Loans and leases and the allowance for credit losses | 4. Loans and leases and the allowance for credit losses A summary of current, past due and nonaccrual loans as of March 31, 2022 and December 31, 2021 follows: Current 30-89 Days Past Due Accruing Loans Due 90 Days or More Nonaccrual Total (In thousands) March 31, 2022 Commercial, financial, leasing, etc. $ 23,140,917 $ 70,716 $ 9,238 $ 275,146 $ 23,496,017 Real estate: Commercial 24,237,034 250,362 76,413 1,157,686 25,721,495 Residential builder and developer 1,381,331 840 — 2,916 1,385,087 Other commercial construction 7,283,522 112,599 — 50,855 7,446,976 Residential 13,126,694 249,731 687,397 341,671 14,405,493 Residential — limited documentation 1,050,328 16,546 — 123,512 1,190,386 Consumer: Home equity lines and loans 3,407,958 16,939 — 71,489 3,496,386 Recreational finance 8,156,368 33,093 — 31,546 8,221,007 Automobile 4,688,513 31,707 — 35,350 4,755,570 Other 1,631,907 10,305 3,703 44,060 1,689,975 Total $ 88,104,572 $ 792,838 $ 776,751 $ 2,134,231 $ 91,808,392 December 31, 2021 Commercial, financial, leasing, etc. $ 23,101,810 $ 142,208 $ 8,284 $ 221,022 $ 23,473,324 Real estate: Commercial 24,712,643 319,099 31,733 1,069,280 26,132,755 Residential builder and developer 1,400,437 2,904 — 3,005 1,406,346 Other commercial construction 7,722,049 17,175 — 111,405 7,850,629 Residential 13,294,872 239,561 920,080 355,858 14,810,371 Residential — limited documentation 1,124,520 16,666 — 122,888 1,264,074 Consumer: Home equity lines and loans 3,476,617 15,486 — 70,488 3,562,591 Recreational finance 7,985,173 40,544 — 27,811 8,053,528 Automobile 4,604,772 40,064 — 34,037 4,678,873 Other 1,620,147 12,223 3,302 44,289 1,679,961 Total $ 89,043,040 $ 845,930 $ 963,399 $ 2,060,083 $ 92,912,452 At March 31, 2022 and December 31, 2021, the Company had $445 million and $1.2 billion, respectively, of outstanding loan balances, consisting predominantly of residential real estate loans, for which COVID-19 related payment deferrals were granted. Those loans met the criteria described in note 1 of Notes to Financial Statements in the 2021 Annual Report and, accordingly, are not considered past due or otherwise in default of loan terms as of the date presented. Included in those loan balances were $323 million and $974 million of government-guaranteed loans at March 31, 2022 and December 31, 2021, respectively. Payment deferrals are generally scheduled to expire in 2022 and/or are in the process of formal modification of repayment terms for previously deferred payments. 4. Loans and leases and the allowance for credit losses, continued One-to-four family residential mortgage loans held for sale were $238 million and $474 million at March 31, 2022 and December 31, 2021, respectively. Commercial real estate loans held for sale were $216 million at March 31, 2022 and $425 million at December 31, 2021. Credit quality indicators The Company utilizes a loan grading system to differentiate risk amongst its commercial loans and commercial real estate loans. Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are classified as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be classified as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more. Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s centralized credit risk department reviews all criticized commercial loans and commercial real estate loans greater than $1 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing. 4. Loans and leases and the allowance for credit losses, continued The following table summarizes the loan grades applied at March 31, 2022 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year. Term Loans by Origination Year Revolving Revolving Loans Converted to Term 2022 2021 2020 2019 2018 Prior Loans Loans Total (In thousands) Commercial, financial, leasing, etc.: Loan grades: Pass $ 1,055,017 4,113,672 1,587,360 1,244,516 804,066 1,672,521 11,620,841 21,332 $ 22,119,325 Criticized accrual 2,158 160,026 85,975 112,346 54,793 239,338 431,138 15,772 1,101,546 Criticized