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Loans, Allowance for Credit Losses and Credit Quality

6 Months Ended

Jun. 30, 2024

Loans, Allowance for Credit Losses and Credit Quality

LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

Loans Held for Investment and Allowance for Credit Losses

The following table summarizes the change in allowance for credit losses by loan category, and bifurcates the amount of loans allocated to each loan category for the period indicated:


	Three Months Ended June 30, 2024
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	20,489	$	77,929	$	7,573	$	4,028	$	24,180	$	12,042	$	707	$	146,948


Charge-offs	—		—		—		(60)		—		(11)		(737)		(808)
Recoveries	2		—		—		12		—		148		307		469
Provision for (release of) credit losses	393		2,572		231		79		656		(424)		743		4,250
Ending balance (1)	$	20,884	$	80,501	$	7,804	$	4,059	$	24,836	$	11,755	$	1,020	$	150,859

	Three Months Ended June 30, 2023
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	36,932	$	76,198	$	9,248	$	3,338	$	20,454	$	12,428	$	533	$	159,131
Charge-offs	(23,190)		—		—		(59)		—		—		(518)		(23,767)
Recoveries	16		—		—		8		—		10		249		283
Provision for (release of) credit losses	1,384		2,198		(210)		319		1,011		(5)		303		5,000
Ending balance (1)	$	15,142	$	78,396	$	9,038	$	3,606	$	21,465	$	12,433	$	567	$	140,647

	Six Months Ended June 30, 2024
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	19,243	$	74,148	$	7,683	$	3,963	$	23,637	$	12,797	$	751	$	142,222
Charge-offs	—		—		—		(169)		—		(11)		(1,509)		(1,689)
Recoveries	87		—		—		51		—		281		657		1,076
Provision for (release of) credit losses	1,554		6,353		121		214		1,199		(1,312)		1,121		9,250
Ending balance (1)	$	20,884	$	80,501	$	7,804	$	4,059	$	24,836	$	11,755	$	1,020	$	150,859

	Six Months Ended June 30, 2023
	(Dollars in thousands)
	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Residential Real Estate		Home Equity		Other Consumer		Total
Allowance for credit losses
Beginning balance	$	27,559	$	77,799	$	10,762	$	2,834	$	20,973	$	11,504	$	988	$	152,419


Charge-offs	(23,471)		—		—		(87)		—		—		(1,024)		(24,582)
Recoveries	21		—		—		39		—		26		474		560
Provision for (release of) credit losses	11,033		597		(1,724)		820		492		903		129		12,250
Ending balance (1)	$	15,142	$	78,396	$	9,038	$	3,606	$	21,465	$	12,433	$	567	$	140,647

(1)Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $59.2 million and $54.0 million as of June 30, 2024 and June 30, 2023, respectively.

The balance of allowance for credit losses increased to $150.9 million as of June 30, 2024 compared to $142.2 million at December 31, 2023, driven primarily by specific reserve allocation on certain commercial loans as well as net loan growth during the three and six months ended June 30, 2024.

For the purpose of estimating the allowance for credit losses, management segregated the loan portfolio into the portfolio segments detailed in the above tables. Each of these loan categories possesses unique risk characteristics that are considered when determining the appropriate level of allowance for each segment. Some of the characteristics unique to each loan category include:

Commercial Portfolio

•Commercial and Industrial: Consists of revolving, nonrevolving, and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of accounts receivable, inventory, plant and equipment, real estate, or other business assets. The primary source of repayment is operating cash flow and, secondarily, liquidation of assets.

•Commercial Real Estate: Consists of mortgage loans to finance investment in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational and healthcare facilities, as well as other specific use properties and is inclusive of owner-occupied commercial properties. Loans are typically written with amortizing payment structures. Collateral values are determined based upon third party appraisals and evaluations. Permissible loan to value ratios at origination are governed by Company policy and regulatory guidelines. The primary source of repayment is cash flow from operating leases and rents and, secondarily, liquidation of assets.

