XML 21 R12.htm IDEA: XBRL DOCUMENT v3.22.2.2
Loans and Leases and the Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2022
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 September 30, 2022, and December 31, 2021:

 

(dollars in thousands)

 

September 30,

2022

 

 

December 31,

2021

 

Commercial

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

1,368,966

 

 

$

1,361,921

 

Paycheck Protection Program

 

 

22,955

 

 

 

126,779

 

Commercial Mortgage

 

 

3,591,943

 

 

 

3,152,130

 

Construction

 

 

236,498

 

 

 

220,254

 

Lease Financing

 

 

73,989

 

 

 

105,108

 

Total Commercial

 

 

5,294,351

 

 

 

4,966,192

 

Consumer

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

4,585,723

 

 

 

4,309,602

 

Home Equity

 

 

2,185,484

 

 

 

1,836,588

 

Automobile

 

 

820,640

 

 

 

736,565

 

Other 1

 

 

435,408

 

 

 

410,129

 

Total Consumer

 

 

8,027,255

 

 

 

7,292,884

 

Total Loans and Leases

 

$

13,321,606

 

 

$

12,259,076

 

 

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 and $1.2 million for the three months ended September 30, 2022 and 2021 respectively, and $0.2 million and $5.9 million for the nine months ended September 30, 2022 and 2021, respectively.

The Company elected to exclude AIR from the amortized cost basis of loans disclosed throughout this footnote.  As of September 30, 2022, and December 31, 2021, AIR for loans totaled $34.0 million and $28.7 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 and nine months ended September 30, 2022, and September 30, 2021.

 

(dollars in thousands)

 

Commercial

 

 

Consumer

 

 

Total

 

Three Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

61,826

 

 

$

86,686

 

 

$

148,512

 

Loans and Leases Charged-Off

 

 

(147

)

 

 

(2,718

)

 

 

(2,865

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

45

 

 

 

1,673

 

 

 

1,718

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(102

)

 

 

(1,045

)

 

 

(1,147

)

Provision for Credit Losses

 

 

157

 

 

 

(1,086

)

 

 

(929

)

Balance at End of Period

 

$

61,881

 

 

$

84,555

 

 

$

146,436

 

Nine Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

64,950

 

 

$

92,871

 

 

$

157,821

 

Loans and Leases Charged-Off

 

 

(729

)

 

 

(9,390

)

 

 

(10,119

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

465

 

 

 

6,390

 

 

 

6,855

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(264

)

 

 

(3,000

)

 

 

(3,264

)

Provision for Credit Losses

 

 

(2,805

)

 

 

(5,316

)

 

 

(8,121

)

Balance at End of Period

 

$

61,881

 

 

$

84,555

 

 

$

146,436

 

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

78,639

 

 

$

101,746

 

 

$

180,385

 

Loans and Leases Charged-Off

 

 

(196

)

 

 

(3,249

)

 

 

(3,445

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

118

 

 

 

2,134

 

 

 

2,252

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(78

)

 

 

(1,115

)

 

 

(1,193

)

Provision for Credit Losses

 

 

(9,894

)

 

 

(1,378

)

 

 

(11,272

)

Balance at End of Period

 

$

68,667

 

 

$

99,253

 

 

$

167,920

 

Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

84,847

 

 

$

131,405

 

 

$

216,252

 

Loans and Leases Charged-Off

 

 

(900

)

 

 

(13,145

)

 

 

(14,045

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

374

 

 

 

8,378

 

 

 

8,752

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(526

)

 

 

(4,767

)

 

 

(5,293

)

Provision for Credit Losses

 

 

(15,654

)

 

 

(27,385

)

 

 

(43,039

)

Balance at End of Period

 

$

68,667

 

 

$

99,253

 

 

$

167,920

 

 

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 (e.g., credit scoring or payment performance), are typically risk-rated and monitored 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 that are past due 90 days or more as to principal or interest may be considered Pass based on the criteria described in the definition of Pass.  

