| Loans, Allowance for Credit Losses and Credit Quality | LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY Loans Held for Investment and Allowance for Credit Losses The following table summarizes the change in allowance for credit losses by loan category, and bifurcates the amount of loans allocated to each loan category for the period indicated: Three Months Ended September 30, 2024 (Dollars in thousands) Commercial and Commercial Commercial Small Residential Other Consumer Total Allowance for credit losses Beginning balance $ 20,884 $ 80,501 $ 7,804 $ 4,059 $ 24,836 $ 11,755 $ 1,020 $ 150,859 Charge-offs (5,886) — — (163) — (38) (919) (7,006) Recoveries 3 — — 3 — 14 323 343 Provision for (release of) credit losses 936 19,121 (278) 206 (333) (570) 418 19,500 Ending balance (1) $ 15,937 $ 99,622 $ 7,526 $ 4,105 $ 24,503 $ 11,161 $ 842 $ 163,696 Three Months Ended September 30, 2023 (Dollars in thousands) Commercial and Commercial Commercial Small Residential Home Equity Other Consumer Total Allowance for credit losses Beginning balance $ 15,142 $ 78,396 $ 9,038 $ 3,606 $ 21,465 $ 12,433 $ 567 $ 140,647 Charge-offs — (5,072) — (112) — — (834) (6,018) Recoveries 111 — — 35 — 12 282 440 Provision for (release of) credit losses 1,681 1,078 (208) 385 1,682 101 781 5,500 Ending balance (1) $ 16,934 $ 74,402 $ 8,830 $ 3,914 $ 23,147 $ 12,546 $ 796 $ 140,569 Nine Months Ended September 30, 2024 (Dollars in thousands) Commercial and Commercial Commercial Small Residential Home Equity Other Consumer Total Allowance for credit losses Beginning balance $ 19,243 $ 74,148 $ 7,683 $ 3,963 $ 23,637 $ 12,797 $ 751 $ 142,222 Charge-offs (5,886) — — (332) — (49) (2,428) (8,695) Recoveries 90 — — 54 — 295 980 1,419 Provision for (release of) credit losses 2,490 25,474 (157) 420 866 (1,882) 1,539 28,750 Ending balance (1) $ 15,937 $ 99,622 $ 7,526 $ 4,105 $ 24,503 $ 11,161 $ 842 $ 163,696 Nine Months Ended September 30, 2023 (Dollars in thousands) Commercial and Commercial Commercial Small Residential Other Consumer Total Allowance for credit losses Beginning balance $ 27,559 $ 77,799 $ 10,762 $ 2,834 $ 20,973 $ 11,504 $ 988 $ 152,419 Charge-offs (23,471) (5,072) — (199) — — (1,858) (30,600) Recoveries 132 — — 74 — 38 756 1,000 Provision for (release of) credit losses 12,714 1,675 (1,932) 1,205 2,174 1,004 910 17,750 Ending balance (1) $ 16,934 $ 74,402 $ 8,830 $ 3,914 $ 23,147 $ 12,546 $ 796 $ 140,569 (1) Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $55.3 million and $58.1 million as of September 30, 2024 and September 30, 2023, respectively. The balance of allowance for credit losses increased to $163.7 million as of September 30, 2024 compared to $142.2 million at December 31, 2023, driven primarily by specific reserve allocations on certain commercial loans during the nine months ended September 30, 2024. For the purpose of estimating the allowance for credit losses, management segregated the loan portfolio into the portfolio segments detailed in the above tables. Each of these loan categories possesses unique risk characteristics that are considered when determining the appropriate level of allowance for each segment. Some of the characteristics unique to each loan category include: Commercial Portfolio • Commercial and Industrial : Consists of revolving, nonrevolving, and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of accounts receivable, inventory, plant and equipment, real estate, or other business assets. The primary source of repayment is operating cash flow and, secondarily, liquidation of assets. • Commercial Real Estate : Consists of mortgage loans to finance investment in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational and healthcare facilities, as well as other specific use properties and is inclusive of owner-occupied commercial properties. Loans are typically written with amortizing payment structures. Collateral values are determined based upon third party appraisals and evaluations. Permissible loan to value ratios at origination are governed by Company policy and regulatory guidelines. The primary source of repayment is cash flow from operating leases and rents and, secondarily, liquidation of