans as a concession to borrowers who are experiencing financial difficulty. These loans are outside of the guidelines to not be considered a TDR by recent regulatory guidance. Such loans are classified as TDRs and are included in impaired loans. TDRs typically result from the Bank’s loss mitigation activities which, among other things, could include rate reductions, payment extensions, and/or principal forgiveness. As of June 30, 2020 and December 31, 2019, TDRs totaled $14.8 million and $12.6 million, respectively. As of June 30, 2020, $8.9 million of the $14.8 million in TDRs were on accrual status. As of December 31, 2019, $7.1 million of the $12.6 million in TDRs were on accrual status.
Since all TDR loans are considered impaired loans, they are individually evaluated for impairment. The resulting impairment, if any, would have an impact on the allowance for loan losses as a specific reserve or charge-off. If, prior to the classification as a TDR, the loan was not impaired, there would have been a general reserve on the particular loan. Prior to the adoption of ASU 2016-13 on January 1, 2020, a general or allocated reserve would have been applied. Many loans initially categorized as TDRs are already on nonaccrual status and are already considered impaired. Therefore, there is generally not a material change to the allowance for loan losses when a nonaccruing loan is categorized as a TDR.
The following tables present the balance of TDRs that were restructured or defaulted during the periods indicated:
As of and for the three months ended June 30, 2020
Restructured Current QuarterTDRs that defaulted in the Current Quarter that were restructured in prior twelve months
# of LoansPre- modification recorded investmentPost- modification recorded investment# of LoansPost- modification recorded investment
(In thousands, except number of loans)
Commercial and industrial—  $—  $—  —  $—  
Paycheck Protection Program—  —  —  —  —  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential—  —  —  1  1,562  
Home equity—  —  —  —  —  
Consumer and other—  —  —  —  —  
Total—  $—  $—  1  $1,562  
v3.20.2
Allowance for Loan Losses
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Allowance for Loan Losses Allowance for Loan Losses
The allowance for loan losses is established based upon the Company's current estimate of expected lifetime credit losses on loans measured at amortized cost. Loan losses are charged against the allowance when management's assessments confirm that the Company will not collect the full amortized cost basis of a loan. Subsequent recoveries, if any, are credited to the allowance when collected.
Under the CECL methodology, which the Company adopted on January 1, 2020, the Company estimates credit losses on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output. The quantitative model utilizes a factor-based approach to estimate expected credit losses using probability of default and loss given default, which are derived from a selected peer group's historical default and loss experience. The model estimates expected credit losses using loan level data over the contractual life of the exposure, considering the effect of estimated prepayments and curtailments. Reasonable and supportable economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period, beyond which is a reversion to the Company's historical long-run average. Management has determined a reasonable and supportable period of two years and a straight line reversion period of twelve months to be appropriate for purposes of estimating expected credit losses. Management also applies a weight to the various forecasts chosen to determine the reasonable and supportable economic forecasts. The Company's qualitative assessment is based on factors outlined in regulatory guidance and include the following:
• Volume and trend of past-due, non-accrual, and adversely-graded loans
• Trends in volume and terms of loans
• Concentration risk
• Experience and depth of management
• Risk surrounding lending policy and underwriting standards
• Risk surrounding loan review
• Banking industry conditions, other external factors, and inherent model risk
Loans that no longer share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting. For the loans that will be individually assessed, the Company will use either a discounted cash flow approach or a fair value of collateral approach. The latter approach will be used for loans deemed to be collateral dependent or when foreclosure is probable.
Accrued interest receivable amounts are excluded from balances of loans held at amortized cost and are included within Accrued interest receivable on the consolidated balance sheet. Management has elected not to measure an allowance for credit losses on these amounts as the Company employs a timely write-off policy as generally any loan over 89 days past-due is put on non-accrual status and any associated accrued interest is reversed.
For periods disclosed prior to the adoption of ASU 2016-13 as of January 1, 2020, the Allowance for loan losses was determined under the incurred loss model. Refer to "Note 1: Basis of Presentation and Summary of Significant Account Policies" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the methodology.
The allowance for loan losses, which is reported as a reduction of outstanding loan balances, totaled $89.3 million and $72.0 million as of June 30, 2020 and December 31, 2019, respectively.
Beginning in the first quarter of 2020, the Company made a change to the loan portfolio segmentation as it relates to the allowance for loan losses in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given their different underlying risk characteristics. For the periods ended June 30, 2019, the Provision/(credit) for loan losses and related allowance balance in the allowance for loan losses for tax-exempt commercial and industrial loans is included with Commercial and industrial loans. Beginning in the second quarter of 2020, the Company made a change to the loan portfolio segmentation as it relates to the allowance for loan losses, adding the segment Paycheck Protection Program. For the periods ended June 30, 2019, there were no loans in this segment as the SBA initiated the program in the first quarter of 2020 in response to the COVID-19 pandemic. The following tables present a summary of the changes in the allowance for loan losses for the periods indicated:
As of and for the three months ended June 30,As of and for the six months ended June 30,
2020201920202019
(In thousands)
Allowance for loan losses, beginning of period:
Commercial and industrial$10,255  $15,687  $10,048  $15,912  
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt1,927  n/a6,016  n/a
Commercial real estate36,580  41,813  40,765  41,934  
Construction and land5,709  5,353  5,119  6,022  
Residential11,779  10,057  8,857  10,026  
Home equity303  796  778  1,284  
Consumer and other1,658  108  399  134  
Total allowance for loan losses, beginning of period$68,211  $73,814  $71,982  $75,312  
Impact of adopting ASU 2016-13:
Commercial and industrial$—  n/a$(565) n/a
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a(4,409) n/a
Commercial real estate—  n/a(14,455) n/a
Construction and land—  n/a(2,158) n/a
Residential—  n/a685  n/a
Home equity—  n/a(535) n/a
Consumer and other—  n/a1,052  n/a
Total impact of adopting ASU 2016-13$—  n/a$(20,385) n/a
Provision/(credit) for loan losses:
Commercial and industrial$(359) $550  $886  $137  
Paycheck Protection Program190  n/a190  n/a
Commercial tax-exempt559  n/a879  n/a
Commercial real estate11,095  1,898  21,365  1,588  
Construction and land3,815  (573) 6,563  (1,242) 
Residential5,986  (502) 8,223  (571) 
Home equity1,293  9  1,221  83  
Consumer and other25  (19) 239  (58) 
Total provision/(credit) for loan losses$22,604  $1,363  $39,566  $(63) 
As of and for the three months ended June 30,As of and for the six months ended June 30,
2020201920202019
(In thousands)
Loans charged off:
Commercial and industrial$(389) $(195) $(907) $(195) 
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a—  n/a
Commercial real estate—  —  —  —  
Construction and land—  —  —  —  
Residential—  —  —  —  
Home equity(1,157) —  (1,157) (562) 
Consumer and other—  —  (10) (2) 
Total charge offs$(1,546) $(195) $(2,074) $(759) 
Recoveries on loans previously charged off:
Commercial and industrial$52  $40  $97  $228  
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a—  n/a
Commercial real estate—  30  —  219  
Construction and land—  —  —  —  
Residential—  —  —  100  
Home equity—  —  132  —  
Consumer and other3  15  6  30  
Total recoveries$55  $85  $235  $577  
Allowance for loan losses, end of period:
Commercial and industrial$9,559  $16,082  $9,559  $16,082  
Paycheck Protection Program190  n/a190  n/a
Commercial tax-exempt2,486  n/a2,486  n/a
Commercial real estate47,675  43,741  47,675  43,741  
Construction and land9,524  4,780  9,524  4,780  
Residential17,765  9,555  17,765  9,555  
Home equity439  805  439  805  
Consumer and other1,686  104  1,686  104  
Total allowance for loan losses, end of period$89,324  $75,067  $89,324  $75,067  
The balance of the allowance for loan losses of $89.3 million as of June 30, 2020 represents an increase of $17.3 million from December 31, 2019. During the three and six months ended June 30, 2020, the Company recognized a Provision for loan loss expense of $22.6 million and $39.6 million, respectively. The increase in the allowance for loan losses in the first two quarters of 2020 was primarily driven by changes in economic forecasts in both the first quarter and second quarter of 2020 to reflect deteriorating economic conditions related to the COVID-19 pandemic and a change in the weight of forecast scenarios used to be weighted more heavily to the downside scenario, combined with an increase in qualitative factors to account for incremental risk not included in the quantitative model.
The balance of reserve for unfunded loan commitments of $7.1 million as of June 30, 2020 represents an increase of $6.0 million from December 31, 2019. The increase was driven by deteriorating economic conditions related to the COVID-19 pandemic increasing the reserve factor as well as an increase in commitments. This amount is recognized as Other expense within Noninterest expense.
Upon the adoption of ASU 2016-13 on January 1, 2020, the Company recognized a decrease in the allowance for loan losses of $20.4 million. The adoption amount was driven primarily by the portfolio composition, the short-term nature of many commercial loans, estimated prepayments and curtailments, a change to the loan portfolio segmentation in which Commercial and industrial and Commercial tax-exempt loans were bifurcated given the different underlying risk characteristics, and reasonable and supportable economic forecasts at the time of adoption.
Upon the adoption of ASU 2016-13 on January 1, 2020, the Company recognized an increase in the reserve of $1.4 million in the unfunded loan commitments expense. The net, after-tax impact of the $20.4 million decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million.
The allowance for loan losses is an estimate of the inherent risk of loss in the loan portfolio as of the consolidated balance sheet dates. Management estimates the level of the allowance based on all relevant information available. Changes to the required level in the allowance result in either a provision for loan loss expense, if an increase is required, or a credit to the
provision, if a decrease is required. Loan losses are charged to the allowance when available information confirms that specific loans, or portions thereof, are uncollectible. Recoveries on loans previously charged off are credited to the allowance when received in cash or when the Bank takes possession of other assets.
The following tables present the Company’s allowance for loan losses and loan portfolio as of June 30, 2020 and December 31, 2019 by portfolio segment, disaggregated by method of impairment analysis. The Company had no loans acquired with deteriorated credit quality as of June 30, 2020 or December 31, 2019.
June 30, 2020
Individually Evaluated
for Impairment		Collectively Evaluated
for Impairment		Total
Recorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan losses
(In thousands)
Commercial and industrial$3,693  $161  $562,055  $9,398  $565,748  $9,559  
Paycheck Protection Program—  —  370,034  190  370,034  190  
Commercial tax-exempt—  —  419,264  2,486  419,264  2,486  
Commercial real estate6,007  —  2,670,701  47,675  2,676,708  47,675  
Construction and land—  —  240,211  9,524  240,211  9,524  
Residential16,837  60  2,842,790  17,705  2,859,627  17,765  
Home equity654  18  83,934  421  84,588  439  
Consumer and other—  —  116,774  1,686  116,774  1,686  
Total$27,191  $239  $7,305,763  $89,085  $7,332,954  $89,324  
December 31, 2019
Individually Evaluated
for Impairment		Collectively Evaluated
for Impairment		Total
Recorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan losses
(In thousands)
Commercial and industrial$724  $146  $1,141,237  $15,918  $1,141,961  $16,064  
Commercial real estate733  —  2,550,541  40,765  2,551,274  40,765  
Construction and land—  —  225,983  5,119  225,983  5,119  
Residential15,900  67  2,823,255  8,790  2,839,155  8,857  
Home equity1,830  22  81,827  756  83,657  778  
Consumer and other—  —  134,674  399  134,674  399  
Total$19,187  $235  $6,957,517  $71,747  $6,976,704  $71,982  
v3.20.2
Derivatives and Hedging Activities
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities Derivatives and Hedging Activities
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and, to a lesser extent, the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are generally determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain loans, deposits, and borrowings. As a service to its customers, the Company may utilize derivative instruments including customer foreign exchange forward contracts to manage its foreign exchange risk, if any.
The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019:
 June 30, 2020December 31, 2019
 Asset derivativesLiability derivativesAsset derivativesLiability derivatives
 Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)
 (In thousands)
Derivatives designated as hedging instruments:
Interest rate swapsOther assets$—  Other liabilities$274  Other assets$—  Other liabilities$—  
Derivatives not designated as hedging instruments:
Interest rate customer swapsOther assets96,968  Other liabilities97,760  Other assets36,089  Other liabilities36,580  
Risk participation agreementsOther assets21  Other liabilities478  Other assets10  Other liabilities242  
Total$96,989  $98,512  $36,099  $36,822  
_____________________
(1)For additional details, see Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 5: Fair Value Measurements.”
The following table presents the effect of the Company’s derivative financial instruments on accumulated other comprehensive income for the three and six months ended June 30, 2020 and 2019:
Derivatives in cash
flow hedging
relationships
Amount of gain or (loss) recognized in OCI on derivatives
Location of gain
or (loss) reclassified
from accumulated
OCI into income
Amount of gain or (loss) reclassified from accumulated OCI into income
Three months ended June 30,Three months ended June 30,
2020201920202019
(In thousands)(In thousands)
Interest rate swaps$(426) $(9) Interest income/(expense)$(152) $191  
Total$(426) $(9) $(152) $191  
Derivatives in cash
flow hedging
relationships		Amount of gain or (loss) recognized in OCI on derivatives Location of gain
or (loss) reclassified
from accumulated
OCI into income		Amount of gain or (loss) reclassified from accumulated OCI into income
Six months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)(In thousands)
Interest rate swaps$(426) $(47) Interest income/(expense)$(152) $502  
Total$(426) $(47) $(152) $502  
The following table presents the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019:
Location of gain or (loss) reclassified from accumulated
OCI into income		Amount of gain or
(loss) recognized in
income on cash flow
hedging relationships		Amount of gain or
(loss) recognized in
income on cash flow
hedging relationships
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)
Total amounts of income and (expense) line items presented in the statement of operations in which the effects of fair value or cash flow hedges are recordedInterest income/(expense)$(152) $191  $(152) $502  
The effects of cash flow hedging:
Gain or (loss) on cash flow hedging relationships in ASC 815
Interest contracts - amount of gain or (loss) reclassified from accumulated other comprehensive income into incomeInterest income/(expense)$(152) $191  $(152) $502  
The Bank has agreements with its derivative counterparties that contain provisions where, if the Bank defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Bank could also be declared in default on its derivative obligations. The Bank was in compliance with these provisions as of June 30, 2020 and December 31, 2019.
The Bank also has agreements with certain of its derivative counterparties that contain provisions where, if the Bank fails to maintain its status as a well- or adequately-capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations under the agreements. The Bank was in compliance with these provisions as of June 30, 2020 and December 31, 2019.
Certain of the Bank’s agreements with its derivative counterparties contain provisions where, if specified, events or conditions occur that materially change the Bank’s creditworthiness in an adverse manner, the Bank may be required to fully collateralize its obligations under the derivative instruments. The Bank was in compliance with these provisions as of June 30, 2020 and December 31, 2019.
As of June 30, 2020 and December 31, 2019, the termination amounts related to collateral determinations of derivatives in a liability position were $98.9 million and $35.7 million, respectively. The Company has minimum collateral posting thresholds with its derivative counterparties. As of June 30, 2020 and December 31, 2019, the Company had pledged securities with a market value of $100.9 million and $40.0 million, respectively, against its obligations under these agreements. The collateral posted is typically greater than the current liability position; however, due to timing of liability position changes at period end, the funding of a collateral shortfall may take place shortly following period end.
Cash flow hedges of interest rate risk
The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements.
To accomplish this objective and strategy, the Bank has entered into one interest rate swap during 2020 with an effective date of April 14, 2020. The interest rate swap is designated as a cash flow hedge and involves the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed payments.
The one interest rate swap entered into during 2020 has a notional amount of $100 million and a term of eighteen months from its respective effective date. The interest rate swap will effectively fix the Bank's interest payments on $100 million of rolling three month FHLB advances at a rate of 0.48%.
Per ASU 2017-12, for derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. For active cash flow hedges, a portion of the balance reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made or received on the Company’s interest rate swaps.
Non-designated hedges
Derivatives not designated as hedges are not speculative and result from different services the Bank provides to qualified commercial clients. The Bank offers certain derivative products directly to such clients. The Bank economically hedges derivative transactions executed with commercial clients by entering into mirror-image, offsetting derivatives with third parties. Derivative transactions executed as part of these programs are not designated in ASC 815-qualifying hedging
relationships and are, therefore, marked-to-market through earnings each period. Because the derivatives have mirror-image contractual terms, the changes in fair value substantially offset through earnings. The net effect on earnings is primarily driven by changes in the credit valuation adjustment (“CVA”). The CVA represents the dollar amount of fair value adjustment related to nonperformance risk of both the Bank and its counterparties. Fees earned in connection with the execution of derivatives related to this program are recognized in the Consolidated Statements of Operations in other income. The Bank has interest rate swaps and caps related to this program with an aggregate notional amount of $1.6 billion as of June 30, 2020 and December 31, 2019. As of June 30, 2020 and December 31, 2019, there were no foreign currency exchange contracts related to this program.
In addition, as a participant lender, the Bank has guaranteed performance on the pro-rated portion of swaps executed by other financial institutions. As the participant lender, the Bank is providing a partial guarantee, but is not a direct party to the related swap transactions. The Bank has no obligations under the risk participation agreements unless the borrower defaults on their swap transaction with the lead bank and the swap is in a liability position to the borrower. In that instance, the Bank has agreed to pay the lead bank a portion of the swap’s termination value at the time of the default. The derivative transactions entered into as part of these agreements are not designated, as per ASC 815, as qualifying hedging relationships and are, therefore, marked-to-market through earnings each period. As of June 30, 2020 and December 31, 2019, there were seven of these risk participation transactions with an aggregate notional amount of $58.1 million and $58.8 million, respectively.
The Bank has also participated out to other financial institutions a pro-rated portion of swaps executed by the Bank. The other financial institution has no obligations under the risk participation agreements unless the borrowers default on their swap transactions with the Bank and the swaps are in liability positions to the borrower. In those instances, the other financial institution has agreed to pay the Bank a portion of the swap’s termination value at the time of the default. The derivative transactions entered into as part of these agreements are not designated, as per ASC 815, as qualifying hedging relationships and are, therefore, marked-to-market through earnings each period. As of June 30, 2020, there were five of these risk participation transactions with an aggregate notional amount of $30.4 million. As of December 31, 2019, there were four of these risk participation transactions with an aggregate notional amount of $20.5 million.
The following table presents the effect of the Bank’s derivative financial instruments not designated as hedging instruments in the Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019.
Amount of gain or (loss), net,
recognized in income on derivatives
Derivatives not designated as
hedging instruments		Location of gain or (loss) recognized in income on derivativesThree months ended June 30,Six months ended June 30,
2020201920202019
 (In thousands)
Interest rate swapsOther income/(expense)$254  $(64) $(301) $(255) 
Risk participation agreementsOther income/(expense)(24) (213) (226) (109) 
Total$230  $(277) $(527) $(364) 
v3.20.2
Income Taxes
 6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table presents the components of income tax expense and effective tax rates for the periods indicated:
Six months ended June 30,
20202019
(In thousands)
Income/(loss) before income taxes$(1,549) $49,277  
Income tax expense943  10,286  
Net income/(loss) before attribution to noncontrolling interests$(2,492) $38,991  
Effective tax rate(60.9)%20.9 %
The effective tax rate for the six months ended June 30, 2020 of (60.9)%, with related tax expense of $0.9 million, was calculated based on a forecasted 2020 annual effective tax rate. The effective tax rate for the six months ended June 30, 2019 of 20.9%, with related tax expense of $10.3 million, was calculated based on a forecasted 2019 annual effective tax rate.
The effective tax rate for the six months ended June 30, 2020 was negative due primarily to the impact of earnings from tax-exempt investments and income tax credits in relation to near break-even income. The tax rate is less meaningful in periods where the Company is near break-even as a result of the larger proportionate impact of tax benefit items compared to pre-tax income. The effective tax rate for the six months ended June 30, 2019 is less than the statutory rate of 21% due primarily to earnings from tax-exempt investments and income tax credits, which were partially offset by state and local income taxes and the accounting for investments in affordable housing projects. The effective tax rate for the six months ended June 30, 2020 is less than the effective tax rate for the same period in 2019 due primarily to the lower level of income in 2020 as compared to
2019. In addition, the effective tax rate for the six months ended June 30, 2020 includes income tax expense of $0.5 million related to employee share-based payments.
v3.20.2
Noncontrolling Interests
 6 Months Ended
Jun. 30, 2020
Noncontrolling Interest [Abstract]  
Noncontrolling Interests Noncontrolling Interests
Noncontrolling interests consist of equity owned by management of the Company’s majority-owned affiliate, DGHM. Net income attributable to noncontrolling interests in the Consolidated Statements of Operations represents the net income allocated to the noncontrolling interest owners of DGHM. Net income allocated to the noncontrolling interest owners was zero and $69 thousand for the three-month periods ended June 30, 2020 and 2019, respectively, and $6 thousand and $169 thousand for the six-month periods ended June 30, 2020 and 2019, respectively.
