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LOANS AND ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2024

The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types:


(In thousands)	September 30, 2024		December 31, 2023
Construction	$	661,577	$	640,371
Commercial multifamily	663,484		599,145
Commercial real estate owner occupied	769,428		628,646
Commercial real estate non-owner occupied	2,629,198		2,606,409
Commercial and industrial	1,379,968		1,359,249

Residential real estate	2,765,410		2,760,312
Home equity	221,423		224,223
Consumer other	121,834		221,331
Total loans	$	9,212,322	$	9,039,686

Allowance for credit losses	(112,047)		(105,357)
Net loans	$	9,100,275	$	8,934,329

During the three months ended September 30, 2024, $44.6 million of consumer loans were reclassified to loans held for sale on the Consolidated Balance Sheets, reflecting the Company's intent to sell these loans. Held for sale loans are not contained in the balances within this note and are accounted for at the lower of carrying value or fair market value.

Risk characteristics relevant to each portfolio segment are as follows:

Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.

Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans.

Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Allowance for Credit Losses for Loans

The Allowance for Credit Losses for Loans (“ACLL”) is comprised of the allowance for credit losses, and the allowance for unfunded commitments is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics. The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon:

•the existence and growth of concentrations of credit;

•the volume and severity of past due financial assets, including nonaccrual assets;

•the institutions lending and credit review as well as the experience and ability of relevant management and staff and;

•the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters;

•the effect of other economic factors such as economic stimulus and customer forbearance programs.

The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in other liabilities on the Consolidated Balance Sheets.

The Company’s activity in the allowance for credit losses for loans for the three and nine months ended September 30, 2024 and September 30, 2023 was as follows:


(In thousands)	Balance at Beginning of Period		Charge-offs		Recoveries		Provision/(Benefit) for Credit Losses		Balance at End of Period
Three months ended September 30, 2024
Construction	$	2,776	$	—	$	—	$	1,175	$	3,951
Commercial multifamily	3,235		(1,164)		—		1,538		3,609
Commercial real estate owner occupied	10,871		(22)		95		1,145		12,089
Commercial real estate non-owner occupied	35,843		(36)		109		1,101		37,017
Commercial and industrial	22,843		(1,731)		716		1,805		23,633

Residential real estate	22,604		—		283		(974)		21,913
Home equity	2,094		—		3		331		2,428
Consumer other	11,901		(4,138)		265		(621)		7,407
Total allowance for credit losses	$	112,167	$	(7,091)	$	1,471	$	5,500	$	112,047


(In thousands)	Balance at Beginning of Period		Adoption of ASU No. 2022-02		Charge-offs		Recoveries		Provision/(Benefit) for Credit Losses		Balance at End of Period
Three months ended September 30, 2023
Construction	$	1,553	$	—	$	—	$	—	$	1,949	$	3,502
Commercial multifamily	2,066		—		—		—		339		2,405
Commercial real estate owner occupied	10,343		—		(25)		116		(979)		9,455
Commercial real estate non-owner occupied	36,322		—		(1)		20		(3,059)		33,282
Commercial and industrial	18,741		—		(3,997)		617		3,158		18,519

Residential real estate	18,218		—		(72)		92		1,766		20,004
Home equity	2,572		—		(71)		278		(677)		2,102
Consumer other	10,404		—		(2,578)		192		5,505		13,523
Total allowance for credit losses	$	100,219	$	—	$	(6,744)	$	1,315	$	8,002	$	102,792


(In thousands)	Balance at Beginning of Period		Charge-offs		Recoveries		Provision/(Benefit) for Credit Losses		Balance at End of Period
Nine months ended September 30, 2024
Construction	$	2,885	$	—	$	—	$	1,066	$	3,951
Commercial multifamily	2,475		(1,164)		—		2,298		3,609
Commercial real estate owner occupied	9,443		(228)		203		2,671		12,089
Commercial real estate non-owner occupied	38,221		(36)		215		(1,383)		37,017
Commercial and industrial	18,602		(5,144)		1,629		8,546		23,633

