XML 25 R13.htm IDEA: XBRL DOCUMENT

LOANS AND ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2025

LOANS AND ALLOWANCE FOR CREDIT LOSSES

NOTE E: LOANS AND ALLOWANCE FOR CREDIT LOSSES

The segments of the Company’s loan portfolio are summarized as follows:


	September 30,		December 31,
(000’s omitted)	2025		2024
CRE - multifamily	$	894,990	$	724,114
CRE – owner occupied		860,399		864,783
CRE – non-owner occupied		1,671,699		1,775,099
Commercial & industrial and other business loans		1,236,790		1,141,182
Consumer mortgage		3,544,277		3,489,780
Consumer indirect		1,834,766		1,767,655
Consumer direct		196,408		192,327
Home equity		510,933		477,425
Gross loans, including deferred origination costs		10,750,262		10,432,365
Allowance for credit losses		(84,944)		(79,114)
Loans, net of allowance for credit losses	$	10,665,318	$	10,353,251

The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of September 30, 2025 and December 31, 2024:


	Past Due		90+ Days Past
(000’s omitted)	30 – 89		Due and				Total
September 30, 2025	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
CRE – multifamily	$	1,060	$	0	$	0	$	1,060	$	893,930	$	894,990
CRE – owner occupied		240		475		6,699		7,414		852,985		860,399
CRE – non-owner occupied		264		0		1,422		1,686		1,670,013		1,671,699
Commercial & industrial and other business loans		618		0		12,937		13,555		1,223,235		1,236,790
Consumer mortgage		23,748		4,899		26,377		55,024		3,489,253		3,544,277
Consumer indirect		20,885		810		0		21,695		1,813,071		1,834,766
Consumer direct		1,638		174		0		1,812		194,596		196,408
Home equity		3,152		372		1,892		5,416		505,517		510,933
Total	$	51,605	$	6,730	$	49,327	$	107,662	$	10,642,600	$	10,750,262


	Past Due		90+ Days Past
(000’s omitted)	30 – 89		Due and				Total
December 31, 2024	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
CRE – multifamily	$	184	$	0	$	12,316	$	12,500	$	711,614	$	724,114
CRE – owner occupied		690		0		7,695		8,385		856,398		864,783
CRE – non-owner occupied		447		0		11,826		12,273		1,762,826		1,775,099
Commercial & industrial and other business loans		2,832		0		8,122		10,954		1,130,228		1,141,182
Consumer mortgage		24,928		5,288		24,389		54,605		3,435,175		3,489,780
Consumer indirect		22,379		1,227		0		23,606		1,744,049		1,767,655
Consumer direct		1,747		106		0		1,853		190,474		192,327
Home equity		2,739		379		2,039		5,157		472,268		477,425
Total	$	55,946	$	7,000	$	66,387	$	129,333	$	10,303,032	$	10,432,365

An immaterial amount of interest income on nonaccrual loans was recognized during the three and nine months ended September 30, 2025 and 2024.

The Company uses several credit quality indicators to assess credit risk in an ongoing manner. The Company’s primary credit quality indicator for its business lending portfolio is an internal credit risk rating system that categorizes loans as “pass”, “special mention”, “substandard”, or “doubtful”. Credit risk ratings are applied to loans individually based on a case-by-case evaluation. Business lending loans under $250,000 are assigned either a “pass” or “substandard” risk rating. Business lending relationships with total exposure of more than $3.0 million are subject to a formal annual review to affirm the appropriate risk rating. Quarterly credit evaluations may also be completed based on the borrower’s risk rating. Business lending relationships with total exposures of $3.0 million or less are generally not subject to the formal annual review process, unless the total exposure is $2.0 million or more and has a risk rating other than “pass”. For all business lending relationships regardless of exposure size, risk ratings are refreshed when a borrower makes a new loan request, a loan is renewed or automated tools indicate a possible change in a borrower’s credit risk profile. In general, the following are the definitions of the Company’s credit quality indicators:


Pass		The condition of the borrower and the performance of the loans are satisfactory or better.
Special Mention		The condition of the borrower has deteriorated and the loan has potential weaknesses, although the loan performs as agreed. Loss may be incurred at some future date if conditions deteriorate further.
Substandard		The condition of the borrower has significantly deteriorated and the loan has a well-defined weakness or weaknesses. The performance of the loan could further deteriorate and incur loss if deficiencies are not corrected.
Doubtful		The condition of the borrower has deteriorated to the point that collection of the balance is improbable based on current facts and conditions and loss is likely.

