Loans Receivable, Net

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Loans Receivable, Net

Loans Receivable, Net

The following table presents loans receivable for each portfolio segment of loans:

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(Dollars in thousands)	June 30, 2022		December 31, 2021
Residential real estate	$	1,261,119	1,051,883
Commercial real estate	9,310,070		8,630,831
Other commercial	2,685,392		2,664,190
Home equity	773,582		736,288
Other consumer	369,592		348,839
Loans receivable	14,399,755		13,432,031
Allowance for credit losses	(172,963)		(172,665)
Loans receivable, net	$	14,226,792	13,259,366
Net deferred origination (fees) costs included in loans receivable	$	(23,210)	(21,667)
Net purchase accounting (discounts) premiums included in loans receivable	$	(21,028)	(25,166)
Accrued interest receivable on loans	$	50,166	49,133

Substantially all of the Company’s loans receivable are with borrowers in the Company’s geographic market areas. Although the Company has a diversified loan portfolio, a substantial portion of borrowers’ ability to service their obligations is dependent upon the economic performance in the Company’s market areas.

The Company had no significant purchases or sales of portfolio loans or reclassification of loans held for investment to loans held for sale during the six months ended June 30, 2022.

Allowance for Credit Losses - Loans Receivable

The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on loans. The following tables summarize the activity in the ACL:

	Three Months ended June 30, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	176,159	16,227	122,172	23,882	9,173	4,705
Provision for credit losses	(1,353)		686	(385)	(2,545)	41	850
Charge-offs	(4,346)		—	(1,642)	(804)	(45)	(1,855)
Recoveries	2,503		46	1,114	546	164	633
Balance at end of period	$	172,963	16,959	121,259	21,079	9,333	4,333

	Three Months ended June 30, 2021
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	156,446	9,018	95,251	39,385	8,068	4,724
Provision for credit losses	(5,723)		884	1,269	(8,319)	(278)	721
Charge-offs	(1,700)		—	(41)	(351)	—	(1,308)
Recoveries	2,425		241	118	1,268	47	751
Balance at end of period	$	151,448	10,143	96,597	31,983	7,837	4,888

	Six Months ended June 30, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	172,665	16,458	117,901	24,703	8,566	5,037
Provision for credit losses	2,991		437	3,542	(3,548)	600	1,960
Charge-offs	(7,040)		—	(1,642)	(1,603)	(45)	(3,750)
Recoveries	4,347		64	1,458	1,527	212	1,086
Balance at end of period	$	172,963	16,959	121,259	21,079	9,333	4,333

	Six Months ended June 30, 2021
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	158,243	9,604	86,999	49,133	8,182	4,325
Provision for credit losses	(5,234)		302	8,732	(15,584)	(367)	1,683
Charge-offs	(5,946)		(38)	(41)	(3,113)	(45)	(2,709)
Recoveries	4,385		275	907	1,547	67	1,589
Balance at end of period	$	151,448	10,143	96,597	31,983	7,837	4,888

During the six months ended June 30, 2022, the ACL increased primarily as a result of loan portfolio growth.

The sizeable charge-offs in the other consumer loan segment is driven by deposit overdraft charge-offs which typically experience high charge-off rates and the amounts were comparable to historical trends. The other segments experience routine charge-offs and recoveries, with occasional large credit relationships charge-offs and recoveries that cause fluctuations from prior periods. During the six months ended June 30, 2022, there have been no significant changes to the types of collateral securing collateral-dependent loans.

Aging Analysis

The following tables present an aging analysis of the recorded investment in loans:

	June 30, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	13,650	1,580	3,151	6,028	795	2,096
Accruing loans 60-89 days past due	2,938		98	1,258	664	341	577
Accruing loans 90 days or more past due	5,064		60	2,542	2,079	184	199
Non-accrual loans with no ACL	36,136		1,812	27,642	4,737	1,531	414
Non-accrual loans with ACL	2,387		—	—	2,381	—	6
Total past due and   non-accrual loans	60,175		3,550	34,593	15,889	2,851	3,292
Current loans receivable	14,339,580		1,257,569	9,275,477	2,669,503	770,731	366,300
Total loans receivable	$	14,399,755	1,261,119	9,310,070	2,685,392	773,582	369,592

 

