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Loans and Allowance for Credit Losses on Loans HFI

9 Months Ended

Sep. 30, 2025

Loans and Allowance for Credit Losses on Loans HFI

Loans and allowance for credit losses on loans HFI

Loans outstanding as of September 30, 2025 and December 31, 2024, by class of financing receivable are as follows:


	September 30,		December 31,

	2025		2024
Commercial and industrial	$	2,155,105	$	1,691,213
Construction	1,195,392		1,087,732
Residential real estate:
1-to-4 family mortgage	1,852,626		1,616,754
Residential line of credit	707,303		602,475
Multi-family mortgage	736,424		653,769
Commercial real estate:
Owner-occupied	2,124,920		1,357,568
Non-owner occupied	2,890,233		2,099,129
Consumer and other	635,597		493,744
Gross loans	12,297,600		9,602,384
Less: Allowance for credit losses on loans HFI	(184,993)		(151,942)
Net loans	$	12,112,607	$	9,450,442

As of September 30, 2025 and December 31, 2024, $946,552 and $988,177, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,762,269 and $1,620,510, respectively, of qualifying commercial mortgage loans were pledged to the FHLB system securing advances against the Bank’s line of credit. Additionally, as of September 30, 2025 and December 31, 2024, qualifying commercial and industrial, construction and consumer loans, of $2,777,841 and $2,561,352, respectively, were pledged to the Federal Reserve under the Borrower-in-Custody program.

The amortized cost of loans HFI on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the consolidated balance sheets. As of September 30, 2025 and December 31, 2024, accrued interest receivable on loans HFI amounted to $52,549 and $40,970, respectively.

Credit Quality - Commercial Type Loans

The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics may be evaluated individually.

The Company uses the following definitions for risk ratings:


			Pass.			Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.




			Special Mention.			Loans rated Special Mention are those that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk.




			Classified.			Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.

Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.

The following tables present the credit quality of the Company’s commercial type loan portfolio as of September 30, 2025 and December 31, 2024 and the gross charge-offs for the nine months ended September 30, 2025 and the year ended December 31, 2024 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.





As of and for the nine months ended September 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	262,123	$	287,681	$	240,254	$	144,729	$	57,647	$	203,087	$	861,567	$	2,057,088
Special Mention	2,023		2,205		5,311		13,784		1,075		15,697		5,996		46,091
Classified	452		2,199		7,210		28,853		284		4,470		8,458		51,926

Total	264,598		292,085		252,775		187,366		59,006		223,254		876,021		2,155,105

Current-period gross charge-offs	—		—		54		—		—		2,413		604		3,071
Construction
Pass	251,643		233,754		77,666		260,663		114,563		179,489		91		1,117,869
Special Mention	—		1,067		3,304		17,698		10,129		4,162		—		36,360
Classified	—		153		2,916		18,284		243		19,567		—		41,163

Total	251,643		234,974		83,886		296,645		124,935		203,218		91		1,195,392

Current-period gross charge-offs	—		—		—		—		—		—		399		399
Residential real estate:

Multi-family mortgage
Pass	36,254		36,045		38,514		246,213		208,116		161,957		—		727,099
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		592		8,715		18		—		9,325

Total	36,254		36,045		38,514		246,805		216,831		161,975		—		736,424


Current-period gross charge-offs	—		—		—		—		—		—		—		—
Commercial real estate:
Owner occupied
Pass	258,439		320,426		216,259		355,833		291,000		561,544		80,743		2,084,244
Special Mention	—		408		4,491		1,369		6,229		14,691		290		27,478
Classified	—		—		427		7,938		120		4,713		—		13,198

Total	258,439		320,834		221,177		365,140		297,349		580,948		81,033		2,124,920

Current-period gross charge-offs	—		—		—		—		—		17		—		17
Non-owner occupied
Pass	194,723		238,750		126,491		678,639		536,518		846,729		230,228		2,852,078
Special Mention	—		—		4,783		8,410		4,559		10,054		—		27,806
Classified	—		—		1,008		—		4,594		4,747		—		10,349

