v3.25.2
ALLOWANCE FOR CREDIT LOSSES
 6 Months Ended
Jun. 30, 2025
Receivables [Abstract]  
ALLOWANCE FOR CREDIT LOSSES ALLOWANCE FOR CREDIT LOSSES
The following schedules present the activity in the ACL by loan segment for the three and six months ended June 30, 2025 and June 30, 2024:
Three Months EndedReal Estate - ResidentialReal Estate - CommercialReal Estate - Construction and LandCommercial and IndustrialConsumer and OtherTotal
June 30, 2025
Beginning Balance$1,148 $2,161 $809 $10,378 $2,017 $16,513 
Charge-offs(835)(301)— (5,061)(958)(7,155)
Recoveries7 2 — 270 77 356 
Provision859 273 38 5,519 638 7,327 
Ending Balance$1,179 $2,135 $847 $11,106 $1,774 $17,041 
June 30, 2024
Beginning Balance$2,186 $1,758 $663 $6,840 $2,459 $13,906 
Charge-offs— (60)— (2,599)(771)(3,430)
Recoveries— 2 — 111 56 169 
Provision(952)164 (108)3,362 732 3,198 
Ending Balance$1,234 $1,864 $555 $7,714 $2,476 $13,843 
Real Estate - ResidentialReal Estate - CommercialReal Estate - Construction and LandCommercial and IndustrialConsumer and OtherTotal
Six Months Ended
June 30, 2025
Beginning Balance$1,181 $2,096 $507 $9,607 $2,121 $15,512 
Charge-offs(842)(431)— (8,027)(1,451)(10,751)
Recoveries27 2 — 463 159 651 
Provision813 468 340 9,063 945 11,629 
Ending Balance$1,179 $2,135 $847 $11,106 $1,774 $17,041 
June 30, 2024
Beginning Balance$1,987 $1,818 $519 $6,579 $2,594 $13,497 
Charge-offs— (60)— (5,523)(1,749)(7,332)
Recoveries— 4 — 241 174 419 
Provision(753)102 36 6,417 1,457 7,259 
Ending Balance$1,234 $1,864 $555 $7,714 $2,476 $13,843 
The ACL represents management’s best estimate of future lifetime expected losses on its HFI loan portfolio. The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company uses a combination of modeled and non-modeled approaches that incorporates current and future economic conditions to estimate lifetime expected losses on a collective basis. Individually evaluated loans are evaluated for impairment and a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the rate implicit in the original loan agreement or at the fair value of collateral adjusted for selling costs as appropriate if repayment is expected solely from the collateral.
The Company uses reasonable and supportable forecasts that are developed with internal and external data. These are updated quarterly by management and utilize data from the FOMC’s median forecasts of change in national GDP and of national unemployment. The FOMC’s forecast of GDP and unemployment for the next calendar year is used in conjunction
with the most recent 4 quarters of historical data from FRED (Federal Reserve Economic Data) to determine changes in certain qualitative factors used in calculating loss rates.
See Note 1 and Note 5 of the Notes to Consolidated Financial Statements for further discussion of the Company’s ACL methodology in the December 31, 2024 Form 10-K.
The Company maintains a separate ACL for its off-balance sheet unfunded loan commitments. The ACL on unfunded loan commitments is based on estimates of probability that these commitments will be drawn upon according to historical utilization experience, expected loss severity and loss rates as determined for pooled funded loans. As of June 30, 2025 and December 31, 2024, the ACL for unfunded commitments recorded in other liabilities was $554 and $516, respectively.
The following table presents the activity in the ACL for unfunded commitments for the three and six months ended June 30, 2025 and June 30, 2024:
For the Three Months Ended
For the Six Months Ended
June 30, 2025June 30, 2024June 30, 2025June 30, 2024
Balance at beginning of period$614 $839 $516 $839 
Provision for credit losses on unfunded commitments(60)(198)38 (198)
Unfunded commitments charge-offs— — — — 
Unfunded commitments recoveries— — — — 
Balance at end of period$554 $641 $554 $641 
The following tables present the principal balance of nonaccrual loans and loans past due over 89 days still on accrual by loan segment at June 30, 2025 and December 31, 2024. In the following tables, the principal balance does not include the government guaranteed balance or loans measured at fair value.
June 30, 2025
Nonaccrual with no ACL(1)
Nonaccrual with ACL(1)
Loans Past Due Over
89 Days Still Accruing(1)
Real estate - residential
$— $6,995 $70 
Real estate - commercial
2,709 1,241 — 
Real estate - construction and land
— 815 
Commercial and industrial
290 1,963 — 
Consumer and other
— 13 91 
Total
$2,999 $11,027 $161 
December 31, 2024
Nonaccrual with no ACL(1)
Nonaccrual with ACL(1)
Loans Past Due Over
89 Days Still Accruing(1)
Real estate - residential
$— $5,818 $— 
Real estate - commercial
2,709 2,052 — 
Commercial and industrial
— 2,696 — 
Consumer and other— — 295 
Total
$2,709 $10,566 $295 
(1) Excludes loans measured at fair value. See Note 6. Fair Value for additional information.
