Loans and Leases | Loans and Leases The following table summarizes loans and leases by portfolio segment and class: (In thousands) At March 31, At December 31, 2022 Commercial non-mortgage $ 16,939,373 $ 16,392,795 Asset-based 1,760,527 1,821,642 Commercial real estate 13,499,139 12,997,163 Multi-family 7,014,599 6,621,982 Equipment financing 1,601,109 1,628,393 Warehouse lending 474,328 641,976 Commercial portfolio 41,289,075 40,103,951 Residential 8,001,563 7,963,420 Home equity 1,580,569 1,633,107 Other consumer 55,316 63,948 Consumer portfolio 9,637,448 9,660,475 Loans and leases $ 50,926,523 $ 49,764,426 The carrying amount of loans and leases at March 31, 2023, and December 31, 2022, includes net unamortized Non-Accrual and Past Due Loans and Leases The following tables summarize the aging of accrual and non-accrual loans and leases by class: At March 31, 2023 (In thousands) 30-59 Days 60-89 Days 90 or More Days Past Due Non-accrual Total Past Due and Non-accrual Current Total Loans Commercial non-mortgage $ 6,916 $ 162 $ 215 $ 69,129 $ 76,422 $ 16,862,951 $ 16,939,373 Asset-based — — — 9,428 9,428 1,751,099 1,760,527 Commercial real estate 15,171 — 175 33,966 49,312 13,449,827 13,499,139 Multi-family 1,929 — — — 1,929 7,012,670 7,014,599 Equipment financing 2,472 105 — 13,018 15,595 1,585,514 1,601,109 Warehouse lending — — — — — 474,328 474,328 Commercial portfolio 26,488 267 390 125,541 152,686 41,136,389 41,289,075 Residential 7,112 3,347 — 25,291 35,750 7,965,813 8,001,563 Home equity 3,977 1,649 — 28,873 34,499 1,546,070 1,580,569 Other consumer 415 104 213 106 838 54,478 55,316 Consumer portfolio 11,504 5,100 213 54,270 71,087 9,566,361 9,637,448 Total $ 37,992 $ 5,367 $ 603 $ 179,811 $ 223,773 $ 50,702,750 $ 50,926,523 At December 31, 2022 (In thousands) 30-59 Days 60-89 Days 90 or More Days Past Due Non-accrual Total Past Due and Non-accrual Current Total Loans Commercial non-mortgage $ 8,434 $ 821 $ 645 $ 71,884 $ 81,784 $ 16,311,011 $ 16,392,795 Asset-based 5,921 — — 20,024 25,945 1,795,697 1,821,642 Commercial real estate 1,494 23,492 68 39,057 64,111 12,933,052 12,997,163 Multi-family 1,157 — — 636 1,793 6,620,189 6,621,982 Equipment financing 806 9,988 — 12,344 23,138 1,605,255 1,628,393 Warehouse lending — — — — — 641,976 641,976 Commercial portfolio 17,812 34,301 713 143,945 196,771 39,907,180 40,103,951 Residential 8,246 3,083 — 25,424 36,753 7,926,667 7,963,420 Home equity 5,293 2,820 — 27,924 36,037 1,597,070 1,633,107 Other consumer 1,028 85 13 148 1,274 62,674 63,948 Consumer portfolio 14,567 5,988 13 53,496 74,064 9,586,411 9,660,475 Total $ 32,379 $ 40,289 $ 726 $ 197,441 $ 270,835 $ 49,493,591 $ 49,764,426 The following table provides additional information on non-accrual loans and leases: At March 31, 2023 At December 31, 2022 (In thousands) Non-accrual Non-accrual with No Allowance Non-accrual Non-accrual with No Allowance Commercial non-mortgage $ 69,129 $ 12,382 $ 71,884 $ 12,598 Asset-based 9,428 1,330 20,024 1,491 Commercial real estate 33,966 1,502 39,057 90 Multi-family — — 636 — Equipment financing 13,018 1,895 12,344 2,240 Commercial portfolio 125,541 17,109 143,945 16,419 Residential 25,291 10,674 25,424 10,442 Home equity 28,873 15,114 27,924 15,193 Other consumer 106 4 148 5 Consumer portfolio 54,270 25,792 53,496 25,640 Total $ 179,811 $ 42,901 $ 197,441 $ 42,059 Interest on non-accrual loans and leases that would have been recognized as additional interest income had the loans and leases been current in accordance with their original terms totaled $6.1 million and $4.4 million for the three months ended Allowance for Credit