Allowance for Credit Losses (ACL)

6 Months Ended

Jun. 30, 2022

Allowance for Credit Losses (ACL)

Allowance for Credit Losses (ACL)

Note 7 — Allowance for Credit Losses (ACL)

See Note 2 - Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q for further detailed descriptions of our estimation process and methodology related to the allowance for credit losses.

The following tables present a disaggregated analysis of activity in the allowance for credit losses.

	Residential		Residential				Residential		Other								CRE Owner		Non-Owner
(Dollars in thousands)	Mortgage Sr.		Mortgage Jr.		HELOC		Construction		C&D		Consumer		Multifamily		Municipal		Occupied		Occupied CRE		C & I		Total
Three Months Ended June 30, 2022
Allowance for credit losses:
Balance at end of period March 31, 2022	$	46,002	$	586	$	13,671	$	5,616	$	25,358	$	21,899	$	3,903	$	607	$	49,094	$	96,360	$	37,300	$	300,396
Allowance Adjustment - FMV for ACBI merger		727		—		—		—		—		—		—		—		930		—		2,883		4,540
Adjusted CECL balance	$	46,729	$	586	$	13,671	$	5,616	$	25,358	$	21,899	$	3,903	$	607	$	50,024	$	96,360	$	40,183	$	304,936
Charge-offs		(61)		—		(203)		—		—		(2,124)		—		—		(78)		(360)		(3,337)		(6,163)
Recoveries		361		110		395		2		410		660		—		—		94		304		1,488		3,824
Net (charge offs) recoveries		300		110		192		2		410		(1,464)		—		—		16		(56)		(1,849)		(2,339)
(Recovery) provision (1)		8,678		(163)		3,055		1,947		1,962		4,317		(1,445)		96		14,648		(11,135)		(4,849)		17,111
Balance at end of period June 30, 2022	$	55,707	$	533	$	16,918	$	7,565	$	27,730	$	24,752	$	2,458	$	703	$	64,688	$	85,169	$	33,485	$	319,708
Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	55,203	$	533	$	13,488	$	7,565	$	21,572	$	24,752	$	2,458	$	703	$	42,294	$	63,666	$	26,203	$	258,437
Individually evaluated		479		—		3,418		—		865		—		—		—		5,588		140		6,442		16,932
Total quantitative allowance		55,682		533		16,906		7,565		22,437		24,752		2,458		703		47,882		63,806		32,645		275,369
Qualitative allowance		25		—		12		—		5,293		—		—		—		16,806		21,363		840		44,339
Balance at end of period June 30, 2022	$	55,707	$	533	$	16,918	$	7,565	$	27,730	$	24,752	$	2,458	$	703	$	64,688	$	85,169	$	33,485	$	319,708
Three Months Ended June 30, 2021
Allowance for loan losses:
Balance at end of period December 31, 2020	$	63,042	$	1,190	$	16,003	$	3,892	$	55,337	$	27,883	$	5,884	$	1,544	$	90,660	$	107,559	$	33,466	$	406,460
Charge-offs		(69)		—		(517)		—		(77)		(1,486)		—		—		(2,021)		(341)		(1,151)		(5,662)
Recoveries		343		50		766		—		229		531		3		—		131		411		1,084		3,548
Net (charge offs) recoveries		274		50		249		—		152		(955)		3		—		(1,890)		70		(67)		(2,114)
Provision (recovery) (1)		(7,496)		(415)		(1,702)		596		(10,001)		(1,231)		(4)		(481)		(13,278)		(17,225)		(2,708)		(53,945)
Balance at end of period June 30, 2021	$	55,820	$	825	$	14,550	$	4,488	$	45,488	$	25,697	$	5,883	$	1,063	$	75,492	$	90,404	$	30,691	$	350,401
Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	50,424	$	825	$	12,350	$	4,438	$	45,472	$	21,195	$	5,883	$	520	$	72,212	$	85,044	$	25,195	$	323,558
Individually evaluated		88		—		1,140		—		16		—		—		—		333		—		308		1,885
Total quantitative allowance		50,512		825		13,490		4,438		45,488		21,195		5,883		520		72,545		85,044		25,503		325,443
Qualitative allowance		5,308		—		1,060		50		—		4,502		—		543		2,947		5,360		5,188		24,958
Balance at end of period June 30, 2021	$	55,820	$	825	$	14,550	$	4,488	$	45,488	$	25,697	$	5,883	$	1,063	$	75,492	$	90,404	$	30,691	$	350,401

(1) A provision for credit losses of $2.2 million was recorded during the second quarter of 2022, compared to a negative provision (recovery) for credit losses of $4.8 million recorded during the second quarter of 2021 for the allowance for credit losses for unfunded commitments that is not included in the above table.

	Residential		Residential				Residential		Other								CRE Owner		Non Owner
(Dollars in thousands)	Mortgage Sr.		Mortgage Jr.		HELOC		Construction		C&D		Consumer		Multifamily		Municipal		Occupied		Occupied CRE		C & I		Total
Six Months Ended June 30, 2022
Allowance for credit losses:
Balance at end of period December 31, 2021	$	47,036	$	611	$	13,325	$	4,997	$	37,593	$	23,149	$	4,921	$	565	$	61,794	$	79,649	$	28,167	$	301,807
Initial Allowance for PCD loans acquired during period		811		—		—		—		86		—		—		—		2,409		—		10,452		13,758
Initial Allowance for Non PCD loans acquired during period		352		26		132		2		1,887		51		426		—		2,519		2,697		5,605		13,697
Charge-offs		(119)		(19)		(421)		—		(4)		(4,785)		—		—		(449)		(360)		(5,496)		(11,653)
Recoveries		755		165		652		5		644		1,192		—		—		408		373		2,797		6,991
Net recoveries (charge offs)		636		146		231		5		640		(3,593)		—		—		(41)		13		(2,699)		(4,662)
Provision (benefit) (1)		6,872		(250)		3,230		2,561		(12,476)		5,145		(2,889)		138		(1,993)		2,810		(8,040)		(4,892)
Balance at end of period June 30, 2022	$	55,707	$	533	$	16,918	$	7,565	$	27,730	$	24,752	$	2,458	$	703	$	64,688	$	85,169	$	33,485	$	319,708
Six Months Ended June 30, 2021
Allowance for credit losses:
Balance at end of period December 31, 2020	$	63,561	$	1,238	$	16,698	$	4,914	$	67,197	$	26,562	$	7,887	$	1,510	$	97,104	$	124,421	$	46,217	$	457,309
Charge-offs		(189)		—		(686)		—		(87)		(3,635)		—		—		(2,048)		(535)		(1,856)		(9,036)
Recoveries		771		83		1,183		1		430		1,041		3		—		464		732		2,235		6,943
Net charge offs		582		83		497		1		343		(2,594)		3		—		(1,584)		197		379		(2,093)
Provision (benefit) (1)		(8,323)		(496)		(2,645)		(427)		(22,052)		1,729		(2,007)		(447)		(20,028)		(34,214)		(15,905)		(104,815)
Balance at end of period June 30, 2021	$	55,820	$	825	$	14,550	$	4,488	$	45,488	$	25,697	$	5,883	$	1,063	$	75,492	$	90,404	$	30,691	$	350,401

(1) A provision for credit losses of $2.0 million was recorded during the first six months of 2022, compared to a negative provision (recovery) for credit losses of $12.4 million during the first six months of 2021 for the allowance for credit losses for unfunded commitments that is not included in the above table.