Total	194,723		238,750		132,282		687,049		545,671		861,530		230,228		2,890,233




Current-period gross charge-offs	—		—		—		—		—		—		—		—
Total commercial loan types
Pass	1,003,182		1,116,656		699,184		1,686,077		1,207,844		1,952,806		1,172,629		8,838,378
Special Mention	2,023		3,680		17,889		41,261		21,992		44,604		6,286		137,735
Classified	452		2,352		11,561		55,667		13,956		33,515		8,458		125,961

Total	$	1,005,657	$	1,122,688	$	728,634	$	1,783,005	$	1,243,792	$	2,030,925	$	1,187,373	$	9,102,074
Current-period gross charge-offs	$	—	$	—	$	54	$	—	$	—	$	2,430	$	1,003	$	3,487





As of and for the year ended December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	194,185	$	182,677	$	130,148	$	56,460	$	29,735	$	104,236	$	909,398	$	1,606,839
Special Mention	2,684		2,425		7,609		277		285		2,015		24,345		39,640
Classified	—		175		19,125		4,424		1,659		6,201		13,150		44,734

Total	196,869		185,277		156,882		61,161		31,679		112,452		946,893		1,691,213
Current-period gross charge-offs	—		116		950		506		1,234		7		8,267		11,080

Construction
Pass	190,058		116,122		349,716		99,225		27,616		54,099		199,596		1,036,432
Special Mention	156		87		15,432		389		10		576		—		16,650
Classified	—		—		7,314		290		8,335		—		18,711		34,650

Total	190,214		116,209		372,462		99,904		35,961		54,675		218,307		1,087,732
Current-period gross charge-offs	—		—		122		—		—		—		—		122

Residential real estate:

Multi-family mortgage
Pass	40,076		3,800		232,415		223,076		51,948		69,652		21,883		642,850
Special Mention	—		—		—		—		—		—		—		—
Classified	—		—		—		9,919		—		1,000		—		10,919

Total	40,076		3,800		232,415		232,995		51,948		70,652		21,883		653,769
Current-period gross charge-offs	—		—		—		—		—		—		—		—


Commercial real estate:
Owner occupied
Pass	185,416		103,060		247,049		215,798		102,580		396,288		84,226		1,334,417
Special Mention	—		—		1,370		2,582		—		6,133		—		10,085
Classified	—		—		6,324		235		61		5,371		1,075		13,066

Total	185,416		103,060		254,743		218,615		102,641		407,792		85,301		1,357,568
Current-period gross charge-offs	—		—		—		—		—		—		—		—

Non-owner occupied
Pass	198,591		36,027		526,417		445,598		111,943		689,158		58,255		2,065,989
Special Mention	—		4,836		—		1,527		—		19,311		—		25,674
Classified	—		—		—		136		—		7,330		—		7,466

Total	198,591		40,863		526,417		447,261		111,943		715,799		58,255		2,099,129
Current-period gross charge-offs	—		—		—		—		—		—		—		—

Total commercial loan types
Pass	808,326		441,686		1,485,745		1,040,157		323,822		1,313,433		1,273,358		6,686,527
Special Mention	2,840		7,348		24,411		4,775		295		28,035		24,345		92,049
Classified	—		175		32,763		15,004		10,055		19,902		32,936		110,835
Total	$	811,166	$	449,209	$	1,542,919	$	1,059,936	$	334,172	$	1,361,370	$	1,330,639	$	6,889,411
Current-period gross charge-offs	—		116		1,072		506		1,234		7		8,267		11,202

Credit Quality - Consumer Type Loans

For consumer and residential loan classes, the Company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest.

The following tables present the credit quality by classification of the Company’s consumer type loan portfolio as of September 30, 2025 and December 31, 2024 and the gross charge-offs for the nine months ended September 30, 2025 and the year ended December 31, 2024 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.