assets. • Commercial Construction : Consists of short-term construction loans, revolving and nonrevolving credit lines and construction/permanent loans to finance the acquisition, development and construction or rehabilitation of real property. Project types include residential land development, one-to-four family, condominium, and multi-family home construction, commercial/retail, office, industrial, hotels, educational and healthcare facilities as well as other specific use properties. Loans may be written with non-amortizing or hybrid payment structures depending upon the type of project. Collateral values are determined based upon third party appraisals and evaluations. Permissible loan to value ratios at origination are governed by Company policy and regulatory guidelines. Repayment sources vary depending upon the type of project and may consist of proceeds from the sale or lease of units, operating cash flows or liquidation of other assets. • Small Business: Consists of revolving, term loan and mortgage obligations extended to sole proprietors and small businesses for purposes of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, or real estate if applicable. The primary source of repayment is operating cash flows and, secondarily, liquidation of assets. For the commercial portfolio the Company typically obtains personal guarantees for payment from individuals holding material ownership interests in the borrowing entities. Consumer Portfolio • Residential Real Estate : Residential mortgage loans held in the Company’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral. Collateral consists of mortgage liens on one-to-four family residential properties. Residential mortgage loans also include loans to construct owner-occupied one-to-four family residential properties. • Home Equity : Home equity loans and credit lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on one-to-four family homes, condominiums or vacation homes. Each home equity loan has a fixed rate and is billed in equal payments comprised of principal and interest. The majority of home equity lines of credit have a variable rate and are billed in interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the then outstanding principal balance plus all accrued interest over a predetermined repayment period, as set forth in the note. Additionally, the Company has the option of renewing each line of credit for additional draw periods. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established policy guidelines. • Other Consumer: Other consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines. These loans may be secured or unsecured. Credit Quality The Company continually monitors the asset quality of the loan portfolio using all available information. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as adversely risk-rated, delinquent, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to modify the contractual terms of certain loans to match the borrower’s ability to repay the loan based on their current financial condition. The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For the commercial portfolio, the Company utilizes a 10-point credit risk-rating system, which assigns a risk-grade to each loan obligation based on a number of quantitative and qualitative factors associated with a commercial or small business loan transaction. Factors considered include industry and market conditions, position within the industry, earnings trends, operating cash flow, asset/liability values, debt capacity, guarantor strength, management and controls, financial reporting, collateral, and other considerations. The risk-rating categories for the commercial portfolio are defined as follows: • Pass: Risk-rating “1” through “6” comprises loans ranging from ‘Substantially Risk Free’ which indicates borrowers are of unquestioned credit standing and the pinnacle of credit quality, well established companies with a very strong financial condition, and loans fully secured by cash collateral, through ‘Acceptable Risk,’ which indicates borrowers may exhibit declining earnings, strained cash flow, increasing or above average leverage and/or weakening market fundamentals