XML 35 R15.htm IDEA: XBRL DOCUMENT v3.22.4
Allowance for Credit Losses on Loans and Leases
 12 Months Ended
Dec. 31, 2022
Allowance For Credit Losses On Loans And Leases [Abstract]  
Allowance for Credit Losses on Loans and Leases

NOTE 7: ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES

Allowance for Credit Losses on Loans and Leases

The following table summarizes activity in the allowance for loan and lease losses for the periods indicated:

 

 

 

Twelve Months Ended December 31,

 

 

 

2022

 

 

2021

 

(in millions)

 

Mortgage

 

 

Other

 

 

Total

 

 

Mortgage

 

 

Other

 

 

Total

 

Balance, beginning of period

 

$

178

 

 

$

21

 

 

$

199

 

 

$

176

 

 

$

18

 

 

$

194

 

Adjustment for Purchased PCD Loans

 

 

21

 

 

 

30

 

 

 

51

 

 

 

—

 

 

 

—

 

 

 

—

 

Charge-offs

 

 

(5

)

 

 

(2

)

 

 

(7

)

 

 

(6

)

 

 

(7

)

 

 

(13

)

Recoveries

 

 

4

 

 

 

7

 

 

 

11

 

 

 

2

 

 

 

13

 

 

 

15

 

Provision for (recovery of) credit
   losses on loans and leases

 

 

92

 

 

 

47

 

 

 

139

 

 

 

6

 

 

 

(3

)

 

 

3

 

Balance, end of period

 

$

290

 

 

$

103

 

 

$

393

 

 

$

178

 

 

$

21

 

 

$

199

 

At December 31, 2022, the allowance for credit losses on loans and leases totaled $393 million, up $194 million compared to December 31, 2021, driven primarily by the initial provision for credit losses and the adjustment for PCD loans acquired in the Flagstar acquisition. In addition, the increase was also driven by net recoveries of $4 million during the year 2022.

At December 31, 2022 and 2021, the allowance for unfunded commitments totaled $23 million and $12 million, respectively.

For the year ended December 31, 2022 the increase in the allowance for credit losses on loans and leases was primarily driven by a combination of increased loan balances as a result of the Flagstar acquisition and changes in the macroeconomic environment both on a spot and forecasted basis, specifically the inflationary pressures leading to sharp increases in interest rates and a slow-down of prepayment activity leading to longer weighted average lives on the balance sheet. In addition, the impact of the forecasted macroeconomic factors had resultant decreases on market level factors in Property Prices on the Multi-Family, Commercial Real Estate and 1-4 Family loan portfolios reflecting the changing economic landscape.

The Company charges off loans, or portions of loans, in the period that such loans, or portions thereof, are deemed uncollectible. The collectability of individual loans is determined through an assessment of the financial condition and repayment capacity of the borrower and/or through an estimate of the fair value of any underlying collateral. For non-real estate-related consumer credits, the following past-due time periods determine when charge-offs are typically recorded: (1) closed-end credits are charged off in the quarter that the loan becomes 120 days past due; (2) open-end credits are charged off in the quarter that the loan becomes 180 days past due; and (3) both closed-end and open-end credits are typically charged off in the quarter that the credit is 60 days past the date the Company received notification that the borrower has filed for bankruptcy.

The following table presents additional information about the Company’s nonaccrual loans at December 31, 2022:

 

(in millions)

 

Recorded
Investment

 

 

Related
Allowance

 

 

Interest
Income
Recognized

 

Nonaccrual loans with no related allowance:

 

 

 

 

 

 

 

 

 

Multi-family

 

$

13

 

 

$

—

 

 

$

—

 

Commercial real estate

 

 

19

 

 

 

—

 

 

 

1

 

One-to-four family first mortgage

 

 

90

 

 

 

—

 

 

 

—

 

Acquisition, development, and construction

 

 

—

 

 

 

—

 

 

 

—

 

Other (includes C&I)

 

 

3

 

 

 

—

 

 

 

—

 

Total nonaccrual loans with no related allowance

 

$

125

 

 

$

—

 

 

$

1

 

Nonaccrual loans with an allowance recorded:

 

 

 

 

 

 

 

 

 

Multi-family

 

$

—

 

 

$

—

 

 

$

—

 

Commercial real estate

 

 

1

 

 

 

—

 

 

 

—

 

One-to-four family first mortgage

 

 

2

 

 

 

—

 

 

 

—

 

Acquisition, development, and construction

 

 

—

 

 

 

—

 

 

 

—

 

Other (includes C&I)

 

 

13

 

 

 

14

 

 

 

—

 

Total nonaccrual loans with an allowance recorded

 

$

16

 

 

$

14

 

 

$

—

 

Total nonaccrual loans:

 

 

 

 

 

 

 

 

 

Multi-family

 

$

13

 

 

$

—

 

 

$

—

 

Commercial real estate

 

 

20

 

 

 

—

 

 

 

1

 

One-to-four family first mortgage

 

 

92

 

 

 

—

 

 

 

—

 

Acquisition, development, and construction

 

 

—

 

 

 

—

 

 

 

—

 

Other (includes C&I)

 

 

16

 

 

 

14

 

 

 

—

 

Total nonaccrual loans

 

$

141

 

 

$

14

 

 

$

1

 

 

The following table presents additional information about the Company’s nonaccrual loans at December 31, 2021

 

(in millions)

 

Recorded
Investment

 

 

Related
Allowance

 

 

Interest
Income
Recognized

 

Nonaccrual loans with no related allowance:

 

 

 

 

 

 

 

 

 

Multi-family

 

$

9

 

 

$

—

 

 

$

1

 

Commercial real estate

 

 

14

 

 

 

—

 

 

 

—

 

One-to-four family first mortgage

 

 

—

 

 

 

—

 

 

 

—

 

Acquisition, development, and construction

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

6

 

 

 

—

 

 

 

—

 

Total nonaccrual loans with no related allowance

 

$

29

 

 

$

—

 

 

$

1

 

Nonaccrual loans with an allowance recorded:

 

 

 

 

 

 

 

 

 

Multi-family

 

$

1

 

 

$

—

 

 

$

—

 

Commercial real estate

 

 

2

 

 

 

—

 

 

 

—

 

One-to-four family first mortgage

 

 

1

 

 

 

—

 

 

 

—

 

Acquisition, development, and construction

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

Total nonaccrual loans with an allowance recorded

 

$

4

 

 

$

—

 

 

$

—

 

Total nonaccrual loans:

 

 

 

 

 

 

 

 

 

Multi-family

 

$

10

 

 

$

—

 

 

$

1

 

Commercial real estate

 

 

16

 

 

 

—

 

 

 

—

 

One-to-four family first mortgage

 

 

1

 

 

 

—

 

 

 

—

 

Acquisition, development, and construction

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

6

 

 

 

—

 

 

 

—

 

Total nonaccrual loans

 

$

33

 

 

$

—

 

 

$

1