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Loans Receivable

9 Months Ended

Sep. 30, 2025

The Company originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. In addition to originating loans, the Company may also purchase loans through pool purchases, participation purchases and syndicated loan purchases. Accrued interest receivable was excluded from disclosures presenting the Company's amortized cost of loans receivable, as it was deemed insignificant.

(a) Loan Origination/Risk Management

The Company categorizes the individual loans in the total loan portfolio into four segments: commercial business; residential real estate; real estate construction and land development; and consumer. Within these segments are classes of loans for which management monitors and assesses credit risk in the loan portfolios. A detailed description of the portfolio segments and classes is contained in the 2024 Annual Form 10-K.

The Company has certain lending policies and guidelines in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and guidelines on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and criticized loans. The Company also conducts internal loan reviews and validates the credit risk assessment on a periodic basis and presents the results of these reviews to management. The loan review process complements and reinforces the risk identification and assessment decisions made by loan officers and credit personnel.

The amortized cost of loans receivable, net of ACL on loans, consisted of the following portfolio segments and classes at the dates indicated:


	September 30, 2025		December 31, 2024
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	819,076	$	842,672
Owner-occupied CRE	1,022,727		1,003,243
Non-owner occupied CRE	1,938,190		1,909,107
Total commercial business	3,779,993		3,755,022
Residential real estate	374,875		402,954
Real estate construction and land development:
Residential	90,440		83,890
Commercial and multifamily	351,196		395,553
Total real estate construction and land development	441,636		479,443
Consumer	172,656		164,704
Loans receivable	4,769,160		4,802,123
ACL on loans	(53,974)		(52,468)
Loans receivable, net	$	4,715,186	$	4,749,655

Balances included in the amortized cost of loans receivable:
Unamortized net discount on acquired loans	$	(743)	$	(1,095)
Unamortized net deferred fee	$	(11,018)	$	(10,110)

(b) Concentrations of Credit

Most of the Company’s lending activity occurs within its primary market areas which are concentrated along the I-5 corridor from Whatcom County, Washington to Lane County, Oregon, as well as Yakima and Spokane County, Washington and Ada County, Idaho. Additionally, the Company's loan portfolio is concentrated in commercial business loans, which include commercial and industrial, owner-occupied and nonowner-occupied CRE loans, and commercial and multifamily real estate construction and land development loans. Commercial business loans and commercial and multifamily real estate construction and land development loans are generally considered as having a more inherent risk of default than residential real estate loans or other consumer loans. Also, the loan balance per borrower is typically larger for commercial loans than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis.

As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans, (v) past due status, and (vi) the general economic conditions of the United States of America, and specifically the states of Washington, Oregon and Idaho.

The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 10. Risk grades are aggregated to create the risk categories of Pass for grades 1 to 6, Special Mention or "SM" for grade 7, Substandard or "SS" for grade 8, Doubtful for grade 9 and Loss for grade 10. Descriptions of the general characteristics of the risk grades, including qualitative information on how the risk grades relate to the risk of loss, are contained in the 2024 Annual Form 10-K. Numerical loan grades for loans are established at the origination of the loan. Changes to loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower, results of annual term loan reviews and scheduled loan reviews. For consumer loans, the Company follows the FDIC’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default. Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement. Credit deterioration is evidenced by delinquency,

direct communications with the borrower or other borrower information that becomes known to management. Credit improvements are evidenced by known facts regarding the borrower or the collateral property.

Loan grades relate to the likelihood of losses in that the higher the grade, the greater the loss potential. Loans with a Pass grade may have some estimated inherent losses, but to a lesser extent than the other loan grades. The SM loan grade is transitory in that the Company is waiting on additional information to determine the likelihood and extent of any potential loss. The likelihood of loss for SM graded loans, however, is greater than Watch graded loans because there has been measurable credit deterioration. Loans with a SS grade have further credit deterioration and include both accrual loans and nonaccrual loans. For Doubtful and Loss graded loans, the Company is almost certain of the losses and the outstanding principal balances are generally charged off to the realizable value. There were no loans graded Doubtful or Loss as of September 30, 2025 and December 31, 2024.

