v3.25.2
Loans Receivable and ACL-Loans
 6 Months Ended
Jun. 30, 2025
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Loans Receivable and ACL-Loans Loans Receivable and ACL-Loans
The following table sets forth a summary of the loan portfolio at June 30, 2025 and December 31, 2024:
(In thousands)June 30, 2025December 31, 2024
Real estate loans:
Residential$34,978 $42,766 
Commercial1,802,224 1,899,134 
Construction203,758 173,555 
2,040,960 2,115,455 
Commercial business559,221 515,125 
Consumer68,801 75,308 
Total loans2,668,982 2,705,888 
ACL-Loans(29,256)(29,007)
Deferred loan origination fees, net(3,984)(3,922)
Loans receivable, net$2,635,742 $2,672,959 

Lending activities primarily consist of commercial real estate loans, commercial business loans and, to a lesser degree, consumer loans. Loans may also be granted for the construction of commercial properties. The majority of commercial mortgage loans are collateralized by first or second mortgages on real estate.

Risk management

The Company has established credit policies applicable to each type of lending activity in which it engages. The Company evaluates the creditworthiness of each client and extends credit of up to 80% of the market value of the collateral, (85% maximum for owner occupied commercial real estate), depending on the client's creditworthiness and the type of collateral. The client’s ability to service the debt is monitored on an ongoing basis. Real estate is the primary form of collateral. Other important forms of collateral are business assets, deposits and marketable securities. While collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment for commercial loans to be based on the client’s ability to generate continuing cash flows. The Company does not provide first or second lien residential mortgage loans secured by residential properties but has a small legacy portfolio which continues to amortize, pay off due to the sale of the collateral, or refinance away from the Company.

Credit quality of loans and the ACL-Loans
Management segregates the loan portfolio into defined segments, which are used to develop and document a systematic method for determining the Company's ACL-Loans. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate.
The Company's loan portfolio is segregated into the following portfolio segments:

Residential Real Estate: This portfolio segment consists of first mortgage loans secured by one-to-four family owner occupied residential properties for personal use located in the Company's market area. This segment also includes home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties. Loans of this type were written at a combined maximum of 80% of the appraised value of the property and the Company requires a first or second lien position on the property. These loans can be affected by economic conditions and the values of the underlying properties.

Commercial Real Estate: This portfolio segment includes loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate and investor-owned one-to-four family dwellings. Loans secured by commercial real estate generally have larger loan balances and more credit risk than owner occupied one-to-four family mortgage loans.

Construction: This portfolio segment includes commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail and other income producing properties and land loans, which are loans made with land as collateral. Construction and land development financing generally involves greater credit risk than long-term financing on improved, owner-occupied or leased real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost proves to be inaccurate, the Company may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project proves to be inaccurate, the client may hold a property with a value that is insufficient to assure full repayment through sale or refinance. Construction loans also expose the Company to the risks that improvements will not be completed on time in accordance with specifications and projected costs and that repayment will depend on the successful operation or sale of the properties, which may cause some clients to be unable to continue paying debt service, which exposes the Company to greater risk of non-payment and loss.

Commercial Business: This portfolio segment includes commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners. Commercial business loans generally have higher interest rates and shorter terms than other loans, and their repayment generally depends on the successful operation of the client’s business.

Consumer: This portfolio segment includes loans to finance insurance premiums secured by the cash surrender value of life insurance and marketable securities, overdraft lines of credit, and unsecured personal loans to high net worth individuals.
ACL-Loans

The following tables set forth the activity in the Company’s ACL-Loans for the three and six months ended June 30, 2025 and 2024, by portfolio segment:

Residential Real EstateCommercial Real EstateConstructionCommercial BusinessConsumerTotal
(In thousands)
Three Months Ended June 30, 2025
Beginning balance$87 $20,562 $2,216 $5,244 $1,376 $29,485 
Charge-offs— — — (15)(5)(20)
Recoveries— — — 112 10 122 
(Credit) provision for credit losses(22)(1,270)688 185 88 (331)
Ending balance$65 $19,292 $2,904 $5,526 $1,469 $29,256 

