v3.25.3
Portfolio Loans Receivable and Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2025
Receivables [Abstract]  
Portfolio Loans Receivable and Allowance for Credit Losses Note 5 - Portfolio Loans Receivable and Allowance for Credit Losses
The following is a summary of the major categories of total loans outstanding:
September 30, 2025December 31, 2024
(in thousands)AmountPercentAmountPercent
Real estate:
Residential$740,060 26 %$688,552 26 %
Commercial987,519 35 943,019 36 
Construction344,290 12 321,252 12 
Commercial and Industrial619,148 22 554,550 21 
Credit card, net of reserve(1)
136,483 5 127,766 5 
Other consumer2,010 — 2,089 — 
Portfolio loans receivable, gross2,829,510 100 %2,637,228 100 %
Deferred origination fees, net(7,527)(7,065)
Allowance for credit losses(53,045)(48,652)
Portfolio loans receivable, net$2,768,938 $2,581,511 
_____________
(1)    Credit card loans are presented net of reserve for interest and fees.

The following tables set forth the changes in the ACL by loan segment class for the three and nine months ended September 30, 2025 and September 30, 2024.
The ACL on loans at September 30, 2025 included $3.4 million on acquired purchased credit deteriorated (“PCD”) loans established as a measurement period adjustment to the Day 1 purchase accounting.
(in thousands)Beginning
Balance		Measurement Period Adjustment for Acquired PCD LoansProvision (Release of Provision) for
Credit Losses		Charge-OffsRecoveriesEnding
Balance
Three Months Ended September 30, 2025
Real estate:
Residential$6,772 $— $249 $— $7 $7,028 
Commercial14,262 — 603 — — 14,865 
Construction3,410 — 321 — — 3,731 
Commercial and Industrial16,249 3,424 680 (336)— 20,017 
Credit card6,749 — 2,797 (2,156)9 7,399 
Other consumer5 — — — — 5 
Total$47,447 $3,424 $4,650 $(2,492)$16 $53,045 
Nine Months Ended September 30, 2025
Real estate:
Residential$6,945 $— $76 $(1)$8 $7,028 
Commercial16,041 — 519 (1,695)— 14,865 
Construction2,973 — 1,022 (264)— 3,731 
Commercial and Industrial16,377 3,424 1,764 (1,597)49 20,017 
Credit card6,301 — 7,606 (6,524)16 7,399 
Other consumer15 — (10)— — 5 
Total$48,652 $3,424 $10,977 $(10,081)$73 $53,045 
(in thousands)Beginning
Balance		Provision (Release of Provision) for
Credit Losses		Charge-OffsRecoveriesEnding
Balance
Three Months Ended September 30, 2024
Real estate:
Residential$5,999 $(21)$4 $— $5,982 
Commercial11,682 593 (570)— 11,705 
Construction2,299 305 — — 2,604 
Commercial and Industrial4,076 577 (368)2 4,287 
Credit card6,758 2,294 (1,727)4 7,329 
Other consumer18 — — — 18 
Total$30,832 $3,748 $(2,661)$6 $31,925 
Nine Months Ended September 30, 2024
Real estate:
Residential$5,518 $1,094 $(630)$— $5,982 
Commercial10,316 1,959 (570)— 11,705 
Construction2,271 333 — — 2,604 
Commercial and Industrial4,406 349 (470)2 4,287 
Credit card6,087 6,151 (5,019)110 7,329 
Other consumer12 6 — — 18 
Total$28,610 $9,892 $(6,689)$112 $31,925 
Past due loans, segregated by age and class of loans, as of September 30, 2025 and December 31, 2024 were as follows:
Portfolio Loans Past Due
Loans
30-59 Days
Past Due		Loans
60-89 Days
Past Due		Loans
90 or More
Days
Past Due		Total Past
Due Loans		Current
Loans		Total
Portfolio
Loans
Accruing
Loans 90 or
More Days
Past Due1
Nonaccrual
Loans
(in thousands)
September 30, 2025
Real estate:
Residential$9,584 $2,541 $7,278 $19,403 $720,657 $740,060 $615 $6,551 
Commercial20,590 401 13,320 34,311 953,208 987,519 23 16,687 
Construction307 3,197 9,709 13,213 331,077 344,290 3,196 6,513 
Commercial and Industrial2,376 13,345 15,248 30,969 588,179 619,148 361 22,496 
Credit card7,436 6,477 1,881 15,794 120,689 136,483 1,881 — 
Other consumer— — — — 2,010 2,010 — — 
Total$40,293 $25,961 $47,436 $113,690 $2,715,820 $2,829,510 $6,076 $52,247 
Loans
30-59 Days
Past Due		Loans
60-89 Days
Past Due		Loans
90 or More
Days
Past Due		Total Past
Due Loans		Current
Loans		Total
Portfolio
Loans		Accruing
Loans 90 or
More Days
