LOANS AND LEASES

3 Months Ended

Mar. 31, 2025

3. LOANS AND LEASES

Loans outstanding, excluding those held for sale, by general ledger classification, as of March 31, 2025 and December 31, 2024, consisted of the following:


			% of					% of
	March 31,		Totals			December 31,		Total
(Dollars in thousands)	2025		Loans			2024		Loans
Residential mortgage	$	629,538		10.95	%	$	614,840		11.15	%
Multifamily mortgage		1,775,132		30.88			1,799,754		32.65
Commercial mortgage		633,957		11.03			588,104		10.67
Commercial loans (including equipment financing)		2,520,256		43.85			2,389,105		43.34
Commercial construction		—		—			—		—
Home equity lines of credit		48,301		0.84			42,327		0.77
Consumer loans, including fixed rate home equity loans		140,443		2.44			77,785		1.41
Other loans		359		0.01			411		0.01
Total loans	$	5,747,986		100.00	%	$	5,512,326		100.00	%

In determining an appropriate amount for the allowance, the Bank segments and aggregated the loan portfolio based on common characteristics. The following pool segments identified as of March 31, 2025 and December 31, 2024 are based on the CECL methodology:


			% of					% of
	March 31,		Totals			December 31,		Total
(Dollars in thousands)	2025		Loans			2024		Loans
Primary residential mortgage	$	618,439		10.76	%	$	609,038		11.05	%
Junior lien loan on residence		51,087		0.89			45,307		0.82
Multifamily property		1,775,132		30.89			1,799,754		32.66
Owner-occupied commercial real estate		292,588		5.09			275,089		4.99
Investment commercial real estate		986,220		17.16			978,436		17.75
Commercial and industrial		1,611,043		28.04			1,489,466		27.03
Lease financing		253,112		4.41			222,497		4.04
Construction		15,983		0.28			11,204		0.20
Consumer and other		142,290		2.48			80,165		1.46
Total loans		5,745,894		100.00	%		5,510,956		100.00	%
Net deferred costs		2,092					1,370
Total loans including net deferred costs	$	5,747,986				$	5,512,326

The following tables present the recorded investment in nonaccrual and loans past due 90 days or over still on accrual by class of loans as of March 31, 2025 and December 31, 2024:


			March 31, 2025
	Nonaccrual				Loans Past Due
	With No				90 Days or Over
	Allowance				And Still
(In thousands)	for Credit Loss		Nonaccrual		Accruing Interest
Primary residential mortgage	$	2,743	$	2,743	$	—
Junior lien loan on residence		114		114		—
Multifamily property		21,202		53,104		—
Investment commercial real estate		9,723		11,653		—
Commercial and industrial		6,119		28,417		—
Lease financing		339		1,139		—
Total	$	40,240	$	97,170	$	—


			December 31, 2024
	Nonaccrual				Loans Past Due
	With No				90 Days or Over
	Allowance				And Still
(In thousands)	for Credit Loss		Nonaccrual		Accruing Interest
Primary residential mortgage	$	3,168	$	3,168	$	—
Junior lien loan on residence		92		92		—
Multifamily property		15,294		53,105		—
Investment commercial real estate		9,754		11,684		—
Commercial and industrial		5,394		30,881		—
Lease financing		434		1,234		—
Consumer and other		4		4		—
Total	$	34,140	$	100,168	$	—

The following tables present the aging of the recorded investment in past due loans as of March 31, 2025 and December 31, 2024 by class of loans, excluding nonaccrual loans:


	March 31, 2025
	30-59		60-89		90 Days or
	Days		Days		Greater		Total
(In thousands)	Past Due		Past Due		Past Due		Past Due
Primary residential mortgage	$	2,193	$	—	$	—	$	2,193
Multifamily property		19,384		—		—		19,384
Commercial and industrial		6,348		—		—		6,348
Lease financing		52		—		—		52
Consumer and other		346		—		—		346
Total	$	28,323	$	—	$	—	$	28,323


