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Loans | 9 Months Ended
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Sep. 30, 2024
Loans and Leases Receivable Disclosure [Abstract] |
Loans | 4.) LOANS The Company’s loan portfolio consisted of the following as of the dates indicated (in thousands):
|  | Principal Amount Outstanding |  |  | Net Deferred Loan (Fees) Costs |  |  | Loans, Net |
September 30, 2024 |  |  |  |  |  |  |  |  |
Commercial business |  | $ | 653,921 |  |  | $ | 598 |  |  | $ | 654,519 |
Commercial mortgage - construction |  |  | 535,124 |  |  |  | (1,618 | ) |  |  | 533,506 |
Commercial mortgage - multifamily |  |  | 468,064 |  |  |  | (537 | ) |  |  | 467,527 |
Commercial mortgage - non-owner occupied |  |  | 815,369 |  |  |  | (977 | ) |  |  | 814,392 |
Commercial mortgage - owner occupied |  |  | 290,221 |  |  |  | (5 | ) |  |  | 290,216 |
Residential real estate loans |  |  | 636,870 |  |  |  | 11,371 |  |  |  | 648,241 |
Residential real estate lines |  |  | 72,926 |  |  |  | 3,277 |  |  |  | 76,203 |
Consumer indirect |  |  | 846,903 |  |  |  | 27,748 |  |  |  | 874,651 |
Other consumer |  |  | 43,803 |  |  |  | (69 | ) |  |  | 43,734 |
Total |  | $ | 4,363,201 |  |  | $ | 39,788 |  |  |  | 4,402,989 |
Allowance for credit losses – loans |  |  |  |  |  |  |  |  | (44,678 | )
Total loans, net |  |  |  |  |  |  |  | $ | 4,358,311 |
December 31, 2023 |  |  |  |  |  |  |  |  |
Commercial business |  | $ | 734,947 |  |  | $ | 753 |  |  | $ | 735,700 |
Commercial mortgage - construction |  |  | 495,198 |  |  |  | (2,195 | ) |  |  | 493,003 |
Commercial mortgage - multifamily |  |  | 452,778 |  |  |  | (623 | ) |  |  | 452,155 |
Commercial mortgage - non-owner occupied |  |  | 789,631 |  |  |  | (1,116 | ) |  |  | 788,515 |
Commercial mortgage - owner occupied |  |  | 271,662 |  |  |  | (16 | ) |  |  | 271,646 |
Residential real estate loans |  |  | 637,173 |  |  |  | 12,649 |  |  |  | 649,822 |
Residential real estate lines |  |  | 73,972 |  |  |  | 3,395 |  |  |  | 77,367 |
Consumer indirect |  |  | 915,723 |  |  |  | 33,108 |  |  |  | 948,831 |
Other consumer |  |  | 45,167 |  |  |  | (67 | ) |  |  | 45,100 |
Total |  | $ | 4,416,251 |  |  | $ | 45,888 |  |  |  | 4,462,139 |
Allowance for credit losses – loans |  |  |  |  |  |  |  |  | (51,082 | )
Total loans, net |  |  |  |  |  |  |  | $ | 4,411,057 |
Loans held for sale (not included above) were comprised entirely of residential real estate mortgages and totaled $2.5 million and $1.4 million as of September 30, 2024 and December 31, 2023, respectively. The Company sells certain qualifying newly originated or refinanced residential real estate loans on the secondary market. Residential real estate loans serviced for others, which are not included in the consolidated statements of financial condition, amounted to $276.8 million and $269.4 million as of September 30, 2024 and December 31, 2023, respectively. The Company elected to exclude AIR from the amortized cost basis of loans disclosed throughout this footnote. As of both September 30, 2024, and December 31, 2023, AIR for loans totaled $20.8 million and is included in other assets on the Company’s consolidated statements of financial condition. (4.) LOANS (Continued) Past Due Loans Aging The Company’s recorded investment, by loan class, in current and nonaccrual loans, as well as an analysis of accruing delinquent loans is set forth as of the dates indicated (in thousands):
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater Than 90 Days |  |  | Total Past Due |  |  | Nonaccrual |  |  | Current |  |  | Total Loans |  |  | Nonaccrual with no specific allowance |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial business |  | $ | 7 |  |  | $ | 6,500 |  |  | $ | 8 |  |  | $ | 6,515 |  |  | $ | 5,752 |  |  | $ | 641,654 |  |  | $ | 653,921 |  |  | $ | 332 |
Commercial mortgage - construction |  |  | 52 |  |  |  | — |  |  |  | — |  |  |  | 52 |  |  |  | 20,280 |  |  |  | 514,792 |  |  |  | 535,124 |  |  |  | 20,280 |
Commercial mortgage - multifamily |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 71 |  |  |  | 467,993 |  |  |  | 468,064 |  |  |  | 71 |
Commercial mortgage - non-owner occupied |  |  | 334 |  |  |  | — |  |  |  | — |  |  |  | 334 |  |  |  | 4,903 |  |  |  | 810,132 |  |  |  | 815,369 |  |  |  | 4,582 |
Commercial mortgage - owner occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 366 |  |  |  | 289,855 |  |  |  | 290,221 |  |  |  | 366 |
Residential real estate loans |  |  | 2,356 |  |  |  | — |  |  |  | — |  |  |  | 2,356 |  |  |  | 5,790 |  |  |  | 628,724 |  |  |  | 636,870 |  |  |  | 5,790 |