The following tables present the amortized cost of loans receivable by risk grade and origination year at the dates indicated:


	September 30, 2025
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted(1)		Loans Receivable
	2025		2024		2023		2022		2021		Prior
	(Dollars in thousands)
Commercial business:
Commercial and industrial
Pass	$	96,164	$	176,964	$	102,821	$	81,760	$	39,470	$	104,801	$	143,640	$	1,826	$	747,446
SM	1,253		5,406		11,178		7,218		1,524		1,483		17,930		2,451		48,443
SS	—		—		1,862		6,910		25		5,967		8,282		141		23,187
Total	97,417		182,370		115,861		95,888		41,019		112,251		169,852		4,418		819,076
Owner-occupied CRE
Pass	88,339		112,982		88,435		133,200		140,576		425,266		936		—		989,734
SM	—		—		3,804		1,204		4,734		6,453		—		—		16,195
SS	—		—		—		—		—		16,798		—		—		16,798
Total	88,339		112,982		92,239		134,404		145,310		448,517		936		—		1,022,727
Non-owner occupied CRE
Pass	141,469		173,149		173,819		336,021		228,382		828,260		—		38		1,881,138
SM	—		—		2,845		—		7,846		23,631		—		—		34,322
SS	—		—		—		570		—		22,160		—		—		22,730
Total	141,469		173,149		176,664		336,591		236,228		874,051		—		38		1,938,190
Total commercial business
Pass	325,972		463,095		365,075		550,981		408,428		1,358,327		144,576		1,864		3,618,318
SM	1,253		5,406		17,827		8,422		14,104		31,567		17,930		2,451		98,960
SS	—		—		1,862		7,480		25		44,925		8,282		141		62,715
Total	327,225		468,501		384,764		566,883		422,557		1,434,819		170,788		4,456		3,779,993
Residential real estate
Pass	—		26,401		47,789		127,594		126,690		44,969		—		—		373,443

SS	—		—		—		898		392		142		—		—		1,432
Total	—		26,401		47,789		128,492		127,082		45,111		—		—		374,875
Real estate construction and land development:
Residential
Pass	38,736		31,507		10,389		1,844		—		1,000		229		—		83,705

SS	—		—		985		—		5,750		—		—		—		6,735
Total	38,736		31,507		11,374		1,844		5,750		1,000		229		—		90,440
Commercial and multifamily
Pass	46,791		74,893		112,764		89,920		1,365		2,613		—		—		328,346
SM	—		—		—		889		—		311		—		—		1,200
SS	—		—		—		—		15,625		6,025		—		—		21,650
Total	46,791		74,893		112,764		90,809		16,990		8,949		—		—		351,196


	September 30, 2025
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted(1)		Loans Receivable
	2025		2024		2023		2022		2021		Prior
	(Dollars in thousands)
Total real estate construction and land development
Pass	85,527		106,400		123,153		91,764		1,365		3,613		229		—		412,051
SM	—		—		—		889		—		311		—		—		1,200
SS	—		—		985		—		21,375		6,025		—		—		28,385
Total	85,527		106,400		124,138		92,653		22,740		9,949		229		—		441,636
Consumer
Pass	1,207		342		692		1,207		265		15,102		150,593		1,403		170,811

SS	—		—		426		35		—		742		402		240		1,845
Total	1,207		342		1,118		1,242		265		15,844		150,995		1,643		172,656
Loans receivable
Pass	412,706		596,238		536,709		771,546		536,748		1,422,011		295,398		3,267		4,574,623
SM	1,253		5,406		17,827		9,311		14,104		31,878		17,930		2,451		100,160
SS	—		—		3,273		8,413		21,792		51,834		8,684		381		94,377
Total	$	413,959	$	601,644	$	557,809	$	789,270	$	572,644	$	1,505,723	$	322,012	$	6,099	$	4,769,160

(1) Represents the loans receivable balance at September 30, 2025 which was converted from a revolving loan to a non-revolving amortizing loan during the nine months ended September 30, 2025.


