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Loans, Allowance for Credit Losses and Credit Quality

9 Months Ended

Sep. 30, 2024

Loans, Allowance for Credit Losses and Credit Quality

LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

Loans Held for Investment and Allowance for Credit Losses

The following table summarizes the change in allowance for credit losses by loan category, and bifurcates the amount of loans allocated to each loan category for the period indicated:


	Three Months Ended September 30, 2024
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	20,884	$	80,501	$	7,804	$	4,059	$	24,836	$	11,755	$	1,020	$	150,859


Charge-offs	(5,886)		—		—		(163)		—		(38)		(919)		(7,006)
Recoveries	3		—		—		3		—		14		323		343
Provision for (release of) credit losses	936		19,121		(278)		206		(333)		(570)		418		19,500
Ending balance (1)	$	15,937	$	99,622	$	7,526	$	4,105	$	24,503	$	11,161	$	842	$	163,696

	Three Months Ended September 30, 2023
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	15,142	$	78,396	$	9,038	$	3,606	$	21,465	$	12,433	$	567	$	140,647
Charge-offs	—		(5,072)		—		(112)		—		—		(834)		(6,018)
Recoveries	111		—		—		35		—		12		282		440
Provision for (release of) credit losses	1,681		1,078		(208)		385		1,682		101		781		5,500
Ending balance (1)	$	16,934	$	74,402	$	8,830	$	3,914	$	23,147	$	12,546	$	796	$	140,569

	Nine Months Ended September 30, 2024
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	19,243	$	74,148	$	7,683	$	3,963	$	23,637	$	12,797	$	751	$	142,222
Charge-offs	(5,886)		—		—		(332)		—		(49)		(2,428)		(8,695)
Recoveries	90		—		—		54		—		295		980		1,419
Provision for (release of) credit losses	2,490		25,474		(157)		420		866		(1,882)		1,539		28,750
Ending balance (1)	$	15,937	$	99,622	$	7,526	$	4,105	$	24,503	$	11,161	$	842	$	163,696

	Nine Months Ended September 30, 2023
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	27,559	$	77,799	$	10,762	$	2,834	$	20,973	$	11,504	$	988	$	152,419


Charge-offs	(23,471)		(5,072)		—		(199)		—		—		(1,858)		(30,600)
Recoveries	132		—		—		74		—		38		756		1,000
Provision for (release of) credit losses	12,714		1,675		(1,932)		1,205		2,174		1,004		910		17,750
Ending balance (1)	$	16,934	$	74,402	$	8,830	$	3,914	$	23,147	$	12,546	$	796	$	140,569

(1)Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $55.3 million and $58.1 million as of September 30, 2024 and September 30, 2023, respectively.

The balance of allowance for credit losses increased to $163.7 million as of September 30, 2024 compared to $142.2 million at December 31, 2023, driven primarily by specific reserve allocations on certain commercial loans during the nine months ended September 30, 2024.

For the purpose of estimating the allowance for credit losses, management segregated the loan portfolio into the portfolio segments detailed in the above tables. Each of these loan categories possesses unique risk characteristics that are considered when determining the appropriate level of allowance for each segment. Some of the characteristics unique to each loan category include:

Commercial Portfolio

•Commercial and Industrial: Consists of revolving, nonrevolving, and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of accounts receivable, inventory, plant and equipment, real estate, or other business assets. The primary source of repayment is operating cash flow and, secondarily, liquidation of assets.

•Commercial Real Estate: Consists of mortgage loans to finance investment in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational and healthcare facilities, as well as other specific use properties and is inclusive of owner-occupied commercial properties. Loans are typically written with amortizing payment structures. Collateral values are determined based upon third party appraisals and evaluations. Permissible loan to value ratios at origination are governed by Company policy and regulatory guidelines. The primary source of repayment is cash flow from operating leases and rents and, secondarily, liquidation of assets.

•Commercial Construction: Consists of short-term construction loans, revolving and nonrevolving credit lines and construction/permanent loans to finance the acquisition, development and construction or rehabilitation of real property. Project types include residential land development, one-to-four family, condominium, and multi-family home construction, commercial/retail, office, industrial, hotels, educational and healthcare facilities as well as other specific use properties. Loans may be written with non-amortizing or hybrid payment structures depending upon the type of project. Collateral values are determined based upon third party appraisals and evaluations. Permissible loan to value ratios at origination are governed by Company policy and regulatory guidelines. Repayment sources vary depending upon the type of project and may consist of proceeds from the sale or lease of units, operating cash flows or liquidation of other assets.

