XML 24 R14.htm IDEA: XBRL DOCUMENT v3.23.3
Loans and leases and the allowance for credit losses
 9 Months Ended
Sep. 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 September 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)

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

44,298,562

 

 

$

252,987

 

 

$

21,064

 

 

$

485,420

 

 

$

45,058,033

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

34,018,257

 

 

 

424,005

 

 

 

65,426

 

 

 

1,236,087

 

 

 

35,743,775

 

Residential builder and developer

 

 

1,090,355

 

 

 

6,786

 

 

 

—

 

 

 

3,353

 

 

 

1,100,494

 

Other commercial construction

 

 

6,371,793

 

 

 

221,532

 

 

 

—

 

 

 

136,004

 

 

 

6,729,329

 

Residential

 

 

21,342,546

 

 

 

645,696

 

 

 

261,290

 

 

 

240,753

 

 

 

22,490,285

 

Residential — limited documentation

 

 

865,988

 

 

 

29,747

 

 

 

—

 

 

 

62,250

 

 

 

957,985

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

4,578,381

 

 

 

36,014

 

 

 

—

 

 

 

78,316

 

 

 

4,692,711

 

Recreational finance

 

 

9,448,458

 

 

 

67,149

 

 

 

—

 

 

 

30,524

 

 

 

9,546,131

 

Automobile

 

 

3,855,578

 

 

 

46,257

 

 

 

—

 

 

 

15,959

 

 

 

3,917,794

 

Other

 

 

2,040,303

 

 

 

18,324

 

 

 

6,249

 

 

 

53,272

 

 

 

2,118,148

 

Total

 

$

127,910,221

 

 

$

1,748,497

 

 

$

354,029

 

 

$

2,341,938

 

 

$

132,354,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 $205 million and $32 million at September 30, 2023 and December 31, 2022, respectively. Commercial real estate loans held for sale were $226 million at September 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 $5 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 September 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 nine-month periods ended September 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

 

$

5,789,909

 

 

 

7,017,863

 

 

 

4,114,909

 

 

 

1,510,693

 

 

 

1,238,701

 

 

 

1,995,635

 

 

 

20,869,512

 

 

 

56,263

 

 

$

42,593,485

 

Criticized accrual

 

 

109,004

 

 

 

264,016

 

 

 

180,450

 

 

 

113,930

 

 

 

99,434

 

 

 

307,309

 

 

 

878,730

 

 

 

26,255

 

 

 

1,979,128

 

Criticized nonaccrual

 

 

12,337

 

 

 

57,857

 

 

 

42,081

 

 

 

33,338

 

 

 

21,447

 

 

 

68,028

 

 

 

240,285

 

 

 

10,047

 

 

 

485,420

 

Total commercial,
   financial, leasing, etc.

 

$

5,911,250

 

 

 

7,339,736

 

 

 

4,337,440

 

 

 

1,657,961

 

 

 

1,359,582

 

 

 

2,370,972

 

 

 

21,988,527

 

 

 

92,565

 

 

$

45,058,033

 

Gross charge-offs three months ended September 30, 2023

 

$

2,124

 

 

 

7,929

 

 

 

2,998

 

 

 

1,766

 

 

 

2,539

 

 

 

3,300

 

 

 

6,188

 

 

 

—

 

 

$

26,844

 

Gross charge-offs nine months ended September 30, 2023

 

$

2,959

 

 

 

18,887

 

 

 

11,108

 

 

 

8,518

 

 

 

7,056

 

 

 

11,615

 

 

 

6,961

 

 

 

—

 

 

$

67,104

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

2,553,454

 

 

 

3,578,095

 

 

 

2,989,307

 

 

 

2,978,906

 

 

 

4,446,005

 

 

 

12,208,078

 

 

 

710,648

 

 

 

—

 

 

$

29,464,493

 

Criticized accrual

 

 

725

 

 

 

630,132

 

 

 

478,637

 

 

 

494,243

 

 

 

905,654

 

 

 

2,510,960

 

 

 

22,844

 

 

 

—

 

 

 

