v3.26.1
Loans Receivable and ACL-Loans
 3 Months Ended
Mar. 31, 2026
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 March 31, 2026 and December 31, 2025:
(In thousands)March 31, 2026December 31, 2025
Real estate loans:
Residential$30,128 $33,139 
Commercial1,896,565 1,930,979 
Construction155,826 153,778 
2,082,519 2,117,896 
Commercial business723,272 645,321 
Consumer60,827 76,855 
Total loans2,866,618 2,840,072 
ACL-Loans(29,580)(30,705)
Deferred loan origination fees, net(4,360)(4,926)
Loans receivable, net$2,832,678 $2,804,441 

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 income producing 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, time 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 consumer 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 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 months ended March 31, 2026 and 2025, by portfolio segment:    
Residential Real EstateCommercial Real EstateConstructionCommercial BusinessConsumerTotal
(In thousands)
Three Months Ended March 31, 2026
Beginning balance$55 $20,255 $2,251 $6,635 $1,509 $30,705 
Charge-offs— — — (148)(73)(221)
Recoveries— 5 — 15 33 53 
Provision (credit) for credit losses(7)(1,672)(339)1,204 (143)(957)
Ending balance$48 $18,588 $1,912 $7,706 $1,326 $29,580 

Residential Real EstateCommercial Real EstateConstructionCommercial BusinessConsumerTotal
(In thousands)
Three Months Ended March 31, 2025
Beginning Balance$94 $21,838 $2,059 $4,070 $946 $29,007 
Charge-offs— (67)— — (33)(100)
Recoveries— — — 4 36 40 
(Credit) provision for credit losses(7)(1,209)157 1,170 427 538 
Ending balance$87 $20,562 $2,216 $5,244 $1,376 $29,485 

