Allowance for Credit Losses

9 Months Ended

Sep. 30, 2024

In accordance with Accounting Standards Codification (“ASC”) 326, the Company is required to measure the allowance for credit losses of financial assets with similar risk characteristics on a collective or pooled basis. In considering the segmentation of financial assets measured at amortized cost into pools, the Company considered various risk characteristics in its analysis. Generally, the segmentation utilized represents the level at which the Company develops and documents its systematic methodology to determine the allowance for credit losses for the financial assets held at amortized cost, specifically the Company's loan portfolio and debt securities classified as held-to-maturity. Descriptions of the Company’s loan portfolio segments and major debt security types are included in Note (5) “Allowance for Credit Losses” of the 2023 Form 10-K.

In accordance with ASC 326, the Company elected to not measure an allowance for credit losses on accrued interest. As such accrued interest is written off in a timely manner when deemed uncollectible. Any such write-off of accrued interest will reverse previously recognized interest income. In addition, the Company elected to not include accrued interest within presentation and disclosures of the carrying amount of financial assets held at amortized cost. This election is applicable to the various disclosures included within the Company's financial statements. Accrued interest related to financial assets held at amortized cost is included within accrued interest receivable and other assets within the Company's Consolidated Statements of Condition and totaled $351.5 million at September 30, 2024, $304.5 million at December 31, 2023, and $290.9 million at September 30, 2023.

The tables below show the aging of the Company’s loan portfolio by the segmentation noted above at September 30, 2024, December 31, 2023 and September 30, 2023:


As of September 30, 2024			90+ days and still accruing		60-89 days past due		30-59 days past due
(In thousands)	Nonaccrual								Current		Total Loans
Loan Balances (includes PCD):
Commercial






Commercial, industrial and other	$	63,826	$	20	$	32,560	$	46,057	$	15,105,230	$	15,247,693

Commercial real estate
Construction and development	2,284		—		757		1,798		2,398,851		2,403,690
Non-construction	39,787		225		12,682		46,548		10,290,485		10,389,727







Home equity	1,122		—		1,035		2,580		422,306		427,043

Residential real estate, excluding early buy-out loans	17,959		—		6,364		2,160		3,226,166		3,252,649


Premium finance receivables
Property and casualty insurance loans	36,079		18,235		18,740		30,204		7,028,423		7,131,681
Life insurance loans	—		—		10,902		74,432		7,911,565		7,996,899

Consumer and other	2		148		22		264		82,240		82,676
Total loans, net of unearned income, excluding early buy-out loans	$	161,059	$	18,628	$	83,062	$	204,043	$	46,465,266	$	46,932,058
Early buy-out loans guaranteed by U.S. government agencies (1)	—		43,358		150		—		91,881		135,389
Total loans, net of unearned income	$	161,059	$	61,986	$	83,212	$	204,043	$	46,557,147	$	47,067,447


As of December 31, 2023			90+ days and still accruing		60-89 days past due		30-59 days past due
(In thousands)	Nonaccrual								Current		Total Loans
Loan Balances (includes PCD):
Commercial






Commercial, industrial and other	$	38,940	$	98	$	19,488	$	85,743	$	12,687,784	$	12,832,053

Commercial real estate
Construction and development	2,205		—		251		1,343		2,080,242		2,084,041
Non-construction	33,254		—		8,264		19,291		9,199,314		9,260,123







Home equity	1,341		—		62		2,263		340,310		343,976

Residential real estate, excluding early buy-out loans	15,391		—		2,325		22,942		2,578,425		2,619,083

Premium finance receivables
Property and casualty insurance loans	27,590		20,135		23,236		50,437		6,782,131		6,903,529
Life insurance loans	—		—		16,206		45,464		7,816,273		7,877,943

Consumer and other	22		54		25		165		60,234		60,500
Total loans, net of unearned income, excluding early buy-out loans	$	118,743	$	20,287	$	69,857	$	227,648	$	41,544,713	$	41,981,248
Early buy-out loans guaranteed by U.S. government agencies (1)	—		57,688		250		328		92,317		150,583
Total loans, net of unearned income	$	118,743	$	77,975	$	70,107	$	227,976	$	41,637,030	$	42,131,831

(1)Early buy-out loans are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.


