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LOANS

3 Months Ended

Mar. 31, 2026

LOANS

LOANS

4. LOANS

The following table sets forth the classification of the Company’s loans by loan portfolio segment for the periods presented.


(in thousands)	March 31, 2026			December 31, 2025
Residential real estate	$	764,131		$	776,995
Multifamily		550,739			541,083
Commercial real estate		517,983			525,569
Commercial and industrial		147,929			145,591
Construction and land development		11,496			11,081
Consumer		416			430
Total loans		1,992,694			2,000,749
Allowance for credit losses		(19,149)			(18,694)
Total loans, net	$	1,973,545		$	1,982,055

At March 31, 2026 and December 31, 2025, the Company was servicing approximately $370.1 million and $375.6 million, respectively, of loans for others. The Company had $1.3 million and $0 of SBA loans held for sale at March 31, 2026 and December 31, 2025, respectively. The Company had $15.0 million and $6.4 million of residential real estate loans held for sale at March 31, 2026 and December 31, 2025, respectively.

For the three months ended March 31, 2026 and 2025, the Company sold loans totaling approximately $41.5 million and $46.6 million, respectively, recognizing net gains of $1.4 million and $2.4 million, respectively.

The following tables summarize the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2026 and 2025:


		Three Months Ended March 31, 2026
											Commercial			Construction
		Residential						Commercial			and			and Land
		Real Estate			Multifamily			Real Estate			Industrial			Development			Consumer
		Loans			Loans			Loans			Loans			Loans			Loans			Total
(in thousands)
Allowance for credit losses:
Beginning balance		$	5,035		$	3,387		$	5,123		$	4,912		$	215		$	22		$	18,694
Charge-offs			—			—			(22)			(36)			—			—			(58)
Recoveries			—			—			3			10			—			—			13
Provision for credit losses ⁽¹⁾			(19)			506			(255)			263			6			(1)			500
Ending balance		$	5,016		$	3,893		$	4,849		$	5,149		$	221		$	21		$	19,149

(1)	Additional provision related to off-balance sheet exposure was a debit of $30 thousand for the three months ended March 31, 2026.


		Three Months Ended March 31, 2025
											Commercial			Construction
		Residential						Commercial			and			and Land
		Real Estate			Multifamily			Real Estate			Industrial			Development			Consumer
		Loans			Loans			Loans			Loans			Loans			Loans			Total
(in thousands)
Allowance for credit losses:
Beginning balance		$	6,236		$	5,284		$	5,605		$	5,447		$	180		$	27		$	22,779
Charge-offs			—			(33)			(305)			(133)			—			—			(471)
Recoveries			—			—			—			17			—			—			17
Provision for credit losses			315			(252)			79			529			(67)			(4)			600
Ending balance		$	6,551		$	4,999		$	5,379		$	5,860		$	113		$	23		$	22,925

Allowance for Credit Losses on Unfunded Commitments

The Company has recorded an ACL for unfunded credit commitments, which is recorded in other liabilities. The provision for credit losses on unfunded commitments is recorded within the provision for credit losses on the Company’s income statement. The following table presents the allowance for credit losses for unfunded commitments for the three months ended March 31, 2026 and 2025:


		Three Months Ended March 31,
(in thousands)		2026			2025
Balance at beginning of period		$	626		$	314
Provision for credit losses			30			—
Balance at end of period		$	656		$	314

The table below presents the provision for credit losses on loans and unfunded commitments for the three months ended March 31, 2026 and 2025:


		Three Months Ended March 31,
(in thousands)		2026			2025
Provision for credit losses - loans		$	500		$	600
Provision for credit losses - unfunded commitments			30			—
Provision for credit losses		$	530		$	600

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of March 31, 2026 and December 31, 2025:


		March 31, 2026
		Nonaccrual						Loans Past
		With No						Due Over
		Allowance						89 Days
(in thousands)		for Credit Loss			Nonaccrual			Still Accruing
Residential real estate		$	4,502		$	4,502		$	—
Multifamily			—			446			—
Commercial real estate			10,560			10,839			—
Commercial and industrial			1,466			8,799			—
Construction and land development			—			—			—
Consumer			—			—			—
Total		$	16,528		$	24,586		$	—


