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Allowance for Credit Losses | 12 Months Ended
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Dec. 31, 2022
Credit Loss [Abstract] |
Allowance for Credit Losses | Allowance for Credit LossesIn accordance with ASC 326, the Company is required to measure the allowance for credit losses of financial assets with similar risk characteristics on a collective or pooled basis. In considering the segmentation of financial assets measured at amortized cost into pools, the Company considered various risk characteristics in its analysis. Generally, the segmentation utilized represents the level at which the Company develops and documents its systematic methodology to determine the allowance for credit losses for the financial asset held at amortized cost, specifically the Company’s loan portfolio and debt securities classified as held-to-maturity. Below is a summary of the Company’s loan portfolio segments and major debt security types: Commercial loans: The Company makes commercial loans for many purposes, including working capital lines and leasing arrangements, that are generally renewable annually and supported by business assets, personal guarantees and additional collateral. Underlying collateral includes receivables, inventory, enterprise value and the assets of the business. Commercial business lending is generally considered to involve a slightly higher degree of risk than traditional consumer bank lending. This portfolio includes a range of industries, including manufacturing, restaurants, franchise, professional services, equipment finance and leasing, mortgage warehouse lending and industrial. Individually assessed collateral dependent commercial loans are primarily collateralized by equipment and the enterprise value or assets of the specific business. Commercial real estate loans, including construction and development, and non-construction: The Company’s commercial real estate loans are generally secured by a first mortgage lien and assignment of rents on the underlying property (utilized in related assessment of individually assessed collateral dependent loans). Since most of the Company’s bank branches are located in the Chicago metropolitan area and southern Wisconsin, a significant portion of the Company’s commercial real estate loan portfolio is located in this region. As the risks and circumstances of such loans in construction phase vary from that of non-construction commercial real estate loans, the Company assesses the allowance for credit losses separately for these two segments. Home equity loans: The Company’s home equity loans and lines of credit are primarily originated by each of the bank subsidiaries in their local markets where there is a strong understanding of the underlying real estate value. The Company’s banks monitor and manage these loans, and conduct an automated review of all home equity lines of credit at least twice per year. This review collects FICO and Bankruptcy scores for each home equity borrower and identifies situations where the credit strength of the borrower is declining. When other specific events occur that may influence repayment, information such as tax liens or judgments is collected. The bank subsidiaries use this information to manage loans that may be higher risk and to determine whether to obtain additional credit information or updated property valuations. In a limited number of cases, the Company may issue home equity credit together with first mortgage financing, and requests for such financing are evaluated on a combined basis. Residential real estate loans, including early buy-out loans guaranteed by U.S. government agencies: The Company’s residential real estate portfolio includes one- to four-family adjustable rate mortgages, construction loans to individuals and bridge financing loans for qualifying customers as well as certain long-term fixed rate loans. The Company’s residential mortgages relate to properties located principally in the Chicago metropolitan area and southern Wisconsin or vacation homes owned by local residents. Due to interest rate risk considerations, the Company generally sells in the secondary market loans originated with long-term fixed rates, for which we receive fee income. The Company also selectively retains certain of these loans within the banks’ own loan portfolios where they are non-agency conforming, or where the terms of the loans make them favorable to retain. Since this loan portfolio consists primarily of locally originated loans, and since the majority of the borrowers are longer-term customers with lower LTV ratios, the Company may face a relatively low risk of borrower default and delinquency. Collateral dependent residential real estate loans that are individually assessed when measuring the allowance for credit losses are primarily collateralized by such one-to-four family properties noted above. It is not the Company’s current practice to underwrite, and there are no plans to underwrite subprime, Alt A, no or little documentation loans, or option ARM loans. Additionally, early buy-out loans guaranteed by U.S. government agencies include loans in which the Company is eligible or has exercised its option under the Government National Mortgage Association (“GNMA”) securitization program to repurchase certain delinquent mortgage loans. Such loans were previously transferred by the Company with servicing of such loans retained. Early buy-out loans are insured or guaranteed by the Federal Housing Administration (“FHA”) or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans. Premium finance receivables: The Company makes loans to businesses to finance the insurance premiums they pay on their property and casualty insurance policies. The loans are indirectly originated by working through independent medium and large insurance agents and brokers located throughout the United States and Canada. The insurance premiums financed are primarily for commercial customers’ purchases of liability, property and casualty and other commercial insurance. This lending involves relatively rapid turnover of the loan portfolio and high volume of loan originations. The Company performs ongoing credit and other reviews of the agents and brokers, and performs various internal audit steps to mitigate against the risk of any fraud. The Company also originates life insurance premium finance receivables. These loans are originated directly with the borrowers with assistance from life insurance carriers, independent insurance agents, financial advisors and legal counsel. The life insurance policy is the primary form of collateral. In addition, these loans often are secured with a letter of credit, marketable securities or certificates of deposit. In some cases, the Company may make a loan that has a partially unsecured position. Consumer and other loans: Included in the consumer and other loan category is a wide variety of personal and consumer loans to individuals. The Company originates consumer loans in order to provide a wider range of financial services to its customers. Consumer loans generally have shorter terms and higher interest rates than mortgage loans but generally involve more credit risk than mortgage loans due to the type and nature of the collateral. U.S. government agency securities: This security type includes debt obligations of certain government-sponsored entities of the U.S. government such as the Federal Home Loan Bank, Federal Agricultural Mortgage Corporation, Federal Farm Credit Banks Funding Corporation and Fannie Mae. Such securities often contain an explicit or implicit guarantee of the U.S. government. Municipal securities: The Company’s municipal securities portfolio includes bond issues for various municipal government entities located throughout the United States, including the Chicago metropolitan area and southern Wisconsin, some of which are privately placed and non-rated. Though the risk of loss is typically low, default history exists on municipal securities within the United States. Mortgage-backed securities: This security type includes debt obligations supported by pools of individual mortgage loans and issued by certain government-sponsored entities of the U.S. government such as Freddie Mac and Fannie Mae. Such securities are considered to contain an implicit guarantee of the U.S. government. Corporate notes: The Company’s corporate notes portfolio includes bond issues for various public companies representing a diversified population of industries. The risk of loss in this portfolio is considered low based on the characteristics of the investments. In accordance with ASC 326, the Company elected to not measure an allowance for credit losses on accrued interest. As such, accrued interest is written off in a timely manner when deemed uncollectible. Any such write-off of accrued interest will reverse previously recognized interest income. In addition, the Company elected to not include accrued interest within presentation and disclosures of the carrying amount of financial assets held at amortized cost. This election is applicable to the various disclosures included within the Company’s financial statements. Accrued interest related to financial assets held at amortized cost is included within accrued interest receivable and other assets within the Company’s Consolidated Statements of Condition and totaled $214.0 million at December 31, 2022 and $117.4 million at December 31, 2021. The tables below show the aging of the Company’s loan portfolio by the segmentation noted above at December 31, 2022 and 2021.
