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Note 8 - Loans | 3 Months Ended
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Mar. 31, 2025
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 8. Loans Most of the Company’s business activities are with clients located in the high-density Asian-populated areas of Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; and Las Vegas, Nevada. The Company also has loan clients in Hong Kong. The Company has no specific industry concentration, and generally its loans, when secured, are secured by real property or other collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, from refinancing by other lenders, or through sale by the borrowers of the secured collateral. The types of loans in the Company’s Consolidated Balance Sheets as of March 31, 2025, and December 31, 2024, were as follows:
|  | March 31, 2025 |  |  | December 31, 2024 |
|  | (In thousands) |
Commercial loans |  | $ | 2,998,423 |  |  | $ | 3,098,004 |
Construction loans |  |  | 332,729 |  |  |  | 319,649 |
Commercial real estate loans |  |  | 10,160,934 |  |  |  | 10,033,830 |
Residential mortgage loans |  |  | 5,623,564 |  |  |  | 5,689,097 |
Equity lines |  |  | 231,184 |  |  |  | 229,995 |
Installment and other loans |  |  | 6,169 |  |  |  | 5,380 |
Gross loans |  | $ | 19,353,003 |  |  | $ | 19,375,955 |
Allowance for loan losses |  |  | (173,936 | ) |  |  | (161,765 | )
Unamortized deferred loan fees, net |  |  | (11,657 | ) |  |  | (10,541 | )
Total loans held for investment, net |  | $ | 19,167,410 |  |  | $ | 19,203,649 |
Loans held for sale |  | $ | 11,759 |  |  | $ | — |
As of March 31, 2025, and December 31, 2024, recorded investment in non-accrual loans was $154.6 million and $169.2 million, respectively. For non-accrual loans, the amounts previously charged-off represent 11.9% and 11.8% of the contractual balances for non-accrual loans as of March 31, 2025, and December 31, 2024, respectively. The following table presents non-accrual loans and the related allowance as of March 31, 2025, and December 31, 2024.
|  | March 31, 2025 |
|  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |
|  | (In thousands) |
With no allocated allowance: |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 50,294 |  |  | $ | 47,257 |  |  | $ | — |
Commercial real estate loans |  |  | 91,320 |  |  |  | 76,622 |  |  |  | — |
Residential mortgage loans and equity lines |  |  | 17,620 |  |  |  | 17,136 |  |  |  | — |
Subtotal |  | $ | 159,234 |  |  | $ | 141,015 |  |  | $ | — |
With allocated allowance: |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 18,794 |  |  | $ | 6,105 |  |  | $ | 2,423 |
Commercial real estate loans |  |  | 187 |  |  |  | 180 |  |  |  | 1 |
Residential mortgage loans and equity lines |  |  | 7,980 |  |  |  | 7,326 |  |  |  | 29 |
Subtotal |  | $ | 26,961 |  |  | $ | 13,611 |  |  | $ | 2,453 |
Total non-accrual loans |  | $ | 186,195 |  |  | $ | 154,626 |  |  | $ | 2,453 |
|  | December 31, 2024 |
|  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |
|  | (In thousands) |
With no allocated allowance: |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 56,022 |  |  | $ | 53,499 |  |  | $ | — |
Commercial real estate loans |  |  | 100,316 |  |  |  | 82,936 |  |  |  | — |
Residential mortgage loans and equity lines |  |  | 19,340 |  |  |  | 18,831 |  |  |  | — |
Subtotal |  | $ | 175,678 |  |  | $ | 155,266 |  |  | $ | — |
With allocated allowance: |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 18,769 |  |  | $ | 6,267 |  |  | $ | 1,208 |
Commercial mortgage loans |  |  | 194 |  |  |  | 193 |  |  |  | 1 |
Residential mortgage loans and equity lines |  |  | 7,786 |  |  |  | 7,435 |  |  |  | 29 |
Subtotal |  | $ | 26,749 |  |  | $ | 13,895 |  |  | $ | 1,238 |
Total non-accrual loans |  | $ | 202,427 |  |  | $ | 169,161 |  |  | $ | 1,238 |
The following tables present the average recorded investment and interest income recognized on non-accrual loans for the period indicated:
|  | Three Months Ended |
|  | March 31, 2025 |
|  | Average Recorded Investment |  |  | Interest Income Recognized |
|  | (In thousands) |
Commercial loans |  | $ | 56,112 |  |  | $ | 4 |
Commercial real estate loans |  |  | 83,678 |  |  |  | — |
Residential mortgage loans and equity lines |  |  | 28,651 |  |  |  | — |
Total non-accrual loans |  | $ | 168,441 |  |  | $ | 4 |
|  | Three Months Ended |
|  | March 31, 2024 |
|  | Average Recorded Investment |  |  | Interest Income Recognized |
|  | (In thousands) |
Commercial loans |  | $ | 15,097 |  |  | $ | 3 |
Construction loans |  |  | 28,099 |  |  |  | — |
