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Loans Receivable, Net | 3 Months Ended
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Mar. 31, 2023
Receivables [Abstract] |
Loans Receivable, Net | Loans Receivable, Net Loans receivable, net at March 31, 2023 and December 31, 2022 consisted of the following (in thousands):
| March 31, |  | December 31,
| 2023 |  | 2022
Commercial: |  |  |
Commercial real estate – investor | $ | 5,296,661 |  |  | $ | 5,171,952 |
Commercial real estate – owner occupied | 986,366 |  |  | 997,367 |
Commercial and industrial | 622,201 |  |  | 622,372 |
Total commercial | 6,905,228 |  |  | 6,791,691 |
Consumer: |  |  |
Residential real estate | 2,881,811 |  |  | 2,861,991 |
Home equity loans and lines and other consumer (“other consumer”) | 252,773 |  |  | 264,372 |
Total consumer | 3,134,584 |  |  | 3,126,363 |
Total loans receivable | 10,039,812 |  |  | 9,918,054 |
Deferred origination costs, net of fees | 7,332 |  |  | 7,488 |
Allowance for loan credit losses | (60,195) |  |  | (56,824) |
Total loans receivable, net | $ | 9,986,949 |  |  | $ | 9,868,718 |
The Company categorizes all loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis. The Company uses the following definitions for risk ratings: Pass: Loans classified as Pass are well protected by the paying capacity and net worth of the borrower. Special Mention: Loans classified as Special Mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Bank’s credit position at some future date. Substandard: Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the collection or the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The following tables summarize total loans by year of origination, internally assigned credit grades and risk characteristics (in thousands):
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 and prior |  | Revolving lines of credit |  |  |  | Total
March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate - investor |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 78,614 |  |  | $ | 1,186,386 |  |  | $ | 1,335,178 |  |  | $ | 543,587 |  |  | $ | 515,939 |  |  | $ | 1,048,169 |  |  | $ | 512,846 |  |  |  |  | $ | 5,220,719 |
Special Mention |  | — |  |  | — |  |  | 2,484 |  |  | 190 |  |  | 65 |  |  | 14,283 |  |  | 2,188 |  |  |  |  | 19,210 |
Substandard |  | — |  |  | — |  |  | — |  |  | 3,750 |  |  | 19,871 |  |  | 32,240 |  |  | 871 |  |  |  |  | 56,732 |
Total commercial real estate - investor |  | 78,614 |  |  | 1,186,386 |  |  | 1,337,662 |  |  | 547,527 |  |  | 535,875 |  |  | 1,094,692 |  |  | 515,905 |  |  |  |  | 5,296,661 |
Commercial real estate - owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 36,361 |  |  | 118,959 |  |  | 109,499 |  |  | 63,663 |  |  | 109,652 |  |  | 506,145 |  |  | 16,212 |  |  |  |  | 960,491 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,878 |  |  | — |  |  |  |  | 1,878 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,019 |  |  | 21,978 |  |  | — |  |  |  |  | 23,997 |
Total commercial real estate - owner occupied |  | 36,361 |  |  | 118,959 |  |  | 109,499 |  |  | 63,663 |  |  | 111,671 |  |  | 530,001 |  |  | 16,212 |  |  |  |  | 986,366 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 27,482 |  |  | 54,551 |  |  | 22,682 |  |  | 12,450 |  |  | 15,762 |  |  | 59,487 |  |  | 424,541 |  |  |  |  | 616,955 |
Special Mention |  | — |  |  | — |  |  | 7 |  |  | — |  |  | — |  |  | 223 |  |  | 1,836 |  |  |  |  | 2,066 |
Substandard |  | — |  |  | — |  |  | 21 |  |  | 52 |  |  | 1,041 |  |  | 1,949 |  |  | 117 |  |  |  |  | 3,180 |
Total commercial and industrial |  | 27,482 |  |  | 54,551 |  |  | 22,710 |  |  | 12,502 |  |  | 16,803 |  |  | 61,659 |  |  | 426,494 |  |  |  |  | 622,201 |
Residential real estate (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 48,611 |  |  | 928,107 |  |  | 588,525 |  |  | 413,922 |  |  | 243,055 |  |  | 658,129 |  |  | — |  |  |  |  | 2,880,349 |
Special Mention |  | — |  |  | 390 |  |  | — |  |  | — |  |  | — |  |  | 153 |  |  | — |  |  |  |  | 543 |
Substandard |  | — |  |  | — |  |  | 193 |  |  | — |  |  | — |  |  | 726 |  |  | — |  |  |  |  | 919 |
Total residential real estate |  | 48,611 |  |  | 928,497 |  |  | 588,718 |  |  | 413,922 |  |  | 243,055 |  |  | 659,008 |  |  | — |  |  |  |  | 2,881,811 |
Other consumer (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 3,723 |  |  | 23,767 |  |  | 22,999 |  |  | 14,355 |  |  | 14,812 |  |  | 137,925 |  |  | 32,972 |  |  |  |  | 250,553 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 96 |  |  | 187 |  |  | — |  |  |  |  | 283 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | 67 |  |  | 1,870 |  |  | — |  |  |  |  | 1,937 |
Total other consumer |  | 3,723 |  |  | 23,767 |  |  | 22,999 |  |  | 14,355 |  |  | 14,975 |  |  | 139,982 |  |  | 32,972 |  |  |  |  | 252,773 |
Total loans |  | $ | 194,791 |  |  | $ | 2,312,160 |  |  | $ | 2,081,588 |  |  | $ | 1,051,969 |  |  | $ | 922,379 |  |  | $ | 2,485,342 |  |  | $ | 991,583 |  |  |  |  | $ | 10,039,812 |
(1)For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity.
