LOANS AND ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Jun. 30, 2026

LOANS AND ALLOWANCE FOR CREDIT LOSSES

NOTE E: LOANS AND ALLOWANCE FOR CREDIT LOSSES

The segments of the Company’s loan portfolio are summarized as follows:


	June 30,		December 31,
(000’s omitted)	2026		2025
CRE – multifamily	$	951,856	$	917,586
CRE – owner occupied		892,342		871,801
CRE – non-owner occupied		1,848,158		1,670,451
Commercial & industrial and other business loans		1,348,263		1,274,029
Consumer mortgage		3,629,301		3,617,186
Consumer indirect		1,871,343		1,859,354
Consumer direct		202,387		205,595
Home equity		539,174		533,755
Gross loans, including deferred origination costs		11,282,824		10,949,757
Allowance for credit losses		(91,696)		(87,921)
Loans, net of allowance for credit losses	$	11,191,128	$	10,861,836

The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of June 30, 2026 and December 31, 2025:


	Past Due		90+ Days Past
(000’s omitted)	30 – 89		Due and				Total
June 30, 2026	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
CRE – multifamily	$	333	$	0	$	437	$	770	$	951,086	$	951,856
CRE – owner occupied		2,171		0		4,286		6,457		885,885		892,342
CRE – non-owner occupied		587		0		1,795		2,382		1,845,776		1,848,158
Commercial & industrial and other business loans		2,993		0		11,109		14,102		1,334,161		1,348,263
Consumer mortgage		30,620		4,917		29,590		65,127		3,564,174		3,629,301
Consumer indirect		19,459		859		0		20,318		1,851,025		1,871,343
Consumer direct		1,839		153		0		1,992		200,395		202,387
Home equity		3,080		1,183		2,473		6,736		532,438		539,174
Total	$	61,082	$	7,112	$	49,690	$	117,884	$	11,164,940	$	11,282,824


	Past Due		90+ Days Past
(000’s omitted)	30 – 89		Due and				Total
December 31, 2025	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
CRE – multifamily	$	861	$	0	$	437	$	1,298	$	916,288	$	917,586
CRE – owner occupied		1,050		0		6,687		7,737		864,064		871,801
CRE – non-owner occupied		399		0		87		486		1,669,965		1,670,451
Commercial & industrial and other business loans		3,372		0		12,533		15,905		1,258,124		1,274,029
Consumer mortgage		28,206		4,497		27,686		60,389		3,556,797		3,617,186
Consumer indirect		24,052		1,052		0		25,104		1,834,250		1,859,354
Consumer direct		2,123		393		0		2,516		203,079		205,595
Home equity		3,861		1,006		2,079		6,946		526,809		533,755
Total	$	63,924	$	6,948	$	49,509	$	120,381	$	10,829,376	$	10,949,757

Interest income on nonaccrual loans of $0.1 million and $0.5 million was recognized during the three and six months ended June 30, 2026, respectively, and $0.1 million and $0.2 million during the three and six months ended June 30, 2025, respectively.

The Company uses several credit quality indicators to assess credit risk in an ongoing manner. The Company’s primary credit quality indicator for its business lending portfolio is an internal credit risk rating system that categorizes loans as “pass”, “special mention”, “substandard”, or “doubtful”. Credit risk ratings are applied to loans individually based on a case-by-case evaluation. Business lending loans under $250,000 are assigned either a “pass” or “substandard” risk rating. Business lending relationships with total exposures above management-defined thresholds are subject to a formal annual review to affirm the appropriate risk rating. Quarterly credit evaluations may also be completed based on the borrower’s risk rating. For all business lending relationships regardless of exposure size, risk ratings are refreshed when a borrower makes a new loan request, a loan is renewed or automated tools indicate a possible change in a borrower’s credit risk profile. In general, the following are the definitions of the Company’s credit quality indicators.