As of December 31, 2022 (In thousands) |  | Nonaccrual |  | 90+ days and still accruing |  | 60-89 days past due |  | 30-59 days past due |  | Current |  | Total Loans
Loan Balances (includes PCD): |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 35,579 |  |  | $ | 462 |  |  | $ | 21,128 |  |  | $ | 56,696 |  |  | $ | 12,435,299 |  |  | $ | 12,549,164 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Construction and development |  | 416 |  |  | — |  |  | 361 |  |  | 14,390 |  |  | 1,471,763 |  |  | 1,486,930 |
Non-construction |  | 5,971 |  |  | — |  |  | 1,883 |  |  | 16,285 |  |  | 8,439,878 |  |  | 8,464,017 |
Home equity |  | 1,487 |  |  | — |  |  | — |  |  | 2,152 |  |  | 329,059 |  |  | 332,698 |
Residential real estate loans, excluding early buy-out loans |  | 10,171 |  |  | — |  |  | 4,364 |  |  | 9,982 |  |  | 2,183,078 |  |  | 2,207,595 |
Premium finance receivables |  |  |  |  |  |  |  |  |  |  |  |
Property & casualty insurance loans |  | 13,470 |  |  | 15,841 |  |  | 14,926 |  |  | 40,557 |  |  | 5,764,665 |  |  | 5,849,459 |
Life insurance loans |  | — |  |  | 17,245 |  |  | 5,260 |  |  | 68,725 |  |  | 7,999,768 |  |  | 8,090,998 |
Consumer and other |  | 6 |  |  | 49 |  |  | 18 |  |  | 224 |  |  | 50,539 |  |  | 50,836 |
Total loans, net of unearned income, excluding early buy-out loans |  | $ | 67,100 |  |  | $ | 33,597 |  |  | $ | 47,940 |  |  | $ | 209,011 |  |  | $ | 38,674,049 |  |  | $ | 39,031,697 |
Early buy-out loans guaranteed by U.S. government agencies (1) |  | 31,279 |  |  | 47,450 |  |  | 984 |  |  | 1,584 |  |  | 83,491 |  |  | 164,788 |
Total loans, net of unearned income |  | $ | 98,379 |  |  | $ | 81,047 |  |  | $ | 48,924 |  |  | $ | 210,595 |  |  | $ | 38,757,540 |  |  | $ | 39,196,485 |
As of December 31, 2021 (In thousands) |  | Nonaccrual |  | 90+ days and still accruing |  | 60-89 days past due |  | 30-59 days past due |  | Current |  | Total Loans
Loan Balances (includes PCD): |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 20,399 |  |  | $ | 15 |  |  | $ | 24,262 |  |  | $ | 43,861 |  |  | $ | 11,815,531 |  |  | $ | 11,904,068 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Construction and development |  | 1,377 |  |  | — |  |  | — |  |  | 2,809 |  |  | 1,352,018 |  |  | 1,356,204 |
Non-construction |  | 20,369 |  |  | — |  |  | 284 |  |  | 37,634 |  |  | 7,575,795 |  |  | 7,634,082 |
Home equity |  | 2,574 |  |  | — |  |  | — |  |  | 1,120 |  |  | 331,461 |  |  | 335,155 |
Residential real estate loans, excluding early buy-out loans |  | 16,440 |  |  | — |  |  | 982 |  |  | 12,145 |  |  | 1,576,704 |  |  | 1,606,271 |
Premium finance receivables |  |  |  |  |  |  |  |  |  |  |  |
Property & casualty insurance loans |  | 5,433 |  |  | 7,210 |  |  | 15,490 |  |  | 22,419 |  |  | 4,804,935 |  |  | 4,855,487 |
Life insurance loans |  | — |  |  | 7 |  |  | 12,614 |  |  | 66,651 |  |  | 6,963,538 |  |  | 7,042,810 |
Consumer and other |  | 477 |  |  | 137 |  |  | 34 |  |  | 509 |  |  | 23,042 |  |  | 24,199 |
Total loans, net of unearned income, excluding early buy-out loans |  | $ | 67,069 |  |  | $ | 7,369 |  |  | $ | 53,666 |  |  | $ | 187,148 |  |  | $ | 34,443,024 |  |  | $ | 34,758,276 |
Early buy-out loans guaranteed by U.S. government agencies (1) |  | — |  |  | — |  |  | — |  |  | 275 |  |  | 30,553 |  |  | 30,828 |
Total loans, net of unearned income |  | $ | 67,069 |  |  | $ | 7,369 |  |  | $ | 53,666 |  |  | $ | 187,423 |  |  | $ | 34,473,577 |  |  | $ | 34,789,104 |
(1)Early buy-out loans are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans. Credit Quality Indicators Credit quality indicators, specifically the Company’s internal risk rating systems, reflect how the Company monitors credit losses and represents factors used by the Company when measuring the allowance for credit losses. The following discusses the Company’s credit quality indicators by financial asset. Loan portfolios The Company’s ability to manage credit risk depends in large part on its ability to properly identify and manage problem loans. To do so, the Company operates a credit risk rating system under which credit management personnel assign a credit risk rating (1 to 10 rating, with higher scores indicating higher risk) to each loan at the time of origination and review loans on a regular basis. For loans measured at amortized cost, these credit risk ratings are also an important aspect of the Company’s allowance for credit losses measurement methodology. The credit risk rating structure and classifications are shown below: Pass (risk rating 1 to 5): Based on various factors (liquidity, leverage, etc.), the Company believes asset quality is acceptable and is deemed to not require additional monitoring by the Company. Special mention (risk rating 6): Assets in this category are currently protected, potentially weak, but not to the point of substandard classification. Loss potential is moderate if corrective action is not taken. Substandard accrual (risk rating 7): Assets in this category have well defined weaknesses that jeopardize the liquidation of the debt. Loss potential is distinct but with no discernible impairment. Substandard nonaccrual/doubtful (risk rating 8 and 9): Assets have all the weaknesses in those classified “substandard accrual” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, improbable. Loss/fully charged-off (risk rating 10): Assets in this category are considered fully uncollectible. As such, these assets have no carrying balance on the Company's Consolidated Statements of Condition. Early buy-out loans guaranteed by U.S. government agencies: These loans are measured at fair value and thus excluded from the measurement of the allowance for credit losses. Credit