•Small Business: Consists of revolving, term loan and mortgage obligations extended to sole proprietors and small businesses for purposes of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, or real estate if applicable. The primary source of repayment is operating cash flows and, secondarily, liquidation of assets.

For the commercial portfolio the Company typically obtains personal guarantees for payment from individuals holding material ownership interests in the borrowing entities.

Consumer Portfolio

•Residential Real Estate: Residential mortgage loans held in the Company’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral. Collateral consists of mortgage liens on one-to-four family residential properties. Residential mortgage loans also include loans to construct owner-occupied one-to-four family residential properties.

•Home Equity: Home equity loans and credit lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on one-to-four family homes, condominiums or vacation homes. Each home equity loan has a fixed rate and is billed in equal payments comprised of principal and interest. The majority of home equity lines of credit have a variable rate and are billed in interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the then outstanding principal balance plus all accrued interest over a predetermined repayment period, as set forth in the note. Additionally, the Company has the option of renewing each line of credit for additional draw periods. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established policy guidelines.

•Other Consumer: Other consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines. These loans may be secured or unsecured.

Credit Quality

The Company continually monitors the asset quality of the loan portfolio using all available information. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as adversely risk-rated, delinquent, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to modify the contractual terms of certain loans to match the borrower’s ability to repay the loan based on their current financial condition.

The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For the commercial portfolio, the Company utilizes a 10-point credit risk-rating system, which assigns a risk-grade to each loan obligation based on a number of quantitative and qualitative factors associated with a commercial or small business loan transaction. Factors considered include industry and market conditions, position within the industry, earnings trends, operating cash flow, asset/liability values, debt capacity, guarantor strength, management and controls, financial reporting, collateral, and other considerations. The risk-rating categories for the commercial portfolio are defined as follows:

•Pass: Risk-rating “1” through “6” comprises loans ranging from ‘Substantially Risk Free’ which indicates borrowers are of unquestioned credit standing and the pinnacle of credit quality, well established companies with a very strong financial condition, and loans fully secured by cash collateral, through ‘Acceptable Risk,’ which indicates borrowers may exhibit declining earnings, strained cash flow, increasing or above average leverage and/or weakening market fundamentals that indicate below average asset quality, margins and market share. Collateral coverage is protective.

•Special Mention: Borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Company’s asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.

•Substandard: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Loans may be inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. However, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.

•Doubtful: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.

•Loss: Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.

The Company utilizes a comprehensive, continuous strategy for evaluating and monitoring commercial credit quality. Initially, credit quality is determined at loan origination and is re-evaluated when subsequent actions, such as renewals, modifications or reviews, occur. Actively managed commercial borrowers are required to provide updated financial information at least annually which is carefully evaluated for any changes in credit quality. Larger loan relationships are subject to a full annual credit review by experienced credit professionals, while continuous portfolio monitoring techniques are employed to evaluate changes in credit quality for smaller loan relationships. Any changes in credit quality are reflected in risk-rating changes. Additionally, the Company retains an independent loan review firm to evaluate the credit quality of the commercial loan portfolio. The independent loan review process achieves significant penetration into the commercial loan portfolio and reports the results of these reviews to the Audit Committee of the Board of Directors on a quarterly basis.

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. As a result, for this portfolio the Company utilizes a pass/default risk-rating system, based on an age analysis (i.e., days past due) associated with each consumer loan. Under this structure, consumer loans less than 90 days past due are assigned a “pass” rating, while any consumer loans 90 days or more past due are assigned a “default” rating.

The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of the dates indicated below:


	September 30, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass	$	282,973	$	188,687	$	133,680	$	61,678	$	41,639	$	129,637	$	682,099	$	—	$	1,520,393
Special mention	11,775		194		946		346		—		113		4,702		—		18,076
Substandard	2,103		161		35		455		—		22		24,964		—		27,740
Doubtful	—		—		—		—		—		—		11,652		—		11,652
Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	296,851	$	189,042	$	134,661	$	62,479	$	41,639	$	129,772	$	723,417	$	—	$	1,577,861
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	5,886	$	—	$	5,886



