☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2021
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
001-39610
Massachusetts | 84-4199750 | |||||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | |||||||
265 Franklin Street, Boston, Massachusetts | 02110 | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of exchange on which registered | ||||||
Common Stock | EBC | Nasdaq Global Select Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |||||||||||||
(Do not check if a smaller reporting company) | Emerging Growth Company | ☒ |
No
Page | ||||||||
As of June 30, | As of December 31, | |||||||
2020 | 2019 | |||||||
(In Thousands) | ||||||||
ASSETS | ||||||||
Cash and due from banks | $ | 67,264 | $ | 135,503 | ||||
Short-term investments | 1,365,297 | 227,099 | ||||||
|
|
|
| |||||
Cash and cash equivalents | 1,432,561 | 362,602 | ||||||
|
|
|
| |||||
Securities: | ||||||||
Trading | — | 961 | ||||||
Available for sale | 1,600,354 | 1,508,236 | ||||||
|
|
|
| |||||
Total securities | 1,600,354 | 1,509,197 | ||||||
|
|
|
| |||||
Loans held for sale | 2,972 | 26 | ||||||
Loans: | ||||||||
Commercial and industrial | 2,271,700 | 1,642,184 | ||||||
Commercial real estate | 3,584,358 | 3,535,441 | ||||||
Commercial construction | 282,246 | 273,774 | ||||||
Business banking | 1,234,961 | 771,498 | ||||||
Residential real estate | 1,400,855 | 1,428,630 | ||||||
Consumer home equity | 905,484 | 933,088 | ||||||
Other consumer | 334,734 | 402,431 | ||||||
|
|
|
| |||||
Total Loans | 10,014,338 | 8,987,046 | ||||||
Less: allowance for loan losses | (116,636 | ) | (82,297 | ) | ||||
Less: unamortized premiums, net of unearned discounts and deferred fees | (34,722 | ) | (5,565 | ) | ||||
|
|
|
| |||||
Net Loans | 9,862,980 | 8,899,184 | ||||||
|
|
|
| |||||
Federal Home Loan Bank stock, at cost | 8,805 | 9,027 | ||||||
Premises and equipment | 52,475 | 57,453 | ||||||
Bank-owned life insurance | 77,528 | 77,546 | ||||||
Goodwill and other intangibles, net | 376,331 | 377,734 | ||||||
Deferred income taxes, net | 7,663 | 28,207 | ||||||
Prepaid expenses | 92,517 | 61,336 | ||||||
Other assets | 482,337 | 246,463 | ||||||
|
|
|
| |||||
Total Assets | $ | 13,996,523 | $ | 11,628,775 | ||||
|
|
|
|
June 30, 2021 | December 31, 2020 | ||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||
ASSETS | ASSETS | ||||||||||||||||||
Cash and due from banks | Cash and due from banks | $ | 58,490 | $ | 116,591 | ||||||||||||||
Short-term investments | Short-term investments | 1,505,757 | 1,937,479 | ||||||||||||||||
Cash and cash equivalents | Cash and cash equivalents | 1,564,247 | 2,054,070 | ||||||||||||||||
Available for sale securities | Available for sale securities | 4,848,781 | 3,183,861 | ||||||||||||||||
Loans held for sale | Loans held for sale | 2,734 | 1,140 | ||||||||||||||||
Loans: | Loans: | ||||||||||||||||||
Commercial and industrial | Commercial and industrial | 1,740,679 | 1,995,016 | ||||||||||||||||
Commercial real estate | Commercial real estate | 3,775,771 | 3,573,630 | ||||||||||||||||
Commercial construction | Commercial construction | 237,927 | 305,708 | ||||||||||||||||
Business banking | Business banking | 1,339,852 | 1,339,164 | ||||||||||||||||
Residential real estate | Residential real estate | 1,457,498 | 1,370,957 | ||||||||||||||||
Consumer home equity | Consumer home equity | 834,938 | 868,270 | ||||||||||||||||
Other consumer | Other consumer | 234,410 | 277,780 | ||||||||||||||||
Total loans | Total loans | 9,621,075 | 9,730,525 | ||||||||||||||||
Less: allowance for loan losses | Less: allowance for loan losses | (105,637) | (113,031) | ||||||||||||||||
Less: unamortized premiums, net of unearned discounts and deferred fees | Less: unamortized premiums, net of unearned discounts and deferred fees | (29,739) | (23,536) | ||||||||||||||||
Net loans | Net loans | 9,485,699 | 9,593,958 | ||||||||||||||||
Federal Home Loan Bank stock, at cost | Federal Home Loan Bank stock, at cost | 10,601 | 8,805 | ||||||||||||||||
Premises and equipment | Premises and equipment | 44,733 | 49,398 | ||||||||||||||||
Bank-owned life insurance | Bank-owned life insurance | 79,634 | 78,561 | ||||||||||||||||
Goodwill and other intangibles, net | Goodwill and other intangibles, net | 380,402 | 376,534 | ||||||||||||||||
Deferred income taxes, net | Deferred income taxes, net | 26,161 | 13,229 | ||||||||||||||||
Prepaid expenses | Prepaid expenses | 145,941 | 148,680 | ||||||||||||||||
Other assets | Other assets | 458,520 | 455,954 | ||||||||||||||||
Total assets | Total assets | $ | 17,047,453 | $ | 15,964,190 | ||||||||||||||
LIABILITIES AND EQUITY | LIABILITIES AND EQUITY | ||||||||||||||||||
Deposits: | Deposits: | ||||||||||||||||||
Demand | $ | 4,740,125 | $ | 3,517,447 | Demand | $ | 5,399,297 | $ | 4,910,794 | ||||||||||
Interest checking accounts | 2,385,912 | 1,814,327 | Interest checking accounts | 2,656,610 | 2,380,497 | ||||||||||||||
Savings accounts | 1,157,606 | 971,119 | Savings accounts | 1,403,472 | 1,256,736 | ||||||||||||||
Money market investment | 3,254,202 | 2,919,360 | Money market investment | 3,544,897 | 3,348,898 | ||||||||||||||
Certificate of deposits | 308,920 | 329,139 | |||||||||||||||||
|
| ||||||||||||||||||
Certificates of deposit | Certificates of deposit | 246,157 | 258,859 | ||||||||||||||||
Total deposits | 11,846,765 | 9,551,392 | Total deposits | 13,250,433 | 12,155,784 | ||||||||||||||
|
| ||||||||||||||||||
Borrowed funds: | Borrowed funds: | ||||||||||||||||||
Federal funds purchased | — | 201,082 | |||||||||||||||||
Federal Home Loan Bank advances | 14,922 | 18,964 | Federal Home Loan Bank advances | 14,323 | 14,624 | ||||||||||||||
Escrow deposits of borrowers | 14,233 | 15,349 | Escrow deposits of borrowers | 14,119 | 13,425 | ||||||||||||||
| |||||||||||||||||||
Total borrowed funds | 29,155 | 235,395 | Total borrowed funds | 28,442 | 28,049 | ||||||||||||||
|
| ||||||||||||||||||
Other liabilities | 426,973 | 241,835 | Other liabilities | 337,956 | 352,305 | ||||||||||||||
|
| ||||||||||||||||||
Total Liabilities | 12,302,893 | 10,028,622 | |||||||||||||||||
|
| ||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Total liabilities | Total liabilities | 13,616,831 | 12,536,138 | ||||||||||||||||
Commitments and contingencies (see footnote 10) | Commitments and contingencies (see footnote 10) | 0 | 0 | ||||||||||||||||
Shareholders’ equity | Shareholders’ equity | ||||||||||||||||||
Common shares, $0.01 par value, 1,000,000,000 shares authorized, 186,758,154 shares issued and outstanding at both June 30, 2021 and December 31, 2020 | Common shares, $0.01 par value, 1,000,000,000 shares authorized, 186,758,154 shares issued and outstanding at both June 30, 2021 and December 31, 2020 | 1,868 | 1,868 | ||||||||||||||||
Additional paid in capital | Additional paid in capital | 1,856,241 | 1,854,068 | ||||||||||||||||
Unallocated common shares held by the Employee Stock Ownership Plan | Unallocated common shares held by the Employee Stock Ownership Plan | (145,219) | (147,725) | ||||||||||||||||
Retained earnings | 1,681,164 | 1,644,000 | Retained earnings | 1,723,979 | 1,665,607 | ||||||||||||||
Accumulated other comprehensive income, net of tax | 12,466 | (43,847 | ) | Accumulated other comprehensive income, net of tax | (6,247) | 54,234 | |||||||||||||
|
| ||||||||||||||||||
Total equity | 1,693,630 | 1,600,153 | |||||||||||||||||
|
| ||||||||||||||||||
Total liabilities and equity | $ | 13,996,523 | $ | 11,628,775 | |||||||||||||||
|
| ||||||||||||||||||
Total shareholders’ equity | Total shareholders’ equity | 3,430,622 | 3,428,052 | ||||||||||||||||
Total liabilities and shareholders’ equity | Total liabilities and shareholders’ equity | $ | 17,047,453 | $ | 15,964,190 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In Thousands) | ||||||||||||||||
Interest and dividend income: | ||||||||||||||||
Interest and fees on loans | $ | 92,143 | $ | 102,216 | $ | 187,681 | $ | 202,772 | ||||||||
Taxable interest and dividends on available for sale securities | 7,600 | 7,901 | 15,778 | 15,953 | ||||||||||||
Non-taxable interest and dividends on available for sale securities | 1,905 | 2,049 | 3,826 | 4,403 | ||||||||||||
Interest on federal funds sold and other short-term investments | 284 | 612 | 801 | 965 | ||||||||||||
Interest and dividends on trading securities | 1 | 60 | 6 | 228 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total interest and dividend income | 101,933 | 112,838 | 208,092 | 224,321 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Interest expense: | ||||||||||||||||
Interest on deposits | 3,104 | 7,313 | 8,518 | 13,832 | ||||||||||||
Interest on borrowings | 74 | 2,002 | 673 | 4,294 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total interest expense | 3,178 | 9,315 | 9,191 | 18,126 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income | 98,755 | 103,523 | 198,901 | 206,195 | ||||||||||||
Provision for allowance for credit losses | 8,600 | 1,500 | 37,200 | 4,500 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income after provision for credit losses | 90,155 | 102,023 | 161,701 | 201,695 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Noninterest income: | ||||||||||||||||
Insurance commissions | 22,697 | 24,135 | 50,174 | 48,897 | ||||||||||||
Service charges on deposit accounts | 4,364 | 6,771 | 10,462 | 13,175 | ||||||||||||
Trust and investment advisory fees | 5,194 | 4,980 | 10,289 | 9,608 | ||||||||||||
Debit card processing fees | 2,337 | 2,638 | 4,807 | 5,048 | ||||||||||||
Interest rate swap income (losses) | 771 | (810 | ) | (5,238 | ) | (470 | ) | |||||||||
Income from investments held in rabbi trusts | 7,745 | 1,822 | 1,002 | 5,969 | ||||||||||||
(Losses) gains on trading securities, net | (1 | ) | 152 | (3 | ) | 1,294 | ||||||||||
Gains on sales of mortgage loans held for sale, net | 1,420 | 159 | 1,513 | 209 | ||||||||||||
Gains on sales of securities available for sale, net | 163 | 1,966 | 285 | 2,016 | ||||||||||||
Other | 2,967 | 3,819 | 7,735 | 7,686 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total noninterest income | 47,657 | 45,632 | 81,026 | 93,432 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Noninterest expense: | ||||||||||||||||
Salaries and employee benefits | 63,335 | 62,364 | 124,924 | 129,670 | ||||||||||||
Office occupancy and equipment | 8,615 | 8,383 | 17,304 | 17,182 | ||||||||||||
Data processing | 12,180 | 10,912 | 22,184 | 21,588 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||
Interest and dividend income: | Interest and dividend income: | ||||||||||||||||||||||||||||||||||||||
Interest and fees on loans | Interest and fees on loans | $ | 90,936 | $ | 92,143 | $ | 179,575 | $ | 187,681 | ||||||||||||||||||||||||||||||
Taxable interest and dividends on available for sale securities | Taxable interest and dividends on available for sale securities | 12,457 | 7,600 | 22,663 | 15,778 | ||||||||||||||||||||||||||||||||||
Non-taxable interest and dividends on available for sale securities | Non-taxable interest and dividends on available for sale securities | 1,857 | 1,905 | 3,713 | 3,826 | ||||||||||||||||||||||||||||||||||
Interest on federal funds sold and other short-term investments | Interest on federal funds sold and other short-term investments | 431 | 284 | 863 | 801 | ||||||||||||||||||||||||||||||||||
Interest and dividends on trading securities | Interest and dividends on trading securities | 0 | 1 | 0 | 6 | ||||||||||||||||||||||||||||||||||
Total interest and dividend income | Total interest and dividend income | 105,681 | 101,933 | 206,814 | 208,092 | ||||||||||||||||||||||||||||||||||
Interest expense: | Interest expense: | ||||||||||||||||||||||||||||||||||||||
Interest on deposits | Interest on deposits | 1,031 | 3,104 | 2,033 | 8,518 | ||||||||||||||||||||||||||||||||||
Interest on borrowings | Interest on borrowings | 42 | 74 | 82 | 673 | ||||||||||||||||||||||||||||||||||
Total interest expense | Total interest expense | 1,073 | 3,178 | 2,115 | 9,191 | ||||||||||||||||||||||||||||||||||
Net interest income | Net interest income | 104,608 | 98,755 | 204,699 | 198,901 | ||||||||||||||||||||||||||||||||||
(Release of) provision for allowance for loan losses | (Release of) provision for allowance for loan losses | (3,300) | 8,600 | (3,880) | 37,200 | ||||||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | Net interest income after provision for loan losses | 107,908 | 90,155 | 208,579 | 161,701 | ||||||||||||||||||||||||||||||||||
Noninterest income: | Noninterest income: | ||||||||||||||||||||||||||||||||||||||
Insurance commissions | Insurance commissions | 23,664 | 22,697 | 51,811 | 50,174 | ||||||||||||||||||||||||||||||||||
Service charges on deposit accounts | Service charges on deposit accounts | 5,708 | 4,364 | 11,075 | 10,462 | ||||||||||||||||||||||||||||||||||
Trust and investment advisory fees | Trust and investment advisory fees | 6,074 | 5,194 | 11,737 | 10,289 | ||||||||||||||||||||||||||||||||||
Debit card processing fees | Debit card processing fees | 3,170 | 2,337 | 5,919 | 4,807 | ||||||||||||||||||||||||||||||||||
Interest rate swap (losses) income | Interest rate swap (losses) income | (1,164) | 771 | 4,241 | (5,238) | ||||||||||||||||||||||||||||||||||
Income from investments held in rabbi trusts | Income from investments held in rabbi trusts | 4,216 | 7,745 | 6,062 | 1,002 | ||||||||||||||||||||||||||||||||||
Losses on trading securities, net | Losses on trading securities, net | 0 | (1) | 0 | (3) | ||||||||||||||||||||||||||||||||||
Gains on sales of mortgage loans held for sale, net | Gains on sales of mortgage loans held for sale, net | 848 | 1,420 | 2,327 | 1,513 | ||||||||||||||||||||||||||||||||||
Gains on sales of securities available for sale, net | Gains on sales of securities available for sale, net | 1 | 163 | 1,165 | 285 | ||||||||||||||||||||||||||||||||||
Other | Other | 3,216 | 2,967 | 6,608 | 7,735 | ||||||||||||||||||||||||||||||||||
Total noninterest income | Total noninterest income | 45,733 | 47,657 | 100,945 | 81,026 | ||||||||||||||||||||||||||||||||||
Noninterest expense: | Noninterest expense: | ||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | Salaries and employee benefits | 69,276 | 63,335 | 133,316 | 124,924 | ||||||||||||||||||||||||||||||||||
Office occupancy and equipment | Office occupancy and equipment | 8,094 | 8,615 | 16,311 | 17,304 | ||||||||||||||||||||||||||||||||||
Data processing | Data processing | 13,572 | 12,180 | 25,701 | 22,184 | ||||||||||||||||||||||||||||||||||
Professional services | 4,396 | 3,966 | 8,085 | 7,104 | Professional services | 6,439 | 4,396 | 10,587 | 8,085 | ||||||||||||||||||||||||||||||
Charitable contributions | 2,797 | 3,683 | 3,984 | 7,331 | Charitable contributions | 0 | 2,797 | 0 | 3,984 | ||||||||||||||||||||||||||||||
Marketing | 1,645 | 2,683 | 4,113 | 4,406 | Marketing | 3,497 | 1,645 | 5,188 | 4,113 | ||||||||||||||||||||||||||||||
Loan expenses | 2,036 | 886 | 3,148 | 1,551 | Loan expenses | 1,854 | 2,036 | 3,701 | 3,148 | ||||||||||||||||||||||||||||||
FDIC insurance | 944 | 927 | 1,850 | 1,800 | FDIC insurance | 985 | 944 | 1,933 | 1,850 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 701 | 886 | 1,403 | 1,773 | Amortization of intangible assets | 625 | 701 | 1,157 | 1,403 | ||||||||||||||||||||||||||||||
Net periodic benefit cost, excluding service cost | (2,443 | ) | (1,334 | ) | (4,885 | ) | (2,668 | ) | |||||||||||||||||||||||||||||||
Other | 6,559 | 8,214 | 13,827 | 16,662 | Other | 2,993 | 4,116 | 3,490 | 8,942 | ||||||||||||||||||||||||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||||
Total noninterest expense | 100,765 | 101,570 | 195,937 | 206,399 | Total noninterest expense | 107,335 | 100,765 | 201,384 | 195,937 | ||||||||||||||||||||||||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||||
Income before income tax expense | 37,047 | 46,085 | 46,790 | 88,728 | Income before income tax expense | 46,306 | 37,047 | 108,140 | 46,790 | ||||||||||||||||||||||||||||||
Income tax expense | 7,197 | 11,032 | 8,495 | 20,710 | Income tax expense | 11,497 | 7,197 | 25,668 | 8,495 | ||||||||||||||||||||||||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||||
Net Income | $ | 29,850 | $ | 35,053 | $ | 38,295 | $ | 68,018 | |||||||||||||||||||||||||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||||
Net income | Net income | $ | 34,809 | $ | 29,850 | $ | 82,472 | $ | 38,295 | ||||||||||||||||||||||||||||||
Basic earnings per share | Basic earnings per share | $ | 0.20 | $ | 0 | $ | 0.48 | $ | 0 | ||||||||||||||||||||||||||||||
Diluted earnings per share | Diluted earnings per share | $ | 0.20 | $ | 0 | $ | 0.48 | $ | 0 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In Thousands) | ||||||||||||||||
Net income | $ | 29,850 | $ | 35,053 | $ | 38,295 | $ | 68,018 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Net change in fair value of securities available for sale | 287 | 10,134 | 26,479 | 35,124 | ||||||||||||
Net change in fair value of cash flow hedges | (2,645 | ) | 11,375 | 26,430 | 15,377 | |||||||||||
Net change in other comprehensive income for defined benefit postretirement plans | 3,404 | — | 3,404 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total other comprehensive income | 1,046 | 21,509 | 56,313 | 50,501 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income | $ | 30,896 | $ | 56,562 | $ | 94,608 | $ | 118,519 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Net income | $ | 34,809 | $ | 29,850 | $ | 82,472 | $ | 38,295 | |||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Net change in fair value of securities available for sale | 25,428 | 287 | (49,476) | 26,479 | |||||||||||||||||||
Net change in fair value of cash flow hedges | (5,909) | (2,645) | (11,857) | 26,430 | |||||||||||||||||||
Net change in other comprehensive income for defined benefit postretirement plans | 426 | 3,404 | 852 | 3,404 | |||||||||||||||||||
Total other comprehensive income (loss) | 19,945 | 1,046 | (60,481) | 56,313 | |||||||||||||||||||
Total comprehensive income | $ | 54,754 | $ | 30,896 | $ | 21,991 | $ | 94,608 |
Retained Earnings | Accumulated Other Comprehensive Income | Total | ||||||||||
(In Thousands) | ||||||||||||
Balance at December 31, 2019 | $ | 1,644,000 | $ | (43,847 | ) | $ | 1,600,153 | |||||
Cumulative effect accounting adjustment (1) | (1,131 | ) | (1,131 | ) | ||||||||
Net income | 8,445 | — | 8,445 | |||||||||
Other comprehensive income, net of tax | — | 55,267 | 55,267 | |||||||||
|
|
|
|
|
| |||||||
Balance at March 31, 2020 | $ | 1,651,314 | $ | 11,420 | $ | 1,662,734 | ||||||
|
|
|
|
|
| |||||||
Net income | 29,850 | — | 29,850 | |||||||||
Other comprehensive income, net of tax | — | 1,046 | 1,046 | |||||||||
|
|
|
|
|
| |||||||
Balance at June 30, 2020 | $ | 1,681,164 | $ | 12,466 | $ | 1,693,630 | ||||||
|
|
|
|
|
| |||||||
Balance at December 31, 2018 | $ | 1,508,902 | $ | (75,761 | ) | $ | 1,433,141 | |||||
Net income | 32,965 | — | 32,965 | |||||||||
Other comprehensive income, net of tax | — | 28,992 | 28,992 | |||||||||
|
|
|
|
|
| |||||||
Balance at March 31, 2019 | $ | 1,541,867 | $ | (46,769 | ) | $ | 1,495,098 | |||||
|
|
|
|
|
| |||||||
Net income | 35,053 | — | 35,053 | |||||||||
Other comprehensive income, net of tax | — | 21,509 | 21,509 | |||||||||
|
|
|
|
|
| |||||||
Balance at June 30, 2019 | $ | 1,576,920 | $ | (25,260 | ) | $ | 1,551,660 | |||||
|
|
|
|
|
|
|
Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Unallocated Common Stock Held by ESOP | Total | |||||||||||||||||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | 0 | $ | 0 | $ | 0 | $ | 1,651,314 | $ | 11,420 | $ | 0 | $ | 1,662,734 | ||||||||||||||||||||||||||||
Net income | — | — | — | 29,850 | — | — | 29,850 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 1,046 | — | 1,046 | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 0 | $ | 0 | $ | 0 | $ | 1,681,164 | $ | 12,466 | $ | 0 | $ | 1,693,630 | ||||||||||||||||||||||||||||
Balance at March 31, 2021 | 186,758,154 | $ | 1,868 | $ | 1,854,895 | $ | 1,702,946 | $ | (26,192) | $ | (146,472) | $ | 3,387,045 | ||||||||||||||||||||||||||||
Dividends to common shareholders (1) | — | — | — | (13,776) | — | — | (13,776) | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 34,809 | — | — | 34,809 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 19,945 | — | 19,945 | ||||||||||||||||||||||||||||||||||
ESOP shares committed to be released | — | — | 1,346 | — | — | 1,253 | 2,599 | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 186,758,154 | $ | 1,868 | $ | 1,856,241 | $ | 1,723,979 | $ | (6,247) | $ | (145,219) | $ | 3,430,622 |
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
(In Thousands) | ||||||||
Operating activities | ||||||||
Net income | $ | 38,295 | $ | 68,018 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Provision for loan losses | 37,200 | 4,500 | ||||||
Depreciation and amortization | 8,471 | 9,781 | ||||||
Change in unamortized net loan costs and premiums | (3,155 | ) | 2,501 | |||||
Deferred income tax expense (benefit) | 1,773 | 6,052 | ||||||
Amortization of investment security premiums and discounts | 1,656 | 1,502 | ||||||
Right-of-use asset amortization | 6,042 | — | ||||||
Increase in cash surrender value of bank-owned life insurance | (1,155 | ) | (1,092 | ) | ||||
Gain on life insurance benefits | (147 | ) | — | |||||
Net gain on sale of securities available for sale | (285 | ) | (2,016 | ) | ||||
Net gain on sale of mortgage loans held for sale | (1,513 | ) | (209 | ) | ||||
Mark-to-market on loans held for sale | 19 | — | ||||||
Proceeds from sale of loans held for sale | 172,872 | 53,104 | ||||||
Originations of loans held for sale | (174,324 | ) | (54,857 | ) | ||||
Amortization of gains from terminated interest rate swaps | (373 | ) | — | |||||
Loss on sale of premises and equipment | — | 131 | ||||||
Change in: | ||||||||
Trading securities | 961 | 51,444 | ||||||
Prepaid pension expense | (28,432 | ) | (15,515 | ) | ||||
Other assets | (133,413 | ) | (30,070 | ) | ||||
Other liabilities | 77,509 | (8,620 | ) | |||||
|
|
|
| |||||
Net cash provided by operating activities | 2,001 | 84,654 | ||||||
|
|
|
| |||||
Investing activities | ||||||||
Proceeds from sales of securities available for sale | 9,098 | 47,986 | ||||||
Proceeds from maturities and principal paydowns of securities available for sale | 153,542 | 85,226 | ||||||
Purchases of securities available for sale | (171,226 | ) | (35,981 | ) | ||||
Proceeds from sale of Federal Home Loan Bank stock | 749 | 31,862 | ||||||
Purchases of Federal Home Loan Bank stock | (527 | ) | (27,453 | ) | ||||
Contributions to low income housing tax credit investments | (7,435 | ) | (946 | ) | ||||
Distributions from low income housing tax credit investments | — | 3 | ||||||
Contributions to other equity investments | (1,092 | ) | — | |||||
Distributions from equity investments | 54 | 15 | ||||||
Net increase in outstanding loans | (997,881 | ) | (176,135 | ) | ||||
Purchased banking premises and equipment, net | (2,146 | ) | (3,780 | ) | ||||
|
|
|
| |||||
Net cash used in investing activities | (1,016,864 | ) | (79,203 | ) | ||||
|
|
|
| |||||
Financing activities | ||||||||
Net increase in demand, savings, interest checking, and money market investment deposit accounts | 2,315,592 | 107,136 | ||||||
Net decrease in time deposits | (20,219 | ) | (65,525 | ) | ||||
Net decrease in borrowed funds | (206,240 | ) | (14,714 | ) |
Contingent consideration paid | (158 | ) | (447 | ) | ||||
Payment of initial public offering costs | (4,153 | ) | — | |||||
|
|
|
| |||||
Net cash provided by financing activities | 2,084,822 | 26,450 | ||||||
|
|
|
| |||||
Net increase in cash, cash equivalents, and restricted cash | 1,069,959 | 31,901 | ||||||
Cash, cash equivalents, and restricted cash at beginning of period | 362,602 | 259,708 | ||||||
|
|
|
| |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 1,432,561 | $ | 291,609 | ||||
|
|
|
| |||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid during the period for: | ||||||||
Interest paid | $ | 10,533 | $ | 17,697 | ||||
Income taxes | 14,976 | 20,335 | ||||||
Non-cash activities | ||||||||
Net increase in capital commitments relating to low income housing tax credit projects | $ | 13,214 | $ | — | ||||
Initial recognition of operating lease right-of-use assets upon adoption of Accounting Standards Update 2016-02 | 92,948 | — | ||||||
Initial recognition of operating lease liabilities upon adoption of Accounting Standards Update 2016-02 | 96,426 | — |
Six Months Ended June 30, 2021 and 2020
Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Unallocated Common Stock Held by ESOP | Total | |||||||||||||||||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 0 | $ | 0 | $ | 0 | $ | 1,644,000 | $ | (43,847) | $ | 0 | $ | 1,600,153 | ||||||||||||||||||||||||||||
Cumulative effect accounting adjustment (1) | — | — | — | (1,131) | — | — | (1,131) | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 38,295 | — | — | 38,295 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 56,313 | — | 56,313 | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 0 | $ | 0 | $ | 0 | $ | 1,681,164 | $ | 12,466 | $ | 0 | $ | 1,693,630 | ||||||||||||||||||||||||||||
Balance at December 31, 2020 | 186,758,154 | $ | 1,868 | $ | 1,854,068 | $ | 1,665,607 | $ | 54,234 | $ | (147,725) | $ | 3,428,052 | ||||||||||||||||||||||||||||
Dividends to common shareholders (2) | — | — | — | (24,100) | — | — | (24,100) | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 82,472 | — | — | 82,472 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (60,481) | — | (60,481) | ||||||||||||||||||||||||||||||||||
ESOP shares committed to be released | — | — | 2,173 | — | — | 2,506 | 4,679 | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 186,758,154 | $ | 1,868 | $ | 1,856,241 | $ | 1,723,979 | $ | (6,247) | $ | (145,219) | $ | 3,430,622 |
BANKSHARES, INC.
For the Six Months Ended June 30, | |||||||||||
(In thousands) | 2021 | 2020 | |||||||||
Operating activities | |||||||||||
Net income | $ | 82,472 | $ | 38,295 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
(Release of) provision for loan losses | (3,880) | 37,200 | |||||||||
Depreciation and amortization | 6,636 | 8,471 | |||||||||
Accretion of deferred loan fees and premiums, net | (14,767) | (3,155) | |||||||||
Deferred income tax expense | 5,407 | 1,773 | |||||||||
Amortization of investment security premiums and discounts | 6,397 | 1,656 | |||||||||
Right-of-use asset amortization | 6,130 | 6,042 | |||||||||
Increase in cash surrender value of bank-owned life insurance | (1,073) | (1,155) | |||||||||
Gain on sale of securities available for sale, net | (1,165) | (285) | |||||||||
Amortization of gains from terminated interest rate swaps | (16,493) | (373) | |||||||||
Employee Stock Ownership Plan expense | 4,679 | 0 | |||||||||
Other | 248 | (128) | |||||||||
Change in: | |||||||||||
Trading securities | 0 | 961 | |||||||||
Loans held for sale | (1,583) | (2,965) | |||||||||
Prepaid pension expense | 1,676 | (28,432) | |||||||||
Other assets | 9,746 | (133,413) | |||||||||
Other liabilities | (24,794) | 77,509 | |||||||||
Net cash provided by operating activities | 59,636 | 2,001 | |||||||||
Investing activities | |||||||||||
Proceeds from sales of securities available for sale | 23,237 | 9,098 | |||||||||
Proceeds from maturities and principal paydowns of securities available for sale | 381,123 | 153,542 | |||||||||
Purchases of securities available for sale | (2,138,024) | (171,226) | |||||||||
Proceeds from sale of Federal Home Loan Bank stock | 0 | 749 | |||||||||
Purchases of Federal Home Loan Bank stock | (1,796) | (527) | |||||||||
Contributions to low income housing tax credit investments | (4,553) | (7,435) | |||||||||
Contributions to other equity investments | (1,920) | (1,092) | |||||||||
Distributions from other equity investments | 170 | 54 | |||||||||
Net decrease (increase) in outstanding loans | 126,868 | (997,881) | |||||||||
Acquisitions, net of cash and cash equivalents acquired | (4,354) | 0 | |||||||||
Purchased banking premises and equipment, net | (1,809) | (2,146) | |||||||||
Proceeds from sale of premises held for sale | 736 | 0 | |||||||||
Net cash used in investing activities | (1,620,322) | (1,016,864) | |||||||||
Financing activities | |||||||||||
Net increase in demand, savings, interest checking, and money market investment deposit accounts | 1,107,351 | 2,315,592 | |||||||||
Net decrease in time deposits | (12,702) | (20,219) | |||||||||
Net increase (decrease) in borrowed funds | 393 | (206,240) | |||||||||
Contingent consideration paid | (79) | (158) | |||||||||
Payment of deferred offering costs | 0 | (4,153) | |||||||||
Dividends declared and paid to common shareholders | (24,100) | 0 | |||||||||
Net cash provided by financing activities | 1,070,863 | 2,084,822 | |||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (489,823) | 1,069,959 | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 2,054,070 | 362,602 | |||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 1,564,247 | $ | 1,432,561 |
Supplemental disclosure of cash flow information | |||||||||||
Cash paid during the period for: | |||||||||||
Interest paid | $ | 2,127 | $ | 10,533 | |||||||
Income taxes | $ | 35,122 | 14,976 | ||||||||
Non-cash activities | |||||||||||
Net increase in capital commitments relating to low income housing tax credit projects | $ | 14,446 | $ | 13,214 | |||||||
Initial recognition of operating lease right-of-use assets upon adoption of Accounting Standards Update 2016-02 | $ | 0 | $ | 92,948 | |||||||
Initial recognition of operating lease liabilities upon adoption of Accounting Standards Update 2016-02 | $ | 0 | $ | 96,426 |
Eastern Insurance Group LLC is a wholly-owned subsidiary of the Bank.
year ending December 31, 2021, any other interim periods, or any future year or period.
Unaudited Interim Financial Information
Leases
On January 1, 2020, the Company adopted Accounting Standards Update (‘ASU”) 2016-02, “Leases” (“Topic 842”), using the modified retrospective method. The new guidance was applied to leases that existed or were entered into on or after January 1, 2020. The Company’s results for the reporting period beginning on January 1, 2020 have been presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with previous guidance. See “Note 5 – Leases” for further discussion ofdefer the adoption andof new or revised accounting standards until the impact on the Company’s consolidated financial statements.
Recent Accounting Pronouncements
Relevant standards that were recently issued but not yet adopted as of June 30, 2020:
2021:
For public entities that meet the definition of an SEC filer (excluding smaller reporting entities) the guidance is effective for annual reporting periods beginning after December 15, 2019. Early adoption is permitted for all entities as of the fiscal years beginning after December 15, 2018. For all other entities, the guidance is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years.
Relevant standards that were adopted during the six months ended June 30, 20192021:
In accordanceOther–Internal-use software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract
ASC 842 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The standard represents a wholesale change to lease accounting and requires all leasesretrospective or prospective application with a term longer than 12 months to be reported on the balance sheet through recognition of a right-of-use asset and a corresponding liability for future lease obligations. Leases will be classified as financing or operating, with classification affecting the pattern and grouping of expenses in the income statement. The standard also requires extensive disclosures for assets, expenses, and cash flows associated with leases, as well as a maturity analysis of lease liabilities. In November 2019, FASB issued guidance delaying the effective date for all entities except for public business entities that are SEC filers. For public business entities the guidance is effective for fiscal year beginning after December 15, 2018, for all other entities the guidance is effective for fiscal year beginning after December 15, 2020, early adoption is permitted for all entities.
certain conditions. The Company early adopted this standard on January 1, 2020. In accordance with ASU 2018-11, the Company used the effective date as the date of application and, therefore, periods prior to January 1, 2020, weredid not restated. The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients”, which permits the Company to not reassess prior conclusions about lease identification, lease classification, and initial direct costs under ASC 842. The Company also elected the hindsight practical expedient and, therefore, used the hindsight knowledge as of the effective date when determining lease terms and impairment. In addition, the Company elected the practical expedient to not separate lease and non-lease components and, therefore, accounts for each separate lease component of a contract and its associated non-lease components as a single lease component. The new standard also provides a practical expedient for an entity’s ongoing accounting relating to leases of 12 months or less (“short-term leases”). The Company has elected the short-term lease recognition exemption for all leases that qualify and will not recognize right-of-use assets and lease liabilities for those leases.elect retrospective application. The adoption of this standard resulted in the recognition of right-of-use asset and lease liabilities on the Company’s balance sheet for its real estate and equipment operating leases of $92.9 million and $96.4 million, respectively. The Company recorded an adjustment to remove the Company’s existing deferred rent liability of approximately $3.5 million. The Company also recognized a transition adjustment to the opening balance of retained earnings on January 1, 2020 amounting to $1.1 million, net of tax, related to an incremental accrued rent adjustment calculated as a result of electing the hindsight practical expedient. The amount of right-of-use assets were determined based upon the present value of the remaining minimal rental payments under current leasing standards for existing operating leases, adjusted for options that the Company is reasonably certain to exercise, less accrued rent as of December 31, 2019 and the incremental accrued rent as a result of electing the hindsight practical expedient. Lastly, the amount of lease liabilities was determined based upon the present value of the remaining minimum rental payments under current leasing standards for existing operating leases, adjusted for options that the Company is reasonably certain to exercise.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). This update modifies the disclosure requirements related to the fair value measurements in Topic 820. Specifically, this update amends disclosure around changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used in Level 3 fair value measurements and the description of measurement uncertainty. The Company adopted ASU 2018-13 on January 1, 2020. This update did not have a material impact on itsthe Company’s consolidated financial statements.