Residential Real EstateCommercial Real EstateConstructionCommercial BusinessConsumerTotal
(In thousands)
Three Months Ended June 30, 2024
Beginning balance$133 $21,666 $1,543 $4,078 $571 $27,991 
Charge-offs(9)(522)— — (12)(543)
Recoveries141 113 — — 13 267 
(Credit) provision for credit losses(142)1,216 729 6,569 (4)8,368 
Ending balance$123 $22,473 $2,272 $10,647 $568 $36,083 
Residential Real EstateCommercial Real EstateConstructionCommercial BusinessConsumerTotal
(In thousands)
Six Months Ended June 30, 2025
Beginning balance$94 $21,838 $2,059 $4,070 $946 $29,007 
Charge-offs— (67)— (15)(37)(119)
Recoveries— — — 116 46 162 
(Credit) provision for credit losses(29)(2,479)845 1,355 514 206 
Ending balance$65 $19,292 $2,904 $5,526 $1,469 $29,256 

Residential Real EstateCommercial Real EstateConstructionCommercial BusinessConsumerTotal
(In thousands)
Six Months Ended June 30, 2024
Beginning balance$149 $20,950 $1,699 $4,562 $586 $27,946 
Charge-offs(141)(3,828)— (197)(61)(4,227)
Recoveries141 113 — 27 17 298 
(Credit) provision for credit losses(26)5,238 573 6,255 26 12,066 
Ending balance$123 $22,473 $2,272 $10,647 $568 $36,083 

