Loans Receivable, Net

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Loans Receivable, Net

Loans Receivable, Net

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

(Dollars in thousands)	December 31, 2023		December 31, 2022
Residential real estate	$	1,704,544	1,446,008
Commercial real estate	10,303,306		9,797,047
Other commercial	2,901,863		2,799,668
Home equity	888,013		822,232
Other consumer	400,356		381,857
Loans receivable	16,198,082		15,246,812
Allowance for credit losses	(192,757)		(182,283)
Loans receivable, net	$	16,005,325	15,064,529
Net deferred origination (fees) costs included in loans receivable	$	(25,577)	(25,882)
Net purchase accounting (discounts) premiums included in loans receivable	$	(13,802)	(17,832)
Accrued interest receivable on loans	$	67,362	54,971

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 2023 and 2022.

At December 31, 2023, the Company had loans of $11,571,856,000 pledged as collateral for FHLB advances and FRB discount window. The Company is subject to regulatory limits for the amount of loans to any individual borrower and the Company is in compliance with this regulation as of December 31, 2023 and 2022. No borrower had outstanding loans or commitments exceeding 10 percent of the Company’s consolidated stockholders’ equity as of December 31, 2023.

The Company has entered into transactions with its executive officers and directors and their affiliates. The aggregate amount of loans outstanding to such related parties at December 31, 2023 and 2022 was $110,707,000 and $101,637,000, respectively. During 2023, transactions included new loans to such related parties of $20,758,000, and repayments of $11,688,000. In management’s opinion, such loans were made in the ordinary course of business and were made on substantially the same terms as those prevailing at the time for comparable transaction with other persons.

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:

	Year ended December 31, 2023
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	182,283	19,683	125,816	21,454	10,759	4,571
Provision for credit losses	20,790		2,645	6,748	1,996	969	8,432
Charge-offs	(15,095)		(20)	(2,080)	(3,891)	(129)	(8,975)
Recoveries	4,779		17	440	1,635	167	2,520
Balance at end of period	$	192,757	22,325	130,924	21,194	11,766	6,548

 

	Year ended December 31, 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	17,433		3,162	7,231	(704)	1,943	5,801
Charge-offs	(14,970)		(17)	(2,171)	(4,201)	(85)	(8,496)
Recoveries	7,155		80	2,855	1,656	335	2,229
Balance at end of period	$	182,283	19,683	125,816	21,454	10,759	4,571

	Year ended December 31, 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
Acquisitions	371		—	309	62	—	—
Provision for credit losses	16,380		6,517	28,996	(23,444)	186	4,125
Charge-offs	(11,594)		(38)	(279)	(4,826)	(45)	(6,406)
Recoveries	9,265		375	1,876	3,778	243	2,993
Balance at end of period	$	172,665	16,458	117,901	24,703	8,566	5,037

During the years ended December 31, 2023, and December 31, 2022, the ACL increased primarily as a result of organic loan growth. During the year ended December 31, 2021, the ACL increased primarily as a result of the $18,056,000 provision for credit losses recorded as a result of the Alta acquisition.

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 year ended December 31, 2023, 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:

	December 31, 2023
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	43,455	5,342	18,134	12,745	3,006	4,228
Accruing loans 60-89 days past due	6,512		729	2,439	774	1,527	1,043
Accruing loans 90 days or more past due	3,312		107	2,161	530	283	231
Non-accrual loans with no ACL	20,722		2,562	13,680	1,869	1,966	645
Non-accrual loans with ACL	94		—	—	7	—	87
Total past due and   non-accrual loans	74,095		8,740	36,414	15,925	6,782	6,234
Current loans receivable	16,123,987		1,695,804	10,266,892	2,885,938	881,231	394,122
Total loans receivable	$	16,198,082	1,704,544	10,303,306	2,901,863	888,013	400,356

 

	December 31, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	16,331	2,796	5,462	4,192	754	3,127
Accruing loans 60-89 days past due	4,636		142	2,865	297	529	803
Accruing loans 90 days or more past due	1,559		215	472	542	138	192
Non-accrual loans with no ACL	31,036		2,236	22,943	3,790	1,234	833
Non-accrual loans with ACL	115		—	—	56	—	59
Total past due and non-accrual loans	53,677		5,389	31,742	8,877	2,655	5,014
Current loans receivable	15,193,135		1,440,619	9,765,305	2,790,791	819,577	376,843
Total loans receivable	$	15,246,812	1,446,008	9,797,047	2,799,668	822,232	381,857