Commercial real estate loans |  |  | 43,871 |  |  |  | 48 |
Residential mortgage loans and equity lines |  |  | 14,169 |  |  |  | — |
Total non-accrual loans |  | $ | 101,236 |  |  | $ | 51 |
The following tables present the aging of the loan portfolio by type as of March 31, 2025, and as of December 31, 2024:
|  | March 31, 2025 |
|  | Accruing |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or More Past Due |  |  | Non-accrual Loans |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |
|  | (In thousands) |
Type of Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 71,018 |  |  | $ | 294 |  |  | $ | 595 |  |  | $ | 53,362 |  |  | $ | 125,269 |  |  | $ | 2,873,154 |  |  | $ | 2,998,423 |
Construction loans |  |  | 13,806 |  |  |  | 7,813 |  |  |  | — |  |  |  | — |  |  |  | 21,619 |  |  |  | 311,110 |  |  |  | 332,729 |
Commercial real estate loans |  |  | 57,707 |  |  |  | 7,832 |  |  |  | — |  |  |  | 76,802 |  |  |  | 142,341 |  |  |  | 10,018,593 |  |  |  | 10,160,934 |
Residential mortgage loans and equity lines |  |  | 35,413 |  |  |  | 2,904 |  |  |  | — |  |  |  | 24,462 |  |  |  | 62,779 |  |  |  | 5,791,969 |  |  |  | 5,854,748 |
Installment and other loans |  |  | 200 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 200 |  |  |  | 5,969 |  |  |  | 6,169 |
Total loans |  | $ | 178,144 |  |  | $ | 18,843 |  |  | $ | 595 |  |  | $ | 154,626 |  |  | $ | 352,208 |  |  | $ | 19,000,795 |  |  | $ | 19,353,003 |
|  | December 31, 2024 |
|  | Accruing |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or More Past Due |  |  | Non-accrual Loans |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |
|  | (In thousands) |
Type of Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 25,164 |  |  | $ | 275 |  |  | $ | 2,590 |  |  | $ | 59,767 |  |  | $ | 87,796 |  |  | $ | 3,010,208 |  |  | $ | 3,098,004 |
Construction loans |  |  | 5,334 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,334 |  |  |  | 314,315 |  |  |  | 319,649 |
Commercial real estate loans |  |  | 16,525 |  |  |  | 13,934 |  |  |  | 1,460 |  |  |  | 83,128 |  |  |  | 115,047 |  |  |  | 9,918,783 |  |  |  | 10,033,830 |
Residential mortgage loans and equity lines |  |  | 39,018 |  |  |  | 6,651 |  |  |  | — |  |  |  | 26,266 |  |  |  | 71,935 |  |  |  | 5,847,157 |  |  |  | 5,919,092 |
Installment and other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,380 |  |  |  | 5,380 |
Total loans |  | $ | 86,041 |  |  | $ | 20,860 |  |  | $ | 4,050 |  |  | $ | 169,161 |  |  | $ | 280,112 |  |  | $ | 19,095,843 |  |  | $ | 19,375,955 |
The Company has adopted ASU 2022-02, "Financial Instruments – Troubled Debt Restructurings ("TDR") and Vintage Disclosures". The Company has elected to apply the guidance prospectively and the practical expedient to exclude the accrued interest receivable balance from the disclosed amortized cost basis of loan modifications to debtors experiencing financial difficulty, consistent with our Allowance for Credit Losses ("ACL") approach discussed further below in this footnote. Under this guidance on loan modifications made to borrowers experiencing financial difficulty, when a loan held for investment is modified and is considered to be a continuation of the original loan, the Company uses the post-modification contractual rate to derive the effective interest rate when using a discounted cash flow method to determine the allowance for credit loss. The amendments in this guidance require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan. The Company establishes a specific reserve for individually evaluated loans that do not share similar risk characteristics with the loans included in the quantitative baseline. These individually evaluated loans are removed from the pooling approach for the quantitative baseline, and include non-accrual loans, loan modifications made to borrowers experiencing financial difficulty, and other loans as deemed appropriate by management. The Company applies the loan refinancing and restructuring guidance provided in ASU 2022-02 to determine whether a modification made to a borrower results in a new loan or a continuation of an existing loan. If economic conditions or other factors worsen relative to the assumptions the Company utilized, the expected loan losses will increase accordingly in future periods. The following table presents the amortized cost of loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable and type of concession granted and the financial effects of the modifications for the three months ended March 31, 2025, and March 31, 2024, by loan class and modification type.
