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Note 6 - Loans and the Allowance for Credit Losses

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

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

Note 6. 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, 2025 and December 31, 2024:

		March 31, 2025				December 31, 2024
		(dollars in thousands)
Commercial		$	1,492,920			$	1,532,730
Commercial real estate			5,837,671				5,880,679
Commercial construction			617,593				616,246
Residential real estate			256,555				249,691
Consumer			1,604				1,136
Gross loans			8,206,343				8,280,482
Net deferred loan fees			(5,209	)			(5,672	)
Total loans receivable		$	8,201,134			$	8,274,810

As of March 31, 2025 and December 31, 2024, loans totaling approximately $5.6 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 portfolio as of March 31, 2025 and December 31, 2024.

		March 31, 2025				December 31, 2024
		(dollars in thousands)
Residential real estate		$	202			$	743

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, 2025 and December 31, 2024:

		March 31, 2025
		Nonaccrual loans with ACL				Nonaccrual loans without ACL				Total nonaccrual loans
		(dollars in thousands)
Commercial		$	1,809			$	14,372			$	16,181
Commercial real estate			666				28,443				29,109
Commercial construction			-				2,204				2,204
Residential real estate			324				2,042				2,366
Total		$	2,799			$	47,061			$	49,860

		December 31, 2024
		Nonaccrual loans with ACL				Nonaccrual loans without ACL				Total nonaccrual loans
		(dollars in thousands)
Commercial		$	1,744			$	14,487			$	16,231
Commercial real estate			3,822				32,664				36,486
Commercial construction			-				2,204				2,204
Residential real estate			333				2,056				2,389
Total		$	5,899			$	51,411			$	57,310

Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated and loans that are 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 three months ended March 31, 2025 (dollars in thousands):

		*Term loans amortized cost basis by origination year*
		*2025*				*2024*				*2023*				*2022*				*2021*				*Prior*				*Revolving Loans*				*Total Gross Loans*
Commercial
Pass		$	28,946			$	62,146			$	151,217			$	190,275			$	230,187			$	129,297			$	642,514			$	1,434,582
Special mention			-				1,902				-				351				-				6,681				-				8,934
Substandard			-				-				2,974				6,247				2,609				19,040				18,534				49,404
Doubtful			-				-				-				-				-				-				-				-
Total commercial		$	28,946			$	64,048			$	154,191			$	196,873			$	232,796			$	155,018			$	661,048			$	1,492,920
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Commercial real estate
Pass		$	113,550			$	390,234			$	268,061			$	1,403,487			$	1,468,708			$	1,649,401			$	378,792			$	5,672,233
Special mention			-				-				-				51,366				1,309				74,735				-				127,410
Substandard			-				-				-				1,448				4,229				32,351				-				38,028
Doubtful			-				-				-				-				-				-				-				-
Total commercial real estate		$	113,550			$	390,234			$	268,061			$	1,456,301			$	1,474,246			$	1,756,487			$	378,792			$	5,837,671
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	3,555			$	-			$	3,555

Commercial construction
Pass		$	-			$	25,440			$	-			$	2,137			$	8,954			$	6,236			$	572,622			$	615,389
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				2,204				2,204
Doubtful			-				-				-				-				-				-				-				-
Total commercial construction		$	-			$	25,440			$	-			$	2,137			$	8,954			$	6,236			$	574,826			$	617,593
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Residential real estate
Pass		$	8,979			$	20,915			$	14,486			$	38,961			$	21,758			$	110,309			$	35,389			$	250,797
Special mention			-				-				-				-				-				631				2,762				3,393
Substandard			-				-				-				633				-				1,506				226				2,365
Doubtful			-				-				-				-				-				-				-				-
Total residential real estate		$	8,979			$	20,915			$	14,486			$	39,594			$	21,758			$	112,446			$	38,377			$	256,555
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Consumer
Pass		$	1,473			$	20			$	23			$	1			$	-			$	-			$	87			$	1,604
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				-				-
Doubtful			-				-				-				-				-				-				-				-
Total consumer		$	1,473			$	20			$	23			$	1			$	-			$	-			$	87			$	1,604
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Total
Pass		$	152,948			$	498,755			$	433,787			$	1,634,861			$	1,729,607			$	1,895,243			$	1,629,404			$	7,974,605
Special mention			-				1,902				-				51,717				1,309				82,047				2,762				139,737
Substandard			-				-				2,974				8,328				6,838				52,897				20,964				92,001
Doubtful			-				-				-				-				-				-				-				-
Grand total		$	152,948			$	500,657			$	436,761			$	1,694,906			$	1,737,754			$	2,030,187			$	1,653,130			$	8,206,343
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	3,555			$	-			$	3,555

