LOANS AND ALLOWANCE FOR CREDIT LOSSES | LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans and Loans Held for Sale Loans are presented net of unearned income. Unearned income consisted of net deferred loan fees and costs of $5.4 million at June 30, 2024 and $6.6 million at December 31, 2023 and a discount related to purchase accounting fair value adjustments of $2.7 million at June 30, 2024 and $3.1 million at December 31, 2023. The following table summarizes the composition of originated and acquired loans as of the dates presented: (dollars in thousands) June 30, 2024 December 31, 2023 Commercial real estate $ 2,672,527 $ 2,659,135 Commercial and industrial 1,421,955 1,436,183 Commercial construction 367,687 350,583 Business banking 1,308,985 1,360,765 Consumer real estate 1,839,756 1,731,778 Other consumer 102,660 114,897 Total Portfolio Loans $ 7,713,570 $ 7,653,341 Loans held for sale 188 153 Total Loans (1) $ 7,713,758 $ 7,653,494 (1) Excludes interest receivable of $35.4 million at June 30, 2024 and $35.3 million at December 31, 2023. Interest receivable is included in other assets Modifications to Borrowers Experiencing Financial Difficulty The following tables present the amortized cost of loans to borrowers experiencing financial difficulty by portfolio segment and type of modification during the periods presented: Three Months Ended June 30, 2024 (dollars in thousands) Term Extension Payment Delays (Other Than Insignificant) Total % of Portfolio Segment Commercial real estate $ 3,358 $ — $ 3,358 0.13 % Commercial and industrial 9,090 12,339 21,429 1.51 % Consumer real estate 107 — 107 0.01 % Total (1) $ 12,555 $ 12,339 $ 24,894 0.32 % (1) Excludes loans that were fully paid off or fully charged-off by period end. Three Months Ended June 30, 2023 (dollars in thousands) Term Extension Payment Delays (Other Than Insignificant) Total % of Portfolio Segment Commercial real estate $ 1,286 $ — $ 1,286 0.05 % Commercial and industrial 5,193 — 5,193 0.36 % Commercial construction 1,621 — 1,621 0.46 % Business banking 1,033 — 1,033 0.08 % Total (1) $ 9,133 $ — $ 9,133 0.12 % (1) Excludes loans that were fully paid off or fully charged-off by period end. Six Months Ended June 30, 2024 (dollars in thousands) Term Extension Payment Delays (Other Than Insignificant) Term Extension and Interest Rate Reduction Total % of Portfolio Segment Commercial real estate $ 4,188 $ — $ — $ 4,188 0.16 % Commercial and industrial 9,090 12,339 — 21,429 1.51 % Consumer real estate 107 — — 107 0.01 % Total (1) $ 13,385 $ 12,339 $ — $ 25,724 0.33 % (1) Excludes loans that were fully paid off or fully charged-off by period end. Six Months Ended June 30, 2023 (dollars in thousands) Term Extension Payment Delays (Other Than Insignificant) Term Extension and Interest Rate Reduction Total % of Portfolio Segment Commercial real estate $ 14,932 $ — $ — $ 14,932 0.58 % Commercial and industrial 5,762 — — 5,762 0.40 % Commercial construction 1,621 — — 1,621 0.46 % Business banking 1,033 — — 1,033 0.08 % Consumer real estate 62 — 194 256 0.02 % Total (1) $ 23,410 $ — $ 194 $ 23,604 0.32 % (1) Excludes loans that were fully paid off or fully charged-off by period end. The following tables describe the effect of loan modifications made to borrowers experiencing financial difficulty during the periods presented: Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 Weighted-Average Term Extension (in