XML 20 R14.htm IDEA: XBRL DOCUMENT v3.26.1
ALLOWANCE FOR CREDIT LOSSES
 3 Months Ended
Mar. 31, 2026
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 on loans 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 $30.1 million at March 31, 2026 and $28.5 million at December 31, 2025.

 

The following tables present the loan balances by segment, and the corresponding balances in the allowance as of March 31, 2026 and December 31, 2025. The allowance was based on the CECL methodology.

 

 

 

March 31, 2026

 

 

 

 

 

 

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

 

$

3,145

 

 

$

3

 

 

$

649,305

 

 

$

5,393

 

 

$

652,450

 

 

$

5,396

 

Junior lien loan on residence

 

 

104

 

 

 

—

 

 

 

60,600

 

 

 

195

 

 

 

60,704

 

 

 

195

 

Multifamily property

 

 

31,146

 

 

 

3,691

 

 

 

1,793,736

 

 

 

8,438

 

 

 

1,824,882

 

 

 

12,129

 

Owner-occupied commercial real estate

 

 

—

 

 

 

—

 

 

 

294,248

 

 

 

3,544

 

 

 

294,248

 

 

 

3,544

 

Investment commercial real estate

 

 

11,526

 

 

 

994

 

 

 

1,205,534

 

 

 

14,213

 

 

 

1,217,060

 

 

 

15,207

 

Commercial and industrial

 

 

13,377

 

 

 

2,037

 

 

 

1,862,026

 

 

 

22,275

 

 

 

1,875,403

 

 

 

24,312

 

Lease financing

 

 

23

 

 

 

—

 

 

 

273,357

 

 

 

2,544

 

 

 

273,380

 

 

 

2,544

 

Construction

 

 

—

 

 

 

—

 

 

 

20,533

 

 

 

209

 

 

 

20,533

 

 

 

209

 

Consumer and other loans

 

 

—

 

 

 

—

 

 

 

213,732

 

 

 

3,490

 

 

 

213,732

 

 

 

3,490

 

Total ACL

 

$

59,321

 

 

$

6,725

 

 

$

6,373,071

 

 

$

60,301

 

 

$

6,432,392

 

 

$

67,026

 

 

 

 

December 31, 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

 

$

2,573

 

 

$

—

 

 

$

630,317

 

 

$

5,328

 

 

$

632,890

 

 

$

5,328

 

Junior lien loan on residence

 

 

106

 

 

 

—

 

 

 

61,314

 

 

 

208

 

 

 

61,420

 

 

 

208

 

Multifamily property

 

 

31,343

 

 

 

3,574

 

 

 

1,831,249

 

 

 

8,884

 

 

 

1,862,592

 

 

 

12,458

 

Owner-occupied commercial real estate

 

 

—

 

 

 

—

 

 

 

289,801

 

 

 

3,630

 

 

 

289,801

 

 

 

3,630

 

Investment commercial real estate

 

 

11,557

 

 

 

994

 

 

 

1,089,525

 

 

 

12,993

 

 

 

1,101,082

 

 

 

13,987

 

Commercial and industrial

 

 

22,641

 

 

 

7,466

 

 

 

1,800,916

 

 

 

21,919

 

 

 

1,823,557

 

 

 

29,385

 

Lease financing

 

 

23

 

 

 

—

 

 

 

266,015

 

 

 

2,554

 

 

 

266,038

 

 

 

2,554

 

Construction

 

 

—

 

 

 

—

 

 

 

24,959

 

 

 

297

 

 

 

24,959

 

 

 

297

 

Consumer and other loans

 

 

—

 

 

 

—

 

 

 

189,633

 

 

 

3,192

 

 

 

189,633

 

 

 

3,192

 

Total ACL

 

$

68,243

 

 

$

12,034

 

 

$

6,183,729

 

 

$

59,005

 

 

$

6,251,972

 

 

$

71,039

 

 

Individually evaluated loans included nonaccrual loans of $59.3 million at March 31, 2026 and $68.2 million at December 31, 2025. Individually evaluated loans did not include any performing modified loans at March 31, 2026. An allowance of $82,000 was allocated to modified loans at March 31, 2026.

