XML 24 R14.htm IDEA: XBRL DOCUMENT v3.23.2
Loans and leases and the allowance for credit losses
 6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
Loans and leases and the allowance for credit losses

4. Loans and leases and the allowance for credit losses

A summary of current, past due and nonaccrual loans as of June 30, 2023 and December 31, 2022 follows:

 

 

Current

 

 

30-89 Days
Past Due

 

 

Accruing
Loans Past
Due 90
Days or
More

 

 

Nonaccrual

 

 

Total

 

 

 

(In thousands)

 

June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

43,939,557

 

 

$

289,931

 

 

$

38,039

 

 

$

416,022

 

 

$

44,683,549

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

34,861,282

 

 

 

450,072

 

 

 

37,542

 

 

 

1,383,190

 

 

 

36,732,086

 

Residential builder and developer

 

 

1,115,373

 

 

 

18,745

 

 

 

—

 

 

 

1,193

 

 

 

1,135,311

 

Other commercial construction

 

 

6,465,258

 

 

 

154,908

 

 

 

15,124

 

 

 

146,024

 

 

 

6,781,314

 

Residential

 

 

21,666,324

 

 

 

581,806

 

 

 

284,410

 

 

 

238,509

 

 

 

22,771,049

 

Residential — limited documentation

 

 

900,609

 

 

 

23,945

 

 

 

—

 

 

 

66,614

 

 

 

991,168

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

4,669,522

 

 

 

26,478

 

 

 

—

 

 

 

77,090

 

 

 

4,773,090

 

Recreational finance

 

 

9,171,034

 

 

 

53,483

 

 

 

—

 

 

 

32,286

 

 

 

9,256,803

 

Automobile

 

 

4,020,722

 

 

 

40,974

 

 

 

—

 

 

 

21,791

 

 

 

4,083,487

 

Other

 

 

2,062,277

 

 

 

15,769

 

 

 

4,964

 

 

 

52,862

 

 

 

2,135,872

 

Total

 

$

128,871,958

 

 

$

1,656,111

 

 

$

380,079

 

 

$

2,435,581

 

 

$

133,343,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

 

Commercial, financial, leasing, etc.

 

$

40,982,398

 

 

$

448,462

 

 

$

72,502

 

 

$

347,204

 

 

$

41,850,566

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

34,972,627

 

 

 

311,188

 

 

 

67,696

 

 

 

1,396,662

 

 

 

36,748,173

 

Residential builder and developer

 

 

1,304,798

 

 

 

8,703

 

 

 

—

 

 

 

1,229

 

 

 

1,314,730

 

Other commercial construction

 

 

6,936,661

 

 

 

239,521

 

 

 

549

 

 

 

124,937

 

 

 

7,301,668

 

Residential

 

 

21,491,506

 

 

 

595,897

 

 

 

345,402

 

 

 

272,090

 

 

 

22,704,895

 

Residential — limited documentation

 

 

950,782

 

 

 

22,456

 

 

 

—

 

 

 

77,814

 

 

 

1,051,052

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

4,891,311

 

 

 

30,787

 

 

 

—

 

 

 

84,788

 

 

 

5,006,886

 

Recreational finance

 

 

8,974,171

 

 

 

54,593

 

 

 

—

 

 

 

44,630

 

 

 

9,073,394

 

Automobile

 

 

4,393,206

 

 

 

44,486

 

 

 

—

 

 

 

39,584

 

 

 

4,477,276

 

Other

 

 

1,958,196

 

 

 

22,961

 

 

 

4,869

 

 

 

49,497

 

 

 

2,035,523

 

Total

 

$

126,855,656

 

 

$

1,779,054

 

 

$

491,018

 

 

$

2,438,435

 

 

$

131,564,163

 

 

 

4. Loans and leases and the allowance for credit losses, continued

One-to-four family residential mortgage loans held for sale were $216 million and $32 million at June 30, 2023 and December 31, 2022, respectively. Commercial real estate loans held for sale were $322 million at June 30, 2023 and $131 million at December 31, 2022.

Credit quality indicators

The Company utilizes a loan grading system to differentiate risk amongst its commercial loans and commercial real estate loans. Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more.

Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s credit personnel review all criticized commercial loans and commercial real estate loans greater than $1 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing.

 

4. Loans and leases and the allowance for credit losses, continued

The following table summarizes the loan grades applied at June 30, 2023 to the various classes of the Company’s commercial loans and commercial real estate loans and gross charge-offs for those types of loans for the three-month and six-month periods ended June 30, 2023 by origination year.

 

 

Term Loans by Origination Year

 

 

Revolving

 

 

Revolving Loans Converted to Term

 

 

 

 

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Loans

 

 

Loans

 

 

Total

 

 

 

(In thousands)

 

Commercial, financial, leasing, etc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

4,084,263

 

 

 

7,437,543

 

 

 

4,342,236

 

 

 

1,680,841

 

 

 

1,434,684

 

 

 

2,313,703

 

 

 

21,051,384

 

 

 

45,539

 

 

$

42,390,193

 

Criticized accrual

 

 

89,277

 

 

 

242,232

 

 

 

245,040

 

 

 

169,817

 

 

 

108,865

 

 

 

282,663

 

 

 

715,380

 

 

 

24,060

 

 

 

1,877,334

 

Criticized nonaccrual

 

 

12,072

 

 

 

48,988

 

 

 

44,163

 

 

 

23,131

 

 

 

27,809

 

 

 

94,343

 

 

 

156,738

 

 

 

8,778

 

 

 

416,022

 

Total commercial,
   financial, leasing, etc.

