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Loans Receivable, Net | 3 Months Ended
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Mar. 31, 2024
Receivables [Abstract] |
Loans Receivable, Net | Loans Receivable, Net Loans receivable, net at March 31, 2024 and December 31, 2023 consisted of the following (in thousands):
| March 31, |  | December 31,
| 2024 |  | 2023
Commercial: |  |  |
Commercial real estate – investor | $ | 5,322,755 |  |  | $ | 5,353,974 |
Commercial real estate – owner occupied | 914,582 |  |  | 943,891 |
Commercial and industrial | 677,176 |  |  | 666,532 |
Total commercial | 6,914,513 |  |  | 6,964,397 |
Consumer: |  |  |
Residential real estate | 2,965,276 |  |  | 2,979,534 |
Home equity loans and lines and other consumer (“other consumer”) | 245,859 |  |  | 250,664 |
Total consumer | 3,211,135 |  |  | 3,230,198 |
Total loans receivable | 10,125,648 |  |  | 10,194,595 |
Deferred origination costs, net of fees | 9,734 |  |  | 9,263 |
Allowance for loan credit losses | (67,173) |  |  | (67,137) |
Total loans receivable, net | $ | 10,068,209 |  |  | $ | 10,136,721 |
The Company categorizes all loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, and current economic trends, among other factors. The Company evaluates risk ratings on an ongoing basis. The Company uses the following definitions for risk ratings: Pass: Loans classified as Pass are well protected by the paying capacity and net worth of the borrower. Special Mention: Loans classified as Special Mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Bank’s credit position at some future date. Substandard: Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the collection or the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The following tables summarize total loans by year of origination, internally assigned credit grades and risk characteristics (in thousands):
|  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 and prior |  | Revolving lines of credit |  |  |  | Total
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate - investor |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 48,428 |  |  | $ | 136,697 |  |  | $ | 1,170,068 |  |  | $ | 1,327,264 |  |  | $ | 525,806 |  |  | $ | 1,352,769 |  |  | $ | 644,938 |  |  |  |  | $ | 5,205,970 |
Special Mention |  | — |  |  | — |  |  | — |  |  | 2,389 |  |  | — |  |  | 42,787 |  |  | 12,695 |  |  |  |  | 57,871 |
Substandard |  | — |  |  | — |  |  | — |  |  | 595 |  |  | 4,535 |  |  | 53,784 |  |  | — |  |  |  |  | 58,914 |
Total commercial real estate - investor |  | 48,428 |  |  | 136,697 |  |  | 1,170,068 |  |  | 1,330,248 |  |  | 530,341 |  |  | 1,449,340 |  |  | 657,633 |  |  |  |  | 5,322,755 |
Commercial real estate - owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 12,333 |  |  | 65,173 |  |  | 116,684 |  |  | 98,566 |  |  | 57,582 |  |  | 513,115 |  |  | 23,133 |  |  |  |  | 886,586 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,705 |  |  | — |  |  |  |  | 8,705 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,672 |  |  | 619 |  |  |  |  | 19,291 |
Total commercial real estate - owner occupied |  | 12,333 |  |  | 65,173 |  |  | 116,684 |  |  | 98,566 |  |  | 57,582 |  |  | 540,492 |  |  | 23,752 |  |  |  |  | 914,582 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 12,487 |  |  | 122,952 |  |  | 65,864 |  |  | 18,212 |  |  | 7,671 |  |  | 55,600 |  |  | 377,278 |  |  |  |  | 660,064 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 170 |  |  | 2,239 |  |  |  |  | 2,409 |
