LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)

9 Months Ended

Sep. 30, 2023

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Summary of balances of loans

	September 30,		December 31,
	2023		2022
	(in thousands)
Residential real estate:
One- to four-family	$	1,513,326	$	1,432,263
Second mortgages and equity lines of credit		174,814		166,219
Residential real estate construction		20,272		35,837
Total residential real estate loans		1,708,412		1,634,319
Commercial:
Commercial real estate		2,349,886		2,250,344
Commercial construction		191,224		199,311
Commercial and industrial		450,547		424,275
Total commercial loans		2,991,657		2,873,930
Consumer loans:
Auto		15,797		33,625
Personal		8,450		7,796
Total consumer loans		24,247		41,421
Total loans before basis adjustment		4,724,316		4,549,670
Basis adjustment associated with fair value hedge (1)		(1,462)		—
Total loans		4,722,854		4,549,670
Allowance for credit losses on loans		(48,312)		(45,236)
Loans, net	$	4,674,542	$	4,504,434
(1) Represents the basis adjustment associated with the application of hedge accounting on certain loans. Refer to Note 10 - Derivatives.

Schedule of activity in allowance for loan losses and allocation of allowance to loan segments

			Second Mortgages		Residential
	One- to Four-		and Equity		Real Estate		Commercial		Commercial		Commercial
	Family		Lines of Credit		Construction		Real Estate		Construction		and Industrial		Consumer		Total
	(in thousands)
Balance at June 30, 2023	$	12,185	$	1,012	$	630	$	20,599	$	5,373	$	7,750	$	272	$	47,821
Charge-offs		—		—		—		—		—		(16)		(21)		(37)
Recoveries		—		40		—		2		—		—		13		55
Provision		488		(28)		(164)		900		(937)		242		(28)		473
Balance at September 30, 2023	$	12,673	$	1,024	$	466	$	21,501	$	4,436	$	7,976	$	236	$	48,312

			Second Mortgages		Residential
	One- to Four-		and Equity		Real Estate		Commercial		Commercial		Commercial
	Family		Lines of Credit		Construction		Real Estate		Construction		and Industrial		Consumer		Total
	(in thousands)
Balance at December 31, 2022	$	11,532	$	924	$	280	$	20,357	$	4,645	$	7,236	$	262	$	45,236
Charge-offs		—		—		—		(2,918)		—		(51)		(70)		(3,039)
Recoveries		2		83		—		4		—		275		34		398
Provision		1,139		17		186		4,058		(209)		516		10		5,717
Balance at September 30, 2023	$	12,673	$	1,024	$	466	$	21,501	$	4,436	$	7,976	$	236	$	48,312

			Second Mortgages		Residential
	One- to Four-		and Equity		Real Estate		Commercial		Commercial		Commercial
	Family		Lines of Credit		Construction		Real Estate		Construction		and Industrial		Consumer		Total
	(in thousands)
Balance at June 30, 2022	$	10,082	$	849	$	327	$	20,431	$	4,370	$	7,174	$	327	$	43,560
Charge-offs		—		—		—		(24)		—		(205)		(24)		(253)
Recoveries		2		15		—		7		—		1,021		7		1,052
Provision		834		(16)		(33)		741		99		(1,300)		(63)		262
Balance at September 30, 2022	$	10,918	$	848	$	294	$	21,155	$	4,469	$	6,690	$	247	$	44,621

			Second Mortgages		Residential
	One- to Four-		and Equity		Real Estate		Commercial		Commercial		Commercial
	Family		Lines of Credit		Construction		Real Estate		Construction		and Industrial		Consumer		Unallocated		Total
	(in thousands)
Balance at December 31, 2021	$	3,631	$	420	$	69	$	33,242	$	2,010	$	4,638	$	367	$	1,000	$	45,377
Adoption of Topic 326		5,198		391		185		(10,194)		1,698		2,288		123		(1,000)		(1,311)
Charge-offs		—		—		—		(2,810)		—		(246)		(55)		—		(3,111)
Recoveries		2		108		—		13		—		1,495		67		—		1,685
Provision		2,087		(71)		40		904		761		(1,485)		(255)		—		1,981
Balance at September 30, 2022	$	10,918	$	848	$	294	$	21,155	$	4,469	$	6,690	$	247	$	—	$	44,621

Schedule of carrying value of collateral dependent individually

	September 30, 2023				December 31, 2022
			Related				Related
	Carrying Value		Allowance		Carrying Value		Allowance
	(in thousands)
Commercial:
Commercial real estate	$	8,811	$	5	$	2,039	$	—
Commercial and industrial		1,982		191		3,329		7
Commercial construction		—		—		—		—
Total Commercial		10,793		196		5,368		7
Residential real estate		7,741		1		10,494		1
Total	$	18,534	$	197	$	15,862	$	8

