XML 27 R16.htm IDEA: XBRL DOCUMENT v3.19.2
ALLOWANCE FOR LOAN AND LEASE LOSSES
 6 Months Ended
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.