Loans Receivable, Net

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Loans Receivable, Net

Loans Receivable, Net

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

.

(Dollars in thousands)	September 30, 2024		December 31, 2023
Residential real estate	$	1,837,697	1,704,544
Commercial real estate	10,833,841		10,303,306
Other commercial	3,177,051		2,901,863
Home equity	931,440		888,013
Other consumer	401,158		400,356
Loans receivable	17,181,187		16,198,082
Allowance for credit losses	(205,170)		(192,757)
Loans receivable, net	$	16,976,017	16,005,325
Net deferred origination (fees) costs included in loans receivable	$	(27,749)	(25,577)
Net purchase accounting (discounts) premiums included in loans receivable	$	(36,722)	(13,802)
Accrued interest receivable on loans	$	85,533	67,362

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 markets.

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 nine months ended September 30, 2024.

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 September 30, 2024
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	200,955	24,653	136,346	22,219	11,261	6,476
Provision for credit losses	6,981		626	2,176	1,947	145	2,087
Charge-offs	(3,976)		—	—	(1,456)	(2)	(2,518)
Recoveries	1,210		10	25	459	54	662
Balance at end of period	$	205,170	25,289	138,547	23,169	11,458	6,707

	Three Months ended September 30, 2023
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	189,385	20,847	129,598	21,797	11,053	6,090
Provision for credit losses	5,095		848	1,415	306	534	1,992
Charge-offs	(3,201)		—	(203)	(654)	—	(2,344)
Recoveries	992		2	42	322	37	589
Balance at end of period	$	192,271	21,697	130,852	21,771	11,624	6,327

	Nine Months ended September 30, 2024
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Balance at beginning of period	$	192,757	22,325	130,924	21,194	11,766	6,548
Acquisitions	3		—	3	—	—	—
Provision for credit losses	21,138		2,934	7,965	5,321	(409)	5,327
Charge-offs	(12,406)		—	(395)	(4,849)	(27)	(7,135)
Recoveries	3,678		30	50	1,503	128	1,967
Balance at end of period	$	205,170	25,289	138,547	23,169	11,458	6,707

	Nine Months ended September 30, 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	16,609		2,021	5,369	1,845	881	6,493
Charge-offs	(10,284)		(20)	(619)	(2,895)	(102)	(6,648)
Recoveries	3,663		13	286	1,367	86	1,911
Balance at end of period	$	192,271	21,697	130,852	21,771	11,624	6,327

During the nine months ended September 30, 2024, the ACL increased primarily as a result of loan portfolio growth.

The sizeable charge-offs in the other consumer loan segment was driven by deposit overdraft charge-offs which typically experience high charge-off rates and the amounts were comparable to historical trends. The other segments generally experience routine charge-offs and recoveries, with occasional large credit relationships charge-offs and recoveries that cause fluctuations from prior periods. During the nine months ended September 30, 2024, 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:

	September 30, 2024
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	32,973	133	10,608	15,680	3,142	3,410
Accruing loans 60-89 days past due	23,240		2,621	4,685	13,371	1,556	1,007
Accruing loans 90 days or more past due	11,551		2,003	5,415	2,698	971	464
Non-accrual loans with no ACL	13,669		3,319	5,715	1,839	1,995	801
Non-accrual loans with ACL	2,268		—	2,145	20	—	103
Total past due and   non-accrual loans	83,701		8,076	28,568	33,608	7,664	5,785
Current loans receivable	17,097,486		1,829,621	10,805,273	3,143,443	923,776	395,373
Total loans receivable	$	17,181,187	1,837,697	10,833,841	3,177,051	931,440	401,158

 

	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

The Company had $163,000 and $108,000 of interest reversed on non-accrual loans during the nine months ended September 30, 2024 and September 30, 2023, 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 the nine months ended September 30, 2024, 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:

	September 30, 2024
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Business assets	$	11,901	—	—	11,901	—	—
Residential real estate	13,725		3,316	7,676	516	1,976	241
Other real estate	29,401		3	27,807	1,198	19	374
Other	831		—	—	238	—	593
Total	$	55,858	3,319	35,483	13,853	1,995	1,208

	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

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

The following disclosures for loan modifications made to borrowers experiencing financial difficulty (“MBFD”) are presented in accordance with ASC Topic 310. The following tables show 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 Three Months ended September 30, 2024
	Term Extension and Payment Deferral				Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost Basis		% of Total Class		Amortized Cost Basis		% of Total Class		Total
Commercial real estate	$	1,509	—	%	$	—	—	%	$	1,509
Other commercial	4,193		0.1	%	—		—	%	4,193
Total	$	5,702			$	—			$	5,702

	At or for the Three Months ended September 30, 2023
	Term Extension and Payment Deferral				Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost Basis		% of Total Class		Amortized Cost Basis		% of Total Class		Total
Residential real estate	$	679	—	%	$	—	—	%	$	679
Commercial real estate	32,090		0.3	%	2,534		—	%	34,624
Other commercial	5,069		0.2	%	1,176		—	%	6,245
Other consumer	102		—	%	550		0.1	%	652
Total	$	37,940			$	4,260			$	42,200

	At or for the Nine Months ended September 30, 2024
	Term Extension and Payment Deferral				Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost Basis		% of Total Class		Amortized Cost Basis		% of Total Class		Total
Residential real estate	$	204	—	%	$	—	—	%	$	204
Commercial real estate	11,727		0.1	%	27,979		0.3	%	39,706
Other commercial	13,728		0.4	%	—		—	%	13,728
Total	$	25,659			$	27,979			$	53,638

