Allowance for Credit Losses

3 Months Ended

Mar. 31, 2025

Allowance for Credit Losses

Allowance for Credit Losses

4. Allowance for Credit Losses

The Company maintains the allowance for credit losses for loans and leases (the “ACL”) that is deducted from the amortized cost basis of loans and leases to present the net carrying value of loans and leases expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount of loans and leases. While management utilizes its best judgment and information available, the ultimate appropriateness of the ACL is dependent upon a variety of factors beyond the Company’s control, including the performance of the Company’s loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.

The Company also maintains an estimated reserve for unfunded commitments on the unaudited interim consolidated balance sheets. The reserve for unfunded commitments is reduced in the period in which the off-balance sheet financial instruments expire, loan funding occurs, or is otherwise settled.

The Company’s methodology is more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and should be read in conjunction with these unaudited interim consolidated financial statements as of and for the three months ended March 31, 2025.

Rollforward of the Allowance for Credit Losses

The following presents the activity in the ACL by class of loans and leases for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31, 2025
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Allowance for credit losses:
Balance at beginning of period	$	16,332	$	40,624	$	8,570	$	2,269	$	39,230	$	10,205	$	43,163	$	160,393
Charge-offs		(1,459)		—		—		—		—		(14)		(5,025)		(6,498)
Recoveries		403		251		—		—		20		64		1,979		2,717
Provision		2,716		(1,505)		941		75		(4,876)		15		12,634		10,000
Balance at end of period	$	17,992	$	39,370	$	9,511	$	2,344	$	34,374	$	10,270	$	52,751	$	166,612

	Three Months Ended March 31, 2024
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Allowance for credit losses:
Balance at beginning of period	$	14,956	$	43,944	$	10,392	$	1,754	$	36,880	$	11,728	$	36,879	$	156,533
Charge-offs		(909)		—		—		—		—		—		(4,854)		(5,763)
Recoveries		211		—		—		—		30		44		1,689		1,974
Provision		2,829		(418)		2,049		731		(120)		(325)		2,346		7,092
Balance at end of period	$	17,087	$	43,526	$	12,441	$	2,485	$	36,790	$	11,447	$	36,060	$	159,836

Rollforward of the Reserve for Unfunded Commitments

The following presents the activity in the Reserve for Unfunded Commitments for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31, 2025
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Reserve for unfunded commitments:
Balance at beginning of period	$	8,112	$	1,003	$	7,818	$	—	$	3	$	15,893	$	18	$	32,847
Provision		714		132		(239)		—		84		(212)		21		500
Balance at end of period	$	8,826	$	1,135	$	7,579	$	—	$	87	$	15,681	$	39	$	33,347

	Three Months Ended March 31, 2024
	Commercial Lending								Residential Lending
	Commercial		Commercial								Home
	and		Real				Lease		Residential		Equity
(dollars in thousands)	Industrial		Estate		Construction		Financing		Mortgage		Line		Consumer		Total
Reserve for unfunded commitments:
Balance at beginning of period	$	9,116	$	1,787	$	8,048	$	—	$	24	$	16,589	$	41	$	35,605
Provision		(324)		86		(1,151)		—		(10)		598		9		(792)
Balance at end of period	$	8,792	$	1,873	$	6,897	$	—	$	14	$	17,187	$	50	$	34,813

Credit Quality Information

The Company performs an internal loan review and grading or scoring procedures on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of the Company’s lending policies and procedures. The objective of the loan review and grading or scoring procedures is to identify, in a timely manner, existing or emerging credit quality issues so that appropriate steps can be initiated to avoid or minimize future losses.

Loans and leases subject to grading primarily include: commercial and industrial loans, commercial real estate loans, construction loans and lease financing. Other loans subject to grading include installment loans to businesses or individuals for business and commercial purposes, overdraft lines of credit, commercial credit cards, and other credits as may be determined. Credit quality indicators for internally graded loans and leases are generally updated on an annual basis or on a quarterly basis for those loans and leases deemed to be of potentially higher risk.

An internal credit risk rating system is used to determine loan grade and is based on borrower credit risk and transactional risk. The loan grading process is a mechanism used to determine the risk of a particular borrower and is based on the following factors of a borrower: character, earnings and operating cash flow, asset and liability structure, debt capacity, management and controls, borrowing entity, and industry and operating environment.

