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Allowance for Credit Losses and Credit Quality of Loans
 6 Months Ended
Jun. 30, 2024
Allowance for Credit Losses and Credit Quality of Loans [Abstract]  
Allowance for Credit Losses and Credit Quality of Loans
6.
Allowance for Credit Losses and Credit Quality of Loans

The allowance for credit losses totaled $120.5 million at June 30, 2024, compared to $114.4 million at December 31, 2023. The allowance for credit losses as a percentage of loans was 1.22% at June 30, 2024, compared to 1.19% at December 31, 2023.

The allowance for credit losses calculation incorporated a 6-quarter forecast period to account for forecast economic conditions under each scenario utilized in the measurement. For periods beyond the 6-quarter forecast, the model reverts to long-term economic conditions over a 4-quarter reversion period on a straight-line basis. The Company considers a baseline, upside and downside economic forecast in measuring the allowance.

The quantitative model as of June 30, 2024 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model. At June 30, 2024, the weightings were 80% and 20% for the baseline and downside economic forecasts, respectively. The baseline outlook reflects an economic environment where the Northeast unemployment rate increases slightly from 4.0% to 4.1% during the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) is expected to start the third quarter of 2024 at approximately 3.7% and increase slightly to 3.8% before the end of the forecast period. Key assumptions in the baseline economic outlook included the Federal Reserve cutting rates with two 25 basis point cuts at the September and December meetings, the economy remaining at full employment, and continued tapering of the Federal Reserve balance sheet. The alternative downside scenario assumed deteriorated economic conditions from the baseline outlook. Under this scenario, Northeast unemployment rises from 4.0% in the second quarter of 2024 to a peak of 7.2% in the fourth quarter of 2025. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of June 30, 2024. Additional adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, considerations for inflation, and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth, and policy exceptions was also conducted.

The methodology for prepayment assumptions was revised during the second quarter of 2024 from a static, current rate experience approach to one that includes both current experience and long-term average behavior. The change to the methodology increased the allowance for loan losses by approximately 3% as of June 30, 2024. The longer-average effective life portfolios such as the residential mortgage and residential solar segments experienced a greater impact resulting from the change in methodology. The change in prepayment methodology provided an improved estimate of expected prepayments, particularly for the longer-lived portfolios.

The quantitative model as of March 31, 2024 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model. At March 31, 2024, the weightings were 70% and 30% for the baseline and downside economic forecasts, respectively. The baseline outlook reflected an economic environment where the unemployment rate increases slightly from 3.8% to 4.1% during the forecast period. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the second quarter of 2024 at approximately 3.3% and decrease to 2.8% before increasing to 3.4% by the end of the forecast period. Key assumptions in the baseline economic outlook included the Federal Reserve cutting rates with three 25 basis point cuts at the June, September, and December meetings, the economy remaining at full employment, and continued tapering of the Federal Reserve balance sheet. The alternative downside scenario assumed deteriorated economic conditions from the baseline outlook. Under this scenario, national unemployment rises from 3.8% in the first quarter of 2024 to a peak of 7.7% in the second quarter of 2025. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of March 31, 2024. Additional adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, considerations for inflation, and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth, and policy exceptions was also conducted.

The quantitative model as of December 31, 2023 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model. At December 31, 2023, the weightings were 70% and 30% for the baseline and downside economic forecasts, respectively. The baseline outlook reflected an unemployment rate environment starting at 3.8% and increasing slightly during the forecast period to 4.1%. Northeast GDP’s annualized growth (on a quarterly basis) was expected to start the first quarter of 2024 at approximately 3.7% before decreasing to a low of 2.9% in the third quarter of 2024 and then increasing to 3.8% by the end of the forecast period. Other utilized economic variable forecasts are mixed compared to the prior year, with retail sales improving, business output mixed and housing starts down. Key assumptions in the baseline economic outlook included currently being in a full employment economy, continued tapering of the Federal Reserve balance sheet and the FOMC beginning to cut rates in the second quarter of 2024. The alternative downside scenario assumed deteriorated economic conditions from the baseline outlook. Under this scenario, Northeast unemployment increases to a peak of 7.0% in the first quarter of 2025. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of December 31, 2023. Additional qualitative adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, considerations for inflation and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth and policy exceptions was also conducted.

