In accordance with ASC 326, the Company is required to measure the allowance for credit losses of financial assets with similar risk characteristics on a collective or pooled basis. In considering the segmentation of financial assets measured at amortized cost into pools, the Company considered various risk characteristics in its analysis. Generally, the segmentation utilized represents the level at which the Company develops and documents its systematic methodology to determine the allowance for credit losses for the financial assets held at amortized cost, specifically the Company's loan portfolio and debt securities classified as held-to-maturity. Below is a summary of the Company's loan portfolio segments and major debt security types:

Commercial loans, including PPP loans: The Company makes commercial loans for many purposes, including working capital lines and leasing arrangements, that are generally renewable annually and supported by business assets, personal guarantees and additional collateral. Underlying collateral includes receivables, inventory, enterprise value and the assets of the business. Commercial business lending is generally considered to involve a slightly higher degree of risk than traditional consumer bank lending. This portfolio includes a range of industries, including manufacturing, restaurants, franchise, professional services, equipment finance and leasing, mortgage warehouse lending and industrial. Individually assessed collateral dependent commercial loans are primarily collateralized by equipment and the enterprise value or assets of the specific business.

The Company also originated loans through the PPP. Administered by the SBA, the PPP provided short-term relief primarily related to the disruption from COVID-19 to companies and non-profits that meet the SBA’s definition of an eligible small business. Under the program, the SBA will forgive all or a portion of the loan if, during a certain period, loans were used for qualifying expenses. If all or a portion of the loan was not forgiven, the borrower is responsible for repayment. PPP loans are fully guaranteed by the SBA, including any portion not forgiven. The SBA guarantee existed at the inception of the loan and throughout its life and is not separated from the loan if the loan is subsequently sold or transferred. As it is not considered a freestanding contract, the Company considers the impact of the SBA guarantee when measuring the allowance for credit losses.

Commercial real estate loans, including construction and development, and non-construction: The Company's commercial real estate loans are generally secured by a first mortgage lien and assignment of rents on the underlying property (utilized in related assessment of individually assessed collateral dependent loans). Since most of the Company's bank branches are located in the Chicago metropolitan area and southern Wisconsin, a significant portion of the Company's commercial real estate loan portfolio is located in this region. As the risks and circumstances of such loans in construction phase vary from that of non-construction commercial real estate loans, the Company assesses the allowance for credit losses separately for these two segments.

Home equity loans: The Company's home equity loans and lines of credit are primarily originated by each of the bank subsidiaries in their local markets where there is a strong understanding of the underlying real estate value. The Company's banks monitor and manage these loans, and conduct an automated review of all home equity lines of credit at least twice per year. The bank’s subsidiaries use this information to manage loans that may be higher risk and to determine whether to obtain additional credit information or updated property valuations. In a limited number of cases, the Company may issue home equity credit together with first mortgage financing, and requests for such financing are evaluated on a combined basis.

five years, construction loans to individuals and bridge financing loans for qualifying customers, as well as certain long-term fixed rate loans. The Company's residential mortgages relate to properties located principally in the Chicago metropolitan area and southern Wisconsin or vacation homes owned by local residents. Due to interest rate risk considerations, the Company generally sells in the secondary market loans originated with long-term fixed rates, however, certain of these loans may be retained within the banks’ own loan portfolios where they are non-agency conforming, or where the terms of the loans make them favorable to retain. The Company believes that since this loan portfolio consists primarily of locally-originated loans, and since the majority of the borrowers are longer-term customers with lower LTV ratios, the Company faces a relatively low risk of borrower default and delinquency. Collateral dependent residential real estate loans that are individually assessed when measuring the allowance for credit losses are primarily collateralized by such one-to-four family properties noted above. It is not the Company's current practice to underwrite, and there are no plans to underwrite subprime, Alt A, no or little documentation loans, or option ARM loans.

Additionally, early buy-out loans guaranteed by U.S. government agencies include loans in which the Company is eligible or has exercised its option under the Government National Mortgage Association (“GNMA”) securitization program to repurchase certain delinquent mortgage loans. Such loans were previously transferred by the Company with servicing of such loans retained. Early buy-out loans are insured or guaranteed by the Federal Housing Administration (“FHA”) or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.