 

$

4,185,612

 

 

 

7,728,763

 

 

 

4,631,439

 

 

 

1,873,789

 

 

 

1,571,358

 

 

 

2,690,709

 

 

 

21,923,502

 

 

 

78,377

 

 

$

44,683,549

 

Gross charge-offs three months ended June 30, 2023

 

$

728

 

 

 

6,854

 

 

 

4,705

 

 

 

3,999

 

 

 

2,214

 

 

 

2,758

 

 

 

—

 

 

 

—

 

 

$

21,258

 

Gross charge-offs six months ended June 30, 2023

 

$

835

 

 

 

10,958

 

 

 

8,110

 

 

 

6,752

 

 

 

4,517

 

 

 

8,315

 

 

 

773

 

 

 

—

 

 

$

40,260

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

2,087,296

 

 

 

3,865,108

 

 

 

3,188,161

 

 

 

3,200,526

 

 

 

4,693,259

 

 

 

12,993,821

 

 

 

797,521

 

 

 

—

 

 

$

30,825,692

 

Criticized accrual

 

 

—

 

 

 

403,062

 

 

 

434,027

 

 

 

354,736

 

 

 

788,370

 

 

 

2,519,575

 

 

 

23,434

 

 

 

—

 

 

 

4,523,204

 

Criticized nonaccrual

 

 

—

 

 

 

50,989

 

 

 

25,903

 

 

 

258,813

 

 

 

146,925

 

 

 

894,172

 

 

 

6,388

 

 

 

—

 

 

 

1,383,190

 

Total commercial real
   estate

 

$

2,087,296

 

 

 

4,319,159

 

 

 

3,648,091

 

 

 

3,814,075

 

 

 

5,628,554

 

 

 

16,407,568

 

 

 

827,343

 

 

 

—

 

 

$

36,732,086

 

Gross charge-offs three months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

424

 

 

 

51,516

 

 

 

49,433

 

 

 

—

 

 

 

—

 

 

$

101,373

 

Gross charge-offs six months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

424

 

 

 

77,906

 

 

 

51,911

 

 

 

—

 

 

 

—

 

 

$

130,241

 

Residential builder and developer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

215,809

 

 

 

518,867

 

 

 

99,364

 

 

 

9,681

 

 

 

7,122

 

 

 

15,204

 

 

 

126,638

 

 

 

—

 

 

$

992,685

 

Criticized accrual

 

 

1,013

 

 

 

6,499

 

 

 

34,803

 

 

 

2,329

 

 

 

74,015

 

 

 

20,601

 

 

 

2,173

 

 

 

—

 

 

 

141,433

 

Criticized nonaccrual

 

 

—

 

 

 

—

 

 

 

675

 

 

 

—

 

 

 

518

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,193

 

Total residential builder
   and developer

 

$

216,822

 

 

 

525,366

 

 

 

134,842

 

 

 

12,010

 

 

 

81,655

 

 

 

35,805

 

 

 

128,811

 

 

 

—

 

 

$

1,135,311

 

Gross charge-offs three months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

44

 

 

 

172

 

 

 

—

 

 

$

216

 

Gross charge-offs six months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

55

 

 

 

1,678

 

 

 

—

 

 

$

1,733

 

Other commercial construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

391,286

 

 

 

1,373,928

 

 

 

1,025,430

 

 

 

952,484

 

 

 

550,745

 

 

 

271,623

 

 

 

15,867

 

 

 

—

 

 

$

4,581,363

 

Criticized accrual

 

 

245

 

 

 

53,186

 

 

 

173,616

 

 

 

446,290

 

 

 

945,352

 

 

 

435,238

 

 

 

—

 

 

 

—

 

 

 

2,053,927

 

Criticized nonaccrual

 

 

—

 

 

 

—

 

 

 

10,202

 

 

 

42,275

 

 

 

63,702

 

 

 

27,422

 

 

 

2,423

 

 

 

—

 

 

 

146,024

 

Total other commercial
   construction

 

$

391,531

 

 

 

1,427,114

 

 

 

1,209,248

 

 

 

1,441,049

 

 

 

1,559,799

 

 

 

734,283

 

 

 

18,290

 

 

 

—

 

 

$

6,781,314

 

Gross charge-offs three months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

—

 

Gross charge-offs six months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

—

 

 

The Company considers repayment performance a significant indicator of credit quality for its residential real estate loan and consumer loan portfolios. A summary of loans in accrual and nonaccrual status at June 30, 2023 for the various classes of the Company’s residential real estate loans and consumer loans and gross charge-offs for those types of loans for the three-month and six-month periods ended June 30, 2023 by origination year follows.

4. Loans and leases and the allowance for credit losses, continued

 

 

Term Loans by Origination Year

 

 

Revolving

 

 

Revolving Loans Converted to Term

 

 

 

 

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Loans

 

 

Loans

 

 

Total

 

 

 

(In thousands)

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

1,078,612

 

 

 

4,916,628

 

 

 

3,904,324

 

 

 

2,663,709

 

 

 

1,266,549

 

 

 

7,756,199

 

 

 

80,303

 

 

 

—

 

 

$

21,666,324

 

30-89 days past due

 

 

4,818

 

 

 

77,407

 

 

 

49,908

 

 

 

33,051

 

 

 

23,741

 

 

 

392,794

 

 

 

87

 

 

 

—

 

 

 

581,806

 

Accruing loans past due
    90 days or more

 

 

170

 

 

 

24,637

 

 

 

26,574

 

 

 

16,174

 

 

 

13,590

 

 

 

203,265

 

 

 

—

 

 

 

—

 

 

 

284,410

 

Nonaccrual

 

 

140

 

 

 

12,497

 

 

 

14,259

 

 

 

2,286

 

 

 

8,254

 

 

 

194,394

 

 

 

6,679

 

 

 

—

 

 

 

238,509

 

Total residential

 

$

1,083,740

 

 

 

5,031,169

 

 

 

3,995,065

 

 

 

2,715,220

 

 

 

1,312,134

 

 

 

8,546,652

 

 

 

87,069

 

 

 

—

 

 

$

22,771,049

 

Gross charge-offs three months ended June 30, 2023

 

$

—

 

 

 

58

 

 

 

77

 

 

 

-

 

 

 

71

 

 

 

639

 

 

 

—

 

 

 

—

 

 

$

845

 

Gross charge-offs six months ended June 30, 2023

 

$

—

 

 

 

133

 

 

 

192

 

 

 

21

 

 

 

139

 

 

 

1,925

 

 

 

—

 

 

 

—

 

 

$

2,410

 

Residential - limited documentation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

900,609

 

 

 

—

 

 

 

—

 

 

$

900,609

 

30-89 days past due

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

23,945

 

 

 

—

 

 

 

—

 

 

 

23,945

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

66,614

 

 

 

—

 

 

 

—

 

 

 

66,614

 

Total residential - limited
   documentation

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

991,168

 

 

 