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 September 30, 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

 

September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

274,968

 

 

$

382,203

 

 

$

240,451

 

 

$

71,445

 

 

$

49,597

 

 

$

76,600

 

 

$

234,231

 

 

$

212

 

 

$

1,329,707

 

Special Mention

 

 

287

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

111

 

 

 

94

 

 

 

18,087

 

 

 

-

 

 

 

18,579

 

Classified

 

 

-

 

 

 

9,482

 

 

 

1,064

 

 

 

-

 

 

 

1,686

 

 

 

6,378

 

 

 

2,045

 

 

 

25

 

 

 

20,680

 

Total Commercial and

   Industrial

 

$

275,255

 

 

$

391,685

 

 

$

241,515

 

 

$

71,445

 

 

$

51,394

 

 

$

83,072

 

 

$

254,363

 

 

$

237

 

 

$

1,368,966

 

Paycheck Protection Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

7,410

 

 

$

15,545

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

22,955

 

Total Paycheck Protection Program

 

$

-

 

 

$

7,410

 

 

$

15,545

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

22,955

 

Commercial Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

943,746

 

 

$

824,641

 

 

$

711,566

 

 

$

285,509

 

 

$

133,164

 

 

$

513,977

 

 

$

58,187

 

 

$

-

 

 

$

3,470,790

 

Special Mention

 

 

29,854

 

 

 

37,949

 

 

 

31,175

 

 

 

-

 

 

 

1,493

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

100,471

 

Classified

 

 

690

 

 

 

3,172

 

 

 

7,264

 

 

 

628

 

 

 

-

 

 

 

8,928

 

 

 

-

 

 

 

-

 

 

 

20,682

 

Total Commercial

   Mortgage

 

$

974,290

 

 

$

865,762

 

 

$

750,005

 

 

$

286,137

 

 

$

134,657

 

 

$

522,905

 

 

$

58,187

 

 

$

-

 

 

$

3,591,943

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

51,288

 

 

$

65,884

 

 

$

94,072

 

 

$

16,957

 

 

$

-

 

 

$

594

 

 

$

7,703

 

 

$

-

 

 

$

236,498

 

Total Construction

 

$

51,288

 

 

$

65,884

 

 

$

94,072

 

 

$

16,957

 

 

$

-

 

 

$

594

 

 

$

7,703

 

 

$

-

 

 

$

236,498

 

Lease Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

12,892

 

 

$

18,675

 

 

$

12,879

 

 

$

10,876

 

 

$

8,225

 

 

$

10,442

 

 

$

-

 

 

$

-

 

 

$

73,989

 

Total Lease

Financing

 

$

12,892

 

 

$

18,675

 

 

$

12,879

 

 

$

10,876

 

 

$

8,225

 

 

$

10,442

 

 

$

-

 

 

$

-

 

 

$

73,989

 

Total Commercial

 

$

1,313,725

 

 

$

1,349,416

 

 

$

1,114,016

 

 

$

385,415

 

 

$

194,276

 

 

$

617,013

 

 

$

320,253

 

 

$

237

 

 

$

5,294,351

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

694,780

 

 

$

1,319,910

 

 

$

1,048,413

 

 

$

325,127

 

 

$

142,493

 

 

$

1,055,000

 

 

$

-

 

 

$

-

 

 

$

4,585,723

 

Total Residential

   Mortgage

 

$

694,780

 

 

$

1,319,910

 

 

$

1,048,413

 

 

$

325,127

 

 

$

142,493

 

 

$

1,055,000

 

 

$

-

 

 

$

-

 

 

$

4,585,723

 

Home Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

985

 

 

$

2,146,118

 

 

$

33,833

 

 

$

2,180,936

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

189

 

 

 

2,477

 

 

 

1,882

 

 

 

4,548

 

Total Home Equity

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

1,174

 

 

$

2,148,595

 

 

$

35,715

 

 

$

2,185,484

 

Automobile

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

299,115

 

 

$

234,767

 

 

$

111,893

 

 

$

95,422

 

 

$

54,835

 

 

$

24,140

 

 

$

-

 

 

$

-

 

 

$

820,172

 

Classified

 

 

58

 

 

 

131

 

 

 

54

 

 

 

75

 

 

 

