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Note 5 - Loans and the Allowance for Credit Losses | 6 Months Ended
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Jun. 30, 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 June 30, 2024 and December 31, 2023:
|  | June 30, 2024 |  |  | December 31, 2023 |
|  | (dollars in thousands) |
Commercial |  | $ | 1,501,732 |  |  | $ | 1,578,730 |
Commercial real estate |  |  | 5,763,869 |  |  |  | 5,895,545 |
Commercial construction |  |  | 639,168 |  |  |  | 620,496 |
Residential real estate |  |  | 256,786 |  |  |  | 256,041 |
Consumer |  |  | 945 |  |  |  | 1,029 |
Gross loans |  |  | 8,162,500 |  |  |  | 8,351,841 |
Net deferred loan fees |  |  | (4,597 | ) |  |  | (6,696 | )
Total loans receivable |  | $ | 8,157,903 |  |  | $ | 8,345,145 |
As of June 30, 2024 and December 31, 2023, loans totaling approximately $5.7 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. Loans held-for-sale - The following table sets forth the composition of the Company’s loans held-for-sale as of June 30, 2024 and December 31, 2023:
|  | June 30, 2024 |  |  | December 31, 2023 |
|  | (dollars in thousands) |
Residential real estate |  | $ | 435 |  |  | $ | - |
Total loans held-for-sale |  | $ | 435 |  |  | $ | - |
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 June 30, 2024 and December 31, 2023:
|  | June 30, 2024 |
|  | Nonaccrual loans with ACL |  |  | Nonaccrual loans without ACL |  |  | Total nonaccrual loans |
|  | (dollars in thousands) |
Commercial |  | $ | 1,928 |  |  | $ | 10,850 |  |  | $ | 12,778 |
Commercial real estate |  |  | - |  |  |  | 29,585 |  |  |  | 29,585 |
Commercial construction |  |  | 409 |  |  |  | 1,795 |  |  |  | 2,204 |
Residential real estate |  |  | 237 |  |  |  | 1,222 |  |  |  | 1,459 |
Total |  | $ | 2,574 |  |  | $ | 43,452 |  |  | $ | 46,026 |
|  | 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 purposes of the table below. The following table presents loans by origination, risk designation and gross charge-offs as of and during the six months ended June 30, 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 |  | $ | 16,275 |  |  | $ | 148,282 |  |  | $ | 195,059 |  |  | $ | 283,478 |  |  | $ | 32,453 |  |  | $ | 122,418 |  |  | $ | 652,444 |  |  | $ | 1,450,409 |
Special mention |  |  | - |  |  |  | - |  |  |  | 11,090 |  |  |  | 2,810 |  |  |  | 1,634 |  |  |  | 9,920 |  |  |  | 11,150 |  |  |  | 36,604 |
Substandard |  |  | - |  |  |  | 250 |  |  |  | 739 |  |  |  | 230 |  |  |  | - |  |  |  | 12,773 |  |  |  | 727 |  |  |  | 14,719 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total commercial |  | $ | 16,275 |  |  | $ | 148,532 |  |  | $ | 206,888 |  |  | $ | 286,518 |  |  | $ | 34,087 |  |  | $ | 145,111 |  |  | $ | 664,321 |  |  | $ | 1,501,732 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 300 |  |  | $ | 300 |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 100,404 |  |  | $ | 273,253 |  |  | $ | 1,534,768 |  |  | $ | 1,562,051 |  |  | $ | 357,702 |  |  | $ | 1,509,393 |  |  | $ | 371,401 |  |  | $ | 5,708,972 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 15,072 |  |  |  | - |  |  |  | 15,072 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,867 |  |  |  | - |  |  |  | 37,958 |  |  |  | - |  |  |  | 39,825 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total commercial real estate |  | $ | 100,404 |  |  | $ | 273,253 |  |  | $ | 1,534,768 |  |  | $ | 1,563,918 |  |  | $ | 357,702 |  |  | $ | 1,562,423 |  |  | $ | 371,401 |  |  | $ | 5,763,869 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 6,481 |  |  | $ | - |  |  | $ | 6,481 |
Commercial Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 9,500 |  |  | $ | 582 |  |  | $ | 2,124 |  |  | $ | 9,071 |  |  | $ | 6,236 |  |  | $ | 10,500 |  |  | $ | 590,251 |  |  | $ | 628,264 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8,700 |  |  |  | 8,700 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,204 |  |  |  | 2,204 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total commercial construction |  | $ | 9,500 |  |  | $ | 582 |  |  | $ | 2,124 |  |  | $ | 9,071 |  |  | $ | 6,236 |  |  | $ | 10,500 |  |  | $ | 601,155 |  |  | $ | 639,168 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 11,222 |  |  | $ | 15,126 |  |  | $ | 41,597 |  |  | $ | 21,675 |  |  | $ | 21,004 |  |  | $ | 104,637 |  |  | $ | 36,626 |  |  | $ | 251,887 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 643 |  |  |  | 2,797 |  |  |  | 3,440 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 536 |  |  |  | - |  |  |  | 686 |  |  |  | 237 |  |  |  | 1,459 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total residential real estate |  | $ | 11,222 |  |  | $ | 15,126 |  |  | $ | 41,597 |  |  | $ | 22,211 |  |  | $ | 21,004 |  |  | $ | 105,966 |  |  | $ | 39,660 |  |  | $ | 256,786 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 809 |  |  | $ | 27 |  |  | $ | 10 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 99 |  |  | $ | 945 |