Pass – “Pass” (uncriticized) loans and leases, are not considered to carry greater than normal risk. The borrower has the apparent ability to satisfy obligations to the Company, and therefore no loss in ultimate collection is anticipated.

Special Mention – Loans and leases that have potential weaknesses deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for assets or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard – Loans and leases that are inadequately protected by the current financial condition and paying capacity of the obligor or by any collateral pledged. Loans and leases so classified must have a well-defined weakness or weaknesses that jeopardize the collection of the debt. They are characterized by the distinct possibility that the bank may sustain some loss if the deficiencies are not corrected.

Doubtful – Loans and leases that have weaknesses found in substandard borrowers with the added provision that the weaknesses make collection of debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss – Loans and leases classified as loss are considered uncollectible and of such little value that their continuance as an asset 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 this basically worthless asset even though partial recovery may be effected in the future.

Loans that are primarily monitored for credit quality using FICO scores include: residential mortgage loans, home equity lines and consumer loans. FICO scores are calculated primarily based on a consideration of payment history, the current amount of debt, the length of credit history available, a recent history of new sources of credit and the mix of credit type. FICO scores are updated on a monthly, quarterly or bi-annual basis, depending on the product type.

The amortized cost basis by year of origination and credit quality indicator of the Company’s loans and leases as of March 31, 2025 was as follows:

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Amortized
(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Cost Basis		Cost Basis		Total
Commercial Lending
Commercial and Industrial
Risk rating:
Pass	$	19,578	$	173,435	$	68,842	$	172,494	$	220,547	$	268,053	$	1,148,880	$	20,009	$	2,091,838
Special Mention		364		916		2,250		3,353		58		1,229		41,972		—		50,142
Substandard		—		—		—		7,948		26		1,238		24,836		—		34,048
Other (1)		8,099		12,828		7,983		6,045		2,255		2,105		46,051		—		85,366
Total Commercial and Industrial		28,041		187,179		79,075		189,840		222,886		272,625		1,261,739		20,009		2,261,394
Current period gross charge-offs		—		43		95		179		356		779		7		—		1,459
Commercial Real Estate
Risk rating:
Pass		105,358		291,863		384,491		796,202		632,631		1,889,571		100,071		7,645		4,207,832
Special Mention		—		8,979		2,235		7,483		41,397		22,702		11,747		—		94,543
Substandard		—		—		—		54,918		1,007		9,003		—		—		64,928
Other (1)		—		—		—		—		—		130		—		—		130
Total Commercial Real Estate		105,358		300,842		386,726		858,603		675,035		1,921,406		111,818		7,645		4,367,433
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Risk rating:
Pass		4,610		122,410		198,780		353,108		162,361		52,233		22,934		—		916,436
Special Mention		—		—		—		—		—		147		—		—		147
Other (1)		522		14,134		8,910		8,500		1,553		3,177		693		—		37,489
Total Construction		5,132		136,544		207,690		361,608		163,914		55,557		23,627		—		954,072
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Lease Financing
Risk rating:
Pass		69,731		94,965		99,259		56,228		13,304		98,262		—		—		431,749
Special Mention		—		—		226		—		195		—		—		—		421
Substandard		—		4,411		526		292		—		—		—		—		5,229
Total Lease Financing		69,731		99,376		100,011		56,520		13,499		98,262		—		—		437,399
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total Commercial Lending	$	208,262	$	723,941	$	773,502	$	1,466,571	$	1,075,334	$	2,347,850	$	1,397,184	$	27,654	$	8,020,298
Current period gross charge-offs	$	—	$	43	$	95	$	179	$	356	$	779	$	7	$	—	$	1,459

(continued)