77

 

 

 

73

 

 

 

-

 

 

 

-

 

 

 

468

 

Total Automobile

 

$

299,173

 

 

$

234,898

 

 

$

111,947

 

 

$

95,497

 

 

$

54,912

 

 

$

24,213

 

 

$

-

 

 

$

-

 

 

$

820,640

 

Other1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

153,897

 

 

$

135,469

 

 

$

36,000

 

 

$

50,763

 

 

$

21,507

 

 

$

12,860

 

 

$

23,277

 

 

$

1,121

 

 

$

434,894

 

Classified

 

 

15

 

 

 

177

 

 

 

16

 

 

 

160

 

 

 

82

 

 

 

33

 

 

 

20

 

 

 

11

 

 

 

514

 

Total Other

 

$

153,912

 

 

$

135,646

 

 

$

36,016

 

 

$

50,923

 

 

$

21,589

 

 

$

12,893

 

 

$

23,297

 

 

$

1,132

 

 

$

435,408

 

Total Consumer

 

$

1,147,865

 

 

$

1,690,454

 

 

$

1,196,376

 

 

$

471,547

 

 

$

218,994

 

 

$

1,093,280

 

 

$

2,171,892

 

 

$

36,847

 

 

$

8,027,255

 

Total Loans and Leases

 

$

2,461,590

 

 

$

3,039,870

 

 

$

2,310,392

 

 

$

856,962

 

 

$

413,270

 

 

$

1,710,293

 

 

$

2,492,145

 

 

$

37,084

 

 

$

13,321,606

 

 

1

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

For the nine months ended September 30, 2022, $4.2 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, 2021.

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

2021

 

 

2020

 

 

2019

 

 

2018

 

 

2017

 

 

Prior

 

 

Revolving

Loans

 

 

Revolving

Loans

Converted

to Term

Loans

 

 

Total Loans

and Leases

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

455,984

 

 

$

301,646

 

 

$

79,826

 

 

$

68,026

 

 

$

27,246

 

 

$

75,321

 

 

$

256,240

 

 

$

471

 

 

$

1,264,760

 

Special Mention

 

 

1,966

 

 

 

32,667

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

101

 

 

 

27,031

 

 

 

-

 

 

 

61,765

 

Classified

 

 

10,851

 

 

 

1,919

 

 

 

87

 

 

 

1,990

 

 

 

505

 

 

 

17,481

 

 

 

2,509

 

 

 

54

 

 

 

35,396

 

Total Commercial and

   Industrial

 

$

468,801

 

 

$

336,232

 

 

$

79,913

 

 

$

70,016

 

 

$

27,751

 

 

$

92,903

 

 

$

285,780

 

 

$

525

 

 

$

1,361,921

 

Paycheck Protection Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

86,484

 

 

$

40,295

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

126,779

 

Total Paycheck Protection Program

 

$

86,484

 

 

$

40,295

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

126,779

 

Commercial Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

958,719

 

 

$

736,155

 

 

$

338,160

 

 

$

261,991

 

 

$

178,436

 

 

$

459,337

 

 

$

53,386

 

 

$

-

 

 

$

2,986,184

 

Special Mention

 

 

68,768

 

 

 

39,773

 

 

 

-

 

 

 

30,000

 

 

 

-

 

 

 

6,069

 

 

 

-

 

 

 

-

 

 

 

144,610

 

Classified

 

 

3,740

 

 

 

7,815

 

 

 

640

 

 

 

-

 

 

 

-

 

 

 

9,141

 

 

 

-

 

 

 

-

 

 

 

21,336

 

Total Commercial

   Mortgage

 

$

1,031,227

 

 

$

783,743

 

 

$

338,800

 

 

$

291,991

 

 

$

178,436

 

 

$

474,547

 

 

$

53,386

 

 

$

-

 

 

$

3,152,130

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

67,069

 

 

$

94,878

 

 

$

40,051

 

 

$

-

 

 

$

596

 

 

$

-

 

 

$

17,660

 

 

$

-

 

 

$

220,254

 

Special Mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total Construction

 

$

67,069

 

 

