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Loans Receivable and Allowance for Credit Losses | 12 Months Ended
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Dec. 31, 2024
Receivables [Abstract] |
Loans Receivable and Allowance for Credit Losses | LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES The following is a summary of loans receivable by segment:
| December 31,
| 2024 |  | 2023
| (Dollars in thousands)
Loan portfolio composition |  |  |
CRE loans | $ | 8,527,008 |  |  | $ | 8,797,884 |
C&I loans | 3,967,596 |  |  | 4,135,044 |
Residential mortgage loans | 1,082,459 |  |  | 883,687 |
Consumer and other loans | 41,209 |  |  | 37,004 |
Total loans receivable, net of deferred costs and fees | 13,618,272 |  |  | 13,853,619 |
Allowance for credit losses | (150,527) |  |  | (158,694) |
Loans receivable, net of allowance for credit losses | $ | 13,467,745 |  |  | $ | 13,694,925 |
The loan portfolio consists of four segments: CRE loans, C&I loans, residential mortgage loans, and consumer and other loans. Commercial real estate (“CRE”) loans cover a broad array of commercial real estate segments including multi-tenant retail, hotels/motels, gas stations & car washes, mixed-use facilities, industrial warehouses, multifamily, single-tenant retail, office and other. CRE loans are extended for the purchase and refinance of commercial real estate and generally secured by first deeds of trust and are collateralized by residential or commercial properties. Repayment of the Company’s CRE loans is largely dependent on either income generated from collateral securing CRE loans or from cash flows from business operations of the borrower. Commercial and Industrial (“C&I”) loans are loans provided to businesses for various purposes such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance activities, and other business-related financing needs. The Company’s C&I loans are primarily secured by accounts receivables, inventory, and equipment. Repayment of C&I loans is generally dependent on the borrower’s business cash flows. Residential mortgage loans are extended for personal, family, or household use and are secured by a first mortgage or deed of trust. Residential mortgage loans are usually secured by the property being financed and repayment is dependent on the borrower’s personal cash flow. The Company’s consumer and other loans primarily consist of home equity, credit card loans, and personal loans. These loans are provided to borrowers on both a secured and unsecured basis but most of the Company’s consumer and other loans are unsecured. Repayment of consumer and other loans is dependent on the borrower’s personal cash flow. The Company had $14.5 million in loans held for sale at December 31, 2024, compared with $3.4 million at December 31, 2023. Loans held for sale at December 31, 2024, consisted of $646 thousand in residential mortgage loans and $13.8 million in C&I loans, compared with $1.1 million in residential mortgage loans, and $2.3 million in CRE loans at December 31, 2023. Loans held for sale are not included in the loans receivable table presented above. The tables below detail the activity in the ACL by portfolio segment for the years ended December 31, 2024 and 2023, and 2022. Charge offs for the year ended December 31, 2024 included $20.1 million in charge offs related to C&I loans. Charge offs for the year ended December 31, 2023, included an idiosyncratic full charge off of $23.4 million related to a borrower that entered into Chapter 7 liquidation in August 2023. Recoveries for the year 2022 included $17.3 million in recoveries from a single lending relationship that had $29.6 million in charge offs during the year 2021.
