Note 5 - Loans

9 Months Ended

Sep. 30, 2026

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

5. Loans

Most of the Company’s business activities are with clients located in areas with significant Asian populations in Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; and Las Vegas, Nevada. The Company also has loan clients in Hong Kong. The Company does not have a significant concentration in any single commercial industry sector and generally its loans, when secured, are secured by real property or other collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, from refinancing by other lenders, or through sale by the borrowers of the secured collateral.

The types of loans in the Company’s Consolidated Balance Sheets as of  September 30, 2026, and  December 31, 2025, were as follows:

	September 30, 2026			December 31, 2025
	($ In thousands)
Commercial loans	$	3,945,390		$	3,184,556
Construction loans		265,880			337,550
Commercial real estate loans		10,844,794			10,564,744
Residential mortgage loans		5,905,416			5,832,094
Equity lines		227,831			226,444
Installment and other loans		6,550			1,814
Gross loans	$	21,195,861		$	20,147,202
Allowance for loan losses		(224,190	)		(195,911	)
Unamortized deferred loan fees, net		(15,523	)		(14,903	)
Total loans held for investment, net	$	20,956,148		$	19,936,388

As of  September 30, 2026, and  December 31, 2025, recorded investment in non-accrual loans was $87.3 million and $112.4 million, respectively. For non-accrual loans, the amounts previously charged-off represent 5.0% and 14.4% of the contractual balances for non-accrual loans as of  September 30, 2026, and  December 31, 2025, respectively.

At  September 30, 2026, the Bank pledged $1.27 billion of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program. The Bank had borrowing capacity of $1.17 billion from the Federal Reserve Bank Discount Window at  September 30, 2026.

The following table presents non-accrual loans and the related allowance as of  September 30, 2026, and  December 31, 2025.  

	September 30, 2026
	Unpaid Principal Balance		Recorded Investment		Allowance
	($ In thousands)
With no allocated allowance:
Commercial loans	$	4,851	$	4,764	$	—
Commercial real estate loans		55,125		46,483		—
Residential mortgage loans and equity lines		19,923		19,178		—
Subtotal	$	79,899	$	70,425	$	—
With allocated allowance:
Commercial loans	$	5,042	$	2,424	$	1,125
Commercial real estate loans		841		763		9
Residential mortgage loans and equity lines		14,749		13,666		59
Subtotal	$	20,632	$	16,853	$	1,193
Total non-accrual loans	$	100,531	$	87,278	$	1,193

	December 31, 2025
	Unpaid Principal Balance		Recorded Investment		Allowance
	($ In thousands)
With no allocated allowance:
Commercial loans	$	25,154	$	14,899	$	—
Commercial real estate loans		58,213		39,874		—
Residential mortgage loans and equity lines		32,854		31,354		—
Subtotal	$	116,221	$	86,127	$	—
With allocated allowance:
Commercial loans	$	6,887	$	6,599	$	3,409
Commercial real estate loans		24,438		19,637		8,932
Subtotal	$	31,325	$	26,236	$	12,341
Total non-accrual loans	$	147,546	$	112,363	$	12,341

The following tables present the average recorded investment and interest income recognized on non-accrual loans for the period indicated:

	Three Months Ended				Nine Months Ended
	September 30, 2026				September 30, 2026
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	($ In thousands)
Commercial loans	$	7,539	$	2	$	10,070	$	6
Construction loans		2,971		—		1,001		—
Commercial real estate loans		60,919		—		60,951		—
Residential mortgage loans and equity lines		31,557		—		31,690		—
Total non-accrual loans	$	102,986	$	2	$	103,712	$	6

	Three Months Ended				Nine Months Ended
	September 30, 2025				September 30, 2025
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	($ In thousands)
Commercial loans	$	45,584	$	—	$	53,099	$	7
Construction loans		—		—		1,804		—
Commercial real estate loans		101,615		—		93,100		—
Residential mortgage loans and equity lines		27,517		—		26,737		—
Total non-accrual loans	$	174,716	$	—	$	174,740	$	7

The following tables present the aging of the loan portfolio by type as of  September 30, 2026 and  December 31, 2025:

	September 30, 2026
	Accruing
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
	($ In thousands)
Type of Loans:
Commercial loans	$	19,530	$	15,565	$	4,994	$	7,188	$	47,277	$	3,898,113	$	3,945,390
Construction loans		—		—		—		—		—		265,880		265,880
Commercial real estate loans		3,627		12,939		—		47,246		63,812		10,780,982		10,844,794
Residential mortgage loans and equity lines		—		17,615		—		32,844		50,459		6,082,788		6,133,247
Installment and other loans		—		—		—		—		—		6,550		6,550
Total loans	$	23,157	$	46,119	$	4,994	$	87,278	$	161,548	$	21,034,313	$	21,195,861

	December 31, 2025
	Accruing
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
	($ In thousands)
Type of Loans:
Commercial loans	$	13,561	$	1,376	$	—	$	21,498	$	36,435	$	3,148,121	$	3,184,556
Construction loans		—		—		—		—		—		337,550		337,550
Commercial real estate loans		5,062		6,254		1,000		59,511		71,827		10,492,917		10,564,744
Residential mortgage loans and equity lines		31,440		10,861		—		31,354		73,655		5,984,883		6,058,538
Installment and other loans		—		—		—		—		—		1,814		1,814
Total loans	$	50,063	$	18,491	$	1,000	$	112,363	$	181,917	$	19,965,285	$	20,147,202

The Company evaluates loan modifications made to borrowers experiencing financial difficulty to determine whether the modification results in a new loan under ASC 310‑20. For modifications that do not result in a new loan, the Company uses the post‑modification contractual terms, including the post‑modification contractual interest rate, when applying a discounted cash flow method to estimate expected credit losses. Loan modifications made to borrowers experiencing financial difficulty are individually evaluated. The modification may include, but is not limited to, term extensions, payment delays, interest rate reductions, or a combination of such modifications.

The following table presents the amortized cost of loans modified to borrowers experiencing financial difficulty disaggregated by class of financing receivable, type of concession granted and the financial effects of the modifications for the three and nine months ended September 30, 2026, and  September 30, 2025, by loan class and modification type.  There were  no loan modification activities for the three months ended  September 30, 2026. The tables do not include those modifications that only resulted in an insignificant payment delay.

	Nine Months Ended September 30, 2026											Financial Effects of Loan Modifications
	Term Extension		Payment Delay		Combo-Rate Reduction/Term Extension/Payment Delay		Total		Modification as a % of Loan Class			Weighted-Average Reduction in Rate			Weighted-Average Term Extension (in Years)		Weighted-Average Payment Deferral  (in Years)
	($ In thousands)
Loan Type
Commercial loans	$	5,511	$	37,931	$	5,461	$	48,903		1.24	%		0.00			0.3		0.3
Commercial real estate loans		14,739		—		6,595		21,334		0.20	%		1.62			0.7		0.9
Residential mortgage loans		—		—		206		206		0.00	%		(0.75	)		12.4		0.7
Construction loans		8,637		—		—		8,637		3.25	%		1.26			0.4		0.0
Total	$	28,887	$	37,931	$	12,262	$	79,080

	Three Months Ended September 30, 2025											Financial Effects of Loan Modifications
	Term Extension		Payment Delay		Combo-Rate Reduction/Term Extension/Payment Delay		Total		Modification as a % of Loan Class			Weighted-Average Reduction in Rate			Weighted-Average Term Extension (in Years)		Weighted-Average Payment Deferral  (in Years)
	($ In thousands)
Loan Type
Commercial loans	$	2,495	$	—	$	13,424	$	15,919		0.50	%		0.00			0.4		0.2
Commercial real estate loans		2,060		—		—		2,060		0.02	%		0.00			1.0		0.0
Construction loans		11,197		—		26,140		37,337		10.48	%		(0.31	)		0.6		0.0
Total	$	15,752	$	—	$	39,564	$	55,316

	Nine Months Ended September 30, 2025											Financial Effects of Loan Modifications
	Term Extension		Payment Delay		Combo-Rate Reduction/Term Extension/Payment Delay		Total		Modification as a % of Loan Class			Weighted-Average Reduction in Rate			Weighted-Average Term Extension (in Years)		Weighted-Average Payment Deferral  (in Years)
	($ In thousands)
Loan Type
Commercial loans	$	6,303	$	—	$	13,424	$	19,727		0.61	%		0.00			1.1		0.2
Commercial real estate loans		2,060		—		4,014		6,074		0.06	%		(0.91	)		2.1		0.5
Residential mortgage loans		—		—		217		217		0.00	%		0.00			0.0		1.9
Construction loans		11,197		—		26,140		37,337		10.48	%		(0.31	)		0.6		0.0
Total	$	19,560	$	—	$	43,795	$	63,355

The Company considers a loan to be in payment default once it is 90 days contractually past due under the modified terms. The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. 