On the Consolidated Balance Sheets, noncontrolling interests are included as the sum of the capital and undistributed profits allocated to the noncontrolling interest owners. Typically, this balance is included in a company’s permanent shareholders’ equity in the Consolidated Balance Sheets. When the noncontrolling interest owners’ rights include certain redemption features, as described in ASC 480, Distinguishing Liabilities from Equity, such redeemable noncontrolling interests are classified as mezzanine equity and are not included in permanent shareholders’ equity. Due to the redemption features of the noncontrolling interests of DGHM, the Company had redeemable noncontrolling interests held in mezzanine equity in the accompanying Consolidated Balance Sheets of zero and $1.4 million as of June 30, 2020 and December 31, 2019, respectively. The aggregate amount of such redeemable noncontrolling equity interests are recorded at the estimated maximum redemption values. The Company had no noncontrolling interests included in permanent shareholder’s equity at June 30, 2020 and December 31, 2019.
The DGHM operating agreement provides the Company and/or the noncontrolling interest holders with contingent call and put options and mandatory repurchase obligations used for the orderly transfer of noncontrolling equity interests between the noncontrolling interest holders and the Company at contractually predetermined values. This agreement is discussed in Part II. Item 8. “Financial Statements and Supplementary Data - Note 14: Noncontrolling Interests” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
The interests in DGHM take the form of limited liability company units. There are various events that could trigger a put, call or mandatory repurchase, such as a change in control, death, disability, retirement, resignation or termination. The terms of these rights and obligations are governed by the operating agreement of DGHM.
The following table presents a rollforward of the Company’s redeemable noncontrolling interests for the periods indicated:
Three months endedSix months ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(In thousands)
Redeemable noncontrolling interests at beginning of period$—  $662  $1,383  $2,526  
Net income attributable to noncontrolling interests—  69  6  169  
Distributions—  (69) (6) (169) 
Purchases/(sales) of ownership interests—  —  (64) 12  
Amortization of equity compensation8  9  16  26  
Adjustments to fair value(8) 1,115  (1,335) (778) 
Redeemable noncontrolling interests at end of period$—  $1,786  $—  $1,786  
v3.20.2
Accumulated Other Comprehensive Income
 6 Months Ended
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income
The following table presents a summary of the amounts reclassified from the Company's Accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020 and 2019:
Description of component of Accumulated other comprehensive income/(loss)Three months ended June 30,Six months ended June 30,Affected line item in
Statement of Operations
2020201920202019
(In thousands)
Net realized gain/(loss) on cash flow hedges:
Hedges related to deposits:
Pre-tax gain/(loss)$(152) $191  $(152) $502  Interest income/(expense)
Tax (expense)/ benefit45  (55) 45  (146) Income tax (expense)/benefit
Net$(107) $136  $(107) $356  Net income/(loss) attributable to the Company
Total reclassifications for the period, net of tax$(107) $136  $(107) $356  
The following table presents the after-tax changes in the components of the Company’s Accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020 and 2019:
Components of Accumulated other comprehensive income/(loss)
Unrealized
gain/(loss)
on securities
available-for-sale		Unrealized
gain/(loss)
on cash flow
hedges		Unrealized
gain/(loss)
on other		Accumulated
other
comprehensive
income/(loss)
(In thousands)
Balance at December 31, 2018$(17,556) $391  $(554) $(17,719) 
Other comprehensive income/(loss) before reclassifications22,233  (33) —  22,200  
Reclassified from other comprehensive income/(loss)—  (356) —  (356) 
Other comprehensive income/(loss), net22,233  (389) —  21,844  
Balance at June 30, 2019$4,677  $2  $(554) $4,125  
Balance at December 31, 2019$8,435  $—  $(860) $7,575  
Other comprehensive income/(loss) before reclassifications22,687  (302) (30) 22,355  
Reclassified from other comprehensive income/(loss)—  107  —  107  
Other comprehensive income/(loss), net22,687  (195) (30) 22,462  
Balance at June 30, 2020$31,122  $(195) $(890) $30,037  
Components of Accumulated other comprehensive income/(loss)
Unrealized
gain/(loss)
on securities
available-for-sale		Unrealized
gain/(loss)
on cash flow
hedges		Unrealized
gain/(loss)
on other		Accumulated
other
comprehensive
income/(loss)
(In thousands)
Balance at March 31, 2019$(5,988) $144  $(554) $(6,398) 
Other comprehensive income/(loss) before reclassifications10,665  (6) —  10,659  
Reclassified from other comprehensive income/(loss)—  (136) —  (136) 
Other comprehensive income/(loss), net10,665  (142) —  10,523  
Balance at June 30, 2019$4,677  $2  $(554) $4,125  
Balance at March 31, 2020$22,924  $—  $(860) $22,064  
Other comprehensive income/(loss) before reclassifications8,198  (302) (30) 7,866  
Reclassified from other comprehensive income/(loss)—  107  —  107  
Other comprehensive income/(loss), net8,198  (195) (30) 7,973  
Balance at June 30, 2020$31,122  $(195) $(890) $30,037  
v3.20.2
Restructuring
 6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
Restructuring RestructuringThere were no restructuring charges for the three and six months ended June 30, 2020. In the first quarter of 2019, the Company incurred restructuring charges of $1.6 million. The charges were in connection with a previously announced reduction to the Company’s workforce, which included executive transition changes as well as other employee benefit and technology related initiatives. The restructuring was intended to improve the Company’s operating efficiency and enhance earnings.
The following table presents a summary of the restructuring activity for the three and six months ended June 30, 2020 and 2019:
Severance ChargesOther Associated CostsTotal
(In thousands)
Accrued charges at December 31, 2019$526  $789  $1,315  
Costs paid(434) —  (434) 
Accrued charges at March 31, 202092  789  881  
Costs paid(92) —  (92) 
Accrued charges at June 30, 2020$—  $789  $789  
Accrued charges at December 31, 2018$3,896  $789  $4,685  
Cost incurred1,646  —  1,646  
Costs paid(1,986) —  (1,986) 
Accrued charges at March 31, 20193,556  789  4,345  
Costs paid(1,364) —  (1,364) 
Accrued charges at June 30, 2019$2,192  $789  $2,981  
v3.20.2
Revenue Recognition
 6 Months Ended
Jun. 30, 2020
Revenue Recognition [Abstract]  
Revenue Recognition Revenue Recognition
In accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. ASC 606 does not apply to revenue associated with financial instruments such as loans and securities. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest income considered in-scope of ASC 606 is discussed below.
Wealth management and trust fees
Wealth management and trust fees are earned for providing wealth management, retirement plan advisory, family office, financial planning, trust services, and other financial advisory services to clients. The Company’s performance obligation under these contracts is satisfied over time as the services are provided. Fees are recognized monthly based on the average monthly, beginning-of-quarter, or, for a small number of clients, end-of-quarter market value of the AUM and the applicable fee rate, depending on the terms of the contracts. Fees are also recognized monthly based either on a fixed fee amount or are based on the quarter-end (in arrears) market value of the AUM and the applicable fee rate, depending on the terms of the contracts. No performance based incentives are earned under wealth management contracts. Receivables are recorded on the Consolidated Balance Sheets in the Fees receivable line item. Deferred revenues of $6.0 million and $6.5 million as of June 30, 2020 and December 31, 2019, respectively, are recorded on the Consolidated Balance Sheets within Other liabilities.
Trust fees are earned when the Company is appointed as trustee for clients. As trustee, the Company administers the client’s trust and manages the assets of the trust including investments and property. The Company’s performance obligation under these agreements is satisfied over time as the administration and management services are provided. Fees are recognized monthly or, in certain circumstances, quarterly based on a percentage of the market value of the account as outlined in the agreement. Payment frequency is defined in the individual contracts which primarily stipulate monthly in arrears. No performance based incentives are earned on trust fee contracts. Receivables are recorded on the Consolidated Balance Sheets within Fees receivable.
Investment management fees
Investment management fees are earned for the management of a series of accounts and funds in which clients invest directly, acting as a sub-advisor to larger investment management companies, or private client account management. The Company’s performance obligation is satisfied over time and the resulting fees are recognized monthly, based upon either the beginning-of-quarter (in advance) or quarter-end (in arrears) market value of the AUM and the applicable fee rate, depending on the terms of the contracts. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Company may earn performance-based incentives on certain contracts. Receivables are recorded on the Consolidated Balance Sheets within Fees receivable.
Other banking fee income
The Bank charges a variety of fees to its clients for services provided on the deposit and deposit management related accounts. Each fee is either transaction based or assessed monthly. The types of fees include service charges on accounts, overdraft fees, maintenance fees, ATM fee charges, and other miscellaneous charges related to the accounts. These fees are not governed by individual contracts with clients. They are charges to clients based on disclosures presented to clients upon opening
these accounts along with updated disclosures when changes are made to the fee structures. The transaction-based fees are recognized in revenue when charged to the client based on specific activity on the client’s account. Monthly service/maintenance charges are recognized in the month they are earned and are charged directly to the client’s account.
The Bank also charges fees for treasury activities such as swap fees and foreign exchange fees for clients with a banking relationship. These fees are recorded when earned via completion of the transaction for the client. The completion of the transaction is deemed to be the performance obligation of the transaction. The related revenue is recorded through a direct charge to the client’s account. There are no individual agreements or contracts with clients relating to foreign exchange fees as they are governed by client disclosure statements and the Bank’s internal policies and procedures.
The following table presents the fee income considered in-scope of ASC 606 by contracts with customers:
 Three months ended June 30,Six months ended June 30,
 2020201920202019
 (In thousands)
Fees and other income:
Wealth management and trust fees $17,261  $18,912  $35,632  $37,970  
Investment management fees1,770  2,455  3,695  5,105  
Other income602  638  1,354  1,322  
Revenue from contracts with customers19,633  22,005  40,681  44,397  
Non-interest income within the scope of other GAAP topics3,029  2,375  3,502  5,231  
Total non-interest income$22,662  $24,380  $44,183  $49,628  
v3.20.2
Lease Accounting
 6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Lease Accounting Lease Accounting
On adoption of ASU 2016-02 on January 1, 2019, the Company recognized $124.1 million of lease liabilities and $108.5 million of right-of-use ("ROU") assets on the Consolidated Balance Sheet. ROU assets obtained in exchange for lease liabilities are net of tenant improvement allowances and deferred rent. There was no impact to the Company’s Consolidated Statements of Cash Flows upon adoption, since the net impact of all adjustments recorded upon transition represents non-cash activity. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements” for additional information on the Company's adoption of this standard.
The Company, as lessee, has 37 real estate leases for office and ATM locations classified as operating leases. The Company determines if an arrangement is a lease or contains a lease at inception. The terms of the real estate leases generally have annual increases in payments based off of a fixed or variable rate, such as the Consumer Price Index rate, that is outlined within the respective contracts. Generally, the initial terms of the leases for our leased properties range from five to fifteen years. Most of the leases also include options to renew for periods of five to ten years at contractually agreed upon rates or at market rates at the time of the extension. On a quarterly basis, the Company evaluates whether the renewal of each lease is reasonably certain. If the lease doesn’t provide the implicit interest rate, the Bank uses its incremental borrowing rate at the commencement date of the lease in determining the present value of lease payments. No other significant judgments or assumptions were made in applying the requirements of ASU 2016-02.
The following table presents information about the Company's leases as of the dates indicated.
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)
Lease cost
Operating lease cost$4,493  $4,841  $9,094  $9,526  
Short-term lease cost58  (3) 106  29  
Variable lease cost—  2  (9) 4  
Less: Sublease income—  (28) (28) (46) 
Total operating lease cost$4,551  $4,812  $9,163  $9,513  
Six months ended June 30, 2020
(In thousands, except years and percentages)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$10,180  
ROU assets obtained in exchange for new operating lease liabilities$443  
Weighted-average remaining lease term for operating leases7.8 years
Weighted-average discount rate for operating leases3.2 %
The Company is obligated for minimum payments under non-cancelable operating leases. In accordance with the terms of these leases, the Company is currently committed to minimum annual payments as follows as of June 30, 2020:
June 30, 2020
(In thousands)
Remainder of 2020$9,883  
202119,727  
202219,680  
202318,722  
202412,692  
Thereafter43,964  
Total future minimum lease payments124,668  
Less: Amounts representing interest(16,434) 
Present value of net future minimum lease payments$108,234  
v3.20.2
Recent Accounting Pronouncements
 6 Months Ended
Jun. 30, 2020
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Recent Accounting Pronouncements Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This update and the related amendments to Topic 842 require lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”); ASU No. 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”); and ASU No. 2019-01, Leases (Topic 842), Codification Improvements (“ASU 2019-01”). The standard establishes an ROU model that requires a lessee to recognize an ROU asset and lease liability on the Consolidated Balance Sheets for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and method of expense recognition in the Consolidated Statements of Operations. The Company adopted these provisions on January 1, 2019. The most significant effects relate to the recognition of new ROU assets and lease liabilities on the balance sheet for real estate operating leases and providing significant disclosures about leasing activities. Additionally, the Company elected the package of practical expedients, as prescribed by ASU 2016-02. On adoption, the Company recognized $124.1 million of lease liabilities and $108.5 million of ROU assets. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 14: Lease Accounting” for further details.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). Throughout 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”); ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”); ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 942)—Effective Dates (“ASU 2019-10”); and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”). This update and related amendments to Topic 326 are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology with a CECL model methodology that reflects expected credit losses and requires consideration of a reasonable and supportable economic forecast to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019. The Company adopted this update on January 1, 2020 utilizing a modified retrospective approach. On adoption of ASU 2016-13, the Company recognized a decrease in the allowance for loan losses of $20.4 million and an increase in the reserve for unfunded loan commitments of $1.4 million. The net, after-tax impact of the decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million as shown in the Consolidated Statements of Changes in Shareholders’ Equity. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 4: Investments”, “Note 6 - Loan Portfolio and Credit Quality”, and “Note 7 - Allowance for Loan Losses” for further details.
In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU
2018-14”). The amendments in ASU 2018-14 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. This update is effective on a retrospective basis for interim and annual reporting periods beginning January 1, 2021. The Company is assessing the potential impact for this update and how it applies to the Company’s disclosures surrounding its two non-qualified supplemental executive retirement plans and a long-term incentive plan.
v3.20.2
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2020
Accounting Policies [Abstract]  
New Accounting Pronouncements
The Company’s significant accounting policies are described in Part II. Item 8. “Financial Statements and Supplementary Data - Note 1: Basis of Presentation and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC. For interim reporting purposes, the Company follows the same significant accounting policies, except for the following new accounting pronouncements from the Financial Accounting Standards Board (the “FASB”) that were adopted effective January 1, 2020:
•In June 2016, the FASB issued ASU 2016-13. Throughout 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”); ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”); ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 942)—Effective Dates (“ASU 2019-10”); and ASU 2019-11, Codification
Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”). This update and related amendments to Topic 326 are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology with a current expected credit losses (“CECL”) model methodology that reflects expected credit losses and requires consideration of a reasonable and supportable forecast to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019. The Company adopted this update on January 1, 2020 utilizing a modified retrospective approach. On adoption of ASU 2016-13 on January 1, 2020, the Company recognized a decrease in the allowance for loan losses of $20.4 million and an increase in the reserve for unfunded loan commitments of $1.4 million. The net, after-tax impact of the decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million as shown in the Consolidated Statements of Changes in Shareholders’ Equity.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This update and the related amendments to Topic 842 require lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”); ASU No. 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”); and ASU No. 2019-01, Leases (Topic 842), Codification Improvements (“ASU 2019-01”). The standard establishes an ROU model that requires a lessee to recognize an ROU asset and lease liability on the Consolidated Balance Sheets for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and method of expense recognition in the Consolidated Statements of Operations. The Company adopted these provisions on January 1, 2019. The most significant effects relate to the recognition of new ROU assets and lease liabilities on the balance sheet for real estate operating leases and providing significant disclosures about leasing activities. Additionally, the Company elected the package of practical expedients, as prescribed by ASU 2016-02. On adoption, the Company recognized $124.1 million of lease liabilities and $108.5 million of ROU assets. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 14: Lease Accounting” for further details.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). Throughout 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”); ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”); ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 942)—Effective Dates (“ASU 2019-10”); and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses (“ASU 2019-11”). This update and related amendments to Topic 326 are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology with a CECL model methodology that reflects expected credit losses and requires consideration of a reasonable and supportable economic forecast to inform credit loss estimates. This ASU is effective for fiscal years beginning after December 15, 2019. The Company adopted this update on January 1, 2020 utilizing a modified retrospective approach. On adoption of ASU 2016-13, the Company recognized a decrease in the allowance for loan losses of $20.4 million and an increase in the reserve for unfunded loan commitments of $1.4 million. The net, after-tax impact of the decrease in the allowance for loan losses and the increase in the reserve for unfunded loan commitments was an increase to Retained earnings of $13.5 million as shown in the Consolidated Statements of Changes in Shareholders’ Equity. See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 4: Investments”, “Note 6 - Loan Portfolio and Credit Quality”, and “Note 7 - Allowance for Loan Losses” for further details.
In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans (“ASU
2018-14”). The amendments in ASU 2018-14 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. This update is effective on a retrospective basis for interim and annual reporting periods beginning January 1, 2021. The Company is assessing the potential impact for this update and how it applies to the Company’s disclosures surrounding its two non-qualified supplemental executive retirement plans and a long-term incentive plan.
v3.20.2
Earnings/(Loss) Per Share (Tables)
 6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Schedule of computation of basic and diluted EPS The following tables present the computations of basic and diluted EPS:
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands, except share and per share data)
Basic earnings/(loss) per share - Numerator:
Net income/(loss) before attribution to noncontrolling interests$(3,298) $19,449  $(2,492) $38,991  
Less: Net income attributable to noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company(3,298) 19,380  (2,498) 38,822  
Decrease/(increase) in noncontrolling interests’ redemption values (1)—  (816) 414  741  
Net income/(loss) attributable to common shareholders, treasury stock method$(3,298) $18,564  $(2,084) $39,563  
Basic earnings/(loss) per share - Denominator:
Weighted average basic common shares outstanding81,929,752  83,565,780  82,464,438  83,426,213  
Per share data - Basic earnings/(loss) per share:
Total attributable to common shareholders$(0.04) $0.22  $(0.03) $0.47  
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands, except share and per share data)
Diluted earnings/(loss) per share - Numerator:
Net income/(loss) attributable to common shareholders, after assumed dilution$(3,298) $18,564  $(2,084) $39,563  
Diluted earnings/(loss) per share - Denominator:
Weighted average basic common shares outstanding81,929,752  83,565,780  82,464,438  83,426,213  
Dilutive effect of: Time-based and market-based stock options, performance-based and time-based restricted stock, and performance-based and time-based restricted stock units, and other dilutive securities (2)—  483,192  —  609,837  
Weighted average diluted common shares outstanding (2)81,929,752  84,048,972  82,464,438  84,036,050  
Per share data - Diluted earnings/(loss) per share:
Total attributable to common shareholders$(0.04) $0.22  $(0.03) $0.47  
Dividends per share declared and paid on common stock$0.12  $0.12  $0.24  $0.24  
_____________________
(1)See Part II. Item 8. “Financial Statements and Supplementary Data - Note 14: Noncontrolling Interests” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the redemption values related to the redeemable noncontrolling interests. In accordance with the FASB Accounting Standards Codification Distinguishing Liabilities from Equity (“ASC 480”), an increase in redemption value from period to period reduces income attributable to common shareholders. A decrease in redemption value from period to period increases income attributable to common shareholders, but only to the extent that the cumulative change in redemption value remains a cumulative increase since adoption of this standard in the first quarter of 2009.