Premium finance receivables: The Company makes loans to businesses to finance the insurance premiums they pay on their property and casualty insurance policies. The loans are indirectly originated by working through independent medium and large insurance agents and brokers located throughout the United States and Canada. The insurance premiums financed are primarily for commercial customers’ purchases of liability, property and casualty and other commercial insurance. This lending involves relatively rapid turnover of the loan portfolio and high volume of loan originations. The Company performs ongoing credit and other reviews of the agents and brokers to mitigate against the risk of fraud.

In accordance with ASC 326, the Company elected to not measure an allowance for credit losses on accrued interest. As such accrued interest is written off in a timely manner when deemed uncollectible. Any such write-off of accrued interest will reverse previously recognized interest income. In addition, the Company elected to not include accrued interest within presentation and disclosures of the carrying amount of financial assets held at amortized cost. This election is applicable to the various disclosures included within the Company's financial statements. Accrued interest related to financial assets held at amortized cost is included within accrued interest receivable and other assets within the Company's Consolidated Statements of


As of September 30, 2022			90+ days and still accruing		60-89 days past due		30-59 days past due
(In thousands)	Nonaccrual								Current		Total Loans
Loan Balances (includes PCD):
Commercial






Commercial, industrial and other, excluding PPP loans	$	44,293	$	237	$	23,209	$	31,640	$	12,116,213	$	12,215,592
Commercial PPP loans	—		—		1,432		3,277		38,949		43,658
Commercial real estate
Construction and development	889		—		—		5,715		1,518,907		1,525,511
Non-construction	9,588		—		6,041		24,256		8,012,788		8,052,673







Home equity	1,320		—		125		848		326,529		328,822

Residential real estate, excluding early buy-out loans	9,787		—		2,149		15		2,074,844		2,086,795


Premium finance receivables
Property and casualty insurance loans	13,026		16,624		15,301		21,128		5,647,261		5,713,340
Life insurance loans	—		1,831		13,628		44,954		7,944,443		8,004,856

Consumer and other	7		31		26		343		47,295		47,702
Total loans, net of unearned income, excluding early buy-out loans	$	78,910	$	18,723	$	61,911	$	132,176	$	37,727,229	$	38,018,949
Early buy-out loans guaranteed by U.S. government agencies (1)	24,020		68,067		489		104		55,984		148,664
Total loans, net of unearned income	$	102,930	$	86,790	$	62,400	$	132,280	$	37,783,213	$	38,167,613


As of December 31, 2021			90+ days and still accruing		60-89 days past due		30-59 days past due
(In thousands)	Nonaccrual								Current		Total Loans
Loan Balances (includes PCD):
Commercial






Commercial, industrial and other, excluding PPP loans	$	20,399	$	—	$	23,492	$	42,933	$	11,258,961	$	11,345,785
Commercial PPP loans	—		15		770		928		556,570		558,283
Commercial real estate
Construction and development	1,377		—		—		2,809		1,352,018		1,356,204
Non-construction	20,369		—		284		37,634		7,575,795		7,634,082







Home equity	2,574		—		—		1,120		331,461		335,155

Residential real estate, excluding early buy-out loans	16,440		—		982		12,145		1,576,704		1,606,271

Premium finance receivables
Property and casualty insurance loans	5,433		7,210		15,490		22,419		4,804,935		4,855,487
Life insurance loans	—		7		12,614		66,651		6,963,538		7,042,810

Consumer and other	477		137		34		509		23,042		24,199
Total loans, net of unearned income, excluding early buy-out loans	$	67,069	$	7,369	$	53,666	$	187,148	$	34,443,024	$	34,758,276
Early buy-out loans guaranteed by U.S. government agencies (1)	—		—		—		275		30,553		30,828
Total loans, net of unearned income	$	67,069	$	7,369	$	53,666	$	187,423	$	34,473,577	$	34,789,104


As of September 30, 2021			90+ days and still accruing		60-89 days past due		30-59 days past due
(In thousands)	Nonaccrual								Current		Total Loans
Loan Balances (includes PCD):
Commercial






Commercial, industrial and other, excluding PPP loans	$	26,468	$	—	$	9,768	$	24,086	$	10,045,662	$	10,105,984
Commercial PPP loans	—		—		—		1,138		1,080,850		1,081,988
Commercial real estate
Construction and development	1,030		—		—		12,631		1,330,054		1,343,715
Non-construction	22,676		—		5,395		67,187		7,446,741		7,541,999







