Loans | Loans The period end loan composition was as follows: ($ in Thousands) Mar 31, 2022 Dec 31, 2021 PPP $ 17,995 $ 66,070 Asset-based lending & equipment finance (a) 231,040 178,027 Commercial and industrial 8,102,380 8,208,289 Commercial real estate — owner occupied 973,572 971,326 Commercial and business lending 9,324,986 9,423,711 Commercial real estate — investor 4,469,241 4,384,569 Real estate construction 1,760,076 1,808,976 Commercial real estate lending 6,229,317 6,193,545 Total commercial 15,554,303 15,617,256 Residential mortgage 7,609,343 7,567,310 Auto finance 497,523 143,045 Home equity 580,867 595,615 Other consumer 289,889 301,723 Total consumer 8,977,622 8,607,693 Total loans $ 24,531,926 $ 24,224,949 (a) Periods prior to Mar 31, 2022 do not include equipment finance . Accrued interest receivable on loans totaled $58 million at March 31, 2022, and $55 million at December 31, 2021, and is included in interest receivable on the consolidated balance sheets. Interest accrued but not received for loans placed on nonaccrual is reversed against interest income. The amount of accrued interest reversed totaled approximately $95,000 and $98,000 for the three months ended March 31, 2022 and March 31, 2021, respectively. The following table presents commercial and consumer loans by credit quality indicator by vintage year at March 31, 2022: Term Loans Amortized Cost Basis by Origination Year (a) ($ in Thousands) Rev Loans Converted to Term (a) Rev Loans Amortized Cost Basis YTD 2022 2021 2020 2019 2018 Prior Total PPP: (b) Risk rating: Pass $ — $ — $ — $ 16,118 $ 1,782 $ — $ — $ — $ 17,900 Potential Problem — — — — 54 — — — 54 Nonaccrual — — — — 41 — — — 41 PPP $ — $ — $ — $ 16,118 $ 1,877 $ — $ — $ — $ 17,995 Asset-based lending & equipment finance: Risk rating: Pass $ — $ 27,624 $ 22,962 $ 116,851 $ 42,930 $ 1,243 $ 223 $ 150 $ 211,982 Potential Problem — 2,057 — — 17,000 — — — 19,057 Asset-based lending & equipment finance $ — $ 29,681 $ 22,962 $ 116,851 $ 59,930 $ 1,243 $ 223 $ 150 $ 231,040 Commercial and industrial: Risk rating: Pass $ — $ 2,113,051 $ 320,013 $ 2,622,986 $ 802,154 $ 905,744 $ 582,722 $ 602,568 $ 7,949,237 Special Mention — 11,619 — 5,900 3,226 — — 38,777 59,521 Potential Problem 37 3,793 17,540 1,369 3,540 45,200 20,584 1,372 93,396 Nonaccrual 71 — 71 — 154 — — — 225 Commercial and industrial $ 108 $ 2,128,462 $ 337,623 $ 2,630,255 $ 809,074 $ 950,944 $ 603,306 $ 642,716 $ 8,102,380 Commercial real estate - owner occupied: Risk rating: Pass $ — $ 19,947 $ 28,850 $ 273,534 $ 183,174 $ 181,284 $ 106,991 $ 154,061 $ 947,840 Special Mention — 247 — — 1,310 — — 169 1,726 Potential Problem — — 635 5,632 2,195 10,571 — 4,972 24,005 Commercial real estate - owner occupied $ — $ 20,194 $ 29,485 $ 279,166 $ 186,678 $ 191,855 $ 106,991 $ 159,202 $ 973,572 Commercial and business lending: Risk rating: Pass $ — $ 2,160,622 $ 371,825 $ 3,029,488 $ 1,030,039 $ 1,088,271 $ 689,936 $ 756,778 $ 9,126,959 Special Mention — 11,865 — 5,900 4,537 — — 38,946 61,248 Potential Problem 37 5,850 18,175 7,001 22,788 55,771 20,584 6,344 136,513 Nonaccrual 71 — 71 — 195 — — — 266 Commercial and business lending $ 108 $ 2,178,337 $ 390,071 $ 3,042,390 $ 1,057,559 $ 1,144,041 $ 710,520 $ 802,068 $ 9,324,986 Commercial real estate - investor: Risk rating: Pass $ — $ 90,319 $ 391,108 $ 1,616,587 $ 704,283 $ 713,819 $ 308,963 $ 318,092 $ 4,143,170 Special Mention — — 2,750 55,652 16,289 32,847 — 6,855 114,393 Potential Problem — — 21,291 21,155 28,694 25,722 28,804 5,125 130,792 Nonaccrual — — 573 65,404 7,906 7,003 — — 80,886 