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LOANS AND ALLOWANCE FOR CREDIT LOSSES | 3 Months Ended
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Mar. 31, 2023
Credit Loss [Abstract] |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | LOANS AND ALLOWANCE FOR CREDIT LOSSES The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types:
(In thousands) |  | March 31, 2023 |  | December 31, 2022
Construction |  | $ | 373,953 |  |  | $ | 319,452 |
Commercial multifamily |  | 618,073 |  |  | 620,088 |
Commercial real estate owner occupied |  | 695,890 |  |  | 640,489 |
Commercial real estate non-owner occupied |  | 2,531,946 |  |  | 2,496,237 |
Commercial and industrial |  | 1,517,556 |  |  | 1,445,236 |
Residential real estate |  | 2,463,981 |  |  | 2,312,447 |
Home equity |  | 222,393 |  |  | 227,450 |
Consumer other |  | 258,175 |  |  | 273,910 |
Total loans |  | $ | 8,681,967 |  |  | $ | 8,335,309 |
Allowance for credit losses |  | 97,991 |  |  | 96,270 |
Net loans |  | $ | 8,583,976 |  |  | $ | 8,239,039 |
During the three months ended March 31, 2023 and March 31, 2022, there were no loans reclassified to held for sale. Held for sale loans are not contained in the balances within this note and are accounted for at the lower of carrying value or fair market value within loans held for sale on the Consolidated Balance Sheet. Risk characteristics relevant to each portfolio segment are as follows: Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions. Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Allowance for Credit Losses for Loans The Allowance for Credit Losses for Loans (“ACLL”) is comprised of the allowance for loan losses, and the allowance for unfunded commitments is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics. The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon: •the existence and growth of concentrations of credit; •the volume and severity of past due financial assets, including nonaccrual assets; •the institutions lending and credit review as well as the experience and ability of relevant management and staff and; •the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters; •the effect of other economic factors such as economic stimulus and customer forbearance programs. The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in other liabilities on the consolidated balance sheet. The Company’s activity in the allowance for credit losses for loans for the three ended March 31, 2023 and March 31, 2022 was as follows:
(In thousands) |  | Balance at Beginning of Period |  |  |  |  |  | Adoption of ASU No. 2022-02 |  | Charge-offs |  | Recoveries |  | Provision for Credit Losses |  | Balance at End of Period
Three months ended March 31, 2023
Construction |  | $ | 1,227 |  |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 309 |  |  | $ | 1,536 |
Commercial multifamily |  | 1,810 |  |  |  |  |  |  | — |  |  | — |  |  | 6 |  |  | (118) |  |  | 1,698 |
Commercial real estate owner occupied |  | 10,739 |  |  |  |  |  |  | 24 |  |  | (70) |  |  | 45 |  |  | (460) |  |  | 10,278 |
Commercial real estate non-owner occupied |  | 30,724 |  |  |  |  |  |  | — |  |  | — |  |  | 95 |  |  | 2,589 |  |  | 33,408 |
Commercial and industrial |  | 18,743 |  |  |  |  |  |  | (23) |  |  | (6,033) |  |  | 305 |  |  | 7,172 |  |  | 20,164 |
Residential real estate |  | 18,666 |  |  |  |  |  |  | 2 |  |  | (31) |  |  | 387 |  |  | (1,434) |  |  | 17,590 |
Home equity |  | 2,173 |  |  |  |  |  |  | — |  |  | (10) |  |  | 26 |  |  | 131 |  |  | 2,320 |