|  | Three Months Ended March 31, 2025 |  |  |  |  |  |  | Financial Effects of Loan Modifications |
|  | Term Extension |  |  | Payment Delay |  |  | Combo-Rate Reduction/Term Extension/Payment Delay |  |  | Total |  |  | Modification as a % of Loan Class |  |  | Weighted-Average Change in Rate |  |  | Weighted-Average Term Extension (in Years) |  |  | Weighted-Average Payment Deferral (in Years) |
|  | (In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 5,431 |  |  | $ | 130 |  |  | $ | 974 |  |  | $ | 6,535 |  |  |  | 0.22 | % |  |  | 0.92 |  |  |  | 1.9 |  |  |  | 0.1 |
Commercial mortgage loans |  |  | — |  |  |  | — |  |  |  | 3,201 |  |  |  | 3,201 |  |  |  | 0.03 | % |  |  | 0.86 |  |  |  | 1.7 |  |  |  | 1.7 |
Residential mortgage loans |  |  | — |  |  |  | 217 |  |  |  | — |  |  |  | 217 |  |  |  | 0.00 | % |  |  | 0.00 |  |  |  | 0.0 |  |  |  | 2.0 |
Total |  | $ | 5,431 |  |  | $ | 347 |  |  | $ | 4,175 |  |  | $ | 9,953 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended March 31, 2024 |  |  |  |  |  |  | Financial Effects of Loan Modifications |
|  | Term Extension |  |  | Payment Delay |  |  | Combo-Rate Reduction/Term Extension/Payment Delay |  |  | Total |  |  | Modification as a % of Loan Class |  |  | Weighted-Average Change in Rate |  |  | Weighted-Average Term Extension (in Years) |  |  | Weighted-Average Payment Deferral (in Years) |
|  | (In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | — |  |  | $ | — |  |  | $ | 2,529 |  |  | $ | 2,529 |  |  |  | 0.08 | % |  |  | (1.12 | ) |  |  | 2.20 |  |  |  | 0.90 |
Residential mortgage loans |  |  | 222 |  |  |  | — |  |  |  | — |  |  |  | 222 |  |  |  | 0.00 | % |  |  | (0.12 | ) |  |  | 0.00 |  |  |  | 2.00 |
Total |  | $ | 222 |  |  | $ | — |  |  | $ | 2,529 |  |  | $ | 2,751 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
The Company considers a loan to be in payment default once it is 60 to 90 days contractually past due under the modified terms. The Company tracks the performance of modified loans. The following table presents information on loans that defaulted during the three months ended March 31, 2025, that received modifications within the twelve months preceding payment default. There were no loans that received modifications which subsequently defaulted during the three months ended March 31, 2024.
|  | Three Months Ended March 31, 2025 |
|  | Term Extension |  |  | Payment Delay |  |  | Combo-Rate Reduction/Term Extension/Payment Delay |  |  | Total |
|  | (In thousands) |
Loan Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 1,610 |  |  | $ | 130 |  |  | $ | — |  |  | $ | 1,740 |
Total |  | $ | 1,610 |  |  | $ | 130 |  |  | $ | — |  |  | $ | 1,740 |
A modified loan may become delinquent and may result in a payment default (generally 90 days past due) subsequent to modification. The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of loans that were modified in the twelve months ended March 31, 2025, and 2024.
|  | As of March 31, 2025 |
|  | Current |  |  | 30–89 Days Past Due |  |  | 90+ Days Past Due |  |  | Total |
|  | (In thousands) |
Loan Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 4,795 |  |  | $ | — |  |  | $ | 1,740 |  |  | $ | 6,535 |
Commercial real estate loans |  |  | 3,201 |  |  |  | — |  |  |  | — |  |  |  | 3,201 |
Residential mortgage loans |  |  | 217 |  |  |  | — |  |  |  | — |  |  |  | 217 |
Total |  | $ | 8,213 |  |  | $ | — |  |  | $ | 1,740 |  |  | $ | 9,953 |
|  | As of March 31, 2024 |
|  | Current |  |  | 30–89 Days Past Due |  |  | 90+ Days Past Due |  |  | Total |
|  | (In thousands) |
Loan Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | — |  |  | $ | — |  |  | $ | 2,529 |  |  | $ | 2,529 |
Residential mortgage loans |  |  | — |  |  |  | — |  |  |  | 222 |  |  |  | 222 |
Total |  | $ | — |  |  | $ | — |  |  | $ | 2,751 |  |  | $ | 2,751 |
Under the Company’s internal underwriting policy, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification in order to determine whether a borrower is experiencing financial difficulty. As of March 31, 2025, there were no commitments to lend additional funds to borrowers experiencing financial difficulty and whose loans were modified. As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. Loans are risk rated based on analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of sources of repayment, the borrower’s current financial and liquidity status and other relevant information. The risk rating categories can be generally described by the following grouping for non-homogeneous loans:
| ● | Pass/Watch – These loans range from minimal credit risk to higher than average, but still acceptable, credit risk. The loans have sufficient sources of repayment to repay the loans in full, in accordance with all the terms and conditions and remain currently well protected by collateral values.