risk rating assigned to such loans are considered in the measurement of fair value as well as related guarantees provided by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans. Generally, each loan officer is responsible for monitoring his or her loan portfolio, recommending a credit risk rating for each loan in his or her portfolio and ensuring the credit risk ratings are appropriate. These credit risk ratings are then ratified by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors including: a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s Problem Loan Reporting system includes all such loans described above with credit risk ratings of 6 through 9. This system is designed to provide an on-going detailed tracking mechanism for each problem loan. Once management determines that a loan has deteriorated to a point where it has a credit risk rating of 6 or worse, the Company’s Managed Asset Division performs an overall credit and collateral review. As part of this review, all underlying collateral is identified and the valuation methodology is analyzed and tracked. As a result of this initial review by the Company’s Managed Asset Division, the credit risk rating is reviewed and a portion of the outstanding loan balance may be deemed uncollectible and, as a result, no longer share similar risk characteristics as its related pool. If that is the case, the individual loan is considered collateral dependent and individually assessed for an allowance for credit loss. The Company’s individual assessment utilizes an independent re-appraisal of the collateral (unless such a third-party evaluation is not possible due to the unique nature of the collateral, such as a closely-held business or thinly traded securities). In the case of commercial real estate collateral, an independent third party appraisal is ordered by the Company’s Real Estate Services Group to determine if there has been any change in the underlying collateral value. These independent appraisals are reviewed by the Real Estate Services Group and sometimes by independent third party valuation experts and may be adjusted depending upon market conditions. Through the credit risk rating process, such loans are reviewed to determine if they are performing in accordance with the original contractual terms. If the borrower has failed to comply with the original contractual terms, further action may be required by the Company, including a downgrade in the credit risk rating, movement to non-accrual status or a charge-off. If the Company determines that a loan amount or portion thereof is uncollectible, the loan’s credit risk rating is immediately downgraded to an 8 or 9 and the uncollectible amount is charged-off. Any loan that has a partial charge-off continues to be assigned a credit risk rating of an 8 or 9 for the duration of time that a balance remains outstanding. The Company undertakes a thorough and ongoing analysis to determine if additional impairment and/or charge-offs are appropriate and to begin a workout plan for the credit to minimize actual losses. In determining the appropriate charge-off for collateral-dependent loans, the Company considers the results of appraisals for the associated collateral. The table below shows the Company’s loan portfolio by credit quality indicator and year of origination at December 31, 2022:
As of December 31, 2022 | Year of Origination |  |  | Revolving |  | Total
(In thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior |  | Revolving | to Term |  | Loans
Loan Balances: |  |  |  |  |  |  |  |  |  |  |
Commercial, industrial and other |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 2,740,821 |  | $ | 2,314,421 |  | $ | 1,064,680 |  | $ | 631,670 |  | $ | 460,898 |  | $ | 847,955 |  |  | $ | 3,999,401 |  | $ | 42,699 |  |  | $ | 12,102,545 |
Special mention | 6,780 |  | 71,263 |  | 10,279 |  | 27,533 |  | 36,874 |  | 17,972 |  |  | 85,813 |  | 1,232 |  |  | 257,746 |
Substandard accrual | 13,560 |  | 42,091 |  | 26,252 |  | 17,104 |  | 5,078 |  | 2,902 |  |  | 46,297 |  | 10 |  |  | 153,294 |
Substandard nonaccrual/doubtful | 574 |  | 5,958 |  | 2,278 |  | 25,481 |  | 197 |  | 1,091 |  |  | — |  | — |  |  | 35,579 |
Total commercial, industrial and other | $ | 2,761,735 |  | $ | 2,433,733 |  | $ | 1,103,489 |  | $ | 701,788 |  | $ | 503,047 |  | $ | 869,920 |  |  | $ | 4,131,511 |  | $ | 43,941 |  |  | $ | 12,549,164 |
Construction and development |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 413,322 |  | $ | 470,162 |  | $ | 261,173 |  | $ | 124,818 |  | $ | 36,591 |  | $ | 90,294 |  |  | $ | 12,000 |  | $ | — |  |  | $ | 1,408,360 |
Special mention | — |  | 517 |  | 14,341 |  | 23,312 |  | 16,778 |  | 82 |  |  | — |  | — |  |  | 55,030 |
Substandard accrual | 2,132 |  | — |  | 8,355 |  | — |  | 100 |  | 12,537 |  |  | — |  | — |  |  | 23,124 |
Substandard nonaccrual/doubtful | — |  | — |  | — |  | — |  | — |  | 416 |  |  | — |  | — |  |  | 416 |
Total construction and development | $ | 415,454 |  | $ | 470,679 |  | $ | 283,869 |  | $ | 148,130 |  | $ | 53,469 |  | $ | 103,329 |  |  | $ | 12,000 |  | $ | — |  |  | $ | 1,486,930 |
Non-construction |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 1,908,428 |  | $ | 1,530,812 |  | $ | 1,045,330 |  | $ | 851,041 |  | $ | 589,268 |  | $ | 2,149,357 |  |  | $ | 181,096 |  | $ | 19,790 |  |  | $ | 8,275,122 |
Special mention | 5,114 |  | 12,556 |  | 6,377 |  | 18,225 |  | 31,849 |  | 41,236 |  |  | — |  | — |  |  | 115,357 |
Substandard accrual | — |  | — |  | 832 |  | 8,507 |  | 23,330 |  | 34,898 |  |  | — |  | — |  |  | 67,567 |
Substandard nonaccrual/doubtful | — |  | — |  | — |  | — |  | 349 |  | 5,622 |  |  | — |  | — |  |  | 5,971 |
