Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2026

Loans and Loans Held for Sale

Loans are presented net of unearned income. Unearned income consisted of net deferred loan fees and costs of $4.1 million at March 31, 2026 and $4.8 million at December 31, 2025 and a discount related to purchase accounting fair value adjustments of $1.9 million at March 31, 2026 and $2.0 million at December 31, 2025.

The following table summarizes the composition of our loan portfolio at the dates presented:


(dollars in thousands)	March 31, 2026		December 31, 2025
Commercial real estate	$	2,836,088	$	2,921,761
Commercial and industrial	1,321,544		1,330,605
Commercial construction	391,584		365,377
Business banking	1,299,414		1,315,863
Consumer real estate	2,026,801		2,047,071
Other consumer	83,951		91,280
Total Portfolio Loans	$	7,959,382	$	8,071,957
Loans held for sale	694		1,010
Total Loans(1)	$	7,960,076	$	8,072,967

(1)Excludes interest receivable of $32.4 million at March 31, 2026 and $33.4 million at December 31, 2025. Interest receivable is included in other assets in the Consolidated Balance Sheets.

Modifications to Borrowers Experiencing Financial Difficulty

The following tables present the amortized cost of loans to borrowers experiencing financial difficulty by portfolio segment and type of modification during the periods presented:



	Three Months Ended March 31, 2026
(dollars in thousands)	Term Extension		Term Extension and Payment Delays		Total		% of Portfolio Segment

Commercial and industrial	$	5,631	$	13,753	$	19,384	1.47	%

Business banking	25		—		25		—	%
Consumer real estate	138		—		138		0.01	%

Total	$	5,794	$	13,753	$	19,547	0.25	%

	Three Months Ended March 31, 2025
(dollars in thousands)	Term Extension		Term Extension and Payment Delays		Total		% of Portfolio Segment

Commercial and industrial	$	—	$	2,092	$	2,092	0.16	%
Commercial construction	—		1,006		1,006		0.27	%

Consumer real estate	265		640		905		0.05	%

Total	$	265	$	3,738	$	4,003	0.05	%

The following tables describe the effect of loan modifications made to borrowers experiencing financial difficulty during the periods presented:



	Three Months Ended March 31, 2026
		Weighted-Average Term Extension (in months)		Weighted-Average Term Extension and Payment Delays (in months)

Commercial and industrial			10		3

Business banking			12		—
Consumer real estate			346		—



	Three Months Ended March 31, 2025
		Weighted-Average Term Extension (in months)		Weighted-Average Term Extension and Payment Delays (in months)

Commercial and industrial			—		13
Commercial construction			—		13

Consumer real estate			122		15

We closely monitor the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts.

The following tables present an aging analysis since the date of modification for loans to borrowers experiencing financial difficulty that were modified in the last 12 months as of the dates presented:


	March 31, 2026
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total

Commercial and industrial	$	22,976	$	11,701	$	—	$	3,375	$	38,052

Business banking	25		—		—		—		25
Consumer real estate	454		—		—		—		454

Total	$	23,455	$	11,701	$	—	$	3,375	$	38,531


	March 31, 2025
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Commercial real estate	$	616	$	—	$	—	$	—	$	616
Commercial and industrial	16,536		—		—		3,778		20,314
Commercial construction	—		1,006		—		—		1,006

Consumer real estate	1,128		224		40		—		1,392

Total	$	18,280	$	1,230	$	40	$	3,778	$	23,328

A payment default is defined as a loan having a payment past due 90 days or more. There was one payment default on previously modified loans to borrowers experiencing financial difficulty in the amount of $3.4 million during the three months ended March 31, 2026 compared to one payment default in the amount of $3.8 million during the same period in 2025. Additionally, we had thirteen commitments to lend an additional $1.3 million to borrowers experiencing financial difficulty that had a modification during the twelve months ended March 31, 2026 and ten commitments to lend an additional $0.5 million to borrowers experiencing financial difficulty that had a modification during the same period in 2025.

