v3.26.3
Note 7 - Loans and the Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2026
Notes to Financial Statements  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 7. Loans and the Allowance for Credit Losses

 

Loans Receivable – The following table sets forth the composition of the Company’s loan portfolio segments, including net deferred loan fees, as of  September 30, 2026 and  December 31, 2025:

 

 

 

September 30, 2026

 

 

December 31, 2025

 

 

 

(dollars in thousands)

 

Commercial

 

$1,656,916

 

 

$1,565,963

 

Commercial real estate

 

 

7,981,622

 

 

 

8,054,696

 

Commercial construction

 

 

585,707

 

 

 

623,902

 

Residential real estate

 

 

1,207,092

 

 

 

1,210,980

 

Consumer

 

 

4,306

 

 

 

2,017

 

Gross loans

 

 

11,435,643

 

 

 

11,457,558

 

Net deferred loan fees

 

 

(3,110)

 

 

(4,278)

Total loans receivable

 

$11,432,533

 

 

$11,453,280

 

 

As of  September 30, 2026 and  December 31, 2025, loans totaling approximately $9.3 billion and $8.2 billion, respectively, were pledged to secure borrowings from the FHLB of New York and the Federal Reserve Bank of New York.

 

Loans held-for-sale – The following table sets forth the composition of the Company's loans held-for-sale portfolio as of  September 30, 2026 and  December 31, 2025.

 

 

 

September 30, 2026

 

 

December 31, 2025

 

 

 

(dollars in thousands)

 

Commercial real estate

 

$678,880

 

 

$-

 

Residential

 

 

-

 

 

 

391

 

Total loans held-for-sale

 

$678,880

 

 

$391

 

 

Loans Receivable on Nonaccrual Status - The following tables present the carrying value of nonaccrual loans with an ACL and the carrying value of nonaccrual loans without an ACL as of  September 30, 2026 and  December 31, 2025:

 

 

 

September 30, 2026

 

 

 

Nonaccrual loans with ACL

 

 

Nonaccrual loans without ACL

 

 

Total nonaccrual loans

 

 

 

(dollars in thousands)

 

Commercial

 

$1,205

 

 

$10,007

 

 

$11,212

 

Commercial real estate

 

 

39,236

 

 

 

10,754

 

 

 

49,990

 

Residential real estate

 

 

474

 

 

 

2,654

 

 

 

3,128

 

Total

 

$40,915

 

 

$23,415

 

 

$64,330

 

 

 

 

 

December 31, 2025

 

 

 

Nonaccrual loans with ACL

 

 

Nonaccrual loans without ACL

 

 

Total nonaccrual loans

 

 

 

(dollars in thousands)

 

Commercial

 

$1,987

 

 

$11,052

 

 

$13,039

 

Commercial real estate

 

 

207

 

 

 

28,354

 

 

 

28,561

 

Residential real estate

 

 

549

 

 

 

3,766

 

 

 

4,315

 

Total

 

$2,743

 

 

$43,172

 

 

$45,915

 

 

Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated and loans that are individually evaluated.

 

Purchased Credit-Deteriorated Loans ("PCD") - PCD loans are defined as a loan or group of loans that have experienced more-than-insignificant credit deterioration since origination. The following table presents the recorded investment of those loans as of  September 30, 2026 and  December 31, 2025:

 

(dollars in thousands)

 

September 30, 2026

 

 

December 31, 2025

 

Commercial

 

$4,670

 

 

$5,398

 

Commercial real estate

 

 

64,447

 

 

 

213,770

 

Residential real estate

 

 

1,883

 

 

 

1,962

 

Total purchased credit-deteriorated loans

 

$71,000

 

 

$221,130

 

 

As of September 30, 2026, the loans in the above table included $28.1 million of loans secured by multifamily properties located in the five boroughs of New York City that are entirely or predominantly rent-stabilized. Rent-stabilized multifamily properties are subject to particular stressors, including the 2019 New York rent laws, which restricted rent increases in an environment of rising operating expenses. In addition, in June 2026, the New York City Rent Guidelines Board approved 0% rent adjustments for both one-year and two-year leases on rent-stabilized apartments commencing between October 1, 2026 and September 30, 2027.