—

 

 

 

—

 

 

$

991,168

 

Gross charge-offs three months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

227

 

 

 

—

 

 

 

—

 

 

$

227

 

Gross charge-offs six months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

363

 

 

 

—

 

 

 

—

 

 

$

363

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

32

 

 

 

31

 

 

 

1,962

 

 

 

2,164

 

 

 

14,100

 

 

 

109,021

 

 

 

3,082,721

 

 

 

1,459,491

 

 

$

4,669,522

 

30-89 days past due

 

 

—

 

 

 

—

 

 

 

—

 

 

 

55

 

 

 

309

 

 

 

1,670

 

 

 

—

 

 

 

24,444

 

 

 

26,478

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

32

 

 

 

—

 

 

 

65

 

 

 

6,298

 

 

 

1,140

 

 

 

69,555

 

 

 

77,090

 

Total home equity lines and loans

 

$

32

 

 

 

31

 

 

 

1,994

 

 

 

2,219

 

 

 

14,474

 

 

 

116,989

 

 

 

3,083,861

 

 

 

1,553,490

 

 

$

4,773,090

 

Gross charge-offs three months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

53

 

 

 

—

 

 

 

1,113

 

 

$

1,166

 

Gross charge-offs six months ended June 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

84

 

 

 

1,298

 

 

 

1,817

 

 

$

3,199

 

Recreational finance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

1,111,625

 

 

 

2,572,098

 

 

 

2,047,511

 

 

 

1,420,955

 

 

 

866,786

 

 

 

1,152,059

 

 

 

—

 

 

 

—

 

 

$

9,171,034

 

30-89 days past due

 

 

1,345

 

 

 

9,290

 

 

 

12,008

 

 

 

10,542

 

 

 

7,690

 

 

 

12,608

 

 

 

—

 

 

 

—

 

 

 

53,483

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

554

 

 

 

2,977

 

 

 

6,984

 

 

 

5,775

 

 

 

4,706

 

 

 

11,290

 

 

 

—

 

 

 

—

 

 

 

32,286

 

Total recreational finance

 

$

1,113,524

 

 

 

2,584,365

 

 

 

2,066,503

 

 

 

1,437,272

 

 

 

879,182

 

 

 

1,175,957

 

 

 

—

 

 

 

—

 

 

$

9,256,803

 

Gross charge-offs three months ended June 30, 2023

 

$

873

 

 

 

2,781

 

 

 

3,014

 

 

 

2,746

 

 

 

1,751

 

 

 

3,315

 

 

 

—

 

 

 

—

 

 

$

14,480

 

Gross charge-offs six months ended June 30, 2023

 

$

873

 

 

 

5,150

 

 

 

6,027

 

 

 

5,731

 

 

 

4,163

 

 

 

7,357

 

 

 

—

 

 

 

—

 

 

$

29,301

 

Automobile:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

442,880

 

 

 

1,298,446

 

 

 

1,285,910

 

 

 

553,840

 

 

 

280,257

 

 

 

159,389

 

 

 

—

 

 

 

—

 

 

$

4,020,722

 

30-89 days past due

 

 

1,731

 

 

 

9,576

 

 

 

12,148

 

 

 

6,187

 

 

 

5,479

 

 

 

5,853

 

 

 

—

 

 

 

—

 

 

 

40,974

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

648

 

 

 

2,521

 

 

 

7,163

 

 

 

3,988

 

 

 

3,299

 

 

 

4,172

 

 

 

—

 

 

 

—

 

 

 

21,791

 

Total automobile

 

$

445,259

 

 

 

1,310,543

 

 

 

1,305,221

 

 

 

564,015

 

 

 

289,035

 

 

 

169,414

 

 

 

—

 

 

 

—

 

 

$

4,083,487

 

Gross charge-offs three months ended June 30, 2023

 

$

81

 

 

 

1,183

 

 

 

1,916

 

 

 

708

 

 

 

526

 

 

 

517

 

 

 

—

 

 

 

—

 

 

$

4,931

 

Gross charge-offs six months ended June 30, 2023

 

$

81

 

 

 

2,819

 

 

 

3,984

 

 

 

1,877

 

 

 

1,483

 

 

 

1,398

 

 

 

—

 

 

 

—

 

 

$

11,642

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

154,995

 

 

 

222,468

 

 

 

142,584

 

 

 

44,462

 

 

 

25,013

 

 

 

22,444

 

 

 

1,444,863

 

 

 

5,448

 

 

 

2,062,277

 

30-89 days past due

 

 

2,113

 

 

 

1,885

 

 

 

1,304

 

 

 

235

 

 

 

221

 

 

 

502

 

 

 

8,979

 

 

 

530

 

 

$

15,769

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

181

 

 

 

4,783

 

 

 

—

 

 

 

4,964

 

Nonaccrual

 

 

1,434

 

 

 

665

 

 

 

445

 

 

 

135

 

 

 

127

 

 

 

335

 

 

 

49,565

 

 

 

156

 

 

 

52,862

 

Total other

 

$

158,542

 

 

 

225,018

 

 

 

144,333

 

 

 

44,832

 

 

 

25,361

 

 

 

23,462

 

 

 

1,508,190

 

 

 

6,134

 

 

$

2,135,872

 

Gross charge-offs three months ended June 30, 2023

 

$

5,201

 

 

 

3,203

 

 

 

2,261

 

 

 

1,209

 

 

 

1,334

 

 

 

4,348

 

 

 

172

 

 

 

—

 

 

$

17,728

 

Gross charge-offs six months ended June 30, 2023

 

$

6,113

 

 

 

11,860

 

 

 

4,996

 

 

 

2,604

 

 

 

2,915

 

 

 

9,334

 

 

 

192

 

 

 

—

 

 

$

38,014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans and leases at
   June 30, 2023

 

$

9,682,358

 

 

 

23,151,528

 

 

 

17,136,736

 

 

 

11,904,481

 

 

 

11,361,552

 

 

 

30,892,007

 

 

 

27,577,066

 

 

 

1,638,001

 

 

$

133,343,729

 

Total gross charge-offs for
   the three months
   ended June 30, 2023

 

$

6,883

 

 

 

14,079

 

 

 

11,973

 

 

 

9,086

 

 

 

57,412

 

 

 

61,334

 

 

 

344

 

 

 

1,113

 

 

$

162,224

 

Total gross charge-offs for
   the six months
   ended June 30, 2023

 

$

7,902

 

 

 

30,920

 

 

 

23,309

 

 

 

17,409

 

 

 

91,123

 

 

 

80,742

 

 

 

3,941

 

 

 

1,817

 

 

$

257,163

 

 

4. Loans and leases and the allowance for credit losses, continued

The following table summarizes the loan grades applied at December 31, 2022 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year.

