XML 27 R12.htm IDEA: XBRL DOCUMENT

Loans and Allowance for Credit Losses on Loans

12 Months Ended

Dec. 31, 2024

Loans and Allowance for Credit Losses on Loans

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:


	December 31,
(In thousands)	2024		2023
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,387,252	$	1,370,446
Commercial real estate - owner-occupied	324,712		301,860
Commercial	382,785		403,901


Total commercial loans	2,094,749		2,076,207
Retail Loans:
Residential real estate	1,752,249		1,763,378
Home equity	253,251		240,341
Consumer	15,010		18,168
Total retail loans	2,020,510		2,021,887
Total loans	$	4,115,259	$	4,098,094

The loan balances for each portfolio segment presented above are net of their respective net unamortized fair value mark discount on acquired loans and net unamortized loan origination costs for the dates indicated:


	December 31,
(In thousands)	2024		2023
Net unamortized fair value mark discount on acquired loans	$	(79)	$	(168)
Net unamortized loan origination costs	6,685		7,113
Total	$	6,606	$	6,945

The Company's lending activities are primarily conducted in Maine, but also includes a loan production office in New Hampshire. The Company originates single- and multi-family residential loans, commercial real estate loans, business loans, municipal loans and a variety of consumer loans. In addition, the Company makes loans for the construction of residential homes, multi-family properties and commercial real estate properties. The ability and willingness of borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the geographic area and the general economy.

Related Party Loans. In the normal course of business, the Company makes loans to certain officers, directors and their associated companies, under terms that are consistent with the Company’s lending policies and regulatory requirements and do not involve more than the normal risk of collectability or present other unfavorable features. At December 31, 2024 and 2023,

outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

ACL on Loans

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions. The Company monitors and manages credit risk through the following governance structure:

•The Credit Risk team, Collection and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Risk, and Commercial and Retail Banking, oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system.

•The adequacy of the ACL is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Collections and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors' Credit Committee of the Board of Directors reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Segmentation. For purposes of determining the ACL on loans, the Company disaggregates its loans into portfolio segments. Each portfolio segment possesses unique risk characteristics that are considered when determining the appropriate level of allowance. As of December 31, 2024 and 2023, the Company's loan portfolio segments, as determined based on the unique risk characteristics of each, included the following:

Commercial Real Estate - Non-Owner-Occupied. Non-owner occupied commercial real estate loans are, in substance, all commercial real estate loans that are not categorized by the Company as owner-occupied commercial real estate loans. Non owner-occupied commercial estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non-owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial Real Estate - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice facilities and other specific use properties. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines.

Commercial. Commercial loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate, if applicable. Commercial loans are primarily paid by the operating cash flow of the borrower. Commercial loans may be secured or unsecured.

Residential Real Estate. Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. Collateral consists of mortgage liens on one- to four-family residences, including for investment purposes.

Home Equity. Home equity loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. The home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

Consumer. Consumer loan products including personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, auto loans, debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. Consumer loans may be secured or unsecured.

ACL on Loans. The following table presents the activity in the ACL on loans, as reported under CECL, for the periods indicated:


	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		Residential Real Estate		Home Equity		Consumer		Total
At or For the Year Ended December 31, 2024
Beginning balance, December 31, 2023	$	16,581	$	2,290	$	4,869	$	10,254	$	2,217	$	724	$	36,935
Loans charged-off	—		—		(1,784)		—		(1)		(98)		(1,883)
Recoveries	10		—		455		26		98		34		623
(Credit) provision for loan losses	(1,694)		191		2,316		(301)		83		(542)		53
Ending balance, December 31, 2024	$	14,897	$	2,481	$	5,856	$	9,979	$	2,397	$	118	$	35,728
At or For the Year Ended December 31, 2023
Beginning balance, December 31, 2022	$	17,296	$	2,362	$	5,446	$	9,089	$	2,225	$	504	$	36,922
Loans charged-off	—		(58)		(1,560)		(18)		—		(91)		(1,727)
Recoveries	19		—		471		44		1		31		566
(Credit) provision for loan losses	(734)		(14)		512		1,139		(9)		280		1,174
Ending balance, December 31, 2023	$	16,581	$	2,290	$	4,869	$	10,254	$	2,217	$	724	$	36,935

The significant model inputs and assumptions used within the discounted cash flow model for purposes of estimating the ACL on loans were:

•Macroeconomic (loss) drivers: As of December 31, 2024 and 2023, the following loss drivers for each loan segment were used to calculate the expected PD over the forecast and reversion period: (i) commercial real estate – non-owner-occupied used Maine Unemployment and change in Maine GDP; (ii) commercial real estate – owner-occupied used Maine Unemployment and change in Maine GDP, (iii) commercial used Maine Unemployment and change in National GDP; (iv) residential real estate used Maine Unemployment and change in Maine House Price Index, (v) home equity used Maine Unemployment and change in Maine House Price Index and (vi) consumer used Maine Unemployment and change in National GDP.

