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Loans, Leases and Allowance
 9 Months Ended
Sep. 30, 2025
Receivables [Abstract]  
Loans, Leases and Allowance Loans, Leases and Allowance
The following table shows the composition of the loan and lease portfolio at September 30, 2025 and December 31, 2024:
September 30,
2025		December 31,
2024
Commercial mortgage$420,680 $371,705 
Commercial and industrial138,333 126,367 
Construction and development67,446 132,570 
Multi-family216,982 185,864 
Residential mortgage166,594 172,644 
Home equity lines of credit18,816 16,826 
Direct financing leases146,413 148,102 
Consumer19,914 21,218 
1,195,178 1,175,296 
Less
Allowance for credit losses on loans and leases16,365 15,791 
Deferred loan fees581 626 
$1,178,232 $1,158,879 

The Company rates all loans and leases by credit quality using the following designations:
Grade 1 – Exceptional
Exceptional loans and leases are top-quality loans to individuals whose financial credentials are well known to the Company. These loans and leases have excellent sources of repayment, are well documented and/or virtually free of risk (i.e., CD secured loans).
Grade 2 – Quality Loans and Leases
These loans and leases have excellent sources of repayment with no identifiable risk of collection, and they conform in all respects to Company policy and IDFI and FDIC regulations. Documentation exceptions are minimal or are in the process of being corrected and not of a type that could subsequently expose the Company to risk of loss.
Grade 3 – Acceptable Loans
This category is for “average” quality loans and leases. These loans and leases have adequate sources of repayment with little identifiable risk of collection and they conform to Company policy and IDFI/FDIC regulations.
Grade 4 – Acceptable but Monitored
Loans and leases in this category may have a greater than average risk due to financial weakness or uncertainty but do not appear to require classification as special mention or substandard loans. Loans and leases rated “4” need to be monitored on a regular basis to ascertain that the reasons for placing them in this category do not advance or worsen.
Grade 5 – Special Mention
Loans and leases in this category 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 lease or in the Company’s credit position at some future date. Special Mention loans and leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. This special mention rating is designed to identify a specific level of risk and concern about an asset’s quality. Although a special mention loan or lease has a higher probability of default than a pass rated loan or lease, its default is not imminent.
Grade 6 – Substandard
Loans and leases in this category are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Substandard loans and leases have a high probability of payment default, or they have other well-defined weaknesses. Such loans and leases have a distinct potential for loss; however, an individual loan’s or lease’s potential for loss does not have to be distinct for the loan or lease to be rated substandard.
The following are examples of situations that might cause a loan or lease to be graded a “6”:
•Cash flow deficiencies (losses) jeopardize future loan or lease payments.
•Sale of non-collateral assets has become a primary source of loan or lease repayment.
•The relationship has deteriorated to the point that sale of collateral is now the Company’s primary source of repayment, unless this was the original source of loan or lease repayment.
•The borrower is bankrupt or for any other reason future repayment is dependent on court action.
Grade 7 – Doubtful
A loan or lease classified as doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable. A doubtful loan or lease has a high probability of total or substantial loss. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Because of high probability of loss, nonaccrual accounting treatment will be required for doubtful loans and leases.
Grade 8 – Loss
Loans and leases classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan or lease even though partial recovery may be effected in the future.
No material changes have been made to the risk characteristics discussed above contained in the Company's 2024 Form 10-K.
The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category, payment activity, and origination year as of September 30, 2025 and rating category as of December 31, 2024:
20252024202320222021PriorRevolving loans amortized cost basisTotal
As of September 30, 2025:
Commercial mortgage
Pass$53,720 $31,812 $43,919 $81,884 $54,162 $110,444 $37,081 $413,022 
Substandard— — — — 7,658 — — 7,658 
Total Commercial mortgage53,720 31,812 43,919 81,884 61,820 110,444 37,081 420,680 
Current period gross charge-offs— — — — — — — — 
Commercial and industrial
Pass18,134 16,227 23,483 7,079 9,654 11,196 50,683 136,456 
Substandard— — — 207 — 32 1,638 1,877 
Total Commercial and industrial18,134 16,227 23,483 7,286 9,654 11,228 52,321 138,333 
Current period gross charge-offs— — — — 2 — — 2 
Construction and development
Pass20,185 22,079 10,860 1,526 6,763 110 — 61,523 
Special Mention— — 429 594 — — — 1,023 
Substandard— — — — — 4,900 — 4,900 
Total Construction and development20,185 22,079 11,289 2,120 6,763 5,010 — 67,446 
Current period gross charge-offs— — — — — — — — 
Multi-family
Pass18,630 18,748 9,126 66,430 46,604 23,892 26,352 209,782 
Special Mention— — — 2,362 1,382 — — 3,744 
Substandard— — — — — 3,456 — 3,456 
Total Multi-family18,630 18,748 9,126 68,792 47,986 27,348 26,352 216,982 
Current period gross charge-offs— — — — — — — — 
Residential mortgage
Pass14,666 16,926 30,488 25,482 25,417 49,362 2,819 165,160 
Substandard— — 107 — 447 880 — 1,434 
Total Residential mortgage14,666 16,926 30,595 25,482 25,864 50,242 2,819 166,594 
Current period gross charge-offs— — — — — — — — 
Home equity
Pass105 — 182 — 57 — 18,055 18,399 
Substandard— — — — — — 417 417 
Total Home equity lines of credit105 — 182 — 57 — 18,472 18,816 
Current period gross charge-offs— — — — — — — — 
Direct financing leases
Pass45,980 41,426 37,024 15,138 4,842 942 — 145,352 
Substandard— 129 66 136 61 — — 392 
Doubtful9 201 282 111 60 6 — 669 
Total Direct financing leases45,989 41,756 37,372 15,385 4,963 948 — 146,413 
Current period gross charge-offs— 171 817 326 234 17 — 1,565 
Consumer
Pass5,384 5,079 4,251 3,309 1,332 445 — 19,800 
Substandard— 2 29 39 38 6 — 114 
Total Consumer5,384 5,081 4,280 3,348 1,370 451 — 19,914 
Current period gross charge-offs42 17 39 31 9 23 — 161 
Total Loans and Leases$176,813 $152,629 $160,246 $204,297 $158,477 $205,671 $137,045 $1,195,178 
Total current period gross charge-offs$42 $188 $856 $357 $245 $40 $— $1,728 
20242023202220212020PriorRevolving loans amortized cost basisTotal
As of December 31, 2024:
Commercial mortgage
Pass$22,469 $40,634 $82,254 $65,852 $31,382 $90,763 $33,393 $366,747 
Substandard— — — 234 4,724 — — 4,958 
Total Commercial mortgage22,469 40,634 82,254 66,086 36,106 90,763 33,393 371,705 
Current period gross charge-offs— — — — — — — — 
Commercial and industrial
Pass18,197 28,998 9,866 11,111 2,703 9,648 44,026 124,549 
Substandard— — 282 — — 35 1,501 1,818 
Total Commercial and industrial18,197 28,998 10,148 11,111 2,703 9,683 45,527 126,367 
Current period gross charge-offs— — — — — 16 — 16 
Construction and development
Pass20,811 44,837 43,691 18,185 30 116 — 127,670 
Substandard— — — — — 4,900 — 4,900 
Total Construction and development20,811 44,837 43,691 18,185 30 5,016 — 132,570 
Current period gross charge-offs— — — — — — — — 
Multi-family
Pass7,252 3,789 61,936 50,178 6,195 24,845 26,751 180,946 
Special Mention— — — 1,461 3,457 — — 4,918 
Total Multi-family7,252 3,789 61,936 51,639 9,652 24,845 26,751 185,864 
Current period gross charge-offs— — — — — — — — 
Residential mortgage
Pass22,614 33,949 28,498 28,302 16,239 39,174 2,513 171,289 
Substandard— 35 — 450 — 870 — 1,355 
Total Residential mortgage22,614 33,984 28,498 28,752 16,239 40,044 2,513 172,644 
Current period gross charge-offs— — — — — 10 — 10 
Home equity
Pass18 198 — 57 — — 16,539 16,812 
Substandard— — — — — — 14 14 
Total Home equity lines of credit18 198 — 57 — — 16,553 16,826 
Current period gross charge-offs— — — — — — — — 
Direct financing leases
Pass53,286 53,601 25,447 11,381 3,336 329 — 147,380 
Substandard127 318 175 40 28 — — 688 
Doubtful— 9 — 7 18 — — 34 
Total Direct financing leases53,413 53,928 25,622 11,428 3,382 329 — 148,102 
Current period gross charge-offs— 741 592 325 72 1 — 1,731 
Consumer
Pass6,807 6,272 5,200 2,088 438 314 — 21,119 
Substandard— 3 47 49 — — — 99 
Total Consumer6,807 6,275 5,247 2,137 438 314 — 21,218 
Current period gross charge-offs47 89 114 32 — 3 — 285 
Total Loans and Leases$151,581 $212,643 $257,396 $189,395 $68,550 $170,994 $124,737 $1,175,296 
Total current period gross charge-offs$47 $830 $706 $357 $72 $30 $— $2,042 


