Loans (Tables)

9 Months Ended

Sep. 30, 2023

Loans and Leases Receivable, Net Amount [Abstract]

Schedule of loans receivable

Loan segments have been identified by evaluating the portfolio based on collateral and credit risk characteristics. Loans receivable consist of the following:

	September 30, 2023			December 31, 2022
	(In Thousands)
Real Estate:
Residential	$	1,797,676		$	1,535,574
Commercial		2,820,410			2,762,311
Construction		921,438			1,278,255
		5,539,524			5,576,140
Other Loans:
Commercial		1,039,465			1,055,180
Home equity and improvement		269,053			277,613
Consumer finance		203,800			213,405
		1,512,318			1,546,198
Loans before deferred loan origination fees and costs		7,051,842			7,122,338
Deduct:
Undisbursed construction loan funds		(367,299	)		(672,775	)
Net deferred loan origination fees and costs		12,326			11,057
Allowance for credit losses		(76,513	)		(72,816	)
Total loans	$	6,620,356		$	6,387,804

Summary of amortized cost basis of collateral-dependent loans by Class of loans and collateral type

The following table presents the amortized cost basis of collateral-dependent loans by class of loans and collateral type as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023
	Real Estate		Equipment and Machinery		Inventory and Receivables		Vehicles		Total
Real Estate:
Residential	$	—	$	—	$	—	$	—	$	—
Commercial		10,587		—		1,159		—		11,746
Construction		—		—		—		—		—
Other Loans:
Commercial		2,022		8,437		4,726		744		15,929
Home equity and improvement		—		—		—		—		—
Consumer finance		—		—		—		—		—
Total	$	12,609	$	8,437	$	5,885	$	744	$	27,675

	December 31, 2022
	Real Estate		Equipment and Machinery		Inventory and Receivables		Vehicles		Total
Real Estate:
Residential	$	51	$	—	$	—	$	—	$	51
Commercial		10,708		—		2,716		—		13,424
Construction		—		—		—		—		—
Other Loans:
Commercial		2,161		523		3,858		—		6,542
Home equity and improvement		—		—		—		—		—
Consumer finance		—		—		—		—		—
Total	$	12,920	$	523	$	6,574	$	—	$	20,017

Schedule of current balance of non-performing loans

The following table presents the current balance of the non-performing loans as of the dates indicated:

As of September 30, 2023	Non-accrual with no allocated allowance for credit losses		Non-accrual with allocated allowance for credit losses		Loans past due over 90 days still accruing
Residential real estate	$	333	$	9,463	$	—
Commercial real estate		3,752		7,186		—
Construction		—		—		—
Commercial		4,470		7,323		—
Home equity and improvement		—		1,133		—
Consumer finance		—		2,821		—
PCD		—		2,982
Total	$	8,555	$	30,908	$	—

As of December 31, 2022	Non-accrual with no allocated allowance for credit losses		Non-accrual with allocated allowance for credit losses		Loans past due over 90 days still accruing
Residential real estate	$	419	$	7,305	$	—
Commercial real estate		7,844		5,552		—
Construction		—		—		—
Commercial		4,551		311		—
Home equity and improvement		—		1,637		—
Consumer finance		—		2,401		—
PCD		654		3,148
Total	$	13,468	$	20,354	$	—

Schedule of aging of the amortized cost/ recorded investment in past due and non- accrual loans

The following table presents the aging of the amortized cost in past due and non-accrual loans as of September 30, 2023, by class of loans (in thousands):

Class	Current		30 - 59 days		60 - 89 days		90 + days		Total Past Due		Total Non- Accrual
Real Estate:
Residential	$	1,776,757	$	147	$	7,420	$	8,232	$	15,799	$	9,795
Commercial		2,816,860		24		22		6,287		6,333		10,938
Construction		554,139		—		—		—		—		—
Other Loans:
Commercial		1,028,295		1,453		217		4,942		6,612		11,793
Home equity and improvement		263,155		2,390		903		657		3,950		1,134
Consumer finance		199,343		3,244		992		2,399		6,635		2,820
PCD		15,845		229		380		2,537		3,146		2,983
Total Loans	$	6,654,394	$	7,487	$	9,934	$	25,054	$	42,475	$	39,463