Consumer other |  | 12,188 |  |  |  |  |  |  | (404) |  |  | (1,793) |  |  | 176 |  |  | 830 |  |  | 10,997 |
Total allowance for credit losses |  | $ | 96,270 |  |  |  |  |  |  | $ | (401) |  |  | $ | (7,937) |  |  | $ | 1,040 |  |  | $ | 9,019 |  |  | $ | 97,991 |
(In thousands) |  | Balance at Beginning of Period |  |  |  |  |  | Charge-offs |  | Recoveries |  | Provision for Credit Losses |  | Balance at End of Period
Three months ended March 31, 2022
Construction |  | $ | 3,206 |  |  |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | (701) |  |  | $ | 2,505 |
Commercial multifamily |  | 6,120 |  |  |  |  |  |  | — |  |  | — |  |  | (349) |  |  | 5,771 |
Commercial real estate owner occupied |  | 12,752 |  |  |  |  |  |  | (130) |  |  | 209 |  |  | (1,333) |  |  | 11,498 |
Commercial real estate non-owner occupied |  | 32,106 |  |  |  |  |  |  | (4,884) |  |  | 1,266 |  |  | (2,674) |  |  | 25,814 |
Commercial and industrial |  | 22,584 |  |  |  |  |  |  | (653) |  |  | 1,288 |  |  | (270) |  |  | 22,949 |
Residential real estate |  | 22,406 |  |  |  |  |  |  | (164) |  |  | 388 |  |  | (4,814) |  |  | 17,816 |
Home equity |  | 4,006 |  |  |  |  |  |  | — |  |  | 134 |  |  | (837) |  |  | 3,303 |
Consumer other |  | 2,914 |  |  |  |  |  |  | (216) |  |  | 137 |  |  | 6,984 |  |  | 9,819 |
Total allowance for credit losses |  | $ | 106,094 |  |  |  |  |  |  | $ | (6,047) |  |  | $ | 3,422 |  |  | $ | (3,994) |  |  | $ | 99,475 |
The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liabilities on the consolidated balance sheet), with adjustments to the reserve recognized in other noninterest expense in the consolidated statement of income. The Company’s activity in the allowance for credit losses on unfunded commitments for the three months ended March 31, 2023 and 2022 was as follows:
|  | Three Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |
Balance at beginning of period |  | $ | 8,588 |  |  | $ | 7,043 |  |
Expense for credit losses |  | 99 |  |  | — |  |
Balance at end of period |  | $ | 8,687 |  |  | $ | 7,043 |  |
Credit Quality Information The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential weaknesses and are evaluated closely by management. Substandard, including non-accruing loans, are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annual, semiannually, or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations. The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention, and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on non-accrual status. The following table presents the Company’s loans by risk category:
| Term Loans Amortized Cost Basis by Origination Year |  |  |
(In thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term | Total
As of March 31, 2023
Construction |  |  |  |  |  |  |  |  |
Current period gross write-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 14,566 |  | $ | 177,174 |  | $ | 152,773 |  | $ | 26,327 |  | $ | 2,967 |  | $ | 145 |  | $ | — |  | $ | — |  | $ | 373,952 |
Special Mention | — |  | — |  | — |  | — |  | — |  | 1 |  | — |  | — |  | 1 |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total | $ | 14,566 |  | $ | 177,174 |  | $ | 152,773 |  | $ | 26,327 |  | $ | 2,967 |  | $ | 146 |  | $ | — |  | $ | — |  | $ | 373,953 |
Commercial multifamily:
Current period gross write-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 3,938 |  | $ | 204,570 |  | $ | 57,851 |  | $ | 27,427 |  | $ | 99,583 |  | $ | 215,608 |  | $ | 990 |  | $ | — |  | $ | 609,967 |
Special Mention | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Substandard | — |  | — |  | — |  | 2,609 |  | — |  | 5,497 |  | — |  | — |  | 8,106 |
