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Loans, Lease Receivables, and Allowance for Credit Losses | 9 Months Ended
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Sep. 30, 2024
Receivables [Abstract] |
Loans, Lease Receivables, and Allowance for Credit Losses | Note 5 — Loans, Lease Receivables, and Allowance for Credit Losses Loan and lease receivables consist of the following:
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | (In Thousands) |
Commercial real estate: |  |  |  |  |  |
Commercial real estate — owner occupied |  | $ | 259,532 |  |  | $ | 256,479 |
Commercial real estate — non-owner occupied |  |  | 768,195 |  |  |  | 773,494 |
Construction |  |  | 266,762 |  |  |  | 193,080 |
Multi-family |  |  | 494,954 |  |  |  | 450,529 |
1-4 family |  |  | 39,933 |  |  |  | 26,289 |
Total commercial real estate |  |  | 1,829,376 |  |  |  | 1,699,871 |
Commercial and industrial |  |  | 1,174,295 |  |  |  | 1,105,835 |
Consumer and other |  |  | 46,610 |  |  |  | 44,312 |
Total gross loans and leases receivable |  |  | 3,050,281 |  |  |  | 2,850,018 |
Less: |  |  |  |  |  |
Allowance for credit losses |  |  | 33,688 |  |  |  | 31,275 |
Deferred loan fees and costs, net |  |  | 202 |  |  |  | (243 | )
Loans and leases receivable, net |  | $ | 3,016,391 |  |  | $ | 2,818,986 |
Loans transferred to third parties consist of the guaranteed portions of SBA loans which the Corporation sold in the secondary market and participation interests in other, non-SBA originated loans. The total principal amount of the guaranteed portions of SBA loans sold during the three months ended September 30, 2024 and 2023, was $4.6 million and $10.7 million, respectively. The total principal amount of the guaranteed portions of SBA loans sold during the nine months ended September 30, 2024 and 2023, was $10.3 million and $20.5 million, respectively. Each of the transfers of these financial assets met the qualifications for sale accounting, and therefore all of the loans transferred during the three and nine months ended September 30, 2024 and 2023, have been derecognized in the unaudited Consolidated Financial Statements. The guaranteed portions of SBA loans were transferred at their fair value and the related gain was recognized upon the transfer as non-interest income in the unaudited Consolidated Financial Statements. The total outstanding balance of sold SBA loans serviced by the Corporation at September 30, 2024, and December 31, 2023, was $74.6 million and $84.2 million, respectively. The total principal amount of transferred participation interests in other, non-SBA originated loans during the three months ended September 30, 2024 and 2023, was $31.4 million and $39.2 million, respectively, all of which were treated as sales and derecognized under the applicable accounting guidance at the time of transfer. The total principal amount of transferred participation interests in other, non-SBA originated loans during the nine months ended September 30, 2024 and 2023, was $90.0 million and $93.9 million, respectively, all of which were treated as sales and derecognized under the applicable accounting guidance at the time of transfer. No gain or loss was recognized on participation interests in other, non-SBA originated loans as they were transferred at or near the date of loan origination and the payments received for servicing the portion of the loans participated represents adequate compensation. The total amount of loan participation purchased on the Corporation's Consolidated Balance Sheet as of September 30, 2024 was $2.2 million. There were no loan participation purchased on the Corporation's Consolidated Balance Sheet as of December 31, 2023. The total outstanding balance of these transferred loans serviced by the Corporation at September 30, 2024, and December 31, 2023, was $332.0 million and $279.5 million, respectively. As of September 30, 2024, and December 31, 2023, the total amount of the Corporation’s retained ownership of these transferred loans was $390.1 million and $367.4 million, respectively. As of September 30, 2024 and December 31, 2023, the non-SBA originated participation portfolio contained no non-accrual loans. The Corporation does not share in the participant’s portion of any potential charge-offs. The following table illustrates ending balances of the Corporation’s loan and lease portfolio, including non-accrual loans by class of receivable, and considering certain credit quality indicators:
September 30, 2024 |  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |
(In Thousands) |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Revolving Loans Amortized Cost Basis |  |  | Total |
Commercial real estate — owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 9,514 |  |  | $ | 38,462 |  |  | $ | 45,346 |  |  | $ | 37,126 |  |  | $ | 42,580 |  |  | $ | 83,902 |  |  | $ | 1,747 |  |  | $ | 258,677 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 855 |  |  |  | — |  |  |  | 855 |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 9,514 |  |  | $ | 38,462 |  |  | $ | 45,346 |  |  | $ | 37,126 |  |  | $ | 42,580 |  |  | $ | 84,757 |  |  | $ | 1,747 |  |  | $ | 259,532 |