Past Due		Nonaccrual
Loans
December 31, 2024
Real estate:
Residential$1,656 $4,913 $6,644 $13,213 $675,339 $688,552 $— $8,652 
Commercial4,957 7,570 7,001 19,528 923,491 943,019 100 14,312 
Construction1,000 415 4,309 5,724 315,528 321,252 — 4,309 
Commercial and Industrial10,981 1,245 1,049 13,275 541,275 554,550 — 2,968 
Credit card6,923 6,561 1,544 15,028 112,738 127,766 1,544 — 
Other consumer— — — — 2,089 2,089 — — 
Total$25,517 $20,704 $20,547 $66,768 $2,570,460 $2,637,228 $1,644 $30,241 
1Accruing Loans 90 or More Days Past Due are well-collateralized and in the process of collection. The balance includes a $3.2 million loan that was collected after September 30, 2025 and is now resolved.
There were $7.8 million and $7.2 million of loans secured by one-to-four family residential properties in the process of foreclosure as of September 30, 2025 and December 31, 2024, respectively.
The following presents the nonaccrual loans as of September 30, 2025 and December 31, 2024:
September 30, 2025
Nonaccrual with No Allowance for Credit LossNonaccrual with an Allowance for Credit LossTotal Nonaccrual LoansInterest Recognized on Nonaccrual Loans
(in thousands)
Real estate:
Residential$6,543 $8 $6,551 $92 
Commercial15,380 1,307 16,687 10 
Construction6,513 — 6,513 490 
Commercial and Industrial13,859 8,637 22,496 394 
Total$42,295 $9,952 $52,247 $986 
December 31, 2024
Nonaccrual with No Allowance for Credit LossNonaccrual with an Allowance for Credit LossTotal Nonaccrual LoansInterest Recognized on Nonaccrual Loans
Real estate:
Residential$8,055 $597 $8,652 $38 
Commercial3,205 11,107 14,312 122 
Construction4,309 — 4,309 144 
Commercial and Industrial247 2,721 2,968 106 
Total$15,816 $14,425 $30,241 $410 
The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans:
•Residential real estate loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences.
•Commercial real estate loans can be secured by either owner-occupied commercial real estate or non-owner-occupied investment commercial real estate. Typically, owner-occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner-occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development and/or industrial properties, as well as other commercial or industrial real estate.
•Construction loans are typically secured by owner-occupied commercial real estate or non-owner-occupied investment real estate. Typically, owner-occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner-occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development and/or other commercial and industrial real estate in process of construction.
•Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable and/or other commercial property.
Collateral dependent loans amortized cost
(in thousands)September 30, 2025December 31, 2024
Real estate:
Residential$6,657 $8,780 
Commercial14,862 14,803 
Construction5,232 4,301 
Commercial and Industrial11,235 6,551 
Total$37,986 $34,435 
Of the collateral dependent loans as of September 30, 2025, a specific reserve of $8 thousand, $1.3 million and $4.3 million was assessed for residential real estate, commercial real estate and commercial and industrial loans, respectively. Of the collateral dependent loans as of December 31, 2024, a specific reserve of $147 thousand, $4.1 million and $4.8 million was assessed for residential real estate, commercial real estate and commercial and industrial loans.
The Company made no loan modifications on loans to borrowers experiencing financial difficulty during the three months ended September 30, 2025. The Company made one loan modification on loans to borrowers experiencing financial difficulty during the nine months ended September 30, 2025 as follows:
Modifications
(in thousands)Amortized Cost Basis% of Total Loan TypeFinancial Effect
Real estate:
Commercial and Industrial44 0.007 %Extended maturity date of one loan which reduced monthly payment amount for the borrower.
