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Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2023
Credit Loss [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
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 asset 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: 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.

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. This review collects FICO and Bankruptcy scores for each home equity borrower and identifies situations where the credit strength of the borrower is declining. When other specific events occur that may influence repayment, information such as tax liens or judgments is collected. The bank 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.

Residential real estate loans, including early buy-out loans guaranteed by U.S. government agencies: The Company’s residential real estate portfolio includes one- to four-family adjustable rate mortgages, 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, for which we receive fee income. The Company also selectively retains certain of these loans within the banks’ own loan portfolios where they are non-agency conforming, or where the terms of the loans make them favorable to retain. 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 may face 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 finance insurance premiums related to 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, and performs various internal audit steps to mitigate against the risk of fraud.
The Company also originates life insurance premium finance receivables. These loans are originated directly with the borrowers with assistance from life insurance carriers, independent insurance agents, financial advisors and legal counsel. The life insurance policy is the primary form of collateral. In addition, these loans often are secured with a letter of credit, marketable securities or certificates of deposit. In some cases, the Company may make a loan that has a partially unsecured position.

Consumer and other loans: Included in the consumer and other loan category is a wide variety of personal and consumer loans to individuals. The Company originates consumer loans in order to provide a wider range of financial services to its customers. Consumer loans generally have shorter terms and higher interest rates than mortgage loans but generally involve more credit risk than mortgage loans due to the type and nature of the collateral.

U.S. government agency securities: This security type includes debt obligations of certain government-sponsored entities of the U.S. government such as the Federal Home Loan Bank, Federal Agricultural Mortgage Corporation, Federal Farm Credit Banks Funding Corporation and Fannie Mae. Such securities often contain an explicit or implicit guarantee of the U.S. government.

Municipal securities: The Company’s municipal securities portfolio includes bond issues for various municipal government entities located throughout the United States, including the Chicago metropolitan area and southern Wisconsin, some of which are privately placed and non-rated. Though the risk of loss is typically low, default history exists on municipal securities within the United States.

Mortgage-backed securities: This security type includes debt obligations supported by pools of individual mortgage loans and issued by certain government-sponsored entities of the U.S. government such as Freddie Mac and Fannie Mae. Such securities are considered to contain an implicit guarantee of the U.S. government.

Corporate notes: The Company’s corporate notes portfolio includes bond issues for various public companies representing a diversified population of industries. The risk of loss in this portfolio is considered low based on the characteristics of the investments.

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 Condition and totaled $304.5 million at December 31, 2023 and $214.0 million at December 31, 2022.
The tables below show the aging of the Company’s loan portfolio by the segmentation noted above at December 31, 2023 and 2022.
 
As of December 31, 2023
(In thousands)
Nonaccrual90+ days
and still
accruing		60-89
days past
due		30-59
days past
due		CurrentTotal Loans
Loan Balances (includes PCD):
Commercial$38,940 $98 $19,488 $85,743 $12,687,784 $12,832,053 
Commercial real estate:
Construction and development2,205 — 251 1,343 2,080,242 2,084,041 
Non-construction33,254 — 8,264 19,291 9,199,314 9,260,123 
Home equity1,341 — 62 2,263 340,310 343,976 
Residential real estate loans, excluding early buy-out loans15,391 — 2,325 22,942 2,578,425 2,619,083 
Premium finance receivables
Property & casualty insurance loans27,590 20,135 23,236 50,437 6,782,131 6,903,529 
Life insurance loans— — 16,206 45,464 7,816,273 7,877,943 
Consumer and other22 54 25 165 60,234 60,500 
Total loans, net of unearned income, excluding early buy-out loans$118,743 $20,287 $69,857 $227,648 $41,544,713 $41,981,248 
Early buy-out loans guaranteed by U.S. government agencies (1)
— 57,688 250 328 92,317 150,583 
Total loans, net of unearned income$118,743 $77,975 $70,107 $227,976 $41,637,030 $42,131,831 
As of December 31, 2022
(In thousands)
Nonaccrual90+ days
and still
accruing		60-89
days past
due		30-59
days past
due		CurrentTotal Loans
Loan Balances (includes PCD):
Commercial$35,579 $462 $21,128 $56,696 $12,435,299 $12,549,164 
Commercial real estate
Construction and development416 — 361 14,390 1,471,763 1,486,930 
Non-construction5,971 — 1,883 16,285 8,439,878 8,464,017 
Home equity1,487 — — 2,152 329,059 332,698 
Residential real estate loans, excluding early buy-out loans10,171 — 4,364 9,982 2,183,078 2,207,595 
Premium finance receivables
Property & casualty insurance loans13,470 15,841 14,926 40,557 5,764,665 5,849,459 
Life insurance loans— 17,245 5,260 68,725 7,999,768 8,090,998 
Consumer and other6 49 18 224 50,539 50,836 
Total loans, net of unearned income, excluding early buy-out loans$67,100 $33,597 $47,940 $209,011 $38,674,049 $39,031,697 
Early buy-out loans guaranteed by U.S. government agencies (1)
31,279 47,450 984 1,584 83,491 164,788 
Total loans, net of unearned income$98,379 $81,047 $48,924 $210,595 $38,757,540 $39,196,485 
(1)Early buy-out loans are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.
Credit Quality Indicators