 

Credit Quality Indicators - The Company continuously monitors the credit quality of its loans receivable. In addition to its internal monitoring, the Company utilizes the services of a third-party loan review firm to periodically validate the credit quality of its loans receivable on a sample basis. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified as “Pass” are deemed to possess average to superior credit quality, requiring no more than normal attention. Assets classified as “Special Mention” have potential weaknesses that deserve management’s close attention, such as strained liquidity, slow pay, stale financial statements or other conditions. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or of the Company’s credit position at some future date. Assets are classified as “Substandard” if they are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Substandard assets have a well-defined weakness or weaknesses that jeopardize repayment of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Assets are classified as “Doubtful” if they have all the weaknesses inherent in assets 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.

    

 

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 purposes of the table below. The following table presents loans by origination, risk designation and gross charge-offs as of and during the nine months ended  September 30, 2026 (dollars in thousands):

 

 

 

Term loans amortized cost basis by origination year

 

 

 

 

 

 

 

 

 

2026

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

Prior

 

 

Revolving Loans

 

 

Total Gross Loans

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$160,874

 

 

$147,529

 

 

$171,861

 

 

$91,058

 

 

$206,615

 

 

$290,007

 

 

$548,845

 

 

$1,616,789

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,007

 

 

 

738

 

 

 

245

 

 

 

43

 

 

 

4,033

 

Substandard

 

 

5,915

 

 

 

-

 

 

 

246

 

 

 

681

 

 

 

3,049

 

 

 

12,262

 

 

 

13,941

 

 

 

36,094

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total commercial

 

$166,789

 

 

$147,529

 

 

$172,107

 

 

$94,746

 

 

$210,402

 

 

$302,514

 

 

$562,829

 

 

$1,656,916

 

YTD gross charge-offs

 

$-

 

 

$146

 

 

$39

 

 

$-

 

 

$12

 

 

$3,340

 

 

$756

 

 

$4,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$1,177,062

 

 

$1,072,231

 

 

$335,532

 

 

$238,681

 

 

$1,264,055

 

 

$2,287,008

 

 

$1,429,162

 

 

$7,803,731

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

28,444

 

 

 

36,200

 

 

 

17,642

 

 

 

82,286

 

Substandard

 

 

-

 

 

 

-

 

 

 

6,079

 

 

 

-

 

 

 

7,936

 

 

 

60,387

 

 

 

21,203

 

 

 

95,605

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total commercial real estate

 

$1,177,062

 

 

$1,072,231

 

 

$341,611

 

 

$238,681

 

 

$1,300,435

 

 

$2,383,595

 

 

$1,468,007

 

 

$7,981,622

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$5

 

 

$765

 

 

$16,382

 

 

$32,598

 

 

$-

 

 

$49,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$67,742

 

 

$145,346

 

 

$128,841

 

 

$18,948

 

 

$8,091

 

 

$19,877

 

 

$196,862

 

 

$585,707

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total commercial construction

 

$67,742

 

 

$145,346

 

 

$128,841

 

 

$18,948

 

 

$8,091

 

 

$19,877

 

 

$196,862

 

 

$585,707

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$91,336

 

 

$24,813

 

 

$14,635

 

 

$27,725

 

 

$192,277

 

 

$490,210

 

 

$358,338

 

 

$1,199,334

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,294

 

 

 

3,294

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

547

 

 

 

-

 

 

 

2,847

 

 

 

1,070

 

 

 

4,464

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total residential real estate

 

$91,336

 

 

$24,813

 

 

$14,635

 

 

$28,272

 

 

$192,277

 

 

$493,057

 

 

$362,702

 

 

$1,207,092

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$1

 

 

$1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$4,126

 

 

$8

 

 

$6

 

 

$1

 

 

$-

 

 

$56

 

 

$109

 

 

$4,306

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total consumer

 

$4,126

 

 

$8

 

 

$6

 

 

$1

 

 

$-

 

 

$56

 

 

$109

 

 

$4,306

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$1,501,140

 

 

$1,389,927

 

 

$650,875

 

 

$376,413

 

 

$1,671,038

 

 

$3,087,158

 

 

$2,533,316

 

 

$11,209,867

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,007

 

 

 

29,182

 

 

 

36,445

 

 

 

20,979

 

 

 

89,613

 

Substandard

 

 

5,915

 

 

 

-

 

 

 

6,325

 

 

 

1,228

 

 

 

10,985

 

 

 

75,496

 

