Allowance for Credit Losses (ACL)

9 Months Ended

Sep. 30, 2023

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		Comm Constr.								CRE Owner		Non-Owner
(Dollars in thousands)	Mortgage Sr.		Mortgage Jr.		HELOC		Construction		& Dev.		Consumer		Multifamily		Municipal		Occupied		Occupied CRE		C & I		Total
Three Months Ended September 30, 2023
Allowance for credit losses:
Balance at end of period June 30, 2023	$	81,469	$	392	$	14,212	$	8,869	$	55,314	$	24,577	$	9,767	$	745	$	70,759	$	115,269	$	46,019	$	427,392
Charge-offs		(57)		—		(88)		—		(8)		(3,129)		—		—		(91)		—		(14,597)		(17,970)
Recoveries		240		28		226		3		67		651		—		—		415		511		2,632		4,773
Net (charge offs) recoveries		183		28		138		3		59		(2,478)		—		—		324		511		(11,965)		(13,197)
Provision (recovery) (1)		(4,601)		74		(1,036)		(1,643)		9,099		656		2,825		56		1,932		8,749		17,650		33,761
Balance at end of period September 30, 2023	$	77,051	$	494	$	13,314	$	7,229	$	64,472	$	22,755	$	12,592	$	801	$	73,015	$	124,529	$	51,704	$	447,956
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
Provision (recovery) (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

(1) A negative provision for credit losses of $1.1 million was recorded during the third quarter of 2023, compared to a provision for credit losses of $20.0 million recorded during the third quarter of 2022 for the allowance for credit losses for unfunded commitments that is not included in the above table.

	Residential		Residential				Residential		Comm Constr.								CRE Owner		Non Owner
(Dollars in thousands)	Mortgage Sr.		Mortgage Jr.		HELOC		Construction		& Dev.		Consumer		Multifamily		Municipal		Occupied		Occupied CRE		C & I		Total
Nine Months Ended September 30, 2023
Allowance for credit losses:
Balance at end of period December 31, 2022	$	72,188	$	405	$	14,886	$	8,974	$	45,410	$	22,767	$	3,684	$	849	$	58,083	$	78,485	$	50,713	$	356,444
Charge-offs		(96)		—		(127)		—		(10)		(8,875)		—		—		(126)		(51)		(20,890)		(30,175)
Recoveries		836		36		1,003		97		523		1,755		—		—		801		951		6,628		12,630
Net (charge offs) recoveries		740		36		876		97		513		(7,120)		—		—		675		900		(14,262)		(17,545)
Provision (benefit) (1)		4,123		53		(2,448)		(1,842)		18,549		7,108		8,908		(48)		14,257		45,144		15,253		109,057
Balance at end of period September 30, 2023	$	77,051	$	494	$	13,314	$	7,229	$	64,472	$	22,755	$	12,592	$	801	$	73,015	$	124,529	$	51,704	$	447,956
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 (charge offs) recoveries		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

(1) A negative provision for credit losses of $4.9 million was recorded during the first nine months of 2023, compared to a provision for credit losses of $22.5 million during the first nine months of 2022 for the allowance for credit losses for unfunded commitments that is not included in the above table.