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ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
7. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY INFORMATION
The following tables provide the activity of the Company's allowance for credit losses and loan and lease balances for the years ended December 31, 2023, 2022, and 2021. During 2023, the increase was primarily due to net loan growth in our commercial mortgage, commercial small business leasing, and Upstart portfolios and higher provision on our commercial small business leasing, Upstart, commercial mortgage and elder care (subset of C&I) portfolios.
 
(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial
Commercial
Mortgages
Construction
Residential(2)
Consumer(3)
Total
Year Ended December 31, 2023
Allowance for credit losses
Beginning balance$59,394 $6,019 $21,473 $6,987 $4,668 $53,320 $151,861 
Charge-offs(42,294)(184)(300)(794)(41)(22,394)(66,007)
Recoveries9,721 54 7 532 260 1,625 12,199 
Provision37,743 4,830 14,875 4,037 596 25,992 88,073 
Ending balance$64,564 $10,719 $36,055 $10,762 $5,483 $58,543 $186,126 
Period-end allowance allocated to:
Loans evaluated on an individual basis$1,591 $— $— $— $— $— $1,591 
Loans evaluated on a collective basis62,973 10,719 36,055 10,762 5,483 58,543 184,535 
Ending balance$64,564 $10,719 $36,055 $10,762 $5,483 $58,543 $186,126 
Period-end loan balances:
Loans evaluated on an individual basis
$19,221 $5,200 $22,295 $12,617 $5,876 $2,287 $67,496 
Loans evaluated on a collective basis3,144,471 1,880,887 3,778,885 1,022,913 862,019 2,009,847 12,699,022 
Ending balance$3,163,692 $1,886,087 $3,801,180 $1,035,530 $867,895 $2,012,134 $12,766,518 
(1)Includes commercial small business leases.
(2)Period-end loan balance excludes reverse mortgages at fair value of $2.8 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial		Commercial
Mortgages		Construction
Residential(2)
Consumer(3)
Total
Year Ended December 31, 2022
Allowance for credit losses
Beginning balance$49,967 $4,574 $11,623 $1,903 $3,352 $23,088 $94,507 
Initial allowance on acquired PCD loans22,614 595 2,684 71 61 78 26,103 
Charge-offs(19,004)(179)(581)— (186)(7,520)(27,470)
Recoveries6,112 278 223 2,567 665 793 10,638 
(Credit) provision(4)
(295)751 7,524 2,446 776 36,881 48,083 
Ending balance$59,394 $6,019 $21,473 $6,987 $4,668 $53,320 $151,861 
Period-end allowance allocated to:
Loans evaluated on an individual basis$2,428 $— $— $— $— $— $2,428 
Loans evaluated on a collective basis56,966 6,019 21,473 6,987 4,668 53,320 149,433 
Ending balance$59,394 $6,019 $21,473 $6,987 $4,668 $53,320 $151,861 
Period-end loan balances:
Loans evaluated on an individual basis$17,572 $1,929 $6,369 $5,143 $7,680 $2,047 $40,740 
Loans evaluated on a collective basis3,116,754 1,807,653 3,344,715 1,038,906 751,785 1,808,883 11,868,696 
Ending balance$3,134,326 $1,809,582 $3,351,084 $1,044,049 $759,465 $1,810,930 $11,909,436 
(1)Includes commercial small business leases.
(2)Period-end loan balance excludes reverse mortgages at fair value of $2.4 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
(4)Includes $23.5 million initial provision for credit losses on non-PCD loans.
(Dollars in thousands)
Commercial and Industrial(1)
Owner-
occupied
Commercial
Commercial
Mortgages
Construction
Residential(2)
Consumer(3)
Total
Year Ended December 31, 2021
Allowance for loan and lease losses
Beginning balance$150,875 $9,615 $31,071 $12,190 $6,893 $18,160 $228,804 
Charge-offs(23,592)(83)(73)(2,473)— (2,094)(28,315)
Recoveries8,756 160 269 — 789 1,131 11,105 
(Credit) provision(86,072)(5,118)(19,644)(7,814)(4,330)5,891 (117,087)
Ending balance$49,967 $4,574 $11,623 $1,903 $3,352 $23,088 $94,507 
Period-end allowance allocated to:
Loans evaluated on an individual basis$1 $— $7 $— $— $— $8 
Loans evaluated on a collective basis49,966 4,574 11,616 1,903 3,352 23,088 94,499 
Ending balance$49,967 $4,574 $11,623 $1,903 $3,352 $23,088 $94,507 
Period-end loan balances:
Loans evaluated on an individual basis$8,363 $1,690 $3,764 $— $5,000 $2,321 $21,138 
Loans evaluated on a collective basis2,261,956 1,340,017 1,877,746 687,213 537,733 1,156,252 7,860,917 
Ending balance$2,270,319 $1,341,707 $1,881,510 $687,213 $542,733 $1,158,573 $7,882,055 
(1)Includes commercial small business leases and PPP loans.
