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ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended
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Jun. 30, 2025
Credit Loss [Abstract] |
ALLOWANCE FOR CREDIT LOSSES | 4. ALLOWANCE FOR CREDIT LOSSES The ACL on loans held for investment is the combination of the allowance for credit losses and the reserve for unfunded loan commitments. The ACL is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Statements of Condition. The estimate of credit loss for unfunded commitments incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable economic forecasts. Management periodically reviews and updates its assumptions for estimated funding rates. The "Provision for credit losses" on the Consolidated Statements of Income is a combination of the provision for credit losses and the provision for unfunded loan commitments. The Company does not estimate expected credit losses on accrued interest receivable (“AIR”) on loans, as AIR is reversed or written off when the full collection of the AIR related to a loan becomes doubtful. AIR on loans totaled $29.7 million at June 30, 2025 and $26.2 million at December 31, 2024. The following tables present the loan balances by segment, and the corresponding balances in the allowance as of June 30, 2025 and December 31, 2024. The allowance was based on the CECL methodology.
|  | June 30, 2025 |
|  |  |  |  | Ending ACL |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Attributable |  |  |  |  |  | Ending ACL |  |  |  |  |  |  |
|  | Total |  |  | To |  |  | Total |  |  | Attributable |  |  |  |  |  |  |
|  | Individually |  |  | Individually |  |  | Loans |  |  | To Loans |  |  |  |  |  | Total |
|  | Evaluated |  |  | Evaluated |  |  | Collectively |  |  | Collectively |  |  | Total |  |  | Ending |
(In thousands) |  | Loans |  |  | Loans |  |  | Evaluated |  |  | Evaluated |  |  | Loans |  |  | ACL |
Primary residential mortgage |  | $ | 3,295 |  |  | $ | — |  |  | $ | 632,958 |  |  | $ | 4,828 |  |  | $ | 636,253 |  |  | $ | 4,828 |
Junior lien loan on residence |  |  | 111 |  |  |  | — |  |  |  | 54,939 |  |  |  | 209 |  |  |  | 55,050 |  |  |  | 209 |
Multifamily property |  |  | 55,978 |  |  |  | 7,083 |  |  |  | 1,738,876 |  |  |  | 11,443 |  |  |  | 1,794,854 |  |  |  | 18,526 |
Owner-occupied commercial real estate |  |  | — |  |  |  | — |  |  |  | 264,095 |  |  |  | 3,254 |  |  |  | 264,095 |  |  |  | 3,254 |
Investment commercial real estate |  |  | 11,621 |  |  |  | 1,077 |  |  |  | 990,374 |  |  |  | 11,449 |  |  |  | 1,001,995 |  |  |  | 12,526 |
Commercial and industrial |  |  | 42,909 |  |  |  | 11,920 |  |  |  | 1,587,917 |  |  |  | 25,625 |  |  |  | 1,630,826 |  |  |  | 37,545 |
Lease financing |  |  | 1,044 |  |  |  | 121 |  |  |  | 271,986 |  |  |  | 2,083 |  |  |  | 273,030 |  |  |  | 2,204 |
Construction |  |  | — |  |  |  | — |  |  |  | 17,928 |  |  |  | 190 |  |  |  | 17,928 |  |  |  | 190 |
Consumer and other loans |  |  | — |  |  |  | — |  |  |  | 142,730 |  |  |  | 2,488 |  |  |  | 142,730 |  |  |  | 2,488 |
Total ACL |  | $ | 114,958 |  |  | $ | 20,201 |  |  | $ | 5,701,803 |  |  | $ | 61,569 |  |  | $ | 5,816,761 |  |  | $ | 81,770 |
|  | December 31, 2024 |
|  |  |  |  | Ending ACL |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Attributable |  |  |  |  |  | Ending ACL |  |  |  |  |  |  |
|  | Total |  |  | To |  |  | Total |  |  | Attributable |  |  |  |  |  |  |