| CRE Loans |  | C&I Loans |  | Residential Mortgage Loans |  | Consumer and Other Loans |  | Total
| (Dollars in thousands)
December 31, 2024 |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 93,940 |  |  | $ | 51,291 |  |  | $ | 12,838 |  |  | $ | 625 |  |  | $ | 158,694 |
Provision (credit) for credit losses | (5,021) |  |  | 31,818 |  |  | (8,400) |  |  | 3 |  |  | 18,400 |
Loans charged off | (1,108) |  |  | (29,662) |  |  | — |  |  | (318) |  |  | (31,088) |
Recoveries of charge offs | 563 |  |  | 3,796 |  |  | — |  |  | 162 |  |  | 4,521 |
Balance, end of period | $ | 88,374 |  |  | $ | 57,243 |  |  | $ | 4,438 |  |  | $ | 472 |  |  | $ | 150,527 |
December 31, 2023 |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 95,884 |  |  | $ | 56,872 |  |  | $ | 8,920 |  |  | $ | 683 |  |  | $ | 162,359 |
ASU 2022-02 day 1 adoption adjustment | 19 |  |  | (426) |  |  | — |  |  | — |  |  | (407) |
Provision (credit) for credit losses | (2,301) |  |  | 27,233 |  |  | 3,918 |  |  | 250 |  |  | 29,100 |
Loans charged off | (2,947) |  |  | (34,203) |  |  | — |  |  | (370) |  |  | (37,520) |
Recoveries of charge offs | 3,285 |  |  | 1,815 |  |  | — |  |  | 62 |  |  | 5,162 |
Balance, end of period | $ | 93,940 |  |  | $ | 51,291 |  |  | $ | 12,838 |  |  | $ | 625 |  |  | $ | 158,694 |
December 31, 2022 |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 108,440 |  |  | $ | 27,811 |  |  | $ | 3,316 |  |  | $ | 983 |  |  | $ | 140,550 |
Provision (credit) for credit losses | (27,451) |  |  | 31,360 |  |  | 5,626 |  |  | 65 |  |  | 9,600 |
Loans charged off | (6,803) |  |  | (5,160) |  |  | (22) |  |  | (404) |  |  | (12,389) |
Recoveries of charge offs | 21,698 |  |  | 2,861 |  |  | — |  |  | 39 |  |  | 24,598 |
Balance, end of period | $ | 95,884 |  |  | $ | 56,872 |  |  | $ | 8,920 |  |  | $ | 683 |  |  | $ | 162,359 |
The following tables break out the allowance for credit losses and loan balance by measurement methodology at December 31, 2024 and 2023:
| December 31, 2024
| CRE Loans |  | C&I Loans |  | Residential Mortgage Loans |  | Consumer and Other Loans |  | Total
| (Dollars in thousands)
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 880 |  |  | $ | 5,172 |  |  | $ | 37 |  |  | $ | — |  |  | $ | 6,089 |
Collectively evaluated | 87,494 |  |  | 52,071 |  |  | 4,401 |  |  | 472 |  |  | 144,438 |
Total | $ | 88,374 |  |  | $ | 57,243 |  |  | $ | 4,438 |  |  | $ | 472 |  |  | $ | 150,527 |
Loans outstanding: |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 23,235 |  |  | $ | 60,807 |  |  | $ | 6,314 |  |  | $ | 47 |  |  | $ | 90,403 |
Collectively evaluated | 8,503,773 |  |  | 3,906,789 |  |  | 1,076,145 |  |  | 41,162 |  |  | 13,527,869 |
Total | $ | 8,527,008 |  |  | $ | 3,967,596 |  |  | $ | 1,082,459 |  |  | $ | 41,209 |  |  | $ | 13,618,272 |
| December 31, 2023
| CRE Loans |  | C&I Loans |  | Residential Mortgage Loans |  | Consumer and Other Loans |  | Total
| (Dollars in thousands)
Allowance for credit losses: |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 886 |  |  | $ | 1,721 |  |  | $ | 39 |  |  | $ | 14 |  |  | $ | 2,660 |
Collectively evaluated | 93,054 |  |  | 49,570 |  |  | 12,799 |  |  | 611 |  |  | 156,034 |
Total | $ | 93,940 |  |  | $ | 51,291 |  |  | $ | 12,838 |  |  | $ | 625 |  |  | $ | 158,694 |
Loans outstanding: |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 33,932 |  |  | $ | 5,013 |  |  | $ | 5,916 |  |  | $ | 343 |  |  | $ | 45,204 |
Collectively evaluated | 8,763,952 |  |  | 4,130,031 |  |  | 877,771 |  |  | 36,661 |  |  | 13,808,415 |
Total | $ | 8,797,884 |  |  | $ | 4,135,044 |  |  | $ | 883,687 |  |  | $ | 37,004 |  |  | $ | 13,853,619 |