nonaccrual 230 32,442 23,377 16,306 25,381 62,888 108,064 6,458 275,146 Total commercial, financial, leasing, etc. $ 1,057,405 4,306,140 1,696,712 1,373,168 884,240 1,974,747 12,160,043 43,562 $ 23,496,017 Real estate: Commercial: Loan grades: Pass $ 841,183 2,820,491 2,575,823 3,515,526 2,680,777 6,945,820 802,747 — $ 20,182,367 Criticized accrual — 303,277 435,302 760,867 1,020,066 1,824,893 37,037 — 4,381,442 Criticized nonaccrual — 11,335 170,600 193,832 118,467 631,956 31,496 — 1,157,686 Total commercial real estate $ 841,183 3,135,103 3,181,725 4,470,225 3,819,310 9,402,669 871,280 — $ 25,721,495 Residential Loan grades: Pass $ 148,495 693,998 72,171 65,188 48,524 13,301 203,455 — $ 1,245,132 Criticized accrual — 3,848 6,430 109,729 13,360 63 3,609 — 137,039 Criticized nonaccrual — — — 2,909 — 7 — — 2,916 Total residential builder and developer $ 148,495 697,846 78,601 177,826 61,884 13,371 207,064 — $ 1,385,087 Other commercial construction: Loan grades: Pass $ 51,528 1,105,470 1,763,832 1,898,002 573,711 347,883 30,026 — $ 5,770,452 Criticized accrual 321 32,357 77,290 673,544 517,987 322,078 2,092 — 1,625,669 Criticized nonaccrual — — 106 10,634 3,392 32,254 4,469 — 50,855 Total other commercial construction $ 51,849 1,137,827 1,841,228 2,582,180 1,095,090 702,215 36,587 — $ 7,446,976 4. Loans and leases and the allowance for credit losses, continued The Company considers repayment performance a significant indicator of credit quality for its residential real estate loan and consumer loan portfolios. A summary of loans in accrual and nonaccrual status at March 31, 2022 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows. Term Loans by Origination Year Revolving Revolving Loans Converted to Term 2022 2021 2020 2019 2018 Prior Loans Loans Total (In thousands) Residential: Current $ 1,166,092 2,822,922 1,657,789 992,754 403,896 6,044,813 38,428 — $ 13,126,694 30-89 days past due 3,136 19,193 10,756 5,952 6,882 201,254 2,558 — 249,731 Accruing loans days or more — 28,249 60,476 25,426 28,236 545,010 — — 687,397 Nonaccrual — 5,764 14,866 9,950 3,347 307,228 516 — 341,671 Total residential $ 1,169,228 2,876,128 1,743,887 1,034,082 442,361 7,098,305 41,502 — $ 14,405,493 Residential - limited documentation: Current $ — — — — — 1,050,328 — — $ 1,050,328 30-89 days past due — — — — — 16,546 — — 16,546 Accruing loans days or more — — — — — — — — — Nonaccrual — — — — — 123,512 — — 123,512 Total residential - limited documentation $ — — — — — 1,190,386 — — $ 1,190,386 Consumer: Home equity lines and loans: Current $ 70 382 762 2,648 1,480 36,016 2,249,108 1,117,492 $ 3,407,958 30-89 days past due — — — — — 935 574 15,430 16,939 Accruing loans days or more — — — — — — — — — Nonaccrual — 15 — — — 5,445 4,772 61,257 71,489 Total home equity lines and loans $ 70 397 762 2,648 1,480 42,396 2,254,454 1,194,179 $ 3,496,386 Recreational finance: Current $ 703,845 2,719,675 1,938,655 1,175,424 602,683 1,016,086 — — $ 8,156,368 30-89 days past due 88 5,701 7,647 6,930 4,076 8,651 — — 33,093 Accruing loans days or more — — — — — — — — — Nonaccrual — 2,664 6,270 5,907 5,017 11,688 — — 31,546 Total recreational finance $ 703,933 2,728,040 1,952,572 1,188,261 611,776 1,036,425 — — $ 8,221,007 Automobile: Current $ 567,597 2,052,558 981,264 575,505 289,345 222,244 — — $ 4,688,513 30-89 days past due 288 7,968 5,104 6,824 5,022 6,501 — — 31,707 Accruing loans days or more — — — — — — — — — Nonaccrual — 3,756 5,904 8,199 7,171 10,320 — — 35,350 Total automobile $ 567,885 2,064,282 992,272 590,528 301,538 239,065 — — $ 4,755,570 Other: Current $ 56,511 222,946 85,462 61,479 19,075 26,925 1,158,065 1,444 $ 1,631,907 30-89 days past due 2,187 907 369 489 166 5,814 — 373 10,305 Accruing loans days or more — — — — — 3,703 — — 3,703 Nonaccrual 1,538 883 203 370 144 266 40,552 104 44,060 Total other $ 60,236 224,736 86,034 62,338 19,385 36,708 1,198,617 1,921 $ 1,689,975 Total loans and leases at March 31, 2022 $ 4,600,284 17,170,499 11,573,793 11,481,256 7,237,064 21,736,287 16,769,547 1,239,662 $ 91,808,392 