Loans and the Allowance for Credit Losses | NOTE 5. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES The recorded investment in loans is presented in the Consolidated Balance Sheets net of deferred loan fees and costs, and discounts on purchased loans. Net deferred loan costs were $ 11.3 million and $ 11.5 million at September 30, 2024 and December 31, 2023 , respectively. The unaccreted discount on purchased loans from acquisitions was $ 11.2 million at September 30, 2024 and $ 13.5 million at December 31, 2023. September 30, December 31, (unaudited, in thousands) 2024 2023 Commercial real estate: Land and construction $ 1,190,453 $ 1,055,865 Improved property 6,015,818 5,509,583 Total commercial real estate 7,206,271 6,565,448 Commercial and industrial 1,717,369 1,670,659 Residential real estate 2,519,089 2,438,574 Home equity 796,594 734,219 Consumer 212,107 229,561 Total portfolio loans 12,451,430 11,638,461 Loans held for sale 22,127 16,354 Total loans $ 12,473,557 $ 11,654,815 Allowance for Credit Losses The allowance for credit losses under the current expected credit losses methodology ("CECL") is calculated utilizing the probability of default ("PD") divided by the loss given default ("LGD"), which is then discounted to net present value. PD is the probability the asset will default within a given time frame and LGD is the percentage of the asset not expected to be collected due to default. The primary macroeconomic drivers of the quantitative model include forecasts of national unemployment and interest rates, as well as modeling adjustments for changes in prepayment speeds, loan risk grades, portfolio mix, concentrations and loan growth. At September 30, 2024 , the primary drivers of the change in the allowance model calculation from December 31, 2023 were continued loan growth, adjustments in regional macroeconomic factors and loan concentrations, a specific reserve on one C&I credit and an increase in net charge-offs. The forecast was based upon a probability weighted approach which is designed to incorporate loss projections from a baseline, upside and downside economy. Due to the nonlinearity of credit losses to the economy, the asymmetry is best captured by evaluating multiple economic scenarios through a probability weighted approach. At quarter-end, national unemployment was projected to be 4.6 %, and subsequently increase to an average of 5.0 % over the remainder of the forecast period. In addition to the quantitative and qualitative changes noted above, the allowance is reflective of $ 9.6 million in net charge-offs recorded during the first nine months of 2024. Accrued interest receivable for loans was $ 64.3 million and $ 62.2 million at September 30, 2024 and December 31, 2023 , respectively. Wesbanco made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses because the Company has a policy in place to reverse or write-off accrued interest when loans are placed on non-accrual. However, due to their unique nature, Wesbanco does have a $ 0.3 million reserve on the accrued interest related to individually-evaluated loans. In addition, Wesbanco also has a $ 0.1 million reserve on the accrued interest related to loan modifications allowed under the Coronavirus Aid, Relief and Economic Security ("CARES") Act due to the timing and nature of these modifications. Accrued interest related to COVID-19 loan modifications as permitted under the CARES Act was $ 14.7 million and $ 15.6 million at September 30, 2024 and December 31, 2023, respectively. The following tables summarize changes in the allowance for credit losses applicable to each category of the loan portfolio: Allowance for Credit Losses By Category For the Nine Months Ended September 30, 2024 and 2023 (unaudited, in thousands) Commercial Commercial Commercial Residential Home Consumer Deposit Total Balance at December 31, 2023 Allowance