$

94,878

 

 

$

40,051

 

 

$

-

 

 

$

596

 

 

$

-

 

 

$

17,660

 

 

$

-

 

 

$

220,254

 

Lease Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

21,637

 

 

$

15,075

 

 

$

15,697

 

 

$

9,902

 

 

$

2,004

 

 

$

39,937

 

 

$

-

 

 

$

-

 

 

$

104,252

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

856

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

856

 

Total Lease

Financing

 

$

21,637

 

 

$

15,075

 

 

$

15,697

 

 

$

10,758

 

 

$

2,004

 

 

$

39,937

 

 

$

-

 

 

$

-

 

 

$

105,108

 

Total Commercial

 

$

1,675,218

 

 

$

1,270,223

 

 

$

474,461

 

 

$

372,765

 

 

$

208,787

 

 

$

607,387

 

 

$

356,826

 

 

$

525

 

 

$

4,966,192

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

1,392,337

 

 

$

1,131,330

 

 

$

367,525

 

 

$

177,215

 

 

$

256,825

 

 

$

982,759

 

 

$

-

 

 

$

-

 

 

$

4,307,991

 

Classified

 

 

-

 

 

 

-

 

 

 

294

 

 

 

-

 

 

 

905

 

 

 

412

 

 

 

-

 

 

 

-

 

 

 

1,611

 

Total Residential

   Mortgage

 

$

1,392,337

 

 

$

1,131,330

 

 

$

367,819

 

 

$

177,215

 

 

$

257,730

 

 

$

983,171

 

 

$

-

 

 

$

-

 

 

$

4,309,602

 

Home Equity 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

2,986

 

 

$

1,795,107

 

 

$

35,427

 

 

$

1,833,520

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

58

 

 

 

2,649

 

 

 

361

 

 

 

3,068

 

Total Home Equity

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

3,044

 

 

$

1,797,756

 

 

$

35,788

 

 

$

1,836,588

 

Automobile

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

301,285

 

 

$

152,022

 

 

$

138,887

 

 

$

91,411

 

 

$

33,268

 

 

$

18,963

 

 

$

-

 

 

$

-

 

 

$

735,836

 

Classified

 

 

165

 

 

 

85

 

 

 

134

 

 

 

137

 

 

 

120

 

 

 

88

 

 

 

-

 

 

 

-

 

 

 

729

 

Total Automobile

 

$

301,450

 

 

$

152,107

 

 

$

139,021

 

 

$

91,548

 

 

$

33,388

 

 

$

19,051

 

 

$

-

 

 

$

-

 

 

$

736,565

 

Other 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

172,735

 

 

$

49,769

 

 

$

92,983

 

 

$

44,489

 

 

$

16,218

 

 

$

6,444

 

 

$

25,622

 

 

$

1,444

 

 

$

409,704

 

Classified

 

 

39

 

 

 

90

 

 

 

183

 

 

 

47

 

 

 

27

 

 

 

17

 

 

 

22

 

 

 

-

 

 

 

425

 

Total Other

 

$

172,774

 

 

$

49,859

 

 

$

93,166

 

 

$

44,536

 

 

$

16,245

 

 

$

6,461

 

 

$

25,644

 

 

$

1,444

 

 

$

410,129

 

Total Consumer

 

$

1,866,561

 

 

$

1,333,296

 

 

$

600,006

 

 

$

313,299

 

 

$

307,363

 

 

$

1,011,727

 

 

$

1,823,400

 

 

$

37,232

 

 

$

7,292,884

 

Total Loans and Leases

 

$

3,541,779

 

 

$

2,603,519

 

 

$

1,074,467

 

 

$

686,064

 

 

$

516,150

 

 

$

1,619,114

 

 

$

2,180,226

 

 

$

37,757

 

 

$

12,259,076

 

 

1

Certain prior period information has been reclassified to conform to current presentations.

2

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

For the year ended December 31, 2021, $4.1 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 September 30, 2022, and December 31, 2021.