that indicate below average asset quality, margins and market share. Collateral coverage is protective. • Special Mention: Borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Company’s asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned. • Substandard: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Loans may be inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. However, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation. • Doubtful: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely. • Loss: Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted. The Company utilizes a comprehensive, continuous strategy for evaluating and monitoring commercial credit quality. Initially, credit quality is determined at loan origination and is re-evaluated when subsequent actions, such as renewals, modifications or reviews, occur. Actively managed commercial borrowers are required to provide updated financial information at least annually which is carefully evaluated for any changes in credit quality. Larger loan relationships are subject to a full annual credit review by experienced credit professionals, while continuous portfolio monitoring techniques are employed to evaluate changes in credit quality for smaller loan relationships. Any changes in credit quality are reflected in risk-rating changes. Additionally, the Company retains an independent loan review firm to evaluate the credit quality of the commercial loan portfolio. The independent loan review process achieves significant penetration into the commercial loan portfolio and reports the results of these reviews to the Audit Committee of the Board of Directors on a quarterly basis. For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. As a result, for this portfolio the Company utilizes a pass/default risk-rating system, based on an age analysis (i.e., days past due) associated with each consumer loan. Under this structure, consumer loans less than 90 days past due are assigned a “pass” rating, while any consumer loans 90 days or more past due are assigned a “default” rating. The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of the dates indicated below: September 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Revolving converted to Term Total (1) (Dollars in thousands) Commercial and Pass $ 282,973 $ 188,687 $ 133,680 $ 61,678 $ 41,639 $ 129,637 $ 682,099 $ — $ 1,520,393 Special mention 11,775 194 946 346 — 113 4,702 — 18,076 Substandard 2,103 161 35 455 — 22 24,964 — 27,740 Doubtful — — — — — — 11,652 — 11,652 Loss — — — — — — — — — Total commercial and industrial $ 296,851 $ 189,042 $ 134,661 $ 62,479 $ 41,639 $ 129,772 $ 723,417 $ — $ 1,577,861 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ 5,886 $ — $ 5,886 Commercial real estate Pass $ 744,344 $ 1,053,780 $ 1,179,121 $ 1,256,074 $ 1,151,010 $ 2,298,419 $ 96,822 $ 1,116 $ 7,780,686 Special mention 7,442 6,350 29,443 13,085 12,691 101,133 — — 170,144 Substandard 32,609 13,017 25,442 29,264 31,070 6,076 — — 137,478 Doubtful — 54,637 — 11,660 — 7,415 — — 73,712 Loss — — — — — — — — — Total commercial real estate $ 784,395 $ 1,127,784 $ 1,234,006 $ 1,310,083 $ 1,194,771 $ 2,413,043 $ 96,822 $ 1,116 $ 8,162,020 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial construction Pass $ 140,421 $ 176,796 $ 218,298 $ 89,854 $ — $ 24,783 $ 27,213 $ 902 $ 678,267 Special mention — 1,925 15,540 6,065 — — — — 23,530 Substandard 31,125 — 9,120 — — — — — 40,245 Doubtful — — — — — — — — — Loss — — — — — — — — — Total commercial construction $ 171,546 $ 178,721 $ 242,958 $ 95,919 $ — $ 24,783 $ 27,213 $ 902 $ 742,042 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Small business Pass $ 38,687 $ 45,927 $ 45,358 $ 34,503 $ 22,766 $ 29,356 $ 50,009 $ 51 $ 266,657 Special mention — 104 27 174 — 224 784 — 1,313 Substandard 389 396 65 3 183 391 621 — 2,048 Doubtful — — — — — — — — — Loss — — — — — — — — — Total small business $ 39,076 $ 46,427 $ 45,450 $ 34,680 $ 22,949 $ 29,971 $ 51,414 $ 51 $ 270,018 Current-period gross write-offs $ 48 $ — $ 28 $ — $ — $ — $ 256 $ — $ 332 Residential real estate Pass $ 134,868 $ 482,280 $ 615,795 $ 387,127 $ 177,583 $ 640,992 $ — $ — $ 2,438,645 Default — 