Credit quality indicators, specifically the Company’s internal risk rating systems, reflect how the Company monitors credit losses and represents factors used by the Company when measuring the allowance for credit losses. The following discusses the Company’s credit quality indicators by financial asset.
Loan portfolios

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, with higher scores indicating higher risk) to each loan at the time of origination and review loans on a regular basis. For loans measured at amortized cost, 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:

Pass (risk rating 1 to 5): Based on various factors (liquidity, leverage, etc.), the Company believes asset quality is acceptable and is deemed to not require additional monitoring by the Company.

Special mention (risk rating 6): Assets in this category are currently protected, potentially weak, but not to the point of substandard classification. Loss potential is moderate if corrective action is not taken.

Substandard accrual (risk rating 7): Assets in this category have well defined weaknesses that jeopardize the liquidation of the debt. Loss potential is distinct but with no discernible impairment.

Substandard nonaccrual/doubtful (risk rating 8 and 9): Assets have all the weaknesses in those classified “substandard accrual” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, improbable.

Loss/fully charged-off (risk rating 10): Assets in this category are considered fully uncollectible. As such, these assets have no carrying balance on the Company's Consolidated Statements of Condition.

Early buy-out loans guaranteed by U.S. government agencies: These loans are measured at fair value and thus excluded from the measurement of the allowance for credit losses. Credit risk rating assigned to such loans are considered in the measurement of fair value as well as related guarantees provided by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.

Generally, each loan officer is responsible for monitoring his or her loan portfolio, recommending a credit risk rating for each loan in his or her portfolio and ensuring the credit risk ratings are appropriate. These credit risk ratings are then ratified 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 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 on-going 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 non-accrual 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.
The table below shows the Company’s loan portfolio by credit quality indicator and year of origination at December 31, 2023:

As of December 31, 2023
Year of OriginationRevolvingTotal
(In thousands)20232022202120202019PriorRevolvingto TermLoans
Loan Balances:
Commercial, industrial and other
Pass$2,759,782 $2,130,216 $1,533,575 $649,008 $352,589 $933,178 $3,849,975 $7,517 $12,215,840 
Special mention31,825 66,245 85,651 17,690 15,412 7,022 101,925 1,420 327,190 
Substandard accrual30,484 41,655 23,049 4,469 8,005 38,125 103,405 891 250,083 
Substandard nonaccrual/doubtful13,297 7,598 5,621 2,800 1,510 6,866 1,200 48 38,940 
Total commercial, industrial and other$2,835,388 $2,245,714 $1,647,896 $673,967 $377,516 $985,191 $4,056,505 $9,876 $12,832,053 
Construction and development
Pass$335,521 $851,469 $443,239 $163,025 $85,644 $83,050 $22,219 $361 $1,984,528 
Special mention— — 18,641 — — 180 — — 18,821 
Substandard accrual251 2,504 — 2,375 49,183 24,174 — — 78,487 
Substandard nonaccrual/doubtful— — — — — 2,205 — — 2,205 
Total construction and development$335,772 $853,973 $461,880 $165,400 $134,827 $109,609 $22,219 $361 $2,084,041 
Non-construction
Pass$1,501,555 $1,828,359 $1,363,081 $954,632 $745,089 $2,373,611 $188,998 $2,202 $8,957,527 
Special mention9,343 20,721 41,766 19,585 22,496 41,796 — 1,435 157,142 
Substandard accrual1,189 1,462 3,005 20,696 26,954 58,894 — — 112,200 
Substandard nonaccrual/doubtful952 504 383 785 387 30,243 — — 33,254 
Total non-construction$1,513,039 $1,851,046 $1,408,235 $995,698 $794,926 $2,504,544 $188,998 $3,637 $9,260,123 
Home equity
Pass$— $57 $— $45 $92 $6,416 $320,941 $2,172 $329,723 
Special mention— 225 63 — 67 1,667 2,914 — 4,936 
Substandard accrual— 105 — — — 5,909 1,048 914 7,976 
Substandard nonaccrual/doubtful— 181 77 110 16 774 93 90 1,341 
Total home equity$— $568 $140 $155 $175 $14,766 $324,996 $3,176 $343,976 
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies$1,470 $2,806 $4,516 $8,034 $14,980 $118,777 $— $— $150,583 
Pass470,659 836,948 777,456 214,640 109,466 169,888 — — 2,579,057 
Special mention1,470 3,541 1,036 1,323 736 4,572 — — 12,678 
Substandard accrual924 3,706 1,261 1,040 472 4,554 — — 11,957 
Substandard nonaccrual/doubtful100 2,280 4,517 805 1,507 6,182 — — 15,391 
Total residential real estate$474,623 $849,281 $788,786 $225,842 $127,161 $303,973 $— $— $2,769,666 
Premium finance receivables - property & casualty
Pass$6,758,490 $— $15,119 $1,873 $1 $— $— $— $6,775,483 
Special mention96,875 314 102 — — — — — 97,291 
Substandard accrual2,540 621 3 1 — — — — 3,165 
Substandard nonaccrual/doubtful23,047 4,487 54 2 — — — — 27,590 
Total premium finance receivables - property & casualty$6,880,952 $5,422 $15,278 $1,876 $1 $— $— $— $6,903,529 
Premium finance receivables - life
Pass$403,756 $673,757 $878,027 $1,067,781 $910,951 $3,943,671 $— $— $7,877,943 
Special mention— — — — — — — — — 
Substandard accrual— — — — — — — — — 
Substandard nonaccrual/doubtful— — — — — — — — — 
Total premium finance receivables - life$403,756 $673,757 $878,027 $1,067,781 $910,951 $3,943,671 $— $— $7,877,943 
Consumer and other
Pass$3,531 $1,362 $853 $93 $340 $11,630 $42,515 $— $60,324 
Special mention8 10 — — — 79 3 — 100 
Substandard accrual2 8 — — — 32 12 — 54 
Substandard nonaccrual/doubtful9 9 4 — — — — — 22 
Total consumer and other$3,550 $1,389 $857 $93 $340 $11,741 $42,530 $— $60,500 
Total loans
Early buy-out loans guaranteed by U.S. government agencies$1,470 $2,806 $4,516 $8,034 $14,980 $118,777 $— $— $150,583 
Pass12,233,294 6,322,168 5,011,350 3,051,097 2,204,172 7,521,444 4,424,648 12,252 40,780,425 
Special mention139,521 91,056 147,259 38,598 38,711 55,316 104,842 2,855 618,158 
Substandard accrual35,390 50,061 27,318 28,581 84,614 131,688 104,465 1,805 463,922 
Substandard nonaccrual/doubtful37,405 15,059 10,656 4,502 3,420 46,270 1,293 138 118,743 
Total loans$12,447,080 $6,481,150 $5,201,099 $3,130,812 $2,345,897 $7,873,495 $4,635,248 $17,050 $42,131,831 
Gross write offs
Three months ended December 31, 2023$7,318 $1,853 $1,566 $5,825 $762 $144 $— $— $17,468 
Twelve months ended December 31, 202319,044 10,204 4,340 11,356 6,444 2,424 — — 53,812 

Held-to-maturity debt securities

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.

