XML 35 R17.htm IDEA: XBRL DOCUMENT v3.22.0.1
Allowance for Credit Losses and Credit Quality Information
 12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
7. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
The following tables provide the activity of the Company's allowance for credit losses and loan and lease balances for the years ended December 31, 2021 and December 31, 2020 in accordance with ASC 326. During 2021, the decrease to the allowance for credit losses was primarily due to positive impacts on the economic forecasts and significantly improved credit quality metrics that reverted the Company's problem assets, nonperforming assets and delinquencies to at or near the levels prior to the COVID-19 pandemic.
 
(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial
Commercial
Mortgages
Construction
Residential(2)
Consumer(3)
Total
Year Ended December 31, 2021
Allowance for credit losses
Beginning balance$150,875 $9,615 $31,071 $12,190 $6,893 $18,160 $228,804 
Charge-offs(23,592)(83)(73)(2,473)— (2,094)(28,315)
Recoveries8,756 160 269 — 789 1,131 11,105 
(Credit) provision(86,072)(5,118)(19,644)(7,814)(4,330)5,891 (117,087)
Ending balance$49,967 $4,574 $11,623 $1,903 $3,352 $23,088 $94,507 
Period-end allowance allocated to:
Loans evaluated on an individual basis$1 $— $7 $— $— $— $8 
Loans evaluated on a collective basis49,966 4,574 11,616 1,903 3,352 23,088 94,499 
Ending balance$49,967 $4,574 $11,623 $1,903 $3,352 $23,088 $94,507 
Period-end loan balances:
Loans evaluated on an individual basis
$8,363 $1,690 $3,764 $— $5,000 $2,321 $21,138 
Loans evaluated on a collective basis2,261,956 1,340,017 1,877,746 687,213 537,733 1,156,252 7,860,917 
Ending balance$2,270,319 $1,341,707 $1,881,510 $687,213 $542,733 $1,158,573 $7,882,055 
(1)Includes commercial small business leases and PPP loans.
(2)Period-end loan balance excludes reverse mortgages at fair value of $3.9 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.

(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial		Commercial
Mortgages		Construction
Residential(2)
Consumer(3)
Total
Year Ended December 31, 2020
Allowance for credit losses
Beginning balance, prior to adoption of ASC 326$22,849 $4,616 $7,452 $3,891 $1,381 $7,387 $47,576 
Impact of adoption ASC 326(4)
19,747 (1,472)1,662 681 7,522 7,715 35,855 
Charge-offs(10,388)(336)(104)— (229)(2,464)(13,521)
Recoveries4,255 142 158 36 230 893 5,714 
Provision (credit)114,412 6,665 21,903 7,582 (2,011)4,629 153,180 
Ending balance$150,875 $9,615 $31,071 $12,190 $6,893 $18,160 $228,804 
Period-end allowance allocated to:
Loans evaluated on an individual basis$1 $— $13 $— $— $— $14 
Loans evaluated on a collective basis150,874 9,615 31,058 12,190 6,893 18,160 228,790 
Ending balance$150,875 $9,615 $31,071 $12,190 $6,893 $18,160 $228,804 
Period-end loan balances:
Loans evaluated on an individual basis$14,048 $6,496 $20,309 $79 $5,921 $2,371 $49,224 
Loans evaluated on a collective basis2,935,255 1,326,231 2,065,753 716,196 758,472 1,163,546 8,965,453 
Ending balance$2,949,303 $1,332,727 $2,086,062 $716,275 $764,393 $1,165,917 $9,014,677 
(1)Includes commercial small business leases and PPP loans.
(2)Period-end loan balance excludes reverse mortgages at fair value of $10.1 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(4)Includes $0.1 million for the initial allowance on loans purchased with credit deterioration.