(2)Period-end loan balance excludes reverse mortgages at fair value of $3.9 million.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
The following tables show nonaccrual and past due loans presented at amortized cost at the date indicated: 
December 31, 2023
(Dollars in thousands)30–89 Days
Past Due and
Still Accruing
Greater Than
90 Days
Past Due and
Still Accruing
Total Past
Due
And Still
Accruing
Accruing
Current
Balances
Nonaccrual Loans With No Allowance(1)
Nonaccrual Loans With An Allowance
Total
Loans
Commercial and industrial(2)
$8,327 $1,065 $9,392 $3,135,087 $13,645 $5,568 $3,163,692 
Owner-occupied commercial1,786 487 2,273 1,878,952 4,862 — 1,886,087 
Commercial mortgages1,190 — 1,190 3,777,698 22,292 — 3,801,180 
Construction— — — 1,022,913 12,617 — 1,035,530 
Residential(3)
9,261 — 9,261 856,055 2,579 — 867,895 
Consumer(4)
15,249 10,032 25,281 1,984,407 2,446 — 2,012,134 
Total(4)
$35,813 $11,584 $47,397 $12,655,112 $58,441 $5,568 $12,766,518 
% of Total Loans0.28 %0.09 %0.37 %99.13 %0.46 %0.04 %100.00 %
(1)Excludes nonaccruing loans held-for-sale.
(2)Includes commercial small business leases.
(3)Residential accruing current balances exclude reverse mortgages at fair value of $2.8 million.
(4)Includes $14.5 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
December 31, 2022
(Dollars in thousands)30–89 Days
Past Due and
Still Accruing
Greater Than
90 Days
Past Due and
Still Accruing
Total Past
Due
And Still
Accruing
Accruing
Current
Balances
Nonaccrual
Loans(1)
Total Loans
Commercial and industrial(2)
$10,767 $311 $11,078 $3,116,478 $6,770 $3,134,326 
Owner-occupied commercial3,500 474 3,974 1,805,222 386 1,809,582 
Commercial mortgages2,137 237 2,374 3,343,551 5,159 3,351,084 
Construction— — — 1,038,906 5,143 1,044,049 
Residential(3)
2,563 — 2,563 753,703 3,199 759,465 
Consumer(4)
12,263 15,513 27,776 1,781,009 2,145 1,810,930 
Total(4)
$31,230 $16,535 $47,765 $11,838,869 $22,802 $11,909,436 
% of Total Loans0.26 %0.14 %0.40 %99.41 %0.19 %100.00 %
(1)There were no  nonaccrual loans with an allowance as of December 31, 2022.
(2)Includes commercial small business leases.
(3)Residential accruing current balances exclude reverse mortgages at fair value of $2.4 million.
(4)Includes $21.1 million of delinquent, but still accruing, U.S. government-guaranteed student loans that carry little risk of credit loss.
The following table presents the amortized cost basis of nonaccruing collateral-dependent loans by class at December 31, 2023 and December 31, 2022:
December 31, 2023December 31, 2022
(Dollars in thousands)PropertyEquipment and otherPropertyEquipment and other
Commercial and industrial(1)(2)
$17,230 $1,983 $3,848 $2,922 
Owner-occupied commercial4,862 — 386 — 
Commercial mortgages22,292 — 5,159 — 
Construction12,617 — 5,143 — 
Residential(3)
2,579 — 3,199 — 
Consumer(4)
2,446 — 2,145 — 
Total$62,026 $1,983 $19,880 $2,922 
(1)Includes commercial small business leases.
(2)Excludes nonaccruing loans held-for-sale.
(3)Excludes reverse mortgages at fair value.
(4)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
As of December 31, 2023, there were 31 residential loans and 9 commercial loans in the process of foreclosure. The total outstanding balance on the loans was $3.2 million and $1.1 million, respectively. As of December 31, 2022, there were 45 residential loans and 8 commercial loans in the process of foreclosure. The total outstanding balance on the loans was $6.7 million and $1.6 million, respectively. Loan workout and OREO expenses recognized were $0.6 million in 2023, $0.4 million in 2022, and $1.5 million in 2021. Loan workout and OREO expenses are included in Loan workout and other credit costs on the Consolidated Statements of Income.
