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Allowance for Credit Losses

12 Months Ended

Dec. 31, 2025

In accordance with ASC 326, the Company is required to measure the allowance for credit losses of financial assets with similar risk characteristics on a collective or pooled basis. In considering the segmentation of financial assets measured at amortized cost into pools, the Company considered various risk characteristics in its analysis. Generally, the segmentation utilized

represents the level at which the Company develops and documents its systematic methodology to determine the allowance for credit losses for the financial asset held at amortized cost, specifically the Company’s loan portfolio and debt securities classified as held-to-maturity. Below is a summary of the Company’s loan portfolio segments and major debt security types:

Commercial loans: The Company makes commercial loans for many purposes, including working capital lines and leasing arrangements, that are generally renewable annually and supported by business assets, personal guarantees and additional collateral. Underlying collateral includes receivables, inventory, enterprise value and the assets of the business. Commercial business lending is generally considered to involve a slightly higher degree of risk than traditional consumer bank lending. This portfolio includes a range of industries, including manufacturing, restaurants, franchise, professional services, equipment finance and leasing, mortgage warehouse lending and industrial. Individually assessed collateral dependent commercial loans are primarily collateralized by equipment and the enterprise value or assets of the specific business.

Commercial real estate loans, including construction and development, and non-construction: The Company’s commercial real estate loans are generally secured by a first mortgage lien and assignment of rents on the underlying property (utilized in related assessment of individually assessed collateral dependent loans). Since most of the Company’s bank branches are located in the Chicago metropolitan area, southern Wisconsin, and west Michigan, a significant portion of the Company’s commercial real estate loan portfolio is located in this region. As the risks and circumstances of such loans in construction phase vary from that of non-construction commercial real estate loans, the Company assesses the allowance for credit losses separately for these two segments.

Home equity loans: The Company’s home equity loans and lines of credit are primarily originated by each of the bank subsidiaries in their local markets where there is a strong understanding of the underlying real estate value. The Company’s banks monitor and manage these loans, and conduct an automated review of all home equity lines of credit at least twice per year. This review collects FICO and Bankruptcy scores for each home equity borrower and identifies situations where the credit strength of the borrower is declining. When other specific events occur that may influence repayment, information such as tax liens or judgments is collected. The bank subsidiaries use this information to manage loans that may be higher risk and to determine whether to obtain additional credit information or updated property valuations. In a limited number of cases, the Company may issue home equity credit together with first mortgage financing, and requests for such financing are evaluated on a combined basis.

Residential real estate loans, including early buy-out loans guaranteed by U.S. government agencies: The Company’s residential real estate portfolio includes one- to four-family adjustable rate mortgages, construction loans to individuals and bridge financing loans for qualifying customers as well as certain long-term fixed rate loans. The Company’s residential mortgages relate to properties located principally in the Chicago metropolitan area, California, southern Wisconsin, Florida and west Michigan. Due to interest rate risk considerations, the Company generally sells in the secondary market loans originated with long-term fixed rates, for which we receive fee income. The Company also selectively retains certain of these loans within the banks’ own loan portfolios where they are non-agency conforming, or where the terms of the loans make them favorable to retain. Since this loan portfolio consists primarily of locally originated loans, and since the majority of the borrowers are longer-term customers with lower LTV ratios, the Company may face a relatively low risk of borrower default and delinquency. Collateral dependent residential real estate loans that are individually assessed when measuring the allowance for credit losses are primarily collateralized by such one-to-four family properties noted above. It is not the Company’s current practice to underwrite, and there are no plans to underwrite subprime, Alt A, no or little documentation loans, or option ARM loans.

Additionally, early buy-out loans guaranteed by U.S. government agencies include loans in which the Company is eligible or has exercised its option under the Government National Mortgage Association (“GNMA”) securitization program to repurchase certain delinquent mortgage loans. Such loans were previously transferred by the Company with servicing of such loans retained. Early buy-out loans are insured or guaranteed by the Federal Housing Administration (“FHA”) or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.

Premium finance receivable-property & casualty: The Company makes loans to finance insurance premiums related to property and casualty insurance policies. The loans are indirectly originated by working through independent insurance agents and brokers located throughout the United States and Canada. The insurance premiums financed are primarily for commercial customers’ purchases of liability, property and casualty and other commercial insurance. This lending involves relatively rapid turnover of the loan portfolio and high volume of loan originations. The Company performs ongoing credit and other reviews of the agents and brokers, and performs various internal audit steps to mitigate against the risk of fraud.