 

The allowance for credit losses was $67.0 million as of March 31, 2026, compared to $71.0 million at December 31, 2025. The decrease in the ACL was primarily driven by charge-offs of $11.4 million during the three months ended March 31, 2026. Charge-offs of $7.8 million were related to the liquidation of one commercial and industrial relationship with an additional $3.5 million associated with the sale of a multifamily loan. The commercial and industrial loan charge-off in the current period was tied to a specific provision recorded in previous periods. The decrease was partially offset by a provision for credit losses of $7.3 million driven by loan growth of $184.1 million resulting in a provision of $1.3 million in addition to changes in specific reserves which required a provision of $6.0 million for the three months ended March 31, 2026. The ACL as a percentage of loans was 1.04 percent at March 31, 2026, compared to 1.14 percent at December 31, 2025. The decrease in the ratio for the three months ended March 31, 2026 was primarily due to above mentioned charge-offs.

 

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 March 31, 2026 and December 31, 2025:

 

 

 

March 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

Unpaid

 

 

 

 

 

 

 

 

Individually

 

 

 

Principal

 

 

Recorded

 

 

Related

 

 

Evaluated

 

(In thousands)

 

Balance

 

 

Investment

 

 

Allowance

 

 

Loans

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

Primary residential mortgage (A)

 

$

3,012

 

 

$

2,799

 

 

$

—

 

 

$

2,820

 

Junior lien loan on residence (A)

 

 

116

 

 

 

104

 

 

 

—

 

 

 

104

 

Multifamily property (B)

 

 

15,264

 

 

 

14,550

 

 

 

—

 

 

 

17,359

 

Investment commercial real estate (C)

 

 

12,500

 

 

 

9,597

 

 

 

—

 

 

 

9,606

 

Commercial and industrial (A)(C)(D)

 

 

16,705

 

 

 

8,800

 

 

 

—

 

 

 

15,105

 

Lease financing (E)

 

 

127

 

 

 

23

 

 

 

—

 

 

 

23

 

Total loans with no related allowance

 

$

47,724

 

 

$

35,873

 

 

$

—

 

 

$

45,017

 

With related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

Primary residential mortgage (A)

 

$

347

 

 

$

346

 

 

$

3

 

 

$

231

 

Multifamily property (B)

 

 

16,850

 

 

 

16,596

 

 

 

3,691

 

 

 

16,646

 

Investment commercial real estate (C)

 

 

1,929

 

 

 

1,929

 

 

 

994

 

 

 

1,929

 

Commercial and industrial (A)(C)(D)

 

 

4,577

 

 

 

4,577

 

 

 

2,037

 

 

 

4,574

 

Total loans with related allowance

 

$

23,703

 

 

$

23,448

 

 

$

6,725

 

 

$

23,380

 

Total loans individually evaluated

 

$

71,427

 

 

$

59,321

 

 

$

6,725

 

 

$

68,397

 

 

(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, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

Unpaid

 

 

 

 

 

 

 

 

Individually

 

 

 

Principal

 

 

Recorded

 

 

Related

 

 

Evaluated

 

(In thousands)

 

Balance

 

 

Investment

 

 

Allowance

 

 

Loans

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

Primary residential mortgage (A)

 

$

2,761

 

 

$

2,573

 

 

$

—

 

 

$

2,979

 

Junior lien loan on residence (A)

 

 

117

 

 

 

106

 

 

 

—

 

 

 

109

 

Multifamily property (B)

 

 

15,264

 

 

 

14,671

 

 

 

—

 

 

 

33,732

 

Investment commercial real estate (C)

 

 

12,500

 

 

 

9,628

 

 

 

—

 

 

 

9,682

 

Commercial and industrial (A)(C)(D)

 

 

9,057

 

 

 

8,600

 

 

 

—

 

 

 

21,608

 

Lease financing (E)

 

 

126

 

 

 

23

 

 

 

—

 

 

 

821

 

Total loans with no related allowance

 

$

39,825

 

 

$

35,601

 

 

$

—

 

 

$

68,931

 

With related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily property (B)

 

$

16,862

 

 

$

16,672

 

 

$

3,574

 

 

$

14,748

 

Investment commercial real estate (C)

 

 

1,929

 

 

 

1,929

 

 

 

994

 

 

 

1,929

 

Commercial and industrial (A)(C)(D)

 

 

14,041

 

 

 

14,041

 

 

 

7,466

 

 

 

7,630

 

Total loans with related allowance

 

$

32,832

 

 

$

32,642

 

 

$

12,034

 

 

$

24,307

 

Total loans individually evaluated for impairment

 

$

72,657

 

 

$

68,243

 

 

$

12,034

 

 

$

93,238

 

 

(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 months ended March 31, 2026 and 2025 was not material. The Company did not recognize any income on non-accruing loans for the three months ended March 31, 2026 and 2025.