213 — 659 — 2,342 — — 3,214 Total residential real estate $ 134,868 $ 482,493 $ 615,795 $ 387,786 $ 177,583 $ 643,334 $ — $ — $ 2,441,859 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity Pass $ 14,034 $ 25,276 $ 34,092 $ 50,948 $ 46,614 $ 132,804 $ 813,118 $ 11,612 $ 1,128,498 Default — — — — — 170 1,532 235 1,937 Total home equity $ 14,034 $ 25,276 $ 34,092 $ 50,948 $ 46,614 $ 132,974 $ 814,650 $ 11,847 $ 1,130,435 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ 49 $ — $ 49 Other consumer (2) Pass $ 559 $ 486 $ 159 $ 703 $ 300 $ 1,279 $ 33,071 $ — $ 36,557 Default — — — — — 14 1 — 15 Total other consumer $ 559 $ 486 $ 159 $ 703 $ 300 $ 1,293 $ 33,072 $ — $ 36,572 Current-period gross write-offs $ 2,413 $ — $ — $ — $ — $ — $ 15 $ — $ 2,428 Total $ 1,441,329 $ 2,050,229 $ 2,307,121 $ 1,942,598 $ 1,483,856 $ 3,375,170 $ 1,746,588 $ 13,916 $ 14,360,807 Total current-period gross write-offs $ 2,461 $ — $ 28 $ — $ — $ — $ 6,206 $ — $ 8,695 September 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Revolving converted to Term Total (1) (Dollars in thousands) Commercial and Pass $ 303,838 $ 188,559 $ 94,714 $ 73,366 $ 45,741 $ 116,052 $ 737,335 $ — $ 1,559,605 Special mention 6,511 2,417 614 10,278 90 132 46,706 — 66,748 Substandard 1,933 4,707 1,074 132 1,165 806 16,833 — 26,650 Doubtful — — — — — — — — — Loss — — — — — — — — — Total commercial and industrial $ 312,282 $ 195,683 $ 96,402 $ 83,776 $ 46,996 $ 116,990 $ 800,874 $ — $ 1,653,003 Current-period gross write-offs $ — $ — $ — $ — $ — $ 34 $ 23,437 $ — $ 23,471 Commercial real estate Pass $ 795,830 $ 1,160,497 $ 1,338,792 $ 1,312,240 $ 610,009 $ 2,188,221 $ 68,496 $ 858 $ 7,474,943 Special mention 62,572 37,695 57,987 14,662 2,945 118,830 — — 294,691 Substandard 30,667 27,504 23,568 4,321 19,211 21,325 — — 126,596 Doubtful — — — — — — — — — Loss — — — — — — — — — Total commercial real estate $ 889,069 $ 1,225,696 $ 1,420,347 $ 1,331,223 $ 632,165 $ 2,328,376 $ 68,496 $ 858 $ 7,896,230 Current-period gross write-offs $ — $ 5,072 $ — $ — $ — $ — $ — $ — $ 5,072 Commercial construction Pass $ 146,278 $ 491,098 $ 201,730 $ 9,939 $ 27,304 $ 1,569 $ 17,248 $ — $ 895,166 Special mention 13,484 — 4,823 — — — — — 18,307 Substandard 9,440 26,199 16,330 — — — — — 51,969 Doubtful — — — — — — — — — Loss — — — — — — — — — Total commercial construction $ 169,202 $ 517,297 $ 222,883 $ 9,939 $ 27,304 $ 1,569 $ 17,248 $ — $ 965,442 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Small business Pass $ 40,551 $ 52,883 $ 40,706 $ 26,759 $ 13,759 $ 23,458 $ 43,759 $ — $ 241,875 Special mention — — — 155 — 186 295 — 636 Substandard 429 324 126 295 — 615 1,035 — 2,824 Doubtful — — — — — — — — — Loss — — — — — — — — — Total small business $ 40,980 $ 53,207 $ 40,832 $ 27,209 $ 13,759 $ 24,259 $ 45,089 $ — $ 245,335 Current-period gross write-offs $ — $ — $ 22 $ 37 $ — $ — $ 140 $ — $ 199 Residential real estate Pass $ 391,121 $ 645,593 $ 408,752 $ 186,334 $ 89,911 $ 612,878 $ — $ — $ 2,334,589 Default 219 — 393 135 942 1,824 — — 3,513 Total residential real estate $ 391,340 $ 645,593 $ 409,145 $ 186,469 $ 90,853 $ 614,702 $ — $ — $ 2,338,102 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Home equity Pass $ 21,729 $ 39,251 $ 56,216 $ 50,724 $ 30,039 $ 126,897 $ 765,079 $ 4,190 $ 1,094,125 Default — — — — — — 1,289 141 1,430 Total home equity $ 21,729 $ 39,251 $ 56,216 $ 50,724 $ 30,039 $ 126,897 $ 766,368 $ 4,331 $ 1,095,555 Current-period gross write-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Other consumer (2) Pass $ 538 $ 320 $ 1,370 $ 912 $ 410 $ 2,154 $ 24,843 $ — $ 30,547 Default — — — — — 19 2 — 21 Total other consumer $ 538 $ 320 $ 1,370 $ 912 $ 410 $ 2,173 $ 24,845 $ — $ 30,568 Current-period gross write-offs $ 1,836 $ — $ — $ — $ — $ 7 $ 15 $ — $ 1,858 Total $ 1,825,140 $ 2,677,047 $ 2,247,195 $ 1,690,252 $ 841,526 $ 3,214,966 $ 1,722,920 $ 5,189 $ 14,224,235 Total current -period gross write-offs $ 1,836 $ 5,072 $ 22 $ 37 $ — $ 41 $ 23,592 $ — $ 30,600 (1) Loan origination dates in the tables above reflect the original origination date, or the date of a material modification of a previously originated loan. (2) Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances and the associated gross write-offs. For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. However, the Company does supplement performance data with current Fair Isaac Corporation (“FICO”) scores and Loan to Value (“LTV”) estimates. Current FICO data is purchased and appended to all consumer loans on a regular basis. In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential real estate and home equity portfolios, periodically. The following table shows the weighted average FICO scores and the weighted average combined LTV ratios at the dates indicated below: September 30 December 31 Residential real estate portfolio FICO score (re-scored)(1) 755 754 LTV (re-valued)(2) 57.9 % 59.8 % Home equity portfolio FICO score (re-scored)(1) 769 770 LTV (re-valued)(2)(3) 43.4 % 43.3 % (1) The average FICO scores at September 30, 2024 are based upon rescores from September 2024 as available for previously originated loans, or origination score data for loans booked in September 2024. The average FICO scores at December 31, 2023 were based upon rescores available from December 2023, as available for previously originated loans, or origination score data for loans booked in December 2023. (2) The combined LTV ratios for September 30, 2024 are based upon updated automated valuations as of August 2024, when available, and/or the most current valuation data available. The combined LTV ratios for December 31, 2023 were based upon updated automated valuations as of November 2023, when available, and/or the most current valuation data available as of such date. The updated automated valuations provide new information on loans that may be available since the previous valuation was obtained. If no new information is available, the valuation will default to the previously obtained data or most recent appraisal. (3) For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines. Unfunded Commitments Management evaluates the need for a reserve on unfunded lending commitments in a manner consistent with loans held for investment. At September 30, 2024 and December 31, 2023, the Company's estimated reserve for unfunded commitments amounted to $1.4 million and $1.5 million, respectively. Asset Quality The Company’s philosophy toward managing its loan portfolios is predicated upon careful monitoring, which stresses early detection and response to delinquent and default situations. Delinquent loans are managed by a team of collection specialists and the Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame. As a general rule, loans 90 days or more past due with respect to principal or interest are classified as nonaccrual loans. The Company also may use discretion regarding other loans 90 days or more delinquent if the loan is well secured and/or in process of collection. The following table shows information regarding nonaccrual loans as of the dates indicated: Nonaccrual Balances September 30, 2024 December 31, 2023 With Allowance for Credit Losses Without Allowance for Credit Losses (1) Total With Allowance for Credit Losses Without Allowance for Credit Losses (1) Total (Dollars in thousands) Commercial and industrial $ 375 $ 11,652 $ 12,027 $ 19,890 $ 298 $ 20,188 Commercial real estate 77,951 — 77,951 11,911 11,041 22,952 Small business 501 — 501 394 4 398 Residential real estate 9,744 — 9,744 7,634 — 7,634 Home equity 3,992 — 3,992 3,171 — 3,171 Other consumer 33 — 33 40 — 40 Total nonaccrual loans $ 92,596 $ 11,652 $ 104,248 $ 43,040 $ 11,343 $ 54,383 (1) Nonaccrual balances reported above without an allowance for credit losses are attributable to loans evaluated on an individual basis where it was determined that there was no risk of loss due to sufficient underlying collateral values, or reflect partially charged-off loans, with no risk of further loss. It is the Company's policy to reverse any accrued interest when a loan is put on nonaccrual status, and, as such, the Company did not record any interest income on nonaccrual loans during the three and nine months ended September 30, 2024 and 2023, respectively, except for instances where nonaccrual loans were paid off in excess of the recorded book balance. Total accrued interest reversed