Residential real estate	19,622		(45)		842		1,494		21,913
Home equity	2,015		—		249		164		2,428
Consumer other	12,094		(9,355)		1,522		3,146		7,407
Total allowance for credit losses	$	105,357	$	(15,972)	$	4,660	$	18,002	$	112,047


(In thousands)	Balance at Beginning of Period		Adoption of ASU No. 2022-02		Charge-offs		Recoveries		Provision/(benefit) for Credit Losses		Balance at End of Period
Nine months ended September 30, 2023
Construction	$	1,227	$	—	$	(1)	$	—	$	2,276	$	3,502
Commercial multifamily	1,810		—		—		6		589		2,405
Commercial real estate owner occupied	10,739		24		(489)		758		(1,577)		9,455
Commercial real estate non-owner occupied	30,724		—		(1)		195		2,364		33,282
Commercial and industrial	18,743		(23)		(14,625)		1,736		12,688		18,519

Residential real estate	18,666		2		(313)		555		1,094		20,004
Home equity	2,173		—		(88)		437		(420)		2,102
Consumer other	12,188		(404)		(6,848)		580		8,007		13,523
Total allowance for credit losses	$	96,270	$	(401)	$	(22,365)	$	4,267	$	25,021	$	102,792

The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liabilities on the consolidated balance sheets), with adjustments to the reserve recognized in other noninterest expense in the Consolidated Statements of Income. The Company’s activity in the allowance for credit losses on unfunded commitments for the three and nine months ended September 30, 2024 and 2023 was as follows:


	Three Months Ended September 30,
(In thousands)	2024		2023
Balance at beginning of period	$	9,256	$	8,687


Expense for credit losses	565		300
Balance at end of period	$	9,821	$	8,987


	Nine Months Ended September 30,
(In thousands)	2024		2023
Balance at beginning of period	$	9,256	$	8,588


Expense for credit losses	565		399
Balance at end of period	$	9,821	$	8,987

Credit Quality Information

The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential weaknesses and are evaluated closely by management. Substandard, including non-accruing loans, are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annual, semiannually, or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations.

The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention, and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on non-accrual status.

The following table presents the Company’s loans by risk category:


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2024
Construction
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Risk rating
Pass	$	23,139	$	124,651	$	434,632	$	59,489	$	—	$	1,138	$	—	$	—	$	643,049
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		18,528		—		—		—		—		18,528
Total	$	23,139	$	124,651	$	434,632	$	78,017	$	—	$	1,138	$	—	$	—	$	661,577
Commercial multifamily:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	1,164	$	—	$	—	$	1,164

Risk rating
Pass	$	81,287	$	18,097	$	203,684	$	69,594	$	38,407	$	244,800	$	506	$	—	$	656,375
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		239		2,497		4,373		—		—		7,109
Total	$	81,287	$	18,097	$	203,684	$	69,833	$	40,904	$	249,173	$	506	$	—	$	663,484
Commercial real estate owner occupied:
Current period gross write-offs	$	—	$	—	$	45	$	57	$	—	$	126	$	—	$	—	$	228

Risk rating
Pass	$	86,777	$	93,390	$	158,857	$	98,990	$	69,022	$	234,095	$	3,373	$	—	$	744,504
Special Mention	1,860		1,383		964		7,129		222		5,052		—		—		16,610
Substandard	—		—		411		772		43		7,088		—		—		8,314
Total	$	88,637	$	94,773	$	160,232	$	106,891	$	69,287	$	246,235	$	3,373	$	—	$	769,428
Commercial real estate non-owner occupied:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	36	$	—	$	—	$	36

Risk rating
Pass	$	152,463	$	423,575	$	547,513	$	414,539	$	143,949	$	865,768	$	5,810	$	1,500	$	2,555,117
Special Mention	—		—		—		—		223		41,173		—		—		41,396
Substandard	—		—		371		2,804		—		27,254		2,256		—		32,685
Total	$	152,463	$	423,575	$	547,884	$	417,343	$	144,172	$	934,195	$	8,066	$	1,500	$	2,629,198
Commercial and industrial:
Current period gross write-offs	$	—	$	630	$	1,154	$	837	$	106	$	2,417	$	—	$	—	$	5,144