Home equity	3,449		164		340		867		342,842		347,662

Residential real estate, excluding early buy-out loans	22,633		—		1,540		1,076		1,495,501		1,520,750

Premium finance receivables
Property and casualty insurance loans	7,300		5,811		10,642		14,614		4,578,610		4,616,977
Life insurance loans	—		—		5,162		7,040		6,643,251		6,655,453

Consumer and other	384		126		16		125		21,878		22,529
Total loans, net of unearned income, excluding early buy-out loans	$	83,940	$	6,101	$	32,863	$	128,764	$	32,985,389	$	33,237,057
Early buy-out loans guaranteed by U.S. government agencies (1)	—		—		—		—		26,986		26,986
Total loans, net of unearned income	$	83,940	$	6,101	$	32,863	$	128,764	$	33,012,375	$	33,264,043

The Company's ability to manage credit risk depends in large part on its ability to properly identify and manage problem loans. To do so, the Company operates a credit risk rating system under which credit management personnel assign a credit risk rating (1 to 10 rating) to each loan at the time of origination and review loans on a regular basis. For loans measured at amortized cost (or excluding loans measured at fair value, such as early buy-out loans guaranteed by U.S. government agencies), these credit risk ratings are also an important aspect of the Company's allowance for credit losses measurement methodology. The credit risk rating structure and classifications are shown below:

The Company’s Problem Loan Reporting system includes all such loans described above with credit risk ratings of 6 through 9. This system is designed to provide an ongoing detailed tracking mechanism for each problem loan. Once management determines that a loan has deteriorated to a point where it has a credit risk rating of 6 or worse, the Company’s Managed Asset Division performs an overall credit and collateral review. As part of this review, all underlying collateral is identified and the valuation methodology is analyzed and tracked. As a result of this initial review by the Company’s Managed Asset Division, the credit risk rating is reviewed and a portion of the outstanding loan balance may be deemed uncollectible and, as a result, no longer share similar risk characteristics as its related pool. If that is the case, the individual loan is considered collateral dependent and individually assessed for an allowance for credit loss. The Company’s individual assessment utilizes an independent re-appraisal of the collateral (unless such a third-party evaluation is not possible due to the unique nature of the collateral, such as a closely-held business or thinly traded securities). In the case of commercial real estate collateral, an independent third party appraisal is ordered by the Company’s Real Estate Services Group to determine if there has been any change in the underlying collateral value. These independent appraisals are reviewed by the Real Estate Services Group and sometimes by independent third party valuation experts and may be adjusted depending upon market conditions.

Through the credit risk rating process, such loans are reviewed to determine if they are performing in accordance with the original contractual terms. If the borrower has failed to comply with the original contractual terms, further action may be required by the Company, including a downgrade in the credit risk rating, movement to nonaccrual status or a charge-off. If the Company determines that a loan amount or portion thereof is uncollectible, the loan’s credit risk rating is immediately downgraded to an 8 or 9 and the uncollectible amount is charged-off. Any loan that has a partial charge-off continues to be assigned a credit risk rating of an 8 or 9 for the duration of time that a balance remains outstanding. The Company undertakes a thorough and ongoing analysis to determine if additional impairment and/or charge-offs are appropriate and to begin a workout plan for the credit to minimize actual losses. In determining the appropriate charge-off for collateral-dependent loans, the Company considers the results of appraisals for the associated collateral.