•Commercial Construction: Consists of short-term construction loans, revolving and nonrevolving credit lines and construction/permanent loans to finance the acquisition, development and construction or rehabilitation of real property. Project types include residential land development, one-to-four family, condominium, and multi-family home construction, commercial/retail, office, industrial, hotels, educational and healthcare facilities as well as other specific use properties. Loans may be written with non-amortizing or hybrid payment structures depending upon the type of project. Collateral values are determined based upon third party appraisals and evaluations. Permissible loan to value ratios at origination are governed by Company policy and regulatory guidelines. Repayment sources vary depending upon the type of project and may consist of proceeds from the sale or lease of units, operating cash flows or liquidation of other assets.

•Small Business: Consists of revolving, term loan and mortgage obligations extended to sole proprietors and small businesses for purposes of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, or real estate if applicable. The primary source of repayment is operating cash flows and, secondarily, liquidation of assets.

For the commercial portfolio the Company typically obtains personal guarantees for payment from individuals holding material ownership interests in the borrowing entities.

Consumer Portfolio

•Residential Real Estate: Residential mortgage loans held in the Company’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral. Collateral consists of mortgage liens on one-to-four family residential properties. Residential mortgage loans also include loans to construct owner-occupied one-to-four family residential properties.

•Home Equity: Home equity loans and credit lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on one-to-four family homes, condominiums or vacation homes. Each home equity loan has a fixed rate and is billed in equal payments comprised of principal and interest. The majority of home equity lines of credit have a variable rate and are billed in interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the then outstanding principal balance plus all accrued interest over a predetermined repayment period, as set forth in the note. Additionally, the Company has the option of renewing each line of credit for additional draw periods. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established policy guidelines.

•Other Consumer: Other consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as debt consolidation, personal expenses or overdraft protection. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines. These loans may be secured or unsecured.

Credit Quality

The Company continually monitors the asset quality of the loan portfolio using all available information. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as adversely risk-rated, delinquent, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to modify the contractual terms of certain loans to match the borrower’s ability to repay the loan based on their current financial condition.

The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For the commercial portfolio, the Company utilizes a 10-point credit risk-rating system, which assigns a risk-grade to each loan obligation based on a number of quantitative and qualitative factors associated with a commercial or small business loan transaction. Factors considered include industry and market conditions, position within the industry, earnings trends, operating cash flow, asset/liability values, debt capacity, guarantor strength, management and controls, financial reporting, collateral, and other considerations. The risk-rating categories for the commercial portfolio are defined as follows:

•Pass: Risk-rating “1” through “6” comprises loans ranging from ‘Substantially Risk Free’ which indicates borrowers are of unquestioned credit standing and the pinnacle of credit quality, well established companies with a very strong financial condition, and loans fully secured by cash collateral, through ‘Acceptable Risk,’ which indicates borrowers may exhibit declining earnings, strained cash flow, increasing or above average leverage and/or weakening market fundamentals that indicate below average asset quality, margins and market share. Collateral coverage is protective.

•Special Mention: Borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Company’s asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.

•Substandard: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Loans may be inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. However, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.

•Doubtful: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.

•Loss: Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.

The Company utilizes a comprehensive, continuous strategy for evaluating and monitoring commercial credit quality. Initially, credit quality is determined at loan origination and is re-evaluated when subsequent actions, such as renewals, modifications or reviews, occur. Actively managed commercial borrowers are required to provide updated financial information at least annually which is carefully evaluated for any changes in credit quality. Larger loan relationships are subject to a full annual credit review by experienced credit professionals, while continuous portfolio monitoring techniques are employed to evaluate changes in credit quality for smaller loan relationships. Any changes in credit quality are reflected in risk-rating changes. Additionally, the Company retains an independent loan review firm to evaluate the credit quality of the commercial loan portfolio. The independent loan review process achieves significant penetration into the commercial loan portfolio and reports the results of these reviews to the Audit Committee of the Board of Directors on a quarterly basis.

