XML 23 R14.htm IDEA: XBRL DOCUMENT v3.23.3
Loans and Leases and the Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2023
Loans And Leases And Allowance For Loan And Lease Losses [Abstract]  
Loans and Leases and the Allowance for Credit Losses

Note 4. Loans and Leases and the Allowance for Credit Losses

Loans and Leases

The Company’s loan and lease portfolio was comprised of the following as of September 30, 2023, and December 31, 2022:

 

(dollars in thousands)

 

September 30,
2023

 

 

December 31,
2022

 

Commercial

 

 

 

 

 

 

Commercial and Industrial

 

$

1,569,572

 

 

$

1,389,066

 

Paycheck Protection Program

 

 

12,529

 

 

 

19,579

 

Commercial Mortgage

 

 

3,784,339

 

 

 

3,725,542

 

Construction

 

 

251,507

 

 

 

260,825

 

Lease Financing

 

 

61,522

 

 

 

69,491

 

Total Commercial

 

 

5,679,469

 

 

 

5,464,503

 

Consumer

 

 

 

 

 

 

Residential Mortgage

 

 

4,699,140

 

 

 

4,653,072

 

Home Equity

 

 

2,285,974

 

 

 

2,225,950

 

Automobile

 

 

856,113

 

 

 

870,396

 

Other 2

 

 

398,795

 

 

 

432,499

 

Total Consumer

 

 

8,240,022

 

 

 

8,181,917

 

Total Loans and Leases

 

$

13,919,491

 

 

$

13,646,420

 

 

1.
Comprised of other revolving credit, installment, and lease financing.

Most of the Company’s lending activity is with customers located in the State of Hawaii. A substantial portion of the Company’s real estate loans are secured by real estate located in the State of Hawaii.

Net gain related to sales of residential mortgage loans, recorded as a component of mortgage banking income were less than $0.1 million for the three months ended September 30, 2023, and September 30, 2022, and $0.3 million and $0.2 million for the nine months ended September 30, 2023, and September 30, 2022, respectively.

The Company elected to exclude AIR from the amortized cost basis of loans disclosed throughout this footnote. As of September 30, 2023, and December 31, 2022, AIR for loans totaled $45.0 million and $40.1 million, respectively, and is included in the “accrued interest receivable” line item on the Company’s consolidated statements of condition.

Allowance for Credit Losses (the “Allowance”)

The following presents by portfolio segment, the activity in the Allowance for the three and nine months ended September 30, 2023, and September 30, 2022.

 

(dollars in thousands)

 

Commercial

 

 

Consumer

 

 

Total

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

63,941

 

 

$

81,426

 

 

$

145,367

 

Loans and Leases Charged-Off

 

 

(294

)

 

 

(3,323

)

 

 

(3,617

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

72

 

 

 

1,496

 

 

 

1,568

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(222

)

 

 

(1,827

)

 

 

(2,049

)

Provision for Credit Losses

 

 

4,283

 

 

 

(2,338

)

 

 

1,945

 

Balance at End of Period

 

$

68,002

 

 

$

77,261

 

 

$

145,263

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

63,900

 

 

$

80,539

 

 

$

144,439

 

Loans and Leases Charged-Off

 

 

(758

)

 

 

(10,679

)

 

 

(11,437

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

225

 

 

 

5,118

 

 

 

5,343

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(533

)

 

 

(5,561

)

 

 

(6,094

)

Provision for Credit Losses

 

 

4,635

 

 

 

2,283

 

 

 

6,918

 

Balance at End of Period

 

$

68,002

 

 

$

77,261

 

 

$

145,263

 

Three Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

61,826

 

 

$

86,686

 

 

$

148,512

 

Loans and Leases Charged-Off

 

 

(147

)

 

 

(2,718

)

 

 

(2,865

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

45

 

 

 

1,673

 

 

 

1,718

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(102

)

 

 

(1,045

)

 

 

(1,147

)

Provision for Credit Losses

 

 

157

 

 

 

(1,086

)

 

 

(929

)

Balance at End of Period

 

$

61,881

 

 

$

84,555

 

 

$

146,436

 

Nine Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

64,950

 

 

$

92,871

 

 

$

157,821

 

Loans and Leases Charged-Off

 

 

(729

)

 

 

(9,390

)

 

 

(10,119

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

465

 

 

 

6,390

 

 

 

6,855

 

Net Loans and Leases Recovered (Charged-Off)

 

 

(264

)

 

 

(3,000

)

 

 

(3,264

)

Provision for Credit Losses

 

 

(2,805

)

 

 

(5,316

)

 

 

(8,121

)

Balance at End of Period

 

$

61,881

 

 

$

84,555

 

 

$

146,436

 

 

The wildfires that occurred on Maui in August 2023 caused widespread destruction on the island of Maui. The Company’s Allowance as of September 30, 2023, considered the impact the wildfires had on the local community, while also giving the necessary consideration to the insurance coverage and value of any underlying collateral, in addition to the improved economic outlook for the rest of the State of Hawaii.

