XML 21 R12.htm IDEA: XBRL DOCUMENT v3.23.1
Loans and Leases and the Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2023
Loans And Leases And Allowance For Loan And Lease Losses [Abstract]  
Loans and Leases and the Allowance for Credit Losses

Note 4. Loans and Leases and the Allowance for Credit Losses

Loans and Leases

The Company’s loan and lease portfolio was comprised of the following as of March 31, 2023, and December 31, 2022:

 

(dollars in thousands)

 

March 31,
2023

 

 

December 31,
2022

 

Commercial

 

 

 

 

 

 

Commercial and Industrial

 

$

1,425,916

 

 

$

1,389,066

 

Paycheck Protection Program

 

 

15,175

 

 

 

19,579

 

Commercial Mortgage

 

 

3,826,283

 

 

 

3,725,542

 

Construction

 

 

232,903

 

 

 

260,825

 

Lease Financing

 

 

65,611

 

 

 

69,491

 

Total Commercial

 

 

5,565,888

 

 

 

5,464,503

 

Consumer

 

 

 

 

 

 

Residential Mortgage

 

 

4,691,298

 

 

 

4,653,072

 

Home Equity

 

 

2,260,001

 

 

 

2,225,950

 

Automobile

 

 

877,979

 

 

 

870,396

 

Other 2

 

 

429,356

 

 

 

432,499

 

Total Consumer

 

 

8,258,634

 

 

 

8,181,917

 

Total Loans and Leases

 

$

13,824,522

 

 

$

13,646,420

 

 

1.
Comprised of other revolving credit, installment, and lease financing.

The majority of the Company’s lending activity is with customers located in the State of Hawaii. A substantial portion of the Company’s real estate loans are secured by real estate in Hawaii.

Net gains related to sales of residential mortgage loans, recorded as a component of mortgage banking income was less than $0.1 million for the three months ended March 31, 2023 and March 31, 2022.

The Company elected to exclude AIR from the amortized cost basis of loans disclosed throughout this footnote. As of March 31, 2023, and December 31, 2022, AIR for loans totaled $41.5 million and $40.1 million, respectively, and is included in the “accrued interest receivable” line item on the Company’s consolidated statements of condition.

Allowance for Credit Losses (the “Allowance”)

The following presents by portfolio segment, the activity in the Allowance for the three months ended March 31, 2023, and March 31, 2022.

 

(dollars in thousands)

 

Commercial

 

 

Consumer

 

 

Total

 

Three Months Ended March 31, 2023

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

63,900

 

 

$

80,539

 

 

$

144,439

 

Loans and Leases Charged-Off

 

 

(261

)

 

 

(4,048

)

 

 

(4,309

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

50

 

 

 

1,591

 

 

 

1,641

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(211

)

 

 

(2,457

)

 

 

(2,668

)

Provision for Credit Losses

 

 

(4,918

)

 

 

6,724

 

 

 

1,806

 

Balance at End of Period

 

$

58,771

 

 

$

84,806

 

 

$

143,577

 

Three Months Ended March 31, 2022

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

64,950

 

 

$

92,871

 

 

$

157,821

 

Loans and Leases Charged-Off

 

 

(349

)

 

 

(3,559

)

 

 

(3,908

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

369

 

 

 

2,053

 

 

 

2,422

 

Net Loans and Leases Recovered (Charged-Off)

 

 

20

 

 

 

(1,506

)

 

 

(1,486

)

Provision for Credit Losses

 

 

(2,877

)

 

 

(1,430

)

 

 

(4,307

)

Balance at End of Period

 

$

62,093

 

 

$

89,935

 

 

$

152,028

 

 

Credit Quality Indicators

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company uses an internal credit risk rating system that categorizes loans and leases into pass, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans and leases that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans and leases to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans and leases that are underwritten and structured using standardized criteria and characteristics are typically monitored and risk-rated collectively. These are typically loans and leases to individuals in the classes which comprise the consumer portfolio segment.

The following are the definitions of the Company’s credit quality indicators:

Pass:

Loans and leases in all classes within the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan or lease agreement. Residential mortgage loans that are past due 90 days or more as to principal or interest may be considered Pass if the current loan-to-value ratio is 60% or less. Home equity loans that are past due 90 days or more as to principal or interest may be considered Pass if: a) the home equity loan is in a first lien position and the current loan-to-value ratio is 60% or less; or b) the first mortgage is with the Company and the current combined loan-to-value ratio is 60% or less.