Substandard |  | — |  |  | — |  |  | 589 |  |  | 69 |  |  | — |  |  | 1,217 |  |  | 12,828 |  |  |  |  | 14,703 |
Total commercial and industrial |  | 12,487 |  |  | 122,952 |  |  | 66,453 |  |  | 18,281 |  |  | 7,671 |  |  | 56,987 |  |  | 392,345 |  |  |  |  | 677,176 |
Residential real estate (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 43,812 |  |  | 279,313 |  |  | 904,132 |  |  | 555,218 |  |  | 378,827 |  |  | 800,232 |  |  | — |  |  |  |  | 2,961,534 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | — |
Substandard |  | — |  |  | 869 |  |  | — |  |  | 220 |  |  | 732 |  |  | 1,921 |  |  | — |  |  |  |  | 3,742 |
Total residential real estate |  | 43,812 |  |  | 280,182 |  |  | 904,132 |  |  | 555,438 |  |  | 379,559 |  |  | 802,153 |  |  | — |  |  |  |  | 2,965,276 |
Other consumer (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 5,247 |  |  | 31,232 |  |  | 19,401 |  |  | 20,089 |  |  | 12,440 |  |  | 126,222 |  |  | 29,339 |  |  |  |  | 243,970 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 298 |  |  | — |  |  |  |  | 298 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,591 |  |  | — |  |  |  |  | 1,591 |
Total other consumer |  | 5,247 |  |  | 31,232 |  |  | 19,401 |  |  | 20,089 |  |  | 12,440 |  |  | 128,111 |  |  | 29,339 |  |  |  |  | 245,859 |
Total loans |  | $ | 122,307 |  |  | $ | 636,236 |  |  | $ | 2,276,738 |  |  | $ | 2,022,622 |  |  | $ | 987,593 |  |  | $ | 2,977,083 |  |  | $ | 1,103,069 |  |  |  |  | $ | 10,125,648 |
(1)For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity.
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 and prior |  | Revolving lines of credit |  | Total
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate - investor |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 137,028 |  |  | $ | 1,165,955 |  |  | $ | 1,328,012 |  |  | $ | 529,745 |  |  | $ | 490,438 |  |  | $ | 930,337 |  |  | $ | 679,804 |  |  | $ | 5,261,319 |
Special Mention |  | — |  |  | — |  |  | 2,413 |  |  | 790 |  |  | 1,446 |  |  | 22,147 |  |  | — |  |  | 26,796 |
Substandard |  | — |  |  | — |  |  | 648 |  |  | 3,750 |  |  | 13,275 |  |  | 48,186 |  |  | — |  |  | 65,859 |
Total commercial real estate - investor |  | 137,028 |  |  | 1,165,955 |  |  | 1,331,073 |  |  | 534,285 |  |  | 505,159 |  |  | 1,000,670 |  |  | 679,804 |  |  | 5,353,974 |
Commercial real estate - owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 66,642 |  |  | 120,280 |  |  | 103,104 |  |  | 59,179 |  |  | 102,703 |  |  | 441,713 |  |  | 21,052 |  |  | 914,673 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,272 |  |  | 8,314 |  |  | — |  |  | 9,586 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,019 |  |  | 16,900 |  |  | 713 |  |  | 19,632 |
Total commercial real estate - owner occupied |  | 66,642 |  |  | 120,280 |  |  | 103,104 |  |  | 59,179 |  |  | 105,994 |  |  | 466,927 |  |  | 21,765 |  |  | 943,891 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 112,914 |  |  | 64,770 |  |  | 19,473 |  |  | 8,645 |  |  | 7,778 |  |  | 51,082 |  |  | 383,013 |  |  | 647,675 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 184 |  |  | 2,859 |  |  | 3,043 |
Substandard |  | — |  |  | 622 |  |  | 117 |  |  | — |  |  | 145 |  |  | 1,385 |  |  | 13,545 |  |  | 15,814 |
Total commercial and industrial |  | 112,914 |  |  | 65,392 |  |  | 19,590 |  |  | 8,645 |  |  | 7,923 |  |  | 52,651 |  |  | 399,417 |  |  | 666,532 |
