XML 25 R13.htm IDEA: XBRL DOCUMENT

Note 5 - Loans and the Allowance for Credit Losses

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 5. Loans and the Allowance for Credit Losses

Loans Receivable – The following table sets forth the composition of the Company’s loan portfolio segments, including net deferred loan fees, as of March 31, 2024 and December 31, 2023:

		March 31, 2024				December 31, 2023
		(dollars in thousands)
Commercial		$	1,572,494			$	1,578,730
Commercial real estate			5,829,950				5,895,545
Commercial construction			646,593				620,496
Residential real estate			254,214				256,041
Consumer			850				1,029
Gross loans			8,304,101				8,351,841
Net deferred loan fees			(6,144	)			(6,696	)
Total loans receivable		$	8,297,957			$	8,345,145

As of March 31, 2024 and December 31, 2023, loans totaling approximately $6.1 billion and $5.8 billion, respectively, were pledged to secure borrowings from the FHLB of New York and the Federal Reserve Bank of New York.

There were no loans held-for-sale as of March 31, 2024 and December 31, 2023.

Loans Receivable on Nonaccrual Status - The following tables present the carrying value of nonaccrual loans with an ACL and the carrying value of nonaccrual loans without an ACL as of March 31, 2024 and December 31, 2023:

		March 31, 2024
		Nonaccrual loans with ACL				Nonaccrual loans without ACL				Total nonaccrual loans
		(dollars in thousands)
Commercial		$	1,683			$	10,957			$	12,640
Commercial real estate			65				33,210				33,275
Residential real estate			691				832				1,523
Total		$	2,439			$	44,999			$	47,438

		December 31, 2023
		Nonaccrual loans with ACL				Nonaccrual loans without ACL				Total nonaccrual loans
		(dollars in thousands)
Commercial		$	1,763			$	11,064			$	12,827
Commercial real estate			8,013				28,179				36,192
Residential real estate			1,033				2,472				3,505
Total		$	10,809			$	41,715			$	52,524

Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated and individually evaluated.

Credit Quality Indicators - The Company continuously monitors the credit quality of its loans receivable. In addition to its internal monitoring, the Company utilizes the services of a third-party loan review firm to periodically validate the credit quality of its loans receivable on a sample basis. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified “Pass” are deemed to possess average to superior credit quality, requiring no more than normal attention. Assets classified as “Special Mention” have generally acceptable credit quality yet possess higher risk characteristics/circumstances than satisfactory assets. Such conditions include strained liquidity, slow pay, stale financial statements, or other conditions that require more stringent attention from the lending staff. These conditions, if not corrected, may weaken the credit quality or inadequately protect the Company’s credit position at some future date. Assets are classified “Substandard” if the asset has a well-defined weakness that requires management’s attention to a greater degree than for loans classified special mention. Such weakness, if left uncorrected, could possibly result in the compromised ability of the loan to perform to contractual requirements. An asset is classified as “Doubtful” if it is inadequately protected by the net worth and/or paying capacity of the obligor or of the collateral, if any, that secures the obligation. Assets classified as doubtful include assets for which there is a “distinct possibility” that a degree of loss will occur if the inadequacies are not corrected.

We evaluate whether a modification, extension or renewal of a loan is a current period origination in accordance with GAAP. Generally, loans up for renewal are subject to a full credit evaluation before the renewal is granted and such loans are considered current period originations for purpose of the table below. The following table presents loans by origination, risk designation and gross charge-offs as of and during the three months ended March 31, 2024 (dollars in thousands):

		*Term loans amortized cost basis by origination year*
		*2024*				*2023*				*2022*				*2021*				*2020*				*Prior*				*Revolving Loans*				*Total Gross Loans*
Commercial
Pass		$	8,719			$	163,629			$	253,890			$	257,399			$	37,512			$	112,276			$	706,574			$	1,539,999
Special mention			-				-				10,687				-				18				3,945				3,184				17,834
Substandard			-				250				124				236				-				12,998				1,053				14,661
Doubtful			-				-				-				-				-				-				-				-
Total commercial		$	8,719			$	163,879			$	264,701			$	257,635			$	37,530			$	129,219			$	710,811			$	1,572,494
YTD gross charge-offs		$	-			$	-			$	300			$	-			$	-			$	-			$	-			$	300

Commercial Real Estate
Pass		$	55,180			$	247,846			$	1,557,645			$	1,564,163			$	343,799			$	1,521,233			$	478,777			$	5,768,643
Special mention			-				-				-				-				-				22,723				-				22,723
Substandard			-				-				-				1,878				-				19,921				16,785				38,584
Doubtful			-				-				-				-				-				-				-				-
Total commercial real estate		$	55,180			$	247,846			$	1,557,645			$	1,566,041			$	343,799			$	1,563,877			$	495,562			$	5,829,950
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	2,885			$	-			$	2,885

