Allowance for Credit Losses (ACL)

9 Months Ended

Sep. 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 September 30, 2022
Allowance for credit losses:
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
Charge-offs		(50)		—		(23)		—		—		(2,742)		—		—		(1,353)		(8)		(2,950)		(7,126)
Recoveries		376		30		3,151		2		280		573		—		—		569		29		3,378		8,388
Net (charge offs) recoveries		326		30		3,128		2		280		(2,169)		—		—		(784)		21		428		1,262
(Recovery) provision (1)		11,987		(40)		(3,980)		763		3,798		4,221		666		(1)		(9,745)		(8,937)		4,696		3,428
Balance at end of period September 30, 2022	$	68,020	$	523	$	16,066	$	8,330	$	31,808	$	26,804	$	3,124	$	702	$	54,159	$	76,253	$	38,609	$	324,398
Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	67,765	$	523	$	13,402	$	8,330	$	31,524	$	26,804	$	3,124	$	702	$	46,443	$	74,978	$	35,650	$	309,245
Individually evaluated		233		—		2,654		—		284		—		—		—		7,102		765		2,240		13,278
Total quantitative allowance		67,998		523		16,056		8,330		31,808		26,804		3,124		702		53,545		75,743		37,890		322,523
Qualitative allowance		22		—		10		—		—		—		—		—		614		510		719		1,875
Balance at end of period September 30, 2022	$	68,020	$	523	$	16,066	$	8,330	$	31,808	$	26,804	$	3,124	$	702	$	54,159	$	76,253	$	38,609	$	324,398
Three Months Ended September 30, 2021
Allowance for loan losses:
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
Charge-offs		(15)		—		(149)		—		—		(2,366)		—		—		(4)		(241)		(1,072)		(3,847)
Recoveries		332		48		720		2		748		577		—		—		332		173		869		3,801
Net (charge offs) recoveries		317		48		571		2		748		(1,789)		—		—		328		(68)		(203)		(46)
Provision (recovery) (1)		(4,587)		(174)		(204)		295		(10,337)		332		(1,299)		(554)		(10,611)		(7,458)		(1,614)		(36,211)
Balance at end of period September 30, 2021	$	51,550	$	699	$	14,917	$	4,785	$	35,899	$	24,240	$	4,584	$	509	$	65,209	$	82,878	$	28,874	$	314,144
Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	48,411	$	699	$	13,307	$	4,756	$	35,893	$	21,509	$	4,584	$	509	$	62,969	$	79,302	$	25,789	$	297,728
Individually evaluated		77		—		959		—		6		—		—		—		377		—		307		1,726
Total quantitative allowance		48,488		699		14,266		4,756		35,899		21,509		4,584		509		63,346		79,302		26,096		299,454
Qualitative allowance		3,062		—		651		29		—		2,731		—		—		1,863		3,576		2,778		14,690
Balance at end of period September 30, 2021	$	51,550	$	699	$	14,917	$	4,785	$	35,899	$	24,240	$	4,584	$	509	$	65,209	$	82,878	$	28,874	$	314,144

(1) A provision for credit losses of $20.0 million was recorded during the third quarter of 2022, compared to a negative provision (recovery) for credit losses of $(2.7) million recorded during the third 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
Nine Months Ended September 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		(169)		(19)		(444)		—		(4)		(7,527)		—		—		(1,802)		(368)		(8,446)		(18,779)
Recoveries		1,131		195		3,803		7		924		1,765		—		—		977		402		6,175		15,379
Net recoveries (charge offs)		962		176		3,359		7		920		(5,762)		—		—		(825)		34		(2,271)		(3,400)
Provision (benefit) (1)		18,859		(290)		(750)		3,324		(8,678)		9,366		(2,223)		137		(11,738)		(6,127)		(3,344)		(1,464)
Balance at end of period September 30, 2022	$	68,020	$	523	$	16,066	$	8,330	$	31,808	$	26,804	$	3,124	$	702	$	54,159	$	76,253	$	38,609	$	324,398
Nine Months Ended September 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		(204)		—		(835)		—		(87)		(6,001)		—		—		(2,052)		(776)		(2,928)		(12,883)
Recoveries		1,103		131		1,903		3		1,178		1,618		3		—		796		905		3,104		10,744
Net charge offs		899		131		1,068		3		1,091		(4,383)		3		—		(1,256)		129		176		(2,139)
Provision (benefit) (1)		(12,910)		(670)		(2,849)		(132)		(32,389)		2,061		(3,306)		(1,001)		(30,639)		(41,672)		(17,519)		(141,026)
Balance at end of period September 30, 2021	$	51,550	$	699	$	14,917	$	4,785	$	35,899	$	24,240	$	4,584	$	509	$	65,209	$	82,878	$	28,874	$	314,144

(1) A provision for credit losses of $22.5 million was recorded during the first nine months of 2022, compared to a negative provision (recovery) for credit losses of $(15.1) million during the first nine months of 2021 for the allowance for credit losses for unfunded commitments that is not included in the above table.