As of December 31, 2023
Year of OriginationTotal
(In thousands)20232022202120202019PriorBalance
Amortized Cost Balances:
U.S. government agencies
1-4 internal grade$— $156,875 $147,810 $25,000 $4,000 $2,783 $336,468 
5-7 internal grade— — — — — — — 
8-10 internal grade— — — — — — — 
Total U.S. government agencies$— $156,875 $147,810 $25,000 $4,000 $2,783 $336,468 
Municipal
1-4 internal grade$4,176 $1,038 $6,909 $259 $611 $159,940 $172,933 
5-7 internal grade— — — — — — — 
8-10 internal grade— — — — — — — 
Total municipal$4,176 $1,038 $6,909 $259 $611 $159,940 $172,933 
Mortgage-backed securities
1-4 internal grade$382,825 $574,935 $2,332,558 $— $— $— $3,290,318 
5-7 internal grade— — — — — — — 
8-10 internal grade— — — — — — — 
Total mortgage-backed securities$382,825 $574,935 $2,332,558 $— $— $— $3,290,318 
Corporate notes
1-4 internal grade$— $14,966 $— $6,007 $7,226 $29,345 $57,544 
5-7 internal grade— — — — — — — 
8-10 internal grade— — — — — — — 
Total corporate notes$— $14,966 $— $6,007 $7,226 $29,345 $57,544 
Total held-to-maturity securities$3,857,263 
Less: Allowance for credit losses(347)
Held-to-maturity securities, net of allowance for credit losses$3,856,916 
Measurement of Allowance for Credit Losses

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.
December 31,December 31,
(In thousands)20232022
Allowance for loan losses$344,235 $270,173 
Allowance for unfunded lending-related commitments losses83,030 87,275 
Allowance for loan losses and unfunded lending-related commitments losses427,265 357,448 
Allowance for held-to-maturity securities losses347 488 
Allowance for credit losses$427,612 $357,936 

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 considered when the expected extension, renewal or modification is contained within the existing agreement and is not unconditionally cancelable. 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. 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 December 31, 2023, excluding loans carried at fair value, substandard nonaccrual loans totaling $38.1 million in carrying balance had no related allowance for credit losses.

The Company does not measure an allowance for credit losses on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when assets are placed on nonaccrual status.
A summary of the activity in the allowance for credit losses by loan portfolio (i.e. allowance for loan losses and allowance for unfunded commitment losses) for the years ended December 31, 2023 and 2022 is as follows:

 
Year Ended 
December 31, 2023
(In thousands)
CommercialCommercial
Real Estate		Home
Equity		Residential
Real Estate		Premium
Finance
Receivable		Consumer
and Other		Total
Loans
Allowance for credit losses at beginning of period$142,769 $184,352 $7,573 $11,585 $10,671 $498 357,448 
Cumulative effect adjustment from the adoption of ASU 2022-02111 1,356 (33)(692)— (1)741 
Other adjustments— — — — 47 — 47 
Charge-offs(15,713)(15,228)(227)(192)(21,857)(595)(53,812)
Recoveries2,651 460 139 21 4,946 93 8,310 
Provision for credit losses39,786 52,913 (336)2,411 19,262 495 114,531 
Allowance for credit losses at period end$169,604 $223,853 $7,116 $13,133 $13,069 $490 $427,265 
By measurement method:
Individually evaluated for impairment$17,589 $3,150 $— $135 $— $11 $20,885 
Collectively evaluated for impairment152,015 220,703 7,116 12,998 13,069 479 406,380 
Loans at period end:
Individually evaluated for impairment$38,940 $35,459 $1,341 $15,391 $— $22 $91,153 
Collectively evaluated for impairment12,793,113 11,308,705 342,635 2,599,014 14,781,472 60,478 41,885,417 
Loans held at fair value— — — 155,261 — — 155,261 

