Allowance for Credit Losses on Loans (Policies)

9 Months Ended

Sep. 30, 2022

Credit Loss [Abstract]

Allowance for Credits Losses on Loans

The ACL on loans is management’s estimate, at the reporting date, of expected credit losses over the expected life of the loans. The level of the ACL on loans is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts.

In accordance with the Corporation’s ACL policy, the methodology is reviewed no less than annually. The methodology incorporates a probability of default and loss given default framework. Loss given default is estimated based on historical credit loss experience. Probability of default is estimated using a regression model that incorporates econometric factors. Econometric factors are selected based on the correlation of the factor to historical credit losses for each portfolio segment.

The following table summarizes the econometric factors utilized for each loan portfolio segment as of the dates indicated:

	Econometric Factors
Loan portfolio segment	At September 30, 2022	At December 31, 2021
CRE	NUR & GDP	NUR & GDP
C&I	NUR & GDP	NUR
Residential real estate	NUR & HPI	NUR & HPI
Home equity	NUR & HPI	NUR & HPI
Other consumer	GDP	NUR & GDP