| Allowance for Credit Losses | Allowance for Credit Losses For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities: Allowance for credit losses – Three months ended September 30, 2024 (in thousands) Beginning Charge-offs Recoveries Provision (benefit) Ending Commercial real estate: CRE non-owner occupied $ 37,155 $ — $ — $ (949) $ 36,206 CRE owner occupied 15,873 — 1 (492) 15,382 Multifamily 15,973 — — (238) 15,735 Farmland 4,031 — — (15) 4,016 Total commercial real estate loans 73,032 — 1 (1,694) 71,339 Consumer: SFR 1-4 1st DT liens 14,604 — — (238) 14,366 SFR HELOCs and junior liens 10,087 — 196 (98) 10,185 Other 2,983 (170) 63 77 2,953 Total consumer loans 27,674 (170) 259 (259) 27,504 Commercial and industrial 12,128 (274) 106 2,493 14,453 Construction 7,466 — — (347) 7,119 Agriculture production 3,180 — 1 131 3,312 Leases 37 — — (4) 33 Allowance for credit losses on loans 123,517 (444) 367 320 123,760 Reserve for unfunded commitments 6,210 — — (100) 6,110 Total $ 129,727 $ (444) $ 367 $ 220 $ 129,870 Allowance for credit losses – Nine months ended September 30, 2024 (in thousands) Beginning Charge-offs Recoveries Provision (benefit) Ending Commercial real estate: CRE non-owner occupied $ 35,077 $ — $ — $ 1,129 $ 36,206 CRE owner occupied 15,081 — 2 299 15,382 Multifamily 14,418 — — 1,317 15,735 Farmland 4,288 — — (272) 4,016 Total commercial real estate loans 68,864 — 2 2,473 71,339 Consumer: SFR 1-4 1st DT liens 14,009 (26) — 383 14,366 SFR HELOCs and junior liens 10,273 (41) 296 (343) 10,185 Other 3,171 (538) 184 136 2,953 Total consumer loans 27,453 (605) 480 176 27,504 Commercial and industrial 12,750 (1,274) 389 2,588 14,453 Construction 8,856 — — (1,737) 7,119 Agriculture production 3,589 (1,450) 26 1,147 3,312 Leases 10 — — 23 33 Allowance for credit losses on loans 121,522 (3,329) 897 4,670 123,760 Reserve for unfunded commitments 5,850 — — 260 6,110 Total $ 127,372 $ (3,329) $ 897 $ 4,930 $ 129,870 In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators including loan grade and borrower repayment performance have been statistically correlated with historical credit losses and various econometrics, including California unemployment, gross domestic product, and corporate bond yields. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company utilizes a forecast period of approximately eight quarters and obtains the forecast data from publicly available sources as of the balance sheet date. This forecast data continues to evolve and includes improving shifts in the magnitude of changes for both the unemployment and GDP factors leading up to the balance sheet date. Core inflation is slowing but prices remain elevated relative to wage increases, as reflected by higher living costs such as housing, energy and general services. Actions by the Federal Reserve to cut rates during 2024 and beyond may help improve this outlook overall, but the uncertainty associated with the extent and timing of these potential reductions has inhibited a material change to forecasted reserve levels. Furthermore, geopolitical risks remain elevated and appear to be getting worse, which may lead to further negative effects on domestic economic outcomes. As a result, management continues to believe that certain credit weaknesses are present in the overall economy and that it is appropriate to maintain a reserve level that incorporates such risk