Commercial real estate - investor $ — $ 90,319 $ 415,721 $ 1,758,799 $ 757,172 $ 779,391 $ 337,767 $ 330,071 $ 4,469,241 Real estate construction: Risk rating: Pass $ — $ 27,848 $ 105,439 $ 867,680 $ 517,765 $ 152,883 $ 45,941 $ 12,395 $ 1,729,950 Special Mention — — — 934 11,929 16,454 — — 29,317 Potential Problem — — — 84 116 — — — 200 Nonaccrual — — — — — — — 609 609 Real estate construction $ — $ 27,848 $ 105,439 $ 868,698 $ 529,810 $ 169,337 $ 45,941 $ 13,004 $ 1,760,076 Term Loans Amortized Cost Basis by Origination Year (a) ($ in Thousands) Rev Loans Converted to Term (a) Rev Loans Amortized Cost Basis YTD 2022 2021 2020 2019 2018 Prior Total Commercial real estate lending: Risk rating: Pass $ — $ 118,167 $ 496,547 $ 2,484,267 $ 1,222,047 $ 866,702 $ 354,904 $ 330,487 $ 5,873,120 Special Mention — — 2,750 56,586 28,218 49,302 — 6,855 143,711 Potential Problem — — 21,291 21,239 28,810 25,722 28,804 5,125 130,992 Nonaccrual — — 573 65,404 7,906 7,003 — 609 81,495 Commercial real estate lending $ — $ 118,167 $ 521,160 $ 2,627,496 $ 1,286,982 $ 948,729 $ 383,708 $ 343,075 $ 6,229,317 Total commercial: Risk rating: Pass $ — $ 2,278,789 $ 868,372 $ 5,513,755 $ 2,252,087 $ 1,954,972 $ 1,044,840 $ 1,087,265 $ 15,000,080 Special Mention — 11,865 2,750 62,486 32,755 49,302 — 45,800 204,958 Potential Problem 37 5,850 39,466 28,241 51,598 81,493 49,388 11,469 267,505 Nonaccrual 71 — 644 65,404 8,101 7,003 — 609 81,761 Total commercial $ 108 $ 2,296,504 $ 911,231 $ 5,669,886 $ 2,344,541 $ 2,092,770 $ 1,094,228 $ 1,145,143 $ 15,554,303 Residential mortgage: Risk rating: Pass $ — $ — $ 247,943 $ 1,874,892 $ 1,859,312 $ 916,031 $ 407,380 $ 2,246,835 $ 7,552,394 Special Mention — — — — — — — 90 90 Potential Problem — — 276 468 288 578 280 1,142 3,032 Nonaccrual — — 979 2,160 3,102 3,955 6,946 36,684 53,827 Residential mortgage $ — $ — $ 249,198 $ 1,877,520 $ 1,862,703 $ 920,564 $ 414,606 $ 2,284,751 $ 7,609,343 Auto finance: Risk rating: Pass $ — $ — $ 357,813 $ 135,564 $ 578 $ 2,262 $ 921 $ 295 $ 497,432 Special Mention — — — 42 — — — 1 42 Nonaccrual — — — — — 35 14 — 49 Auto finance $ — $ — $ 357,813 $ 135,606 $ 578 $ 2,296 $ 934 $ 296 $ 497,523 Home equity: Risk rating: Pass $ 2,698 $ 486,976 $ 2,212 $ 2,245 $ 1,480 $ 6,900 $ 8,143 $ 64,691 $ 572,646 Special Mention 91 122 — — — 14 56 384 575 Potential Problem — — — — — — 10 146 156 Nonaccrual 171 55 — 9 119 145 328 6,834 7,490 Home equity $ 2,960 $ 487,152 $ 2,212 $ 2,254 $ 1,599 $ 7,058 $ 8,537 $ 72,054 $ 580,867 Other consumer: Risk rating: Pass $ 76 $ 174,209 $ 1,843 $ 9,113 $ 3,504 $ 2,109 $ 340 $ 98,217 $ 289,335 Special Mention 4 429 — 10 12 — — 8 459 Nonaccrual 1 49 — — 12 6 — 28 95 Other consumer $ 80 $ 174,687 $ 1,843 $ 9,123 $ 3,528 $ 2,115 $ 340 $ 98,253 $ 289,889 Total consumer: Risk rating: Pass $ 2,774 $ 661,185 $ 609,810 $ 2,021,815 $ 1,864,874 $ 927,302 $ 416,784 $ 2,410,038 $ 8,911,807 Special Mention 94 551 — 52 12 14 56 482 1,167 Potential Problem — — 276 468 288 578 290 1,288 3,188 Nonaccrual 171 103 979 2,169 3,234 4,141 7,288 43,546 61,460 Total consumer $ 3,040 $ 661,840 $ 611,065 $ 2,024,504 $ 1,868,408 $ 932,034 $ 424,418 $ 2,455,354 $ 8,977,622 Total loans: Risk rating: Pass (c) $ 2,774 $ 2,939,973 $ 1,478,182 $ 7,535,570 $ 4,116,960 $ 2,882,275 $ 1,461,624 $ 3,497,303 $ 23,911,887 Special Mention 94 12,417 2,750 62,538 32,767 49,315 56 46,283 206,125 Potential Problem 37 5,850 39,742 28,709 51,886 82,071 49,678 12,757 270,693 Nonaccrual 242 103 1,623 67,573 11,335 11,143 7,288 44,154 143,221 Total loans $ 3,148 $ 2,958,343 $ 1,522,296 $ 7,694,390 $ 4,212,949 $ 