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. As a result, for this portfolio the Company utilizes a pass/default risk-rating system, based on an age analysis (i.e., days past due) associated with each consumer loan. Under this structure, consumer loans less than 90 days past due are assigned a “pass” rating, while any consumer loans 90 days or more past due are assigned a “default” rating.

The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of the dates indicated below:


	June 30, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass	$	223,337	$	209,490	$	138,897	$	65,456	$	48,408	$	138,382	$	688,496	$	—	$	1,512,466
Special mention	10,745		2,230		1,055		367		—		115		46,629		—		61,141
Substandard	2,100		162		—		485		—		37		26,361		—		29,145
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	236,182	$	211,882	$	139,952	$	66,308	$	48,408	$	138,534	$	761,486	$	—	$	1,602,752
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Commercial real estate
Pass	$	483,165	$	1,102,879	$	1,169,539	$	1,277,585	$	1,168,111	$	2,427,116	$	97,051	$	672	$	7,726,118
Special mention	7,552		6,587		29,574		53,526		43,884		140,827		352		—		282,302
Substandard	20,392		67,983		25,714		13,296		4,577		3,792		—		—		135,754
Doubtful	—		—		—		—		—		7,631		—		—		7,631
Loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	511,109	$	1,177,449	$	1,224,827	$	1,344,407	$	1,216,572	$	2,579,366	$	97,403	$	672	$	8,151,805
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Commercial construction
Pass	$	116,191	$	162,237	$	310,484	$	96,884	$	5,476	$	24,984	$	21,426	$	1,522	$	739,204
Special mention	2,090		—		—		5,911		—		—		—		—		8,001
Substandard	10,588		—		9,193		19,757		—		—		—		—		39,538
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	128,869	$	162,237	$	319,677	$	122,552	$	5,476	$	24,984	$	21,426	$	1,522	$	786,743
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Small business
Pass	$	30,468	$	47,442	$	47,136	$	35,359	$	22,867	$	31,641	$	50,424	$	—	$	265,337
Special mention	48		122		21		99		150		242		727		—		1,409
Substandard	393		389		67		84		452		475		664		—		2,524
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total small business	$	30,909	$	47,953	$	47,224	$	35,542	$	23,469	$	32,358	$	51,815	$	—	$	269,270
Current-period gross write-offs	$	—	$	—	$	28	$	—	$	—	$	—	$	141	$	—	$	169



Residential real estate
Pass	$	86,414	$	492,023	$	627,025	$	393,627	$	180,537	$	656,400	$	—	$	—	$	2,436,026
Default	—		—		—		—		728		2,892		—		—		3,620

Total residential real estate	$	86,414	$	492,023	$	627,025	$	393,627	$	181,265	$	659,292	$	—	$	—	$	2,439,646
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



Home equity
Pass	$	10,406	$	26,383	$	35,059	$	52,280	$	47,471	$	138,993	$	795,978	$	7,523	$	1,114,093
Default	—		—		83		—		—		194		2,202		235		2,714

Total home equity	$	10,406	$	26,383	$	35,142	$	52,280	$	47,471	$	139,187	$	798,180	$	7,758	$	1,116,807


Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	11	$	—	$	11



Other consumer (2)
Pass	$	344	$	583	$	213	$	916	$	464	$	1,617	$	29,781	$	—	$	33,918
Default	—		—		—		—		—		—		1		—		1

Total other consumer	$	344	$	583	$	213	$	916	$	464	$	1,617	$	29,782	$	—	$	33,919
Current-period gross write-offs	$	1,499	$	—	$	—	$	—	$	—	$	—	$	10	$	—	$	1,509

Total	$	1,004,233	$	2,118,510	$	2,394,060	$	2,015,632	$	1,523,125	$	3,575,338	$	1,760,092	$	9,952	$	14,400,942
Total current-period gross write-offs	$	1,499	$	—	$	28	$	—	$	—	$	—	$	162	$	—	$	1,689