In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes (“ASU 2018-16”). This update permits the use of the Overnight Index Swap (“OIS”) rate based on the Secured Overnight Financing Rate (“SOFR”) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815. The amendments should be adopted on a prospective basis for qualifying new or re-structured hedging relationships entered into on or after the date of adoption. The Company adopted this standard on January 1, 2020. This update did not have a material impact on its consolidated financial statements
Trading Securities
The Company had trading securities of $0 and $1.0 million as of June 30, 2020 and December 31, 2019, respectively. The reduction in the Company’s trading portfolio was due to the Company’s exit of its capital markets business during the year ended December 31, 2019.
As of and for the six months ended June 30, 2020 | ||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In Thousands) | ||||||||||||||||
Debt securities: | ||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | 1,207,274 | $ | 44,750 | $ | (225 | ) | $ | 1,251,799 | |||||||
U.S. Treasury securities | 60,189 | 747 | — | 60,936 | ||||||||||||
State and municipal bonds and obligations | 264,615 | 16,725 | — | 281,340 | ||||||||||||
Qualified zone academy bond | 6,209 | 70 | — | 6,279 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,538,287 | $ | 62,292 | $ | (225 | ) | $ | 1,600,354 | ||||||||
|
|
|
|
|
|
|
|
As of and for the year ended December 31, 2019 | ||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | |||||||||||||
(In Thousands) | ||||||||||||||||
Debt securities: | ||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | 1,151,305 | $ | 17,208 | $ | (545 | ) | $ | 1,167,968 | |||||||
U.S. Treasury securities | 50,155 | 265 | — | 50,420 | ||||||||||||
State and municipal bonds and obligations | 272,582 | 10,959 | (3 | ) | 283,538 | |||||||||||
Qualified zone academy bond | 6,155 | 155 | — | 6,310 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 1,480,197 | $ | 28,587 | $ | (548 | ) | $ | 1,508,236 | ||||||||
|
|
|
|
|
|
|
|
As of June 30, 2021 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | 3,480,643 | $ | 22,240 | $ | (24,354) | $ | 3,478,529 | |||||||||||||||
Government-sponsored commercial mortgage-backed securities | 183,062 | 66 | (1,333) | 181,795 | |||||||||||||||||||
U.S. Agency bonds | 860,575 | 0 | (19,570) | 841,005 | |||||||||||||||||||
U.S. Treasury securities | 69,401 | 23 | (93) | 69,331 | |||||||||||||||||||
State and municipal bonds and obligations | 259,935 | 18,186 | 0 | 278,121 | |||||||||||||||||||
$ | 4,853,616 | $ | 40,515 | $ | (45,350) | $ | 4,848,781 |
As of December 31, 2020 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | 2,106,658 | $ | 42,142 | $ | 0 | $ | 2,148,800 | |||||||||||||||
Government-sponsored commercial mortgage-backed securities | 17,054 | 27 | 0 | 17,081 | |||||||||||||||||||
U.S. Agency bonds | 670,468 | 113 | (3,872) | 666,709 | |||||||||||||||||||
U.S. Treasury securities | 70,106 | 263 | 0 | 70,369 | |||||||||||||||||||
State and municipal bonds and obligations | 260,898 | 20,004 | 0 | 280,902 | |||||||||||||||||||
$ | 3,125,184 | $ | 62,549 | $ | (3,872) | $ | 3,183,861 |
As of June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | Due after one year to five years | Due after five to ten years | Due after ten years | Total | ||||||||||||||||||||||||||||||||||||
Amortized | Fair Value | Amortized | Fair Value | Amortized | Fair Value | Amortized | Fair Value | Amortized | Fair Value | |||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | — | $ | — | $ | 24,413 | �� | $ | 25,733 | $ | 150,726 | $ | 157,290 | $ | 1,032,135 | $ | 1,068,776 | $ | 1,207,274 | $ | 1,251,799 | |||||||||||||||||||
U.S. Treasury securities | 50,070 | 50,778 | 10,119 | 10,158 | — | — | — | — | 60,189 | 60,936 | ||||||||||||||||||||||||||||||
State and municipal bonds and obligations | 407 | 411 | 18,205 | 18,966 | 73,890 | 77,868 | 172,113 | 184,095 | 264,615 | 281,340 | ||||||||||||||||||||||||||||||
Qualified zone academy bond | 6,209 | 6,279 | — | — | — | — | — | — | 6,209 | 6,279 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total available for sale securities | $ | 56,686 | $ | 57,468 | $ | 52,737 | $ | 54,857 | $ | 224,616 | $ | 235,158 | $ | 1,204,248 | $ | 1,252,871 | $ | 1,538,287 | $ | 1,600,354 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | Due after one year to five years | Due after five to ten years | Due after ten years | Total | ||||||||||||||||||||||||||||||||||||
Amortized | Fair Value | Amortized | Fair Value | Amortized | Fair Value | Amortized | Fair Value | Amortized | Fair Value | |||||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | — | $ | — | $ | 8,139 | $ | 8,464 | $ | 199,428 | $ | 203,706 | $ | 943,738 | $ | 955,798 | $ | 1,151,305 | $ | 1,167,968 | ||||||||||||||||||||
U.S. Treasury securities | 40 | 40 | 50,115 | 50,380 | — | — | — | — | 50,155 | 50,420 | ||||||||||||||||||||||||||||||
State and municipal bonds and obligations | 381 | 381 | 8,889 | 9,109 | 77,227 | 79,504 | 186,085 | 194,544 | 272,582 | 283,538 | ||||||||||||||||||||||||||||||
Qualified zone academy bond | 6,155 | 6,310 | — | — | — | — | — | — | 6,155 | 6,310 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total available for sale securities | $ | 6,576 | $ | 6,731 | $ | 67,143 | $ | 67,953 | $ | 276,655 | $ | 283,210 | $ | 1,129,823 | $ | 1,150,342 | $ | 1,480,197 | $ | 1,508,236 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Due in one year or less | Due after one year to five years | Due after five to ten years | Due after ten years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | 0 | $ | 0 | $ | 18,156 | $ | 19,323 | $ | 593,853 | $ | 597,546 | $ | 2,868,634 | $ | 2,861,660 | $ | 3,480,643 | $ | 3,478,529 | |||||||||||||||||||||||||||||||||||||||
Government-sponsored commercial mortgage-backed securities | 0 | 0 | 24,038 | 23,781 | 159,024 | 158,014 | 0 | 0 | 183,062 | 181,795 | |||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Agency bonds | 0 | 0 | 199,796 | 196,383 | 660,779 | 644,622 | 0 | 0 | 860,575 | 841,005 | |||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 10,048 | 10,071 | 59,353 | 59,260 | 0 | 0 | 0 | 0 | 69,401 | 69,331 | |||||||||||||||||||||||||||||||||||||||||||||||||
State and municipal bonds and obligations | 485 | 486 | 28,682 | 29,781 | 72,515 | 76,046 | 158,253 | 171,808 | 259,935 | 278,121 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 10,533 | $ | 10,557 | $ | 330,025 | $ | 328,528 | $ | 1,486,171 | $ | 1,476,228 | $ | 3,026,887 | $ | 3,033,468 | $ | 4,853,616 | $ | 4,848,781 |
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Due in one year or less | Due after one year to five years | Due after five to ten years | Due after ten years | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | 0 | $ | 0 | $ | 46,293 | $ | 48,925 | $ | 96,338 | $ | 100,278 | $ | 1,964,027 | $ | 1,999,597 | $ | 2,106,658 | $ | 2,148,800 | |||||||||||||||||||||||||||||||||||||||
Government-sponsored commercial mortgage-backed securities | 0 | 0 | 0 | 0 | 17,054 | 17,081 | 0 | 0 | 17,054 | 17,081 | |||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Agency bonds | 0 | 0 | 99,772 | 99,834 | 570,696 | 566,875 | 0 | 0 | 670,468 | 666,709 | |||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 50,023 | 50,251 | 20,083 | 20,118 | 0 | 0 | 0 | 0 | 70,106 | 70,369 | |||||||||||||||||||||||||||||||||||||||||||||||||
State and municipal bonds and obligations | 406 | 408 | 20,511 | 21,431 | 74,980 | 79,635 | 165,001 | 179,428 | 260,898 | 280,902 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 50,429 | $ | 50,659 | $ | 186,659 | $ | 190,308 | $ | 759,068 | $ | 763,869 | $ | 2,129,028 | $ | 2,179,025 | $ | 3,125,184 | $ | 3,183,861 |
2020.
Information pertaining to available for sale securities with gross unrealized losses as of June 30, 20202021 and December 31, 2019,2020, which the Company has not deemed to be OTTI, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:
June 30, 2020 | ||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||
# of Holdings | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
(Dollars In Thousands) | ||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | 1 | 225 | 100,685 | — | — | 225 | 100,685 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1 | $ | 225 | $ | 100,685 | $ | — | $ | — | $ | 225 | $ | 100,685 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||
# of Holdings | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
(Dollars In Thousands) | ||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | 1 | $ | 545 | $ | 74,550 | $ | — | $ | — | $ | 545 | $ | 74,550 | |||||||||||||||
State and municipal bonds and obligations | 2 | 3 | 850 | — | — | 3 | 850 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
3 | $ | 548 | $ | 75,400 | $ | — | $ | — | $ | 548 | $ | 75,400 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||||||||
# of Holdings | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | 20 | $ | 24,354 | $ | 2,178,499 | $ | 0 | $ | 0 | $ | 24,354 | $ | 2,178,499 | ||||||||||||||||||||||||||||
Government-sponsored commercial mortgage-backed securities | 8 | 1,333 | 161,684 | 0 | 0 | 1,333 | 161,684 | ||||||||||||||||||||||||||||||||||
U.S. Agency bonds | 13 | 19,570 | 841,005 | 0 | 0 | 19,570 | 841,005 | ||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 2 | 93 | 59,262 | 0 | 0 | 93 | 59,262 | ||||||||||||||||||||||||||||||||||
43 | $ | 45,350 | $ | 3,240,450 | $ | 0 | $ | 0 | $ | 45,350 | $ | 3,240,450 |
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||||||||
# of Holdings | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
U.S. Agency bonds | 6 | $ | 3,872 | $ | 416,824 | $ | 0 | $ | 0 | $ | 3,872 | $ | 416,824 | ||||||||||||||||||||||||||||
6 | $ | 3,872 | $ | 416,824 | $ | 0 | $ | 0 | $ | 3,872 | $ | 416,824 |
|
|
2020:
At June 30, | At December 31, | |||||||
2020 | 2019 | |||||||
(In thousands) | ||||||||
Commercial and industrial | $ | 2,271,700 | $ | 1,642,184 | ||||
Commercial real estate | 3,584,358 | 3,535,441 | ||||||
Commercial construction | 282,246 | 273,774 | ||||||
Business banking | 1,234,961 | 771,498 | ||||||
Residential real estate | 1,400,855 | 1,428,630 | ||||||
Consumer home equity | 905,484 | 933,088 | ||||||
Other consumer | 334,734 | 402,431 | ||||||
|
|
|
| |||||
Gross loans before unamortized premiums, unearned discounts and deferred fees | 10,014,338 | 8,987,046 | ||||||
|
|
|
| |||||
Allowance for credit losses | (116,636 | ) | (82,297 | ) | ||||
Unamortized premiums, net of unearned discounts and deferred fees | (34,722 | ) | (5,565 | ) | ||||
|
|
|
| |||||
Loans after the allowance for credit losses, unamortized premiums, unearned discounts and deferred fees | $ | 9,862,980 | $ | 8,899,184 | ||||
|
|
|
|
At June 30, At December 31, 2021 2020 (In thousands) Commercial and industrial $ 1,740,679 $ 1,995,016 Commercial real estate 3,775,771 3,573,630 Commercial construction 237,927 305,708 Business banking 1,339,852 1,339,164 Residential real estate 1,457,498 1,370,957 Consumer home equity 834,938 868,270 Other consumer (1) 234,410 277,780 Gross loans before unamortized premiums, unearned discounts and deferred fees 9,621,075 9,730,525 Allowance for loan losses (105,637) (113,031) Unamortized premiums, net of unearned discounts and deferred fees (29,739) (23,536) Loans after the allowance for credit losses, unamortized premiums, unearned discounts and deferred fees $ 9,485,699 $ 9,593,958
The balance of funds borrowed from the FHLBB were $14.3 million and $14.6 million at June 30, 2021 and December 31, 2020, respectively.
The following table summarizes the changes in the allowance for loan losses for the periods indicated:
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Balance at the beginning of period | $ | 109,138 | $ | 82,493 | $ | 82,297 | $ | 80,655 | ||||||||
Loans charged off | (1,264 | ) | (2,563 | ) | (3,607 | ) | (4,487 | ) | ||||||||
Recoveries | 162 | 1,232 | 746 | 1,994 | ||||||||||||
Provision charged to expense | 8,600 | 1,500 | 37,200 | 4,500 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance at end of period | $ | 116,636 | $ | 82,662 | $ | 116,636 | $ | 82,662 | ||||||||
|
|
|
|
|
|
|
|
The following tables summarize the changes in the allowance for loan losses by loan category and bifurcatesfor the periods indicated:
For the Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 25,406 | $ | 55,138 | $ | 3,350 | $ | 13,504 | $ | 6,235 | $ | 3,576 | $ | 3,498 | $ | 373 | $ | 111,080 | |||||||||||||||||||||||||||||||||||
Charge-offs | (550) | 0 | 0 | (1,838) | 0 | 0 | (275) | 0 | (2,663) | ||||||||||||||||||||||||||||||||||||||||||||
Recoveries | 13 | 4 | 0 | 291 | 17 | 3 | 192 | 0 | 520 | ||||||||||||||||||||||||||||||||||||||||||||
(Release of) provision | (2,273) | (2,383) | 96 | 748 | 226 | 9 | 211 | 66 | (3,300) | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 22,596 | $ | 52,759 | $ | 3,446 | $ | 12,705 | $ | 6,478 | $ | 3,588 | $ | 3,626 | $ | 439 | $ | 105,637 |
For the Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 30,531 | $ | 49,227 | $ | 4,712 | $ | 10,181 | $ | 6,228 | $ | 3,913 | $ | 4,019 | $ | 327 | $ | 109,138 | |||||||||||||||||||||||||||||||||||
Charge-offs | (27) | (24) | 0 | (1,198) | 0 | 0 | (15) | 0 | (1,264) | ||||||||||||||||||||||||||||||||||||||||||||
Recoveries | 58 | 5 | 0 | 27 | 13 | 8 | 51 | 0 | 162 | ||||||||||||||||||||||||||||||||||||||||||||
Provision (release of) | 2,667 | 5,020 | 104 | 795 | 328 | (46) | (293) | 25 | 8,600 | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 33,229 | $ | 54,228 | $ | 4,816 | $ | 9,805 | $ | 6,569 | $ | 3,875 | $ | 3,762 | $ | 352 | $ | 116,636 |
For the Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 26,617 | $ | 54,569 | $ | 4,553 | $ | 13,152 | $ | 6,435 | $ | 3,744 | $ | 3,467 | $ | 494 | $ | 113,031 | |||||||||||||||||||||||||||||||||||
Charge-offs | (550) | (234) | 0 | (3,222) | 0 | 0 | (639) | 0 | (4,645) | ||||||||||||||||||||||||||||||||||||||||||||
Recoveries | 22 | 4 | 0 | 656 | 27 | 74 | 348 | 0 | 1,131 | ||||||||||||||||||||||||||||||||||||||||||||
(Release of) provision | (3,493) | (1,580) | (1,107) | 2,119 | 16 | (230) | 450 | (55) | (3,880) | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 22,596 | $ | 52,759 | $ | 3,446 | $ | 12,705 | $ | 6,478 | $ | 3,588 | $ | 3,626 | $ | 439 | $ | 105,637 |
For the Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 20,919 | $ | 34,730 | $ | 3,424 | $ | 8,260 | $ | 6,380 | $ | 4,027 | $ | 4,173 | $ | 384 | $ | 82,297 | |||||||||||||||||||||||||||||||||||
Charge-offs | (27) | (24) | 0 | (2,535) | 0 | (473) | (548) | 0 | (3,607) | ||||||||||||||||||||||||||||||||||||||||||||
Recoveries | 380 | 6 | 0 | 154 | 73 | 22 | 111 | 0 | 746 | ||||||||||||||||||||||||||||||||||||||||||||
Provision (release of) | 11,957 | 19,516 | 1,392 | 3,926 | 116 | 299 | 26 | (32) | 37,200 | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | 33,229 | $ | 54,228 | $ | 4,816 | $ | 9,805 | $ | 6,569 | $ | 3,875 | $ | 3,762 | $ | 352 | $ | 116,636 |
For the Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | ||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 30,531 | $ | 49,227 | $ | 4,712 | $ | 10,181 | $ | 6,228 | $ | 3,913 | $ | 4,019 | $ | 327 | $ | 109,138 | ||||||||||||||||||
Charge-offs | (27 | ) | (24 | ) | — | (1,198 | ) | — | — | (15 | ) | — | (1,264 | ) | ||||||||||||||||||||||
Recoveries | 58 | 5 | — | 27 | 13 | 8 | 51 | — | 162 | |||||||||||||||||||||||||||
Provision (benefit) | 2,667 | 5,020 | 104 | 795 | 328 | (46 | ) | (293 | ) | 25 | 8,600 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance | $ | 33,229 | $ | 54,228 | $ | 4,816 | $ | 9,805 | $ | 6,569 | $ | 3,875 | $ | 3,762 | $ | 352 | $ | 116,636 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
For the Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | ||||||||||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 20,844 | $ | 33,170 | $ | 4,225 | $ | 8,175 | $ | 7,169 | $ | 4,105 | $ | 4,390 | $ | 415 | $ | 82,493 | ||||||||||||||||||
Charge-offs | (272 | ) | (169 | ) | — | (1,371 | ) | (46 | ) | (124 | ) | (581 | ) | — | (2,563 | ) | ||||||||||||||||||||
Recoveries | 908 | 2 | — | 193 | 12 | 20 | 97 | — | 1,232 | |||||||||||||||||||||||||||
Provision (benefit) | (651 | ) | 583 | 537 | 1,057 | (335 | ) | 96 | 418 | (205 | ) | 1,500 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance | $ | 20,829 | $ | 33,586 | $ | 4,762 | $ | 8,054 | $ | 6,800 | $ | 4,097 | $ | 4,324 | $ | 210 | $ | 82,662 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June, 2020 | ||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 20,919 | $ | 34,730 | $ | 3,424 | $ | 8,260 | $ | 6,380 | $ | 4,027 | $ | 4,173 | $ | 384 | $ | 82,297 | ||||||||||||||||||
Charge-offs | (27 | ) | (24 | ) | — | (2,535 | ) | — | (473 | ) | (548 | ) | — | (3,607 | ) | |||||||||||||||||||||
Recoveries | 380 | 6 | — | 154 | 73 | 22 | 111 | — | 746 | |||||||||||||||||||||||||||
Provision (benefit) | 11,957 | 19,516 | 1,392 | 3,926 | 116 | 299 | 26 | (32 | ) | 37,200 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance | $ | 33,229 | $ | 54,228 | $ | 4,816 | $ | 9,805 | $ | 6,569 | $ | 3,875 | $ | 3,762 | $ | 352 | $ | 116,636 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 3,028 | $ | 230 | $ | 22 | $ | 578 | $ | 1,639 | $ | 277 | $ | — | $ | — | $ | 5,774 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance: acquired with deteriorated credit quality | $ | 1,732 | $ | 1,066 | $ | — | $ | — | $ | 293 | $ | — | $ | — | $ | — | $ | 3,091 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 28,469 | $ | 52,932 | $ | 4,794 | $ | 9,227 | $ | 4,637 | $ | 3,598 | $ | 3,762 | $ | 352 | $ | 107,771 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Loans ending balance: | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 18,864 | $ | 4,920 | $ | 280 | $ | 20,301 | $ | 28,301 | $ | 5,947 | $ | 22 | $ | — | $ | 78,635 | ||||||||||||||||||
Acquired with deteriorated credit quality | 3,572 | 5,413 | — | — | 3,426 | — | — | — | 12,411 | |||||||||||||||||||||||||||
Collectively evaluated for impairment | 2,249,264 | 3,574,025 | 281,966 | 1,214,660 | 1,369,128 | 899,537 | 334,712 | — | 9,923,292 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total loans by group | $ | 2,271,700 | $ | 3,584,358 | $ | 282,246 | $ | 1,234,961 | $ | 1,400,855 | $ | 905,484 | $ | 334,734 | $ | — | $ | 10,014,338 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 19,321 | $ | 32,400 | $ | 4,606 | $ | 8,167 | $ | 7,059 | $ | 4,113 | $ | 4,600 | $ | 389 | $ | 80,655 | ||||||||||||||||||
Charge-offs | (272 | ) | (169 | ) | — | (2,810 | ) | (63 | ) | (124 | ) | (1,049 | ) | — | (4,487 | ) | ||||||||||||||||||||
Recoveries | 1,368 | 4 | — | 320 | 71 | 28 | 203 | — | 1,994 | |||||||||||||||||||||||||||
Provision (benefit) | 412 | 1,351 | 156 | 2,377 | (267 | ) | 80 | 570 | (179 | ) | 4,500 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance | $ | 20,829 | $ | 33,586 | 4,762 | $ | 8,054 | $ | 6,800 | $ | 4,097 | $ | 4,324 | $ | 210 | $ | 82,662 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | 1,918 | $ | 40 | $ | — | $ | 198 | $ | 1,663 | $ | 296 | $ | — | $ | — | $ | 4,115 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance: acquired with deteriorated credit quality | $ | 227 | $ | 85 | $ | — | $ | — | $ | 213 | $ | — | $ | — | $ | — | $ | 525 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | 18,684 | $ | 33,461 | $ | 4,762 | $ | 7,856 | $ | 4,924 | $ | 3,801 | $ | 4,324 | $ | 210 | $ | 78,022 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Loans ending balance: | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 21,098 | $ | 10,421 | $ | — | $ | 9,043 | $ | 27,287 | $ | 4,642 | $ | — | $ | — | $ | 72,491 | ||||||||||||||||||
Acquired with deteriorated credit quality | 4,109 | 7,591 | — | — | 3,405 | — | — | — | 15,105 | |||||||||||||||||||||||||||
Collectively evaluated for impairment | 1,726,510 | 3,331,951 | 310,860 | 736,417 | 1,414,741 | 950,713 | 470,858 | — | 8,942,050 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total loans by group | $ | 1,751,717 | $ | 3,349,963 | $ | 310,860 | $ | 745,460 | $ | 1,445,433 | $ | 955,355 | $ | 470,858 | $ | — | $ | 9,029,646 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 Commercial
and
IndustrialCommercial
Real EstateCommercial
ConstructionBusiness
BankingResidential
Real EstateConsumer
Home EquityOther
ConsumerOther Total (In thousands) Allowance for loan losses ending balance: Individually evaluated for impairment $ 4,544 $ 0 $ 0 $ 937 $ 1,624 $ 263 $ 0 $ 0 $ 7,368 Acquired with deteriorated credit quality 0 249 0 0 293 0 0 0 542 Collectively evaluated for impairment 18,052 52,510 3,446 11,768 4,561 3,325 3,626 439 97,727 Total allowance for loan losses by group $ 22,596 $ 52,759 $ 3,446 $ 12,705 $ 6,478 $ 3,588 $ 3,626 $ 439 $ 105,637 Loans ending balance: Individually evaluated for impairment $ 20,266 $ 4,051 $ 0 $ 18,179 $ 25,091 $ 3,954 $ 24 $ 0 $ 71,565 Acquired with deteriorated credit quality 1,397 249 0 0 2,880 0 0 0 4,526 Collectively evaluated for impairment 1,719,016 3,771,471 237,927 1,321,673 1,429,527 830,984 234,386 0 9,544,984 Total loans by group $ 1,740,679 $ 3,775,771 $ 237,927 $ 1,339,852 $ 1,457,498 $ 834,938 $ 234,410 $ 0 $ 9,621,075
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Residential Real Estate | Consumer Home Equity | Other Consumer | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses ending balance: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 4,555 | $ | 210 | $ | 0 | $ | 1,435 | $ | 1,565 | $ | 289 | $ | 0 | $ | 0 | $ | 8,054 | |||||||||||||||||||||||||||||||||||
Acquired with deteriorated credit quality | 1,283 | 822 | 0 | 0 | 327 | 0 | 0 | 0 | 2,432 | ||||||||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | 20,779 | 53,537 | 4,553 | 11,717 | 4,543 | 3,455 | 3,467 | 494 | 102,545 | ||||||||||||||||||||||||||||||||||||||||||||
Total allowance for loan losses by group | $ | 26,617 | $ | 54,569 | $ | 4,553 | $ | 13,152 | $ | 6,435 | $ | 3,744 | $ | 3,467 | $ | 494 | $ | 113,031 | |||||||||||||||||||||||||||||||||||
Loans ending balance: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 17,343 | $ | 4,435 | $ | 0 | $ | 21,901 | $ | 27,056 | $ | 4,845 | $ | 29 | $ | 0 | $ | 75,609 | |||||||||||||||||||||||||||||||||||
Acquired with deteriorated credit quality | 3,432 | 2,749 | 0 | 0 | 3,116 | 0 | 0 | 0 | 9,297 | ||||||||||||||||||||||||||||||||||||||||||||
Collectively evaluated for impairment | 1,974,241 | 3,566,446 | 305,708 | 1,317,263 | 1,340,785 | 863,425 | 277,751 | 0 | 9,645,619 | ||||||||||||||||||||||||||||||||||||||||||||
Total loans by group | $ | 1,995,016 | $ | 3,573,630 | $ | 305,708 | $ | 1,339,164 | $ | 1,370,957 | $ | 868,270 | $ | 277,780 | $ | 0 | $ | 9,730,525 |
Commercial real estate: Collateral values are established by independent third-party appraisals and evaluations. Primary repayment sources include operating income generated by the real estate, permanent debt refinancing, sale of the real estate and, secondarily, by liquidation of the collateral. The Company often obtains personal guarantees from individuals holding material ownership in the borrowing equity.
entity.
to $350,000. Loans
1-6W
7
8
9
Probable)
10
As of June 30, 2020 | ||||||||||||||||||||||||
Category | Risk Rating | Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Total | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Unrated | 0 | $ | 753,943 | $ | 42,919 | $ | 332 | $ | 900,296 | $ | 1,697,490 | |||||||||||||
Pass | 1-6W | 1,269,284 | 3,211,054 | 248,400 | 291,751 | 5,020,489 | ||||||||||||||||||
Special mention | 7 | 180,485 | 297,016 | 29,671 | 32,406 | 539,578 | ||||||||||||||||||
Substandard | 8 | 51,338 | 30,654 | 3,843 | 10,508 | 96,343 | ||||||||||||||||||
Doubtful | 9 | 16,650 | 2,715 | — | — | 19,365 | ||||||||||||||||||
Loss | 10 | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | 2,271,700 | $ | 3,584,358 | $ | 282,246 | $ | 1,234,961 | $ | 7,373,265 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||
Category | Risk Rating | Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Total | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Unrated | 0 | $ | 150,226 | $ | 48,266 | $ | 331 | $ | 445,201 | $ | 644,024 | |||||||||||||
Pass | 1-6W | 1,405,902 | 3,436,267 | 260,615 | 315,194 | 5,417,978 | ||||||||||||||||||
Special mention | 7 | 24,171 | 28,606 | 9,438 | 2,006 | 64,221 | ||||||||||||||||||
Substandard | 8 | 42,894 | 21,635 | 3,390 | 8,207 | 76,126 | ||||||||||||||||||
Doubtful | 9 | 18,991 | 667 | — | 890 | 20,548 | ||||||||||||||||||
Loss | 10 | — | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | 1,642,184 | $ | 3,535,441 | $ | 273,774 | $ | 771,498 | $ | 6,222,897 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | ||||||||||||||||||||||||||||||||
Category | Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Total | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Unrated | $ | 434,766 | $ | 5,105 | $ | 61 | $ | 913,151 | $ | 1,353,083 | ||||||||||||||||||||||
Pass | 1,201,952 | 3,492,582 | 218,073 | 346,198 | 5,258,805 | |||||||||||||||||||||||||||
Special mention | 48,853 | 127,856 | 13,703 | 53,920 | 244,332 | |||||||||||||||||||||||||||
Substandard | 39,751 | 150,177 | 6,090 | 25,299 | 221,317 | |||||||||||||||||||||||||||
Doubtful | 15,357 | 51 | 0 | 1,284 | 16,692 | |||||||||||||||||||||||||||
Loss | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Total | $ | 1,740,679 | $ | 3,775,771 | $ | 237,927 | $ | 1,339,852 | $ | 7,094,229 |
As of December 31, 2020 | ||||||||||||||||||||||||||||||||
Category | Commercial and Industrial | Commercial Real Estate | Commercial Construction | Business Banking | Total | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Unrated | $ | 655,346 | $ | 6,585 | $ | 0 | $ | 918,921 | $ | 1,580,852 | ||||||||||||||||||||||
Pass | 1,199,522 | 3,256,697 | 280,792 | 336,657 | 5,073,668 | |||||||||||||||||||||||||||
Special mention | 78,117 | 134,562 | 10,330 | 57,092 | 280,101 | |||||||||||||||||||||||||||
Substandard | 47,525 | 173,308 | 14,586 | 24,788 | 260,207 | |||||||||||||||||||||||||||
Doubtful | 14,506 | 2,478 | 0 | 1,706 | 18,690 | |||||||||||||||||||||||||||
Loss | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Total | $ | 1,995,016 | $ | 3,573,630 | $ | 305,708 | $ | 1,339,164 | $ | 7,213,518 |
NonaccrualNon-accrual loans may be returned to an accrual status when principal and interest payments are no longer delinquent, and the risk characteristics of the loan have improved to the extent that there no longer exists a concern as to the collectability of principal and interest. Loans are considered past due based upon the number of days delinquent according to their contractual terms. Specifically, nonaccrual residential loans that have been restructured must perform for a period of six months before being considered for accrual status.