5,043,195

 

Criticized nonaccrual

 

 

245

 

 

 

54,904

 

 

 

14,255

 

 

 

159,956

 

 

 

151,052

 

 

 

831,527

 

 

 

24,148

 

 

 

—

 

 

 

1,236,087

 

Total commercial real
   estate

 

$

2,554,424

 

 

 

4,263,131

 

 

 

3,482,199

 

 

 

3,633,105

 

 

 

5,502,711

 

 

 

15,550,565

 

 

 

757,640

 

 

 

—

 

 

$

35,743,775

 

Gross charge-offs three months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

48,093

 

 

 

—

 

 

 

—

 

 

$

48,093

 

Gross charge-offs nine months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

424

 

 

 

77,906

 

 

 

100,004

 

 

 

—

 

 

 

—

 

 

$

178,334

 

Residential builder and developer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

433,338

 

 

 

337,680

 

 

 

67,233

 

 

 

6,818

 

 

 

2,050

 

 

 

13,503

 

 

 

133,839

 

 

 

—

 

 

$

994,461

 

Criticized accrual

 

 

310

 

 

 

11,867

 

 

 

25,379

 

 

 

—

 

 

 

64,125

 

 

 

336

 

 

 

663

 

 

 

—

 

 

 

102,680

 

Criticized nonaccrual

 

 

—

 

 

 

—

 

 

 

2,835

 

 

 

—

 

 

 

518

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,353

 

Total residential builder
   and developer

 

$

433,648

 

 

 

349,547

 

 

 

95,447

 

 

 

6,818

 

 

 

66,693

 

 

 

13,839

 

 

 

134,502

 

 

 

—

 

 

$

1,100,494

 

Gross charge-offs three months ended September 30, 2023

 

$

—

 

 

 

245

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

245

 

Gross charge-offs nine months ended September 30, 2023

 

$

—

 

 

 

245

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

55

 

 

 

1,678

 

 

 

—

 

 

$

1,978

 

Other commercial construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Loan grades:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

636,314

 

 

 

1,481,975

 

 

 

1,023,831

 

 

 

676,613

 

 

 

465,423

 

 

 

204,511

 

 

 

20,171

 

 

 

—

 

 

$

4,508,838

 

Criticized accrual

 

 

7,180

 

 

 

130,644

 

 

 

184,379

 

 

 

531,138

 

 

 

837,446

 

 

 

393,700

 

 

 

—

 

 

 

—

 

 

 

2,084,487

 

Criticized nonaccrual

 

 

—

 

 

 

—

 

 

 

10,018

 

 

 

46,626

 

 

 

50,165

 

 

 

26,237

 

 

 

2,958

 

 

 

—

 

 

 

136,004

 

Total other commercial
   construction

 

$

643,494

 

 

 

1,612,619

 

 

 

1,218,228

 

 

 

1,254,377

 

 

 

1,353,034

 

 

 

624,448

 

 

 

23,129

 

 

 

—

 

 

$

6,729,329

 

Gross charge-offs three months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,236

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

3,236

 

Gross charge-offs nine months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,236

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

3,236

 

 

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 September 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 nine-month periods ended September 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

 

$

1,349,605

 

 

 

4,827,335

 

 

 

3,817,652

 

 

 

2,605,414

 

 

 

1,240,538

 

 

 

7,419,338

 

 

 

82,664

 

 

 

—

 

 

$

21,342,546

 

30-89 days past due

 

 

8,385

 

 

 

87,178

 

 

 

68,811

 

 

 

41,367

 

 

 

22,082

 

 

 

416,816

 

 

 

1,057

 

 

 

—

 

 

 

645,696

 

Accruing loans past due
    90 days or more

 

 

913

 

 

 

27,348

 

 

 

19,355

 

 

 

13,736

 

 

 

13,169

 

 

 

186,769

 

 

 

—

 

 

 

—

 

 

 

261,290

 

Nonaccrual

 

 

971

 

 

 

14,353

 

 

 

13,730

 

 

 

3,500

 

 

 

8,529

 

 

 

192,207

 

