| Allowance for Credit Losses | Allowance for Credit Losses In accordance with Accounting Standards Codification (“ASC”) 326, the Company is required to measure the allowance for credit losses of financial assets with similar risk characteristics on a collective or pooled basis. In considering the segmentation of financial assets measured at amortized cost into pools, the Company considered various risk characteristics in its analysis. Generally, the segmentation utilized represents the level at which the Company develops and documents its systematic methodology to determine the allowance for credit losses for the financial assets held at amortized cost, specifically the Company's loan portfolio and debt securities classified as held-to-maturity. Descriptions of the Company’s loan portfolio segments and major debt security types are included in Note (5) “Allowance for Credit Losses” of the 2023 Form 10-K. In accordance with ASC 326, the Company elected to not measure an allowance for credit losses on accrued interest. As such accrued interest is written off in a timely manner when deemed uncollectible. Any such write-off of accrued interest will reverse previously recognized interest income. In addition, the Company elected to not include accrued interest within presentation and disclosures of the carrying amount of financial assets held at amortized cost. This election is applicable to the various disclosures included within the Company's financial statements. Accrued interest related to financial assets held at amortized cost is included within accrued interest receivable and other assets The tables below show the aging of the Company’s loan portfolio by the segmentation noted above at September 30, 2024, December 31, 2023 and September 30, 2023: As of September 30, 2024 90+ days and still accruing 60-89 days past due 30-59 days past due (In thousands) Nonaccrual Current Total Loans Loan Balances (includes PCD): Commercial Commercial, industrial and other $ 63,826 $ 20 $ 32,560 $ 46,057 $ 15,105,230 $ 15,247,693 Commercial real estate Construction and development 2,284 — 757 1,798 2,398,851 2,403,690 Non-construction 39,787 225 12,682 46,548 10,290,485 10,389,727 Home equity 1,122 — 1,035 2,580 422,306 427,043 Residential real estate, excluding early buy-out loans 17,959 — 6,364 2,160 3,226,166 3,252,649 Premium finance receivables Property and casualty insurance loans 36,079 18,235 18,740 30,204 7,028,423 7,131,681 Life insurance loans — — 10,902 74,432 7,911,565 7,996,899 Consumer and other 2 148 22 264 82,240 82,676 Total loans, net of unearned income, excluding early buy-out loans $ 161,059 $ 18,628 $ 83,062 $ 204,043 $ 46,465,266 $ 46,932,058 Early buy-out loans guaranteed by U.S. government agencies (1) — 43,358 150 — 91,881 135,389 Total loans, net of unearned income $ 161,059 $ 61,986 $ 83,212 $ 204,043 $ 46,557,147 $ 47,067,447 As of December 31, 2023 90+ days and still accruing 60-89 days past due 30-59 days past due (In thousands) Nonaccrual Current Total Loans Loan Balances (includes PCD): Commercial Commercial, industrial and other $ 38,940 $ 98 $ 19,488 $ 85,743 $ 12,687,784 $ 12,832,053 Commercial real estate Construction and development 2,205 — 251 1,343 2,080,242 2,084,041 Non-construction 33,254 — 8,264 19,291 9,199,314 9,260,123 Home equity 1,341 — 62 2,263 340,310 343,976 Residential real estate, excluding early buy-out loans 15,391 — 2,325 22,942 2,578,425 2,619,083 Premium finance receivables Property and casualty insurance loans 27,590 20,135 23,236 50,437 6,782,131 6,903,529 Life insurance loans — — 16,206 45,464 7,816,273 7,877,943 Consumer and other 22 54 25 165 60,234 60,500 Total loans, net of unearned income, excluding early buy-out loans $ 118,743 $ 20,287 $ 69,857 $ 227,648 $ 41,544,713 $ 41,981,248 