Losses on Loans and Leases The following table summarizes the change in the ACL on loans and leases by portfolio segment: At or for the three months ended March 31, 2023 2022 (In thousands) Commercial Portfolio Consumer Portfolio Total Commercial Portfolio Consumer Portfolio Total ACL on loans and leases: Balance, beginning of period $ 533,125 $ 61,616 $ 594,741 $ 257,877 $ 43,310 $ 301,187 Adoption of ASU No. 2022-02 7,704 (1,831) 5,873 — — — Initial allowance for PCD loans and leases (1) — — — 78,376 9,669 88,045 Provision (benefit) 38,757 (936) 37,821 184,327 4,741 189,068 Charge-offs (26,410) (1,098) (27,508) (11,248) (1,120) (12,368) Recoveries 1,574 1,413 2,987 1,364 2,075 3,439 Balance, end of period $ 554,750 $ 59,164 $ 613,914 $ 510,696 $ 58,675 $ 569,371 Individually evaluated for credit losses 27,459 8,590 36,049 32,736 12,057 44,793 Collectively evaluated for credit losses $ 527,291 $ 50,574 $ 577,865 $ 477,960 $ 46,618 $ 524,578 (1) Represents the establishment of the initial reserve for PCD loans and leases, which is reported net of $48.3 million of day one charge-offs recognized at the date of acquisition in accordance with GAAP. Credit Quality Indicators To measure credit risk for the commercial portfolio, the Company employs a dual grade credit risk grading system for estimating the PD and LGD. The credit risk grade system assigns a rating to each borrower and to the facility, which together form a Composite Credit Risk Profile. The credit risk grade system categorizes borrowers by common financial characteristics that measure the credit strength of borrowers and facilities by common structural characteristics. The Composite Credit Risk Profile has ten grades, with each grade corresponding to a progressively greater risk of loss. Grades (1) to (6) are considered pass ratings, and grades (7) to (10) are considered criticized, as defined by the regulatory agencies. A (7) "Special Mention" rating has a potential weakness that, if left uncorrected, may result in deterioration of the repayment prospects for the asset. A (8) "Substandard" rating has a well-defined weakness that jeopardizes the full repayment of the debt. A (9) "Doubtful" rating has all of the same weaknesses as a substandard asset with the added characteristic that the weakness makes collection or liquidation in full given current facts, conditions, and values improbable. Assets classified as a (10) "Loss" rating are considered uncollectible and are charged-off. Risk ratings, which are assigned to differentiate risk within the portfolio, are reviewed on an ongoing basis and revised to reflect changes in a borrower's current financial position and outlook, risk profile, and the related collateral and structural position. Loan officers review updated financial information or other loan factors on at least an annual basis for all pass rated loans to assess the accuracy of the risk grade. Criticized loans undergo more frequent reviews and enhanced monitoring. To measure credit risk for the consumer portfolio, the most relevant credit characteristic is the FICO score, which is a widely used credit scoring system that ranges from 300 to 850. A lower FICO score is indicative of higher credit risk and a higher FICO score is indicative of lower credit risk. FICO scores are updated on at least a quarterly basis. The following tables summarize the amortized cost basis of commercial loans and leases by Composite Credit Risk Profile grade and origination year: At March 31, 2023 (In thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total Commercial non-mortgage: Risk rating: Pass $ 867,446 $ 5,084,158 $ 1,781,158 $ 864,566 $ 708,271 $ 1,156,948 $ 5,992,440 $ 16,454,987 Special mention 25,083 62,638 24,644 12,727 15,640 8,631 30,522 179,885 Substandard 22,393 59,838 15,155 46,558 35,660 56,930 67,967 304,501 Total commercial non-mortgage 914,922 5,206,634 1,820,957 923,851 759,571 1,222,509 6,090,929 16,939,373 Current period gross write-offs 324 103 101 395 169 2,105 — 3,197 Asset-based: Risk rating: Pass 2,000 21,486 — 8,868 10,585 51,172 1,514,179 1,608,290 Special mention — — — — — 495 66,053 66,548 Substandard — — — — 1,330 — 84,359 85,689 Total asset-based 2,000 21,486 — 8,868 11,915 51,667 1,664,591 1,760,527 Current period gross write-offs — — — — 13,189 — — 13,189 Commercial real estate: Risk rating: Pass 921,252 3,438,768 1,999,831 1,481,136 1,547,577 3,591,701 139,886 13,120,151 Special mention 4,225 22,788 43,548 42,519 51,379 74,390 4,499 243,348 Substandard — 515 2,453 212 31,137 101,323 — 135,640 Total commercial real estate 925,477 3,462,071 2,045,832 1,523,867 1,630,093 3,767,414 144,385 13,499,139 Current period gross write-offs — — — — — 8,950 — 8,950 Multi-family: Risk rating: Pass 508,429 1,930,324 1,051,536 449,185 666,060 2,189,520 93,523 6,888,577 Special mention — 37,686 — 13,243 370 40,800 8,402 100,501 Substandard — — — 377 — 25,144 — 25,521 Total multi-family 508,429 1,968,010 1,051,536 462,805 666,430 2,255,464 101,925 7,014,599 Current period gross write-offs — — — — — 1,033 — 1,033 Equipment financing: Risk rating: Pass 132,662 367,476 316,521 295,379 277,878 145,561 — 1,535,477 Special mention — — 170 — 11,583 6,540 — 18,293 Substandard — 3,183 14,918 12,013 4,527 12,698 — 47,339 Total equipment financing 132,662 370,659 331,609 307,392 293,988 164,799 — 1,601,109 Current period gross write-offs — — — — — 41 — 41 Warehouse lending: Risk rating: Pass — — — — — — 474,328 474,328 Total warehouse lending — — — — — — 474,328 474,328 Current period gross write-offs — — — — — — — — Total commercial portfolio $ 2,483,490 $ 11,028,860 $ 5,249,934 $ 3,226,783 $ 3,361,997 $ 7,461,853 $ 8,476,158 $ 41,289,075 Current period gross write-offs $ 324 $ 103 $ 101 $ 395 $ 13,358 $ 12,129 $ — $ 26,410 At December 31, 2022 (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total Commercial non-mortgage: Pass $ 5,154,781 $ 1,952,158 $ 965,975 $ 792,977 $ 593,460 $ 780,200 $ 5,670,532 $ 15,910,083 Special mention 104,277 15,598 21,168 263 14,370 7,770 40,142 203,588 Substandard 28,203 11,704 69,954 36,604 70,634 16,852 41,917 275,868 Doubtful — — — 1 — — 3,255 3,256 Total commercial non-mortgage 5,287,261 1,979,460 1,057,097 829,845 678,464 804,822 5,755,846 16,392,795 Asset-based: Pass 19,659 3,901 9,424 14,413 5,163 55,553 1,551,250 1,659,363 Special mention — — — — — — 80,476 80,476 Substandard — — — 1,491 — — 80,312 81,803 Total asset-based 19,659 3,901 9,424 15,904 5,163 55,553 1,712,038 1,821,642 Commercial real estate: Pass 3,420,635 2,246,672 1,556,185 1,605,869 1,058,730 2,681,052 97,832 12,666,975 Special mention 21,878 8,995 7,264 37,570 47,419 66,652 1,000 190,778 Substandard 519 2,459 216 31,163 47,021 57,997 — 139,375 Doubtful — — — 1 — 34 — 35 Total commercial real estate 3,443,032 2,258,126 1,563,665 1,674,603 1,153,170 2,805,735 98,832 12,997,163 Multi-family: Pass 1,992,980 1,057,705 507,065 694,066 444,564 1,748,337 51,655 6,496,372 Special mention 37,677 — — 95 40,307 726 8,838 87,643 Substandard — — 382 — 12,681 24,904 — 37,967 Total multi-family 2,030,657 1,057,705 507,447 694,161 497,552 1,773,967 60,493 6,621,982 Equipment financing: Pass 388,641 345,792 331,419 308,441 98,874 83,264 — 1,556,431 Special mention — 185 — 11,965 6,775 