The following table provides the activity of the allowance for loan and lease losses and loan and lease balances for the year ended 2019 under the incurred loss model:
 
(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial
Commercial
Mortgages
Construction
Residential(2)
ConsumerTotal
Year Ended December 31, 2019
Allowance for loan and lease losses
Beginning balance$14,211 $5,057 $6,806 $3,712 $1,428 $8,325 $39,539 
Charge-offs(17,258)(354)(159)(42)(322)(4,138)(22,273)
Recoveries1,621 200 1,546 4 (84)1,463 4,750 
Provision (credit)23,977 (472)(830)207 126 1,465 24,473 
Provision for acquired loans298 185 89 10 233 272 1,087 
Ending balance$22,849 $4,616 $7,452 $3,891 $1,381 $7,387 $47,576 
Period-end allowance allocated to:
Individually evaluated for impairment$1,179 $23 $— $— $463 $176 $1,841 
Collectively evaluated for impairment21,664 4,383 7,387 3,867 824 7,210 45,335 
Acquired loans evaluated for impairment6 210 65 24 94 1 400 
Ending balance$22,849 $4,616 $7,452 $3,891 $1,381 $7,387 $47,576 
Period-end loan balances:
Individually evaluated for impairment(3)
$11,158 $4,060 $1,753 $— $12,151 $7,467 $36,589 
Collectively evaluated for impairment1,619,549 971,694 1,105,174 437,999 145,582 899,724 5,179,722 
Acquired nonimpaired loans603,157 313,955 1,107,379 142,592 834,820 219,413 3,221,316 
Acquired impaired loans1,564 6,757 8,670 491 7,326 2,127 26,935 
Ending balance(4)
$2,235,428 $1,296,466 $2,222,976 $581,082 $999,879 $1,128,731 $8,464,562 
(1)Includes commercial small business leases.
(2)Period-end loan balance excludes reverse mortgages at fair value of $16.6 million as of December 31, 2019.
(3)The difference between this amount and nonaccruing loans represents accruing troubled debt restructured loans which are considered to be impaired loans of $14.3 million as of December 31, 2019.
(4)Ending loan balances do not include net deferred fees.
The following tables show nonaccrual and past due loans presented at amortized cost at the date indicated: 
December 31, 2021
(Dollars in thousands)30–89 Days
Past Due and
Still Accruing
Greater Than
90 Days
Past Due and
Still Accruing
Total Past
Due
And Still
Accruing
Accruing
Current
Balances
Nonaccrual
Loans(1)
Total
Loans
Commercial and industrial(2)
$5,007 $547 $5,554 $2,256,554 $8,211 $2,270,319 
Owner-occupied commercial741 — 741 1,340,155 811 1,341,707 
Commercial mortgages3,525 810 4,335 1,875,105 2,070 1,881,510 
Construction7,933 — 7,933 679,268 12 687,213 
Residential(3)
1,856 — 1,856 537,752 3,125 542,733 
Consumer(4)
10,227 8,634 18,861 1,137,332 2,380 1,158,573 
Total(4)
$29,289 $9,991 $39,280 $7,826,166 $16,609 $7,882,055 
% of Total Loans0.37 %0.13 %0.50 %99.29 %0.21 %100.00 %
(1)Nonaccrual loans with an allowance totaled less than $0.1 million.
(2)Includes commercial small business leases and PPP loans.
(3)Residential accruing current balances exclude reverse mortgages at fair value of $3.9 million.
(4)Includes $17.0 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
December 31, 2020
(Dollars in thousands)30–89 Days
Past Due and
Still Accruing
Greater Than
90 Days
Past Due and
Still Accruing
Total Past
Due
And Still
Accruing
Accruing
Current
Balances
Nonaccrual
Loans(1)
Total Loans
Commercial and industrial(2)
$7,313 $3,652 $10,965 $2,924,522 $13,816 $2,949,303 
Owner-occupied commercial3,120 892 4,012 1,323,355 5,360 1,332,727 
Commercial mortgages5,944 1,090 7,034 2,061,853 17,175 2,086,062 
Construction371 — 371 715,904 — 716,275 
Residential(3)
3,049 25 3,074 758,072 3,247 764,393 
Consumer(4)
8,355 11,035 19,390 1,144,217 2,310 1,165,917 
Total(4)
$28,152 $16,694 $44,846 $8,927,923 $41,908 $9,014,677 
% of Total Loans0.31 %0.19 %0.50 %99.04 %0.46 %100.00 %
(1)Nonaccrual loans with an allowance totaled less than $0.1 million.
