Loans and Allowance for Credit Losses on Loans (Tables)

6 Months Ended

Jun. 30, 2020

Allowance for Credit Losses on Loans

Schedule of loans

	June 30,		December 31,
	2020		2019
	(Dollars in thousands)
Loans held-for-investment:
Commercial	$	878,393	$	603,345
Real estate:
CRE - owner occupied		553,463		548,907
CRE - non-owner occupied		725,776		767,821
Land and construction		138,284		147,189
Home equity		112,679		151,775
Multifamily		169,637		180,623
Residential mortgages		95,033		100,759
Consumer and other		22,759		33,744
Loans		2,696,024		2,534,163
Deferred loan fees, net		(9,635)		(319)
Loans, net of deferred fees		2,686,389		2,533,844
Allowance for credit losses on loans(1)		(45,444)		(23,285)
Loans, net	$	2,640,945	$	2,510,559
(1)Allowance for credit losses on loans at June 30, 2020, Allowance for loan losses for the prior periods.

Schedule of changes in allowance for loan (credit) losses

			CRE		CRE
			Owner		Non-owner		Land &		Home		Multi-		Residential		Consumer
	Commercial		Occupied		Occupied		Construction		Equity		Family		Mortgage		and Other		Total
	(Dollars in thousands)
Beginning of period balance	$	12,801	$	7,737	$	15,645	$	2,603	$	1,746	$	1,622	$	708	$	1,841	$	44,703
Charge-offs		(465)		—		—		—		—		—		—		—		(465)
Recoveries		46		1		—		13		31		—		—		1		92
Net (charge-offs) recoveries		(419)		1		—		13		31		—		—		1		(373)
Provision for credit losses on loans		797		809		(196)		(64)		74		206		117		(629)		1,114
End of period balance	$	13,179	$	8,547	$	15,449	$	2,552	$	1,851	$	1,828	$	825	$	1,213	$	45,444

	Commercial		Real Estate		Consumer		Total
	(Dollars in thousands)
Beginning of period balance	$	15,557	$	11,671	$	90	$	27,318
Charge-offs		(76)		—		—		(76)
Recoveries		87		42		—		129
Net recoveries		11		42		—		53
Provision (credit) for loan losses		(334)		(406)		—		(740)
End of period balance	$	15,234	$	11,307	$	90	$	26,631

			Owner		Non-owner		Land &		Home		Multi-		Residential		Consumer
	Commercial		Occupied		Occupied		Construction		Equity		Family		Mortgage		and Other		Total
	(Dollars in thousands)
Beginning of period balance	$	10,453	$	3,825	$	3,760	$	2,621	$	2,244	$	57	$	243	$	82	$	23,285
Adoption of Topic 326		(3,663)		3,169		7,912		(1,163)		(923)		1,196		435		1,607		8,570
Balance at adoption on January 1, 2020		6,790		6,994		11,672		1,458		1,321		1,253		678		1,689		31,855
Charge-offs		(1,135)		—		—		—		—		—		—		(3)		(1,138)
Recoveries		255		1		—		32		54		—		—		1		343
Net (charge-offs) recoveries		(880)		1		—		32		54		—		—		(2)		(795)
Provision for credit losses on loans		7,269		1,552		3,777		1,062		476		575		147		(474)		14,384
End of period balance	$	13,179	$	8,547	$	15,449	$	2,552	$	1,851	$	1,828	$	825	$	1,213	$	45,444

	Commercial		Real Estate		Consumer		Total
	(Dollars in thousands)
Beginning of period balance	$	17,061	$	10,671	$	116	$	27,848
Charge-offs		(302)		—				(302)
Recoveries		802		84		—		886
Net recoveries		500		84		—		584
Provision (credit) for loan losses		(2,327)		552		(26)		(1,801)
End of period balance	$	15,234	$	11,307	$	90	$	26,631

Schedule of balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method

					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
	Balance		Investment		Allocated
	(Dollars in thousands)
With no related allowance recorded:
Commercial	$	2,113	$	2,113	$	—
Real estate:
CRE		5,094		5,094		—
Home Equity		360		360		—
Total with no related allowance recorded		7,567		7,567		—
With an allowance recorded:
Commercial		2,697		2,697		1,835
Total with an allowance recorded		2,697		2,697		1,835
Total	$	10,264	$	10,264	$	1,835