 

 

Credit Quality Indicators

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company uses an internal credit risk rating system that categorizes loans and leases into pass, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans and leases that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans and leases to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans and leases that are underwritten and structured using standardized criteria and characteristics are typically monitored and risk-rated collectively. These are typically loans and leases to individuals in the classes which comprise the consumer portfolio segment.

The following are the definitions of the Company’s credit quality indicators:

Pass:

Loans and leases in all classes within the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan or lease agreement. Residential mortgage loans that are past due 90 days or more as to principal or interest may be considered Pass if the current loan-to-value ratio is 60% or less. Home equity loans that are past due 90 days or more as to principal or interest may be considered Pass if: a) the home equity loan is in a first lien position and the current loan-to-value ratio is 60% or less; or b) the first mortgage is with the Company and the current combined loan-to-value ratio is 60% or less.

Special Mention:

Loans and leases in all classes within the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease. The Special Mention credit quality indicator is not used for the consumer portfolio segment.

Classified:

Loans and leases in the classes within the commercial portfolio segment that are inadequately protected by the sound worth and paying capacity of the borrower or of the collateral pledged, if any. Classified loans and leases are also those in the classes within the consumer portfolio segment that are past due 90 days or more as to principal or interest. Residential mortgage and home equity loans may be current as to principal and interest, but may be considered Classified for a period of generally up to six months following a loan modification. Following a period of demonstrated performance in accordance with the modified contractual terms, the loan may be removed from Classified status.

 

For Pass rated credits, risk ratings are certified at a minimum annually. For Special Mention or Classified credits, risk ratings are reviewed for appropriateness on an ongoing basis, monthly, or at a minimum, quarterly. The following presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of September 30, 2023.

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

2023 2

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Revolving
Loans

 

 

Revolving
Loans
Converted
to Term
Loans

 

 

Total Loans
and Leases

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

277,427

 

 

$

271,993

 

 

$

242,363

 

 

$

152,581

 

 

$

42,673

 

 

$

82,144

 

 

$

369,945

 

 

$

483

 

 

$

1,439,609

 

Special Mention

 

 

42,774

 

 

 

5,157

 

 

 

-

 

 

 

-

 

 

 

695

 

 

 

-

 

 

 

39,956

 

 

 

-

 

 

 

88,582

 

Classified

 

 

11,911

 

 

 

2,784

 

 

 

7,960

 

 

 

6,638

 

 

 

-

 

 

 

8,245

 

 

 

3,828

 

 

 

15

 

 

 

41,381

 

Total Commercial and Industrial

 

$

332,112

 

 

$

279,934

 

 

$

250,323

 

 

$

159,219

 

 

$

43,368

 

 

$

90,389

 

 

$

413,729

 

 

$

498

 

 

$

1,569,572

 

Paycheck Protection Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

2,445

 

 

$

10,084

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

12,529

 

Total Paycheck Protection Program

 

$

-

 

 

$

-

 

 

$

2,445

 

 

$

10,084

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

12,529

 

Commercial Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

756,211

 

 

$

1,004,342

 

 

$

713,794

 

 

$

441,404

 

 

$

247,429

 

 

$

435,257

 

 

$

42,790

 

 

$

-

 

 

$

3,641,227

 

Special Mention

 

 

30,463

 

 

 

61,654

 

 

 

-

 

 

 

3,908

 

 

 

307

 

 

 

13,551

 

 

 

-

 

 

 

-

 

 

 

109,883

 

Classified

 

 

2,996

 

 

 

162

 

 

 

1,342

 

 

 

13,139

 

 

 

233

 

 

 

15,357

 

 

 

-

 

 

 

-

 

 

 

33,229

 

Total Commercial Mortgage

 

$

789,670

 

 

$

1,066,158

 

 

$

715,136

 

 

$

458,451

 

 

$

247,969

 

 

$

464,165

 

 

$

42,790

 

 

$

-

 