(2)Includes commercial small business leases and PPP loans.
(3)Residential accruing current balances exclude reverse mortgages at fair value of $10.1 million.
(4)Includes $18.2 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at December 31, 2021 and December 31, 2020:
December 31, 2021December 31, 2020
(Dollars in thousands)PropertyEquipment and otherPropertyEquipment and other
Commercial and industrial(1)
$4,199 $4,012 $10,646 $3,170 
Owner-occupied commercial811 — 5,360 — 
Commercial mortgages2,070 — 17,175 — 
Construction12 — — — 
Residential(2)
3,125 — 3,247 — 
Consumer(3)
2,380 — 2,294 16 
Total$12,597 $4,012 $38,722 $3,186 
(1)Includes commercial small business leases.
(2)Excludes reverse mortgages at fair value.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
Interest income of $0.8 million was recognized on individually reviewed loans during 2021 and 2020.
As of December 31, 2021, there were 28 residential loans and 9 commercial loans in the process of foreclosure. The total outstanding balance on the loans was $2.5 million and $3.2 million, respectively. As of December 31, 2020, there were 27 residential loans and 23 commercial loans in the process of foreclosure. The total outstanding balance on the loans was $1.9 million and $12.8 million, respectively. Loan workout and OREO expenses recognized were $1.5 million in 2021, $3.2 million in 2020, and $2.7 million in 2019. Loan workout and OREO expenses are included in Loan workout and other credit costs on the Consolidated Statement of Income.
Credit Quality Indicators
Below is a description of each of the risk ratings for all commercial loans:
 
•Pass. These borrowers currently show no indication of deterioration or potential problems and their loans are considered fully collectible.
•Special Mention. These borrowers have potential weaknesses that deserve management’s close attention. Borrowers in this category may be experiencing adverse operating trends, for example, declining revenues or margins, high leverage, tight liquidity, or increasing inventory without increasing sales. These adverse trends can have a potential negative effect on the borrower’s repayment capacity. These assets are not adversely classified and do not expose the Bank to significant risk that would warrant a more severe rating. Borrowers in this category may also be experiencing significant management problems, pending litigation, or other structural credit weaknesses.
•Substandard or Lower. These borrowers have well-defined weaknesses that require extensive oversight by management. Borrowers in this category may exhibit one or more of the following: inadequate debt service coverage, unprofitable operations, insufficient liquidity, high leverage, and weak or inadequate capitalization. Relationships in this category are not adequately protected by the sound financial worth and paying capacity of the obligor or the collateral pledged on the loan, if any. A distinct possibility exists that the Bank will sustain some loss if the deficiencies are not corrected. In addition, some borrowers in this category could have the added characteristic that the possibility of loss is extremely high. Current circumstances in the credit relationship make collection or liquidation in full highly questionable. Such impending events include: perfecting liens on additional collateral, obtaining collateral valuations, an acquisition or liquidation preceding, proposed merger, or refinancing plan.
Residential and Consumer Loans
The residential and consumer loan portfolios are monitored on an ongoing basis using delinquency information and loan type as credit quality indicators. These credit quality indicators are assessed in the aggregate in these relatively homogeneous portfolios. Loans that are greater than 90 days past due are generally considered nonperforming and placed on nonaccrual status.
The following table provides an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses as of December 31, 2021.