 

 

7,463

 

 

 

—

 

 

 

240,753

 

Total residential

 

$

1,359,874

 

 

 

4,956,214

 

 

 

3,919,548

 

 

 

2,664,017

 

 

 

1,284,318

 

 

 

8,215,130

 

 

 

91,184

 

 

 

—

 

 

$

22,490,285

 

Gross charge-offs three months ended September 30, 2023

 

$

—

 

 

 

31

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

248

 

 

 

—

 

 

 

—

 

 

$

279

 

Gross charge-offs nine months ended September 30, 2023

 

$

—

 

 

 

164

 

 

 

192

 

 

 

21

 

 

 

139

 

 

 

2,173

 

 

 

—

 

 

 

—

 

 

$

2,689

 

Residential - limited documentation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

865,988

 

 

 

—

 

 

 

—

 

 

$

865,988

 

30-89 days past due

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

29,747

 

 

 

—

 

 

 

—

 

 

 

29,747

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

62,250

 

 

 

—

 

 

 

—

 

 

 

62,250

 

Total residential - limited
   documentation

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

957,985

 

 

 

—

 

 

 

—

 

 

$

957,985

 

Gross charge-offs three months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,053

 

 

 

—

 

 

 

—

 

 

$

1,053

 

Gross charge-offs nine months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,416

 

 

 

—

 

 

 

—

 

 

$

1,416

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

75

 

 

 

27

 

 

 

1,918

 

 

 

1,874

 

 

 

13,594

 

 

 

103,236

 

 

 

3,032,468

 

 

 

1,425,189

 

 

$

4,578,381

 

30-89 days past due

 

 

—

 

 

 

—

 

 

 

—

 

 

 

144

 

 

 

232

 

 

 

2,104

 

 

 

—

 

 

 

33,534

 

 

 

36,014

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

19

 

 

 

—

 

 

 

27

 

 

 

6,091

 

 

 

1,158

 

 

 

71,021

 

 

 

78,316

 

Total home equity lines and loans

 

$

75

 

 

 

27

 

 

 

1,937

 

 

 

2,018

 

 

 

13,853

 

 

 

111,431

 

 

 

3,033,626

 

 

 

1,529,744

 

 

$

4,692,711

 

Gross charge-offs three months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,522

 

 

$

1,522

 

Gross charge-offs nine months ended September 30, 2023

 

$

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

84

 

 

 

1,298

 

 

 

3,339

 

 

$

4,721

 

Recreational finance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

1,824,498

 

 

 

2,438,925

 

 

 

1,944,826

 

 

 

1,344,923

 

 

 

820,557

 

 

 

1,074,729

 

 

 

—

 

 

 

—

 

 

$

9,448,458

 

30-89 days past due

 

 

5,564

 

 

 

11,669

 

 

 

15,168

 

 

 

12,145

 

 

 

7,973

 

 

 

14,630

 

 

 

—

 

 

 

—

 

 

 

67,149

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

1,138

 

 

 

3,935

 

 

 

6,338

 

 

 

5,477

 

 

 

4,013

 

 

 

9,623

 

 

 

—

 

 

 

—

 

 

 

30,524

 

Total recreational finance

 

$

1,831,200

 

 

 

2,454,529

 

 

 

1,966,332

 

 

 

1,362,545

 

 

 

832,543

 

 

 

1,098,982

 

 

 

—

 

 

 

—

 

 

$

9,546,131

 

Gross charge-offs three months ended September 30, 2023

 

$

1,261

 

 

 

3,415

 

 

 

3,475

 

 

 

2,377

 

 

 

1,872

 

 

 

3,673

 

 

 

—

 

 

 

—

 

 

$

16,073

 

Gross charge-offs nine months ended September 30, 2023

 

$

2,134

 

 

 

8,565

 

 

 

9,502

 

 

 

8,108

 

 

 

6,035

 

 

 

11,030

 

 

 

—

 

 

 

—

 

 

$

45,374

 

Automobile:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

653,170

 

 

 

1,192,810

 

 

 

1,164,074

 

 

 