The ACL represents management’s best estimate of future lifetime expected losses on its held for investment loan portfolio. The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company uses a combination of a modeled and non-modeled approach that incorporates current and future economic conditions to estimate lifetime expected losses on a collective basis. The Company uses Probability of Default (“PD”), Loss Given Default (“LGD”), and Exposure at Default (“EAD”) methodologies with quantitative factors and qualitative considerations in calculation of the allowance for credit losses for collectively assessed loans. The Company uses a reasonable and supportable period of 2 years at which point loss assumptions revert back to historical loss information by means of 1 year reversion period. The Company utilizes a consensus forecast scenario published by a third party that incorporates macroeconomic variables including GDP, unemployment rates, interest rates, and commercial real estate prices to project an economic outlook. The forecast scenario is utilized to estimate losses during the reasonable and supportable period. Changes in these assumptions and forecasts could significantly affect the Company’s estimate of future credit losses. See Note 1 “Significant Accounting Policies” for further discussion of the Company’s ACL methodology. The decrease in ACL for the year ended December 31, 2024 compared with December 31, 2023, consisted of a decrease in ACL for collectively evaluated loans, partially offset by an increase in ACL for individually evaluated loans. The year-over-year decrease in ACL for collectively evaluated loans was primarily due to a decline in ACL for residential mortgage loans due to CECL model enhancements made during 2024. The updated model utilizes property values when estimating losses for collectively evaluated residential mortgage loans. The Company maintains a separate ACL for its off-balance sheet unfunded loan commitments. The Company uses a funding rate to allocate the allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn can potentially become drawn at any point. The funding rate is determined based on a lookback period of 8 quarters. Credit loss is not estimated for off-balance sheet credit exposures that are unconditionally cancellable by the Company. At December 31, 2024 and 2023, reserves for unfunded loan commitments recorded in other liabilities were $2.7 million and $3.8 million, respectively. For the years ended December 31, 2024 and 2023, the Company recorded a credit to reserves for unfunded commitments of $1.1 million and an addition to reserves for unfunded commitments of $2.5 million, respectively. Generally, loans are placed on nonaccrual status if principal and/or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to customers whose financial conditions have deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. Generally, payments received on nonaccrual loans are recorded as principal reductions. Loans are returned to accrual status only when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company does not recognize interest income while loans are on nonaccrual status. The tables below represent the amortized cost of nonaccrual loans, as well as loans past due 90 days or more and still on accrual status, by loan segment and broken out by loans with a recorded ACL and those without a recorded ACL at December 31, 2024 and 2023.
|  | December 31, 2024
|  | Nonaccrual with No ACL |  | Nonaccrual with an ACL |  | Total Nonaccrual (1) |  | Accruing Loans Past Due 90 Days or More
|  | (Dollars in thousands)
CRE loans |  | $ | 17,691 |  |  | $ | 5,705 |  |  | $ | 23,396 |  |  | $ | — |
C&I loans |  | 33,005 |  |  | 27,802 |  |  | 60,807 |  |  | 129 |
Residential mortgage loans |  | 2,933 |  |  | 3,381 |  |  | 6,314 |  |  | — |
Consumer and other loans |  | — |  |  | 47 |  |  | 47 |  |  | 100 |
Total |  | $ | 53,629 |  |  | $ | 36,935 |  |  | $ | 90,564 |  |  | $ | 229 |
|  | December 31, 2023
|  | Nonaccrual with No ACL |  | Nonaccrual with an ACL |  | Total Nonaccrual (1) |  | Accruing Loans Past Due 90 Days or More
|  | (Dollars in thousands)
CRE loans |  | $ | 26,724 |  |  | $ | 7,208 |  |  | 33,932 |  |  | $ | — |
C&I loans |  | 2,447 |  |  | 2,566 |  |  | 5,013 |  |  | 184 |
Residential mortgage loans |  | 3,002 |  |  | 2,914 |  |  | 5,916 |  |  | — |
Consumer and other loans |  | — |  |  | 343 |  |  | 343 |  |  | 77 |
