Allowance for Credit Losses (ACL)

6 Months Ended

Jun. 30, 2021

Note 7 — Allowance for Credit Losses (ACL)

See Note 2 - Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q for further detailed descriptions of our estimation process and methodology related to the allowance for credit losses.

The following table presents a disaggregated analysis of activity in the allowance for credit losses as follows:


	Residential		Residential				Residential		Other								CRE Owner		Non Owner
(Dollars in thousands)	Mortgage Sr.		Mortgage Jr.		HELOC		Construction		C&D		Consumer		Multifamily		Municipal		Occupied		Occupied CRE		C & I		Total
Three Months Ended June 30, 2021
Allowance for credit losses:
Balance at end of period March 31, 2021	$	63,042	$	1,190	$	16,003	$	3,892	$	55,337	$	27,883	$	5,884	$	1,544	$	90,660	$	107,559	$	33,466	$	406,460
Charge-offs		(69)		—		(517)		—		(77)		(1,486)		—		—		(2,021)		(341)		(1,151)		(5,662)
Recoveries		343		50		766		—		229		531		3		—		131		411		1,084		3,548
Net (charge offs) recoveries		274		50		249		—		152		(955)		3		—		(1,890)		70		(67)		(2,114)
(Recovery) provision (1)		(7,496)		(415)		(1,702)		596		(10,001)		(1,231)		(4)		(481)		(13,278)		(17,225)		(2,708)		(53,945)
Balance at end of period June 30, 2021	$	55,820	$	825	$	14,550	$	4,488	$	45,488	$	25,697	$	5,883	$	1,063	$	75,492	$	90,404	$	30,691	$	350,401

Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	50,424	$	825	$	12,350	$	4,438	$	45,472	$	21,195	$	5,883	$	520	$	72,212	$	85,044	$	25,195	$	323,558
Individually evaluated		88		—		1,140		—		16		—		—		—		333		—		308		1,885
Total quantitative allowance		50,512		825		13,490		4,438		45,488		21,195		5,883		520		72,545		85,044		25,503		325,443
Qualitative allowance		5,308		—		1,060		50		—		4,502		—		543		2,947		5,360		5,188		24,958
Balance at end of period June 30, 2021	$	55,820	$	825	$	14,550	$	4,488	$	45,488	$	25,697	$	5,883	$	1,063	$	75,492	$	90,404	$	30,691	$	350,401

Three Months Ended June 30, 2020
Allowance for loan losses:
Balance at beginning of period March 31, 2020	$	18,214	$	239	$	12,092	$	2,135	$	16,777	$	8,999	$	4,557	$	1,889	$	23,792	$	41,302	$	14,789	$	144,785
Impact of merger on provision for non-PCD loans		16,712		226		4,227		4,893		7,673		3,836		1,212		919		25,393		35,067		9,284		109,442
Initial PCD Allowance		29,906		804		5,119		1,302		6,035		6,120		902		1,003		35,332		45,785		18,638		150,946
Adjusted CECL balance	$	64,832	$	1,269	$	21,438	$	8,330	$	30,485	$	18,955	$	6,671	$	3,811	$	84,517	$	122,154	$	42,711	$	405,173
Charge-offs		(79)		(24)		(67)		(31)		(69)		(1,122)		—		—		(308)		(23)		(708)		(2,431)
Recoveries		315		55		211		—		569		428		3		—		340		32		377		2,330
Net (charge offs) recoveries		236		31		144		(31)		500		(694)		3		—		32		9		(331)		(101)
Provision (recovery) (1)		2,418		(219)		5,040		996		2,927		1,909		1,118		264		5,657		8,711		715		29,536
Balance at end of period June 30, 2020	$	67,486	$	1,081	$	26,622	$	9,295	$	33,912	$	20,170	$	7,792	$	4,075	$	90,206	$	130,874	$	43,095	$	434,608

Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	59,101	$	1,143	$	23,579	$	8,922	$	30,750	$	15,828	$	4,556	$	2,641	$	78,715	$	101,998	$	28,954	$	356,187
Individually evaluated		210		—		299		—		76		—		—		—		5,319		3,890		1,110		10,904
Total quantitative allowance		59,311		1,143		23,878		8,922		30,826		15,828		4,556		2,641		84,034		105,888		30,064		367,091
Qualitative allowance		8,175		(62)		2,744		373		3,086		4,342		3,236		1,434		6,172		24,986		13,031		67,517
Balance at end of period June 30, 2020	$	67,486	$	1,081	$	26,622	$	9,295	$	33,912	$	20,170	$	7,792	$	4,075	$	90,206	$	130,874	$	43,095	$	434,608

(1)

A negative provision (recovery) for credit losses of $4.8 million was recorded during the second quarter of 2021, compared to an additional provision for credit losses of $12.5 million, of which, $9.6 million was from the initial impact from the merger with CSFL, recorded during the second quarter of 2020 for the allowance for credit losses for unfunded commitments that is not included in the above table.


	Residential		Residential				Residential		Other								CRE Owner		Non Owner
(Dollars in thousands)	Mortgage Sr.		Mortgage Jr.		HELOC		Construction		C&D		Consumer		Multifamily		Municipal		Occupied		Occupied CRE		C & I		Total
Six Months Ended June 30, 2021
Allowance for credit losses:
Balance at end of period December 31, 2020	$	63,561	$	1,238	$	16,698	$	4,914	$	67,197	$	26,562	$	7,887	$	1,510	$	97,104	$	124,421	$	46,217	$	457,309
Charge-offs		(189)		—		(686)		—		(87)		(3,635)		—		—		(2,048)		(535)		(1,856)		(9,036)
Recoveries		771		83		1,183		1		430		1,041		3		—		464		732		2,235		6,943
Net recoveries (charge offs)		582		83		497		1		343		(2,594)		3		—		(1,584)		197		379		(2,093)
Provision (benefit) ⁽¹⁾		(8,323)		(496)		(2,645)		(427)		(22,052)		1,729		(2,007)		(447)		(20,028)		(34,214)		(15,905)		(104,815)
Balance at end of period June 30, 2021	$	55,820	$	825	$	14,550	$	4,488	$	45,488	$	25,697	$	5,883	$	1,063	$	75,492	$	90,404	$	30,691	$	350,401

Six Months Ended June 30, 2020
Allowance for credit losses:
Balance at beginning of period January 1, 2020	$	6,128	$	15	$	4,327	$	815	$	6,211	$	4,350	$	1,557	$	956	$	10,879	$	15,219	$	6,470	$	56,927
Impact of Adoption		5,455		11		3,849		779		5,588		3,490		1,391		914		9,505		13,898		6,150		51,030
Initial PCD Allowance		406		3		289				351		669		97				898		656		39		3,408
Adjusted CECL balance, January 1, 2020	$	11,989	$	29	$	8,465	$	1,594	$	12,150	$	8,509	$	3,045	$	1,870	$	21,282	$	29,773	$	12,659	$	111,365
Impact of merger on provision for non-PCD loans		16,712		226		4,227		4,893		7,673		3,836		1,212		919		25,393		35,067		9,284		109,442
Initial PCD Allowance		29,906		804		5,119		1,302		6,035		6,120		902		1,003		35,332		45,785		18,638		150,946
Charge-offs		(383)		(24)		(681)		(31)		(174)		(2,908)		—		—		(623)		(23)		(807)		(5,654)
Recoveries		591		146		623		—		849		896		55		—		428		76		575		4,239
Net charge offs		208		122		(58)		(31)		675		(2,012)		55		—		(195)		53		(232)		(1,415)
Provision (benefit) ⁽¹⁾		8,671		(100)		8,869		1,537		7,379		3,717		2,578		283		8,394		20,196		2,746		64,270
Balance at end of period June 30, 2020	$	67,486	$	1,081	$	26,622	$	9,295	$	33,912	$	20,170	$	7,792	$	4,075	$	90,206	$	130,874	$	43,095	$	434,608

(1)

A negative provision (recovery) for credit losses of $12.4 million was recorded during the first six months of 2021, compared to an additional provision for credit losses of $14.3 million, of which, $9.6 million was from the initial impact from the merger with CSFL, recorded during the first six months of 2020 for the allowance for credit losses for unfunded commitments that is not included in the above table.

- Definition

The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security.

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