The following table presents the aging of the recorded investment in past due and non-accrual loans as of December 31, 2022, by class of loans (in thousands):

Class	Current		30 - 59 days		60 - 89 days		90 + days		Total Past Due		Total Non- Accrual
Real Estate:
Residential	$	1,516,135	$	279	$	6,350	$	6,203	$	12,832	$	7,724
Commercial		2,751,933		327		878		11,477		12,682		13,396
Construction		605,043		298		139		—		437		—
Other Loans:
Commercial		1,044,898		413		128		4,635		5,176		4,862
Home equity and improvement		269,183		4,342		489		1,190		6,021		1,637
Consumer finance		209,062		2,763		1,397		2,227		6,387		2,401
PCD		17,082		603		495		2,651		3,749		3,802
Total Loans	$	6,413,336	$	9,025	$	9,876	$	28,383	$	47,284	$	33,822

Schedule of percentage of the amortized cost basis of loan category

The percentage of the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of loan category is also presented below:

	Loans Modifications Made to Borrowers Experiencing Financial Difficulty Three Months Ended September 30, 2023 (Dollars in Thousands)					Loans Modifications Made to Borrowers Experiencing Financial Difficulty Nine Months Ended September 30, 2023 (Dollars in Thousands)
	Term Extension					Term Extension
Loan Type	Amortized Cost Basis		Percent of total loans by category			Amortized Cost Basis		Percent of total loans by category
Real Estate:
Residential	$	—		—			109		0.01	%
Commercial		4,178		0.15	%		8,900		0.32	%
Construction		—		—			—		—
Other Loans:
Commercial		—		—			37		0.00	%
Home equity and improvement		—		—			—		—
Consumer finance		—		—			—		—
Total	$	4,178				$	9,046

Schedule of Financial Effects of Loan Modifications

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:

	Term Extension
Loan Type	Financial Effect
Real Estate:
Residential	-Term extended from 7 year balloon to 30 years
Commercial	-Added 12 months to the life of the loan, which reduced monthly payment amounts for the borrower. -Term extension 10 yr term/ 20 yr am to 12 month interest only
Other Loans:
Commercial	-Added 84 months to the life of the loan to term out 2 year balloon, which reduced monthly payment amounts for the borrower.
	Rate Reduction
Loan Type	Financial Effect
Real Estate:
Commercial	-Interest rate reduction 11.08% to 5.00% -Interest rate reduction 10.65% to 5.00% -Interest rate reduction 7.14% to 4.50%

Schedule of risk category of loans by class of loans

As of September 30, 2023, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

Class	Unclassified		Special Mention		Substandard		Doubtful		Total classified		Total
Real Estate:
Residential	$	1,781,427	$	422	$	10,707	$	—	$	10,707	$	1,792,556
Commercial		2,742,469		54,523		26,201		—		26,201		2,823,193
Construction		546,306		7,833		—		—		—		554,139
Other Loans:
Commercial		982,891		31,930		20,086		—		20,086		1,034,907
Home equity and improvement		265,974		—		1,131		—		1,131		267,105
Consumer finance		203,359		—		2,619		—		2,619		205,978
PCD		13,376		2,813		2,802		—		2,802		18,991
Total Loans (1)	$	6,535,802	$	97,521	$	63,546	$	—	$	63,546	$	6,696,869

(1) Total loans are net of undisbursed funds and deferred fees and costs.