There were no loans that received modifications within the twelve months preceding payment default that subsequently defaulted during the three months and nine months ended  September 30, 2026 and  September 30, 2025.

The following table presents the performance of loans that were modified in the twelve months ended  September 30, 2026, and 2025.

	As of September 30, 2026
	Current		30–89 Days Past Due		90+ Days Past Due		Total
	($ In thousands)
Loan Type
Commercial loans	$	43,443	$	5,460	$	—	$	48,903
Commercial real estate loans		21,334		—		—		21,334
Residential mortgage loans		206		—		—		206
Construction loans		8,637		—		—		8,637
Total	$	73,620	$	5,460	$	—	$	79,080

	As of September 30, 2025
	Current		30–89 Days Past Due		90+ Days Past Due		Total
	($ In thousands)
Loan Type
Commercial loans	$	12,227	$	7,500	$	—	$	19,727
Commercial real estate loans		6,074		—		—		6,074
Construction loans		37,337		—		—		37,337
Residential mortgage loans		217		—		—		217
Total	$	55,855	$	7,500	$	—	$	63,355

Under the Company’s internal underwriting policy, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification in order to determine whether a borrower is experiencing financial difficulty.

As of  September 30, 2026, there were no commitments to lend additional funds to borrowers experiencing financial difficulty and whose loans were modified.

As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. Loans are risk rated based on analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of sources of repayment, the borrower’s current financial and liquidity status and other relevant information. The risk rating categories can be generally described by the following grouping for non-homogeneous loans: 

● Pass/Watch – These loans range from minimal credit risk to higher than average, but still acceptable, credit risk. The loans have sufficient sources of repayment to repay the loans in full, in accordance with all the terms and conditions and remain currently well protected by collateral values.

● Special Mention – Borrower is fundamentally sound, and loan is currently protected but adverse trends are apparent that, if not corrected, may affect ability to repay. Primary source of loan repayment remains viable but there is increasing reliance on collateral or guarantor support.

● Substandard – These loans are inadequately protected by current sound net worth, paying capacity, or collateral. Well-defined weaknesses exist that could jeopardize repayment of debt. Loss may not be imminent, but if weaknesses are not corrected, there is a good possibility of some loss.

● Doubtful – The possibility of loss is extremely high, but due to identifiable and important pending events (which may strengthen the loan), a loss classification is deferred until the situation is better defined.

● Loss – These loans are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.

The following table summarizes the Company’s loans held for investment and current year-to-date gross write-offs as of  September 30, 2026, and  December 31, 2025, presented by loan portfolio segments, internal risk ratings and vintage year. The vintage year is the year of origination, renewal or major modification. Revolving Loans that are converted to term loans presented in the table below are excluded from the term loans by vintage year columns.