As of and for the nine months ended September 30, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans Amortized Cost Basis		Total





Residential real estate:
1-to-4 family mortgage
Performing	$	271,131	$	229,222	$	169,347	$	430,061	$	347,851	$	375,569	$	—	$	1,823,181
Nonperforming	330		920		2,378		8,800		5,974		11,043		—		29,445
Total	271,461		230,142		171,725		438,861		353,825		386,612		—		1,852,626
Current-period gross charge-offs	—		—		4		—		—		754		—		758
Residential line of credit
Performing	—		—		—		—		—		—		704,961		704,961
Nonperforming	—		—		—		—		—		—		2,342		2,342
Total	—		—		—		—		—		—		707,303		707,303
Current-period gross charge-offs	—		—		—		—		—		—		—		—
Consumer and other
Performing	134,005		159,677		85,141		72,047		31,276		133,392		355		615,893
Nonperforming	523		3,674		3,733		1,815		3,083		6,876		—		19,704
Total	134,528		163,351		88,874		73,862		34,359		140,268		355		635,597
Current-period gross charge-offs	1,434		118		76		104		86		989		4		2,811
Total consumer type loans
Performing	405,136		388,899		254,488		502,108		379,127		508,961		705,316		3,144,035
Nonperforming	853		4,594		6,111		10,615		9,057		17,919		2,342		51,491
Total	$	405,989	$	393,493	$	260,599	$	512,723	$	388,184	$	526,880	$	707,658	$	3,195,526
Current-period gross charge-offs	$	1,434	$	118	$	80	$	104	$	86	$	1,743	$	4	$	3,569





As of and for the year ended December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Total





Residential real estate:
1-to-4 family mortgage
Performing	$	223,520	$	165,395	$	443,372	$	360,188	$	129,674	$	266,661	$	—	$	1,588,810
Nonperforming	27		941		7,254		6,357		4,192		9,173		—		27,944
Total	223,547		166,336		450,626		366,545		133,866		275,834		—		1,616,754
Prior-period gross charge-offs	10		54		150		130		67		28		—		439
Residential line of credit
Performing	—		—		—		—		—		—		600,581		600,581
Nonperforming	—		—		—		—		—		—		1,894		1,894
Total	—		—		—		—		—		—		602,475		602,475
Prior-period gross charge-offs	—		—		—		—		—		—		73		73
Consumer and other
Performing	139,684		93,817		76,286		35,507		29,387		102,233		652		477,566
Nonperforming	1,300		1,749		1,686		3,139		2,548		5,755		1		16,178
Total	140,984		95,566		77,972		38,646		31,935		107,988		653		493,744
Prior-period gross charge-offs	1,593		511		302		278		69		298		—		3,051
Total consumer type loans
Performing	363,204		259,212		519,658		395,695		159,061		368,894		601,233		2,666,957
Nonperforming	1,327		2,690		8,940		9,496		6,740		14,928		1,895		46,016
Total	$	364,531	$	261,902	$	528,598	$	405,191	$	165,801	$	383,822	$	603,128	$	2,712,973
Prior-period gross charge-offs	1,603		565		452		408		136		326		73		3,563

Nonaccrual and Past Due Loans

The following tables represent an analysis of the aging by class of financing receivable as of September 30, 2025 and December 31, 2024:


September 30, 2025	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	975	$	20	$	6,906	$	2,147,204	$	2,155,105
Construction	5,132		415		30,953		1,158,892		1,195,392
Residential real estate:
1-to-4 family mortgage	24,132		18,159		11,286		1,799,049		1,852,626
Residential line of credit	1,930		496		1,846		703,031		707,303
Multi-family mortgage	—		—		9,325		727,099		736,424
Commercial real estate:
Owner occupied	1,875		361		10,639		2,112,045		2,124,920
Non-owner occupied	3,676		—		5,649		2,880,908		2,890,233
Consumer and other	16,909		6,860		12,844		598,984		635,597
Total	$	54,629	$	26,311	$	89,448	$	12,127,212	$	12,297,600


