| Financing Receivables | Loans and Allowance for Credit Losses Major classifications within the Company’s held for investment loan portfolio at March 31, 2021 and December 31, 2020 are as follows: (In thousands) March 31, 2021 December 31, 2020 Commercial: Business $ 6,624,209 $ 6,546,087 Real estate – construction and land 1,073,036 1,021,595 Real estate – business 3,017,242 3,026,117 Personal Banking: Real estate – personal 2,828,418 2,820,030 Consumer 1,966,833 1,950,502 Revolving home equity 285,261 307,083 Consumer credit card 593,833 655,078 Overdrafts 3,239 3,149 Total loans $ 16,392,071 $ 16,329,641 Accrued interest receivable totaled $42.9 million and $41.9 million at March 31, 2021 and December 31, 2020, respectively, and was included within other assets on the consolidated balance sheets. For the three months ended March 31, 2021, the Company wrote-off accrued interest by reversing interest income of $125 thousand and $2.0 million in the Commercial and Personal Banking portfolios, respectively. Similarly, for the three months ended March 31, 2020, the Company wrote-off accrued interest of $54 thousand and $1.9 million in the Commercial and Personal Banking portfolios, respectively. At March 31, 2021, loans of $3.6 billion were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. Additional loans of $1.4 billion were pledged at the Federal Reserve Bank as collateral for discount window borrowings. Allowance for credit losses The allowance for credit losses is measured using an average historical loss model which incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics including borrower type, collateral type and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily large loans on non-accrual status, are evaluated on an individual basis. For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given a single path economic forecast of key macroeconomic variables including GDP, disposable income, unemployment rate, various interest rates, CPI inflation rate, HPI, CREPI and market volatility. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting back to historical averages using a straight-line method. The forecast adjusted loss rate is applied to the amortized cost of loans over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions (except for contractual extensions at the option of the customer), renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed. Credit cards and certain similar consumer lines of credit do not have stated maturities and therefore, for these loan classes, remaining contractual lives are determined by estimating future cash flows expected to be received from customers until payments have been fully allocated to outstanding balances. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. Key model assumptions in the Company’s allowance for credit loss model include the economic forecast, the reasonable and supportable period, prepayment assumptions and qualitative factors applied for portfolio composition changes, underwriting practices, or significant unique events or conditions. The assumptions utilized in estimating the Company’s allowance for credit losses at March 31, 2021 and December 31, 2020 are discussed below. Key Assumption March 31, 2021 December 31, 2020 Overall economic forecast • The recovery from the Global Coronavirus Recession (GCR) continues • Assumes improving health conditions and expanding vaccine distribution • Considers government stimulus • Continued uncertainty regarding the assumptions related to the health crisis • The recovery from the Global Coronavirus Recession (GCR) continues to be gradual throughout 2021 and 2022 • Assumes no additional systemic lockdown measures • Considers government stimulus in the beginning of 2021 • Continued uncertainty regarding the health crisis Reasonable and supportable period and related reversion period • One year for commercial and personal banking loans • Reversion to historical average loss rates within two quarters using straight-line method • Two years for both commercial and personal banking loans • Reversion to historical average loss rates within two quarters using a straight-line method Forecasted macro-economic variables • Unemployment rate ranging from 