|  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 and prior |  | Revolving lines of credit |  | Total
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate - investor |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,144,763 |  |  | $ | 1,339,289 |  |  | $ | 555,937 |  |  | $ | 524,428 |  |  | $ | 220,999 |  |  | $ | 881,344 |  |  | $ | 450,787 |  |  | $ | 5,117,547 |
Special Mention |  | — |  |  | 2,508 |  |  | 192 |  |  | 17,094 |  |  | — |  |  | 12,818 |  |  | 2,188 |  |  | 34,800 |
Substandard |  | — |  |  | — |  |  | — |  |  | 893 |  |  | — |  |  | 18,180 |  |  | 532 |  |  | 19,605 |
Total commercial real estate - investor |  | 1,144,763 |  |  | 1,341,797 |  |  | 556,129 |  |  | 542,415 |  |  | 220,999 |  |  | 912,342 |  |  | 453,507 |  |  | 5,171,952 |
Commercial real estate - owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 119,912 |  |  | 110,440 |  |  | 59,952 |  |  | 115,385 |  |  | 88,204 |  |  | 458,708 |  |  | 14,932 |  |  | 967,533 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 748 |  |  | 5,679 |  |  | — |  |  | 6,427 |
Substandard |  | — |  |  | — |  |  | 3,750 |  |  | 2,037 |  |  | 4,817 |  |  | 12,803 |  |  | — |  |  | 23,407 |
Total commercial real estate - owner occupied |  | 119,912 |  |  | 110,440 |  |  | 63,702 |  |  | 117,422 |  |  | 93,769 |  |  | 477,190 |  |  | 14,932 |  |  | 997,367 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 60,078 |  |  | 23,724 |  |  | 14,072 |  |  | 17,175 |  |  | 10,992 |  |  | 47,370 |  |  | 443,211 |  |  | 616,622 |
Special Mention |  | — |  |  | 7 |  |  | — |  |  | — |  |  | — |  |  | 250 |  |  | 1,680 |  |  | 1,937 |
Substandard |  | — |  |  | 21 |  |  | 76 |  |  | 1,083 |  |  | 301 |  |  | 2,212 |  |  | 120 |  |  | 3,813 |
Total commercial and industrial |  | 60,078 |  |  | 23,752 |  |  | 14,148 |  |  | 18,258 |  |  | 11,293 |  |  | 49,832 |  |  | 445,011 |  |  | 622,372 |
Residential real estate (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 919,364 |  |  | 591,745 |  |  | 419,712 |  |  | 247,387 |  |  | 99,945 |  |  | 577,392 |  |  | — |  |  | 2,855,545 |
Special Mention |  | — |  |  | 193 |  |  | 1,514 |  |  | 204 |  |  | 59 |  |  | 2,407 |  |  | — |  |  | 4,377 |
Substandard |  | — |  |  | — |  |  | — |  |  | 656 |  |  | 286 |  |  | 1,127 |  |  | — |  |  | 2,069 |
Total residential real estate |  | 919,364 |  |  | 591,938 |  |  | 421,226 |  |  | 248,247 |  |  | 100,290 |  |  | 580,926 |  |  | — |  |  | 2,861,991 |
Other consumer (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 24,069 |  |  | 24,111 |  |  | 15,440 |  |  | 15,471 |  |  | 39,057 |  |  | 108,818 |  |  | 34,851 |  |  | 261,817 |
Special Mention |  | — |  |  | — |  |  | — |  |  | 75 |  |  | — |  |  | 598 |  |  | — |  |  | 673 |
Substandard |  | — |  |  | — |  |  | — |  |  | 157 |  |  | 18 |  |  | 1,707 |  |  | — |  |  | 1,882 |
Total other consumer |  | 24,069 |  |  | 24,111 |  |  | 15,440 |  |  | 15,703 |  |  | 39,075 |  |  | 111,123 |  |  | 34,851 |  |  | 264,372 |
Total loans |  | $ | 2,268,186 |  |  | $ | 2,092,038 |  |  | $ | 1,070,645 |  |  | $ | 942,045 |  |  | $ | 465,426 |  |  | $ | 2,131,413 |  |  | $ | 948,301 |  |  | $ | 9,918,054 |
(1) For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. An analysis of the allowance for credit losses on loans for the three months ended March 31, 2023 and 2022 was as follows (in thousands):
|  | Commercial Real Estate – Investor |  | Commercial Real Estate – Owner Occupied |  | Commercial and Industrial |  | Residential Real Estate |  | Other Consumer |  |  |  | Total
For the three months ended March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | 21,070 |  |  | $ | 4,423 |  |  | $ | 5,695 |  |  | $ | 24,530 |  |  | $ | 1,106 |  |  |  |  | $ | 56,824 |