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
(continued)													Amortized		Amortized
(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Cost Basis		Cost Basis		Total
Residential Lending
Residential Mortgage
FICO:
740 and greater	$	41,949	$	161,436	$	183,292	$	482,310	$	933,384	$	1,578,605	$	—	$	—	$	3,380,976
680 - 739		4,088		18,218		34,761		65,347		101,230		192,602		—		—		416,246
620 - 679		734		1,714		3,922		23,196		18,793		51,826		—		—		100,185
550 - 619		—		—		817		6,495		7,696		17,224		—		—		32,232
Less than 550		—		—		731		771		2,253		7,503		—		—		11,258
No Score (3)		—		13,199		6,330		16,757		9,837		50,065		—		—		96,188
Other (2)		759		8,020		11,914		16,416		14,182		37,781		3,361		—		92,433
Total Residential Mortgage		47,530		202,587		241,767		611,292		1,087,375		1,935,606		3,361		—		4,129,518
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Home Equity Line
FICO:
740 and greater		—		—		—		—		—		—		911,857		1,404		913,261
680 - 739		—		—		—		—		—		—		169,131		1,684		170,815
620 - 679		—		—		—		—		—		—		39,262		592		39,854
550 - 619		—		—		—		—		—		—		12,077		485		12,562
Less than 550		—		—		—		—		—		—		6,645		486		7,131
No Score (3)		—		—		—		—		—		—		1,272		—		1,272
Total Home Equity Line		—		—		—		—		—		—		1,140,244		4,651		1,144,895
Current period gross charge-offs		—		—		—		—		—		—		14		—		14
Total Residential Lending	$	47,530	$	202,587	$	241,767	$	611,292	$	1,087,375	$	1,935,606	$	1,143,605	$	4,651	$	5,274,413
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	14	$	—	$	14
Consumer Lending
FICO:
740 and greater		32,634		80,861		58,623		73,919		37,183		15,253		93,415		112		392,000
680 - 739		19,668		66,839		41,621		38,860		18,814		9,295		84,783		515		280,395
620 - 679		6,692		31,051		16,155		17,379		8,533		6,406		50,655		793		137,664
550 - 619		596		9,333		6,584		9,663		5,434		4,471		16,458		849		53,388
Less than 550		280		3,004		4,421		5,131		3,263		2,741		5,399		508		24,747
No Score (3)		750		821		95		30		—		18		35,238		194		37,146
Other (2)		201		—		—		257		600		1,044		70,883		—		72,985
Total Consumer Lending	$	60,821	$	191,909	$	127,499	$	145,239	$	73,827	$	39,228	$	356,831	$	2,971	$	998,325
Current period gross charge-offs	$	—	$	660	$	481	$	585	$	270	$	809	$	1,883	$	337	$	5,025
Total Loans and Leases	$	316,613	$	1,118,437	$	1,142,768	$	2,223,102	$	2,236,536	$	4,322,684	$	2,897,620	$	35,276	$	14,293,036
Current period gross charge-offs	$	—	$	703	$	576	$	764	$	626	$	1,588	$	1,904	$	337	$	6,498

(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score (680 and above). As of March 31, 2025, the majority of the loans in this population were current.

(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating. As of March 31, 2025, the majority of the loans in this population were current.

(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

The amortized cost basis by year of origination and credit quality indicator of the Company’s loans and leases as of December 31, 2024 was as follows:

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
													Amortized		Amortized
(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Cost Basis		Cost Basis		Total
Commercial Lending
Commercial and Industrial
Risk rating:
Pass	$	163,980	$	73,554	$	185,433	$	249,532	$	17,775	$	256,119	$	1,118,075	$	14,336	$	2,078,804
Special Mention		808		2,385		1,209		68		300		1,322		41,520		—		47,612
Substandard		—		—		8,096		196		309		1,114		26,089		—		35,804
Other (1)		17,132		8,928		6,937		2,797		765		1,279		47,370		—		85,208
Total Commercial and Industrial		181,920		84,867		201,675		252,593		19,149		259,834		1,233,054		14,336		2,247,428
Current period gross charge-offs		—		578		335		105		221		2,376		—		—		3,615
Commercial Real Estate
Risk rating:
Pass		322,405		369,948		832,005		634,722		308,156		1,720,243		116,682		7,703		4,311,864
Special Mention		9,014		2,252		7,510		41,399		3,265		10,860		11,861		—		86,161
Substandard		—		—		54,952		1,002		—		9,732		148		—		65,834
Other (1)		—		—		—		—		—		133		—		—		133
Total Commercial Real Estate		331,419		372,200		894,467		677,123		311,421		1,740,968		128,691		7,703		4,463,992
Current period gross charge-offs		—		—		—		—		—		400		—		—		400
Construction
Risk rating:
Pass		91,583		198,382		332,000		186,682		41,596		13,824		14,972		—		879,039
Special Mention		—		—		—		—		—		155		—		—		155
Other (1)		12,482		9,688		10,861		1,561		1,199		2,644		697		—		39,132
Total Construction		104,065		208,070		342,861		188,243		42,795		16,623		15,669		—		918,326
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Lease Financing
Risk rating:
Pass		149,615		101,684		60,898		14,328		17,703		84,663		—		—		428,891
Special Mention		—		—		—		220		—		—		—		—		220
Substandard		4,657		565		317		—		—		—		—		—		5,539
Total Lease Financing		154,272		102,249		61,215		14,548		17,703		84,663		—		—		434,650
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total Commercial Lending	$	771,676	$	767,386	$	1,500,218	$	1,132,507	$	391,068	$	2,102,088	$	1,377,414	$	22,039	$	8,064,396
Current period gross charge-offs	$	—	$	578	$	335	$	105	$	221	$	2,776	$	—	$	—	$	4,015