Residential real estate (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 283,296 |  |  | 916,153 |  |  | 564,515 |  |  | 388,392 |  |  | 223,247 |  |  | 600,118 |  |  | — |  |  | 2,975,721 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | 131 |  |  | 271 |  |  | — |  |  | 402 |
Substandard |  | 323 |  |  | 366 |  |  | — |  |  | 258 |  |  | 487 |  |  | 1,977 |  |  | — |  |  | 3,411 |
Total residential real estate |  | 283,619 |  |  | 916,519 |  |  | 564,515 |  |  | 388,650 |  |  | 223,865 |  |  | 602,366 |  |  | — |  |  | 2,979,534 |
Other consumer (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 32,859 |  |  | 19,918 |  |  | 20,737 |  |  | 12,675 |  |  | 12,937 |  |  | 118,486 |  |  | 30,658 |  |  | 248,270 |
Special Mention |  | — |  |  | 172 |  |  | — |  |  | — |  |  | — |  |  | 386 |  |  | — |  |  | 558 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 1,698 |  |  | 132 |  |  | 1,836 |
Total other consumer |  | 32,859 |  |  | 20,090 |  |  | 20,737 |  |  | 12,675 |  |  | 12,943 |  |  | 120,570 |  |  | 30,790 |  |  | 250,664 |
Total loans |  | $ | 633,062 |  |  | $ | 2,288,236 |  |  | $ | 2,039,019 |  |  | $ | 1,003,434 |  |  | $ | 855,884 |  |  | $ | 2,243,184 |  |  | $ | 1,131,776 |  |  | $ | 10,194,595 |
(1)For residential real estate and other consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. An analysis of the allowance for credit losses on loans for the three months ended March 31, 2024 and 2023 was as follows (in thousands):
|  | Commercial Real Estate – Investor |  | Commercial Real Estate – Owner Occupied |  | Commercial and Industrial |  | Residential Real Estate |  | Other Consumer |  |  |  | Total
For the three months ended March 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | 27,899 |  |  | $ | 4,354 |  |  | $ | 6,867 |  |  | $ | 27,029 |  |  | $ | 988 |  |  |  |  | $ | 67,137 |
(Benefit) provision for credit losses |  | (865) |  |  | (107) |  |  | 769 |  |  | 9 |  |  | 579 |  |  |  |  | 385 |
Charge-offs (1) |  | (46) |  |  | — |  |  | — |  |  | — |  |  | (395) |  |  |  |  | (441) |
Recoveries |  | 2 |  |  | 4 |  |  | 5 |  |  | 66 |  |  | 15 |  |  |  |  | 92 |
Balance at end of period |  | $ | 26,990 |  |  | $ | 4,251 |  |  | $ | 7,641 |  |  | $ | 27,104 |  |  | $ | 1,187 |  |  |  |  | $ | 67,173 |
For the three months ended March 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | 21,070 |  |  | $ | 4,423 |  |  | $ | 5,695 |  |  | $ | 24,530 |  |  | $ | 1,106 |  |  |  |  | $ | 56,824 |
Provision (benefit) for credit losses |  | 1,379 |  |  | (304) |  |  | 131 |  |  | 2,390 |  |  | (272) |  |  |  |  | 3,324 |
Charge-offs (1) |  | — |  |  | (6) |  |  | (3) |  |  | — |  |  | (1) |  |  |  |  | (10) |
Recoveries |  | 2 |  |  | 3 |  |  | 4 |  |  | 8 |  |  | 40 |  |  |  |  | 57 |
Balance at end of period |  | $ | 22,451 |  |  | $ | 4,116 |  |  | $ | 5,827 |  |  | $ | 26,928 |  |  | $ | 873 |  |  |  |  | $ | 60,195 |
(1) Gross charge-offs for the three months ended March 31, 2024 of $441,000 included one commercial real estate loan of $46,000, which was originated in 2021. The remainder of the charge-offs were related to loans that were originated prior to 2019. Gross charge-offs for the three months ended March 31, 2023 of $10,000 related to loans that were originated prior to 2018. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral and, therefore, is classified as non-accruing. At March 31, 2024 and December 31, 2023, the Company had collateral dependent loans with an amortized cost balance as follows: commercial real estate - investor of $16.0 million and $15.2 million, respectively, commercial real estate - owner occupied of $3.4 million and $352,000, respectively, and commercial and industrial of $567,000 and $304,000, respectively. In addition, the Company had residential and consumer loans collateralized by residential real estate, which are in the process of foreclosure, with an amortized cost balance of $2.3 million and $2.6 million at March 31, 2024 and December 31, 2023, respectively. The following table presents the recorded investment in non-accrual loans, by loan portfolio segment as of March 31, 2024 and December 31, 2023 (in thousands):
| March 31, |  | December 31,
| 2024 |  | 2023
Commercial real estate – investor (1) | $ | 21,507 |  |  | $ | 20,820 |
Commercial real estate – owner occupied | 3,355 |  |  | 351 |
Commercial and industrial | 567 |  |  | 304 |
Residential real estate | 7,181 |  |  | 5,542 |
Other consumer | 2,401 |  |  | 2,531 |
| $ | 35,011 |  |  | $ | 29,548 |
(1) At March 31, 2024 and December 31, 2023, non-performing loans included the remaining exposure of $8.8 million on a commercial real estate relationship that was partially charged-off during the year ended December 31, 2023. At March 31, 2024 and December 31, 2023, non-accrual loans were included in the allowance for credit loss calculation and the Company did not recognize or accrue interest income on these loans. At March 31, 2024 and December 31, 2023, there were no loans that were past due 90 days or greater and still accruing interest. The following table presents the aging of the recorded investment in past due loans as of March 31, 2024 and December 31, 2023 by loan portfolio segment (in thousands):
| 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Loans Not Past Due |  | Total
March 31, 2024 |  |  |  |  |  |  |  |  |  |  |
Commercial real estate – investor (1) | $ | 4,746 |  |  | $ | — |  |  | $ | 16,004 |  |  | $ | 20,750 |  |  | $ | 5,302,005 |  |  | $ | 5,322,755 |
Commercial real estate – owner occupied | 531 |  |  | 368 |  |  | 318 |  |  | 1,217 |  |  | 913,365 |  |  | 914,582 |
Commercial and industrial | 3 |  |  | — |  |  | 567 |  |  | 570 |  |  | 676,606 |  |  | 677,176 |
Residential real estate | 10,793 |  |  | — |  |  | 3,742 |  |  | 14,535 |  |  | 2,950,741 |  |  | 2,965,276 |
Other consumer | 795 |  |  | 298 |  |  | 1,591 |  |  | 2,684 |  |  | 243,175 |  |  | 245,859 |
| $ | 16,868 |  |  | $ | 666 |  |  | $ | 22,222 |  |  | $ | 39,756 |  |  | $ | 10,085,892 |  |  | $ | 10,125,648 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |
Commercial real estate – investor (1) | $ | 978 |  |  | $ | 684 |  |  | $ | 15,201 |  |  | $ | 16,863 |  |  | $ | 5,337,111 |  |  | $ | 5,353,974 |
Commercial real estate – owner occupied | 335 |  |  | 352 |  |  | 293 |  |  | 980 |  |  | 942,911 |  |  | 943,891 |
Commercial and industrial | 163 |  |  | — |  |  | 145 |  |  | 308 |  |  | 666,224 |  |  | 666,532 |
Residential real estate | 14,858 |  |  | 402 |  |  | 3,411 |  |  | 18,671 |  |  | 2,960,863 |  |  | 2,979,534 |
Other consumer | 872 |  |  | 558 |  |  | 1,836 |  |  | 3,266 |  |  | 247,398 |  |  | 250,664 |
| $ | 17,206 |  |  | $ | 1,996 |  |  | $ | 20,886 |  |  | $ | 40,088 |  |  | $ | 10,154,507 |  |  | $ | 10,194,595 |