As of June 30, | As of December 31, | |||||||
2020 | 2019 | |||||||
(In Thousands) | ||||||||
Commercial and industrial | $ | 13,435 | $ | 21,471 | ||||
Commercial real estate | 1,399 | 4,120 | ||||||
Commercial construction | 281 | — | ||||||
Business banking | 16,158 | 8,502 | ||||||
Residential real estate | 11,693 | 5,598 | ||||||
Consumer home equity | 6,403 | 2,137 | ||||||
Other consumer | 2,971 | 623 | ||||||
|
|
|
| |||||
Total non-accrual loans | $ | 52,340 | $ | 42,451 | ||||
|
|
|
|
As of June 30, | As of December 31, | ||||||||||
2021 | 2020 | ||||||||||
(In thousands) | |||||||||||
Commercial and industrial | $ | 14,591 | $ | 11,714 | |||||||
Commercial real estate | 531 | 915 | |||||||||
Business banking | 14,234 | 17,430 | |||||||||
Residential real estate | 6,445 | 6,815 | |||||||||
Consumer home equity | 3,592 | 3,602 | |||||||||
Other consumer | 514 | 529 | |||||||||
Total non-accrual loans | $ | 39,907 | $ | 41,005 |
As of June 30, 2020 | ||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total Loans | Recorded Investment > 90 Days and Accruing | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Commercial and industrial | $ | 681 | $ | 671 | $ | 1,508 | $ | 2,860 | $ | 2,268,840 | $ | 2,271,700 | $ | 471 | ||||||||||||||
Commercial real estate | — | 257 | 3,045 | 3,302 | 3,581,056 | 3,584,358 | 2,331 | |||||||||||||||||||||
Commercial construction | — | — | 280 | 280 | 281,966 | 282,246 | — | |||||||||||||||||||||
Business banking | 4,541 | 4,160 | 13,021 | 21,722 | 1,213,239 | 1,234,961 | — | |||||||||||||||||||||
Residential real estate | 26,859 | 2,084 | 8,981 | 37,924 | 1,362,931 | 1,400,855 | 244 | |||||||||||||||||||||
Consumer home equity | 3,413 | 1,971 | 4,511 | 9,895 | 895,589 | 905,484 | 9 | |||||||||||||||||||||
Other consumer | 2,992 | 1,734 | 2,971 | 7,697 | 327,037 | 334,734 | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | $ | 38,486 | $ | 10,877 | $ | 34,317 | $ | 83,680 | $ | 9,930,658 | $ | 10,014,338 | $ | 3,055 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019 | As of June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total Loans | Recorded Investment >90 Days and Accruing | 30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total Loans | Recorded Investment > 90 Days and Accruing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 1,407 | $ | — | $ | 963 | $ | 2,370 | $ | 1,639,814 | $ | 1,642,184 | $ | — | Commercial and industrial | $ | 0 | $ | 267 | $ | 647 | $ | 914 | $ | 1,739,765 | $ | 1,740,679 | $ | 275 | ||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 1,290 | 100 | 1,856 | 3,246 | 3,532,195 | 3,535,441 | 1,315 | Commercial real estate | 1,896 | 0 | 1,414 | 3,310 | 3,772,461 | 3,775,771 | 1,164 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial Construction | — | — | — | 273,774 | 273,774 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial construction | Commercial construction | 0 | 0 | 0 | 0 | 237,927 | 237,927 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business banking | 3,031 | 763 | 6,095 | 9,889 | 761,609 | 771,498 | — | Business banking | 4,004 | 1,902 | 6,609 | 12,515 | 1,327,337 | 1,339,852 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate | 14,030 | 2,563 | 3,030 | 19,623 | 1,409,007 | 1,428,630 | — | Residential real estate | 11,706 | 1,330 | 4,631 | 17,667 | 1,439,831 | 1,457,498 | 277 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer home equity | 2,497 | 430 | 1,636 | 4,563 | 928,525 | 933,088 | 9 | Consumer home equity | 610 | 403 | 3,408 | 4,421 | 830,517 | 834,938 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | 3,451 | 514 | 579 | 4,544 | 397,887 | 402,431 | — | Other consumer | 1,074 | 438 | 513 | 2,025 | 232,385 | 234,410 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 25,706 | $ | 4,370 | $ | 14,159 | $ | 44,235 | $ | 8,942,811 | $ | 8,987,046 | $ | 1,324 | Total | $ | 19,290 | $ | 4,340 | $ | 17,222 | $ | 40,852 | $ | 9,580,223 | $ | 9,621,075 | $ | 1,725 | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 or More Days Past Due | Total Past Due | Current | Total Loans | Recorded Investment >90 Days and Accruing | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 4 | $ | 268 | $ | 1,924 | $ | 2,196 | $ | 1,992,820 | $ | 1,995,016 | $ | 848 | |||||||||||||||||||||||||||
Commercial real estate | 0 | 556 | 1,545 | 2,101 | 3,571,529 | 3,573,630 | 1,111 | ||||||||||||||||||||||||||||||||||
Commercial construction | 0 | 0 | 0 | 0 | 305,708 | 305,708 | 0 | ||||||||||||||||||||||||||||||||||
Business banking | 5,279 | 3,311 | 10,196 | 18,786 | 1,320,378 | 1,339,164 | 0 | ||||||||||||||||||||||||||||||||||
Residential real estate | 9,184 | 2,517 | 4,904 | 16,605 | 1,354,352 | 1,370,957 | 279 | ||||||||||||||||||||||||||||||||||
Consumer home equity | 1,806 | 364 | 3,035 | 5,205 | 863,065 | 868,270 | 9 | ||||||||||||||||||||||||||||||||||
Other consumer | 1,978 | 234 | 517 | 2,729 | 275,051 | 277,780 | 0 | ||||||||||||||||||||||||||||||||||
Total | $ | 18,251 | $ | 7,250 | $ | 22,121 | $ | 47,622 | $ | 9,682,903 | $ | 9,730,525 | $ | 2,247 |
The following table showstables show the TDR loans on accrual and nonaccrualnon-accrual status as of the dates indicated:
As of June 30, 2020 | ||||||||||||||||||||||||
TDRs on Accrual Status | TDRs on Nonaccrual Status | Total TDRs | ||||||||||||||||||||||
Balance of | Number of | Balance of | Number of | Balance of | ||||||||||||||||||||
Number of Loans | Loans | Loans | Loans | Loans | Loans | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | 2 | $ | 5,429 | 10 | $ | 11,259 | 12 | $ | 16,688 | |||||||||||||||
Commercial real estate | 1 | 3,521 | 2 | 707 | 3 | 4,228 | ||||||||||||||||||
Business banking | 5 | 4,143 | 2 | 224 | 7 | 4,367 | ||||||||||||||||||
Residential real estate | 149 | 23,714 | 28 | 4,172 | 177 | 27,886 | ||||||||||||||||||
Consumer home equity | 86 | 3,862 | 12 | 2,085 | 98 | 5,947 | ||||||||||||||||||
Other consumer | 1 | 22 | — | — | 1 | 22 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | 244 | $ | 40,691 | 54 | $ | 18,447 | 298 | $ | 59,138 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||
TDRs on Accrual Status | TDRs on Nonaccrual Status | Total TDRs | ||||||||||||||||||||||
Balance of | Number of | Balance of | Number of | Balance of | ||||||||||||||||||||
Number of Loans | Loans | Loans | Loans | Loans | Loans | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | 4 | $ | 10,899 | 14 | $ | 19,781 | 18 | $ | 30,680 | |||||||||||||||
Commercial real estate | 1 | 3,520 | 3 | 3,338 | 4 | 6,858 | ||||||||||||||||||
Business banking | 2 | 3,156 | 1 | 204 | 3 | 3,360 | ||||||||||||||||||
Residential real estate | 152 | 25,093 | 27 | 3,977 | 179 | 29,070 | ||||||||||||||||||
Consumer home equity | 89 | 5,955 | 5 | 600 | 94 | 6,555 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | 248 | $ | 48,623 | 50 | $ | 27,900 | 298 | $ | 76,523 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | |||||||||||||||||||||||||||||||||||
TDRs on Accrual Status | TDRs on Non-Accrual Status | Total TDRs | |||||||||||||||||||||||||||||||||
Number of Loans | Balance of Loans | Number of Loans | Balance of Loans | Number of Loans | Balance of Loans | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial and industrial | 1 | $ | 5,675 | 6 | $ | 9,607 | 7 | $ | 15,282 | ||||||||||||||||||||||||||
Commercial real estate | 1 | 3,520 | 0 | 0 | 1 | 3,520 | |||||||||||||||||||||||||||||
Business banking | 5 | 3,945 | 7 | 1,507 | 12 | 5,452 | |||||||||||||||||||||||||||||
Residential real estate | 135 | 21,677 | 26 | 3,129 | 161 | 24,806 | |||||||||||||||||||||||||||||
Consumer home equity | 77 | 3,494 | 12 | 460 | 89 | 3,954 | |||||||||||||||||||||||||||||
Other consumer | 2 | 5 | 1 | 19 | 3 | 24 | |||||||||||||||||||||||||||||
Total | 221 | $ | 38,316 | 52 | $ | 14,722 | 273 | $ | 53,038 |
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||
TDRs on Accrual Status | TDRs on Non-Accrual Status | Total TDRs | |||||||||||||||||||||||||||||||||
Number of Loans | Balance of Loans | Number of Loans | Balance of Loans | Number of Loans | Balance of Loans | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial and industrial | 1 | $ | 5,628 | 7 | $ | 6,819 | 8 | $ | 12,447 | ||||||||||||||||||||||||||
Commercial real estate | 1 | 3,521 | 1 | 480 | 2 | 4,001 | |||||||||||||||||||||||||||||
Business banking | 6 | 4,471 | 6 | 722 | 12 | 5,193 | |||||||||||||||||||||||||||||
Residential real estate | 146 | 23,416 | 27 | 3,273 | 173 | 26,689 | |||||||||||||||||||||||||||||
Consumer home equity | 91 | 4,030 | 12 | 815 | 103 | 4,845 | |||||||||||||||||||||||||||||
Other consumer | 3 | 29 | 0 | 0 | 3 | 29 | |||||||||||||||||||||||||||||
Total | 248 | $ | 41,095 | 53 | $ | 12,109 | 301 | $ | 53,204 |
The following table showstables show the modifications which occurred during the periods and the change in the recorded investment subsequent to the modifications occurring:
For the Three Months Ended June 30, 2020 | For the Six Months Ended June 30, 2020 | |||||||||||||||||||||||
Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Modification Outstanding Recorded Investment (1) | Number of Contracts | Pre-Modification Modification Outstanding Recorded Investment | Post- Modification Modification Outstanding Recorded Investment (1) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | 1 | $ | 141 | $ | 141 | 1 | $ | 141 | $ | 141 | ||||||||||||||
Commercial real estate | 1 | 506 | 506 | 1 | 506 | 506 | ||||||||||||||||||
Business banking | 4 | 1,165 | 1,165 | 4 | 1,165 | 1,165 | ||||||||||||||||||
Residential real estate | 2 | 155 | 155 | 3 | 399 | 399 | ||||||||||||||||||
Consumer home equity | 4 | 113 | 113 | 12 | 527 | 531 | ||||||||||||||||||
Other consumer | — | — | — | 1 | 24 | 24 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | 12 | $ | 2,080 | $ | 2,080 | 22 | $ | 2,762 | $ | 2,766 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2019 | For the Six Months Ended June 30, 2019 | |||||||||||||||||||||||
Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Modification Outstanding Recorded Investment (1) | Number of Contracts | Pre-Modification Modification Outstanding Recorded Investment | Post- Modification Modification Outstanding Recorded Investment (1) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial | 5 | $ | 7,141 | $ | 7,441 | 7 | $ | 7,462 | $ | 7,762 | ||||||||||||||
Commercial real estate | 2 | 3,277 | 3,277 | 2 | 3,277 | 3,277 | ||||||||||||||||||
Residential real estate | 3 | 433 | 445 | 3 | 433 | 445 | ||||||||||||||||||
Consumer home equity | 3 | 154 | 156 | 3 | 154 | 156 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | 13 | $ | 11,005 | $ | 11,319 | 15 | $ | 11,326 | $ | 11,640 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, 2021 For the Six Months Ended June 30, 2021 Number
of
ContractsPre-
Modification
Outstanding
Recorded
InvestmentPost-
Modification
Outstanding
Recorded
Investment (1)Number
of
ContractsPre-Modification
Outstanding
Recorded
InvestmentPost-
Modification
Outstanding
Recorded
Investment (1)(Dollars in thousands) Business banking 1 $ 462 $ 462 1 $ 462 $ 462 Residential real estate 0 0 0 1 295 295 Total 1 $ 462 $ 462 2 $ 757 $ 757
For the Three Months Ended June 30, 2020 | For the Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||
Number of Contracts | Pre- Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment (1) | Number of Contracts | Pre-Modification Outstanding Recorded Investment | Post- Modification Outstanding Recorded Investment (1) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial and industrial | 1 | $ | 141 | $ | 141 | 1 | $ | 141 | $ | 141 | |||||||||||||||||||||||||
Commercial real estate | 1 | 506 | 506 | 1 | 506 | 506 | |||||||||||||||||||||||||||||
Business banking | 4 | 1,165 | 1,165 | 4 | 1,165 | 1,165 | |||||||||||||||||||||||||||||
Residential real estate | 2 | 155 | 155 | 3 | 399 | 399 | |||||||||||||||||||||||||||||
Consumer home equity | 4 | 113 | 113 | 12 | 527 | 531 | |||||||||||||||||||||||||||||
Other consumer | 0 | 0 | 0 | 1 | 24 | 24 | |||||||||||||||||||||||||||||
Total | 12 | $ | 2,080 | $ | 2,080 | 22 | $ | 2,762 | $ | 2,766 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In Thousands) | ||||||||||||||||
Adjusted interest rate and extended maturity | $ | — | $ | 668 | $ | — | $ | 668 | ||||||||
Adjusted interest rate and principal deferred | — | 39 | — | 39 | ||||||||||||
Interest only/principal deferred | 1,305 | 40 | 1,305 | 40 | ||||||||||||
Extended maturity | 35 | — | 35 | — | ||||||||||||
Extended maturity and interest only/principal deferred | 381 | — | 427 | — | ||||||||||||
Additional underwriting - increased exposure | — | 10,572 | — | 10,572 | ||||||||||||
Court-ordered concession | 359 | — | 999 | 321 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 2,080 | $ | 11,319 | $ | 2,766 | $ | 11,640 | ||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Interest only/principal deferred $ 0 $ 1,305 $ 0 $ 1,305 Extended maturity 0 35 0 35 Extended maturity and interest only/principal deferred 0 381 0 427 Court-ordered concession 0 359 295 999 Principal and interest deferred 462 0 462 0 Total $ 462 $ 2,080 $ 757 $ 2,766
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||
Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Troubled debt restructurings that subsequently defaulted (1): | ||||||||||||||||||||||||||||||||
Commercial and industrial | — | $ | — | 5 | $ | 6,435 | — | $ | — | 5 | $ | 6,435 | ||||||||||||||||||||
Commercial real estate | — | — | 1 | 338 | — | — | 1 | 338 | ||||||||||||||||||||||||
Residential real estate | — | — | 1 | 107 | — | — | 1 | 107 | ||||||||||||||||||||||||
Consumer Home Equity | — | — | — | — | 1 | 1,317 | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total | — | $ | — | 7 | $ | 6,880 | 1 | $ | 1,317 | 7 | $ | 6,880 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
non-accrual:
For the Six Months Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
Number of Contracts | Recorded Investment | Number of Contracts | Recorded Investment | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Troubled debt restructurings that subsequently defaulted (1): | |||||||||||||||||||||||
Business banking | 1 | $ | 411 | 0 | $ | 0 | |||||||||||||||||
Consumer home equity | 1 | 57 | 1 | 1,317 | |||||||||||||||||||
Total | 2 | $ | 468 | 1 | $ | 1,317 |
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||
Commercial and industrial | $ | 13,052 | $ | 14,152 | $ | — | $ | 22,074 | $ | 22,819 | $ | — | ||||||||||||
Commercial real estate | 4,419 | 4,635 | — | 7,553 | 7,808 | — | ||||||||||||||||||
Business banking | 3,076 | 4,369 | — | 2,738 | 4,062 | — | ||||||||||||||||||
Residential real estate | 12,502 | 14,205 | — | 16,517 | 17,858 | — | ||||||||||||||||||
Consumer home equity | 3,279 | 3,697 | — | 3,666 | 3,697 | — | ||||||||||||||||||
Other Consumer | 22 | 22 | — | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Sub-total | 36,350 | 41,080 | — | 52,548 | 56,244 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||
Commercial and industrial | 5,812 | 6,041 | 3,028 | 10,296 | 10,503 | 2,337 | ||||||||||||||||||
Commercial real estate | 501 | 506 | 230 | 88 | 90 | 40 | ||||||||||||||||||
Commercial construction | 280 | 280 | 22 | — | — | — | ||||||||||||||||||
Business banking | 17,225 | 21,418 | 578 | 8,920 | 13,176 | 571 | ||||||||||||||||||
Residential real estate | 15,799 | 15,799 | 1,639 | 13,015 | 14,072 | 1,399 | ||||||||||||||||||
Consumer home equity | 2,688 | 2,688 | 277 | 2,889 | 2,913 | 322 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Sub-total | 42,285 | 46,712 | 5,774 | 35,208 | 40,754 | 4,669 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 78,635 | $ | 87,792 | $ | 5,774 | $ | 87,756 | $ | 96,998 | $ | 4,669 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 As of December 31, 2020 Recorded
InvestmentUnpaid
Principal
BalanceRelated
AllowanceRecorded
InvestmentUnpaid
Principal
BalanceRelated
Allowance(In thousands) With no related allowance recorded: Commercial and industrial $ 12,433 $ 13,752 $ — $ 9,182 $ 11,212 $ — Commercial real estate 4,051 4,101 — 3,955 3,974 — Business banking 4,725 6,079 — 5,250 7,659 — Residential real estate 13,676 15,186 — 14,730 17,010 — Consumer home equity 2,105 2,105 — 2,571 2,571 — Other consumer 24 24 — 29 29 — Sub-total 37,014 41,247 — 35,717 42,455 — With an allowance recorded: Commercial and industrial 7,833 8,209 4,544 8,161 8,432 4,555 Commercial real estate 0 0 0 480 497 210 Business banking 13,454 19,172 937 16,651 21,146 1,435 Residential real estate 11,415 11,415 1,624 12,326 12,326 1,565 Consumer home equity 1,849 1,849 263 2,274 2,274 289 Sub-total 34,551 40,645 7,368 39,892 44,675 8,054 Total $ 71,565 $ 81,892 $ 7,368 $ 75,609 $ 87,130 $ 8,054
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, 2020 | June 30, 2020 | |||||||||||||||
Average Recorded Investment | Total Interest Recognized | Average Recorded Investment | Total Interest Recognized | |||||||||||||
(In Thousands) | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial and industrial | $ | 12,304 | $ | 49 | $ | 16,592 | $ | 119 | ||||||||
Commercial real estate | 4,401 | 44 | 5,946 | 89 | ||||||||||||
Business banking | 2,392 | 17 | 2,339 | 36 | ||||||||||||
Residential real estate | 11,678 | 125 | 11,728 | 252 | ||||||||||||
Consumer home equity | 3,315 | 16 | 3,155 | 37 | ||||||||||||
Other Consumer | | 22 | | | — | | | 23 | | 1 | ||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total | 34,112 | 251 | 39,783 | | 534 | | ||||||||||
|
|
|
|
|
|
|
| |||||||||
With an allowance recorded: | ||||||||||||||||
Commercial and industrial | 6,545 | — | 9,138 | — | ||||||||||||
Commercial real estate | 510 | — | 429 | — | ||||||||||||
Commercial construction | 93 | — | 47 | — | ||||||||||||
Business banking | 12,955 | 15 | 10,869 | 30 | ||||||||||||
Residential real estate | 14,664 | 169 | 14,707 | 343 | ||||||||||||
Consumer home equity | 2,706 | 22 | 3,087 | 51 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total | 37,473 | 206 | 38,277 | 424 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 71,585 | $ | 457 | $ | 78,060 | $ | 958 | ||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, 2019 | June 30, 2019 | |||||||||||||||
Average Recorded Investment | Total Interest Recognized | Average Recorded Investment | Total Interest Recognized | |||||||||||||
(In Thousands) | ||||||||||||||||
With no related allowance recorded: | ||||||||||||||||
Commercial and industrial | $ | 12,022 | $ | 108 | $ | 11,343 | $ | 177 | ||||||||
Commercial real estate | 11,443 | 74 | 11,176 | 148 | ||||||||||||
Business banking | 1,465 | — | 1,332 | — | ||||||||||||
Residential real estate | 11,935 | 131 | 11,978 | 259 | ||||||||||||
Consumer home equity | 1,989 | 26 | 2,034 | 51 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total | 38,854 | 339 | 37,863 | 635 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
With an allowance recorded: | ||||||||||||||||
Commercial and industrial | $ | 4,386 | $ | — | $ | 3,629 | $ | — | ||||||||
Commercial real estate | 1,179 | — | 634 | — | ||||||||||||
Business banking | 7,314 | — | 6,937 | — | ||||||||||||
Residential real estate | 12,606 | 153 | 12,625 | 302 | ||||||||||||
Consumer home equity | 2,320 | 30 | 2,373 | 59 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total | 27,805 | 183 | 26,198 | 361 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 66,659 | $ | 522 | $ | 64,061 | $ | 996 | ||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||
June 30, 2021 | June 30, 2021 | ||||||||||||||||||||||
Average Recorded Investment | Total Interest Recognized | Average Recorded Investment | Total Interest Recognized | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||
Commercial and industrial | $ | 11,800 | $ | 47 | $ | 10,849 | $ | 92 | |||||||||||||||
Commercial real estate | 4,057 | 44 | 4,116 | 89 | |||||||||||||||||||
Business banking | 4,748 | 25 | 4,886 | 51 | |||||||||||||||||||
Residential real estate | 13,942 | 138 | 14,311 | 277 | |||||||||||||||||||
Consumer home equity | 2,176 | 16 | 2,309 | 35 | |||||||||||||||||||
Other consumer | 24 | 0 | 26 | 0 | |||||||||||||||||||
Sub-total | 36,747 | 270 | 36,497 | 544 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||
Commercial and industrial | 7,774 | 0 | 7,870 | 0 | |||||||||||||||||||
Commercial real estate | 155 | 0 | 405 | 0 | |||||||||||||||||||
Business banking | 14,714 | 14 | 15,519 | 29 | |||||||||||||||||||
Residential real estate | 11,638 | 121 | 11,927 | 243 | |||||||||||||||||||
Consumer home equity | 1,910 | 14 | 2,028 | 31 | |||||||||||||||||||
Sub-total | 36,191 | 149 | 37,749 | 303 | |||||||||||||||||||
Total | $ | 72,938 | $ | 419 | $ | 74,246 | $ | 847 |
For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||
June 30, 2020 | June 30, 2020 | ||||||||||||||||||||||
Average Recorded Investment | Total Interest Recognized | Average Recorded Investment | Total Interest Recognized | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||
Commercial and industrial | $ | 12,304 | $ | 49 | $ | 16,592 | $ | 119 | |||||||||||||||
Commercial real estate | 4,401 | 44 | 5,946 | 89 | |||||||||||||||||||
Business banking | 2,392 | 17 | 2,339 | 36 | |||||||||||||||||||
Residential real estate | 11,678 | 125 | 11,728 | 252 | |||||||||||||||||||
Consumer home equity | 3,315 | 16 | 3,155 | 37 | |||||||||||||||||||
Other Consumer | 22 | 0 | 23 | 1 | |||||||||||||||||||
Sub-total | 34,112 | 251 | 39,783 | 534 | |||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||
Commercial and industrial | 6,545 | 0 | 9,138 | 0 | |||||||||||||||||||
Commercial real estate | 510 | 0 | 429 | 0 | |||||||||||||||||||
Commercial construction | 93 | 0 | 47 | 0 | |||||||||||||||||||
Business banking | 12,955 | 15 | 10,869 | 30 | |||||||||||||||||||
Residential real estate | 14,664 | 169 | 14,707 | 343 | |||||||||||||||||||
Consumer home equity | 2,706 | 22 | 3,087 | 51 | |||||||||||||||||||
Sub-total | 37,473 | 206 | 38,277 | 424 | |||||||||||||||||||
Total | $ | 71,585 | $ | 457 | $ | 78,060 | $ | 958 |
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
(In Thousands) | ||||||||
Outstanding balance | $ | 13,572 | $ | 15,149 | ||||
Carrying amount | 12,411 | 13,451 |
June 30, | December 31, | ||||||||||
2021 | 2020 | ||||||||||
(In thousands) | |||||||||||
Outstanding balance | $ | 5,000 | $ | 9,982 | |||||||
Carrying amount | 4,526 | 9,297 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In Thousands) | ||||||||||||||||
Balance at beginning of period | $ | 3,346 | $ | 5,526 | $ | 3,923 | $ | 6,161 | ||||||||
Acquisition | — | — | — | — | ||||||||||||
Accretion | (338 | ) | (569 | ) | (760 | ) | (1,142 | ) | ||||||||
Other change in expected cash flows | (10 | ) | (338 | ) | (165 | ) | (400 | ) | ||||||||
Reclassification (to) from non-accretable difference for loans with (deteriorated) improved cash flows | (4 | ) | 855 | (4 | ) | 855 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance at end of period | $ | 2,994 | $ | 5,474 | $ | 2,994 | $ | 5,474 | ||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Balance at beginning of period | $ | 2,031 | $ | 3,346 | $ | 2,495 | $ | 3,923 | |||||||||||||||
Accretion | (416) | (338) | (632) | (760) | |||||||||||||||||||
Other change in expected cash flows | 39 | (10) | (209) | (165) | |||||||||||||||||||
Reclassification from (to) non-accretable difference for loans with improved (deteriorated) cash flows | 1,327 | (4) | 1,327 | (4) | |||||||||||||||||||
Balance at end of period | $ | 2,981 | $ | 2,994 | $ | 2,981 | $ | 2,994 |
The following table summarizes the Company’s loan participations:
As of and for the six months ended June 30, 2020 | As of and for the year ended December 31, 2019 | |||||||||||||||||||||||||||||||
Balance | NPL Rate (%) | Impaired (%) | Gross Charge-offs | Balance | NPL Rate (%) | Impaired (%) | Gross Charge-offs | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 668,667 | 1.62 | % | 1.62 | % | $ | — | $ | 586,346 | 2.76 | % | 2.76 | % | $ | — | ||||||||||||||||
Commercial real estate | 305,676 | 0.00 | % | 0.00 | % | — | 314,487 | 0.00 | % | 0.00 | % | — | ||||||||||||||||||||
Commercial construction | 86,636 | 0.00 | % | 0.00 | % | — | 64,259 | 0.00 | % | 0.00 | % | — | ||||||||||||||||||||
Business banking | 38 | 0.00 | % | 0.00 | % | 15 | 57 | 0.00 | % | 0.00 | % | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total loan participations | $ | 1,061,017 | 1.02 | % | 1.02 | % | $ | 15 | $ | 965,149 | 1.68 | % | 1.68 | % | $ | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the six months ended June 30, 2021 | As of and for the year ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Balance | Non-performing Loan Rate (%) | Impaired (%) | Gross Charge-offs | Balance | Non-performing Loan Rate (%) | Impaired (%) | Gross Charge-offs | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 584,540 | 1.64 | % | 1.64 | % | $ | 0 | $ | 598,873 | 1.11 | % | 1.11 | % | $ | 0 | |||||||||||||||||||||||||||||||
Commercial real estate | 358,558 | 0.00 | % | 0.00 | % | 0 | 306,202 | 0.00 | % | 0.00 | % | 0 | |||||||||||||||||||||||||||||||||||
Commercial construction | 85,790 | 0.00 | % | 0.00 | % | 0 | 119,600 | 0.00 | % | 0.00 | % | 0 | |||||||||||||||||||||||||||||||||||
Business banking | 28 | 0.00 | % | 0.00 | % | 0 | 34 | 0.00 | % | 0.00 | % | 15 | |||||||||||||||||||||||||||||||||||
Total loan participations | $ | 1,028,916 | 0.93 | % | 0.93 | % | $ | 0 | $ | 1,024,709 | 0.65 | % | 0.65 | % | $ | 15 |
sheet.
As of June 30, 2020 | ||||
(in thousands) | ||||
Right-of-use assets | $ | 87,573 | ||
Lease liabilities | $ | 91,221 |
As of June 30, 2021 | As of December 31, 2020 | |||||||
(In thousands) | ||||||||
Right-of-use assets | $ | 76,678 | $ | 81,596 | ||||
Lease liabilities | $ | 80,653 | $ | 85,330 |
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | ||||||||||
(In thousands) | |||||||||||
Operating lease cost | $ | 3,521 | $ | 7,082 | |||||||
Finance lease cost | 35 | 66 | |||||||||
Variable lease cost | 457 | 947 | |||||||||
Total lease cost | $ | 4,013 | $ | 8,095 |
Three months ended June 30, 2020 | Six months ended June 30, 2020 | |||||||
(in thousands) | (in thousands) | |||||||
Operating lease cost | $ | 3,601 | $ | 7,215 | ||||
Finance lease cost | 17 | 20 | ||||||
Variable lease cost | 448 | 970 | ||||||
|
|
|
| |||||
Total lease cost | $ | 4,066 | $ | 8,205 | ||||
|
|
|
|
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||||||
(In thousands) | |||||||||||
Operating lease cost | $ | 3,601 | $ | 7,215 | |||||||
Finance lease cost | 17 | 20 | |||||||||
Variable lease cost | 448 | 970 | |||||||||
Total lease cost | $ | 4,066 | $ | 8,205 |
finance lease payments. During the three and six months ended June 30, 2020 the Company made $3.5 million and $7.1 million, respectively, in cash payments for operating and finance lease payments.
Finance leases are not material and are included in other assets, net in the Company’s consolidated balance sheets.
| ||||
|
The following table sets forth the undiscounted cash flows of base rent related to operating leases outstanding at June 30, 2020 with payments scheduled over the next five years and thereafter, including a reconciliation to the operating lease liability recognized in the Company’s Consolidated Balance Sheet in other liabilities.
(in thousands) | ||||
Remainder of 2020 | $ | 7,098 | ||
2021 | 13,746 | |||
2022 | 12,746 | |||
2023 | 12,206 | |||
2024 | 11,402 | |||
Thereafter | 45,534 | |||
|
| |||
Total minimum lease payments | $ | 102,732 | ||
Less: amount representing interest | 11,511 | |||
|
| |||
Present value of future minimum lease payments | $ | 91,221 | ||
|
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
Weighted-average remaining lease term (in years) | 8.15 | 8.50 | |||||||||
Weighted-average discount rate | 2.63 | % | 2.65 | % |
June 30, 2020 | As of June 30, 2021 | ||||||||||||||||||||||||||||
Banking Business | Insurance Agency Business | Net Carrying Amount | Banking Business | Insurance Agency Business | Net Carrying Amount | ||||||||||||||||||||||||
(In Thousands) | (In thousands) | ||||||||||||||||||||||||||||
Balances not subject to amortization | Balances not subject to amortization | ||||||||||||||||||||||||||||
Goodwill | $ | 298,611 | $ | 70,420 | $ | 369,031 | Goodwill | $ | 298,611 | $ | 73,861 | $ | 372,472 | ||||||||||||||||
Balances subject to amortization | Balances subject to amortization | ||||||||||||||||||||||||||||
Insurance agency | — | 6,844 | 6,844 | Insurance agency | 0 | 7,833 | 7,833 | ||||||||||||||||||||||
Core deposits | 456 | — | 456 | Core deposits | 97 | 0 | 97 | ||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||
Total other intangible assets | 456 | 6,844 | 7,300 | Total other intangible assets | 97 | 7,833 | 7,930 | ||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||
Total goodwill and other intangible assets | $ | 299,067 | $ | 77,264 | $ | 376,331 | Total goodwill and other intangible assets | $ | 298,708 | $ | 81,694 | $ | 380,402 | ||||||||||||||||
|
|
| |||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||
Banking Business | Insurance Agency Business | Net Carrying Amount | |||||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||||
Balances not subject to amortization | |||||||||||||||||||||||||||||
Goodwill | $ | 298,611 | $ | 70,420 | $ | 369,031 | |||||||||||||||||||||||
Balances subject to amortization | |||||||||||||||||||||||||||||
Insurance agency | — | 7,949 | 7,949 | ||||||||||||||||||||||||||
Core deposits | 754 | — | 754 | ||||||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||
Total other intangible assets | 754 | 7,949 | 8,703 | ||||||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||
Total goodwill and other intangible assets | $ | 299,365 | $ | 78,369 | $ | 377,734 | |||||||||||||||||||||||
|
|
|
As of December 31, 2020 | |||||||||||||||||
Banking Business | Insurance Agency Business | Net Carrying Amount | |||||||||||||||
(In thousands) | |||||||||||||||||
Balances not subject to amortization | |||||||||||||||||
Goodwill | $ | 298,611 | $ | 70,866 | $ | 369,477 | |||||||||||
Balances subject to amortization | |||||||||||||||||
Insurance agency | 0 | 6,899 | 6,899 | ||||||||||||||
Core deposits | 158 | 0 | 158 | ||||||||||||||
Total other intangible assets | 158 | 6,899 | 7,057 | ||||||||||||||
Total goodwill and other intangible assets | $ | 298,769 | $ | 77,765 | $ | 376,534 |
2020.
The following table sets forth information regardingEarnings Per Share (“EPS”)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In thousands) | ||||||||||||||||
Combined federal and state income tax provisions | $ | 7,197 | $ | 11,032 | $ | 8,495 | $ | 20,710 | ||||||||
Effective income tax rates | 19.4 | % | 23.9 | % | 18.2 | % | 23.3 | % |
The Company’s provision for income taxes was $7.2 million and $11.0 million forperiod, plus the three months ended June 30, 2020 and 2019, respectively, and $8.5 million and $20.7 million foreffect of potential dilutive common share equivalents computed using the six months ended June 30, 2020 and 2019, respectively. The decrease in
income tax expense was due primarily to lower pre-tax incometreasury stock method. There were no securities that had a dilutive effect during the three and six months ended June 30, 2020 compared2021, and therefore the weighted-average common shares outstanding used to calculate both basic and diluted EPS are the same. Shares held by the Employee Stock Ownership Plan (“ESOP”) that have not been allocated to employees in accordance with the terms of the ESOP, referred to as “unallocated ESOP shares,” are not deemed outstanding for earnings per share calculations. Earnings per share data is not applicable for the three and six months ended June 30, 2019, while investment tax credits and other favorable permanent differences remained relatively constant.
The2020 as the Company believes that it is more likely than not that its deferred tax assets as of June 30, 2020 and December 31, 2019 will be realized. As such, there washad no deferred tax asset valuation allowance as of June 30, 2020 and December 31, 2019.
The Company files tax returns in the U.S. federal jurisdiction and various states. As of June 30, 2020, the Company’s open tax years for examination by the Internal Revenue Services (“IRS”) were 2016, 2017 and 2018. The Company’s open tax years for examination by state tax authorities varies by state, but no years prior to 2013 are open. The Company believes that its income tax returnsshares outstanding.
For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2021 | ||||||||||
(Dollars in thousands, except per share data) | |||||||||||
Net income applicable to common shares | $ | 34,809 | $ | 82,472 | |||||||
Average number of common shares outstanding | 186,758,154 | 186,758,154 | |||||||||
Less: Average unallocated ESOP shares | (14,584,447) | (14,646,782) | |||||||||
Average number of common shares outstanding used to calculate basic earnings per common share | 172,173,707 | 172,111,372 | |||||||||
Common stock equivalents | 0 | 0 | |||||||||
Average number of common shares outstanding used to calculate diluted earnings per common share | 172,173,707 | 172,111,372 | |||||||||
Earnings per common share | |||||||||||
Basic and diluted | $ | 0.20 | $ | 0.48 |
Management has performed an evaluation of the Company’s uncertain tax positions and determined that a liability for unrecognized tax benefits at June 30, 2020 and December 31, 2019 was not needed.
diluted EPS.
qualifying LIHTC investments.
Six Months Ended June 30, 2020 | Year Ended December 31, 2019 | |||||||
(In Thousands) | ||||||||
Current recorded investment included in other assets | $ | 46,552 | $ | 37,665 | ||||
Commitments to fund qualified affordable housing projects included in recorded investment noted above | 23,821 | 18,042 | ||||||
Tax credits and benefits (1) | 3,058 | 5,962 | ||||||
Amortization of investments included in current tax expense (2) | 2,452 | 4,782 |
|
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
(In thousands) | |||||||||||
Current recorded investment included in other assets | $ | 70,184 | $ | 58,504 | |||||||
Commitments to fund qualified affordable housing projects included in recorded investment noted above | 41,380 | 31,487 |
The following table presents additional information related to the Company's investments in LIHTC projects for the period indicated:
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Tax credits and benefits recognized | $ | 1,523 | $ | 1,539 | $ | 2,987 | $ | 3,058 | |||||||||||||||
Amortization expense included in income tax expense | 1,495 | 1,261 | 2,759 | 2,452 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(In Thousands) | ||||||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||
Service cost | $ | 6,231 | $ | 4,730 | $ | 12,463 | $ | 9,463 | ||||||||
Interest cost | 2,615 | 2,750 | 5,232 | 5,500 | ||||||||||||
Expected return on plan assets | (7,425 | ) | (5,906 | ) | (14,850 | ) | (11,812 | ) | ||||||||
Past service cost | 6 | 11 | 12 | 22 | ||||||||||||
Recognized net actuarial loss | 2,361 | 1,811 | 4,721 | 3,622 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net periodic benefit cost | $ | 3,788 | $ | 3,396 | $ | 7,578 | $ | 6,795 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Components of net periodic benefit cost: | |||||||||||||||||||||||
Service cost | $ | 7,898 | $ | 6,231 | $ | 15,794 | $ | 12,463 | |||||||||||||||
Interest cost | 1,267 | 2,615 | 2,536 | 5,232 | |||||||||||||||||||
Expected return on plan assets | (8,141) | (7,425) | (16,283) | (14,850) | |||||||||||||||||||
Past service cost | (2,945) | 6 | (5,890) | 12 | |||||||||||||||||||
Recognized net actuarial loss | 3,538 | 2,361 | 7,075 | 4,721 | |||||||||||||||||||
Net periodic benefit cost | $ | 1,617 | $ | 3,788 | $ | 3,232 | $ | 7,578 |
As of June 30, 2021 | As of December 31, 2020 | ||||||||||||||||||||||||||||||||||
Book Value | Mark-to-Market | Fair Value | Book Value | Mark-to-Market | Fair Value | ||||||||||||||||||||||||||||||
Asset Type | (In thousands) | ||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 5,462 | $ | — | $ | 5,462 | $ | 5,157 | $ | — | $ | 5,157 | |||||||||||||||||||||||
Equities | 64,878 | 20,847 | 85,725 | 59,235 | 19,492 | 78,727 | |||||||||||||||||||||||||||||
Fixed income | 7,499 | 214 | 7,713 | 7,441 | 358 | 7,799 | |||||||||||||||||||||||||||||
Total assets | $ | 77,839 | $ | 21,061 | $ | 98,900 | $ | 71,833 | $ | 19,850 | $ | 91,683 |
June 30, 2020 | December 31, 2019 | |||||||
(In Thousands) | ||||||||
Commitments to extend credit | $ | 3,745,517 | $ | 3,606,182 | ||||
Standby letters of credit | 57,402 | 60,124 | ||||||
Forward commitments to sell loans | 67,745 | 21,357 |
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
(In thousands) | |||||||||||
Commitments to extend credit | $ | 4,129,771 | $ | 3,818,952 | |||||||
Standby letters of credit | 61,762 | 60,221 | |||||||||
Forward commitments to sell loans | 45,339 | 41,160 |
In the second quarter of 2021, the Company entered into a preliminary settlement of 2 purported class action matters concerning overdraft and nonsufficient funds fees. The matters were filed in the Massachusetts Superior Court in November 2019 and April 2021, respectively, and are expected to be consolidated into one matter for final settlement purposes. As of June 30, 2021, the Company estimated the settlement expense, including related costs, to be $3.3 million.
2020.