 

$

3,784,339

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

20,606

 

 

$

132,155

 

 

$

76,109

 

 

$

2,820

 

 

$

16,101

 

 

$

297

 

 

$

3,419

 

 

$

-

 

 

$

251,507

 

Total Construction

 

$

20,606

 

 

$

132,155

 

 

$

76,109

 

 

$

2,820

 

 

$

16,101

 

 

$

297

 

 

$

3,419

 

 

$

-

 

 

$

251,507

 

Lease Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

7,046

 

 

$

13,905

 

 

$

14,570

 

 

$

9,160

 

 

$

6,787

 

 

$

8,646

 

 

$

-

 

 

$

-

 

 

$

60,114

 

Classified

 

 

627

 

 

 

54

 

 

 

125

 

 

 

102

 

 

 

-

 

 

 

500

 

 

 

-

 

 

 

-

 

 

 

1,408

 

Total Lease Financing

 

$

7,673

 

 

$

13,959

 

 

$

14,695

 

 

$

9,262

 

 

$

6,787

 

 

$

9,146

 

 

$

-

 

 

$

-

 

 

$

61,522

 

Total Commercial

 

$

1,150,061

 

 

$

1,492,206

 

 

$

1,058,708

 

 

$

639,836

 

 

$

314,225

 

 

$

563,997

 

 

$

459,938

 

 

$

498

 

 

$

5,679,469

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

267,172

 

 

$

799,565

 

 

$

1,257,550

 

 

$

988,296

 

 

$

306,197

 

 

$

1,078,785

 

 

$

-

 

 

$

-

 

 

$

4,697,565

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,575

 

 

 

-

 

 

 

-

 

 

 

1,575

 

Total Residential Mortgage

 

$

267,172

 

 

$

799,565

 

 

$

1,257,550

 

 

$

988,296

 

 

$

306,197

 

 

$

1,080,360

 

 

$

-

 

 

$

-

 

 

$

4,699,140

 

Home Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

44

 

 

$

2,242,699

 

 

$

40,870

 

 

$

2,283,613

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,291

 

 

 

1,070

 

 

 

2,361

 

Total Home Equity

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

44

 

 

$

2,243,990

 

 

$

41,940

 

 

$

2,285,974

 

Automobile

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

205,059

 

 

$

326,054

 

 

$

164,714

 

 

$

73,234

 

 

$

55,196

 

 

$

31,464

 

 

$

-

 

 

$

-

 

 

$

855,721

 

Classified

 

 

39

 

 

 

59

 

 

 

149

 

 

 

56

 

 

 

6

 

 

 

83

 

 

 

-

 

 

 

-

 

 

 

392

 

Total Automobile

 

$

205,098

 

 

$

326,113

 

 

$

164,863

 

 

$

73,290

 

 

$

55,202

 

 

$

31,547

 

 

$

-

 

 

$

-

 

 

$

856,113

 

Other1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

74,075

 

 

$

150,228

 

 

$

99,977

 

 

$

16,432

 

 

$

21,154

 

 

$

34,871

 

 

$

1,415

 

 

$

-

 

 

$

398,152

 

Classified

 

 

118

 

 

 

158

 

 

 

161

 

 

 

21

 

 

 

85

 

 

 

100

 

 

 

-

 

 

 

-

 

 

 

643

 

Total Other

 

$

74,193

 

 

$

150,386

 

 

$

100,138

 

 

$

16,453

 

 

$

21,239

 

 

$

34,971

 

 

$

1,415

 

 

$

-

 

 

$

398,795

 

Total Consumer

 

$

546,463

 

 

$

1,276,064

 

 

$

1,522,551

 

 

$

1,078,039

 

 

$

382,638

 

 

$

1,146,922

 

 

$

2,245,405

 

 

$

41,940

 

 

$

8,240,022

 

Total Loans and Leases

 

$

1,696,524

 

 

$

2,768,270

 

 

$

2,581,259

 

 

$

1,717,875

 

 

$

696,863

 

 

$

1,710,919

 

 

$

2,705,343

 

 

$

42,438

 

 

$

13,919,491

 

 

1.
Comprised of other revolving credit, installment, and lease financing.
2.
Loans reported as Special Mention or Classified in the 2023 column represent renewal of loans that originated in an earlier period.

For the nine months ended September 30, 2023, $7.4 million of revolving loans were converted to term loans.

The following presents by credit quality indicator, loan class, and year of origination, the amortized cost basis of the Company’s loans and leases as of December 31, 2022.