Total$44 
The Company made no loan modifications on loans to borrowers experiencing financial difficulty during the three months ended September 30, 2024. The Company made four loan modifications on loans to borrowers experiencing financial difficulty during the nine months ended September 30, 2024 as follows:
Modifications
(in thousands)Amortized Cost Basis% of Total Loan TypeFinancial Effect
Real estate:
Residential$760 0.199 %
Added 1 year to the life of the loan which reduced monthly payment amount for the borrower;
Reduced contractual interest rate from 8.375% to 6.375% on one loan.
Residential - Home Equity91 0.164 %
Added 22 years to the life of the loan which reduced monthly payment amount for the borrower;
Reduced contractual interest rate from 10.490% to 6.375% on one loan.
Commercial and Industrial112 0.044 %
Provided 6 months payment deferral to borrower through the Bank’s standard deferral program on one loan;
Reduced contractual interest rate from 11.250% to 6.000% on one loan.
Total$963 
The following table presents the payment status of loans that have been modified in the last twelve months:
September 30, 2025
Past DuePast Due
(in thousands)Current30-89 Days90 Days or MoreNonaccrualTotal
Real estate:
Residential$44 $— $— $— $44 
Residential - Home Equity— — — — — 
Commercial524 — — 890 1,414 
Commercial and Industrial 2,504 — — — 2,504 
$3,072 $— $— $890 $3,962 
Credit quality indicators
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 the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and general economic conditions in the Company’s market. From a credit risk standpoint, the Company utilizes a risk grading matrix to assign a risk grade to each of its loans. The classifications of loans reflect a judgment about the risk of expected credit loss associated with each loan. Credit quality indicators are reviewed and adjusted regularly to account for the degree of risk and expected credit loss that the Company believes to be appropriate for each financial asset.
A description of the general risk ratings are described as follows:
Pass
Loans characterized as pass includes loans graded exceptional, very good, good, satisfactory and pass/watch. The Company believes that there is a low likelihood of credit deterioration related to those loans that are considered pass.
Special mention
A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.
Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers.
Substandard
A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans 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.
Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management.
Doubtful
A doubtful loan has all the weaknesses associated with a substandard loan 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.
Ungraded
Ungraded loans represent credit card loans not included in the individual credit grading process due to the borrower type. The credit quality indicator for credit card loans is based on the delinquency status of the borrower as of the date presented.
The following table presents the balances of classified loans based on the most recent credit quality indicator analysis. Classified loans include Special Mention, Substandard and Doubtful loans. Pass classified loans include loans graded exceptional, very good, good, satisfactory, and pass/watch. Credit card loans are ungraded as they are not individually graded. Charge-offs presented represent gross charge-offs recognized in the current period:
September 30, 2025Term Loans by Origination Year
(in thousands)20252024202320222021PriorRevolvingTotal
Residential – Real estate
Pass$163,768 $117,167 $104,384 $110,192 $67,743 $161,696 $— $724,950 
Special Mention— — 1,991 2,030 1,232 3,567 — 8,820 
Substandard580 287 — 33 322 5,068 — 6,290 
Doubtful— — — — — — — — 
Total164,348 117,454 106,375 112,255 69,297 170,331 — 740,060 
Commercial – Real estate
Pass126,825 222,560 57,351 128,644 130,560 249,602 — 915,542 
Special Mention— — 2,526 39,436 5,718 6,581 — 54,261 
Substandard— — 5,967 5,989 1,611 4,149 — 17,716 
Doubtful— — — — — — — — 
Total126,825 222,560 65,844 174,069 137,889 260,332 — 987,519 
Construction – Real estate
Pass65,799 110,579 84,932 44,504 11,615 17,680 — 335,109 
Special Mention— — 1,000 — 1,668 — — 2,668 
Substandard— — 1,976 — 593 3,944 — 6,513 
Doubtful— — — — — — — — 
Total65,799 110,579 87,908 44,504 13,876 21,624 — 344,290 
Commercial and Industrial
Pass133,635 149,007 98,043 94,645 35,890 71,822 — 583,042 
Special Mention— 202 101 801 129 5,775 — 7,008 
Substandard4,213 326 16,688 1,737 1,525 4,609 — 29,098 