The following table reflects the Company’s derivative positions as As of June 30, 20202021 and December 31, 2019 for2020, the Company does not have any active interest rate swaps which qualify as cash flow hedges for accounting purposes.
June 30, 2020 | ||||||||||||||||||||
Weighted Average Rate | ||||||||||||||||||||
Notional Amount | Weighted Average Maturity | Current Rate Paid | Receive Fixed Swap Rate | Fair Value (1) | ||||||||||||||||
(In Thousands) | (In Years) | (In Thousands) | ||||||||||||||||||
Interest rate swaps on loans | 900,000 | 1.27 | 0.18 | % | 2.57 | % | (38 | ) | ||||||||||||
|
|
|
| |||||||||||||||||
Total | $ | 900,000 | $ | (38 | ) | |||||||||||||||
|
|
|
|
December 31, 2019 | ||||||||||||||||||||
Weighted Average Rate | ||||||||||||||||||||
Notional Amount | Weighted Average Maturity | Current Rate Paid | Receive Fixed Swap Rate | Fair Value (1) | ||||||||||||||||
(In Thousands) | (In Years) | (In Thousands) | ||||||||||||||||||
Interest rate swaps on loans | 2,120,000 | 2.16 | 1.74 | % | 2.11 | % | (321 | ) | ||||||||||||
|
|
|
| |||||||||||||||||
Total | $ | 2,120,000 | $ | (321 | ) | |||||||||||||||
|
|
|
|
|
Central banks aroundDue to the world, including the Federal Reserve, have commissioned working groups of market participantsphase-out, and official sector representatives with the goal of finding suitable replacements for the London Interbank Offered Rate (“LIBOR”) based on observable market transactions becauseeventual discontinuation, of the probable phase-out of LIBOR. It is expected that aLIBOR, central clearinghouses have begun to transition away from the widespread use of LIBOR to alternative rates will occur overfor valuation purposes. As of October 16, 2020, the course ofCompany changed its valuation methodology to reflect changes made by the next few years. AlthoughChicago Mercantile Exchange (“CME”), through which the full impact of a transition, including the potential or actual discontinuance of LIBOR publication, remains unclear, this change may have an adverse impact on the value of, return on and trading markets for a broad array ofCompany clears derivative financial products, including any LIBOR-based securities, loans and derivativesinstruments that are includedeligible for clearing. The changes from the CME changed the discounting methodology and interest calculation of cash margin from overnight index swap to secured overnight financing rate (also known as SOFR) for U.S. dollar cleared interest rate swaps. The Company believes that its improvements to its valuation methodology will result in valuations for cleared interest rate swaps that better reflect prices obtainable in the markets in which the Company transacts. The changes in valuation methodology were applied prospectively as a change in accounting estimate and are immaterial to the Company’s financial assetsstatements.
June 30, 2020:
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Unrealized gains on terminated hedges included in AOCI – beginning of respective period | $ | 33,199 | $ | 0 | $ | 41,473 | $ | 0 | |||||||||||||||
Unrealized gains on terminated hedges arising during the period | 0 | 30,952 | 0 | 30,952 | |||||||||||||||||||
Reclassification adjustments for amortization of unrealized (gains) into net income | (8,219) | (373) | (16,493) | (373) | |||||||||||||||||||
Unrealized gains on terminated hedges included in AOCI – June 30 | $ | 24,980 | $ | 30,579 | $ | 24,980 | $ | 30,579 |
AOCI will be amortized into earnings through January 2023. The Company expects approximately $20.6 million and $10.7 million to be reclassified into interest income from other comprehensive income related to the Company’s cash flow hedges in the next twelve months as of June 30, 2020 and December 31, 2019, respectively. This reclassification is due to anticipated payments that will be received on the swaps based upon the forward curve as of June 30, 2020 and December 31, 2019.
The Company expects approximately $12.8$23.1 million to be reclassified into interest income from other comprehensive income related to the Company’s terminated cash flow hedges in the next 12 months as of June 30, 2020. This reclassification is due to the amortization of realized but unrecognized gains from the termination of interest rate swaps during the period ended June 30, 2020. At June 30, 2020, the remaining unamortized gain on terminated cash flow hedges is $30.6 million.
As of June 30, 2020 and December 31, 2019, the Company’s exposure to CME and the fair value of interest rate swap derivatives which qualify as cash flow hedges that contain credit-risk related contingent features that are in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, was less than $0.1 million and $0.3 million, respectively. In addition, at June 30, 2020 and December 31, 2019, the Company had posted initial-margin collateral in the form of cash and a U.S. Treasury Note, to CME for these derivatives amounting to $18.7 million and $22.8 million, respectively. The cash and U.S. Treasury Note were considered restricted assets and were included in cash and due from banks and in available for sale securities, respectively.
2021.
Foreign exchange contracts consist of those offered to commercial customers and those entered into to hedge the Company’s foreign currency risk associated with a foreign-currency loan. Neither qualifies as a hedge for accounting purposes. These commercial customer derivatives are offset with matching derivatives with correspondent-bank counterparties in order to minimize foreign exchange rate risk to the Company. Exposure with respect to these derivatives is largely limited to nonperformance by either the customer or the other counterparty. Neither the Company nor the correspondent-bank counterparty are required to post collateral but each has established foreign-currency transaction limits to manage the exposure risk. The Company requires its customers to post collateral to minimize risk exposure.
June 30, 2020 | ||||||||
Number of Positions | Total Notional | |||||||
(Dollars in Thousands) | ||||||||
Interest rate swaps | 603 | $ | 3,775,850 | |||||
Risk participation agreements | 66 | 290,131 | ||||||
Foreign exchange contracts: | ||||||||
Matched commercial customer book | 86 | 9,252 | ||||||
Foreign currency loan | 23 | 7,986 | ||||||
December 31, 2019 | ||||||||
Number of Positions | Total Notional | |||||||
Interest rate swaps | 603 | $ | 3,749,474 | |||||
Risk participation agreements | 67 | 299,576 | ||||||
Foreign exchange contracts: | ||||||||
Matched commercial customer book | 62 | 29,990 | ||||||
Foreign currency loan | 23 | 7,310 |
June 30, 2021 | |||||||||||
Number of Positions | Total Notional | ||||||||||
(Dollars in thousands) | |||||||||||
Interest rate swaps | 536 | $ | 3,406,954 | ||||||||
Risk participation agreements | 68 | 277,452 | |||||||||
Foreign exchange contracts: | |||||||||||
Matched commercial customer book | 72 | 9,467 | |||||||||
Foreign currency loan | 5 | 6,886 |
December 31, 2020 | |||||||||||
Number of Positions | Total Notional | ||||||||||
(Dollars in thousands) | |||||||||||
Interest rate swaps | 576 | $ | 3,652,385 | ||||||||
Risk participation agreements | 70 | 287,732 | |||||||||
Foreign exchange contracts: | |||||||||||
Matched commercial customer book | 40 | 4,242 | |||||||||
Foreign currency loan | 3 | 10,798 |
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
Balance Sheet Location | Fair Value at June 30, 2020 | Fair Value at December 31, 2019 | Balance Sheet Location | Fair Value at June 30, 2020 | Fair Value at December 31, 2019 | |||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||||||||||
Interest rate swaps | Other assets | $ | — | $ | — | Other liabilities | $ | 38 | $ | 321 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||||||
Customer-related positions: | ||||||||||||||||||||||||
Interest rate swaps | Other assets | $ | 171,433 | $ | 64,463 | Other liabilities | $ | 51,319 | $ | 18,057 | ||||||||||||||
Risk participation agreements | Other assets | 995 | 482 | Other liabilities | 1,500 | 606 | ||||||||||||||||||
Foreign currency exchange contracts - matched customer book | Other assets | 151 | 469 | Other liabilities | 40 | 428 | ||||||||||||||||||
Foreign currency exchange contracts - foreign currency loan | Other assets | — | — | Other liabilities | 173 | 203 | ||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
$ | 172,579 | $ | 65,414 | $ | 53,032 | $ | 19,294 | |||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Total | $ | 172,579 | $ | 65,414 | $ | 53,070 | $ | 19,615 | ||||||||||||||||
|
|
|
|
|
|
|
|
Asset Derivatives Liability Derivatives Balance
Sheet
LocationFair Value at June 30,
2021Fair Value at December 31,
2020Balance Sheet
LocationFair Value at June 30,
2021Fair Value at December 31,
2020(In thousands) Derivatives not designated as hedging instruments Customer-related positions: Interest rate swaps Other assets $ 92,980 $ 141,822 Other liabilities $ 28,498 $ 42,600 Risk participation agreements Other assets 432 722 Other liabilities 675 1,230 Foreign currency exchange contracts - matched customer book Other assets 94 90 Other liabilities 89 77 Foreign currency exchange contracts - foreign currency loan Other assets 48 9 Other liabilities 0 69 Total $ 93,554 $ 142,643 $ 29,262 $ 43,976
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Derivatives designated as hedges: | ||||||||||||||||
Gain in OCI on derivatives | $ | 3,455 | $ | 16,054 | $ | 47,011 | $ | 21,914 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Gain reclassified from OCI into interest income (effective portion) | 7,134 | 231 | 10,246 | 524 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Gain recognized in income on derivatives (ineffective portion and amount excluded from effectiveness test) | ||||||||||||||||
Interest income | — | — | — | — | ||||||||||||
Other income | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Derivatives not designated as hedges: | ||||||||||||||||
Customer-related positions: | ||||||||||||||||
(Loss) recognized in interest rate swap income | $ | (687 | ) | $ | (2,129 | ) | $ | (6,967 | ) | $ | (3,356 | ) | ||||
(Loss) recognized in interest rate swap income for risk participation agreements | (80 | ) | (157 | ) | (381 | ) | (98 | ) | ||||||||
Gain (loss) recognized in other income for foreign currency exchange contracts: | ||||||||||||||||
Matched commercial customer book | 96 | (41 | ) | 69 | (40 | ) | ||||||||||
Foreign currency loan | (367 | ) | (32 | ) | 30 | (24 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total (loss) for derivatives not designated as hedges | $ | (1,039 | ) | $ | (2,359 | ) | $ | (7,249 | ) | $ | (3,518 | ) | ||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||||||||
Gain in OCI on derivatives | $ | 0 | $ | 3,455 | $ | 0 | $ | 47,011 | |||||||||||||||
Gain reclassified from OCI into interest income (effective portion) | $ | 8,219 | $ | 7,134 | $ | 16,493 | $ | 10,246 | |||||||||||||||
Gain recognized in income on derivatives (ineffective portion and amount excluded from effectiveness test) | |||||||||||||||||||||||
Interest income | 0 | 0 | 0 | 0 | |||||||||||||||||||
Other income | 0 | 0 | 0 | 0 | |||||||||||||||||||
Total | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||
Customer-related positions: | |||||||||||||||||||||||
(Loss) gain recognized in interest rate swap income | $ | (1,087) | $ | (687) | $ | 3,764 | $ | (6,967) | |||||||||||||||
(Loss) gain recognized in interest rate swap income for risk participation agreements | (105) | (80) | 264 | (381) | |||||||||||||||||||
(Loss) gain recognized in other income for foreign currency exchange contracts: | |||||||||||||||||||||||
Matched commercial customer book | (14) | 96 | (8) | 69 | |||||||||||||||||||
Foreign currency loan | 36 | (367) | 109 | 30 | |||||||||||||||||||
Total gain (loss) for derivatives not designated as hedges | $ | (1,170) | $ | (1,038) | $ | 4,129 | $ | (7,249) |
Cleared derivative transactions are with CME and exposure is settled to market daily, with additional credit exposure related to initial-margin collateral pledged to CME at trade execution. At June 30, 20202021 and December 31, 2019,2020, the Company’s exposure to CME for settled variation margin in excess of the customer-related interest rate swap termination values was $0.3$0.5 million, and $1.5less than $0.1 million, respectively. In addition, at June 30, 20202021 and December 31, 2019,2020, the Company had posted initial-margin collateral in the form of a U.S. Treasury Notenote amounting to $42.2$49.5 million and $27.6$60.4 million, respectively, to CME for these derivatives. The cash and U.S. Treasury Note werenote was considered a restricted assetsasset and werewas included in cash and due from banks and in available for sale securities respectively.
within the Company's consolidated balance sheets.
Gross Amounts | Net Amounts | Gross Amounts Not Offset in the Statement of | ||||||||||||||||||||||
Offset in the | Presented in | Financial Position | ||||||||||||||||||||||
Gross | Statement of | the Statement | Collateral | |||||||||||||||||||||
Amounts | Financial | of Financial | Financial Instruments | Pledged (Received) | Net Amount | |||||||||||||||||||
Description | Recognized | Position | Position | |||||||||||||||||||||
(In Thousands) | ||||||||||||||||||||||||
As of June 30, 2020 | ||||||||||||||||||||||||
Derivative Assets | ||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Customer-related positions: | ||||||||||||||||||||||||
Interest rate swaps | 171,433 | — | 171,433 | 8 | — | 171,425 | ||||||||||||||||||
Risk participation agreements | 995 | — | 995 | — | — | 995 | ||||||||||||||||||
Foreign currency exchange contracts - matched customer book | 151 | — | 151 | 1 | — | 150 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 172,579 | $ | — | $ | 172,579 | $ | 9 | $ | — | $ | 172,570 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Derivative Liabilities | ||||||||||||||||||||||||
Interest rate swaps | $ | 38 | $ | — | $ | 38 | $ | 38 | $ | — | $ | — | ||||||||||||
Customer-related positions: | ||||||||||||||||||||||||
Interest rate swaps | 51,319 | — | 51,319 | 8 | 51,311 | — | ||||||||||||||||||
Risk participation agreements | 1,500 | — | 1,500 | — | — | 1,500 | ||||||||||||||||||
Foreign currency exchange contracts - matched customer book | 40 | — | 40 | 1 | (7 | ) | 46 | |||||||||||||||||
Foreign currency exchange contracts - foreign currency loan | 173 | — | 173 | — | — | 173 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$ | 53,070 | $ | — | $ | 53,070 | $ | 47 | $ | 51,304 | $ | 1,719 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts | Net Amounts | Gross Amounts Not Offset in the Statement of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offset in the | Presented in | Financial Position | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross | Statement of | the Statement | Collateral | As of June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts | Financial | of Financial | Financial | Pledged | Net | Gross Amounts Recognized | Gross Amounts Offset in the Statement of Financial Position | Net Amounts Presented in the Statement of Financial Position | Gross Amounts Not Offset in the Statement of Financial Position | Net Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
Description | Recognized | Position | Position | Instruments | (Received) | Amount | Description | Financial Instruments | Collateral Pledged (Received) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2019 | (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Assets | Derivative Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | Interest rate swaps | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||||
Customer-related positions: | Customer-related positions: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | 64,463 | — | 64,463 | 1,434 | — | 63,029 | Interest rate swaps | 92,980 | 0 | 92,980 | 1,057 | 0 | 91,923 | ||||||||||||||||||||||||||||||||||||||||||||||
Risk participation agreements | 482 | — | 482 | — | — | 482 | Risk participation agreements | 432 | 0 | 432 | 0 | 0 | 432 | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts - matched customer book | 469 | — | 469 | 7 | (462 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 65,414 | $ | — | $ | 65,414 | $ | 1,441 | $ | (462 | ) | $ | 63,511 | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts – matched customer book | Foreign currency exchange contracts – matched customer book | 94 | 0 | 94 | 0 | 0 | 94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts – foreign currency loan | Foreign currency exchange contracts – foreign currency loan | 48 | 0 | 48 | 0 | 0 | 48 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| $ | 93,554 | $ | 0 | $ | 93,554 | $ | 1,057 | $ | 0 | $ | 92,497 | ||||||||||||||||||||||||||||||||||||||||||
Derivative Liabilities | Derivative Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | 321 | $ | — | $ | 321 | $ | 321 | $ | — | $ | — | Interest rate swaps | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||||
Customer-related positions: | Customer-related positions: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | 18,057 | — | 18,057 | 1,434 | 16,623 | — | Interest rate swaps | 28,498 | 0 | 28,498 | 1,057 | 27,441 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
Risk participation agreements | 606 | — | 606 | — | — | 606 | Risk participation agreements | 675 | 0 | 675 | 0 | 0 | 675 | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts - matched customer book | 428 | — | 428 | 7 | — | 421 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts - foreign currency loan | 203 | — | 203 | — | — | 203 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts – matched customer book | Foreign currency exchange contracts – matched customer book | 89 | 0 | 89 | 0 | 0 | 89 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts – foreign currency loan | Foreign currency exchange contracts – foreign currency loan | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| $ | 29,262 | $ | 0 | $ | 29,262 | $ | 1,057 | $ | 27,441 | $ | 764 | ||||||||||||||||||||||||||||||||||||||||||
$ | 19,615 | $ | — | $ | 19,615 | $ | 1,762 | $ | 16,623 | $ | 1,230 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||
Gross Amounts Recognized | Gross Amounts Offset in the Statement of Financial Position | Net Amounts Presented in the Statement of Financial Position | Gross Amounts Not Offset in the Statement of Financial Position | Net Amount | |||||||||||||||||||||||||||||||
Description | Financial Instruments | Collateral Pledged (Received) | |||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||||||||
Customer-related positions: | |||||||||||||||||||||||||||||||||||
Interest rate swaps | 141,822 | 0 | 141,822 | 48 | 0 | 141,774 | |||||||||||||||||||||||||||||
Risk participation agreements | 722 | 0 | 722 | 0 | 0 | 722 | |||||||||||||||||||||||||||||
Foreign currency exchange contracts – matched customer book | 90 | 0 | 90 | 0 | (1) | 89 | |||||||||||||||||||||||||||||
Foreign currency exchange contracts – foreign currency loan | 9 | 0 | 9 | 0 | 0 | 9 | |||||||||||||||||||||||||||||
$ | 142,643 | $ | 0 | $ | 142,643 | $ | 48 | $ | (1) | $ | 142,594 | ||||||||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||||||||
Customer-related positions: | |||||||||||||||||||||||||||||||||||
Interest rate swaps | 42,600 | 0 | 42,600 | 48 | 42,552 | 0 | |||||||||||||||||||||||||||||
Risk participation agreements | 1,230 | 0 | 1,230 | 0 | 0 | 1,230 | |||||||||||||||||||||||||||||
Foreign currency exchange contracts – matched customer book | 77 | 0 | 77 | 0 | 0 | 77 | |||||||||||||||||||||||||||||
Foreign currency exchange contracts – foreign currency loan | 69 | 0 | 69 | 0 | 0 | 69 | |||||||||||||||||||||||||||||
$ | 43,976 | $ | 0 | $ | 43,976 | $ | 48 | $ | 42,552 | $ | 1,376 |
Trading
Trading
Available for Sale Securities
Available for sale securities consisted of U.S. Treasury securities, U.S. government-sponsored residential mortgage-backed securities, state and municipal bonds, and others such as a qualified zone academy bond, and were recorded at fair value.
The Company’s U.S. Treasury securities are traded on active markets and therefore Therefore, these securities were classified as Level 1.
The fair value of other U.S. government-sponsored residential mortgage-backed securities was estimated using either a matrix or benchmarks. The inputs used include benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. These securities were categorized as Level 2.
Municipal bonds were classified as Level 2 forgiven the same reasons described for the trading municipal securities.
The valuation technique for the qualified zone academy bond was a discounted cash flow methodology using market discount rates. The assumptions used included at least one significant model assumption or input that was unobservable, and therefore, this security was classified as Level 3.
use of observable inputs.
the Securities footnote.
Fair
These assets were classified as Level 2 given the use of observable inputs.
These assets were classified as Level 2.
Bank-Owned Life Insurance
These assets were classified as Level 2 given the use of observable inputs.
Deposits were classified as Level 2 given the use of observable market inputs.
Other Borrowed Funds
For other borrowed funds that mature in 90 days or less, the carrying amount reported in the consolidated balance sheets approximates fair value. For borrowed funds that mature in more than 90 days, the fair value was based on the discounted value of the contractual cash flows applying interest rates currently being offered in the market.
FHLB advances were classified as Level 2.
Escrow deposits of borrowers were classified as Level 2.
The carrying amounts
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
(In Thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 1,432,561 | $ | 1,432,561 | $ | 362,602 | $ | 362,602 | ||||||||
Trading securities | — | — | 961 | 961 | ||||||||||||
Securities available for sale | 1,600,354 | 1,600,354 | 1,508,236 | 1,508,236 | ||||||||||||
Loans held for sale | 2,972 | 2,972 | 26 | 26 | ||||||||||||
Loans, net of allowance for loan losses | 9,862,980 | 10,191,776 | 8,889,184 | 9,116,018 | ||||||||||||
Accrued interest receivable | 28,017 | 28,017 | 26,835 | 26,835 | ||||||||||||
FHLB stock | 8,805 | 8,805 | 9,027 | 9,027 | ||||||||||||
Rabbi trust investments | 78,808 | 78,808 | 78,012 | 78,012 | ||||||||||||
Bank-owned life insurance | 77,528 | 77,528 | 77,546 | 77,546 | ||||||||||||
Interest rate swap contracts | ||||||||||||||||
Customer-related positions | 171,433 | 171,433 | 64,463 | 64,463 | ||||||||||||
Risk participation agreements | 995 | 995 | 482 | 482 | ||||||||||||
Foreign currency forward contracts | ||||||||||||||||
Matched customer book | 151 | 151 | 469 | 469 | ||||||||||||
Liabilities | ||||||||||||||||
Deposits | $ | 11,846,765 | $ | 11,847,001 | $ | 9,551,392 | $ | 9,548,889 | ||||||||
Other borrowed funds | — | — | 201,082 | 201,082 | ||||||||||||
FHLB advances | 14,922 | 14,847 | 18,964 | 18,188 | ||||||||||||
Escrow deposits of borrowers | 14,233 | 14,233 | 15,349 | 15,349 | ||||||||||||
Accrued interest payable | 370 | 370 | 1,712 | 1,712 | ||||||||||||
Interest rate swap contracts | ||||||||||||||||
Cash flow hedges - interest rate positions | 38 | 38 | 321 | 321 | ||||||||||||
Customer-related positions | 51,319 | 51,319 | 18,057 | 18,057 | ||||||||||||
Risk participation agreements | 1,500 | 1,500 | 606 | 606 | ||||||||||||
Foreign currency forward contracts | ||||||||||||||||
Matched customer book | 40 | 40 | 428 | 428 | ||||||||||||
Foreign currency loan | 173 | 173 | 203 | 203 |
The following tables present the balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 20202021 and December 31, 2019:
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in | Significant | |||||||||||||||
Description | Active Markets | Other | Significant | |||||||||||||
Balance as of | for Identical | Observable | Unobservable | |||||||||||||
June 30, 2020 | Assets (Level 1) | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Securities available for sale | ||||||||||||||||
U.S. Treasury securities | $ | 60,936 | $ | 60,936 | $ | — | $ | — | ||||||||
Government-sponsored residential mortgage-backed securities | 1,251,799 | — | 1,251,799 | — | ||||||||||||
State and municipal bonds and obligations | 281,340 | — | 281,340 | — | ||||||||||||
Other bonds | 6,279 | — | — | 6,279 | ||||||||||||
Rabbi trust investments | 78,808 | 71,248 | 7,560 | — | ||||||||||||
Interest rate swap contracts | ||||||||||||||||
Customer-related positions | 171,433 | — | 171,433 | — | ||||||||||||
Risk participation agreements | 995 | — | 995 | — | ||||||||||||
Foreign currency forward contracts | ||||||||||||||||
Matched customer book | 151 | — | 151 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,851,741 | $ | 132,184 | $ | 1,713,278 | $ | 6,279 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities | ||||||||||||||||
Interest rate swap contracts | ||||||||||||||||
Cash flow hedges - interest rate positions | $ | 38 | $ | — | $ | 38 | $ | — | ||||||||
Customer-related positions | 51,319 | — | 51,319 | — | ||||||||||||
Risk participation agreements | 1,500 | — | 1,500 | — | ||||||||||||
Foreign currency forward contracts | ||||||||||||||||
Matched customer book | 40 | — | 40 | — | ||||||||||||
Foreign currency loan | 173 | — | 173 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 53,070 | $ | — | $ | 53,070 | $ | — | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||||||||||
Quoted Prices in | Significant | Balance as of June 30, 2021 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||
Description | Balance as of | Active Markets | Other | Significant | Description | ||||||||||||||||||||||||||||||||||
December 31, 2019 | for Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | (In thousands) | |||||||||||||||||||||||||||||||||||
(Dollars In Thousands) | |||||||||||||||||||||||||||||||||||||||
Assets | Assets | ||||||||||||||||||||||||||||||||||||||
Trading securities | |||||||||||||||||||||||||||||||||||||||
Municipal bonds | $ | 961 | $ | — | $ | 961 | $ | — | |||||||||||||||||||||||||||||||
Securities available for sale | Securities available for sale | ||||||||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | Government-sponsored residential mortgage-backed securities | $ | 3,478,529 | $ | 0 | $ | 3,478,529 | $ | 0 | ||||||||||||||||||||||||||||||
Government-sponsored commercial mortgage-backed securities | Government-sponsored commercial mortgage-backed securities | 181,795 | 0 | 181,795 | 0 | ||||||||||||||||||||||||||||||||||
U.S. Agency bonds | U.S. Agency bonds | 841,005 | 0 | 841,005 | 0 | ||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 50,420 | 50,420 | U.S. Treasury securities | 69,331 | 69,331 | 0 | 0 | ||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | 1,167,968 | — | 1,167,968 | — | |||||||||||||||||||||||||||||||||||
State and municipal bonds and obligations | 283,538 | — | 283,538 | — | State and municipal bonds and obligations | 278,121 | 0 | 278,121 | 0 | ||||||||||||||||||||||||||||||
Other bonds | 6,310 | — | — | 6,310 | |||||||||||||||||||||||||||||||||||
Rabbi trust investments | 78,012 | 63,945 | 14,067 | — | Rabbi trust investments | 98,900 | 91,187 | 7,713 | 0 | ||||||||||||||||||||||||||||||
Loans held for sale | Loans held for sale | 2,734 | 0 | 2,734 | 0 | ||||||||||||||||||||||||||||||||||
Interest rate swap contracts | Interest rate swap contracts | ||||||||||||||||||||||||||||||||||||||
Customer-related positions | 64,463 | — | 64,463 | — | Customer-related positions | 92,980 | 0 | 92,980 | 0 | ||||||||||||||||||||||||||||||
Risk participation agreements | 482 | — | 482 | — | Risk participation agreements | 432 | 0 | 432 | 0 | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | Foreign currency forward contracts | ||||||||||||||||||||||||||||||||||||||
Matched customer book | 469 | — | 469 | — | Matched customer book | 94 | 0 | 94 | 0 | ||||||||||||||||||||||||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||||
Foreign currency loan | Foreign currency loan | 48 | 0 | 48 | 0 | ||||||||||||||||||||||||||||||||||
Total | $ | 1,652,623 | $ | 114,365 | $ | 1,531,948 | $ | 6,310 | Total | $ | 5,043,969 | $ | 160,518 | $ | 4,883,451 | $ | 0 | ||||||||||||||||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||||
Liabilities | Liabilities | ||||||||||||||||||||||||||||||||||||||
Interest rate swap contracts | Interest rate swap contracts | ||||||||||||||||||||||||||||||||||||||
Cash flow hedges - interest rate positions | $ | 321 | $ | — | $ | 321 | $ | — | |||||||||||||||||||||||||||||||
Customer-related positions | 18,057 | — | 18,057 | — | Customer-related positions | $ | 28,498 | $ | 0 | $ | 28,498 | $ | 0 | ||||||||||||||||||||||||||
Risk participation agreements | 606 | — | 606 | — | Risk participation agreements | 675 | 0 | 675 | 0 | ||||||||||||||||||||||||||||||
Foreign currency forward contracts | Foreign currency forward contracts | ||||||||||||||||||||||||||||||||||||||
Matched customer book | 428 | — | 428 | — | Matched customer book | 89 | 0 | 89 | 0 | ||||||||||||||||||||||||||||||
Foreign currency loan | 203 | — | 203 | — | Foreign currency loan | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
|
|
|
| ||||||||||||||||||||||||||||||||||||
Total | $ | 19,615 | $ | — | $ | 19,615 | $ | — | Total | $ | 29,262 | $ | 0 | $ | 29,262 | $ | 0 | ||||||||||||||||||||||
|
|
|
|
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
Description | Balance as of December 31, 2020 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | 2,148,800 | $ | 0 | $ | 2,148,800 | $ | 0 | |||||||||||||||
Government-sponsored commercial mortgage-backed securities | 17,081 | 0 | 17,081 | 0 | |||||||||||||||||||
U.S. Agency bonds | 666,709 | 0 | 666,709 | 0 | |||||||||||||||||||
U.S. Treasury securities | 70,369 | 70,369 | 0 | 0 | |||||||||||||||||||
State and municipal bonds and obligations | 280,902 | 0 | 280,902 | 0 | |||||||||||||||||||
Rabbi trust investments | 91,683 | 83,884 | 7,799 | 0 | |||||||||||||||||||
Loans held for sale | 1,140 | 0 | 1,140 | 0 | |||||||||||||||||||
Interest rate swap contracts | |||||||||||||||||||||||
Customer-related positions | 141,822 | 0 | 141,822 | 0 | |||||||||||||||||||
Risk participation agreements | 722 | 0 | 722 | 0 | |||||||||||||||||||
Foreign currency forward contracts | |||||||||||||||||||||||
Matched customer book | 90 | 0 | 90 | 0 | |||||||||||||||||||
Foreign currency loan | 9 | 0 | 9 | 0 | |||||||||||||||||||
Total | $ | 3,419,327 | $ | 154,253 | $ | 3,265,074 | $ | 0 | |||||||||||||||
Liabilities | |||||||||||||||||||||||
Interest rate swap contracts | |||||||||||||||||||||||
Customer-related positions | $ | 42,600 | $ | 0 | $ | 42,600 | $ | 0 | |||||||||||||||
Risk participation agreements | 1,230 | 0 | 1,230 | 0 | |||||||||||||||||||
Foreign currency forward contracts | |||||||||||||||||||||||
Matched customer book | 77 | 0 | 77 | 0 | |||||||||||||||||||
Foreign currency loan | 69 | 0 | 69 | 0 | |||||||||||||||||||
Total | $ | 43,976 | $ | 0 | $ | 43,976 | $ | 0 |
For the fair value measurements which are classified as Level 3 within the fair value hierarchy, the Company’s Treasury and Finance groups determine the valuation policies and procedures. For the valuation of the qualified zone academy bond, the2020.
The tables below presents a reconciliation for all assets andor liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and six months endedas of June 30, 20202021 or December 31, 2020.
Securities Available for Sale | ||||
(Dollars In Thousands) | ||||
Balance at January 1, 2019 | $ | 6,045 | ||
Gains and losses (realized/unrealized): |
| |||
Included in earnings | 55 | |||
|
| |||
Balance at June 30, 2019 | $ | 6,100 | ||
|
| |||
Balance at January 1, 2020 | $ | 6,310 | ||
Gains and losses (realized/unrealized): |
| |||
Included in net income | 55 | |||
Included in other comprehensive income | (86 | ) | ||
|
| |||
Balance at June 30, 2020 | $ | 6,279 | ||
|
| |||
Balance at April 1, 2019 | $ | 6,073 | ||
Gains and losses (realized/unrealized): | ||||
Included in earnings | 27 | |||
|
| |||
Balance at June 30, 2019 | $ | 6,100 | ||
|
| |||
Balance at April 1, 2020 | $ | 6,249 | ||
Gains and losses (realized/unrealized): | ||||
Included in earnings | 27 | |||
Included in other comprehensive income | 3 | |||
|
| |||
Balance at June 30, 2020 | $ | 6,279 | ||
|
|
Liabilities Measured on a Nonrecurring Basis
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in Active | Significant | |||||||||||||||
Description | Markets for | Other | Significant | |||||||||||||
Balance as of June 30, 2020 | Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Other real estate owned | $ | 40 | $ | — | $ | — | $ | 40 | ||||||||
Collateral-dependent impaired loans whose fair value is based upon appraisals | 13,011 | — | — | 13,011 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 13,051 | $ | — | $ | — | $ | 13,051 | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted Prices in Active | Significant | |||||||||||||||
Description | Markets for | Other | Significant | |||||||||||||
Balance as of December 31, 2019 | Identical Assets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Collateral-dependent impaired loans whose fair value is based upon appraisals | $ | 4,261 | $ | — | $ | — | 4,261 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
Description | Balance as of June 30, 2021 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Collateral-dependent impaired loans whose fair value is based upon appraisals | $ | 13,109 | $ | 0 | $ | 0 | $ | 13,109 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
Description | Balance as of December 31, 2020 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Collateral-dependent impaired loans whose fair value is based upon appraisals | $ | 11,036 | $ | 0 | $ | 0 | 11,036 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||
Description | Carrying Value as of June 30, 2021 | Fair Value as of June 30, 2021 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Loans, net of allowance for loan losses | $ | 9,485,699 | $ | 9,632,348 | $ | 0 | $ | 0 | $ | 9,632,348 | |||||||||||||||||||
FHLB stock | 10,601 | 10,601 | 0 | 10,601 | 0 | ||||||||||||||||||||||||
Bank-owned life insurance | 79,634 | 79,634 | 0 | 79,634 | 0 | ||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Deposits | $ | 13,250,433 | $ | 13,250,334 | $ | 0 | $ | 13,250,334 | $ | 0 | |||||||||||||||||||
FHLB advances | 14,323 | 14,072 | 0 | 14,072 | 0 | ||||||||||||||||||||||||
Escrow deposits from borrowers | 14,119 | 14,119 | 0 | 14,119 | 0 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||
Description | Carrying Value as of December 31, 2020 | Fair Value as of December 31, 2020 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Loans, net of allowance for loan losses | $ | 9,593,958 | $ | 9,779,195 | $ | 0 | $ | 0 | $ | 9,779,195 | |||||||||||||||||||
FHLB stock | 8,805 | 8,805 | 0 | 8,805 | 0 | ||||||||||||||||||||||||
Bank-owned life insurance | 78,561 | 78,561 | 0 | 78,561 | 0 | ||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Deposits | $ | 12,155,784 | $ | 12,155,843 | $ | 0 | $ | 12,155,843 | $ | 0 | |||||||||||||||||||
FHLB advances | 14,624 | 14,434 | 0 | 14,434 | 0 | ||||||||||||||||||||||||
Escrow deposits from borrowers | 13,425 | 13,425 | 0 | 13,425 | 0 |
The Company adopted the new revenue recognition standard under ASC 606 on January 1, 2019 using the modified retrospective approach.