	December 31, 2021
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	38,081	2,132	26,063	5,464	1,582	2,840
Accruing loans 60-89 days past due	12,485		457	9,537	1,652	512	327
Accruing loans 90 days or more past due	17,141		223	15,345	1,383	57	133
Non-accrual loans with no ACL	28,961		2,162	20,040	4,563	1,712	484
Non-accrual loans with ACL	21,571		255	448	20,765	99	4
Total past due and non-accrual loans	118,239		5,229	71,433	33,827	3,962	3,788
Current loans receivable	13,313,792		1,046,654	8,559,398	2,630,363	732,326	345,051
Total loans receivable	$	13,432,031	1,051,883	8,630,831	2,664,190	736,288	348,839

The Company had $801,000 and $447,000 of interest reversed on non-accrual loans during the six months ended June 30, 2022 and June 30, 2021, respectively. The prior year modifications that were made under the CARES Act, along with related regulatory guidance, are included in current loan receivables.

Collateral-Dependent Loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The collateral on the loans is a significant portion of what secures the collateral-dependent loans and significant changes to the fair value of the collateral can impact the ACL. During 2022, there were no significant change to collateral which secures the collateral-dependent loans, whether due to general deterioration or other reasons. The following table presents the amortized cost basis of collateral-dependent loans by collateral type:

	June 30, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Business assets	$	6,453	—	45	6,408	—	—
Residential real estate	4,384		1,774	802	326	1,325	157
Other real estate	38,501		38	37,298	442	390	333
Other	1,147		—	—	912	—	235
Total	$	50,485	1,812	38,145	8,088	1,715	725

	December 31, 2021
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Business assets	$	25,182	—	57	25,125	—	—
Residential real estate	4,625		2,369	280	115	1,694	167
Other real estate	32,093		48	30,996	597	116	336
Other	1,525		—	—	1,241	—	284
Total	$	63,425	2,417	31,333	27,078	1,810	787

Restructured Loans

A restructured loan is considered a TDR if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:

	Three Months ended June 30, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	2		—	2	—	—	—
Pre-modification recorded balance	$	1,932	—	1,932	—	—	—
Post-modification recorded balance	$	1,932	—	1,932	—	—	—
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

	Three Months ended June 30, 2021
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	3		—	1	2	—	—
Pre-modification recorded balance	$	615	—	99	516	—	—
Post-modification recorded balance	$	615	—	99	516	—	—
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

	Six Months ended June 30, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	5		1	2	2	—	—
Pre-modification recorded balance	$	2,019	31	1,932	56	—	—
Post-modification recorded balance	$	2,019	31	1,932	56	—	—
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

	Six Months ended June 30, 2021
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	10		1	5	3	—	1
Pre-modification recorded balance	$	2,368	210	1,473	554	—	131
Post-modification recorded balance	$	2,368	210	1,473	554	—	131
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

The modifications for the loans designated as TDRs during the six months ended June 30, 2022 and 2021 included one or a combination of the following: an extension of the maturity date, a reduction of the interest rate or a reduction in the principal amount.

In addition to the loans designated as TDRs during the period provided in the preceding tables, the Company had TDRs with pre-modification loan balances of $489,000 and $1,600,000 for the six months ended June 30, 2022 and 2021, respectively, for which OREO was received in full or partial satisfaction of the loans. The majority of such TDRs were in other commercial for the six months ended June 30, 2022 and 2021. At June 30, 2022 and December 31, 2021, the Company had $545,000 and $102,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process. At June 30, 2022 and December 31, 2021, the Company did not have any OREO secured by residential real estate properties.

Credit Quality Indicators

The Company categorizes commercial real estate and other commercial loans into risk categories based on relevant information about the ability of borrowers to service their obligations. The following tables present the amortized cost in commercial real estate and other commercial loans based on the Company’s internal risk rating. The date of a modification, renewal or extension of a loan is considered for the year of origination if the terms of the loan are as favorable to the Company as the terms are for a comparable loan to other borrowers with similar credit risk.