The following tables show the amount of business lending loans by credit quality category at September 30, 2025 and December 31, 2024:


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
September 30, 2025	2025		2024		2023		2022		2021		2020 & Prior		Cost Basis		to Term		Total
CRE – multifamily:
Risk rating
Pass	$	92,706	$	13,616	$	91,601	$	137,691	$	38,900	$	134,514	$	127,478	$	205,924	$	842,430
Special mention		0		0		8,561		0		9,083		7,212		4,994		10,693		40,543
Substandard		0		0		0		0		1,101		6,287		1,649		2,980		12,017
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – multifamily	$	92,706	$	13,616	$	100,162	$	137,691	$	49,084	$	148,013	$	134,121	$	219,597	$	894,990
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	0	$	19	$	0	$	428	$	0	$	447

CRE – owner occupied:
Risk rating
Pass	$	77,283	$	90,219	$	39,974	$	73,036	$	51,119	$	237,024	$	21,055	$	194,164	$	783,874
Special mention		1,210		6,933		4,211		1,886		0		5,131		371		28,602		48,344
Substandard		378		124		1,864		7,211		888		11,075		819		5,822		28,181
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – owner occupied	$	78,871	$	97,276	$	46,049	$	82,133	$	52,007	$	253,230	$	22,245	$	228,588	$	860,399
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	47	$	0	$	9	$	0	$	0	$	56

CRE – non-owner occupied:
Risk rating
Pass	$	118,146	$	87,460	$	103,396	$	187,646	$	110,239	$	318,924	$	324,502	$	224,227	$	1,474,540
Special mention		0		1,850		0		450		378		25,982		39,075		22,846		90,581
Substandard		0		0		8,530		49,558		1,638		6,574		25,072		15,206		106,578
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – non-owner occupied	$	118,146	$	89,310	$	111,926	$	237,654	$	112,255	$	351,480	$	388,649	$	262,279	$	1,671,699
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	0	$	1,111	$	0	$	0	$	3,198	$	4,309

Commercial & industrial and other business loans:
Risk rating
Pass	$	174,764	$	176,743	$	52,061	$	68,414	$	52,607	$	90,992	$	454,109	$	84,334	$	1,154,024
Special mention		1,064		1,451		1,365		3,120		1,487		666		17,376		8,598		35,127
Substandard		3,048		2,456		4,679		3,726		2,157		4,714		19,528		5,136		45,444
Doubtful		0		0		0		0		0		0		1,574		621		2,195
Total commercial & industrial and other business loans	$	178,876	$	180,650	$	58,105	$	75,260	$	56,251	$	96,372	$	492,587	$	98,689	$	1,236,790
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	229	$	12	$	149	$	51	$	257	$	674	$	1,372

Total business lending:
Risk rating
Pass	$	462,899	$	368,038	$	287,032	$	466,787	$	252,865	$	781,454	$	927,144	$	708,649	$	4,254,868
Special mention		2,274		10,234		14,137		5,456		10,948		38,991		61,816		70,739		214,595
Substandard		3,426		2,580		15,073		60,495		5,784		28,650		47,068		29,144		192,220
Doubtful		0		0		0		0		0		0		1,574		621		2,195
Total business lending	$	468,599	$	380,852	$	316,242	$	532,738	$	269,597	$	849,095	$	1,037,602	$	809,153	$	4,663,878
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	229	$	59	$	1,279	$	60	$	685	$	3,872	$	6,184

(1)For the nine months ended September 30, 2025.