Total |  | $ | 32,173 |  |  | $ | 13,031 |  |  | $ | 45,204 |  |  | $ | 261 |
__________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $12.8 million and $11.4 million, at December 31, 2024 and 2023, respectively. The following table presents the amortized cost of collateral-dependent loans at December 31, 2024 and 2023:
|  | December 31, 2024 |  | December 31, 2023
|  | Real Estate Collateral |  | Other Collateral |  | Total |  | Real Estate Collateral |  | Other Collateral |  | Total
|  | (Dollars in thousands)
CRE loans |  | $ | 20,557 |  |  | $ | — |  |  | $ | 20,557 |  |  | $ | 29,803 |  |  | $ | — |  |  | $ | 29,803 |
C&I loans |  | 6,105 |  |  | 53,809 |  |  | 59,914 |  |  | 2,447 |  |  | 1,708 |  |  | 4,155 |
Residential mortgage loans |  | 2,933 |  |  | — |  |  | 2,933 |  |  | 3,002 |  |  | — |  |  | 3,002 |
Total |  | $ | 29,595 |  |  | $ | 53,809 |  |  | $ | 83,404 |  |  | $ | 35,252 |  |  | $ | 1,708 |  |  | $ | 36,960 |
Collateral on loans is a significant portion of what secures collateral-dependent loans and significant changes to the fair value of the collateral can potentially impact ACL. During the years ended December 31, 2024 and 2023, the Company did not have any significant changes to the extent to which collateral secured its collateral-dependent loans due to general deterioration or from other factors. Real estate collateral securing CRE and C&I loans consisted of commercial real estate properties including hotel/motel, building, office, residential mortgage, restaurant, and land properties. Collateral dependent loans secured by other collateral as of December 31, 2024, consisted of loans secured by accounts receivables, inventory, tax credits, and underlying businesses. Collateral dependent loans secured by other collateral as of December 31, 2023, were secured by accounts receivables and inventory. Accrued interest receivable on loans totaled $43.0 million at December 31, 2024, and $49.3 million at December 31, 2023. The following table presents interest income reversals, due to loans being placed on nonaccrual status, by loan segment for the years ended December 31, 2024, 2023, and 2022:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (Dollars in thousands)
CRE loans | $ | 2,150 |  |  | $ | 1,761 |  |  | $ | 1,906 |
C&I loans | 3,655 |  |  | 1,127 |  |  | 307 |
Residential mortgage loans | 10 |  |  | 40 |  |  | 309 |
Consumer and other loans | — |  |  | — |  |  | 1 |
Total | $ | 5,815 |  |  | $ | 2,928 |  |  | $ | 2,523 |
The following table presents the amortized cost of past due loans, including nonaccrual loans past due 30 days or more, by the number of days past due at December 31, 2024 and 2023, by loan segment:
| December 31, 2024 |  | December 31, 2023
| 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due
| (Dollars in thousands)
CRE loans | $ | 1,820 |  |  | $ | 1,917 |  |  | $ | 6,021 |  |  | $ | 9,758 |  |  | $ | 1,999 |  |  | $ | 2,976 |  |  | $ | 10,197 |  |  | $ | 15,172 |
C&I loans | 2,516 |  |  | 10,250 |  |  | 23,079 |  |  | 35,845 |  |  | 934 |  |  | 533 |  |  | 1,717 |  |  | 3,184 |
Residential mortgage loans | 5,926 |  |  | 5,445 |  |  | 2,845 |  |  | 14,216 |  |  | 1,534 |  |  | — |  |  | 2,339 |  |  | 3,873 |
Consumer and other loans | 190 |  |  | 289 |  |  | 109 |  |  | 588 |  |  | 214 |  |  | 48 |  |  | 77 |  |  | 339 |
Total Past Due | $ | 10,452 |  |  | $ | 17,901 |  |  | $ | 32,054 |  |  | $ | 60,407 |  |  | $ | 4,681 |  |  | $ | 3,557 |  |  | $ | 14,330 |  |  | $ | 22,568 |
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. Homogeneous loans (i.e., home mortgage loans, home equity lines of credit, overdraft loans, express business loans, and automobile loans) are not risk rated and credit risk is analyzed largely by the number of days past due. This analysis is performed at least on a quarterly basis. The following tables present the amortized cost basis of loans receivable by segment, risk rating, and year of origination, renewal, or major modification at December 31, 2024 and 2023.
