v3.26.1
Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2026
Allowance for Credit Loss [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
The ACL is maintained at a level considered adequate to provide for estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. Management’s periodic evaluation of the adequacy of the ACL is based on known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is subjective as it requires material estimates that may be susceptible to significant revisions as more information becomes available.

Roll-Forward of ACL by Portfolio Segment
The following tables provide the activity of our allowance for credit losses for the three months ended March 31, 2026 and March 31, 2025 under the CECL model in accordance with ASC 326:
Three Months Ended March 31, 2026
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,676 $(3,867)$— $3,740 $3,549 
Home equity lines and loans1,162 — 1 109 1,272 
Residential mortgage926 — — 137 1,063 
Construction2,067 — — 163 2,230 
Commercial, industrial & other finance receivables2,982 (1,005)60 2,032 4,069 
Small business loans9,321 (2,549)62 894 7,728 
Consumer— — 1 (1)— 
Leases1,439 (745)283 364 1,341 
Total$21,573 $(8,166)$407 $7,438 $21,252 
​
Three Months Ended March 31, 2025
(dollars in thousands)Beginning BalanceCharge-offsRecoveriesProvision (recovery of provision) for credit lossesEnding balance
Commercial mortgage$3,469 $— $— $(87)$3,382 
Home equity lines and loans1,147 — 2 16 1,165 
Residential mortgage1,021 — — 6 1,027 
Construction923 (738)— 1,456 1,641 
Commercial, industrial & other finance receivables3,098 (1,430)17 1,080 2,765 
Small business loans6,304 (277)29 2,555 8,611 
Consumer— — 1 (1)— 
Leases2,476 (553)126 187 2,236 
Total$18,438 $(2,998)$175 $5,212 $20,827 
​
Reconciliation of Provision for Credit Losses
The following table provides a reconciliation of the provision for credit losses on the consolidated statements of income between the funded and unfunded components at the dates indicated:
Three Months Ended
March 31,
(dollars in thousands)20262025
Provision for credit losses - funded loans$7,438 $5,212 
Provision for credit losses - unfunded loans55 — 
Total provision for credit losses$7,493 $5,212 
Allowance Allocated by Portfolio Segment
The following tables detail the allocation of the ACL and the carrying value for loans and other finance receivables by portfolio segment based on the methodology used to evaluate the loans and other finance receivables at the dates indicated:
March 31, 2026
Allowance for credit lossesCarrying value of loans and leases
(dollars in thousands)Individually evaluated Collectively evaluated TotalIndividually evaluated Collectively evaluated Total
Commercial mortgage$— $3,549 $3,549 $6,748 $863,796 $870,544 
Home equity lines and loans57 1,215 1,272 2,223 107,572 109,795 
Residential mortgage (1)
177 886 1,063 8,853 212,124 220,977 
Construction307 1,923 2,230 7,688 335,688 343,376 
Commercial, industrial & other finance receivables977 3,092 4,069 7,179 437,216 444,395 
Small business loans1,308 6,420 7,728 23,911 110,557 134,468 
Consumer— — — — 303 303 
Leases, net— 1,341 1,341 — 40,837 40,837 
Total (2)
$2,826 $18,426 $21,252 $56,602 $2,108,093 $2,164,695 
(1) Excludes $14.1 million of loans at fair value.
(2) Excludes deferred fees.


December 31, 2025
Allowance for credit lossesCarrying value of loans and leases
(dollars in thousands)Individually evaluated Collectively evaluated TotalIndividually evaluated Collectively evaluated Total
Commercial mortgage$— $3,676 $3,676 $2,472 $876,968 $879,440 
Home equity lines and loans— 1,162 1,162 2,023 104,979 107,002 
Residential mortgage (1)
122 804 926 9,875 211,864 221,739 
Construction331 1,736 2,067 6,650 323,893 330,543 
Commercial, industrial & other finance receivables— 2,982 2,982 6,770 422,211 428,981 
Small business loans2,986 6,335 9,321 24,781 114,984 139,765 
Consumer— — — — 329 329 
Leases, net— 1,439 1,439 — 45,489 45,489 
Total (2)
$3,439 $18,134 $21,573 $52,571 $2,100,717 $2,153,288 
(1) Excludes $14.4 million of loans at fair value.
(2) Excludes deferred fees.