Term Loans Amortized Cost Basis by Origination Year
20212020201920182017
Prior
Revolving loans amortized cost basisRevolving loans converted to termTotal
(Dollars in thousands)
Commercial and industrial(1):
Risk Rating
Pass(2)
$556,896 $420,698 $329,354 $273,345 $139,800 $148,809 $5,551 $176,006 $2,050,459 
Special mention35,910 949 3,052 1,057 429 15,299 — 17,545 74,241 
Substandard or Lower12,533 14,408 53,655 29,046 19,114 6,921 29 9,913 145,619 
$605,339 $436,055 $386,061 $303,448 $159,343 $171,029 $5,580 $203,464 $2,270,319 
Owner-occupied commercial:
Risk Rating
Pass$305,156 $189,128 $172,503 $67,526 $136,697 $262,629 $— $128,188 $1,261,827 
Special mention938 5,359 2,561 891 — 7,019 — 10,543 27,311 
Substandard or Lower3,192 13,736 4,138 9,418 5,580 11,039 — 5,466 52,569 
$309,286 $208,223 $179,202 $77,835 $142,277 $280,687 $— $144,197 $1,341,707 
Commercial mortgages:
Risk Rating
Pass$416,149 $280,889 $217,311 $134,477 $229,863 $368,527 $— $187,396 $1,834,612 
Special mention— 4,185 — 861 11,588 1,385 — 2,097 20,116 
Substandard or Lower2,438 1,624 3,789 2,114 2,254 14,085 — 478 26,782 
$418,587 $286,698 $221,100 $137,452 $243,705 $383,997 $— $189,971 $1,881,510 
Construction:
Risk Rating
Pass$248,053 $195,269 $84,868 $39,585 $2,223 $11,297 $— $88,839 $670,134 
Special mention— — — — — — — — — 
Substandard or Lower12,922 — 2,422 — 90 — — 1,645 17,079 
$260,975 $195,269 $87,290 $39,585 $2,313 $11,297 $— $90,484 $687,213 
Residential(3):
Risk Rating
Performing$59,977 $28,426 $12,526 $32,871 $44,969 $358,964 $— $— $537,733 
Nonperforming(4)
— 112 1,044 — 63 3,781 — — 5,000 
$59,977 $28,538 $13,570 $32,871 $45,032 $362,745 $— $— $542,733 
Consumer(5):
Risk Rating
Performing$219,918 $169,922 $74,048 $203,519 $39,113 $60,952 $382,718 $5,364 $1,155,554 
Nonperforming(6)
— 147 — 600 71 — 1,655 546 3,019 
$219,918 $170,069 $74,048 $204,119 $39,184 $60,952 $384,373 $5,910 $1,158,573 
(1)Includes commercial small business leases.
(2)Includes $31.5 million of PPP loans
(3)Excludes reverse mortgages at fair value.
(4)Includes troubled debt restructured mortgages performing in accordance with the loans' modified terms and are accruing interest.
(5)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(6)Includes troubled debt restructured home equity installment loans performing in accordance with the loans' modified terms and are accruing interest.
The following table provides an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses as of December 31, 2020.
Term Loans Amortized Cost Basis by Origination Year
20202019201820172016
Prior
Revolving loans amortized cost basisRevolving loans converted to termTotal
(Dollars in thousands)
Commercial and industrial(1):
Risk Rating
Pass(2)
$1,250,528 $448,704 $296,594 $157,359 $97,036 $125,361 $6,182 $136,110 $2,517,874 
Special mention3,040 26,470 28,636 8,482 2,577 16,993 — 34,403 120,601 
Substandard or Lower82,868 60,227 57,880 50,446 15,151 35,150 63 9,043 310,828 
$1,336,436 $535,401 $383,110 $216,287 $114,764 $177,504 $6,245 $179,556 $2,949,303 
Owner-occupied commercial:
Risk Rating
Pass$220,165 $225,766 $90,515 $135,903 $123,897 $271,086 $— $123,194 $1,190,526 
Special mention1,525 5,885 1,838 17,578 4,125 1,997 — 14,467 47,415 
Substandard or Lower3,703 13,426 15,272 19,883 11,581 19,331 — 11,590 94,786 
$225,393 $245,077 $107,625 $173,364 $139,603 $292,414 $— $149,251 $1,332,727 
Commercial mortgages:
Risk Rating
Pass$379,592 $283,004 $240,924 $257,809 $254,780 $375,473 $— $148,210 $1,939,792 
Special mention8,324 1,774 21,762 21,269 1,274 6,507 — 1,870 62,780 