Premium finance receivable-life insurance: The Company also originates life insurance premium finance receivables. These loans are originated via referrals from life insurance carriers, independent insurance agents, financial advisors and legal counsel. The life insurance policy is the primary form of collateral. In addition, these loans often are secured with a letter of credit,

marketable securities or certificates of deposit. In some cases, the Company may make a loan that has a partially unsecured position.

Consumer and other loans: Included in the consumer and other loan category is a wide variety of personal and consumer loans to individuals. The Company originates consumer loans in order to provide a wider range of financial services to its customers. Consumer loans generally have shorter terms and higher interest rates than mortgage loans but generally involve more credit risk than mortgage loans due to the type and nature of the collateral.

U.S. government agency securities: This security type includes debt obligations of certain government-sponsored entities of the U.S. government such as the Federal Home Loan Bank, Federal Agricultural Mortgage Corporation, Federal Farm Credit Banks Funding Corporation and Fannie Mae. Such securities often contain an explicit or implicit guarantee of the U.S. government.

Municipal securities: The Company’s municipal securities portfolio includes bond issues for various municipal government entities located throughout the United States, including the Chicago metropolitan area, southern Wisconsin and west Michigan, some of which are privately placed and non-rated. Though the risk of loss is typically low, default history exists on municipal securities within the United States.

Mortgage-backed securities: This security type includes debt obligations supported by pools of individual mortgage loans and issued by certain government-sponsored entities of the U.S. government such as Freddie Mac and Fannie Mae. Such securities are considered to contain an implicit guarantee of the U.S. government.

Corporate notes: The Company’s corporate notes portfolio includes bond issues for various public companies representing a diversified population of industries. The risk of loss in this portfolio is considered low based on the characteristics of the investments.

In accordance with ASC 326, the Company elected to not measure an allowance for credit losses on accrued interest. As such, accrued interest is written off in a timely manner when deemed uncollectible. Any such write-off of accrued interest will reverse previously recognized interest income. In addition, the Company elected to not include accrued interest within presentation and disclosures of the carrying amount of financial assets held at amortized cost. This election is applicable to the various disclosures included within the Company’s financial statements. Accrued interest related to financial assets held at amortized cost is included within accrued interest receivable and other assets within the Company’s Consolidated Statements of Condition and totaled $312.2 million at December 31, 2025 and $332.8 million at December 31, 2024.

The tables below show the aging of the Company’s loan portfolio by the segmentation noted above at December 31, 2025 and 2024.


As of December 31, 2025 (In thousands)	Nonaccrual		90+ days and still accruing		60-89 days past due		30-59 days past due		Current		Total Loans
Loan Balances (includes PCD):

Commercial	$	78,059	$	—	$	22,952	$	90,205	$	16,853,470	$	17,044,686
Commercial real estate:

Construction and development	2,976		—		1,260		13,456		2,391,890		2,409,582
Non-construction	22,171		—		18,269		52,145		11,438,569		11,531,154







Home equity	1,221		—		1,112		2,818		475,374		480,525
Residential real estate loans, excluding early buy-out loans	32,862		—		7,562		24,908		4,106,107		4,171,439

Premium finance receivables—property & casualty	29,354		19,115		29,294		57,685		8,047,968		8,183,416
Premium finance receivables—life insurance	—		—		13,887		22,806		8,986,949		9,023,642

Consumer and other	8		42		466		643		113,705		114,864
Total loans, net of unearned income, excluding early buy-out loans	$	166,651	$	19,157	$	94,802	$	264,666	$	52,414,032	$	52,959,308
Early buy-out loans guaranteed by U.S. government agencies (1)	—		53,848		204		1,316		90,425		145,793
Total loans, net of unearned income	$	166,651	$	73,005	$	95,006	$	265,982	$	52,504,457	$	53,105,101


As of December 31, 2024 (In thousands)	Nonaccrual		90+ days and still accruing		60-89 days past due		30-59 days past due		Current		Total Loans
Loan Balances (includes PCD):

Commercial	$	73,490	$	104	$	54,844	$	92,551	$	15,353,562	$	15,574,551
Commercial real estate
Construction and development	2,282		—		1,339		4,634		2,425,826		2,434,081
Non-construction	18,760		—		9,182		26,132		10,415,789		10,469,863







Home equity	1,117		—		1,233		2,148		440,530		445,028
Residential real estate loans, excluding early buy-out loans	23,762		—		5,708		18,917		3,407,622		3,456,009