(1) At March 31, 2024 and December 31, 2023, 90 days or greater past due loans included the remaining exposure of $8.8 million on a commercial real estate relationship that was partially charged-off during the year ended December 31, 2023. Loan Modifications to Borrowers Experiencing Financial Difficulty The Company adopted Accounting Standards Update (“ASU”) 2022-02 on January 1, 2023. Since adoption, the Company has modified and may modify in the future certain loans to borrowers experiencing financial difficulty. These modifications may include a reduction in interest rate, an extension in term, principal forgiveness and/or other than insignificant payment delay. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount, and the allowance for credit losses is subsequently adjusted by an amount equal to the total loss rate as applied to the reduced amortized cost basis. As of March 31, 2024 and December 31, 2023, loans with modifications to borrowers experiencing financial difficulty totaled $12.0 million and $8.9 million, respectively. There were no outstanding commitments to lend additional funds to such borrowers with loan modifications as of March 31, 2024 or December 31, 2023. The following table presents loans modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2024 and 2023 (in thousands):
|  | Term Extension |  | Combination of Term Extension and Interest Rate Reduction |  | Other Than Insignificant Payment Delay |  | Total |  | % of Total by Loan Portfolio Segment
For the three months ended March 31, 2024 |  |  |  |  |  |  |  |  |  |
Commercial real estate – owner occupied |  | $ | — |  |  | $ | — |  |  | $ | 2,994 |  |  | $ | 2,994 |  |  | 0.33 | %
Residential real estate |  | 129 |  |  | — |  |  | — |  |  | 129 |  |  | — |
Other consumer |  | — |  |  | 148 |  |  | — |  |  | 148 |  |  | 0.06 |
|  | $ | 129 |  |  | $ | 148 |  |  | $ | 2,994 |  |  | $ | 3,271 |  |  | — | %
For the three months ended March 31, 2023 |  |  |  |  |  |  |  |  |  |
Residential real estate |  | $ | 435 |  |  | $ | — |  |  | $ | — |  |  | $ | 435 |  |  | 0.02 | %
Other consumer |  | 40 |  |  | — |  |  | — |  |  | 40 |  |  | 0.02 |
|  | $ | 475 |  |  | $ | — |  |  | $ | — |  |  | $ | 475 |  |  | — | %
The modifications during the periods presented had an insignificant financial effect on the Company. 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. The following table provides the performance of loans modified to borrowers experiencing financial difficulty during the twelve months ended March 31, 2024 and since adoption of the standard for March 31, 2023 (in thousands):
|  | Current |  | 60 - 89 Days past due |  | 90 Days or Greater past due |  | Total
March 31, 2024 |  |  |  |  |  |  |  |
Commercial real estate – investor |  | $ | 7,758 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,758 |
Commercial real estate – owner occupied |  | 2,994 |  |  | — |  |  | — |  |  | 2,994 |
Residential real estate |  | 258 |  |  | — |  |  | 153 |  | (1) | 411 |
Other consumer |  | 419 |  |  | — |  |  | — |  |  | 419 |
|  | $ | 11,429 |  |  | $ | — |  |  | $ | 153 |  |  | $ | 11,582 |
March 31, 2023 |  |  |  |  |  |  |  |
Residential real estate |  | $ | 297 |  |  | $ | 138 |  |  | $ | — |  |  | $ | 435 |
Other consumer |  | 40 |  |  | — |  |  | — |  |  | 40 |
|  | $ | 337 |  |  | $ | 138 |  |  | $ | — |  |  | $ | 475 |
(1) Represents one residential loan that defaulted during the period and had been modified within the previous 12 months. There were no such loans that defaulted during the three months ended March 31, 2023.

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- Definition The entire disclosure for claims held for amounts due a 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 + Details
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