There were no loans purchased with credit deterioration during the six months ended June 30, 2024. There were $219.5 million of PCD loans acquired from Salisbury during the year ended December 31, 2023, which resulted in an allowance for credit losses at acquisition of $5.8 million. During the six months ended June 30, 2024, the Company purchased $0.4 million of residential loans at a 7.0% premium with a $4 thousand allowance for credit losses recorded for these loans. During 2023, the Company purchased $3.8 million of residential loans at a 7.0% premium with a $31 thousand allowance for credit losses recorded for these loans.

The Company made a policy election to report AIR in the other assets line item on the consolidated balance sheets. AIR on loans totaled $36.0 million at June 30, 2024 and $34.1 million at December 31, 2023 and there was no estimated allowance for credit losses related to AIR as of June 30, 2024 and December 31, 2023 as it is excluded from amortized cost.

The Company’s January 1, 2023 adoption of ASU 2022-02, Financial Instruments - CECL Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures resulted in an insignificant change to its methodology for estimating the allowance for credit losses on TDRs. The ASU eliminated the guidance on TDRs and requires an evaluation on all loan modifications to determine if they result in a new loan or a continuation of the existing loan. The decrease in allowance for credit loss on TDR loans relating to adoption of ASU 2022-02 was $0.6 million.

The following tables present the activity in the allowance for credit losses by our portfolio segments:

(In thousands)
  
Commercial
Loans
    
Consumer
Loans
    
Residential
    
Total
  
Balance as of March 31, 2024
  
$
44,472
    
$
47,419
    
$
23,409
    
$
115,300
  
Charge-offs
    
(299
)
    
(5,328
)
    
-
   
(5,627
)
Recoveries
    
292
      
1,559
      
77
      
1,928
  
Provision
    
2,243
      
4,268
      
2,388
      
8,899
  
Ending balance as of June 30, 2024
  
$
46,708
    
$
47,918
    
$
25,874
    
$
120,500
  
                                 
Balance as of March 31, 2023
  
$
36,040
    
$
48,820
    
$
15,390
    
$
100,250
  
Charge-offs
    
(207
)
    
(4,837
)
    
(105
)
    
(5,149
)
Recoveries
    
97
      
1,441
      
155
      
1,693
  
Provision
    
1,033
   
2,459
      
114
   
3,606
  
Ending balance as of June 30, 2023
  
$
36,963
    
$
47,883
    
$
15,554
    
$
100,400
  

(In thousands)
  
Commercial
Loans
    
Consumer
Loans
    
Residential
    
Total
  
Balance as of December 31, 2023
 
$
45,903
    
$
46,427
    
$
22,070
    
$
114,400
  
Charge-offs
    
(1,284
)
    
(10,909
)
    
(114
)
    
(12,307
)
Recoveries
    
490
      
3,210
      
229
      
3,929
  
Provision
    
1,599
      
9,190
      
3,689
      
14,478
  
Ending balance as of June 30, 2024
  
$
46,708
    
$
47,918
    
$
25,874
    
$
120,500
  
                                 
Balance as of January 1, 2023 (after adoption of ASU 2022-02)
  
$
34,662
    
$
50,951
    
$
14,539
    
$
100,152
  
Charge-offs
    
(376
)
    
(10,179
)
    
(444
)
    