Risk rating
Pass	$	162,483	$	106,993	$	136,689	$	99,758	$	22,783	$	112,678	$	645,314	$	1,110	$	1,287,808
Special Mention	173		1,641		22,116		1,386		1,908		2,368		13,721		—		43,313
Substandard	—		1,270		2,182		11,417		1,556		12,762		19,508		152		48,847

Total	$	162,656	$	109,904	$	160,987	$	112,561	$	26,247	$	127,808	$	678,543	$	1,262	$	1,379,968


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Residential real estate
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	45	$	—	$	—	$	45

Risk rating
Pass	$	215,826	$	551,667	$	925,169	$	250,784	$	80,583	$	730,662	$	177	$	—	$	2,754,868
Special Mention	—		—		653		—		—		1,227		—		—		1,880
Substandard	—		—		124		919		376		7,243		—		—		8,662
Total	$	215,826	$	551,667	$	925,946	$	251,703	$	80,959	$	739,132	$	177	$	—	$	2,765,410


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2023
Construction
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1
Risk rating
Pass	$	104,507	$	346,419	$	138,802	$	29,176	$	2,545	$	1,098	$	—	$	—	$	622,547
Special Mention	—		—		512		—		—		—		—		—		512
Substandard	—		—		17,312		—		—		—		—		—		17,312
Total	$	104,507	$	346,419	$	156,626	$	29,176	$	2,545	$	1,098	$	—	$	—	$	640,371

Commercial multifamily:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Risk rating
Pass	$	16,020	$	216,477	$	56,817	$	26,566	$	94,733	$	179,923	$	377	$	—	$	590,913
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		242		2,554		—		5,436		—		—		8,232
Total	$	16,020	$	216,477	$	57,059	$	29,120	$	94,733	$	185,359	$	377	$	—	$	599,145

Commercial real estate owner occupied:
Current period gross write-offs	$	—	$	—	$	—	$	380	$	—	$	109	$	—	$	—	$	489
Risk rating
Pass	$	97,271	$	120,327	$	122,151	$	37,914	$	70,393	$	165,224	$	2,653	$	—	$	615,933
Special Mention	—		—		424		222		—		788		—		—		1,434
Substandard	—		—		81		47		4,703		6,448		—		—		11,279
Total	$	97,271	$	120,327	$	122,656	$	38,183	$	75,096	$	172,460	$	2,653	$	—	$	628,646

Commercial real estate non-owner occupied:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	65	$	—	$	—	$	65
Risk rating
Pass	$	404,687	$	591,897	$	385,247	$	135,134	$	277,870	$	736,566	$	4,553	$	—	$	2,535,954
Special Mention	—		—		—		229		19,465		726		—		—		20,420
Substandard	—		—		—		6,814		13,483		29,738		—		—		50,035
Total	$	404,687	$	591,897	$	385,247	$	142,177	$	310,818	$	767,030	$	4,553	$	—	$	2,606,409

Commercial and industrial:
Current period gross write-offs	$	—	$	1,154	$	863	$	2,763	$	1,496	$	9,283	$	2,313	$	—	$	17,872
Risk rating
Pass	$	142,946	$	203,126	$	118,191	$	69,722	$	39,437	$	112,770	$	554,153	$	—	$	1,240,345
Special Mention	526		23,149		3,735		1,621		610		1,353		35,244		—		66,238
Substandard	432		761		11,702		1,135		3,785		12,538		22,313		—		52,666

Total	$	143,904	$	227,036	$	133,628	$	72,478	$	43,832	$	126,661	$	611,710	$	—	$	1,359,249