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
December 31, 2024	2024		2023		2022		2021		2020		2019 & Prior		Cost Basis		to Term		Total
CRE - multifamily:
Risk rating
Pass	$	24,631	$	101,868	$	141,997	$	50,421	$	16,827	$	134,788	$	63,401	$	146,565	$	680,498
Special mention		0		0		0		0		0		1,865		1,500		14,030		17,395
Substandard		0		0		7,232		1,580		60		4,639		641		9,293		23,445
Doubtful		0		0		0		0		0		0		0		2,776		2,776
Total CRE – multifamily	$	24,631	$	101,868	$	149,229	$	52,001	$	16,887	$	141,292	$	65,542	$	172,664	$	724,114
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	62	$	0	$	0	$	0	$	0	$	62

CRE – owner occupied:
Risk rating
Pass	$	101,325	$	50,104	$	76,554	$	52,518	$	36,798	$	233,701	$	68,794	$	171,660	$	791,454
Special mention		744		4,726		2,076		1,474		1,407		4,679		430		23,107		38,643
Substandard		0		1,792		7,565		978		2,123		15,137		1,112		5,979		34,686
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – owner occupied	$	102,069	$	56,622	$	86,195	$	54,970	$	40,328	$	253,517	$	70,336	$	200,746	$	864,783
Current period gross charge-offs⁽¹⁾	$	0	$	806	$	0	$	0	$	0	$	0	$	0	$	0	$	806

CRE – non-owner occupied:
Risk rating
Pass	$	98,845	$	120,244	$	193,914	$	115,990	$	86,279	$	296,787	$	418,515	$	230,482	$	1,561,056
Special mention		2,007		377		50,868		1,264		259		20,210		20,960		23,600		119,545
Substandard		0		10,887		284		1,846		351		13,023		23,816		43,425		93,632
Doubtful		0		0		0		866		0		0		0		0		866
Total CRE – non-owner occupied	$	100,852	$	131,508	$	245,066	$	119,966	$	86,889	$	330,020	$	463,291	$	297,507	$	1,775,099
Current period gross charge-offs⁽¹⁾	$	0	$	412	$	0	$	0	$	0	$	77	$	0	$	554	$	1,043

Commercial & industrial and other business loans:
Risk rating
Pass	$	267,499	$	67,503	$	92,315	$	69,456	$	24,072	$	88,204	$	390,217	$	56,971	$	1,056,237
Special mention		6,078		445		1,673		1,022		2		1,889		12,468		7,608		31,185
Substandard		1,575		16,588		3,743		1,458		397		3,261		20,842		5,896		53,760
Doubtful		0		0		0		0		0		0		0		0		0
Total commercial & industrial and other business loans	$	275,152	$	84,536	$	97,731	$	71,936	$	24,471	$	93,354	$	423,527	$	70,475	$	1,141,182
Current period gross charge-offs⁽¹⁾	$	0	$	64	$	119	$	114	$	0	$	23	$	924	$	2	$	1,246

Total business lending:
Risk rating
Pass	$	492,300	$	339,719	$	504,780	$	288,385	$	163,976	$	753,480	$	940,927	$	605,678	$	4,089,245
Special mention		8,829		5,548		54,617		3,760		1,668		28,643		35,358		68,345		206,768
Substandard		1,575		29,267		18,824		5,862		2,931		36,060		46,411		64,593		205,523
Doubtful		0		0		0		866		0		0		0		2,776		3,642
Total business lending	$	502,704	$	374,534	$	578,221	$	298,873	$	168,575	$	818,183	$	1,022,696	$	741,392	$	4,505,178
Current period gross charge-offs⁽¹⁾	$	0	$	1,282	$	119	$	176	$	0	$	100	$	924	$	556	$	3,157

(1)For the year ended December 31, 2024.

All other loans are underwritten and structured using standardized criteria and characteristics, primarily payment performance, and are monitored collectively on a monthly basis. These are typically loans to individuals in the consumer categories and are delineated as either performing or nonperforming. Performing loans include loans classified as current as well as those classified as 30 - 89 days past due. Nonperforming loans include 90+ days past due and still accruing and nonaccrual loans.

