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Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
 12 Months Ended
Dec. 31, 2020
Credit Loss [Abstract]  
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
On January 1, 2020, the Company adopted CECL, which replaced the incurred loss methodology with an expected loss methodology. This new methodology applies to off-balance sheet credit exposures, including loan commitments and lines of credit. The adoption of this new standard resulted in the Company recording a $3.2 million increase to the allowance for credit losses on off-balance sheet credit exposures with a corresponding cumulative effect adjustment to decrease retained earnings $2.4 million, net of income taxes.
Management analyzes the Company's exposure to credit losses for both on-balance sheet and off-balance sheet activity using a consistent methodology for the quantitative framework as well as the qualitative framework. For purposes of estimating the allowance for credit losses for off-balance sheet credit exposures, the exposure at default includes an estimated drawdown of unused credit based on historical credit utilization factors and current loss factors, resulting in a proportionate amount of expected credit losses.
The following table illustrates the impact of the January 1, 2020 adoption of CECL on off-balance sheet credit exposures (dollars in thousands):
January 1, 2020
As reported under CECLPrior to CECLImpact of CECL adoption
Liabilities
Allowance for credit losses on off-balance sheet credit exposure$3,206 — 3,206 
The provision for credit losses for off-balance sheet credit exposures totaled 1.8 million for the year ended December 31, 2020.
The allowance for credit losses for off-balance sheet credit exposures was $5.0 million at December 31, 2020, included in other liabilities on the Consolidated Statements of Financial Condition.