XML 20 R14.htm IDEA: XBRL DOCUMENT v3.26.1
ALLOWANCE FOR CREDIT LOSSES
 6 Months Ended
Jun. 30, 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 $30.7 million at June 30, 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 June 30, 2026 and December 31, 2025. The allowance was based on the CECL methodology.

 

 

 

June 30, 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

 

$

3,097

 

 

$

—

 

 

$

664,674

 

 

$

5,717

 

 

$

667,771

 

 

$

5,717

 

Junior lien loan on residence

 

 

103

 

 

 

—

 

 

 

57,364

 

 

 

178

 

 

 

57,467

 

 

 

178

 

Multifamily property

 

 

42,571

 

 

 

1,818

 

 

 

1,761,809

 

 

 

8,572

 

 

 

1,804,380

 

 

 

10,390

 

Owner-occupied commercial real estate

 

 

—

 

 

 

—

 

 

 

297,144

 

 

 

3,421

 

 

 

297,144

 

 

 

3,421

 

Investment commercial real estate

 

 

9,564

 

 

 

—

 

 

 

1,311,425

 

 

 

15,584

 

 

 

1,320,989

 

 

 

15,584

 

Commercial and industrial

 

 

12,619

 

 

 

2,806

 

 

 

1,976,315

 

 

 

24,216

 

 

 

1,988,934

 

 

 

27,022

 

Lease financing

 

 

—

 

 

 

—

 

 

 

287,212

 

 

 

2,825

 

 

 

287,212

 

 

 

2,825

 

Construction

 

 

—

 

 

 

—

 

 

 

21,466

 

 

 

342

 

 

 

21,466

 

 

 

342

 

Consumer and other loans

 

 

80

 

 

 

80

 

 

 

227,311

 

 

 

3,608

 

 

 

227,391

 

 

 

3,688

 

Total ACL

 

$

68,034

 

 

$

4,704

 

 

$

6,604,720

 

 

$

64,463

 

 

$

6,672,754

 

 

$

69,167

 

 

 

 

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 $68.0 million at June 30, 2026 and $68.2 million at December 31, 2025. Individually evaluated loans did not include any performing modified loans at June 30, 2026. An allowance of $355,000 was allocated to modified loans at June 30, 2026.

 

The allowance for credit losses was $69.2 million as of June 30, 2026, compared to $71.0 million at December 31, 2025. The decrease in the ACL was primarily driven by charge-offs of $17.5 million during the six months ended June 30, 2026. Charge-offs of $7.8 million were related to the liquidation of one commercial and industrial relationship with an additional $8.3 million associated with the sale of two multifamily loans. 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 $15.3 million driven by loan growth of $421.5 million for the six months ended June 30, 2026. The ACL as a percentage of loans was 1.04 percent at June 30, 2026, compared to 1.14 percent at December 31, 2025. The decrease in the ratio for the six months ended June 30, 2026 was primarily due to the 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 June 30, 2026 and December 31, 2025:

 

 

 

June 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

Unpaid

 

 

 

 

 

 

 

 

Individually

 

 

 

Principal

 

 

Recorded

 

 

Related

 

 

Evaluated

 

(In thousands)

 

Balance

 

 

Investment

 

 

Allowance

 

 

Loans

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

Primary residential mortgage (A)

 

$

3,331

 

 

$

3,097

 

 

$

—

 

 

$

3,022

 

Junior lien loan on residence (A)

 

 

116

 

 

 

103

 

 

 

—

 

 

 

104

 

Multifamily property (B)

 

 

23,611

 

 

 

22,620

 

 

 

—

 

 

 

22,080

 

Investment commercial real estate (C)

 

 

12,500

 

 

 

9,564

 

 

 

—

 

 

 

11,199

 

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

 

 

10,732

 

 

 

2,963

 

 

 

—

 

 

 

6,371

 

Total loans with no related allowance

 

$

50,290

 

 

$

38,347

 

 

$

—

 

 

$

42,776

 

With related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

Multifamily property (B)

 

$

20,249

 

 

$

19,951

 

 

$

1,818

 

 

$

11,176

 

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

 

 

10,095

 

 

 

9,656

 

 

 

2,806

 

 

 

9,754

 

Consumer and other loans (E)

 

 

80

 

 

 

80

 

 

 

80

 

 

 

13

 

Total loans with related allowance

 

$

30,424

 

 

$

29,687

 

 

$

4,704

 

 

$

20,943

 

Total loans individually evaluated

 

$

80,714

 

 

$

68,034

 

 

$

4,704

 

 

$

63,719

 

 

(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) Unsecured.