Residential real estate lines |  |  | 81 |  |  |  | 49 |  |  |  | — |  |  |  | 130 |  |  |  | 232 |  |  |  | 72,564 |  |  |  | 72,926 |  |  |  | 232 |
Consumer indirect |  |  | 7,284 |  |  |  | 1,998 |  |  |  | — |  |  |  | 9,282 |  |  |  | 3,291 |  |  |  | 834,330 |  |  |  | 846,903 |  |  |  | 3,291 |
Other consumer |  |  | 236 |  |  |  | 11 |  |  |  | 35 |  |  |  | 282 |  |  |  | 14 |  |  |  | 43,507 |  |  |  | 43,803 |  |  |  | 14 |
Total loans, gross |  | $ | 10,350 |  |  | $ | 8,558 |  |  | $ | 43 |  |  | $ | 18,951 |  |  | $ | 40,699 |  |  | $ | 4,303,551 |  |  | $ | 4,363,201 |  |  | $ | 34,958 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial business |  | $ | 341 |  |  | $ | — |  |  | $ | — |  |  | $ | 341 |  |  | $ | 5,664 |  |  | $ | 728,942 |  |  | $ | 734,947 |  |  | $ | 341 |
Commercial mortgage - construction |  |  | — |  |  |  | 727 |  |  |  | — |  |  |  | 727 |  |  |  | 5,320 |  |  |  | 489,151 |  |  |  | 495,198 |  |  |  | 5,320 |
Commercial mortgage - multifamily |  |  | 4,036 |  |  |  | — |  |  |  | — |  |  |  | 4,036 |  |  |  | 189 |  |  |  | 448,553 |  |  |  | 452,778 |  |  |  | 189 |
Commercial mortgage - non-owner occupied |  |  | 338 |  |  |  | — |  |  |  | — |  |  |  | 338 |  |  |  | 4,651 |  |  |  | 784,642 |  |  |  | 789,631 |  |  |  | 4,651 |
Commercial mortgage - owner occupied |  |  | 1,526 |  |  |  | — |  |  |  | — |  |  |  | 1,526 |  |  |  | 403 |  |  |  | 269,733 |  |  |  | 271,662 |  |  |  | 403 |
Residential real estate loans |  |  | 2,614 |  |  |  | 80 |  |  |  | — |  |  |  | 2,694 |  |  |  | 6,364 |  |  |  | 628,115 |  |  |  | 637,173 |  |  |  | 6,364 |
Residential real estate lines |  |  | 163 |  |  |  | 20 |  |  |  | — |  |  |  | 183 |  |  |  | 221 |  |  |  | 73,568 |  |  |  | 73,972 |  |  |  | 221 |
Consumer indirect |  |  | 16,128 |  |  |  | 3,204 |  |  |  | — |  |  |  | 19,332 |  |  |  | 3,814 |  |  |  | 892,577 |  |  |  | 915,723 |  |  |  | 3,814 |
Other consumer |  |  | 122 |  |  |  | 27 |  |  |  | 21 |  |  |  | 170 |  |  |  | 13 |  |  |  | 44,984 |  |  |  | 45,167 |  |  |  | 13 |
Total loans, gross |  | $ | 25,268 |  |  | $ | 4,058 |  |  | $ | 21 |  |  | $ | 29,347 |  |  | $ | 26,639 |  |  | $ | 4,360,265 |  |  | $ | 4,416,251 |  |  | $ | 21,316 |
There were $35 thousand and $21 thousand in consumer overdrafts which were past due greater than 90 days as of September 30, 2024 and December 31, 2023. Consumer overdrafts are overdrawn deposit accounts which have been reclassified as loans but by their terms do not accrue interest. Interest income on nonaccrual loans, if recognized, is recorded using the cash basis method of accounting. There was no interest income recognized on nonaccrual loans during the nine months ended September 30, 2024 and 2023. Estimated interest income of $519 thousand and $437 thousand for the nine months ended September 30, 2024 and 2023, respectively, would have been recorded if all such loans had been accruing interest according to their original contractual terms. Loan Modifications for Borrowers Experiencing Financial Difficulty Loans may be modified when it is determined that a borrower is experiencing financial difficulty. Loan modifications may include principal forgiveness, interest rate reduction, an other-than-insignificant payment delay, and term extensions, or a combination of these concessions. (4.) LOANS (Continued) The following table presents the amortized cost basis of loans modified to borrowers experiencing financial difficulty, disaggregated by loan class and type of concession granted as of September 30, 2024 (in thousands):
|  | Term Extension |
|  | Amortized Cost Basis |  |  | % of Total Loans |
Loan Type |  |  |  |  |  |
Commercial business |  | $ | — |  |  |  | 0.0 | %
Commercial mortgage - construction |  |  | — |  |  |  | 0.0 | %
Commercial mortgage - multifamily |  |  | — |  |  |  | 0.0 | %
Commercial mortgage - non-owner occupied |  |  | — |  |  |  | 0.0 | %
Commercial mortgage - owner occupied |  |  | — |  |  |  | 0.0 | %
Residential real estate loans |  |  | 1,736 |  |  |  | 0.1 | %
Residential real estate lines |  |  | — |  |  |  | 0.0 | %
Consumer indirect |  |  | — |  |  |  | 0.0 | %
Other consumer |  |  | — |  |  |  | 0.0 | %
Total |  | $ | 1,736 |  |  |  | 0.1 | %
The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:
Term Extension
Loan Type |  | Financial Effect
Residential real estate loans |  | Added a weighted average 10.0 years to the life of the loan, which reduced the monthly payment amount for the borrower.