		December 31, 2025
		Nonaccrual						Loans Past
		With No						Due Over
		Allowance						89 Days
(in thousands)		for Credit Loss			Nonaccrual			Still Accruing
Residential real estate		$	4,524		$	4,524		$	—
Multifamily			—			449			—
Commercial real estate			6,053			7,261			—
Commercial and industrial			1,527			9,370			—
Construction and land development			—			—			—
Consumer			—			—			—
Total		$	12,104		$	21,604		$	—

The Company recognized $604 thousand and $27 thousand of interest income on nonaccrual loans during the three months ended March 31, 2026 and 2025, respectively.

Individually Analyzed Loans

The Company analyzes loans on an individual basis when management has determined that the loan no longer exhibits risk characteristics consistent with the risk characteristics existing in its designed pool of loans, under the Company’s CECL methodology. Loans individually analyzed include certain nonaccrual loans.

As of March 31, 2026 and December 31, 2025, the amortized cost basis of individually analyzed loans amounted to $24.6 million and $17.2 million, respectively, of which $23.7 million and $16.4 million were considered collateral dependent. For collateral dependent loans where foreclosure is probable or the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the ACL is measured based on the difference between the fair value of the collateral adjusted for sales costs and the amortized cost basis of the loan, at measurement date. Certain assets held as collateral may be exposed to future deterioration in fair value, particularly due to changes in real estate markets or usage.

The following tables present the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent as of March 31, 2026 and December 31, 2025.


		March 31, 2026
(in thousands)		Amortized Cost Basis			Related Allowance

Residential real estate ⁽¹⁾		$	4,502		$	—
Multifamily⁽²⁾			446			64
Commercial real estate ⁽²⁾			10,583			—
Commercial and industrial ^{(1) (2) (3)}			8,166			1,605
Total		$	23,697		$	1,669

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

(3)	Secured by business assets


		December 31, 2025
(in thousands)		Amortized Cost Basis			Related Allowance

Residential real estate ⁽¹⁾		$	4,320		$	—
Multifamily⁽²⁾			442			64
Commercial real estate ⁽²⁾			3,420			135
Commercial and industrial ^{(1) (2) (3)}			8,239			1,371
Total		$	16,421		$	1,570

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

(3)	Secured by business assets

The following tables present the aging of the amortized cost basis in past due loans as of March 31, 2026 and December 31, 2025 by class of loans:


(in thousands)		30 - 59			60 - 89			Greater than
		Days			Days			89 Days			Total			Loans Not
March 31, 2026		Past Due			Past Due			Past Due			Past Due			Past Due			Total
Residential real estate		$	8,928		$	643		$	3,469		$	13,040		$	751,091		$	764,131
Multifamily			3,378			1,593			447			5,418			545,321			550,739
Commercial real estate			1,882			2,129			9,755			13,766			504,217			517,983
Commercial and industrial			1,119			1,893			8,041			11,053			136,876			147,929
Construction and land development			—			—			—			—			11,496			11,496
Consumer			—			—			—			—			416			416
Total		$	15,307		$	6,258		$	21,712		$	43,277		$	1,949,417		$	1,992,694


(in thousands)		30 - 59			60 - 89			Greater than
		Days			Days			89 Days			Total			Loans Not
December 31, 2025		Past Due			Past Due			Past Due			Past Due			Past Due			Total
Residential real estate		$	9,400		$	2,917		$	2,963		$	15,280		$	761,715		$	776,995
Multifamily			1,413			856			449			2,718			538,365			541,083
Commercial real estate			2,602			5,151			6,114			13,867			511,702			525,569
Commercial and industrial			8,328			688			2,691			11,707			133,884			145,591
Construction and land development			—			—			—			—			11,081			11,081
Consumer			—			—			—			—			430			430
Total		$	21,743		$	9,612		$	12,217		$	43,572		$	1,957,177		$	2,000,749

The Company may occasionally make modifications to loans where the borrower is considered to be in financial distress. Types of modifications include principal reductions, significant payment delays, term extensions, interest rate reductions or a combination thereof. The amount of principal reduction is charged-off against the allowance for credit losses. The Company did not have any loans that were both experiencing difficulties and modified during the three months ended March 31, 2025.