factors. For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities: Allowance for credit losses – Year ended December 31, 2023 (in thousands) Beginning Charge-offs Recoveries Provision Ending Balance Commercial real estate: CRE non-owner occupied $ 30,962 $ — $ — $ 4,115 $ 35,077 CRE owner occupied 14,014 (3,637) 2 4,702 15,081 Multifamily 13,132 — — 1,286 14,418 Farmland 3,273 — — 1,015 4,288 Total commercial real estate loans 61,381 (3,637) 2 11,118 68,864 Consumer: SFR 1-4 1st DT liens 11,268 — 262 2,479 14,009 SFR HELOCs and junior liens 11,413 (66) 723 (1,797) 10,273 Other 1,958 (558) 190 1,581 3,171 Total consumer loans 24,639 (624) 1,175 2,263 27,453 Commercial and industrial 13,597 (3,879) 316 2,716 12,750 Construction 5,142 — — 3,714 8,856 Agriculture production 906 — 34 2,649 3,589 Leases 15 — — (5) 10 Allowance for credit losses on loans 105,680 (8,140) 1,527 22,455 121,522 Reserve for unfunded commitments 4,315 — — 1,535 5,850 Total $ 109,995 $ (8,140) $ 1,527 $ 23,990 $ 127,372 Allowance for credit losses – Three months ended September 30, 2023 (in thousands) Beginning Charge-offs Recoveries Provision Ending Balance Commercial real estate: CRE non-owner occupied $ 33,042 $ — $ — $ 681 $ 33,723 CRE owner occupied 20,208 (3,608) — (2,097) 14,503 Multifamily 14,075 — — 164 14,239 Farmland 3,691 — — 519 4,210 Total commercial real estate loans 71,016 (3,608) — (733) 66,675 Consumer: SFR 1-4 1st DT liens 13,134 — 262 139 13,535 SFR HELOCs and junior liens 10,608 — 314 (759) 10,163 Other 2,771 (133) 52 230 2,920 Total consumer loans 26,513 (133) 628 (390) 26,618 Commercial and industrial 11,647 (1,616) 91 2,168 12,290 Construction 7,031 — — 1,066 8,097 Agriculture production 1,105 — 1 1,019 2,125 Leases 17 — — (10) 7 Allowance for credit losses on loans 117,329 (5,357) 720 3,120 115,812 Reserve for unfunded commitments 4,865 — — 1,035 5,900 Total $ 122,194 $ (5,357) $ 720 $ 4,155 $ 121,712 Allowance for credit losses – Nine months ended September 30, 2023 (in thousands) Beginning Charge-offs Recoveries Provision Ending Balance Commercial real estate: CRE non-owner occupied $ 30,962 $ — $ — $ 2,761 $ 33,723 CRE owner occupied 14,014 (3,608) 1 4,096 14,503 Multifamily 13,132 — — 1,107 14,239 Farmland 3,273 — — 937 4,210 Total commercial real estate loans 61,381 (3,608) 1 8,901 66,675 Consumer: SFR 1-4 1st DT liens 11,268 — 262 2,005 13,535 SFR HELOCs and junior liens 11,413 (42) 416 (1,624) 10,163 Other 1,958 (438) 129 1,271 2,920 Total consumer loans 24,639 (480) 807 1,652 26,618 Commercial and industrial 13,597 (3,303) 267 1,729 12,290 Construction 5,142 — — 2,955 8,097 Agriculture production 906 — 33 1,186 2,125 Leases 15 — — (8) 7 Allowance for credit losses on loans 105,680 (7,391) 1,108 16,415 115,812 Reserve for unfunded commitments 4,315 — — 1,585 5,900 Total $ 109,995 $ (7,391) $ 1,108 $ 18,000 $ 121,712 As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio. The Company analyzes loans individually to classify the loans as to credit risk and grading. This analysis is performed annually for all outstanding balances greater than $1 million and non-homogeneous loans, such as commercial real estate loans, unless other indicators, such as delinquency, trigger more frequent evaluation. Loans below the $1 million threshold and homogenous in nature are evaluated as needed for proper grading based on delinquency and borrower credit