Commercial Construction
Pass		$	5,250			$	582			$	4,201			$	15,608			$	6,236			$	-			$	606,016			$	637,893
Special mention			-				-				-				-				-				-				8,700				8,700
Substandard			-				-				-				-				-				-				-				-
Doubtful			-				-				-				-				-				-				-				-
Total commercial construction		$	5,250			$	582			$	4,201			$	15,608			$	6,236			$	-			$	614,716			$	646,593
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Residential
Pass		$	4,466			$	15,268			$	42,558			$	21,832			$	21,396			$	107,917			$	35,797			$	249,234
Special mention			-				-				-				-				-				647				2,810				3,457
Substandard			-				-				-				547				-				735				241				1,523
Doubtful			-				-				-				-				-				-				-				-
Total residential real estate		$	4,466			$	15,268			$	42,558			$	22,379			$	21,396			$	109,299			$	38,848			$	254,214
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Consumer
Pass		$	706			$	29			$	36			$	-			$	5			$	-			$	74			$	850
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				-				-
Doubtful			-				-				-				-				-				-				-				-
Total consumer		$	706			$	29			$	36			$	-			$	5			$	-			$	74			$	850
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Total
Pass		$	74,321			$	427,354			$	1,858,330			$	1,859,002			$	408,948			$	1,741,426			$	1,827,238			$	8,196,619
Special mention			-				-				10,687				-				18				27,315				14,694				52,714
Substandard			-				250				124				2,661				-				33,654				18,079				54,768
Doubtful			-				-				-				-				-				-				-				-
Grand total		$	74,321			$	427,604			$	1,869,141			$	1,861,663			$	408,966			$	1,802,395			$	1,860,011			$	8,304,101
YTD gross charge-offs		$	-			$	-			$	300			$	-			$	-			$	2,885			$	-			$	3,185

The following table presents loans by origination, risk designation and gross charge-offs as of and for the year ended December 31, 2023 (dollars in thousands):

		*Term loans amortized cost basis by origination year*
		*2023*				*2022*				*2021*				*2020*				*2019*				*Prior*				*Revolving Loans*				*Total Gross Loans*
Commercial
Pass		$	178,582			$	252,151			$	265,705			$	38,909			$	13,726			$	112,145			$	684,779			$	1,545,997
Special mention			-				10,620				-				-				562				3,417				3,199				17,798
Substandard			250				439				241				1				612				11,695				1,697				14,935
Doubtful			-				-				-				-				-				-				-				-
Total commercial		$	178,832			$	263,210			$	265,946			$	38,910			$	14,900			$	127,257			$	689,675			$	1,578,730
YTD gross charge-offs		$	54			$	3,397			$	-			$	-			$	280			$	11,094			$	63			$	14,888

Commercial real estate
Pass		$	248,660			$	1,561,841			$	1,585,109			$	352,445			$	353,391			$	1,232,240			$	497,588			$	5,831,274
Special mention			-				-				-				-				-				24,202				-				24,202
Substandard			-				-				1,888				-				1,255				20,141				16,785				40,069
Doubtful			-				-				-				-				-				-				-				-
Total commercial real estate		$	248,660			$	1,561,841			$	1,586,997			$	352,445			$	354,646			$	1,276,583			$	514,373			$	5,895,545
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	2,142			$	-			$	2,142

Commercial construction
Pass		$	582			$	5,463			$	15,645			$	6,236			$	-			$	-			$	583,870			$	611,796
Special mention			-				-				-				-				-				-				8,700				8,700
Substandard			-				-				-				-				-				-				-				-
Doubtful			-				-				-				-				-				-				-				-
Total commercial construction		$	582			$	5,463			$	15,645			$	6,236			$	-			$	-			$	592,570			$	620,496
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Residential real estate
Pass		$	15,455			$	42,830			$	21,987			$	21,704			$	19,896			$	91,114			$	36,082			$	249,068
Special mention			-				-				-				-				-				651				2,817				3,468
Substandard			-				-				555				-				-				2,144				806				3,505
Doubtful			-				-				-				-				-				-				-				-
Total residential real estate		$	15,455			$	42,830			$	22,542			$	21,704			$	19,896			$	93,909			$	39,705			$	256,041
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	18			$	18

Consumer
Pass		$	849			$	83			$	-			$	5			$	-			$	-			$	92			$	1,029
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				-				-
Doubtful			-				-				-				-				-				-				-				-
Total consumer		$	849			$	83			$	-			$	5			$	-			$	-			$	92			$	1,029
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	1			$	1