| ● | Special Mention – Borrower is fundamentally sound, and loan is currently protected but adverse trends are apparent that, if not corrected, may affect ability to repay. Primary source of loan repayment remains viable but there is increasing reliance on collateral or guarantor support.
| ● | Substandard – These loans are inadequately protected by current sound net worth, paying capacity, or collateral. Well-defined weaknesses exist that could jeopardize repayment of debt. Loss may not be imminent, but if weaknesses are not corrected, there is a good possibility of some loss.
| ● | Doubtful – The possibility of loss is extremely high, but due to identifiable and important pending events (which may strengthen the loan), a loss classification is deferred until the situation is better defined.
| ● | Loss – These loans are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.
The following table summarizes the Company’s loans held for investment and current year-to-date gross write-offs as of March 31, 2025, and December 31, 2024, presented by loan portfolio segments, internal risk ratings and vintage year. The vintage year is the year of origination, renewal or major modification. Revolving Loans that are converted to term loans presented in the table below are excluded from the term loans by vintage year columns.
|  | Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2025 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |  |  | Revolving Loans |  |  | Revolving Converted to Term Loans |  |  | Total |
|  | (In thousands) |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 63,767 |  |  | $ | 330,063 |  |  | $ | 225,877 |  |  | $ | 165,477 |  |  | $ | 189,361 |  |  | $ | 111,102 |  |  | $ | 1,653,632 |  |  | $ | 7,519 |  |  | $ | 2,746,798 |
Special Mention |  |  | — |  |  |  | — |  |  |  | 17,017 |  |  |  | 3,473 |  |  |  | — |  |  |  | 12,573 |  |  |  | 110,287 |  |  |  | — |  |  |  | 143,350 |
Substandard |  |  | — |  |  |  | — |  |  |  | 5,070 |  |  |  | 10,560 |  |  |  | 3,763 |  |  |  | 28,132 |  |  |  | 61,099 |  |  |  | 749 |  |  |  | 109,373 |
Total |  | $ | 63,767 |  |  | $ | 330,063 |  |  | $ | 247,964 |  |  | $ | 179,510 |  |  | $ | 193,124 |  |  | $ | 151,807 |  |  | $ | 1,825,018 |  |  | $ | 8,268 |  |  | $ | 2,999,521 |
YTD gross write-offs |  | $ | — |  |  | $ | 20 |  |  | $ | 42 |  |  | $ | 163 |  |  | $ | 2,119 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,344 |
Construction loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 6,121 |  |  | $ | 33,786 |  |  | $ | 56,969 |  |  | $ | 120,548 |  |  | $ | 59,450 |  |  | $ | 3,113 |  |  | $ | 886 |  |  | $ | — |  |  | $ | 280,873 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,100 |  |  |  | 32,910 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35,010 |
Substandard |  |  | — |  |  |  | — |  |  |  | 4,230 |  |  |  | — |  |  |  | — |  |  |  | 11,706 |  |  |  | — |  |  |  | — |  |  |  | 15,936 |
Total |  | $ | 6,121 |  |  | $ | 33,786 |  |  | $ | 61,199 |  |  | $ | 122,648 |  |  | $ | 92,360 |  |  | $ | 14,819 |  |  | $ | 886 |  |  | $ | — |  |  | $ | 331,819 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 362,249 |  |  | $ | 1,482,810 |  |  | $ | 1,971,002 |  |  | $ | 1,679,321 |  |  | $ | 1,393,421 |  |  | $ | 2,740,738 |  |  | $ | 187,137 |  |  | $ | — |  |  | $ | 9,816,678 |
Special Mention |  |  | 19,987 |  |  |  | 1,733 |  |  |  | 7,765 |  |  |  | 19,437 |  |  |  | 11,420 |  |  |  | 30,248 |  |  |  | 19,201 |  |  |  | — |  |  |  | 109,791 |
Substandard |  |  | — |  |  |  | — |  |  |  | 11,348 |  |  |  | 54,030 |  |  |  | 62,419 |  |  |  | 89,230 |  |  |  | 5,841 |  |  |  | 3,200 |  |  |  | 226,068 |
Total |  | $ | 382,236 |  |  | $ | 1,484,543 |  |  | $ | 1,990,115 |  |  | $ | 1,752,788 |  |  | $ | 1,467,260 |  |  | $ | 2,860,216 |  |  | $ | 212,179 |  |  | $ | 3,200 |  |  | $ | 10,152,537 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Residential mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 152,995 |  |  | $ | 609,493 |  |  | $ | 983,090 |  |  | $ | 988,664 |  |  | $ | 758,304 |  |  | $ | 2,094,351 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,586,897 |
Special Mention |  |  | — |  |  |  | 498 |  |  |  | 375 |  |  |  | 3,027 |  |  |  | 831 |  |  |  | 7,254 |  |  |  | — |  |  |  | — |  |  |  | 11,985 |
Substandard |  |  | 29 |  |  |  | 1,041 |  |  |  | 2,274 |  |  |  | 4,772 |  |  |  | 3,620 |  |  |  | 14,099 |  |  |  | — |  |  |  | — |  |  |  | 25,835 |
Total |  | $ | 153,024 |  |  | $ | 611,032 |  |  | $ | 985,739 |  |  | $ | 996,463 |  |  | $ | 762,755 |  |  | $ | 2,115,704 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,624,717 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Equity lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 211,828 |  |  | $ | 17,163 |  |  | $ | 228,991 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,760 |  |  |  | 147 |  |  |  | 2,907 |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 214,588 |  |  | $ | 17,310 |  |  | $ | 231,898 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Installment and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 854 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 854 |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 854 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 854 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Total loans |  | $ | 605,148 |  |  | $ | 2,459,424 |  |  | $ | 3,285,017 |  |  | $ | 3,052,263 |  |  | $ | 2,515,499 |  |  | $ | 5,142,546 |  |  | $ | 2,252,671 |  |  | $ | 28,778 |  |  | $ | 19,341,346 |