for credit $ 7,123 $ 59,351 $ 36,644 $ 21,218 $ 1,017 $ 3,956 $ 1,366 $ 130,675 Allowance for credit 6,894 — 429 1,276 5 — — 8,604 Total beginning allowance for credit 14,017 59,351 37,073 22,494 1,022 3,956 1,366 139,279 Provision for credit losses: Provision for loan losses 1,662 2,584 9,987 2,365 383 1,674 1,119 19,774 Provision for loan commitments ( 63 ) 16 ( 300 ) ( 27 ) ( 5 ) — — ( 379 ) Total provision for credit 1,599 2,600 9,687 2,338 378 1,674 1,119 19,395 Charge-offs ( 813 ) ( 929 ) ( 6,744 ) ( 284 ) ( 795 ) ( 3,270 ) ( 1,324 ) ( 14,159 ) Recoveries 256 583 1,485 198 557 1,166 337 4,582 Net (charge-offs) recoveries ( 557 ) ( 346 ) ( 5,259 ) ( 86 ) ( 238 ) ( 2,104 ) ( 987 ) ( 9,577 ) Balance at September 30, 2024 Allowance for credit 8,228 61,589 41,372 23,497 1,162 3,526 1,498 140,872 Allowance for credit 6,831 16 129 1,249 — — — 8,225 Total ending allowance for credit $ 15,059 $ 61,605 $ 41,501 $ 24,746 $ 1,162 $ 3,526 $ 1,498 $ 149,097 Balance at December 31, 2022 Allowance for credit $ 6,737 $ 52,659 $ 31,540 $ 18,208 $ 4,234 $ 3,127 $ 1,285 $ 117,790 Allowance for credit 6,025 — — 2,215 128 — — 8,368 Total beginning allowance for credit 12,762 52,659 31,540 20,423 4,362 3,127 1,285 126,158 Provision for credit losses: Provision for loan losses ( 614 ) 7,595 3,678 1,582 ( 2,901 ) 1,315 957 11,612 Provision for loan commitments 1,247 — 1,087 ( 863 ) ( 110 ) — — 1,361 Total provision for credit 633 7,595 4,765 719 ( 3,011 ) 1,315 957 12,973 Charge-offs ( 222 ) ( 1,450 ) ( 1,498 ) ( 278 ) ( 670 ) ( 2,604 ) ( 1,262 ) ( 7,984 ) Recoveries 207 821 996 929 331 1,604 309 5,197 Net (charge-offs) recoveries ( 15 ) ( 629 ) ( 502 ) 651 ( 339 ) ( 1,000 ) ( 953 ) ( 2,787 ) Balance at September 30, 2023 Allowance for credit 6,108 59,625 34,716 20,441 994 3,442 1,289 126,615 Allowance for credit 7,272 — 1,087 1,352 18 — — 9,729 Total ending allowance for credit $ 13,380 $ 59,625 $ 35,803 $ 21,793 $ 1,012 $ 3,442 $ 1,289 $ 136,344 (1) Deposit overdrafts of $ 4.6 million and $ 4.5 million are included in total portfolio loans for the periods ending September 30, 2024 and September 30, 2023, respectively. (2) The total provision for credit losses - loans and loan commitments is reported in the consolidated statements of income in the provision for credit losses line item, which also includes the provision for credit losses on held-to-maturity securities. For more information on the provision relating to held-to-maturity securities, please see Note 4, "Securities." The following tables present the allowance for credit losses and recorded investments in loans by category, as of each period-end: Allowance for Credit Losses and Recorded Investment in Loans (unaudited, in thousands) Commercial Commercial Commercial Residential Home Consumer Deposit Total September 30, 2024 Allowance for credit losses: Loans individually-evaluated $ — $ 5,652 $ 2,286 $ — $ — $ — $ — $ 7,938 Loans collectively-evaluated 8,228 55,937 39,086 23,497 1,162 3,526 1,498 132,934 Loan commitments (2) 6,831 16 129 1,249 — — — 8,225 Total allowance for credit $ 15,059 $ 61,605 $ 41,501 $ 24,746 $ 1,162 $ 3,526 $ 1,498 $ 149,097 Portfolio loans: Individually-evaluated for credit $ — $ 36,199 $ 2,286 $ — $ — $ — $ — $ 38,485 Collectively-evaluated for credit 1,190,453 5,979,619 1,715,083 2,519,089 796,594 212,107 — 12,412,945 Total portfolio loans $ 1,190,453 $ 6,015,818 $ 1,717,369 $ 2,519,089 $ 796,594 $ 212,107 $ — $ 12,451,430 December 31, 2023 Allowance for credit losses: Loans individually-evaluated $ — $ 5,745 $ — $ — $ — $ — $ — $ 5,745 Loans collectively-evaluated 7,123 53,606 36,644 21,218 1,017 3,956 1,366 124,930 Loan commitments (2) 6,894 — 429 1,276 5 — — 8,604 Total allowance for credit $ 14,017 $ 59,351 $ 37,073 $ 22,494 $ 1,022 $ 3,956 $ 1,366 $ 139,279 Portfolio loans: Individually-evaluated for credit $ — $ 36,929 $ 116 $ — $ — $ — $ — $ 37,045 Collectively-evaluated for credit 1,055,865 5,472,654 1,670,543 2,438,574 734,219 229,561 — 11,601,416 Total portfolio loans $ 1,055,865 $ 5,509,583 $ 1,670,659 $ 2,438,574 $ 734,219 $ 229,561 $ — $ 11,638,461 (1) Deposit overdrafts of $ 4.6 million and $ 4.7 million are included in total portfolio loans for the periods ending September 30, 2024 and December 31, 2023, respectively. (2) For additional detail relating to loan commitments, see Note 13, "Commitments and Contingent Liabilities." Commercial Loan Risk Grades Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at inception and adjusted thereafter at any time to reflect changes in the risk profile throughout the life of each loan. The primary factors used to determine the risk grade are the sufficiency, reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. The rating system more heavily weights the debt service coverage, leverage and loan to value factors to derive the risk grade. Other factors that are considered at a lesser weighting include management, industry or property type risks, payment history, collateral or guarantees. Commercial real estate – land and construction consists of loans to finance investments in vacant land, land development, construction of residential housing, and construction of commercial buildings. Commercial real estate – improved property consists of loans for the purchase or refinance of all types of improved owner-occupied and investment properties. Factors that are considered in assigning the risk grade vary depending on the type of property financed. The risk grade assigned to construction and development loans is based on the overall viability of the project, the experience and financial capacity of the developer or builder to successfully complete the project, project specific and market absorption rates and comparable property values, and the amount of pre-sales for residential housing construction or pre-leases for commercial investment property. The risk grade assigned to commercial investment property loans is based primarily on the adequacy of the net operating income generated by the property to service the debt (“debt service coverage”), the loan to appraised value, the type, quality, industry and mix of tenants, and the terms of leases. The risk grade assigned to owner-occupied commercial real estate is based primarily on global debt service coverage and the leverage of the business, but may also consider the industry in which the business operates, the business’ specific competitive advantages or disadvantages, collateral margins and the quality and experience of management. Commercial and industrial (“C&I”) loans consist of revolving lines of credit to finance accounts receivable, inventory and other general business purposes; term loans to finance fixed assets other than real estate, and letters of credit to support trade, insurance or governmental requirements for a variety of businesses. Most C&I borrowers are privately-held companies with annual sales up to $ 100 million. Primary factors that are considered in risk rating C&I loans include debt service coverage and leverage. Other factors including operating trends, collateral coverage along with management experience are also considered. Pass loans are those that exhibit a history of positive financial results that are at least comparable to the average for their industry or type of real estate. The primary source of repayment is acceptable and these loans are expected to perform satisfactorily during most economic cycles. Pass loans typically have no significant external factors that are expected to adversely affect these borrowers more than others in the same industry or property type. Any minor unfavorable characteristics of these loans are outweighed or mitigated by other positive factors including but not limited to adequate secondary