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Residential real estate
Current period gross write-offs	$	—	$	50	$	—	$	50	$	174	$	39	$	—	$	—	$	313
Risk rating
Pass	$	599,124	$	973,031	$	266,055	$	88,302	$	66,837	$	755,372	$	81	$	—	$	2,748,802
Special Mention	—		—		—		—		140		664		—		—		804
Substandard	—		129		1,176		379		574		8,448		—		—		10,706
Total	$	599,124	$	973,160	$	267,231	$	88,681	$	67,551	$	764,484	$	81	$	—	$	2,760,312

For home equity and consumer other loan portfolio segments, Berkshire evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an ongoing basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost based on payment activity:


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of September 30, 2024
Home equity:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Payment performance
Performing	$	—	$	—	$	—	$	—	$	427	$	2,462	$	217,865	$	—	$	220,754
Nonperforming	—		—		—		—		—		—		669		—		669
Total	$	—	$	—	$	—	$	—	$	427	$	2,462	$	218,534	$	—	$	221,423

Consumer other:
Current period gross write-offs	$	—	$	191	$	8,351	$	680	$	3	$	130	$	—	$	—	$	9,355

Payment performance
Performing	$	25,272	$	36,561	$	27,308	$	11,226	$	4,105	$	7,543	$	9,541	$	—	$	121,556
Nonperforming	—		51		53		13		—		159		2		—		278
Total	$	25,272	$	36,612	$	27,361	$	11,239	$	4,105	$	7,702	$	9,543	$	—	$	121,834


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2023
Home equity:
Current period gross write-offs	$	—	$	—	$	—	$	70	$	—	$	—	$	18	$	—	$	88
Payment performance
Performing	$	—	$	—	$	—	$	439	$	—	$	2,614	$	220,209	$	—	$	223,262
Nonperforming	—		—		—		—		—		—		961		—		961
Total	$	—	$	—	$	—	$	439	$	—	$	2,614	$	221,170	$	—	$	224,223

Consumer other:
Current period gross write-offs	$	109	$	8,843	$	1,149	$	11	$	78	$	239	$	—	$	—	$	10,429
Payment performance
Performing	$	49,588	$	108,284	$	19,679	$	5,843	$	7,054	$	19,587	$	10,614	$	—	$	220,649
Nonperforming	77		104		47		26		110		284		34		—		682
Total	$	49,665	$	108,388	$	19,726	$	5,869	$	7,164	$	19,871	$	10,648	$	—	$	221,331

The following is a summary of loans by past due status at September 30, 2024 and December 31, 2023:


(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
September 30, 2024
Construction	$	—	$	594	$	—	$	594	$	660,983	$	661,577
Commercial multifamily	379		429		4,612		5,420		658,064		663,484
Commercial real estate owner occupied	1,645		615		2,279		4,539		764,889		769,428
Commercial real estate non-owner occupied	37		—		3,578		3,615		2,625,583		2,629,198
Commercial and industrial	3,514		703		8,453		12,670		1,367,298		1,379,968
Residential real estate	6,004		1,227		8,663		15,894		2,749,516		2,765,410
Home equity	517		751		1,505		2,773		218,650		221,423
Consumer other	1,215		897		1,160		3,272		118,562		121,834
Total	$	13,311	$	5,216	$	30,250	$	48,777	$	9,163,545	$	9,212,322


(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
December 31, 2023
Construction	$	—	$	—	$	—	$	—	$	640,371	$	640,371
Commercial multifamily	5,436		187		—		5,623		593,522		599,145
Commercial real estate owner occupied	581		286		804		1,671		626,975		628,646
Commercial real estate non-owner occupied	139		251		3,798		4,188		2,602,221		2,606,409
Commercial and industrial	2,749		689		8,769		12,207		1,347,042		1,359,249

Residential real estate	5,669		943		10,687		17,299		2,743,013		2,760,312
Home equity	707		498		1,281		2,486		221,737		224,223
Consumer other	2,363		1,642		1,606		5,611		215,720		221,331
Total	$	17,644	$	4,496	$	26,945	$	49,085	$	8,990,601	$	9,039,686

The following is a summary of loans on nonaccrual status and loans past due 90 days or more and still accruing as of September 30, 2024 and December 31, 2023:



(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
September 30, 2024
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	4,612		4,216		—		—
Commercial real estate owner occupied	2,279		1,543		—		—
Commercial real estate non-owner occupied	3,578		3,526		—		—
Commercial and industrial	8,028		4,865		425		—

Residential real estate	4,525		1,353		4,138		—
Home equity	669		52		836		—
Consumer other	278		—		882		—
Total	$	23,969	$	15,555	$	6,281	$	—

The commercial and industrial loans nonaccrual amortized cost as of September 30, 2024 included medallion loans with a fair value of $0.3 million and a contractual balance of $6.6 million.


(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
December 31, 2023
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	—		—		—		—
Commercial real estate owner occupied	605		285		199		—
Commercial real estate non-owner occupied	3,798		45		—		—
Commercial and industrial	8,665		5,586		104		—

Residential real estate	6,696		2,796		3,991		—
Home equity	961		122		320		—
Consumer other	682		—		924		—
Total	$	21,407	$	8,834	$	5,538	$	—

The commercial and industrial loans nonaccrual amortized cost as of December 31, 2023 included medallion loans with a fair value of $0.4 million and a contractual balance of $8.8 million.

The following table summarizes information about total loans rated Special Mention or lower at September 30, 2024 and December 31, 2023. The table below includes consumer loans that are Special Mention and Substandard accruing that are classified as performing based on payment activity.


(In thousands)	September 30, 2024		December 31, 2023
Non-Accrual	$	23,969	$	21,407
Substandard Accruing	102,830		131,689
Total Classified	126,799		153,096
Special Mention	104,832		91,502
Total Criticized	$	231,631	$	244,598

A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral-dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of individually analyzed collateral-dependent loans by loan portfolio segment:


	Type of Collateral
(In thousands)	Real Estate		Investment Securities/Cash		Other
September 30, 2024
Construction	$	—	$	—	$	—
Commercial multifamily	4,216		—		—
Commercial real estate owner occupied	1,563		—		—
Commercial real estate non-owner occupied	309		—		—
Commercial and industrial	4,129		—		736

Residential real estate	1,548		—		—
Home equity	52		—		—
Consumer other	—		—		—
Total loans	$	11,817	$	—	$	736

December 31, 2023
Construction	$	—	$	—	$	—
Commercial multifamily	—		—		—
Commercial real estate owner occupied	650		—		—
Commercial real estate non-owner occupied	342		—		—
Commercial and industrial	4,788		—		944

Residential real estate	5,035		—		—
Home equity	135		—		—
Consumer other	40		—		—
Total loans	$	10,990	$	—	$	944

Modified Loans

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant 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 concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the "combination" columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension and principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction.

The following tables present the amortized cost basis of loans at September 30, 2024 and September 30, 2023 that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2024 and September 30, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:


(In thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Three months ended September 30, 2024
Construction	$	—	$	—	$	—	$	—	$	—	$	—	—	%
Commercial multifamily	—		—		—		—		—		—		—
Commercial real estate owner occupied	—		—		—		—		—		—		—
Commercial real estate non-owner occupied	—		—		—		—		—		—		—
Commercial and industrial	—		—		12,181		—		—		—		0.88
Residential real estate	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—
Consumer other	—		—		—		—		—		—		—
Total	$	—	$	—	$	12,181	$	—	$	—	$	—	0.04	%

The Company has committed to lend additional amounts totaling $5.8 million to the commercial and industrial borrowers included in the previous table.


(In thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Three months ended September 30, 2023
Construction	$	—	$	—	$	—	$	—	$	—	$	—	—	%
Commercial multifamily	—		—		—		—		—		—		—
Commercial real estate owner occupied	—		—		—		—		—		—		—
Commercial real estate non-owner occupied	—		—		—		—		—		—		—
Commercial and industrial	—		34		6,240		—		—		—		0.46
Residential real estate	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—
Consumer other	—		—		—		—		—		—		—
Total	$	—	$	34	$	6,240	$	—	$	—	$	—	0.07	%

The Company has not committed to lend additional amounts to the borrowers included in the previous table.