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 on an amortized cost basis (which includes deferred fees and costs and accrued interest) as of March 31, 2026 and December 31, 2025 (dollars in thousands):
Term Loans
Amortized Cost Balances by Origination Year as of March 31, 2026
20262025202420232022PriorTotal
Residential Real Estate Loans
Pass$— $— $— $— $— $27,265 $27,265 
Special Mention— — — — — 274 274 
Substandard— — — — — 2,734 2,734 
Doubtful— — — — — — — 
Total Residential Real Estate Loans$— $— $— $— $— $30,273 $30,273 
Residential Real Estate charge-off
Current period charge-offs$— $— $— $— $— $— $— 
Commercial Real Estate Loans
Pass$66,583 $353,665 $86,298 $97,865 $532,193 $652,190 $1,788,794 
Special Mention— — 9,834 — 62,258 1,654 73,746 
Substandard— — 21,432 — 3,575 15,112 40,119 
Doubtful— — — — — — — 
Total Commercial Real Estate Loans$66,583 $353,665 $117,564 $97,865 $598,026 $668,956 $1,902,659 
Commercial Real Estate charge-off
Current period charge-offs$— $— $— $— $— $— $— 
Construction Loans
Pass$7,838 $37,569 $43,495 $42,054 $5,817 $— $136,773 
Special Mention— — — — 19,845 — 19,845 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Construction Loans$7,838 $37,569 $43,495 $42,054 $25,662 $— $156,618 
Construction charge-off
Current period charge-offs$— $— $— $— $— $— $— 
Commercial Business Loans
Pass$83,747 $284,163 $95,500 $65,388 $127,138 $65,052 $720,988 
Special Mention— 14 1,008 — 4,009 — 5,031 
Substandard— 287 — 19 — 1,307 1,613 
Doubtful— 84 — — — — 84 
Total Commercial Business Loans$83,747 $284,548 $96,508 $65,407 $131,147 $66,359 $727,716 
Commercial Business charge-off
Current period charge-offs$— $29 $— $— $— $119 $148 
Consumer Loans
Pass$492 $22,837 $19,114 $3,021 $15,201 $40 $60,705 
Special Mention— — — — — — — 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Consumer Loans$492 $22,837 $19,114 $3,021 $15,201 $40 $60,705 
Consumer charge-off
Current period charge-offs$— $21 $34 $— $13 $5 $73 
Total Loans
Pass$158,660 $698,234 $244,407 $208,328 $680,349 $744,547 $2,734,525 
Special Mention— 14 10,842 — 86,112 1,928 98,896 
Substandard— 287 21,432 19 3,575 19,153 44,466 
Doubtful— 84 — — — — 84 
Total Loans$158,660 $698,619 $276,681 $208,347 $770,036 $765,628 $2,877,971 
Total charge-off
Current period charge-offs$— $50 $34 $— $13 $124 $221 
Term Loans
Amortized Cost Balances by Origination Year as of December 31, 2025
20252024202320222021PriorTotal
Residential Real Estate Loans
Pass$— $— $— $— $— $30,252 $30,252 
Special Mention— — — — — 281 281 
Substandard— — — — — 2,766 2,766 
Doubtful— — — — — — — 
Total Residential Real Estate Loans$— $— $— $— $— $33,299 $33,299 
Residential Real Estate charge-off
Current period charge-offs$— $— $— $— $— $— $— 
Commercial Real Estate Loans
Pass$391,466 $97,473 $104,421 $573,183 $213,785 $458,047 $1,838,375 
Special Mention— — — 53,776 — 1,666 55,442 
Substandard— 21,358 — 7,059 8,521 6,934 43,872 
Doubtful— — — — — — — 
Total Commercial Real Estate Loans$391,466 $118,831 $104,421 $634,018 $222,306 $466,647 $1,937,689 
Commercial Real Estate charge-off
Current period charge-offs$— $— $— $— $67 $— $67 
Construction Loans
Pass$37,221 $40,676 $51,218 $5,720 $— $— $134,835 
Special Mention— — — 19,744 — — 19,744 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Construction Loans$37,221 $40,676 $51,218 $25,464 $— $— $154,579 
Construction charge-off
Current period charge-offs$— $— $— $— $— $— $— 
Commercial Business Loans
Pass$284,001 $91,887 $66,754 $130,596 $40,896 $25,904 $640,038 
Special Mention— — 7 5,302 — 127 5,436 
Substandard294 — 30 316 1,299 3 1,942 
Doubtful— — — — — — — 
Total Commercial Business Loans$284,295 $91,887 $66,791 $136,214 $42,195 $26,034 $647,416 
Commercial Business charge-off
Current period charge-offs$29 $— $— $— $— $— $29 
Consumer Loans
Pass$21,332 $21,782 $3,022 $28,844 $— $38 $75,018 
Special Mention— — — — — — — 
Substandard— — — — — — — 
Doubtful— — — — — — — 
Total Consumer Loans$21,332 $21,782 $3,022 $28,844 $— $38 $75,018 
Consumer charge-off
Current period charge-offs$74 $— $— $— $— $10 $84 
Total Loans
Pass$734,020 $251,818 $225,415 $738,343 $254,681 $514,241 $2,718,518 
Special Mention— — 7 78,822 — 2,074 80,903 
Substandard294 21,358 30 7,375 9,820 9,703 48,580 
Doubtful— — — — — — — 
Total Loans$734,314 $273,176 $225,452 $824,540 $264,501 $526,018 $2,848,001 
Total charge-off
Current period charge-offs$103 $— $— $— $67 $10 $180 
Loans evaluated for impairment and the related ACL-Loans as of March 31, 2026 and December 31, 2025 were as follows:
PortfolioACL-Loans
(In thousands)
March 31, 2026
Loans individually evaluated for impairment:
Residential real estate$2,719 $— 
Commercial real estate40,095 — 
Construction— — 
Commercial business1,665 — 
Consumer25,662 — 
Subtotal70,141 — 
Loans collectively evaluated for impairment:
Residential real estate27,409 48 
Commercial real estate1,856,470 18,588 
Construction155,826 1,912 
Commercial business721,607 7,706 
Consumer35,165 1,326 
Subtotal2,796,477 29,580 
Total$2,866,618 $29,580 

PortfolioACL-Loans
(In thousands)
December 31, 2025
Loans individually evaluated for impairment:
Residential real estate$2,751 $— 
Commercial real estate35,767 — 
Construction— — 
Commercial business1,595 — 
Consumer38,820 — 
Subtotal78,933 — 
Loans collectively evaluated for impairment:
Residential real estate30,388 55 
Commercial real estate1,895,212 20,255 
Construction153,778 2,251 
Commercial business643,726 6,635 
Consumer38,035 1,509 
Subtotal2,761,139 30,705 
Total$2,840,072 $30,705 

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 March 31, 2026 and December 31, 2025:
Commercial Credit Quality Indicators
March 31, 2026December 31, 2025
Commercial Real EstateConstructionCommercial BusinessTotalCommercial Real EstateConstructionCommercial BusinessTotal
(In thousands)
Pass$1,783,008 $136,101 $716,606 $2,635,715 $1,832,061 $134,141 $638,012 $2,604,214 
Special Mention73,462 19,725 5,001 98,188 55,114 19,637 5,400 80,151 
Substandard40,095 — 1,581 41,676 43,804 — 1,909 45,713 
Doubtful— — 84 84 — — — — 
Loss— — — — — — — — 
Total loans$1,896,565 $155,826 $723,272 $2,775,663 $1,930,979 $153,778 $645,321 $2,730,078 