	December 31, 2024
	30-59		60-89		90 Days or
	Days		Days		Greater		Total
(In thousands)	Past Due		Past Due		Past Due		Past Due
Primary residential mortgage	$	1,143	$	199	$	—	$	1,342
Junior lien on residence		—		23		—		23
Commercial and industrial		1,696		1,809		—		3,505
Total	$	2,839	$	2,031	$	—	$	4,870

Credit Quality Indicators:

The Company places all commercial loans into various credit risk rating categories based on an assessment of the expected ability of the borrowers to properly service their debt. The assessment considers numerous factors including, but not limited to, current financial information on the borrower, historical payment experience, strength of any guarantor, nature of and value of any collateral, acceptability of the loan structure and documentation, relevant public information and current economic trends. This credit risk rating analysis is performed when the loan is initially underwritten and then annually based on set criteria in the loan policy.

In addition, the Bank has engaged an independent loan review firm to validate risk ratings and to ensure compliance with our policies and procedures. This review of the following types of loans is performed quarterly:

•

A large sample of relationships or new lending to existing relationships greater than $1,000,000 booked since the prior review;

•

All criticized and classified rated borrowers with relationship exposure of more than $500,000;

•

A large sample of Pass-rated (including Pass Watch) borrowers with total relationships in excess of $1,000,000 and a small sample of Pass related relationships less than $1,000,000;

•

All leveraged loans of $1,000,000 or greater;

•

At least two borrowing relationships managed by each commercial banker;

•

Any new Federal Reserve Board Regulation O loan commitments over $1,000,000; and

•

Any other credits requested by Bank senior management or a member of the Board of Directors and any borrower for which the reviewer determines a review is warranted based upon knowledge of the portfolio, local events, industry stresses, etc.

The review excludes borrowers with commitments of less than $500,000.

The Company uses the following regulatory definitions for criticized and classified risk ratings:

Special Mention: These loans have a potential weakness that deserves Management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loans or of the institution’s credit position at some future date.

Substandard: These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: These loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions and values.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass-rated loans.

With the adoption of CECL, loans that are in the process of or expected to be in foreclosure are deemed to be collateral dependent with respect to measuring potential loss and allowance adequacy and are individually evaluated by Management. Loans that do not share common risk characteristics are also evaluated on an individual basis. All other loans are evaluated using a non-linear discounted cash flow methodology for measuring potential loss and allowance adequacy.

The following is a summary of the credit risk profile of loans by internally assigned grade as of March 31, 2025 and December 31, 2024 based on originations for the periods indicated; the years represent the year of origination for non-revolving loans:


	Grade as of March 31, 2025 for Loans Originated During
											2020				Revolving-
(In thousands)	2025		2024		2023		2022		2021		and Prior		Revolving		Term		Total
Primary residential mortgage:
Pass	$	22,633	$	73,135	$	89,032	$	107,346	$	72,127	$	245,103	$	—	$	5,647	$	615,023
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		1,064		92		—		2,260		—		—		3,416
Doubtful		—		—		—		—		—		—		—		—		—
Total primary residential mortgages		22,633		73,135		90,096		107,438		72,127		247,363		—		5,647		618,439
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Junior lien loan on residence:
Pass		—		—		739		1,076		81		890		42,288		5,899		50,973
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		113		1		114
Doubtful		—		—		—		—		—		—		—		—		—
Total junior lien loan on residence		—		—		739		1,076		81		890		42,401		5,900		51,087
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Multifamily property:
Pass		6,800		25,529		51,453		453,658		598,181		509,225		2,160		43,408		1,690,414
Special mention		—		—		—		—		11,940		8,996		—		—		20,936
Substandard		—		—		—		13,366		7,195		43,221		—		—		63,782
Doubtful		—		—		—		—		—		—		—		—		—
Total multifamily property		6,800		25,529		51,453		467,024		617,316		561,442		2,160		43,408		1,775,132
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Owner-occupied commercial real estate:
Pass		20,654		32,477		4,161		21,732		43,089		140,060		17,488		10,249		289,910
Special mention		—		—		—		—		1,136		—		225		—		1,361
Substandard		—		—		—		—		—		1,317		—		—		1,317
Doubtful		—		—		—		—		—		—		—		—		—
Total owner-occupied commercial real estate		20,654		32,477		4,161		21,732		44,225		141,377		17,713		10,249		292,588
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Investment commercial real estate:
Pass		43,780		43,409		123,410		145,438		98,801		421,240		23,794		39,667		939,539
Special mention		—		—		—		22,482		—		12,547		—		—		35,029
Substandard		—		—		—		9,723		—		1,929		—		—		11,652
Doubtful		—		—		—		—		—		—		—		—		—
Total investment commercial real estate		43,780		43,409		123,410		177,643		98,801		435,716		23,794		39,667		986,220
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial and industrial:
Pass		111,618		383,092		111,045		122,946		117,121		26,260		643,674		16,512		1,532,268
Special mention		—		—		210		—		9,554		321		6,536		1,301		17,922
Substandard		—		10,289		1,886		19,071		52		6,389		9,772		13,394		60,853
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial and industrial		111,618		393,381		113,141		142,017		126,727		32,970		659,982		31,207		1,611,043
Current period gross charge-offs		—		—		1,858		446		—		45		—		—		2,349

Lease financing:
Pass		44,752		44,739		41,934		36,390		45,164		38,994		—		—		251,973
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		800		—		—		339		—		—		1,139
Doubtful		—		—		—		—		—		—		—		—		—
Total lease financing		44,752		44,739		42,734		36,390		45,164		39,333		—		—		253,112


	Grade as of March 31, 2025 for Loans Originated During
											2020				Revolving-
(In thousands)	2025		2024		2023		2022		2021		and Prior		Revolving		Term		Total
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Construction:
Pass		—		—		—		—		—		—		15,983		—		15,983
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction loans		—		—		—		—		—		—		15,983		—		15,983
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer and other loans:
Pass		74,174		19,303		—		—		198		2,822		43,022		2,771		142,290
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total consumer and other loans		74,174		19,303		—		—		198		2,822		43,022		2,771		142,290
Current period gross charge-offs		—		—		—		—		—		4		—		7		11

Total:
Pass		324,411		621,684		421,774		888,586		974,762		1,384,594		788,409		124,153		5,528,373
Special mention		—		—		210		22,482		22,630		21,864		6,761		1,301		75,248
Substandard		—		10,289		3,750		42,252		7,247		55,455		9,885		13,395		142,273
Doubtful		—		—		—		—		—		—		—		—		—
Total Loans	$	324,411	$	631,973	$	425,734	$	953,320	$	1,004,639	$	1,461,913	$	805,055	$	138,849	$	5,745,894
Total Current Period Gross Charge-offs	$	—	$	—	$	1,858	$	446	$	—	$	49	$	—	$	7	$	2,360


	Grade as of December 31, 2024 for Loans Originated During
											2019				Revolving-
(In thousands)	2024		2023		2022		2021		2020		and Prior		Revolving		Term		Total
Primary residential mortgage:
Pass	$	73,532	$	90,214	$	109,903	$	73,777	$	53,434	$	198,266	$	405	$	5,663	$	605,194
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		1,075		93		—		442		2,234		—		—		3,844
Doubtful		—		—		—		—		—		—		—		—		—
Total primary residential mortgages		73,532		91,289		109,996		73,777		53,876		200,500		405		5,663		609,038
Current period gross charge-offs		—		43		—		—		—		—		—		—		43