or tertiary sources of repayment, including guarantees. Criticized loans, considered as compromised, have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank's credit position at some future date. Criticized loans are not adversely classified by the banking regulators and do not expose the bank to sufficient risk to warrant adverse classification. Classified loans, considered as substandard and doubtful, are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. These loans may or may not be reported as non-accrual. Doubtful loans have all the weaknesses inherent in those classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. These loans are reported as non-accrual. The following tables summarize commercial loans by their assigned risk grade: Commercial Loans by Internally Assigned Risk Grade (unaudited, in thousands) Commercial Commercial Commercial Total As of September 30, 2024 Pass $ 1,186,387 $ 5,814,936 $ 1,628,592 $ 8,629,915 Criticized - compromised 3,575 115,117 81,848 200,540 Classified - substandard 491 85,765 6,929 93,185 Classified - doubtful — — — — Total $ 1,190,453 $ 6,015,818 $ 1,717,369 $ 8,923,640 As of December 31, 2023 Pass $ 1,053,359 $ 5,337,394 $ 1,586,683 $ 7,977,436 Criticized - compromised 2,497 107,473 73,204 183,174 Classified - substandard 9 64,716 10,772 75,497 Classified - doubtful — — — — Total $ 1,055,865 $ 5,509,583 $ 1,670,659 $ 8,236,107 Residential real estate, home equity and consumer loans are not assigned internal risk grades other than as required by regulatory guidelines that are based primarily on the age of past due loans. Wesbanco primarily evaluates the credit quality of residential real estate, home equity and consumer loans based on repayment performance and historical loss rates. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard in accordance with regulatory guidelines was $ 23.2 million at September 30, 2024 and $ 20.0 million at December 31, 2023 , of which $ 6.2 million and $ 4.6 million were accruing, for each period, respectively. These loans are not included in the tables above. In addition, $ 41.9 million and $ 21.2 million of unfunded commercial loan commitments are also not included in the tables above at September 30, 2024 and December 31, 2023, respectively. Past Due and Nonperforming Loans The following tables summarize the age analysis of all categories of loans: Age Analysis of Loans (unaudited, in thousands) Current 30-59 60-89 90 Days Total Total 90 Days Due and As of September 30, 2024 Commercial real estate: Land and construction $ 1,190,453 $ — $ — $ — $ — $ 1,190,453 $ — Improved property 5,987,360 6,053 4,759 17,646 28,458 6,015,818 8,848 Total commercial real estate 7,177,813 6,053 4,759 17,646 28,458 7,206,271 8,848 Commercial and industrial 1,700,854 2,483 6,997 7,035 16,515 1,717,369 5,339 Residential real estate 2,505,489 1,471 3,158 8,971 13,600 2,519,089 4,489 Home equity 784,848 6,036 1,239 4,471 11,746 796,594 1,263 Consumer 207,072 3,153 1,319 563 5,035 212,107 488 Total portfolio loans 12,376,076 19,196 17,472 38,686 75,354 12,451,430 20,427 Loans held for sale 22,127 — — — — 22,127 — Total loans $ 12,398,203 $ 19,196 $ 17,472 $ 38,686 $ 75,354 $ 12,473,557 $ 20,427 Nonperforming loans included above are as follows: Non-accrual loans $ 9,256 $ 1,901 $ 1,005 $ 18,259 $ 21,165 $ 30,421 As of December 31, 2023 Commercial real estate: Land and construction $ 1,055,865 $ — $ — $ — $ - $ 1,055,865 $ — Improved property 5,490,946 4,416 3,627 10,594 18,637 5,509,583 1,899 Total commercial real estate 6,546,811 4,416 3,627 10,594 18,637 6,565,448 1,899 Commercial and industrial 1,663,985 640 1,255 4,779 6,674 1,670,659 3,184 Residential real estate 2,429,200 1,572 2,471 5,331 9,374 2,438,574 2,602 Home equity 724,293 4,691 1,198 4,037 9,926 734,219 1,407 Consumer 223,989 3,833 1,178 561 5,572 229,561 546 Total portfolio loans 