489,259

 

 

 

236,991

 

 

 

119,274

 

 

 

—

 

 

 

—

 

 

$

3,855,578

 

30-89 days past due

 

 

3,019

 

 

 

12,198

 

 

 

13,492

 

 

 

6,866

 

 

 

5,582

 

 

 

5,100

 

 

 

—

 

 

 

—

 

 

 

46,257

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

1,148

 

 

 

2,679

 

 

 

4,632

 

 

 

2,525

 

 

 

2,217

 

 

 

2,758

 

 

 

—

 

 

 

—

 

 

 

15,959

 

Total automobile

 

$

657,337

 

 

 

1,207,687

 

 

 

1,182,198

 

 

 

498,650

 

 

 

244,790

 

 

 

127,132

 

 

 

—

 

 

 

—

 

 

$

3,917,794

 

Gross charge-offs three months ended September 30, 2023

 

$

476

 

 

 

1,584

 

 

 

1,288

 

 

 

625

 

 

 

436

 

 

 

579

 

 

 

—

 

 

 

—

 

 

$

4,988

 

Gross charge-offs nine months ended September 30, 2023

 

$

557

 

 

 

4,403

 

 

 

5,272

 

 

 

2,502

 

 

 

1,919

 

 

 

1,977

 

 

 

—

 

 

 

—

 

 

$

16,630

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

209,451

 

 

 

200,204

 

 

 

128,475

 

 

 

38,232

 

 

 

19,931

 

 

 

19,668

 

 

 

1,421,161

 

 

 

3,181

 

 

$

2,040,303

 

30-89 days past due

 

 

2,592

 

 

 

2,055

 

 

 

1,546

 

 

 

314

 

 

 

185

 

 

 

383

 

 

 

10,337

 

 

 

912

 

 

 

18,324

 

Accruing loans past due
    90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

208

 

 

 

6,041

 

 

 

—

 

 

 

6,249

 

Nonaccrual

 

 

1,805

 

 

 

852

 

 

 

430

 

 

 

119

 

 

 

149

 

 

 

305

 

 

 

49,408

 

 

 

204

 

 

 

53,272

 

Total other

 

$

213,848

 

 

 

203,111

 

 

 

130,451

 

 

 

38,665

 

 

 

20,265

 

 

 

20,564

 

 

 

1,486,947

 

 

 

4,297

 

 

$

2,118,148

 

Gross charge-offs three months ended September 30, 2023

 

$

5,716

 

 

 

2,200

 

 

 

1,222

 

 

 

323

 

 

 

263

 

 

 

348

 

 

 

9,723

 

 

 

—

 

 

$

19,795

 

Gross charge-offs nine months ended September 30, 2023

 

$

11,829

 

 

 

14,060

 

 

 

6,218

 

 

 

2,927

 

 

 

3,178

 

 

 

9,682

 

 

 

9,915

 

 

 

—

 

 

$

57,809

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans and leases at
   September 30, 2023

 

$

13,605,150

 

 

 

22,386,601

 

 

 

16,333,780

 

 

 

11,118,156

 

 

 

10,677,789

 

 

 

29,091,048

 

 

 

27,515,555

 

 

 

1,626,606

 

 

$

132,354,685

 

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

 

$

9,577

 

 

 

15,404

 

 

 

8,983

 

 

 

5,091

 

 

 

8,346

 

 

 

57,294

 

 

 

15,911

 

 

 

1,522

 

 

$

122,128

 

Total gross charge-offs for
   the nine months ended
   September 30, 2023

 

$

17,479

 

 

 

46,324

 

 

 

32,292

 

 

 

22,500

 

 

 

99,469

 

 

 

138,036

 

 

 

19,852

 

 

 

3,339

 

 

$

379,291

 

 

 

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 September 30, 2023 and 2022 were as follows:

 

 

Commercial,
Financial,

 

 

Real Estate

 

 

 

 

 

 

 

 

 

Leasing, etc.