Total non-construction | $ | 1,913,542 |  | $ | 1,543,368 |  | $ | 1,052,539 |  | $ | 877,773 |  | $ | 644,796 |  | $ | 2,231,113 |  |  | $ | 181,096 |  | $ | 19,790 |  |  | $ | 8,464,017 |
Home equity |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 198 |  | $ | — |  | $ | — |  | $ | 56 |  | $ | — |  | $ | 5,445 |  |  | $ | 312,183 |  | $ | — |  |  | $ | 317,882 |
Special mention | — |  | 1 |  | — |  | — |  | 255 |  | 991 |  |  | 2,598 |  | 148 |  |  | 3,993 |
Substandard accrual | — |  | — |  | — |  | — |  | — |  | 7,530 |  |  | 910 |  | 896 |  |  | 9,336 |
Substandard nonaccrual/doubtful | — |  | — |  | 118 |  | 18 |  | — |  | 1,251 |  |  | 100 |  | — |  |  | 1,487 |
Total home equity | $ | 198 |  | $ | 1 |  | $ | 118 |  | $ | 74 |  | $ | 255 |  | $ | 15,217 |  |  | $ | 315,791 |  | $ | 1,044 |  |  | $ | 332,698 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |
Early buy-out loans guaranteed by U.S. government agencies | $ | — |  | $ | 901 |  | $ | 9,424 |  | $ | 21,662 |  | $ | 19,700 |  | $ | 113,101 |  |  | $ | — |  | $ | — |  |  | $ | 164,788 |
Pass | 787,652 |  | 835,672 |  | 228,945 |  | 120,596 |  | 49,710 |  | 150,024 |  |  | — |  | — |  |  | 2,172,599 |
Special mention | 3,523 |  | 1,720 |  | 2,100 |  | 1,602 |  | 1,897 |  | 5,247 |  |  | — |  | — |  |  | 16,089 |
Substandard accrual | 1,214 |  | 1,981 |  | 1,111 |  | 149 |  | 428 |  | 3,853 |  |  | — |  | — |  |  | 8,736 |
Substandard nonaccrual/doubtful | 112 |  | 416 |  | 767 |  | 2,176 |  | 1,269 |  | 5,431 |  |  | — |  | — |  |  | 10,171 |
Total residential real estate | $ | 792,501 |  | $ | 840,690 |  | $ | 242,347 |  | $ | 146,185 |  | $ | 73,004 |  | $ | 277,656 |  |  | $ | — |  | $ | — |  |  | $ | 2,372,383 |
Premium finance receivables - property & casualty |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 5,682,665 |  | $ | 55,275 |  | $ | 6,833 |  | $ | 1,707 |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | 5,746,480 |
Special mention | 84,728 |  | 462 |  | 25 |  | — |  | — |  | — |  |  | — |  | — |  |  | 85,215 |
Substandard accrual | 3,965 |  | 329 |  | — |  | — |  | — |  | — |  |  | — |  | — |  |  | 4,294 |
Substandard nonaccrual/doubtful | 10,798 |  | 2,621 |  | 51 |  | — |  | — |  | — |  |  | — |  | — |  |  | 13,470 |
Total premium finance receivables - property & casualty | $ | 5,782,156 |  | $ | 58,687 |  | $ | 6,909 |  | $ | 1,707 |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | 5,849,459 |
Premium finance receivables - life |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 510,675 |  | $ | 779,057 |  | $ | 1,055,247 |  | $ | 931,276 |  | $ | 726,763 |  | $ | 4,080,764 |  |  | $ | — |  | $ | — |  |  | $ | 8,083,782 |
Special mention | — |  | 4,999 |  | — |  | — |  | — |  | 2,217 |  |  | — |  | — |  |  | 7,216 |
Substandard accrual | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  | — |  |  | — |
Substandard nonaccrual/doubtful | — |  | — |  | — |  | — |  | — |  | — |  |  | — |  | — |  |  | — |
Total premium finance receivables - life | $ | 510,675 |  | $ | 784,056 |  | $ | 1,055,247 |  | $ | 931,276 |  | $ | 726,763 |  | $ | 4,082,981 |  |  | $ | — |  | $ | — |  |  | $ | 8,090,998 |
Consumer and other |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 2,921 |  | $ | 1,592 |  | $ | 252 |  | $ | 481 |  | $ | 388 |  | $ | 12,407 |  |  | $ | 32,566 |  | $ | — |  |  | $ | 50,607 |
Special mention | 10 |  | 2 |  | — |  | 3 |  | — |  | 135 |  |  | 3 |  | — |  |  | 153 |
Substandard accrual | 17 |  | 1 |  | — |  | — |  | — |  | 43 |  |  | 9 |  | — |  |  | 70 |
Substandard nonaccrual/doubtful | — |  | 6 |  | — |  | — |  | — |  | — |  |  | — |  | — |  |  | 6 |
Total consumer and other | $ | 2,948 |  | $ | 1,601 |  | $ | 252 |  | $ | 484 |  | $ | 388 |  | $ | 12,585 |  |  | $ | 32,578 |  | $ | — |  |  | $ | 50,836 |
Total loans |  |  |  |  |  |  |  |  |  |  |
Early buy-out loans guaranteed by U.S. government agencies | $ | — |  | $ | 901 |  | $ | 9,424 |  | $ | 21,662 |  | $ | 19,700 |  | $ | 113,101 |  |  | $ | — |  | $ | — |  |  | $ | 164,788 |
Pass | 12,046,682 |  | 5,986,991 |  | 3,662,460 |  | 2,661,645 |  | 1,863,618 |  | 7,336,246 |  |  | 4,537,246 |  | 62,489 |  |  | 38,157,377 |
Special mention | 100,155 |  | 91,520 |  | 33,122 |  | 70,675 |  | 87,653 |  | 67,880 |  |  | 88,414 |  | 1,380 |  |  | 540,799 |
Substandard accrual | 20,888 |  | 44,402 |  | 36,550 |  | 25,760 |  | 28,936 |  | 61,763 |  |  | 47,216 |  | 906 |  |  | 266,421 |
Substandard nonaccrual/doubtful | 11,484 |  | 9,001 |  | 3,214 |  | 27,675 |  | 1,815 |  | 13,811 |  |  | 100 |  | — |  |  | 67,100 |
Total loans | $ | 12,179,209 |  | $ | 6,132,815 |  | $ | 3,744,770 |  | $ | 2,807,417 |  | $ | 2,001,722 |  | $ | 7,592,801 |  |  | $ | 4,672,976 |  | $ | 64,775 |  |  | $ | 39,196,485 |
Held-to-maturity debt securities The Company conducts an assessment of its investment securities, including those classified as held-to-maturity, at the time of purchase and on at least an annual basis to ensure such investment securities remain within appropriate levels of risk and continue to perform satisfactorily in fulfilling its obligations. The Company considers, among other factors, the nature of the securities and credit ratings or financial condition of the issuer. If available, the Company obtains a credit rating for issuers from a Nationally Recognized Statistical Rating Organization (“NRSRO”) for consideration. If no such rating is available for an issuer, the Company performs an internal rating based on the scale utilized within the loan portfolio as discussed above. For purposes of the table below, the Company has converted any issuer rating from an NRSRO into the Company’s internal ratings based on Investment Policy and review by the Company’s management.