Credit Quality Indicators
As part of the process of determining the ACL to the different segments of the loan and lease portfolio, Management considers certain credit quality indicators. For the commercial mortgage, construction and commercial and industrial loan segments, periodic reviews of the individual loans are performed by Management. The results of these reviews are reflected in the risk grade assigned to each loan. These internally assigned grades are as follows:

•Pass – Considered to be satisfactory with no indications of deterioration.
•Special mention – Loans classified as special mention have a potential weakness that deserves Management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
•Substandard – Loans classified as substandard are inadequately protected by the current net worth and payment 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 classified as doubtful 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 existing facts, conditions, and values, highly questionable and improbable. Loan balances classified as doubtful have been reduced by partial charge-offs and are carried at their net realizable values.

The following tables detail the carrying value of loans and other finance receivables by portfolio segment based on year of origination and the credit quality indicators used to determine the allowance for credit losses at the dates indicated:

March 31, 2026Revolving Loans Converted to Term LoansRevolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20262025202420232022Prior
Commercial mortgage
Pass/Watch$15,213 $110,152 $127,157 $99,056 $160,664 $324,893 $— $— $837,135 
Special Mention— — — 10,782 1,458 2,990 — — 15,230 
Substandard— 5,022 1,339 1,008 4,163 6,647 — — 18,179 
Total$15,213 $115,174 $128,496 $110,846 $166,285 $334,530 $— $— $870,544 
Year-to-date gross charge-offs$— $— $— $— $(3,867)$— $— $— $(3,867)
Construction
Pass/Watch$17,502 $135,491 $104,605 $19,908 $3,246 $11,538 $— $32,634 $324,924 
Special Mention— — — — — — — — — 
Substandard239 1,430 211 1,185 10,887 1,864 — 2,636 18,452 
Total$17,741 $136,921 $104,816 $21,093 $14,133 $13,402 $— $35,270 $343,376 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial, industrial & other finance receivables
Pass/Watch$34,672 $68,269 $62,471 $13,928 $16,796 $30,030 $— $189,752 $415,918 
Special Mention— — — — 128 3,775 — 8,444 12,347 
Substandard— 350 — 850 — 6,286 — 8,644 16,130 
Total$34,672 $68,619 $62,471 $14,778 $16,924 $40,091 $— $206,840 $444,395 
Year-to-date gross charge-offs$— $(766)$(90)$— $— $(125)$— $(24)$(1,005)
Small business loans
Pass/Watch$10,286 $22,537 $15,396 $13,879 $15,730 $17,698 $— $8,840 $104,366 
Special Mention— 513 109 1,861 — 170 — 449 3,102 
Substandard— 3,238 1,537 4,814 1,015 12,974 — 3,422 27,000 
Total$10,286 $26,288 $17,042 $20,554 $16,745 $30,842 $— $12,711 $134,468 
Year-to-date gross charge-offs$— $(605)$(994)$(168)$(171)$(181)$— $(430)$(2,549)
Total by risk rating
Pass/Watch$77,673 $336,449 $309,629 $146,771 $196,436 $384,159 $— $231,226 $1,682,343 
Special Mention— 513 109 12,643 1,586 6,935 — 8,893 30,679 
Substandard239 10,040 3,087 7,857 16,065 27,771 — 14,702 79,761 
Total$77,912 $347,002 $312,825 $167,271 $214,087 $418,865 $— $254,821 $1,792,783 
Total year-to-date gross charge-offs$— $(1,371)$(1,084)$(168)$(4,038)$(306)$— $(454)$(7,421)
December 31, 2025Revolving Loans Converted to Term LoansRevolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20252024202320222021Prior
Commercial mortgage
Pass/Watch$116,630 $116,852 $102,516 $162,329 $127,627 $227,348 $— $— $853,302 
Special Mention— — 4,487 1,474 — 4,159 — — 10,120 
Substandard— — 1,029 8,074 — 6,915 — — 16,018 
Total$116,630 $116,852 $108,032 $171,877 $127,627 $238,422 $— $— $879,440 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction
Pass/Watch$117,778 $118,733 $19,858 $9,212 $3,373 $8,263 $— $29,906 $307,123 
Special Mention— — 6,245 — — — — — 6,245 
Substandard1,430 211 1,185 9,096 1,826 492 — 2,935 17,175 
Total$119,208 $118,944 $27,288 $18,308 $5,199 $8,755 $— $32,841 $330,543 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $(738)$(738)
Commercial, industrial & other finance receivables
Pass/Watch$84,183 $62,904 $16,119 $17,270 $9,224 $21,836 $— $193,356 $404,892 
Special Mention— — — 145 3,857 — — 4,608 8,610 
Substandard— — 850 — 523 5,360 — 8,746 15,479 
Total$84,183 $62,904 $16,969 $17,415 $13,604 $27,196 $— $206,710 $428,981 
Year-to-date gross charge-offs$(739)$(1,487)$(160)$(23)$(1,089)$— $— $(1,290)$(4,788)
Small business loans
Pass/Watch$29,760 $17,403 $17,955 $16,903 $9,448 $8,935 $— $10,713 $111,117 
Special Mention— 477 134 — — — — 140 751 
Substandard2,567 2,127 3,893 874 10,523 4,002 — 3,911 27,897 
Total$32,327 $20,007 $21,982 $17,777 $19,971 $12,937 $— $14,764 $139,765 
Year-to-date gross charge-offs$(1,211)$(433)$(550)$(233)$(692)$(1,057)$— $(813)$(4,989)
Total by risk rating
Pass/Watch$348,351 $315,892 $156,448 $205,714 $149,672 $266,382 $— $233,975 $1,676,434 
Special Mention— 477 10,866 1,619 3,857 4,159 — 4,748 25,726 
Substandard3,997 2,338 6,957 18,044 12,872 16,769 — 15,592 76,569 
Total$352,348 $318,707 $174,271 $225,377 $166,401 $287,310 $— $254,315 $1,778,729 
Total year-to-date gross charge-offs$(1,950)$(1,920)$(710)$(256)$(1,781)$(1,057)$— $(2,841)$(10,515)