(continued)

															Revolving
															Loans
															Converted
	Term Loans												Revolving		to Term
	Amortized Cost Basis by Origination Year												Loans		Loans
(continued)													Amortized		Amortized
(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Cost Basis		Cost Basis		Total
Residential Lending
Residential Mortgage
FICO:
740 and greater	$	168,067	$	187,710	$	492,845	$	946,390	$	498,443	$	1,115,557	$	—	$	—	$	3,409,012
680 - 739		18,368		34,901		65,735		103,622		57,369		138,469		—		—		418,464
620 - 679		1,726		4,380		23,556		19,355		14,058		40,471		—		—		103,546
550 - 619		—		820		6,526		7,745		4,042		13,783		—		—		32,916
Less than 550		—		734		775		2,264		1,559		6,342		—		—		11,674
No Score (3)		13,211		6,719		16,839		9,916		5,518		45,604		—		—		97,807
Other (2)		9,456		12,404		16,564		14,311		10,769		28,812		2,419		—		94,735
Total Residential Mortgage		210,828		247,668		622,840		1,103,603		591,758		1,389,038		2,419		—		4,168,154
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Home Equity Line
FICO:
740 and greater		—		—		—		—		—		—		925,749		1,652		927,401
680 - 739		—		—		—		—		—		—		161,523		1,030		162,553
620 - 679		—		—		—		—		—		—		39,235		1,220		40,455
550 - 619		—		—		—		—		—		—		13,006		416		13,422
Less than 550		—		—		—		—		—		—		5,993		563		6,556
No Score (3)		—		—		—		—		—		—		1,352		—		1,352
Total Home Equity Line		—		—		—		—		—		—		1,146,858		4,881		1,151,739
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total Residential Lending	$	210,828	$	247,668	$	622,840	$	1,103,603	$	591,758	$	1,389,038	$	1,149,277	$	4,881	$	5,319,893
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer Lending
FICO:
740 and greater		92,329		65,738		84,007		44,192		14,607		6,897		101,938		106		409,814
680 - 739		68,371		46,533		44,504		21,829		7,652		5,278		86,935		509		281,611
620 - 679		30,618		17,728		19,942		10,252		4,195		4,152		50,544		775		138,206
550 - 619		6,108		6,768		9,312		5,702		2,574		3,106		15,641		778		49,989
Less than 550		2,012		3,950		5,572		3,594		1,591		1,830		5,311		593		24,453
No Score (3)		1,881		106		38		—		7		9		38,932		176		41,149
Other (2)		—		—		277		887		99		956		76,528		—		78,747
Total Consumer Lending	$	201,319	$	140,823	$	163,652	$	86,456	$	30,725	$	22,228	$	375,829	$	2,937	$	1,023,969
Current period gross charge-offs	$	732	$	2,055	$	2,606	$	1,388	$	676	$	2,685	$	7,168	$	692	$	18,002
Total Loans and Leases	$	1,183,823	$	1,155,877	$	2,286,710	$	2,322,566	$	1,013,551	$	3,513,354	$	2,902,520	$	29,857	$	14,408,258
Current period gross charge-offs	$	732	$	2,633	$	2,941	$	1,493	$	897	$	5,461	$	7,168	$	692	$	22,017

(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score (680 and above). As of December 31, 2024, the majority of the loans in this population were current.