 

 

Term Loans by Origination Year

 

 

Revolving

 

 

Revolving Loans Converted to Term

 

 

 

 

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

2018

 

 

Prior

 

 

Loans

 

 

Loans

 

 

Total

 

 

 

(In thousands)

 

Commercial, financial, leasing, etc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Pass

 

$

8,575,130

 

 

 

4,952,758

 

 

 

2,024,603

 

 

 

1,796,047

 

 

 

817,569

 

 

 

1,970,947

 

 

 

19,444,247

 

 

 

40,471

 

 

$

39,621,772

 

         Criticized accrual

 

 

247,626

 

 

 

222,861

 

 

 

190,368

 

 

 

116,881

 

 

 

71,485

 

 

 

246,846

 

 

 

768,497

 

 

 

17,026

 

 

 

1,881,590

 

         Criticized nonaccrual

 

 

18,379

 

 

 

52,067

 

 

 

37,608

 

 

 

36,241

 

 

 

35,689

 

 

 

59,146

 

 

 

100,972

 

 

 

7,102

 

 

 

347,204

 

Total commercial,
   financial, leasing, etc.

 

$

8,841,135

 

 

 

5,227,686

 

 

 

2,252,579

 

 

 

1,949,169

 

 

 

924,743

 

 

 

2,276,939

 

 

 

20,313,716

 

 

 

64,599

 

 

$

41,850,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Pass

 

$

4,136,890

 

 

 

3,379,900

 

 

 

3,388,590

 

 

 

4,557,065

 

 

 

3,293,380

 

 

 

10,905,956

 

 

 

869,981

 

 

 

—

 

 

$

30,531,762

 

         Criticized accrual

 

 

324,652

 

 

 

463,484

 

 

 

467,557

 

 

 

688,239

 

 

 

937,421

 

 

 

1,890,297

 

 

 

48,099

 

 

 

—

 

 

 

4,819,749

 

         Criticized nonaccrual

 

 

11,541

 

 

 

22,459

 

 

 

183,986

 

 

 

297,106

 

 

 

170,382

 

 

 

688,079

 

 

 

23,109

 

 

 

—

 

 

 

1,396,662

 

Total commercial real
   estate

 

$

4,473,083

 

 

 

3,865,843

 

 

 

4,040,133

 

 

 

5,542,410

 

 

 

4,401,183

 

 

 

13,484,332

 

 

 

941,189

 

 

 

—

 

 

$

36,748,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential builder and developer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Pass

 

$

680,705

 

 

 

230,079

 

 

 

11,280

 

 

 

22,111

 

 

 

12,812

 

 

 

9,865

 

 

 

150,404

 

 

 

—

 

 

$

1,117,256

 

         Criticized accrual

 

 

2,969

 

 

 

28,472

 

 

 

9,952

 

 

 

108,968

 

 

 

15,069

 

 

 

—

 

 

 

30,815

 

 

 

—

 

 

 

196,245

 

         Criticized nonaccrual

 

 

57

 

 

 

654

 

 

 

—

 

 

 

518

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,229

 

Total residential builder
   and developer

 

$

683,731

 

 

 

259,205

 

 

 

21,232

 

 

 

131,597

 

 

 

27,881

 

 

 

9,865

 

 

 

181,219

 

 

 

—

 

 

$

1,314,730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other commercial construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Pass

 

$

1,032,774

 

 

 

1,080,141

 

 

 

1,225,845

 

 

 

1,185,685

 

 

 

366,686

 

 

 

297,355

 

 

 

15,575

 

 

 

—

 

 

$

5,204,061

 

         Criticized accrual

 

 

37,893

 

 

 

145,199

 

 

 

320,463

 

 

 

1,025,371

 

 

 

299,350

 

 

 

144,394

 

 

 

—

 

 

 

—

 

 

 

1,972,670

 

         Criticized nonaccrual

 

 

—

 

 

 

9,992

 

 

 

44,037

 

 

 

35,841

 

 

 

10,542

 

 

 

22,099

 

 

 

2,426

 

 

 

—

 

 

 

124,937

 

Total other commercial
   construction

 

$

1,070,667

 

 

 

1,235,332

 

 

 

1,590,345

 

 

 

2,246,897

 

 

 

676,578

 

 

 

463,848

 

 

 

18,001

 

 

 

—

 

 

$

7,301,668

 

 

4. Loans and leases and the allowance for credit losses, continued

A summary of loans in accrual and nonaccrual status at December 31, 2022 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows.

 

 

Term Loans by Origination Year

 

 

Revolving

 

 

Revolving Loans Converted to Term

 

 

 

 

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

2018

 

 

Prior

 

 

Loans

 

 

Loans

 

 

Total

 

 

 

(In thousands)

 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

5,071,379

 

 

 

4,001,652

 

 

 

2,717,371

 

 

 

1,392,866

 

 

 

753,908

 

 

 

7,523,890

 

 

 

30,440

 

 

 

—

 

 

$

21,491,506

 

30-89 days past due

 

 

59,477

 

 

 

51,308

 

 

 

40,337

 

 

 

21,849

 

 

 

23,126

 

 

 

399,301

 

 

 

499

 

 

 

—

 

 

 

595,897

 

Accruing loans past due
    90 days or more

 

 

12,012

 

 

 

39,934

 

 

 

20,067

 

 

 

14,050

 

 

 

14,007

 

 

 

245,332

 

 

 

—

 

 

 

—

 

 

 

345,402

 

Nonaccrual

 

 

5,686

 

 

 

10,865

 

 

 

2,583

 

 

 

9,860

 

 

 

4,650

 

 

 

231,093

 

 

 

7,353

 

 

 

—

 

 

 

272,090

 

Total residential

 

$

5,148,554

 

 

 