Special Mention:

Loans and leases in all classes within the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease. The Special Mention credit quality indicator is not used for the consumer portfolio segment.

Classified:

Loans and leases in the classes within the commercial portfolio segment that are inadequately protected by the sound worth and paying capacity of the borrower or of the collateral pledged, if any. Classified loans and leases are also those in the classes within the consumer portfolio segment that are past due 90 days or more as to principal or interest. Residential mortgage and home equity loans may be current as to principal and interest, but may be considered Classified for a period of generally up to six months following a loan modification. Following a period of demonstrated performance in accordance with the modified contractual terms, the loan may be removed from Classified status.

 

For Pass rated credits, risk ratings are certified at a minimum annually. For Special Mention or Classified credits, risk ratings are reviewed for appropriateness on an ongoing basis, monthly, or at a minimum, quarterly. The following presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of March 31, 2023.

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

2023 2

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolving
Loans

 

 

Revolving
Loans
Converted
to Term
Loans

 

 

Total Loans
and Leases

 

March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

193,760

 

 

$

327,583

 

 

$

274,437

 

 

$

170,647

 

 

$

45,234

 

 

$

100,412

 

 

$

284,517

 

 

$

126

 

 

$

1,396,716

 

Special Mention

 

 

454

 

 

 

260

 

 

 

4,507

 

 

 

-

 

 

 

-

 

 

 

169

 

 

 

697

 

 

 

-

 

 

 

6,087

 

Classified

 

 

-

 

 

 

2,617

 

 

 

1,510

 

 

 

978

 

 

 

-

 

 

 

14,769

 

 

 

3,220

 

 

 

19

 

 

 

23,113

 

Total Commercial and Industrial

 

$

194,214

 

 

$

330,460

 

 

$

280,454

 

 

$

171,625

 

 

$

45,234

 

 

$

115,350

 

 

$

288,434

 

 

$

145

 

 

$

1,425,916

 

Paycheck Protection Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

2,941

 

 

$

12,234

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

15,175

 

Total Paycheck Protection Program

 

$

-

 

 

$

-

 

 

$

2,941

 

 

$

12,234

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

15,175

 

Commercial Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

476,513

 

 

$

1,068,867

 

 

$

750,112

 

 

$

513,505

 

 

$

267,100

 

 

$

555,077

 

 

$

50,040

 

 

$

-

 

 

$

3,681,214

 

Special Mention

 

 

-

 

 

 

86,018

 

 

 

7,729

 

 

 

4,811

 

 

 

-

 

 

 

20,995

 

 

 

-

 

 

 

-

 

 

 

119,553

 

Classified

 

 

3,220

 

 

 

175

 

 

 

1,953

 

 

 

8,370

 

 

 

-

 

 

 

11,798

 

 

 

-

 

 

 

-

 

 

 

25,516

 

Total Commercial Mortgage

 

$

479,733

 

 

$

1,155,060

 

 

$

759,794

 

 

$

526,686

 

 

$

267,100

 

 

$

587,870

 

 

$

50,040

 

 

$

-

 

 

$

3,826,283

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

9,124

 

 

$

138,875

 

 

$

63,866

 

 

$

2,902

 

 

$

16,691

 

 

$

296

 

 

$

1,149

 

 

$

-

 

 

$

232,903

 

Total Construction

 

$

9,124

 

 

$

138,875

 

 

$

63,866

 

 

$

2,902

 

 

$

16,691

 

 

$

296

 

 

$

1,149

 

 

$

-

 

 

$

232,903

 

Lease Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

2,617

 

 

$

14,469

 

 

$

16,885

 

 

$

10,796

 

 

$

8,670

 

 

$

10,795

 

 

$

-

 

 

$

-

 

 

$

64,232

 

Special Mention

 

 

-

 

 

 

706

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

706

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

673

 

 

 

-

 

 

 

-

 

 

 

673

 

Total Lease Financing

 

$

2,617

 

 

$

15,175

 

 

$

16,885

 

 

$

10,796

 

 

$

8,670

 

 

$

11,468

 

 

$

-

 

 

$

-

 

 

$

65,611

 

Total Commercial

 

$

685,688

 