As of December 31, 2022, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

Class	Unclassified		Special Mention		Substandard		Doubtful		Total classified		Total
Real Estate:
Residential	$	1,519,657	$	935	$	8,375	$	—	$	8,375	$	1,528,967
Commercial		2,698,292		46,029		20,294		—		20,294		2,764,615
Construction		605,480		—		—		—		—		605,480
Other Loans:
Commercial		1,016,925		26,319		6,830		—		6,830		1,050,074
Home equity and improvement		273,613		—		1,591		—		1,591		275,204
Consumer finance		213,078		—		2,371		—		2,371		215,449
PCD		13,904		2,590		4,337		—		4,337		20,831
Total Loans (1)	$	6,340,949	$	75,873	$	43,798	$	—	$	43,798	$	6,460,620

(1) Total loans are net undisbursed loan funds and deferred fees and costs

Summary of amortized cost basis of loans by credit quality indicator and class of loans

The following tables present the amortized cost basis of loans by credit quality indicator and class of loans as of September 30, 2023 and December 31, 2022 (in thousands).

	Term of loans by origination
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
As of September 30, 2023
Real Estate
Residential:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	6	$	6	$	—	$	12
Risk Rating
Unclassified	$	102,785	$	520,672	$	440,588	$	315,658	$	88,025	$	311,365	$	2,334	$	1,781,427
Special Mention		—		—		—		172		—		250		—		422
Substandard		336		933		1,351		1,626		889		5,572		—		10,707
Doubtful		—		—		—		—		—		—		—		—
Total	$	103,121	$	521,605	$	441,939	$	317,456	$	88,914	$	317,187	$	2,334	$	1,792,556
Commercial:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	56	$	13	$	69
Risk Rating
Unclassified	$	148,305	$	597,201	$	504,791	$	505,108	$	306,096	$	668,523	$	12,445	$	2,742,469
Special Mention		—		3,037		26,795		1,991		10,694		11,576		430		54,523
Substandard		—		267		196		527		4,822		20,359		30		26,201
Doubtful		—		—		—		—		—		—		—		—
Total	$	148,305	$	600,505	$	531,782	$	507,626	$	321,612	$	700,458	$	12,905	$	2,823,193
Construction:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Risk Rating
Unclassified	$	86,588	$	278,044	$	139,564	$	41,506	$	604	$	—	$	—	$	546,306
Special Mention		—		7,833		—		—		—		—		—		7,833
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	86,588	$	285,877	$	139,564	$	41,506	$	604	$	—	$	—	$	554,139
Other Loans
Commercial:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	37	$	219	$	256
Risk Rating
Unclassified	$	104,633	$	257,750	$	159,669	$	68,155	$	35,185	$	31,462	$	326,037	$	982,891
Special Mention		2,000		1,289		11,466		284		613		3,938		12,340		31,930
Substandard		—		678		10,703		4,673		390		1,267		2,375		20,086
Doubtful		—		—		—		—		—		—		—		—
Total	$	106,633	$	259,717	$	181,838	$	73,112	$	36,188	$	36,667	$	340,752	$	1,034,907
Home equity and Improvement:
Current-period gross charge-offs	$	21	$	—	$	—	$	—	$	7	$	-	$	10	$	38
Risk Rating
Unclassified	$	15,467	$	26,286	$	19,085	$	4,650	$	3,074	$	27,944	$	169,468	$	265,974
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		49		14		—		—		188		880		1,131
Doubtful		—		—		—		—		—		—		—		—
Total	$	15,467	$	26,335	$	19,099	$	4,650	$	3,074	$	28,132	$	170,348	$	267,105
Consumer Finance:
Current-period gross charge-offs	$	7	$	33	$	21	$	26	$	13	$	180	$	-	$	280
Risk Rating
Unclassified	$	39,531	$	105,885	$	24,918	$	12,575	$	8,679	$	2,400	$	9,371	$	203,359
Special Mention		—		—		—		—		—		—		—		—
Substandard		109		1,334		521		346		211		95		3		2,619
Doubtful		—		—		—		—		—		—		—		—
Total	$	39,640	$	107,219	$	25,439	$	12,921	$	8,890	$	2,495	$	9,374	$	205,978
PCD:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	6	$	-	$	6
Risk Rating
Unclassified	$	—	$	—	$	—	$	—	$	117	$	12,720	$	539	$	13,376
Special Mention		—		—		—		—		—		724		2,089		2,813
Substandard		—		—		—		—		—		2,462		340		2,802
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	117	$	15,906	$	2,968	$	18,991