Premium finance receivables—property & casualty	28,797		16,031		19,042		68,219		7,139,953		7,272,042
Premium finance receivables—life insurance	6,431		—		72,963		36,405		8,031,346		8,147,145

Consumer and other	2		47		59		882		98,572		99,562
Total loans, net of unearned income, excluding early buy-out loans	$	154,641	$	16,182	$	164,370	$	249,888	$	47,313,200	$	47,898,281
Early buy-out loans guaranteed by U.S. government agencies (1)	—		33,952		618		2,335		119,851		156,756
Total loans, net of unearned income	$	154,641	$	50,134	$	164,988	$	252,223	$	47,433,051	$	48,055,037

(1)Early buy-out loans are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.

Credit Quality Indicators

Credit quality indicators, specifically the Company’s internal risk rating systems, reflect how the Company monitors credit losses and represents factors used by the Company when measuring the allowance for credit losses. The following discusses the Company’s credit quality indicators by financial asset.

Loan portfolios

The Company’s ability to manage credit risk depends in large part on its ability to properly identify and manage problem loans. To do so, the Company operates a credit risk rating system under which credit management personnel assign a credit risk rating (1 to 10 rating, with higher scores indicating higher risk) to each loan at the time of origination and review loans on a regular basis. For loans measured at amortized cost, these credit risk ratings are also an important aspect of the Company’s allowance for credit losses measurement methodology. The credit risk rating structure and classifications are shown below:

Pass (risk rating 1 to 5): Based on various factors (liquidity, leverage, etc.), the Company believes asset quality is acceptable and is deemed to not require additional monitoring by the Company.

Special mention (risk rating 6): Assets in this category are currently protected, potentially weak, but not to the point of substandard classification. Loss potential is moderate if corrective action is not taken.

Substandard accrual (risk rating 7): Assets in this category have well defined weaknesses that jeopardize the liquidation of the debt. Loss potential is distinct but with no discernible impairment.

Substandard nonaccrual/doubtful (risk rating 8 and 9): Assets have all the weaknesses in those classified “substandard accrual” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, improbable.

Loss/fully charged-off (risk rating 10): Assets in this category are considered fully uncollectible. As such, these assets have no carrying balance on the Company's Consolidated Statements of Condition.

Early buy-out loans guaranteed by U.S. government agencies: These loans are measured at fair value and thus excluded from the measurement of the allowance for credit losses. Credit risk rating assigned to such loans are considered in the measurement

of fair value as well as related guarantees provided by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.

Generally, each loan officer is responsible for monitoring his or her loan portfolio, recommending a credit risk rating for each loan in his or her portfolio and ensuring the credit risk ratings are appropriate. These credit risk ratings are then ratified by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors including: a borrower’s financial strength, cash flow coverage, collateral protection and guarantees.

The Company’s Problem Loan Reporting system includes all such loans described above with credit risk ratings of 6 through 9. This system is designed to provide an on-going detailed tracking mechanism for each problem loan. Once management determines that a loan has deteriorated to a point where it has a credit risk rating of 6 or worse, the Company’s Managed Asset Division performs an overall credit and collateral review. As part of this review, all underlying collateral is identified and the valuation methodology is analyzed and tracked. As a result of this initial review by the Company’s Managed Asset Division, the credit risk rating is reviewed and a portion of the outstanding loan balance may be deemed uncollectible and, as a result, no longer share similar risk characteristics as its related pool. If that is the case, the individual loan is considered collateral dependent and individually assessed for an allowance for credit loss. The Company’s individual assessment utilizes an independent re-appraisal of the collateral (unless such a third-party evaluation is not possible due to the unique nature of the collateral, such as a closely-held business or thinly traded securities). In the case of commercial real estate collateral, an independent third party appraisal is ordered by the Company’s Real Estate Services Group to determine if there has been any change in the underlying collateral value. These independent appraisals are reviewed by the Real Estate Services Group and sometimes by independent third party valuation experts and may be adjusted depending upon market conditions.

Through the credit risk rating process, such loans are reviewed to determine if they are performing in accordance with the original contractual terms. If the borrower has failed to comply with the original contractual terms, further action may be required by the Company, including a downgrade in the credit risk rating, movement to non-accrual status or a charge-off. If the Company determines that a loan amount or portion thereof is uncollectible, the loan’s credit risk rating is immediately downgraded to an 8 or 9 and the uncollectible amount is charged off. Any loan that has a partial charge-off continues to be assigned a credit risk rating of an 8 or 9 for the duration of time that a balance remains outstanding. The Company undertakes a thorough and ongoing analysis to determine if additional impairment and/or charge-offs are appropriate and to begin a workout plan for the credit to minimize actual losses. In determining the appropriate charge-off for collateral-dependent loans, the Company considers the results of appraisals for the associated collateral.