25 — 18,950 Substandard 314 16,711 18,436 5,016 5,307 7,228 — 53,012 Total equipment financing 388,955 362,688 349,855 325,422 110,956 90,517 — 1,628,393 Warehouse lending: Pass — — — — — — 641,976 641,976 Total warehouse lending — — — — — — 641,976 641,976 Total commercial portfolio $ 11,169,564 $ 5,661,880 $ 3,487,488 $ 3,539,935 $ 2,445,305 $ 5,530,594 $ 8,269,185 $ 40,103,951 The following tables summarize the amortized cost basis of consumer loans by FICO score and origination year: At March 31, 2023 (In thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Total Residential: Risk rating: 800+ $ 15,014 $ 681,916 $ 1,043,662 $ 468,357 $ 150,282 $ 993,219 $ — $ 3,352,450 740-799 69,297 866,867 863,689 308,974 111,803 716,299 — 2,936,929 670-739 18,719 346,423 326,999 91,487 62,585 393,008 — 1,239,221 580-669 63 46,328 52,355 14,004 10,532 125,882 — 249,164 579 and below — 53,275 3,563 3,963 99,840 63,158 — 223,799 Total residential 103,093 1,994,809 2,290,268 886,785 435,042 2,291,566 — 8,001,563 Current period gross write-offs — — — — — 211 — 211 Home equity: Risk rating: 800+ 6,211 26,483 35,954 25,557 8,524 63,613 434,492 600,834 740-799 4,088 29,016 31,860 18,237 6,556 38,748 375,534 504,039 670-739 4,421 15,017 17,246 6,262 4,153 34,796 257,878 339,773 580-669 408 2,984 2,504 1,483 903 13,456 74,873 96,611 579 and below 202 419 766 643 529 6,120 30,633 39,312 Total home equity 15,330 73,919 88,330 52,182 20,665 156,733 1,173,410 1,580,569 Current period gross write-offs — — — — — 108 — 108 Other consumer: Risk rating: 800+ 140 443 207 479 843 266 17,207 19,585 740-799 266 782 2,589 1,332 1,933 570 7,675 15,147 670-739 154 838 409 1,815 3,117 975 8,836 16,144 580-669 58 304 216 297 694 159 1,294 3,022 579 and below 22 120 43 41 127 55 1,010 1,418 Total other consumer 640 2,487 3,464 3,964 6,714 2,025 36,022 55,316 Current period gross write-offs 435 — 3 114 126 101 — 779 Total consumer portfolio $ 119,063 $ 2,071,215 $ 2,382,062 $ 942,931 $ 462,421 $ 2,450,324 $ 1,209,432 $ 9,637,448 Current period gross write-offs $ 435 $ — $ 3 $ 114 $ 126 $ 420 $ — $ 1,098 At December 31, 2022 (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total Residential: 800+ $ 527,408 $ 954,568 $ 469,518 $ 160,596 $ 28,361 $ 997,409 $ — $ 3,137,860 740-799 963,026 946,339 311,295 111,913 43,684 689,771 — 3,066,028 670-739 381,515 350,671 103,999 62,365 18,451 384,687 — 1,301,688 580-669 40,959 49,648 14,484 5,836 2,357 138,107 — 251,391 579 and below 52,464 3,693 2,057 84,032 1,299 62,908 — 206,453 Total residential 1,965,372 2,304,919 901,353 424,742 94,152 2,272,882 — 7,963,420 Home equity: 800+ 25,475 35,129 25,612 7,578 12,545 55,352 465,318 627,009 740-799 26,743 35,178 17,621 8,111 7,765 32,270 398,692 526,380 670-739 18,396 16,679 8,175 3,635 7,614 30,060 259,646 344,205 580-669 2,848 3,068 1,520 1,456 1,163 13,607 76,614 100,276 579 and below 426 386 651 661 563 4,736 27,814 35,237 Total home equity 73,888 90,440 53,579 21,441 29,650 136,025 1,228,084 1,633,107 Other consumer: 800+ 495 218 544 1,045 247 56 19,196 21,801 740-799 888 2,624 1,959 2,494 941 364 12,218 21,488 670-739 977 603 2,480 4,238 1,041 118 6,107 15,564 580-669 211 117 337 801 173 54 2,223 3,916 579 and below 169 101 29 116 36 21 707 1,179 Total other consumer 2,740 3,663 5,349 8,694 2,438 613 40,451 63,948 Total consumer portfolio $ 2,042,000 $ 2,399,022 $ 960,281 $ 454,877 $ 126,240 $ 2,409,520 $ 1,268,535 $ 9,660,475 Collateral Dependent Loans and Leases A loan or lease is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is substantially expected to be provided through the operation or sale of