	Loans Amortized Cost Basis by Origination Year
September 30, 2026	2026		2025		2024		2023		2022		Prior		Revolving Loans		Revolving Converted to Term Loans		Total
	($ In thousands)
Commercial loans
Pass/Watch	$	517,548	$	376,222	$	169,974	$	177,681	$	149,358	$	200,911	$	2,216,913	$	7,451	$	3,816,058
Special Mention		1,547		13,074		3,968		2,094		1,032		3,664		37,435		—		62,814
Substandard		30		11,559		—		12,979		1,888		11,906		23,526		927		62,815
Total	$	519,125	$	400,855	$	173,942	$	192,754	$	152,278	$	216,481	$	2,277,874	$	8,378	$	3,941,687
YTD gross write-offs	$	—	$	74	$	2,232	$	309	$	2,204	$	2,848	$	3,308	$	—	$	10,975
Construction loans
Pass/Watch	$	52,643	$	109,294	$	29,745	$	28,464	$	—	$	24,563	$	2,346	$	—	$	247,055
Substandard		8,114		—		—		4,817		—		3,820		—		—		16,751
Total	$	60,757	$	109,294	$	29,745	$	33,281	$	—	$	28,383	$	2,346	$	—	$	263,806
YTD gross write-offs	$	—	$	—	$	—	$	—	$	8,810	$	—	$	—	$	—	$	8,810
Commercial real estate loans
Pass/Watch	$	1,592,518	$	1,845,735	$	1,138,664	$	1,438,120	$	1,317,854	$	2,688,482	$	250,295	$	513	$	10,272,181
Special Mention		32,672		16,254		34,137		81,108		103,403		51,386		8,600		—		327,560
Substandard		2,424		2,160		36,902		24,576		59,433		111,116		391		—		237,002
Total	$	1,627,614	$	1,864,149	$	1,209,703	$	1,543,804	$	1,480,690	$	2,850,984	$	259,286	$	513	$	10,836,743
YTD gross write-offs	$	—	$	—	$	—	$	—	$	—	$	19,245	$	—	$	—	$	19,245
Residential mortgage loans
Pass/Watch	$	827,519	$	849,858	$	367,606	$	774,598	$	813,731	$	2,218,478	$	—	$	—	$	5,851,790
Special Mention		—		—		—		—		—		1,532		—		—		1,532
Substandard		13		3,840		3,160		6,135		9,794		26,948		—		—		49,890
Total	$	827,532	$	853,698	$	370,766	$	780,733	$	823,525	$	2,246,958	$	—	$	—	$	5,903,212
YTD gross write-offs	$	—	$	—	$	—	$	16	$	—	$	—	$	—	$	—	$	16
Equity lines
Pass/Watch	$	—	$	—	$	—	$	—	$	—	$	—	$	211,285	$	15,923	$	227,208
Substandard		—		—		—		—		—		—		884		248		1,132
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	212,169	$	16,171	$	228,340
YTD gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Installment and other loans
Pass/Watch	$	5,925	$	563	$	—	$	—	$	62	$	—	$	—	$	—	$	6,550
Total	$	5,925	$	563	$	—	$	—	$	62	$	—	$	—	$	—	$	6,550
YTD gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total loans	$	3,040,953	$	3,228,559	$	1,784,156	$	2,550,572	$	2,456,555	$	5,342,806	$	2,751,675	$	25,062	$	21,180,338
Total YTD gross write-offs	$	—	$	74	$	2,232	$	325	$	11,014	$	22,093	$	3,308	$	—	$	39,046

