Loans and Allowance for Credit Losses on Loans HFI

6 Months Ended

Jun. 30, 2025

Loans and Allowance for Credit Losses on Loans HFI

Loans and allowance for credit losses on loans HFI

Loans outstanding as of June 30, 2025 and December 31, 2024, by class of financing receivable are as follows:


	June 30,		December 31,

	2025		2024
Commercial and industrial	$	1,788,911	$	1,691,213
Construction	1,022,678		1,087,732
Residential real estate:
1-to-4 family mortgage	1,660,696		1,616,754
Residential line of credit	641,433		602,475
Multi-family mortgage	587,254		653,769
Commercial real estate:
Owner-occupied	1,370,123		1,357,568
Non-owner occupied	2,198,689		2,099,129
Consumer and other	604,498		493,744
Gross loans	9,874,282		9,602,384
Less: Allowance for credit losses on loans HFI	(148,948)		(151,942)
Net loans	$	9,725,334	$	9,450,442

As of June 30, 2025 and December 31, 2024, $987,320 and $988,177, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,723,324 and $1,620,510, respectively, of qualifying commercial mortgage loans were pledged to the FHLB system securing advances against the Bank’s line of credit. Additionally, as of June 30, 2025 and December 31, 2024, qualifying commercial and industrial, construction and consumer loans, of $2,692,689 and $2,561,352, respectively, were pledged to the Federal Reserve under the Borrower-in-Custody program.

The amortized cost of loans HFI on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the balance sheet. As of June 30, 2025 and December 31, 2024, accrued interest receivable on loans HFI amounted to $42,757 and $40,970, respectively.

Credit Quality - Commercial Type Loans

The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics may be evaluated individually.

The Company uses the following definitions for risk ratings:


			Pass.			Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.




			Special Mention.			Loans rated Special Mention are those that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk.




			Classified.			Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans 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 loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.

Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.

The following tables present the credit quality of the Company's commercial type loan portfolio as of June 30, 2025 and December 31, 2024 and the gross charge-offs for the six months ended June 30, 2025 and the year ended December 31, 2024 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.





As of and for the six months ended June 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	134,434	$	176,807	$	161,399	$	98,991	$	45,240	$	106,721	$	995,651	$	1,719,243
Special Mention	59		1,800		2,193		2,091		136		5,246		27,839		39,364
Classified	149		65		204		15,673		1,697		6,108		6,408		30,304

Total	134,642		178,672		163,796		116,755		47,073		118,075		1,029,898		1,788,911

Current-period gross charge-offs	—		—		54		—		—		2,314		603		2,971
Construction
Pass	105,995		186,906		65,142		249,476		84,739		67,132		204,970		964,360
Special Mention	—		—		780		11,663		39		16		—		12,498
Classified	—		154		2,917		20,410		253		8,064		14,022		45,820

Total	105,995		187,060		68,839		281,549		85,031		75,212		218,992		1,022,678

Current-period gross charge-offs	—		—		—		—		—		—		—		—
Residential real estate:

Multi-family mortgage
Pass	16,921		17,080		3,709		192,237		204,404		118,911		24,410		577,672
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		—		9,564		18		—		9,582

Total	16,921		17,080		3,709		192,237		213,968		118,929		24,410		587,254


Current-period gross charge-offs	—		—		—		—		—		—		—		—
Commercial real estate:
Owner occupied
Pass	87,430		178,509		98,884		245,159		199,869		431,728		102,403		1,343,982
Special Mention	—		—		—		1,152		6,273		6,392		170		13,987
Classified	—		—		—		5,889		265		5,613		387		12,154

Total	87,430		178,509		98,884		252,200		206,407		443,733		102,960		1,370,123

Current-period gross charge-offs	—		—		—		—		—		—		17		17
Non-owner occupied
Pass	106,405		199,184		47,425		500,050		448,941		781,611		94,785		2,178,401
Special Mention	—		—		4,800		—		498		10,151		—		15,449
Classified	—		—		—		—		—		4,839		—		4,839

Total	106,405		199,184		52,225		500,050		449,439		796,601		94,785		2,198,689




Current-period gross charge-offs	—		—		—		—		—		—		—		—
Total commercial loan types
Pass	451,185		758,486		376,559		1,285,913		983,193		1,506,103		1,422,219		6,783,658
Special Mention	59		1,800		7,773		14,906		6,946		21,805		28,009		81,298
Classified	149		219		3,121		41,972		11,779		24,642		20,817		102,699

