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ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
 12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
8. 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, 2022, December 31, 2021, and December 31, 2020. During 2022, the increase was primarily due to an initial ACL of $49.6 million recorded in connection with the BMBC Merger and loan growth during the year. The initial $49.6 million ACL recorded includes $23.5 million related to non-PCD loans, or the initial provision for credit loss recorded, and $26.1 million related to PCD loans, which does not have an initial income statement impact, but adjusts the amortized cost basis of the loans at acquisition (i.e., a balance sheet gross-up).
 
(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial
Commercial
Mortgages
Construction
Residential(2)
Consumer(3)
Total
Year Ended December 31, 2022
Allowance for credit losses
Beginning balance$49,967 $4,574 $11,623 $1,903 $3,352 $23,088 $94,507 
Initial allowance on acquired PCD loans22,614 595 2,684 71 61 78 26,103 
Charge-offs(19,004)(179)(581)— (186)(7,520)(27,470)
Recoveries6,112 278 223 2,567 665 793 10,638 
(Credit) provision(4)
(295)751 7,524 2,446 776 36,881 48,083 
Ending balance$59,394 $6,019 $21,473 $6,987 $4,668 $53,320 $151,861 
Period-end allowance allocated to:
Loans evaluated on an individual basis$2,428 $— $— $— $— $— $2,428 
Loans evaluated on a collective basis56,966 6,019 21,473 6,987 4,668 53,320 149,433 
Ending balance$59,394 $6,019 $21,473 $6,987 $4,668 $53,320 $151,861 
Period-end loan balances:
Loans evaluated on an individual basis
$17,572 $1,929 $6,369 $5,143 $7,680 $2,047 $40,740 
Loans evaluated on a collective basis3,116,754 1,807,653 3,344,715 1,038,906 751,785 1,808,883 11,868,696 
Ending balance$3,134,326 $1,809,582 $3,351,084 $1,044,049 $759,465 $1,810,930 $11,909,436 
(1)Includes commercial small business leases and PPP loans.
(2)Period-end loan balance excludes reverse mortgages at fair value of $2.4 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(4)Includes $23.5 million initial provision for credit losses on non-PCD loans.