(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating. As of December 31, 2024, the majority of the loans in this population were current.

(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

There were no loans and leases graded as Loss as of March 31, 2025 and December 31, 2024.

Past-Due Status

The Company continually updates its aging analysis for loans and leases to monitor the migration of loans and leases into past due categories. The Company considers loans and leases that are delinquent for 30 days or more to be past due. As of March 31, 2025 and December 31, 2024, the aging analysis of the amortized cost basis of the Company’s past due loans and leases was as follows:

	March 31, 2025
	Past Due												Loans and
					Greater								Leases Past
					Than or								Due 90 Days
	30-59		60-89		Equal to								or More and
	Days		Days		90 Days		Total				Total Loans		Still Accruing
(dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		and Leases		Interest
Commercial and industrial	$	3,596	$	934	$	740	$	5,270	$	2,256,124	$	2,261,394	$	740
Commercial real estate		378		—		—		378		4,367,055		4,367,433		—
Construction		1,193		2,295		—		3,488		950,584		954,072		—
Lease financing		—		—		—		—		437,399		437,399		—
Residential mortgage		15,546		9,461		7,698		32,705		4,096,813		4,129,518		1,008
Home equity line		4,250		803		3,015		8,068		1,136,827		1,144,895		—
Consumer		14,883		3,430		2,554		20,867		977,458		998,325		2,554
Total	$	39,846	$	16,923	$	14,007	$	70,776	$	14,222,260	$	14,293,036	$	4,302

	December 31, 2024
	Past Due												Loans and
					Greater								Leases Past
					Than or								Due 90 Days
	30-59		60-89		Equal to								or More and
	Days		Days		90 Days		Total				Total Loans		Still Accruing
(dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		and Leases		Interest
Commercial and industrial	$	1,481	$	563	$	1,595	$	3,639	$	2,243,789	$	2,247,428	$	1,432
Commercial real estate		—		—		153		153		4,463,839		4,463,992		—
Construction		434		1,179		536		2,149		916,177		918,326		536
Lease financing		—		—		—		—		434,650		434,650		—
Residential mortgage		19,971		7,478		9,392		36,841		4,131,313		4,168,154		1,317
Home equity line		5,647		972		3,945		10,564		1,141,175		1,151,739		—
Consumer		17,591		3,946		2,734		24,271		999,698		1,023,969		2,734
Total	$	45,124	$	14,138	$	18,355	$	77,617	$	14,330,641	$	14,408,258	$	6,019

Nonaccrual Loans and Leases

The Company generally places a loan or lease on nonaccrual status when management believes that collection of principal or interest has become doubtful or when a loan or lease becomes 90 days past due as to principal or interest, unless it is well secured and in the process of collection. The Company charges off a loan or lease when facts indicate that the loan or lease is considered uncollectible.

The amortized cost basis of loans and leases on nonaccrual status as of March 31, 2025 and December 31, 2024 and the amortized cost basis of loans and leases on nonaccrual status with no ACL as of March 31, 2025 and December 31, 2024 were as follows:

	March 31, 2025
	Nonaccrual
	Loans
	and Leases
	With No		Nonaccrual
	Allowance		Loans
(dollars in thousands)	for Credit Losses		and Leases
Commercial real estate	$	—	$	216
Construction		—		375
Residential mortgage		5,617		12,809
Home equity line		—		6,788
Total Nonaccrual Loans and Leases	$	5,617	$	20,188

	December 31, 2024
	Nonaccrual
	Loans
	and Leases
	With No		Nonaccrual
	Allowance		Loans
(dollars in thousands)	for Credit Losses		and Leases
Commercial and industrial	$	—	$	329
Commercial real estate		—		411
Residential mortgage		4,495		12,768
Home equity line		501		7,171
Total Nonaccrual Loans and Leases	$	4,996	$	20,679

For the three months ended March 31, 2025, the Company recognized interest income of $0.4 million on nonaccrual loans and leases and for the three months ended March 31, 2024, the Company recognized interest income of $0.2 million on nonaccrual loans and leases. Furthermore, for the three months ended March 31, 2025, the amount of accrued interest receivables written off by reversing interest income was $0.3 million and for the three months ended March 31, 2024, the amount of accrued interest receivables written off by reversing interest income was $0.2 million.