	Year of Origination														Revolving		Total
(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving		to Term		Loans
Loan Balances:
Commercial, industrial and other
Pass	$	1,871,088	$	2,485,791	$	1,166,137	$	695,054	$	517,699	$	899,602	$	4,088,668	$	46,525	$	11,770,564
Special mention	17,507		47,497		10,996		40,081		39,599		15,177		99,424		90		270,371
Substandard accrual	1,783		41,724		25,692		12,938		6,837		3,681		37,709		—		130,364
Substandard nonaccrual/doubtful	125		370		4,035		29,497		1,224		5,158		3,813		71		44,293
Total commercial, industrial and other	$	1,890,503	$	2,575,382	$	1,206,860	$	777,570	$	565,359	$	923,618	$	4,229,614	$	46,686	$	12,215,592
Commercial PPP
Pass	$	—	$	30,126	$	7,963	$	—	$	—	$	—	$	—	$	—	$	38,089
Special mention	—		2,484		289		—		—		—		—		—		2,773
Substandard accrual	—		2,324		472		—		—		—		—		—		2,796
Substandard nonaccrual/doubtful	—		—		—		—		—		—		—		—		—
Total commercial PPP	$	—	$	34,934	$	8,724	$	—	$	—	$	—	$	—	$	—	$	43,658
Construction and development
Pass	$	272,843	$	490,456	$	380,020	$	172,107	$	37,778	$	99,876	$	14,783	$	—	$	1,467,863
Special mention	—		—		12,647		3,554		19,460		84		—		—		35,745
Substandard accrual	—		—		8,407		—		—		12,607		—		—		21,014
Substandard nonaccrual/doubtful	—		—		—		—		—		889		—		—		889
Total construction and development	$	272,843	$	490,456	$	401,074	$	175,661	$	57,238	$	113,456	$	14,783	$	—	$	1,525,511
Non-construction
Pass	$	1,340,763	$	1,521,514	$	1,037,513	$	883,456	$	621,687	$	2,243,859	$	153,330	$	5,325	$	7,807,447
Special mention	4,349		3,954		6,408		15,119		41,036		80,760		—		—		151,626
Substandard accrual	—		—		836		14,286		26,236		42,654		—		—		84,012
Substandard nonaccrual/doubtful	—		—		—		—		114		9,474		—		—		9,588
Total non-construction	$	1,345,112	$	1,525,468	$	1,044,757	$	912,861	$	689,073	$	2,376,747	$	153,330	$	5,325	$	8,052,673
Home equity
Pass	$	—	$	—	$	—	$	56	$	—	$	5,122	$	307,969	$	—	$	313,147
Special mention	—		—		—		—		237		100		3,785		—		4,122


Substandard accrual	—		—		—		—		—		8,520		793		920		10,233
Substandard nonaccrual/doubtful	—		—		—		18		—		1,302		—		—		1,320
Total home equity	$	—	$	—	$	—	$	74	$	237	$	15,044	$	312,547	$	920	$	328,822
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies	$	—	$	1,365	$	10,109	$	24,173	$	21,038	$	91,979	$	—	$	—	$	148,664
Pass	654,064		838,127		231,989		123,610		52,724		156,557		—		—		2,057,071
Special mention	1,275		2,454		166		966		1,399		5,068		—		—		11,328
Substandard accrual	679		524		2,903		—		319		4,184		—		—		8,609
Substandard nonaccrual/doubtful	113		362		781		2,210		406		5,915		—		—		9,787
Total residential real estate	$	656,131	$	842,832	$	245,948	$	150,959	$	75,886	$	263,703	$	—	$	—	$	2,235,459
Premium finance receivables - property and casualty
Pass	$	5,416,268	$	172,151	$	9,279	$	2,651	$	53	$	—	$	—	$	—	$	5,600,402
Special mention	92,043		3,822		84		—		—		—		—		—		95,949
Substandard accrual	1,033		2,890		40		—		—		—		—		—		3,963
Substandard nonaccrual/doubtful	9,206		3,814		6		—		—		—		—		—		13,026
Total premium finance receivables - property and casualty	$	5,518,550	$	182,677	$	9,409	$	2,651	$	53	$	—	$	—	$	—	$	5,713,340
Premium finance receivables - life
Pass	$	389,968	$	717,377	$	1,030,974	$	900,998	$	751,341	$	4,214,198	$	—	$	—	$	8,004,856
Special mention	—		—		—		—		—		—		—		—		—
Substandard accrual	—		—		—		—		—		—		—		—		—
Substandard nonaccrual/doubtful	—		—		—		—		—		—		—		—		—
Total premium finance receivables - life	$	389,968	$	717,377	$	1,030,974	$	900,998	$	751,341	$	4,214,198	$	—	$	—	$	8,004,856
Consumer and other
Pass	$	2,179	$	1,822	$	438	$	539	$	390	$	9,029	$	33,084	$	—	$	47,481
Special mention	—		6		—		4		—		115		4		—		129
Substandard accrual	—		4		1		—		—		71		9		—		85
Substandard nonaccrual/doubtful	—		6		—		1		—		—		—		—		7
Total consumer and other	$	2,179	$	1,838	$	439	$	544	$	390	$	9,215	$	33,097	$	—	$	47,702
Total loans
Early buy-out loans guaranteed by U.S. government agencies	$	—	$	1,365	$	10,109	$	24,173	$	21,038	$	91,979	$	—	$	—	$	148,664
Pass	9,947,173		6,257,364		3,864,313		2,778,471		1,981,672		7,628,243		4,597,834		51,850		37,106,920
Special mention	115,174		60,217		30,590		59,724		101,731		101,304		103,213		90		572,043
Substandard accrual	3,495		47,466		38,351		27,224		33,392		71,717		38,511		920		261,076
Substandard nonaccrual/doubtful	9,444		4,552		4,822		31,726		1,744		22,738		3,813		71		78,910
Total loans	$	10,075,286	$	6,370,964	$	3,948,185	$	2,921,318	$	2,139,577	$	7,915,981	$	4,743,371	$	52,931	$	38,167,613