3,024,804 $ 1,518,646 $ 3,600,497 $ 24,531,926 (a) Revolving loans converted to term loans are also reported in their year of origination. (b) The Corporation’s policy is to assign risk ratings at the borrower level. PPP loans are 100% guaranteed by the SBA and therefore the Corporation considers these loans to have a risk profile similar to pass rated loans. (c) Accruing TDRs are included in pass unless otherwise rated as special mention. The following table presents commercial and consumer loans by credit quality indicator by vintage year at December 31, 2021: Term Loans Amortized Cost Basis by Origination Year (a) ($ in Thousands) Rev Loans Converted to Term (a) Rev Loans Amortized Cost Basis 2021 2020 2019 2018 2017 Prior Total PPP: (b) Risk rating: Pass $ — $ — $ 44,921 $ 18,610 $ — $ — $ — $ — $ 63,531 Special Mention — — 212 281 — — — — 493 Potential Problem — — 2,000 — — — — — 2,000 Nonaccrual — — — 46 — — — — 46 PPP $ — $ — $ 47,134 $ 18,936 $ — $ — $ — $ — $ 66,070 Commercial and industrial: (c) Risk rating: Pass $ 2,084 $ 2,371,605 $ 2,631,753 $ 852,758 $ 986,300 $ 710,491 $ 177,568 $ 493,876 $ 8,224,351 Special Mention — 7,068 5,900 1,695 — — — 2,811 17,474 Potential Problem 2,706 26,387 23,415 19,960 46,296 20,924 104 1,172 138,258 Nonaccrual 76 — 5,996 161 52 24 — — 6,233 Commercial and industrial $ 4,867 $ 2,405,059 $ 2,667,064 $ 874,575 $ 1,032,647 $ 731,439 $ 177,671 $ 497,860 $ 8,386,316 Commercial real estate - owner occupied: Risk rating: Pass $ 10,092 $ 30,869 $ 261,418 $ 178,424 $ 187,073 $ 110,169 $ 54,538 $ 117,011 $ 939,503 Special Mention — 226 — 4,628 — — — 245 5,100 Potential Problem — 526 5,953 4,721 10,047 727 2,204 2,546 26,723 Commercial real estate - owner occupied $ 10,092 $ 31,621 $ 267,371 $ 187,773 $ 197,120 $ 110,896 $ 56,742 $ 119,802 $ 971,326 Commercial and business lending: Risk rating: Pass $ 12,176 $ 2,402,474 $ 2,938,092 $ 1,049,792 $ 1,173,373 $ 820,660 $ 232,106 $ 610,887 $ 9,227,385 Special Mention — 7,294 6,112 6,604 — — — 3,056 23,066 Potential Problem 2,706 26,913 31,368 24,681 56,343 21,651 2,307 3,718 166,981 Nonaccrual 76 — 5,996 207 52 24 — — 6,279 Commercial and business lending $ 14,958 $ 2,436,680 $ 2,981,569 $ 1,081,284 $ 1,229,767 $ 842,335 $ 234,414 $ 617,662 $ 9,423,711 Commercial real estate - investor: Risk rating: Pass $ 37,430 $ 105,521 $ 1,650,936 $ 685,423 $ 867,606 $ 414,079 $ 139,320 $ 230,452 $ 4,093,337 Special Mention — — 57,163 27,384 33,016 72 — 6,781 124,416 Potential Problem — — 21,309 9,860 22,243 34,591 3,564 14,573 106,138 Nonaccrual — — 45,502 8,158 6,820 — — 197 60,677 Commercial real estate - investor $ 37,430 $ 105,521 $ 1,774,910 $ 730,825 $ 929,685 $ 448,741 $ 142,883 $ 252,003 $ 4,384,569 Real estate construction: Risk rating: Pass $ — $ 31,773 $ 843,664 $ 614,469 $ 204,337 $ 48,647 $ 2,229 $ 12,212 $ 1,757,331 Special Mention — — 2,203 11,929 — 15,885 41 2 30,060 Potential Problem — — 37 120 21,251 — — — 21,408 Nonaccrual — — — — — — — 177 177 Real estate construction $ — $ 31,773 $ 845,903 $ 626,518 $ 225,588 $ 64,532 $ 2,270 $ 12,392 $ 1,808,976 Commercial real estate lending: Risk rating: Pass $ 37,430 $ 137,294 $ 2,494,600 $ 1,299,893 $ 1,071,943 $ 462,726 $ 141,549 $ 242,664 $ 5,850,668 Special Mention — — 59,366 39,313 33,016 15,957 41 6,784 154,476 Potential Problem — — 21,345 9,980 43,494 34,591 3,564 14,573 127,546 Nonaccrual — — 45,502 8,158 6,820 — — 374 60,855 Commercial real estate lending $ 37,430 $ 137,294 $ 2,620,814 $ 1,357,343 $ 1,155,273 $ 513,273 $ 145,153 $ 264,395 $ 6,193,545 Term Loans Amortized Cost Basis by Origination