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Allowance for Credit Losses and Credit Quality of Loans (Tables)

9 Months Ended

Sep. 30, 2023

Allowance for Credit Losses and Credit Quality of Loans [Abstract]

The following tables present the activity in the allowance for credit losses by our portfolio segments:

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of June 30, 2023	$	36,963		$	47,883		$	15,554		$	100,400
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(138	)		(6,167	)		(16	)		(6,321	)
Recoveries		474			1,549			94			2,117
Provision		4,121			3,990			4,522			12,633
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601

Balance as of June 30, 2022	$	32,358		$	44,940		$	16,302		$	93,600
Charge-offs		(624	)		(3,951	)		(118	)		(4,693	)
Recoveries		1,282			1,924			203			3,409
Provision		(60	)		5,397			(853	)		4,484
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

(In thousands)	Commercial Loans			Consumer Loans			Residential			Total
Balance as of January 1, 2023 (after adoption of ASU 2022-02)	$	34,662		$	50,951		$	14,539		$	100,152
Allowance for credit loss on PCD acquired loans		5,300			19			453			5,772
Charge-offs		(514	)		(16,346	)		(460	)		(17,320	)
Recoveries		1,112			4,367			370			5,849
Provision		6,160			8,283			5,705			20,148
Ending balance as of September 30, 2023	$	46,720		$	47,274		$	20,607		$	114,601

Balance as of December 31, 2021	$	28,941		$	44,253		$	18,806		$	92,000
Charge-offs		(1,659	)		(11,051	)		(520	)		(13,230	)
Recoveries		2,212			5,693			655			8,560
Provision		3,462			9,415			(3,407	)		9,470
Ending balance as of September 30, 2022	$	32,956		$	48,310		$	15,534		$	96,800

Past due and Nonperforming Loans by Loan Class

The following table sets forth information with regard to past due and nonperforming loans by loan segment:

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of September 30, 2023
Commercial loans:
C&I	$	737	$	99	$	-	$	836	$	3,753	$	1,456,241	$	1,460,830
CRE		19,661		18		-		19,679		4,660		3,375,132		3,399,471
Total commercial loans	$	20,398	$	117	$	-	$	20,515	$	8,413	$	4,831,373	$	4,860,301
Consumer loans:
Auto	$	8,974	$	1,402	$	514	$	10,890	$	1,652	$	1,056,554	$	1,069,096
Residential solar		3,449		938		506		4,893		373		928,816		934,082
Other consumer		2,594		1,498		1,496		5,588		402		186,214		192,204
Total consumer loans	$	15,017	$	3,838	$	2,516	$	21,371	$	2,427	$	2,171,584	$	2,195,382
Residential	$	4,075	$	326	$	1,012	$	5,413	$	9,896	$	2,596,383	$	2,611,692
Total loans	$	39,490	$	4,281	$	3,528	$	47,299	$	20,736	$	9,599,340	$	9,667,375

(In thousands)	31-60 Days Past Due Accruing		61-90 Days Past Due Accruing		Greater Than 90 Days Past Due Accruing		Total Past Due Accruing		Nonaccrual		Current		Recorded Total Loans
As of December 31, 2022
Commercial loans:
C&I	$	342	$	99	$	4	$	445	$	2,244	$	1,238,468	$	1,241,157
CRE		336		96		-		432		5,780		2,689,196		2,695,408
Total commercial loans	$	678	$	195	$	4	$	877	$	8,024	$	3,927,664	$	3,936,565
Consumer loans:
Auto	$	8,640	$	1,393	$	785	$	10,818	$	1,494	$	950,389	$	962,701
Residential solar		2,858		731		474		4,063		79		852,656		856,798
Other consumer		3,483		1,838		1,789		7,110		94		272,384		279,588
Total consumer loans	$	14,981	$	3,962	$	3,048	$	21,991	$	1,667	$	2,075,429	$	2,099,087
Residential	$	2,496	$	555	$	771	$	3,822	$	7,542	$	2,103,131	$	2,114,495
Total loans	$	18,155	$	4,712	$	3,823	$	26,690	$	17,233	$	8,106,224	$	8,150,147

Credit Quality by Loan Class by Year of Origination (Vintage)

The following tables illustrate the Company’s credit quality by loan class by vintage and, beginning in 2023 with the Company’s January 1, 2023 adoption of ASU 2022-02, also includes gross charge-offs by loan class by vintage for the nine months ended September 30, 2023. Included in other consumer gross charge-offs, the Company recorded $0.2 million in overdrawn deposit accounts reported as 2022 originations and $0.5 million in overdrawn deposit accounts reported as 2023 originations, for the nine months ended September 30, 2023.