Total | $ | 3,938 |  | $ | 204,570 |  | $ | 57,851 |  | $ | 30,036 |  | $ | 99,583 |  | $ | 221,105 |  | $ | 990 |  | $ | — |  | $ | 618,073 |
Commercial real estate owner occupied:
Current period gross write-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 70 |  | $ | — |  | $ | — |  | $ | 70 |
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 25,216 |  | $ | 124,314 |  | $ | 127,750 |  | $ | 57,507 |  | $ | 102,523 |  | $ | 238,771 |  | $ | 3,002 |  | $ | — |  | $ | 679,083 |
Special Mention | — |  | 4,281 |  | — |  | 387 |  | 3,855 |  | — |  | — |  | — |  | 8,523 |
Substandard | — |  | 972 |  | 122 |  | 493 |  | 241 |  | 6,456 |  | — |  | — |  | 8,284 |
Total | $ | 25,216 |  | $ | 129,567 |  | $ | 127,872 |  | $ | 58,387 |  | $ | 106,619 |  | $ | 245,227 |  | $ | 3,002 |  | $ | — |  | $ | 695,890 |
Commercial real estate non-owner occupied:
Current period gross write-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 114,007 |  | $ | 630,920 |  | $ | 409,821 |  | $ | 173,271 |  | $ | 290,200 |  | $ | 818,573 |  | $ | 17,253 |  | $ | — |  | $ | 2,454,045 |
Special Mention | — |  | — |  | — |  | — |  | 7,669 |  | 23,821 |  | — |  | — |  | 31,490 |
Substandard | — |  | — |  | 660 |  | 7,137 |  | 5,890 |  | 32,724 |  | — |  | — |  | 46,411 |
Total | $ | 114,007 |  | $ | 630,920 |  | $ | 410,481 |  | $ | 180,408 |  | $ | 303,759 |  | $ | 875,118 |  | $ | 17,253 |  | $ | — |  | $ | 2,531,946 |
Commercial and industrial:
Current period gross write-offs | $ | — |  | $ | — |  | $ | 191 |  | $ | 669 |  | $ | 580 |  | $ | 4,593 |  | $ | — |  | $ | — |  | $ | 6,033 |
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 56,776 |  | $ | 279,856 |  | $ | 142,925 |  | $ | 49,172 |  | $ | 60,597 |  | $ | 169,281 |  | $ | 699,241 |  | $ | — |  | $ | 1,457,848 |
Special Mention | 175 |  | — |  | 1,210 |  | 1,290 |  | 2,597 |  | 1,805 |  | 6,342 |  | — |  | 13,419 |
Substandard | — |  | 549 |  | 5,425 |  | 3,566 |  | 7,496 |  | 14,571 |  | 10,332 |  | — |  | 41,939 |
Doubtful | — |  | — |  | — |  | — |  | — |  | 51 |  | 4,299 |  | — |  | 4,350 |
Total | $ | 56,951 |  | $ | 280,405 |  | $ | 149,560 |  | $ | 54,028 |  | $ | 70,690 |  | $ | 185,708 |  | $ | 720,214 |  | $ | — |  | $ | 1,517,556 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |
(In thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term | Total
Residential real estate
Current period gross write-offs | $ | — |  | $ | 25 |  | $ | — |  | $ | — |  | $ | — |  | $ | 6 |  | $ | — |  | $ | — |  | $ | 31 |
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 136,527 |  | $ | 1,008,711 |  | $ | 276,189 |  | $ | 94,488 |  | $ | 71,237 |  | $ | 862,274 |  | $ | 161 |  | $ | — |  | $ | 2,449,587 |
Special Mention | — |  | 43 |  | 371 |  | — |  | — |  | 694 |  | — |  | — |  | 1,108 |
Substandard | — |  | 159 |  | 331 |  | 434 |  | 1,485 |  | 10,877 |  | — |  | — |  | 13,286 |
Total | $ | 136,527 |  | $ | 1,008,913 |  | $ | 276,891 |  | $ | 94,922 |  | $ | 72,722 |  | $ | 873,845 |  | $ | 161 |  | $ | — |  | $ | 2,463,981 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |
(In thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term | Total
As of December 31, 2022
Construction |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 153,393 |  | $ | 133,708 |  | $ | 25,634 |  | $ | 3,432 |  | $ | 1,361 |  | $ | 1,924 |  | $ | — |  | $ | — |  | $ | 319,452 |