	June 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving converted to Term		Total (1)
	(Dollars in thousands)
Commercial and industrial
Pass	$	255,397	$	206,214	$	117,268	$	98,942	$	49,317	$	120,734	$	819,928	$	—	$	1,667,800
Special mention	136		1,331		660		805		653		666		27,334		—		31,585
Substandard	170		6,797		1,282		148		1,086		387		13,964		—		23,834
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial	$	255,703	$	214,342	$	119,210	$	99,895	$	51,056	$	121,787	$	861,226	$	—	$	1,723,219
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	34	$	23,437	$	—	$	23,471

Commercial real estate
Pass	$	508,627	$	1,189,436	$	1,384,305	$	1,318,126	$	662,064	$	2,264,182	$	66,612	$	857	$	7,394,209
Special mention	62,601		22,115		72,507		15,215		3,268		131,636		—		—		307,342
Substandard	542		24,678		13,688		20,421		13,911		23,786		—		—		97,026
Doubtful	—		14,219		—		—		—		—		—		—		14,219
Loss	—		—		—		—		—		—		—		—		—
Total commercial real estate	$	571,770	$	1,250,448	$	1,470,500	$	1,353,762	$	679,243	$	2,419,604	$	66,612	$	857	$	7,812,796
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial construction
Pass	$	112,698	$	489,700	$	247,726	$	48,793	$	48,062	$	4,749	$	25,148	$	—	$	976,876
Special mention	16,910		5,023		—		3,866		—		—		—		—		25,799
Substandard	8,659		11,462		—		—		—		—		—		—		20,121
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total commercial construction	$	138,267	$	506,185	$	247,726	$	52,659	$	48,062	$	4,749	$	25,148	$	—	$	1,022,796
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Small business
Pass	$	26,279	$	53,998	$	41,861	$	28,187	$	14,902	$	24,741	$	43,853	$	—	$	233,821
Special mention	—		—		—		157		—		216		305		—		678
Substandard	370		135		137		335		—		551		1,065		—		2,593
Doubtful	—		—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—		—
Total small business	$	26,649	$	54,133	$	41,998	$	28,679	$	14,902	$	25,508	$	45,223	$	—	$	237,092
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	87	$	—	$	87


Residential real estate
Pass	$	246,831	$	652,380	$	411,534	$	188,281	$	91,726	$	627,591	$	—	$	—	$	2,218,343
Default	—		—		—		594		—		2,347		—		—		2,941

Total residential real estate	$	246,831	$	652,380	$	411,534	$	188,875	$	91,726	$	629,938	$	—	$	—	$	2,221,284
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Home equity
Pass	$	14,533	$	41,442	$	57,879	$	52,017	$	30,658	$	132,915	$	762,582	$	2,288	$	1,094,314
Default	—		—		—		—		—		—		942		142		1,084

Total home equity	$	14,533	$	41,442	$	57,879	$	52,017	$	30,658	$	132,915	$	763,524	$	2,430	$	1,095,398
Current-period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other consumer (2)
Pass	$	307	$	457	$	1,542	$	1,075	$	559	$	2,445	$	20,940	$	—	$	27,325
Default	—		—		—		—		—		—		1		—		1

Total other consumer	$	307	$	457	$	1,542	$	1,075	$	559	$	2,445	$	20,941	$	—	$	27,326
Current-period gross write-offs	$	1,003	$	—	$	—	$	—	$	—	$	7	$	14	$	—	$	1,024

Total	$	1,254,060	$	2,719,387	$	2,350,389	$	1,776,962	$	916,206	$	3,336,946	$	1,782,674	$	3,287	$	14,139,911
Total current -period gross write-offs	$	1,003	$	—	$	—	$	—	$	—	$	41	$	23,538	$	—	$	24,582

(1)Loan origination dates in the tables above reflect the original origination date, or the date of a material modification of a previously originated loan.

(2)Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances and the associated gross write-offs.