For the three months ended September 30, 2025 and December 31, 2024, the Company did not have any revolving loans convert to term loans.
The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of September 30, 2025 and December 31, 2024:

September 30, 2025
Delinquent Loans and LeasesCurrentTotal
Portfolio
Loans and
Leases		Total Loans
and Leases
> 90 Days
Accruing
30-59 Days
Past Due		60-89 Days
Past Due		90 Days and
Over		Total Past
Due
Commercial mortgage$— $— $704 $704 $419,976 $420,680 $— 
Commercial and industrial— 81 — 81 138,252 138,333 — 
Construction and development— — 4,900 4,900 62,546 67,446 — 
Multi-family— — 2,362 2,362 214,620 216,982 2,362 
Residential mortgage874 344 1,432 2,650 163,944 166,594 1,357 
Home equity203 40 417 660 18,156 18,816 417 
Direct financing leases588 44 162 794 145,619 146,413 162 
Consumer170 38 114 322 19,592 19,914 114 
Totals$1,835 $547 $10,091 $12,473 $1,182,705 $1,195,178 $4,412 

December 31, 2024
Delinquent Loans and LeasesCurrentTotal
Portfolio
Loans and
Leases		Total Loans
and Leases
> 90 Days
Accruing
30-59 Days
Past Due		60-89 Days
Past Due		90 Days and
Over		Total Past
Due
Commercial mortgage$101 $216 $— $317 $371,388 $371,705 $— 
Commercial and industrial419 — — 419 125,948 126,367 — 
Construction and development429 240 4,900 5,569 127,001 132,570 — 
Multi-family— — — — 185,864 185,864 — 
Residential mortgage781 540 1,356 2,677 169,967 172,644 1,261 
Home equity11 58 14 83 16,743 16,826 14 
Direct financing leases673 362 340 1,375 146,727 148,102 340 
Consumer108 183 99 390 20,828 21,218 99 
Totals$2,522 $1,599 $6,709 $10,830 $1,164,466 $1,175,296 $1,714 
The following table presents information on the Company’s nonaccrual loans and leases at September 30, 2025 and December 31, 2024:

September 30,
2025		December 31,
2024
Nonaccrual loans and leasesNonaccrual loans and leases without an allowance for credit lossesNonaccrual loans and leasesNonaccrual loans and leases without an allowance for credit losses
Commercial mortgage$704 $— $— $— 
Commercial and industrial32 32 35 — 
Construction and development4,900 — 4,900 — 
Residential mortgage76 76 94 94 
Direct financing leases669 669 34 34 
Total nonaccrual loans and leases$6,381 $777 $5,063 $128 

During both the three months ended September 30, 2025 and December 31, 2024, the Company recognized $1,000 of interest income on nonaccrual loans and leases.