Collateral-Dependent Loans and Leases

Collateral-dependent loans and leases are those for which repayment (on the basis of the Company’s assessment as of the reporting date) is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. As of March 31, 2025 and December 31, 2024, the amortized cost basis of collateral-dependent loans were $38.4 million and $39.1 million, respectively. As of March 31, 2025 and December 31, 2024, these loans were primarily collateralized by residential real estate property and borrower assets and the fair value of collateral on substantially all collateral-dependent loans were significantly in excess of their amortized cost basis.

Loan Modifications to Borrowers Experiencing Financial Difficulty

Commercial and industrial loans with a borrower experiencing financial difficulty may be modified through interest rate reductions, term extensions, and converting revolving credit lines to term loans. Modifications of commercial real estate and construction loans with a borrower experiencing financial difficulty may involve reducing the interest rate for the remaining term of the loan or extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk. Modifications of construction loans with a borrower experiencing financial difficulty may also involve extending the interest-only payment period. Interest continues to accrue on the missed payments and as a result, the effective yield on the loan remains unchanged. Modifications of residential real estate loans with a borrower experiencing financial difficulty may be comprised of loans where monthly payments are lowered to accommodate the borrowers' financial needs for a period of time, including extended interest-only periods and reamortization of the balance. Modifications of consumer loans with a borrower experiencing financial difficulty may involve interest rate reductions and term extensions.

Loans modified with a borrower experiencing financial difficulty, whether in default or not, may already be on nonaccrual status and in some cases, partial charge-offs may have already been taken against the outstanding loan balance. Loans modified with a borrower experiencing financial difficulty are evaluated for impairment. As a result, this may have a financial effect of impacting the specific ACL associated with the loan. An ACL for impaired commercial loans, including commercial real estate and construction loans, is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or if the loan is collateral-dependent, the estimated fair value of the collateral, less any selling costs. An ACL for impaired residential real estate loans is measured based on the estimated fair value of the collateral, less any selling costs. Management exercises significant judgment in developing these estimates.

The following tables present, by class of financing receivable and type of modification granted, the amortized cost basis as of March 31, 2025 and 2024, related to loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2025 and 2024, respectively:

	Interest Rate Reduction
		Three Months Ended				Three Months Ended
		March 31, 2025				March 31, 2024
		Amortized	% of Total Class			Amortized	% of Total Class
(dollars in thousands)		Cost Basis(1)	of Financing Receivable			Cost Basis(1)	of Financing Receivable
Consumer	$	589	0.06	%	$	628	0.06	%
Total	$	589	n/m	%	$	628	n/m	%

n/m – Represents less than 0.01% of total class of financing receivable.

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

	Term Extension
		Three Months Ended				Three Months Ended
		March 31, 2025				March 31, 2024
		Amortized	% of Total Class			Amortized	% of Total Class
(dollars in thousands)		Cost Basis(1)	of Financing Receivable			Cost Basis(1)	of Financing Receivable
Commercial and industrial	$	10,584	0.47	%	$	199	0.01	%
Commercial real estate		1,347	0.03			—	—
Residential mortgage		—	—			310	0.01
Consumer		83	n/m			118	0.01
Total	$	12,014	0.08	%	$	627	n/m	%

n/m – Represents less than 0.01% of total class of financing receivable.

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

	Other-Than-Insignificant Payment Delay
		Three Months Ended				Three Months Ended
		March 31, 2025				March 31, 2024
		Amortized	% of Total Class			Amortized	% of Total Class
(dollars in thousands)		Cost Basis(1)	of Financing Receivable			Cost Basis(1)	of Financing Receivable
Commercial real estate	$	1,007	0.02	%	$	—	—	%
Residential mortgage		—	—			1,260	0.03
Total	$	1,007	n/m	%	$	1,260	n/m	%

n/m – Represents less than 0.01% of total class of financing receivable.

