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Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
 6 Months Ended
Jun. 30, 2020
Credit Loss [Abstract]  
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
On January 1, 2020, the Company adopted CECL, which replaced the incurred loss methodology with an expected loss methodology. This new methodology applies to off-balance sheet credit exposures, including loan commitments and lines of credit. The adoption of this new standard resulted in the Company recording a $3.2 million increase to the allowance for credit losses on off-balance sheet credit exposures with a corresponding cumulative effect adjustment to decrease retained earnings $2.4 million, net of income taxes.
Management analyzes the Company's exposure to credit losses for both on-balance sheet and off-balance sheet activity using a consistent methodology for the quantitative framework as well as the qualitative framework. For purposes of estimating the allowance for credit losses for off-balance sheet credit exposures, the exposure at default includes an estimated drawdown of unused credit based on historical credit utilization factors and current loss factors, resulting in a proportionate amount of expected credit losses.
The following table illustrates the impact of the January 1, 2020 adoption of CECL on off-balance sheet credit exposures:
January 1, 2020
As reported under CECLPrior to CECLImpact of CECL adoption
Liabilities
Allowance for credit losses on off-balance sheet credit exposure$3,206  —  3,206  
The Company recorded a provision for credit losses on off-balance sheet credit exposures for the three and six months ended June 30, 2020 of $5.3 million and $6.3 million, respectively.