 

 

36,214

 

 

 

136,163

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Grand total

 

$1,507,055

 

 

$1,389,927

 

 

$657,200

 

 

$380,648

 

 

$1,711,205

 

 

$3,199,099

 

 

$2,590,509

 

 

$11,435,643

 

YTD gross charge-offs

 

$-

 

 

$146

 

 

$44

 

 

$765

 

 

$16,394

 

 

$35,938

 

 

$757

 

 

$54,044

 

 

 

The following table presents loans by origination, risk designation and gross charge-offs as of and for the year ended  December 31, 2025 (dollars in thousands):

 

 

 

Term loans amortized cost basis by origination year

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Revolving Loans

 

 

Total Gross Loans

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$165,942

 

 

$194,070

 

 

$137,181

 

 

$217,504

 

 

$177,715

 

 

$145,173

 

 

$479,906

 

 

$1,517,491

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

694

 

 

 

-

 

 

 

2,927

 

 

 

44

 

 

 

3,665

 

Substandard

 

 

146

 

 

 

539

 

 

 

3,048

 

 

 

3,120

 

 

 

2,599

 

 

 

10,625

 

 

 

24,730

 

 

 

44,807

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total commercial

 

$166,088

 

 

$194,609

 

 

$140,229

 

 

$221,318

 

 

$180,314

 

 

$158,725

 

 

$504,680

 

 

$1,565,963

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$32

 

 

$1,669

 

 

$-

 

 

$854

 

 

$1,961

 

 

$4,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$1,129,223

 

 

$416,806

 

 

$303,121

 

 

$1,487,034

 

 

$1,391,743

 

 

$1,648,135

 

 

$1,451,710

 

 

$7,827,772

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

39,271

 

 

 

3,741

 

 

 

71,452

 

 

 

6,998

 

 

 

121,462

 

Substandard

 

 

-

 

 

 

4,024

 

 

 

-

 

 

 

22,193

 

 

 

9,066

 

 

 

54,778

 

 

 

15,401

 

 

 

105,462

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total commercial real estate

 

$1,129,223

 

 

$420,830

 

 

$303,121

 

 

$1,548,498

 

 

$1,404,550

 

 

$1,774,365

 

 

$1,474,109

 

 

$8,054,696

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$13,839

 

 

$-

 

 

$13,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$108,660

 

 

$120,104

 

 

$36,316

 

 

$17,912

 

 

$63,727

 

 

$44,193

 

 

$232,990

 

 

$623,902

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total commercial construction

 

$108,660

 

 

$120,104

 

 

$36,316

 

 

$17,912

 

 

$63,727

 

 

$44,193

 

 

$232,990

 

 

$623,902

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$36,615

 

 

$26,638

 

 

$33,577

 

 

$201,351

 

 

$114,215

 

 

$416,017

 

 

$373,244

 

 

$1,201,657

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,343

 

 

 

3,343

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

798

 

 

 

2,516

 

 

 

2,666

 

 

 

5,980

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total residential real estate

 

$36,615

 

 

$26,638

 

 

$33,577

 

 

$201,351

 

 

$115,013

 

 

$418,533

 

 

$379,253

 

 

$1,210,980

 

YTD gross charge-offs

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$1,000

 

 

$1,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$1,863

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$63

 

 

$91

 

 

$2,017

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Substandard

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Total consumer

 

$1,863

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$63

 

 

$91

 

 

$2,017

 

YTD gross charge-offs

 

$25

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$-

 

 

$1

 

 

$26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$1,442,303

 

 

$757,618

 

 

$510,195

 

 

$1,923,801

 

 

$1,747,400

 

 

$2,253,581

 

 

$2,537,941

 

 

$11,172,839

 

Special mention

 

 

-

 

 

 

-

 

 

 

-

 

 

 

39,965

 

 

 

3,741

 

 

 

74,379

 

 

 

10,385

 

 

 

128,470

 

Substandard

 

 

146

 

 

 

4,563

 

 

 

3,048

 

 

 

25,313

 

 

 

12,463

 

 

 

67,919

 

 

 

42,797

 

 

 

156,249

 

Doubtful

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Grand total

 

$1,442,449

 

 

$762,181

 

 

$513,243

 

 

$1,989,079

 

 

$1,763,604

 

 

$2,395,879

 

 

$2,591,123

 