Doubtful— — — — — — — — 
Total137,848 149,535 114,832 97,183 37,544 82,206 — 619,148 
Other consumer
Pass598 1,176 — 52 54 130 — 2,010 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total598 1,176 — 52 54 130 — 2,010 
Credit card
Ungraded— — — — — — 136,483 136,483 
Portfolio loans receivable, gross$495,418 $601,304 $374,959 $428,063 $258,660 $534,623 $136,483 $2,829,510 
September 30, 2025
(in thousands)20252024202320222021PriorRevolvingTotal
Gross Charge-Offs
Residential real estate$— $— $— $— $— $— $— $— 
Commercial real estate— — — — — 1,695 — 1,695 
Construction— — — — — 264 — 264 
Commercial and Industrial— 15 713 252 8 609 — 1,597 
Credit card— — — — — — 6,522 6,522 
Total$— $15 $713 $252 $8 $2,568 $6,522 $10,078 
December 31, 2024Term Loans by Origination Year
(in thousands)20242023202220212020PriorRevolvingTotal
Residential – Real estate
Pass$155,867 $129,639 $122,203 $76,906 $69,647 $117,272 $— $671,534 
Special Mention— — 2,065 1,242 3,604 — — 6,911 
Substandard— — — 3,422 189 6,496 — 10,107 
Doubtful— — — — — — — — 
Total155,867 129,639 124,268 81,570 73,440 123,768 — 688,552 
Commercial – Real estate
Pass235,929 61,372 170,611 146,642 92,038 207,631 — 914,223 
Special Mention— 2,300 10,747 5,052 — 788 — 18,887 
Substandard— — 7,558 — 320 2,031 — 9,909 
Doubtful— — — — — — — — 
Total235,929 63,672 188,916 151,694 92,358 210,450 — 943,019 
Construction – Real estate
Pass98,942 129,202 46,532 20,634 15,458 6,175 — 316,943 
Special Mention— — — — — — — — 
Substandard— — — — 2,252 2,057 — 4,309 
Doubtful— — — — — — — — 
Total98,942 129,202 46,532 20,634 17,710 8,232 — 321,252 
Commercial and Industrial
Pass129,043 130,647 117,346 42,747 21,356 107,953 — 549,092 
Special Mention232 — 489 — — 270 — 991 
Substandard— 209 712 205 3,239 102 — 4,467 
Doubtful— — — — — — — — 
Total129,275 130,856 118,547 42,952 24,595 108,325 — 554,550 
Other consumer
Pass1,226 278 73 95 76 341 — 2,089 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total1,226 278 73 95 76 341 — 2,089 
Credit card
Ungraded— — — — — — 127,766 127,766 
Portfolio loans receivable, gross$621,239 $453,647 $478,336 $296,945 $208,179 $451,116 $127,766 $2,637,228 
December 31, 2024
(in thousands)20242023202220212020PriorRevolvingTotal
Gross Charge-Offs
Residential real estate$— $— $— $— $— $907 $— $907 
Commercial real estate— — 570 — — — — 570 
Commercial and Industrial84 80 306 — — 136 — 606 
Credit card— — — — — — 7,145 7,145 
Total$84 $80 $876 $— $— $1,043 $7,145 $9,228 
Outstanding loan commitments were as follows:
(in thousands)September 30, 2025December 31, 2024
Unused lines of credit
Real Estate:
Residential$21,655 $20,996 
Residential - Home Equity42,960 46,900 
Commercial21,812 44,201 
Construction90,818 85,984 
Commercial and Industrial68,813 79,961 
Credit card(1)
137,816 124,732 
Other consumer229 255 
Total$384,103 $403,029 
Letters of credit$1,633 $3,122 
_______________
(1)Outstanding loan commitments in the credit card portfolio include $98.4 million and $97.2 million in secured and partially secured balances as of September 30, 2025 and December 31, 2024, respectively.

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will, at any given time, draw upon their lines in full. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a fee.
The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments.
The Company maintains an estimated reserve for unfunded commitments and certain off-balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with increases or decreases in the reserve being charged to or released from operating expense. Activity for this account is as follows for the periods presented:
Three months endedNine months ended
(in thousands)September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Balance at beginning of period$1,191 $1,052 $1,191 $806 
Provision for credit losses on unfunded commitments217 17 217 263 
Balance at end of period$1,408 $1,069 $1,408 $1,069 
The Company makes representations and warranties that loans sold to investors meet the investors’ program guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program non-compliance, early payment default, and fraud or borrower misrepresentations.
The Company maintains a reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented:
Three months endedNine months ended
(in thousands)September 30, 2025September 30, 2024September 30, 2025September 30, 2024
Balance at beginning of period$2,294 $912 $2,260 $985 
Provision for (release of) mortgage loan put-back reserve19 20 53 (53)
Balance at end of period$2,313 $932 $2,313 $932