The table below shows the Company’s loan portfolio by credit quality indicator and year of origination at December 31, 2025:


As of December 31, 2025	Year of Origination														Revolving		Total
(In thousands)	2025		2024		2023		2022		2021		Prior		Revolving		to Term		Loans
Loan Balances:
Commercial, industrial and other
Pass	$	3,720,058	$	2,692,642	$	1,604,743	$	1,059,564	$	775,585	$	1,086,890	$	5,557,016	$	43,490	$	16,539,988
Special mention	31,571		31,629		34,593		12,766		11,067		34,746		120,913		767		278,052
Substandard accrual	7,477		23,517		25,706		21,069		20,639		3,322		45,083		1,774		148,587
Substandard nonaccrual/doubtful	5,006		6,635		6,196		28,155		25,238		3,101		2,094		1,634		78,059
Total commercial, industrial and other	$	3,764,112	$	2,754,423	$	1,671,238	$	1,121,554	$	832,529	$	1,128,059	$	5,725,106	$	47,665	$	17,044,686






Construction and development
Pass	$	360,765	$	603,682	$	520,694	$	524,644	$	28,674	$	104,220	$	13,947	$	824	$	2,157,450
Special mention	—		—		49,398		131,923		—		15,736		—		—		197,057
Substandard accrual	—		—		13,748		18,996		—		15,382		3,973		—		52,099
Substandard nonaccrual/doubtful	—		—		750		1,321		—		905		—		—		2,976
Total construction and development	$	360,765	$	603,682	$	584,590	$	676,884	$	28,674	$	136,243	$	17,920	$	824	$	2,409,582
Non-construction
Pass	$	2,279,126	$	1,341,928	$	1,207,171	$	1,741,249	$	1,261,008	$	3,104,804	$	202,614	$	1,947	$	11,139,847
Special mention	2,059		841		62,563		56,882		6,109		45,720		1,414		—		175,588
Substandard accrual	—		18,738		29,242		54,800		54,390		34,571		1,807		—		193,548
Substandard nonaccrual/doubtful	—		—		4,471		305		—		17,395		—		—		22,171
Total non-construction	$	2,281,185	$	1,361,507	$	1,303,447	$	1,853,236	$	1,321,507	$	3,202,490	$	205,835	$	1,947	$	11,531,154
Home equity
Pass	$	—	$	223	$	197	$	144	$	277	$	13,241	$	439,150	$	11,928	$	465,160
Special mention	—		60		100		219		—		2,190		5,941		155		8,665