against interest income amounted to $95,000 and $62,000 for the three months ended September 30, 2024 and 2023, respectively, and $594,000 and $487,000 for the nine months ended September 30, 2024 and 2023, respectively. The following table shows information regarding foreclosed residential real estate property at the dates indicated: September 30, 2024 December 31, 2023 (Dollars in thousands) Foreclosed residential real estate property held by the creditor $ 110 $ 110 Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure $ 1,686 $ 1,697 The following tables show the age analysis of past due financing receivables as of the dates indicated: September 30, 2024 30-59 days 60-89 days 90 days or more Total Past Due Total Number Principal Number Principal Number Principal Number Principal Current (Dollars in thousands) Loan Portfolio Commercial and industrial 3 $ 200 — $ — 5 $ 12,005 8 $ 12,205 $ 1,565,656 $ 1,577,861 Commercial real estate 5 1,839 3 2,056 3 20,657 11 24,552 8,137,468 8,162,020 Commercial construction — — — — — — — — 742,042 742,042 Small business 11 397 5 71 8 153 24 621 269,397 270,018 Residential real estate 19 3,624 8 1,597 9 1,617 36 6,838 2,435,021 2,441,859 Home equity 13 1,392 4 217 10 1,937 27 3,546 1,126,889 1,130,435 Other consumer (1) 421 264 7 24 2 15 430 303 36,269 36,572 Total 472 $ 7,716 27 $ 3,965 37 $ 36,384 536 $ 48,065 $ 14,312,742 $ 14,360,807 December 31, 2023 30-59 days 60-89 days 90 days or more Total Past Due Total Number Principal Number Principal Number Principal Number Principal Current (Dollars in thousands) Loan Portfolio Commercial and industrial 6 $ 398 1 $ 17,538 2 $ 673 9 $ 18,609 $ 1,561,377 $ 1,579,986 Commercial real estate 8 14,674 2 8,419 3 7,279 13 30,372 8,011,136 8,041,508 Commercial construction — — — — — — — — 849,586 849,586 Small business 6 400 1 20 6 243 13 663 251,293 251,956 Residential real estate 24 6,216 7 2,187 13 1,573 44 9,976 2,414,778 2,424,754 Home equity 23 1,640 4 1,238 10 529 37 3,407 1,094,219 1,097,626 Other consumer (1) 413 288 14 31 6 8 433 327 32,327 32,654 Total 480 $ 23,616 29 $ 29,433 40 $ 10,305 549 $ 63,354 $ 14,214,716 $ 14,278,070 (1) Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances. (2) The amount of net deferred costs on originated loans included in the ending balance was $6.2 million and $6.4 million at September 30, 2024 and December 31, 2023, respectively. Net unamortized discounts on acquired loans included in the ending balance were $8.3 million and $8.6 million at September 30, 2024 and December 31, 2023, respectively. Loan Modifications The following tables present the period end amortized cost basis of loans modified to borrowers experiencing financial difficulty during the periods indicated, disaggregated by class of financing receivable, type of modification granted and the financial effect of the modifications: Three Months Ended September 30, 2024 Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect (Dollars in thousands) Term Extension Commercial and industrial $ 5,985 0.38 % Added a weighted-average contractual term of 4 months to the life of the loans Commercial real estate 4,507 0.06 % Added a weighted-average contractual term of 5 months to the life of the loans Total $ 10,492 Nine Months Ended September 30, 2024 Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect (Dollars in thousands) Term Extension Commercial and industrial $ 8,368 0.53% Added a weighted-average contractual term of 7 months to the life of the loans Commercial real estate 37,380 0.46% Added a weighted-average contractual term of 1 year to the life of the loans Commercial construction 3,488 0.47% Added a weighted-average contractual term of 10 months to the life of the loans Residential real estate 297 0.01% Extended the contractual term on one loan by 6.2 years Total $ 49,533 Interest Rate Reduction Small business $ 42 0.02% Reduced contractual rate on one loan from 11.00% to 8.20% Home equity 64 0.01% Reduced contractual rate on one loan from 7.99% to 7.00% Total $ 106 Term Extension and Interest Rate Reduction Commercial and industrial $ 97 0.01% Extended the contractual term on one loan by 1.5 years and reduced the interest rate from 