The Company derives a portion of its noninterest income from contracts with customers as such, revenuewithin the scope of ASC,
|
|
|
|
|
Performance obligations
The Company has disaggregated its revenue
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Dollars In Thousands) | ||||||||||||||||
Insurance commissions | $ | 22,697 | $ | 24,135 | $ | 50,174 | $ | 48,897 | ||||||||
Service charges on deposit accounts | 4,364 | 6,771 | 10,462 | 13,175 | ||||||||||||
Trust and investment advisory fees | 5,194 | 4,980 | 10,289 | 9,608 | ||||||||||||
Debit card processing fees | 2,337 | 2,638 | 4,807 | 5,048 | ||||||||||||
Other non-interest income | 1,485 | 2,045 | 3,537 | 3,919 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total noninterest income in-scope of ASC 606 | 36,077 | 40,569 | 79,269 | 80,647 | ||||||||||||
Total noninterest income out-of-scope of ASC 606 | 11,580 | 5,063 | 1,757 | 12,785 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total noninterest income | $ | 47,657 | $ | 45,632 | $ | 81,026 | $ | 93,432 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Insurance commissions | $ | 23,664 | $ | 22,697 | $ | 51,811 | $ | 50,174 | |||||||||||||||
Service charges on deposit accounts | 5,708 | 4,364 | 11,075 | 10,462 | |||||||||||||||||||
Trust and investment advisory fees | 6,074 | 5,194 | 11,737 | 10,289 | |||||||||||||||||||
Debit card processing fees | 3,170 | 2,337 | 5,919 | 4,807 | |||||||||||||||||||
Other non-interest income | 2,123 | 1,485 | 3,915 | 3,537 | |||||||||||||||||||
Total noninterest income in-scope of ASC 606 | 40,739 | 36,077 | 84,457 | 79,269 | |||||||||||||||||||
Total noninterest income out-of-scope of ASC 606 | 4,994 | 11,580 | 16,488 | 1,757 | |||||||||||||||||||
Total noninterest income | $ | 45,733 | $ | 47,657 | $ | 100,945 | $ | 81,026 |
Cash Management
deposit account(s) for a given month. Earnings credits are only good for the given month. That is, if cash management fees for a given month are less than the month’s earnings credit, the remainder of the credit does not carry over to the following month. Cash management fees are recognized as revenue in the month that the services are provided. Cash Managementmanagement fees earned but not yet received amounted to $0.8$0.9 million and $1.0 million as of both June 30, 20202021 and December 31, 20192020 and were included in other assets.
Trust and Investment Advisory Fees
The Company offers investment management and trust services to individuals, institutions, small businesses and charitable institutions. Each investment management product is governed by its own contract along with a separate identifiable fee schedule unique to that product. The Company also offers additional services, such as estate settlement, financial planning, tax services, and other special services quoted at the customer’s request.
The asset management and/or custody fees are primarily based upon a percentage of the monthly valuation of the principal assets in the customer’s account. Customers are also charged a base fee which is prorated over a twelve-month period. Fees for additional or special services are generally fixed in nature and are charged as services are rendered. All revenue is recognized in correlation to the monthly management fee determinations or as transactional services are provided.
Three months ended June 30, 2020 | Six months ended June 30, 2020 | |||||||||||||||||||||||
Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | |||||||||||||||||||
(Dollars In Thousands) | ||||||||||||||||||||||||
Unrealized gains (losses) on securities available for sale: | ||||||||||||||||||||||||
Change in fair value of securities available for sale | $ | 511 | $ | (97 | ) | $ | 414 | $ | 34,313 | $ | (7,612 | ) | $ | 26,701 | ||||||||||
Less: reclassification adjustment for gains included in net income | 163 | (36 | ) | 127 | 285 | (63 | ) | 222 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net change in fair value of securities available for sale | 348 | (61 | ) | 287 | 34,028 | (7,549 | ) | 26,479 | ||||||||||||||||
Unrealized gains (losses) on cash flow hedges: | ||||||||||||||||||||||||
Change in fair value of cash flow hedges | 3,455 | (971 | ) | 2,484 | 47,011 | (13,215 | ) | 33,796 | ||||||||||||||||
Less: net cash flow hedge losses reclassified into interest income | 7,134 | (2,005 | ) | 5,129 | 10,246 | (2,880 | ) | 7,366 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net change in fair value of cash flow hedges | (3,679 | ) | 1,034 | (2,645 | ) | 36,765 | (10,335 | ) | 26,430 | |||||||||||||||
Defined benefit pension plans: | ||||||||||||||||||||||||
Amortization of actuarial net loss | 4,721 | (1,326 | ) | 3,395 | 4,721 | (1,326 | ) | 3,395 | ||||||||||||||||
Amortization of prior service cost | 12 | (3 | ) | 9 | 12 | (3 | ) | 9 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net change in other comprehensive income for defined benefit postretirement plans | 4,733 | (1,329 | ) | 3,404 | 4,733 | (1,329 | ) | 3,404 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total other comprehensive income | $ | 1,402 | $ | (356 | ) | $ | 1,046 | $ | 75,526 | $ | (19,213 | ) | $ | 56,313 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||||||||||||||||||||||
Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | |||||||||||||||||||
(Dollars In Thousands) | ||||||||||||||||||||||||
Unrealized gains (losses) on securities available for sale: | ||||||||||||||||||||||||
Change in fair value of securities available for sale | $ | 15,006 | $ | (3,354 | ) | $ | 11,652 | $ | 47,135 | $ | (10,454 | ) | $ | 36,681 | ||||||||||
Less: reclassification adjustment for gains included in net income | 1,966 | (448 | ) | 1,518 | 2,016 | (459 | ) | 1,557 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net change in fair value of securities available for sale | 13,040 | (2,906 | ) | 10,134 | 45,119 | (9,995 | ) | 35,124 | ||||||||||||||||
Unrealized gains (losses) on cash flow hedges: | ||||||||||||||||||||||||
Change in fair value of cash flow hedges | 16,054 | (4,513 | ) | 11,541 | 21,914 | (6,160 | ) | 15,754 | ||||||||||||||||
Less: net cash flow hedge losses reclassified into interest income | 231 | (65 | ) | 166 | 524 | (147 | ) | 377 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net change in fair value of cash flow hedges | 15,823 | (4,448 | ) | 11,375 | 21,390 | (6,013 | ) | 15,377 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total other comprehensive income | $ | 28,863 | $ | (7,354 | ) | $ | 21,509 | $ | 66,509 | $ | (16,008 | ) | $ | 50,501 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||
Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on securities available for sale: | |||||||||||||||||||||||||||||||||||
Change in fair value of securities available for sale | $ | 32,632 | $ | (7,203) | $ | 25,429 | $ | (62,347) | $ | 13,779 | $ | (48,568) | |||||||||||||||||||||||
Less: reclassification adjustment for gains included in net income | 1 | 0 | 1 | 1,165 | (257) | 908 | |||||||||||||||||||||||||||||
Net change in fair value of securities available for sale | 32,631 | (7,203) | 25,428 | (63,512) | 14,036 | (49,476) | |||||||||||||||||||||||||||||
Unrealized gains (losses) on cash flow hedges: | |||||||||||||||||||||||||||||||||||
Change in fair value of cash flow hedges | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Less: net cash flow hedge gains reclassified into interest income(1) | 8,219 | (2,310) | 5,909 | 16,493 | (4,636) | 11,857 | |||||||||||||||||||||||||||||
Net change in fair value of cash flow hedges | (8,219) | 2,310 | (5,909) | (16,493) | 4,636 | (11,857) | |||||||||||||||||||||||||||||
Defined benefit pension plans: | |||||||||||||||||||||||||||||||||||
Change in actuarial net loss | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Less: amortization of actuarial net loss | (3,538) | 995 | (2,543) | (7,075) | 1,989 | (5,086) | |||||||||||||||||||||||||||||
Less: amortization of prior service cost | 2,945 | (828) | 2,117 | 5,890 | (1,656) | 4,234 | |||||||||||||||||||||||||||||
Net change in other comprehensive income for defined benefit postretirement plans | 593 | (167) | 426 | 1,185 | (333) | 852 | |||||||||||||||||||||||||||||
Total other comprehensive income (loss) | $ | 25,005 | $ | (5,060) | $ | 19,945 | $ | (78,820) | $ | 18,339 | $ | (60,481) |
(1)Represents amortization of realized gains on terminated cash flow hedges for the three and six months ended June 30, 2021. The total realized gain of $41.2 million, net of tax, will be recognized in earnings through January 2023. The balance of this gain had amortized to $18.0 million, net of tax, at June 30, 2021.
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||
Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | Pre Tax Amount | Tax (Expense) Benefit | After Tax Amount | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on securities available for sale: | |||||||||||||||||||||||||||||||||||
Change in fair value of securities available for sale | $ | 511 | $ | (97) | $ | 414 | $ | 34,313 | $ | (7,612) | $ | 26,701 | |||||||||||||||||||||||
Less: reclassification adjustment for gains included in net income | 163 | (36) | 127 | 285 | (63) | 222 | |||||||||||||||||||||||||||||
Net change in fair value of securities available for sale | 348 | (61) | 287 | 34,028 | (7,549) | 26,479 | |||||||||||||||||||||||||||||
Unrealized gains (losses) on cash flow hedges: | |||||||||||||||||||||||||||||||||||
Change in fair value of cash flow hedges | 3,455 | (971) | 2,484 | 47,011 | (13,215) | 33,796 | |||||||||||||||||||||||||||||
Less: net cash flow hedge gains reclassified into interest income(1) | 7,134 | (2,005) | 5,129 | 10,246 | (2,880) | 7,366 | |||||||||||||||||||||||||||||
Net change in fair value of cash flow hedges | (3,679) | 1,034 | (2,645) | 36,765 | (10,335) | 26,430 | |||||||||||||||||||||||||||||
Defined benefit pension plans: | |||||||||||||||||||||||||||||||||||
Change in actuarial net loss | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Less: amortization of actuarial net loss | (4,721) | 1,326 | (3,395) | (4,721) | 1,326 | (3,395) | |||||||||||||||||||||||||||||
Less: amortization of prior service cost | (12) | 3 | (9) | (12) | 3 | (9) | |||||||||||||||||||||||||||||
Net change in other comprehensive income for defined benefit postretirement plans | 4,733 | (1,329) | 3,404 | 4,733 | (1,329) | 3,404 | |||||||||||||||||||||||||||||
Total other comprehensive income | $ | 1,402 | $ | (356) | $ | 1,046 | $ | 75,526 | $ | (19,213) | $ | 56,313 |
Unrealized Gains and (Losses) on Available for Sale Securities | Unrealized Gains and (Losses) on Cash Flow Hedges | Defined Benefit Pension Plans | Total | |||||||||||||
(In Thousands) | ||||||||||||||||
Beginning balance: January 1, 2020 | $ | 21,798 | $ | 15,624 | $ | 81,269 | $ | (43,847 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 26,701 | 33,796 | — | 60,497 | ||||||||||||
Less: Amounts reclassified from accumulated other comprehensive income | 222 | 7,366 | 3,404 | 4,184 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net current-period other comprehensive income | 26,479 | 26,430 | (3,404 | ) | 56,313 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Ending Balance: June 30, 2020 | $ | 48,277 | $ | 42,054 | $ | 77,865 | $ | 12,466 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Beginning Balance: January 1, 2019 | $ | (19,360 | ) | $ | 2,988 | $ | 59,389 | $ | (75,761 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 36,681 | 15,754 | — | 52,435 | ||||||||||||
Less: Amounts reclassified from accumulated other comprehensive income | 1,557 | 377 | — | 1,934 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net current-period other comprehensive income | 35,124 | 15,377 | — | 50,501 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Ending Balance: June 30, 2019 | $ | 15,764 | $ | 18,365 | $ | 59,389 | $ | (25,260 | ) | |||||||
|
|
|
|
|
|
|
|
Unrealized Gains and (Losses) on Available for Sale Securities | Unrealized Gains and (Losses) on Cash Flow Hedges | Defined Benefit Pension Plans | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Beginning Balance: January 1, 2021 | $ | 45,672 | $ | 29,815 | $ | (21,253) | $ | 54,234 | |||||||||||||||
Other comprehensive loss before reclassifications | (48,568) | 0 | 0 | (48,568) | |||||||||||||||||||
Less: Amounts reclassified from accumulated other comprehensive income | 908 | 11,857 | (852) | 11,913 | |||||||||||||||||||
Net current-period other comprehensive (loss) income | (49,476) | (11,857) | 852 | (60,481) | |||||||||||||||||||
Ending Balance: June 30, 2021 | $ | (3,804) | $ | 17,958 | $ | (20,401) | $ | (6,247) | |||||||||||||||
Beginning Balance: January 1, 2020 | $ | 21,798 | $ | 15,624 | $ | (81,269) | $ | (43,847) | |||||||||||||||
Other comprehensive income before reclassifications | 26,701 | 33,796 | 0 | 60,497 | |||||||||||||||||||
Less: Amounts reclassified from accumulated other comprehensive income (loss) | 222 | 7,366 | (3,404) | 4,184 | |||||||||||||||||||
Net current-period other comprehensive income | 26,479 | 26,430 | 3,404 | 56,313 | |||||||||||||||||||
Ending Balance: June 30, 2020 | $ | 48,277 | $ | 42,054 | $ | (77,865) | $ | 12,466 |
Results of operations and selected financial information by segment and reconciliation to the consolidated financial statements as of and for the three months ended June 30, 20202021 and 2019,2020, and for the six months ended June 30, 20202021 and 2019,2020, was as follows:
As of and for the three months ended June 30, | ||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Banking Business | Insurance Agency Business | Other / Eliminations | Total | Banking Business | Insurance Agency Business | Other / Eliminations | Total | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Net interest income | $ | 98,755 | $ | — | $ | — | $ | 98,755 | $ | 103,523 | $ | — | $ | — | $ | 103,523 | ||||||||||||||||
Provision for loan losses | 8,600 | — | — | 8,600 | 1,500 | — | — | 1,500 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net interest income after provision for loan losses | 90,155 | — | — | 90,155 | 102,023 | — | — | 102,023 | ||||||||||||||||||||||||
Noninterest income | 23,779 | 23,886 | (8 | ) | 47,657 | 21,143 | 24,489 | — | 45,632 | |||||||||||||||||||||||
Noninterest expense | 81,713 | 20,084 | (1,032 | ) | 100,765 | 83,205 | 19,200 | (835 | ) | 101,570 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before provision for income taxes | 32,221 | 3,802 | 1,024 | 37,047 | 39,961 | 5,289 | 835 | 46,085 | ||||||||||||||||||||||||
Income tax provision | 6,121 | 1,076 | — | 7,197 | 9,517 | 1,515 | — | 11,032 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income | $ | 26,100 | $ | 2,726 | $ | 1,024 | $ | 29,850 | $ | 30,444 | $ | 3,774 | $ | 835 | $ | 35,053 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total assets | $ | 13,867,746 | $ | 193,320 | $ | (64,543 | ) | $ | 13,996,523 | $ | 11,397,392 | $ | 164,576 | $ | (48,284 | ) | $ | 11,513,684 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total liabilities | $ | 12,314,286 | $ | 53,150 | $ | (64,543 | ) | $ | 12,302,893 | $ | 9,975,081 | $ | 35,228 | $ | (48,284 | ) | $ | 9,962,025 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
For the six months ended June 30, | ||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Banking Business | Insurance Agency Business | Other / Eliminations | Total | Banking Business | Insurance Agency Business | Other / Eliminations | Total | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Net interest income | $ | 198,901 | $ | — | $ | — | $ | 198,901 | $ | 206,195 | $ | — | $ | — | $ | 206,195 | ||||||||||||||||
Provision for loan losses | 37,200 | — | — | 37,200 | 4,500 | — | — | 4,500 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net interest income after provision for loan losses | 161,701 | — | — | 161,701 | 201,695 | — | — | 201,695 | ||||||||||||||||||||||||
Noninterest income | 30,647 | 50,408 | (29 | ) | 81,026 | 43,405 | 50,048 | (21 | ) | 93,432 | ||||||||||||||||||||||
Noninterest expense | 160,178 | 37,725 | (1,966 | ) | 195,937 | 169,096 | 39,067 | (1,764 | ) | 206,399 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before provision for income taxes | 32,170 | 12,683 | 1,937 | 46,790 | 76,004 | 10,981 | 1,743 | 88,728 | ||||||||||||||||||||||||
Income tax provision | 4,906 | 3,589 | — | 8,495 | 17,576 | 3,134 | — | 20,710 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income | $ | 27,264 | $ | 9,094 | $ | 1,937 | $ | 38,295 | $ | 58,428 | $ | 7,847 | $ | 1,743 | $ | 68,018 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17. Subsequent Events
Plan of Reorganization and Conversion
On June 12, 2020, the Board of Trustees of the Company adopted a Plan of Conversion (the “Plan”). Pursuant to the Plan, the Company will reorganize from a mutual holding company into a publicly traded stock form of organization. In connection with the reorganization, the Company will transfer to Eastern Bankshares, Inc., a recently formed Massachusetts corporation, 100% of the Bank’s common stock, and immediately thereafter the Company will merge into Eastern Bankshares, Inc. Pursuant to the Plan, Eastern Bankshares, Inc. will issue shares of common stock in a public offering. Eastern Bankshares, Inc. will offer 100% of its outstanding common stock to the Company’s eligible depositors, the employee stock ownership plan (“ESOP”) and certain other persons. Eastern Bankshares, Inc. will determine the range of the offering value and the number of shares of common stock to be issued based upon an independent appraiser’s valuation. The stock will be priced at $10.00 per share. In addition, the Boards of Directors of Eastern Bankshares, Inc. and the Company have adopted an ESOP, which is permitted to subscribe for up to 8% of the common stock to be outstanding following the completion of the reorganization and the offering. The Plan provides for Eastern Bankshares, Inc. to donate to the Eastern Bank Charitable Foundation (the “Foundation”) immediately after the offering a number of authorized but previously unissued shares of Eastern Bankshares, Inc. common stock equal to 4% of the number of shares of common stock that will be issued and outstanding immediately after the offering (including the shares donated to the Foundation) (the “Stock Donation”).
On August 6, 2020, the corporators of the Company separately approved the Plan and the Stock Donation. The Board of Governors of the Federal Reserve System approved the application of Eastern Bankshares, Inc. to become a bank holding company upon the completion of the conversion, although the approval of the Federal Reserve Board is required before Eastern Bankshares, Inc. can consummate the offering. The Company has filed an application with respect to the offering with the Massachusetts Commissioner of Banks, and the Massachusetts Commissioner of Banks authorized Eastern Bankshares, Inc. to commence the offering. However, final regulatory approval is required before Eastern Bankshares, Inc. can consummate the offering. The subscription offering commenced on August 18, 2020 and expired on September 16, 2020. The Company expects that the offering will close and the conversion will be completed in October 2020.
The Plan provides that eligible account holders will receive an interest in a liquidation account maintained by Eastern Bankshares, Inc. in an amount equal to (i) the Company’s ownership interest in the Bank’s total shareholders’ equity as of the date of the latest statement of financial position included in the latest prospectus filed with the U.S. Securities and Exchange Commission for the offering, plus (ii) the value of the net assets of the Company as of the date of the latest statement of financial position of the Company prior to the consummation of the conversion (excluding its ownership of the Bank). The Plan also provides for the establishment of a parallel liquidation account maintained at the Bank to support Eastern Bankshares, Inc.’s liquidation account in the event Eastern Bankshares, Inc. does not have sufficient assets to fund its obligations under Eastern Bankshares, Inc.’s liquidation account. Eastern Bankshares, Inc. and the Bank will hold the liquidation accounts for the benefit of eligible account holders who continue to maintain deposits in the Bank after the conversion. Following the completion of the offering, Eastern Bankshares, Inc. will not be permitted to pay dividends on its capital stock if the shareholders’ equity of Eastern Bankshares, Inc. would be reduced below the amount of the liquidation account. The liquidation account will be reduced annually to the extent that eligible account holders have reduced their qualifying deposits. Subsequent increases will not restore an eligible account holder’s interest in the liquidation accounts. In the event of a complete liquidation of the Bank, and only in such event, each account holder will be entitled to receive a distribution from the liquidation account in an amount proportionate to the adjusted qualifying account balances then held.
Costs associated with the stock offering have been deferred and will be deducted from the proceeds of the shares sold in the stock issuance. If the stock offering is not completed, all costs will be charged to expense. At June 30, 2020, approximately $4.5 million of stock offering costs had been incurred and deferred.
As of and for the three months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Banking Business | Insurance Agency Business | Other / Eliminations | Total | Banking Business | Insurance Agency Business | Other / Eliminations | Total | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 104,608 | $ | 0 | $ | 0 | $ | 104,608 | $ | 98,755 | $ | 0 | $ | 0 | $ | 98,755 | |||||||||||||||||||||||||||||||
(Release of) provision for loan losses | (3,300) | 0 | 0 | (3,300) | 8,600 | 0 | 0 | 8,600 | |||||||||||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 107,908 | 0 | 0 | 107,908 | 90,155 | 0 | 0 | 90,155 | |||||||||||||||||||||||||||||||||||||||
Noninterest income | 21,567 | 24,166 | 0 | 45,733 | 23,779 | 23,886 | (8) | 47,657 | |||||||||||||||||||||||||||||||||||||||
Noninterest expense | 87,799 | 20,496 | (960) | 107,335 | 81,713 | 20,084 | (1,032) | 100,765 | |||||||||||||||||||||||||||||||||||||||
Income before provision for income taxes | 41,676 | 3,670 | 960 | 46,306 | 32,221 | 3,802 | 1,024 | 37,047 | |||||||||||||||||||||||||||||||||||||||
Income tax provision | 10,464 | 1,033 | 0 | 11,497 | 6,121 | 1,076 | 0 | 7,197 | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 31,212 | $ | 2,637 | $ | 960 | $ | 34,809 | $ | 26,100 | $ | 2,726 | $ | 1,024 | $ | 29,850 | |||||||||||||||||||||||||||||||
Total assets | $ | 16,905,267 | $ | 209,416 | $ | (67,230) | $ | 17,047,453 | $ | 13,867,746 | $ | 193,320 | $ | (64,543) | $ | 13,996,523 | |||||||||||||||||||||||||||||||
Total liabilities | $ | 13,628,092 | $ | 55,969 | $ | (67,230) | $ | 13,616,831 | $ | 12,314,286 | $ | 53,150 | $ | (64,543) | $ | 12,302,893 |
For the six months ended June 30, 2021 2020 Banking
BusinessInsurance
Agency
BusinessOther /
EliminationsTotal Banking
BusinessInsurance
Agency
BusinessOther /
EliminationsTotal (In thousands) Net interest income $ 204,699 $ 0 $ 0 $ 204,699 $ 198,901 $ 0 $ 0 $ 198,901 (Release of) provision for loan losses (3,880) 0 0 (3,880) 37,200 0 0 37,200 Net interest income after provision for loan losses 208,579 0 0 208,579 161,701 0 0 161,701 Noninterest income 48,527 52,450 (32) 100,945 30,647 50,408 (29) 81,026 Noninterest expense 163,074 40,307 (1,997) 201,384 160,178 37,725 (1,966) 195,937 Income before provision for income taxes 94,032 12,143 1,965 108,140 32,170 12,683 1,937 46,790 Income tax provision 22,257 3,411 0 25,668 4,906 3,589 0 8,495 Net income $ 71,775 $ 8,732 $ 1,965 $ 82,472 $ 27,264 $ 9,094 $ 1,937 $ 38,295
Forward-Looking Statements
the “Company,” we mean Eastern Bankshares, Inc., a Massachusetts corporation, and its consolidated subsidiaries, taken as a whole, unless the context otherwise indicates.
three and six months ended June 30, 2021.
As of June 30, 2020 | As of December 31, 2019 | |||||||
(Dollars in thousands) | ||||||||
Selected Financial Condition Data: |
| |||||||
Total assets | $ | 13,996,523 | $ | 11,628,775 | ||||
Cash and cash equivalents | 1,432,561 | 362,602 | ||||||
Trading securities | — | 961 | ||||||
Securities available for sale | 1,600,354 | 1,508,236 | ||||||
Loans, net of allowance for loan losses and unamortized premiums, net of unearned discounts and deferred fees | 9,862,980 | 8,899,184 | ||||||
Federal Home Loan Bank stock, at cost | 8,805 | 9,027 | ||||||
Goodwill and other intangibles, net | 376,331 | 377,734 | ||||||
Total liabilities | 12,302,893 | 10,028,622 | ||||||
Total deposits | 11,846,765 | 9,551,392 | ||||||
Total borrowings | 29,155 | 235,395 | ||||||
Total equity | 1,693,630 | 1,600,153 | ||||||
Nonperforming loans | 55,395 | 43,775 | ||||||
Nonperforming assets | 55,435 | 43,775 | ||||||
Six months ended June 30, | ||||||||
2020 | 2019 | |||||||
(Dollars in thousands) | ||||||||
Selected Operating Data: |
| |||||||
Interest and dividend income | $ | 208,092 | $ | 224,321 | ||||
Interest expense | 9,191 | 18,126 | ||||||
|
|
|
| |||||
Net interest income | 198,901 | 206,195 | ||||||
Provision for loan losses | 37,200 | 4,500 | ||||||
|
|
|
| |||||
Net interest income after provision for loan losses | 161,701 | 201,695 | ||||||
Noninterest income | 81,026 | 93,432 | ||||||
Noninterest expense | 195,937 | 206,399 | ||||||
|
|
|
| |||||
Income before income taxes | 46,790 | 88,728 | ||||||
Provision for income taxes | 8,495 | 20,710 | ||||||
|
|
|
| |||||
Net income | $ | 38,295 | $ | 68,018 | ||||
|
|
|
|
As of and for the six months ended June 30, | ||||||||
2020 | 2019 | |||||||
Performance Ratios: | ||||||||
Return on average assets (1) (6) | 0.61 | % | 1.21 | % | ||||
Return on average equity (2) (6) | 4.64 | % | 9.20 | % | ||||
Interest rate spread (FTE) (3) (6) | 3.38 | % | 3.80 | % | ||||
Net interest margin (FTE) (4) (6) | 3.49 | % | 4.03 | % | ||||
Noninterest expenses to average assets (6) | 3.11 | % | 3.68 | % | ||||
Efficiency ratio (5) | 70.00 | % | 68.89 | % | ||||
Average interest-earning assets to average interest-bearing liabilities | 172.86 | % | 165.60 | % | ||||
Capital Ratios: |
| |||||||
Average equity to average assets | 13.09 | % | 13.16 | % | ||||
Total capital to risk weighted assets | 14.00 | % | 12.79 | % | ||||
Tier 1 capital to risk weighted assets | 12.77 | % | 11.89 | % | ||||
Common equity tier 1 capital to risk weighted assets | 12.77 | % | 11.89 | % | ||||
Tier 1 capital to average assets | 9.99 | % | 10.99 | % | ||||
Asset Quality Ratios: |
| |||||||
Allowance for loan losses as a percentage of total loans | 1.17 | % | 0.92 | % | ||||
Allowance for loan losses as a percentage of nonperforming loans | 210.55 | % | 251.34 | % | ||||
Net charge-offs (recoveries) to average outstanding loans during the period (6) | 0.06 | % | 0.06 | % | ||||
Nonperforming loans as a percentage of total loans | 0.56 | % | 0.36 | % | ||||
Nonperforming loans as a percentage of total assets | 0.40 | % | �� | 0.29 | % | |||
Total nonperforming assets as a percentage of total assets | 0.40 | % | 0.29 | % |
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
(In thousands, except per share data) | |||||||||||
Selected Financial Position Data: | |||||||||||
Total assets | $ | 17,047,453 | $ | 15,964,190 | |||||||
Cash and cash equivalents | 1,564,247 | 2,054,070 | |||||||||
Securities available for sale | 4,848,781 | 3,183,861 | |||||||||
Loans, net of allowance for loan losses and unamortized premiums, net of unearned discounts and deferred fees | 9,485,699 | 9,593,958 | |||||||||
FHLB stock, at cost | 10,601 | 8,805 | |||||||||
Goodwill and other intangibles, net | 380,402 | 376,534 | |||||||||
Total liabilities | 13,616,831 | 12,536,138 | |||||||||
Total deposits | 13,250,433 | 12,155,784 | |||||||||
Total borrowings | 28,442 | 28,049 | |||||||||
Total shareholders’ equity | 3,430,622 | 3,428,052 | |||||||||
Nonperforming loans | 41,632 | 43,252 | |||||||||
Nonperforming assets | 41,670 | 43,252 | |||||||||
Per Share Data: | |||||||||||
Book value | $ | 18.37 | $ | 18.36 | |||||||
Tangible book value (1) | $ | 16.33 | $ | 16.34 |
|
|
|
|
|
(1)Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” in this Part I, Item 2.
Six Months Ended June 30, | |||||||||||
2021 | 2020 | ||||||||||
(In thousands, except per share data) | |||||||||||
Selected Operating Data: | |||||||||||
Interest and dividend income | $ | 206,814 | $ | 208,092 | |||||||
Interest expense | 2,115 | 9,191 | |||||||||
Net interest income | 204,699 | 198,901 | |||||||||
(Release of) provision for loan losses | (3,880) | 37,200 | |||||||||
Net interest income after provision for loan losses | 208,579 | 161,701 | |||||||||
Noninterest income | 100,945 | 81,026 | |||||||||
Noninterest expense | 201,384 | 195,937 | |||||||||
Income before income taxes | 108,140 | 46,790 | |||||||||
Provision for income taxes | 25,668 | 8,495 | |||||||||
Net income | $ | 82,472 | $ | 38,295 | |||||||
Per Share Data: | |||||||||||
Basic earnings per share | $ | 0.48 | $ | — | |||||||
Diluted earnings per share | $ | 0.48 | $ | — |
As of and for the Six Months Ended June 30, | |||||||||||
2021 | 2020 | ||||||||||
Performance Ratios: | |||||||||||
Return on average assets (1) (6) | 1.00 | % | 0.61 | % | |||||||
Return on average equity (2) (6) | 4.87 | % | 4.64 | % | |||||||
Interest rate spread (FTE) (3) (6) | 2.67 | % | 3.38 | % | |||||||
Net interest margin (FTE) (4) (6) | 2.70 | % | 3.49 | % | |||||||
Noninterest expenses to average assets (6) | 2.45 | % | 3.11 | % | |||||||
Efficiency ratio (5) | 65.89 | % | 70.00 | % | |||||||
Average interest-earning assets to average interest-bearing liabilities | 204.53 | % | 172.86 | % | |||||||
Capital Ratios: | |||||||||||
Average equity to average assets | 20.60 | % | 13.09 | % | |||||||
Total capital to risk weighted assets | 29.13 | % | 14.00 | % | |||||||
Tier 1 capital to risk weighted assets | 28.08 | % | 12.77 | % | |||||||
Common equity tier 1 capital to risk weighted assets | 28.08 | % | 12.77 | % | |||||||
Tier 1 capital to average assets | 18.66 | % | 9.99 | % | |||||||
Asset Quality Ratios: | |||||||||||
Allowance for loan losses as a percentage of total loans | 1.10 | % | 1.17 | % | |||||||
Allowance for loan losses as a percentage of nonperforming loans | 253.74 | % | 210.55 | % | |||||||
Net charge-offs to average outstanding loans during the period (6) | 0.07 | % | 0.06 | % | |||||||
Nonperforming loans as a percentage of total loans | 0.43 | % | 0.56 | % | |||||||
Nonperforming loans as a percentage of total assets | 0.24 | % | 0.40 | % | |||||||
Total nonperforming assets as a percentage of total assets | 0.24 | % | 0.40 | % |
Our insurance agency business consists of insurance-related activities, acting as an independent agent in offering commercial, personal and employee benefits insurance products to individual and commercial clients.
|
|
|
|
|
•Commercial and industrial: Loans in this category consist of revolving and term loans extended to businesses and corporate enterprises for the purpose of financing working capital, facilitating equipment purchases and facilitating acquisitions. As of June 30, 2021 and December 31, 2020, we had total commercial and industrial loans of $1.7 billion and $2.0 billion, representing 18.1% and 20.6%, respectively, of our total loans. The primary risk associated with commercial and industrial loans is the ability of borrowers to achieve business results consistent with those projected at origination. Our primary focus for commercial and industrial loans is middle-market companies located in the markets we serve. In addition, we participate in the syndicated loan market and the SNC Program. As of June 30, 2021 and December 31, 2020, our SNC Program portfolio totaled $374.4 million and $425.1 million, or 21.5% and 21.3%, respectively, of our commercial and industrial portfolio, and 42.6% and 46.4%, respectively, of our SNC Program portfolio were loans to borrowers headquartered in our primary lending market. Our commercial and industrial portfolio also includes our Asset Based Lending Portfolio (“ABL Portfolio”). As of June 30, 2021 and December 31, 2020, our ABL Portfolio totaled $141.6 million and $134.5 million, or 8.1% and 6.7%, respectively, of our commercial and industrial portfolio. Our commercial and industrial portfolio also includes a portion of our PPP loans. As of June 30, 2021 and December 31, 2020, the amount of PPP loans included in our commercial and industrial portfolio was $366.1 million and $568.8 million, respectively.
|
|
|
•Consumer home equity: Loans in this category consist of home equity lines of credit and home equity loans. As of June 30, 2021 and December 31, 2020, we had total consumer home equity loans of $834.9 million and $868.3 million, representing 8.7% and 8.9%, respectively, of our total loans. Home equity lines of credit are granted for ten years with monthly interest-only repayment requirements. Home equity lines of credit can be converted to term loans that are fully amortized. Underwriting considerations are materially consistent with those utilized in the residential real estate category. Collateral consists of a senior or subordinate lien on owner-occupied residential property.
•We offer a variety of deposit, treasury management, electronic banking, interest rate protection and foreign exchange products to our customers. Deposit products include checking products, both interest-bearing and noninterest-bearing, as well as money market deposits, savings deposits and certificates of deposits. Our treasury management products include a variety of cash management and payment products. Our interest rate protection and foreign exchange products include interest rate swaps and currency related transactions. As of June 30, 20202021 and December 31, 2019,2020, our total commercial deposits were $4.6$5.0 billion and $3.2$4.4 billion, respectively,respectively. During the three and six months ended June 30, 2021 our commercial noninterest income duringwas $4.1 million and $8.3 million, respectively, compared to $5.0 million and $8.4 million for the three and six months ended June 30, 2020, and year ended December 31, 2019 were $21.1 million, $26.1 million and $29.8 million, respectively. As of June 30, 2020, there were no Federal funds provided to us by financial institution customers. During the month of March 2020, Federal funds provided to us by our financial institution customers were transferred to interest-bearing deposits and totaled $299.5 million as of June 30, 2020. As of December 31, 2019, Federal funds provided to us by our financial institution customers were $201.1 million.
•We offer a wide variety of deposit products and services to our consumer customers. We service these customers through our 8986 branches located in eastern Massachusetts and New Hampshire, through our call center in our facility in Lynn, MA and through our online and mobile banking applications.
•Through our Eastern Wealth Management division, we provide a wide range of trust services, including (i) managing customer investments, (ii) serving as custodian for customer assets and (iii) providing other fiduciary services, including serving as the trustee and personal representative of estates. As of June 30, 20202021 and December 31, 2019,2020, we held $2.6$3.0 billion and $2.7$2.9 billion, respectively, of assets in a fiduciary, custodial or agency capacity for customers, which are not our assets and therefore not included on the consolidated balance sheets included in this Quarterly Report.Report on Form 10-Q. For the three and six months ended June 30, 2020 and the year ended December 31, 2019,2021, we had noninterest income of $5.2 million, $10.3$6.1 million and $19.7$11.7 million, respectively, from providing these services.
Group LLC.Group. Our insurance products include commercial property and liability, workers compensation, life, accident and health and automobile insurance. We also offer a wide range of employee benefits products and services, including professional advice related to health care cost management, employee engagement and retirement and executive services. As an agency business, we do not assume any underwriting or insurance risk. The commissions we earn on the sale of these insurance products and services is the most significant portion of our noninterest income, representing $22.7 million, $50.2$23.7 million and $90.6$51.8 million, respectively, or 47.6%, 62.0%51.7% and 49.7%51.3%, respectively of our noninterest income during the three and six months ended June 30, 20202021. Comparatively, such income represented $22.7 million and year$50.2 million, or 47.6% and 61.9%, respectively, of our noninterest income during the three and six months ended December 31, 2019.June 30, 2020. Our insurance business operates through 22 25 non-branch offices located primarily in eastern Massachusetts and had 406396 full-time equivalent employees as of June 30, 2020.2021.