|  | Individually |  |  | Individually |  |  | Loans |  |  | To Loans |  |  |  |  |  | Total |
|  | Evaluated |  |  | Evaluated |  |  | Collectively |  |  | Collectively |  |  | Total |  |  | Ending |
(In thousands) |  | Loans |  |  | Loans |  |  | Evaluated |  |  | Evaluated |  |  | Loans |  |  | ACL |
Primary residential mortgage |  | $ | 2,779 |  |  | $ | — |  |  | $ | 606,259 |  |  | $ | 4,398 |  |  | $ | 609,038 |  |  | $ | 4,398 |
Junior lien loan on residence |  |  | 92 |  |  |  | — |  |  |  | 45,215 |  |  |  | 180 |  |  |  | 45,307 |  |  |  | 180 |
Multifamily property |  |  | 53,105 |  |  |  | 5,149 |  |  |  | 1,746,649 |  |  |  | 12,504 |  |  |  | 1,799,754 |  |  |  | 17,653 |
Owner-occupied commercial real estate |  |  | — |  |  |  | — |  |  |  | 275,089 |  |  |  | 3,208 |  |  |  | 275,089 |  |  |  | 3,208 |
Investment commercial real estate |  |  | 11,684 |  |  |  | 735 |  |  |  | 966,752 |  |  |  | 10,950 |  |  |  | 978,436 |  |  |  | 11,685 |
Commercial and industrial |  |  | 30,881 |  |  |  | 6,678 |  |  |  | 1,458,585 |  |  |  | 26,397 |  |  |  | 1,489,466 |  |  |  | 33,075 |
Lease financing |  |  | 1,234 |  |  |  | 121 |  |  |  | 221,263 |  |  |  | 1,367 |  |  |  | 222,497 |  |  |  | 1,488 |
Construction |  |  | — |  |  |  | — |  |  |  | 11,204 |  |  |  | 121 |  |  |  | 11,204 |  |  |  | 121 |
Consumer and other loans |  |  | — |  |  |  | — |  |  |  | 80,165 |  |  |  | 1,184 |  |  |  | 80,165 |  |  |  | 1,184 |
Total ACL |  | $ | 99,775 |  |  | $ | 12,683 |  |  | $ | 5,411,181 |  |  | $ | 60,309 |  |  | $ | 5,510,956 |  |  | $ | 72,992 |
Individually evaluated loans included nonaccrual loans of $115.0 million at June 30, 2025 and $99.8 million at December 31, 2024. Individually evaluated loans did no t include any performing modified loans at June 30, 2025. An allowance of $893,000 was allocated to modified loans at June 30, 2025. The allowance for credit losses was $81.8 million as of June 30, 2025, compared to $73.0 million at December 31, 2024. The increase in the ACL was primarily driven by deterioration in key economic model drivers and an increase in specific reserves for one equipment financing relationship of $5.8 million. The ACL as a percentage of loans was 1.41 percent at June 30, 2025, compared to 1.32 percent at December 31, 2024. The increase in the ratio was primarily due to increases in specific reserves of $5.2 million and $1.9 million related to C&I and multifamily loans as expected recoveries from operations and collateral values have worsened during the six months ended June 30, 2025. Under Topic 326, the Company's methodology for determining the ACL on loans is based upon key assumptions, including historic net charge-offs, economic forecasts, reversion periods, prepayments and qualitative adjustments. The allowance is measured on a collective, or pool, basis when similar risk characteristics exist. Loans that do not share common risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation. The following tables present collateral dependent loans individually evaluated by segment as of June 30, 2025 and December 31, 2024:
|  | June 30, 2025 |
|  |  |  |  |  |  |  |  |  |  | Average |
|  | Unpaid |  |  |  |  |  |  |  |  | Individually |
|  | Principal |  |  | Recorded |  |  | Related |  |  | Evaluated |
(In thousands) |  | Balance |  |  | Investment |  |  | Allowance |  |  | Loans |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage (A) |  | $ | 3,486 |  |  | $ | 3,295 |  |  | $ | — |  |  | $ | 2,838 |