	At or for the Nine Months ended September 30, 2023
	Term Extension and Payment Deferral				Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost Basis		% of Total Class		Amortized Cost Basis		% of Total Class		Total
Residential real estate	$	679	—	%	$	—	—	%	$	679
Commercial real estate	37,880		0.4	%	2,869		—	%	40,749
Other commercial	10,398		0.4	%	1,199		—	%	11,597
Home equity	51		—	%	—		—	%	51
Other consumer	118		—	%	550		0.1	%	668
Total	$	49,126			$	4,618			$	53,744

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty by segment:

	At or for the Three Months ended September 30, 2024
	Weighted Average Interest Rate Reduction	Weighted Average Term Extension	Principal Forgiveness
Other commercial	—%	7 months	—

	At or for the Three Months ended September 30, 2023
	Weighted Average Interest Rate Reduction	Weighted Average Term Extension	Principal Forgiveness
Commercial real estate	0.17%	6 months	—
Other commercial	0.04%	7 months	—
Home equity	1.17%	1 year, 10 months	—

	At or for the Nine Months ended September 30, 2024
	Weighted Average Interest Rate Reduction	Weighted Average Term Extension	Principal Forgiveness
Residential real estate	—%	1 year, 8 months	—
Commercial real estate	2.08%	1 year, 1 month	—
Other commercial	—%	3 months	—

	At or for the Nine Months ended September 30, 2023
	Weighted Average Interest Rate Reduction	Weighted Average Term Extension	Principal Forgiveness
Commercial real estate	0.19%	8 months	—
Other commercial	0.04%	1 year, 7 months	—
Other consumer	1.17%	1 year, 10 months	$10 thousand

There were no loans modified in the twelve months that had a payment default during the period at September 30, 2024. There were $638,000 and $5,361,000 of additional unfunded commitments on MBFDs outstanding at September 30, 2024 and December 31, 2023, respectively. At September 30, 2024 and December 31, 2023, the Company had $76,000 and $98,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At September 30, 2024 and December 31, 2023, the Company had $0 and $15,000, respectively, of OREO secured by residential real estate properties.

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

	September 30, 2024
(Dollars in thousands)	Total		Current	30-89 Days Past Due	90 Days or More Past Due	Non-Accrual
Residential real estate	$	204	204	—	—	—
Commercial real estate	39,706		37,143	101	561	1,901
Other commercial	13,728		12,922	806	—	—
Total	$	53,638	50,269	907	561	1,901

	September 30, 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	40,749		39,196	—	—	1,553
Other commercial	11,597		10,081	926	25	565
Home equity	51		—	—	—	51
Other consumer	668		668	—	—	—
Total	$	53,744	50,624	926	25	2,169

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.

	September 30, 2024
(Dollars in thousands)	Gross Charge-Offs		Total	Pass	Special Mention	Substandard	Doubtful/ Loss
Commercial real estate loans
Term loans by origination year
2024 (year-to-date)	$	—	961,105	929,837	3,288	27,980	—
2023	—		1,347,109	1,324,359	20,171	2,579	—
2022	72		2,436,334	2,367,328	42,098	26,908	—
2021	—		2,118,399	2,082,746	22,744	12,909	—
2020	5		1,076,187	1,068,940	—	7,247	—
Prior	318		2,580,465	2,509,239	28,535	42,691	—
Revolving loans	—		314,242	310,004	3,100	1,137	1
Total	$	395	10,833,841	10,592,453	119,936	121,451	1
Other commercial loans
Term loans by origination year
2024 (year-to-date)	$	3,526	284,596	283,831	566	156	43
2023	73		358,204	354,798	635	2,771	—
2022	298		546,601	534,151	1,259	11,143	48
2021	422		495,113	475,194	10,294	9,615	10
2020	284		222,404	218,060	268	4,075	1
Prior	246		534,047	507,283	—	26,764	—
Revolving loans	—		736,086	703,921	19,031	13,120	14
Total	$	4,849	3,177,051	3,077,238	32,053	67,644	116

	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

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:

	September 30, 2024
(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
2024 (year-to-date)	$	—	134,710	134,389	321	—
2023	—		292,783	292,088	174	521
2022	—		664,274	663,051	467	756
2021	—		467,136	466,558	—	578
2020	—		93,073	93,073	—	—
Prior	—		185,721	180,462	1,792	3,467
Revolving loans	—		—	—	—	—
Total	$	—	1,837,697	1,829,621	2,754	5,322
Home equity loans
Term loans by origination year
2024 (year-to-date)	$	—	211	211	—	—
2023	17		1,165	1,165	—	—
2022	—		2,102	2,102	—	—
2021	—		893	893	—	—
2020	—		83	83	—	—
Prior	10		4,558	4,439	33	86
Revolving loans	—		922,428	914,883	4,665	2,880
Total	$	27	931,440	923,776	4,698	2,966
Other consumer loans
Term loans by origination year
2024 (year-to-date)	$	6,156	96,566	94,696	1,804	66
2023	325		99,808	98,939	542	327
2022	323		71,791	70,439	1,133	219
2021	209		43,649	42,851	325	473
2020	24		20,749	20,681	22	46
Prior	98		22,138	21,862	72	204
Revolving loans	—		46,457	45,905	519	33
Total	$	7,135	401,158	395,373	4,417	1,368

	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