	Loans Amortized Cost Basis by Origination Year
December 31, 2025	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Converted to Term Loans		Total
	($ In thousands)
Commercial loans
Pass/Watch	$	384,065	$	190,685	$	220,174	$	154,865	$	157,979	$	85,858	$	1,702,322	$	6,269	$	2,902,217
Special Mention		—		33,459		—		1,462		5,000		3,875		117,738		—		161,534
Substandard		16,414		2,166		16,962		2,479		2,615		10,443		61,790		1,031		113,900
Doubtful		—		—		—		1,805		—		297		—		—		2,102
Total	$	400,479	$	226,310	$	237,136	$	160,611	$	165,594	$	100,473	$	1,881,850	$	7,300	$	3,179,753
YTD gross write-offs	$	—	$	175	$	715	$	2,752	$	4,469	$	12,503	$	12,487	$	—	$	33,101
Construction loans
Pass/Watch	$	86,893	$	69,113	$	37,801	$	68,635	$	30,283	$	—	$	1,298	$	—	$	294,023
Special Mention		—		—		9,235		—		—		—		—		—		9,235
Substandard		—		—		—		—		26,060		6,636		—		—		32,696
Total	$	86,893	$	69,113	$	47,036	$	68,635	$	56,343	$	6,636	$	1,298	$	—	$	335,954
YTD gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate loans
Pass/Watch	$	1,909,540	$	1,286,856	$	1,673,226	$	1,442,872	$	1,290,175	$	2,184,774	$	206,139	$	—	$	9,993,582
Special Mention		29,745		58,491		74,142		113,065		32,074		33,062		22,214		—		362,793
Substandard		2,589		15,069		11,520		26,772		59,915		63,004		1,724		1,208		181,801
Doubtful		—		—		—		—		—		17,843		—		—		17,843
Total	$	1,941,874	$	1,360,416	$	1,758,888	$	1,582,709	$	1,382,164	$	2,298,683	$	230,077	$	1,208	$	10,556,019
YTD gross write-offs	$	—	$	—	$	—	$	—	$	930	$	3,632	$	—	$	—	$	4,562
Residential mortgage loans
Pass/Watch	$	980,403	$	488,518	$	899,547	$	905,719	$	688,469	$	1,826,904	$	—	$	—	$	5,789,560
Special Mention		—		—		—		—		—		1,571		—		—		1,571
Substandard		47		2,140		5,252		7,585		4,764		20,801		—		—		40,589
Total	$	980,450	$	490,658	$	904,799	$	913,304	$	693,233	$	1,849,276	$	—	$	—	$	5,831,720
YTD gross write-offs	$	—	$	74	$	—	$	—	$	—	$	—	$	—	$	—	$	74
Equity lines
Pass/Watch	$	—	$	—	$	—	$	—	$	—	$	—	$	209,256	$	15,853	$	225,109
Substandard		—		—		—		—		—		—		1,494		436		1,930
Total	$	—	$	—	$	—	$	—	$	—	$	—	$	210,750	$	16,289	$	227,039
YTD gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Installment and other loans
Pass/Watch	$	1,635	$	108	$	—	$	71	$	—	$	—	$	—	$	—	$	1,814
Total	$	1,635	$	108	$	—	$	71	$	—	$	—	$	—	$	—	$	1,814
YTD gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total loans	$	3,411,331	$	2,146,605	$	2,947,859	$	2,725,330	$	2,297,334	$	4,255,068	$	2,323,975	$	24,797	$	20,132,299
Total YTD gross write-offs	$	—	$	249	$	715	$	2,752	$	5,399	$	16,135	$	12,487	$	—	$	37,737

Allowance for Credit Losses

The Company has an allowance framework under ASC Topic 326 for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. The measurement of the allowance for credit losses is based on management’s best estimate of lifetime expected credit losses inherent in the Company’s relevant financial assets. The forward-looking concept of current expected credit loss (“CECL”) approach requires loss estimates to consider historical experience, current conditions and reasonable and supportable economic forecasts of future events and circumstances.

The ACL is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Balance Sheets (Unaudited). The amortized cost basis of loans does not include accrued interest receivable, which is included in "accrued interest receivable" on the Consolidated Balance Sheets. The "Provision for credit losses" on the Consolidated Statements of Operations and Comprehensive Income (Unaudited) is a combination of the provision for loan losses and the provision for unfunded loan commitments.

Management estimates expected credit losses using a combination of historical loss experience, internal credit risk metrics, borrower‑specific information, and external economic forecasts. Historical loss data accounts for portfolio composition, delinquency trends, and other relevant credit indicators. The Company incorporates forward‑looking information by applying reasonable and supportable forecasts of key macroeconomic variables, including GDP, unemployment rates, and real estate market conditions, which are updated regularly and applied consistently across loan portfolios.

Under the CECL methodology, quantitative and qualitative loss factors are applied to our population of loans on a collective pool basis when similar risk characteristics exist. Loans that do not share similar risk characteristics with pooled loans include loans individually evaluated due to credit deterioration, borrower‑specific circumstances and loan modifications made to borrowers experiencing financial difficulty. Expected credit losses for individually evaluated loans are measured using discounted expected cash flows or, for collateral‑dependent loans, the fair value of collateral less estimated costs to sell.

Quantitative Factors

The Company evaluates expected credit losses for loan pools with similar risk characteristics using quantitative models that incorporate historical loss experience, borrower credit attributes, collateral characteristics, and projected economic conditions. Loan portfolios are segmented into groups such as residential mortgages, commercial and industrial loans, construction loans, and various classes of commercial real estate based on common risk characteristics. The quantitative models estimate lifetime expected credit losses by considering contractual cash flows and expected prepayments, and the impact of forecasted macroeconomic conditions.

The quantitative framework generally considers the probability that a borrower will default (“probability of default” or PD), the expected severity of loss in the event of default (“loss given default” or LGD), and the expected exposure at the time of default (“exposure at default” or EAD). These components are influenced by historical performance, loan structure, collateral type, and forecasted macroeconomic conditions. The models estimate lifetime expected credit losses by considering contractual cash flows and expected prepayments, and the impact of forecasted economic conditions.