4. Loans and leases and the allowance for credit losses, continued The following table summarizes the loan grades applied at December 31, 2021 to the various classes of the Company’s commercial loans and commercial real estate loans by origination year. Term Loans by Origination Year Revolving Revolving Loans Converted to Term 2021 2020 2019 2018 2017 Prior Loans Loans Total (In thousands) Commercial, financial, leasing, etc.: Loan grades: Pass $ 4,798,052 1,916,072 1,476,786 951,881 500,615 1,398,775 10,993,461 18,699 $ 22,054,341 Criticized accrual 196,680 98,595 107,010 73,126 36,232 185,935 484,755 15,628 1,197,961 Criticized nonaccrual 19,462 23,229 17,114 39,908 20,927 33,698 60,175 6,509 221,022 Total commercial, financial, leasing, etc. $ 5,014,194 2,037,896 1,600,910 1,064,915 557,774 1,618,408 11,538,391 40,836 $ 23,473,324 Real estate: Commercial: Loan grades: Pass $ 3,413,587 2,662,999 3,682,178 2,648,388 2,076,155 5,232,790 728,948 — $ 20,445,045 Criticized accrual 133,133 480,146 685,701 1,068,552 468,530 1,743,798 38,570 — 4,618,430 Criticized nonaccrual 21,587 133,560 195,084 83,857 76,628 520,473 38,091 — 1,069,280 Total commercial real estate $ 3,568,307 3,276,705 4,562,963 3,800,797 2,621,313 7,497,061 805,609 — $ 26,132,755 Residential builder and developer: Loan grades: Pass $ 786,983 106,510 75,287 47,587 4,680 12,450 230,017 — $ 1,263,514 Criticized accrual 2,055 5,356 117,258 13,637 630 — 891 — 139,827 Criticized nonaccrual — — 2,910 — — 95 — — 3,005 Total residential builder and developer $ 789,038 111,866 195,455 61,224 5,310 12,545 230,908 — $ 1,406,346 Other commercial construction: Loan grades: Pass $ 957,947 1,781,603 2,022,276 832,547 152,669 273,556 38,781 — $ 6,059,379 Criticized accrual 24,103 54,191 675,226 583,428 228,739 114,158 — — 1,679,845 Criticized nonaccrual — — 71,613 3,303 12,263 19,970 4,256 — 111,405 Total other commercial construction $ 982,050 1,835,794 2,769,115 1,419,278 393,671 407,684 43,037 — $ 7,850,629 4. Loans and leases and the allowance for credit losses, continued A summary of loans in accrual and nonaccrual status at December 31, 2021 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows. Term Loans by Origination Year Revolving Revolving Loans Converted to Term 2021 2020 2019 2018 2017 Prior Loans Loans Total (In thousands) Residential: Current $ 3,057,118 1,672,090 1,075,896 466,040 1,037,958 5,913,461 72,309 — $ 13,294,872 30-89 15,245 12,535 9,886 6,132 33,097 162,666 — — 239,561 Accruing 90 days or more 10,924 100,581 28,512 31,996 205,318 542,749 — — 920,080 Nonaccrual 3,359 19,858 7,119 4,577 5,890 314,792 263 — 355,858 Total residential $ 3,086,646 1,805,064 1,121,413 508,745 1,282,263 6,933,668 72,572 — $ 14,810,371 Residential - limited documentation: Current $ — — — — — 1,124,520 — — $ 1,124,520 30-89 — — — — — 16,666 — — 16,666 Accruing 90 days or more — — — — — — — — — Nonaccrual — — — — — 122,888 — — 122,888 Total residential - limited documentation $ — — — — — 1,264,074 — — $ 1,264,074 Consumer: Home equity lines and loans: Current $ 304 777 2,793 1,730 1,944 38,015 2,348,279 1,082,775 $ 3,476,617 30-89 — — — 21 — 698 346 14,421 15,486 Accruing 90 days or more — — — — — — — — — Nonaccrual — — — — — 5,750 4,951 59,787 70,488 Total home equity lines and loans $ 304 777 2,793 1,751 1,944 44,463 2,353,576 1,156,983 $ 3,562,591 Recreational finance: Current $ 2,890,111 2,088,342 1,267,929 646,883 445,868 646,040 — — $ 7,985,173 30-89 5,929 8,912 8,317 5,074 5,189 7,123 — — 40,544 Accruing 90 days or more — — — — — — — — — Nonaccrual 1,341 4,646 4,871 4,918 4,039 7,996 — — 27,811 Total recreational finance $ 2,897,381 2,101,900 1,281,117 656,875 455,096 661,159 — — $ 8,053,528 Automobile: Current $ 2,220,061 1,097,684 662,000 341,655 211,774 71,598 — — $ 4,604,772 30-89 8,508 6,615 8,936 7,161 5,715 3,129 — — 40,064 Accruing 90 days or more — — — — — — — — — Nonaccrual 1,588 4,390 7,847 7,867 6,882 5,463 — — 34,037 Total automobile $ 2,230,157 1,108,689 678,783 356,683 224,371 80,190 — — $ 4,678,873 Other: Current $ 244,346 96,945 73,586 24,424 16,924 14,321 1,148,096 1,505 $ 1,620,147 30-89 2,937 404 472 255 101 5,712 1,908 434 12,223 Accruing 90 days or more — — — — — 3,302 — — 3,302 Nonaccrual 2,051 326 326 193 104 353 40,807 129 44,289 Total other $ 249,334 97,675 74,384 24,872 17,129 23,688 1,190,811 2,068 $ 1,679,961 Total loans and leases at December 31, 2021 $ 18,817,411 12,376,366 12,286,933 7,895,140 5,558,871 18,542,940 16,234,904 1,199,887 $ 92,912,452 4. Loans and leases and the allowance for credit losses, continued Allowance for credit losses For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by type. Changes in the allowance for credit losses for the three months ended March 31, 2022 and 2021 were as follows: Commercial, Financial, Real Estate Leasing, etc. Commercial Residential Consumer Total (In thousands) Three Months Ended March 31, 2022 Beginning balance $ 283,899 557,239 71,726 556,362 $ 1,469,226 Provision for credit losses 28,725 (30,938 ) 1,720 10,493 10,000 Net charge-offs Charge-offs (19,234 ) (1,800 ) (3,972 ) (26,032 ) (51,038 ) Recoveries 13,665 14,943 3,107 12,456 44,171 Net (charge-offs) recoveries (5,569 ) 13,143 (865 ) (13,576 ) (6,867 ) Ending balance $ 307,055 539,444 72,581 553,279 $ 1,472,359 Three Months Ended March 31, 2021 Beginning balance $ 405,846 670,719 103,590 556,232 $ 1,736,387 Provision for credit losses (72,418 ) 99,471 (13,435 ) (38,618 ) (25,000 ) Net charge-offs Charge-offs (26,945 ) (60,652 ) (2,399 ) (32,929 ) (122,925 ) Recoveries 22,511 6,560 2,033 16,640 47,744 Net charge-offs (4,434 ) (54,092 ) (366 ) (16,289 ) (75,181 ) Ending balance $ 328,994 716,098 89,789 501,325 $ 1,636,206 4. Loans and leases and the allowance for credit losses, continued Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators including loan grade and borrower repayment performance, can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, gross domestic product and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At both March 31, 2022 and December 31, 2021, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio. The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial loans and commercial real estate loans that are in nonaccrual status. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of classifying the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs. For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge off and for purposes of estimating losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Modified loans, including smaller balance homogenous loans, that are considered to be troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Changes in the amount of the allowance for credit losses reflect the outcome of the procedures described herein, including the impact of changes in macroeconomic forecasts as compared with previous forecasts, as well as the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process. The Company’s reserve for off-balance sheet credit exposures was not material at March 31, 2022 and December 31, 2021. 4. Loans and leases and the allowance for credit losses, continued Information with respect to loans and leases that were considered nonaccrual at the beginning and end of the reporting period and the interest income recognized on such loans for the three-month periods ended March 31, 2022 and 2021 follows. March 31, 2022 January 1, 2022 Three Months Ended March 31, 2022 Amortized Cost with Allowance Amortized Cost Total Amortized Cost Interest Income Recognized (In thousands) Commercial, financial, leasing, etc. $ 171,322 $ 103,824 $ 275,146 $ 221,022 $ 13,594 Real estate: Commercial 222,771 934,915 1,157,686 1,069,280 6,131 Residential builder and developer 524 2,392 2,916 3,005 1,428 Other commercial construction 29,914 20,941 50,855 111,405 626 Residential 191,495 150,176 341,671 355,858 6,541 Residential — limited documentation 80,590 42,922 123,512 122,888 196 Consumer: Home equity lines and loans 32,783 38,706 71,489 70,488 809 Recreational finance 24,350 7,196 31,546 27,811 161 Automobile 30,129 