(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 loan and lease 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 tables show nonaccrual and past due loans presented at amortized cost at the date indicated: 
December 31, 2022
(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)
$10,767 $311 $11,078 $3,116,478 $6,770 $3,134,326 
Owner-occupied commercial3,500 474 3,974 1,805,222 386 1,809,582 
Commercial mortgages2,137 237 2,374 3,343,551 5,159 3,351,084 
Construction— — — 1,038,906 5,143 1,044,049 
Residential(3)
2,563 — 2,563 753,703 3,199 759,465 
Consumer(4)
12,263 15,513 27,776 1,781,009 2,145 1,810,930 
Total(4)
$31,230 $16,535 $47,765 $11,838,869 $22,802 $11,909,436 
% of Total Loans0.26 %0.14 %0.40 %99.41 %0.19 %100.00 %
(1)There were no nonaccrual loans with an allowance as of December 31, 2022.
(2)Includes commercial small business leases and PPP loans.
(3)Residential accruing current balances exclude reverse mortgages at fair value of $2.4 million.
(4)Includes $21.1 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
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.
The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at December 31, 2022 and December 31, 2021:
December 31, 2022December 31, 2021
(Dollars in thousands)PropertyEquipment and otherPropertyEquipment and other
Commercial and industrial(1)
$3,848 $2,922 $4,199 $4,012 
Owner-occupied commercial386 — 811 — 
Commercial mortgages5,159 — 2,070 — 
Construction5,143 — 12 — 
Residential(2)
3,199 — 3,125 — 
Consumer(3)
2,145 — 2,380 — 
Total$19,880 $2,922 $12,597 $4,012 
(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 $1.0 million was recognized on individually reviewed loans during 2022 compared to $0.8 million during 2021 and 2020.
As of December 31, 2022, there were 45 residential loans and 8 commercial loans in the process of foreclosure. The total outstanding balance on the loans was $6.7 million and $1.6 million, respectively. 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. Loan workout and OREO expenses recognized were $0.4 million in 2022, $1.5 million in 2021, and $3.2 million in 2020. Loan workout and OREO expenses are included in Loan workout and other credit costs on the Consolidated Statements 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, 2022.
Term Loans Amortized Cost Basis by Origination Year
20222021202020192018
Prior
Revolving loans amortized cost basisRevolving loans converted to termTotal
(Dollars in thousands)
Commercial and industrial(1):
Risk Rating
Pass(2)
$1,123,803 $501,761 $387,225 $211,310 $153,713 $276,588 $8,099 $250,486 $2,912,985 
Special mention28,672 27,689 7,585 9,451 347 1,010 — 2,596 77,350 
Substandard or Lower32,362 16,162 6,943 37,534 37,133 6,768 — 7,089 143,991 
$1,184,837 $545,612 $401,753 $258,295 $191,193 $284,366 $8,099 $260,171 $3,134,326 
Owner-occupied commercial:
Risk Rating
Pass$280,898 $325,388 $258,177 $226,717 $106,390 $363,420 $— $132,942 $1,693,932 
Special mention17,376 — — — — 2,166 — 3,351 22,893 
Substandard or Lower2,981 1,500 23,284 4,401 11,864 35,311 — 13,416 92,757 
$301,255 $326,888 $281,461 $231,118 $118,254 $400,897 $— $149,709 $1,809,582 
Commercial mortgages:
Risk Rating
Pass$516,783 $600,226 $526,312 $549,788 $276,414 $594,024 $— $210,550 $3,274,097 
Special mention1,450 75 3,848 6,121 9,596 32,014 — — 53,104 
Substandard or Lower1,861 1,210 12,552 2,909 3,573 1,209 — 569 23,883 
$520,094 $601,511 $542,712 $558,818 $289,583 $627,247 $— $211,119 $3,351,084 
Construction:
Risk Rating
Pass$448,581 $299,619 $115,667 $9,319 $26,553 $7,539 $— $122,116 $1,029,394 
Special mention— — — — — — — 581 581 
Substandard or Lower— 4,200 8,930 183 — — — 761 14,074 
$448,581 $303,819 $124,597 $9,502 $26,553 $7,539 $— $123,458 $1,044,049 
Residential(3):
Risk Rating
Performing$64,500 $110,508 $60,625 $36,118 $45,859 $434,175 $— $— $751,785 
Nonperforming(4)
— 729 502 999 1,218 4,232 — — 7,680 
$64,500 $111,237 $61,127 $37,117 $47,077 $438,407 $— $— $759,465 
Consumer(5):
Risk Rating
Performing$595,158 $195,397 $126,456 $54,449 $220,039 $71,478 $540,308 $5,232 $1,808,517 
Nonperforming(6)
— — 350 — 479 — 1,255 329 2,413 
$595,158 $195,397 $126,806 $54,449 $220,518 $71,478 $541,563 $5,561 $1,810,930 
(1)Includes commercial small business leases.
(2)Includes $3.8 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, 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.
Troubled Debt Restructurings (TDR)
The following table presents the balance of TDRs as of the indicated dates:
 
(Dollars in thousands)December 31, 2022December 31, 2021
Performing TDRs$19,737 $14,204 
Nonperforming TDRs2,006 756 
Total TDRs$21,743 $14,960 
Approximately $0.6 million and $0.2 million in related reserves have been established for these loans at December 31, 2022 and December 31, 2021, 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, 2022 and 2021:
December 31, 2022December 31, 2021
Contractual
payment
reduction
Maturity
date
extension
Discharged
in
bankruptcy
Other (1)
TotalContractual
payment
reduction		Maturity
date
extension		Discharged
in
bankruptcy
Other (1)
Total
Commercial1 2 — 2 5 — — — — — 
Owner-occupied commercial— 1 — — 1 — — — — — 
Commercial mortgages— 1 — — 1 — — — — — 
Construction— 1 — — 1 — — — — — 
Residential1 — 1 1 3 — — 2 — 2 
Consumer151 48 8 3 210 — 1 23 6 30 
Total153 53 9 6 221 — 1 25 6 32 
(1)Other includes interest rate reduction, forbearance, and interest only payments.

 Year Ended December 31,
(Dollars in thousands)20222021
Pre
Modification		Post
Modification
Pre
Modification
Post
Modification
Commercial$1,067 $1,067 $— $— 
Owner-occupied commercial2,087 2,087 — — 
Commercial mortgages2,380 2,380 — — 
Construction— — — — 
Residential302 302 146 146 
Consumer4,178 4,178 1,585 1,585 
Total(1)(2)(3)
$10,014 $10,014 $1,731 $1,731 
(1)During the year ended December 31, 2022, the TDRs in the table above resulted in a $0.5 million increase in the allowance for credit losses, and no additional charge-offs. During the year ended December 31, 2022, no TDRs defaulted that had received troubled debt modification during the past twelve months.
(2)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.
(3)The TDRs in the table above did not occur as a result of the loan forbearance program under the CARES Act.