	December 31, 2024
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted(1)		Loans Receivable
	2024		2023		2022		2021		2020		Prior
	(Dollars in thousands)
Commercial business:
Commercial and industrial
Pass	$	204,107	$	127,603	$	125,220	$	51,126	$	53,115	$	78,039	$	147,861	$	491	$	787,562
SM	161		4,482		6,495		502		1,117		4,490		13,555		2,352		33,154
SS	—		235		857		315		2,516		4,337		12,331		1,365		21,956
Total	204,268		132,320		132,572		51,943		56,748		86,866		173,747		4,208		842,672
Owner-occupied CRE
Pass	116,031		93,567		136,496		147,540		81,161		389,801		534		—		965,130
SM	—		2,719		1,215		4,121		871		15,298		—		—		24,224
SS	—		—		—		1,182		637		12,070		—		—		13,889
Total	116,031		96,286		137,711		152,843		82,669		417,169		534		—		1,003,243
Non-owner-occupied CRE
Pass	168,040		174,993		338,983		238,933		149,804		790,691		—		24		1,861,468
SM	—		—		—		7,988		—		32,925		—		—		40,913
SS	—		—		584		—		—		6,142		—		—		6,726
Total	168,040		174,993		339,567		246,921		149,804		829,758		—		24		1,909,107
Total commercial business
Pass	488,178		396,163		600,699		437,599		284,080		1,258,531		148,395		515		3,614,160
SM	161		7,201		7,710		12,611		1,988		52,713		13,555		2,352		98,291
SS	—		235		1,441		1,497		3,153		22,549		12,331		1,365		42,571
Total	488,339		403,599		609,850		451,707		289,221		1,333,793		174,281		4,232		3,755,022
Residential real estate
Pass	32,857		52,317		135,115		132,150		21,909		26,838		—		—		401,186

SS	—		—		832		786		—		150		—		—		1,768
Total	32,857		52,317		135,947		132,936		21,909		26,988		—		—		402,954


	December 31, 2024
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted(1)		Loans Receivable
	2024		2023		2022		2021		2020		Prior
	(Dollars in thousands)
Real estate construction and land development:
Residential
Pass	34,078		34,436		6,415		—		1,000		955		256		—		77,140

SS	—		1,000		—		5,750		—		—		—		—		6,750
Total	34,078		35,436		6,415		5,750		1,000		955		256		—		83,890
Commercial and multifamily
Pass	37,022		169,816		147,789		9,865		—		3,002		—		—		367,494
SM	—		—		893		—		5,655		5,886		—		—		12,434
SS	—		—		—		15,625		—		—		—		—		15,625
Total	37,022		169,816		148,682		25,490		5,655		8,888		—		—		395,553
Total real estate construction and land development
Pass	71,100		204,252		154,204		9,865		1,000		3,957		256		—		444,634
SM	—		—		893		—		5,655		5,886		—		—		12,434
SS	—		1,000		—		21,375		—		—		—		—		22,375
Total	71,100		205,252		155,097		31,240		6,655		9,843		256		—		479,443
Consumer
Pass	1,882		1,513		1,477		339		3,196		20,518		133,355		820		163,100

SS	—		—		25		—		115		609		60		795		1,604
Total	1,882		1,513		1,502		339		3,311		21,127		133,415		1,615		164,704
Loans receivable
Pass	594,017		654,245		891,495		579,953		310,185		1,309,844		282,006		1,335		4,623,080
SM	161		7,201		8,603		12,611		7,643		58,599		13,555		2,352		110,725
SS	—		1,235		2,298		23,658		3,268		23,308		12,391		2,160		68,318
Total	$	594,178	$	662,681	$	902,396	$	616,222	$	321,096	$	1,391,751	$	307,952	$	5,847	$	4,802,123

(1) Represents the loans receivable balance at December 31, 2024 which was converted from a revolving loan to non-revolving amortizing loan during the year ended December 31, 2024.