(10,999
)
Recoveries
    
638
      
2,818
      
276
      
3,732
  
Provision
    
2,039
      
4,293
      
1,183
   
7,515
  
Ending balance as of June 30, 2023
  
$
36,963
    
$
47,883
    
$
15,554
    
$
100,400
  

The allowance for credit losses as of June 30, 2024 increased compared to the allowance estimates as of December 31, 2023 and March 31, 2024 primarily due to providing for the second quarter’s loan growth, the slowing of prepayment speed assumptions, including the changes in prepayment model assumptions and an additional specific reserve established relating to a commercial relationship individually evaluated for credit loss, partly offset by a change in forecast scenario weightings from 70% baseline and 30% downside to 80% baseline and 20% downside. The increase in the allowance for credit losses from June 30, 2023 to June 30, 2024 was primarily due to providing for loan growth, slowing of prepayment speed assumptions and the recording of $14.5 million of allowance for acquired Salisbury loans as of the acquisition date, which included both the $8.8 million of non-PCD allowance recognized through the provision for loan losses and the $5.8 million of PCD allowance reclassified from loans.

Individually Evaluated Loans

The threshold for evaluating classified, commercial and commercial real estate loans risk graded substandard or doubtful, and nonperforming loans individually evaluated for credit loss is $1.0 million. As of June 30, 2024, there were two relationships identified to be evaluated for loss on an individual basis which had an amortized cost basis of $17.1 million, with $1.7 million of allowance for credit loss. As of December 31, 2023, the same two relationships were identified to be evaluated for loss on an individual basis which had an amortized cost basis of $17.3 million, with no allowance for credit loss. As of June 30, 2024 and December 31, 2023, there were $1.8 million and $17.3 million, respectively, of loans in nonaccrual status that were individually evaluated for expected credit loss without an allowance for credit losses.


The following table sets forth information with regard to past due and nonperforming loans by loan segment:

(In thousands)
  
31-60 Days
Past Due
Accruing
    
61-90 Days
Past Due
Accruing
    
Greater
Than
90 Days
Past Due
Accruing
    
Total
Past Due
Accruing
    
Nonaccrual
    
Current
    
Recorded
Total
Loans
  
As of June 30, 2024
                                          
Commercial loans:
                                          
C&I
  
$
929
    
$
1,149
    
$
12
    
$
2,090
    
$
2,586
    
$
1,454,003
    
$
1,458,679
  
CRE
    
790
      
238
      
-
      
1,028
      
18,357
      
3,534,517
      
3,553,902
  
Total commercial loans
  
$
1,719
    
$
1,387
    
$
12
    
$
3,118
    
$
20,943
    
$
4,988,520
    
$
5,012,581
  
Consumer loans:
                                                        
Auto
  
$
9,653
    
$
1,735
    
$
995
    
$
12,383
    
$
2,079
    
$
1,179,800
    
$
1,194,262
  
Residential solar
    4,038       1,356       1,043       6,437       122       855,324       861,883  
Other consumer
    
1,523
      
960
      
787
      
3,270
      
259
      
134,602
      
138,131
  
Total consumer loans
  
$
15,214
    
$
4,051
    
$
2,825
    
$
22,090
    
$
2,460
    
$
2,169,726
    
$
2,194,276
  
Residential
  
$
3,312
    
$
903
    
$
496
    
$
4,711
    
$
11,352
    
$
2,631,427
    
$
2,647,490
  
Total loans
  
$
20,245
    
$
6,341
    
$
3,333
    
$
29,919
    
$
34,755
    
$
9,789,673
    
$
9,854,347
  

(In thousands)
  
31-60 Days
Past Due
Accruing
    
61-90 Days
Past Due
Accruing
    
Greater
Than
90 Days
Past Due
Accruing
    
Total
Past Due
Accruing
    
Nonaccrual
    
Current
    
Recorded
Total
Loans
  
As of December 31, 2023
                                          
Commercial loans:
                                          
C&I
  
$
414
    
$
33
    
$
1
    
$
448
    
$
3,441
    
$
1,393,616
    
$
1,397,505
  
CRE
    
803
      
835
      
-
      
1,638
      
18,126
      
3,413,984
      
3,433,748
  
Total commercial loans
  
$
1,217
    
$
868
    
$
1
    
$
2,086
    
$
21,567
    
$
4,807,600
    
$
4,831,253
  
Consumer loans:
                                                        