 

$11,457,558

 

YTD gross charge-offs

 

$25

 

 

$-

 

 

$32

 

 

$1,669

 

 

$-

 

 

$14,693

 

 

$2,962

 

 

$19,381

 

  

 

Collateral Dependent Loans: The following tables present the amortized cost basis of collateral dependent loans by loan segment as of  September 30, 2026 and  December 31, 2025:

 

 

 

September 30, 2026

 

 

 

Real Estate

 

 

Other

 

 

Total

 

 

 

(dollars in thousands)

 

Commercial

 

$5,033

 

 

$8,463

 

 

$13,496

 

Commercial real estate

 

 

113,845

 

 

 

-

 

 

 

113,845

 

Residential real estate

 

 

4,438

 

 

 

-

 

 

 

4,438

 

Total

 

$123,316

 

 

$8,463

 

 

$131,779

 

 

 

 

December 31, 2025

 

 

 

Real Estate

 

 

Other

 

 

Total

 

 

 

(dollars in thousands)

 

Commercial

 

$6,948

 

 

$8,783

 

 

$15,731

 

Commercial real estate

 

 

242,125

 

 

 

-

 

 

 

242,125

 

Residential real estate

 

 

5,637

 

 

 

-

 

 

 

5,637

 

Total

 

$254,710

 

 

$8,783

 

 

$263,493

 

 

 

Aging Analysis - The following tables present the aging of the amortized cost in past due loans as of  September 30, 2026 and  December 31, 2025:

 

 

 

September 30, 2026

 

 

 

30-59 Days Past Due

 

 

60-89 Days Past Due

 

 

90 Days or Greater Past Due and Still Accruing

 

 

Nonaccrual

 

 

Total Past Due and Nonaccrual

 

 

Current

 

 

Gross Loans

 

 

 

(dollars in thousands)

 

Commercial

 

$1,580

 

 

$640

 

 

$391

 

 

$11,212

 

 

$13,823

 

 

$1,643,093

 

 

$1,656,916

 

Commercial real estate

 

 

-

 

 

 

3,061

 

 

 

-

 

 

 

49,990

 

 

 

53,051

 

 

 

7,928,571

 

 

 

7,981,622

 

Commercial construction

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

585,707

 

 

 

585,707

 

Residential real estate

 

 

976

 

 

 

-

 

 

 

769

 

 

 

3,128

 

 

 

4,873

 

 

 

1,202,219

 

 

 

1,207,092

 

Consumer

 

 

7

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7

 

 

 

4,299

 

 

 

4,306

 

Total

 

$2,563

 

 

$3,701

 

 

$1,160

 

 

$64,330

 

 

$71,754

 

 

$11,363,889

 

 

$11,435,643

 

 

 

 

December 31, 2025

 

 

 

30-59 Days Past Due

 

 

60-89 Days Past Due

 

 

90 Days or Greater Past Due and Still Accruing

 

 

Nonaccrual

 

 

Total Past Due and Nonaccrual

 

 

Current

 

 

Gross Loans

 

 

 

(dollars in thousands)

 

Commercial

 

$875

 

 

$539

 

 

$427

 

 

$13,039

 

 

$14,880

 

 

$1,551,083

 

 

$1,565,963

 

Commercial real estate

 

 

13,602

 

 

 

6,098

 

 

 

16,276

 

 

 

28,561

 

 

 

64,537

 

 

 

7,990,159

 

 

 

8,054,696

 

Commercial construction

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

623,902

 

 

 

623,902

 

Residential real estate

 

 

7,405

 

 

 

1,372

 

 

 

769

 

 

 

4,315

 

 

 

13,861

 

 

 

1,197,119

 

 

 

1,210,980

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,017

 

 

 

2,017

 

Total

 

$21,882

 

 

$8,009

 

 

$17,472

 

 

$45,915

 

 

$93,278

 

 

$11,364,280

 

 

$11,457,558

 

 

 

The following tables detail the amount of gross loans that are individually analyzed, collectively evaluated, and loans acquired with deteriorated quality, and the related portion of the ACL for loans that are allocated to each loan portfolio segment.