As of December 31, 2022 | Year of Origination |  | Total
(In thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior |  | Balance
Amortized Cost Balances: |  |  |  |  |  |  |  |
U.S. government agencies |  |  |  |  |  |  |  |
1-4 internal grade | $ | 160,000 |  | $ | 147,802 |  | $ | 25,000 |  | $ | 4,000 |  | $ | — |  | $ | 2,812 |  |  | $ | 339,614 |
5-7 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
8-10 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
Total U.S. government agencies | $ | 160,000 |  | $ | 147,802 |  | $ | 25,000 |  | $ | 4,000 |  | $ | — |  | $ | 2,812 |  |  | $ | 339,614 |
Municipal |  |  |  |  |  |  |  |
1-4 internal grade | $ | 1,045 |  | $ | 7,001 |  | $ | 269 |  | $ | 159 |  | $ | 7,401 |  | $ | 163,153 |  |  | $ | 179,027 |
5-7 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
8-10 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
Total municipal | $ | 1,045 |  | $ | 7,001 |  | $ | 269 |  | $ | 159 |  | $ | 7,401 |  | $ | 163,153 |  |  | $ | 179,027 |
Mortgage-backed securities |  |  |  |  |  |  |  |
1-4 internal grade | $ | 616,478 |  | $ | 2,447,704 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | 3,064,182 |
5-7 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
8-10 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
Total mortgage-backed securities | $ | 616,478 |  | $ | 2,447,704 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  |  | $ | 3,064,182 |
Corporate notes |  |  |  |  |  |  |  |
1-4 internal grade | $ | 14,963 |  | $ | — |  | $ | 6,010 |  | $ | 7,312 |  | $ | 3,182 |  | $ | 26,765 |  |  | $ | 58,232 |
5-7 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
8-10 internal grade | — |  | — |  | — |  | — |  | — |  | — |  |  | — |
Total corporate notes | $ | 14,963 |  | $ | — |  | $ | 6,010 |  | $ | 7,312 |  | $ | 3,182 |  | $ | 26,765 |  |  | $ | 58,232 |
Total held-to-maturity securities |  |  |  |  |  |  |  | $ | 3,641,055 |
Less: Allowance for credit losses |  |  |  |  |  |  |  | (488) |
Held-to-maturity securities, net of allowance for credit losses |  |  |  |  |  |  |  | $ | 3,640,567 |
Measurement of Allowance for Credit Losses The Company’s allowance for credit losses consists of the allowance for loan losses, the allowance for unfunded commitment losses and the allowance for held-to-maturity debt security losses. In accordance with ASC 326, the Company measures the allowance for credit losses at the time of origination or purchase of a financial asset, representing an estimate of lifetime expected credit losses on the related asset. When developing its estimate, the Company considers available information relevant to assessing the collectability of cash flows, from both internal and external sources. Historical credit loss experience is one input in the estimation process as well as inputs relevant to current conditions and reasonable and supportable forecasts. In considering past events, the Company considers the relevance, or lack thereof, of historical information due to changes in such things as financial asset underwriting or collection practices, and changes in portfolio mix due to changing business plans and strategies. In considering current conditions and forecasts, the Company considers both the current economic environment and the forecasted direction of the economic environment with emphasis on those factors deemed relevant to or driving changes in expected credit losses. As significant judgment is required, the review of the appropriateness of the allowance for credit losses is performed quarterly by various committees with participation by the Company’s executive management.
