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Allowance for Credit Losses (ACL)

12 Months Ended

Dec. 31, 2022

Note 5—Allowance for Credit Losses (ACL)

See Note 1—Summary of Significant Accounting Policies 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
Year Ended December 31, 2022
Allowance for credit losses:
Balance at end of period December 31, 2021	$	47,036	$	611	$	13,325	$	4,997	$	37,593	$	23,149	$	4,921	$	565	$	61,794	$	79,649	$	28,167	$	301,807
Initial Allowance for PCD loans acquired during period		811		—		—		—		86		—		—		—		2,409		—		10,452		13,758
Initial Allowance for Non PCD loans acquired during period		352		26		132		2		1,887		51		426		—		2,519		2,697		5,605		13,697
Charge-offs		(197)		(19)		(445)		(21)		(4)		(10,214)		—		—		(1,976)		(368)		(10,202)		(23,446)
Recoveries		1,233		231		3,981		8		1,104		2,426		—		—		1,327		581		8,282		19,173
Net recoveries (charge offs)		1,036		212		3,536		(13)		1,100		(7,788)		—		—		(649)		213		(1,920)		(4,273)
Provision (benefit) ⁽¹⁾		22,953		(444)		(2,107)		3,988		4,744		7,355		(1,663)		284		(7,990)		(4,074)		8,409		31,455
Balance at end of period December 31, 2022	$	72,188	$	405	$	14,886	$	8,974	$	45,410	$	22,767	$	3,684	$	849	$	58,083	$	78,485	$	50,713	$	356,444

Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	72,751	$	406	$	12,616	$	8,800	$	44,748	$	22,767	$	3,545	$	706	$	48,740	$	74,424	$	43,935	$	333,438
Individually evaluated		233		—		2,462		—		286		—		—		—		7,829		2,268		1,689		14,767
Total quantitative allowance		72,984		406		15,078		8,800		45,034		22,767		3,545		706		56,569		76,692		45,624		348,205
Qualitative allowance		(796)		(1)		(192)		174		376		—		139		143		1,514		1,793		5,089		8,239
Balance at end of period December 31, 2022	$	72,188	$	405	$	14,886	$	8,974	$	45,410	$	22,767	$	3,684	$	849	$	58,083	$	78,485	$	50,713	$	356,444
Year Ended December 31, 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		(204)		—		(1,002)		(29)		(87)		(8,809)		—		—		(2,052)		(863)		(3,853)		(16,899)
Recoveries		1,547		146		2,256		60		1,861		2,075		3		—		970		1,070		3,812		13,800
Net recoveries (charge offs)		1,343		146		1,254		31		1,774		(6,734)		3		—		(1,082)		207		(41)		(3,099)
Provision (benefit) ⁽¹⁾		(17,868)		(773)		(4,627)		52		(31,378)		3,321		(2,969)		(945)		(34,228)		(44,979)		(18,009)		(152,403)
Balance at end of period December 31, 2021	$	47,036	$	611	$	13,325	$	4,997	$	37,593	$	23,149	$	4,921	$	565	$	61,794	$	79,649	$	28,167	$	301,807

Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	45,575	$	611	$	12,954	$	4,989	$	37,159	$	21,887	$	4,921	$	565	$	60,353	$	77,494	$	25,702	$	292,210
Individually evaluated		150		—		91		—		434		—		—		—		590		196		1,003		2,464
Total quantitative allowance		45,725		611		13,045		4,989		37,593		21,887		4,921		565		60,943		77,690		26,705		294,674
Qualitative allowance		1,311		—		280		8		—		1,262		—		—		851		1,959		1,462		7,133
Balance at end of period December 31, 2021	$	47,036	$	611	$	13,325	$	4,997	$	37,593	$	23,149	$	4,921	$	565	$	61,794	$	79,649	$	28,167	$	301,807
Year Ended December 31, 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 Allowance for PCD loans acquired during period		29,935		804		5,119		1,302		6,035		6,120		902		1,003		34,077		45,787		18,320		149,404
Charge-offs		(528)		(24)		(1,053)		(32)		(347)		(6,158)		—		—		(1,205)		(601)		(4,654)		(14,602)
Recoveries		1,143		455		1,251		111		1,407		1,922		71		—		1,089		518		3,810		11,777
Net recoveries (charge offs)		615		431		198		79		1,060		(4,236)		71		—		(116)		(83)		(844)		(2,825)
Provision (benefit) ⁽¹⁾		4,310		(252)		(1,311)		(2,954)		40,279		12,333		2,657		(2,282)		16,468		13,877		6,798		89,923
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

Allowance for credit losses:
Quantitative allowance
Collectively evaluated	$	54,656	$	1,238	$	14,625	$	4,733	$	67,188	$	18,435	$	7,887	$	685	$	91,106	$	116,571	$	38,805	$	415,929
Individually evaluated		82		—		77		—		9		120		—		—		948		6		7		1,249
Total quantitative allowance		54,738		1,238		14,702		4,733		67,197		18,555		7,887		685		92,054		116,577		38,812		417,178
Qualitative allowance		8,823		—		1,996		181		—		8,007		—		825		5,050		7,844		7,405		40,131
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

(1)

Provision for credit losses of $36.7 million was recorded during 2022 compared to a negative provision (recovery) for credit losses of $12.9 million recorded during 2021 and a provision for credit losses of $43.4 million during 2020 for the release for unfunded commitments, which is not included in the table above.

- 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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