|  | December 31, 2024
|  | Term Loan by Origination Year |  | Revolving Loans |  | Total
|  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | Prior |
|  | (Dollars in thousands)
CRE loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 866,696 |  |  | $ | 564,267 |  |  | $ | 2,316,371 |  |  | $ | 1,885,509 |  |  | $ | 1,111,807 |  |  | $ | 1,535,735 |  |  | $ | 117,265 |  |  | $ | 8,397,650 |
Special mention |  | — |  |  | 15,000 |  |  | 9,879 |  |  | 7,800 |  |  | 1,853 |  |  | 8,778 |  |  | 799 |  |  | 44,109 |
Substandard |  | — |  |  | 966 |  |  | 4,908 |  |  | 32,863 |  |  | 5,469 |  |  | 41,043 |  |  | — |  |  | 85,249 |
Subtotal |  | $ | 866,696 |  |  | $ | 580,233 |  |  | $ | 2,331,158 |  |  | $ | 1,926,172 |  |  | $ | 1,119,129 |  |  | $ | 1,585,556 |  |  | $ | 118,064 |  |  | $ | 8,527,008 |
Year-to-date gross charge offs |  | $ | — |  |  | $ | — |  |  | $ | 165 |  |  | $ | — |  |  | $ | 101 |  |  | $ | 842 |  |  | $ | — |  |  | $ | 1,108 |
C&I loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,426,813 |  |  | $ | 494,432 |  |  | $ | 743,004 |  |  | $ | 348,107 |  |  | $ | 102,725 |  |  | $ | 43,377 |  |  | $ | 495,141 |  |  | $ | 3,653,599 |
Special mention |  | 1,773 |  |  | 16,116 |  |  | 23,831 |  |  | 24,197 |  |  | — |  |  | 14,692 |  |  | 54,355 |  |  | 134,964 |
Substandard |  | 11,990 |  |  | 7,774 |  |  | 19,829 |  |  | 37,320 |  |  | 113 |  |  | 862 |  |  | 55,330 |  |  | 133,218 |
Doubtful/Loss |  | $ | 211 |  |  | $ | 17,446 |  |  | $ | 28,158 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | 45,815 |
Subtotal |  | $ | 1,440,787 |  |  | $ | 535,768 |  |  | $ | 814,822 |  |  | $ | 409,624 |  |  | $ | 102,838 |  |  | $ | 58,931 |  |  | $ | 604,826 |  |  | $ | 3,967,596 |
Year-to-date gross charge offs |  | $ | — |  |  | $ | 2,214 |  |  | $ | 27,239 |  |  | $ | 107 |  |  | $ | — |  |  | $ | 102 |  |  | $ | — |  |  | $ | 29,662 |
Residential mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 286,539 |  |  | $ | 82,682 |  |  | $ | 344,940 |  |  | $ | 239,124 |  |  | $ | 1,320 |  |  | $ | 121,287 |  |  | $ | — |  |  | $ | 1,075,892 |
Special mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | 968 |  |  | 1,803 |  |  | 3,796 |  |  | — |  |  | 6,567 |
Subtotal |  | $ | 286,539 |  |  | $ | 82,682 |  |  | $ | 344,940 |  |  | $ | 240,092 |  |  | $ | 3,123 |  |  | $ | 125,083 |  |  | $ | — |  |  | $ | 1,082,459 |
Year-to-date gross charge offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 6,386 |  |  | $ | 642 |  |  | $ | 192 |  |  | $ | 162 |  |  | $ | 875 |  |  | $ | 8,318 |  |  | $ | 24,587 |  |  | $ | 41,162 |
Special mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 47 |  |  | — |  |  | 47 |
Subtotal |  | $ | 6,386 |  |  | $ | 642 |  |  | $ | 192 |  |  | $ | 162 |  |  | $ | 875 |  |  | $ | 8,365 |  |  | $ | 24,587 |  |  | $ | 41,209 |
Year-to-date gross charge offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 318 |  |  | $ | 318 |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 2,586,434 |  |  | $ | 1,142,023 |  |  | $ | 3,404,507 |  |  | $ | 2,472,902 |  |  | $ | 1,216,727 |  |  | $ | 1,708,717 |  |  | $ | 636,993 |  |  | $ | 13,168,303 |