 

(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 September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

132

 

 

$

75

 

 

$

—

 

 

$

49

 

 

$

256

 

 

$

1,368,710

 

 

$

1,368,966

 

 

$

49

 

Paycheck Protection Program

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

22,955

 

 

 

22,955

 

 

 

—

 

Commercial Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,396

 

 

 

3,396

 

 

 

3,588,547

 

 

 

3,591,943

 

 

 

3,396

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

236,498

 

 

 

236,498

 

 

 

—

 

Lease Financing

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

73,989

 

 

 

73,989

 

 

 

—

 

Total Commercial

 

 

132

 

 

 

75

 

 

 

—

 

 

 

3,445

 

 

 

3,652

 

 

 

5,290,699

 

 

 

5,294,351

 

 

 

3,445

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

1,693

 

 

 

888

 

 

 

3,279

 

 

 

4,945

 

 

 

10,805

 

 

 

4,574,918

 

 

 

4,585,723

 

 

 

878

 

Home Equity

 

 

1,772

 

 

 

643

 

 

 

1,061

 

 

 

4,438

 

 

 

7,914

 

 

 

2,177,570

 

 

 

2,185,484

 

 

 

896

 

Automobile

 

 

9,498

 

 

 

1,374

 

 

 

467

 

 

 

—

 

 

 

11,339

 

 

 

809,301

 

 

 

820,640

 

 

 

—

 

Other 1

 

 

1,829

 

 

 

775

 

 

 

513

 

 

 

—

 

 

 

3,117

 

 

 

432,291

 

 

 

435,408

 

 

 

—

 

Total Consumer

 

 

14,792

 

 

 

3,680

 

 

 

5,320

 

 

 

9,383

 

 

 

33,175

 

 

 

7,994,080

 

 

 

8,027,255

 

 

 

1,774

 

Total

 

$

14,924

 

 

$

3,755

 

 

$

5,320

 

 

$

12,828

 

 

$

36,827

 

 

$

13,284,779

 

 

$

13,321,606

 

 

$

5,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

2,006

 

 

$

14

 

 

$

—

 

 

$

243

 

 

$

2,263

 

 

$

1,359,658

 

 

$

1,361,921

 

 

$

151

 

Paycheck Protection Program

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

126,779

 

 

 

126,779

 

 

 

—

 

Commercial Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8,205

 

 

 

8,205

 

 

 

3,143,925

 

 

 

3,152,130

 

 

 

8,205

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

220,254

 

 

 

220,254

 

 

 

—

 

Lease Financing

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

105,108

 

 

 

105,108

 

 

 

—

 

Total Commercial

 

 

2,006

 

 

 

14

 

 

 

—

 

 

 

8,448

 

 

 

10,468

 

 

 

4,955,724

 

 

 

4,966,192

 

 

 

8,356

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

2,046

 

 

 

1,263

 

 

 

3,159

 

 

 

3,305

 

 

 

9,773

 

 

 

4,299,829

 

 

 

4,309,602

 

 

 

—

 

Home Equity

 

 

1,791

 

 

 

748

 

 

 

3,456

 

 

 

4,881

 

 

 

10,876

 

 

 

1,825,712

 

 

 

1,836,588

 

 

 

1,544

 

Automobile

 

 

7,804

 

 

 

1,495

 

 

 

729

 

 

 

—

 

 

 

10,028

 

 

 

726,537

 

 

 

736,565

 

 

 

—

 

Other 1

 

 

2,686

 

 

 

904

 

 

 

426

 

 

 

—

 

 

 

4,016

 

 

 

406,113

 

 

 

410,129

 

 

 

—

 

Total Consumer

 

 

14,327

 

 

 

4,410

 

 

 

7,770

 

 

 

8,186

 

 

 

34,693

 

 

 

7,258,191

 

 

 

7,292,884

 

 

 

1,544

 

Total

 

$

16,333

 

 

$

4,424

 

 

$

7,770

 

 

$

16,634

 

 

$

45,161

 

 

$

12,213,915

 

 

$

12,259,076

 

 

$

9,900

 

 

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 September 30, 2022, and December 31, 2021.