|  | December 31, |  | December 31,
(In thousands) |  | 2022 |  | 2021
Allowance for loan losses |  | $ | 270,173 |  |  | $ | 247,835 |
Allowance for unfunded lending-related commitments losses |  | 87,275 |  |  | 51,818 |
Allowance for loan losses and unfunded lending-related commitments losses |  | 357,448 |  |  | 299,653 |
Allowance for held-to-maturity securities losses |  | 488 |  |  | 78 |
Allowance for credit losses |  | $ | 357,936 |  |  | $ | 299,731 |
The allowance for credit losses is measured on a collective or pooled basis when similar risk characteristics exist, based upon the segmentation discussed above. The Company utilizes modeling methodologies that estimate lifetime credit loss rates on each pool, including methodologies estimating the probability of default and loss given default on specific segments. Historical credit loss history is adjusted for reasonable and supportable forecasts developed by the Company on a quantitative or qualitative basis and incorporates third party economic forecasts. Reasonable and supportable forecasts consider the macroeconomic factors that are most relevant to evaluating and predicting expected credit losses in the Company’s financial assets. Currently, the Company utilizes an eight quarter forecast period using Moody’s baseline scenario from November 2022, which is reviewed within the Company’s governance structure. For periods beyond the ability to develop reasonable and supportable forecasts, the Company reverts to historical loss rates at an input level, straight-line over a four quarter reversion period. Expected credit losses are measured over the contractual term of the financial asset with consideration of expected prepayments. Expected extensions, renewals or modifications of the financial asset are only considered when either (1) the expected extension, renewal or modification is contained within the existing agreement and is not unconditionally cancelable, or (2) the expected extension, renewal or modification is reasonably expected to result in a TDR. The methodologies discussed above are applied to both current asset balances on the Company’s Consolidated Statements of Condition and off-balance sheet commitments (i.e. unfunded lending-related commitments). Assets that do not share similar risk characteristics with a pool are assessed for the allowance for credit losses on an individual basis. These typically include assets experiencing financial difficulties, including assets rated as substandard nonaccrual and doubtful as well as assets currently classified or expected to be classified as TDRs. If foreclosure is probable or the asset is considered collateral-dependent, expected credit losses are measured based upon the fair value of the underlying collateral adjusted for selling costs, if appropriate. Underlying collateral across the Company’s segments consist primarily of real estate, land and construction assets as well as general business assets of the borrower. As of December 31, 2022, excluding loans carried at fair value, substandard nonaccrual and doubtful loans totaling $21.1 million in carrying balance had no related allowance for credit losses. For certain accruing current and expected TDRs, expected credit losses are measured based upon the present value of future cash flows of the modified asset terms compared to the amortized cost of the asset. As of December 31, 2022, there were no loans identified as being reasonably expected to be modified into TDRs in the future. The Company does not measure an allowance for credit losses on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when assets are placed on nonaccrual status. A summary of the activity in the allowance for credit losses by loan portfolio (i.e. allowance for loan losses and allowance for unfunded commitment losses) for the years ended December 31, 2022 and 2021 is as follows:
Year Ended December 31, 2022 (In thousands) |  | Commercial |  | Commercial Real Estate |  | Home Equity |  | Residential Real Estate |  | Premium Finance Receivable |  | Consumer and Other |  | Total Loans
Allowance for credit losses at beginning of period |  | $ | 119,307 |  |  | $ | 144,583 |  |  | $ | 10,699 |  |  | $ | 8,782 |  |  | $ | 15,859 |  |  | $ | 423 |  |  | 299,653 |
Other adjustments |  | — |  |  | — |  |  | — |  |  | — |  |  | (108) |  |  | — |  |  | (108) |
Charge-offs |  | (14,141) |  |  | (1,379) |  |  | (432) |  |  | (471) |  |  | (14,275) |  |  | (1,081) |  |  | (31,779) |
Recoveries |  | 4,748 |  |  | 701 |  |  | 319 |  |  | 77 |  |  | 5,522 |  |  | 136 |  |  | 11,503 |
Provision for credit losses |  | 32,855 |  |  | 40,447 |  |  | (3,013) |  |  | 3,197 |  |  | 3,673 |  |  | 1,020 |  |  | 78,179 |
Allowance for credit losses at period end |  | $ | 142,769 |  |  | $ | 184,352 |  |  | $ | 7,573 |  |  | $ | 11,585 |  |  | $ | 10,671 |  |  | $ | 498 |  |  | $ | 357,448 |
By measurement method: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 5,973 |  |  | $ | 61 |  |  | $ | 50 |  |  | $ | 715 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,799 |
Collectively evaluated for impairment |  | 136,796 |  |  | 184,291 |  |  | 7,523 |  |  | 10,870 |  |  | 10,671 |  |  | 498 |  |  | 350,649 |
Loans at period end: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 38,042 |  |  | $ | 21,435 |  |  | $ | 10,351 |  |  | $ | 20,300 |  |  | $ | — |  |  | $ | 69 |  |  | $ | 90,197 |
Collectively evaluated for impairment |  | 12,511,122 |  |  | 9,929,512 |  |  | 322,347 |  |  | 2,172,151 |  |  | 13,940,457 |  |  | 50,767 |  |  | 38,926,356 |
Loans held at fair value |  | — |  |  | — |  |  | — |  |  | 179,932 |  |  | — |  |  | — |  |  | 179,932 |
Year Ended December 31, 2021 (In thousands) |  | Commercial |  | Commercial Real Estate |  | Home Equity |  | Residential Real Estate |  | Premium Finance Receivable |  | Consumer and Other |  | Total Loans
Allowance for credit losses at beginning of period |  | $ | 94,212 |  |  | $ | 243,603 |  |  | $ | 11,437 |  |  | $ | 12,459 |  |  | $ | 17,777 |  |  | $ | 422 |  |  | $ | 379,910 |
Initial allowance for credit losses recognized on PCD assets acquired during the period (1) |  | 470 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 470 |
Other adjustments |  | — |  |  | — |  |  | — |  |  | — |  |  | 3 |  |  | — |  |  | 3 |
Charge-offs |  | (20,801) |  |  | (3,293) |  |  | (336) |  |  | (1,082) |  |  | (9,020) |  |  | (487) |  |  | (35,019) |
Recoveries |  | 2,559 |  |  | 1,304 |  |  | 1,203 |  |  | 330 |  |  | 7,989 |  |  | 184 |  |  | 13,569 |
Provision for credit losses |  | 42,867 |  |  | (97,031) |  |  | (1,605) |  |  | (2,925) |  |  | (890) |  |  | 304 |  |  | (59,280) |
Allowance for credit losses at period end |  | $ | 119,307 |  |  | $ | 144,583 |  |  | $ | 10,699 |  |  | $ | 8,782 |  |  | $ | 15,859 |  |  | $ | 423 |  |  | $ | 299,653 |
By measurement method: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 5,196 |  |  | $ | 2,237 |  |  | $ | 192 |  |  | $ | 899 |  |  | $ | — |  |  | $ | 28 |  |  | $ | 8,552 |