Special mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total consumer |  | $ | 809 |  |  | $ | 27 |  |  | $ | 10 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 99 |  |  | $ | 945 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 138,210 |  |  | $ | 437,270 |  |  | $ | 1,773,558 |  |  | $ | 1,876,275 |  |  | $ | 417,395 |  |  | $ | 1,746,948 |  |  | $ | 1,650,821 |  |  | $ | 8,040,477 |
Special mention |  |  | - |  |  |  | - |  |  |  | 11,090 |  |  |  | 2,810 |  |  |  | 1,634 |  |  |  | 25,635 |  |  |  | 22,647 |  |  |  | 63,816 |
Substandard |  |  | - |  |  |  | 250 |  |  |  | 739 |  |  |  | 2,633 |  |  |  | - |  |  |  | 51,417 |  |  |  | 3,168 |  |  |  | 58,207 |
Doubtful |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Grand total |  | $ | 138,210 |  |  | $ | 437,520 |  |  | $ | 1,785,387 |  |  | $ | 1,881,718 |  |  | $ | 419,029 |  |  | $ | 1,824,000 |  |  | $ | 1,676,636 |  |  | $ | 8,162,500 |
YTD gross charge-offs |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 6,481 |  |  | $ | 300 |  |  | $ | 6,781 |
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 June 30, 2024 and December 31, 2023:
|  | June 30, 2024 |
|  | Real Estate |  |  | Other |  |  | Total |
|  | (dollars in thousands) |
Commercial |  | $ | 1,677 |  |  | $ | 10,174 |  |  | $ | 11,851 |
Commercial real estate |  |  | 29,585 |  |  |  | - |  |  |  | 29,585 |
Commercial construction |  |  | 2,204 |  |  |  | - |  |  |  | 2,204 |
Residential real estate |  |  | 813 |  |  |  | - |  |  |  | 813 |
Total |  | $ | 34,279 |  |  | $ | 10,174 |  |  | $ | 44,453 |
|  | 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 June 30, 2024 and December 31, 2023:
|  | June 30, 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 |  | $ | 1,667 |  |  | $ | 427 |  |  | $ | - |  |  | $ | 12,778 |  |  | $ | 14,872 |  |  | $ | 1,486,860 |  |  | $ | 1,501,732 |
Commercial real estate |  |  | - |  |  |  | 4,876 |  |  |  | - |  |  |  | 29,585 |  |  |  | 34,461 |  |  |  | 5,729,408 |  |  |  | 5,763,869 |
Commercial construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,204 |  |  |  | 2,204 |  |  |  | 636,964 |  |  |  | 639,168 |
Residential real estate |  |  | - |  |  |  | 1,813 |  |  |  | - |  |  |  | 1,459 |  |  |  | 3,272 |  |  |  | 253,514 |  |  |  | 256,786 |
Consumer |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 945 |  |  |  | 945 |
Total |  | $ | 1,667 |  |  | $ | 7,116 |  |  | $ | - |  |  | $ | 46,026 |  |  | $ | 54,809 |  |  | $ | 8,107,691 |  |  | $ | 8,162,500 |
|  | 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:
|  | June 30, 2024 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Total |
|  | (dollars in thousands) |
Allowance for credit losses - loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually analyzed |  | $ | 337 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 337 |
Collectively evaluated |  |  | 19,458 |  |  |  | 53,098 |  |  |  | 4,472 |  |  |  | 4,484 |  |  |  | 3 |  |  |  | 81,515 |
Acquired with deteriorated credit quality |  |  | 225 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 225 |
Total |  | $ | 20,020 |  |  | $ | 53,098 |  |  | $ | 4,472 |  |  | $ | 4,484 |  |  | $ | 3 |  |  | $ | 82,077 |
Gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually analyzed |  | $ | 12,188 |  |  | $ | 29,585 |  |  | $ | 2,204 |  |  | $ | 813 |  |  | $ | - |  |  | $ | 44,790 |
Collectively evaluated |  |  | 1,489,083 |  |  |  | 5,734,284 |  |  |  | 636,964 |  |  |  | 255,973 |  |  |  | 945 |  |  |  | 8,117,249 |
Acquired with deteriorated credit quality |  |  | 461 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 461 |
Total |  | $ | 1,501,732 |  |  | $ | 5,763,869 |  |  | $ | 639,168 |  |  | $ | 256,786 |  |  | $ | 945 |  |  | $ | 8,162,500 |
|  | 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 and six months ended June 30, 2024 is summarized in the tables below.