(In thousands)	2023			2022			2021			2020			2019			Prior			Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2023
C&I
By internally assigned grade:
Pass	$	171,431		$	302,023		$	257,555		$	164,254		$	83,519		$	75,504		$	351,672	$	2,666	$	1,408,624
Special mention		-			3,110			415			3,494			655			11,151			10,676		-		29,501
Substandard		1,521			8			705			312			2,285			4,317			13,413		14		22,575
Doubtful		-			1			66			58			4			1			-		-		130
Total C&I	$	172,952		$	305,142		$	258,741		$	168,118		$	86,463		$	90,973		$	375,761	$	2,680	$	1,460,830
Current-period gross charge-offs	$	-		$	(1	)	$	(5	)	$	(65	)	$	-		$	(329	)	$	-	$	-	$	(400	)
CRE
By internally assigned grade:
Pass	$	278,517		$	510,690		$	549,056		$	470,616		$	329,634		$	775,502		$	276,477	$	67,162	$	3,257,654
Special mention		3,678			2,236			9,041			8,082			13,915			21,829			8,250		-		67,031
Substandard		384			191			6,887			3,202			3,093			44,750			1,549		14,730		74,786
Total CRE	$	282,579		$	513,117		$	564,984		$	481,900		$	346,642		$	842,081		$	286,276	$	81,892	$	3,399,471
Current-period gross charge-offs	$	-		$	-		$	-		$	-		$	(114	)		-		$	-	$	-	$	(114	)
Auto
By payment activity:
Performing	$	369,178		$	395,362		$	176,026		$	49,917		$	56,455		$	19,979		$	13	$	-	$	1,066,930
Nonperforming		143			812			674			237			192			108			-		-		2,166
Total auto	$	369,321		$	396,174		$	176,700		$	50,154		$	56,647		$	20,087		$	13	$	-	$	1,069,096
Current-period gross charge-offs	$	(75	)	$	(827	)	$	(865	)	$	(283	)	$	(219	)	$	(243	)	$	-	$	-	$	(2,512	)
Residential solar
By payment activity:
Performing	$	155,132		$	438,855		$	182,153		$	67,562		$	48,362		$	41,139		$	-	$	-	$	933,203
Nonperforming		-			594			59			56			72			98			-		-		879
Total residential solar	$	155,132		$	439,449		$	182,212		$	67,618		$	48,434		$	41,237		$	-	$	-	$	934,082
Current-period gross charge-offs	$	(121)		$	(1,244	)	$	(696	)	$	(45	)	$	(447	)	$	(193	)	$	-	$	-	$	(2,746	)
Other consumer
By payment activity:
Performing	$	11,221		$	31,813		$	68,732		$	24,152		$	17,234		$	18,599		$	18,552	$	3	$	190,306
Nonperforming		-			490			742			147			139			347			1		32		1,898
Total other consumer	$	11,221		$	32,303		$	69,474		$	24,299		$	17,373		$	18,946		$	18,553	$	35	$	192,204
Current-period gross charge-offs	$	(561	)	$	(2,788	)	$	(5,742	)	$	(1,099	)	$	(595	)	$	(303	)	$	-	$	-	$	(11,088	)
Residential
By payment activity:
Performing	$	149,700		$	363,044		$	457,105		$	272,533		$	171,854		$	904,002		$	265,049	$	17,497	$	2,600,784
Nonperforming		144			442			1,226			314			462			8,320			-		-		10,908
Total residential	$	149,844		$	363,486		$	458,331		$	272,847		$	172,316		$	912,322		$	265,049	$	17,497	$	2,611,692
Current-period gross charge-offs	$	-		$	-		$	(81	)	$	-		$	-		$	(379	)	$	-	$	-	$	(460	)
Total loans	$	1,141,049		$	2,049,671		$	1,710,442		$	1,064,936		$	727,875		$	1,925,646		$	945,652	$	102,104	$	9,667,375
Current-period gross charge-offs	$	(757	)	$	(4,860	)	$	(7,389	)	$	(1,492	)	$	(1,375	)	$	(1,447	)	$	-	$	-	$	(17,320	)