Residential and Consumer Credit Quality Indicators
March 31, 2026December 31, 2025
Residential Real EstateConsumerTotalResidential Real EstateConsumerTotal
(In thousands)
Pass$27,138 $60,827 $87,965 $30,110 $76,855 $106,965 
Special Mention271 — 271 278 — 278 
Substandard2,719 — 2,719 2,751 — 2,751 
Doubtful— — — — — — 
Loss— — — — — — 
Total loans$30,128 $60,827 $90,955 $33,139 $76,855 $109,994 
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 March 31, 2026 and December 31, 2025:
March 31, 2026
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$1,088 $— $— $1,088 $29,040 $30,128 
Commercial real estate5,767 — 8,651 14,418 1,882,147 1,896,565 
Construction— — — — 155,826 155,826 
Commercial business987 — 1,362 2,349 720,923 723,272 
Consumer— — — — 60,827 60,827 
Total loans$7,842 $— $10,013 $17,855 $2,848,763 $2,866,618 

December 31, 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$557 $— $— $557 $32,582 $33,139 
Commercial real estate56 — 5,901 5,957 1,925,022 1,930,979 
Construction— — — — 153,778 153,778 
Commercial business1,106 17 1,273 2,396 642,925 645,321 
Consumer5 — — 5 76,850 76,855 
Total loans$1,724 $17 $7,174 $8,915 $2,831,157 $2,840,072 

There were no loans delinquent greater than 90 days and still accruing interest as of March 31, 2026 or December 31, 2025.
Loans on nonaccrual status

The following is a summary of nonaccrual loans by portfolio segment as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
(In thousands)
Residential real estate$544 $557 
Commercial real estate17,112 14,445 
Commercial business1,380 1,302 
Construction— — 
Consumer— — 
Total$19,036 $16,304 

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 three months ended March 31, 2026 and 2025 was $0.5 million and $0.6 million, respectively.

At March 31, 2026 and December 31, 2025, there were no commitments to lend additional funds to any borrower on nonaccrual status. Nonaccrual loans with no specific reserve totaled $19.0 million and $16.3 million at March 31, 2026 and December 31, 2025, 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.

Within the Consumer portfolio segment, the Company individually evaluated all insurance premium loans as well as cash-secured loans to individuals.
The following table summarizes individually evaluated loans by portfolio segment as of March 31, 2026 and December 31, 2025.
Carrying AmountUnpaid Principal BalanceAssociated ACL-Loans
March 31, 2026December 31, 2025March 31, 2026December 31, 2025March 31, 2026December 31, 2025
(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate$2,719 $2,751 $3,076 $3,098 $— $— 
Commercial real estate40,095 35,767 49,873 45,462 — — 
Construction— — — — — — 
Commercial business1,665 1,595 2,377 2,290 — — 
Consumer25,662 38,820 25,662 38,820 — — 
Total individually evaluated loans without a valuation allowance70,141 78,933 80,988 89,670 — — 
Individually evaluated loans with a valuation allowance:
Residential real estate$— $— $— $— $— $— 
Commercial real estate— — — — — — 
Construction— — — — — — 
Commercial business— — — — — — 
Consumer— — — — — — 
Total individually evaluated loans with a valuation allowance— — — — — — 
Total individually evaluated loans$70,141 $78,933 $80,988 $89,670 $— $— 
The following table summarizes the average carrying amount of individually evaluated loans and interest income recognized on individually evaluated loans by portfolio segment for the three months ended March 31, 2026 and 2025:

Average Carrying AmountInterest Income Recognized
Three Months Ended March 31,Three Months Ended March
 31,
2026202520262025
(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate$2,729 $3,071 $42 $64 
Commercial real estate42,464 18,161 483 48 
Commercial business1,863 7,643 56 20 
Construction— — — — 
Consumer34,270 54,249 290 569 
Total individually evaluated loans without a valuation allowance81,326 83,124 871 701 
Individually evaluated loans with a valuation allowance:
Residential real estate$— $— $— $— 
Commercial real estate— — — — 
Commercial business— — — — 
Construction— — — — 
Consumer— — — — 
Total individually evaluated loans with a valuation allowance— — — — 
Total individually evaluated loans$81,326 $83,124 $871 $701 

Loan Modifications

A loan will be considered modified as defined by ASU 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 ASU 326 at March 31, 2026. There was one loan modification reportable under ASC 326 for $0.3 million at December 31, 2025. There were no nonaccrual modified loans at March 31, 2026 and December 31, 2025. There were no loans modified that re-defaulted at March 31, 2026 and December 31, 2025.
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 months ended March 31, 2026 and March 31, 2025:
Three Months Ended March 31,
20262025
(In thousands)
Balance at beginning of period$488 $756 
(Credit) for credit losses (unfunded commitments)(72)(75)
Balance at end of period$416 $681 

Components of Provision (Credit) for Credit Losses

The following table summarizes the Provision (credit) for credit losses for the three months ended March 31, 2026 and March 31, 2025:
Three Months Ended March 31,
20262025
(In thousands)
(Credit) provision for credit losses (loans)$(957)$538 
(Credit) for credit losses (unfunded commitments)(72)(75)
(Credit) provision for credit losses$(1,029)$463