Credit Quality Indicators
Below is a description of each of the risk ratings for all commercial loans:
 
•Pass. These borrowers currently show no indication of deterioration or potential problems and their loans are considered fully collectible.
•Special Mention. These borrowers have potential weaknesses that deserve management’s close attention. Borrowers in this category may be experiencing adverse operating trends, for example, declining revenues or margins, high leverage, tight liquidity, or increasing inventory without increasing sales. These adverse trends can have a potential negative effect on the borrower’s repayment capacity. These assets are not adversely classified and do not expose the Bank to significant risk that would warrant a more severe rating. Borrowers in this category may also be experiencing significant management problems, pending litigation, or other structural credit weaknesses.
•Substandard or Lower. These borrowers have well-defined weaknesses that require extensive oversight by management. Borrowers in this category may exhibit one or more of the following: inadequate debt service coverage, unprofitable operations, insufficient liquidity, high leverage, and weak or inadequate capitalization. Relationships in this category are not adequately protected by the sound financial worth and paying capacity of the obligor or the collateral pledged on the loan, if any. A distinct possibility exists that the Bank will sustain some loss if the deficiencies are not corrected. In addition, some borrowers in this category could have the added characteristic that the possibility of loss is extremely high. Current circumstances in the credit relationship make collection or liquidation in full highly questionable. Such impending events include: perfecting liens on additional collateral, obtaining collateral valuations, an acquisition or liquidation preceding, proposed merger, or refinancing plan.
Residential and Consumer Loans
The residential and consumer loan portfolios are monitored on an ongoing basis using delinquency information and loan type as credit quality indicators. These credit quality indicators are assessed in the aggregate in these relatively homogeneous portfolios. Loans that are greater than 90 days past due are generally considered nonperforming and placed on nonaccrual status.
The following table provides an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses as of December 31, 2023.
Term Loans Amortized Cost Basis by Origination Year(1)
20232022202120202019
Prior
Revolving loans amortized cost basisRevolving loans converted to termTotal
(Dollars in thousands)
Commercial and industrial(2):
Risk Rating
Pass$977,196 $682,680 $283,771 $251,848 $105,933 $395,601 $8,785 $237,786 $2,943,600 
Special mention7,209 11,860 2,804 463 735 743 — 1,649 25,463 
Substandard or Lower(3)
72,993 54,024 5,951 10,224 22,046 17,906 — 11,485 194,629 
$1,057,398 $748,564 $292,526 $262,535 $128,714 $414,250 $8,785 $250,920 $3,163,692 
Current-period gross writeoffs$1,528 $7,818 $9,661 $3,201 $8,302 $11,784 $— $— $42,294 
Owner-occupied commercial:
Risk Rating
Pass$346,908 $264,895 $251,262 $212,365 $194,153 $313,801 $— $178,150 $1,761,534 
Special mention2,885 3,115 5,419 1,105 11,002 5,559 — 1,393 30,478 
Substandard or Lower996 18,865 11,109 6,787 8,019 35,330 — 12,969 94,075 
$350,789 $286,875 $267,790 $220,257 $213,174 $354,690 $— $192,512 $1,886,087 
Current-period gross writeoffs$— $— $— $— $184 $— $— $— $184 
Commercial mortgages:
Risk Rating
Pass$847,137 $464,895 $526,280 $465,354 $486,855 $619,448 $— $290,083 $3,700,052 
Special mention20,632 — 67 1,837 10,666 — — — 33,202 
Substandard or Lower9,862 1,153 1,047 13,837 14,352 12,212 — 15,463 67,926 
$877,631 $466,048 $527,394 $481,028 $511,873 $631,660 $— $305,546 $3,801,180 
Current-period gross writeoffs$— $83 $— $217 $— $— $— $— $300 
Construction:
Risk Rating
Pass$429,055 $319,958 $111,333 $3,030 $388 $7,016 $— $87,741 $958,521 
Special mention28,718 19,769 8,227 — — — — — 56,714 
Substandard or Lower5,698 — 3,308 8,598 2,134 — — 557 20,295 
$463,471 $339,727 $122,868 $11,628 $2,522 $7,016 $— $88,298 $1,035,530 
Current-period gross writeoffs$— $— $794 $— $— $— $— $— $794 
Residential(4):
Risk Rating
Performing$188,644 $67,358 $102,982 $57,273 $33,499 $412,099 $— $— $861,855 
Nonperforming— 170 713 486 1,251 3,420 — — 6,040 
$188,644 $67,528 $103,695 $57,759 $34,750 $415,519 $— $— $867,895 
Current-period gross writeoffs$33 $— $— $— $— $8 $— $— $41 
Consumer(5):
Risk Rating
Performing$391,580 $568,919 $153,930 $104,248 $44,996 $245,849 $494,663 $5,662 $2,009,847 
Nonperforming— — 135 352 176 30 1,362 232 2,287 
$391,580 $568,919 $154,065 $104,600 $45,172 $245,879 $496,025 $5,894 $2,012,134 
Current-period gross writeoffs$1,790 $15,227 $4,411 $313 $198 $455 $— $— $22,394 
(1)Origination date represent the most recent underwriting of the loan which includes new relationships, renewals and extensions.