5.8% to 4.5% during the supportable forecast period • Real GDP growth ranges from 11.1% to 1.0% • Prime rate of 3.25% • Unemployment rate ranging from 6.5% to 5.2% during the supportable forecast period • Real GDP growth ranges from 3.7% to 2.2% • Prime rate of 3.25% Prepayment assumptions Commercial loans • 5% for most loan pools Personal banking loans • Ranging from 26.4% to 23.6% for most loan pools • 58.5% for consumer credit cards Commercial loans • 5% for most loan pools Personal banking loans • Ranging from 23.1% to 23.3% for most loan pools • 58.0% for consumer credit cards Qualitative factors Added net reserves using qualitative processes related to: • Loans originated in our expansion markets, loans that are designated as shared national credits, and certain portfolios considered to be COVID-19 impacted • Changes in the composition of the loan portfolios • Loans downgraded to special mention, substandard, or non-accrual status Added net reserves using qualitative processes related to: • Loans originated in our expansion markets, loans that are designated as shared national credits, and certain portfolios considered to be COVID-19 impacted • Changes in the composition of the loan portfolios • Loans downgraded to special mention, substandard, or non-accrual status The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded. Sensitivity in the Allowance for Credit Loss model The allowance for credit losses is an estimate that requires significant judgment including projections of the macro-economic environment. The forecasted macro-economic environment continuously changes which can cause fluctuations in estimated expected losses. The current forecast projects a continued recovery of the COVID-19 pandemic induced recession. This pandemic is unprecedented and information that could be used in the estimation of the allowance for credit losses changes frequently. Trends in health conditions and vaccine distribution could significantly modify economic projections used in the estimation of the allowance for credit losses. A summary of the activity in the allowance for credit losses on loans and the liability for unfunded lending commitments during the three months ended March 31, 2021 and 2020, respectively, follows: For the Three Months Ended March 31, 2021 (In thousands) Commercial Personal Banking Total ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at beginning of period $ 121,549 $ 99,285 $ 220,834 Provision for credit losses on loans (1,909) (8,446) (10,355) Deductions: Loans charged off 232 12,709 12,941 Less recoveries on loans 215 2,774 2,989 Net loan charge-offs 17 9,935 9,952 Balance March 31, 2021 $ 119,623 $ 80,904 $ 200,527 LIABILITY FOR UNFUNDED LENDING COMMITMENTS Balance at beginning of period $ 37,259 $ 1,048 $ 38,307 Provision for credit losses on unfunded lending commitments 4,254 (131) 4,123 Balance March 31, 2021 $ 41,513 $ 917 $ 42,430 ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 161,136 $ 81,821 $ 242,957 For the Three Months Ended March 31, 2020 (In thousands) Commercial Personal Banking Total ALLOWANCE FOR CREDIT LOSSES ON LOANS Balance at end of prior period $ 91,760 $ 68,922 $ 160,682 Adoption of ASU 2016-13 (29,711) 8,672 (21,039) Balance at beginning of period $ 62,049 $ 77,594 $ 139,643 Provision for credit losses on loans 21,108 21,760 42,868 Deductions: Loans charged off 416 13,976 14,392 Less recoveries on loans 810 2,724 3,534 Net loan charge-offs (recoveries) (394) 11,252 10,858 Balance March 31, 2020 $ 83,551 $ 88,102 $ 171,653 LIABILITY FOR UNFUNDED LENDING COMMITMENTS Balance at end of prior period $ 399 $ 676 $ 1,075 Adoption of ASU 2016-13 16,057 33 16,090 Balance at beginning of period $ 16,456 $ 709 $ 17,165 Provision for credit losses on unfunded lending commitments 14,605 480 15,085 Balance March 31, 2020 $ 31,061 $ 1,189 $ 32,250 ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LIABILITY FOR UNFUNDED LENDING COMMITMENTS $ 114,612 $ 89,291 $ 203,903 Delinquent and non-accrual loans The Company considers loans past due on the day following the contractual repayment date, if the contractual repayment was not received by the Company as of the end of the business day. The following table provides aging