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ALLOWANCE FOR LOAN AND LEASE LOSSES | 6 Months Ended
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Jun. 30, 2019
Loans And Leases Receivable Disclosure [Abstract] |
ALLOWANCE FOR LOAN AND LEASE LOSSES | NOTE 8 – ALLOWANCE FOR LOAN AND LEASE LOSSES
The changes in the allowance for loan and lease losses were as follows:
| Residential Mortgage Loans |  | Commercial Mortgage Loans |  | Commercial & Industrial Loans |  | Construction Loans |  | Consumer Loans |  | Total
Quarter ended June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 51,886 |  | $ | 53,430 |  | $ | 22,321 |  | $ | 3,331 |  | $ | 52,764 |  | $ | 183,732
Charge-offs |  | (4,768) |  |  | (11,688) |  |  | (358) |  |  | (72) |  |  | (11,027) |  |  | (27,913)
Recoveries |  | 580 |  |  | 90 |  |  | 275 |  |  | 309 |  |  | 2,404 |  |  | 3,658
Provision (release) |  | 586 |  |  | 4,541 |  |  | (594) |  |  | (542) |  |  | 8,543 |  |  | 12,534
Ending balance | $ | 48,284 |  | $ | 46,373 |  | $ | 21,644 |  | $ | 3,026 |  | $ | 52,684 |  | $ | 172,011
Ending balance: specific reserve for impaired loans | $ | 18,788 |  | $ | 9,023 |  | $ | 3,880 |  | $ | 574 |  | $ | 4,570 |  | $ | 36,835
Ending balance: PCI loans (1) | $ | 11,063 |  | $ | 371 |  | $ | - |  | $ | - |  | $ | - |  | $ | 11,434
Ending balance: general allowance | $ | 18,433 |  | $ | 36,979 |  | $ | 17,764 |  | $ | 2,452 |  | $ | 48,114 |  | $ | 123,742
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance | $ | 3,070,746 |  | $ | 1,550,364 |  | $ | 2,279,685 |  | $ | 100,244 |  | $ | 2,112,916 |  | $ | 9,113,955
Ending balance: impaired loans | $ | 391,016 |  | $ | 207,509 |  | $ | 80,137 |  | $ | 6,029 |  | $ | 27,137 |  | $ | 711,828
Ending balance: PCI loans | $ | 138,367 |  | $ | 3,339 |  | $ | - |  | $ | - |  | $ | - |  | $ | 141,706
Ending balance: loans with general allowance | $ | 2,541,363 |  | $ | 1,339,516 |  | $ | 2,199,548 |  | $ | 94,215 |  | $ | 2,085,779 |  | $ | 8,260,421
| Residential Mortgage Loans |  | Commercial Mortgage Loans |  | Commercial & Industrial Loans |  | Construction Loans |  | Consumer Loans |  | Total
Six-Month Period Ended June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 50,794 |  | $ | 55,581 |  | $ | 32,546 |  | $ | 3,592 |  | $ | 53,849 |  | $ | 196,362
Charge-offs |  | (10,941) |  |  | (14,088) |  |  | (6,669) |  |  | (279) |  |  | (24,296) |  |  | (56,273)
Recoveries |  | 1,206 |  |  | 218 |  |  | 1,370 |  |  | 350 |  |  | 4,424 |  |  | 7,568
Provision (release) |  | 7,225 |  |  | 4,662 |  |  | (5,603) |  |  | (637) |  |  | 18,707 |  |  | 24,354
Ending balance | $ | 48,284 |  | $ | 46,373 |  | $ | 21,644 |  | $ | 3,026 |  | $ | 52,684 |  | $ | 172,011
Ending balance: specific reserve for impaired loans | $ | 18,788 |  | $ | 9,023 |  | $ | 3,880 |  | $ | 574 |  | $ | 4,570 |  | $ | 36,835
Ending balance: PCI loans (1) | $ | 11,063 |  | $ | 371 |  | $ | - |  | $ | - |  | $ | - |  | $ | 11,434
Ending balance: general allowance | $ | 18,433 |  | $ | 36,979 |  | $ | 17,764 |  | $ | 2,452 |  | $ | 48,114 |  | $ | 123,742
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance | $ | 3,070,746 |  | $ | 1,550,364 |  | $ | 2,279,685 |  | $ | 100,244 |  | $ | 2,112,916 |  | $ | 9,113,955
Ending balance: impaired loans | $ | 391,016 |  | $ | 207,509 |  | $ | 80,137 |  | $ | 6,029 |  | $ | 27,137 |  | $ | 711,828
Ending balance: PCI loans | $ | 138,367 |  | $ | 3,339 |  | $ | - |  | $ | - |  | $ | - |  | $ | 141,706