The Company had $356,000, $1,175,000, and $660,000 of interest reversed on non-accrual loans during the year ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

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 2023, there were no significant changes 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:

	December 31, 2023
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Business assets	$	3,236	—	6	3,230	—	—
Residential real estate	17,578		11,099	4,317	98	1,968	96
Other real estate	21,635		35	20,598	620	25	357
Other	595		—	—	15	—	580
Total	$	43,044	11,134	24,921	3,963	1,993	1,033

	December 31, 2022
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Business assets	$	3,172	—	32	3,140	—	—
Residential real estate	5,061		2,407	990	318	1,201	145
Other real estate	33,125		49	32,333	300	75	368
Other	1,155		—	—	530	—	625
Total	$	42,513	2,456	33,355	4,288	1,276	1,138

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

On January 1, 2023, the Company adopted FASB ASU 2022-02, Financial Instruments - Credit Losses Troubled Debt Restructurings and Vintage Disclosures, which changed the disclosures and classifications of loans previously considered TDRs. The following disclosures for loan modifications made to borrowers experiencing financial difficulty (“MBFD”) are presented in accordance with ASC Topic 310. The following tables shows the amortized cost basis at the end of the period of the loans modified to borrowers experiencing financial difficulty by segment:

	At or for the Year ended December 31, 2023
	Term Extension and Payment Deferral				Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized Cost Basis		% of Total Class of Financing Receivable		Total
Residential real estate	$	679	—	%	$	—	—	%	$	679
Commercial real estate	46,028		0.40	%	2,863		—	%	48,891
Other commercial	9,218		0.30	%	1,702		0.10	%	10,920
Home equity	49		—	%	—		—	%	49
Other consumer	20		—	%	—		—	%	20
Total	$	55,994			$	4,565			$	60,559

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty by segment:

	At or for the Year ended December 31, 2023
	Weighted Average Interest Rate Reduction		Weighted Average Term Extension	Principal Forgiveness
Residential real estate	—	%	1 month	—
Commercial real estate	0.88%		1.1 years	—
Other commercial	0.24%		8 months	—
Home equity	—%		7 months	—
Other consumer	—%		10 months	$10,000 thousand

The following table depicts the performance of loans that have been modified in the last twelve months by segment:

	December 31, 2023
(Dollars in thousands)	Total		Current	30-89 Days Past Due	90 Days or More Past Due	Non-Accrual
Residential real estate	$	679	679	—	—	—
Commercial real estate	48,891		45,181	2,159	—	1,551
Other commercial	10,920		10,360	31	—	529
Home equity	49		—	—	—	49
Other consumer	20		20	—	—	—
Total	$	60,559	56,240	2,190	—	2,129

Loans that were modified in the twelve months that had a payment default during the period had an ending balances of $2,159,000 and $37,000 at December 31, 2023, and were included in commercial real estate and other commercial loans, respectively. There were $5,361,000 of additional unfunded commitments on MBFDs outstanding at December 31, 2023. At December 31, 2023 and 2022, the Company had $98,000 and $270,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At December 31, 2023 and 2022, the Company had $15,000 and $0, respectively, of OREO secured by residential real estate properties.

Additional Disclosures

The implementation of FASB ASU 2022-02, Financial Instruments - Credit Losses Trouble Deb Restructings and Vintage Disclosures, eliminated the guidance and disclosure requirements related to TDRs. The following tables represent disclosures for the prior period that are no longer required as of January 1, 2023, but are included in this Annual Report 10-K since the Company is required to disclose comparative information with respected to restructured loans. A restructured loan was 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:

	Year ended December 31, 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	11		1	4	6	—	—
Pre-modification recorded balance	$	5,616	31	4,266	1,319	—	—
Post-modification recorded balance	$	6,346	31	4,862	1,453	—	—

	Year ended December 31, 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	12		1	5	3	1	2
Pre-modification recorded balance	$	2,442	210	1,473	554	54	151
Post-modification recorded balance	$	2,442	210	1,473	554	54	151

The modifications for the loans designated as TDRs during the years ended December 31, 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 $1,253,000 and $1,628,000 for the years ended December 31, 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 loan segment for the years ended December 31, 2022, and 2021.

There were $437,000 of additional unfunded commitments on TDRs outstanding at December 31, 2022, respectively. The were no charge-offs on TDRs during 2022 and 2021.

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.