 

 

 

September 30, 2022

 

 

December 31, 2021

 

(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

 

$

49

 

 

$

—

 

 

$

49

 

 

$

243

 

 

$

—

 

 

$

243

 

Commercial Mortgage

 

 

—

 

 

 

3,396

 

 

 

3,396

 

 

 

4,661

 

 

 

3,544

 

 

 

8,205

 

Total Commercial

 

 

49

 

 

 

3,396

 

 

 

3,445

 

 

 

4,904

 

 

 

3,544

 

 

 

8,448

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

4,869

 

 

 

76

 

 

 

4,945

 

 

 

2,959

 

 

 

346

 

 

 

3,305

 

Home Equity

 

 

4,438

 

 

 

—

 

 

 

4,438

 

 

 

4,881

 

 

 

—

 

 

 

4,881

 

Total Consumer

 

 

9,307

 

 

 

76

 

 

 

9,383

 

 

 

7,840

 

 

 

346

 

 

 

8,186

 

Total

 

$

9,356

 

 

$

3,472

 

 

$

12,828

 

 

$

12,744

 

 

$

3,890

 

 

$

16,634

 

 

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.

Modifications

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider.  Loans modified in a TDR were $48.3 million as of September 30, 2022, and $70.0 million as of December 31, 2021.  There were $0.1 million and $0.2 million commitments to lend additional funds on loans modified in a TDR as of September 30, 2022, and December 31, 2021, respectively.

Loans modified in a TDR may be on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance.  As a result, loans modified in a TDR may have the financial effect of reducing the specific Allowance associated with the loan because the potential loss has been recognized.  An Allowance for impaired commercial and consumer loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent.  Management exercises significant judgment in developing these estimates.

The following presents by class, information related to loans modified in a TDR during the three and nine months ended September 30, 2022, and September 30, 2021.

 

 

 

Loans Modified as a TDR for the

Three Months Ended September 30, 2022

 

 

Loans Modified as a TDR for the

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

Recorded

 

 

Increase in

 

 

 

 

 

 

Recorded

 

 

Increase in

 

Troubled Debt Restructurings

 

 

 

 

 

Investment

 

 

Allowance

 

 

 

 

 

 

Investment

 

 

Allowance

 

(dollars in thousands)

 

Number of Contracts

 

 

(as of period end)1

 

 

(as of period end)

 

 

Number of Contracts

 

 

(as of period end)1

 

 

(as of period end)

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

1

 

 

$

213

 

 

$

16

 

 

 

2

 

 

$

153

 

 

$

2

 

Total Commercial

 

 

1

 

 

 

213

 

 

 

16

 

 

 

2

 

 

 

153

 

 

 

2

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

796

 

 

 

21

 

Home Equity

 

 

1

 

 

 

197

 

 

 

—

 

 

 

2

 

 

 

779

 

 

 

46

 

Automobile

 

 

40

 

 

 

793

 

 

 

11

 

 

 

71

 

 

 

1,632

 

 

 

22

 

Other 2

 

 

10

 

 

 

57

 

 

 

2

 

 

 

51

 

 

 

439

 

 

 

16

 

Total Consumer

 

 

51

 

 

 

1,047

 

 

 

13

 

 

 

126

 

 

 

3,646

 

 

 

105

 

Total

 

 

52

 

 

$

1,260

 

 

$

29

 

 

 

128

 

 

$

3,799

 

 

$

107

 

 

 

 

 

Loans Modified as a TDR for the

Nine Months Ended September 30, 2022

 

 

Loans Modified as a TDR for the

Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

Recorded

 

 

Increase in

 

 

 

 

 

 

Recorded

 

 

Increase in

 

Troubled Debt Restructurings

 

 

 

 

 

Investment

 

 

Allowance

 

 

 

 

 

 

Investment

 

 

Allowance

 

(dollars in thousands)

 

Number of Contracts

 

 

(as of period end)1

 

 

(as of period end)

 

 

Number of Contracts

 

 

(as of period end)1

 

 

(as of period end)

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

1

 

 

$

213

 

 

$

16

 

 

 

7

 

 

$

258

 

 

$

4

 

Total Commercial

 

 

1

 