Special mention |  | 1,773 |  |  | 31,116 |  |  | 33,710 |  |  | 31,997 |  |  | 1,853 |  |  | 23,470 |  |  | 55,154 |  |  | 179,073 |
Substandard |  | 11,990 |  |  | 8,740 |  |  | 24,737 |  |  | 71,151 |  |  | 7,385 |  |  | 45,748 |  |  | 55,330 |  |  | 225,081 |
Doubtful/Loss |  | 211 |  |  | 17,446 |  |  | 28,158 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 45,815 |
Total |  | $ | 2,600,408 |  |  | $ | 1,199,325 |  |  | $ | 3,491,112 |  |  | $ | 2,576,050 |  |  | $ | 1,225,965 |  |  | $ | 1,777,935 |  |  | $ | 747,477 |  |  | $ | 13,618,272 |
Total year-to-date gross charge offs |  | $ | — |  |  | $ | 2,214 |  |  | $ | 27,404 |  |  | $ | 107 |  |  | $ | 101 |  |  | $ | 944 |  |  | $ | 318 |  |  | $ | 31,088 |
|  | December 31, 2023
|  | Term Loan by Origination Year |  | Revolving Loans |  | Total
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |
|  | (Dollars in thousands)
CRE loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 623,058 |  |  | $ | 2,429,146 |  |  | $ | 2,045,863 |  |  | $ | 1,239,654 |  |  | $ | 996,483 |  |  | $ | 1,297,295 |  |  | $ | 79,426 |  |  | $ | 8,710,925 |
Special mention |  | — |  |  | 2,001 |  |  | 15,452 |  |  | 2,518 |  |  | 5,963 |  |  | 5,196 |  |  | — |  |  | 31,130 |
Substandard |  | — |  |  | 1,549 |  |  | 7,300 |  |  | 2,711 |  |  | 2,083 |  |  | 42,186 |  |  | — |  |  | 55,829 |
Subtotal |  | $ | 623,058 |  |  | $ | 2,432,696 |  |  | $ | 2,068,615 |  |  | $ | 1,244,883 |  |  | $ | 1,004,529 |  |  | $ | 1,344,677 |  |  | $ | 79,426 |  |  | $ | 8,797,884 |
Year-to-date gross charge offs |  | $ | 103 |  |  | $ | 315 |  |  | $ | — |  |  | $ | 233 |  |  | $ | 355 |  |  | $ | 1,941 |  |  | $ | — |  |  | $ | 2,947 |
C&I loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,107,219 |  |  | $ | 1,208,795 |  |  | $ | 683,821 |  |  | $ | 203,142 |  |  | $ | 162,815 |  |  | $ | 61,019 |  |  | $ | 479,266 |  |  | $ | 3,906,077 |
Special mention |  | 9,743 |  |  | 23,413 |  |  | 31,388 |  |  | 8,597 |  |  | 14,614 |  |  | — |  |  | 60,107 |  |  | 147,862 |
Substandard |  | 7,158 |  |  | 53,213 |  |  | 8,480 |  |  | 8,637 |  |  | 290 |  |  | 2,358 |  |  | 969 |  |  | 81,105 |
Subtotal |  | $ | 1,124,120 |  |  | $ | 1,285,421 |  |  | $ | 723,689 |  |  | $ | 220,376 |  |  | $ | 177,719 |  |  | $ | 63,377 |  |  | $ | 540,342 |  |  | $ | 4,135,044 |
Year-to-date gross charge offs |  | $ | 5,011 |  |  | $ | 12,323 |  |  | $ | 16,020 |  |  | $ | 128 |  |  | $ | 182 |  |  | $ | 539 |  |  | $ | — |  |  | $ | 34,203 |
Residential mortgage loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 93,982 |  |  | $ | 365,252 |  |  | $ | 263,977 |  |  | $ | 1,356 |  |  | $ | 29,063 |  |  | $ | 123,885 |  |  | $ | — |  |  | $ | 877,515 |
Special mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | 314 |  |  | 1,836 |  |  | 957 |  |  | 3,065 |  |  | — |  |  | 6,172 |
Subtotal |  | $ | 93,982 |  |  | $ | 365,252 |  |  | $ | 264,291 |  |  | $ | 3,192 |  |  | $ | 30,020 |  |  | $ | 126,950 |  |  | $ | — |  |  | $ | 883,687 |