Schedule of loans held-for-investment individually evaluated for impairment by class of loans

	December 31, 2019
					Consumer
	Commercial		Real Estate		and other		Total
	(Dollars in thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	1,835	$	—	$	—	$	1,835
Collectively evaluated for impairment		8,618		12,750		82		21,450
Total allowance balance	$	10,453	$	12,750	$	82	$	23,285
Loans:
Individually evaluated for impairment	$	4,810	$	5,454	$	—	$	10,264
Collectively evaluated for impairment		598,535		1,891,620		33,744		2,523,899
Total loan balance	$	603,345	$	1,897,074	$	33,744	$	2,534,163

Schedule of nonperforming loans by class

						Restructured
	Nonaccrual		Nonaccrual			and Loans
	with no Specific		with Specific			over 90 Days
	Allowance for		Allowance for			Past Due
	Credit		Credit			and Still
	Losses		Losses			Accruing	Total
	(Dollars in thousands)
Commercial	$	747	$	1,669	$	668	$	3,084
Real estate:
CRE - Owner Occupied		3,679		—		—		3,679
CRE - Non-Owner Occupied		—		—		—		—
Land and construction		—		—		—		—
Home equity		898		—		—		898
Multifamily		—		—		—		—
Residential mortgages		—		—		—		—
Consumer and other		—		1,464		—		1,464
Total	$	5,324	$	3,133	$	668	$	9,125

			Restructured
			and Loans
			over 90 Days
			Past Due
			and Still
	Nonaccrual		Accruing		Total
	(Dollars in thousands)
Commercial	$	3,444	$	1,153	$	4,597
Real estate:
CRE		5,094		—		5,094
Home equity		137		—		137
Total	$	8,675	$	1,153	$	9,828

Schedule of aging of past due loans by class of loans

	June 30, 2020
	30 - 59		60 - 89		90 Days or
	Days		Days		Greater		Total
	Past Due		Past Due		Past Due		Past Due		Current		Total
	(Dollars in thousands)
Commercial	$	5,195	$	1,873	$	988	$	8,056	$	870,337	$	878,393
Real estate:
CRE - Owner Occupied		—		—		29		29		553,434		553,463
CRE - Non-Owner Occupied		—		—		—		—		725,776		725,776
Land and construction		—		—		—		—		138,284		138,284
Home equity		—		—		898		898		111,781		112,679
Multifamily		—		—		—		—		169,637		169,637
Residential mortgages		—		—		—		—		95,033		95,033
Consumer and other		1,057		—		1,464		2,521		20,238		22,759
Total	$	6,252	$	1,873	$	3,379	$	11,504	$	2,684,520	$	2,696,024

	December 31, 2019
	30 - 59		60 - 89		90 Days or
	Days		Days		Greater		Total
	Past Due		Past Due		Past Due		Past Due		Current		Total
	(Dollars in thousands)
Commercial	$	4,770	$	2,097	$	3,217	$	10,084	$	593,261	$	603,345
Real estate:
CRE - Owner Occupied		—		—		5,094		5,094		543,813		548,907
CRE - Non-Owner Occupied		—		—		—		—		767,821		767,821
Land and construction		—		—		—		—		147,189		147,189
Home equity		—		137		—		137		151,638		151,775
Multifamily		—		—		—		—		180,623		180,623
Residential mortgages		—		—		—		—		100,759		100,759
Consumer and other		—		—		—		—		33,744		33,744
Total	$	4,770	$	2,234	$	8,311	$	15,315	$	2,518,848	$	2,534,163

Schedule of amortized cost basis of collateral-dependent loans

		Collateral Type
		Real
		Estate		Business
		Property		Assets		Unsecured		Total
	(Dollars in thousands)
Commercial	$	60	$	1,478	$	131	$	1,669
Real estate:								-
CRE - Owner Occupied				-		-		-
CRE - Non-Owner Occupied		-		-		-		-
Land and construction		-		-		-		-
Home equity		-		-		-		-
Multifamily		-		-		-		-
Residential mortgages		-		-		-		-
Consumer and other		1,464		-		-		1,464
Total	$	1,524	$	1,478	$	131	$	3,133