As of September 30, 2023			90+ days and still accruing		60-89 days past due		30-59 days past due
(In thousands)	Nonaccrual								Current		Total Loans
Loan Balances (includes PCD):
Commercial






Commercial, industrial and other	$	43,569	$	200	$	22,889	$	35,681	$	12,623,134	$	12,725,473

Commercial real estate
Construction and development	8,384		—		2,438		31,292		1,851,659		1,893,773
Non-construction	8,659		1,092		4,957		29,692		9,008,007		9,052,407







Home equity	1,363		—		219		1,668		340,008		343,258

Residential real estate, excluding early buy-out loans	16,103		—		1,145		904		2,520,478		2,538,630

Premium finance receivables
Property and casualty insurance loans	26,756		16,253		16,552		31,919		6,631,267		6,722,747
Life insurance loans	—		10,679		41,894		14,972		7,864,263		7,931,808

Consumer and other	16		27		196		519		68,205		68,963
Total loans, net of unearned income, excluding early buy-out loans	$	104,850	$	28,251	$	90,290	$	146,647	$	40,907,021	$	41,277,059
Early buy-out loans guaranteed by U.S. government agencies (1)	117		57,558		2,116		—		109,182		168,973
Total loans, net of unearned income	$	104,967	$	85,809	$	92,406	$	146,647	$	41,016,203	$	41,446,032

(1)Early buy-out loans are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs, subject to indemnifications and insurance limits for certain loans.

Credit Quality Indicators

Credit quality indicators, specifically the Company's internal risk rating systems, reflect how the Company monitors credit losses and represents factors used by the Company when measuring the allowance for credit losses. Descriptions of the Company’s credit quality indicators by financial asset are included in Note (5) “Allowance for Credit Losses” of the 2023 Form 10-K.

The table below shows the Company’s loan portfolio by credit quality indicator and year of origination at September 30, 2024:


	Year of Origination														Revolving		Total
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving		to Term		Loans
Loan Balances:
Commercial, industrial and other
Pass	$	2,460,772	$	2,366,998	$	1,841,838	$	1,219,759	$	463,726	$	1,115,942	$	5,053,494	$	13,568	$	14,536,097
Special mention	6,148		68,788		72,908		80,229		13,257		17,456		164,169		1,474		424,429
Substandard accrual	3,789		47,800		42,374		29,408		7,256		13,029		79,030		655		223,341
Substandard nonaccrual/doubtful	500		5,536		6,980		9,331		1,084		8,547		31,619		229		63,826
Total commercial, industrial and other	$	2,471,209	$	2,489,122	$	1,964,100	$	1,338,727	$	485,323	$	1,154,974	$	5,328,312	$	15,926	$	15,247,693






Construction and development
Pass	$	196,556	$	573,342	$	965,654	$	289,324	$	95,193	$	149,561	$	17,560	$	—	$	2,287,190