We evaluate whether a modification, extension or renewal of a loan is a current period origination in accordance with GAAP. Generally, loans up for renewal are subject to a full credit evaluation before the renewal is granted and such loans are considered current period originations for purpose of the tables below. The following tables present loans by origination and risk designation as of June 30, 2025 and December 31, 2024 (dollars in thousands):
Term Loans
Amortized Cost Balances by Origination Year as of June 30, 2025
20252024202320222021PriorTotal
Residential Real Estate Loans
Pass$— $— $— $— $— $31,995 $31,995 
Special Mention— — — — — 295 295 
Substandard— — — — — 2,862 2,862 
Doubtful— — — — — — — 
Total Residential Real Estate Loans$— $— $— $— $— $35,152 $35,152 
Residential Real Estate charge-off
Current period charge-offs$— $— $— $— $— $— $— 
Commercial Real Estate Loans
Pass$150,968 $105,752 $109,288 $571,848 $213,840 $545,609 $1,697,305 
Special Mention— 19,936 — 70,437 — 3,851 94,224 
Substandard— — — 580 8,688 7,099 16,367 
Doubtful— — — — — — — 
Total Commercial Real Estate Loans$150,968 $125,688 $109,288 $642,865 $222,528 $556,559 $1,807,896 
Commercial Real Estate charge-off
Current period charge-offs$— $— $— $— $67 $— $67 
Construction Loans
Pass$25,386 $26,250 $49,648 $36,939 $47,087 $— $185,310 
Special Mention— — — 19,415 — — 19,415 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Construction Loans$25,386 $26,250 $49,648 $56,354 $47,087 $— $204,725 
Construction charge-off
Current period charge-offs$— $— $— $— $— $— $— 
Commercial Business Loans
Pass$133,234 $103,187 $87,732 $154,312 $43,132 $25,923 $547,520 
Special Mention— — — 6,618 2 216 6,836 
Substandard— 52 114 — 6,733 — 6,899 
Doubtful— — — — — 26 26 
Total Commercial Business Loans$133,234 $103,239 $87,846 $160,930 $49,867 $26,165 $561,281 
Commercial Business charge-off
Current period charge-offs$15 $— $— $— $— $— $15 
Consumer Loans
Pass$8,020 $22,407 $10,070 $27,746 $— $47 $68,290 
Special Mention— — — — — — — 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Consumer Loans$8,020 $22,407 $10,070 $27,746 $— $47 $68,290 
Consumer charge-off
Current period charge-offs$37 $— $— $— $— $— $37 
Total Loans
Pass$317,608 $257,596 $256,738 $790,845 $304,059 $603,574 $2,530,420 
Special Mention— 19,936 — 96,470 2 4,362 120,770 
Substandard— 52 114 580 15,421 9,961 26,128 
Doubtful— — — — — 26 26 
Total Loans$317,608 $277,584 $256,852 $887,895 $319,482 $617,923 $2,677,344 
Total charge-off
Current period charge-offs$52 $— $— $— $67 $— $119 
Term Loans
Amortized Cost Balances by Origination Year as of December 31, 2024
20242023202220212020PriorTotal
Residential Real Estate Loans
Pass$— $— $— $— $— $39,560 $39,560 
Special Mention— — — — — 366 366 
Substandard— — — — — 3,069 3,069 
Doubtful— — — — — — — 
Total Residential Real Estate Loans$— $— $— $— $— $42,995 $42,995 
Residential Real Estate charge-off
Current period charge-offs$— $— $— $— $— $141 $141 
Commercial Real Estate Loans
Pass$162,303 $101,201 $680,359 $241,000 $95,277 $486,897 $1,767,037 
Special Mention— 18,357 43,286 29,792 — 1,982 93,417 
Substandard— — 27,081 9,194 5,488 1,610 43,373 
Doubtful— — — — — 1,400 1,400 
Total Commercial Real Estate Loans$162,303 $119,558 $750,726 $279,986 $100,765 $491,889 $1,905,227 
Commercial Real Estate charge-off
Current period charge-offs$— $— $— $522 $8,184 $4,405 $13,111 
Construction Loans
Pass$10,086 $47,301 $63,476 $53,529 $— $— $174,392 
Special Mention— — — — — — — 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Construction Loans$10,086 $47,301 $63,476 $53,529 $— $— $174,392 
Construction charge-off
Current period charge-offs$— $— $— $— $— $1,771 $1,771 
Commercial Business Loans
Pass$143,267 $98,718 $179,999 $49,351 $5,708 $26,413 $503,456 
Special Mention— 665 3,454 1,949 — 20 6,088 
Substandard133 344 224 6,983 — — 7,684 
Doubtful— — — — — 53 53 
Total Commercial Business Loans$143,400 $99,727 $183,677 $58,283 $5,708 $26,486 $517,281 
Commercial Business charge-off
Current period charge-offs$— $— $7,664 $245 $— $— $7,909 
Consumer Loans
Pass$32,295 $9,051 $33,369 $— $— $49 $74,764 
Special Mention— — — — — — — 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Consumer Loans$32,295 $9,051 $33,369 $— $— $49 $74,764 
Consumer charge-off
Current period charge-offs$28 $— $— $56 $— $— $84 
Total Loans
Pass$347,951 $256,271 $957,203 $343,880 $100,985 $552,919 $2,559,209 
Special Mention— 19,022 46,740 31,741 — 2,368 99,871 
Substandard133 344 27,305 16,177 5,488 4,679 54,126 
Doubtful— — — — — 1,453 1,453 
Total Loans$348,084 $275,637 $1,031,248 $391,798 $106,473 $561,419 $2,714,659 
Total charge-off
Current period charge-offs$28 $— $7,664 $823 $8,184 $6,317 $23,016 
Loans evaluated for impairment and the related ACL-Loans as of June 30, 2025 and December 31, 2024 were as follows:
PortfolioACL-Loans
(In thousands)
June 30, 2025
Loans individually evaluated for impairment:
Residential real estate$2,846 $— 
Commercial real estate16,387 — 
Construction— — 
Commercial business6,871 — 
Consumer37,753 — 
Subtotal63,857 — 
Loans collectively evaluated for impairment:
Residential real estate32,133 65 
Commercial real estate1,785,837 19,292 
Construction203,758 2,904 
Commercial business552,350 5,526 
Consumer31,047 1,469 
Subtotal2,605,125 29,256 
Total$2,668,982 $29,256 