	Term of loans by origination
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
As of December 31, 2022
Real Estate
Residential:
Risk Rating
Pass	$	264,884	$	474,992	$	335,982	$	93,548	$	51,710	$	296,089	$	2,452	$	1,519,657
Special Mention		—		—		180		30		80		78		567		935
Substandard		280		1,648		1,614		922		517		3,394		—		8,375
Doubtful		—		—		—		—		—		—		—		—
Total	$	265,164	$	476,640	$	337,776	$	94,500	$	52,307	$	299,561	$	3,019	$	1,528,967
Commercial:
Risk Rating
Pass	$	582,384	$	506,386	$	517,790	$	324,210	$	194,240	$	557,728	$	15,554	$	2,698,292
Special Mention		161		3,614		—		593		25,395		15,561		705		46,029
Substandard		115		2,104		527		4,612		4,455		8,348		133		20,294
Doubtful		—		—		—		—		—		—		—		—
Total	$	582,660	$	512,104	$	518,317	$	329,415	$	224,090	$	581,637	$	16,392	$	2,764,615
Construction:
Risk Rating
Pass	$	348,570	$	182,755	$	53,161	$	20,994	$	—	$	—	$	—	$	605,480
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total	$	348,570	$	182,755	$	53,161	$	20,994	$	—	$	—	$	—	$	605,480
Other Loans
Commercial:
Risk Rating
Pass	$	266,501	$	208,663	$	90,014	$	49,887	$	23,719	$	22,515	$	355,626	$	1,016,925
Special Mention		1,891		4,094		3,913		1,533		1,160		5,365		8,363		26,319
Substandard		16		119		3,897		4		190		204		2,400		6,830
Doubtful		—		—		—		—		—		—		—		—
Total	$	268,408	$	212,876	$	97,824	$	51,424	$	25,069	$	28,084	$	366,389	$	1,050,074
Home equity and Improvement:
Risk Rating
Pass	$	30,009	$	21,116	$	5,387	$	3,592	$	1,849	$	30,509	$	181,151	$	273,613
Special Mention		—		—		—		—		—		—		—		—
Substandard		44		14		—		28		32		502		971		1,591
Doubtful		—		—		—		—		—		—		—		—
Total	$	30,053	$	21,130	$	5,387	$	3,620	$	1,881	$	31,011	$	182,122	$	275,204
Consumer Finance:
Risk Rating
Pass	$	133,194	$	33,109	$	17,219	$	13,681	$	4,022	$	2,529	$	9,324	$	213,078
Special Mention		—		—		—		—		—		—		—		—
Substandard		676		483		668		316		62		34		132		2,371
Doubtful		—		—		—		—		—		—		—		—
Total	$	133,870	$	33,592	$	17,887	$	13,997	$	4,084	$	2,563	$	9,456	$	215,449
PCD:
Risk Rating
Pass	$	—	$	—	$	—	$	131	$	369	$	13,117	$	287	$	13,904
Special Mention		—		—		—		—		—		292		2,298		2,590
Substandard		—		—		—		2		22		3,697		616		4,337
Doubtful		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	133	$	391	$	17,106	$	3,201	$	20,831

Summary of credit loss estimation

The remaining life method was selected for the consumer direct loan segment since the pool contains loans with many different structures and payment streams and collateral. The weighted average remaining life uses an average annual charge-off rate applied to the contractual term, further adjusted for estimated prepayments to determine the unadjusted historical charge-off rate for the remaining balance of assets.