|  | Three Months Ended June 30, 2024 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Total |
|  | (dollars in thousands) |
Balance as of March 31, 2024 |  | $ | 20,735 |  |  | $ | 52,794 |  |  | $ | 5,011 |  |  | $ | 4,326 |  |  | $ | 3 |  |  | $ | 82,869 |
Charge-offs |  |  | - |  |  |  | (3,595 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,595 | )
Recoveries |  |  | 324 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 324 |
(Reversal of) provision for credit losses - loans |  |  | (1,039 | ) |  |  | 3,899 |  |  |  | (539 | ) |  |  | 158 |  |  |  | - |  |  |  | 2,479 |
Balance as of June 30, 2024 |  | $ | 20,020 |  |  | $ | 53,098 |  |  | $ | 4,472 |  |  | $ | 4,484 |  |  | $ | 3 |  |  | $ | 82,077 |
|  | Six Months Ended June 30, 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 | ) |  |  | (6,480 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6,780 | )
Recoveries |  |  | 347 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 347 |
(Reversal of) provision for credit losses - loans |  |  | (659 | ) |  |  | 7,300 |  |  |  | (267 | ) |  |  | 164 |  |  |  | (2 | ) |  |  | 6,536 |
Balance as of June 30, 2024 |  | $ | 20,020 |  |  | $ | 53,098 |  |  | $ | 4,472 |  |  | $ | 4,484 |  |  | $ | 3 |  |  | $ | 82,077 |
Activity in the Company’s ACL for loans for the three and six months ended June 30, 2023 is summarized in the table below.
|  | Three Months Ended June 30, 2023 |
|  | Commercial |  |  | Commercial real estate |  |  | Commercial construction |  |  | Residential real estate |  |  | Consumer |  |  | Total |
|  | (dollars in thousands) |
Balance as of March 31, 2023 |  | $ | 26,162 |  |  | $ | 53,000 |  |  | $ | 3,966 |  |  | $ | 3,868 |  |  | $ | 6 |  |  | $ | 87,002 |
Charge-offs |  |  | (1,100 | ) |  |  | - |  |  |  | - |  |  |  | (18 | ) |  |  | - |  |  |  | (1,118 | )
Recoveries |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | 67 |  |  |  | - |  |  |  | 76 |
Provision for (reversal of) credit losses - loans |  |  | 4,255 |  |  |  | (491 | ) |  |  | (420 | ) |  |  | (98 | ) |  |  | (1 | ) |  |  | 3,245 |
Balance as of June 30, 2023 |  | $ | 29,326 |  |  | $ | 52,509 |  |  | $ | 3,546 |  |  | $ | 3,819 |  |  | $ | 5 |  |  | $ | 89,205 |
|  | Six Months Ended June 30, 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 |  |  | (3,867 | ) |  |  | (1,717 | ) |  |  | - |  |  |  | (18 | ) |  |  | - |  |  |  | (5,602 | )
Recoveries |  |  | 9 |  |  |  | - |  |  |  | - |  |  |  | 68 |  |  |  | - |  |  |  | 77 |
Provision for (reversal of) credit losses - loans |  |  | 4,281 |  |  |  | 484 |  |  |  | (172 | ) |  |  | (374 | ) |  |  | (2 | ) |  |  | 4,217 |
Balance as of June 30, 2023 |  | $ | 29,326 |  |  | $ | 52,509 |  |  | $ | 3,546 |  |  | $ | 3,819 |  |  | $ | 5 |  |  | $ | 89,205 |
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 |
|  | June 30, 2024 |
|  | Term Extension |  |  | Payment Deferral |  |  | Interest Rate Reduction |  |  | Total |  |  | % of Portfolio Loan Segment |
|  | (dollars in thousands) |  |  |  |  |
Commercial |  | $ | 11,150 |  |  | $ | - |  |  | $ | - |  |  | $ | 11,150 |  |  |  | 0.75 | %
Residential real estate |  |  | 1,417 |  |  |  | - |  |  |  | - |  |  |  | 1,417 |  |  |  | 0.01 |
|  | Six Months Ended |
|  | June 30, 2024 |
|  | Term Extension |  |  | Payment Deferral |  |  | Interest Rate Reduction |  |  | Total |  |  | % of Portfolio Loan Segment |
|  | (dollars in thousands) |  |  |  |  |
Commercial |  | $ | 11,150 |  |  | $ | 126 |  |  | $ | - |  |  | $ | 11,276 |  |  |  | 0.75 | %
Residential real estate |  |  | 1,417 |  |  |  | - |  |  |  | - |  |  |  | 1,417 |  |  |  | 0.01 |
The above table consists of two commercial loans and one residential real estate loan that were modified during the six months ended June 30, 2024 where the borrower was experiencing financial difficulty. An $11.1 million commercial loan was a six-month term extension, while a $0.1 million commercial loan was a three-month payment deferral. The $1.4 million residential real estate loan involved the freezing of a loan commitment, combined with a 10-year term extension.