PortfolioACL-Loans
(In thousands)
December 31, 2024
Loans individually evaluated for impairment:
Residential real estate$3,052 $— 
Commercial real estate44,814 — 
Construction— — 
Commercial business7,672 — 
Consumer58,363 — 
Subtotal113,901 — 
Loans collectively evaluated for impairment:
Residential real estate39,714 94 
Commercial real estate1,854,320 21,838 
Construction173,555 2,059 
Commercial business507,453 4,070 
Consumer16,945 946 
Subtotal2,591,987 29,007 
Total$2,705,888 $29,007 

Credit quality indicators

To measure credit risk for the loan portfolios, the Company employs a credit risk rating system. This risk rating represents an assessed level of a loan’s risk based on the character and creditworthiness of the borrower/guarantor, the capacity of the borrower to adequately service the debt, any credit enhancements or additional sources of repayment, and the quality, value and coverage of the collateral, if any.
The objectives of the Company’s risk rating system are to provide the Board of Directors and senior management with an objective assessment of the overall quality of the loan portfolio, to promptly and accurately identify loans with well-defined credit weaknesses so that timely action can be taken to minimize a potential credit loss, to identify relevant trends affecting the collectability of the loan portfolio, to isolate potential problem areas and to provide essential information for determining the adequacy of the ACL-Loans. The Company’s credit risk rating system has nine grades, with each grade corresponding to a progressively greater risk of default or non-payment. Risk ratings of (1) through (5) are "pass" categories and risk ratings of (6) through (9) are criticized asset categories as defined by the regulatory agencies.

A “special mention” (6) loan has a potential weakness which, if uncorrected, may result in a deterioration of the repayment prospects or inadequately protect the Company’s credit position at some time in the future. “Substandard” (7) loans have a well-defined weakness or weaknesses that jeopardize the full repayment of the debt. A loan rated “doubtful” (8) has all the weaknesses inherent in a substandard loan and which, in addition, make collection or liquidation in full highly questionable and improbable when considering existing facts, conditions, and values. Loans classified as “loss” (9) are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value; rather, it is not practical or desirable to defer charging off this asset even though partial recovery may be made in the future.

Risk ratings are assigned as necessary to differentiate risk within the portfolio. They are reviewed on an ongoing basis through the annual loan review process performed by Company personnel, normal renewal activity, monthly delinquency monitoring, and the quarterly watchlist and watched asset report process. They are revised to reflect changes in the borrower's financial condition and outlook, debt service coverage capability, repayment performance, collateral value and coverage, as well as other considerations. In addition to internal review at multiple points, outsourced loan review opines on risk ratings with regard to the sample of loans their review covers.

The following tables present credit risk ratings by loan segment as of June 30, 2025 and December 31, 2024:
Commercial Credit Quality Indicators
June 30, 2025December 31, 2024
Commercial Real EstateConstructionCommercial BusinessTotalCommercial Real EstateConstructionCommercial BusinessTotal
(In thousands)
Pass$1,692,203 $184,475 $545,569 $2,422,247 $1,767,482 $173,555 $501,432 $2,442,469 
Special Mention93,634 19,283 6,781 119,698 86,838 — 6,020 92,858 
Substandard16,387 — 6,845 23,232 43,413 — 7,619 51,032 
Doubtful— — 26 26 1,401 — 54 1,455 
Loss— — — — — — — — 
Total loans$1,802,224 $203,758 $559,221 $2,565,203 $1,899,134 $173,555 $515,125 $2,587,814 