Pass		The condition of the borrower and the performance of the loans are satisfactory or better.
Special Mention		The condition of the borrower has deteriorated and the loan has potential weaknesses, although the loan performs as agreed. Loss may be incurred at some future date if conditions deteriorate further.
Substandard		The condition of the borrower has significantly deteriorated and the loan has a well-defined weakness or weaknesses. The performance of the loan could further deteriorate and incur loss if deficiencies are not corrected.
Doubtful		The condition of the borrower has deteriorated to the point that collection of the balance is improbable based on current facts and conditions and loss is likely.

The following tables show the amount of business lending loans by credit quality category at June 30, 2026 and December 31, 2025:


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
June 30, 2026	2026		2025		2024		2023		2022		2021 & Prior		Cost Basis		to Term		Total
CRE – multifamily:
Risk rating
Pass	$	28,917	$	146,543	$	10,540	$	88,803	$	127,902	$	155,335	$	153,482	$	201,261	$	912,783
Special mention		0		0		0		0		3,559		9,056		0		1,076		13,691
Substandard		0		0		0		8,805		0		13,588		97		2,892		25,382
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – multifamily	$	28,917	$	146,543	$	10,540	$	97,608	$	131,461	$	177,979	$	153,579	$	205,229	$	951,856
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

CRE – owner occupied:
Risk rating
Pass	$	62,090	$	98,070	$	82,212	$	34,915	$	55,518	$	253,112	$	56,778	$	200,099	$	842,794
Special mention		3,133		1,298		1,043		4,678		3,562		2,959		470		11,996		29,139
Substandard		0		1,562		1,783		0		4,662		9,948		316		2,138		20,409
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – owner occupied	$	65,223	$	100,930	$	85,038	$	39,593	$	63,742	$	266,019	$	57,564	$	214,233	$	892,342
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	134	$	0	$	0	$	0	$	0	$	134

CRE – non-owner occupied:
Risk rating
Pass	$	177,019	$	173,575	$	66,630	$	73,904	$	174,673	$	372,123	$	429,740	$	217,234	$	1,684,898
Special mention		0		0		1,395		8,421		2,087		23,082		14,790		24,798		74,573
Substandard		0		0		79		9,398		46,175		10,877		5,460		15,910		87,899
Doubtful		0		0		0		0		0		788		0		0		788
Total CRE – non-owner occupied	$	177,019	$	173,575	$	68,104	$	91,723	$	222,935	$	406,870	$	449,990	$	257,942	$	1,848,158
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Commercial & industrial and other business loans:
Risk rating
Pass	$	120,323	$	200,667	$	128,243	$	42,499	$	45,544	$	107,244	$	516,855	$	94,288	$	1,255,663
Special mention		3,715		1,530		6,600		1,012		2,242		1,255		24,316		6,674		47,344
Substandard		36		2,045		3,204		2,133		2,662		6,206		21,101		4,611		41,998
Doubtful		0		1,532		0		0		0		0		0		1,726		3,258
Total commercial & industrial and other business loans	$	124,074	$	205,774	$	138,047	$	45,644	$	50,448	$	114,705	$	562,272	$	107,299	$	1,348,263
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	777	$	0	$	0	$	0	$	243	$	302	$	1,322

Total business lending:
Risk rating
Pass	$	388,349	$	618,855	$	287,625	$	240,121	$	403,637	$	887,814	$	1,156,855	$	712,882	$	4,696,138
Special mention		6,848		2,828		9,038		14,111		11,450		36,352		39,576		44,544		164,747
Substandard		36		3,607		5,066		20,336		53,499		40,619		26,974		25,551		175,688
Doubtful		0		1,532		0		0		0		788		0		1,726		4,046
Total business lending	$	395,233	$	626,822	$	301,729	$	274,568	$	468,586	$	965,573	$	1,223,405	$	784,703	$	5,040,619
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	777	$	134	$	0	$	0	$	243	$	302	$	1,456

(1)For the six months ended June 30, 2026.