The Company applies an eight quarter reasonable and supportable forecast period followed by a four quarter systematic reversion to long‑term historical loss experience. Multiple economic scenarios may be considered in developing the forecast, and management applies judgment in determining the weighting of those scenarios.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals, and modifications unless such options are included in the original or modified contract and are not unconditionally cancellable by the Company.

For certain smaller portfolios with limited historical loss experience, such as SBA loans and HELOCs, the Company applies a simplified loss‑rate approach that incorporates historical performance, forecasted economic conditions, and reversion to long‑term loss expectations.

Qualitative Factors

The Company applies qualitative adjustments to reflect factors not fully captured in the quantitative models, including changes in underwriting practices, borrower concentrations, subportfolio growth, competitive dynamics, regulatory developments, and economic uncertainty. Qualitative adjustments also consider emerging risks, model limitations, and credit trends not yet reflected in historical data, as well as collateral value considerations for certain loan types.

The Company’s CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology are subjective in nature including, among other things:

● Segmenting the loan portfolio

● Determining the amount of loss history to consider

● Evaluating model inputs, assumptions, and data sources

● Assessing expected prepayment behavior

● Selecting and weighting the most appropriate reasonable and supportable ("R&S") economic forecast scenario

● Determining the length and structure of the R&S forecast and reversion periods

● Estimating expected utilization rates on unfunded loan commitments

● Assessing relevant and appropriate qualitative factors.

In addition, the CECL methodology is dependent on economic forecasts that are inherently imprecise and subject to change from period to period. Although the allowance for credit losses is considered by management to be appropriate, there can be no assurance that it will be sufficient to absorb future losses.

Management believes the allowance for credit losses is appropriate based on the Company’s loan portfolio, associated unfunded commitments, credit risk ratings, and other relevant information available.

Individually Evaluated Loans 

When a loan no longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the allowance for loan losses on an individual loan basis. Generally, the allowance for loan losses for individually evaluated loans is measured as the difference between the recorded value of the loans and the fair value of the collateral. For loans evaluated individually, the Company uses one of two different asset valuation measurement methods: (1) the fair value of collateral less costs to sell; or (2) the present value of expected future cash flows. If an individually evaluated loan is determined to be collateral dependent, the Company applies the fair value of the collateral less costs to sell method. If an individually evaluated loan is determined not to be collateral dependent, the Company uses the present value of future cash flows.

Unfunded Loan Commitments

Unfunded loan commitments are generally related to providing credit facilities to clients of the Bank and are not actively traded financial instruments. These unfunded commitments are disclosed as off-balance sheet financial instruments in Note 9 in the Notes to Consolidated Financial Statements (Unaudited).

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company, using the same loss factors as used for the allowance for loan losses. The reserve for unfunded loan commitments uses a one-year historical usage rate of the unfunded commitments during the contractual life of the commitments. The allowance for unfunded commitments is included in “other liabilities” on the Consolidated Balance Sheets. Changes in the allowance for unfunded commitments are included in the provision for credit losses.

The following tables set forth activity in the allowance for loan losses and allowance for unfunded commitments by portfolio segment for the three and nine months ended September 30, 2026, and  September 30, 2025.

										Residential
							Commercial			Mortgage Loans		Installment
	Commercial			Construction			Real Estate			and		and Other
	Loans			Loans			Loans			Equity Lines		Loans		Total
	($ In thousands)
Allowance for Loan Losses:
June 30, 2026 Ending Balance	$	46,374		$	15,153		$	134,102		$	23,260	$	7	$	218,896
(Reversal)/provision for expected credit losses		(8,099	)		5,029			26,751			6,883		16		30,580
Charge-offs		(261	)		(8,810	)		(17,876	)		—		—		(26,947	)
Recoveries		1,660			1			—			—		—		1,661
Net recoveries/(charge-offs)		1,399			(8,809	)		(17,876	)		—		—		(25,286	)
September 30, 2026 Ending Balance	$	39,674		$	11,373		$	142,977		$	30,143	$	23	$	224,190
Allowance for unfunded credit commitments:
June 30, 2026 Ending Balance	$	11,611		$	3,042		$	265		$	—	$	—	$	14,918
(Reversal)/provision for expected credit losses		(3,103	)		1,117			6			—		—		(1,980	)
September 30, 2026 Ending Balance	$	8,508		$	4,159		$	271		$	—	$	—	$	12,938