Early buy-out loans guaranteed by U.S. government agencies (1) — 57,688 250 328 92,317 150,583 Total loans, net of unearned income $ 118,743 $ 77,975 $ 70,107 $ 227,976 $ 41,637,030 $ 42,131,831 (1) Early buy-out loans are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans. As of September 30, 2023 90+ days and still accruing 60-89 days past due 30-59 days past due (In thousands) Nonaccrual Current Total Loans Loan Balances (includes PCD): Commercial Commercial, industrial and other $ 43,569 $ 200 $ 22,889 $ 35,681 $ 12,623,134 $ 12,725,473 Commercial real estate Construction and development 8,384 — 2,438 31,292 1,851,659 1,893,773 Non-construction 8,659 1,092 4,957 29,692 9,008,007 9,052,407 Home equity 1,363 — 219 1,668 340,008 343,258 Residential real estate, excluding early buy-out loans 16,103 — 1,145 904 2,520,478 2,538,630 Premium finance receivables Property and casualty insurance loans 26,756 16,253 16,552 31,919 6,631,267 6,722,747 Life insurance loans — 10,679 41,894 14,972 7,864,263 7,931,808 Consumer and other 16 27 196 519 68,205 68,963 Total loans, net of unearned income, excluding early buy-out loans $ 104,850 $ 28,251 $ 90,290 $ 146,647 $ 40,907,021 $ 41,277,059 Early buy-out loans guaranteed by U.S. government agencies (1) 117 57,558 2,116 — 109,182 168,973 Total loans, net of unearned income $ 104,967 $ 85,809 $ 92,406 $ 146,647 $ 41,016,203 $ 41,446,032 (1) Early buy-out loans are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans. Credit Quality Indicators Credit quality indicators, specifically the Company's internal risk rating systems, reflect how the Company monitors credit losses and represents factors used by the Company when measuring the allowance for credit losses. Descriptions of the Company’s credit quality indicators by financial asset are included in Note (5) “Allowance for Credit Losses” of the 2023 Form 10-K. The table below shows the Company’s loan portfolio by credit quality indicator and year of origination at September 30, 2024: Year of Origination Revolving Total (In thousands) 2024 2023 2022 2021 2020 Prior Revolving to Term Loans Loan Balances: Commercial, industrial and other Pass $ 2,460,772 $ 2,366,998 $ 1,841,838 $ 1,219,759 $ 463,726 $ 1,115,942 $ 5,053,494 $ 13,568 $ 14,536,097 Special mention 6,148 68,788 72,908 80,229 13,257 17,456 164,169 1,474 424,429 Substandard accrual 3,789 47,800 42,374 29,408 7,256 13,029 79,030 655 223,341 Substandard nonaccrual/doubtful 500 5,536 6,980 9,331 1,084 8,547 31,619 229 63,826 Total commercial, industrial and other $ 2,471,209 $ 2,489,122 $ 1,964,100 $ 1,338,727 $ 485,323 $ 1,154,974 $ 5,328,312 $ 15,926 $ 15,247,693 Construction and development Pass $ 196,556 $ 573,342 $ 965,654 $ 289,324 $ 95,193 $ 149,561 $ 17,560 $ — $ 2,287,190 Special mention — 417 14,990 — — 14,794 3,780 — 33,981 Substandard accrual — 757 18,999 1,102 1,777 57,600 — — 80,235 Substandard nonaccrual/doubtful — 251 — — 2,033 — — — 2,284 Total construction and development $ 196,556 $ 574,767 $ 999,643 $ 290,426 $ 99,003 $ 221,955 $ 21,340 $ — $ 2,403,690 Non-construction Pass $ 1,078,671 $ 1,527,560 $ 1,934,856 $ 1,460,051 $ 933,785 $ 2,929,344 $ 217,237 $ 2,144 $ 10,083,648 Special mention 3,613 13,006 29,415 35,222 5,298 51,144 1,688 — 139,386 Substandard accrual 158 3,876 14,103 31,573 29,718 47,478 — — 126,906 Substandard nonaccrual/doubtful — 1,173 453 586 — 37,575 — — 39,787 Total non-construction $ 1,082,442 $ 1,545,615 $ 1,978,827 $ 1,527,432 $ 968,801 $ 3,065,541 $ 218,925 $ 2,144 $ 10,389,727 Home equity Pass $ 70 $ — $ 45 $ 175 $ — $ 6,771 $ 398,843 $ 4,608 $ 410,512 Special mention — 48 220 59 119 2,871 6,172 454 9,943 Substandard accrual — 16 — — 57 4,836 541 16 5,466 Substandard nonaccrual/doubtful — — 497 135 — 402 — 88 1,122 Total home equity $ 70 $ 