Months) Weighted-Average Payment Deferral Weighted-Average Term Extension (in months) Weighted-Average Payment Deferral Commercial real estate 8 — 8 — Commercial and industrial 10 6 10 6 Business banking — — 19 — Consumer real estate 68 — 68 — Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Weighted-Average Term Extension (in Months) Weighted-Average Interest Rate Reduction Weighted-Average Term Extension (in months) Weighted-Average Interest Rate Reduction Commercial real estate 9 — 7 — Commercial and industrial 3 — 9 — Commercial construction 5 — 5 — Business banking 5 — 5 — Consumer real estate — — 168 2% We closely monitor the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts. The following tables present the aging analysis of modifications to borrowers experiencing financial difficulty in the last 12 months as of the date presented: June 30, 2024 (dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total Commercial real estate $ 4,188 $ — $ — $ — $ 4,188 Commercial and industrial 21,429 — — — 21,429 Business banking 110 — — — 110 Consumer real estate 107 — — — 107 Other consumer $ — $ — $ — $ — $ — Total $ 25,834 $ — $ — $ — $ 25,834 June 30, 2023 (dollars in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Total Commercial real estate $ 14,932 $ — $ — $ — $ 14,932 Commercial and industrial 5,762 — — — 5,762 Commercial construction 1,621 — — — 1,621 Business banking 1,033 — — — 1,033 Consumer real estate 256 — — — 256 Total $ 23,604 $ — $ — $ — $ 23,604 A payment default is defined as a loan having a payment past due 90 days or more. There were no payment defaults during the three and six months ended June 30, 2024 related to loans that were modified within the 12 months prior to default. Additionally, we had three commitments to lend an additional $1.2 million to borrowers experiencing financial difficulty that had a modification during the six months ended June 30, 2024 and one commitment to lend an additional $0.2 million to borrowers experiencing financial difficulty that had a modification during the same period in 2023. The effect of modifications made to borrowers experiencing financial difficulty is already included in the ACL because of the measurement methodologies used to estimate the ACL, therefore, a change to the ACL is generally not recorded upon modification. If principal forgiveness is provided, that portion of the loan will be charged-off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL. An assessment of whether the borrower is experiencing financial difficulty is made on the date of a modification. The following table is a summary of nonperforming assets as of the dates presented: Nonperforming Assets (dollars in thousands) June 30, 2024 December 31, 2023 Nonperforming Assets Nonaccrual Loans $ 34,857 $ 22,947 OREO 95 75 Total Nonperforming Assets $ 34,952 $ 23,022 Allowance for Credit Losses We maintain an Allowance for Credit Losses, or ACL, at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) CRE, 2) C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer. The following are key risks within each portfolio segment: CRE —Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied. C&I —Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the company is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. Collateral for these types of loans often does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt. Commercial Construction —Loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While these loans are generally confined to the construction/development period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer. Business Banking —Commercial purpose loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs. The business banking portfolio is monitored by utilizing a standard and closely managed process focusing on behavioral and performance criteria. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and business. Consumer Real Estate —Loans secured by first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the local housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt. Other Consumer —Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes auto loans, unsecured loans and lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values. Management monitors various credit quality indicators for the commercial, business banking and consumer loan portfolios, including changes in risk ratings, nonperforming status and delinquency on a monthly basis. We monitor the commercial loan portfolio through an internal risk rating system. Loan risk ratings are assigned based upon the creditworthiness of the borrower and are reviewed on an ongoing basis according to our internal policies. Loans within the pass rating generally have a lower risk of loss than loans risk rated as special mention or substandard. Our risk ratings are consistent with regulatory guidance and are as follows: Pass —The loan is currently performing and is of high quality. Special Mention —A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in the strength of our credit position at some future date. Substandard —A substandard loan is not adequately protected by the net worth and/or paying capacity of the borrower or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Doubtful —Loans classified doubtful 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. The following tables present loan balances by year of origination and internally assigned risk rating for our portfolio segments as of the dates presented: June 30, 2024 Risk Rating (dollars in thousands) 2024 2023 2022 2021 2020 2019 and Prior Revolving Revolving-Term Total Commercial Real Estate Pass $ 48,148 $ 278,373 $ 372,544 $ 445,786 $ 220,620 $ 1,139,806 $ 30,627 $ — $ 2,535,904 Special mention — — 410 5,971 — 65,786 — — 72,167 Substandard — — 994 — 2,306 59,171 — — 62,471 Doubtful — — — — — 1,985 — — 1,985 Total Commercial Real Estate 48,148 278,373 373,948 451,757 222,926 1,266,748 30,627 — 2,672,527 Year-to-date Gross Charge-offs — — — — — 5,205 — — 5,205 Commercial and Industrial Pass 33,631 176,156 219,464 155,849 47,484 220,218 479,939 — 1,332,741 Special mention 346 1,161 865 9,117 — 10,585 20,273 — 42,347 Substandard — 51 213 13,646 1,404 5,540 24,376 — 45,230 Doubtful — 79 — 208 — — 1,350 — 1,637 Total Commercial and Industrial 33,977 177,447 220,542 178,820 48,888 236,343 525,938 — 1,421,955 Year-to-date Gross Charge-offs — — — 1,037 — 91 — — 1,128 Commercial Construction Pass 31,952 110,187 124,661 67,115 14,490 3,890 10,432 — 362,727 Special mention — — — — — — — — — Substandard — — — — — 4,960 — — 4,960 Doubtful — — — — — — — — — Total Commercial Construction 31,952 110,187 124,661 67,115 14,490 8,850 10,432 — 367,687 Year-to-date Gross Charge-offs — — — — — — — — — Business Banking Pass 77,648 248,290 231,668 181,439 81,031 372,885 92,690 1,075 1,286,726 Special mention — 150 52 64 286 4,206 25 280 5,063 Substandard — 1,907 935 3,618 514 9,628 104 490 17,196 Doubtful — — — — — — — — — Total Business Banking 77,648 250,347 232,655 185,121 81,831 386,719 92,819 1,845 1,308,985 Year-to-date Gross Charge-offs — — — — 6 188 — — 194 Consumer Real Estate Pass 110,596 334,745 328,326 141,990 98,294 240,448 551,585 24,313 1,830,297 Special mention — — — — — 106 — — 106 Substandard — 473 420 195 160 4,575 882 2,648 9,353 Doubtful — — — — — — — — — Total Consumer Real Estate 110,596 335,218 328,746 142,185 98,454 245,129 552,467 26,961 1,839,756 Year-to-date Gross Charge-offs — — — — 9 23 17 422 471 Other Consumer Pass 5,088 8,579 9,429 4,765 2,649 807 66,860 4,270 102,447 Special mention — — — — — — — — — Substandard — — — 27 11 161 — 14 213 Doubtful — — — — — — — — — Total Other Consumer 5,088 8,579 9,429 4,792 2,660 968 66,860 4,284 102,660 Year-to-date Gross Charge-offs 434 11 100 46 19 12 — 164 786 Pass 307,063 1,156,330 1,286,092 996,944 464,568 1,978,054 1,232,133 29,658 7,450,842 Special mention 346 1,311 1,327 15,152 286 80,683 20,298 280 119,683 Substandard — 2,431 2,562 17,486 4,395 84,035 25,362 3,152 139,423 Doubtful — 79 — 208 — 1,985 1,350 — 3,622 Total Loan Balance $ 307,409 $ 1,160,151 $ 1,289,981 $ 1,029,790 $ 469,249 $ 2,144,757 $ 1,279,143 $ 33,090 $ 7,713,570 Year-to-date Gross Charge-offs $ 434 $ 11 $ 100 $ 1,083 $ 34 $ 5,519 $ 17 $ 586 $ 7,784 December 31, 2023 Risk Rating (dollars in thousands) 2023 2022 2021 2020 2019 2018 and Prior Revolving Revolving-Term Total Commercial Real Estate Pass $ 276,677 $ 323,463 $ 433,308 $ 237,901 $ 383,799 $ 781,465 $ 32,418 $ — $ 2,469,031 Special mention — 1,006 6,000 — 24,887 75,428 — — 107,321 Substandard — — — 2,355 10,685 69,743 — — 82,783 Doubtful — — — — — — — — — Total Commercial Real Estate 276,677 324,469 439,308 240,256 419,371 926,636 32,418 — 2,659,135 Year-to-date Gross Charge-offs — — — — — 1,706 — — 1,706 Commercial and Industrial Pass 171,672 231,114 185,884 53,101 47,063 183,165 482,490 — 1,354,489 Special mention 189 620 10,242 — — 8,848 4,126 — 24,025 Substandard — 244 14,510 1,595 5,795 1,892 33,633 — 57,669 Doubtful — — — — — — — — — Total Commercial and Industrial 171,861 231,978 210,636 54,696 52,858 193,905 520,249 — 1,436,183 Year-to-date Gross Charge-offs — — — — 3,412 15,842 — — 19,254 Commercial Construction Pass 75,596 154,456 82,313 14,845 151 4,054 14,208 — 345,623 Special mention — — — — — — — — — Substandard — — — — 4,576 384 — — 4,960 Doubtful — — — — — — — — — Total Commercial Construction 75,596 154,456 82,313 14,845 4,727 4,438 14,208 — 350,583 Year-to-date Gross Charge-offs — — — — 451 — — — 451 Business Banking Pass 270,129 262,535 204,874 87,346 96,371 321,360 96,618 523 1,339,756 Special mention — 55 251 224 33 3,508 37 172 4,280 Substandard — 16 2,486 448 3,170 9,898 99 612 16,729 Doubtful — — — — — — — — — Total Business Banking 270,129 262,606 207,611 88,018 99,574 334,766 96,754 1,307 1,360,765 Year-to-date Gross Charge-offs — 67 43 1 88 1,073 34 — 1,306 Consumer Real Estate Pass 311,887 334,879 147,652 101,999 67,402 183,283 551,368 22,206 1,720,676 Special mention — — — — — 189 — — 189 Substandard — 583 198 42 488 6,322 712 2,568 10,913 Doubtful — — — — — — — — — Total Consumer Real Estate 311,887 335,462 147,850 102,041 67,890 189,794 552,080 24,774 1,731,778 Year-to-date Gross Charge-offs — 1 — 5 1 43 75 296 421 Other Consumer Pass 11,286 11,965 