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 depicts the performance of loans that have been modified in the nine months ended September 30, 2024 (in thousands):
|  | Payment Status (Amortized Cost Basis) |
|  | Current |  |  | 30-89 Days Past Due |  |  | 90+ Days Past Due |
Loan Type |  |  |  |  |  |  |  |  |
Commercial business |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial mortgage - construction |  |  | — |  |  |  | — |  |  |  | — |
Commercial mortgage - multifamily |  |  | — |  |  |  | — |  |  |  | — |
Commercial mortgage - non-owner occupied |  |  | — |  |  |  | — |  |  |  | — |
Commercial mortgage - owner occupied |  |  | — |  |  |  | — |  |  |  | — |
Residential real estate loans |  |  | 1,196 |  |  |  | 386 |  |  |  | 154 |
Residential real estate lines |  |  | — |  |  |  | — |  |  |  | — |
Consumer indirect |  |  | — |  |  |  | — |  |  |  | — |
Other consumer |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 1,196 |  |  | $ | 386 |  |  | $ | 154 |
(4.) LOANS (Continued) Collateral Dependent Loans Management has determined that specific commercial loans on nonaccrual status, all loans that have had their terms restructured when a borrower is experiencing financial difficulty, and other loans deemed appropriate by management where repayment is expected to be provided substantially through the operation or sale of the collateral to be collateral dependent loans. The following table presents the amortized cost basis of collateral dependent loans by collateral type as of September 30, 2024 and December 31, 2023 (in thousands):
|  | Collateral type |  |  |  |  |  |  |
|  | Business assets |  |  | Real property |  |  | Total |  |  | Specific Reserve |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Commercial business |  | $ | 6,939 |  |  | $ | 5,000 |  |  | $ | 11,939 |  |  | $ | 2,321 |
Commercial mortgage - construction |  |  | — |  |  |  | 29,812 |  |  |  | 29,812 |  |  |  | — |
Commercial mortgage - multifamily |  |  | — |  |  |  | 70 |  |  |  | 70 |  |  |  | — |
Commercial mortgage - non-owner occupied |  |  | — |  |  |  | 17,788 |  |  |  | 17,788 |  |  |  | 24 |
Commercial mortgage - owner occupied |  |  | — |  |  |  | 745 |  |  |  | 745 |  |  |  | — |
Total |  | $ | 6,939 |  |  | $ | 53,415 |  |  | $ | 60,354 |  |  | $ | 2,345 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Commercial business |  | $ | 8,698 |  |  | $ | 5,000 |  |  | $ | 13,698 |  |  | $ | 2,198 |
Commercial mortgage - construction |  |  | — |  |  |  | 14,939 |  |  |  | 14,939 |  |  |  | — |
Commercial mortgage - multifamily |  |  | — |  |  |  | 6,164 |  |  |  | 6,164 |  |  |  | 559 |
Commercial mortgage - non-owner occupied |  |  | — |  |  |  | 4,651 |  |  |  | 4,651 |  |  |  | — |
Commercial mortgage - owner occupied |  |  | — |  |  |  | 821 |  |  |  | 821 |  |  |  | — |
Total |  | $ | 8,698 |  |  | $ | 31,575 |  |  | $ | 40,273 |  |  | $ | 2,757 |
Credit Quality Indicators The Company categorizes 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, public information, and current economic trends, among other factors such as the fair value of collateral. The Company analyzes commercial business and commercial mortgage loans individually by classifying the loans as to credit risk. Risk ratings are updated any time the situation warrants. The Company uses the following definitions for risk ratings: 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 Company’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 obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize 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. Loans that do not meet the criteria above that are analyzed individually as part of the process described above are considered “uncriticized” or pass-rated loans and are included in groups of homogeneous loans with similar risk and loss characteristics. (4.) LOANS (Continued) The following tables set forth the Company’s commercial loan portfolio, categorized by internally assigned asset classification, as of the dates indicated (in thousands):
|  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |
|  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Revolving Loans Amortized Cost Basis |  |  | Revolving Loans Converted to Term |  |  | Total |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Business: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 79,428 |  |  | $ | 85,801 |  |  | $ | 76,264 |  |  | $ | 46,767 |  |  | $ | 33,608 |  |  | $ | 20,535 |  |  | $ | 277,164 |  |  | $ | — |  |  | $ | 619,567 |