64 $ 762 $ 369 $ 176 $ 14,880 $ 405,556 $ 5,166 $ 427,043 Residential real estate Early buy-out loans guaranteed by U.S. government agencies $ — $ 4,594 $ 3,743 $ 3,759 $ 5,206 $ 118,087 $ — $ — $ 135,389 Pass 584,491 535,419 834,543 774,793 211,510 258,425 — — 3,199,181 Special mention 250 2,846 9,093 2,063 577 9,928 — — 24,757 Substandard accrual 24 585 3,401 906 1,122 4,714 — — 10,752 Substandard nonaccrual/doubtful 160 1,073 4,436 4,624 1,227 6,439 — — 17,959 Total residential real estate $ 584,925 $ 544,517 $ 855,216 $ 786,145 $ 219,642 $ 397,593 $ — $ — $ 3,388,038 Premium finance receivables - property and casualty Pass $ 6,827,867 $ 169,649 $ — $ 6,351 $ 71 $ — $ — $ — $ 7,003,938 Special mention 85,094 3,442 64 2 — — — — 88,602 Substandard accrual 1,749 1,308 1 4 — — — — 3,062 Substandard nonaccrual/doubtful 18,543 17,249 274 12 1 — — — 36,079 Total premium finance receivables - property and casualty $ 6,933,253 $ 191,648 $ 339 $ 6,369 $ 72 $ — $ — $ — $ 7,131,681 Premium finance receivables - life Pass $ 1,232,306 $ 6,740,906 $ 3,929 $ — $ — $ — $ — $ — $ 7,977,141 Special mention — 8,188 — — — — — — 8,188 Substandard accrual 7,514 4,056 — — — — — — 11,570 Substandard nonaccrual/doubtful — — — — — — — — — Total premium finance receivables - life $ 1,239,820 $ 6,753,150 $ 3,929 $ — $ — $ — $ — $ — $ 7,996,899 Consumer and other Pass $ 3,319 $ 3,545 $ 839 $ 983 $ 88 $ 16,145 $ 57,448 $ — $ 82,367 Special mention 17 9 8 5 — 136 6 — 181 Substandard accrual — 4 87 — — 26 9 — 126 Substandard nonaccrual/doubtful — — 1 1 — — — — 2 Total consumer and other $ 3,336 $ 3,558 $ 935 $ 989 $ 88 $ 16,307 $ 57,463 $ — $ 82,676 Total loans Early buy-out loans guaranteed by U.S. government agencies $ — $ 4,594 $ 3,743 $ 3,759 $ 5,206 $ 118,087 $ — $ — $ 135,389 Pass 12,384,052 11,917,419 5,581,704 3,751,436 1,704,373 4,476,188 5,744,582 20,320 45,580,074 Special mention 95,122 96,744 126,698 117,580 19,251 96,329 175,815 1,928 729,467 Substandard accrual 13,234 58,402 78,965 62,993 39,930 127,683 79,580 671 461,458 Substandard nonaccrual/doubtful 19,203 25,282 12,641 14,689 4,345 52,963 31,619 317 161,059 Total loans $ 12,511,611 $ 12,102,441 $ 5,803,751 $ 3,950,457 $ 1,773,105 $ 4,871,250 $ 6,031,596 $ 23,236 $ 47,067,447 Gross write offs Nine months ended September 30, 2024 8,223 30,985 5,797 20,094 2,206 22,310 — — 89,615 Held-to-maturity debt securities The Company conducts an assessment of its investment securities, including those classified as held-to-maturity, at the time of purchase and on at least an annual basis to ensure such investment securities remain within appropriate levels of risk and continue to perform satisfactorily in fulfilling its obligations. The Company considers, among other factors, the nature of the securities and credit ratings or financial condition of the issuer. If available, the Company obtains a credit rating for issuers from a Nationally Recognized Statistical Rating Organization (“NRSRO”) for consideration. If no such rating is available for an issuer, the Company performs an internal rating based on the scale utilized within the loan portfolio as discussed above. For purposes of the table below, the Company has converted any issuer rating from an NRSRO into the Company’s internal ratings based on Investment Policy and review by the Company’s management. As of September 30, 2024 Year of Origination Total (In thousands) 2024 2023 2022 2021 2020 Prior Balance Amortized Cost Balances: U.S. government agencies 1-4 internal grade $ — $ — $ 135,000 $ 147,818 $ 25,000 $ 6,760 $ 314,578 5-7 internal grade — 8-10 internal grade — Total U.S. government agencies $ — $ — $ 135,000 $ 147,818 $ 25,000 $ 6,760 $ 314,578 Municipal 1-4 internal grade $ — $ 4,176 $ 1,034 $ 6,839 $ 258 $ 150,481 $ 162,788 5-7 internal grade — — — — — 2,353 2,353 8-10 internal grade — Total municipal $ — $ 4,176 $ 1,034 $ 6,839 $ 258 $ 152,834 $ 165,141 Mortgage-backed securities 1-4 internal grade $ — $ 352,905 $ 544,887 $ 2,243,363 $ — $ — $ 3,141,155 5-7 internal grade — 8-10 internal grade — Total mortgage-backed securities $ — $ 352,905 $ 544,887 $ 2,243,363 $ — $ — $ 3,141,155 Corporate notes 1-4 internal grade $ — $ — $ 14,968 $ — $ 6,005 $ 36,052 $ 57,025 5-7 internal grade — 8-10 internal grade — Total corporate notes $ — $ — $ 14,968 $ — $ 6,005 $ 36,052 $ 57,025 Total held-to-maturity securities $ 3,677,899 Less: Allowance for credit losses (479) Held-to-maturity securities, net of allowance for credit losses $ 3,677,420 Measurement of Allowance for Credit Losses The Company's allowance for credit losses consists of the allowance for loan losses, the allowance for unfunded commitment losses and the allowance for held-to-maturity debt security losses. In accordance with ASC 326, the Company measures the allowance for credit losses at the time of origination or purchase of a financial asset, representing an estimate of lifetime expected credit losses on the related asset. When developing its estimate, the Company considers available information relevant to assessing the collectability of cash flows, from both internal and external sources. Historical credit loss experience is one input in the estimation process as well as inputs relevant to current conditions and reasonable and supportable forecasts. In considering past events, the Company considers the relevance, or lack thereof, of historical information due to changes in such things as financial asset underwriting or collection practices, and changes in portfolio mix due to changing business plans and strategies. In considering current conditions and forecasts, the Company considers both the current economic environment and the forecasted direction of the economic environment with emphasis on those factors deemed relevant to or driving changes in expected credit losses. As significant judgment is required, the review of the appropriateness of the allowance for credit losses is performed quarterly by various committees with participation by the Company's executive management. September 30, December 31, September 30, (In thousands) 2024 2023 2023 Allowance for loan losses $ 360,279 $ 344,235 $ 315,039 Allowance for unfunded lending-related commitments losses 75,435 83,030 84,111 Allowance for loan losses and unfunded lending-related commitments losses 435,714 427,265 399,150 Allowance for held-to-maturity securities losses 479 347 381 Allowance for credit losses $ 436,193 $ 427,612 $ 399,531 The allowance for credit losses is measured on a collective or pooled basis when similar risk characteristics exist, based upon the segmentation discussed above. The Company utilizes modeling methodologies that estimate lifetime credit loss rates on each pool, including methodologies estimating the probability of default and loss given default on specific segments. Historical credit loss history is adjusted for reasonable and supportable forecasts developed by the Company on a quantitative or qualitative basis and incorporates third party economic forecasts. Reasonable and supportable forecasts consider the macroeconomic factors that are most relevant to evaluating and predicting expected credit losses in the Company's financial assets. Currently, the Company utilizes an eight quarter forecast period using a single macroeconomic scenario provided by a third party and reviewed within the Company's governance structure. For periods beyond the ability to develop reasonable and supportable forecasts, the Company reverts to historical loss rates at an input level, straight-line over a four quarter reversion period. Expected