Total YTD gross write-offs |  | $ | — |  |  | $ | 20 |  |  | $ | 42 |  |  | $ | 163 |  |  | $ | 2,119 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,344 |
|  | Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024 |  | 2024 |  |  | 2023 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Revolving Loans |  |  | Revolving Converted to Term Loans |  |  | Total |
|  | (In thousands) |
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 400,836 |  |  | $ | 237,303 |  |  | $ | 203,190 |  |  | $ | 201,837 |  |  | $ | 27,359 |  |  | $ | 90,724 |  |  | $ | 1,675,260 |  |  | $ | 7,804 |  |  | $ | 2,844,313 |
Special Mention |  |  | — |  |  |  | 17,424 |  |  |  | 740 |  |  |  | — |  |  |  | 9,117 |  |  |  | 5,139 |  |  |  | 92,632 |  |  |  | — |  |  |  | 125,052 |
Substandard |  |  | 50 |  |  |  | 5,070 |  |  |  | 12,104 |  |  |  | 6,773 |  |  |  | 22,357 |  |  |  | 6,256 |  |  |  | 67,553 |  |  |  | 222 |  |  |  | 120,385 |
Doubtful |  |  | 1,857 |  |  |  | — |  |  |  | — |  |  |  | 3,118 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,975 |
Total |  | $ | 402,743 |  |  | $ | 259,797 |  |  | $ | 216,034 |  |  | $ | 211,728 |  |  | $ | 58,833 |  |  | $ | 102,119 |  |  | $ | 1,835,445 |  |  | $ | 8,026 |  |  | $ | 3,094,725 |
YTD gross write-offs |  | $ | 188 |  |  | $ | 1,586 |  |  | $ | 3,151 |  |  | $ | 8,950 |  |  | $ | 257 |  |  | $ | 64 |  |  | $ | 12,730 |  |  | $ | — |  |  | $ | 26,926 |
Construction loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 22,562 |  |  | $ | 55,835 |  |  | $ | 126,200 |  |  | $ | 57,546 |  |  | $ | 3,021 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 265,164 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35,569 |  |  |  | 13,837 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 49,406 |
Substandard |  |  | — |  |  |  | 4,230 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,230 |
Total |  | $ | 22,562 |  |  | $ | 60,065 |  |  | $ | 126,200 |  |  | $ | 93,115 |  |  | $ | 16,858 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 318,800 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial real estate loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 1,463,225 |  |  | $ | 1,987,280 |  |  | $ | 1,724,563 |  |  | $ | 1,428,124 |  |  | $ | 800,645 |  |  | $ | 2,108,143 |  |  | $ | 180,394 |  |  | $ | — |  |  | $ | 9,692,374 |
Special Mention |  |  | 8,805 |  |  |  | 8,292 |  |  |  | 28,465 |  |  |  | 16,462 |  |  |  | 24,844 |  |  |  | 19,888 |  |  |  | 9,939 |  |  |  | — |  |  |  | 116,695 |
Substandard |  |  | — |  |  |  | 11,364 |  |  |  | 54,269 |  |  |  | 57,929 |  |  |  | 6,946 |  |  |  | 78,737 |  |  |  | 8,152 |  |  |  | — |  |  |  | 217,397 |
Total |  | $ | 1,472,030 |  |  | $ | 2,006,936 |  |  | $ | 1,807,297 |  |  | $ | 1,502,515 |  |  | $ | 832,435 |  |  | $ | 2,206,768 |  |  | $ | 198,485 |  |  | $ | — |  |  | $ | 10,026,466 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 296 |  |  | $ | 4,173 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,469 |
Residential mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 642,568 |  |  | $ | 1,020,419 |  |  | $ | 1,014,842 |  |  | $ | 781,218 |  |  | $ | 452,623 |  |  | $ | 1,745,923 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,657,593 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | 1,585 |  |  |  | — |  |  |  | — |  |  |  | 1,618 |
Substandard |  |  | 397 |  |  |  | 2,513 |  |  |  | 4,362 |  |  |  | 5,183 |  |  |  | 4,191 |  |  |  | 13,436 |  |  |  | — |  |  |  | — |  |  |  | 30,082 |
Total |  | $ | 642,965 |  |  | $ | 1,022,932 |  |  | $ | 1,019,204 |  |  | $ | 786,401 |  |  | $ | 456,847 |  |  | $ | 1,760,944 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,689,293 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 59 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 59 |
Equity lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | — |  |  | $ | — |  |  | $ | 72 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 211,374 |  |  | $ | 16,277 |  |  | $ | 227,723 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |  |  |  | 11 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,927 |  |  |  | 161 |  |  |  | 3,088 |
Total |  | $ | — |  |  | $ | — |  |  | $ | 72 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 214,301 |  |  | $ | 16,449 |  |  | $ | 230,822 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |  |  | $ | 3 |
Installment and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass/Watch |  | $ | 5,264 |  |  | $ | — |  |  | $ | 44 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 5,308 |
Total |  | $ | 5,264 |  |  | $ | — |  |  | $ | 44 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 5,308 |
YTD gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | 15 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 15 |