Commercial real estate — non-owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 18,420 |  |  | $ | 69,137 |  |  | $ | 76,518 |  |  | $ | 70,956 |  |  | $ | 85,917 |  |  | $ | 350,267 |  |  | $ | 38,223 |  |  | $ | 709,438 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,257 |  |  |  | 2,176 |  |  |  | 30,266 |  |  |  | — |  |  |  | 34,699 |
III |  |  | — |  |  |  | 651 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 23,407 |  |  |  | — |  |  |  | 24,058 |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 18,420 |  |  | $ | 69,788 |  |  | $ | 76,518 |  |  | $ | 73,213 |  |  | $ | 88,093 |  |  | $ | 403,940 |  |  | $ | 38,223 |  |  | $ | 768,195 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 53,512 |  |  | $ | 130,485 |  |  | $ | 37,255 |  |  | $ | 4,769 |  |  | $ | 729 |  |  | $ | 5,556 |  |  | $ | 19,870 |  |  | $ | 252,176 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
III |  |  | — |  |  |  | — |  |  |  | 454 |  |  |  | 8,155 |  |  |  | 5,713 |  |  |  | 264 |  |  |  | — |  |  |  | 14,586 |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 53,512 |  |  | $ | 130,485 |  |  | $ | 37,709 |  |  | $ | 12,924 |  |  | $ | 6,442 |  |  | $ | 5,820 |  |  | $ | 19,870 |  |  | $ | 266,762 |
Multi-family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 26,055 |  |  | $ | 80,720 |  |  | $ | 75,986 |  |  | $ | 69,682 |  |  | $ | 102,078 |  |  | $ | 136,119 |  |  | $ | 2,900 |  |  | $ | 493,540 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,414 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,414 |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 26,055 |  |  | $ | 80,720 |  |  | $ | 75,986 |  |  | $ | 71,096 |  |  | $ | 102,078 |  |  | $ | 136,119 |  |  | $ | 2,900 |  |  | $ | 494,954 |
1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 10,544 |  |  | $ | 4,211 |  |  | $ | 7,153 |  |  | $ | 2,356 |  |  | $ | 2,302 |  |  | $ | 2,508 |  |  | $ | 10,843 |  |  | $ | 39,917 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 16 |  |  |  | — |  |  |  | 16 |
Total |  | $ | 10,544 |  |  | $ | 4,211 |  |  | $ | 7,153 |  |  | $ | 2,356 |  |  | $ | 2,302 |  |  | $ | 2,524 |  |  | $ | 10,843 |  |  | $ | 39,933 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 187,043 |  |  | $ | 242,991 |  |  | $ | 106,808 |  |  | $ | 59,711 |  |  | $ | 27,053 |  |  | $ | 29,980 |  |  | $ | 448,373 |  |  | $ | 1,101,959 |
II |  |  | 199 |  |  |  | 3,352 |  |  |  | 3,666 |  |  |  | — |  |  |  | 472 |  |  |  | 8 |  |  |  | 5,792 |  |  |  | 13,489 |
III |  |  | 4,413 |  |  |  | 5,190 |  |  |  | 6,103 |  |  |  | 1,473 |  |  |  | 2,489 |  |  |  | 4,529 |  |  |  | 15,302 |  |  |  | 39,499 |
IV |  |  | 58 |  |  |  | 3,578 |  |  |  | 5,653 |  |  |  | 1,026 |  |  |  | 447 |  |  |  | 2,381 |  |  |  | 6,205 |  |  |  | 19,348 |
Total |  | $ | 191,713 |  |  | $ | 255,111 |  |  | $ | 122,230 |  |  | $ | 62,210 |  |  | $ | 30,461 |  |  | $ | 36,898 |  |  | $ | 475,672 |  |  | $ | 1,174,295 |
Consumer and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 6,580 |  |  | $ | 5,388 |  |  | $ | 7,674 |  |  | $ | 2,866 |  |  | $ | 11,467 |  |  | $ | 5,220 |  |  | $ | 7,415 |  |  | $ | 46,610 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 6,580 |  |  | $ | 5,388 |  |  | $ | 7,674 |  |  | $ | 2,866 |  |  | $ | 11,467 |  |  | $ | 5,220 |  |  | $ | 7,415 |  |  | $ | 46,610 |
Total Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 311,668 |  |  | $ | 571,394 |  |  | $ | 356,740 |  |  | $ | 247,466 |  |  | $ | 272,126 |  |  | $ | 613,552 |  |  | $ | 529,371 |  |  | $ | 2,902,317 |
II |  |  | 199 |  |  |  | 3,352 |  |  |  | 3,666 |  |  |  | 3,671 |  |  |  | 2,648 |  |  |  | 30,274 |  |  |  | 5,792 |  |  |  | 49,602 |
III |  |  | 4,413 |  |  |  | 5,841 |  |  |  | 6,557 |  |  |  | 9,628 |  |  |  | 8,202 |  |  |  | 29,055 |  |  |  | 15,302 |  |  |  | 78,998 |
IV |  |  | 58 |  |  |  | 3,578 |  |  |  | 5,653 |  |  |  | 1,026 |  |  |  | 447 |  |  |  | 2,397 |  |  |  | 6,205 |  |  |  | 19,364 |
Total |  | $ | 316,338 |  |  | $ | 584,165 |  |  | $ | 372,616 |  |  | $ | 261,791 |  |  | $ | 283,423 |  |  | $ | 675,278 |  |  | $ | 556,670 |  |  | $ | 3,050,281 |
December 31, 2023 |  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |
(In Thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Revolving Loans Amortized Cost Basis |  |  | Total |
Commercial real estate — owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 31,637 |  |  | $ | 43,156 |  |  | $ | 38,803 |  |  | $ | 44,704 |  |  | $ | 22,078 |  |  | $ | 72,774 |  |  | $ | 451 |  |  | $ | 253,603 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 260 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 260 |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,616 |  |  |  | — |  |  |  | 2,616 |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 31,637 |  |  | $ | 43,156 |  |  | $ | 38,803 |  |  | $ | 44,964 |  |  | $ | 22,078 |  |  | $ | 75,390 |  |  | $ | 451 |  |  | $ | 256,479 |
Commercial real estate — non-owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 71,857 |  |  | $ | 76,689 |  |  | $ | 72,660 |  |  | $ | 78,212 |  |  | $ | 66,262 |  |  | $ | 314,970 |  |  | $ | 32,478 |  |  | $ | 713,128 |