credit losses are measured over the contractual term of the financial asset with consideration of expected prepayments. Expected extensions, renewals or modifications of the financial asset are considered when the expected extension, renewal or modification is contained within the existing agreement and is not unconditionally cancelable. The methodologies discussed above are applied to both current asset balances on the Company's Consolidated Statements of Condition and off-balance sheet commitments (i.e. unfunded lending-related commitments). Assets that do not share similar risk characteristics with a pool are assessed for the allowance for credit losses on an individual basis. These typically include assets experiencing financial difficulties, including assets rated as substandard nonaccrual and doubtful. If foreclosure is probable or the asset is considered collateral-dependent, expected credit losses are measured based upon the fair value of the underlying collateral adjusted for selling costs, if appropriate. Underlying collateral across the Company's segments consist primarily of real estate, land and construction assets as well as general business assets of the borrower. As of September 30, 2024, excluding loans carried at fair value, substandard nonaccrual loans totaling $62.7 million in carrying balance had no related allowance for credit losses. The Company does not measure an allowance for credit losses on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when assets are placed on nonaccrual status. Loan portfolios A summary of activity in the allowance for credit losses, specifically for the loan portfolio (i.e. allowance for loan losses and allowance for unfunded commitment losses), for the three and nine months ended September 30, 2024 and September 30, 2023 is as follows: Three months ended September 30, 2024 Commercial Real Estate Home Equity Residential Real Estate Premium Finance Receivables Consumer and Other Total Loans (In thousands) Commercial Allowance for credit losses at beginning of period $ 181,991 $ 223,728 $ 7,242 $ 8,773 $ 14,746 $ 589 $ 437,069 Other adjustments — — — — 30 — 30 Charge-offs (22,975) (95) — — (7,794) (154) (31,018) Recoveries 649 30 101 5 3,477 21 4,283 Provision for credit losses - Other 7,128 (4,162) 134 268 3,284 147 6,799 Provision for credit losses - Day 1 on non-PCD assets acquired 2,967 10,540 1,344 638 — 58 15,547 Initial allowance for credit losses recognized on PCD assets acquired during the period 1,838 1,103 2 61 — — 3,004 Allowance for credit losses at period end $ 171,598 $ 231,144 $ 8,823 $ 9,745 $ 13,743 $ 661 $ 435,714 By measurement method: Individually measured $ 21,573 $ 5,958 $ 50 $ 48 $ — $ 1 $ 27,630 Collectively measured 150,025 225,186 8,773 9,697 13,743 660 408,084 Loans at period end Individually measured $ 63,826 $ 42,071 $ 1,122 $ 17,565 $ — $ 2 $ 124,586 Collectively measured 15,183,867 12,751,346 425,921 3,232,435 15,128,580 82,674 46,804,823 Loans held at fair value — — — 138,038 — — 138,038 Three months ended September 30, 2023 Commercial Commercial Real Estate Home Equity Residential Real Estate Premium Finance Receivables Consumer and Other Total Loans (In thousands) Allowance for credit losses at beginning of period $ 143,142 $ 215,696 $ 6,967 $ 12,252 $ 9,046 $ 277 $ 387,380 Other adjustments — — — — (60) — (60) Charge-offs (2,427) (1,713) (227) (78) (5,848) (184) (10,477) Recoveries 1,162 243 33 1 906 14 2,359 Provision for credit losses 9,611 1,492 307 484 7,776 278 19,948 Allowance for credit losses at period end $ 151,488 $ 215,718 $ 7,080 $ 12,659 $ 11,820 $ 385 $ 399,150 By measurement method: Individually measured $ 9,773 $ 5,408 $ — $ 109 $ — $ 12 $ 15,302 Collectively measured 141,715 210,310 7,080 12,550 11,820 373 383,848 Loans at period