Ending balance: loans with general allowance | $ | 2,541,363 |  | $ | 1,339,516 |  | $ | 2,199,548 |  | $ | 94,215 |  | $ | 2,085,779 |  | $ | 8,260,421
| Residential Mortgage Loans |  | Commercial Mortgage Loans |  | Commercial & Industrial Loans |  | Construction Loans |  | Consumer Loans |  | Total
Quarter ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 56,386 |  | $ | 50,393 |  | $ | 47,659 |  | $ | 4,122 |  | $ | 67,296 |  | $ | 225,856
Charge-offs |  | (5,544) |  |  | (3,897) |  |  | (5,110) |  |  | (818) |  |  | (12,327) |  |  | (27,696)
Recoveries |  | 689 |  |  | 38 |  |  | 1,376 |  |  | 138 |  |  | 2,098 |  |  | 4,339
Provision |  | 3,599 |  |  | 2,184 |  |  | 75 |  |  | 507 |  |  | 13,171 |  |  | 19,536
Ending balance | $ | 55,130 |  | $ | 48,718 |  | $ | 44,000 |  | $ | 3,949 |  | $ | 70,238 |  | $ | 222,035
Ending balance: specific reserve for impaired loans | $ | 19,804 |  | $ | 12,204 |  | $ | 10,592 |  | $ | 1,061 |  | $ | 5,853 |  | $ | 49,514
Ending balance: PCI loans (1) | $ | 10,954 |  | $ | 400 |  | $ | - |  | $ | - |  | $ | - |  | $ | 11,354
Ending balance: general allowance | $ | 24,372 |  | $ | 36,114 |  | $ | 33,408 |  | $ | 2,888 |  | $ | 64,385 |  | $ | 161,167
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance | $ | 3,238,001 |  | $ | 1,533,308 |  | $ | 2,009,049 |  | $ | 84,683 |  | $ | 1,775,250 |  | $ | 8,640,291
Ending balance: impaired loans | $ | 409,085 |  | $ | 175,575 |  | $ | 111,371 |  | $ | 11,261 |  | $ | 32,842 |  | $ | 740,134
Ending balance: PCI loans | $ | 148,025 |  | $ | 4,217 |  | $ | - |  | $ | - |  | $ | - |  | $ | 152,242
Ending balance: loans with general allowance | $ | 2,680,891 |  | $ | 1,353,516 |  | $ | 1,897,678 |  | $ | 73,422 |  | $ | 1,742,408 |  | $ | 7,747,915
| Residential Mortgage Loans |  | Commercial Mortgage Loans |  | Commercial & Industrial Loans |  | Construction Loans |  | Consumer Loans |  | Total
Six-Month Period Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | $ | 58,975 |  | $ | 48,493 |  | $ | 48,871 |  | $ | 4,522 |  | $ | 70,982 |  | $ | 231,843
Charge-offs (2) |  | (8,915) |  |  | (10,707) |  |  | (7,040) |  |  | (5,995) |  |  | (24,399) |  |  | (57,056)
Recoveries |  | 1,024 |  |  | 87 |  |  | 1,438 |  |  | 151 |  |  | 4,468 |  |  | 7,168
Provision (2) |  | 4,046 |  |  | 10,845 |  |  | 731 |  |  | 5,271 |  |  | 19,187 |  |  | 40,080
Ending balance | $ | 55,130 |  | $ | 48,718 |  | $ | 44,000 |  | $ | 3,949 |  | $ | 70,238 |  | $ | 222,035
Ending balance: specific reserve for impaired loans | $ | 19,804 |  | $ | 12,204 |  | $ | 10,592 |  | $ | 1,061 |  | $ | 5,853 |  | $ | 49,514
Ending balance: PCI loans (1) | $ | 10,954 |  | $ | 400 |  | $ | - |  | $ | - |  | $ | - |  | $ | 11,354
Ending balance: general allowance | $ | 24,372 |  | $ | 36,114 |  | $ | 33,408 |  | $ | 2,888 |  | $ | 64,385 |  | $ | 161,167
Loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance | $ | 3,238,001 |  | $ | 1,533,308 |  | $ | 2,009,049 |  | $ | 84,683 |  | $ | 1,775,250 |  | $ | 8,640,291
Ending balance: impaired loans | $ | 409,085 |  | $ | 175,575 |  | $ | 111,371 |  | $ | 11,261 |  | $ | 32,842 |  | $ | 740,134
Ending balance: PCI loans | $ | 148,025 |  | $ | 4,217 |  | $ | - |  | $ | - |  | $ | - |  | $ | 152,242
Ending balance: loans with general allowance | $ | 2,680,891 |  | $ | 1,353,516 |  | $ | 1,897,678 |  | $ | 73,422 |  | $ | 1,742,408 |  | $ | 7,747,915