The Company conducts an assessment of its investment securities, including those classified as held-to-maturity, at the time of purchase and on at least an annual basis to ensure such investment securities remain within appropriate levels of risk and continue to perform satisfactorily in fulfilling its obligations. The Company considers, among other factors, the nature of the securities and credit ratings or financial condition of the issuer. If available, the Company obtains a credit rating for issuers from a Nationally Recognized Statistical Rating Organization (“NRSRO”) for consideration. If no such rating is available for an issuer, the Company performs an internal rating based on the scale utilized within the loan portfolio as discussed above. For purposes of the table below, the Company has converted any issuer rating from an NRSRO into the Company’s internal ratings based on Investment Policy and review by the Company’s management.

The Company's allowance for credit losses consists of the allowance for loan losses, the allowance for unfunded commitment losses and the allowance for held-to-maturity debt security losses. In accordance with ASC 326, the Company measures the allowance for credit losses at the time of origination or purchase of a financial asset, representing an estimate of lifetime expected credit losses on the related asset. When developing its estimate, the Company considers available information relevant to assessing the collectability of cash flows, from both internal and external sources. Historical credit loss experience is one input in the estimation process as well as inputs relevant to current conditions and reasonable and supportable forecasts. In considering past events, the Company considers the relevance, or lack thereof, of historical information due to changes in such things as financial asset underwriting or collection practices, and changes in portfolio mix due to changing business plans and strategies. In considering current conditions and forecasts, the Company considers both the current economic environment and the forecasted direction of the economic environment with emphasis on those factors deemed relevant to or driving changes in expected credit losses. As significant judgment is required, the review of the appropriateness of the allowance for credit losses is performed quarterly by various committees with participation by the Company's executive management.

The allowance for credit losses is measured on a collective or pooled basis when similar risk characteristics exist, based upon the segmentation discussed above. The Company utilizes modeling methodologies that estimate lifetime credit loss rates on each pool, including methodologies estimating the probability of default and loss given default on specific segments. Historical credit loss history is adjusted for reasonable and supportable forecasts developed by the Company on a quantitative or qualitative basis and incorporates third party economic forecasts. Reasonable and supportable forecasts consider the macroeconomic factors that are most relevant to evaluating and predicting expected credit losses in the Company's financial assets. Currently, the Company utilizes an eight quarter forecast period using a single macroeconomic scenario provided by a

third party and reviewed within the Company's governance structure. For periods beyond the ability to develop reasonable and supportable forecasts, the Company reverts to historical loss rates at an input level, straight-line over a four quarter reversion period. Expected credit losses are measured over the contractual term of the financial asset with consideration of expected prepayments. Expected extensions, renewals or modifications of the financial asset are only considered when either 1) the expected extension, renewal or modification is contained within the existing agreement and is not unconditionally cancelable, or 2) the expected extension, renewal or modification is reasonably expected to result in a TDR. The methodologies discussed above are applied to both current asset balances on the Company's Consolidated Statements of Condition and off-balance sheet commitments (i.e. unfunded lending-related commitments).