information on the Company’s past due and accruing loans, in addition to the balances of loans on non-accrual status, at March 31, 2021 and December 31, 2020. (In thousands) Current or Less Than 30 Days Past Due 30 – 89 Days Past Due 90 Days Past Due and Still Accruing Non-accrual Total March 31, 2021 Commercial: Business $ 6,601,246 $ 2,384 $ 364 $ 20,215 $ 6,624,209 Real estate – construction and land 1,069,805 3,231 — — 1,073,036 Real estate – business 3,013,518 2,146 6 1,572 3,017,242 Personal Banking: Real estate – personal 2,820,687 3,592 2,420 1,719 2,828,418 Consumer 1,940,997 15,439 10,397 — 1,966,833 Revolving home equity 282,967 1,567 727 — 285,261 Consumer credit card 581,216 5,019 7,598 — 593,833 Overdrafts 3,123 116 — — 3,239 Total $ 16,313,559 $ 33,494 $ 21,512 $ 23,506 $ 16,392,071 December 31, 2020 Commercial: Business $ 6,517,838 $ 2,252 $ 3,473 $ 22,524 $ 6,546,087 Real estate – construction and land 1,021,592 — 3 — 1,021,595 Real estate – business 3,016,215 7,666 6 2,230 3,026,117 Personal Banking: Real estate – personal 2,808,886 6,521 2,837 1,786 2,820,030 Consumer 1,921,822 25,417 3,263 — 1,950,502 Revolving home equity 305,037 1,656 390 — 307,083 Consumer credit card 635,770 7,090 12,218 — 655,078 Overdrafts 2,896 253 — — 3,149 Total $ 16,230,056 $ 50,855 $ 22,190 $ 26,540 $ 16,329,641 At March 31, 2021, the Company had $8.2 million and $908 thousand of non-accrual business and business real estate loans, respectively, that had no allowance for credit loss. At December 31, 2020, the Company had $9.4 million of non-accrual business loans that had no allowance for credit loss. The Company did not record any interest income on non-accrual loans during the three months ended March 31, 2021 and 2020, respectively. Credit quality indicators The following table provides information about the credit quality of the Commercial loan portfolio. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment based on borrower specific information including but not limited to current financial information, historical payment experience, industry information, collateral levels and collateral types. The “pass” category consists of a range of loan grades that reflect increasing, though still acceptable, risk. A loan is assigned the risk rating at origination and then monitored throughout the contractual term for possible risk rating changes. Movement of risk through the various grade levels in the “pass” category is monitored for early identification of credit deterioration. The “special mention” rating is applied to loans where the borrower exhibits negative financial trends due to borrower specific or systemic conditions that, if left uncorrected, threaten its capacity to meet its debt obligations. The borrower is believed to have sufficient financial flexibility to react to and resolve its negative financial situation. It is a transitional grade that is closely monitored for improvement or deterioration. The “substandard” rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non-accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment. All loans are analyzed for risk rating updates annually. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated Special Mention, Substandard or Non-accrual are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by a credit review department which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan. The risk category of loans in the Commercial portfolio as of March 31, 2021 and December 31, 2020 are as follows: Term Loans Amortized Cost Basis by Origination Year (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total March 31, 2021 Business Risk Rating: Pass $ 639,977 $ 2,123,717 $ 895,233 $ 387,726 $ 312,324 $ 382,995 $ 1,663,896 $ 6,405,868 Special mention 3,043 2,571 29,853 14,932 1,281 7,949 23,925 83,554 Substandard 2,609 11,282 17,824 4,676 2,142 13,489 62,550 114,572 Non-accrual 1,079 10,419 1 2,512 115 6,065 24 20,215 Total Business: $ 646,708 $ 2,147,989 $ 942,911 $ 409,846 $ 315,862 $ 410,498 $ 1,750,395 $ 6,624,209 Real estate-construction Risk Rating: Pass $ 73,104 $ 542,446 $ 244,604 $ 55,775 $ 2,807 $ 25,804 $ 26,432 $ 970,972 Special mention — 28,003 — 1,013 34,539 — — 63,555 Substandard 13,191 10,030 — 15,288 — — — 38,509 Total Real estate-construction: $ 86,295 $ 580,479 $ 244,604 $ 72,076 $ 37,346 $ 25,804 $ 26,432 $ 1,073,036 Real estate-business Risk Rating: Pass $ 167,100 $ 807,967 $ 676,478 $ 297,800 $ 224,394 $ 421,617 $ 64,817 $ 2,660,173 Special mention 136 33,108 10,493 24,124 5,942 6,706 74 80,583 Substandard 47,015 37,505 11,646 33,645 79,997 56,933 8,173 274,914 Non-accrual — 285 93 1,145 — 49 — 1,572 Total Real estate-business: $ 214,251 $ 878,865 $ 698,710 $ 356,714 $ 310,333 $ 485,305 $ 73,064 $ 3,017,242 Commercial loans Risk Rating: Pass $ 880,181 $ 3,474,130 $ 1,816,315 $ 741,301 $ 539,525 $ 830,416 $ 1,755,145 $ 10,037,013 Special mention 3,179 63,682 40,346 40,069 41,762 14,655 23,999 227,692 Substandard 62,815 58,817 29,470 53,609 82,139 70,422 70,723 427,995 Non-accrual 1,079 10,704 94 3,657 115 6,114 24 21,787 Total Commercial loans: $ 947,254 $ 3,607,333 $ 1,886,225 $ 838,636 $ 663,541 $ 921,607 $ 1,849,891 $ 10,714,487 Term Loans Amortized Cost Basis by Origination Year (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total December 31, 2020 Business Risk Rating: Pass $ 2,472,419 $ 966,068 $ 438,557 $ 329,207 $ 163,357 $ 281,604 $ 1,619,680 $ 6,270,892 Special mention 28,612 26,746 14,102 1,781 5,091 1,664 41,749 119,745 Substandard 17,246 21,985 5,076 2,675 3,578 13,390 68,976 132,926 Non-accrual 12,619 1 5,327 391 502 3,659 25 22,524 Total Business: $ 2,530,896 $ 1,014,800 $ 463,062 $ 334,054 $ 172,528 $ 300,317 $ 1,730,430 $ 6,546,087 Real estate-construction Risk Rating: Pass $ 483,302 $ 330,480 $ 56,747 $ 3,021 $ 24,426 $ 1,692 $ 27,356 $ 927,024 Special mention 29,692 — 1,022 34,532 — — — 65,246 Substandard 1,154 — 14,989 13,182 — — — 29,325 Total Real estate-construction: $ 514,148 $ 330,480 $ 72,758 $ 50,735 $ 24,426 $ 1,692 $ 27,356 $ 1,021,595 Real estate- business Risk Rating: Pass $ 890,740 $ 666,399 $ 336,850 $ 241,656 $ 313,691 $ 199,534 $ 67,796 $ 2,716,666 Special mention 8,936 21,734 49,580 6,597 17,504 1,309 3,002 108,662 Substandard 46,882 1,037 4,061 81,435 17,538 45,014 2,592 198,559 Non-accrual 478 188 1,480 — — 84 — 2,230 Total Real-estate business: $ 947,036 $ 689,358 $ 391,971 $ 329,688 $ 348,733 $ 245,941 $ 73,390 $ 3,026,117 Commercial loans Risk Rating: Pass $ 3,846,461 $ 1,962,947 $ 832,154 $ 573,884 $ 501,474 $ 482,830 $ 1,714,832 $ 9,914,582 Special mention 67,240 48,480 64,704 42,910 22,595 2,973 44,751 293,653 Substandard 65,282 23,022 24,126 97,292 21,116 58,404 71,568 360,810 Non-accrual 13,097 189 6,807 391 502 3,743 25 24,754 Total Commercial loans: $ 3,992,080 $ 2,034,638 $ 927,791 $ 714,477 $ 545,687 $ 547,950 $ 1,831,176 $ 10,593,799 The credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided as of March 31, 2021 and December 31, 2020 below: Term Loans Amortized Cost Basis by Origination Year (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total March 31, 2021 Real estate-personal Current to 90 days past due $ 219,663 $ 1,063,039 $ 443,537 $ 199,212 $ 186,744 $ 702,872 $ 9,212 $ 2,824,279 Over 90 days past due — 563 463 275 343 776 — 2,420 Non-accrual — 24 187 114 45 1,349 — 1,719 Total Real estate-personal: $ 219,663 $ 1,063,626 $ 444,187 $ 199,601 $ 187,132 $ 704,997 $ 9,212 $ 2,828,418 Consumer Current to 90 days past due $ 148,812 $ 489,710 $ 295,133 $ 136,567 $ 93,905 $ 134,996 $ 657,313 $ 1,956,436 Over 90 days past due — 113 136 306 85 376 9,381 10,397 Total Consumer: $ 148,812 $ 489,823 $ 295,269 $ 136,873 $ 93,990 $ 135,372 $ 666,694 $ 1,966,833 Revolving home equity Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 284,534 $ 284,534 Over 90 days past due — — — — — — 727 727 Total Revolving home equity: $ — $ — $ — $ — $ — $ — $ 285,261 $ 285,261 Consumer credit card Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 586,235 $ 586,235 Over 90 days past due — — — — — — 7,598 7,598 Total Consumer credit card: $ — $ — $ — $ — $ — $ — $ 593,833 $ 593,833 Overdrafts Current to 90 days past due $ 3,239 $ — $ — $ — $ — $ — $ — $ 3,239 Total Overdrafts: $ 3,239 $ — $ — $ — $ — $ — $ — $ 3,239 Personal banking loans Current to 90 days past due $ 371,714 $ 1,552,749 $ 738,670 $ 335,779 $ 280,649 $ 837,868 $ 1,537,294 $ 5,654,723 Over 90 days past due — 676 599 581 428 1,152 17,706 21,142 