 

 

213

 

 

 

16

 

 

 

7

 

 

 

258

 

 

 

4

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

5

 

 

 

1,205

 

 

 

71

 

 

 

14

 

 

 

5,785

 

 

 

584

 

Home Equity

 

 

3

 

 

 

282

 

 

 

5

 

 

 

9

 

 

 

1,488

 

 

 

80

 

Automobile 2

 

 

93

 

 

 

1,807

 

 

 

24

 

 

 

331

 

 

 

6,902

 

 

 

95

 

Other 2,3

 

 

39

 

 

 

254

 

 

 

9

 

 

 

144

 

 

 

1,321

 

 

 

48

 

Total Consumer

 

 

140

 

 

 

3,548

 

 

 

109

 

 

 

498

 

 

 

15,496

 

 

 

807

 

Total

 

 

141

 

 

$

3,761

 

 

$

125

 

 

 

505

 

 

$

15,754

 

 

$

811

 

1

The period end balances reflect all paydowns and charge-offs since the modification date.  TDRs fully paid-off, charged-off, or foreclosed upon by period end are not included.

2

Comprised of other revolving credit and installment financing.

 

The following presents by class, all loans modified in a TDR that defaulted during the three and nine months ended September 30, 2022, and September 30, 2021, and within twelve months of their modification date.  A TDR is considered to be in default once it becomes 60 days or more past due following a modification.

 

 

 

Three Months Ended September 30, 2022

 

 

Three Months Ended September 30, 2021

 

TDRs that Defaulted During the Period,

 

 

 

 

 

Recorded

 

 

 

 

 

 

Recorded

 

Within Twelve Months of their Modification Date

 

Number of

 

 

Investment

 

 

Number of

 

 

Investment

 

(dollars in thousands)

 

Contracts

 

 

(as of period end)1

 

 

Contracts

 

 

(as of period end)1

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automobile

 

 

5

 

 

$

61

 

 

 

8

 

 

$

157

 

Other 2

 

 

4

 

 

 

27

 

 

 

5

 

 

 

27

 

Total Consumer

 

 

9

 

 

 

88

 

 

 

13

 

 

 

184

 

Total

 

 

9

 

 

$

88

 

 

 

13

 

 

$

184

 

 

 

 

Nine Months Ended September 30, 2022

 

 

Nine Months Ended September 30, 2021

 

TDRs that Defaulted During the Period,

 

 

 

 

 

Recorded

 

 

 

 

 

 

Recorded

 

Within Twelve Months of their Modification Date

 

Number of

 

 

Investment

 

 

Number of

 

 

Investment

 

(dollars in thousands)

 

Contracts

 

 

(as of period end)1

 

 

Contracts

 

 

(as of period end)1

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

1

 

 

$

181

 

 

 

1

 

 

$

528

 

Home Equity

 

 

1

 

 

 

65

 

 

 

—

 

 

 

—

 

Automobile

 

 

14

 

 

 

228

 

 

 

12

 

 

 

213

 

Other 2

 

 

13

 

 

 

92

 

 

 

12

 

 

 

112

 

Total Consumer

 

 

29

 

 

 

566

 

 

 

25

 

 

 

853

 

Total

 

 

29

 

 

$

566

 

 

 

25

 

 

$

853

 

1

The period end balances reflect all paydowns and charge-offs since the modification date.  TDRs fully paid-off, charged-off, or foreclosed upon by period end are not included.

2

Comprised of other revolving credit and installment financing.

Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default.  If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment.  The specific Allowance associated with the loan may be changed by additional increases, adjustments, or partial charge-offs to further write-down the carrying value of the loan.

In accordance with Section 4013 of the CARES Act and the joint agency statement issued by banking agencies, certain qualified loan and lease modifications related to the COVID-19 pandemic are not accounted for as TDRs.  There were no loan and lease modifications as of September 30, 2022, and $40.5 million (8 loans) for the commercial segment and $3.1 million (11 loans) for the consumer segment as of December 31, 2021.

Foreclosure Proceedings

Consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure totaled $6.6 million as of September 30, 2022.