Refer to Note 7 - Loans Held for Investment - PCI Loans for a detail of changes in the allowance for loan losses related to PCI loans.During the first quarter of 2018, the Corporation transferred to held for sale $57.2 million (net of fair value write-downs of $9.7 million) in nonaccrual loans to held for sale. Approximately $4.1 million of the $9.7 million in charge-offs recorded on the transfer was taken against previously-established reserves for loan losses, resulting in a charge to the provision of $5.6 million for the first quarter of 2018. Loans transferred to held for sale consisted of a $30.0 million nonaccrual construction loan (net of a $5.1 million fair value write-down) and two nonaccrual commercial mortgage loans totaling $27.2 million (net of fair value write-downs of $4.6 million).
The tables below present the allowance for loan and lease losses and the carrying value of loans by portfolio segment as of June 30, 2019 and December 31, 2018: |
As of June 30, 2019 | Residential Mortgage Loans |  | Commercial Mortgage Loans |  | Commercial and Industrial Loans |  |  |  | Consumer Loans |  |  |  |
|  |  |  | Construction Loans |  |  |  |  |
(Dollars in thousands) |  |  |  |  |  |  | Total |
Impaired loans without specific reserves: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans, net of charge-offs | $ | 106,195 |  | $ | 79,600 |  | $ | 28,854 |  | $ | 3,245 |  | $ | 1,213 |  |  | $ | 219,107 |
Impaired loans with specific reserves: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans, net of charge-offs |  | 284,821 |  |  | 127,909 |  |  | 51,283 |  |  | 2,784 |  |  | 25,924 |  |  |  | 492,721 |
Allowance for loan and lease losses |  | 18,788 |  |  | 9,023 |  |  | 3,880 |  |  | 574 |  |  | 4,570 |  |  |  | 36,835 |
Allowance for loan and lease losses to principal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
balance |  | 6.60 | % |  | 7.05 | % |  | 7.57 | % |  | 20.62 | % |  | 17.63 | % |  |  | 7.48 | %
PCI loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Carrying value of PCI loans | $ | 138,367 |  | $ | 3,339 |  | $ | - |  | $ | - |  | $ | - |  |  | $ | 141,706 |
Allowance for PCI loans |  | 11,063 |  |  | 371 |  |  | - |  |  | - |  |  | - |  |  |  | 11,434 |
Allowance for PCI loans to carrying value |  | 8.00 | % |  | 11.11 | % |  |  |  |  |  |  |  |  |  |  |  | 8.07 | %
Loans with general allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans | $ | 2,541,363 |  | $ | 1,339,516 |  | $ | 2,199,548 |  | $ | 94,215 |  | $ | 2,085,779 |  |  | $ | 8,260,421 |
Allowance for loan and lease losses |  | 18,433 |  |  | 36,979 |  |  | 17,764 |  |  | 2,452 |  |  | 48,114 |  |  |  | 123,742 |
Allowance for loan and lease losses to principal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
balance |  | 0.73 | % |  | 2.76 | % |  | 0.81 | % |  | 2.60 | % |  | 2.31 |  | % |  | 1.50 | %
Total loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans | $ | 3,070,746 |  | $ | 1,550,364 |  | $ | 2,279,685 |  | $ | 100,244 |  | $ | 2,112,916 |  |  | $ | 9,113,955 |
Allowance for loan and lease losses |  | 48,284 |  |  | 46,373 |  |  | 21,644 |  |  | 3,026 |  |  | 52,684 |  |  |  | 172,011 |
Allowance for loan and lease losses to principal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
balance (1) |  | 1.57 | % |  | 2.99 | % |  | 0.95 | % |  | 3.02 | % |  | 2.49 |  | % |  | 1.89 | %
As of December 31, 2018 | Residential Mortgage Loans |  | Commercial Mortgage Loans |  | Commercial and Industrial Loans |  |  |  | Consumer Loans |  |  |
|  |  |  | Construction Loans |  |  |  |