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

2022

 

 

2021

 

 

2020

 

 

2019

 

 

2018

 

 

Prior

 

 

Revolving
Loans

 

 

Revolving
Loans
Converted
to Term
Loans

 

 

Total Loans
and Leases

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

360,748

 

 

$

348,300

 

 

$

224,264

 

 

$

59,127

 

 

$

46,799

 

 

$

71,906

 

 

$

257,349

 

 

$

155

 

 

$

1,368,648

 

Special Mention

 

 

273

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

96

 

 

 

92

 

 

 

1,357

 

 

 

-

 

 

 

1,818

 

Classified

 

 

7,295

 

 

 

91

 

 

 

1,030

 

 

 

-

 

 

 

1,644

 

 

 

6,267

 

 

 

2,252

 

 

 

21

 

 

 

18,600

 

Total Commercial and Industrial

 

$

368,316

 

 

$

348,391

 

 

$

225,294

 

 

$

59,127

 

 

$

48,539

 

 

$

78,265

 

 

$

260,958

 

 

$

176

 

 

$

1,389,066

 

Paycheck Protection Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

5,359

 

 

$

14,220

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

19,579

 

Total Paycheck Protection Program

 

$

-

 

 

$

5,359

 

 

$

14,220

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

19,579

 

Commercial Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

1,182,831

 

 

$

771,375

 

 

$

691,054

 

 

$

283,553

 

 

$

131,055

 

 

$

494,924

 

 

$

48,771

 

 

$

-

 

 

$

3,603,563

 

Special Mention

 

 

29,707

 

 

 

37,657

 

 

 

28,105

 

 

 

-

 

 

 

1,482

 

 

 

5,014

 

 

 

-

 

 

 

-

 

 

 

101,965

 

Classified

 

 

182

 

 

 

1,964

 

 

 

8,545

 

 

 

624

 

 

 

-

 

 

 

8,699

 

 

 

-

 

 

 

-

 

 

 

20,014

 

Total Commercial Mortgage

 

$

1,212,720

 

 

$

810,996

 

 

$

727,704

 

 

$

284,177

 

 

$

132,537

 

 

$

508,637

 

 

$

48,771

 

 

$

-

 

 

$

3,725,542

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

124,507

 

 

$

69,992

 

 

$

37,133

 

 

$

16,838

 

 

$

-

 

 

$

297

 

 

$

12,058

 

 

$

-

 

 

$

260,825

 

Total Construction

 

$

124,507

 

 

$

69,992

 

 

$

37,133

 

 

$

16,838

 

 

$

-

 

 

$

297

 

 

$

12,058

 

 

$

-

 

 

$

260,825

 

Lease Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

16,959

 

 

$

17,823

 

 

$

11,408

 

 

$

9,768

 

 

$

6,379

 

 

$

6,444

 

 

$

-

 

 

$

-

 

 

$

68,781

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

710

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

710

 

Total Lease Financing

 

$

16,959

 

 

$

17,823

 

 

$

11,408

 

 

$

9,768

 

 

$

7,089

 

 

$

6,444

 

 

$

-

 

 

$

-

 

 

$

69,491

 

Total Commercial

 

$

1,722,502

 

 

$

1,252,561

 

 

$

1,015,759

 

 

$

369,910

 

 

$

188,165

 

 

$

593,643

 

 

$

321,787

 

 

$

176

 

 

$

5,464,503

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

827,909

 

 

$

1,304,831

 

 

$

1,035,285

 

 

$

321,208

 

 

$

138,214

 

 

$

1,023,841

 

 

$

-

 

 

$

-

 

 

$

4,651,288

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

552

 

 

 

1,232

 

 

 

-

 

 

 

-

 

 

 

1,784

 

Total Residential Mortgage

 

$

827,909

 

 

$

1,304,831

 

 

$

1,035,285

 

 

$

321,208

 

 

$

138,766

 

 

$

1,025,073

 

 

$

-

 

 

$

-

 

 

$

4,653,072

 

Home Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

890

 

 

$

2,186,598

 

 

$

36,114

 

 

$

2,223,602

 

Classified

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

25

 

 

 

1,105

 

 

 

1,218

 

 

 

2,348

 

Total Home Equity

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

915

 

 

$

2,187,703

 

 

$

37,332

 

 

$

2,225,950

 

Automobile

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

405,440

 

 

$

216,039

 

 

$

100,608

 

 

$

84,052

 

 

$

45,301

 