The following table presents loans by origination, risk designation and gross charge-offs as of and for the year ended December 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		$	67,298			$	157,067			$	194,602			$	237,065			$	29,717			$	111,841			$	678,206			$	1,475,796
Special mention			1,908				-				2,817				2,538				1,643				6,209				17,491				32,606
Substandard			-				3,019				3,705				217				-				15,844				1,543				24,328
Doubtful			-				-				-				-				-				-				-				-
Total commercial		$	69,206			$	160,086			$	201,124			$	239,820			$	31,360			$	133,894			$	697,240			$	1,532,730
YTD gross charge-offs		$	-			$	-			$	1,003			$	49			$	-			$	316			$	1,918			$	3,286

Commercial real estate
Pass		$	408,314			$	268,533			$	1,424,209			$	1,510,087			$	339,553			$	1,357,858			$	415,286			$	5,723,840
Special mention			-				-				53,642				-				-				59,719				-				113,361
Substandard			-				-				3,822				1,846				1,752				36,058				-				43,478
Doubtful			-				-				-				-				-				-				-				-
Total commercial real estate		$	408,314			$	268,533			$	1,481,673			$	1,511,933			$	341,305			$	1,453,635			$	415,286			$	5,880,679
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	10,416			$	-			$	10,416

Commercial construction
Pass		$	15,390			$	-			$	2,137			$	8,995			$	6,518			$	-			$	581,002			$	614,042
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				2,204				2,204
Doubtful			-				-				-				-				-				-				-				-
Total commercial construction		$	15,390			$	-			$	2,137			$	8,995			$	6,518			$	-			$	583,206			$	616,246
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Residential real estate
Pass		$	17,763			$	14,542			$	39,197			$	21,925			$	17,339			$	96,657			$	36,471			$	243,894
Special mention			-				-				-				-				-				635				2,773				3,408
Substandard			-				-				633				-				1,157				364				235				2,389
Doubtful			-				-				-				-				-				-				-				-
Total residential real estate		$	17,763			$	14,542			$	39,830			$	21,925			$	18,496			$	97,656			$	39,479			$	249,691
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Consumer
Pass		$	1,015			$	24			$	1			$	-			$	-			$	-			$	96			$	1,136
Special mention			-				-				-				-				-				-				-				-
Substandard			-				-				-				-				-				-				-				-
Doubtful			-				-				-				-				-				-				-				-
Total consumer		$	1,015			$	24			$	1			$	-			$	-			$	-			$	96			$	1,136
YTD gross charge-offs		$	-			$	-			$	-			$	-			$	-			$	-			$	-			$	-

Total
Pass		$	509,780			$	440,166			$	1,660,146			$	1,778,072			$	393,127			$	1,566,356			$	1,711,061			$	8,058,708
Special mention			1,908				-				56,459				2,538				1,643				66,563				20,264				149,375
Substandard			-				3,019				8,160				2,063				2,909				52,266				3,982				72,399
Doubtful			-				-				-				-				-				-				-				-
Grand total		$	511,688			$	443,185			$	1,724,765			$	1,782,673			$	397,679			$	1,685,185			$	1,735,307			$	8,280,482
YTD gross charge-offs		$	-			$	-			$	1,003			$	49			$	-			$	10,732			$	1,918			$	13,702

Collateral Dependent Loans: The following tables present the amortized cost basis of collateral-dependent loans by loan segment as of March 31, 2025 and December 31, 2024:

		March 31, 2025
		Real Estate				Other				Total
		(dollars in thousands)
Commercial		$	2,264			$	9,118			$	11,382
Commercial real estate			29,109				-				29,109
Commercial construction			2,204				-				2,204
Residential real estate			2,041				-				2,041
Total		$	35,618			$	9,118			$	44,736

		December 31, 2024
		Real Estate				Other				Total
		(dollars in thousands)
Commercial		$	2,308			$	9,222			$	11,530
Commercial real estate			36,486				-				36,486
Commercial construction			2,204				-				2,204
Residential real estate			2,056				-				2,056
Total		$	43,054			$	9,222			$	52,276

Aging Analysis - The following tables present the aging of the amortized cost in past-due loans as of March 31, 2025 and December 31, 2024:

		March 31, 2025
		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		$	4,915			$	-			$	-			$	16,181			$	21,096			$	1,471,824			$	1,492,920
Commercial real estate			8,740				-				-				29,109				37,849				5,799,822				5,837,671
Commercial construction			-				-				-				2,204				2,204				615,389				617,593
Residential real estate			1,174				133				-				2,366				3,673				252,882				256,555
Consumer			-				-				-				-				-				1,604				1,604
Total		$	14,829			$	133			$	-			$	49,860			$	64,822			$	8,141,521			$	8,206,343

		December 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		$	1,340			$	-			$	-			$	16,231			$	17,571			$	1,515,159			$	1,532,730
Commercial real estate			-				-				-				36,486				36,486				5,844,193				5,880,679
Commercial construction			-				-				-				2,204				2,204				614,042				616,246
Residential real estate			1,991				-				-				2,389				4,380				245,311				249,691
Consumer			-				-				-				-				-				1,136				1,136
Total		$	3,331			$	-			$	-			$	57,310			$	60,641			$	8,219,841			$	8,280,482

The following tables detail the amount of gross loans that are individually analyzed, collectively evaluated, and loans acquired with deteriorated quality, and the related portion of the allowance for credit losses for loans that are allocated to each loan portfolio segment.

		March 31, 2025
		Commercial				Commercial real estate				Commercial construction				Residential real estate				Consumer				Total
		(dollars in thousands)
Allowance for credit losses - loans
Individually analyzed		$	323			$	33			$	-			$	-			$	-			$	356
Collectively evaluated			17,535				54,553				5,030				4,752				4				81,874
Acquired with deteriorated credit quality			173				-				-				-				-				173
Total		$	18,031			$	54,586			$	5,030			$	4,752			$	4			$	82,403

Gross loans
Individually analyzed		$	15,599			$	29,109			$	2,204			$	2,041			$	-			$	48,953
Collectively evaluated			1,476,908				5,808,562				615,389				254,514				1,604				8,156,977
Acquired with deteriorated credit quality			413				-				-				-				-				413
Total		$	1,492,920			$	5,837,671			$	617,593			$	256,555			$	1,604			$	8,206,343

		December 31, 2024
		Commercial				Commercial real estate				Commercial construction				Residential real estate				Consumer				Total
		(dollars in thousands)
Allowance for credit losses - loans
Individually analyzed		$	326			$	909			$	-			$	-			$	-			$	1,235
Collectively evaluated			17,740				53,868				5,064				4,561				5				81,238
Acquired with deteriorated credit quality			212				-				-				-				-				212
Total		$	18,278			$	54,777			$	5,064			$	4,561			$	5			$	82,685

Gross loans
Individually analyzed		$	15,751			$	36,486			$	2,204			$	2,056			$	-			$	56,497
Collectively evaluated			1,516,557				5,844,193				614,042				247,635				1,136				8,223,563
Acquired with deteriorated credit quality			422				-				-				-				-				422
Total		$	1,532,730			$	5,880,679			$	616,246			$	249,691			$	1,136			$	8,280,482

Activity in the Company’s ACL for loans for the three months ended March 31, 2025 and 2024 are summarized in the tables below.