Special mention |  |  | 95 |  |  |  | 5,487 |  |  |  | 319 |  |  |  | 2,261 |  |  |  | 3 |  |  |  | 1,843 |  |  |  | 8,931 |  |  |  | — |  |  |  | 18,939 |
Substandard |  |  | 15 |  |  |  | 1,077 |  |  |  | 21 |  |  |  | 72 |  |  |  | 22 |  |  |  | 200 |  |  |  | 9,093 |  |  |  | — |  |  |  | 10,500 |
Doubtful |  |  | — |  |  |  | — |  |  |  | 5,039 |  |  |  | — |  |  |  | — |  |  |  | 265 |  |  |  | 209 |  |  |  | — |  |  |  | 5,513 |
Total Commercial Business loans |  | $ | 79,538 |  |  | $ | 92,365 |  |  | $ | 81,643 |  |  | $ | 49,100 |  |  | $ | 33,633 |  |  | $ | 22,843 |  |  | $ | 295,397 |  |  | $ | — |  |  | $ | 654,519 |
Current period gross write-offs |  | $ | — |  |  | $ | 5 |  |  | $ | — |  |  | $ | 20 |  |  | $ | — |  |  | $ | 85 |  |  | $ | — |  |  | $ | — |  |  | $ | 110 |
Commercial Mortgage - Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 25,209 |  |  | $ | 156,803 |  |  | $ | 307,613 |  |  | $ | 3,996 |  |  | $ | 346 |  |  | $ | 6,683 |  |  | $ | — |  |  | $ | — |  |  | $ | 500,650 |
Special mention |  |  | — |  |  |  | — |  |  |  | 723 |  |  |  | 2,269 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,992 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,583 |  |  |  | — |  |  |  | — |  |  |  | 9,583 |
Doubtful |  |  | — |  |  |  | 820 |  |  |  | — |  |  |  | 19,461 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 20,281 |
Total Commercial Mortgage - Construction |  | $ | 25,209 |  |  | $ | 157,623 |  |  | $ | 308,336 |  |  | $ | 25,726 |  |  | $ | 346 |  |  | $ | 16,266 |  |  | $ | — |  |  | $ | — |  |  | $ | 533,506 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial Mortgage - Multifamily |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 16,393 |  |  | $ | 106,024 |  |  | $ | 46,205 |  |  | $ | 145,511 |  |  | $ | 65,848 |  |  | $ | 70,012 |  |  | $ | — |  |  | $ | — |  |  | $ | 449,993 |
Special mention |  |  | — |  |  |  | — |  |  |  | 3,778 |  |  |  | — |  |  |  | 6,825 |  |  |  | 5,721 |  |  |  | — |  |  |  | — |  |  |  | 16,324 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 472 |  |  |  | 667 |  |  |  | — |  |  |  | — |  |  |  | 1,139 |
Doubtful |  |  | — |  |  |  | 71 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 71 |
Total Commercial Mortgage - Multifamily |  | $ | 16,393 |  |  | $ | 106,095 |  |  | $ | 49,983 |  |  | $ | 145,511 |  |  | $ | 73,145 |  |  | $ | 76,400 |  |  | $ | — |  |  | $ | — |  |  | $ | 467,527 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 13 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 13 |
Commercial Mortgage - Non-Owner Occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 33,926 |  |  | $ | 68,164 |  |  | $ | 241,192 |  |  | $ | 101,858 |  |  | $ | 83,380 |  |  | $ | 255,321 |  |  | $ | — |  |  | $ | — |  |  | $ | 783,841 |
Special mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,726 |  |  |  | — |  |  |  | 7,824 |  |  |  | — |  |  |  | — |  |  |  | 12,550 |
Substandard |  |  | — |  |  |  | 12,885 |  |  |  | — |  |  |  | 210 |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 13,098 |
Doubtful |  |  | — |  |  |  | — |  |  |  | 321 |  |  |  | — |  |  |  | — |  |  |  | 4,582 |  |  |  | — |  |  |  | — |  |  |  | 4,903 |
Total Commercial Mortgage - Non-Owner Occupied |  | $ | 33,926 |  |  | $ | 81,049 |  |  | $ | 241,513 |  |  | $ | 106,794 |  |  | $ | 83,380 |  |  | $ | 267,730 |  |  | $ | — |  |  | $ | — |  |  | $ | 814,392 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial Mortgage - Owner Occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 59,047 |  |  | $ | 43,501 |  |  | $ | 50,565 |  |  | $ | 34,492 |  |  | $ | 43,908 |  |  | $ | 55,723 |  |  | $ | — |  |  | $ | — |  |  | $ | 287,236 |
Special mention |  |  | — |  |  |  | — |  |  |  | 454 |  |  |  | — |  |  |  | 318 |  |  |  | 1,228 |  |  |  | — |  |  |  | — |  |  |  | 2,000 |
Substandard |  |  | — |  |  |  | — |  |  |  | 224 |  |  |  | — |  |  |  | 379 |  |  |  | 12 |  |  |  | — |  |  |  | — |  |  |  | 615 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 365 |  |  |  | — |  |  |  | — |  |  |  | 365 |
Total Commercial Mortgage - Owner Occupied |  | $ | 59,047 |  |  | $ | 43,501 |  |  | $ | 51,243 |  |  | $ | 34,492 |  |  | $ | 44,605 |  |  | $ | 57,328 |  |  | $ | — |  |  | $ | — |  |  | $ | 290,216 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(4.) LOANS (Continued)
|  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |
|  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Revolving Loans Amortized Cost Basis |  |  | Revolving Loans Converted to Term |  |  | Total |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial Business |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 111,035 |  |  | $ | 124,572 |  |  | $ | 77,079 |  |  | $ | 49,531 |  |  | $ | 21,971 |  |  | $ | 64,648 |  |  | $ | 257,585 |  |  | $ | — |  |  | $ | 706,421 |
