Allowance for Credit Losses on Loans and Leases

3 Months Ended

Mar. 31, 2021

Allowance For Credit Losses On Loans And Leases [Abstract]

Allowance for Credit Losses on Loans and Leases

Note 6. Allowance for Credit Losses on Loans and Leases

Allowance for Credit Losses on Loans and Leases

The following table summarizes activity in the allowance for credit losses on loans and leases for the periods indicated:


	For the Three Months Ended March 31,
	2021									2020
(in thousands)	Mortgage			Other			Total			Mortgage			Other			Total
Balance, beginning of period	$	176,538		$	17,505		$	194,043		$	122,695		$	24,943		$	147,638
Impact of CECL adoption		—			-			—			(178	)		2,089			1,911
Adjusted balance, beginning of period		176,538			17,505			194,043			122,517			27,032			149,549
Charge-offs		(658	)		(3,666	)		(4,324	)		—			(10,385	)		(10,385	)
Recoveries		20			4,821			4,841			11			178			189
Provision for credit losses		527			2,671			3,198			18,786			4,105			22,891
Balance, end of period	$	176,427		$	21,331		$	197,758		$	141,314		$	20,930		$	162,244

At March 31, 2021, the allowance for credit losses on loans and leases totaled $197.8 million, up $3.7 million compared to December 31, 2020, driven by a provision for credit losses of $3.6 million.

Separately, at March 31, 2021, the Company had an allowance for unfunded commitments of $12.3 million.

For the three months ended March 31, 2021, the allowance for credit losses on loans and leases increased modestly primarily due to qualitative adjustments surrounding the COVID-19 pandemic's continued impact on our primary lending geography and existing portfolio, partially offset by improvement in the macroeconomic forecast. The forecast scenario includes low single digit growth of Gross Domestic Product (“GDP”), while unemployment remains elevated into the forecasted time horizon. In addition to these economic and quantitative inputs, several qualitative factors were considered, including the risk that the economic decline proves to be more severe and/or prolonged than our baseline forecast. The impact of the unprecedented fiscal stimulus and changes to federal and local laws and regulations, including changes to various government sponsored loan programs, was also considered.

The Company charges off loans, or portions of loans, in the period that such loans, or portions thereof, are deemed uncollectible. The collectability of individual loans is determined through an assessment of the financial condition and repayment capacity of the borrower and/or through an estimate of the fair value of any underlying collateral. For non-real estate-related consumer credits, the following past-due time periods determine when charge-offs are typically recorded: (1) closed-end credits are charged off in the quarter that the loan becomes 120 days past due; (2) open-end credits are charged off in the quarter that the loan becomes 180 days past due; and (3) both closed-end and open-end credits are typically charged off in the quarter that the credit is 60 days past the date the Company received notification that the borrower has filed for bankruptcy.

The following table presents additional information about the Company’s nonaccrual loans at March 31, 2021:


(in thousands)	Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	6,840	$	—	$	81
Commercial real estate		10,491		-		-
One-to-four family		330		-		3
Acquisition, development, and construction		-		-		-
Other		10,205		-		18
Total nonaccrual loans with no related allowance	$	27,866	$	—	$	102
Nonaccrual loans with an allowance recorded:
Multi-family	$	3,048	$	435	$	—
Commercial real estate		1,082		84		2
One-to-four family		1,137		365		3
Acquisition, development, and construction		-		-		-
Other		45		20		1
Total nonaccrual loans with an allowance recorded	$	5,312	$	904	$	6
Total nonaccrual loans:
Multi-family	$	9,888	$	435	$	81
Commercial real estate		11,573		84		2
One-to-four family		1,467		365		6
Acquisition, development, and construction		-		-		-
Other		10,250		20		19
Total nonaccrual loans	$	33,178	$	904	$	108

The following table presents additional information about the Company’s nonaccrual loans at December 31, 2020:


(in thousands)	Recorded Investment		Related Allowance		Interest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family	$	—	$	—	$	—
Commercial real estate		2,256		—		—
One-to-four family		557		—		21
Acquisition, development, and construction		—		—		—
Other		19,821		—		820
Total nonaccrual loans with no related allowance	$	22,634	$	—	$	841
Nonaccrual loans with an allowance recorded:
Multi-family	$	4,068	$	589	$	28
Commercial real estate		9,886		133		52
One-to-four family		1,139		370		14
Acquisition, development, and construction		—		—		—
Other		58		18		5
Total nonaccrual loans with an allowance recorded	$	15,151	$	1,110	$	99
Total nonaccrual loans:
Multi-family	$	4,068	$	589	$	28
Commercial real estate		12,142		133		52
One-to-four family		1,696		370		35
Acquisition, development, and construction		—		—		—
Other		19,879		18		825
Total nonaccrual loans	$	37,785	$	1,110	$	940