11,588,278 15,152 9,729 25,302 50,183 11,638,461 9,638 Loans held for sale 16,354 — — — — 16,354 — Total loans $ 11,604,632 $ 15,152 $ 9,729 $ 25,302 $ 50,183 $ 11,654,815 $ 9,638 Nonperforming loans included above are as follows: Non-accrual loans $ 9,138 $ 1,300 $ 706 $ 15,664 $ 17,670 $ 26,808 The following tables summarize nonperforming loans: Nonperforming Loans September 30, 2024 December 31, 2023 Unpaid Unpaid Principal Recorded Related Principal Recorded Related (unaudited, in thousands) Balance (1) Investment Allowance Balance (1) Investment Allowance With no related specific allowance recorded: Commercial real estate: Land and construction $ — $ — $ — $ — $ — $ — Improved property 12,721 11,227 — 11,248 9,557 — Commercial and industrial 2,899 2,271 — 2,492 1,841 — Residential real estate 15,885 11,274 — 15,128 10,582 — Home equity 7,576 5,531 — 6,521 4,777 — Consumer 192 118 — 104 51 — Total nonperforming loans without a specific allowance 39,273 30,421 — 35,493 26,808 — Total nonperforming loans with a specific allowance — — — — — — Total nonperforming loans $ 39,273 $ 30,421 $ — $ 35,493 $ 26,808 $ — (1) The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off and fair market value adjustments on acquired nonperforming loans. Nonperforming Loans For the Three Months Ended For the Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Average Interest Average Interest Average Interest Average Interest Recorded Income Recorded Income Recorded Income Recorded Income (unaudited, in thousands) Investment Recognized Investment Recognized Investment Recognized Investment Recognized With no related specific allowance recorded: Commercial real estate: Land and construction $ 92 $ — $ — $ — $ 99 $ — $ 28 $ — Improved property 13,992 — 11,243 — 12,766 — 14,322 — Commercial and industrial 2,165 — 2,244 — 2,234 — 2,702 — Residential real estate 11,140 — 11,832 — 11,135 — 13,139 — Home equity 5,466 — 5,292 — 5,095 — 5,205 — Consumer 91 — 107 — 77 — 121 — Total nonperforming loans without a specific allowance 32,945 — 30,717 — 31,406 — 35,517 — Total nonperforming loans with a specific allowance — — — — — — — — Total nonperforming loans $ 32,945 $ — $ 30,717 $ — $ 31,406 $ — $ 35,517 $ — The following table presents the recorded investment in non-accrual loans: Non-accrual Loans (1) September 30, December 31, (unaudited, in thousands) 2024 2023 Commercial real estate: Land and construction $ — $ — Improved property 11,227 9,557 Total commercial real estate 11,227 9,557 Commercial and industrial 2,271 1,841 Residential real estate 11,274 10,582 Home equity 5,531 4,777 Consumer 118 51 Total $ 30,421 $ 26,808 (1) At September 30, 2024 , there were four borrowers with a loan balance greater than $ 1.0 million, which totaled $ 8.2 million, as compared to two borrowers with a loan balance greater than $ 1.0 million totaling $ 7.2 million at December 31, 2023 . Total non-accrual loans may include loans that are also restructured for borrowers experiencing financial difficulty. Such loans are also set forth in the following tables. Modifications for Borrowers Experiencing Financial Difficulty Tables in the following section exclude the financial effects of modifications for loans that were paid off or are otherwise no longer in the loan portfolio as of period end. The following table displays the details of portfolio loans that were modified during the three and nine months ended September 30, 2024 and 2023 presented by loan category: For the Three Months Ended September 30, 2024 (unaudited, in thousands) Term Payment Total % of Commercial real estate - land and construction $ — $ — $ — — Commercial real estate - improved property 666 19,782 20,448 0.3 Commercial and industrial 1,204 250 1,454 0.1 Residential real estate — 1,273 1,273 0.1 Home equity — 638 638 0.1 Consumer — 182 182 0.1 Total $ 1,870 $ 22,125 $ 23,995 0.2 For