Special mention |  |  | 7,532 |  |  |  | — |  |  |  | 2,400 |  |  |  | — |  |  |  | 114 |  |  |  | — |  |  |  | 2,442 |  |  |  | — |  |  |  | 12,488 |
Substandard |  |  | 1,609 |  |  |  | 11 |  |  |  | 81 |  |  |  | — |  |  |  | — |  |  |  | 888 |  |  |  | 8,532 |  |  |  | — |  |  |  | 11,121 |
Doubtful |  |  | — |  |  |  | 5,097 |  |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | 397 |  |  |  | 162 |  |  |  | — |  |  |  | 5,670 |
Total Commercial Business |  | $ | 120,176 |  |  | $ | 129,680 |  |  | $ | 79,560 |  |  | $ | 49,531 |  |  | $ | 22,099 |  |  | $ | 65,933 |  |  | $ | 268,721 |  |  | $ | — |  |  | $ | 735,700 |
Current period gross write-offs |  | $ | — |  |  | $ | 5 |  |  | $ | 3 |  |  | $ | 31 |  |  | $ | 8 |  |  | $ | 235 |  |  | $ | — |  |  | $ | — |  |  | $ | 282 |
Commercial Mortgage - Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 115,475 |  |  | $ | 269,461 |  |  | $ | 59,147 |  |  | $ | 9,352 |  |  | $ | 7,447 |  |  | $ | 225 |  |  | $ | — |  |  | $ | — |  |  | $ | 461,107 |
Special mention |  |  | — |  |  |  | — |  |  |  | 16,895 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 16,895 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,681 |  |  |  | — |  |  |  | — |  |  |  | 9,681 |
Doubtful |  |  | 1,320 |  |  |  | — |  |  |  | 4,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,320 |
Total Commercial Mortgage - Construction |  | $ | 116,795 |  |  | $ | 269,461 |  |  | $ | 80,042 |  |  | $ | 9,352 |  |  | $ | 7,447 |  |  | $ | 9,906 |  |  | $ | — |  |  | $ | — |  |  | $ | 493,003 |
Current period gross write-offs |  | $ | 980 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 980 |
Commercial Mortgage - Multifamily |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 111,622 |  |  | $ | 53,495 |  |  | $ | 128,605 |  |  | $ | 68,029 |  |  | $ | 23,359 |  |  | $ | 51,476 |  |  | $ | — |  |  | $ | — |  |  | $ | 436,586 |
Special mention |  |  | — |  |  |  | 494 |  |  |  | 241 |  |  |  | 6,825 |  |  |  | 119 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,679 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 499 |  |  |  | — |  |  |  | 7,215 |  |  |  | — |  |  |  | — |  |  |  | 7,714 |
Doubtful |  |  | 77 |  |  |  | — |  |  |  | 83 |  |  |  | 14 |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 176 |
Total Commercial Mortgage - Multifamily |  | $ | 111,699 |  |  | $ | 53,989 |  |  | $ | 128,929 |  |  | $ | 75,367 |  |  | $ | 23,478 |  |  | $ | 58,693 |  |  | $ | — |  |  | $ | — |  |  | $ | 452,155 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial Mortgage - Non-Owner Occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 78,053 |  |  | $ | 212,188 |  |  | $ | 103,894 |  |  | $ | 83,714 |  |  | $ | 93,645 |  |  | $ | 197,915 |  |  | $ | — |  |  | $ | — |  |  | $ | 769,409 |
Special mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,157 |  |  |  | — |  |  |  | 11,355 |  |  |  | — |  |  |  | — |  |  |  | 13,512 |
Substandard |  |  | — |  |  |  | 338 |  |  |  | 212 |  |  |  | — |  |  |  | — |  |  |  | 379 |  |  |  | — |  |  |  | — |  |  |  | 929 |
Doubtful |  |  | — |  |  |  | — |  |  |  | 15 |  |  |  | — |  |  |  | 67 |  |  |  | 4,583 |  |  |  | — |  |  |  | — |  |  |  | 4,665 |
Total Commercial Mortgage - Non-Owner Occupied |  | $ | 78,053 |  |  | $ | 212,526 |  |  | $ | 104,121 |  |  | $ | 85,871 |  |  | $ | 93,712 |  |  | $ | 214,232 |  |  | $ | — |  |  | $ | — |  |  | $ | 788,515 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 14 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 14 |
Commercial Mortgage - Owner Occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uncriticized |  | $ | 45,220 |  |  | $ | 68,542 |  |  | $ | 37,270 |  |  | $ | 48,118 |  |  | $ | 26,571 |  |  | $ | 45,087 |  |  | $ | — |  |  | $ | — |  |  | $ | 270,808 |
Special mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 419 |  |  |  | — |  |  |  | 16 |  |  |  | — |  |  |  | — |  |  |  | 435 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 403 |  |  |  | — |  |  |  | — |  |  |  | 403 |
Total Commercial Mortgage - Owner Occupied |  | $ | 45,220 |  |  | $ | 68,542 |  |  | $ | 37,270 |  |  | $ | 48,537 |  |  | $ | 26,571 |  |  | $ | 45,506 |  |  | $ | — |  |  | $ | — |  |  | $ | 271,646 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 18 |  |  | $ | — |  |  | $ | — |  |  | $ | 18 |