The following tables present the Company's amortized cost basis of collateral dependent loans, and their respective collateral type, which are individually analyzed to determine expected credit losses as of September 30, 2025 and December 31, 2024:

September 30, 2025
Commercial Real EstateMulti-family HousingResidential Real EstateOtherTotalAllowance on Collateral Dependent Loans
Commercial mortgage$7,436 $— $— $— $7,436 $150 
Commercial and industrial— — — 1,638 1,638 — 
Construction and development5,923 — — — 5,923 1,750 
Multi-family— 7,201 — — 7,201 250 
Residential mortgage— — 124 — 124 — 
Total$13,359 $7,201 $124 $1,638 $22,322 $2,150 

December 31, 2024
Commercial Real EstateMulti-family HousingResidential Real EstateOtherTotalAllowance on Collateral Dependent Loans
Commercial mortgage$4,724 $— $— $— $4,724 $— 
Commercial and industrial— — — 1,501 1,501 — 
Construction and development4,900 — — — 4,900 1,000 
Multi-family— 1,461 — — 1,461 — 
Residential mortgage— — 143 — 143 — 
Total$9,624 $1,461 $143 $1,501 $12,729 $1,000 
Loan/Lease Modification Disclosures under ASU 2022-02
In certain situations, the Company may modify the terms of a loan or lease to a borrower experiencing financial difficulty. These modifications may include payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan or lease. If a determination is made that a modified loan or lease has been deemed uncollectible, the loan or lease (or portion of the loan or lease) is charged-off, reducing the amortized cost basis of the loan or lease and adjusting the allowance for credit losses. During the three and nine months ended September 30, 2025 and 2024, the Company had no new modifications to borrowers experiencing financial difficulty.
There were no modified loans or leases that had a payment default during the three or nine months ended September 30, 2025 or 2024, and that were modified in the twelve months prior to that default by borrowers experiencing financial difficulty.
Other Real Estate Owned
Other real estate owned is included in other assets on the Condensed Consolidated Balance Sheets. There was no other real estate owned at September 30, 2025, compared to $37,000 of other real estate owned, consisting of foreclosed residential real estate properties, at December 31, 2024. At September 30, 2025 and December 31, 2024, the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $289,000 and $275,000, respectively.
Direct Financing Leases
The following lists the components of the net investment in direct financing leases:
September 30,
2025		December 31,
2024
Total minimum lease payments to be received$167,468 $168,934 
Initial direct costs9,198 9,360 
176,666 178,294 
Less: Unearned income(30,253)(30,192)
Net investment in direct finance leases$146,413 $148,102 

The following table summarizes the future minimum lease payments receivable subsequent to September 30, 2025:

Remainder of 2025$18,028 
202661,105 
202744,158 
202827,686 
202913,083 
Thereafter3,408 
$167,468 

Allowance for Credit Losses on Loans and Leases
The allowance for credit losses on loans and leases is established for current expected credit losses on the Company's loan and lease portfolios in accordance with ASC Topic 326. This requires significant judgment to estimate credit losses measured on a collective pool basis when similar risk characteristics exist, and for loans evaluated individually. The Company estimates expected future losses for the loan's entire contractual term, taking into account expected payments when appropriate. The allowance is an estimation based on management's evaluation of expected losses related to the Company's financial assets
measured at amortized cost. It considers relevant available information from internal and external sources relating to the historical loss experience, current conditions and reasonable and supportable forecasts for the Company's outstanding loan and lease balances.
The Company utilizes a cash flow ("CF") analysis method of estimating expected losses, which relies on key inputs and assumptions. Significant factors affecting the calculation are the segmenting of loans and leases based upon similar risk characteristics, applied loss rates based upon reasonable and supportable forecasts, and contractual term adjustments, including prepayment and curtailment adjustments. To ensure the allowance is maintained at an adequate level, a detailed analysis is performed on a quarterly basis, with an appropriate provision made to adjust the allowance.
The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses, as it is the Company's policy to write off accrued interest in a timely manner as it is deemed uncollectible by reversing interest income.
The Company categorizes its loan portfolios into eight segments, as discussed above, based on similar risk characteristics. Loans within each segment are collectively evaluated using either a CF methodology or remaining life methodology. When estimating for credit loss, the Company forecasts the first four quarters of the credit loss estimate and reverts to a long-run average of each considered factor. The Company developed its reasonable and supportable forecasts using economic data, such as national gross domestic product ("GDP") and unemployment rate.
Qualitative adjustments are applied to each collectively segmented pool to appropriately capture differences in current or expected qualitative risk characteristics. When evaluating the estimation for expected credit losses, the Company evaluates these qualitative adjustments for any changes in:
•lending policies, procedures, and strategies,
•the nature and volume of the loan and lease portfolio,
•international, national, regional, and local conditions,
•the experience, depth, and ability of lending management,
•the volume and severity of past due loans,
•the quality of the loan review system,
•the underlying collateral,
•concentration risk, and
•the effect of other external factors.