		Three Months Ended March 31, 2025
		Commercial				Commercial real estate				Commercial construction				Residential real estate				Consumer				Total
		(dollars in thousands)
Balance as of December 31, 2024		$	18,278			$	54,777			$	5,064			$	4,561			$	5			$	82,685
Charge-offs			-				(3,555	)			-				-				-				(3,555	)
Recoveries			155				-				-				-				-				155
(Reversal of) provision for credit losses - loans			(402	)			3,364				(34	)			191				(1	)			3,118
Balance as of March 31, 2025		$	18,031			$	54,586			$	5,030			$	4,752			$	4			$	82,403

		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

Loan Modifications to Borrowers Experiencing Financial Difficulty:

The following table presents the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the last 12 months through March 31, 2025. The modification percentage represents the total modified loans as compared to the total gross loan balances as of March 31, 2025.

		Amortized Cost Basis at Time of Modification
		Term Extension				Payment Deferral				Interest Rate Reduction				Payment Reduction				Total				Gross Loans at March 31, 2025				Modification % (Modified Loans/Gross Loans)
March 31, 2025
(dollars in thousands)
Commercial		$	17,641			$	-			$	-			$	333			$	17,974			$	1,492,920				1.20	%
Commercial real estate			-				-				63,804				-				63,804				5,837,671				1.09
Residential real estate			1,412				-				-				-				1,412				256,555				0.55
Total		$	19,053			$	-			$	63,804			$	333			$	83,190			$	7,587,146				1.10	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the last 12 months through March 31, 2025.

		Weighted Average Term Extension (Months)				Weighted Average Payment Deferral (Months)				Weighted Average Interest Rate Reduction				Weighted Average Payment Reduction
March 31, 2025
(dollars in thousands)
Commercial			6				-				-	%		$	6
Commercial real estate			-				-				0.1				-
Residential real estate			136				-				-				-
Total			142				-				0.1	%		$	6

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months through March 31, 2025.

		Current				30-89 Days Past Due				90 Days or Greater Past Due
March 31, 2025
(dollars in thousands)
Commercial		$	17,974			$	-			$	-
Commercial real estate			63,804				-				-
Residential real estate			1,412				-				-
Total		$	83,190			$	-			$	-

There were no modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2025.

The following table presents the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the three months ended March 31, 2024. The modification percentage represents the total modified loans as compared to the total gross loan balances as of March 31, 2024.

		Amortized Cost Basis at Time of Modification
		Term Extension				Payment Deferral				Interest Rate Reduction				Payment Reduction				Total				Gross Loans at March 31, 2024				Modification % (Modified Loans/Gross Loans)
March 31, 2024
(dollars in thousands)
Commercial		$	-			$	126			$	-			$	-			$	126			$	1,572,494				0.01	%
Commercial real estate			-				-				-				-				-				5,829,950				-
Residential real estate			-				-				-				-				-				254,214				-
Total		$	-			$	126			$	-			$	-			$	126			$	7,656,658				0.00	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three months ended March 31, 2024.

		Weighted Average Term Extension (Months)				Weighted Average Payment Deferral (Months)				Weighted Average Interest Rate Reduction				Weighted Average Payment Reduction
March 31, 2024
(dollars in thousands)
Commercial			-				3				-	%		$	-

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the three months ended March 31, 2024.

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

During the three months ended March 31, 2025 and March 31, 2024, 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, 2025 and 2024 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 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, 2025 and 2024:

		Three Months Ended				Three Months Ended
		March 31,				March 31,
		2025				2024
		(dollars in thousands)
Balance at beginning of period		$	2,627			$	2,811
Provision for (reversal of) credit losses - unfunded commitments			382				(57	)
Balance at end of period		$	3,009			$	2,754

Components of Provision for Credit Losses

The following table summarizes the provision for (reversal of) credit losses for the three months ended March 31, 2025 and 2024:

		Three Months Ended				Three Months Ended
		March 31,				March 31,
		2025				2024
		(dollars in thousands)
Provision for credit losses – loans		$	3,118			$	4,057
Provision for (reversal of) credit losses - unfunded commitments			382				(57	)
Provision for credit losses		$	3,500			$	4,000