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
December 31, 2025	2025		2024		2023		2022		2021		2020 & Prior		Cost Basis		to Term		Total
CRE – multifamily:
Risk rating
Pass	$	138,662	$	13,544	$	90,834	$	125,581	$	38,245	$	130,435	$	131,129	$	173,234	$	841,664
Special mention		0		0		8,522		9,317		9,019		5,089		4,979		24,825		61,751
Substandard		0		0		0		387		1,084		8,109		1,647		2,944		14,171
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – multifamily	$	138,662	$	13,544	$	99,356	$	135,285	$	48,348	$	143,633	$	137,755	$	201,003	$	917,586
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	0	$	19	$	82	$	428	$	0	$	529

CRE – owner occupied:
Risk rating
Pass	$	119,369	$	87,429	$	39,911	$	60,476	$	47,869	$	228,439	$	20,295	$	192,919	$	796,707
Special mention		1,310		6,357		3,082		751		0		4,995		339		28,113		44,947
Substandard		1,449		1,571		1,024		7,066		3,073		9,895		337		5,732		30,147
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – owner occupied	$	122,128	$	95,357	$	44,017	$	68,293	$	50,942	$	243,329	$	20,971	$	226,764	$	871,801
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	47	$	0	$	9	$	0	$	0	$	56

CRE – non-owner occupied:
Risk rating
Pass	$	182,535	$	67,569	$	97,829	$	189,423	$	97,178	$	311,706	$	351,501	$	218,249	$	1,515,990
Special mention		3,067		1,407		4,748		0		2,593		19,642		19,024		24,679		75,160
Substandard		0		86		7,958		45,008		1,621		6,319		6,292		12,017		79,301
Doubtful		0		0		0		0		0		0		0		0		0
Total CRE – non-owner occupied	$	185,602	$	69,062	$	110,535	$	234,431	$	101,392	$	337,667	$	376,817	$	254,945	$	1,670,451
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	0	$	0	$	1,111	$	0	$	0	$	3,198	$	4,309

Commercial & industrial and other business loans:
Risk rating
Pass	$	244,969	$	149,911	$	48,679	$	59,557	$	47,301	$	86,492	$	441,487	$	85,982	$	1,164,378
Special mention		2,175		10,772		1,289		2,810		1,342		860		35,197		8,109		62,554
Substandard		3,223		2,348		4,420		3,236		2,091		5,176		21,029		3,996		45,519
Doubtful		0		0		0		0		0		0		1,578		0		1,578
Total commercial & industrial and other business loans	$	250,367	$	163,031	$	54,388	$	65,603	$	50,734	$	92,528	$	499,291	$	98,087	$	1,274,029
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	235	$	209	$	150	$	50	$	303	$	1,293	$	2,240

Total business lending:
Risk rating
Pass	$	685,535	$	318,453	$	277,253	$	435,037	$	230,593	$	757,072	$	944,412	$	670,384	$	4,318,739
Special mention		6,552		18,536		17,641		12,878		12,954		30,586		59,539		85,726		244,412
Substandard		4,672		4,005		13,402		55,697		7,869		29,499		29,305		24,689		169,138
Doubtful		0		0		0		0		0		0		1,578		0		1,578
Total business lending	$	696,759	$	340,994	$	308,296	$	503,612	$	251,416	$	817,157	$	1,034,834	$	780,799	$	4,733,867
Current period gross charge-offs⁽¹⁾	$	0	$	0	$	235	$	256	$	1,280	$	141	$	731	$	4,491	$	7,134

(1)For the year ended December 31, 2025.

All other loans are underwritten and structured using standardized criteria and characteristics, primarily payment performance, and are monitored collectively on a monthly basis. These are typically loans to individuals in the consumer categories and are delineated as either performing or nonperforming. Performing loans include loans classified as current as well as those classified as 30 - 89 days past due. Nonperforming loans include 90+ days past due and still accruing and nonaccrual loans.