II |  |  | — |  |  |  | — |  |  |  | 2,302 |  |  |  | 2,252 |  |  |  | 19,838 |  |  |  | 16,274 |  |  |  | — |  |  |  | 40,666 |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 19,700 |  |  |  | — |  |  |  | 19,700 |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 71,857 |  |  | $ | 76,689 |  |  | $ | 74,962 |  |  | $ | 80,464 |  |  | $ | 86,100 |  |  | $ | 350,944 |  |  | $ | 32,478 |  |  | $ | 773,494 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 63,660 |  |  | $ | 83,161 |  |  | $ | 8,542 |  |  | $ | 744 |  |  | $ | 433 |  |  | $ | 6,528 |  |  | $ | 15,011 |  |  | $ | 178,079 |
II |  |  | — |  |  |  | — |  |  |  | 9,289 |  |  |  | 5,712 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 15,001 |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 63,660 |  |  | $ | 83,161 |  |  | $ | 17,831 |  |  | $ | 6,456 |  |  | $ | 433 |  |  | $ | 6,528 |  |  | $ | 15,011 |  |  | $ | 193,080 |
Multi-family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 84,932 |  |  | $ | 41,068 |  |  | $ | 70,054 |  |  | $ | 113,294 |  |  | $ | 22,925 |  |  | $ | 115,243 |  |  | $ | 3,013 |  |  | $ | 450,529 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 84,932 |  |  | $ | 41,068 |  |  | $ | 70,054 |  |  | $ | 113,294 |  |  | $ | 22,925 |  |  | $ | 115,243 |  |  | $ | 3,013 |  |  | $ | 450,529 |
1-4 family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 4,242 |  |  | $ | 7,684 |  |  | $ | 2,672 |  |  | $ | 2,359 |  |  | $ | 443 |  |  | $ | 2,805 |  |  | $ | 6,062 |  |  | $ | 26,267 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | — |  |  |  | 22 |
Total |  | $ | 4,242 |  |  | $ | 7,684 |  |  | $ | 2,672 |  |  | $ | 2,359 |  |  | $ | 443 |  |  | $ | 2,827 |  |  | $ | 6,062 |  |  | $ | 26,289 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 302,612 |  |  | $ | 144,167 |  |  | $ | 85,504 |  |  | $ | 38,164 |  |  | $ | 20,151 |  |  | $ | 26,490 |  |  | $ | 415,301 |  |  | $ | 1,032,389 |
II |  |  | 1,496 |  |  |  | 5,280 |  |  |  | 785 |  |  |  | 353 |  |  |  | 94 |  |  |  | 219 |  |  |  | 5,706 |  |  |  | 13,933 |
III |  |  | 1,093 |  |  |  | 7,168 |  |  |  | 1,882 |  |  |  | 5,919 |  |  |  | 3,861 |  |  |  | 3,957 |  |  |  | 15,058 |  |  |  | 38,938 |
IV |  |  | 1,482 |  |  |  | 6,519 |  |  |  | 1,319 |  |  |  | 321 |  |  |  | 133 |  |  |  | 1,644 |  |  |  | 9,157 |  |  |  | 20,575 |
Total |  | $ | 306,683 |  |  | $ | 163,134 |  |  | $ | 89,490 |  |  | $ | 44,757 |  |  | $ | 24,239 |  |  | $ | 32,310 |  |  | $ | 445,222 |  |  | $ | 1,105,835 |
Consumer and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 5,920 |  |  | $ | 8,786 |  |  | $ | 3,167 |  |  | $ | 12,193 |  |  | $ | 2,049 |  |  | $ | 3,485 |  |  | $ | 8,712 |  |  | $ | 44,312 |
II |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
III |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
IV |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 5,920 |  |  | $ | 8,786 |  |  | $ | 3,167 |  |  | $ | 12,193 |  |  | $ | 2,049 |  |  | $ | 3,485 |  |  | $ | 8,712 |  |  | $ | 44,312 |
Total Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
I |  | $ | 564,860 |  |  | $ | 404,711 |  |  | $ | 281,402 |  |  | $ | 289,670 |  |  | $ | 134,341 |  |  | $ | 542,295 |  |  | $ | 481,028 |  |  | $ | 2,698,307 |
II |  |  | 1,496 |  |  |  | 5,280 |  |  |  | 12,376 |  |  |  | 8,577 |  |  |  | 19,932 |  |  |  | 16,493 |  |  |  | 5,706 |  |  |  | 69,860 |
III |  |  | 1,093 |  |  |  | 7,168 |  |  |  | 1,882 |  |  |  | 5,919 |  |  |  | 3,861 |  |  |  | 26,273 |  |  |  | 15,058 |  |  |  | 61,254 |
IV |  |  | 1,482 |  |  |  | 6,519 |  |  |  | 1,319 |  |  |  | 321 |  |  |  | 133 |  |  |  | 1,666 |  |  |  | 9,157 |  |  |  | 20,597 |
Total |  | $ | 568,931 |  |  | $ | 423,678 |  |  | $ | 296,979 |  |  | $ | 304,487 |  |  | $ | 158,267 |  |  | $ | 586,727 |  |  | $ | 510,949 |  |  | $ | 2,850,018 |
Each credit is evaluated for proper risk rating upon origination, at the time of each subsequent renewal, upon receipt and evaluation of updated financial information from the Corporation’s borrowers, or as other circumstances dictate. The Corporation primarily uses a nine grade risk rating system to monitor the ongoing credit quality of its loans and leases. The risk rating grades follow a consistent definition and are then applied to specific loan types based on the nature of the loan. Each risk rating is determined based on various quantitative and qualitative factors and is subject to various levels of review and concurrence on the stated risk rating. In addition to its nine grade risk rating system, the Corporation groups loans into four loan and related risk categories which determine the level and nature of review by management. Category I — Loans and leases in this category are performing in accordance with the terms of the contract and generally exhibit no immediate concerns regarding the security and viability of the underlying collateral, financial stability of the borrower, integrity or strength of the borrowers’ management team, or the industry in which the borrower operates. The Corporation monitors Category I