 

 

Commercial

 

 

Residential

 

 

Consumer

 

 

Total

 

 

 

(In thousands)

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

511,929

 

 

 

765,676

 

 

 

118,392

 

 

 

602,369

 

 

$

1,998,366

 

Provision for credit losses

 

 

45,637

 

 

 

73,588

 

 

 

(3,390

)

 

 

34,165

 

 

 

150,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

 

(26,844

)

 

 

(51,574

)

 

 

(1,332

)

 

 

(42,378

)

 

 

(122,128

)

Recoveries

 

 

6,976

 

 

 

4,290

 

 

 

824

 

 

 

13,799

 

 

 

25,889

 

Net charge-offs

 

 

(19,868

)

 

 

(47,284

)

 

 

(508

)

 

 

(28,579

)

 

 

(96,239

)

Ending balance

 

$

537,698

 

 

 

791,980

 

 

 

114,494

 

 

 

607,955

 

 

$

2,052,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

414,473

 

 

 

708,393

 

 

 

124,326

 

 

 

576,598

 

 

$

1,823,790

 

Provision for credit losses

 

 

43,343

 

 

 

26,949

 

 

 

(11,169

)

 

 

55,877

 

 

 

115,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

 

(37,396

)

 

 

(35,213

)

 

 

(2,572

)

 

 

(26,086

)

 

 

(101,267

)

Recoveries

 

 

22,022

 

 

 

401

 

 

 

2,234

 

 

 

13,411

 

 

 

38,068

 

Net charge-offs

 

 

(15,374

)

 

 

(34,812

)

 

 

(338

)

 

 

(12,675

)

 

 

(63,199

)

Ending balance

 

$

442,442

 

 

 

700,530

 

 

 

112,819

 

 

 

619,800

 

 

$

1,875,591

 

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

 

 

Commercial, Financial,

 

 

Real Estate

 

 

 

 

 

 

 

 

 

Leasing, etc.

 

 

Commercial

 

 

Residential

 

 

Consumer

 

 

Total

 

 

 

(In thousands)

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

502,153

 

 

 

676,684

 

 

 

115,092

 

 

 

631,402

 

 

$

1,925,331

 

Provision for credit losses

 

 

69,801

 

 

 

290,672

 

 

 

(955

)

 

 

60,482

 

 

 

420,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs

 

 

(67,104

)

 

 

(183,548

)

 

 

(4,105

)

 

 

(124,534

)

 

 

(379,291

)

Recoveries

 

 

32,848

 

 

 

8,172

 

 

 

4,462

 

 

 

40,605

 

 

 

86,087

 

Net (charge-offs) recoveries

 

 

(34,256

)

 

 

(175,376

)

 

 

357

 

 

 

(83,929

)

 

 

(293,204

)

Ending balance

 

$

537,698

 

 

 

791,980

 

 

 

114,494

 

 

 

607,955

 

 

$

2,052,127

 

 

Nine Months Ended September 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)

 

 

167,985

 

 

 

116,288

 

 

 

40,719

 

 

 

102,008

 

 

 

427,000

 

Net charge-offs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charge-offs (b)

 

 

(94,555

)

 

 

(45,809

)

 

 

(9,407

)

 

 

(78,148

)

 

 

(227,919

)

Recoveries

 

 

44,110

 

 

 

17,000

 

 

 

7,948

 

 

 

39,226

 

 

 

108,284

 

Net charge-offs

 

 

(50,445

)

 

 

(28,809

)

 

 

(1,459

)

 

 

(38,922

)

 

 

(119,635

)

Ending balance

 

$

442,442

 

 

 

700,530

 

 

 

112,819

 

 

 

619,800

 

 

$

1,875,591

 

________________________________________________________________________________________________

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

(b) For the nine months ended September 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 September 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 September 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 nine-month periods ended September 30, 2023 and 2022 follows:

 

 

Amortized Cost with Allowance

 

 

Amortized Cost without Allowance

 

 

Total

 

 

Amortized Cost

 

 

Interest Income Recognized

 

 

 

September 30, 2023

 

 

June 30, 2023

 

 

January 1, 2023

 

 

Three Months Ended September 30, 2023

 

 

Nine
Months Ended September 30, 2023

 

 

 

(In thousands)

 

Commercial, financial, leasing, etc.