The following tables detail the balances in all other loan categories at June 30, 2026 and December 31, 2025:


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
June 30, 2026	2026		2025		2024		2023		2022		2021 & Prior		Cost Basis		to Term		Total
Consumer mortgage:
FICO AB⁽¹⁾
Performing	$	110,051	$	270,214	$	266,555	$	286,536	$	284,958	$	1,056,651	$	24,210	$	162,648	$	2,461,823
Nonperforming		0		0		848		1,353		705		3,666		0		191		6,763
Total FICO AB		110,051		270,214		267,403		287,889		285,663		1,060,317		24,210		162,839		2,468,586
FICO CDE⁽²⁾
Performing		52,655		125,218		137,644		121,927		119,595		507,259		7,996		60,677		1,132,971
Nonperforming		0		704		3,730		3,971		5,361		12,743		152		1,083		27,744
Total FICO CDE		52,655		125,922		141,374		125,898		124,956		520,002		8,148		61,760		1,160,715
Total consumer mortgage	$	162,706	$	396,136	$	408,777	$	413,787	$	410,619	$	1,580,319	$	32,358	$	224,599	$	3,629,301
Current period gross charge-offs⁽³⁾	$	0	$	0	$	0	$	0	$	0	$	94	$	0	$	0	$	94

Consumer indirect:
Performing	$	396,772	$	650,588	$	363,254	$	236,079	$	153,238	$	70,553	$	0	$	0	$	1,870,484
Nonperforming		0		242		170		170		205		72		0		0		859
Total consumer indirect	$	396,772	$	650,830	$	363,424	$	236,249	$	153,443	$	70,625	$	0	$	0	$	1,871,343
Current period gross charge-offs⁽³⁾	$	230	$	1,386	$	1,770	$	1,398	$	1,163	$	700	$	0	$	0	$	6,647

Consumer direct:
Performing	$	51,859	$	65,632	$	39,728	$	20,860	$	9,478	$	7,581	$	7,045	$	51	$	202,234
Nonperforming		0		43		7		8		0		58		37		0		153
Total consumer direct	$	51,859	$	65,675	$	39,735	$	20,868	$	9,478	$	7,639	$	7,082	$	51	$	202,387
Current period gross charge-offs⁽³⁾⁽⁴⁾	$	21	$	542	$	531	$	206	$	166	$	482	$	2,183	$	0	$	4,131

Home equity:
Performing	$	21,812	$	60,221	$	56,276	$	40,122	$	42,455	$	100,139	$	186,525	$	27,968	$	535,518
Nonperforming		0		47		538		722		482		761		928		178		3,656
Total home equity	$	21,812	$	60,268	$	56,814	$	40,844	$	42,937	$	100,900	$	187,453	$	28,146	$	539,174
Current period gross charge-offs⁽³⁾	$	0	$	0	$	0	$	27	$	0	$	3	$	11	$	0	$	41

(1)FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720.

(2)FICO CDE refers to loans with FICO scores less than 720 and potentially higher risk.

(3)For the six months ended June 30, 2026.

(4)Includes overdraft gross charge-offs.


													Revolving		Revolving
													Loans		Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized		Converted
December 31, 2025	2025		2024		2023		2022		2021		2020 & Prior		Cost Basis		to Term		Total
Consumer mortgage:
FICO AB⁽¹⁾
Performing	$	293,599	$	279,289	$	302,498	$	298,302	$	382,256	$	736,261	$	22,665	$	148,004	$	2,462,874
Nonperforming		0		572		981		718		875		2,872		0		0		6,018
Total FICO AB		293,599		279,861		303,479		299,020		383,131		739,133		22,665		148,004		2,468,892
FICO CDE⁽²⁾
Performing		117,026		141,528		127,586		126,599		140,660		400,453		14,422		53,855		1,122,129
Nonperforming		0		3,845		3,626		4,325		1,546		11,964		0		859		26,165
Total FICO CDE		117,026		145,373		131,212		130,924		142,206		412,417		14,422		54,714		1,148,294
Total consumer mortgage	$	410,625	$	425,234	$	434,691	$	429,944	$	525,337	$	1,151,550	$	37,087	$	202,718	$	3,617,186
Current period gross charge-offs⁽³⁾	$	0	$	0	$	21	$	5	$	0	$	30	$	0	$	0	$	56