The Corporation had no loans with a risk rating of Doubtful included within recorded investment in loans and leases held for investment at March 31, 2026 and December 31, 2025.
In addition to credit quality indicators as shown in the above tables, allowance allocations for home equity lines and loans, residential mortgages, consumer loans and leases are also applied based on their year of origination and performance status at the dates indicated:

March 31, 2026Revolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20262025202420232022Prior
Home equity lines and loans
Performing$— $1,094 $654 $194 $473 $3,119 $102,038 $107,572 
Nonperforming— — — — — 433 1,790 2,223 
Total$— $1,094 $654 $194 $473 $3,552 $103,828 $109,795 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Residential mortgage (1)
Performing$3,725 $25,616 $7,663 $24,072 $122,514 $28,144 $390 $212,124 
Nonperforming— — 722 669 2,272 5,190 — 8,853 
Total$3,725 $25,616 $8,385 $24,741 $124,786 $33,334 $390 $220,977 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Consumer
Performing$— $— $— $20 $9 $186 $88 $303 
Nonperforming— — — — — — — — 
Total$— $— $— $20 $9 $186 $88 $303 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Leases, net
Performing$3,400 $5,792 $379 $8,595 $16,253 $4,910 $— $39,329 
Nonperforming— — — 561 819 128 — 1,508 
Total$3,400 $5,792 $379 $9,156 $17,072 $5,038 $— $40,837 
Year-to-date gross charge-offs$— $(94)$— $(154)$(238)$(259)$— $(745)
Total by Payment Performance
Performing$7,125 $32,502 $8,696 $32,881 $139,249 $36,359 $102,516 $359,328 
Nonperforming— — 722 1,230 3,091 5,751 1,790 12,584 
Total$7,125 $32,502 $9,418 $34,111 $142,340 $42,110 $104,306 $371,912 
Total year-to-date gross charge-offs$— $(94)$— $(154)$(238)$(259)$— $(745)
(1) Excludes $14.1 million of loans at fair value.
December 31, 2025Revolving LoansTotal
Term Loans and Other Finance Receivables
(dollars in thousands)20252024202320222021Prior
Home equity lines and loans
Performing$1,103 $658 $196 $534 $207 $3,102 $99,179 $104,979 
Nonperforming— — — — 91 342 1,590 2,023 
Total$1,103 $658 $196 $534 $298 $3,444 $100,769 $107,002 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Residential mortgage (1)
Performing$25,957 $8,080 $26,278 $122,566 $15,775 $13,208 $— $211,864 
Nonperforming— 437 672 3,398 737 4,631 — 9,875 
Total$25,957 $8,517 $26,950 $125,964 $16,512 $17,839 $— $221,739 
Year-to-date gross charge-offs$— $— $— $— $— $— $— $— 
Consumer
Performing$— $5 $22 $12 $— $220 $70 $329 
Nonperforming— — — — — — — — 
Total$— $5 $22 $12 $— $220 $70 $329 
Year-to-date gross charge-offs$— $— $— $— $— $— $(11)$(11)
Leases, net
Performing$6,232 $482 $10,149 $19,369 $6,561 $717 $— $43,510 
Nonperforming— — 518 1,099 342 20 — 1,979 
Total$6,232 $482 $10,667 $20,468 $6,903 $737 $— $45,489 
Year-to-date gross charge-offs$— $— $(90)$(1,472)$(756)$(40)$— $(2,358)
Total by Payment Performance
Performing$33,292 $9,225 $36,645 $142,481 $22,543 $17,247 $99,249 $360,682 
Nonperforming— 437 1,190 4,497 1,170 4,993 1,590 13,877 
Total$33,292 $9,662 $37,835 $146,978 $23,713 $22,240 $100,839 $374,559 
Total year-to-date gross charge-offs$— $— $(90)$(1,472)$(756)$(40)$(11)$(2,369)
(1) Excludes $14.4 million of fair value loans.
Modifications to Borrowers Experiencing Financial Difficulty
An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL on loans and leases, a change to the allowance for credit losses is generally not recorded upon modification. However, when principal forgiveness is provided, the amortized cost basis of the asset is written off against the ACL on loans and leases. The amount of the principal forgiveness is deemed to be uncollectible; therefore, that portion of the loan is written off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the allowance for credit losses.