(Dollars in thousands) |  |  |  |  |  | Total |
Impaired loans without specific reserves: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans, net of charge-offs | $ | 110,238 |  | $ | 43,358 |  | $ | 30,030 |  | $ | 2,431 |  | $ | 2,340 |  | $ | 188,397 |
Impaired loans with specific reserves: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans, net of charge-offs |  | 293,494 |  |  | 184,068 |  |  | 61,162 |  |  | 4,162 |  |  | 28,986 |  |  | 571,872 |
Allowance for loan and lease losses |  | 19,965 |  |  | 17,684 |  |  | 9,693 |  |  | 760 |  |  | 5,874 |  |  | 53,976 |
Allowance for loan and lease losses to principal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
balance |  | 6.80 | % |  | 9.61 | % |  | 15.85 | % |  | 18.26 | % |  | 20.26 | % |  | 9.44 | %
PCI loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Carrying value of PCI loans | $ | 143,176 |  | $ | 3,464 |  | $ | - |  | $ | - |  | $ | - |  | $ | 146,640 |
Allowance for PCI loans |  | 10,954 |  |  | 400 |  |  | - |  |  | - |  |  | - |  |  | 11,354 |
Allowance for PCI loans to carrying value |  | 7.65 | % |  | 11.55 | % |  |  |  |  |  |  |  |  |  |  | 7.74 | %
Loans with general allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans | $ | 2,616,300 |  | $ | 1,291,772 |  | $ | 2,056,919 |  | $ | 72,836 |  | $ | 1,913,387 |  | $ | 7,951,214 |
Allowance for loan and lease losses |  | 19,875 |  |  | 37,497 |  |  | 22,853 |  |  | 2,832 |  |  | 47,975 |  |  | 131,032 |
Allowance for loan and lease losses to principal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
balance |  | 0.76 | % |  | 2.90 | % |  | 1.11 | % |  | 3.89 | % |  | 2.51 | % |  | 1.65 | %
Total loans held for investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal balance of loans | $ | 3,163,208 |  | $ | 1,522,662 |  | $ | 2,148,111 |  | $ | 79,429 |  | $ | 1,944,713 |  | $ | 8,858,123 |
Allowance for loan and lease losses |  | 50,794 |  |  | 55,581 |  |  | 32,546 |  |  | 3,592 |  |  | 53,849 |  |  | 196,362 |
Allowance for loan and lease losses to principal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
balance (1) |  | 1.61 | % |  | 3.65 | % |  | 1.52 | % |  | 4.52 | % |  | 2.77 | % |  | 2.22 | %
Loans used in the denominator include PCI loans of $141.7 million and $146.6 million as of June 30, 2019 and December 31, 2018, respectively. However, the Corporation separately tracks and reports PCI loans and excludes these loans from the amounts of nonaccrual loans, impaired loans, TDRs and non-performing assets. During 2019, the Corporation reduced to zero the reserve for unfunded loan commitments (compared to a reserve of $0.4 million as of December 31, 2018). The reserve for unfunded loan commitments is an estimate of the losses inherent in off-balance sheet loan commitments to borrowers that are experiencing financial difficulties at the balance sheet date. It is calculated by multiplying an estimated loss factor by an estimated probability of funding, and then by the period-end amounts for unfunded commitments. The reserve for unfunded loan commitments is included as part of Accounts payable and other liabilities in the consolidated statements of financial condition and any changes to the reserve is included as part of other non-interest expenses in the consolidated statements of income.

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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 http://asc.fasb.org/topic&trid=2196771 + Details
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