Residential and Consumer Credit Quality Indicators
June 30, 2025December 31, 2024
Residential Real EstateConsumerTotalResidential Real EstateConsumerTotal
(In thousands)
Pass$31,842 $68,800 $100,642 $39,359 $75,308 $114,667 
Special Mention291 — 291 356 — 356 
Substandard2,846 — 2,846 3,051 — 3,051 
Doubtful— — — — — — 
Loss— — — — — — 
Total loans$34,979 $68,800 $103,779 $42,766 $75,308 $118,074 
Loan portfolio aging analysis

When a loan is 15 days past due, the Company sends the borrower a late notice. The Company attempts to contact the borrower by phone if the delinquency is not corrected promptly after the notice has been sent. When the loan is 30 days past due, the Company mails the borrower a letter reminding the borrower of the delinquency and attempts to contact the borrower personally to determine the reason for the delinquency and ensure the borrower understands the terms of the loan. If necessary, after the 90th day of delinquency, the Company may take other appropriate legal action. A summary report of all loans 30 days or more past due is provided to the Board of Directors of the Company periodically. Loans greater than 90 days past due are generally put on nonaccrual status. A nonaccrual loan is restored to accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt. A loan is considered to be no longer delinquent when timely payments are made for a period of at least six months (one year for loans providing for quarterly or semi-annual payments) by the borrower in accordance with the contractual terms.

The following tables set forth certain information with respect to the Company's loan portfolio delinquencies by portfolio segment as of June 30, 2025 and December 31, 2024:
June 30, 2025
30-59 Days Past Due60-89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Loans
(In thousands)
Real estate loans:
Residential real estate$291 $— $617 $908 $34,070 $34,978 
Commercial real estate145 — 16,387 16,532 1,785,692 1,802,224 
Construction— — — — 203,758 203,758 
Commercial business18 33 6,680 6,731 552,490 559,221 
Consumer— — — — 68,801 68,801 
Total loans$454 $33 $23,684 $24,171 $2,644,811 $2,668,982 

December 31, 2024
30-59 Days Past Due60-89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Loans
(In thousands)
Real estate loans:
Residential real estate$130 $226 $652 $1,008 $41,758 $42,766 
Commercial real estate359 — 35,585 35,944 1,863,190 1,899,134 
Construction— — — — 173,555 173,555 
Commercial business4 11 7,143 7,158 507,967 515,125 
Consumer— — — — 75,308 75,308 
Total loans$493 $237 $43,380 $44,110 $2,661,778 $2,705,888 

There were no loans delinquent greater than 90 days and still accruing interest as of June 30, 2025 or December 31, 2024.
Loans on nonaccrual status

The following is a summary of nonaccrual loans by portfolio segment as of June 30, 2025 and December 31, 2024:
June 30, 2025December 31, 2024
(In thousands)
Residential real estate$617 $791 
Commercial real estate16,387 44,814 
Commercial business6,871 7,672 
Construction— — 
Consumer— — 
Total$23,875 $53,277 

Interest income on loans that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the six months ended June 30, 2025 and 2024 was $1.1 million and $1.2 million, respectively.

At June 30, 2025 and December 31, 2024, there were no commitments to lend additional funds to any borrower on nonaccrual status. Nonaccrual loans with no specific reserve totaled $23.9 million and $53.3 million at June 30, 2025 and December 31, 2024, respectively, as these loans were deemed to be adequately collateralized.

Individually evaluated loans

An individually evaluated loan is generally one for which it is probable, based on current information, that the Company will not collect all the amounts due in accordance with the contractual terms of the loan. Individually evaluated loans are individually evaluated for credit losses.