Substandard or Lower26,343 25,402 2,253 1,950 3,242 24,300 — — 83,490 
$414,259 $310,180 $264,939 $281,028 $259,296 $406,280 $— $150,080 $2,086,062 
Construction:
Risk Rating
Pass$189,257 $214,956 $208,981 $11,414 $7,414 $3,645 $— $66,018 $701,685 
Special mention— — — 3,515 — — — — 3,515 
Substandard or Lower— 8,648 — — — 79 — 2,348 11,075 
$189,257 $223,604 $208,981 $14,929 $7,414 $3,724 $— $68,366 $716,275 
Residential(3):
Risk Rating
Performing$42,475 $26,309 $71,410 $85,277 $149,643 $383,358 $— $— $758,472 
Nonperforming(4)
113 — — — 283 5,525 — — 5,921 
$42,588 $26,309 $71,410 $85,277 $149,926 $388,883 $— $— $764,393 
Consumer(5):
Risk Rating
Performing$235,948 $134,064 $251,087 $63,713 $44,700 $53,717 $371,842 $8,287 $1,163,358 
Nonperforming(6)
— — 636 232 — — 1,396 295 2,559 
$235,948 $134,064 $251,723 $63,945 $44,700 $53,717 $373,238 $8,582 $1,165,917 
(1)Includes commercial small business leases.
(2)Includes $751.2 million of PPP loans
(3)Excludes reverse mortgages at fair value.
(4)Includes troubled debt restructured mortgages performing in accordance with the loans' modified terms and are accruing interest.
(5)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(6)Includes troubled debt restructured home equity installment loans performing in accordance with the loans' modified terms and are accruing interest.
Troubled Debt Restructurings (TDR)
The following table presents the balance of TDRs as of the indicated dates:
 
(Dollars in thousands)December 31, 2021December 31, 2020
Performing TDRs$14,204 $15,539 
Nonperforming TDRs756 4,601 
Total TDRs$14,960 $20,140 
Approximately $0.2 million and less than $0.1 million in related reserves have been established for these loans at December 31, 2021 and December 31, 2020, respectively.
The following tables present information regarding the types of loan modifications made and the balances of loans modified as TDRs during the years ended December 31, 2021 and 2020:
December 31, 2021December 31, 2020
Contractual
payment
reduction
Maturity
date
extension
Discharged
in
bankruptcy
Other (1)
TotalContractual
payment
reduction		Maturity
date
extension		Discharged
in
bankruptcy
Other (1)
Total
Commercial— — — — — 1 — — — 1 
Owner-occupied commercial— — — — — 3 — — — 3 
Commercial mortgages— — — — — — 1 — — 1 
Construction— — — — — — — — — — 
Residential— — 2 — 2 — — 6 4 10 
Consumer— 1 23 6 30 — — 12 7 19 
Total— 1 25 6 32 4 1 18 11 34 
(1)Other includes interest rate reduction, forbearance, and interest only payments.

 Year Ended December 31,
(Dollars in thousands)20212020
Pre
Modification		Post
Modification
Pre
Modification
Post
Modification
Commercial$— $— $1 $1 
Owner-occupied commercial— — 1,192 1,192 
Commercial mortgages— — 93 93 
Construction— — — — 
Residential146 146 1,396 1,396 
Consumer1,585 1,585 1,714 1,714 
Total(1)(2)(3)
$1,731 $1,731 $4,396 $4,396 
(1)During the year ended December 31, 2021, the TDRs in the table above resulted in a less than $0.1 million increase in the allowance for credit losses, and no additional charge-offs. During the year ended December 31, 2021, no TDRs defaulted that had received troubled debt modification during the past twelve months.
(2)During the year ended December 31, 2020 the TDRs in the table above resulted in a $0.5 million decrease in the allowance for credit losses, respectively, and no additional charge-offs. During the year ended December 31, 2020, no TDRs defaulted that had received troubled debt modification during the past twelve months.
(3)The TDRs in the table above did not occur as a result of the loan forbearance program under the CARES Act.