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. However, the Company does supplement performance data with current Fair Isaac Corporation (“FICO”) scores and Loan to Value (“LTV”) estimates. Current FICO data is purchased and appended to all consumer loans on a regular basis. In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential real estate and home equity portfolios, periodically. The following table shows the weighted average FICO scores and the weighted average combined LTV ratios at the dates indicated below:


	June 30 2024		December 31 2023
Residential real estate portfolio
FICO score (re-scored)(1)	755		754
LTV (re-valued)(2)	58.7	%	59.8	%
Home equity portfolio
FICO score (re-scored)(1)	769		770
LTV (re-valued)(2)(3)	43.5	%	43.3	%

(1)The average FICO scores at June 30, 2024 are based upon rescores from June 2024 as available for previously originated loans, or origination score data for loans booked in June 2024. The average FICO scores at December 31, 2023 were based upon rescores available from December 2023, as available for previously originated loans, or origination score data for loans booked in December 2023.

(2)The combined LTV ratios for June 30, 2024 are based upon updated automated valuations as of May 2024, when available, and/or the most current valuation data available. The combined LTV ratios for December 31, 2023 were based upon updated automated valuations as of November 2023, when available, and/or the most current valuation data available as of such date. The updated automated valuations provide new information on loans that may be available since the previous valuation was obtained. If no new information is available, the valuation will default to the previously obtained data or most recent appraisal.

(3)For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.

Unfunded Commitments

Management evaluates the need for a reserve on unfunded lending commitments in a manner consistent with loans held for investment. At June 30, 2024 and December 31, 2023, the Company's estimated reserve for unfunded commitments amounted to $1.4 million and $1.5 million, respectively.

Asset Quality

The Company’s philosophy toward managing its loan portfolios is predicated upon careful monitoring, which stresses early detection and response to delinquent and default situations. Delinquent loans are managed by a team of collection specialists and the Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame. As a general rule, loans 90 days or more past due with respect to principal or interest are classified as nonaccrual loans. The Company also may use discretion regarding other loans 90 days or more delinquent if the loan is well secured and/or in process of collection.

The following table shows information regarding nonaccrual loans as of the dates indicated:


	Nonaccrual Balances
	June 30, 2024						December 31, 2023
	With Allowance for Credit Losses		Without Allowance for Credit Losses (1)		Total		With Allowance for Credit Losses		Without Allowance for Credit Losses (1)		Total
	(Dollars in thousands)
Commercial and industrial	$	17,793	$	—	$	17,793	$	19,890	$	298	$	20,188
Commercial real estate	23,479		—		23,479		11,911		11,041		22,952

Small business	437		—		437		394		4		398
Residential real estate	10,629		—		10,629		7,634		—		7,634
Home equity	5,090		—		5,090		3,171		—		3,171
Other consumer	23		—		23		40		—		40
Total nonaccrual loans	$	57,451	$	—	$	57,451	$	43,040	$	11,343	$	54,383

(1)Nonaccrual balances reported above without an allowance for credit losses are attributable to loans evaluated on an individual basis where it was determined that there was no risk of loss due to sufficient underlying collateral values.

It is the Company's policy to reverse any accrued interest when a loan is put on nonaccrual status, and, as such, the Company did not record any interest income on nonaccrual loans during the three and six months ended June 30, 2024 and 2023, respectively, except for instances where nonaccrual loans were paid off in excess of the recorded book balance. Total accrued interest reversed against interest income amounted to $112,000 and $345,000 for the three months ended June 30, 2024 and 2023, respectively, and $497,000 and $425,000 for the six months ended June 30, 2024 and 2023, respectively.