loans and leases through payment performance, continued maintenance of its personal relationships with such borrowers, and continued review of such borrowers’ compliance with the terms of their respective agreements. Category II — Loans and leases in this category are beginning to show signs of deterioration in one or more of the Corporation’s core underwriting criteria such as financial stability, management strength, industry trends, or collateral values. Management will place credits in this category to allow for proactive monitoring and resolution with the borrower to possibly mitigate the area of concern and prevent further deterioration or risk of loss to the Corporation. Category II loans are considered performing but are monitored frequently by the assigned business development officer and by asset quality review committees. Category III — Loans and leases in this category are identified by management as warranting special attention. However, the balance in this category is not intended to represent the amount of adversely classified assets held by the Bank. Category III loans and leases generally exhibit undesirable characteristics, such as evidence of adverse financial trends and conditions, managerial problems, deteriorating economic conditions within the related industry, or evidence of adverse public filings and may exhibit collateral shortfall positions. Management continues to believe that it will collect all contractual principal and interest in accordance with the original terms of the contracts relating to the loans and leases in this category, and therefore Category III loans are considered performing with no specific reserves established for this category. Category III loans are monitored by management and asset quality review committees on a monthly basis. Category IV — Loans and leases in this category are non-accrual loans. Management has determined that it is unlikely that the Bank will receive the contractual principal and interest in accordance with the original terms of the agreement. Non-accrual loans are individually evaluated to assess the need for the establishment of specific reserves or charge-offs. When analyzing the adequacy of collateral, the Corporation obtains external appraisals at least annually. External appraisals are obtained from the Corporation’s approved appraiser listing and are independently reviewed to monitor the quality of such appraisals. To the extent a collateral shortfall position is present, a specific reserve or charge-off will be recorded. Loans and leases in this category are monitored by management and asset quality review committees on a monthly basis. The delinquency aging of the loan and lease portfolio by class of receivable was as follows:
|  | September 30, 2024 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater Than 90 Days Past Due |  |  | Total Past Due |  |  | Current |  |  | Total Loans and Leases |
|  | (Dollars in Thousands) |
Total loans and leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 259,532 |  |  | $ | 259,532 |
Non-owner occupied |  |  | 375 |  |  |  | — |  |  |  | — |  |  |  | 375 |  |  |  | 767,820 |  |  |  | 768,195 |
Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 266,762 |  |  |  | 266,762 |
Multi-family |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 494,954 |  |  |  | 494,954 |
1-4 family |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 39,933 |  |  |  | 39,933 |
Commercial and industrial |  |  | 1,555 |  |  |  | 2,835 |  |  |  | 17,497 |  |  |  | 21,887 |  |  |  | 1,152,408 |  |  |  | 1,174,295 |
Consumer and other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 46,610 |  |  |  | 46,610 |
Total |  | $ | 1,930 |  |  | $ | 2,835 |  |  | $ | 17,497 |  |  | $ | 22,262 |  |  | $ | 3,028,019 |  |  | $ | 3,050,281 |
Percent of portfolio |  |  | 0.06 | % |  |  | 0.09 | % |  |  | 0.57 | % |  |  | 0.73 | % |  |  | 99.27 | % |  |  | 100.00 | %
|  | December 31, 2023 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater Than 90 Days Past Due |  |  | Total Past Due |  |  | Current |  |  | Total Loans and Leases |
|  | (Dollars in Thousands) |
Total loans and leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 256,479 |  |  | $ | 256,479 |
Non-owner occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 773,494 |  |  |  | 773,494 |
Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 193,080 |  |  |  | 193,080 |
Multi-family |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 450,529 |  |  |  | 450,529 |
1-4 family |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 26,289 |  |  |  | 26,289 |
Commercial and industrial |  |  | 3,430 |  |  |  | 1,041 |  |  |  | 18,347 |  |  |  | 22,818 |  |  |  | 1,083,017 |  |  |  | 1,105,835 |
Consumer and other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 44,312 |  |  |  | 44,312 |
Total |  | $ | 3,430 |  |  | $ | 1,041 |  |  | $ | 18,347 |  |  | $ | 22,818 |  |  | $ | 2,827,200 |  |  | $ | 2,850,018 |
Percent of portfolio |  |  | 0.12 | % |  |  | 0.04 | % |  |  | 0.64 | % |  |  | 0.80 | % |  |  | 99.20 | % |  |  | 100.00 | %