 

$

324,774

 

 

$

160,646

 

 

$

485,420

 

 

$

416,022

 

 

$

347,204

 

 

$

3,726

 

 

$

7,914

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

458,720

 

 

 

777,367

 

 

 

1,236,087

 

 

 

1,383,190

 

 

 

1,396,662

 

 

 

12,446

 

 

 

22,379

 

Residential builder and developer

 

 

3,353

 

 

 

—

 

 

 

3,353

 

 

 

1,193

 

 

 

1,229

 

 

 

—

 

 

 

396

 

Other commercial construction

 

 

4,080

 

 

 

131,924

 

 

 

136,004

 

 

 

146,024

 

 

 

124,937

 

 

 

249

 

 

 

1,974

 

Residential

 

 

90,879

 

 

 

149,874

 

 

 

240,753

 

 

 

238,509

 

 

 

272,090

 

 

 

3,480

 

 

 

12,247

 

Residential — limited documentation

 

 

21,634

 

 

 

40,616

 

 

 

62,250

 

 

 

66,614

 

 

 

77,814

 

 

 

426

 

 

 

686

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

48,737

 

 

 

29,579

 

 

 

78,316

 

 

 

77,090

 

 

 

84,788

 

 

 

1,493

 

 

 

5,172

 

Recreational finance

 

 

20,955

 

 

 

9,569

 

 

 

30,524

 

 

 

32,286

 

 

 

44,630

 

 

 

185

 

 

 

536

 

Automobile

 

 

11,981

 

 

 

3,978

 

 

 

15,959

 

 

 

21,791

 

 

 

39,584

 

 

 

36

 

 

 

107

 

Other

 

 

53,100

 

 

 

172

 

 

 

53,272

 

 

 

52,862

 

 

 

49,497

 

 

 

66

 

 

 

233

 

Total

 

$

1,038,213

 

 

$

1,303,725

 

 

$

2,341,938

 

 

$

2,435,581

 

 

$

2,438,435

 

 

$

22,107

 

 

$

51,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

 

June 30, 2022

 

 

January 1, 2022

 

 

Three Months Ended September 30, 2022

 

 

Nine
Months Ended September 30, 2022

 

 

 

(In thousands)

 

Commercial, financial, leasing, etc.

 

$

207,841

 

 

$

160,325

 

 

$

368,166

 

 

$

442,496

 

 

$

221,022

 

 

$

4,708

 

 

$

20,423

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

394,502

 

 

 

1,011,698

 

 

 

1,406,200

 

 

 

1,476,658

 

 

 

1,069,280

 

 

 

7,059

 

 

 

14,944

 

Residential builder and developer

 

 

1,930

 

 

 

—

 

 

 

1,930

 

 

 

518

 

 

 

3,005

 

 

 

—

 

 

 

1,687

 

Other commercial construction

 

 

25,235

 

 

 

40,952

 

 

 

66,187

 

 

 

73,046

 

 

 

111,405

 

 

 

22

 

 

 

3,398

 

Residential

 

 

160,704

 

 

 

124,691

 

 

 

285,395

 

 

 

331,376

 

 

 

355,858

 

 

 

8,059

 

 

 

21,397

 

Residential — limited documentation

 

 

61,297

 

 

 

34,085

 

 

 

95,382

 

 

 

112,608

 

 

 

122,888

 

 

 

229

 

 

 

456

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

38,324

 

 

 

39,884

 

 

 

78,208

 

 

 

79,445

 

 

 

70,488

 

 

 

669

 

 

 

3,291

 

Recreational finance

 

 

31,295

 

 

 

7,423

 

 

 

38,718

 

 

 

33,414

 

 

 

27,811

 

 

 

166

 

 

 

488

 

Automobile

 

 

36,075

 

 

 

4,243

 

 

 

40,318

 

 

 

36,266

 

 

 

34,037

 

 

 

35

 

 

 

110

 

Other

 

 

48,741

 

 