Auto
  
$
10,115
    
$
2,011
    
$
1,067
    
$
13,193
    
$
2,106
    
$
1,084,143
    
$
1,099,442
  
Residential solar     3,074       1,301       915       5,290       245       912,220       917,755  
Other consumer
    
2,343
      
1,811
      
1,124
      
5,278
      
215
      
164,867
      
170,360
  
Total consumer loans
  
$
15,532
    
$
5,123
    
$
3,106
    
$
23,761
    
$
2,566
    
$
2,161,230
    
$
2,187,557
  
Residential
  
$
3,836
    
$
399
    
$
554
    
$
4,789
    
$
10,080
    
$
2,617,034
    
$
2,631,903
  
Total loans
  
$
20,585
    
$
6,390
    
$
3,661
    
$
30,636
    
$
34,213
    
$
9,585,864
    
$
9,650,713
  

Credit Quality Indicators

The Company has developed an internal loan grading system to evaluate and quantify the Company’s loan portfolio with respect to quality and risk. The system focuses on, among other things, financial strength of borrowers, experience and depth of borrower’s management, primary and secondary sources of repayment, payment history, nature of the business and outlook on particular industries. The internal grading system enables the Company to monitor the quality of the entire loan portfolio on a consistent basis and provide management with an early warning system, which facilitates recognition and response to problem loans and potential problem loans.

Commercial Grading System

For C&I and CRE loans, the Company uses a grading system that relies on quantifiable and measurable characteristics when available. This includes comparison of financial strength to available industry averages, comparison of transaction factors (loan terms and conditions) to loan policy and comparison of credit history to stated repayment terms and industry averages. Some grading factors are necessarily more subjective such as economic and industry factors, regulatory environment and management. C&I and CRE loans are graded Doubtful, Substandard, Special Mention and Pass.

Doubtful

A Doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as a loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on the new information. Nonaccrual treatment is required for Doubtful assets because of the high probability of loss.

Substandard

Substandard loans have a high probability of payment default or they have other well-defined weaknesses. They require more intensive supervision by bank management. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. For some Substandard loans, the likelihood of full collection of interest and principal may be in doubt and those loans should be placed on nonaccrual. Although Substandard assets in the aggregate will have a distinct potential for loss, an individual asset’s loss potential does not have to be distinct for the asset to be rated Substandard.

Special Mention

Special Mention loans have potential weaknesses that may, if not checked or corrected, weaken the asset or inadequately protect the Company’s position at some future date. These loans pose elevated risk, but their weakness does not yet justify a Substandard classification. Borrowers may be experiencing adverse operating trends (i.e., declining revenues or margins) or may be struggling with an ill-proportioned balance sheet (i.e., increasing inventory without an increase in sales, high leverage and/or tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a Special Mention rating. Although a Special Mention loan has a higher probability of default than a Pass asset, its default is not imminent.

Pass

Loans graded as Pass encompass all loans not graded as Doubtful, Substandard or Special Mention. Pass loans are in compliance with loan covenants and payments are generally made as agreed. Pass loans range from superior quality to fair quality. Pass loans also include any portion of a government guaranteed loan, including Paycheck Protection Program loans.

Consumer and Residential Grading System

Consumer and Residential loans are graded as either Nonperforming or Performing.

Nonperforming

Nonperforming loans are loans that are (1) over 90 days past due and interest is still accruing or (2) on nonaccrual status.

Performing


All loans not meeting any of the above criteria are considered Performing.
 