Collectively evaluated for impairment |  | 114,111 |  |  | 142,346 |  |  | 10,507 |  |  | 7,883 |  |  | 15,859 |  |  | 395 |  |  | 291,101 |
Loans at period end: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 24,530 |  |  | $ | 30,167 |  |  | $ | 14,656 |  |  | $ | 23,306 |  |  | $ | — |  |  | $ | 611 |  |  | $ | 93,270 |
Collectively evaluated for impairment |  | 11,879,538 |  |  | 8,960,119 |  |  | 320,499 |  |  | 1,575,195 |  |  | 11,898,297 |  |  | 23,588 |  |  | 34,657,236 |
Loan held at fair value |  | — |  |  | — |  |  | — |  |  | 38,598 |  |  | — |  |  | — |  |  | 38,598 |
(1)The initial allowance for credit losses on PCD loans acquired during 2021 measured approximately $2.8 million, of which $2.3 million was charged off related to PCD loans that met the Company’s charge-off policy at the time of acquisition. After considering these loans that were immediately charged off, the net impact of PCD allowance for credit losses at the acquisition date was approximately $470,000. For the year ending December 31, 2022, the Company recognized an approximately $78.2 million provision for credit losses related to loans and lending agreements, including an approximately $40.4 million provision for credit losses related to the commercial real estate portfolio. The increased provision was primarily the result of changes in the macroeconomic forecast, specifically the Company’s macroeconomic forecasts of key model inputs (most notably, Commercial Real Estate Price Index primarily impacting the commercial real estate portfolio and Baa corporate credit spreads) as well as growth experienced by the Company in 2022 in various loan portfolios. While uncertainties remain regarding expected economic performance, macroeconomic forecasts as of December 31, 2022 assume that the impact of those uncertainties is more severe compared to that assumed at December 31, 2021. Other key drivers of provision for credit losses in these portfolios include, but are not limited to, positive loan risk rating migration and net charge-offs in 2022 totaled $20.3 million. Held-to-maturity debt securities The allowance for credit losses on the Company’s held-to-maturity debt securities is presented as a reduction to the amortized cost basis of held-to-maturity securities on the Company’s Consolidated Statements of Condition. For the years ended December 31, 2022 and December 31, 2021, the Company recognized approximately $410,000 and $17,000, respectively, of provision for credit losses related to held-to-maturity securities. At December 31, 2022 and December 31, 2021, the Company did not identify any losses within its portfolio that would be deemed a credit loss and require additional measurement of an allowance for credit losses. TDRs At December 31, 2022, the Company had $41.1 million in loans modified in TDRs. The $41.1 million in TDRs represents 191 credits in which economic concessions were granted to certain borrowers to better align the terms of their loans with their current ability to pay. The Company’s approach to restructuring loans is built on its credit risk rating system, which requires credit management personnel to assign a credit risk rating to each loan. In each case, the loan officer is responsible for recommending a credit risk rating for each loan and ensuring the credit risk ratings are appropriate. These credit risk ratings are then reviewed and approved by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors including a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s credit risk rating scale is one through ten with higher scores indicating higher risk. In the case of loans rated six or worse following modification, the Company’s Managed Assets Division evaluates the loan and the credit risk rating and determines that the loan has been restructured to be reasonably assured of repayment and of performance according to the modified terms and is supported by a current, well-documented credit assessment of the borrower’s financial condition and prospects for repayment under the revised terms. A modification of a loan with an existing credit risk rating of 6 or worse or a modification of any other credit, which will result in a restructured credit risk rating of 6 or worse must be reviewed for possible TDR classification. In that event, the Company’s Managed Assets Division conducts an overall credit and collateral review. A modification of a loan is considered to be a TDR if both (1) the borrower is experiencing financial difficulty and (2) for economic or legal reasons, the bank grants a concession to a borrower that it would not otherwise consider. The modification of a loan where the credit risk rating is 5 or better after such modification is not considered to be a TDR. Based on the Company’s credit risk rating system, it considers that borrowers whose credit risk rating is 5 or better are not experiencing financial difficulties and therefore, are not considered TDRs. All credits determined to be a TDR will continue to be classified as a TDR in all subsequent periods, unless the borrower has been in compliance with the loan’s modified terms for a period of six months (including over a calendar year-end) and the current interest rate represents a market rate at the time of restructuring. The Managed Assets Division, in consultation with the respective loan officer, determines whether the modified interest rate represented a current market rate at the time of restructuring. Using knowledge of current market conditions and rates, competitive pricing on recent loan originations, and an assessment of various characteristics of the modified loan (including collateral position and payment history), an appropriate market rate for a new borrower with similar risk is determined. If the modified interest rate meets or exceeds this market rate for a new borrower with similar risk, the modified interest rate represents a market rate at the time of restructuring. Additionally, before removing a loan from TDR classification, a review of the current or previously measured impairment on the loan and any concerns related to future performance by the borrower is conducted. If concerns exist about the future ability of the borrower to meet its obligations under the loans based on a credit review by the Managed Assets Division, the TDR classification is not removed from the loan. TDRs are individually assessed at the time of modification and on a quarterly basis to measure an allowance for credit loss. The carrying amount of the loan is compared to the expected payments to be received, discounted at the loan’s original rate, or for collateral dependent loans, to the fair value of the collateral. Any shortfall is recorded as a reserve. Each TDR was individually assessed at December 31, 2022 and approximately $871,000 of allowance for credit losses was measured through the Company’s normal reserving methodology. TDRs may arise in which, due to financial difficulties experienced by the borrower, the Company obtains through physical possession one or more collateral assets in satisfaction of all or