The effect of modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, or ACL, because of the measurement methodologies used to estimate the ACL, therefore, a change to the ACL is generally not recorded upon modification. If principal forgiveness is provided, that portion of the loan will be charged-off, resulting in a reduction of the amortized cost basis and a corresponding adjustment to the ACL. An assessment of whether the borrower is experiencing financial difficulty is made on the date of a modification.

Allowance for Credit Losses

We maintain an ACL, at a level determined to be adequate to absorb estimated expected credit losses within the loan portfolio over the contractual life of an instrument that considers our historical loss experience, current conditions and forecasts of future economic conditions as of the balance sheet date. We develop and document a systematic ACL methodology based on the following portfolio segments: 1) CRE, 2) C&I, 3) Commercial Construction, 4) Business Banking, 5) Consumer Real Estate and 6) Other Consumer.

The following are key risks within each portfolio segment:

CRE—Loans secured by commercial purpose real estate, including both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. Operations of the individual projects and global cash flows of the debtors are the primary sources of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and the business prospects of the lessee, if the project is not owner-occupied.

C&I—Loans made to operating companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. Cash flow from the operations of the company is the primary source of repayment for these loans. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the industry of the company. Collateral for these types of loans often does not have sufficient value in a distressed or liquidation scenario to satisfy the outstanding debt.

Commercial Construction—Loans made to finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. While these loans are generally confined to the construction period, if there are problems, the project may not be completed, and as such, may not provide sufficient cash flow on its own to service the debt or have sufficient value in a liquidation to cover the outstanding principal. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the type of project and the experience and resources of the developer.

Business Banking—Commercial purpose loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs. The business banking portfolio is monitored by utilizing a standard and closely managed process focusing on behavioral and performance criteria. The condition of the local economy is an important indicator of risk, but there are also more specific risks depending on the collateral type and business.

Consumer Real Estate—Loans secured by first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The state of the local housing market can also have a significant impact on this segment because low demand and/or declining home values can limit the ability of borrowers to sell a property and satisfy the debt.

Other Consumer—Loans made to individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. This segment includes auto loans, unsecured loans and lines of credit. The primary source of repayment for these loans is the income and assets of the borrower. The condition of the local economy, in particular the unemployment rate, is an important indicator of risk for this segment. The value of the collateral, if there is any, is less likely to be a source of repayment due to less certain collateral values.

Management monitors various credit quality indicators for the commercial, business banking and consumer loan portfolios, including changes in risk ratings, nonperforming status and delinquency on a monthly basis.

We monitor the commercial and business banking loan portfolio through an internal risk rating system. Loan risk ratings are assigned based upon the creditworthiness of the borrower and are reviewed on an ongoing basis according to our internal policies. Loans within the pass rating generally have a lower risk of loss than loans risk rated as special mention or substandard.

Our risk ratings are consistent with regulatory guidance and are as follows:

Pass—The loan is currently performing and is of high quality.

Special Mention—A special mention loan has potential weaknesses that warrant management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects or in the strength of our credit position at some future date.

Substandard—A substandard loan is not adequately protected by the net worth and/or paying capacity of the borrower or by the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. These loans are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful—Loans classified doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.

The following tables present loan balances by year of origination and internally assigned risk rating for our portfolio segments at the dates presented:


	March 31, 2026
	Risk Rating by Year of Origination
(dollars in thousands)	2026		2025		2024		2023		2022		2021 and Prior		Revolving		Revolving-Term		Total

Commercial Real Estate
Pass	$	61,340	$	483,042	$	313,621	$	314,448	$	275,054	$	1,262,871	$	38,536	$	—	$	2,748,912
Special mention	—		—		2,887		4,563		8,344		36,292		254		—		52,340
Substandard	—		—		—		3,838		1,689		29,309		—		—		34,836
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate	61,340		483,042		316,508		322,849		285,087		1,328,472		38,790		—		2,836,088
Year-to-date Gross Charge-offs	—		—		—		—		—		—		—		—		—