The following tables illustrate the Company’s credit quality by loan class by vintage and includes gross charge-offs by loan class by vintage. Included in other consumer gross charge-offs for the six months ended June 30, 2024, the Company recorded $0.2 million in overdrawn deposit accounts reported as 2023 originations and $0.2 million in overdrawn deposit accounts reported as 2024 originations. Included in other consumer gross charge-offs for the year ended December 31, 2023, the Company recorded $0.2 million in overdrawn deposit accounts reported as 2022 originations and $0.8 million in overdrawn deposit accounts reported as 2023 originations.

(In thousands)
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Revolving
Loans
Amortized
Cost Basis
    
Revolving
Loans
Converted
to Term
    
Total
  
As of June 30, 2024
                                                      
C&I
                                                      
By internally assigned grade:
                                                      
Pass
  
$
149,845
    
$
199,272
    
$
219,561
    
$
207,165
    
$
136,993
    
$
115,577
    
$
338,577
    
$
13,847
    
$
1,380,837
  
Special mention
    
557
      
4,909
      
5,531
      
434
      
4,003
      
1,892
      
25,194
      
370
      
42,890
  
Substandard
    
332
      
3,800
      
2,295
      
1,631
      
250
      
5,997
      
20,381
      
137
      
34,823
  
Doubtful
    
-
      
99
      
1
      
19
      
-
      
10
      
-
      
-
      
129
  
Total C&I
  
$
150,734
    
$
208,080
    
$
227,388
    
$
209,249
    
$
141,246
    
$
123,476
    
$
384,152
    
$
14,354
    
$
1,458,679
  
Current-period gross charge-offs   $ -     $ (58 )   $ (915 )   $ (4 )   $ -     $ (307 )   $ -     $ -     $ (1,284 )
CRE
                                                                        
By internally assigned grade:
                                                                        
Pass
  
$
231,892
    
$
358,866
    
$
492,938
    
$
523,952
    
$
432,230
    
$
975,497
    
$
311,534
    
$
54,559
    
$
3,381,468
  
Special mention
    
947
      
9,375
      
10,017
      
7,754
      
4,035
      
31,354
      
4,288
      
-
      
67,770
  
Substandard
    
-
      
2,163
      
18,890
      
17,926
      
3,290
      
61,121
      
1,274
      
-
      
104,664
  
Total CRE
  
$
232,839
    
$
370,404
    
$
521,845
    
$
549,632
    
$
439,555
    
$
1,067,972
    
$
317,096
    
$
54,559
    
$
3,553,902
  
Current-period gross charge-offs   $ -     $ -     $ -     $ -     $ -   $ -     $ -     $ -     $ -
Auto
                                                                        
By payment activity:
                                                                        
Performing
  
$
318,277
    
$
392,472
    
$
299,349
    
$
120,481
    
$
29,789
    
$
30,820
    
$
-
    
$
-
    
$
1,191,188
  
Nonperforming
    
151
      
1,004
      
847
      
732
      
158
      
182
      
-
      
-
      
3,074
  
Total auto
  
$
318,428
    
$
393,476
    
$
300,196
    
$
121,213
    
$
29,947
    
$
31,002
    
$
-
    
$
-
    
$
1,194,262
  
Current-period gross charge-offs   $ (21 )   $ (591 )   $ (913 )   $ (499 )   $ (35 )   $ (225 )   $ -     $ -     $ (2,284 )
Residential solar
                                                                       
By payment activity:
                                                                        
Performing
  $
1,803
     $
132,249
    
 $
413,160
     $
173,286
     $
61,333
     $
78,887
     $
-
     $
-
     $
860,718
  
Nonperforming
    -
       123
       742
       160
       60
       80
       -
       -
       1,165
  
Total residential solar
  $
1,803
     $
132,372
     $
413,902
     $
173,446
     $
61,393
     $
78,967
     $
-
     $
-
     $
861,883
  
Current-period gross charge-offs
  $
-
     $
(143
 )
   $
(2,036
 )
   $
(251
 )
   $
(34
 )
   $
(492
 )
   $
-
     $
-
     $
(2,956
 )
Other consumer
                                                                        