Special mention	—		417		14,990		—		—		14,794		3,780		—		33,981
Substandard accrual	—		757		18,999		1,102		1,777		57,600		—		—		80,235
Substandard nonaccrual/doubtful	—		251		—		—		2,033		—		—		—		2,284
Total construction and development	$	196,556	$	574,767	$	999,643	$	290,426	$	99,003	$	221,955	$	21,340	$	—	$	2,403,690
Non-construction
Pass	$	1,078,671	$	1,527,560	$	1,934,856	$	1,460,051	$	933,785	$	2,929,344	$	217,237	$	2,144	$	10,083,648
Special mention	3,613		13,006		29,415		35,222		5,298		51,144		1,688		—		139,386
Substandard accrual	158		3,876		14,103		31,573		29,718		47,478		—		—		126,906
Substandard nonaccrual/doubtful	—		1,173		453		586		—		37,575		—		—		39,787
Total non-construction	$	1,082,442	$	1,545,615	$	1,978,827	$	1,527,432	$	968,801	$	3,065,541	$	218,925	$	2,144	$	10,389,727
Home equity
Pass	$	70	$	—	$	45	$	175	$	—	$	6,771	$	398,843	$	4,608	$	410,512
Special mention	—		48		220		59		119		2,871		6,172		454		9,943
Substandard accrual	—		16		—		—		57		4,836		541		16		5,466
Substandard nonaccrual/doubtful	—		—		497		135		—		402		—		88		1,122
Total home equity	$	70	$	64	$	762	$	369	$	176	$	14,880	$	405,556	$	5,166	$	427,043
Residential real estate
Early buy-out loans guaranteed by U.S. government agencies	$	—	$	4,594	$	3,743	$	3,759	$	5,206	$	118,087	$	—	$	—	$	135,389
Pass	584,491		535,419		834,543		774,793		211,510		258,425		—		—		3,199,181
Special mention	250		2,846		9,093		2,063		577		9,928		—		—		24,757
Substandard accrual	24		585		3,401		906		1,122		4,714		—		—		10,752
Substandard nonaccrual/doubtful	160		1,073		4,436		4,624		1,227		6,439		—		—		17,959
Total residential real estate	$	584,925	$	544,517	$	855,216	$	786,145	$	219,642	$	397,593	$	—	$	—	$	3,388,038
Premium finance receivables - property and casualty
Pass	$	6,827,867	$	169,649	$	—	$	6,351	$	71	$	—	$	—	$	—	$	7,003,938
Special mention	85,094		3,442		64		2		—		—		—		—		88,602
Substandard accrual	1,749		1,308		1		4		—		—		—		—		3,062
Substandard nonaccrual/doubtful	18,543		17,249		274		12		1		—		—		—		36,079
Total premium finance receivables - property and casualty	$	6,933,253	$	191,648	$	339	$	6,369	$	72	$	—	$	—	$	—	$	7,131,681
Premium finance receivables - life
Pass	$	1,232,306	$	6,740,906	$	3,929	$	—	$	—	$	—	$	—	$	—	$	7,977,141
Special mention	—		8,188		—		—		—		—		—		—		8,188
Substandard accrual	7,514		4,056		—		—		—		—		—		—		11,570
Substandard nonaccrual/doubtful	—		—		—		—		—		—		—		—		—
Total premium finance receivables - life	$	1,239,820	$	6,753,150	$	3,929	$	—	$	—	$	—	$	—	$	—	$	7,996,899
Consumer and other
Pass	$	3,319	$	3,545	$	839	$	983	$	88	$	16,145	$	57,448	$	—	$	82,367
Special mention	17		9		8		5		—		136		6		—		181
Substandard accrual	—		4		87		—		—		26		9		—		126
Substandard nonaccrual/doubtful	—		—		1		1		—		—		—		—		2
Total consumer and other	$	3,336	$	3,558	$	935	$	989	$	88	$	16,307	$	57,463	$	—	$	82,676
Total loans
Early buy-out loans guaranteed by U.S. government agencies	$	—	$	4,594	$	3,743	$	3,759	$	5,206	$	118,087	$	—	$	—	$	135,389
Pass	12,384,052		11,917,419		5,581,704		3,751,436		1,704,373		4,476,188		5,744,582		20,320		45,580,074
Special mention	95,122		96,744		126,698		117,580		19,251		96,329		175,815		1,928		729,467
Substandard accrual	13,234		58,402		78,965		62,993		39,930		127,683		79,580		671		461,458
Substandard nonaccrual/doubtful	19,203		25,282		12,641		14,689		4,345		52,963		31,619		317		161,059
Total loans	$	12,511,611	$	12,102,441	$	5,803,751	$	3,950,457	$	1,773,105	$	4,871,250	$	6,031,596	$	23,236	$	47,067,447
Gross write offs

Nine months ended September 30, 2024	8,223		30,985		5,797		20,094		2,206		22,310		—		—		89,615