collateral. At March 31, 2023, and December 31, 2022, the carrying amount of collateral dependent commercial loans and leases totaled $28.1 million and $43.8 million, respectively, and the carrying amount of collateral dependent consumer loans totaled $40.4 million and $45.2 million, respectively. Commercial non-mortgage, asset-based, and equipment financing loans and leases are generally secured by machinery and equipment, inventory, receivables, or other non-real estate assets, whereas commercial real estate, multi-family, residential, home equity, and other consumer loans are secured by real estate. The ACL for collateral dependent loans and leases is individually assessed based on the fair value of the collateral less costs to sell. At March 31, 2023, and December 31, 2022, the collateral value associated with collateral dependent loans and leases totaled $79.1 million and $108.0 million, respectively. Modifications for Borrowers Experiencing Financial Difficulty On January 1, 2023, the Company adopted ASU 2022-02, which eliminates the accounting guidance for TDRs and enhances the disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty. For a description of the Company's accounting policies related to the accounting and reporting of TDRs, for which comparative period information is presented, refer to Note 1: Summary of Significant Accounting Policies of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. In certain circumstances, the Company enters into agreements to modify the terms of loans to borrowers experiencing financial difficulty. A variety of solutions are offered to borrowers experiencing financial difficulty, including loan modifications that may result in principal forgiveness, interest rate reductions, payment delays, term extension, or a combination thereof. The following is a description of each of these types of modifications: • Principal forgiveness – The outstanding principal balance of a loan may be reduced by a specified amount. Principal forgiveness may occur voluntarily as part of a negotiated agreement with a borrower, or involuntarily through a bankruptcy proceeding. • Interest rate reductions – Includes modifications where the contractual interest rate of the loan has been reduced. • Payment delays – Deferral arrangements which allow borrowers to delay a scheduled loan payment to a later date. Deferred loan payments do not affect the original contractual terms of the loan. Modifications that result in only an insignificant payment delay are not disclosed. The Company considers that a three month or less payment delay generally would be considered insignificant. • Term extensions – Extensions of the original contractual maturity date of the loan. • Combination – Combination includes loans that have undergone more than one of the above loan modification types. Significant judgment is required to determine if a borrower is experiencing financial difficulty. These considerations vary by portfolio class. The Company has identified modifications to borrowers experiencing financial difficulty that are included in its disclosures as follows: • Commercial: The Company evaluates modifications of loans to commercial borrowers that are rated substandard or worse, and includes the modifications in its disclosures to the extent that the modification is considered • Consumer: The Company evaluates modifications of loans to consumer borrowers subject to its loss mitigation program and includes them in its disclosures to the extent that the modification is considered other-than-insignificant. The following table summarizes the amortized cost basis of loans