(4.) LOANS (Continued) The Company utilizes payment status as a means of identifying and reporting problem and potential problem retail loans. The Company considers nonaccrual loans and loans past due greater than 90 days and still accruing interest to be non-performing. The following tables set forth the Company’s retail loan portfolio, categorized by performance status, as of the dates indicated (in thousands):
|  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |
|  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Revolving Loans Amortized Cost Basis |  |  | Revolving Loans Converted to Term |  |  | Total |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Real Estate Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 36,246 |  |  | $ | 113,089 |  |  | $ | 76,412 |  |  | $ | 76,403 |  |  | $ | 102,516 |  |  | $ | 237,785 |  |  | $ | — |  |  | $ | — |  |  | $ | 642,451 |
Non-performing |  |  | — |  |  |  | 396 |  |  |  | 529 |  |  |  | 806 |  |  |  | 1,264 |  |  |  | 2,795 |  |  |  | — |  |  |  | — |  |  |  | 5,790 |
Total Residential Real Estate Loans |  | $ | 36,246 |  |  | $ | 113,485 |  |  | $ | 76,941 |  |  | $ | 77,209 |  |  | $ | 103,780 |  |  | $ | 240,580 |  |  | $ | — |  |  | $ | — |  |  | $ | 648,241 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 109 |  |  | $ | — |  |  | $ | — |  |  | $ | 109 |
Residential Real Estate Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 71,630 |  |  | $ | 4,341 |  |  | $ | 75,971 |
Non-performing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 51 |  |  |  | 181 |  |  |  | 232 |
Total Residential Real Estate Lines |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 71,681 |  |  | $ | 4,522 |  |  | $ | 76,203 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Consumer Indirect |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 170,455 |  |  | $ | 200,312 |  |  | $ | 260,279 |  |  | $ | 168,344 |  |  | $ | 50,062 |  |  | $ | 21,908 |  |  | $ | — |  |  | $ | — |  |  | $ | 871,360 |
Non-performing |  |  | 147 |  |  |  | 592 |  |  |  | 983 |  |  |  | 981 |  |  |  | 402 |  |  |  | 186 |  |  |  | — |  |  |  | — |  |  |  | 3,291 |
Total Consumer Indirect Loans |  | $ | 170,602 |  |  | $ | 200,904 |  |  | $ | 261,262 |  |  | $ | 169,325 |  |  | $ | 50,464 |  |  | $ | 22,094 |  |  | $ | — |  |  | $ | — |  |  | $ | 874,651 |
Current period gross write-offs |  | $ | 100 |  |  | $ | 3,585 |  |  | $ | 4,553 |  |  | $ | 3,475 |  |  | $ | 1,352 |  |  | $ | 1,308 |  |  | $ | — |  |  | $ | — |  |  | $ | 14,373 |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 6,489 |  |  | $ | 30,578 |  |  | $ | 2,641 |  |  | $ | 872 |  |  | $ | 413 |  |  | $ | 259 |  |  | $ | 2,433 |  |  | $ | — |  |  | $ | 43,685 |
Non-performing |  |  | 4 |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | 36 |  |  |  | — |  |  |  | 49 |
Total Other Consumer Loans |  | $ | 6,493 |  |  | $ | 30,580 |  |  | $ | 2,641 |  |  | $ | 872 |  |  | $ | 413 |  |  | $ | 266 |  |  | $ | 2,469 |  |  | $ | — |  |  | $ | 43,734 |
Current period gross write-offs |  | $ | 428 |  |  | $ | 79 |  |  | $ | 118 |  |  | $ | 25 |  |  | $ | 25 |  |  | $ | 4 |  |  | $ | 88 |  |  | $ | — |  |  | $ | 767 |
(4.) LOANS (Continued)
|  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |
|  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Revolving Loans Amortized Cost Basis |  |  | Revolving Loans Converted to Term |  |  | Total |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Real Estate Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 112,704 |  |  | $ | 80,117 |  |  | $ | 80,323 |  |  | $ | 109,601 |  |  | $ | 70,325 |  |  | $ | 190,388 |  |  | $ | — |  |  | $ | — |  |  | $ | 643,458 |
Non-performing |  |  | — |  |  |  | 384 |  |  |  | 1,190 |  |  |  | 1,354 |  |  |  | 1,137 |  |  |  | 2,299 |  |  |  | — |  |  |  | — |  |  |  | 6,364 |
Total |  | $ | 112,704 |  |  | $ | 80,501 |  |  | $ | 81,513 |  |  | $ | 110,955 |  |  | $ | 71,462 |  |  | $ | 192,687 |  |  | $ | — |  |  | $ | — |  |  | $ | 649,822 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 32 |  |  | $ | 95 |  |  | $ | — |  |  | $ | — |  |  | $ | 127 |
Residential Real Estate Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 72,128 |  |  | $ | 5,018 |  |  | $ | 77,146 |
Non-performing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 55 |  |  |  | 166 |  |  |  | 221 |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 72,183 |  |  | $ | 5,184 |  |  | $ | 77,367 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 28 |  |  | $ | 13 |  |  | $ | 41 |