Junior lien loan on residence:
Pass		1,357		2,468		1,874		419		55		2,409		30,792		5,841		45,215
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		91		1		92
Doubtful		—		—		—		—		—		—		—		—		—
Total junior lien loan on residence		1,357		2,468		1,874		419		55		2,409		30,883		5,842		45,307
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Multifamily property:
Pass		29,275		51,583		456,162		602,288		117,288		414,192		1,950		43,488		1,716,226
Special mention		—		—		—		11,961		—		7,719		—		—		19,680
Substandard		—		—		13,366		7,195		—		43,287		—		—		63,848
Doubtful		—		—		—		—		—		—		—		—		—
Total multifamily property		29,275		51,583		469,528		621,444		117,288		465,198		1,950		43,488		1,799,754
Current period gross charge-offs		—		—		—		2,088		—		3,291		—		—		5,379

Owner-occupied commercial real estate:
Pass		32,693		7,662		24,802		43,469		18,970		126,666		14,647		3,707		272,616
Special mention		—		—		—		1,148		—		—		—		—		1,148
Substandard		—		—		—		—		—		1,325		—		—		1,325
Doubtful		—		—		—		—		—		—		—		—		—
Total owner-occupied commercial real estate		32,693		7,662		24,802		44,617		18,970		127,991		14,647		3,707		275,089
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Investment commercial real estate:
Pass		39,906		123,864		169,645		136,994		55,551		371,046		18,473		38,620		954,099
Special mention		—		—		—		—		—		12,653		—		—		12,653
Substandard		—		—		9,754		—		—		1,930		—		—		11,684
Doubtful		—		—		—		—		—		—		—		—		—
Total investment commercial real estate		39,906		123,864		179,399		136,994		55,551		385,629		18,473		38,620		978,436
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial and industrial:
Pass		425,315		127,304		133,067		132,237		10,760		33,985		537,844		12,554		1,413,066
Special mention		—		210		—		12,205		—		187		—		435		13,037
Substandard		10,307		4,352		19,252		52		2,040		4,417		12,484		10,448		63,352
Doubtful		—		—		—		—		—		—		—		11		11.00
Total commercial and industrial		435,622		131,866		152,319		144,494		12,800		38,589		550,328		23,448		1,489,466
Current period gross charge-offs		93		—		—		—		241		—		—		11		345

Lease financing:
Pass		46,585		43,887		38,297		47,659		23,711		21,124		—		—		221,263
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		800		—		—		—		434		—		—		1,234
Doubtful		—		—		—		—		—		—		—		—		—
Total lease financing		46,585		44,687		38,297		47,659		23,711		21,558		—		—		222,497


	Grade as of December 31, 2024 for Loans Originated During
											2019				Revolving-
(In thousands)	2024		2023		2022		2021		2020		and Prior		Revolving		Term		Total
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Construction:
Pass		—		—		—		—		—		—		11,204		—		11,204
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction loans		—		—		—		—		—		—		11,204		—		11,204
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer and other loans:
Pass		31,687		100		4,943		3,265		120		4,009		33,194		2,843		80,161
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		4		—		4
Doubtful		—		—		—		—		—		—		—		—		—
Total consumer and other loans		31,687		100		4,943		3,265		120		4,009		33,198		2,843		80,165
Current period gross charge-offs		—		—		—		—		—		3		—		36		39

Total:
Pass		680,350		447,082		938,693		1,040,108		279,889		1,171,697		648,509		112,716		5,319,044
Special mention		—		210		—		25,314		—		20,559		—		435		46,518
Substandard		10,307		6,227		42,465		7,247		2,482		53,627		12,579		10,449		145,383
Doubtful		—		—		—		—		—		—		—		11		11
Total Loans	$	690,657	$	453,519	$	981,158	$	1,072,669	$	282,371	$	1,245,883	$	661,088	$	123,611	$	5,510,956
Total Current Period Gross Charge-offs	$	93	$	43	$	—	$	2,088	$	241	$	3,294	$	—	$	47	$	5,806

At March 31, 2025, $97.2 million of substandard loans were individually evaluated, compared to $99.8 million at December 31, 2024. The slight decrease in individually evaluated substandard loans was primarily due to a $1.9 million charge-off recorded on one commercial and industrial relationship during the first quarter of 2025. The increase in special mention loans was primarily due to increases of $9.0 million in multifamily, $22.5 million in investment commercial real estate and $5.4 million in C&I loans during the first three months of 2025.