10.10% to 7.20% Small business 34 0.01% Extended the contractual term on one loan by 2.5 years and reduced the interest rate from 10.25% to 6.50% Home equity 69 0.01% Extended the contractual term on one loan by 8.1 years and reduced the interest rate from 10.00% to 6.80% Total $ 200 Other Than Insignificant Payment Delay Commercial and industrial $ 1,809 0.11% Modification was made with minimal financial effect Commercial real estate 6,350 0.08% Modification was made with minimal financial effect Total $ 8,159 Total Outstanding Modified $ 57,998 Three Months Ended September 30, 2023 Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect (Dollars in thousands) Term Extension Commercial and industrial $ 7,915 0.48 % Added a weighted-average contractual term of 2 months to the life of the loans Commercial real estate 719 0.01 % Added a weighted-average contractual term of 2.9 years to the life of the loans Total $ 8,634 Nine Months Ended September 30, 2023 Amortized Cost Basis % of Total Class of Financing Receivable Financial Effect (Dollars in thousands) Term Extension Commercial and industrial $ 16,108 0.97 % Added a weighted-average contractual term of 2 months to the life of the loans Commercial real estate 19,180 0.24 % Added a weighted-average contractual term of 1.8 years to the life of the loans Commercial construction 2,369 0.25 % Added a weighted-average contractual term of 2 months to the life of the loans Small business 105 0.04 % Added a weighted-average contractual term of 4.3 years to the life of the loans Total $ 37,762 Other Than Insignificant Payment Delay Commercial and industrial $ 2,805 0.17 % Modification was made with minimal financial effect Commercial real estate 7,013 0.09 % Modification was made with minimal financial effect Total $ 9,818 Term Extension and Interest Rate Reduction Small business $ 44 0.02 % Reduced the contractual interest rate on one loan from 10.00% to 6.50%; the financial effect of term extensions are included in term extension table shown above Total $ 44 Term Extension and Other Than Insignificant Payment Delay Commercial and industrial $ 1,965 0.12 % The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect Commercial real estate 6,857 0.09 % The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect Total $ 8,822 Total Outstanding Modified $ 56,446 The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables depict the amortized cost and payment status of loans that were modified during the previous 12 months as of the periods indicated: September 30, 2024 Payment Status (Amortized Cost Basis) Current 30-89 Days Past Due 90+ Days Past Due (Dollars in thousands) Loan Type Commercial and industrial $ 10,467 $ — $ — Commercial real estate 43,731 — — Commercial construction 3,488 — — Small business 146 34 — Residential real estate 297 — — Home equity 133 — — Total $ 58,262 $ 34 $ — September 30, 2023 Payment Status (Amortized Cost Basis) Current 30-89 Days Past Due 90+ Days Past Due (Dollars in thousands) Loan Type Commercial and industrial $ 7,409 $ 504 $ — Commercial real estate 16,252 660 — Small business 140 — — Total $ 23,801 $ 1,164 $ — The Company considers a loan to have defaulted when it reaches 90 days past due. At September 30, 2024, there were no loans modified to borrowers experiencing financial difficulty during the previous 12 months that subsequently defaulted during the three or nine months then ended. During the three and nine months ended September 30, 2023, there was one commercial real estate loan that had a payment default and was modified within the previous 12 months as a combination term extension and other-than-insignificant payment delay, which had an amortized cost basis of $6.7 million. At both September 30, 2024 and September 30, 2023, the Company had no additional commitments to lend to borrowers experiencing financial difficulty whose loans were modified and included in the above tables for the three and nine months then ended. Loan modifications to borrowers experiencing financial difficulty are evaluated on a collective basis with loans sharing similar risk characteristics in accordance with the current expected credit loss ("CECL") methodology |