 

 

 

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 and six months ended June 30, 2026 and 2025 was not material. The Company did not recognize any income on non-accruing loans for the three and six months ended June 30, 2026 and 2025.

 

The activity in the allowance for credit losses for the three months ended June 30, 2026 and June 30, 2025 is summarized below:

 

 

 

April 1,

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

 

2026

 

 

 

 

 

 

 

 

 

 

 

2026

 

 

 

Beginning

 

 

 

 

 

 

 

 

Provision

 

 

Ending

 

(In thousands)

 

ACL

 

 

Charge-offs

 

 

Recoveries

 

 

(Credit) (A)

 

 

ACL

 

Primary residential mortgage

 

$

5,396

 

 

$

(1

)

 

$

—

 

 

$

322

 

 

$

5,717

 

Junior lien loan on residence

 

 

195

 

 

 

—

 

 

 

—

 

 

 

(17

)

 

 

178

 

Multifamily property

 

 

12,129

 

 

 

(4,760

)

 

 

—

 

 

 

3,021

 

 

 

10,390

 

Owner-occupied commercial real estate

 

 

3,544

 

 

 

—

 

 

 

—

 

 

 

(123

)

 

 

3,421

 

Investment commercial real estate

 

 

15,207

 

 

 

(994

)

 

 

—

 

 

 

1,371

 

 

 

15,584

 

Commercial and industrial

 

 

24,312

 

 

 

(345

)

 

 

230

 

 

 

2,825

 

 

 

27,022

 

Lease financing

 

 

2,544

 

 

 

—

 

 

 

—

 

 

 

281

 

 

 

2,825

 

Construction

 

 

209

 

 

 

—

 

 

 

—

 

 

 

133

 

 

 

342

 

Consumer and other loans

 

 

3,490

 

 

 

(2

)

 

 

1

 

 

 

199

 

 

 

3,688

 

Total ACL

 

$

67,026

 

 

$

(6,102

)

 

$

231

 

 

$

8,012

 

 

$

69,167

 

 

(A) Provision to roll forward the ACL excludes provision of $76,000 for off-balance sheet commitments.

 

 

 

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.

 

The activity in the allowance for credit losses for the six months ended June 30, 2026 and June 30, 2025 is summarized below:

 

 

 

January 1,

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

 

2026

 

 

 

 

 

 

 

 

 

 

 

2026

 

 

 

Beginning

 

 

 

 

 

 

 

 

Provision

 

 

Ending

 

(In thousands)

 

ACL

 

 

Charge-offs

 

 

Recoveries

 

 

(Credit) (A)

 

 

ACL

 

Primary residential mortgage

 

$

5,328

 

 

$

(1

)

 

$

—

 

 

$

390

 

 

$

5,717

 

Junior lien loan on residence

 

 

208

 

 

 

—

 

 

 

—

 

 

 

(30

)

 

 

178

 

Multifamily property

 

 

12,458

 

 

 

(8,298

)

 

 

—

 

 

 

6,230

 

 

 

10,390

 

Owner-occupied commercial real estate

 

 

3,630

 

 

 

—

 

 

 

—

 

 

 

(209

)

 

 

3,421

 

Investment commercial real estate

 

 

13,987

 

 

 

(994

)

 

 

—

 

 

 

2,591

 

 

 

15,584

 

Commercial and industrial

 

 

29,385

 

 

 

(8,155

)

 

 

255

 

 

 

5,537

 

 

 

27,022

 

Lease financing

 

 

2,554

 

 

 

—

 

 

 

—

 

 

 

271

 

 

 

2,825

 

Construction

 

 

297

 

 

 

—

 

 

 

—

 

 

 

45

 

 

 

342

 

Consumer and other loans

 

 

3,192

 

 

 

(14

)

 

 

1

 

 

 

509

 

 

 

3,688

 

Total ACL

 

$

71,039

 

 

$

(17,462

)

 

$

256

 

 

$

15,334

 

 

$

69,167

 

 

(A) Provision to roll forward the ACL excludes a provision of $81,000 for off-balance sheet commitments.

 

 

 

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.

 

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, 2026 and 2025:

 

 

 

January 1,

 

 

 

 

 

 

 

 

 

2026

 

 

 

 

 

June 30,

 

 

 

Beginning

 

 

Provision

 

 

2026

 

(In thousands)

 

ACL

 

 

(Credit)

 

 

Ending ACL

 

Off balance sheet commitments

 

$

608

 

 

$

81

 

 

$

689

 

Total ACL

 

$

608

 

 

$

81

 

 

$

689

 

 

 

 

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