scores. The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows: • Pass – This grade represents loans ranging from acceptable to very little or no credit risk. These loans typically meet most if not all policy standards in regard to: loan amount as a percentage of collateral value, debt service coverage, profitability, leverage, and working capital. • Special Mention – This grade represents “Other Assets Especially Mentioned” in accordance with regulatory guidelines and includes loans that display some potential weaknesses which, if left unaddressed, may result in deterioration of the repayment prospects for the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention. • Substandard – This grade represents “Substandard” loans in accordance with regulatory guidelines. Loans within this rating typically exhibit weaknesses that are well defined to the point that repayment is jeopardized. Loss potential is, however, not necessarily evident. The underlying collateral supporting the credit appears to have sufficient value to protect the Company from loss of principal and accrued interest, or the loan has been written down to the point where this is true. There is a definite need for a well-defined workout/rehabilitation program. • Doubtful – This grade represents “Doubtful” loans in accordance with regulatory guidelines. An asset classified as Doubtful has all the weaknesses inherent in a loan classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and financing plans. • Loss – This grade represents “Loss” loans in accordance with regulatory guidelines. A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan, even though some recovery may be affected in the future. The portion of the loan that is graded loss should be charged off no later than the end of the quarter in which the loss is identified. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows for the period indicated: Term Loans Amortized Cost Basis by Origination Year – As of September 30, 2024 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2024 2023 2022 2021 2020 Prior Commercial real estate: CRE non-owner occupied risk ratings Pass $ 85,786 $ 179,495 $ 417,796 $ 271,527 $ 153,621 $ 937,565 $ 158,727 $ — $ 2,204,517 Special Mention — — 1,595 — — 28,361 436 — 30,392 Substandard — — — — — 16,796 — — 16,796 Doubtful/Loss — — — — — — — — — Total $ 85,786 $ 179,495 $ 419,391 $ 271,527 $ 153,621 $ 982,722 $ 159,163 $ — $ 2,251,705 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: CRE owner occupied risk ratings Pass $ 56,032 $ 74,060 $ 196,922 $ 180,017 $ 106,181 $ 272,791 $ 32,701 $ — $ 918,704 Special Mention 1,646 — 1,651 1,742 208 3,260 — — 8,507 Substandard — — 8,027 5,420 3,527 3,093 — — 20,067 Doubtful/Loss — — — — — — — — — Total $ 57,678 $ 74,060 $ 206,600 $ 187,179 $ 109,916 $ 279,144 $ 32,701 $ — $ 947,278 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Term Loans Amortized Cost Basis by Origination Year – As of September 30, 2024 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2024 2023 2022 2021 2020 Prior Commercial real estate: Multifamily risk ratings Pass $ 30,509 $ 28,045 $ 175,965 $ 294,983 $ 119,176 $ 317,604 $ 40,955 $ — $ 1,007,237 Special Mention — — — 12,316 — 209 — — 12,525 Substandard — — 502 — — 202 — — 704 Doubtful/Loss — — — — — — — — — Total $ 30,509 $ 28,045 $ 176,467 $ 307,299 $ 119,176 $ 318,015 $ 40,955 $ — $ 1,020,466 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Farmland