	June 30, 2022
(Dollars in thousands)	Total		Pass	Special Mention	Substandard	Doubtful/ Loss
Commercial real estate loans
Term loans by origination year
2022 (year-to-date)	$	1,547,488	1,541,324	—	6,164	—
2021	2,583,284		2,582,265	—	1,019	—
2020	1,415,213		1,406,747	—	8,466	—
2019	797,273		760,394	—	36,879	—
2018	724,294		703,525	—	20,769	—
Prior	2,033,400		1,948,931	1,485	82,960	24
Revolving loans	209,118		207,167	—	1,950	1
Total	$	9,310,070	9,150,353	1,485	158,207	25
Other commercial loans 1
Term loans by origination year
2022 (year-to-date)	$	293,706	291,605	20	2,081	—
2021	637,517		632,545	—	3,695	1,277
2020	349,601		343,132	—	6,467	2
2019	213,733		204,185	—	9,536	12
2018	162,788		156,633	27	6,126	2
Prior	452,704		443,025	177	9,112	390
Revolving loans	575,343		569,480	350	5,377	136
Total	$	2,685,392	2,640,605	574	42,394	1,819

___________________________

1 Includes PPP loans.

	December 31, 2021
(Dollars in thousands)	Total		Pass	Special Mention	Substandard	Doubtful/ Loss
Commercial real estate loans
Term loans by origination year
2021	$	2,679,564	2,677,540	—	2,024	—
2020	1,512,845		1,499,895	—	12,950	—
2019	952,039		919,091	—	32,948	—
2018	808,275		788,292	—	19,983	—
2017	665,733		624,018	—	41,715	—
Prior	1,677,875		1,621,819	—	56,030	26
Revolving loans	334,500		332,696	—	1,803	1
Total	$	8,630,831	8,463,351	—	167,453	27
Other commercial loans 1
Term loans by origination year
2021	$	751,151	746,709	—	4,442	—
2020	429,500		420,547	—	8,952	1
2019	235,591		226,614	—	8,974	3
2018	188,009		179,679	—	8,329	1
2017	209,287		207,509	—	1,775	3
Prior	312,852		297,926	—	14,275	651
Revolving loans	537,800		507,258	—	30,526	16
Total	$	2,664,190	2,586,242	—	77,273	675

______________________________

1 Includes PPP loans.

For residential real estate, home equity and other consumer loan segments, the Company evaluates credit quality primarily on the aging status of the loan. The following tables present the amortized cost in residential real estate, home equity and other consumer loans based on payment performance:

	June 30, 2022
(Dollars in thousands)	Total		Performing	30-89 Days Past Due	Non-Accrual and 90 Days or More Past Due
Residential real estate loans
Term loans by origination year
2022 (year-to-date)	$	290,234	290,234	—	—
2021	584,815		583,300	1,515	—
2020	131,704		131,569	—	135
2019	48,997		48,997	—	—
2018	40,466		40,198	—	268
Prior	163,160		161,528	163	1,469
Revolving loans	1,743		1,743	—	—
Total	$	1,261,119	1,257,569	1,678	1,872
Home equity loans
Term loans by origination year
2022 (year-to-date)	$	54	54	—	—
2021	38		38	—	—
2020	60		60	—	—
2019	263		231	—	32
2018	643		643	—	—
Prior	8,759		8,461	25	273
Revolving loans	763,765		761,244	1,111	1,410
Total	$	773,582	770,731	1,136	1,715
Other consumer loans
Term loans by origination year
2022 (year-to-date)	$	89,945	89,777	168	—
2021	119,479		118,899	529	51
2020	62,620		62,420	159	41
2019	27,010		26,635	198	177
2018	13,931		13,675	79	177
Prior	19,656		18,015	1,481	160
Revolving loans	36,951		36,879	59	13
Total	$	369,592	366,300	2,673	619

	December 31, 2021
(Dollars in thousands)	Total		Performing	30-89 Days Past Due	Non-Accrual and 90 Days or More Past Due
Residential real estate loans
Term loans by origination year
2021	$	427,814	427,318	496	—
2020	179,395		178,016	1,232	147
2019	66,543		66,470	—	73
2018	51,095		50,816	—	279
2017	42,181		42,005	—	176
Prior	146,299		143,473	861	1,965
Revolving loans	138,556		138,556	—	—
Total	$	1,051,883	1,046,654	2,589	2,640
Home equity loans
Term loans by origination year
2021	$	871	871	—	—
2020	303		303	—	—
2019	1,293		1,260	—	33
2018	1,329		1,328	—	1
2017	886		886	—	—
Prior	11,494		10,589	576	329
Revolving loans	720,112		717,089	1,518	1,505
Total	$	736,288	732,326	2,094	1,868
Other consumer loans
Term loans by origination year
2021	$	151,407	150,910	469	28
2020	80,531		80,072	443	16
2019	37,036		36,647	187	202
2018	19,563		19,268	144	151
2017	8,591		8,506	78	7
Prior	17,763		15,968	1,589	206
Revolving loans	33,948		33,680	257	11
Total	$	348,839	345,051	3,167	621