 

 

 

September 30, 2026

 

 

 

Commercial

 

 

Commercial real estate

 

 

Commercial construction

 

 

Residential real estate

 

 

Consumer

 

 

Total

 

 

 

(dollars in thousands)

 

Allowance for credit losses – loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually analyzed

 

$314

 

 

$5,450

 

 

$-

 

 

$-

 

 

$-

 

 

$5,764

 

Collectively evaluated

 

 

15,337

 

 

 

71,207

 

 

 

4,299

 

 

 

12,195

 

 

 

16

 

 

 

103,054

 

Acquired with deteriorated credit quality

 

 

839

 

 

 

10,849

 

 

 

-

 

 

 

114

 

 

 

-

 

 

 

11,802

 

Total

 

$16,490

 

 

$87,506

 

 

$4,299

 

 

$12,309

 

 

$16

 

 

$120,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually analyzed

 

$10,321

 

 

$49,398

 

 

$-

 

 

$2,555

 

 

$-

 

 

$62,274

 

Collectively evaluated

 

 

1,641,925

 

 

 

7,867,777

 

 

 

585,707

 

 

 

1,202,654

 

 

 

4,306

 

 

 

11,302,369

 

Acquired with deteriorated credit quality

 

 

4,670

 

 

 

64,447

 

 

 

-

 

 

 

1,883

 

 

 

-

 

 

 

71,000

 

Total

 

$1,656,916

 

 

$7,981,622

 

 

$585,707

 

 

$1,207,092

 

 

$4,306

 

 

$11,435,643

 

 

 

 

December 31, 2025

 

 

 

Commercial

 

 

Commercial real estate

 

 

Commercial construction

 

 

Residential real estate

 

 

Consumer

 

 

Total

 

 

 

(dollars in thousands)

 

Allowance for credit losses – loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually analyzed

 

$314

 

 

$125

 

 

$-

 

 

$-

 

 

$-

 

 

$439

 

Collectively evaluated

 

 

15,392

 

 

 

79,046

 

 

 

5,303

 

 

 

12,084

 

 

 

18

 

 

 

111,843

 

Acquired with deteriorated credit quality

 

 

(348

)

 

 

42,256

 

 

 

-

 

 

 

115

 

 

 

-

 

 

 

42,023

 

Total

 

$15,358

 

 

$121,427

 

 

$5,303

 

 

$12,199

 

 

$18

 

 

$154,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually analyzed

 

$12,184

 

 

$28,354

 

 

$-

 

 

$3,675

 

 

$-

 

 

$44,213

 

Collectively evaluated

 

 

1,548,381

 

 

 

7,812,572

 

 

 

623,902

 

 

 

1,205,343

 

 

 

2,017

 

 

 

11,192,215

 

Acquired with deteriorated credit quality

 

 

5,398

 

 

 

213,770

 

 

 

-

 

 

 

1,962

 

 

 

-

 

 

 

221,130

 

Total

 

$1,565,963

 

 

$8,054,696

 

 

$623,902

 

 

$1,210,980

 

 

$2,017

 

 

$11,457,558

 

 

 

Activity in the Company’s ACL for loans for the three and nine months ended September 30, 2026 and  September 30, 2025 is summarized in the tables below.

 

 

 

Three Months Ended September 30, 2026

 

 

 

Commercial

 

 

Commercial real estate

 

 

Commercial construction

 

 

Residential real estate

 

 

Consumer

 

 

Total

 

 

 

(dollars in thousands)

 

Balance as of June 30, 2026

 

$13,902

 

 

$110,218

 

 

$4,169

 

 

$11,840

 

 

$20

 

 

$140,149

 

Charge-offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-PCD Loans

 

 

(1,511)

 

 

(1,667)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,178)

PCD Loans

 

 

(12

)

 

 

(22,206

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(22,218)

Recoveries

 

 

783

 

 

 

90

 

 

 

-

 

 

 

68

 

 

 

-

 

 

 

941

 

Provision for (reversal of) credit losses – loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (reversal of) provision for credit losses

 

 

3,338

 

 

 

1,070

 

 

 

130

 

 

 

401

 

 

 

(4

)

 

 

4,935

 

Provision for (reversal of) PCD allowance

 

 

(10

)

 

 

1

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9

)

Balance as of September 30, 2026

 

$16,490

 

 

$87,506

 

 

$4,299

 

 

$12,309

 

 

$16

 

 

$120,620

 

        

 

 

Three Months Ended September 30, 2025

 

 

 