(2)The diluted EPS computations for the three and six months ended June 30, 2020 and 2019 do not assume the conversion, exercise, or contingent issuance of the following shares for the following periods because the result would have been anti-
dilutive for the periods indicated. This includes shares excluded from the computation of diluted earnings/(loss) per share because the effect would have been anti-dilutive given the net loss during the period, and out-of-the money options, where the exercise prices were greater than the average market price of common shares for the period, because their inclusion would have been anti-dilutive As a result of the anti-dilution, the potential common shares excluded from the diluted EPS computation are as follows:
Three months ended June 30,Six months ended June 30,
2020201920202019
Anti-dilutive shares excluded from computation of average dilutive EPS(In thousands)
Potential common shares from: options, restricted stock, or other dilutive securities2,328  750  1,813  820  
Total anti-dilutive shares excluded from computation of average dilutive EPS2,328  750  1,813  820  
Schedule of antidilutive securities excluded from computation of earnings per share As a result of the anti-dilution, the potential common shares excluded from the diluted EPS computation are as follows:
Three months ended June 30,Six months ended June 30,
2020201920202019
Anti-dilutive shares excluded from computation of average dilutive EPS(In thousands)
Potential common shares from: options, restricted stock, or other dilutive securities2,328  750  1,813  820  
Total anti-dilutive shares excluded from computation of average dilutive EPS2,328  750  1,813  820  
v3.20.2
Reportable Segments (Tables)
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Schedule of segment reporting information
The following tables present a reconciliation of the revenues, expenses, assets, and other significant items of reportable segments as of and for the three and six months ended June 30, 2020 and 2019.
Three months ended June 30,Six months ended June 30,
2020201920202019
Private Banking (1)(In thousands)
Net interest income$59,690  $58,419  $117,780  $117,756  
Fees and other income3,597  2,804  4,705  6,062  
Total revenue63,287  61,223  122,485  123,818  
Provision/(credit) for loan losses22,604  1,363  39,566  (63) 
Operating expense (2)42,914  37,805  85,502  79,122  
Income/(loss) before income taxes(2,231) 22,055  (2,583) 44,759  
Income tax expense/(benefit)(1,255) 4,878  (2,186) 9,308  
Net income/(loss) before attribution to noncontrolling interests(976) 17,177  (397) 35,451  
Net income/(loss) attributable to the Company$(976) $17,177  $(397) $35,451  
Assets$9,104,761  $8,619,399  $9,104,761  $8,619,399  
Amortization of intangibles$64  $—  $141  $—  
Depreciation$2,611  $2,373  $5,237  $5,043  
Three months ended June 30,Six months ended June 30,
2020201920202019
Wealth Management and Trust (1)(In thousands)
Net interest income$7  $104  $79  $210  
Fees and other income17,292  18,956  35,777  38,082  
Total revenue17,299  19,060  35,856  38,292  
Operating expense (2)14,651  14,409  30,100  29,976  
Income before income taxes2,648  4,651  5,756  8,316  
Income tax expense898  1,520  1,972  2,714  
Net income before attribution to noncontrolling interests1,750  3,131  3,784  5,602  
Net income attributable to the Company$1,750  $3,131  $3,784  $5,602  
Assets$146,254  $151,128  $146,254  $151,128  
Amortization of intangibles$638  $672  $1,276  $1,344  
Depreciation$286  $333  $580  $700  
Three months ended June 30,Six months ended June 30,
2020201920202019
Holding Company and Eliminations (1)(In thousands)
Net interest income (3)$(759) $(1,063) $(1,664) $(2,168) 
Fees and other income1,773  2,620  3,701  5,484  
Total revenue1,014  1,557  2,037  3,316  
Operating expense3,888  3,445  6,759  7,114  
Income/(loss) before income taxes(2,874) (1,888) (4,722) (3,798) 
Income tax expense/(benefit) 1,198  (1,029) 1,157  (1,736) 
Net income/(loss) before attribution to noncontrolling interests(4,072) (859) (5,879) $(2,062) 
Noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company$(4,072) $(928) $(5,885) $(2,231) 
Assets (including eliminations)$(92,109) $(57,654) $(92,109) $(57,654) 
Depreciation$38  $49  $77  $96  
Three months ended June 30,Six months ended June 30,
2020201920202019
Total Company (1)(In thousands)
Net interest income$58,938  $57,460  $116,195  $115,798  
Fees and other income22,662  24,380  44,183  49,628  
Total revenue81,600  81,840  160,378  165,426  
Provision/(credit) for loan losses22,604  1,363  39,566  (63) 
Operating expense61,453  55,659  122,361  116,212  
Income/(loss) before income taxes(2,457) 24,818  (1,549) 49,277  
Income tax expense841  5,369  943  10,286  
Net income/(loss) before attribution to noncontrolling interests(3,298) 19,449  (2,492) 38,991  
Noncontrolling interests—  69  6  169  
Net income/(loss) attributable to the Company$(3,298) $19,380  $(2,498) $38,822  
Assets$9,158,906  $8,712,873  $9,158,906  $8,712,873  
Amortization of intangibles$702  $672  $1,417  $1,344  
Depreciation$2,935  $2,755  $5,894  $5,839  
_____________________
(1)Due to rounding, the sum of individual segment results may not add up to the Total Company results.
(2)Operating expense related to the Private Banking and Wealth Management and Trust segments includes restructuring expense of $1.3 million and $0.4 million, respectively, for the six months ended June 30, 2019. There were no other restructuring expenses in other periods presented.
(3)Interest expense on junior subordinated debentures is included in Holding Company and Eliminations.
v3.20.2
Investments (Tables)
 6 Months Ended
Jun. 30, 2020
Investments [Abstract]  
Schedule of debt securities available-for-sale
The following table presents a summary of investment securities at June 30, 2020 and December 31, 2019:
 Amortized
Cost		UnrealizedFair
Value
GainsLosses
(In thousands)
At June 30, 2020
Available-for-sale securities at fair value:
U.S. government and agencies$19,959  $1,162  $—  $21,121  
Government-sponsored entities153,225  5,718  —  158,943  
Municipal bonds315,056  18,899  —  333,955  
Mortgage-backed securities (1)471,610  17,515  (174) 488,951  
Total$959,850  $43,294  $(174) $1,002,970  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$42,495  $888  $(32) $43,351  
Total$42,495  $888  $(32) $43,351  
Equity securities at fair value:
Money market mutual funds (2)$24,492  $—  $—  $24,492  
Total$24,492  $—  $—  $24,492  
At December 31, 2019
Available-for-sale securities at fair value:
U.S. government and agencies$19,955  $42  $(57) $19,940  
Government-sponsored entities154,963  1,292  —  156,255  
Municipal bonds312,977  12,551  (73) 325,455  
Mortgage-backed securities (1)479,005  1,117  (3,488) 476,634  
Total$966,900  $15,002  $(3,618) $978,284  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$48,212  $53  $(316) $47,949  
Total$48,212  $53  $(316) $47,949  
Equity securities at fair value:
Money market mutual funds (2)$18,810  $—  $—  $18,810  
Total$18,810  $—  $—  $18,810  
_____________________
(1)All mortgage-backed securities are guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
(2)Money market mutual funds maintain a constant net asset value of $1.00 and therefore have no unrealized gain or loss.
Schedule of debt securities held-to-maturity
The following table presents a summary of investment securities at June 30, 2020 and December 31, 2019:
 Amortized
Cost		UnrealizedFair
Value
GainsLosses
(In thousands)
At June 30, 2020
Available-for-sale securities at fair value:
U.S. government and agencies$19,959  $1,162  $—  $21,121  
Government-sponsored entities153,225  5,718  —  158,943  
Municipal bonds315,056  18,899  —  333,955  
Mortgage-backed securities (1)471,610  17,515  (174) 488,951  
Total$959,850  $43,294  $(174) $1,002,970  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$42,495  $888  $(32) $43,351  
Total$42,495  $888  $(32) $43,351  
Equity securities at fair value:
Money market mutual funds (2)$24,492  $—  $—  $24,492  
Total$24,492  $—  $—  $24,492  
At December 31, 2019
Available-for-sale securities at fair value:
U.S. government and agencies$19,955  $42  $(57) $19,940  
Government-sponsored entities154,963  1,292  —  156,255  
Municipal bonds312,977  12,551  (73) 325,455  
Mortgage-backed securities (1)479,005  1,117  (3,488) 476,634  
Total$966,900  $15,002  $(3,618) $978,284  
Held-to-maturity securities at amortized cost:
Mortgage-backed securities (1)$48,212  $53  $(316) $47,949  
Total$48,212  $53  $(316) $47,949  
Equity securities at fair value:
Money market mutual funds (2)$18,810  $—  $—  $18,810  
Total$18,810  $—  $—  $18,810  
_____________________
(1)All mortgage-backed securities are guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
(2)Money market mutual funds maintain a constant net asset value of $1.00 and therefore have no unrealized gain or loss.
Investments classified by contractual maturity date The following table presents the maturities of available-for-sale investment securities, based on contractual maturity, as of June 30, 2020. Certain securities are callable before their final maturity. Additionally, certain securities (such as mortgage-backed securities) are shown within the table below based on their final (contractual) maturity, but due to prepayments and amortization are expected to have shorter lives.
 Available-for-sale Securities
Amortized
Cost		Fair
Value
(In thousands)
Within one year$45,957  $46,277  
After one, but within five years301,995  314,345  
After five, but within ten years231,164  244,374  
Greater than ten years380,734  397,974  
Total$959,850  $1,002,970  
The following table presents the maturities of held-to-maturity investment securities, based on contractual maturity, as of June 30, 2020.
 Held-to-maturity Securities
Amortized
Cost		Fair
Value
(In thousands)
After five, but within ten years$34,732  $35,377  
Greater than ten years7,763  7,974  
Total$42,495  $43,351  
The following table presents the maturities of equity securities, based on contractual maturity, as of June 30, 2020.
 Equity Securities
Amortized
Cost		Fair
Value
(In thousands)
Within one year$24,492  $24,492  
Total$24,492  $24,492  
Schedule of unrealized loss on investments
The following tables present information regarding securities at June 30, 2020 and December 31, 2019 having temporary impairment, due to the fair values having declined below the amortized cost of the individual securities, and the time period that the investments have been temporarily impaired.
Less than 12 months12 months or longerTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		# of
Securities
(In thousands, except number of securities)
June 30, 2020
Available-for-sale securities
Mortgage-backed securities (1) $20,871  $(45) $10,622  $(129) $31,493  $(174) 28  
Total$20,871  $(45) $10,622  $(129) $31,493  $(174) 28  
Held-to-maturity securities
Mortgage-backed securities (1)$2,135  $(9) $2,024  $(23) $4,159  $(32) 2  
Total$2,135  $(9) $2,024  $(23) $4,159  $(32) 2  
Less than 12 months12 months or longerTotal
Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		# of
Securities
(In thousands, except number of securities)
December 31, 2019
Available-for-sale securities
U.S. government and agencies$9,899  $(57) $—  $—  $9,899  $(57) 1  
Government-sponsored entities1,725  —  —  —  1,725  —  1  
Municipal bonds9,149  (73) —  —  9,149  (73) 4  
Mortgage-backed securities (1)140,723  (1,016) 187,043  (2,472) 327,766  (3,488) 85  
Total$161,496  $(1,146) $187,043  $(2,472) $348,539  $(3,618) 91  
Held-to-maturity securities
Mortgage-backed securities (1)$10,328  $(11) $30,451  $(305) $40,779  $(316) 14  
Total$10,328  $(11) $30,451  $(305) $40,779  $(316) 14  
_____________________
(1)All mortgage-backed securities are guaranteed by the U.S. government, U.S. government agencies, or government-sponsored entities.
v3.20.2
Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Schedule of fair value, assets and liabilities measured on recurring basis
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:
 As of June 30, 2020Fair value measurements at reporting date using:
Quoted prices in
active markets
for identical
assets (Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies$21,121  $—  $21,121  $—  
Government-sponsored entities158,943  —  158,943  —  
Municipal bonds333,955  —  333,955  —  
Mortgage-backed securities488,951  —  488,951  —  
Total available-for-sale securities1,002,970  —  1,002,970  —  
Equity securities24,492  24,492  —  —  
Derivatives - interest rate customer swaps96,968  —  96,968  —  
Derivatives - risk participation agreement21  —  21  —  
Trading securities held in the “rabbi trust” (1)6,328  6,328  —  —  
Liabilities:
Derivatives - interest rate customer swaps$97,760  $—  $97,760  $—  
Derivatives - interest rate swaps274  —  274  —  
Derivatives - risk participation agreement478  —  478  —  
Deferred compensation “rabbi trust” (1)6,320  6,320  —  —  
  Fair value measurements at reporting date using:
As of December 31, 2019Quoted prices in
active markets
for identical
assets (Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs (Level 3)
(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies$19,940  $—  $19,940  $—  
Government-sponsored entities156,255  —  156,255  —  
Municipal bonds325,455  —  325,455  —  
Mortgage-backed securities476,634  —  476,634  —  
Total available-for-sale securities978,284  —  978,284  —  
Equity securities18,810  18,810  —  —  
Derivatives - interest rate customer swaps36,089  —  36,089  —  
Derivatives - risk participation agreements10  —  10  —  
Trading securities held in the “rabbi trust” (1)6,119  6,119  —  —  
Liabilities:
Derivatives - interest rate customer swaps$36,580  $—  $36,580  $—  
Derivatives - risk participation agreements242  —  242  —  
Deferred compensation “rabbi trust” (1)6,112  6,112  —  —  
_____________________
(1) The Company has adopted a special trust for the Deferred Compensation Plan called a “rabbi trust”. The rabbi trust is an arrangement that is used to accumulate assets that may be used to fund the Company’s obligation to pay benefits under the Deferred Compensation Plan. To prevent immediate taxation to the executives who participate in the Deferred Compensation Plan, the amounts placed in the rabbi trust must remain subject to the claims of the Company’s creditors. The investments chosen by the participants in the Deferred Compensation Plan are mirrored by the rabbi trust as a way to minimize the earnings volatility of the Deferred Compensation Plan.
Fair value, assets and liabilities measured on nonrecurring basis
The following tables present the Company’s assets measured at fair value on a non-recurring basis during the periods ended June 30, 2020 and June 30, 2019, respectively, aggregated by the level in the fair value hierarchy within which those measurements fall.
 As of June 30, 2020Fair value measurements at reporting date using:Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Three months ended June 30, 2020Six months ended June 30, 2020
(In thousands)
Assets:
Impaired loans (1)$98  $—  $—  $98  $(1,219) $(1,198) 
_____________________
(1)Collateral-dependent impaired loans held as of June 30, 2020 that had write-downs or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2020.
 As of June 30, 2019Fair value measurements at reporting date using:Gain (losses) from fair value changes
Quoted prices in
active markets
for identical
assets (Level 1)
Significant other
observable
inputs (Level 2)
Significant
unobservable
inputs (Level 3)
Three months ended June 30, 2019Six months ended June 30, 2019
(In thousands)
Assets:
Impaired loans (1)$1,144  $—  $—  $1,144  $220  $592  
_____________________
(1)Collateral-dependent impaired loans held as of June 30, 2019 that had write-downs or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2019.
Fair value, assets and liabilities measured on recurring and nonrecurring basis, valuation techniques
The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:
 As of June 30, 2020
Fair ValueValuation
Technique		Unobservable
Input		Range of
Inputs
Utilized 		Weighted
Average of
Inputs
Utilized
(In thousands)
Impaired Loans$98  Appraisals of CollateralDiscount for costs to sell
10% - 10%
10%
Appraisal adjustments—%—%
 As of June 30, 2019
Fair ValueValuation
Technique		Unobservable
Input		Range of
Inputs
Utilized 		Weighted
Average of
Inputs
Utilized
(In thousands)
Impaired Loans$1,144  Appraisals of CollateralDiscount for costs to sell
—% - 5%
4%
Appraisal adjustments—%—%
Fair value, by balance sheet grouping
The following tables present the carrying values and fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis:
 As of June 30, 2020
Book ValueFair ValueQuoted prices 
in active
markets for
identical
assets 
(Level 1)		Significant 
other
observable
inputs
(Level 2)		Significant
unobservable
inputs 
(Level 3)
(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents$179,027  $179,027  $179,027  $—  $—  
Investment securities held-to-maturity42,495  43,351  —  43,351  —  
Loans held for sale9,786  9,958  —  9,958  —  
Loans, net7,243,630  7,082,051  —  —  7,082,051  
Other financial assets71,246  71,246  —  71,246  —  
FINANCIAL LIABILITIES:
Deposits7,427,397  7,429,520  —  7,429,520  —  
Securities sold under agreements to repurchase46,623  46,623  —  46,623  —  
Federal Home Loan Bank borrowings426,313  428,014  —  428,014  —  
Junior subordinated debentures106,363  69,863  —  —  69,863  
Other financial liabilities2,557  2,557  —  2,557  —  
 As of December 31, 2019
Book ValueFair ValueQuoted prices 
in active
markets for
identical
assets 
(Level 1)		Significant 
other
observable
inputs (Level 2)		Significant
unobservable
inputs 
(Level 3)
(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents$292,479  $292,479  $292,479  $—  $—  
Investment securities held-to-maturity48,212  47,949  —  47,949  —  
Loans held for sale7,386  7,475  —  7,475  —  
Loans, net6,904,722  6,883,360  —  —  6,883,360  
Other financial assets67,348  67,348  —  67,348  —  
FINANCIAL LIABILITIES:
Deposits7,241,476  7,241,739  —  7,241,739  —  
Securities sold under agreements to repurchase53,398  53,398  —  53,398  —  
Federal Home Loan Bank borrowings350,829  351,233  —  351,233  —  
Junior subordinated debentures106,363  96,363  —  —  96,363  
Other financial liabilities1,957  1,957  —  1,957  —  
v3.20.2
Loan Portfolio and Credit Quality (Tables)
 6 Months Ended
Jun. 30, 2020
Loans and Leases Receivable Disclosure [Abstract]  
Schedule of accounts, notes, loans and financing receivable
The following table presents a summary of the loan portfolio based on the portfolio segment as of the dates indicated:
 June 30, 2020December 31, 2019
 (In thousands)
Commercial and industrial$565,748  $694,034  
Paycheck Protection Program370,034  —  
Commercial tax-exempt419,264  447,927  
Commercial real estate2,676,708  2,551,274  
Construction and land240,211  225,983  
Residential2,859,627  2,839,155  
Home equity84,588  83,657  
Consumer and other116,774  134,674  
Total$7,332,954  $6,976,704  
Schedule of financing receivables, non accrual status
The following table presents nonaccrual loans receivable by class of receivable as of the dates indicated:
June 30, 2020December 31, 2019
(In thousands)
Commercial and industrial$3,649  $582  
Commercial real estate5,285  —  
Residential16,394  13,993  
Home equity195  1,525  
Consumer and other81  3  
Total$25,604  $16,103  
Past due financing receivables
The following tables show the payment status of loans receivable by class of receivable as of the dates indicated:
June 30, 2020
Accruing Past DueNonaccrual Loans
30-59 Days Past Due 60-89 Days Past DueTotal Accruing Past DueCurrent30-89 Days Past Due90 Days or
Greater
Past Due		Total Non-Accrual LoansCurrent Accruing LoansTotal
Loans
Receivable
(In thousands)
Commercial and industrial$3,058  $43  $3,101  $636  $—  $3,013  $3,649  $558,998  $565,748  
Paycheck Protection Program—  —  —  —  —  —  —  370,034  370,034  
Commercial tax-exempt—  —  —  —  —  —  —  419,264  419,264  
Commercial real estate (1)—  925  975  5,285  —  —  5,285  2,670,448  2,676,708  
Construction and land—  —  —  —  —  —  —  240,211  240,211  
Residential—  747  747  7,473  1,586  7,335  16,394  2,842,486  2,859,627  
Home equity489  251  740  8  139  48  195  83,653  84,588  
Consumer and other7  15  22  1  —  80  81  116,671  116,774  
Total$3,554  $1,981  $5,585  $13,403  $1,725  $10,476  $25,604  $7,301,765  $7,332,954  
______________________
(1) There was one commercial real estate loan with a balance less than $0.1 million that was 90+ days past due and accruing at June 30, 2020. Total accruing past due amount will not sum across for this reason.