The following tables detail the balances in all other loan categories at September 30, 2025 and December 31, 2024:


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
September 30, 2025	2025		2024		2023		2022		2021		2020 & Prior		Cost Basis		to Term		Total
Consumer mortgage:
FICO AB⁽¹⁾
Performing	$	185,958	$	287,710	$	309,657	$	305,045	$	392,355	$	764,577	$	16,079	$	142,665	$	2,404,046
Nonperforming		0		415		855		868		947		3,343		0		0		6,428
Total FICO AB		185,958		288,125		310,512		305,913		393,302		767,920		16,079		142,665		2,410,474
FICO CDE⁽²⁾
Performing		82,101		145,824		131,258		130,344		140,053		411,460		15,632		52,283		1,108,955
Nonperforming		207		2,360		3,029		4,943		1,577		11,860		0		872		24,848
Total FICO CDE		82,308		148,184		134,287		135,287		141,630		423,320		15,632		53,155		1,133,803
Total consumer mortgage	$	268,266	$	436,309	$	444,799	$	441,200	$	534,932	$	1,191,240	$	31,711	$	195,820	$	3,544,277
Current period gross charge-offs⁽³⁾	$	0	$	0	$	20	$	5	$	0	$	31	$	0	$	0	$	56

Consumer indirect:
Performing	$	589,270	$	504,929	$	353,029	$	253,420	$	86,643	$	46,665	$	0	$	0	$	1,833,956
Nonperforming		211		103		248		104		74		70		0		0		810
Total consumer indirect	$	589,481	$	505,032	$	353,277	$	253,524	$	86,717	$	46,735	$	0	$	0	$	1,834,766
Current period gross charge-offs⁽³⁾	$	517	$	2,679	$	3,139	$	2,099	$	919	$	789	$	0	$	0	$	10,142

Consumer direct:
Performing	$	70,268	$	57,287	$	32,250	$	17,770	$	6,182	$	5,699	$	6,778	$	0	$	196,234
Nonperforming		1		46		22		0		6		51		48		0		174
Total consumer direct	$	70,269	$	57,333	$	32,272	$	17,770	$	6,188	$	5,750	$	6,826	$	0	$	196,408
Current period gross charge-offs⁽³⁾	$	93	$	706	$	569	$	360	$	34	$	26	$	151	$	0	$	1,939

Home equity:
Performing	$	51,032	$	63,812	$	47,566	$	48,980	$	47,303	$	70,028	$	156,472	$	23,476	$	508,669
Nonperforming		0		106		538		320		71		496		665		68		2,264
Total home equity	$	51,032	$	63,918	$	48,104	$	49,300	$	47,374	$	70,524	$	157,137	$	23,544	$	510,933
Current period gross charge-offs⁽³⁾	$	0	$	0	$	78	$	0	$	0	$	31	$	7	$	0	$	116

(1)FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720.

(2)FICO CDE refers to loans with FICO scores less than 720 and potentially higher risk.

(3)For the nine months ended September 30, 2025.


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
December 31, 2024	2024		2023		2022		2021		2020		2019 & Prior		Cost Basis		to Term		Total
Consumer mortgage:
FICO AB⁽¹⁾
Performing	$	312,040	$	327,737	$	325,563	$	418,887	$	182,058	$	665,652	$	2,501	$	124,134	$	2,358,572
Nonperforming		0		0		669		748		521		4,476		0		0		6,414
Total FICO AB		312,040		327,737		326,232		419,635		182,579		670,128		2,501		124,134		2,364,986
FICO CDE⁽²⁾
Performing		149,322		139,294		138,007		151,769		93,797		352,517		33,678		43,147		1,101,531
Nonperforming		564		1,815		3,932		1,483		2,076		12,282		0		1,111		23,263
Total FICO CDE		149,886		141,109		141,939		153,252		95,873		364,799		33,678		44,258		1,124,794
Total consumer mortgage	$	461,926	$	468,846	$	468,171	$	572,887	$	278,452	$	1,034,927	$	36,179	$	168,392	$	3,489,780
Current period gross charge-offs⁽³⁾	$	0	$	141	$	30	$	1	$	20	$	192	$	0	$	0	$	384