5,221 35,350 34,037 38 Other 43,964 96 44,060 44,289 92 Total $ 827,842 $ 1,306,389 $ 2,134,231 $ 2,060,083 $ 29,616 March 31, 2021 January 1, 2021 Three Months Ended March 31, 2021 Amortized Cost with Allowance Amortized Cost Total Amortized Cost Interest Income Recognized (In thousands) Commercial, financial, leasing, etc. $ 211,894 $ 83,175 $ 295,069 $ 306,827 $ 3,085 Real estate: Commercial 337,036 487,043 824,079 775,894 1,658 Residential builder and developer 1,224 — 1,224 1,094 33 Other commercial construction 24,186 102,039 126,225 114,039 41 Residential 186,374 199,134 385,508 365,729 4,498 Residential — limited documentation 84,342 58,727 143,069 147,170 79 Consumer: Home equity lines and loans 44,548 34,640 79,188 79,392 952 Recreational finance 19,657 7,561 27,218 25,519 155 Automobile 33,270 4,949 38,219 39,404 49 Other 2,864 34,443 37,307 38,231 180 Total $ 945,395 $ 1,011,711 $ 1,957,106 $ 1,893,299 $ 10,730 4. Loans and leases and the allowance for credit losses, continued Loan modifications During the normal course of business, the Company modifies loans to maximize recovery efforts. If the borrower is experiencing financial difficulty and a concession is granted, the Company considers such modifications as troubled debt restructurings and classifies those loans as either nonaccrual loans or renegotiated loans. The types of concessions that the Company grants typically include principal deferrals and interest rate concessions, but may also include other types of concessions. The table that follows summarizes the Company’s loan modification activities that were considered troubled debt restructurings for the three-month periods ended March 31, 2022 and 2021: Post-modification (a) Number Pre- modification Recorded Investment Principal Deferral Interest Rate Reduction Other Combination of Concession Types Total Three Months Ended March 31, 2022 (Dollars in thousands) Commercial, financial, leasing, etc. 37 $ 10,003 $ 6,920 $ — $ 54 $ 2,780 $ 9,754 Real estate: Commercial 17 7,582 4,376 — 2,101 855 7,332 Residential 97 24,051 15,443 — — 9,961 25,404 Residential — limited documentation 5 1,076 894 — — 193 1,087 Consumer: Home equity lines and loans 35 2,150 1,988 — — 172 2,160 Recreational finance 177 5,997 5,990 — — — 5,990 Automobile 534 10,263 10,233 — — — 10,233 Other 33 334 334 — — — 334 Total 935 $ 61,456 $ 46,178 $ — $ 2,155 $ 13,961 $ 62,294 Three Months Ended March 31, 2021 Commercial, financial, leasing, etc. 93 $ 53,733 $ 24,653 $ — $ — $ 28,504 $ 53,157 Real estate: Commercial 33 26,870 11,160 — 2,214 12,422 25,796 Residential 123 39,583 38,557 — — 1,117 39,674 Residential — limited documentation 10 1,116 1,059 — — — 1,059 Consumer: Home equity lines and loans 26 1,715 1,486 — — 174 1,660 Recreational finance 72 2,212 2,212 — — — 2,212 Automobile 276 4,969 4,955 — — 14 4,969 Other 222 1,434 1,434 — — — 1,434 Total 855 $ 131,632 $ 85,516 $ — $ 2,214 $ 42,231 $ 129,961 (a) Financial effects impacting the recorded investment included principal payments or advances, charge-offs and capitalized escrow arrearages. The present value of interest rate concessions, discounted at the effective rate of the original loan, was not material. 4. Loans and leases and the allowance for credit losses, continued Troubled debt restructurings are evaluated for impairment giving consideration to the impact of the modified loan terms on the present value of the loan’s expected cash flows. Impairment of troubled debt restructurings that have subsequently defaulted may also be measured based on the loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Charge-offs may also be recognized on troubled debt restructurings that have subsequently defaulted. Loans that were modified as troubled debt restructurings during the twelve months ended March 31, 2022 and 2021 and for which there was a subsequent payment default during the three-month periods ended March 31, 2022 and 2021, respectively, were not material. The amount of foreclosed residential real estate property held by the Company was |