December 31, 2019
Accruing Past DueNonaccrual Loans
30-59 Days Past Due60-89 Days Past DueTotal Accruing Past DueCurrent30-89 Days Past Due90 Days or Greater Past DueTotal Non-Accrual LoansCurrent Accruing LoansTotal Loans Receivable
(In thousands)
Commercial and industrial$828  $—  $828  $—  $241  $341  $582  $692,624  $694,034  
Commercial tax-exempt—  —  —  —  —  —  —  447,927  447,927  
Commercial real estate1,420  —  1,420  —  —  —  —  2,549,854  2,551,274  
Construction and land—  —  —  —  —  —  —  225,983  225,983  
Residential19,133  1,038  20,171  9,593  759  3,641  13,993  2,804,991  2,839,155  
Home equity369  —  369  220  148  1,157  1,525  81,763  83,657  
Consumer and other1,008  2,149  3,157  1  —  2  3  131,514  134,674  
Total$22,758  $3,187  $25,945  $9,814  $1,148  $5,141  $16,103  $6,934,656  $6,976,704  
Financing receivable credit quality indicators
The following tables present the loan portfolio’s credit risk profile by internally assigned grade and class of receivable as of the dates indicated:
June 30, 2020
By Loan Grade or Nonaccrual Status
PassSpecial
Mention 		Accruing
Classified (1)		Nonaccrual
Loans		Total
(In thousands)
Commercial and industrial$513,576  $8,628  $39,895  $3,649  $565,748  
Paycheck Protection Program370,034  —  —  —  370,034  
Commercial tax-exempt408,326  2,460  8,478  —  419,264  
Commercial real estate2,460,827  175,661  34,935  5,285  2,676,708  
Construction and land235,378  4,833  —  —  240,211  
Residential2,839,005  —  4,228  16,394  2,859,627  
Home equity83,343  —  1,050  195  84,588  
Consumer and other116,393  300  —  81  116,774  
Total$7,026,882  $191,882  $88,586  $25,604  $7,332,954  
December 31, 2019
By Loan Grade or Nonaccrual Status
PassSpecial
Mention 		Accruing
Classified (1)		Nonaccrual
Loans		Total
(In thousands)
Commercial and industrial$656,364  $12,101  $24,987  $582  $694,034  
Commercial tax-exempt436,721  7,154  4,052  —  447,927  
Commercial real estate2,495,702  32,014  23,558  —  2,551,274  
Construction and land225,526  457  —  —  225,983  
Residential2,820,909  —  4,253  13,993  2,839,155  
Home equity81,060  —  1,072  1,525  83,657  
Consumer and other134,371  300  —  3  134,674  
Total$6,850,653  $52,026  $57,922  $16,103  $6,976,704  
______________________
(1) Accruing Classified may include both Substandard and Doubtful classifications.
The following table presents the loan portfolio’s credit risk profile by loan origination year and class of receivable as of the dates indicated:
June 30, 2020
Loan Origination Year By Loan Grade or Nonaccrual Status
20202019201820172016PriorRevolvingTotal
(In thousands)
Commercial and industrial
Pass$24,040  $92,841  $72,857  $16,771  $25,701  $57,514  $223,852  $513,576  
Special Mention—  676  963  1,439  —  2,837  2,713  8,628  
Accruing Classified (1)200  4,423  7,455  14,726  1,358  442  11,291  39,895  
Nonaccrual49  161  —  197  —  14  3,228  3,649  
Total$24,289  $98,101  $81,275  $33,133  $27,059  $60,807  $241,084  $565,748  
Paycheck Protection Program
Pass$370,034  $—  $—  $—  $—  $—  $—  $370,034  
Total$370,034  $—  $—  $—  $—  $—  $—  $370,034  
Commercial tax-exempt
Pass$12,665  $15,912  $40,819  $24,606  $107,595  $206,729  $—  $408,326  
Special Mention—  —  —  —  —  2,460  —  2,460  
Accruing Classified (1)—  —  —  3,975  —  4,503  —  8,478  
Total$12,665  $15,912  $40,819  $28,581  $107,595  $213,692  $—  $419,264  
Commercial real estate
Pass$187,358  $481,495  $260,482  $338,837  $393,779  $725,465  $73,411  $2,460,827  
Special Mention20,640  34,666  27,114  790  37,704  54,747  —  175,661  
Accruing Classified (1)1,252  11,536  —  1,179  8,878  12,090  —  34,935  
Nonaccrual—  5,285  —  —  —  —  —  5,285  
Total$209,250  $532,982  $287,596  $340,806  $440,361  $792,302  $73,411  $2,676,708  
Construction and land
Pass$5,937  $61,095  $77,695  $47,276  $16,928  $26,447  $—  $235,378  
Special Mention—  —  4,833  —  —  —  —  4,833  
Total$5,937  $61,095  $82,528  $47,276  $16,928  $26,447  $—  $240,211  
Residential
Pass$332,172  $583,429  $448,630  $459,227  $438,329  $577,218  $—  $2,839,005  
Accruing Classified (1)—  —  —  —  —  4,228  —  4,228  
Nonaccrual—  262  1,084  2,529  —  12,519  —  16,394  
Total$332,172  $583,691  $449,714  $461,756  $438,329  $593,965  $—  $2,859,627  
Home equity
Pass$—  $—  $454  $248  $686  $12,998  $68,957  $83,343  
Accruing Classified (1)—  —  —  —  —  1,050  —  1,050  
Nonaccrual—  —  —  —  —  56  139  195  
Total$—  $—  $454  $248  $686  $14,104  $69,096  $84,588  
Consumer and other
Pass$1,388  $318  $38  $—  $88  $806  $113,755  $116,393  
Special Mention—  —  —  —  —  —  300  300  
Nonaccrual—  —  73  —  —  —  8  81  
Total$1,388  $318  $111  $—  $88  $806  $114,063  $116,774  
Total
Pass$933,594  $1,235,090  $900,975  $886,965  $983,106  $1,607,177  $479,975  $7,026,882  
Special Mention20,640  35,342  32,910  2,229  37,704  60,044  3,013  191,882  
Accruing Classified (1)1,452  15,959  7,455  19,880  10,236  22,313  11,291  88,586  
Nonaccrual49  5,708  1,157  2,726  —  12,589  3,375  25,604  
Total$955,735  $1,292,099  $942,497  $911,800  $1,031,046  $1,702,123  $497,654  $7,332,954  
______________________
(1) Accruing Classified may include both Substandard and Doubtful classifications.
Impaired financing receivables
The following tables present, by class of receivable, the balance of impaired loans with and without a related allowance, the associated allowance for those impaired loans with a related allowance, and the total unpaid principal on impaired loans:
As of and for the three and six months ended June 30, 2020
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceQTD Average Recorded InvestmentYTD Average Recorded InvestmentQTD Interest Income Recognized while ImpairedYTD Interest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$3,434  $3,456  n/a$1,323  $1,058  $—  $6  
Paycheck Protection Program—  —  n/a—  —  —  —  
Commercial tax-exempt—  —  n/a—  —  —  —  
Commercial real estate6,007  6,122  n/a6,064  3,964  8  17  
Construction and land—  —  n/a—  —  —  —  
Residential16,309  16,569  n/a16,331  15,903  143  260  
Home equity391  391  n/a1,258  1,383  7  10  
Consumer and other—  —  n/a—  —  —  —  
Subtotal$26,141  $26,538  n/a24,976  $22,308  158  $293  
With an allowance recorded:
Commercial and industrial $259  $268  $(161) 265  $273  1  $1  
Paycheck Protection Program—  —  —  —  —  —  —  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  
Residential528  528  (60) 530  532  2  6  
Home equity263  263  (18) 267  269  2  4  
Consumer and other—  —  —  —  —  —  —  
Subtotal$1,050  $1,059  $(239) $1,062  $1,074  $5  $11  
Total:
Commercial and industrial$3,693  $3,724  $(161) $1,588  $1,331  $1  $7  
Paycheck Protection Program—  —  —  —  —  —  —  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate6,007  6,122  —  6,064  3,964  8  17  
Construction and land—  —  —  —  —  —  —  
Residential16,837  17,097  (60) 16,861  16,435  145  266  
Home equity654  654  (18) 1,525  1,652  9  14  
Consumer and other—  —  —  —  —  —  —  
Total$27,191  $27,597  $(239) $26,038  $23,382  $163  $304  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
As of and for the three and six months ended June 30, 2019
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceQTD Average Recorded InvestmentYTD Average Recorded InvestmentQTD Interest Income Recognized while ImpairedYTD Interest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$1,669  $2,616  n/a$1,520  $1,328  $10  $25  
Commercial tax-exempt—  —  n/a—  —  —  —  
Commercial real estate—  —  n/a—  78  —  256  
Construction and land—  —  n/a—  —  —  —  
Residential15,127  15,387  n/a14,079  12,605  103  240  
Home equity2,497  3,059  n/a2,359  2,018  1  1  
Consumer and other—  —  n/a—  —  —  —  
Subtotal$19,293  $21,062  n/a$17,958  $16,029  $114  $522  
With an allowance recorded:
Commercial and industrial$441  $441  $93  $596  $1,036  $4  $20  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  
Residential778  778  74  733  752  6  13  
Home equity274  274  24  69  776  1  1  
Consumer and other—  —  —  —  —  —  —  
Subtotal$1,493  $1,493  $191  $1,398  $2,564  $11  $34  
Total:
Commercial and industrial$2,110  $3,057  $93  $2,116  $2,364  $14  $45  
Commercial tax-exempt—  —  —  —  —  —  —  
Commercial real estate—  —  —  —  78  —  256  
Construction and land—  —  —  —  —  —  —  
Residential15,905  16,165  74  14,812  13,357  109  253  
Home equity2,771  3,333  24  2,428  2,794  2  2  
Consumer and other—  —  —  —  —  —  —  
Total$20,786  $22,555  $191  $19,356  $18,593  $125  $556  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
As of and for the year ended December 31, 2019
Recorded Investment (1)Unpaid Principal BalanceRelated AllowanceAverage Recorded InvestmentInterest Income Recognized while Impaired
(In thousands)
With no related allowance recorded:
Commercial and industrial$470  $553  n/a$1,062  $268  
Commercial tax-exempt—  —  n/a—  —  
Commercial real estate733  733  n/a155  262  
Construction and land—  —  n/a—  —  
Residential15,362  15,622  n/a13,700  636  
Home equity1,557  2,119  n/a2,095  35  
Consumer and other—  —  n/a—  —  
Subtotal$18,122  $19,027  n/a$17,012  $1,201  
With an allowance recorded:
Commercial and industrial$254  $254  $146  $736  $33  
Commercial tax-exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential538  538  67  1,130  23  
Home equity273  273  22  545  4  
Consumer and other—  —  —  —  —  
Subtotal$1,065  $1,065  $235  $2,411  $60  
Total:
Commercial and industrial$724  $807  $146  $1,798  $301  
Commercial tax-exempt—  —  —  —  —  
Commercial real estate733  733  —  155  262  
Construction and land—  —  —  —  —  
Residential15,900  16,160  67  14,830  659  
Home equity1,830  2,392  22  2,640  39  
Consumer and other—  —  —  —  —  
Total$19,187  $20,092  $235  $19,423  $1,261  
_____________________
(1)Recorded investment represents the client loan balance net of historical charge offs and historical nonaccrual interest paid, if applicable, which was applied to principal.
Troubled debt restructurings on financing receivables
The following tables present the balance of TDRs that were restructured or defaulted during the periods indicated:
As of and for the three months ended June 30, 2020
Restructured Current QuarterTDRs that defaulted in the Current Quarter that were restructured in prior twelve months
# of LoansPre- modification recorded investmentPost- modification recorded investment# of LoansPost- modification recorded investment
(In thousands, except number of loans)
Commercial and industrial—  $—  $—  —  $—  
Paycheck Protection Program—  —  —  —  —  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential—  —  —  1  1,562  
Home equity—  —  —  —  —  
Consumer and other—  —  —  —  —  
Total—  $—  $—  1  $1,562  
As of and for the six months ended June 30, 2020
Restructured Year to DateTDRs that defaulted in the Year to Date that were restructured
in prior twelve months
# of
Loans		Pre-
modification
recorded
investment		Post-
modification
recorded
investment		# of
Loans		Post-
modification
recorded
investment
(In thousands, except number of loans)
Commercial and industrial (1)1  $50  $50  —  $—  
Paycheck Protection Program—  —  —  —  —  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land —  —  —  —  —  
Residential (2)1  2,373  2,373  1  1,562  
Home equity—  —  —  —  —  
Consumer and other—  —  —  —  —  
Total2  $2,423  $2,423  1  $1,562  
_____________________
(1)Represents the following type of concession: extension of maturity and reduction in interest rate.
(2)Represents the following type of concession: payment deferral.     
As of and for the three months ended June 30, 2019
Restructured Current QuarterTDRs that defaulted in the Current Quarter that were restructured in prior twelve months
# of LoansPre- modification recorded investmentPost- modification recorded investment# of LoansPost- modification recorded investment
(In thousands, except number of loans)
Commercial and industrial—  $—  $—  —  $—  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land—  —  —  —  —  
Residential (1)1  222  222  —  —  
Home equity (1)1  274  274  —  —  
Consumer and other—  —  —  —  —  
Total2  $496  $496  —  $—  
_____________________
(1)Represents the following type of concession: temporary reduction of interest rate.
As of and for the six months ended June 30, 2019
Restructured Year to DateTDRs that defaulted in the Year to Date that were restructured
in prior twelve months
# of
Loans		Pre-
modification
recorded
investment		Post-
modification
recorded
investment		# of
Loans		Post-
modification
recorded
investment
(In thousands, except number of loans)
Commercial and industrial1  $179  $179  —  $—  
Commercial tax exempt—  —  —  —  —  
Commercial real estate—  —  —  —  —  
Construction and land —  —  —  —  —  
Residential2  3,222  3,222  —  —  
Home equity1  274  274  —  —  
Consumer and other—  —  —  —  —  
Total4  $3,675  $3,675  —  $—  
As of and for the six months ended June 30, 2019
Extension of termTemporary rate reductionPayment deferralCombination of concessionsTotal concessions
# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment		# of
Loans		Post-
modifi-
cation
recorded
invest-
ment
(In thousands, except number of loans)
Commercial and industrial 1  $179  —  $—  —  $—  —  $—  1  $179  
Commercial tax exempt—  —  —  —  —  —  —  —  —  —  
Commercial real estate—  —  —  —  —  —  —  —  —  —  
Construction and land—  —  —  —  —  —  —  —  —  —  
Residential—  —  2  3,222  —  —  —  —  2  3,222  
Home equity—  —  1  274  —  —  —  —  1  274  
Consumer and other—  —  —  —  —  —  —  —  —  —  
1  $179  3  $3,496  —  $—  —  $—  4  $3,675  
In response to the COVID-19 pandemic, the Bank initiated a mortgage deferment program under which principal and interest payments on qualifying loans are generally deferred for initially three months and the loan term is extended three months; if requested, the loan can be deferred for an additional three months. Loans that are deferred under the program are not considered TDRs or past due based on current regulatory guidance. As of June 30, 2020, 336 residential and home equity loans totaling $214.5 million were processed under this deferment program.
Loan participations serviced for others and loans serviced for others are not included in the Company’s total loans.
Loan participation amounts by loan type
The following table presents a summary of the loan participations serviced for others and loans serviced for others based on class of receivable as of the dates indicated:
 June 30, 2020December 31, 2019
 (In thousands)
Commercial and industrial$15,122  $14,533  
Commercial tax-exempt17,829  18,101  
Commercial real estate124,312  121,929  
Construction and land72,474  75,451  
Total loan participations serviced for others $229,737  $230,014  
Residential$130,114  $204,696  
Total loans serviced for others$130,114  $204,696  
v3.20.2
Allowance for Loan Losses (Tables)
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Allowance for credit losses on financing receivables The following tables present a summary of the changes in the allowance for loan losses for the periods indicated:
As of and for the three months ended June 30,As of and for the six months ended June 30,
2020201920202019
(In thousands)
Allowance for loan losses, beginning of period:
Commercial and industrial$10,255  $15,687  $10,048  $15,912  
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt1,927  n/a6,016  n/a
Commercial real estate36,580  41,813  40,765  41,934  
Construction and land5,709  5,353  5,119  6,022  
Residential11,779  10,057  8,857  10,026  
Home equity303  796  778  1,284  
Consumer and other1,658  108  399  134  
Total allowance for loan losses, beginning of period$68,211  $73,814  $71,982  $75,312  
Impact of adopting ASU 2016-13:
Commercial and industrial$—  n/a$(565) n/a
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a(4,409) n/a
Commercial real estate—  n/a(14,455) n/a
Construction and land—  n/a(2,158) n/a
Residential—  n/a685  n/a
Home equity—  n/a(535) n/a
Consumer and other—  n/a1,052  n/a
Total impact of adopting ASU 2016-13$—  n/a$(20,385) n/a
Provision/(credit) for loan losses:
Commercial and industrial$(359) $550  $886  $137  
Paycheck Protection Program190  n/a190  n/a
Commercial tax-exempt559  n/a879  n/a
Commercial real estate11,095  1,898  21,365  1,588  
Construction and land3,815  (573) 6,563  (1,242) 
Residential5,986  (502) 8,223  (571) 
Home equity1,293  9  1,221  83  
Consumer and other25  (19) 239  (58) 
Total provision/(credit) for loan losses$22,604  $1,363  $39,566  $(63) 
As of and for the three months ended June 30,As of and for the six months ended June 30,
2020201920202019
(In thousands)
Loans charged off:
Commercial and industrial$(389) $(195) $(907) $(195) 
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a—  n/a
Commercial real estate—  —  —  —  
Construction and land—  —  —  —  
Residential—  —  —  —  
Home equity(1,157) —  (1,157) (562) 
Consumer and other—  —  (10) (2) 
Total charge offs$(1,546) $(195) $(2,074) $(759) 
Recoveries on loans previously charged off:
Commercial and industrial$52  $40  $97  $228  
Paycheck Protection Program—  n/a—  n/a
Commercial tax-exempt—  n/a—  n/a
Commercial real estate—  30  —  219  
Construction and land—  —  —  —  
Residential—  —  —  100  
Home equity—  —  132  —  
Consumer and other3  15  6  30  
Total recoveries$55  $85  $235  $577  
Allowance for loan losses, end of period:
Commercial and industrial$9,559  $16,082  $9,559  $16,082  
Paycheck Protection Program190  n/a190  n/a
Commercial tax-exempt2,486  n/a2,486  n/a
Commercial real estate47,675  43,741  47,675  43,741  
Construction and land9,524  4,780  9,524  4,780  
Residential17,765  9,555  17,765  9,555  
Home equity439  805  439  805  
Consumer and other1,686  104  1,686  104  
Total allowance for loan losses, end of period$89,324  $75,067  $89,324  $75,067  
Allowance by method of impairment analysis
The following tables present the Company’s allowance for loan losses and loan portfolio as of June 30, 2020 and December 31, 2019 by portfolio segment, disaggregated by method of impairment analysis. The Company had no loans acquired with deteriorated credit quality as of June 30, 2020 or December 31, 2019.
June 30, 2020
Individually Evaluated
for Impairment		Collectively Evaluated
for Impairment		Total
Recorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan losses
(In thousands)
Commercial and industrial$3,693  $161  $562,055  $9,398  $565,748  $9,559  
Paycheck Protection Program—  —  370,034  190  370,034  190  
Commercial tax-exempt—  —  419,264  2,486  419,264  2,486  
Commercial real estate6,007  —  2,670,701  47,675  2,676,708  47,675  
Construction and land—  —  240,211  9,524  240,211  9,524  
Residential16,837  60  2,842,790  17,705  2,859,627  17,765  
Home equity654  18  83,934  421  84,588  439  
Consumer and other—  —  116,774  1,686  116,774  1,686  
Total$27,191  $239  $7,305,763  $89,085  $7,332,954  $89,324  
December 31, 2019
Individually Evaluated
for Impairment		Collectively Evaluated
for Impairment		Total
Recorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan lossesRecorded investment
(loan balance)		Allowance for loan losses
(In thousands)
Commercial and industrial$724  $146  $1,141,237  $15,918  $1,141,961  $16,064  
Commercial real estate733  —  2,550,541  40,765  2,551,274  40,765  
Construction and land—  —  225,983  5,119  225,983  5,119  
Residential15,900  67  2,823,255  8,790  2,839,155  8,857  
Home equity1,830  22  81,827  756  83,657  778  
Consumer and other—  —  134,674  399  134,674  399  
Total$19,187  $235  $6,957,517  $71,747  $6,976,704  $71,982  
v3.20.2
Derivatives and Hedging Activities (Tables)
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of derivative instruments in statement of financial position
The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019:
 June 30, 2020December 31, 2019
 Asset derivativesLiability derivativesAsset derivativesLiability derivatives
 Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)		Balance
sheet
location		Fair 
value (1)
 (In thousands)
Derivatives designated as hedging instruments:
Interest rate swapsOther assets$—  Other liabilities$274  Other assets$—  Other liabilities$—  
Derivatives not designated as hedging instruments:
Interest rate customer swapsOther assets96,968  Other liabilities97,760  Other assets36,089  Other liabilities36,580  
Risk participation agreementsOther assets21  Other liabilities478  Other assets10  Other liabilities242  
Total$96,989  $98,512  $36,099  $36,822  
_____________________
(1)For additional details, see Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 5: Fair Value Measurements.”