Consumer indirect:
Performing	$	760,499	$	458,410	$	312,256	$	217,772	$	69,818	$	39,547	$	0	$	0	$	1,858,302
Nonperforming		101		279		236		223		70		143		0		0		1,052
Total consumer indirect	$	760,600	$	458,689	$	312,492	$	217,995	$	69,888	$	39,690	$	0	$	0	$	1,859,354
Current period gross charge-offs⁽³⁾	$	1,199	$	3,323	$	4,127	$	2,838	$	1,135	$	948	$	0	$	0	$	13,570

Consumer direct:
Performing	$	88,898	$	53,200	$	29,486	$	15,546	$	4,904	$	5,846	$	7,251	$	71	$	205,202
Nonperforming		39		74		65		56		4		51		97		7		393
Total consumer direct	$	88,937	$	53,274	$	29,551	$	15,602	$	4,908	$	5,897	$	7,348	$	78	$	205,595
Current period gross charge-offs⁽³⁾	$	205	$	891	$	701	$	392	$	55	$	25	$	232	$	0	$	2,501

Home equity:
Performing	$	65,113	$	60,987	$	44,399	$	46,641	$	45,505	$	66,152	$	172,782	$	29,091	$	530,670
Nonperforming		0		290		773		543		71		704		620		84		3,085
Total home equity	$	65,113	$	61,277	$	45,172	$	47,184	$	45,576	$	66,856	$	173,402	$	29,175	$	533,755
Current period gross charge-offs⁽³⁾	$	0	$	0	$	112	$	0	$	0	$	34	$	7	$	0	$	153

(1)FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720.

(2)FICO CDE refers to loans with FICO scores less than 720 and potentially higher risk.

(3)For the year ended December 31, 2025.

For business lending loans on nonaccrual greater than $500,000 that do not share the same risk characteristics with a pool of loans, the company establishes individually assessed reserves using methods prescribed by GAAP. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A summary of individually assessed business loans as of June 30, 2026 and December 31, 2025 follows:


	June 30, 2026						December 31, 2025
					Specifically						Specifically
	Carrying		Contractual		Allocated		Carrying		Contractual		Allocated
(000’s omitted)	Balance		Balance		Allowance		Balance		Balance		Allowance
Loans with allowance allocation:
CRE – non-owner occupied	$	1,607	$	1,607	$	782	$	0	$	0	$	0
Commercial & industrial and other business loans		4,258		4,269		3,264		3,669		4,000		1,403
Total	$	5,865	$	5,876	$	4,046	$	3,669	$	4,000	$	1,403

Loans without allowance allocation:
CRE – owner occupied	$	3,968	$	4,366	$	0	$	6,369	$	6,735	$	0
Commercial & industrial and other business loans		5,412		8,640		0		7,686		10,345		0
Total	$	9,380	$	13,006	$	0	$	14,055	$	17,080	$	0

The average carrying balance of individually assessed loans was $16.2 million and $17.1 million for the three months ended June 30, 2026 and 2025, respectively. The average carrying balance of individually assessed loans was $18.2 million and $39.5 million for the six months ended June 30, 2026 and 2025, respectively. An immaterial amount of interest income was recognized on individually assessed loans for the three and six months ended June 30, 2026 and 2025.

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of modification, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification, such as principal forgiveness, may be granted. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. The estimate of the allowance for credit losses includes historical losses from loans that were modified due to borrower financial difficulty, therefore a charge to the allowance for credit losses is generally not recorded upon modification.

The following table presents the amortized cost basis of loans at June 30, 2026 and 2025 that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2026 and 2025, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below.


	Amortized Cost
				Combination -
				Other Payment	Total Class of
	Term			Delay and Term	Financing
	Extension			Extension	Receivable
Three Months Ended June 30, 2026
CRE - non-owner occupied	$	0	$	5,432	0.29	%
Consumer mortgage		267		0	0.01	%
Total	$	267	$	5,432	0.05	%

Three Months Ended June 30, 2025
Commercial & industrial and other business loans	$	5,716	$	0	0.46	%
Total	$	5,716	$	0	0.05	%

‌


	Amortized Cost
				Combination -
				Other Payment	Total Class of
	Term			Delay and Term	Financing
	Extension			Extension	Receivable
Six months ended June 30, 2026
CRE - non-owner occupied	$	0	$	5,432	0.29	%
Consumer mortgage		267		0	0.01	%
Total	$	267	$	5,432	0.05	%

Six months ended June 30, 2025
Commercial & industrial and other business loans	$	5,716	$	0	0.46	%
Consumer mortgage		449		0	0.01	%
Total	$	6,165	$	0	0.06	%

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months.