Consumer indirect:
Performing	$	656,284	$	492,192	$	380,652	$	153,977	$	32,812	$	50,511	$	0	$	0	$	1,766,428
Nonperforming		118		461		453		141		34		20		0		0		1,227
Total consumer indirect	$	656,402	$	492,653	$	381,105	$	154,118	$	32,846	$	50,531	$	0	$	0	$	1,767,655
Current period gross charge-offs⁽³⁾	$	1,468	$	3,039	$	3,789	$	1,592	$	499	$	1,220	$	0	$	0	$	11,607

Consumer direct:
Performing	$	84,114	$	49,126	$	30,424	$	12,534	$	3,374	$	5,527	$	7,122	$	0	$	192,221
Nonperforming		22		21		2		17		0		8		36		0		106
Total consumer direct	$	84,136	$	49,147	$	30,426	$	12,551	$	3,374	$	5,535	$	7,158	$	0	$	192,327
Current period gross charge-offs⁽³⁾	$	176	$	1,072	$	664	$	389	$	74	$	118	$	251	$	0	$	2,744

Home equity:
Performing	$	68,249	$	53,612	$	54,754	$	53,466	$	26,456	$	56,072	$	137,448	$	24,950	$	475,007
Nonperforming		32		234		225		43		282		534		850		218		2,418
Total home equity	$	68,281	$	53,846	$	54,979	$	53,509	$	26,738	$	56,606	$	138,298	$	25,168	$	477,425
Current period gross charge-offs⁽³⁾	$	0	$	0	$	23	$	0	$	8	$	41	$	92	$	0	$	164

(1)FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720.

(2)FICO CDE refers to loans with FICO scores less than 720 and potentially higher risk.

(3)For the year ended December 31, 2024.

For business lending loans on nonaccrual greater than $500,000 that do not share the same risk characteristics with a pool of loans, the company establishes individually assessed reserves using methods prescribed by GAAP. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A summary of individually assessed business loans as of September 30, 2025 and December 31, 2024 follows:


	September 30, 2025						December 31, 2024
					Specifically						Specifically
	Carrying		Contractual		Allocated		Carrying		Contractual		Allocated
(000’s omitted)	Balance		Balance		Allowance		Balance		Balance		Allowance
Loans with allowance allocation:
CRE – multifamily	$	0	$	0	$	0	$	12,068	$	12,068	$	2,764
CRE – non-owner occupied		0		0		0		10,075		10,270		864
Commercial & industrial and other business loans		4,411		4,544		2,192		0		0		0
Total	$	4,411	$	4,544	$	2,192	$	22,143	$	22,338	$	3,628

Loans without allowance allocation:
CRE – owner occupied	$	6,090	$	6,771	$	0	$	7,554	$	8,360	$	0
CRE – non-owner occupied		1,335		2,389		0		1,592		2,606		0
Commercial & industrial and other business loans		7,541		9,447		0		7,672		7,672		0
Total	$	14,966	$	18,607	$	0	$	16,818	$	18,638	$	0

The average carrying balance of individually assessed loans was $20.4 million and $30.8 million for the three months ended September 30, 2025 and 2024, respectively. The average carrying balance of individually assessed loans was $43.1 million and $31.1 million for the nine months ended September 30, 2025 and 2024, respectively. An immaterial amount of interest income was recognized on individually assessed loans for the three and nine months ended September 30, 2025 and 2024.

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of modification, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification, such as principal forgiveness, may be granted. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. The estimate of allowance for credit losses includes historical losses from loans that were modified due to borrower financial difficulty, therefore a charge to the allowance for credit losses is generally not recorded upon modification.

The following tables present the amortized cost basis of loans at September 30, 2025 and 2024 that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2025 and 2024, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below.