Schedule of derivative instruments, gain (loss) in statement of financial performance
The following table presents the effect of the Company’s derivative financial instruments on accumulated other comprehensive income for the three and six months ended June 30, 2020 and 2019:
Derivatives in cash
flow hedging
relationships
Amount of gain or (loss) recognized in OCI on derivatives
Location of gain
or (loss) reclassified
from accumulated
OCI into income
Amount of gain or (loss) reclassified from accumulated OCI into income
Three months ended June 30,Three months ended June 30,
2020201920202019
(In thousands)(In thousands)
Interest rate swaps$(426) $(9) Interest income/(expense)$(152) $191  
Total$(426) $(9) $(152) $191  
Derivatives in cash
flow hedging
relationships		Amount of gain or (loss) recognized in OCI on derivatives Location of gain
or (loss) reclassified
from accumulated
OCI into income		Amount of gain or (loss) reclassified from accumulated OCI into income
Six months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)(In thousands)
Interest rate swaps$(426) $(47) Interest income/(expense)$(152) $502  
Total$(426) $(47) $(152) $502  
The following table presents the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019:
Location of gain or (loss) reclassified from accumulated
OCI into income		Amount of gain or
(loss) recognized in
income on cash flow
hedging relationships		Amount of gain or
(loss) recognized in
income on cash flow
hedging relationships
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)
Total amounts of income and (expense) line items presented in the statement of operations in which the effects of fair value or cash flow hedges are recordedInterest income/(expense)$(152) $191  $(152) $502  
The effects of cash flow hedging:
Gain or (loss) on cash flow hedging relationships in ASC 815
Interest contracts - amount of gain or (loss) reclassified from accumulated other comprehensive income into incomeInterest income/(expense)$(152) $191  $(152) $502  
Derivatives not designated as hedging instrument
The following table presents the effect of the Bank’s derivative financial instruments not designated as hedging instruments in the Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019.
Amount of gain or (loss), net,
recognized in income on derivatives
Derivatives not designated as
hedging instruments		Location of gain or (loss) recognized in income on derivativesThree months ended June 30,Six months ended June 30,
2020201920202019
 (In thousands)
Interest rate swapsOther income/(expense)$254  $(64) $(301) $(255) 
Risk participation agreementsOther income/(expense)(24) (213) (226) (109) 
Total$230  $(277) $(527) $(364) 
v3.20.2
Income Taxes (Tables)
 6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Schedule of effective income tax rate reconciliation
The following table presents the components of income tax expense and effective tax rates for the periods indicated:
Six months ended June 30,
20202019
(In thousands)
Income/(loss) before income taxes$(1,549) $49,277  
Income tax expense943  10,286  
Net income/(loss) before attribution to noncontrolling interests$(2,492) $38,991  
Effective tax rate(60.9)%20.9 %
v3.20.2
Noncontrolling Interests (Tables)
 6 Months Ended
Jun. 30, 2020
Noncontrolling Interest [Abstract]  
Consolidation, less than wholly owned subsidiary, parent ownership interest, effects of changes, net The following table presents a rollforward of the Company’s redeemable noncontrolling interests for the periods indicated:
Three months endedSix months ended
June 30, 2020June 30, 2019June 30, 2020June 30, 2019
(In thousands)
Redeemable noncontrolling interests at beginning of period$—  $662  $1,383  $2,526  
Net income attributable to noncontrolling interests—  69  6  169  
Distributions—  (69) (6) (169) 
Purchases/(sales) of ownership interests—  —  (64) 12  
Amortization of equity compensation8  9  16  26  
Adjustments to fair value(8) 1,115  (1,335) (778) 
Redeemable noncontrolling interests at end of period$—  $1,786  $—  $1,786  
v3.20.2
Accumulated Other Comprehensive Income (Tables)
 6 Months Ended
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Reclassification out of accumulated other comprehensive income
The following table presents a summary of the amounts reclassified from the Company's Accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020 and 2019:
Description of component of Accumulated other comprehensive income/(loss)Three months ended June 30,Six months ended June 30,Affected line item in
Statement of Operations
2020201920202019
(In thousands)
Net realized gain/(loss) on cash flow hedges:
Hedges related to deposits:
Pre-tax gain/(loss)$(152) $191  $(152) $502  Interest income/(expense)
Tax (expense)/ benefit45  (55) 45  (146) Income tax (expense)/benefit
Net$(107) $136  $(107) $356  Net income/(loss) attributable to the Company
Total reclassifications for the period, net of tax$(107) $136  $(107) $356  
Schedule of accumulated other comprehensive income (loss)
The following table presents the after-tax changes in the components of the Company’s Accumulated other comprehensive income/(loss) for the three and six months ended June 30, 2020 and 2019:
Components of Accumulated other comprehensive income/(loss)
Unrealized
gain/(loss)
on securities
available-for-sale		Unrealized
gain/(loss)
on cash flow
hedges		Unrealized
gain/(loss)
on other		Accumulated
other
comprehensive
income/(loss)
(In thousands)
Balance at December 31, 2018$(17,556) $391  $(554) $(17,719) 
Other comprehensive income/(loss) before reclassifications22,233  (33) —  22,200  
Reclassified from other comprehensive income/(loss)—  (356) —  (356) 
Other comprehensive income/(loss), net22,233  (389) —  21,844  
Balance at June 30, 2019$4,677  $2  $(554) $4,125  
Balance at December 31, 2019$8,435  $—  $(860) $7,575  
Other comprehensive income/(loss) before reclassifications22,687  (302) (30) 22,355  
Reclassified from other comprehensive income/(loss)—  107  —  107  
Other comprehensive income/(loss), net22,687  (195) (30) 22,462  
Balance at June 30, 2020$31,122  $(195) $(890) $30,037  
Components of Accumulated other comprehensive income/(loss)
Unrealized
gain/(loss)
on securities
available-for-sale		Unrealized
gain/(loss)
on cash flow
hedges		Unrealized
gain/(loss)
on other		Accumulated
other
comprehensive
income/(loss)
(In thousands)
Balance at March 31, 2019$(5,988) $144  $(554) $(6,398) 
Other comprehensive income/(loss) before reclassifications10,665  (6) —  10,659  
Reclassified from other comprehensive income/(loss)—  (136) —  (136) 
Other comprehensive income/(loss), net10,665  (142) —  10,523  
Balance at June 30, 2019$4,677  $2  $(554) $4,125  
Balance at March 31, 2020$22,924  $—  $(860) $22,064  
Other comprehensive income/(loss) before reclassifications8,198  (302) (30) 7,866  
Reclassified from other comprehensive income/(loss)—  107  —  107  
Other comprehensive income/(loss), net8,198  (195) (30) 7,973  
Balance at June 30, 2020$31,122  $(195) $(890) $30,037  
v3.20.2
Restructuring (Tables)
 6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
Schedule of restructuring activity
The following table presents a summary of the restructuring activity for the three and six months ended June 30, 2020 and 2019:
Severance ChargesOther Associated CostsTotal
(In thousands)
Accrued charges at December 31, 2019$526  $789  $1,315  
Costs paid(434) —  (434) 
Accrued charges at March 31, 202092  789  881  
Costs paid(92) —  (92) 
Accrued charges at June 30, 2020$—  $789  $789  
Accrued charges at December 31, 2018$3,896  $789  $4,685  
Cost incurred1,646  —  1,646  
Costs paid(1,986) —  (1,986) 
Accrued charges at March 31, 20193,556  789  4,345  
Costs paid(1,364) —  (1,364) 
Accrued charges at June 30, 2019$2,192  $789  $2,981  
v3.20.2
Revenue Recognition (Tables)
 6 Months Ended
Jun. 30, 2020
Revenue Recognition [Abstract]  
Fee Income Considered In-scope of ASC 606
The following table presents the fee income considered in-scope of ASC 606 by contracts with customers:
 Three months ended June 30,Six months ended June 30,
 2020201920202019
 (In thousands)
Fees and other income:
Wealth management and trust fees $17,261  $18,912  $35,632  $37,970  
Investment management fees1,770  2,455  3,695  5,105  
Other income602  638  1,354  1,322  
Revenue from contracts with customers19,633  22,005  40,681  44,397  
Non-interest income within the scope of other GAAP topics3,029  2,375  3,502  5,231  
Total non-interest income$22,662  $24,380  $44,183  $49,628  
v3.20.2
Lease Accounting (Tables)
 6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Schedule of lease cost
The following table presents information about the Company's leases as of the dates indicated.
Three months ended June 30,Six months ended June 30,
2020201920202019
(In thousands)
Lease cost
Operating lease cost$4,493  $4,841  $9,094  $9,526  
Short-term lease cost58  (3) 106  29  
Variable lease cost—  2  (9) 4  
Less: Sublease income—  (28) (28) (46) 
Total operating lease cost$4,551  $4,812  $9,163  $9,513  
Six months ended June 30, 2020
(In thousands, except years and percentages)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$10,180  
ROU assets obtained in exchange for new operating lease liabilities$443  
Weighted-average remaining lease term for operating leases7.8 years
Weighted-average discount rate for operating leases3.2 %
Schedule of minimum payment obligation
The Company is obligated for minimum payments under non-cancelable operating leases. In accordance with the terms of these leases, the Company is currently committed to minimum annual payments as follows as of June 30, 2020:
June 30, 2020
(In thousands)
Remainder of 2020$9,883  
202119,727  
202219,680  
202318,722  
202412,692  
Thereafter43,964  
Total future minimum lease payments124,668  
Less: Amounts representing interest(16,434) 
Present value of net future minimum lease payments$108,234  
v3.20.2
Basis of Presentation and Summary of Significant Accounting Policies (Details)
$ in Thousands
 6 Months Ended 8 Months Ended
Jan. 01, 2019
Jun. 30, 2020
USD ($)
market
segment
Jun. 30, 2019
USD ($)
Aug. 31, 2019
segment
affiliate
Mar. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Mar. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Basis Of Presentation And Significant Accounting Policies [Line Items]                
Number of reportable segments | segment   2   3        
Number of affiliates | affiliate       2        
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member us-gaap:AccountingStandardsUpdate201613Member us-gaap:AccountingStandardsUpdate201602Member          
Allowance for loans losses   $ 89,324 $ 75,067   $ 68,211 $ 71,982 $ 73,814 $ 75,312
Reserve for unfunded loan commitments   7,100            
Increase in retained earnings   $ 825,205 $ 798,211   $ 828,792 819,018 $ 778,819 $ 753,954
Cumulative Effect, Period of Adoption, Adjustment                
Basis Of Presentation And Significant Accounting Policies [Line Items]                
Increase in retained earnings [1]           13,492    
Private Banking                
Basis Of Presentation And Significant Accounting Policies [Line Items]                
Number of geographic markets | market   3            
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment                
Basis Of Presentation And Significant Accounting Policies [Line Items]                
Allowance for loans losses           (20,400)    
Reserve for unfunded loan commitments           1,400    
Increase in retained earnings           $ 13,500    
[1] Impact due to the adoption of ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements.”
v3.20.2
Earnings/(Loss) Per Share - Basic (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Basic earnings/(loss) per share - Numerator:        
Net income/(loss) before attribution to noncontrolling interests $ (3,298) $ 19,449 $ (2,492) $ 38,991
Less: Net income attributable to noncontrolling interests 0 69 6 169
Net income/(loss) attributable to the Company (3,298) 19,380 (2,498) 38,822
Decrease/(increase) in noncontrolling interests' redemption values 0 (816) 414 741
Net income/(loss) attributable to common shareholders, treasury stock method $ (3,298) $ 18,564 $ (2,084) $ 39,563
Basic earnings/(loss) per share - Denominator:        
Weighted average basic common shares outstanding (in shares) 81,929,752 83,565,780 82,464,438 83,426,213
Per share data - Basic earnings/(loss) per share:        
Total attributable to common shareholders (in dollars per share) $ (0.04) $ 0.22 $ (0.03) $ 0.47
v3.20.2
Earnings/(Loss) Per Share - Diluted (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Diluted earnings/(loss) per share - Numerator:        
Net income/(loss) attributable to common shareholders, after assumed dilution $ (3,298) $ 18,564 $ (2,084) $ 39,563
Diluted earnings/(loss) per share - Denominator:        
Weighted average basic common shares outstanding (in shares) 81,929,752 83,565,780 82,464,438 83,426,213
Diluted earnings/(loss) per share - Denominator:        
Time-based and market-based stock options, performance-based and time-based restricted stock, and performance-based and time-based restricted stock units, and other dilutive securities (in shares) 0 483,192 0 609,837
Weighted average diluted common shares outstanding (in shares) 81,929,752 84,048,972 82,464,438 84,036,050
Per share data - Diluted earnings/(loss) per share:        
Total attributable to common shareholders (in dollars per share) $ (0.04) $ 0.22 $ (0.03) $ 0.47
Dividends per share declared and paid on common stock (in dollars per share) $ 0.12 $ 0.12 $ 0.24 $ 0.24
v3.20.2
Earnings/(Loss) Per Share - Securities Excluded Due to Exercise Price Exceeding Average Price During Period (Details) - shares
shares in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Shares Excluded Due to Exercise Price Exceeding Average Price During Period [Line Items]        
Total shares excluded due to exercise price exceeding the average market price of common shares during the period (in shares) 2,328 750 1,813 820
Potential common shares from: options, restricted stock, or other dilutive securities        
Shares Excluded Due to Exercise Price Exceeding Average Price During Period [Line Items]        
Total shares excluded due to exercise price exceeding the average market price of common shares during the period (in shares) 2,328 750 1,813 820
v3.20.2
Reportable Segments - Narrative (Details)
 6 Months Ended 8 Months Ended
Jun. 30, 2020
market
segment
Aug. 31, 2019
segment
Segment Reporting Information [Line Items]    
Number of reportable segments | segment 2 3
Private Banking    
Segment Reporting Information [Line Items]    
Number of geographic markets | market 3  
v3.20.2
Reportable Segments - Reconciliation of Reportable Segment Items (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Segment Reporting Information [Line Items]            
Net interest income $ 58,938 $ 57,460   $ 116,195 $ 115,798  
Fees and other income 22,662 24,380   44,183 49,628  
Total revenue 81,600 81,840   160,378 165,426  
Provision/(credit) for loan losses 22,604 1,363   39,566 (63)  
Operating expense 61,453 55,659   122,361 116,212  
Income/(loss) before income taxes (2,457) 24,818   (1,549) 49,277  
Income tax expense/(benefit) 841 5,369   943 10,286  
Net income/(loss) before attribution to noncontrolling interests (3,298) 19,449   (2,492) 38,991  
Noncontrolling interests 0 69   6 169  
Net income/(loss) attributable to the Company (3,298) 19,380   (2,498) 38,822  
Assets 9,158,906 8,712,873   9,158,906 8,712,873 $ 8,830,501
Amortization of intangibles 702 672   1,417 1,344  
Depreciation 2,935 2,755   5,894 5,839  
Restructuring charges 0 0 $ 1,600 0 1,646  
Operating Segments | Private Banking            
Segment Reporting Information [Line Items]            
Net interest income 59,690 58,419   117,780 117,756  
Fees and other income 3,597 2,804   4,705 6,062  
Total revenue 63,287 61,223   122,485 123,818  
Provision/(credit) for loan losses 22,604 1,363   39,566 (63)  
Operating expense 42,914 37,805   85,502 79,122  
Income/(loss) before income taxes (2,231) 22,055   (2,583) 44,759  
Income tax expense/(benefit) (1,255) 4,878   (2,186) 9,308  
Net income/(loss) before attribution to noncontrolling interests (976) 17,177   (397) 35,451  
Net income/(loss) attributable to the Company (976) 17,177   (397) 35,451  
Assets 9,104,761 8,619,399   9,104,761 8,619,399  
Amortization of intangibles 64 0   141 0  
Depreciation 2,611 2,373   5,237 5,043  
Operating Segments | Wealth Management and Trust            
Segment Reporting Information [Line Items]            
Net interest income 7 104   79 210  
Fees and other income 17,292 18,956   35,777 38,082  
Total revenue 17,299 19,060   35,856 38,292  
Operating expense 14,651 14,409   30,100 29,976  
Income/(loss) before income taxes 2,648 4,651   5,756 8,316  
Income tax expense/(benefit) 898 1,520   1,972 2,714  
Net income/(loss) before attribution to noncontrolling interests 1,750 3,131   3,784 5,602  
Net income/(loss) attributable to the Company 1,750 3,131   3,784 5,602  
Assets 146,254 151,128   146,254 151,128  
Amortization of intangibles 638 672   1,276 1,344  
Depreciation 286 333   580 700  
Holding Company and Eliminations            
Segment Reporting Information [Line Items]            
Net interest income (759) (1,063)   (1,664) (2,168)  
Fees and other income 1,773 2,620   3,701 5,484  
Total revenue 1,014 1,557   2,037 3,316  
Operating expense 3,888 3,445   6,759 7,114  
Income/(loss) before income taxes (2,874) (1,888)   (4,722) (3,798)  
Income tax expense/(benefit) 1,198 (1,029)   1,157 (1,736)  
Net income/(loss) before attribution to noncontrolling interests (4,072) (859)   (5,879) (2,062)  
Noncontrolling interests 0 69   6 169  
Net income/(loss) attributable to the Company (4,072) (928)   (5,885) (2,231)  
Assets (92,109) (57,654)   (92,109) (57,654)  
Depreciation $ 38 $ 49   $ 77 96  
Interest income/(expense) | Operating Segments | Private Banking            
Segment Reporting Information [Line Items]            
Restructuring charges         1,300  
Interest income/(expense) | Operating Segments | Wealth Management and Trust            
Segment Reporting Information [Line Items]            
Restructuring charges         $ 400  
v3.20.2
Investments - Schedule of Available-for-sale and Held-to-Maturity Securities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Available-for-sale securities at fair value:    
Amortized Cost $ 959,850 $ 966,900
Unrealized Gains 43,294 15,002
Unrealized Losses (174) (3,618)
Fair Value 1,002,970 978,284
Held-to-maturity securities at amortized cost:    
Amortized Cost 42,495 48,212
Unrealized Gains 888 53
Unrealized Losses (32) (316)
Fair Value 43,351 47,949
Equity securities at fair value:    
Amortized Cost 24,492 18,810
Fair Value 24,492 18,810
U.S. government and agencies    
Available-for-sale securities at fair value:    
Amortized Cost 19,959 19,955
Unrealized Gains 1,162 42
Unrealized Losses 0 (57)
Fair Value 21,121 19,940
Government-sponsored entities    
Available-for-sale securities at fair value:    
Amortized Cost 153,225 154,963
Unrealized Gains 5,718 1,292
Unrealized Losses 0 0
Fair Value 158,943 156,255
Municipal bonds    
Available-for-sale securities at fair value:    
Amortized Cost 315,056 312,977
Unrealized Gains 18,899 12,551
Unrealized Losses 0 (73)
Fair Value 333,955 325,455
Mortgage-backed securities    
Available-for-sale securities at fair value:    
Amortized Cost 471,610 479,005
Unrealized Gains 17,515 1,117
Unrealized Losses (174) (3,488)
Fair Value 488,951 476,634
Held-to-maturity securities at amortized cost:    
Amortized Cost 42,495 48,212
Unrealized Gains 888 53
Unrealized Losses (32) (316)
Fair Value 43,351 47,949
Money market mutual funds    
Equity securities at fair value:    
Amortized Cost 24,492 18,810
Fair Value $ 24,492 $ 18,810
v3.20.2
Investments - Assessment for Credit Impairment (Details)
 6 Months Ended
Jun. 30, 2020
USD ($)
security
Jun. 30, 2019
USD ($)
Investments [Abstract]    
Past due held-to-maturity securities $ 0  
Credit allowance, held-to-maturity investment portfolio $ 0  
Number of available-for-sale securities with impairment | security 0  
Credit allowance, available-for-sale investment portfolio $ 0  
Sales of equity securities $ 0 $ 0
v3.20.2
Investments - Maturities of AFS Securities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Amortized Cost    
Within one year $ 45,957  
After one, but within five years 301,995  
After five, but within ten years 231,164  
Greater than ten years 380,734  
Amortized Cost 959,850 $ 966,900
Fair Value    
Within one year 46,277  
After one, but within five years 314,345  
After five, but within ten years 244,374  
Greater than ten years 397,974  
Total $ 1,002,970 $ 978,284
v3.20.2
Investments - Maturities of HTM Securities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Amortized Cost    
After five, but within ten years $ 34,732  
Greater than ten years 7,763  
Amortized Cost 42,495 $ 48,212
Fair Value    
After five, but within ten years 35,377  
Greater than ten years 7,974  
Total $ 43,351 $ 47,949
v3.20.2
Investments - Maturities of Equity Securities (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Amortized Cost    
Within one year $ 24,492  
Total 24,492  
Fair Value    
Within one year 24,492  
Total $ 24,492 $ 18,810
v3.20.2
Investments - Investment Securities in Unrealized Loss Position (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
security
Dec. 31, 2019
USD ($)
security
Fair Value    
Less than 12 months $ 20,871 $ 161,496
12 months or longer 10,622 187,043
Total 31,493 348,539
Unrealized Losses    
Less than 12 months (45) (1,146)
12 months or longer (129) (2,472)
Less than 12 months $ (174) $ (3,618)
Number of securities | security 28 91
Fair Value    
Less than 12 months $ 2,135 $ 10,328
12 months or longer 2,024 30,451
Total 4,159 40,779
Unrealized Losses    
Less than 12 months (9) (11)
12 months or longer (23) (305)
Total $ (32) $ (316)
Number of securities | security 2 14
U.S. government and agencies    
Fair Value    
Less than 12 months   $ 9,899
12 months or longer   0
Total   9,899
Unrealized Losses    
Less than 12 months   (57)
12 months or longer   0
Less than 12 months   $ (57)
Number of securities | security   1
Government-sponsored entities    
Fair Value    
Less than 12 months   $ 1,725
12 months or longer   0
Total   1,725
Unrealized Losses    
Less than 12 months   0
12 months or longer   0
Less than 12 months   $ 0
Number of securities | security   1
Municipal bonds    
Fair Value    
Less than 12 months   $ 9,149
12 months or longer   0
Total   9,149
Unrealized Losses    
Less than 12 months   (73)
12 months or longer   0
Less than 12 months   $ (73)
Number of securities | security   4
Mortgage-backed securities    
Fair Value    
Less than 12 months $ 20,871 $ 140,723
12 months or longer 10,622 187,043
Total 31,493 327,766
Unrealized Losses    
Less than 12 months (45) (1,016)
12 months or longer (129) (2,472)
Less than 12 months $ (174) $ (3,488)
Number of securities | security 28 85
Fair Value    
Less than 12 months $ 2,135 $ 10,328
12 months or longer 2,024 30,451
Total 4,159 40,779
Unrealized Losses    
Less than 12 months (9) (11)
12 months or longer (23) (305)
Total $ (32) $ (316)
Number of securities | security 2 14
v3.20.2
Investments - Other Investment Disclosures (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Investments [Abstract]    
Other investments with unrealized losses $ 0 $ 0
Investments in low income housing projects $ 74,800,000 $ 65,500,000
v3.20.2
Fair Value Measurements - Recurring Basis (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Assets:    
Available-for-sale securities: $ 1,002,970,000 $ 978,284,000
Equity securities 24,492,000 18,810,000
U.S. government and agencies    
Assets:    
Available-for-sale securities: 21,121,000 19,940,000
Government-sponsored entities    
Assets:    
Available-for-sale securities: 158,943,000 156,255,000
Municipal bonds    
Assets:    
Available-for-sale securities: 333,955,000 325,455,000
Mortgage-backed securities    
Assets:    
Available-for-sale securities: 488,951,000 476,634,000
Fair Value, Measurements, Recurring    
Assets:    
Available-for-sale securities: 1,002,970,000 978,284,000
Trading securities held in the “rabbi trust” 6,328,000 6,119,000
Liabilities:    
Deferred compensation “rabbi trust” 6,320,000 6,112,000
Fair Value, Measurements, Recurring | U.S. government and agencies    
Assets:    
Available-for-sale securities: 21,121,000 19,940,000
Fair Value, Measurements, Recurring | Government-sponsored entities    
Assets:    
Available-for-sale securities: 158,943,000 156,255,000
Fair Value, Measurements, Recurring | Municipal bonds    
Assets:    
Available-for-sale securities: 333,955,000 325,455,000
Fair Value, Measurements, Recurring | Mortgage-backed securities    
Assets:    
Available-for-sale securities: 488,951,000 476,634,000
Fair Value, Measurements, Recurring | Derivatives - interest rate customer swaps    
Assets:    
Derivatives 96,968,000 36,089,000
Liabilities:    
Derivatives 97,760,000 36,580,000
Fair Value, Measurements, Recurring | Interest rate swaps    
Liabilities:    
Derivatives 274,000  
Fair Value, Measurements, Recurring | Risk participation agreements    
Assets:    
Derivatives 21,000 10,000
Liabilities:    
Derivatives 478,000 242,000
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1)    
Assets:    
Available-for-sale securities: 0 0
Equity securities 24,492,000 18,810,000
Trading securities held in the “rabbi trust” 6,328,000 6,119,000
Liabilities:    
Deferred compensation “rabbi trust” 6,320,000 6,112,000
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | U.S. government and agencies    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Government-sponsored entities    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Municipal bonds    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Mortgage-backed securities    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Derivatives - interest rate customer swaps    