4,103,759

 

 

 

2,780,358

 

 

 

1,438,625

 

 

 

795,691

 

 

 

8,399,616

 

 

 

38,292

 

 

 

—

 

 

$

22,704,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential - limited documentation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

950,782

 

 

 

—

 

 

 

—

 

 

$

950,782

 

30-89 days past due

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

22,456

 

 

 

—

 

 

 

—

 

 

 

22,456

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

77,814

 

 

 

—

 

 

 

—

 

 

 

77,814

 

Total residential - limited
   documentation

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,051,052

 

 

 

—

 

 

 

—

 

 

$

1,051,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and
   loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

930

 

 

 

2,109

 

 

 

2,441

 

 

 

15,361

 

 

 

23,321

 

 

 

97,282

 

 

 

3,262,533

 

 

 

1,487,334

 

 

$

4,891,311

 

30-89 days past due

 

 

—

 

 

 

—

 

 

 

—

 

 

 

171

 

 

 

126

 

 

 

2,030

 

 

 

—

 

 

 

28,460

 

 

 

30,787

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

15

 

 

 

—

 

 

 

536

 

 

 

334

 

 

 

6,458

 

 

 

2,799

 

 

 

74,646

 

 

 

84,788

 

Total home equity lines and
   loans

 

$

930

 

 

 

2,124

 

 

 

2,441

 

 

 

16,068

 

 

 

23,781

 

 

 

105,770

 

 

 

3,265,332

 

 

 

1,590,440

 

 

$

5,006,886

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recreational finance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

2,842,091

 

 

 

2,280,627

 

 

 

1,587,629

 

 

 

963,907

 

 

 

486,964

 

 

 

812,953

 

 

 

—

 

 

 

—

 

 

$

8,974,171

 

30-89 days past due

 

 

8,648

 

 

 

9,525

 

 

 

12,412

 

 

 

8,387

 

 

 

5,202

 

 

 

10,419

 

 

 

—

 

 

 

—

 

 

 

54,593

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

3,533

 

 

 

7,440

 

 

 

9,427

 

 

 

7,625

 

 

 

5,344

 

 

 

11,261

 

 

 

—

 

 

 

—

 

 

 

44,630

 

Total recreational finance

 

$

2,854,272

 

 

 

2,297,592

 

 

 

1,609,468

 

 

 

979,919

 

 

 

497,510

 

 

 

834,633

 

 

 

—

 

 

 

—

 

 

$

9,073,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Automobile:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

1,491,076

 

 

 

1,557,676

 

 

 

702,711

 

 

 

378,962

 

 

 

167,438

 

 

 

95,343

 

 

 

—

 

 

 

—

 

 

$

4,393,206

 

30-89 days past due

 

 

6,926

 

 

 

13,324

 

 

 

7,284

 

 

 

7,239

 

 

 

5,464

 

 

 

4,249

 

 

 

—

 

 

 

—

 

 

 

44,486

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

2,493

 

 

 

10,698

 

 

 

7,372

 

 

 

7,520

 

 

 

5,620

 

 

 

5,881

 

 

 

—

 

 

 

—

 

 

 

39,584

 

Total automobile

 

$

1,500,495

 

 

 

1,581,698

 

 

 

717,367

 

 

 

393,721

 

 

 

178,522

 

 

 

105,473

 

 

 

—

 

 

 

—

 

 

$

4,477,276

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

274,530

 

 

 

172,238

 

 

 

58,339

 

 

 

38,439

 

 

 

8,217

 

 

 

23,163

 

 

 

1,375,049

 

 

 

8,221

 

 

$

1,958,196

 

30-89 days past due

 

 

3,783

 

 

 

1,450

 

 

 

326

 

 

 

386

 

 

 

141

 

 

 

569

 

 

 

15,655

 

 

 

651

 

 

 

22,961

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

226

 

 

 

4,643

 

 

 

—

 

 

 

4,869

 

Nonaccrual

 

 

2,745

 

 

 

830

 

 

 

332

 

 

 

371

 

 

 

120

 

 

 

465

 

 

 

44,449

 

 

 

185

 

 

 

49,497

 

Total other

 

$

281,058

 

 

 

174,518

 

 

 

58,997

 

 

 

39,196

 

 

 

8,478

 

 

 

24,423

 

 

 

1,439,796

 

 

 

9,057

 

 

$

2,035,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans and leases at
   December 31, 2022

 

$

24,853,925

 

 

 

18,747,757

 

 

 

13,072,920

 

 

 

12,737,602

 

 

 

7,534,367

 

 

 

26,755,951

 

 

 

26,197,545

 

 

 

1,664,096

 

 

$

131,564,163

 

 

 

4. Loans and leases and the allowance for credit losses, continued

Allowance for credit losses

For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by type. Changes in the allowance for credit losses for the three months ended June 30, 2023 and 2022 were as follows:

 

 

Commercial,
Financial,

 

 

Real Estate

 

 

 

 

 

 

 

 

 

Leasing, etc.

 

 

Commercial

 

 

Residential

 

 

Consumer

 

 

Total

 

 

 

(In thousands)

 

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

504,779

 

 

 

743,621

 

 

 

113,192

 

 

 

613,518

 

 

$

1,975,110

 

Provision for credit losses

 

 

11,977

 

 

 

121,092

 

 

 

3,957

 

 

 

12,974

 

 

 

150,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

 

(21,258

)

 

 

(101,589

)

 

 

(1,072

)

 

 

(38,305

)

 

 

(162,224

)

Recoveries

 

 

16,431

 

 

 

2,552

 

 

 

2,315

 

 

 

14,182

 

 

 

35,480

 

Net (charge-offs) recoveries

 

 

(4,827

)

 

 

(99,037

)

 

 

1,243

 

 

 

(24,123

)

 

 

(126,744

)

Ending balance

 

$

511,929

 

 

 

765,676

 

 

 

118,392

 

 

 

602,369

 

 

$

1,998,366

 

 

Three Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

307,055

 

 

 

539,444

 

 

 

72,581

 

 

 

553,279

 

 

$

1,472,359

 

Allowance on acquired PCD loans

 

 

41,003

 

 

 

55,812

 

 

 

1,833

 

 

 

352

 

 

 

99,000

 

Provision for credit losses (a)

 

 

95,917

 

 

 

120,277

 

 

 

50,168

 

 

 

35,638

 

 

 

302,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs (b)

 

 

(37,925

)

 

 

(8,796

)

 

 

(2,863

)

 

 

(26,030

)

 

 

(75,614

)

Recoveries

 

 

8,423

 

 

 

1,656

 

 

 

2,607

 

 

 

13,359

 

 

 

26,045

 

Net charge-offs

 

 

(29,502

)

 

 

(7,140

)

 

 

(256

)

 

 

(12,671

)

 

 

(49,569

)

Ending balance

 

$

414,473

 

 

 

708,393

 

 

 

124,326

 

 

 

576,598

 

 

$

1,823,790

 

_____________________________________

(a)
Includes $242 million related to non-PCD acquired loans for the three months ended June 30, 2022.