The following tables provide additional detail on loans on non-accrual status and loans past due over 89 days still accruing as of:
|  | September 30, 2024 |
|  | Non-accrual With No Allowance for Credit Loss |  |  | Non-accrual With Allowance for Credit Loss |  |  | Loans Past Due Over 89 Days Still Accruing |
|  | (In Thousands) |
Commercial real estate: |  |  |  |  |  |  |  |  |
Commercial real estate — owner occupied |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial real estate — non-owner occupied |  |  | — |  |  |  | — |  |  |  | — |
Construction |  |  | — |  |  |  | — |  |  |  | — |
Multi-family |  |  | — |  |  |  | — |  |  |  | — |
1-4 family |  |  | 16 |  |  |  | — |  |  |  | — |
Total commercial real estate |  |  | 16 |  |  |  | — |  |  |  | — |
Commercial and industrial |  |  | 8,009 |  |  |  | 11,339 |  |  |  | — |
Consumer and other |  |  | — |  |  |  | — |  |  |  | — |
Total non-accrual loans and leases |  | $ | 8,025 |  |  | $ | 11,339 |  |  | $ | — |
|  | December 31, 2023 |
|  | Non-accrual With No Allowance for Credit Loss |  |  | Non-accrual With Allowance for Credit Loss |  |  | Loans Past Due Over 89 Days Still Accruing |
|  | (In Thousands) |
Commercial real estate: |  |  |  |  |  |  |  |  |
Commercial real estate — owner occupied |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial real estate — non-owner occupied |  |  | — |  |  |  | — |  |  |  | — |
Construction |  |  | — |  |  |  | — |  |  |  | — |
Multi-family |  |  | — |  |  |  | — |  |  |  | — |
1-4 family |  |  | — |  |  |  | 22 |  |  |  | — |
Total commercial real estate |  |  | — |  |  |  | 22 |  |  |  | — |
Commercial and industrial |  |  | 9,691 |  |  |  | 10,884 |  |  |  | — |
Consumer and other |  |  | — |  |  |  | — |  |  |  | — |
Total non-accrual loans and leases |  | $ | 9,691 |  |  | $ | 10,906 |  |  | $ | — |
|  | September 30, 2024 |  |  | December 31, 2023 |
Total non-accrual loans and leases to gross loans and leases |  |  | 0.63 | % |  |  | 0.72 | %
Allowance for credit losses to gross loans and leases |  |  | 1.16 |  |  |  | 1.16 |
Allowance for credit losses to non-accrual loans and leases |  |  | 183.38 |  |  |  | 160.21 |
The following table presents the amortized cost basis of the non-accrual, collateral-dependent commercial and industrial loans as of:
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | (In Thousands) |
Inventory |  | $ | 75 |  |  | $ | 8,879 |
Equipment |  |  | 10,128 |  |  |  | 8,903 |
Real Estate |  |  | 132 |  |  |  | 46 |
Accounts Receivable |  |  | 6,179 |  |  |  | 278 |
Other |  |  | 1,021 |  |  |  | 1,348 |
Total |  | $ | 17,535 |  |  | $ | 19,454 |
Occasionally, the Corporation modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. The following table presents the amortized cost basis of loans at September 30, 2024 that were both experiencing financial difficulty and modified during the nine months ended September 30, 2024 and 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized costs basis of each class of financing receivable is also presented below.
|  | For the Nine Months Ended September 30, 2024 |
|  | Principal Forgiveness |  |  | Payment Delay |  |  | Term Extension |  |  | Interest Rate Reduction |  |  | Total |  |  | Total Class of Financing Receivable |
|  | (In Thousands) |  |  |  |
Commercial real estate |  | $ | — |  |  | $ | 5,901 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,901 |  |  |  | 0.32 | %
Commercial and industrial |  |  | — |  |  |  | 1,847 |  |  |  | 477 |  |  |  | — |  |  |  | 2,324 |  |  |  | 0.20 |
Total |  | $ | — |  |  | $ | 7,748 |  |  | $ | 477 |  |  | $ | — |  |  | $ | 8,225 |  |  |  | 0.27 | %
|  | For the Nine Months Ended September 30, 2023 |
|  | Principal Forgiveness |  |  | Payment Delay |  |  | Term Extension |  |  | Interest Rate Reduction |  |  | Total |  |  | Total Class of Financing Receivable |
|  | (In Thousands) |  |  |  |
Commercial real estate |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |  | 0.00 | %
Commercial and industrial |  |  | — |  |  |  | 716 |  |  |  | — |  |  |  | — |  |  |  | 716 |  |  |  | 0.07 |
Total |  | $ | — |  |  | $ | 716 |  |  | $ | — |  |  | $ | — |  |  | $ | 716 |  |  |  | 0.03 | %
The Corporation 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 presents the performance of such loans that have been modified in the last 12 months:
|  | For the Nine Months Ended September 30, 2024 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater Than 90 Days Past Due |  |  | Total Past Due |
|  | (Dollars in Thousands) |
Commercial real estate |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial and industrial |  |  | — |  |  |  | 360 |  |  |  | 50 |  |  |  | 410 |
Total |  | $ | — |  |  | $ | 360 |  |  | $ | 50 |  |  | $ | 410 |
|  | For the Nine Months Ended September 30, 2023 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater Than 90 Days Past Due |  |  | Total Past Due |
|  | (Dollars in Thousands) |
Commercial real estate |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | 389 |  |  |  | 389 |
Total |  | $ | — |  |  | $ | — |  |  | $ | 389 |  |  | $ | 389 |
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the nine months ended September 30, 2024 and 2023:
|  | For the Nine Months Ended September 30, 2024 |
(Dollars in Thousands) |  | Principal Forgiveness |  |  | Weighted Average Interest Rate Reduction |  |  | Weighted Average Term Extension (years) |  |  | Weighted Average Payment Delay (years) |
Commercial real estate |  | $ | — |  |  | $ | — |  |  |  | 0.00 |  |  |  | 0.75 |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | 1.01 |  |  |  | 0.67 |
Total |  | $ | — |  |  | $ | — |  |  |  | 1.01 |  |  |  | 1.42 |
|  | For the Nine Months Ended September 30, 2023 |
(Dollars in Thousands) |  | Principal Forgiveness |  |  | Weighted Average Interest Rate Reduction |  |  | Weighted Average Term Extension (years) |  |  | Weighted Average Payment Delay (years) |
Commercial real estate |  | $ | — |  |  | $ | — |  |  |  | 0.00 |  |  |  | 0.00 |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | 0.00 |  |  |  | 0.50 |
Total |  | $ | — |  |  | $ | — |  |  |  | 0.00 |  |  |  | 0.50 |
The following table presents the amortized cost basis of loans that had a payment default during the nine months ended September 30, 2024 and 2023 and were modified in the 12 months prior to that default to borrowers experience financial difficulty:
|  | For the Nine Months Ended September 30, 2024 |
|  | Principal Forgiveness |  |  | Payment Delay |  |  | Term Extension |  |  | Interest Rate Reduction |
|  | (In Thousands) |
Commercial real estate |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial and industrial |  |  | — |  |  |  | 753 |  |  |  | — |  |  |  | — |
Total |  | $ | — |  |  | $ | 753 |  |  | $ | — |  |  | $ | — |
|  | For the Nine Months Ended September 30, 2023 |
|  | Principal Forgiveness |  |  | Payment Delay |  |  | Term Extension |  |  | Interest Rate Reduction |
|  | (In Thousands) |
Commercial real estate |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Allowance for Credit Losses The ACL is an estimate of the expected credit losses on financial assets measured at amortized cost, which is measured using relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. A provision for credit losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors as discussed within Note 1 – Nature of Operations and Summary of Significant Accounting Policies included in the Corporation’s Form 10-K for the year ended December 31, 2023. Quantitative Considerations The ACL is primarily calculated utilizing a Discounted Cash Flow (“DCF”) model. Key inputs and assumptions used in this model are discussed below: • Forecast model - For each portfolio segment, a Loss Driver Analysis (“LDA”) was performed in order to identify appropriate loss drivers and create a regression model for use in forecasting cash flows. The LDA analysis utilized peer FFIEC Call Report data for all DCF pools. The Corporation plans to update the LDA annually. • Probability of Default ("PD") – PD is the probability that an asset will be in default within a given time frame. The Corporation has defined default as when a charge-off has occurred, a loan goes to non-accrual status, or a loan is greater than 90 days past due. The forecast model is utilized to estimate PDs. • Loss Given Default ("LGD") – LGD is the percentage of the asset not expected to be collected due to default. The LGD is derived from using a method referred to as Frye Jacobs which uses industry data. • Prepayments and curtailments – Prepayments and curtailments are calculated based on the Corporation’s own data. This analysis is updated semi-annually. • Forecast and reversion – The Corporation has established a one-year reasonable and supportable forecast period with a one-year straight line reversion to the long-term historical average. • Economic forecast – The Corporation utilizes a third party to provide economic forecasts under various scenarios, which are assessed against economic indicators and management’s observations in the market. As of December 31, 2023, the Corporation selected a forecast which estimates unemployment between 3.89% and 4.04% and GDP growth change between 1.29% and 2.32% over the next four quarters. As of September 30, 2024, the Corporation selected a forecast which estimates unemployment between 4.12% and 4.20% and GDP growth change between 1.83% and 2.34% over the next four quarters. Following the forecast period, the model reverts to long-term averages over four quarters. Management believes that the resulting quantitative reserve appropriately balances economic indicators with identified risks. Qualitative Considerations In addition to the quantitative model, management considers the need for qualitative adjustment for risks not considered in the DCF. Factors that are considered by management in determining loan collectability and the appropriate level of the ACL are listed below: • The Corporation’s lending policies and procedures, including changes in lending strategies, underwriting standards and practices for collections, write-offs, and recoveries; • Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the Corporation operates that affect the collectability of financial assets; • The experience, ability, and depth of the Corporation’s lending, investment, collection, and other relevant management and staff; • The volume of past due financial assets, the volume of non-accrual loans and leases, and the volume and severity of adversely classified or graded assets; • The existence and effect of industry concentrations of credit; • The nature and volume of the portfolio segment or class; • The quality of the Corporation’s credit function; and • The effect of other external factors such as the regulatory, legal and technological environments, competition, and events such as natural disasters or pandemics. ACL Activity A summary of the activity in the allowance for credit losses by portfolio segment is as follows:
|  | As of and for the Three Months Ended September 30, 2024 |
|  | Owner Occupied |  |  | Non-Owner Occupied |  |  | Construction |  |  | Multi- Family |  |  | 1-4 Family |  |  | Commercial and Industrial |  |  | Consumer and Other |  |  | Total |
|  | (In Thousands) |
Beginning balance |  | $ | 1,531 |  |  | $ | 6,415 |  |  | $ | 3,045 |  |  | $ | 3,752 |  |  | $ | 461 |  |  | $ | 19,280 |  |  | $ | 466 |  |  | $ | 34,950 |
Charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,619 | ) |  |  | — |  |  |  | (1,619 | )
Recoveries |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | 84 |  |  |  | — |  |  |  | 91 |
Net recoveries (charge-offs) |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | (1,535 | ) |  |  | — |  |  |  | (1,528 | )
Provision for credit losses |  |  | 70 |  |  |  | (325 | ) |  |  | 483 |  |  |  | (17 | ) |  |  | 12 |  |  |  | 1,911 |  |  |  | (47 | ) |  |  | 2,087 |
Ending balance |  | $ | 1,602 |  |  | $ | 6,090 |  |  | $ | 3,528 |  |  | $ | 3,735 |  |  | $ | 479 |  |  | $ | 19,656 |  |  | $ | 419 |  |  | $ | 35,509 |
Components: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  | $ | 1,588 |  |  | $ | 6,048 |  |  | $ | 2,518 |  |  | $ | 3,710 |  |  | $ | 439 |  |  | $ | 19,010 |  |  | $ | 375 |  |  | $ | 33,688 |
Allowance for credit losses on unfunded credit commitments |  |  | 14 |  |  |  | 42 |  |  |  | 1,010 |  |  |  | 25 |  |  |  | 40 |  |  |  | 646 |  |  |  | 44 |  |  |  | 1,821 |
Total ACL |  | $ | 1,602 |  |  | $ | 6,090 |  |  | $ | 3,528 |  |  | $ | 3,735 |  |  | $ | 479 |  |  | $ | 19,656 |  |  | $ | 419 |  |  | $ | 35,509 |
|  | As of and for the Three Months Ended September 30, 2023 |
|  | Owner Occupied |  |  | Non-Owner Occupied |  |  | Construction |  |  | Multi- Family |  |  | 1-4 Family |  |  | Commercial and Industrial |  |  | Consumer and Other |  |  | Total |
|  | (In Thousands) |
Beginning balance |  | $ | 1,721 |  |  | $ | 5,241 |  |  | $ | 2,293 |  |  | $ | 3,426 |  |  | $ | 249 |  |  | $ | 16,223 |  |  | $ | 544 |  |  | $ | 29,697 |
Charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (562 | ) |  |  | — |  |  |  | (562 | )
Recoveries |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | 72 |  |  |  | — |  |  |  | 84 |
Net recoveries (charge-offs) |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9 |  |  |  | (490 | ) |  |  | — |  |  |  | (478 | )
Provision for credit losses |  |  | (151 | ) |  |  | 26 |  |  |  | 68 |  |  |  | 96 |  |  |  | (10 | ) |  |  | 1,833 |  |  |  | (45 | ) |  |  | 1,817 |
Ending balance |  | $ | 1,573 |  |  | $ | 5,267 |  |  | $ | 2,361 |  |  | $ | 3,522 |  |  | $ | 248 |  |  | $ | 17,566 |  |  | $ | 499 |  |  | $ | 31,036 |
Components: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  | $ | 1,556 |  |  | $ | 5,209 |  |  | $ | 1,441 |  |  | $ | 3,512 |  |  | $ | 228 |  |  | $ | 16,946 |  |  | $ | 439 |  |  | $ | 29,331 |
Allowance for credit losses on unfunded credit commitments |  |  | 17 |  |  |  | 58 |  |  |  | 920 |  |  |  | 10 |  |  |  | 20 |  |  |  | 620 |  |  |  | 60 |  |  |  | 1,705 |
Total ACL |  | $ | 1,573 |  |  | $ | 5,267 |  |  | $ | 2,361 |  |  | $ | 3,522 |  |  | $ | 248 |  |  | $ | 17,566 |  |  | $ | 499 |  |  | $ | 31,036 |
|  | As of and for the Nine Months Ended September 30, 2024 |
|  | Owner Occupied |  |  | Non-Owner Occupied |  |  | Construction |  |  | Multi- Family |  |  | 1-4 Family |  |  | Commercial and Industrial |  |  | Consumer and Other |  |  | Total |
|  | (In Thousands) |
Beginning balance |  | $ | 1,540 |  |  | $ | 5,636 |  |  | $ | 2,125 |  |  | $ | 3,571 |  |  | $ | 266 |  |  | $ | 19,408 |  |  | $ | 451 |  |  | $ | 32,997 |
Charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4,101 | ) |  |  | (22 | ) |  |  | (4,123 | )
Recoveries |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 121 |  |  |  | 365 |  |  |  | 21 |  |  |  | 509 |
Net recoveries (charge-offs) |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 121 |  |  |  | (3,736 | ) |  |  | (1 | ) |  |  | (3,614 | )
Provision for credit losses |  |  | 60 |  |  |  | 454 |  |  |  | 1,403 |  |  |  | 164 |  |  |  | 92 |  |  |  | 3,984 |  |  |  | (31 | ) |  |  | 6,126 |
Ending balance |  | $ | 1,602 |  |  | $ | 6,090 |  |  | $ | 3,528 |  |  | $ | 3,735 |  |  | $ | 479 |  |  | $ | 19,656 |  |  | $ | 419 |  |  | $ | 35,509 |
Components: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  | $ | 1,588 |  |  | $ | 6,048 |  |  | $ | 2,518 |  |  | $ | 3,710 |  |  | $ | 439 |  |  | $ | 19,010 |  |  | $ | 375 |  |  | $ | 33,688 |