A financial asset is considered collateral dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with
credit quality indicators like appraised value. The following tables present the principal balance, including government guaranteed balances, of individually analyzed collateral dependent loans by loan portfolio segment as of June 30, 2025 and December 31, 2024:
June 30, 2025Type of CollateralACL
Real Estate
Real estate - commercial$2,709 $— 
Commercial and industrial1,160 — 
Total$3,869 $— 
.
December 31, 2024Type of CollateralACL
Real Estate
Real estate - commercial$2,709 $— 
The following table presents the aging of the principal balance of past due loans HFI at amortized cost at June 30, 2025 by loan segment:
30-89 Days
Past Due		Greater Than
89 Days
Past Due
Total
Past Due
Loans Not
Past Due (1)
Total
Loans
Real estate - residential
$2,720 $6,716 $9,436 $347,123 $356,559 
Real estate - commercial
3,145 3,450 6,595 286,328 292,923 
Real estate - construction and land
— 815 815 52,372 53,187 
Commercial and industrial
2,747 1,832 4,579 218,660 223,239 
Commercial and industrial - PPP
— — — 191 191 
Consumer and other
512 104 616 92,717 93,333 
Total
$9,124 $12,917 $22,041 $997,391 $1,019,432 
(1) $1,994 of balances 30-89 days past due and $7,337 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee. Of those loans, $157 of commercial and industrial PPP loans were delinquent as of June 30, 2025.
The following table presents the aging of the principal balance of past due loans HFI at amortized cost at December 31, 2024 by loan segment:
30-89 Days
Past Due		Greater Than
89 Days
Past Due
Total
Past Due
Loans Not
Past Due (1)
Total
Loans
Real estate - residential
$1,049 $5,818 $6,867 $324,003 $330,870 
Real estate - commercial
1,857 4,492 6,349 299,372 305,721 
Real estate - construction and land
— — — 32,914 32,914 
Commercial and industrial
3,572 1,561 5,133 221,389 226,522 
Commercial and industrial - PPP
— — — 941 941 
Consumer and other
417 295 712 93,114 93,826 
Total
$6,895 $12,166 $19,061 $971,733 $990,794 
(1) $10,429 of balances 30-89 days past due and $3,407 of balances greater than 89 days past due are reported as Loans Not Past Due as a result of the government guarantee. Of those loans, $135 of commercial and industrial PPP loans were delinquent as of December 31, 2024.
Modifications to Borrowers Experiencing Financial Difficulty
For the three and six months ended June 30, 2025 and the year ended December 31, 2024, there were no loan modifications to borrowers experiencing financial difficulty and no loan modifications that subsequently defaulted during the period.
Credit Quality Indicators
Internal risk-rating grades are assigned to loans by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other statistics and factors such as delinquency, to track the migration performance of the portfolio balances. This analysis is performed at least annually. The Bank uses the following definitions for its risk ratings:
Pass – Loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk.
Special Mention – These credits have potential weaknesses that may, if not checked or corrected, weaken the asset, or inadequately protect the Company’s position at some future date. These assets pose elevated risk, but their weakness does not yet justify a “Substandard” classification.
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 Bank 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, on the basis of currently known facts, conditions, and values, highly questionable and improbable.