Assets:    
Derivatives 0 0
Liabilities:    
Derivatives 0 0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Interest rate swaps    
Liabilities:    
Derivatives 0  
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Risk participation agreements    
Assets:    
Derivatives 0 0
Liabilities:    
Derivatives 0 0
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2)    
Assets:    
Available-for-sale securities: 1,002,970,000 978,284,000
Equity securities 0 0
Trading securities held in the “rabbi trust” 0 0
Liabilities:    
Deferred compensation “rabbi trust” 0 0
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2) | U.S. government and agencies    
Assets:    
Available-for-sale securities: 21,121,000 19,940,000
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2) | Government-sponsored entities    
Assets:    
Available-for-sale securities: 158,943,000 156,255,000
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2) | Municipal bonds    
Assets:    
Available-for-sale securities: 333,955,000 325,455,000
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2) | Mortgage-backed securities    
Assets:    
Available-for-sale securities: 488,951,000 476,634,000
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2) | Derivatives - interest rate customer swaps    
Assets:    
Derivatives 96,968,000 36,089,000
Liabilities:    
Derivatives 97,760,000 36,580,000
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2) | Interest rate swaps    
Liabilities:    
Derivatives 274,000  
Fair Value, Measurements, Recurring | Significant  other observable inputs (Level 2) | Risk participation agreements    
Assets:    
Derivatives 21,000 10,000
Liabilities:    
Derivatives 478,000 242,000
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3)    
Assets:    
Available-for-sale securities: 0 0
Equity securities 0 0
Trading securities held in the “rabbi trust” 0 0
Liabilities:    
Deferred compensation “rabbi trust” 0 0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | U.S. government and agencies    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Government-sponsored entities    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Municipal bonds    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Mortgage-backed securities    
Assets:    
Available-for-sale securities: 0 0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Derivatives - interest rate customer swaps    
Assets:    
Derivatives 0 0
Liabilities:    
Derivatives 0 0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Interest rate swaps    
Liabilities:    
Derivatives 0  
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Risk participation agreements    
Assets:    
Derivatives 0 0
Liabilities:    
Derivatives $ 0 $ 0
v3.20.2
Fair Value Measurements - Narrative (Details) - USD ($)
Jun. 30, 2020
Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale securities: $ 1,002,970,000 $ 978,284,000
Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale securities: 1,002,970,000 978,284,000
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale securities: 0 0
Assets value $ 0 $ 0
v3.20.2
Fair Value Measurements - Nonrecurring Basis (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Fair value measurements at reporting date using:          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans $ 7,082,051   $ 7,082,051   $ 6,883,360
Fair value measurements at reporting date using: | Quoted prices in active markets for identical assets (Level 1)          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans 0   0   0
Fair value measurements at reporting date using: | Significant  other observable inputs (Level 2)          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans 0   0   0
Fair value measurements at reporting date using: | Significant unobservable inputs (Level 3)          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans 7,082,051   7,082,051   $ 6,883,360
Fair value measurements at reporting date using: | Fair Value, Measurements, Nonrecurring          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans 98 $ 1,144 98 $ 1,144  
Fair value measurements at reporting date using: | Fair Value, Measurements, Nonrecurring | Quoted prices in active markets for identical assets (Level 1)          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans 0 0 0 0  
Fair value measurements at reporting date using: | Fair Value, Measurements, Nonrecurring | Significant  other observable inputs (Level 2)          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans 0 0 0 0  
Fair value measurements at reporting date using: | Fair Value, Measurements, Nonrecurring | Significant unobservable inputs (Level 3)          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Assets: Impaired loans 98 1,144 98 1,144  
Gain (losses) from fair value changes | Fair Value, Measurements, Nonrecurring          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Gain (losses) from fair value changes $ (1,219) $ 220 $ (1,198) $ 592  
v3.20.2
Fair Value Measurements - Quantitative Information about Level 3 Non-Recurring Assets (Details) - Significant unobservable inputs (Level 3) - Fair Value, Measurements, Nonrecurring
$ in Thousands
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Substandard    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]    
Fair Value $ 98 $ 1,144
Discount for costs to sell | Weighted Average of Inputs Utilized    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]    
Fair Value, non-recurring basis, weighted average unobservable input 0.10 0.04
Discount for costs to sell | Minimum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]    
Fair Value, non-recurring basis, weighted average unobservable input 0.10 0
Discount for costs to sell | Maximum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]    
Fair Value, non-recurring basis, weighted average unobservable input 0.10 0.05
Appraisal adjustments    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]    
Fair Value, non-recurring basis, weighted average unobservable input 0 0
Appraisal adjustments | Weighted Average of Inputs Utilized    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]    
Fair Value, non-recurring basis, weighted average unobservable input 0 0
v3.20.2
Fair Value Measurements - Not Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
FINANCIAL ASSETS:    
Investment securities held-to-maturity $ 43,351 $ 47,949
Book Value    
FINANCIAL ASSETS:    
Cash and cash equivalents 179,027 292,479
Investment securities held-to-maturity 42,495 48,212
Loans held for sale 9,786 7,386
Loans, net 7,243,630 6,904,722
Other financial assets 71,246 67,348
FINANCIAL LIABILITIES:    
Deposits 7,427,397 7,241,476
Securities sold under agreements to repurchase 46,623 53,398
Federal Home Loan Bank borrowings 426,313 350,829
Junior subordinated debentures 106,363 106,363
Other financial liabilities 2,557 1,957
Fair Value    
FINANCIAL ASSETS:    
Cash and cash equivalents 179,027 292,479
Investment securities held-to-maturity 43,351 47,949
Loans held for sale 9,958 7,475
Loans, net 7,082,051 6,883,360
Other financial assets 71,246 67,348
FINANCIAL LIABILITIES:    
Deposits 7,429,520 7,241,739
Securities sold under agreements to repurchase 46,623 53,398
Federal Home Loan Bank borrowings 428,014 351,233
Junior subordinated debentures 69,863 96,363
Other financial liabilities 2,557 1,957
Fair Value | Quoted prices in active markets for identical assets (Level 1)    
FINANCIAL ASSETS:    
Cash and cash equivalents 179,027 292,479
Investment securities held-to-maturity 0 0
Loans held for sale 0 0
Loans, net 0 0
Other financial assets 0 0
FINANCIAL LIABILITIES:    
Deposits 0 0
Securities sold under agreements to repurchase 0 0
Federal Home Loan Bank borrowings 0 0
Junior subordinated debentures 0 0
Other financial liabilities 0 0
Fair Value | Significant  other observable inputs (Level 2)    
FINANCIAL ASSETS:    
Cash and cash equivalents 0 0
Investment securities held-to-maturity 43,351 47,949
Loans held for sale 9,958 7,475
Loans, net 0 0
Other financial assets 71,246 67,348
FINANCIAL LIABILITIES:    
Deposits 7,429,520 7,241,739
Securities sold under agreements to repurchase 46,623 53,398
Federal Home Loan Bank borrowings 428,014 351,233
Junior subordinated debentures 0 0
Other financial liabilities 2,557 1,957
Fair Value | Significant unobservable inputs (Level 3)    
FINANCIAL ASSETS:    
Cash and cash equivalents 0 0
Investment securities held-to-maturity 0 0
Loans held for sale 0 0
Loans, net 7,082,051 6,883,360
Other financial assets 0 0
FINANCIAL LIABILITIES:    
Deposits 0 0
Securities sold under agreements to repurchase 0 0
Federal Home Loan Bank borrowings 0 0
Junior subordinated debentures 69,863 96,363
Other financial liabilities $ 0 $ 0
v3.20.2
Loan Portfolio and Credit Quality - Loans by Portfolio Segment (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable $ 7,332,954 $ 6,976,704
Commercial and industrial    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable 565,748 694,034
Paycheck Protection Program    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable 370,034 0
Commercial tax-exempt    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable 419,264 447,927
Commercial real estate    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable 2,676,708 2,551,274
Construction and land    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable 240,211 225,983
Residential    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable 2,859,627 2,839,155
Home equity    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable 84,588 83,657
Consumer and other    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Total Loans Receivable $ 116,774 $ 134,674
v3.20.2
Loan Portfolio and Credit Quality - Nonaccrual Loans by Class of Financing Receivable (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable $ 25,604 $ 16,103
Commercial and industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable 3,649 582
Paycheck Protection Program    
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable 0  
Commercial tax-exempt    
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable 0 0
Commercial real estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable 5,285 0
Residential    
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable 16,394 13,993
Home equity    
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable 195 1,525
Consumer and other    
Financing Receivable, Credit Quality Indicator [Line Items]    
Nonaccrual loan receivable $ 81 $ 3
v3.20.2
Loan Portfolio and Credit Quality - Narrative (Details)
$ in Thousands
Jun. 30, 2020
USD ($)
Jun. 30, 2020
loan
Jun. 30, 2020
security
Dec. 31, 2019
USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Financing receivable, 90 days or more past due, still accruing (less than) $ 100      
Loans pledged in blanket lien agreement 2,300,000     $ 2,500,000
Loans pledged as collateral 358,200     395,300
TDRs 14,800     12,600
Number of residential and home equity loans deferred   336 336  
Mortgage payments deferred 214,500      
Deferred loan (fees)/costs (1,600)     8,100
Performing Financial Instruments        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
TDRs $ 8,900     $ 7,100
v3.20.2
Loan Portfolio and Credit Quality - Loans by Past Due Status (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Past Due [Line Items]    
Accruing Past Due $ 5,585 $ 25,945
Nonaccrual Loans 25,604 16,103
Current Accruing Loans 7,301,765 6,934,656
Total Loans Receivable 7,332,954 6,976,704
Financing receivable, 90 days or more past due, still accruing (less than) 100  
30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 3,554 22,758
60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 1,981 3,187
Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 13,403 9,814
30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 1,725 1,148
90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 10,476 5,141
Commercial and industrial    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 3,101 828
Nonaccrual Loans 3,649 582
Current Accruing Loans 558,998 692,624
Total Loans Receivable 565,748 694,034
Commercial and industrial | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 3,058 828
Commercial and industrial | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 43 0
Commercial and industrial | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 636 0
Commercial and industrial | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 241
Commercial and industrial | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 3,013 341
Paycheck Protection Program    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0  
Nonaccrual Loans 0  
Current Accruing Loans 370,034  
Total Loans Receivable 370,034 0
Paycheck Protection Program | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0  
Paycheck Protection Program | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0  
Paycheck Protection Program | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0  
Paycheck Protection Program | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0  
Paycheck Protection Program | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0  
Commercial tax-exempt    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 0
Nonaccrual Loans 0 0
Current Accruing Loans 419,264 447,927
Total Loans Receivable 419,264 447,927
Commercial tax-exempt | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 0
Commercial tax-exempt | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 0
Commercial tax-exempt | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Commercial tax-exempt | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Commercial tax-exempt | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Commercial real estate    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 975 1,420
Nonaccrual Loans 5,285 0
Current Accruing Loans 2,670,448 2,549,854
Total Loans Receivable 2,676,708 2,551,274
Commercial real estate | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 1,420
Commercial real estate | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 925 0
Commercial real estate | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 5,285 0
Commercial real estate | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Commercial real estate | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Construction and land    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 0
Nonaccrual Loans 0 0
Current Accruing Loans 240,211 225,983
Total Loans Receivable 240,211 225,983
Construction and land | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 0
Construction and land | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 0
Construction and land | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Construction and land | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Construction and land | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Residential    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 747 20,171
Nonaccrual Loans 16,394 13,993
Current Accruing Loans 2,842,486 2,804,991
Total Loans Receivable 2,859,627 2,839,155
Residential | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 0 19,133
Residential | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 747 1,038
Residential | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 7,473 9,593
Residential | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 1,586 759
Residential | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 7,335 3,641
Home equity    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 740 369
Nonaccrual Loans 195 1,525
Current Accruing Loans 83,653 81,763
Total Loans Receivable 84,588 83,657
Home equity | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 489 369
Home equity | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 251 0
Home equity | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 8 220
Home equity | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 139 148
Home equity | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 48 1,157
Consumer and other    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 22 3,157
Nonaccrual Loans 81 3
Current Accruing Loans 116,671 131,514
Total Loans Receivable 116,774 134,674
Consumer and other | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 7 1,008
Consumer and other | 60-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Accruing Past Due 15 2,149
Consumer and other | Current    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 1 1
Consumer and other | 30-89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans 0 0
Consumer and other | 90 Days or Greater Past Due    
Financing Receivable, Past Due [Line Items]    
Nonaccrual Loans $ 80 $ 2
v3.20.2
Loan Portfolio and Credit Quality - Credit Quality Indicators (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans $ 7,332,954 $ 6,976,704
Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 7,026,882  
Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 191,882  
Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 88,586  
Commercial and industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 565,748 694,034
Commercial and industrial | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 513,576  
Commercial and industrial | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 8,628  
Commercial and industrial | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 39,895  
Paycheck Protection Program    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 370,034 0
Paycheck Protection Program | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 370,034  
Commercial tax-exempt    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 419,264 447,927
Commercial tax-exempt | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 408,326  
Commercial tax-exempt | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 2,460  
Commercial tax-exempt | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 8,478  
Commercial real estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 2,676,708 2,551,274
Commercial real estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 2,460,827  
Commercial real estate | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 175,661  
Commercial real estate | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 34,935  
Construction and land    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 240,211 225,983
Construction and land | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 235,378  
Construction and land | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 4,833  
Residential    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 2,859,627 2,839,155
Residential | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 2,839,005  
Residential | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 4,228  
Home equity    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 84,588 83,657
Home equity | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 83,343  
Home equity | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 1,050  
Consumer and other    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 116,774 134,674
Consumer and other | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 116,393  
Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 25,604  
Nonaccrual Loans | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 25,604 16,103
Nonaccrual Loans | Commercial and industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 3,649  
Nonaccrual Loans | Commercial and industrial | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 3,649 582
Nonaccrual Loans | Paycheck Protection Program | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 0  
Nonaccrual Loans | Commercial tax-exempt | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 0 0
Nonaccrual Loans | Commercial real estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 5,285  
Nonaccrual Loans | Commercial real estate | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 5,285 0
Nonaccrual Loans | Construction and land | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 0 0
Nonaccrual Loans | Residential    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 16,394  
Nonaccrual Loans | Residential | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 16,394 13,993
Nonaccrual Loans | Home equity    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 195  
Nonaccrual Loans | Home equity | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 195 1,525
Nonaccrual Loans | Consumer and other    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans 81  
Nonaccrual Loans | Consumer and other | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total loans $ 81 $ 3
v3.20.2
Loan Portfolio and Credit Quality - Loans by Grade or Nonaccrual Status (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 $ 955,735  
2019 1,292,099  
2018 942,497  
2017 911,800  
2016 1,031,046  
Prior 1,702,123  
Revolving 497,654  
Total Loans Receivable 7,332,954 $ 6,976,704
Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 49  
2019 5,708  
2018 1,157  
2017 2,726  
2016 0  
Prior 12,589  
Revolving 3,375  
Total Loans Receivable 25,604  
Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 933,594  
2019 1,235,090  
2018 900,975  
2017 886,965  
2016 983,106  
Prior 1,607,177  
Revolving 479,975  
Total Loans Receivable 7,026,882  
Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 7,026,882 6,850,653
Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 20,640  
2019 35,342  
2018 32,910  
2017 2,229  
2016 37,704  
Prior 60,044  
Revolving 3,013  
Total Loans Receivable 191,882  
Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 191,882 52,026
Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 1,452  
2019 15,959  
2018 7,455  
2017 19,880  
2016 10,236  
Prior 22,313  
Revolving 11,291  
Total Loans Receivable 88,586  
Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 25,604 16,103
Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 88,586 57,922
Commercial and industrial    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 24,289  
2019 98,101  
2018 81,275  
2017 33,133  
2016 27,059  
Prior 60,807  
Revolving 241,084  
Total Loans Receivable 565,748 694,034
Commercial and industrial | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 49  
2019 161  
2018 0  
2017 197  
2016 0  
Prior 14  
Revolving 3,228  
Total Loans Receivable 3,649  
Commercial and industrial | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 24,040  
2019 92,841  
2018 72,857  
2017 16,771  
2016 25,701  
Prior 57,514  
Revolving 223,852  
Total Loans Receivable 513,576  
Commercial and industrial | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 513,576 656,364
Commercial and industrial | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 676  
2018 963  
2017 1,439  
2016 0  
Prior 2,837  
Revolving 2,713  
Total Loans Receivable 8,628  
Commercial and industrial | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 8,628 12,101
Commercial and industrial | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 200  
2019 4,423  
2018 7,455  
2017 14,726  
2016 1,358  
Prior 442  
Revolving 11,291  
Total Loans Receivable 39,895  
Commercial and industrial | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 3,649 582
Commercial and industrial | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 39,895 24,987
Paycheck Protection Program    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 370,034  
2019 0  
2018 0  
2017 0  
2016 0  
Prior 0  
Revolving 0  
Total Loans Receivable 370,034 0
Paycheck Protection Program | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 370,034  
2019 0  
2018 0  
2017 0  
2016 0  
Prior 0  
Revolving 0  
Total Loans Receivable 370,034  
Paycheck Protection Program | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 370,034  
Paycheck Protection Program | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0  
Paycheck Protection Program | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0  
Paycheck Protection Program | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0  
Commercial tax-exempt    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 12,665  
2019 15,912  
2018 40,819  
2017 28,581  
2016 107,595  
Prior 213,692  
Revolving 0  
Total Loans Receivable 419,264 447,927
Commercial tax-exempt | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 12,665  
2019 15,912  
2018 40,819  
2017 24,606  
2016 107,595  
Prior 206,729  
Revolving 0  
Total Loans Receivable 408,326  
Commercial tax-exempt | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 408,326 436,721
Commercial tax-exempt | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 0  
2017 0  
2016 0  
Prior 2,460  
Revolving 0  
Total Loans Receivable 2,460  
Commercial tax-exempt | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 2,460 7,154
Commercial tax-exempt | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 0  
2017 3,975  
2016 0  
Prior 4,503  
Revolving 0  
Total Loans Receivable 8,478  
Commercial tax-exempt | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0 0
Commercial tax-exempt | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 8,478 4,052
Commercial real estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 209,250  
2019 532,982  
2018 287,596  
2017 340,806  
2016 440,361  
Prior 792,302  
Revolving 73,411  
Total Loans Receivable 2,676,708 2,551,274
Commercial real estate | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 5,285  
2018 0  
2017 0  
2016 0  
Prior 0  
Revolving 0  
Total Loans Receivable 5,285  
Commercial real estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 187,358  
2019 481,495  
2018 260,482  
2017 338,837  
2016 393,779  
Prior 725,465  
Revolving 73,411  
Total Loans Receivable 2,460,827  