Year-to-date gross charge offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 3,985 |  |  | $ | 944 |  |  | $ | 278 |  |  | $ | 2,068 |  |  | $ | 371 |  |  | $ | 8,221 |  |  | $ | 20,794 |  |  | $ | 36,661 |
Special mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 343 |  |  | — |  |  | 343 |
Subtotal |  | $ | 3,985 |  |  | $ | 944 |  |  | $ | 278 |  |  | $ | 2,068 |  |  | $ | 371 |  |  | $ | 8,564 |  |  | $ | 20,794 |  |  | $ | 37,004 |
Year-to-date gross charge offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 370 |  |  | $ | 370 |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,828,244 |  |  | $ | 4,004,137 |  |  | $ | 2,993,939 |  |  | $ | 1,446,220 |  |  | $ | 1,188,732 |  |  | $ | 1,490,420 |  |  | $ | 579,486 |  |  | $ | 13,531,178 |
Special mention |  | 9,743 |  |  | 25,414 |  |  | 46,840 |  |  | 11,115 |  |  | 20,577 |  |  | 5,196 |  |  | 60,107 |  |  | 178,992 |
Substandard |  | 7,158 |  |  | 54,762 |  |  | 16,094 |  |  | 13,184 |  |  | 3,330 |  |  | 47,952 |  |  | 969 |  |  | 143,449 |
Total |  | $ | 1,845,145 |  |  | $ | 4,084,313 |  |  | $ | 3,056,873 |  |  | $ | 1,470,519 |  |  | $ | 1,212,639 |  |  | $ | 1,543,568 |  |  | $ | 640,562 |  |  | $ | 13,853,619 |
Total year-to-date gross charge offs |  | $ | 5,114 |  |  | $ | 12,638 |  |  | $ | 16,020 |  |  | $ | 361 |  |  | $ | 537 |  |  | $ | 2,480 |  |  | $ | 370 |  |  | $ | 37,520 |
For the years ended December 31, 2024 and 2023, there were no revolving loans converted to term loans. The Company may reclassify loans held for investment to loans held for sale in the event that the Company plans to sell loans that were originated with the intent to hold to maturity. Loans transferred from held for investment to held for sale are carried at the lower of cost or fair value. The breakdown of loans by segment that were reclassified from held for investment to held for sale for the years ended December 31, 2024, 2023, and 2022 are presented in the following table:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Transfer of loans held for investment to held for sale | (Dollars in thousands)
CRE loans | $ | 154,451 |  |  | $ | 114,186 |  |  | $ | 257,317 |
C&I loans | 101,007 |  |  | 307,209 |  |  | 54,218 |
Total | $ | 255,458 |  |  | $ | 421,395 |  |  | $ | 311,535 |
Loan Modifications to Borrowers Experiencing Financial Difficulty A summary of loans modified to borrowers experiencing financial difficulty for the periods presented, disaggregated by loan class and type of modification, is shown in the tables below:
| Year Ended December 31, 2024
| CRE Loans |  | C&I Loans |  | Residential Mortgage Loans |  | Consumer and Other Loans |  | Total
| (Dollars in thousands)
Principal forgiveness | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest rate reduction | — |  |  | — |  |  | — |  |  | — |  |  | — |
Payment delay | — |  |  | 21,136 |  |  | — |  |  | — |  |  | 21,136 |
Term extension | — |  |  | 50,148 |  |  | — |  |  | — |  |  | 50,148 |