Substandard accrual	—		—		15		19		91		3,051		2,268		35		5,479
Substandard nonaccrual/doubtful	—		—		—		188		129		904		—		—		1,221
Total home equity	$	—	$	283	$	312	$	570	$	497	$	19,386	$	447,359	$	12,118	$	480,525
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies	$	746	$	8,415	$	9,087	$	7,468	$	6,250	$	113,827	$	—	$	—	$	145,793
Pass	1,118,444		726,637		395,578		748,133		705,103		409,071		—		—		4,102,966
Special mention	506		2,020		6,167		5,020		3,008		7,423		—		—		24,144
Substandard accrual	28		135		813		3,821		2,806		3,864		—		—		11,467
Substandard nonaccrual/doubtful	266		3,738		6,021		9,501		5,732		7,604		—		—		32,862
Total residential real estate	$	1,119,990	$	740,945	$	417,666	$	773,943	$	722,899	$	541,789	$	—	$	—	$	4,317,232
Premium finance receivables - property & casualty
Pass	$	8,012,676	$	22,018	$	1,595	$	559	$	686	$	—	$	—	$	—	$	8,037,534
Special mention	102,258		1,039		19		—		—		—		—		—		103,316
Substandard accrual	12,811		399		—		1		1		—		—		—		13,212
Substandard nonaccrual/doubtful	24,836		4,499		16		2		1		—		—		—		29,354
Total premium finance receivables - property & casualty	$	8,152,581	$	27,955	$	1,630	$	562	$	688	$	—	$	—	$	—	$	8,183,416
Premium finance receivables - life
Pass	$	592,387	$	786,884	$	547,682	$	767,847	$	1,091,295	$	5,237,547	$	—	$	—	$	9,023,642
Special mention	—		—		—		—		—		—		—		—		—
Substandard accrual	—		—		—		—		—		—		—		—		—
Substandard nonaccrual/doubtful	—		—		—		—		—		—		—		—		—
Total premium finance receivables - life	$	592,387	$	786,884	$	547,682	$	767,847	$	1,091,295	$	5,237,547	$	—	$	—	$	9,023,642
Consumer and other
Pass	$	5,905	$	2,095	$	1,707	$	258	$	588	$	24,935	$	78,989	$	—	$	114,477
Special mention	102		15		30		82		—		108		13		—		350
Substandard accrual	2		6		—		—		—		12		9		—		29
Substandard nonaccrual/doubtful	—		8		—		—		—		—		—		—		8
Total consumer and other	$	6,009	$	2,124	$	1,737	$	340	$	588	$	25,055	$	79,011	$	—	$	114,864
Total loans
Early buy-out loans guaranteed by U.S. government agencies	$	746	$	8,415	$	9,087	$	7,468	$	6,250	$	113,827	$	—	$	—	$	145,793
Pass	16,089,361		6,176,109		4,279,367		4,842,398		3,863,216		9,980,708		6,291,716		58,189		51,581,064
Special mention	136,496		35,604		152,870		206,892		20,184		105,923		128,281		922		787,172
Substandard accrual	20,318		42,795		69,524		98,706		77,927		60,202		53,140		1,809		424,421
Substandard nonaccrual/doubtful	30,108		14,880		17,454		39,472		31,100		29,909		2,094		1,634		166,651
Total loans	$	16,277,029	$	6,277,803	$	4,528,302	$	5,194,936	$	3,998,677	$	10,290,569	$	6,475,231	$	62,554	$	53,105,101
Gross write offs
Three months ended December 31, 2025	$	8,981	$	1,616	$	1,711	$	2,311	$	5,954	$	6,503	$	—	$	—	$	27,076
Twelve months ended December 31, 2025	17,690		16,913		6,957		10,440		20,147		19,719		—		—		91,866

Held-to-maturity debt securities

The Company conducts an assessment of its investment securities, including those classified as held-to-maturity, at the time of purchase and on at least an annual basis to ensure such investment securities remain within appropriate levels of risk and continue to perform satisfactorily in fulfilling its obligations. The Company considers, among other factors, the nature of the securities and credit ratings or financial condition of the issuer. If available, the Company obtains a credit rating for issuers from a Nationally Recognized Statistical Rating Organization (“NRSRO”) for consideration. If no such rating is available for an issuer, the Company performs an internal rating based on the scale utilized within the loan portfolio as discussed above. For purposes of the table below, the Company has converted any issuer rating from an NRSRO into the Company’s internal ratings based on Investment Policy and review by the Company’s management.


As of December 31, 2025	Year of Origination												Total
(In thousands)	2025		2024		2023		2022		2021		Prior		Balance
Amortized Cost Balances:
U.S. government agencies
1-4 internal grade	$	—	$	—	$	—	$	135,000	$	147,830	$	30,711	$	313,541
5-7 internal grade	—		—		—		—		—		—		—
8-10 internal grade	—		—		—		—		—		—		—
Total U.S. government agencies	$	—	$	—	$	—	$	135,000	$	147,830	$	30,711	$	313,541
Municipal
1-4 internal grade	$	—	$	—	$	4,092	$	1,027	$	6,718	$	130,468	$	142,305
5-7 internal grade	—		—		—		—		—		1,887		1,887
8-10 internal grade	—		—		—		—		—		—		—
Total municipal	$	—	$	—	$	4,092	$	1,027	$	6,718	$	132,355	$	144,192
Mortgage-backed securities
1-4 internal grade	$	—	$	—	$	273,577	$	480,317	$	2,097,441	$	—	$	2,851,335
5-7 internal grade	—		—		—		—		—		—		—
8-10 internal grade	—		—		—		—		—		—		—
Total mortgage-backed securities	$	—	$	—	$	273,577	$	480,317	$	2,097,441	$	—	$	2,851,335
Corporate notes
1-4 internal grade	$	—	$	—	$	—	$	4,973	$	—	$	30,124	$	35,097
5-7 internal grade	—		—		—		—		—		—		—
8-10 internal grade	—		—		—		—		—		—		—
Total corporate notes	$	—	$	—	$	—	$	4,973	$	—	$	30,124	$	35,097
Total held-to-maturity securities													$	3,344,165
Less: Allowance for credit losses													(260)
Held-to-maturity securities, net of allowance for credit losses													$	3,343,905

