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Commitments and contingencies | 9 Months Ended
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Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract] |
Commitments and contingencies | Commitments and contingencies: Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.
|  | September 30, |  | December 31,
|  | 2020 |  |  | 2019 |
Commitments to extend credit, excluding interest rate lock commitments |  | $ | 1,819,070 |  |  | $ | 1,086,173 |
Letters of credit |  | 18,239 |  |  | 19,569 |
Balance at end of period |  | $ | 1,837,309 |  |  | $ | 1,105,742 |
In connection with the adoption of CECL on January 1, 2020, the Company estimates expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives. When applying the CECL methodology to estimate expected credit loss, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions. As such, upon adoption the Company recorded an initial allowance for credit losses on unfunded commitments in other liabilities amounting to $2,947. The impact net of taxes was recorded as part of the cumulative adjustment to retained earnings of $25,018 on January 1, 2020. The table below presents activity within the allowance for credit losses on unfunded commitments:
|  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
|  | 2020 |  |  | 2020 |
Balance at beginning of period |  | $ | 6,500 |  |  | $ | — |
Impact of CECL adoption on provision for credit losses on unfunded commitments |  | — |  |  | 2,947 |
Increase in allowance for credit losses from unfunded commitments acquired in business combination |  | 10,429 |  |  | 10,499 |
Provision for credit losses on unfunded commitments |  | (862) |  |  | 2,621 |
Balance at end of period |  | $ | 16,067 |  |  | $ | 16,067 |
In connection with the sale of mortgage loans to third party investors, the Bank makes usual and customary representations and warranties as to the propriety of its origination activities. Occasionally, the investors require the Bank to repurchase loans sold to them under the terms of the warranties. When this happens, the loans are recorded at fair value with a corresponding charge to a valuation reserve. The total principal amount of loans repurchased (or indemnified for) was $1,329 and $5,696 for the three and nine months ended September 30, 2020, respectively, and $1,165 and $4,675, for the three and nine months ended September 30, 2019, respectively. The Company has established a reserve associated with loan repurchases. This reserve is recorded in accrued expenses and other liabilities on the consolidated balance sheets. The following table summarizes the activity in the repurchase reserve:
|  | Three Months Ended September 30, |  | For the Nine Months Ended September 30,
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |  |
Balance at beginning of period |  | $ | 4,601 |  |  | $ | 3,407 |  |  | $ | 3,529 |  |  | $ | 3,273 |  |  |
Provision for loan repurchases or indemnifications |  | 901 |  |  | 107 |  |  | 2,128 |  |  | 255 |  |  |
Recoveries on previous losses |  | (44) |  |  | (79) |  |  | (199) |  |  | (93) |  |  |
Balance at end of period |  | $ | 5,458 |  |  | $ | 3,435 |  |  | $ | 5,458 |  |  | $ | 3,435 |  |  |

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- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 4 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=121559207&loc=d3e25336-109308 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 4 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121559207&loc=d3e25336-109308 + Details
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