Total	$	451,393	$	760,505	$	387,453	$	1,342,791	$	1,001,918	$	1,552,550	$	1,471,045	$	6,967,655
Current-period gross charge-offs	$	—	$	—	$	54	$	—	$	—	$	2,314	$	620	$	2,988





As of and for the year ended December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	194,185	$	182,677	$	130,148	$	56,460	$	29,735	$	104,236	$	909,398	$	1,606,839
Special Mention	2,684		2,425		7,609		277		285		2,015		24,345		39,640
Classified	—		175		19,125		4,424		1,659		6,201		13,150		44,734

Total	196,869		185,277		156,882		61,161		31,679		112,452		946,893		1,691,213
Current-period gross charge-offs	—		116		950		506		1,234		7		8,267		11,080

Construction
Pass	190,058		116,122		349,716		99,225		27,616		54,099		199,596		1,036,432
Special Mention	156		87		15,432		389		10		576		—		16,650
Classified	—		—		7,314		290		8,335		—		18,711		34,650

Total	190,214		116,209		372,462		99,904		35,961		54,675		218,307		1,087,732
Current-period gross charge-offs	—		—		122		—		—		—		—		122

Residential real estate:

Multi-family mortgage
Pass	40,076		3,800		232,415		223,076		51,948		69,652		21,883		642,850
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		9,919		—		1,000		—		10,919

Total	40,076		3,800		232,415		232,995		51,948		70,652		21,883		653,769
Current-period gross charge-offs	—		—		—		—		—		—		—		—


Commercial real estate:
Owner occupied
Pass	185,416		103,060		247,049		215,798		102,580		396,288		84,226		1,334,417
Special Mention	—		—		1,370		2,582		—		6,133		—		10,085
Classified	—		—		6,324		235		61		5,371		1,075		13,066

Total	185,416		103,060		254,743		218,615		102,641		407,792		85,301		1,357,568
Current-period gross charge-offs	—		—		—		—		—		—		—		—

Non-owner occupied
Pass	198,591		36,027		526,417		445,598		111,943		689,158		58,255		2,065,989
Special Mention	—		4,836		—		1,527		—		19,311		—		25,674
Classified	—		—		—		136		—		7,330		—		7,466

Total	198,591		40,863		526,417		447,261		111,943		715,799		58,255		2,099,129
Current-period gross charge-offs	—		—		—		—		—		—		—		—

Total commercial loan types
Pass	808,326		441,686		1,485,745		1,040,157		323,822		1,313,433		1,273,358		6,686,527
Special Mention	2,840		7,348		24,411		4,775		295		28,035		24,345		92,049
Classified	—		175		32,763		15,004		10,055		19,902		32,936		110,835
Total	$	811,166	$	449,209	$	1,542,919	$	1,059,936	$	334,172	$	1,361,370	$	1,330,639	$	6,889,411
Current-period gross charge-offs	—		116		1,072		506		1,234		7		8,267		11,202

Credit Quality - Consumer Type Loans

For consumer and residential loan classes, the Company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest.

The following tables present the credit quality by classification (performing or nonperforming) of the Company’s consumer type loan portfolio as of June 30, 2025 and December 31, 2024 and the gross charge-offs for the six months ended June 30, 2025 and the year ended December 31, 2024 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.





As of and for the six months ended June 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total





Residential real estate:
1-to-4 family mortgage
Performing	$	158,292	$	205,150	$	147,513	$	417,939	$	338,939	$	368,099	$	—	$	1,635,932
Nonperforming	—		194		907		8,660		6,218		8,785		—		24,764
Total	158,292		205,344		148,420		426,599		345,157		376,884		—		1,660,696
Current-period gross charge-offs	—		—		3		—		—		433		—		436
Residential line of credit
Performing	—		—		—		—		—		—		639,625		639,625
Nonperforming	—		—		—		—		—		—		1,808		1,808
Total	—		—		—		—		—		—		641,433		641,433
Current-period gross charge-offs	—		—		—		—		—		—		—		—
Consumer and other
Performing	94,565		159,522		90,219		74,564		33,020		135,669		627		588,186
Nonperforming	—		2,424		3,520		1,434		2,613		6,320		1		16,312
Total	94,565		161,946		93,739		75,998		35,633		141,989		628		604,498
Current-period gross charge-offs	998		136		76		104		86		521		2		1,923
Total consumer type loans
Performing	252,857		364,672		237,732		492,503		371,959		503,768		640,252		2,863,743
Nonperforming	—		2,618		4,427		10,094		8,831		15,105		1,809		42,884
Total	$	252,857	$	367,290	$	242,159	$	502,597	$	380,790	$	518,873	$	642,061	$	2,906,627
Current-period gross charge-offs	$	998	$	136	$	79	$	104	$	86	$	954	$	2	$	2,359