Total
Pass		$	444,128			$	1,862,368			$	1,888,446			$	419,299			$	387,013			$	1,435,499			$	1,802,411			$	8,239,164
Special mention			-				10,620				-				-				562				28,270				14,716				54,168
Substandard			250				439				2,684				1				1,867				33,980				19,288				58,509
Doubtful			-				-				-				-				-				-				-				-
Grand total		$	444,378			$	1,873,427			$	1,891,130			$	419,300			$	389,442			$	1,497,749			$	1,836,415			$	8,351,841
YTD gross charge-offs		$	54			$	3,397			$	-			$	-			$	280			$	13,236			$	82			$	17,049

Collateral Dependent Loans: Loans which meet certain criteria are individually evaluated as part of the process of calculating the allowance for credit losses. The evaluation is determined on an individual basis using the fair value of the collateral as of the reporting date. The following table presents collateral dependent loans that were individually evaluated for impairment as of March 31, 2024 and December 31, 2023:

		March 31, 2024
		Real Estate				Other				Total
		(dollars in thousands)
Commercial		$	1,700			$	10,280			$	11,980
Commercial real estate			33,210				-				33,210
Commercial construction			-				-				-
Residential real estate			832				-				832
Total		$	35,742			$	10,280			$	46,022

		December 31, 2023
		Real Estate				Other				Total
		(dollars in thousands)
Commercial		$	4,949			$	10,387			$	15,336
Commercial real estate			39,986				-				39,986
Commercial construction			8,700				-				8,700
Residential real estate			5,941				-				5,941
Total		$	59,576			$	10,387			$	69,963

Aging Analysis - The following table provides an analysis of the aging of the loans by class, excluding the effect of net deferred fees, which are past due as of March 31, 2024 and December 31, 2023:

		March 31, 2024
		30-59 Days Past Due				60-89 Days Past Due				90 Days or Greater Past Due and Still Accruing				Nonaccrual				Total Past Due and Nonaccrual				Current				Gross Loans
		(dollars in thousands)
Commercial		$	495			$	-			$	-			$	12,640			$	13,135			$	1,559,359			$	1,572,494
Commercial real estate			525				-				-				33,275				33,800				5,796,150				5,829,950
Commercial construction			-				-				23,600				-				23,600				622,993				646,593
Residential real estate			1,942				-				-				1,523				3,465				250,749				254,214
Consumer			99				-				-				-				99				751				850
Total		$	3,061			$	-			$	23,600			$	47,438			$	74,099			$	8,230,002			$	8,304,101

As of March 31, 2024, one loan for $23.6 million was past due more than 90 days and still accruing; the loan is well-secured at a loan-to-value of approximately 60% and is in the process of collection.

		December 31, 2023
		30-59 Days Past Due				60-89 Days Past Due				90 Days or Greater Past Due and Still Accruing				Nonaccrual				Total Past Due and Nonaccrual				Current				Gross Loans
		(dollars in thousands)
Commercial		$	555			$	-			$	-			$	12,827			$	13,382			$	1,565,348			$	1,578,730
Commercial real estate			527				-				-				36,192				36,719				5,858,826				5,895,545
Commercial construction			-				23,600				-				-				23,600				596,896				620,496
Residential real estate			275				226				-				3,505				4,006				252,035				256,041
Consumer			-				-				-				-				-				1,029				1,029
Total		$	1,357			$	23,826			$	-			$	52,524			$	77,707			$	8,274,134			$	8,351,841

The following tables detail, at the period-end presented, the amount of gross loans (excluding loans held-for-sale) that are evaluated individually, and collectively, for impairment, those acquired with deteriorated quality, and the related portion of the allowance for credit losses that are allocated to each loan portfolio segment:

		March 31, 2024
		Commercial				Commercial real estate				Commercial construction				Residential real estate				Consumer				Total
		(dollars in thousands)
Allowance for credit losses - loans
Individually analyzed		$	-			$	-			$	-			$	-			$	-			$	-
Collectively evaluated			20,475				52,794				5,011				4,326				3				82,609
Acquired with deteriorated credit quality			260				-				-				-				-				260
Total		$	20,735			$	52,794			$	5,011			$	4,326			$	3			$	82,869

Gross loans
Individually analyzed		$	11,980			$	33,210			$	-			$	832			$	-			$	46,022
Collectively evaluated			1,560,040				5,796,740				646,593				253,382				850				8,257,605
Acquired with deteriorated credit quality			474				-				-				-				-				474
Total		$	1,572,494			$	5,829,950			$	646,593			$	254,214			$	850			$	8,304,101

		December 31, 2023
		Commercial				Commercial real estate				Commercial construction				Residential real estate				Consumer				Total
		(dollars in thousands)
Allowance for credit losses - loans
Individually analyzed		$	-			$	941			$	-			$	-			$	-			$	941
Collectively evaluated			20,215				51,337				4,739				4,320				5				80,616
Acquired with deteriorated credit quality			417				-				-				-				-				417
Total		$	20,632			$	52,278			$	4,739			$	4,320			$	5			$	81,974

Gross loans
Individually analyzed		$	15,336			$	39,986			$	8,700			$	5,941			$	-			$	69,963
Collectively evaluated			1,562,910				5,855,559				611,796				250,100				1,029				8,281,394
Acquired with deteriorated credit quality			484				-				-				-				-				484
Total		$	1,578,730			$	5,895,545			$	620,496			$	256,041			$	1,029			$	8,351,841

Activity in the Company’s ACL for loans for the three months ended March 31, 2024 is summarized in the tables below.