The following tables present the amortized cost basis of loans that were both experiencing financial difficulty and modified during the three months ended March 31, 2026, by class and 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 cost basis of each class of financing receivable is also presented below.

Three Months Ended March 31, 2026

% of

Total

Interest

Class of

 

Principal

Payment

Term

Rate

Financing

(in thousands)

Reduction

Delay

Extension

Reduction

Combination

Receivable

Commercial and industrial

$

—

$

1,215

$

—

$

—

$

—

0.82

%

The Company had no commitment to lend additional funds to borrowers for which modifications described above were made during the three months ended March 31, 2026.

The Company 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:

Three Months Ended March 31, 2026

30 - 59

60 - 89

Greater than

Days

Days

89 Days

Total

(in thousands)

Past Due

Past Due

Past Due

Past Due

Commercial and industrial

$

306

$

—

$

—

$

306

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2026:


		Three Months Ended March 31, 2026
								Weighted
								Average
								Term
		Principal			Payment			Extension
(in thousands)		Reduction			Delay			(in months)
Commercial and industrial		$	—		$	82		—

Upon the Company’s determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. During the three months ended March 31, 2026, no loans that were modified to borrowers experiencing financial difficulty had a payment default within twelve months of modification.

Credit Quality Indicators:

The Company has adopted a credit risk rating system as part of the risk assessment of its loan portfolio. The Company’s lending officers are required to assign a credit risk rating to each loan in their portfolio at origination. When the lender learns of important financial developments, the risk rating is reviewed and adjusted if necessary. In addition, the Company engages a third-party independent loan reviewer that performs semi-annual reviews of a sample of loans, validating the credit risk ratings assigned to such loans. The credit risk ratings play an important role in the establishment of the loan loss provision and to confirm the adequacy of the allowance for credit losses.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings:

Special Mention: The loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects for the asset or in the Company’s credit position at some future date.

Substandard: The loan is inadequately protected by current sound worth and paying capacity of the obligor or collateral pledged, if any. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: The loan has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing factors, conditions, and values, highly questionable and improbable.

Loans not having a credit risk rating of Special Mention, Substandard or Doubtful are considered pass loans.

The following table summarizes the Company’s loans by year of origination and internally assigned credit risk at March 31, 2026 and gross charge-offs for the three months ended March 31, 2026:


																							Revolving
		Term Loans Amortized Cost by Origination Year																		Revolving			Loans to
(in thousands)		2026			2025			2024			2023			2022			Prior			Loans			Term Loans			Total
Residential real estate ⁽¹⁾
Pass		$	12,611			140,041			74,986			156,034			171,901			173,107		$	—		$	26,439		$	755,119
Special Mention			—			—			—			—			1,178			2,626			—			—			3,804
Substandard			—			1,134			363			—			—			3,375			—			—			4,872
Total Residential real estate			12,611			141,175			75,349			156,034			173,079			179,108			—			26,439			763,795
Current period gross charge-offs		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Multifamily
Pass			14,044			25,296			2,725			3,328			272,676			230,630			—			—			548,699
Special Mention			—			—			—			—			—			740			—			—			740
Substandard			—			—			—			—			—			1,300			—			—			1,300
Total Multifamily			14,044			25,296			2,725			3,328			272,676			232,670			—			—			550,739
Current period gross charge-offs			—			—			—			—			—			—			—			—			—

Commercial real estate
Pass			11,319			67,429			53,510			59,119			155,347			145,052			—			—			491,776
Special Mention			—			1,150			1,628			—			2,054			3,097			—			—			7,929
Substandard			—			—			9,813			1,019			—			7,446			—			—			18,278
Total Commercial real estate			11,319			68,579			64,951			60,138			157,401			155,595			—			—			517,983
Current period gross charge-offs			—			—			—			22			—			—			—			—			22

Commercial and industrial
Pass			4,636			38,955			29,310			44,533			7,281			6,521			—			—			131,236
Special Mention			—			42			1,137			5,065			—			1,224			—			—			7,468
Substandard			—			—			585			7,097			471			1,072			—			—			9,225
Total Commercial and industrial			4,636			38,997			31,032			56,695			7,752			8,817			—			—			147,929
Current period gross charge-offs			—			—			14			22			—			—			—			—			36