By payment activity:
                                                                        
Performing
  
$
10,904
    
$
9,020
    
$
18,664
    
$
39,443
    
$
15,264
    
$
21,743
    
$
22,044
    
$
3
    
$
137,085
  
Nonperforming
    
-
      
12
      
127
      
422
      
167
      
297
      
13
      
8
      
1,046
  
Total other consumer
  
$
10,904
    
$
9,032
    
$
18,791
    
$
39,865
    
$
15,431
    
$
22,040
    
$
22,057
    
$
11
    
$
138,131
  
Current-period gross charge-offs
  $
(191 )   $ (270 )   $ (1,383 )   $ (2,749 )   $ (574 )   $ (502 )   $ -     $ -     $ (5,669 )
Residential
                                                                        
By payment activity:
                                                                        
Performing
  
$
86,396
    
$
250,760
    
$
335,011
    
$
442,457
    
$
258,291
    
$
989,436
    
$
253,709
    
$
19,582
    
$
2,635,642
  
Nonperforming
    
-
      
832
      
866
      
1,923
      
293
      
7,905
      
29
      
-
      
11,848
  
Total residential
  
$
86,396
    
$
251,592
    
$
335,877
    
$
444,380
    
$
258,584
    
$
997,341
    
$
253,738
    
$
19,582
    
$
2,647,490
  
Current-period gross charge-offs
  $
-     $ -     $ -   $ -     $ -     $ (114 )   $ -     $ -     $ (114 )
Total loans
  
$
801,104
    
$
1,364,956
    
$
1,817,999
    
$
1,537,785
    
$
946,156
    
$
2,320,798
    
$
977,043
    
$
88,506
    
$
9,854,347
  
Current-period gross charge-offs
  $
(212 )   $ (1,062 )   $ (5,247 )   $ (3,503 )   $ (643 )   $ (1,640 )   $ -     $ -      $ (12,307 )

(In thousands)
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Revolving
Loans
Amortized
Cost Basis
    
Revolving
Loans
Converted
to Term
    
Total
  
As of December 31, 2023
                                                      
C&I
                                                      
By internally assigned grade:
                                                      
Pass
  
$
229,249
    
$
270,796
    
$
241,993
    
$
158,051
    
$
74,469
    
$
63,826
    
$
299,248
    
$
2,923
    
$
1,340,555
  
Special mention
    
420
      
1,672
      
277
      
3,524
      
87
      
1,854
      
19,489
      
-
      
27,323
  
Substandard
    
1,496
      
2,461
      
1,609
      
282
      
2,266
      
5,632
      
14,266
      
1,607
      
29,619
  
Doubtful
    
-
      
1
      
2
      
-
      
4
      
1
      
-
      
-
      
8
  
Total C&I
  
$
231,165
    
$
274,930
    
$
243,881
    
$
161,857
    
$
76,826
    
$
71,313
    
$
333,003
    
$
4,530
    
$
1,397,505
  
Current-period gross charge-offs   $ (24 )   $ (3,021 )   $ (5 )   $ (86 )   $ -     $ (600 )   $ -     $ -     $ (3,736 )
CRE
                                                                        
By internally assigned grade:
                                                                        
Pass
  
$
353,161
    
$
518,201
    
$
561,897
    
$
452,110
    
$
327,804
    
$
739,189
    
$
294,039
    
$
33,705
    
$
3,280,106
  
Special mention
    
3,577
      
4,472
      
10,711
      
7,055
      
9,967
      
39,460
      
2,970
      
-
      
78,212
  
Substandard
    
370
      
731
      
21,807
      
1,146
      
2,996
      
37,418
      
10,962
      
-
      
75,430
  
Total CRE
  
$
357,108
    
$
523,404
    
$
594,415
    
$
460,311
    
$
340,767
    
$
816,067
    
$
307,971
    
$
33,705
    
$
3,433,748
  
Current-period gross charge-offs   $ -     $ -     $ -     $ -     $ (114 )   $ (304 )   $ -     $ -     $ (418 )
Auto
                                                                        