Assets that do not share similar risk characteristics with a pool are assessed for the allowance for credit losses on an individual basis. These typically include assets experiencing financial difficulties, including assets rated as substandard nonaccrual and doubtful as well as assets currently classified or expected to be classified as TDRs. If foreclosure is probable or the asset is considered collateral-dependent, expected credit losses are measured based upon the fair value of the underlying collateral adjusted for selling costs, if appropriate. Underlying collateral across the Company's segments consist primarily of real estate, land and construction assets as well as general business assets of the borrower. As of September 30, 2022, excluding loans carried at fair value, substandard nonaccrual loans totaling $32.0 million in carrying balance had no related allowance for credit losses. For certain accruing current and expected TDRs, expected credit losses are measured based upon the present value of future cash flows of the modified asset terms compared to the amortized cost of the asset. Loans identified as being reasonably expected to be modified into TDRs in the future totaled $8.4 million as of September 30, 2022.


Three months ended September 30, 2022			Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)	Commercial

Allowance for credit losses at beginning of period	$	142,919	$	143,732	$	6,990	$	10,479	$	7,502	$	487	$	312,109

Other adjustments	—		—		—		—		(105)		—		(105)
Charge-offs	(780)		(24)		(43)		(5)		(6,037)		(635)		(7,524)
Recoveries	2,523		55		38		60		1,648		31		4,355
Provision for credit losses	(9,346)		6,955		70		489		7,424		601		6,193


Allowance for credit losses at period end	$	135,316	$	150,718	$	7,055	$	11,023	$	10,432	$	484	$	315,028
By measurement method:
Individually measured	$	8,866	$	378	$	71	$	727	$	—	$	1	$	10,043
Collectively measured	126,450		150,340		6,984		10,296		10,432		483		304,985

Loans at period end
Individually measured	$	46,547	$	27,882	$	11,421	$	19,440	$	—	$	75	$	105,365
Collectively measured	12,212,703		9,550,302		317,401		2,059,126		13,718,196		47,627		37,905,355

Loans held at fair value	—		—		—		156,893		—		—		156,893


Three months ended September 30, 2021	Commercial		Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)

Allowance for credit losses at beginning of period	$	98,507	$	158,522	$	11,207	$	15,684	$	19,899	$	212	$	304,031

Other adjustments	—		—		—		—		(65)		—		(65)

Charge-offs	(1,352)		(406)		(59)		(10)		(1,390)		(112)		(3,329)
Recoveries	816		373		313		5		1,728		92		3,327
Provision for credit losses	11,811		(18,454)		(522)		593		(1,597)		260		(7,909)
Allowance for credit losses at period end	$	109,782	$	140,035	$	10,939	$	16,272	$	18,575	$	452	$	296,055
By measurement method:
Individually measured	$	8,222	$	1,308	$	221	$	940	$	—	$	68	$	10,759
Collectively measured	101,560		138,727		10,718		15,332		18,575		384		285,296

Loans at period end
Individually measured	$	31,001	$	32,091	$	16,486	$	28,966	$	—	$	467	$	109,011
Collectively measured	11,156,971		8,853,623		331,176		1,487,791		11,272,430		22,062		33,124,053

Loans held at fair value	—		—		—		30,979		—		—		30,979


Nine months ended September 30, 2022			Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)	Commercial

Allowance for credit losses at beginning of period	$	119,307	$	144,583	$	10,699	$	8,782	$	15,859	$	423	$	299,653

Other adjustments	—		—		—		—		(139)		—		(139)
Charge-offs	(11,122)		(841)		(432)		(471)		(10,618)		(1,081)		(24,565)
Recoveries	4,057		640		254		71		4,243		103		9,368
Provision for credit losses	23,074		6,336		(3,466)		2,641		1,087		1,039		30,711


Allowance for credit losses at period end	$	135,316	$	150,718	$	7,055	$	11,023	$	10,432	$	484	$	315,028


Nine months ended September 30, 2021			Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)	Commercial

Allowance for credit losses at beginning of period	$	94,212	$	243,603	$	11,437	$	12,459	$	17,777	$	422	$	379,910

