Student Loans

12 Months Ended

Dec. 31, 2024

Included in installment loans are $33.9 million and $38.5 million in student loans at December 31, 2024, and 2023, made to medical and pharmacy school students. Upon graduation the loan is automatically placed in a grace period of six months. This may be extended up to 48 months for graduates enrolling in internship, medical residency, or fellowship. As approved, the student may receive additional deferment for hardship or administrative reasons in the form of forbearance for a maximum of 36 months throughout the life of the loan. Student loans have not been originated or purchased since 2019.

As of December 31, 2024 and 2023, the allowance for credit losses for the student loan portfolio was $7.0 million and $6.3 million, respectively. At December 31, 2024, and 2023, student loans totaling $421,000 and $426,000 were included in the substandard category, respectively.

The following tables summarize the credit quality indicators for outstanding student loans as of December 31, 2024 and December 31, 2023:


	December 31, 2024					December 31, 2023
(Dollars in thousands)	Number of Loans	Principal Amount		Accrued Interest		Number of Loans	Principal Amount		Accrued Interest
School	26	$	692	$	512	44	$	1,242	$	734
Grace	3	100		63		18	473		296
Repayment	406	19,647		324		444	20,833		289
Deferment	219	9,954		2,593		237	10,163		2,022
Forbearance	65	3,496		133		98	5,782		133

Total	719	$	33,889	$	3,625	841	$	38,493	$	3,474

School - The time in which the borrower is still actively in school at least half time. No payments are expected during this stage, though the borrower may begin immediate payments.

Grace - A six month period of time granted to the borrower immediately upon graduation, or withdrawal from school. Interest continues to accrue. Upon completion of the six month grace period the loan is transferred to repayment status. This status may also represent a borrower activated to military duty during their time in school. The borrower must return to at least half-time status within six-months of the active duty end-date in order to return to in-school status.

Repayment - The time in which the borrower is no longer actively in school at least half time, and has not received an approved grace, deferment, or forbearance. Regular payment is expected from these borrowers under an allotted payment plan.

Deferment - May be granted up to 48 months for borrowers who have begun the repayment period on their loans but are (1) actively enrolled in an eligible school at least half time, or (2) are actively enrolled in an approved and verifiable medical residency, internship, or fellowship program.

Forbearance - The period of time during which the borrower may postpone making principal and interest payments due to hardship or administrative reasons. Interest continues to accrue on loans during periods of authorized forbearance. If the borrower is delinquent at the time the forbearance is granted, accrued and unpaid interest from the date of delinquency, if any, will be capitalized at the end of the forbearance period. The loan-term will not change and payments may be increased to allow the loan to pay off in the required time frame. A forbearance that results in and insignificant payment delay is not considered a concessionary change in terms, provided the borrower affirms the obligation. Forbearance is not an uncommon status designation; this designation is standard industry practice, and is consistent with a student’s migration to the medical profession. However, additional risk is associated with this designation.

Student Loan Aging

Student loans are generally charged off at the end of the month during which an account becomes 120 days contractually past due. Accrued but unpaid interest related to charged off student loans is reversed and charged against interest income. For the year ended December 31, 2024, $328,000 in accrued interest receivable was reversed due to charge-offs of $2.8 million within the student loan portfolio. For the year ended December 31, 2023, $252,000 in accrued interest receivable was reversed due to charge-offs of $2.6 million within the student loan portfolio.

The following tables summarize the student loan aging for loans in repayment and forbearance as of December 31, 2024 and December 31, 2023:


	December 31, 2024			December 31, 2023
(Dollars in thousands)	Number of Borrowers	Principal Amount		Number of Borrowers	Principal Amount
Current or less than 31 days	185	$	19,737	221	$	25,070
31 - 60 days	9	1,625		6	791
61 - 90 days	7	1,360		2	328
Greater than 90 days	2	421		3	426

Total	203	$	23,143	232	$	26,615