 

$

18,366

 

 

$

-

 

 

$

-

 

 

$

869,806

 

Classified

 

 

121

 

 

 

260

 

 

 

23

 

 

 

43

 

 

 

92

 

 

 

51

 

 

 

-

 

 

 

-

 

 

 

590

 

Total Automobile

 

$

405,561

 

 

$

216,299

 

 

$

100,631

 

 

$

84,095

 

 

$

45,393

 

 

$

18,417

 

 

$

-

 

 

$

-

 

 

$

870,396

 

Other1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

185,347

 

 

$

124,759

 

 

$

31,343

 

 

$

39,902

 

 

$

16,364

 

 

$

9,853

 

 

$

23,228

 

 

$

1,020

 

 

$

431,816

 

Classified

 

 

117

 

 

 

114

 

 

 

70

 

 

 

148

 

 

 

129

 

 

 

24

 

 

 

59

 

 

 

22

 

 

 

683

 

Total Other

 

$

185,464

 

 

$

124,873

 

 

$

31,413

 

 

$

40,050

 

 

$

16,493

 

 

$

9,877

 

 

$

23,287

 

 

$

1,042

 

 

$

432,499

 

Total Consumer

 

$

1,418,934

 

 

$

1,646,003

 

 

$

1,167,329

 

 

$

445,353

 

 

$

200,652

 

 

$

1,054,282

 

 

$

2,210,990

 

 

$

38,374

 

 

$

8,181,917

 

Total Loans and Leases

 

$

3,141,436

 

 

$

2,898,564

 

 

$

2,183,088

 

 

$

815,263

 

 

$

388,817

 

 

$

1,647,925

 

 

$

2,532,777

 

 

$

38,550

 

 

$

13,646,420

 

 

1.
Comprised of other revolving credit, installment, and lease financing.

For the year ended December 31, 2022, $6.2 million of revolving loans were converted to term loans.

 

Aging Analysis

Loans and leases are considered to be past due once becoming 30 days delinquent. For the consumer portfolio, this generally represents two missed monthly payments. The following presents by class, an aging analysis of the Company’s loan and lease portfolio as of September 30, 2023, and December 31, 2022.

 

(dollars in thousands)

 

30 - 59
Days
Past Due

 

 

60 - 89
Days
Past Due

 

 

Past Due
90 Days
or More

 

 

Non-
Accrual

 

 

Total
Past Due
and Non-
Accrual

 

 

Current

 

 

Total
Loans and
Leases

 

 

Non-
Accrual
Loans
and Leases
that are
Current 2

 

As of September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

661

 

 

$

453

 

 

$

—

 

 

$

43

 

 

$

1,157

 

 

$

1,568,415

 

 

$

1,569,572

 

 

$

43

 

Paycheck Protection Program

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,529

 

 

 

12,529

 

 

 

—

 

Commercial Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,996

 

 

 

2,996

 

 

 

3,781,343

 

 

 

3,784,339

 

 

 

2,996

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

251,507

 

 

 

251,507

 

 

 

—

 

Lease Financing

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

61,522

 

 

 

61,522

 

 

 

—

 

Total Commercial

 

 

661

 

 

 

453

 

 

 

—

 

 

 

3,039

 

 

 

4,153

 

 

 

5,675,316

 

 

 

5,679,469

 

 

 

3,039

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

3,176

 

 

 

877

 

 

 

3,519

 

 

 

3,706

 

 

 

11,278

 

 

 

4,687,862

 

 

 

4,699,140

 

 

 

765

 

Home Equity

 

 

3,407

 

 

 

1,750

 

 

 

2,172

 

 

 

3,734

 

 

 

11,063

 

 

 

2,274,911

 

 

 

2,285,974

 

 

 

740

 

Automobile

 

 

10,072

 

 

 

1,089

 

 

 

393

 

 

 

—

 

 

 

11,554

 

 

 

844,559

 

 

 

856,113

 

 

 

—

 

Other 1

 

 

2,311

 

 

 

1,036

 

 

 

643

 

 

 

—

 

 

 

3,990

 

 

 

394,805

 

 

 

398,795

 

 

 

—

 

Total Consumer

 

 

18,966

 

 

 

4,752

 

 

 

6,727

 

 

 

7,440

 

 

 

37,885

 

 

 

8,202,137

 

 

 

8,240,022

 

 

 

1,505

 

Total

 

$

19,627

 

 

$

5,205

 

 

$

6,727

 

 