Measurement of Allowance for Credit Losses

The Company’s allowance for credit losses consists of the allowance for loan losses, the allowance for unfunded commitment losses and the allowance for held-to-maturity debt security losses. In accordance with ASC 326, the Company measures the allowance for credit losses at the time of origination or purchase of a financial asset, representing an estimate of lifetime expected credit losses on the related asset. When developing its estimate, the Company considers available information relevant to assessing the collectability of cash flows, from both internal and external sources. Historical credit loss experience is one input in the estimation process as well as inputs relevant to current conditions and reasonable and supportable forecasts. In considering past events, the Company considers the relevance, or lack thereof, of historical information due to changes in such things as financial asset underwriting or collection practices, and changes in portfolio mix due to changing business plans and strategies. In considering current conditions and forecasts, the Company considers both the current economic environment and the forecasted direction of the economic environment with emphasis on those factors deemed relevant to or driving changes in expected credit losses. As significant judgment is required, the review of the appropriateness of the allowance for credit losses is performed quarterly by various committees with participation by the Company’s executive management.


	December 31,		December 31,
(In thousands)	2025		2024





Allowance for loan losses	$	379,283	$	364,017
Allowance for unfunded lending-related commitments losses	80,922		72,586
Allowance for loan losses and unfunded lending-related commitments losses	460,205		436,603
Allowance for held-to-maturity securities losses	260		457
Allowance for credit losses	$	460,465	$	437,060

The allowance for credit losses is measured on a collective or pooled basis when similar risk characteristics exist, based upon the segmentation discussed above. The Company utilizes modeling methodologies that estimate lifetime credit loss rates on each pool. These methodologies include estimating the probability of default and loss given default on the commercial and commercial real estate segments, using the weighted-average remaining maturity methodology for the residential real estate, home equity, and consumer segments, and utilizing an assumption-based approach focusing on historical loss rates for the premium finance receivables segments. Historical credit loss history is adjusted for reasonable and supportable forecasts developed by the Company on a quantitative or qualitative basis and incorporates third party economic forecasts. Reasonable and supportable forecasts consider the macroeconomic factors that are most relevant to evaluating and predicting expected credit losses in the Company's financial assets. Currently, the Company utilizes an eight quarter forecast period using a single

macroeconomic scenario provided by a third party and reviewed within the Company's governance structure. For periods beyond the ability to develop reasonable and supportable forecasts, the Company reverts to historical loss rates at an input level, straight-line over a four quarter reversion period. Expected credit losses are measured over the contractual term of the financial asset with consideration of expected prepayments. Expected extensions, renewals or modifications of the financial asset are considered when the expected extension, renewal or modification is contained within the existing agreement and is not unconditionally cancelable. The methodologies discussed above are applied to both current asset balances on the Company's Consolidated Statements of Condition and off-balance sheet commitments (i.e. unfunded lending-related commitments).

Assets that do not share similar risk characteristics with a pool are assessed for the allowance for credit losses on an individual basis. These typically include assets experiencing financial difficulties, including assets rated as substandard nonaccrual and doubtful. If foreclosure is probable or the asset is considered collateral-dependent, expected credit losses are measured based upon the fair value of the underlying collateral, adjusted for selling costs, if appropriate. Underlying collateral across the Company’s segments consist primarily of real estate, land and construction assets, as well as general business assets of the borrower. As of December 31, 2025, excluding loans carried at fair value, substandard nonaccrual loans totaling $72.9 million in carrying balance had no related allowance for credit losses.

The Company does not measure an allowance for credit losses on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when assets are placed on nonaccrual status.