6,483 3,842 1,062 526 76,426 3,109 114,699 Special mention — — — — — — — — — Substandard — — 24 5 20 146 — 3 198 Doubtful — — — — — — — — — Total Other Consumer 11,286 11,965 6,507 3,847 1,082 672 76,426 3,112 114,897 Year-to-date Gross Charge-offs 830 146 175 19 37 5 — 288 1,500 Pass 1,117,247 1,318,412 1,060,514 499,034 595,848 1,473,853 1,253,528 25,838 7,344,274 Special Mention 189 1,681 16,493 224 24,920 87,973 4,163 172 135,815 Substandard — 843 17,218 4,445 24,734 88,385 34,444 3,183 173,252 Doubtful — — — — — — — — — Total Loan Balance $ 1,117,436 $ 1,320,936 $ 1,094,225 $ 503,703 $ 645,502 $ 1,650,211 $ 1,292,135 $ 29,193 $ 7,653,341 Year-to-date Gross Charge-offs $ 830 $ 214 $ 218 $ 25 $ 3,989 $ 18,669 $ 109 $ 584 $ 24,638 We monitor the delinquent status of the commercial and consumer portfolios on a monthly basis. Loans are considered nonaccrual when interest and principal are 90 days or more past due or management has determined that a material deterioration in the borrower’s financial condition exists. The risk of loss is generally highest for nonaccrual loans. The following tables present loan balances by year of origination and accrual and nonaccrual status for our portfolio segments as of the dates presented: June 30, 2024 (dollars in thousands) 2024 2023 2022 2021 2020 2019 and Prior Revolving Revolving-Term Total Commercial Real Estate Accrual $ 48,148 $ 278,373 $ 372,954 $ 451,757 $ 222,926 $ 1,253,370 $ 30,627 $ — $ 2,658,155 Nonaccrual — — 994 — — 13,378 — — 14,372 Total Commercial Real Estate 48,148 278,373 373,948 451,757 222,926 1,266,748 30,627 — 2,672,527 Commercial and Industrial Accrual 33,977 177,317 220,542 178,477 48,888 236,335 521,687 — 1,417,223 Nonaccrual — 130 — 343 — 8 4,251 — 4,732 Total Commercial and Industrial 33,977 177,447 220,542 178,820 48,888 236,343 525,938 — 1,421,955 Commercial Construction Accrual 31,952 110,187 124,661 67,115 14,490 3,890 10,432 — 362,727 Nonaccrual — — — — — 4,960 — — 4,960 Total Commercial Construction 31,952 110,187 124,661 67,115 14,490 8,850 10,432 — 367,687 Business Banking Accrual 77,648 250,347 232,460 185,121 81,697 383,427 92,819 1,810 1,305,329 Nonaccrual — — 195 — 134 3,292 — 35 3,656 Total Business Banking 77,648 250,347 232,655 185,121 81,831 386,719 92,819 1,845 1,308,985 Consumer Real Estate Accrual 110,596 334,745 328,370 142,185 97,774 242,117 551,944 25,118 1,832,849 Nonaccrual — 473 376 — 680 3,012 523 1,843 6,907 Total Consumer Real Estate 110,596 335,218 328,746 142,185 98,454 245,129 552,467 26,961 1,839,756 Other Consumer Accrual 5,088 8,572 9,429 4,787 2,591 819 66,860 4,284 102,430 Nonaccrual — 7 — 5 69 149 — — 230 Total Other Consumer 5,088 8,579 9,429 4,792 2,660 968 66,860 4,284 102,660 Accrual 307,409 1,159,541 1,288,416 1,029,442 468,366 2,119,958 1,274,369 31,212 7,678,713 Nonaccrual — 610 1,565 348 883 24,799 4,774 1,878 34,857 Total Loan Balance $ 307,409 $ 1,160,151 $ 1,289,981 $ 1,029,790 $ 469,249 $ 2,144,757 $ 1,279,143 $ 33,090 $ 7,713,570 December 31, 2023 (dollars in thousands) 2023 2022 2021 2020 2019 2018 and Prior Revolving Revolving-Term Total Commercial Real Estate Accrual $ 276,677 $ 324,469 $ 439,308 $ 240,256 $ 419,371 $ 920,316 $ 32,418 $ — $ 2,652,815 Nonaccrual — — — — — 6,320 — — 6,320 Total Commercial Real Estate 276,677 324,469 439,308 240,256 419,371 926,636 32,418 — 2,659,135 Commercial and Industrial Accrual 171,861 231,978 210,636 54,696 52,858 193,257 