	Three Months Ended				Three Months Ended
	September 30, 2025				September 30, 2024
			Total Class					Other	Total Class
	Term		of Financing		Term			Payment	of Financing
(000s omitted except for percentages)	Extension		Receivable		Extension			Delay	Receivable
CRE – owner occupied	$	0	0.00	%	$	926	$	0	0.11	%
CRE – non-owner occupied		0	0.00	%		0		17,875	1.03	%
Commercial & industrial and other business loans		0	0.00	%		300		0	0.00	%
Consumer mortgage		52	0.00	%		0		0	0.00	%
Total	$	52	0.00	%	$	1,226	$	17,875	0.19	%


	Nine Months Ended				Nine Months Ended
	September 30, 2025				September 30, 2024
			Total Class					Other	Total Class
		Term	of Financing			Term		Payment	of Financing
(000s omitted except for percentages)		Extension	Receivable			Extension		Delay	Receivable
CRE - owner occupied	$	0	0.00	%	$	1,490	$	0	0.17	%
CRE - non-owner occupied		0	0.00	%		3,222		17,875	1.22	%
Commercial & industrial and other business loans		5,707	0.46	%		399		0	0.00	%
Consumer mortgage		342	0.01	%		232		0	0.01	%
Home equity		0	0.00	%		24		0	0.00	%
Total	$	6,049	0.06	%	$	5,367	$	17,875	0.23	%

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 table presents the performance of such loans that have been modified in the last 12 months.


	September 30, 2025
					90+ Days Past
			Past Due 30 –		Due and Still
(000s omitted)	Current		89 Days		Accruing		Non-Accrual		Total
Commercial & industrial and other business loans	$	2,171	$	0	$	0	$	3,536	$	5,707
Consumer mortgage		51		0		0		420		471
Total	$	2,222	$	0	$	0	$	3,956	$	6,178

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025:


	Three Months Ended	Nine Months Ended
	September 30, 2025	September 30, 2025
	Weighted-Average	Weighted-Average
	Term Extension (Years)	Term Extension (Years)
Commercial & industrial and other business loans	0.0	0.3
Consumer mortgage	7.5	14.5
Total	7.5	1.5

There were no loans modified to borrowers with financial difficulty that had a payment default subsequent to modification during the three and nine months ended September 30, 2025 and 2024.

Allowance for Credit Losses

The following presents by segment the activity in the allowance for credit losses during the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30, 2025
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	41,154	$	(564)	$	187	$	3,135	$	43,912
Consumer mortgage		14,196		(33)		8		(114)		14,057
Consumer indirect		19,885		(3,557)		2,052		1,940		20,320
Consumer direct		4,133		(722)		251		467		4,129
Home equity		1,483		(93)		0		136		1,526
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		81,851		(4,969)		2,498		5,564		84,944
Liability for off-balance sheet credit exposures		859		0		0		0		859
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	82,710	$	(4,969)	$	2,498	$	5,564	$	85,803


	Three Months Ended September 30, 2024
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	31,128	$	(1,114)	$	199	$	3,536	$	33,749
Consumer mortgage		14,303		(188)		5		674		14,794
Consumer indirect		20,124		(3,000)		1,816		2,146		21,086
Consumer direct		3,368		(661)		228		1,037		3,972
Home equity		1,519		(58)		2		103		1,566
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		71,442		(5,021)		2,250		7,496		76,167
Liability for off-balance sheet credit exposures		869		0		0		213		1,082
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	72,311	$	(5,021)	$	2,250	$	7,709	$	77,249


	Nine Months Ended September 30, 2025
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	37,201	$	(6,184)	$	636	$	12,259	$	43,912
Consumer mortgage		15,017		(56)		19		(923)		14,057
Consumer indirect		20,895		(10,142)		6,160		3,407		20,320
Consumer direct		3,453		(1,939)		807		1,808		4,129
Home equity		1,548		(116)		1		93		1,526
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		79,114		(18,437)		7,623		16,644		84,944
Liability for off-balance sheet credit exposures		1,132		0		0		(273)		859
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	80,246	$	(18,437)	$	7,623	$	16,371	$	85,803


	Nine Months Ended September 30, 2024
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	26,854	$	(1,640)	$	330	$	8,205	$	33,749
Consumer mortgage		15,333		(345)		39		(233)		14,794
Consumer indirect		18,585		(8,669)		4,956		6,214		21,086
Consumer direct		3,269		(2,169)		710		2,162		3,972
Home equity		1,628		(115)		5		48		1,566
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		66,669		(12,938)		6,040		16,396		76,167
Liability for off-balance sheet credit exposures		913		0		0		169		1,082
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	67,582	$	(12,938)	$	6,040	$	16,565	$	77,249

The allowance for credit losses increased to $84.9 million at September 30, 2025 compared to $79.1 million at December 31, 2024 and $76.2 million at September 30, 2024, reflective of an increase in loans outstanding, a stable economic environment and an additional qualitative factor reserve for business lending related to an increase in size and volume of new loans not captured in the quantitative reserve.