A summary of the activity in the allowance for credit losses by loan portfolio (i.e. allowance for loan losses and allowance for unfunded commitment losses) for the years ended December 31, 2025 and 2024 is as follows:


Year Ended December 31, 2025 (In thousands)	Commercial		Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivable		Consumer and Other		Total Loans

Allowance for credit losses at beginning of period	$	175,837	$	222,856	$	8,943	$	10,335	$	17,820	$	812	436,603


Other adjustments			—		—		—		167		—		167

Charge-offs	(50,361)		(11,934)		(138)		(26)		(28,704)		(703)		(91,866)
Recoveries	5,080		267		378		140		13,556		130		19,551
Provision for credit losses - other	47,989		35,744		1,219		2,070		8,172		556		95,750


Allowance for credit losses at period end	$	178,545	$	246,933	$	10,402	$	12,519	$	11,011	$	795	$	460,205
By measurement method:
Individually evaluated for impairment	$	19,054	$	4,890	$	—	$	120			$	8	$	24,072
Collectively evaluated for impairment	159,491		242,043		10,402		12,399		11,011		787		436,133

Loans at period end:
Individually evaluated for impairment	$	78,059	$	25,147	$	1,221	$	32,774	$	—	$	8	$	137,209
Collectively evaluated for impairment	16,966,627		13,915,589		479,304		4,132,868		17,207,058		114,856		52,816,302

Loans held at fair value	—		—		—		151,590		—		—		151,590


Year Ended December 31, 2024 (In thousands)	Commercial		Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivable		Consumer and Other		Total Loans
Allowance for credit losses at beginning of period	$	169,604	$	223,853	$	7,116	$	13,133	$	13,069	$	490	$	427,265


Other adjustments	—		—		—		—		(207)		—		(207)

Charge-offs	(48,864)		(22,127)		(74)		(175)		(37,519)		(587)		(109,346)
Recoveries	2,853		323		359		15		11,313		87		14,950
Provision for credit losses	47,439		9,164		196		(3,337)		31,164		764		85,390
Provision for credit losses - Day 1 on non-PCD assets acquired during the period	2,967		10,540		1,344		638		—		58		15,547
Initial allowance for credit losses recognized on PCD assets acquired during the period	1,838		1,103		2		61		—		—		3,004
Allowance for loan losses at period end	$	175,837	$	222,856	$	8,943	$	10,335	$	17,820	$	812	436,603


By measurement method:
Individually evaluated for impairment	$	27,894	$	6,768	$	50	$	44	$	—	$	1	$	34,757
Collectively evaluated for impairment	147,943		216,088		8,893		10,291		17,820		811		401,846

Loans at period end:
Individually evaluated for impairment	$	73,490	$	21,042	$	1,117	$	23,674	$	—	$	2	$	119,325
Collectively evaluated for impairment	15,501,061		12,882,902		443,911		3,430,296		15,419,187		99,560		47,776,917

Loan held at fair value	—		—		—		158,795		—		—		158,795

For the year ended December 31, 2025, the Company recognized an approximately $95.8 million provision for credit losses related to loans and lending agreements. Excluding acquisitions in 2024, the increased provision compared to December 31, 2024 was primarily the result of loan growth across the various portfolios coupled with slight deterioration in the Company’s macroeconomic forecasts related to the key model input of Commercial Real Estate Price Index, partially offset by improvement in the key model input of Baa Credit Spreads. While uncertainties remain regarding expected economic performance, macroeconomic forecasts as of December 31, 2025 assume that the impact of those uncertainties is less severe compared to that assumed at December 31, 2024. Other key drivers of provision for credit losses in these portfolios include, but are not limited to, loan risk rating migration, qualitative overlays, and net charge-offs in 2025 which totaled $72.3 million.

Held-to-maturity debt securities

The allowance for credit losses on the Company’s held-to-maturity debt securities is presented as a reduction to the amortized cost basis of held-to-maturity securities on the Company’s Consolidated Statements of Condition. For the years ended December 31, 2025 and December 31, 2024, the Company recognized approximately $(196,000) and $110,000, respectively, of provision for credit losses related to held-to-maturity securities. At December 31, 2025 and December 31, 2024, the Company did not identify any held-to-maturity debt securities within its portfolio that would require a charge-off.

Loan Modifications to Borrowers Experiencing Financial Difficulties

The Company’s approach to restructuring or modifying loans is built on its credit risk rating system, which requires credit management personnel to assign a credit risk rating to each loan. In each case, the loan officer is responsible for recommending a credit risk rating for each loan and ensuring the credit risk ratings are appropriate. These credit risk ratings are then reviewed and approved by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors, including a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s credit risk rating scale is one through ten with higher scores indicating higher risk. In the case of loans rated six or worse following modification, the Company’s Managed Assets Division evaluates the loan and the credit risk rating and determines that the loan has been restructured to be reasonably assured of repayment and of performance according to the modified terms and is supported by a current, well-documented credit assessment of the borrower’s financial condition and prospects for repayment under the revised terms. Based on the Company’s credit risk rating system, it considers that borrowers whose credit risk rating is 5 or better are not experiencing financial difficulties.