Commercial real estate | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 2,460,827 2,495,702
Commercial real estate | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 20,640  
2019 34,666  
2018 27,114  
2017 790  
2016 37,704  
Prior 54,747  
Revolving 0  
Total Loans Receivable 175,661  
Commercial real estate | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 175,661 32,014
Commercial real estate | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 1,252  
2019 11,536  
2018 0  
2017 1,179  
2016 8,878  
Prior 12,090  
Revolving 0  
Total Loans Receivable 34,935  
Commercial real estate | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 5,285 0
Commercial real estate | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 34,935 23,558
Construction and land    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 5,937  
2019 61,095  
2018 82,528  
2017 47,276  
2016 16,928  
Prior 26,447  
Revolving 0  
Total Loans Receivable 240,211 225,983
Construction and land | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 5,937  
2019 61,095  
2018 77,695  
2017 47,276  
2016 16,928  
Prior 26,447  
Revolving 0  
Total Loans Receivable 235,378  
Construction and land | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 235,378 225,526
Construction and land | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 4,833  
2017 0  
2016 0  
Prior 0  
Revolving 0  
Total Loans Receivable 4,833  
Construction and land | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 4,833 457
Construction and land | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0 0
Construction and land | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0 0
Residential    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 332,172  
2019 583,691  
2018 449,714  
2017 461,756  
2016 438,329  
Prior 593,965  
Revolving 0  
Total Loans Receivable 2,859,627 2,839,155
Residential | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 262  
2018 1,084  
2017 2,529  
2016 0  
Prior 12,519  
Revolving 0  
Total Loans Receivable 16,394  
Residential | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 332,172  
2019 583,429  
2018 448,630  
2017 459,227  
2016 438,329  
Prior 577,218  
Revolving 0  
Total Loans Receivable 2,839,005  
Residential | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 2,839,005 2,820,909
Residential | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0 0
Residential | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 0  
2017 0  
2016 0  
Prior 4,228  
Revolving 0  
Total Loans Receivable 4,228  
Residential | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 16,394 13,993
Residential | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 4,228 4,253
Home equity    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 454  
2017 248  
2016 686  
Prior 14,104  
Revolving 69,096  
Total Loans Receivable 84,588 83,657
Home equity | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 0  
2017 0  
2016 0  
Prior 56  
Revolving 139  
Total Loans Receivable 195  
Home equity | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 454  
2017 248  
2016 686  
Prior 12,998  
Revolving 68,957  
Total Loans Receivable 83,343  
Home equity | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 83,343 81,060
Home equity | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 0 0
Home equity | Accruing Classified    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 0  
2017 0  
2016 0  
Prior 1,050  
Revolving 0  
Total Loans Receivable 1,050  
Home equity | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 195 1,525
Home equity | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 1,050 1,072
Consumer and other    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 1,388  
2019 318  
2018 111  
2017 0  
2016 88  
Prior 806  
Revolving 114,063  
Total Loans Receivable 116,774 134,674
Consumer and other | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 73  
2017 0  
2016 0  
Prior 0  
Revolving 8  
Total Loans Receivable 81  
Consumer and other | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 0  
2019 0  
2018 0  
2017 0  
2016 0  
Prior 0  
Revolving 300  
Total Loans Receivable 300  
Consumer and other | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 1,388  
2019 318  
2018 38  
2017 0  
2016 88  
Prior 806  
Revolving 113,755  
Total Loans Receivable 116,393  
Consumer and other | Pass | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 116,393 134,371
Consumer and other | Special Mention | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 300 300
Consumer and other | Accruing Classified | Nonaccrual Loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable 81 3
Consumer and other | Accruing Classified | Performing Financial Instruments    
Financing Receivable, Credit Quality Indicator [Line Items]    
Total Loans Receivable $ 0 $ 0
v3.20.2
Loan Portfolio and Credit Quality - Impaired Loans With and Without Related Allowance (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Recorded Investment          
With no related allowance recorded: $ 26,141 $ 19,293 $ 26,141 $ 19,293 $ 18,122
With an allowance recorded: 1,050 1,493 1,050 1,493 1,065
Total: 27,191 20,786 27,191 20,786 19,187
Unpaid Principal Balance          
With no related allowance recorded: 26,538 21,062 26,538 21,062 19,027
With an allowance recorded: 1,059 1,493 1,059 1,493 1,065
Total: 27,597 22,555 27,597 22,555 20,092
Related Allowance (239) (191) (239) (191) (235)
Average Recorded Investment          
With no related allowance recorded: 24,976 17,958 22,308 16,029 17,012
With an allowance recorded: 1,062 1,398 1,074 2,564 2,411
Total: 26,038 19,356 23,382 18,593 19,423
Interest Income Recognized while Impaired          
With no related allowance recorded: 158 114 293 522 1,201
With an allowance recorded: 5 11 11 34 60
Total: 163 125 304 556 1,261
Commercial and industrial          
Recorded Investment          
With no related allowance recorded: 3,434 1,669 3,434 1,669 470
With an allowance recorded: 259 441 259 441 254
Total: 3,693 2,110 3,693 2,110 724
Unpaid Principal Balance          
With no related allowance recorded: 3,456 2,616 3,456 2,616 553
With an allowance recorded: 268 441 268 441 254
Total: 3,724 3,057 3,724 3,057 807
Related Allowance (161) (93) (161) (93) (146)
Average Recorded Investment          
With no related allowance recorded: 1,323 1,520 1,058 1,328 1,062
With an allowance recorded: 265 596 273 1,036 736
Total: 1,588 2,116 1,331 2,364 1,798
Interest Income Recognized while Impaired          
With no related allowance recorded: 0 10 6 25 268
With an allowance recorded: 1 4 1 20 33
Total: 1 14 7 45 301
Paycheck Protection Program          
Recorded Investment          
With no related allowance recorded: 0   0    
With an allowance recorded: 0   0    
Total: 0   0    
Unpaid Principal Balance          
With no related allowance recorded: 0   0    
With an allowance recorded: 0   0    
Total: 0   0    
Related Allowance 0   0    
Average Recorded Investment          
With no related allowance recorded: 0   0    
With an allowance recorded: 0   0    
Total: 0   0    
Interest Income Recognized while Impaired          
With no related allowance recorded: 0   0    
With an allowance recorded: 0   0    
Total: 0   0    
Commercial tax-exempt          
Recorded Investment          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Unpaid Principal Balance          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Related Allowance 0 0 0 0 0
Average Recorded Investment          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Interest Income Recognized while Impaired          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Commercial real estate          
Recorded Investment          
With no related allowance recorded: 6,007 0 6,007 0 733
With an allowance recorded: 0 0 0 0 0
Total: 6,007 0 6,007 0 733
Unpaid Principal Balance          
With no related allowance recorded: 6,122 0 6,122 0 733
With an allowance recorded: 0 0 0 0 0
Total: 6,122 0 6,122 0 733
Related Allowance 0 0 0 0 0
Average Recorded Investment          
With no related allowance recorded: 6,064 0 3,964 78 155
With an allowance recorded: 0 0 0 0 0
Total: 6,064 0 3,964 78 155
Interest Income Recognized while Impaired          
With no related allowance recorded: 8 0 17 256 262
With an allowance recorded: 0 0 0 0 0
Total: 8 0 17 256 262
Construction and land          
Recorded Investment          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Unpaid Principal Balance          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Related Allowance 0 0 0 0 0
Average Recorded Investment          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Interest Income Recognized while Impaired          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Residential          
Recorded Investment          
With no related allowance recorded: 16,309 15,127 16,309 15,127 15,362
With an allowance recorded: 528 778 528 778 538
Total: 16,837 15,905 16,837 15,905 15,900
Unpaid Principal Balance          
With no related allowance recorded: 16,569 15,387 16,569 15,387 15,622
With an allowance recorded: 528 778 528 778 538
Total: 17,097 16,165 17,097 16,165 16,160
Related Allowance (60) (74) (60) (74) (67)
Average Recorded Investment          
With no related allowance recorded: 16,331 14,079 15,903 12,605 13,700
With an allowance recorded: 530 733 532 752 1,130
Total: 16,861 14,812 16,435 13,357 14,830
Interest Income Recognized while Impaired          
With no related allowance recorded: 143 103 260 240 636
With an allowance recorded: 2 6 6 13 23
Total: 145 109 266 253 659
Home equity          
Recorded Investment          
With no related allowance recorded: 391 2,497 391 2,497 1,557
With an allowance recorded: 263 274 263 274 273
Total: 654 2,771 654 2,771 1,830
Unpaid Principal Balance          
With no related allowance recorded: 391 3,059 391 3,059 2,119
With an allowance recorded: 263 274 263 274 273
Total: 654 3,333 654 3,333 2,392
Related Allowance (18) (24) (18) (24) (22)
Average Recorded Investment          
With no related allowance recorded: 1,258 2,359 1,383 2,018 2,095
With an allowance recorded: 267 69 269 776 545
Total: 1,525 2,428 1,652 2,794 2,640
Interest Income Recognized while Impaired          
With no related allowance recorded: 7 1 10 1 35
With an allowance recorded: 2 1 4 1 4
Total: 9 2 14 2 39
Consumer and other          
Recorded Investment          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Unpaid Principal Balance          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Related Allowance 0 0 0 0 0
Average Recorded Investment          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: 0 0 0 0 0
Interest Income Recognized while Impaired          
With no related allowance recorded: 0 0 0 0 0
With an allowance recorded: 0 0 0 0 0
Total: $ 0 $ 0 $ 0 $ 0 $ 0
v3.20.2
Loan Portfolio and Credit Quality - Loans Restructured (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
USD ($)
loan
Jun. 30, 2019
USD ($)
loan
Jun. 30, 2020
USD ($)
loan
Jun. 30, 2019
USD ($)
loan
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 2 2 4
Restructuring current quarter, pre-modification recorded investment $ 0 $ 496 $ 2,423 $ 3,675
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 496 $ 2,423 $ 3,675
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 1 0 1 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 1,562 $ 0 $ 1,562 $ 0
Commercial and industrial        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 0 1 1
Restructuring current quarter, pre-modification recorded investment $ 0 $ 0 $ 50 $ 179
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 0 $ 50 $ 179
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 0 0 0 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
Paycheck Protection Program        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0   0  
Restructuring current quarter, pre-modification recorded investment $ 0   $ 0  
Restructuring Current Quarter, Post-modification recorded investment $ 0   $ 0  
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 0   0  
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 0   $ 0  
Commercial tax-exempt        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 0 0 0
Restructuring current quarter, pre-modification recorded investment $ 0 $ 0 $ 0 $ 0
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 0 0 0 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
Commercial real estate        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 0 0 0
Restructuring current quarter, pre-modification recorded investment $ 0 $ 0 $ 0 $ 0
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 0 0 0 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
Construction and land        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 0 0 0
Restructuring current quarter, pre-modification recorded investment $ 0 $ 0 $ 0 $ 0
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 0 0 0 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
Residential        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 1 1 2
Restructuring current quarter, pre-modification recorded investment $ 0 $ 222 $ 2,373 $ 3,222
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 222 $ 2,373 $ 3,222
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 1 0 1 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 1,562 $ 0 $ 1,562 $ 0
Home equity        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 1 0 1
Restructuring current quarter, pre-modification recorded investment $ 0 $ 274 $ 0 $ 274
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 274 $ 0 $ 274
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 0 0 0 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
Consumer and other        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan 0 0 0 0
Restructuring current quarter, pre-modification recorded investment $ 0 $ 0 $ 0 $ 0
Restructuring Current Quarter, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
TDRs that defaulted that were restructured in prior twelve months, Number of Loans | loan 0 0 0 0
TDRs that defaulted that were restructured in prior twelve months, Post-modification recorded investment $ 0 $ 0 $ 0 $ 0
Extension of term        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       1
Restructuring Current Quarter, Post-modification recorded investment       $ 179
Extension of term | Commercial and industrial        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       1
Restructuring Current Quarter, Post-modification recorded investment       $ 179
Extension of term | Commercial tax-exempt        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Extension of term | Commercial real estate        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Extension of term | Construction and land        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Extension of term | Residential        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Extension of term | Home equity        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Extension of term | Consumer and other        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Temporary rate reduction        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       3
Restructuring Current Quarter, Post-modification recorded investment       $ 3,496
Temporary rate reduction | Commercial and industrial        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Temporary rate reduction | Commercial tax-exempt        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Temporary rate reduction | Commercial real estate        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Temporary rate reduction | Construction and land        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Temporary rate reduction | Residential        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       2
Restructuring Current Quarter, Post-modification recorded investment       $ 3,222
Temporary rate reduction | Home equity        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       1
Restructuring Current Quarter, Post-modification recorded investment       $ 274
Temporary rate reduction | Consumer and other        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral | Commercial and industrial        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral | Commercial tax-exempt        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral | Commercial real estate        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral | Construction and land        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral | Residential        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral | Home equity        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Payment deferral | Consumer and other        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions | Commercial and industrial        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions | Commercial tax-exempt        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions | Commercial real estate        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions | Construction and land        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions | Residential        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions | Home equity        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
Combination of concessions | Consumer and other        
Financing Receivable, Troubled Debt Restructuring [Line Items]        
Restructuring current quarter, number of loans processed | loan       0
Restructuring Current Quarter, Post-modification recorded investment       $ 0
v3.20.2
Loan Portfolio and Credit Quality - Loan Participation Amounts (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Financing Receivable, Impaired [Line Items]    
Total loan participations serviced for others $ 229,737 $ 230,014
Total loans serviced for others 130,114 204,696
Commercial and industrial    
Financing Receivable, Impaired [Line Items]    
Total loan participations serviced for others 15,122 14,533
Commercial tax-exempt    
Financing Receivable, Impaired [Line Items]    
Total loan participations serviced for others 17,829 18,101
Commercial real estate    
Financing Receivable, Impaired [Line Items]    
Total loan participations serviced for others 124,312 121,929
Construction and land    
Financing Receivable, Impaired [Line Items]    
Total loan participations serviced for others 72,474 75,451
Residential    
Financing Receivable, Impaired [Line Items]    
Total loans serviced for others $ 130,114 $ 204,696
v3.20.2
Allowance for Loan Losses - Narrative (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Receivables [Abstract]            
Reasonable and supportable period for estimating expected credit losses 2 years          
Straight line reversion period for estimating expected credit losses 12 months          
Allowance for loans losses $ 89,324 $ 68,211 $ 71,982 $ 75,067 $ 73,814 $ 75,312
v3.20.2
Allowance for Loan Losses - Allowance Rollforward (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jan. 01, 2020
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: $ 71,982 $ 68,211 $ 73,814 $ 71,982 $ 75,312        
Provision/(credit) for loan losses   22,604 1,363 39,566 (63)        
Reserve for unfunded loan commitments   7,100   7,100          
Unfunded loan commitments       6,000          
Loans charged off:   (1,546) (195) (2,074) (759)        
Recoveries on loans previously charged off:   55 85 235 577        
Allowance for loan losses, end of period:   89,324 75,067 89,324 75,067        
Increase (decrease) in allowance for loan and lease losses       17,300          
Provision/(credit) for loan losses   22,604 1,363 39,566 (63)        
Increase in retained earnings   825,205 798,211 825,205 798,211 $ 828,792 $ 819,018 $ 778,819 $ 753,954
Cumulative Effect, Period of Adoption, Adjustment                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Increase in retained earnings [1]             13,492    
ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 (20,385) 0              
Release in allowance for credit losses on adoption of ASU 2016-13 (20,385) 0              
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: (20,400)     (20,400)          
Reserve for unfunded loan commitments             1,400    
Increase in retained earnings             $ 13,500    
Commercial and industrial                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 10,048 10,255   10,048          
Provision/(credit) for loan losses   (359)   886          
Loans charged off:   (389)   (907)          
Recoveries on loans previously charged off:   52   97          
Allowance for loan losses, end of period:   9,559   9,559          
Provision/(credit) for loan losses   (359)   886          
Commercial and industrial | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 (565) 0              
Release in allowance for credit losses on adoption of ASU 2016-13 (565) 0              
Commercial and industrial, including tax exempt                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 16,064   15,687 16,064 15,912        
Provision/(credit) for loan losses     550   137        
Loans charged off:     (195)   (195)        
Recoveries on loans previously charged off:     40   228        
Allowance for loan losses, end of period:     16,082   16,082        
Provision/(credit) for loan losses     550   137        
Paycheck Protection Program                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 0 0   0          
Provision/(credit) for loan losses   190   190          
Loans charged off:   0   0          
Recoveries on loans previously charged off:   0   0          
Allowance for loan losses, end of period:   190   190          
Provision/(credit) for loan losses   190   190          
Paycheck Protection Program | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 0 0              
Release in allowance for credit losses on adoption of ASU 2016-13 0 0              
Commercial tax-exempt                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 6,016 1,927   6,016          
Provision/(credit) for loan losses   559   879          
Loans charged off:   0   0          
Recoveries on loans previously charged off:   0   0          
Allowance for loan losses, end of period:   2,486   2,486          
Provision/(credit) for loan losses   559   879          
Commercial tax-exempt | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 (4,409) 0              
Release in allowance for credit losses on adoption of ASU 2016-13 (4,409) 0              
Commercial real estate                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 40,765 36,580 41,813 40,765 41,934        
Provision/(credit) for loan losses   11,095 1,898 21,365 1,588        
Loans charged off:   0 0 0 0        
Recoveries on loans previously charged off:   0 30 0 219        
Allowance for loan losses, end of period:   47,675 43,741 47,675 43,741        
Provision/(credit) for loan losses   11,095 1,898 21,365 1,588        
Commercial real estate | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 (14,455) 0              
Release in allowance for credit losses on adoption of ASU 2016-13 (14,455) 0              
Construction and land                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 5,119 5,709 5,353 5,119 6,022        
Provision/(credit) for loan losses   3,815 (573) 6,563 (1,242)        
Loans charged off:   0 0 0 0        
Recoveries on loans previously charged off:   0 0 0 0        
Allowance for loan losses, end of period:   9,524 4,780 9,524 4,780        
Provision/(credit) for loan losses   3,815 (573) 6,563 (1,242)        
Construction and land | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 (2,158) 0              
Release in allowance for credit losses on adoption of ASU 2016-13 (2,158) 0              
Residential                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 8,857 11,779 10,057 8,857 10,026        
Provision/(credit) for loan losses   5,986 (502) 8,223 (571)        
Loans charged off:   0 0 0 0        
Recoveries on loans previously charged off:   0 0 0 100        
Allowance for loan losses, end of period:   17,765 9,555 17,765 9,555        
Provision/(credit) for loan losses   5,986 (502) 8,223 (571)        
Residential | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 685 0              
Release in allowance for credit losses on adoption of ASU 2016-13 685 0              
Home equity                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 778 303 796 778 1,284        
Provision/(credit) for loan losses   1,293 9 1,221 83        
Loans charged off:   (1,157) 0 (1,157) (562)        
Recoveries on loans previously charged off:   0 0 132 0        
Allowance for loan losses, end of period:   439 805 439 805        
Provision/(credit) for loan losses   1,293 9 1,221 83        
Home equity | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 (535) 0              
Release in allowance for credit losses on adoption of ASU 2016-13 (535) 0              
Consumer and other                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Allowance for loan losses, beginning of period: 399 1,658 108 399 134        
Provision/(credit) for loan losses   25 (19) 239 (58)        
Loans charged off:   0 0 (10) (2)        
Recoveries on loans previously charged off:   3 15 6 30        
Allowance for loan losses, end of period:   1,686 104 1,686 104        
Provision/(credit) for loan losses   25 $ (19) $ 239 $ (58)        
Consumer and other | ASU 2016-13                  
Allowance for Loan and Lease Losses [Roll Forward]                  
Release in allowance for credit losses on adoption of ASU 2016-13 1,052 0              
Release in allowance for credit losses on adoption of ASU 2016-13 $ 1,052 $ 0              
[1] Impact due to the adoption of ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements.”