Special Mention | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Substandard | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total | $ | 153,393 |  | $ | 133,708 |  | $ | 25,634 |  | $ | 3,432 |  | $ | 1,361 |  | $ | 1,924 |  | $ | — |  | $ | — |  | $ | 319,452 |
Commercial multifamily:
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 205,124 |  | $ | 61,032 |  | $ | 27,583 |  | $ | 100,696 |  | $ | 67,675 |  | $ | 149,633 |  | $ | 205 |  | $ | — |  | $ | 611,948 |
Special Mention | — |  | — |  | 2,628 |  | — |  | — |  | — |  | — |  | — |  | 2,628 |
Substandard | — |  | — |  | — |  | — |  | 5,512 |  | — |  | — |  | — |  | 5,512 |
Total | $ | 205,124 |  | $ | 61,032 |  | $ | 30,211 |  | $ | 100,696 |  | $ | 73,187 |  | $ | 149,633 |  | $ | 205 |  | $ | — |  | $ | 620,088 |
Commercial real estate owner occupied:
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 131,096 |  | $ | 127,270 |  | $ | 58,835 |  | $ | 82,576 |  | $ | 75,322 |  | $ | 154,056 |  | $ | 3,464 |  | $ | — |  | $ | 632,619 |
Special Mention | — |  | — |  | 387 |  | — |  | — |  | — |  | — |  | — |  | 387 |
Substandard | 1,003 |  | 122 |  | 31 |  | 282 |  | 1,056 |  | 4,989 |  | — |  | — |  | 7,483 |
Total | $ | 132,099 |  | $ | 127,392 |  | $ | 59,253 |  | $ | 82,858 |  | $ | 76,378 |  | $ | 159,045 |  | $ | 3,464 |  | $ | — |  | $ | 640,489 |
Commercial real estate non-owner occupied:
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 621,685 |  | $ | 410,359 |  | $ | 175,456 |  | $ | 333,783 |  | $ | 313,124 |  | $ | 530,322 |  | $ | 17,846 |  | $ | — |  | $ | 2,402,575 |
Special Mention | — |  | — |  | — |  | — |  | 20,000 |  | 18,462 |  | — |  | — |  | 38,462 |
Substandard | — |  | — |  | 7,237 |  | 13,623 |  | 15,610 |  | 18,730 |  | — |  | — |  | 55,200 |
Total | $ | 621,685 |  | $ | 410,359 |  | $ | 182,693 |  | $ | 347,406 |  | $ | 348,734 |  | $ | 567,514 |  | $ | 17,846 |  | $ | — |  | $ | 2,496,237 |
Commercial and industrial:
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 282,781 |  | $ | 147,070 |  | $ | 56,880 |  | $ | 67,975 |  | $ | 83,223 |  | $ | 99,367 |  | $ | 648,956 |  | $ | — |  | $ | 1,386,252 |
Special Mention | — |  | 5,811 |  | 1,290 |  | 1,332 |  | 11,502 |  | 912 |  | 2,632 |  | — |  | 23,479 |
Substandard | 204 |  | 496 |  | 3,640 |  | 8,139 |  | 1,981 |  | 2,799 |  | 10,581 |  | — |  | 27,840 |
Doubtful | — |  | — |  | — |  | — |  | — |  | 56 |  | 7,609 |  | — |  | 7,665 |
Total | $ | 282,985 |  | $ | 153,377 |  | $ | 61,810 |  | $ | 77,446 |  | $ | 96,706 |  | $ | 103,134 |  | $ | 669,778 |  | $ | — |  | $ | 1,445,236 |
Residential real estate
Risk rating |  |  |  |  |  |  |  |  |
Pass | $ | 997,981 |  | $ | 280,308 |  | $ | 96,548 |  | $ | 70,845 |  | $ | 138,894 |  | $ | 713,744 |  | $ | 165 |  | $ | — |  | $ | 2,298,485 |
Special Mention | — |  | 364 |  | — |  | 861 |  | 202 |  | 707 |  | — |  | — |  | 2,134 |
Substandard | — |  | 284 |  | 448 |  | 267 |  | 1,857 |  | 8,972 |  | — |  | — |  | 11,828 |
Total | $ | 997,981 |  | $ | 280,956 |  | $ | 96,996 |  | $ | 71,973 |  | $ | 140,953 |  | $ | 723,423 |  | $ | 165 |  | $ | — |  | $ | 2,312,447 |
For home equity and consumer other loan portfolio segments, Berkshire evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an ongoing basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost based on payment activity:
| Term Loans Amortized Cost Basis by Origination Year |  |  |
(In thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term | Total
As of March 31, 2023
Home equity: |  |  |  |  |  |  |  |  |