Junior lien loan on residence (A) |  |  | 119 |  |  |  | 111 |  |  |  | — |  |  |  | 109 |
Multifamily property (B) |  |  | 19,692 |  |  |  | 19,341 |  |  |  | — |  |  |  | 20,541 |
Investment commercial real estate (C) |  |  | 12,500 |  |  |  | 9,691 |  |  |  | — |  |  |  | 9,712 |
Commercial and industrial (A)(C)(D) |  |  | 17,821 |  |  |  | 17,731 |  |  |  | — |  |  |  | 5,875 |
Lease financing (E) |  |  | 343 |  |  |  | 244 |  |  |  | — |  |  |  | 318 |
Total loans with no related allowance |  | $ | 53,961 |  |  | $ | 50,413 |  |  | $ | — |  |  | $ | 39,393 |
With related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Multifamily property (B) |  | $ | 36,744 |  |  | $ | 36,637 |  |  | $ | 7,083 |  |  | $ | 32,672 |
Investment commercial real estate (C) |  |  | 1,930 |  |  |  | 1,930 |  |  |  | 1,077 |  |  |  | 1,930 |
Commercial and industrial (A)(C)(D)(E) |  |  | 29,508 |  |  |  | 25,178 |  |  |  | 11,920 |  |  |  | 22,324 |
Lease financing (E) |  |  | 849 |  |  |  | 800 |  |  |  | 121 |  |  |  | 800 |
Total loans with related allowance |  | $ | 69,031 |  |  | $ | 64,545 |  |  | $ | 20,201 |  |  | $ | 57,726 |
Total loans individually evaluated |  | $ | 122,992 |  |  | $ | 114,958 |  |  | $ | 20,201 |  |  | $ | 97,119 |
(A) Secured by residential real estate. (B) Secured by multifamily residential properties. (C) Secured by commercial real estate. (D) Secured by all business assets. (E) Secured by machinery and equipment.
|  | December 31, 2024 |
|  |  |  |  |  |  |  |  |  |  | Average |
|  | Unpaid |  |  |  |  |  |  |  |  | Individually |
|  | Principal |  |  | Recorded |  |  | Related |  |  | Evaluated |
(In thousands) |  | Balance |  |  | Investment |  |  | Allowance |  |  | Loans |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage (A) |  | $ | 2,935 |  |  | $ | 2,779 |  |  | $ | — |  |  | $ | 1,851 |
Junior lien loan on residence (A) |  |  | 97 |  |  |  | 92 |  |  |  | — |  |  |  | 101 |
Multifamily property (B) |  |  | 15,320 |  |  |  | 15,295 |  |  |  | — |  |  |  | 16,968 |
Investment commercial real estate (C) |  |  | 12,500 |  |  |  | 9,754 |  |  |  | — |  |  |  | 9,810 |
Commercial and industrial (A)(C)(D) |  |  | 3,885 |  |  |  | 2,738 |  |  |  | — |  |  |  | 3,558 |
Lease financing (E) |  |  | 542 |  |  |  | 434 |  |  |  | — |  |  |  | 1,363 |
Total loans with no related allowance |  | $ | 35,279 |  |  | $ | 31,092 |  |  | $ | — |  |  | $ | 33,651 |
With related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Multifamily property (B) |  | $ | 37,874 |  |  | $ | 37,810 |  |  | $ | 5,149 |  |  | $ | 17,020 |
Investment commercial real estate (C) |  |  | 1,930 |  |  |  | 1,930 |  |  |  | 735 |  |  |  | 1,126 |
Commercial and industrial (C)(D)(E) |  |  | 31,145 |  |  |  | 28,143 |  |  |  | 6,678 |  |  |  | 27,962 |
Lease financing (E) |  |  | 845 |  |  |  | 800 |  |  |  | 121 |  |  |  | 867 |
Total loans with related allowance |  | $ | 71,794 |  |  | $ | 68,683 |  |  | $ | 12,683 |  |  | $ | 46,975 |
Total loans individually evaluated for impairment |  | $ | 107,073 |  |  | $ | 99,775 |  |  | $ | 12,683 |  |  | $ | 80,626 |