the Three Months Ended September 30, 2023 (unaudited, in thousands) Term Payment Total Percent of Commercial real estate - land and construction $ — $ — $ — — Commercial real estate - improved property 159 — 159 — Commercial and industrial 136 43 179 — Residential real estate — 126 126 — Home equity — 258 258 — Consumer — 244 244 0.1 Total $ 295 $ 671 $ 966 — For the Nine Months Ended September 30, 2024 (unaudited, in thousands) Term Payment Total % of Commercial real estate - land and construction $ 5 $ — $ 5 — Commercial real estate - improved property 25,002 19,782 44,784 0.7 Commercial and industrial 1,622 250 1,872 0.1 Residential real estate — 1,990 1,990 0.1 Home equity — 1,023 1,023 0.1 Consumer — 345 345 0.2 Total $ 26,629 $ 23,390 $ 50,019 0.4 For the Nine Months Ended September 30, 2023 (unaudited, in thousands) Term Payment Total Percent of Commercial real estate - land and construction $ 173 $ — $ 173 — Commercial real estate - improved property 7,014 276 7,290 0.1 Commercial and industrial 9,276 43 9,319 0.6 Residential real estate — 226 226 — Home equity 8 936 944 0.1 Consumer — 505 505 0.2 Total $ 16,471 $ 1,986 $ 18,457 0.2 Unfunded loan commitments on modifications for borrowers experiencing financial difficulty ("MBEFDs") totaled $ 1.7 million for loans modified during the nine months ended September 30, 2024 and $ 1.8 million for loans modified during the twelve months ended December 31, 2023 . These commitments are not included in the tables above. The following table summarizes the financial impacts of loan modifications and payment deferrals made to portfolio loans during the three and nine months ended September 30, 2024 and 2023, presented by loan category: For the Three Months Ended For the Three Months Ended September 30, 2024 September 30, 2023 (unaudited, in thousands) Weighted-Average Weighted-Average Commercial real estate - land and construction — — Commercial real estate - improved property 7 3 Commercial and industrial 16 3 Residential real estate — — Home equity — — Consumer — — For the Nine Months Ended For the Nine Months Ended September 30, 2024 September 30, 2023 (unaudited, in thousands) Weighted-Average Weighted-Average Commercial real estate - land and construction 24 12 Commercial real estate - improved property 9 22 Commercial and industrial 22 9 Residential real estate — — Home equity — 120 Consumer — — The following table summarizes loans with MBEFDs which defaulted (defined as 90 days past due) within 12 months of the loan being modified during the three and nine months ended September 30, 2024 and 2023 . Modified loans, including those that have defaulted, are already included in the allowance for credit losses through the various methodologies used to estimate the allowance. As such, no modification to the allowance is recorded specifically due to a modified loan subsequently defaulting. For the Three Months Ended For the Three Months Ended September 30, 2024 September 30, 2023 (unaudited, in thousands) Term Payment Total Term Payment Total Commercial real estate - land and construction $ — $ — $ — $ — $ — $ — Commercial real estate - improved property — — — — — — Commercial and industrial 34 — 34 — — — Residential real estate — 137 137 — — — Home equity — 175 175 — — — Consumer — 36 36 — — — Total loans that subsequently defaulted $ 34 $ 348 $ 382 $ — $ — $ — For the Nine Months Ended For the Nine Months Ended September 30, 2024 September 30, 2023 (unaudited, in thousands) Term Payment Total Term Payment Total Commercial real estate - land and construction $ — $ — $ — $ — $ — $ — Commercial real estate - improved property — — — — — — Commercial and industrial 202 — 202 — — — Residential real estate — 276 276 — — — Home equity — 175 175 — — — Consumer — 69 69 — — — Total loans that subsequently defaulted $ 202 $ 520 $ 722 $ — $ — $ — The following table presents an