Allowance for credit losses on unfunded credit commitments |  |  | 14 |  |  |  | 42 |  |  |  | 1,010 |  |  |  | 25 |  |  |  | 40 |  |  |  | 646 |  |  |  | 44 |  |  |  | 1,821 |
Total ACL |  | $ | 1,602 |  |  | $ | 6,090 |  |  | $ | 3,528 |  |  | $ | 3,735 |  |  | $ | 479 |  |  | $ | 19,656 |  |  | $ | 419 |  |  | $ | 35,509 |
|  | As of and for the Nine Months Ended September 30, 2023 |
|  | Owner Occupied |  |  | Non-Owner Occupied |  |  | Construction |  |  | Multi- Family |  |  | 1-4 Family |  |  | Commercial and Industrial |  |  | Consumer and Other |  |  | Total |
|  | (In Thousands) |
Beginning balance |  | $ | 1,766 |  |  | $ | 5,108 |  |  | $ | 1,646 |  |  | $ | 2,634 |  |  | $ | 207 |  |  | $ | 12,403 |  |  | $ | 466 |  |  | $ | 24,230 |
Impact of adopting ASC 326 |  |  | (204 | ) |  |  | (242 | ) |  |  | 796 |  |  |  | (386 | ) |  |  | (45 | ) |  |  | 1,873 |  |  |  | 26 |  |  |  | 1,818 |
Charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,057 | ) |  |  | — |  |  |  | (1,057 | )
Recoveries |  |  | 5 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 30 |  |  |  | 386 |  |  |  | 13 |  |  |  | 435 |
Net recoveries (charge-offs) |  |  | 5 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 30 |  |  |  | (671 | ) |  |  | 13 |  |  |  | (622 | )
Provision for credit losses |  |  | 6 |  |  |  | 400 |  |  |  | (81 | ) |  |  | 1,274 |  |  |  | 56 |  |  |  | 3,961 |  |  |  | (6 | ) |  |  | 5,610 |
Ending balance |  | $ | 1,573 |  |  | $ | 5,267 |  |  | $ | 2,361 |  |  | $ | 3,522 |  |  | $ | 248 |  |  | $ | 17,566 |  |  | $ | 499 |  |  | $ | 31,036 |
Components: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses on loans |  | $ | 1,556 |  |  | $ | 5,209 |  |  | $ | 1,441 |  |  | $ | 3,512 |  |  | $ | 228 |  |  | $ | 16,946 |  |  | $ | 439 |  |  | $ | 29,331 |
Allowance for credit losses on unfunded credit commitments |  |  | 17 |  |  |  | 58 |  |  |  | 920 |  |  |  | 10 |  |  |  | 20 |  |  |  | 620 |  |  |  | 60 |  |  |  | 1,705 |
Total ACL |  | $ | 1,573 |  |  | $ | 5,267 |  |  | $ | 2,361 |  |  | $ | 3,522 |  |  | $ | 248 |  |  | $ | 17,566 |  |  | $ | 499 |  |  | $ | 31,036 |
ACL Summary Loans collectively evaluated for credit losses in the following tables include all performing loans at September 30, 2024 and December 31, 2023. Loans individually evaluated for credit losses include all non-accrual loans. The following tables provide information regarding the allowance for credit losses and balances by type of allowance methodology.
|  | As of September 30, 2024 |
|  | Owner Occupied |  |  | Non-Owner Occupied |  |  | Construction |  |  | Multi- Family |  |  | 1-4 Family |  |  | Commercial and Industrial |  |  | Consumer and Other |  |  | Total |
|  | (In Thousands) |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for credit losses |  | $ | 1,588 |  |  | $ | 6,048 |  |  | $ | 2,518 |  |  | $ | 3,710 |  |  | $ | 439 |  |  | $ | 12,671 |  |  | $ | 375 |  |  | $ | 27,349 |
Individually evaluated for credit loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,339 |  |  |  | — |  |  |  | 6,339 |
Total |  | $ | 1,588 |  |  | $ | 6,048 |  |  | $ | 2,518 |  |  | $ | 3,710 |  |  | $ | 439 |  |  | $ | 19,010 |  |  | $ | 375 |  |  | $ | 33,688 |
Loans and lease receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for credit losses |  | $ | 259,532 |  |  | $ | 768,195 |  |  | $ | 266,762 |  |  | $ | 494,954 |  |  | $ | 39,917 |  |  | $ | 1,154,947 |  |  | $ | 46,610 |  |  | $ | 3,030,917 |
Individually evaluated for credit loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 16 |  |  |  | 19,348 |  |  |  | — |  |  |  | 19,364 |
Total |  | $ | 259,532 |  |  | $ | 768,195 |  |  | $ | 266,762 |  |  | $ | 494,954 |  |  | $ | 39,933 |  |  | $ | 1,174,295 |  |  | $ | 46,610 |  |  | $ | 3,050,281 |
|  | As of December 31, 2023 |
|  | Owner Occupied |  |  | Non-Owner Occupied |  |  | Construction |  |  | Multi- Family |  |  | 1-4 Family |  |  | Commercial and Industrial |  |  | Consumer and Other |  |  | Total |
|  | (In Thousands) |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for credit losses |  | $ | 1,525 |  |  | $ | 5,596 |  |  | $ | 1,244 |  |  | $ | 3,562 |  |  | $ | 221 |  |  | $ | 12,743 |  |  | $ | 395 |  |  | $ | 25,286 |
Individually evaluated for credit loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | 5,967 |  |  |  | — |  |  |  | 5,989 |
Total |  | $ | 1,525 |  |  | $ | 5,596 |  |  | $ | 1,244 |  |  | $ | 3,562 |  |  | $ | 243 |  |  | $ | 18,710 |  |  | $ | 395 |  |  | $ | 31,275 |
Loans and lease receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for credit losses |  | $ | 256,479 |  |  | $ | 773,494 |  |  | $ | 193,080 |  |  | $ | 450,529 |  |  | $ | 26,267 |  |  | $ | 1,085,260 |  |  | $ | 44,312 |  |  | $ | 2,829,421 |
Individually evaluated for credit loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 22 |  |  |  | 20,575 |  |  |  | — |  |  |  | 20,597 |
Total |  | $ | 256,479 |  |  | $ | 773,494 |  |  | $ | 193,080 |  |  | $ | 450,529 |  |  | $ | 26,289 |  |  | $ | 1,105,835 |  |  | $ | 44,312 |  |  | $ | 2,850,018 |

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