$

10,479

 

 

$

42,038

 

 

$

13,877,453

 

 

$

13,919,491

 

 

$

4,544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

252

 

 

$

9

 

 

$

—

 

 

$

37

 

 

$

298

 

 

$

1,388,768

 

 

$

1,389,066

 

 

$

37

 

Paycheck Protection Program

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

19,579

 

 

 

19,579

 

 

 

—

 

Commercial Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,309

 

 

 

3,309

 

 

 

3,722,233

 

 

 

3,725,542

 

 

 

3,309

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

260,825

 

 

 

260,825

 

 

 

—

 

Lease Financing

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

69,491

 

 

 

69,491

 

 

 

—

 

Total Commercial

 

 

252

 

 

 

9

 

 

 

—

 

 

 

3,346

 

 

 

3,607

 

 

 

5,460,896

 

 

 

5,464,503

 

 

 

3,346

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

3,016

 

 

 

721

 

 

 

2,429

 

 

 

4,239

 

 

 

10,405

 

 

 

4,642,667

 

 

 

4,653,072

 

 

 

1,729

 

Home Equity

 

 

1,639

 

 

 

960

 

 

 

1,673

 

 

 

4,022

 

 

 

8,294

 

 

 

2,217,656

 

 

 

2,225,950

 

 

 

664

 

Automobile

 

 

13,293

 

 

 

1,988

 

 

 

589

 

 

 

—

 

 

 

15,870

 

 

 

854,526

 

 

 

870,396

 

 

 

—

 

Other 1

 

 

2,318

 

 

 

1,302

 

 

 

683

 

 

 

—

 

 

 

4,303

 

 

 

428,196

 

 

 

432,499

 

 

 

—

 

Total Consumer

 

 

20,266

 

 

 

4,971

 

 

 

5,374

 

 

 

8,261

 

 

 

38,872

 

 

 

8,143,045

 

 

 

8,181,917

 

 

 

2,393

 

Total

 

$

20,518

 

 

$

4,980

 

 

$

5,374

 

 

$

11,607

 

 

$

42,479

 

 

$

13,603,941

 

 

$

13,646,420

 

 

$

5,739

 

 

1.
Comprised of other revolving credit, installment, and lease financing.
2.
Represents non-accrual loans that are not past due 30 days or more; however, full payment of principal and interest is still not expected.

Non-Accrual Loans and Leases

The following presents the non-accrual loans and leases as of September 30, 2023, and December 31, 2022.

 

 

 

September 30, 2023

 

 

December 31, 2022

 

(dollars in thousands)

 

Non-accrual
loans with a
related ACL

 

 

Non-accrual
loans without
a related ACL

 

 

Total Non-
accrual loans

 

 

Non-accrual
loans with a
related ACL

 

 

Non-accrual
loans without
a related ACL

 

 

Total Non-
accrual loans

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

43

 

 

$

—

 

 

$

43

 

 

$

37

 

 

$

—

 

 

$

37

 

Commercial Mortgage

 

 

—

 

 

 

2,996

 

 

 

2,996

 

 

 

—

 

 

 

3,309

 

 

 

3,309

 

Total Commercial

 

 

43

 

 

 

2,996

 

 

 

3,039

 

 

 

37

 

 

 

3,309

 

 

 

3,346

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

3,706

 

 

 

—

 

 

 

3,706

 

 

 

4,239

 

 

 

—

 

 

 

4,239

 

Home Equity

 

 

3,734

 

 

 

—

 

 

 

3,734

 

 

 

4,022

 

 

 

—

 

 

 

4,022

 

Total Consumer

 

 

7,440

 

 

 

—

 

 

 

7,440

 

 

 

8,261

 

 

 

—

 

 

 

8,261

 

Total

 

$

7,483

 

 

$

2,996

 

 

$

10,479

 

 

$

8,298

 

 

$

3,309

 

 

$

11,607

 

 

All payments received while on non-accrual status are applied against the principal balance of the loan or lease. The Company does not recognize interest income while loans or leases are on non-accrual status.

Loan Modifications to Borrowers Experiencing Financial Difficulty

Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following illustrates the most common loan modifications by loan classes offered by the Company that are required to be disclosed pursuant to the requirements of ASU 2022-02:

 

Loan Classes

Modification Types

Commercial:

Term extension, interest rate reductions, payment delay, or combination thereof. These modifications extend the term of the loan, lower the payment amount, or otherwise delay payments during a defined period for the purpose of providing borrowers additional time to return to compliance with the original loan term.