aging analysis of portfolio loans by loan category that were modified during the twelve months prior to September 30, 2024 and September 30, 2023. September 30, 2024 (unaudited, in thousands) 30-59 Days 60-89 Days 90 Days Total Current Total Commercial real estate - land and construction $ — $ — $ — $ — $ 5 $ 5 Commercial real estate - improved property — 3,433 — 3,433 41,573 45,006 Commercial and industrial 250 — 34 284 1,587 1,871 Residential real estate — — 161 161 2,485 2,646 Home equity 64 — 309 373 924 1,297 Consumer 28 24 66 118 273 391 Total modified loans (1) $ 342 $ 3,457 $ 570 $ 4,369 $ 46,847 $ 51,216 September 30, 2023 (unaudited, in thousands) 30-59 Days 60-89 Days 90 Days Total Current Total Commercial real estate - land and construction $ — $ — $ — $ — $ 173 $ 173 Commercial real estate - improved property — 33 276 309 6,981 7,290 Commercial and industrial — 43 — 43 9,276 9,319 Residential real estate 67 — — 67 159 226 Home equity 46 24 101 171 773 944 Consumer 6 68 62 136 369 505 Total modified loans (1) $ 119 $ 168 $ 439 $ 726 $ 17,731 $ 18,457 (1) Represents balance at period end. The following tables summarize amortized cost basis loan balances by year of origination and credit quality indicator: Loans As of September 30, 2024 Amortized Cost Basis by Origination Year (unaudited, in thousands) 2024 2023 2022 2021 2020 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: land and construction Risk rating: Pass $ 151,329 $ 395,639 $ 343,952 $ 92,995 $ 21,618 $ 53,644 $ 77,916 $ 49,294 $ 1,186,387 Criticized - compromised 1,436 — 1,115 — — 12 361 651 3,575 Classified - substandard — — — — — 6 — 485 491 Classified - doubtful — — — — — — — — — Total $ 152,765 $ 395,639 $ 345,067 $ 92,995 $ 21,618 $ 53,662 $ 78,277 $ 50,430 $ 1,190,453 Current-period gross charge-offs $ — $ 813 $ — $ — $ — $ — $ — $ — $ 813 Commercial real estate: improved property Risk rating: Pass $ 386,541 $ 573,034 $ 1,154,357 $ 578,734 $ 587,340 $ 1,979,742 $ 196,011 $ 359,177 $ 5,814,936 Criticized - compromised 3,666 18,354 13,654 10,324 3,750 34,578 1,209 29,582 115,117 Classified - substandard 19,782 1,848 5,666 407 2,313 55,075 621 53 85,765 Classified - doubtful — — — — — — — — — Total $ 409,989 $ 593,236 $ 1,173,677 $ 589,465 $ 593,403 $ 2,069,395 $ 197,841 $ 388,812 $ 6,015,818 Current-period gross charge-offs $ — $ — $ 75 $ — $ — $ 854 $ — $ — $ 929 Commercial and industrial Risk rating: Pass $ 190,160 $ 182,255 $ 208,230 $ 117,099 $ 51,255 $ 248,315 $ 579,330 $ 51,948 $ 1,628,592 Criticized - compromised 279 9,232 4,193 2,057 1,720 25,037 24,673 14,657 81,848 Classified - substandard 2,161 123 543 949 55 1,059 901 1,138 6,929 Classified - doubtful — — — — — — — — — Total $ 192,600 $ 191,610 $ 212,966 $ 120,105 $ 53,030 $ 274,411 $ 604,904 $ 67,743 $ 1,717,369 Current-period gross charge-offs $ 48 $ 567 $ 717 $ 228 $ 148 $ 407 $ 1 $ 4,628 $ 6,744 Residential real estate Loan delinquency: Current $ 155,617 $ 265,992 $ 363,598 $ 408,559 $ 172,607 $ 488,396 $ — $ 650,720 $ 2,505,489 30-59 days past due — — — — — 1,471 — — 1,471 60-89 days past due — 142 — — 205 2,811 — — 3,158 90 days or more past due — — 849 128 — 5,727 — 2,267 8,971 Total $ 155,617 $ 266,134 $ 364,447 $ 408,687 $ 172,812 $ 498,405 $ — $ 652,987 $ 2,519,089 Current-period gross charge-offs $ — $ — $ — $ — $ — $ 226 $ — $ 58 $ 284 Home equity Loan delinquency: Current $ 11,347 $ 1,432 $ 2,090 $ 976 $ 2,584 $ 20,996 $ 744,251 $ 1,172 $ 784,848 30-59 days past due — 289 780 15 32 1,299 3,621 — 6,036 60-89 days past due — 131 232 80 — 748 — 48 1,239 90 days or more past due — 818 551 228 337 2,066 185 286 4,471 Total $ 11,347 $ 2,670 $ 3,653 $ 1,299 $ 2,953 $ 25,109 $ 748,057 $ 1,506 $ 796,594 Current-period gross charge-offs $ — $ 316 $ 105 $ 65 $ 35 $ 197 $ 28 $ 49 $ 795 Consumer Loan delinquency: Current $ 44,653 $ 62,137 $ 42,197 $ 14,117 $ 7,233 $ 11,745 $ 