(In thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Nine months ended September 30, 2024
Construction	$	—	$	—	$	—	$	—	$	—	$	—	—	%
Commercial multifamily	—		—		—		—		—		—		—
Commercial real estate owner occupied	—		—		—		—		—		—		—
Commercial real estate non-owner occupied	—		—		648		—		—		—		0.02
Commercial and industrial	—		108		15,918		297		—		—		1.15
Residential real estate	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—
Consumer other	—		—		—		—		—		—		—
Total	$	—	$	108	$	16,566	$	297	$	—	$	—	0.08	%

The Company has committed to lend additional amounts totaling $5.8 million to the commercial and industrial borrowers included in the previous table.


(In thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Nine months ended September 30, 2023
Construction	$	—	$	—	$	—	$	—	$	—	$	—	—	%
Commercial multifamily	—		—		—		—		—		—		—
Commercial real estate owner occupied	—		387		—		—		—		—		0.06
Commercial real estate non-owner occupied	—		—		11,733		—		—		—		0.85
Commercial and industrial	—		34		7,531		—		10		—		0.56
Residential real estate	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—
Consumer other	—		—		—		—		—		—		—
Total	$	—	$	421	$	19,264	$	—	$	10	$	—	0.22	%

The Company has not committed to lend additional amounts to the borrowers included in the previous table.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. As of September 30, 2024 and September 30, 2023, there were no loans that were modified to borrowers experiencing financial difficulty that were past due.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and nine months ended September 30, 2024 and September 30, 2023.


(In thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension (months)
Three months ended September 30, 2024
Construction	$	—	—	%	0
Commercial multifamily	—		—		0
Commercial real estate owner occupied	—		—		0
Commercial real estate non-owner occupied	—		—		0
Commercial and industrial	—		—		9
Residential real estate	—		—		0
Home equity	—		—		0
Consumer other	—		—		0


(In thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension (months)
Three months ended September 30, 2023
Construction	$	—	—	%	0
Commercial multifamily	—		—		0
Commercial real estate owner occupied	—		—		0
Commercial real estate non-owner occupied	—		—		0
Commercial and industrial	—		—		17
Residential real estate	—		—		0
Home equity	—		—		0
Consumer other	—		—		0


(In thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension (months)
Nine months ended September 30, 2024
Construction	$	—	—	%	0
Commercial multifamily	—		—		0
Commercial real estate owner occupied	—		—		0
Commercial real estate non-owner occupied	—		—		62
Commercial and industrial	—		10.75		10
Residential real estate	—		—		0
Home equity	—		—		0
Consumer other	—		—		0


(In thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension (months)
Nine months ended September 30, 2023
Construction	$	—	—	%	0
Commercial multifamily	—		—		0
Commercial real estate owner occupied	—		—		120
Commercial real estate non-owner occupied	—		—		12
Commercial and industrial	—		1.00		34
Residential real estate	—		—		0
Home equity	—		—		0
Consumer other	—		—		0

The following table presents the amortized cost basis of loans that had a payment default during the three and nine months ended September 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

(in thousands)

Principal Forgiveness

Payment Delay

Term Extension

Interest Rate Reduction

Three months ended September 30, 2024

Construction

—

Commercial multifamily

—

Commercial real estate owner occupied

—

Commercial real estate non-owner occupied

—

Commercial and industrial

—

Residential real estate

—

Home equity

—

Consumer other

—

Total

—


(in thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction
Nine months ended September 30, 2024
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	—		—		—		—
Commercial real estate owner occupied	—		—		—		—
Commercial real estate non-owner occupied	—		—		—		—
Commercial and industrial	—		—		202		—
Residential real estate	—		—		—		—
Home equity	—		—		—		—
Consumer other	—		—		—		—
Total	$	—	$	—	$	202	$	—

There were no loans that had a payment default during the three and nine months ended September 30, 2023 that were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written 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.