December 31, 2024	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	1,204	$	730	$	9,661	$	1,679,618	$	1,691,213
Construction	3,288		538		10,915		1,072,991		1,087,732
Residential real estate:
1-to-4 family mortgage	24,376		15,319		12,625		1,564,434		1,616,754
Residential line of credit	2,302		357		1,537		598,279		602,475
Multi-family mortgage	979		—		21		652,769		653,769
Commercial real estate:
Owner occupied	1,996		94		9,551		1,345,927		1,357,568
Non-owner occupied	—		3,512		2,667		2,092,950		2,099,129
Consumer and other	13,710		3,797		12,381		463,856		493,744
Total	$	47,855	$	24,347	$	59,358	$	9,470,824	$	9,602,384

The following tables provide the amortized cost basis of loans on nonaccrual status, as well as any related allowance as of September 30, 2025 and December 31, 2024 by class of financing receivable.



September 30, 2025	Nonaccrual with no related allowance		Nonaccrual with related allowance
Commercial and industrial	$	1,173	$	5,733
Construction	13,449		17,504
Residential real estate:
1-to-4 family mortgage	—		11,286
Residential line of credit	—		1,846
Multi-family mortgage	8,715		610
Commercial real estate:
Owner occupied	7,137		3,502
Non-owner occupied	5,414		235
Consumer and other	—		12,844
Total	$	35,888	$	53,560


December 31, 2024	Nonaccrual with no related allowance		Nonaccrual with related allowance

Commercial and industrial	$	5,294	$	4,367
Construction	1,653		9,262
Residential real estate:
1-to-4 family mortgage	1,562		11,063
Residential line of credit	148		1,389
Multi-family mortgage	—		21
Commercial real estate:
Owner occupied	6,415		3,136
Non-owner occupied	2,224		443
Consumer and other	—		12,381
Total	$	17,296	$	42,062

The following presents interest income recognized on nonaccrual loans for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Commercial and industrial	$	179	$	46	$	209	$	615
Construction	365		308		867		448
Residential real estate:
1-to-4 family mortgage	70		6		76		40
Residential line of credit	65		1		96		40
Multi-family mortgage	5		—		171		1
Commercial real estate:
Owner occupied	—		—		8		124
Non-owner occupied	8		—		120		89
Consumer and other	145		—		204		—
Total	$	837	$	361	$	1,751	$	1,357

Accrued interest receivable written off as an adjustment to interest income amounted to $549 and $1,890 for the three and nine months ended September 30, 2025, respectively, and $128 and $536 for the three and nine months ended September 30, 2024, respectively.

Loan Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company may make certain modifications of loans to borrowers experiencing financial difficulty. These modifications may be in the form of an interest rate reduction, a term extension, principal forgiveness, payment deferral or a combination thereof. Upon the Company’s determination that a modified loan has subsequently been deemed uncollectible, the portion of the loan deemed uncollectible is charged off against the allowance for credit losses on loans HFI. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Tables within this section exclude loans that were paid off or are otherwise no longer in the loan portfolio as of period end.

The following table presents the amortized cost of FDM loans as of September 30, 2025 and 2024 by type of concession granted that were modified during the three and nine months ended September 30, 2025 and 2024.


	Term Extension		Payment deferral		Interest Rate Reduction		Combination(1)		Total		% of total class of financing receivables
Three Months Ended September 30, 2025
Commercial and industrial	$	6	$	—	$	—	$	—	$	6	—	%
Construction	787		—		—		—		787		0.1	%




Commercial real estate:
Owner occupied	244		—		—		—		244		—	%
Non-owner occupied	—		4,594		—		—		4,594		0.2	%

Total	$	1,037	$	4,594	$	—	$	—	$	5,631	—	%

Nine Months Ended September 30, 2025
Commercial and industrial	$	152	$	—	$	—	$	—	$	152	—	%
Construction	1,326		—		142		3,305		4,773		0.4	%
Residential real estate:
1-to-4 family mortgage	461		1,832		—		—		2,293		0.1	%