Year (a) ($ in Thousands) Rev Loans Converted to Term (a) Rev Loans Amortized Cost Basis 2021 2020 2019 2018 2017 Prior Total Total commercial: Risk rating: Pass $ 49,606 $ 2,539,768 $ 5,432,693 $ 2,349,685 $ 2,245,316 $ 1,283,386 $ 373,655 $ 853,551 $ 15,078,053 Special Mention — 7,294 65,478 45,917 33,016 15,957 41 9,840 177,543 Potential Problem 2,706 26,913 52,713 34,660 99,837 56,241 5,871 18,291 294,527 Nonaccrual 76 — 51,498 8,365 6,872 24 — 374 67,134 Total commercial $ 52,388 $ 2,573,974 $ 5,602,382 $ 2,438,627 $ 2,385,040 $ 1,355,608 $ 379,567 $ 882,057 $ 15,617,256 Residential mortgage: Risk rating: Pass $ — $ — $ 1,771,447 $ 1,945,029 $ 974,188 $ 428,459 $ 673,447 $ 1,716,419 $ 7,508,989 Special Mention — — — — — 285 — 461 746 Potential Problem — — 475 332 404 265 81 658 2,214 Nonaccrual — — 1,993 2,911 4,479 6,224 6,019 33,734 55,362 Residential mortgage $ — $ — $ 1,773,915 $ 1,948,272 $ 979,071 $ 435,233 $ 679,547 $ 1,751,272 $ 7,567,310 Auto finance: Risk rating: Pass $ — $ — $ 137,952 $ 707 $ 2,675 $ 1,200 $ 352 $ 107 $ 142,993 Nonaccrual — — — — 36 15 — — 52 Auto finance $ — $ — $ 137,952 $ 707 $ 2,711 $ 1,216 $ 352 $ 107 $ 143,045 Home equity: Risk rating: Pass $ 6,728 $ 498,970 $ 1,216 $ 1,401 $ 7,640 $ 8,742 $ 7,660 $ 61,251 $ 586,880 Special Mention 133 100 — 102 4 — — 638 844 Potential Problem 6 — 6 — — 13 — 146 165 Nonaccrual 925 35 9 92 211 305 302 6,772 7,726 Home equity $ 7,792 $ 499,104 $ 1,232 $ 1,595 $ 7,856 $ 9,059 $ 7,962 $ 68,807 $ 595,615 Other consumer: Risk rating: Pass $ 443 $ 180,312 $ 9,297 $ 4,987 $ 2,884 $ 371 $ 265 $ 103,075 $ 301,191 Special Mention 7 351 — 4 — — — 7 363 Nonaccrual 6 120 — 14 7 — 19 11 170 Other consumer $ 456 $ 180,783 $ 9,297 $ 5,005 $ 2,890 $ 371 $ 284 $ 103,093 $ 301,723 Total consumer: Risk rating: Pass $ 7,171 $ 679,353 $ 1,919,912 $ 1,952,124 $ 987,387 $ 438,771 $ 681,725 $ 1,880,781 $ 8,540,053 Special Mention 140 451 — 106 4 285 — 1,106 1,952 Potential Problem 6 — 481 332 404 277 81 804 2,379 Nonaccrual 931 154 2,003 3,017 4,733 6,545 6,340 40,517 63,309 Total consumer $ 8,248 $ 679,959 $ 1,922,396 $ 1,955,579 $ 992,528 $ 445,878 $ 688,145 $ 1,923,208 $ 8,607,693 Total loans: Risk rating: Pass (d) $ 56,777 $ 3,219,121 $ 7,352,605 $ 4,301,809 $ 3,232,703 $ 1,722,157 $ 1,055,380 $ 2,734,332 $ 23,618,106 Special Mention 140 7,745 65,478 46,023 33,021 16,241 41 10,946 179,495 Potential Problem 2,713 26,913 53,194 34,992 100,240 56,519 5,952 19,095 296,905 Nonaccrual 1,006 154 53,501 11,382 11,605 6,569 6,340 40,891 130,443 Total loans $ 60,636 $ 3,253,933 $ 7,524,778 $ 4,394,206 $ 3,377,569 $ 1,801,486 $ 1,067,713 $ 2,805,265 $ 24,224,949 (a) Revolving loans converted to term loans are also reported in their year of origination. (b) The Corporation’s policy is to assign risk ratings at the borrower level. PPP loans are 100% guaranteed by the SBA and therefore the Corporation considers these loans to have a risk profile similar to pass rated loans. (c) Includes asset-based lending & equipment finance. (d) Accruing TDRs are included in pass unless otherwise rated as special mention. Factors that are important to managing overall credit quality are sound loan underwriting and administration, systematic monitoring of existing loans and commitments, effective loan review on an ongoing basis, early identification of potential problems, and appropriate policies for ACLL, nonaccrual loans, and charge offs. For commercial loans, management has determined the pass credit quality indicator to include credits exhibiting acceptable financial statements, cash flow, and leverage. If any risk exists, it is mitigated by the loan structure, collateral, monitoring, or control. For consumer loans, performing loans include credits performing in accordance with the original contractual terms. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Special mention credits have potential weaknesses that warrant specific attention from management. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credit. Potential problem loans are considered inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged. These loans generally have a well-defined weakness, or weaknesses, which may jeopardize liquidation of the debt, and are characterized by the distinct possibility the Corporation will sustain some loss if the deficiencies are not corrected. Management has determined commercial loan relationships in nonaccrual status, and commercial and consumer loan relationships with their terms restructured in a TDR, meet the criteria to be individually evaluated. Commercial loans classified as special mention, potential problem, and nonaccrual are reviewed at a minimum on a quarterly basis, while pass credits, which are performing rated credits, are generally reviewed on an annual basis or more frequently if the loan renewal is less than one year or if otherwise warranted. The following table presents loans by past due status at March 31, 2022: Accruing ($ in Thousands) Current 30-59 Days 60-89 Days 90+ Days Nonaccrual (a)(b) Total PPP $ 17,953 $ — $ 1 $ — $ 41 $ 17,995 Asset-based lending & equipment finance 231,040 — — — — 231,040 Commercial and industrial 8,100,945 923 162 125 225 8,102,380 Commercial real estate - owner occupied 973,374 198 — — — 973,572 Commercial and business lending 9,323,311 1,121 163 125 266 9,324,986 Commercial real estate - investor 4,388,355 — — — 80,886 4,469,241 Real estate construction 1,759,467 — — — 609 1,760,076 Commercial real estate lending 6,147,823 — — — 81,495 6,229,317 Total commercial 15,471,134 1,121 163 125 81,761 15,554,303 Residential mortgage 7,550,015 4,867 90 544 53,827 7,609,343 Auto finance 496,526 906 42 — 49 497,523 Home equity 569,170 3,632 575 — 7,490 580,867 Other consumer 287,636 707 525 926 95 289,889 Total consumer 8,903,347 10,112 1,232 1,470 61,460 8,977,622 Total loans $ 24,374,481 $ 11,233 $ 1,396 $ 1,595 $ 143,221 $ 24,531,926 (a) Of the total nonaccrual loans, $98 million, or 69%, were current with respect to payment at March 31, 2022. (b) No interest income was recognized on nonaccrual loans for the three months ended March 31, 2022. In addition, there were $24 million of nonaccrual loans for which there was no related ACLL at March 31, 2022. The following table presents loans by past due status at December 31, 2021: Accruing ($ in Thousands) Current 30-59 Days 60-89 Days 90+ Days Nonaccrual (a)(b) Total PPP $ 65,941 $ 40 $ 43 $ — $ 46 $ 66,070 Asset-based lending 178,027 — — — — 178,027 Commercial and industrial (c) 8,201,272 579 54 151 6,233 8,208,289 Commercial real estate - owner occupied 971,163 163 — — — 971,326 Commercial and business lending 9,416,403 781 97 151 6,279 9,423,711 Commercial real estate - investor 4,323,276 142 474 — 60,677 4,384,569 Real estate construction 1,807,178 1,618 2 — 177 1,808,976 Commercial real estate lending 6,130,454 1,759 477 — 60,855 6,193,545 Total commercial 15,546,857 2,541 573 151 67,134 15,617,256 Residential mortgage 7,505,654 5,500 669 126 55,362 7,567,310 Auto finance 142,982 11 — — 52 143,045 Home equity 584,177 2,867 844 — 7,726 595,615 Other consumer 298,261 1,835 472 986 170 301,723 Total consumer 8,531,074 10,213 