Year Ended 
December 31, 2022
(In thousands)
CommercialCommercial
Real Estate		Home
Equity		Residential
Real Estate		Premium
Finance
Receivable		Consumer
and Other		Total
Loans
Allowance for credit losses at beginning of period$119,307 $144,583 $10,699 $8,782 $15,859 $423 $299,653 
Other adjustments — — — — (108)— (108)
Charge-offs(14,141)(1,379)(432)(471)(14,275)(1,081)(31,779)
Recoveries4,748 701 319 77 5,522 136 11,503 
Provision for credit losses32,855 40,447 (3,013)3,197 3,673 1,020 78,179 
Allowance for loan losses at period end$142,769 $184,352 $7,573 $11,585 $10,671 $498 357,448 
By measurement method:
Individually evaluated for impairment$5,973 $61 $50 $715 $— $— $6,799 
Collectively evaluated for impairment136,796 184,291 7,523 10,870 10,671 498 350,649 
Loans at period end:
Individually evaluated for impairment$38,042 $21,435 $10,351 $20,300 $— $69 $90,197 
Collectively evaluated for impairment12,511,122 9,929,512 322,347 2,172,151 13,940,457 50,767 38,926,356 
Loan held at fair value— — — 179,932 — — 179,932 

For the year ending December 31, 2023, the Company recognized an approximately $114.5 million provision for credit losses related to loans and lending agreements, including an approximately $52.9 million provision for credit losses related to the commercial real estate portfolio. The increased provision was primarily the result of changes in the macroeconomic forecast, specifically the Company’s macroeconomic forecasts of key model inputs (most notably, Commercial Real Estate Price Index primarily impacting the commercial real estate portfolio and Baa corporate credit spreads) as well as growth experienced by the Company in 2023 in various loan portfolios. While uncertainties remain regarding expected economic performance, macroeconomic forecasts as of December 31, 2023 assume that the impact of those uncertainties is more severe compared to that assumed at December 31, 2022. Other key drivers of provision for credit losses in these portfolios include, but are not limited to, loan risk rating migration and net charge-offs in 2023 totaled $45.5 million.
Held-to-maturity debt securities

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 years ended December 31, 2023 and December 31, 2022, the Company recognized approximately a negative $141,000 and $410,000, respectively, of provision for credit losses related to held-to-maturity securities. At December 31, 2023 and December 31, 2022, the Company did not identify any held-to-maturity debt securities within its portfolio that would require a charge-off.
Loan Modifications to Borrowers Experiencing Financial Difficulties

The Company’s approach to restructuring or modifying 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. 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.

Restructurings 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 December 31, 2023, the Company had $720,000 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 $53.3 million and $59.5 million at December 31, 2023 and 2022, respectively.

The table below presents a summary of the balance immediately following the modification of loans to borrowers experiencing financial difficulties during the year ended December 31, 2023:
Year Ended December 31, 2023 (Dollars in thousands)
Total (1)
Percentage of Total Class of Loan
Extension of Term (1)
Reduction of 
Interest
Rate (1)
Delay in Contractual Payments (1)
Extension of Term and Reduction of Interest Rate (1)
Commercial
Commercial, industrial and other$41,223 0.3 %$3,367 $314 $37,069 $473 
Commercial real estate
Construction2,504 0.1 — — — 2,504 
Non-construction6,980 0.1 467 827 1,310 4,376 
Home equity702 0.2 203 — — 499 
Residential real estate2,113 0.1 1,537 271 — 305 
Premium finance receivables
Property and casualty insurance loans129 0.0 62 59 — 8 
Total loans$53,651 0.1 %$5,636 $1,471 $38,379 $8,165 
Weighted average magnitude of modifications:
Duration of extension of term28 months
Reduction of interest rate198  bps
Duration of delayed contractual payment terms16 months
(1)Balances represent the recorded investment in the loan at the time of the restructuring.
The following table presents a summary of all loans for borrowers experiencing financial difficulties modified during the year ended December 31, 2023, and such loans that were in payment default under the restructured terms during the year ended December 31, 2023:
(Dollars in thousands)As of December 31, 2023
Year Ended December 31, 2023
Total (2)
Payments in Default  (1)(2)
Commercial
Commercial, industrial and other$41,223 $19,361 
Commercial real estate
Construction2,504 2,504 
Non-construction6,980 4,851 
Home equity702 203 
Residential real estate2,113 767 
Premium finance receivables
Property and casualty insurance loans129 129 
Total loans$53,651 $27,815 
(1)Modified loans considered to be in payment default are over 30 days past due subsequent to the restructuring.
(2)Balances represent the recorded investment in the loan at the time of the restructuring.
TDRs