Other adjustments	—		—		—		—		(2)		—		(2)
Charge-offs	(16,370)		(2,798)		(201)		(15)		(6,706)		(330)		(26,420)
Recoveries	2,170		1,087		742		245		6,749		158		11,151
Provision for credit losses	29,770		(101,857)		(1,039)		3,583		757		202		(68,584)
Allowance for credit losses at period end	$	109,782	$	140,035	$	10,939	$	16,272	$	18,575	$	452	$	296,055

For the three and nine months ended September 30, 2022, the Company recognized approximately $6.2 million and $30.7 million of provision for credit losses, respectively, related to loans and lending agreements. The provision for each period was primarily the result of loan growth as well as the Company's macroeconomic forecasts of key model inputs (most notably, Baa corporate credit spreads). Uncertainties remain regarding expected economic performance and macroeconomic forecasts utilized in the measurement of the allowance for credit losses as of September 30, 2022. Other key drivers of provision for credit losses in these portfolios include, but are not limited to, stable loan risk rating migration. Net charge-offs in the three and nine month periods ending September 30, 2022, totaled $3.2 million and $15.2 million, respectively.

The allowance for credit losses on the Company’s held-to-maturity debt securities is presented as a reduction to the amortized cost basis of held-to-maturity securities on the Company's Consolidated Statements of Condition. For the three and nine month periods ended September 30, 2022, the Company recognized approximately $227,000 and $232,000 of provision for credit losses related to held-to-maturity securities, respectively. At September 30, 2022, the Company did not identify any losses within its portfolio that it would deem a credit loss and require additional measurement of an allowance for credit losses.

The Company’s approach to restructuring loans is built on its credit risk rating system, which requires credit management personnel to assign a credit risk rating to each loan. In each case, the loan officer is responsible for recommending a credit risk rating for each loan and ensuring the credit risk ratings are appropriate. These credit risk ratings are then reviewed and approved by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors, including a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s credit risk rating scale is one through ten with higher scores indicating higher risk. In the case of loans rated six or worse following modification, the Company’s Managed Assets Division evaluates the loan and the credit risk rating and determines that the loan has been restructured to be reasonably assured of repayment and of performance according to the modified terms and is supported by a current, well-documented credit assessment of the borrower’s financial condition and prospects for repayment under the revised terms.

A modification of a loan with an existing credit risk rating of 6 or worse or a modification of any other credit, which will result in a restructured credit risk rating of 6 or worse must be reviewed for possible TDR classification. In that event, the Company’s Managed Assets Division conducts an overall credit and collateral review. A modification of a loan is considered to be a TDR if both (1) the borrower is experiencing financial difficulty and (2) for economic or legal reasons, the bank grants a concession to a borrower that it would not otherwise consider. The modification of a loan where the credit risk rating is 5 or better after such modification is not considered to be a TDR. Based on the Company’s credit risk rating system, it considers that borrowers whose credit risk rating is 5 or better are not experiencing financial difficulties and therefore, are not considered TDRs.

All credits determined to be a TDR will continue to be classified as a TDR in all subsequent periods, unless the borrower has been in compliance with the loan’s modified terms for a period of six months (including over a calendar year-end) and the current interest rate represents a market rate at the time of restructuring. The Managed Assets Division, in consultation with the respective loan officer, determines whether the modified interest rate represented a current market rate at the time of restructuring. Using knowledge of current market conditions and rates, competitive pricing on recent loan originations, and an assessment of various characteristics of the modified loan (including collateral position and payment history), an appropriate market rate for a new borrower with similar risk is determined. If the modified interest rate meets or exceeds this market rate for a new borrower with similar risk, the modified interest rate represents a market rate at the time of restructuring. Additionally, before removing a loan from TDR classification, a review of the current or previously measured impairment on the loan and any concerns related to future performance by the borrower is conducted. If concerns exist about the future ability of the borrower to meet its obligations under the loans based on a credit review by the Managed Assets Division, the TDR classification is not removed from the loan.

TDRs are individually assessed at the time of the modification and on a quarterly basis to measure an allowance for credit loss. The carrying amount of the loan is compared to the expected payments to be received, discounted at the loan's original rate, or for collateral dependent loans, to the fair value of the collateral. Any shortfall is recorded as a reserve. Each TDR was individually assessed at September 30, 2022 and approximately $2.1 million of reserve was present and appropriately reserved for through the Company’s normal reserving methodology.