Current period gross write-offs | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 10 |  | $ | — |  | $ | 10 |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | — |  | $ | 111 |  | $ | 450 |  | $ | — |  | $ | 2,423 |  | $ | 217,685 |  | $ | — |  | $ | 220,669 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | 1,724 |  | — |  | 1,724 |
Total | $ | — |  | $ | — |  | $ | 111 |  | $ | 450 |  | $ | — |  | $ | 2,423 |  | $ | 219,409 |  | $ | — |  | $ | 222,393 |
Consumer other: |  |  |  |  |  |  |  |  |
Current period gross write-offs | $ | — |  | $ | 1,510 |  | $ | 181 |  | $ | 7 |  | $ | 21 |  | $ | 74 |  | $ | — |  | $ | — |  | $ | 1,793 |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | 11,962 |  | $ | 148,658 |  | $ | 26,235 |  | $ | 7,661 |  | $ | 11,125 |  | $ | 41,923 |  | $ | 9,556 |  | $ | — |  | $ | 257,120 |
Nonperforming | — |  | 52 |  | 84 |  | 34 |  | 190 |  | 673 |  | 22 |  | — |  | 1,055 |
Total | $ | 11,962 |  | $ | 148,710 |  | $ | 26,319 |  | $ | 7,695 |  | $ | 11,315 |  | $ | 42,596 |  | $ | 9,578 |  | $ | — |  | $ | 258,175 |
| Term Loans Amortized Cost Basis by Origination Year |  |  |
(In thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | Prior | Revolving Loans Amortized Cost Basis | Revolving Loans Converted to Term | Total
As of December 31, 2022
Home equity: |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | — |  | $ | 114 |  | $ | 454 |  | $ | — |  | $ | — |  | $ | 17 |  | $ | 224,746 |  | $ | — |  | $ | 225,331 |
Nonperforming | — |  | — |  | — |  | — |  | — |  | — |  | 2,119 |  | — |  | 2,119 |
Total | $ | — |  | $ | 114 |  | $ | 454 |  | $ | — |  | $ | — |  | $ | 17 |  | $ | 226,865 |  | $ | — |  | $ | 227,450 |
Consumer other: |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |
Performing | $ | 161,157 |  | $ | 28,279 |  | $ | 8,312 |  | $ | 12,670 |  | $ | 27,608 |  | $ | 24,682 |  | $ | 9,070 |  | $ | — |  | $ | 271,778 |
Nonperforming | 588 |  | 137 |  | 44 |  | 280 |  | 477 |  | 567 |  | 39 |  | — |  | 2,132 |
Total | $ | 161,745 |  | $ | 28,416 |  | $ | 8,356 |  | $ | 12,950 |  | $ | 28,085 |  | $ | 25,249 |  | $ | 9,109 |  | $ | — |  | $ | 273,910 |
The following is a summary of loans by past due status at March 31, 2023 and December 31, 2022:
(In thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Current |  | Total Loans
March 31, 2023
Construction |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 373,952 |  |  | $ | 373,953 |
Commercial multifamily |  | — |  |  | 208 |  |  | — |  |  | 208 |  |  | 617,865 |  |  | 618,073 |
Commercial real estate owner occupied |  | 265 |  |  | — |  |  | 2,785 |  |  | 3,050 |  |  | 692,840 |  |  | 695,890 |
Commercial real estate non-owner occupied |  | 127 |  |  | 660 |  |  | 176 |  |  | 963 |  |  | 2,530,983 |  |  | 2,531,946 |
Commercial and industrial |  | 2,174 |  |  | 2,555 |  |  | 13,596 |  |  | 18,325 |  |  | 1,499,231 |  |  | 1,517,556 |
Residential real estate |  | 3,278 |  |  | 1,108 |  |  | 13,185 |  |  | 17,571 |  |  | 2,446,410 |  |  | 2,463,981 |
Home equity |  | 599 |  |  | 172 |  |  | 2,093 |  |  | 2,864 |  |  | 219,529 |  |  | 222,393 |
Consumer other |  | 1,982 |  |  | 1,082 |  |  | 2,093 |  |  | 5,157 |  |  | 253,018 |  |  | 258,175 |
Total |  | $ | 8,425 |  |  | $ | 5,786 |  |  | $ | 33,928 |  |  | $ | 48,139 |  |  | $ | 8,633,828 |  |  | $ | 8,681,967 |
(In thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Current |  | Total Loans
December 31, 2022
Construction |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 319,452 |  |  | $ | 319,452 |
Commercial multifamily |  | — |  |  | 214 |  |  | — |  |  | 214 |  |  | 619,874 |  |  | 620,088 |
Commercial real estate owner occupied |  | 122 |  |  | — |  |  | 3,302 |  |  | 3,424 |  |  | 637,065 |  |  | 640,489 |