Construction and land development
Pass			369			5,912			1,457			—			—			—			—			—			7,738
Special Mention			—			—			—			—			—			3,758			—			—			3,758
Substandard			—			—			—			—			—			—			—			—			—
Total Construction and land development			369			5,912			1,457			—			—			3,758			—			—			11,496
Current period gross charge-offs			—			—			—			—			—			—			—			—			—

Consumer
Pass			—			38			120			203			55			—			—			—			416
Special Mention			—			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			—			—			—			—
Total Consumer			—			38			120			203			55			—			—			—			416
Current period gross charge-offs			—			—			—			—			—			—			—			—			—

Total Loans		$	42,979		$	279,997		$	175,634		$	276,398		$	610,963		$	579,948		$	—		$	26,439		$	1,992,358

Total Gross charge-offs		$	—		$	—		$	14		$	44		$	—		$	—		$	—		$	—		$	58

(1)

Certain fixed rate residential mortgage loans are included in a fair value hedging relationship. The amortized cost excludes a contra asset of $336,000 related to basis adjustments for loans in the closed portfolio under the portfolio layer method at March 31, 2026. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was de-designated. See “Note 10 – Derivatives” for more information on the fair value hedge.

The following table summarizes the Company’s loans by year of origination and internally assigned credit risk at December 31, 2025:


																							Revolving
		Term Loans Amortized Cost by Origination Year																		Revolving			Loans to
(in thousands)		2025			2024			2023			2022			2021			Prior			Loans			Term Loans			Total
Residential real estate ⁽¹⁾
Pass		$	141,755		$	77,692		$	161,707		$	176,313		$	50,906		$	133,911		$	—		$	25,459		$	767,743
Special Mention			—			—			—			1,184			1,185			1,449			—			—			3,818
Substandard			1,136			376			—			—			—			3,383			—			—			4,895
Total Residential real estate			142,891			78,068			161,707			177,497			52,091			138,743			—			25,459			776,456

Multifamily
Pass			25,386			2,734			3,343			274,404			154,614			80,153			—			—			540,634
Special Mention			—			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			449			—			—			449
Total Multifamily			25,386			2,734			3,343			274,404			154,614			80,602			—			—			541,083

Commercial real estate
Pass			65,373			62,277			59,357			156,010			56,447			100,094			—			—			499,558
Special Mention			1,182			4,967			—			2,054			7,473			2,385			—			—			18,061
Substandard			—			5,563			1,699			—			—			688			—			—			7,950
Total Commercial real estate			66,555			72,807			61,056			158,064			63,920			103,167			—			—			525,569

Commercial and industrial
Pass			39,132			27,187			46,472			7,210			5,015			3,368			—			—			128,384
Special Mention			—			1,428			5,083			—			939			317			—			—			7,767
Substandard			—			114			7,772			477			237			840			—			—			9,440
Total Commercial and industrial			39,132			28,729			59,327			7,687			6,191			4,525			—			—			145,591

Construction and land development
Pass			5,855			1,463			—			—			—			—			—			—			7,318
Special Mention			—			—			—			—			3,763			—			—			—			3,763
Substandard			—			—			—			—			—			—			—			—			—
Total Construction and land development			5,855			1,463			—			—			3,763			—			—			—			11,081

Consumer
Pass			39			124			209			58			—			—			—			—			430
Special Mention			—			—			—			—			—			—			—			—			—
Substandard			—			—			—			—			—			—			—			—			—
Total Consumer			39			124			209			58			—			—			—			—			430

Total Loans		$	279,858		$	183,925		$	285,642		$	617,710		$	280,579		$	327,037		$	—		$	25,459		$	2,000,210

(1)

Certain fixed rate residential mortgage loans are included in a fair value hedging relationship. The amortized cost excludes a contra asset of $539,000 related to basis adjustments for loans in the closed portfolio under the portfolio layer method at December 31, 2025. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was de-designated. See “Note 10 – Derivatives” for more information on the fair value hedge.