Commercial real estate:
Owner occupied	244		—		—		—		244		—	%
Non-owner occupied	—		4,594		—		—		4,594		0.2	%
Consumer and other	—		—		—		63		63		—	%
Total	$	2,183	$	6,426	$	142	$	3,368	$	12,119	0.1	%

Three Months Ended September 30, 2024
Commercial and industrial	$	—	$	—	$	—	$	7,038	$	7,038	0.4	%
Construction	—		—		—		1,713		1,713		0.2	%








Total	$	—	$	—	$	—	$	8,751	$	8,751	0.1	%

Nine Months Ended September 30, 2024
Commercial and industrial	$	—	$	—	$	—	$	7,038	$	7,038	0.4	%
Construction	—		—		—		15,908		15,908		1.5	%







Consumer and other	38		—		—		97		135		—	%
Total	$	38	$	—	$	—	$	23,043	$	23,081	0.2	%
(1) Includes FDM loans modified with a combination of term extension, payment deferral and interest rate reduction modifications.

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


Three Months Ended September 30, 2025	Weighted average term extension (in months)	Weighted average payment deferral (in months)	Weighted average interest rate reduction
Commercial and industrial	13	—	—%
Construction	2	—	—%




Commercial real estate:
Owner occupied	3	—	—%
Non-owner occupied	—	7	—%


Nine months ended September 30, 2025	Weighted average term extension (in months)	Weighted average payment deferral (in months)	Weighted average interest rate reduction
Commercial and industrial	35	—	—%
Construction	4	4	2.50%
Residential real estate:
1-to-4 family mortgage	300	4	—%


Commercial real estate:
Owner occupied	3	—	—%
Non-owner occupied	—	7	—
Consumer and other	13	—	2.00%


Three Months Ended September 30, 2024	Weighted average term extension (in months)	Weighted average payment deferral (in months)	Weighted average interest rate reduction
Commercial and industrial	12	12	—%
Construction	360	5	0.10%


Nine Months Ended September 30, 2024	Weighted average term extension (in months)	Weighted average payment deferral (in months)	Weighted average interest rate reduction
Commercial and industrial	12	12	—%
Construction	44	3	0.10%







Consumer and other	25	—	1.49%

For FDM loans, a subsequent payment default is defined as the earlier of the FDM loans being placed on nonaccrual status or reaching 30 days past due with respect to principal and/or interest payments. The following tables depict loans defaulted that were previously modified in the prior 12 months:


Three Months Ended September 30, 2025	Term Extension		Payment deferral		Interest Rate Reduction		Combination(1)


Residential real estate:
1-to-4 family mortgage	$	—	$	—	$	—	$	313







(1) Includes FDM loans modified with a combination of term extension, payment deferral and interest rate reduction modifications.


Nine Months Ended September 30, 2025	Term Extension		Payment deferral		Interest Rate Reduction		Combination(1)

Construction	$	—	$	—	$	142	$	—
Residential real estate:
1-to-4 family mortgage	461		—		—		313





Consumer and other	—		—		—		63
(1) Includes FDM loans modified with a combination of term extension, payment deferral and interest rate reduction modifications.

During the three and nine months ended September 30, 2024, consumer and other loans of $32 defaulted that were previously modified in the prior 12 months by receiving a term extension. At September 30, 2025 and December 31, 2024, the Company did not have any material commitments to lend additional funds to borrowers whose loans were classified as a FDM loan.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The tables below depict the performance of loans HFI as of September 30, 2025 and 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months.


September 30, 2025	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans(1)		Loans current on payments and accruing interest		Total
Commercial and industrial	$	—	$	—	$	—	$	152	$	152
Construction	—		—		3,305		1,468		4,773
Residential real estate:
1-to-4 family mortgage	313		—		1,464		1,193		2,970
Residential line of credit	—		—		—		29		29

Commercial real estate:
Owner-occupied	—		—		244		—		244
Non-owner occupied	—		—		1,031		3,562		4,593
Consumer and other	—		63		—		—		63
Total	$	313	$	63	$	6,044	$	6,404	$	12,824

(1) Loans were on nonaccrual when modified and subsequently classified as FDM.