By payment activity:
                                                                        
Performing
  
$
474,369
    
$
363,516
    
$
157,251
    
$
42,644
    
$
45,406
    
$
13,071
    
$
12
    
$
-
    
$
1,096,269
  
Nonperforming
    
532
      
1,241
      
830
      
190
      
306
      
74
      
-
      
-
      
3,173
  
Total auto
  
$
474,901
    
$
364,757
    
$
158,081
    
$
42,834
    
$
45,712
    
$
13,145
    
$
12
    
$
-
    
$
1,099,442
  
Current-period gross charge-offs   $ (102 )   $ (1,183 )   $ (1,066 )   $ (340 )   $ (301 )   $ (295 )   $ -     $ -     $ (3,287 )
Residential solar                                                                        
By payment activity:
                                                                       
Performing
  $ 155,425
     $ 430,855
     $ 178,839
     $ 65,382
     $ 46,554
     $ 39,540
     $ -
     $ -
     $ 916,595
  
Nonperforming
    -
       837
       205
       18
       47
       53
       -
       -
       1,160
  
Total residential solar
  $ 155,425
     $ 431,692
     $ 179,044
     $ 65,400
     $ 46,601
     $ 39,593
     $ -
     $ -
     $ 917,755
  
Current-period gross charge-offs   $ (150
 )
   $ (1,930
 )
   $ (923
 )
   $ (45
 )
   $ (558
 )
   $ (345
 )
   $ -
     $ -
     $ (3,951
 )
Other consumer
                                                                        
By payment activity:
                                                                        
Performing
  
$
13,089
    
$
27,394
    
$
57,876
    
$
21,087
    
$
14,548
    
$
15,964
    
$
19,042
    
$
21
    
$
169,021
  
Nonperforming
    
-
      
244
      
685
      
144
      
56
      
161
      
4
      
45
      
1,339
  
Total other consumer
  
$
13,089
    
$
27,638
    
$
58,561
    
$
21,231
    
$
14,604
    
$
16,125
    
$
19,046
    
$
66
    
$
170,360
  
Current-period gross charge-offs   $ (885 )   $ (3,744 )   $ (7,511 )   $ (1,329 )   $ (832 )   $ (568 )   $ -     $ -     $ (14,869 )
Residential
                                                                        
By payment activity:
                                                                        
Performing
  
$
212,799
    
$
366,860
    
$
453,206
    
$
267,845
    
$
167,860
    
$
876,563
    
$
260,836
    
$
15,300
    
$
2,621,269
  
Nonperforming
    
134
      
430
      
1,121
      
385
      
591
      
7,460
      
-
      
513
      
10,634
  
Total residential
  
$
212,933
    
$
367,290
    
$
454,327
    
$
268,230
    
$
168,451
    
$
884,023
    
$
260,836
    
$
15,813
    
$
2,631,903
  
Current-period gross charge-offs   $ -     $ -     $ (81 )   $ (30 )   $ -     $ (406 )   $ -     $ -     $ (517 )
Total loans
  
$
1,444,621
    
$
1,989,711
    
$
1,688,309
    
$
1,019,863
    
$
692,961
    
$
1,840,266
    
$
920,868
    
$
54,114
    
$
9,650,713
  
Current-period gross charge-offs   $ (1,161 )   $ (9,878 )   $ (9,586 )   $ (1,830 )   $ (1,805 )   $ (2,518 )   $ -     $ -     $ (26,778 )
 
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The allowance for losses on unfunded commitments totaled $4.3 million as of June 30, 2024, compared to $5.1 million as of December 31, 2023.

Loan Modifications to Borrowers Experiencing Financial Difficulties

When the Company modifies a loan with financial difficulty, such modifications generally include one or a combination of the following: an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a change in scheduled payment amount; or principal forgiveness.