Summary of loan portfolio by loan type and credit quality classification

														Revolving
														Loans
		Term Loans Amortized Cost Basis by Originated Period												Amortized
												2015 and		Cost
		2020		2019		2018		2017		2016		Prior		Basis		Total
	(Dollars in thousands)
Commercial:
Pass and Watch	$	404,010	$	47,578	$	36,471	$	19,571	$	10,601	$	15,674	$	292,448	$	826,353
Special Mention		30,835		-		-		-		320		-		2,607		33,762
Substandard		926		-		72		604		2,596		624		11,040		15,862
Substandard-Nonaccrual		1,449		59		340		-		178		61		329		2,416
Total		437,220		47,637		36,883		20,175		13,695		16,359		306,424		878,393
CRE - Owner Occupied:
Pass and Watch		78,779		79,282		78,384		60,021		52,486		140,208		16,443		505,603
Special Mention		37,899		-		232		-		-		2,619		-		40,750
Substandard		-		-		-		2,250		715		466		-		3,431
Substandard-Nonaccrual		3,102		548		-		-		-		29		-		3,679
Total		119,780		79,830		78,616		62,271		53,201		143,322		16,443		553,463
CRE - Non-Owner Occupied:
Pass and Watch		101,876		137,054		78,019		110,390		60,316		175,221		3,885		666,761
Special Mention		46,314		-		1,802		-		4,299		5,568		-		57,983
Substandard		1,032		-		-		-		-		-		-		1,032
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		149,222		137,054		79,821		110,390		64,615		180,789		3,885		725,776
Land and contruction:
Pass and Watch		60,938		47,934		14,255		1,560		-		1,383		2,225		128,295
Special Mention		8,406		-		-		-		-		-		-		8,406
Substandard		1,583		-		-		-		-		-		-		1,583
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		70,927		47,934		14,255		1,560		-		1,383		2,225		138,284
Home equity:
Pass and Watch		276		-		89		-		-		-		108,875		109,240
Special Mention		-		-		-		-		-		-		1,718		1,718
Substandard		-		-		-		-		-		143		680		823
Substandard-Nonaccrual		-		-		-		-		-		123		775		898
Total		276		-		89		-		-		266		112,048		112,679
Multifamily:
Pass and Watch		17,007		40,571		18,628		27,700		16,401		37,322		845		158,474
Special Mention		5,967		-		-		-		-		5,196		-		11,163
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		22,974		40,571		18,628		27,700		16,401		42,518		845		169,637
Residential mortgage:
Pass and Watch		8,607		10,237		4,970		11,011		34,304		15,889		-		85,018
Special Mention		6,848		-		-		1,285		557		1,061		-		9,751
Substandard		-		-		-		-		-		264		-		264
Substandard-Nonaccrual		-		-		-		-		-		-		-		-
Total		15,455		10,237		4,970		12,296		34,861		17,214		-		95,033
Consumer and other:
Pass and Watch		16		3,018		1,567		23		135		1,028		15,427		21,214
Special Mention		81		-		-		-		-		-		-		81
Substandard		-		-		-		-		-		-		-		-
Substandard-Nonaccrual		-		-		1,464		-		-		-		-		1,464
Total		97		3,018		3,031		23		135		1,028		15,427		22,759
Total loans	$	815,951	$	366,281	$	236,293	$	234,415	$	182,908	$	402,879	$	457,297	$	2,696,024

	December 31, 2019
	Nonclassified		Classified		Total
Commercial	$	599,143		4,202	$	603,345
Real estate:
CRE - Owner Occupied		538,229		10,678		548,907
CRE - Non-Owner Occupied		761,801		6,020		767,821
Land and construction		144,108		3,081		147,189
Home equity		149,131		2,644		151,775
Multifamily		180,623		—		180,623
Residential mortgages		100,262		497		100,759
Consumer and other		28,287		5,457		33,744
Total	$	2,501,584	$	32,579	$	2,534,163

Schedule of loans by class modified as troubled debt restructurings

	During the Six Months Ended
		June 30, 2020
				Pre-modification		Post-modification
		Number		Outstanding		Outstanding
		of		Recorded		Recorded
Troubled Debt Restructurings:		Contracts		Investment		Investment
	(Dollars in thousands)
Commercial		3	$	13	$	13
Real estate:
CRE - owner occupied		—		—		—
CRE - non-owner occupied		—		—		—
Land and construction		—		—		—
Home equity		—		—		—
Multifamily		—		—		—
Residential mortgages		—		—		—
Consumer and other		—		—		—
Total		3	$	13	$	13