(A) Secured by residential real estate. (B) Secured by multifamily residential properties. (C) Secured by commercial real estate. (D) Secured by all business assets. (E) Secured by machinery and equipment. Interest income recognized on individually evaluated loans for the three and six months ended June 30, 2025 and 2024 was not material. The Company did not recognize any income on non-accruing loans for the three and six months ended June 30, 2025 and 2024. The activity in the allowance for credit losses for the three months ended June 30, 2025 and June 30, 2024 is summarized below:
|  | April 1, |  |  |  |  |  |  |  |  |  |  |  | June 30, |
|  | 2025 |  |  |  |  |  |  |  |  |  |  |  | 2025 |
|  | Beginning |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ACL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) (A) |  |  | ACL |
Primary residential mortgage |  | $ | 4,469 |  |  | $ | — |  |  | $ | — |  |  | $ | 359 |  |  | $ | 4,828 |
Junior lien loan on residence |  |  | 195 |  |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | 209 |
Multifamily property |  |  | 17,730 |  |  |  | — |  |  |  | — |  |  |  | 796 |  |  |  | 18,526 |
Owner-occupied commercial real estate |  |  | 3,464 |  |  |  | — |  |  |  | — |  |  |  | (210 | ) |  |  | 3,254 |
Investment commercial real estate |  |  | 11,764 |  |  |  | — |  |  |  | — |  |  |  | 762 |  |  |  | 12,526 |
Commercial and industrial |  |  | 32,980 |  |  |  | — |  |  |  | 24 |  |  |  | 4,541 |  |  |  | 37,545 |
Lease financing |  |  | 1,816 |  |  |  | — |  |  |  | — |  |  |  | 388 |  |  |  | 2,204 |
Construction |  |  | 158 |  |  |  | — |  |  |  | — |  |  |  | 32 |  |  |  | 190 |
Consumer and other loans |  |  | 2,574 |  |  |  | (20 | ) |  |  | 39 |  |  |  | (105 | ) |  |  | 2,488 |
Total ACL |  | $ | 75,150 |  |  | $ | (20 | ) |  | $ | 63 |  |  | $ | 6,577 |  |  | $ | 81,770 |
(A) Provision to roll forward the ACL excludes a provision of $9,000 for off-balance sheet commitments.
|  | April 1, |  |  |  |  |  |  |  |  |  |  |  | June 30, |
|  | 2024 |  |  |  |  |  |  |  |  |  |  |  | 2024 |
|  | Beginning |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ACL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) (A) |  |  | ACL |
Primary residential mortgage |  | $ | 4,101 |  |  | $ | — |  |  | $ | — |  |  | $ | 90 |  |  | $ | 4,191 |
Junior lien loan on residence |  |  | 178 |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 187 |
Multifamily property |  |  | 10,242 |  |  |  | (5,379 | ) |  |  | — |  |  |  | 7,738 |  |  |  | 12,601 |
Owner-occupied commercial real estate |  |  | 4,906 |  |  |  | — |  |  |  | — |  |  |  | (194 | ) |  |  | 4,712 |
Investment commercial real estate |  |  | 15,126 |  |  |  | — |  |  |  | — |  |  |  | (674 | ) |  |  | 14,452 |
Commercial and industrial |  |  | 28,755 |  |  |  | — |  |  |  | 5 |  |  |  | (192 | ) |  |  | 28,568 |
Lease financing |  |  | 1,431 |  |  |  | — |  |  |  | 3,210 |  |  |  | (2,951 | ) |  |  | 1,690 |
Construction |  |  | 597 |  |  |  | — |  |  |  | — |  |  |  | 58 |  |  |  | 655 |
Consumer and other loans |  |  | 915 |  |  |  | (4 | ) |  |  | — |  |  |  | 17 |  |  |  | 928 |
Total ACL |  | $ | 66,251 |  |  | $ | (5,383 | ) |  | $ | 3,215 |  |  | $ | 3,901 |  |  | $ | 67,984 |
(A) Provision to roll forward the ACL excludes a provision of $10,000 for off-balance sheet commitments. The activity in the allowance for the six months ended June 30, 2025 and June 30, 2024 is summarized below:
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  | June 30, |
|  | 2025 |  |  |  |  |  |  |  |  |  |  |  | 2025 |
|  | Beginning |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ACL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) (A) |  |  | ACL |