Loan Modifications:

On January 1, 2023, the Company adopted Accounting Standards Update 2022-02, which replaced the accounting and recognition of troubled debt restructurings. The Company will provide modifications, which may include other than insignificant delays in payment of amounts due, extension of the terms of the notes or reduction in the interest rates on the notes. In certain instances, the Company may grant more than one type of modification. All accruing modified loans were paying in accordance with their modified terms as of March 31, 2025. The Company has not committed to lend additional amounts as of March 31, 2025 to customers with outstanding loans that are classified as modified loans.

There were several loan modifications made during the first three months of 2025, which included three multifamily loans, one primary residential mortgage, and commercial and industrial loans to four different borrowers of $17.6 million, $295,000 and $11.1 million, respectively.

The following table provides information related to the modifications completed during the three months ended March 31, 2025 by pool segment and type of concession granted:


	Significant Payment Delay
	Three Months Ended March 31, 2025
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Primary residential mortgage	$	295		0.05	%
Multifamily property		8,303		0.47	%
Commercial and industrial		10,689		0.66	%
Total	$	19,287		1.18	%


	Significant Payment Delay
	and Term Extension
	Three Months Ended March 31, 2025
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Commercial and industrial	$	416		0.03	%
Total	$	416		0.03	%


	Interest Rate Reduction
	and Significant Payment Delay
	Three Months Ended March 31, 2025
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Multifamily property	$	9,307		0.52	%
Total	$	9,307		0.52	%

The following table provides information related to the modifications during the three months ended March 31, 2024 by pool segment and type of concession granted:


	Interest Rate Reduction and Term Extension
	Three Months Ended March 31, 2024
			% of Total
	Amortized		Class of
	Cost Basis		Financing
(Dollars in thousands)	at Period End		Receivable
Commercial and industrial	$	12,311		0.96	%
Total	$	12,311		0.96	%

The following table depicts the payment status of the loans that were modified to a borrower experiencing financial difficulties as of March 31, 2025:


	Payment Status at March 31, 2025
			30-89 Days		90+ Days
(Dollars in thousands)	Current		Past Due		Past Due
Primary residential mortgage	$	637	$	295	$	—
Multifamily property		9,307		8,303		—
Investment commercial real estate		17,804		—		—
Commercial and industrial		22,851		4,993		2,976
Total	$	50,599	$	13,591	$	2,976

The following table depicts the payment status of the loans that were modified to a borrower experiencing financial difficulties as of March 31, 2024:


	Payment Status at March 31, 2024
			30-89 Days		90+ Days
(Dollars in thousands)	Current		Past Due		Past Due
Commercial and industrial	$	12,311	$	3,198	$	—
Total	$	12,311	$	3,198	$	—

The following table presents loans by class modified that failed to comply with the modified terms in the twelve months following modification and resulted in a payment default at March 31, 2025:


	Amortized Cost Basis of Modified Loans
	That Subsequently Defaulted
	Three Months Ended March 31, 2025
			Significant Pay
	Significant		Delay and Term
(Dollars in thousands)	Pay Delay		Extension
Primary residential mortgage	$	932	$	—
Multifamily property		8,303		—
Investment commercial real estate		—		17,804
Commercial and industrial		—		5,203
Total	$	9,235	$	23,007

The following table presents loans by class modified that failed to comply with the modified terms in the twelve months following modification and resulted in a payment default at March 31, 2024:


	Amortized Cost Basis of Modified Loans
	That Subsequently Defaulted
	Three Months Ended March 31, 2024
	Significant		Interest
(Dollars in thousands)	Pay Delay		Rate Reduction
Commercial and industrial	$	—	$	2,949
Total	$	—	$	2,949