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

The following tables describe, by class of financing receivable and type of modification granted, the financial effect of the modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025 and 2024, respectively:

	Interest Rate Reduction
	Financial Effect
	Three Months Ended March 31, 2025	Three Months Ended March 31, 2024
Consumer	Reduced weighted-average contractual interest rate by 13.20%.	Reduced weighted-average contractual interest rate by 13.55%.

	Term Extension
	Financial Effect
	Three Months Ended March 31, 2025	Three Months Ended March 31, 2024
Commercial and industrial	Added a weighted-average 0.4 years to the life of loans.	Added a weighted-average 3.8 years to the life of loans.
Commercial real estate	Added a weighted-average 0.3 years to the life of loans.	—
Residential mortgage	—	Added a weighted-average 1.0 years to the life of loans.
Consumer	Added a weighted-average 4.4 years to the life of loans.	Added a weighted-average 4.2 years to the life of loans.

	Other-Than-Insignificant Payment Delay
	Financial Effect
	Three Months Ended March 31, 2025	Three Months Ended March 31, 2024
Commercial real estate	Deferred a weighted-average of $209 thousand in loan payments.	—
Residential mortgage	—	Deferred a weighted-average of $172 thousand in loan payments.

The following table presents, by class of financing receivable and type of modification granted, the amortized cost basis, as of March 31, 2025 and 2024, of loans that had a payment default during the three months ended March 31, 2025 and 2024, respectively, and were modified in the 12 months before default to borrowers experiencing financial difficulty. The Company is reporting these defaulted loans based on a payment default definition of 30 days past due:

	Amortized Cost Basis of Modified Loans That Subsequently Defaulted(1)
	Three Months Ended March 31, 2025				Three Months Ended March 31, 2024
(dollars in thousands)	Interest Rate Reduction		Term Extension		Interest Rate Reduction		Term Extension
Commercial and industrial	$	—	$	73	$	—	$	—
Residential mortgage		—		312		—		—
Consumer		410		21		300		7
Total	$	410	$	406	$	300	$	7

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

Performance of the loans that are modified to borrowers experiencing financial difficulty is monitored to understand the effectiveness of the Company’s modification efforts. As of March 31, 2025 and 2024, the aging analysis of the amortized cost basis of the performance of loans that have been modified in the last 12 months related to borrowers experiencing financial difficulty was as follows:

		March 31, 2025
		Past Due
						Greater Than
						or Equal to
		30-59 Days		60-89 Days		90 Days		Total
(dollars in thousands)		Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial and industrial	$	—	$	—	$	—	$	—	$	10,813	$	10,813
Commercial real estate		—		—		—		—		3,497		3,497
Residential mortgage		—		—		—		—		2,352		2,352
Consumer		155		41		98		294		1,359		1,653
Total	$	155	$	41	$	98	$	294	$	18,021	$	18,315

		March 31, 2024
		Past Due
						Greater Than
						or Equal to
		30-59 Days		60-89 Days		90 Days		Total
(dollars in thousands)		Past Due		Past Due		Past Due		Past Due		Current		Total
Commercial and industrial	$	—	$	—	$	—	$	—	$	467	$	467
Commercial real estate		—		—		—		—		2,857		2,857
Construction		—		—		—		—		657		657
Residential mortgage		—		—		—		—		1,570		1,570
Consumer		96		86		22		204		1,407		1,611
Total	$	96	$	86	$	22	$	204	$	6,958	$	7,162

The Company had commitments to extend credit, standby letters of credit, and commercial letters of credit totaling $6.1 billion and $6.0 billion as of March 31, 2025 and December 31, 2024, respectively. Of the $6.1 billion at March 31, 2025, there were no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company had modified the terms of the loans in the form of an interest rate reduction, term extension, or other-than-insignificant payment delay during the three months ended March 31, 2025. Of the $6.0 billion at December 31, 2024, there were no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company had modified the terms of the loans in the form of an interest rate reduction, term extension or other-than-insignificant payment delay during the year ended December 31, 2024.

Foreclosed Property

As of both March 31, 2025 and December 31, 2024, there were no residential real estate properties held from foreclosed residential mortgage loans.