As of and for the year ended December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total





Residential real estate:
1-to-4 family mortgage
Performing	$	223,520	$	165,395	$	443,372	$	360,188	$	129,674	$	266,661	$	—	$	1,588,810
Nonperforming	27		941		7,254		6,357		4,192		9,173		—		27,944
Total	223,547		166,336		450,626		366,545		133,866		275,834		—		1,616,754
Prior-period gross charge-offs	10		54		150		130		67		28		—		439
Residential line of credit
Performing	—		—		—		—		—		—		600,581		600,581
Nonperforming	—		—		—		—		—		—		1,894		1,894
Total	—		—		—		—		—		—		602,475		602,475
Prior-period gross charge-offs	—		—		—		—		—		—		73		73
Consumer and other
Performing	139,684		93,817		76,286		35,507		29,387		102,233		652		477,566
Nonperforming	1,300		1,749		1,686		3,139		2,548		5,755		1		16,178
Total	140,984		95,566		77,972		38,646		31,935		107,988		653		493,744
Prior-period gross charge-offs	1,593		511		302		278		69		298		—		3,051
Total consumer type loans
Performing	363,204		259,212		519,658		395,695		159,061		368,894		601,233		2,666,957
Nonperforming	1,327		2,690		8,940		9,496		6,740		14,928		1,895		46,016
Total	$	364,531	$	261,902	$	528,598	$	405,191	$	165,801	$	383,822	$	603,128	$	2,712,973
Prior-period gross charge-offs	1,603		565		452		408		136		326		73		3,563

Nonaccrual and Past Due Loans

The following tables represent an analysis of the aging by class of financing receivable as of June 30, 2025 and December 31, 2024:


June 30, 2025	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	1,127	$	124	$	2,692	$	1,784,968	$	1,788,911
Construction	16,494		154		28,872		977,158		1,022,678
Residential real estate:
1-to-4 family mortgage	22,388		16,385		8,379		1,613,544		1,660,696
Residential line of credit	3,347		700		1,108		636,278		641,433
Multi-family mortgage	—		—		9,582		577,672		587,254
Commercial real estate:
Owner occupied	2,248		46		7,861		1,359,968		1,370,123
Non-owner occupied	—		—		3,697		2,194,992		2,198,689
Consumer and other	18,768		4,553		11,759		569,418		604,498
Total	$	64,372	$	21,962	$	73,950	$	9,713,998	$	9,874,282


December 31, 2024	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	1,204	$	730	$	9,661	$	1,679,618	$	1,691,213
Construction	3,288		538		10,915		1,072,991		1,087,732
Residential real estate:
1-to-4 family mortgage	24,376		15,319		12,625		1,564,434		1,616,754
Residential line of credit	2,302		357		1,537		598,279		602,475
Multi-family mortgage	979		—		21		652,769		653,769
Commercial real estate:
Owner occupied	1,996		94		9,551		1,345,927		1,357,568
Non-owner occupied	—		3,512		2,667		2,092,950		2,099,129
Consumer and other	13,710		3,797		12,381		463,856		493,744
Total	$	47,855	$	24,347	$	59,358	$	9,470,824	$	9,602,384

The following tables provide the amortized cost basis of loans on nonaccrual status, as well as any related allowance as of June 30, 2025 and December 31, 2024 by class of financing receivable.