The following tables summarize changes in the allowance for credit losses by segment for the three and nine months ended September 30, 2025 and 2024, respectively:

Balances, June 30, 2025Provision for (reversal of) credit lossesCharge-offsRecoveriesBalances, September 30, 2025
Commercial mortgage$4,788 $(157)$— $— $4,631 
Commercial and industrial1,660 53 (2)11 1,722 
Construction and development2,143 153 — — 2,296 
Multi-family2,652 (85)— — 2,567 
Residential mortgage1,876 (52)— 2 1,826 
Home equity211 (34)— — 177 
Direct financing leases2,512 553 (400)118 2,783 
Consumer377 32 (61)15 363 
Total$16,219 $463 $(463)$146 $16,365 
Balances, December 31, 2024Provision for (reversal of) credit lossesCharge-offsRecoveriesBalances, September 30, 2025
Commercial mortgage$4,486 $145 $— $— $4,631 
Commercial and industrial1,483 225 (2)16 1,722 
Construction and development2,243 53 — — 2,296 
Multi-family2,660 (93)— — 2,567 
Residential mortgage1,910 (108)— 24 1,826 
Home equity184 (7)— — 177 
Direct financing leases2,469 1,595 (1,565)284 2,783 
Consumer356 103 (161)65 363 
Total$15,791 $1,913 $(1,728)$389 $16,365 

Balances, June 30, 2024Provision for (reversal of) credit lossesCharge-offsRecoveriesBalances, September 30, 2024
Commercial mortgage$4,781 $(531)$— $— $4,250 
Commercial and industrial1,421 152 (16)3 1,560 
Construction and development3,464 (1,096)— — 2,368 
Multi-family2,097 500 — — 2,597 
Residential mortgage1,761 220 — 2 1,983 
Home equity133 43 — — 176 
Direct financing leases1,920 983 (463)18 2,458 
Consumer305 66 (34)44 381 
Total$15,882 $337 $(513)$67 $15,773 

Balances, December 31, 2023Provision for (reversal of) credit lossesCharge-offsRecoveriesBalances, September 30, 2024
Commercial mortgage$4,655 $(405)$— $— $4,250 
Commercial and industrial1,281 217 (16)78 1,560 
Construction and development3,883 (1,515)— — 2,368 
Multi-family1,789 808 — — 2,597 
Residential mortgage1,681 301 (10)11 1,983 
Home equity102 74 — — 176 
Direct financing leases1,955 1,706 (1,334)131 2,458 
Consumer317 144 (172)92 381 
Total$15,663 $1,330 $(1,532)$312 $15,773 

During the third quarter of 2025, the allowance for credit losses on loans and leases increased from $16.2 million at June 30, 2025, to $16.4 million at September 30, 2025. The increase was attributable to provisions for credit losses totaling $463,000 during the three months ended September 30, 2025, partially offset by net charge-offs of $317,000. During the third quarter of 2025, updates were made to our allowance for credit losses calculation, including macroeconomic inputs, credit metrics, and refreshed loss driver data. As a result of these refinements, several loan and lease categories saw changes to their respective loss rates during the quarter.

•Commercial Mortgage – Allowance decreased as improved credit performance and lower modeled loss rates offset the impact of a $27.0 million increase in loan balances.
•Commercial & Industrial – Allowance increased despite a $2.4 million decline in balances, reflecting slightly higher modeled loss rates due to portfolio mix changes.
•Construction & Development – Allowance increased as certain project exposures were reassessed for higher loss sensitivity, while loan balances declined by $34.9 million.
•Multi-Family – Allowance decreased as strong collateral performance and stable market conditions led to lower modeled loss rates, while loan balances increased $25.2 million.
•Residential Mortgage, Home Equity, Direct Financing Leases, and Consumer – Allowances decreased in line with lower portfolio balances and stable credit trends.
Our commercial loan portfolio, consisting of commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, represented 70.6% and 69.5% of our portfolio as of September 30, 2025 and December 31, 2024, respectively. The allowance for credit losses on loans and leases allocated to the commercial loan portfolio represented 68.5% and 68.9% of our total allowance at September 30, 2025 and December 31, 2024, respectively.