 

$

1,639,570

 

 

$

1,123,940

 

 

$

724,243

 

 

$

337,695

 

 

$

714,984

 

 

$

339,623

 

 

$

145

 

 

$

5,565,888

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

104,228

 

 

$

820,761

 

 

$

1,291,098

 

 

$

1,018,872

 

 

$

316,122

 

 

$

1,137,671

 

 

$

-

 

 

$

-

 

 

$

4,688,752

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

324

 

 

 

2,222

 

 

 

-

 

 

 

-

 

 

 

2,546

 

Total Residential Mortgage

 

$

104,228

 

 

$

820,761

 

 

$

1,291,098

 

 

$

1,018,872

 

 

$

316,446

 

 

$

1,139,893

 

 

$

-

 

 

$

-

 

 

$

4,691,298

 

Home Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

878

 

 

$

2,220,133

 

 

$

37,024

 

 

$

2,258,035

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

25

 

 

 

681

 

 

 

1,260

 

 

 

1,966

 

Total Home Equity

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

903

 

 

$

2,220,814

 

 

$

38,284

 

 

$

2,260,001

 

Automobile

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

90,387

 

 

$

376,242

 

 

$

197,708

 

 

$

89,894

 

 

$

73,066

 

 

$

50,084

 

 

$

-

 

 

$

-

 

 

$

877,381

 

Classified

 

 

-

 

 

 

203

 

 

 

122

 

 

 

60

 

 

 

100

 

 

 

113

 

 

 

-

 

 

 

-

 

 

 

598

 

Total Automobile

 

$

90,387

 

 

$

376,445

 

 

$

197,830

 

 

$

89,954

 

 

$

73,166

 

 

$

50,197

 

 

$

-

 

 

$

-

 

 

$

877,979

 

Other1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

36,431

 

 

$

174,242

 

 

$

115,748

 

 

$

26,317

 

 

$

32,554

 

 

$

20,226

 

 

$

22,265

 

 

$

940

 

 

$

428,723

 

Classified

 

 

-

 

 

 

68

 

 

 

142

 

 

 

31

 

 

 

174

 

 

 

142

 

 

 

57

 

 

 

19

 

 

 

633

 

Total Other

 

$

36,431

 

 

$

174,310

 

 

$

115,890

 

 

$

26,348

 

 

$

32,728

 

 

$

20,368

 

 

$

22,322

 

 

$

959

 

 

$

429,356

 

Total Consumer

 

$

231,046

 

 

$

1,371,516

 

 

$

1,604,818

 

 

$

1,135,174

 

 

$

422,340

 

 

$

1,211,361

 

 

$

2,243,136

 

 

$

39,243

 

 

$

8,258,634

 

Total Loans and Leases

 

$

916,734

 

 

$

3,011,086

 

 

$

2,728,758

 

 

$

1,859,417

 

 

$

760,035

 

 

$

1,926,345

 

 

$

2,582,759

 

 

$

39,388

 

 

$

13,824,522

 

 

1.
Comprised of other revolving credit, installment, and lease financing.
2.
Loans reported as Special Mention or Classified in the 2023 column represent renewal of loans that originated in an earlier period.

For the three months ended March 31, 2023, $2.1 million revolving loans were converted to term loans.

The following presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of December 31, 2022.

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

2022

 

 

2021

 

 

2020

 

 

2019

 

 

2018

 

 

Prior

 

 

Revolving
Loans

 

 

Revolving
Loans
Converted
to Term
Loans

 

 

Total Loans
and Leases

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

360,748

 

 

$

348,300

 

 

$

224,264

 

 

$

59,127

 

 

$

46,799

 

 

$

71,906

 

 

$

257,349

 

 

$

155

 

 

$

1,368,648

 

Special Mention

 

 

273

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

96

 

 

 

92

 

 

 

1,357

 

 

 

-

 

 

 

1,818

 

Classified

 

 

7,295

 

 

 

91

 

 

 

1,030

 

 

 

-

 

 

 

1,644

 

 

 

6,267

 

 

 

2,252

 

 

 

21

 

 

 

18,600

 

Total Commercial and Industrial

 

$

368,316

 

 

$

348,391

 

 

$

225,294

 

 

$

59,127

 

 

$

48,539

 

 

$

78,265

 

 

$

260,958

 

 

$

176

 