•Reasonable and Supportable Forecast Period: As of December 31, 2024 and 2023, the ACL on loans estimate used a reasonable and supportable forecast period of two years.

•Reversion Period: As of December 31, 2024 and 2023, the ACL on loans estimate used a reversion period of two years.

•Prepayment Speeds: As of December 31, 2024 and 2023, the estimated prepayment speed for each loan segment continued to be derived used internally-sourced prepayment data. There were no changes to the prepayment speeds in 2024.

•Qualitative Factors: As of December 31, 2024 and 2023, the ACL on loans estimate incorporated various qualitative factors into the calculation.

Credit Concentrations. The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and commercial real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes. As of December 31, 2024, the Company's total exposure to the lessors of residential buildings' industry and lessors of nonresidential buildings’ industry were both 13% of total loans, and 32% and 31% of total commercial real estate loans, respectively. There were no other industry concentrations exceeding 10% of the Company's total loan portfolio as of December 31, 2024.

Credit Quality Indicators. To further identify loans with similar risk profiles, the Company categorizes each portfolio segment into classes by credit risk characteristic and applies a credit quality indicator to each portfolio segment. The indicators for commercial real estate - non-owner-occupied and owner-occupied, commercial and residential real estate portfolio segments are represented by Grades 1 through 10 as outlined below. In general, risk ratings are adjusted periodically throughout the year as updated analysis and review warrants. This process may include, but is not limited to, annual credit and loan reviews, periodic reviews of loan performance metrics, such as delinquency rates, and quarterly reviews of adversely risk rated loans. The Company uses the following definitions when assessing grades for the purpose of evaluating the risk and adequacy of the ACL on loans:

•Grade 1 through 6 — Grades 1 through 6 represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risks, which is measured using a variety of credit risk criteria, such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.

•Grade 7 — Loans with potential weakness (Special Mention). Loans in this category are currently protected based on collateral and repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment process at some future date. This classification is used if a negative trend is evident in the obligor’s financial situation. Special mention loans do not sufficiently expose the Company to warrant adverse classification.

•Grade 8 — Loans with definite weakness (Substandard). Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by collateral pledged. Borrowers experience difficulty in meeting debt repayment requirements. Deterioration is sufficient to cause the Company to look to the sale of collateral.

•Grade 9 — Loans with potential loss (Doubtful). Loans classified as doubtful have all the weaknesses inherent in the substandard grade with the added characteristic that the weaknesses make collection or liquidation of the loan in full highly questionable and improbable. The possibility of some loss is extremely high, but because of specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

•Grade 10 — Loans with definite loss (Loss). Loans classified as loss are considered uncollectible. The loss classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset because recovery and collection time may be protracted.

The Company periodically reassesses asset quality indicators to reflect appropriately the risk composition of the Company’s loan portfolio. Home equity and consumer loans are not individually risk rated, but rather analyzed as groups taking into account delinquency rates and other economic conditions which may affect the ability of borrowers to meet debt service requirements, including interest rates and energy costs. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due over 90 days and non-accrual loans, are considered non-performing.

Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage, reported under the CECL methodology, was as follows as of December 31, 2024:


(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate - non-owner-occupied
Risk rating:
Pass (Grades 1-6)	$	91,377	$	107,607	$	324,743	$	285,862	$	140,686	$	390,527	$	—	$	—	$	1,340,802
Special mention (Grade 7)	—		—		—		—		342		225		—		—		567
Substandard (Grade 8)	—		195		25,252		—		—		20,436		—		—		45,883
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	91,377	$	107,802	$	349,995	$	285,862	$	141,028	$	411,188	$	—	$	—	$	1,387,252
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner-occupied
Risk rating:
Pass (Grades 1-6)	$	53,436	$	31,141	$	48,633	$	71,629	$	19,582	$	89,092	$	—	$	—	$	313,513
Special mention (Grade 7)	—		—		—		1,900		—		304		—		—		2,204
Substandard (Grade 8)	—		540		822		191		—		7,442		—		—		8,995
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner-occupied	$	53,436	$	31,681	$	49,455	$	73,720	$	19,582	$	96,838	$	—	$	—	$	324,712
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial
Risk rating:
Pass (Grades 1-6)	$	81,815	$	26,918	$	44,283	$	30,134	$	16,644	$	23,014	$	115,795	$	37,211	$	375,814
Special mention (Grade 7)	534		—		—		—		—		—		282		—		816
Substandard (Grade 8)	—		1,030		706		159		125		1,175		984		1,976		6,155
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	82,349	$	27,948	$	44,989	$	30,293	$	16,769	$	24,189	$	117,061	$	39,187	$	382,785
Gross charge-offs for the year ended	$	—	$	146	$	47	$	54	$	89	$	1,017	$	357	$	74	$	1,784
Residential Real Estate
Risk rating:
Pass (Grades 1-6)	$	133,856	$	151,020	$	500,756	$	502,285	$	204,756	$	255,104	$	406	$	1,175	$	1,749,358
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		778		—		2,113		—		—		2,891
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	133,856	$	151,020	$	500,756	$	503,063	$	204,756	$	257,217	$	406	$	1,175	$	1,752,249
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity
Risk rating:
Performing	$	3,708	$	13,961	$	20,003	$	439	$	302	$	13,378	$	185,581	$	15,448	$	252,820
Non-performing	—		—		—		—		—		8		264		159		431
Total home equity	$	3,708	$	13,961	$	20,003	$	439	$	302	$	13,386	$	185,845	$	15,607	$	253,251
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	1
Consumer
Risk rating:
Performing	$	4,307	$	3,188	$	2,784	$	1,080	$	380	$	2,102	$	1,151	$	—	$	14,992
Non-performing	—		—		15		—		—		3		—		—		18
Total consumer	$	4,307	$	3,188	$	2,799	$	1,080	$	380	$	2,105	$	1,151	$	—	$	15,010
Gross charge-offs for the year ended	$	—	$	47	$	18	$	14	$	5	$	—	$	14	$	—	$	98

Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage, reported under the CECL methodology, was as follows as of December 31, 2023:


(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2023
Commercial real estate - non-owner-occupied
Risk rating:
Pass (Grades 1-6)	$	103,012	$	364,777	$	296,152	$	146,707	$	116,777	$	320,101	$	—	$	—	$	1,347,526
Special mention (Grade 7)	7,997		—		—		350		33		3,597		—		—		11,977
Substandard (Grade 8)	747		450		—		2,287		114		7,345		—		—		10,943
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	$	111,756	$	365,227	$	296,152	$	149,344	$	116,924	$	331,043	$	—	$	—	$	1,370,446
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - owner-occupied
Risk rating:
Pass (Grades 1-6)	$	26,902	$	53,550	$	76,575	$	24,608	$	18,728	$	89,133	$	—	$	—	$	289,496
Special mention (Grade 7)	—		—		2,355		—		—		141		—		—		2,496
Substandard (Grade 8)	—		402		320		—		—		9,146		—		—		9,868
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner-occupied	$	26,902	$	53,952	$	79,250	$	24,608	$	18,728	$	98,420	$	—	$	—	$	301,860
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	58	$	—	$	—	$	58
Commercial
Risk rating:
Pass (Grades 1-6)	$	41,871	$	54,323	$	56,102	$	24,338	$	25,620	$	35,442	$	119,119	$	36,895	$	393,710
Special mention (Grade 7)	45		—		152		195		—		101		660		5		1,158
Substandard (Grade 8)	248		588		296		769		955		1,354		2,415		2,408		9,033
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	$	42,164	$	54,911	$	56,550	$	25,302	$	26,575	$	36,897	$	122,194	$	39,308	$	403,901
Gross charge-offs for the year ended	$	—	$	68	$	137	$	31	$	20	$	1,075	$	82	$	147	$	1,560
Residential Real Estate
Risk rating:
Pass (Grades 1-6)	$	160,315	$	539,835	$	540,980	$	220,943	$	70,917	$	226,126	$	370	$	386	$	1,759,872
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		963		—		89		2,454		—		—		3,506
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	$	160,315	$	539,835	$	541,943	$	220,943	$	71,006	$	228,580	$	370	$	386	$	1,763,378
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	18	$	—	$	—	$	18
Home equity
Risk rating:
Performing	$	15,976	$	23,104	$	547	$	324	$	4,124	$	12,686	$	169,416	$	13,405	$	239,582
Non-performing	—		—		—		—		—		11		527		221		759
Total home equity	$	15,976	$	23,104	$	547	$	324	$	4,124	$	12,697	$	169,943	$	13,626	$	240,341
Gross charge-offs for the year ended	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Risk rating:
Performing	$	5,525	$	4,908	$	2,068	$	815	$	345	$	2,279	$	2,191	$	—	$	18,131
Non-performing	—		—		5		—		—		32		—		—		37
Total consumer	$	5,525	$	4,908	$	2,073	$	815	$	345	$	2,311	$	2,191	$	—	$	18,168
Gross charge-offs for the year ended	$	2	$	19	$	31	$	14	$	8	$	4	$	13	$	—	$	91

Past Due and Non-Accrual Loans. The Company closely monitors the performance of its loan portfolio. A loan is placed on non-accrual when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on non-accrual, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months. Unsecured loans, however, are not normally placed on non-accrual because they are charged-off once their collectability is in doubt.