The following tables present gross charge-offs by loan class and origination year, for the periods indicated:


	Nine Months Ended September 30, 2025
	Current Period Gross Charge-offs by Origination Year												Revolving Loans		Total Gross Charge-Offs
	2025		2024		2023		2022		2021		Prior
	(Dollars in thousands)
Commercial business	$	—	$	77	$	286	$	429	$	—	$	79	$	—	$	871
Residential real estate	—		—		—		27		—		—		—		27

Consumer	—		10		19		2		—		97		282		410
Total	$	—	$	87	$	305	$	458	$	—	$	176	$	282	$	1,308


	Nine Months Ended September 30, 2024
	Current Period Gross Charge-offs by Origination Year												Revolving Loans		Total Gross Charge-Offs
	2024		2023		2022		2021		2020		Prior
	(Dollars in thousands)
Commercial business	$	—	$	313	$	—	$	—	$	—	$	2,636	$	—	$	2,949


Consumer	—		6		22		—		11		139		268		446
Total	$	—	$	319	$	22	$	—	$	11	$	2,775	$	268	$	3,395

(d) Nonaccrual Loans

The following tables present the amortized cost of nonaccrual loans at the dates indicated:


	September 30, 2025
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	1,033	$	2,385	$	3,418


Total commercial business	1,033		2,385		3,418
Residential real estate	1,290		—		1,290
Real estate construction and land development:
Residential	6,735		—		6,735
Commercial and multifamily	6,025		—		6,025
Total real estate construction and land development	12,760		—		12,760
Consumer	144		—		144
Total	$	15,227	$	2,385	$	17,612


	December 31, 2024
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	1,002	$	667	$	1,669
Owner-occupied CRE	2,250		—		2,250

Total commercial business	3,252		667		3,919





Consumer	160		—		160
Total	$	3,412	$	667	$	4,079

The following tables present the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full or sale of previously classified nonaccrual loans during the periods indicated:


	Three Months Ended September 30,
	2025				2024
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	(37)	$	8	$	—	$	126
Owner-occupied CRE	—		60		(28)		—

Total commercial business	(37)		68		(28)		126
Residential real estate	(5)		—		—		—
Real estate construction and land development:
Residential	(178)		—		—		—



Total	$	(220)	$	68	$	(28)	$	126



	Nine Months Ended September 30,
	2025				2024
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	(59)	$	27	$	(27)	$	339
Owner-occupied CRE	—		60		(28)		144
Non-owner occupied CRE	—		—		—		—
Total commercial business	(59)		87		(55)		483
Residential real estate	(33)		—		—		—
Real estate construction and land development:
Residential	(178)		—		—		—
Commercial and multifamily	(154)		—		—		—
Total real estate construction and land development	(332)		—		—		—
Consumer	—		—		—		—
Total	$	(424)	$	87	$	(55)	$	483

For the three and nine months ended September 30, 2025 and 2024, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the tables above due to payment in full or sale.

(e) Past due loans

The Company performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The following tables present the amortized cost of past due loans at the dates indicated:


	September 30, 2025
	30-89 Days		90 Days or Greater		Total Past Due		Current		Loans Receivable
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	13,559	$	2,267	$	15,826	$	803,250	$	819,076
Owner-occupied CRE	225		—		225		1,022,502		1,022,727
Non-owner occupied CRE	3,425		3,238		6,663		1,931,527		1,938,190
Total commercial business	17,209		5,505		22,714		3,757,279		3,779,993
Residential real estate	—		1,290		1,290		373,585		374,875
Real estate construction and land development:
Residential	—		5,750		5,750		84,690		90,440
Commercial and multifamily	—		—		—		351,196		351,196
Total real estate construction and land development	—		5,750		5,750		435,886		441,636
Consumer	503		100		603		172,053		172,656
Total	$	17,712	$	12,645	$	30,357	$	4,738,803	$	4,769,160


	December 31, 2024
	30-89 Days		90 Days or Greater		Total Past Due		Current		Loans Receivable
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	659	$	2,471	$	3,130	$	839,542	$	842,672
Owner-occupied CRE	1,426		—		1,426		1,001,817		1,003,243
Non-owner occupied CRE	—		—		—		1,909,107		1,909,107
Total commercial business	2,085		2,471		4,556		3,750,466		3,755,022


	December 31, 2024
	30-89 Days		90 Days or Greater		Total Past Due		Current		Loans Receivable
	(Dollars in thousands)
Residential real estate	832		—		832		402,122		402,954
Real estate construction and land development:
Residential	—		—		—		83,890		83,890
Commercial and multifamily	—		—		—		395,553		395,553
Total real estate construction and land development	—		—		—		479,443		479,443
Consumer	339		160		499		164,205		164,704
Total	$	3,256	$	2,631	$	5,887	$	4,796,236	$	4,802,123

As of September 30, 2025 there was $3.3 million of loans 90 days or more past due and still accruing interest, of which $3.2 million was non-owner occupied CRE. There was $1.2 million of loans 90 days or more past due and still accruing interest as of December 31, 2024, all of which were commercial and industrial.