Consumer Indirect |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 247,194 |  |  | $ | 336,369 |  |  | $ | 232,891 |  |  | $ | 78,652 |  |  | $ | 31,091 |  |  | $ | 18,820 |  |  | $ | — |  |  | $ | — |  |  | $ | 945,017 |
Non-performing |  |  | 724 |  |  |  | 1,083 |  |  |  | 1,273 |  |  |  | 380 |  |  |  | 224 |  |  |  | 130 |  |  |  | — |  |  |  | — |  |  |  | 3,814 |
Total |  | $ | 247,918 |  |  | $ | 337,452 |  |  | $ | 234,164 |  |  | $ | 79,032 |  |  | $ | 31,315 |  |  | $ | 18,950 |  |  | $ | — |  |  | $ | — |  |  | $ | 948,831 |
Current period gross write-offs |  | $ | 1,371 |  |  | $ | 6,279 |  |  | $ | 5,845 |  |  | $ | 1,787 |  |  | $ | 1,282 |  |  | $ | 1,459 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,023 |
Other Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 35,483 |  |  | $ | 3,990 |  |  | $ | 1,424 |  |  | $ | 949 |  |  | $ | 217 |  |  | $ | 256 |  |  | $ | 2,747 |  |  | $ | — |  |  | $ | 45,066 |
Non-performing |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 21 |  |  |  | — |  |  |  | 34 |
Total |  | $ | 35,496 |  |  | $ | 3,990 |  |  | $ | 1,424 |  |  | $ | 949 |  |  | $ | 217 |  |  | $ | 256 |  |  | $ | 2,768 |  |  | $ | — |  |  | $ | 45,100 |
Current period gross write-offs |  | $ | 902 |  |  | $ | 127 |  |  | $ | 105 |  |  | $ | 52 |  |  | $ | 31 |  |  | $ | 20 |  |  | $ | 47 |  |  | $ | — |  |  | $ | 1,284 |
(4.) LOANS (Continued) Allowance for Credit Losses – Loans The following table sets forth the changes in the allowance for credit losses – loans for the three and nine months ended September 30, 2024 and 2023 (in thousands):
|  |  |  |  | Commercial Mortgage |  |  | Residential Real Estate |  |  |  |  |  |  |  |  |  |
|  | Commercial Business |  |  | Construction |  |  | Multi- family |  |  | Non-Owner Occupied |  |  | Owner Occupied |  |  | Loans |  |  | Lines |  |  | Consumer Indirect |  |  | Other Consumer |  |  | Total |
Three months ended September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses – loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 12,246 |  |  | $ | 3,746 |  |  | $ | 3,449 |  |  | $ | 6,052 |  |  | $ | 2,118 |  |  | $ | 4,211 |  |  | $ | 769 |  |  | $ | 10,842 |  |  | $ | 519 |  |  | $ | 43,952 |
Charge-offs |  |  | (40 | ) |  |  | — |  |  |  | (13 | ) |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | (4,410 | ) |  |  | (187 | ) |  |  | (4,652 | )
Recoveries |  |  | 43 |  |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 3 |  |  |  | — |  |  |  | 2,857 |  |  |  | 81 |  |  |  | 2,987 |
(Benefit) provision |  |  | (3,774 | ) |  |  | 1,656 |  |  |  | (828 | ) |  |  | 1,425 |  |  |  | 2,081 |  |  |  | (417 | ) |  |  | 64 |  |  |  | 2,057 |  |  |  | 127 |  |  |  | 2,391 |
Ending balance |  | $ | 8,475 |  |  | $ | 5,402 |  |  | $ | 2,609 |  |  | $ | 7,478 |  |  | $ | 4,200 |  |  | $ | 3,795 |  |  | $ | 833 |  |  | $ | 11,346 |  |  | $ | 540 |  |  | $ | 44,678 |
Nine months ended September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 13,102 |  |  | $ | 3,710 |  |  | $ | 4,009 |  |  | $ | 6,074 |  |  | $ | 2,065 |  |  | $ | 5,286 |  |  | $ | 764 |  |  | $ | 14,099 |  |  | $ | 1,973 |  |  | $ | 51,082 |
Charge-offs |  |  | (110 | ) |  |  | — |  |  |  | (13 | ) |  |  | — |  |  |  | — |  |  |  | (109 | ) |  |  | — |  |  |  | (14,373 | ) |  |  | (767 | ) |  |  | (15,372 | )
Recoveries |  |  | 143 |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 4 |  |  |  | 10 |  |  |  | — |  |  |  | 9,003 |  |  |  | 301 |  |  |  | 9,464 |
(Benefit) provision |  |  | (4,660 | ) |  |  | 1,692 |  |  |  | (1,387 | ) |  |  | 1,401 |  |  |  | 2,131 |  |  |  | (1,392 | ) |  |  | 69 |  |  |  | 2,617 |  |  |  | (967 | ) |  |  | (496 | )
Ending balance |  | $ | 8,475 |  |  | $ | 5,402 |  |  | $ | 2,609 |  |  | $ | 7,478 |  |  | $ | 4,200 |  |  | $ | 3,795 |  |  | $ | 833 |  |  | $ | 11,346 |  |  | $ | 540 |  |  | $ | 44,678 |
|  |  |  |  | Commercial Mortgage |  |  | Residential Real Estate |  |  |  |  |  |  |  |  |  |
|  | Commercial Business |  |  | Construction |  |  | Multi- family |  |  | Non-Owner Occupied |  |  | Owner Occupied |  |  | Loans |  |  | Lines |  |  | Consumer Indirect |  |  | Other Consumer |  |  | Total |
Three months ended September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses – loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 13,418 |  |  | $ | 3,868 |  |  | $ | 4,260 |  |  | $ | 6,407 |  |  | $ | 2,291 |  |  | $ | 4,646 |  |  | $ | 710 |  |  | $ | 13,306 |  |  | $ | 930 |  |  | $ | 49,836 |
Charge-offs |  |  | (146 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,848 | ) |  |  | (344 | ) |  |  | (5,338 | )