Total loans |  | $ | 2,545,564 |  |  | $ | 3,349,730 |  |  | $ | 3,168,851 |  |  | $ | 2,593,759 |  |  | $ | 1,364,973 |  |  | $ | 4,069,831 |  |  | $ | 2,248,231 |  |  | $ | 24,475 |  |  | $ | 19,365,414 |
Total YTD gross write-offs |  | $ | 188 |  |  | $ | 1,586 |  |  | $ | 3,166 |  |  | $ | 9,009 |  |  | $ | 553 |  |  | $ | 4,237 |  |  | $ | 12,733 |  |  | $ | — |  |  | $ | 31,472 |
Allowance for Credit Losses The Company has an allowance framework under ASC Topic 326 for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. The measurement of the allowance for credit losses is based on management’s best estimate of lifetime expected credit losses inherent in the Company’s relevant financial assets. The forward-looking concept of current expected credit loss (“CECL”) approach requires loss estimates to consider historical experience, current conditions and reasonable and supportable economic forecasts of future events and circumstances. The ACL is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Balance Sheets (Unaudited). The amortized cost basis of loans does not include accrued interest receivable, which is included in "accrued interest receivable" on the Consolidated Balance Sheets. The "Provision for credit losses" on the Consolidated Statements of Operations and Comprehensive Income (Unaudited) is a combination of the provision for loan losses and the provision for unfunded loan commitments. Under the Company’s CECL approach, management estimates the ACL using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable economic forecasts that vary by loan portfolio. We use economic forecasts from Moody’s Analytics in this process. The economic forecast is updated monthly; therefore, the one used for each quarter-end calculation is generally based on a one-month lag based on the timing of when the forecast is released. The Company does not consider a one-month lag to create a material difference but considers any subsequent material changes to our estimated loss forecasts as deemed appropriate. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in gross domestic product (or “GDP”), unemployment rates, property values, or other relevant factors. Under the CECL methodology, quantitative and qualitative loss factors are applied to our population of loans on a collective pool basis when similar risk characteristics exist. The Company evaluates loans for expected credit losses on an individual basis if, based on current information and events, the loan does not share similar credit risk characteristics with other loans. The Company may choose to measure expected credit losses on an individual loan basis by using one of the following methods: (1) the present value of the expected future cash flows of the loan discounted at the loan’s original effective interest rate, or (2) if the loan is collateral dependent, the fair value of the collateral less costs to sell. For loans that are not collateral-dependent, the Company uses the present value of future cash flows. Quantitative Factors Under the Company’s CECL methodology, nine portfolio segments with similar risk characteristics are evaluated for expected loss. Six portfolios are modeled using econometric models and three smaller portfolios are evaluated using a simplified loss-rate method that calculates lifetime expected credit losses for the respective pools (simplified approach). The six portfolios subject to econometric modeling include residential mortgages; commercial and industrial loans (“C&I”); construction loans; commercial real estate (“CRE”) for multifamily loans; CRE for owner-occupied loans; and other CRE loans. We estimate the probability of default during the reasonable and supportable forecast period using separate econometric regression models developed to correlate macroeconomic variables, (GDP, unemployment, CRE prices and residential mortgage prices) to historical credit performance for each of the six loan portfolios from the fourth quarter of 2007 to the fourth quarter of 2022. Loss given default rates are computed based on the charge-offs recognized divided by the exposure at default of defaulted loans starting with the fourth quarter of 2007 through the fourth quarter of 2022. The probability of default and the loss given default rates are applied to the expected amount at default at the loan level based on contractual scheduled payments and estimated prepayments. The amounts so calculated comprise the quantitative portion of the allowance for credit losses. The Company’s CECL methodology utilizes an eight-quarter reasonable and supportable (“R&S”) forecast period, and a four-quarter reversion period. Management relies on multiple forecasts, blending them into a single loss estimate. Generally speaking, the blended scenario approach would include the Baseline, the Alternative Scenario 1 – Upside – 10th Percentile and the Alternative Scenario 3 – Downside – 90th Percentile forecasts. After the R&S period, the Company reverts linearly for the four-quarter reversion period to the long-term loss rates for each of the six portfolios of loans. The Company’s CECL methodology estimates expected credit losses