	June 30, 2026
					90+ Days Past
			Past Due 30 –		Due and Still
(000's omitted)	Current		89 Days		Accruing		Non-Accrual		Total
CRE - non-owner occupied	$	5,432	$	0	$	0	$	0	$	5,432
Consumer mortgage		51		0		0		335		386
Total	$	5,483	$	0	$	0	$	335	$	5,818

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026.


		Weighted-Average Term Extension
		(Years)
Three months ended June 30, 2026
CRE - non-owner occupied		2.0
Consumer mortgage		8.0
Total		2.3

Six months ended June 30, 2026
CRE - non-owner occupied		2.0
Consumer mortgage		8.0
Total		2.3

There were no loans modified to borrowers with financial difficulty that had a payment default subsequent to modification during the three and six months ended June 30, 2026 and 2025.

Allowance for Credit Losses

The following presents by segment the activity in the allowance for credit losses during the three and six months ended June 30, 2026 and 2025:


	Three Months Ended June 30, 2026
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	49,952	$	(1,101)	$	213	$	1,891	$	50,955
Consumer mortgage		12,583		(45)		0		80		12,618
Consumer indirect		20,690		(3,190)		2,076		1,008		20,584
Consumer direct⁽¹⁾		4,456		(1,896)		678		1,701		4,939
Home equity		1,512		(32)		0		120		1,600
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		90,193		(6,264)		2,967		4,800		91,696
Liability for off-balance sheet credit exposures		1,453		0		0		(193)		1,260
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	91,646	$	(6,264)	$	2,967	$	4,607	$	92,956

(1)	Includes overdraft charge-offs and recoveries.


	Three Months Ended June 30, 2025
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	42,988	$	(4,897)	$	350	$	2,713	$	41,154
Consumer mortgage		13,679		(18)		5		530		14,196
Consumer indirect		19,746		(2,620)		2,414		345		19,885
Consumer direct		4,033		(657)		324		433		4,133
Home equity		1,394		(16)		1		104		1,483
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		82,840		(8,208)		3,094		4,125		81,851
Liability for off-balance sheet credit exposures		867		0		0		(8)		859
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	83,707	$	(8,208)	$	3,094	$	4,117	$	82,710


	Six Months Ended June 30, 2026
							Acquisition
	Beginning		Charge-				Allowance				Ending
(000’s omitted)	balance		offs		Recoveries		Adjustment		Provision		balance
Business lending	$	46,155	$	(1,456)	$	379	$	4	$	5,873	$	50,955
Consumer mortgage		14,005		(94)		2		3		(1,298)		12,618
Consumer indirect		20,914		(6,647)		4,307		0		2,010		20,584
Consumer direct⁽¹⁾		4,257		(4,131)		1,412		0		3,401		4,939
Home equity		1,590		(41)		0		(21)		72		1,600
Unallocated		1,000		0		0		0		0		1,000
Allowance for credit losses – loans		87,921		(12,369)		6,100		(14)		10,058		91,696
Liability for off-balance sheet credit exposures		1,075		0		0		0		185		1,260
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	88,996	$	(12,369)	$	6,100	$	(14)	$	10,243	$	92,956

(1)	Includes overdraft charge-offs and recoveries.


	Six Months Ended June 30, 2025
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	37,201	$	(5,620)	$	449	$	9,124	$	41,154
Consumer mortgage		15,017		(23)		11		(809)		14,196
Consumer indirect		20,895		(6,585)		4,108		1,467		19,885
Consumer direct		3,453		(1,217)		556		1,341		4,133
Home equity		1,548		(23)		1		(43)		1,483
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		79,114		(13,468)		5,125		11,080		81,851
Liability for off-balance sheet credit exposures		1,132		0		0		(273)		859
Total allowance for credit losses and liability for off-balance sheet credit exposures	$	80,246	$	(13,468)	$	5,125	$	10,807	$	82,710

The allowance for credit losses increased to $91.7 million at June 30, 2026 compared to $87.9 million at December 31, 2025 and $81.9 million at June 30, 2025, reflective of an increase in loans outstanding and partially offset by improvements in credit quality metrics.