 

$

1,389,066

 

Paycheck Protection Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

5,359

 

 

$

14,220

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

19,579

 

Total Paycheck Protection Program

 

$

-

 

 

$

5,359

 

 

$

14,220

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

19,579

 

Commercial Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

1,182,831

 

 

$

771,375

 

 

$

691,054

 

 

$

283,553

 

 

$

131,055

 

 

$

494,924

 

 

$

48,771

 

 

$

-

 

 

$

3,603,563

 

Special Mention

 

 

29,707

 

 

 

37,657

 

 

 

28,105

 

 

 

-

 

 

 

1,482

 

 

 

5,014

 

 

 

-

 

 

 

-

 

 

 

101,965

 

Classified

 

 

182

 

 

 

1,964

 

 

 

8,545

 

 

 

624

 

 

 

-

 

 

 

8,699

 

 

 

-

 

 

 

-

 

 

 

20,014

 

Total Commercial Mortgage

 

$

1,212,720

 

 

$

810,996

 

 

$

727,704

 

 

$

284,177

 

 

$

132,537

 

 

$

508,637

 

 

$

48,771

 

 

$

-

 

 

$

3,725,542

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

124,507

 

 

$

69,992

 

 

$

37,133

 

 

$

16,838

 

 

$

-

 

 

$

297

 

 

$

12,058

 

 

$

-

 

 

$

260,825

 

Special Mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total Construction

 

$

124,507

 

 

$

69,992

 

 

$

37,133

 

 

$

16,838

 

 

$

-

 

 

$

297

 

 

$

12,058

 

 

$

-

 

 

$

260,825

 

Lease Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

16,959

 

 

$

17,823

 

 

$

11,408

 

 

$

9,768

 

 

$

6,379

 

 

$

6,444

 

 

$

-

 

 

$

-

 

 

$

68,781

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

710

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

710

 

Total Lease Financing

 

$

16,959

 

 

$

17,823

 

 

$

11,408

 

 

$

9,768

 

 

$

7,089

 

 

$

6,444

 

 

$

-

 

 

$

-

 

 

$

69,491

 

Total Commercial

 

$

1,722,502

 

 

$

1,252,561

 

 

$

1,015,759

 

 

$

369,910

 

 

$

188,165

 

 

$

593,643

 

 

$

321,787

 

 

$

176

 

 

$

5,464,503

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

827,909

 

 

$

1,304,831

 

 

$

1,035,285

 

 

$

321,208

 

 

$

138,214

 

 

$

1,023,841

 

 

$

-

 

 

$

-

 

 

$

4,651,288

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

552

 

 

 

1,232

 

 

 

-

 

 

 

-

 

 

 

1,784

 

Total Residential Mortgage

 

$

827,909

 

 

$

1,304,831

 

 

$

1,035,285

 

 

$

321,208

 

 

$

138,766

 

 

$

1,025,073

 

 

$

-

 

 

$

-

 

 

$

4,653,072

 

Home Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

890

 

 

$

2,186,598

 

 

$

36,114

 

 

$

2,223,602

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

25

 

 

 

1,105

 

 

 

1,218

 

 

 

2,348

 

Total Home Equity

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

915

 

 

$

2,187,703

 

 

$

37,332

 

 

$

2,225,950

 

Automobile

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

405,440

 

 

$

216,039

 

 

$

100,608

 

 

$

84,052

 

 

$

45,301

 

 

$

18,366

 

 

$

-

 

 

$

-

 

 

$

869,806

 

Classified

 

 

121

 

 

 

260

 

 

 

23

 

 

 

43

 

 

 

92

 

 

 

51

 

 

 

-

 

 

 

-

 

 

 

590

 

Total Automobile

 

$

405,561

 

 

$

216,299

 

 

$

100,631

 

 

$

84,095

 

 

$

45,393

 

 

$

18,417

 

 

$

-

 

 

$

-

 

 

$

870,396

 

Other1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

185,347

 

 

$

124,759

 

 

$

31,343

 

 

$

39,902

 

 

$

16,364

 

 

$

9,853

 

 

$

23,228

 

 

$

1,020

 

 

$

431,816

 

Classified

 

 

117

 

 

 

114

 

 

 

70

 

 

 

148

 

 

 

129

 

 

 

24

 

 

 

59

 

 

 

22

 

 

 