Commercial real estate
Pass	$	744,344	$	1,053,780	$	1,179,121	$	1,256,074	$	1,151,010	$	2,298,419	$	96,822	$	1,116	$	7,780,686
Special mention	7,442		6,350		29,443		13,085		12,691		101,133		—		—		170,144
Substandard	32,609		13,017		25,442		29,264		31,070		6,076		—		—		137,478
Doubtful	—		54,637		—		11,660		—		7,415		—		—		73,712
Loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	784,395	$	1,127,784	$	1,234,006	$	1,310,083	$	1,194,771	$	2,413,043	$	96,822	$	1,116	$	8,162,020
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Commercial construction
Pass	$	140,421	$	176,796	$	218,298	$	89,854	$	—	$	24,783	$	27,213	$	902	$	678,267
Special mention	—		1,925		15,540		6,065		—		—		—		—		23,530
Substandard	31,125		—		9,120		—		—		—		—		—		40,245
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	171,546	$	178,721	$	242,958	$	95,919	$	—	$	24,783	$	27,213	$	902	$	742,042
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Small business
Pass	$	38,687	$	45,927	$	45,358	$	34,503	$	22,766	$	29,356	$	50,009	$	51	$	266,657
Special mention	—		104		27		174		—		224		784		—		1,313
Substandard	389		396		65		3		183		391		621		—		2,048
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total small business	$	39,076	$	46,427	$	45,450	$	34,680	$	22,949	$	29,971	$	51,414	$	51	$	270,018
Current-period gross write-offs	$	48	$	—	$	28	$	—	$	—	$	—	$	256	$	—	$	332



Residential real estate
Pass	$	134,868	$	482,280	$	615,795	$	387,127	$	177,583	$	640,992	$	—	$	—	$	2,438,645
Default	—		213		—		659		—		2,342		—		—		3,214

Total residential real estate	$	134,868	$	482,493	$	615,795	$	387,786	$	177,583	$	643,334	$	—	$	—	$	2,441,859
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Home equity
Pass	$	14,034	$	25,276	$	34,092	$	50,948	$	46,614	$	132,804	$	813,118	$	11,612	$	1,128,498
Default	—		—		—		—		—		170		1,532		235		1,937

Total home equity	$	14,034	$	25,276	$	34,092	$	50,948	$	46,614	$	132,974	$	814,650	$	11,847	$	1,130,435


Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	49	$	—	$	49



Other consumer (2)
Pass	$	559	$	486	$	159	$	703	$	300	$	1,279	$	33,071	$	—	$	36,557
Default	—		—		—		—		—		14		1		—		15

Total other consumer	$	559	$	486	$	159	$	703	$	300	$	1,293	$	33,072	$	—	$	36,572
Current-period gross write-offs	$	2,413	$	—	$	—	$	—	$	—	$	—	$	15	$	—	$	2,428

Total	$	1,441,329	$	2,050,229	$	2,307,121	$	1,942,598	$	1,483,856	$	3,375,170	$	1,746,588	$	13,916	$	14,360,807
Total current-period gross write-offs	$	2,461	$	—	$	28	$	—	$	—	$	—	$	6,206	$	—	$	8,695


	September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass	$	303,838	$	188,559	$	94,714	$	73,366	$	45,741	$	116,052	$	737,335	$	—	$	1,559,605
Special mention	6,511		2,417		614		10,278		90		132		46,706		—		66,748
Substandard	1,933		4,707		1,074		132		1,165		806		16,833		—		26,650
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	312,282	$	195,683	$	96,402	$	83,776	$	46,996	$	116,990	$	800,874	$	—	$	1,653,003
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	34	$	23,437	$	—	$	23,471

Commercial real estate
Pass	$	795,830	$	1,160,497	$	1,338,792	$	1,312,240	$	610,009	$	2,188,221	$	68,496	$	858	$	7,474,943
Special mention	62,572		37,695		57,987		14,662		2,945		118,830		—		—		294,691
Substandard	30,667		27,504		23,568		4,321		19,211		21,325		—		—		126,596
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	889,069	$	1,225,696	$	1,420,347	$	1,331,223	$	632,165	$	2,328,376	$	68,496	$	858	$	7,896,230
Current-period gross write-offs	$	—	$	5,072	$	—	$	—	$	—	$	—	$	—	$	—	$	5,072