OutlookAcquisitions
Trust Company, a Massachusetts-chartered stock bank headquartered in Medford, Massachusetts with $6.4 billion in assets, $5.4 billion in deposits and 27 full-service branches in Massachusetts as of December 31, 2020. Pursuant to the
Our Colleagues. For our colleagues, we have enabled more than half of our employees to work remotely and we are providing premium pay for those colleagues who travel to our workplaces to serve in customer-facing positions or other positions that require them to work on-site. We have taken significant measures to ensure the health of our colleagues who must work in our branches, including promoting online and mobile banking and automatic teller machine/interactive teller machine transactions in an effort to limit in-branch transactions and limiting access to lobbies in branches with drive-through banking.
Our Borrowers. In light of the COVID-19 pandemic, we have temporarily modified our practices with respect to the collection of delinquent loans to assist our customers during this difficult economic time, and during the threesix months ended June 30, 2020,2021, Eastern Insurance Group completed two insurance agency acquisitions. The aggregate purchase price and goodwill recorded as a result of the acquisitions were not material.
For our retail customers, we suspended all collection of overdue payments beginning March 16, 2020, including residential property foreclosure$3.5 million and related property sales. We resumed collection activities with respect to delinquent consumer loans beginning in late July 2020.
For our commercial$4.1 million, respectively. The following table depicts Century-related merger and small business customers, starting in March 2020, we began modifying the terms of loans with customers impactedacquisition costs broken down by the COVID-19 pandemic. Through June 30, 2020, we had modified approximately $946.1 millionline item on the consolidated statements of loans, ofincome for the periods indicated in which approximately 56% were for full payment deferrals (both interestthe costs are included:
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | ||||||||||
(In thousands) | |||||||||||
Salaries and employee benefits | $ | 2 | $ | 2 | |||||||
Data processing | 1,084 | 1,084 | |||||||||
Professional services | 2,393 | 2,978 | |||||||||
Total | $ | 3,479 | $ | 4,064 |
As of the date of this Quarterly Report, we are unable to reasonably estimate the aggregate amount of loans that will likely become delinquent after the respective deferral period. The following table shows certain data, as of June 30, 2020, related to loans to our borrowersa participating lender in the industry categories that we believe will likely experienceSBA’s Paycheck Protection Program. We concluded PPP loan originations during the most adverse effects of the COVID-19 pandemic. Loans included in the table that had been modified as of June 30, 2020 represented approximately 28.9% of our aggregate outstanding loan balances to all borrowers in those categories as of June 30, 2020. However, the table does not include all loans that had been modified on or before June 30, 2020.
Loan Balance | Credit Exposure (1) | Number of Borrowers (2) | COVID-19 Modification % (3) | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial and Industrial: Commercial and Business Banking | ||||||||||||||||
Restaurants | $ | 148,373 | $ | 156,747 | 420 | 60.6 | % | |||||||||
Construction contractors | 105,127 | 281,435 | 1,036 | 11.0 | % | |||||||||||
Non-essential retail | 41,859 | 101,736 | 436 | 2.5 | % | |||||||||||
Entertainment and recreation | 34,368 | 49,664 | 158 | 31.1 | % | |||||||||||
Educational and child care services | 16,219 | 50,948 | 196 | 5.3 | % | |||||||||||
Private medical and dental offices | 16,299 | 34,602 | 294 | 20.2 | % | |||||||||||
Water and air passenger transportation | 19,811 | 30,557 | 12 | 0.1 | % | |||||||||||
Auto and other vehicle dealerships | 7,557 | 10,138 | 21 | — | % | |||||||||||
Hotels | 377 | 527 | 12 | 37.3 | % | |||||||||||
Commercial Real Estate: Commercial and Business Banking | ||||||||||||||||
Retail | 437,267 | 458,839 | 298 | 26.7 | % | |||||||||||
Hotels | 179,577 | 181,076 | 45 | 37.6 | % | |||||||||||
Auto dealerships | 78,152 | 80,361 | 36 | 2.8 | % | |||||||||||
Restaurants | 51,566 | 52,766 | 67 | 48.5 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,136,552 | $ | 1,489,396 | 3,031 | 28.9 | % | |||||||||
|
|
|
|
|
|
|
|
|
|
|
During the quartersix months ended June 30, 2020, we originated $1.1 billion of loans to approximately 8,100 borrowers under2021 as the SBA announced that PPP under the CARES Act.funds were exhausted. The vast majority of our PPP borrowers are existing commercial and small business borrowers, non-profit customers, retail banking customers and clients of our Eastern Wealth Management division and Eastern Insurance Group LLC.Group.
We received approximately $35.8 million of PPP loan origination fees from the SBA. We also deferredThe following table shows certain origination costs, totaling $3.5 million,data related to PPP loans.
PPP Loans Originated During the | Total | ||||||||||||||||
Six Months Ended June 30, 2021 | Year ended December 31, 2020 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Number of loans originated | 6,628 | 8,902 | 15,530 | ||||||||||||||
Original balance of loans originated | $ | 543,212 | $ | 1,167,137 | $ | 1,710,349 | |||||||||||
Current balance of loans originated in respective periods | 540,173 | 285,611 | 825,784 | ||||||||||||||
Total SBA fees received(1) | 28,677 | 37,224 | 65,901 | ||||||||||||||
SBA fees recognized in interest income related to loans originated in respective periods(2) | 2,249 | 33,650 | 35,899 | ||||||||||||||
Unaccreted SBA fees related to loans originated in respective periods | 26,427 | 3,574 | 30,001 |
Loan Size | Loan Balance | Number of Loans | Fees Collected | |||||||||
(Dollars in thousands) | ||||||||||||
$0 to $50 thousand | $ | 95,528 | 4,987 | $ | 4,826 | |||||||
$50 thousand to $150 thousand | 148,994 | 1,731 | 7,419 | |||||||||
$150 thousand to $1 million | 410,872 | 1,176 | 15,374 | |||||||||
$1 million to $2 million | 190,254 | 137 | 5,618 | |||||||||
$2 million to $5 million | 176,277 | 59 | 1,744 | |||||||||
Over $5 million | 78,256 | 13 | 785 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,100,181 | 8,103 | $ | 35,766 | |||||||
|
|
|
|
|
|
Our Operating Results.2021:
Loan Size | Loan Balance | Number of Loans | ||||||||||||
(Dollars in thousands) | ||||||||||||||
$0 to $50 thousand | $ | 110,281 | 6,454 | |||||||||||
$50 thousand to $150 thousand | 125,647 | 1,452 | ||||||||||||
$150 thousand to $1 million | 338,263 | 1,020 | ||||||||||||
$1 million to $2 million | 112,351 | 79 | ||||||||||||
$2 million to $5 million | 118,961 | 45 | ||||||||||||
Over $5 million | 20,281 | 3 | ||||||||||||
Total | $ | 825,784 | 9,053 |
Industry | Loan Balance | Number of Loans | ||||||||||||
(Dollars in thousands) | ||||||||||||||
Accommodation & food services | $ | 129,421 | 880 | |||||||||||
Construction | 114,574 | 1,205 | ||||||||||||
Health care & social assistance | 97,958 | 783 | ||||||||||||
Professional, scientific & technical services | 92,711 | 1,324 | ||||||||||||
Other services | 76,691 | 1,320 | ||||||||||||
Manufacturing | 61,301 | 338 | ||||||||||||
Administrative & support | 56,378 | 481 | ||||||||||||
Wholesale trade | 44,260 | 234 | ||||||||||||
Retail trade | 38,314 | 814 | ||||||||||||
Transportation & warehousing | 28,954 | 560 | ||||||||||||
Real estate, rental & leasing | 27,483 | 366 | ||||||||||||
All other | 57,739 | 748 | ||||||||||||
Total | $ | 825,784 | 9,053 |
During March 2020, the Federal Reserve took multiple steps to lower interest rates and reduced the target range for the federal funds rate to between 0.0% and 0.25%, compared to the previous target of between 1.00% and 1.25%. These interest rate reductions, combined with the decline in longer term rates, will lower our net interest income over time from the levels we experienced in the year ended December 31, 2019.
Our loan loss provision for the quarter ended June 30, 2020 was $8.6 million compared to $28.6 million for the quarter ended March 31, 2020. We experienced negative migrations in our loan risk ratings in the quarter ended June 30, 2020, although the extent of negative migrations was less than we experienced in the quarter ended March 31, 2020. We expect our loan loss provision to be greater in the remainder of the year ending December 31, 2020 as compared to comparable prior periods, as the positive impacts of the modifications and PPP loans wane. The economic uncertainties caused by the COVID-19 pandemic are significant, and the timing and pace of the economic recovery both locally and nationally will determine the severity and timing of our future loan losses.
Our Communities. To continue providing critical banking services in underbanked inner-city communities served by branches without drive-through banking capabilities, we have committed to remaining open in these communities to ensure our customers continue to have a place to bank. To further support our communities, the Eastern Bank Charitable Foundation has directed approximately $8 million through June 30, 2020 in charitable donations to help address food, shelter, small business and housing stability, particularly for vulnerable populations, as well as providing help to public health organizations fighting to contain the spread of COVID-19.
Non-GAAP Measures
We present certain non-GAAP financial measures, which are usedmanagement uses to evaluate our performance and which exclude the effects of certain transactions, non-cash items and GAAP adjustments that we believe are unrelated to our core business and are therefore not necessarily indicative of our current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into our core businesses andas well as underlying trends that may, to some extent, be obscured by inclusion of such items.
items in the corresponding GAAP financial measures.
There were no OREO gains or stock donations to the Foundation during the periods presented in this Quarterly Report on Form 10-Q.
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Net income (GAAP) | $ | 29,850 | $ | 35,053 | $ | 38,295 | $ | 68,018 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP adjustments: | ||||||||||||||||
Noninterest income components: | ||||||||||||||||
(Income) from investments held in rabbi trusts | (7,745 | ) | (1,822 | ) | (1,002 | ) | (5,969 | ) | ||||||||
(Gain) on sales of securities available for sale, net | (163 | ) | (1,966 | ) | (285 | ) | (2,016 | ) | ||||||||
(Gains) losses on sale of other assets | 27 | 102 | (2 | ) | 73 | |||||||||||
Noninterest expense components: | ||||||||||||||||
Rabbi trust employee benefit | 3,985 | 808 | 506 | 2,754 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total impact of Non-GAAP adjustments | (3,896 | ) | (2,878 | ) | (783 | ) | (5,158 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Less net tax benefit associated with Non-GAAP adjustment (l) | 1,073 | 675 | 179 | 1,301 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP adjustments, net of tax | $ | (2,823 | ) | $ | (2,203 | ) | $ | (604 | ) | $ | (3,857 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Net operating earnings (Non-GAAP) | $ | 27,027 | $ | 32,850 | $ | 37,691 | $ | 64,161 | ||||||||
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||
Net income (GAAP) | $ | 34,809 | $ | 29,850 | $ | 82,472 | $ | 38,295 | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Add: | |||||||||||||||||||||||
Noninterest income components: | |||||||||||||||||||||||
Income from investments held in rabbi trusts | (4,216) | (7,745) | (6,062) | (1,002) | |||||||||||||||||||
Gains on sales of securities available for sale, net | (1) | (163) | (1,165) | (285) | |||||||||||||||||||
(Gains) losses on sale of other assets | (29) | 27 | (47) | (2) | |||||||||||||||||||
Noninterest expense components: | |||||||||||||||||||||||
Rabbi trust employee benefit expenses | 2,063 | 3,985 | 3,049 | 506 | |||||||||||||||||||
Impairment reversal on tax credit investments | (1,419) | — | (1,419) | — | |||||||||||||||||||
Indirect IPO costs (1) | — | 380 | — | 650 | |||||||||||||||||||
Merger and acquisition expenses | 3,479 | — | 4,068 | — | |||||||||||||||||||
Settlement and expenses for putative consumer class action matters | 3,325 | — | 3,325 | — | |||||||||||||||||||
Total impact of non-GAAP adjustments | 3,202 | (3,516) | 1,749 | (133) | |||||||||||||||||||
Less net tax benefit (expense) associated with non-GAAP adjustment (2) | 914 | (967) | 587 | 3 | |||||||||||||||||||
Non-GAAP adjustments, net of tax | $ | 2,288 | $ | (2,549) | $ | 1,162 | $ | (136) | |||||||||||||||
Operating net income (non-GAAP) | $ | 37,097 | $ | 27,301 | $ | 83,634 | $ | 38,159 | |||||||||||||||
Weighted average common shares outstanding during the period: | |||||||||||||||||||||||
Basic | 172,173,707 | n.a | 172,111,372 | n.a | |||||||||||||||||||
Diluted | 172,173,707 | n.a | 172,111,372 | n.a | |||||||||||||||||||
Earnings per share, basic | $ | 0.20 | n.a | $ | 0.48 | n.a | |||||||||||||||||
Earnings per share, diluted | $ | 0.20 | n.a | $ | 0.48 | n.a | |||||||||||||||||
Operating earnings per share, basic (non-GAAP) | $ | 0.22 | n.a | $ | 0.49 | n.a | |||||||||||||||||
Operating earnings per share, diluted (non-GAAP) | $ | 0.22 | n.a | $ | 0.49 | n.a |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Net interest income (GAAP) | $ | 98,755 | $ | 103,523 | $ | 198,901 | $ | 206,195 | ||||||||
Add: | ||||||||||||||||
Tax-equivalent adjustment (non-GAAP) | 1,378 | 1,269 | 2,746 | 2,649 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net interest income (non-GAAP) | 100,133 | 104,792 | 201,647 | 208,844 | ||||||||||||
Noninterest income (GAAP) | 47,657 | 45,632 | 81,026 | 93,432 | ||||||||||||
Less: | ||||||||||||||||
Income from investments held in rabbi trusts | 7,745 | 1,822 | 1,002 | 5,969 | ||||||||||||
Gains on sales of securities available for sale, net | 163 | 1,966 | 285 | 2,016 | ||||||||||||
Gains (losses) on sale of other assets | (27 | ) | (102 | ) | 2 | (73 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Noninterest income on an operating basis (non-GAAP) | 39,776 | 41,946 | 79,737 | 85,520 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Noninterest expense (GAAP) | $ | 100,765 | $ | 101,570 | $ | 195,937 | $ | 206,399 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Plus: | ||||||||||||||||
Rabbi trust benefit expense (income) | 3,985 | 808 | 506 | 2,754 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Noninterest expense on an operating basis (non- GAAP) | $ | 104,750 | $ | 102,378 | $ | 196,443 | $ | 209,153 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total income (GAAP) | $ | 146,412 | $ | 149,155 | $ | 279,927 | $ | 299,627 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating income (non-GAAP) | $ | 139,909 | $ | 146,738 | $ | 281,384 | $ | 294,364 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Ratios | ||||||||||||||||
Efficiency ratio (GAAP) | 68.82 | % | 68.10 | % | 70.00 | % | 68.89 | % | ||||||||
Efficiency ratio on an operating basis (non-GAAP) | 74.87 | % | 69.77 | % | 69.81 | % | 71.05 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Net interest income (GAAP) | $ | 104,608 | $ | 98,755 | $ | 204,699 | $ | 198,901 | |||||||||||||||
Add: | |||||||||||||||||||||||
Tax-equivalent adjustment (non-GAAP) | 1,269 | 1,378 | 2,566 | 2,746 | |||||||||||||||||||
Fully-taxable equivalent net interest income (non-GAAP) | 105,877 | 100,133 | 207,265 | 201,647 | |||||||||||||||||||
Noninterest income (GAAP) | 45,733 | 47,657 | 100,945 | 81,026 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Income from investments held in rabbi trusts | 4,216 | 7,745 | 6,062 | 1,002 | |||||||||||||||||||
Gains on sales of securities available for sale, net | 1 | 163 | 1,165 | 285 | |||||||||||||||||||
Gains (losses) on sales of other assets | 29 | (27) | 47 | 2 | |||||||||||||||||||
Noninterest income on an operating basis (non-GAAP) | 41,487 | 39,776 | 93,671 | 79,737 | |||||||||||||||||||
Noninterest expense (GAAP) | $ | 107,335 | $ | 100,765 | $ | 201,384 | $ | 195,937 | |||||||||||||||
Less: | |||||||||||||||||||||||
Rabbi trust benefit expense | 2,063 | 3,985 | 3,049 | 506 | |||||||||||||||||||
Impairment reversal on tax credit investments | (1,419) | — | (1,419) | — | |||||||||||||||||||
Indirect IPO costs (1) | — | 380 | — | 650 | |||||||||||||||||||
Merger and acquisition expenses | 3,479 | — | 4,068 | — | |||||||||||||||||||
Settlement and expenses for putative consumer class action matters | 3,325 | — | 3,325 | — | |||||||||||||||||||
Noninterest expense on an operating basis (non- GAAP) | $ | 99,887 | $ | 96,400 | $ | 192,361 | $ | 194,781 | |||||||||||||||
Total revenue (GAAP) | $ | 150,341 | $ | 146,412 | $ | 305,644 | $ | 279,927 | |||||||||||||||
Total operating revenue (non-GAAP) | $ | 147,364 | $ | 139,909 | $ | 300,936 | $ | 281,384 | |||||||||||||||
Ratios: | |||||||||||||||||||||||
Efficiency ratio (GAAP) | 71.39 | % | 68.82 | % | 65.89 | % | 70.00 | % | |||||||||||||||
Operating efficiency ratio (non-GAAP) | 67.78 | % | 68.90 | % | 63.92 | % | 69.22 | % |
As of June 30, | As of December 31, | |||||||
2020 | 2019 | |||||||
(Dollars in Thousands) | ||||||||
Tangible equity: | ||||||||
Total equity | $ | 1,693,630 | $ | 1,600,153 | ||||
Less: Goodwill and other intangibles | 376,331 | 377,734 | ||||||
|
|
|
| |||||
Tangible equity (Non-GAAP) | 1,317,299 | 1,222,419 | ||||||
|
|
|
| |||||
Tangible assets: | ||||||||
Total assets (GAAP) | 13,996,523 | 11,628,775 | ||||||
Less: Goodwill and other intangibles | 376,331 | 377,734 | ||||||
|
|
|
| |||||
Tangible assets (Non-GAAP) | $ | 13,620,192 | $ | 11,251,041 | ||||
|
|
|
| |||||
Equity to assets ratio (GAAP) | 12.1 | % | 13.8 | % | ||||
Tangible equity to tangible assets ratio (Non-GAAP) | 9.7 | % | 10.9 | % |
As of June 30, As of December 31, 2021 2020 (Dollars in thousands, except per share data) Tangible shareholders’ equity: Total shareholders’ equity (GAAP) $ 3,430,622 $ 3,428,052 Less: Goodwill and other intangibles 380,402 376,534 Tangible shareholders’ equity (non-GAAP) 3,050,220 3,051,518 Tangible assets: Total assets (GAAP) 17,047,453 15,964,190 Less: Goodwill and other intangibles 380,402 376,534 Tangible assets (Non-GAAP) $ 16,667,051 $ 15,587,656 Shareholders’ equity to assets ratio (GAAP) 20.1 % 21.5 % Tangible shareholders’ equity to tangible assets ratio (Non-GAAP) 18.3 % 19.6 % Book value per share: Common shares issued and outstanding 186,758,154 186,758,154 Book value per share (GAAP) $ 18.37 $ 18.36 Tangible book value per share (non-GAAP) $ 16.33 $ 16.34
As of June 30, 2020 | As of December 31, 2019 | Change | ||||||||||||||
Amount ($) | Percentage (%) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Cash and cash equivalents | $ | 1,432,561 | $ | 362,602 | $ | 1,069,959 | 295.1 | % | ||||||||
Securities available for sale | 1,600,354 | 1,508,236 | 92,118 | 6.1 | % | |||||||||||
Loans, net of allowance for credit losses | 9,862,980 | 8,899,184 | 963,796 | 10.8 | % | |||||||||||
Federal Home Loan Bank Stock | 8,805 | 9,027 | (222 | ) | (2.5 | )% | ||||||||||
Goodwill and other intangible assets | 376,331 | 377,734 | (1,403 | ) | (0.4 | )% | ||||||||||
Deposits | 11,846,765 | 9,551,392 | 2,295,373 | 24.0 | % | |||||||||||
Borrowed funds | 29,155 | 235,395 | (206,240 | ) | (87.6 | )% |
As of June 30, 2021 | As of December 31, 2020 | Change | |||||||||||||||||||||
Amount ($) | Percentage (%) | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Cash and cash equivalents | $ | 1,564,247 | $ | 2,054,070 | $ | (489,823) | (23.8) | % | |||||||||||||||
Securities available for sale | 4,848,781 | 3,183,861 | 1,664,920 | 52.3 | % | ||||||||||||||||||
Loans, net of allowance for loan losses | 9,485,699 | 9,593,958 | (108,259) | (1.1) | % | ||||||||||||||||||
Federal Home Loan Bank Stock | 10,601 | 8,805 | 1,796 | 20.4 | % | ||||||||||||||||||
Goodwill and other intangible assets | 380,402 | 376,534 | 3,868 | 1.0 | % | ||||||||||||||||||
Deposits | 13,250,433 | 12,155,784 | 1,094,649 | 9.0 | % | ||||||||||||||||||
Borrowed funds | 28,442 | 28,049 | 393 | 1.4 | % |
deposits.
the Federal Farm Credit Bureau.
The Risk Management Committee of our Board of Directors is responsible for approving and overseeing our investment policy, which it reviews at least annually. This policy dictates that investment decisions be made based on the safety of the investment, liquidity requirements, potential returns and market risk considerations.
As of June 30, 2020 | As of December 31, 2019 | |||||||
(Dollars in thousands) | ||||||||
Available for sale securities: | ||||||||
Government-sponsored residential mortgage-backed securities | $ | 1,251,799 | $ | 1,167,968 | ||||
U.S. treasury securities | 60,936 | 50,420 | ||||||
State and municipal bonds and obligations | 281,340 | 283,538 | ||||||
Other | 6,279 | 6,310 | ||||||
Trading Securities: | ||||||||
Municipal bonds and obligations | — | 961 | ||||||
|
|
|
| |||||
Total | $ | 1,600,354 | $ | 1,509,197 | ||||
|
|
|
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
(In thousands) | |||||||||||
Available for sale securities: | |||||||||||
Government-sponsored residential mortgage-backed securities | $ | 3,478,529 | $ | 2,148,800 | |||||||
Government-sponsored commercial mortgage-backed securities | 181,795 | 17,081 | |||||||||
U.S. Agency bonds | 841,005 | 666,709 | |||||||||
U.S. Treasury securities | 69,331 | 70,369 | |||||||||
State and municipal bonds and obligations | 278,121 | 280,902 | |||||||||
Total | $ | 4,848,781 | $ | 3,183,861 |
2020, representing a $63.5 million decrease.
2020.
2020.
Securities Maturing as of June 30, 2020 | ||||||||||||||||||||
Within One Year | After One Year But Within Five Years | After Five Years But Within Ten Years | After Ten Years | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | — | $ | 25,733 | $ | 157,290 | $ | 1,068,776 | $ | 1,251,799 | ||||||||||
U.S. Treasury securities | 50,778 | 10,158 | — | — | 60,936 | |||||||||||||||
State and municipal bonds and obligations | 411 | 18,966 | 77,868 | 184,095 | 281,340 | |||||||||||||||
Other | 6,279 | — | — | — | 6,279 | |||||||||||||||
Trading securities: | ||||||||||||||||||||
Municipal bonds and obligations | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 57,468 | $ | 54,857 | $ | 235,158 | $ | 1,252,871 | $ | 1,600,354 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Weighted-average yield | 2.50 | % | 2.69 | % | 2.80 | % | 2.49 | % | 2.54 | % |
Securities Maturing as of December 31, 2019 | Securities Maturing as of June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
Within One Year | After One Year But Within Five Years | After Five Years But Within Ten Years | After Ten Years | Total | Within One Year | After One Year But Within Five Years | After Five Years But Within Ten Years | After Ten Years | Total | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||
Available for sale securities: | Available for sale securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | — | $ | 8,464 | $ | 203,706 | $ | 955,798 | $ | 1,167,968 | Government-sponsored residential mortgage-backed securities | $ | — | $ | 19,323 | $ | 597,546 | $ | 2,861,660 | $ | 3,478,529 | ||||||||||||||||||||||||||||
Government-sponsored commercial mortgage-backed securities | Government-sponsored commercial mortgage-backed securities | — | 23,781 | 158,014 | — | 181,795 | |||||||||||||||||||||||||||||||||||||||||||
U.S. Agency bonds | U.S. Agency bonds | — | 196,383 | 644,622 | — | 841,005 | |||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | 40 | 50,380 | — | — | 50,420 | U.S. Treasury securities | 10,071 | 59,260 | — | — | 69,331 | ||||||||||||||||||||||||||||||||||||||
State and municipal bonds and obligations | 381 | 9,109 | 79,504 | 194,544 | 283,538 | State and municipal bonds and obligations | 486 | 29,781 | 76,046 | 171,808 | 278,121 | ||||||||||||||||||||||||||||||||||||||
Other | 6,310 | — | — | — | 6,310 | ||||||||||||||||||||||||||||||||||||||||||||
Trading securities: |
| ||||||||||||||||||||||||||||||||||||||||||||||||
Municipal bonds and obligations | 961 | — | — | — | 961 | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 7,692 | $ | 67,953 | $ | 283,210 | $ | 1,150,342 | $ | 1,509,197 | Total | $ | 10,557 | $ | 328,528 | $ | 1,476,228 | $ | 3,033,468 | $ | 4,848,781 | ||||||||||||||||||||||||||||
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||
Weighted-average yield | 5.44 | % | 2.38 | % | 2.95 | % | 2.92 | % | 2.90 | % | Weighted-average yield | 0.50 | % | 0.87 | % | 1.01 | % | 1.54 | % | 1.33 | % |
Securities Maturing as of December 31, 2020 | |||||||||||||||||||||||||||||
Within One Year | After One Year But Within Five Years | After Five Years But Within Ten Years | After Ten Years | Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Available for sale securities: | |||||||||||||||||||||||||||||
Government-sponsored residential mortgage-backed securities | $ | — | $ | 48,925 | $ | 100,278 | $ | 1,999,597 | $ | 2,148,800 | |||||||||||||||||||
Government-sponsored commercial mortgage-backed securities | — | — | 17,081 | — | 17,081 | ||||||||||||||||||||||||
U.S. Agency bonds | — | 99,834 | 566,875 | — | 666,709 | ||||||||||||||||||||||||
U.S. Treasury securities | 50,251 | 20,118 | — | — | 70,369 | ||||||||||||||||||||||||
State and municipal bonds and obligations | 408 | 21,431 | 79,635 | 179,428 | 280,902 | ||||||||||||||||||||||||
Total | $ | 50,659 | $ | 190,308 | $ | 763,869 | $ | 2,179,025 | $ | 3,183,861 | |||||||||||||||||||
Weighted-average yield | 2.05 | % | 1.34 | % | 1.15 | % | 1.50 | % | 1.41 | % |
The change from December 31, 2020 to June 30, 2021 is primarily driven by a steepening yield curve.
•The increase$254.3 million decrease in our commercial and industrial loans from December 31, 2019 to June 30, 2020 was primarily a result of the $633.2 million PPP loan originations during the six months ended June 30, 2020.
The increase in our business banking loans from December 31, 2019 to June 30, 2020 was primarily a result of $467.0 million in PPP loan originations during the six months ended June 30, 2020.
The decrease in other consumer loans from December 31, 2019 to June 30, 2020portfolio was primarily a result of a decrease of $62.6$202.7 million in our automobile portfolioPPP loan balances during the six months ended June 30, 2021.
The following table shows the composition of our loan portfolio, by category, as of the dates indicated:
June 30, 2020 | December 31, 2019 | |||||||
Amount | Amount | |||||||
(In thousands) | ||||||||
Commercial and industrial | $ | 2,271,700 | $ | 1,642,184 | ||||
Commercial real estate | 3,584,358 | 3,535,441 | ||||||
Commercial construction | 282,246 | 273,774 | ||||||
Business banking | 1,234,961 | 771,498 | ||||||
Residential real estate | 1,400,855 | 1,428,630 | ||||||
Consumer home equity | 905,484 | 933,088 | ||||||
Other consumer | 334,734 | 402,431 | ||||||
|
|
|
| |||||
Total loans | $ | 10,014,338 | $ | 8,987,046 | ||||
Less: |
| |||||||
Allowance for loan losses | (116,636 | ) | (82,297 | ) | ||||
Unamortized premiums, net of unearned discounts and deferred fees | (34,722 | ) | (5,565 | ) | ||||
|
|
|
| |||||
Total loans receivable, net | $ | 9,862,980 | $ | 8,899,184 | ||||
|
|
|
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
(In thousands) | |||||||||||
Commercial and industrial | $ | 1,740,679 | $ | 1,995,016 | |||||||
Commercial real estate | 3,775,771 | 3,573,630 | |||||||||
Commercial construction | 237,927 | 305,708 | |||||||||
Business banking | 1,339,852 | 1,339,164 | |||||||||
Residential real estate | 1,457,498 | 1,370,957 | |||||||||
Consumer home equity | 834,938 | 868,270 | |||||||||
Other consumer | 234,410 | 277,780 | |||||||||
Total loans | 9,621,075 | 9,730,525 | |||||||||
Less: | |||||||||||
Allowance for loan losses | (105,637) | (113,031) | |||||||||
Unamortized premiums, net of unearned discounts and deferred fees | (29,739) | (23,536) | |||||||||
Total loans receivable, net | $ | 9,485,699 | $ | 9,593,958 |
2021.
the scorecard tools, has increased, and is expected to continue to increase, the granularity and distribution of risk rating assignment with more precision and effectiveness; provide customized and enhanced templates to incorporate more risk factors and attributes applicable to loan and collateral types; increase precision and effectiveness of credit risk identification; and provide a foundation for enhanced reporting, including migration of risk rating analysis.
The following table provides details regarding our delinquency rates as of the dates indicated:
Delinquency Rate as of (1) | ||||||||
June 30, 2020 | December 31, 2019 | |||||||
Portfolio | ||||||||
Commercial and industrial | 0.13 | % | 0.14 | % | ||||
Commercial real estate | 0.09 | % | 0.09 | % | ||||
Commercial construction | 0.10 | % | — | % | ||||
Business banking | 1.76 | % | 1.28 | % | ||||
Residential real estate | 2.71 | % | 1.37 | % | ||||
Consumer home equity | 1.09 | % | 0.49 | % | ||||
Other consumer | 2.30 | % | 1.13 | % | ||||
|
|
|
| |||||
Total | 0.84 | % | 0.49 | % |
|
Delinquency Rate as of (1) | |||||||||||
June 30, 2021 | December 31, 2020 | ||||||||||
Portfolio | |||||||||||
Commercial and industrial | 0.05 | % | 0.11 | % | |||||||
Commercial real estate | 0.09 | % | 0.06 | % | |||||||
Commercial construction | — | % | — | % | |||||||
Business banking | 0.93 | % | 1.40 | % | |||||||
Residential real estate | 1.21 | % | 1.21 | % | |||||||
Consumer home equity | 0.53 | % | 0.60 | % | |||||||
Other consumer | 0.86 | % | 0.98 | % | |||||||
Total | 0.42 | % | 0.49 | % |
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Commercial and industrial | $ | 681 | $ | 671 | $ | 1,508 | $ | 1,407 | $ | — | $ | 963 | ||||||||||||
Commercial real estate | — | 257 | 3,045 | 1,290 | 100 | 1,856 | ||||||||||||||||||
Commercial construction | — | — | 280 | — | — | — | ||||||||||||||||||
Business banking | 4,541 | 4,160 | 13,021 | 3,031 | 763 | 6,095 | ||||||||||||||||||
Residential real estate | 26,859 | 2,084 | 8,981 | 14,030 | 2,563 | 3,030 | ||||||||||||||||||
Consumer home equity | 3,413 | 1,971 | 4,511 | 2,497 | 430 | 1,636 | ||||||||||||||||||
Other Consumer | 2,992 | 1,734 | 2,971 | 3,451 | 514 | 579 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 38,486 | $ | 10,877 | $ | 34,317 | $ | 25,706 | $ | 4,370 | $ | 14,159 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | — | $ | 267 | $ | 647 | $ | 4 | $ | 268 | $ | 1,924 | |||||||||||||||||||||||
Commercial real estate | 1,896 | — | 1,414 | — | 556 | 1,545 | |||||||||||||||||||||||||||||
Commercial construction | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Business banking | 4,004 | 1,902 | 6,609 | 5,279 | 3,311 | 10,196 | |||||||||||||||||||||||||||||
Residential real estate | 11,706 | 1,330 | 4,631 | 9,184 | 2,517 | 4,904 | |||||||||||||||||||||||||||||
Consumer home equity | 610 | 403 | 3,408 | 1,806 | 364 | 3,035 | |||||||||||||||||||||||||||||
Other Consumer | 1,074 | 438 | 513 | 1,978 | 234 | 517 | |||||||||||||||||||||||||||||
Total | $ | 19,290 | $ | 4,340 | $ | 17,222 | $ | 18,251 | $ | 7,250 | $ | 22,121 |
As of June 30, 2020 | As of December 31, 2019 | |||||||
(In thousands) | ||||||||
Non-accrual loans: | ||||||||
Commercial | $ | 31,273 | $ | 34,093 | ||||
Residential | 11,693 | 5,598 | ||||||
Consumer | 9,374 | 2,760 | ||||||
|
|
|
| |||||
Total non-accrual loans | 52,340 | 42,451 | ||||||
|
|
|
| |||||
Accruing loans past due 90 days or more: | ||||||||
Commercial | 2,802 | 1,315 | ||||||
Residential | 244 | — | ||||||
Consumer | 9 | 9 | ||||||
|
|
|
| |||||
Total accruing loans past due 90 days or more | 3,055 | 1,324 | ||||||
|
|
|
| |||||
Total non-performing loans | 55,395 | 43,775 | ||||||
Total real estate owned | 40 | — | ||||||
|
|
|
| |||||
Other non-performing assets: | — | — | ||||||
|
|
|
| |||||
Total non-performing assets | $ | 55,435 | $ | 43,775 | ||||
|
|
|
| |||||
Total accruing troubled debt restructured loans | $ | 40,691 | $ | 48,623 | ||||
Total non-performing loans to total loans | 0.56 | % | 0.49 | % | ||||
Total non-performing assets to total assets | 0.40 | % | 0.38 | % |
As of June 30, 2021 | As of December 31, 2020 | ||||||||||
(In thousands) | |||||||||||
Non-accrual loans: | |||||||||||
Commercial | $ | 29,356 | $ | 30,059 | |||||||
Residential | 6,445 | 6,815 | |||||||||
Consumer | 4,106 | 4,131 | |||||||||
Total non-accrual loans | 39,907 | 41,005 | |||||||||
Accruing loans past due 90 days or more: | |||||||||||
Commercial | 1,439 | 1,959 | |||||||||
Residential | 277 | 279 | |||||||||
Consumer | 9 | 9 | |||||||||
Total accruing loans past due 90 days or more | 1,725 | 2,247 | |||||||||
Total nonperforming loans | 41,632 | 43,252 | |||||||||
Total real estate owned | 38 | — | |||||||||
Other nonperforming assets: | — | — | |||||||||
Total nonperforming assets | $ | 41,670 | $ | 43,252 | |||||||
Total accruing troubled debt restructured loans | $ | 38,316 | $ | 41,095 | |||||||
Total nonperforming loans to total loans | 0.43 | % | 0.45 | % | |||||||
Total nonperforming assets to total assets | 0.24 | % | 0.27 | % |
Non-accrual loans increased $9.9 million, or 23.3%, to $52.3 million atsix months ended June 30, 2020 from $42.52021. The gross interest income that would have been recorded under the original terms of those loans if they had been performing amounted to $1.5 million at December 31, 2019, primarily due to a $7.7 million increase in our business banking portfolio and $6.1 million increase in our residential real estate portfolio, partially offset byfor the paydowns of certain NPLs as discussed above.
six months ended June 30, 2021. The total amount of interest recorded on NPLs was $0.3 million for the six months ended June 30, 2020. The gross interest income that would have been recorded under the original terms of those loans if they had been performing amounted to $2.0 million for the six months ended June 30, 2020.