683

 

Total Other

 

$

185,464

 

 

$

124,873

 

 

$

31,413

 

 

$

40,050

 

 

$

16,493

 

 

$

9,877

 

 

$

23,287

 

 

$

1,042

 

 

$

432,499

 

Total Consumer

 

$

1,418,934

 

 

$

1,646,003

 

 

$

1,167,329

 

 

$

445,353

 

 

$

200,652

 

 

$

1,054,282

 

 

$

2,210,990

 

 

$

38,374

 

 

$

8,181,917

 

Total Loans and Leases

 

$

3,141,436

 

 

$

2,898,564

 

 

$

2,183,088

 

 

$

815,263

 

 

$

388,817

 

 

$

1,647,925

 

 

$

2,532,777

 

 

$

38,550

 

 

$

13,646,420

 

 

1.
Comprised of other revolving credit, installment, and lease financing.

For the year ended December 31, 2022, $6.2 million revolving loans were converted to term loans.

 

Aging Analysis

Loans and leases are considered to be past due once becoming 30 days delinquent. For the consumer portfolio, this generally represents two missed monthly payments. The following presents by class, an aging analysis of the Company’s loan and lease portfolio as of March 31, 2023, and December 31, 2022.

 

(dollars in thousands)

 

30 - 59
Days
Past Due

 

 

60 - 89
Days
Past Due

 

 

Past Due
90 Days
or More

 

 

Non-
Accrual

 

 

Total
Past Due
and Non-
Accrual

 

 

Current

 

 

Total
Loans and
Leases

 

 

Non-
Accrual
Loans
and Leases
that are
Current 2

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

1,689

 

 

$

77

 

 

$

—

 

 

$

31

 

 

$

1,797

 

 

$

1,424,119

 

 

$

1,425,916

 

 

$

19

 

Paycheck Protection Program

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15,175

 

 

 

15,175

 

 

 

—

 

Commercial Mortgage

 

 

304

 

 

 

—

 

 

 

—

 

 

 

3,216

 

 

 

3,520

 

 

 

3,822,763

 

 

 

3,826,283

 

 

 

3,216

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

232,903

 

 

 

232,903

 

 

 

—

 

Lease Financing

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

65,611

 

 

 

65,611

 

 

 

—

 

Total Commercial

 

 

1,993

 

 

 

77

 

 

 

—

 

 

 

3,247

 

 

 

5,317

 

 

 

5,560,571

 

 

 

5,565,888

 

 

 

3,235

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

2,595

 

 

 

790

 

 

 

4,566

 

 

 

4,199

 

 

 

12,150

 

 

 

4,679,148

 

 

 

4,691,298

 

 

 

1,958

 

Home Equity

 

 

2,603

 

 

 

974

 

 

 

1,723

 

 

 

3,638

 

 

 

8,938

 

 

 

2,251,063

 

 

 

2,260,001

 

 

 

143

 

Automobile

 

 

10,762

 

 

 

1,411

 

 

 

598

 

 

 

—

 

 

 

12,771

 

 

 

865,208

 

 

 

877,979

 

 

 

—

 

Other 1

 

 

1,966

 

 

 

893

 

 

 

632

 

 

 

—

 

 

 

3,491

 

 

 

425,865

 

 

 

429,356

 

 

 

—

 

Total Consumer

 

 

17,926

 

 

 

4,068

 

 

 

7,519

 

 

 

7,837

 

 

 

37,350

 

 

 

8,221,284

 

 

 

8,258,634

 

 

 

2,101

 

Total

 

$

19,919

 

 

$

4,145

 

 

$

7,519

 

 

$

11,084

 

 

$

42,667

 

 

$

13,781,855

 

 

$

13,824,522

 

 

$

5,336

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

252

 

 

$

9

 

 

$

—

 

 

$

37

 

 

$

298

 

 

$

1,388,768

 

 

$

1,389,066

 

 

$

37

 

Paycheck Protection Program

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

19,579

 

 

 

19,579

 

 

 

 

Commercial Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,309

 

 

 

3,309

 

 

 

3,722,233

 

 

 

3,725,542

 

 

 

3,309

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

260,825

 

 

 

260,825

 

 

 

—

 

Lease Financing

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

69,491

 

 

 

69,491

 

 

 

—

 

Total Commercial

 

 

252

 

 