over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company. The simplified approach portfolios include Small Business Administration (“SBA”) loans, Home Equity Lines of Credit (“HELOCs”) and cash-secured loans, which are not modelled econometrically due to the low loss history for these three pools of loans. The forecasted loss rate is based on the forecasted GDP and unemployment rates during the first eight quarters of the portfolio’s contractual life, reversion loss rates for the next four quarters of the portfolio’s contractual life on a linear declining rate, and the long-term loss rate projected over the remainder of the portfolio’s contractual life. Qualitative Factors Under the Company’s CECL methodology, the qualitative portion of the reserve on pooled loans represents management’s judgment of additional considerations to account for internal and external risk factors that are not adequately measured in the quantitative reserve. The qualitative loss factors consider idiosyncratic risk factors, conditions that may not be reflected in quantitatively derived results, or other relevant factors to seek to ensure the allowance for credit losses reflects our best estimate of current expected credit losses. The qualitative reserves include reserves for policy exceptions, experience of management and staff, level of competition in the lending environment, weak risk identification, lack of historical loss experience with residential mortgage loans made to non-U.S. residents, oil & gas, the higher risk characteristics of purchased syndicated loans, model uncertainty, and loans with potential risk of loss given the current environment, including CRE and Office loans, but have not degraded to the point of qualifying for a specific reserve. Current and forecasted economic trends and underlying market values for collateral dependent loans also are considered within the econometric models described above. The Company’s CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology involve judgment and are subjective in nature including, among other things:
| ● | Segmenting the loan portfolio
| ● | Determining the amount of loss history to consider
| ● | Selecting predictive econometric regression models that use appropriate macroeconomic variables
| ● | Determining the methodology to forecast prepayments
| ● | Selecting the most appropriate economic forecast scenario
| ● | Determining the length of the R&S forecast and reversion periods
| ● | Estimating expected utilization rates on unfunded loan commitments
| ● | Assessing relevant and appropriate qualitative factors.
In addition, the CECL methodology is dependent on economic forecasts that are inherently imprecise and will change from period to period. Although the allowance for credit losses is considered by management to be appropriate, there can be no assurance that it will be sufficient to absorb future losses. Management believes the allowance for credit losses is appropriate for the CECL in our loan portfolio and associated unfunded commitments, and the credit risk ratings and inherent loss rates currently assigned are reasonable and appropriate as of the reporting date. The criteria for default may include any one of the following: on nonaccrual status, modifications to borrowers experiencing financial difficulty, or payment delinquency of 90 days or more. Individually Evaluated Loans When a loan no longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the allowance for loan losses on an individual loan basis. Generally, the allowance for loan losses for individually evaluated loans is measured as the difference between the recorded value of the loans and the fair value of the collateral. For loans evaluated individually, the Company uses one of two different asset valuation measurement methods: (1) the fair value of collateral less costs to sell; or (2) the present value of expected future cash flows. If an individually evaluated loan is determined to be collateral dependent, the Company applies the fair value of the collateral less costs to sell method. If an individually evaluated loan is determined not to be collateral dependent, the Company uses the present value of future cash flows. Unfunded Loan Commitments Unfunded loan commitments are generally related to providing credit facilities to clients of the Bank and are not actively traded financial instruments. These unfunded commitments are disclosed as off-balance sheet financial instruments in Note 9 in the Notes to Consolidated Financial Statements (Unaudited). The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company, using the same loss factors as used for the allowance for loan losses. The reserve for unfunded loan commitments uses a one-year historical usage rate of the unfunded commitments during the contractual life of the commitments. The allowance for unfunded commitments is included in “other liabilities” on the Consolidated Balance Sheets. Changes in the allowance for unfunded commitments are included in the provision for credit losses. The following tables set forth activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2025, and March 31, 2024.
