Changes in the allowance for credit losses on loans during the periods presented were as follows:

Accrued interest receivable related to loans totaled $7.2 million and $7.4 million at June 30, 2025, and December 31, 2024, respectively, and was reported in accrued interest receivable and other assets on the consolidated balance sheets. Accrued interest receivable was excluded from the estimate of credit losses.

Allocation of the allowance for credit losses on loans by portfolio segment for the three and six months ended June 30, 2025 and 2024 are as follows:


	For the Three Months Ended June 30,
	2025
(In thousands)	Commercial and Industrial		Construction		Residential Real Estate		Commercial Real Estate		Consumer		Total
Balance, March 31, 2025	$	10,989	$	2,822	$	367	$	4,523	$	21	$	18,722
Provision for credit losses on loans ⁽¹⁾		1,058		(288)		(14)		131		4		891
Charge-offs		–		–		–		–		–		–
Recoveries		11		–		–		–		–		11
Balance, June 30, 2025	$	12,058	$	2,534	$	353	$	4,654	$	25	$	19,624

	2024
Balance, March 31, 2024	$	9,833	$	3,453	$	136	$	5,916	$	4	$	19,342
Provision for credit losses on loans ⁽¹⁾		2,756		(248)		8		549		3		3,068
Charge-offs		–		–		–		–		–		–
Recoveries		–		–		–		–		–		–
Balance, June 30, 2024	$	12,589	$	3,205	$	144	$	6,465	$	7	$	22,410

	For the Six Months Ended June 30,
	2025
(In thousands)	Commercial and Industrial		Construction		Residential Real Estate		Commercial Real Estate		Consumer		Total
Balance, December 31, 2024	$	10,170	$	3,005	$	286	$	5,207	$	11	$	18,679
Provision for credit losses on loans ⁽¹⁾		1,834		(471)		67		(553)		14		891
Charge-offs		–		–		–		–		–		–
Recoveries		54		–		–		–		–		54
Balance, June 30, 2025	$	12,058	$	2,534	$	353	$	4,654	$	25	$	19,624

	2024
Balance, December 31, 2023	$	9,794	$	3,156	$	145	$	6,035	$	1	$	19,131
Provision for credit losses on loans ⁽¹⁾		2,795		49		(1)		430		6		3,279
Charge-offs		–		–		–		–		–		–
Recoveries		–		–		–		–		–		–
Balance, June 30, 2024	$	12,589	$	3,205	$	144	$	6,465	$	7	$	22,410
				9,794		3,156		145		6,035		1
(1) Excludes provision for unfunded commitments of $34,000 and ($70,000) for the three months ended June 30, 2025 and 2024, respectively, and $34,000 and $38,000 for the six months ended June 30, 2025 and 2024, respectively.

‎

The following tables present the risk category and gross charge-offs by vintage year, which is the year of origination or most recent renewal, as of the date indicated. Gross charge-offs are presented for the six months ended June 30, 2025 and the year ended December 31, 2024 in the tables below:


		Term Loans Amortized Cost Basis by Origination Year
(In thousands)		2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
June 30, 2025
Commercial and industrial
Risk Rating
Pass	$	103,400	$	116,907	$	61,101	$	47,282	$	34,990	$	13,164	$	448,463	$	5,500	$	830,807
Special Mention		–		–		4,296		3,689		–		–		8,992		–		16,977
Substandard		–		–		3,695		170		–		–		1,989		–		5,854
Substandard - Nonaccrual		–		–		–		–		–		104		–		–		104
Doubtful		–		–		1,228		–		–		–		–		–		1,228
Total	$	103,400	$	116,907	$	70,320	$	51,141	$	34,990	$	13,268	$	459,444	$	5,500	$	854,970
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Construction
Risk Rating
Pass	$	16,404	$	65,563	$	53,402	$	28,705	$	14,903	$	7,713	$	–	$	–	$	186,690
Special Mention		–		–		–		2,784		16,016		–		–		–		18,800
Total	$	16,404	$	65,563	$	53,402	$	31,489	$	30,919	$	7,713	$	–	$	–	$	205,490
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Residential Real Estate
Risk Rating
Pass	$	1,849	$	1,630	$	4,363	$	672	$	–	$	2,758	$	20,198	$	–	$	31,470
Total	$	1,849	$	1,630	$	4,363	$	672	$	–	$	2,758	$	20,198	$	–	$	31,470
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Commercial Real Estate
Risk Rating
Pass	$	106,634	$	58,260	$	159,492	$	130,419	$	133,379	$	222,388	$	7,758	$	–	$	818,330
Total	$	106,634	$	58,260	$	159,492	$	130,419	$	133,379	$	222,388	$	7,758	$	–	$	818,330
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Consumer
Risk Rating
Pass	$	–	$	–	$	–	$	–	$	–	$	–	$	2,386	$	–	$	2,386
Total	$	–	$	–	$	–	$	–	$	–	$	–	$	2,386	$	–	$	2,386
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Total
Pass	$	228,287	$	242,360	$	278,358	$	207,078	$	183,272	$	246,023	$	478,805	$	5,500	$	1,869,683
Special Mention		–		–		4,296		6,473		16,016		–		8,992		–		35,777
Substandard		–		–		3,695		170		–		–		1,989		–		5,854
Substandard - Nonaccrual		–		–		–		–		–		104		–		–		104
Doubtful		–		–		1,228		–		–		–		–		–		1,228
Total	$	228,287	$	242,360	$	287,577	$	213,721	$	199,288	$	246,127	$	489,786	$	5,500	$	1,912,646

‎


	Term Loans Amortized Cost Basis by Origination Year
(In thousands)		2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
December 31, 2024
Commercial and industrial
Risk Rating
Pass	$	131,267	$	95,642	$	66,474	$	74,282	$	13,715	$	6,223	$	413,781	$	–	$	801,384
Special Mention		–		5,524		4,031		318		69		–		1,950		–		11,892
Substandard		–		–		329		–		–		–		2,470		–		2,799
Substandard - Nonaccrual		–		–		–		–		–		113		–		–		113
Doubtful		–		1,234		–		–		–		–		–		–		1,234
Total	$	131,267	$	102,400	$	70,834	$	74,600	$	13,784	$	6,336	$	418,201	$	–	$	817,422
Gross charge-offs	$	4,361	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	4,361

Construction
Risk Rating
Pass	$	60,400	$	71,819	$	49,680	$	23,694	$	3,971	$	3,780	$	6,632	$	–	$	219,976
Special Mention		–		–		3,060		24,019		–		–		–		–		27,079
Total	$	60,400	$	71,819	$	52,740	$	47,713	$	3,971	$	3,780	$	6,632	$	–	$	247,055
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Residential Real Estate
Risk Rating
Pass	$	1,070	$	4,395	$	677	$	–	$	1,970	$	857	$	18,453	$	–	$	27,422
Total	$	1,070	$	4,395	$	677	$	–	$	1,970	$	857	$	18,453	$	–	$	27,422
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Commercial Real Estate
Risk Rating
Pass	$	58,681	$	163,333	$	134,121	$	143,578	$	46,213	$	203,190	$	20,723	$	–	$	769,839
Special Mention		–		–		–		–		–		1,420		2,000		–		3,420
Total	$	58,681	$	163,333	$	134,121	$	143,578	$	46,213	$	204,610	$	22,723	$	–	$	773,259
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Consumer
Risk Rating
Pass	$	–	$	–	$	–	$	–	$	–	$	–	$	957	$	–	$	957
Total	$	–	$	–	$	–	$	–	$	–	$	–	$	957	$	–	$	957
Gross charge-offs	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–	$	–

Total
Pass	$	251,418	$	335,189	$	250,952	$	241,554	$	65,869	$	214,050	$	460,546	$	–	$	1,819,578
Special Mention		–		5,524		7,091		24,337		69		1,420		3,950		–		42,391
Substandard		–		–		329		–		–		–		2,470		–		2,799
Substandard - Nonaccrual		–		–		–		–		–		113		–		–		113
Doubtful		–		1,234		–		–		–		–		–		–		1,234
Total	$	251,418	$	341,947	$	258,372	$	265,891	$	65,938	$	215,583	$	466,966	$	–	$	1,866,115

‎

The Company monitors loans by past due status. The following tables present the aging of past due loans as of June 30, 2025 and December 31, 2024:


	June 30, 2025
(In thousands)	60-89 Days Past Due		Greater Than 89 Days and Still Accruing		Nonaccrual Loans		Total Past Due and Nonaccrual Loans		Current		Total
Commercial and industrial	$	–	$	–	$	1,332	$	1,332	$	853,638	$	854,970
Construction		–		–		–		–		205,490		205,490
Residential Real Estate		–		–		–		–		31,470		31,470
Commercial Real Estate		–		–		–		–		818,330		818,330
Consumer		–		–		–		–		2,386		2,386
Total	$	–	$	–	$	1,332	$	1,332	$	1,911,314	$	1,912,646

	December 31, 2024
(In thousands)	60-89 Days Past Due		Greater Than 89 Days and Still Accruing		Nonaccrual Loans		Total Past Due and Nonaccrual		Current		Total
Commercial and industrial	$	–	$	–	$	1,347	$	1,347	$	816,075	$	817,422
Construction		–		–		–		–		247,055		247,055
Residential Real Estate		–		–		–		–		27,422		27,422
Commercial Real Estate		–		–		–		–		773,259		773,259
Consumer		–		–		–		–		957		957
Total	$	–	$	–	$	1,347	$	1,347	$	1,864,768	$	1,866,115

Loans that are deemed by management to no longer possess risk characteristics similar to other loans in the portfolio, or that have been identified as collateral-dependent, are evaluated individually for purposes of determining an appropriate lifetime allowance for credit losses. Loans deemed collateral-dependent require evaluation based on the estimated fair value of the underlying collateral, less estimated costs to sell. The following table presents outstanding loan balances of collateral-dependent loans by portfolio segment as of June 30, 2025 and December 31, 2024:

Collateral Type

(In thousands)

Real Property

Business Assets

Accounts Receivable

Equipment

Total

June 30, 2025

Commercial and industrial

104

–

104

Construction

–

Residential Real Estate

–

Commercial Real Estate

–

Consumer

–

Total

104

–

104

December 31, 2024

Commercial and industrial

113

–

113

Construction

–

Residential Real Estate

–

Commercial Real Estate

–

Consumer

–

Total

113

–

113

The recorded investment in loans includes accrued interest receivable and loan origination fees, net. For purposes of this disclosure, the unpaid principal balance is not reduced for any related allowance for credit losses.

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. In some cases, the Company provides multiple types of concessions on one loan.

The following tables present the amortized cost basis of loans at June 30, 2025 and June 30, 2024, that were both experiencing financial difficulty and were modified during the three and six months ended June 30, 2025 and 2024, by portfolio segment and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each segment of financing receivable is also presented below:

(In thousands)

Term Extension

Payment Delay and Term Extension

Interest Rate Reduction and Payment Delay

Interest Rate Reduction, Payment Delay and Term Extension

Principal Forgiveness, Interest Rate Reduction, Payment Delay and Term Extension

Total

% of Total Class

Three Months Ended June 30, 2025

Commercial and industrial

–

Construction

4,509

–

4,509

2.19

Residential Real Estate

–

Commercial Real Estate

–

Consumer

–

Total

4,509

–

4,509

0.24

Six Months Ended June 30, 2025

Commercial and industrial

2,295

–

2,295

0.27

Construction

28,276

–

28,276

13.76

Residential Real Estate

–

Commercial Real Estate

–

Consumer

–

Total

30,571

–

30,571

1.60

Three Months Ended June 30, 2024

Commercial and industrial

–

4,323

–

4,323

0.53

Construction

2,478

–

2,478

1.02

Residential Real Estate

–

Commercial Real Estate

–

Consumer

–

Total

2,478

4,323

–

6,801

0.38

Six Months Ended June 30, 2024

Commercial and industrial

16,352

4,323

–

20,675

2.51

Construction

11,242

–

11,242

4.64

Residential Real Estate

–

Commercial Real Estate

–

Consumer

–

Total

27,594

4,323

–

31,917

1.77

Commitments to lend additional funds to borrowers included in the previous tables totaled $0 and $1.5 million at June 30, 2025 and 2024, respectively. The Company monitors the performance of modified loans to assess the effectiveness of the modifications. There were no loans to borrowers experiencing financial difficulty, which had been modified in the prior 12 months, with a payment default during the six months ended June 30, 2025 and 2024.