NEW ACCOUNTING PRONOUNCEMENTS

12 Months Ended

Dec. 31, 2022

Accounting Changes And Error Corrections [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

2. NEW ACCOUNTING PRONOUNCEMENTS

Credit Losses In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.”  In April and November 2019, the FASB issued implementation amendments to the June 2016 ASU (collectively, the amended guidance).  The amended guidance replaced the current incurred loss methodology for

recognizing credit losses with a current expected credit loss model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.  The amended guidance broadened the information that an entity must consider in developing its expected credit loss estimates.  Additionally, the updates amended the accounting for credit losses for available-for-sale debt securities and purchased financial assets with a more-than-insignificant amount of credit deterioration since origination.  The amended guidance required enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s loan portfolio.  The Company adopted the amended guidance on January 1, 2020 using a modified retrospective approach for adoption.  Results for the reporting periods beginning after December 31, 2019 are presented under ASC Topic 326, Financial Instruments – Credit Losses, while prior period amounts continue to be presented in accordance with previously applicable GAAP.  Upon adoption, the Company recorded a cumulative effect adjustment to the Company’s Consolidated Balance Sheets of $9.0 million as an increase to the allowance for credit losses and $7.0 million as a reduction to retained earnings, net of deferred tax balances.  See Note 3, “Loans and Allowance for Credit Losses” for related disclosures.

Troubled Debt Restructurings In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures.” The ASU eliminates the accounting guidance for troubled debt restructurings (TDR) by creditors and enhances disclosure requirements for certain loan re-financings and restructurings by creditors when a borrower is experiencing financial difficulty. The amendments also add requirements to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases, disclosed by credit-quality indicator and class of financing receivable. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in an interim period. The adoption of this accounting pronouncement will have no impact on the Consolidated Financial Statements aside from additional and revised disclosures.