1,985 1,111 63,309 8,607,693 Total loans $ 24,077,931 $ 12,754 $ 2,558 $ 1,263 $ 130,443 $ 24,224,949 (a) Of the total nonaccrual loans, $84 million, or 65%, were current with respect to payment at December 31, 2021. (b) No interest income was recognized on nonaccrual loans for the year ended December 31, 2021. In addition, there were $9 million of nonaccrual loans for which there was no related ACLL at December 31, 2021. (c) Includes equipment finance. Troubled Debt Restructurings Loans are considered restructured loans if concessions have been granted to borrowers that are experiencing financial difficulty. The following table presents nonaccrual and performing restructured loans by loan portfolio: Mar 31, 2022 Dec 31, 2021 ($ in Thousands) Performing Nonaccrual Restructured Loans (a) Performing Nonaccrual Restructured Loans (a) Commercial and industrial $ 7,426 $ — $ 8,687 $ — Commercial real estate — owner occupied 473 — 967 — Commercial real estate — investor 2,045 3,042 12,866 3,093 Real estate construction 183 44 242 45 Residential mortgage 16,644 15,336 16,316 13,483 Home equity 2,486 931 2,648 806 Other consumer 747 — 803 — Total restructured loans $ 30,003 $ 19,352 $ 42,530 $ 17,426 (a) Nonaccrual restructured loans have been included within nonaccrual loans. The Corporation had a recorded investment of $7 million in loans modified as TDRs during the three months ended March 31, 2022, of which $1 million were in accrual status, included in pass or special mention based on their risk rating within the credit quality tables, and $6 million were in nonaccrual within the credit quality tables, pending a sustained period of repayment. The following table provides the number of loans modified in a TDR by loan portfolio, the recorded investment, and unpaid principal balance for the three months ended March 31, 2022 and 2021: Three months ended Mar 31, 2022 Three months ended Mar 31, 2021 ($ in Thousands) Number Recorded Investment (a) Unpaid Principal Balance (b) Number Recorded Investment (a) Unpaid Principal Balance (b) Commercial real estate — investor — $ — $ — 4 $ 1,693 $ 1,693 Residential mortgage 24 6,421 6,502 20 3,876 3,902 Home equity 3 80 101 1 430 430 Total loans modified 27 $ 6,500 $ 6,603 25 $ 5,999 $ 6,025 (a) Represents post-modification outstanding recorded investment. Restructured loan modifications may include payment schedule modifications, interest rate concessions, maturity date extensions, modification of note structure (A/B Note), non-reaffirmed Chapter 7 bankruptcies, principal reduction, or some combination of these concessions. During the three months ended March 31, 2022, there were no restructured loan modifications of commercial loans, but when such modifications do occur, they primarily include maturity date extensions and payment schedule modifications. Restructured loan modifications of consumer loans primarily included maturity date extensions, interest rate concessions, non-reaffirmed Chapter 7 bankruptcies, or a combination of these concessions for the three months ended March 31, 2022. The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the three months ended March 31, 2022 and 2021, and the recorded investment in these restructured loans as of March 31, 2022 and 2021: Three months ended Mar 31, 2022 Three months ended Mar 31, 2021 ($ in Thousands) Number of Recorded Number of Recorded Residential mortgage 1 $ 884 1 $ 97 All loans modified in a TDR are individually evaluated for impairment. The nature and extent of the impairment of restructured loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the