 

The activity in the allowance for credit losses for the three months ended March 31, 2026 and March 31, 2025 is summarized below:

 

 

 

January 1,

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

 

2026

 

 

 

 

 

 

 

 

 

 

 

2026

 

 

 

Beginning

 

 

 

 

 

 

 

 

Provision

 

 

Ending

 

(In thousands)

 

ACL

 

 

Charge-offs

 

 

Recoveries

 

 

(Credit) (A)

 

 

ACL

 

Primary residential mortgage

 

$

5,328

 

 

$

—

 

 

$

—

 

 

$

68

 

 

$

5,396

 

Junior lien loan on residence

 

 

208

 

 

 

—

 

 

 

—

 

 

 

(13

)

 

 

195

 

Multifamily property

 

 

12,458

 

 

 

(3,538

)

 

 

—

 

 

 

3,209

 

 

 

12,129

 

Owner-occupied commercial real estate

 

 

3,630

 

 

 

—

 

 

 

—

 

 

 

(86

)

 

 

3,544

 

Investment commercial real estate

 

 

13,987

 

 

 

—

 

 

 

—

 

 

 

1,220

 

 

 

15,207

 

Commercial and industrial

 

 

29,385

 

 

 

(7,810

)

 

 

25

 

 

 

2,712

 

 

 

24,312

 

Lease financing

 

 

2,554

 

 

 

—

 

 

 

—

 

 

 

(10

)

 

 

2,544

 

Construction

 

 

297

 

 

 

—

 

 

 

—

 

 

 

(88

)

 

 

209

 

Consumer and other loans

 

 

3,192

 

 

 

(12

)

 

 

—

 

 

 

310

 

 

 

3,490

 

Total ACL

 

$

71,039

 

 

$

(11,360

)

 

$

25

 

 

$

7,322

 

 

$

67,026

 

 

(A) Provision to roll forward the ACL excludes provision of $5,000 for off-balance sheet commitments.

 

 

 

January 1,

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

 

Beginning

 

 

 

 

 

 

 

 

Provision

 

 

Ending

 

(In thousands)

 

ACL

 

 

Charge-offs

 

 

Recoveries

 

 

(Credit) (A)

 

 

ACL

 

Primary residential mortgage

 

$

4,398

 

 

$

—

 

 

$

—

 

 

$

71

 

 

$

4,469

 

Junior lien loan on residence

 

 

180

 

 

 

—

 

 

 

—

 

 

 

15

 

 

 

195

 

Multifamily property

 

 

17,653

 

 

 

—

 

 

 

—

 

 

 

77

 

 

 

17,730

 

Owner-occupied commercial real estate

 

 

3,208

 

 

 

—

 

 

 

—

 

 

 

256

 

 

 

3,464

 

Investment commercial real estate

 

 

11,685

 

 

 

—

 

 

 

—

 

 

 

79

 

 

 

11,764

 

Commercial and industrial

 

 

33,075

 

 

 

(2,349

)

 

 

24

 

 

 

2,230

 

 

 

32,980

 

Lease financing

 

 

1,488

 

 

 

—

 

 

 

—

 

 

 

328

 

 

 

1,816

 

Construction

 

 

121

 

 

 

—

 

 

 

—

 

 

 

37

 

 

 

158

 

Consumer and other loans

 

 

1,184

 

 

 

(11

)

 

 

—

 

 

 

1,401

 

 

 

2,574

 

Total ACL

 

$

72,992

 

 

$

(2,360

)

 

$

24

 

 

$

4,494

 

 

$

75,150

 

 

(A) Provision to roll forward the ACL excludes a credit of $23,000 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 three months ended March 31, 2026 and 2025:

 

 

 

January 1,

 

 

 

 

 

 

 

 

 

2026

 

 

 

 

 

March 31,

 

 

 

Beginning

 

 

Provision

 

 

2026

 

(In thousands)

 

ACL

 

 

(Credit)

 

 

Ending ACL

 

Off balance sheet commitments

 

$

608

 

 

$

5

 

 

$

613

 

Total ACL

 

$

608

 

 

$

5

 

 

$

613

 

 

 

 

January 1,

 

 

 

 

 

 

 

 

 

2025

 

 

 

 

 

March 31,

 

 

 

Beginning

 

 

Provision

 

 

2025

 

(In thousands)

 

ACL

 

 

(Credit)

 

 

Ending ACL

 

Off balance sheet commitments

 

$

691

 

 

$

(23

)

 

$

668

 

Total ACL

 

$

691

 

 

$

(23

)

 

$

668