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:


(In thousands)	30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
December 31, 2024:
Commercial real estate - non-owner-occupied	$	59	$	—	$	130	$	189	$	1,387,063	$	1,387,252	$	—
Commercial real estate - owner-occupied	85		545		430		1,060		323,652		324,712		—
Commercial	373		265		1,548		2,186		380,599		382,785		—
Residential real estate	333		333		974		1,640		1,750,609		1,752,249		—
Home equity	428		141		125		694		252,557		253,251		—
Consumer	55		13		18		86		14,924		15,010		—
Total	$	1,333	$	1,297	$	3,225	$	5,855	$	4,109,404	$	4,115,259	$	—
December 31, 2023:
Commercial real estate - non-owner-occupied	$	44	$	41	$	184	$	269	$	1,370,177	$	1,370,446	$	—
Commercial real estate - owner-occupied	655		—		—		655		301,205		301,860		—
Commercial	1,153		1,199		1,155		3,507		400,394		403,901		—
Residential real estate	1,317		322		1,094		2,733		1,760,645		1,763,378		—
Home equity	521		451		301		1,273		239,068		240,341		—
Consumer	85		8		5		98		18,070		18,168		—
Total	$	3,775	$	2,021	$	2,739	$	8,535	$	4,089,559	$	4,098,094	$	—

The following table presents the amortized cost basis of loans on non-accrual status by portfolio segment as of the dates indicated:


	December 31,
	2024						2023
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	129	$	—	$	129	$	261	$	—	$	261
Commercial real estate - owner-occupied	430		—		430		125		—		125
Commercial	1,927		—		1,927		1,725		—		1,725
Residential real estate	1,891		—		1,891		2,541		—		2,541
Home equity	434		—		434		759		—		759
Consumer	18		—		18		37		—		37
Total	$	4,829	$	—	$	4,829	$	5,448	$	—	$	5,448

The following table presents the amortized cost basis of collateral-dependent loans by portfolio segment and collateral type, as of the dates indicated:


	December 31, 2024						December 31, 2023
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		Other Assets				Real Estate		Other Assets


Commercial real estate - non-owner-occupied	$	4,448	$	—	$	4,448	$	4,494	$	—	$	4,494

Commercial	—		669		669		671		—		671

Total	$	4,448	$	669	$	5,117	$	5,165	$	—	$	5,165

Collateral-dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment.

Interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms for the years ended December 31, 2024, 2023, and 2022 is estimated to have been $190,000, $131,000, and $145,000, respectively.

The Company's policy is to reverse previously recorded interest income when a loan is placed on non-accrual, as such, the Company did not record any interest income on its non-accrual for the years ended December 31, 2024, 2023, and 2022. As of December 31, 2024 and 2023, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $12.7 million at each date, and reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

Loan Modifications for Borrowers Experiencing Financial Difficulty

The Company offers several types of loans and receivables modification programs to borrowers experiencing financial difficulty, primarily interest rate reductions and term extensions. In such instances, the Company may modify loans and receivables with the intention to minimize future losses and improve collectability, while providing customers with temporary or permanent financial relief.

The following table presents the amortized cost basis of loans, by class and by type of modification, that were both experiencing financial difficulty and modified during the year ended December 31, 2024 and 2023. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable as of December 31, 2024 and 2023, is also presented below:


(In thousands)	Number of modified loans	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Total % of Portfolio
December 31, 2024:

Commercial	3	$	—	$	—	$	1,060	$	—	$	—	$	—	0.3	%



Total	3	$	—	$	—	$	1,060	$	—	$	—	$	—	—	%

December 31, 2023:
Commercial real estate - non-owner-occupied	1	$	—	$	—	$	4,494	$	—	$	—	$	—	0.3	%
Total	1	$	—	$	—	$	4,494	$	—	$	—	$	—	0.1	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2024 and December 31, 2023:


(In thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension (Years)
December 31, 2024:
Commercial	$	—	—	%	1.4

December 31, 2023:
Commercial real estate - non-owner-occupied	$	—	—	%	1.3

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts and relevant factors are considered while assessing the adequacy of the ACL. As of December 31, 2024 and 2023, there were no modified loans, or commitments to lend additional funds to borrowers experiencing financial difficulty that were past due or for which the borrower subsequently defaulted.

In-Process Foreclosure Proceedings

At December 31, 2024 and 2023, the Company had $1.0 million and $1.1 million, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.