The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

   
Three Months Ended June 30, 2024
  
   
Term Extension
  
Combination - Term
Extension and Interest Rate
Reduction
  
(Dollars in thousands)
  
Amortized Cost
  
% of Total Class
of Financing
Receivables
  
Amortized
Cost
  
% of Total Class
of Financing
Receivables
  
Residential
    
$
184
       0.007 %   $ 30       0.001 %
Total
    
$
184
             $ 30          

   
Three Months Ended June 30, 2023
  
   
Term Extension
  
Combination - Term
Extension and Interest Rate Reduction
  
(Dollars in thousands)
  
Amortized Cost
  
% of Total Class
of Financing
Receivables
  
Amortized
Cost
  
% of Total Class
of Financing
Receivables
  
Residential
    
$
199
       0.009 %   $ 171       0.008 %
Total
    
$
199
             $ 171          

   
Six Months Ended June 30, 2024
  
   
Term Extension
  
Combination - Term
Extension and Interest Rate Reduction
  
(Dollars in thousands)
  
Amortized Cost
  
% of Total Class
of Financing
Receivables
  
Amortized
Cost
  
% of Total Class
of Financing
Receivables
  
Residential
    
$
478
       0.018 %   $ 30       0.001 %
Total
    
$
478
             $ 30          

   
Six Months Ended June 30, 2023
  
   
Term Extension
  
Combination - Term
Extension and Interest Rate
Reduction
  
(Dollars in thousands)
  
Amortized
Cost
  
% of Total Class
of Financing
Receivables
  
Amortized
Cost
  
% of Total Class
of Financing
Receivables
  
Residential
    
$
242
       0.011 %   $ 171       0.008 %
Total
    
$
242
             $ 171          
The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulties:

      Three Months Ended June 30, 2024
Loan Type
  
Term Extension
  
Interest Rate Reduction
Residential
  
Added a weighted-average 5.3 years to the
life of loans, which reduced monthly
payment amounts for the borrowers
  
Interest Rates were reduced by an
average of one percent



      Three Months Ended June 30, 2023
Loan Type
  
Term Extension
  
Interest Rate Reduction
Residential
  
Added a weighted-average 10 years to the
life of loans, which reduced monthly
payment amounts for the borrowers
  
Interest Rates were reduced by an
average of three and a half percent



      Six Months Ended June 30, 2024
Loan Type
  
Term Extension
  
Interest Rate Reduction
Residential
  
Added a weighted-average 6.3 years to the
life of loans, which reduced monthly
payment amounts for the borrowers
  
Interest Rates were reduced by an
average of one percent


    Six Months Ended June 30, 2023
Loan Type
  
Term Extension
  
Interest Rate Reduction
Residential
  
Added a weighted-average 14 years to the
life of loans, which reduced monthly payment
amounts for the borrowers
  
Interest Rates were reduced by an
average of three and a half percent


The following table depicts the financing receivables that had a payment default that were modified to borrowers experiencing financial difficulty in the previous 12 months:

   
Three and Six Months Ended
  
     June 30, 2024  
 
(In thousands)
  
Amortized Cost Basis of
Modified Financing Receivables
that Subsequently Defaulted
  
 
Term Extension
  
Residential
    
$
171
  
Total
    
$
171
  

There were no financing receivables that had a payment default during the three and six months ended June 30, 2023, that were modified to borrowers experiencing financial difficulty that were modified in the twelve months prior to that default.


The following table depicts the performance of loans that have been modified to borrowers experiencing financial difficulty that were modified in the prior twelve months:



   
Payment Status (Amortized Cost Basis)
  
(In thousands)
  
Current
    
31-60 Days
Past Due
    
61-90 Days
Past Due
    
Greater than 90
Days Past Due
  
As of June 30, 2024
                        
Residential
  
$
567
    
$
120
    
$
-
    
$
78
  
Total
  
$
567
    
$
120
    
$
-
    
$
78