Reporting periods prior to the adoption of ASU 2022-02 as of January 1, 2023 present information on loan modifications representing TDRs under the prior accounting standards and related disclosure requirements.

At December 31, 2022, the Company had $41.1 million in loans modified in TDRs. The $41.1 million in TDRs represented 191 credits in which economic concessions were granted to certain borrowers to better align the terms of their loans with their current ability to pay.
The tables below present a summary of the post-modification balance of loans restructured during the years ended December 31, 2022 and 2021 which represent TDRs:

Year ended 
December 31, 2022
Total (1)(2)
Extension at
Below Market
Terms (2)
Reduction of
Interest Rate (2)
Modification to
Interest-only
Payments (2)
Forgiveness of Debt (2)
(In thousands)
CountBalanceCountBalanceCountBalanceCountBalanceCountBalance
Commercial
Commercial, industrial and other5 $468 4 $305 1 $85 2 $248 — $— 
Commercial real estate
Non-construction3 8,833 1 1,178 1 1,178 3 8,833 — — 
Residential real estate and other32 4,076 31 4,075 20 3,002 — — — — 
Total loans40 $13,377 36 $5,558 22 $4,265 5 $9,081 — $— 
Year ended
December 31, 2021
Total (1)(2)
Extension at
Below Market
Terms (2)
Reduction of
Interest Rate (2)
Modification to
Interest-only
Payments (2)
Forgiveness of Debt (2)
(In thousands)
CountBalanceCountBalanceCountBalanceCountBalanceCountBalance
Commercial
Commercial, industrial and other16 $5,074 7 $847 1 $300 — $— — $— 
Commercial real estate
Non-construction5 2,944 4 2,401 2 656 1 113 — — 
Residential real estate and other43 5,851 40 5,683 17 4,123 9 4,227 — — 
Total loans64 $13,869 51 $8,931 20 $5,079 10 $4,340 — $— 
 
(1)TDRs may have more than one modification representing a concession. As such, TDRs during the period may be represented in more than one of the categories noted above.
(2)Balances represent the recorded investment in the loan at the time of the restructuring.

During the year ended December 31, 2022, $13.4 million, or 40 loans, were determined to be TDRs, compared to $13.9 million, or 64 loans, in the year ended December 31, 2021. Of these loans extended at below market terms, the weighted average extension had a term of approximately 69 months in 2022 compared to 83 months in 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, compared to 137 basis points during the years ended December 31, 2022 and 2021, respectively. Interest-only payment terms were approximately eight months during the year ended 2022 compared to three months and for the year ended 2021. Additionally, no principal balances were forgiven on the loans noted above in 2022 and 2021.

The tables below present a summary of all loans restructured in TDRs during the years ended December 31, 2022 and 2021, and such loans which were in payment default under the restructured terms during the respective periods: 
 
Year Ended December 31, 2022
Year Ended December 31, 2021
 
Total (1)(3)
Payments in
Default  (2)(3)
Total (1)(3)
Payments in
Default  (2)(3)
(In thousands)
CountBalanceCountBalanceCountBalanceCountBalance
Commercial
Commercial, industrial and other5 $468 2 $185 16 $5,074 1 $199 
Commercial real-estate
Non-construction3 8,833 — — 5 2,944 3 2,276 
Residential real estate and other32 4,076 3 524 43 5,851 2 116 
Total loans40 $13,377 5 $709 64 $13,869 6 $2,591 
(1)Total TDRs represent all loans restructured in TDRs during the year indicated.
(2)TDRs considered to be in payment default are over 30 days past-due subsequent to the restructuring.
(3)Balances represent the recorded investment in the loan at the time of the restructuring.