Held-to-maturity debt securities

The Company conducts an assessment of its investment securities, including those classified as held-to-maturity, at the time of purchase and on at least an annual basis to ensure such investment securities remain within appropriate levels of risk and continue to perform satisfactorily in fulfilling its obligations. The Company considers, among other factors, the nature of the

securities and credit ratings or financial condition of the issuer. If available, the Company obtains a credit rating for issuers from a Nationally Recognized Statistical Rating Organization (“NRSRO”) for consideration. If no such rating is available for an issuer, the Company performs an internal rating based on the scale utilized within the loan portfolio as discussed above. For purposes of the table below, the Company has converted any issuer rating from an NRSRO into the Company’s internal ratings based on Investment Policy and review by the Company’s management.


As of September 30, 2024	Year of Origination												Total
(In thousands)	2024		2023		2022		2021		2020		Prior		Balance
Amortized Cost Balances:
U.S. government agencies
1-4 internal grade	$	—	$	—	$	135,000	$	147,818	$	25,000	$	6,760	$	314,578
5-7 internal grade													—
8-10 internal grade													—
Total U.S. government agencies	$	—	$	—	$	135,000	$	147,818	$	25,000	$	6,760	$	314,578
Municipal
1-4 internal grade	$	—	$	4,176	$	1,034	$	6,839	$	258	$	150,481	$	162,788
5-7 internal grade	—		—		—		—		—		2,353		2,353
8-10 internal grade													—
Total municipal	$	—	$	4,176	$	1,034	$	6,839	$	258	$	152,834	$	165,141
Mortgage-backed securities
1-4 internal grade	$	—	$	352,905	$	544,887	$	2,243,363	$	—	$	—	$	3,141,155
5-7 internal grade													—
8-10 internal grade													—
Total mortgage-backed securities	$	—	$	352,905	$	544,887	$	2,243,363	$	—	$	—	$	3,141,155
Corporate notes
1-4 internal grade	$	—	$	—	$	14,968	$	—	$	6,005	$	36,052	$	57,025
5-7 internal grade													—
8-10 internal grade													—
Total corporate notes	$	—	$	—	$	14,968	$	—	$	6,005	$	36,052	$	57,025
Total held-to-maturity securities													$	3,677,899
Less: Allowance for credit losses													(479)
Held-to-maturity securities, net of allowance for credit losses													$	3,677,420

Measurement of Allowance for Credit Losses

The Company's allowance for credit losses consists of the allowance for loan losses, the allowance for unfunded commitment losses and the allowance for held-to-maturity debt security losses. In accordance with ASC 326, the Company measures the allowance for credit losses at the time of origination or purchase of a financial asset, representing an estimate of lifetime expected credit losses on the related asset. When developing its estimate, the Company considers available information relevant to assessing the collectability of cash flows, from both internal and external sources. Historical credit loss experience is one input in the estimation process as well as inputs relevant to current conditions and reasonable and supportable forecasts. In considering past events, the Company considers the relevance, or lack thereof, of historical information due to changes in such things as financial asset underwriting or collection practices, and changes in portfolio mix due to changing business plans and strategies. In considering current conditions and forecasts, the Company considers both the current economic environment and the forecasted direction of the economic environment with emphasis on those factors deemed relevant to or driving changes in expected credit losses. As significant judgment is required, the review of the appropriateness of the allowance for credit losses is performed quarterly by various committees with participation by the Company's executive management.


	September 30,		December 31,		September 30,
(In thousands)	2024		2023		2023





Allowance for loan losses	$	360,279	$	344,235	$	315,039
Allowance for unfunded lending-related commitments losses	75,435		83,030		84,111
Allowance for loan losses and unfunded lending-related commitments losses	435,714		427,265		399,150
Allowance for held-to-maturity securities losses	479		347		381
Allowance for credit losses	$	436,193	$	427,612	$	399,531