Restructurings may arise when, due to financial difficulties experienced by the borrower, the Company obtains through physical possession one or more collateral assets in satisfaction of all or part of an existing credit. Once possession is obtained, the Company reclassifies the appropriate portion of the remaining balance of the credit from loans to other real estate owned (“OREO”), which is included within other assets in the Consolidated Statements of Condition. For any residential real estate property collateralizing a consumer mortgage loan, the Company is considered to possess the related collateral only if legal title is obtained upon completion of foreclosure, or the borrower conveys all interest in the residential real estate property to the Company through completion of a deed in lieu of foreclosure or similar legal agreement. At December 31, 2025, the Company had no foreclosed residential real estate properties included within OREO. Further, the recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $69.2 million and $38.2 million at December 31, 2025 and 2024, respectively.

The tables below presents a summary of the balance immediately following the modification of loans to borrowers experiencing financial difficulties during the years ended December 31, 2025 and 2024:


Year Ended December 31, 2025 (Dollars in thousands)	Total		Percentage of Total Class of Loan		Extension of Term		Reduction of Interest Rate		Interest Only Payments		Delay in Contractual Payments		Extension of Term and Reduction of Interest Rate

Commercial	$	38,113	0.5	%	$	14,883	$	8	$	501	$	22,043	$	678
Commercial real estate

Non-construction	358		0.0		358		—		—		—		—
Home equity	121		0.0		—		—		—		—		121
Residential real estate	1,876		0.0		568		271		—		238		799

Total loans	$	40,468	0.1	%	$	15,809	$	279	$	501	$	22,281	$	1,598


			Weighted Average Magnitude of Modifications:
Year Ended December 31, 2025 (Dollars in thousands)	Total		Duration of Extension of Term (months)	Reduction of Interest Rate (bps)	Duration of Delay in Contractual Payments (months)

Commercial	$	38,113	13	156	3
Commercial real estate

Non-construction	358		22	—	—
Home equity	121		12	125	—
Residential real estate	1,876		49	131	483

Total loans	$	40,468	17	140	8


Year Ended December 31, 2024 (Dollars in thousands)	Total		Percentage of Total Class of Loan		Extension of Term		Reduction of Interest Rate		Interest Only Payments		Delay in Contractual Payments		Extension of Term and Reduction of Interest Rate

Commercial	$	11,531	0.1	%	$	9,516	$	9	$	17	$	81	$	1,908
Commercial real estate
Construction and development	701		0.0		701		—		—		—		—
Non-construction	813		0.0		493		—		320		—		—
Home equity	86		0.0		86		—		—		—		—
Residential real estate	166		0.0		—		166		—		—		—
Premium finance receivables—property & casualty	1,226		0.0		96		1,103		—		—		27
Total loans	$	14,523	0.0	%	$	10,892	$	1,278	$	337	$	81	$	1,935


			Weighted Average Magnitude of Modifications:
Year Ended December 31, 2024 (Dollars in thousands)	Total		Duration of Extension of Term (months)	Reduction of Interest Rate (bps)	Duration of Delay in Contractual Payments (months)

Commercial	$	11,531	10	80	34
Commercial real estate
Construction and development	701		13	—	—
Non-construction	813		8	—	—
Home equity	86		12	—	—
Residential real estate	166		—	201	—
Premium finance receivables—property & casualty	1,226		—	37	—
Total loans	$	14,523	9	74	34

The Company had commitments of $36.4 million and $20.9 million as of December 31, 2025 and December 31, 2024, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of principal forgiveness, an interest rate reduction, an other-than insignificant payment delay or a term extension during the periods presented.

The following table presents a summary of all modified loans for borrowers experiencing financial difficulties and such loans that were in payment default under the restructured terms during the respective periods below:


(Dollars in thousands)	Year Ended December 31, 2025		Year Ended December 31, 2025		Year Ended December 31, 2024		Year Ended December 31, 2024
	Total		Payments in Default (1)		Total		Payments in Default (1)
Commercial	$	38,113	$	653	$	11,531	$	995
Commercial real estate
Construction and development	—		—		701		—
Non-construction	358		179		813		319
Home equity	121		—		86		86
Residential real estate	1,876		914		166		166
Premium finance receivables—property & casualty	—		—		1,226		122
Total loans	$	40,468	$	1,746	$	14,523	$	1,688

(1)Modified loans considered to be in payment default are over 30 days past due subsequent to the restructuring.