520,019 — 1,435,305 Nonaccrual — — — — — 648 230 — 878 Total Commercial and Industrial 171,861 231,978 210,636 54,696 52,858 193,905 520,249 — 1,436,183 Commercial Construction Accrual 75,596 154,456 82,313 14,845 151 4,054 14,208 — 345,623 Nonaccrual — — — — 4,576 384 — — 4,960 Total Commercial Construction 75,596 154,456 82,313 14,845 4,727 4,438 14,208 — 350,583 Business Banking Accrual 270,129 262,606 207,611 87,979 99,354 330,902 96,754 1,283 1,356,618 Nonaccrual — — — 39 220 3,864 — 24 4,147 Total Business Banking 270,129 262,606 207,611 88,018 99,574 334,766 96,754 1,307 1,360,765 Consumer Real Estate Accrual 311,887 335,086 147,689 101,518 67,577 186,909 551,858 22,942 1,725,466 Nonaccrual — 376 161 523 313 2,885 222 1,832 6,312 Total Consumer Real Estate 311,887 335,462 147,850 102,041 67,890 189,794 552,080 24,774 1,731,778 Other Consumer Accrual 11,286 11,965 6,499 3,656 1,082 541 76,426 3,112 114,567 Nonaccrual — — 8 191 — 131 — — 330 Total Other Consumer 11,286 11,965 6,507 3,847 1,082 672 76,426 3,112 114,897 Accrual 1,117,436 1,320,560 1,094,056 502,950 640,393 1,635,979 1,291,683 27,337 7,630,394 Nonaccrual — 376 169 753 5,109 14,232 452 1,856 22,947 Total Loan Balance $ 1,117,436 $ 1,320,936 $ 1,094,225 $ 503,703 $ 645,502 $ 1,650,211 $ 1,292,135 $ 29,193 $ 7,653,341 The following tables present the age analysis of past due loans segregated by class of loans as of the dates presented: June 30, 2024 (dollars in thousands) Current 30-59 Days 60-89 Days Nonaccrual Total Past Total Loans Commercial real estate $ 2,648,879 $ 9,276 $ — $ 14,372 $ 23,648 $ 2,672,527 Commercial and industrial 1,417,223 — — 4,732 4,732 1,421,955 Commercial construction 362,727 — — 4,960 4,960 367,687 Business banking 1,301,340 2,265 1,724 3,656 7,645 1,308,985 Consumer real estate 1,827,336 2,516 2,997 6,907 12,420 1,839,756 Other consumer 102,112 185 133 230 548 102,660 Total $ 7,659,617 $ 14,242 $ 4,854 $ 34,857 $ 53,953 $ 7,713,570 December 31, 2023 (dollars in thousands) Current 30-59 Days 60-89 Days Nonaccrual Total Past Total Loans Commercial real estate $ 2,649,412 $ — $ 3,403 $ 6,320 $ 9,723 $ 2,659,135 Commercial and industrial 1,435,301 4 — 878 882 1,436,183 Commercial construction 345,623 — — 4,960 4,960 350,583 Business banking 1,351,048 3,525 2,045 4,147 9,717 1,360,765 Consumer real estate 1,719,751 3,352 2,363 6,312 12,027 1,731,778 Other consumer 114,138 366 63 330 759 114,897 Total $ 7,615,273 $ 7,247 $ 7,874 $ 22,947 $ 38,068 $ 7,653,341 The following tables present loans on nonaccrual status by class of loan for the year-to-date periods presented: June 30, 2024 (dollars in thousands) Beginning of Period Nonaccrual End of Period Nonaccrual Nonaccrual With No Related Allowance Interest Income Recognized on Nonaccrual (1) Commercial real estate $ 6,320 $ 14,372 $ 994 $ 68 Commercial and industrial 878 4,732 — 4 Commercial construction 4,960 4,960 4,576 — Business banking 4,147 3,656 — 74 Consumer real estate 6,312 6,907 — 206 Other consumer 330 230 — — Total $ 22,947 $ 34,857 $ 5,570 $ 352 (1) Represents only cash payments received and applied to interest on nonaccrual loans. December 31, 2023 (dollars in thousands) Beginning of Period Nonaccrual End of Period Nonaccrual Nonaccrual With No Related Allowance Interest Income Recognized on Nonaccrual (1) Commercial real estate $ 7,100 $ 6,320 $ 5,940 $ 46 Commercial and industrial 283 878 — 38 Commercial construction 384 