The allowance for credit losses is measured on a collective or pooled basis when similar risk characteristics exist, based upon the segmentation discussed above. The Company utilizes modeling methodologies that estimate lifetime credit loss rates on each pool, including methodologies estimating the probability of default and loss given default on specific segments. Historical credit loss history is adjusted for reasonable and supportable forecasts developed by the Company on a quantitative or qualitative basis and incorporates third party economic forecasts. Reasonable and supportable forecasts consider the macroeconomic factors that are most relevant to evaluating and predicting expected credit losses in the Company's financial assets. Currently, the Company utilizes an eight quarter forecast period using a single macroeconomic scenario provided by a third party and reviewed within the Company's governance structure. For periods beyond the ability to develop reasonable and supportable forecasts, the Company reverts to historical loss rates at an input level, straight-line over a four quarter reversion period. Expected credit losses are measured over the contractual term of the financial asset with consideration of expected prepayments. Expected extensions, renewals or modifications of the financial asset are considered when the expected extension, renewal or modification is contained within the existing agreement and is not unconditionally cancelable. The methodologies discussed above are applied to both current asset balances on the Company's Consolidated Statements of Condition and off-balance sheet commitments (i.e. unfunded lending-related commitments).

Assets that do not share similar risk characteristics with a pool are assessed for the allowance for credit losses on an individual basis. These typically include assets experiencing financial difficulties, including assets rated as substandard nonaccrual and doubtful. If foreclosure is probable or the asset is considered collateral-dependent, expected credit losses are measured based upon the fair value of the underlying collateral adjusted for selling costs, if appropriate. Underlying collateral across the Company's segments consist primarily of real estate, land and construction assets as well as general business assets of the borrower. As of September 30, 2024, excluding loans carried at fair value, substandard nonaccrual loans totaling $62.7 million in carrying balance had no related allowance for credit losses.

The Company does not measure an allowance for credit losses on accrued interest receivable balances because these balances are written off in a timely manner as a reduction to interest income when assets are placed on nonaccrual status.

Loan portfolios

A summary of activity in the allowance for credit losses, specifically for the loan portfolio (i.e. allowance for loan losses and allowance for unfunded commitment losses), for the three and nine months ended September 30, 2024 and September 30, 2023 is as follows:


Three months ended September 30, 2024			Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)	Commercial

Allowance for credit losses at beginning of period	$	181,991	$	223,728	$	7,242	$	8,773	$	14,746	$	589	$	437,069

Other adjustments	—		—		—		—		30		—		30
Charge-offs	(22,975)		(95)		—		—		(7,794)		(154)		(31,018)
Recoveries	649		30		101		5		3,477		21		4,283
Provision for credit losses - Other	7,128		(4,162)		134		268		3,284		147		6,799
Provision for credit losses - Day 1 on non-PCD assets acquired during the period	2,967		10,540		1,344		638		—		58		15,547
Initial allowance for credit losses recognized on PCD assets acquired during the period	1,838		1,103		2		61		—		—		3,004


Allowance for credit losses at period end	$	171,598	$	231,144	$	8,823	$	9,745	$	13,743	$	661	$	435,714
By measurement method:
Individually measured	$	21,573	$	5,958	$	50	$	48	$	—	$	1	$	27,630
Collectively measured	150,025		225,186		8,773		9,697		13,743		660		408,084

Loans at period end
Individually measured	$	63,826	$	42,071	$	1,122	$	17,565	$	—	$	2	$	124,586
Collectively measured	15,183,867		12,751,346		425,921		3,232,435		15,128,580		82,674		46,804,823

Loans held at fair value	—		—		—		138,038		—		—		138,038


Three months ended September 30, 2023	Commercial		Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)

Allowance for credit losses at beginning of period	$	143,142	$	215,696	$	6,967	$	12,252	$	9,046	$	277	$	387,380

Other adjustments	—		—		—		—		(60)		—		(60)

Charge-offs	(2,427)		(1,713)		(227)		(78)		(5,848)		(184)		(10,477)
Recoveries	1,162		243		33		1		906		14		2,359
Provision for credit losses	9,611		1,492		307		484		7,776		278		19,948
Allowance for credit losses at period end	$	151,488	$	215,718	$	7,080	$	12,659	$	11,820	$	385	$	399,150
By measurement method:
Individually measured	$	9,773	$	5,408	$	—	$	109	$	—	$	12	$	15,302
Collectively measured	141,715		210,310		7,080		12,550		11,820		373		383,848