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2022
C&I
By internally assigned grade:
Pass	$	296,562	$	252,480	$	164,976	$	91,497	$	39,394	$	32,413	$	327,166	$	3,133	$	1,207,621
Special mention		1,044		524		4,531		194		1,108		417		5,234		-		13,052
Substandard		76		459		231		3,098		91		3,969		12,348		163		20,435
Doubtful		-		20		-		28		-		1		-		-		49
Total C&I	$	297,682	$	253,483	$	169,738	$	94,817	$	40,593	$	36,800	$	344,748	$	3,296	$	1,241,157
CRE
By internally assigned grade:
Pass	$	374,313	$	465,990	$	439,012	$	333,568	$	217,141	$	566,783	$	201,563	$	24,735	$	2,623,105
Special mention		605		764		868		2,641		4,649		24,023		850		-		34,400
Substandard		309		-		2,316		3,937		1,822		23,819		713		4,987		37,903
Total CRE	$	375,227	$	466,754	$	442,196	$	340,146	$	223,612	$	614,625	$	203,126	$	29,722	$	2,695,408
Auto
By payment activity:
Performing	$	488,776	$	239,090	$	75,853	$	99,615	$	44,061	$	13,027	$	-	$	-	$	960,422
Nonperforming		590		655		404		385		216		29		-		-		2,279
Total auto	$	489,366	$	239,745	$	76,257	$	100,000	$	44,277	$	13,056	$	-	$	-	$	962,701
Residential solar
By Payment Activity:
Performing	$	485,942	$	193,971	$	74,532	$	54,662	$	36,119	$	11,019	$	-	$	-	$	856,245
Nonperforming		320		98		50		25		16		44		-		-		553
Total residential solar	$	486,262	$	194,069	$	74,582	$	54,687	$	36,135	$	11,063	$	-	$	-	$	856,798
Other consumer
By payment activity:
Performing	$	52,545	$	110,624	$	36,412	$	27,383	$	15,536	$	15,735	$	19,218	$	250	$	277,703
Nonperforming		238		838		395		247		57		87		8		15		1,885
Total other consumer	$	52,783	$	111,462	$	36,807	$	27,630	$	15,593	$	15,822	$	19,226	$	265	$	279,588
Residential
By payment activity:
Performing	$	251,012	$	349,498	$	212,161	$	156,957	$	157,755	$	717,621	$	233,056	$	28,122	$	2,106,182
Nonperforming		267		384		408		555		1,028		5,651		-		20		8,313
Total residential	$	251,279	$	349,882	$	212,569	$	157,512	$	158,783	$	723,272	$	233,056	$	28,142	$	2,114,495
Total loans	$	1,952,599	$	1,615,395	$	1,012,149	$	774,792	$	518,993	$	1,414,638	$	800,156	$	61,425	$	8,150,147

Amortized Cost Basis of Loans Modified to Borrowers Experiencing Financial Difficulty

The following table shows the amortized cost basis at the end of the reporting period of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

	Three Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	145		0.006	%	$	-		-
Total	$	31				$	145				$	-

	Nine Months Ended September 30, 2023
	Interest Rate Reduction					Term Extension					Combination - Term Extension and Interest Rate Reduction
(Dollars in thousands)	Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables			Amortized Cost		% of Total Class of Financing Receivables
Residential	$	31		0.001	%	$	386		0.015	%	$	165		0.006	%
Total	$	31				$	386				$	165

Financial Effect of Modifications Made to Borrowers Experiencing Financial Difficulty

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulties:

	Three Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 17 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of one percent

	Nine Months Ended September 30, 2023
Loan Type	Term Extension	Interest Rate Reduction
Residential	Added a weighted-average 15 years to the life of loans, which reduced monthly payment amounts for the borrowers.	Interest rates were reduced by an average of two and a quarter percent

Financing Receivables with Payment Default that Were Modified to Borrowers Experiencing Financial Difficulty

The following table depicts the financing receivables that had a payment default that were modified to borrowers experiencing financial difficulty since the adoption of ASU 2022-02 effective January 1, 2023:

	Three Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

	Nine Months Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
(In thousands)	Interest Rate Reduction
Residential		$	31
Total		$	31

Performance of Modified Loans

The following table depicts the performance of loans that have been modified since the adoption of ASU 2022-02 effective January 1, 2023:

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Three Months Ended September 30, 2023
Residential	$	145	$	31	$	-	$	-
Total	$	145	$	31	$	-	$	-

	Payment Status (Amortized Cost Basis)
(In thousands)	Current		31-60 Days Past Due		61-90 Days Past Due		Greater than 90 Days Past Due
Nine Months Ended September 30, 2023
Residential	$	549	$	31	$	-	$	-
Total	$	549	$	31	$	-	$	-

Troubled Debt Restructurings on Financing Receivables

The following table illustrates the recorded investments and number of modifications designated as TDRs, including the recorded investment in the loans prior to a modification and the recorded investment in the loans after restructuring:

	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Residential		6	$	613	$	682		10	$	829	$	928
Total TDRs		6	$	613	$	682		10	$	829	$	928

The following table illustrates the recorded investment and number of modifications for TDRs where a concession has been made and subsequently defaulted during the period:

	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
(Dollars in thousands)	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Commercial loans:
C&I		1	$	320		1	$	320
Total commercial loans		1	$	320		1	$	320
Consumer loans:
Auto		-	$	-		1	$	11
Total consumer loans		-	$	-		1	$	11
Residential		18	$	869		44	$	2,320
Total TDRs		19	$	1,189		46	$	2,651