(2)Includes commercial small business leases.
(3)Excludes nonacrruing loans held-for-sale.
(4)Excludes reverse mortgages at fair value.
(5)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
The following table provides an analysis of loans by portfolio segment based on the credit quality indicators used to determine the allowance for credit losses as of December 31, 2022.
Term Loans Amortized Cost Basis by Origination Year
20222021202020192018
Prior
Revolving loans amortized cost basisRevolving loans converted to termTotal
(Dollars in thousands)
Commercial and industrial(1):
Risk Rating
Pass$1,123,803 $501,761 $387,225 $211,310 $153,713 $276,588 $8,099 $250,486 $2,912,985 
Special mention28,672 27,689 7,585 9,451 347 1,010 — 2,596 77,350 
Substandard or Lower32,362 16,162 6,943 37,534 37,133 6,768 — 7,089 143,991 
$1,184,837 $545,612 $401,753 $258,295 $191,193 $284,366 $8,099 $260,171 $3,134,326 
Owner-occupied commercial:
Risk Rating
Pass$280,898 $325,388 $258,177 $226,717 $106,390 $363,420 $— $132,942 $1,693,932 
Special mention17,376 — — — — 2,166 — 3,351 22,893 
Substandard or Lower2,981 1,500 23,284 4,401 11,864 35,311 — 13,416 92,757 
$301,255 $326,888 $281,461 $231,118 $118,254 $400,897 $— $149,709 $1,809,582 
Commercial mortgages:
Risk Rating
Pass$516,783 $600,226 $526,312 $549,788 $276,414 $594,024 $— $210,550 $3,274,097 
Special mention1,450 75 3,848 6,121 9,596 32,014 — — 53,104 
Substandard or Lower1,861 1,210 12,552 2,909 3,573 1,209 — 569 23,883 
$520,094 $601,511 $542,712 $558,818 $289,583 $627,247 $— $211,119 $3,351,084 
Construction:
Risk Rating
Pass$448,581 $299,619 $115,667 $9,319 $26,553 $7,539 $— $122,116 $1,029,394 
Special mention— — — — — — — 581 581 
Substandard or Lower— 4,200 8,930 183 — — — 761 14,074 
$448,581 $303,819 $124,597 $9,502 $26,553 $7,539 $— $123,458 $1,044,049 
Residential(2):
Risk Rating
Performing$64,500 $110,508 $60,625 $36,118 $45,859 $434,175 $— $— $751,785 
Nonperforming— 729 502 999 1,218 4,232 — — 7,680 
$64,500 $111,237 $61,127 $37,117 $47,077 $438,407 $— $— $759,465 
Consumer(3):
Risk Rating
Performing$595,158 $195,397 $126,456 $54,449 $220,039 $71,478 $540,308 $5,232 $1,808,517 
Nonperforming— — 350 — 479 — 1,255 329 2,413 
$595,158 $195,397 $126,806 $54,449 $220,518 $71,478 $541,563 $5,561 $1,810,930 
(1)Includes commercial small business leases.
(2)Excludes reverse mortgages at fair value.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
Troubled Loans
The Company offers loan modifications to commercial and consumer borrowers that may result in a payment delay, interest rate reduction, term extension, principal forgiveness, or combination thereof. Loan modifications are offered on a case-by-case basis and are generally term extension, payment delay, and interest rate reduction modification types. Forbearance (due to hardship) programs result in modification types including payment delay and/or term extension. In addition, certain reorganization bankruptcy judgments may result in interest rate reduction, term extension, or principal forgiveness modification types.
The following table shows the amortized cost basis at the end of the reporting period of troubled loans, disaggregated by portfolio segment and type of modification granted.