Provision (benefit) for credit losses |  | 1,379 |  |  | (304) |  |  | 131 |  |  | 2,390 |  |  | (272) |  |  |  |  | 3,324 |
Charge-offs (1) |  | — |  |  | (6) |  |  | (3) |  |  | — |  |  | (1) |  |  |  |  | (10) |
Recoveries |  | 2 |  |  | 3 |  |  | 4 |  |  | 8 |  |  | 40 |  |  |  |  | 57 |
Balance at end of period |  | $ | 22,451 |  |  | $ | 4,116 |  |  | $ | 5,827 |  |  | $ | 26,928 |  |  | $ | 873 |  |  |  |  | $ | 60,195 |
For the three months ended March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | 25,504 |  |  | $ | 5,884 |  |  | $ | 5,039 |  |  | $ | 11,155 |  |  | $ | 1,268 |  |  |  |  | $ | 48,850 |
(Benefit) provision for credit losses |  | (1,867) |  |  | (840) |  |  | (406) |  |  | 5,028 |  |  | (259) |  |  |  |  | 1,656 |
Charge-offs |  | — |  |  | (4) |  |  | — |  |  | — |  |  | (139) |  |  |  |  | (143) |
Recoveries |  | — |  |  | 13 |  |  | 16 |  |  | 94 |  |  | 112 |  |  |  |  | 235 |
Balance at end of period |  | $ | 23,637 |  |  | $ | 5,053 |  |  | $ | 4,649 |  |  | $ | 16,277 |  |  | $ | 982 |  |  |  |  | $ | 50,598 |
(1) Gross charge-offs for the three months ended March 31, 2023, related to loans that originated prior to 2018. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral and, therefore, is classified as non-accruing. At March 31, 2023 and December 31, 2022, the Company had collateral dependent loans with an amortized cost balance as follows: commercial real estate - investor of $7.8 million and $4.6 million, respectively, commercial real estate - owner occupied of $251,000 and $4.0 million, respectively, and commercial and industrial of $141,000 and $160,000, respectively. In addition, the Company had residential and consumer loans collateralized by residential real estate, which are in the process of foreclosure, with an amortized cost balance of $1.5 million and $858,000 at March 31, 2023 and December 31, 2022, respectively. The following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of March 31, 2023 and December 31, 2022 (in thousands):
| March 31, |  | December 31,
| 2023 |  | 2022
Commercial real estate – investor | $ | 13,643 |  |  | $ | 10,483 |
Commercial real estate – owner occupied | 251 |  |  | 4,025 |
Commercial and industrial | 162 |  |  | 331 |
Residential real estate | 5,650 |  |  | 5,969 |
Other consumer | 2,731 |  |  | 2,457 |
| $ | 22,437 |  |  | $ | 23,265 |
At March 31, 2023 and December 31, 2022, the non-accrual loans were included in the allowance for credit loss calculation and the Company did not recognize or accrue interest income on these loans. At March 31, 2023, there were no loans that were past due 90 days or greater and still accruing interest. At December 31, 2022, there was one Paycheck Protection Program (“PPP”) loan for $14,000 that was past due 90 days or greater and still accruing interest. Per SBA guidelines, the SBA will pay accrued interest through the deferral period up to a maximum of 120 days past due. Given these servicing guidelines, PPP loans that are 90 to 120 days past due will be reported as accruing loans. The following table presents the aging of the recorded investment in past due loans as of March 31, 2023 and December 31, 2022 by loan portfolio segment (in thousands):
| 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Loans Not Past Due |  | Total
March 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Commercial real estate – investor | $ | 634 |  |  | $ | 50 |  |  | $ | 6,983 |  |  | $ | 7,667 |  |  | $ | 5,288,994 |  |  | $ | 5,296,661 |
Commercial real estate – owner occupied | 740 |  |  | 74 |  |  | — |  |  | 814 |  |  | 985,552 |  |  | 986,366 |
Commercial and industrial | 176 |  |  | 135 |  |  | 21 |  |  | 332 |  |  | 621,869 |  |  | 622,201 |
Residential real estate | 8,362 |  |  | 543 |  |  | 919 |  |  | 9,824 |  |  | 2,871,987 |  |  | 2,881,811 |