|  | Three Months Ended |
|  | June 30, 2023 |
|  | Term Extension |  |  | Payment Deferral |  |  | Interest Rate Reduction |  |  | Total |  |  | % of Portfolio Loan Segment |
|  | (dollars in thousands) |  |  |  |  |
Commercial |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  |  | 0.00 | %
Commercial real estate |  |  | 213 |  |  |  |  |  |  |  |  |  |  |  | 213 |  |  |  | 0.00 | %
|  | Six Months Ended |
|  | June 30, 2023 |
|  | Term Extension |  |  | Payment Deferral |  |  | Interest Rate Reduction |  |  | Total |  |  | % of Portfolio Loan Segment |
|  | (dollars in thousands) |  |  |  |  |
Commercial |  | $ | 53 |  |  | $ | - |  |  | $ | - |  |  | $ | 53 |  |  |  | 0.00 | %
Commercial real estate |  |  | 213 |  |  |  |  |  |  |  |  |  |  |  | 213 |  |  |  | 0.00 | %
The above table consists of one commercial loan and one commercial real estate loan that were modified during the six months ended June 30, 2023 where the borrower was experiencing financial difficulty. The $50 thousand commercial loan was a 3-year term extension, while the $213 thousand commercial real estate loan was a 15-year term extension. 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 payment status of loans that have been modified in the last twelve months.
|  | June 30, 2024 |
|  | Current |  |  | 30-89 Days Past Due |  |  | 90 Days or Greater Past Due and Still Accruing |
|  | (dollars in thousands) |
Commercial |  | $ | 21,559 |  |  | $ | - |  |  | $ | - |
Commercial real estate |  |  | 7,272 |  |  |  | - |  |  |  | - |
Residential real estate |  |  | 1,417 |  |  |  | - |  |  |  | - |
Loan Modifications to Borrowers Experiencing Financial Difficulty: During the six months ended June 30, 2024 and June 30, 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 six months ended June 30, 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 and six months ended June 30, 2024 and 2023:
|  | Three Months Ended |  |  | Three Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Balance at beginning of period |  | $ | 2,754 |  |  | $ | 3,064 |
Provision for (reversal of) credit losses - unfunded commitments |  |  | 21 |  |  |  | (245 | )
Balance at end of period |  | $ | 2,775 |  |  | $ | 2,819 |
|  | Six Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Balance at beginning of period |  | $ | 2,811 |  |  | $ | 3,036 |
Reversal of credit losses - unfunded commitments |  |  | (36 | ) |  |  | (217 | )
Balance at end of period |  | $ | 2,775 |  |  | $ | 2,819 |
Components of Provision for Credit Losses The following table summarizes the provision for (reversal of) credit losses for the three and six months ended June 30, 2024 and 2023:
|  | Three Months Ended |  |  | Three Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Provision for credit losses – loans |  | $ | 2,479 |  |  | $ | 3,245 |
Provision for (reversal of) credit losses - unfunded commitments |  |  | 21 |  |  |  | (245 | )
Provision for credit losses |  | $ | 2,500 |  |  | $ | 3,000 |
|  | Six Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |
|  | (dollars in thousands) |
Provision for credit losses – loans |  | $ | 6,536 |  |  | $ | 4,217 |
Reversal of credit losses - unfunded commitments |  |  | (36 | ) |  |  | (217 | )
Provision for credit losses |  | $ | 6,500 |  |  | $ | 4,000 |

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