Primary residential mortgage |  | $ | 4,398 |  |  | $ | — |  |  | $ | — |  |  | $ | 430 |  |  | $ | 4,828 |
Junior lien loan on residence |  |  | 180 |  |  |  | — |  |  |  | — |  |  |  | 29 |  |  |  | 209 |
Multifamily property |  |  | 17,653 |  |  |  | — |  |  |  | — |  |  |  | 873 |  |  |  | 18,526 |
Owner-occupied commercial real estate |  |  | 3,208 |  |  |  | — |  |  |  | — |  |  |  | 46 |  |  |  | 3,254 |
Investment commercial real estate |  |  | 11,685 |  |  |  | — |  |  |  | — |  |  |  | 841 |  |  |  | 12,526 |
Commercial and industrial |  |  | 33,075 |  |  |  | (2,349 | ) |  |  | 48 |  |  |  | 6,771 |  |  |  | 37,545 |
Lease financing |  |  | 1,488 |  |  |  | — |  |  |  | — |  |  |  | 716 |  |  |  | 2,204 |
Construction |  |  | 121 |  |  |  | — |  |  |  | — |  |  |  | 69 |  |  |  | 190 |
Consumer and other loans |  |  | 1,184 |  |  |  | (31 | ) |  |  | 39 |  |  |  | 1,296 |  |  |  | 2,488 |
Total ACL |  | $ | 72,992 |  |  | $ | (2,380 | ) |  | $ | 87 |  |  | $ | 11,071 |  |  | $ | 81,770 |
(A) Provision to roll forward the ACL excludes a credit of $14,000 for off-balance sheet commitments.
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  | June 30, |
|  | 2024 |  |  |  |  |  |  |  |  |  |  |  | 2024 |
|  | Beginning |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ACL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) (A) |  |  | ACL |
Primary residential mortgage |  | $ | 3,931 |  |  | $ | — |  |  | $ | — |  |  | $ | 260 |  |  | $ | 4,191 |
Junior lien loan on residence |  |  | 177 |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | 187 |
Multifamily property |  |  | 8,782 |  |  |  | (5,379 | ) |  |  | — |  |  |  | 9,198 |  |  |  | 12,601 |
Owner-occupied commercial real estate |  |  | 4,840 |  |  |  | — |  |  |  | — |  |  |  | (128 | ) |  |  | 4,712 |
Investment commercial real estate |  |  | 15,403 |  |  |  | — |  |  |  | — |  |  |  | (951 | ) |  |  | 14,452 |
Commercial and industrial |  |  | 29,707 |  |  |  | (241 | ) |  |  | 5 |  |  |  | (903 | ) |  |  | 28,568 |
Lease financing |  |  | 1,663 |  |  |  | — |  |  |  | 3,210 |  |  |  | (3,183 | ) |  |  | 1,690 |
Construction |  |  | 516 |  |  |  | — |  |  |  | — |  |  |  | 139 |  |  |  | 655 |
Consumer and other loans |  |  | 869 |  |  |  | (17 | ) |  |  | 2 |  |  |  | 74 |  |  |  | 928 |
Total ACL |  | $ | 65,888 |  |  | $ | (5,637 | ) |  | $ | 3,217 |  |  | $ | 4,516 |  |  | $ | 67,984 |
(A) Provision to roll forward the ACL excludes a provision of $22,000 for off-balance sheet commitments. Allowance for Credit Losses on Off-Balance Sheet Commitments The following tables present the activity in the ACL for off-balance sheet commitments for the six months ended June 30, 2025 and 2024:
|  | January 1, |  |  |  |  |  |  |
|  | 2025 |  |  |  |  |  | June 30, |
|  | Beginning |  |  | Provision |  |  | 2025 |
(In thousands) |  | ACL |  |  | (Credit) |  |  | Ending ACL |
Off balance sheet commitments |  | $ | 691 |  |  | $ | (14 | ) |  | $ | 677 |
Total ACL |  | $ | 691 |  |  | $ | (14 | ) |  | $ | 677 |
|  | January 1, |  |  |  |  |  |  |
|  | 2024 |  |  |  |  |  | June 30, |
|  | Beginning |  |  | Provision |  |  | 2024 |
(In thousands) |  | ACL |  |  | (Credit) |  |  | Ending ACL |
Off balance sheet commitments |  | $ | 687 |  |  | $ | 22 |  |  | $ | 709 |
Total ACL |  | $ | 687 |  |  | $ | 22 |  |  | $ | 709 |

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