The following table shows information regarding foreclosed residential real estate property at the dates indicated:


	June 30, 2024		December 31, 2023
	(Dollars in thousands)
Foreclosed residential real estate property held by the creditor	$	110	$	110
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure	$	1,134	$	1,697

The following tables show the age analysis of past due financing receivables as of the dates indicated:


	June 30, 2024
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables (2)		Amortized Cost >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	5	$	164	2	$	147	5	$	17,782	12	$	18,093	$	1,584,659	$	1,602,752	$	—
Commercial real estate	4	1,483		2	1,745		3	19,422		9	22,650		8,129,155		8,151,805		—
Commercial construction	—	—		—	—		—	—		—	—		786,743		786,743		—
Small business	9	205		5	236		7	122		21	563		268,707		269,270		—
Residential real estate	15	3,422		9	2,037		7	1,583		31	7,042		2,432,604		2,439,646		—
Home equity	9	939		4	333		15	2,713		28	3,985		1,112,822		1,116,807		—
Other consumer (1)	424	259		15	55		1	1		440	315		33,604		33,919		—
Total	466	$	6,472	37	$	4,553	38	$	41,623	541	$	52,648	$	14,348,294	$	14,400,942	$	—


	December 31, 2023
	30-59 days			60-89 days			90 days or more			Total Past Due					Total Financing Receivables (2)		Amortized Cost >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Current
	(Dollars in thousands)
Loan Portfolio
Commercial and industrial	6	$	398	1	$	17,538	2	$	673	9	$	18,609	$	1,561,377	$	1,579,986	$	—
Commercial real estate	8	14,674		2	8,419		3	7,279		13	30,372		8,011,136		8,041,508		—
Commercial construction	—	—		—	—		—	—		—	—		849,586		849,586		—
Small business	6	400		1	20		6	243		13	663		251,293		251,956		—
Residential real estate	24	6,216		7	2,187		13	1,573		44	9,976		2,414,778		2,424,754		—
Home equity	23	1,640		4	1,238		10	529		37	3,407		1,094,219		1,097,626		—
Other consumer (1)	413	288		14	31		6	8		433	327		32,327		32,654		—
Total	480	$	23,616	29	$	29,433	40	$	10,305	549	$	63,354	$	14,214,716	$	14,278,070	$	—

(1)Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

(2)The amount of net deferred costs on originated loans included in the ending balance was $6.2 million and $6.4 million at June 30, 2024 and December 31, 2023, respectively. Net unamortized discounts on acquired loans included in the ending balance were $8.4 million and $8.6 million at June 30, 2024 and December 31, 2023, respectively.

Loan Modifications

The following tables present the period end amortized cost basis of loans modified to borrowers experiencing financial difficulty during the periods indicated, disaggregated by class of financing receivable, type of modification granted and the financial effect of the modifications:


	Three Months Ended June 30, 2024
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	7,792	0.49	%	Added a weighted-average contractual term of 6 months to the life of the loans
Commercial real estate	33,114		0.41	%	Added a weighted-average contractual term of 1.1 years to the life of the loans
Commercial construction	4,452		0.57	%	Extended contractual term on one loan by 12 months

Residential real estate	298		0.01	%	Extended contractual term on one loan by 6.2 years


Total	$	45,656
Interest Rate Reduction





Home equity	$	65	0.01%		Reduced contractual rate on one loan from 7.99% to 7.00%

Total	$	65
Term Extension and Interest Rate Reduction



Small business	$	36	0.01%		Extended the contractual term on one loan by 2.5 years and reduced the loan’s contractual interest rate from 10.25% to 6.50%



Total	$	36









Total Outstanding Modified	$	45,757

	Six Months Ended June 30, 2024
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	7,795	0.49%		Added a weighted-average contractual term of 6 months to the life of the loans
Commercial real estate	36,489		0.45%		Added a weighted-average contractual term of 1.0 year to the life of the loans
Commercial construction	6,542		0.83%		Added a weighted-average contractual term of 10 months to the life of the loans

Residential real estate	298		0.01%		Extended the contractual term on one loan by 6.2 years


Total	$	51,124

Interest Rate Reduction



Small business	$	47	0.02%		Reduced contractual rate on one loan from 11.00% to 8.20%