Non-accrual — 24 187 114 45 1,349 — 1,719 Total Personal banking loans: $ 371,714 $ 1,553,449 $ 739,456 $ 336,474 $ 281,122 $ 840,369 $ 1,555,000 $ 5,677,584 Term Loans Amortized Cost Basis by Origination Year (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total December 31, 2020 Real estate-personal Current to 90 days past due $ 1,123,918 $ 488,379 $ 218,390 $ 201,971 $ 227,265 $ 544,008 $ 11,476 $ 2,815,407 Over 90 days past due 534 375 281 411 388 848 — 2,837 Non-accrual 29 191 116 45 65 1,340 — 1,786 Total Real estate-personal: $ 1,124,481 $ 488,945 $ 218,787 $ 202,427 $ 227,718 $ 546,196 $ 11,476 $ 2,820,030 Consumer Current to 90 days past due $ 536,799 $ 337,431 $ 161,337 $ 115,886 $ 75,769 $ 86,831 $ 633,186 $ 1,947,239 Over 90 days past due 212 358 328 220 174 397 1,574 3,263 Total Consumer: $ 537,011 $ 337,789 $ 161,665 $ 116,106 $ 75,943 $ 87,228 $ 634,760 $ 1,950,502 Revolving home equity Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 306,693 $ 306,693 Over 90 days past due — — — — — — 390 390 Total Revolving home equity: $ — $ — $ — $ — $ — $ — $ 307,083 $ 307,083 Consumer credit card Current to 90 days past due $ — $ — $ — $ — $ — $ — $ 642,860 $ 642,860 Over 90 days past due — — — — — — 12,218 12,218 Total Consumer credit card: $ — $ — $ — $ — $ — $ — $ 655,078 $ 655,078 Overdrafts Current to 90 days past due $ 3,149 $ — $ — $ — $ — $ — $ — $ 3,149 Total Overdrafts: $ 3,149 $ — $ — $ — $ — $ — $ — $ 3,149 Personal banking loans Current to 90 days past due $ 1,663,866 $ 825,810 $ 379,727 $ 317,857 $ 303,034 $ 630,839 $ 1,594,215 $ 5,715,348 Over 90 days past due 746 733 609 631 562 1,245 14,182 18,708 Non-accrual 29 191 116 45 65 1,340 — 1,786 Total Personal banking loans: $ 1,664,641 $ 826,734 $ 380,452 $ 318,533 $ 303,661 $ 633,424 $ 1,608,397 $ 5,735,842 Collateral-dependent loans The Company's collateral-dependent loans are comprised of large loans on non-accrual status. The Company requires that collateral-dependent loans are either over-collateralized or carry collateral equal to the amortized cost of the loan. The following table presents the amortized cost basis of collateral-dependent loans as of March 31, 2021 and December 31, 2020. (In thousands) Business Assets Future Revenue Streams Oil & Gas Assets Total March 31, 2021 Commercial: Business $ — $ — $ 13,687 $ 13,687 Real estate - business — 908 — 908 Total $ — $ 908 $ 13,687 $ 14,595 December 31, 2020 Commercial: Business $ 13,109 $ — $ 2,695 $ 15,804 Real estate - business — 986 — 986 Total $ 13,109 $ 986 $ 2,695 $ 16,790 Other Personal Banking loan information As noted above, the credit quality of Personal Banking loans is monitored primarily on the basis of aging/delinquency, and this information is provided in the table in the above section on "Credit quality indicators." In addition, FICO scores are obtained and updated on a quarterly basis for most of the loans in the Personal Banking portfolio. This is a published credit score designed to measure the risk of default by taking into account various factors from a borrower's financial history and is considered supplementary information utilized by the Company, as management does not consider this information in evaluating the allowance for credit losses on loans. The Bank normally obtains a FICO score at the loan's origination and renewal dates, and updates are obtained on a quarterly basis. Excluded from the table below are certain personal real estate loans for which FICO scores are not obtained because the loans generally pertain to commercial customer activities and are often underwritten with other collateral considerations. These loans totaled $188.6 million at March 31, 2021 and $191.1 million at December 31, 2020. The table also excludes consumer loans related to the Company's patient healthcare loan program, which totaled $179.8 million at March 31, 2021 and $188.1 million at December 31, 2020. As the healthcare loans are guaranteed by the hospital, customer FICO scores are not obtained for these loans. The personal real estate loans and consumer loans excluded below totaled less than 7% of the Personal Banking portfolio. For the remainder of loans in the Personal Banking portfolio, the table below shows the