June 30, 2025	Nonaccrual with no related allowance		Nonaccrual with related allowance
Commercial and industrial	$	364	$	2,328
Construction	10,688		18,184
Residential real estate:
1-to-4 family mortgage	—		8,379
Residential line of credit	—		1,108
Multi-family mortgage	—		9,582
Commercial real estate:
Owner occupied	6,042		1,819
Non-owner occupied	3,457		240
Consumer and other	—		11,759
Total	$	20,551	$	53,399


December 31, 2024	Nonaccrual with no related allowance		Nonaccrual with related allowance

Commercial and industrial	$	5,294	$	4,367
Construction	1,653		9,262
Residential real estate:
1-to-4 family mortgage	1,562		11,063
Residential line of credit	148		1,389
Multi-family mortgage	—		21
Commercial real estate:
Owner occupied	6,415		3,136
Non-owner occupied	2,224		443
Consumer and other	—		12,381
Total	$	17,296	$	42,062

The following presents interest income recognized on nonaccrual loans for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Commercial and industrial	$	27	$	345	$	30	$	569
Construction	496		79		502		140
Residential real estate:
1-to-4 family mortgage	6		34		6		34
Residential line of credit	24		23		31		39
Multi-family mortgage	166		1		166		1
Commercial real estate:
Owner occupied	—		75		8		124
Non-owner occupied	112		54		112		89
Consumer and other	55		—		59		—
Total	$	886	$	611	$	914	$	996

Accrued interest receivable written off as an adjustment to interest income amounted to $1,054 and $1,341 for the three and six months ended June 30, 2025, respectively, and $207 and $408 for the three and six months ended June 30, 2024, respectively.

Loan Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company may make certain modifications of loans to borrowers experiencing financial difficulty. These modifications may be in the form of an interest rate reduction, a term extension, principal forgiveness, payment deferral or a combination thereof. Upon the Company’s determination that a modified loan has subsequently been deemed uncollectible, the portion of the loan deemed uncollectible is charged off against the allowance for credit losses on loans HFI. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Tables within this section exclude loans that were paid off or are otherwise no longer in the loan portfolio as of period end.

The following tables present the amortized cost of FDM loans as of June 30, 2025 and 2024 by class of financing receivable and type of concession granted that were modified during the three and six months ended June 30, 2025 and 2024.


Three Months Ended June 30, 2025	Payment deferral and term extension		Term Extension		Payment deferral		Total		% of total class of financing receivables
Commercial and industrial	$	100	$	—	$	—	$	100	—	%
Construction	3,305		—		—		3,305		0.3	%
Residential real estate:
1-to-4 family mortgage	—		463		1,833		2,296		0.1	%






Total	$	3,405	$	463	$	1,833	$	5,701	0.1	%


Six Months Ended June 30, 2025	Payment deferral and term extension		Term Extension		Payment deferral		Interest Rate Reduction		Interest Rate Reduction and Term Extension		Total		% of total class of financing receivables
Commercial and industrial	$	100	$	149	$	—	$	—	$	—	$	249	—	%
Construction	3,305		540		—		144		—		3,989		0.4	%
Residential real estate:
1-to-4 family mortgage	—		463		1,833		—		—		2,296		0.1	%





Consumer and other	—		—		—		—		63		63		—	%
Total	$	3,405	$	1,152	$	1,833	$	144	$	63	$	6,597	0.1	%


Three Months Ended June 30, 2024	Term extension		Payment deferral and term extension		Interest rate reduction and term extension		Total		% of total class of financing receivables









Consumer and other	18		—		98		116		—	%
Total	$	18	$	—	$	98	$	116	—	%


Six Months Ended June 30, 2024	Term extension		Payment deferral and term extension		Interest rate reduction and term extension		Total		% of total class of financing receivables

Construction	$	—	$	14,236	$	—	$	14,236	1.2	%




Commercial real estate:

Non-owner occupied	10,351		—		—		10,351		0.5	%
Consumer and other	40		—		98		138		—	%
Total	$	10,391	$	14,236	$	98	$	24,725	0.3	%

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:


Three Months Ended June 30, 2025	Weighted average term extension (in months)	Weighted average payment deferral (in months)
Commercial and industrial	4	4
Construction	4	4
Residential real estate:
1-to-4 family mortgage	300	4


Six months ended June 30, 2025	Weighted average term extension (in months)	Weighted average payment deferral (in months)	Weighted average interest rate reduction
Commercial and industrial	23	4	—%
Construction	4	4	2.50%
Residential real estate:
1-to-4 family mortgage	300	4	—%





Consumer and other	13	—	2.00%

Three Months Ended June 30, 2024

Weighted average term extension
(in months)

Weighted average interest rate reduction

Consumer and other

1.49%


Six Months Ended June 30, 2024	Weighted average term extension (in months)	Weighted average payment deferral (in months)	Weighted average interest rate reduction