 

Residential Mortgage/
Home Equity:

Forbearance period greater than six months. These modifications require reduced or no payments during the forbearance period for the purpose of providing borrowers additional time to return to compliance with the original loan term.

Residential Mortgage/
Home Equity:

Term extension and rate adjustment. These modifications extend the term of the loan and provides for an adjustment to the interest rate, which reduces the monthly payment requirement.

Automobile/
Direct Installment:

Term extension greater than three months. These modifications extend the term of the loan, which reduces the monthly payment requirement.

 

 

The following table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during three and nine months ended September 30, 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

%

 

 

 

 

 

 

 

Payment

 

Term

 

 

 

 

 

 

 

of

 

 

 

 

 

 

 

Delay

 

Extension and

 

 

 

 

 

 

 

Total

 

 

 

 

 

Interest

 

and

 

Interest

 

 

 

 

 

 

 

Class of

 

 

 

Term

 

Rate

 

Term

 

Rate

 

Payment

 

 

 

 

 

Loans and

 

 

(dollars in thousands)

Extension

 

Reduction

 

Extension

 

Reduction

 

Delay

 

 

Total

 

 

Leases

 

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

19

 

$

—

 

$

—

 

$

—

 

$

—

 

 

$

19

 

 

 

0.00

%

 

Total Commercial

 

19

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

19

 

 

 

0.00

%

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

—

 

 

—

 

 

—

 

 

—

 

 

715

 

 

 

715

 

 

 

0.02

%

 

Automobile

 

3,231

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

3,231

 

 

 

0.38

%

 

Other1

 

373

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

373

 

 

 

0.09

%

 

Total Consumer

 

3,604

 

 

—

 

 

—

 

 

—

 

 

715

 

 

 

4,319

 

 

 

0.05

%

 

Total Loans and Leases

$

3,623

 

$

—

 

$

—

 

$

—

 

$

715

 

 

$

4,338

 

 

 

0.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

109

 

$

—

 

$

6,102

 

$

—

 

$

—

 

 

$

6,211

 

 

 

0.40

%

 

Commercial Mortgage

 

—

 

 

946

 

 

—

 

 

—

 

 

—

 

 

 

946

 

 

 

0.02

%

 

Total Commercial

 

109

 

 

946

 

 

6,102

 

 

—

 

 

—

 

 

 

7,157

 

 

 

0.13

%

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

132

 

 

—

 

 

—

 

 

—

 

 

715

 

 

 

847

 

 

 

0.02

%

 

Home Equity

 

136

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

136

 

 

 

0.01

%

 

Automobile

 

7,428

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

7,428

 

 

 

0.87

%

 

Other1

 

732

 

 

—

 

 

—

 

 

—

 

 

—

 

 

 

732

 

 

 

0.18

%

 

Total Consumer

 

8,428

 

 

—

 

 

—

 

 

—

 

 

715

 

 

 

9,143

 

 

 

0.11

%

 

Total Loans and Leases

$

8,537

 

$

946

 

$

6,102

 

$

—

 

$

715

 

 

$

16,300

 

 

 

0.12

%

 

1 Comprised of other revolving credit, installment and lease financing.

 

The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023.

 

 

Weighted-Average

 

 

Weighted-Average

 

 

Weighted-Average

 

 

Months of

 

 

Payment

 

 

Interest Rate

(dollars in thousands)

 

Term Extension

 

 

Deferral

 

 

Reduction

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

31

 

 

$

—

 

 

 

—

 

%

Commercial Mortgage

 

 

—

 

 

 

—

 

 

 

2.50

 

%

Consumer

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

—

 

 

 

5

 

 

 

—

 

Home Equity

 

 

—

 

 

 

—

 

 

 

—

 

Automobile

 

 

22

 

 

 

—

 

 

 

—

 

Other1

 

 

23

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

 

6

 

 

$

1,159

 

 

 

—

 

%

Commercial Mortgage

 

 

—

 

 

 

—

 

 

 

2.50

 

Consumer

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

58

 

 

 

5

 

 

 

—

 

Home Equity

 

 

60

 

 

 

—

 

 

 

—

 

Automobile

 

 

23

 

 

 

—

 

 

 

—

 

Other1

 

 

22

 

 

 

—

 

 

 

—

 

1 Comprised of other revolving credit, installment and lease financing.

 

The following table presents the loan modifications made to borrowers experiencing financial difficulty that defaulted during the three and nine months ended September 30, 2023.