									Residential
						Commercial			Mortgage Loans		Installment
	Commercial			Construction		Real Estate			and		and Other
	Loans			Loans		Loans			Equity Lines		Loans			Total
	($ In thousands)
Allowance for Loan Losses:
June 30, 2025 Ending Balance	$	40,842		$	5,434	$	106,773		$	20,465	$	17		$	173,531
Provision/(reversal) for expected credit losses		13,855			966		11,054			2,892		(5	)		28,762
Charge-offs		(16,173	)		—		(314	)		—		—			(16,487	)
Recoveries		547			5		285			4		—			841
Net (charge-offs)/recoveries		(15,626	)		5		(29	)		4		—			(15,646	)
September 30, 2025 Ending Balance	$	39,071		$	6,405	$	117,798		$	23,361	$	12		$	186,647
Allowance for unfunded credit commitments:
June 30, 2025 Ending Balance	$	7,590		$	2,248	$	54		$	—	$	—		$	9,892
(Reversal)/provision for expected credit losses		(872	)		698		143			—		—			(31	)
September 30, 2025 Ending Balance	$	6,718		$	2,946	$	197		$	—	$	—		$	9,861

										Residential
							Commercial			Mortgage Loans			Installment
	Commercial			Construction			Real Estate			and			and Other
	Loans			Loans			Loans			Equity Lines			Loans		Total
	($ In thousands)
Allowance for Loan Losses:
December 31, 2025 Ending Balance	$	39,123		$	6,475		$	125,665		$	24,641		$	7	$	195,911
Provision for expected credit losses		4,082			13,707			34,255			5,476			16		57,536
Charge-offs		(10,975	)		(8,810	)		(19,245	)		(16	)		—		(39,046	)
Recoveries		7,444			1			2,302			42			—		9,789
Net (charge-offs)/recoveries		(3,531	)		(8,809	)		(16,943	)		26			—		(29,257	)
September 30, 2026 Ending Balance	$	39,674		$	11,373		$	142,977		$	30,143		$	23	$	224,190
Allowance for unfunded credit commitments:
December 31, 2025 Ending Balance	$	9,067		$	3,095		$	279		$	—		$	—	$	12,441
(Reversal)/provision for expected credit losses		(559	)		1,064			(8	)		—			—		497
September 30, 2026 Ending Balance	$	8,508		$	4,159		$	271		$	—		$	—	$	12,938

										Residential
							Commercial			Mortgage Loans			Installment
	Commercial			Construction			Real Estate			and			and Other
	Loans			Loans			Loans			Equity Lines			Loans		Total
	($ In thousands)
Allowance for Loan Losses:
December 31, 2024 Ending Balance	$	57,796		$	8,185		$	79,597		$	16,181		$	6	$	161,765
Provision/(reversal) for expected credit losses		7,897			(1,786	)		41,889			7,240			6		55,246
Charge-offs		(27,634	)		—			(4,153	)		(74	)		—		(31,861	)
Recoveries		1,012			6			465			14			—		1,497
Net (charge-offs)/recoveries		(26,622	)		6			(3,688	)		(60	)		—		(30,364	)
September 30, 2025 Ending Balance	$	39,071		$	6,405		$	117,798		$	23,361		$	12	$	186,647
Allowance for unfunded credit commitments:
December 31, 2024 Ending Balance	$	7,780		$	1,896		$	—		$	—		$	—	$	9,676
(Reversal)/provision for expected credit losses		(1,062	)		1,050			197			—			—		185
September 30, 2025 Ending Balance	$	6,718		$	2,946		$	197		$	—		$	—	$	9,861

During the nine months ended  September 30, 2026, the Company transferred $24.6 million in commercial loans held for investment to loans held for sale. Loans transferred to held-for-sale are recorded at the lower of cost or fair value at the time of transfer, with any write-down recognized through the allowance for credit losses. During the nine months ended  September 30, 2026, the Company sold $11.0 million in commercial loans held for sale.