(b) For the three months ended June 30, 2022, net charge-offs do not reflect $33 million of charge offs related to PCD acquired loans.

Changes in the allowance for credit losses for the six months ended June 30, 2023 and 2022 were as follows:

 

 

Commercial, Financial,

 

 

Real Estate

 

 

 

 

 

 

 

 

 

Leasing, etc.

 

 

Commercial

 

 

Residential

 

 

Consumer

 

 

Total

 

 

 

(In thousands)

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

502,153

 

 

 

676,684

 

 

 

115,092

 

 

 

631,402

 

 

$

1,925,331

 

Provision for credit losses

 

 

24,164

 

 

 

217,084

 

 

 

2,435

 

 

 

26,317

 

 

 

270,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

 

(40,260

)

 

 

(131,974

)

 

 

(2,773

)

 

 

(82,156

)

 

 

(257,163

)

Recoveries

 

 

25,872

 

 

 

3,882

 

 

 

3,638

 

 

 

26,806

 

 

 

60,198

 

Net (charge-offs) recoveries

 

 

(14,388

)

 

 

(128,092

)

 

 

865

 

 

 

(55,350

)

 

 

(196,965

)

Ending balance

 

$

511,929

 

 

 

765,676

 

 

 

118,392

 

 

 

602,369

 

 

$

1,998,366

 

 

Six Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

283,899

 

 

 

557,239

 

 

 

71,726

 

 

 

556,362

 

 

$

1,469,226

 

Allowance on acquired PCD loans

 

 

41,003

 

 

 

55,812

 

 

 

1,833

 

 

 

352

 

 

 

99,000

 

Provision for credit losses (a)

 

 

124,642

 

 

 

89,339

 

 

 

51,888

 

 

 

46,131

 

 

 

312,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs (b)

 

 

(57,159

)

 

 

(10,596

)

 

 

(6,835

)

 

 

(52,062

)

 

 

(126,652

)

Recoveries

 

 

22,088

 

 

 

16,599

 

 

 

5,714

 

 

 

25,815

 

 

 

70,216

 

Net (charge-offs) recoveries

 

 

(35,071

)

 

 

6,003

 

 

 

(1,121

)

 

 

(26,247

)

 

 

(56,436

)

Ending balance

 

$

414,473

 

 

 

708,393

 

 

 

124,326

 

 

 

576,598

 

 

$

1,823,790

 

________________________________________________________________________________________________

(a)
Includes $242 million related to non-PCD acquired loans for the six months ended June 30, 2022.

(b) For the six months ended June 30, 2022, net charge-offs do not reflect $33 million of charge offs related to PCD acquired loans.

4. Loans and leases and the allowance for credit losses, continued

Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators, including loan grade and borrower repayment performance, can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, gross domestic product and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At each of June 30, 2023 and December 31, 2022, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio. The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and commercial real estate loans that are in nonaccrual status. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of classifying the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs.

For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of estimating losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property.

Changes in the amount of the allowance for credit losses reflect the outcome of the procedures described herein, including the impact of changes in macroeconomic forecasts as compared with previous forecasts, as well as the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process.

The Company’s reserve for off-balance sheet credit exposures was not material at June 30, 2023 and December 31, 2022.

 

4. Loans and leases and the allowance for credit losses, continued

Information with respect to loans and leases that were considered nonaccrual at the beginning and end of the reporting period and the interest income recognized on such loans for the three-month and six-month periods ended June 30, 2023 and 2022 follows.

 

 

Amortized Cost with Allowance

 

 

Amortized Cost without Allowance

 

 

Total

 

 

Amortized Cost

 

 

Interest Income Recognized

 

 

 

June 30, 2023

 

 

March 31, 2023

 

 

January 1, 2023

 

 

Three Months Ended June 30, 2023

 

 

Six
Months Ended June 30, 2023

 

 

 

(In thousands)

 

Commercial, financial, leasing, etc.

 

$

162,087

 

 

$

253,935

 

 

$

416,022

 

 

$

382,268

 

 

$

347,204

 

 

$

1,909

 

 

$

4,188

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

415,685

 

 

 

967,505

 

 

 

1,383,190

 

 

 

1,516,655

 

 

 

1,396,662

 

 

 

4,432

 

 

 

9,933

 

Residential builder and developer

 

 

1,193

 

 

 

—

 

 

 

1,193

 

 

 

3,303

 

 

 

1,229

 

 

 

30

 

 

 

396

 

Other commercial construction

 

 

44,489

 

 

 

101,535

 

 

 

146,024

 

 

 

143,015

 

 

 

124,937

 

 

 

63

 

 

 

1,725

 

Residential

 

 

91,371

 

 

 

147,138

 

 

 

238,509

 

 

 

253,646

 

 

 

272,090

 

 

 

4,391

 

 

 

8,767

 

Residential — limited documentation

 

 

27,013

 

 

 

39,601

 

 

 

66,614

 

 

 

68,935

 

 

 

77,814

 

 

 

96

 

 

 

260

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

48,513

 

 

 

28,577

 

 

 

77,090

 

 

 

80,766

 

 

 

84,788

 

 

 

1,458

 

 

 

3,679

 

Recreational finance

 

 

23,005

 

 

 

9,281

 

 

 

32,286

 

 

 

34,186

 

 

 

44,630

 

 

 

180

 

 

 

351

 

Automobile

 

 

18,275

 

 

 

3,516

 

 

 

21,791

 

 

 

26,842

 

 

 

39,584

 

 

 

36

 

 

 

71

 

Other

 

 

51,238

 

 

 

1,624

 

 

 

52,862

 

 

 

47,183

 

 

 

49,497

 

 

 

79

 

 

 

167

 

Total

 

$

882,869

 

 

$

1,552,712

 

 

$

2,435,581

 

 

$

2,556,799

 

 

$

2,438,435

 

 

$

12,674

 

 

$

29,537

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

 

March 31, 2022

 

 

January 1, 2022

 

 

Three Months Ended June 30, 2022

 

 

Six
Months Ended June 30, 2022

 

 

 

(In thousands)

 

Commercial, financial, leasing, etc.