Portfolio Segments	Loan Pool	Methodology	Loss Drivers
Residential real estate	1-4 Family nonowner occupied	DCF	National unemployment
	1-4 Family owner occupied	DCF	National unemployment
Commercial real estate	Commercial real estate nonowner occupied	DCF	National unemployment
	Commercial real estate owner occupied	DCF	National unemployment
	Multi Family	DCF	National unemployment
	Agriculture Land	DCF	National unemployment
	Other commercial real estate	DCF	National unemployment
Construction secured by real estate	Construction Other	PD/LGD	Call report loss history
	Construction Residential	PD/LGD	Call report loss history
Commercial	Commercial working capital	PD/LGD	Call report loss history
	Agriculture production	PD/LGD	Call report loss history
	Other commercial	PD/LGD	Call report loss history
Home equity and improvement	Home equity and improvement	PD/LGD	Call report loss history
Consumer finance	Consumer direct	Remaining life	Call report loss history
	Consumer indirect	DCF	National unemployment

Schedule of allowance for credit loss (ACL) activity

The following table discloses allowance for credit loss (“ACL”) activity for the three and nine months ended September 30, 2023 and 2022 by portfolio segment (in thousands):

Three Months Ended September 30, 2023	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Home Equity and Improvement			Consumer Finance			Total
Beginning Allowance	$	18,918		$	34,751		$	3,831		$	13,101		$	3,399		$	1,921		$	75,921
Charge-Offs		(12	)		(69	)		—			(259	)		(41	)		(280	)		(661	)
Recoveries		32			797			—			114			20			45			1,008
Provisions		85			535			(1,129	)		1,179			(608	)		183			245
Ending Allowance	$	19,023		$	36,014		$	2,702		$	14,135		$	2,770		$	1,869		$	76,513

Nine Months Ended September 30, 2023	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Home Equity and Improvement			Consumer Finance			Total
Beginning Allowance	$	16,711		$	34,218		$	4,025		$	11,769		$	4,044		$	2,049		$	72,816
Charge-Offs		(321	)		(1,758	)		—			(778	)		(241	)		(1,020	)		(4,118	)
Recoveries		77			868			—			1,017			77			177			2,216
Provisions		2,556			2,686			(1,323	)		2,127			(1,110	)		663			5,599
Ending Allowance	$	19,023		$	36,014		$	2,702		$	14,135		$	2,770		$	1,869		$	76,513

Three Months Ended September 30, 2022	Residential Real Estate			Commercial Real Estate			Construction		Commercial			Home Equity and Improvement			Consumer Finance			Total
Beginning Allowance	$	14,113		$	34,952		$	2,999	$	9,762		$	4,003		$	1,245		$	67,074
Charge-Offs		(15	)		(206	)		—		(29	)		(47	)		(185	)		(482	)
Recoveries		77			48			—		84			95			24			328
Provisions		2,136			(2,082	)		287		2,465			159			741			3,706
Ending Allowance	$	16,311		$	32,712		$	3,286	$	12,282		$	4,210		$	1,825		$	70,626

Nine Months Ended September 30, 2022	Residential Real Estate			Commercial Real Estate			Construction			Commercial			Home Equity and Improvement			Consumer Finance			Total
Beginning Allowance	$	12,029		$	32,399		$	3,004		$	13,410		$	4,221		$	1,405		$	66,468
Charge-Offs		(1,016	)		(350	)		(16	)		(5,342	)		(324	)		(426	)		(7,474	)
Recoveries		831			562			3			370			208			175			2,149
Provisions		4,467			101			295			3,844			105			671			9,483
Ending Allowance	$	16,311		$	32,712		$	3,286		$	12,282		$	4,210		$	1,825		$	70,626

Schedule of outstanding balance and related allowance on loans

The outstanding balance and related allowance on these loans as of September 30, 2023 and December 31, 2022 is as follows (in thousands):

	As of September 30, 2023				As of December 31, 2022
	Loan Balance		ACL Balance		Loan Balance		ACL Balance
	(In Thousands)				(In Thousands)
Real Estate:
Residential	$	11,016	$	144	$	11,546	$	139
Commercial		1,289		50		1,544		34
Construction		—		—		—		—
		12,305		194		13,090		173
Other Loans:
Commercial		4,522		497		5,058		594
Home equity and improvement		1,948		65		2,409		80
Consumer finance		216		5		274		5
		6,686		567		7,741		679
Total	$	18,991	$	761	$	20,831	$	852