Construction	6	3	—%




Commercial real estate:

Non-owner occupied	6	—	—
Consumer and other	25	—	1.49%

For FDM loans, a subsequent payment default is defined as the earlier of the FDM loans being placed on nonaccrual status or reaching 30 days past due with respect to principal and/or interest payments. During the six months ended June 30, 2025, consumer and other loans of $63 defaulted that were previously modified in the prior 12 months by receiving a combination of interest rate reduction and term extension. In addition, during the six months ended June 30, 2025, construction loans of $143 defaulted that were previously modified in the prior 12 months by receiving a term extension. No financing receivables modified in the preceding twelve months had a payment default during the three months ended June 30, 2025 nor three and six months ended June 30, 2024. At June 30, 2025 and December 31, 2024, the Company did not have any material commitments to lend additional funds to borrowers whose loans were classified as a FDM loan.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The tables below depict the performance of loans HFI as of June 30, 2025 and 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months.


June 30, 2025	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans(1)		Loans current on payments and accruing interest		Total
Commercial and industrial	$	—	$	—	$	—	$	249	$	249
Construction	—		—		5,312		683		5,995
Residential real estate:
1-to-4 family mortgage	367		—		—		2,609		2,976
Residential line of credit	—		—		—		29		29

Commercial real estate:
Owner-occupied	—		—		—		—		—

Consumer and other	—		—		—		62		62
Total	$	367	$	—	$	5,312	$	3,632	$	9,311

(1) Loans were on nonaccrual when modified and subsequently classified as FDM.


June 30, 2024	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans(1)		Loans current on payments and accruing interest		Total

Construction	$	—	$	—	$	—	$	14,236	$	14,236
Residential real estate:
1-to-4 family mortgage	—		—		24		—		24


Commercial real estate:

Non-owner occupied	—		—		—		10,351		10,351
Consumer and other	—		—		—		138		138
Total	$	—	$	—	$	24	$	24,725	$	24,749

(1) Loans were on nonaccrual when modified and subsequently classified as FDM.

Collateral-Dependent Loans

For collateral-dependent loans, or those loans for which repayment is expected to be provided substantially through the operation or sale of collateral, where the borrower is also experiencing financial difficulty, the following tables present the loans by class of financing receivable.


	June 30, 2025
	Type of Collateral
	Real Estate		Land		Business Assets		Total
Commercial and industrial	$	1,462	$	6	$	12	$	1,480
Construction	32,672		7,147		—		39,819
Residential real estate:
1-to-4 family mortgage	1,745		—		—		1,745

Multi-family mortgage	9,564		—		—		9,564
Commercial real estate:
Owner occupied	—		6,042		1,687		7,729
Non-owner occupied	4,599		—		—		4,599

Total	$	50,042	$	13,195	$	1,699	$	64,936


	December 31, 2024
	Type of Collateral
	Real Estate		Land		Business Assets		Total
Commercial and industrial	$	—	$	—	$	8,492	$	8,492
Construction	22,047		1,653		—		23,700
Residential real estate:
1-to-4 family mortgage	1,843		—		—		1,843
Residential line of credit	148		—		—		148
Multi-family mortgage	9,919		—		—		9,919
Commercial real estate:
Owner occupied	—		6,415		—		6,415
Non-owner occupied	6,886		—		—		6,886

Total	$	40,843	$	8,068	$	8,492	$	57,403

Allowance for Credit Losses on Loans HFI

As of June 30, 2025, the Company made changes to the estimation techniques and certain related inputs and assumptions used in estimating its expected credit losses on its loan portfolios and unfunded commitments. Prior to the changes, the Company primarily used a lifetime loss rate model to determine the allowance for credit losses. Following a periodic review of its credit loss estimation process, the Company concluded that a discounted cash flow estimation technique, adjusted for current conditions and reasonable and supportable forecasts, is a more preferred approach for estimating expected credit losses of its loan segments, except consumer and other loans, which as of June 30, 2025, utilize the weighted average remaining maturity loss rate technique. The applicable CECL estimation technique is used to estimate the expected credit loss for off-balance sheet commitments for each loan segment. As part of the updates to estimation techniques, management updated certain related inputs and assumptions used to estimate the expected credit loss. The Company determined that the use of the updated estimate techniques and related inputs and assumptions enhances the transparency, accuracy and relevance of information relating to its allowance for credit losses through the application of data and calculations more clearly calibrated to the Company’s historical experience, the nature of its loan portfolio and unfunded commitments, and expectations for future economic conditions and corresponding expected credit losses.