TDRs may arise when, due to financial difficulties experienced by the borrower, the Company obtains through physical possession one or more collateral assets in satisfaction of all or part of an existing credit. Once possession is obtained, the Company reclassifies the appropriate portion of the remaining balance of the credit from loans to other real estate owned (“OREO”), which is included within other assets in the Consolidated Statements of Condition. For any residential real estate property collateralizing a consumer mortgage loan, the Company is considered to possess the related collateral only if legal title is obtained upon completion of foreclosure, or the borrower conveys all interest in the residential real estate property to the Company through completion of a deed in lieu of foreclosure or similar legal agreement. At September 30, 2022, the Company had $1.6 million of foreclosed residential real estate properties included within OREO. Further, the recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $73.1 million and $14.3 million at September 30, 2022 and 2021, respectively.


Three months ended September 30, 2022 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to Interest-only Payments (2)			Forgiveness of Debt (2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial, industrial and other	—	$	—	—	$	—	—	$	—	—	$	—	—	$	—


Commercial real estate
Non-construction	—	—		—	—		—	—		—	—		—	—




Residential real estate and other	7	708		7	708		3	435		—	—		—	—
Total loans	7	$	708	7	$	708	3	$	435	—	$	—	—	$	—


Three months ended September 30, 2021 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to Interest-only Payments (2)			Forgiveness of Debt (2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial, industrial and other	1	$	1	1	$	1	—	$	—	—	$	—	—	$	—


Commercial real estate




Non-construction	—	—		—	—		—	—		—	—		—	—
Residential real estate and other	8	558		7	441		2	202		—	—		—	—
Total loans	9	$	559	8	$	442	2	$	202	—	$	—	—	$	—

During the three months ended September 30, 2022, seven loans totaling $708,000 were determined to be TDRs, compared to nine loans totaling $559,000 during the three months ended September 30, 2021. Of these loans extended at below market terms, the weighted average extension had a term of approximately 42 months during the quarter ended September 30, 2022 compared to 105 months for the quarter ended September 30, 2021. Further, the weighted average decrease in the stated interest rate for loans with a reduction of interest rate during the period was approximately 105 basis points and 129 basis points during the three months ended September 30, 2022 and 2021, respectively. Additionally, no principal balances were forgiven during the quarters ended September 30, 2022 and 2021.


Nine months ended September 30, 2022 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to Interest-only Payments (2)			Forgiveness of Debt(2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial, industrial and other	5	$	468	4	$	305	1	$	85	2	$	247	—	$	—

Commercial real estate




Non-construction	2	1,907		1	1,178		1	1,178		2	1,907		—	—
Residential real estate and other	29	3,851		29	3,851		20	3,002		—	—		—	—
Total loans	36	$	6,226	34	$	5,334	22	$	4,265	4	$	2,154	—	$	—


Nine months ended September 30, 2021 (Dollars in thousands)	Total (1)(2)			Extension at Below Market Terms (2)			Reduction of Interest Rate (2)			Modification to Interest-only Payments (2)			Forgiveness of Debt(2)
	Count	Balance		Count	Balance		Count	Balance		Count	Balance		Count	Balance
Commercial
Commercial, industrial and other	6	$	547	6	$	547	—	$	—	—	$	—	—	$	—


Commercial real estate




Non-construction	5	2,944		4	2,401		2	656		1	113		—	—
Residential real estate and other	34	3,393		33	3,276		13	2,108		—	—		—	—
Total loans	45	$	6,884	43	$	6,224	15	$	2,764	1	$	113	—	$	—

During the nine months ended September 30, 2022, 36 loans totaling $6.2 million were determined to be TDRs, compared to 45 loans totaling $6.9 million during the nine months ended September 30, 2021. Of these loans extended at below market terms, the weighted average extension had a term of approximately 64 months during the nine months ended September 30, 2022 compared to 108 months for the nine months ended September 30, 2021. Further, the weighted average decrease in the stated interest rate for loans with a reduction of interest rate during the period was approximately 88 basis points and 151 basis points for the year-to-date periods ended September 30, 2022 and 2021, respectively. Interest-only payment terms were approximately four months and six months during the nine months ended September 30, 2022 and 2021, respectively. Additionally, no balances were forgiven in the first nine months ended September 30, 2022 and 2021.