Commercial

 

 

Commercial real estate

 

 

Commercial construction

 

 

Residential real estate

 

 

Consumer

 

 

Total

 

 

 

(dollars in thousands)

 

Balance as of June 30, 2025

 

$20,961

 

 

$115,203

 

 

$5,422

 

 

$14,575

 

 

$29

 

 

$156,190

 

Charge-offs

 

 

(473)

 

 

(4,700)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5,173)

Recoveries

 

 

22

 

 

 

-

 

 

 

-

 

 

 

15

 

 

 

-

 

 

 

37

 

Provision for (reversal of) credit losses – loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Initial provision related to acquisition

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Operating provision for (reversal of) credit losses

 

 

(368

)

 

 

5,892

 

 

 

492

 

 

 

(573)

 

 

2

 

 

 

5,445

 

Nonaccretable credit marks on PCD loans

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Balance as of September 30, 2025

 

$20,142

 

 

$116,395

 

 

$5,914

 

 

$14,017

 

 

$31

 

 

$156,499

 

 

 

 

 

Nine Months Ended September 30, 2026

 

 

 

Commercial

 

 

Commercial real estate

 

 

Commercial construction

 

 

Residential real estate

 

 

Consumer

 

 

Total

 

 

 

(dollars in thousands)

 

Balance as of December 31, 2025

 

$15,358

 

 

$121,427

 

 

$5,303

 

 

$12,199

 

 

$18

 

 

$154,305

 

Charge-offs:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-PCD Loans

 

 

(4,281)

 

 

(18,676)

 

 

-

 

 

 

(1)

 

 

-

 

 

 

(22,958)

PCD Loans

 

 

(12

)

 

 

(31,074)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(31,086)

Recoveries

 

 

1,718

 

 

 

125

 

 

 

-

 

 

 

96

 

 

 

-

 

 

 

1,939

 

Provision for (reversal of) credit losses – loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (reversal of) provision for credit losses

 

 

3,717

 

 

 

14,829

 

 

 

(1,004)

 

 

15

 

 

 

(2

)

 

 

17,555

 

Provision for (reversal of) PCD allowance

 

 

(10

)

 

 

875

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

865

 

Balance as of September 30, 2026

 

$16,490

 

 

$87,506

 

 

$4,299

 

 

$12,309

 

 

$16

 

 

$120,620

 

 

 

 

Nine Months Ended September 30, 2025

 

 

 

Commercial

 

 

Commercial real estate

 

 

Commercial construction

 

 

Residential real estate

 

 

Consumer

 

 

Total

 

 

 

(dollars in thousands)

 

Balance as of December 31, 2024

 

$18,278

 

 

$54,777

 

 

$5,064

 

 

$4,561

 

 

$5

 

 

$82,685

 

Charge-offs

 

 

(3,484)

 

 

(10,282)

 

 

-

 

 

 

-

 

 

 

(1)

 

 

(13,767)

Recoveries

 

 

200

 

 

 

90

 

 

 

-

 

 

 

20

 

 

 

-

 

 

 

310

 

Provision for (reversal of) credit losses – loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Initial provision related to acquisition – loans

 

 

985

 

 

 

16,017

 

 

 

78

 

 

 

10,217

 

 

 

10

 

 

 

27,307

 

Operating provision for (reversal of) credit losses

 

 

3,198

 

 

 

13,537

 

 

 

772

 

 

 

(896)

 

 

17

 

 

 

16,628

 

Nonaccretable credit marks on PCD loans

 

 

965

 

 

 

42,256

 

 

 

-

 

 

 

115

 

 

 

-

 

 

 

43,336

 

Balance as of September 30, 2025

 

$20,142

 

 

$116,395

 

 

$5,914

 

 

$14,017

 

 

$31

 

 

$156,499

 

 

 

Loan Modifications to Borrowers Experiencing Financial Difficulty:

 

The following tables present the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2026. The modification percentage represents the total loans modified during the three and nine months ended  September 30, 2026 as a percentage of the total gross loan balances as of  September 30, 2026.