Troubled debt restructuring (“TDR”)
Purchase credit impaired (“PCI”)which are on non-accrual status prior to being modified, remain on non-accrual status for approximately six months subsequent to being modified before we consider its return to accrual status. If the restructured loan is on accrual status prior to being modified, we review it to determine if the modified loan should remain on accrual status.
The following table provides additional details related to our loan portfolio and the distribution of NPLs as of the dates indicated:
As of June 30, 2020 | ||||||||||||||||||||||||
Outstanding | 90+ Days Due Still Accruing | Non-accruing Loans | Troubled Debt Restructured Loans, but Accruing | NPLs | NPLs as a % of Outstanding | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||
Commercial | $ | 7,373,265 | $ | 2,802 | $ | 31,273 | $ | 13,093 | $ | 34,075 | 0.46 | % | ||||||||||||
Residential | 1,400,855 | 244 | 11,693 | 23,714 | 11,937 | 0.85 | % | |||||||||||||||||
Consumer | 1,240,218 | 9 | 9,374 | 3,884 | 9,383 | 0.76 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 10,014,338 | $ | 3,055 | $ | 52,340 | $ | 40,691 | $ | 55,395 | 0.55 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019 | ||||||||||||||||||||||||
Outstanding | 90+ Days Due Still Accruing | Non-accruing Loans | Troubled Debt Restructured Loans, but Accruing | NPLs | NPLs as a % of Outstanding | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||
Commercial | $ | 6,222,897 | $ | 1,315 | $ | 34,093 | $ | 17,575 | $ | 35,408 | 0.57 | % | ||||||||||||
Residential | 1,428,630 | — | 5,598 | 25,093 | 5,598 | 0.39 | % | |||||||||||||||||
Consumer | 1,335,519 | 9 | 2,760 | 5,955 | 2,769 | 0.21 | % | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 8,987,046 | $ | 1,324 | $ | 42,451 | $ | 48,623 | $ | 43,775 | 0.49 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | |||||||||||||||||||||||||||||||||||
Gross Loans Outstanding (1) | 90+ Days Past Due Still Accruing | Non-accruing Loans | NPLs | NPLs as a % of Outstanding | Accruing Troubled Debt Restructured Loans | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Commercial | $ | 7,094,229 | $ | 1,439 | $ | 29,356 | $ | 30,795 | 0.43 | % | $ | 13,140 | |||||||||||||||||||||||
Residential | 1,457,498 | 277 | 6,445 | 6,722 | 0.46 | % | 21,677 | ||||||||||||||||||||||||||||
Consumer | 1,069,348 | 9 | 4,106 | 4,115 | 0.38 | % | 3,499 | ||||||||||||||||||||||||||||
Total | $ | 9,621,075 | $ | 1,725 | $ | 39,907 | $ | 41,632 | 0.43 | % | $ | 38,316 |
As of December 31, 2020 | |||||||||||||||||||||||||||||||||||
Gross Loans Outstanding (1) | 90+ Days Past Due Still Accruing | Non-accruing Loans | NPLs | NPLs as a % of Outstanding | Accruing Troubled Debt Restructured Loans | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Commercial | $ | 7,213,518 | $ | 1,959 | $ | 30,059 | $ | 32,018 | 0.44 | % | $ | 13,620 | |||||||||||||||||||||||
Residential | 1,370,957 | 279 | 6,815 | 7,094 | 0.52 | % | 23,416 | ||||||||||||||||||||||||||||
Consumer | 1,146,050 | 9 | 4,131 | 4,140 | 0.36 | % | 4,059 | ||||||||||||||||||||||||||||
Total | $ | 9,730,525 | $ | 2,247 | $ | 41,005 | $ | 43,252 | 0.45 | % | $ | 41,095 |
Remaining COVID-19 Modifications as of June 30, 2021 (1) | Remaining COVID-19 Modifications as of December 31, 2020 (1) | ||||||||||||||||||||||
Balance | % of Total Portfolio | Balance | % of Total Portfolio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Portfolio | |||||||||||||||||||||||
Commercial and industrial | $ | 18,850 | 1.1 | % | $ | 34,076 | 1.7 | % | |||||||||||||||
Commercial real estate | 113,301 | 3.0 | % | 231,794 | 6.5 | % | |||||||||||||||||
Commercial construction | — | — | % | 10,987 | 3.6 | % | |||||||||||||||||
Business banking | 2,102 | 0.2 | % | 23,434 | 1.7 | % | |||||||||||||||||
Residential real estate | 13,428 | 0.9 | % | 26,772 | 2.0 | % | |||||||||||||||||
Consumer home equity | 1,124 | 0.1 | % | 3,432 | 0.4 | % | |||||||||||||||||
Other consumer | 999 | 0.4 | % | 2,187 | 0.8 | % | |||||||||||||||||
Total | $ | 149,805 | 1.6 | % | $ | 332,682 | 3.4 | % |
The following table summarizes changes in the allowance for loan losses and other selected statistics for the periods presented:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Average total loans | $ | 9,445,666 | $ | 8,916,224 | $ | 9,445,666 | $ | 8,916,224 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Allowance for loan losses, beginning of the period | $ | 109,138 | $ | 82,493 | $ | 82,297 | $ | 80,655 | ||||||||
Charged-off loans: |
| |||||||||||||||
Commercial and industrial | 27 | 272 | 27 | 272 | ||||||||||||
Commercial real estate | 24 | 169 | 24 | 169 | ||||||||||||
Commercial construction | — | — | — | — | ||||||||||||
Business banking | 1,198 | 1,371 | 2,535 | 2,810 | ||||||||||||
Residential real estate | — | 46 | — | 63 | ||||||||||||
Consumer home equity | — | 124 | 473 | 124 | ||||||||||||
Other consumer | 15 | 581 | 548 | 1,049 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total charged-off loans | 1,264 | 2,563 | 3,607 | 4,487 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Recoveries on loans previously charged-off: | ||||||||||||||||
Commercial and industrial | 58 | 908 | 380 | 1,368 | ||||||||||||
Commercial real estate | 5 | 2 | 6 | 4 | ||||||||||||
Commercial construction | — | — | — | — | ||||||||||||
Business banking | 27 | 193 | 154 | 320 | ||||||||||||
Residential real estate | 13 | 12 | 73 | 71 | ||||||||||||
Consumer home equity | 8 | 20 | 22 | 28 | ||||||||||||
Other consumer | 51 | 97 | 111 | 203 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total recoveries | 162 | 1,232 | 746 | 1,994 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net loans charged-off (recoveries): | ||||||||||||||||
Commercial and industrial | (31 | ) | (636 | ) | (353 | ) | (1,096 | ) | ||||||||
Commercial real estate | 19 | 167 | 18 | 165 | ||||||||||||
Commercial construction | — | — | — | — | ||||||||||||
Business banking | 1,171 | 1,178 | 2,381 | 2,490 | ||||||||||||
Residential real estate | (13 | ) | 34 | (73 | ) | (8 | ) | |||||||||
Consumer home equity | (8 | ) | 104 | 451 | 96 | |||||||||||
Other consumer | (36 | ) | 484 | 437 | 846 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total net loans charged-off | 1,102 | 1,331 | 2,861 | 2,493 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Provision for loan losses | 8,600 | 1,500 | 37,200 | 4,500 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total allowance for loan losses, end of period | $ | 116,636 | $ | 82,662 | $ | 116,636 | $ | 82,662 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net charge-offs to average total loans outstanding during this period | 0.01 | % | 0.01 | % | 0.03 | % | 0.03 | % | ||||||||
Allowance for loan losses as a percent of total loans | 1.17 | % | 0.92 | % | 1.17 | % | 0.92 | % | ||||||||
Allowance for loan losses as a percent of nonperforming loans | 210.55 | % | 251.34 | % | 210.55 | % | 251.34 | % |
Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (Dollars in thousands) Average total loans $ 9,796,701 $ 9,875,110 $ 9,806,688 $ 9,445,666 Allowance for loan losses, beginning of the period $ 111,080 $ 109,138 $ 113,031 $ 82,297 Charged-off loans: Commercial and industrial 550 27 550 27 Commercial real estate — 24 234 24 Commercial construction — — — — Business banking 1,838 1,198 3,222 2,535 Residential real estate — — — — Consumer home equity — — — 473 Other consumer 275 15 639 548 Total charged-off loans 2,663 1,264 4,645 3,607 Recoveries on loans previously charged-off: Commercial and industrial 13 58 22 380 Commercial real estate 4 5 4 6 Commercial construction — — — — Business banking 291 27 656 154 Residential real estate 17 13 27 73 Consumer home equity 3 8 74 22 Other consumer 192 51 348 111 Total recoveries 520 162 1,131 746 Net loans charged-off (recoveries): Commercial and industrial 537 (31) 528 (353) Commercial real estate (4) 19 230 18 Commercial construction — — — — Business banking 1,547 1,171 2,566 2,381 Residential real estate (17) (13) (27) (73) Consumer home equity (3) (8) (74) 451 Other consumer 83 (36) 291 437 Total net loans charged-off 2,143 1,102 3,514 2,861 (Release of) provision for loan losses (3,300) 8,600 (3,880) 37,200 Total allowance for loan losses, end of period $ 105,637 $ 116,636 $ 105,637 $ 116,636 Net charge-offs to average total loans outstanding during this period 0.02 % 0.01 % 0.04 % 0.03 % Allowance for loan losses as a percent of total loans 1.10 % 1.20 % 1.10 % 1.20 % Allowance for loan losses as a percent of nonperforming loans 253.74 % 210.55 % 253.74 % 210.55 %
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||||||||||
Allowance for Loan Losses | Percent of Allowance in Category to Total Allocated Allowance | Percent of Loans in Category to Total Loans | Allowance for Loan Losses | Percent of Allowance in Category to Total Allocated Allowance | Percent of Loans in Category to Total Loans | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Commercial and industrial (1) | $ | 33,229 | 28.49 | % | 22.69 | % | $ | 20,919 | 25.42 | % | 18.27 | % | ||||||||||||
Commercial real estate | 54,228 | 46.49 | % | 35.79 | % | 34,730 | 42.20 | % | 39.34 | % | ||||||||||||||
Commercial construction | 4,816 | 4.13 | % | 2.82 | % | 3,424 | 4.16 | % | 3.05 | % | ||||||||||||||
Business banking (1) | 9,805 | 8.41 | % | 12.33 | % | 8,260 | 10.04 | % | 8.58 | % | ||||||||||||||
Residential real estate | 6,569 | 5.63 | % | 13.99 | % | 6,380 | 7.75 | % | 15.90 | % | ||||||||||||||
Consumer home equity | 3,875 | 3.32 | % | 9.04 | % | 4,027 | 4.89 | % | 10.38 | % | ||||||||||||||
Other consumer | 3,762 | 3.23 | % | 3.34 | % | 4,173 | 5.07 | % | 4.48 | % | ||||||||||||||
Unallocated | 352 | 0.30 | % | — | % | 384 | 0.47 | % | — | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 116,636 | 100.00 | % | 100.00 | % | $ | 82,297 | 100.00 | % | 100.00 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||||||||||||||||||||||||||
Allowance for Loan Losses | Percent of Allowance in Category to Total Allocated Allowance | Percent of Loans in Category to Total Loans | Allowance for Loan Losses | Percent of Allowance in Category to Total Allocated Allowance | Percent of Loans in Category to Total Loans | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial and industrial (1) | $ | 22,596 | 21.39 | % | 18.09 | % | $ | 26,617 | 23.54 | % | 20.51 | % | |||||||||||||||||||||||
Commercial real estate | 52,759 | 49.95 | % | 39.24 | % | 54,569 | 48.28 | % | 36.73 | % | |||||||||||||||||||||||||
Commercial construction | 3,446 | 3.26 | % | 2.47 | % | 4,553 | 4.03 | % | 3.14 | % | |||||||||||||||||||||||||
Business banking (1) | 12,705 | 12.03 | % | 13.93 | % | 13,152 | 11.64 | % | 13.76 | % | |||||||||||||||||||||||||
Residential real estate | 6,478 | 6.13 | % | 15.15 | % | 6,435 | 5.69 | % | 14.09 | % | |||||||||||||||||||||||||
Consumer home equity | 3,588 | 3.40 | % | 8.68 | % | 3,744 | 3.31 | % | 8.92 | % | |||||||||||||||||||||||||
Other consumer | 3,626 | 3.43 | % | 2.44 | % | 3,467 | 3.07 | % | 2.85 | % | |||||||||||||||||||||||||
Other | 439 | 0.41 | % | — | % | 494 | 0.44 | % | — | % | |||||||||||||||||||||||||
Total | $ | 105,637 | 100.00 | % | 100.00 | % | $ | 113,031 | 100.00 | % | 100.00 | % |
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||
Amount | % Change | Amount | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Demand | $ | 4,740,125 | 34.8 | % | $ | 3,517,447 | 2.11 | % | ||||||||
Interest checking | 2,385,912 | 31.5 | % | 1,814,327 | (4.48 | )% | ||||||||||
Savings | 1,157,606 | 19.2 | % | 971,119 | (2.85 | )% | ||||||||||
Money market investments | 3,254,202 | 11.5 | % | 2,919,360 | 13.12 | % | ||||||||||
Certificate of deposits | 308,920 | (6.1 | )% | 329,139 | (30.70 | )% | ||||||||||
|
|
|
| |||||||||||||
Total deposits | $ | 11,846,765 | 24.0 | % | $ | 9,551,392 | 1.62 | % | ||||||||
|
|
|
|
As of June 30, 2021 | As of December 31, 2020 | Change | |||||||||||||||||||||
Amount ($) | Percentage (%) | ||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Demand | $ | 5,399,297 | $ | 4,910,794 | $ | 488,503 | 9.9 | % | |||||||||||||||
Interest checking | 2,656,610 | 2,380,497 | 276,113 | 11.6 | % | ||||||||||||||||||
Savings | 1,403,472 | 1,256,736 | 146,736 | 11.7 | % | ||||||||||||||||||
Money market investments | 3,544,897 | 3,348,898 | 195,999 | 5.9 | % | ||||||||||||||||||
Certificate of deposits | 246,157 | 258,859 | (12,702) | (4.9) | % | ||||||||||||||||||
Total deposits | $ | 13,250,433 | $ | 12,155,784 | $ | 1,094,649 | 9.0 | % |
government stimulus.
Classification of depositsDeposits on an Average Basis
As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||
Average Amount | Average Rate | Average Amount | Average Rate | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Demand | $ | 3,963,066 | 0.00 | % | $ | 3,369,375 | 0.00 | % | ||||||||
Interest checking | 2,158,242 | 0.14 | % | 1,842,993 | 0.21 | % | ||||||||||
Savings | 1,036,344 | 0.02 | % | 991,244 | 0.02 | % | ||||||||||
Money market investments | 3,087,048 | 0.38 | % | 2,769,934 | 0.69 | % | ||||||||||
Certificate of deposits | 320,277 | 0.69 | % | 392,035 | 1.02 | % | ||||||||||
|
|
|
| |||||||||||||
Total deposits | $ | 10,564,977 | 0.16 | % | $ | 9,365,581 | 0.29 | % | ||||||||
|
|
|
|
For the Six Months Ended June 30, 2021 | For the Year Ended December 31, 2020 | ||||||||||||||||||||||
Average Amount | Average Rate | Average Amount | Average Rate | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Demand | $ | 5,241,134 | — | % | $ | 4,535,066 | — | % | |||||||||||||||
Interest checking | 2,466,860 | 0.04 | % | 2,227,185 | 0.09 | % | |||||||||||||||||
Savings | 1,343,133 | 0.02 | % | 1,123,584 | 0.02 | % | |||||||||||||||||
Money market investments | 3,482,002 | 0.07 | % | 3,212,752 | 0.23 | % | |||||||||||||||||
Certificate of deposits | 248,946 | 0.18 | % | 300,381 | 0.52 | % | |||||||||||||||||
Total deposits | $ | 12,782,075 | 0.03 | % | $ | 11,398,968 | 0.10 | % |
As of June 30, 2020 | As of December 31, 2019 | |||||||
Maturing in | Amount | Amount | ||||||
(Dollars in thousands) | ||||||||
Three months or less | $ | 74,297 | $ | 58,958 | ||||
Over three months through six months | 39,072 | 43,008 | ||||||
Over six months through 12 months | 19,433 | 44,643 | ||||||
Over 12 months | 12,794 | 11,029 | ||||||
|
|
|
| |||||
Total | $ | 145,596 | $ | 157,638 | ||||
|
|
|
|
As of June 30, 2021 | As of December 31, 2020 | |||||||||||||
Maturing in | (In thousands) | |||||||||||||
Three months or less | $ | 58,098 | $ | 49,740 | ||||||||||
Over three months through six months | 26,877 | 24,608 | ||||||||||||
Over six months through 12 months | 16,083 | 31,009 | ||||||||||||
Over 12 months | 9,626 | 9,956 | ||||||||||||
Total | $ | 110,684 | $ | 115,313 |
borrowers.
As of June 30, | As of December 31, | % Change from December 31, 2019 to June 30, 2020 | % Change from June 30, 2019 to June 30, 2020 | |||||||||||||||||
2020 | 2019 | 2019 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Federal funds purchased | $ | — | $ | 182,814 | $ | 201,082 | (100.0 | )% | (100.0 | )% | ||||||||||
Federal Home Loan Bank advances | 14,922 | 121,888 | 18,964 | (21.3 | )% | (87.8 | )% | |||||||||||||
Escrow deposits of borrowers | 14,233 | 14,871 | 15,349 | (7.3 | )% | (4.3 | )% | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total | $ | 29,155 | $ | 319,573 | $ | 235,395 | (87.6 | )% | (90.9 | )% | ||||||||||
|
|
|
|
|
|
Change As of June 30, 2021 As of December 31, 2020 Amount ($) Percentage (%) (In thousands) FHLB advances $ 14,323 $ 14,624 $ (301) (2.1) % Escrow deposits of borrowers 14,119 13,425 694 5.2 % Total $ 28,442 $ 28,049 $ 393 1.4 %
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||||||||||
2020 | 2019 | Amount ($) | Percentage | 2020 | 2019 | Amount ($) | Percentage | |||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Interest and dividend income | $ | 101,933 | $ | 112,838 | (10,905 | ) | (9.7 | )% | $ | 208,092 | $ | 224,321 | $ | (16,229 | ) | (7.2 | )% | |||||||||||||||
Interest expense | 3,178 | 9,315 | (6,137 | ) | (65.9 | )% | 9,191 | 18,126 | (8,935 | ) | (49.3 | )% | ||||||||||||||||||||
Net interest income | 98,755 | 103,523 | (4,768 | ) | (4.6 | )% | 198,901 | 206,195 | (7,294 | ) | (3.5 | )% | ||||||||||||||||||||
Provision for loan losses | 8,600 | 1,500 | 7,100 | 473.3 | % | 37,200 | 4,500 | 32,700 | 726.7 | % | ||||||||||||||||||||||
Noninterest income | 47,657 | 45,632 | 2,025 | 4.4 | % | 81,026 | 93,432 | (12,406 | ) | (13.3 | )% | |||||||||||||||||||||
Noninterest expense | 100,765 | 101,570 | (805 | ) | (0.8 | )% | 195,937 | 206,399 | (10,462 | ) | (5.1 | )% | ||||||||||||||||||||
Income taxes | 7,197 | 11,032 | (3,835 | ) | (34.8 | )% | 8,495 | 20,710 | (12,215 | ) | (59.0 | )% | ||||||||||||||||||||
Net income | 29,850 | 35,053 | (5,203 | ) | (14.8 | )% | 38,295 | 68,018 | (29,723 | ) | (43.7 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Amount ($) | Percentage | 2021 | 2020 | Amount ($) | Percentage | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Interest and dividend income | $ | 105,681 | $ | 101,933 | 3,748 | 3.7 | % | $ | 206,814 | 208,092 | $ | (1,278) | (0.6) | % | |||||||||||||||||||||||||||||||||
Interest expense | 1,073 | 3,178 | (2,105) | (66.2) | % | 2,115 | 9,191 | (7,076) | (77.0) | % | |||||||||||||||||||||||||||||||||||||
Net interest income | 104,608 | 98,755 | 5,853 | 5.9 | % | 204,699 | 198,901 | 5,798 | 2.9 | % | |||||||||||||||||||||||||||||||||||||
Provision for loan losses | (3,300) | 8,600 | (11,900) | (138.4) | % | (3,880) | 37,200 | (41,080) | (110.4) | % | |||||||||||||||||||||||||||||||||||||
Noninterest income | 45,733 | 47,657 | (1,924) | (4.0) | % | 100,945 | 81,026 | 19,919 | 24.6 | % | |||||||||||||||||||||||||||||||||||||
Noninterest expense | 107,335 | 100,765 | 6,570 | 6.5 | % | 201,384 | 195,937 | 5,447 | 2.8 | % | |||||||||||||||||||||||||||||||||||||
Income tax expense | 11,497 | 7,197 | 4,300 | 59.7 | % | 25,668 | 8,495 | 17,173 | 202.2 | % | |||||||||||||||||||||||||||||||||||||
Net income | 34,809 | 29,850 | 4,959 | 16.6 | % | 82,472 | 38,295 | 44,177 | 115.4 | % |
2020
•Interest income on loans decreased by $10.1$1.2 million, or 9.9%1.3%, to $90.9 million during the three months ended June 30, 2021 from $92.1 million during the three months ended June 30, 2020 from $102.22020. The decrease in interest income on our loans was primarily due to the decrease in yield on average loans which was driven by the downward adjustment of the interest rates on our existing adjustable-rate loans as a result of lower interest rates. The decrease in loan yields was partially offset by an increase in net accretion of PPP loan deferred fees
Interest income on securities decreased $0.82021 from $4.1 million or 7.8%, to $9.8 million for theduring three months ended June 30, 2020 compared to $10.6 million for the three months ended June 30, 2019.
•Interest income on loans decreased by $15.1$8.1 million, or 7.4%4.3%, to $179.6 million during the six months ended June 30, 2021 from $187.7 million during the six months ended June 30, 2020 from $202.8 million during the six months ended June 30, 2019.2020. The decrease in interest income on our loans was primarily due to the decrease in the yield on average loans. The decrease in the average yield on our loans which was primarily due todriven by the downward adjustment of the interest rates on our existing adjustable-rate loans as a result of the loweringlower interest rate environment, whereas therates. The average balance of loans increased primarily due to continued efforts to expand ourPPP loan portfolio.originations, partially offsetting the decline in interest rates. The FTE yield on average loans decreased 5930 basis points to 4.03%3.7% during the six months ended June 30, 2020.2021. The average balance of our loans increased by $529.4$361.0 million, or 5.9%3.8%, to $9.8 billion as of June 30, 2021 compared to $9.4 billion as of June 30, 2020 compared to $8.9 billion as2020.
•Interest income on securities decreased $1.1and federal funds sold and other short-term investments increased $6.8 million, or 5.3%33.5%, to $27.2 million for the six months ended June 30, 2021 compared to $20.4 million for the six months ended June 30, 2020 compared to $21.5 million for the six months ended June 30, 2019.2020. The decreaseincrease in interest income on securities was due to a larger average security balance driven by security purchases between June 30, 2021 and June 30, 2020, partially offset by lower overall market rates. The FTE yield on average securities and other interest-earning assets decreased 10099 basis points to 2.0%1.0% during the six months ended June 30, 2019.2021. The average balance of securities and other interest earninginterest-earning assets increased by $628.2 million,$3.5 billion, or 40.7%160.9%, to $5.7 billion as of June 30, 2021 compared to $2.2 billion as of June 30, 2020 compared2020. The increase was primarily due to $1.5 billion as of June 30, 2019.
We received approximately $35.8 million of PPP loan origination fees from the SBA. We also deferred certain origination costs, totaling $3.5 million, related to our PPP loans. The loan fees and the deferred costs will be amortized through interest income over the lifeinvestment of the PPP loans, which is expectedproceeds of our October 2020 IPO.
Interest Expense
Interest expense decreased $6.1 million, or 65.9%, to2021 from $3.2 million during the three months ended June 30, 2020 from $9.3 million during the three months ended June 30, 2019.2020. The decrease was a result of lower funding costs associated with the decline in market interest rates.
•Interest expense on our interest-bearing deposits decreased by $4.2$2.1 million, or 57.6%66.8%, to $1.0 million during the three months ended June 30, 2021 from $3.1 million during the three months ended June 30, 2020 from $7.3 million2020.
Interest expense on borrowed funds decreased by $1.9 million, or 96.3%, to $0.1 million2021 from $74.0 thousand during the three months ended June 30, 2020 from $2.02020.
Interest expense decreased $8.9 million, or 49.3%, to2021 from $9.2 million during the six months ended June 30, 2020 from $18.12020. The decrease was a result of lower funding costs associated with the decline in market interest rates.
Interest expense on our interest-bearing deposits decreased by $5.3 million, or 38.4%, to2021 from $8.5 million during the six months ended June 30, 2020.
Interest expense on borrowed funds decreased by $3.6$198.9 million or 84.3%, to $0.7 million duringfor the six months ended June 30, 2020, from $4.3representing an increase of $5.8 million, or 2.9%. Net interest income increased slightly between the two periods as the reduction in interest income associated with the lower interest rate environment was more than offset by a related reduction in interest expense coupled with a substantial increase in average balances of interest-earning assets during the three and six months ended June 30, 2019. The decrease in interest expense on borrowed funds was primarily due2021 compared to the average balance of the FHLB advances decreasing by $143.8 million to $16.2 million during thethree and six months ended June 30, 2020, compared to $160.0 million duringprimarily reflecting the six months ended June 30, 2019. The average balance of borrowed funds decreased by $233.2 million, or 66.2%, to $119.2 million as of June 30, 2020 compared to $352.5 million as of June 30, 2019.
Net Interest Income
Net interest income decreased by $4.8 million, or 4.6%, to $98.8 million during the three months ended June 30, 2020 from $103.5 million during the three months ended June 30, 2019. The decrease was a resultinvestment of the Bank’s asset sensitivity combined with a lower interest rate environment. The decline in interest income was only partially offset by a decline in interest expense.
Net interest income decreased by $7.3 million, or 3.5%, to $198.9 million during the six months ended June 30,proceeds from our October 2020 from $206.2 million during the six months ended June 30, 2019. The decrease was primarily a result of the decrease in interest and dividend income partially offset by the decrease in interest expense, both due to the decrease in interest rates during the six months ended June 30, 2020.
IPO.
Average Balances, Interest Earned/Paid, & Average Yields
Three months ended June 30, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Average Outstanding Balance | Interest | Average Yield/Cost (5) | Average Outstanding Balance | Interest | Average Yield /Cost (5) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans (1) | ||||||||||||||||||||||||
Residential | $ | 1,423,161 | $ | 12,555 | 3.51 | % | $ | 1,435,561 | $ | 13,439 | 3.72 | % | ||||||||||||
Commercial | 6,735,075 | 69,779 | 4.12 | % | 6,024,268 | 74,064 | 4.89 | % | ||||||||||||||||
Consumer | 1,287,430 | 10,610 | 3.28 | % | 1,456,395 | 15,349 | 4.19 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total loans | 9,445,666 | 92,944 | 3.91 | % | 8,916,224 | 102,852 | 4.59 | % | ||||||||||||||||
Investment securities | 1,478,156 | 10,083 | 2.71 | % | 1,460,262 | 10,644 | 2.90 | % | ||||||||||||||||
Federal funds sold and other short-term investments | 694,386 | 284 | 0.16 | % | 84,044 | 612 | 2.90 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-earning assets | 11,618,208 | 103,311 | 3.54 | % | 10,460,530 | 114,108 | 4.34 | % | ||||||||||||||||
Non-interest-earning assets | 1,064,218 | 859,928 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total assets | $ | 12,682,426 | $ | 11,320,458 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Savings account | $ | 1,036,344 | $ | 64 | 0.02 | % | $ | 1,008,737 | $ | 52 | 0.02 | % | ||||||||||||
Interest checking account | 2,158,242 | 648 | 0.12 | % | 1,877,777 | 1,075 | 0.23 | % | ||||||||||||||||
Money market investment | 3,087,048 | 1,928 | 0.25 | % | 2,634,820 | 4,997 | 0.75 | % | ||||||||||||||||
Time account | 320,277 | 462 | 0.57 | % | 443,070 | 1,188 | 1.07 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-bearing deposits | 6,601,911 | 3,102 | 0.19 | % | 5,964,404 | 7,312 | 0.49 | % | ||||||||||||||||
Borrowings | 119,211 | 74 | 0.25 | % | 352,453 | 2,001 | 2.26 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-bearing liabilities | 6,721,122 | 3,176 | 0.19 | % | 6,316,857 | 9,313 | 0.59 | % | ||||||||||||||||
Demand accounts | 3,963,066 | 3,320,873 | ||||||||||||||||||||||
Other noninterest-bearing liabilties | 337,679 | 192,521 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total liabilities | 11,021,867 | 9,830,251 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total net worth | 1,660,559 | 1,490,207 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total liabilities and retained earnings | $ | 12,682,426 | $ | 11,320,458 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest income - FTE | $ | 100,135 | $ | 104,795 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest rate spread (2) | 3.35 | % | 3.75 | % | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest-earning assets (3) | $ | 4,897,086 | $ | 4,143,673 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest margin - FTE (4) | 3.43 | % | 4.02 | % | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 172.86 | % | 165.60 | % |
|
|
|
|
|
Six months ended June 30, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Average Outstanding Balance | Interest | Average Yield /Cost (5) | Average Outstanding Balance | Interest | Average Yield/Cost (5) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans (1) | ||||||||||||||||||||||||
Residential | $ | 1,423,161 | $ | 25,858 | 3.65 | % | $ | 1,435,561 | $ | 26,861 | 3.77 | % | ||||||||||||
Commercial | 6,735,075 | 139,394 | 4.16 | % | 6,024,268 | 146,483 | 4.90 | % | ||||||||||||||||
Consumer | 1,287,430 | 24,017 | 3.75 | % | 1,456,395 | 30,706 | 4.25 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total loans | 9,445,666 | 189,269 | 4.03 | % | 8,916,224 | 204,050 | 4.61 | % | ||||||||||||||||
Investment securities | 1,478,156 | 20,768 | 2.83 | % | 1,460,262 | 21,956 | 3.03 | % | ||||||||||||||||
Federal funds sold and other short-term investments | 694,386 | 801 | 0.23 | % | 84,044 | 965 | 2.32 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-earning assets | 11,618,208 | 210,838 | 3.65 | % | 10,460,530 | 226,971 | 4.38 | % | ||||||||||||||||
Non-interest-earning assets | 1,064,218 | 859,928 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total assets | $ | 12,682,426 | $ | 11,320,458 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Savings account | $ | 1,036,344 | $ | 118 | 0.02 | % | $ | 1,008,737 | $ | 105 | 0.02 | % | ||||||||||||
Interest checking account | 2,158,242 | 1,467 | 0.14 | % | 1,877,777 | 1,973 | 0.21 | % | ||||||||||||||||
Money market investment | 3,087,048 | 5,832 | 0.38 | % | 2,634,820 | 9,287 | 0.71 | % | ||||||||||||||||
Time account | 320,277 | 1,100 | 0.69 | % | 443,070 | 2,467 | 1.12 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-bearing deposits | 6,601,911 | 8,517 | 0.26 | % | 5,964,404 | 13,832 | 0.47 | % | ||||||||||||||||
Borrowings | 119,211 | 673 | 1.14 | % | 352,453 | 4,293 | 2.46 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total interest-bearing liabilities | 6,721,122 | 9,190 | 0.27 | % | 6,316,857 | 18,125 | 0.58 | % | ||||||||||||||||
Demand accounts | 3,963,066 | 3,320,873 | ||||||||||||||||||||||
Other noninterest-bearing liabilties | 337,679 | 192,521 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total liabilities | 11,021,867 | 9,830,251 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total net worth | 1,660,559 | 1,490,207 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total liabilities and retained earnings | $ | 12,682,426 | $ | 11,320,458 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest income - FTE | $ | 201,648 | $ | 208,846 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest rate spread (2) | 3.38 | % | 3.80 | % | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest-earning assets (3) | $ | 4,897,086 | $ | 4,143,673 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net interest margin - FTE (4) | 3.49 | % | 4.03 | % | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 172.86 | % | 165.60 | % |
|
|
|
|
|
As of and for the three months ended June 30, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||||||||
Average Outstanding Balance | Interest | Average Yield/Cost (5) | Average Outstanding Balance | Interest | Average Yield /Cost (5) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Loans (1) | |||||||||||||||||||||||||||||||||||
Residential | $ | 1,433,056 | $ | 11,397 | 3.19 | % | $ | 1,416,326 | $ | 12,555 | 3.57 | % | |||||||||||||||||||||||
Commercial | 7,301,745 | 71,747 | 3.94 | % | 7,195,093 | 69,779 | 3.90 | % | |||||||||||||||||||||||||||
Consumer | 1,061,900 | 8,597 | 3.25 | % | 1,263,691 | 10,610 | 3.38 | % | |||||||||||||||||||||||||||
Total loans | 9,796,701 | 91,741 | 3.76 | % | 9,875,110 | 92,944 | 3.79 | % | |||||||||||||||||||||||||||
Investment securities | 4,344,690 | 14,778 | 1.36 | % | 1,455,901 | 10,083 | 2.79 | % | |||||||||||||||||||||||||||
Federal funds sold and other short-term investments | 1,617,741 | 431 | 0.11 | % | 1,148,332 | 284 | 0.10 | % | |||||||||||||||||||||||||||
Total interest-earning assets | 15,759,132 | 106,950 | 2.72 | % | 12,479,343 | 103,311 | 3.33 | % | |||||||||||||||||||||||||||
Non-interest-earning assets | 1,061,121 | 1,106,217 | |||||||||||||||||||||||||||||||||
Total assets | $ | 16,820,253 | $ | 13,585,560 | |||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Savings account | $ | 1,385,735 | $ | 69 | 0.02 | % | $ | 1,095,806 | $ | 64 | 0.02 | % | |||||||||||||||||||||||
Interest checking account | 2,541,862 | 253 | 0.04 | % | 2,414,356 | 649 | 0.11 | % | |||||||||||||||||||||||||||
Money market investment | 3,523,330 | 605 | 0.07 | % | 3,192,669 | 1,929 | 0.24 | % | |||||||||||||||||||||||||||
Time account | 246,801 | 104 | 0.17 | % | 313,410 | 462 | 0.59 | % | |||||||||||||||||||||||||||
Total interest-bearing deposits | 7,697,728 | 1,031 | 0.05 | % | 7,016,241 | 3,104 | 0.18 | % | |||||||||||||||||||||||||||
Borrowings | 25,042 | 42 | 0.67 | % | 74,960 | 74 | 0.40 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 7,722,770 | 1,073 | 0.06 | % | 7,091,201 | 3,178 | 0.18 | % | |||||||||||||||||||||||||||
Demand accounts | 5,355,170 | 4,448,756 | |||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 335,816 | 356,700 | |||||||||||||||||||||||||||||||||
Total liabilities | 13,413,756 | 11,896,657 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 3,406,497 | 1,688,903 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 16,820,253 | $ | 13,585,560 | |||||||||||||||||||||||||||||||
Net interest income – FTE | $ | 105,877 | $ | 100,133 | |||||||||||||||||||||||||||||||
Net interest rate spread (2) | 2.66 | % | 3.15 | % | |||||||||||||||||||||||||||||||
Net interest-earning assets (3) | $ | 8,036,362 | $ | 5,388,142 | |||||||||||||||||||||||||||||||
Net interest margin – FTE (4) | 2.69 | % | 3.23 | % | |||||||||||||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 204.06 | % | 175.98 | % |
(1)Non-accrual loans are included in loans.