part of an existing credit. Once possession is obtained, the Company reclassifies the appropriate portion of the remaining balance of the credit from loans to OREO, which is included within other assets in the Consolidated Statements of Condition. For any residential real estate property collateralizing a consumer mortgage loan, the Company is considered to possess the related collateral only if legal title is obtained upon completion of foreclosure, or the borrower conveys all interest in the residential real estate property to the Company through completion of a deed in lieu of foreclosure or similar legal agreement. At December 31, 2022, the Company had $1.6 million of foreclosed residential real estate properties included within OREO. Further, the recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $59.5 million and $9.6 million at December 31, 2022 and 2021, respectively. The tables below present a summary of the post-modification balance of loans restructured during the years ended December 31, 2022, 2021, and 2020 which represent TDRs:
Year ended December 31, 2022 |  | Total (1)(2) |  | Extension at Below Market Terms (2) |  | Reduction of Interest Rate (2) |  | Modification to Interest-only Payments (2) |  | Forgiveness of Debt (2)
(In thousands) |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, industrial and other |  | 5 |  |  | $ | 468 |  |  | 4 |  |  | $ | 305 |  |  | 1 |  |  | $ | 85 |  |  | 2 |  |  | $ | 248 |  |  | — |  |  | $ | — |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-construction |  | 3 |  |  | 8,833 |  |  | 1 |  |  | 1,178 |  |  | 1 |  |  | 1,178 |  |  | 3 |  |  | 8,833 |  |  | — |  |  | — |
Residential real estate and other |  | 32 |  |  | 4,076 |  |  | 31 |  |  | 4,075 |  |  | 20 |  |  | 3,002 |  |  | — |  |  | — |  |  | — |  |  | — |
Total loans |  | 40 |  |  | $ | 13,377 |  |  | 36 |  |  | $ | 5,558 |  |  | 22 |  |  | $ | 4,265 |  |  | 5 |  |  | $ | 9,081 |  |  | — |  |  | $ | — |
Year ended December 31, 2021 |  | Total (1)(2) |  | Extension at Below Market Terms (2) |  | Reduction of Interest Rate (2) |  | Modification to Interest-only Payments (2) |  | Forgiveness of Debt (2)
(In thousands) |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, industrial and other |  | 16 |  |  | $ | 5,074 |  |  | 7 |  |  | $ | 847 |  |  | 1 |  |  | $ | 300 |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-construction |  | 5 |  |  | 2,944 |  |  | 4 |  |  | 2,401 |  |  | 2 |  |  | 656 |  |  | 1 |  |  | 113 |  |  | — |  |  | — |
Residential real estate and other |  | 43 |  |  | 5,851 |  |  | 40 |  |  | 5,683 |  |  | 17 |  |  | 4,123 |  |  | 9 |  |  | 4,227 |  |  | — |  |  | — |
Total loans |  | 64 |  |  | $ | 13,869 |  |  | 51 |  |  | $ | 8,931 |  |  | 20 |  |  | $ | 5,079 |  |  | 10 |  |  | $ | 4,340 |  |  | — |  |  | $ | — |
Year ended December 31, 2020 |  | Total (1)(2) |  | Extension at Below Market Terms (2) |  | Reduction of Interest Rate (2) |  | Modification to Interest-only Payments (2) |  | Forgiveness of Debt (2)
(In thousands) |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, industrial and other |  | 21 |  |  | $ | 12,362 |  |  | 17 |  |  | $ | 8,089 |  |  | 1 |  |  | $ | 991 |  |  | 6 |  |  | $ | 4,436 |  |  | 1 |  |  | $ | 432 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-construction |  | 18 |  |  | 19,281 |  |  | 15 |  |  | 14,657 |  |  | 3 |  |  | 921 |  |  | 8 |  |  | 5,853 |  |  | — |  |  | — |
Residential real estate and other |  | 85 |  |  | 14,229 |  |  | 70 |  |  | 13,721 |  |  | 38 |  |  | 5,809 |  |  | 1 |  |  | 190 |  |  | — |  |  | — |
Total loans |  | 124 |  |  | $ | 45,872 |  |  | 102 |  |  | $ | 36,467 |  |  | 42 |  |  | $ | 7,721 |  |  | 15 |  |  | $ | 10,479 |  |  | 1 |  |  | $ | 432 |
(1)TDRs may have more than one modification representing a concession. As such, TDRs during the period may be represented in more than one of the categories noted above. (2)Balances represent the recorded investment in the loan at the time of the restructuring. During the year ended December 31, 2022, $13.4 million, or 40 loans, were determined to be TDRs, compared to $13.9 million, or 64 loans, and $45.9 million, or 124 loans, in the years ended 2021 and 2020, respectively. Of these loans extended at below market terms, the weighted average extension had a term of approximately 69 months in 2022 compared to 83 months in 2021 and 14 months in 2020. Further, the weighted average decrease in the stated interest rate for loans with a reduction of interest rate during the period was approximately 88 basis points, compared to 137 basis points and 129 basis points during the years ended December 31, 2022, 2021, and 2020, respectively. Interest-only payment terms were approximately eight months during the year ended 2022 compared to three months and 12 months for the years ended 2021 and 2020, respectively. Additionally, no principal balances were forgiven on the loans noted above in 2022 and 2021 compared to $453,000 principal balance forgiven during 2020. The tables below present a summary of all loans restructured in TDRs during the years ended December 31, 2022, 2021, and 2020, and such loans which were in payment default under the restructured terms during the respective periods:
|  | Year Ended December 31, 2022 |  | Year Ended December 31, 2021 |  | Year Ended December 31, 2020
|  | Total (1)(3) |  | Payments in Default (2)(3) |  | Total (1)(3) |  | Payments in Default (2)(3) |  | Total (1)(3) |  | Payments in Default (2)(3)
(In thousands) |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance |  | Count |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, industrial and other |  | 5 |  |  | $ | 468 |  |  | 2 |  |  | $ | 185 |  |  | 16 |  |  | $ | 5,074 |  |  | 1 |  |  | $ | 199 |  |  | 21 |  |  | $ | 12,362 |  |  | 7 |  |  | $ | 4,041 |
Commercial real-estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-construction |  | 3 |  |  | 8,833 |  |  | — |  |  | — |  |  | 5 |  |  | 2,944 |  |  | 3 |  |  | 2,276 |  |  | 18 |  |  | 19,281 |  |  | 12 |  |  | 14,343 |
Residential real estate and other |  | 32 |  |  | 4,076 |  |  | 3 |  |  | 524 |  |  | 43 |  |  | 5,851 |  |  | 2 |  |  | 116 |  |  | 85 |  |  | 14,229 |  |  | 8 |  |  | 834 |
Total loans |  | 40 |  |  | $ | 13,377 |  |  | 5 |  |  | $ | 709 |  |  | 64 |  |  | $ | 13,869 |  |  | 6 |  |  | $ | 2,591 |  |  | 124 |  |  | $ | 45,872 |  |  | 27 |  |  | $ | 19,218 |
(1)Total TDRs represent all loans restructured in TDRs during the year indicated. (2)TDRs considered to be in payment default are over 30 days past-due subsequent to the restructuring. (3)Balances represent the recorded investment in the loan at the time of the restructuring.

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- Definition The entire disclosure for allowance for credit losses. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -URI https://asc.fasb.org/topic&trid=2196771 + Details
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- References No definition available. + Details
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