 

81

 

 

 

48,822

 

 

 

47,178

 

 

 

44,289

 

 

 

84

 

 

 

268

 

Total

 

$

1,005,944

 

 

$

1,423,382

 

 

$

2,429,326

 

 

$

2,633,005

 

 

$

2,060,083

 

 

$

21,031

 

 

$

66,462

 

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 nine-month periods ended September 30, 2023:

 

 

Amortized cost at September 30, 2023

 

 

 

Payment Deferral

 

 

Interest Rate Reduction

 

 

Other

 

 

Combination of Modification Types (a)

 

 

Total (b)

 

 

Percent of Total Loan Class at Period End

 

 

 

(Dollars in thousands)

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

39,058

 

 

$

—

 

 

$

—

 

 

$

1,204

 

 

$

40,262

 

 

 

0.09

%

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

273,201

 

 

 

—

 

 

 

—

 

 

 

6,253

 

 

 

279,454

 

 

 

0.78

%

Residential builder and developer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other commercial construction

 

 

215,598

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

215,598

 

 

 

3.20

%

Residential

 

 

53,239

 

 

 

—

 

 

 

—

 

 

 

1,446

 

 

 

54,685

 

 

 

0.24

%

Residential — limited documentation

 

 

1,721

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,721

 

 

 

0.18

%

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

125

 

 

 

—

 

 

 

—

 

 

 

150

 

 

 

275

 

 

 

0.01

%

Recreational finance

 

 

40

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

40

 

 

 

—

 

Automobile

 

 

61

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

61

 

 

 

—

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

583,043

 

 

$

—

 

 

$

—

 

 

$

9,053

 

 

$

592,096

 

 

 

0.45

%

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

93,583

 

 

$

381

 

 

$

—

 

 

$

1,659

 

 

$

95,623

 

 

 

0.21

%

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

440,195

 

 

 

—

 

 

 

—

 

 

 

14,250

 

 

 

454,445

 

 

 

1.27

%

Residential builder and developer

 

 

70,683

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

70,683

 

 

 

6.42

%

Other commercial construction

 

 

431,668

 

 

 

—

 

 

 

—

 

 

 

8,253

 

 

 

439,921

 

 

 

6.54

%

Residential

 

 

120,632

 

 

 

—

 

 

 

—

 

 

 

4,525

 

 

 

125,157

 

 

 

0.56

%

Residential — limited documentation

 

 

9,971

 

 

 

—

 

 

 

—

 

 

 

699

 

 

 

10,670

 

 

 

1.11

%

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

482

 

 

 

134

 

 

 

—

 

 

 

437

 

 

 

1,053

 

 

 

0.02

%

Recreational finance

 

 

240

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

240

 

 

 

—

 

Automobile

 

 

274

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

274

 

 

 

0.01

%

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

1,167,728

 

 

$

515

 

 

$

—

 

 

$

29,823

 

 

$

1,198,066

 

 

 

0.91

%

 

(a)
Predominantly payment deferrals combined with interest rate reductions.
(b)
Includes approximately $45 million and $92 million, respectively, of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and nine-month periods ended September 30, 2023.

 

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

The financial effects of the modifications for the three-month and nine-month periods ended September 30, 2023 include an increase in the weighted-average remaining term for commercial loans of 1.1 years and 1.0 years, respectively, for commercial real estate loans, inclusive of residential builder and development loans and other commercial construction loans, of 1.3 years and 1.2 years, respectively, and for residential real estate loans, of 11.5 years and 10.1 years, respectively.