modified to borrowers experiencing financial difficulty, disaggregated by class and type of concession granted during the three months ended March 31, 2023: (In thousands) Interest Rate Reduction Term Extension Combination - Term Extension and Interest Rate Reduction Total % of Total Class (2) Commercial non-mortgage $ 7 $ 29,884 $ — $ 29,891 0.2 % Commercial real estate — 17,116 — 17,116 0.1 Home equity — 57 64 121 — Total (1) $ 7 $ 47,057 $ 64 $ 47,128 0.1 % (1) The total amortized cost excludes accrued interest receivable of $0.2 million. (2) Represents the amortized cost of loans modified during the reporting period as a percentage of the period-end loan balance by class. The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2023: Financial Effect Interest Rate Reduction: Commercial non-mortgage Reduced weighted average interest rate by 4.5% Term Extension: Commercial non-mortgage Extended term by a weighted average 0.6 years Commercial real estate Extended term by a weighted average 1.0 year Home equity Extended term by a weighted average 8.8 years Combination: Home equity Extended term by a weighted average 5.1 years and reduced weighted average interest rate by 1.5% The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table summarizes the aging of loans that have been modified during the three months ended March 31, 2023: (In thousands) Current 30-59 Days 60-89 Days 90+ Days Non-Accrual Total Commercial non-mortgage $ 3,562 $ — $ — $ — $ 26,329 $ 29,891 Commercial real estate 17,116 — — — — 17,116 Home equity 23 — — — 98 121 Total $ 20,701 $ — $ — $ — $ 26,427 $ 47,128 There were no loans made to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2023, and that subsequently defaulted. For the purposes of this disclosure, a payment default is defined as 90 or more days past due and still accruing. Non-accrual loans that are modified to borrowers experiencing financial difficulty remain on non-accrual status until the borrower has demonstrated performance under the modified terms. Commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified were not significant. Troubled Debt Restructurings Prior to the Adoption of ASU 2022-02 The following table summarizes information related to TDRs: (In thousands) At December 31, 2022 Accrual status $ 110,868 Non-accrual status 83,954 Total TDRs $ 194,822 Additional funds committed to borrowers in TDR status $ 1,724 Specific reserves for TDRs included in the ACL on loans and leases: Commercial portfolio $ 14,578 Consumer portfolio 3,559 The following table summarizes loans and leases modified as TDRs by class and modification type during the three months ended March 31, 2022: (Dollars in thousands) Number of Recorded Investment (1) Commercial non-mortgage Term extension 2 $ 98 Combination - Term extension and interest rate reduction 2 92 Residential Other (2) 5 2,985 Home equity Combination - Term extension and interest rate reduction 4 44 Other (2) 17 1,242 Total TDRs 30 $ 4,461 (1) Post-modification balances approximated pre-modification balances. The aggregate amount of charge-offs due to restructurings was not significant. (2) Other included covenant modifications, forbearance, discharges under Chapter 7 bankruptcy, or other concessions. During the three months ended March 31, 2022, the portion of TDRs deemed to uncollectible and charged-off totaled $9.1 million for the commercial portfolio and $0.1 million for the consumer portfolio. There were no significant loans and leases modified as TDRs within the previous twelve months and for which there was a payment default during the three months ended March 31, 2022. |