Loans at period end
Individually measured	$	43,569	$	17,043	$	1,363	$	15,946	$	—	$	16	$	77,937
Collectively measured	12,681,904		10,929,137		341,895		2,520,479		14,654,555		68,947		41,196,917

Loans held at fair value	—		—		—		171,178		—		—		171,178


Nine months ended September 30, 2024			Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)	Commercial

Allowance for credit losses at beginning of period	$	169,604	$	223,853	$	7,116	$	13,133	$	13,069	$	490	$	427,265

Other adjustments	—		—		—		—		(20)		—		(20)
Charge-offs	(43,774)		(21,090)		(74)		(61)		(24,218)		(398)		(89,615)
Recoveries	2,078		151		165		15		8,667		68		11,144
Provision for credit losses - Other	38,885		16,587		270		(4,041)		16,245		443		68,389
Provision for credit losses - Day 1 on non-PCD assets acquired during the period	2,967		10,540		1,344		638		—		58		15,547
Initial allowance for credit losses recognized on PCD assets acquired during the period	1,838		1,103		2		61		—		—		3,004


Allowance for credit losses at period end	$	171,598	$	231,144	$	8,823	$	9,745	$	13,743	$	661	$	435,714


Nine months ended September 30, 2023			Commercial Real Estate		Home Equity		Residential Real Estate		Premium Finance Receivables		Consumer and Other		Total Loans
(In thousands)	Commercial

Allowance for credit losses at beginning of period	$	142,769	$	184,352	$	7,573	$	11,585	$	10,671	$	498	$	357,448
Cumulative effect adjustment from the adoption of ASU 2016-13	111		1,356		(33)		(692)		—		(1)		741
Other adjustments	—		—		—		—		(15)		—		(15)
Charge-offs	(10,599)		(9,842)		(227)		(78)		(15,151)		(447)		(36,344)
Recoveries	2,059		368		105		11		3,119		69		5,731
Provision for credit losses	17,148		39,484		(338)		1,833		13,196		266		71,589
Allowance for credit losses at period end	$	151,488	$	215,718	$	7,080	$	12,659	$	11,820	$	385	$	399,150

For the three and nine months ended September 30, 2024, the Company recognized approximately $22.3 million and $83.9 million of provision for credit losses, respectively, related to loans and lending agreements, which includes $15.5 million of Day 1 provision related to the acquisition of Macatawa. The provision for each period was primarily the result of losses experienced in the Commercial, Commercial Real Estate and Premium Finance Receivables portfolios along with growth across various segments, which was offset by improved macroeconomic forecasts related to Baa Credit Spread and CRE Price Index. Uncertainties remain regarding expected economic performance and macroeconomic forecasts utilized in the measurement of the allowance for credit losses as of September 30, 2024. Net charge-offs in the three and nine month periods ended September 30, 2024, totaled $26.7 million and $78.5 million, respectively.

Held-to-maturity debt securities

The allowance for credit losses on the Company’s held-to-maturity debt securities is presented as a reduction to the amortized cost basis of held-to-maturity securities on the Company's Consolidated Statements of Condition. For the three and nine month

period ended September 30, 2024, the Company recognized approximately $(12,000) and $132,000, respectively, of provision for credit losses related to held-to-maturity securities. At September 30, 2024, the Company did not identify any held-to-maturity debt securities within its portfolio that would require a charge-off.

Loan Modifications to Borrowers Experiencing Financial Difficulties

The Company’s approach to restructuring or modifying loans is built on its credit risk rating system, which requires credit management personnel to assign a credit risk rating to each loan. In each case, the loan officer is responsible for recommending a credit risk rating for each loan and ensuring the credit risk ratings are appropriate. These credit risk ratings are then reviewed and approved by the bank’s chief credit officer and/or concurrence credit officer. Credit risk ratings are determined by evaluating a number of factors, including a borrower’s financial strength, cash flow coverage, collateral protection and guarantees. The Company’s credit risk rating scale is one through ten with higher scores indicating higher risk. In the case of loans rated six or worse following modification, the Company’s Managed Assets Division evaluates the loan and the credit risk rating and determines that the loan has been restructured to be reasonably assured of repayment and of performance according to the modified terms and is supported by a current, well-documented credit assessment of the borrower’s financial condition and prospects for repayment under the revised terms. Based on the Company’s credit risk rating system, it considers that borrowers whose credit risk rating is 5 or better are not experiencing financial difficulties.