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

 

 

Payment status at September 30, 2023 (amortized cost)

 

 

 

Current

 

 

30-89 Days Past Due

 

 

Past Due 90 Days or More (a)

 

 

Total

 

Nine Months Ended September 30, 2023

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

$

81,558

 

 

$

2,326

 

 

$

11,739

 

 

$

95,623

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

433,428

 

 

 

19,022

 

 

 

1,995

 

 

 

454,445

 

Residential builder and developer

 

 

70,683

 

 

 

—

 

 

 

—

 

 

 

70,683

 

Other commercial construction

 

 

439,921

 

 

 

—

 

 

 

—

 

 

 

439,921

 

Residential (b)

 

 

79,331

 

 

 

33,344

 

 

 

12,482

 

 

 

125,157

 

Residential — limited documentation

 

 

7,943

 

 

 

932

 

 

 

1,795

 

 

 

10,670

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

1,034

 

 

 

19

 

 

 

—

 

 

 

1,053

 

Recreational finance

 

 

240

 

 

 

—

 

 

 

—

 

 

 

240

 

Automobile

 

 

274

 

 

 

—

 

 

 

—

 

 

 

274

 

Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

1,114,412

 

 

$

55,643

 

 

$

28,011

 

 

$

1,198,066

 

 

(a) Predominantly loan modifications with payment deferrals.

(b) Includes loans guaranteed by government-related entities classified as 30-89 days past due of $28 million and as past due 90 days or more of $11 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 nine-month periods ended September 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 September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

 

70

 

 

$

32,451

 

 

$

11,237

 

 

$

446

 

 

$

229

 

 

$

21,519

 

 

$

33,431

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

14

 

 

 

22,951

 

 

 

7,222

 

 

 

—

 

 

 

122

 

 

 

15,543

 

 

 

22,887

 

Residential

 

 

57

 

 

 

14,380

 

 

 

11,094

 

 

 

—

 

 

 

—

 

 

 

3,470

 

 

 

14,564

 

Residential — limited documentation

 

 

2

 

 

 

155

 

 

 

155

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

155

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity lines and loans

 

 

25

 

 

 

1,700

 

 

 

1,504

 

 

 

—

 

 

 

—

 

 

 

196

 

 

 

1,700

 

Recreational finance

 

 

167

 

 

 

6,937

 

 

 

6,937

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,937

 

Automobile

 

 

474

 

 

 

9,755

 

 

 

9,755

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,755

 

Other

 

 

30

 

 

 

371

 

 

 

371

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

371

 

Total

 

 

839

 

 

$

88,700

 

 

$

48,275

 

 

$

446

 

 

$

351

 

 

$

40,728

 

 

$

89,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, financial, leasing, etc.

 

 

147

 

 

$

79,437

 

 

$

49,671

 

 

$

455

 

 

$

983

 

 

$

30,262

 

 

$

81,371

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

44

 

 

 

33,349

 

 

 

13,052

 

 

 

—

 

 

 

2,223

 

 

 

17,728

 

 

 

33,003

 

Residential

 

 

221

 

 

 

56,912

 

 

 

40,821

 

 

 

—

 

 

 

—

 

 

 

18,469

 

 

 

59,290

 

Residential — limited documentation

 

 

7

 

 

 

1,231

 

 

 

1,049

 

 

 

—

 

 

 

—

 

 

 

193

 

 

 

1,242

 

Consumer:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Home equity lines and loans

 

 

93

 

 

 

6,483

 

 

 

6,089

 

 

 

—

 

 

 

—

 

 

 

461

 

 

 

6,550

 

Recreational finance

 

 

514

 

 

 

19,138

 

 

 

19,131

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

19,131

 

Automobile

 

 

1,537

 

 

 

29,789

 

 

 

29,759

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

29,759

 

Other

 

 

128

 

 

 

1,170

 

 

 

1,170

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,170

 

Total

 

 

2,691

 

 

$

227,509

 

 

$

160,742

 

 

$

455

 

 

$

3,206

 

 

$

67,113

 

 

$

231,516

 

_____________________________________________

(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 $37 million and $41 million at September 30, 2023 and December 31, 2022, respectively. There were $182 million and $201 million at September 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 September 30, 2023, approximately 35% were government guaranteed.

 

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

The Company pledged certain loans to secure outstanding borrowings and available lines of credit. At September 30, 2023, the Company pledged approximately $13.1 billion of commercial loans and leases, $16.3 billion of commercial real estate loans, $16.9 billion of one-to-four family residential real estate loans, $2.6 billion of home equity loans and lines of credit and $10.8 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.