The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at June 30, 2025 and gross write offs for the six months ended June 30, 2025:
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
20252024202320222021PriorCost Basisto TermTotal
Real estate - commercial
Risk Rating
Pass$18,601 $50,206 $49,224 $66,707 $43,325 $46,662 $3,090 $— $277,815 
Special mention— 81 499 1,886 534 186 15 — 3,201 
Substandard— 2,735 2,841 1,473 3,366 1,492 — — 11,907 
Doubtful— — — — — — — — — 
Total real estate - commercial loans, at amortized cost, gross18,601 53,022 52,564 70,066 47,225 48,340 3,105 — 292,923 
Gross write offs— — 130 216 — 85 — — 431 
Real estate - construction and land
Risk Rating
Pass3,892 9,945 18,125 10,699 1,074 — — — 43,735 
Special mention— — — — — — — — — 
Substandard— — 9,452 — — — — — 9,452 
Doubtful— — — — — — — — — 
Total real estate - construction and land loans, at amortized cost, gross3,892 9,945 27,577 10,699 1,074 — — — 53,187 
Gross write offs— — — — — — — — — 
Commercial and industrial
Risk Rating
Pass42,803 56,639 38,211 29,943 7,844 27,484 7,777 — 210,701 
Special mention— 554 782 1,217 196 517 — — 3,266 
Substandard— 284 2,999 1,935 316 3,383 116 — 9,033 
Doubtful— — 43 102 8 86 — — 239 
Total commercial and industrial loans, at amortized cost, gross42,803 57,477 42,035 33,197 8,364 31,470 7,893 — 223,239 
Gross write offs17 1,575 2,915 1,719 273 1,495 33 — 8,027 
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
20252024202320222021PriorCost Basisto TermTotal
Commercial and industrial - PPP
Risk Rating
Pass— — — — 135 56 — — 191 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total commercial and industrial - PPP loans, at amortized cost, gross— — — — 135 56 — — 191 
Gross write offs— — — — — — — — — 
The table below sets forth principal balance for the commercial loan portfolio disaggregated by loan segment based on internally assigned risk ratings at December 31, 2024 and gross write offs for the year ended December 31, 2024:
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
2024202320222021PriorCost Basisto TermTotal
Real estate - commercial
Risk Rating
Pass$58,597 $67,244 $67,994 $46,851 $52,733 $2,430 $— $295,849 
Special mention153 919 2,890 538 489 15 — 5,004 
Substandard— 2,971 857 99 941 — — 4,868 
Doubtful— — — — — — — — 
Total real estate - commercial loans, at amortized cost, gross58,750 71,134 71,741 47,488 54,163 2,445 — 305,721 
Gross write offs— — 60 — — — — 60 
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
2024202320222021PriorCost Basisto TermTotal
Real estate - construction and land
Risk Rating
Pass1,947 18,261 9,891 2,815 — — — 32,914 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total real estate - construction and land loans, at amortized cost, gross1,947 18,261 9,891 2,815 — — — 32,914 
Gross write offs— — — — — — — — 
Commercial and industrial
Risk Rating
Pass84,402 40,301 32,982 10,715 36,641 8,778 — 213,819 
Special mention189 1,991 3,003 682 3,696 — — 9,561 
Substandard31 1,464 725 — 626 116 — 2,962 
Doubtful— 93 — 7 80 — — 180 
Total commercial and industrial loans, at amortized cost, gross84,622 43,849 36,710 11,404 41,043 8,894 — 226,522 
Gross write offs— 3,286 3,210 361 4,099 — — 10,956 
Commercial and industrial - PPP
Risk Rating
Pass— — — 135 302 — — 437 
Special mention— — — — 504 — — 504 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total commercial and industrial - PPP loans, at amortized cost, gross— — — 135 806 — — 941 
Gross write offs— — — — — — — — 
The Company considers the performance of the loan portfolio to determine its impact on the ACL. For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan by payment activity. The following table presents the principal balance at June 30, 2025 of residential and consumer loans based on payment activity as well as gross write offs for the six months ended June 30, 2025.
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
20252024202320222021PriorCost Basisto TermTotal
Real estate - residential
Payment Performance
Performing$7,627 $35,026 $24,370 $66,892 $21,286 $15,989 $178,304 $— $349,494 
Nonperforming— — 772 1,609 1,454 2,402 828 — 7,065 
Total real estate - residential loans, at amortized cost, gross7,627 35,026 25,142 68,501 22,740 18,391 179,132 — 356,559 
Gross write offs— — — — — — 842 — 842 
Consumer and other
Payment Performance
Performing9,814 54,786 20,059 6,343 277 51 1,899 — 93,229 
Nonperforming— — 13 91 — — — — 104 
Total consumer and other loans, at amortized cost, gross9,814 54,786 20,072 6,434 277 51 1,899 — 93,333 
Gross write offs20 611 174 611 6 5 24 — 1,451 
The following table presents the principal balance at December 31, 2024 of residential and consumer loans based on payment activity as well as gross write offs for the year ended December 31, 2024.
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
2024202320222021PriorCost Basisto TermTotal
Real estate - residential
Payment Performance
Performing$29,086 $26,473 $65,598 $32,235 $26,395 $145,265 $— $325,052 
Nonperforming— — 3,565 293 — 1,960 — 5,818 
Total real estate - residential loans, at amortized cost, gross29,086 26,473 69,163 32,528 26,395 147,225 — 330,870 
Gross write offs— — — — 20 — — 20 
RevolvingRevolving
LoansLoans
Term Loans Amortized Cost Basis by Origination YearAmortizedConverted
2024202320222021PriorCost Basisto TermTotal
Consumer and other
Payment Performance
Performing59,591 21,860 9,840 603 53 1,584 — 93,531 
Nonperforming84 — 186 — — 25 — 295 
Total consumer and other loans, at amortized cost, gross59,675 21,860 10,026 603 53 1,609 — 93,826 
Gross write offs— 236 2,351 35 316 — — 2,938