|  |  |  |  |  |  |  |  |  |  |  |  |  | Residential |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Commercial |  |  | Mortgage Loans |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Real Estate |  |  | and |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024 Ending Balance |  | $ | 57,796 |  |  | $ | 8,185 |  |  | $ | 79,597 |  |  | $ | 16,181 |  |  | $ | 6 |  |  | $ | 161,765 |
Provision/(reversal) for expected credit losses |  |  | 13,301 |  |  |  | 355 |  |  |  | 1,214 |  |  |  | (733 | ) |  |  | 11 |  |  |  | 14,148 |
Charge-offs |  |  | (2,344 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,344 | )
Recoveries |  |  | 270 |  |  |  | — |  |  |  | 90 |  |  |  | 7 |  |  |  | — |  |  |  | 367 |
Net (charge-offs) |  |  | (2,074 | ) |  |  | — |  |  |  | 90 |  |  |  | 7 |  |  |  | — |  |  |  | (1,977 | )
March 31, 2025 Ending Balance |  | $ | 69,023 |  |  | $ | 8,540 |  |  | $ | 80,901 |  |  | $ | 15,455 |  |  | $ | 17 |  |  | $ | 173,936 |
Allowance for unfunded credit commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024 Ending Balance |  | $ | 7,780 |  |  | $ | 1,896 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 9,676 |
Provision for expected credit losses |  |  | 1,277 |  |  |  | 75 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,352 |
March 31, 2025 Ending Balance |  | $ | 9,057 |  |  | $ | 1,971 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 11,028 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Residential |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Commercial |  |  | Mortgage Loans |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Real Estate |  |  | and |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2023 Ending Balance |  | $ | 53,791 |  |  | $ | 8,180 |  |  | $ | 74,428 |  |  | $ | 18,140 |  |  | $ | 23 |  |  | $ | 154,562 |
(Reversal)/provision for expected credit losses |  |  | (1,374 | ) |  |  | 359 |  |  |  | 2,872 |  |  |  | (677 | ) |  |  | (13 | ) |  |  | 1,167 |
Charge-offs |  |  | (1,939 | ) |  |  | — |  |  |  | (251 | ) |  |  | (3 | ) |  |  | — |  |  |  | (2,193 | )
Recoveries |  |  | 812 |  |  |  | — |  |  |  | — |  |  |  | 241 |  |  |  | — |  |  |  | 1,053 |
Net (charge-offs) |  |  | (1,127 | ) |  |  | — |  |  |  | (251 | ) |  |  | 238 |  |  |  | — |  |  |  | (1,140 | )
March 31, 2024 Ending Balance |  | $ | 51,290 |  |  | $ | 8,539 |  |  | $ | 77,049 |  |  | $ | 17,701 |  |  | $ | 10 |  |  | $ | 154,589 |
Allowance for unfunded credit commitments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2023 Ending Balance |  | $ | 6,888 |  |  | $ | 2,165 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 9,053 |
Provision for expected credit losses |  |  | 572 |  |  |  | 161 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 733 |
March 31, 2024 Ending Balance |  | $ | 7,460 |  |  | $ | 2,326 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 9,786 |
Loans Held-for-Sale At the time of commitment to originate or purchase a loan, the loan is determined to be held for investment if it is in the Company’s intent to hold the loan to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s evaluation processes, including asset/liability and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from held-for-investment to held-for-sale at the lower of cost or fair value. As of March 31, 2025, there were $11.7 million of loans held-for-sale, which were comprised of commercial loans and commercial real estate loans. There were no loans held-for-sale as of December 31, 2024. Loan Transfers, Sales and Purchases The Company purchases and sells loans in the secondary market in the ordinary course of business. From time to time, purchased loans may be transferred from held-for-investment to held-for-sale, and write-downs to the allowance for loan losses are recorded, when appropriate. During the three months ended March 31, 2025, the Company transferred $2.1 million in commercial loans and $9.6 million in commercial real estate loans held for investment to loans held for sale. Net gains on sale of loans, excluding the lower of cost or fair value adjustments, were $121 thousand for the three months ended March 31, 2025. There were no lower of cost or fair value adjustments during the three months ended March 31, 2025.

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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