As of and for the six months ended June 30, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||||||||
Average Outstanding Balance | Interest | Average Yield /Cost (5) | Average Outstanding Balance | Interest | Average Yield/Cost (5) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Loans (1) | |||||||||||||||||||||||||||||||||||
Residential | $ | 1,413,208 | $ | 22,671 | 3.24 | % | $ | 1,423,161 | $ | 25,858 | 3.65 | % | |||||||||||||||||||||||
Commercial | 7,309,803 | 140,952 | 3.89 | % | 6,735,075 | 139,394 | 4.16 | % | |||||||||||||||||||||||||||
Consumer | 1,083,677 | 17,534 | 3.26 | % | 1,287,430 | 24,017 | 3.75 | % | |||||||||||||||||||||||||||
Total loans | 9,806,688 | 181,157 | 3.73 | % | 9,445,666 | 189,269 | 4.03 | % | |||||||||||||||||||||||||||
Investment securities | 3,990,080 | 27,360 | 1.38 | % | 1,478,156 | 20,768 | 2.83 | % | |||||||||||||||||||||||||||
Federal funds sold and other short-term investments | 1,678,812 | 863 | 0.10 | % | 694,386 | 801 | 0.23 | % | |||||||||||||||||||||||||||
Total interest-earning assets | 15,475,580 | 209,380 | 2.73 | % | 11,618,208 | 210,838 | 3.65 | % | |||||||||||||||||||||||||||
Non-interest-earning assets | 1,089,585 | 1,064,218 | |||||||||||||||||||||||||||||||||
Total assets | $ | 16,565,165 | $ | 12,682,426 | |||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
Savings account | $ | 1,343,133 | $ | 133 | 0.02 | % | $ | 1,036,344 | $ | 118 | 0.02 | % | |||||||||||||||||||||||
Interest checking account | 2,466,860 | 487 | 0.04 | % | 2,158,242 | 1,467 | 0.14 | % | |||||||||||||||||||||||||||
Money market investment | 3,482,002 | 1,193 | 0.07 | % | 3,087,048 | 5,833 | 0.38 | % | |||||||||||||||||||||||||||
Time account | 248,946 | 220 | 0.18 | % | 320,277 | 1,100 | 0.69 | % | |||||||||||||||||||||||||||
Total interest-bearing deposits | 7,540,941 | 2,033 | 0.05 | % | 6,601,911 | 8,518 | 0.26 | % | |||||||||||||||||||||||||||
Borrowings | 25,332 | 82 | 0.65 | % | 119,211 | 673 | 1.14 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 7,566,273 | 2,115 | 0.06 | % | 6,721,122 | 9,191 | 0.27 | % | |||||||||||||||||||||||||||
Demand accounts | 5,241,134 | 3,963,066 | |||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 345,776 | 337,679 | |||||||||||||||||||||||||||||||||
Total liabilities | 13,153,183 | 11,021,867 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 3,411,982 | 1,660,559 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 16,565,165 | $ | 12,682,426 | |||||||||||||||||||||||||||||||
Net interest income – FTE | $ | 207,265 | $ | 201,647 | |||||||||||||||||||||||||||||||
Net interest rate spread (2) | 2.67 | % | 3.38 | % | |||||||||||||||||||||||||||||||
Net interest-earning assets (3) | $ | 7,909,307 | $ | 4,897,086 | |||||||||||||||||||||||||||||||
Net interest margin – FTE (4) | 2.70 | % | 3.49 | % | |||||||||||||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities | 204.53 | % | 172.86 | % |
Therelease of provision for loan losses increased by $32.7of $0.6 million or 726.7%,recorded for the three months ended March 31, 2021. Overall, we recorded a total release of provision for loan losses of $3.9 million for the six months ended June 30, 2021 compared to a provision of $37.2 million for the six months ended June 30, 2020. In March 2020, compared to $4.5 million for the six months ended June 30, 2019. The increase was primarily due
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||||||||||
2020 | 2019 | Amount | % | 2020 | 2019 | Amount | % | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Insurance commissions | $ | 22,697 | $ | 24,135 | (1,438 | ) | (6.0 | )% | $ | 50,174 | $ | 48,897 | 1,277 | 2.6 | % | |||||||||||||||||
Service charges on deposit accounts | 4,364 | 6,771 | (2,407 | ) | (35.5 | )% | 10,462 | 13,175 | (2,713 | ) | (20.6 | )% | ||||||||||||||||||||
Debit card processing fees | 5,194 | 4,980 | 214 | 4.3 | % | 10,289 | 9,608 | 681 | 7.1 | % | ||||||||||||||||||||||
Trust and investment advisory fees | 2,337 | 2,638 | (301 | ) | (11.4 | )% | 4,807 | 5,048 | (241 | ) | (4.8 | ) % | ||||||||||||||||||||
Interest swap income | 771 | (810 | ) | 1,581 | (195.2 | )% | (5,238 | ) | (470 | ) | (4,768 | ) | (1,014.5 | )% | ||||||||||||||||||
Income from investments held in rabbi trusts | 7,745 | 1,822 | 5,923 | 325.1 | % | 1,002 | 5,969 | (4,967 | ) | (83.2 | )% | |||||||||||||||||||||
Trading securities gains, net | (1 | ) | 152 | (153 | ) | (100.7 | )% | (3 | ) | 1,294 | (1,297 | ) | (100.2 | )% | ||||||||||||||||||
Net gain on sales of mortgage loans held for sale | 1,420 | 159 | 1,261 | 793.1 | % | 1,513 | 209 | 1,304 | 623.9 | % | ||||||||||||||||||||||
Gains on sales of securities available for sale, net | 163 | 1,966 | (1,803 | ) | (91.7 | )% | 285 | 2,016 | (1,731 | ) | (85.9 | )% | ||||||||||||||||||||
Other | 2,967 | 3,819 | (852 | ) | (22.3 | )% | 7,735 | 7,686 | 49 | 0.6 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total noninterest income | $ | 47,657 | $ | 45,632 | $ | 2,025 | 4.4 | % | $ | 81,026 | $ | 93,432 | $ | (12,406 | ) | (13.3 | )% | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Amount | % | 2021 | 2020 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Insurance commissions | $ | 23,664 | $ | 22,697 | $ | 967 | 4.3 | % | $ | 51,811 | $ | 50,174 | $ | 1,637 | 3.3 | % | |||||||||||||||||||||||||||||||
Service charges on deposit accounts | 5,708 | 4,364 | 1,344 | 30.8 | % | 11,075 | 10,462 | 613 | 5.9 | % | |||||||||||||||||||||||||||||||||||||
Trust and investment advisory fees | 6,074 | 5,194 | 880 | 16.9 | % | 11,737 | 10,289 | 1,448 | 14.1 | % | |||||||||||||||||||||||||||||||||||||
Debit card processing fees | 3,170 | 2,337 | 833 | 35.6 | % | 5,919 | 4,807 | 1,112 | 23.1 | % | |||||||||||||||||||||||||||||||||||||
Interest swap (losses) income | (1,164) | 771 | (1,935) | (251.0) | % | 4,241 | (5,238) | 9,479 | (181.0) | % | |||||||||||||||||||||||||||||||||||||
Income (losses) from investments held in rabbi trusts | 4,216 | 7,745 | (3,529) | (45.6) | % | 6,062 | 1,002 | 5,060 | 505.0 | % | |||||||||||||||||||||||||||||||||||||
Losses on trading securities, net | — | (1) | 1 | (100.0) | % | — | (3) | 3 | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Gain on sales of mortgage loans held for sale, net | 848 | 1,420 | (572) | (40.3) | % | 2,327 | 1,513 | 814 | 53.8 | % | |||||||||||||||||||||||||||||||||||||
Gains on sales of securities available for sale, net | 1 | 163 | (162) | (99.4) | % | 1,165 | 285 | 880 | 308.8 | % | |||||||||||||||||||||||||||||||||||||
Other | 3,216 | 2,967 | 249 | 8.4 | % | 6,608 | 7,735 | (1,127) | (14.6) | % | |||||||||||||||||||||||||||||||||||||
Total noninterest income | $ | 45,733 | $ | 47,657 | $ | (1,924) | (4.0) | % | $ | 100,945 | $ | 81,026 | $ | 19,919 | 24.6 | % |
Noninterest income decreased by $12.4 million, or 13.3%, to $81.0 million for the six months ended June 30, 2020 from $93.4 million for the six months ended June 30, 2019. The decrease was primarily due to a $5.0$3.5 million decrease in income from investments held in rabbi trusts and a $4.8$1.9 million decrease in interest rate swap income, and a $2.7 million decrease in deposit service charges, net,which were partially offset by a $1.3 million increase in insurance commissions.
Insurance commissions increased primarily as a result of an increase in our profit-sharing revenues and commissions.
•Income (loss) from investments held in rabbi trust decreased primarily as a result of a less favorable mark-to-market adjustment during the sixthree months ended June 30, 2020,2021 compared to the sixthree months ended June 30, 2019.
Swap•The Company experienced swap losses during the three months ended June 30, 2021 as compared to income decreasedduring the three months ended June 30, 2020 primarily as a result of an unfavorable mark-to-market adjustment due to the current interest rate and economic environment.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Change | Change | |||||||||||||||||||||||||||||||
2020 | 2019 | Amount | % | 2020 | 2019 | Amount | % | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 63,335 | $ | 62,364 | 971 | 1.6 | % | $ | 124,924 | $ | 129,670 | (4,746 | ) | (3.7 | )% | |||||||||||||||||
Office occupancy and equipment | 8,615 | 8,383 | 232 | 2.8 | % | 17,304 | 17,182 | 122 | 0.7 | % | ||||||||||||||||||||||
Data processing | 12,180 | 10,912 | 1,268 | 11.6 | % | 22,184 | 21,588 | 596 | 2.8 | % | ||||||||||||||||||||||
Professional services | 4,396 | 3,966 | 430 | 10.8 | % | 8,085 | 7,104 | 981 | 13.8 | % | ||||||||||||||||||||||
Charitable contributions | 2,797 | 3,683 | (886 | ) | (24.1 | )% | 3,984 | 7,331 | (3,347 | ) | (45.7 | )% | ||||||||||||||||||||
Marketing | 1,645 | 2,683 | (1,038 | ) | (38.7 | )% | 4,113 | 4,406 | (293 | ) | (6.7 | )% | ||||||||||||||||||||
Loan expenses | 2,036 | 886 | 1,150 | 129.8 | % | 3,148 | 1,551 | 1,597 | 103.0 | |||||||||||||||||||||||
FDIC insurance | 944 | 927 | 17 | 1.8 | % | 1,850 | 1,800 | 50 | 2.8 | % | ||||||||||||||||||||||
Amortization of intangible assets | 701 | 886 | (185 | ) | (20.9 | )% | 1,403 | 1,773 | (370 | ) | (20.9 | )% | ||||||||||||||||||||
Net periodic benefit cost, excluding service cost | (2,443 | ) | (1,334 | ) | (1,109 | ) | (83.1 | )% | (4,885 | ) | (2,668 | ) | (2,217 | ) | (83.1 | )% | ||||||||||||||||
Other | 6,559 | 8,214 | (1,655 | ) | (20.1 | )% | 13,827 | 16,662 | (2,835 | ) | (17.0 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total noninterest expense | $ | 100,765 | $ | 101,570 | $ | (805 | ) | (0.8 | )% | $ | 195,937 | $ | 206,399 | $ | (10,462 | ) | (5.1 | )% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | Amount | % | 2021 | 2020 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 69,276 | $ | 63,335 | $ | 5,941 | 9.4 | % | $ | 133,316 | $ | 124,924 | $ | 8,392 | 6.7 | % | |||||||||||||||||||||||||||||||
Office occupancy and equipment | 8,094 | 8,615 | (521) | (6.0) | % | 16,311 | 17,304 | (993) | (5.7) | % | |||||||||||||||||||||||||||||||||||||
Data processing | 13,572 | 12,180 | 1,392 | 11.4 | % | 25,701 | 22,184 | 3,517 | 15.9 | % | |||||||||||||||||||||||||||||||||||||
Professional services | 6,439 | 4,396 | 2,043 | 46.5 | % | 10,587 | 8,085 | 2,502 | 30.9 | % | |||||||||||||||||||||||||||||||||||||
Charitable contributions | — | 2,797 | (2,797) | (100.0) | % | — | 3,984 | (3,984) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Marketing | 3,497 | 1,645 | 1,852 | 112.6 | % | 5,188 | 4,113 | 1,075 | 26.1 | % | |||||||||||||||||||||||||||||||||||||
Loan expenses | 1,854 | 2,036 | (182) | (8.9) | % | 3,701 | 3,148 | 553 | 17.6 | % | |||||||||||||||||||||||||||||||||||||
FDIC insurance | 985 | 944 | 41 | 4.3 | % | 1,933 | 1,850 | 83 | 4.5 | % | |||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 625 | 701 | (76) | (10.8) | % | 1,157 | 1,403 | (246) | (17.5) | % | |||||||||||||||||||||||||||||||||||||
Other | 2,993 | 4,116 | (1,123) | (27.3) | % | 3,490 | 8,942 | (5,452) | (61.0) | % | |||||||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 107,335 | $ | 100,765 | $ | 6,570 | 6.5 | % | $ | 201,384 | $ | 195,937 | $ | 5,447 | 2.8 | % |
2020 in connection with the Company’s IPO.
Salaries and employee benefits decreased
Charitable contributions decreased primarily as a result of lower contributions to the Eastern Bank Charitable Foundation, as a result of lower taxable income$6.4 million and $1.2 million, respectively, for the six months ended June 30, 2020,2021 compared to the six months ended June 30, 2019.
Net period benefit cost, excluding service cost, decreased primarily as a result of a reduction in the expected return on plan assets.
Professional services increased primarily as a result of higher legal costs related to (i) corporate-related matters, (ii) loan- related matters and (iii) our commercial banking strategy and development services.
Loan expenses increased primarily as a result of increased mortgage loan originations.
Income Taxes
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Combined federal and state income tax provisions | $ | 7,197 | $ | 11,032 | $ | 8,495 | $ | 20,710 | ||||||||
Effective income tax rates | 19.4 | % | 23.9 | % | 18.2 | % | 23.3 | % | ||||||||
Blended statutory tax rate | 28.1 | % | 28.1 | % | 28.1 | % | 28.1 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Combined federal and state income tax provisions | $ | 11,497 | $ | 7,197 | $ | 25,668 | $ | 8,495 | |||||||||||||||
Effective income tax rates | 24.8 | % | 19.4 | % | 23.7 | % | 18.2 | % | |||||||||||||||
Blended statutory tax rate | 28.1 | % | 28.1 | % | 28.1 | % | 28.1 | % |
Income tax expense decreased by $12.2 million, or 59.0%, to2021 from $8.5 million in the six months ended June 30, 2020 from $20.7 million2020. The increase in income tax expense was due primarily to higher pre-tax income during the three and six months ended June 30, 2019. The decrease was due primarily2021 compared to lower pre-tax income during the three and six months ended June 30, 2020, compareddecreasing the impact on the effective rate related to the six months ended June 30, 2019, whilefavorable permanent differences, including investment tax credits and other favorable permanent differences have remained relatively constant.
tax exempt income. For additional information related to the Company’s income taxes see
Note 12, “Income Taxes” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 in the Company’s 2020 10-K.As of and for the three months ended June 30, | ||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Banking Business | Insurance Agency Business | Other/ Eliminations | Total | Banking Business | Insurance Agency Business | Other/ Eliminations | Total | |||||||||||||||||||||||||
(Dollars In Thousands) | ||||||||||||||||||||||||||||||||
Net interest income | $ | 98,755 | $ | — | $ | — | $ | 98,755 | $ | 103,523 | $ | — | $ | — | $ | 103,523 | ||||||||||||||||
Provision for loan losses | 8,600 | — | — | 8,600 | 1,500 | — | — | 1,500 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net interest income after provision for loan losses | 90,155 | — | — | 90,155 | 102,023 | — | — | 102,023 | ||||||||||||||||||||||||
Noninterest income | 23,779 | 23,886 | (8 | ) | 47,657 | 21,143 | 24,489 | — | 45,632 | |||||||||||||||||||||||
Noninterest expense | 81,713 | 20,084 | (1,032 | ) | 100,765 | 83,205 | 19,200 | (835 | ) | 101,570 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before provision for income taxes | 32,221 | 3,802 | 1,024 | 37,047 | 39,961 | 5,289 | 835 | 46,085 | ||||||||||||||||||||||||
Income tax provision (benefit) | 6,121 | 1,076 | — | 7,197 | 9,517 | 1,515 | — | 11,032 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income | $ | 26,100 | $ | 2,726 | $ | 1,024 | $ | 29,850 | $ | 30,444 | $ | 3,774 | $ | 835 | $ | 35,053 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total assets | $ | 13,867,746 | $ | 193,320 | $ | (64,543 | ) | $ | 13,996,523 | $ | 11,397,392 | $ | 164,576 | $ | (48,284 | ) | $ | 11,513,684 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total liabilities | $ | 12,314,286 | $ | 53,150 | $ | (64,543 | ) | $ | 12,302,893 | $ | 9,975,081 | $ | 35,228 | $ | (48,284 | ) | $ | 9,962,025 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
For the six months ended June 30 | ||||||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Banking Business | Insurance Agency Business | Other/ Eliminations | Total | Banking Business | Insurance Agency Business | Other/ Eliminations | Total | |||||||||||||||||||||||||
(Dollars in Thousands) | ||||||||||||||||||||||||||||||||
Net interest income | $ | 198,901 | $ | — | $ | — | $ | 198,901 | $ | 206,195 | — | — | 206,195 | |||||||||||||||||||
Provision for loan losses | 37,200 | — | — | 37,200 | 4,500 | — | — | 4,500 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net interest income after provision for loan losses | 161,701 | — | — | 161,701 | 201,695 | — | — | 201,695 | ||||||||||||||||||||||||
Noninterest income | 30,647 | 50,408 | (29 | ) | 81,026 | 43,405 | 50,048 | (21 | ) | 93,432 | ||||||||||||||||||||||
Noninterest expense | 160,178 | 37,725 | (1,966 | ) | 195,937 | 169,096 | 39,067 | (1,764 | ) | 206,399 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Income before provision for income taxes | 32,170 | 12,683 | 1,937 | 46,790 | 76,004 | 10,981 | 1,743 | 88,728 | ||||||||||||||||||||||||
Income tax provision | 4,906 | 3,589 | — | 8,495 | 17,576 | 3,134 | — | 20,710 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net income | $ | 27,264 | $ | 9,094 | $ | 1,937 | $ | 38,295 | $ | 58,428 | $ | 7,847 | $ | 1,743 | $ | 68,018 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the three months ended June 30, 2021 2020 Banking
BusinessInsurance
Agency
BusinessOther/
EliminationsTotal Banking
BusinessInsurance
Agency
BusinessOther/
EliminationsTotal (In thousands) Net interest income $ 104,608 $ — $ — $ 104,608 $ 98,755 $ — $ — $ 98,755 (Release of) provision for loan losses (3,300) — — (3,300) 8,600 — — 8,600 Net interest income after provision for loan losses 107,908 — — 107,908 90,155 — — 90,155 Noninterest income 21,567 24,166 — 45,733 23,779 23,886 (8) 47,657 Noninterest expense 87,799 20,496 (960) 107,335 81,713 20,084 (1,032) 100,765 Income before provision for income taxes 41,676 3,670 960 46,306 32,221 3,802 1,024 37,047 Income tax provision 10,464 1,033 — 11,497 6,121 1,076 — 7,197 Net income $ 31,212 $ 2,637 $ 960 $ 34,809 $ 26,100 $ 2,726 $ 1,024 $ 29,850 Total assets $ 16,905,267 $ 209,416 $ (67,230) $ 17,047,453 $ 13,867,746 $ 193,320 $ (64,543) $ 13,996,523 Total liabilities $ 13,628,092 $ 55,969 $ (67,230) $ 13,616,831 $ 12,314,286 $ 53,150 $ (64,543) $ 12,302,893 For the six months ended June 30, 2021 2020 Banking
BusinessInsurance
Agency
BusinessOther/
EliminationsTotal Banking
BusinessInsurance
Agency
BusinessOther/
EliminationsTotal (In thousands) Net interest income $ 204,699 $ — $ — $ 204,699 $ 198,901 $ — $ — $ 198,901 (Release of ) provision for loan losses (3,880) — — (3,880) 37,200 — — 37,200 Net interest income after provision for loan losses 208,579 — — 208,579 161,701 — — 161,701 Noninterest income 48,527 52,450 (32) 100,945 30,647 50,408 (29) 81,026 Noninterest expense 163,074 40,307 (1,997) 201,384 160,178 37,725 (1,966) 195,937 Income before provision for income taxes 94,032 12,143 1,965 108,140 32,170 12,683 1,937 46,790 Income tax provision 22,257 3,411 — 25,668 4,906 3,589 — 8,495 Net income $ 71,775 $ 8,732 $ 1,965 $ 82,472 $ 27,264 $ 9,094 $ 1,937 $ 38,295
•Average interest-earning assets grew $1.2$3.3 billion, or 11.1%26.3%, to $11.6$15.8 billion as offor the three months ended June 30, 20202021 from $10.5$12.5 billion as offor the three months ended June 30, 2019, with2020. The increase is primarily due to an increase in average total loans, our largest category ofinvestment securities and federal funds sold and other short-term investments which increased $3.4 billion, or 129.0%, to $6.0 billion for the three months ended June 30, 2021 compared to $2.6 billion for the three months ended June 30, 2020. The increase in average interest-earning assets growing $529.4 million, or 5.9%,resulted in an increase in interest income and was partially offset by a decline in market rates of interest. For additional discussion, refer to $9.4 billion as of June 30, 2020 from $8.9 billion as of June 30, 2019.
•Average interest-bearing liabilities grew $404.3 million,$0.6 billion, or 6.4%8.9%, to $6.7$7.7 billion as offor the three months ended June 30, 2021 from $7.1 billion for the three months ended June 30, 2020, from $6.3 billion as of June 30, 2019, with average total interest-bearing deposits, our largest category of average interest-bearing liabilities, growing $637.5 million,$0.7 billion, or 10.7%9.7%, to $7.7 billion for the three months ended June 30, 2021 compared to $7.0 billion for the three months ended June 30, 2020. The increase in average interest-bearing liabilities was more than offset by a decline in market rates of interest resulting in an overall decrease in interest expense. For additional discussion, refer to the earlier “Interest and Dividends” section.
Assets under management in our wealth management business increased by $134.5 million, or 5.5%,2021, compared to $2.6 billion asa provision of June 30, 2020 from $2.4 billion as of June 30, 2019. Our income related to our asset management business, which we record as noninterest income, increased by $0.2 million, or 4.3%, to $5.2$8.6 million for the three months ended June 30, 2020 compared to $5.0 millionand a total release of provision for the three months ended June 30, 2019. The increase was due to the fees we earned during the three months ended June 30, 2020, primarily due to higher valuationsloan losses of our assets under management.
Our income related to our asset management business increased by $0.7 million, or 7.3%, to $10.3$3.9 million for the six months ended June 30, 20202021 compared to $9.6a provision of $37.2 million for the six months ended June 30, 2019. The increase2020. Given continued improved economic and credit conditions during the three and six months ended June 30, 2021, we determined that a release of the provision was duenecessary. Refer to the fees we earnedearlier discussion within this section for additional information.
Noninterest income related to our insurance agency business decreased by $0.6 million, or 2.5%, to $23.9 million during the three months ended June 30, 2020 from $24.5 million during the three months ended June 30, 2019. The decrease was driven primarily by a decrease in negotiated commissions and profit sharing revenues of $1.5 million and $0.2 million, respectively, partially offset by an increase in income from investments held in rabbi trusts of $0.8 million and in increase in recurring commissions of $0.3 million due to organic growth.
•Noninterest income related to our insurance agency business increased by $0.3 million, or 1.17%, to $24.2 million during the three months ended June 30, 2021 from $23.9 million during the three months ended June 30, 2020. The slight increase was driven by recurring commissions and profit sharing revenues which increased by $0.6 million and $0.4 million, respectively. These increases were partially offset by a decrease in income from investments held in rabbi trusts of $0.7 million which was primarily attributable to a less favorable mark-to-market adjustment on equity securities held in these accounts during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.
2020,2021, we had $3.7$4.1 billion of commitments to originate loans, comprised of $2.2$2.4 billion of commitments under commercial loans and lines of credit (including $291.8$356.9 million of unadvanced portions of construction loans), $1.2$1.4 billion of commitments under home equity loans and lines of credit, $213.9$182.1 million in standard overdraft coverage commitments, and $45.3$85.6 million of unfunded commitments related to residential real estate loans and $20.0$60.1 million in other consumer loans and lines of credit. In addition, at June 30, 2020,2021, we had $57.4$61.8 million in standby letters of credit outstanding. Finally, weWe also had $67.7$45.3 million in forward commitments to sell loans.
Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model. We estimate what our net interest income would be for a 12-month period assuming no changes in interest rates. We then calculate what the net interest income would be for the same period under the assumption that the United StatesU.S. Treasury yield curve increases or decreases instantaneously by +200, +300, +400 and -100 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Changes in Interest Rates” column below. The model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios during periods of lower market interest rates. The relatively low level of interest rates prevalent at June 30, 2021 and December 31, 2020 precluded the modeling of certain falling rate scenarios, includingscenarios. We do not model negative interest rates.
rate scenarios.
curve:
As of June 30, 2020 | ||||
Change in Interest Rates (basis points) (1) | Net Interest Income Year 1 Forecast | Year 1 Change from Level | ||
(Dollars in thousands) | ||||
400 | $526,813 | 34.0% | ||
300 | 493,129 | 25.4% | ||
200 | 459,940 | 17.0% | ||
Flat | 393,163 | 0.0% | ||
-100 | 383,847 | (2.4)% | ||
As of December 31, 2019 | ||||
Change in Interest Rates (basis points) (1) | Net Interest Income Year 1 Forecast | Year 1 Change from Level | ||
(Dollars in thousands) | ||||
400 | $433,300 | 5.2% | ||
300 | 428,186 | 4.0% | ||
200 | 422,881 | 2.7% | ||
Flat | 411,704 | — % | ||
-100 | 395,697 | (3.9)% |
As of June 30, 2021 | ||||||||||||||
Change in Interest Rates (basis points) (1) | Net Interest Income Year 1 Forecast | Year 1 Change from Level | ||||||||||||
(Dollars in thousands) | ||||||||||||||
400 | $ | 557,547 | 40.4 | % | ||||||||||
300 | 518,005 | 30.4 | % | |||||||||||
200 | 478,885 | 20.6 | % | |||||||||||
Flat | 397,106 | — | % | |||||||||||
(100) | 369,259 | (7.0) | % | |||||||||||
As of December 31, 2020 | ||||||||||||||
Change in Interest Rates (basis points) (1) | Net Interest Income Year 1 Forecast | Year 1 Change from Level | ||||||||||||
(Dollars in thousands) | ||||||||||||||
400 | $ | 571,842 | 50.0 | % | ||||||||||
300 | 524,847 | 37.7 | % | |||||||||||
200 | 478,307 | 25.5 | % | |||||||||||
Flat | 381,259 | — | % | |||||||||||
(100) | 362,186 | (5.0) | % |
The table below represents an analysis of our interest rate risk (excluding the effect of our pension plan)plans) as measured by the estimated changes in our EVE, resulting from an instantaneous and sustained parallel shift in the yield curve (+200, +300, +400 basis points and -100 basis points) at June 30, 20202021 and December 31, 2019.2020. The model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios during periods of lower market interest rates. The relatively low level of interest rates prevalent at June 30, 2021 and December 31, 2020 precluded the modeling of certain falling rate scenarios, including negative interest rates.
EVE Interest Rate Sensitivity
Change in Interest Rate (basis points) (1) | As of June 30, 2020 |
| ||||||||||||||
Estimated EVE (2) | Estimated Increase (Decrease in EVE) from Level | EVE as a Percentage of Total Assets (3) | ||||||||||||||
Amount | Percent | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
400 | $ | 2,769,212 | $ | 544,896 | 24.5 | % | 0.20 | % | ||||||||
300 | 2,666,631 | 442,316 | 19.9 | % | 0.19 | % | ||||||||||
200 | 2,552,682 | 328,367 | 14.8 | % | 0.18 | % | ||||||||||
Flat | 2,224,315 | — | — | % | 0.16 | % | ||||||||||
-100 | 2,051,131 | (173,184 | ) | (7.8 | )% | 0.15 | % |
Change in Interest Rate (basis points) (1) | As of December 31, 2019 |
| ||||||||||||||
Estimated EVE (2) | Estimated Increase (Decrease in EVE) from Level | EVE as a Percentage of Total Assets (3) | ||||||||||||||
Amount | Percent | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||
400 | $ | 2,446,754 | $ | 14,005 | 0.6 | % | 22.51 | % | ||||||||
300 | 2,453,287 | 20,538 | 0.8 | % | 22.11 | % | ||||||||||
200 | 2,457,642 | 24,893 | 1.0 | % | 21.67 | % | ||||||||||
Flat | 2,432,749 | — | — | % | 20.52 | % | ||||||||||
-100 | 2,364,175 | (68,574 | ) | (2.8 | )% | 19.54 | % |
|
|
|
Change in Interest Rate (basis points) (1) | As of June 30, 2021 | |||||||||||||||||||||||||
Estimated EVE (2) | Estimated Increase (Decrease) in EVE from Level | EVE as a Percentage of Total Assets (3) | ||||||||||||||||||||||||
Amount | Percent | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
400 | $ | 4,483,593 | $ | 319,567 | 7.7 | % | 28.18 | % | ||||||||||||||||||
300 | 4,426,492 | 262,466 | 6.3 | % | 27.31 | % | ||||||||||||||||||||
200 | 4,361,352 | 197,326 | 4.7 | % | 26.40 | % | ||||||||||||||||||||
Flat | 4,164,026 | — | — | 24.23 | % | |||||||||||||||||||||
(100) | 3,895,942 | (268,084) | (6.4) | % | 22.43 | % |
Change in Interest Rate (basis points) (1) | As of December 31, 2020 | |||||||||||||||||||||||||
Estimated EVE (2) | Estimated Increase (Decrease) in EVE from Level | EVE as a Percentage of Total Assets (3) | ||||||||||||||||||||||||
Amount | Percent | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
400 | $ | 4,385,795 | $ | 452,022 | 11.5 | % | 29.09 | % | ||||||||||||||||||
300 | 4,297,682 | 363,909 | 9.3 | % | 28.06 | % | ||||||||||||||||||||
200 | 4,205,867 | 272,094 | 6.9 | % | 27.00 | % | ||||||||||||||||||||
Flat | 3,933,773 | — | — | 24.38 | % | |||||||||||||||||||||
(100) | 3,663,432 | (270,341) | (6.9) | % | 22.65 | % |
We participate in the Promontory InterfinancialIntraFi Network allowing(formerly “Promontory”), which allows us to provide access to multi-million dollar FDIC deposit insurance protection on customer deposits for consumers, businesses and public entities. We can elect to sell or repurchase this funding as reciprocal deposits from other Promontory networkIntraFi Network banks depending on our funding needs. At June 30, 20202021 and December 31, 2019,2020, we had a total of $409.0$464.7 million and $270.0$364.8 million of Promontory IntraFi Network one-way sell
2021.
June 30, 2020 | December 31, 2019 | |||||||||||||||
Outstanding | Additional Capacity | Outstanding | Additional Capacity | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Promontory deposits | $ | — | $ | 408,527 | $ | 93,539 | $ | 176,346 | ||||||||
Federal Home Loan Bank | 14,922 | 1,424,505 | (1) | 18,964 | 1,822,955 | (1) | ||||||||||
Federal Reserve Bank of Boston | — | 485,424 | (2) | — | 636,960 | (2) | ||||||||||
Federal Reserve Paycheck Protection Program Liquidity Facility | — | 1,100,181 | — | — | ||||||||||||
Unsecured lines of credit | — | 620,000 | — | 555,000 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total deposits | $ | 14,922 | $ | 4,038,637 | $ | 112,503 | $ | 3,191,261 | ||||||||
|
|
|
|
|
|
|
|
|
|
As of June 30, 2021 | As of December 31, 2020 | ||||||||||||||||||||||
Outstanding | Additional Capacity | Outstanding | Additional Capacity | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
IntraFi Network deposits | $ | — | $ | 464,671 | $ | — | $ | 364,794 | |||||||||||||||
Federal Home Loan Bank (1) | 14,323 | 1,627,016 | 14,624 | 1,581,016 | |||||||||||||||||||
Federal Reserve Bank of Boston (2) | — | 482,107 | — | 503,512 | |||||||||||||||||||
Federal Reserve Paycheck Protection Program Liquidity Facility | — | 825,784 | — | 1,026,117 | |||||||||||||||||||
Unsecured lines of credit | — | 770,000 | — | 620,000 | |||||||||||||||||||
Total deposits | $ | 14,323 | $ | 4,169,578 | $ | 14,624 | $ | 4,095,439 |
Report on Form 10-Q.
2020 Form 10-K.
For additional information related to the Company’s ongoing legal proceedings see
Note 10, “Commitments and Contingencies” within the Notes to the Consolidated Financial Statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q.
|
Q1 Form 10-Q. The COVID-19 pandemic has led to general uncertainty and adverse changes in economic conditions and has heightened, and in some cases manifested, certain of the risks we normally face in operating our business, including those disclosed in our 2020 Form 10-K and updated in the Q1 Form 10-Q. The risk factors disclosure in our 2020 Form 10-K and our Q1 Form 10-Q is therefore qualified by the information relating to COVID-19 that is described in this Quarterly Report on Form 10-Q.
31.1* | ||||||||
31.2* | ||||||||
32.1+ | ||||||||
32.2+ | ||||||||
101* | Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Unaudited Consolidated Balance Sheets as of June 30, |
|
|
|
*Filed herewith
EASTERN BANKSHARES, INC. | ||||||||||||||||
Date : August 13, 2021 | /s/ Robert F. Rivers | |||||||||||||||
By: | Robert F. Rivers | |||||||||||||||
| ||||||||||||||||
Chief Executive Officer and Chair of the Board | ||||||||||||||||
(Principal Executive Officer) | ||||||||||||||||
Date : August 13, 2021 |
| |||||||||||||||
By: | James B. Fitzgerald | |||||||||||||||
Chief Financial Officer | ||||||||||||||||
(Principal Financial Officer) |
89