		Three Months Ended March 31, 2024
		Commercial				Commercial real estate				Commercial construction				Residential real estate				Consumer				Total
		(dollars in thousands)
Balance as of December 31, 2023		$	20,632			$	52,278			$	4,739			$	4,320			$	5			$	81,974
Charge-offs			(300	)			(2,885	)			-				-				-				(3,185	)
Recoveries			23				-				-				-				-				23
Provision for (reversal of) credit losses - loans			380				3,401				272				6				(2	)			4,057

Balance as of March 31, 2024		$	20,735			$	52,794			$	5,011			$	4,326			$	3			$	82,869

Activity in the Company’s ACL for loans for the three months ended March 31, 2023 is summarized in the table below.

		Three Months Ended March 31, 2023
		Commercial				Commercial real estate				Commercial construction				Residential real estate				Consumer				Total
		(dollars in thousands)
Balance as of December 31, 2022		$	28,903			$	53,742			$	3,718			$	4,143			$	7			$	90,513
Charge-offs			(2,767	)			(1,717	)			-				-				-				(4,484	)
Recoveries			-				-				-				1				-				1
Provision for (reversal of) credit losses - loans			26				975				248				(276	)			(1	)			972

Balance as of March 31, 2023		$	26,162			$	53,000			$	3,966			$	3,868			$	6			$	87,002

Loan Modifications to Borrowers Experiencing Financial Difficulty:

The following tables presents the amortized cost basis at the end of the reporting period of the loan modifications to borrowers experiencing financial difficulty and the percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the gross loans of the relevant loan segment. The total percentage represents the total modified loans as compared to the total gross loans balance.

		Three Months Ended
		March 31, 2024
		Term Extension				Payment Deferral				Interest Rate Reduction				Total				% of Portfolio Loan Segment
		(dollars in thousands)
Commercial		$	-			$	126			$	-			$	126				0.01	%

The above table consists of one commercial loan that was modified, receiving a payment deferral of three months.

		Three Months Ended
		March 31, 2023
		Term Extension				Payment Deferral				Interest Rate Reduction				Total				% of Portfolio Loan Segment
		(dollars in thousands)
Commercial		$	63			$	-			$	-			$	63				0.01	%

The above table consists of one commercial loan on which 3.0 years was added to the life of the modified loan.

The Company closely monitors the performance of loans that are modified to borrower’s experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables present the performance of such loans that have been modified during the three months ended March 31, 2024 and March 31, 2023:

		March 31, 2024
		Current				30-89 Days Past Due				90 Days or Greater Past Due and Still Accruing
		(dollars in thousands)
Commercial		$	126			$	-			$	-

		March 31, 2023
		Current				30-89 Days Past Due				90 Days or Greater Past Due and Still Accruing
		(dollars in thousands)
Commercial		$	63			$	-			$	-

Loan Modifications to Borrowers Experiencing Financial Difficulty:

During the three months ended March 31, 2024 and March 31, 2023, the Company had no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.

There were no loans to borrowers experiencing financial difficulty that had a payment default during the three months ended March 31, 2024 and 2023 and were modified in the twelve months prior to that default. Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance for credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the allowance for credit losses is adjusted accordingly.

Allowance for Credit Losses for Unfunded Commitments

The Company has recorded an ACL for unfunded credit commitments, which was recorded in other liabilities. The provision is recorded within the provision for (reversal of) credit losses on the Company’s income statement. The following table presents a roll forward of the allowance for credit losses for unfunded commitments for the three months ended March 31, 2024 and 2023:

		Three Months Ended				Three Months Ended
		March 31,				March 31,
		2024				2023
		(dollars in thousands)
Balance at beginning of period		$	2,811			$	3,036
(Reversal of) provision for credit losses - unfunded commitments			(57	)			28
Balance at end of period		$	2,754			$	3,064

Components of Provision for Credit Losses

The following table summarizes the provision for (reversal of) credit losses for the three months ended March 31, 2024 and 2023:

		Three Months Ended				Three Months Ended
		March 31,				March 31,
		2024				2023
		(dollars in thousands)
Provision for credit losses – loans		$	4,057			$	972
(Reversal of) provision for credit losses - unfunded commitments			(57	)			28
Provision for credit losses		$	4,000			$	1,000