 

$

278,396

 

 

$

164,100

 

 

$

442,496

 

 

$

275,146

 

 

$

221,022

 

 

$

2,121

 

 

$

15,715

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

397,536

 

 

 

1,079,122

 

 

 

1,476,658

 

 

 

1,157,686

 

 

 

1,069,280

 

 

 

1,754

 

 

 

7,885

 

Residential builder and developer

 

 

518

 

 

 

—

 

 

 

518

 

 

 

2,916

 

 

 

3,005

 

 

 

259

 

 

 

1,687

 

Other commercial construction

 

 

36,345

 

 

 

36,701

 

 

 

73,046

 

 

 

50,855

 

 

 

111,405

 

 

 

2,750

 

 

 

3,376

 

Residential

 

 

175,019

 

 

 

156,357

 

 

 

331,376

 

 

 

341,671

 

 

 

355,858

 

 

 

6,797

 

 

 

13,338

 

Residential — limited documentation

 

 

70,718

 

 

 

41,890

 

 

 

112,608

 

 

 

123,512

 

 

 

122,888

 

 

 

31

 

 

 

227

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

30,328

 

 

 

49,117

 

 

 

79,445

 

 

 

71,489

 

 

 

70,488

 

 

 

1,813

 

 

 

2,622

 

Recreational finance

 

 

26,530

 

 

 

6,884

 

 

 

33,414

 

 

 

31,546

 

 

 

27,811

 

 

 

161

 

 

 

322

 

Automobile

 

 

31,970

 

 

 

4,296

 

 

 

36,266

 

 

 

35,350

 

 

 

34,037

 

 

 

37

 

 

 

75

 

Other

 

 

47,040

 

 

 

138

 

 

 

47,178

 

 

 

44,060

 

 

 

44,289

 

 

 

92

 

 

 

184

 

Total

 

$

1,094,400

 

 

$

1,538,605

 

 

$

2,633,005

 

 

$

2,134,231

 

 

$

2,060,083

 

 

$

15,815

 

 

$

45,431

 

Loan modifications

During the normal course of business, the Company modifies loans to maximize recovery efforts from borrowers experiencing financial difficulty. Such loan modifications typically include payment deferrals and interest rate reductions but may also include other modified terms. Those modified loans may be considered nonaccrual if the Company does not expect to collect the contractual cash flows owed under the loan agreement. On January 1, 2023 the Company adopted amended guidance that eliminated the accounting guidance for troubled debt restructurings while expanding disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The amended guidance also requires disclosure of current period gross charge-offs by year of origination.

 

4. Loans and leases and the allowance for credit losses, continued

The table that follows summarizes the Company’s loan modification activities to borrowers experiencing financial difficulty for the three-month and six-month periods ended June 30, 2023:

 

 

Amortized cost at June 30, 2023

 

 

 

Payment Deferral

 

 

Interest Rate Reduction

 

 

Other

 

 

Combination of Modification Types (a)

 

 

Total (b)

 

 

Percent of Total Loan Class

 

 

 

(Dollars in thousands)

 

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

21,595

 

 

$

415

 

 

$

—

 

 

$

200

 

 

$

22,210

 

 

 

0.05

%

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

55,946

 

 

 

—

 

 

 

—

 

 

 

8,214

 

 

 

64,160

 

 

 

0.17

%

Residential builder and developer

 

 

85,008

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

85,008

 

 

 

7.49

%

Other commercial construction

 

 

123,924

 

 

 

—

 

 

 

—

 

 

 

8,248

 

 

 

132,172

 

 

 

1.95

%

Residential

 

 

38,356

 

 

 

—

 

 

 

—

 

 

 

1,131

 

 

 

39,487

 

 

 

0.17

%

Residential — limited documentation

 

 

3,075

 

 

 

—

 

 

 

—

 

 

 

701

 

 

 

3,776

 

 

 

0.38

%

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

359

 

 

 

135

 

 

 

—

 

 

 

264

 

 

 

758

 

 

 

0.02

%

Recreational finance

 

 

69

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

69

 

 

 

—

 

Automobile

 

 

181

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

181

 

 

 

—

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

328,513

 

 

$

550

 

 

$

—

 

 

$

18,758

 

 

$

347,821

 

 

 

0.26

%

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

63,393

 

 

$

415

 

 

$

—

 

 

$

473

 

 

$

64,281

 

 

 

0.14

%

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

171,361

 

 

 

—

 

 

 

—

 

 

 

8,214

 

 

 

179,575

 

 

 

0.49

%

Residential builder and developer

 

 

90,708

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

90,708

 

 

 

7.99

%

Other commercial construction

 

 

214,846

 

 

 

—

 

 

 

—

 

 

 

8,248

 

 

 

223,094

 

 

 

3.29

%

Residential

 

 

69,413

 

 

 

—

 

 

 

—

 

 

 

3,084

 

 

 

72,497

 

 

 

0.32

%

Residential — limited documentation

 

 

8,260

 

 

 

—

 

 

 

—

 

 

 

701

 

 

 

8,961

 

 

 

0.90

%

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

359

 

 

 

135

 

 

 

—

 

 

 

291

 

 

 

785

 

 

 

0.02

%

Recreational finance

 

 

203

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

203

 

 

 

—

 

Automobile

 

 

224

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

224

 

 

 

0.01

%

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

618,767

 

 

$

550

 

 

$

—

 

 

$

21,011

 

 

$

640,328

 

 

 

0.48

%

 

(a)
Predominantly payment deferrals combined with interest rate reductions.
(b)
Includes approximately $25 million and $48 million, respectively, of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and six-month periods ended June 30, 2023.