percentage of balances outstanding at March 31, 2021 and December 31, 2020 by FICO score. Personal Banking Loans % of Loan Category Real Estate - Personal Consumer Revolving Home Equity Consumer Credit Card March 31, 2021 FICO score: Under 600 0.9 % 2.2 % 1.3 % 4.3 % 600 - 659 2.1 3.9 2.3 11.7 660 - 719 8.1 14.4 9.1 32.9 720 - 779 22.9 25.4 22.8 28.0 780 and over 66.0 54.1 64.5 23.1 Total 100.0 % 100.0 % 100.0 % 100.0 % December 31, 2020 FICO score: Under 600 0.8 % 2.3 % 1.3 % 5.0 % 600 - 659 1.9 4.2 2.4 12.3 660 - 719 8.8 14.1 8.6 31.2 720 - 779 24.5 23.9 22.2 28.0 780 and over 64.0 55.5 65.5 23.5 Total 100.0 % 100.0 % 100.0 % 100.0 % Troubled debt restructurings Restructured loans are those extended to borrowers who are experiencing financial difficulty and who have been granted a concession. Restructured loans are placed on non-accrual status if the Company does not believe it probable that amounts due under the contractual terms will be collected. Commercial performing restructured loans are primarily comprised of certain business, construction and business real estate loans classified as substandard but renewed at rates judged to be non-market. These loans are performing in accordance with their modified terms, and because the Company believes it probable that all amounts due under the modified terms of the agreements will be collected, interest on these loans is being recognized on an accrual basis. Troubled debt restructurings also include certain credit card and other small consumer loans under various debt management and assistance programs. Modifications to these loans generally involve removing the available line of credit, placing loans on amortizing status, and lowering the contractual interest rate. Certain personal real estate, revolving home equity, and consumer loans were classified as consumer bankruptcy troubled debt restructurings because they were not reaffirmed by the borrower in bankruptcy proceedings. Interest on these loans is being recognized on an accrual basis, as the borrowers are continuing to make payments. Other consumer loans classified as troubled debt restructurings consist of various other workout arrangements with consumer customers. (In thousands) March 31, 2021 December 31, 2020 Accruing restructured loans: Commercial $ 118,515 $ 117,740 Assistance programs 6,881 7,804 Consumer bankruptcy 2,716 2,841 Other consumer 2,301 2,353 Non-accrual loans 9,158 9,889 Total troubled debt restructurings $ 139,571 $ 140,627 Section 4013 of the CARES Act was signed into law on March 27, 2020, and includes a provision that short-term modifications are not troubled debt restructurings, if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to December 31, 2019. The Company follows the guidance under the CARES Act when determining if a customer’s modification is subject to troubled debt restructuring classification. If it is deemed the modification is not short-term, not COVID-19 related or the customer does not meet the criteria under the guidance to be scoped out of troubled debt restructuring classification, the Company will evaluate the loan modifications under its existing framework which requires modifications that result in a concession to a borrower experiencing financial difficulty be accounted for as a troubled debt restructuring. The initial guidance issued under the CARES Act was due to expire on December 31, 2020. During January 2021, the Consolidated Appropriations Act, 2021 was enacted and extended relief offered under the CARES Act related to the accounting and disclosure requirements for troubled debt restructurings as a result of COVID-19. The Company elected to adopt the extension of this guidance. The table below shows the balance of troubled debt restructurings by loan classification at March 31, 2021, in addition to the outstanding balances of these restructured loans which the Company considers to have been in default at any time during the past twelve months. For purposes of this disclosure, the Company considers "default" to mean 90 days or more past due as to interest or principal. (In thousands) March 31, 2021 Balance 90 days past due at any time during previous 12 months Commercial: Business $ 62,384 $ 630 Real estate - construction and land 10,107 — Real estate - business 54,024 908 Personal Banking: Real estate - personal 3,153 308 Consumer 3,176 213 Revolving home equity 27 — Consumer credit card 6,700 506 Total troubled debt restructurings $ 139,571 $ 2,565 For those loans on non-accrual status also classified as restructured, the modification did not create any further financial effect on the Company as those loans were already recorded at net realizable value. For those performing commercial loans classified as restructured, there were no concessions involving forgiveness of principal or interest and, therefore, there was no financial impact to the Company as a result of modification to these loans. No financial impact resulted from those performing loans where the debt was not reaffirmed in bankruptcy, as no changes to loan terms occurred in that process. However, the effects of modifications to loans under various debt management and assistance programs were estimated to decrease interest income by approximately $1.0 million on an annual, pre-tax basis, compared to amounts contractually owed. Other modifications to consumer loans mainly involve extensions and other small modifications that did not include the forgiveness of principal or interest. The allowance for credit losses related to troubled debt restructurings on non-accrual status is determined by individual evaluation, including collateral adequacy, using the same process as loans on non-accrual status which are not classified as troubled debt restructurings. Those performing loans classified as troubled debt restructurings are accruing loans which management expects to collect under contractual terms. Performing commercial loans having no other concessions granted other than being renewed at non-market interest rates are judged to have similar risk characteristics as non-troubled debt commercial loans and are collectively evaluated based on internal risk rating, loan type, delinquency, historical experience and current economic factors. Performing personal banking loans classified as troubled debt restructurings resulted from the borrower not reaffirming the debt during bankruptcy and have had no other concession granted, other than the Bank's future limitations on collecting payment deficiencies or in pursuing foreclosure actions. As such, they have similar risk characteristics as non-troubled debt personal banking loans and are evaluated collectively based on loan type, delinquency, historical experience and current economic factors. If a troubled debt restructuring defaults and is already on non-accrual status, the allowance for credit losses continues to be based on individual evaluation, using discounted expected cash flows or the fair value of collateral. If an accruing troubled debt restructuring defaults, the loan's risk rating is downgraded to non-accrual status and the loan's related allowance for credit losses is determined based on individual evaluation, or if necessary, the loan is charged off and collection efforts begin. The Company had commitments of $30.7 million at March 31, 2021 to lend additional funds to borrowers with restructured loans. Included in these commitments at March 31, 2021 are $27.7 million of letters of credit with borrowers with restructured loans. Loans held for sale The Company designates certain long-term fixed rate personal real estate loans as held for sale, and the Company has elected the fair value option for these loans. The election of the fair value option aligns the accounting for these loans with the related economic hedges discussed in Note 11. The loans are primarily sold to FNMA and FHLMC. At March 31, 2021, the fair value of these loans was $30.5 million, and the unpaid principal balance was $30.0 million The Company also designates certain student loan originations as held for sale. The borrowers are credit-worthy students who are attending colleges and universities. The loans are intended to be sold in the secondary market, and the Company maintains contracts with Sallie Mae to sell the loans within 210 days after the last disbursement to the student. These loans are carried at lower of cost or fair value, which at March 31, 2021 totaled $7.6 million. At March 31, |