	December 31, 2023
(Dollars in thousands)	Gross Charge-Offs		Total	Pass	Special Mention	Substandard	Doubtful/ Loss
Commercial real estate loans
Term loans by origination year
2023	$	889	1,316,100	1,313,446	97	2,557	—
2022	430		2,547,939	2,520,484	12,855	14,600	—
2021	145		2,200,677	2,178,153	19,782	2,742	—
2020	—		1,130,117	1,124,525	—	5,592	—
2019	—		691,810	656,203	1,104	34,503	—
Prior	616		2,129,808	2,053,011	18,818	57,948	31
Revolving loans	—		286,855	285,432	1	1,421	1
Total	$	2,080	10,303,306	10,131,254	52,657	119,363	32
Other commercial loans
Term loans by origination year
2023	$	3,080	369,059	367,337	—	1,603	119
2022	406		566,295	561,567	3,319	1,408	1
2021	—		531,558	519,151	10,187	2,218	2
2020	92		245,962	240,613	—	5,347	2
2019	—		145,828	141,336	—	4,490	2
Prior	313		448,619	443,400	—	5,219	—
Revolving loans	—		594,542	577,953	11,977	4,612	—
Total	$	3,891	2,901,863	2,851,357	25,483	24,897	126

	December 31, 2022
(Dollars in thousands)	Total		Pass	Special Mention	Substandard	Doubtful/ Loss
Commercial real estate loans
Term loans by origination year
2022	$	2,584,831	2,578,558	—	6,273	—
2021	2,457,790		2,454,696	—	3,094	—
2020	1,274,852		1,269,254	—	5,598	—
2019	744,634		709,246	—	35,388	—
2018	658,268		634,316	—	23,952	—
Prior	1,851,965		1,787,941	1,416	62,576	32
Revolving loans	224,707		224,629	—	78	—
Total	$	9,797,047	9,658,640	1,416	136,959	32
Other commercial loans
Term loans by origination year
2022	$	603,393	599,498	371	3,469	55
2021	573,273		569,542	—	2,707	1,024
2020	308,555		304,179	—	4,373	3
2019	191,498		185,748	—	5,748	2
2018	140,122		135,727	—	4,394	1
Prior	404,319		398,523	114	5,322	360
Revolving loans	578,508		567,770	—	10,604	134
Total	$	2,799,668	2,760,987	485	36,617	1,579

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:

	December 31, 2023
(Dollars in thousands)	Gross Charge-Offs		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
2023	$	—	234,568	233,753	815	—
2022	5		673,782	671,196	2,586	—
2021	—		495,645	495,645	—	—
2020	—		99,199	99,199	—	—
2019	—		42,054	42,054	—	—
Prior	15		158,828	153,489	2,670	2,669
Revolving loans	—		468	468	—	—
Total	$	20	1,704,544	1,695,804	6,071	2,669
Home equity loans
Term loans by origination year
2023	$	—	—	—	—	—
2022	—		20	20	—	—
2021	48		—	—	—	—
2020	50		21	21	—	—
2019	—		178	178	—	—
Prior	31		5,492	5,277	11	204
Revolving loans	—		882,302	875,735	4,522	2,045
Total	$	129	888,013	881,231	4,533	2,249
Other consumer loans
Term loans by origination year
2023	$	7,801	139,295	137,035	2,079	181
2022	715		98,630	97,536	870	224
2021	170		62,961	62,107	805	49
2020	85		29,143	29,012	119	12
2019	73		12,335	12,279	43	13
Prior	131		17,314	16,664	173	477
Revolving loans	—		40,678	39,489	1,182	7
Total	$	8,975	400,356	394,122	5,271	963

	December 31, 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	$	543,469	543,023	446	—
2021	552,748		551,756	992	—
2020	116,810		116,543	136	131
2019	45,055		44,604	451	—
2018	37,252		36,993	—	259
Prior	149,292		146,318	913	2,061
Revolving loans	1,382		1,382	—	—
Total	$	1,446,008	1,440,619	2,938	2,451
Home equity loans
Term loans by origination year
2022	$	60	60	—	—
2021	77		77	—	—
2020	82		82	—	—
2019	225		195	—	30
2018	594		594	—	—
Prior	7,165		6,868	131	166
Revolving loans	814,029		811,701	1,152	1,176
Total	$	822,232	819,577	1,283	1,372
Other consumer loans
Term loans by origination year
2022	$	152,685	149,702	2,825	158
2021	94,210		93,749	421	40
2020	49,257		48,990	212	55
2019	20,432		20,166	96	170
2018	10,598		9,970	91	537
Prior	16,014		15,786	106	122
Revolving loans	38,661		38,480	179	2
Total	$	381,857	376,843	3,930	1,084