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LOANS AND CREDIT QUALITY
 9 Months Ended
Sep. 30, 2026
Receivables [Abstract]  
LOANS AND CREDIT QUALITY
3. LOANS AND CREDIT QUALITY
The following table presents loans by class, excluding loans held for sale, net of deferred fees and costs as of the dates presented:

(Dollars in thousands)September 30, 2026December 31, 2025
Commercial and industrial$578,574 $594,592 
Construction217,144 213,191 
Residential mortgage1,802,348 1,839,191 
Home equity568,114 600,082 
Commercial mortgage1,713,014 1,594,433 
Consumer433,876 447,607 
Loans, net of deferred fees and costs$5,313,070 $5,289,096 

Interest income on loans is accrued at the contractual rate of interest based on the unpaid principal balance. The Company has elected to not measure an estimate of credit losses on accrued interest receivable, as any uncollectible accrued interest receivable is written off in a timely manner. Accrued interest receivable on loans is reported together with accrued interest receivable on investment securities and other assets in the consolidated balance sheets. As of September 30, 2026 and December 31, 2025, accrued interest receivable on loans totaled $18.0 million and $18.3 million, respectively.

The Company did not transfer any loans to the held for sale category during the three and nine months ended September 30, 2026 and 2025 and did not sell any loans originally held for investment during the three and nine months ended September 30, 2026 and 2025.
Purchased Loans

The following table presents loan purchase activity by class at the time of purchase for the periods presented. None of the purchased loans were classified as purchased credit deteriorated ("PCD"), and there were no loans categorized as PCD during the periods presented.

Purchases of U.S. Mainland Consumer - Dealer:Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in thousands)2026202520262025
Outstanding balance$29,688 $33,297 $68,343 $97,524 
Premium1,462 832 2,126 2,068 
Purchase price$31,150 $34,129 $70,469 $99,592 
Collateral-Dependent Loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. These loans are individually evaluated to determine expected credit losses. The following tables present the amortized cost basis of collateral-dependent loans by class and the related ACL allocated to these loans as of the dates presented:

September 30, 2026December 31, 2025
(Dollars in thousands)Secured by 1-4 Family Residential PropertiesAllocated ACLSecured by 1-4 Family Residential PropertiesAllocated ACL
Residential mortgage$9,620 $— $10,572 $— 
Home equity2,673 — 2,608 — 
Total$12,293 $— $13,180 $— 

Other Real Estate Owned and Foreclosure Proceedings

As of September 30, 2026, other real estate owned totaled $1.0 million and consisted of a residential real estate property acquired through foreclosure during the second quarter of 2026. The property was transferred from loans to other real estate owned at a carrying value of $924 thousand. During the three months ended September 30, 2026, the carrying value of the property increased by approximately $49 thousand due to capitalized improvements made to the property. As of December 31, 2025, the Company did not own any foreclosed properties. The Company did not acquire any additional foreclosed properties or sell a foreclosed property during the three months ended September 30, 2026 and the three and nine months ended September 30, 2025.

The Company had $8.6 million and $10.3 million of residential mortgage and home equity loans collateralized by residential real estate properties that were in the process of foreclosure as of September 30, 2026 and December 31, 2025, respectively. The Company did not have any commercial real estate loans in the process of foreclosure as of September 30, 2026 and December 31, 2025.
Nonaccrual and Past Due Loans

For all loan types, the delinquency status is determined based on the number of days full payments required by the contractual terms of the loan are past due. The following tables present by class, the aging of the recorded investment in past due loans as of the dates presented. The following tables also present the amortized cost of loans on nonaccrual status for which there was no related ACL as of the dates presented:

Accruing Loans 30 - 59 Days Past DueAccruing Loans 60 - 89 Days Past DueAccruing Loans 90 Days or More Past DueNonaccrual LoansTotal Past Due and NonaccrualCurrent LoansTotal LoansNonaccrual Loans With No ACL
(Dollars in thousands)
September 30, 2026
Commercial and industrial$968 $453 $— $138 $1,559 $577,015 $578,574 $— 
Construction— — — — — 217,144 217,144 — 
Residential mortgage— 2,484 — 9,620 12,104 1,790,244 1,802,348 9,620 
Home equity2,080 1,723 — 2,673 6,476 561,638 568,114 2,673 
Commercial mortgage32,691 — — — 32,691 1,680,323 1,713,014 — 
Consumer3,699 749 521 606 5,575 428,301 433,876 — 
Total$39,438 $5,409 $521 $13,037 $58,405 $5,254,665 $5,313,070 $12,293 