Accrued interest receivable on loans, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $36.8 million at September 30, 2025 and is excluded from the estimate of credit losses and amortized cost basis of loans.

The Company utilizes the historical loss rate on its loan portfolio as the initial basis for the estimate of credit losses using the cumulative loss, vintage loss and line loss methods, which is derived from the Company’s historical loss experience. To address changes and trends in current period credit metrics, qualitative adjustments to historical loss experience were made for differences in current loan-specific risk characteristics and to address current period delinquencies, charge-off rates, risk ratings, lack of loan level data through an entire economic cycle, changes in loan sizes and underwriting standards as well as the addition of acquired loans which were not underwritten by the Company. The Company considered historical losses immediately prior, through and following the Great Recession compared to the historical period used for modeling to adjust the historical information to account for longer-term expectations for loan credit performance. Under CECL, the Company is required to consider future economic conditions to determine current expected credit losses. Management selected an eight-quarter reasonable and supportable forecast period with a four-quarter reversion to the historical mean to use as part of the economic forecast and utilizes a two-quarter lag adjustment for economic factors that are not dependent on collateral values, and no lag for factors that utilize collateral values. Management determined that these qualitative adjustments were needed to adjust historical information for expected losses and to reflect changes as a result of current conditions.

For qualitative macroeconomic adjustments, the Company uses third-party forecasted economic data scenarios utilizing a base scenario and two alternative scenarios that are weighted, with forecasts available as of September 30, 2025. These forecasts were factored into the qualitative portion of the calculation of the estimated credit losses and include the impact of slowing growth in residential real estate and vehicle prices as well as continued inflationary pressures.

Management developed expected loss estimates considering factors for segments as outlined below:

●

Business lending – non real estate: The Company selected projected unemployment and GDP as indicators of forecasted losses related to business lending and utilize both factors in an even weight for the calculation. The Company also considered delinquencies, risk rating changes, recent charge-off history and acquired loans as part of the review of estimated losses.

●

Business lending – real estate: The Company selected projected unemployment and commercial real estate values as indicators of forecasted losses related to commercial real estate loans and utilize both factors in an even weight for the calculation. For office specific properties, the Company selected projected office specific commercial real estate values and vacancy rates and utilize both factors in an even weight for the calculation. The Company also considered the factors noted in business lending – non real estate.

●

Consumer mortgages and home equity: The Company selected projected unemployment and residential real estate values as indicators of forecasted losses related to mortgage lending and utilize both factors in an even weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered.

●

Consumer indirect: The Company selected projected unemployment and vehicle valuation indices as indicators of forecasted losses related to indirect lending and utilize both factors in an even weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered.

●

Consumer direct: The Company selected projected unemployment and inflation-adjusted household income as indicators of forecasted losses related to consumer direct lending and utilize both factors in an even weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered.

At September 30, 2025 and December 31, 2024, loans with a carrying amount of approximately $6.78 billion and $6.72 billion, respectively, were pledged for the availability to secure certain borrowings with the FHLB and FRB. There were $462.2 million and $610.0 million of borrowings outstanding under these arrangements at September 30, 2025 and December 31, 2024, respectively.

At September 30, 2025 and December 31, 2024, there were foreclosures in process of $8.3 million and $6.3 million, respectively.

During the nine months ended September 30, 2025, the Company did not purchase any loans, while the Company sold $66.7 million of secondary market eligible residential consumer mortgage loans during the period. During the nine months ended September 30, 2024, the Company did not purchase any loans and sold $39.9 million of secondary market eligible residential consumer mortgage loans.