Commercial construction
Pass	$	146,278	$	491,098	$	201,730	$	9,939	$	27,304	$	1,569	$	17,248	$	—	$	895,166
Special mention	13,484		—		4,823		—		—		—		—		—		18,307
Substandard	9,440		26,199		16,330		—		—		—		—		—		51,969
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	169,202	$	517,297	$	222,883	$	9,939	$	27,304	$	1,569	$	17,248	$	—	$	965,442
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Small business
Pass	$	40,551	$	52,883	$	40,706	$	26,759	$	13,759	$	23,458	$	43,759	$	—	$	241,875
Special mention	—		—		—		155		—		186		295		—		636
Substandard	429		324		126		295		—		615		1,035		—		2,824
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total small business	$	40,980	$	53,207	$	40,832	$	27,209	$	13,759	$	24,259	$	45,089	$	—	$	245,335
Current-period gross write-offs	$	—	$	—	$	22	$	37	$	—	$	—	$	140	$	—	$	199


Residential real estate
Pass	$	391,121	$	645,593	$	408,752	$	186,334	$	89,911	$	612,878	$	—	$	—	$	2,334,589
Default	219		—		393		135		942		1,824		—		—		3,513

Total residential real estate	$	391,340	$	645,593	$	409,145	$	186,469	$	90,853	$	614,702	$	—	$	—	$	2,338,102
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Home equity
Pass	$	21,729	$	39,251	$	56,216	$	50,724	$	30,039	$	126,897	$	765,079	$	4,190	$	1,094,125
Default	—		—		—		—		—		—		1,289		141		1,430

Total home equity	$	21,729	$	39,251	$	56,216	$	50,724	$	30,039	$	126,897	$	766,368	$	4,331	$	1,095,555
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other consumer (2)
Pass	$	538	$	320	$	1,370	$	912	$	410	$	2,154	$	24,843	$	—	$	30,547
Default	—		—		—		—		—		19		2		—		21

Total other consumer	$	538	$	320	$	1,370	$	912	$	410	$	2,173	$	24,845	$	—	$	30,568
Current-period gross write-offs	$	1,836	$	—	$	—	$	—	$	—	$	7	$	15	$	—	$	1,858

Total	$	1,825,140	$	2,677,047	$	2,247,195	$	1,690,252	$	841,526	$	3,214,966	$	1,722,920	$	5,189	$	14,224,235
Total current -period gross write-offs	$	1,836	$	5,072	$	22	$	37	$	—	$	41	$	23,592	$	—	$	30,600

(1)Loan origination dates in the tables above reflect the original origination date, or the date of a material modification of a previously originated loan.

(2)Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances and the associated gross write-offs.

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. However, the Company does supplement performance data with current Fair Isaac Corporation (“FICO”) scores and Loan to Value (“LTV”) estimates. Current FICO data is purchased and appended to all consumer loans on a regular basis. In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential real estate and home equity portfolios, periodically. The following table shows the weighted average FICO scores and the weighted average combined LTV ratios at the dates indicated below:


	September 30 2024		December 31 2023
Residential real estate portfolio
FICO score (re-scored)(1)	755		754
LTV (re-valued)(2)	57.9	%	59.8	%
Home equity portfolio
FICO score (re-scored)(1)	769		770
LTV (re-valued)(2)(3)	43.4	%	43.3	%

(1)The average FICO scores at September 30, 2024 are based upon rescores from September 2024 as available for previously originated loans, or origination score data for loans booked in September 2024. The average FICO scores at December 31, 2023 were based upon rescores available from December 2023, as available for previously originated loans, or origination score data for loans booked in December 2023.

(2)The combined LTV ratios for September 30, 2024 are based upon updated automated valuations as of August 2024, when available, and/or the most current valuation data available. The combined LTV ratios for December 31, 2023 were based upon updated automated valuations as of November 2023, when available, and/or the most current valuation data available as of such date. The updated automated valuations provide new information on loans that may be available since the previous valuation was obtained. If no new information is available, the valuation will default to the previously obtained data or most recent appraisal.

(3)For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.

Unfunded Commitments

Management evaluates the need for a reserve on unfunded lending commitments in a manner consistent with loans held for investment. At September 30, 2024 and December 31, 2023, the Company's estimated reserve for unfunded commitments amounted to $1.4 million and $1.5 million, respectively.

Asset Quality

The Company’s philosophy toward managing its loan portfolios is predicated upon careful monitoring, which stresses early detection and response to delinquent and default situations. Delinquent loans are managed by a team of collection specialists and the Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame. As a general rule, loans 90 days or more past due with respect to principal or interest are classified as nonaccrual loans. The Company also may use discretion regarding other loans 90 days or more delinquent if the loan is well secured and/or in process of collection.