Restructurings may arise when, due to financial difficulties experienced by the borrower, the Company obtains through physical possession one or more collateral assets in satisfaction of all or part of an existing credit. Once possession is obtained, the Company reclassifies the appropriate portion of the remaining balance of the credit from loans to other real estate owned (“OREO”), which is included within other assets in the Consolidated Statements of Condition. For any residential real estate property collateralizing a consumer mortgage loan, the Company is considered to possess the related collateral only if legal title is obtained upon completion of foreclosure, or the borrower conveys all interest in the residential real estate property to the Company through completion of a deed in lieu of foreclosure or similar legal agreement. At September 30, 2024, the Company had no foreclosed residential real estate properties included within OREO. Further, the recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $40.4 million and $55.1 million at September 30, 2024 and 2023, respectively.

The tables below presents a summary of the period-end balance of loans to borrowers experiencing financial difficulties during the three and nine months ended September 30, 2024 and 2023:


Three Months Ended September 30, 2024 (Dollars in thousands)	Total		Percentage of Total Class of Loan		Extension of Term		Reduction of Interest Rate		Interest Only Payments		Delay in Contractual Payments		Extension of Term and Reduction of Interest Rate

Commercial
Commercial, industrial and other	$	1,469	0.0	%	$	1,240	$	42	$	17	$	—	$	170


Commercial real estate

Non-construction	192		0.0		192		—		—		—		—


Home equity	—		—		—		—		—		—		—
Residential real estate	—		—		—		—		—		—		—
Premium Finance Receivables
Property and casualty insurance loans	1,548		0.0		30		1,457		—		—		61
Total loans	$	3,209	0.0	%	$	1,462	$	1,499	$	17	$	—	$	231


			Weighted Average Magnitude of Modifications:
Three Months Ended September 30, 2024 (Dollars in thousands)	Total		Duration of Extension of Term (months)		Reduction of Interest Rate (bps)	Duration of Delay in Contractual Payments (months)

Commercial
Commercial, industrial and other	$	1,469	27		—	—


Commercial real estate

Non-construction	192		6		—	—

Home equity	—		$	—	—	—
Residential real estate	—		$	—	—	—
Premium finance receivables
Property and casualty insurance loans	1,548		4		—	—
Total loans	$	3,209	9		—	—


Three Months Ended September 30, 2023 (Dollars in thousands)	Total		Percentage of Total Class of Loan		Extension of Term		Reduction of Interest Rate		Delay in Contractual Payments		Extension of Term and Reduction of Interest Rate

Commercial
Commercial, industrial and other	$	1,256	0.0	%	$	1,256	$	—	$	—	$	—
Commercial real estate

Non-construction	—		—		—		—		—		—
Home equity	—		—		—		—		—		—
Residential real estate	141		0.0		141		—		—		—
Premium finance receivables
Property and casualty insurance loans	40		0.0		40		—		—		—
Total loans	$	1,437	0.0	%	$	1,437	$	—	$	—	$	—


			Weighted Average Magnitude of Modifications:
Three Months Ended September 30, 2023 (Dollars in thousands)	Total		Duration of Extension of Term (months)	Reduction of Interest Rate (bps)	Duration of Delay in Contractual Payments (months)

Commercial
Commercial, industrial and other	$	1,256	16	—	—
Commercial real estate

Non-construction	—		—	—	—
Home equity	—		—	—	—
Residential real estate	141		14	—	—
Premium finance receivables
Property and casualty insurance loans	40		2	—	—
Total loans	$	1,437	16	—	—