The Company also individually evaluates all insurance premium loans within the Consumer portfolio segment, irrespective of credit risk ratings.
The following table summarizes individually evaluated loans by portfolio segment as of June 30, 2025 and December 31, 2024.
Carrying AmountUnpaid Principal BalanceAssociated ACL-Loans
June 30, 2025December 31, 2024June 30, 2025December 31, 2024June 30, 2025December 31, 2024
(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate$2,846 $3,052 $3,145 $3,332 $— $— 
Commercial real estate16,387 44,814 27,047 55,936 — — 
Construction— — — — — — 
Commercial business6,871 7,672 7,947 8,782 — — 
Consumer37,753 58,363 37,753 58,363 — — 
Total individually evaluated loans without a valuation allowance63,857 113,901 75,892 126,413 — — 
Individually evaluated loans with a valuation allowance:
Residential real estate$— $— $— $— $— $— 
Commercial real estate— — — — — — 
Construction— — — — — — 
Commercial business— — — — — — 
Consumer— — — — — — 
Total individually evaluated loans with a valuation allowance— — — — — — 
Total individually evaluated loans$63,857 $113,901 $75,892 $126,413 $— $— 
The following tables summarize the average carrying amount of individually evaluated loans and interest income recognized on individually evaluated loans by portfolio segment for the three and six months ended June 30, 2025 and 2024:
Average Carrying AmountInterest Income Recognized
Three Months Ended June 30,Three Months Ended June 30,
2025202420252024
(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate$2,979 $3,640 $43 $42 
Commercial real estate17,371 55,291 84 552 
Commercial business7,000 12,423 55 211 
Construction— — — — 
Consumer40,489 26,156 382 400 
Total individually evaluated loans without a valuation allowance67,839 97,510 564 1,205 
Individually evaluated loans with a valuation allowance:
Residential real estate$— $— $— $— 
Commercial real estate— — — — 
Commercial business— 8,516 — 878 
Construction— 9,382 — — 
Consumer— — — — 
Total individually evaluated loans with a valuation allowance— 17,898 — 878 
Total individually evaluated loans$67,839 $115,408 $564 $2,083 
Average Carrying AmountInterest Income Recognized
Six Months Ended June 30,Six Months Ended June 30,
2025202420252024
(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate$3,025 $3,656 $103 $85 
Commercial real estate17,766 57,247 129 1,094 
Commercial business7,322 12,745 70 618 
Construction— — — — 
Consumer47,369 25,840 775 736 
Total individually evaluated loans without a valuation allowance75,482 99,488 1,077 2,533 
Individually evaluated loans with a valuation allowance:
Residential real estate$— $— $— $— 
Commercial real estate— — — — 
Commercial business— 8,607 — 1,039 
Construction— 9,382 — — 
Consumer— — — — 
Total individually evaluated loans with a valuation allowance— 17,989 — 1,039 
Total individually evaluated loans$75,482 $117,477 $1,077 $3,572 

Loan Modifications

A loan will be considered modified as defined by ASC 326 when both of the following conditions are met: 1) the borrower is experiencing financial difficulties and 2) the modification constitutes a direct change in contractual cash flows for a significant period of time. Modified terms are dependent upon the financial position and needs of the individual borrower.

There were no new loan modifications reportable under ASC 326 at June 30, 2025. There was one new loan modification reportable under ASC 326 for $4.0 million at December 31, 2024. There were no nonaccrual modified loans at June 30, 2025. There was one nonaccrual modified loan at December 31, 2024. There were no loans modified that re-defaulted at June 30, 2025 and December 31, 2024.
Allowance for credit losses (ACL)-Unfunded Commitments

The Company has recorded ACL-Unfunded Commitments in Accrued expenses and other liabilities. The provision is recorded within the Provision for credit losses on the Company’s Consolidated Statements of Income. The following table presents a roll forward of the ACL-Unfunded Commitments for the three and six months ended June 30, 2025 and June 30, 2024:
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(In thousands)
Balance at beginning of period$681 $911 $756 $926 
(Credit) for credit losses (unfunded commitments)(79)(185)(154)(200)
Balance at end of period$602 $726 $602 $726 

Components of (Credit) Provision for Credit Losses

The following table summarizes the Provision for credit losses for the three and six months ended June 30, 2025 and June 30, 2024:
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(In thousands)
(Credit) provision for credit losses (loans)$(331)$8,368 $206 $12,066 
(Credit) for credit losses (unfunded commitments)(80)(185)(154)(200)
(Credit) provision for credit losses$(411)$8,183 $52 $11,866