risk ratings Pass $ 8,447 $ 18,332 $ 45,362 $ 21,187 $ 15,384 $ 50,085 $ 43,544 $ — $ 202,341 Special Mention — 2,708 2,911 8,331 425 3,763 1,506 — 19,644 Substandard — 83 — 21,123 — 12,846 12,038 — 46,090 Doubtful/Loss — — — — — — — — — Total $ 8,447 $ 21,123 $ 48,273 $ 50,641 $ 15,809 $ 66,694 $ 57,088 $ — $ 268,075 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 42,829 $ 122,899 $ 177,574 $ 245,529 $ 116,777 $ 141,713 $ — $ 3,982 $ 851,303 Special Mention — 67 — — — 904 — 168 1,139 Substandard — 253 353 3,504 2,107 6,620 — 477 13,314 Doubtful/Loss — — — — — — — — — Total $ 42,829 $ 123,219 $ 177,927 $ 249,033 $ 118,884 $ 149,237 $ — $ 4,627 $ 865,756 Year-to-date gross charge-offs $ — $ 26 $ — $ — $ — $ — $ — $ — $ 26 Consumer loans: SFR HELOCs and junior liens risk ratings Pass $ 252 $ — $ — $ — $ — $ 77 $ 338,631 $ 6,183 $ 345,143 Special Mention — — — — — — 5,126 235 5,361 Substandard — — — — — — 4,381 456 4,837 Doubtful/Loss — — — — — — — — — Total $ 252 $ — $ — $ — $ — $ 77 $ 348,138 $ 6,874 $ 355,341 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ 41 $ — $ 41 Consumer loans: Other risk ratings Pass $ 10,102 $ 24,078 $ 6,501 $ 6,817 $ 5,555 $ 8,002 $ 612 $ — $ 61,667 Special Mention — 92 35 231 110 8 15 — 491 Substandard — 82 166 114 2 342 2 — 708 Doubtful/Loss — — — — — — — — — Total $ 10,102 $ 24,252 $ 6,702 $ 7,162 $ 5,667 $ 8,352 $ 629 $ — $ 62,866 Year-to-date gross charge-offs $ 285 $ 67 $ 16 $ 74 $ 28 $ 56 $ 12 $ — $ 538 Term Loans Amortized Cost Basis by Origination Year – As of September 30, 2024 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2024 2023 2022 2021 2020 Prior Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 60,316 $ 61,459 $ 66,387 $ 46,857 $ 5,087 $ 10,539 $ 213,784 $ 161 $ 464,590 Special Mention 143 100 1,530 67 282 1 3,082 — 5,205 Substandard 429 — 1,555 847 43 636 11,384 74 14,968 Doubtful/Loss — — — — — — — — — Total $ 60,888 $ 61,559 $ 69,472 $ 47,771 $ 5,412 $ 11,176 $ 228,250 $ 235 $ 484,763 Year-to-date gross charge-offs $ 186 $ — $ 178 $ 93 $ — $ — $ 817 $ — $ 1,274 Construction loans: Construction risk ratings Pass $ 21,043 $ 103,279 $ 94,936 $ 29,098 $ 6,676 $ 7,585 $ — $ — $ 262,617 Special Mention — — 13,419 — — — — — 13,419 Substandard — — — — — 59 — — 59 Doubtful/Loss — — — — — — — — — Total $ 21,043 $ 103,279 $ 108,355 $ 29,098 $ 6,676 $ 7,644 $ — $ — $ 276,095 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agriculture production loans: Agriculture production risk ratings Pass $ 639 $ 1,379 $ 2,495 $ 1,028 $ 214 $ 7,530 $ 122,624 $ — $ 135,909 Special Mention — — 138 400 107 227 7,204 — 8,076 Substandard — — — 96 — 15 27 — 138 Doubtful/Loss — — — — — — — — — Total $ 639 $ 1,379 $ 2,633 $ 1,524 $ 321 $ 7,772 $ 129,855 $ — $ 144,123 Year-to-date gross charge-offs $ — $ — $ 173 $ — $ — $ — $ 1,277 $ — $ 1,450 Leases: Lease risk ratings Pass $ 7,423 $ — $ — $ — $ — $ — $ — $ — $ 7,423 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total $ 7,423 $ — $ — $ — $ — $ — $ — $ — $ 7,423 Year-to-date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Total loans outstanding: Risk ratings Pass $ 323,378 $ 613,026 $ 1,183,938 $ 1,097,043 $ 528,671 $ 1,753,491 $ 951,578 $ 10,326 $ 6,461,451 Special Mention 1,789 2,967 21,279 23,087 1,132 36,733 17,369 403 104,759 Substandard 429 418 10,603 31,104 5,679 40,609 27,832 1,007 117,681 Doubtful/Loss — — — — — — — — — Total $ 325,596 $ 616,411 $ 1,215,820 $ 1,151,234 $ 535,482 $ 1,830,833 $ 996,779 $ 11,736 $ 6,683,891 Year-to-date gross charge-offs $ 471 $ 93 $ 367 $ 167 $ 28 $ 56 $ 2,147 $ — $ 3,329 Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2023 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2023 2022 2021 2020 2019 Prior Commercial real estate: CRE non-owner occupied risk ratings Pass $ 180,326 $ 413,863 $ 290,210 $ 137,656 $ 206,408 $ 792,875 $ 141,686 $ — $ 2,163,024 Special Mention — 1,329 — 5,281 17,093 14,174 1,247 — 39,124 Substandard — — 767 — 2,139 12,540 212 — 15,658 Doubtful/Loss — — — — — — — — — Total $ 180,326 $ 415,192 $ 290,977 $ 142,937 $ 225,640 $ 819,589 $ 143,145 $ — $ 2,217,806 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: CRE owner occupied risk ratings Pass $ 71,288 $ 196,915 $ 190,384 $ 118,457 $ 59,220 $ 268,990 $ 23,740 $ — $ 928,994 Special Mention — 5,773 1,513 2,754 703 2,678 — — 13,421 Substandard — 2,972 7,835 — 111 3,107 — — 14,025 Doubtful/Loss — — — — — — — — — Total $ 71,288 $ 205,660 $ 199,732 $ 121,211 $ 60,034 $ 274,775 $ 23,740 $ — $ 956,440 Period end gross write-offs $ — $ — $ — $ 1,380 $ — $ 2,228 $ 29 $ — $ 3,637 Commercial real estate: Multifamily risk ratings Pass $ 28,445 $ 177,032 $ 279,660 $ 89,106 $ 104,108 $ 225,446 $ 33,470 $ — $ 937,267 Special Mention — — 11,914 — — 321 — — 12,235 Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total $ 28,445 $ 177,032 $ 291,574 $ 89,106 $ 104,108 $ 225,767 $ 33,470 $ — $ 949,502 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Farmland risk ratings Pass $ 21,729 $ 46,398 $ 37,134 $ 16,006 $ 16,780 $ 41,663 $ 50,857 $ — $ 230,567 Special Mention — 2,170 5,802 51 261 734 — — 9,018 Substandard 101 813 9,053 377 — 13,266 7,859 — 31,469 Doubtful/Loss — — — — — — — — — Total $ 21,830 $ 49,381 $ 51,989 $ 16,434 $ 17,041 $ 55,663 $ 58,716 $ — $ 271,054 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 135,741 $ 189,920 $ 260,870 $ 125,081 $ 29,568 $ 126,975 $ — $ 4,079 $ 872,234 Special Mention 71 — — — — 1,948 — 27 2,046 Substandard — 140 1,296 1,490 531 5,265 — 436 9,158 Doubtful/Loss — — — — — — — — — Total $ 135,812 $ 190,060 $ 262,166 $ 126,571 $ 30,099 $ 134,188 $ — $ 4,542 $ 883,438 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2023 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2023 2022 2021 2020 2019 Prior Consumer loans: SFR HELOCs and junior liens risk ratings Pass $ 297 $ — $ — $ — $ — $ 96 $ 343,698 $ 6,444 $ 350,535 Special Mention — — — — — — 2,274 138 2,412 Substandard — — — — — — 3,212 654 3,866 Doubtful/Loss — — — — — — — — — Total $ 297 $ — $ — $ — $ — $ 96 $ 349,184 $ 7,236 $ 356,813 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ 66 $ 66 Consumer loans: Other risk ratings Pass $ 34,441 $ 9,061 $ 8,908 $ 7,419 $ 6,825 $ 4,619 $ 659 $ — $ 71,932 Special Mention 21 54 203 63 54 37 18 — 450 Substandard 87 183 164 30 116 52 3 — 635 Doubtful/Loss — — — — — — — — — Total $ 34,549 $ 9,298 $ 9,275 $ 7,512 $ 6,995 $ 4,708 $ 680 $ — $ 73,017 Period end gross write-offs $ 376 $ 82 $ — $ 36 $ 39 $ 9 $ 16 $ — $ 558 Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 70,930 $ 83,184 $ 51,455 $ 9,504 $ 10,193 $ 7,636 $ 340,858 $ 318 $ 574,078 Special Mention 33 663 237 83 — 178 1,126 — 2,320 Substandard — 2,014 782 103 4 762 6,318 74 10,057 Doubtful/Loss — — — — — — — — — Total $ 70,963 $ 85,861 $ 52,474 $ 9,690 $ 10,197 $ 8,576 $ 348,302 $ 392 $ 586,455 Period end gross write-offs $ 153 $ 287 $ 240 $ 2,285 $ — $ — $ 896 $ 18 $ 3,879 Construction loans: Construction risk ratings Pass $ 56,378 $ 136,294 $ 85,144 $ 47,632 $ 4,583 $ 6,518 $ — $ — $ 336,549 Special Mention — 10,582 — — — — — — 10,582 Substandard — — — — 67 — — — 67 Doubtful/Loss — — — — — — — — — Total $ 56,378 $ 146,876 $ 85,144 $ 47,632 $ 4,650 $ 6,518 $ — $ — $ 347,198 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agriculture production loans: Agriculture production risk ratings Pass $ 945 $ 2,749 $ 1,595 $ 396 $ 620 $ 8,491 $ 114,935 $ — $ 129,731 Special Mention — 183 543 176 — — 11,302 — 12,204 Substandard — — — — — — 2,562 — 2,562 Doubtful/Loss — — — — — — — — — Total $ 945 $ 2,932 $ 2,138 $ 572 $ 620 $ 8,491 $ 128,799 $ — $ 144,497 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2023 Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total (in thousands) 2023 2022 2021 2020 2019 Prior Leases: Lease risk ratings Pass $ 8,250 $ — $ — $ — $ — $ — $ — $ — $ 8,250 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total $ 8,250 $ — $ — $ — $ — $ — $ — $ — $ 8,250 Period end gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Total loans outstanding: Risk ratings Pass $ 608,770 $ 1,255,416 $ 1,205,360 $ 551,257 $ 438,305 $ 1,483,309 $ 1,049,903 $ 10,841 $ 6,603,161 Special Mention 125 20,754 20,212 8,408 18,111 20,070 15,967 165 103,812 Substandard 188 6,122 19,897 2,000 2,968 34,992 20,166 1,164 87,497 Doubtful/Loss — — — — — — — — — Total $ 609,083 $ 1,282,292 $ 1,245,469 $ 561,665 $ 459,384 $ 1,538,371 $ 1,086,036 $ 12,170 $ 6,794,470 Period end gross write-offs $ 529 $ 369 $ 240 $ 3,701 $ 39 $ 2,237 $ 941 $ 84 $ 8,140 The following table shows the ending balance of current and past due originated loans by loan category as of the date indicated: Analysis of Past Due Loans - As of September 30, 2024 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total Commercial real estate: CRE non-owner occupied $ 1,035 $ — $ 3,042 $ 4,077 $ 2,247,628 $ 2,251,705 CRE owner occupied — 251 3,011 3,262 944,016 947,278 Multifamily — — 502 502 1,019,964 1,020,466 Farmland 1,201 205 8,291 9,697 258,378 268,075 Total commercial real estate loans 2,236 456 14,846 17,538 4,469,986 4,487,524 Consumer: SFR 1-4 1st DT liens 214 — 3,938 4,152 861,604 865,756 SFR HELOCs and junior liens 2,678 810 859 4,347 350,994 355,341 Other 128 80 89 297 62,569 62,866 Total consumer loans 3,020 890 4,886 8,796 1,275,167 1,283,963 Commercial and industrial 1,158 8,501 1,850 11,509 473,254 484,763 Construction — — — — 276,095 276,095 Agriculture production 15 — 28 43 144,080 144,123 Leases — — — — 7,423 7,423 Total $ 6,429 $ 9,847 $ 21,610 $ 37,886 $ 6,646,005 $ 6,683,891 Analysis of Past Due Loans - As of December 31, 2023 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total Commercial real estate: CRE non-owner occupied $ 3,876 $ — $ 1,382 $ 5,258 $ 2,212,548 $ 2,217,806 CRE owner occupied 34 — 247 281 956,159 956,440 Multifamily — — — — 949,502 949,502 Farmland 635 3,798 2,052 6,485 264,569 271,054 Total commercial real estate loans 4,545 3,798 3,681 12,024 4,382,778 4,394,802 Consumer: SFR 1-4 1st DT liens 141 1,449 490 2,080 881,358 883,438 SFR HELOCs and junior liens 16 — 623 639 356,174 356,813 Other 148 40 30 218 72,799 73,017 Total consumer loans 305 1,489 1,143 2,937 1,310,331 1,313,268 Commercial and industrial 244 605 1,654 