Commercial real estate non-owner occupied |  | 143 |  |  | — |  |  | 191 |  |  | 334 |  |  | 2,495,903 |  |  | 2,496,237 |
Commercial and industrial |  | 1,173 |  |  | 1,438 |  |  | 18,658 |  |  | 21,269 |  |  | 1,423,967 |  |  | 1,445,236 |
Residential real estate |  | 3,694 |  |  | 2,134 |  |  | 11,724 |  |  | 17,552 |  |  | 2,294,895 |  |  | 2,312,447 |
Home equity |  | 168 |  |  | 57 |  |  | 2,119 |  |  | 2,344 |  |  | 225,106 |  |  | 227,450 |
Consumer other |  | 1,990 |  |  | 1,028 |  |  | 2,158 |  |  | 5,176 |  |  | 268,734 |  |  | 273,910 |
Total |  | $ | 7,290 |  |  | $ | 4,871 |  |  | $ | 38,152 |  |  | $ | 50,313 |  |  | $ | 8,284,996 |  |  | $ | 8,335,309 |
The following is a summary of loans on nonaccrual status and loans past due 90 days or more and still accruing as of March 31, 2023 and December 31, 2022:
(In thousands) |  |  |  | Nonaccrual Amortized Cost |  |  |  | Nonaccrual With No Related Allowance |  | Past Due 90 Days or Greater and Accruing |  | Interest Income Recognized on Nonaccrual
At or for the three months ended March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Construction |  |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial multifamily |  |  |  | — |  |  |  |  | — |  |  | — |  |  | — |
Commercial real estate owner occupied |  |  |  | 2,192 |  |  |  |  | 1,058 |  |  | 593 |  |  | — |
Commercial real estate non-owner occupied |  |  |  | 176 |  |  |  |  | 66 |  |  | — |  |  | — |
Commercial and industrial |  |  |  | 12,124 |  |  |  |  | 7,917 |  |  | 1,472 |  |  | — |
Residential real estate |  |  |  | 9,720 |  |  |  |  | 6,120 |  |  | 3,465 |  |  | — |
Home equity |  |  |  | 1,724 |  |  |  |  | 461 |  |  | 369 |  |  | — |
Consumer other |  |  |  | 1,055 |  |  |  |  | — |  |  | 1,038 |  |  | — |
Total |  |  |  | $ | 26,991 |  |  |  |  | $ | 15,622 |  |  | $ | 6,937 |  |  | $ | — |
The commercial and industrial loans nonaccrual amortized cost as of March 31, 2023 included medallion loans with a fair value of $0.5 million and a contractual balance of $10.2 million.
(In thousands) |  |  |  | Nonaccrual Amortized Cost |  |  |  | Nonaccrual With No Related Allowance |  | Past Due 90 Days or Greater and Accruing |  | Interest Income Recognized on Nonaccrual
At or for the three months ended December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Construction |  |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial multifamily |  |  |  | — |  |  |  |  | — |  |  | — |  |  | — |
Commercial real estate owner occupied |  |  |  | 2,202 |  |  |  |  | 1,411 |  |  | 1,100 |  |  | — |
Commercial real estate non-owner occupied |  |  |  | 191 |  |  |  |  | 73 |  |  | — |  |  | — |
Commercial and industrial |  |  |  | 16,992 |  |  |  |  | 14,223 |  |  | 1,666 |  |  | — |
Residential real estate |  |  |  | 8,901 |  |  |  |  | 5,307 |  |  | 2,823 |  |  | — |
Home equity |  |  |  | 1,568 |  |  |  |  | 388 |  |  | 551 |  |  | — |
Consumer other |  |  |  | 1,260 |  |  |  |  | 2 |  |  | 898 |  |  | — |
Total |  |  |  | $ | 31,114 |  |  |  |  | $ | 21,404 |  |  | $ | 7,038 |  |  | $ | — |
The commercial and industrial loans nonaccrual amortized cost as of December 31, 2022 included medallion loans with a fair value of $0.6 million and a contractual balance of $10.9 million. The following table summarizes information about total loans rated Special Mention or lower at March 31, 2023 and December 31, 2022. The table below includes consumer loans that are Special Mention and Substandard accruing that are classified as performing based on payment activity.