The changes in the estimation techniques and certain related inputs and assumptions used in the determination of the Company’s expected credit losses on its loan portfolio and unfunded commitments did not have a material impact to the Company’s operating results and financial condition. The provision for credit losses for the three and six months ended June 30, 2025, reflects this change in estimate and is accounted for prospectively. Refer to Note 1, “Basis of presentation” in the financial statements for further specific information on the changes.

The Company performed evaluations within its updated qualitative framework, assessing for information not otherwise captured in model loss estimation process. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations. The decrease in the allowance for credit losses on loans HFI as of June 30, 2025 compared with December 31, 2024 is primarily the result of the change in the CECL loss estimation methodology and net charge-off activity, partially offset by an increase in the provision for credit losses on loans HFI. The increase in the provision for credit losses on HFI was driven primarily by changes in balances of the underlying loan portfolio coupled with changes in the economic forecast assumptions.

The following tables provide the changes in the allowance for credit losses on loans HFI by class of financing receivable for the three and six months ended June 30, 2025 and 2024:


	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi-family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Three Months Ended June 30, 2025
Beginning balance - March 31, 2025	$	15,521	$	25,652	$	26,200	$	11,196	$	11,416	$	12,074	$	28,319	$	20,153	$	150,531
Loans charged off	(70)		—		(433)		—		—		—		—		(951)		(1,454)
Recoveries of loans previously charged-off	173		—		11		1		—		9		528		251		973
Impact of change in accounting estimate for current expected credit losses	3,504		(4,705)		2,717		(3,428)		258		(1,074)		(1,747)		(2,373)		(6,848)
Provision for (reversal of) credit losses on loans HFI	1,143		901		1,767		902		(780)		930		(797)		1,680		5,746
Ending balance - June 30, 2025	$	20,271	$	21,848	$	30,262	$	8,671	$	10,894	$	11,939	$	26,303	$	18,760	$	148,948
Six Months Ended June 30, 2025
Beginning balance - December 31, 2024	$	16,667	$	31,698	$	25,340	$	10,952	$	10,512	$	11,993	$	25,531	$	19,249	$	151,942
Loans charged-off	(2,971)		—		(436)		—		—		(17)		—		(1,923)		(5,347)
Recoveries of loans previously charged-off	215		—		20		1		—		30		529		754		1,549
Impact of change in accounting estimate for current expected credit losses	3,504		(4,705)		2,717		(3,428)		258		(1,074)		(1,747)		(2,373)		(6,848)
Provision for (reversal of) credit losses on loans HFI	2,856		(5,145)		2,621		1,146		124		1,007		1,990		3,053		7,652


Ending balance - June 30, 2025	$	20,271	$	21,848	$	30,262	$	8,671	$	10,894	$	11,939	$	26,303	$	18,760	$	148,948


	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi-family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Three Months Ended June 30, 2024
Beginning balance - March 31 2024	$	17,272	$	37,308	$	26,128	$	9,918	$	8,973	$	10,749	$	23,949	$	17,370	$	151,667
Loans charged off	(26)		—		(293)		—		—		—		—		(594)		(913)
Recoveries of loans previously charged-off	20		—		10		—		—		188		—		143		361
Provision for (reversal of) credit losses on loans HFI	5,264		(3,138)		(214)		179		(163)		375		594		1,043		3,940
Ending balance - June 30, 2024	$	22,530	$	34,170	$	25,631	$	10,097	$	8,810	$	11,312	$	24,543	$	17,962	$	155,055
Six Months Ended June 30, 2024
Beginning balance - December 31, 2023	$	19,599	$	35,372	$	26,505	$	9,468	$	8,842	$	10,653	$	22,965	$	16,922	$	150,326
Loans charged-off	(69)		(92)		(293)		(20)		—		—		—		(1,366)		(1,840)
Recoveries of loans previously charged-off	34		—		66		—		—		228		—		449		777
Provision for (reversal of) credit losses on loans HFI	2,966		(1,110)		(647)		649		(32)		431		1,578		1,957		5,792
Ending balance - June 30, 2024	$	22,530	$	34,170	$	25,631	$	10,097	$	8,810	$	11,312	$	24,543	$	17,962	$	155,055