The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2026 and 2025.
Three Months Ended March 31, 2026Three Months Ended March 31, 2025
(dollars in thousands)NumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated ReserveNumberAmortized Cost Basis% of Total Class of Financing ReceivableRelated Reserve
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3$4,245 0.5 %$— 1$959 0.1 %$— 
Construction414,265 4.2 %83 32,869 1.0 %— 
Commercial, industrial & other finance receivables—— — %— 11,095 0.3 %— 
Small business loans21,094 0.8 %234 31,948 1.2 %— 
    Total9$19,604 $317 8$6,871 $— 
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage1$2,943 0.3 %$— —$— — %$— 
Residential mortgage1225 0.1 %— —— — %— 
Construction11,383 0.4 %115 12,907 1.0 %— 
Small business loans—— — %— 1565 0.4 %434 
Leases
9242 0.6 %6 —— — %— 
    Total12$4,793 $121 2$3,472 $434 
​
The following presents, by class, information regarding accruing and nonaccrual modifications to borrowers experiencing financial difficulty during the three months ended March 31, 2026 and 2025.
Three Months Ended
March 31, 2026		Three Months Ended
March 31, 2025
NumberFinancial EffectNumberFinancial Effect
Accruing Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage3Extend maturity date1Extend maturity/payment
Construction4Extend maturity date3Extend maturity date
Commercial, industrial & other finance receivables—1Extend maturity date
Small business loans2Extend maturity date3Extend maturity date
    Total98
Nonaccrual Modifications to Borrowers Experiencing Financial Difficulty:
Commercial mortgage1Interest only payments—
Residential mortgage1Extend maturity date—
Construction1Extend maturity date1Extend maturity date
Small business loans—1Extend maturity date
Leases9Extend maturity date—
    Total122
There were 21 and 10 modifications granted to borrowers experiencing financial difficulty during the three months ended March 31, 2026 and March 31, 2025, respectively. There were no loans that had payment defaults during the three months ended March 31, 2026, and 2025, respectively. There were $634 thousand in commitments to lend additional funds to the borrowers experiencing financial difficulty that had modifications during the three months ended March 31, 2026 and $882 thousand in commitments to lend additional funds to such borrowers during the three months ended March 31, 2025.

The increase period over period in assistance provided to borrowers experiencing financial difficulty was seen in leases, construction and commercial mortgage loans. The primary factor for the financial difficulty generally comes from higher interest rates or higher rates for longer periods.

The following presents, by class of loans, the amortized cost and performance status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty that have been modified in the last 12 months as of March 31, 2026 and 2025.

March 31, 2026
Current30-59 days past due60-89 days past due90+ days past due and still accruingNonaccrual loans and leasesTotal
(dollars in thousands)
Commercial mortgage$4,245 $— $— $— $4,330 $8,574 
Residential mortgage529 — — — 597 1,126 
Construction14,265 — — — 1,383 15,648 
Small business loans1,402 — — — 3,601 5,003 
Leases— — — — 242 242 
    Total$20,441 $— $— $— $11,003 $31,444 
March 31, 2025
Current30-59 days past due60-89 days past due90+ days past due and still accruingNonaccrual loans and leasesTotal
(dollars in thousands)
Commercial mortgage$1,388 $— $959 $— $— $2,347 
Residential mortgage— — — — 545 545 
Construction2,869 — — — 4,763 7,632 
Commercial, industrial & other finance receivables1,897 — — — 2,772 4,669 
Small business loans2,505 — — — 2,328 4,833 
    Total$8,659 $— $959 $— $10,408 $20,026