Commercial and Industrial
Pass	84,636		154,971		91,822		103,001		122,999		229,105		417,206		—		1,203,740
Special mention	—		—		818		6,588		5,792		14,687		42,132		—		70,017
Substandard	—		—		—		1,864		—		22,763		20,533		—		45,160
Doubtful	—		—		—		—		—		—		2,627		—		2,627
Total Commercial and Industrial	84,636		154,971		92,640		111,453		128,791		266,555		482,498		—		1,321,544
Year-to-date Gross Charge-offs	—		—		—		198		—		—		—		—		198

Commercial Construction
Pass	14,994		201,198		112,588		44,094		7,678		3,699		6,464		—		390,715
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		869		—		—		—		—		—		869
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Construction	14,994		201,198		113,457		44,094		7,678		3,699		6,464		—		391,584
Year-to-date Gross Charge-offs	—		—		—		—		—		—		—		—		—

Business Banking
Pass	30,136		178,415		125,647		191,313		191,806		462,449		95,458		446		1,275,670
Special mention	—		—		799		120		419		2,909		4		112		4,363
Substandard	—		—		444		4,455		2,632		11,232		150		468		19,381
Doubtful	—		—		—		—		—		—		—		—		—
Total Business Banking	30,136		178,415		126,890		195,888		194,857		476,590		95,612		1,026		1,299,414
Year-to-date Gross Charge-offs	—		—		—		510		—		44		—		—		554

Consumer Real Estate
Pass	17,563		161,750		214,384		289,054		301,547		373,961		625,545		28,698		2,012,502
Special mention	—		—		—		—		—		79		—		—		79
Substandard	—		156		758		3,060		477		4,468		1,877		3,424		14,220
Doubtful	—		—		—		—		—		—		—		—		—
Total Consumer Real Estate	17,563		161,906		215,142		292,114		302,024		378,508		627,422		32,122		2,026,801
Year-to-date Gross Charge-offs	—		—		26		3		—		—		34		238		301

Other Consumer
Pass	1,848		5,891		4,706		3,259		3,204		1,543		49,189		14,139		83,779
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		12		—		147		—		13		172
Doubtful	—		—		—		—		—		—		—		—		—
Total Other Consumer	1,848		5,891		4,706		3,271		3,204		1,690		49,189		14,152		83,951
Year-to-date Gross Charge-offs	282		—		21		3		23		9		—		544		882

Pass	210,517		1,185,267		862,768		945,169		902,288		2,333,628		1,232,398		43,283		7,715,318
Special mention	—		—		4,504		11,271		14,555		53,967		42,390		112		126,799
Substandard	—		156		2,071		13,229		4,798		67,919		22,560		3,905		114,638
Doubtful	—		—		—		—		—		—		2,627		—		2,627
Total Loan Balance	$	210,517	$	1,185,423	$	869,343	$	969,669	$	921,641	$	2,455,514	$	1,299,975	$	47,300	$	7,959,382

Year-to-date Gross Charge-offs	$	282	$	—	$	47	$	714	$	23	$	53	$	34	$	782	$	1,935


	December 31, 2025
	Risk Rating by Year of Origination
(dollars in thousands)	2025		2024		2023		2022		2021		2020 and Prior		Revolving		Revolving-Term		Total

Commercial Real Estate
Pass	$	480,967	$	312,777	$	322,165	$	311,087	$	328,936	$	1,047,543	$	42,300	$	—	$	2,845,775
Special mention	—		2,907		—		6,865		3,148		25,805		254		—		38,979
Substandard	—		—		3,883		1,700		11,642		19,782		—		—		37,007
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Real Estate	480,967		315,684		326,048		319,652		343,726		1,093,130		42,554		—		2,921,761
Year-to-date Gross Charge-offs	—		—		—		4,907		—		2,432		—		—		7,339