September 30, 2024	30-89 days past due and accruing interest		90 days or more and accruing interest		Nonaccrual loans(1)		Loans current on payments and accruing interest		Total
Commercial and industrial	$	—	$	—	$	7,038	$	—	$	7,038
Construction	—		—		1,713		14,195		15,908
Residential real estate:
1-to-4 family mortgage	—		—		22		—		22





Consumer and other	32		—		—		104		136
Total	$	32	$	—	$	8,773	$	14,299	$	23,104

(1) Loans were on nonaccrual when modified and subsequently classified as FDM.

Collateral-Dependent Loans

For collateral-dependent loans, or those loans for which repayment is expected to be provided substantially through the operation or sale of collateral, where the borrower is also experiencing financial difficulty, the following tables present the loans by class of financing receivable.


	September 30, 2025
	Type of Collateral
	Real Estate		Land		Business Assets		Total
Commercial and industrial	$	1,303	$	—	$	23,630	$	24,933
Construction	30,001		1,653		—		31,654
Residential real estate:
1-to-4 family mortgage	3,925		—		—		3,925

Multi-family mortgage	8,715		—		—		8,715
Commercial real estate:
Owner occupied	1,096		6,041		1,664		8,801
Non-owner occupied	16,048		—		—		16,048

Total	$	61,088	$	7,694	$	25,294	$	94,076


	December 31, 2024
	Type of Collateral
	Real Estate		Land		Business Assets		Total
Commercial and industrial	$	—	$	—	$	8,492	$	8,492
Construction	22,047		1,653		—		23,700
Residential real estate:
1-to-4 family mortgage	1,843		—		—		1,843
Residential line of credit	148		—		—		148
Multi-family mortgage	9,919		—		—		9,919
Commercial real estate:
Owner occupied	—		6,415		—		6,415
Non-owner occupied	6,886		—		—		6,886

Total	$	40,843	$	8,068	$	8,492	$	57,403

Allowance for Credit Losses on Loans HFI

Beginning on June 30, 2025, the Company made changes to the estimation techniques and certain related inputs and assumptions used in estimating its expected credit losses on its loan portfolios and unfunded commitments. Prior to the changes, the Company primarily used a lifetime loss rate model to determine the allowance for credit losses. Following a periodic review of its credit loss estimation process, the Company concluded that a discounted cash flow estimation technique, adjusted for current conditions and reasonable and supportable forecasts, is a more preferred approach for estimating expected credit losses of its loan segments, except consumer and other loans, which utilize the weighted average remaining maturity loss rate technique. The applicable CECL estimation technique is used to estimate the expected credit loss for off-balance sheet commitments for each loan segment. As part of the updates to estimation techniques, management updated certain related inputs and assumptions used to estimate the expected credit loss. The Company determined that the use of the updated estimate techniques and related inputs and assumptions enhances the transparency, accuracy and relevance of information relating to its allowance for credit losses through the application of data and calculations more clearly calibrated to the Company’s historical experience, the nature of its loan portfolio and unfunded commitments, and expectations for future economic conditions and corresponding expected credit losses.

The changes in the estimation techniques and certain related inputs and assumptions used in the determination of the Company’s expected credit losses on its loan portfolio and unfunded commitments did not have a material impact to the Company’s operating results and financial condition. The provision for credit losses for the nine months ended September 30, 2025, reflects this change in estimate and is accounted for prospectively after the transition date. Refer to Note 1, “Basis of presentation” in the consolidated financial statements for further specific information on the changes.

The Company performed evaluations within its updated qualitative framework, assessing for information not otherwise captured in model loss estimation process. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations.