(f) Collateral-dependent Loans

The following tables present the type of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral at the dates indicated, with balances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:


	September 30, 2025
	CRE		Farmland		Residential Real Estate		Equipment		Total
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	—	$	373	$	960	$	68	$	1,401


Total commercial business	—		373		960		68		1,401
Residential real estate	—		—		1,290		—		1,290
Real estate construction and land development:
Residential	—		—		6,735		—		6,735
Commercial and multifamily	6,025		—		—		—		6,025
Total real estate construction and land development	6,025		—		6,735		—		12,760
Consumer	—		—		144		—		144
Total	$	6,025	$	373	$	9,129	$	68	$	15,595


	December 31, 2024
	CRE		Farmland		Residential Real Estate		Total
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	—	$	389	$	613	$	1,002
Owner-occupied CRE	2,250		—		—		2,250

Total commercial business	2,250		389		613		3,252





Consumer	—		—		160		160
Total	$	2,250	$	389	$	773	$	3,412

There have been no significant changes to the collateral securing loans individually evaluated for credit losses and for which repayment was expected to be provided substantially through the operation or sale of the collateral during the nine months ended September 30, 2025, except changes due to additions or removals of loans in this classification.

(g) Modification of Loans

Occasionally, the Company modifies loans to borrowers in financial distress by providing modifications of loans which may include interest rate reductions, principal or interest forgiveness, term extensions, and other actions intended to minimize

economic loss and to avoid foreclosure or repossession of collateral. In some cases, the Company provides multiple types of modifications on one loan. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL.

The following tables present the amortized cost of loans that were experiencing both financial difficulty and modified during the periods indicated:


	Three Months Ended September 30, 2025
	Term Extension		Term Extension & Int. Rate Reduction		Total Modified Loans		% of Modified Loans to Loans Receivable
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	13,199	$	13	$	13,212	1.61	%


Total commercial business	13,199		13		13,212		0.35

Real estate construction and land development:
Residential	6,735		—		6,735		7.45
Commercial and multifamily	15,625		—		15,625		4.45
Total real estate construction and land development	22,360		—		22,360		5.06
Consumer	9		—		9		0.01
Total	$	35,568	$	13	$	35,581	0.75	%


	Three Months Ended September 30, 2024
	Term Extension		Total Modified Loans		% of Modified Loans to Loans Receivable
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	7,041	$	7,041	0.85	%

Non-owner occupied CRE	2,657		2,657		0.14
Total commercial business	9,698		9,698		0.27

Real estate construction and land development:
Residential	6,750		6,750		8.51

Total real estate construction and land development	6,750		6,750		1.47
Consumer	10		10		0.01
Total	$	16,458	$	16,458	0.35	%



	Nine Months Ended September 30, 2025
	Term Extension		Term Extension & Int. Rate Reduction		Total Modified Loans		% of Modified Loans to Loans Receivable

	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	16,716	$	13	$	16,729	2.04	%
Owner-occupied CRE	1,517		—		1,517		0.15
Non-owner occupied CRE	669		—		669		0.03



	Nine Months Ended September 30, 2025
	Term Extension		Term Extension & Int. Rate Reduction		Total Modified Loans		% of Modified Loans to Loans Receivable

Total commercial business	18,902		13		18,915		0.50

Real estate construction and land development:
Residential	6,735		—		6,735		7.45
Commercial and multifamily	22,539		—		22,539		6.42
Total real estate construction and land development	29,274		—		29,274		6.63
Consumer	9		—		9		0.01
Total	$	48,185	$	13	$	48,198	1.01	%



	Nine Months Ended September 30, 2024
	Term Extension		Total Modified Loans		% of Modified Loans to Loans Receivable

	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	20,611	$	20,611	2.50	%

Non-owner occupied CRE	2,658		2,658		0.14
Total commercial business	23,269		23,269		0.64

Real estate construction and land development:
Residential	6,750		6,750		8.51
Commercial and multifamily	20,800		20,800		5.50
Total real estate construction and land development	27,550		27,550		6.02
Consumer	39		39		0.02
Total	$	50,858	$	50,858	1.09	%