December 31, 2023
(Dollars in thousands)Term ExtensionMore-Than-Insignificant Payment DelayCombination- Term Extension and Payment DelayCombination- Term Extension and Interest Rate ReductionCombination - Payment Delay and Interest Rate ReductionTotal% of Total Loan Category
Commercial and industrial(1)(2)
$44,123 $10,523 $5,568 $27 $— $60,241 1.90 %
Owner-occupied commercial66 — — 138 — 204 0.01 %
Commercial mortgages9,386 — — — — 9,386 0.25 %
Construction15,411 — — — — 15,411 1.49 %
Residential561 216 — — — 777 0.09 %
Consumer(3)
1,782 1,937 5,092 156 194 9,161 0.46 %
Total$71,329 $12,676 $10,660 $321 $194 $95,180 0.75 %
(1)Includes commercial small business leases.
(2)Excludes troubled loan held-for-sale.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
The following table describes the financial effect of the modifications made to troubled loans as of December 31, 2023:
Term Extension(1)
Interest Rate Reduction(2)
More-Than-Insignificant Payment Delay(3)
Commercial and industrial(4)
1.344.00%0.13%
Owner-occupied commercial0.952.59—
Commercial mortgages1.33——
Construction1.00——
Residential20.18——
Consumer3.082.650.06
(1)Represents the weighted-average increase in the life of modified loans measured in years, which reduces monthly payment amounts for borrowers.
(2)Represents the weighted-average decrease in the contractual interest rate on the modified loans.
(3)Represents the percentage of loans deferred over the total loan portfolio excluding reverse mortgages at fair value.
(4)Excludes troubled loan held-for-sale.
As of December 31, 2023, the Company had commitments to extend credit of $18.4 million to borrowers experiencing financial difficulty whose terms had been modified.
Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.
The following table shows the amortized cost of loans that received a term extension modification that had a payment default during the period and were modified in the 12 months before default to borrowers experiencing financial difficulty as of December 31, 2023.
More-Than-Insignificant Payment DelayCombination Term Extension & Payment DelayTotal
Commercial and industrial$— $5,568 $5,568 
Consumer98 — 98 
Total$98 $5,568 $5,666 
The Company closely monitors the performance of troubled loans to understand the effectiveness of its modification efforts. The following table shows the performance of loans that have been modified in the last 12 months:
December 31, 2023
(Dollars in thousands)30-89 Days Past Due and Still Accruing90+ Days Past Due and Still AccruingAccruing Current BalancesNonaccrual LoansTotal
Commercial and industrial(1)(2)
$21 $293 $53,989 $5,938 $60,241 
Owner-occupied commercial— — — 204 204 
Commercial mortgages— — 9,386 — 9,386 
Construction— — 15,411 — 15,411 
Residential— — 607 170 777 
Consumer(3)
1,021 205 7,539 396 9,161 
Total$1,042 $498 $86,932 $6,708 $95,180 
(1)Includes commercial small business leases.
(2)Excludes troubled loan held-for-sale.
(3)Includes home equity lines of credit, installment loans, unsecured lines of credit and education loans.
Troubled Debt Restructurings (TDRs) under ASC 326 for periods prior to adoption of ASU 2022-02
The following table presents the balance of TDRs as of the indicated date:
 
(Dollars in thousands)December 31, 2022
Performing TDRs$19,737 
Nonperforming TDRs2,006 
Total TDRs$21,743 
Approximately $0.6 million in related reserves have been established for these loans at December 31, 2022.
The following tables present information regarding the types of loan modifications made and the balances of loans modified as TDRs during the year ended and December 31, 2022:
December 31, 2022
Contractual
payment
reduction		Maturity
date
extension		Discharged
in
bankruptcy
Other (1)
Total
Commercial1 2 — 2 5 
Owner-occupied commercial— 1 — — 1 
Commercial mortgages— 1 — — 1 
Construction— 1 — — 1 
Residential1 — 1 1 3 
Consumer151 48 8 3 210 
Total153 53 9 6 221 
(1)Other includes interest rate reduction, forbearance, and interest only payments.
 Year Ended December 31,
(Dollars in thousands)2022
Pre
Modification
Post
Modification
Commercial$1,067 $1,067 
Owner-occupied commercial2,087 2,087 
Commercial mortgages2,380 2,380 
Residential302 302 
Consumer4,178 4,178 
Total(1)(2)
$10,014 $10,014 
(1)During the year ended December 31, 2022 the TDRs in the table above resulted in a $0.5 million increase in the allowance for credit losses, and no additional charge-offs. During the year ended December 31, 2022, no TDRs defaulted that had received troubled debt modification during the past twelve months.
(2)The TDRs in the table above did not occur as a result of the loan forbearance program under the CARES Act.