end Individually measured $ 43,569 $ 17,043 $ 1,363 $ 15,946 $ — $ 16 $ 77,937 Collectively measured 12,681,904 10,929,137 341,895 2,520,479 14,654,555 68,947 41,196,917 Loans held at fair value — — — 171,178 — — 171,178 Nine months ended September 30, 2024 Commercial Real Estate Home Equity Residential Real Estate Premium Finance Receivables Consumer and Other Total Loans (In thousands) Commercial Allowance for credit losses at beginning of period $ 169,604 $ 223,853 $ 7,116 $ 13,133 $ 13,069 $ 490 $ 427,265 Other adjustments — — — — (20) — (20) Charge-offs (43,774) (21,090) (74) (61) (24,218) (398) (89,615) Recoveries 2,078 151 165 15 8,667 68 11,144 Provision for credit losses - Other 38,885 16,587 270 (4,041) 16,245 443 68,389 Provision for credit losses - Day 1 on non-PCD assets acquired 2,967 10,540 1,344 638 — 58 15,547 Initial allowance for credit losses recognized on PCD assets acquired during the period 1,838 1,103 2 61 — — 3,004 Allowance for credit losses at period end $ 171,598 $ 231,144 $ 8,823 $ 9,745 $ 13,743 $ 661 $ 435,714 Nine months ended September 30, 2023 Commercial Real Estate Home Equity Residential Real Estate Premium Finance Receivables Consumer and Other Total Loans (In thousands) Commercial Allowance for credit losses at beginning of period $ 142,769 $ 184,352 $ 7,573 $ 11,585 $ 10,671 $ 498 $ 357,448 Cumulative effect adjustment from the adoption of ASU 2016-13 111 1,356 (33) (692) — (1) 741 Other adjustments — — — — (15) — (15) Charge-offs (10,599) (9,842) (227) (78) (15,151) (447) (36,344) Recoveries 2,059 368 105 11 3,119 69 5,731 Provision for credit losses 17,148 39,484 (338) 1,833 13,196 266 71,589 Allowance for credit losses at period end $ 151,488 $ 215,718 $ 7,080 $ 12,659 $ 11,820 $ 385 $ 399,150 For the three and nine months ended September 30, 2024, the Company recognized approximately $22.3 million and $83.9 million of provision for credit losses, respectively, related to loans and lending agreements, which includes $15.5 million of Day 1 provision related to the acquisition of Macatawa. The provision for each period was primarily the result of losses experienced in the Commercial, Commercial Real Estate and Premium Finance Receivables portfolios along with growth across various segments, which was offset by improved macroeconomic forecasts related to Baa Credit Spread and CRE Price Index. Uncertainties remain regarding expected economic performance and macroeconomic forecasts utilized in the measurement of the allowance for credit losses as of September 30, 2024. Net charge-offs in the three and nine month periods ended September 30, 2024, totaled $26.7 million and $78.5 million, respectively. Held-to-maturity debt securities The allowance for credit losses on the Company’s held-to-maturity debt securities is presented as a reduction to the amortized cost basis of held-to-maturity securities on the Company's Consolidated Statements of Condition. For the three and nine month period ended September 30, 2024, the Company recognized approximately $(12,000) and $132,000, respectively, of provision for credit losses related to held-to-maturity securities. At September 30, 2024, the Company did not identify any held-to-maturity debt securities within its portfolio that would require a charge-off. Loan Modifications to Borrowers Experiencing Financial Difficulties The Company’s approach to restructuring or modifying loans is built on its credit risk rating system, which requires credit management personnel to assign a credit risk rating to each loan. In each case, the loan officer is responsible for recommending a credit risk rating for each loan and ensuring the credit risk ratings are appropriate. These credit risk ratings are then reviewed and approved by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors, including