 

9

 

 

 

—

 

 

 

3,346

 

 

 

3,607

 

 

 

5,460,896

 

 

 

5,464,503

 

 

 

3,346

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

3,016

 

 

 

721

 

 

 

2,429

 

 

 

4,239

 

 

 

10,405

 

 

 

4,642,667

 

 

 

4,653,072

 

 

 

1,729

 

Home Equity

 

 

1,639

 

 

 

960

 

 

 

1,673

 

 

 

4,022

 

 

 

8,294

 

 

 

2,217,656

 

 

 

2,225,950

 

 

 

664

 

Automobile

 

 

13,293

 

 

 

1,988

 

 

 

589

 

 

 

—

 

 

 

15,870

 

 

 

854,526

 

 

 

870,396

 

 

 

—

 

Other 1

 

 

2,318

 

 

 

1,302

 

 

 

683

 

 

 

—

 

 

 

4,303

 

 

 

428,196

 

 

 

432,499

 

 

 

—

 

Total Consumer

 

 

20,266

 

 

 

4,971

 

 

 

5,374

 

 

 

8,261

 

 

 

38,872

 

 

 

8,143,045

 

 

 

8,181,917

 

 

 

2,393

 

Total

 

$

20,518

 

 

$

4,980

 

 

$

5,374

 

 

$

11,607

 

 

$

42,479

 

 

$

13,603,941

 

 

$

13,646,420

 

 

$

5,739

 

 

1.
Comprised of other revolving credit, installment, and lease financing.
2.
Represents non-accrual loans that are not past due 30 days or more; however, full payment of principal and interest is still not expected.

Non-Accrual Loans and Leases

The following presents the non-accrual loans and leases as of March 31, 2023, and December 31, 2022.

 

 

 

March 31, 2023

 

 

December 31, 2022

 

(dollars in thousands)

 

Non-accrual
loans with a
related ACL

 

 

Non-accrual
loans without
a related ACL

 

 

Total Non-
accrual loans

 

 

Non-accrual
loans with a
related ACL

 

 

Non-accrual
loans without
a related ACL

 

 

Total Non-
accrual loans

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

31

 

 

$

—

 

 

$

31

 

 

$

37

 

 

$

—

 

 

$

37

 

Commercial Mortgage

 

 

—

 

 

 

3,216

 

 

 

3,216

 

 

 

—

 

 

 

3,309

 

 

 

3,309

 

Total Commercial

 

 

31

 

 

 

3,216

 

 

 

3,247

 

 

 

37

 

 

 

3,309

 

 

 

3,346

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

4,199

 

 

 

—

 

 

 

4,199

 

 

 

4,239

 

 

 

—

 

 

 

4,239

 

Home Equity

 

 

3,638

 

 

 

—

 

 

 

3,638

 

 

 

4,022

 

 

 

—

 

 

 

4,022

 

Total Consumer

 

 

7,837

 

 

 

—

 

 

 

7,837

 

 

 

8,261

 

 

 

—

 

 

 

8,261

 

Total

 

$

7,868

 

 

$

3,216

 

 

$

11,084

 

 

$

8,298

 

 

$

3,309

 

 

$

11,607

 

 

All payments received while on non-accrual status are applied against the principal balance of the loan or lease. The Company does not recognize interest income while loans or leases are on non-accrual status.

Loan Modifications to Borrowers Experiencing Financial Difficulty

In January 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminated the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Upon adoption of this guidance, the Company no longer establishes a specific reserve for modifications to borrowers experiencing financial difficulty. Instead, these modifications are included in their respective cohort and a historical loss rate is applied to the current loan balance to arrive at the quantitative baseline portion of the Allowance.

Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following illustrates the most common loan modifications by loan classes offered by the Company that are required to be disclosed pursuant to the requirements of ASU 2022-02:

 

Loan Classes

Modification Types

Commercial:

Term extension, interest rate reductions, payment delay, or combination thereof. These modifications extend the term of the loan, lower the payment amount, or otherwise delay payments during a defined period for the purpose of providing borrowers additional time to return to compliance with the original loan term.

 

Residential Mortgage/
Home Equity:

Forbearance period greater than six months. These modifications require reduced or no payments during the forbearance period for the purpose of providing borrowers additional time to return to compliance with the original loan term.