Commercial and Industrial
Pass	161,634		95,715		111,222		138,390		75,406		165,633		501,472		—		1,249,472
Special mention	—		350		2,423		1,394		3		13,611		8,179		—		25,960
Substandard	—		—		1,914		—		18,152		5,644		27,853		—		53,563
Doubtful	—		—		—		—		—		—		1,610		—		1,610
Total Commercial and Industrial	161,634		96,065		115,559		139,784		93,561		184,888		539,114		—		1,330,605
Year-to-date Gross Charge-offs	256		—		4,014		172		—		2,089		192		—		6,723

Commercial Construction
Pass	172,822		118,952		43,093		18,762		2,520		1,260		7,099		—		364,508
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		869		—		—		—		—		—		—		869
Doubtful	—		—		—		—		—		—		—		—		—
Total Commercial Construction	172,822		119,821		43,093		18,762		2,520		1,260		7,099		—		365,377
Year-to-date Gross Charge-offs	—		—		—		118		—		—		—		—		118

Business Banking
Pass	182,401		132,196		201,106		197,145		157,792		328,135		93,701		453		1,292,929
Special mention	—		394		—		427		137		2,871		4		161		3,994
Substandard	—		—		5,175		2,208		3,364		7,574		151		468		18,940
Doubtful	—		—		—		—		—		—		—		—		—
Total Business Banking	182,401		132,590		206,281		199,780		161,293		338,580		93,856		1,082		1,315,863
Year-to-date Gross Charge-offs	—		19		132		39		225		699		—		—		1,114

Consumer Real Estate
Pass	161,896		220,705		297,533		306,440		119,775		277,507		618,767		29,868		2,032,491
Special mention	—		—		—		—		—		84		—		—		84
Substandard	—		583		2,927		522		186		4,399		2,006		3,873		14,496
Doubtful	—		—		—		—		—		—		—		—		—
Total Consumer Real Estate	161,896		221,288		300,460		306,962		119,961		281,990		620,773		33,741		2,047,071
Year-to-date Gross Charge-offs	5		35		134		2		—		156		31		465		828

Other Consumer
Pass	7,016		5,253		3,919		3,869		1,090		984		59,304		9,640		91,075
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		13		—		10		143		—		39		205
Doubtful	—		—		—		—		—		—		—		—		—
Total Other Consumer	7,016		5,253		3,932		3,869		1,100		1,127		59,304		9,679		91,280
Year-to-date Gross Charge-offs	1,027		35		36		73		30		58		1		693		1,953


Pass	1,166,736		885,598		979,038		975,693		685,519		1,821,062		1,322,643		39,961		7,876,250
Special mention	—		3,651		2,423		8,686		3,288		42,371		8,437		161		69,017
Substandard	—		1,452		13,912		4,430		33,354		37,542		30,010		4,380		125,080
Doubtful	—		—		—		—		—		—		1,610		—		1,610
Total Loan Balance	$	1,166,736	$	890,701	$	995,373	$	988,809	$	722,161	$	1,900,975	$	1,362,700	$	44,502	$	8,071,957

Year-to-date Gross Charge-offs	$	1,288	$	89	$	4,316	$	5,311	$	255	$	5,434	$	224	$	1,158	$	18,075

The following tables present the aging analysis of past due loans segregated by class of loans at the dates presented:


	March 31, 2026
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Nonaccrual		Total Past Due Loans		Total Loans
Commercial real estate	$	2,815,134	$	5,829	$	—	$	15,125	$	20,954	$	2,836,088
Commercial and industrial	1,297,254		6,381		—		17,909		24,290		1,321,544
Commercial construction	390,715		—		—		869		869		391,584
Business banking	1,291,395		2,167		520		5,332		8,019		1,299,414
Consumer real estate	2,010,816		4,601		811		10,573		15,985		2,026,801
Other consumer	82,960		834		16		141		991		83,951
Total	$	7,888,274	$	19,812	$	1,347	$	49,949	$	71,108	$	7,959,382