Summary of past due and non-accrual loans

					90 Days
	30-59 Days		60-89 Days		or More		Total		Loans on
	Past Due		Past Due		Past Due		Past Due		Non-accrual
	(in thousands)
September 30, 2023
Residential real estate:
One- to four-family	$	2,078	$	1,168	$	3,018	$	6,264	$	7,498
Second mortgages and equity lines of credit		171		137		305		613		453
Commercial real estate		—		—		7,004		7,004		8,811
Commercial construction		—		—		—		—		—
Commercial and industrial		274		97		1,437		1,808		1,980
Consumer:
Auto		132		16		30		178		31
Personal		36		17		5		58		10
Total	$	2,691	$	1,435	$	11,799	$	15,925	$	18,783
December 31, 2022
Residential real estate:
One- to four-family	$	3,711	$	524	$	6,526	$	10,761	$	8,927
Second mortgages and equity lines of credit		407		5		189		601		421
Commercial real estate		—		—		120		120		2,039
Commercial construction		—		—		—		—		—
Commercial and industrial		26		492		2,901		3,419		3,329
Consumer:
Auto		348		101		51		500		64
Personal		18		—		6		24		6
Total	$	4,510	$	1,122	$	9,793	$	15,425	$	14,786

Schedule of loans by risk rating

															Revolving
													Revolving		Loans
													Loans		Converted
	Term Loans at Amortized Cost by Origination Year												Amortized		to Term
	2023		2022		2021		2020		2019		Prior		Cost		Loans		Total
	(in thousands)
As of September 30, 2023
Commercial real estate
Pass	$	124,574	$	817,946	$	454,639	$	237,296	$	246,011	$	415,685	$	—	$	—	$	2,296,151
Special mention		—		17,026		—		4,309		9,063		14,526		—		—		44,924
Substandard		—		—		—		—		—		1,812		—		—		1,812
Doubtful		—		—		—		—		—		6,999		—		—		6,999
Total commercial real estate		124,574		834,972		454,639		241,605		255,074		439,022		—		—		2,349,886
YTD gross charge-offs		—		—		—		—		—		2,918		—		—		2,918
Commercial and industrial
Pass		53,242		51,548		96,455		75,178		23,999		78,676		68,852		—		447,950
Special mention		—		—		5		—		2		610		—		—		617
Substandard		19		88		72		—		—		385		50		—		614
Doubtful		—		—		9		—		—		1,307		50		—		1,366
Total commercial and industrial		53,261		51,636		96,541		75,178		24,001		80,978		68,952		—		450,547
YTD gross charge-offs		5		18		14		5		8		1		—		—		51
Commercial construction
Pass		16,726		115,057		58,048		—		—		—		1,393		—		191,224
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction		16,726		115,057		58,048		—		—		—		1,393		—		191,224
YTD gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate
Accrual		122,166		436,709		486,044		203,962		40,500		245,104		164,522		1,454		1,700,461
Non-accrual		—		—		—		132		188		7,430		201		—		7,951
Total residential real estate		122,166		436,709		486,044		204,094		40,688		252,534		164,723		1,454		1,708,412
YTD gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer
Accrual		7,274		6,049		2,536		1,219		4,451		1,662		1,015		—		24,206
Non-accrual		—		2		—		1		22		10		6		—		41
Total Consumer		7,274		6,051		2,536		1,220		4,473		1,672		1,021		—		24,247
YTD gross charge-offs		—		10		4		14		14		28		—		—		70
Total loans before basis adjustment	$	324,001	$	1,444,425	$	1,097,808	$	522,097	$	324,236	$	774,206	$	236,089	$	1,454	$	4,724,316
Total YTD gross charge-offs	$	5	$	28	$	18	$	19	$	22	$	2,947	$	—	$	—	$	3,039

															Revolving
													Revolving		Loans
													Loans		Converted
	Term Loans at Amortized Cost by Origination Year												Amortized		to Term
	2022		2021		2020		2019		2018		Prior		Cost		Loans		Total
	(in thousands)
As of December 31, 2022
Commercial real estate
Pass	$	817,320	$	441,277	$	241,700	$	254,221	$	121,351	$	340,634	$	—	$	—	$	2,216,503
Special mention		—		—		—		9,328		22,474		—		—		—		31,802
Substandard		—		—		—		—		—		2,039		—		—		2,039
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial real estate		817,320		441,277		241,700		263,549		143,825		342,673		—		—		2,250,344
Commercial and industrial
Pass		53,078		95,600		82,170		26,568		37,358		50,500		76,647		—		421,921
Special mention		—		—		—		—		49		92		492		—		633
Substandard		—		4		3		—		1		323		—		—		331
Doubtful		—		—		—		—		—		1,340		50		—		1,390
Total commercial and industrial		53,078		95,604		82,173		26,568		37,408		52,255		77,189		—		424,275
Commercial construction
Pass		88,173		87,569		11,769		9,174		318		1,487		821		—		199,311
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction		88,173		87,569		11,769		9,174		318		1,487		821		—		199,311
Residential real estate
Accrual		443,034		507,679		211,429		42,314		25,232		239,677		154,038		1,568		1,624,971
Non-accrual		—		203		140		201		1,258		7,411		96		39		9,348
Total residential real estate		443,034		507,882		211,569		42,515		26,490		247,088		154,134		1,607		1,634,319
Consumer
Accrual		9,948		3,588		1,971		16,955		6,122		1,733		1,034		—		41,351
Non-accrual		1		—		—		28		20		17		4		—		70
Total Consumer		9,949		3,588		1,971		16,983		6,142		1,750		1,038		—		41,421
Total loans	$	1,411,554	$	1,135,920	$	549,182	$	358,789	$	214,183	$	645,253	$	233,182	$	1,607	$	4,549,670