 

4. Loans and leases and the allowance for credit losses, continued

The financial effects of the modifications for the three-month and six-month periods ended June 30, 2023 include an increase in the weighted-average remaining term for commercial loans of 1.0 years and 1.1 years, respectively, for commercial real estate loans, inclusive of residential builder and development loans and other commercial construction loans, of 1.0 years and 1.1 years, respectively, and for residential real estate loans, of 8.6 years and 8.9 years, respectively.

The following table summarizes the payment status, at June 30, 2023, of loans that were modified for the six-month period ended June 30, 2023:

 

 

Payment status at June 30, 2023 (amortized cost)

 

 

 

Current

 

 

30-89 Days Past Due

 

 

Past Due 90 Days or More (a)

 

 

Total

 

Six Months Ended June 30, 2023

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

60,448

 

 

$

3,716

 

 

$

117

 

 

$

64,281

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

177,753

 

 

 

426

 

 

 

1,396

 

 

 

179,575

 

Residential builder and developer

 

 

90,708

 

 

 

—

 

 

 

—

 

 

 

90,708

 

Other commercial construction

 

 

222,818

 

 

 

276

 

 

 

—

 

 

 

223,094

 

Residential (b)

 

 

53,545

 

 

 

14,798

 

 

 

4,154

 

 

 

72,497

 

Residential — limited documentation

 

 

6,745

 

 

 

1,600

 

 

 

616

 

 

 

8,961

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

785

 

 

 

—

 

 

 

—

 

 

 

785

 

Recreational finance

 

 

203

 

 

 

—

 

 

 

—

 

 

 

203

 

Automobile

 

 

224

 

 

 

—

 

 

 

—

 

 

 

224

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

613,229

 

 

$

20,816

 

 

$

6,283

 

 

$

640,328

 

 

(a) Predominantly loan modifications with payment deferrals.

(b) Includes loans guaranteed by government-related entities classified as 30-89 days past due of $11 million and as past due 90 days or more of $4 million.

Prior to January 1, 2023, if the borrower was experiencing financial difficulty such that the Company did not expect to collect the contractual cash flows owed under the original loan agreement and a concession in loan terms was granted, the Company considered the loan modification as a troubled debt restructuring. The table that follows summarizes the Company’s loan modification activities that were considered troubled debt restructurings for the three-month and six-month periods ended June 30, 2022. The table is not comparative to the preceding table. The Company no longer designates modified loans as a troubled debt restructuring in conjunction with the adoption of amended accounting guidance on January 1, 2023.

4. Loans and leases and the allowance for credit losses, continued

 

 

 

 

 

 

 

 

Post-modification (a)

 

 

 

Number

 

 

Pre-
modification Recorded Investment

 

 

Principal Deferral

 

 

Interest Rate Reduction

 

 

Other

 

 

Combination of Concession Types

 

 

Total

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

 

40

 

 

$

36,983

 

 

$

31,514

 

 

$

9

 

 

$

700

 

 

$

5,963

 

 

$

38,186

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

13

 

 

 

2,816

 

 

 

1,454

 

 

 

—

 

 

 

—

 

 

 

1,330

 

 

 

2,784

 

Residential

 

 

67

 

 

 

18,481

 

 

 

14,284

 

 

 

—

 

 

 

—

 

 

 

5,038

 

 

 

19,322

 

Residential — limited documentation

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

33

 

 

 

2,633

 

 

 

2,597

 

 

 

—

 

 

 

—

 

 

 

93

 

 

 

2,690

 

Recreational finance

 

 

170

 

 

 

6,204

 

 

 

6,204

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,204

 

Automobile

 

 

529

 

 

 

9,771

 

 

 

9,771

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,771

 

Other

 

 

65

 

 

 

465

 

 

 

465

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

465

 

Total

 

 

917

 

 

$

77,353

 

 

$

66,289

 

 

$

9

 

 

$

700

 

 

$

12,424

 

 

$

79,422

 

 

Six Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

 

77

 

 

$

46,986

 

 

$

38,434

 

 

$

9

 

 

$

754

 

 

$

8,743

 

 

$

47,940

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

30

 

 

 

10,398

 

 

 

5,830

 

 

 

—

 

 

 

2,101

 

 

 

2,185

 

 

 

10,116

 

Residential

 

 

164

 

 

 

42,532

 

 

 

29,727

 

 

 

—

 

 

 

—

 

 

 

14,999

 

 

 

44,726

 

Residential — limited documentation

 

 

5

 

 

 

1,076

 

 

 

894

 

 

 

—

 

 

 

—

 

 

 

193

 

 

 

1,087

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

68

 

 

 

4,783

 

 

 

4,585

 

 

 

—

 

 

 

—

 

 

 

265

 

 

 

4,850

 

Recreational finance

 

 

347

 

 

 

12,201

 

 

 

12,194

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,194

 

Automobile

 

 

1,063

 

 

 

20,034

 

 

 

20,004

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

20,004

 

Other

 

 

98

 

 

 

799

 

 

 

799

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

799

 

Total

 

 

1,852

 

 

$

138,809

 

 

$

112,467

 

 

$

9

 

 

$

2,855

 

 

$

26,385

 

 

$

141,716

 

_____________________________________________

(a)
Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. The present value of interest rate concessions, discounted at the effective rate of the original loan, was not material.

The amount of foreclosed property held by the Company, predominantly consisting of residential real estate, was $43 million and $41 million at June 30, 2023 and December 31, 2022, respectively. There were $173 million and $201 million at June 30, 2023 and December 31, 2022, respectively, of loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at June 30, 2023, approximately 36% were government guaranteed.

The Company pledged certain loans to secure outstanding borrowings and available lines of credit. At June 30, 2023, the Company pledged approximately $13.1 billion of commercial loans and leases, $16.9 billion of commercial real estate loans, $19.3 billion of one-to-four family residential real estate loans, $2.3 billion of home equity loans and lines of credit and $10.9 billion of other consumer loans. At December 31, 2022, the Company pledged approximately $10.5 billion of commercial loans and leases, $16.3 billion of commercial real estate loans, $19.5 billion of one-to-four family residential real estate loans, $2.4 billion of homes equity loans and lines of credit and $10.7 billion of other consumer loans.