a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s credit risk rating scale is one through ten with higher scores indicating higher risk. In the case of loans rated six or worse following modification, the Company’s Managed Assets Division evaluates the loan and the credit risk rating and determines that the loan has been restructured to be reasonably assured of repayment and of performance according to the modified terms and is supported by a current, well-documented credit assessment of the borrower’s financial condition and prospects for repayment under the revised terms. Based on the Company’s credit risk rating system, it considers that borrowers whose credit risk rating is 5 or better are not experiencing financial difficulties. Restructurings may arise when, due to financial difficulties experienced by the borrower, the Company obtains through physical possession one or more collateral assets in satisfaction of all or part of an existing credit. Once possession is obtained, the Company reclassifies the appropriate portion of the remaining balance of the credit from loans to other real estate owned (“OREO”), which is included within other assets in the Consolidated Statements of Condition. For any residential real estate property collateralizing a consumer mortgage loan, the Company is considered to possess the related collateral only if legal title is obtained upon completion of foreclosure, or the borrower conveys all interest in the residential real estate property to the Company through completion of a deed in lieu of foreclosure or similar legal agreement. At September 30, 2024, the Company had no foreclosed residential real estate properties included within OREO. Further, the recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $40.4 million and $55.1 million at September 30, 2024 and 2023, respectively. The tables below presents a summary of the period-end balance of loans to borrowers experiencing financial difficulties during the three and nine months ended September 30, 2024 and 2023: Three Months Ended September 30, 2024 (Dollars in thousands) Total Percentage of Total Class of Loan Extension of Term Reduction of Interest Only Delay in Contractual Payments Extension of Term and Reduction of Interest Rate Commercial Commercial, industrial and other $ 1,469 0.0 % $ 1,240 $ 42 $ 17 $ — $ 170 Commercial real estate Non-construction 192 0.0 192 — — — — Home equity — — — — — — — Residential real estate — — — — — — — Premium Finance Receivables Property and casualty insurance loans 1,548 0.0 30 1,457 — — 61 Total loans $ 3,209 0.0 % $ 1,462 $ 1,499 $ 17 $ — $ 231 Weighted Average Magnitude of Modifications: Three Months Ended September 30, 2024 (Dollars in thousands) Total Duration of Extension of Term (months) Reduction of Duration of Delay in Contractual Payments (months) Commercial Commercial, industrial and other $ 1,469 27 — — Commercial real estate Non-construction 192 6 — — Home equity — $ — — — Residential real estate — $ — — — Premium finance receivables Property and casualty insurance loans 1,548 4 — — Total loans $ 3,209 9 — — Three Months Ended September 30, 2023 (Dollars in thousands) Total Percentage of Total Class of Loan Extension of Reduction of Delay in Contractual Payments Extension of Commercial Commercial, industrial and other $ 1,256 0.0 % $ 1,256 $ — $ — $ — Commercial real estate Non-construction — — — — — — Home equity — — — — — — Residential real estate 141 0.0 141 — — — Premium finance receivables Property and casualty insurance loans 40 0.0 40 — — — Total loans $ 1,437 0.0 % $ 1,437 $ — $ — $ — Weighted Average Magnitude of Modifications: Three Months Ended September 30, 2023 (Dollars in thousands) Total Duration of Extension of Term (months) Reduction of Duration