Other consumer | 235 |  |  | 283 |  |  | 1,937 |  |  | 2,455 |  |  | 250,318 |  |  | 252,773 |
| $ | 10,147 |  |  | $ | 1,085 |  |  | $ | 9,860 |  |  | $ | 21,092 |  |  | $ | 10,018,720 |  |  | $ | 10,039,812 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |
Commercial real estate – investor | $ | 217 |  |  | $ | 875 |  |  | $ | 3,700 |  |  | $ | 4,792 |  |  | $ | 5,167,160 |  |  | $ | 5,171,952 |
Commercial real estate – owner occupied | 143 |  |  | 80 |  |  | 3,750 |  |  | 3,973 |  |  | 993,394 |  |  | 997,367 |
Commercial and industrial | 159 |  |  | 47 |  |  | 180 |  |  | 386 |  |  | 621,986 |  |  | 622,372 |
Residential real estate | 7,003 |  |  | 4,377 |  |  | 2,069 |  |  | 13,449 |  |  | 2,848,542 |  |  | 2,861,991 |
Other consumer | 573 |  |  | 673 |  |  | 1,882 |  |  | 3,128 |  |  | 261,244 |  |  | 264,372 |
| $ | 8,095 |  |  | $ | 6,052 |  |  | $ | 11,581 |  |  | $ | 25,728 |  |  | $ | 9,892,326 |  |  | $ | 9,918,054 |
The Company modified certain loans to borrowers experiencing financial difficulty. These modifications may have included a reduction in interest rate, an extension in term, principal forgiveness and/or other than insignificant payment delay. At March 31, 2023, loans with modifications to borrowers experiencing financial difficulty totaled $475,000, which included residential real estate of $435,000 and other consumer of $40,000. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Of the $475,000 of loans with modifications to borrowers experiencing financial difficulty, $337,000 were current, and one loan for $138,000 was 30 days past due (which became current subsequent to March 31, 2023). No loans that were modified to borrowers experiencing financial difficulty since adoption had a payment default during the three months ended March 31, 2023. Prior to the adoption of ASU 2022-02 on January 1, 2023, the Company classified certain loans as troubled debt restructuring (“TDR”) loans when credit terms to a borrower in financial difficulty were modified, in accordance with ASC 310-40. With the adoption of ASU 2022-02 as of January 1, 2023, the Company has ceased to recognize or measure for new TDRs but those existing at December 31, 2022 will remain until settled. At March 31, 2023 and December 31, 2022, TDR loans totaled $13.7 million and $13.9 million, respectively. At March 31, 2023 and December 31, 2022, there were $6.3 million and $6.4 million, respectively, of TDR loans included in the non-accrual loan totals. At March 31, 2023 and December 31, 2022 the Company had $513,000 and $590,000, respectively, of specific reserve allocated to one loan that was classified as a TDR loan. Non-accrual loans which become TDR loans are generally returned to accrual status after six months of performance. In addition to the TDR loans included in non-accrual loans, the Company also has TDR loans classified as accruing loans, which totaled $7.4 million and $7.5 million at March 31, 2023 and December 31, 2022, respectively. The following table presents information about TDR loans which occurred during the three months ended March 31, 2022 (dollars in thousands):
| Number of Loans |  | Pre-modification Recorded Investment |  | Post-modification Recorded Investment
Three months ended March 31, 2022 |  |  |  |  |
Troubled debt restructurings: |  |  |  |  |
Commercial and industrial | 1 |  | $ | 65 |  |  | $ | 65 |
Other consumer | 3 |  | 991 |  |  | 1,109 |
There were no TDR loans that defaulted during the three months ended March 31, 2023 and 2022, which were modified within the preceding year.

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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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