Residential Mortgage/
Home Equity:

Term extension and rate adjustment. These modifications extend the term of the loan and provides for an adjustment to the interest rate, which reduces the monthly payment requirement.

Automobile/
Direct Installment:

Term extension greater than three months. These modifications extend the term of the loan, which reduces the monthly payment requirement.

 

 

The following table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the quarter ended March 31, 2023.

 

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

%

 

 

 

 

Payment

 

 

 

 

 

of

 

 

 

 

Delay

 

 

 

 

 

Total

 

 

 

 

and

 

 

 

 

 

Class of

 

 

Term

 

Term

 

 

 

 

 

Loans and

 

(dollars in thousands)

Extension

 

Extension

 

 

Total

 

 

Leases

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

—

 

$

7,091

 

 

$

7,091

 

 

 

0.50

%

Total Commercial

 

—

 

 

7,091

 

 

 

7,091

 

 

 

0.13

%

Consumer

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

137

 

 

—

 

 

 

137

 

 

 

0.00

%

Home Equity

 

141

 

 

—

 

 

 

141

 

 

 

0.01

%

Automobile

 

1,815

 

 

—

 

 

 

1,815

 

 

 

0.21

%

Other1

 

175

 

 

—

 

 

 

175

 

 

 

0.04

%

Total Consumer

 

2,268

 

 

—

 

 

 

2,268

 

 

 

0.03

%

Total Loans and Leases

$

2,268

 

$

7,091

 

 

$

9,359

 

 

 

0.07

%

1 Comprised of other revolving credit, installment and lease financing.

 

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the quarter ended March 31, 2023.

 

 

As of March 31, 2023

 

 

 

Weighted-Average

 

 

Weighted-Average

 

 

 

Months of

 

 

Payment

 

(dollars in thousands)

 

Term Extension

 

 

Deferral

 

Commercial

 

 

 

 

 

 

Commercial and Industrial

 

 

6

 

 

$

1,159

 

Consumer

 

 

 

 

 

 

Residential Mortgage

 

 

58

 

 

 

—

 

Home Equity

 

 

64

 

 

 

—

 

Automobile

 

 

23

 

 

 

—

 

Other1

 

 

23

 

 

 

—

 

1 Comprised of other revolving credit, installment and lease financing.

 

There were no loan modifications made to borrowers experiencing financial difficulty during the quarter ended March 31, 2023, that subsequently defaulted.

 

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the quarter ended March 31, 2023.

 

 

 

As of March 31, 2023

 

(dollars in thousands)

 

Current

 

 

30 - 59
Days
Past Due

 

 

60 - 89
Days
Past Due

 

 

Past Due
90 Days
or More

 

 

Non-
Accrual

 

Total

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

7,091

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

$

7,091

 

 Total Commercial

 

 

7,091

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

7,091

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

137

 

 

137

 

Home Equity

 

 

141

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

141

 

Automobile

 

 

1,815

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

1,815

 

Other1

 

 

175

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

175

 

 Total Consumer

 

 

2,131

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

137

 

 

2,268

 

Total Loans and Leases

 

 

9,222

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

137

 

$

9,359

 

1 Comprised of other revolving credit, installment and lease financing.

 

The following table presents by loan class and year of origination, the gross charge-offs recorded during the quarter ended March 31, 2023.

(dollars in thousands)

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Total
Loans and
Leases

 

As of March 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

—

 

 

$

188

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

72

 

 

$

260

 

Total Commercial

 

—

 

 

 

188

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

72

 

 

 

260

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Equity

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

50

 

 

 

50

 

Automobile

 

—

 

 

 

314

 

 

 

507

 

 

 

228

 

 

 

191

 

 

 

423

 

 

 

1,663

 

Other1

 

—

 

 

 

821

 

 

 

565

 

 

 

120

 

 

 

395

 

 

 

435

 

 

 

2,336

 

Total Consumer

 

—

 

 

 

1,135

 

 

 

1,072

 

 

 

348

 

 

 

586

 

 

 

908

 

 

 

4,049

 

Total

$

—

 

 

$

1,323

 

 

$

1,072

 

 

$

348

 

 

$

586

 

 

$

980

 

 

$

4,309

 

1 Comprised of other revolving credit, installment and lease financing.

Foreclosure Proceedings

Consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure totaled $3.9 million as of March 31, 2023.