As a result of the Southern States merger, the Company recorded a total increase of $32,641 in the allowance for credit losses on loans as of the July 1, 2025 merger date. This included $7,518 of allowance for credit losses on acquired PCD loans, which was established through acquisition accounting adjustments using the gross-up method, whereby the initial allowance is added to the fair value of the loan to determine its amortized cost. Additionally, $25,123 of allowance for credit losses was established on acquired non-PCD loans through provision expense recognized in the post-combination financial statements for the three and nine months ended September 30, 2025. See Note 2, “Mergers and acquisitions” for additional details related to allowance associated with acquired loan portfolio.

The following tables provide the changes in the allowance for credit losses on loans HFI by class of financing receivable for the three and nine months ended September 30, 2025 and 2024:


	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi-family residential mortgage		Commercial real estate owner occupied			Commercial real estate non-owner occupied		Consumer and other		Total
Three Months Ended September 30, 2025
Beginning balance - June 30, 2025	$	20,271	$	21,848	$	30,262	$	8,671	$	10,894	$	11,939		$	26,303	$	18,760	$	148,948
Initial allowance on loans purchased with deteriorated credit quality	1,959		298		64		31		159		1,515			3,418		74		7,518
Loans charged off	(100)		(399)		(322)		—		—		—			—		(888)		(1,709)
Recoveries of loans previously charged-off	12		—		6		11		—		4			—		246		279

Provision for credit losses on loans HFI	3,933		6,110		3,049		1,745		762		6,902		0	4,352		3,104		29,957
Ending balance - September 30, 2025	$	26,075	$	27,857	$	33,059	$	10,458	$	11,815	$	20,360		$	34,073	$	21,296	$	184,993
Nine Months Ended September 30, 2025
Beginning balance - December 31, 2024	$	16,667	$	31,698	$	25,340	$	10,952	$	10,512	$	11,993		$	25,531	$	19,249	$	151,942
Initial allowance on loans purchased with deteriorated credit quality	1,959		298		64		31		159		1,515			3,418		74		7,518
Loans charged-off	(3,071)		(399)		(758)		—		—		(17)			—		(2,811)		(7,056)
Recoveries of loans previously charged-off	227		—		26		12		—		34			529		1,000		1,828
Impact of change in accounting estimate for current expected credit losses	3,504		(4,705)		2,717		(3,428)		258		(1,074)			(1,747)		(2,373)		(6,848)
Provision for credit losses on loans HFI	6,789		965		5,670		2,891		886		7,909			6,342		6,157		37,609
Ending balance - September 30, 2025	$	26,075	$	27,857	$	33,059	$	10,458	$	11,815	$	20,360		$	34,073	$	21,296	$	184,993


	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi-family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Three Months Ended September 30, 2024
Beginning balance - June 30, 2024	$	22,530	$	34,170	$	25,631	$	10,097	$	8,810	$	11,312	$	24,543	$	17,962	$	155,055
Loans charged off	(90)		—		(2)		(53)		—		—		—		(770)		(915)
Recoveries of loans previously charged-off	23		—		9		18		—		12		—		202		264
Provision for (reversal of) credit losses on loans HFI	1,670		(3,612)		341		662		834		243		98		1,620		1,856
Ending balance - September 30, 2024	$	24,133	$	30,558	$	25,979	$	10,724	$	9,644	$	11,567	$	24,641	$	19,014	$	156,260
Nine Months Ended September 30, 2024
Beginning balance - December 31, 2023	$	19,599	$	35,372	$	26,505	$	9,468	$	8,842	$	10,653	$	22,965	$	16,922	$	150,326
Loans charged-off	(159)		(92)		(295)		(73)		—		—		—		(2,136)		(2,755)
Recoveries of loans previously charged-off	57		—		75		18		—		240		—		651		1,041
Provision for (reversal of) credit losses on loans HFI	4,636		(4,722)		(306)		1,311		802		674		1,676		3,577		7,648
Ending balance - September 30, 2024	$	24,133	$	30,558	$	25,979	$	10,724	$	9,644	$	11,567	$	24,641	$	19,014	$	156,260