Recoveries |  |  | 114 |  |  |  | — |  |  |  | — |  |  |  | 886 |  |  |  | 86 |  |  |  | 4 |  |  |  | — |  |  |  | 2,565 |  |  |  | 85 |  |  |  | 3,740 |
Provision |  |  | (600 | ) |  |  | (255 | ) |  |  | (43 | ) |  |  | (1,081 | ) |  |  | (142 | ) |  |  | (791 | ) |  |  | (173 | ) |  |  | 3,583 |  |  |  | 894 |  |  |  | 1,392 |
Ending balance |  | $ | 12,786 |  |  | $ | 3,613 |  |  | $ | 4,217 |  |  | $ | 6,212 |  |  | $ | 2,235 |  |  | $ | 3,859 |  |  | $ | 537 |  |  | $ | 14,606 |  |  | $ | 1,565 |  |  | $ | 49,630 |
Nine months ended September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  |  | 12,585 |  |  |  | 2,657 |  |  |  | 3,409 |  |  |  | 6,237 |  |  |  | 2,109 |  |  |  | 3,301 |  |  |  | 608 |  |  |  | 14,238 |  |  |  | 269 |  |  |  | 45,413 |
Charge-offs |  |  | (263 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (18 | ) |  |  | (102 | ) |  |  | (41 | ) |  |  | (12,477 | ) |  |  | (1,064 | ) |  |  | (13,965 | )
Recoveries |  |  | 322 |  |  |  | — |  |  |  | — |  |  |  | 887 |  |  |  | 89 |  |  |  | 35 |  |  |  | — |  |  |  | 8,056 |  |  |  | 253 |  |  |  | 9,642 |
Provision (benefit) |  |  | 142 |  |  |  | 956 |  |  |  | 808 |  |  |  | (912 | ) |  |  | 55 |  |  |  | 625 |  |  |  | (30 | ) |  |  | 4,789 |  |  |  | 2,107 |  |  |  | 8,540 |
Ending balance |  | $ | 12,786 |  |  | $ | 3,613 |  |  | $ | 4,217 |  |  | $ | 6,212 |  |  | $ | 2,235 |  |  | $ | 3,859 |  |  | $ | 537 |  |  | $ | 14,606 |  |  | $ | 1,565 |  |  | $ | 49,630 |
(4.) LOANS (Continued) Risk Characteristics Loans are pooled based on their homogeneous risk characteristics. The Company has divided its loan portfolio into segments, as the loans within each segment have similar characteristics related to loan purpose, tenor, amortization, repayment source, payment frequency, collateral and recourse. Commercial business loans primarily consist of loans to small to mid-sized businesses in our market area in a diverse range of industries. These loans are typically associated with higher credit risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. Further, the collateral securing the loans may depreciate over time, may be difficult to appraise and may fluctuate in value. The credit risk related to commercial loans is largely influenced by general economic conditions, including inflation, and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any. Commercial mortgage loans generally have larger balances and involve a greater degree of risk than residential mortgage loans, potentially resulting in higher losses on an individual customer basis. Loan repayment is often dependent on the successful operation and management of the properties, as well as on the collateral securing the loan. Economic events, including inflation, influencing the ability of the tenants to pay rent at these properties, or conditions in the real estate market could have an adverse impact on the cash flows generated by properties securing the Company’s commercial real estate loans and on the value of such properties. Beginning in the third quarter of 2024, the Company further disaggregated the commercial mortgage loans into the following categories: construction, multifamily, non-owner occupied, and owner occupied based on the risk characteristics of the loans and the Company’s methodology for monitoring and assessing credit risk. Residential real estate loans (comprised of conventional mortgages and home equity loans) and residential real estate lines of credit (comprised of home equity lines of credit) are generally made based on the borrower’s ability to make repayment from his or her employment and other income but are secured by real property whose value tends to be more easily ascertainable. Credit risk for these types of loans is generally influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the loan collateral. Consumer indirect and other consumer loans may entail greater credit risk than residential mortgage loans and home equities, particularly in the case of other consumer loans which are primarily unsecured or, in the case of some BaaS loans, secured by depreciable assets such as solar panels, and in the case of indirect consumer loans, secured by depreciable assets such as automobiles. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by inflation and adverse personal circumstances such as job loss, illness or personal bankruptcy, including the heightened risk that such circumstances may arise as a result of inflation. Furthermore, the application of v arious federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.

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