The following table shows information regarding nonaccrual loans as of the dates indicated:


	Nonaccrual Balances
	September 30, 2024						December 31, 2023
	With Allowance for Credit Losses		Without Allowance for Credit Losses (1)		Total		With Allowance for Credit Losses		Without Allowance for Credit Losses (1)		Total
	(Dollars in thousands)
Commercial and industrial	$	375	$	11,652	$	12,027	$	19,890	$	298	$	20,188
Commercial real estate	77,951		—		77,951		11,911		11,041		22,952

Small business	501		—		501		394		4		398
Residential real estate	9,744		—		9,744		7,634		—		7,634
Home equity	3,992		—		3,992		3,171		—		3,171
Other consumer	33		—		33		40		—		40
Total nonaccrual loans	$	92,596	$	11,652	$	104,248	$	43,040	$	11,343	$	54,383

(1)Nonaccrual balances reported above without an allowance for credit losses are attributable to loans evaluated on an individual basis where it was determined that there was no risk of loss due to sufficient underlying collateral values, or reflect partially charged-off loans, with no risk of further loss.

It is the Company's policy to reverse any accrued interest when a loan is put on nonaccrual status, and, as such, the Company did not record any interest income on nonaccrual loans during the three and nine months ended September 30, 2024 and 2023, respectively, except for instances where nonaccrual loans were paid off in excess of the recorded book balance. Total accrued interest reversed against interest income amounted to $95,000 and $62,000 for the three months ended September 30, 2024 and 2023, respectively, and $594,000 and $487,000 for the nine months ended September 30, 2024 and 2023, respectively.

The following table shows information regarding foreclosed residential real estate property at the dates indicated:


	September 30, 2024		December 31, 2023
	(Dollars in thousands)
Foreclosed residential real estate property held by the creditor	$	110	$	110
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure	$	1,686	$	1,697

The following tables show the age analysis of past due financing receivables as of the dates indicated:


	September 30, 2024
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables (2)
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	3	$	200	—	$	—	5	$	12,005	8	$	12,205	$	1,565,656	$	1,577,861
Commercial real estate	5	1,839		3	2,056		3	20,657		11	24,552		8,137,468		8,162,020
Commercial construction	—	—		—	—		—	—		—	—		742,042		742,042
Small business	11	397		5	71		8	153		24	621		269,397		270,018
Residential real estate	19	3,624		8	1,597		9	1,617		36	6,838		2,435,021		2,441,859
Home equity	13	1,392		4	217		10	1,937		27	3,546		1,126,889		1,130,435
Other consumer (1)	421	264		7	24		2	15		430	303		36,269		36,572
Total	472	$	7,716	27	$	3,965	37	$	36,384	536	$	48,065	$	14,312,742	$	14,360,807


	December 31, 2023
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables (2)
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	6	$	398	1	$	17,538	2	$	673	9	$	18,609	$	1,561,377	$	1,579,986
Commercial real estate	8	14,674		2	8,419		3	7,279		13	30,372		8,011,136		8,041,508
Commercial construction	—	—		—	—		—	—		—	—		849,586		849,586
Small business	6	400		1	20		6	243		13	663		251,293		251,956
Residential real estate	24	6,216		7	2,187		13	1,573		44	9,976		2,414,778		2,424,754
Home equity	23	1,640		4	1,238		10	529		37	3,407		1,094,219		1,097,626
Other consumer (1)	413	288		14	31		6	8		433	327		32,327		32,654
Total	480	$	23,616	29	$	29,433	40	$	10,305	549	$	63,354	$	14,214,716	$	14,278,070

(1)Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

(2)The amount of net deferred costs on originated loans included in the ending balance was $6.2 million and $6.4 million at September 30, 2024 and December 31, 2023, respectively. Net unamortized discounts on acquired loans included in the ending balance were $8.3 million and $8.6 million at September 30, 2024 and December 31, 2023, respectively.