4,960 4,576 — Business banking 4,490 4,147 — 209 Consumer real estate 6,526 6,312 — 308 Other consumer 269 330 — 2 Total $ 19,052 $ 22,947 $ 10,516 $ 603 (1) Represents only cash payments received and applied to interest on nonaccrual loans. The following tables present collateral-dependent loans as of the dates presented: June 30, 2024 Type of Collateral (dollars in thousands) Real Estate Business Commercial real estate $ 14,016 $ — Commercial and industrial — 4,495 Commercial construction 4,576 — Total $ 18,592 $ 4,495 December 31, 2023 Type of Collateral (dollars in thousands) Real Estate Business Commercial real estate $ 5,940 $ — Commercial construction 4,576 — Total $ 10,516 $ — The following tables present activity in the ACL for the periods presented: Six Months Ended June 30, 2024 (dollars in thousands) Commercial Commercial and Commercial Business Banking Consumer Other Total Loans Allowance for credit losses on loans: Balance at beginning of period $ 37,886 $ 34,538 $ 5,382 $ 12,858 $ 14,663 $ 2,639 $ 107,966 Provision for credit losses on loans (1) 3,938 532 (35) (1,862) 1,089 723 4,385 Charge-offs (5,205) (1,128) — (194) (471) (786) (7,784) Recoveries 458 793 — 81 95 156 1,583 Net (Charge-offs)/ Recoveries (4,747) (335) — (113) (376) (630) (6,201) Balance at End of Period $ 37,077 $ 34,735 $ 5,347 $ 10,883 $ 15,376 $ 2,732 $ 106,150 (1) Excludes the provision for credits losses for unfunded commitments. Six Months Ended June 30, 2023 (dollars in thousands) Commercial Commercial and Commercial Business Banking Consumer Other Total Loans Allowance for credit losses on loans: Balance at beginning of period $ 41,428 $ 25,710 $ 6,264 $ 12,547 $ 12,105 $ 3,286 $ 101,340 Impact of ASU 2022-02 — 75 215 251 278 (251) 568 Provision for credit losses on loans (1) (1,555) 8,356 258 1,340 1,038 264 9,701 Charge-offs — (15,220) — (662) (117) (682) (16,681) Recoveries 964 9,407 2 140 114 202 10,829 Net (Charge-offs)/Recoveries 964 (5,813) 2 (522) (3) (480) (5,852) Balance at End of Period $ 40,837 $ 28,328 $ 6,739 $ 13,616 $ 13,418 $ 2,819 $ 105,757 (1) Excludes the provision for credits losses for unfunded commitments. Three Months Ended June 30, 2024 (dollars in thousands) Commercial Commercial and Commercial Business Banking Consumer Other Total Allowance for credit losses on loans: Balance at beginning of period $ 35,612 $ 34,207 $ 5,149 $ 11,798 $ 15,410 $ 2,626 $ 104,802 Provision for credit losses on loans (1) 1,101 (149) 198 (868) 231 447 960 Charge-offs — — — (96) (332) (417) (845) Recoveries 364 677 — 49 67 76 1,233 Net (Charge-offs)/ Recoveries 364 677 — (47) (265) (341) 388 Balance at End of Period $ 37,077 $ 34,735 $ 5,347 $ 10,883 $ 15,376 $ 2,732 $ 106,150 (1) Excludes the provision for credits losses for unfunded commitments. Three Months Ended June 30, 2023 (dollars in thousands) Commercial Commercial and Commercial Business Banking Consumer Other Total Allowance for credit losses on loans: Balance at beginning of period $ 40,426 $ 31,297 $ 6,893 $ 13,680 $ 12,855 $ 2,962 $ 108,113 Provision for credit losses on loans (1) (544) 8,832 (154) (157) 550 84 8,611 Charge-offs — (11,808) — (10) (40) (364) (12,222) Recoveries 955 7 — 103 53 137 1,255 Net (Charge-offs)/Recoveries 955 (11,801) — 93 13 (227) (10,967) Balance at End of Period $ 40,837 $ 28,328 $ 6,739 $ 13,616 $ 13,418 $ 2,819 $ 105,757 (1) Excludes the provision for credit losses for unfunded commitments. |