 

 

​

​

Three Months Ended

​

​

​

​

​

​

​

​

​

​

​

Amortized Cost Basis

​

​

​

​

​

​

​

​

​

​

​

Term Extension

​

​

Payment Deferral

​

​

Total

​

​

Gross Loans at September 30, 2026

​

​

Modification % (Modified Loans/Gross Loans)

​

​

​

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial

​

$

8,311

​

​

$

-

​

​

$

8,311

​

​

$

1,656,916

​

​

​

0.50

%

Commercial real estate

​

​

1,776

​

​

​

-

​

​

​

1,776

​

​

​

7,981,622

​

​

​

0.02

​

Commercial construction

​

​

-

​

​

​

-

​

​

​

-

​

​

​

585,707

​

​

​

-

​

Residential real estate

​

​

-

​

​

​

-

​

​

​

-

​

​

​

1,207,092

​

​

​

-

​

Consumer

​

​

-

​

​

​

-

​

​

​

-

​

​

​

4,306

​

​

​

-

​

Total

​

$

10,087

​

​

$

-

​

​

$

10,087

​

​

$

11,435,643

​

​

​

0.09

%

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost Basis

 

 

 

 

 

 

 

 

 

 

 

Term Extension

 

 

Payment Deferral

 

 

Interest Rate Reduction

 

 

Total

 

 

Gross Loans at September 30, 2026

 

 

Modification % (Modified Loans/Gross Loans)

 

 

 

(dollars in thousands)

 

 

 

 

 

September 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$9,811

 

 

$-

 

 

$594

 

 

$10,405

 

 

$1,656,916

 

 

 

0.63%

Commercial real estate

 

 

30,220

 

 

 

-

 

 

 

-

 

 

 

30,220

 

 

 

7,981,622

 

 

 

0.38

 

Commercial construction

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

585,707

 

 

 

-

 

Residential real estate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,207,092

 

 

 

-

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,306

 

 

 

-

 

Total

 

$40,031

 

 

$-

 

 

$594

 

 

$40,625

 

 

$11,435,643

 

 

 

0.36%

 

 

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2026.

 

 

 

Three Months Ended

 

 

 

Weighted Average Term Extension (Months)

 

 

Weighted Average Payment Deferral (Months)

 

 

 

 

 

​

 

 

 

​

September 30, 2026

 

 

 

​

 

 

 

​

Commercial

 

 

66

 

 

 

-

 

Commercial real estate

 

 

60

 

 

 

-

 

 

 

 

Nine Months Ended

 

 

 

Weighted Average Term Extension (Months)

 

 

Weighted Average Payment Deferral (Months)

 

 

Weighted Average Interest Rate Reduction

 

September 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

54

 

 

 

-

 

 

 

2.0%

Commercial real estate

 

 

23

 

 

 

-

 

 

 

-

 

 

 

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 twelve months through  September 30, 2026.

 

 

 

Current

 

 

30-89 Days Past Due

 

 

90 Days or Greater Past Due

 

September 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$17,326

 

 

$-

 

 

$-

 

Commercial real estate

 

 

30,220

 

 

 

-

 

 

 

2,371

 

Total

 

$47,546

 

 

$-

 

 

$2,371

 

 

The following tables present the amortized cost basis of loans to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2025. The modification percentage represents the total loans modified during the three and nine months ended  September 30, 2025 as a percentage of the total gross loan balances as of  September 30, 2025.

 

 

​

​

Three Months Ended

​

​

​

​

​

​

​

​

​

​

​

Amortized Cost Basis

​

​

​

​

​

​

​

​

​

​

​

Term Extension

​

​

Payment Deferral

​

​

Total

​

​

Gross Loans at September 30, 2025

​

​

Modification % (Modified Loans/Gross Loans)

​

​

​

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial

​

$

-

​

​

$

18,811

​

​

$

18,811

​

​

$

1,622,975

​

​

​

1.16

%

Commercial real estate

​

​

-

​

​

​

-

​

​

​

-

​

​

​

7,721,070

​

​

​

-

​

Commercial construction

​

​

-

​

​

​

-

​

​

​

-

​

​

​

728,615

​

​

​

-

​

Residential real estate

​

​

-

​

​

​

-

​

​

​

-

​

​

​

1,233,305

​

​

​

-

​

Consumer

​

​

-

​

​

​

-

​

​

​

-

​

​

​

2,166

​

​

​

-

​

Total

​

$

-

​

​

$

18,811

​

​

$

18,811

​

​

$

11,308,131

​

​

​

0.17

%

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost Basis

 

 

 

 

 