The following tables present the financial effects of the loan modifications presented in the preceding tables during the periods indicated:

Three Months Ended
September 30, 2025

Weighted Average Years of Term Extensions

Commercial business:

Commercial and industrial

0.78

Total commercial business

0.78

Real estate construction and land development:

Residential

0.75

Commercial and multifamily

1.00

Total real estate construction and land development

0.93

Consumer

5.33

Total

0.87

Three Months Ended
September 30, 2024

Weighted Average Years of Term Extensions

Commercial business:

Commercial and industrial

0.59

Non-owner occupied CRE

0.83

Total commercial business

0.66

Real estate construction and land development:

Residential

0.17

Total real estate construction and land development

0.17

Consumer

2.17

Total

0.46



	Nine Months Ended September 30, 2025
		Weighted Average Years of Term Extensions
Commercial business:
Commercial and industrial		0.81
Owner-occupied CRE		1.50
Non-owner occupied CRE		0.42
Total commercial business		0.85

Real estate construction and land development:
Residential		0.75
Commercial and multifamily		0.89
Total real estate construction and land development		0.86
Consumer		5.33
Total		0.86



	Nine Months Ended September 30, 2024
		Weighted Average Years of Term Extensions
Commercial business:
Commercial and industrial		0.76

Non-owner occupied CRE		0.83
Total commercial business		0.77

Real estate construction and land development:
Residential		0.17
Commercial and multifamily		0.69
Total real estate construction and land development		0.56
Consumer		1.52
Total		0.66

At September 30, 2025, there were $5.4 million in commitments to lend additional funds to borrowers experiencing financial difficulty whose terms had been modified during the nine months ended September 30, 2025. At December 31, 2024, there were $4.3 million in commitments to lend additional funds to borrowers experiencing financial difficulty whose terms had been modified during the year ended December 31, 2024.

The Company closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The Company considers a modified loan in payment default if the borrower is 90 or more days past due. At September 30, 2025, there were two loans valued at a total of $6.5 million that were 90 days past due or in default that had been modified due to term extension in the past 12 months, of which $5.8 million was residential construction and $0.7 million was non-owner occupied CRE. There were no loans 90 days past due or in default that had been modified in the past 12 months at December 31, 2024.

The following tables present the performance of loans that have been modified with the previous twelve months:


	September 30, 2025
	Current		30-89 Days		90 Days or Greater		Nonaccrual		Total
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	3,734	$	—	$	—	$	—	$	3,734
Owner-occupied CRE	1,517		—		—		—		1,517
Non-owner occupied CRE	—		—		668		—		668
Total commercial business	5,251		—		668		—		5,919

Real estate construction and land development:
Residential	—		—		—		6,735		6,735
Commercial and multifamily	889		—		—		6,025		6,914
Total real estate construction and land development	889		—		—		12,760		13,649
Consumer	16		—		—		—		16
Total	$	6,156	$	—	$	668	$	12,760	$	19,584


	September 30, 2024
	Current		30-89 Days		90 Days or Greater		Nonaccrual		Total
	(Dollars in thousands)
Commercial business:
Commercial and industrial	$	5,821	$	417	$	—	$	—	$	6,238
Owner-occupied CRE	231		—		—		—		231
Non-owner occupied CRE	—		—		—		—		—
Total commercial business	6,052		417		—		—		6,469

Real estate construction and land development:

Commercial and multifamily	15,625		—		—		—		15,625
Total real estate construction and land development	15,625		—		—		—		15,625
Consumer	39		—		—		—		39
Total	$	21,716	$	417	$	—	$	—	$	22,133

(h) Accrued interest receivable on loans receivable

Accrued interest receivable on loans receivable totaled $14.5 million at September 30, 2025 and December 31, 2024, and is excluded from the calculation of the ACL on loans as interest accrued, but not received, is reversed timely.

(i) Foreclosure proceedings in process

At September 30, 2025, there was one residential real estate loan valued at $898,000, for which formal foreclosure proceedings were in process. At December 31, 2024, there was one residential real estate loan, valued at $160,000, for which formal foreclosure proceedings were in process.