2,503 583,952 586,455 Construction — — — — 347,198 347,198 Agriculture production 593 878 33 1,504 142,993 144,497 Leases 447 — — 447 7,803 8,250 Total $ 6,134 $ 6,770 $ 6,511 $ 19,415 $ 6,775,055 $ 6,794,470 The following table shows the ending balance of non accrual loans by loan category as of the date indicated: Non Accrual Loans As of September 30, 2024 As of December 31, 2023 (in thousands) Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Commercial real estate: CRE non-owner occupied $ 3,624 $ 3,624 $ — $ 2,024 $ 2,024 $ — CRE owner occupied 3,278 3,278 — 3,994 3,994 — Multifamily 502 502 — — — — Farmland 12,967 12,967 — 5,996 14,484 — Total commercial real estate loans 20,371 20,371 — 12,014 20,502 — Consumer: SFR 1-4 1st DT liens 5,991 5,997 — 2,808 2,811 — SFR HELOCs and junior liens 3,995 4,238 — 3,281 3,571 — Other 108 117 — 39 105 — Total consumer loans 10,094 10,352 — 6,128 6,487 — Commercial and industrial 1,529 10,556 86 1,379 2,503 10 Construction 59 59 — 67 67 — Agriculture production 170 213 — — 2,322 — Leases — — — — — — Sub-total 32,223 41,551 86 19,588 31,881 10 Less: Guaranteed loans (852) — — (766) (878) — Total, net $ 31,371 $ 41,551 $ 86 $ 18,822 $ 31,003 $ 10 Interest income on non accrual loans that would have been recognized during the three months ended September 30, 2024 and 2023, if all such loans had been current in accordance with their original terms, totaled $1.6 million and $0.4 million, respectively. Interest income actually recognized on these originated loans during the three months ended September 30, 2024 and 2023 was $0.5 million and $0.1 million, respectively. Interest income on non accrual loans that would have been recognized during the nine months ended September 30, 2024 and 2023, if all such loans had been current in accordance with their original terms, totaled $3.0 million and $1.7 million, respectively. Interest income actually recognized on these originated loans during the nine months ended September 30, 2024 and 2023 was $0.6 million and $0.8 million, respectively. The following tables present the amortized cost basis of collateral dependent loans by class of loans as of the following periods: As of September 30, 2024 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR-1st Deed SFR-2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 3,042 $ 364 $ — $ 218 $ — $ — $ — $ — $ — $ — $ — $ 3,624 CRE owner occupied 140 23 147 2,968 — — — — — — — 3,278 Multifamily — — — — 502 — — — — — — 502 Farmland — — — — — 12,967 — — — — — 12,967 Total commercial real estate loans 3,182 387 147 3,186 502 12,967 — — — — — 20,371 Consumer: SFR 1-4 1st DT liens — — — — — — 5,991 — — — — 5,991 SFR HELOCs and junior liens — — — — — — 1,512 2,483 — — — 3,995 Other — — — — — — — — 108 — — 108 Total consumer loans — — — — — — 7,503 2,483 108 — — 10,094 Commercial and industrial — — — 8,334 — — — — — 1,244 978 10,556 Construction — — — — — — 59 — — — — 59 Agriculture production — — — 28 — — — — — — 185 213 Leases — — — — — — — — — — — — Total $ 3,182 $ 387 $ 147 $ 11,548 $ 502 $ 12,967 $ 7,562 $ 2,483 $ 108 $ 1,244 $ 1,163 $ 41,293 As of December 31, 2023 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR -1st Deed SFR -2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 124 $ 615 $ 519 $ 766 $ — $ — $ — $ — $ — $ — $ — $ 2,024 CRE owner occupied 614 — 297 3,083 — — — — — — — 3,994 Multifamily — — — — — — — — — — — — Farmland — — — 635 — 13,849 — — — — — 14,484 Total commercial real estate loans 738 615 816 4,484 — 13,849 — — — — — 20,502 Consumer: SFR 1-4 1st DT liens — — — — — — 2,808 — — — — 2,808 SFR HELOCs and junior liens — — — — — — 1,816 1,467 — — — 3,283 Other — — — — — — — — 95 — — 95 Total consumer loans — — — — — — 4,624 1,467 95 — — 6,186 Commercial and industrial — — — — — — — — — 1,712 791 2,503 Construction — — — — — — 67 — — — — 67 Agriculture production — — — 2,288 — — — — — — 33 2,321 Leases — — — — — — — — — — — — Total $ 738 $ 615 $ 816 $ 6,772 $ — $ 13,849 $ 4,691 $ 1,467 $ 95 $ 1,712 $ 824 $ 31,579 Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following tables show the amortized cost basis of loans that were both experiencing financial difficulty and modified during the periods presented. 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 receivables is also presented below. For the three months ended September 30, 2024 September 30, 2023 (in thousands) Combination - Term Extension/Rate Change Payment Delay/Term Extension Total % of Loans Outstanding Payment Delay/Term Extension Payment Delay/Term Reduction Total % of Loans Outstanding Farmland — — — — $ 1,043 0.37 % Commercial and industrial — 326 0.07 45 — 0.01 Total $ — $ 326 — % $ 45 $ 1,043 0.02 % For the nine months ended September 30, 2024 September 30, 2023 (in thousands) Combination - Term Extension/Rate Change Payment Delay/Term Extension Total % of Loans Outstanding Payment Delay/Term Extension Payment Delay/Term Reduction Total % of Loans Outstanding CRE non-owner occupied $ 211 $ — 0.01 % $ — $ — — % Multifamily — 295 0.29 — — — Farmland — — — — 1,043 0.37 SFR HELOCs and junior liens — 41 0.01 — — — Commercial and industrial — 1,008 0.21 206 — 0.03 Total $ 211 $ 1,344 0.02 % $ 206 $ 1,043 0.02 % The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2024. Three months ended September 30, 2024 Modification Type Loan Type Financial Effect Payment delay / term extension Multifamily Added 12 months to the life of the loan Payment delay / term extension Commercial and industrial Added a weighted average 60 months to the life of the loans Nine months ended September 30, 2024 Modification Type Loan Type Financial Effect Combination - Term extension / rate change CRE non-owner occupied Added 120 months to the life of the loan; converted from variable to fixed interest rate Payment delay / term extension SFR HELOCs and junior liens Added 60 months to the life of the loan Payment delay / term extension Commercial and industrial Added a weighted average 53 months to the life of the loans The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the nine months ended September 30, 2023. Modification Type Loan Type Financial Effect Payment delay / term reduction Farmland Reduced term by 12 months; changed from amortizing to interest only Payment delay / term extension Commercial and industrial Added 12 months to the life of the loan to delay balloon repayment Payment delay / term extension Commercial and industrial Added 12 months to the life of the loan; changed from amortizing to interest only During the nine months ended September 30, 2024 and September 30, 2023, respectively, there were no loans with payment defaults by borrowers experiencing financial difficulty which had material modifications in rate, term or principal forgiveness during the twelve months prior to default. |