 

 

Term

 

 

Payment

 

 

 

 

(dollars in thousands)

Extension

 

 

Delay

 

 

Total

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

Residential Mortgage

$

—

 

 

$

715

 

 

$

715

 

Automobile

 

10

 

 

 

—

 

 

 

10

 

 Total Consumer

 

10

 

 

 

715

 

 

 

725

 

Total Loans and Leases

$

10

 

 

$

715

 

 

$

725

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

Residential Mortgage

$

—

 

 

$

715

 

 

$

715

 

Automobile

 

140

 

 

 

—

 

 

 

140

 

Other1

 

65

 

 

 

—

 

 

 

65

 

 Total Consumer

 

205

 

 

 

715

 

 

 

920

 

Total Loans and Leases

$

205

 

 

$

715

 

 

$

920

 

1 Comprised of other revolving credit, installment and lease financing.

 

The following table presents the aging analysis of loan modifications made to borrowers experiencing financial difficulty as of September 30, 2023.

 

(dollars in thousands)

 

Current

 

 

30 - 59
Days
Past Due

 

 

60 - 89
Days
Past Due

 

 

Past Due
90 Days
or More

 

 

Non-
Accrual

 

 

Total

 

As of September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

6,121

 

 

$

90

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

6,211

 

Commercial Mortgage

 

 

946

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

946

 

 Total Commercial

 

 

7,067

 

 

 

90

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,157

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

847

 

 

 

847

 

Home Equity

 

 

136

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

136

 

Automobile

 

 

6,505

 

 

 

793

 

 

 

102

 

 

 

28

 

 

 

—

 

 

 

7,428

 

Other1

 

 

584

 

 

 

95

 

 

 

31

 

 

 

22

 

 

 

—

 

 

 

732

 

 Total Consumer

 

 

7,225

 

 

 

888

 

 

 

133

 

 

 

50

 

 

 

847

 

 

 

9,143

 

Total Loans and Leases

 

 

14,292

 

 

$

978

 

 

$

133

 

 

$

50

 

 

$

847

 

 

$

16,300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Comprised of other revolving credit, installment and lease financing.

 

The following table presents by loan class and year of origination, the gross charge-offs recorded during the three and nine months ended September 30, 2023.

 

(dollars in thousands)

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Total

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

162

 

 

$

—

 

 

$

—

 

 

$

84

 

 

$

—

 

 

$

48

 

 

$

294

 

Total Commercial

 

162

 

 

 

—

 

 

 

—

 

 

 

84

 

 

 

—

 

 

 

48

 

 

 

294

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Home Equity

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

—

 

 

 

13

 

Automobile

 

134

 

 

 

358

 

 

 

309

 

 

 

145

 

 

 

246

 

 

 

161

 

 

 

1,353

 

Other1

 

455

 

 

 

510

 

 

 

360

 

 

 

114

 

 

 

238

 

 

 

280

 

 

 

1,957

 

Total Consumer

 

589

 

 

 

868

 

 

 

669

 

 

 

259

 

 

 

497

 

 

 

441

 

 

 

3,323

 

Total

$

751

 

 

$

868

 

 

$

669

 

 

$

343

 

 

$

497

 

 

$

489

 

 

$

3,617

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

347

 

 

$

188

 

 

$

—

 

 

$

84

 

 

$

—

 

 

$

139

 

 

$

758

 

Total Commercial

 

347

 

 

 

188

 

 

 

—

 

 

 

84

 

 

 

—

 

 

 

139

 

 

 

758

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6

 

 

 

6

 

Home Equity

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

13

 

 

 

55

 

 

 

68

 

Automobile

 

134

 

 

 

1,229

 

 

 

1,053

 

 

 

481

 

 

 

610

 

 

 

802

 

 

 

4,309

 

Other 1

 

813

 

 

 

1,844

 

 

 

1,371

 

 

 

316

 

 

 

952

 

 

 

1,000

 

 

 

6,296

 

Total Consumer

 

947

 

 

 

3,073

 

 

 

2,424

 

 

 

797

 

 

 

1,575

 

 

 

1,863

 

 

 

10,679

 

Total

$

1,294

 

 

$

3,261

 

 

$

2,424

 

 

$

881

 

 

$

1,575

 

 

$

2,002

 

 

$

11,437

 

1 Comprised of other revolving credit, installment and lease financing.

Foreclosure Proceedings

Consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure totaled $4.7 million as of September 30, 2023.