Loan Modifications

The following tables present the period end amortized cost basis of loans modified to borrowers experiencing financial difficulty during the periods indicated, disaggregated by class of financing receivable, type of modification granted and the financial effect of the modifications:


	Three Months Ended September 30, 2024
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	5,985	0.38	%	Added a weighted-average contractual term of 4 months to the life of the loans
Commercial real estate	4,507		0.06	%	Added a weighted-average contractual term of 5 months to the life of the loans





Total	$	10,492





























	Nine Months Ended September 30, 2024
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	8,368	0.53%		Added a weighted-average contractual term of 7 months to the life of the loans
Commercial real estate	37,380		0.46%		Added a weighted-average contractual term of 1 year to the life of the loans
Commercial construction	3,488		0.47%		Added a weighted-average contractual term of 10 months to the life of the loans

Residential real estate	297		0.01%		Extended the contractual term on one loan by 6.2 years


Total	$	49,533


Interest Rate Reduction



Small business	$	42	0.02%		Reduced contractual rate on one loan from 11.00% to 8.20%

Home equity	64		0.01%		Reduced contractual rate on one loan from 7.99% to 7.00%

Total	$	106


Term Extension and Interest Rate Reduction
Commercial and industrial	$	97	0.01%		Extended the contractual term on one loan by 1.5 years and reduced the interest rate from 10.10% to 7.20%


Small business	34		0.01%		Extended the contractual term on one loan by 2.5 years and reduced the interest rate from 10.25% to 6.50%

Home equity	69		0.01%		Extended the contractual term on one loan by 8.1 years and reduced the interest rate from 10.00% to 6.80%

Total	$	200

Other Than Insignificant Payment Delay
Commercial and industrial	$	1,809	0.11%		Modification was made with minimal financial effect
Commercial real estate	6,350		0.08%		Modification was made with minimal financial effect





Total	$	8,159
Total Outstanding Modified	$	57,998

	Three Months Ended September 30, 2023
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	7,915	0.48	%	Added a weighted-average contractual term of 2 months to the life of the loans
Commercial real estate	719		0.01	%	Added a weighted-average contractual term of 2.9 years to the life of the loans





Total	$	8,634










































	Nine Months Ended September 30, 2023
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	16,108	0.97	%	Added a weighted-average contractual term of 2 months to the life of the loans
Commercial real estate	19,180		0.24	%	Added a weighted-average contractual term of 1.8 years to the life of the loans
Commercial construction	2,369		0.25	%	Added a weighted-average contractual term of 2 months to the life of the loans
Small business	105		0.04	%	Added a weighted-average contractual term of 4.3 years to the life of the loans



Total	$	37,762











Other Than Insignificant Payment Delay
Commercial and industrial	$	2,805	0.17	%	Modification was made with minimal financial effect
Commercial real estate	7,013		0.09	%	Modification was made with minimal financial effect


Total	$	9,818

Term Extension and Interest Rate Reduction



Small business	$	44	0.02	%	Reduced the contractual interest rate on one loan from 10.00% to 6.50%; the financial effect of term extensions are included in term extension table shown above



Total	$	44

Term Extension and Other Than Insignificant Payment Delay
Commercial and industrial	$	1,965	0.12	%	The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect
Commercial real estate	6,857		0.09	%	The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect





Total	$	8,822
Total Outstanding Modified	$	56,446

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables depict the amortized cost and payment status of loans that were modified during the previous 12 months as of the periods indicated:


	September 30, 2024
	Payment Status (Amortized Cost Basis)
	Current		30-89 Days Past Due		90+ Days Past Due
	(Dollars in thousands)
Loan Type
Commercial and industrial	$	10,467	$	—	$	—
Commercial real estate	43,731		—		—
Commercial construction	3,488		—		—
Small business	146		34		—
Residential real estate	297		—		—
Home equity	133		—		—

Total	$	58,262	$	34	$	—

	September 30, 2023
	Payment Status (Amortized Cost Basis)
	Current		30-89 Days Past Due		90+ Days Past Due
	(Dollars in thousands)
Loan Type
Commercial and industrial	$	7,409	$	504	$	—
Commercial real estate	16,252		660		—

Small business	140		—		—



Total	$	23,801	$	1,164	$	—

The Company considers a loan to have defaulted when it reaches 90 days past due. At September 30, 2024, there were no loans modified to borrowers experiencing financial difficulty during the previous 12 months that subsequently defaulted during the three or nine months then ended. During the three and nine months ended September 30, 2023, there was one commercial real estate loan that had a payment default and was modified within the previous 12 months as a combination term extension and other-than-insignificant payment delay, which had an amortized cost basis of $6.7 million.

At both September 30, 2024 and September 30, 2023, the Company had no additional commitments to lend to borrowers experiencing financial difficulty whose loans were modified and included in the above tables for the three and nine months then ended.

Loan modifications to borrowers experiencing financial difficulty are evaluated on a collective basis with loans sharing similar risk characteristics in accordance with the current expected credit loss ("CECL") methodology.