Total Loan Modifications | $ | — |  |  | $ | 71,284 |  |  | $ | — |  |  | $ | — |  |  | $ | 71,284 |
% of Loan Class | — | % |  | 1.80 | % |  | — | % |  | — | % |  | 0.52 | %
| Year Ended December 31, 2023
| CRE Loans |  | C&I Loans |  | Residential Mortgage Loans |  | Consumer and Other Loans |  | Total
| (Dollars in thousands)
Principal forgiveness | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest rate reduction | — |  |  | — |  |  | — |  |  | — |  |  | — |
Payment delay | — |  |  | — |  |  | — |  |  | — |  |  | — |
Term extension | 1,111 |  |  | 27,032 |  |  | — |  |  | — |  |  | 28,143 |
Total Loan Modifications | $ | 1,111 |  |  | $ | 27,032 |  |  | $ | — |  |  | $ | — |  |  | $ | 28,143 |
% of Loan Class | 0.01 | % |  | 0.65 | % |  | — | % |  | — | % |  | 0.20 | %
The following table describes the financial effect of the loan modifications made to borrowers experiencing financial difficulty for the periods presented:
|  | Financial Effect
Modification & Loan Types |  | Description of Financial Effect |  | Year Ended December 31, 2024 |  | Year Ended December 31, 2023
Principal forgiveness |  |  |  |  |  |
C&I loans |  | Forgiveness of principal totaling: |  | $4.4 million |  | $ | — |
Payment delay |  |  |  |  |  |
C&I loans |  | Length of payment delay by a weighted average of : |  | 0.8 years |  | 0.0 years
Term extension |  |  |  |  |  |
CRE loans |  | Extended term by a weighted average of: |  | 0.0 years |  | 0.3 years
C&I loans |  | Extended term by a weighted average of: |  | 0.0 years |  | 0.3 years
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. During the twelve months ended December 31, 2024, the Company had one C&I loan totaling $4.8 million that was modified through a term extension during the twelve months ended December 31, 2024 that had a payment default in 2024. There were no other payment defaults during the twelve months ended December 31, 2024 for loans that were modified in 2024 to borrowers experiencing financial difficulty. There were no loan modifications made in 2023 to borrowers experiencing financial difficulty that had payment defaults during the twelve months ended months ended December 31, 2023. Related Party Loans In the ordinary course of business, the Company enters into loan transactions with certain of its directors and executives or associates of such directors or executives (“Related Parties”). All loans to Related Parties were made at substantially the same terms and conditions at the time of origination as other originated loans to borrowers that were not affiliated with the Company. All loans to Related Parties were current at December 31, 2024 and 2023, and the outstanding principal balance at December 31, 2024 and 2023, was $84.0 million and $86.2 million, respectively. Loans to Related Parties at December 31, 2024 and 2023, consisted of $84.0 million and $86.2 million, respectively in CRE loans. The decrease in Related Party loans from December 31, 2023 to December 31, 2024, was due to principal paydowns of $2.2 million.

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