(In thousands) |  | March 31, 2023 |  | December 31, 2022 |  |
Non-Accrual |  | $ | 26,991 |  |  | $ | 31,114 |  |  |
Substandard Accruing |  | 99,551 |  |  | 88,665 |  |  |
Total Classified |  | 126,542 |  |  | 119,779 |  |  |
Special Mention |  | 55,751 |  |  | 68,127 |  |  |
Total Criticized |  | $ | 182,293 |  |  | $ | 187,906 |  |  |
A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral-dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of individually analyzed collateral-dependent loans by loan portfolio segment:
|  | Type of Collateral
(In thousands) |  | Real Estate |  |  |  | Investment Securities/Cash |  |  |  | Other
March 31, 2023 |  |  |  |  |  |  |  |  |  |
Construction |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |
Commercial multifamily |  |  |  |  |  | — |  |  |  |  | — |
Commercial real estate owner occupied |  | 1,066 |  |  |  |  | — |  |  |  |  | — |
Commercial real estate non-owner occupied |  | 373 |  |  |  |  | — |  |  |  |  | — |
Commercial and industrial |  | 185 |  |  |  |  | — |  |  |  |  | 8,946 |
Residential real estate |  | 4,746 |  |  |  |  | — |  |  |  |  | — |
Home equity |  | 462 |  |  |  |  | — |  |  |  |  | — |
Consumer other |  | — |  |  |  |  | — |  |  |  |  | — |
Total loans |  | $ | 6,832 |  |  |  |  | $ | — |  |  |  |  | $ | 8,946 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |
Construction |  | $ | — |  |  |  |  | $ | — |  |  |  |  | $ | — |
Commercial multifamily |  | — |  |  |  |  | — |  |  |  |  | — |
Commercial real estate owner occupied |  | 2,793 |  |  |  |  | — |  |  |  |  | — |
Commercial real estate non-owner occupied |  | 384 |  |  |  |  | — |  |  |  |  | — |
Commercial and industrial |  | 288 |  |  |  |  | — |  |  |  |  | 16,931 |
Residential real estate |  | 3,910 |  |  |  |  | — |  |  |  |  | — |
Home equity |  | 501 |  |  |  |  | — |  |  |  |  | — |
Consumer other |  | 2 |  |  |  |  | — |  |  |  |  | — |
Total loans |  | $ | 7,878 |  |  |  |  | $ | — |  |  |  |  | $ | 16,931 |
Modified Loans Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the "combination" columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension and principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction. The following table presents the amortized cost basis of loans at March 31, 2023 that were both experiencing financial difficulty and modified during the three months ended March 31, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:
(In thousands) |  | Principal Forgiveness |  | Payment Delay |  | Term Extension |  | Interest Rate Reduction |  | Combination Term Extension and Principal Forgiveness |  | Combination Term Extension and Interest Rate Reduction |  | Total Class of Financing Receivable
Three months ended March 31, 2023 |  |
Construction |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | — | %
Commercial multifamily |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial real estate owner occupied |  | — |  |  | 387 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 0.06 |
Commercial real estate non-owner occupied |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial and industrial |  | — |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |  |  | — |
Residential real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Home equity |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer other |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | — |  |  | $ | 387 |  |  | $ | — |  |  | $ | — |  |  | $ | 10 |  |  | $ | — |  |  | — | %
The Company has not committed to lend additional amounts to the borrowers included in the previous table. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last twelve months.
(In thousands) | 30 - 59 Days Past Due |  | 60 - 89 Days Past Due |  | Greater Than 89 Days Past Due |  | Total Past Due
March 31, 2023 |  |  |  |  |  |  |
Construction | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial multifamily | — |  |  | — |  |  | — |  |  | — |
Commercial real estate owner occupied | — |  |  | — |  |  | — |  |  | — |
Commercial real estate non-owner occupied | — |  |  | — |  |  | — |  |  | — |
Commercial and industrial | — |  |  | — |  |  | — |  |  | — |
Residential real estate | — |  |  | — |  |  | — |  |  | — |
Home equity | — |  |  | — |  |  | — |  |  | — |
Consumer other | — |  |  | — |  |  | — |  |  | — |
Total | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2023:
(In thousands) | Principal Forgiveness |  | Weighted Average Interest Rate Reduction |  | Weighted Average Term Extension (months)
March 31, 2023 |  |  |  |  |
Construction | $ | — |  |  | — | % |  | 0
Commercial multifamily | — |  |  | — |  |  | 0
Commercial real estate owner occupied | — |  |  | — |  |  | 120
Commercial real estate non-owner occupied | — |  |  | — |  |  | 0
Commercial and industrial | — |  |  | 1.25 |  |  | 87
Residential real estate | — |  |  | — |  |  | 0
Home equity | — |  |  | — |  |  | 0
Consumer other | — |  |  | — |  |  | 0
There were no loans that had a payment default during the three months ended March 31, 2023 that were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI https://asc.fasb.org/subtopic&trid=2196772 + Details
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