ACLL. The Corporation analyzes loans for classification as a probable TDR. This analysis includes identifying customers that are showing possible liquidity issues in the near term without reasonable access to alternative sources of capital. At March 31, 2022, the Corporation had no loans meeting this classification compared to $7 million at December 31, 2021. Allowance for Credit Losses on Loans The ACLL is comprised of the allowance for loan losses and the allowance for unfunded commitments. The level of the ACLL represents management’s estimate of an amount appropriate to provide for expected lifetime credit losses in the loan portfolio at the balance sheet date. The expected lifetime credit losses are the product of multiplying the Corporation's estimates of probability of default, loss given default, and the individual loan level exposure at default on an undiscounted basis. A main factor in the determination of the ACLL is the economic forecast. The Corporation utilized Moody's baseline forecast, updated during February 2022, in the allowance model. The forecast is applied over a 2 year reasonable and supportable period with straight-line reversion to the historical losses over the second year of the period. The allowance for unfunded commitments is maintained at a level believed by management to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit). See Note 12 for additional information on the change in the allowance for unfunded commitments. The following table presents a summary of the changes in the ACLL by portfolio segment for the three months ended March 31, 2022: ($ in Thousands) Dec 31, 2021 Charge offs Recoveries Net Charge offs Provision for credit losses Mar 31, 2022 ACLL / Loans Allowance for loan losses PPP $ 51 $ — $ — $ — $ (39) $ 11 Asset-based lending & equipment finance 4,182 — — — 901 5,083 Commercial and industrial 85,624 (1,104) 2,958 1,854 (5,485) 81,993 Commercial real estate — owner occupied 11,473 — 3 3 (349) 11,127 Commercial and business lending 101,330 (1,104) 2,961 1,857 (4,973) 98,214 Commercial real estate — investor 72,803 — — — 558 73,361 Real estate construction 37,643 — 32 32 2,082 39,757 Commercial real estate lending 110,446 — 32 32 2,640 113,118 Total commercial 211,776 (1,104) 2,993 1,889 (2,333) 211,332 Residential mortgage 40,787 (43) 331 288 (3,974) 37,101 Auto finance 1,999 (23) 26 4 4,188 6,190 Home equity 14,011 (125) 440 315 (995) 13,331 Other consumer 11,441 (733) 282 (451) 114 11,104 Total consumer 68,239 (924) 1,079 155 (667) 67,727 Total loans $ 280,015 $ (2,028) $ 4,072 $ 2,044 $ (3,000) $ 279,058 Allowance for unfunded commitments Asset-based lending & equipment finance $ 857 $ — $ — $ — $ (62) $ 796 Commercial and industrial 17,601 — — — (2,694) 14,907 Commercial real estate — owner occupied 208 — — — (64) 144 Commercial and business lending 18,667 — — — (2,820) 15,847 Commercial real estate — investor 936 — — — (302) 634 Real estate construction 15,586 — — — 2,415 18,001 Commercial real estate lending 16,522 — — — 2,114 18,636 Total commercial 35,189 — — — (707) 34,482 Home equity 2,592 — — — (68) 2,523 Other consumer 1,995 — — — (225) 1,770 Total consumer 4,587 — — — (293) 4,293 Total loans $ 39,776 $ — $ — $ — $ (1,000) $ 38,776 Allowance for credit losses on loans PPP $ 51 $ — $ — $ — $ (39) $ 11 0.06 % Asset-based lending & equipment finance 5,040 — — — 839 5,879 2.54 % Commercial and industrial 103,225 (1,104) 2,958 1,854 (8,179) 96,900 1.20 % Commercial real estate — owner occupied 11,681 — 3 3 (413) 11,270 1.16 % Commercial and business lending 