Accruing Loans 30 - 59 Days Past DueAccruing Loans 60 - 89 Days Past DueAccruing Loans 90 Days or More Past DueNonaccrual LoansTotal Past Due and NonaccrualCurrent LoansTotal LoansNonaccrual Loans With No ACL
(Dollars in thousands)
December 31, 2025
Commercial and industrial$461 $218 $— $591 $1,270 $593,322 $594,592 $— 
Construction— — — — — 213,191 213,191 — 
Residential mortgage6,399 2,030 664 10,572 19,665 1,819,526 1,839,191 10,572 
Home equity1,029 809 485 2,608 4,931 595,151 600,082 2,608 
Commercial mortgage— — — — — 1,594,433 1,594,433 — 
Consumer3,357 1,312 403 615 5,687 441,920 447,607 — 
Total$11,246 $4,369 $1,552 $14,386 $31,553 $5,257,543 $5,289,096 $13,180 
Loan Modifications for Borrowers Experiencing Financial Difficulty

In the third quarter of 2026, the Company executed one loan modification for a borrower experiencing financial difficulty. The modification consisted of a term extension on a commercial real estate loan with an amortized cost basis of $0.6 million at the time of modification. The modified loan represented 0.03% of commercial real estate loans as of September 30, 2026. The financial effect of the modification for the term extension was not material.
In the first quarter of 2026, the Company executed one loan modification for a borrower experiencing financial difficulty. The modification consisted of a term extension on a commercial and industrial loan with an amortized cost basis of $1.0 million at the time of modification. The modified loan represented 0.16% of commercial and industrial loans as of September 30, 2026. The financial effect of the modification for the term extension was not material.

The Company did not execute any material loan modifications for borrowers experiencing financial difficulty, either individually or in the aggregate, during the nine months ended September 30, 2025.

The Company did not grant any concessions involving principal forgiveness or interest rate reductions during the three and nine months ended September 30, 2026 and 2025.

As of September 30, 2026, the modified loans remained current and were performing in accordance with the modified terms. No payment defaults were recorded during the period ended September 30, 2026 related to loans modified for borrowers experiencing financial difficulty within the preceding twelve months.

When the Company determines that a modified loan, or a portion thereof, is uncollectible, the loan is charged off. The amortized cost basis of the loan is reduced by the amount charged off, with a corresponding reduction to the allowance for credit losses.
Credit Quality Indicators

The Company categorizes loans into risk ratings based on the evaluation of the borrower's ability to meet debt obligations such as: current financial information, historical payment experience, credit documentation, publicly available information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans by credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed regularly on an ongoing basis. For more information about the Company's credit quality indicators, refer to Note 3 - Loans and Credit Quality included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

