XML 25 R15.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Allowance for Credit Losses on Loans and Leases
 3 Months Ended
Mar. 31, 2024
Credit Loss [Abstract]  
Allowance for Credit Losses on Loans and Leases 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 for the periods indicated:

For the Three Months Ended March 31,
20242023
(in millions)MortgageOtherTotalMortgageOtherTotal
Balance, beginning of period$756 $236 $992 $290 $103 $393 
Adjustment for Purchased PCD Loans——1313
Charge-offs(75)(16)(91)(2)(3)(5)
Recoveries1910—55
Provision for (recovery of) credit losses on loans and leases311(7)304(5)149144
Balance, end of period$993 $222 $1,215 $283 $267 $550 

At March 31, 2024, the allowance for credit losses on loans and leases was $1.2 billion compared to $992 million at December 31, 2023, up $223 million reflecting changes in market conditions over the quarter. In the first quarter we completed an in-depth review of our largest multi-family and commercial real estate loans, which in combination with our modeling, suggested credit losses as of March 31 had increased. In the first quarter, we now expect market interest rates to be higher for a longer period of time which is expected to put additional pressure on the ability for some borrowers whose rates reset to current levels to cover debt service because, when combined with inflationary pressure on operating costs and limits on the ability to increase rental rates, debt service levels may approach or exceed some properties' net operating income, which increases the risk of loss. We also have continuing pressure in the office portfolio due to remote working and other factors leading to a decline in occupancy levels that reduces operating income and has led to declining property values.

As of March 31, 2024 and December 31, 2023, the allowance for unfunded commitments totaled $73 million and $52 million, respectively.

The allowance for credit losses on loans and leases to total loans held for investment ratio increased to 1.48 percent at March 31, 2024, compared to 1.17 percent at December 31, 2023. Excluding loans with government guarantees and warehouse loans, the allowance for credit losses was 1.59 percent at March 31, 2024, compared to 1.26 percent at December 31, 2023.
The following table presents additional information about the Company’s nonaccrual loans at March 31, 2024:
(in millions)Recorded InvestmentRelated AllowanceInterest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family$334 $— $— 
Commercial real estate188—3
One-to-four family first mortgage89——
Acquisition, development, and construction———
Other (includes C&I)45——
Total nonaccrual loans with no related allowance$656 $— $3 
Nonaccrual loans with an allowance recorded:
Multi-family$5 $1 $— 
Commercial real estate7617—
One-to-four family first mortgage9——
Acquisition, development, and construction32—
Other (includes C&I)4928—
Total nonaccrual loans with an allowance recorded$142 $48 $— 
Total nonaccrual loans:
Multi-family$339 $1 $— 
Commercial real estate264173
One-to-four family first mortgage98——
Acquisition, development, and construction32—
Other (includes C&I)9428—
Total nonaccrual loans$798 $48 $3 

The following table presents additional information about the Company’s nonaccrual loans at December 31, 2023:

(in millions)Recorded InvestmentRelated AllowanceInterest Income Recognized
Nonaccrual loans with no related allowance:
Multi-family$134 $— $5 
Commercial real estate53—2
One-to-four family first mortgage85——
Other (includes C&I)22——
Total nonaccrual loans with no related allowance$294 $— $7 
Nonaccrual loans with an allowance recorded:
Multi-family4——
Commercial real estate$75 $17 $3 
One-to-four family first mortgage112—
Other (includes C&I)4428—
Total nonaccrual loans with an allowance recorded$134 $47 $3 
Total nonaccrual loans:
Multi-family$138 $— $5 
Commercial real estate128175
One-to-four family first mortgage962—
Other (includes C&I)6628—
Total nonaccrual loans$428 $47 $10