24,990 $ — $ 207,072 30-59 days past due 361 1,070 907 474 174 124 43 — 3,153 60-89 days past due 296 429 326 129 37 102 — — 1,319 90 days or more past due 67 94 244 31 37 90 — — 563 Total $ 45,377 $ 63,730 $ 43,674 $ 14,751 $ 7,481 $ 12,061 $ 25,033 $ — $ 212,107 Current-period gross charge-offs $ 104 $ 1,193 $ 1,174 $ 411 $ 144 $ 244 $ — $ — $ 3,270 Loans As of December 31, 2023 Amortized Cost Basis by Origination Year (unaudited in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: land and construction Risk rating: Pass $ 290,954 $ 349,549 $ 145,043 $ 54,172 $ 48,655 $ 35,917 $ 82,288 $ 46,781 $ 1,053,359 Criticized - compromised — — — — — 16 299 2,182 2,497 Classified - substandard — — — — — 9 — — 9 Classified - doubtful — — — — — — — — — Total $ 290,954 $ 349,549 $ 145,043 $ 54,172 $ 48,655 $ 35,942 $ 82,587 $ 48,963 $ 1,055,865 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ 222 $ 222 Commercial real estate: improved property Risk rating: Pass $ 494,142 $ 1,076,535 $ 603,354 $ 581,540 $ 514,523 $ 1,706,804 $ 103,467 $ 257,029 $ 5,337,394 Criticized - compromised — 16,270 8,630 4,387 5,185 44,861 2,373 25,767 107,473 Classified - substandard 1,921 517 417 2,416 23,472 35,939 — 34 64,716 Classified - doubtful — — — — — — — — — Total $ 496,063 $ 1,093,322 $ 612,401 $ 588,343 $ 543,180 $ 1,787,604 $ 105,840 $ 282,830 $ 5,509,583 Current-period gross charge-offs $ — $ — $ 372 $ — $ — $ 1,505 $ — $ — $ 1,877 Commercial and industrial Risk rating: Pass $ 238,427 $ 234,520 $ 136,998 $ 78,836 $ 39,259 $ 252,826 $ 541,400 $ 64,417 $ 1,586,683 Criticized - compromised 1,094 834 3,169 1,490 7,334 31,526 20,626 7,131 73,204 Classified - substandard 33 149 315 265 825 1,916 5,797 1,472 10,772 Classified - doubtful — — — — — — — — — Total $ 239,554 $ 235,503 $ 140,482 $ 80,591 $ 47,418 $ 286,268 $ 567,823 $ 73,020 $ 1,670,659 Current-period gross charge-offs $ 98 $ 205 $ 603 $ 353 $ 20 $ 463 $ — $ 541 $ 2,283 Residential real estate Loan delinquency: Current $ 277,790 $ 429,835 $ 445,322 $ 185,139 $ 86,149 $ 456,818 $ — $ 548,147 $ 2,429,200 30-59 days past due — — — — — 1,572 — — 1,572 60-89 days past due — — — 341 — 2,130 — — 2,471 90 days or more past due — 799 34 — 263 4,207 — 28 5,331 Total $ 277,790 $ 430,634 $ 445,356 $ 185,480 $ 86,412 $ 464,727 $ — $ 548,175 $ 2,438,574 Current-period gross charge-offs $ — $ — $ — $ — $ 5 $ 387 $ — $ — $ 392 Home equity Loan delinquency: Current $ 12,675 $ 1,235 $ 1,467 $ 1,571 $ 1,614 $ 22,484 $ 681,848 $ 1,399 $ 724,293 30-59 days past due 34 193 85 73 44 947 3,315 — 4,691 60-89 days past due 119 318 16 68 76 524 — 77 1,198 90 days or more past due — 213 — 737 230 2,527 — 330 4,037 Total $ 12,828 $ 1,959 $ 1,568 $ 2,449 $ 1,964 $ 26,482 $ 685,163 $ 1,806 $ 734,219 Current-period gross charge-offs $ — $ 139 $ 57 $ 29 $ 79 $ 615 $ 6 $ — $ 925 Consumer Loan delinquency: Current $ 84,526 $ 57,661 $ 21,592 $ 13,189 $ 10,958 $ 12,143 $ 23,916 $ 4 $ 223,989 30-59 days past due 699 1,526 952 343 162 119 32 — 3,833 60-89 days past due 191 616 195 112 5 59 — — 1,178 90 days or more past due 64 203 114 63 9 108 — — 561 Total $ 85,480 $ 60,006 $ 22,853 $ 13,707 $ 11,134 $ 12,429 $ 23,948 $ 4 $ 229,561 Current-period gross charge-offs $ 251 $ 1,921 $ 901 $ 301 $ 100 $ 247 $ 4 $ — $ 3,725 The following table summarizes other real estate owned and repossessed assets included in other assets: September 30, December 31, (unaudited, in thousands) 2024 2023 Other real estate owned $ 670 $ 1,207 Repossessed assets 236 290 Total other real estate owned and repossessed assets $ 906 $ 1,497 There were no residential real estate loans included in other real estate at both September 30, 2024 and December 31, 2023. At September 30, 2024 and December 31, 2023 , formal foreclosure proceedings were in process on residential real estate loans totaling $ 3.1 million and $ 4.0 million, respectively. |