Economic Outlook
Due to the future-focused nature of the calculation for the allowance for credit losses, management must make significant assumptions. Estimating an appropriate allowance requires management to use relevant forward-looking information drawn from reasonable and supportable forecasts. Economic factors are a consequential part of these forecasts, and as such are evaluated periodically for developments that may impact the Company's allowance for credit losses and loan and lease portfolio.

As of September 30, 2025, several key economic factors continue to influence the Company's loan and lease portfolio. Persistent inflation, slowing economic growth, and labor market uncertainty are contributing to a more challenging operating environment for many borrowers. In addition, geopolitical tensions and tariff-related risks are creating potential disruptions in supply chains and increased input costs for certain industries. These conditions may continue to affect borrower performance and credit demand in the near term. Despite these challenges, the Company's overall credit quality remains stable, supported by conservative underwriting standards and ongoing portfolio monitoring. Management continues to evaluate macroeconomic assumptions used in the allowance for credit losses model to ensure they reflect current and expected economic conditions.

The Company remains focused on its three strategic growth markets: Columbus, Ohio, Cincinnati/Dayton/Springfield, Ohio, and Indianapolis, Indiana. These markets continue to exhibit above-average population and employment growth, strong commercial activity, and resilient real estate fundamentals relative to broader economic trends. The Company's loan growth in these markets continues to be concentrated in commercial real estate lending, consistent with its strategic focus and relationship-based lending model. Forecasts for these markets are summarized below:

•Columbus, Ohio – The Columbus MSA continues to experience steady economic expansion, driven by growth in technology, healthcare, and strategic development. Job creation and infrastructure expansion are supported by over $2 billion in public and private development projects, while population growth sustains demand for housing, services, and consumer goods. Challenges include persistent inflationary pressures, housing affordability constraints, and labor shortages across multiple industries.
•Cincinnati/Dayton/Springfield, Ohio – The Cincinnati/Dayton/Springfield MSA is projected to experience moderate growth. Cincinnati leads the region in employment and GDP gains, supported by manufacturing, construction, and technology investments. Dayton remains stable despite slower job growth and inflationary pressures. Ongoing labor market constraints, particularly in skilled trades and technology fields, persist. The region’s connection with Columbus as part of Ohio’s emerging “Silicon Corridor” enhances opportunities for investment, workforce development, and regional competitiveness.
•Indianapolis, Indiana – The Indianapolis MSA continues to demonstrate favorable economic conditions, supported by advanced manufacturing, technology, and urban revitalization initiatives. Downtown capital projects totaling approximately $9 billion are underway, while consumer demand and population growth of about 1.2% support urban momentum. Inflation, elevated interest rates, and tariff-related impacts on manufacturing present ongoing challenges; however, the region remains well positioned relative to peer metros due to its diversified and innovation-driven economy.
The overall economic outlook remains complex and uncertain, creating a challenging environment requiring continued vigilance and adaptability. Potential economic volatility could materially affect the Company’s loan and lease portfolio,
including the allowance for credit losses. As a result, the Company expects that future estimates may fluctuate throughout the remainder of 2025.

Allowance for Credit Losses on Unfunded Commitments
The allowance for credit losses on unfunded commitments is included in other liabilities on the Condensed Consolidated Balance Sheets. The estimate of expected losses on unfunded commitments is calculated based on the loss rate for the loan or lease segment in which the loan or lease commitments would be classified if funded, adjusted for the estimate of funding probability. Adjustments to the allowance, either additional provisions or reversals, are recorded in the provision for (reversal of) credit losses in the Condensed Consolidated Statements of Income.

The following tables detail activity in the allowance for credit losses on unfunded commitments during the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30,
20252024
Beginning balance$584 $1,103 
Reversal of credit losses(194)(436)
Ending balance$390 $667 

Nine Months Ended September 30,
20252024
Beginning balance$558 $1,642 
Reversal of credit losses(168)(975)
Ending balance$390 $667