119,997 (1,104) 2,961 1,857 (7,793) 114,061 1.22 % Commercial real estate — investor 73,739 — — — 256 73,995 1.66 % Real estate construction 53,229 — 32 32 4,497 57,758 3.28 % Commercial real estate lending 126,968 — 32 32 4,754 131,754 2.12 % Total commercial 246,965 (1,104) 2,993 1,889 (3,039) 245,814 1.58 % Residential mortgage 40,787 (43) 331 288 (3,974) 37,101 0.49 % Auto finance 1,999 (23) 26 4 4,188 6,190 1.24 % Home equity 16,603 (125) 440 315 (1,063) 15,855 2.73 % Other consumer 13,436 (733) 282 (451) (111) 12,874 4.44 % Total consumer 72,825 (924) 1,079 155 (961) 72,020 0.80 % Total loans $ 319,791 $ (2,028) $ 4,072 $ 2,044 $ (4,000) $ 317,835 1.30 % The following table presents a summary of the changes in the ACLL by portfolio segment for the year ended December 31, 2021: ($ in Thousands) Dec 31, 2020 Charge offs Recoveries Net Charge offs Provision for credit losses Dec 31, 2021 ACLL / Loans Allowance for loan losses PPP $ 531 $ — $ — $ — $ (480) $ 51 Asset-based lending 2,077 — 412 412 1,693 4,182 Commercial and industrial (a) 140,716 (21,564) 8,152 (13,412) (41,680) 85,624 Commercial real estate — owner occupied 11,274 — 120 120 80 11,473 Commercial and business lending 154,598 (21,564) 8,684 (12,880) (40,388) 101,330 Commercial real estate — investor 93,435 (14,346) 3,162 (11,184) (9,448) 72,803 Real estate construction 59,193 (5) 126 121 (21,672) 37,643 Commercial real estate lending 152,629 (14,351) 3,288 (11,063) (31,120) 110,446 Total commercial 307,226 (35,915) 11,972 (23,943) (71,508) 211,776 Residential mortgage 42,996 (880) 841 (38) (2,170) 40,787 Auto finance 174 (22) 31 9 1,816 1,999 Home equity 18,849 (668) 2,854 2,186 (7,024) 14,011 Other consumer 14,456 (3,168) 1,267 (1,901) (1,113) 11,441 Total consumer 76,475 (4,738) 4,993 256 (8,492) 68,239 Total loans $ 383,702 $ (40,652) $ 16,965 $ (23,687) $ (80,000) $ 280,015 Allowance for unfunded commitments Asset-based lending $ 901 $ — $ — $ — $ (43) $ 857 Commercial and industrial (a) 21,411 — — — (3,809) 17,601 Commercial real estate — owner occupied 266 — — — (58) 208 Commercial and business lending 22,577 — — — (3,911) 18,667 Commercial real estate — investor 636 — — — 300 936 Real estate construction 18,887 — — — (3,301) 15,586 Commercial real estate lending 19,523 — — — (3,001) 16,522 Total commercial 42,101 — — — (6,912) 35,189 Home equity 3,118 — — — (526) 2,592 Other consumer 2,557 — — — (563) 1,995 Total consumer 5,675 — — — (1,088) 4,587 Total loans $ 47,776 $ — $ — $ — $ (8,000) $ 39,776 Allowance for credit losses on loans PPP $ 531 $ — $ — $ — $ (480) $ 51 0.08 % Asset-based lending 2,978 — 412 412 1,649 5,040 2.83 % Commercial and industrial (a) 162,126 (21,564) 8,152 (13,412) (45,490) 103,225 1.26 % Commercial real estate — owner occupied 11,539 — 120 120 22 11,681 1.20 % Commercial and business lending 177,175 (21,564) 8,684 (12,880) (44,299) 119,997 1.27 % Commercial real estate — investor 94,071 (14,346) 3,162 (11,184) (9,148) 73,739 1.68 % Real estate construction 78,080 (5) 126 121 (24,972) 53,229 2.94 % Commercial real estate lending 172,152 (14,351) 3,288 (11,063) (34,121) 126,968 2.05 % Total commercial 349,327 (35,915) 11,972 (23,943) (78,419) 246,965 1.58 % Residential mortgage 42,996 (880) 841 (38) (2,170) 40,787 0.54 % Auto finance 174 (22) 31 9 1,816 1,999 1.40 % Home equity 21,967 (668) 2,854 2,186 (7,550) 16,603 2.79 % Other consumer 17,013 (3,168) 1,267 (1,901) (1,676) 13,436 4.45 % Total consumer 82,150 (4,738) 4,993 256 (9,581) 72,825 0.85 % Total loans $ 431,478 $ (40,652) $ 16,965 $ (23,687) $ (88,000) $ 319,791 1.32 % |