 

 

 

 

 

 

Term Extension

 

 

Payment Deferral

 

 

Interest Rate Reduction

 

 

Total

 

 

Gross Loans at September 30, 2025

 

 

Modification % (Modified Loans/Gross Loans)

 

 

 

(dollars in thousands)

 

 

 

 

 

September 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$6,500

 

 

$18,811

 

 

$-

 

 

$25,311

 

 

$1,622,975

 

 

 

1.56%

Commercial real estate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,721,070

 

 

 

-

 

Commercial construction

 

 

8,419

 

 

 

-

 

 

 

-

 

 

 

8,419

 

 

 

728,615

 

 

 

1.16

 

Residential real estate

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,233,305

 

 

 

-

 

Consumer

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,166

 

 

 

-

 

Total

 

$14,919

 

 

$18,811

 

 

$-

 

 

$33,730

 

 

$11,308,131

 

 

 

0.30%

 

 

The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025.

 

​

​

Three Months Ended

​

​

​

Weighted Average Term Extension (Months)

​

​

Weighted Average Payment Deferral (Months)

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

​

​

​

​

​

​

​

Commercial

​

​

-

​

​

​

3

​

 

 

 

Nine Months Ended

 

 

 

Weighted Average Term Extension (Months)

 

 

Weighted Average Payment Deferral (Months)

 

 

Weighted Average Interest Rate Reduction

 

September 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

3

 

 

 

3

 

 

 

0.0%

Commercial construction

 

 

6

 

 

 

-

 

 

 

-

 

 

During the three and nine months ended September 30, 2026 and 2025, the Company had no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company modified the terms of the loans in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension during the current period.

 

There was one loan to a borrower experiencing financial difficulty that had a payment default, in the form of a partial charge-off, during the three and nine months ended September 30, 2026, and which was modified in the twelve months prior to that default. The loan was a $2.4 million multifamily loan modified in November 2025 through a term extension. As of September 30, 2026, the ACL included a $320 thousand specific reserve against this loan. There was one loan to a borrower experiencing financial difficulty that had a payment default during the three and nine months ended September 30, 2025 and which was modified in the twelve months prior to that default. The one loan was a $323 thousand commercial loan modified in October 2024 that went into forbearance, reducing the monthly payment amount by $6 thousand. At this time, the ACL includes a full reserve against this loan. Default is determined at 90 or more days past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the ACL or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the ACL is adjusted accordingly.

 

 

Allowance for Credit Losses for Unfunded Commitments

 

The Company has recorded an ACL for unfunded credit commitments which was recorded in other liabilities. The provision is recorded within the provision for credit losses on the Company’s income statement. The following tables present a roll forward of the ACL for unfunded commitments for the three and nine months ended September 30, 2026 and 2025:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2026

 

 

2025

 

 

 

(dollars in thousands)

 

Balance at beginning of period

 

$3,114

 

 

$3,337

 

Provision for credit losses – unfunded commitments

 

 

74

 

 

 

55

 

Balance at end of period

 

$3,188

 

 

$3,392

 

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2026

 

 

2025

 

 

 

(dollars in thousands)

 

Balance at beginning of period

 

$3,108

 

 

$2,627

 

Provision for credit losses – unfunded commitments

 

 

80

 

 

 

765

 

Balance at end of period

 

$3,188

 

 

$3,392

 

 

Components of Provision for Credit Losses

 

The following tables summarize the provision for (reversal of) credit losses for the three and nine months ended September 30, 2026 and 2025:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2026

 

 

2025

 

 

 

(dollars in thousands)

 

Operating provision for credit losses

 

$4,935

 

 

$5,445

 

Provision for credit losses on PCD loans

 

 

(9

)

 

 

-

 

Provision for credit losses - unfunded commitments

 

 

74

 

 

 

55

 

Provision for credit losses

 

$5,000

 

 

$5,500

 

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2026

 

 

2025

 

 

 

(dollars in thousands)

 

Operating provision for credit losses

 

$17,555

 

 

$16,628

 

Initial provision related to acquisition - loans

 

 

-

 

 

 

27,307

 

Provision for credit losses on PCD loans

 

 

865

 

 

 

-

 

Provision for credit losses - unfunded commitments

 

 

80

 

 

 

765

 

Provision for credit losses

 

$18,500

 

 

$44,700