Nine Months Ended September 30, 2024 (Dollars in thousands)	Total (1)		Percentage of Total Class of Loan		Extension of Term (1)		Reduction of Interest Rate (1)		Interest Only Payments		Delay in Contractual Payments (1)		Extension of Term and Reduction of Interest Rate (1)

Commercial
Commercial, industrial and other	$	4,687	0.0	%	$	4,195	$	42	$	17	$	97	$	336


Commercial real estate
Non-Construction	1,662		0.0		486		—		319		857		—







Home equity	89		0.0		89		—		—		—		—
Residential real estate	282		0.0		114		168		—		—		—
Premium finance receivables
Property and casualty insurance loans	1,554		0.0		33		1,460		—		—		61
Total loans	$	8,274	0.0		$	4,917	$	1,670	$	336	$	954	$	397


			Weighted Average Magnitude of Modifications:
Nine Months Ended September 30, 2024 (Dollars in thousands)	Total		Duration of Extension of Term (months)	Reduction of Interest Rate (bps)	Duration of Delay in Contractual Payments (months)

Commercial
Commercial, industrial and other	$	4,687	35	113	34
Commercial real estate

Non-construction	1,662		29	—	16
Home equity	89		12	—	—
Residential real estate	282		19	201	—
Premium finance receivables
Property and casualty insurance loans	1,554		6	86	—
Total loans	$	8,274	9	156	18


Nine Months Ended September 30, 2023 (Dollars in thousands)	Total		Percentage of Total Class of Loan		Extension of Term		Reduction of Interest Rate		Delay in Contractual Payments		Extension of Term and Reduction of Interest Rate

Commercial
Commercial, industrial and other	$	39,153	0.3	%	$	3,194	$	221	$	35,265	$	473
Commercial real estate

Non-construction	5,709		0.1		467		827		39		4,376
Home equity	203		0.1		203		—		—		—
Residential real estate	2,113		0.1		1,537		271		—		305
Premium finance receivables
Property and casualty insurance loans	51		0.0		43		—		—		8
Total loans	$	47,229	0.1	%	$	5,444	$	1,319	$	35,304	$	5,162


			Weighted Average Magnitude of Modifications:
Nine Months Ended September 30, 2023 (Dollars in thousands)	Total		Duration of Extension of Term (months)	Reduction of Interest Rate (bps)	Duration of Delay in Contractual Payments (months)

Commercial
Commercial, industrial and other	$	39,153	15	108	16
Commercial real estate

Non-construction	5,709		40	232	101
Home equity	203		12	—	—
Residential real estate	2,113		54	284	—
Premium finance receivables
Property and casualty insurance loans	51		2	50	—
Total loans	$	47,229	33	223	17

The Company had commitments of $8.6 million and $45.0 million as of September 30, 2024 and September 30, 2023, respectively, to lend additional funds to borrowers experiencing financial difficulty and for whom the Company has modified the terms of loans in the form of principal forgiveness, an interest rate reduction, an other-than insignificant payment delay or a term extension during the periods presented.

The following table presents a summary of all modified loans for borrowers experiencing financial difficulties and such loans that were in payment default under the restructured terms during the respective periods below:


(Dollars in thousands)	For the Twelve Months Ended September 30, 2024		Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024		Nine Months Ended September 30, 2023		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
	Total		Payments in Default (1)		Payments in Default (1)		Total		Payments in Default (1)		Payments in Default (1)
Commercial
Commercial, industrial and other	$	6,757	$	42	$	1,826	$	39,153	$	18,727	$	18,749
Commercial real estate
Construction and development	2,504		—		—		—		—		—
Non-construction	2,933		—		923		5,709		95		923
Home equity	588		—		203		203		203		203
Residential real estate	282		—		541		2,113		817		902
Premium finance receivables
Property and casualty insurance loans	1,632		47		61		51		40		40
Total loans	$	14,696	$	89	$	3,554	$	47,229	$	19,882	$	20,817

(1)Modified loans considered to be in payment default are over 30 days past due subsequent to the restructuring.