The following tables present the amortized cost basis, net of deferred fees and costs, of the Company's loans by class, credit quality indicator and origination year as of the dates presented. Revolving loans converted to term as of and during the periods presented were not material to total loans. In addition, the following tables present gross charge-offs of loans by origination year during the periods presented.
Amortized Cost of Term Loans by Year of OriginationAmortized Cost of Revolving Loans
(Dollars in thousands)20262025202420232022PriorTotal
September 30, 2026
Commercial and industrial:
Risk Rating
Pass$51,041 $41,575 $153,174 $27,593 $49,705 $135,437 $112,854 $571,379 
Special Mention— 436 990 — — — 298 1,724 
Substandard1,692 238 1,247 1,594 — 700 — 5,471 
Subtotal52,733 42,249 155,411 29,187 49,705 136,137 113,152 578,574 
Construction:
Risk Rating
Pass3,763 122,768 30,607 — 7,575 31,736 — 196,449 
Substandard— — — — — 20,695 — 20,695 
Subtotal3,763 122,768 30,607 — 7,575 52,431 — 217,144 
Residential mortgage:
Risk Rating
Pass96,858 87,097 51,832 70,817 224,102 1,262,022 — 1,792,728 
Substandard— — — 234 1,317 8,069 — 9,620 
Subtotal96,858 87,097 51,832 71,051 225,419 1,270,091 — 1,802,348 
Home equity:
Risk Rating
Pass106 333 1,209 8,977 23,149 46,901 484,766 565,441 
Substandard— — — 1,189 — — 1,484 2,673 
Subtotal106 333 1,209 10,166 23,149 46,901 486,250 568,114 
Commercial mortgage:
Risk Rating
Pass259,294 189,417 95,518 86,739 206,029 820,774 — 1,657,771 
Special Mention— — 1,967 — — 2,030 — 3,997 
Substandard— — 35,343 2,167 6,427 7,309 — 51,246 
Subtotal259,294 189,417 132,828 88,906 212,456 830,113 — 1,713,014 
Consumer:
Risk Rating
Pass42,426 114,963 71,950 34,489 63,585 64,313 41,024 432,750 
Substandard20 205 98 87 97 619 — 1,126 
Subtotal42,446 115,168 72,048 34,576 63,682 64,932 41,024 433,876 
Total$455,200 $557,032 $443,935 $233,886 $581,986 $2,400,605 $640,426 $5,313,070 
Gross Charge-Offs by Year of Origination
(Dollars in thousands)20262025202420232022PriorTotal
Nine Months Ended September 30, 2026
Commercial and industrial$— $362 $833 $383 $197 $1,519 $3,294 
Real estate:
Residential mortgage— — — 9 14 — 23 
Consumer15 772 954 521 3,076 1,912 7,250 
Gross charge-offs$15 $1,134 $1,787 $913 $3,287 $3,431 $10,567 
Amortized Cost of Term Loans by Year of OriginationAmortized Cost of Revolving Loans
(Dollars in thousands)20252024202320222021PriorTotal
December 31, 2025
Commercial and industrial:
Risk Rating
Pass$63,780 $166,412 $34,598 $56,913 $47,935 $115,991 $103,393 $589,022 
Special Mention— 660 1,869 — — — — 2,529 
Substandard— 1,056 805 — 103 480 597 3,041 
Subtotal63,780 168,128 37,272 56,913 48,038 116,471 103,990 594,592 
Construction:
Risk Rating
Pass57,887 24,133 24,091 48,970 17,741 40,369 — 213,191 
Subtotal57,887 24,133 24,091 48,970 17,741 40,369 — 213,191 
Residential mortgage:
Risk Rating
Pass95,400 72,780 79,382 237,379 556,527 786,487 — 1,827,955 
Substandard— — 246 2,263 405 8,322 — 11,236 
Subtotal95,400 72,780 79,628 239,642 556,932 794,809 — 1,839,191 
Home equity:
Risk Rating
Pass416 988 10,944 25,112 15,989 31,915 511,625 596,989 
Substandard— — 1,185 — — 1,423 485 3,093 
Subtotal416 988 12,129 25,112 15,989 33,338 512,110 600,082 
Commercial mortgage:
Risk Rating
Pass204,072 146,975 92,107 204,149 210,061 681,060 5,771 1,544,195 
Special Mention— — 593 — — 471 — 1,064 
Substandard— 32,987 2,200 5,978 2,194 5,815 — 49,174 
Subtotal204,072 179,962 94,900 210,127 212,255 687,346 5,771 1,594,433 
Consumer:
Risk Rating
Pass81,799 85,641 54,227 97,994 71,458 17,527 37,944 446,590 
Substandard95 101 81 109 148 483 — 1,017 
Subtotal81,894 85,742 54,308 98,103 71,606 18,010 37,944 447,607 
Total$503,449 $531,733 $302,328 $678,867 $922,561 $1,690,343 $659,815 $5,289,096 
Gross Charge-Offs by Year of Origination
(Dollars in thousands)20252024202320222021PriorTotal
Nine Months Ended September 30, 2025
Commercial and industrial$74 $2,152 $207 $876 $231 $969 $4,509 
Consumer105 874 538 4,733 1,630 785 8,665 
Gross charge-offs$179 $3,026 $745 $5,609 $1,861 $1,754 $13,174