v3.20.2
Allowance for Loan Losses - Allowance by Impairment Analysis Method (Details) - USD ($)
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) $ 27,191,000   $ 19,187,000      
Individually Evaluated for Impairment Allowance for loan losses 239,000   235,000      
Collectively Evaluated for Impairment Recorded investment (loan balance) 7,305,763,000   6,957,517,000      
Collectively Evaluated for Impairment Allowance for loan losses 89,085,000   71,747,000      
Total Loans Receivable 7,332,954,000   6,976,704,000      
Allowance for loan losses 89,324,000 $ 68,211,000 71,982,000 $ 75,067,000 $ 73,814,000 $ 75,312,000
Commercial and industrial            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 3,693,000          
Individually Evaluated for Impairment Allowance for loan losses 161,000          
Collectively Evaluated for Impairment Recorded investment (loan balance) 562,055,000          
Collectively Evaluated for Impairment Allowance for loan losses 9,398,000          
Total Loans Receivable 565,748,000          
Allowance for loan losses 9,559,000 10,255,000 10,048,000      
Paycheck Protection Program            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 0          
Individually Evaluated for Impairment Allowance for loan losses 0          
Collectively Evaluated for Impairment Recorded investment (loan balance) 370,034,000          
Collectively Evaluated for Impairment Allowance for loan losses 190,000          
Total Loans Receivable 370,034,000          
Allowance for loan losses 190,000 0 0      
Commercial and industrial, including tax exempt            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance)     724,000      
Individually Evaluated for Impairment Allowance for loan losses     146,000      
Collectively Evaluated for Impairment Recorded investment (loan balance)     1,141,237,000      
Collectively Evaluated for Impairment Allowance for loan losses     15,918,000      
Total Loans Receivable     1,141,961,000      
Allowance for loan losses     16,064,000 16,082,000 15,687,000 15,912,000
Commercial tax-exempt            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 0          
Individually Evaluated for Impairment Allowance for loan losses 0          
Collectively Evaluated for Impairment Recorded investment (loan balance) 419,264,000          
Collectively Evaluated for Impairment Allowance for loan losses 2,486,000          
Total Loans Receivable 419,264,000          
Allowance for loan losses 2,486,000 1,927,000 6,016,000      
Commercial real estate            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 6,007,000   733,000      
Individually Evaluated for Impairment Allowance for loan losses 0   0      
Collectively Evaluated for Impairment Recorded investment (loan balance) 2,670,701,000   2,550,541,000      
Collectively Evaluated for Impairment Allowance for loan losses 47,675,000   40,765,000      
Total Loans Receivable 2,676,708,000   2,551,274,000      
Allowance for loan losses 47,675,000 36,580,000 40,765,000 43,741,000 41,813,000 41,934,000
Construction and land            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 0   0      
Individually Evaluated for Impairment Allowance for loan losses 0   0      
Collectively Evaluated for Impairment Recorded investment (loan balance) 240,211,000   225,983,000      
Collectively Evaluated for Impairment Allowance for loan losses 9,524,000   5,119,000      
Total Loans Receivable 240,211,000   225,983,000      
Allowance for loan losses 9,524,000 5,709,000 5,119,000 4,780,000 5,353,000 6,022,000
Residential            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 16,837,000   15,900,000      
Individually Evaluated for Impairment Allowance for loan losses 60,000   67,000      
Collectively Evaluated for Impairment Recorded investment (loan balance) 2,842,790,000   2,823,255,000      
Collectively Evaluated for Impairment Allowance for loan losses 17,705,000   8,790,000      
Total Loans Receivable 2,859,627,000   2,839,155,000      
Allowance for loan losses 17,765,000 11,779,000 8,857,000 9,555,000 10,057,000 10,026,000
Home equity            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 654,000   1,830,000      
Individually Evaluated for Impairment Allowance for loan losses 18,000   22,000      
Collectively Evaluated for Impairment Recorded investment (loan balance) 83,934,000   81,827,000      
Collectively Evaluated for Impairment Allowance for loan losses 421,000   756,000      
Total Loans Receivable 84,588,000   83,657,000      
Allowance for loan losses 439,000 303,000 778,000 805,000 796,000 1,284,000
Consumer and other            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Individually Evaluated for Impairment Recorded investment (loan balance) 0   0      
Individually Evaluated for Impairment Allowance for loan losses 0   0      
Collectively Evaluated for Impairment Recorded investment (loan balance) 116,774,000   134,674,000      
Collectively Evaluated for Impairment Allowance for loan losses 1,686,000   399,000      
Total Loans Receivable 116,774,000   134,674,000      
Allowance for loan losses 1,686,000 $ 1,658,000 399,000 $ 104,000 $ 108,000 $ 134,000
Financial Asset Acquired with Credit Deterioration            
Financing Receivable, Allowance for Credit Loss [Line Items]            
Total Loans Receivable $ 0   $ 0      
v3.20.2
Derivatives and Hedging Activities - Derivatives Fair Value and Balance Sheet Classification (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Other assets    
Derivatives, Fair Value [Line Items]    
Asset derivatives $ 96,989 $ 36,099
Other assets | Derivatives not designated as hedging instruments: | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Asset derivatives 96,968 36,089
Other assets | Derivatives not designated as hedging instruments: | Risk participation agreements    
Derivatives, Fair Value [Line Items]    
Asset derivatives 21 10
Other assets | Derivatives designated as hedging instruments: | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Asset derivatives 0 0
Other liabilities    
Derivatives, Fair Value [Line Items]    
Liability derivatives 98,512 36,822
Other liabilities | Derivatives not designated as hedging instruments: | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Liability derivatives 97,760 36,580
Other liabilities | Derivatives not designated as hedging instruments: | Risk participation agreements    
Derivatives, Fair Value [Line Items]    
Liability derivatives 478 242
Other liabilities | Derivatives designated as hedging instruments: | Interest rate swaps    
Derivatives, Fair Value [Line Items]    
Liability derivatives $ 274 $ 0
v3.20.2
Derivatives and Hedging Activities - Effect of Derivative Instruments on Accumulated Other Comprehensive Income (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of gain or (loss) recognized in OCI on derivatives $ (426) $ (9) $ (426) $ (47)
Amount of gain or (loss) reclassified from accumulated OCI into income (152) 191 (152) 502
Interest rate swaps        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of gain or (loss) recognized in OCI on derivatives (426) (9) (426) (47)
Interest income/(expense) | Interest rate swaps        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of gain or (loss) reclassified from accumulated OCI into income $ (152) $ 191 $ (152) $ 502
v3.20.2
Derivatives and Hedging Activities - Effect of Derivative Instruments on Statement of Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Interest rate swaps | Interest income/(expense)        
Derivative Instruments, Gain (Loss) [Line Items]        
Amount of gain or (loss) recognized in income on cash flow hedging relationships $ (152) $ 191 $ (152) $ 502
v3.20.2
Derivatives and Hedging Activities - Collateral With Counterparties (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Derivative [Line Items]    
Pledged securities value $ 100.9 $ 40.0
Interest rate swap, term of contract 18 months  
Federal home loan bank, advances $ 100.0  
Federal home loan bank, interest rate 0.48%  
Interest rate swaps    
Derivative [Line Items]    
Notional amount $ 100.0  
Not Designated as Hedging Instrument | Interest rate swaps    
Derivative [Line Items]    
Derivative collateral 98.9 35.7
Notional amount $ 1,600.0 $ 1,600.0
v3.20.2
Derivatives and Hedging Activities - Non-Designated Hedges (Details)
Jun. 30, 2020
USD ($)
derivativeContract
Dec. 31, 2019
USD ($)
derivativeContract
Interest rate swaps    
Derivative [Line Items]    
Notional amount $ 100,000,000  
Interest rate swaps | Not Designated as Hedging Instrument    
Derivative [Line Items]    
Notional amount 1,600,000,000 $ 1,600,000,000
Foreign exchange contracts | Not Designated as Hedging Instrument    
Derivative [Line Items]    
Notional amount 0 0
Risk participation agreements | Not Designated as Hedging Instrument    
Derivative [Line Items]    
Notional amount $ 58,100,000 $ 58,800,000
Number of contracts | derivativeContract 7 7
Other Contract | Not Designated as Hedging Instrument    
Derivative [Line Items]    
Notional amount $ 30,400,000 $ 20,500,000
Number of contracts | derivativeContract 5 4
v3.20.2
Derivatives and Hedging Activities - Derivatives not designated as hedges, effect on statement of operations (Details) - Not Designated as Hedging Instrument - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]        
Total $ 230 $ (277) $ (527) $ (364)
Interest rate swaps        
Derivative Instruments, Gain (Loss) [Line Items]        
Total 254 (64) (301) (255)
Risk participation agreements        
Derivative Instruments, Gain (Loss) [Line Items]        
Total $ (24) $ (213) $ (226) $ (109)
v3.20.2
Income Taxes - Components of Income Tax Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income from continuing operations:        
Income/(loss) before income taxes $ (2,457) $ 24,818 $ (1,549) $ 49,277
Income tax expense 841 5,369 943 10,286
Net income/(loss) before attribution to noncontrolling interests $ (3,298) $ 19,449 $ (2,492) $ 38,991
Effective tax rate     (60.90%) 20.90%
v3.20.2
Income Taxes - Narrative (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Income Tax Disclosure [Abstract]        
Effective tax rate     (60.90%) 20.90%
Income tax expense/(benefit) $ 841 $ 5,369 $ 943 $ 10,286
Income tax expense related to employee share-based payments     $ 500  
v3.20.2
Noncontrolling Interests - Narrative (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Noncontrolling Interest [Abstract]          
Net income attributable to noncontrolling interests $ 0 $ 69,000 $ 6,000 $ 169,000  
Redeemable noncontrolling interests 0   0   $ 1,383,000
Noncontrolling interest included in permanent shareholders' equity $ 0   $ 0   $ 0
v3.20.2
Noncontrolling Interests - Redeemable Noncontrolling Interests Rollforward (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]        
Redeemable noncontrolling interests at beginning of period     $ 1,383,000  
Net income attributable to noncontrolling interests $ 0 $ 69,000 6,000 $ 169,000
Redeemable noncontrolling interests at end of period 0   0  
Redeemable noncontrolling interests        
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]        
Redeemable noncontrolling interests at beginning of period 0 662,000 1,383,000 2,526,000
Net income attributable to noncontrolling interests 0 69,000 6,000 169,000
Distributions 0 (69,000) (6,000) (169,000)
Purchases/(sales) of ownership interests 0 0 (64,000) 12,000
Amortization of equity compensation 8,000 9,000 16,000 26,000
Adjustments to fair value (8,000) 1,115,000 (1,335,000) (778,000)
Redeemable noncontrolling interests at end of period $ 0 $ 1,786,000 $ 0 $ 1,786,000
v3.20.2
Accumulated Other Comprehensive Income - Summary of Amounts Reclassified (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Pre-tax gain/(loss) $ (9,881) $ (21,268) $ (25,706) $ (39,754)
Tax (expense)/ benefit (841) (5,369) (943) (10,286)
Net income/(loss) attributable to the Company (3,298) 19,380 (2,498) 38,822
Total reclassifications for the period, net of tax (107) 136 (107) 356
Hedges related to deposits:        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Total reclassifications for the period, net of tax (107) 136 (107) 356
Reclassification out of Accumulated Other Comprehensive Income | Hedges related to deposits:        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Pre-tax gain/(loss) (152) 191 (152) 502
Tax (expense)/ benefit 45 (55) 45 (146)
Net income/(loss) attributable to the Company $ (107) $ 136 $ (107) $ 356
v3.20.2
Accumulated Other Comprehensive Income - Components of AOCI (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance $ 828,792 $ 778,819 $ 819,018 $ 753,954
Other comprehensive income/(loss) before reclassifications 7,866 10,659 22,355 22,200
Reclassified from other comprehensive income/(loss) 107 (136) 107 (356)
Other comprehensive income/(loss), net 7,973 10,523 22,462 21,844
Ending Balance 825,205 798,211 825,205 798,211
Unrealized gain/(loss) on securities available-for-sale        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance 22,924 (5,988) 8,435 (17,556)
Other comprehensive income/(loss) before reclassifications 8,198 10,665 22,687 22,233
Reclassified from other comprehensive income/(loss) 0 0 0 0
Other comprehensive income/(loss), net 8,198 10,665 22,687 22,233
Ending Balance 31,122 4,677 31,122 4,677
Unrealized gain/(loss) on cash flow hedges        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance 0 144 0 391
Other comprehensive income/(loss) before reclassifications (302) (6) (302) (33)
Reclassified from other comprehensive income/(loss) 107 (136) 107 (356)
Other comprehensive income/(loss), net (195) (142) (195) (389)
Ending Balance (195) 2 (195) 2
Unrealized gain/(loss) on other        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance (860) (554) (860) (554)
Other comprehensive income/(loss) before reclassifications (30) 0 (30) 0
Reclassified from other comprehensive income/(loss) 0 0 0 0
Other comprehensive income/(loss), net (30) 0 (30) 0
Ending Balance (890) (554) (890) (554)
Accumulated other comprehensive income/(loss)        
AOCI Attributable to Parent, Net of Tax [Roll Forward]        
Beginning Balance 22,064 (6,398) 7,575 (17,719)
Ending Balance $ 30,037 $ 4,125 $ 30,037 $ 4,125
v3.20.2
Restructuring (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Mar. 31, 2020
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2020
Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]            
Restructuring charges $ 0   $ 0 $ 1,600 $ 0 $ 1,646
Restructuring Reserve [Roll Forward]            
Accrued Charges at beginning of period 881 $ 1,315 4,345 4,685 1,315 4,685
Cost incurred       1,646    
Costs paid (92) (434) (1,364) (1,986)    
Accrued Charges at end of period 789 881 2,981 4,345 789 2,981
Severance Charges            
Restructuring Reserve [Roll Forward]            
Accrued Charges at beginning of period 92 526 3,556 3,896 526 3,896
Cost incurred       1,646    
Costs paid (92) (434) (1,364) (1,986)    
Accrued Charges at end of period 0 92 2,192 3,556 0 2,192
Other Associated Costs            
Restructuring Reserve [Roll Forward]            
Accrued Charges at beginning of period 789 789 789 789 789 789
Cost incurred       0    
Costs paid 0 0 0 0    
Accrued Charges at end of period $ 789 $ 789 $ 789 $ 789 $ 789 $ 789
v3.20.2
Revenue Recognition (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Fees and other income:          
Revenue from contracts with customers $ 19,633 $ 22,005 $ 40,681 $ 44,397  
Non-interest income within the scope of other GAAP topics 3,029 2,375 3,502 5,231  
Total fees and other income 22,662 24,380 44,183 49,628  
Wealth management and trust fees          
Fees and other income:          
Revenue from contracts with customers 17,261 18,912 35,632 37,970  
Investment management fees          
Fees and other income:          
Revenue from contracts with customers 1,770 2,455 3,695 5,105  
Other Income          
Fees and other income:          
Revenue from contracts with customers 602 $ 638 1,354 $ 1,322  
Other liabilities          
Revenues from External Customers and Long-Lived Assets [Line Items]          
Deferred revenue $ 6,000   $ 6,000   $ 6,500
v3.20.2
Lease Accounting - Narrative (Details)
$ in Thousands
 6 Months Ended
Jan. 01, 2019
Jun. 30, 2020
USD ($)
lease
Jun. 30, 2019
Dec. 31, 2019
USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Lease liabilities   $ 108,234   $ 117,214
ROU assets   $ 94,143   102,075
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member us-gaap:AccountingStandardsUpdate201613Member us-gaap:AccountingStandardsUpdate201602Member  
Building        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Number real estate leases for office locations | lease   37    
ASU 2016-02        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Lease liabilities       124,100
ROU assets       $ 108,500
Minimum        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Term of contract   5 years    
Renewal term   5 years    
Maximum        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Term of contract   15 years    
Renewal term   10 years    
v3.20.2
Lease Accounting - Schedule of Lease Cost (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Leases [Abstract]        
Operating lease cost $ 4,493 $ 4,841 $ 9,094 $ 9,526
Short-term lease cost 58 (3) 106 29
Variable lease cost 0 2 (9) 4
Less: Sublease income 0 (28) (28) (46)
Total operating lease cost $ 4,551 $ 4,812 $ 9,163 $ 9,513
v3.20.2
Lease Accounting - Other Information (Details)
$ in Thousands
 6 Months Ended
Jun. 30, 2020
USD ($)
Leases [Abstract]  
Operating cash flows from operating leases $ 10,180
ROU assets obtained in exchange for new operating lease liabilities $ 443
Weighted-average remaining lease term for operating leases 7 years 9 months 18 days
Weighted-average discount rate for operating leases 3.20%
v3.20.2
Lease Accounting - Schedule of Minimum Lease Payments Due (Details) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Lessee, Operating Lease, Liability, Payment, Due [Abstract]    
Remainder of 2020 $ 9,883  
2021 19,727  
2022 19,680  
2023 18,722  
2024 12,692  
Thereafter 43,964  
Total future minimum lease payments 124,668  
Less: Amounts representing interest (16,434)  
Present value of net future minimum lease payments $ 108,234 $ 117,214
v3.20.2
Recent Accounting Pronouncements (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jan. 01, 2019
Jun. 30, 2020
Jun. 30, 2019
Mar. 31, 2020
Dec. 31, 2019
Mar. 31, 2019
Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Lease liabilities   $ 108,234     $ 117,214    
Right-of-use assets   94,143     102,075    
Increase in retained earnings   825,205 $ 798,211 $ 828,792 819,018 $ 778,819 $ 753,954
Allowance for loans losses   89,324 $ 75,067 $ 68,211 71,982 $ 73,814 $ 75,312
Reserve for unfunded loan commitments   $ 7,100          
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member us-gaap:AccountingStandardsUpdate201613Member us-gaap:AccountingStandardsUpdate201602Member        
Cumulative Effect, Period of Adoption, Adjustment              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Increase in retained earnings [1]         13,492    
ASU 2016-02              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Lease liabilities         124,100    
Right-of-use assets         108,500    
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment              
New Accounting Pronouncements or Change in Accounting Principle [Line Items]              
Increase in retained earnings         13,500    
Allowance for loans losses         (20,400)    
Reserve for unfunded loan commitments         $ 1,400    
[1] Impact due to the adoption of ASU 2016-13, Financial Instruments (Topic 326) (“ASU 2016-13”). See Part I. Item 1. “Notes to Unaudited Consolidated Financial Statements - Note 15: Recent Accounting Pronouncements.”