Home equity	65		0.01%		Reduced contractual rate on one loan from 7.99% to 7.00%

Total	$	112
Other Than Insignificant Payment Delay
Commercial and industrial	$	1,809	0.11%		Modification was made with minimal financial effect
Commercial real estate	6,350		0.08%		Modification was made with minimal financial effect





Total	$	8,159
Term Extension and Interest Rate Reduction
Commercial and industrial	$	152	0.01%		Extended the contractual term on one loan by 1.5 years and reduced the interest rate from 10.10% to 7.20%


Small business	36		0.01%		Extended the contractual term on one loan by 2.5 years and reduced the interest rate from 10.25% to 6.50%

Home equity	70		0.01%		Extended the contractual term on one loan by 8.1 years and reduced the interest rate from 10.00% to 6.80%

Total	$	258









Total Outstanding Modified	$	59,653

	Three Months Ended June 30, 2023
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	8,193	0.48	%	Added a weighted-average contractual term of 1 month to the life of the loans
Commercial real estate	15,921		0.20	%	Added a weighted-average contractual term of 1.9 years to the life of the loans
Commercial construction	2,369		0.23	%	Added a weighted-average contractual term of 2 months to the life of the loans




Total	$	26,483






























Term Extension and Other Than Insignificant Payment Delay
Commercial and industrial	$	1,965	0.11	%	The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.
Commercial real estate	6,857		0.09	%	The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.





Total	$	8,822
Total Outstanding Modified	$	35,305


	Six Months Ended June 30, 2023
	Amortized Cost Basis		% of Total Class of Financing Receivable		Financial Effect
(Dollars in thousands)
Term Extension
Commercial and industrial	$	8,193	0.48	%	Added a weighted-average contractual term of 1 month to the life of the loans
Commercial real estate	18,461		0.24	%	Added a weighted-average contractual term of 1.8 years to the life of the loans
Commercial construction	2,369		0.23	%	Added a weighted-average contractual term of 2 months to the life of the loans
Small business	105		0.04	%	Added a weighted-average contractual term of 4.3 years to the life of the loans



Total	$	29,128










Other Than Insignificant Payment Delay
Commercial and industrial	$	2,805	0.16	%	Modification was made with minimal financial effect
Commercial real estate	7,013		0.09	%	Modification was made with minimal financial effect





Total	$	9,818
Term Extension and Interest Rate Reduction



Small business	$	44	0.02	%	Reduced the contractual interest rate on one loan from 10.00% to 6.50%; the financial effect of term extensions are included in term extension table shown above



Total	$	44
Term Extension and Other Than Insignificant Payment Delay
Commercial and industrial	$	1,965	0.11	%	The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.
Commercial real estate	6,857		0.09	%	The financial effects of term extensions are included in term extension table above, while the payment delay modifications had minimal financial effect.





Total	$	8,822
Total Outstanding Modified	$	47,812

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. At June 30, 2024, all loans modified to borrowers

experiencing financial difficulty during the previous 12 months were current. The following table depicts the amortized cost and payment status of loans that were modified during the previous 12 months as of June 30, 2023:

















	Payment Status (Amortized Cost Basis)
	Current		30-89 Days Past Due		90+ Days Past Due
	(Dollars in thousands)
Loan Type
Commercial and industrial	$	12,963	$	—	$	—
Commercial real estate	17,211		15,120		—
Commercial construction	2,369		—		—
Small business	149		—		—



Total	$	32,692	$	15,120	$	—

The Company considers a loan to have defaulted when it reaches 90 days past due. At both June 30, 2024 and 2023, there were no loans modified to borrowers experiencing financial difficulty during the previous 12 months that subsequently defaulted during the three or six months then ended.

At June 30, 2024, the Company had $275,000 in additional commitments to lend to borrowers experiencing financial difficulty whose loans were modified and included in the above tables for the three and six months then ended. The Company had no such additional commitments at June 30, 2023.

Loan modifications to borrowers experiencing financial difficulty are evaluated on a collective basis with loans sharing similar risk characteristics in accordance with the current expected credit loss ("CECL") methodology.