of Delay in Contractual Payments (months) Commercial Commercial, industrial and other $ 1,256 16 — — Commercial real estate Non-construction — — — — Home equity — — — — Residential real estate 141 14 — — Premium finance receivables Property and casualty insurance loans 40 2 — — Total loans $ 1,437 16 — — Nine Months Ended September 30, 2024 (Dollars in thousands) Total (1) Percentage of Total Class of Loan Extension of Term (1) Reduction of Interest Rate (1) Interest Only Delay in Contractual Payments (1) Extension of Term and Reduction of Interest Rate (1) Commercial Commercial, industrial and other $ 4,687 0.0 % $ 4,195 $ 42 $ 17 $ 97 $ 336 Commercial real estate Non-Construction 1,662 0.0 486 — 319 857 — Home equity 89 0.0 89 — — — — Residential real estate 282 0.0 114 168 — — — Premium finance receivables Property and casualty insurance loans 1,554 0.0 33 1,460 — — 61 Total loans $ 8,274 0.0 $ 4,917 $ 1,670 $ 336 $ 954 $ 397 Weighted Average Magnitude of Modifications: Nine Months Ended September 30, 2024 (Dollars in thousands) Total Duration of Extension of Term (months) Reduction of Duration of Delay in Contractual Payments (months) Commercial Commercial, industrial and other $ 4,687 35 113 34 Commercial real estate Non-construction 1,662 29 — 16 Home equity 89 12 — — Residential real estate 282 19 201 — Premium finance receivables Property and casualty insurance loans 1,554 6 86 — Total loans $ 8,274 9 156 18 Nine Months Ended September 30, 2023 (Dollars in thousands) Total Percentage of Total Class of Loan Extension of Reduction of Delay in Contractual Payments Extension of Commercial Commercial, industrial and other $ 39,153 0.3 % $ 3,194 $ 221 $ 35,265 $ 473 Commercial real estate Non-construction 5,709 0.1 467 827 39 4,376 Home equity 203 0.1 203 — — — Residential real estate 2,113 0.1 1,537 271 — 305 Premium finance receivables Property and casualty insurance loans 51 0.0 43 — — 8 Total loans $ 47,229 0.1 % $ 5,444 $ 1,319 $ 35,304 $ 5,162 Weighted Average Magnitude of Modifications: Nine Months Ended September 30, 2023 (Dollars in thousands) Total Duration of Extension of Term (months) Reduction of Duration of Delay in Contractual Payments (months) Commercial Commercial, industrial and other $ 39,153 15 108 16 Commercial real estate Non-construction 5,709 40 232 101 Home equity 203 12 — — Residential real estate 2,113 54 284 — Premium finance receivables Property and casualty insurance loans 51 2 50 — Total loans $ 47,229 33 223 17 The Company had commitments of $8.6 million and $45.0 million as of September 30, 2024 and September 30, 2023, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of principal forgiveness, an interest rate reduction, an other-than insignificant payment delay or a term extension during the periods presented. The following table presents a summary of all modified loans for borrowers experiencing financial difficulties and such loans that were in payment default under the restructured terms during the respective periods below: (Dollars in thousands) For the Twelve Months Ended September 30, 2024 Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Total Payments in Default (1) Payments in Default (1) Total Payments in Default (1) Payments in Default (1) Commercial Commercial, industrial and other $ 6,757 $ 42 $ 1,826 $ 39,153 $ 18,727 $ 18,749 Commercial real estate Construction and development 2,504 — — — — — Non-construction 2,933 — 923 5,709 95 923 Home equity 588 — 203 203 203 203 Residential real estate 282 — 541 2,113 817 902 Premium finance receivables Property and casualty insurance loans 1,632 47 61 51 40 40 Total loans $ 14,696 $ 89 $ 3,554 $ 47,229 $ 19,882 $ 20,817 (1) Modified loans considered to be in payment default are over 30 days past due subsequent to the restructuring. |