	December 31, 2025
(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		Nonaccrual		Total Past Due Loans		Total Loans
Commercial real estate	$	2,906,576	$	—	$	—	$	15,185	$	15,185	$	2,921,761
Commercial and industrial	1,305,388		311		—		24,906		25,217		1,330,605
Commercial construction	364,508		—		—		869		869		365,377
Business banking	1,308,368		999		2,920		3,576		7,495		1,315,863
Consumer real estate	2,028,472		3,281		4,454		10,864		18,599		2,047,071
Other consumer	90,503		604		15		158		777		91,280
Total	$	8,003,815	$	5,195	$	7,389	$	55,558	$	68,142	$	8,071,957

The following tables present loans on nonaccrual status by class of loan for the year-to-date periods presented:


	March 31, 2026
(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance		Interest Income Recognized on Nonaccrual(1)
Commercial real estate	$	15,185	$	15,125	$	—	$	31
Commercial and industrial	24,906		17,909		3,375		111
Commercial construction	869		869		—		4
Business banking	3,576		5,332		2,281		34
Consumer real estate	10,864		10,573		13,917		97
Other consumer	158		141		—		—
Total	$	55,558	$	49,949	$	19,573	$	277

(1) Represents only cash payments received and applied to interest on nonaccrual loans.


	December 31, 2025
(dollars in thousands)	Beginning of Period Nonaccrual		End of Period Nonaccrual		Nonaccrual With No Related Allowance		Interest Income Recognized on Nonaccrual(1)
Commercial real estate	$	3,228	$	15,185	$	14,936	$	123
Commercial and industrial	11,173		24,906		12,585		202
Commercial construction	—		869		—		581
Business banking	2,988		3,576		—		198
Consumer real estate	10,318		10,864		—		592
Other consumer	230		158		—		3
Total	$	27,937	$	55,558	$	27,521	$	1,699

(1) Represents only cash payments received and applied to interest on nonaccrual loans.

The following tables present loans that are individually evaluated and collateral-dependent at the dates presented:


	March 31, 2026
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets
Commercial real estate	$	13,917	$	—
Commercial and industrial	—		17,848

Business banking	2,281		—


Total	$	16,198	$	17,848


	December 31, 2025
	Type of Collateral
(dollars in thousands)	Real Estate		Business Assets
Commercial real estate	$	14,936	$	—
Commercial and industrial	—		24,835




Total	$	14,936	$	24,835

The following tables present activity in the ACL for the periods presented:



	Three Months Ended March 31, 2026
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	29,357	$	29,142	$	4,400	$	11,335	$	16,297	$	2,647	$	93,178

Provision for credit losses on loans(1)	(974)		1,684		253		120		147		550		1,780
Charge-offs	—		(198)		—		(554)		(301)		(882)		(1,935)
Recoveries	2		65		—		18		38		125		248
Net (Charge-offs) Recoveries	2		(133)		—		(536)		(263)		(757)		(1,687)
Balance at End of Period	$	28,385	$	30,693	$	4,653	$	10,919	$	16,181	$	2,440	$	93,271
(1) Excludes the provision for credits losses for unfunded commitments.


	Three Months Ended March 31, 2025
(dollars in thousands)	Commercial Real Estate		Commercial and Industrial		Commercial Construction		Business Banking		Consumer Real Estate		Other Consumer		Total Loans
Allowance for credit losses on loans:
Balance at beginning of period	$	30,254	$	37,084	$	4,893	$	10,681	$	15,776	$	2,806	$	101,494

Provision for credit losses on loans(1)	(493)		(3,643)		1,017		650		160		(202)		(2,511)
Charge-offs	—		(172)		(30)		(143)		(162)		(377)		(884)
Recoveries	134		145		—		25		133		474		911
Net Recoveries (Charge-offs)	134		(27)		(30)		(118)		(29)		97		27
Balance at End of Period	$	29,895	$	33,414	$	5,880	$	11,213	$	15,907	$	2,701	$	99,010
(1) Excludes the provision for credits losses for unfunded commitments.