Accrued interest receivable on loans, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $38.3 million at June 30, 2026 and is excluded from the estimate of credit losses and amortized cost basis of loans.

The Company utilizes the historical loss rate on its loan portfolio as the initial basis for the estimate of credit losses using the cumulative loss, vintage loss and line loss methods, which are derived from the Company’s historical loss experience. To address changes and trends in current period credit metrics, qualitative adjustments to historical loss experience are made for differences in current loan-specific risk characteristics and to address current period delinquencies, charge-off rates, risk ratings, lack of loan level data through an entire economic cycle, changes in loan sizes and underwriting standards as well as the addition of acquired loans which were not underwritten by the Company. The Company considered historical losses immediately prior, through and following the Great Recession compared to the historical period used for modeling to adjust the historical information to account for longer-term expectations for loan credit performance. Under CECL, the Company is required to consider future economic conditions to determine current expected credit losses. Management selected an eight-quarter reasonable and supportable forecast period with a four-quarter reversion to the historical mean to use as part of the economic forecast and utilizes a two-quarter lag adjustment for economic factors that are not dependent on collateral values, and no lag for factors that utilize collateral values. Management determined that these qualitative adjustments were needed to adjust historical information for expected losses and to reflect changes as a result of current conditions.

For qualitative macroeconomic adjustments, the Company uses third-party forecasted economic data scenarios utilizing a base scenario and two alternative scenarios that are weighted, with forecasts available as of June 30, 2026. The results of these forecasts are applied to the quantitative loss history to calculate the qualitative economic adjustment component of the allowance for credit losses. The scenarios utilized forecast stable unemployment levels and modest growth in GDP, real household income, and housing prices, offset by slowing growth in auto and commercial real estate prices.

Management developed expected loss estimates considering factors for segments as outlined below:

●

Business lending – non real estate: The Company selected projected unemployment and GDP as indicators of forecasted losses related to business lending and utilizes both factors with equal weight for the calculation. The Company also considered delinquencies, risk rating changes, recent charge-off history and acquired loans as part of the review of estimated losses.

●

Business lending – real estate: The Company selected projected unemployment and commercial real estate values as indicators of forecasted losses related to commercial real estate loans and utilizes both factors with equal weight for the calculation. For office properties, the Company selected projected office-specific commercial real estate values and vacancy rates and utilizes both factors with equal weight for the calculation. The Company also considered the factors noted in business lending – non real estate.

●

Consumer mortgages and home equity: The Company selected projected unemployment and residential real estate values as indicators of forecasted losses related to mortgage lending and utilizes both factors with equal weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered.

●

Consumer indirect: The Company selected projected unemployment and vehicle valuation indices as indicators of forecasted losses related to indirect lending and utilizes both factors with equal weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered.

●

Consumer direct: The Company selected projected unemployment and inflation-adjusted household income as indicators of forecasted losses related to consumer direct lending and utilizes both factors with equal weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered.

At June 30, 2026 and December 31, 2025, loans with a carrying amount of approximately $7.06 billion and $6.83 billion, respectively, were pledged for the availability to secure certain borrowings with the FHLB and FRB. There were $598.0 million and $450.0 million of borrowings outstanding under these arrangements at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026 and December 31, 2025, the carrying amount of residential real estate property in the process of foreclosure was $12.6 million and $9.4 million, respectively.

During the six months ended June 30, 2026 the Company purchased $0.3 million of consumer mortgage loans and sold $34.4 million of secondary market eligible residential consumer mortgage loans. During the six months ended June 30, 2025, the Company did not purchase any loans and sold $34.1 million of secondary market eligible residential consumer mortgage loans.